Accenture Contract Moves Forward

It became less likely Friday that Congress would punish Accenture for being incorporated in Bermuda when lawmakers voted to give the consulting firm part of a $10 billion Homeland Security Department contract, reported.

The five-year Homeland Security contract comes with an option for a five-year extension and involves a system called US-Visit, which will track non-citizens through digital finger scans and photographs taken at more than 400 air, sea and land points of entry.

Accenture’s parent corporation is nominally incorporated in Bermuda, some say so the company can dodge U.S. taxes. But the company counters by saying it’s Virginia unit, Accenture LLP, would pay U.S. taxes on the earnings from the contract. The company’s U.S. headquarters are in New York.

Congress had moved to hold up the contract when Democrats objected to the lucrative deal going to a company that was incorporated offshore. An amendment to that effect was adopted earlier this month by the House Appropriations Committee, but was removed from the bill with a procedural vote on Wednesday. Friday’s 221-182 vote, largely along party lines, was a failed attempt to restore the amendment to ban government contracts to companies incorporated overseas.

"Tell that to the moms and dads of those kids who are over in Afghanistan and Iraq, that these companies don't want to pay their corporate taxes to support them and give them the best equipment they need," said Rep. Richard Neal, D-Conn.

MarketWatch reported that before the vote, the White House had said it "appreciates the intent" of the amendment, but that it feared the language could run afoul of the World Trade Organization and could also cause delays.

"The provision needs to be modified in a way that ensures the best value for American taxpayers without exposing the government to significant contract termination costs or interruption of critical homeland security projects," the statement said.

Accenture, formerly known as Andersen Consulting, severed all contractual ties with now-defunct accounting firm Arthur Andersen in August 2000.

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