[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                     THE SECURE BORDER INITIATIVE: 
                   ENSURING EFFECTIVE IMPLEMENTATION 
                 AND FINANCIAL ACCOUNTABILITY OF SBINET 

=======================================================================

                                HEARING

                               before the

                      SUBCOMMITTEE ON MANAGEMENT,
                       INTEGRATION, AND OVERSIGHT

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           NOVEMBER 15, 2006

                               __________

                           Serial No. 109-108

                               __________

       Printed for the use of the Committee on Homeland Security
                                     
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                     COMMITTEE ON HOMELAND SECURITY



                   Peter T. King, New York, Chairman

Don Young, Alaska                    Bennie G. Thompson, Mississippi
Lamar S. Smith, Texas                Loretta Sanchez, California
Curt Weldon, Pennsylvania            Edward J. Markey, Massachusetts
Christopher Shays, Connecticut       Norman D. Dicks, Washington
John Linder, Georgia                 Jane Harman, California
Mark E. Souder, Indiana              Peter A. DeFazio, Oregon
Tom Davis, Virginia                  Nita M. Lowey, New York
Daniel E. Lungren, California        Eleanor Holmes Norton, District of 
Jim Gibbons, Nevada                  Columbia
Rob Simmons, Connecticut             Zoe Lofgren, California
Mike Rogers, Alabama                 Sheila Jackson-Lee, Texas
Stevan Pearce, New Mexico            Bill Pascrell, Jr., New Jersey
Katherine Harris, Florida            Donna M. Christensen, U.S. Virgin 
Bobby Jindal, Louisiana              Islands
Dave G. Reichert, Washington         Bob Etheridge, North Carolina
Michael McCaul, Texas                James R. Langevin, Rhode Island
Charlie Dent, Pennsylvania           Kendrick B. Meek, Florida
Ginny Brown-Waite, Florida

                                 ______

         Subcommittee on Management, Integration, and Oversight



                     Mike Rogers, Alabama, Chairman

John Linder, Georgia                 Kendrick B. Meek, Florida
Mark E. Souder, Indiana              Edward J. Markey, Massachusetts
Tom Davis, Virginia                  Zoe Lofgren, California
Katherine Harris, Florida            Sheila Jackson-Lee, Texas
Dave G. Reichert, Washington         Bill Pascrell, Jr., New Jersey
Michael McCaul, Texas                Bennie G. Thompson, Mississippi 
Peter T. King, New York (Ex          (Ex Officio)
Officio)
















                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable Mike Rogers, a Representative in Congress From the 
  State of Alabama, and Chairman, Subcommittee on Management, 
  Integration, and Oversight.....................................     1
The Honorable Kendrick Meek, a Representative in Congress From 
  the State of Florida, and Ranking Member, Subcommittee on 
  Management, Integration, and Oversight.........................     2
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security..............................................     3
The Honorable Mark E. Souder, a Representative in Congress From 
  the State of Indiana...........................................    30

                               Witnesses
                                Panel I

Ms. Elaine Duke, Chief Procurement Officer, U.S. Department of 
  Homeland Security:
  Oral Statement.................................................    14
  Prepared Statement.............................................    16
The Honorable Richard L. Skinner, Inspector General, U.S. 
  Department of Homeland Security:
  Oral Statement.................................................    19
  prepared Statement.............................................    21
Mr. Gregory L. Giddens, Director, Secure Border Initiative 
  Program, U.S. Department of Homeland Security:
  Oral Statement.................................................     4
  Prepared Statement.............................................     7
Ms. Deborah J. Spero, Deputy Commissioner, Customs and Border 
  Protection, U.S. Department of Homeland Security:
  Oral Statement.................................................     7
  Prepared Statement.............................................    13

                                Panel II

Mr. Jerry W. McElwee, Vice President SBInet, Boeing Advanced 
  Systems:
  Oral Statement.................................................    40
  Prepared Statement.............................................    41
Mr. Tom Miiller, General Counsel, L-3 Services Group:
  Oral Statement.................................................    46
  Prepared Statement.............................................    48
Mr. Brian Seagrave, Vice President for Border Security, Unisys:
  Oral Statement.................................................    43
  Prepared Statement.............................................    45

 
                     THE SECURE BORDER INITIATIVE:


 
   ENSURING EFFECTIVE IMPLEMENTATION AND FINANCIAL ACCOUNTABILITY OF 
                                 SBINET

                              ----------                              


                      Wednesday, November 15, 2006

                     U.S. House of Representatives,
                    Committee on Homeland Security,
                                Subcommittee on Management,
                                Integration, and Oversight,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 3:05 p.m., in 
Room 311, Cannon House Office Building, Hon. Mike Rogers 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Rogers, Souder, Meek and Thompson 
(ex officio).
    Mr. Rogers. I would like to call this meeting to order. 
This is going to be the Committee on Homeland Security, 
Subcommittee on Management, Integration, and Oversight, and 
today we are holding a hearing on technology contracts under 
the Secure Border Initiative, referred to as SBInet.
    First I would like to take a moment to welcome all of our 
panelists here. I told them a little earlier it is like old 
friends, wink, wink. We are seeing regular leadership people 
here today. They have been before this Committee many times, 
and we are happy to have you back talking about this very 
important initiative.
    This hearing will review the new multiyear, multibillion-
dollar contract which the Department of Homeland Security 
announced in September to help secure the northern and southern 
borders of the United States.
    The hearing builds on three previous hearings we held on 
the mismanagement of the existing border technology program 
known as the Integrated Surveillance Intelligence System, or 
ISIS. At our first hearing in June of last year, the Deputy 
Inspector General for the General Services Administration 
testified that ISIS was, quote, a major project gone awry and, 
quote, a waste of taxpayers' dollars.
    In our December hearing, the DHS Inspector General outlined 
many contracting and operational problems with ISIS which 
wasted tax dollars and left sections of our borders without 
camera coverage. In February of this year we explored what 
disciplinary actions were taken against those Federal employees 
who mismanaged the ISIS program. Unfortunately, we learned that 
most of those employees involved received only a slap on the 
wrist, while others were simply allowed to retire or move on to 
other agencies.
    Due to these disturbing findings, I announced at that time 
we would hold a hearing shortly after the DHS--shortly after 
DHS awarded the SBInet contract, and that is why we are 
convening this hearing today.
    Today we have four objectives. First, we will hear how 
SBInet will help secure the borders and how those responsible 
for planning it will implement it. Second, we want to ensure 
that the financial and program mismanagement that occurred in 
ISIS is not repeated in SBInet. Third, we also want to ensure 
that the operational problems of ISIS are fixed by SBInet. And 
fourth, we want assurances by both the government officials and 
company representatives that their employees involved in this 
program will be held fully accountable.
    To further ensure that SBInet is properly managed, Ranking 
Member Thompson, Ranking Member Meek, and I introduced the 
Secure Border Initiative Financial Accountability Act of 2006. 
Last month the full House passed our bill, which requires the 
Inspector General to review contracts over $2 million and 
identify any problems. A similar provision was included in the 
DHS appropriations bill that was signed into law.
    ISIS has been a poster child for government waste and 
mismanagement. Today I want to put the Department on notice I 
intend to work with the Members of this Committee and hold the 
Department's feet to the fire to ensure that the mistakes of 
the past are not repeated in SBInet.
    Also, as the Ranking Member assumes the gavel in the next 
Congress, I look forward to continuing our bipartisan working 
relationship to improve the operations of DHS while 
safeguarding taxpayer dollars.
    Mr. Rogers. And now I would like to yield to my friend and 
colleague, the Ranking Member, Mr. Meek of Florida.
    Mr. Meek. Thank you, Mr. Chairman. I can tell you that we--
it seems like deja vu all over again with a couple of new 
faces, but we are glad you are here today to testify before 
this committee, and I want to thank you, Mr. Chairman, for your 
leadership in continuing to focus on this issue. This is very, 
very important.
    I believe that counterparts in the Department and the 
different oversight agencies that are paying attention to the 
financial dealings of the Department of Homeland Security holds 
the same spirit as we do on the committee, and through our 
committee work I hope that message is going throughout the 
Department that we are paying very close attention to it, not 
just our staffs, but Members of Congress and definitely members 
of this subcommittee.
    I can also share with you that this hearing today, 
especially the topic that we are going to discuss, once again 
has been studied a great deal by this subcommittee. SBInet is 
the Department's third try at putting technology on border--I 
mean, on border protection to get 24-hour, 7-days-a-week, 365-
days-a-year surveillance between port entries.
    Today we have--we have this third hearing to continue to 
follow step by step with the Department and also with those 
that have not only an investigative eye on the Department, but 
also as it relates to putting the standards towards 
accountability, and we want to hear your observations to date.
    I know that we have--Ms. Duke, you have embedded, I 
wouldn't call them auditors, I would say individuals that are 
working along with the contract, as the contract is being 
executed. And I think it is also important for everyone to know 
that I, and I know many members of the subcommittee and full 
committee, still have questions that are yet unanswered about 
overall accountability.
    I think that we have really a short time to continue to 
have the trust and confidence with the American people as it 
relates to any program similar to SBInet because of the past. 
Secretary Chertoff was here before this committee before we 
left on break, the full committee, assured us that he is paying 
very close attention to what is happening, and that he assured 
the committee that we wouldn't--would not see some of the 
mistakes of the past.
    This hearing today, and I am glad that the Chairman called 
it in the 109th Congress, will definitely be in the record of 
this committee and also will continue to keep the staff updated 
on the forward progress of our work here.
    I want to personally thank Mr. Chairman here for his 
cooperation during the 109th Congress and also the Congress 
before that. I mean, we have been working together; we are 
going to continue to work as a team. Like my grandmother says, 
as long as God preserves life, and we will continue to work 
with this Department together in a bipartisan way.
    I think in this area, as we look at national security, is 
paramount. So I know that Mr. King holds that same--and I know 
that Mr. Thompson, I don't want to speak for him, holds that 
same spirit. I think that is the reason why we have been able 
to pass a lot of legislation out of this subcommittee. And 
right before we left, we passed legislation on the floor, and I 
think that the rest of the Congress knows that when we work 
together and work in a bipartisan way, that the American people 
win, and the national security wins.
    Thank you, sir.
    Mr. Rogers. I agree and I thank you.
    Mr. Rogers. The Chair now recognizes the Ranking Member of 
the Full Committee, my friend and colleague from Mississippi, 
Mr. Thompson, for any statement he may have.
    Mr. Thompson. Thank you very much, Mr. Chairman. I look 
forward to the testimony of our witnesses here today.
    As has already been indicated, this is our third approach 
to this same problem. Hopefully, we will get it right this 
time. Boeing and Unisys have been awarded a contract to start 
with management and systems engineering of this Department. 
Some of us are a little concerned that, in essence, they would 
have to submit to the Department what they plan to do, the 
Department would have to approve, and so we still don't have 
that plan for border security.
    As you know, Congress approved a 700-mile fence, physical 
fence. Somebody in the Department needs to explain to us how 
the physical fence relates to the virtual fence and whether or 
not the plan that should have been submitted this month, which 
I understand might be coming next month, will, in fact, become 
a reality.
    So there are some things we need to work on. I look forward 
to it. I believe technology is the way to go in terms of these 
issues, but I want to make sure the technology we are promoting 
will get the job done.
    The number one and number two approaches failed primarily 
because of procurement and management and lack of oversight, 
which I also want to get some information on how do we resolve 
some of those past issues.
    The other thing, there is a goal of 40 percent small 
minority business requirement for this procurement. I want to 
know how the Department plans to monitor and make sure that 
these goals are met. It is wonderful; all of us represent areas 
where there are small businesses who report just all the time 
as to how we can get involved in this homeland security work. 
This is a wonderful opportunity, and I hope we structure some 
subcontracting plans that will allow that to occur.
    Apart from that, Mr. Chairman, it has been good working 
with you. I look forward to the 110th to continue that process. 
There is no sense in interrupting our issues that we all deem 
necessary to address on this committee.
    And I yield back the balance of my time.
    Mr. Rogers. I thank the gentleman.
    I would like to call up the first panel. Under ordinary 
protocol, we would start with Ms. Spero, but today, as many of 
you can tell, the Chamber has been remodeled, and we got some 
new gadgets in here this time. And since Greg is in charge of 
gadgets for DHS, we would like Greg to start off with a 
presentation that will utilize some of this new technology in 
here.
    So with that, I would call up Mr. Giddens. Also, I would 
remind all of the panelists if you could keep your opening 
statements to five minutes or less, you can submit your full 
written statement for the record, but that would get more time 
for us to have interaction, which is always, I think, one of 
those beneficial parts of these hearings.
    And with that, the Chair recognizes Greg Giddens.

   STATEMENT OF GREGORY L. GIDDENS, DIRECTOR, SECURE BORDER 
    INITIATIVE PROGRAM, U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Giddens. Good afternoon, and thank you, Mr. Chairman, 
Ranking Member Meek, Ranking Member Thompson. It is an honor to 
come before you to talk about SBInet. It is an urgent issue for 
the Nation, and it is one that I respectfully submit that is 
worthy of your oversight.
    I will not sit before you today and try to convince you in 
any way that this is an easy undertaking. This is a difficult 
challenge, and as you have noted, we have had attempts before 
this and have not been successful. We believe we have learned 
from those and are applying some of those lessons as we go 
forward.
    Sir, I will try to keep my comments short, and I ask 
respectfully that the written comments be entered into the 
record, and we will see if we can use some of the technology 
here in the room.
    The Department has an overall initiative to secure the 
border which tries to link in a very systematic way the efforts 
within Customs and Border Protection and Immigration and 
Customs Enforcement, CIS, the Coast Guard, intelligence in a 
really comprehensive manner that allows us to make progress on 
many fronts, and that we recognize that in order to secure the 
border, we cannot just focus on the line; we have to think 
about what is happening beyond the border as well as at the 
border and in the interior, whether that is work site 
compliance or enforcement, whether that is supporting the 
passage of some temporary worker program to release some of the 
stress between the ports of industry.
    Today we will be focusing on SBInet, which is the CBP 
program to provide the capability and capacity to allow our 
agents and officers to gain control of the border. CBP is an 
executive agent for that program, and it is really a 
comprehensive approach. While it does involve technology and 
gadgets and gizmos, that is not sort of the focus of this 
acquisition. The focus of this is to allow us to gain 
performance so we can get control of the border.
    We started, as you may remember, back in January with an 
Industry Day, and at that point charted out a course to make 
this award by September, and in September, as has already been 
noted, we did make this award to Boeing. This was a full and 
open competition that CBP undertook and went through and made 
that award in September in that full and open environment. The 
SBInet contract is a 3-year base contract with three 1-year 
options, so it makes a maximum life of 6 years.
    Now if I could, we will see if we can engage some of the 
technology on the screen. And there you go. So far so good with 
technology. That is a good start.
    What I wanted to do, the point to make on this chart is 
what is in the middle of the chart, and that is the people. 
SBInet, no matter the technology, the infrastructure, the 
process, is not going to replace the people. It is going to 
allow people, the agents, and the officers to be more effective 
in the field. And we want to surround them with the right tool 
sets from infrastructure, from sensors, communication, 
providing them real-time situational awareness, and be able 
from a command-and-control perspective to support them as they 
deploy out in the field, but all of that making a strong 
linkage to the field operators.
    In fact, when we started an at-source selection, we brought 
in people from the field from the beginning. In fact, at 
Industry Day, you may remember that Kevin Stevens, who is now 
the Deputy Chief of the Border Patrol, gave the keynote at the 
Industry Day to provide that perspective from the operators. 
And we have had them involved from the very beginning and even 
through the source selection activity to make sure that the 
decisions that we were making were well grounded and well 
founded from an operational perspective.
    The next chart is to start to walk through some of the 
solutions that are being put forth in their proposal. The first 
shows mobile systems. Boeing chose to use mobile towers so that 
they could go out and through this mobile system make sure that 
the placement of these towers were indeed where they needed to 
be. The testing that will be done in the lab, the engineering 
work that will be done in the laboratory will help get this 
correct, but without a doubt there will be some cases where we 
go to field something, and we need ability to shift that 
around, and this mobile capability will allow us to do that so 
that we can get the towers, along with their radars and their 
infrared and their electro-optical cameras, in the right place, 
and we can go out with GPS and go down and fill those in later 
with a fixed system.
    What this also does is provide a communications backbone so 
that our agents and officers in the field can stay in touch 
with their organization, with their Border Patrol stations, as 
well as their sector headquarters, as well as be 
interoperational with the State and local partners. It also 
provides an opportunity to push that situation awareness out to 
the Border Patrol agent and to the field patrol officer. And in 
some cases, we can do that on landlines, but as you can 
imagine, in some cases along the border, it is very remote, and 
we will need to use satellite and footprints from the satellite 
for that coverage.
    One of the things we are most excited about with this 
capability is to take that operational picture and to put it 
out in the hands in the people of the field so they can see 
real time the display with the camera. We will have this 
automated inview so they can see the blue force tracking and be 
able to see the picture from the camera right there in their 
hand. We think that is going to be very powerful not only from 
a performance perspective, but from a safety perspective as 
well.
    My last chart, while it looks very complicated, it is not. 
It basically uses a time dimension to look at the border. And 
what it is trying to indicate with the top line that is 
indicating the vanishing point is trying to lay out a very 
simple algorithm that our ability to respond to a border 
incursion needs to be much less than the time it takes an 
illegal alien to get to a vanishing point.
    For example, if you think that an illegal alien that may 
cross a remote area, if they make it to Tucson or Phoenix and 
get on a bus out of town, our chance at apprehension goes way 
down. We need to understand that dynamic all along the border, 
but at the same time understanding it is different along the 
border. We find out once you go out of the border, you have 
seen a mile of the border, you have seen a mile of the border. 
And we want to be very careful not to take something that works 
for one location and just apply that nondiscriminately across 
the border. We want to look at each aspect of the border and 
put the right decision in terms of the mix of infrastructure, 
technology and staffing.
    The middle of the chart has borders, barriers, and fences 
along the port of entry. If you think about a border town such 
as Nogales, the time that someone would get to that vanishing 
point is very short, so you would want to use technical 
infrastructure to slow them down and allow us to have more 
response time. This basic border calculus chart and its 
governing algorithm that we want to make sure we can respond 
well within the time it takes an illegal alien to get to that 
vanishing point is what is going to guide us in a very 
systematic, disciplined manner to lay out the solution in each 
part of the border by understanding that it will change as we 
go forward. As we go forward in secure areas, the coyotes and 
the smugglers are going to react to that, and they are going 
the use different routes and different parts, and we need to be 
able to be less bureaucratic and more nimble in our approach so 
we can be more responsive to that so we can try to predict some 
of that, so we can be ready.
    So this is certainly not a one-size-fits-all going out 
initially. The foundation of that would apply, but the 
placement and the mix of that will change to meet the 
operational needs so we can gain control of the border.
    With that, I would just like to close by saying that we do 
recognize the complexity of this. We are committing significant 
resources to manage this, and there are certain areas that we 
need to focus on. And we have appreciated the relationship that 
we have had with the Office of Inspector General and the 
recommendations that they put forth, and we are working very 
closely with them and, as we go forward, implement those as it 
relates to things such as program management structure and 
staffing as well as solidifying the requirements as we go 
forward and how we are going to measure performance so we do 
have accountability not just within the government side, but 
accountability between the government and private industry.
    And, sir, with that I would close, and I appreciate your 
indulgence if I went a little long.
    Mr. Rogers. No problem. Good job. I want to thank you for 
that.
    [The statement of Mr. Giddens follows:]

    Prepared Joint Statement of Deborah J. Spero and Gregory Giddens

Introduction
    Thank you, Mr. Chairman and Members of the Committee, for allowing 
me to appear before you today. I appreciate the opportunity to discuss 
the urgent and essential mission and management of the SBInet contract 
and how SBInet fits into the larger comprehensive Department of 
Homeland Security (DHS) strategy of securing America's borders. My 
testimony is intended to provide you with the information necessary to 
conduct your oversight role in this endeavor.

    Secure Border Initiative (SBI): The DHS Approach to Comprehensive 
Border Security
    The challenge of securing the Nation’s borders is enormous. 
Border security is a continuum that begins far beyond the borders of 
the United States and continues to the interior of our country. It must 
account for the movement of both people and goods and is not successful 
unless it protects the country from harm while allowing lawful trade 
and immigration. Border security requires a critical blend of tangible 
resources, such as personnel, technology, and infrastructure, along 
with intangible items, such as useful intelligence and strong 
partnerships with foreign governments.
    As you well know, securing the borders of the United States is a 
Presidential priority. In his May 15, 2006 Address to the Nation, 
President Bush said: ``First, the United States must secure its 
borders. This is a basic responsibility of a sovereign nation. It is 
also an urgent requirement of our national security. Our objective is 
straightforward: The border should be open to trade and lawful 
immigration--and shut to illegal immigrants, as well as criminals, drug 
dealers, and terrorists. . . .We are launching the most technologically 
advanced border security initiative in American history. We will 
construct high-tech fences in urban corridors, and build new patrol 
roads and barriers in rural areas. We will employ motion sensors, 
infrared cameras, and unmanned aerial vehicles to prevent illegal 
crossings. America has the best technology in the world, and we will 
ensure that the Border Patrol has the technology they need to do their 
job and secure our border.”
    The Secure Border Initiative (SBI) is the DHS approach to lead our 
efforts against cross-border and international activities that threaten 
border security. This approach recognizes that the border is not merely 
a physical frontier. Securing it effectively requires attention to 
processes that begin far outside our borders, occur at the border, and 
continue within all regions of the United States. SBI will integrate 
and unify the systems, programs, and policies needed to secure the 
border and enforce our customs and immigration laws. It is a national 
effort to transform the border security continuum with the objective to 
disrupt, dismantle, and deter all cross-border crime and balance 
legitimate travel and trade into and out of the United States.
    While SBI is a Department-wide priority and entity, my testimony 
today will only discuss the U.S. Customs and Border Protection's role 
and the SBI.net program.

CBP Overview
    U.S. Customs and Border Protection (CBP) is the executive agent for 
the contracting and implementation of SBInet. CBP acts as the guardian 
of our Nation's borders, safeguarding the homeland against the entry of 
terrorists and the instruments of terrorism and enforcing the laws of 
the United States while fostering the Nation's economic security 
through lawful travel and trade. Within CBP's larger mission, the 
Border Patrol's time-honored duty of interdicting illegal aliens and 
drugs and those who attempt to smuggle them across our borders between 
the ports of entry remains a priority. The nexus between this 
traditional role and our post-September 11th mission is clear: 
terrorists and violent criminals may exploit smuggling routes used by 
migrants to enter the United States illegally and do us harm. Reducing 
illegal entries across our borders is now more than ever a matter of 
national security.
    To secure operational control of our borders, President Bush 
announced a plan to increase the number of Border Patrol Agents by 
6,000 by the end of 2008. We are grateful that the 2006 Supplemental 
and 2007 DHS Appropriations have provided 2,500 agents as part of this 
plan. This plan, when completed, will bring the total number of Border 
Patrol Agents to over 18,000, doubling the number of agents since the 
President took office in 2001. These additional agents will serve as a 
tremendous resource in combating border violence and the organizations 
that prey on innocent people on both sides of the border.
    There is no stretch of border in the United States that can be 
considered completely inaccessible or lacking in the potential to 
provide an entry point for a terrorist or terrorist weapon. Stretches 
of border that in the past were thought to be impenetrable, or at least 
highly unlikely locations for entry into the United States, have in 
recent years become active illegal entry corridors as other routes have 
been made less accessible to smugglers. This vulnerability in the 
Nation’s borders must be accounted for when determining future 
infrastructure requirements.

SBInet Acquisition Overview
    As part of the comprehensive DHS solution for border security, CBP 
will use the SBInet contract to acquire, deploy, and sustain the 
technology and tactical infrastructure necessary to achieve control at 
and between ports of entry. The SBInet Program incorporates acquisition 
best practices and lessons learned from previous border technology 
procurements to provide the most cost and operationally effective 
solution for securing the border. CBP selected an indefinite delivery, 
indefinite quantity (IDIQ) contract vehicle because the vastly 
different terrain, threats, and evolving nature of the operational 
environment require a solution that is flexible, adaptable, and 
tailored to specific needs.
    The SBInet acquisition was conducted using full and open 
competition and resulted in a performance-based IDIQ contract. Several 
large businesses participated in the competition, submitting proposals 
that detailed the partnering relationships they intended to utilize to 
meet the Government’s program objectives and that provided 
solutions to securing the borders. The award of the SBInet contract to 
Boeing was announced on September 21, 2006.
    The SBInet contract has a base period of three years and three one-
year option periods for a total of six years. The Government's minimum 
obligation under the contract is $2 million over the term of the 
contract. The Government's maximum obligation is the full panoply of 
supplies and services necessary to provide 6,000 miles of secure 
border. The supplies and services required for this integration effort 
are, for the most part, commercially available. Major components 
consist of integration services, sensors, communication technologies 
and equipment, command and control systems and subsystems, and 
infrastructure and response capabilities.
    The SBInet contract supports different contractual agreements due 
to the wide range of tasks to be performed. This allows DHS to 
structure the acquisition into discrete, workable phases, implemented 
through task and delivery orders, without committing the Government to 
acquire additional capability from the SBInet integration contractor. 
This approach will provide the greatest amount of flexibility to 
respond to ever-changing conditions and provide the best protection for 
the Government.
    Further, the SBInet contract allows DHS to use other contract 
vehicles for the goods and services required for the SBInet Program. 
Thus, the Government reserves the right to compete some SBInet 
requirements through the use of other contract vehicles or methods when 
it is in the best interest of the Government. This includes the right 
to use other DHS contracts or Government-wide acquisition contracts, as 
appropriate. All such requirements will be carefully reviewed for small 
business set-aside potential.
Accountability
    Drawing from previous experience, CBP used the IDIQ contract 
structure to select the company that offered the best overall strategy 
and value to the Government for SBInet while allowing direct government 
oversight and decision-making authority to oversee implementation. The 
technical proposals submitted by each company were required to include:
         Overall concept of operations for the SBInet solution.
         Quality assurance plan, measures, and metrics for the 
        overall concept, as well as those that will apply to task 
        orders/individual deliverables.
         Detailed management plan, including a defined conflict 
        of interest mitigation plan.
         Detailed subcontracting plan.
         Past Performance information.
         Application of the concept, from both technical and 
        cost perspectives, to the Tucson Sector.
         Differences in the application of the solution to the 
        Swanton Sector.
         Defined deliverable to award with the master contract.
    To ensure a clear scope for the over-arching SBInet contract, CBP 
selected stable top-level requirements, and we believe that the 
selection of the Boeing proposal validates the approach for acquiring a 
low-risk technological solution. The requirements for the SBInet 
solution are:
         Detect an entry when it occurs;
         Identify what the entry is;
         Classify its level of threat (who the entrant is, what 
        the entrant is doing, how many, etc.); and
         Respond effectively and efficiently to the entry, 
        bringing the situation to an appropriate law enforcement 
        resolution.
    These requirements are enduring and fundamental to the task of 
securing the border at and between ports of entry.
    Additionally, the Government will evaluate each task order with 
separate measures and metrics. CBP will negotiate specific technical, 
operational, and performance requirements for each subcontract and 
delivery task order. This approach to task order management provides 
CBP greater visibility into the overall success of the SBInet solution, 
not only from a budget and schedule perspective, but most importantly 
from a requirements perspective. CBP will employ Make/Buy decision 
processes, to include evaluations of alternatives and cost, prior to 
awarding delivery task orders to ensure that the Government is 
receiving optimal value and that mission requirements are met. Once 
under contract, each delivery task order will be monitored with 
accredited Earned Value Measurement processes and will have a qualified 
and accountable Project Manager.

SBInet Oversight and Management
    DHS and CBP believe that strong program management and contract 
oversight will ensure successful execution of SBInet. As part of the 
aforementioned lessons learned from a past acquisition program, CBP 
will manage the SBInet in-house for greater connectivity to the 
operators and control through direct oversight. CBP has established a 
robust program management structure to oversee the successful 
implementation of the solution and is rapidly building upon this 
foundation. The SBInet project team includes seasoned certified program 
managers and senior contract specialists. The DHS Joint Requirements 
Council and Investment Review Board will oversee deployment of the 
system throughout its life cycle.
    As is appropriate with an acquisition of this scope, value, and 
importance, the DHS Office of the Inspector General (OIG) has already 
begun evaluating SBInet and offering recommendations. Independent 
insight is essential for making continuous progress in improvements to 
program structure and management. OIG insight is helpful in identifying 
risks inherent to programs where there simply is no risk-free approach 
and in managing those risks accordingly. The recommendations received 
from OIG to date have provided useful and collaborative improvements in 
SBInet program management and contract execution. Attention to 
enhancing organizational capacity, increasing requirement definition 
tailored to specific task orders as the program matures, and diligent 
oversight of cost, schedule, and performance are essential elements of 
program management embraced by DHS and CBP.
    In conjunction with these OIG recommendations, CBP is pursuing the 
following areas of improvements to strengthen government program 
management and contractor oversight:
         Defining Program Management Structure;
         Providing Appropriate Staffing and Human Capital;
         Enhancing Definition of Operational Requirements; and
         Measuring Contractor Performance.
    Defining Program Management Structure: The SBInet Program is 
finalizing a Program Management Plan (PMP) to apply a plan of action 
with performance milestones so as to develop the capacity to manage 
SBInet, administer its contracts and agreements, and ensure effective 
oversight and implementation. The PMP will serve as the overall plan 
for managing the SBInet Program. Included within the PMP are 
delineations of Program Organization and Responsibilities, explanation 
of the CBP's Program and Technical Management Approach, and Key Program 
Management Processes.
    To solidify its capacity to manage the SBInet Program and 
administer its contracts and agreements, CBP is employing best 
practices in project management. The organizational structure set up by 
CBP allows for the concentration of subject-matter expertise into 
appropriate directorates, creating a ready resource pool to staff 
Integrated Project Teams (IPTs) to execute projects under the SBInet 
Program.
    IPTs are cross-functional teams under the leadership of an 
accountable government manager. IPTs use the tenets of integrated 
process and product development to get the right people and skills 
involved in managing a project. Each IPT in the SBInet Program will be 
formed with appropriate representatives to ensure a common 
understanding of the activities involved and to secure input from all 
relevant entities.
    As CBP carries out SBInet, other organizations within DHS will 
carry out additional elements of the SBI. There are specific program 
areas within SBI that are the responsibility of CBP, Immigration and 
Customs Enforcement (ICE), and Citizenship and Immigration Services 
(CIS). DHS has established a Secure Border Initiative Coordination 
Council to work with the PMOs to ensure consistency and alignment of 
program elements and to provide adequate Departmental oversight.
    SBInet is developing an SBInet Program Plan that describes and 
documents the work breakdown structure, Integrated Master Schedule, and 
the program budget. SBInet will establish an SBInet Process Library 
that will contain management processes associated with program and 
project management. Examples include task order initiation processes, 
deliverable review processes, design review processes, and IPT 
Charters. An Office Management Plan will be developed to contain the 
administrative processes and procedures associated with managing a 
large office, such as new employee orientation, supply ordering, etc.
    Providing Appropriate Staffing and Human Capital: CBP commissioned 
an independent third-party study through the Homeland Security 
Institute (HSI) to assess the SBInet Program's staffing and human 
capital needs. Leveraging the results of the HSI staffing study, the 
PMO has developed a FY 2007 staffing plan. This staffing plan includes 
an additional 169 staff positions (96 government and 85 contractors), 
bringing the total PMO staff to 270.
    The CBP Commissioner has established an Executive Steering 
Committee (ESC) that meets as needed to discuss program progress 
against SBInet goals and objectives. The PMO will provide periodic 
updates to both CBP and DHS leadership.
    Enhancing Definition of Operational Requirements: To continue 
definition of the top-level requirements provided during the contract 
solicitation, the PMO developed a Mission Needs Statement that was 
approved on October 1, 2006. The Mission Needs Statement identifies 
capability gaps and certain needs of the SBInet Program.
    The SBInet Program completed a comprehensive requirements workshop 
with CBP operational stakeholders on October 13, 2006. The resulting 
Operational Requirements Document (ORD) will be finalized and approved 
by January 19, 2007. This document will be used to derive contract 
requirements and establish the appropriate performance metrics for each 
future task order.
    In addition to the ORD, a System Engineering Management Plan (SEMP) 
will be developed to outline the technical management and processes. 
Testing will include an Independent Validation and Verification (IV&V) 
contractor who will test software and systems development. Test and 
Evaluation will also include Operational Test and Evaluation (OT&E), 
using an independent government organization to evaluate performance, 
effectiveness, and operational suitability of the installed solution.

    Measuring Contractor Performance: The plan of action and milestones 
(POA&M) currently in development will include measurable and meaningful 
performance metrics and controls. Additionally, the SBInet Program will 
use Earned Value Management (EVM) as a technique to integrate cost, 
schedule, and technical accomplishments for SBInet task orders where 
appropriate. EVM is a common method for measuring performance, 
reporting and analyzing project status, and comparing actual costs and 
accomplishments to a baseline. EVM serves as an early warning indicator 
for effective management decisions and corrective actions. It supports 
effective ``what-if,'' tradeoff and trend analyses; helps to highlight 
potential risks; and provides more accurate forecasts of cost and 
schedule performance. Using EVM on the SBInet Program satisfies the 
acquisition requirements of OMB Circular A-11, Part 3, and the 
Government Performance and Results Act of 1993 GPRA.
    Issues related to EVM will be addressed and resolved, as 
appropriate, with guidance and support from the CBP Commissioner and 
Chief Procurement Officer (CPO). A status of EVM issues will be 
provided to the CBP Commissioner and CPO on a monthly basis.
    Boeing will provide regular implementation status reports and 
reviews on the SBInet task orders. Specific requirements for reports 
and reviews will be detailed in the individual task orders and may 
include cost performance reports; schedule and planning reports and 
reviews; technical performance reports and reviews; management reports 
and reviews; Integrated Baseline Reviews; and project cost estimates.
    CBP is currently working with Boeing Corporation to prepare the 
POA&M. It will be reviewed as recommended by the CBP Commissioner and 
the CPO, and recommended actions will be instituted and tracked to 
completion. To ensure continued attention and adequate provision of 
resources, the PMO will provide periodic updates to both CBP and DHS 
CPO leadership.
    Monthly Program Management Reviews (PMRs), which include the status 
of risks, action items and issues, key milestones, budget, and 
deliverables, will be provided to the CBP Commissioner and CPO monthly. 
The PMRs will provide a forum to facilitate timely decision-making by 
presenting leadership with a thorough status of the SBInet Program 
while raising issues that need management attention.
    The PMO will lead task order working-level meetings with Boeing on 
a regular basis to discuss and resolve project-level status and issues. 
These reviews will focus on assessing performance, facilitating the 
SBInet Integrator's work efforts, and addressing issues requiring 
resolution by either party.
    SBInet project managers will be responsible for assessing and 
reporting project status and the likelihood of meeting the scope, cost, 
schedule, and technical performance objectives through weekly reports 
to the SBInet Program Manager, PMO Directors, and other project 
stakeholders on a weekly basis. Status reporting will begin as soon as 
a new project is initiated and will end upon project completion.
    Without a dramatic shift in the way that we as a Nation protect our 
land borders, we leave ourselves and our citizens vulnerable. We 
recognize the challenges that lie ahead. By defending our borders with 
the latest technology and infrastructure and additional well-trained 
personnel, and by maintaining a vigilant interior enforcement of our 
Nation’s immigration laws, we will fulfill our mission of 
protecting our country and its citizens.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Rogers. And the Chair now recognizes Ms. Deborah Spero, 
Deputy Commissioner for Customs and Border Protection for the 
U.S. Department of Homeland Security.
    Welcome, Ms. Spero. We look forward to your comments.

STATEMENT OF DEBORAH J. SPERO, DEPUTY COMMISSIONER, CUSTOMS AND 
       BORDER PROTECTION, DEPARTMENT OF HOMELAND SECURITY

    Ms. Spero. Thank you very much. And good afternoon to 
everyone, Chairman Rogers, Ranking Member Meek, members of the 
subcommittee. It is an honor to be before you today to discuss 
SBInet and its role in helping U.S. Customs and Border 
Protection ensure greater control of our borders.
    Commissioner Basham asked that I convey to you his personal 
regrets that he was unable to attend today because he had 
previous travel commitments, but I am pleased to be here in his 
stead along with Inspector General Richard Skinner, Chief 
Procurement Officer Elaine Duke, and, of course, our SBI 
Executive Director, whom you have just heard from.
    I want to begin by thanking you, Mr. Chairman, and the 
Ranking Member and the other members of the committee for the 
strong support that you have provided to CBP that is enabling 
us to carry out our priority mission of preventing terrorists 
and terrorist weapons from entering our Nation.
    The men and women on the front line, our CBP officers, 
Border Patrol, and our pilots, our marine officers, are all 
charged with what is clearly one of the most important missions 
of any Federal Government agency today, and that is protecting 
our borders at and between the ports of entry while at the same 
time facilitating the flow of legitimate trade and travel. With 
your strong support, and under the leadership of the President 
and Secretary Chertoff, CBP is taking definitive steps to 
gaining operational control at our border through the Secure 
Border Initiative.
    SBInet is a major component of the Secure Border 
Initiative, establishing a framework for a comprehensive 
integrative solution that includes technology, tactical 
infrastructure and front-line personnel. The significant 
increases in Border Patrol personnel and related technology and 
infrastructure which Congress authorized and funded in fiscal 
years 2006 and 2007 are solid down payments in carrying out 
this initiative. And I believe CBP is making great progress on 
SBInet.
    The SBInet integrator has been selected, and we are moving 
forward in designing and implementing an integrated view to 
border securement. We are also very pleased that Mr. Giddens 
has joined us at CBP to launch this initiative, and he is 
leading the strength of the infrastructure and our staff to 
carry out the SBInet program.
    Commissioner Basham and I are both personally committed to 
bringing all parts of CBP together to ensure the success of 
SBInet and of the Secure Border Initiative overall. To that 
end, Commissioner Basham has established an executive steering 
committee that meets as needed to discuss program progress 
against the SBInet goals and objectives. The SBI program 
management office will provide periodic outputs to both CBP and 
to DHS leadership. This will help ensure that the key risks 
that need to be mitigated, such as staffing, are receiving top-
level attention and commensurate resources.
    Also, a status of cost and schedule performance will be 
provided to the Commissioner and to me on a monthly basis. We 
also recognize that our success is closely connected to the 
effectiveness of our sister agencies such as ICE and CIS, and 
we have been working with them under the SBI umbrella to ensure 
that our efforts complement each other.
    While there will no doubt be challenges ahead, I am 
confident that we are moving in the right direction, and that, 
with the continued support of the Congress, CBP will succeed in 
meeting these challenges.
    I will be happy to answer any questions you may have. Thank 
you very much.
    Mr. Rogers. Thank you, Commissioner Spero, for your 
statement.
    The Chair now recognizes Ms. Elaine Duke, Chief Procurement 
Officer for the Department of Homeland Security, for your 
statement. Welcome.

    STATEMENT OF ELAINE C. DUKE, CHIEF PROCUREMENT OFFICER, 
                DEPARTMENT OF HOMELAND SECURITY

    Ms. Duke. Good afternoon, Chairman Rogers, Ranking Member 
Meek, Ranking Member Thompson, members of the committee. Thank 
you for inviting me here this afternoon to talk with you about 
the SBInet contract.
    SBInet is an extremely high priority for the Department of 
Homeland Security, and it is one of our most complex and 
visible contracts. The Deputy Secretary asked that I convey to 
you the personal commitment that he and the Secretary have to 
make this program successful along with the rest of the 
Department. We want to ensure that the program works and is 
successful.
    In addition, I can commit to my own personal commitment. 
You have the commitment of the other chiefs, specifically the 
Chief Information Officer and the Chief Human Capital Officer, 
and they are equally engaged in making sure that this program 
gets the priority treatment it needs.
    In fiscal year 2006, DHS obligated nearly $15 billion in 
prime contract dollars. Our preliminary small business 
accomplishments indicate that we awarded about 33 percent of 
those prime contracts to small business programs. The SBInet 
contract at Boeing is one of these contracts. Boeing has now 
undertaken the task of using this contract vehicle to help 
achieve the critical national priority of securing the Nation's 
borders.
    My top priorities for the entire DHS procurement program, 
which I provided to you in my written testimony for your 
review, are very applicable to the SBInet contract and 
important for a successful execution.
    As Greg already mentioned, SBInet acquisition was done 
during a full and open competition, and it is a definite 
delivery and definite contract, which means all work 
requirements will be negotiated and awarded on individual task 
orders. Each task order issued under the SBInet contract will 
be individually negotiated, and we will be deciding contract 
type-appropriate risk sharing between the government and Boeing 
and appropriate award incentive fee structures and measures to 
ensure performance. The SBInet contract, therefore, allows DHS 
to structure the acquisition in discrete workable phases 
implemented through task orders. This approach will provide the 
greatest amount of flexibility to respond to evolving 
requirements.
    Further, it is important to note that the contract with 
Boeing is not an exclusive contract. DHS at its discretion may 
use other contract vehicles for goods and services required for 
the SBInet program. The government reserves the right to 
compete SBInet requirements through the use of other contract 
vehicles and methods. DHS will work with Boeing to ensure that 
the requirements under this contract are evaluated for sound 
make-or-buy decisions ensuring that we have adequate 
competitions throughout the life of the contract.
    My initial focus in providing DHS oversight of the SBInet 
contract is to ensure that the right number of people with the 
right skills are in the program and contract offices at CBP. 
Additionally, I am working to make sure that processes are in 
place to control the effective issuance and administration of 
the task orders under this contract.
    The CBP acquisition office envisions a full complement of 
contract and support staff and is taking appropriate steps to 
add staff dedicated solely to the SBInet program. The staffing 
plan includes 31 contacting personnel, and currently they are 
over half staffed towards that goal.
    Both DHS and CBP are committed to acquisition management 
and oversight of the SBInet contract. My senior staff and I 
have been working very closely with CBP to ensure appropriate 
planning, execution and management of the contract. I will be 
actively involved in reviewing the SBInet program and will 
participate in the departmental review activities, including 
the Investment Review Board. We are going to aggressively 
manage small business subcontracting. Boeing subcontract plan 
does show commitment to small business. All requirements 
relating to SBInet, whether acquired by this contract or other 
contract vehicles, will be carefully reviewed for small 
business potential.
    The oversight and management work for this contract is 
supported by DHS-wide initiatives from my office. This includes 
the formation of a Program Management Council throughout DHS to 
build a program manager cadre throughout the Department. 
Additionally, we have built a Model Intern Program that we have 
a pilot in TSA and we will be implementing throughout the 
Department.
    In closing, there are several key factors that will ensure 
the successful practice of the SBInet contract. These include 
negotiating task orders with sound requirements, measurable 
outcomes and good incentives; continuously measuring 
performance and adhering to program metrics; strong program 
management and contract administration; and sustained 
competition through disciplined make-or-buy designs. I am 
committed to working with CBP and this committee to make sure 
these key factors are addressed throughout the contract 
performance.
    Thank you.
    Mr. Rogers. I thank you, Ms. Duke.
    [The statement of Ms. Duke follows:]

                   Prepared Statement Elaine C. Duke

    Chairman Rogers, Congressman Meek, and Members of the Committee, I 
am Elaine Duke, the Chief Procurement Officer for the Department of 
Homeland Security (DHS). I am pleased to be here today with Mr. Gregory 
Giddens of U.S. Customs and Border Protection (CBP), who is the Program 
Executive for the SBInet contract. Thank you for the opportunity to 
appear before you to discuss the SBInet contract.
    The SBInet contract has been awarded, and now DHS, with its 
industry partner Boeing, has undertaken the task of using this contract 
vehicle to help achieve the critical national priority of securing the 
Nation’s borders.
    My top priorities are worth reviewing because they are essential 
for the successful execution of the SBInet contract, as well as other 
DHS acquisitions. My top four priorities are:
     First, to build the DHS acquisition workforce to enhance 
the DHS acquisition program.
     Second, to establish an acquisition system whereby each 
requirement has a well-defined mission and a management team that 
includes professionals with the requisite skills to achieve mission 
results.
     Third, to ensure more effective buying across the eight 
contracting offices through the use of strategic sourcing and supplier 
management.
     Fourth, to strengthen contract administration to ensure 
that products and services purchased meet contract requirements and 
mission needs.
    My initial focus in providing DHS oversight of the SBInet contract 
is to ensure that the right numbers of people with the right skills are 
in the program and contract offices of CBP. Additionally, I will ensure 
that processes are in place to control the effective issuance and 
administration of task orders under this contract.

SBInet Program
    U.S. Customs and Border Protection (CBP) is the executive agent for 
DHS in the development of the SBInet solution. SBInet requires a 
comprehensive and aggressive strategy to deploy the optimum mix of 
personnel, technology, and infrastructure in a manner that will 
significantly reduce the probability of illegal entries and successful 
cross-border violations into the United States. SBInet supports the 
strategic plans and objectives of DHS and CBP.
    As part of the comprehensive DHS solution for border security, CBP 
will use the SBInet contract to acquire, deploy, and sustain the 
technology and tactical infrastructure necessary to achieve control at 
and between ports of entry. The initial focus of SBInet will be where 
there are the most serious vulnerabilities to border security. It 
requires integrating a common operating picture (COP) of the border 
environment within a command and control center that will provide DHS 
components and stakeholders external to DHS an unprecedented level of 
interoperability. The SBInet solution will do the following:
         Develop a Common Operating Picture (COP) throughout 
        CBP and DHS to integrate multiple state-of-the art systems, 
        infrastructure, response capabilities, and personnel into a 
        single comprehensive border security solution that communicates 
        relevant situational awareness, including intelligence-driven 
        operations capabilities at all operational levels and 
        locations;
         Deploy the most effective combination of current- and 
        next-generation technology, infrastructure, response 
        capabilities, and personnel;
         Integrate technology, infrastructure, and processes to 
        rapidly dispatch personnel;
         Cover all areas along the land border with Mexico and 
        Canada, including the Great Lakes, but not including Alaska; 
        and
         Cover all types of geographic areas, topology, land 
        forms, population centers (urban, rural, remote), and 
        environmental conditions.
    This comprehensive solution carries out the goal of securing the 
border, which requires that four key elements be met:
         Detect an entry when it occurs;
         Identify what the entry is;
         Classify its level of threat (who they are, what they 
        are doing, how many, etc); and
         Effectively and efficiently respond to the entry, 
        bringing the situation to an appropriate law enforcement 
        resolution.
    Boeing will work with DHS to ensure that all aspects of the SBInet 
solution are compatible with other DHS and CBP initiatives.

SBInet Acquisition Overview
    As part of the comprehensive DHS solution for border security, CBP 
will use the SBInet contract to acquire, deploy, and sustain the 
technology and tactical infrastructure necessary to achieve control at 
and between ports of entry (POE). The SBInet Program incorporates 
acquisition best practices and lessons learned from previous border 
technology procurements to provide the most cost and operationally 
effective solution for securing the border. CBP selected an indefinite 
delivery, indefinite quantity (IDIQ) contract vehicle because the 
vastly different terrain, threats, and evolving nature of the 
operational environment require a solution that is flexible, adaptable, 
and tailored to specific needs.
    The SBInet acquisition was conducted using full and open 
competition and resulted in a performance-based IDIQ contract being 
awarded to Boeing in September 2006. Several businesses submitted 
proposals that provided solutions for securing the borders and detailed 
the partnering relationships they intended to utilize to meet the 
Government’s program objectives.
    The contract has a base period of three years and three one-year 
option periods for a total of six years. The maximum that the 
Government may obligate under the contract covers the full panoply of 
supplies and services necessary to provide 6,000 miles of secure 
border. The Government has already met its minimum obligation under the 
contract (i.e., $2 million). It is expected that the supplies and 
services required for this effort are, for the most part, commercially 
available. Major components consist of sensors, communication 
technologies and equipment, command and control systems and subsystems, 
infrastructure and response capabilities, and the integration of all of 
the above.
    Task and delivery orders will be negotiated and may range from cost 
reimbursement to firm fixed price with appropriate risk-sharing between 
the Government and the contractor and award/incentive fee structures. 
It is anticipated that DHS will accept more of the risk during the 
design and development phases, which are expected to be cost 
reimbursement tasks. After the development phase has been completed, 
the contract task and delivery orders may shift to other types of 
arrangements. The SBInet contract, therefore, allows DHS to structure 
the acquisition into discrete, workable phases, implemented through 
task and delivery orders. This approach will provide the greatest 
amount of flexibility to respond to evolving requirements.
    Further, the contract with Boeing is not an exclusive contract. DHS 
may at its discretion use other contract vehicles for the goods and 
services required for the SBInet Program. The Government reserves the 
right to compete SBInet requirements through the use of other contract 
vehicles or methods when it is in the best interest of the Government. 
This includes using other DHS contracts or Government-wide acquisition 
contracts, as appropriate. All such requirements will be carefully 
reviewed for small business set-aside potential. DHS will work with 
Boeing to ensure that requirements awarded under the contract are 
evaluated for make-or-buy decisions, i.e., subcontracting versus Boeing 
completing the work itself.

DHS Commitment to the Small Business Community through SBInet
    During the solicitation phase of the SBInet acquisition, DHS 
emphasized its commitment to ensuring that any resulting contract would 
contain a substantial commitment to the small business community. The 
goals of the SBInet contract are related to the small business goals of 
DHS. The Boeing subcontract plan shows, in our view, the company's 
commitment to small businesses. Small business subcontracting and 
participation in the DHS Mentor-Protege program were part of the 
evaluation criteria in the solicitation, contributing to a rigorous 
competition. Boeing submitted three Mentor-Proteges as part of its 
winning proposal. Our next major step is to ensure that procedures are 
in place to monitor Boeing's progress in the small business 
subcontracting arena.
    In addition to the submission of required semi-annual electronic 
reports, DHS/CBP will enter into an agreement with the Defense Contract 
Management Agency (DCMA) to monitor Boeing's subcontracting. DCMA will 
perform on-site Small Business Program Compliance Reviews. The DHS 
Office of Small and Disadvantaged Business Utilization (OSDBU) will 
work closely with CBP to monitor Boeing’s progress. OSDBU and CBP 
will work with Boeing to establish a small business outreach program.

Acquisition Management and Oversight
    Both DHS and CBP are committed to acquisition management and 
oversight of the SBInet contract. My senior staff and I have been 
working very closely with CBP to ensure appropriate planning, 
execution, and management of the contract. From solicitation through 
contract award and task order issuance, my senior staff and I have been 
involved throughout the acquisition.
    My Acquisition Oversight Directorate will be actively involved in 
reviewing the SBInet Program. As a Level 1 Procurement, my office will 
participate in all Departmental program review activities, including 
the meetings of the Investment Review Board. Also, we will routinely 
review acquisition planning documents, solicitations, task order 
awards, and contract administration activities. The SBInet Program will 
also be checked quarterly as part of the CBP Operational Assessment 
review in accordance with the DHS Acquisition Oversight Program. There 
will be a comprehensive acquisition management review of SBInet in 
conjunction with the Tri-annual Component review. Additionally, my 
oversight office has been, and will continue to be, available to 
consult with the SBInet Program Manager and Contracting Officer as 
needed.
    The CBP Acquisition Office and the Program Management Office work 
hand in hand and are developing a Contract Management Plan. There are 
weekly meetings scheduled with senior management staff within the 
Program Management Office to discuss all work planned and in progress. 
Integrated Project Teams were formed at the initiation of task orders, 
allowing the Acquisition team to work with the Program Management 
Office in the development phase. There are a number of processes and 
procedures being implemented to ensure compliance with all DHS and CBP 
directives. Also, a training schedule will be developed for the entire 
Program Management Office. A Governance workshop is planned this month 
for the senior staff of the Program Management Office and Boeing. This 
is the first of many such joint workshops that will include the Program 
Management Office, the Acquisition team, and Boeing.

Program Management Council
    The Office of the Chief Procurement Officer (OCPO) has led the 
formation of a Program Management Council (PMC) as part of the 
Procurement Program Management Center of Excellence. The PMC is working 
to develop the policies, procedures, and other tool sets needed for DHS 
Program Managers to succeed. On a semi-annual basis I, as the CPO, and 
the current PMC Chairman, Gregory Giddens, will report to the Deputy 
Secretary on Department-wide progress in key areas of program 
management. They are:
         State of the DHS Program Manager (PM);
         PM effectiveness, successes, and recommendations;
         Certification status of PM’s;
         PM training and career development;
         PM policies and procedures; and
         Lessons learned.
    DHS has implemented Earned Value Management (EVM) within high 
priority programs and a Program Management Periodic Reporting process 
to assess the performance of all major investments each quarter.

Staffing
    The CBP Acquisition Office envisions a full complement of contract 
and support staff and is taking appropriate steps to add staff 
dedicated solely to the SBInet Program. The SBInet staffing plan 
includes 31 contracting personnel. The SBInet contract staff will be 
supported by other staff within the CBP Contracting Office. CBP 
currently has eight Government staff and eleven contractor staff 
dedicated to SBInet.
    Balancing the appropriate number of DHS contracting officials with 
the growth of DHS contracting requirements has been a challenge. The 
gap between DHS acquisition spending and acquisition staffing levels 
has placed increased demands on procurement officials. The challenges 
stretch across the entire DHS acquisition organization and are not 
limited to one major acquisition program such as SBInet.
    Within the Washington, D.C., area, competition for procurement 
personnel is intense. DHS has initiated staffing solutions to resolve 
personnel shortages. In particular, the Department is considering 
creating one centralized recruitment system for contracting personnel 
as well as enhance the DHS Acquisition Fellows Program which aims to 
recruit recent college graduates. Our office is also working with Human 
Resources to streamline the direct hire process. The FY 2007 Budget 
provided funding to hire additional acquisition personnel. Higher 
staffing levels will improve DHS' ability to monitor Department 
contracts and effectively identify and correct poor contractor 
performance. Other examples of our efforts to address contracting staff 
shortages are:
         Formulating a strategy to develop relationships with 
        local universities that have accredited contracting curriculums 
        to attract collegiate talent at the junior level instead of 
        waiting until graduation;
         Devising a recruitment strategy to attract mid-level 
        professionals that includes targeting military personnel who 
        possess the prerequisite skills and who are separating or 
        retiring from military service; and
         Considering participating in the Department of 
        Veterans Affairs program for hiring injured veterans returning 
        from Iraq and Afghanistan.
         In closing, there are several key factors that will 
        ensure the successful performance of the SBInet contract. Some 
        of those key factors include:
         Negotiating task orders with sound requirements, 
        measurable outcomes, and good incentives;
         Continuously measuring performance and adherence to 
        program metrics;
         Strong program management and contract administration; 
        and
         Sustained competition through disciplined make-or-buy 
        decision processes.
    I am committed to working with CBP to ensure that these key factors 
are addressed throughout contract performance.

    Mr. Rogers. The Chair now recognizes the Honorable Richard 
Skinner, the Inspector General of the Department of Homeland 
Security.

   STATEMENT OF THE HONORABLE RICHARD L. SKINNER, INSPECTOR 
            GENERAL, DEPARTMENT OF HOMELAND SECURITY

    Mr. Skinner. Thank you, Chairman Rogers. I appreciate the 
opportunity to be here today. I submitted a statement for the 
record.
    What I would like to do with the time allotted to me is 
just to discuss briefly what our office is doing to provide 
oversight in the procurement operation of the Department and 
also to discuss some of the challenges and tasks that lay ahead 
for the Department as it tries to execute its SBInet 
initiative.
    First, concerning our procurement oversight role, the 
inherent nature of the Department's mission will always require 
reliance on contractors. In fact, more than 40 percent of the 
Department's annual budget is spent on procurements. For this 
reason, acquisition management has been and will continue to be 
a priority for my office and an area where we plan to focus 
considerable resources.
    During the past year, we have created a Procurement 
Oversight Office. We have hired a director and are now in the 
process of hiring staff. The office will be responsible for 
examining cross-cutting issues. It is currently developing an 
inventory of major acquisitions with an eye towards identifying 
those most vulnerable to fraud, waste, and abuse. That is sole-
source contracts, limited competition contracts, and time and 
material contracts.
    We also plan to review the training and qualifications of 
the Department's acquisition workforce across the board. We 
have just recently have created what I would like to refer to 
as the acquisition focus teams. That is teams that specialize 
in a particular subject matter. Today we have teams that 
provide continuing and ongoing oversight. This includes 
Deepwater programs, CBPs, SBInet program, and, of course, 
FEMA's disaster operation program.
    We also have become an active member on the Department of 
Justice Katrina Fraud Task Force, most of which right now is 
focused on procurement activity, and we have just recently 
joined the Department of Justice's newly established 
Procurement Fraud Task Force and will be active members on that 
team as well. It will consist both with investigators and 
auditors as we work our way through the procurements within the 
department. We will work with them to identify fraud, waste, 
and abuse and, where necessary, get prosecution if we do, in 
fact, find fraud.
    Details of our procurement activities can be found in our 
performance plan which we just recently published, and it is 
also up on the Web site.
    Now concerning the tasks and challenges that we believe lay 
ahead within the Department's SBInet initiative, the approach 
to SBInet recognizes the need for a comprehensive systemic 
solution to the complex challenges of border security. It will 
not be easy. The Department's performance-based acquisition 
strategy to address those challenges is, in our opinion, a good 
one.
    Partnering with the private sector will add a fresh 
perspective, insight, creative energy and innovation to the 
Department's efforts to meet its mandate to securing our 
borders. It shifts the focus from traditional acquisition 
models, that is strict compliance, contract compliance, into 
one of collaborative performance-oriented teamwork with a focus 
on performance, improvements and innovation.
    Nevertheless, using this type of approach does not come 
without risk. To ensure that this partnership is successful, 
the Department must lay the foundation to oversee and assess 
contractor performance and control costs and schedules. In our 
opinion, the Department has not yet laid that foundation, at 
least not fully.
    Specifically, the Department acquisition management 
capacity lacks the appropriate workforce, business processes, 
and management controls for executing a new start for a major 
acquisition program such as SBInet. Key positions are still 
being identified and filled. CBP is still trying to come from 
behind and create the organization needed to manage the 
program. That is why we believe the Department needs to proceed 
with caution as it moves forward with the implementation of the 
SBI initiative or SBInet initiative. Expediency and urgency 
should not drive the acquisition. Instead, the Department needs 
to ensure that it has the capacity to manage such an 
initiative. Then and only then can it provide assurances that 
it is being a good steward of the taxpayers' dollar.
    Also, the Department deferred fully defining operational 
requirements to after the award of the systems integration 
contract, that is the Boeing contract. In selecting the 
system's integrator, the Department used a broad statement of 
objectives as part of its acquisition strategy in order to 
allow the industry to be creative in its solutions, and 
consequently deferring setting contract requirements, including 
performance metrics, until delivery of the task orders are 
actually negotiated. Right now I believe we have awarded two 
tasks under the existing contract.
    This is fine, in our opinion, at least for the moment. 
However, until the Department fully defines, validates, and 
stabilizes the operational requirements underlying the SBInet 
program, the program's objectives are at risk, and effective 
cost and schedule control are precluded.
    Now that the contract has been awarded, the Department 
needs to move quickly to ensure performance and management 
systems and processes are in place and functioning. As 
reflected in our advisory--our Advisory Report on the SBI 
Initiative and Procurement, which we just published today and 
will go up on our Web page tonight, and CBI's Corrective Action 
Plan, the tasks and challenges that lay ahead include building 
the management and oversight capacity that will allow the 
Department to oversee the execution of the program; refining 
operational requirements with Boeing's proposed solution; 
establishing an acquisition program baseline of costs, schedule 
and technical performance parameters, a performance baseline 
upon which the program cost estimates and budgets and cost 
metrics could be based; and implementing an earned value 
management system to ensure that Department's understanding of 
the program status, the contractor's performance and the 
reliability of program budgets and cost estimates.
    Performance management systems will ensure transparency. 
That is a clear roadmap on how the contractor plans to meet the 
Department's Border Security Initiative or objective.
    Visibility. That is a clear, open line of communications 
with all of the stakeholders on the progress of the initiative.
    Accountability. That is the means to determine on a real-
time basis what is working and what is not working.
    And finally oversight. This includes just not the program 
management office, but oversight by the OIG and by the 
Congress.
    Mr. Chairman, members of the committee, that concludes my 
oral statement. I will be pleased to answer any questions you 
may have.
    Mr. Rogers. Thank you, Mr. Skinner.
    [The statement of Mr. Skinner follows:]

                Prepared Statement of Richard L. Skinner

    Good afternoon, Mr. Chairman and Members of the Subcommittee. I am 
Richard L. Skinner, Inspector General for the Department of Homeland 
Security (DHS). Thank you for the opportunity to discuss our risk 
management review of the SBInet program initiative.
    Today I will discuss performance-based acquisitions, DHS' 
acquisition management capacity, and the specific risk we see related 
to the Secure Border Initiative.
    To accomplish its mission of securing the homeland, DHS spends 
billions of taxpayer dollars annually. Of that total, about 30% of the 
DHS budget goes to the private sector to procure goods and services. 
Implicit in each procurement is the desire to accomplish a mission need 
as reliably and as cost-effectively as possible. One procurement method 
DHS uses is performance-based contracting. While this method has 
certain advantages over traditional, specifications-based contracting, 
it also introduces risks that, unless properly managed, threaten 
achievement of cost, schedule, performance, and, ultimately, mission 
objectives.

Key Concepts and Potential Benefits of Performance-Based Contracting
    Over the past 25 years, the federal government has attempted to use 
performance-based contracting. Its basic principals and potential 
benefits are readily understandable. Nevertheless, successful use of 
this approach demands additional thought, planning, and oversight 
measures that may be less necessary in traditional contracting 
approaches.
    A performance-based contract describes needs in terms of what is to 
be achieved, not how it is to be done. One appeal of performance-based 
contracting is that it allows the government to focus on identifying 
needs, objectives, and constraints and allows the private sector to 
focus on developing a business proposal to meet those needs and 
objectives. The contracting approach shifts from looking for the low 
cost, technically acceptable solution to looking for the best-value 
solution, which is often more innovative than the traditional approach. 
To determine best value, the government must measure performance trade 
offs and the cost-effectiveness of the various proposed solutions.
    Oversight in specifications-based contracting is a matter of 
determining whether or not the contractor complies with the explicit 
terms of the contract. In performance-based contracting, oversight is a 
matter of determining whether the contractor's solution, when complete, 
will meet the mission needs specified in the contract. Oversight 
focuses on program performance and improvement from a defined baseline, 
not contract compliance.
    A trivial example highlights the simplicity of these concepts, but 
also the need for a precise statement of the performance objectives. A 
traditional, specifications-based contract for lawn maintenance might 
require weekly watering and mowing, quarterly fertilizing, and annual 
aeration. A performance-based lawn maintenance contract might specify 
that the lawn should never be more than 3 inches high, have no more 
than 5% weeds, and never turn brown. The traditional contract tells the 
contractor how to do its job; the performance-based contract tells the 
contractor what the owner wants to see when looking at his lawn. With 
the traditional contract, the owner may or may not get the desired 
lawn, but the owner would know exactly what he paid for.
    If the performance-based contract specified its objective as a 
``golf course quality lawn,'' the performance-based approach would be 
riskier than the traditional one. When the owner does not have a well-
defined, measurable performance objective, the owner cannot predict how 
much it will cost, how long it will take, and what the end result will 
be. The contractor may have a different understanding of how much it 
will cost and how long it will take to achieve the golf course quality.
    Therein lies the critical importance of describing mission needs, 
and the yardsticks by which to measure achievement, completely and 
precisely. Without clear agreement between the government and the 
contractor about what the procurement is to achieve, the government is 
vulnerable to cost overruns, delays, and, in the end, not receiving a 
good or service that meets its needs.

    Mitigation of Risks
    Performance-based contracting may have additional risks, but with 
forethought and vigorous oversight, the risks can be managed. ``Risk 
management is the art and science of planning, assessing, and handling 
future events to ensure favorable outcomes. The alternative to risk 
management is crisis management, a resource-intensive process'' with 
generally more limited options.\1\
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    \1\ Risk Management Guide for DOD Acquisition, Department of 
Defense, Defense Acquisition University, Fifth Edition (Version 2.0), 
June 2003.
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    While no one has yet formulated the perfect risk management 
solution, risks can be controlled, avoided, assumed, and transferred. 
For example, programs can develop alternative designs that use lower 
risk approaches, competing systems that meet the same performance 
requirements, or extensive testing and prototyping that demonstrates 
performance. Risk mitigation measures usually are specific to each 
procurement. The nature of the goods and services procured, the 
delivery schedule, and dollars involved determine what mitigation is 
appropriate.

Acquisition Management is a Major Challenge for DHS
    Building an effective acquisition management infrastructure for the 
significant level of contracting activities in the department is a 
major challenge. DHS must have an acquisition management infrastructure 
in place that allows it to oversee effectively the complex and large 
dollar procurements critically important to achieving its mission. 
Acquisition management is not just awarding 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 urgency and complexity of the department's mission will 
continue to demand rapid pursuit of major investments. We have 
conducted audits and reviews of a number of individual DHS contracts. 
Common themes and risks emerged from these audits, primarily the 
dominant influence of expediency, poorly defined requirements, and 
inadequate oversight.
    Little disagreement exists about the need for our nation to protect 
itself immediately against the range of threats, both natural and 
manmade, that we face. At the same time, the urgency and complexity of 
the department's mission create an environment in which many programs 
have acquisitions with a high risk of cost overruns, mismanagement, or 
failure.
    The department's need for increased institutional capacity to 
manage such risks is a common theme in the audits we have conducted. 
The department does not have a cadre of skilled program and acquisition 
management personnel, as well as robust business processes and 
information systems, to meet its urgent schedule demands and complex 
program objectives in a timely and effective manner.
    Programs developed at top speed sometimes overlook key issues 
during program planning and development of mission requirements. Also, 
an over-emphasis on expedient contract awards may hinder competition, 
which frequently results in increased costs. Finally, expediting 
program schedules and contract awards necessarily limits time available 
for adequate procurement planning and development of technical 
requirements, acceptance criteria, and performance measures. This can 
lead to higher costs, schedule delays, and systems that do not meet 
mission objectives.
    In our FY 2005 assessment of procurement operations for Secretary 
Chertoff, we recommended that DHS: (1) require expanded procurement 
ethics training for senior program and procurement officials; (2) 
monitor departmental procurement activities for potential standards of 
conduct violations; (3) create and staff a DHS organization to develop 
program management policies and procedures; provide independent 
technical support and share best practices; (4) optimize procurement 
organization resources across DHS; and, (5) provide the Chief 
Procurement Officer with sufficient staff and resources to effectively 
oversee DHS procurement operations.\2\ DHS concurred with each of these 
recommendations. To a great extent, the Chief Procurement Officer's 
agenda reflects the issues in our report.
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    \2\ DHS OIG, Department of Homeland Security's Procurement and 
Program Management Operations, OIG-05-53, September 2005.

A Systems Approach To Border Security
    The challenges the department faces are complex and require 
comprehensive solutions. Implementing effective solutions to homeland 
security vulnerabilities requires a systems approach that collectively 
reduces risks, not just shifts them. Reducing America's vulnerability 
to terrorism by controlling the borders of the United States is one of 
DHS' primary missions. Accomplishing this mission requires a 
comprehensive solution and concerted effort across the department and 
its federal, state, and local partners. This mission is shared by a 
number of agencies within DHS and is dependent on the coordinated 
accomplishment of each agency's roles, as well as joint efforts with 
other agencies.
    The department recognizes the need for a coordinated systems 
approach to securing the border. During FY 2006, the White House and 
DHS announced a comprehensive multi-year plan to secure the borders and 
reduce illegal immigration--The Secure Border Initiative (SBI). DHS 
created a program executive office within the policy directorate to 
plan, coordinate, and oversee implementation of SBI across DHS.
    Maintaining a coordinated systems approach to addressing the 
challenge of securing our borders will be a major challenge as DHS 
components implement the various plans comprising SBI. The major 
planned efforts under SBI are led by the three lead components for 
immigration and border security.
         Immigration and Customs Enforcement leads efforts to 
        improve the apprehension, detention, and removal of illegal 
        aliens, and to expand worksite enforcement. Improvements in 
        alien detention and removal efforts require coordinated efforts 
        across DHS and collaboration with the Department of Justice and 
        other agencies sharing responsibility for this function.
         Citizenship and Immigration Services leads initiatives 
        for a temporary guest worker program; streamlining immigration 
        benefits processes; and expanding the employment verification 
        program. CIS efforts focus on automating and improving 
        processes to: (1) increase efficiency and alleviate chronic 
        backlogs in benefit application processing and adjudications; 
        and (2) handle anticipated increases in applicants under 
        proposed expanded guest worker initiatives.
         Customs and Border Protection leads the SBInet major 
        investment program to gain control of the borders using a mix 
        of technology, infrastructure, personnel, and processes. While 
        SBInet is a new program, it replaces two previous efforts to 
        gain control of the borders--the Integrated Surveillance 
        Intelligence System (ISIS) and the America's Shield Initiative 
        (ASI)--with a more comprehensive solution.
    Other DHS components share border security responsibilities and are 
necessarily part of a comprehensive solution to border and immigration 
control. For example, the US-VISIT Program is responsible for 
developing and fielding DHS' entry-exit system. It also coordinates the 
integration of two fingerprint systems: DHS' Automated Biometric 
Identification System and the Federal Bureau of Investigation's 
Integrated Automated Fingerprint Identification System. Border security 
also depends on information about terrorists kept on various watch 
lists, which are managed by several federal agencies. Those agencies 
and DHS need to coordinate access to the lists to ensure valuable 
information flows to field personnel on the line.

Observations about the SBInet Major Acquisition
    The SBInet program is intended to gain operational control of the 
nation's borders through improved use of technology, infrastructure, 
and personnel. While SBInet is a new major acquisition program, it 
replaces two previous efforts to gain control of the borders: the 
Integrated Surveillance Intelligence System (ISIS) and the America's 
Shield Initiative (ASI). The department's performance-based acquisition 
strategy was to solicit solutions from industry and select a systems 
integrator to develop solutions to manage, control, and secure the 
borders using a mix of proven, current and future technology, 
infrastructure, personnel, response capability, and processes.
    The department awarded the SBInet contract to the Boeing Company in 
September 2006. The department awarded an indefinite delivery, 
indefinite quantity contract, leaving the work tasks and deliverables 
largely undefined until the government negotiates a specific delivery 
task order. The contract base period is three years with three 
1year options. The initially awarded task is for Boeing to 
provide and integrate equipment to achieve operational control of a 
segment of the border near Tucson, Arizona, by June 07.
    While the department has recently taken steps to establish adequate 
oversight of this contract, we see risks similar to those occurring in 
other DHS acquisitions where contract management and oversight has 
failed. Prior to award of the SBInet contract, the department had not 
laid the foundation to oversee and assess contractor performance and 
control costs and schedule of this major investment.
    Management and Oversight Capacity. The department's acquisition 
management capacity lacked the appropriate work force, business 
processes, and management controls for planning and executing a new 
start major acquisition program such as SBInet. Without a pre-existing 
professional acquisition workforce, CBP had to create staffing plans, 
locate workspace, and establish business processes, while 
simultaneously initiating one of the largest acquisition programs in 
the department. At the time of the contract award, the organizational 
structure was in flux and key positions were still being identified and 
filled.
    Only recently has the department performed the work breakdown 
analysis needed to define and stabilize the SBInet organizational 
structure and restructure the organization to reflect this analysis. 
The emerging organization proposed 252 positions; however, it is 
unclear whether that organization will be up to the challenges ahead. 
Staffing the SBInet program office has been and continues to be a 
critical problem for the department. We identified other specific 
management oversight risks at the time the award:
         Whether organizational roles and functions will be 
        assigned appropriately for employees and contractors? While 
        contractors are appropriate for support services, only federal 
        employees should perform inherently governmental functions.\3\ 
        The emerging organizational structure identified 65% of the 252 
        positions as contractors. This appears excessive for the 
        management control environment that will be needed for such a 
        large, complex acquisition.
---------------------------------------------------------------------------
    \3\ OMB Policy Letter 92-1 and Circular A-76 describe inherently 
governmental functions as those so intimately related to the public 
interest as to mandate performance by government employees.
---------------------------------------------------------------------------
         Whether the staff will have the appropriate 
        qualifications and necessary training in acquisition 
        management, as well as the right skill mix? A question remains 
        whether the emerging organizational structure will adequately 
        provide for the use of integrated product teams, as required by 
        OMB capital budgeting regulations.\4\
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    \4\ OMB Circular A-11 requires use of Integrated Product Teams 
(IPTs). IPTs bring a variety of functional disciplines to the task, 
ensuring full consideration of perspectives in making program 
decisions, so that the potential impacts are identified and trade-offs 
understood. At issue for SBInet is whether the appropriate mix of 
technical and business disciplines, such as engineers, logisticians, 
contracting officers, and cost analysts will be available to staff the 
IPTs.
---------------------------------------------------------------------------
    How workforce turnover and fluctuations will be managed? As a 
stopgap measure, CBP is detailing agents and other staff on temporary 
assignment to identify and perform tasks they are not experienced or 
trained for. The program office has no clear plan for replacing the 
detailees and transferring their institutional knowledge. Without 
turnover procedures and documentation of decisions and deliberations, 
new personnel will be at a disadvantage in managing implementation.
    Additionally, the investment review processes required by 
department directive \5\ were bypassed and key decisions about the 
scope of the program and the acquisition strategy were made without the 
prescribed review and analysis or transparency. The department has 
since announced plans to complete these reviews. The department's 
Investment Review Board and Joint Requirements Council provide for 
deliberative processes to obtain the counsel of functional 
stakeholders. To ensure the program is on the right track, and to 
bolster support for revising its FY 2008 budget estimates, CBP intends 
to present program plans and the appropriate program documentation for 
Joint Requirements Council review within 60 days of award and the 
Investment Review Board within 90 days.
---------------------------------------------------------------------------
    \5\ DHS Management Directive 1400
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    Operational Requirements. Until the department fully defines, 
validates, and stabilizes the operational requirements underlying the 
SBInet program, the program's objectives are at risk and effective cost 
and schedule control are precluded.
    The department deferred fully defining operational requirements 
until after award of the systems integration contract. In selecting the 
systems integrator, the department used a broad statement of objectives 
as part of its acquisition strategy in order to allow industry to be 
creative in its solutions and, consequently, deferred setting contract 
requirements, including performance metrics, until delivery task order 
negotiations.
    While the SBInet broad statement of objectives is an appropriate 
algorithm \6\ for encouraging the systems engineering desired, success 
in accomplishing this macro algorithm cannot be practically measured. 
By not setting measurable performance goals and thresholds, the 
government was at increased risk that offerors would rely on unproven 
technologies and high-risk technical solutions that would delay 
implementation or be unaffordable.
---------------------------------------------------------------------------
    \6\ The macro algorithm is to ``detect entries, identify and 
classify, respond, resolve.'' The SBInet system is to detect entries 
when they occur; identify what the entry is; classify its level of 
threat (who are they, what are they doing, how many, etc.); effectively 
and efficiently respond to the entry; and bring the situation to the 
appropriate law enforcement resolution (apprehension, interdiction, 
transport to interdiction processing point, etc.).
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    To mitigate this risk, the solicitation asked for solutions that 
used commercial-off-the-shelf and government-off-the-shelf solutions, 
even as the department publicly encouraged use of high-risk, 
developmental items, such as unmanned aerial vehicles. Also, the 
department required submission of quality assurance plans as part of 
the proposals to mitigate this risk. However, it remains to be seen 
whether the contractor's quality assurance plan will satisfy the 
department's needs or whether the department's criteria for gauging 
program success is sufficient to evaluate the contractor's performance. 
To control this risk, the department needs to refine, validate, and set 
stable operational requirements for SBInet, enabling the program office 
to define and set contract requirements in task order negotiations, 
including the performance metrics needed to ensure accomplishment of 
the program's objectives.
    The department also needs to define and document the underlying 
operational requirements, i.e., translating mission needs, describing 
shortcomings with the status quo systems and tactics, setting 
thresholds and objectives for key performance parameters including 
affordability, and prioritizing among competing needs and conflicting 
goals. Without operational requirements, the department will not have a 
common understanding of what it is to accomplish, and program managers 
will not have the guidelines needed to balance competing objectives in 
cost, schedule, and performance objectives through the life of the 
program. Furthermore, until operational requirements are fully defined 
and validated, providing firm support and validated assumptions for the 
program's cost estimates, the credibility of budget estimates is 
undermined.
    The department took steps during the competition for the systems 
integration contract to compensate for the lack of fully defined, 
validated, stabilized, and documented requirements. While the 
participating DHS and CBP officials had a strong sense of the 
underlying operational requirements they expected the SBInet program to 
fulfill, such an understanding was not reduced to writing and conveyed 
to others. However, the department provided industry with a library of 
documents and videos that describe mission goals, current operations, 
and desired improvements over current operations. Also, the department 
conducted an extensive ``due diligence'' process and held oral 
presentations and question and answer sessions with the competitors to 
exchange information. Additionally, the department developed a 
structure to frame analysis of the offerors' approaches. The department 
then modified the solicitation, requiring offers to be mapped to this 
structure; thereby clarifying proposed approaches, assumptions, and 
costs and facilitating comparisons. Eventually, this work break down 
analysis should facilitate comparison of the winning industry approach 
to the validated operational requirements.
    However, until the operational requirements are validated and 
stabilized, the SBInet program will be vulnerable to changing 
direction. Changing the program's direction will likely require 
contract changes and equitable adjustments, rework of the contractor's 
planning, management, and systems engineering efforts, and add cost and 
delay.
    With firm requirements, the program office can and should move 
quickly to implement a performance management processes. A deferred, 
but critical, first step in establishing control of cost, schedule, and 
performance is the setting of an ``acquisition program baseline.'' This 
baseline of performance and schedule requirements and total cost 
estimates is needed to monitor the health of the program. The absence 
of an acquisition program baseline is a significant risk to the success 
of the SBInet program. The department deferred setting a baseline until 
after contract award because of the uncertainties related to industry 
solutions. Without an acquisition program baseline, however, it is 
impossible to gauge the effectiveness of the program. An acquisition 
program baseline is a necessary first step in implementing an ``earned 
value management.'' The department plans to rectify this omission 
through the Investment Review Board and Joint Requirements Council 
review and approval process.
    ``Earned value management'' is a comprehensive management 
information and analysis system, fed by cost accounting data arrayed 
against work break down structures and program schedules. It is 
essential to the department's understanding of the program status, the 
contractor's performance, and reliability of program budgets and cost 
estimates. The program manager must know at all times how the actual 
cost of the work performed compares to the budgeted cost of the work 
scheduled. Automated analyses of this data across the many tasks and 
activities being undertaken by all personnel working on the program 
should focus management attention where needed and trigger early 
corrective action. ``Earned value management'' is not only a best 
practice; it is an OMB capital budgeting requirement.
    The department included provisions for ``earned value management'' 
in the solicitation and the program office is developing plans to start 
and implement the process. However, to date the system is not in place 
and, until it is put in place, the department does not have a sound 
basis for its program cost estimates. Early, effective ``earned value 
management'' implementation will be key to understanding the impact 
that changes will have on the program, including trade-offs needed to 
balance progress across the many components of the program.
    In conclusion, the department's mission will continue to require 
rapid deployment of new equipment, technology, and processes. These 
efforts will frequently entail procurements with ambitious cost, 
schedule, and performance goals. For this reason acquisition management 
will continue to be a priority for my office and an area where we plan 
to focus considerable resources. We will examine crosscutting 
acquisition issues, in addition to individual programs, such as SBInet 
and Deepwater. For example, during the upcoming fiscal year we intend 
review DHS use of sole source contracts and the training and 
qualifications of its acquisition workforce.
    Mr. Chairman, this concludes my prepared remarks. I would be happy 
to answer any questions that you or the Subcommittee Members may have.

    Mr. Rogers. I would like to start off with questions. I had 
a different path that I was going to immediately pursue, but 
you raised a lot of concerns in your statement. What I would 
like to do is start with Greg and ask you to address some of 
those concerns that were just outlined by Mr. Skinner, 
particularly about the readiness to take on this SBInet 
contract any time in the immediate future and how can you calm 
fears that he just raised.
    Mr. Giddens. Yes, sir. The issues that the IG just raised 
are ones that we are completely in agreement with, and I will 
try to run them down in order.
    The first one, I believe, was staffing, and we are, based 
on our 2007 appropriation, behind on our staffing. We were 
right on track to be staffed to what was in the President's 
budget for 2007, and that was what we were planning. The 2007 
appropriation was a significant increase over the President's 
budget, and as soon as that was passed, then we went back and 
did a different organizational structure and staffing plan. So 
if we were here with what was in the President's budget or 
something relatively close to that, we would be right on target 
for staffing. But with that significant increase in 2007, we 
are behind, but we also are measuring our execution of the 
contract based on our ability to measure it.
    Mr. Rogers. I am sorry. Give us a time line, then, if you 
could. How do you envision your capability evolving as you 
begin to start up this process? When do you think you will be 
able to start moving the ball down the field with the staffing?
    Mr. Giddens. We are actually--right now we have over 100 
people on board right now.
    Mr. Rogers. Where is your time line for the whole program? 
When do you expect to have SBInet implemented and completed?
    Mr. Giddens. Fully staffed?
    Mr. Rogers. I am talking about this new contract. SBInet, 
when do you have--you have to have some horizon out there when 
you say we are going to have completed this project, by 2009, 
2010. When?
    Mr. Giddens. We have not got to the point to lay out the 
end state in terms of timing. We are working that issue within 
the administration, looking at the budget implications of that, 
because currently one of the drivers of that would be the 
appropriated funds that we would have to account against this 
program.
    Mr. Rogers. Let me ask this: When do you expect to have the 
full staffing you will need to implement the program that you 
have described and allay the fears raised by Mr. Skinner?
    Mr. Giddens. On the staffing, we will have that done by 
summer.
    Mr. Rogers. By this summer.
    Mr. Giddens. But we will do that in progress; as we build 
staffing, we will build execution task orders.
    Mr. Rogers. I raise that because the time line has not only 
been a concern, but we have been concerned all along about the 
cost of this program. It has been our feeling that we haven't 
been able to get any kind of a handle first on what SBInet was 
going to be, when it was going to be bid, how it was going to 
be comprised, and definitely no ballpark in the cost area. 
There were some news reports early about the time SBInet was 
bid, that we were looking at maybe two to $5 billion. But now 
we learn from this, the IG's report, that they are talking 
between two and eight and $30 billion for this program.
    First of all, what is your cost estimate on SBInet?
    Mr. Giddens. We do not have a cost estimate published. That 
is one of the issues that we are working through, and there are 
two reports that are due in December to the Congress. And one 
of the concerns that we have is--we lay that out--is the 
dynamics of the environment.
    For example, one of the sectors that was a focus of the 
source selection was the Tucson sector. We gain control there, 
the dynamics of the smugglers are going to change, and we 
believe there are currently areas now that don't have much 
traffic that, as we gain control in those areas, they are going 
to be more prominent.
    Mr. Rogers. At what point do you think you are going to be 
able to talk about cost estimates with us? And keep in mind how 
we framed the beginning of this hearing and how we framed them 
all. We are not going to forget ISIS. What turned--what went 
from a $2 million pilot project went to a quarter-billion-
dollar disaster of a management project. We want to know that 
you are looking at real dollars, real estimates, and we want to 
know that you are looking at gaining the fiscal feasibility of 
this initiative. These are two big ballparks. Early estimates 
of two--to five--; now we are talking about eight--to 30 
billion. What ballpark are we in?
    Mr. Giddens. Sir, I wish I could answer that with better 
clarity. I think you will see in the December report how we 
would apply that billion dollars and what the results and the 
performance of that would be, and that would give, I think, a 
good indication of what the future would portend, because in 
that report with detail we would be laying out that billion 
dollars, what it would be spent for, and what you should expect 
to see in terms of performance, and when you should expect to 
see that. So I think that--I think that will be the next cut 
that will give you a better sense of granularity on the dollars 
and what you would expect to see in terms of performance.
    Mr. Rogers. I think you are going to see us get to a lot 
higher comfort level once we start seeing a roadmap of where we 
are going in terms of how it is going to look with more 
clarity, but also some cost estimates on what you anticipate, 
because right now this is still too cloudy for comfort.
    And with that, my time has expired, and I recognize the 
Ranking Member, Mr. Meek, for any questions he may have.
    Mr. Meek. Thank you, Mr. Chairman. And in the spirit of 
your questions, these are the burning questions; that is the 
reason why we continue to have these hearings.
    Ms. Spero, I don't know if you have anything to add. You 
heard the line of questioning. Do you have any time lines or 
when we are going to make progress?
    Ms. Spero. I don't have anything specific to add other than 
we are working very closely with Greg and his office to develop 
the kind of information we know you want and that we want also. 
I think you will see a lot more clarity in our report to 
Congress that will be submitted in early December that will 
give you and all of us a better sense of this--of how we intend 
to map out the future with securing the borders.
    Mr. Meek. I notice--and I was reading here your opening 
statement. I know that you abbreviated it, but in the back here 
on page 5, you talked about in conjunction with the OIG 
recommendations, CBP is pursuing improvements in the following 
areas to strengthen the government program management and 
contractor oversight: defining program management and 
structure, providing appropriate staffing and human capital, 
enhancing definition of operational requirements, and measuring 
contractor performance.
    You feel good about all of that today in those areas.
    Mr. Giddens. Yes, sir.
    Mr. Meek. Okay. I just want to make sure, because I am 
asking the obvious, that you should be able to say yes or no, 
because if that is not happening, if it is something that you 
need--because I know that many times in the Department we have 
had--and we have been through this with Ms. Duke and Mr. 
Skinner, and Mr. Skinner knows that I am one of the main 
people, if you don't have it, we want to know, because it is 
cheaper for us to know versus us hearing about it after the 
money is spent and no performance. So if you feel comfortable 
with it, and that is what you want to stick with, but if you 
change your mind any time, feel free to let us know because I 
think it is important for us.
    We have all of these hearings and all of this oversight and 
all this committee time and all of our staff time preparing, 
and to come to the Hill and we still have big fumbles, that is 
going to be a problem.
    Mr. Skinner, I wanted to ask you a question, sir, because I 
know that you--you have been really working on this. How--I 
know this is off subject, but your team is still doing some of 
the Katrina stuff. Are you using best practices as it relates 
to Hurricane Katrina, some of the money that was wasted in that 
area, some of the contracts that weren't executed the way they 
should have been executed especially along the no-bid area; are 
you applying some of that? Because we are going to have the 
folks in the next panel that are actually going to execute 
this, or the people that were given the opportunity to do so. 
Are you applying some of the things that maybe your team has 
seen with Hurricane Katrina towards oversight as we look at 
executing this contract?
    Mr. Skinner. Yes. And like I said, we have developed what--
I referred to these as specialty teams, and we have one dealing 
with nothing but Katrina operations, and we have one dealing 
with nothing but SBInet initiatives, and we have one dealing 
with nothing but the Coast Guard initiatives.
    And we are using--the techniques we are using is we are 
working hand in hand with the procurement officers, the program 
officers, and the integrated project teams that are responsible 
for those procurements, and we are not waiting. Unlike what we 
did in Katrina, the contracts went out the door the first week, 
2 weeks. Here we have an opportunity to be working with the 
program offices and the contract offices before the contract 
went out the door.
    So we are working hand in hand with them, providing them, 
for example, our first advisory report that is only the first 
in a series of reports that we will be issuing so that we can 
provide our perspective, our insights and our concerns on an 
ongoing basis throughout not only the procurement phase, the 
solicitation phase, the award phase, but also the execution 
phase.
    Right now we are looking at the task orders, the two tasks 
that have been awarded under SBInet for the pilot project in 
Tucson as well as the management tasking order that was awarded 
last month. So we are doing that for both Deepwater, we are 
doing that for SBInet.
    And Katrina, there we are trying to catch up because there, 
all of the contracts went out the door, and the money went out 
the door, most of it. So what we are doing there is an 
assessment of what contracts we have, and we are going through 
each and every one of those that are high risk. That is sole-
source time and material and limited competition, looking for 
areas where there could have been waste, fraud, and abuse, and, 
of course, as you know, we are finding some of that as we go 
through each of those contracts. And that will take us some 
time to do that over the--we have been working on it this past 
year, and we will be working on it for the next year to 2 years 
before we get a full picture.
    Mr. Meek. Mr. Skinner, are you pleased with the response 
you are get from the Department on the obvious--or 
recommendations that your people are finding? Are you all 
working together better now than you have in the past; the 
response from the Department in trying to resolve some of these 
issues before we get into the area of embarrassment?
    Mr. Skinner. Absolutely, and I am very satisfied with the 
responses we are receiving from the Department, from CBP, and 
from the procurement office and from the SBInet program office. 
The cooperation could not be better. The issues that we have 
pointed out in our advisory letter, these are issues that they 
are currently working on.
    One of the things we have cautioned the Department about is 
we need to proceed with caution until we can develop an 
acquisition program, a baseline as to what the big picture is 
going to look like. If we are going to be putting together 
tasking pieces of the picture, we have to know what the big 
picture is going to be. We have to know what type of financial 
commitment to get these things done. We can't secure one part 
of the border and leave our ports unsecured. And yes, we expect 
to get program management plans, program plans, systems 
engineering plans, and as well as a performance plan with 
measures as to when we can expect to get these documents so 
that we could evaluate them and so we can move on.
    Mr. Meek. Thank you so very much.
    And, Mr. Chairman, thank you for the latitude. I yield 
back.
    Mr. Rogers. The Chair now recognizes Mr. Souder for any 
questions he may have.
    Mr. Souder. I have some, yes, and I have a bigger one that 
I am going to get diverted to, but I want to make this brief 
point.
    If there is a real fence to keep people from getting to a 
vanishing point, a real fence will slow them down. I spent a 
lot of time on both the north and south border, and I know we 
have to have a strategy. I was glad to hear Mr. Giddens say we 
are not going to replace people because we don't begin to have 
enough people now even if we had a hard fence because they are 
still going to come over, but it is going to slow them down 
more. So we have to have some kind of combination between a 
hard fence and electronic fencing and virtual fencing.
    And I hope the administration agrees that the hard fence, 
the 700 miles, is absolutely essential, and then the hilly 
areas and other more open areas are another challenge because I 
don't know that we can hard-fence the entire border.
    But I am baffled here. I saw Mr. Giddens' presentation with 
all of this equipment, and I have seen pieces of all of these 
variations of things as I have been up and down the border, but 
did I hear you say that you don't have a cost estimate, and it 
could be between 2--and $30 billion, you are not sure which? 
How in the world did Boeing make a bid? How do you do a 
contract, show us all of these things that you are going to do 
on the border? I understand if you do this at Nogales, they are 
going to move over to here. We know that. How does somebody 
bid, and how do you choose a contractor without having any idea 
of the price range? They don't even know if they can implement 
this.
    Mr. Giddens. Sir, the way that we conducted the competition 
was to ask for several things from all of the competitors. One 
was the concept of how they would proceed in securing the 
border.
    Mr. Souder. If funds were unlimited, was that the proposal?
    Mr. Giddens. We did not put a funding constraint on it 
through this solicitation process.
    Mr. Souder. So it was a pie in the sky, give us your best 
shot, if you have whatever unlimited amounts of money, what 
would you do to seal the border?
    Mr. Giddens. We also asked them not just their CONOPS, but 
also in particular what would they do for the Tucson sector, 
and that was a cost proposal with all of the bases of estimates 
in that. And also what would they do for an 8-month, $20 
million project that again was very specifically detailed and 
priced in their proposal.
    Mr. Souder. So that's what you were saying; if you 
extrapolated that, that would give you some idea of the total 
cost for the south border?
    Mr. Giddens. I would hesitate to do the extrapolation on 
that 28-mile area because there is a 28-mile stretch, and its 
relationship to the southern border of almost 2,000 miles is 
one I would not make today.
    But in the upcoming plan we have delivered, that we will be 
delivering in December, does talk about a broader array of how 
we would roll this out, particularly initially, focusing on the 
southwest border.
    Mr. Souder. So they bid on a contract and gave you a 
concept for two sectors, but didn't, for example, give you the 
mountain sector in either California, in New Mexico, the 
eastern part of Arizona.
    I am still curious. We don't do this in any kind of 
contracting governance, do we, where we say, give us a pie-in-
the-sky estimate, and pick the contractor within--without a 
fixed budget of any type? This is what I am struggling with, 
because theoretically somebody could come up with something 
that was totally unachievable.
    Mr. Giddens. That is why we ask for specific pricing on 
those two task orders.
    I guess I would be hesitant to speak so to overall 
procurements; I don't know if Ms. Duke wants to add anything.
    Mr. Souder. But, Mr. Skinner, Inspector General, you tend 
to be retroactive afterwards, but wouldn't this be one sign 
that could potentially lead to problems? Do you know of other 
cases where we have bids and bids selected without even any 
price range?
    Mr. Skinner. No. But those were--you see that type of 
activity--those are the types of contracts that are going to 
get us in trouble down the road. You are going to see cost 
overruns, you are going to see schedules not being met, you are 
going to see possibly even services and goods that are going to 
be delivered that are not going to actually work. That is why 
it is essential that we develop a basic--a baseline, an 
acquisition baseline plan, and that we have clearly defined 
operational requirements.
    And who is going to be involved here? Who are we going to 
be leveraging off of? Are we going to be using other DOD 
communication systems? Is it going to cost us? Are we going to 
be building our own and pay for them? These are the types of 
questions we are asking. That is why we are asking the 
Department to move slowly until you can make--define what your 
requirements are, you can define what your acquisition baseline 
is.
    Mr. Souder. Mr. Chairman, I know you share this concern, 
because this is how you run into problems at the Capitol 
Visitors Center. Because it is changing specs is what gives 
cost overruns; it is true in home building, it is true in any 
kind of corporation.
    But this was unusual because we are not changing specs, we 
don't have the specs. And I am not arguing with Boeing, I am 
not arguing that this is difficult and the numbers and so on, 
but it just seems extraordinary to me. I am baffled.
    Mr. Rogers. You are not the only one in this room.
    The Chair now recognizes the gentleman from Mississippi for 
any questions he may have.
    Mr. Thompson. Thank you very much, Mr. Chairman. I actually 
want to agree with everything that has been asked so far.
    Mr. Giddens, can you tell me why the Department moved with 
this procurement, not having a plan or a strategy for border 
security?
    Mr. Giddens. The purpose of this procurement was to, as we 
have focused on the border, provide that type of framework and 
that solution for securing the border. So we laid out an 
approach that is a performance-based approach with the stated 
objectives that Mr. Skinner had already referenced, and that is 
what we laid out as our requirements.
    So we did have our requirements spelled out in the 
solicitation, and that is what the industry bid to. We were 
careful not to tell them what the solution was, but to tell 
them what our requirements were; and then industry had to bid 
back for that and provide very detailed proposals for the 
overall Tucson Sector, including their cost schedule and 
performance, and also for the $20 million, 8-month effort, and 
that is a subset of the Tucson Sector.
    Mr. Thompson. How do you propose to maintain control of the 
cost to this contract with this kind of procurement?
    Mr. Giddens. As each one of the task orders is awarded, 
they will have their own cost scheduling performance that will 
be negotiated, as Ms. Duke alluded to, before that task order 
is awarded.
    Mr. Thompson. Mr. Skinner, do you agree with that approach?
    Mr. Skinner. By taking it task by task, that is a caution. 
That is probably the most prudent way to go at this point in 
time. But even then, you still need to know what the big 
picture is going to look like.
    You need to know what the life cycle of the project is 
going to cost you. You need to know when these taskings will be 
put in place, when is the end date for us to assume ownership 
of the project. That is what is missing right now.
    It is my understanding that is what is being worked on 
right now. It is my understanding that is something that 
sometime after the pilot project is complete the Department 
will be in a better position than to come in with a--to better 
define their operational requirements, develop an acquisition 
program plan, as well as performance plans and plans to 
measure--or judge the contractors to see what the progress is 
going to be like.
    I think we are several months out before they are going to 
be able to do that for us, and until that is done, we need to 
be very, very careful how we proceed.
    Mr. Thompson. Well--and I am not certain whether Ms. Spero 
or Mr. Giddens can answer. The information that we are supposed 
to have about the strategic plan, can you tell me exactly where 
the plan is at this moment?
    Mr. Giddens. Exactly where it is?
    Mr. Thompson. We are supposed to have it in December?
    Mr. Giddens. Yes, sir, the 4th of December.
    Mr. Thompson. Okay. We should have had it the 4th of 
December. When can we expect it?
    Mr. Giddens. Sir, we are still on track, we believe, to 
deliver that on 4 December.
    Mr. Thompson. Oh, I am sorry, I thought you said November. 
Well, it was supposed to be in November, but now you have 
pushed it back a month.
    Mr. Giddens. Sir, I think the latest data requirement 
started off as 4 December.
    Mr. Thompson. So we can expect--I won't quibble over that. 
So we can have it?
    Mr. Giddens. Yes, sir.
    Mr. Thompson. I take that back, I do want to quibble.
    According to the legislation, it said November 1, but that 
is--Mr. Chairman, I thought it said November.
    Mr. Giddens. Sir, I believe the actual legislation that 
passed did indicate in December, but--we would be happy to take 
that for the record, but I believe that the actual--
    Mr. Thompson. Okay.
    Well, Mr. Chairman, let's just say that procurement 
continues to be a problem. It is important that this committee 
not shirk its responsibility both in oversight and 
investigations, as well as management integration; and I would 
encourage us to do that. Most of us can't really explain the 
procurement, as Members of Congress, and it continues to show 
that we need some other work.
    If I might, one other question, Mr. Chairman, if you 
indulge me.
    Ms. Duke, can you give or provide me the mechanism by which 
small and minority business participation will be monitored 
with this contract?
    Ms. Duke. Yes. Boeing did submit a subcontracting plan, 
which I know you have reviewed. The way we are going to 
moderate--we have had discussions before that just doing the 
reporting and filing it in a folder is not enough, so we are 
doing a couple things: One, we are using the Defense Contract 
Management Agency, who does contract administration and 
specializes in subcontracting and has in-plant representatives 
at Boeing to actually do a review of Boeing's subcontracting 
system.
    The review consists of looking at, is it a good system; and 
also doing compliance checks, meaning validating data and 
ensuring whether or not they are actually performing as 
reported. And that will be done in the first quarter of the 
calendar year to set a baseline. We will decide whether we will 
do annual reviews of the whole system after that, but we are 
doing the first baseline review in the first quarter of the 
calendar year.
    Additionally, we are going to have regular business 
meetings. Greg's office has the regular program reviews, but 
there are definitely operational issues, so we are going to 
have regular business meetings to talk about small business and 
other types of management administrative issues with Boeing on 
a regular basis. They have designated a single point of contact 
for us. And so we are going to get their reporting on both the 
single contract and all their business with DHS, and just 
really do an aggressive monitoring of this in partnership with 
DCMA.
    Mr. Thompson. Thank you.
    I yield back, Mr. Chairman.
    Mr. Rogers. I thank the gentleman.
    Obviously, we have a lot of questions and concerns. We just 
want to make sure this thing comes off right. We don't want 
another ISIS on our hands.
    As this Subcommittee has demonstrated over the last two 
years, we are not turning loose of this. And this gavel is 
going to go to my colleague after the first of the year, and he 
has already made it clear he intends to continue to pursue 
this. And I am going to still be on this Subcommittee, and we 
are going to be staying after this to make sure it doesn't get 
away from us.
    And what we are going to want to know is exactly what do 
you want to do, over what timeline, and what do you estimate it 
is going to cost. Those are just three clear, simple questions 
that we are looking for you all to help us get our arms around 
sometime in the not too distant future. We are not going to 
allow this to rock along unchecked, particularly given that we 
have put so much time into preparing for this, and we have had 
the flags raised by Mr. Skinner's comments.
    Mr. Skinner, before I get to you, I want to go back to--Ms. 
Duke talked earlier about your staffing. Do you feel like you 
are fully staffed now? I know you have talked in the past about 
your staffing concerns and that you are working toward 
resolving that. Where are you in that effort? And as you hear 
us talk about the challenges we are going to be facing with 
trying to meet these new demands, are you there, are you going 
to be staffed for it?
    Ms. Duke. In my personal office, we got an additional 25 
positions within the fiscal year 2007 budget, so it went up 
from 45. We got 25, it was a huge increase. We filled six of 
those positions in those first 6 weeks. And we are using all 
those positions for oversight of procurement and oversight of 
program management. And then a few of them are being used to 
build the acquisition workforce, we are dedicating some to 
build the skill sets of program management and contracting in 
the Department. So I think in my office we are in good shape.
    Unfortunately, in the eight buying offices--we have got a 
generous plus-up in the 2007 budget; we got about 350 new 
positions Department-wide in the eight contracting offices. Our 
acquisition program continues to grow. We grew about 37 percent 
from 2004 to 2005, it appears we grew about another billion and 
a half to two billion from 2005 to 2006.
    So we do continue to struggle. But so far the President's 
budget has given us a huge increase, and we are staffing to 
fill those positions, those 300-plus positions, in the 
Department. But that is a challenge, and it is not only for the 
contracting positions, it is for the program management 
positions like Greg's.
    Mr. Rogers. Tell me, as you look over the horizon at the 
demands that you face, do you have a high level of confidence 
that you are going to have the staffing you need when you need 
it to meet those challenges, or not?
    Ms. Duke. I am cautiously optimistic. We have a great 
interim program. We are building the resources; they are not 
out there and they don't exist, so we have to grow them 
ourselves. I have been able to recruit some great people from 
my--I can't talk to any of my old colleagues at Defense.
    So we are really working on it, but to hire 300 people in 
this marketplace is very difficult.
    Mr. Rogers. All right.
    Mr. Skinner, same question. When you look out over--you 
talked earlier about the personnel to implement the monitoring 
that you intend to have to implement. Do you have that 
personnel now? If not, do you anticipate being able to have the 
personnel to meet the new challenges that you are going to face 
with the growth of activity?
    Mr. Skinner. No, currently, I do not have it. But we do 
have a very aggressive recruiting program in place, and we 
anticipate by this summer that we will be able to staff up to 
provide the oversight that we think is necessary. Because, like 
I said earlier, procurement is just huge in the Department, and 
it is going to continue to be a big cost item in the 
Department, and it requires constant oversight.
    We have pretty well staffed up with our specialty teams. We 
have team leaders that can address the Coast Guard Deep Water 
Project; we have team leaders and staff to address the SBInet 
operations.
    We are still shy in--although we just recently hired a 
director, we still need additional resources to provide the 
oversight of the FEMA contracting initiatives as a result--in 
the Gulf Coast region, as well as any future disasters that may 
occur. And we are still very lightweight here at headquarters 
to provide oversight over the cross-cutting issues, although we 
hired a very--an excellent director to lead that operation. She 
is operating with a skeleton staff right now.
    Mr. Rogers. Well, I would have guessed--I would have asked 
you to characterize it the same way I did Ms. Duke. I asked if 
her level of confidence was high that she would have the 
personnel level when she needed them. She didn't quite want to 
go there, but you sound like you have a higher degree of 
confidence that you are going to have the personnel by the time 
you need them.
    Mr. Skinner. If I relay that message, let me rephrase.
    Mr. Rogers. We have got a bunch of cautiously optimistic 
people in this room.
    Mr. Skinner. There is no magic number of what you are 
really going to need. And right now what I have done is--I had 
to hire these people, and to bring these people on board, I had 
to take cuts in other areas of our operation. So we are 
suffering in other areas as a result of this.
    Mr. Rogers. Well, just understand, cautious optimism is not 
what we are looking for. We want confidence that you are going 
to be able to do it. And if you don't have what you need, then 
we need to hear that you don't have it and exactly what you 
want from us so that we, the Congress, can provide it to you.
    And I do want to--before I get away, because I want to ask 
another round of questions, I wanted to stay with Mr. Skinner 
just a minute. I want to talk about those cost estimates.
    You have heard the responses here. You all came up with 
this $8 to $30 billion figure. Did I hear you make some remarks 
a little while ago that you felt like it was going to be 
several months before we realistically could expect to come up 
with some numbers? So are you comfortable this is not starting 
to get away from us?
    Mr. Skinner. At this point in time, I am very comfortable 
that it is not getting away with us. I know the Department is 
proceeding with caution here. We only have one tasking in 
Tucson. From there, I anticipate that they will learn a lot as 
to what systems work and don't work, and from there they can 
probably make better estimates.
    As far as the 8 to 30 million, again, those were just 
figures that we picked up from industry specialists and 
forecasters, as well as industry rags or newsletters based on 
what they knew about an initiative like this. Our frustration 
right now is that we don't know what it is going to cost.
    Mr. Rogers. Because we don't know what it is going to be.
    Mr. Skinner. Yes. We just don't know what the big picture 
looks like right now.
    Mr. Rogers. So these numbers are meaningless right now.
    Mr. Skinner. Yes.
    Mr. Rogers. Thank you.
    And I now recognize my friend and colleague from Florida, 
Mr. Meek, for any additional questions he may have.
    Mr. Meek. Thank you, Mr. Chairman. And it seems like the 
questions are repetitive along the lines of if you have what 
you need, so I am going to be very brief.
    I take it that you know fully--I am talking to the 
Department--what you all are going to do within the time frame 
that you are going to do it, but you just don't know how much 
it is going to cost and what the time frame is that is going to 
be met. Am I correct in asking that question?
    Mr. Giddens. When you include in that the ``when'' for 
particularly the 2007 funding; that is the detail to be laid 
out in the report to be delivered in December.
    Mr. Meek. The one that is forthcoming?
    Mr. Giddens. Yes, sir.
    Mr. Meek. Okay.
    Mr. Chairman, I am of the belief, speaking with the ranking 
member, we are just going to continue to do the things that we 
have to do. And I was explaining to him--I mean, what we are 
doing right now, because we have to, it is just that simple.
    When I used to be a State trooper, we had intersections 
where it was once a yield sign, and then it turned into a stop 
sign and then it turned into a traffic light because of 
fatalities at that intersection. The fatality in this case, or 
the unfortunate circumstances in this case is that the American 
taxpayers' dollars have been spent unwisely. It is because we 
didn't have a committee that stayed on target, and especially a 
subcommittee that made it their purpose to stay on target.
    I also want to share with you that I think it is very, very 
important that we look at it from the standpoint of the people 
that are carrying out the work. I notice you have quite a few 
contractors that are working on your side of the wall, and that 
concerns me a lot. Not that I am against contracting or 
subcontracting or what have you; and I know that there are 
issues with attrition within the Department, you won't 
necessarily get the Federal award for keeping people, but I 
think that it is important for us to really look at this for 
what it is worth.
    I know Federal employees focus on what happens, especially 
with a lot of these contracts. Because they are in a direct 
line of command under you all's supervision, you can go to the 
contractor and tell them to dismiss someone. But I think as 
many Federal employees as we can get on it that have experience 
in this area, the better.
    Secretary Chertoff sat maybe a couple of chairs--as a 
matter of fact, he was here by himself when he was before the 
committee before we left for the August break. He assured us 
that he is putting his best people on it. I would pretty much 
say, from looking at these numbers, he is putting his best 
contractors on it, and that concerns me. I think that I must 
raise this concern because I don't want to have to read it in a 
report from Ms. Duke or from Mr. Skinner. Because I know when 
it comes to the contractors, it reminds me of Katrina, it 
reminds me of other contracts that have come through this 
committee or that the staff has reviewed and had concerns with. 
So that is kind of a recipe for something not moving as smooth 
as it should.
    So I am saying this so that you can have--both of you can 
have what you need when you go back to the building, and 
hopefully make you the big people around the table--maybe it 
will be a small or big conference table--to say that not only 
does this subcommittee want to see the best team on this 
project, but we want you all to be able to get what you need, 
even all the way down to, Ms. Duke, what you need.
    We have had several meetings together, and they have been--
we have been real with each other and we have said, listen, if 
you need--if there are people, professionals, that you need in 
place, then we need to know about it because if you don't tell 
us and we find that, well, you know, we didn't have what we 
really needed, that reflects bad on you as a professional; and 
I know that the Secretary doesn't want that to happen.
    And, Mr. Skinner, I carried amendments on the floor, and 
some Members said--they thought maybe you were my cousin, but I 
told them it was nothing personal, it was--I told them that you 
are from north Georgia--
    Mr. Skinner. A constituent.
    Mr. Meek. But I told them, looking at the work we do here 
in this committee and looking at the very obvious--the things 
that took place shouldn't have taken place. And oversight is 
very, very important; we want to know about it before we have 
continued major problems.
    My last point, Mr. Chairman--and then if we are going to go 
a third round, I will stand back because I look forward to the 
second panel. I think it is important to make sure that you 
all, all of you there at the table, without even our staff or 
without anyone on this committee asking, just let me say, a 
random act of kindness, how about a random act of information?
    We are saying that we want to make sure that you know 
everything that you need to know. Even if we sent you something 
just yesterday, here is a new development, I think that will 
make us feel better. I think that will also give confidence on 
the larger committee. We are focused on it as a subcommittee, 
but there are members that are not on this subcommittee in full 
committee. It will not only help the Secretary, it will help 
the Department, it will help Members of Congress understand, 
because we are going to have to be the ambassadors.
    Mr. Rogers and I want to be able to walk on the floor, and 
other members of this committee on the floor, when Members ask 
us about what is going on--when it is, you know, above the 
fold, about what happened with the SBInet--I don't want to face 
them by saying, well, the Department, we fell short. We are 
well beyond that now.
    So, again--I have said it 10 times if I have said it once--
I just want to make sure that you all know that we are on your 
side.
    And many times we don't have the opportunity to walk 
through this process. Usually there is some horrific event or 
some political date coming up that we have to do something in a 
drastic way and not have the kind of oversight and not have the 
kind of discussion that we need to have or a hearing that we 
need to have to make sure that we are all on the same page.
    SBInet, I feel that we can't have enough hearings, and I 
feel that we have a great opportunity that we have never had 
before.
    Mr. Chairman, I yield back the balance of my time. And I 
want to thank the panel for their testimony.
    Mr. Rogers. The Chair will now recognize Mr. Souder for any 
additional questions he may have.
    Mr. Souder. Ms. Spero, Mr. Giddens, why, if you don't have 
a budget and you don't have a plan and you are doing it by 
section, didn't you bid the contract by section?
    Mr. Giddens. Because we did the contract in a way that 
gives us the comprehensive ability to work this across the 
border.
    When you say, we don't have a plan, you are correct. I 
don't know what the budget is going to be in fiscal year 2010; 
and the administration is working on what the budget will be in 
2008, so I don't know what that answer will be. And we are 
going through the engineering process to look at what we have 
learned about the Tucson Sector through the source selection, 
and how that will be applied across the border, both the 
southern and the northern, to get to that baseline.
    But at this point to be--less than 2 months after contract 
award, I think this deserves more of a look than what we could 
have done as a cursory to be at this point.
    So we are working hard to be responsive to Congress' call 
for the report in December--
    Mr. Souder. My concern isn't with the contractor; as far as 
I know, they may be the best contractor. It just seems an odd 
way to bid because obviously we need an integrated system, and 
if you had done it by project, that would give them kind of the 
one-up for the next sector because they would be able to 
integrate easier.
    The problem with this is that we don't know that it will 
work. We don't know what their budget will be for that.
    Now, I hesitate, but I understand what you are saying, and 
what is done is done to some degree, but just as a business 
person, I find this hard to swallow right now. So I kind of 
hesitate to ask this next question, but I will anyway.
    Do you have any test case like the Tucson Sector on the 
north border? For example, on the British Columbia border we 
are being flooded with BC Bud; we are being now flooded with 
meth precursors; we are having immigration troubles coming in 
from Asia in the north border, and ISIS trying to deal with 
that internally.
    Knowing you don't have a plan and you don't have a budget, 
but do you have a test that's going on on the north border, 
because they were corrected, correct, for both borders?
    Mr. Giddens. The SBInet contract included scope for the 
northern border, but the current task orders we have on 
contract, the only contract we have for activity on the border 
is on the southwest border in that 28 miles of the Tucson 
Sector.
    During the source selection process, all of the vendors did 
look at the northern border and provided insight on the 
dynamics and the difference between the southern and northern 
border, but we don't have an active task force at this point on 
the northern border.
    Mr. Souder. In the December 4th plan, will it include any 
specifics or a budget for the north border?
    Mr. Giddens. Sir, I am hesitant to speak about the plan 
until we have worked that through the administration and 
deliver that in December.
    Mr. Souder. So 2 weeks out, you are not prepared to say 
that there is going to be anything in the plan on the north 
border?
    Mr. Giddens. I am prepared to say that we are working to be 
responsive to the Congress' request for that report, but I am 
not at a point now, with the report not delivered, to detail 
what it would contain.
    Mr. Souder. But it will have stuff on the south border?
    Mr. Giddens. It will be responsive to the congressional 
request for the report.
    Mr. Souder. When you say ``scope out'' the north border, 
what do you mean by that in the contract bid to Boeing?
    Mr. Giddens. While the solicitation process required the 
vendors to provide a very detailed proposal on the Tucson 
Sector, it also required them to look at the distinctions and 
the differences between the southern border and the northern 
border, and we picked the Swanton Sector as sort of a 
counterpoint to looking at the southern border. So they had to 
look at their solutions and talk about its application, and on 
the northern border, particularly at the Swanton Sector.
    Mr. Souder. So they did have a test, it was Swanton, but it 
wasn't as thorough?
    Mr. Giddens. They did have a test, that did have to look at 
that, and laid out their concept, but they did not do the 
detail proposal, including at all the schedule and the prices 
that they did on the Tucson Sector.
    Mr. Souder. Thank you.
    Mr. Rogers. Thank you. I want you to know we really do 
appreciate the time you all take to prepare for these and to 
come up here and help us. This has been very beneficial to this 
Committee, and I look forward to continuing to work with you in 
the next Congress. And with that, this panel is dismissed.
    The Chair now calls the second panel. And I first would 
like to welcome you all. We appreciate your taking the time to 
be with us and talk over some statements and take some 
questions.
    Mr. Rogers. I would like to start off by recognizing Mr. 
Jerry McElwee, the Vice President of SBInet for Boeing Advanced 
Systems. And first, congratulations. And the floor is yours for 
any statements you would like to offer.
    And I would again remind everybody if you could keep your 
opening statements to five minutes or less, you can put the 
full statement in the record, if you would like to just 
abbreviate it.
    Mr. McElwee.

   STATEMENT OF JERRY McELWEE, ICE PRESIDENT SBInet, BOEING 
                        ADVANCED SYSTEMS

    Mr. McElwee. Mr. Chairman, Ranking Member Meeks, and 
members of the subcommittee, my name is Jerry McElwee, as you 
said. And as the Boeing program manager for the SBInet program, 
I am very pleased to be here today. It is a pleasure to talk 
about our plans and activities on this program.
    With me today are two of the teammates, Brian Seagrave with 
Unysis, who is providing the information technology for the 
SBInet solution, and Tom Miiller with L-3, who is providing 
communications and deployment and, I might add, a vast amount 
of experience from the RVS system that they deployed.
    First, let me say how proud we are at Boeing to have been 
selected to lead this important effort. Our enthusiasm extends 
throughout the entire team. We intend to bring to bear on this 
project the best technology, systems engineering and program 
management practices available today in the industry.
    Under the SBInet contract, we will provide a comprehensive, 
open system solution to the challenge of controlling the 
border. This includes supporting U.S. Customs and Border 
Protection in detention, apprehending and processing people who 
cross our borders illegally, as well as facilitating legitimate 
cross-border travel and commerce.
    The subcommittee asked the question earlier in this panel--
the previous panel, as well as much earlier, how do we know 
this program will be successful when previous efforts have 
fallen short? I think that the answer to the question starts 
with the government's decision to address border security in a 
comprehensive way and utilize the services of a systems 
integrator. This approach is most appropriate for challenges 
that are large, complex and are conducted in a rapidly changing 
environment.
    To this end, we started with the requirement that this 
system had to be focused on helping the Border Patrol agent do 
his or her job as well as they possibly can. We selected a 
number of technologies and designed a system to satisfy the 
needs of these Border Patrol agents in the field. As Mr. 
Giddens referred to, we call this a ``tool kit,'' and its 
purpose is to increase substantially the productivity and 
effectiveness of the agent and, at the same time, enhance his 
or her safety.
    We had one additional issue within Boeing, and that is that 
this is not a standard development contract. So I use the 
analogy of a builder who hires an architect and then builds, in 
this case, 17 solutions for the sectors of our U.S. border. We 
are in contract to do the architecture work, based on our 
proposal, and we are now waiting for the task orders to build 
those 17 unique solutions, tailoring those solutions based on 
the tool kit.
    Of course, all of this is done on a detailed systems 
engineering analysis with the Customs and Border Protection and 
Border Patrol. The components will be selected from the tool 
kit and deployed along the border to provide a common, yet 
tailored, security solution that has been optimized for every 
mile of the southern and northern borders.
    The systems engineering and design approach that Boeing 
uses is a process we have developed over time and with the 
experience gained from many other large and complex projects. 
The first step in this process is a rigorous analysis of the 
SBInet requirements. Complete requirements definition sets the 
foundation for all other work in the system and is critical for 
the ultimate system.
    This is followed by extensive modeling and simulation--Mr. 
Giddens showed you some of the back border calculus that we 
used to test the output of the requirements process--and then a 
wide array of studies to look at potential solutions across the 
full spectrum of border crossing threats.
    This is an abbreviated description of why we are confident 
our solution will work. Now let me describe our approach to 
keeping the program on cost and on schedule.
    Our management approach utilizes Boeing's proven best 
practices to create a transparent governance structure that 
provides unique capabilities and strengths of our team with the 
oversight and knowledge of our government partners. At the 
heart of our system is an Earned Value Management system that 
provides a singular metric of program cost and schedule health 
at all levels of the organization, as well as early warning of 
potential problems and problem resolution.
    As we get beyond Project 28, the initial 28-mile pilot, and 
start other task orders, we envision a substantial expansion of 
our team to increase capacity and bring in new technology. We 
have established a dedicated Web site for SBInet suppliers, and 
have received information from nearly 400 interested companies 
already. We have also initiated our first solicitation through 
that Web site.
    In summary, we are confident we can fulfill the objectives 
of the SBInet program, and I am looking forward very much to 
the challenges ahead, as I am to your questions that I am 
anticipating. Thank you.
    Mr. Rogers. Thank you, Mr. McElwee.
    [The statement of Mr. McElwee follows:]

                 Prepared Statement of Jerry W. McElwee

    Good afternoon, Mr. Chairman, Ranking Member Meeks, and Members of 
the Subcommittee. My name is Jerry I am the Boeing Program Manager for 
the SBInet Program. It is a pleasure to be here to talk about our plans 
and activities on this program. With me today are two of our teammates: 
Brian with Unisys who is providing the information technology for our 
SBInet solution, and Tom Miiller with L-3 who is providing 
communications and deployment. Teammates not with us today are:
         The Centech Group--Training
         DRS Technologies--Program Management, System 
        Engineering, Mobile Towers
         Kollsman--Program Management, System Engineering, 
        System
         Lucent Technologies--Advanced Technologies
         Perot Systems--Program Management, Business Process 
        Change Management
         USIS--Program Management, Border Intelligence 
        Application, Intel Preparation of the Border (IBP)
    First, let me say how proud we are at Boeing to have been selected 
to lead this very important effort. This pride and enthusiasm extends 
throughout our entire team. We intend to bring to bear on this project 
the best technology, systems engineering, and management practices 
available today.
    Under the SBInet, contract, we will provide a comprehensive, open 
system solution to the challenge of controlling the border. This 
includes supporting U.S. Customs and Border Protection in detecting, 
apprehending, and processing people who cross our borders illegally, as 
well as facilitating legitimate cross-border travel and commerce. It 
will also integrate seamlessly with the overall Secure Border 
Initiative discussed by our government customer on the previous panel. 
The architecture we have proposed will allow for continuous improvement 
as new technology comes on the market throughout the deployment.
    The Subcommittee has asked the question, ``How do we know this 
program will be successful when previous efforts have fallen short?''
    I think the answer to this question starts with the government's 
decision to address border security in a comprehensive way, and utilize 
the services of a systems integrator. This approach is most appropriate 
for challenges that are large, complex, and in a rapidly changing 
environment. We feel any successful solution must be capabilities-
based, fully integrated, adaptable and able to provide superior 
situational awareness for effective, decentralized, decision-making and 
response.
    To this end, we started with the requirement that this system had 
to be focused on helping the Border Patrol Agent (BPA) do his or her 
job better. We selected a number of technologies and designed a system 
to satisfy the needs of the BPA in the field. We refer to these 
capabilities as a ``tool kit'' and its purpose is to increase 
substantially the productivity of the agent and, at the same time, 
enhance his or her safety. The tool kit includes a variety of sensors, 
communications systems, information technology, tactical infrastructure 
(roads, barriers, and fencing), and command and control capabilities 
with robust situational awareness. Additionally, the tool kit will be 
expanded as new and proven technology becomes available from private 
industry and federal, state and local governments.
    After conducting detailed systems engineering analyses with CBP and 
the Border Patrol, components will be selected from the tool kit and 
deployed along the border to provide a common, yet tailored, security 
solution that has been optimized for every mile of our Southern and 
Northern Borders.
    The systems engineering and design approach that Boeing uses is a 
process we have developed over time with the experience gained from 
many other large, complex projects. The first step in this process is a 
rigorous analysis of SBInet requirements. Complete requirements 
definition sets the foundation for all other work in the system and is 
critical for the ultimate success of the system. This process includes 
performance requirements, design and operational constraints, mission 
definition, analysis, and system architectures. This is followed by 
extensive modeling and simulation to test the output of the 
requirements process and then a wide array of trade studies to look at 
potential solutions across the full spectrum of environments and border 
crossing threats. Following this process ensures that whatever 
technology or process is ultimately deployed will provide the 
government with the highest and best value.
    The requirements setting, modeling, and simulation process is a 
foundation of what we offer to CBP in SBInet. Our experience tells us 
however, that equally important is the process by which the system 
integrator partners with the government customer to ensure nothing is 
missed. The government will be embedded side-by-side with the industry 
team at all the key locations of program management to provide input 
and help make decisions on a timely basis. We are well on our way to 
finalizing this partnership and are deploying our system engineering 
process. Continuous input from the CBP, the Border Patrol Agents, and 
other stakeholders will further refine our solution.
    That is an abbreviated description of why we are confident our 
solution will work. Now let me describe our approach to keeping this 
program on cost and on schedule while meeting CBP performance 
objectives. Our management approach utilizes Boeing's proven best 
practices to create a transparent governance structure that combines 
the unique capabilities and strengths of our team with the oversight 
and knowledge of our government partners. At the heart of our system is 
the Earned Value Management (EVM) system which provides a singular 
metric of program cost and schedule health at all levels of the 
organization, as well as early warning of potential problems and 
problem resolution. We employ many other tools to facilitate execution, 
insure quality, reduce risk, maintain cutting edge technology, manage 
assets, and otherwise create excellent management and control. Time 
restrictions do not allow me to go into the details of these processes. 
This process and the support tools provide total program transparency 
to our government and industry partners.
    Before I conclude, I would like to make a few quick points. First, 
as the integrator for SBInet, our job is to find the best mature 
technology available and make it work in the overall system. We are 
looking for the best value solution, whether it is on the team or not. 
Under the current plan, Boeing will not provide any hardware for the 
solution, nor are any of our team mates guaranteed any content in the 
deployments beyond Project 28. Each provider must earn their way onto 
the program.
    Boeing currently manages roughly 30,000 suppliers, and we've been 
recognized for our expertise in this area. We want to insure a flexible 
and fresh solution for the CBP, so our system design assumes that 
improved technologies will become available and it provides for their 
incorporation into the solution.
    We have set a target of 40 percent participation by small and small 
disadvantaged business, higher than the government requirement, to 
ensure we have new ideas and capabilities available to the program. 
Boeing has a very robust small business program and has consistently 
attained the targets set in previous programs.
    When we get beyond Project 28, and start other task orders, we 
envision a substantial expansion of our team to increase capacity and 
bring in new technology. We have established a dedicated web site for 
SBInet suppliers and have received information from nearly 400 
interested companies already. We have also initiated our first 
solicitation through the web site. We find using the internet a good 
way to communicate the opportunities in SBInet to the broadest possible 
audience and to create a level playing field for selecting the many 
additional suppliers we will need to complete the tasks that lie ahead.
    Finally, Boeing and all the team mates are invested in the success 
of this program. In addition to the personal and economic benefits we 
all derive from secure borders, we have made a portion of our fee 
contingent on successful performance. This rewards our commitment to 
the success of SBInet and to our government partner. Rest assured, with 
the leadership and assistance of CBP and the Border Patrol, we will 
deliver the SBInet solution that secures our nation's land borders.
    In summary, we are confident we can the objectives of the SBInet 
program and look forward to the challenges ahead.
    That concludes my testimony. I look forward to your questions.

    Mr. Rogers. The Chair now recognizes Mr. Brian Seagrave, 
Vice President for Border Security for Unysis.
    Thank you for being here. We look forward to your 
statement.

    STATEMENT OF BRIAN SEAGRAVE, VICE PRESIDENT FOR BORDER 
                  SECURITY, UNISYS CORPORATION

    Mr. Seagrave. Chairman Rogers, Ranking Member Meek and 
members of the subcommittee, good afternoon. I am Brian 
Seagrave, Vice President for Border Security for Unisys. I am 
responsible for Unysis work on the Secure Borders Initiative. 
Thank you for the opportunity to testify here today.
    Unysis is pleased to work with the committee, and we look 
forward to continuing this relationship with the new Congress 
next year.
    Unisys is a global corporation of 37,000 employees in over 
100 countries providing information systems, solutions and 
services. We have a long history and proud history of serving 
the Federal Government.
    Unysis is the leading provider of integrated security 
solutions for corporations around the world. We delivered a 
system for the Chilean immigration police that automates 
document authentication and screens individuals arriving at 
airports against international domestic watch lists, using 
facial recognition. We delivered a national identification card 
for Malaysia that employs biometric technology. Recently we 
have been awarded contracts by Australia, New Zealand and 
Canada to test a variety of technologies for immigration 
control.
    We are proud to be a part of the SBInet team that has been 
chosen to help secure our borders and assist in assuring that 
all entry into the United States occurs through proper 
channels. Specifically, we are the information systems 
integrator as a subcontractor to Boeing on SBInet.
    In Unisys' view, the border security challenge is in large 
part an information challenge. Each agency with a role in 
securing our borders can more successfully perform its mission 
through the effective use of information. Unisys' role in the 
SBInet program is to develop, integrate, deliver and manage 
information systems and their supporting infrastructure.
    To define the most effective, technology-enabled concept of 
operations for securing our borders, Unysis and the Boeing team 
studied, modeled and simulated the impact of various concepts 
of operations, detection systems, and information on multiple 
factors affecting border patrol. For SBInet, we set out to 
address these factors using proven technologies, especially 
commercial, off-the-shelf technologies. The solutions we 
envisioned fully equip the Border Patrol and the ports of entry 
with information, include components already proven in other 
situations.
    Some examples of the solutions Unisys expects to provide 
are:
    First, a Common Operating Picture System, or COP, for 
integrating data from sensors, cameras, transponders, other law 
enforcement agencies and targeting systems into a real-time 
view of the situation on the border, real-time view of where 
the violations occur, with the information needed to most 
effectively and efficiently respond to an illegal entry at the 
fingertips of the agent;
    Second, a system that enables interoperability between 
disparate radio systems so that agents and officers can 
communicate with Federal, State, local and tribal law 
enforcement, National Guard, DOD and international partners in 
times of crisis or joint operations using existing radios;
    Third, a system that enables sharing information about 
apprehended personnel with other Federal, State, local, tribal 
and even international law enforcement agencies, and that 
equips CBP to detect and disrupt criminal enterprise; and
    Fourth, a system for aggregating and storing operational 
data from across DHS units to enable more timely detection of 
patterns of interest, nonobvious relationships, shifts in the 
illegal entry threat, and changes in tactics, and thus enable a 
dynamic operational stance that is a step ahead of the 
adversary or, as hockey great Wayne Gretski put it, to be where 
the puck is going to be.
    Mr. Chairman, our country has learned an important lesson 
from September 11th and the response to Hurricane Katrina. 
These events have underscored the importance of enabling 
different organizations to share information in real time 
across silos. Unisys' work on the SBInet program will provide 
solutions to securely eliminate these barriers and enable 
Border Patrol, CBP and DHS to achieve their missions.
    As part of the Boeing team, we are prepared to implement 
several other information technology base solutions that we 
have studied and simulated, and I would be happy to discuss 
these other concepts if time today permits.
    Like securing our borders, implementing these programs on a 
large scale will not be easy. To assist Unisys' implementation, 
the company will continue to rely on our diverse portfolio of 
subcontractors, many of which are small businesses. In fact, 
last year more than 40 percent of Unysis' subcontracting 
business went to small businesses, a significant number of 
which are minority--or women-owned.
    Unisys' performance measures will be evaluated through 
cost, schedule and service level agreements. We welcome the 
Department of Homeland Security's scrutiny outlined in the 
recent appropriations bill. We will continue to supply the same 
high-quality work Unisys has consistently provided to 
government and private sector clients. We will be accountable 
for achieving objectives in costs, schedule and technical 
performance of systems which we are responsible to deliver. We 
are prepared to work on performance-based arrangements where we 
are rewarded or penalized based on performance of key metrics.
    Border management is a complex, multifaceted issue, 
extending far beyond the actual line on the map. Addressing the 
challenges requires initiatives involving policy, processes, 
personnel, technology, information and sufficient resources.
    We look forward to working with Boeing and our other 
partners on the team to help the Department of Homeland 
Security better secure our borders.
    Mr. Rogers. I thank you, Mr. Seagrave, for your statement.
    [The statement of Mr. Seagrave follows:]

                  Prepared Statement of Brian Seagrave

    Chairman Rogers, Ranking Member Meek, and members of the 
subcommittee, good afternoon. I am Brian Seagrave, Vice President for 
Border Security at Unisys. I am responsible for Unisys work on the 
Secure Borders Initiative. Thank you for the opportunity to testify 
before you today. Unisys is pleased to work with the committee and we 
look forward to continuing this relationship with the new Congress next 
year.
    Unisys is a global corporation of 37,000 employees in over 100 
countries providing information systems solutions and services. Unisys 
has a long and proud history of serving the federal government.
    Unisys is also a leading provider of integrated security solutions 
for governments and corporations around the world. We delivered a 
system to the Chilean Border Police that screens individuals arriving 
at airports against Interpol and watch-lists based on facial 
recognition. We delivered a national identification card for Malaysia 
that employs biometric technology. Recently, we have been awarded 
contracts by Australia, New Zealand and Canada to test a variety of 
technologies to control the land, sea, and air borders.
    Unisys is proud to be part of the SBInet team that has been chosen 
to help secure our borders and assist in ensuring that all entry into 
the United States occurs through proper channels. Specifically, we are 
the information systems integrator as a subcontractor to Boeing.
    In Unisys' view, the border security challenge is, in large part, 
an information challenge. Each agency with a role in securing our 
borders can more successfully perform its mission through the effective 
use of information. Unisys role in the SBInet program is to develop, 
integrate, deliver, and manage information systems, and their 
supporting infrastructure.
    To define the most effective, technology-enabled concept of 
operations for securing our borders, Unisys and the Boeing team 
studied, modeled and simulated the impact of various concepts of 
operations, detection systems, and information on multiple factors 
affecting border control. For SBInet, we set out to address these 
factors using proven technologies, preferably commercial-off-the-shelf 
products. The solutions we envision to fully equip the Border Patrol 
and the ports of entry with information include components already 
proven in other situations. Some examples of the solutions Unisys 
expects to provide are:
         First, a Common Operating Picture (COP) system for 
        integrating data from sensors, cameras, transponders, other law 
        enforcement agencies, and targeting systems into a real-time 
        view of where the violations occur, with the information needed 
        to most effectively and efficiently respond to an illegal entry 
        at the fingertips of the agent; and,
         Second, a system that enables interoperability between 
        disparate radio systems so that agents and officers can 
        communicate with federal, state, local and tribal law 
        enforcement, National Guard, DoD, and international partners in 
        times of crisis or joint operations, using existing radios; 
        and,
         Third, a system that enables sharing information about 
        apprehended personnel with other federal, state, local, tribal, 
        and even international law enforcement agencies, and that 
        equips CBP to detect and disrupt criminal enterprise; and,
         Fourth, a system for aggregating and storing 
        operational data from across DHS units to enable more timely 
        detection of patterns of interest, non-obvious relationships, 
        shifts of the illegal entry threat, and changes in tactics, and 
        thus enable a dynamic operational stance that is a step ahead 
        of the adversary; or as hockey great Wayne Gretsky put it, to 
        ``be where the puck is going to be.''
    Mr. Chairman, our country has learned important lessons from 
September 11 and the response to Hurricane Katrina. These events have 
underscored the importance of enabling different organizations to share 
information in real-time, across silos. Unisys work on the SBInet 
program will provide solutions to securely eliminate these barriers and 
enable the Border Patrol, CBP and DHS to achieve their mission.
    As part of the Boeing team, we are prepared to implement several 
other information technology-based solutions that we have studied and 
simulated and I would be happy to discuss these other concepts if time 
today permits.
    Like securing our border, implementing these programs on a large 
scale will not be easy. To assist Unisys in implementation, the company 
will continue to rely on our diverse portfolio of subcontractors--many 
of which are small businesses. In fact, last year more than 40 percent 
of Unisys subcontracting business went to small businesses, a 
significant number of which are minority or women-owned.
    Unisys performance measures will be evaluated through cost, 
schedule and service level agreements. We welcome the Department of 
Homeland Security scrutiny outlined in the recent Appropriations bill. 
We will continue to supply the same high quality work Unisys has 
consistently provided to government and private sector clients. Unisys 
will be accountable for achieving objectives in cost, schedule, and 
technical performance of systems which we are responsible to deliver. 
We are prepared to work under performance-based arrangements where we 
are rewarded or penalized based on our performance on key metrics.
    Border management is a complex, multifaceted issue extending far 
beyond the actual line on the map. Addressing the challenges requires 
initiatives involving policy, processes, personnel, technology, 
information and sufficient resources. We look forward to working with 
Boeing and our other partners to help the Department of Homeland 
Security better secure our borders.

    Mr. Rogers. The Chair now recognizes and welcomes back Mr. 
Miiller, Tom Miiller, General Counsel for L-3 Services Group, 
for any statement you may have.

    STATEMENT OF THOMAS O. MIILLER, GENERAL COUNSEL OF L-3 
                 COMMUNICATIONS, SERVICES GROUP

    Mr. Miiller. Thank you, sir.
    Good afternoon, Mr. Chairman, Ranking Member Meek, and 
members of the subcommittee. My name is Tom Miiller, I am the 
General Counsel of L-3 Communications Services Group, and I am 
representing L-3 Communications Government Services Inc., which 
is a division within the Services Group.
    L-3 is honored to be a part of the Boeing team that will 
implement the SBInet program. As an American industry leader, 
Boeing is the ideal lead systems integrator to secure America's 
borders. L-3's experience on the Remote Video Surveillance 
program, RVS for short, places the Boeing team in the unique 
position of having hands-on experience with many of the 
challenges that SBInet will face.
    When L-3 appeared before this subcommittee in June of 2005, 
we testified that a program such as SBInet would require the 
active involvement of Congress, providing leadership, resources 
and guidance. This hearing is a manifestation of your 
leadership, and we welcome it.
    In the June 2005 hearing, L-3 identified what I believed 
were critical considerations for SBInet's success. Those 
considerations have been addressed by the Department of 
Homeland Security and our team leader, Boeing. We suggested 
first that DHS use an appropriate contract vehicle and 
supervise the contract with an experienced program management 
team. As SBInet begins, we believe DHS is doing exactly that. 
Moreover, the choice of Boeing ensures that SBInet is being 
performed by a contractor with world-class program management 
capabilities and resources.
    Second, based on our RVS experience, we testified that the 
acquisition of land rights would present a challenge to any 
effort to secure the country's borders. By immediately 
deploying mobile cameras and sensor platforms on an interim 
basis, the Boeing team will secure key border sites while the 
land rights for permanent sites are obtained. Further, the 
Boeing team will assist the government in acquiring the land 
rights.
    Finally, L-3 was concerned at the June 2005 hearing about 
the use of cutting-edge technology that is potentially untested 
or unreliable. Boeing's highly regarded procurement processes 
and vast supplier network will ensure that optimal technology 
is selected based on performance, reliability, life cycle costs 
and other considerations.
    What does L-3 bring to the Boeing team and SBInet? 
Experience. As you know, L-3 inherited the problems of the RVS 
program when it acquired International Microwave Corporation in 
late 2002. Although we had to overhaul the management 
performing the RVS program, we gained experience and built 
lasting relationships with Border Patrol leaders and operators. 
We have first-hand knowledge of the challenges confronting the 
CBP agents who protect our borders. We know the practical 
realities of selecting and installing permanent camera sites. 
In short, L-3 has faced many of the issues that SBInet will 
encounter. Our experience will now benefit SBInet.
    At the time of the June 2005 hearing, there were two open 
RVS matters, a GSA IG investigation, and unpaid L-3 invoices. I 
am pleased to report that both of these matters have been 
closed to the satisfaction of the government and L-3.
    In conclusion, L-3 is proud and poised to contribute as a 
member of the Boeing team in making the SBInet program a 
success that protects our country.
    Thank you for your time and attention. I will be pleased to 
answer any questions you may have.
    [The statement of Mr. Miiller follows:]

                Prepared Statement of Thomas O. Miiller

    Good afternoon, Mr. Chairman, Congressman Meek and Members of the 
Subcommittee. My name is Tom Miiller, General Counsel of L-3 
Communications Services Group, representing L-3 Communications 
Government Services, Inc. (``L-3'').
    L-3 appreciates the invitation to participate in this hearing and 
is pleased to be able to address your questions. Moreover, we are 
honored to be a part of the Boeing Team that will implement the SBInet 
Program. As an American industry leader, Boeing is the ideal lead 
systems integrator to secure America's borders. Finally, we recognize 
that L-3--as a result of our experience on the Remote Video 
Surveillance (``RVS'') Program--is in the unique position of having 
hands-on experience with many of the challenges that SBInet will face.
    When we appeared before this Subcommittee in June of 2005, we made 
the point that a program such as SBInet (then known as the America 
Shield Initiative) would require the active involvement of Congress 
providing leadership, resources and guidance for the program. We 
recognize that this hearing is a manifestation of your leadership and 
we welcome it.
    In June 2005, we identified what we believed were the critical 
considerations for SBInet's success. As SBInet commences, those 
considerations have been addressed by both the Department of Homeland 
Security (``DHS'') and our program team leader, Boeing.

    The considerations we set forth were:
        (1) Proper contract vehicle and program management structure. 
        By awarding a contract vehicle that encompasses all relevant 
        disciplines required to successfully deploy SBInet, DHS has 
        established the first predicate for success. Similarly, DHS 
        recognizes the need for experienced professional program 
        management to implement SBInet, within both DHS and the 
        contractor. DHS has installed the needed internal program 
        management and, by selecting Boeing as the SBInet contractor, 
        ensured that the lead contractor will provide premier program 
        management.
        (2) A proactive approach to acquiring the land rights for 
        installations. The largest program challenge faced during RVS 
        was acquiring land rights. This was a sequential process that 
        bogged down as the program expanded. First, the sites for 
        permanent installations have to be identified. Then, 
        environmental assessments are conducted before an agreement can 
        be consummated for the land rights. Because of the aggressive 
        completion objectives, this process will be a risk to SBInet as 
        well. Boeing's plan to use mobile camera and sensor platforms 
        while securing land rights and constructing permanent 
        installations is the best possible approach to achieve timely 
        coverage. Further, Boeing has a proactive plan to assist the 
        Government in the environmental assessment and rights 
        acquisition processes.
        (3) Cost and performance effective technology choices. SBInet 
        is a high technology project. There is a temptation to use 
        state of the art equipment, which brings the risks that 
        accompany cutting edge technology. In this regard, Boeing and 
        its highly regarded procurement processes and vast supplier 
        network will ensure that the optimal technology is selected, 
        based on performance, reliability, life cycle costs and other 
        considerations. Boeing is ideally suited to bring forward the 
        most effective technology alternatives.
    What does L-3 bring to the Boeing Team and SBInet? Experience. As 
you know, L-3 acquired the problems of the RVS program when it acquired 
International Microwave Corporation in late 2002. Although we had to 
overhaul the management performing the RVS Program to address the 
problems we purchased, we gained invaluable experience in the process 
and built lasting relationships with Border Patrol leaders and 
operators. We have first-hand knowledge of the difficulties that face 
the agents who work in the field securing our borders. We know the 
practical realities of selecting and installing permanent camera sites 
that can only be obtained by putting boots on the ground. In short, L-3 
has faced many of the problems that SBInet can expect to encounter.
    L-3 realizes that RVS is regarded as a failed program. At the time 
the contract expired, however, L-3 had solved many of the problems it 
inherited. We believe that despite the shortcomings in the Government's 
contracting and program management, RVS would have been completed 
successfully because we had learned what was required. That experience 
will now benefit SBInet.
    There were two outstanding matters at the time of the June 2005 
hearing: the open GSA-IG investigation and unpaid invoices. I am 
pleased to report that these matters have been resolved to the 
satisfaction of the Government and L-3.
    L-3 cooperated fully with all aspects of the GSA-IG investigations 
and was informed by the GSA-IG on February 8, 2006 that all 
investigations had been closed without any action against L-3 or its 
predecessor, IMC.
    With regard to the unpaid invoices of approximately $11 million, L-
3, the Border Patrol, GSA and the GSA-IG participated in a process that 
reviewed and reconciled all invoices--paid and unpaid--from the 
beginning of the RVS Blanket Purchase Agreement until its expiration. 
This review demonstrated that the RVS program was financially clean 
from beginning to end.
    In conclusion, L-3 is proud and poised to contribute as a member of 
the Boeing Team in making the SBInet Program a success that protects 
our country.
    Thank you for your time and attention. I will be pleased to answer 
any questions you may have.

    Mr. Rogers. I thank all of you for your statements. And I 
would like to start off with the questions, but before I do, I 
would like to offer this observation.
    I do think that you make a good point, Mr. Miiller; you all 
weren't at fault for what happened with ISIS coming off track, 
and you did make a valiant effort to try to right that wrong. 
But we are looking for you to be a knowledgeable resource on 
this team to make sure those kinds of things don't happen this 
time around, because we are going to be watching.
    But--we do have confidence, and I think that it says a lot 
about Boeing that they brought you all in as a part of their 
team, but I do want to kind of throw this out to Boeing first.
    We still are trying to get our arms around--as you could 
tell from the first panel questions and answers--this Committee 
is still trying to get its arms around where we are and where 
we are going. Well, where the Department is and where the 
Department is going with these concepts and with the costs.
    Since you didn't have a specific plan that you were 
bidding, and you have described this architectural 
relationship, tell me in more of a discussional fashion, how 
did you get the bid? What is it that you bid on? And why did 
you get it as opposed to somebody else?
    Mr. McElwee. We, of course, didn't make the selection, but 
we have been told a couple of things about why we were 
selected. One, we had an excellent technical approach. The tool 
kit approach that pulled together the different technologies 
that are mature, available, and deployable today enhanced the 
survivability and the efficiency and effectiveness of the 
Border Patrol agents.
    We were also told that we had a good quality assurance 
surveillance plan; and within the terms of the RFP, that means 
that we identified a performance metric and described a process 
by which we would go about meeting that particular perform 
metric.
    They asked about our past performance, and we described two 
different programs. One was the Army's Future Combat System 
program. I was the program manager for the CTD phase; and now, 
after 42 months, it has an SPI, scheduled performance index, of 
99.4 percent, which means it is a day and a half behind 
schedule, and it has a cost performance index of 1.01, which 
means it is under budget.
    That approach to managing programs and that success was 
identified as a good element of our offer to the customer.
    Mr. Rogers. I am trying to get in the conversation between 
you and your client.
    You are the architect, and your client is telling you what 
they want. What did they describe for you that they wanted? And 
then how did you come up with some numbers and some technical 
responses to meet your client's needs?
    Mr. McElwee. We puzzled over that question quite a while, 
as you might imagine, when we received the Request for 
Proposal. They asked us to describe how we would first detect, 
then identify, then classify, and then apprehend people 
crossing into this country to achieve operational control of 
the border. The definition of operational control was left to 
us to determine what we felt that might be--all of this in a 
context, as you recall last spring, about what was going on 
with the Temporary Worker Program and options for reducing, as 
someone said, a magnet for attracting people here.
    So, in that context, what we attempted to do was lay out a 
performance metric, associate a cost with that, and then 
estimate the total deployment of that solution across the 
northern and southern borders.
    Mr. Rogers. And you said you associated cost with the tools 
that you put in place to meet your plan.
    Mr. McElwee. Yes, sir.
    Mr. Rogers. Do you feel comfortable that--now that you all 
are getting close to developing a plan, that you--and I am not 
going to ask you the number, but are you starting to feel like 
you have got your arms around the kind of costs that are going 
to be involved as we go forward?
    Mr. McElwee. Absolutely. This is not development work, this 
is mature technology. And it is like building a house, going 
down to the local supplier and buying your raw materials, 
pouring the footer, buying the framing, buying the plumbing and 
so forth; and those costs are generally well known. There is 
some risk, of course, as you integrate it and deploy it, but 
the fundamental costs are very well understood and can be 
easily estimated.
    Mr. Rogers. So my understanding then is, it is just a 
matter now for your client to tell you how big a house they 
want before you can tell them the cost.
    Mr. McElwee. Yes, sir.
    Mr. Rogers. All right.
    Let me ask Mr. Seagrave's response. Would you concur with 
what Mr. McElwee just offered, or have you anything that you 
would like to add to that?
    Mr. Seagrave. Thank you for the question.
    I certainly concur with Jerry's response to the question. I 
think the key now is that we have to conduct the site surveys, 
we have to get the details that we need to determine where we 
have to make adjustments in the estimates that we had before we 
can give them the final estimates, and that is what will occur 
for each task border for each segment of the border. Unysis 
will do it for the IT piece, L-3 will do it for the 
communications, Boeing will integrate all of the pieces.
    Mr. Rogers. Mr. Miiller, do you have anything you want to 
offer to help us? Again, you all know what this Committee is 
trying to find, and I am trying to get you to help us, give us 
a higher degree of comfort that you all are on top of this.
    Mr. Miiller. Sir, I really don't have anything to add to 
what the two gentlemen have said. I agree with them.
    Mr. Rogers. Well, you heard earlier what this Committee is 
going to be doing in the coming year. We are going to want to 
know specifically what you are going to try to do, what 
timeline, and what is it going to cost. So I would urge you all 
that as you continue to work with your client, you start to 
formulate answers to those things, at least for this Committee, 
because those are the things that we are going to be coming 
back around to.
    With that, my time has expired, and I will yield to my 
friend and colleague from Florida, Mr. Meek, for any questions 
he may have.
    Mr. Meek. Thank you, Mr. Chairman. I want to thank the 
panel for coming before us. I had an opportunity to look at 
your opening statements.
    I just wanted, Mr. Chairman, based on your questioning--and 
I know that from Boeing you have put forth some forthcoming 
information in your testimony by saying that we are going to--
we are the prime integrator, we will be managing it, but we 
will not use any of Boeing's technology. I thought that was 
encouraging.
    So I would assume that none of these products will have the 
advantage over any decision that you may make as it relates to 
Boeing products; am I correct?
    Mr. McElwee. Sir, that is exactly right.
    Mr. Meek. Okay.
    There was one other thing you mentioned when the chairman 
was asking you a question. You said that we are charged with 
defining operational control. Could you explain that a little 
bit more, because I want to make sure that there is some sort 
of--so we are clear on what Customs and Border Protection will 
be doing and what you will be doing.
    Mr. McElwee. This was a rough quote from the request for a 
proposal that all of the competitors received, and it basically 
said, operational control is made up of the components of 
detecting people across the border, identifying those that 
cross, classifying them--are they an illegal alien looking for 
a better job or are they a smuggler or are they a terrorist of 
some sort--and then, once classified, allowing the Border 
Patrol to apprehend those.
    And it was up to us to determine where to deploy resources, 
whether in detection, identification or apprehension 
classification to achieve a level of control that would be 
considered operational control. There was not a precise metric 
associated with that term in the RFP.
    Mr. Meek. So this will be based on information that Customs 
and Border Protection shares with you and with Boeing--I don't 
want to make it personal--with Boeing, and you are charged with 
defining operational control?
    Mr. McElwee. We were to propose a response to operational 
control. It is the responsibility, of course, of the Department 
of Homeland Security to define that and tell us what the 
parameters are that we have to design a system to meet.
    Mr. Meek. I just wanted to make sure, because I didn't want 
anyone to leave the room with other impressions.
    Mr. McElwee. Thank you, sir.
    Mr. Meek. One other question--and I am glad to see my 
friend here from L-3. Thank you for coming before the committee 
again.
    I think this is a wonderful opportunity--and I don't want 
to leave anyone out, but I think it is a wonderful opportunity 
to not only represent to the Congress that we can actually 
start a project and have contractors and auditors from the 
Federal Government and the inspector general play a role and be 
embedded along with all of you to be able to put forth a 
project that all Americans feel very passionate about, and that 
is protecting our borders.
    I think it is also important for us to continue to hear 
some feedback, so I am just going to throw a blanket question 
out there, something that we have not covered.
    And, Mr. Miiller, you mentioned before in your testimony, 
and in your testimony today, encouraging this subcommittee and 
the entire committee to continue to be engaged in this process, 
some things you think that we need to know, outside of your 
written statements based on what you heard or--obviously, you 
wrote these statements before you walked in the door, or 
someone wrote them, but something based on a comment by our 
previous panel, a problem probably we need to hear that we need 
to play a role in.
    I know that Mr. Rogers and I and other members of this 
committee will be out in the first 28 miles of Project 28, or 
whatever we want to call it; and you all probably will not be 
there because it will be someone else that would take our 
hands, along with the Department, briefing us on what is 
actually happening here--success, roadblocks, failures, what 
have you.
    Based on what you have heard, is there anything that we 
need to hear, you think that we need to know, something that we 
need to look forward to? Because this is a work in progress, 
even though we are off to a start now.
    With the chairman, I want to congratulate all of you for 
being a part of it. And also in the spirit of the ranking 
member, I hope that there is a way that you can meet all of 
your goals with small businesses playing a role in this, 
because I believe that we are going to be in the business of 
border security something fierce on both ends of the spectrum, 
be it the north border or the south border in the future, to 
protect the homeland.
    Mr. McElwee. I would just respond, sir, that we welcome 
your insight and your oversight and understanding of the 
environment that we are working in and the challenges that we 
face. It is not going to be a start at point A and go to the 
end point without a lot of discussion. Part of it will involve 
performance. Part of it will involve funding issues.
    I realize that we will be back here, or our client, 
customer, will be back here many times explaining to you what 
has transpired, and what is going to happen next, and what we 
anticipate the future to hold in terms of our ability to deploy 
the systems and provide the level of security that we so 
desperately need to the southern border and on the northern as 
well
    Mr. Meek. Let me ask this question, and I want to go a 
little further.
    I know we have heard that part about what we need. 
Wonderful. We are glad we are here. My question is along the 
lines of as contractors, because the three of you are there. It 
is almost like if I was secretary of an agency, and I come 
before Congress and I say, man, this is the way it is going to 
happen. This is the way it is written out in the contract. 
These are the people who are working with. We are working in a 
wonderful way. But all of us have history. It is almost like I 
go to a dinner and say, just introduce me as Kendrick, not as 
Congressman.
    But I just want to be able to--I understand that you all 
are not going to be on the field. You are not going to be 
making the day-to-day decisions. You will not be executing the 
everyday nuts-and-bolts function of SBInet. I am going to go 
ahead and say that. But you are the individuals who are going 
to have to come before Congress and talk about the good, bad, 
and ugly. And again, I am asking the very, you know, fourth 
grade question here. Is there anything that you heard this 
morning that maybe you think we need to be thinking about here?
    Many times we are accused of knowing just about everything. 
We assume we get on a committee, and automatically we have a 
Ph.D. on the subject. I will tell you, speaking for myself, 
that is not the case. So I am going to ask a very plain 
question to you one more time saying that, well, I heard the 
testimony, I recommended some things to the Department that 
could be best practices. So we want to hear them if you have 
them.
    You don't have to think hard. If you don't have it, that is 
fine. That is fine. You can get it to us later. But I want to 
make sure there is an open-door policy. The Chairman has put it 
out there. I don't get tired of asking the question over and 
over again. We do it all the time with management oversight 
committees. We are supposed to ask these questions.
    Mr. McElwee. I will provide a comment, not a question. I 
think this has been--this procurement process from start to 
finish has been run very professionally. It has been as good as 
any that Boeing has participated in, and it is representative, 
I think, of the talent that the Department of Homeland Security 
has brought to the effort. I wouldn't say that were it not the 
case. But we have actually been very pleased with this, and we 
have had other dealings with the Department. This one is very 
well done.
    Mr. Meek. That is fine.
    Well, with that, Mr. Chairman, I know I am over my time. I 
want to thank those of you that came before the committee and 
your return, Mr. Miiller, and I look forward to continuing 
discussions.
    Like I shared with the Department, I would encourage--and 
if it is not me, with staff, with any of us here, I know the 
Chairman feels the same--even when we don't ask for the 
information, please share it with us. We may be able to avoid a 
hearing if we were to get more of that. And if we don't hear 
that, we are going to call a hearing because we need to know. 
That is why we are here.
    Thank you so very much, and congratulations for getting the 
contract, and hopefully we will be more secure because of it.
    Thank you, Mr. Chairman. I yield back.
    Mr. Rogers. I thank the gentleman.
    I recognize Mr. Souder for any questions he may have.
    Mr. Souder. I want to make it clear from my earlier 
comments here, I am thrilled with this initiative. It is long 
overdue. It is part of the whole idea of bringing the 
Department of Homeland Security together. It has just been 
frustrating. In my career I have been involved in narcotics, in 
particular, and that led me into immigration questions, and 
that trucks come, and then they get stopped, and they cross at 
another point, we don't even know they were there. People go in 
between, we stop them. Our agencies don't talk to them. Our 
north border and south border don't talk to each other. Our 
harbor and airports don't talk to our borders.
    It has been--having an integrated command-and-control 
system is essential. I want to compliment the Department for 
proceeding and you all for working with that.
    I am just flabbergasted with this. I don't know how you bid 
on how you are going to have total control of terrorists on the 
border. How in the world do you even figure out who is a 
terrorist when there is a million people coming through, 
particularly if they are a latent cell? I mean, that--it would 
be very interesting to hear your discussions on how you are 
going to bid that. But let me move to a couple of specifics.
    On the tool kit, which is a great idea, did you have a 
specific cost on that? And how many tool kits you thought you 
might have, have you estimated that? What is the status of 
that?
    Mr. McElwee. Sir, we took, if I may, a best value approach. 
We were looking for performance, and we were looking for cost. 
And so all of us make those decisions every day when we shop 
for our personal needs.
    We looked at the overall performance, and, frankly, we 
looked at not just the initial cost, we spent a lot of time 
looking at life cycle costs. I think many of the costs you talk 
about in a large program are not the initial procurement and 
deployment. It is maintaining that equipment, supporting it, 
fueling it, et cetera, that drives up your initial cost. So we 
looked at all of those and selected components and sensors. We 
had a number of sensors by type, and we would go out and look 
at the best value sensor.
    Mr. Souder. In trying to understand this, I thought this 
was partly how to get it to the agents. But did you then put a 
specific dollar on the Tucson sector that you bid on that tool 
kit? And was that extrapolated, that you assumed you were going 
to have that cost averaged through the whole contract? How do 
you do that when you are putting it together for one sector 
bid, but don't know what is going to be there?
    Mr. McElwee. As Mr. Giddens indicated, with a detailed 
analysis on Tucson and where there are different types of 
terrain on Tucson, you have a little bit of urban, you have 
rural, and remote, and mountains. No water. So we spend--we 
broke down the border for the entire 6,000 miles into, I think, 
eight or nine categories, and then we deployed our tool kit 
against those different categories of terrain based on the 
number of intruders we anticipated in each of those sectors, 
and that is how we came up for the total cost estimate for the 
6,000 miles.
    Mr. Souder. I know the Chairman said he didn't want to ask 
you that, But do you have a total cost estimate from the 
Department of Homeland--
    Mr. McElwee. There are cost and performance issues we are 
not allowed to address. So we gave them a cost estimate that we 
estimated would be a part of our offering. It is up to the 
Department to determine which performance level they wish and 
at what cost.
    Mr. Souder. So, Mr. Miiller, you mentioned one of the 
problems we have had is U.S. agents have had computers, they 
can't get access to whether we have mobile sites. You said 
about land rights and Internet and procuring those rights. Are 
you proceeding with that? Do you have a contract to do that at 
this point? Are you getting--how does this work inside this 
contract since you are only bidding on one sector? There is not 
a plan, and there is not a budget. What are you doing?
    Mr. Miiller. If you don't mind, I will defer to Jerry to 
answer that because he has got more details relative to how we 
are handling the land rights.
    Mr. McElwee. We recognized high risk based on feedback we 
got from L3 as getting land rights to put in your technical 
solution. We discovered or concluded that one of the most 
expeditious approaches was to make them mobile. There are, in 
fact, mobile sensors deployed today that are providing some 
insight into the number of illegal intruders that we are 
getting across the southern border. Our solution is mobile 
until such time as we can secure the land rights to make it 
permanent. As Mr. Giddens indicated those two advantages: One, 
you make sure you get it on the right site; two, you don't have 
to delay so long.
    Mr. Souder. Are you able to do that? Do you have a contract 
with a dollar amount that you can give, or is this theoretical?
    Mr. McElwee. We have mobile solutions in the 20 million 
task order for Project 28, and based on experience from that, 
we extrapolate two additional task orders as they are given to 
us.
    Mr. Souder. At this time you aren't able to purchase those 
because you haven't--you don't have any actual dollar amount. 
It is theoretical at this point.
    Mr. McElwee. We have a fixed price, or very close to a 
fixed price, for those mobile assets, and it then becomes a 
question as you would in building a house, how fast can you 
roll it out based on your suppliers and your authorization to 
proceed.
    Mr. Souder. In your calculation of risk at the border, I am 
going the raise a particular example. Did you also take into 
account what is happening on the other side of the border? For 
example, east of El Paso, in what I believe is at the edge of 
the Marfa Sector, we have a crossing there, but that sector 
from El Paso east is apparently currently controlled by the 
drug cartel, not the Government of Mexico. They wouldn't 
necessarily say that publicly, but I have asked the ambassador 
and others about why they can't get rid of the bulldozer at 
Neely's Crossing, for example. One thing you would have to have 
in your sensor system is when they start up the bulldozer. 
There are a couple hundred people and lots of equipment there 
because they are knocking down everything we put in. That there 
is a gravel base there. I don't know why it hasn't been taken 
out by the Mexican Government or hasn't taken out the 
bulldozer, but, my understanding, they don't have operational 
control of that side of the border.
    Do you factor in at the different costs what is happening 
at the other side? Was that even discussed in your contract.
    Mr. McElwee. As we were bidding this proposal, we were 
given an opportunity for due diligence in both Swanton and in 
the Tucson sector, and during those visits we were given 
information that the Border Patrol faced issues they faced on a 
day-to-day basis.
    As you might expect in a competitive process, we did not 
have security clearances for the Department of Homeland 
Security, so consequently were not given access to the law 
enforcement and sensitive data. Now that we are on contract, we 
are getting to see that information, and, of course, we will 
adjust our tool kit to deal with those issues on each segment 
of the border.
    Mr. Souder. Thank you very much.
    Mr. Rogers. I want to thank you for your time, and I know 
you are all busy. You have other things to do. The fact that 
you took time to make your prepared statements is very much 
appreciated. It has been very helpful to us, and we look 
forward to working with you in the coming years as we make our 
Nation more secure.
    And with that, this panel is dismissed and this hearing is 
adjourned.
    [Whereupon, at 5:10 p.m., the Subcommittee was adjourned.]

                                 
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