AOH :: ISN-1772.HTM

FBI Delays Awarding Contract For Computer-System Overhaul

FBI Delays Awarding Contract For Computer-System Overhaul
FBI Delays Awarding Contract For Computer-System Overhaul 

December 3, 2005

FBI officials, nervous about making another costly mistake overhauling
the agency's antiquated computer system, have postponed awarding the
contract for the high-profile job until next year.

Two of the nation's biggest defense contractors -- Lockheed Martin
Corp. and Northrop Grumman Corp. -- are competing for the
information-technology system, dubbed Sentinel. Federal Bureau of
Investigation officials were scheduled to announce the winner last
month. But they have postponed the selection until at least early next
year, according to two government officials.

The delay is in part because of a desire to avoid the mistakes that
plagued Sentinel's disastrous predecessor, the Virtual Case File
system. FBI Director Robert Mueller pulled the plug on that project in
April after four years and about $170 million.

"At this time, we are currently in the middle of source selection, so
it would be inappropriate to provide a specific release date," said
FBI spokesman Richard Kolko. FBI officials have been seeking
additional information for weeks from the two companies and haven't
yet made a recommendation to senior FBI officials.

Much is riding on the project's success. Congress and other overseers
pilloried the FBI for its reliance on paper records, forms and file
cabinets. The FBI only last year completed the rollout of the Internet
to its agents and analysts. And even though the bureau installed a
computerized case-management system in the mid-1990s, it relied
largely on aging, less-agile technology to do so. And it did little to
eliminate the department's notorious number of paper forms --
currently numbering more than 1,000.

Having been hauled before Congress numerous times to explain the
bureau's technology problems, Mr. Mueller has staked his legacy on
installing a system that will streamline internal processes, speed
investigations and improve information-sharing with other agencies.  
The Sept. 11 commission criticized the FBI's lack of information
sharing that could have helped prevent the terrorist attacks.

"There is no agency that needs the best information-sharing mechanisms
more than the FBI," Attorney General Alberto Gonzales said in a press
briefing on Friday. "Bob [Mueller's] focused on it. I'm focused on it.  
The president is focused on it and so are members of Congress."

Lockheed, of Bethesda, Md., and Los Angeles-based Northrop are the
only two bidders for the project, which likely would total in the
hundreds of millions of dollars. No target price has been released.  
Industry and government officials have expressed surprise that no
other bidders emerged but said the intense scrutiny of the project may
have been a disincentive. Science Applications International Corp.,
which handled the earlier project, was criticized publicly when Mr.  
Mueller canceled it.

Also, the window of opportunity to bid was fairly narrow -- the
request for proposals went out in August with responses due in
October. Further, bidders had to put together a working prototype.

FBI Chief Information Officer Zalmai Azmi said some potential vendors
decided to team up rather than compete on their own. The Lockheed
team, for example, includes Accenture Ltd., Computer Sciences Corp.,
CACI International Inc. and others. Northrop hasn't disclosed its

Industry officials acknowledge the job is enormous. "This is a big
complicated system" because of the variety of issues the FBI
investigates -- such as terrorism, white-collar crime, kidnappings and
insurance fraud, said one industry executive who asked not to be
identified because of the ongoing competition. In white-collar
investigations, for example, often "bank records all have to be pulled
into the case-file system, and some of these cases have 13 million
financial transactions," this person said.

With a wide variety of investigations, the FBI must be able to collect
and store information in several different systems -- top secret,
secret, classified, and sensitive but unclassified -- and any given
document might contain information that falls into all four
categories. Thus, the new system needs strict security controls to
prevent information from falling into the wrong hands, such as in the
case of rogue FBI agent Robert Hanssen, sentenced to life in prison
for stealing and selling secrets to the Russians over two decades.

Lockheed and Northrop are banking on their expertise integrating
sophisticated weapons systems for the military to give them an edge on
the FBI's problems. And both companies also have experience working
with the Justice Department and the FBI on other projects.

Write to Anne Marie Squeo at annemarie.squeo @

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