Saturday, March 31, 2007

Is U.S. Government 'Outsourcing Its Brain'?

Someone from MITRE is a regular reader of this blog. Now you know where thet get the brains. :)
By Bernard Wysocki Jr.
Companies Featured in This Article: Lockheed Martin, Northrop Grumman, Boeing, Dow Jones

TYSONS CORNER, Va. -- The moment visitors arrive in the lobby of the campuslike headquarters of Mitre Corp., they're asked: Do you have a national-security clearance?

If the answer is yes, Mitre's receptionists tap a few computer keys to verify. If it's no, the visitor gets a special badge and a constant escort. It's the sort of scrutiny one might expect at the Defense Department or a U.S. intelligence agency.

Mitre is one step from that: a private company with one major client, the U.S. government. Mitre does high-tech engineering and other computer work for the Pentagon, various intelligence agencies ...


One flashpoint today is whether contractors hire other contractors without enough controls or competition. In March, Rep. Waxman introduced a bill that would put limits on contracts awarded without competitive bidding. It passed the House by a wide margin and is raising fears among contractors that it could dent their growth. Federal procurement is already expected to slow because of budget constraints and the slowing of the post-9/11 spending boom.

Rep. Waxman's staff, in a Feb. 8 memo, said that "at least one contractor hired to engage in contract oversight on the border project, Booz Allen Hamilton, may have a conflict of interest with Boeing Co.," the prime contractor. Booz Allen has done consulting work for Boeing and has been a member of the Boeing team on other contracts.

Ralph Shrader, chief executive at Booz Allen, flatly denies the charge. "I take the greatest exception to the idea of conflict of interest," Dr. Shrader says, adding that Booz Allen is doing "support" and "coordination" work on behalf of the government, and doesn't "oversee" Boeing. He adds that Booz Allen has for decades taken pains to avoid conflicts of interest, and has a rigorous process to avoid such conflicts. (Dow Jones & Co., publisher of The Wall Street Journal, has hired Booz Allen to help the company with its news strategy.)

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