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House Moves to Protect Accenture Contract

House Republicans maneuvered Wednesday to protect a controversial $10 billion contract between the Department of Homeland Defense (DHS) and Accenture.

Last week, the House Appropriations Committee voted 35-17 to prohibit DHS from granting contracts to corporations using offshore headquarters to avoid U.S. taxes. The vote came only one week after DHS awarded Bermuda-based Accenture LLP, one of the largest federal contracts in history.

Tuesday night, the House Rules Committee voted to not "protect" the amendment from elimination or modification when the DHS budget bill reaches the House floor for a vote on Thursday or Friday. Rep. Christopher Cox (R-Calif.), chairman of the Homeland Security Committee, has already declared he plans to kill the amendment.

Wednesday afternoon, a full House vote to extend protection to the amendment was defeated 224 to 205.

"It is absolutely irresponsible for the House leadership to take this [amendment] out of the bill," Rep. Marion Berry (D-Ark.), a co-sponsor of the amendment, said. "My citizenship in the United States is not for sale but Accenture chose to renounce its citizenship and it is rewarded with a $10 billion contract paid for by hard-working taxpayers."

Under the DHS contract, Accenture , the former Arthur Andersen Consulting, will serve as the prime contractor on a complex 10-year "virtual border" project to be deployed at more than 400 U.S. air, land and sea ports of entry. The contract calls for a biometrics systems design to verify the identity of incoming visitors and to confirm compliance with visa and immigration policies.

The company's U.S. division, Accenture LLP, is charged with carrying out the contract and is based in the Washington suburbs of Reston, Va., which is in the district of Rep. Tom Davis (R-Va.), chairman of the powerful House Governmental Affairs Committee, who has also vowed to kill the amendment.

U.S.-based Lockheed Martin and Computer Science Corp. also bid on the DHS contract.

"Who has the competitive advantage? The company that pays its taxes or the one that dodges its taxes to lower its costs?" Rep. Lloyd Doggett (D-Tex.) said. "To add insult to injury, they say they not only don't want to pay their taxes, but they want ours too. Why are we giving a competitive advantage to a company that dodges its taxes and responsibilities?"

When the DHS announced the contract on June 1, officials dismissed questions about the location of Accenture's corporate headquarters. Asa Hutchinson, under secretary for Border and Transportation Security at the DHS, told reporters that Accenture, the former Arthur Anderson Consulting, met all the bid requirements.

"It is simply false to say they are not paying their taxes. Accenture employees and the company are paying all their taxes on U.S. revenue," Rep. Jim Kolbe (R-Ariz.) said. "This sweeping amendment would change the entire tax structure of this country."

Berry and fellow co-sponsor Laura DeLauro (D-Conn.) did win protection for a portion of their amendment that removes a provision in the current law that allows companies that have already incorporated overseas to continue to receive government contracts.

"I am pleased the Rules Committee took notice of the outcry of patriotic Americans upset that companies would relocate their corporate headquarters overseas to avoid taxes, yet still get contracts for our homeland defense," DeLauro said in a statement. "But the victory is not complete for American taxpayers. The House Rules Committee did not apply these changes to Accenture. I will continue to work to stop this contract and am hopeful that this will be addressed when the Senate takes up this issue."