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FBI ripped for IT upgrade costs

Auditors criticize the agency for more than $17 million in "questionable contractor costs" and missing equipment.

The FBI squandered $10.1 million on "questionable contractor costs"--including custom-made ink pens and highlighters--and another $7.6 million on missing equipment while upgrading its computer systems, government auditors reported.

Since mid-2001, the FBI has been undertaking a massive project called Trilogy, aimed at ushering its computer systems into the 21st century, and the agency has already reached $500 million in reported costs.

One stage of the project--building a new infrastructure--was completed in April 2004. But work on a revamped electronic case-management software system has stalled, though the FBI said last week that it had awarded its main contract for the system, known as Sentinel, to defense tech giant Lockheed Martin. The agency expects that endeavor to cost $425 million over the next six years.

An 87-page report (click here for PDF) released Monday by the Government Accountability Office faults the FBI for a number of "weaknesses" in its financial dealings with contractors, including incorrect billings for overtime hours worked, potentially inflated wages, excessive and first-class airfare costs, and other invoice anomalies.

For example, Computer Sciences Corporation (CSC), one of the FBI's subcontractors, charged the agency $456,211 for services described only as "other direct costs." When the GAO probed the company for more information, it landed on an e-mail exchange hinting that CSC probably didn't have enough information to approve the charge but did so anyway.

Some more explicitly identified expenses also raised questions for government auditors. For instance, CACI, a subcontractor hired to do training for the project, billed the FBI for more than $50,000 to cover the cost of custom-made highlighters and pens.

The GAO faulted the FBI at length for its travel spending. According to federal regulations, all travelers reimbursed by the government must fly coach or economy class unless first-class travel is properly authorized and justified. Auditors determined that no documentation provided by the FBI or CSC could justify 19 first-class tickets, costing more than $20,000, 75 "unusually expensive" coach-class tickets, totaling more than $100,000, and other pricey fares.

The FBI was also unable to locate 1,200 pieces of equipment, including desktop and laptop computers, printers and servers, the auditors reported. In general, the agency has failed for years to keep adequate records of the gadgets it purchases, leaving the devices prone to being "lost or stolen without detection," the report charged.

Overreliance on contractors to keep tabs on equipment and other records was largely to blame for the mishaps, the auditors suggested. They recommended 27 courses of action, including more careful vetting of expenses, closer documentation of contractor charges, and revising agency policies to track equipment with a greater level of detail.

FBI representatives did not respond to requests for comment Tuesday. In its written response to the GAO, the agency said it had "accounted for" more than 1,000 of the missing or improperly documented items as of January 2006. It also said it agreed with GAO's recommendations and was committed to making improvements in its management processes.