Homeland Security panned for passing on bio-threat technology
WASHINGTON — Since the terrorist attacks of Sept. 11, 2001, and the anthrax letters that followed, the government has struggled to develop an easy, reliable way to detect pathogens that could signal a biological attack.
Last year, a Silicon Valley startup came close to producing what government scientists considered a breakthrough technology: a device the size of a ski boot that could test for microorganisms at rapid speed, helping to safeguard the nation from bio threats.
But six months before the firm, NVS Technologies, was to deliver its first prototypes, the Department of Homeland Security suddenly canceled its contract. According to a draft audit report and government scientists familiar with the project, the decision was improperly made by a single agency official, without supporting evidence and over the objections of numerous experts within Homeland Security’s Science and Technology Directorate.
The directorate’s review had cited “substantial data” showing that the technology worked and was needed to help detect bio threats, according to the audit by Homeland Security’s inspector general’s office. The report, dated Nov. 26, has not been finalized but is expected to be made public soon, government officials said.
Homeland Security officials have told auditors and members of Congress that the contract was terminated because existing technologies could better meet the agency’s needs for confronting bio threats. But senior government scientists from several agencies said they don’t believe that explanation is credible. Ultimately, they said, the reason for the contract’s termination remains a mystery.
The cancellation has raised questions about the science directorate, a little-known agency within Homeland Security that manages nearly $350 million in federal research and development contracts. The audit faults the directorate for poor oversight of the NVS contract, saying a lack of “adequate policies and procedures governing contract management” could prevent the agency from “making well-informed decisions on all of its contracts.”
With NVS about to close its doors, the government scientists lamented that a chance to develop a crucial technology might have been lost. They said NVS’s device would have not only helped to fight bioterrorism but would combat Ebola and better test for pathogens in the food supply. The technology was also supposed to help protect the president, and the Secret Service had provided about 20 percent of the funding, government officials familiar with the contract said.
“This was really fantastic, a quantum leap,” said one government scientist familiar with the aborted NVS device, who spoke on the condition of anonymity out of fear of retaliation by supervisors. “It allowed you to do things that could never be done before.”
In a statement late Thursday, Ginette Magana, a Homeland Security spokeswoman, said DHS agrees with the audit’s recommendations “regarding the NVS contract” and had requested the report “to improve upon the management” of the contract. Auditors recommended that the science directorate develop better procedures for reviewing, overseeing and terminating contracts.
“It is our fundamental responsibility to manage the Department of Homeland Security efficiently, and sound management is critical to our ability to execute our mission,” Magana said, adding that Homeland Security Secretary Jeh Johnson “has made reforming the manner in which this department conducts business a top priority.”
DHS sent the firm’s chief executive, Hans Fuernkranz, a notice of termination in February 2014 with little warning, he said. The notice does not give a reason. But a Homeland Security science and technology official later wrote to Sen. Dianne Feinstein, D-Calif., who had inquired about the contract, that the agency believed it could use other technologies on the market.
Auditors found otherwise, faulting both the process by which Homeland Security terminated the contract and the termination itself. The draft audit by DHS Inspector General John Roth says a single top Homeland Security science directorate official unilaterally canceled the contract “against S&T subject matter expert advice.” The official had expressed several concerns about NVS, including that it was spending too much money, but auditors “did not identify evidence to substantiate any of the concerns,” the audit stated.
As recently as one month before the contract ended, the audit stated, a Homeland Security review “revealed there was substantial data showing the NVS technology worked” and that science directorate employees “acknowledged a continued need for the technology.” As a result, auditors concluded, Homeland Security might have “wasted” the $23 million it spent on the contract, along with additional costs for terminating it.
The draft report prompted Rep. Jackie Speier, D-Calif., whose district is home to NVS, to write to Johnson about his agency’s handling of the contract, complaining of “clear mismanagement” that will result in NVS’s “innovative technology” being “needlessly lost.”
“I believe you are unaware of a serious problem within one of your divisions,” Speier wrote in the Feb. 11 letter, which cited what it called a broader pattern of “waste and contract mismanagement” in DHS’s science directorate.
Fuernkranz’s company won an $18 million contract with DHS in May 2010 by proposing a cheap and relatively simple way to test for pathogens and other bio-threat agents.
“His proposal was clearly above the others,” said a second senior government scientist familiar with the project. “There was nothing on the market that could do what he was proposing to do, not even anything in anybody’s head.”
The bio-defense research industry has spent billions of dollars and has produced about a dozen devices to detect anthrax spores and other pathogens, using a sophisticated technology called polymerase chain reaction, or PCR. Sometimes called “molecular photocopying,” it detects potentially threatening organisms by replicating their genetic material.
But most tests on the market are costly and can be clunky and difficult to operate for anybody but a highly skilled lab technician.
In contrast, the device Fuernkranz was developing used PCR technology but in a much cheaper, faster and easier way, the government scientists said. For example, they said, it can test for at least five times as many types of microbes as any comparable device and complete the test within an hour, compared with the one to three days often required. It is so easy to use that it has “the level of technical expertise of a home pregnancy test,” said a third government scientist.
Fuernkranz received positive performance reviews from Homeland Security, according to government scientists and the inspector general’s audit report, and DHS raised the value of his contract to $30 million in June 2013. The department’s science directorate was ready to test the prototypes he was close to delivering, and was planning to deploy the device for use by the Centers for Disease Control and Prevention, government laboratories, the Secret Service and possibly other DHS agencies such as the Transportation Security Administration.
“We had everything ready to go, and then boom, this whole thing just evaporated in front of us,” said one of the government scientists.
Fuernkranz said the cancellation of his only major contract has devastated his company of about 30 scientists and engineers in Menlo Park, Calif.
“I had to furlough everyone immediately,” he said.
Fuernkranz is engaged in what he described as contentious settlement negotiations with Homeland Security and is trying to get private financing.
“What I was developing was faster and much cheaper and easier to use than anything out there,” he said. “The whole world would have benefited from it.”