Defense IT contracts could get the snip, as Obama administration cuts budgets
With mounting pressure to deal with the country's record $1.5 trillion deficit, the Obama administration is on the prowl for cuts, and defense contractors are bracing - including some of the biggest players in Top Secret America.
Since the Sept. 11 terrorist attacks, billions of dollars have been spent to support national security efforts, including those in Top Secret America. But there's a push by the administration to look more closely at the spending and the value that the government is getting for its money. This comes on top of Defense Secretary Robert Gates' proposal to cut 10 percent of the funding for work contractors do for intelligence agencies.
The Obama administration plans to review 26 government information technology projects, worth a total of $30 billion, as part of an effort to trim or cancel contracts that aren't meeting their goals, according to a recent Bloomberg article.
The message: Shape up or ship out.
Vivek Kundra, the U.S. government's chief information officer who is housed in the Office of Management and Budget, said in a recent conference call that the Washington culture of "throwing good money after bad money" needs to end.
"If these projects can't be turned around, if they don't add value, we will take the appropriate actions," he said. "They may be discontinued."
Kundra said the White House worked with federal agencies to determine which projects should be included on the "high priority" list to try to make them more efficient. He didn't say when a decision would be made on projects that could end.
The IT projects coming under scrutiny include:
*IBM's part of a $4.5 billion deal to track cargo for the Department of Homeland Security.
*A $1.5 billion Lockheed Martin project to update air-traffic control equipment.
*A $251 million contract for Raytheon to work on the government's patent processing project.
*A $350 million contract for AT&T to improve the Treasury Department's telecommunications system.
*A $281 million deal for Computer Sciences Corp. to assist in processing patent applications.
IBM and AT&T told Bloomberg that they couldn't immediately comment and they didn't respond on Monday for comments from the Post. A Lockheed Martin spokeswoman said in an emailed statement, "We appreciate the government's focus on IT program execution, and we are working in partnership with our customers to ensure all of our programs support our customers' missions and deliver value to citizens." A spokesman for Raytheon wouldn't comment on the government's review of his company's work. Jon Kasle of Raytheon said, "We take our performance very seriously." CSC's spokesman Chuck Taylor also said he had no comment.
Obama's efforts to look more closely at IT contracts hits right at the heart of much of the work done in Top Secret America. Companies that sell their information technology services are by far the most numerous. There are an estimated 800 firms that do nothing but IT work such as making computer systems talk to each other to creating hardware and software that sorts and analyzes large chunks of data.
While contractors know they're going to have to reinvent themselves in part as the government looks for cutbacks, it's also well known that IT is one area that won't get decimated because of the government's dependence on these firms. Take the giant Office of Naval Intelligence in Suitland, for example. The Top Secret America series found that employees of 70 information technology companies keep the place running to track, store and process communications and intelligence to and from the entire U.S. naval fleet and commercial vessels worldwide.
Those contractors doing work in Top Secret IT work are well positioned to state their case as needed players. Over the last two election cycles, the top 10 companies in Top Secret America's list of IT contractors have made $5.7 million in contributions to political action committees - $3.2 million to Democrats, and $2.5 million to Republicans, according to OpenSecret.org. Plus, the top 10 companies have spent $135.3 million in the last two years on lobbying Congress.
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