[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
                  MOVING BEYOND THE FIRST FIVE YEARS: 
  SOLVING THE DEPARTMENT OF HOMELAND SECURITY'S MANAGEMENT CHALLENGES

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

                                HEARING

                               before the

                      SUBCOMMITTEE ON MANAGEMENT,
                     INVESTIGATIONS, AND OVERSIGHT

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 9, 2008

                               __________

                           Serial No. 110-104

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

[GRAPHIC] [TIFF OMITTED] TONGRESS.#13


                                     

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html

                               __________

                     U.S. GOVERNMENT PRINTING OFFICE
43-656 PDF                 WASHINGTON DC:  2008
---------------------------------------------------------------------
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512ï¿½091800  
Fax: (202) 512ï¿½092104 Mail: Stop IDCC, Washington, DC 20402ï¿½0900012008


                     COMMITTEE ON HOMELAND SECURITY

               Bennie G. Thompson, Mississippi, Chairman

Loretta Sanchez, California          Peter T. King, New York
Edward J. Markey, Massachusetts      Lamar Smith, Texas
Norman D. Dicks, Washington          Christopher Shays, Connecticut
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   Mike Rogers, Alabama
Columbia                             David G. Reichert, Washington
Zoe Lofgren, California              Michael T. McCaul, Texas
Sheila Jackson Lee, Texas            Charles W. Dent, Pennsylvania
Donna M. Christensen, U.S. Virgin    Ginny Brown-Waite, Florida
Islands                              Gus M. Bilirakis, Florida
Bob Etheridge, North Carolina        David Davis, Tennessee
James R. Langevin, Rhode Island      Paul C. Broun, Georgia
Henry Cuellar, Texas                 Candice S. Miller, Michigan
Christopher P. Carney, Pennsylvania
Yvette D. Clarke, New York
Al Green, Texas
Ed Perlmutter, Colorado
Bill Pascrell, Jr., New Jersey

       Jessica Herrera-Flanigan, Staff Director & General Counsel

                     Rosaline Cohen, Chief Counsel

                     Michael Twinchek, Chief Clerk

                Robert O'Connor, Minority Staff Director

                                 ______

       SUBCOMMITTEE ON MANAGEMENT, INVESTIGATIONS, AND OVERSIGHT

             Christopher P. Carney, Pennsylvania, Chairman

Peter A. DeFazio, Oregon             Mike Rogers, Alabama
Yvette D. Clarke, New York           Michael T. McCaul, Texas
Ed Perlmutter, Colorado              Candice S. Miller, Michigan
Bill Pascrell, Jr., New Jersey       Peter T. King, New York (Ex 
Bennie G. Thompson, Mississippi (Ex  Officio)
Officio)

                    Jeff Greene, Director & Counsel

                         Brian Turbyfill, Clerk

                    Michael Russell, Senior Counsel

                                  (II)


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Christopher P. Carney, a Representative in Congress 
  From the State of Pennsylvania, and Chairman, Subcommittee on 
  Management, Investigations, and Oversight......................     1
The Honorable Mike Rogers, a Representative in Congress From the 
  State of Alabama, and Ranking Member, Subcommittee on 
  Management, Investigations, and Oversight......................     2

                               Witnesses

Ms. Elaine C. Duke, Deputy Under Secretary for Management, 
  Department of Homeland Security:
  Oral Statement.................................................     4
  Prepared Statement.............................................     6
Mr. Norman J. Rabkin, Managing Director, Homeland Security and 
  Justice Team, Government Accountability Office:
  Oral Statement.................................................    13
  Prepared Statement.............................................    15
Mr. Clark Kent Ervin, Director, Homeland Security Program, The 
  Aspen Institute:
  Oral Statement.................................................    22
  Prepared Statement.............................................    23
Mr. James Jay Carafano, Senior Research Fellow in Defense and 
  Homeland Security, The Heritage Foundation:
  Oral Statement.................................................    25
  Prepared Statement.............................................    27

                             For the Record

The Honorable Mike Rogers, a Representative in Congress From the 
  State of Alabama, and Ranking Member, Subcommittee on 
  Management, Investigations, and Oversight:
  Chart..........................................................     3

                                Appendix

Questions From Chairman Christopher P. Carney....................    49
Questions From Ranking Member Mike Rogers........................    58


MOVING BEYOND THE FIRST FIVE YEARS: SOLVING THE DEPARTMENT OF HOMELAND 
                    SECURITY'S MANAGEMENT CHALLENGES

                              ----------                              


                        Wednesday, April 9, 2008

             U.S. House of Representatives,
                    Committee on Homeland Security,
 Subcommittee on Management, Investigations, and Oversight,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:03 p.m., in 
Room 311, Cannon House Office Building, Hon. Christopher P. 
Carney [chairman of the subcommittee] presiding.
    Present: Representatives Carney, Clarke, and Rogers.
    Mr. Carney. The Subcommittee of Management, Investigations 
and Oversight will come to order.
    The subcommittee is meeting today to receive testimony on 
``Moving Beyond the First Five Years: Solving the Department of 
Homeland Security's Management Challenges.''
    After 5 years DHS stands at the proverbial fork in the 
road. One path is the easy way. Keep on wandering forward, 
never stopping to ask whether what you are doing makes sense or 
whether you need to rethink this route.
    This way would lead the Department to move to more wasteful 
contracts, painful congressional hearings, remaining as the 
butt of late night comedian's jokes, and, God forbid, perhaps 
another bungled Katrina response.
    This route may well also lead to the breaking up of the 
Department and result in our preparedness efforts being set 
back decades.
    The other path requires taking a hard look at what has 
worked over the past 5 years and what has not. It requires 
setting aside pride and emotion, and where necessary, admitting 
error. It requires respecting those who conduct oversight, not 
resisting and resenting them.
    This road will be hard and will not lead to instant 
success. Rather, it will bring slow, incremental improvements. 
But in 5 years there would still be a Department of Homeland 
Security, and it would be much improved from the one that we 
know today.
    No large organization is perfect, whether in the public or 
private sector. We do not expect perfection, but organizations 
that are not accountable for their failings do not survive.
    So what we ask is for accountability, introspection and 
gradual improvement. Five years from now, we need a Department 
that has embraced the concept of one DHS, while still 
recognizing the special skills and missions of the individual 
components.
    We need a Department that has a full seat at the Federal 
table, leading the government in preparing for and, if 
necessary, responding to the next disaster. We need a 
Department that has enough contracting officers to develop and 
oversee its major procurements.
    We need a Department that does not rely on expensive 
contractors to perform the everyday functions that should be 
carried out by government workers.
    The transition to the next Presidential administration is a 
crucial point in the Department's development. If it is 
botched, the Department will suffer, and the Nation will 
suffer. As the committee charged with oversight of the DHS, it 
is our responsibility to ensure that transition planning is on 
track.
    So, as I said, we are at a fork in the road. I hope DHS 
chooses the tough road, but the one that will make it better 
and make it safer for all Americans.
    Before I close, I want to take a moment to thank all of our 
witnesses for getting their testimony in on time. Both you and 
your staff's efforts in this regard are much appreciated, and I 
hope the Department will make this a habit in the future.
    The chair now recognizes the ranking member of the 
subcommittee, the gentleman from Alabama, Mr. Rogers, for an 
opening statement.
    Mr. Rogers. Thank you, Mr. Chairman.
    I want to thank all the witnesses for taking the time to be 
here. I know all of you have testified before this committee in 
the past, and we welcome you back. I also want to take this 
time to congratulate Elaine Duke on her nomination by the 
president to serve as under secretary of management at DHS.
    We appreciate your hard work and look forward to continuing 
to work with you as you work for the American people.
    Today's hearing continues the work of this subcommittee in 
the 109th Congress on overseeing management challenges facing 
DHS. Areas we explored include contracting reforms, procurement 
staffing levels, employee morale, information security and 
training costs.
    Under Ms. Duke's leadership as former chief procurement 
officer, DHS made significant improvements in its procurement 
operations. However, I think we can all agree that more 
procurement staff are needed at DHS to ensure that contracts 
are awarded and managed effectively.
    As this hearing focuses on the management challenges facing 
DHS, it is important to keep in mind what Congress can do to 
help the Department in this area.
    First, Congress needs to enact the remaining 9/11 
Commission recommendations and consolidate jurisdiction over 
DHS. Currently, DHS officials report to 86 committees and 
subcommittees, resulting in conflicting guidance over the 
Department.
    With that, Mr. Chairman, I would like to ask unanimous 
consent to this chart, reflecting those 86 committees, be 
inserted in the record.
    [The information follows:]
    
    
    Mr. Carney. Certainly. Without objection, I would like to 
thank the gentleman for inserting this into the record.
    Mr. Rogers. The second thing that I think we need to do is 
the committee needs to pass an annual DHS authorization bill, 
as it has done each year since the committee was established. 
To be effective, the authorization bill must be passed before 
Congress acts on the Department's appropriation bill later this 
spring.
    Third, Congress must not reorganize DHS in the near future. 
Doing so would provide insufficient time for its organizational 
structure to take hold. The former comptroller general 
confirmed that analysis, testifying that it takes 5 to 7 years 
for a complex merger to work.
    I think all of us would agree that the hard-working folks 
at DHS would benefit from stability in the workplace, 
consolidated oversight by Congress, and an authorization bill.
    This not only would strengthen DHS, but would also 
strengthen the Nation's security. I look forward to hearing 
from our witnesses.
    With that, Mr. Chairman, I yield back.
    Mr. Carney. Thank you.
    Other members of the subcommittee are reminded that under 
committee rules, opening statements may be submitted for the 
record.
    I would like to welcome the panel of our witnesses today.
    Prior to this appointment, Ms. Duke served as the 
Department's chief procurement officer and the deputy assistant 
administrator for the Transportation Safety Administration. She 
was recently nominated to be the Department's next under 
secretary for management.
    Congratulations on that nomination.
    Our second witness is Norm Rabkin, the managing director of 
the Homeland Security and Justice Team at the Government 
Accountability Office, a position in which he has served since 
January 2003.
    Mr. Rabkin is in charge of managing GAO's reviews of issues 
related to homeland security, Federal law enforcement, the 
Federal judiciary and Federal funds provided to State and local 
law enforcement agencies.
    Our third witness is Mr. Clark Kent Ervin, the director of 
the Homeland Security Initiative at the Aspen Institute. Mr. 
Ervin previously served as the first inspector general of the 
Department of Homeland Security, where he was charged with 
providing oversight of the new Department.
    The fourth witness is Dr. James Carafano, the assistant 
director of the Kathryn and Shelby Cullom Davis Institute for 
International Studies and senior research fellow for the 
Douglas and Sarah Allison Center for Foreign Policy Studies at 
the Heritage Foundation.
    Dr. Carafano's areas of expertise include homeland security 
and counterterrorism. Prior to his current position, Dr. 
Carafano served 25 years in the U.S. Army, where he reached the 
rank of lieutenant colonel.
    Thank you for your service to the Nation, sir.
    I thank you for all for being here.
    Without objection, the witnesses' full statements will be 
inserted into the record. I now ask each witness to summarize 
his or her statement for 5 minutes, beginning with Ms. Duke.

    STATEMENT OF ELAINE C. DUKE, DEPUTY UNDER SECRETARY FOR 
          MANAGEMENT, DEPARTMENT OF HOMELAND SECURITY

    Ms. Duke. Thank you, Mr. Chairman.
    Thank you, Member Rogers and Members of the subcommittee.
    It is a pleasure to appear before you this afternoon my 
first time as the deputy under secretary of management before 
this committee. I have been in this position about 5 months, 
but I have spent most of my 25 years of civil service in the 
procurement profession, most recently as the Department's chief 
procurement officer.
    Secretary Chertoff has established five priorities for the 
Department, the fifth of which is to strengthen and unify DHS 
operations and management. Management's role enables the 
Department to accomplish the other four mission goals.
    We accomplish this through the management of six chiefs: 
chief financial officer, procurement, human capital, security, 
administrative and information officers. To that end, our most 
significant effort is to continue transforming the Department 
into a unified force that protects our country.
    DHS, whose size is that of a Fortune 30 company, has merged 
22 agencies with approximately 208,000 employees.
    My top priority is that the deputy under secretary have 
essential elements in achieving the DHS mission: first, to 
prepare for the Department's 2009 administration transition; 
second, to improve acquisition and procure; and third, to 
strengthen the requirements process and integrate it into the 
planning, programming, budget and execution system.
    In this, my goal in transition is focusing on three areas, 
thus ensuring the internal processes are employed, that we have 
a knowledge management transfer, and that the personnel in the 
Department have the training, exercises and experience 
necessary to operate in their new roles.
    On improving acquisition and procurement, the Department is 
in the midst of many critical acquisitions that are vital to 
the success of our mission. That is why the chief procurement 
officer and I are working to institutionalize solid process. To 
this end, we are working on a joint requirements council and 
investment review processes that are more robust and complete 
with the Department.
    We are ensuring that program officers are properly 
structured and staffed with persons with the right skills to 
ensure we have effective management of our programs and 
oversight of those programs. We are examining best practices to 
ensure that metrics are in place to have properly measured 
successful performance, cost schedule and performance of these 
programs.
    In 2005 we established the DHS Acquisition Fellows Program, 
which is attracting new talent into entry levels, where we will 
retain and train them through professional career development. 
This coming June a diverse class of 20 fellows will be 
graduated.
    Building on its success, we expanded the program to support 
83 intern positions for fiscal year 2008, to a total of 100 in 
fiscal year 2009. Our goal is to have 300 interns by the year 
2011.
    We exceeded both the administration's and the Department's 
goal of 30 percent set-aside for small business in our 
contracts. We awarded about 33 percent of our procurement 
dollars to small business. Of that, 11.5 percent went to small, 
minority-owned, women businesses. We are proud of these 
numbers.
    In the human capital area, we are developing a Department-
wide, results-oriented, strategic human capital plan and 
aggressively building a world-class organization. We have 
implemented the enterprise E-recruitment system at 
headquarters, and it replaces about 20 hiring systems 
throughout the Department. We will complete the deployment of 
that Department by January 2011.
    We are also on our way to achieving a hiring target in the 
front line mission-critical occupations. We have a robust 
veteran outreach program that was launched last year, and 
nearly one-quarter of our DHS workforce are veterans, including 
28 percent of our managers and supervisors.
    Our mission demands an integrated approach to protect our 
homeland, yet the Department's legacy facilities are dispersed 
into 40 locations and 70 buildings throughout the national 
capital region.
    Therefore, one of our priorities is to get congressional 
support to the Department and authorizing and appropriating 
funds for DHS consolidation at St. Elizabeth's West Campus and 
the efficient realignment of off-campus locations that will 
reduce the overall future cost inefficiencies.
    I thank you for your leadership and oversight and continued 
support of the Department and its management programs. I look 
forward to working with you in shaping the future and success 
of DHS with energy and enthusiasm. I would be pleased to 
respond to your questions. Thank you.
    [The statement of Ms. Duke follows:]

                  Prepared Statement of Elaine C. Duke
                             April 9, 2008

                      THE FUTURE OF DHS MANAGEMENT

    Thank you Mr. Chairman, Ranking Member Rogers and members of the 
subcommittee. It's a pleasure to appear before you today for the first 
time as the Deputy Under Secretary for Management (DUSM).
    I have been in this position for over 5 months but have spent most 
of my 25 years of public service in the procurement profession, most 
recently as the Department's Chief Procurement Officer.
    The Deputy Under Secretary for Management position was created as 
part of the Department's 2009 Administration Transition Planning 
efforts. By having a senior career civil servant in this capacity, 
rather than a political appointee, the Department can ensure 
operational continuity during the change in administration. As the 
current Under Secretary for Management, Mr. Paul Schneider, is 
currently serving as the Acting Deputy Secretary, my position holds the 
authorities of the Under Secretary for Management.
    Our most significant effort is to continue transforming the 
Department of Homeland Security (DHS) into a unified force that 
protects our country. DHS, whose size is that of a Fortune 30, has 
merged 22 agencies with approximately 208,000 employees. This effort 
requires the effective and efficient use of financial and human 
resources, enabling technology, strong processes and superb management. 
It is toward this effort that I devote my focus, time, and energy.
    Our approach has a common thread through this effort: to ensure 
that there is a comprehensive and integrated strategy throughout the 
Components with specific and measurable goals that support the 
activities and priorities of the Department. On a practical level, we 
will ensure the success of this effort by having a team that possesses 
the right knowledge, skills and abilities to support the programs, 
transform disparate operations, and measure progress against metrics 
and milestones.
    The key elements of our strategy in this effort are to continue:
   Improving acquisition and procurement throughout the 
        Department;
   Strengthening the requirements and investment review 
        processes;
   Acquiring and maintaining human capital;
   Seeking efficiencies across the enterprise in operations and 
        the use of resources;
   Making the key management systems, such as financial and 
        human resources, world class; and
   Acquiring the funding and approval for DHS' consolidation at 
        St. Elizabeths West Campus and the efficient realignment of all 
        Department of Homeland Security off-campus locations.
    As the DUSM, I lead the Management Directorate's efforts through a 
well-focused, well-developed strategy that:
   Provides structure to strengthen unified organizational 
        governance and enhance department-wide communication, 
        decisionmaking and oversight;
   Optimizes processes and systems to integrate functional 
        operations and facilitates cross-Component synergies and 
        streamlines coordination to ensure reliable and efficient 
        support of mission objectives;
   Fosters leadership that adheres to the core values and 
        guiding principles of DHS in performing duties, effecting 
        progress and leading with commitment for the mission; and
   Leverages culture and the benefits of commonalities and 
        differences across Components to promote cooperative intra and 
        inter-agency networks and implement best practices.
    The top priorities, which are essential elements to achieving the 
DHS mission and practicing sound stewardship of taxpayers' money are:
   First: Prepare for the Department's 2009 administration 
        transition;
   Second: Improve acquisition and procurement; and
   Third: Strengthen the requirements process and integrate it 
        into the Planning, Programming, Budgeting, and Execution (PPBE) 
        system.
     My goal on transition is to focus on three areas: Internal 
Processes, Knowledge Management, and Training and Exercises. The 
Internal Processes initiative will review our Directives for 
sufficiency, strengthen records management, ensure proper succession 
planning, and improve our processes for incoming and exiting employees. 
The Knowledge Management initiative will produce briefing materials, 
but more importantly, it will convey to career executives and incoming 
appointees the requisite knowledge to keep the Department running 
during the Transition. The Training and Exercises initiative focuses on 
training conferences, briefings and exercises in order to prepare 
identified senior level career personnel within each Component who are 
expected to serve in an acting capacity upon the departures of the 
appointees. It is critical that these acting personnel are prepared to 
be informed decisionmakers in the event of a serious incident arising, 
whether man-made or natural. This initiative also facilitates direct 
interactions among Federal, State, local and tribal officials with 
homeland security responsibilities.
    The Department of Homeland Security is in the midst of many crucial 
acquisitions that are vital to its success. That is why the Chief 
Procurement Officer and I are working to strengthen acquisition and 
procurement by institutionalizing solid processes. To this end we are:
   Strengthening the requirements and investment review 
        processes by improving the joint requirements council and 
        Investment Review Board (IRB) process. We are preparing to 
        initiate a new Department-wide requirements process and have 
        reinvigorated our investment review process;
   Reviewing the major programs and investments to ensure that 
        the requirements are clear, cost estimates are valid, 
        technology risks are properly assessed, schedules are 
        realistic, contract vehicles are proper, and the efforts are 
        well-managed. We have held one formal IRB with Acting Deputy 
        Secretary Schneider and are projecting to hold one per month. 
        We are also beginning the processes to conduct paper IRBs and 
        IRBs with the DUSM, as well as establishing Acquisition Program 
        Baselines (APBs) and authorizing execution to the APB for all 
        Level 1 and 2 programs;
   Building the capability to manage complex efforts by 
        ensuring that program offices are properly structured and 
        staffed with the right people and skills to ensure efficient 
        and effective program management and oversight;
   Aggressively hire where we have known shortages; and
   Examining best practice metrics in use by other departments 
        with the intent to start implementation this year.
    My focus is to continue transforming the Office of Chief 
Procurement Officer (OCPO) into an Acquisition Office. Often, the terms 
Procurement and Acquisition are incorrectly used interchangeably. 
Procurement is only one element of acquisition management, whereas 
acquisition expands beyond the ``purchase'' of an item or service to 
include other important aspects, such as understanding operational and 
life-cycle requirements, formulating concepts of operations, developing 
sound business strategies, exercising prudent financial management, 
assessing tradeoffs, and managing program risks. Best practice 
acquisition management is executed by teams of professionals who 
understand and are able to manage the entire life-cycle of a major 
program effort. We are making progress toward this goal.
    The Acquisition Program Management Division (APMD) of OCPO began 
operations in August 2007. The division was established to provide 
oversight and support for acquisition programs. To date, APMD has 
performed Quick Look assessments of 37 Level 1 programs and has 
overseen Deep Dive reviews of the SBInet and Advance Spectroscopic 
Portal (ASP) programs. APMD has provided advice and guidance to a 
number of programs, particularly in the area of cost benefit analysis. 
Currently, the APMD team is focused on an aggressive Investment & 
Acquisition process re-engineering effort. The effort includes 
replacing Directive 1400, establishing revised investment and 
acquisition decision procedures, as well as processes for acquisition 
program baselining, periodic reporting, acquisition of services, and 
other initiatives as they are identified.
    DHS' $17 billion procurement spend plan provides for the 
development, fielding and support of significant homeland security 
capabilities. For example, U.S. Coast Guard contracts are providing 
aircraft and ships from the Integrated Deepwater System and search and 
rescue capability from the Rescue 21 program. Transportation Security 
Administration (TSA) contracts are providing additional capabilities 
via the Electronic Baggage Screening Program. Consistent with the SBI 
Strategy, U.S. Customs and Border Protection (CBP) is developing and 
fielding the capabilities at and between our Nation's ports of entry to 
gain effective control of our borders. The Domestic Nuclear Detection 
Office is developing and testing a new type of radiation portal 
monitor, known as the Advanced Spectroscopic Portal, to improve the 
Nation's defense against the threat of nuclear smuggling.
    Obtaining qualified acquisition professionals at the right time 
with the right skill-set continues to be a challenge for the 
Department. Competition for these professionals is intense within the 
Washington, DC area. To resolve our personnel shortages, we are 
intensifying our human capital planning efforts to minimize skill and 
competency gaps as well as minimize our critical vacancies and reliance 
on contractors. For example, in response to the Office of Management 
and Budget (OMB) 1102 Contracting Workforce Competency Gap Survey, we 
developed a training plan that spans the next 3 years. This training 
plan targets the contracting functional area within the DHS Acquisition 
Workforce, but it will also benefit other acquisition career fields 
including program management and Contracting Officer's Technical 
Representatives. We are also currently conducting staffing studies to 
better define our acquisition workforce needs. Currently our workforce 
includes program managers and contract specialists. As part of our 
human capital planning efforts, we will be identifying other required 
acquisition career fields such as test and evaluation, systems 
engineering, logistics, and cost estimating. We are aggressively 
working to ensure that each acquisition position, upon definition, is 
encumbered by an acquisition professional trained and certified at the 
appropriate level. To this end, we are continuously reviewing and 
updating our Acquisition Training Program, the underpinning of a good 
certification program. We are utilizing the Defense Acquisition 
Workforce Improvement Act framework to develop DHS certification 
standards. We have also centralized a number of recruiting activities 
including issuing Department-wide vacancy announcements. Our 
centralized recruitment efforts to date have focused primarily on 
contracting professionals. Expansion to other acquisition career fields 
will occur as each series is defined and Department-wide needs are 
identified. This initiative supplements our Components' on-going 
recruitment efforts with a goal of recruiting the best candidates 
available.
    Our most substantial recruitment activity began in 2005 with the 
establishment of a DHS Acquisition Fellows Program. The goal of the 
Fellows Program was to attract new talent at the entry level into our 
acquisition positions, and retain and train them through a professional 
career development program. The Office of Procurement Operations (OPO) 
and the TSA participated in this program and this coming June, a 
diverse class of 13 Fellows from TSA and seven Fellows from OPO will be 
graduating.
    Building on the success of the Acquisition Fellows Program, we 
expanded it into the Acquisition Professional Career Program and 
modeled it to further resemble the highly successful Department of 
Defense program. This year we plan to expand the program to support 33 
additional intern positions. In fiscal year 2009 we are planning for a 
total of 100 intern positions to be funded. Our inaugural Acquisition 
Professional Career Program class began in January 2008 and a second 
class will begin in June 2008. Our goal is to grow this program to 300 
positions by fiscal year 2011 to fill critical acquisition positions.
    A final point that I would like to make regarding the Department's 
acquisition and procurement practices is that DHS has exceeded both the 
administration's goal and the Department's elevated goal of 30 percent 
for small business prime contracts. According to our preliminary 
assessment, I am happy to report that in fiscal year 2007, 
approximately 33 percent of the procurement dollars went to small 
business prime contractors. Of that 33 percent, about 11.5 percent was 
awarded to small, minority-owned businesses. These preliminary 
statistics include TSA, which formally began adherence to the Small 
Business Act on October 1, 2006 and is transitioning to the Federal 
Acquisition Regulation for its solicitations issued June 23, 2008 or 
later. We are proud of these numbers and consider them to be evident of 
our commitment to support small businesses, and to demonstrate our 
awareness of the role that small businesses play in supporting our 
Nation's ability to prepare for and respond to terrorist attacks and 
natural disasters.
    Having just shared the top priorities, I would like now to discuss 
the key elements of Management's strategy to continue transforming the 
Department into a unified force.

                             HUMAN CAPITAL

    Human Capital has developed a results-oriented strategic human 
capital plan and is aggressively building a world-class organization by 
hiring and retaining a talented and diverse workforce. Our operational 
plan identifies specific activities with milestones for integrating 
workforce planning in human capital operations, improving DHS-wide 
hiring and retention practices, and leveraging our partnership with the 
DHS Civil Rights and Civil Liberties Office to continually increase 
diversity across DHS.
    We are improving our hiring processes by educating our hiring 
managers and human resource officials on the flexibilities that are 
currently available as well as implementing an enterprise E-recruitment 
system.
    This new system replaces 20 hiring systems previously used across 
the Department and consists of three modules: Staffing Acquisition, On-
Boarding and Advanced Reporting/Analytics. We plan to deploy this 
automated, end-to-end hiring system in phases, by module across the 
Department by January 2011. This system:
   Covers the Federal hiring process and rules from workforce 
        planning to placing a new hire at his or her fully equipped 
        work-station;
   Includes a configurable workflow providing visibility across 
        all key touch-points of the hiring work stream to managers, 
        human resources and candidates; and
   Streamlines an array of administrative processes associated 
        with hiring, assisting DHS in its ability to hire quality 
        candidates more quickly; manage hiring activity and workforce 
        trends; and provide integrated data for reporting especially in 
        the Equal Employment Opportunity (EEO) arena.
    We are well on our way to achieving our hiring targets in our 
frontline mission critical occupations as well. At Immigration and 
Customs Enforcement (ICE), we have already filled over 908 positions 
this fiscal year. Of those, 598 are key front line occupations, and we 
expect to exceed our hiring goal of 1,096 additional new hires in key 
occupations this year. The Federal Emergency Management Agency reached 
a 95+ percent staffing level for the first time at the end of fiscal 
year 2007, and is implementing a plan to reach that level again in 
fiscal year 2008 despite significant increases in approved staffing 
levels. We plan to have 17,819 Border Patrol Agents on board by the end 
of fiscal year 2008, 18,319 by the end of calendar year 2008, and over 
20,000 by the end of fiscal year 2009. Furthermore, CBP, in partnership 
with the Federal Law Enforcement Training Center (FLETC), has developed 
a plan within the current budget to train all of the new agents in 
basic academy and Spanish language training at the Border Patrol 
Academy in Artesia, New Mexico.
    By reflecting America's diversity, our employee workforce will 
provide the widest range of solutions, ideas, and decisions to protect 
America. We are committed to achieving a diverse DHS workforce, 
including our executive cadre. Nearly one-fifth (19.4 percent) of the 
Department's employees are Hispanic, and 14.6 percent are African-
American. Women compose nearly one-third of our workforce at 32.3 
percent. Among our executive cadre, 45 percent of U.S. Citizenship and 
Immigration Service (USCIS) executives are women; nearly 10 percent of 
TSA's executives are African-American; and 14 percent of executives at 
ICE are Hispanic, as are 12 percent at CBP.
    For example, we have established a formal partnership with the 
Urban League's Black Executive Exchange Program (BEEP). With managerial 
support, 150 DHS employees volunteered to represent DHS at BEEP-
sponsored events at Historically Black Colleges and Universities. We 
are also pursuing similar partnerships with the National Association of 
Hispanic Federal Executives, African American Federal Executive 
Association, and the Hispanic Scholarship Fund Institute.
    In addition, we plan to expand upon our robust and innovative 
Veterans Outreach program launched last year, which included creation 
of a one-stop Web page for veterans seeking to continue their service 
to America by working for DHS, establishment of a Veterans Outreach 
forum of external stakeholders to advise us on our Veterans Outreach 
initiatives, and delivery of refresher training on Veterans Preference 
programs for Human Resource and EEO specialists throughout the 
Department. This year, we plan to establish a DHS Veterans Speakers 
Cadre composed of DHS employees who are veterans to address veterans 
groups. Nearly one-quarter (24.2 percent) of the DHS workforce are 
veterans, including 28.4 percent of our managers and supervisors. In 
2007, DHS hired 6,013 veterans, nearly double the number hired in 2006 
(3,015). DHS currently employs approximately 6,400 disabled veterans.
    Both Secretary Chertoff and former Secretary Ridge have led a 
focused initiative to ensure that people with disabilities, including 
veterans who have been wounded serving our country overseas, are 
offered equal employment opportunities.
    DHS was among the first Federal agencies to participate in the 
Department of Defense's Operation Warfighter Program. DHS 
representatives regularly visit Walter Reed Army Medical Center and 
have provided temporary assignments to over 40 wounded soldiers and 
permanent assignments to nine.
    DHS also participates in the Workforce Recruitment Program and 
other intern programs specifically targeting individuals with 
disabilities. Many of these interns have been offered full-time 
positions upon completion of their internship. We have also recently 
deployed a new training program ``Employment of People with 
Disabilities: A Roadmap to Success.'' It describes the Department's 
initiatives and identifies the tools to make hiring of individuals with 
disabilities easier for managers.
    Since the establishment of the American Association of People with 
Disabilities IT summer intern program, DHS has been one of the biggest 
supporters and users. DHS normally hires two of the 10 available 
Government-wide summer interns, and has made two permanent hires from 
this group.
    Although we have achieved a well-balanced workforce, we must do 
better in ensuring that our leadership ranks reflect the Nation's 
diversity. In particular, the Secretary, Acting Deputy Secretary, and I 
are committed to ensuring that the talent pool for Senior Executive 
Service positions is representative of our Nation as a whole. To that 
end, we have taken several very solid steps recently. We have 
designated our Management Council as DHS' de facto Diversity Council to 
provide high-level direction, priorities, and support toward enhancing 
diversity. This Council is composed of diverse, top-level 
representatives from each Component and is chaired by me. One of the 
Council's first actions will be to benchmark best practices in the 
Department in the area of diversity, approve a Department-wide 
Diversity Strategy, and implement a Diversity Action Plan for fiscal 
year 2008-2010. Other plans include:
   Conducting a cultural audit to augment employee survey 
        results and baseline our diversity profile;
   Establishing an external Diversity Outreach Forum, whereby 
        interested stakeholders may advise us on our diversity efforts; 
        and
   Designing and deploying Diversity Management and Diversity 
        Awareness training.
    Additionally, the Department offers a Senior Executive Service 
Candidate Development Program (SES CDP). The program is similar to 
other SES CDP offered by agencies throughout the Federal Government. 
The program requirements are outlined by the Office of Personnel 
Management (OPM), which also approves each department's program 
individually.
    The goal of the program is to prepare candidates to be approved for 
selection into the Senior Executive Service. We currently have two 
classes:
   Headquarters runs a Department-wide CDP:
     14 participants in 2007;
     23 participants in 2008.
   Additionally, CBP and TSA are planning their own programs 
        under the auspices of our OPM-approved SES CDP, with review by 
        the Chief Learning Officer. Both programs will commence in 
        2008.
   The United States Secret Service (USSS) also runs a program 
        that will come under the Department-wide CDP umbrella.
   The CBP, TSA and USSS programs will comply with the 
        provisions of the Department's OPM-approved CDP while targeting 
        the unique requirements of the law enforcement missions.
    The program content and process includes:
   Initial assessment against OPM's Executive Core 
        Qualifications (ECQs);
   Orientation;
   Residential programs;
   Coaching and mentoring;
   Rotational assignment (4 months long);
   Other developmental activities as required by the outcomes 
        of the initial assessment; and
   Portfolios submitted to OPM for final approval of SES CDP 
        candidates.
    All together, these programs over time, will ensure the Department 
has an enterprise-wide SES Candidate Development Program that meets the 
Department's succession planning needs and supports the promotion of a 
representative and diverse workforce into the ranks of the SES.

                          FINANCIAL MANAGEMENT

    The 22 agencies that formed DHS brought their financial management 
issues with them. As a result the Department has had substantial 
challenges to overcome in its effort to improve its financial 
management processes. However, to date, we have reduced material 
weakness component conditions from 25 in 2006 to 16 in 2007. The Chief 
Financial Officer (CFO) and I are working to make measurable, 
demonstrable progress in the development and implementation of the 
following:
   Appropriate systems and processes that ensure clean audit 
        opinions;
   Sound internal controls for financial reporting;
   Timely, accurate, and useful financial data collection for 
        analysis; and
   Efficient financial management services.
    Success in these areas rests upon a framework of policies, 
processes, systems, people and accountability. We have efforts underway 
in each of these areas. For example, the ``Internal Controls Playbook'' 
is a corrective action plan that includes Federal Government best 
practices for financial management. The Playbook was approved by 
Secretary Chertoff and disseminated throughout the Department. Through 
this Playbook, we are aggressively ensuring that internal audit and 
control systems are in place to help us achieve the mission and execute 
the Department's strategy. In executing this effort, we work closely 
with the Office of the Inspector General. Because of the importance of 
this effort, the CFO and I brief the Secretary monthly on its status.
    As a result of these efforts, for the second consecutive year, the 
outcome of the independent audit shows significant progress. Our 2007 
audit again demonstrates that financial management at DHS has improved 
dramatically. Consider these highlights:
   We corrected material weakness conditions related to 
        financial management and oversight through a strengthened 
        control environment and bolstered oversight functions with the 
        strong support of the Department's Secretary and Under 
        Secretary for Management;
   TSA received a qualified audit opinion on their fiscal year 
        2007 Balance Sheet. In addition, ICE sustained fiscal year 2006 
        progress and eliminated all remaining material weakness 
        conditions. CBP and FLETC obtained an unqualified opinion on 
        all fiscal year 2007 Financial Statements;
   We improved the number of organizations that do not 
        contribute to a Department-wide material weakness from four 
        [USSS, Science and Technology, FLETC & USCIS] to seven from 
        2006 to 2007. This now includes CBP, ICE, FLETC, USCIS, USSS, 
        US-VISIT, and Science and Technology;
   We reduced the number of Component conditions that 
        contributed to our fiscal year 2007 material weaknesses from 25 
        to 16;
   We reduced Department-wide audit disclaimer conditions by 40 
        percent;
   Under the Chief Information Officer's (CIO) leadership, the 
        number of Components contributing to the Department-level 
        information systems security material weakness dropped from six 
        to three; and
   The Secretary provided the Department's first-ever assurance 
        statement on the design effectiveness of internal control over 
        financial reporting.
    The fiscal year 2007 audit shows our corrective actions are 
working, and I am particularly encouraged by our efforts to sustain 
this progress. While significant internal control challenges remain, 
they are in much more focused areas and we are tackling them in a 
targeted approach.
    The Director of Program Analysis and Evaluation was designated the 
departmental Performance Improvement Officer. This will bring greater 
structure, coherence and focus on our performance measurement function, 
and improve our external reporting requirements and accountability 
within the Department.
    We have developed a strategy to consolidate financial management 
systems across the Department. Our strategy to yield timely and 
accurate financial data includes OMB-compliant accounting lines, the 
centralization of business processes and robust business intelligence 
tools to ensure that both our leadership and external stakeholders 
receive actionable, timely and transparent financial information.
    Finally, we are working to ensure the Department's grant program 
has the necessary internal controls in place, are adhered to, and that 
funds to State and local first responders are monitored to achieve 
success with measurable outcomes.

                         INFORMATION TECHNOLOGY

    We continue to address matters within information technology 
management. Utilizing information technology (IT), the Department has 
established and institutionalized Department-wide business processes 
and systems to manage information. For example, the CIO heads the DHS 
CIO Council, whose membership includes the CIOs from all of DHS' 
components. The Council works to standardize business practices where 
it makes sense in order to improve information sharing. These efforts 
improve Department operations and reduce costs by eliminating 
duplicative IT systems.
    Particular initiatives that have contributed toward improved 
information management at reduced costs include the following 
initiatives:
   Consolidation of major networks and systems continues; in 
        fiscal year 2007, we consolidated 100 percent of DHS 
        Headquarters, CBP, ICE, FLETC and USCIS network sites (over 
        1,780 sites) to a single Multiple Protocol Label Switching 
        network allowing DHS transparent monitoring of network 
        performance and activity, prioritization of traffic, vastly 
        improved security posture, and established two DHS enterprise-
        wide data centers to migrate DHS system operations.
   Established the regulatory framework to ensure the 
        Department CIO has control over Department-wide IT 
        Acquisitions, budgets, and personnel performance. In 2007 we 
        aligned in excess of $3.2 billion of IT investment to 
        Department priorities.
   Implemented a comprehensive Concept of Operations for the 
        DHS Security Operations Center, including: (1) Incident 
        Reporting and tracking Web page, and (2) Privacy incident 
        reporting guide, thereby ensuring that the IT systems are 
        receiving the highest security assurance.

                LEVERAGING ASSETS AND BUSINESS PROCESSES

    One of the founding principles of the Department is to leverage 
assets and business processes to provide a nimble and efficient 
operation that can focus on our mission. We have several efforts 
underway to streamline our business processes and to make more 
efficient use of our assets, especially real estate.
    Significant efforts are already underway to ensure that all 
necessary Directives are updated and implemented prior to the close of 
this fiscal year. Directives are a key component in ensuring consistent 
application of DHS policy and business practices across the Department.
    Records management is vital to ensuring that accurate and reliable 
information is available to DHS decisionmakers. It is an important 
component of a successful transition, and of DHS' continuity plan. The 
current records management process is largely paper-based and we are 
currently planning an electronic records management system. In the 
meantime, we have updated and established schedules for records 
retention and disposal and are rolling out training so that all 
employees understand their responsibilities for records management.
    We have developed a Department-wide real property asset management 
plan and performance measures to guide decisionmaking for effective and 
efficient use of real estate. We have developed a strategy for 
collocating appropriate Department activities to enhance mission 
support and eliminate duplication. One of the first and most critical 
steps of this strategy is the establishment of a permanent consolidated 
Headquarters for DHS. This is one of the Secretary's top priorities.

       CONSOLIDATED DEPARTMENT OF HOMELAND SECURITY HEADQUARTERS

    Our mission demands an integrated approach to protect our Homeland. 
Yet, the Department's legacy facilities are dispersed in 40 locations 
and 70 buildings throughout the National Capital Region (NCR). This 
dispersal adversely impacts critical communication, coordination, and 
cooperation across the Department. Moreover, we currently have 40 
additional NCR space requests pending with the General Services 
Administration (GSA) that will further exacerbate the problem. An 
adequately sized and functionally appropriate consolidated Headquarters 
will be a monumental step in helping the Department meet the strategic 
imperative of unifying DHS operationally, administratively, and 
culturally, as well as remove the physical barriers that impact unity 
of purpose and effort.
    A consolidated DHS Headquarters also has positive resource 
implications. GSA determined consolidating office space at St. 
Elizabeth's will result in a significant future cost avoidance, once 
the project is funded and underway as compared to individually renewing 
leases. In addition DHS expects to achieve further efficiencies by 
reducing administrative overhead, eliminating redundancies, and sharing 
common campus services.
    The Department also needs to reduce the total number of locations 
that house DHS Components within the NCR to as few as possible in order 
to reduce overall future costs and inefficiencies due to our geographic 
dispersion. Consolidating NCR Headquarters mission support functions 
that do not relocate to St. Elizabeth's has the potential to achieve 
comparable cost avoidances. The real estate portfolio is currently 
planned to be reduced to a manageable number of six to eight locations.
    I request in the strongest terms that Congress support the 
Department by authorizing and appropriating funding for DHS' 
consolidation at St. Elizabeth's West Campus and the efficient 
realignment of off-campus locations that will follow in future budget 
years.

                               CONCLUSION

    Secretary Chertoff has expressed that one of his primary goals for 
DHS is to strengthen DHS core management, policy and operational 
integration. The other four are:
   Protect our Nation from dangerous people;
   Protect the Nation from dangerous cargo and things coming 
        into the country;
   Protect and harden our critical infrastructure; and
   Strengthen our emergency preparedness and response.
    While my testimony today focuses on the management area, we have 
made significant progress in each of the other four mission areas as 
well. As the Department enters into its next stage of development to 
transform into an effective, integrated organization, it is important 
to keep in mind that this process is a marathon, not a sprint. We must 
develop sustainable, long-term processes which will build capabilities. 
While we certainly realize the importance of timeliness, we want to be 
proactive and forward-looking. To do so, we need to get correct systems 
in place. This takes time, but it is more beneficial, productive, and 
efficient in the long run. We are building for the future.
    Thank you for your leadership and continued support of the 
Department of Homeland Security and its management programs. I look 
forward to working together with you in shaping the future and success 
of DHS with energy and enthusiasm. Thank you for this opportunity to be 
here today, and I will be pleased to respond to any questions that you 
may have.

    Mr. Carney. I thank you for your testimony.
    I now recognize Mr. Rabkin, to summarize his statement, for 
5 minutes.

  STATEMENT OF NORMAN J. RABKIN, MANAGING DIRECTOR, HOMELAND 
  SECURITY AND JUSTICE TEAM, GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Rabkin. Chairman Carney, Mr. Rogers, I am pleased to be 
here this afternoon to discuss the challenges that DHS faces in 
managing its missions, its finances, its people, its 
acquisitions, its information and its real property.
    My statement summarizes the progress DHS has made in 
implementing core management functions. Based on our 
assessments and those of the DHS as inspector general over the 
past 5 years, we concluded that DHS has made limited progress 
in the management of its human capital and information 
technology resources, modest progress in managing its finances 
and acquisitions, and moderate progress in managing its real 
property assets.
    Let me put this in a couple of different perspectives. 
First, let's compare DHS' management status and that of other 
Federal agencies. This is the latest scorecard from the 
president's management agenda. The OMB issues this.
    Of the 26 departments and agencies that it lists, only 
three have not achieved what OMB calls success in the five 
major management categories that it looks at. OMB itself 
hasn't, the Department of Defense, and DHS.
    Maybe it is not fair to compare DHS to those other 
agencies. After all, it is only 5 years old, and as you 
mentioned, from our study of mergers and acquisitions, we 
recognize that it generally takes at least 5 to 7 years for an 
organization like DHS to transform itself and operate 
successfully.
    So the second perspective can be to compare DHS' progress 
in its management areas to its progress in its mission areas. 
We have concluded that DHS has made more progress in meeting 
Congress' and the president's expectations for its primary 
missions--things like maritime and aviation security, 
immigration enforcement, critical infrastructure protection.
    It is understandable that DHS would devote more focus and 
more energy to these areas than to its management areas. But I 
believe that it is reasonable now to expect DHS to devote 
comparable focus and comparable energy to solving its 
management challenges.
    Through the end of this year, we will be exploring DHS' 
plans for meeting its management challenges and the commitment 
and progress it is making to implement those plans, as we 
consider whether the transformation of DHS should remain on our 
high-risk list.
    Here are some of the questions that we will be asking. 
First, will DHS be able to regularly update its strategic plan 
so that its components and employees, as well as Congress and 
the American people, can judge its goals and objectives and 
track its progress?
    Second, will it develop an acquisition system that gives 
its components autonomy to design and procure new systems, 
while conforming to Federal Acquisition Regulations and the 
general principles issued by the chief acquisition officer?
    And will the CAO and the DHS components exercise enough 
oversight to ensure they are getting what they need on time and 
at reasonable prices?
    Third, will DHS improve its financial management functions 
enough to get clean audit opinions and to ensure that it has 
adequate controls over financial transactions?
    Fourth, will DHS create a human capital environment where 
components have effective workforce plans that are linked to 
DHS' strategic plan; recruitment, hiring and retention efforts 
that can ensure a topnotch workforce; a credible and valid 
performance management system; and employees who judge DHS as a 
great place to work?
    Finally, will DHS have access to and be able to effectively 
share all the information needed to accomplish its missions? 
Will it properly safeguard this information?
    As I mentioned, one of the prerequisites for getting off of 
our high-risk list is to demonstrate progress. From our 
perspective, DHS must be able to document its claims of 
progress and provide us that documentation, as well as access 
to the program officials responsible for assuring that progress 
in a reasonable time.
    Almost a year ago, I testified before this subcommittee 
about our concern with the delays we were experiencing in 
getting access to needed DHS documents and officials. While I 
have seen sporadic examples of improved access, DHS has not yet 
changed its policies and procedures for dealing with us. We are 
discussing changes with DHS management officials. I am hopeful, 
but so far no change.
    Mr. Chairman, that concludes my statement. I will be 
pleased to answer questions.
    [The statement of Mr. Rabkin follows:]

                 Prepared Statement of Norman J. Rabkin
                             April 9, 2008

                             GAO HIGHLIGHTS

    Highlights of GAO-08-646T, a testimony before the Subcommittee on 
Management, Investigations, and Oversight, Committee on Homeland 
Security, House of Representatives.
Why GAO Did This Study
    The Department of Homeland Security (DHS) began operations in March 
2003 with missions that include preventing terrorist attacks from 
occurring within the United States, reducing U.S. vulnerability to 
terrorism, minimizing damages from attacks that occur, and helping the 
Nation recover from any attacks. GAO has reported that the 
implementation and transformation of DHS is an enormous management 
challenge. GAO's prior work on mergers and acquisitions found that 
successful transformations of large organizations, even those faced 
with less strenuous reorganizations than DHS, can take at least 5 to 7 
years to achieve. This testimony addresses: (1) The progress made by 
DHS in implementing its management functions; and (2) key issues that 
have affected the Department's implementation efforts. This testimony 
is based on GAO's August 2007 report evaluating DHS's progress between 
March 2003 and July 2007; selected reports issued since July 2007; and 
GAO's institutional knowledge of homeland security and management 
issues.
What GAO Recommends
    While this testimony contains no new recommendations, GAO has made 
over 900 recommendations to DHS over the past 5 years to strengthen 
departmental operations. DHS has implemented some of these 
recommendations and is in the process of implementing others.

  DEPARTMENT OF HOMELAND SECURITY: PROGRESS MADE IN IMPLEMENTATION OF 
              MANAGEMENT FUNCTIONS, BUT MORE WORK REMAINS

What GAO Found
    Within each of its management areas--acquisition, financial, human 
capital, information technology, and real property management--DHS has 
made some progress, but has also faced challenges.
   DHS has recognized the need to improve acquisition outcomes 
        and taken some positive steps to organize and assess the 
        acquisition function, but continues to lack clear 
        accountability for the outcomes of acquisition dollars spent. 
        The Department also has not fully ensured proper oversight of 
        its contractors providing services closely supporting 
        inherently government functions.
   DHS has designated a Chief Financial Officer and taken 
        actions to prepare corrective action plans for its internal 
        control weaknesses. However, DHS has been unable to obtain an 
        unqualified audit opinion of its financial statements, and for 
        fiscal year 2007 the independent auditor identified significant 
        deficiencies in DHS's internal control over financial 
        reporting.
   DHS has taken actions to implement its human capital system 
        by, for example, issuing a departmental training plan and human 
        capital operational plan. Among other things, DHS still needs 
        to implement a human capital system linked to its strategic 
        plan, establish a market-based and more performance-oriented 
        pay system, and seek more routine feedback from employees.
   DHS has taken actions to develop information technology 
        management controls, such as developing an information 
        technology human capital plan and developing policies to ensure 
        the protection of sensitive information. However, DHS has not 
        yet fully implemented a comprehensive information security 
        program or a process to effectively manage information 
        technology investments.
   DHS has developed an Asset Management Plan and established 
        performance measures consistent with Federal Real Property 
        standards. However, DHS has yet to demonstrate full 
        implementation of its Asset Management Plan or full use of 
        asset management inventory information.
    Various cross-cutting issues have affected DHS's implementation 
efforts. For example, DHS has not yet updated its strategic plan and 
put in place structures to help it manage for results.
    Accountability and transparency are critical to effectively 
implementing DHS's management functions. GAO has experienced delays in 
obtaining access to needed information from DHS, though over the past 
year, GAO's access has improved. GAO is hopeful that planned revisions 
to DHS's guidance for working with GAO will streamline our access to 
documents and officials.
    DHS's 5-year anniversary provides an opportunity for the Department 
to review how it has matured as an organization. As part of our broad 
range of work, GAO will continue to assess DHS's progress in addressing 
high-risk issues. In particular, GAO will continue to assess the 
progress made by the Department in its transformation efforts and 
whether any progress made is sustainable over the long term.
    Mr. Chairman and Members of the subcommittee, I appreciate the 
opportunity to appear today to discuss the Department of Homeland 
Security's (DHS) efforts to implement its management functions. DHS 
began operations in March 2003 with missions that include preventing 
terrorist attacks from occurring within the United States, reducing 
U.S. vulnerability to terrorism, minimizing damages from attacks that 
occur, and helping the Nation recover from any attacks. The Department 
has initiated and continued the implementation of various policies and 
programs to address these missions as well as its non-homeland security 
functions.\1\ DHS has also taken a number of actions designed to 
integrate its management functions and to transform its component 
agencies into an effective cabinet-level department. Prior to the 
creation of DHS, we testified on whether the reorganization of 
government agencies might better address the Nation's homeland security 
needs.\2\ At that time, we identified that the Nation had a unique 
opportunity to create an effective and performance-based organization 
to strengthen the Nation's ability to protect its borders and citizens. 
We noted that the magnitude of the challenges that the new department 
would face would require substantial time and effort to overcome, and 
that the implementation of the new department would be extremely 
complex.
---------------------------------------------------------------------------
    \1\ Examples of non-homeland security functions include Coast Guard 
search and rescue and naturalization services.
    \2\ GAO, Homeland Security: Critical Design and Implementation 
Issues, GAO-02-957T (Washington, DC: July 17, 2002).
---------------------------------------------------------------------------
    In 2003, we designated the implementation and transformation of DHS 
as high-risk because it represented an enormous undertaking that would 
require time to achieve in an effective and efficient manner.\3\ We 
further identified that the components that became part of the 
Department already faced a wide array of existing challenges, and any 
failure to effectively carry out its mission would expose the Nation to 
potentially serious consequences. In designating the implementation and 
transformation of DHS as high-risk, we noted that building an effective 
department would require consistent and sustained leadership from top 
management to ensure the needed transformation of disparate agencies, 
programs, and missions into an integrated organization. Our prior work 
on mergers and acquisitions, undertaken before the creation of DHS, 
found that successful transformations of large organizations, even 
those faced with less strenuous reorganizations than DHS, can take at 
least 5 to 7 years to achieve.
---------------------------------------------------------------------------
    \3\ GAO, High-Risk Series: An Update, GAO-03-119 (Washington, DC: 
January 2003).
---------------------------------------------------------------------------
    In August 2007, we reported on the progress DHS had made since its 
inception in implementing its management and mission functions.\4\ We 
identified specific actions that DHS was to achieve based on 
legislation, homeland security presidential directives, DHS strategic 
planning documents, and other sources, and reported on the progress the 
Department made in implementing these actions.
---------------------------------------------------------------------------
    \4\ GAO, Department of Homeland Security: Progress Report on 
Implementation of Mission and Management Functions, GAO-07-454 
(Washington, DC: Aug. 17, 2007).
---------------------------------------------------------------------------
    My testimony today addresses: (1) The progress made by DHS in 
implementing its management functions in the areas of acquisition, 
financial, human capital, information technology, and real property 
management; and (2) key issues that have affected the Department's 
implementation efforts. My statement is based on the results of our 
August 2007 report evaluating the extent to which DHS has achieved 
congressional and administration expectations set out for them in its 
management and mission areas; selected products we issued on DHS since 
July 2007; and our institutional knowledge of homeland security and 
various government organizational and management issues. For our August 
2007 report on DHS progress, we conducted our work from September 2006 
to July 2007. In April 2008, we updated this work with selected 
reports. We conducted our work in accordance with generally accepted 
government auditing standards. Those standards require that we plan and 
perform the audit to obtain sufficient, appropriate evidence to provide 
a reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives.

                                SUMMARY

    DHS has made progress in implementing its management functions in 
the areas of acquisition, financial, human capital, information 
technology, and real property management. However, we have identified 
challenges remaining in each of these areas.
   DHS has made some progress in strengthening its acquisition 
        management functions. For example, DHS has recognized the need 
        to improve acquisition outcomes and taken some positive steps 
        to organize and assess the acquisition function, but continues 
        to lack clear accountability for the outcomes of acquisition 
        dollars spent. The Department also has not fully ensured proper 
        oversight of its contractors providing services closely 
        supporting inherently government functions.
   In the area of financial management, although it has 
        designated a Chief Financial Officer and taken steps to prepare 
        corrective action plans for its internal control weaknesses, 
        DHS has been unable to obtain an unqualified audit opinion on 
        its financial statements, and for fiscal year 2007, the 
        independent auditor issued a disclaimer on DHS's financial 
        statements and identified significant deficiencies--the 
        majority of which were so serious they qualified as material 
        weaknesses--in DHS's internal control over financial reporting. 
        DHS needs to subject all its financial statements to annual 
        audits and correct the identified internal control weaknesses.
   DHS has taken steps to implement its human capital system. 
        For example, in July 2005 DHS issued a departmental training 
        plan and in April 2007 issued its fiscal year 2007 and 2008 
        Human Capital Operational Plan. However, DHS still needs to 
        implement a human capital system that links to its strategic 
        plan, implement more effective processes to recruit and hire 
        employees with needed skills, establish a market-based and more 
        performance-oriented pay system, seek more routine feedback 
        from employees, and implement its training plan.
   DHS has undertaken efforts to establish various information 
        technology management controls and capabilities. For example, 
        DHS organized information technology management in the Office 
        of the Chief Information Officer, developed an information 
        technology human capital plan that is largely consistent with 
        Federal guidance and best practices, and developed policies and 
        procedures to ensure the protection of sensitive information. 
        However, DHS has not fully implemented a comprehensive 
        information security program. Furthermore, it has not yet fully 
        aligned all of its investments with a comprehensive enterprise 
        architecture or implemented a process to effectively manage its 
        information technology investments.
   In the area of real property management, DHS has developed 
        an Asset Management Plan, developed a generally complete real 
        property data inventory, submitted this inventory for inclusion 
        in the governmentwide real property database, and established 
        performance measures consistent with Federal Real Property 
        standards. However, in August 2007 we reported that DHS had yet 
        to demonstrate full implementation of its asset management plan 
        and full use of asset inventory information and performance 
        measures in management decisionmaking.
    A variety of cross-cutting issues have affected DHS's efforts to 
implement its management functions. For example, DHS has not issued an 
updated strategic plan and has not yet fully developed adequate 
performance measures or put in place structures to help ensure that the 
agency is managing for results. Accountability and transparency are 
critical to effectively implementing DHS's management functions. We 
have experienced delays in obtaining access to needed information from 
DHS components, though over the past year, our access has improved in 
certain areas. We are hopeful that planned revisions to its 
departmental guidance for working with us and its Office of Inspector 
General (IG) will streamline our access to needed documents and agency 
officials.

                               BACKGROUND

    In July 2002, President Bush issued the National Strategy for 
Homeland Security. The strategy set forth overall objectives to prevent 
terrorist attacks within the United States, reduce America's 
vulnerability to terrorism, and minimize the damage and assist in the 
recovery from attacks that occur. The strategy further identified a 
plan to strengthen homeland security through the cooperation and 
partnering of Federal, State, local, and private sector organizations 
on an array of functions. It also specified a number of Federal 
departments, as well as non-Federal organizations, that have important 
roles in securing the homeland, with DHS having key responsibilities in 
implementing established homeland security mission areas. This strategy 
was updated and reissued in October 2007.
    In November 2002, the Homeland Security Act of 2002 was enacted 
into law, creating DHS. The act defined the Department's missions to 
include preventing terrorist attacks within the United States; reducing 
U.S. vulnerability to terrorism; and minimizing the damages, and 
assisting in the recovery from, attacks that occur within the United 
States. The act further specified major responsibilities for the 
Department, including the analysis of information and protection of 
infrastructure; development of countermeasures against chemical, 
biological, radiological, and nuclear, and other emerging terrorist 
threats; securing U.S. borders and transportation systems; and 
organizing emergency preparedness and response efforts. DHS began 
operations in March 2003. Its establishment represented a fusion of 22 
Federal agencies to coordinate and centralize the leadership of many 
homeland security activities under a single department.\5\
---------------------------------------------------------------------------
    \5\ These 22 agencies, offices, and programs were U.S. Customs 
Service; U.S. Immigration and Naturalization Service; Federal 
Protective Service; Transportation Security Administration; Federal Law 
Enforcement Training Center; Animal and Plant Health Inspection 
Service; Office for Domestic Preparedness; Federal Emergency Management 
Agency; Strategic National Stockpile and the National Disaster Medical 
System; Nuclear Incident Response Team; Domestic Emergency Support 
Team; National Domestic Preparedness Office; Chemical, Biological, 
Radiological, and Nuclear Countermeasures Program; Environmental 
Measures Laboratory; National BW Defense Analysis Center; Plum Island 
Animal Disease Center; Federal Computer Incident Response Center; 
National Communications System; National Infrastructure Protection 
Center; Energy Security and Assurance Program; Secret Service; and U.S. 
Coast Guard.
---------------------------------------------------------------------------
    We have evaluated many of DHS's management functions and programs 
since the Department's establishment, and have issued over 400 related 
products. In particular, in August 2007, we reported on the progress 
DHS had made since its inception in implementing its management and 
mission functions.\6\ We also reported on broad themes that have 
underpinned DHS's implementation efforts, such as agency 
transformation, strategic planning, and risk management. Over the past 
5 years, we have made over 900 recommendations to DHS on ways to 
improve operations and address key themes, such as to develop 
performance measures and set milestones for key programs and implement 
internal controls to help ensure program effectiveness. DHS has 
implemented some of these recommendations, taken actions to address 
others, and taken other steps to strengthen its mission activities and 
facilitate management integration.
---------------------------------------------------------------------------
    \6\ GAO-07-454.
---------------------------------------------------------------------------
DHS HAS MADE PROGRESS IN IMPLEMENTING ITS MANAGEMENT FUNCTIONS, BUT HAS 
             FACED CHALLENGES IN ITS IMPLEMENTATION EFFORTS

    DHS has made progress in implementing its management functions in 
the areas of acquisition, financial, human capital, information 
technology, and real property management. Overall, DHS has made more 
progress in implementing its mission functions--border security; 
immigration enforcement; immigration services; and aviation, surface 
transportation, and maritime security; for example--than its management 
functions, reflecting an initial focus on implementing efforts to 
secure the homeland. DHS has had to undertake these critical missions 
while also working to transform itself into a fully functioning cabinet 
department--a difficult undertaking for any organization and one that 
can take, at a minimum, 5 to 7 years to complete even under less 
daunting circumstances. As DHS continues to mature as an organization, 
we have reported that it will be important that it works to strengthen 
its management areas since the effectiveness of these functions will 
ultimately impact its ability to fulfill its mission to protect the 
homeland.
    Acquisition Management.--DHS's acquisition function includes 
managing and overseeing nearly $16 billion in acquisitions to support 
its broad and complex missions, such as information systems, new 
technologies, aircraft, ships, and professional services. DHS has 
recognized the need to improve acquisition outcomes and taken some 
positive steps to organize and assess the acquisition function, but 
continues to lack clear accountability for the outcomes of acquisition 
dollars spent. A common theme in our work on acquisition management is 
DHS's struggle to provide adequate support for its mission components 
and resources for departmentwide oversight. DHS has not yet 
accomplished its goal of integrating the acquisition function across 
the Department. For example, the structure of DHS's acquisition 
function creates ambiguity about who is accountable for acquisition 
decisions because it depends on a system of dual accountability and 
cooperation and collaboration between the Chief Procurement Officer 
(CPO) and the component heads. In June 2007, DHS officials stated that 
they were in the process of modifying the lines of business management 
directive, which exempts the Coast Guard and the Secret Service from 
complying, to ensure that no contracting organization is exempt.\7\ 
This directive has not yet been revised.
---------------------------------------------------------------------------
    \7\ GAO, Department of Homeland Security: Progress and Challenges 
in Implementing the Department's Acquisition Oversight Plan, GAO-07-900 
(Washington, DC: June 13, 2007).
---------------------------------------------------------------------------
    In September 2007, we reported on continued acquisition oversight 
issues at DHS, identifying that the Department has not fully ensured 
proper oversight of its contractors providing services closely 
supporting inherently government functions.\8\ The CPO has established 
a Department-wide program to improve oversight; however, DHS has been 
challenged to provide the appropriate level of oversight and management 
attention to its service contracting and major investments, and we 
continue to be concerned that the CPO may not have sufficient authority 
to effectively oversee the Department's acquisitions. DHS still has not 
developed clear and transparent policies and processes for all 
acquisitions. Concerns have been raised about how the investment review 
process has been used to oversee its largest acquisitions, and the 
investment review process in still under revision. We have ongoing work 
reviewing oversight of DHS's major investments which follows-up on our 
prior recommendations.\9\ Regarding the acquisition workforce, our work 
and the work of the DHS IG has found acquisition workforce challenges 
across the Department; we have ongoing work in this area as well.
---------------------------------------------------------------------------
    \8\ GAO, Department of Homeland Security: Improved Assessment and 
Oversight Needed to Manage Risk of Contracting for Selected Services, 
GAO-07-990 (Washington, DC: Sept. 17, 2007).
    \9\ GAO, Homeland Security: Successes and Challenges in DHS's 
Efforts to Create an Effective Acquisition Organization, GA0-05-179 
(Washington, DC: Mar. 29, 2005).
---------------------------------------------------------------------------
    Financial Management.--DHS's financial management efforts include 
consolidating or integrating component agencies' financial management 
systems. DHS has made progress in addressing financial management and 
internal control weaknesses and has designated a Chief Financial 
Officer, but the Department continues to face challenges in these 
areas. However, since its establishment, DHS has been unable to obtain 
an unqualified or ``clean'' audit opinion on its financial statements. 
For fiscal year 2007, the independent auditor issued a disclaimer on 
DHS's financial statements and identified eight significant 
deficiencies in DHS's internal control over financial reporting, seven 
of which were so serious that they qualified as material 
weaknesses.\10\ DHS has taken steps to prepare corrective action plans 
for its internal control weaknesses by, for example, developing and 
issuing a Department-wide strategic plan for the corrective action plan 
process and holding workshops on corrective action plans. While these 
are positive steps, DHS and its components have not yet fully 
implemented corrective action plans to address all significant 
deficiencies--including the material weaknesses--identified by previous 
financial statement audits. According to DHS officials, the Department 
has developed goals and milestones for addressing these weaknesses in 
its internal control over financial reporting. Until these weaknesses 
are resolved, DHS will not be in position to provide reliable, timely, 
and useful financial data to support day-to-day decisionmaking.
---------------------------------------------------------------------------
    \10\ A material weakness is a significant deficiency, or a 
combination of significant deficiencies, that result in more than a 
remote likelihood that a material misstatement of the financial 
statements will not be prevented or detected. A significant deficiency 
is a control deficiency, or combination of control deficiencies, that 
adversely affects the entity's ability to initiate, authorize, record, 
process, or report financial data reliably in accordance with generally 
accepted accounting principles such that there is more than a remote 
likelihood that a misstatement of the entity's financial statements 
that is more than inconsequential will not be prevented or detected.
---------------------------------------------------------------------------
    Human Capital Management.--DHS's key human capital management areas 
include pay, performance management, classification, labor relations, 
adverse actions, employee appeals, and diversity management. DHS has 
significant flexibility to design a modern human capital management 
system, and in October 2004 DHS issued its human capital strategic 
plan. DHS and the Office of Personnel Management jointly released the 
final regulations on DHS's new human capital system in February 2005. 
Although DHS intended to implement the new personnel system in the 
summer of 2005, court decisions enjoined the Department from 
implementing certain labor management portions of the system. DHS has 
since taken actions to implement its human capital system. In July 2005 
DHS issued its first departmental training plan, and in April 2007, it 
issued its fiscal year 2007 and 2008 Human Capital Operational Plan. 
This plan identifies five Department priorities--hiring and retaining a 
talented and diverse workforce; creating a DHS-wide culture of 
performance; creating high-quality learning and development programs 
for DHS employees; implementing a DHS-wide integrated leadership 
system; and being a model of human capital service excellence. DHS has 
met some of the goals identified in the plan, such as developing a 
hiring model and a communication plan. However, more work remains for 
DHS to fully implement its human capital system. For example, DHS has 
not yet taken steps to fully link its human capital planning to overall 
agency strategic planning nor has it established a market-based and 
more performance-oriented pay system. DHS has also faced difficulties 
in developing and implementing effective processes to recruit and hire 
employees. Although DHS has developed its hiring model and provided it 
to all components, we reported in August 2007 that DHS had not yet 
assessed components' practices against the model.\11\ Furthermore, 
employee morale at DHS has been low, as measured by the results of the 
2006 U.S. Office of Personnel Management Federal Human Capital Survey. 
DHS has taken steps to seek employee feedback and involve them in 
decisionmaking by, for example, expanding its communication strategy 
and developing an overall strategy for addressing employee concerns 
reflects in the survey results. In addition, although DHS has developed 
a Department-level training strategy, it has faced challenges in fully 
implementing this strategy.
---------------------------------------------------------------------------
    \11\ GAO-07-454.
---------------------------------------------------------------------------
    Information Technology Management.--DHS's information technology 
management efforts should include:
   Developing and using an enterprise architecture, or 
        corporate blueprint, as an authoritative frame of reference to 
        guide and constrain system investments;
   Defining and following a corporate process for informed 
        decision-making by senior leadership about competing 
        information technology investment options;
   Applying system and software development and acquisition 
        discipline and rigor when defining, designing, developing, 
        testing, deploying, and maintaining systems;
   Establishing a comprehensive, Department-wide information 
        security program to protect information and systems;
   Having sufficient people with the right knowledge, skills, 
        and abilities to execute each of these areas now and in the 
        future; and,
   Centralizing leadership for extending these disciplines 
        throughout the organization with an empowered Chief Information 
        Officer.
    DHS has undertaken efforts to establish and institutionalize the 
range of information technology management controls and capabilities 
noted above that our research and past work have shown are fundamental 
to any organization's ability to use technology effectively to 
transform itself and accomplish mission goals. For example, DHS has 
organized roles and responsibilities for information technology 
management under the Chief Information Officer. DHS has also developed 
an information technology human capital plan that is largely consistent 
with Federal guidance and associated best practices. In particular, we 
reported that the plan fully addressed 15 and partially addressed 12 of 
27 practices set forth in the Office of Personnel Management's human 
capital framework. However, we reported that DHS's overall progress in 
implementing the plan had been limited. With regard to information 
technology investment management, DHS has established a management 
structure to help manage its investments. However, DHS has not always 
fully implemented any of the key practices our information technology 
investment management framework specifies as being needed to actually 
control investments. Furthermore, DHS has developed an enterprise 
architecture, but we have reported that major DHS information 
technology investments have not been fully aligned with DHS's 
enterprise architecture. In addition, DHS has not fully implemented a 
comprehensive information security program. While it has taken actions 
to ensure that its certification and accreditation activities are 
completed, the Department has not shown the extent to which it has 
strengthened incident detection, analysis, and reporting and testing 
activities.
    Real Property Management.--DHS's responsibilities for real property 
management are specified in Executive Order 13327, ``Federal Real 
Property Asset Management,'' and include the establishment of a Senior 
Real Property Officer, development of an asset inventory, and 
development and implementation of an asset management plan and 
performance measures. In June 2006, the Office of Management and Budget 
upgraded DHS's Real Property Asset Management Score from red to yellow 
after DHS developed an Asset Management Plan, developed a generally 
complete real property data inventory, submitted this inventory for 
inclusion in the governmentwide real property inventory database, and 
established performance measures consistent with Federal Real Property 
Council standards.\12\ DHS also designated a Senior Real Property 
Officer. However, in August 2007 we reported that DHS had yet to 
demonstrate full implementation of its asset management plan and full 
use of asset inventory information and performance measures in 
management decisionmaking.\13\
---------------------------------------------------------------------------
    \12\ The administration's agency scorecard for real property 
management was established in fiscal year 2004 to measure each agency's 
progress in implementing Executive Order 13327 on ``Federal Real 
Property Asset Management.''
    \13\ GAO-07-454.
---------------------------------------------------------------------------
    CROSS-CUTTING ISSUES HAVE HINDERED DHS'S IMPLEMENTATION EFFORTS

    Our work has identified various cross-cutting issues that have 
hindered DHS's progress in its management areas. We have reported that 
while it is important that DHS continue to work to strengthen each of 
its core management functions, it is equally important that these key 
issues be addressed from a comprehensive, Department-wide perspective 
to help ensure that the Department has the structure and processes in 
place to effectively address the threats and vulnerabilities that face 
the Nation. These issues include agency transformation, strategic 
planning and results management, and accountability and transparency.
    Agency Transformation.--In 2007 we reported that DHS's 
implementation and transformation remained high-risk because DHS had 
not yet developed a comprehensive management integration strategy and 
its management systems and functions especially related to acquisition, 
financial, human capital, and information technology management were 
not yet fully integrated and wholly operational.\14\ We have 
recommended, among other things, that agencies on the high-risk list 
produce a corrective action plan that defines the root causes of 
identified problems, identifies effective solutions to those problems, 
and provides for substantially completing corrective measures in the 
near term. Such a plan should include performance metrics and 
milestones, as well as mechanisms to monitor progress. In March 2008 we 
received a draft of DHS's corrective action plan and have provided the 
Department with some initial feedback. We will continue to review the 
plan and expect to be able to provide additional comments on the plan 
in the near future.
---------------------------------------------------------------------------
    \14\ GAO, High-Risk Series: An Update, GAO-07-310 (Washington, DC: 
January 2008).
---------------------------------------------------------------------------
    Strategic Planning and Results Management.--DHS has not always 
implemented effective strategic planning efforts, has not yet issued an 
updated strategic plan, and has not yet fully developed adequate 
performance measures or put into place structures to help ensure that 
the agency is managing for results. DHS has developed performance goals 
and measures for some of its programs and reports on these goals and 
measures in its Annual Performance Report. However, some of DHS's 
components have not developed adequate outcome-based performance 
measures or comprehensive plans to monitor, assess, and independently 
evaluate the effectiveness of their plans and performance. Since 
issuance of our August 2007 report, DHS has begun to develop 
performance goals and measures for some areas in an effort to 
strengthen its ability to measures its progress in key management and 
mission areas. We commend DHS's efforts to measure its progress in 
these areas and have agreed to work with the Department to provide 
input to help strengthen established measures.
    Accountability and Transparency.--Accountability and transparency 
are critical to the Department effectively integrating its management 
functions and implementing its mission responsibilities. We have 
reported that it is important that DHS make its management and 
operational decisions transparent enough so that Congress can be sure 
that it is effectively, efficiently, and economically using the 
billions of dollars in funding it receives annually.\15\ We have 
encountered delays at DHS in obtaining access to needed information, 
which have impacted our ability to conduct our work in a timely manner. 
Since we highlighted this issue last year to this subcommittee, our 
access to information at DHS has improved. For example, TSA has worked 
with us to improve its process for providing us with access to 
documentation. DHS also provided us with access to its national level 
preparedness exercise. Moreover, in response to the provision in the 
DHS Appropriations Act, 2008, that restricts a portion of DHS's funding 
until DHS certifies and reports that it has revised its guidance for 
working with GAO.\16\ DHS has provided us with a draft version of its 
revised guidance. We have provided DHS with comments on this draft and 
look forward to continuing to collaborate with the Department.
---------------------------------------------------------------------------
    \15\ GAO-07-454.
    \16\ Consolidated Appropriations Act, 2008, Pub. L. No. 110-161, 
Div. E, 121 Stat. 1844, 2042 (2007) (requiring further that DHS define 
in a memorandum to its employees the roles and responsibilities of the 
DHS IG).
---------------------------------------------------------------------------
                        CONCLUDING OBSERVATIONS

    DHS is now 5 years old, a key milestone for the Department. Since 
its establishment, DHS has had to undertake actions to secure the 
border and the transportation sector and defend against, prepare for, 
and respond to threats and disasters while simultaneously working to 
transform itself into a fully functioning cabinet department. Such a 
transformation is a difficult undertaking for any organization and can 
take, at a minimum, 5 to 7 years to complete even under less daunting 
circumstances.
    Nevertheless, DHS's 5-year anniversary provides an opportunity for 
the Department to review how it has matured as an organization. As part 
of our broad range of work reviewing DHS management and mission 
programs, we will continue to assess in the coming months DHS's 
progress in addressing high-risk issues. In particular, we will 
continue to assess the progress made by the Department in its 
transformation and information sharing efforts, and assessing whether 
any progress made is sustainable over the long term. Further, as DHS 
continues to evolve and transform, we will review its progress and 
performance and provide information to Congress and the public on its 
efforts.
    This concludes my prepared statement. I would be pleased to answer 
any questions you and the subcommittee Members may have.

    Mr. Carney. Thank you for your testimony.
    I now recognize Mr. Ervin, to summarize his statement, for 
5 minutes.

  STATEMENT OF CLARK KENT ERVIN, DIRECTOR, HOMELAND SECURITY 
                  PROGRAM, THE ASPEN INSTITUTE

    Mr. Ervin. Thank you very much, Mr. Chairman and Mr. 
Rogers, for inviting me to testify today.
    Certainly, the Department has made some progress in its 
initial 5 years in becoming more efficient, more economical and 
more effective. But no one argue with the proposition that DHS 
still has far to go.
    There are any number of things that can and should be done 
to improve DHS' organizational managerial performance, but 
since time is limited, let me highlight just a few.
    First, part of the reason the Department has been less than 
the sum of its parts is that key legacy agencies retain 
considerable autonomy over their own finances, information 
technology networks, and procurement systems. This promotes 
duplication, a lack of interoperability and other 
inefficiencies, and it works against the goal of integrating 
DHS' disparate parts into a cohesive whole.
    The Department's chief procurement officer, chief financial 
officer, and chief information officer do not control--which is 
to say, have the power to hire, fire, and set the budget of--
their counterparts at TSA, FEMA, ICE, CBP, and the Coast Guard.
    Instead, these critical administrative personnel at the 
component level are controlled by their respective component 
heads. With a pen stroke, the new secretary could, and in my 
judgment, should change this.
    Second, controls should be put in place to ensure that no 
more precious contract dollars are wasted. A new secretary 
should, for example, forbid the use by procurement officers of 
no-bid contracts. Such contracts, it seems to me, are never 
justified.
    Even if procurement officers are certain that only one 
contractor can satisfy particular requirements, there is no 
harm in opening the contract for bid. Perhaps there are other, 
previously unknown, contractors who can supply the good or 
service equally well and at lesser cost.
    Further, there should be incentives built into every 
contract for good performance--which is to say, timeliness, 
staying within budget, and delivering the promised result--and 
penalties, financial or otherwise, including, under appropriate 
circumstances, criminal prosecution, for consistently poor 
performance.
    Contractors who consistently miss the mark should be barred 
for a period of time from bidding on new contracts, and to 
counter the corrupting influence of the revolving door, bids 
from former DHS insiders should be disfavored, other things 
being equal.
    DHS should not allow contractors to determine its contract 
requirements, as it has done repeatedly. If contractors are 
allowed to tell customers what they want and need, chances are 
the customer will wind up with something it neither wants nor 
needs.
    Furthermore, while the number of procurement officials has 
been increased, it should be increased still further. While, of 
course, no government agency can ever match private sector 
salaries, congressional authority should be sought by DHS to 
pay hefty bonuses and to offer other attractive benefits so as 
to narrow the gap as much as possible between private sector 
procurement experts and DHS ones.
    Competent and experienced DHS contracting officers in 
sufficient numbers are, of course, critical to ensuring that 
contracts are structured and managed in a way that most 
benefits the taxpayer.
    While the Department has too few employees managing 
contractors, it has too many contractors essentially managing 
it. Indeed, the job of some contractors at DHS is to oversee 
other contractors.
    In short, to ensure that the sole interest in mind is that 
of the taxpayer, the Department should have more employees and 
fewer contractors. Contractors should not be performing 
inherently governmental functions, and no function is more 
inherently governmental than overseeing other contractors.
    Finally, the new secretary should make a conspicuous point 
of urging all personnel to cooperate fully with the inspector 
general and with the comptroller general with regard to 
inspections, audits, and investigations by those offices, and 
there should be consequences for personnel who fail to do so, 
up to and including, under appropriate circumstances, 
termination.
    On a regular basis, but no less frequently than quarterly, 
the new secretary himself or herself should meet with the IG 
and the comptroller general to be personally apprised of 
important findings and to monitor the Department's progress--or 
lack thereof--toward implementing their respective 
recommendations.
    The IG and the comptroller general should not be viewed as 
pests or antagonists, but as management consultants, 
indispensable ones, who are full partners in making the 
Department operate as efficiently, economically and effectively 
as possible.
    Thank you very much, and I look forward to your questions.
    [The statement of Mr. Ervin follows:]

                 Prepared Statement of Clark Kent Ervin
                             April 9, 2008

    Thank you very much, Mr. Chairman and Members for inviting me to 
testify today before the subcommittee on the topic, ``Moving Beyond the 
First Five Years: Solving the Department of Homeland Security's 
Management Challenges.''
    Certainly, the Department has made some progress in its initial 5 
years in becoming more efficient, more economical, and more effective. 
But, no one would argue with the proposition that DHS still has far to 
go. With a new administration less than a year away, now is an 
appropriate time to consider what the Department's next steps should be 
on the necessarily long journey toward optimal performance.
    There are any number of things that can and should be done to 
improve DHS' organizational performance. But, since time is limited, 
let me highlight only a few.
    First, part of the reason the Department has been less than the sum 
of its parts is that key legacy agencies retain considerable autonomy 
over their own finances, information technology networks, and 
procurement systems. This promotes duplication, a lack of 
interoperability and other inefficiencies, and it works against the 
goal of integrating DHS' disparate parts into a cohesive whole. The 
Department's Chief Procurement Officer, Chief Financial Officer, and 
Chief Information Officer do not control (i.e., have the power to hire, 
fire, and set the budget of) their counterparts at TSA, FEMA, ICE, CBP, 
and the Coast Guard. Instead, these critical administrative personnel 
at the component level are controlled by their respective component 
heads. With a pen stroke, the new Secretary can and should change this.
    Second, controls should be put in place to ensure that no more 
precious contract dollars are wasted. The new Secretary should, for 
example, forbid the use by procurement officers of no-bid contracts. 
Such contracts are never justified. Even if procurement officers are 
certain that only one contractor can satisfy particular requirements, 
there is no harm in opening the contract for bid. Perhaps there are 
other, previously unknown, contractors who can supply the good or 
service equally well and at lesser cost. Further, there should be 
incentives built into every contract for ``good'' performance (i.e., 
timeliness, staying within budget, and delivering the promised result), 
and penalties (financial or otherwise, including, under appropriate 
circumstances, criminal prosecution) for poor performance. Contractors 
who consistently miss the mark should be barred for a period of time 
from bidding on new contracts. To counter the corrupting influence of 
the ``revolving door,'' bids from former DHS insiders should be 
disfavored, other things being equal. DHS should not allow contractors 
to determine its contract requirements, as it has done repeatedly. If 
contractors are allowed to tell customers what they want and need, 
chances are the customer will wind up with something it neither wants 
nor needs.
    Furthermore, the number of procurement officials should be 
increased significantly. While no government agency can ever match 
private sector salaries, congressional authority should be sought by 
DHS to pay hefty bonuses and to offer other attractive benefits so as 
to narrow the gap as much as possible between private sector 
procurement experts and DHS ones. Competent and experienced DHS 
contracting officers in sufficient numbers are critical to ensuring 
that contracts are structured and managed in a way that most benefits 
the taxpayer.
    While the Department has too few employees managing contractors, it 
has too many contractors essentially managing it. Last spring, the 
Chairman of the House Committee on Oversight and Government Reform said 
that DHS leaders conceded to him at a hearing that they had ``no idea'' 
how many contractors work for the Department. (That might be a good 
question to pose to our Department witnesses today.) The GAO has chided 
DHS for contracting out ``inherently governmental'' functions, and no 
wonder. As The Washington Post put it in an article last October, ``At 
the Department of Homeland Security, contract employees help write job 
descriptions for new headquarters workers. Private contractors also 
sign letters that officially offer employment. And, they meet new hires 
on the first day of the job. About the only thing they do not do is 
swear-in DHS employees.'' Indeed, the job of some contractors at DHS is 
to oversee other contractors. In short, to ensure that the sole 
interest in mind is that of the taxpayer, the Department should have 
more employees and fewer contractors. Contractors should not be 
performing inherently governmental functions, and no function is more 
``inherently governmental'' than overseeing other contractors.
    Finally, the new Secretary should make a conspicuous point of 
urging all personnel to cooperate fully with all Inspector General and 
GAO inspections, audits, and investigations, and there should be 
consequences for personnel who fail to do so, up to and including, 
under appropriate circumstances, termination. On a regular basis, but 
no less frequently than quarterly, the Secretary himself/herself should 
meet with the IG and the Comptroller General to be personally apprised 
of important findings and to monitor the Department's progress (or lack 
thereof) toward implementing their respective recommendations. The IG 
and the Comptroller General should not be viewed as pests or 
antagonists, but as management consultants, indispensable ones, who are 
full partners in making the Department operate as effectively, 
efficiently, and economically as possible.
    Thank you, again, for your invitation today, and I look forward to 
your questions.

    Mr. Carney. I thank you for your testimony.
    I now recognize Dr. Carafano, to summarize his statement, 
for 5 minutes.

  STATEMENT OF JAMES JAY CARAFANO, SENIOR RESEARCH FELLOW IN 
     DEFENSE AND HOMELAND SECURITY, THE HERITAGE FOUNDATION

    Mr. Carafano. So the Final Four is over, the right team 
won--but more importantly, I want to talk about the Final Five, 
which is what I think should be a subject for the committee, 
which are the five priorities I think are absolutely essential 
for moving the Department forward.
    Three of them are immediate, short-term things that should 
be run right now, and two of them, I think, are long-term 
projects in which I think that committee could play a 
significant leadership role.
    No. 1, and absolutely I think the most single and vital 
important thing is consolidation of oversight of the Department 
under the Homeland Security Committee. This is often said, but 
we don't focus often enough on why this is essential.
    It is not that people have to run around and testify before 
dozens of different committees. Homeland security is 
fundamentally a risk-based process. It is a holistic, strategic 
process, and that cannot be done when you have multiple forces 
pulling in multiple directions.
    The problem is every committee is going to define risk and 
define priorities to suits its own interests, and you don't 
have that holistic look.
    The only way--if everything is a priority, if nothing is a 
priority--until we have consolidation of oversight and 
responsibility in single committees in the House and the 
Senate, we are never going to have the Homeland Security 
Department function in the manner that the Defense Department 
functions, and that is going to put the Nation at risk.
    Second, and I think equally important, is there is an awful 
lot of work to be done in oversight. The authorization bill is 
absolutely, I think, the right instrument to do that. Again, I 
think that is a lesson learned from the Department of Defense.
    I think this committee's work, for example, on procurement 
and contracting is a perfect example, and an authorization type 
measure is exactly the kind of vehicle you would use to kind of 
institute the kind of leadership from the Congress that you 
want in these matters.
    I have got a book coming out in September called ``Private 
Sector, Public Works'', looking at contracting. Primarily the 
Defense Department in Iraq and Afghanistan, the fundamental 
conclusion of the book is where there are large, significant 
problems, it is usually because the government simply is not a 
very good customer.
    It is simply when you go to the bench and look at the depth 
of the contracting force, the management tools that they have, 
they are simply not there. So again, an authorization measure I 
think is the absolute best instrument to do that.
    The third--all the debate about Iraq aside--it is time for 
a strategic pause. DHS has not been through one major 
organization. It has been through three. We had the initial 
organization, which was I think we would all admit now a deeply 
flawed structure in the initial enabling legislation.
    Secretary Chertoff initiated a second major series of 
reforms, and then even before those had fully taken hold, 
Congress over the last 18 months has instituted what really 
constitutes a third great wave of reform, so that there is 
simply far too much turmoil in the Department structure to 
warrant a major reorganization at this point.
    I would further argue that, because the Department now has 
the obligation of doing a quadrennial security review, I think 
that review should be the fundamental tool for the Congress and 
the Department to dialog on the way forward.
    That review comes out in 2009, and if there is a lesson 
that we could learn from where the QDR, the Quadrennial Defense 
Review, has gone wrong, it is that it shouldn't be a report 
that is dumped on your desk.
    There should be an ongoing dialog, starting right now, with 
the Department and the committees about understanding that 
document, what is going to be in it, how you are going to talk 
about it and how you are going to move forward. I think that 
document should really be the basis for the move forward.
    So if there is one overwhelming recommendation I would give 
today, it is how the dialog now about the QSR--make the QSR a 
dialog and a process, and not just a report.
    Very quickly, two long-term projects. I think, No. 1, that 
the real gains are not going to be really made through 
further--there are going to be improvements, reorganization of 
the Department, but we really need to look at the national 
homeland security enterprise.
    We are working together with the Center for Strategic 
International Studies, doing a report called ``Homeland 
Security 3.0.'' We have identified areas where nationally we as 
a country can and should do better.
    While, again, that would be far beyond the purview of this 
committee, I think this committee can play a real leadership 
role in the national discussion of where we need to go next. We 
hope to have that report done in September, and we would love 
to come back and talk to you about that.
    The last thing I will mention very quickly is, again, the 
bigger bang for the buck is actually going to be outside the 
Department, not just in terms of being part of the national 
homeland security enterprise, but being part of an effective 
Federal interagency team.
    So many of the areas where we really want substantive 
improvement, things that are really important, like 
catastrophic disaster response, it is an interagency mission, 
and I think that will be a big part of the dialog in the year 
ahead.
    Just to finish up, I would say that I don't think we need 
to throw away the Constitution. I don't think we need to 
reorganize the Federal Government to achieve effective 
interagency operations.
    I think there is a model building through professional 
development and a combination of education, assignment and 
accreditation, where we can build the kind of workforce that 
can provide us the integrated solutions that we really want 
from our Federal Government.
    Thank you very much, Mr. Chairman.
    [The statement of Mr. Carafano follows:]

                Prepared Statement of James Jay Carafano
                             April 9, 2008

    My name is Dr. James Jay Carafano. I am the Assistant Director of 
the Kathryn and Shelby Cullom Davis Institute for International Studies 
and a Senior Research Fellow for the Douglas and Sarah Allison Center 
for Foreign Policy Studies at The Heritage Foundation. The views I 
express in this testimony are my own, and should not be construed as 
representing any official position of The Heritage Foundation.
    Thank you for the opportunity to appear before the committee today 
to discuss the subject of this hearing, ``Moving Beyond the First Five 
Years: Solving the Department of Homeland Security's Management 
Challenges.'' I would like to raise with the committee three immediate 
priorities for Congress to tackle, as well as two long-term challenges 
that should be among the first priorities of the next administration.
    The three immediate priorities are:
   Consolidating Congressional oversight of the Department of 
        Homeland Security (DHS);
   Passing homeland security authorization legislation to 
        better structure the Department's oversight role; and
   Restraining further major organizational changes within the 
        Department.
     Two long-term projects for Congress and the next administration to 
undertake must include:
   Establishing the national homeland security enterprise; and
   Improving Federal interagency operations.

 1. PUT FIRST THINGS FIRST--CONSOLIDATE CONGRESSIONAL OVERSIGHT OF THE 
                    DEPARTMENT OF HOMELAND SECURITY

    Arguably, many of the most significant challenges in effectively 
managing DHS have resulted from disparate and, at times, contradictory 
direction from Congress. This has resulted in a plethora of unrealistic 
mandates and endless tinkering by various congressional committees. 
Therefore, the first and most productive objective should be to address 
the lack of effective congressional leadership.
    Congress has failed to consolidate jurisdiction of DHS under one 
committee in each chamber as recommended by the 9/11 Commission Report. 
Homeland Security Department officials report to a plethora of 
committees that offer conflicting and competing guidance. Committees 
continue to tinker with the Department, moving offices and adding 
missions. Committees other than the homeland security committees still 
retain jurisdiction over major parts of the Department, including the 
Coast Guard. Consolidating jurisdiction in a single committee in each 
chamber will resolve these and other coordination problems.

             2. PASS A HOMELAND SECURITY AUTHORIZATION BILL

    Congress not only needs to reform the structure of its oversight 
but its form as well. Next to defense, arguably the most important 
congressional responsibility is ensuring that the Federal Government 
has the resources and guidance needed to fulfill its domestic security 
role. Congress created the Department of Homeland Security in 2002; 
however, it has yet to pass a homeland security authorization bill--an 
inexcusable shortfall.
    To its credit, the House Committee on Homeland Security has drafted 
authorization legislation every year since the Department's inception, 
but the measure has never been taken up by the Senate. Congress must 
make it a priority to improve and pass DHS authorization legislation.
    The United States is waging a long battle against transnational 
terrorism. Congress must pay consistent and close attention to homeland 
security through the authorization process. Passing an annual 
authorization bill and further consolidating jurisdiction over DHS 
would show that Congress takes its responsibilities seriously.
    Priorities for the authorization measure should be to:
   Ensure the completion of requirements established in the 
        Homeland Security Act of 2002;
   Complete reforms of the secretariat articulated in the 
        Secretary's Second Stage Review; and
   Reconsider the plethora of operational mandates imposed on 
        the Department.
    Build a State-Based Regional Response Network.--An authorization 
bill could well begin by addressing fundamental requirements for DHS 
first established in its enabling legislation. One area in which 
Congress could speak is on the lack of DHS follow-through in 
establishing a cooperative State-based regional response network. Such 
a network is an essential next step in building the kind of national 
security enterprise the Nation needs.\1\
---------------------------------------------------------------------------
    \1\ For more information on setting up DHS regional offices, see 
The Heritage Foundation and The George Washington University Homeland 
Security Policy Institute Task Force, ``Empowering America: A Proposal 
for Enhancing Regional Preparedness,'' Heritage Foundation Special 
Report No. 6, April 7, 2006, at www.heritage.org/Research/
HomelandDefense/SR06.cfm; and Jill D. Rhodes and James Jay Carafano, 
``State and Regional Responses to Disasters: Solving the 72-Hour 
Problem'' Heritage Foundation Backgrounder No. 1962, August 21, 2006, 
at www.heritage.org/Research/HomelandSecurity/bg1962.cfm#_ftn2.
---------------------------------------------------------------------------
    The rationale for a stronger cooperative regional network based on 
the States rather than Washington is based on the nature of national 
disaster response. On average, the Federal Government needs 72 hours to 
marshal national resources in response to an incident that has 
surpassed a State's response capacity.
    Usually, a 72-hour delay is not a problem. State and local 
governments manage most of the responders that arrive immediately at a 
disaster scene and, in most circumstances, have the critical assets 
needed to carry themselves through the first 3 days. This was largely 
the case even during terrorist attacks, such as the bombing of the 
Alfred P. Murrah Federal Building in Oklahoma City and both attacks on 
the World Trade Center in New York City. On the other hand, when 
catastrophic disasters overwhelm State and local governments at the 
outset, as in the aftermath of Hurricane Katrina, the 72-hour buffer 
disappears, and any delays in a coordinated Federal, State, and local 
response have serious consequences.
    Better planning at a regional level could prevent such shortfalls 
in disaster response. Such efforts should take the form of State-based 
regional programs that focus on ensuring that States are prepared to 
sustain themselves and that facilitate cooperation among Federal, 
State, and local efforts. In the Homeland Security Act of 2002, 
Congress mandated that the Department of Homeland Security set up a 
regional structure--though the Department did follow through on this 
mandate. Such a structure that coordinates and collaborates with State-
based regional programs could help to close the 72-hour gap.
    State-based regional programs would focus on ensuring that States 
are prepared to sustain themselves. Through regional programs, States 
could learn the capabilities of their partnering States and quickly tap 
or merge resources as needed. Most recent writing on the development of 
regional plans, programs, and entities provides for a top-down approach 
in which the Federal Government heads the effort. However, a top-down 
approach may lead to many of the same problems that have occurred 
during the past few years, such as the potential marginalization of the 
States by the Federal Government in emergency planning and response and 
an overall lack of situational awareness about particular State 
nuances.
    Successful regional programs would focus not on Federal structures 
in each region, but rather on regional emergency management programs 
and capabilities that are developed, coordinated, and managed by the 
States. Similar small-scale programs that use a regional model, such as 
the Emergency Management Assistance Compact (EMAC), have already proven 
successful. The regional program developed below expands on the idea 
and focus of EMAC.
    DHS regional offices should be required to strengthen State and 
local preparedness capabilities; facilitate regional cooperation among 
governments, the private sector, and non-governmental organizations; 
and plan and exercise with Federal entities that support regional 
disaster response. Such offices would enable regions to access and 
integrate their capabilities quickly and improve preparedness.
    DHS regional offices would have four key missions:
   Facilitating regional planning,
   Organizing regional exercises, training, and doctrine and 
        professional development,
   Helping States and local communities to prepare for 
        catastrophic events, and
   Coordinating critical infrastructure protection.
    Establish an Under Secretary for Homeland Security.--Chief among 
the findings in the Second Stage Review was the importance of 
establishing a secretariat with the capacity of overseeing the 
Department's many activities. One of the most important requirements 
identified in the review remains unfulfilled--establishing an Under 
Secretary for Policy and Planning.
    Since the Department of Homeland Security was created, many have 
come to recognize that the agency needs a high-level, high-powered 
office to develop policies that bind the more than 22 Federal entities 
consolidated within the Department, to coordinate with other Federal 
agencies, and to manage international affairs for the Department. 
Congress has yet to authorize an under secretary for the Department to 
supervise these activities.
    This shortfall is inexcusable. The policy and planning requirements 
of the Department have proven broad in scope and vital in execution, 
from managing affairs overseas to attending to the needs of State and 
local governments and the private sector. Particularly important is the 
imperative of completing comprehensive national disaster planning. Six 
years after September 11, 2001, the Federal Government still lacks a 
comprehensive regime for planning and preparing for large-scale 
disasters.
    In part, this shortfall is the product of an inadequate interagency 
process, the means by which Federal agencies organize and cooperate 
with one another and their partners in State and local government and 
the private sector. Fixing the problem will require renewed vigor from 
the administration in setting clear policy guidelines, particularly in 
implementing a National Exercise Program, emphasizing the priority of 
interagency disaster preparedness for the National Planning Scenarios, 
and improving professional development.\2\ Accomplishing these tasks 
requires the leadership of a homeland security department leader with 
suitable rank and scope of responsibility.
---------------------------------------------------------------------------
    \2\ For recommendations see, Matt A. Mayer and James Jay Carafano, 
``National Disaster Planning Slowed by Inadequate Interagency 
Process,'' Heritage Foundation Backgrounder No. 2079, October 24, 2007, 
at www.heritage.org/Research/HomelandDefense/bg2079.cfm.
---------------------------------------------------------------------------
    Rethink Container Security Mandate.--Finally, Congress should begin 
to systematically review some of its most impractical mandates. In 
2006, Congress mandated the Secured Freight Initiative to test the 
efficacy of inspecting 100 percent of shipping containers coming from 
overseas for terrorist threats. The current system, set by the 
Container Security Initiative, scans only ``high-risk'' containers. In 
2007, Congress proceeded to mandate 100 percent inspection even before 
the tests had started. This shortfall should be addressed in 
authorization legislation.
    Congress should establish an independent, bipartisan commission to 
study the results of the Secure Freight Initiative and the mandate for 
100 percent screening of shipping containers and air cargo. This 
commission should assess the likely threats and look into alternatives 
for securing global supply chains. The commission should report its 
findings after the 2008 Presidential elections. Congress could then 
return to the issue in early 2009 with the politics of the election 
behind it. Based on the results of the commission's recommendations, 
Congress should then modify the 100 percent mandate so that U.S. policy 
bolsters security and prosperity equally well.

                    3. END UNWARRANTED RESTRUCTURING

    One of the most troubling practices of Congress has been to 
periodically impose reorganization mandates on DHS. The constant 
turmoil imposed on the Department of Homeland Security has adversely 
affected operations distracted the leadership, and slowed the process 
of establishing effective processes and procedures. The first priority 
of Congress should be to end unwarranted tinkering.
    Particularly problematic are continuing calls to move the Federal 
Emergency Management Agency (FEMA) out of the Department. Such 
proposals misread the lessons of Katrina and fail to comprehend the 
true nature of the Federal role in disaster response.\3\ Moving FEMA 
out of the Department or any other major restructuring at this time 
would only further slow the development of the Department as an 
effective organization. At the very least, Congress should impose a 
moratorium on restructuring or rethinking the Department's roles and 
missions until after the Department delivers and Congress deliberates 
on the first Quadrennial Security Review.
---------------------------------------------------------------------------
    \3\ See James Jay Carafano and Matt A. Mayer, ``FEMA and 
Federalism: Washington Is Moving in the Wrong Direction,'' Heritage 
Foundation Backgrounder No. 2032, May 8, 2007, at www.heritage.org/
Research/HomelandDefense/bg2032.cfm; and James Jay Carafano, 
``Improving the National Response to Catastrophic Disaster,'' Heritage 
Foundation Testimony, September 15, 2005, at www.heritage.org/Research/
HomelandSecurity/tst091505a.cfm.
---------------------------------------------------------------------------
    Beyond the short-term priorities of consolidating congressional 
jurisdiction; establishing authorization legislation; and refraining 
from restructuring the Department, Congress should began to look to the 
long-term demands of homeland security. Here there are two areas worthy 
of attention: (1) Establishing a national homeland security enterprise; 
and (2) improving interagency operations.

                         HOMELAND SECURITY 3.0

    For future improvements to homeland security, Congress should look 
not primarily to the Department or even to the Federal Government. 
Congress should increasingly turn its attention to the national 
homeland security enterprise, which includes every level of government, 
every community, and the private sector.
    Working together with the Center for Strategic and International 
Studies (CSIS), the Heritage Foundation has convened a working group to 
examine the priorities for improving the overall state of homeland 
security. We have identified five areas that require particular 
attention. They include:
   Domestic Intelligence.--Six years after 9/11, the United 
        States has yet to fully articulate a concept for domestic 
        intelligence that completely addresses 21st century threats; 
        the promise of modern technology; and the demands of protecting 
        the rights of our citizens.
   Human Capital.--At every level of governance and throughout 
        the private sector the Nation needs a corps of individuals with 
        the skills, knowledge, and attributes required to fulfill the 
        complex duties associated with ensuring domestic security, 
        facilitating economic growth, and protecting individual 
        liberty.
   Community Preparedness.--The best preparation for disasters 
        is facilitating a culture of preparedness that empowers and 
        enables individuals and communities to take care of themselves 
        during disaster rather than becoming increasingly dependent on 
        Washington for direction and resources.
   Resiliency.--Critical infrastructure protection has become 
        an increasingly expensive and unsuitable concept for ensuring 
        the continued delivery of goods and services in the face of 
        terrorist threats. U.S. policies would be better served by 
        moving toward a strategy relying on counterterrorism measures 
        to thwart attacks, while focusing on the resiliency of 
        infrastructure, and the capacity to continue to provide 
        services or quickly recover in the event of a terrorist attack.
   International Cooperation.--Homeland security is a global 
        mission. From securing the border to protecting global supply 
        chains, virtually every aspect of preventing terrorist attacks 
        has an international dimension that requires the United States 
        to work effectively with friends and allies.
    The CSIS-Heritage Foundation task force plans to provide specific 
recommendations in each of these areas in their report that will be 
released in September. I look forward to the opportunity to brief the 
Congress on their findings.
    Team Washington.--The very rationale for creating the Department of 
Homeland Security--the imperative of integrating the many agencies and 
activities that bear on domestic security--highlights one of 
Washington's greatest enduring shortfalls, one that could well be 
addressed by the next administration. In meeting complex challenges 
that transcend the core competencies of a single department, government 
does a mediocre job in marshalling all the resources required. 
Washington can do better--and homeland security would be good place to 
start.
    Even after the consolidation of roles and missions in the 
Department, many of the essential tasks undertaken by the Federal 
homeland security enterprise rest with other departments. Ensuring all 
these agencies work together more effectively would be a responsible 
goal for the transition.
    The Departments of Homeland Security, Defense, Health, State, and 
Justice, as well as the other government agencies that bear 
responsibility for elements of the homeland security enterprise, each 
have separate and unique capabilities, budgets, cultures, operational 
styles, and congressional oversight committees. They even operate under 
different laws. Getting them all organized during times of crisis and 
after disasters can be like herding cats. For meeting the dangers of 
the 21st century, interagency operations will be more important than 
ever.

                      LEAVE THE CONSTITUTION ALONE

    The pressing demand for interagency reform does not require that 
the Federal Government be reorganized. There is nothing wrong with the 
underlying principles of American governance. Especially essential are 
the Constitutional ``checks and balances'' that divide Federal power 
between the executive, legislative, and judicial branches. This 
division entails not only sharing responsibility within and among the 
branches of government but ensuring accountability and transparency in 
the act of governing. Shortcutting, circumventing, centralizing, 
undermining, or obfuscating Constitutional responsibilities does not 
make democratic government work better.
    Respecting the principle of federalism is also imperative. Embodied 
in the U.S. Constitution, the imperatives of limited government and 
federalism give citizens and local communities the greatest role in 
shaping their own lives. The 10th Amendment states that ``powers not 
delegated to the United States by the Constitution, nor prohibited by 
it to the States, are reserved to the States respectively, or to the 
people.'' In matters relating to their communities, local jurisdictions 
and individuals have the preponderance of authority and autonomy. This 
makes sense: The people closest to the problem are the ones best 
equipped to find its solution.

                           REPEATING HISTORY

    Washington's efforts at pulling together routinely fall short for 
the same reasons. For its part, Washington can certainly do better--in 
large measure simply by improving interagency operations. For in the 
long history of interagency operations, the same problems spring up 
again and again.\4\
---------------------------------------------------------------------------
    \4\ See James Jay Carafano and Richard Weitz, Mismanaging Mayhem: 
How Washington Responds to Crisis (Westport, Conn.: Praeger, 2008). 
This work includes a collection of historical cases analyzing the 
effectiveness of interagency operations since World War I.
---------------------------------------------------------------------------
    Reason 1: Government undervalues individuals.--Human capital refers 
to the stock of skills, knowledge, and attributes resident in the 
workforce. Throughout its history, Washington has paid scant attention 
to recruiting, training, exercising, and educating people to conduct 
interagency operations. Thus, at crucial moments, success or failure 
often turns on happenstance--whether the right people with the right 
talents just happen to be at the right job.
    Reason 2: Washington lacks the lifeline of a guiding idea.--
Doctrine is a body of knowledge for guiding joint action. Good doctrine 
does not tell people what to think, but it guides them in how to 
think--particularly in how to address complex, ambiguous, and 
unanticipated challenges when time and resources are both hard-pressed. 
Unfortunately, throughout our Nation's history, government has seldom 
bothered to exercise anything worthy of being called interagency 
doctrine. The response to Katrina offers a case in point. The U.S. 
Government had the equivalent of a doctrine in the form of the National 
Response Plan. Unfortunately, it had been signed only months before the 
disaster and was barely practiced and little understood when disaster 
struck.
    Reason 3: Process cannot replace people.--At the highest levels of 
government, no organizational design, institutional procedures, or 
legislative remedy has proved adequate to overcome poor leadership and 
combative personalities. Presidential leadership is particularly 
crucial to the conduct of interagency operations. During the course of 
history, presidents have had significant flexibility in organizing the 
White House to suit their personal styles. That is all for the best. 
After all, the purpose of the presidential staff is to help presidents 
lead, not tell them how to lead. Leadership from Congress, especially 
from the committee chairs, is equally vital. There is no way to 
gerrymander the authorities of the committees to eliminate the 
necessity of competent, bi-partisan leadership that puts the needs of 
the Nation over politics and personal interest. And, in the end, no 
government reform can replace the responsibility of the people to elect 
officials who can build trust and confidence in government, select 
qualified leaders to run the government, and demonstrate courage, 
character, and competence in crisis.

                         MAKING WASHINGTON WORK

    Addressing these issues requires a scalpel, not a sledgehammer. It 
would be a mistake to think of interagency operations as a uniform, 
one-size-fits-all activity requiring uniform, one-size-fits-all 
reforms.
    The highest rung of the interagency process is that that of making 
interagency policy and strategy. These are the tasks largely 
accomplished inside the Washington beltway by officials from the White 
House and heads of Federal agencies in cooperation and consultation 
with Congress. Over the course of modern history, this has actually 
become the strongest component of the interagency process. When it does 
fail, failure can often be traced to people and personalities 
(inattentive presidents or squabbling cabinet officials) more than to 
process.
    Improving performance at the highest level of interagency 
activities should properly focus on the qualities and competencies of 
executive leadership, as well as upon getting the best-quality 
information to the leaders so that they can make the best informed 
decisions.
    Operational activities stand on the second rung of the interagency 
process. These activities comprise the overarching guidance, 
management, and allocation of resources needed to implement the 
decisions made in Washington. Arguably, it is at this level of 
government where government's record is most mixed.
    Outside the Pentagon's combat command structure (which has staffs 
to oversee military operations in different parts of the world), the 
U.S. Government has few established mechanisms with the capability to 
oversee complex contingences over a wide geographical area either at 
home or overseas. Processes and organizations are usually ad hoc. Some 
are successful. Others are dismal failures. In the domestic theater, it 
mistake to rely a rigid Federal structure. Rather, what is required is 
an effective system of organization based on a cooperative regional 
structure built around the governance of individual States. The 
regional Department of Homeland Security I outlined could significantly 
aid in facilitating this structure.
    The third component of interagency activities is field activities. 
That's where the actual works gets done--rescuing people stranded on 
rooftops, handing out emergency supplies, administering vaccines, and 
supervising contractors. Here success and failure usually turns on 
whether the government has correctly scaled the solution to fit the 
problem.
    Inside the United States, State and local governments largely take 
care of their own affairs. When the problems are manageable these 
approaches work well. On the other hand, when the challenges swell 
beyond the capacity of local leaders to handle, as in the case of the 
response to Hurricane Katrina, more robust support mechanisms are 
required. Arguably, what's most needed at the field level are: (1) 
better doctrine; (2) more substantial investments in human capital 
(preparing people to do to the job before the crisis); and (3) 
appropriate decisionmaking--instituting the right doctrinal response 
when a crisis arises.

                           GOLDWATER-NICHOLS

    A generation ago, the U.S. military faced similar professional 
development challenges in building a cadre of joint leaders--officers 
competent in leading and executing multi-service operations. The 
Goldwater-Nichols Act of 1986 mandated a solution that required 
officers to have a mix of joint education, assignments, and board 
accreditation to become eligible for promotion to general officer 
rank.\5\
---------------------------------------------------------------------------
    \5\ For the genesis and explanation of the Goldwater-Nichols 
reforms, see James R. Locher III, Victory on the Potomac: The 
Goldwater-Nichols Act Unifies the Pentagon (College Station: Texas A&M 
University Press, 2002).
---------------------------------------------------------------------------
    Goldwater-Nichols is widely credited with the successes in joint 
military operations from Desert Storm to the War on Terrorism. The 
recipe of education, assignment, and accreditation (EA&A) can be used 
to develop professionals for other critical interagency national 
security activities.\6\
---------------------------------------------------------------------------
    \6\ Proposed reforms are described in James Jay Carafano, ``Missing 
Pieces in Homeland Security: Interagency Education, Assignments, and 
Professional Accreditation,'' Heritage Foundation Executive Memorandum 
No. 1013, October 16, 2006 at www.heritage.org/Research/
HomelandSecurity/em1013.cfm.
---------------------------------------------------------------------------
    An EA&A program that cuts across all levels of government and the 
private sector must start with professional schools specifically 
designed to teach interagency skills. No suitable institutions exist in 
Washington, academia, or elsewhere. The government will have to 
establish them. Although the resident and non-resident programs of many 
university and government schools and training centers can and should 
play a part in interagency education, Washington's institutions should 
form the taproot of a national effort with national standards.
    Qualification will also require interagency assignments in which 
individuals can practice and hone their skills. These assignments 
should be at the ``operational'' level so leaders can learn how to make 
things happen, not just set policies. Identifying the right 
organizations and assignments and ensuring that they are filled by 
promising leaders should be a priority.
    Accreditation and congressional involvement are crucial to ensuring 
that these programs succeed and continue. Before leaders are selected 
for critical (non-politically appointed) positions in national 
security, they should be accredited by a board of professionals in 
accordance with broad guidelines established by Congress.
    Congress should require the creation of boards that: (1) Establish 
educational requirements and accredit institutions needed to teach 
national and homeland security; (2) screen and approve individuals to 
attend schools and fill interagency assignments; and (3) certify 
individuals as interagency-qualified leaders. Congress should also 
establish committees in the House and Senate with narrow jurisdictions 
over key education, assignment, and accreditation interagency programs.

                          THE CLOCK IS TICKING

    In Washington the important is often sacrificed for the urgent. The 
important, like reforming the interagency process, is put off until 
later, but later never comes. Thank you for the opportunity to discuss 
this and other issues critical to transitioning responsibility for 
homeland security from this administration to the next.

    Mr. Carney. I thank you.
    I thank all the witnesses for your testimony.
    I will remind each member that you have about 5 minutes to 
question the panel. I now recognize myself for 5 minutes.
    First question is for Mr. Duke.
    Has the DHS transition team completed a transition plan?
    Ms. Duke. We have an outline, and the plan actually will be 
completed in the fall. But we do have the five components, and 
we are executing transition. We have a succession that is in 
place. We have our training ongoing. We have our team put 
together.
    We have a matrix team throughout the components, and we had 
our first meeting earlier this week. But there is not a formal 
written plan at this time.
    Mr. Carney. Early fall, mid-fall, late fall?
    Ms. Duke. Early fall. I would say October.
    Mr. Carney. Okay. Okay.
    Ms. Duke, also the Government Performance and Results Act--
GPRA--requires every department to draft a 5-year strategic 
plan identifying department goals and strategy. GPRA requires 
that this plan be updated every 3 years, and the last update 
was in 2004, where a year had passed. What is going on? Why are 
we----
    Ms. Duke. We have a draft strategic plan. We are working 
with the Office of Management and Budget. It asked us to add 
more specific performance measures and outcomes to the plan.
    So we had submitted it, and it was sent back to us about 2 
weeks ago. They agree with the goals. They agree with the 
strategies. We were just asked to put more concrete measures in 
that, and that should be completed in no more than 2 months.
    Mr. Carney. Starting from now.
    Ms. Duke. From now, yes.
    Mr. Carney. Okay. So we can look for it in June.
    Ms. Duke. Yes.
    Mr. Carney. Okay. We will look for it in June, certainly.
    Would you agree that it is difficult to chart a course for 
the Department, if it has not identified the goals it wishes to 
achieve 5 years from now, as required by GPRA?
    Ms. Duke. I do agree with that.
    Mr. Carney. Okay.
    One issue that my subcommittee has followed closely is the 
Department's level of cooperation with GAO and the Department 
of Inspector General in particular. We alluded to this here 
today.
    I am pleased to learn yesterday that at long last the 
secretary has finally signed off on a departmental memorandum 
regarding the IG's rights and responsibilities.
    I remain, however, disappointed that it took so long to get 
this done--almost 2 years for a 2-page memo--since the IG 
requested it, and fully 1 year since now Deputy Secretary 
Schneider committed to this subcommittee that it would be 
completed expeditiously. It makes me wonder if it would have 
taken 3 years, if it was a 3-page memo.
    Another issue is the GAO's access to information.
    Ms. Duke, would you agree that there is no basis to 
withhold acquisitions sensitive documents from GAO?
    Ms. Duke. Yes, I do agree with that.
    Mr. Carney. What about so-called draft documents?
    Ms. Duke. Draft is a little bit more dependent on specific 
situations, and that is something we are working with the GAO 
on. On some draft documents there is executive privilege, but 
in general in the draft management directive we have, which GAO 
has already commented on, we are urging people to release the 
maximum sum practical. But I cannot say every draft document 
should be released.
    Mr. Carney. Mr. Rabkin, what is your view on this?
    Mr. Rabkin. I agree in principle. I think when you get down 
to draft documents, it is--for that matter when you get down to 
any specific document, I think you have to look at the facts 
and circumstances.
    I think there is a general culture at the Department that 
we are trying to change about whether, as a matter of default, 
they ought to withhold documents or check out documents before 
they turn them over, or whether, as a matter of default, they 
ought to provide the information that is requested.
    Obviously, we believe in the latter, and we are trying to 
work with DHS to find a happy medium.
    Mr. Carney. Okay.
    Mr. Rabkin and Ms. Duke, could you make sure that you give 
me an update on where you are in talks to revise the 
Department's management directive concerning GAO?
    Ms. Duke. Yes, sir.
    Mr. Rabkin. Be very pleased to.
    Mr. Carney. All right.
    One more for Mr. Rabkin and Mr. Ervin right now. In light 
of the heightened security represented by periods of 
administration changes, what are the most important actions 
that DHS can take in order to prepare for the impending 
Presidential period?
    Mr. Rabkin. Well, Mr. Chairman, I think it is important to 
have people in line that will be there during the time the 
administration is changed, and this generally starts toward the 
end of a presidential administration when political appointees 
start leaving the administration and probably continues over 
into several months into the new administration until other 
political appointees are nominated, confirmed and in place.
    This is perhaps the riskiest time, the most vulnerable time 
for the administration. It is the first time DHS is going 
through this, but other parts of the government have gone 
through it before. Other parts of State and local governments 
have also.
    I am confident that with the plan that DHS has embarked on 
and with what they have done so far in terms of aligning career 
people behind the political appointees with laying out as much 
documentation as possible, that it will be successful. But I, 
too, look forward to seeing that plan more specifically.
    Mr. Carney. Mr. Ervin.
    Mr. Ervin. I agree with what Mr. Rabkin just said. I think 
the Department and the secretary in particular are to be 
commended for the time and the attention and the focus they 
have placed so far on the transition and on making sure that 
there are career professionals in place during this time of 
transition until the new administration's people are in place 
and confirmed.
    I think that is absolutely critical. I think personnel is 
key.
    The only thing I would add to that is I think likewise the 
issue of intelligence is key. I think it is clear to all who 
follow the issue that the Department's intelligence unit 
information analysis is still--while there has been significant 
improvement, needless to say, since the Department was 
established, it is still a work in progress.
    I would hope that the secretary is working very closely 
with the DNI and with the CIA director to ensure in general, 
but particularly during this time of transition, which, as you 
say, is certainly a time of heightened threat, that the 
Department has access to all information from intelligence from 
all across the intelligence community as to threats against the 
homeland.
    Mr. Carney. Yes, we all hope so, too, actually.
    All right, my time has expired.
    I now recognize the Ranking Member, Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Ervin, I was listening to your ranking of the top four 
or five issues, and you talked about the entrenchment of the 
management of the legacy agencies being problematic, and I 
agree. That has historically been a real problem.
    Do you feel like there has been significant movement or 
improvement over the last 5 years on that front, or really none 
at all?
    Mr. Ervin. Well, sir, I think there has been some movement. 
As Ms. Duke noted in her remarks, there are these mechanisms. 
This joint investment council, I believe, is the term.
    There are certain review mechanisms that bring together, as 
I understand it--this was the case when I was there; I think it 
has been improved upon since I left--whereby all of the 
relevant component heads meet with their nominal superior at 
the headquarters to level to do what can be done to improve 
coordination Department-wide.
    Needless to say, that is a very good thing. But what I have 
recommended is that, as I say, these component people actually 
ultimately work for and be ultimately accountable to their 
counterparts at the headquarters level.
    Mr. Rogers. Direct-line authority.
    Mr. Ervin. That is right. Direct-line authority that could 
be easily done. I agree with Dr. Carafano that there shouldn't 
be wholesale further reorganizations in the Department, but 
this would be very easy to do, and I think it would----
    Mr. Rogers. You made the point that with a stroke of a pen 
the secretary could do this. Is that accurate?
    I would also ask Ms. Duke. Is that accurate? Can the 
secretary, with the stroke of a pen, initiate this direct-line 
authority?
    Ms. Duke. I believe it would be within his authority to 
change the reporting of the Department. There may be a 
congressional notification requirement, depending on the extent 
of the reorganization. But that is a notification requirement, 
not an approval.
    Mr. Rogers. How does that happen with information system 
personnel?
    Ms. Duke. What we have done is each chief has what we call 
functional authority. They have some authorities over their 
counterparts in the organizational component, and for each of 
the chiefs, we are strengthening that authority.
    So, for instance, on the chief information officer, he now 
approves all purchase requests over $2.5 million. All the 
chiefs approve the selection of senior counterparts in the 
components, so we have made movement and strengthened those 
approval----
    Mr. Rogers. Why not more movement? Why don't we have direct 
line authority? What is the resistance? What is the downside to 
it?
    Ms. Duke. I believe that the reason that the component 
heads--the TSA, FEMA--their belief is that they need to have 
all the tools within their own organization to be able to 
execute their mission.
    So there is a concern if TSA doesn't have its own 
contracting authority, and it needs to exercise contracts to 
accomplish its mission, that that mission commander, if you 
will, doesn't have the total toolbox to execute his or her 
mission.
    Mr. Rogers. Mr. Carafano, would you agree with that 
observation?
    Mr. Carafano. Well, yes, I think the right answer is the 
right answer. There are a couple of issues that need to be 
addressed here--not to completely disagree with Clark.
    But first of all you have to have a secretary that has the 
capability of managing these activities. We have to remember 
when we first created the Department, we created this paper-
thin veneer of a secretariat that really didn't have the 
manpower and the muscle to actually manage complex activities.
    So until you have pulled that at a level that you are 
comfortable with, your perhaps taking some of these things 
away, as maybe in a wholesale way, would not be a good idea.
    The second point is that a leader is a leader so long as he 
controls two things: people and resources. When you start to 
take a subordinate to a leader and have him have a direct-line 
authority to a person or higher organization, the leader loses 
control.
    So I do think it would be a case-by-case basis, where I 
would walk through various different agencies and look at the 
right balance of centralized control at the secretariat level 
and things that should be kept in the agency. So I wouldn't 
make a blanket statement across the entire Department.
    Then the other thing is I would take a kind of crawl-walk-
run approach to this. I would want to make sure I have got 
capacity in the secretariat to really control that function 
before I started ripping it out of the Department.
    I think IT is the perfect example. If we had consolidated 
IT in the secretariat when the Department was first created, it 
would have been an absolute disaster. They would have been 
totally tsunami would with the incredible variety of IT 
requirements in the Department.
    So I think this is one where you really do want to take not 
a sledgehammer approach, but a very deliberative approach to 
get the mission and the leadership up to match your price. It 
is definitely an issue.
    Again, this is why you need an authorization bill. This is 
exactly the kind of thing that you should deal with in an 
annual authorization measure, where you can get into the piece 
parts of individual agencies and specific functions and 
activities and make reasonable and intelligent recommendations 
every year, so it is not coming in some kind of, again, 
tsunami, grand 9/11 bill from Congress--you know, do all this 
stuff.
    But on an annual basis, you can bite these things a piece 
at a time and move the Department kind of in a disciplined way 
into the future.
    Mr. Rogers. Mr. Ervin, would you like to follow up on that? 
You heard the observations about why going to direct-line 
authority immediately is not necessarily a good idea. Do you 
agree with that? Are you----
    Mr. Ervin. No, sir, I am not persuaded by it. It could be 
done very easily. As Ms. Duke said, there might be 
congressional notification, either legally required, and even 
if it isn't legally required, certainly, it would be a good 
thing as a matter of policy to do, but it is something the 
secretary could do.
    I don't think that it would have overwhelmed the Department 
to have done it at the beginning. But even if that were true, 
we are 5 years after the establishment of the Department, and 
certainly enough time has passed such that it could be done 
now.
    Until it is done, the Department will, as I say, continue 
to be less than the sum of its parts, and the Department will 
still be a collection, to some degree, of disparate 
organizations, each going in its own direction.
    It would be a very simple thing that would promote 
integration and, as a consequence, make the Department more 
effective and efficient economically, it seems to me.
    Mr. Rogers. I will come back to this when I get my next 
turn. I really think this is an important area.
    I will yield back.
    Ms. Clarke. Ms. Duke, I wanted to touch upon the issue of 
diversity. There has been one that has been an issue of concern 
to myself, and certainly to our chairman.
    In your testimony it seemed as though the numbers that you 
have talked about were sort of cherry-picked around the various 
lines of the agencies for your executive cadre. For instance, 
you cite the percentage of Hispanics at ICE and CBP. Then you 
jump over to the number of African Americans in TSA and the 
women at USCIS.
    What are the Department's overall statistics for minorities 
in the executive cadre? What are the numbers within the office 
of the secretary executive management and the office of the 
under secretary for management?
    Ms. Duke. The point in pointing out some of the numbers is 
we believe that the eventual success in our diversity is going 
to be twofold. One, and principally, is the recruiting, getting 
the right people into the Department. Once we have the right 
people in the Department--and those highlight two areas where 
we have in CBP some successes in bringing diversity into the 
Department.
    The second thing we have to do, then, is have the programs, 
the training, the opportunities for people within the 
Department to go to the senior executive level, if that is what 
they wish. So we have a lot of initiatives going on now.
    We most recently just had our first women's leadership 
forum. That was about 2 weeks ago, and we had about 150 women 
in the Department come, and it was in-house. So we are looking 
at those opportunities.
    I will submit for the record the exact numbers that you 
asked for, but I do admit that we want to improve our diversity 
numbers, especially among the senior executive service within 
the Department. That is something that we are focusing.
    Ms. Clarke. Yes, I think it is important that we sort of 
establish where we are right now as the baseline for where we 
need to go. As hard as it may be to sort of look at it and not 
actually be where we want to be, we have got to know where we 
are. So I do hope that you would forward us that information as 
soon as you can.
    I would also like to just talk about sustainability. In its 
early years, DHS has relied on contractors to a greater extent 
than any other department. Do you feel that this is 
sustainable? Also, as you look ahead to the future, how do you 
envision the role of contractors? And are you planning on 
reducing the Department's dependence on contractors and using 
Federal employees to fill more roles?
    Ms. Duke. I think, Ms. Clarke, the answer is it depends. We 
are looking at this. When we issued our data call for the FAIR 
Act inventory, the Federal Activities Inventory, to look at 
what should be contract and what should be inherently 
governmental, we asked each component to look at its use of 
contractors and make sure that every activity is properly coded 
either commercial or inherently governmental.
    One point to make, though, is just because it is commercial 
does not mean we should contract it out. There is an ability to 
say something is commercial, but it is so important to either 
the accomplishment of the mission or, in the cases of some 
discussions with this committee, oversight of some key 
contracts, that we want to keep it in the Federal workforce, 
despite the fact that it could be contracted out.
    So we are undergoing that system-wide review right now with 
the next FAIR Act inventory data call. We do know in some areas 
we are looking at making sure we have the most robust Federals 
to manage the contracts, which is an area we looked at. So in 
certain areas--for instance, NPPD--we are looking at building 
the Federal workforce to have it surround better and manage the 
contract workforce.
    Ms. Clarke. Under Secretary Duke, while we are all very 
interested also in the long-term goals of the Department, we 
want to take a look at the shorter term. As you enter the 
transition, what would you say are some of the specific goals 
that you feel cannot wait and that the Department must meet 
before the next administration takes over?
    Ms. Duke. Well, in terms of the transition goal, the 
principle is making sure that we have clear people in place in 
all the key areas that are there for succession and that they 
are trained to handle the role of their boss, should their boss 
be gone, due to political resignation.
    That is something we started and we are working on right 
now. We are doing exercises with the No. 2s and No. 3s. That is 
huge.
    Within management there are a couple of key processes that 
we think we need to have in place. At headquarters we are 
implementing an electronic records management system. I think 
that is very important to have in place before the change of 
administration.
    We are continuing the migration of the data centers to make 
sure they have it in place. So we have both the management 
practices we want to have in place, plus the transition role.
    Ms. Clarke. My time has expired, but perhaps we will do 
another round.
    Ranking Member Rogers, do you have some questions?
    Mr. Rogers. I do. Thank you very much.
    I want to get back to this issue of direct-line authority. 
I would ask Mr. Ervin.
    Do you think we have made successive approximations toward 
that authority that are substantive? You heard Ms. Duke make 
some reference to functional authority. Are those reasonable 
successive approximations toward where we need to be? I know 
you would like to see it happen right now.
    Mr. Ervin. Well, sir, there certainly is progress, and it 
is commendable.
    Mr. Rogers. Is it reasonable progress?
    Mr. Ervin. Yes, well, that is difficult to say. I guess I 
would say no, because, as I said earlier, it would be so easy 
simply to provide the direct-line authority. The question that 
you were asking a while ago is a very good one--that is, what 
is the downside of it?
    I have yet to hear an argument convincing--any argument, 
really, but certainly haven't----
    Mr. Rogers. You heard an argument about it. But she had an 
argument.
    Mr. Ervin. Yes. I haven't heard a convincing argument as to 
the downside of it. This notion that component heads need a 
full complement of skills and activities within their component 
in order to properly discharge the mission does not persuade 
me, really.
    There is no reason in theory or in practice why a component 
head could not look to the chief procurement officer at the 
Department level, the chief information officer, or the chief 
financial officer, as the case may be, to provide each of those 
services with regard to his component, or her component.
    As long, as I say, as these counterparts have their own 
chief financial officers, et cetera, then these components will 
continue to operate in a less optimal fashion. The Department 
will be less integrated than it should.
    It is certainly important, for example, as Ms. Duke said, 
that the Department be physically consolidated, or as much of 
the Department as possible. That is another reason why the 
Department has yet to be integrated.
    But similarly, this kind of functional line authority, 
which costs nothing and which can be accomplished 
instantaneously would even more quickly, it seems to me, to 
conduce to the kind of cohesion that the Department lacks and, 
because of the transition, the Department needs more than ever, 
because we all agree that this is a time of heightened 
vulnerability and high threat.
    Mr. Rogers. Mr. Rabkin, I wanted to ask you. You talked 
about moderate successes and limited successes. In looking at 
the development of the management amongst the 22 legacy 
agencies--and you made reference, as I did, to the 5 to 7 years 
it takes for these mergers to really at a minimum reasonably be 
stood up as an organization--do you think that we are making 
reasonable progress within the Department toward the ultimate 
goal of having a cohesive organization?
    Mr. Rabkin. In terms of the mission functions, I think the 
progress has been reasonable. I think that the Department 
properly put its focus on ensuring the homeland security, 
aviation security, that border security, the ability of the 
Coast Guard and FEMA to be able to search and rescue and carry 
out their missions, et cetera.
    However, the management side, in my opinion, has been given 
secondary focus and attention. I think it is time now to 
start--through the efforts of oversight, through the efforts of 
reorganization within, and changes of personnel within the 
Department--it is time to start focusing on that.
    We would like to see something a little more specific in 
terms of a plan about where for each of these areas does the 
Department want to be. When do they expect to get there? What 
are the steps from here to there? Who is going to be 
responsible for doing it? What kinds of resources are needed to 
get us from point A to point B?
    It would be easier to hold them accountable, certainly, but 
I think it will give them a better roadmap, especially as the 
new administration comes in and has to pick up to the ball to 
continue this progress.
    Mr. Rogers. Well, I think that we all would agree that we 
have seen lessons learned and legacy agencies function better 
together over the last few years. That first couple of years 
was rough, as everybody knows.
    But I guess I am looking for feedback from all of you about 
where we are, if we are making adequate progress. I have 
constituents complain regularly. I hear on TV people criticize 
the Department for various problems. But I view it as--and many 
of you have heard me offer this example--a gangly teenager who 
is still trying to get the coordination of his limbs that are 
growing faster than they are used to.
    That is the way I see the Department. But I am asking are 
you seeing the level of maturation at a rate that you think is 
acceptable, given what happens with other similarly larger 
mergers?
    Mr. Carafano.
    Mr. Carafano. Well, yes, I would say no. I would say the 
reason for that--and in particular I agree with Mr. Rabkin--is 
we haven't seen adequate advances on the management front.
    Then, again, I would go back. I think the two fundamental 
reasons for that are the two reasons I mentioned at the 
beginning. One is the lack of coherent oversight from the 
Congress. When you have different parents pulling in different 
directions, that is a big problem.
    The second is, I think, we have gone through again. We have 
gone through three major reorganizations of a very young 
department, and that has been incredibly disruptive.
    Back to Clark's point, this notion about well, this would 
cost us nothing. This is a free lunch. Direct-line authority 
would essentially require another major reorganization of 
responsibility, and I think it would be incredibly disruptive.
    I think that fundamentally here we have to make a 
distinction between departments like Education and Energy and 
Agriculture, which are relatively vanilla across the breadth of 
the department, and departments like Defense and Homeland 
Security, which are very complex departments, very complex, 
different missionaries, different functional responsibilities, 
and you cannot treat everything the same.
    DOD has had a mix of line and dotted authority for decades, 
and there is a reason for that. I think as the Department 
matures, I think what you will actually see in DHS is something 
that, again, looks like more DOD, that has this combination.
    In some areas you will and should see consolidations of 
functions and activities. I am absolutely supportive of that. I 
think there are too many independent activities within DHS. It 
is too broad a span of control for the deputy of the Department 
to manage as a chief operating officer, which is the model they 
have adopted.
    I think it is a great model, but the problem is you can't 
model that many different independent components. So I do think 
eventually you would want to see less of these.
    But, again, I think some kind of silver bullet management 
solution--everybody reports to the chief operating officer of 
this or that--I think is inappropriate for a department like 
this.
    Mr. Rogers. Thank you.
    My time is up. I hope we have a third round.
    Ms. Clarke. Ms. Duke, is there sort of a framework written 
documentation about how you are going to transition? Is there a 
plan that you are working off of that indicates benchmarks of 
when you want to accomplish what by when?
    Ms. Duke. We do have an outline of a plan, and I committed 
to the chairman earlier that I will have a formal written plan 
by October. That is the whole transition strategy. We do have a 
five-prong plan on succession order, on training and on 
knowledge transfer, and that is ongoing.
    Ms. Clarke. That is currently what you are working off of, 
but the filled-in fleshed-out plan itself you don't have to 
expect to have before October?
    Ms. Duke. For October.
    Ms. Clarke. Okay. Is there a way that the committee can 
receive the plan you are currently working off of so that we 
can have a good basis from which to have expectations around 
the October release?
    Ms. Duke. Yes, I would be happy to forward that to you.
    Ms. Clarke. Wonderful.
    I want to go back to the issue of the contractors just 
briefly. One area that you didn't really address was 
sustainability. I think the American people are very concerned, 
because, of course, we endeavor in many different areas where 
we are contracting out, and we don't necessary get what we 
bargain for.
    Do you feel that the current level of contracting that is 
engaged in in DHS is something that we will have to sustain 
throughout the outgrowth of this agency? Or do you see that 
diminishing to a certain degree, once a certain amount of that 
work is identified as work that should be part of a Federal 
employee workforce?
    Ms. Duke. I think that will depend on how many new 
initiatives. A lot of our growth has been new initiatives. So 
if we continue to have the level of new initiatives that we 
have, I think that we might see a different look to where the 
areas are of growth that will continue to have growth.
    If there aren't major initiatives--for instance, on the 
SBInet program--once we deploy the technology, certainly we are 
going to reduce the number of contractors and just be in a 
sustainment mode, and we will actually be operating the SBInet 
system through the Federal Border Patrol agents.
    So I think it depends on what area. I do know that in terms 
of sustaining, we are looking at both the effectiveness of 
contractors and the cost in certain areas. Is it more costly to 
use contractors? Or is it less costly to use Federal employees? 
It actually depends on the area.
    The third thing we are looking at that is important is: Are 
they available? Intelligence is an area where it is very, very 
difficult to get Federal employees. So we are looking at how we 
actually meet that mission.
    Ms. Clarke. I would then just ask you, Ms. Duke, in closing 
for questions to you, the Department's investment review 
process--Management Directive 1400--has been under a revision 
for several years.
    No. 1, in your view what is the appropriate role for 
department-level oversight of its management investment? Why 
have previous experts not provided sufficient oversight?
    No. 2, how do you plan to address this issue before the 
next administration?
    Ms. Duke. The main reason we are just novices at oversight 
in the investment review board is because the Department 
started with procurement people only. There are about 14 career 
fields that make up an acquisition program. The most key and 
essential of any acquisition program is the program manager.
    When CPO was set up, it had only the procurement people. We 
now have a division of the acquisition people--program 
managers, cost estimators. That goes to sustainability issue. 
What is it going to cost in the long term? We have test and 
evaluation logisticians.
    So now we actually have the skill sets in CPO--not enough, 
but a few of the right skill sets so we can look at a program. 
Several members of this committee have mentioned if we don't 
have a good requirement, the rest isn't good.
    We can go in early in a program, actually not just look at 
the end product, which is the contract, but look at the program 
documentation, the requirements document, the mission needs 
statement, the cost estimates, so we can actually do a program 
review, not a procurement review, because the procurement 
review is at the end, and all you can do is really band-aid the 
problem at that point, stop the bleeding.
    Ms. Clarke. Thank you.
    My final question is to you, Dr. Carafano. You note that 
among the greatest challenges facing DHS is the congressional 
oversight is conducted by far too many committees.
    As a member of the House committee tasked with the primary 
oversight of the Department, this has been a major frustration 
in that it makes any congressionally mandated reform of the 
Department exceedingly difficult, as bills are referred to all 
sorts of committees, and some of which have minimal expertise 
in homeland security.
    Can you elaborate on your comments? Do you have specific 
examples of how this has hindered the growth of the Department?
    Mr. Carafano. Yes, ma'am. I think the best example, 
actually--and really where these things really need to be 
discussed with them is to look at the authorization bill.
    Every year this committee has been great in drafting the 
authorization bill. Look at how many measures in that bill get 
stripped off, because other committees say it competes with 
their jurisdiction.
    That is probably the best example right there of the 
problem. That is why I think these are really solutions that 
have to go in tandem: the consolidation of oversight and the 
authorization process. One is insufficient without the other, 
and both are absolutely required, if we are going to have the 
kind of consistent congressional leadership we need for the 
committee.
    Ms. Clarke. We are trying to still get a sense of how this 
could hinder the growth of the Department, because we are 
moving forward now. We are talking about transition. We want to 
make sure that we are as strident as possible. What could you 
say in that regard?
    Mr. Carafano. Well, the clearest answer are the domains 
that really cut across our society. Look at TSA and the Coast 
Guard--probably the best examples. TSA has transportation 
responsibilities across the entire globe, actually. The Coast 
Guard missions cross many different domains in everything to do 
with water.
    Between the Senate and the House committee, you don't have 
consolidated oversight of those two in a single department, and 
that is, I think, a clear example where it is really showing. I 
think those are the ones that are absolutely the most important 
where you do have capabilities that cut across the society.
    Again, just to go back to my initial comments, the reason 
why this is so important is unless we are going to change the 
strategy of homeland security in this country--we talked about 
a risk-based strategy. We live in a country with an infinite 
number of vulnerabilities, and if we are going to spend $100 
billion taking one vulnerability off the table, we are going to 
have infinity minus one.
    We don't want to live in a society where we wall us off 
from the rest of the world, and we don't want to live in a 
society where we take away anybody's liberties and privacies 
and freedoms to make us safe.
    We want to live in a free and open society, and the only 
way we are going to do that is if we go out there, and we stop 
the bad guys, and if we make hard decisions about where we want 
to intervene in a free society to provide those protections.
    That can only be done in a holistic manner when every 
committee is saying this is the most important thing that has 
to get done. It is not being put in a holistic context. I think 
that is a great example of where we have really--you know, we 
have a stated strategy, and then we have a congressional 
oversight process, which is specifically designed to prevent 
you from implementing it.
    Ms. Clarke. Thank you very much.
    Congressman Rogers, our ranking member, mentioned that the 
Homeland Security reminds him of a gangly teenager. I think it 
reminds me of an infant still learning to focus its eyes.
    Having said that, our Chairman is back, and I would like to 
suggest to him that our Ranking Member has asked for another 
round of questions, and that is certainly your prerogative, 
sir.
    Ranking Member Rogers.
    Mr. Rogers. Thank you very much.
    I would ask Ms. Duke. You heard Mr. Ervin's reference to 
the need, and my reference to the need, for more procurement 
officers in your former department. Where are you on that 
front?
    Ms. Duke. We are up to nearly 1,000 procurement officers.
    Mr. Rogers. How many do you need?
    Ms. Duke. Right now, we are authorized to have about 1,250, 
so we are working up that right now, and then we will reassess. 
That is up from about 400 in 2004, so we are making good 
progress.
    Mr. Rogers. You also heard Mr. Ervin's reference to the 
need for bonuses and better pay. Do you find that is a 
component of recruitment and retention that is a real problem 
when it comes to procurement officers, or not?
    Ms. Duke. I think we started a good exit interview program. 
I think that we can use recruitment and retention bonuses, and 
we do use that some. I think that what we are doing well on, 
according to our last employee survey, is people love the 
mission, and they are proud of it.
    I think that what challenges a lot of people is the stress 
of being especially a procurement officer in the Department. In 
the last round of questions, we talked a lot about business 
versus mission, or management versus mission.
    Management doesn't exist without mission. We exist to serve 
the mission. So I think one of the things we have to overcome, 
even with that organizational change, is make everybody 
accountable for both mission and management.
    So if the culture is that, oh, you are responsible for 
delivering the mission, and management is responsible for 
adhering to costs and good business practices, they would never 
have the maturity level that you want.
    So I think that we will be able to better retain 
procurement if we have a unified buy-in that we are all jointly 
and severally responsible for meeting the mission, but doing it 
in a way that appropriately balances risk and appropriate use 
of good business practices.
    Mr. Rogers. Thank you.
    Going back to Mr. Ervin's statement, you made reference to 
contractors, and in more of a dim light than I view 
contractors. I think that there are certain specialties and 
special skill sets that we just don't have, and we are not 
going to be able to have as a department. Or, we are not going 
to see the Department be able to have them, and they have to go 
to the private sector to draw on those.
    But you made reference to some contractors who have been 
drawing specs for their contracts. I would like to hear about 
that. That is just unacceptable. I would love to know some 
specific examples of that.
    Mr. Ervin. Sure. A couple of examples, sir, but first just 
let me say that I am not opposed to contractors ipso facto. I 
quite agree that it depends on the circumstances. There are 
certain functions that certainly only contractors can perform.
    I was just making the larger point that I think has been 
acknowledged, that DHS uses contractors to a very, very large 
degree--perhaps to a greater degree than any other agency, 
certainly, its size. I question that.
    To give you a couple of examples, early on in the 
Department, when I was in there in its first year, the 
Department TSA allowed Unisys to define its IT requirements for 
an IT system. That contract ultimately--I have forgotten what 
the initial amount was, but I think it was just a couple of 
hundred million dollars--ballooned to cost over $1 billion, and 
I think it is a direct result of the fact that TSA at the time 
did not know what its requirements were and left it up to 
Unisys to tell them what its requirements were.
    There are other examples, certainly, but the latest big 
example is the SBInet contract that Ms. Duke referenced of a 
year and a half ago, a couple of years ago. Then Deputy 
Secretary Jackson famously said in a meeting to contractors, 
``We are going to actually ask you to design a system for us 
and tell us what we need with regard''----
    Mr. Rogers. So they asked a number of contractors to make a 
pitch. They didn't say, ``You draw up a contract.'' They said, 
``You make a pitch.''
    I am no big fan of SBInet the way it has worked out. Don't 
get me wrong. But I wasn't aware that they drew their contract 
up.
    Mr. Ervin. Respectfully, sir, it wasn't just make a pitch. 
That happens all the time. It was--and I can get you the exact 
quote from the deputy secretary--but it was essentially, ``You 
tell us what the requirements are. You design the system for 
us.''
    That is exactly what has been done, and that is a large 
part of the reason why this SBInet contract is as costly as it 
is and why we are still so far off in terms of getting what we 
need to get to protect the border----
    Mr. Rogers. Would describe that completely different and 
say, ``You tell us how you would design a program that would 
work,'' and told several vendors that. Then they made their 
pitch of what would work, and DHS selected the one that they 
thought was the most effective.
    Don't get me wrong. I am not defending the way it has 
worked out, because I don't think SBInet's on track the way it 
should be. But I don't want to see corruption taking place in 
our contracting, and that was my concern with your first 
statement.
    I have just got a couple of seconds.
    I would ask Ms. Duke--your No. 1 goal in your new role as 
under secretary for management. What do you want to do first 
and foremost? What is the biggest challenge on the management 
front for the department?
    Ms. Duke. The biggest challenge for me is for transition, 
and that is to sustain the progress we have made so far and 
making sure that we have management factored into 
decisionmaking so they would not backslide in that.
    The second is to make sure we have some of the key 
management practices in place. I talked about we have to have a 
records management system, we have some staffing issues, so to 
put that infrastructure in place so that when the next 
administration comes in, they could focus on protecting the 
homeland and don't have to worry about the basics.
    So we have a few key areas in each of the chiefs. But 
basically, it is to sustain the progress we have made and then 
to continue it forward.
    Mr. Rogers. Thank you, ma'am.
    I yield back, Mr. Chair.
    Mr. Carney. Thank you.
    Well, I will go for a little while on it, anyway. We just 
went into recess, so we don't have worry about being pulled 
away.
    Ms. Duke. I am concerned to continue on about the sole 
source contracts. I think it should be the exception, and not 
the rule. I think pretty much everyone agrees to that.
    Would you consider doing a memorandum, probably not to all 
procurement officers, to remind them that sole source contracts 
ought to be the exception, and not the rule? Mr. Rogers rightly 
points out that there are some things that only one contractor 
can do, but I think I agree with Mr. Ervin when we ought to 
explore. It doesn't hurt. Would you?
    Ms. Duke. Yes. We could certainly issue a memorandum.
    We just recently did a competition report that was done by 
the chief procurement officer. It is rather lengthy. Basically, 
we went from about 45 percent last year to 60 percent in 2007. 
So that was 2006 to 2007, 69 percent.
    Our goal for this year is 68 percent. The Federal-wide 
average is 75 percent, which we are hoping to get to by 2011 at 
the latest. So we really think that when we put all our mission 
elements aside, we can be at least with the Federal average.
    But I would certainly prepare the message reminding people 
that competition is the preferred way.
    Mr. Carney. Right. Very good.
    Mr. Ervin, care to comment on that?
    Mr. Ervin. Well, I certainly cannot disagree that 
competition is the preferred way. But as I said in my 
statement, and as you reminded us, I really cannot conceive of 
a circumstance where it should not be the case that the 
Department--any government agency--should always seek bids.
    It may well be the case that only one contractor can as a 
matter of fact supply the necessary good or service at a 
reasonable cost. But we don't know that for sure until we bid 
out, and so as a matter of good practice, it seems to me that 
there should always be bidding out of contracts, and I think a 
memo to this effect from Secretary Duke would be a good thing.
    Mr. Carney. Mr. Carafano? Or Dr. Carafano--I am sorry.
    Mr. Carafano. There are over a dozen forms of Federal 
contracts under the Federal contract award for a reason. That 
is because they all have different utilities. So I think we are 
going down the road, if we are having a debate about no-bid 
sole source versus competitive contracting.
    The real answer, which the committee has already identified 
and hit the Department on, is to have a qualified contracting 
workforce that knows what they are doing. Oftentimes in DOD, 
for example, when I was doing research on Iraq, of course they 
went out for a sole source no-bid contract, because they were 
in the middle of a war, and they had days to do this.
    The problem was, having once done that contract, 12 months 
later, when the requirement was clearly defined, when it was 
clearly alternative bidders, rather than go back and re-bid 
that as a competitive contract with an RFP, they just kept 
doing it sole source, because it was just easier, and they were 
too busy to do anything else.
    So the real answer is in the quality and the capacity of 
the contracting force. People are educated and skilled and 
motivated to their job. They are going to get you the best fee 
for service, and at the end of the day, that is what we really, 
really want.
    Mr. Carney. Or to plan also.
    Mr. Carafano. Yes, that would be helpful--and I think 
especially for DHS. This is, again, a lesson learned with DOD. 
DOD's greatest sin is they never plan for the capacity of the 
contracts they had to undertake in Iraq, and their contracting 
force was absolutely and completely overwhelmed.
    We can't assume that there is not going to be a day when 
DHS, because of some kind of catastrophic situation, has a 
massive increase in contracting requirements for some 
unforeseen reason, and if you don't have a plan on how you are 
going to expand your capacity very rapidly to meet new and 
unexpected demands----
    One of the things we know about the bad guys is that they 
are very innovative and creative. Someday somebody is going to 
figure out a way to attack this country that we ain't never 
thought of. There won't be a Federal employee to do this, 
because we never thought we might need one for that, and we are 
going to have to go out and find somebody to contract for that.
    They call it in DOD now--the Army calls it--expeditionary 
contracting. It is the notion of being able to quickly identify 
people with skills, wrap them up, get them out, deploy them and 
employ them.
    That is another issue as well. A lot of places you are 
going to have to send contractors out, so you have to think 
about paying them and sustaining them and everything else.
    So paying a lot of attention to the professional 
development of your procurement work force is, I think--I 
applaud this committee for being so hard over on that, because 
it is absolutely about employment. But we need to think in 
terms of both professional development and capacity.
    Again, I hate to be a broken record, but that is why you 
have authorization bills. So every year you go back and you 
revisit this issue, and you say, ``How much progress have we 
made on this vital issue since last year?'' You have a chance 
to act again on it.
    Mr. Carney. All right.
    Any further questions? Okay.
    Well, I am satisfied. I think we had a great hearing. 
Frankly, the bipartisan talk, and we covered substantive policy 
issues, which is not a bad thing to do once in a while.
    Hearing no further business, the committee stands 
adjourned.
    [Whereupon, at 3:13 p.m., the subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              

   Questions From Chairman Christopher P. Carney of Pennsylvania for 
 Elaine C. Duke, Deputy Under Secretary for Management, Department of 
                           Homeland Security

    Question 1. What do you anticipate being the top priorities for the 
next administration as they take over the management of the Department?
    Answer. In the area of Management, the next administration will be 
faced with the same challenge as the current administration, which is 
to continue transforming the Department of Homeland Security into a 
unified force that protects our country. The Department management must 
ensure that there is a comprehensive and integrated strategy throughout 
the components, with specific and measurable goals that support the 
activities DHS priorities. Currently, the Department is focused on the 
following efforts:
   Improving acquisition and procurement throughout the 
        Department;
   Strengthening the requirements and investment review 
        processes;
   Acquiring and maintaining human capital;
   Seeking efficiencies across the enterprise in operations and 
        the use of resources;
   Making the key management systems, such as financial and 
        human resources, world class;
   Acquiring the funding and approval for DHS' consolidation at 
        St. Elizabeths Campus and the efficient realignment of all 
        Department of Homeland Security off-campus locations.
    These efforts are not administration-specific, but rather reflect 
the key needs of the Department, its employees, and the Nation. These 
will be the issues facing the new administration as they take over the 
management of the Department; however, it is the goal of the DHS 
transition effort to ready the Department, to the maximum extent 
possible, for this changeover in Presidential administrations.
    Question 2. Please briefly describe the Directorate for 
Management's goals for 2007 and 2008?
    What long-term goals (5 to 10 years) do you have in place for the 
Department?
    Answer. In 2007, the Management Directorate's goal was to 
strengthen and unify DHS operations and management. Faced with the 
challenge of strengthening the DHS components to function as a unified 
Department, DHS must balance centralized, integrated activities across 
decentralized operations that are distinctly unique. In order to meet 
this challenge, the Department drives operational success by 
coordinating four critical management objectives: provide structure, 
optimize processes and systems, foster leadership, and leverage 
culture.
    These four objectives serve as a framework to focus and evaluate 
operational effectiveness, particularly in delivering services in 
support of Department-wide initiatives. By applying these objectives to 
all lines of business throughout the Department, DHS seeks to ensure 
continuous improvement, quality control, and sound business practices.
    1. Provide Structure.--Strengthen unified organizational governance 
to enhance Department-wide communication, decisionmaking and oversight.
   Develop DHS internal controls
   Execute oversight
    Organizational structure allocates authority and responsibility, 
establishes reporting relationships and spans of control, and ensures 
the flow of communication and knowledge.
    In providing structure, we will implement critical internal 
controls for operations and management to ensure consistency and 
continuity within organizations; realign and delegate authorities that 
will improve the efficiency and delivery of homeland security programs 
for the American public; and issue employee performance plans that are 
results-focused with clear expectations and aligned with Departmental 
mission priorities.
    Well-structured organizational governance includes a clear chain of 
command, a reduction in vacant oversight positions and compliance with 
Department-wide management directives and standard operating 
procedures.
    2. Optimize Processes and Systems.--Integrate functional operations 
to facilitate cross-Component synergies and streamline coordination 
ensuring reliable and efficient support of mission objectives.
   Increase functional integration, information sharing, and 
        operational performance
   Decrease administrative costs
    Organizational processes and systems improve interaction between 
disparate systems, align shared services, and build sustainable 
infrastructure that enables functional integration and incorporates 
flexibility for evolving requirements.
    In optimizing processes and systems, we will incorporate 
stakeholder perspectives to ensure collaboration on key decision 
points; develop internal and external communications plans; and 
increase coordination of operations that accomplish the Department's 
mission priorities. Utilizing information technology systems, we will 
streamline administrative processes and support communication networks.
    As we advance information sharing capabilities and partnerships, we 
will share information with Federal, State, local, tribal, 
international, and private sector security partners.
    Effective processes and systems support operational tasks in ways 
that reduce costs, correct material weaknesses and increase the 
reliability, timeliness, quality, and security of operations.
    3. Foster Leadership.--Adhere to the core values and guiding 
principles of DHS in performing duties, effecting progress and leading 
with commitment for the mission.
   Strengthen and maintain existing leadership within the 
        organization
   Identify, support, and develop potential leaders
    Organizational leaders inspire vision and goals, foster 
cooperation, proactively overcome impediments, and remain distinguished 
in their dedication to duty.
    In sustaining leadership we will continue building a 21st century 
workforce by identifying skill gaps, improving hiring and retention 
programs, clearly defining roles and responsibilities, and providing 
training across the Department.
    We will support the delineation and implementation of the DHS 
leadership transition planning effort while advancing inter-agency 
collaboration and cooperation with State and local leaders.
    4. Leverage Culture.--Leverage the benefits of commonalities and 
differences across components to promote cooperative intra- and inter-
agency networks and implement best practices.
   Implement best practices
   Provide inter- and intra-agency representation
    Organizational culture results from past strategies, experiences, 
obstacles, resources, and successes. We will implement best practices 
and drive unification with consideration for the different strengths 
that each organization and its employees may offer the Department.
    In collaborative networks throughout the Department, diverse skill 
sets will be utilized to ensure products and services that regard 
different ideas, solutions and create innovations. Inter-agency 
collaboration will benefit from DHS employees that are knowledgeable of 
the various DHS efforts, constraints, and concerns and can provide a 
clear and representative perspective.
    In 2008, we are continuing our efforts to enhance DHS operations 
and management by further developing Department-wide structure, 
processes and systems, leadership, and culture.
    In particular, we will strengthen acquisition management by 
reducing risk, monitoring program performance, and building a robust 
acquisition workforce.
    We will strengthen the role of the Chief Information Officer and 
underscore the importance of information technology (IT) security, 
unified enterprise architecture, and an integrated IT investment review 
process.
    We will unify IT infrastructures by reducing the number of data 
centers and networks and by deploying a new range of security services.
    We will ensure that all DHS components have improved access to 
needed data and information through information sharing and access to 
DHS facilities and systems.
    We will enhance operations coordination by establishing a joint 
planning capability for non-routine, multi-component operations.
    We will strive to consolidate our headquarters facilities.
    Finally, we will incorporate best practices for departmental 
transition planning in order to deliver a strengthened and unified DHS 
to the next administration.
Long-Term Goals (5-10 years)
    As the Department develops its management structure and improves 
cohesion across all components, DHS operations will strengthen with 
more effective means for utilizing its resources, including labor, 
assets, and appropriations. Over the next 5 years, DHS will have the 
internal controls and infrastructure to shift its energy and focus from 
unifying legacy operations and overcoming management challenges to 
sustaining a unified Department that benefits from enhanced information 
sharing capabilities and other synergies that enhance performance and 
achieve goals in support of securing the Homeland.
    By applying the management framework introduced in fiscal year 2007 
and 2008, DHS management goals will ensure that appropriate structures, 
processes and systems, leadership, and culture are maintained in 
support of mission goals. DHS Management will continue to aim for 
results that administer taxpayer dollars and define expectations in 
ways recognized to be good governance and exemplary of meaningful 
public service.
    In particular, DHS' management structure will ensure that 
operational goals are aligned with strategic plans, assurance 
statements for financial and operational controls are authorized by 
leadership, and Department-wide internal controls and acquisition 
oversight maintain the integrity of major mission programs.
    In addition, processes and systems will be refined and sustained by 
consolidating disparate managerial tools, including financial 
applications, human resource training and recruiting mechanisms, and 
grant management processes in order to increase functional integration, 
asset efficiency, and Department productivity.
    For example, when the Department began operations in 2003, it was 
challenged to provide timely and compliant financial information from 
22 diverse legacy agencies. To accomplish this, the Department 
developed clear standard business practices from internal control best 
practices to establish a management control program that measures 
performance and provides accountability for improvement in its 
published Internal Controls Over Financial Reporting Playbook. In 
addition to this playbook's corrective action plans that will enable 
DHS to overcome outlying financial material weaknesses in the next 5 
years, the Department couples its documented standard operating 
procedures with a high-level financial management systems strategy 
called the Transformation and Systems Consolidation (TASC). Moving TASC 
ahead will bring a reduction in the number of financial systems across 
the Department and will drive the implementation of a consolidated 
financial management system.
    The Department will take this phased, multi-faceted approach to 
addressing redundancies and inefficiencies in other operational areas 
of DHS. For instance, to streamline recruitment efforts, the Department 
will implement an enterprise recruitment/hiring solution that 
consolidate and modernize current overlaps in Department hiring 
systems. This e-Recruitment effort will provide flexible functionality 
to meet the needs of our Component organizations and improve operations 
with automated processes; the elimination of paper-based systems; the 
creation of an easy-to-use and web-accessible interface for all system 
users, and implementation of human capital industry best practices. 
Similarly, homeland security grants management, one of DHS' most 
critical functions, will obtain enhanced efficiency and increased 
transparency by consolidating the administration and management of all 
DHS grants with the Federal Emergency Management Agency. By integrating 
and innovating processes and systems, the Department is taking 
advantage of existing resources and expertise to streamline services 
and improve access to critical homeland security funding for State and 
local governments and organizations.
    Particular to current management challenges and in terms of 
overcoming potential transition challenges, DHS leadership will 
strengthen and maintain its operations by identifying, supporting and 
developing potential leaders through Department-wide recruiting 
efforts. Maintenance of a robust transition plan and standard operating 
procedures along with management of an interactive web-based training 
application will provide employees with access to both mandatory and 
individual training opportunities that are flexible in terms of access 
and time and economical in terms of cost.
    Last, DHS culture adopted from legacy agencies provides both 
obstacles and opportunities to overcome present management challenges. 
The goals implemented in fiscal year 2007 and 2008 provide the 
framework for the Department to identify and develop best practices, 
represent multiple stakeholders and constituents, and share information 
both inter- and intra-Departmentally. These capacities will ensure that 
America is protected from dangerous people, dangerous goods and is 
prepared for dangerous environmental events. Over the next 5 to 10 
years, the Department will ensure that best practices are disseminated 
and adopted as standard processes and procedures and that DHS functions 
as a unified Department of many capabilities, talents, and resources.
    Question 3. What are the Directorate for Management's major 
achievements in 2007 and 2008?
    Answer.
2007 Achievements--Under Secretary for Management
    1. Consolidation of Network sites.--Consolidated 100 percent of DHS 
HQ, CBP, ICE, FLETC and USCIS network sites (over 1,780 sites) to a 
single multiple protocol label switching (MPLS) network allowing DHS 
transparent monitoring of network performance and activity, 
prioritization of traffic and vastly improved security posture, and 
established the two DHS data centers to migrate DHS system operations.
    2. Regulatory Framework.--Established the regulatory framework to 
ensure the Department Chief Information Officer had control over 
Department-wide IT Acquisitions, budgets, and personnel performance, in 
2007 we aligned over $3.2 billions of IT investment.
    3. Recruitment and Hiring.--DHS improved hiring by providing 
timely, direct interaction with applicants. The Department's average 
time to hire was 41 days (versus the OPM target of 45 days). This 
included:
   Hiring 4,000+ Border Patrol Agents, 1,500+ above target of 
        2,500 (CBP);
   Hiring 2,300+ Protection Officers, 1,600+ above target of 
        646 (CBP);
   Hiring 11,200+ Transportation Security Officers, exceeding 
        the target of 10,300 (TSA);
   Meeting the target of hiring 412 Immigration Enforcement 
        Agents (ICE).
    4. Safety and Occupational Health Program.--Since fiscal year 2004 
the DHS injury rate has been nearly halved to a rate of 9.3 per 100 
employees. This is a significant accomplishment for the Nation's 
largest law enforcement Department, and is a reflection of the 
strategic direction and leadership provided by the Office of Safety and 
Environmental Programs within the Office of the Chief Administrative 
Officer.
    5. Energy Management Program.--The DHS Energy Management Program 
received the President's award for Leadership in Federal Energy 
Management. The Department has reduced energy usage by 18 percent, or 
1.7 trillion BTU.
    6. Consolidated Headquarters Program.--DHS has worked closely with 
the General Services Administration on the preparation of a Draft 
Master Plan for the redevelopment of St. Elizabeths West Campus as the 
DHS Consolidated Headquarters, and played an integral role in the 
development of the St. Elizabeths' Draft Environmental Impact 
Statement.
    7. Financial Management.--The Department has dramatically improved 
its financial management and stewardship of taxpayer dollars. The 
fiscal year 2007 Annual Financial Report, the principal financial 
statement of accountability for DHS, shows achievements in every area 
of measurement, and that our corrective actions are working. The number 
of organizations with no material weaknesses increased from four to 
seven, system security weaknesses were reduced from six to three, and 
the number of component conditions that contributed to fiscal year 2007 
material weaknesses was reduced from 25 to 16. Overall, audit 
disclaimer conditions were reduced by 40 percent.
    8. Congressional Responsiveness.--OCFO improved responsiveness and 
adherence to Congressional deadlines in meeting the arduous demands of 
Congress. This included the on-time submission of nearly 1,500 
Congressional Questions For the Record from Appropriations Committee 
hearings.
    9. Build the DHS Acquisition Workforce.--OCPO made significant 
progress in the recruitment and development of the acquisition 
workforce which provides critical support to the DHS mission. Staffing 
levels within the Office of Procurement Operations, an organization 
providing contracting support for all headquarters offices, increased 
by 29 percent from fiscal year 2006 levels, and made awards totaling 
over $4.4 billion. Various DHS training programs have resulted in the 
certification of 237 program mangers since December 2006, a 53 percent 
increase in the past 11 months as well as an increase in the number of 
certified Contracting Officer's Technical Representatives.
    10. Make Good Business Deals.--DHS' small business procurement 
program was recognized by the Small Business Administration with a 
score of ``green'' on its first ever Small Business Scorecard. Out of 
the 24 Federal agencies that received a rating, DHS was 1 out of only 7 
agencies that received a ``green'' score. OCPO made significant 
progress implementing a new acquisition oversight program. Several 
special oversight reviews on particular procurement issues have been 
performed identifying areas of potential improvement for DHS, both at 
the Component and Department-wide levels.
    11. Competitive Contracting.--Increased from 49 percent of the 
competition base in fiscal year 2006 to 69 percent in fiscal year 2007.
2008 Achievements--Under Secretary for Management
    1. Financial management policies and process.--Over the past year, 
nearly 30 new CFO policies were written and signed and our Financial 
Management Policy Manual is expected to be on line this summer. We 
released the 2008 Internal Controls Playbook, published the first ever 
DHS Highlights Report, launched a new Program and Budget Review Process 
and initiated the first Performance Improvement Officer Council. In 
addition, e-Travel program success helped the Department achieve its 
best E-Gov scorecard in 2 years.
    2. Acquisition Workforce.--Implemented a centrally funded and 
managed Acquisition Professional Career Program modeled after the 
highly successful Navy Intern Program. This program features three, 
single-year rotations through various components and provides the 
participants with all the experience and training they need to become 
journeyman level acquisition professionals.
    3. Competitive contracting.--As of mid-year fiscal year 2008, DHS 
exceeded its annual goal of 68 percent by 4 percentage points.
    4. Counter-Intelligence Capabilities.--Increased counter-
intelligence awareness training available to headquarters and 
components by 5 percent and extended to non-HQ components. Reduced 
vulnerabilities to DHS facilities by bolstering personnel assigned to 
the Technical Security Counter-Measures Program increasing capacity for 
critical security sweeps. Increased deployment of training to State and 
local government as well as private-sector personnel handling 
classified and sensitive information received from the Department.
    5. Consolidated Headquarters.--Worked closely with the General 
Services Administration (GSA) toward expeditiously bringing the Master 
Planning, Environmental Impact Statement and National Historic 
Preservation Act Section 106 Consultations to a successful conclusion 
for the DHS Consolidated Headquarters at St. Elizabeths Campus. In 
cooperation with the GSA National Capital Region, a draft prospectus 
was also completed for consolidation of HQ mission support elements 
within the National Capital Region.
    6. Consolidated Mail Service.--Achieved milestones toward delivery 
of a Consolidated Remote Delivery Site to provide mail and courier 
services to DHS Component locations in the Washington, DC metropolitan 
area thereby improving efficiency, strengthening accountability and 
reduce risk to DHS employees by screening for chemical, biological, 
radiological, nuclear and explosive threats.
    7. Workforce Safety.--Continued to achieve significant reductions 
in departmental injury rates, with over 46 percent reductions in total 
injury and lost time injury rates in the first quarter of fiscal year 
2008 from fiscal year 2003.
    8. Energy Management.--Received the Presidential Award for 
Leadership in Federal Energy Management for institutionalizing energy 
management practices. Achieved a 17.1 percent energy reduction relative 
to the 2003 baseline. This compares with a requirement in 42 U.S.C. 
8253(a)(1) to reduce energy consumption by 4 percent and the goal 
established by Executive Order 13423 of 6 percent. Additionally, DHS 
purchased an amount of renewable electricity equal to 4.0 percent of 
its annual consumption.
    9. Veterans Outreach.--Conducted Veterans Preference training for 
48 DHS Human Capital and Equal Employment Opportunity specialists as 
part of the Veterans Outreach Strategy while continuing followup 
training on the Uniform Services Employment & Reemployment Rights Act. 
As a result of this training, we have established a de facto DHS 
Veterans Outreach Support Team composed of the trainees. This team can 
be used Department-wide for veterans outreach and hiring activities and 
can assist each other regardless of component. Veterans compose 24.2 
percent of the Department's permanent civilian workforce and 28.4 
percent of the Department's managers and supervisors. In 2007, DHS 
doubled the number of veterans hired in 2006; i.e. from 3,015 to 6,013.
    10. Transition Planning.--Developed a transition planning approach 
for DHS to ensure operational continuity before, during and after the 
2009 presidential administration transition and change in DHS political 
leadership. Recognized in for exemplary progress and improvements to 
breadth of supporting change management efforts.
    Question 4. How many FTEs does DHS currently have? How many actual 
employees does DHS currently have? How many contract employees does DHS 
currently have?
    How do these numbers relate the Department's 2007 figures?
    What, if any, changes should we expect to see in these numbers in 
2009?
    Answer. Below is the breakdown of FTEs, actual employees and 
contract employees for 2007, 2008 and 2009:
2007
    FTEs.--186,804.
    Onboard strength.--182,397.
    Contractor employees.--DHS does not track contractor FTE or onboard 
strength because we often acquire support on a fixed-price basis or 
based on performance objectives. The number of personnel the contractor 
employs is not transparent, since we are paying for a deliverable or 
outcome rather than man-hours. In those instances where DHS is 
acquiring a specific ``level of effort'' or man-hours, contractors may 
use several employees to accomplish tasks that total the number of man-
hours in one FTE. While it is not possible to track or provide this 
information currently, we are working with the Chief Procurement Office 
to address this concern of Congress.
2008
    Current FTEs.--197,055.
    Current onboard strength.--202,060.
    Contractor employees.--DHS does not track contractor FTE or onboard 
strength because we often acquire support on a fixed-price basis or 
based on performance objectives. The number of personnel the contractor 
employs is not transparent, since we are paying for a deliverable or 
outcome rather than man-hours. In those instances where DHS is 
acquiring a specific ``level of effort'' or man-hours, contractors may 
use several employees to accomplish tasks that total the number of man-
hours in one FTE. While it is not possible to track or provide this 
information currently, we are working with the Chief Procurement Office 
to address this concern of Congress.
2009
    FTEs (requested).--204,993.
    Question 5. What are the challenges that DHS faces with program 
office staffing and expertise? How have those challenges contributed to 
issues with major acquisition outcomes, and how do you plan to address 
them?
    Answer. The challenges experienced by program offices are the 
availability of training, balancing training with primary duties, and 
building the future workforce. A trained and qualified program office 
staff is able to mitigate the risk encountered and therefore improve 
acquisition outcomes. As the program management certification program 
becomes more mature and robust, individuals are required to squeeze 
required training amongst other high-priority activities. More is being 
asked of an already overloaded workforce.
    With additional emphasis on training, the Department is attempting 
to rapidly ramp up the training throughput. While DHS has an agreement 
with the Defense Acquisition University (DAU), DAU cannot satisfy the 
entirety of acquisition training required. Other alternatives, such as 
contracting for instructors to present the curriculum, are being 
pursued. Providing sufficient training opportunities when required for 
the workforce will improve performance and reduce program risk.
    The Department is currently working not only to get those trained 
who are currently assigned as program managers, but also working on 
developing the future workforce. The objective is to have a highly 
skilled and well-qualified pool of individuals who already have the 
education, training, experience, and certification prior to selection 
and assignment in these critical acquisition positions.
    To resolve our personnel shortages we are intensifying our human 
capital planning efforts to ensure we minimize skill and competency 
gaps, as well as critical vacancies. We are currently conducting 
staffing studies that will help the Department better define its 
acquisition workforce needs. Our current workforce includes program 
managers and contract specialists. As part of our human capital 
planning efforts, we will identify other required acquisition career 
fields such as test and evaluation, logistics, cost estimation, etc. We 
are aggressively working to ensure that each acquisition position, upon 
definition, is encumbered by an acquisition professional trained and 
certified at the appropriate level. We are utilizing the Department of 
Defense (DoD) Defense Acquisition Workforce Improvement Act framework 
to develop a DHS certification standard.
    DHS is currently testing an existing Air Force program office 
staffing model for possible applicability in determining our program 
office staffing requirements. The model has been utilized by the Air 
Force for program office staffing requirements in the fiscal year 2004-
fiscal year 2010 Program Objective Memorandum cycles, and the model has 
been utilized by other DoD agencies as well. Preliminary results in DHS 
indicate the model accurately captures our staffing requirements, 
although more study is needed and is on-going.
    A snapshot of 17 DHS Level I programs from a cross-section of DHS 
components run through the model indicates overall program office 
staffing to be at approximately 90 percent of requirement. This is 
consistent with Air Force program office staffing. Preliminary 
functional assessments indicate DHS has more program managers as a 
percentage against total program office staffing than a typical DoD 
program. In addition, DHS has fewer contract specialists and financial 
managers as percentages against total program office staffing than a 
typical DoD program. Preliminary study recommendations are to normalize 
these percentages more in line with DoD programs, although further 
study and analysis are needed. Additional Level I programs are being 
analyzed, and the results will be presented to the DHS Program 
Management Council for review.
    From December 2006 to the present, our number of certified program 
managers has increased from 449 to 948, and our number of contract 
specialists has increased from 865 to 977. This fiscal year, we 
received funding for our Acquisition Professional Career Program. This 
is a developmental program modeled after the highly successful DoD 
program and aims to attract new talent to fill entry-level acquisition 
positions and develop our future acquisition leaders. Our inaugural 
class began in January 2008 with 11 contracting professionals and a 
second class of approximately 32 contracting professional will begin in 
June 2008. In fiscal year 2009, we plan to expand the program to other 
acquisition career fields and expect funding for approximately 83 
participants in the program. Our goal is to grow this program to 300 
positions by fiscal year 2011 to fill critical acquisition positions.
    Question 6. The Department's Investment Review Process (Management 
Directive 1400) has been under revision for several years.
    In your view what is the appropriate role for Department-level 
oversight of its major investments and why have previous efforts not 
provided sufficient oversight?
    How do you plan to address this issue before the next 
administration?
    Answer. The Department must perform the appropriate oversight of 
its major acquisition efforts to insure that risks are properly 
managed, and finite Departmental resources (budget, schedule, 
facilities and personnel) are used to optimal effect. However, 
oversight must be complemented by execution support. Execution support 
includes mentoring by experienced acquisition professionals as well as 
clear acquisition policies and procedures.
    The current version of Management Directive (MD) 1400 only 
addresses the Capital Investment acquisition mechanism. Capital 
Investment is only one of the mechanisms used to acquire DHS 
capability. Other-than-capital-investment acquisition mechanisms (e.g. 
enterprise services, grants) are frequently used by the Department and, 
in aggregate, have significant impact on the delivery of desired 
overall Departmental capability.
    The current plan for replacing MD 1400 includes establishing 
acquisition oversight/execution policies and processes for all of these 
capability delivery mechanisms. It should be noted here that the 
Department/components already manage these other mechanisms, but as 
stand-alone mechanisms . . . not as acquisition mechanisms. Clear 
acquisition policies and processes, for all of the acquisition 
mechanisms used by the Department, are essential to achieving 
efficient, economic and reliable capability delivery to the 
Department's operational user base.
    The Department established the Acquisition Program Management 
Division (APMD) of the Office of the Chief Procurement Officer in 
August 2007. The division was established to improve oversight and 
execution support for DHS acquisition programs. To date, APMD has 
performed Quick Look assessments of 37 level 1 programs, has overseen 
Deep Dive reviews of the SBInet and ASP programs, and restarted the 
Investment Review process. The division also has provided program 
execution support (advice and guidance to programs by experienced 
acquisition professionals) including a process to collaboratively 
assist programs in strengthening their Acquisition Program Baselines 
(APBs).
    Currently, the APMD team is focused on an aggressive Investment & 
Acquisition process re-engineering effort. That effort includes 
replacing MD 1400 as described above, establishing revised investment 
and acquisition decision procedures, and establishing a new periodic 
reporting system. These efforts are scheduled for completion during 
calendar year 2008.
    Question 7. Currently, DHS is attempting to restructure its 
financial accounting systems in an effort to improve financial 
management across all components. This process is being managed by the 
Department's Chief Financial Officer.
    What authority does the DHS CFO have to force the component 
agencies' CFOs to comply with the Department-wide strategy?
    If the Secretary has made it clear that the DHS CFO has authority, 
why won't the Department commit to publishing a Management Directive 
making this clear?
    Answer. The authority of the DHS Chief Financial Officer (CFO) 
comes from the CFO Act of 1991--one of the most comprehensive pieces of 
financial management improvement legislation to date. The act 
explicitly required that the agency CFO report directly to the agency 
head on financial management matters and is specifically charged with 
developing and maintaining an integrated agency accounting and 
financial management system. To avoid fragmented financial management 
across the enterprise, the CFO Act mandates the DHS CFO develop and 
maintain Department-wide financial management systems that comply with 
accounting principles and requirements, internal control standards, and 
requirements from oversight bodies. The DHS Financial Accountability 
Act of 2004 formally designated DHS as an agency under the CFO Act, 
thereby solidifying the abovementioned responsibilities of the DHS CFO.
    The Department has a management directive that further emphasizes 
the CFO Act. DHS Management Directive 0005 explicitly names the DHS CFO 
as the ``line of business chief who exercises leadership and authority 
over Financial Management policy and programs for the entire DHS 
enterprise.'' The Directive also requires all DHS component to ``comply 
with and implement Departmental Management policies and procedures 
established by the DHS CFO.''
    Question 8. Obviously, there will be large contracts awarded by 
this administration that the next administration will have to honor. Do 
you anticipate providing the next administration with a detailed 
assessment of these financial expenditures?
    Answer. Yes, we are preparing to provide information regarding 
contracts with a total dollar value in excess of $100 million that are 
expected to carry over through the transition. The Office of the Chief 
Procurement Officer has already begun tracking those contracts. At this 
time the U.S. Coast Guard, the Transportation Security Administration, 
Immigration and Customs Enforcement, Federal Emergency Management 
Agency, and Customs and Border Protection currently have contracts with 
contract values in excess of $100 million that will carry over through 
the transition.
    Question 9. What are the Department's overall statistics for 
minorities in the executive cadre, the Office of the Secretary and 
Executive Management, and the Office of the Under Secretary for 
Management?
    Response. Please find the attached spreadsheet providing the 
requested information regarding the Department's demographics. We note, 
however, that these snapshot statistics do not reflect the number of 
applicants for these positions or the applicants' qualifications. They 
also do not reveal the percentage of individuals in the civilian labor 
force qualified for those positions.

                                                        SES BY GENDER AND RACE/ETHNICITY--OVERALL
                                                                    [Updated Results]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Gender                                      Race/Ethnicity
                                             ------------------------------------------------------------------------------------------------
                                                                       ALL OTHER   AMERICAN               BLACK, NOT              WHITE, NOT
                   Agency                                              ASIAN OR    INDIAN OR   ASIAN OR       OF                      OF         Total
                                                Female       Male       PACIFIC     ALASKAN     PACIFIC    HISPANIC    HISPANIC    HISPANIC
                                                                       ISLANDERS    NATIVE     ISLANDER     ORIGIN                  ORIGIN
--------------------------------------------------------------------------------------------------------------------------------------------------------
CBP.........................................          20          68           0           0           1           4          10          73          88
CIS.........................................          20          24           0           0           0           1           2          41          44
DNDO........................................           1           6           0           0           1           0           0           6           7
FEMA........................................          11          47           0           0           0           4           2          52          58
FLETC.......................................           3           5           0           0           0           1           0           7           8
ICE.........................................          12          43           0           0           0           1           6          48          55
NPPD........................................           2          13           0           0           0           0           0          15          15
OIG.........................................           2          11           0           0           0           1           0          12          13
OS..........................................          29         100           0           0           0           2           5         122         129
ST..........................................           6          22           0           0           2           0           0          26          28
TSA.........................................          30         109           0           1           6          15           5         112         139
USCG........................................           3          10           0           0           1           2           0          10          13
USSS........................................           8          41           1           1           0           5           2          40          49
                                             -----------------------------------------------------------------------------------------------------------
      Total.................................         147         499           1           2          11          36          32         564         646
--------------------------------------------------------------------------------------------------------------------------------------------------------


               SES BY GENDER AND RACE/ETHNICITY--OFFICE OF THE SECRETARY AND EXECUTIVE MANAGEMENT
----------------------------------------------------------------------------------------------------------------
              BLACK, NOT OF HISPANIC ORIGIN                      HISPANIC            WHITE, NOT OF
--------------------------------------------------------------------------------    HISPANIC ORIGIN
                                                                                ----------------------   Total
                    Female                         Male      Female      Male      Female      Male
----------------------------------------------------------------------------------------------------------------
1                                                       1          0          4         10         37         53
----------------------------------------------------------------------------------------------------------------


                        SES BY GENDER AND RACE/ETHNICITY--UNDER SECRETARY FOR MANAGEMENT
----------------------------------------------------------------------------------------------------------------
              BLACK, NOT OF HISPANIC ORIGIN                      HISPANIC            WHITE, NOT OF
--------------------------------------------------------------------------------    HISPANIC ORIGIN
                                                                                ----------------------   Total
                    Female                         Male      Female      Male      Female      Male
----------------------------------------------------------------------------------------------------------------
0                                                       0          0          1         10         27         38
----------------------------------------------------------------------------------------------------------------

    Note.--This data is consistent with the 5/9/08 Blue Report.
  Questions From Ranking Member Mike Rogers of Alabama for Elaine C. 
  Duke, Deputy Under Secretary for Management, Department of Homeland 
                                Security

                    CENTER FOR DOMESTIC PREPAREDNESS

    Question 1. The President's fiscal year 2009 budget allocation for 
the Center for Domestic Preparedness included an unacceptable reduction 
of 25 percent. The Center for Domestic Preparedness is a key training 
facility operated by the Department of Homeland Security, and is the 
only weapons of mass destruction (WMD) training facility that provides 
hands-on training to civilian emergency responders which includes the 
use of live chemical agents.
    For fiscal year 2008, Congress provided $62.5 million for the 
Center for Domestic Preparedness. In addition, the 9/11 Recommendations 
Implementation Act of 2007, which the President signed into law on 
August 3, 2007, included language that authorized increases in funding 
for the Center over a period of 4 years.
    In a February 6, 2008 letter to Secretary Chertoff, I expressed 
concern about the proposed budget reduction at the CDP and asked for a 
detailed justification for this budgetary decision. In his response, he 
stated:
    ``The department believes that the $47 million requested in fiscal 
year 2009 will be sufficient to supports CDP's requirements and to 
continue its operations . . .''.
    Could you explain in detail the rationale for reducing the CDP's 
budget by 25 percent?
    Answer. The Federal Emergency Management Agency (FEMA) fully 
recognized the importance of preparedness training, and particularly 
the training conducted at the Center for Domestic Preparedness (CDP). 
CDP is a key member of the National Domestic Preparedness Consortium 
and the only Federal chartered weapons of mass destruction (WMD) 
training facility.
    The CDP budget has undergone continuous review since the facility 
was transferred to FEMA from the Department of Homeland Security (DHS) 
last year. At the same time, FEMA has provided enhanced management in 
the process of streamlining contracts with vendors and training 
contractors, as well as providing greater oversight of expenditures and 
stipends. As a result, FEMA believes that CDP will be able to meet all 
program requirements and goals with the President's $47 million 
request. FEMA is dedicated to continuing to look for ways to 
effectively manage the resources provided to CDP, as well as all other 
training facilities, to gain the greatest advantages for training 
partners and the taxpayer.
    The Center for Domestic Preparedness will make adjustments to 
various contracts and support activities to meet the funding level 
provided in the fiscal year 2009 budget request. The following listing 
compares the fiscal year 2008 and the projected fiscal year 2009 
budgets by category:

------------------------------------------------------------------------
                                              FY 2008         FY 2009
------------------------------------------------------------------------
Training Support Operations.............     $15,587,144     $11,322,518
Program Operations and Support..........      19,631,856      12,687,234
M&A Set Aside...........................       1,781,000       1,410,000
                                         -------------------------------
      Totals............................      62,500,000      47,000,000
------------------------------------------------------------------------

                     OFFICE OF HEALTH AFFAIRS (OHA)

    Question 2. Last year the Department established the Office of 
Health Affairs, and within that the Office of Food, Agriculture and 
Veterinary Defense (FAVD). That office is charged with the 
responsibilities of HSPD-9, Defense of United States Agriculture and 
Food. Despite the importance of this mandate, the office remains 
significantly understaffed and underfunded. The budget is flat at 
$727,000 and five full-time employees. This small workforce is 
responsible for an ever-expanding mission.
    On July 9, 2007, Chairman Carney and I held a field hearing in 
Pennsylvania on food safety, at which Dr. Tom McGinn, the director of 
the FAVD, testified to the critical food security mission of that 
office.
    In a Department of over 200,000 employees, is it sensible that only 
five full-time employees are allocated to the safety of our Nation's 
food supply?
    Will the office be able to keep its avian influenza contractors on, 
since I understand their funding runs out later this year?
    What steps are being taken to ensure DHS plays the lead 
coordinating role if an outbreak of avian occurs?
    Should Congress take any legislative action to ensure that other 
agencies--Departments of Agriculture and Health and Human Services in 
particular--recognize DHS' lead coordinating role?
    Answer.
    1. The Department plays a critical role in the defense of our 
Nation's food and agricultural supply from a wide-range of threats, 
from naturally occurring diseases to man-made threats. The Department 
has multiple components and programs focusing on these efforts to 
defend the Nation's food and agricultural supply, from food and 
agricultural inspections at the border and other points of entry to 
utilizing intelligence information to monitor food and agricultural 
threats to providing an effective response to an outbreak of FMD or 
other food, agricultural or veterinary disease.
    The FAV Defense division of the Office of Health Affairs (OHA) 
serves as the Department's lead for food and agricultural defense, but 
not as the sole entity involved in these critical issues. The FAV 
Defense division has developed a strategic plan which outlines the 
mission space to accomplish Food Defense and Agricultural Security 
goals consistent with Department of Homeland Security assignments 
outlined in HSPDs 5-10. FAV Defense enables the Assistant Secretary and 
Chief Medical Officer to serve as the principal medical advisor to the 
Secretary, FEMA Administrator, and other departmental leadership for 
all food, agricultural and veterinary defense responsibilities for the 
Department. This role includes the coordination and integration of DHS 
food, agricultural and veterinary defense activities, leading the 
Department's responsibilities under HSPD-9, Defense of U.S. Agriculture 
and Food, and serving as the Department's primary point of contact for 
Federal, State, local and private sector food, agriculture and 
veterinary defense activities.
    2. FAV Defense Division has five contractors and two Public Health 
Service officers that are currently funded with Avian Influenza (AI) 
money. By the end of fiscal year 2008, 2 contractors will remain funded 
into the following fiscal year along with the Federal staff.
    3. Depending on the nature and scope of an avian flu outbreak, the 
Department of Homeland Security has been designated by the President of 
the United States as the lead Federal Department to coordinate Federal 
operations within the United States to prepare for, respond to, and 
recovery from an outbreak of avian flu as directed under HSPD-5, 
Management of Domestic Incidents, and HSPD-9, Defense of the U.S. 
Agriculture and Food Supply. The U.S. Department of Agriculture is the 
Federal lead for preparing for and responding to animal and zoonotic 
threat and diseases, such as an outbreak of avian influenza. However, 
the Department of Homeland Security maintains the overall Federal 
responsibility for incident management, as the HSPD-5 lead, for a major 
outbreak of pandemic influenza to coordinate and integrate response 
efforts ranging from human and animal health, protecting critical 
infrastructures and key resources and law enforcement.
    In the event of an outbreak of avian influenza the following steps 
would be initiated: As with any animal disease, a tiered level of 
response is the most efficient means of managing the incident, as 
directed through the National Response Framework. The intentional 
introduction of a foreign animal disease or the progression of an event 
to one of ``catastrophic'' nature, which exceeds the capability of a 
single agency, requires DHS involvement. Ideally, DHS involvement would 
begin early in the recognition of a foreign animal disease outbreak to 
ensure an effective and seamless transition of response capability 
between agencies or departments should that be necessary.
    4. Legislation clarifying the Department's lead role in preparing 
for, responding to and recovering from a catastrophic event as 
designated under HSPD-5, Management of Domestic Incidents, would 
reaffirm the Department's mission of coordinating and integrating 
Federal, State and local roles and responsibilities as they relate to 
terrorism or a naturally occurring catastrophic incident.

                                CANINES

    Question 3a. Deputy Under Secretary Duke, I understand from your 
predecessor Tom Essig, the Department's Chief Procurement Officer, that 
his office is undertaking a Department-wide study of canine 
procurement. He is working to assess the Department's total need for, 
and acquisition of, working canines across the many individual agencies 
that use them.
    Can you tell me where we stand with this study?
    Answer. At this point, a cursory analysis has been performed 
largely examining economies and demand across DHS components. As a 
strategically sourced solution, it has not yet been advanced to the 
initiative stage and accepted by the Professional Services Family 
Council.
    Question 3b. Is the analysis being coordinated with the ongoing 
Department-wide assessment of canine utilization by Dr. Tom McGinn and 
the DHS office of Food, Agriculture and Veterinary Defense (FAVD)?
    Answer. FAV Defense Division, through Dr. Tom McGinn's role as 
Chief Veterinarian for DHS, has begun identifying DHS Canine Programs 
with regards to health, housing and veterinary medical care of working 
dogs, and ultimately will also include working horses within DHS.
    Question 3c. Given the relatively low staffing levels within FAVD, 
does that office have the staffing level necessary to undertake this 
and the many other important projects its leaders view as requisite for 
doing their part in securing the homeland?
    Answer. FAV Defense Division has sufficient resources to achieve a 
defined set of deliverables for fiscal year 2008.

                       BORDER PATROL RECRUITMENT

    Question 4. In a March 25, 2008 Fox News Story, it was reported 
that the U.S. Border Patrol has taken steps to meet a mandate to hire 
6,000 new border agents by the end of 2008, including:
   Eliminated the need for a high school diploma or GED for 
        entrance into the Border Patrol;
   Lowered entrance exam passing test grades from 85 percent to 
        70 percent;
   Concentrated 4 months of training into 10 weeks; and
   Raised the entry level age from 37 to 40.
    If you are aware, can you provide an explanation as to why the 
Border Patrol doesn't require new agents to have at least a high school 
diploma or GED?
    If you do not have knowledge of Border Patrol hiring procedures, 
could you please submit a detailed explanation for the record on this 
news report and the Border Patrol recruitment and minimum standards for 
acceptance?
    Answer. The Border Patrol has, in fact, never had a requirement for 
a High School diploma or GED. It does, however, require that candidates 
pass a stringent pre-employment test (which is challenging even for 
some college graduates) and have appropriate education or experience to 
qualify for at least a GS-5 civil service grade. These pre-employment 
requirements ensure that the Border Patrol retains quality. As a 
practical matter, however, very few if any Border Patrol agents do not 
have at least a GED, and many agents have taken at least some college 
courses.
    The Border Patrol did not lower the required test scores from 85 to 
70 percent correct; 70 percent was and still is the minimum 
satisfactory score for the test. In the past, when hiring was occurring 
at a slower pace and it was possible to be even more selective, this 
may have resulted in a larger percentage of hires having higher scores 
than today. Nonetheless, the required test score is unchanged, and the 
test and passing score have been validated for predicting which 
applicants have the highest probability of successfully becoming a 
Border Patrol Agent. Achieving a passing score on our test is a 
significant accomplishment and indicates that an applicant has the 
capacity to become a good Border Patrol Agent. All applicants must 
still complete rigorous Academy and post-Academy internships, so there 
are strong processes in place to ensure that the Border Patrol 
maintains quality.
    On October 1, 2007, the United States Border Patrol Academy 
implemented a new 55-40 day schedule to train new Border Patrol Agents 
at the United States Border Patrol Academy. Over the last couple of 
years the Border Patrol Academy has been tasked with training the 
largest influx of new agents in the history of any Federal law 
enforcement training Academy. In order to complete this monumental 
task, the Academy reviewed the current schedule and determined that a 
better, more efficient way of training was possible without diminishing 
the quality of agents graduating from the Academy and reporting to the 
field.
    The biggest change during the first 55 days is that no Spanish 
curriculum is presented. When the trainees arrive at the Academy, 
everyone will complete a Spanish language proficiency exam. Based on 
this exam, the trainees who achieve a certain level of proficiency do 
not have to complete the 40 day add-on Task-Based Spanish Language 
Training program.
    The result of this review is a 55-day schedule that incorporates 
the traditional training found at most law enforcement academies and 
includes Law/Operations, Driver Training, Physical Techniques and 
Firearms. All the trainees for a particular class will enter on duty at 
the Academy and complete the first 55 days of training together. During 
this period the trainees will complete 433 hours of training over a 
period of 55 days. The Spanish curriculum is separate and will consist 
of 40 days of training, if needed, after the initial 55-day Academy.
    Also, it should be noted that the entry level age was raised to 40 
to deepen the applicant pool and assist the Border Patrol in meeting 
its appropriated number of Border Patrol agents by the end of 2008.

                            EMPLOYEE MORALE

    Question 5. Following up on hearings this committee has held in the 
109th and 110th Congress' on employee morale, could you provide an 
update on what the Department is doing to bolster morale?
    Is there a mechanism in place for upper level management to hear 
the thoughts and concerns of rank-and-file Department employees to 
ensure their suggestions are being heard?
    Answer. The Department has undertaken numerous initiatives and 
activities to promote employee engagement as described herein:
Surveys/Analysis/Action Plans
   From October 26-December 21, 2007, the Department conducted 
        its first survey of all permanent DHS employees--more than 
        140,000--and received responses from approximately 65,000 
        employees. The survey was designed to measure job satisfaction 
        and agency performance. We are using the survey findings to 
        sharpen policies and programs for continued improvement, 
        enhance our agency's performance and the experience of our 
        employees.
   DHS, at both the Department- and Component-level, continues 
        to engage in action planning activities and quarterly progress 
        monitoring that addresses employee concerns raised in the 
        results of the 2006 Federal Human Capital Survey (FHCS) and the 
        2007 Annual Employee Survey (AES).
   Data from the 2007 DHS Annual Employee Survey will allow 
        components to complete a more in-depth analysis to better 
        understand employee concerns and develop/tailor action planning 
        items accordingly.
   The Survey Engagement Team, made up of DHS Component 
        representatives, will continue to share best practices across 
        the Department.
   The Department is planning to expand DHS-wide focus groups 
        in 2008 to further identify areas for improvement and give 
        voice to concerned employees.
Continue Rollout of IdeaFactory:
   The Transportation Security Administration has developed 
        IdeaFactory, a modern version of the employee suggestion 
        program. Employees make suggestions online that can then be 
        commented on or improved by fellow employees. The suggestions 
        with the most endorsements are then evaluated and adjusted for 
        implementation across TSA. Adopted ideas include:
     It Matters to Mo, a twice-yearly area conference call with 
            Security Operations Assistant Administrator Mo McGowan that 
            any employee can dial into;
     Job Swap, a program that allows officers to ``swap'' 
            positions; and
     Walk a Mile in Our Shoes, which gives senior leadership 
            the opportunity to experience working at the checkpoint 
            first-hand.
   IdeaFactory is currently under evaluation for implementation 
        at the U.S. Coast Guard and National Preparedness and 
        Protection Directorate (NPPD). Successful implementation within 
        NPPD would provide an implementation platform for other 
        Headquarters components.
Communications
   Leadership Journal (Secretary's blog) to which employees can 
        post comments or questions.
   All components have employee newsletters.
   Customs and Border Protection is implementing an Ombudsman 
        program as an informal avenue for addressing employee's issues/
        problems related to leadership.
   To address communications issues CBP is exploring new 
        communication vehicles--``Fireside Chat'' with Commissioner, 
        etc. to facilitate two-way communication between employees and 
        senior leaders, CBP also conducted 125 focus groups with CBP 
        employees to further understand existing communications issues.
   FEMA launched an employee newsletter, incorporated Agency 
        accomplishments into intranet page, began a series of executive 
        brown bag lunches, site visits, and quarterly all-hands 
        meetings.
   Continue encouraging senior leaders to host town hall 
        meetings, site visits and other events designed to enhance 
        face-to-face communication with employees.
   Published FHCS and AES data and reports on internal and 
        external Web sites. Secretary sent message concerning survey 
        results to all employees with a link to survey reports.
   Provided timely and accurate information to employees using 
        a variety of channels.
   Continue to highlight DHS success stories on external Web 
        site and internal communication channels.
   Continue to enhance the way in which information is 
        presented on Web sites.
   Prepared DHS 101 Program with a forum and online course to 
        give DHS-wide perspective to all employees and allow for cross-
        Component leadership interaction.
   Continue to distribute news releases, fact sheets, 
        promotional materials etc., designed to promote knowledge and 
        understanding of the Department's priorities and initiatives.
   Continue to implement and update work-life practices such as 
        alternate work schedules, telework and Employee Assistance 
        Programs (EAP).
Continue Rollout of Performance Management Program
   Continue rollout of the DHS Performance Management Program--
        includes employee engaged results-focused performance plans 
        that align with organizational priorities and provide clear 
        expectations and goals for supervisors and employees. The 
        program is designed to be transparent in order to inspire 
        employee trust and acceptance, as well as to increase employee 
        understanding of the relationship between individual employee 
        goals and formally established organizational priorities. 
        Mandatory face-to-face performance reviews between employee and 
        supervisor are an integral part of this program, with 
        supervisory goals and competencies that are principled, people-
        centered, highly collaborative, and demonstrate stewardship of 
        public resources.
   Include the Secretary's goals as corporate goals in all SES 
        Performance Plans.
   Conducted manager survey to assess status of employee 
        performance plans.
   Created new awards to focus on and reward excellence in 
        cross-Component cooperation and relationships with external 
        partners. Also modified another award to highlight innovations.
Learning and Development
   Continue the DHS Fellows Program. This Program gives 
        outstanding GS-13s, 14s and 15s the opportunity for enterprise-
        wide leadership training, including visits to crucial emergency 
        planning sites and a 2-month rotational assignment within the 
        Department.
   Continue the Speakers Bureau Program to allow DHS employees 
        to hear from senior leaders, as well as from experts in fields 
        of interest to employees.
   Continue deploying the DHScovery Learning Management System 
        and conducting outreach events/activities to increase awareness 
        of DHScovery's benefits to organizational and individual 
        performance.
   Continue leadership development courses to help develop 
        future leaders and teach critical leadership skills to entry 
        and mid-level managers; courses designed to improve 
        opportunities for employee skill development.
Recruitment/Staffing
   Continue to monitor the progress of the initiatives designed 
        to close skill and human resource gaps for mission critical 
        occupations (e.g., Border Patrol Agents, Adjudication Officers 
        and Deportation Officers etc.).
   Continue the Career Paths Program to provide a bridge for 
        employees from TSA Transportation Security Officer positions 
        into higher graded jobs with Customs and Border Protection.
   Established the DHS Diversity Council and DHS Diversity 
        Strategy. Continue to establish relationships with diversity-
        based professional organizations and continue to pursue and 
        cultivate more relationships for the strategy's purpose.
   Conducted orientation for 110 DHS volunteers for the Black 
        Executive Exchange Program (BEEP) speakers' cadre, who are now 
        participating in BEEP events at Historically Black Colleges and 
        Universities. Participated in two events to date.
   Continue to utilize dhs.gov. This Web site is targeted to 
        Veterans as an outreach strategy.
   Continue to pursue all appropriate efforts to enhance 
        Diversity among the executive cadre.
   Continue to hire qualified applicants through the 
        Presidential Management Fellows (PMF) Program.
   Continue to hire quality candidates through our Senior 
        Executive Service (SES) Candidate Development Program (CDP), 
        thus ensuring we fill our most senior level positions within 
        the organization.
   Established the National Security Internship--an intensive 
        9-week summer program that combines Arabic language, Homeland 
        Security, Intelligence and Area Studies, and On-the-Job-
        Training experience at DHS or FBI Headquarters. This internship 
        program will create a direct career path for the DHS with some 
        of America's best and brightest undergraduate and graduate 
        college students who speak or are studying Arabic as well as 
        Homeland Security, Intelligence and Area Studies in college.
        immigration & customs enforcement (ice) staffing levels
    Question 6. In your prepared statement (pp. 6-7), you wrote about 
doubling the number of Border Patrol Agents. While we see an increase 
of CBP personnel by over 35 percent in the last few years, Immigrations 
& Customs Enforcement (ICE), the investigative component, has seen a 0 
percent increase over that same time. What plans does the Department 
have to ensure investigations are a priority?
    Answer. The Department has requested increases in funding for 
Immigration and Customs Enforcement that support the administration's 
Secure Border Initiative (SBI), controlling the border and executing a 
comprehensive interior enforcement strategy. In the fiscal year 2009 
request, the President requested $5.7 billion for ICE. The 2009 request 
includes resources for 87 Office of Investigations Special Agents and 
44 positions for the Visa Security Program and the Office of 
Professional Responsibility, as well as increases for detention beds 
and State and local law enforcement coordination.
    As a result of increased funding over the past several fiscal 
years, ICE has achieved many successes. In fiscal year 2007, for 
example, ICE's investigative accomplishments include:
   Enhanced Immigration Enforcement: Initiated 1,093 worksite 
        enforcement investigative cases, which resulted in 863 criminal 
        arrests (compared to 716 in fiscal year 2006) and 4,077 
        administrative arrests.
   Increased Compliance Enforcement: ICE implemented a high-
        intensity compliance enforcement operation to detect, deter, 
        and disrupt terrorist operatives who sought to exploit the 
        nonimmigrant process in order to remain illegally in the United 
        States. The operation resulted in 249 completed investigations 
        and 73 arrests.
   Increased Arms and Strategic Technology Investigations: ICE 
        increased its arms and strategic technology investigations, 
        resulting in 186 arrests (compared to 144 in fiscal year 2006), 
        178 indictments, and 115 convictions.
   Increased Human Smuggling Investigations: ICE initiated 
        2,528 human smuggling investigative cases which resulted in 
        1,821 criminal arrests, 1,150 indictments, 1,209 convictions, 
        and seized $16,400,283 in related monetary instruments.
   Apprehended Sexual Predators of Children: ICE achieved a 
        total of 10,434 criminal and administrative arrests through 
        Operation Predator.
   Increased Commercial Fraud and Intellectual Property Rights 
        Investigations: ICE initiated 1,275 Commercial Fraud and 
        Intellectual Property Rights investigative cases, which 
        resulted in 246 criminal arrests, 178 indictments, and 196 
        convictions.
   Targeted Transnational Gangs: ICE arrested a total of 3,302 
        gang members and associates nationwide.
   Furthered Nationwide Document-Fraud Prevention Efforts: ICE 
        initiated 1,309 fraud investigations, leading to a record 1,531 
        arrests and 1,178 convictions.
   Strengthened Border Enforcement Security Task Forces 
        (BESTs): Task Forces collectively made 516 criminal arrests, 
        1,037 administrative arrests, seized over 49,552 pounds of 
        marijuana, 1,326 pounds of cocaine, 151 pounds of 
        methamphetamine, 135 pounds of heroin, 237 weapons, 12 
        explosives, and approximately $2.5 million in U.S. currency.
   Initiated Significant Financial Investigations: ICE 
        initiated 3,069 financial investigations, resulting in 1,394 
        arrests and 897 convictions.
   Increased Number of Trade Units: To combat trade-based money 
        laundering, ICE now has Trade Transparency Units (TTUs) in 
        place in Colombia, Paraguay, Argentina, and Brazil. In fiscal 
        year 2007, ICE TTUs initiated 95 trade-based money laundering 
        investigations and generated 36 investigative referrals.
   Enforcement against Visa Violators: ICE investigators worked 
        to ensure compliance with the Nation's immigration laws among 
        student and exchange visitors and other nonimmigrant visitors 
        to the United States. ICE arrested 1,558 high-risk, non-
        immigrant status violators.
   Visa Security Program: ICE expanded overseas deployment to 
        nine visa security posts in eight countries and trained more 
        than 40 Special Agents to serve as visa security officers. ICE 
        investigations through this program resulted in the denial of 
        more than 750 visas and the initiation of more than 140 
        investigations.

   CONSOLIDATION OF THE DHS HEADQUARTERS AT THE ST. ELIZABETHS CAMPUS

    Question 7a. The President's fiscal year 2009 budget proposal 
includes $120 million in the DHS account and $346.6 million in the 
General Services Administration (GSA) account for the consolidation of 
the Coast Guard Headquarters, DHS Headquarters and the executive 
functions of DHS' operating components to the St. Elizabeths West 
Campus.
    Although the President requested funding for fiscal year 2008, 
unfortunately the funding for this important project was stripped from 
the Omnibus appropriations bill in the waning days of the First Session 
of Congress late last year.
    What was the impact of not receiving fiscal year 2008 
appropriations for this project?
    Answer. The lack of appropriations has delayed the overall St. 
Elizabeths development schedule, specifically delaying the Coast Guard 
Headquarters (Phase 1) completion until fiscal year 2013; Phase 2 until 
fiscal year 2014; and Phase 3 until fiscal year 2016 or later depending 
on future appropriations.
    Question 7b. Could you please provide an update on where this 
project now stands and how the funds requested in the President's 
fiscal year 2009 budget will be used?
    Answer. GSA's development plan for the St. Elizabeths West Campus 
is a 3-Phase effort. The Department's planned occupancy and phasing 
schedule is detailed in the DHS National Capital Region Housing Master 
Plan submitted to the Congress in October 2006 and is summarized as 
follows:

------------------------------------------------------------------------
                  Phase                              Component
------------------------------------------------------------------------
1 (a & b)................................  USCG Headquarters.
2........................................  DHS HQ, FEMA, National
                                            Operations Center.
3........................................  ICE, TSA, CBP USSS (Liaison),
                                            CIS (Liaison).
Note.....................................  A certain amount of
                                            infrastructure, shared
                                            serves and campus support
                                            facilities will be
                                            constructed with each phase.
------------------------------------------------------------------------

    GSA is currently in the process of completing the Final Master 
Plan, Environmental Impact Statement/Record of Decision and Section 106 
consultations under the National Historic Preservation Act for the 
development of St. Elizabeths West Campus. GSA and DHS continue to work 
closely with the NCPC and other regional planning agencies/consulting 
parties on this project and are confident we will reach an equitable 
solution on the Master Plan that meets the Department's minimum 
requirement of 4.5 million GSF of office space plus parking while 
preserving the National Historic Landmark designation and satisfying 
preservation obligations. GSA has also awarded a design contract for 
the construction of the new USCG Headquarters that has progressed to 
the design concept stage. GSA is confident in their ability to bring 
these processes to a successful conclusion in ample time to meet a 
third quarter fiscal year 2009 contract award for construction.
    Listed below is a detailed breakdown of the DHS fiscal year 2009 
Budget Request for the St. Elizabeths development. In sum, funds 
requested for fiscal year 2009 will be used to pay for tenant specific 
expense for the design, construction and infrastructure of Phase (1-a) 
of the new USCG Headquarters facility at St. Elizabeths West Campus 
(new construction) and are separate from costs attributable to the 
General Services Administration (GSA). Also included in the budget 
request are GSA Fees and DHS Project Team staffing expenses to 
coordinate the Headquarters Consolidation requirements across all the 
components. Last, the request includes funding for Chief Security 
Officer (CSO) Site Survey activities to monitor contract personnel, 
building materials and equipment to prevent, detect and respond to 
potential counterintelligence activities during construction.
    The fiscal year 2009 request does not include campus shared 
services such as child care, cafeteria, etc., which will be located in 
adaptive reuse of historic buildings (Phase 1-b) and will be requested 
in a future budget year. Phases 2 (DHS HQ, FEMA, National Operations 
Center) and 3 (TSA, CBP, ICE) will also follow in future budget years.
    Question 7c. Do you have an estimate for the total cost for this 
project and timeline for completion?
    Answer. The chart below depicts the current 3-phase development 
schedule and the estimated GSA and DHS costs subject to 
appropriations.*
---------------------------------------------------------------------------
    * The image has been retained in committee files.
---------------------------------------------------------------------------
    Question 7d. Can you discuss in detail the effect consolidation of 
DHS facilities will have on future costs?
    Answer. The Department's plan seeks to consolidate the critical 
mission execution functions of leadership, operations coordination, 
program management and policy at the St. Elizabeths Campus in not less 
than 4.5 million gross square feet of office space plus necessary 
parking and infrastructure. GSA determined through The Automated 
Prospectus System (TAPS) analysis that the consolidation at St. 
Elizabeths would result in a $743 million present value savings over a 
30-year period as compared to individually replacing leases without 
consolidation. This analysis was based on receipt of fiscal year 2008 
appropriations and will be revised by GSA to account for the lack of 
fiscal year 2008 funding.
    In addition to the direct real estate savings, DHS will be able to 
achieve further savings/cost avoidances at the consolidated 
headquarters campus through reduction of administrative overhead, 
elimination of redundancies and sharing of common campus services.
    The remaining mission support functions will be consolidated down 
to a manageable number of 6 to 8 locations taking into account unique 
mission requirements and has the opportunity to achieve approximately 
$420 million present value savings/cost avoidances over a 30-year 
period through collocation of similar functions, elimination of 
redundancies/increasing shared services and right sizing the real 
estate portfolio.
    Question 7e. What other benefits will accrue from consolidating 
facilities at St. Elizabeths?
    Answer. DHS' mission demands an integrated approach to protect our 
homeland. Yet, the Department's legacy facilities are dispersed in more 
than 40 locations and over 7 million Gross Square Feet (GSQF) of office 
space throughout the NCR. This extreme dispersion of components across 
the NCR impose significant inefficiencies in operations, problems that 
are magnified considerably at the most important moments--when the 
Department must act as a nimble and integrated team responding to 
significant natural disasters or terrorist threats. The lessons learned 
from Hurricane Katrina clearly demonstrated that DHS needs to operate 
with increased integration in the preparation for and response to 
threats or natural disasters. A single unified headquarters bringing 
together component leadership, operations coordination, policy and 
program management is a fundamental management tool necessary to 
support DHS operations and is critical to the Department's long-term 
ability to effectively perform our mission.
    Consolidating our facilities will increase efficiency, enhance 
communication, and foster a ``one-DHS'' culture that will optimize 
Department-wide prevention and response capability. Some of our 
facilities are not well-suited for mission requirements, and as the 
Department grows this will just exacerbate the situation. This 
seriously impacts our ability to recruit and retain people, when they 
have more appealing options in the Federal Government and clearly has a 
negative impact on morale for which we are often criticized.
    Question 8. In congressional testimony on February 13, 2008 before 
the Appropriations Subcommittee on Homeland Security, the former 
Comptroller General of the United States, David Walker, indicated that 
``more work remains'' in implementing a performance-based human capital 
management system (p. 10).
    Could you please describe what incentive programs (competitive 
salaries, performance-oriented pay system, graduate education 
reimbursement, etc.) have been instituted to attract and retain top 
tier talent at the Department?
    Since the departure of Chief Human Capital Officer Marta Perez in 
January 2008, can you update me on the implementation of the 
Department's 2009 Human Capital Operational Plan?
    Answer. In 2004, the Department put in place a directive providing 
for additional compensation to address employee recruitment and 
retention incentives. It includes provisions for paying recruitment 
incentives, relocation incentives, and retention incentives and using 
the superior qualifications and special needs pay-setting authority as 
well as the repayment of student loans for recruitment and retention.
    During 2007, the Department paid 108 recruitment incentives, 
totaling $1,274,012; 21 relocation incentives, totaling $406,482; 656 
retention incentives, totaling $580,432; and 71 student loan 
repayments, totaling $554,711.
    The comparable numbers for 2006 were 21 Recruitment Incentives, 
totaling $279,458; 12 Relocation Incentives, totaling $149,601; 1098 
Retention Incentives, totaling $3,350,241; and 17 Student Loan 
Repayments totaling $161,425.
    There are also two draft directives in the coordination process--a 
referral bonus policy and a tuition assistance policy. The former would 
pay employees up to $1,000 for referring individuals subsequently 
selected for hard-to-fill positions. The Tuition Assistance (TA) policy 
for employee supplemental Training, Education, and Professional 
Development allows employees, with their supervisor's approval, to 
pursue and/or advance their formal academic education. If studies 
relate to current duties, resolve an identified staffing problem and/or 
are part of a planned, systemic and coordinated agency employee 
development plan, employees and supervisors will coordinate requests 
for tuition assistance funds for no more than three college courses (9 
credit hrs) per semester using their respective organizational program 
funds. To comport with merit systems principles any request that places 
an employee in a full-time student status will require a competitive 
selection process that affords other eligible employees equal access 
and/or opportunity to compete for the program offering.
    In addition, the Department implemented the title 38 pay 
authorities, under delegation agreement with OPM, to allow recruitment 
and retention of medical officers (physicians) with extensive prior 
experience. None of the available options; the General Schedule, Senior 
Executive Service, or the Senior Level or Scientific or Professional 
pay systems provided sufficient flexibility or salary range to 
accommodate the pay received by the candidates desired for critical 
medical officer positions in the Department. As implemented, the title 
38 pay setting authority provides increased pay-setting flexibility, 
allowing the Department to attract candidates with the desired 
qualifications and experience.
    Since Marta Perez's departure in January 2008, the Office of the 
Chief Human Capital Officer (OCHCO) continues to track and document 
goals outlined in the fiscal year 2007-2008 Human Capital Operational 
Plan. The attached scorecard documents progress toward all goals 
through fiscal year 2008 second quarter.* A web-based scorecard is 
available for all DHS employees to access. The website includes links 
to documentation that supports goal completion.
---------------------------------------------------------------------------
    * The document has been retained in committee files.
---------------------------------------------------------------------------
    The OCHCO is initiating human capital planning activities to 
include development of the fiscal year 2009-2010 human capital 
operations plan (HCOP).
  Questions From Ranking Member Mike Rogers of Alabama for Clark Kent 
    Ervin, Director, Homeland Security Program, The Aspen Institute

        IMMIGRATION & CUSTOMS ENFORCEMENT (ICE) STAFFING LEVELS

    Question 1. Deputy Under Secretary Duke, in your prepared statement 
(pp. 6-7), you wrote about doubling the number of Border Patrol Agents. 
While we see an increase of CBP personnel by over 35% in the last few 
years, Immigrations & Customs Enforcement (ICE), the investigative 
component, has seen a 0% increase over that same time. What plans does 
the Department have to ensure investigations are a priority?
    Mr. Ervin, based on your former role at DHS, what are your views 
regarding the staffing levels at ICE?
    Answer. I did not examine staffing levels at ICE during my time as 
DHS' Inspector General, as best I can recall. I can say that it was my 
sense then, and it remains my sense now, that ICE, like DHS as a whole, 
is under-staffed for the myriad functions it is called upon to perform. 
I regret that I cannot be more helpful. Thank you, again, for your 
query, and I hope to have the pleasure of testifying before you and 
your colleagues in the future.
  Questions From Ranking Member Mike Rogers of Alabama for James Jay 
Carafano, Senior Research Fellow in Defense and Homeland Security, The 
                          Heritage Foundation

                            BORDER SECURITY

    Question 1. One of the most important issues facing the security of 
our Nation is the immediate need to secure our land borders.
    Dr. Carafano, you have studied this problem extensively. Could you 
please give us your analysis of the problem and your recommendations on 
how to secure the border quickly and cost effectively?
    Answer. The biggest problem at the border is the growing crime, 
mainly due to drug smuggling. Cartels are fighting over control of 
smuggling corridors, and the violence spreads to border communities in 
both Mexico and the United States. However, border patrol agents cannot 
focus on combating drug cartels because they easily hide within the 
500,000 people who cross the border illegally each year.
    In order to realistically secure our borders, we must reduce the 
flow of illegal immigrants. This can be done by providing legal avenues 
that meet U.S. labor demands, are streamlined, and easy to use. In 
addition, there must be consistent internal enforcement to deter 
illegal migration.
    Working with Mexico is a crucial aspect of achieving this goal. The 
crime occurring at the border hurts them as much as it does us, and 
collaborating with one another benefits us both.
    Increasing the number of border patrol agents, and continue to 
lengthen the fence to deal with the current problem is not cost 
effective, nor can it be done quickly. The government would take 
several years to properly train the mandated increase of CBP agents, 
and the fence has been an ongoing endeavor for more than a decade. 
Instead, DHS should rely on other outside resources for a quick and 
temporary surge at the border. Contractors, volunteers, and State 
defense forces could all be used in a cost-effective manner at the 
border. However, once the mass majority of migration crossing is done 
legally, such robust security will not be necessary.

                                 
