As a result, 3,500 additional soldiers and some police officers will be deployed to provide security for the Olympics, which begin July 27, The New York Times reported.
Nick Buckles, the chief executive of the private security contractor G4S, said he was "deeply sorry" as he faced questions in the British Parliament.
After David Winnick, a lawmaker from the opposition Labor Party, asked Buckles whether his company's performance was a "humiliating shambles," Buckles said: "I could not disagree with you."
The 3,500 soldiers deployed for Olympic security will bring the total number of troops assigned to the games to 17,000.
Along with the troops, officers from eight regional police forces are to take over security procedures that were to have been handled by G4S.
"It's chaos, absolute chaos," said Ian Edwards, a representative of a police professional association in the West Midlands, where 150 officers were sent to provide security at a hotel where Olympic soccer players are staying.
Buckles told a parliamentary committee G4S's scheduling system had not functioned properly. He told Olympic organizers on July 11 the company could not meet its obligations, the Times said.
"I think it is very important that we get a full explanation of precisely what happened over the last few months, weeks," Keith Vaz, the head of a parliamentary committee, said just before Buckles appeared before the panel.
"I think what we need to do is establish the facts. It is a fact-finding mission. This is not the end, it is only the beginning."