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Protective service questioned on security contractors.

Members of Congress are questioning the Federal Protective Service's management of security guard contracts after revelations that one of its contractors was partly owned by a convicted felon who repeatedly missed payrolls.

Systems Training and Research Technologies, an 8(a) company known as Startech, guarded 14 facilities in the Washington area for FPS and had additional contracts with other agencies. Most of its 500 guards continued to work although they had not been paid for several weeks this spring.

FPS Director Gary Schenkel said the agency terminated Startech's contracts on June 3. At a June 21 hearing before the House Transportation and Infrastructure committee's subcommittee on public buildings, he said FPS's oversight of contractors focused on whether guards were on duty and had proper documentation, not on the contractor's financial condition.

The subcommittee chairwoman, Democratic D.C. Delegate Eleanor Holmes Norton, told him, "You behaved like a government bureaucrat when you should act like a police chief whose post is left uncovered."

Startech's part owner and vice president, Weldon Waites, told the subcommittee his company was ruined by the government's late payments. He said bankers called his loans because too many of his receivables were overdue.

But the company's former chief operating officer, Ann Marie Messner, charged that mismanagement and greed brought Startech down. "Weldon Waites sacrificed his company, his employees and your security on the altar of his greed," she testified.

She said Waites used company money to buy a $530,000 beach condo in South Carolina and to pay the mortgage on a boat slip for his yacht. Waites said the condo was used for company business.

Waites testified that he and his wife bought control of Startech in 2005 after both its founders became ill. Waites served five years in prison in the 1990s for bank fraud and money laundering, according to the Transportation Committee staff, but FPS did not know that. His wife was listed as Startech's principal owner.

The committee staff report said government auditors found two years ago that Startech's accounting system was "non-existent," but that did not raise a red flag with FPS.

The staff investigators said Startech is not an isolated case. They cited other incidents when FPS contractors missed payrolls or failed to pay overtime.

The Homeland Security Department's inspector general reported in October that FPS was not adequately monitoring contractors in the National Capital Area. FPS Director Schenkel said new procedures have been put in place since then, but the agency acknowledged it is short of contract specialists to monitor contractor performance.

The head of acquisition planning for FPS's parent, the Immigration and Customs Enforcement agency, Ashley Lewis, said she is considering adding new contract clauses to require a company to notify FPS if it misses a payroll or has a material change in its financial condition.

The Bush administration is proposing to shrink FPS's staff from about 1,200 to 950 and rely on local police to answer emergency calls at federal installations. Under the plan FPS personnel would concentrate on anti-terrorism planning and oversight of contractors. FPS employs about 15,000 contract guards nationwide.

The proposed downsizing has raised objections in Congress. House Majority Leader Steny Hoyer, a Maryland Democrat, said he opposes the plan.
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Publication:Set-Aside Alert
Date:Jun 29, 2007
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