Another mass electronic health data theft

Reuters -  A massive data breach, in which the personal and medical records of millions of military patients and their families were compromised, happened when the records were stolen out of a data contractor's car in San Antonio, officials told Reuters. The information for some 4.6 million active and retired military personnel, as well as their families, was on back up-tapes from an electronic health care record used to capture and preserve patient data from 1992 through September 7 of this year, according to Science Applications International Corp. 

More on SAIC

Wikipedia - In June 2001 the Federal Bureau of Investigation paid SAIC $122 million to create a Virtual Case File software system to speed up the sharing of information among agents. But the FBI abandoned VCF when it failed to function adequately. Robert Mueller, FBI Director, testified to a congressional committee, "When SAIC delivered the first product in December 2003 we immediately identified a number of deficiencies – 17 at the outset. That soon cascaded to 50 or more and ultimately to 400 problems with that software ... We were indeed disappointed."

SAIC executive vice president Arnold L. Punaro claimed that the company had "fully conformed to the contract we have and gave the taxpayers real value for their money." He blamed the FBI for the initial problems, saying the agency had a parade of program managers and demanded too many design changes. During 15 months that SAIC worked on the program, 19 different government managers were involved and 36 contract modifications were ordered, he said.

"There were an average of 1.3 changes every day from the FBI, for a total of 399 changes during the period," Punaro said.

Huffington Post, July 2011 - Mayor Michael Bloomberg demanded Wednesday that a multibillion-dollar technology giant and federal contractor repay the city more than $600 million spent on the scandal-plagued CityTime payroll technology project. Federal prosecutors have said that nearly the entire sum the city spent on the project was tainted by an epic fraud that involved hundreds of contractors, systemic overbilling and an international money-laundering conspiracy.

In a letter to the chief executive of SAIC Inc., Bloomberg said he was making the request based on those accusations, along with the arrest of two of the company's employees and prosecutors' claim that SAIC was warned of the fraud by a whistleblower as early as 2005 – five years before it was discovered by city investigators.

"It is unclear what SAIC did at that time to investigate these serious allegations," Bloomberg said in the letter to CEO Walter Havenstein.

The company said in a statement that it "understands and shares the outrage expressed by the city" and "is ready to discuss appropriate resolution of this matter, considering the breadth of the fraud alleged and the fact that SAIC delivered a system that the city said this week is working well."

SAIC, which reported $2.69 billion in revenue in the three months ending with April, has continued to receive U.S. government contracts following the May announcement of charges against its senior manager in charge of the New York City project. Earlier this month, prosecutors said a second SAIC employee, the project's chief systems engineer, had pleaded guilty to charges including wire fraud and money laundering, and was cooperating with investigators. The senior manager, Gerard Denault, maintains his innocence.