Accenture: We Pay Taxes, Don't Take Away Our Contract

The IT services firm contends it should be allowed to keep its deal to build the US-Visit virtual border system even though it's not based in the United States.

Paul McDougall, Editor At Large, InformationWeek

June 10, 2004

2 Min Read

Officials at Bermuda-based Accenture insist the company pays its fair share of U.S. taxes and therefore shouldn't be stripped of its multibillion-dollar contract to build a high-tech border-control system for the federal government.

The Department of Homeland Security last week tapped the IT services and consulting firm to build the US-Visit (United States Visitor and Immigrant Status Indicator Technology) system under a deal that could be worth up to $10 billion over 10 years. But late Wednesday, the House Appropriations Committee approved an amendment that would prohibit Accenture from building the system because it's a foreign-based corporation.

"Accenture and other companies like it have used loopholes in the tax system to shirk their duties to the United States," said Rep. Rosa DeLauro, D-Conn., in a statement posted on her Web site. DeLauro is a co-sponsor of the amendment, which the Appropriations Committee passed with a 35-17 vote. The amendment stipulates that the government cannot give contracts to foreign-based shell corporations or their subsidiaries. It doesn't name Accenture specifically.

Accenture won the US-Visit contract over Computer Sciences Corp., which is based in El Segundo, Calif., and Lockheed Martin, which is based in Bethesda, Md.

Accenture issued a statement insisting that it's not a tax dodger. "Accenture pays, and has always paid, our fair share of taxes in each of the countries in which we generate income, including the United States," the statement said.

Accenture was established in 1989 as Andersen Consulting but changed its name after it spun off from accounting firm Arthur Andersen in 2000. At that time, the company formally incorporated itself in Bermuda.

Some analysts believe that Accenture will ultimately maintain the US-Visit contract despite the amendment, which must be approved by both of houses of Congress and signed by the president to become law. Cindy Shaw, an analyst at Schwab Soundview Capital Markets, says concerns that Accenture will lose the contract are "overblown," and notes that a similar proposal died on the House floor last year.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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