House Vote Protects Accenture Deal

by Glen Shapiro, for LawAndTax-News.com, New York

18 June 2004

The move by the House Appropriations Committee to block consulting firm Accenture from receiving a $10 billion homeland security contract because it is headquartered in Bermuda appears to have fallen at the first hurdle this week.

The Appropriations Committee voted 35-17 last Wednesday to modify the Department of Homeland Security’s $32 billion budget in order to prevent the Bermuda-based company from taking up the contract, on the grounds that it would not be paying its fair share of US taxes.

The firm, formerly known as Andersen Consulting, beat competition from Computer Sciences Corp and Lockheed Martin Corp for the contract to administer the US Visitor and Immigrant Status Indicator Technology (US VISIT) program.

The bill’s sponsor, Rep. Rosa DeLauro, a Connecticut Democrat, argued that: "It is simply wrong for Homeland Security to award an expatriate with the largest corporate contract to date."

"We have two competitors who are paying their taxes in the US," she added.

When the legislation came to the Republican-dominated House floor on Wednesday, a 234-197 vote ensured that the language blocking the awarding of the contract to Accenture is likely to be removed.

However, the bill is expected to retain a provision barring the Homeland Security Department from entering into contracts with companies based offshore in the future, meaning that the Accenture deal could be the last of its kind.

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