DHS cancels $450M award to CACI

Thursday - 5/12/2011, 4:02pm EDT

By Jason Miller
Executive Editor
Federal News Radio

The Homeland Security Department has cancelled its $450 million contract with CACI to update its back-office systems.

Industry and Congressional sources confirm that DHS let CACI know of its plans today not to go forward with the Transformation and System Consolidation (TASC) contract.

Under TASC, CACI was to provide an integrated financial management, asset management and acquisition management system. The vendor also was to provide program management, change management and integration services to implement and sustain the new system.

An industry source said DHS offered no more details on what they will do next after cancelling the award.

"The Department of Homeland Security has reportedly made a decision today to cancel its procurement of a major financial system, and I am glad we will have a chance to discuss that issue tomorrow at our hearing with the department's acting Chief Financial Officer Peggy Sherry," said Rep. Todd Platts (R-Pa.), chairman of the Oversight and Government Reform Subcommittee on Government Organization, Efficiency and Financial Management.

Sherry is scheduled to testify on the state of DHS financial management at 10 a.m. Friday before the committee.

Platts said DHS already has failed with its eMerge2 financial management system after spending $9 million, and now there is more wasted money on TASC.

"If the department is taking a new approach, we look forward to hearing how that change in focus will help DHS reach its goals," he said.

DHS decided to cancel the award to CACI, which it made in November, after the Government Accountability Office upheld the protest by GCE in March.

Requests to DHS for comment on the decision were not immediately returned. A GCE spokesperson would not comment on DHS's decision.

"CACI remains confident that our winning solution brought the best value and innovation to DHS and that was clearly why we were originally awarded the program. CACI stands ready to support DHS in the future and believe we have the best offering to bring DHS and its components together to fulfill their critical mission to national security," said CACI Executive Vice President Jody Brown in an emailed statement.

Another source, who requested anonymity, said CACI tried to negotiate with GCE to bring them on to the contract. The source said CACI offered GCE 40 percent of the work under the contract to resolve the protest. But other sources say the negotiations broke down over other issues.

DHS components continue to use disparate and outdated systems, which is what TASC was trying to address since 2003.

TASC was DHS' second attempt to integrate up to eight different financial management systems. In September 2004, DHS awarded a $229 million contract to BearingPoint. But after about $52 million and 18 months, DHS canceled that contract too.

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