[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
CODE YELLOW: IS THE DHS ACQUISITION BUREAUCRACY A FORMULA FOR DISASTER?
=======================================================================
HEARING
before the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
JULY 27, 2006
__________
Serial No. 109-180
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
http://www.house.gov/reform
______
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California
DAN BURTON, Indiana TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California
CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California LINDA T. SANCHEZ, California
JON C. PORTER, Nevada C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia ELEANOR HOLMES NORTON, District of
PATRICK T. McHENRY, North Carolina Columbia
CHARLES W. DENT, Pennsylvania ------
VIRGINIA FOXX, North Carolina BERNARD SANDERS, Vermont
JEAN SCHMIDT, Ohio (Independent)
BRIAN P. BILBRAY, California
David Marin, Staff Director
Lawrence Halloran, Deputy Staff Director
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
C O N T E N T S
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Page
Hearing held on July 27, 2006.................................... 1
Statement of:
Ervin, Clark Kent, director, Homeland Security Initiative,
the Aspen Institute........................................ 109
Sullivan, Michael J., Director, Acquisition and Sourcing
Management, U.S. Government Accountability Office; David M.
Zavada, Assistant Inspector General for Audits, U.S.
Department of Homeland Security; and Elaine C. Duke, Chief
Procurement Officer, U.S. Department of Homeland Security,
accompanied by, John Ely, Executive Director of Procurement
for Customs and Border Protection, and Richard Gunderson,
Assistant Administrator for Acquisition, Transportation
Security Administration.................................... 47
Duke, Elaine C........................................... 74
Sullivan, Michael J...................................... 47
Zavada, David M.......................................... 62
Letters, statements, etc., submitted for the record by:
Cummings, Hon. Elijah E., a Representative in Congress from
the State of Maryland, prepared statement of............... 117
Davis, Chairman Tom, a Representative in Congress from the
State of Virginia:
Prepared statement of.................................... 4
Staff report............................................. 7
Duke, Elaine C., Chief Procurement Officer, U.S. Department
of Homeland Security, prepared statement of................ 76
Ervin, Clark Kent, director, Homeland Security Initiative,
the Aspen Institute, prepared statement of................. 112
Platts, Hon. Todd Russell, a Representative in Congress from
the State of Pennsylvania, prepared statement of........... 120
Sullivan, Michael J., Director, Acquisition and Sourcing
Management, U.S. Government Accountability Office, prepared
statement of............................................... 50
Waxman, Hon. Henry A., a Representative in Congress from the
State of California, prepared statement of................. 40
Zavada, David M., Assistant Inspector General for Audits,
U.S. Department of Homeland Security, prepared statement of 64
CODE YELLOW: IS THE DHS ACQUISITION BUREAUCRACY A FORMULA FOR DISASTER?
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THURSDAY, JULY 27, 2006
House of Representatives,
Committee on Government Reform,
Washington, DC.
The committee met, pursuant to notice, at 10 a.m., in room
2154, Rayburn House Office Building, Hon. Tom Davis (chairman
of the committee) presiding.
Present: Representatives Tom Davis, Waxman, Duncan,
Gutknecht, Higgins, Ruppersberger, Porter, Kucinich, Platts,
Watson, Norton, Van Hollen, and Cummings.
Staff present: Keith Ausbrook, chief counsel; Jennifer
Safavian, chief counsel for oversight and investigations; Steve
Castor, counsel, Rob White, communications director; Andrea
LeBlanc, deputy director of communications; Edward Kidd,
professional staff member; John Brosnan, procurement counsel;
Teresa Austin, chief clerk; Michael Galindo, deputy clerk; Phil
Barnett, minority staff director/chief counsel; Karen
Lightfoot, minority communications director/senior policy
advisor; Jeff Baran and Margaret Daum, minority counsel; Earley
Green, minority chief clerk; and Jean Gosa, minority assistant
clerk.
Chairman Tom Davis. Good morning. The committee will come
to order.
No one thought that merging 22 disparate functions,
personnel systems and cultures into the new Department of
Homeland Security would be quick or easy. But we did expect
that by now critical acquisition functions would be well
integrated and well managed--an efficient engine driving the
Department's evolving mission. Instead, through aggressive
oversight, we have uncovered clear evidence of huge cost
overruns, chronically lax contract management and preventable
vulnerability to waste, abuse and mismanagement.
In a very bipartisan effort here, the staff report provided
to our committee today documented large-scale systematic flaws
in the Department of Homeland Security's acquisition
management. A fractured purchasing system is hobbling the
Department's ability to meet core missions in border security,
emergency management, information sharing and other key issues.
Now, in reaching these conclusions, we reviewed over 6,000
pages of documentation. Through a formal document request, the
committee obtained copies of audits, reports and other
assessments that cast doubts on contractor cost estimates,
billings, accounting and estimating systems in contract
performance. In five separate productions, DHS provided 196
unique oversight documents, 149 of which were prepared by DCAA,
the Defense Contract Audit Agency.
Throughout this effort, we worked with the ranking member
and his staff, and I want to commend my good friend and
colleague, Henry Waxman, for his persistence and constructive
approach. This is a textbook example of bipartisan oversight
that gets results.
This committee has been concerned about DHS acquisition
challenges for quite some time, initiating a GAO study as early
as December 2003. The subsequent report, released in April
2005, confirmed many of our initial fears about acquisition
dysfunction at DHS. GAO found procurement responsibilities
scattered throughout the Department, with no clear lines of
authority, decisionmaking or accountability. The lack of
trained and skilled acquisition professionals compounded DHS
acquisition ills.
An alphabet soup of DHS elements: TSA, the Transportation
Security Administration; CBP, the Customs and Border Protection
Bureau; ICE, the Immigration and Customs Enforcement Bureau;
FPS, the Federal Protective Service; FEMA, the Federal
Emergency Management Association; and NDPO, the National
Domestic Preparedness Office, and others, must be supported by
an enormous array of goods and services provided under
contracts valued at almost $10 billion a year. DHS buys
everything from major information systems, cutting edge
technologies and sophisticated technical support services to
mundane commodities like bottled water and blue roof tarps.
These diverse and complex procurements are supported by a
disjointed management structure that does not integrate the
acquisition function across the Department under a single
official with responsibility to manage and oversee the multi-
million dollar enterprise.
That lack of overall accountability and control has spawned
a sad succession of disastrous acquisitions. A $104 million TSA
contract for training airport screeners tumbled out of control,
eventually costing over $700 million. Poorly defined
requirements resulted in airport bomb detection machines that
continually produce false alarms. Billion dollar technology
contracts have yet to deliver basic telecommunications
infrastructure to many of our Nation's airports. And as the
Katrina Select Committee found, FEMA lacked the scalable
contracting and logistics capacity needed in the wake of
catastrophic loss.
Just last week, GAO concluded a weak control environment
exposed the Department to rampant abuse in the use of purchase
cards. For want of final purchase card, up to 45 percent of
purchase cards transactions during last year's hurricane relief
efforts lacked proper authorization.
This morning, we are going to focus on several troubled DHS
acquisitions as cautionary tales and guideposts for reforms.
What lessons should be gleaned from troubled TSA contracts to
assess and hire airport passengers screeners, screen luggage at
commercial terminals and upgrade airport computer networks?
What would have improved Customs and Border contracts for
radiation detection equipment, for the Integrated Surveillance
Intelligence Systems or the America's Shield Initiative? We
will ask what needs to be done to create a coherent
organization within DHS that will facilitate successful
management of the successful acquisition function.
DHS has been tasked with critical missions subject to hard
deadlines. Addressing our myriad vulnerabilities requires the
Department to acquire complex, high-risk state-of-the-art
solutions likely to have problems even under an ideal
management structure. But with so much at stake, and so little
room for error, the size or the difficulty of the challenge can
be no excuse for a failure to put an effective management
structure in place.
[The prepared statement of Chairman Tom Davis follows:]
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Chairman Tom Davis. At this time, I would ask unanimous
consent to submit into the record a bipartisan staff report
entitled Waste, Abuse and Mismanagement in Department of
Homeland Security Contracts, and a summary of the DCAA audits
prepared by staff.
Without objection, so ordered.
[The information referred follows:]
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Chairman Tom Davis. Before I recognize our distinguished
ranking member, let me just say, this Congress either tonight
or tomorrow is going to go through a lengthy discussion and
debate over legislation passed out of this committee last week
that takes a look at all Federal programs across the board and
should they be there, can we effectively combine them, and the
like. The reaction of Government so many times when we have to
lose weight or cut budgets is to cutoff fingers and toes.
But what we see here is that the fat in Government is
layered throughout the bureaucracy in the way we do business. I
would gather that there are billions of dollars in losses and
just general procurement and business management practices
where you have, I think, far greater losses than you had just
cutting programs, Mr. Waxman. That is the tragedy of this as we
look at it, is that we are just not running as efficiently as
we should.
Again, I want to thank you and your staff for helping put
this together. I look forward to your opening remarks. Thank
you.
Mr. Waxman. Thank you very much, Mr. Chairman. I want to
thank you for holding this important hearing to examine
homeland security contracts. I think you are absolutely right,
this committee has operated in a bipartisan way in developing
this report that we are putting out today and taking seriously
the job that we have before us.
With literally billions of dollars and the security of the
American people at stake, congressional oversight is urgently
needed and long overdue. Since the attacks of September 11,
2001, the Department of Homeland Security and its predecessor
agencies have gone on a spending spree. In 2003, the Department
entered into 14,000 contracts worth $3.5 billion. By 2005, the
Department's spending on contracts swelled to 63,000 contracts
worth $10 billion.
Our Nation has pressing security needs. If the money were
well spent, it would be a good investment. But the problem is,
hundreds of millions of dollars are being squandered. The
taxpayers are being taken to the cleaners and our security is
not being protected. Boondoggle contracts may enrich private
contractors, but they drive us deeper into debt and leave our
borders unprotected and our ports and airlines vulnerable to
attack.
Today, the chairman and I are releasing a new report
assessing the administration's record on homeland security
contracts. The report describes a pattern of reckless spending,
poor planning and ineffective oversight that is wasting
taxpayers' dollars and undermining our homeland security
efforts. The report is entitled, ``Waste, Abuse and
Mismanagement in Department of Homeland Security Contracts.''
There are key findings in our report. First, we are
spending more and more each year on Homeland Security
contracts. In just the 3-years since the creation of the
Department of Homeland Security, contract spending has
increased 189 percent from $3.5 billion in 2003 to over $10
billion in 2005. Homeland Security spending is growing 31 times
faster than inflation. It is even growing 11 times faster than
the rest of our ballooning Federal budget.
Second, most of the new spending is occurring through non-
competitive contracts, many of them no-bid contracts. In the 3-
years since the creation of the Department of Homeland
Security, the dollar value of non-competitive contracts has
grown by an astronomical 739 percent. Last year over half of
the Department's contract spending was awarded without full and
open competition. Competition protects the taxpayers by driving
prices down and quality up. But the administration squelches
full and open competition so it can offer lucrative deals to
hand-picked contractors.
Third, the report finds that there is no effective system
of contract management at the Department of Homeland Security.
There is little contract planning and only meager contract
oversight.
Fourth, the costs to the taxpayers are enormous. The report
identifies 32 Federal Homeland Security contracts worth $34.3
billion that have experienced significant waste, fraud, abuse
or mismanagement. In February 2002, the Transportation Security
Administration awarded $104 million contract to hire airport
screeners. In less than 1 year, the contract ballooned to $741
million, yet the rate at which screeners detected weapons never
improved and Government auditors identified hundreds of
millions of dollars in unjustifiable charges.
Several months later, TSA awarded a $1.2 billion contract
to Boeing to install and maintain luggage screening equipment
at airports. But the baggage screening equipment never worked
right. GAO says the taxpayer will now have to spend an
additional $3 billion to $5 billion to upgrade to more
efficient machines. Unfortunately, I can go on and on and on.
As described in the committee's bipartisan report, the
Department has botched the contracts to upgrade airport
computer networks, detect nuclear devices and create a virtual
border. What is most inexcusable is that no one in the
executive branch seems to care. The same mistakes happen over
and over again. This administration treats the taxpayer as its
own piggy-bank.
A striking example is the Department's new Secure Border
Initiative, which is its new high-tech plan to protect the
border. I want to read to you the request for proposal, also
called the RFP, that the administration released earlier this
year. The RFP is a remarkable document, because it is devoid of
any substance. Instead of identifying specific Government
needs, it takes the fairy godmother approach to the immensely
difficult task of protecting our border.
Here is the only substantive requirement in the RFP. The
Department wants private contractors, not Government officials,
but private contractors, to figure out ``highly reliable,
available, maintainable and cost-effective solutions to manage,
control and secure the border, using the optimal mix of proven,
current and next generation technology, infrastructure,
personnel, response capabilities and processes.'' In case the
contracting community missed the point, DHS Deputy Secretary
Michael Jackson told potential bidders for the new Secure
Border Initiative, ``We are asking you to come back and tell us
how to do our business.''
Well, that is not good governing, that is not planning. It
is utterly incompetent, and it is going to cost the taxpayers
billions. Mr. Chairman, in closing, I want to commend you for
your leadership. You have approached this issue with
bipartisanship and put the interests of the taxpayers first.
This committee is doing an important public service by exposing
the astronomical levels of wasteful spending at the Department
of Homeland Security.
[The prepared statement of Hon. Henry A. Waxman follows:]
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Chairman Tom Davis. Mr. Waxman, thank you very much.
The gentleman from Tennessee, Mr. Duncan.
Mr. Duncan. Thank you very much, Mr. Chairman, and thank
you for calling this hearing on this very important report. You
and the ranking member have both given outstanding statements
and have mentioned several things that I would have mentioned.
But I can tell you that just a few days ago, the Department
of Homeland Security came out with a terrorist target list that
immediately or very quickly became a joke around the entire
Nation. It had 8,591 sites listed in Indiana, including the
Amish Country Popcorn Factory, but only 3,212 sites in
California.
But what got my attention, it had in my district the
Sweetwater, Tennessee Flea Market. And I can assure you, the
Department of Homeland Security became the laughingstock of
Sweetwater and east Tennessee for a couple of days. That was a
total waste. They might as well have just put out a report
saying that any place that more than two or three people are
gathered was a target list.
Now we get this report which is not really a laughing
matter. Anybody who is not really sickened or horrified by the
things that are in this report cannot legitimately call
themselves a conservative Republican or a fiscal conservative
in any way. The chairman and the ranking member have already
mentioned the $104 million TSA contract that went to over $700
million to train airport screeners, the contracts awarded
without competition that increased 739 percent between 2003 and
2005.
The report has so many other things, the two TSA employees
that used Government purchase cards to buy $136,000 worth of
personal items, $297 million of questionable or improper
charges by NCS Pearson on a contract to hire airport screeners.
The GAO found that FEMA cannot locate 22 printers and 2 GPS
units worth $170,000, as well as 12 boats the agency bought for
$208,000. It just goes on and on and on.
The Department, if the top people of the Department are not
embarrassed by this, something is wrong. Something has to be
done, and I think this hearing is the start of it. I can tell
you, if these types of things were going on in a private
company, heads would roll, people would be fired, action would
be taken. So I eagerly await to see what is going to be done by
the Department in response to what is a scandalous report of
waste, fraud and mismanagement in this contracting by the
Department of Homeland Security.
Thank you very much, Mr. Chairman.
Chairman Tom Davis. Thank you very much.
Any other Members wish to make opening statements? Mr.
Gutknecht.
Mr. Gutknecht. Just briefly, Mr. Chairman. I just want to
congratulate you and Ranking Member Waxman, because if there is
one area where Congress has sort of let its guard down, it is
in terms of the oversight responsibility we have. Frankly, I
think Americans deserve better answers that they have received.
I think this hearing is a very important step in the right
direction.
I yield back.
Chairman Tom Davis. Thank you very much.
Members will have 7 days to submit opening statements for
the record.
We are now going to recognize our first panel. We have Mr.
Michael Sullivan, who is the Director, Acquisition Sourcing and
Management, at the Government Accountability Office. Thank you
for your work. Mr. David Zavada, who is the CPA, Assistant
Inspector General's Office of Audits, Department of Homeland
Security. Thank you for being here. And Elaine Duke, the Chief
Procurement Officer at the Department of Homeland Security. She
is accompanied by Mr. John Ely, who is the Chief Procurement
Officer, Customs and Border Protection Service at the
Department of Homeland Security, and Mr. Richard Gunderson, the
Acting Assistant Administrator for the Office of Acquisition at
the Transportation Security Administration at the Department of
Homeland Security.
It is our policy to swear everyone in before they testify.
So if you would rise with me and raise your right hands.
[Witnesses sworn.]
Chairman Tom Davis. Thank you very much.
Mr. Sullivan, we will start with you and then we will move
to Mr. Zavada and then to Ms. Duke. I thank you all again for
being with us today. Your entire statement is in the record. I
know you have a lengthy analysis you have done. That is all in
the record. So if we could try to keep to 5 minutes. I am going
to apologize, because at about 10 of, I have to leave for a few
minutes to go over to the Senate and introduce two nominees
from my district that are up, and then I will be back for
questions. But I will want to get my first questions in.
Go ahead and start, Mr. Sullivan.
STATEMENTS OF MICHAEL J. SULLIVAN, DIRECTOR, ACQUISITION AND
SOURCING MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE;
DAVID M. ZAVADA, ASSISTANT INSPECTOR GENERAL FOR AUDITS, U.S.
DEPARTMENT OF HOMELAND SECURITY; AND ELAINE C. DUKE, CHIEF
PROCUREMENT OFFICER, U.S. DEPARTMENT OF HOMELAND SECURITY,
ACCOMPANIED BY, JOHN ELY, EXECUTIVE DIRECTOR OF PROCUREMENT FOR
CUSTOMS AND BORDER PROTECTION AND RICHARD GUNDERSON, ASSISTANT
ADMINISTRATOR FOR ACQUISITION, TRANSPORTATION SECURITY
ADMINISTRATION
STATEMENT OF MICHAEL J. SULLIVAN
Mr. Sullivan. Thank you, Mr. Chairman, for the opportunity
to appear here today to update you on GAO's work on the
Department of Homeland Security's acquisition policies and
practices.
As you know, we designated the establishment of the
Department and its transportation as high-risk, and pointed out
that not effectively addressing management challenges could
have serious consequences for national security. My testimony
today is based on recent GAO work concerning various aspects of
the Department's acquisitions. I will address areas where the
Department has had some success and where it still faces
challenges.
The Department has some of the most extensive acquisition
needs within the U.S. Government. In fiscal year 2005, it
obligated almost $17.5 billion to acquire a wide range of goods
and services. Its acquisitions included sophisticated screening
equipment, technologies to secure the Nation's borders,
trailers to meet the housing needs of hurricane victims and the
upgrading of the Coast Guard's entire offshore fleet of service
and their assets.
In March 2005, we found and reported on two acquisition
areas where the Department had achieved some success. DHS's
organizations collaborated to leverage buying power for various
goods and services such as office supplies, boats, energy and
weapons, and recorded about $14 million in savings across the
Department.
Also, the Department has had success with its small
business program, which is felt across DHS. It recorded that
about 35 percent of its contracting dollars went to small
businesses, exceeding its goal of 23 percent.
Much more must be done, however. In 2005, we also reported
that DHS's efforts to create a unified accountable acquisition
organization had been hampered by policies that create
ambiguity about who is accountable for acquisition decisions.
Further, we found that acquisition organizations across DHS
were still operating in a disparate manner, with oversight left
primarily up to each individual organization.
Today, DHS continues to face challenges in these areas. For
example, the policy directive intended to integrate the
acquisition function still relies on a system of dual
accountability for acquisitions between the chief procurement
officer and the heads of each DHS component, and still does not
apply to the U.S. Coast Guard and the Secret Service.
Also, although the chief procurement officer has recently
issued guidance providing a framework for acquisition oversight
and added five staff to carry it out, implementation has been
limited. We have work ongoing in this area now and will be
updating the status of this policy in the near future.
Finally, staffing shortages in the Office of Procurement
Operations, which handled about $4 billion of the Department's
contracting activity last year, led this office to rely on
outside agencies for contracting support for about 90 percent
of its obligations, often for a fee. The Office also did not
have adequate internal controls in place to effectively oversee
this interagency contracting.
There has been some improvement in this area recently. The
Office recently increased its staffing level from 42 to 120,
and the interagency agreements have now fallen from 90 percent
to 72 percent of the Department's obligations. However, it
still lacks internal controls to oversee these interagency
agreements.
To protect its major acquisition investments, DHS has put
in place an investment review process that adopts best
practices to help the Department reduce risks. However, the
process does not include two critical management reviews: the
first, to reduce technological risk by helping to ensure that
the right technologies and funding will be ready to develop the
program or product prior to beginning; and second, to reduce
design risk by hoping to make sure the product or program's
design will perform as expected before moving into mass
production.
In addition, the Department's policy does not require
critical information to be delivered at program reviews for
these major investments. For example, before a program is
approved to begin, DHS has no policy to require cost and
schedule estimates for the acquisition based on knowledge from
preliminary information or designs. Our prior reports on large
DHS acquisition programs, such as TSA's Secure Flight program
and the Coast Guard's Deepwater program have highlighted the
need for improved oversight.
In closing, I believe that DHS has taken some strides
toward putting in place a more effective acquisition
organization. However, they are not enough to ensure that the
Department is effectively managing the acquisition of the
multitude of goods and services it needs to meet its mission.
More must be done to fully integrate the Department's
acquisition function, pave the way for the chief procurement
officer's responsibilities to be effectively carried out, and
put in place internal controls needed to manage interagency
agreements, activity and large, complex investments. DHS's top
leaders must address these challenges or continue to exist with
a fragmented acquisition organization that can only provide
stop-gap, ad hoc solutions.
Mr. Chairman, this concludes my statement.
[The prepared statement of Mr. Sullivan follows:]
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Chairman Tom Davis. Thank you very much.
Mr. Zavada, thank you for being with us.
STATEMENT OF DAVID M. ZAVADA
Mr. Zavada. Thank you. Good morning, Mr. Chairman, Ranking
Member Waxman and members of the committee. Thank you for
inviting me to testify before this committee today on DHS
acquisitions.
We have reported acquisition management as a major
management challenge for the Department of Homeland Security.
DHS must have an acquisition management infrastructure in place
that allows it to effectively oversee the complex and large
dollar procurement critically important to achieving the
Department's mission. We have also completed a number of
reports in this area. I will focus my comments today on some
common themes that have emerged from our work.
Acquisition management is not just the wording of a
contract, but an entire process that begins with identifying a
mission need and developing a strategy to fulfill that need
through a thoughtful and balanced approach that considers cost,
schedule and performance. The Department must develop a cadre
of skilled program and acquisition personnel, as well as robust
business practices and information systems to effectively meet
DHS's schedule demands and complex program objectives.
Expediting program schedules and contract awards
necessarily limits time available for adequate procurement
planning and developing of technical requirements, acceptance
criteria and performance measures. The urgency and complexity
of the Department's mission, coupled with the Department's
current program of procurement management capabilities, creates
an environment in which many programs have undertaken high-risk
acquisitions. Common patterns that we have seen in our reviews
are the dominant influence of meeting an accelerated schedule,
poorly defined requirements and inadequate oversight. This can
lead to higher costs, schedule delays and systems that do not
meet mission objectives.
DHS is beginning to improve its acquisition management
capability. In a 30 day acquisition management assessment we
completed for Secretary Chertoff in 2005, we made
recommendations to DHS to expand procurement and ethics
training, create and staff an organization to develop program
management policies and procedures, and ensure sufficient
procurement staff in the Bureau and at the Department level.
DHS has concurred with each of these recommendations and has
taken steps to implement them.
The urgency and complexity of the Department's mission will
continue to demand rapid pursuit of major investment programs.
While DHS continues to build its acquisition management
capabilities, the business of DHS goes on and major procurement
continue to move forward. One of those major procurement is
SBInet.
Our review of SBInet is underway, but based upon our past
work, we believe CBP faces some tremendous challenges and risks
in pursuit of SBInet. These challenges and risks include one,
an expedited time. The Department has set a tight deadline of
September 2006, requiring CBP to press hard to meet the
deadline while mitigating risks and avoiding mistakes. To
mitigate these risks, CBP must have an institutional capacity
to plan and implement a new program, administer this complex
contract and establish cost, schedule and performance controls.
Second, defining operational or contract requirements.
High-risk acquisition strategies call for mitigators and
controls. The use of a statement of objectives type of contract
is made risky by broadly defined performance requirements and
limited program management capabilities. Translating the Border
Patrol's operational requirements effectively into contract
requirement entails thoroughly identifying the problems with
status quo border control, communicating that problem to
industry, negotiating a best value solution and applying
measures of performance and effectiveness to gauge success.
Third, building an organizational oversight capacity.
Building a program office entails not only recruiting and
contracting for qualified acquisition managers and technical
experts, but also establishing robust business processes. The
SBInet acquisition strategy calls for scoping a series of task
orders over a number of years, entailing vigilant contract
administration.
Acquisition management will continue to be a priority area
for the OIG. We plan a proactive approach to identify the risks
that we see and provide recommendations to help the Department
avoid wasteful spending and obtain the right equipment and
services to achieve DHS's mission.
Mr. Chairman, this concludes my prepared remarks. I would
be happy to answer any questions.
[The prepared statement of Mr. Zavada follows:]
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Chairman Tom Davis. Thank you very much.
Ms. Duke, thank you for being with us.
STATEMENT OF ELAINE C. DUKE
Ms. Duke. Good morning Chairman Davis, Ranking Member
Waxman and members of the committee. Thank you for the
opportunity to appear before you to discuss the Department of
Homeland Security acquisition program.
I am a career executive and have spent my 23 years of
public service as an acquisition professional. On January 31,
2006, I was selected as the Department's Chief Procurement
Officer.
Accompanying me today are Mr. John Ely and Mr. Rick
Gunderson. Mr. Ely is the Executive Director of Procurement for
Customs and Border Protection. Mr. Gunderson is the Assistant
Administrator for Acquisition for the Transportation Security
Administration.
My two main priorities as the DHS Chief Procurement are to:
No. 1, build the DHS acquisition work force; and No. 2, enhance
acquisition planning. These priorities, detailed in my written
testimony, are designed to mitigate the challenges the
Department faces due to significant increases in contract
spending, shortages of acquisition personnel and mission
urgency driving aggressive schedules.
Since our establishment in 2003, the Department has seen
significant growth in its acquisition program. In less than 3
years, the Department has grown from $6.7 billion to over $17
billion in obligated contract dollars in fiscal year 2005, with
66,000 contract actions with 15,000 prime contractors.
The Chief Procurement Officer has initiated staffing
solutions to resolve personnel shortages and build in-house
capacity to handle contracting actions. Balancing the
appropriate number of DHS contracting staff with the growth of
the contracting requirements has been a challenge. My office
has taken the lead department-wide to create a centralized
recruiting system for contracting personnel within DHS
components and enhance the DHS Acquisition Fellows program,
targeting recruitment efforts to recent college graduates.
As a new department, it has been a challenge to grow DHS,
since our mission requires the infrastructure to be built while
simultaneously meeting operating requirements. But despite the
challenge, the Department has had significant accomplishments
in securing the vital infrastructure, products and services
that ensure the security of the American public.
Each initiative is guided by an acquisition process that
includes three key factors: performance, cost and schedule.
These factors comprise the major elements of procurement
decisionmaking and valuation. Balancing performance cost and
schedule requirements is challenging for all agencies, and is
especially challenging for DHS, given its mission and current
contracting staffing levels. When necessary due to urgency of
mission, DHS has entered contracts for goods and services in
short periods of time to provide immediate relief to meet
pressing humanitarian needs and protect life and property.
Since DHS operation is in a rapid acquisition environment,
it must prioritize its acquisition planning beyond what is
generally expected of a non-emergency response agency to ensure
that decisions are made properly and timely. It is critical
that DHS continue to develop an acquisition system that
includes professionals in all disciplines forming an
acquisition team, including program management.
DHS has initiated a program management counsel to build
this necessary cadre of professionals in the Department. We
want to make sure we have accountability at DHS, so that we are
responsible stewards of the public funds. But we want to make
sure that we can act quickly to save lives.
The challenges DHS has experienced since its inception have
tested our capabilities, but have also demonstrated our
resolve, strengthened our determination, increased the urgency
of our efforts and underscored a solemn responsibility that all
of us may face.
In closing, I would like to express my gratitude to
Chairman Davis and Mr. Waxman for working with DHS to develop
better business practices at the Department. I look forward to
continuing to work with the committee on developing solutions
to current and future issues, including the ones we are
discussing today.
I am glad to take any questions and thank you.
[The prepared statement of Ms. Duke follows:]
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Chairman Tom Davis. Thank you very much.
Mr. Ely and Mr. Gunderson, do you want to make brief
statements?
Mr. Ely. I just want to say good morning, Chairman Davis,
to you and Ranking Member Waxman and the distinguished members
of the committee. I am John Ely, that has been said before, and
I am the Chief Procurement Officer of Customs and Border
Protection. I just want to let you know that I am pleased to be
here today to answer any of your questions.
Thank you.
Chairman Tom Davis. Thank you.
Mr. Gunderson. Just a couple of minutes, please.
Chairman Tom Davis. Sure.
Mr. Gunderson. Chairman Davis, Congressman Waxman and
members of the committee, thank you for the opportunity to
discuss the Transportation Security Administration's
acquisition and contracting programs. As the Assistant
Administrator for Acquisition, I provide direction and
oversight of TSA's acquisition program, including the award and
administration of contracts, grants and financial assistance.
Since TSA was enacted, it has obligated more than $2 billion
per year for supplies, services and financial assistance in
support of various TSA missions.
As you are aware, through its enacting legislation, TSA was
faced with significant mission challenges. To meet those
challenges, TSA awarded several large contracts to industry
teams in an abbreviated time period with minimal staffing.
Major contracts included the purchase, deployment and
maintenance of security screening equipment at more than 440
airports, the outfitting of TSA operations with the necessary
information technology equipment and the recruitment,
assessment and hiring of screeners.
While these contracts resulted in the successful
accomplishment of the missions, they came at a higher cost than
originally estimated. The increases were due to several
factors, but changing requirements was the primary driver. As a
result, the final cost of these contracts should not be
compared to the original amounts without considering the
original work performed. These major contracts, awarded in the
stand-up phase of TSA, have been replaced with new contracts
that implement a more streamlined approach, greater
opportunities for small businesses, and a greater emphasis on
performance-based measures.
For example, maintenance of our security screening
equipment was originally accomplished through a single large
integrator contract but has since been replaced with several
contracts that have fixed price terms and eliminated
unnecessary layers of contractor support. As a result, TSA has
transferred cost risks to industry and lowered the maintenance
costs per machine.
I will continue to strengthen the acquisition program at
TSA through the implementation of policies and procedures
targeted to provide greater effectiveness and oversight,
implementing new business strategies to decrease costs and
increase performance, and building a stronger acquisition work
force.
Thank you for the opportunity to testify before the
committee, and I would be pleased to address any questions you
may have.
Chairman Tom Davis. Thank you. Let me start the questions,
because I am going to have to run.
I understand there are changes in scopes in contracts and
that is what causes them to grow on many occasions. It is not
just always that they bid low, do a buy-in and then try to come
back. Of course, one of the difficulties is when you bid the
contract out originally and it comes in at $104 million and
then grows to $700 million, it is not competitive all the way
through. You might have gotten a different outcome had you
known what you wanted in the first place. Is that a fair
comment?
Mr. Gunderson. Yes.
Chairman Tom Davis. I had been in Government contracting
for 15 years before I came to Congress. I was the general
counsel for a billion dollar company that did a lot of
Government contracts. I understand where it goes right and
where it goes wrong.
The other thing that really alarmed me, just looking here
on the macro, was the number of contracts that were awarded
that were sole source, without full and open competition. It
seems to have exploded here. Not just in your agency, but I am
saying, across the Department.
Now, I wouldn't be sitting here complaining about that,
because I understand the need to do that on occasion, you get a
unique technology, you need it quickly, you can go out and
respond to an unsolicited proposal or whatever. And we even set
up something in the Department of Homeland Security called
Other Transactions, the OT, where people who aren't used to
selling to the Government can come in and do it. So I don't
think it is inherently bad, but when you are getting terrible
results like this, we have to ask the question, and assume that
maybe that is part of the problem.
Ms. Duke, do you want to address that?
Ms. Duke. I would agree with you, Mr. Chairman, competitive
contracting is the preferred way to go. We did have a dip in
our competitive numbers, primarily due to the Katrina
contracting in FEMA. Our numbers were at about 76 percent
competitive at the onset of the hurricane season.
What we are doing to counteract that is putting the
contingency contracts in place, in FEMA specifically, and
improving our planning so we have the contracts competitively.
Chairman Tom Davis. But let me just add, to get back to
Katrina, as you know, I was the author of the investigative
report. One of the problems we found there is that we were
giving out these large contracts, contingency contracts, and at
the end of the day we didn't make use of locals, there were a
lot more efficient ways we could have done this downstream. It
really wasn't thought through. We gave it to these big
companies and they add surcharge after surcharge as it moves on
down. You get the local guys doing the work, but you have a
huge markup along the line.
I think we have learned, hopefully, we have learned our
lessons from that.
Ms. Duke. Yes, we have. We have national strategies for
immediate response for regional or local. But we also have
regional programs in place, for instance, the maintenance and
deactivation of trailers is all being done now by local
contractors in the Gulf region. So we do agree with you on that
strategy.
Chairman Tom Davis. We got a letter today from FEMA on the
trailers. I don't know if anybody can answer this, but
basically they are telling us something different from what the
IG has said. FEMA puts out this fact sheet. They say, FEMA is
unaware of a termite problem in any of the 95,000 trailers that
are currently deployed along the Gulf Coast, with the exception
of just one report. A random sample of 200 trailers also
negative results for termites.
My understanding is, and I haven't been there, that at the
site in Arkansas where we have stored literally thousands of
trailers that we have a number of termite-infested trailers
there. Can anybody shed any light on that?
Ms. Duke. I do know that in the Gulf region termites are an
issue, and there is a quarantine in 11 of the parishes for
Formosan termites. FEMA has procedures in place to ensure that
as those trailers are moved in the Gulf region that we have the
appropriate compliance with the Louisiana----
Chairman Tom Davis. Well, here is what I want to ask, and
if you don't have the answer today, I would like to send a
couple of people down to go through those trailers that are
sitting down there in Arkansas. We purchased a lot of trailers
that it doesn't look like will ever be used. I understand
sometimes contingency planning and storage and things go awry
and that appears to have happened in this case.
But my question is, are any of those trailers that we have
stored for ``future use'' that American taxpayers have paid
for, have we stored them in a way down there that they are
termite-infested? If you can't answer that, I would like you to
just give us a straight answer.
Ms. Duke. I do not have information about the stored
trailers in Arkansas.
Chairman Tom Davis. Could you please check on that?
Ms. Duke. Yes.
Chairman Tom Davis. That again would just be--I don't want
to dwell on it, but just go back and check that, because we
have information that they are. We would be happy to send an
inspector down. I know Members have been denied that right. Mr.
Waxman and I and Mr. Duncan would be, we just want to see what
has happened, what has gone wrong here. Maybe there are better
places to store them. We understand what happened with Katrina,
it is the largest reported storm in history. And the response
just was not as efficient as it might have been had we been
more prepared and seen it coming and everything else, so I
don't want to dwell on that.
I want to ask you just a couple of other questions. Do you
have enough trained procurement personnel, or do you need more?
Ms. Duke. We need more. We have an increase coming in the
current 2007 budget of about 200 additional. We are working
toward needing even more over time. As you know, Mr. Chairman,
our spending is increasing. We increased 35 percent just
between 2004 and 2005.
Chairman Tom Davis. Well, you are darned if you do and
darned if you don't. I remember when we started up, contractors
were lined up, when is Homeland Security going to start coming
out with all these contracts. I think the philosophy at the top
was, we are going to wait until we know what the mission is,
what our requirements are before we go out and spend money. I
think on that stage we did a good job.
The problem is, once they came out, some of the oversight
and everything else, and particularly emergency response has
just been a little sloppy. My concern is, a procurement officer
in the Government is worth their weight in gold. If we can buy
what we want and get the best value for the taxpayer, we are
going to save tens of billions of dollars annually. We don't
spend enough time doing that. It is not your fault, Ms. Duke,
but Government-wide, this just has not been given the
appropriate attention. In fact, some of it has been tied from
Congress. We have Members who think, to save money, we are
going to cut procurement officers. And that makes it very
difficult to give appropriate oversight to contracts.
But more importantly, that contracting officer is not
always in touch with what the agency needs, and doesn't always
use the best vehicle. I think Mr. Waxman and I would say,
competitive vehicles are usually best, because it offers you an
array of choices and competition tends to bring costs down for
the taxpayers.
I don't want the agencies to come up here and say we
haven't given them enough resources and that we are asking you
to do more with less. I understand you are a career employee
that they have sent up here today to answer for some of these
things. But these mistakes start at the top where they have
just not kept their eye on the ball, haven't committed the
resources here. Yet TSA in particular, we gave them particular
flexibilities in hiring that no other agency in Government has
to try to get to this.
And I just think on the procurement shop, from this
committee's perspective, we don't have jurisdiction over all of
the funding and everything else. We need to know what you need.
Because one huge cost overrun or $100 million ends up costing
more than hiring 25, 100 good people that could have overseen
this thing and done it right. Is that a fair comment?
Ms. Duke. It is. And as we prepare our fiscal year 2008
budgets, I am looking at each's component's budget and how they
are budgeting for acquisition work force members, and am taking
a consolidated Department look at that to make sure that we are
putting into our budget the right amount of contracting basics.
Chairman Tom Davis. How much buying do you do off the GSA
schedules?
Ms. Duke. I don't have an exact number, but a considerable
amount.
Chairman Tom Davis. Ballpark?
Ms. Duke. If I had to guess--we could get you an exact
number. But I would say of dollars, potentially up to 30
percent.
Chairman Tom Davis. When you give the schedules, do you
usually go to two or three groups to shop around, right?
Ms. Duke. Yes.
Chairman Tom Davis. It is not just one. How much do you do
off of GWACS, off of wider contracts? What percent, ballpark?
Ms. Duke. Mostly in the IT area, like integrated wireless.
I would say in IT dollars, a lot of those vehicles are new, so
less, 10, 15 percent maybe.
Chairman Tom Davis. OK. I have a lot of other questions,
but I have to run over to the Senate, so I am going to give Mr.
Waxman a few minutes, and I am going to turn the Chair over to
Mr. Duncan.
I appreciate your being here. This is a serious, serious
problem, and it is a black eye for the administration to have
these things. We just need continued oversight. And don't
hesitate to ask. We don't want to just keep you out there, and
if you are not getting the tools you need, we need to know
about it. But the oversight that has come from the top here has
ended up costing us billions of dollars that we could have
better spent on a lot of other items. We will go over and fight
on the floor over $20 million or $10 million sometimes on a
program or an earmark or something like that, while billions
get wasted just in the way we are doing business. That is what
we are trying to get at today, and I appreciate your being
here.
Mr. Waxman.
Mr. Waxman. Thank you, Mr. Chairman.
One of the frustrating parts of all of this to me is how
this administration and its approach to Federal contracts is
that no one seems to learn from their mistakes. We have seen
incredible waste in Iraq. We have seen the same thing in
response to Hurricane Katrina and now we see it at the
Department of Homeland Security.
A good example is how this administration approaches border
security. Under a deeply flawed contract called Integrated
Surveillance and Intelligence System [ISIS], the Customs and
Border Protection Office wasted enormous sums on a high-tech
surveillance system that never worked. Now, instead of learning
from these mistakes, the Department wants to enter into an even
bigger contract called the Secure Border Initiative, which will
cost taxpayers $2 billion. In my questions in this round, I
want to focus on these two contracts.
Under the ISIS contract, over $400 million was spent on
thousands of cameras and sensors to monitor our borders. Most
of this money was spent during the past 5 years. The idea was
that this would be a high-tech, state-of-the-art surveillance
system for protecting our borders. Mr. Zavada, the Inspector
General examined the ISIS contract and the equipment purchased
under it. I would like to ask about your findings. Weather
conditions on the border can be demanding. How well did the
cameras function when exposed to snow, ice, humidity and
extreme temperatures?
Mr. Zavada. We reported problems with the functioning of
the equipment in our report.
Mr. Waxman. They malfunctioned, in other words?
Mr. Zavada. Yes. Some issues with the operation of the
equipment.
Mr. Waxman. I understand that another problem was power
outages. Did the cameras experience this problem?
Mr. Zavada. I am not aware of that.
Mr. Waxman. What we found out was that even if the cameras
systems were working, I understand that they didn't detect
movement automatically. Instead, the Border Patrol officials
had to be monitoring the cameras at all times, which rarely
happened, is that right?
Mr. Zavada. I believe that was the case.
Mr. Waxman. When you took all these factors into account,
what did you conclude? Was the ISIS system an effective system?
Mr. Zavada. I think from a contract management standpoint,
we found problems with the way that the program managers
managed that contract. There were communication problems, that
was a contract that GSA was the contracting officer for that.
What we reported in our report was that there were
communication issues between the Border Patrol program people
and the GSA contracting officers that inhibited effective
program management.
Mr. Waxman. The taxpayers spent $400 million on this
system, which didn't work. Even if the cameras had worked, they
only covered 5 percent of the border, leaving 95 percent
unprotected. This hardly sounds like a dependable state-of-the-
art equipment.
Mr. Ely, do you agree that this equipment was inadequate?
Mr. Ely. Yes, sir, but I would like to qualify that with a
little bit of personal experience. I have been down on the
border and I have watched the cameras and sensors. It is
interesting to see that it does expand the capability of Border
Patrol agents to keep an eye on particular geographical areas.
I did study the ISIS situation. You are correct with many
of the things that you say. But I would like to swing back to
the contract management issue. That is a gigantic issue, not
just in Homeland, but I believe in Government, that we think we
are there when we sign a contract, but the delivery is the
really important part. We have to manage these carefully.
Border Patrol was working through GSA, GSA is not what I
would call a ``family member'' when it comes to managing
contracts. They work hard, they do a good job. But they are not
in-house procurement experts.
Mr. Waxman. Well, let me go through this issue, because
auditors for the General Services Administration Inspector
General concluded that the dismal oversight of this program
placed taxpayers' dollars and national security at risk. Rather
than learn from this mistake, DHS officials seem poised to
repeat them. Because in March of this year, DHS asked
contractors for proposals for a new Secure Border Initiative
[SBI]. It will be a $2 billion Federal contract to design,
build, test and operate a massive border security system.
Here is the only requirement DHS established in its request
for proposals. DHS wants ``highly reliable, available,
maintainable and cost-effective solutions to manage, control
and secure the border, using the optimal mix of proven, current
and next generation technology, infrastructure, personnel,
response capabilities and processes.'' Mr. Zavada, in your
opinion, does that adequately define technical and cost
requirements?
Mr. Zavada. In terms of SBI, we have, based upon the past
work that we have done, we have identified three risk areas
related to that contract. The first one is the accelerated
schedule. Certainly the accelerated schedule to meet the
September deadline, combined with the program management
capabilities, as they stand, is a potential risk area.
Mr. Waxman. Do you think it is a problem that it is such a
vague description of what is needed to create this program?
Mr. Zavada. That was the second risk area that we pointed
out. The contract objectives in the past, in our past reports
we pointed out that broad contract objectives can be
problematic and have created issues in other contracts.
Mr. Waxman. Mr. Sullivan, do you agree, this $2 billion
contract rests on deeply flawed contracting philosophy. In
January, Secretary Michael Jackson told potential bidders for
SBI, we are asking you to come back and tell us how to do our
business. That is incredible. There is no plan. There is no
attempt to do the hard thinking about what needs to be done to
secure our borders. Instead, DHS is outsourcing the job of
Government to private contractors.
What is your view on that?
Mr. Sullivan. It is interesting, because one of the reasons
I am here testifying today for GAO is the work that I have done
in the area of the Department of Defense and some of the major
acquisitions that it has to make for weapons systems. In doing
the work, I did the work looking at DHS' major investments and
some of the strategic sourcing and things that I talked about.
There are so many similarities, it seems to me, including
the cost schedule and performance outcomes that I hear, in the
Department of Defense I would say that there are very similar
problems. The requirement setting process at both the strategic
level and at a tactical level for a specific weapons system is
flawed, very similar to what Mr. Zavada explained for the DHS.
Mr. Waxman. It seems that the Department is asking private
contractors to tell the Department what it needs, rather than
the Department defining its own needs. It doesn't make sense to
me, and I would be curious whether it makes sense to you, do
you really think it is a good idea to launch a multi-billion
dollar procurement program without adequately defining
technical or cost requirements?
Here is the problem as I see it. The Department, in fact
the whole administration thinks private contractors are like
fairy godmothers. You tell them we want a certain thing done,
we want to protect our borders, we want to keep these illegal
aliens from getting in here or terrorists getting into the
country. It is a hard problem. It is a hard problem to rebuild
Iraq. It is a hard problem to restore the Gulf Coast, making
our country secure, it is hard.
But the administration assumes that private contractors
will be able to wave a magic wand and solve the problem.
Mr. Sullivan. Yes, sir. I think when you are setting
requirements for systems and programs as complicated as what we
are talking about here, you are going to have perhaps a limited
industrial base. So in order to do that, you have to set
requirements, you have to study requirements, you have to study
the needs, the mission needs of the DHS, and understand very
thoroughly, I think, what you need, rather than asking them to
supply that information for you.
And then in addition to that, because I think you are
asking for, in many cases, systems that aren't necessarily
going to have other markets or are going to be technologically
challenging and risky, you need to have way more internal
controls in place than it appears DHS has when you put an RFP
out for a contractor. You need to do, for example, you need to
ask them for cost data. If they are going to come back with a
proposal to meet your requirements, they should provide the
cost. You are in a sole source environment because perhaps the
technology is proprietary or very limited and very risky. Sole
source means that the Government needs to understand how much
it is costing that contractor to bid those kinds of proposals,
so that a fair and equitable price can be determined.
Mr. Waxman. Well, the net result of all this is the
contractors get rich, the problem doesn't get solved and
taxpayers get stuck with the bill. That is what our concern is,
and I think it is shared by everyone on this panel.
Thank you, Mr. Chairman.
Mr. Duncan [presiding]. Thank you, Mr. Waxman.
Let me ask you this. Both the chairman and the ranking
member mentioned this $104 million airport screener contract
that ran to $740 million that NCS Pearson did. The report says
in addition that NCS Pearson had $297 million worth of very
questionable costs.
Then we have the L3 Company that came up with the $400
million surveillance system that apparently doesn't work. Is
the Department still doing business with those companies? Has
any action been taken toward either one of those companies or
other companies that have huge cost overruns or questionable
costs?
Ms. Duke. The screener hiring contract, the $104 million,
that ended in December 2002. So it was just used during the
initial roll-out, from April to December 2002.
Mr. Duncan. But that wasn't my question. Is the Department
still doing other business with NCS Pearson, or was any kind of
action taken against them?
Ms. Duke. I don't know of any major contracts with--I know
we don't have any major contracts. We might have a small one. I
could check on that. But we do not have any major hiring
contracts with NCS Pearson at this time.
Mr. Duncan. What about the L3 Communications Company that
provided this $400 million surveillance system that is not
working?
Mr. Gunderson. Are you referring to the explosive detection
systems? Yes, we still have contracts with L3 for the delivery
of systems.
Mr. Duncan. So you are not taking any action against
companies that have these huge cost overruns or provide
equipment that doesn't work?
Mr. Gunderson. With respect to the effectiveness of the
machines, there was no cost overruns on the production of the
machines. The increased costs associated with that program was
with the deployment of the machines, outfitting the airports to
install the machines.
With respect to the effectiveness of the machines, the
chief technology officer is best to address those issues. What
we have done in other areas from a contracting perspective is
incentivized the contractor to improve the reliability of the
machines, as far as how often it breaks down.
Mr. Duncan. So you mean when they provide equipment that
doesn't work, you give them extra money, incentive money to
come in and make sure the equipment works?
Mr. Gunderson. I would term it as disincentives. If the
machines do not achieve a certain amount of reliability, then
they would lose money from their profit.
Mr. Duncan. Let me ask you this. We have a later witness
that says that all contracts should be competed, even when the
dollar amount is under the legal threshold. What do you think
about that? Mr. Sullivan. Ms. Duke.
Mr. Sullivan. I think that contracts should be competed. I
think there are situations where it might not be possible to
always have competition in cases where you have proprietary
technologies or risky technologies or where you might have to
go to a cost plus arrangement to push technology or something
like that. But other than that, I think competition is always
the most healthy way to purchase things.
Mr. Duncan. Ms. Duke, when you referred a few minutes ago
to the 76 percent competition, were you talking about 76
percent of all contracts over the limit, or 76 percent of all
contracts total?
Ms. Duke. Of all our DHS contracts.
Mr. Duncan. That was counting even those under the legal
threshold, is that what you are saying?
Ms. Duke. We are required to compete. The competition in
contracting as a statute kicks in over $100,000. But even under
$100,000, we are required by regulation to compete those or
justify not competing them.
So there are different guidelines, one is statute, one is
regulatory. But our requirement is to compete all contracts as
a standard business practice.
Mr. Duncan. And this later witness says under no
circumstances should the Department allow contracts to become
de facto, illegal, cost plus percentage of cost contracts. What
do you think about that?
Ms. Duke. I agree with that, that cost plus percentage of
cost contracts are illegal and should not be done.
Mr. Duncan. All right. He says it was done in this Boeing
$1.2 billion contract to install and maintain explosive
detection systems.
Ms. Duke. I believe the IG report said that there was an
appearance of that. Because of the urgency of awarding that
contract, the award fee provisions were not negotiated until
after award. And some provisional award payments were made.
That was corrected during the performance of the contract. So
there was an appearance, but it was not a cost type percentage
of cost contract.
Mr. Duncan. And finally, he is recommending that when the
bulk of the work is being done by subcontractors, that as much
as possible the middleman should be cut out. I can tell you
that I got a call from a trailer manufacturing company, not in
my district, but from Tennessee back when all the Katrina stuff
was going on. This was a company making a lot of these trailers
that we have heard so much about. This company owner said that
they were having to provide DHS these trailers through a
middleman who was doing nothing to the trailers but adding
$4,000 to the cost of each one.
He said he would like to find somebody, he said he was
perfectly willing to sell these trailers directly to DHS and
save that $4,000 per trailer. But they wouldn't let that be
done. What I am wondering about, it would have been so simple
for one person at DHS to handle something like that. Has that
gotten any better?
Ms. Duke. I think whether you should layer or not is really
a value proposition. It is similar to if you are having
remodeling in your home and you are deciding whether you want
to have a general contractor [GC], or you want to contract
directly with a plumber and electrician. But I do think it is a
decision that should be consciously made on each program and
that we shouldn't add layering unless there is that value of
management or integration.
Mr. Duncan. Let me mention one other thing. The day before
yesterday we had the third in a series of hearings pointing out
tremendous waste by the Department of Defense selling items,
even items that cost $120,000 or $200,000 for just almost
nothing to people in the private sector. Some of these things
were brand new. One of the smaller items was they sold $23,000
and some odd dollars worth of brand new boots that had never
been worn for $69 to this one company. Not $69 per pair of
boots, but $69 for the whole $23,000 and some hundred dollars.
I hope that you will make sure that we don't start selling
these thousands of trailers that are sitting unused for just
pennies on the dollar.
Ms. Duke. The current plan is to use the manufactured homes
that have not been used yet for future disasters. There is no
current plans to resell them.
Mr. Duncan. Let me ask one final question. The major
problems that plague DHS acquisition, these are not new. Since
the Department started, these problems have been the subject of
hearings in both the House and Senate, reports by the Inspector
General, by the GAO, by the press. Yet despite the fact that
everyone hears about and reads about and knows about these
things and everybody says they are terrible and scandalous,
they never get fixed. Do you have an opinion, Mr. Sullivan, on
why we are not seeing more progress? It is just not possible
for a gigantic bureaucracy to handle an acquisition program in
a cost efficient, effective way?
Mr. Sullivan. In fairness, I think we should remember, it
is still a young organization and its mission, it is probably
still working very hard to bring these 22 or 23 different
cultures together and be able to put in unified policies into
that.
But that said, I think it is possible, obviously, to do
better. I think the things that the organization has to focus
on are some of the things we discussed here. They need to
understand the mission needs, they need to be able to
articulate requirements for the goods and the services and the
big acquisitions that they have to make. They need people in
place who understand that. And then they need internal controls
to ensure that the industrial base that is supplying these is
supplying them to them at reasonable cost and with reasonable
performance.
Mr. Duncan. All right. I think Mr. Ruppersberger is next.
Mr. Ruppersberger. A couple of things. We do have a serious
problem in Homeland Security. A lot of it is because of what
you just said, it is a young organization, we don't have our
systems down completely, and I think because of the fact that
we are talking about Homeland Security, there is a lot of
rushing to get equipment that hasn't been properly tested, and
that we really need to maybe move forward with pilot programs,
or even a contract if we could get it in there, a penalty if a
contractor is saying this equipment works and it turns out that
it doesn't.
Would you think that we could have that? I guess I would
ask you, Mr. Ely, about the possibility of a penalty clause in
a contract for our contractors that are supplying radiation
equipment or other equipment that just isn't working.
Mr. Ely. Yes, sir, I think you have hit it right on the
button, what you are telling us, and I agree with you 100
percent, it is post-award management. Penalties are doable
under Government contracts. And we are moving in this direction
very similarly to what you are discussing, by building post-
award management capability that will allow us to be even
closer to the results of these contracts, and penalize
contractors when they should be penalized and incentivize them
when they should be incentivized.
Mr. Ruppersberger. We need to have you get back to us on
that from our oversight point of view. There are cases, and I
just want to name a few here, your airport screeners contract,
baggage screening equipment contract, airport computer network
contract, radiation detector contracts, the cruise ship area
where we probably could have sent a family to a top-rated hotel
in Las Vegas than where we were now.
Now, I understand we were working under difficult
situations and Homeland Security is new. But sooner or later,
we are going to have to step up, because there is just not, we
can't continue to lose billions, not millions, of dollars. I am
asking you all to come back to us, and with the help of GAO, to
let us know what the proper systems are. Your internal
controls, things of that nature.
Let me, since we only have a short time, just to review one
area. I don't know if I can get to another. I represent the
Port of Baltimore and am the co-chair of the Port Security
Caucus, the congressional caucus. I want to talk to you about
the radiation detector contracts. Again, we have an issue there
that the contract that was given out, I think $286 billion to a
major contractor, really turned out to be wasting a lot of
money. The machines turned out to be so sensitive to radiation
that they can't distinguish between weapons-grade nuclear
material and items that naturally emit radiation, like cat
litter, porcelain toilets, bananas, things like that.
Mr. Ely, would you agree that this major contract that has
provided the radiation detector contracts cannot quickly
determine the type of radioactive material they detect?
Mr. Ely. Sir, the best I can do to answer that question is
to clarify that with the RPMs, we are actually----
Mr. Ruppersberger. With the what?
Mr. Ely. Radiation portal monitors. We are actually engaged
in a contract through an interagency agreement with DOE. Energy
provides other services, along with bringing in the portal
monitors, radiation monitors. It is an ongoing test and
evaluation environment.
So unlike a direct contract between Customs and Border
Protection and a commercial firm, we are working with another
Government agency. The rules are a bit different in working
that way. But from what I have gleaned, this is a continuous
development and learning process in the application of these
devices. We can enforce these, but only working through
Department of Energy.
Mr. Ruppersberger. Do you agree that there is technology
that is out there that can provide the detection we need for
nuclear components?
Mr. Ely. Sir, I am not qualified, I am a procurement guy.
But what I have learned in talking to the CBP program people is
that it is constantly evolving. The Department, and DNDO in
particular is looking at a higher level machine right now. It
looks like we are moving toward working more with this new type
of technology.
Ms. Duke. The Advanced Spectroscopic Portals [ASP], we just
awarded three contracts through Domestic Nuclear Detection
Office. That is a new technology, and has a much lower false
alarm rate and better detection. And ASP is the new generation
of the machines you are talking about now.
Mr. Ruppersberger. I had occasion, right after the Dubai
Port issue, to go to Dubai and to meet with their port security
people and to also observe equipment that they have, which is
probably some of the best equipment in the world. When we
decide to move forward and to try new equipment, do we look at
other equipment throughout the world? Do we test it? Or are we
again jumping into an area where we are going to spend millions
and millions of dollars and we find out that it doesn't work?
Because the first set of equipment that is there, we wasted
all that money. The contractor got paid and we don't have the
money to use for something else. So you need a system to make
sure that you are getting what is out there, the top
technology, and to do your research throughout the world. Do we
do that? Is the system in place to do that now?
Ms. Duke. I agree with you, we need to do that. I think
that was the reason for setting up the Domestic Nuclear
Detection Office, to make sure we have that centralized,
cohesive strategy that is not just a DHS office, it is a
Federal-wide office, housed within the Department of Homeland
Security. So I do believe that is an initiative to support what
you are saying.
Mr. Ruppersberger. Do you work with the Department of
Energy in that regard?
Ms. Duke. No, that is not through the Department of Energy.
Mr. Sullivan. I would just say, on this generally speaking,
in terms of technologies like this where we are going to spend
millions, hundreds of millions and maybe even billions of
dollars, one of the things that we found when we did our work
in 2005, and we still find deficient in their policies for big
acquisitions, is the need to have thorough reviews and testing
of technologies before you start a program like this. I think
that is one thing.
When you look at the investment review board policy that
DHS has right now, they could strengthen, that is a control
they could use right now to strengthen their major investment,
their major acquisitions, is to focus on technology readiness
before they let those contracts.
Mr. Ruppersberger. And also the possibility of a pilot
program.
Mr. Sullivan. Yes, absolutely.
Mr. Ruppersberger. It seems to me that GAO should be in the
picture before instead of after. We might be a lot better off.
Mr. Sullivan. We try.
Mr. Ruppersberger. Well, it didn't work here.
Is my time up? I can't see the clock. I yield back my time.
Mr. Duncan. Well, thank you very much, Mr. Ruppersberger.
For 18 years, I have heard, every time a Government agency
messes up, either they are under-funded or their technology is
out of date, although the Federal Government has much newer
computers and technology than in the private sector.
Mr. Gutknecht. Thank you, Mr. Chairman.
Let me just first of all offer a couple of observations. In
response to something that Mr. Waxman said earlier, I think he
made the reference that the contractors' response to most of
our problems is to throw more money at it. Well, the truth of
the matter is, we are responsible for that as well. I think
that many times is the response here in Congress.
I was a healthy skeptic of the whole idea of combining
these 22 agencies into one super-agency. I remember, and I am
not that old, I can still remember what the argument was, that
there would be efficiencies and this would be less expensive in
the long run. Well, that was then and this is now, I guess.
The other point I would like to make in response to
something that you said, Chairman Duncan, and that is, as we do
dispose of some of this equipment, whether it be trailers or
boots, and I am a licensed and bonded auctioneer, so I have a
vested interest in this in some respects, but I understand what
the Federal Government just resists every step of the way is
hiring auctioneers to get rid of some of this surplus
equipment.
I am going to make that comment. I have said it a hundred
times, and I will keep making the point. Because it is one way
that you can at least ensure there is some competition, instead
of selling all these boots for $69. You would have gotten fair
value, I think, if they had been willing to pay an auctioneer
10 percent of the proceeds, they would have made a lot of money
for the taxpayers.
Anyway, my real issue, and I am going to come to you, Mr.
Zavada, and I want to say a special thank you to one of our
colleagues who can't be here today, and that is Congressman
Platts from Pennsylvania. He has really been a leader in trying
to bring about more accountability, not only in this
Department, but in Government in general. I want to call your
attention, I am sure you are aware of Public Law 108-330, Mr.
Zavada.
I will just give you a little background. My daughter and
her husband are both CPAs. One works in the private sector, one
works on the public side. One of them loves Sarbanes-Oxley and
the other one hates it. But essentially that act, if I
understand and remember correctly, was about bringing some of
those kinds of standards to bear on the Department of Homeland
Security.
One of the things that is in that law is the requirement
that they create--I want to make sure I use the right term
here--but they have internal controls. We have had a process,
we understand there are a lot of problems, but I wonder if you
could talk about the quarterly reports and the progress that
you see being made under Public Law 108-330.
Mr. Zavada. I assume you are talking about in the area of
financial management?
Mr. Gutknecht. Exactly.
Mr. Zavada. Right now, the Department needs to focus on
corrective action plans. We have been working with them and
providing some guidance through some audits that we have been
doing to direct them toward the corrective action plan process.
What they have done to date is put together, or are working on
putting together a Department-wide corrective action plan and
corrective action plans in particular focus areas.
There are some signs of progress. To a large extent, the
CFO suffers from the same issues that we are talking about
today in relation to the chief procurement officer, staffing
and capabilities. But there are some signs of progress in some
of the bureaus.
Mr. Gutknecht. Well, in October, don't they have to come
forward with a full financial report?
Mr. Zavada. Yes, in November, yes.
Mr. Gutknecht. Any idea of what that report is going to
look like?
Mr. Zavada. I am hopeful that there will be some marginal
signs of improvement. But to a large extent, correcting many of
the material internal control weaknesses that the Department
has is going to take a long-term effort.
Mr. Gutknecht. I am always skeptical when I hear about this
long-term thing. Mr. Sullivan said, well, the Department is
still relatively young. I always remind people, we won World
War II in 3\1/2\ years. This country can do big things. But we
have to raise our expectations.
I think one of the weaknesses we have had here in Congress
is we have been too willing to accept low expectations in some
of these departments, in managing their funds and being
accountable for the taxpayers' dollars that we give them.
So I really am glad we are having this hearing. I hope we
have a lot more hearings. And again, I want to congratulate my
colleague, Congressman Platts, for what he has been doing on
his subcommittee to try and hold more of these departments more
accountable.
I yield back the balance of my time.
Mr. Duncan. Thank you very much, Mr. Gutknecht.
Mr. Kucinich.
Mr. Kucinich. Thank you very much, Mr. Chairman.
I am looking at the title of this report. If I walked into
this hearing just cold, from nowhere in particular, and I
looked at the title of it, Waste, Abuse and Mismanagement in--
fill in the blanks. The blanks could be filled in, it could be
Waste, Abuse and Mismanagement in the Department of Defense,
Waste, Abuse and Mismanagement in the Administration of
Contracts in Iraq, Waste, Abuse and Mismanagement in Army
Surplus Material. I have heard this so many times before, and
someone comes here and tries to pass it off, well, we are just
a new agency, apparently you are not new at all, because you
are doing what everyone else does.
I am offended when I hear this stuff. People in our
district work real hard to pay their own bills, and they pay
their taxes and what they get is this kind of thing. I am
looking at the appendix, Mr. Chairman, and I am looking at some
of the biggest companies in America. They don't know how to run
a contract? Or is it that they feel it is Government money,
taxpayers' money, they just take the taxpayers for a ride?
Accenture and Partners, $10 billion contract, here is what the
investigation says, lack of defined requirements, wasteful
spending, mismanagement. Bechtel, $100 million contract,
mismanagement, wasteful spending. Boeing Service, $1.2 billion
contract, wasteful spending, mismanagement. Carnival Cruise
Lines, $82 million contract, $62 million contract, $91 million
contract, wasteful spending, wasteful spending, wasteful
spending.
I mean, what is going on here? This is like Government as a
scam. It really is. And we shouldn't stand for it.
Another thing we ought to look at, Mr. Chairman, and you
know, I say this having voted against the creation of this
monstrosity known as the Department of Homeland Security, I
said it would take them 20 years to figure out what the left
and right hand are doing. And that goes beyond the corruption.
This raises issues. I am a former mayor. And I understand
what happens when you start passing contracts around and you
don't have oversight. You have people who are just making
themselves rich at the taxpayers' expense.
We ought to go a little bit deeper on this committee. We
ought to find out who the executives are in these corporations,
we ought to find out who their attorneys are and who their
accountants are. We ought to find out if they are giving
contributions to any political parties or if they are giving
contributions to any individuals. We ought to be looking at the
stock options of these executives. We ought to be looking at
their pension benefits. We ought to be looking at who their
lobbyists are. There is a whole system here. We are just
scratching the surface.
I would like to ask the representative of the Inspector
General here, Mr. Zavada, I would like to ask you a couple of
questions in this regard. When you review these contracts, do
you interview the companies that are involved as far as their
conduct with the Government's money?
Mr. Zavada. I think it would depend on the circumstances
involved in the particular contract.
Mr. Kucinich. Well, let's start with Accenture. Did you
interview anybody at Accenture?
Mr. Zavada. I don't know the answer to that, but I would be
happy to get back to you on that.
Mr. Kucinich. How is it possible that you can talk about
the administration of a contract and not talk to the people who
have the contract?
Mr. Zavada. I think many of the issues that we pointed out
deal with the oversight, with the program management and the
procurement management and the risks in those areas. So the
focus of our reports have primarily been on the staffing in
both of those areas.
Mr. Kucinich. Well, you have reported here that these
contracts, the administration of contracts is woefully
understaffed, right?
Mr. Zavada. Yes.
Mr. Kucinich. If then it is woefully understaffed, then
that means they can't really see how the contractor is
performing, right?
Mr. Zavada. That has been a problem. The combination of
broadly defined contracts with the oversight issues, the lack
of staffing, we mix acceleration, an accelerated time line in
there, and that is a high risk formula.
Mr. Kucinich. So Mr. Chairman, this is kind of like a
multi-billion dollar honor park. When you have an honor park,
some people come in, they pay what they are supposed to do,
because they are good citizens. But nobody really watches,
because it is an honor park.
We have reduced Federal contracting kind of like honor
parks. If you have people that are of good intention and
goodwill, they do the right thing. But if they are not of good
intention and good will, they rip the taxpayers off for
billions of dollars.
Why aren't you interviewing the people who are actually
executing these contracts as contractors? Do you intend to do
that?
Mr. Zavada. I think the focus of our work and the problems
we have seen to date in many respects has been in the way that
the objectives are defined in these contracts. That would
involve both the way the Department and the contractor define--
the Department defines what it wants and then measures the
contractor's performance in getting what they intended.
Mr. Kucinich. I thank you for pointing that out, but Mr.
Chairman, we have only half of the equation here. Think about
it. We are acting as though, well, these contractors, they just
don't know what to do, they don't know how to run a business,
and it is only if the Government tells them what to do. We are
not keeping an eye on the contractors, is what it amounts to,
because we don't have enough personnel.
I think that we need to haul in front of this congressional
committee some of these contractors, such as the Halliburtons
of the world, the Bechtels, the Accentures, the Boeings, if
necessary, the Carnival Cruise Lines. All of these people are
ripping off the taxpayers. And put them, have them raise their
right hand, put them under oath, ask them how come this
contract has gotten out of hand, how did you execute the
contract, how did you manage it.
The Government didn't do its job. You pointed that out. But
this takes two to tango here. You have contractors who know,
well, the Government is not watching me, ha, ha, ha. So I think
that we have a moral obligation here to the taxpayers of this
country who not only expect better, but they demand better. And
on their behalf, I am speaking. I am saying that this is
criminal.
And Mr. Chairman, I just would suggest to you respectfully
that our committee, this isn't a partisan matter. This is
something we can agree on. The taxpayers are getting ripped
off. We don't have to buy that for a second. And I don't want
anyone coming to this committee and saying, well, we are kind
of new at the job. Right. Handling multi-billions of dollars,
oh, well, we are just kind of new at the job. No, no, no, that
doesn't work here.
Mr. Duncan. Thank you very much, Mr. Kucinich. Almost every
major Federal contract is a sweetheart deal of some sort or
another. In fact, that is why all these big companies hire
these high level Federal employees when they leave their
offices, it is why all the defense contractors hire all the
retired admirals and generals, and then they come back and get
the offices that they headed up, or the departments they headed
up, to give them contracts.
Mr. Kucinich. Amen.
Mr. Duncan. That is what it is all about. And it is not
right, but unfortunately, it is the way it is.
Ambassador Watson.
Ms. Watson. Mr. Chairman, I really want to thank you for
holding this hearing. The Congress, since I have been here,
hasn't done much oversight. We are the protectors of the tax
dollars, supposedly. And we have given five tax breaks. So that
pile of money is being decreased. So we have to really zero in.
I am bewildered as to why we are still giving out no-bid
contracts. I must apologize, Mr. Chairman, for not being here
earlier, so I probably missed a lot of the testimony from these
witnesses. So please forgive me if I am being redundant, and
just let me know that you have already responded.
But I would like to go to Mr. Zavada, about the no-bid
contracts and what your overall response is to the no-bid. Do
they place our taxpayers at risk? Why do we do so much of that
no-bid? I can go all the way back to the Iraqi war, when
Halliburton was on the ground before we as policymakers knew
it. I understand that after Katrina they were on the ground
down in New Orleans before we knew it. They have a big, big
chunk of the money that is allotted, in many cases, without
accountability. We have had some hearings. And we know that
they have not, in every case, provided the kinds of services
that they were contracted for in a timely manner.
So if you could talk about the no-bid contracts and the
risks that we are under, but why we do so much of it.
Mr. Zavada. I can address the issue of risk with those
contracts. Certainly, they are not the preferred way of doing
business. They are higher risk contracts, and they require
mitigating controls, other steps that you have to take to make
sure that the Government is getting the best value for their
money.
So from our standpoint as an auditor, we would certainly
see those types of contracts as more high-risk type contracts.
Ms. Watson. I have not read the GAO report, but I have read
former reports. They will give you an example. Halliburton was
supposed to deliver ice and cold drinks out on the front, and
they charged $65 to the Government for a case of Coca-Cola. So
somebody, and there is a $9 billion amount of missing dollars,
and they just kind of pass it off. So I don't know, in your no-
bid process, why we continue to choose the same companies. I
heard because they have the experience. But I do know
personally that there are companies lined up to do the job, and
they don't get a chance at them because of the no-bid process.
So is there a mechanism for very quickly going to
competitive bidding, so that we can get the best bang for our
buck?
Mr. Zavada. I think that is a good question, it is probably
one best addressed by the Department's Chief Procurement
Officer.
Ms. Watson. Is there someone here? I do know that each one
of you comes from a specific department. Can anyone address
that? If not, I will wait.
Ms. Duke. Yes, I can address in general. I am the Chief
Procurement Officer for the Department of Homeland Security. We
do prefer competitive. Our numbers for doing competitive
solicitations are actually a little bit better than the Federal
Government average. But we need to get better as a Federal
Government.
We can do limited competitions under urgent circumstances.
So you don't have to jump from everyone competing to just one.
So that is a preference.
The other thing we are trying to do is put contracts
competitively in place before, in the case of disaster type,
before they hit. So I do agree with you.
Ms. Watson. That is really the kind of answer I wanted to
hear. Because I would think now, after September 11th, and
after the creation of this humongous department, which I
thought was going to be too sluggish in moving, so you have to
go to the people you know can do the job, but I would think you
would start lining up those providers who can then immediately,
if given a contract, move in.
Hurricane Katrina was a disaster in more ways than one. If
that is an example of how we respond to a natural or man-made
disaster, we are going to perish. That was an absolute
disaster. It is really scary to think that we are no better
prepared.
I represent the west coast. There is an airport adjacent to
my district. We have bridges, we have freeways and so on. I
don't see us having the resources to move in and protect them.
Homeland security is not really about the land, it is about the
people on the land. We need to be sure that those services are
there when there is an emergency.
Thank you so much, Mr. Chairman.
Chairman Tom Davis [presiding]. Thank you very much.
Ms. Norton.
Ms. Norton. Mr. Chairman, first I want to thank you and the
ranking member for this report, which exposes this
extraordinary boondoggle, that means that this war has been a
boondoggle for everybody except the troops who are stuck in
Iraq. I wanted to stop by amidst other duties this morning, and
hope that during the course of the testimony and the questions
you have uncovered why, how this long after the war over half
the contracts have been no-bid contracts, whether there is
something structural. I can't believe that wasn't somehow
attempted to be answered.
I must say, Mr. Chairman, that this report comes late in
the war. But I want everybody to remember that during World War
II, World War II, a war that had unanimous, shall I say, or
virtually unanimous support of the American people, Harry
Truman held hearings on contracting irregularities, during that
war, when his party controlled the Senate, when his party
controlled the White House. He held those hearings. Oversight
of contracts, in the midst of a war that was supported by the
American people. That is the way, it seems to me, is the
pattern that this Congress has finally to assume.
By the way, Harry Truman, instead of being punished for
that, later became Vice President of the United States. That I
think----
Chairman Tom Davis. I think he went higher than that.
[Laughter.]
Ms. Norton. Ultimately he went even higher than that. So it
does show you that exposing such problems, Mr. Chairman, may
not get you into trouble, it may help you.
Mr. Chairman, I must tell you, you and I have shared the
concern that in the national capital region that you and I both
share as Members of Congress, we have shared the outrage that
there has been a 40 percent cut in funds to this region, and
would you believe, to New York City, so that when you read of
homeland security contracts and the overruns that have come out
in the report and the no-bid contracts that have continued, and
you live where Al Qaeda has most targeted, your outrage is very
special.
I have only one question, and I asked whether this question
has been answered, and I am told it hasn't been answered. It is
really about perhaps one reason that at least the airport
screeners contract cost so much more than it should have. That
is something of interest to me also in my role on the Aviation
Subcommittee. I am also with the chairman on the Homeland
Security Committee as well. So it is very painful to see this
waste in contracts.
I understand this may be a question for Mr. Gunderson, I am
not certain. But I would like to know why, and the testing that
was done was not done at the assessment centers, at Pearson's
assessment centers, but apparently at hotels, some of them
luxury hotels. Individuals at expensive hotels in cities like
New York, where these were tested, cost the taxpayers, who are
responsible for a good deal of the cost to the taxpayers, I
understand that in New York City, TSA spent $14,000 for each
person hired. That sounds pretty high.
But I am truly interested in this testing, and whether or
not TSA decided, or why this testing was done in hotels instead
of an assessment center, why it was done in hotels where you
had to rent the space, to test this equipment.
Mr. Gunderson. Yes, I will address that. It fundamentally
starts with the requirements. When the contract was awarded,
the estimated value was just over $100 million. It was premised
on the use of the Pearson recruiting model for assessing them
and the other various aspects before you hire a screener, which
was a decentralized process, meaning that the screeners would
have to show up at wherever Pearson had established a center,
they would be sent off to get whatever medical testing was
required, and the other aspects.
There was a decision made shortly after the contract award
that determined that the best way to do the recruiting was to
use a different model, which focused on getting closer to the
airports, within a couple of hours, I believe was the baseline.
That is what resulted in the changed model to end up using
hotels.
Ms. Norton. Did you ask if there was Government space that
could be used in New York City and other places to do this
testing of individuals to be screeners?
Mr. Gunderson. I am not aware.
Ms. Norton. Well, you can see my concern. I can see why
people turn to hotels generally. But when you consider what the
price, the cost of the most expensive place, the most expensive
space in a place like New York City are hospitals, if you want
to stay in a hospital or a hotel room or space to be rented in
a hotel room. Thank you very much, Mr. Chairman.
Chairman Tom Davis. Thank you all very much.
Mr. Van Hollen, do you want to ask some questions?
Mr. Van Hollen. Thank you, Mr. Chairman.
I apologize for missing the testimony. I was next door at
another hearing, in another committee. But I did want to thank
the chairman and the ranking member and the staff for their
report on this very important issue and trying to make sure
that we don't have the kind of rampant abuse of taxpayer
dollars.
I just wanted to focus on one issue that was raised in this
report, and if I could, Mr. Zavada, I will ask you a question
regarding the TSA contract with Unisys. I understand it was a
$1 billion contract to upgrade computer networks at various
airports.
If you could just give us a sense of your assessment of how
quickly money is being spent on this particular contract. There
is apparently an issue on the payout schedule.
Mr. Zavada. Yes. I don't remember the exact numbers. But
when we conducted our review, we found that much of the money
that was on the contract was spent far in advance of the
schedule. I think a lot of that was attributed to this issue of
changing requirements. This was at a point when TSA had a very
limited procurement operation. The combination of the changing
requirements with the lack of oversight resulted in the high
costs.
Mr. Van Hollen. Well, let me ask you about that question of
changing requirements, or whether there was sort of an
understanding up front that there were going to be changes and
a failure to anticipate the costs associated with those
changes. Because as I understand it, and I want to know if this
is true, TSA officials estimated the contract costs would reach
$3 billion to $5 billion, but decided to set an artificial
contract ceiling at $1 billion, despite expectation that it
would be much higher.
Mr. Zavada. What we said in our report was that at the
billion dollar amount, we could not identify specific
requirements that were attributed to that number.
Mr. Van Hollen. Well, let me just make sure I understand
that. Did you find that there was a belief or understanding
that in fact the costs would be higher than $1 billion, or did
you not find that?
Mr. Zavada. My recollection from the report is that the
ceiling on the contract was constrained, I think, by the
budget.
Mr. Van Hollen. Well, let me ask you this. As I understand
it, there was a former chief information officer at TSA who
said that he was instructed by senior administration officials
to cite the $1 billion cost figure to Congress and that they
``pulled a number out of the air'' that would ``be more
palatable.'' Was that part of your finding?
Mr. Zavada. Well, again, what I will say is that we could
not identify specific requirements attributable to that billion
dollar amount. So it was suspect in our mind.
Mr. Van Hollen. Well, there is a reference that it would be
more palatable. So that raises a question, more palatable
compared to what. And the implication is more palatable
compared to the higher number that everybody agreed would be
more reasonable. You didn't find as part of your determination
that there was a belief that it would be higher?
Mr. Zavada. I believe we said in our report that some TSA
officials did tell us that it might be between $3 billion and
$5 billion in total. I believe that is in our report.
Mr. Van Hollen. And despite that assessment that they had
at the time, Congress was told that it would be $1 billion, is
that right?
Mr. Zavada. I don't know what was communicated to Congress.
Mr. Van Hollen. You don't know what the figure provided to
Congress for the cost? Because my understanding is that
Congress was told that it would be $1 billion. Does anyone have
any knowledge of that at the table here?
Ms. Duke. I don't know if it was communicated to Congress,
but that was the ceiling on the contract. So that was the
maximum amount we could award under the Unisys contract.
Mr. Van Hollen. I am just interested in a response. Here we
have a situation where internally, according to testimony of
people who were there, there was an understanding that the cost
of this contract would be between up to $3 billion to $5
billion. And yet a ceiling on the contract was set at $1
billion. It just seems to be a case of obvious effort to
mislead people with respect to what the true costs were. I am
just interested in a response. I don't know who was involved.
Mr. Gunderson. I wasn't there in the summer of 2002. I
joined TSA in December 2002. But my understanding from a
requirements standpoint, when TSA was trying to assess what is
that what I called the realm of IT requirements, they were
having a difficult job trying to get their hands around that.
Ultimately, there was a decision made that OK, we know that
we are going to have this billion dollar need, and that is what
we are going to move forward with. Whether there might have
been something else beyond that, there may have been. But the
decision was to award a contract that was able to be kind of
geared toward the billion dollar ceiling.
Mr. Van Hollen. Let me ask you this. Is the job going to
get done for $1 billion?
Mr. Gunderson. In some of the other contracts we have had,
as TSA's mission evolved, the requirements changed. So what may
have set out to be done at $1 billion, other things came in and
took different priorities.
Mr. Van Hollen. Were you personally involved in this whole
decision?
Mr. Gunderson. No.
Mr. Van Hollen. Because what you are saying really
contradicts what I understand the record found. You are saying
that it was $1 billion, you set it and then there were changes
that you discovered later on that caused this cost overrun. The
testimony in the findings as I understand it, from the IG, are
very different. It is that there was an understanding up front
that this was going to cost more than $1 billion, and yet a
contract ceiling was put on for $1 billion, knowing full well
that wasn't going to be the case.
Do you have information to suggest that is not what
happened? Do you agree with the assessment that there were
people inside the Department of Homeland Security who knew full
well that the costs were going to be more than $1 billion at
the time they set a contract cap of $1 billion?
Mr. Gunderson. What was written in the IG report is what I
know with respect to a number larger than $1 billion. I don't
know of anything in my discussions at TSA that support the
larger number.
Mr. Van Hollen. All right. Well, thank you. Thank you, Mr.
Chairman.
Chairman Tom Davis. Thank you very much. Just a couple
wrap-ups and I will let you go.
Ms. Duke, let me just ask you, who has contractual
authority within the Department of Homeland Security? As the
Chief Procurement Officer, do you have any warrants yourself,
or do you just kind of oversee policy?
Ms. Duke. I do not have a warrant. I oversee policy and I
also directly supervise one of the eight contracting shops.
Chairman Tom Davis. Does the CIO have any contracting
authority?
Ms. Duke. No.
Chairman Tom Davis. He has no warrants, either?
Ms. Duke. Correct.
Chairman Tom Davis. Now, if someone has a product that they
think they should sell, is it appropriate for them to talk to
the CIO, or to you, to say, what are the needs of the
Department?
Ms. Duke. Yes, either.
Chairman Tom Davis. And you don't consider that selling to
the Government, that is more of an information type of meeting?
Ms. Duke. Yes.
Chairman Tom Davis. If they actually want to sell it, they
would have to talk to a procurement officer, isn't that
correct?
Ms. Duke. Yes.
Chairman Tom Davis. OK. There is a lot of misunderstanding
about what you do. But you are kind of the policy shop at this
point. A real problem comes down a couple tiers where you get
to the people who are contracting who, you tell us you don't
have enough people, they need appropriate training. Do you have
enough tools? Do you need more tools for contracting, like more
share on savings contracts, more fixed price vehicles? Give us
any thought on the vehicles that you have available for
contracting.
Ms. Duke. Share in savings or that type of methodology is
something we are looking at where, because of some new mission
requirements we don't have the up-front capital to deploy
technology. So we are looking internally at how we could
possibly do a share in savings type.
Chairman Tom Davis. That limits your downside, doesn't it?
Ms. Duke. It does. But it is the standard argument of
whether it is more expensive to do a lease-utility type of
arrangement. But we are looking at that in the preparation of
the fiscal year 2008 budget submission.
Chairman Tom Davis. Mr. Zavada, two of the contracts
highlighted in our staff report were managed by TSA. Congress
has exempted TSA from the competitive acquisition laws. Do you
think that TSA's exemption helped or hurt its ability to award
and manage the contracts for airport screeners and information
technology infrastructure?
Mr. Zavada. From my perspective, it seemed that the
problems were so fundamental in terms of shifting requirements
and lack of oversight that they might not have been related to
the differing authority.
Chairman Tom Davis. OK. What does that mean? [Laughter.]
Mr. Zavada. I guess what I am saying is that in those two
contracts, the pattern was similar. They had changing
requirements, they had a lack of oversight. They were both at a
time when TSA had just begun their operations and they were
doing things on a very accelerated time table.
Chairman Tom Davis. Thank you.
Mr. Ely, let me just ask you, how is U.S. VISIT coming?
That is the largest procurement, I think, from this Department,
one that had some controversy in the House. How is that coming
together? How is the oversight of that? How are contractors
performing? How is the schedule? Can you give me a brief
overview? Or if you can't, I will ask Ms. Duke.
Mr. Ely. Yes, this is more her area, sir.
Chairman Tom Davis. That is a higher level, what you are
kicking it up to.
Ms. Duke. There was a recent report on U.S. VISIT in terms
of contract management. It was rated as the contracts that DHS
is administering itself are going actually well. Only about
half of those are done by DHS and there are some done by other
agencies.
The main criticism has been whether it is an effective
program. We are dealing with U.S. VISIT in terms of new
credentialing programming office and trying to deal with it
that way. But there have been questions about the effectiveness
of the program.
Chairman Tom Davis. The reason I ask is, you mentioned the
GAO released a report stating that the Department's management
and oversight of U.S. VISIT related contracts are not yet at
the level they need to adequately ensure success. We have a lot
of the top contractors in the country working on this who have
a lot of innovative--you have to rein them in and direct them.
So often when these things go south it is the fact that we are
not on top of them. I can't emphasize enough how important it
is that this contract work and that we bring this in. Can you
assure us we are doing everything we can to oversee this, at
least from your Department?
Ms. Duke. Yes.
Chairman Tom Davis. I think that is all I have. Anyone
else? Mr. Van Hollen.
Mr. Van Hollen. Mr. Chairman, just a couple of things.
First of all, I want to say to Ms. Duke, welcome. I know you
are relatively new to the Department and I wish you all the
best.
Chairman Tom Davis. She is a career employee, too, so they
sent her up here today.
Mr. Van Hollen. Yes, I know, and I wish you all the best as
you try and clean up a lot of the mess that we have been
talking about today. I hope all of us can work together to make
sure that we address the serious problems that have come to
light.
Just for the record, Mr. Chairman, with respect to the
Unisys airport contract I was talking about, I would like to
just point out that in the Office of Inspector General's report
that was issued in February, they said, ``Several TSA officials
said they never expected to complete all of the contract
objectives within the original contract ceiling and originally
estimated the contract could cost between $3 billion to $5
billion, but set the contract ceiling at $1 billion.'' And in a
Washington Post article dated October 23, 2005, Patrick
Schambach, who is the former chief information officer at TSA
who managed the project, said that it was just a guess and that
Government officials who spoke at a background briefing said
that they knew at the time that the project would cost closer
to $3 billion, but used the $1 billion figure because it would
be more palatable to Congress. Schambach said senior
Transportation Department officials told him to cite the $1
billion figure.
It is just outrageous, actually, that people would be
trying to game Congress and trying to game the American people
by providing a number to the Congress that they know at the
time they submit it is wrong. We have unfortunately seen this
in other legislation and we don't need to talk about the
prescription drug bill and the changing estimates, one known at
the administration at the time to be much higher in terms of
cost to the American people than the number that was provided
to Congress.
But this kind of thing has to end, and I hope, Ms. Duke, on
your watch it will certainly end with respect to procurement
issues at the Department of Homeland Security.
Thank you, Mr. Chairman.
Chairman Tom Davis. Would you like to add anything?
Ms. Duke. I am committed to working honestly and openly
with this committee and Congress. I thank you for that
opportunity.
Chairman Tom Davis. Thank you very much. We will dismiss
this panel and take a 2-minute break and get our next panel.
Thank you.
[Recess.]
Chairman Tom Davis. The meeting will come to order.
We have our second witness up today, no stranger to this
committee, Clark Kent Ervin. He is the director of the Homeland
Security Initiative at the Aspen Institute. We very much
appreciate your being here today. Of course, you have had prior
work at Homeland Security to this.
It is our policy that we swear you in. If you would rise
and raise your right hand.
[Witness sworn.]
Chairman Tom Davis. Thank you very much.
We expect a vote momentarily, but why don't you go ahead,
get your statement in and try to get through as quickly as we
can. Thank you for your patience in being here today.
STATEMENT OF CLARK KENT ERVIN, DIRECTOR, HOMELAND SECURITY
INITIATIVE, THE ASPEN INSTITUTE
Mr. Ervin. It is my pleasure, Mr. Chairman, and thank you
very much, and ranking member all the members of the committee,
very much for having me. Thank you for holding this hearing on
a very important topic, needless to say.
Though the Department is only 3 years old, it has already
firmly established a reputation, needless to say, as one of the
more dysfunctional agencies in Government. This is especially
true in the area of procurement. This is not just a matter of
wasting precious taxpayer dollars, as bad as that is,
especially at a time of tight budgetary circumstances, it also
constitutes a gap in our security that terrorists can exploit
to kill Americans and harm our economy. Because every dollar
wasted on a flawed contract or flawed contracting process is a
dollar that could have been spent to make our Nation more
secure.
If that is the bad news, the good news is that lessons can
be learned from the last 3 years. These lessons translate into
several common sensical principles, as follows.
First, the lesson to take away from FEMA's disastrous
performance during Katrina and from TSA's $19 million contract
to set up an elaborate operations center is that all contracts
should be competed, even when the dollar amount is under the
legal threshold, to ensure that the best possible value is
obtained for the American people. In the past, emergencies have
been used to justify no-bid contracts. But emergencies,
especially at a Department of Homeland Security, should be
anticipated and planned for in advance by putting in place
competitively bid contingency contracts, so that the Department
is not forced to do in extremis what it would not willingly do
under normal circumstances.
Second, one lesson to take away from the Boeing Company's
$1.2 billion contract to install and maintain explosive
detection systems at airports is that under no circumstances
should the Department allow contracts to become de facto
illegal cost plus percentage of cost contracts. Such contracts
are illegal for a good reason: because the higher the
contract's cost, the greater the contractor's profit. There is
no incentive for contractors to economize, and every incentive
for them to overcharge.
Third, another lesson to take away from that particular
contract is that when the bulk of the work under a contract is
to be done not by the prime contractor but by subcontractors,
the Department should save money by cutting out the middleman
and contracting directly with the subcontractors.
Fourth, the lesson to take away from the $1 billion Unisys
contract, which we have talked about, and also the $2 billion
Secure Border Initiative contract, is that under no
circumstances should a contractor be allowed to define contract
requirements. If we leave it up to contractors to determine
what Government agencies need, chances are high that
contractors will decide that the agencies need more expensive
things than they actually do.
Fifth, under no circumstances should contractors in the
business of providing the very goods and services at issue
oversee the work of fellow contractors.
Sixth, one of the lessons to take away from the contract to
provide limousine services to DHS personnel that has been
linked to the Duke Cunningham congressional bribery case is
that background checks should be required not only on those of
the contractor's employees who are to provide services under
the contract, but also on the contractor's officers, directors
and major shareholders.
Seventh and finally, penalties should be built in contracts
for failure to perform, tardiness, bonuses, performance awards
and other incentives should be paid only when earned.
In addition to the foregoing, the number of procurement
officers in the Department should be significantly higher than
it presently is. It is not just a question of throwing more
bodies at the problem. The people hired should have years of
Government contracting experience. Otherwise, there will simply
be more DHS procurement officials for more experienced private
sector procurement experts to take advantage of.
Further, part of the problem with procurement is that the
Department's Chief Procurement Officer does not have the
authority that her title implies. The CPO, as we just heard,
lacks presently and should be given the power to hire, fire,
and otherwise direct the work of the component procurement
heads. Otherwise, components will continue to make discrete
purchases that are not in the overall interest of the
Department.
I will submit the rest of my statement for the record, Mr.
Chairman, and will be happy to take your questions. Again,
thank you very much.
[The prepared statement of Mr. Ervin follows:]
[GRAPHIC] [TIFF OMITTED] T9933.071
[GRAPHIC] [TIFF OMITTED] T9933.072
Chairman Tom Davis. I will just say, I think your testimony
speaks for itself. I think you have given us some very good
suggestions.
Mr. Waxman.
Mr. Waxman. Thank you, Mr. Chairman. I also agree with the
chairman. I think you have given us very specific, important
suggestions for improving the way contracts are handled.
You have been the Inspector General for DHS. You have
examined several of the most problematic Homeland Security
contracts. I want your frank insights as to what went wrong and
how we can fix it, so that future contracts increase our
security and protect the taxpayer.
I asked the previous panel about contracts for border
security. They had this contract called ISIS. Over $400 million
was spent on thousands of cameras and sensors to monitor our
borders, and then these cameras malfunctioned. If the weather
was bad, it didn't work at all. And it only covered 5 percent
of the border.
So they realized that is not going to protect our border.
Now DHS, after botching this one, is trying to develop another
contract. But they didn't seem to learn their lessons. Instead,
they have this vague proposal, request for proposals, with
words like, we want something that is highly reliable,
available, maintainable, cost effective, to manage, control and
secure the border using the optimal mix of proven, current and
next generation technology, infrastructure, personnel response
capabilities and processes.
Now, that sounds good, but it is so vague. Does this
adequately define technical or cost requirements? Aren't they
just making the same mistake over and over again?
Mr. Ervin. You are absolutely right, Mr. Waxman. Einstein
defined insanity as doing the same thing over and over again
and expecting a different result. In fact, it is not just ISIS.
Before ISIS, or rather, before the Secure Border Initiative,
right after ISIS, there was the American Shield Initiative that
was intended to do the very same thing, a combination of more
border patrol agents and greater use of technology.
So essentially, we have the same thing with the Secure
Border Initiative, but arguably it is worse in this instance,
because as you say, of the vagaries of the contract mechanism
let here. Under no circumstances, as I say, it seems to me,
should any department, especially the Department of Homeland
Security, leave it up to contractors to define exactly what it
is the Department should obtain, because needless to say, it is
pretty clear that the contractors are going to decide that the
Department needs more expensive technology than it actually
does. It is highly questionable whether in the end the
technology will actually work.
Mr. Waxman. Well, it is really amazing to me. The
Republicans are saying, we have to do something to protect our
borders, we have all these people coming to the borders, it is
an open border, in effect, even terrorists can get through. But
certainly millions of illegals are getting through.
So they are going around the country holding hearings on
this problem. Some of them have suggested already they passed
the bill before they had the hearings. We ought to build this
huge fence. Now, can you imagine what it would be like if they
follow these kinds of procedures? They are going to say to
contractors, give us a contract, we will spend whatever
billions it takes to build a fence? Do you think that is a
clear enough idea of how to protect the borders?
Mr. Ervin. Absolutely not. It is the job of Government to
decide how to execute policy. If the policy judgment has been
made that we need to secure our border, and certainly, we do
need to secure our border, and I support that policy judgment,
needless to say, then it is up to the Government to determine
exactly how that should be done, and then to define contract
requirements for contractors to follow, not the other way
around.
Mr. Waxman. Well, I want to commend you for your work as
Inspector General, your testimony to us today. I hope this
hearing will serve as a wakeup call for the administration.
This utter incompetence has to stop. Americans deserve better
than more of the same, and we need to head in a new direction.
I yield back. Thank you.
Chairman Tom Davis. Thank you.
Mr. Cummings.
Mr. Cummings. Just very briefly. I too agree that you have
done a great job here.
But I am just wondering, is this basically incompetence? Is
it a lack of--it seems like it is deja vu all over again. I am
just trying to figure out, is it that we are hiring the wrong
people? Is it structural? In other words, the structure of the
process. Is it a systemic process?
I just want to get down to the nitty-gritty of it, the
bottom line.
Mr. Ervin. I think that is a key question, Mr. Cummings. I
guess I would start by saying that all of these problems that
we are talking about here today were anticipated at the very
beginning. I wrote a memo, or attempted to write a memo, to the
then-Secretary, Secretary Ridge and to the Deputy Secretary,
Gordon England, on March 18, 2003, which was less than a month
after the Department was officially established. In that memo,
I said, two areas that DHS needs to get control of early to
minimize waste and abuse are the procurement and grant
management functions, getting the right leadership and systems
in place for both functions should be made a high priority.
Early attention to strong systems and controls for acquisition
and related businesses processes will be critical to ensuring
success and maintaining integrity and accountability.
I subsequently found out that this memo actually did not
make it to the Secretary and the Deputy Secretary because it
was held up in the clearance process, even though Inspector
General memos are not to be held up, uniquely, unlike any other
communication from any other official in the Department, by, of
all people, the Under Secretary for Management. Her rationale,
I subsequently learned, for having done that, was that she knew
that the controls I was recommending were not in place and she
didn't want the Secretary to know that.
So the seeds of all this were laid at the beginning. To
answer your question directly, I think it is a combination of
things. First of all, incompetence, as you say. Two, I think
under-funding. And I say that as a conservative Republican who
typically does not call for greater Government spending. But
you can't do anything on the cheap, and you certainly can't do
homeland security on the cheap. And a key part of homeland
security is procurement. There were too few, at the beginning,
there were too few and there remain too few procurement
professionals. As I say, it is not just a question of numbers,
but we need people who are also experienced and expert in this
area.
Finally, I would say it is a question of accountability.
There are no consequences when on a repeated basis these kinds
of things happen. One of the questions in the earlier round was
whether there had been any penalties meted out against the
companies that failed to perform in these instances. We heard
in prior testimony that at least one of these companies
continues to perform contracts for the Department.
And by the way, finally, I would say, people in the
Department of Homeland Security who oversaw these functions
subsequently go on to the private sector to some of the very
companies that have taken advantage of the Department.
So unless and until we get to these root problems, this
kind of thing will happen again and again.
Mr. Cummings. Mr. Chairman, I will submit some written
questions.
[The prepared statement of Hon. Elijah E. Cummings
follows:]
[GRAPHIC] [TIFF OMITTED] T9933.073
[GRAPHIC] [TIFF OMITTED] T9933.074
Chairman Tom Davis. Thank you very much.
Mr. Van Hollen.
Mr. Van Hollen. In light of the time, I will be very brief
as well. I want to thank you for your testimony. I think it is
particularly valuable, because as others have said, you have
some very specific recommendations in here that I would hope on
a bipartisan basis we could implement as soon as possible.
Your last remark suggested that if maybe the memo had
gotten to the top, maybe someone would have done something
about it. I do believe leadership starts at the top. I do know
elsewhere you have said that in fact you were able to at least
have a conversation with Secretary Ridge about this, and sort
of the response you got at the time was, why are you always
being so critical. Well, if your early warning had been heard
then, we might be in a better position today.
Can you just briefly, that was the response you got from
the very top leadership, what are you so worried about, why are
you always carping about this. Can you just respond to that?
Mr. Ervin. That unfortunately is an attitude that I found
time and again at the Department of Homeland Security. Rather
than seeing these kinds of recommendations as being helpful and
as the kind of thing that if put in place could reflect well on
the Department, on the administration, instead, as you suggest,
all too often it was taken the wrong way.
But the good news, as I say, is that it is not too late. We
can prevent these kinds of abuses from going forward in the
future if the recommendations that I am advancing today are put
in place.
Chairman Tom Davis. I was going to ask you how you got the
name Clark Kent Ervin before we started, but you have certainly
shown yourself bullet proof to some of the occurrences during
your career. [Laughter.]
Thank you. You have given us a lot of food for thought on
this. This is not a political issue, it is our job as
oversight. We appreciate you coming forward, and others, trying
to identify problems. We are trying to solve them for the
American people and solve them money. This has been very, very
helpful to us. Thank you for your patience and thank you for
your great testimony.
Thank you.
At this point, I think we have, Mr. Waxman thanks me for
asking you about the Clark Kent question. [Laughter.]
At this point, I think this has exhausted us, and I am
going to adjourn the hearing. Thank you very much.
[Whereupon, at 12:15 p.m., the subcommittee was adjourned.]
[The prepared statement of Hon. Todd Russell Platts and
additional information submitted for the hearing record
follows:]
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