Congressional Committee Targets Unisys

PHILADELPHIA _ Unisys Corp. is under fire by a congressional committee that alleges the Blue Bell, Pa., company may have been responsible for cyber attacks and lax security standards in maintaining the Homeland Security department computer networks.

Unisys strongly disputed the allegations.

The computer services company won a $1 billion contract in 2002 to build and manage the department’s information technology systems, and in January 2006 won a one-year “bridge” contract, with two additional one-year options, valued at up to $750 million.

But the U.S. House Committee on Homeland Security investigated and found the department’s computers were the victim of “cyber attacks initiated by foreign entities” and “incompetent and possibly illegal activity by the contractor charged with maintaining security on its networks,” according to a letter it released Monday.

As a result, dozens of Department of Homeland Security computers were compromised by hackers who sent the information to a Web hosting service connected to Chinese Web sites in 2006, the committee found.

Unisys emphatically denied the allegations that it did not properly install essential security systems. “We routinely follow prescribed security protocols and have properly reported incidents to the customer in accordance with those protocols,” a company statement said.

Jim Kerr, Unisys vice president of corporate media and investor relations, said the disputed contract also included work for the Transportation Security Administration which was not criticized in the House committee probe.

Unisys receives about 16 percent of its revenues from federal contracts. Last year, $920 million of the company’s $5.6 billion in revenues came from federal government contracts.

Homeland Security Committee Chairman Bennie Thompson, D-Miss., and James Langevin, D-R.I., chairman of the subcommittee on emerging threats, cybersecurity and science and technology, on Friday sent a letter to the department’s inspector general Richard L. Skinner requesting an investigation.

The House committee said it found network-intrusion detection devices were not fully deployed and the contractor provided “inaccurate and misleading information” to “hide security gaps.”

The Department of Homeland Security said Monday it is re-bidding the contract originally given to Unisys and will include other contractors.

While Unisys is not prohibited from competing, previous performance can be a factor in the selection, Russ Knocke, spokesman for the department, said in an e-mailed statement.

“I am not going to comment on allegations of an investigation,” Knocke said. “But we take cyber security very seriously and there have been major improvements since the administration’s cyber security strategy announced in 2003.”

FBI spokesman Bill Carter said he could not confirm or deny whether the FBI was investigating the matter.

The Homeland Security department’s inspector general is reviewing the committee’s request and has not decided whether to pursue the investigation, spokeswoman Tamara Faulkner said.

Unisys shares closed down 29 cents, or 4 percent, to $6.85.

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