Department of Homeland Security 

Office of Inspector General 

Special Review of the Science and 


Technology Directorate’s Contracts with 


a Small Business 


(Summary) 


OIG-10-103 July 2010 
 

Office of Inspector General 

U.S. Department of Homeland Security 

Washington, DC 25028 

July 27, 2010 

Preface 

The Department of Homeland Security (DHS) Office of Inspector General (OIG) was 

established by the Homeland Security Act of 2002 (Public Law 107-296) by amendment 

to the Inspector General Act of 1978. This is one of a series of audit, inspection, and 

special reports prepared as part of our oversight responsibilities to promote economy, 

efficiency, and effectiveness within the department. 

This report represents an abbreviated version of our official use only report addressing 

allegations that a program manager for the Science and Technology Directorate violated 

regulations governing contract management. It is based on interviews with employees 

and officials of relevant agencies and organizations, direct observations, and a review of 

applicable documents. 

The recommendations herein have been developed to the best knowledge available to our 

office, and have been discussed in draft with those responsible for implementation. We 

trust this report will result in more effective, efficient, and economical operations. We 

express our appreciation to all of those who contributed to the preparation of this report. 

Richard L. Skinner 

Inspector General 
OIG
 

Department of Homeland Security 

Office of Inspector General 

Background 

The Science and Technology Directorate (S&T) is responsible for 

the Department of Homeland Security’s research and development 

(R&D) efforts. The directorate maintains some research capability 

at the Transportation Security Lab and the Environmental 

Measures Laboratory, among others. However, S&T funds other 

entities, such as national labs, Federally Funded Research and 

Development Centers, and private sector organizations, to conduct 

most of the department’s R&D. 

An S&T official raised concerns about S&T’s interaction with a 

small business. We reviewed allegations that an S&T program 

manager facilitated the development of a relative’s research tool at 

a federal laboratory by providing S&T-funded software, including 

products funded by an SBIR contract. The related program 

manager used the tools to compete with the company that created 

the tools for federal research funding, according to the allegations, 

and these individuals used the threat of competition and other 

financial pressure to coerce the company into relinquishing rights 

to software it had developed. 

We conducted our fieldwork from February 2008 through January 

2009, during which time we conducted 38 interviews and gathered 

thousands of pages of documents, including contracts, invoices, 

spreadsheets, and email messages. We interviewed personnel at 

the small business, S&T, CBP, the federal laboratory, the 

Department of the Interior, and other agencies. 

This review was conducted under the authority of the Inspector 

General Act of 1978, as amended, and according to the Quality 

Standards for Inspections issued by the President’s Council on 

Integrity and Efficiency. 

Special Review of the Science and Technology Directorate’s Contracts with a Small Business
 

Page 1
 
 

Results of Review 

An S&T program manager abused his position and did not act 

according to the DHS policy for ethical conduct when he pursued a 

plan to use S&T funds to develop software that would be delivered 

to a program at a federal laboratory administered by a relative of 

his. The program manager did not fully inform his supervisor or 

the designated agency ethics official of the plan. When asked by 

his supervisor to disclose the facts to the designated agency ethics 

official, the program manager told the ethics official that the 

relative led the branch at the laboratory receiving the funds but that 

neither he nor the relative’s employees performed the research. On 

that basis he was allowed to continue transferring funds to the 

laboratory. However, he later transferred money to fund his 

relative’s employees’ work. The program manager did not follow 

the department’s policy to act with honesty and integrity, and to 

avoid appearances of legal or ethical violations. 

The S&T program manager also abused his position and violated 

department policy when he provided contracting officers with 

inaccurate information, and on two occasions instructed the 

company to charge work for one contract to another without 

informing the contracting officer. He delayed approval of an 

invoice to pressure the company to conduct unrelated activities. 

The program manager may have violated the Anti-Deficiency Act 

by coercing the small business to provide software and services 

without compensation. S&T did not detect the improper activities 

because the program manager did not reveal all relevant facts 

regarding his continued participation in certain contracts. 

We made four recommendations to resolve this situation and 

strengthen management oversight. 

Special Review of the Science and Technology Directorate’s Contracts with a Small Business
 

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ADDITIONAL INFORMATION AND COPIES 

To obtain additional copies of this report, please call the Office of Inspector General (OIG) at (202) 254-4100, 

fax your request to (202) 254-4305, or visit the OIG web site at www.dhs.gov/oig. 

OIG HOTLINE 

To report alleged fraud, waste, abuse or mismanagement, or any other kind of criminal or noncriminal 

misconduct relative to department programs or operations: 

• Call our Hotline at 1-800-323-8603; 

• Fax the complaint directly to us at (202) 254-4292; 

• Email us at DHSOIGHOTLINE@dhs.gov; or 

• Write to us at: 

DHS Office of Inspector General/MAIL STOP 2600, 

Attention: Office of Investigations - Hotline, 

245 Murray Drive, SW, Building 410, 

Washington, DC 20528. 

The OIG seeks to protect the identity of each writer and caller.