Border security contract worth up to $10 billion awarded to Bermuda company

Tuesday, June 1st 2004, 4:44 pm

By: News On 6

WASHINGTON (AP) _ Accenture LLP, a technology and management consulting company, was awarded a government contract Tuesday worth up to $10 billion to develop and expand biometric technology for checking identities of foreigners visiting America.

The system, known as US-VISIT, requires foreigners traveling with visas to be fingerprinted and photographed upon entering the United States at a major airport or seaport. Other types of biometrics, such as iris scans, exist, but they are not now used in US-VISIT.

The Department of Homeland Security awarded Accenture the contract over two other bidders, Lockheed Martin, based in Bethesda, Md., and Computer Sciences Corp. of El Segundo, Calif. Accenture's parent company is Accenture Ltd., which is incorporated in Bermuda.

Accenture stock closed Tuesday up 75 cents at $25.36 a share. Accenture LLP is based in Reston, Va.

The contract is for five years with five one-year options beyond then. Homeland Security officials put its value at between $10 million and $10 billion. It was announced by Asa Hutchinson, the department's undersecretary for border and transportation security.

``I really don't think you could overstate the importance of this responsibility in terms of the security of our nation,'' Hutchinson said. ``If you look at the 9/11 hijacker terrorists, they came here in violation of our immigration laws.''

The 19 hijackers entered the country with legal visas, but three had violated terms of their visas, including some who overstayed their visas during different visits.

Accenture said in a statement that it would develop a ``virtual border'' that stretches beyond U.S. boundaries to help the Department of Homeland Security assess security risks of U.S.-bound travelers.

The contract award drew some criticism from Capitol Hill because the parent company is incorporated in Bermuda.

Rep. Lloyd Doggett, D-Texas, contended the company has an unfair advantage over competitors because it is incorporated in Bermuda and is not subject to certain U.S. taxes. One of the Accenture subcontractors is Dell Corp., Inc., based in Round Rock, Texas. Some people employed by Dell live in Doggett's district.

``Our security is undermined by corporations that devise ways to avoid paying their share of the cost of keeping our homeland secure,'' Doggett said.

Republicans have blamed high U.S. taxes for forcing the companies to move offshore.

Roxanne Taylor, an Accenture spokeswoman, said the company pays U.S. taxes on business it does in the United States ``just as we pay tax in each of the countries where we operate.''

The US-VISIT system began operating in 115 airports and 14 seaports in January. By September, foreigners traveling on passports, without visas, will be required to go through the U.S.-VISIT process as well.

By the end of the year, the department is to have a similar system in place at the country's 50 busiest land ports. It must also have a system to keep track of whether foreigners leave when required.

Dennis Murphy, a Homeland Security spokesman, said the land border system is a far greater challenge. In 2002, 358.3 million U.S. and non-U.S. citizens entered the United States through the nation's land borders.

Accenture bid $72 million for the first year of the contract, which includes management of the program and helping Homeland Security meet this year's deadline for placing the system at the 50 busiest land ports. Homeland Security officials would not immediately say whether Accenture submitted the lowest bid.

Accenture is a publicly traded company with more than $11.82 billion net revenues reported in 2003, according to the company's Web site. It was formed from a group of partnerships and corporations coordinated through a Switzerland-based company called Andersen Consulting, which had split from the Chicago-based Arthur Andersen accounting firm.