TSA denies Lockheed request for more funding

WASHINGTON - Federal regulators have denied a Lockheed Martin Corp. request for more funding to correct problems with a credentialing program designed to prevent unauthorized people from gaining access to U.S. seaports.

Lockheed Martin (nyse: LMT - news - people ) has a $70 million contract to run the Transportation Worker Identification Credential program, which provides special identification cards to seaport workers.

But according to the Transportation Security Administration, the company is currently taking 16 minutes to answer calls to the program's help desk, far more than the three-minute standard mandated under Lockheed Martin's contract. Port workers call the help line with questions about the card and the status of background checks.

Lockheed Martin has asked for more money to fix the problem by, among other things, increasing full-time staffing on the help desk. The TSA would not say how much more money the company has asked for.

But in a letter dated June 3, the agency said it "takes exception" to Lockheed Martin's assertions that part of the cost of fixing the help desk problems should be covered by the agency.

TSA spokesman Christopher White on Friday said that Lockheed Martin is under contract to meet certain performance standards - including a three-minute hold time for the help desk - and therefore has to shoulder the cost of complying with the contract.

By adding staff and handling some inquiries by e-mail, Lockheed Martin said it already has reduced wait times by 50 percent, a trend it expects to continue. The new measures came at "no additional cost to our customer," said company spokeswoman Leslie Holoweiko.

Rep. Bennie Thompson, D-Miss., chairman of the House Homeland Security Committee, said Lockheed Martin has assured him of its commitment to improve the TWIC program's help desk.

By next April 15, 1.2 million workers are expected to be enrolled in the program, which was created after the Sept. 11, 2001, terrorist attacks.

Shares of Lockheed Martin, the nation's largest defense contractor, fell $3.92, or 3.6 percent, to $103.75 Friday. The company's shares have traded between $88.86 and $113.74 in the past year.

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