Federal officials are investigating whether millions of dollars are being steered improperly toward a government contractor to run the country's largest counterterrorism exercise.

At issue is a written request for companies to compete for the TOPOFF 5 exercise contract and whether an employee of Science Applications International Corp. (SAIC) wrote parts of the proposal, according to officials familiar with the contract who spoke on condition of anonymity to discuss a sensitive procurement activity.

It would be considered a conflict of interest if an SAIC employee both drafted the document and intends to compete for the contract, according to Melanie Sloan, director of Citizens for Responsibility and Ethics in Washington.

The Federal Emergency Management Agency would not say how much the TOPOFF 5 contract is worth. The last exercise cost about $25 million. The contract for TOPOFF 5 has not been awarded.

TOPOFF is a congressionally mandated exercise intended to test the response of local, state and federal agencies across the country. Private businesses and other countries have participated in the past exercises as well. The first of these biennial exercises was in 2000. It has become more expensive over the years, as new capabilities have been added to the exercise such as a fake news network.

FEMA spokeswoman Debbie Wing said an agency contracting officer is looking into whether there are any conflicts of interest with the request for proposals. SAIC would not comment.

The top senators on the Homeland Security oversight committee sent a letter to Homeland Security Secretary Michael Chertoff Wednesday evening about this potential conflict of interest. The senators also expressed concern with the exercise division's director, Bill McNally. McNally used to work for Applied Marine Technology, Inc. (AMTI), which was purchased by SAIC in 2006. McNally did not respond to requests for comment.

"The government's business must be conducted in a manner beyond reproach, avoiding unauthorized preferential treatment for any contractor," Sens. Susan Collins, R-Maine, and Joseph Lieberman, I-Conn., wrote in the letter to Chertoff. "Conflicts of interest must be strictly avoided, and agencies must take steps to prevent activities that provide even the appearance of impropriety."

FEMA spokeswoman Wing would not confirm or deny any details about the possible involvement of SAIC and McNally.

"There are many facts/legal aspects at play, and to speculate about any potential conflict or other situation at this point would be premature," Wing said in an e-mail Wednesday.

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