U.S.: Subcontractor's Story Details Post-9/11 Chaos
With little experience, a tiny company owned by Sunnye Sims was asked to help set up and run screener assessment centers in a hurry at more than 150 hotels and other facilities. Her company eventually billed $24 million.
WASHINGTON - Three years ago, Sunnye Sims lived in a two-bedroom apartment north of San Diego, paying $1,025 in monthly rent. Then she landed a dream job, with $5.4 million in pay for nine months of work.
Now she owns a $1.9 million stucco mansion. Sims is not a Hollywood starlet. She's a meeting-and-events planner from Texas who built her fortune on a U.S. government contract.
In 2002, her tiny company secured a no-bid subcontract to manage logistics on an urgent federal project to protect the nation's airports in the wake of the Sept. 11 attacks. Sims, now 42, recruited hundreds of people to help hire a government force of 60,000 airline passenger screeners on a tight deadline.
With little experience, her tiny company was asked to help set up and run screener assessment centers in a hurry at more than 150 hotels and other facilities. Her company eventually billed $24 million.
The company, Eclipse Events, was among the most important of the 168 subcontractors hired by prime contractor NCS Pearson. The cost of the overall contract rose in less than a year to $741 million from $104 million, and federal auditors concluded that $303 million of that was unsubstantiated.
Spurred by that audit, federal agents are examining the entire contract and focusing on Eclipse, according to government officials and Pearson.
A deeper examination of the Eclipse subcontract illustrates the chaos that accompanied Homeland Security initiatives after the terrorist attacks and shows how contractors were allowed to operate with little government oversight.
Eclipse started as a one-woman operation based in Sims' apartment. She was hired in a hurry, through word of mouth, recommended by someone who did not review her background in detail.
$24 million subcontract
Her company, Eclipse, did not exist as a corporation until Sims got the Pearson subcontract; two weeks later, she filed incorporation papers. Over the next several months, Sims hired hundreds of freelance meeting planners, many of them sight unseen.
As the number of hotel assessment sites expanded - the Transportation Security Administration doubled the number of screeners to be hired - Eclipse's subcontract grew to $24 million from $1.1 million.
The company's authority to spend money on behalf of Pearson and the government also expanded - in addition to its direct billings, Eclipse approved millions more in hotel charges by its employees and spending by other subcontractors, the audit shows.
"Eclipse did not have any other work, before, during or after the completion of this subcontract," according to the Defense Contract Audit Agency, which was hired by the TSA to examine spending under the contract.
Eclipse was hired as a field manager to coordinate with hotels for meeting spaces, conference rooms and food, as well as to act as the go-between with hotels and other vendors and subcontractors, such as local security companies.
The auditors said $15 million in expenses submitted by Eclipse could not be substantiated. The auditors noted that Sims not only paid herself $5.4 million as "President/Owner" but also gave herself a $270,000 pension.
Expenditures piled up
Auditors highlighted scores of other expenses run up or approved by Eclipse: hundreds of thousands of dollars for valet parking, unexplained cash advances, dry cleaning and other spending at the hotels.
Sims and her business associate, Eclipse Vice President Nita Sullivan, declined requests for interviews. A Washington lawyer hired to help the women respond to questions from federal auditors said they have cooperated with authorities and have nothing to hide.
The lawyer, Pamela Mazza, declined to discuss the contract or the current investigation.
Pearson officials said they "believed that Eclipse's rates were reasonable" and "that Eclipse did a good job."
In response to the audit, Pearson said, "However, TSA's frequent changes and revised requirements greatly impacted (Pearson) and its subcontractors as they both struggled to meet TSA's ever-changing demands and schedule changes."
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