Homeland Security IG Faults Award to Alaska Firm The Customs and Border Protection agency improperly awarded a $475 million sole-source contract to Chenega Technology Services Corp., an Alaska Native 8(a) firm, according to the Homeland Security Department’s inspector general. “This action prevented eligible small businesses from competing for a nearly $475 million contract and might not provide the best value for the government, IG Richard Skinner wrote. Chenega was awarded the 10-year contract in 2003 to provide maintenance and repair of metal detectors, x-ray machines and explosives trace detectors at land border crossings, airports and seaports nationwide. The contract bundled more than 20 individual maintenance contracts. CBP awarded the Chenega contract under NAICS code 517110, Wired Telecommunications Carriers, with a size standard of 1,500 employees. The IG said the NAICS code was improper because telecommunications was not part of the work. The proper code was 541614, Process, Physical Distribution and Logistics Consulting Services, with a size standard of $6.5 million. The IG found Chenega would not have qualified as a small business under that standard and would not have been eligible for the contract. The IG said CBP’s current contracting officer and project manager agreed that the telecommunications code was incorrect. The report did not say why it was chosen. CBP officials told the auditors they gave the contract to Chenega because the sole-source award could be done quickly and because it would help the agency meet its 8(a) procurement goal. In addition, the IG found that Chenega subcontracted as much as two-thirds of the labor, in violation of the rule that requires an 8(a) firm to perform at least 50% of the work. The auditors said CBP did not properly monitor Chenega’s subcontracting. The IG recommended that CBP determine whether exercising options on the contract would provide best value for the government. CBP exercised the annual option in September, but said it would study the issue before next year. The IG also recommended additional training and management controls. The report is OIG-8-10 at www.dhs.gov/xoig.