The contracting mess Noem's leaving behind at DHS

Homeland Security Secretary Kristi Noem is on track to leave dozens of pending contracts on her desk when she leaves office in three weeks, the legacy of a system she imposed to cut "waste, fraud and abuse," but that has stalled DHS programs.

Why it matters: The backlog of contracts has left vendors waiting for payments and delayed projects such as President Trump's push for mass deportations and the border wall, along with disaster relief under FEMA, Axios has learned.

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• "There's a mountain of backed-up contracts and invoices on her desk that the new guy will just have to deal with," a source familiar with the situation at DHS told Axios.
• The backlog existed long before the partial government shutdown over DHS immigration policies that began Feb. 14 and has further pinched the agency's spending.
• The shutdown has touched most of DHS's 23 agencies, including ICE, Customs and Border Protection, FEMA, TSA and the Secret Service.

Zoom in: Noem's delay in approving DHS contracts stems from her requirement that agreements involving $100,000 or more — which is most of those at DHS — be reviewed and approved by her.

• That policy — imposed just before Congress dramatically boosted DHS funding to implement Trump's immigration agenda — was disruptive enough that several vendors began charging DHS in contracts of $99,999 each in order to get paid.

The impact of Noem's policy can be seen in delayed DHS payments to vendors, causing disruptions now being compounded by the shutdown.

• Dozens of ICE facilities currently holding detainees have contract extensions waiting for Noem's signature and are awaiting payments, two sources familiar with the agreements told Axios.
• An agreement with Camp East Montana, an immigration facility in Texas that ICE data indicate held almost 3,000 people a day in mid-February, expired at the end of February. The facility's operator, Acquisition Logistics LLC, could not be reached for comment.

DHS payments for the family detention facility in Dilley, Texas, also lapsed in early March. Dilley is the only long-term detention unit that holds detainees' children. ICE records indicate that about 700 people were detained there as of mid-February.

• Core Civic, which operates Dilley and several other detention facilities, said in an emailed statement, "We are hopeful the federal government will resolve budget matters to enable resumption of payments," referring to the shutdown. "In the meantime, we remain focused on operating safe, humane facilities, working closely with our government partner."
• New Jersey's Delaney Hall, which held roughly 900 immigrants last month, also is operating without a payment after its government deal expired. Geo Group, the contractor, declined to comment.
• Many small county jails that contracted with ICE to hold immigration detainees also are missing payments.

Zoom out: Congressional leaders grilled Noem last week about her department's delays in distributing disaster relief funds under FEMA.

• "From everything that I've heard, it's still a giant sh*t show up there," a source familiar with FEMA's delays said of DHS's front office.
• "The ramifications of her tenure are going to be felt for years and years and years and years," the source added. "We're not really going to know exactly how bad it is until we have a major hurricane that unfortunately impacts someplace in the United States."

Several contracts for another Trump priority, the border wall, also were stalled by Noem's sign-off system, as Axios previously reported.

• As of mid-February, just 36 miles of border wall construction has been completed, according to CBP data. Nearly 2,000 miles were funded by Trump's "big beautiful bill."

What they're saying: DHS did not respond to a request for comment.

• But Corey Lewandowski, Noem's "special government employee" and de facto chief of staff, told Axios in an interview that Noem was reviewing contracts last week, and that the shutdown limits certain spending.
• He also said congressional leaders who questioned Noem on FEMA delays didn't understand that all the possible funding has been distributed.

Lewandowski defended Noem's contract approval policy, claiming it saved $15 billion last year.

• "For 23 years nobody ... ever reviewed the spending of that department. I don't blame anybody. No one had the wherewithal or desire" to rein in spending, he said.
• Lewandowski said he didn't have a role in signing off on contracts but that three of Noem's deputy chiefs of staff also were allowed to green-light contracts. He said contracts were on Noem's desk no more than 48 hours, though there were other reviews before they made it to her.

One of the sources familiar with DHS's situation said that even if Noem's review process is reversed and "everything goes back to the way it was ... it's going to take weeks, if not months, of constant work" to restore vendors' funding.

What's next: Trump's pick to succeed Noem, Sen. Markwayne Mullin (R-Okla.), didn't reply to a request for a comment on whether he'd continue Noem's sign-off system if he's confirmed by the Senate.

• Lewandowski declined to say whether he'd recommend Noem's system to the next DHS secretary.

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