[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
HOMELAND SECURITY CONTRACTING: DOES THE DEPARTMENT EFFECTIVELY LEVERAGE 
                         EMERGING TECHNOLOGIES?

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


                                HEARING

                               before the

                       SUBCOMMITTEE ON OVERSIGHT,

                     INVESTIGATIONS, AND MANAGEMENT

                                 of the

                     COMMITTEE ON HOMELAND SECURITY

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 15, 2011

                               __________

                           Serial No. 112-39

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

[GRAPHIC] [TIFF OMITTED] 


                                     

      Available via the World Wide Web: http://www.gpo.gov/fdsys/

                               __________



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                     COMMITTEE ON HOMELAND SECURITY

                   Peter T. King, New York, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Daniel E. Lungren, California        Loretta Sanchez, California
Mike Rogers, Alabama                 Sheila Jackson Lee, Texas
Michael T. McCaul, Texas             Henry Cuellar, Texas
Gus M. Bilirakis, Florida            Yvette D. Clarke, New York
Paul C. Broun, Georgia               Laura Richardson, California
Candice S. Miller, Michigan          Danny K. Davis, Illinois
Tim Walberg, Michigan                Brian Higgins, New York
Chip Cravaack, Minnesota             Jackie Speier, California
Joe Walsh, Illinois                  Cedric L. Richmond, Louisiana
Patrick Meehan, Pennsylvania         Hansen Clarke, Michigan
Ben Quayle, Arizona                  William R. Keating, Massachusetts
Scott Rigell, Virginia               Kathleen C. Hochul, New York
Billy Long, Missouri                 Vacancy
Jeff Duncan, South Carolina
Tom Marino, Pennsylvania
Blake Farenthold, Texas
Mo Brooks, Alabama
            Michael J. Russell, Staff Director/Chief Counsel
               Kerry Ann Watkins, Senior Policy Director
                    Michael S. Twinchek, Chief Clerk
                I. Lanier Avant, Minority Staff Director
                                 ------                                

       SUBCOMMITTEE ON OVERSIGHT, INVESTIGATIONS, AND MANAGEMENT

                   Michael T. McCaul, Texas, Chairman
Gus M. Bilirakis, Florida            William R. Keating, Massachusetts
Billy Long, Missouri, Vice Chair     Yvette D. Clarke, New York
Jeff Duncan, South Carolina          Danny K. Davis, Illinois
Tom Marino, Pennsylvania             Bennie G. Thompson, Mississippi 
Peter T. King, New York (Ex              (Ex Officio)
    Officio)
                  Dr. R. Nick Palarino, Staff Director
                   Diana Bergwin, Subcommittee Clerk
              Tamla Scott, Minority Subcommittee Director



                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable Michael T. McCaul, a Representative in Congress 
  From the State of Texas, and Chairman, Subcommittee on 
  Oversight, Investigations, and Management:
  Oral Statement.................................................     1
  Prepared Statement.............................................     3
The Honorable William R. Keating, a Representative in Congress 
  From the State of Massachusetts, and Ranking Member, 
  Subcommittee on Oversight, Investigations, and Management......     5
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security..............................................     6

                               WITNESSES
                                Panel I

Mr. Charles K. Edwards, Acting Inspector General, U.S. Department 
  of Homeland Security:
  Oral Statement.................................................     7
  Prepared Statement.............................................     9
Mr. David C. Maurer, Director, Homeland Security and Justice 
  Team, Government Accountability Office:
  Oral Statement.................................................    16
  Prepared Statement.............................................    17
Mr. Rafael Borras, Under Secretary for Management and Chief 
  Acquisition Officer, U.S. Department of Homeland Security:
  Oral Statement.................................................    22
  Prepared Statement.............................................    23
Dr. Tara O'Toole, Under Secretary, Science and Technology 
  Directorate, U.S. Department of Homeland Security:
  Oral Statement.................................................    29
  Prepared Statement of Henry I. Gonzalez on Behalf of the 
    Science and Technology Directorate...........................    30

                                Panel II

Mr. James A. Williams, Vice Chair, Homeland Security Committee, 
  TechAmerica:
  Oral Statement.................................................    37
  Prepared Statement.............................................    38
Mr. Marc A. Pearl, President and CEO, Homeland Security & Defense 
  Business Council:
  Oral Statement.................................................    43
  Prepared Statement.............................................    45
Mr. Scott Amey, General Counsel, Project on Government Oversight:
  Oral Statement.................................................    49
  Prepared Statement.............................................    51

                             FOR THE RECORD

The Honorable Michael T. McCaul, a Representative in Congress 
  From the State of Texas, and Chairman, Subcommittee on 
  Oversight, Investigations, and Management:
  Report of the Homeland Security & Defense Business Council.....    63

                               APPENDIX I

Mr. Rafael Borras, Under Secretary for Management and Chief 
  Acquisition Officer, U.S. Department of Homeland Security and 
  Dr. Tara O'Toole, Under Secretary, Science and Technology 
  Directorate, U.S. Department of Homeland Security:
  Letter to Chairman Michael T. McCaul and Ranking Member William 
    R. Keating...................................................    67

                              APPENDIX II

Questions From Chairman Michael T. McCaul........................    69


HOMELAND SECURITY CONTRACTING: DOES THE DEPARTMENT EFFECTIVELY LEVERAGE 
                         EMERGING TECHNOLOGIES?

                              ----------                              


                         Friday, July 15, 2011

             U.S. House of Representatives,
    Subcommittee on Oversight, Investigations, and 
                                        Management,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 311, Cannon House Office Building, Hon. Michael T. McCaul 
[Chairman of the subcommittee] presiding.
    Present: Representatives McCaul, Marino, Keating, Clarke of 
New York, and Thompson.
    Also present: Representatives Clarke of Michigan, and 
Meehan.
    Mr. McCaul. The committee will come to order. Good morning. 
I want to thank the witnesses for being here today. We have 
votes, I think at 11:00, so we are going to try to move this 
hearing as quickly as possible. Today's hearing is ``Homeland 
Security Contracting: Does the Department Effectively Leverage 
Emerging Technologies?'' We are going to examine the Department 
of Homeland Security's contract process, and whether or not the 
Department seeks out technologies across its components, the 
Federal Government and the private sector to reduce costs. I 
know Patrick Meehan's going to be here, I understand, in a few 
minutes. I ask unanimous consent that he be allowed to sit at 
this hearing today. Hearing no objection, it will be so 
ordered.
    I now recognize myself for an opening statement. It's the 
job of Oversight to help reduce the cost of Government. With 
our Nation's record debt approaching $15 trillion, we need this 
now more than ever. One area of the Federal Government with 
great potential to reduce this cost to taxpayers is the 
Department of Homeland Security, and specifically, in regard to 
its acquisition of technology. The Government Accountability 
Office, or GAO, has identified technology acquisition at DHS as 
an area of high risk, meaning DHS programs have greater 
vulnerabilities to waste, fraud, abuse, and mismanagement. 
Today our objective is to examine whether DHS leverages 
emerging technologies to accomplish its mission. In other 
words, does it properly evaluate technology that is already 
available? Or does it needlessly spend millions of taxpayer 
dollars reinventing the wheel?
    Unfortunately, we know the Department of Homeland Security 
has already spent an enormous amount of money developing new 
technologies, only to find they don't work, or that there are 
off-the-shelf technologies already available that could 
accomplish the same objectives. Just yesterday, The Washington 
Post reported that DHS plans to spend more than $300 million on 
radiation detection equipment that has not been fully tested 
and may not work. That's according to the GAO. The Post also 
sites a DHS budget request from the General Accounting Office. 
Perhaps the most infamous example of this waste and abuse is 
the Secure Border Initiative, or SBInet, initiated in 2006 
which was, in part, designed to be a surveillance system. After 
expending nearly $1 billion, DHS cancelled the program because 
SBInet has had, and this is a quote, ``has had continued and 
repeated technical problems, cost overruns and schedule delays, 
raising fundamental questions about SBInet's ability to meet 
the needs for technology along the border.'' Compare SBInet to 
the U.S. Army's Rapid Aerostat Initial Deployment, or RAID 
system. RAID was initially deployed in Afghanistan in 2003 to 
protect U.S. forces. It is a combination of towers and 
aerostats, lightweight blimp-like aerial vehicles which provide 
a persistent surveillance system in support of intelligence and 
reconnaissance needs.
    We realize the mission of the Department of Homeland 
Security attempting to secure our borders is different from the 
Department of Defense. However, it seems to me the basic 
mission of SBInet and RAID are the same, and that is to protect 
the borders and to provide surveillance. So my question is: Did 
DHS examine RAID before attempting to develop a brand-new 
surveillance system at the tune of $1 billion? If so, what kept 
them from using this equipment already developed by our 
Government? If not, what kept them from discovering it? I have 
personally been to the border many times to see demonstrations 
of other forms of DOD surveillance technology that are proven 
to have worked in Afghanistan and Pakistan. This equipment 
already exists. The research and development will not be 
duplicated. It is built at a fraction of the cost and it is 
readily available. This could save taxpayers money and secure 
the border much sooner than the SBInet's last predictions.
    The GAO has also criticized development of SBInet, 
concluding DHS did not follow their own acquisition directives 
while developing the program. DHS had not approved key program 
documents until several years after acquisition had begun, and 
most importantly, GAO found that operational requirements for 
SBInet were unclear and unverifiable. These types of mistakes 
cost taxpayers billions of dollars. There are other examples of 
DHS, how we could reduce the cost to the taxpayer. The Customs 
and Border Protection, Transportation Security Administration 
and other agencies have purchased an average of $387 million of 
detection equipment in each of the last 3 years. A March 2011 
Inspector General audit found that DHS could save taxpayer 
dollars and reduce duplication by coordinating and 
consolidating purchases of metal detectors, explosive detection 
systems, and radiation detectors for screening people, baggage, 
and cargo. DHS components are only encouraged but not required 
to leverage contracts Department-wide to increase efficiencies. 
Additionally, in April 2011, a DHS Inspector General audit 
found that 10 of the 17, or 59 percent of DHS programs reviewed 
were acquisitions in which commercially off-the-shelf equipment 
or existing contracts could have fulfilled the mission 
requirements.
    As a result, the administration costs were increased 
without adding value to the program. One of Secretary 
Napolitano's top priorities is unifying the Department of 
Homeland Security, and supporting a One DHS policy. But 
unfortunately, the Secretary and this administration have 
failed to coordinate and integrate acquisition functions 
Department-wide. This has led to the failure of multiple 
acquisition programs and the waste of millions in taxpayer 
dollars. This administration needs to stop investing in high-
risk acquisition programs until they can effectively manage and 
oversee them. We have a recommended solution for DHS to save 
taxpayer dollars, and that is to follow the guidance provided 
by the Office of Management and Budget. On February 11, 2011, 
the Office of Management and Budget sent out a memorandum to 
chief acquisition officers, senior procurement executives, and 
chief information officers stating, ``with expenditures of over 
$500 billion annually on contracts, and orders for goods and 
services, the Federal Government has an obligation to conduct 
our procurements in the most effective, responsible, and 
efficient manner possible.'' Access to current market 
information is critical for agency program managers as they 
define requirements and for contracting officers as they 
develop acquisition strategies, seek opportunities for small 
businesses, and negotiate contract terms. Our industry partners 
are often the best source of this information. So productive 
interactions between Federal agencies and our industry partners 
should be encouraged to ensure that the Government clearly 
understands the marketplace and can award a contract or order 
for an effective solution at a reasonable price. We must 
streamline the DHS contracting process, find technologies that 
work, and reduce the burden on the taxpayer.
    [The statement of Mr. McCaul follows:]
            Prepared Statement of Chairman Michael T. McCaul
    As an oversight committee our job is to help reduce the cost of 
Government. With our Nation's record debt approaching $15 trillion, we 
need this now more than ever before.
    One area of the Federal Government with great potential to reduce 
this cost to taxpayers is the Department of Homeland Security (DHS)--
specifically in regard to its acquisitions of technology.
    The Government Accountability Office (GAO) has identified 
technology acquisition at DHS as an area of high risk, meaning DHS 
programs have greater vulnerabilities to waste, fraud, abuse, and 
mismanagement.
    Today our objective is to examine whether DHS leverages emerging 
technologies to accomplish its mission.
    In other words, does it properly evaluate technology that is 
already available? Or does it needlessly spend millions of taxpayer 
dollars reinventing the wheel?
    Unfortunately, we know the Department of Homeland Security has 
already spent an enormous amount of money developing new technologies 
only to find they don't work or there are off-the-shelf technologies 
that could accomplish the same objectives.
    Just yesterday, the Washington Post reported that DHS plans to 
spend more than $300 million ``on radiation detection equipment that 
has not been fully tested and may not work.'' The Post cites a DHS 
budget request from the General Accounting Office.
    Perhaps the most infamous example of this is the Secure Border 
Initiative net (SBInet), initiated in 2006, which was in part designed 
to be a surveillance system.
    After expending nearly $1 billion DHS cancelled the program because 
``SBInet has had continued and repeated technical problems, cost 
overruns, and schedule delays, raising fundamental questions about 
SBInet's ability to meet the needs for technology along the border.'' 
Compare the SBInet system to the U.S. Army's Rapid Aerostat Initial 
Deployment (RAID) system.
    RAID was initially deployed in Afghanistan in 2003 to protect U.S. 
Forces. It is a combination of towers and aerostats--light-weight, 
blimp-like aerial vehicles--which provide a persistent surveillance 
system in support of intelligence and reconnaissance needs.
    We realize the mission of the Department of Homeland Security 
attempting to secure our borders is different from the Department of 
Defense, however it seems to me the basic mission of the SBInet and 
RAID are the same--to provide surveillance.
    My question is: Did DHS examine RAID before attempting to develop a 
brand-new surveillance system?
    If so, what kept them from using the equipment? If not, what kept 
them from discovering it?
    I have personally been to the Texas-Mexico border to see 
demonstrations of other forms of DOD surveillance technology that are 
proven to have worked on the Afghanistan-Pakistan border.
    This equipment already exists, the research and development would 
not be duplicated, it is built at a fraction of the cost, and is 
readily available. This could save taxpayers money and secure the 
border much sooner than SBI's last predictions of 10-15 years from now.
    The GAO has also criticized the development of SBInet concluding 
DHS did not follow their own acquisition directives while developing 
the program.
    DHS had not approved key program documents until several years 
after acquisition had begun and most importantly GAO found that 
operational requirements for SBInet were unclear and unverifiable.
    These types of mistakes cost taxpayers billions of dollars. But 
there are other examples of how DHS could reduce costs to the taxpayer.
    The Customs and Border Protection, Transportation Security 
Administration and other agencies have purchased an average of $387 
million of detection equipment in each of the last 3 years.
    A March 2011 Inspector General audit found that DHS could save 
taxpayer dollars and reduce duplication by coordinating and 
consolidating purchases of metal detectors, explosive detection 
systems, and radiation detectors for screening people, baggage, and 
cargo.
    At DHS, components are only encouraged but not required to leverage 
contracts Department-wide to increase efficiencies.
    Additionally, an April 2011 DHS Inspector General audit found that 
10 of the 17 (59%) DHS programs reviewed were acquisitions in which 
commercial-off-the-shelf equipment or existing contracts could have 
fulfilled mission requirements.
    As a result, administrative costs were increased without adding 
value to the program. One of Secretary Napolitano's top priorities is 
unifying the Department of Homeland Security and supporting a ``One 
DHS'' policy.
    Unfortunately the Secretary and this administration have failed to 
coordinate and integrate acquisition functions Department-wide.
    This has led to the failure of multiple acquisition programs and 
the waste of millions of taxpayer dollars.
    This administration needs to stop investing in high-risk 
acquisition programs until they can effectively manage and oversee 
them.
    We have a recommended solution for DHS to save taxpayer dollars. 
Follow the guidance provided by the Office of Management and Budget.
    On February 11, 2011, the Office of Management and Budget sent out 
a memorandum to Chief Acquisition Officers, Senior Procurement 
Executives and Chief Information Officers stating:

``With expenditures of over $500 billion annually on contracts and 
orders for goods and services, the Federal Government has an obligation 
to conduct our procurements in the most effective, responsible, and 
efficient manner possible. Access to current market information is 
critical for agency program managers as they define requirements and 
for contracting officers as they develop acquisition strategies, seek 
opportunities for small businesses, and negotiate contract terms. Our 
industry partners are often the best source of this information, so 
productive interactions between Federal agencies and our industry 
partners should be encouraged to ensure that the Government clearly 
understands the marketplace and can award a contract or order for an 
effective solution at a reasonable price.''

    We must streamline the DHS contracting process, find technologies 
that work, and reduce burdens on the taxpayer.
    With that I recognize the Ranking Member of the subcommittee, the 
gentleman from Massachusetts, Mr. Keating, for 5 minutes for the 
purpose of making an opening statement.

    Mr. McCaul. I also ask for unanimous consent that Mr. 
Clarke from Michigan be able to sit here at the dais. Without 
objection, so ordered. With that, now, I recognize the Ranking 
Member of this subcommittee, the gentleman from Massachusetts, 
Mr. Keating.
    Mr. Keating. Thank you, Mr. Chairman. Thank you for having 
this hearing on such an important issue. I also want to thank 
Ranking Member of the Homeland Security Committee, Mr. 
Thompson, for being here, and personally want to thank him for 
our last hearing for assisting me at a time when I was engaged 
in going to funeral services for a soldier in my district who 
was killed in Iraq. Thank you.
    I also want to welcome all our witnesses. I am particularly 
pleased to have the Under Secretary of Management testifying 
today. This is his first appearance before the subcommittee 
this Congress. Welcome, and congratulations on your 
confirmation.
    As the chief architect of the Department's acquisition 
strategy, I look forward to receiving his input on ways to 
improve DHS contracting. Each year the Department spends 
approximately one quarter of its annual budget on procurement, 
making it one of the largest procurement agents in the entire 
Federal Government. The Department's mission, to secure the 
Nation from the many threats we face, spans an enormous amount 
of room and sectors, including aviation, border security, 
emergency response and importantly, cybersecurity. At the heart 
of this mission is the need to develop and acquire leading and 
innovative technologies that will keep our country ahead of our 
enemies on every front. To make the system work, DHS 
headquarters, DHS components, and the private sector must 
coordinate and collaborate sharing of ideas and costs.
    The Science and Technology Directorate, S&T, is responsible 
for managing science and technology research, from development 
through transition, for Department components and first 
responders. Unfortunately, however, the Department components 
have oftentimes looked beyond S&T to outside sources to fulfill 
their needs, resulting in higher administrative costs. Since 
the Department's inception, it has been included on the 
Government Accountability Office's high-risk list, in part, 
according to GAO, because of its acquisition process.
    The Department is now in the process of implementing a new 
method for managing its Department-wide acquisition strategy 
and hopefully this will result in better decisions and greater 
end-user involvement so that fiascoes like SBInet become a way 
of the past.
    I am, therefore, pleased to hear about this development. 
However, I am concerned about S&T's use of other transaction 
authority which is wide open for waste and abuse. The lack of 
oversight that has plagued the Department's acquisition process 
at S&T and other components and the difficulty the private 
sector has when attempting to bring new technology and new 
ideas to the Department. So I look forward to hearing from both 
panels on this issue. I yield back the rest of my time.
    Mr. McCaul. The Chair now recognizes the Ranking Member of 
the full committee, the gentleman from Mississippi, Mr. 
Thompson.
    Mr. Thompson. Thank you very much, Mr. Chairman, for 
convening this hearing. We are here to discuss contracting at 
the Department of Homeland Security and the manner in which it 
leverages emerging technology. In fiscal year 2010, the 
Department spent more than $13 billion on more than 88,000 
procurement actions. While the vast majority of these were 
subject to traditional rules and regulations governing Federal 
contracts, some were not. The Homeland Security Act of 2002 
granted the Department's Science and Technology Directorate, or 
S&T, with the ability to use other transaction authority, or 
OTA. In 2012, S&T spent over $11 million on just 10 
transactions using this special authority. What troubles me 
about OTA is that Federal rules and laws that were created to 
protect businesses, taxpayers, and the Federal Government from 
waste, fraud, and abuse do not apply.
    Most notably, the Federal Acquisition Regulation, or FAR, 
which serves as the benchmark for how the Federal Government 
does business and ensures integrity, fairness, and openness is 
nonexistent. The same is true for the Anti-Kickback Act, the 
Small Business Act, the Procurement Integrity Act, and Buy 
America, to just name a few. While the freedoms associated with 
OTA may attract more businesses to S&T, it also carries 
significant risk for the Federal Government that may outweigh 
its benefits.
    In September 2011, the expiration date for the Department's 
ability to use OTA is just 2 months away. I will therefore use 
this hearing, along with additional oversight by the committee, 
to determine where I will stand on the sunset. I am also 
concerned about both the management and S&T budgets that the 
Republican Majority recently passed in the House in the form of 
H.R. 1. H.R. 1 will slash S&T's budget by 61 percent below the 
President's fiscal year 2012 request, and 42 percent below the 
fiscal year 2011 levels. The damage done by these cuts will set 
a significant impact on S&T and perpetuate the Majority's 
insistence that the Department adequately fulfill its mission 
with inadequate funding.
    I look forward to hearing from the witnesses on the impact 
of these cuts. Lastly, Mr. Chairman, in the 111th Congress, the 
House passed an S&T authorization bill introduced by my 
colleague, Congresswoman Clarke from New York. This bill 
strengthened S&T's policies, especially its acquisition 
framework. I look forward to receiving bipartisan support in 
this Congress in making that bill law. With that, I yield back 
the balance of my time.
    Mr. McCaul. I thank the gentleman. Other Members of the 
subcommittee may submit opening statements for the record. We 
have a distinguished panel of witnesses here today, and I would 
like to make my introductions and then hear the testimony. 
First, Mr. Charles Edwards assumed the position of Acting 
Inspector General of the Department of Homeland Security in 
February of this year, adding to over 20 years of experience in 
the Federal Government. Prior to this position, Mr. Edwards 
served as Deputy Inspector General of the Department of 
Homeland Security. Thank you so much for being here today.
    Next, Mr. David Maurer is the Director in the U.S. 
Government Accountability Office's Homeland Security and 
Justice Team, where he leads reviews of DHS and DOJ management 
issues. Previously, Mr. Maurer served as acting director in the 
GAO's Natural Resource and Environmental team, managed and led 
work in GAO's International Affairs and Trade Team, and was 
also detailed on the House Committee on Appropriations.
    Next, Mr. Rafael Borras currently serves as the Under 
Secretary for Management at the Department of Homeland 
Security, where he oversees management of the Department's 
budget appropriations, expenditure of funds, accounting, and 
finance. Prior to his appointment with the Department, Mr. 
Borras served as vice president with the URS Corporation, a 
global engineering and services firm. He also served as deputy 
assistant secretary for administration in the U.S. Department 
of Commerce. He has great experience. Welcome here today, Mr. 
Borras.
    Finally, Dr. Tara O'Toole was sworn as Under Secretary of 
Science and Technology, or S&T, Directorate at the Department 
of Homeland Security in November 2009. Prior to serving at S&T, 
Dr. O'Toole was the CEO and director of the Center For 
Biosecurity at the University of Pittsburgh Medical Center, and 
professor of medicine and of public health at the University of 
Pittsburgh from 2003 to 2009. Dr. O'Toole was also one of the 
original members of the Johns Hopkins Center For Civilian 
Biodefense Strategies, serving as its director from 2001 to 
2003.
    Welcome, and thank you so much for being here, Dr. O'Toole. 
So with that, the Chair now recognizes Mr. Edwards for his 
statement.

STATEMENT OF CHARLES K. EDWARDS, ACTING INSPECTOR GENERAL, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Mr. Edwards. Good morning, Chairman McCaul, Ranking Members 
Thompson and Keating, and distinguished Members of the 
subcommittee. I am Charles K. Edwards, acting inspector general 
for the Department of Homeland Security, DHS. Thank you for 
inviting me today to testify about DHS contracting and 
acquisition policies. Acquisitions consume a significant part 
of DHS annual budget and are fundamental to the Department's 
ability to accomplish its mission. Acquisition management is a 
complex process that goes beyond simply awarding a contract. It 
begins with the identification of the mission need and 
continues with the strategy to fulfill that need while 
balancing cost, schedule, and performance.
    My testimony today will focus on the findings in two 
recently completed audit reports, the Department-wide 
management of the detection equipment and DHS oversight of 
component acquisition programs. Our audit regarding the 
Department-wide management of the detection equipment revealed 
that DHS has eight different procurement officers that purchase 
detection equipment, including metal detectors, explosive 
detection systems, and radiation detectors.
    While DHS has applied strategic sourcing strategies for 
many common-use items such as firearms, ammunition, and office 
supplies, the Department is not using strategic sourcing to 
manage its purchase of detection equipment. Components are 
encouraged but not required to use the strategic sourcing 
program, and they generally do not coordinate and communicate 
with each other when acquiring detection equipment. In addition 
to the lack of communication among components, some components 
did not standardize their own equipment purchases for similar 
missions.
    For example, USCIS has 24 and CBP has 21 different models 
of small X-ray equipment. CBP and USCIS each have 14 different 
models of walk-through metal detectors to meet similar 
screening missions. As a result of these findings, we 
recommended that the Department put a mechanism in place for 
components to standardize purchases of similar detection 
equipment and identify common mission requirements. Increased 
coordination would offer DHS opportunities to streamline the 
acquisition process and improve efficiencies. Our report on DHS 
oversight of component acquisition programs identified other 
improvements that can be made to the acquisition process. After 
reviewing the Department's oversight of programs at or about 
300 million, we concluded that while DHS generally had 
management oversight and controls in place, it needs to further 
refine policies and strengthen oversight. We identified two 
general areas for improvement, clearer guidance and mandated 
use of available tools.
    We found that components needed clear guidance for 
determining when an acquisition was costly and complicated 
enough to be managed as an acquisition program or when the 
acquisition could be handled as a simple procurement. We 
recommended that the Department create a decision matrix that 
the components can apply in pre-planning phases of the 
purchasing process in order to reduce this confusion. Regarding 
the components' use of available tools our recommendation 
focused on two areas, the Next Generation Periodic Reporting 
System, or nPRS, and the Strategic Sourcing Program Office, or 
SSPO.
    nPRS is an integrated system that allows the Department to 
track component acquisition investments. For the 17 acquisition 
programs we reviewed, we found the components were not 
completing and reporting all key information in nPRS. Moreover, 
some components have their own data tracking systems in place 
of nPRS. We recommended that the Department mandate the use of 
nPRS for all acquisition programs and issue improved guidance 
regarding nPRS reporting. We also recommended that the 
Department offer clearer guidance regarding the use of SSPO.
    We concluded that the Department may be incurring increased 
costs for component procurement, or components may be 
conducting the same market research for procurement. We 
recommended that the Department make sure component personnel 
are at least considering the use of SSBO, the general services 
administration schedule and the Department-wide contracts 
during the planning stages of these acquisitions.
    In conclusion, the Department has made considerable 
progress in establishing its acquisition management practices 
and procedures. Through improved guidance to the components and 
increased use of tools like strategic sourcing, the Department 
will continue to improve its acquisition processes. Chairman 
McCaul, this concludes my prepared remarks and I will be happy 
to answer any questions that you or other Members may have. 
Thank you.
    [The statement of Mr. Edwards follows:]
                Prepared Statement of Charles K. Edwards
                             July 15, 2011
    Good morning Chairman McCaul, Ranking Member Keating, and 
distinguished Members of the subcommittee: I am Charles K. Edwards, 
Acting Inspector General of the Department of Homeland Security (DHS). 
Thank you for inviting me to testify today about the Department's 
contracting and acquisition policies.
    As you know, the DHS Office of Inspector General (OIG) was 
established in January 2003 by the Homeland Security Act of 2002 by 
amendment to the Inspector General Act of 1978. The DHS OIG seeks to 
promote economy, efficiency, and effectiveness in DHS programs and 
operations and reports directly to both the DHS Secretary and the 
Congress. We fulfill our mission primarily by issuing audit, 
inspection, and investigative reports that include recommendations for 
corrective action, and by referring cases to the United States Attorney 
General for prosecution.
    I am pleased to have the opportunity to testify about two of our 
audit reports today. I will describe some of the serious challenges 
facing DHS in acquisition management, the steps DHS has taken, and its 
progress, in addressing those challenges, as well as provide details 
regarding further improvements the Department can make, specifically in 
its oversight of components' acquisition programs and acquisition of 
detection equipment.
                               background
    Acquisitions consume a significant part of the Department of 
Homeland Security's annual budget and are fundamental to the 
Department's ability to accomplish its mission. In fiscal year 2010, 
DHS awarded over $13 billion for more than 88,000 procurement actions.
    The Under Secretary for Management (USM) is responsible for the 
overall DHS acquisition process. As the Department's Chief Acquisition 
Officer, the USM is responsible for managing, administering, and 
overseeing the Department's acquisition policies and procedures. The 
USM delegates the responsibility for effective Department-wide 
procurement policies and procedures, including procurement integrity, 
to the Chief Procurement Officer (CPO). The Office of the CPO (OCPO) is 
responsible for oversight of most DHS acquisition activities and 
services, including management, administration, and strategic sourcing, 
and excluding financial assistance activities. OCPO responsibilities 
also include developing and publishing Department-wide acquisition 
regulations, directives, policies, and procedures.
    The USM also delegates the responsibility for developing and 
implementing the governance processes and procedures for program 
management over DHS' various acquisition programs to the Acquisition 
Program Management Division (APMD). Separation of the OCPO procurement 
management responsibilities for acquiring goods and services and APMD's 
program management of the acquisition process provides a layered 
approach to DHS' acquisition oversight.
       steps taken by dhs to improve its acquisitions management
    In 2003, the Government Accountability Office (GAO) listed 
implementing and transforming the Department of Homeland Security on 
its high-risk list.\1\ GAO stated that the Department's efforts to 
integrate 22 independent agencies into a single department was an 
``enormous undertaking,'' partly because many of the major components 
faced at least one management problem, including financial management 
vulnerabilities. In a 2011 update, GAO noted that acquisition 
management weaknesses have prevented major programs from meeting 
capability, benefit, cost, and schedule expectations.\2\ To address 
management challenges, GAO recommended ``validating key acquisition 
documents during the acquisition review process.''\3\
---------------------------------------------------------------------------
    \1\ GAO-03-119, High Risk Series: An Update (Jan. 2003). GAO 
maintains a program to identify Government operations that are high 
risk due to greater vulnerabilities to fraud, waste, abuse, and 
mismanagement or the need for transformation to address economy, 
efficiency, or effectiveness. Since 1990, GAO has designated over 50 
areas as high risk and subsequently removed over one-third of the areas 
due to progress made.
    \2\ GAO-11-278, High-Risk Series: An Update (Feb. 2011), p. 93.
    \3\ Id., 33-34.
---------------------------------------------------------------------------
    In September 2005, we published a report identifying significant 
weaknesses that threatened the integrity of the Department's 
procurement and program management operations.\4\ We made five 
recommendations to address the vulnerabilities in the Department's 
acquisition operations. DHS concurred with all five recommendations and 
agreed to move ahead with expanded procurement ethics training, 
enhancement of oversight, and establishment of a Departmental program 
management office to address procurement staff shortages and staff 
authority. Since our 2005 report, DHS has implemented management 
directives and organizational changes, and developed acquisition 
training programs intended to identify inefficiencies in the 
acquisition process and prevent procurement ethics violations.
---------------------------------------------------------------------------
    \4\ OIG-05-53, Department of Homeland Security's Procurement and 
Program Management Operations (Sept. 2005).
---------------------------------------------------------------------------
    In November 2008--recognizing the continued increase in the 
quantity and complexity of DHS acquisitions--the Chief Acquisition 
Officer classified acquisitions into three levels to define the extent 
and scope of required project and program management and the specific 
official who serves as the Acquisition Decision Authority. For level 1 
acquisitions (greater than or equal to $1 billion), the Acquisition 
Decision Authority is at the Deputy Secretary level. For level 2 
acquisitions, ($300 million to $1 billion), it is the Chief Acquisition 
Officer. For level 3 acquisitions (less than $300 million), the 
Acquisition Decision Authority is at the Component Head level. 
Acquisition Management Directive 102-01, Revision No. 1 (Directive 102-
01), also identifies specific alternate Acquisition Decision 
Authorities for each level.
    Figure 1 is an overview of the actions DHS has taken since 2005 to 
improve its acquisition program. 


    While the Department has taken these and other significant steps to 
improve its acquisition oversight processes and controls, our report 
OIG-11-71, DHS Oversight of Component Acquisition Programs (April 2011) 
identified additional areas for improvement, including improved 
guidance to components regarding their use of the next Generation 
Periodic Reporting System (nPRS), an integrated system that provides 
visibility to the Department to track components' level 1, 2, and 3 
acquisition investments.
       additional dhs oversight needed for component acquisition
    In DHS Oversight of Component Acquisition Programs, we recognized 
that the Department has made improvements to its acquisition oversight 
processes and controls through implementation of a revised acquisition 
management directive. However, the Department needs to provide 
additional detailed guidance and improve controls in some areas. The 
Department has not fully defined an acquisition program for its 
components, or developed consistent guidance for reporting acquisitions 
in its standard system. In addition, the Department did not ensure that 
components were using all acquisition tools available and that all 
components had adequate policies and procedures in place to manage 
acquisition programs.
    As a result, components created program management offices to 
manage simple procurements, incurring unnecessary administrative 
program costs without adding value to the programs. Additionally, 
without adequate controls in place, the Department did not have 
complete visibility of all programs within its acquisition portfolio.
Unclear Guidance
    The Department has not fully defined when a component should manage 
an acquisition under the requirements of the Acquisition Lifecycle 
Framework or manage it as a simple procurement. We found that many 
components were committed to following the Department's guidance but 
needed more structure for determining when to establish a program to 
acquire a product or service. We requested a list of all programs from 
each component and received numerous questions and conflicting 
responses.
    Directive 102-01, which prescribes guidance over the Acquisition 
Review Process, Acquisition Lifecycle Framework, and Acquisition Review 
Board, establishes the overall policy and structure for acquisition 
management within the Department. But the directive does not provide a 
decision-making tool to determine if an acquisition warrants the higher 
level of internal controls required by the Acquisition Lifecycle 
Framework. The supplemental Acquisition Instruction/Guidebook 102-01-
001 (Guidebook) provides detailed instructions on implementing and 
managing acquisitions, but also does not provide clear instruction for 
determining if an acquisition should become an acquisition program, and 
in attempts to comply with the directive, components over classified 
programs.
    For example, the Federal Law Enforcement Training Center (FLETC) is 
automating many of its manual processes, such as student registration, 
class scheduling, planning and forecasting, and student records. The 
estimated total life cycle cost of this automation is approximately $30 
million. FLETC personnel contracted out all of the requirements for the 
program, including requirements analysis, development, and maintenance 
of an automated system that used commercial off-the-shelf (COTS) 
equipment and custom software applications. Because of the unclear 
instructions, instead of creating a simple procurement, FLETC created 
an acquisition program that may have unnecessarily increased program 
management administrative cost.
    We reviewed several acquisition programs that do not clearly fit 
into the Acquisition Lifecycle Framework process. Ten of the 17 (59%) 
programs we reviewed, with an estimated life cycle cost of about $5.3 
billion, were acquisitions that identified COTS equipment or existing 
contracts to fulfill the needs identified by the program office. 
Component personnel likely could have managed these as simple 
procurements rather than acquisition programs.
    For example, the Transportation Security Administration (TSA) 
classified renovation of an existing warehouse building as an 
acquisition program. It leased the 104,000-square-foot building in 2003 
and renovated approximately 89,000 square feet for about $42 million 
over the initial 10-year leasing period. In 2008, TSA primarily relied 
on existing contracts to complete 12,500 of the remaining 15,000 square 
feet of the warehouse building. According to TSA personnel, the 
renovation for the additional 12,500 square feet cost about $2.5 
million, with construction completed in January 2010. For this small 
renovation project, TSA personnel could have used simple procurement 
rules but instead increased administrative costs by implementing the 
more complicated internal control structure prescribed in Directive 
102-01.
    Based on the definition of an acquisition program in the Guidebook, 
this renovation could possibly be an acquisition program. However, 
based on the processes and procedures laid out in Directive 102-01's 
Acquisition Life Cycle Framework and Acquisition Review Process, this 
renovation does not meet the intentions of the existing guidance or 
present a high enough level of risk to warrant the increased costs of 
being managed as a program.
    Components should not create acquisition programs for acquiring 
products and services that are outside the intent and spirit of 
Directive 102-01. The Department can reduce some of the conflicts at 
the component level by developing a decision matrix that the components 
can apply in the pre-planning phases of the purchasing process.
Use of Available Tools
    The APMD and the Office of the Chief Information Officer developed 
and currently maintain nPRS. nPRS is an integrated system that provides 
DHS headquarters visibility of components' level 1, 2, and 3 
acquisition investments. It can also store working and approved key 
acquisition documents, earned value management information, and risk 
identification. Component personnel are responsible for entering and 
updating information regarding their acquisition programs in nPRS. This 
information includes, but is not limited to, cost, budget, performance, 
and schedule data. Tools available within nPRS include the following:
   Current and previous contract award data with earned value 
        management;
   Previous, current, and future budget and funding;
   Cost, schedule, and performance status based on Acquisition 
        Program Baseline parameters;
   Information technology program milestone schedule and cost 
        variances;
   Acquisition Decision Memorandum forms that track action 
        items issued by the Acquisition Review Board;
   Key documents approved by DHS headquarters or components, 
        such as the Mission Needs Statement, Acquisition Plan, and 
        Acquisition Program Baseline.
    The Department has not ensured or mandated that components use all 
available tools and supporting programs, including nPRS, to provide 
transparency and efficiency of component acquisition programs. As a 
result, some components have developed systems comparable to nPRS.
    According to APMD personnel, nPRS allows components to create a 
copy of nPRS software and integrate it to meet their needs. The copy, 
which is called the nPRS Sandbox, allows the components to duplicate 
the nPRS software and to use the already developed nPRS as their 
oversight tool for draft documents and approval of documentation and 
earned value management, as well as cost and schedule status. The 
component's Sandbox copy of nPRS is not visible by DHS headquarters or 
other components because nPRS restricts access to authorized users. As 
of July 2010, TSA, the Federal Emergency Management Agency (FEMA), and 
the DHS Chief Financial Office had requested use of the nPRS Sandbox 
feature.
    Component personnel have developed, or are in the process of 
developing, their own data-tracking systems because the Department has 
not consistently mandated use of nPRS or its tools. For example:
   TSA hired and spent approximately $100,000 for a contractor 
        in 2005 to develop the TSA Acquisition Program Status Report, 
        which served as its data-tracking system. As of June 2010, TSA 
        had merged its acquisition program portfolio, levels 1, 2, and 
        3, into nPRS and will no longer use the TSA Acquisition Program 
        Status Report. As of August 2010, nPRS is TSA's official 
        tracking system for acquisition programs.
   FEMA, Customs and Border Protection (CBP), Immigration and 
        Customs Enforcement (ICE), and U.S. Secret Service (USSS) use 
        internally developed systems based on software programs such as 
        Microsoft SharePoint.
   CBP personnel were in the process of developing an 
        additional database to track acquisitions throughout the 
        Acquisition Life Cycle Framework. We were not able to determine 
        the cost of this tracking database. According to CBP personnel, 
        the database development was a verbal agreement between CBP 
        personnel and the contractor. The statement of work under which 
        the contractor was performing other work for CBP did not 
        contain any mention of the verbal agreement.
    The USM has not consistently mandated and ensured that components 
use nPRS for all level 1, 2, and 3 acquisition programs.
Inconsistent Reporting
    In addition to the fact that not all components use nPRS for all 
level 1, 2, and 3 acquisition programs, the information entered into 
nPRS was not reported consistently. For the 17 acquisition programs we 
reviewed, with an estimated life cycle cost of about $9.6 billion, we 
found that components were not completing and reporting all key 
information in nPRS. Component personnel reported 16 of the 17 programs 
reviewed (94%) into nPRS; however, despite detailed nPRS guidance, not 
all reports contained the required information. For example, only 7 of 
17 programs (41%) reported Acquisition Program Baseline required 
milestones, which establish the overall acquisition cost, schedule, and 
performance values. Only 13 (76%) programs reviewed contained required 
key documentation. Key documents include the mission needs statement, 
acquisition plan, operational requirements document, integrated 
logistics support plan, and the acquisition program baseline.
    Since nPRS became operational in 2008, the Department has issued 
conflicting guidance and enforcement for reporting level 1, 2, and 3 
acquisition programs. The conflicting verbal and written guidance 
confused component personnel, who were not sure whether to report all 
acquisition programs or only level 1 and 2 programs.
    In May 2010, the USM issued a list of major acquisition programs 
that identified 86 level 1 and 2 acquisition programs and elevated some 
level 3 acquisition programs for Departmental oversight. According to 
APMD personnel, the USM and components jointly create the major 
acquisition program and project list. The APMD obtains information from 
nPRS and requests updated information from the components regarding 
their current number of acquisition programs. Once APMD personnel 
receive the information, they create the final list and the USM signs 
and issues the new list.
    As of July 2010, we identified six acquisition programs listed by 
the USM not reported in nPRS. We also identified five level 1 and 2 
acquisition programs reported in nPRS but not by the USM. When we asked 
USM personnel about the differences, they said that the differences 
were due to timing issues. However, we were not able to verify this. 
Table 1 compares the list of acquisition programs in the May 2010 USM 
memo with the nPRS database as of July 2010.

     TABLE 1.--ACQUISITION PROGRAM REPORTING SYSTEM INCONSISTENCIES
------------------------------------------------------------------------
            USM Memo--May 2010                nPRS Database--July 2010
------------------------------------------------------------------------
Consolidated Mail System Program..........  No Entry.
Electronic Records Management System......  No Entry.
St. Elizabeth's...........................  No Entry.
National Security System Program..........  No Entry.
Online Tracking Information System........  No Entry.
Federal Protective Services...............  No Entry.
No Entry..................................  Critical Infrastructure
                                             Technology and Analysis.
No Entry..................................  CBP--Infrastructure.
No Entry..................................  FEMA--Infrastructure.
No Entry..................................  ICE--Infrastructure.
No Entry..................................  USSS--Infrastructure.
------------------------------------------------------------------------

    To identify the number of acquisition programs in the Department, 
we requested a list of all programs from nPRS, but the USM could 
provide only level 1 and 2 acquisition programs. In March 2010, we 
asked the components to provide us with a list of all level 1, 2, and 3 
acquisition programs so we could gain a complete inventory of 
acquisition programs throughout the Department. Though we understand 
that there may be differences due to timing of our data reviews, the 
USM needs to make sure that components are consistently reporting all 
acquisition programs into the standard system. In July 2010, we 
obtained our last data from nPRS that showed progress regarding the 
number of level 3 acquisition programs components entered in the 
system. However, nPRS still does not reflect half of the total number 
of level 3 programs components reported outside nPRS.
    In sum, the Department does not always know what is in its 
acquisition portfolio because of the conflicting written and verbal 
guidance provided to the components. The USM has not ensured that 
components report all level 1, 2, and 3 acquisition programs in nPRS, 
which hinders its ability to have complete visibility into component 
acquisition programs. By mandating use of nPRS for all acquisition 
programs, the USM would have visibility into components' acquisition 
programs and could provide better oversight for its acquisition 
portfolio.
    We made four recommendations to the Chief Procurement Officer to 
strengthen management oversight and controls of component acquisition 
programs. The Chief Procurement Officer agreed with our recommendations 
and initiated corrective actions.
           department-wide management of detection equipment
    Our recent audit report, OIG-11-47, DHS Department-wide Management 
of Detection Equipment (March 2011), highlighted some of the 
acquisition challenges facing the Department when multiple components 
have similar requirements or are buying the same type of equipment. We 
identified steps the Department can take to improve its acquisition 
processes. With improved management, DHS can streamline the acquisition 
process, improve efficiencies, and provide uniform equipment inventory 
information.
    DHS has eight different procurement offices that purchase detection 
equipment. Seven of these offices are at the component level, and each 
has its own head of contracting. These components are as follows:
   CBP
   FEMA
   FLETC
   ICE
   Office of Procurement Operations \5\
---------------------------------------------------------------------------
    \5\ In 2004, the Department created the Office of Procurement 
Operations to provide acquisition services to components that did not 
have a procurement office.
---------------------------------------------------------------------------
   TSA
   United States Coast Guard (USCG)
   USSS.
    Components maintain separate inventories for their detection 
equipment. For fiscal year 2010, the components had a combined 
inventory of more than $3.2 billion worth of detection equipment, most 
of which is deployed. The components purchased an average of about $387 
million worth of detection equipment in each of the last 3 years, 
ranging from about $280 million to $511 million. This equipment 
includes metal detectors, explosive detection systems, and radiation 
detectors (including some personal protective safety equipment) for 
screening people, baggage, and cargo at airports, seaports, and land 
ports of entry, as well as Federal buildings.
    Our audit work showed that DHS can better manage the acquisition of 
detection equipment by developing processes based on best practices 
such as strategic sourcing and developing standard data requirements 
and nomenclature for inventory management.
Strategic Sourcing
    According to a 2005 memorandum from the Office of Management and 
Budget:

``Strategic sourcing is the collaborative and structured process of 
critically analyzing an organization's spending and then using this 
information to make a business decision about acquiring commodities and 
services more effectively and efficiently. This process helps agencies 
optimize performance, minimize price, increase achievement of socio-
economic acquisition goals, evaluate total life cycle management costs, 
improve vendor access to business opportunities, and otherwise increase 
the value of each dollar spent.''\6\
---------------------------------------------------------------------------
    \6\ Office of Management and Budget memorandum to Chief Acquisition 
Officers, Implementing Strategic Sourcing (May 20, 2005).

    DHS has established a Strategic Sourcing Program and has applied 
strategic sourcing strategies for many common use items, such as 
firearms, ammunition, and office supplies; however, the Department is 
not managing its detection equipment through this program. According to 
DHS officials, components are encouraged but not required to use the 
Strategic Sourcing Program and generally do not coordinate and 
communicate when acquiring detection equipment. There is no mechanism 
in place for components to standardize equipment purchases or identify 
common mission requirements among components. For example, the 
Department's Joint Requirements Council is inactive, and components do 
not have the expertise of commodity councils or single-item managers to 
rely on when acquiring detection equipment. Further, components view 
detection equipment as unique to their missions and do not attempt to 
identify common mission requirements among other components. This 
results in numerous inefficient purchases by individual components 
instead of consolidated purchases.
Standardizing Equipment Purchases
    Some components did not standardize equipment purchases and 
purchased a variety of different detection equipment models. For 
example, United States Citizenship and Immigration Services (USCIS) has 
24 and CBP has 21 different models of small X-ray equipment, and CBP 
and USCIS each have 14 different models of walk-through metal 
detectors. When components have multiple models of equipment to meet 
similar missions, DHS incurs higher procurement administrative costs 
and logistic support costs for maintenance, training, and support. In 
contrast, TSA, which uses and maintains the largest inventory of 
detection equipment in the Department, uses only seven different models 
of small X-ray equipment and three models of walk-through metal 
detectors. By limiting the number of models and types of equipment, TSA 
is in a position to increase efficiencies in procurement, maintenance, 
and personnel flexibilities.
Common Mission Requirements
    We identified about $170 million worth of small X-ray machines, 
metal detectors, and personal and hand-held radiation detectors that 
DHS could acquire through strategic sourcing strategies. Although 
multiple components were using similar equipment to meet similar 
screening missions, each component purchased the equipment separately. 
Components did not coordinate with each other to identify common 
requirements, consolidate purchases to gain buying power, or 
consolidate logistic support requirements.
    DHS Management Directive 1405 (September 2003) established a Joint 
Requirements Council (JRC) as a senior-level requirements review board 
to identify cross-cutting opportunities and common requirements among 
DHS organizational elements for non-information technology investments. 
The JRC met periodically between fiscal years 2004 and 2006. 
Representatives on the JRC reviewed programs and processes for 
potential mission overlap and redundancies. Among the programs reviewed 
were TSA's Secure Flight and Registered Traveler and CBP's Consolidated 
Registered Traveler programs. In 2006, the JRC stopped meeting after 
the Department assigned the council chair to other duties. However, DHS 
now recognizes the importance of the JRC and indicated that it might 
revive the council or pursue another alternative to identify duplicate 
programs and processes across the Department. This undertaking should 
include an effort to identify common data elements and nomenclature 
within inventories and to establish a data dictionary for the 
Department's detection equipment.
    In addition to the JRC, commodity councils are an integral element 
of developing an effective strategic sourcing program. Commodity 
councils include representatives from across the organization. The 
members act as the subject matter experts in the acquisition process 
and in establishing requirements for a specific commodity or service. 
Generally, the component purchasing the largest quantity of a 
particular item takes the lead role in acquiring the commodity or 
service and may serve as that commodity's single-item manager.
    DHS and other Federal agencies use the commodity council concept. 
For example, in 2003, DHS established the Weapons and Ammunition 
Commodity Council to create a Department-wide strategy for 
consolidating requirements and gaining economies of scale for the 
acquisition of weapons and ammunition. The council, which includes 
representatives from each component that uses weapons, developed 
requirements for firearms, ammunition, and body armor. ICE took the 
lead role, using service-level agreements with other components to 
establish one overall contract, which is available to all DHS entities.
Inventory Data
    DHS inventory systems do not use standard inventory data elements 
and standard nomenclature for similar detection equipment. Currently, 
DHS is unable to view consolidated inventory information on detection 
equipment and must rely on data calls to determine its inventory, 
including type, model, and value of equipment on hand. Each component 
manages its inventory through eight separate asset management inventory 
systems that do not interface, are not compatible, and do not use 
standardized data descriptions or nomenclature based on a uniform data 
dictionary. DHS does not have a mechanism in place to identify and 
assign common data elements to these inventory systems. Without a 
common data dictionary based on common data elements and nomenclature, 
the Department is not able to efficiently verify the on-hand balances. 
As a result, the Department may not be able to evaluate its detection 
equipment requirements and develop a disciplined logistics function to 
manage its detection equipment.
    A GAO report, Framework for Assessing the Acquisition Function at 
Federal Agencies, emphasizes data stewardship as a critical success 
factor in managing information systems.\7\ It identifies the need for 
consistency among data definitions, sources, controls, and edits 
routines as a best practice.
---------------------------------------------------------------------------
    \7\ GAO-05-218G, September 2005.
---------------------------------------------------------------------------
    Seven of DHS' asset management inventory systems, however, are 
legacy systems. DHS implemented the eighth system for headquarters and 
those components that did not have an internal procurement function. 
The component legacy systems support the respective components and 
continue to operate in stovepipes without interfacing with other 
components. Headquarters relies on data calls from each component to 
gather Department-wide inventory information.
    As part of our audit on detection equipment acquisition, the 
components provided us with detection equipment inventories in response 
to a data call. The information provided was in nonstandard formats, 
and data elements and nomenclature were not standardized. CBP sent 
32,000 lines of data, with some entries dated as early as 1940, but its 
original submission still did not include all detection equipment on 
hand and required a follow-up request to obtain a complete universe. 
Unless DHS establishes a uniform or common data dictionary, the 
categories and data descriptions will vary among the components and the 
Department cannot be sure that the inventory data it relies on are 
complete and accurate. For example:

``One component categorized an explosive detection device as `detection 
equipment,' another categorized it as `security equipment,' while 
another categorized it using specific equipment names, with the 
nomenclature including the name of the individual assigned the 
equipment.''

    To establish control, oversight, and visibility of the component 
inventories and until DHS deploys an integrated system; DHS needs to 
establish a common data dictionary to standardize data elements across 
component and headquarters systems. Establishing an inventory data 
dictionary will assist DHS in developing strategic sourcing strategies 
and support greater efficiencies in its detection equipment 
inventories.
    The Department has agreed in principle with our two 
recommendations, and is taking action to implement the recommendations. 
DHS is evaluating reestablishing the Joint Requirements Council and 
other alternatives to achieve the same goal. It will perform a business 
case analysis of detection equipment and establish a commodity council 
or working group if it determines that this equipment can be 
strategically sourced.
                               conclusion
    DHS, established by combining 22 agencies with different legacy 
systems, missions, and cultures, has made considerable strides in 
establishing its acquisition management practices and procedures. It 
has established oversight policies, clarified roles and 
responsibilities for acquisition, and worked to address staff 
shortages. It needs to continue improvements that affect its cohesion 
as a Department and its bottom line. Increased use of tools such as 
strategic sourcing and a commonly applied definition of an acquisition 
program will help the components work together to leverage resources.

    Mr. McCaul. Thank you, Mr. Edwards.
    The Chair now recognizes Mr. Maurer for his testimony.

 STATEMENT OF DAVID C. MAURER, DIRECTOR, HOMELAND SECURITY AND 
         JUSTICE TEAM, GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Maurer. Good morning, Chairman McCaul, Ranking Member 
Keating, other Members and staff. I am pleased to be here today 
to discuss DHS' challenges and progress in developing and 
acquiring new technologies to meet homeland security needs. 
Let's be clear. DHS has struggled to deploy new technologies. 
Drawing on years of work, we have identified three key steps 
DHS should take before spending millions or billions on new 
systems. First, ensure programs have clear requirements that 
can be met and are met. Second, complete testing and evaluation 
to ensure new technologies work in real-world situations. 
Third, conduct cost-benefit analysis to ensure that taxpayer 
dollars are buying systems that improve homeland security 
capabilities.
    In recent years we have found that DHS has not always done 
this and, as a result, DHS ends up taking risks that multi-
billion dollar programs may not deliver their expected 
benefits. For example, earlier this week, we reported that TSA 
faces significant challenges ensuring that systems to detect 
explosives in checked baggage meet the latest requirements. It 
took TSA 4 years to begin deploying systems that met enhanced 
requirements set in 2005. We also found that TSA lacks an 
overall plan to ensure the deployed systems meet requirements 
that were further enhanced in 2010. As a result, after spending 
over $8 billion since 2001 to improve checked baggage 
screening, it remains unclear how long it will take and how 
much more it will cost to ensure systems meet requirements. 
This March we reported on DHS' on-going efforts to deploy a 
virtual fence along the Southwest border. We found that DHS 
made key decisions without completing an independent evaluation 
of system operational effectiveness and suitability. DHS 
developed plans to build on existing technology from the $1.5 
billion SBInet program before completing an assessment of how 
well that technology works. In addition, our preliminary review 
raised questions about DHS' assessment of the cost 
effectiveness of a range of border technology options. We are 
currently reviewing DHS' efforts to obtain and deploy border 
security technologies and expect to report our findings in the 
fall. We have also found significant problems with DHS' efforts 
to develop and deploy the advanced spectroscopic portal 
monitor, or ASP. DHS believes ASPs would do a better job 
detecting radiation than the equipment currently deployed on 
the Nation's borders at an estimated cost of over $2 billion. 
However, among other things, we found that DHS overestimated 
how well ASPs worked and underestimated the cost to develop and 
deploy the technology. In short, it wasn't clear the program 
would improve DHS' primary radiation screening capabilities. As 
a result, in February 2010, the Secretary scaled back plans for 
the number of ASPs DHS would purchase and how they would be 
used.
    Now, when you hear examples like this, it's important to 
remember why DHS presses the envelope. DHS faces a constant 
balancing act between immediate mission needs and the need to 
make sound, informed decisions following processes that are not 
designed for speed. The good news is that DHS is taking actions 
to address these problems. Over the past several months, DHS 
has issued new policies for acquisition and testing and 
evaluation, implemented a reorganization of the Science and 
Technology Directorate, and developed plans to revamp DHS' 
overall approach to investment decision making. These changes 
in plans show a clear commitment from Department leadership to 
take these problems head-on.
    Just yesterday, we issued a report on S&T's roles ensuring 
DHS acquisition programs are independently tested and 
evaluated. We reviewed 11 major acquisition programs and found 
that S&T has generally been meeting its oversight requirements 
and acting as an honest broker in the acquisition process. In 
addition, last month, DHS updated its on-going efforts to 
improve how it makes and implements investment and acquisition 
decisions. Among other things, their latest plan calls for the 
management directorate and S&T to work together to ensure new 
technologies meet requirements, and critical mission needs are 
tested before use and have demonstrable benefits that were 
worth the cost.
    In short, there are encouraging signs that things are 
changing for the better, but it is still too early to tell. In 
many instances, DHS needs to turn plans into concrete action 
that clearly demonstrates the Department is meeting 
requirements, testing before buying, and delivering benefits 
within promised costs and time frames. By doing so, DHS makes 
it more likely that multi-million or multi-billion dollar 
programs will be delivered on time, within budget, and capable 
of meeting critical mission needs. Mr. Chairman, thank you for 
the opportunity to testify this morning. I look forward to your 
questions.
    [The statement of Mr. Maurer follows:]
                 Prepared Statement of David C. Maurer
                             July 15, 2011
                              GAO-11-829T
    Chairman McCaul, Ranking Member Keating, and Members of the 
subcommittee: I am pleased to be here today to discuss our past work 
examining the Department of Homeland Security's (DHS) progress and 
challenges in developing and acquiring new technologies to address 
homeland security needs. DHS acquisition programs represent hundreds of 
billions of dollars in life cycle costs and support a wide range of 
missions and investments including border surveillance and screening 
equipment, nuclear detection equipment, and technologies used to screen 
airline passengers and baggage for explosives, among others. Since its 
creation in 2003, DHS has spent billions of dollars developing and 
procuring technologies and other countermeasures to address various 
threats and to conduct its missions. Within DHS, the Science and 
Technology Directorate (S&T) conducts general research and development 
and oversees the testing and evaluation efforts of DHS components, 
which are responsible for developing, testing, and acquiring their own 
technologies. For example, the Transportation Security Administration 
(TSA) is responsible for securing the Nation's transportation systems 
and, with S&T, researching, developing, and deploying technologies to, 
for example, screen airline passengers and their baggage. U.S. Customs 
and Border Protection (CBP) is responsible for implementing measures 
and technologies to secure the Nation's borders. In recent years, we 
have reported that DHS has experienced challenges in managing its 
multibillion-dollar acquisition efforts, including implementing 
technologies that did not meet intended requirements and were not 
appropriately tested and evaluated, and has not consistently included 
completed analyses of costs and benefits before technologies were 
implemented.
    My testimony today focuses on the key findings of our prior work 
related to DHS's efforts to acquire and deploy new technologies to 
address homeland security needs. Our past work has identified three key 
challenges: (1) Developing technology program requirements, (2) 
conducting and completing testing and evaluation of technologies, and 
(3) incorporating information on costs and benefits in making 
technology acquisition decisions. This statement will also discuss 
recent DHS efforts to strengthen its investment and acquisition 
processes.
    This statement is based on reports and testimonies we issued from 
May 2009 through July 2011 related to DHS's efforts to manage, test, 
and deploy various technology programs and selected updates conducted 
in July 2011 related to DHS's efforts to strengthen its investment and 
acquisition processes.\1\ For the updates, we reviewed recent DHS 
efforts to strengthen its investment and acquisition processes, such as 
a June 2011 DHS report on the Department's progress and efforts in 
addressing challenges identified in our biennial reports addressing 
high-risk management issues.\2\ For our past work, we reviewed program 
schedules, planning documents, testing reports, and other acquisition 
documentation. For some of the programs we discuss in this testimony, 
we conducted site visits to a range of facilities, such as National 
laboratories, airports, and other locations to observe research, 
development, and testing efforts. We also conducted interviews with DHS 
component program managers and S&T officials to discuss issues related 
to individual programs. We conducted this work in accordance with 
generally accepted Government auditing standards. More detailed 
information on the scope and methodology from our previous work can be 
found within each specific report.
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    \1\ See the related products list at the end of this statement.
    \2\ Department of Homeland Security Integrated Strategy for High 
Risk Management, Implementation and Transformation, Bi-annual Update to 
the Government Accountability Office, June 2011.
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     dhs has experienced challenges in developing and meeting key 
           performance requirements for various technologies
    Our past work has found that program performance cannot be 
accurately assessed without valid baseline requirements established at 
the program start. Without the development, review, and approval of key 
acquisition documents, such as the mission need statement, agencies are 
at risk of having poorly defined requirements that can negatively 
affect program performance and contribute to increased costs.\3\ We 
have also identified technologies that DHS has deployed that have not 
met key performance requirements. For example, in June 2010, we 
reported that over half of the 15 DHS programs we reviewed awarded 
contracts to initiate acquisition activities without component or 
Department approval of documents essential to planning acquisitions, 
setting operational requirements, and establishing acquisition program 
baselines.\4\ We made a number of recommendations to help address these 
issues as discussed below. DHS has generally agreed with these 
recommendations and, to varying degrees, has taken actions to address 
them.
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    \3\ The mission need statement outlines the specific functional 
capabilities required to accomplish DHS's mission and objectives, along 
with deficiencies and gaps in these capabilities.
    \4\ GAO, Department of Homeland Security: Assessments of Selected 
Complex Acquisitions, GAO-10-588SP (Washington, DC: June 30, 2010).
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    In addition, our past work has found that DHS faces challenges in 
identifying and meeting program requirements in a number of its 
programs. For example:
   In July 2011, we reported that TSA revised its explosive 
        detection system (EDS) requirements to better address current 
        threats and plans to implement these requirements in a phased 
        approach. However, we reported that only some of the EDSs in 
        TSA's fleet are configured to detect explosives at the levels 
        established in the 2005 requirements. The remaining EDSs are 
        configured to detect explosives at 1998 levels. When TSA 
        established the 2005 requirements, it did not have a plan with 
        the appropriate time frames needed to deploy EDSs to meet the 
        requirements. To help ensure that EDSs are operating most 
        effectively, we recommended that TSA develop a plan to deploy 
        and operate EDSs to meet the most recent requirements to ensure 
        new and currently deployed EDSs are operated at the levels in 
        established requirements. DHS concurred with our 
        recommendation.\5\
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    \5\ GAO, Aviation Security: TSA Has Enhanced Its Explosives 
Detection Requirements for Checked Baggage, but Additional Screening 
Actions Are Needed, GAO-11-740 (Washington, DC: July 11, 2011). An EDS 
machine uses computed tomography technology to automatically measure 
the physical characteristics of objects in baggage. The system 
automatically triggers an alarm when objects that exhibit the physical 
characteristics of explosives are detected.
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   In September 2010, we reported that the Domestic Nuclear 
        Detection Office (DNDO) was simultaneously engaged in the 
        research and development phase while planning for the 
        acquisition phase of its cargo advanced automated radiography 
        system to detect certain nuclear materials in vehicles and 
        containers at ports.\6\ DNDO pursued the deployment of the 
        cargo advanced automated radiography system without fully 
        understanding the physical requirements of incorporating the 
        system in existing inspection lanes at ports of entry. We 
        reported that this occurred because, during the first year or 
        more of the program, DNDO and CBP had few discussions about 
        operating requirements for primary inspection lanes at ports of 
        entry. DHS spent $113 million on the program since 2005 and 
        canceled the development phase of the program in 2007.
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    \6\ GAO, Combating Nuclear Smuggling: Inadequate Communication and 
Oversight Hampered DHS Efforts to Develop an Advanced Radiography 
System to Detect Nuclear Materials, GAO-10-1041T (Washington, DC: Sept. 
15, 2010).
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   In May 2010, we reported that not all of the Secure Border 
        Initiative Network (SBInet) operational requirements that 
        pertain to Block 1 were achievable, verifiable, unambiguous, 
        and complete.\7\ For example, a November 2007 DHS assessment 
        found problems with 19 operational requirements, which form the 
        basis for the lower-level requirements used to design and build 
        the system. As a result, we recommended that the Block 1 
        requirements, including key performance parameters, be 
        independently validated as complete, verifiable, and affordable 
        and any limitations found in the requirements be addressed. DHS 
        agreed with these recommendations and CBP program officials 
        told us that they recognized the difficulties they experienced 
        with requirements development practices with the SBInet 
        program. In January 2011, the Secretary of Homeland Security 
        announced her decision to end the program as originally 
        conceived because it did not meet cost-effectiveness and 
        viability standards.\8\
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    \7\ GAO, Secure Border Initiative: DHS Needs to Reconsider Its 
Proposed Investment in Key Technology Program, GAO-10-340 (Washington, 
DC: May 5, 2010) and Secure Border Initiative: DHS Needs to Address 
Testing and Performance Limitations That Place Key Technology Program 
at Risk, GAO-10-158 (Washington, DC: Jan. 29, 2010). SBInet Block 1 is 
a surveillance, command, control, communications, and intelligence 
system fielded in parts of Arizona that is intended to mitigate or 
eliminate vulnerabilities along the international border between ports 
of entry. Block 1 is an element of DHS's Secure Border Initiative, a 
comprehensive, multiyear plan to secure the borders of the United 
States and reduce illegal cross border activities such as smuggling of 
economic migrants, illegal drugs, and people with terrorist intent.
    \8\ GAO, Border Security: Preliminary Observations on the Status of 
Key Southwest Border Technology Programs, GAO-11-448T (Washington DC: 
Mar. 15, 2011). After an internal assessment initiated in January 2010, 
the Secretary of Homeland Security announced in January 2011 that she 
had directed CBP to end the SBInet program as originally conceived. 
According to DHS, the Secretary's decision was informed by an 
independent analysis of cost-effectiveness, a series of operational 
tests and evaluations, and Border Patrol input.
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   In October 2009, we reported that TSA passenger screening 
        checkpoint technologies were delayed because TSA had not 
        consistently communicated clear requirements for testing the 
        technologies.\9\ We recommended that TSA evaluate whether 
        current passenger screening procedures should be revised to 
        require the use of appropriate screening procedures until TSA 
        determined that existing emerging technologies meet its 
        functional requirements in an operational environment. TSA 
        agreed with this recommendation and reported taking actions to 
        address it.
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    \9\ GAO, Aviation Security: DHS and TSA Have Researched, Developed, 
and Begun Deploying Passenger Checkpoint Screening Technologies, but 
Continue to Face Challenges, GAO-10-128 (Washington, DC: Oct. 7, 2009).
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dhs has encountered challenges in conducting and completing testing and 
                               evaluation
    Our prior work has also identified that failure to resolve problems 
discovered during testing can sometimes lead to costly redesign and 
rework at a later date and that addressing such problems during the 
testing and evaluation phase before moving to the acquisition phase can 
help agencies avoid future cost overruns. Specifically:
   In March 2011, we reported that the independent testing and 
        evaluation of SBInet's Block 1 capability to determine its 
        operational effectiveness and suitability was not complete at 
        the time DHS reached its decision regarding the future of 
        SBInet or requested fiscal year 2012 funding to deploy the new 
        Alternative (Southwest) Border Technology.\10\ We reported that 
        because the Alternative (Southwest) Border Technology 
        incorporates a mix of technology, including an Integrated Fixed 
        Tower surveillance system similar to that currently used in 
        SBInet, the testing and evaluation could have informed DHS's 
        decision about moving forward with the new technology 
        deployment.
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    \10\ GAO-11-448T.
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   In September 2010, we reported that S&T's plans for 
        conducting operational testing of container security 
        technologies did not reflect all of the operational scenarios 
        that CBP was considering for implementation.\11\ We reported 
        that until the container security technologies are tested and 
        evaluated consistent with all of the operational scenarios, S&T 
        cannot provide reasonable assurance that the technologies will 
        function as intended. For example, S&T did not include certain 
        scenarios necessary to test how a cargo container would be 
        transported throughout the maritime supply chain. We 
        recommended that DHS test and evaluate the container security 
        technologies consistent with all the operational scenarios DHS 
        identified for potential implementation. DHS concurred with our 
        recommendation.
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    \11\ GAO, Supply Chain Security: DHS Should Test and Evaluate 
Container Security Technologies Consistent with All Identified 
Operational Scenarios to Ensure the Technologies Will Function as 
Intended, GAO-10-887 (Washington DC: Sept. 29, 2010).
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   In October 2009, we reported that TSA deployed explosives 
        trace portals, a technology for detecting traces of explosives 
        on passengers at airport checkpoints, even though TSA officials 
        were aware that tests conducted during 2004 and 2005 on earlier 
        models of the portals suggested the portals did not demonstrate 
        reliable performance in an airport environment.\12\ TSA also 
        lacked assurance that the portals would meet functional 
        requirements in airports within estimated costs and the 
        machines were more expensive to install and maintain than 
        expected. In June 2006, TSA halted deployment of the explosives 
        trace portals because of performance problems and high 
        installation costs. We recommended that to the extent feasible, 
        TSA ensure that tests are completed before deploying checkpoint 
        screening technologies to airports. DHS concurred with the 
        recommendation and has taken action to address it, such as 
        requiring more-recent technologies to complete both laboratory 
        and operational tests prior to deployment.
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    \12\ GAO-10-128.
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dhs has not consistently incorporated information on costs and benefits 
                    in making acquisition decisions
    Our prior work has shown that cost-benefit analyses help 
Congressional and agency decision-makers assess and prioritize resource 
investments and consider potentially more cost-effective alternatives 
and that without this ability, agencies are at risk of experiencing 
cost overruns, missed deadlines, and performance shortfalls. For 
example, we have reported that DHS has not consistently included these 
analyses in its acquisition decisionmaking. Specifically:
   In March 2011, we reported that the decision by the 
        Secretary of Homeland Security to end the SBInet program was 
        informed by, among other things, an independent analysis of 
        cost-effectiveness.\13\ However, it was not clear how DHS used 
        the results to determine the appropriate technology plans and 
        budget decisions, especially since the results of SBInet's 
        operational effectiveness were not complete at the time of the 
        Secretary's decision to end the program. Furthermore, the cost 
        analysis was limited in scope and did not consider all 
        technology solutions because of the need to complete the first 
        phase of the analysis in 6 weeks. It also did not assess the 
        technology approaches based on the incremental effectiveness 
        provided above the baseline technology assets in the geographic 
        areas evaluated. As we reported, for a program of this 
        importance and cost, the process used to assess and select 
        technology needs to be more robust.
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    \13\ GAO-11-448T.
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   In October 2009, we reported that TSA had not yet completed 
        a cost-benefit analysis to prioritize and fund its technology 
        investments for screening passengers at airport 
        checkpoints.\14\ One reason that TSA had difficulty developing 
        a cost-benefit analysis was that it had not yet developed life 
        cycle cost estimates for its various screening technologies. We 
        reported that this information was important because it would 
        help decision-makers determine, given the cost of various 
        technologies, which technology provided the greatest mitigation 
        of risk for the resources that were available. We recommended 
        that TSA develop a cost-benefit analysis. TSA agreed with this 
        recommendation and has completed a life cycle cost estimate and 
        collected information for its checkpoint technologies, but has 
        not yet completed a cost-benefit analysis.
---------------------------------------------------------------------------
    \14\ GAO-10-128.
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   In June 2009, we reported that DHS's cost analysis of the 
        Advanced Spectroscopic Portal (ASP) program did not provide a 
        sound analytical basis for DHS's decision to deploy the 
        portals.\15\ We also reported that an updated cost-benefit 
        analysis might show that DNDO's plan to replace existing 
        equipment with advanced spectroscopic portals was not 
        justified, particularly given the marginal improvement in 
        detection of certain nuclear materials required of advanced 
        spectroscopic portals and the potential to improve the current-
        generation portal monitors' sensitivity to nuclear materials, 
        most likely at a lower cost.\16\ At that time, DNDO officials 
        stated that they planned to update the cost-benefit analysis. 
        After spending more than $200 million on the program, in 
        February 2010 DHS announced that it was scaling back its plans 
        for development and use of the portals technology.
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    \15\ GAO, Combating Nuclear Smuggling: Lessons Learned from DHS 
Testing of Advanced Radiation Detection Portal Monitors, GAO-09-804T 
(Washington, DC: June 25, 2009). The ASP program is an effort by DHS to 
develop, procure, and deploy a successor to existing radiation 
detection portals. Radiation detection portals, also known as radiation 
portal monitors, are designed to detect the emission of radiation from 
objects that pass by them. The current portals are generally deployed 
at the U.S. land and sea borders by DHS's DNDO and operated by DHS's 
CBP.
    \16\ GAO-09-804T.
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  dhs has efforts under way to strengthen acquisition and technology 
                              development
    Since DHS's inception in 2003, we have designated implementing and 
transforming DHS as high risk because DHS had to transform 22 
agencies--several with major management challenges--into one 
Department. This high-risk area includes challenges in strengthening 
DHS's management functions, including acquisitions; the impact of those 
challenges on DHS's mission implementation; and challenges in 
integrating management functions within and across the Department and 
its components. Failure to effectively address DHS's management and 
mission risks could have serious consequences for U.S. National and 
economic security.\17\
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    \17\ GAO, High Risk Series: An Update, GAO-11-278 (Washington, DC: 
February 2011).
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    In part because of the problems we have highlighted in DHS's 
acquisition process, implementing and transforming DHS has remained on 
our high-risk list. DHS currently has several plans and efforts 
underway to address the high-risk designation as well as the more 
specific challenges related to acquisition and program implementation 
that we have previously identified.
    In June 2011, DHS reported to us that it is taking steps to 
strengthen its investment and acquisition management processes across 
the Department by implementing a decision-making process at critical 
phases throughout the investment life cycle. For example, DHS reported 
that it plans to establish a new model for managing Department-wide 
investments across their life cycles. Under this plan, S&T would be 
involved in each phase of the investment life cycle and participate in 
new councils and boards DHS is planning to create to help ensure that 
test and evaluation methods are appropriately considered as part of 
DHS's overall research and development investment strategies. In 
addition, DHS reported that the new councils and boards it is planning 
to establish to strengthen management of the Department's acquisition 
and investment review process would be responsible for, among other 
things, making decisions on research and development initiatives based 
on factors such as viability and affordability and overseeing key 
acquisition decisions for major programs using baseline and actual 
data. According to DHS, S&T will help ensure that new technologies are 
properly scoped, developed, and tested before being implemented. DHS 
also reports that it is working with components to improve the quality 
and accuracy of cost estimates and has increased its staff during 
fiscal year 2011 to develop independent cost estimates, a GAO best 
practice, to ensure the accuracy and credibility of program costs. DHS 
reports that four cost estimates for level 1 programs have been 
validated to date.
    The actions DHS reports taking or has under way to address the 
management of its acquisitions and the development of new technologies 
are positive steps and, if implemented effectively, could help the 
Department address many of these challenges. However, showing 
demonstrable progress in implementing these plans is key. In the past, 
DHS has not effectively implemented its acquisition policies, in part 
because it lacked the oversight capacity necessary to manage its 
growing portfolio of major acquisition programs. Since DHS has only 
recently initiated these actions, it is too early to fully assess their 
impact on the challenges that we have identified in our past work. 
Going forward, we believe DHS will need to demonstrate measurable, 
sustainable progress in effectively implementing these actions.
    Chairman McCaul, Ranking Member Keating, and Members of the 
subcommittee, this concludes my prepared statement. I would be pleased 
to respond to any questions that you or other Members of the 
subcommittee may have.

    Mr. McCaul. Thank you, Mr. Maurer. The Chairman now 
recognizes the Under Secretary, Mr. Borras, for his testimony.

STATEMENT OF RAFAEL BORRAS, UNDER SECRETARY FOR MANAGEMENT AND 
CHIEF ACQUISITION OFFICER, U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Borras. Good morning, Mr. Chairman, Ranking Member 
Keating, Ranking Member Thompson, other distinguished Members 
of the panel. I am especially pleased to be here and glad to be 
joined by my esteemed colleague, Dr. Tara O'Toole, Under 
Secretary for Science and Technology, as well as the acting 
Inspector General, Mr. Edwards, and Mr. Maurer from the General 
Accountability Office. I am pleased to discuss the issue of how 
we acquire and how we manage science and technology at DHS. One 
of my top priorities since I arrived at DHS has been to improve 
the efficiency and effectiveness of the acquisition process 
since it represents approximately $18 billion of the 
Department's $55 billion budgets. Based on our own internal 
management reviews, as well as IG audits and reviews from GAO, 
I concluded that the procurement phase of the acquisition 
cycle, from the receipt of requirements through award of 
contract, worked fairly well. However, continued attention is 
needed on the front end requirements development, as well as 
the back end, our program management phrase of the acquisition 
cycle.
    In January 2011, I submitted a copy of a comprehensive plan 
to GAO and furnished a copy as well to this subcommittee that 
outlined an integrated strategy for high-risk management. This 
strategy provides a road map and clear action plans to 
strengthen Department-wide strategic planning for all of the 
Department's investments, especially our major acquisition 
programs. A key tenet of the program is the integrated 
investment life cycle model which I would be happy to describe 
in greater detail. But this model defines an end-to-end process 
to integrate the way we develop and implement strategies, 
capabilities, and resources. It differs from prior efforts at 
the Department by providing a repeatable model that will span 
the entire DHS enterprise. Presently, many operational units 
plan budgets based on a limited view of their mission need.
    Under the integrated model, DHS will focus more attention 
on the front-end strategic phase, assessing both the 
capabilities and requirements up-front, thereby providing a 
broader enterprise-wide perspective to help ensure investments 
address the greatest needs of the Department and help leverage 
success among the various components. The integrated model will 
enhance our ability to excel in all facets of planning, 
procuring, and execution of our major programs.
    We have also undertaken initiatives to address program 
execution which will impact the budget, schedule, and 
performance of existing and future acquisition programs. Of 
particular importance to me is the acquisition of science and 
technology products. My partners in science and technology now 
play a key role in each phase of the acquisition cycle, 
especially in the earliest phases, concept development through 
program execution. I expect them to evaluate new and emerging 
technologies to address capability gaps which will ultimately 
enhance the Department-wide technology, their expertise and 
assist the Department in making better technology utilization 
decisions. Additionally, we have institutionalized the role of 
science and technology test and evaluation groups in our 
acquisitions review board process, elevating the role of 
operational testing to the highest departmental forum on 
acquisition. Our refinements will also help the Department 
clearly articulate our long-term strategic acquisition needs, 
which will improve industry's understanding of our requirements 
and promote a more competitive marketplace.
    I have spent countless hours in meetings with industry, 
both large and small, listening to their concerns and 
soliciting their input and ideas. It is my belief that our 
efforts will ultimately result in a more efficient and 
innovative solution to help the Department achieve its homeland 
security mission.
    In closing, DHS is working to improve the effectiveness of 
the acquisition life cycle and to provide better linkage 
between requirements development, resource allocation, 
procurement, and program management, with S&T as our full 
partner. We have come a long way, and we still have more work 
ahead of us. But we are on the right track to institutionalize 
a living framework which will enable the Department to become 
better buyers and deliver our taxpayers a better return on the 
investments of the resources provided to DHS. Once again, I 
thank you for the opportunity to appear before this committee, 
and I look forward to answering your questions.
    [The statement of Mr. Borras follows:]
                  Prepared Statement of Rafael Borras
                             July 15, 2011
    Chairman McCaul, Ranking Member Keating, and other distinguished 
Members of the committee, I thank you for the opportunity to appear 
before you today.
    Since my appointment, I have led the development and implementation 
of a comprehensive, strategic management approach focused on maturing 
organizational effectiveness within DHS. Through this effort, we are 
focused on enhancing the financial, acquisition, and human capital 
structures and processes necessary to meet DHS mission goals by 
integrating and aligning business functional areas at both the 
Departmental and Component levels. My approach has been built around 
three key elements:
    1. Acquisition Enhancement.--Improving upon the current Department 
        acquisition processes and procedures--addressing the ``front 
        end'' requirements as well as ``back end'' program management 
        in order to minimize risk, encourage fiscal responsibility, and 
        improve end-to-end execution across the entire acquisition life 
        cycle.
    2. Financial Enhancement.--Improving our financial systems and 
        capabilities in both the management directorate and the 
        components, emphasizing strong financial and analytical 
        discipline throughout the Department.
    3. Human Capital Management Enhancement.--Making sure we have the 
        right people in the right positions at the right time, with the 
        proper workforce balance between DHS and contract staff.
    I welcome the opportunity to focus today on the significant 
acquisition enhancements that are currently underway at the Department.
    The successful delivery of major programs is a strategic business 
function of our Department. Nearly half of the DHS budget is dedicated 
to obtaining goods and services to support and improve our 
capabilities, including over $18 billion in investments in our 
acquisition programs. Those who directly carry out our mission require 
and deserve the tools and processes to help address their evolving 
mission needs effectively and efficiently. With limited resources and 
increasing demands, we understand that we must excel in all facets of 
planning, procuring, and managing the execution of our major programs.
    The Secretary and Deputy Secretary have asked me to lead our on-
going effort to improve the overall acquisition management process, 
specifically focusing on strengthening the capabilities and 
requirements development process to better support the Department's 
strategies and priorities while enhancing program execution. To that 
end, we have held a series of strategic meetings with the Chief 
Procurement Officer, Chief Information Officer, Component Acquisition 
Executives, Heads of Contracting Activity, and other program management 
professionals to gain valuable insight into the systemic weaknesses 
that we must overcome in order to deliver programs successfully.
    Successful program management requires well-defined requirements 
based on our priority needs, effective strategies for developing 
solutions, and efficient processes to operate and maintain solutions. 
Our review of more than 80 major programs shows that our biggest 
challenges start with the requirements process and our lack of 
qualified program management staff.
           integrating requirements and acquisition processes
    I submitted a report to GAO in January 2011 titled, Integrated 
Strategy for High-Risk Management. In that report, I committed to 
strengthening the strategic phase of the Integrated Investment Life 
Cycle Model. In the short time since the report was issued, significant 
progress has been made to strengthen investment management across the 
Department.
    The Integrated Investment Life Cycle Model (see Figure 1) is an 
end-to-end process that integrates strategy, resources, and 
capabilities. It differs from prior efforts in that it is a formal, 
repeatable model that will span the DHS enterprise. Presently, 
operational units plan budgets based on a limited view of mission need. 
Under the integrated model, DHS will mature its ``front-end'' strategic 
phase, thereby providing a broader, enterprise-wide perspective and 
ensuring our investments address the greatest needs of the Department. 
The Integrated Investment Life Cycle Model will facilitate our ability 
to excel in all facets of planning, procuring, and managing the 
execution of our major programs.


    To date, we have made significant progress towards establishing the 
Integrated Investment Life Cycle Model by:
   Designing and publishing the Integrated Investment Life 
        Cycle Model (IILCM) in the Integrated Strategy for High-Risk 
        Management (January 2011);
   Identifying five (5) pilot programs to test the IILCM 
        concept;
   Forming an initial set of Functional Coordination Offices 
        (FCOs) to provide analytical support;
   Planning for the first Capabilities and Requirements Council 
        (CRC) to meet in early Quarter 4 of fiscal year 2011 to 
        validate requirements;
   Initiating the development of a Decision Support Tool (DST) 
        to provide enhanced analytic support for major acquisition 
        programs; and
   Continuing the Program Review Board and Acquisition Review 
        Boards (ARB) for providing decisions for on-going investments. 
        Ultimately the ARB will migrate to a new Investment Review 
        Board that has a more holistic reach.
    I recognize that effective vendor engagement in the acquisition 
process is critical to competition, the identification of commercial 
item solutions, and the realization of savings. However, the speed at 
which we achieve these objectives must be balanced against the need to 
abide by statutes, rules, and regulations.
    While the Integrated Investment Life Cycle Model is in the initial 
stages of development, we are confident that it will significantly 
improve our decision-making processes and are committed to making it 
successful. The model will result in improved collaboration among our 
Components, greater efficiencies, and an enhanced ability to ensure our 
investments are highly responsive to the capability needs of the 
homeland security enterprise. It will also help the Department clearly 
articulate our long-term strategic acquisition needs, which will 
improve industry's understanding of our requirements and promote a more 
competitive marketplace. This will ultimately result in more efficient 
and innovative solutions to help the Department achieve its mission.
                      the pre-acquisition process
    There is significant unrealized value in maturing the pre-
acquisition process. In the earliest phases of concept development and 
program initiation, the Department's Science and Technology Directorate 
(S&T) can help define the appropriate technological solutions and 
perform feasibility analysis. This can occur while studying the 
affordability, performance, and viability of various alternatives.
    The continuous performance of requirements management is essential 
throughout the acquisition life-cycle, but is most critical during the 
earliest planning phase. DHS is strengthening our front-end process by 
providing greater rigor and oversight of the development of 
requirements. To that end, we have formally incorporated the role of 
S&T in the development of all technology requirements for the 
Department. S&T is in a unique position to evaluate new and emerging 
technologies against capability gaps, which will increase technological 
expertise and assist the Department in making better technology ``buy'' 
decisions for the DHS Enterprise.
    S&T has the statutory authority to serve a significant role in the 
management of Departmental acquisitions as the Directorate is charged 
to, ``conduct basic and applied research, development, demonstration, 
testing, and evaluation activities relevant to any or all elements of 
the Department.''\1\ The Homeland Security Act provides sufficient 
guidance as to ``what'' S&T should be doing in the management of 
acquisitions. An enhanced Integrated Investment Life-Cycle Model will 
better identify ``how'' S&T will serve a key role in acquisition 
management.
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    \1\ Homeland Security Act of 2002.
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    As Under Secretary O'Toole has noted, ``a critical part of 
successfully transitioning technology is gaining an accurate 
understanding of the customer needs at the beginning of the 
project.''\2\ I am pleased that Under Secretary O'Toole has established 
the Acquisition Support and Operations Analysis Group to leverage 
technical expertise and assist DHS Components' efforts. Leading this 
critical role for S&T is Director Henry Gonzalez, who is responsible 
for connecting S&T projects to the operational Components, developing 
the Integrated Product Team process to identify component technology 
needs, and linking S&T investments to those needs.
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    \2\ Testimony of Under Secretary Dr. Tara O'Toole before House 
Committee on Science, March 15, 2011.
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    The Acquisition Support and Operations Analysis Group will leverage 
S&T's critical mass of technical capability and will work in close 
collaboration with the Management Directorate to:
   Aid the components in developing high-fidelity, testable 
        operational requirements for their acquisitions;
   Aid in executing an analysis of alternatives to ensure that 
        the most appropriate technical approach is taken; and
   Partner with the components throughout an acquisition so 
        that user needs are translated into real capabilities that can 
        be validated upon delivery and deployed without delay.
    My colleagues in the S&T will expound upon this effort and how it 
will guide, support, and strengthen the process.
                improving the definition of requirements
    In addition to S&T's efforts previously mentioned, the Management 
Directorate is establishing a Center of Excellence for Requirements. 
The purpose of this Center is to support DHS Component awareness, 
understanding, and use/adaptation of proven best practices, which will 
provide DHS program managers with proven tools, processes, and 
training. The Requirements Center of Excellence will establish a well-
defined and repeatable approach to requirement definition to ensure 
that our process guidance explains the information needed for success. 
The goal is to support the use of best-in-class requirements management 
and execution tools, and standardize operating models for how to best 
use the tools.
    The greatest value of this effort will be our ability to link 
emerging and existing capabilities to operational requirements. A key 
challenge will be harmonizing requirements across seemingly disparate 
components and investments.
                        the acquisition process
    The Department's acquisition management framework is growing 
stronger through the refinement of our policy, processes, procedures, 
and the placement of people with the right skill sets in the program 
offices. The goal is for every major program to be implemented in the 
most responsible and efficient manner possible. Our enterprise-wide 
acquisition framework is a key element of our integration strategy, and 
the Department has taken a number of steps to strengthen it.
    I have gained valuable insight from conversations I have had with 
the private sector, specifically those large and small businesses doing 
work with DHS. The product of those conversations has, in part, helped 
shape our strategy for maturing our acquisition process, and has 
resulted in a more constructive dialogue and feedback loop with our 
private sector partners. It is essential that we maximize our 
investments in the goods and services we acquire to help us achieve our 
mission.
    DHS has implemented the final version of Acquisition Management 
Directive 102-01. Directive 102 formalizes the role of the Acquisition 
Review Board in the oversight and governance process by establishing 
criteria for reviewing and approving a program's progress through a 
standard investment life cycle (See Figure 2). The implementation of 
this directive has resulted in productive interactions between program 
offices and Department leadership allowing us to mitigate or avoid 
unnecessary costs, review schedules, and evaluate performance risks.
    The cornerstone of our acquisition review process is the program 
baseline. The acquisition program baseline formally documents critical 
cost, schedule, and performance parameters that must be met to 
accomplish the program's goals. By tracking and measuring actual 
program performance against baseline, management is alerted to 
potential problems and can take corrective action.


    The Department has provided standardized structure to the 
Acquisition Review Board presentation materials, focusing on six key 
areas that all programs must report progress on. These include cost, 
performance, schedule, risk, funding profile, and staffing. Other 
challenges that are unique to the program are discussed, but 
standardizing the opening dialog of the Acquisition Review Board has 
resulted in better focus on the key issues of program execution.
    Additionally, the formalized role of S&T's Testing and Evaluation 
in the acquisition review process institutionalizes the rigor of proper 
test procedures and plans in the acquisition process.
    Another important step in strengthening acquisition program 
management is managing risk. We are developing a risk management 
capability within our decision support tool as well as a standard 
criterion to evaluate program execution risks. This module will provide 
for a centralized means to track risks both at the Department and 
Component level. Acquisition Review Boards, portfolio reviews, and day-
to-day oversight all aid in identifying risks faced by programs. As 
critical risks are identified, steps are taken to place a program on a 
path to successfully deliver capability to operators.
    A central tenet of the Department's management integration strategy 
is the collection and dissemination of business intelligence and a 
centralized Decision Support Tool (DST) (See Figure 3). Utilization of 
these tools will help us better manage the complex relationships 
between mission objectives, program strategy and performance metrics 
for a specific program. 


    When fully deployed, the Decision Support Tool will be the 
authoritative source for governance boards on the health of individual 
programs and help determine ``go/no-go'' decisions. The goal of a 
Decision Support Tool is to strengthen accountability for program 
management and to develop a common language and discipline for all 
program investments by communicating indicators that inform the health 
status of programs and provide general performance predictors.
    From a strategic level, the Decision Support Tool system will 
accomplish the following:
   Organize data in a template that guides business owners 
        through a series of uniform questions to assess the risk of an 
        investment,
   Weigh each response with risk-based algorithms scored to 
        determine a program's risk relative to the Department's 
        strategic goals and other competing investments,
   Assess the progress of each program during its life cycle on 
        a periodic basis (e.g., quarterly) relative to pre-established 
        measures,
   Provide a series of customizable reports on program status 
        in a dashboard format that is visible to designated officials, 
        according to permission-based roles and responsibilities, and
   Store key data for historical use, record data 
        modifications, and allow users to submit documentation to 
        support ratings.
    By combining the strengths and merits of the Integrated Investment 
Life Cycle Model with a Department-wide Decision Support Tool, we will 
have the structure, processes, and systems necessary to strategically, 
effectively, and efficiently manage our mission goals.
                               conclusion
    DHS is working to improve the effectiveness of the acquisition life 
cycle and provide better linkages between requirements development, 
resource allocation, procurement and program management. The Integrated 
Investment Life Cycle Model is a holistic approach to how DHS 
investments should be managed.
    Once again, I thank you for the opportunity to appear before you 
today, and I look forward to answering your questions.

    Mr. McCaul. Thank you, Mr. Borras. The Chairman now 
recognizes Under Secretary O'Toole for her testimony.

    STATEMENT OF TARA O'TOOLE, UNDER SECRETARY, SCIENCE AND 
  TECHNOLOGY DIRECTORATE, U.S. DEPARTMENT OF HOMELAND SECURITY

    Dr. O'Toole. Thank you Mr. Chairman, Ranking Members, 
distinguished Members of the committee, I will make may remarks 
very brief so we can get to the questions.
    Mr. McCaul. The Chairman thanks you for that.
    Dr. O'Toole. Let's see if I can pull it off. The S&T 
Directorate was created by Congress in 2002 and given very 
broad responsibilities to conduct and coordinate basic and 
applied research and development demonstration testing 
evaluation activities relevant to any or all elements of DHS. 
In addition to designing and managing new technology for the 
Department, we are also the core source of technical expertise 
of engineers and scientists in this highly operational 
department. Our reach and depth in the technical areas is 
pertinent to DHS, coupled with our understanding of on-the-
ground operational needs in the Department, I think be used to 
gain significant improvements in DHS' acquisition process. 
Understand that until very recently, S&T was not regularly or 
usually involved in acquisition except in the testing and 
evaluation phrase at the back end of the acquisition process. 
Secretary Borras and I both required improvements in 
acquisition as one of our top priorities, and we have formed a 
strong partnership, not just between the two of us, but between 
our staffs to institutionalize S&T's roles in the Department's 
integrated investment life cycle model. In addition, last fall, 
the S&T directorate realigned our organization and created the 
office of acquisition support and operational analysis, which 
will be led by Mr. Henry Gonzalez, a professional who has 27 
years of Federal acquisition experience.
    This office is designed specifically to assist DHS' 
components in their efforts to establish clear and testable 
operational requirements at the very beginning of the 
acquisition process, which is key to getting what you want 
years later and at the other end of acquisition when you are 
ready to put a new technology into the field. As was said by 
Mr. Maurer, the most established and visible S&T role in 
acquisition right now is in testing and evaluation. As a member 
of the DHS acquisition board, our director of operational tests 
and evaluation provides independent inputs into the Department 
acquisition decision-making forums. We are currently engaged 
with 24 programs from across the DHS components that have test 
planning or execution analysis underway. The testing and 
evaluation and standards division in S&T performs oversight of 
all level 1 and non-delegated level 2 acquisitions in the 
Department.
    The third point I would like to make is that S&T is, 
indeed, highly focused on leveraging R&D investments made by 
others, whether they be by the Federal Government or the 
commercial sector or universities. I would be happy to go into 
this further. We have to do this, first of all, because of the 
urgency of the operational needs of DHS which simply can't 
tolerate the typical 10-year life cycle, the time known to be 
required to go from a bench research project to deployment in 
the field. Second, because our budget simply cannot afford to 
be a soup to nuts, R&D generator. We have to leverage 
investments made by the commercial sector and others, and we 
have made many moves to make that a more disciplined and 
universal activity within S&T, which I would be happy to 
describe.
    We have extensive interactions with DOD and other Federal 
agencies to make sure we know what they are doing and can 
garner their technologies as they apply to us. Under Secretary 
Borras and I meet quarterly with Ash Carter in DOD for the 
purpose of reviewing what technologies they have that might be 
relevant to DHS.
    I will say two things often make it difficult to translate 
DOD technologies into DHS operations. One is cost, and second 
is the amount of training required for the technology. But we 
do make use of their technologies in many instances, and I 
would be happy to talk about that in detail. Finally, I am 
compelled to note that the extensive technical expertise and 
the unique understanding of DHS operations which S&T embodies, 
I think, can be powerfully leveraged against our acquisition 
needs.
    Mr. McCaul. Dr. O'Toole, I hate to interrupt you. We have 
been called to vote. We have about 10 minutes before we have to 
get to the floor. If you could maybe wrap up your testimony.
    Dr. O'Toole. Okay. One sentence. It all goes away with the 
House budget. Thank you, Mr. Chairman.
    [The information follows:]
 Prepared Statement of Henry I. Gonzalez on Behalf of the Science and 
                         Technology Directorate
                             July 15, 2011
                              introduction
    Good morning, Chairman McCaul, Ranking Member Keating, and 
distinguished Members of the subcommittee. I am honored to appear 
before you today on behalf of the Department of Homeland Security's 
(DHS) Science and Technology Directorate (S&T) and Under Secretary Tara 
O'Toole. My testimony will focus on the Directorate's role in the 
Department's requirements gathering and acquisition management 
processes, and how these processes leverage existing technology across 
the DHS Components and the rest of the Federal Government including the 
Department of Defense.
    On March 15 of this year, Under Secretary O'Toole appeared before 
the House Committee on Science, Space, and Technology, Subcommittee on 
Technology and Innovation to describe the results of an extensive S&T 
strategic planning process, which are captured in five strategic goals 
and reflected in an organizational realignment which took effect last 
November. Those five strategic goals are:
   Goal No. 1.--Rapidly develop and deliver knowledge, 
        analyses, and innovative solutions that advance the mission of 
        the Department;
   Goal No. 2.--Leverage technical expertise to assist DHS 
        Components' efforts to establish operational requirements and 
        select and acquire needed technologies;
   Goal No. 3.--Strengthen the Homeland Security Enterprise and 
        First Responders' capabilities to protect the homeland and 
        respond to disasters;
   Goal No. 4.--Conduct, catalyze, and survey scientific 
        discoveries and inventions relevant to existing and emerging 
        homeland security challenges; and
   Goal No. 5.--Foster a culture of innovation and learning in 
        S&T and across DHS that addresses challenges with scientific, 
        analytic, and technical rigor.
    In support of goal No. 2, the realignment established the 
Acquisition Support and Operations Analysis Group (ASOA), bringing 
together all of S&T's requirements and acquisition related activities 
under one Director who reports directly to the Under Secretary. ASOA is 
able to leverage S&T's knowledge, expertise, and other technical 
resources across DHS and work closely with the Under Secretary for 
Management to improve the requirements gathering process and 
acquisition support to the components. As the Director of ASOA, I am 
also S&T's Component Acquisition Executive. This provides me with the 
ability to participate in the Acquisition Review Boards of other 
Component programs and represent S&T at these critical decision-making 
forums.
 s&t will be a key player in the department's new requirements process
    Decades of Federal acquisition management shows that a thorough and 
comprehensive requirements process is indispensable to the effective 
and efficient delivery of operational benefits to end users. Before 
significant investment in pursuing a solution, one needs to invest time 
and effort to thoroughly understand the problem and develop detailed 
requirements. When this doesn't happen, the Government may end up with 
solutions that do not meet actual needs, costing more in the long run.
    To maximize the Department's resources, it is critical to have an 
enterprise-level requirements process to provide a top-down framework 
where the most pressing needs can be identified and prioritized. 
Through the leadership of Under Secretary Borras, the Department is 
implementing its Integrated Investment Life Cycle (IILC) Model which 
provides the enterprise-level requirements setting process.
    The IILC includes two key groups: The Department Strategy Council 
and the Strategic Requirements Council. The Department Strategy Council 
brings together components to set strategic, high-level requirements. 
These strategic requirements must then be refined to operational 
concepts that can be implemented.
    The Strategic Requirements Council (SRC) makes trade-off decisions 
between potential solutions. While requirements are being set and 
alternatives are being analyzed, it is critical that technologists work 
closely with operators to come up with viable solutions. In some cases, 
the desired technology may be beyond the state-of-the-art. In those 
cases, S&T may take the project on as a research and development 
effort, and the SRC can elect a more feasible option or opt to hold off 
the acquisition. In other cases, there may be more appropriate 
technologies than initially proposed.
    By being involved across the Department's IILC, S&T will be able to 
assist in developing technically specific and feasible requirements, 
setting the stage for acquisitions that are completed on schedule and 
within budget. Moving S&T into a stronger support role for this ``front 
end'' of acquisition has been a priority for both Under Secretary 
O'Toole and Secretary Napolitano. We look forward to S&T's active 
engagement in the Capabilities and Requirements Council and other 
forums of the Model.
       s&t has on-going efforts across the acquisition life cycle
S&T Provides Support for Requirements Development
    S&T currently assists Components with requirements analysis. The 
first way we have been doing this is through the sponsorship and 
management of the Department's two Federally-funded research and 
development centers: The Homeland Security Studies and Analysis 
Institute (HSSAI) and the Systems Engineering and Development Institute 
(SEDI). These two world-class organizations provide requirements 
analysis support to every DHS Component. For example, between April 
2010 and May 2011, HSSAI issued nearly 50 analytic reports developed 
for four operational Components and three headquarters Components, and 
is currently engaged in four Analyses of Alternatives for three 
operational Components. Similarly, SEDI is providing support to 13 
major acquisition programs\1\ at five operational and three 
headquarters Components.
---------------------------------------------------------------------------
    \1\ The Department defines ``major acquisition programs'' to 
include ``Level 1'' and ``Level 2'' programs. Level 1 and Level 2 
programs are those with over $1 billion and $500 million life cycle 
costs respectively.
---------------------------------------------------------------------------
    The second way S&T assists in the requirements process is by 
working with Components to define S&T research and development 
projects. Over the last few years this process has functioned through 
the Capstone Integrated Product Teams (IPT) process. A refocused 
approach to the IPTs will establish Science and Technology Investment 
Councils (STIC), which elevate participation to the most senior levels 
of our Directorate and of each Component. The goal of these STICs is to 
engage S&T and the Components in a systematic manner regarding their 
critical operational needs, through the creation of new S&T-funded 
projects or by modifying existing projects that will address critical 
needs and underlying technology gaps. The Under Secretary for Science 
and Technology and Component heads will co-chair the STICs and agree on 
their key outputs, namely, approved requirements and corresponding 
research and development projects. The STIC process is being developed 
over the summer and we will have several of the Component STICs in 
place by the end of fall.
    Finally, we provide Components with requirements development 
support at their request. Two specific examples are the Science and 
Technology Operational Research and Enhancement (STORE) project and the 
Tactical Communications (TACCOM) program. STORE, which is a high-
visibility ``Apex'' project,\2\ is conducting detailed operations 
research, evaluating alternative enhanced solutions against dynamic 
threats and fielding actual prototype capabilities for the U.S. Secret 
Service. In the TACCOM program, we are managing a Technology 
Demonstration activity for DHS's U.S. Customs and Border Protection 
(CBP) that will feed real-world data on technology capabilities into an 
analysis of alternatives.
---------------------------------------------------------------------------
    \2\ To meet Components strategic needs, and to provide Component 
leaders with an understanding of S&T capabilities, we have instituted 
``Apex Projects''. Apex Projects must solve a problem of high-level 
operational importance. Best practices learned in these projects will 
be documented and infused through the rest of our activities. In 
addition to the USSS project described, S&T has initiated an Apex 
project with Customs and Border Protection to develop a secure transit 
corridor for goods between Mexico, the United States, and Canada.
---------------------------------------------------------------------------
S&T Provides Support to Components During Acquisitions
    S&T performs a variety of roles in the Department's acquisition 
process. First and most visibly is our statutory Department-wide role 
in test and evaluation.
    Just as a thorough and comprehensive requirements process is 
indispensable to the effective and efficient delivery of operational 
benefits to end users, so is a thorough and comprehensive test and 
evaluation process. Testing and evaluation, although present throughout 
the entire life-cycle of an acquisition, is most critical on the ``back 
end.'' It is the final step before the Department makes significant 
investment into final production and fielding of the acquired system, 
and ensures that the system meets its documented operational 
requirements and provides the required capability. As a member of the 
DHS Acquisition Review Board, S&T's Director of Operational Test and 
Evaluation provides independent inputs into the Department's 
acquisition decision-making forums.
    S&T's Test and Evaluation organization is currently engaged with 24 
programs from across the DHS Components that have Test and Evaluation 
activities underway. This includes development and operational testing 
and program test and evaluation plans. S&T has assessed six Component 
Operational Test and Evaluation activities in the past 12 months that 
are at the final stage of acquisition, and is currently involved in 
three others. S&T's role also includes serving as the Department lead 
for all Test and Evaluation policies and establishing a career ladder 
program for Test and Evaluation professionals.
    Standards also play an important support role in acquisitions. 
Providing standards that can be used by multiple technology vendors to 
develop solutions drives market competition, resulting in improved 
products at lower costs to the Federal Government, first responders, 
and other Homeland Security Enterprise owners and operators. The 
Standards branch is currently engaged in three efforts that support 
acquisitions including biodetection and radiation/nuclear detection.
    S&T also provides acquisition program management expertise to 
Components at their request. This is a new function, and we will be 
expanding our capacity in the months ahead. Currently we are supporting 
CBP on their Automated Commercial Environment (ACE) program where we 
have dedicated a senior systems engineer. Working with the ACE program 
office, our engineer is developing a revised system architecture and 
providing best-practices software development guidance.
 s&t leverages existing technology capabilities from across the united 
                    states and interagency partners
    To ensure that S&T and DHS are leveraging research and development 
from other organizations, S&T created the Research and Development 
Partnerships group as part of its reorganization. The director of this 
group also reports directly to the Under Secretary, and manages offices 
within S&T that reach outside of DHS and oversee a number of joint 
projects and interagency processes to maximize the Federal Government's 
work, along with the work of our international, private sector, and 
university partners.
    In addition to these programs, S&T works closely with the 
Department of Defense (DOD) and the Department of Energy (DOE) on a 
number of partnerships and participates in the Committee on Homeland 
and National Security run by the White House Office of Science and 
Technology Policy. This group and its subcommittees develop interagency 
Research and Development strategies that ensure all organizations 
across the Federal Government are utilizing each other's technology 
efforts.
    While S&T always does a ``horizon scan'' before starting a new 
project, including evaluating DOD efforts, it is rare that DOD and DHS 
mission needs, operating environments, and budget constraints line up 
exactly together. For example, both organizations are concerned about 
Improvised Explosive Devices (IED). However, the IED problem in 
Afghanistan requires very different solutions than those in the United 
States. To continue the example, front-line law enforcement in the 
United States cannot use wireless jammers in the middle of a city as 
DOD has done in Afghanistan. On the other hand, we may be able to 
collaborate on updated handheld devices that detect homemade 
explosives.
                               conclusion
    DHS is the third-largest Federal agency with an extremely diverse 
operational portfolio. It is vital that the Department builds and 
maintains a comprehensive requirements and acquisition process with 
proper due diligence and strategic execution. At the same time, our 
requirements and acquisition process must be flexible and adaptable to 
constantly changing threats and operational needs.
    One of the keys to the Department's path forward is through a 
stronger integration of S&T into the requirements and acquisition 
processes. The continued implementation of Under Secretary O'Toole's 
strategic goals and demonstrated partnership with DHS's Under Secretary 
for Management shows a clear path of transformation and progress.
    Thank you for inviting me to appear before you today. I look 
forward to answering your questions and to working with you on S&T's 
requirements gathering and acquisition management processes.

    Mr. McCaul. The Chairman now recognizes himself for 5 
minutes. As I mentioned in my testimony, just, I think very 
disturbingly yesterday, The Washington Post reported that DHS 
plans to spend millions on troubled radiation detectors, and I 
want to focus on that if I can. It basically says the 
Department of Homeland Security plans to spend more than $300 
million over the next 4 years on radiation detection equipment 
that has not been fully tested and may not work. This is 
according to the budget request and report by the Government 
Accountability Office. That is very concerning to me. We are 
talking about detecting radiation. This is nuclear threats 
against the United States in its homeland, dirty bombs perhaps 
in the homeland. Mr. Maurer and Mr. Edwards, can you tell me, 
particularly Mr. Maurer at GAO, tell me what the concern was 
with this finding?
    Mr. Maurer. Mr. Chairman, we have done a lot of work over 
the past several years looking at the ASP program. It has been 
trouble from pretty much Day 1. There are a number of concerns 
about the program's inability to clearly meet requirements, 
come up with a clear cost estimate, have good time frames for 
how long it's going to take before it is finally deployed. It 
is also not clear whether the new technology is actually better 
than existing technology that's already deployed on the 
borders.
    Some of our prior works also highlighted problems with the 
testing that has been done so far with the program, as well as 
coordination between DNDO and CBP, the offices within DHS that 
are actually developing the technology and the actual end user 
of the technology. So the bottom is it has been a sick program 
from Day 1.
    Mr. McCaul. Mr. Edwards, very succinctly.
    Mr. Edwards. We haven't looked at it because GAO was 
looking at it. I concur with my colleague from GAO. We plan on 
looking at this in our fiscal year 2012 plan.
    Mr. McCaul. Dr. O'Toole, I want to give you a chance to 
respond to this allegation in The Washington Post that these 
systems may not work and that we are spending millions of 
dollars on that. Can you respond?
    Dr. O'Toole. Thank you, Mr. Chairman. Yes. This is not a 
program run by S&T. This is a DNDO program, but I appreciate 
the opportunity. One, The Washington Post article is very 
misleading. There has been lots of testing of the ASP, as GAO 
suggests. What hasn't been done is operational testing which is 
the very last stage before you actually go in for a procurement 
and try and buy something. The reason there hasn't been 
operational testing even scheduled was because we don't think 
we are going to procure this. The ASP program is one of these 
technologies where we are pushing the envelope of physics, so 
it hasn't worked as well as we had hoped.
    That is true. I take no issue with what GAO just said. But 
we are buying a few of these machines to put in the field to 
try and understand why they don't work and if they might be 
incrementally improved. Understand, the problem now is that we 
are getting as many as 300 hits in a single port per day on 
containers that look like they might have radioactive material 
in them. Right now, our only option is to unpack each container 
or go around it with a hand-held device--these are big 
containers about the size of the curtain behind you--and try 
and see if we can detect radioactive materials, which we think 
is an unsatisfactory set of options. So ASP----
    Mr. McCaul. Again, I have to move quickly because of votes 
on the floor. But thank you for your testimony. Let me just 
bring up another point. Mr. Maurer, you mentioned TSA lacks an 
overall plan and they have spent, it is $8 billion that we are 
looking at. Can you explain what you mean by they lack an 
overall plan?
    Mr. Maurer. Sure. Right now TSA has explosive detection 
technology deployed at airports that meet two standards. Some 
meet standards that were set in 1998. Others meet standards 
that were set in 2005. Their long-term plan is to meet more 
stringent standards that were set just last year. The work that 
we conducted found that there is no overall strategic plan at 
TSA to determine how long it is going to take to roll out the 
new technology, in other words, update existing systems as well 
as procure new systems that can meet the requirements that were 
set last year.
    Mr. McCaul. That is something I look forward to working 
with you on in the future as well. Let me just conclude by 
saying that I have had numerous, in the private sector, 
numerous companies come to me and say they just can't get 
access to the Department of Homeland Security. They can't get a 
meeting to talk about their technologies. One company in 
particular, you know, does holographic maps for the troops in 
Afghanistan, has contracts with the DOD, proven technology. 
Border Patrol likes these maps. They have seen them. They have 
requested the Department look at these maps. Yet they can't get 
a meeting with the Department of Homeland Security. I have sent 
three letters asking for this meeting over the last several 
months, and I have not had a response. I would hope that the 
Department would be a little more responsive, not only to me, 
but more importantly, to the private sector in looking at new 
technologies that could make a difference. With that, I 
recognize the Ranking Member.
    Mr. Keating. Thank you, Mr. Chairman. I would just like to 
follow up because I am concerned in this respect. It sounds 
like implementing an integrated investment lifestyle model and 
putting an emphasis on the front end and the back end seems 
like a better approach than has been implemented. Now, my 
concern is this: The House-passed budget slashed in half S&T's 
money and took a huge cut out of management. Sometimes when you 
are trying to cut money, you can cost more in the long run. I 
want to ask you, on two sides, No. 1, internally on the 
management side, how--and anyone can comment on this, how that 
would compromise, that level of cut would compromise your 
ability to do the management changes that you talked about that 
are necessary. No. 2, and importantly so, and I think it 
dovetails to what the Chairman said, with these cuts and the 
inability to, I think, initiate some of those things, how can 
the private sector companies work successfully with you? Is 
that going to be compromised by these cuts as well? Anyone can 
jump in.
    Mr. Borras. I will be happy to respond to that. Mr. 
Keating, the proposed cuts would have a significant, if not 
drastic impact on the management directorate's ability to do 
its job, particularly in acquisition. The planned reduction of 
an approximately 70 percent could result, if enacted, 
approximately half of the staff that currently now sits in the 
management directorate having to be laid off. So it has a 
tremendous impact on resources. It has an impact on our ability 
to redirect our resources to areas that are in harmony with the 
direction that we are taking.
    For example, we have proposed a very comprehensive 
strategic plan, specifically around 150 positions where we need 
to strengthen the acquisition work force. These are program 
managers, these are cost estimators. These are schedulers. It 
is a modest $24 million expense and that alone is a significant 
blow to our ability to improve the ability to be able to 
provide good cost, up-front cost estimating, to be able to 
better plan and understand the life cycle cost of these 
programs. Plus, all of the additional oversight that we have in 
place would be severely jeopardized.
    Mr. Keating. Dr. O'Toole, you've been asked to do more 
under the revisions that Mr. Borras has talked about. How can 
you do that? What, and if I get a chance, with the roll call 
running up, I am going to ask each of you could this kind of 
cut actually cost more money in trying to improve the 
acquisition process.
    Dr. O'Toole. Yes, I think it certainly will, particularly 
over a period of 2 to 5 to 10 years. The cut in S&T is very 
dire. It is actually 80 percent of our R&D budget once we get 
finished keeping the lights on at the laboratories and other 
mandated activities, for example. We would spend what was left 
on the R&D budget basically shutting down test beds that we 
have already invested money in. When you make the budget for 
R&D go up and down, you lose all of your sunk costs, because 
R&D projects generally play out over a number of years.
    So it not only will cost money in the future, but wastes 
money already invested. It will also basically freeze DHS 
capabilities in place because we will not be developing new 
technology, either internally or with the commercial sector. 
Happy to work with you, Mr. Chairman, in getting you a response 
to your letter. Although I will say we are a lot smaller than 
the commercial sector and they think we are a lot bigger than 
we actually are so they get frustrated, not just with the plug 
in, which I think we have tried to make much more user 
friendly, but we just don't have the resources to pursue every 
good idea. If this budget goes through, or anything close to 
the House mark, we will stop doing R&D and most of our very 
good people will find other employment. These are the folks in 
this economy who actually have job options. These are really 
good engineers and scientists and they want to do R&D. If I 
tell them they are not doing R&D, they are not there to work on 
acquisition.
    Mr. Keating. Thank you. I am noticing we have 1 minute and 
11 seconds to get to the building. So thank you.
    Mr. McCaul. We are going to have to run very fast. But I 
want to thank the witnesses for your valuable testimony. I 
think we have an hour and a half worth of votes, so we are 
going to stand in recess. I am going to go ahead and dismiss 
this panel. We will come back in an hour and a half with the 
second panel. If any other Members have questions they will 
submit them for the record. I would ask that you respond. Thank 
you so much.
    [Recess.]
    Mr. McCaul. The committee will come to order. I understand 
we had a conversation on the Red Sox that delayed the beginning 
of this hearing. I want to thank the witnesses for your 
patience. I know it was a long series of votes, but we look 
forward to hearing your testimony. I am sorry that we lost our 
audience, but this will be a part of the record forever. Thanks 
again for being here.
    I want to introduce first Jim Williams, who serves as a 
Vice Chair for TechAmerica's Homeland Security Committee, and 
is also the Senior Vice President of Global Professional 
Services. Previously Mr. Williams spent over 30 years working 
in the Federal Government retiring as the Commissioner of 
General Services Administration Federal Acquisition Service. 
That is quite a mouthful. Mr. Williams is also the Director of 
the U.S. Visitor and Immigrant Status Indicator Technology 
Program, otherwise known as U.S. VISIT at the Department of 
Homeland Security.
    Thank you so much for being here.
    Marc Pearl has served as President and CEO of the Homeland 
Security and Defense Business Council since March 2008. Prior 
to joining the council, Marc was a Principal and Chairman of IT 
Policy Solutions, which he founded to counsel private sector 
organizations in meeting their public policy challenges. He 
also served as a Chief of Staff and Legislative Counsel to U.S. 
Representative Dan Glickman.
    Finally, Scott Amey began working at the Project for 
Government Oversight in the mid-1990s as a research assistant 
and returned to the organization in 2003 to direct its contract 
oversight investigations. His work includes reviews of Federal 
spending on goods and services, the responsibility of the top 
Federal contractors and conflicts of interest and ethics 
concerns. He previously clerked for the Honorable James Kenney, 
III at the Court of Special Appeals in Maryland.
    The Chairman now recognizes Mr. Williams for his testimony.

 STATEMENT OF JAMES A. WILLIAMS, VICE CHAIR, HOMELAND SECURITY 
                     COMMITTEE, TECHAMERICA

    Mr. Williams. Thank you Chairman McCaul and Ranking Member 
Keating. Thank you for providing TechAmerica the opportunity to 
present the tech industry's views on integrating emerging 
technologies and the contracting process at the Department of 
Homeland Security. Thank you for including my written statement 
as part of the record.
    TechAmerica represents approximately 1,000 member companies 
of all sizes from the public and commercial sectors of the 
economy and is the industry's largest advocacy organization, 
and our member companies provide the bulk of contract services 
at DHS. TechAmerica believes the Department can improve their 
process and better meet their mission. The challenges the 
Department faces are not wholly related to staffing or funding. 
It is our belief that this is primarily a communications 
challenge. We believe these recommendations will provide 
benefits to DHS that can also help DHS's partners in the 
homeland security mission at the State, local, Tribal, 
international, and private sector levels.
    DHS would benefit from increased and on-going industry 
engagement throughout the acquisition process because early and 
frequent dialogue serves to introduce new cost-effective 
capabilities and technologies to the Government and can be 
critical to a mission's success.
    First, TechAmerica fully endorses the OFPP Myth-Busting 
memorandum on open communications issued as part of the 25-
Point Plan. The 25-Point Plan also established a requirement to 
submit a draft vendor communications plan by June 30 to OMB for 
review. TechAmerica with its member companies that do business 
with public sectors around the world would be glad to offer 
best practices suggestions on DHS's draft plan.
    Second, RFIs and Industry Days provide important 
opportunities for industry to understand DHS's needs and new 
initiatives and allow industry to research the market for 
technological or services solutions and team with small 
businesses early in the process. More use of Industry Days with 
as much detail as possible about mission goals and requirements 
done early in the process will also allow for better one-on-one 
discussions with better qualified potential bidders.
    Another important area for successful program 
implementation is end-user involvement in the acquisition 
process. A system that is planned, designed, acquired, tested, 
and implemented without continued engagement with the end users 
provides too many opportunities for surprise, disappointment, 
and failure. Government can do a better job of developing 
requirements and linking them back to Government processes and 
mission goals.
    TechAmerica believes it is important to engage industry in 
proactive and collaborative ways throughout the requirements 
development process. Trade associations like TechAmerica are 
beneficial sounding boards and should be used more, yet it has 
become more difficult to get approval from the Department for 
key senior representatives to participate in industry dialogues 
with TechAmerica or of this sort.
    TechAmerica does support the efforts of the DHS Chief 
Procurement Officer, Dr. Nick Nayak under the leadership of 
Under Secretary Rafael Borras to implement these communications 
improvements. But both Government and industry must come 
together with knowledge of each party's needs and processes. To 
develop and improve this understanding, we encourage DHS to 
create a program manager track that allows the education of 
acquisition personnel and decision-makers of the common 
challenges and issues regarding Government contracting.
    DHS should use senior-level speakers from TechAmerica, as 
the Department of Defense has done so in their senior-level 
classes over the past 20 years. The use of down select speeds 
the acquisition process, results in a smaller number and higher 
quality proposals in the end, encourages competition and 
teaming and provides for lower risk when used with fly-before-
you-buy testing on multiple solutions.
    Using pilot programs more will also, when done properly, 
allow the opportunity to test new processes and solutions, 
attract nontraditional suppliers, better understand program 
costs and speed delivery of needed solutions in the face of 
critical and evolving threats. The key to increase use of pilot 
programs is Departmental leadership and support.
    Finally, DHS must commit to an effective safety act 
implementation by improved integration with homeland security, 
technology acquisition practices, including expediting 
technical evaluations of safety act applications relating to 
products and services procured by DHS and other Federal 
Government entities.
    In conclusion, the challenges we face in leveraging 
emerging technologies is a question of process, not of people. 
The people at DHS are doing great work and service to our 
country and industry has many people that share that mission.
    Thank you for allowing TechAmerica to present its views.
    [The statement of Mr. Williams follows:]
                Prepared Statement of James A. Williams
                             July 15, 2011
    Good morning, Chairman McCaul, Ranking Member Keating, and Members 
of the subcommittee. My name is Jim Williams, and I am Vice Chair of 
TechAmerica's Homeland Security Committee. Thank you for providing 
TechAmerica the opportunity to present the technology industry's views 
on the contracting process at the Department of Homeland Security (DHS) 
and the opportunities to leverage emerging technologies. Technology and 
the services TechAmerica's companies offer play a critical role in all 
aspects of the DHS mission. From the detection and prevention of 
terrorism, protection of America's borders and interior, providing 
resiliency after disasters, to ensuring integrity in our immigration 
laws, TechAmerica's companies are focused on being part of the 
solution. As the threats continue to evolve, it is vital that the more 
than 230,000 employees of DHS have the modern technological tools and 
the best procurement methods to face these challenges.
    The role of DHS at the top of the homeland security pyramid is also 
critical to the homeland security needs of State, local, Tribal, 
private sector, and international partners. Improvements in DHS's 
capabilities can be used by these other partners as part of a layered 
strategy for meeting the homeland security mission. The more DHS 
combines its acquisition buying power with that of their partners, the 
more precious dollars are leveraged to provide greater mission 
accomplishment. Thus, any improvements to the acquisition of better 
technologies and methods within DHS can have far-reaching positive 
impacts.
    TechAmerica is the leading voice for the U.S. technology industry, 
which is the driving force behind productivity, growth, and jobs 
creation in the United States and the foundation of the global 
innovation economy. Representing approximately 1,000 member companies 
of all sizes from the public and commercial sectors of the economy, it 
is the industry's largest advocacy organization. TechAmerica member 
companies provide the bulk of contracted-out services at DHS. The 
Association is also the technology industry's only grassroots-to-global 
advocacy network, with offices in State capitals around the United 
States and in Washington, DC, Europe (Brussels), and Asia (Beijing). 
TechAmerica was formed by the merger of AeA (formerly the American 
Electronics Association), the Cyber Security Industry Alliance (CSIA), 
the Information Technology Association of America (ITAA) and the 
Government Electronics & Information Technology Association (GEIA).
    TechAmerica's extensive track record of addressing issues related 
to Government contracting and procurement is well known, and we 
continue to maintain a healthy program specifically focused on this 
important area. Our Homeland Security Committee meets monthly to 
discuss developments in this space, and senior executives from the 
Government are always featured as our guest speakers. We are also 
highly active within the National Defense University and Defense 
Acquisition University systems where executives from our member 
companies are invited to provide presentations on the industry 
perspective of the Government contracting process. TechAmerica has 
conducted this program for the better part of 20 years, and we believe 
the frank and open dialogue that takes place at these sessions is one 
factor that has led to improved procurements across the Federal 
Government.
    Today's hearing provides for an important moment to examine and 
reflect on the current contracting process at DHS and an opportunity to 
investigate new methods and modifications to that process to speed the 
adoption of technologies critical to the advancement of the 
Department's mission. TechAmerica and its member companies look forward 
to further discussions about how to best advance the Government 
contracting and procurement process and the issues I will outline 
today.
                     difficulty of the dhs mission
    The mission DHS is charged with is broad in scope, to secure and 
protect the American people across nearly 7,000 miles of land border 
and along 95,000 miles of maritime border. We have great respect for 
the work that all DHS employees do every day on behalf of our Nation. 
In the early years of the Department, focus was largely directed to 
physical threats. However, in the 10 years since 9/11, the 
preponderance and sophistication of cyber attacks on the homeland has 
stretched the Department's resources and threat environment. America's 
enemies are evolving and quickly adopting new technologies with 
increased coordination and sophistication. We believe it is critical 
then that the methods and technologies we utilize to face these threats 
keep pace or surpass those of our adversaries.
    Today DHS receives approximately 700 proposals annually in response 
to requests for new technology or technology services. TechAmerica 
believes there are a number of ways that the agency can improve the 
process and better meet their mission. This is not wholly a staffing or 
funding problem; it is our belief that this is ultimately a 
communication challenge. The communications challenges occur between 
the private sector and the Department and internally within DHS. From 
our perspective, it appears that too frequently DHS components do not 
know what the larger Department is doing, which leads to redundant 
efforts, slows the pace of technology adoption, and can be wasteful of 
precious funding.
                          industry engagement
    TechAmerica fully endorses the OFPP Memorandum dated February 2, 
2011, titled, ``Myth-Busting: Memo to Agency Chief Information Officers 
and Chief Acquisition Officers,'' regarding the benefits of more open 
communications with the private sector. Enhanced engagement was one of 
the five key elements of OMB's 25-Point Plan to Reform Information 
Technology Acquisition and Management. TechAmerica Foundation, in its 
GTO-21 Commission Report,\1\ called for enhanced internal and external 
engagement. This call laid the foundation for the 25-Point Plan, of 
which more engagement and communication was an essential tenet.
---------------------------------------------------------------------------
    \1\ TechAmerica Foundation, Government in Technology Opportunity in 
the 21st Century (GTO-21) (2010), http://www.techamerica.org/Docs/
GTO_21.pdf.
---------------------------------------------------------------------------
    DHS must be more engaged with industry, especially at the earliest 
stages of the procurement process. This must be an on-going 
conversation where both sides share their needs and constraints and 
work together to identify technological solutions. Early and on-going 
dialogue serves to introduce new capabilities and technologies to the 
Government buyer and is critical to mission success.
    Requests for Information (RFIs), provide an important opportunity 
for industry to understand the needs of the agency, begin to research 
the market for technological and/or services solutions to the challenge 
and prepare internally as a potential bidder. Industry days can provide 
important opportunities for the Government to share some substance of 
new initiative. It is important, however, that industry day events not 
only provide as much detail as possible about requirements, but also be 
timed far enough in advance so that Government and industry can follow-
up in one-on-one discussions to take what is learned at the event and 
develop it into a successful acquisition strategy.
    Industry plays a crucial partnership role with DHS in support of 
their mission. The technology sector represents thousands of citizens 
who take pride in their work and the safety that the technologies they 
build and deploy can provide to all Americans. The more industry and 
Government can work together as informed partners, the better the 
results will be for all. It should be a goal of the contracting process 
to match the needs of particular DHS mission requirements with the best 
value solutions and services that technology companies can offer to 
meet these needs in the most effective and efficient manner.
    Another opportunity for engagement with industry is with trade 
associations like TechAmerica. We meet monthly in an effort to hear 
from senior DHS representatives to discuss how industry can best 
address the ever-changing challenges in providing the technologies 
necessary for carrying out the mission of DHS. But, it has become 
increasingly difficult to get approval from the Department for key 
senior representatives to participate in industry dialogue of this 
sort. TechAmerica believes these conversations inform the decision-
making process not only of industry as we work to align our resources, 
but also informs Government of the constraints of industry. DHS should 
not be constrained from this important line of communication.
    The ``25-Point Plan'' established a requirement to submit a draft 
Vendor Communications Plan by June 30, 2011 for OMB Review. Hopefully, 
this practice will help spread best practices across all departments 
and agencies. TechAmerica, with its member companies that do business 
with public sectors around the world, would be glad to offer best 
practices suggestions on DHS or any agency's draft plans. Finally, on 
the engagement and procurement fronts, TechAmerica is very supportive 
of the efforts of the DHS Chief Procurement Officer, Dr. Nick Nayak. 
His efforts, under the leadership of Under Secretary Rafael Borras, are 
committed to helping the Department build the best possible procurement 
practices into its operational structure. Under this effort the 
Department has held quarterly meetings with the Top 25 contractors to 
the Department. However, these meetings could have more impact if the 
group was expanded to include contractors not in the Top 25.
                          end-user involvement
    A successful program implementation must incorporate end-users in 
the acquisition process. A system that is planned, designed, acquired, 
tested, and implemented without on-going engagement with the end-users 
provides for too many opportunities for surprise, disappointment, and 
failure. Cognizance of internal processes and staff practices must be 
accounted for early in the requirements process. Bringing together end-
users, program managers, acquisition professionals, and industry in 
face-to-face settings, will afford the opportunity to match the true 
needs or goals of the Department with what is available from industry. 
This type of planning and engagement with the end-user can shorten 
acquisition times and can improve the synchronization of agency needs 
with industry solutions. This recommendation for the Department is 
applicable to the requirements development process, but is equally 
appropriate for all parts of an eventual procurement request, including 
the proposal instructions, evaluation criteria, and terms and 
conditions negotiations.
    Moreover, providing timely and valuable communications with 
industry throughout the acquisition process in terms of answers to 
industry questions, as soon as possible, and understanding the status 
of acquisitions will benefit all parties.
                   building the acquisition workforce
    To improve the contracting process, both industry and Government 
must understand each party's needs and background.\2\ To develop and 
improve this understanding we encourage DHS to create a program manager 
career track to educate decision makers of the common challenges and 
issues regarding Government contracting.
---------------------------------------------------------------------------
    \2\ TechAmerica, TechAmerica's Twenty-First Annual Survey of 
Federal Chief Information Officers: Leveraging Technology to Improve 
the Performance of the Government, (2011) http://www.techamerica.org/
Docs/fileManager.cfm?f=2011_cio_survey.pdf.
---------------------------------------------------------------------------
    For the last 20 years, TechAmerica has provided senior executive 
level speakers to present an industry perspective of procurement at 
Defense Acquisition University and National Defense University classes 
throughout the country. The presentation provides students with the 
industry perspective of the contracting process and how each step of 
the process affects a corporate actor's culture and workflow. 
Specifically, students get detail on how industry must create a 
business case and what influences whether a company bids on a specific 
program or not, and how we forecast the allocation of our resources to 
ready implementation. Further, it is an opportunity for our speakers to 
learn more about Government structure and the decision-making process. 
We recommend that DHS incorporate a similar curriculum element in its 
acquisition training requirements to provide program managers with an 
opportunity to learn more about the industry decision-making 
perspective.
                 contracts management and coordination
    DHS would benefit from a streamlined contracts management process 
and better coordination across divisions. There are opportunities for 
DHS to increase their efficiencies in the contracting process including 
increased use of ``down select'' contract selection, better timing of 
requests for information and better use of existing past-performance 
databases to aid the selection process for DHS.
Increased Use of ``Down Select''
    The use of ``down select'' speeds the process of procurement, 
lowers the cost to industry of participating in the proposal process 
and encourages competition and teaming. As a key part of the 
acquisition strategy, the Department recently conducted procurements 
where an initial review of qualifications and proposals from vendors 
allowed them to ``down select'' to a smaller pool of qualified 
competitors. The most recent example of this is Customs and Border 
Protection's Mobile Surveillance Capability. This strategy allows the 
Department to select two or more solutions that can be more thoroughly 
tested in the field before either down selecting to a single contractor 
or maintaining the option to take two or more solutions into 
production. This approach reduces risk to the Government through a 
``fly before buy'' trial period, allows for the refinement of the 
requirements and allows more participation by industry which creates 
greater incentive for industry to invest than under a winner-take-all 
approach.
    However, just using the ``down select process'' anywhere in the 
acquisition process to narrow the field will result in higher quality 
of proposals in the end and offer more opportunities to engage and 
communicate with a smaller number of bidders.
Better Contract Structure
    One example is to set the page limit for a bid higher. Recently, 
DHS put out a call for proposals with a 30-page limit. With such a low 
page limit, DHS was forced to sift through many more proposals than 
necessary and re-purpose an already thin staff away from other 
projects. Thirty pages is not enough for a company to sufficiently 
describe its capabilities and solution for addressing DHS's need. More 
detailed requirements would ensure responses are compliant and deliver 
needed solutions.
    Furthermore, this process did not encourage industry to participate 
in an effective way. Understanding what the Department or its 
components can do to encourage teaming can help improve the quality of 
the bids, help focus small business participation and help to 
streamline communication with a smaller number of bidders.
Contractor Workforce
    The Department must also take into account the impact of their 
requests on the private sector workforce. A recent DHS program set an 
award date for April 2012 and required designations of key personnel in 
the proposal. A requirement of this kind, forecast this far out in the 
future, is extremely difficult if not impossible for industry to meet. 
To set aside personnel for a potential project a year from now puts 
industry in the difficult, costly, and potentially career-damaging 
position of long-term personnel guessing exercises.
    TechAmerica would also recommend that the Department and its 
components leverage existing acquisition vehicles where it makes sense 
to best allocate both Government's and industry's scarce acquisition 
resources and lower the Government's costs. These efforts could be 
formalized in a ``Best Practices'' guide for contracting to be shared 
across all components.
                    requirements development process
    Government can do a better job of developing requirements and 
linking them back to Government processes and mission goals. More RFIs 
would give industry a better idea of the end-user needs and allow DHS 
to better structure and refine their Requests for Proposals (RFPs) to 
allow for more innovative, best value solutions. As an example, 
TechAmerica would point to the technique used at the Department of 
Veterans Affairs whereby industry is brought in to meet with IT 
professionals. Through these exchanges, the needs of the end-user can 
be more clearly defined and translated into the IT requirements.
    TechAmerica believes it is important to engage industry in 
proactive ways throughout the requirements process. Providing drafts, 
hosting industry days, and showing future plans with as much detail as 
possible can help industry to coordinate and meet the mission of DHS. 
We see our relationship as partners and are committed to the success of 
their mission. Threats evolve fast and technology evolves faster, 
making it critical that industry and Government are in sync.
            integrating a formal systems acquisition process
    The Department of Homeland Security would benefit from a formalized 
systems acquisition process. Government has historically utilized long-
term contracting to procure goods and services, however, in information 
technology, a procurement process based in agile development yields 
incremental capabilities faster with greater returns on investment. 
Technology is an evolving resource and upgrades and enhancements come 
rapidly. The adoption of an agile procurement process would permit 
Government to more rapidly deploy modular technologies and revisions 
rather than large-scale programs that have greater cost of money and 
time before mission success can be evaluated.
                         use of pilot programs
    DHS does not use pilot programs enough. Legislation allows for the 
Department to take advantage of the use of pilots. The use of pilot 
programs allows an agency to try new approaches and obtain waivers from 
most statutory and regulatory structures which appear to add 
inefficiencies and costs to mission accomplishment. Pilots, done 
properly, allow the opportunity to test new processes; introduce 
commercial solutions; attract non-traditional suppliers; and speed 
delivery of needed solutions in the face of critical threats. The key 
to increased use of pilot programs is leadership within the Department. 
Leadership must promote and support pilot programs and provide top 
cover in the event the pilot doesn't deliver the expected outcome.
                       keep the safety act viable
    The Federal Government, and DHS in particular, must improve the 
integration of the SAFETY Act's risk management and liability 
protection provisions with homeland security technology acquisition 
practices.
    Congress passed the SAFETY Act, part of the Homeland Security Act 
of 2002, to address the potential risk exposure for companies supplying 
anti-terrorism technologies. The SAFETY Act program has been 
operational since 2004, but DHS has yet to effectively integrate the 
SAFETY Act with its anti-terrorism technology procurement activities.
    The DHS acquisition process and the SAFETY Act review process must 
be aligned, including expediting technical evaluations of SAFETY Act 
applications relating to products and services procured by DHS and 
other Federal Government entities. Addressing liability considerations 
at the forefront of technology acquisition activities will yield 
greater competition in, and better results for, investments in homeland 
security technologies.
    DHS should improve efforts to educate Federal contracting officials 
regarding the SAFETY Act and the SAFETY Act-related changes to the 
Federal Acquisition Regulation (``FAR'') that were effective February 
17, 2009. FAR subpart 50.200 implements the SAFETY Act's liability 
protections to promote development and use of anti-terrorism 
technologies.
    DHS should update and publish its agency-specific procurement 
regulations and procurement procedures in light of the FAR SAFETY Act 
provisions so that other Federal agencies may implement corresponding 
updates to their respective procurement regulations and practices.
    Federal contracting officials should be instructed to ensure that 
SAFETY Act considerations are included among the procurement checklists 
that contracting officers must complete for technology procurements.
    Federal program managers as well as contracting officers should 
consider whether requesting a SAFETY Act Pre-Qualification Designation 
Notice (as provided in the FAR) would enhance competition with respect 
to particular homeland security technology procurements.
    DHS leadership must demonstrate focus and commitment to effective 
SAFETY Act implementation by improved integration with homeland 
security technology acquisition practices.
                               conclusion
    The people of DHS are doing great work in service of their country. 
Industry also has many people and companies that share this mission and 
seek to improve our partnership and communication to better accomplish 
this mission. The challenges we face in leveraging emerging 
technologies is more a question of process, not of people.
    I would like to once again thank the committee for allowing 
TechAmerica to share its views, but more importantly, for focusing this 
hearing on the important need for improving the contracting process in 
order to ensure that most up-to-date technology is utilized in order to 
support the mission of DHS and secure our Nation. TechAmerica and our 
member companies look forward to continuing to work with you on this 
important issue. Thank you and I would be glad to answer any questions 
that you may have.

    Mr. McCaul. Thank you, Mr. Williams. The Chairman now 
recognizes Mr. Pearl to testify.

    STATEMENT OF MARC A. PEARL, PRESIDENT AND CEO, HOMELAND 
              SECURITY & DEFENSE BUSINESS COUNCIL

    Mr. Pearl. Thank you, Mr. Chairman and Ranking Member 
Keating. I want to thank you for giving the Council an 
opportunity to testify before you today.
    Our organization, as you well know, consists of the leading 
providers of homeland security solutions for our Nation. Our 
major purpose is to facilitate a substantive dialogue between 
industry and Government on critical homeland security issues 
and to ensure that the private sector's perspectives, 
innovation, expertise, and capabilities are maximized in 
securing our Nation.
    In addition to my full written testimony, I would ask that 
the Council's principles on Federal contracting and 
procurement, which we conducted a couple years ago as a part of 
a major survey, be made part of this record.
    My testimony today focuses on providing you with our 
collective industry's perspective on how DHS and Congress can 
work together more effectively with the private sector to 
improve the homeland security procurement and acquisition 
process. While the challenges associated with contracting and 
procurement are complex, as your opening comments stated, as 
well as the previous panel went into, the Council believes that 
some of the following steps can further improve the processes 
and procedures leading to our shared goals and mission, which 
is mission success.
    Three things. The Department needs to develop a long-term 
acquisition strategy. Second, it needs to develop open and 
transparent processes, practices, and procedures that 
facilitate a well-defined contract requirement which will 
generate competition and then provide incentives for the 
private sector to participate in the process. Third, a 
standardized centralized procurement process together with an 
educated workforce capable of planning and executing the 
process.
    First in summary. The first one, the need to develop a 
long-term strategy. Industry serves, as you well know, a vital 
role in providing the technologies, the products, and the 
services, what we call the solutions, in the whole aspect of 
homeland security. DHS needs to operationalize and succeed in 
its mission to in essence bring those in. Industry does not, 
however, have limitless resources to develop to provide those 
homeland security solutions in a void. Particularly, in the 
current economic environment we cannot waste time or money on 
building speculative technologies that we believe should or 
could be incorporated into our Nation's homeland security 
efforts. The development of mid-term and long-term strategic 
acquisition plans would create a more predictable homeland 
security acquisition environment, allowing then the private 
sector to then have the ability to anticipate what the 
Government needs and efficiently martial the resources in order 
to meet them. When companies are given a blueprint of what the 
Government's future needs are, they will have the time to plan 
appropriately, align technology, align financial and personnel 
resources to address those needs.
    Now, we do applaud DHS's announcement this past week on 
acquisition planning forecast system that is intended to 
provide the private sector with some real-time access to the 
DHS forecast of contract opportunities in the near- to the mid-
term, but had that will not satisfy the need for long-term 
strategic acquisition planning.
    Second is with respect to the need to develop early open 
and transparent processes. The DHS, working with industry, must 
better define and calibrate requirements to match mission 
objectives and achieve mission goals. Because the Government 
cannot define those needs in a vacuum or by itself alone, we 
believe strongly that the processes, the practices, and the 
procedures that facilitate early substantive engagement with 
the private sector in an open and transparent manner should be 
developed long before an RFP is initiated. Additionally, as Mr. 
Williams mentioned, DHS should conduct more industry days 
sufficiently in advance of the procurement, not during it or 
when it already knows what it is going to be. RFIs and websites 
such as FedBizOpps could be used much more effectively.
    Last, the need to develop a standardized and centralized 
procurement process. Much progress has been made in the last 
8\1/2\ years, but DHS still needs a stronger, more centralized 
acquisition process that moves away from the current stove-
piped environment. At least 11 unique and potentially 
duplicative procurement processes with limited DHS-wide 
leverage still exists across the agency. A clear DHS-wide 
process, acquisition process, and the use of the same 
communication tools would not only enhance efficiency but would 
provide the needed transparency so that end-users, acquisitions 
and operations officials, and industry could work more 
effectively together.
    In conclusion, I want to reiterate our shared goal, to 
achieve the most successful outcome for all stakeholders 
through a process that is transparent, accountable, timely, 
cost-effective and that encourages competition, innovation and 
investment in the homeland security marketplace. If industry, 
Congress, and DHS all work together to find ways to communicate 
and engage prior to and throughout the procurement process, 
mission success is that much more attainable. I thank you for 
the opportunity. The Council looks forward to working with this 
subcommittee and the entire committee, and I will take any 
questions.
    [The statement of Mr. Pearl follows:]
                  Prepared Statement of Marc A. Pearl
                             July 15, 2011
                              introduction
    Chairman McCaul, Ranking Member Keating, and distinguished Members 
of the subcommittee, I thank you for giving the Homeland Security & 
Defense Business Council an opportunity to appear before you today to 
discuss the important issues that relate to the Department of Homeland 
Security's (DHS) procurement policies and procedures, particularly as 
they relate to developing and deploying emerging technologies, as well 
as the Department's outreach to the private sector.
    I am Marc Pearl, President and CEO of the Council, a non-partisan, 
non-profit organization of the leading homeland security solution 
providers. Collectively, our members employ more than 3 million 
Americans in all 50 States and provide expertise in technology 
development and integration, facility and networks design and 
construction, human capital, financial management, and program 
management. We are honored and proud to work with our country's leaders 
in civilian, defense, and intelligence agencies to advance and achieve 
their strategic initiatives. The purpose of the Council is to 
facilitate two-way substantive dialogue between the private sector and 
Government on critical homeland security issues and to ensure that the 
private sector's perspectives, innovation, expertise, and capabilities 
are maximized in securing our Nation.
    At the outset, the Council wants to express our appreciation to 
this subcommittee and to the full Committee on Homeland Security for 
your continued leadership on the full range of issues associated with 
improving the contracting and procurement process within Government and 
encouraging partnerships and substantive engagement with industry.
    In addition to this written testimony, we would also like to bring 
to the subcommittee's attention two relevant documents that serve to 
further illuminate the Council's perspective. The first is our 
Principles on Federal Contracting and Procurement, developed in late 
2009 after surveying our entire membership, which describes some of the 
challenges surrounding Federal contracting and procurement. We have 
shared this document with Secretary Napolitano and other 
representatives within DHS. The second document was my testimony before 
the House Committee on Science, Space and Technology's Subcommittee on 
Technology and Innovation, in a hearing entitled, ``An Overview of 
Science and Technology Research and Development Programs and Priorities 
to Effectively Protect Homeland Security'' that was held this past 
March. That testimony focused on research and development (R&D) 
programs and recommendations that related to the reorganization of the 
DHS Science & Technology (S&T) Directorate. While the R&D issues in the 
S&T Directorate are not the emphasis of our testimony this morning, we 
are cognizant of the Oversight Subcommittee's deep and abiding interest 
in this issue and how it views its interrelated nature to the 
contracting and procurement issue. It is our understanding that members 
of the subcommittee's staff are aware of this testimony.
    The Council's testimony today will focus on providing the 
subcommittee with our collective industry's perspective on how DHS and 
Congress can work together more effectively with the private sector to 
improve the homeland security procurement and acquisition process. As 
recognized in the April 2011 DHS Office of Inspector General (OIG) 
Report on ``DHS Oversight of Component Acquisition Programs,'' 
acquisitions consume a significant part of the DHS annual budget and 
are fundamental to the Department's ability to accomplish its mission. 
Acquisition management is a complex process that requires an effective 
and efficient acquisition management structure. It begins with the 
identification of a mission need; continues with the development of a 
strategy, process, and a strong organization to fulfill that need; and 
concludes with contract closeout after satisfactorily meeting the 
terms. If any infrastructure component is deficient, the entire process 
is at risk for failure.
    Council members--indeed all providers of homeland security 
solutions for our Nation--together with DHS and Congress, share the 
same goal: To achieve the capabilities needed by DHS for mission 
success through a process that is transparent, accountable, timely, 
cost-effective, and that encourages competition, innovation, and 
investment in the homeland security marketplace. No one wants to see, 
nor can afford, to have time, money, and resources wasted. To reach 
this shared goal, the Council strongly believes that we need to 
concentrate on developing three things:
    (1) A long-term acquisition strategy;
    (2) Open and transparent processes, practices, and procedures that 
        facilitate well-defined contract requirements, generate 
        competition, and provide incentives for the private sector to 
        participate in the process; and
    (3) A strong organization with a standardized and centralized 
        procurement process and a workforce capable of planning and 
        executing the process.
    In addition to sharing the same goal, we each have a role in 
meeting the goal. Congress can provide funding, direction, and 
oversight to the programs and capabilities needed by DHS to achieve its 
mission. If DHS and industry work together, with DHS developing greater 
engagement and communication with industry prior to and throughout the 
entire procurement process, we can leverage already existing 
technology, experience, expertise, and dollars to accomplish that 
shared goal.
    While the challenges associated with contracting and procurement 
are complex, the Council is recommending the following steps that we 
believe will further improve the process, procedures, people and the 
ultimate outcome--mission success:
1. Development of a Mid- to Long-term DHS Strategic Acquisition Plan
    The private sector serves an important role in providing the 
technologies, products, and services--``the solutions''--that DHS needs 
to operationalize its mission. However, industry does not have 
limitless resources to devote to homeland security solutions in a void. 
Particularly in the current economic environment, the private sector 
cannot waste time and money on building speculative technologies that 
they believe ``should'' or ``could'' be incorporated into our Nation's 
homeland security efforts. They want to develop and deliver the 
solutions that the Department and our Nation needs.
    While we do not want to diminish the value of the Quadrennial 
Homeland Security Review (QHSR), the Bottom-Up Review process, and DHS' 
overall 5-year strategic plan, the Council strongly believes that DHS 
must develop a mid- to long-term strategic acquisition plan. The lack 
of a predictable homeland security acquisition environment impedes 
industry's ability to anticipate Government needs and efficiently 
marshal the resources to meet them.
    Such a strategic acquisition plan would indicate the intended 
direction, or change in direction, with programs of record and other 
major, multi-year procurements, as well as identify DHS acquisition 
guiding principles, objectives, and targets. This would give companies 
a blueprint for Government's future needs and the time to plan 
appropriately by aligning financial and personnel resources towards 
addressing those needs.
    In the past week, DHS announced the upcoming release of the 
Acquisition Planning Forecast System, which is intended to provide the 
private sector with real-time access to the DHS forecast of contract 
opportunities. We applaud the development of this tool as a way of 
attempting to address the issue in the near to mid-term. While it does 
not satisfy the larger issue of long-term strategic acquisition 
planning, we recognize it as a step forward in the right direction. Any 
assistance that Congress can provide in guiding the development of a 
long term strategic acquisition plan would go a long way in providing 
the foundation for all interested parties to achieve mission success.
2. Development of Open and Transparent Processes, Practices, and 
        Procedures That Facilitate Well-Defined Contract Requirements, 
        Generate Competition, and Provide Incentives for the Private 
        Sector to Participate in the Process
            A. Engaging the Private Sector Before the Procurement 
                    Process Even Begins Will Result in Well-Defined 
                    Contract Requirements and Better Performance/
                    Results
    The private sector wants to develop the capabilities that 
Government needs to achieve mission success. To accomplish this, the 
Government must provide industry with well-defined contract 
requirements. If the requirements in a procurement contract are vague 
and subject to different interpretations, it increases the potential 
for an increased or lost cost of development, duplication of effort, 
and a resulting product or service that fails to meet the Government's 
expectations.
    Defining the needs in a clear and concise fashion is not a job that 
Government can or should do alone. DHS must develop processes, 
practices, and procedures that facilitate early substantive engagement 
with the private sector in an open and transparent manner long before a 
Request for Proposal (RFP) is initiated. Industry input is essential to 
help define and calibrate requirements to match mission objectives and 
achieve mission goals. The more complex the procurement, the more 
critical the need for an open information exchange. Transparency is 
also necessary to ensure that no one feels that a particular 
technology, product, service, or solution is being highlighted or 
unfairly selected. It also helps in defining the ultimate need. If all 
participants understand and adhere to ``rules of engagement,'' we can 
optimize the input and exchange between the public and private sectors.
    Contracting professionals often have a limited understanding of the 
private industry and limited exposure with the skills, experiences, and 
capabilities of potentially valuable companies. By engaging with the 
private sector prior to beginning the procurement process, DHS 
personnel, for example, can conduct more effective market research and 
gain a greater understanding of existing and emerging technologies, 
learn the appropriate industry terminology and concepts associated with 
the desired service or equipment, identify potential contractors that 
provide the item, and determine the correct scope of the requirements 
that best fit the existing vendor base.
    The Council strongly supports DHS engaging the private sector by 
conducting more Industry Days sufficiently in advance of procurements 
to enable the Government to examine and understand the technology that 
already exists and begin a dialogue that helps define requirements. 
Industry is also encouraged to see the Government issuing more Requests 
for Information (RFIs) on the FedBizOpps website, and hopes this trend 
continues in the future. An RFI provides a mechanism for the Government 
to seek advice and recommendations from the private sector before a RFP 
is issued. It allows the Government to conduct market research to 
identify what kind of products or service solutions are commercially 
available. It asks industry to offer solutions for agency requirements 
or objectives; and facilitates the collection of information about 
companies with the appropriate capabilities, products, experience, and 
expertise. Through this interactive tool, Government and industry can 
have a continuous two-way dialogue that results in requirements that 
are greatly improved from when the RFI was first issued.
    We must stress that the exchange of information with the private 
sector cannot stop at the issuance of a RFP, it must continue 
throughout the entire procurement process, particularly when 
information previously provided has changed. DHS should continue to use 
and further develop acquisition websites that provide information for 
specific identified procurements, definitions of terminology and 
milestones, and regular updates to time schedules, future needs, and 
other previously provided information.
            B. Use of Procurement Vehicles That Generate Competition, 
                    but Still Provide Incentives for the Private Sector 
                    to Participate in the Process
    The Council also stresses the need for procurement vehicles that 
generate competition and provide incentives for the private sector to 
participate in the process. Industry supports the need for competition 
in the contracting process but stresses the need for DHS to balance 
these interests and understand the acquisition from the viewpoint of 
the contractor. Too much and/or too little competition is 
counterproductive.
    One type of procurement vehicle often used by Government is the 
indefinite delivery/indefinite quality (IDIQ) contracts. While these 
types of contracts provide flexibility to the Government, there have 
been problems when the selection criteria are not well-defined or the 
process is too burdensome. The goal must be to ensure that the task 
order vehicle is responsive to both Government and to the client. The 
private sector must have an incentive on the task order. If too many 
companies participate, a company may think they have no chance of being 
awarded the contract and decide it is not worth the time or money to 
participate. On the other side, if too many companies are given task 
orders, it becomes difficult and time-consuming for Government to 
manage the contracts and make good decisions.
    DHS must do a better job of selecting a reasonable number of 
companies to participate in the process so that companies have an 
incentive to compete. This will result in better time management and 
ensure contract outcomes that are in the best interest of Government 
and the private sector.
3. Develop a Strong Organization That Has a Standardized and 
        Centralized Procurement Process and a Workforce Capable of 
        Planning and Executing the Process
            A. Development of a Standardized and Centralized DHS 
                    Acquisition and Procurement Process
    DHS needs a stronger, more centralized acquisition process that 
moves away from the current stovepiped environment. While much progress 
has been made since its creation, DHS still has a long way to go in 
ensuring collaboration, coordination, and communication across the 
agency. Combining almost 2 dozen agencies with different processes and 
cultures to form a new department was guaranteed to create challenges.
    The Council believes that it is critical to establish an operating 
policy that facilitates effective engagement within DHS' components and 
with the private sector. There are at least 11 unique procurement 
processes across the agency with limited DHS-wide leverage. Large 
components run their own processes in different ways and many times 
inconsistently. This can result in duplicative efforts. DHS needs more 
communication internally and with other agencies to effectively 
identify potential technologies that it could leverage in support of 
other missions. These opportunities are often only discovered when the 
private sector brings them to their attention. The development of a 
clear DHS-wide acquisition process and the use of the same 
communication tools would not only enhance efficiency, but would 
provide needed transparency so that end-users, acquisition and 
operations officials, and industry can work together.
    In addition, DHS must also have a strong R&D process and S&T 
Directorate that keeps us ahead of the curve so we can obtain the most 
effective and efficient technologies, services, and solutions that 
address our country's security needs. If we can improve coordination of 
these programs within the procurement and acquisition process, we will 
get even better results. As I mentioned in my introduction, my 
recommendations on these issues are contained in my testimony from 
March 2011 that focused on reorganization of the DHS S&T Directorate. 
While not the focus of my testimony today, I draw your attention to 
those recommendations because the R&D and S&T issues contribute to a 
strong organization and are interrelated to the contracting and 
procurement issue.
            B. Ensure a Workforce Capable of Planning and Executing the 
                    Procurement Process by Increasing the Quantity and 
                    Quality of Public Sector Contracting Personnel
    We urge Congress to recognize and help address the shortage of 
acquisition and procurement staff across the Department. DHS needs the 
ability to increase the number of procurement officers with expertise 
in technology, engineering, and management to accomplish the complex 
operational aspects of oversight and review. Contracting officers must 
be accessible, interactive, and open to sharing concerns and approaches 
for various aspects of a particular procurement. They must also value 
and understand input and substantive dialogue with the private sector 
both pre- and post-award. Such an exchange is particularly valuable at 
a time when procurements have become more complex. To accomplish these 
goals, Congress should support programs that further the development, 
training, and retention of acquisition professionals. This could be 
accomplished, in part, by ensuring continued funding for the 
acquisition ``intern'' program.
    The Council has long advocated, for example, that DHS develop an 
exchange program with the private sector to improve the management 
abilities and technical and professional competencies of its employees. 
A professional exchange program would offer DHS direct insight into the 
philosophy, procedures, and practices of industry. It would provide 
public sector professionals with an opportunity to examine industry 
policies and processes, as well as learn first-hand how industry 
addresses contracting and procurement issues. This would allow DHS to 
interpret the needs of the Department in industry terms. By studying 
the best practices of the industry, Government professionals are able 
to bring new knowledge, understanding, and empathy back into the 
Department to improve its processes. The process would also benefit 
industry, which would gain a better understanding of the unique 
perspective and experience of the DHS professional. Obtaining such 
direct insight and experience is currently unavailable in DHS.
                               conclusion
    As I stated in my introduction, we all share the same goal: To 
achieve the most successful outcome for all stakeholders through a 
process that is transparent, accountable, timely, cost-effective, and 
that encourages competition, innovation, and investment in the homeland 
security marketplace. Today's procurement processes need to be more 
flexible, inclusive, and dynamic to change. The Council and its members 
have worked closely and successfully to nurture a substantive 
relationship with the Management and S&T Directorates to discuss and 
develop innovative solutions to protect our country. But even amidst 
the establishment of these relationships, the business sector, as a 
whole has struggled to comprehend the long-term strategic needs and 
goals of DHS. This has made our long-term investments toward new 
technologies that might become effective solutions, challenging at 
best. Similar to the Federal sector, industry has limited resources to 
devote to developing homeland security solutions in a void. As we have 
already stated, they cannot dedicate resources to building speculative 
technologies--we want to deliver the solutions that DHS and our Nation 
needs.
    We respectfully ask for you to consider, provide guidance and 
continued oversight, and help facilitate the steps we have recommended 
to improve the process and outcome for all stakeholders:
    1. Development of a long-term acquisition strategy;
    2. Development of open and transparent processes, practices, and 
        procedures that facilitate well-defined contract requirements, 
        generate competition, and provide incentives for the private 
        sector to participate in the process; and
    3. Development of a strong organization with a standardized and 
        centralized procurement process and a workforce capable of 
        planning and executing the process.
    While DHS is still a relatively young agency and is still evolving, 
there is no need to constantly reinvent the wheel. There are many best 
practices and lessons learned, (both positive and negative), available 
from other Federal agencies that have decades of experience with 
procurement and acquisitions.
    On behalf of the Homeland Security & Defense Business Council, I 
appreciate the opportunity to provide the collective perspectives of 
industry on the important issues before the subcommittee. The Council 
is willing to provide or facilitate any support, expertise, and input 
you need to ensure that we can all work together to achieve mission 
success.

    Mr. McCaul. Thank you, Mr. Pearl. We look forward to 
working with you as well.
    Mr. Amey is now recognized.

STATEMENT OF SCOTT AMEY, GENERAL COUNSEL, PROJECT ON GOVERNMENT 
                           OVERSIGHT

    Mr. Amey. Thank you. I want to thank Chairman McCaul, 
Ranking Member Keating, and the subcommittee for asking the 
Project On Government Oversight, also known as POGO, to testify 
about issues related to homeland security contracting.
    Throughout its 30-year history POGO has created a niche in 
investigating, exposing, and helping to remedy waste, fraud, 
and abuse in Federal contract spending. We have supported many 
reforms that enhance competition, accountability, and 
oversight. Additionally, we have voiced concern about 
contracting vehicles that place taxpayer dollars at risk. We 
consider our work essential to protecting taxpayers because the 
Government is now spending over $530 billion each year on 
contracts for goods and services.
    DHS's mission is extremely varied and difficult, and must 
protect the President, oceans, borders, airports, and help 
those in need after natural disasters. As a result, DHS has to 
be on the cutting edge of new technologies and services to stay 
at least one step ahead of threats to our Nation, yet it still 
must protect taxpayers and spend money wisely, which raises two 
questions: No. 1, what are we buying? No. 2, how are we buying 
it?
    I will discuss the how first because the numbers are 
relatively positive. DHS spent $13.6 billion on contracts in 
fiscal year 2010, which is down from its peak spending of $16.5 
billion in fiscal year 2006. The purchase of services is 
outpacing goods with approximately $10 billion being spent on 
service contracts. That might raise some concerns for this 
subcommittee as service contracts can be difficult to 
administer and oversee due to the fact that DHS is paying for 
time and hours worked.
    For the most part the agency has awarded contracts under 
competitive procedures. According to Federal procurement data, 
approximately 85 percent of DHS contract dollars, which is 74 
percent of its transactions, were awarded through competitive 
procedures. These numbers have dramatically improved since 
fiscal year 2006 when DHS was awarding competitive contracts 
less than 60 percent of the time.
    Data on the types of contracts utilized is incomplete and 
therefore this subcommittee should consider requesting detailed 
information about the types of contracts being used. This 
subcommittee might also want to inquire about DHS's use of 
other transaction authority, which was raised in this morning's 
comments, especially since that authority is set to expire on 
September 30.
    Hearings have been held and reports have been issued about 
DHS's use of OTs, but many of those are 3 years old. My written 
testimony provides a more detailed summary of concerns that 
POGO has related to OTs, but I will raise the following 
questions that this committee should consider asking:
    Is DHS's other transaction authority still meeting policy 
objectives? Are OTs being used in the right situations? Are 
oversight controls ensuring that OTs are not placing taxpayer 
funds at risk? Where is the latest GAO annual report authorized 
by section 831? With daily advances in technology are the items 
procured under other transaction authority still in use and 
essential in protecting against emerging threats? I would say 
that is probably not even just for OTs, but that is also for 
S&Ts, T&Es.
    So I formed a whole sentence with acronyms. Hopefully I get 
a pat on the back for that.
    Are OTs being converted to FAR-based contracts? Assuming 
that DHS needs other transaction authority, is this 
subcommittee considering alternatives to the annual sunset 
provision?
    More to the point of today's hearing is whether DHS is 
effectively leveraging emerging technologies. From a 
contracting perspective this is a difficult question to answer. 
DHS certainly bought new technologies, but how much safer are 
we? Many years ago I testified before the full Homeland 
Security Committee and stated that DHS was buying infant 
technologies that were unproven and sometimes provided little 
or no benefit to the agency. It is one thing for those programs 
to fail while in their infancy, but it is another for those or 
other troubled programs to do so 10 years later. Any questions 
about DHS's effectiveness might only be answered if and when 
the next disaster or terrorist attack take place.
    A GAO report released yesterday documented that in the past 
DHS technologies were deployed before appropriate testing and 
evaluation was successfully completed, including the deployment 
of technologies that had unreliable performance, including the 
deployment of technologies that included the removal of 101 
airport puffer machines from airports, as well as SBInet now 
being kind of scrapped and reevaluated. Without more 
information and oversight it is nearly impossible to determine 
if DHS is effectively leveraging new technologies that would 
protect the country from emerging threats, and my fear is that 
only time will tell.
    Thank you for inviting me to testify today. I look forward 
to answering any questions that you may have and to working 
with the subcommittee to further explore how DHS contracting 
can be improved.
    [The statement of Mr. Amey follows:]
                    Prepared Statement of Scott Amey
    I want to thank Chairman McCaul, Ranking Member Keating, and the 
subcommittee for asking the Project On Government Oversight (POGO)\1\ 
to testify about issues related to Department of Homeland Security 
contracting. I am Scott Amey, POGO's General Counsel.
---------------------------------------------------------------------------
    \1\ Founded in 1981, POGO is a nonpartisan independent watchdog 
that champions good Government reforms. POGO's investigations into 
corruption, misconduct, and conflicts of interest achieve a more 
effective, accountable, open, and ethical Federal Government. For more 
information about POGO, please visit www.pogo.org.
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    Throughout its 30-year history, POGO has created a niche in 
investigating, exposing, and helping to remedy waste, fraud, and abuse 
in Government contract spending. We have supported many reforms that 
enhance competition, accountability, and oversight. Additionally, we 
have voiced concerns about contracting vehicles that often place 
taxpayer funds at risk, including cost-reimbursable, time and material, 
and labor hour contracts, as well as ``other transaction 
authority.''\2\ Many acquisition reforms were imposed prior to the 
large increase in Federal contract spending (which exceeded $537 
billion in fiscal year 2010), consolidation in the contractor 
community, the large-scale hiring of contractors to perform Government 
services, and increased demands on the acquisition workforce to do more 
with less, which has led to waste, fraud, and abuse. Fallout from the 
War on Terror and Hurricane Katrina also highlight how drastically 
different the Federal Government's contracting landscape is now from 
what it was in past years.
---------------------------------------------------------------------------
    \2\ The Federal Acquisition Streamlining Act of 1994 (FASA) (Public 
Law 103-355), the Federal Acquisition Reform Act of 1996 (FARA) (Public 
Law 104-106), the Services Acquisition Reform Act of 2003 (SARA) 
(Public Law 108-136), and 10 U.S.C.  2371 have removed taxpayer 
protections.
---------------------------------------------------------------------------
    DHS's mission is to prevent terrorist attacks in the United States, 
reduce America's vulnerability to terrorism, and minimize damage from 
terrorism and natural disasters. To fulfill this mission, DHS has a 
vast organizational mandate that ranges from protecting the President 
(U.S. Secret Service), to protecting our oceans (U.S. Coast Guard), to 
protecting our borders (Customs & Border Protection and Immigration & 
Customs Enforcement), to protecting our airports (Transportation 
Security Administration), and to helping every town, city, county, and 
State in relief, recovery, and reconstruction efforts (Federal 
Emergency Management Agency). As a result, DHS has to be on the cutting 
edge of new technologies and services to stay at least one step ahead 
of threats to our Nation. Yet, it still must protect taxpayers and 
spend money wisely.
                           how dhs is buying
    According to Federal contract data, the Department of Homeland 
Security spent $13.6 billion in contracts in fiscal year 2010.\3\ That 
total is less than the agency's peak contract spending total of $16.5 
billion in fiscal year 2006.
---------------------------------------------------------------------------
    \3\ All contracting figures were compiled using USAspending.gov 
unless stated otherwise.
---------------------------------------------------------------------------
    DHS spent $3.2 billion on goods and more than $10 billion on 
services in fiscal year 2010. For the most part, the agency has awarded 
contracts under competitive procedures--according to Federal data, 
approximately 85 percent of DHS contract dollars (and 74 percent of 
contract transactions) were awarded through competitive procedures. 
These numbers have dramatically improved since 2006 when DHS was 
awarding genuinely competitive contracts less than 60 percent of the 
time.
    Data on the type of contracts utilized is more difficult to 
analyze, as much of that data is incomplete. That said, is appears that 
DHS used fixed-price contracts for over $7 billion worth of contracts 
in fiscal year 2010. The data further indicate that nearly $4 billion 
was spent using riskier types of cost-reimbursement and time and 
material contracts that are prone to waste, fraud, and abuse, and 
should be carefully watched.
    ``Other transaction authority'' (OTA) is another risky procurement 
vehicle that should be a concern to this subcommittee, especially since 
that authority is set to expire on September 30, 2011.\4\ Other 
transaction authority is a term commonly used to refer to the authority 
to enter into other transactions (OT) agreements other than contracts, 
grants, or cooperative agreements. OT agreements are customized 
agreements rather than contracts that can be specifically tailored 
based on the Government's needs. The intent was to lure leading-edge 
non-traditional companies that were not doing business with the 
Government.\5\ The inherent problem, however, is that rather than the 
Government controlling what it needs, the OT contractors are placed in 
the powerful position of saying ``here's what we will do for you.''
---------------------------------------------------------------------------
    \4\ Department of Defense and Full-Year Continuing Appropriations 
Act, 2011 (Pub. L. 112-10), Section 1651, April 15, 2011. In 2002, DHS 
received OTA for research and development prototype projects. Homeland 
Security Act of 2002 (Pub. L. 107-296), Section 831, November 25, 2002. 
The Homeland Security Act refers to the authority that the Secretary 
may exercise to carry out research and development projects and 
prototype projects under 10 U.S.C.  2371 and the National Defense 
Authorization Act for Fiscal Year 1994 (Pub. L. 103-160), Section 845, 
November 30, 1993. The authority, initially granted for 5 years, has 
been extended each year, but sunset on September 30, 2011. 6 U.S.C 
391(a). The Transportation Security Administration also has authority 
to enter OT agreements. Aviation and Transportation Act, (Pub. L. 107-
71), Section 101, November 19, 2001; 49 U.S.C.  106(l)(6).
    \5\ Congressional Research Service, ``Other Transaction (OT) 
Authority,'' January 27, 2010, pp. 23-25. http://assets.openers.com/
rpts/RL34760_20100127.pdf (Downloaded July 14, 2011) (Hereinafter Other 
Transaction (OT) Authority).
---------------------------------------------------------------------------
    Other transactions generally are not subject to the Federal laws 
and regulations governing procurement contracts. Therefore, OTA is 
exempt from the usual contracting controls and oversight mechanisms in 
contracting statutes, the Federal Acquisition Regulation (FAR) (in 
particular Truth in Negotiations Act regulations and Cost Accounting 
Standards), Government audits, and Small Business Act requirements for 
small business participation.\6\
---------------------------------------------------------------------------
    \6\ Other Transaction (OT) Authority, pp. 18-22.
---------------------------------------------------------------------------
    The Congressional Research Service has voiced several concerns 
about the use of OTs:

``The nature of other transaction authority contributes to the 
challenge of evaluating OTs. Freed from adhering to the FAR and certain 
procurement statutes, an agency can tailor an OT to the needs and 
circumstances of a particular project and the participants, which means 
the usual methods or vehicles for monitoring contractor performance--
such as contract administration and audit services (Part 42 of the FAR) 
and quality assurance (Part 46 of the FAR)--are not required. 
Additionally, aside from counting the number of traditional 
contractors, it is unclear what features of other transactions can be 
readily measured or evaluated . . . [I]t is particularly challenging to 
evaluate the benefits of OTs.''\7\
---------------------------------------------------------------------------
    \7\ Other Transaction (OT) Authority, pp. 22-23.

    Unlike DoD, which had struggled to lure non-traditional 
contractors,\8\ DHS has been successful in doing so. In 2008, GAO found 
that nontraditional contractors, including small businesses and 
contractors that had not recently worked for the Government, were 
involved in 83 percent of the other transaction agreements GAO 
reviewed.\9\ Despite this encouraging benchmark, however, GAO uncovered 
several problems:
---------------------------------------------------------------------------
    \8\ Other Transaction (OT) Authority, pp. 23-24; 72% of the 
research and 97% of the prototype DoD OTA funding went to traditional 
contractors in the late-1990s. Testimony of Donald Mancuso, Deputy 
Inspector General Department of Defense, before the Subcommittee on 
Readiness and Management Support of the Senate Committee on Armed 
Services on Defense Acquisition, April 26, 2000, p. 15. http://
www.dodig.mil/audit/reports/fy00/00-118.pdf (Downloaded July 14, 2011)
    \9\ GAO ``identified a total of 50 nontraditional contractors who 
participated in 44 (83 percent) of the agreements [it] examined, with 
multiple nontraditional contractors involved on 8 agreements. Half of 
these contractors had not recently worked for the government.'' 
Government Accountability Office, ``Department of Homeland Security: 
Improvements Could Further Enhance Ability to Acquire Innovative 
Technologies Using Other Transaction Authority,'' GAO-08-1088, 
September 23, 2008, p. 7. http://www.gao.gov/new.items/d081088.pdf 
(hereinafter GAO-08-1088)
---------------------------------------------------------------------------
   DHS did not have all the information it needed to determine 
        whether other transaction agreements were successful or that 
        their benefits outweighed their risks.
   DHS was not able to accurately assess whether it was using 
        other transaction agreements to effectively negotiate 
        intellectual property and data rights.
   DHS could not assure successful outcomes due to inadequate 
        staffing levels and high turnover in its contracting workforce.
   DHS lacked the resources, in terms of knowledge and 
        workforce capacity, to maximize the benefits and ensure the 
        transparency of other transaction agreements.\10\
---------------------------------------------------------------------------
    \10\ GAO-08-1088, pp. 12-16.
---------------------------------------------------------------------------
    DHS appears to have significantly reduced its use of and dollars 
spent on OT agreements,\11\ but those agreements still deserve to be 
reviewed and audited. Due to the inherent risk of OT acquisitions and 
the lack of reporting by DHS and GAO,\12\ this subcommittee should 
consider the extent to which DHS's OTA should be extended, request 
information about the OT agreement requirements and deliverables, and 
ask the agency about OT programs that can be immediately converted to 
FAR-based contracts.
---------------------------------------------------------------------------
    \11\ Government Accountability Office, Statement of John K. 
Needham, Acting Director, Acquisition and Sourcing Management, before 
the Subcommittee on Emerging Threats, Cybersecurity, and Science and 
Technology, House Committee on Homeland Security, ``Department of 
Homeland Security: Status and Accountability Challenges Associated with 
the Use of Special DHS Acquisition Authority,'' GAO-08-471T, February 
7, 2008, p. 6. http://www.gao.gov/new.items/d08471t.pdf
    \12\ Homeland Security Act of 2002 (Pub. L. 107-296), Section 
831(b), November 25, 2002. GAO is required by statute to report to 
Congress on DHS's ability to lure non-traditional contractors, results 
of OT acquisitions, and whether safeguards are needed. The last report 
issued by GAO was in 2008. GAO-08-1088.
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                           what dhs is buying
    More to the point of today's hearing is whether DHS is effectively 
leveraging emerging technologies. From a contracting perspective, this 
is a difficult to question to answer. DHS certainly bought new 
technologies, but how much safer are we?
    Many years ago, I testified before the full Homeland Security 
Committee and stated that DHS was buying infant technologies that were 
unproven and sometimes provided little or no benefit to the agency. We 
are still paying the price for poor policies and decisions resulting 
from the Deepwater and SBInet programs. It was one thing for those 
programs to fail while in their infancy, but it is another for those 
and other troubled programs to do so 10 years later. Any questions 
about DHS's effectiveness might only be answered if and when the next 
natural disaster or terrorist attack take place.
    Additionally, DHS's reliance on service contractors also makes it 
difficult to quantify the effectiveness of its buying because we are 
paying for time rather than tangible goods. As often is the case with 
service contracts, they are hard to measure and evaluate. For example, 
in March 2009, DHS Secretary Janet Napolitano instituted an efficiency 
review ``expected to lead to hundreds of millions of dollars in cost 
avoidance.''\13\ That review included ``launching efforts to reduce the 
Department's reliance on contractors and contract services to 
strengthen our Federal workforce.''\14\ Simply stated, DHS wanted to 
know more about the services it was procuring and the cost of those 
services. Unfortunately, DHS's estimate of the number of its service 
contractor employees was off by 100,000,\15\ and I have not heard about 
any DHS efforts to streamline, reduce, or cut services that are not 
needed or that were or are wasting taxpayer dollars. Without more 
information and oversight, it is nearly impossible to determine if DHS 
is effectively leveraging new technologies that would protect the 
country from emerging threats--only time will tell.
---------------------------------------------------------------------------
    \13\ Department of Homeland Security, Office of the Press 
Secretary, ``Secretary Napolitano Rolls out DHS Efficiency Review 
Initiative,'' March 27, 2009. http://www.dhs.gov/ynews/releases/
pr_1238172270388.shtm (Downloaded July 14, 2011)
    \14\ Department of Homeland Security, Office of the Press 
Secretary, ``Secretary Napolitano Announces Two New Efficiency Review 
Initiatives,'' April 7, 2010. http://www.dhs.gov/ynews/releases/
pr_1270667336512.shtm (Downloaded July 14, 2011)
    \15\ The DHS has begun to keep statistics on the size of its shadow 
Government workforce of contractor employees. It had estimated that the 
size of its contractor employee workforce was 200,000, as compared with 
188,000 DHS employees, but recently changed the estimate to 110,000 
contractor employees. Ed O'Keefe, ``Eye Opener: Homeland Security Has 
More Contractors Than Feds,'' The Washington Post, February 24, 2010. 
http://voices.washingtonpost.com/federal-eye/2010/02/
eye_opener_homeland_security_h.html (Downloaded September 27, 2010); 
Sean Reilly, ``Whoops: Estimate on number of DHS contract employees off 
by 100,000 or so,'' Federal Times, April 11, 2011. http://
blogs.federaltimes.com/federal-times-blog/2011/04/11/whoops-estimated-
number-of-dhs-contract-employees-off-by-at-least-100000/ (Downloaded 
April 12, 2011)
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                            recommendations
    POGO respectfully requests that this subcommittee consider the 
following recommendations to improve DHS contracting:
    1. Ensure that full and open competition is the rule, and restore 
        the definition of ``competitive bidding'' to require at least 
        two bidders.
    2. Require that risky contract vehicles are used in limited 
        circumstances and only when supported by proper justifications 
        and oversight protections.
    3. Review DHS commercial item and service acquisitions to ensure 
        that a commercial marketplace exists.
    4. Investigate how prime contractors bill the Government at their 
        own labor rate(s) rather than the rate they pay their 
        subcontractors on Time and Material or Labor Hour (T&M/LH) 
        contracts.
    5. Confirm that contractors are not performing inherently 
        Governmental functions, which must be performed by civil 
        servants.
    6. Reestablish the taxpayer-protection checks and balances that 
        have been removed from the contracting system, including 
        requiring contractors to provide cost or pricing data to the 
        Government for all contracts except those where the actual 
        goods or services being provided are sold in substantial 
        quantities in the commercial marketplace, and restoring the 
        Truth in Negotiations Act (which would result in enormous 
        improvements in contract pricing, negotiation, and 
        accountability, and save taxpayers billions of dollars per 
        year).
    7. Review DHS's use of the suspension and debarment system, 
        especially as it has been applied to large contractors with 
        repeated histories of misconduct.
    8. Provide a fair playing field for all DHS contractors to ensure 
        that all vendors are open to doing business with DHS.
    9. Require copies of contracts and task and delivery orders to be 
        made public on USAspending.gov.
    10. Examine and improve the conflict of interest and ethics system 
        to ensure that DHS employees comply with all Federal conflict 
        of interest laws and regulations.
    11. Renegotiate OT agreements under FAR-based contracts (e.g., FAR 
        Part 15) as soon as practicable.
    Thank you for inviting me to testify today. I look forward to 
answering any questions and working with the subcommittee to further 
explore how Department of Homeland Security contracting can be 
improved.

    Mr. McCaul. Thank you, Mr. Amey. I just want to follow up 
on some of the discussion we had with the first panel. I 
brought up the first-hand accounts of private sector companies 
wanting to do business with the Department and just frankly 
just not getting access. The two examples, one is a company 
that makes holographic maps that the Army is using. I wrote 
three letters to help facilitate that kind of a meeting and 
they are not even responding to me. They can't get in the door. 
Even in spite of the fact that Border Patrol looked at these 
maps and really liked them and recommended to Washington that 
they look at procuring these maps.
    Another instance a guy that--basically they have a device 
that can detect heartbeats which could be used in a lot of 
instances and it can be used down on the border too to look at 
human trafficking. It was originally designed by the Federal 
Government, this science, and this individual can't get a 
meeting. We heard from Dr. O'Toole, but basically her response 
to that was, gee, I guess I will respond to your letter, but 
also you know we are just too small, the private sectors are 
big, and industry and our office is just too small to 
accommodate facilitating these kind of meetings. I just find 
that to be inadequate in my judgment. Mr. Williams and Mr. 
Pearl, do you have any comments on that?
    Mr. Williams. I do, Congressman. I think the stories you 
told are all too typical of dealings with DHS over the past few 
years. I think it is very sad that they don't understand the 
benefits of engaging with the private sector, hearing about new 
ideas that could save money, could improve their mission, and I 
think it also goes to the attitude of individuals and a culture 
to kind of close the doors. I believe, as we have all talked 
about, DHS needs to engage the private sector, they need to do 
it throughout the process and they need to do it in a very open 
and collaborative fashion. That is not happening today.
    I did, after the first hearing, went outside and talked to 
Nick Nayak and he said, that is unforgivable that you had to 
write three letters that were not responded to. I think he is 
trying to change things. But again, as people have talked 
about, you have got a lot of different procurement officers 
there, and I think some of them are just ridiculously gun-shy 
about talking to the private sector. My experience in 
Government is the only way you are successful is if you engage 
everyone. It doesn't, it isn't a matter of time or people, you 
can make the time to do these right things. They just don't do 
it.
    Mr. McCaul. I tend to agree with you on that. Mr. Pearl, do 
you have any comments?
    Mr. Pearl. Rather than speaking to any one particular 
technology, this is something that I have seen for 15 or 20 
years in Washington when I started. In fact, the previous--I 
was at TechAmerica when it was called ITAA 16 years ago, and it 
was never about and should not be about an individual company 
trying to get its foot in the door. What I was speaking to was 
in point of fact a process, a blueprint, so that whatever the 
company is, whether it is a major company, a large company or 
whether it is a small garage company that is entrepreneurial, 
you shouldn't build in a void. Though I have the greatest 
technology for X or the wonderful process for Y, if in fact the 
Department doesn't want it, and I am not saying that they do or 
don't want the kinds of things that you talked about, but if 
the Department doesn't want it then why am I building this in 
the first place because I think it is going to help at the 
border, I think it is going to help at cargo or emergency 
management or whatever it is. So what we are talking about is 
this engagement before an individual company comes into the 
door and says I have got the greatest, you know, whiz-bang 
technology that you have ever seen, and their response is, 
well, I don't know if we are ever going to use it, when it 
would be deployed, whether I have the money for it.
    There should be this dialogue that both Jim and I are 
talking about that speaks to the issue of let's talk about a 
blueprint, what is our mission goal, not what is checking the 
box, what are we going to try to procure for $100,000 here or 
$100 million there or $1 billion down the road. We are trying 
to look at the broader component. All we have gotten thus far 
is these things that are called, for example, a QHSR or a 
bottoms-up review, the kind of quadrennial review. That is not 
a blueprint, that is everyone commenting on what should be. 
What we are looking for are lessons learned that exist in other 
agencies, and it shouldn't be in a void not only in what DHS is 
about, but what they could learn from other independent 
agencies or DOD or DOE.
    That is what we have been encouraging, that kind of 
dialogue not only with industry but across intra-Government so 
that so that you can learn what the processes are within a 
Department that is 8\1/2\ years old. The evolution is 
continuing, but we need to kind of move forward and stop saying 
we know it all, we have got it all down and fighting the last 
war. It is giving industry and Government an opportunity to 
look ahead of the curve.
    Mr. McCaul. Thank you. Just to follow up. Mr. Pearl, you 
talked about leveraging existing technologies rather than just 
starting from scratch. SBInet is a good example of that. I took 
Barkowski, who does a lot of the procurement in science and 
technology, Henry Cuellar and I took him down to the border, 
and because the Defense Intelligence Agency had sensor 
surveillance equipment that had already been produced, the R&D 
had been paid for by the taxpayer, they are using this actually 
currently in Afghanistan on the Pakistan border, sensor 
surveillance technology. Yet it is classic Federal Government, 
the left hand doesn't know what the right hand is doing. We had 
to make that introduction to him and brought him down on the 
border. He looked at what the DOD had to offer and he liked it. 
He is starting to procure it and deploy it.
    But that is just I think one example of technology that 
exists within the Federal Government that is not being 
leveraged. But then you look at the private sector, too. There 
is so much of this technology out there that is not--existing 
technology that is not being properly leveraged, in my view. I 
think the end result is not only can you be more effective and 
it can be deployed more quickly, but it is also more cost-
effective from the standpoint of the taxpayer.
    Mr. Pearl. You would think that. That is what we certainly 
in the private sector and what Mr. Williams and I are talking 
about, this dialogue is absolutely necessary. One of the things 
that the Council is going to be doing later this fall is 
bringing a group on a kind of fact-finding, executive tour 
mission down to the Southwest Border. We have developed not 
only relationships with DHS to develop this kind of dialogue, 
but we are bringing DOD and North Command into what is going 
on, U.S. Army North, and working very closely with Commanding 
General Swan, and try to get--you know, they kind of talk. But 
to be, you know, that kind of triangulation of making sure that 
the DOD and the DHS and the industry are all in the same room 
talking about what those future plans are, whatever leveraging 
we can do for tech services, for technology, for personnel, 
across the board. I think everybody wants to be there to help, 
they are all just kind of doing it on their own and we have to 
kind of develop that more in a coordinated, communicative, 
collaborative way.
    Mr. McCaul. Mr. Williams.
    Mr. Williams. I would just say, Congressman, I think what 
you are talking about is strategic sourcing, which is how do 
you leverage that buying power, leverage what is already out 
there. DHS has way too many of the same people buying the same 
thing but at different components. Whether it is buying it--
getting it from Department of Defense or just combining their 
buying power or combining their vehicles with other Government 
vehicles, they don't do enough of that. I think that is true 
across the Government, but particularly DHS, which has not 
really formed a cohesive whole as a procurement organization. 
They are a bunch of different stovepipes. I think they need to 
find a way to establish the processes that bring them together 
so that they can leverage the existing technologies from the 
private sector, existing vehicles and technologies that exist 
within DHS and across the Government. I would say if I had to 
guess what percentage of DHS's budget that they strategically 
source that they could, I would say it is less than 1 percent, 
that they could do something better about that other 99 
percent.
    Mr. McCaul. Well, I certainly hope--I know someone at the 
Department is watching this hearing and I hope they are 
listening. These are great lessons to be learned, and I think 
it would make DHS more effective and it would save the taxpayer 
a lot of money. Thank you for your interest in this, your hard 
work. I think this is an area that needs a lot of improvement, 
and I look forward to working with all of you.
    With that I yield now or recognize the Ranking Member.
    Mr. Keating. Thank you, Mr. Chairman. I am a big believer 
in pilot projects as well. I actually saw Homeland Security 
implementing one in Logan Airport which was terrific. It was an 
optical project with Lincoln Laboratories, MIT, and Northwest 
Pacific. Just looking at them deal with this pilot project, 
which is going to really I think improve digital camera 
surveillance and revolutionize it.
    With that being said, do you think there is enough 
interest? You know I would think just intuitively that in the 
front end for businesses to engage in pilot projects it is 
pretty intense in terms of commitment to capital, commitment to 
resources. Do you get a sense that there would be a lot of 
interest and create a lot of competition and diversity of 
vendors if we had more of a pilot project approach, or would it 
be more costly, because you are putting in so much research 
without the sense that you are going to be able to actually go 
beyond that?
    Mr. Pearl. Let me just briefly say that I think the pilot 
project, that has been a part and parcel of what homeland 
security has been about for 8\1/2\ years, which is, in many 
instances, the sense of piloting and trying to kind of figure 
that out. It is my impression from talking with both the 
Chairman and the Ranking Member of the full committee and 
others in Congress, that earmarking and pilot projects are not 
really the rule of thumb these days given the economics of what 
is going on. So what industry might want to invest in is 
different from what Congress can appropriate and what the 
administration can invest in as well. The flip of that is, is 
that if we are building any pilot project, if any of our 
companies are doing that, and yet we don't know on our own what 
in point of fact they are looking for, then in point of fact 
even if it was successful it may not be eventually implemented 
or deployed.
    I really do feel Dr. O'Toole's frustration, something that 
we have talked about. We are engaging in greater dialogue both 
with the Under Secretary of Management and the Under Secretary 
of S&T. Her frustration is no different than the 11 acquisition 
different processes, which are the multitude of S&T and R&D 
projects that are going on in the various components.
    TSA, all the great stuff that Administrator Pistole is 
doing, he will do it on his own, he will not do it necessarily 
in coordination with the broader S&T because he either has his 
own funds or he has his own way of looking at it and then goes 
back to S&T and may say can you approve this. So if you are 
working with Tara O'Toole on a pilot project in the airport it 
may not be something TSA is looking at. That is why we are 
encouraging--this is not just communication between industry 
and Government, this is communication within Government, and 
that we think that there needs to be this greater dialogue. If 
we in industry can help facilitate that, whether it is between 
DOD and DHS or between the various component parts, we want to 
do that. I do know that the Under Secretaries both, Rafael 
Borras and Tara O'Toole, are encouraging that kind of greater 
dialogue. They are trying amidst whatever the budget situations 
are to try to develop a better policy and procedures process.
    Mr. Amey. From an oversight perspective I would say I don't 
have a problem with pilot programs as long as it is open, 
transparent, there is a level playing field, you do also open 
up some legal issues with intellectual property rights on who 
holds them, whether it is the Government, whether it is the 
individual contractor, and that has created a multitude of 
problems for the Department of Defense through the years that 
at the end of the day they R&D funded a project and then it 
was--or there wasn't a lot of competition after the fact, so in 
essence it was an indirect earmark that went to a specific 
contractor, or the requirements are so narrowly tailored based 
on that technology that at that point competition won't amass 
because people aren't going to compete because they know where 
that is being steered to.
    Mr. Keating. Good point. Mr. Williams.
    Mr. Williams. I would just say I am very much in favor of 
pilot programs. I think you can look at it from about three 
different ways. One is doing a pilot of emerging technology 
where you just want to try it. For example, if there is 
something that works great in cybersecurity mode allow the 
Department to have the flexibility, which I believe they have, 
they just don't exercise it, to try something on a smaller 
scale. I think there is also a pilot before you are going to 
implement a large-scale system, which I have done, having a 
pilot as part of the testing not only lowers the risk of full-
scale implementation, it allows you to better understand the 
program cost. The most expensive is actually to go into a fly-
before-you-buy pilot with multiple pilots, that is expensive. 
But on some of the larger systems of DHS that might actually be 
appropriate.
    So I think they have to have a better culture of 
understanding when pilots should be used and how to use them 
properly, but I absolutely think they ought to do more of that.
    Mr. Keating. I like to follow this up from time to time, 
but the day has been really broken up, and I apologize to all 
of the panelists who had to wait through that. I look forward 
for the opportunity in the future to have future discussions 
because I do think this is extremely important. I think we have 
an agency that was born of so many diverse parts it is still 
struggling for some kind of fusion. If we can work together to 
improve that, everyone will be benefited, not just in terms of 
taxpayer funds but also in terms of our security.
    So I would like to follow this up. I do apologize for the 
day being so broken up.
    Mr. McCaul. Thank you. The Chairman now recognizes the 
gentleman from Michigan, Mr. Clarke.
    Mr. Clarke of Michigan. Thank you, Mr. Chairman. I also 
thank both of you for this hearing and allowing me to be here 
today. I was looking at several GAO reports, and I think there 
was one back in 2008 that indicated that one of the best ways 
to guard against cost overruns and scheduling delays is to have 
clear requirements and to have clear performance measures in 
order by which to evaluate the performance of the contractor.
    Now, with DHS contracting generally it is unique and it is 
complex just in terms of its mission. Service contracting, 
especially in the area of technology, is extraordinarily 
complex. On top of it, when you look at what our goal is, to 
fight terrorism, to protect our people, to prevent these 
attacks from happening and to be able to respond to them when 
they do, the threat is constantly evolving and changing. So the 
way that we meet that threat has to change the same way, with 
speed.
    So some of you had some criticism about the early 
deployment of certain technologies. I could understand why. For 
example, when we now know that the terrorists are now 
considering using radioactive materials to harm us on planes, 
and I think the French actually developed some technology 
recently that we were talking about that could help screen 
against those kinds of materials, that the Department would 
immediately want to get on it because we have to act quickly. 
So I can understand that. We may even have to act more quickly 
than the Department of Defense.
    I have got several questions. Let me just lay it out. First 
of all, with technologies that are evolving to meet an evolving 
threat, everything is moving around, what I have heard is that 
we need to better engage the private sector in this, because 
definitely our S&T Directorate, that funding is being cut so we 
aren't going to be able to do that in-house. But that will be 
another policy decision that, if I could, Mr. Chairman, again, 
I said repeatedly time and time again, the best way to protect 
American citizens is take a share of the Afghanistan security 
fund assistance of $12 billion or so and redirect that to 
homeland security so that we can have the resources that we 
need. But I am not going to make a political issue about that, 
but I do want to raise that point.
    We don't have the staff and resources funded by tax dollars 
to do this research, so we have got to rely on outside partners 
like Dr. O'Toole talked about. Mr. Pearl raised this issue I 
think a few years ago. So we need early engagement from those 
that are developing this technology or are at the cutting edge 
of it. How do we best do that regarding a specific, let's say, 
procurement? We are not talking about a general access issue 
now to introduce like a technology. But on a specific 
procurement, without raising the conflict of interest issues 
that DHS is very mindful about, which could be a reason why 
they may not respond many times to a private contractor or why 
they may not even want to respond directly through an inquiry 
from a Member of Congress, so they aren't being perceived as 
being swayed by outside pressure, because one of the major 
contracting principles is we have got to have a fair process 
because we are using tax dollars.
    So that is one question, is how do we balance the need for 
early engagement so we can get the input in shaping the 
requirements of the technology that we need to acquire, because 
we probably don't know what that is, that is why we need 
information on it, because we are not really sure what our 
threat maybe is, we have an idea, and then how do we do that 
without running into issues that this is somehow wiring the 
contract to a certain contractor.
    Mr. Pearl. If I may, I think that is an important question, 
Congressman Clarke, but maybe to phrase it in a different way. 
It is not how do we leverage an emerging technology or how do 
we utilize a particular product. I think that the question from 
Congress, not to tell you how you should ask the question, but 
the question should be, what are we trying to achieve, what is 
the goal, what is the mission of that particular program, of 
that particular utilization? From that, once that question is 
asked precisely by Congress or by the Department or even by 
industry, what are you trying to achieve in airport detection, 
in border or whatever, then bring before the procurement, 
before the RFP, bring the industry together with the people, 
with the folks from the Department, to talk about how are the 
various component parts made up so that in essence people will 
know whether their technology or their service or their product 
or their widget is the best one, the best to bring. It 
shouldn't be we have decided that we are going to use this 
technology and therefore everybody bid on it, whether it is 
facial recognition or whatever. So the question should be, what 
are we trying to accomplish and what are the capabilities that 
the Government brings and what industry brings to accomplish 
that goal?
    With respect to the global aspect that you raised, that is 
easy, because some of these things have been deployed in other 
countries, and that is a pilot project unto itself. It may not 
be able to be Nationalized if it was used in Israel or if it 
was used in Germany or if it was used in Spain, but lessons 
learned there is a perfect pilot program, Congressman Keating, 
that has been utilized and let's see if we can in essence 
transpose that to the United States.
    So there are different ways in which we should be part of a 
dialogue that gets to exactly what your question I think is 
about.
    Mr. Williams. If you don't mind, Congressman Clarke, I 
think the answer is fairly easy. I had, when I was in 
Government, thousands of acquisition personnel working for me 
and talking about open communications. I say if you were 
building a house and you wanted multiple suppliers, would you 
at some point in time do what the Government does, start with 
some communication and the closer you got to forming a contract 
shut down that communication more and more? No, you would open 
it up more and more. The way the Government should go about 
doing this is very easy, engage the private sector in ways that 
is both open and fair, and it can be done. Start with the 
general idea of what is the mission goals and talk to industry 
about that, get some feedback. As you go through this iterative 
process of communication you start to learn more as a 
Government buyer what is the art of the possible from the 
private sector. Once you get closure to know what those 
requirements are you put those requirements out there and the 
acquisition strategy to see how well that matches up with the 
private sector.
    It is not that hard. It is just a matter of taking a 
philosophy of communicating throughout the process in order to 
best match up the Government's needs with what the private 
sector can offer that is most cost-effective and efficient. It 
is not that hard.
    Mr. Clarke of Michigan. Is this a sense then that we have 
got to change the culture of DHS or are there certain policies 
that we need to modify to create the right incentives for open 
and transparent communication.
    Mr. Williams. I would just say that culture of not 
communicating openly is across the Government. I think with DHS 
in particular DHS is still a collection of too many disparate 
organizations that don't act as one. Now, we would want them to 
act as one and raise the bar on how they engage industry. They 
don't do that.
    Mr. Clarke of Michigan. Now, let me just follow up just on 
that in terms of having a comprehensive acquisition process. 
Now, my assumption is that all the component parts of DHS, they 
all are subject to Federal acquisition regulation. Like some 
parts, like the Coast Guard, TSA now I think is even under the 
FAR when it used to be under FAA I think when it was a stand-
alone agency. But anyway, my point is this: Do we need to make 
any statutory changes to unify the acquisition process for all 
the parts of DHS?
    Now, what I have heard is that the Coast Guard may still 
follow the FAR, but some of their procedures may be different 
than other DHS agencies, but that it may provide more 
flexibility. But I am not sure of that. This is anecdotal 
information I have got. So are there real differences, should 
those differences be eliminated and we kind of unify 
procurement and acquisition procedures, and then finally if 
that is the case do we need some type of statutory change where 
this body would come into place.
    Mr. Pearl. I would just say, I am certainly not here to ask 
for new laws or new regulations. What I would be looking for is 
should the Congress and this committee, overall committee, look 
at once and for all the value of a comprehensive authorization 
bill which gives the kind of blueprint from at least the 
Congress' priorities to DHS, rather than always only of giving 
the guidelines to the Department through an appropriations 
process. If it is only in report language of an appropriations 
bill, then therefore they are not getting the kind of guidance 
that they might want and they need in order for us to get the 
blueprint that we were talking about. So I am not talking about 
anything statutorily, I am just simply saying that if Congress 
has priorities on mission it might want to look at more closely 
a more comprehensive authorization approach, which comes out of 
this committee, versus an appropriations approach and only 
doing it through appropriating report language.
    That is one aspect. It doesn't go to the statutory, but 
gives guidance that might be helpful as part of the blueprint 
that we are talking about, and would urge the Department to in 
fact get us to a point that we would all like to be at.
    Mr. Clarke of Michigan. Could that comprehensive 
authorization bill then contain that acquisition strategy that 
we are looking at, the long-term acquisition strategy for DHS?
    Mr. Williams. Congressman Clarke, I am not sure a new law 
is needed here. I think there are a lot of plans, such as the 
OFPP memorandum on myth-busting on open communications. I think 
Dr. Nayak has plans. There are many procurement people there 
who work very hard, but I think they have too much fear of 
engaging the private sector. They often attribute it to things 
like, well, it is their misinterpretation of the rules, it is 
the fear of oversight groups telling them they are doing 
something that is unfair, it is a fear of protest, which I 
always find remarkable, because my experience was the more that 
you engage the private sector in a very open and transparent 
and competitive way the more you do not get protest.
    So I am not sure any new law is necessary. I think it is a 
matter of them simply changing their culture and implementing 
some of the plans they already have in place.
    I will say I would love, and TechAmerica would love, to see 
the vendor communications plan that they are supposed to have 
delivered to OMB for review on June 30 to see really how far-
reaching that is so that TechAmerica could provide some best 
practices suggestions for how to improve the engagement with 
the private sector. Again, this engagement with the private 
sector is not simply just because we want people to talk to us, 
it is because we think we can help the Department better 
accomplish their mission in a more cost-effective manner.
    Mr. McCaul. We can tell the gentleman has experience in 
this issue and I appreciate your insight and wisdom.
    Mr. Clarke of Michigan. Can I just----
    Mr. McCaul. The Ranking Member has a flight at 2:30, so 
being mindful of that----
    Mr. Clarke of Michigan. I would like to know if I can meet 
separately with you. Because again, a lot of the protests arise 
from when you don't have clear requirements in the first place. 
Then second, all the good will, the good discussions, the 
memos, the GAO reports, everything is leading to one point. I 
would like for us now maybe to consolidate this. This body can 
actually drive that to happen. If it is something we can do to 
give DHS the freedom that they need not to be fearful of 
talking to people, we could provide that.
    But also too one last point, you know, I have heard time 
and time again DHS acquisition personnel, they need the 
training, we need the funds to train the people, we need more 
acquisition personnel, that would take the burden off of that, 
that would allow other personnel then to respond to inquiries 
from contractors, from Members of Congress. It is not just 
money, but it is how we use it. That is why I urge you, Mr. 
Chairman, and your caucus to consider fully funding DHS's 
operations right now.
    A lot of the problems that we are hearing is if we had more 
qualified people with the right attitude, all these problems I 
think would vanish.
    Mr. Pearl. Simply put, I would just encourage both the 
continued dialogue, not only with the Department, but as we 
have done, certainly the Council and I am sure TechAmerica has 
done, with the individual Members of this committee and with 
the subcommittee as well. We continue to want to be in dialogue 
with you so that you know exactly what the concerns are and 
whether we facilitate or you facilitate or the three, you know, 
with the DHS in the room. It shouldn't always be only at a 
hearing process, it has to be an on-going dialogue that we all 
in fact want to engage in and continue the work of the 
oversight of this committee.
    Mr. McCaul. Well, I look forward to continuing that 
conversation with you both in this setting, also more 
informally in the office, you have some great ideas.
    Before I adjourn I do want to enter into the record your 
report, Mr. Pearl. Without objection, so ordered.
    [The information follows:]
Report of the Homeland Security & Defense Business Council Submitted by 
                       Chairman Michael T. McCaul
 council principles on federal contracting and procurement: how do we 
   best achieve strategic alignment between industry and government?
    The Homeland Security & Defense Business Council was formed to 
drive awareness, understanding, and dialogue among those responsible 
for supporting the security of our Nation. The Nation's leading 
companies engaged in providing the products, technologies, and services 
solutions to the homeland security marketplace participate in the 
Council. We are committed to creating a strong public-private sector 
business process and substantively engaging the leading executives in 
industry and Government to meet the Nation's homeland security 
requirements.
    Since the creation of the U.S. Department of Homeland Security, the 
Council believes that we have not yet optimized and operationalized the 
relationship between the public and private sectors in order to 
sufficiently leverage industry's full resources to meet the needs of 
the Department and the Nation. For example, the lack of a predictable 
homeland security acquisition environment hampers industry's ability to 
anticipate Government needs and efficiently marshal resources to meet 
them. This and other differences in perspective between Government and 
private industry prevent our Nation from achieving our security 
objectives in the most effective way possible. 


    The Council and its members desire to develop a forum to promote a 
substantive and open dialogue between the Department and industry that 
will help us align our activities to strengthen support to the DHS 
mission and our Nation's overarching homeland security requirements. 
Optimally, Congress should also become a full participant in those 
aspects of the dialogue that require legislative oversight. Possible 
discussion points that will help ``jump start'' a dynamic and healthy 
dialogue are outlined below. Government leaders will likely have 
additional topics of interest, which can also become part of the 
discussion.
                           discussion points
Need for a Mid- and Long-Term Strategic Plan That Would Provide 
        Industry With the Ability to Align Its Resources to the Mission 
        Goals of the Department
    Industry makes business, planning, and investment decisions based 
on developing and growing long-term capabilities. The U.S. Department 
of Homeland Security strategic plan would allow industry to align its 
resources and investments to meet the longer-term goals and needs of 
the Department. Lacking such a strategy severely limits the ability of 
interested companies who want to respond to the Department's needs and 
limits industry's investment in the homeland security mission area. The 
Department should also consider its influence on companies that service 
the State and local market. Many of these companies tend to be small, 
privately owned entities with limited resources who are funded through 
DHS grant dollars. A focused strategy should reflect requirements that 
can be passed down through procurement documents to ensure service and 
product providers offerings are in line with DHS's global mission.
   Develop a mechanism, or clear ``rules of engagement'' that 
        would allow industry input in an open, transparent manner.
    Industry is ready and able to engage to meet the opportunities and 
        challenges within the Department; however, all participants 
        must understand and adhere to ``rules of engagement'' that 
        optimize input and exchange between the public and private 
        sectors. The more complex the procurement, the more critical is 
        the need for an open information exchange. Industry input is 
        essential to help refine and calibrate requirements to match 
        mission objectives and achieve mission goals.
   Improve the efficacy of the procurement planning process to 
        optimize the private sector's ability to respond.
    Industry needs planning time to align its resources in order to 
        effectively and adequately respond and to assure its 
        capabilities meet and exceed the Department's requirements. 
        Developing a mid- and long-term strategic plan would offer 
        industry more lead time so that the Department receives the 
        highest quality bids or options.
   Continue to Standardize and Rationalize the Acquisition and 
        Procurement Process.
    Continue to utilize Department-wide vehicles. Combining almost 2 
        dozen agencies with different processes and cultures to form a 
        new Department has resulted in many different operating 
        missions and cultures. This is particularly challenging for 
        small companies that bring innovation and capability, but lack 
        the marketing resources to operate across disparate functions 
        within an organization. This disadvantage is magnified when 
        having to compete against large entities with sizable marketing 
        teams focused on each agencies organization. For industry to 
        provide the best products, technologies and services to the 
        Department, we strongly support a strategy leading to a more 
        centralized standardized process.
   Recognize and address the need for a higher quantity and 
        quality of contracting personnel who understand the ``rules of 
        engagement'' well enough to communicate both pre- and post-
        award.
    A procurement or acquisition experience is often as good as its 
        contracting officer. In many members' experience, the more 
        senior contracting officers tend to provide maximum 
        interaction. These senior officials communicate more openly and 
        add to a constructive ``back and forth'' between Government and 
        industry. The lack of contracting officers in general, has 
        complicated and frustrated both potential and winning 
        contractors. Additionally, without adequate understanding of 
        the appropriate interaction between industry and Government, 
        contracting officers without experience tend to err on the safe 
        side and have no interaction at all. This severely hampers the 
        process and outcome of many acquisitions and procurements.
   Address issues and complications surrounding the security 
        clearance process.
    As everyone involved in the security clearance process recognizes--
        the lack of standardization and reciprocity among DHS 
        components causes significant delays, impacts award fees, and 
        project performance. Consider in the context of small 
        businesses that the cost of multiple clearance processes 
        becomes prohibitive and the agency loses the ability to 
        transfer best practices, technology, and talent across multiple 
        organizations. A uniform reciprocity should be developed for 
        internal DHS components.
Optimizing the Dialogue
   Leverage private sector resources to help achieve mission 
        success--aligning the administration's mission with 
        Congressional concerns and with industry capabilities.
    Industry understands that it engages and operates in an environment 
        where both operational and political considerations alter the 
        course of events. The Council supports developing an open, 
        free-flowing dialogue between the Department, the Congress, and 
        industry that discusses how to better prepare for our role in 
        the defense and protection of our Nation's people, facilities, 
        borders, and networks. This dialogue should expand beyond the 
        Federal contractor community into local business organizations 
        that can influence community behavior in line with National 
        interest.
Participate and Support Programs to Encourage and Enhance Mutual 
        Understanding and Cooperation
    In addition to the initiatives outlined above, the Council is 
interested in working with DHS in developing an exchange program to 
improve the management abilities and technical and professional 
competencies of DHS employees. A professional exchange program would 
offer the Department first-person insight into the philosophy, 
procedures, and practices of industry. The exchange would also offer 
public sector professionals an opportunity to fully examine industry 
policies and processes, as well as learn first-hand, how industry 
addresses contracting and procurement issues--acquiring the ability to 
interpret the needs of the Department in industry terms. By studying 
the best practices of industry, Government professionals are able to 
bring new knowledge, understanding, and empathy back into the 
Department to then improve its processes. Obtaining such direct insight 
and experience is currently unavailable in DHS. The process is also 
extremely beneficial to industry, which in turn receives the unique 
perspective and experience of the DHS professional.

    Mr. McCaul. Thank you for your testimony. Members may have 
additional questions, and I would ask that you respond to them 
if they are tendered to you in writing. Great hearing, and 
thank you so much for being here. This subcommittee is 
adjourned.
    [Whereupon, at 1:50 p.m., the subcommittee was adjourned.]


                          A P P E N D I X   I

                              ----------                              

               Letter From Rafael Borras and Tara O'Toole
                                                     July 21, 2011.
The Honorable Michael McCaul,
Chairman, Subcommittee on Oversight, Investigations, and Management, 
        U.S. House of Representatives, Washington, DC 20515.
[The Honorable William Keating,]
[Ranking Member, Subcommittee on Oversight, Investigations, and 
        Management, U.S. House of Representatives, Washington, DC 
        20515.]
    On Friday July 15, 2011, we testified before the committee and due 
to time constraints, many concerns raised in the opening statements 
were not able to be addressed. We wanted to take this opportunity to 
share with you the progress that has been and continues to be made with 
regard to leveraging technology and the Department's programs in 
securing the border, and to correct the reported errors regarding the 
Department's Advanced Spectroscopic Portal (ASP) Plan.
    As was stated in the hearing, DHS is highly focused on leveraging 
research and development investments made by the Federal Government, 
the commercial sector, or universities. As part of its recent 
organizational realignment, the Science and Technology Directorate 
created the Research and Development Partnerships Group, which reports 
directly to the Under Secretary, to focus our ``technology foraging'' 
efforts. As an example of our many interactions with DoD, Under 
Secretary of Defense for Acquisition, Technology, and Logistics Dr. 
Ashton Carter, DHS Under Secretary for S&T Dr. Tara O'Toole, and DHS 
Under Secretary for Management Rafael Borras meet quarterly under the 
Capability Development Working Group. This group explores capabilities 
of mutual Departmental interest, decides on appropriate implementation 
paths that avoid duplication of effort, and informs policy, planning, 
and decision making. Under Secretary O'Toole also co-chairs the White 
House Office of Science and Technology Policy's Committee on Homeland 
and National Security with Assistant Secretary of Defense for Research 
and Engineering Zachary Lemnios. The committee and its subcommittees, 
consisting of agencies across the Federal Government, collaboratively 
develop executable research and development plans.
    It is critical in these efforts, however, that the existing 
technologies line up with DHS's operational requirements. Part of the 
problem with past acquisitions has been the attempt to insert off-the-
shelf technologies, designed for different missions, in to DHS programs 
without a careful comparison to DHS's specific operational needs. The 
shared focus of the Under Secretary for Management, the Under Secretary 
for Science and Technology, and Secretary Napolitano on leveraging S&T 
in the ``front end'' of acquisition is targeted specifically at 
ensuring that DHS either selects the proper off-the-shelf technology 
when it exists, or receives the technology through a disciplined 
research, development, and acquisition process.
    As you correctly noted in the hearing, the Secure Border Initiative 
was started in 2006. This was before the current management controls 
were put in place, specifically Acquisition Management Directive 102-
01. Directive 102-01 was signed by then-Under Secretary Elaine Duke in 
January of 2010. In July of 2010, the troubled SBInet program was 
directed to present a revised Analysis of Alternatives (AoA) in 
accordance with Directive 102-01 that re-examined the operator's needs. 
This rigorous analysis and mandatory engagement with the field 
operations resulted in a much more rational technology plan that 
includes proven elements of the former SBInet program while better 
utilizing off-the-shelf solutions. Through our management controls, we 
directed the suspension of SBInet, forced a re-plan of border security 
technology, and supported a new plan to increase operational coverage 
and provide deployment flexibility that was not present in the prior 
program plan.
    Regarding the recent Washington Post article, we want to point out 
some key items that the newspaper story did not cover. First, Advanced 
Spectroscopic Portal monitors, or ASPs, have been tested and subject to 
review and evaluation for over 3 years. These test data were used to 
inform a decision on whether to go forward with acquisition and 
deployment activities. In April of 2011 the Department held an 
Acquisition Review Board (ARB) on ASPs. The ARB directed the Domestic 
Nuclear Detection Office (DNDO) and Customs and Border Protection (CBP) 
to pursue a revised program that addresses limitation in cargo 
conveyance scanning technologies based on the Model-Test-Model approach 
recommended by the National Academies of Science. This revised program 
was directed by the ARB to include commercially-developed systems and 
an analysis of alternatives. Finally, the most recent ASP contract 
expired on July 11th of this year--there is no more existing contract 
to purchase radiation monitors today, nor will there be until such time 
that a new set of requirements is developed by DNDO and CBP, and 
approved by the Department's ARB.
    We acknowledge that many of the Department's legacy programs have 
faced challenges that both the Office of the Inspector General (OIG) 
and the Government Accountability Office (GAO) have repeatedly 
commented on; however, even the OIG noted in its recent June report 
(OIG-11-91) that significant progress has been made in maturing the 
Department's acquisition process and program management capabilities. 
In fact, the report notes that the Department has implemented all five 
recommendations to enhance oversight, established and strengthened the 
Department's Acquisition Program Management Division, and addressed 
procurement staff shortages and staff authority.
    We thank you for your support of the Department of Homeland 
Security, and an identical letter has been sent to [Chairman McCaul] 
[Ranking Member Keating]. If we can be of any further assistance, 
please contact us.
            Sincerely,
                                             Rafael Borras,
                                    Under Secretary for Management.
                                              Tara O'Toole,
                        Under Secretary for Science and Technology.


                         A P P E N D I X   I I

                              ----------                              

    Questions From Chairman Michael T. McCaul for Charles K. Edwards
    Question 1. You mention in your testimony that components are not 
consistently reporting their acquisition programs to the Department. 
You further state that components have developed, or are in the process 
of developing their own data-tracking systems for acquisitions because 
the Department has not mandated the use of the Department-wide system. 
For example, Customs and Border Protection (CBP) was in the process of 
developing an additional database to track acquisitions.
    What was CBP's rationale for building its own acquisition database?
    What measures is the Department of Homeland Security (DHS) taking 
to ensure that the Department is not wasting dollars on multiple 
acquisition systems tracking the same information?
    Answer. The Department of Homeland Security (DHS) continues to face 
challenges associated with implementing a fully integrated acquisition 
function. In Audit Report OIG-11-71, ``DHS Oversight of Component 
Acquisition Programs,'' we found that the Department developed 
inconsistent reporting requirements for components to follow when 
reporting an acquisition's progress in the Department's standard 
reporting system. The standard system is an integrated system that 
provides visibility to the Department to track components' level 1, 2, 
and 3 acquisition investments. We recommended that the Department 
direct components to report all acquisition programs (level 1, 2, and 
3) to the standard system. We are still waiting for the Department's 
final reply on the recommendation due to its reorganization of its 
acquisition offices, but we believe that once the Department ensures 
that all components are reporting the acquisition program data into the 
standard system, the Department will have visibility over acquisition 
programs.
    The Department has identified the standard system that all 
components will use to report acquisition programs. The Department of 
Homeland Security Management Directive 0007.1, ``Information Technology 
Integration and Management,'' establishes the Department's vision and 
the authorities and responsibilities of the Department's Chief 
Information Officer. It reinforces the commitment to create and manage 
a unified department in mission accomplishment and support systems 
performance. Within the Department, component heads and line of 
business chiefs share the responsibility of developing information 
technology to build a progressive 21st Century DHS. Dual accountability 
recognizes mission accomplishment as the ultimate responsibility of the 
component heads and requires them to support functionality. According 
to CBP, it was developing its own acquisition system because it did not 
believe that the standard system would provide the appropriate level of 
security.
    Question 2. In your testimony you state that the Department does 
not always know what is in its acquisition portfolio because the Under 
Secretary for Management (USM) has not ensured that components report 
all acquisition programs. As a result, the USM does not have visibility 
to conduct oversight of acquisition programs.
    Does the USM need additional authority through legislation to make 
sure the Department has proper visibility of all acquisition programs?
    Answer. As stated above, we believe with the implementation of our 
recommendation, the USM will have visibility over all components' 
acquisition programs. One additional suggestion to enhance the USM's 
authority, however, would be to give the USM authority to override 
funding if a component acquisition program is not meeting all of the 
requirements of acquisition life cycle management.
    Question 3. According to your testimony, there seems to be a 
recurring theme that Department-wide, components are maintaining 
separate inventories of their technology equipment, not effectively 
leveraging existing technologies, and not imposing standardization of 
technologies across DHS.
    What steps are being taken to standardize the inventory of 
technology and to increase coordination and communication so all 
components and the Department are aware of what other components are 
purchasing?
    What additional efforts are needed to standardize equipment 
purchases and identify common mission requirements among components?
    Answer. In our report OIG-11-47, Department-wide Management of 
Detection Equipment, we found that the Department can improve 
management of its detection equipment by using strategic sourcing 
principles that it has applied to the acquisition of other commodities, 
such as law enforcement officer firearms and ammunition. The Department 
does not have a logistics process in place to facilitate strategic 
sourcing of detection equipment. Strategic sourcing would require that 
management standardize equipment purchases for explosive, metal, and 
radiation detection equipment; identify common mission requirements 
among components; and develop standard data elements for managing the 
inventory accounts of detection equipment. Improving its management of 
detection equipment will offer the Department opportunities to 
streamline the acquisition process and improve efficiencies. These same 
principals can be applied to other commodities across the Department 
such as tactical communications equipment.
    Question 4. In your testimony you state that all components do not 
have adequate policies and procedures in place to manage their 
acquisition programs.
    Why has the Department given components decision authority to 
manage certain acquisitions when they do not have adequate policies and 
procedures in place to manage these acquisition programs?
    When do you expect these policies and procedures to be in place?
    Until components have sound policies and procedure in place, who is 
currently managing them?
    Answer. In Audit Report OIG-11-71, ``DHS Oversight of Component 
Acquisition Programs,'' we stated that although the Department 
delegated the responsibility of the management of level 3 programs to 
the components (retaining level 1 and level 2 control), the Department 
did not take steps to ensure that all components developed prescribed 
policies and procedures for oversight of acquisition programs. DHS 
Acquisition Management Directive 102-01 states that components retain 
authority to set internal acquisition processes and procedures, as long 
as they are consistent with the spirit and intent of the directive. 
However, not all components have created such policies and procedures, 
and the Department had not taken steps to ensure the adequacy of the 
processes and procedures that components developed. We reviewed the 
component policies and found that four components had created and 
issued finalized policies, five had draft policies, and three did not 
provide a policy. We recommended to the Department that it implement a 
plan of action or completion deadline for Department-wide finalization 
of acquisition management policies and procedures. We are still waiting 
for the Department's final response on this recommendation.
      Question From Chairman Michael T. McCaul for David C. Maurer
    Question. Some in the private sector believe that there is a lack 
of communication and cooperation between DHS components and the 
Department. As a result, technologies are not effectively leveraged and 
duplication of efforts occurs.
    What specific measures do you recommend that will improve their 
coordination efforts?
    Answer. In order to improve Department-wide coordination efforts, 
leverage technologies more effectively, and reduce duplication, we 
recommended in November 2008 that DHS should reinstate the Joint 
Requirements Council (JRC) or establish a similar body responsible for 
overseeing requirements Department-wide.\1\ Established in 2003, the 
JRC was a senior requirements review board responsible for identifying 
certain crosscutting opportunities and common requirements across DHS 
components, and helping ensure that the Department used its resources 
wisely and in the best interest of the American public. However, the 
JRC stopped meeting in 2006 after the Chair was assigned to other 
duties within the Department. The JRC played a key role in identifying 
overlapping DHS investments, and in 2008, DHS officials recognized that 
since the JRC stopped meeting, there had been no direction for 
requirements or oversight of certain investments at the Department 
level and stated that strengthening the JRC was a top priority. DHS 
agreed with our recommendation to reconvene the JRC or a similar 
council, but it has not yet done so.
---------------------------------------------------------------------------
    \1\ GAO, Department of Homeland Security: Billions Invested in 
Major Program Lack Appropriate Oversight, GAO-09-29 (Washington, DC: 
Nov. 18, 2008).
---------------------------------------------------------------------------
    We also reported in June 2010, that DHS's senior-level Acquisition 
Review Board (ARB) has begun to meet more frequently and has provided 
programs decision memorandums with action items to improve 
performance.\2\ At the time of our review, the ARB had reviewed 24 
major component acquisition programs in fiscal years 2008 and 2009; 
however, more than 40 major acquisition programs had not been reviewed, 
and programs had not consistently implemented review action items by 
established deadlines.
---------------------------------------------------------------------------
    \2\ GAO, Department of Homeland Security: Assessments of Selected 
Complex Acquisitions, GAO-10-588SP (Washington, DC: June 30, 2010).
---------------------------------------------------------------------------
    In June 2011, DHS reported that it planned to create the 
Capabilities and Requirements Council which would serve in a similar 
role as the JRC. DHS reported that it will form the new council in the 
fourth quarter of 2011, but it is unclear when it is expected to become 
fully operational. DHS also reported that it plans to establish a new 
model for managing and coordinating Department-wide investments across 
their life cycles. Under this plan, the Science and Technology 
Directorate (S&T) would be involved in each phase of the investment 
life cycle and participate in new councils and boards DHS is planning 
to create to help ensure that test and evaluation methods are 
appropriately considered as part of DHS's overall research and 
development and investment strategies. In addition, DHS reported that 
the new councils and boards it is planning to establish to strengthen 
management of the Department's acquisition and investment review 
process would be responsible for, among other things, making decisions 
on research and development initiatives across components based on 
factors such as viability and affordability and overseeing key 
acquisition decisions for major programs using baseline and actual 
data. According to DHS, S&T will help ensure that new technologies are 
properly scoped, developed, and tested before being implemented.
    The actions DHS reports taking or has underway to address the 
management of its acquisitions and the development of new technologies 
are positive steps and, if implemented effectively, could help the 
Department address many of these challenges. However, showing 
demonstrable progress in implementing these plans is key. In the past, 
DHS has not effectively implemented its acquisition policies, in part 
because it lacked the oversight capacity necessary to manage its 
growing portfolio of major acquisition programs. While we support DHS's 
efforts to develop councils responsible for overseeing requirements 
Department-wide and coordinating programs, it is not yet clear how the 
new DHS councils will perform their functions. It is too early to tell 
whether it will meet the intent of our past recommendation, improve 
coordination between the Department and its components, and continue to 
function effectively over time. We will continue to assess these 
efforts as part of our on-going work related to DHS technologies and 
acquisition management.
      Questions From Chairman Michael T. McCaul for Rafael Borras
    Question 1. The SBInet program has been terminated. What went 
wrong? How can we apply the lessons learned from this program's 
termination to any future acquisition program?
    Answer. The SBInet program has been terminated, due to not being 
the most efficient, effective, and economical way to meet our Nation's 
border security needs. SBInet suffered a series of technical issues 
that led to significant schedule delays and cost overruns, resulting in 
the inability to deliver a cost-effective solution. The capabilities 
already fielded through the SBInet program will be utilized to support 
the efforts of Customs and Border Protection (CBP) to identify and 
reduce threats and illegal cross-border activity.
    We have learned from this program and others with similar issues 
that the Department's acquisition management framework needs to mature 
through the refinement of our policy, processes, procedures, and 
placement of people with the right skill sets in the program offices. 
The goal is that every major program is implemented in the most 
responsible and efficient manner possible. To achieve this, we have 
taken steps to strengthen acquisition management through the 
implementation of Management Directive 102-01, Acquisition Management 
(MD 102-01). This document establishes the overall acquisition 
management framework for all major acquisition programs. It formalizes 
the role of the Acquisition Review Boards (ARBs) in the oversight and 
governance process, as it assesses a program's progress and determines 
the criteria for further execution. The implementation of this 
directive has resulted in productive interactions between program 
offices and Department leadership allowing us to mitigate or avoid 
cost, schedule, and performance risks.
    Subsequent to releasing the MD 102-01, we established the function 
of the Component Acquisition Executive (CAE), a senior acquisition 
official within each Component who leads a process and staff to provide 
acquisition and program management oversight, policy, and guidance to 
ensure statutory, regulatory, and higher-level policy requirements are 
fulfilled. We intend for each Component with acquisition programs to 
designate a CAE, who will be delegated acquisition decision authority 
for the Component's level 2 acquisition portfolio (programs with total 
life cycle costs between $300 million and $1,000 million).
    Question 2. In your testimony you discuss an Integrated Investment 
Life Cycle as an end-to-end process that integrates strategy, 
resources, and capabilities. Please describe this process and how this 
will improve acquisition management and save taxpayer dollars.
    Answer. DHS continues to enhance our enterprise-wide acquisition 
framework as a key element of integration strategy. In fiscal year 
2010, acquisition management represented nearly $18 billion of the 
Department's $55 billion budget. We have made progress in evolving 
acquisition management by refining our acquisition policy, processes, 
and procedures, particularly the ``front end'' planning and the ``back 
end'' program management phases to operate more seamlessly. Our goal is 
to have a disciplined oversight processes, Integrated Investment Life 
Cycle, that will improve DHS by ensuring our major acquisitions are 
effectively managed in order to maximize the value of every homeland 
security dollar.
    The Integrated Investment Life Cycle establishes a holistic view of 
how investments should be managed. DHS will improve the investment 
effectiveness at the ``front end'' by providing better linkage between 
requirements development, resource allocation, procurement, and program 
management. The model strengthens the ``front-end'' in a strategic 
phase with the involvement of the Department Strategy Council (DSC) and 
the Capabilities and Requirements Council (CRC). The DSC sets strategic 
direction, ensures mission needs are consistent with the strategy and 
provides overall programming guidance using the Integrated Planning 
Guidance (IPG) process. The proposed CRC rationalizes and harmonizes 
Department-wide capabilities and makes tradeoff decisions to inform 
Component and Department-level budget submissions. This structure will 
ensure that decisions are made to achieve our mission needs and to 
fulfill critical capability gaps.
    The ``Nexus'' or middle phase will continue to be the resource and 
allocation phase. Here we focus on verifying the affordability of 
capabilities defined in our Resource Allocation Plans (RAPs) and ensure 
that funding requests are consistent with strategy, leadership 
priorities, and the funding required for major investments. We conclude 
with the ``Program Implementation and Operations'' the ``back end'' 
phase. This phase focuses on performing oversight and execution of all 
acquisition investments. We analyze program performance data, and 
ensure major acquisition program baselines are managed. The purpose is 
to identify and mitigate program risks and make appropriate program 
decisions prior to realizing program failures (such as SBInet).
    Question 3. Does the Department have the authority it needs to 
oversee component acquisitions and enforce the policies that have been 
developed by the Office of Procurement Operations?
    Answer. The Department has the necessary authority for policy 
enforcement and oversight of the Components' major acquisition 
programs. The policy developed by the Office of the Chief Procurement 
Officer, Acquisition Program Management Division provides a path of 
authority for oversight of major programs by the Department at the 
Management Directorate level. All Component level 1 and 2 acquisition 
programs are reviewed by the Office of Program Accountability and Risk 
Management and Acquisition Review Teams that have Department-wide 
stakeholder representation prior to either the Deputy Secretary or the 
Under Secretary for Management (USM) approving Acquisition Decision 
Events. In accordance with the Management Directive 102-01, Acquisition 
Management (AD 102-01) must review and approve critical acquisition 
life-cycle documents before the programs move forward in the 
acquisition life-cycle stages. There can be improvement on the policy 
and the conformance of the component programs in complying with the 
oversight authority decisions and assigned action items. We are 
proactively addressing oversight and governance process improvement as 
outlined in the Department of Homeland Security Program Management and 
Execution Playbook developed by the USM.
    Question 4. Does the Department have a central point of contact to 
monitor technological acquisitions and ensure that equipment is 
interoperable across the Department and meets the Department's long-
term strategic plan?
    Answer. DHS Management Directive 0007.1 requires that the DHS Chief 
Information Officer (CIO) review and approve any IT acquisition in 
excess of $2.5 million. IT Acquisition Reviews (ITARs) ensure alignment 
with administration and Congressional priorities to effectively manage 
contracts and procurement risks, as well as with Acquisition Directive 
102-01. Each ITAR request goes through the following reviews: 
Investment, Enterprise Architecture, Information Security, Enterprise 
Services, Accessibility and Portfolio. Recommendations are provided to 
the CIO and a determination made for approval, disapproval, or 
conditional approval.
    The DHS Directive AD 102-01 outlines the Department's Acquisition 
Life Cycle Framework, Acquisition Review Process, and Acquisition 
Review Board to ensure consistent and efficient acquisition management, 
support, review, and approval throughout the Department, and links 
DHS's requirements resources and other processes (e.g. systems 
engineering, enterprise architecture).
    The DHS Systems Engineering Life Cycle Guide (SELC) applies to all 
DHS IT Systems and projects and establishes a common life cycle frame 
work used to guide DHS projects, regardless of the acquisition type and 
size (e.g. capital investment of IT and non-IT, enterprise services, 
major and non-major).
    The CIO is committed to carrying out the DHS mission in an 
effective and efficient manner. Components are required to annually 
obtain DHS CIO concurrence with IT infrastructure investments and 
Operations and Maintenance expenditure plans through a DHS CIO led 
review of an IT Services Portfolio submission.
    Additionally, Office of Management and Budget (OMB) issued a memo 
on August 8 entitled ``Chief Information Officer Authorities'' that 
focuses on, among other items, eliminating duplication and 
rationalizing agency IT investments to include IT Infrastructure, 
enterprise IT systems, and business systems. The DHS CIO drives the 
investment review process for IT investments and has responsibility 
over the entire IT portfolio. As part of the IT Reform Plan, OMB 
requires CIOs to ensure that IT portfolio analysis is an integral part 
of the yearly budget process.
    Question 5. What is your view on the Inspector General's 
recommendation that the Department should revive the Joint Requirements 
Council and make use of commodity councils in the acquisition process?
    Answer. DHS recognizes that the adequacy of requirements definition 
is essential throughout the acquisition cycle, but most critical during 
the planning phase. In 2003, DHS established a Joint Requirements 
Council to serve as a senior requirements review board to identify 
crosscutting opportunities and common requirements among DHS Components 
to ensure that the Department uses its resources wisely and in the best 
interest of the American public. Since this council dissolved, DHS has 
struggled to ensure Components had clear understanding and guidance on 
portfolio capabilities and requirements prior to procurement.
    In January 2011, DHS identified our objective to re-establish a 
requirements council to review and validate acquisition program 
requirements, establish standards, and eliminate unintended 
redundancies. To that end, we are establishing the Capabilities and 
Requirements Council (CRC) that will perform ``trade-off'' decisions, 
reconcile disagreements across program offices and ensure DHS strategic 
priorities are met. The CRC will be focused on closing capability gaps 
based on the DHS' key functional areas (e.g., domain awareness, 
screening, law enforcement). This will be accomplished by aligning 
requirements on the basis of broad portfolios, validation of investment 
strategies, approving analyses of alternatives and Operational 
Requirement Documents.
    This governance model will further enhance the implementation of 
Management Directive 102-01, Acquisition Management (MD 102-01), which 
established the overall acquisition lifecycle framework including a 
pre-planning and planning acquisition process. Required pre-planning 
documents and activities ensure the Department has a validated need for 
a capability, understands the requirement, has developed preliminary 
cost estimates, and has reviewed alternatives before a new acquisition 
is undertaken. Mission Needs Statements (MNS) are approved by the 
appropriate Acquisition Decision Authority. Each program is also 
required to develop and submit for approval three critical planning 
documents, these are Capability Development Plan (describes what 
capability would be delivered to DHS, including the need/gap that will 
be filled by the proposed program), an Operational Requirements 
Document (ORD), and a Concept of Operations (CONOPs).
    To support DHS Component awareness, understanding, and use/
adaptation of proven best practices, we plan to establish a 
Requirements Best Practice Community, which will provide DHS program 
managers with proven tools, processes, and standards, as well as expert 
support. This will establish a more defined and repeatable approach to 
requirement definition to ensure that our process guidance explains the 
information needed for success and support use of best-in-class 
requirements management and execution tools and standardize operating 
models for how to best use the tools. The membership of each Community 
will include subject matter experts (SMEs) in that discipline from 
across the Department. While these SMEs will continue to reside and 
report to their home organizations, they will be available for 
consultation regarding their expertise in a particular practice which 
will aid in both mentoring and training throughout DHS.
    Question 6. Collectively the private sector has criticized the 
Department for failing to foster communication and coordination between 
individual components and with the Department.
    How can DHS work to increase information sharing between components 
and with the Department to prevent these redundancies and overall 
increase efficiency?
    Answer. The Department continues to foster communication and 
improve coordination among components and between its Components 
through multiple efforts, including full peering to OneNet; mature 
Enterprise Architecture with comprehensive segment portfolios; robust 
enterprise governance with SELC monitoring aligned with key milestones 
and active guidance by ESCs; private cloud computing aligned with the 
25 Point Implementation Plan; secure IT infrastructure that spans 
Policy Enforcement Points and other Defense-in-Depth controls, as well 
as the Federal Information Security Management Act of 2002 mandates; 
green IT infrastructure through accelerated data center consolidation: 
and full accessibility aligned with Section 508. These efforts increase 
information sharing and efficiency by preventing redundancies, 
minimizing risks, and leveraging the Department's investments.
    The Management Directorate and the DHS Private Sector Office (PSO) 
work with DHS Components to enhance internal and external visibility of 
existing efforts in order to strengthen Component collaboration on 
areas that impact the private sector. DHS Headquarters and Operational 
Components actively engage and coordinate with a wide variety of 
private sector partners in support of Department-wide initiatives 
including, but not limited to: Increasing cybersecurity awareness; 
fostering a National culture of preparedness; maximizing the 
effectiveness of the National Network of Fusion Centers; and enhancing 
the security and resilience of the National critical infrastructure.
    The PSO leads, and participates in, multiple cross-functional 
working groups and task forces to develop and implement corrective 
action plans to more efficiently and effectively engage the private 
sector. For example, PSO leads the Private Sector Information Sharing 
Working Group, which meets monthly, to discuss progress on implementing 
recommendations formed--directly from private sector feedback--to 
develop more timely and actionable communications with private sector 
partners. PSO also hosts a monthly call with DHS Component 
representatives with private sector engagement roles and 
responsibilities to provide a forum for sharing private sector outreach 
activities, best practices, and lessons learned and to highlight 
upcoming activities to improve coordination.
    As part of the Department's on-going efforts to improve information 
sharing, the Office of the Chief Information Officer in the Management 
Directorate and PSO are working with other Component representatives to 
develop an intra-DHS Homeland Security Information Network (HSIN) 
Private Sector Shared Community of Interest to enable increased 
transparency and synchronization of private sector engagement efforts. 
PSO is also leading the development of the DHS Private Sector Blueprint 
that outlines existing DHS private sector engagement to: (i) The 
identify of any gaps or unnecessary areas of overlap (some overlap/
redundancy should and always will exist), (ii) develop strategies to 
strengthen Component collaboration; and (iii) increase opportunities to 
leverage existing programs, efforts, and partnerships for the benefit 
of the whole Department.
    The Office of the Chief Procurement Officer's (OCPO) Strategic 
Sourcing Program also fosters coordination and collaboration among the 
DHS Components and Headquarters Offices in the identification, 
planning, and execution of Department-wide procurements. These 
Department-wide procurements are developed and implemented by a team 
comprised of representatives from each component to ensure the needs of 
the entire Department are met, eliminating the need for individual 
component specific procurements. In addition, the Strategic Sourcing 
Program Office holds quarterly meetings with component representatives, 
which are designed to increase the communication and awareness of 
requirements and potential strategic sourcing initiatives both within 
the components and Department-wide. The activities of the Strategic 
Sourcing Program Office increase efficiency, reduce redundancy, and 
leverage the DHS buying power for commodities and services across the 
Department.
    In addition, DHS is engaging with its private sector partners 
through periodic meetings with the National Infrastructure Advisory 
Council (NIAC), a group comprised of private sector stakeholders which 
advises the President on the security of critical infrastructures which 
include banking and finance, transportation, energy, manufacturing, and 
emergency Government services, on discovering new methods to enhance 
information sharing.
    Question 7. How has the Acquisition Review Board improved the 
management and oversight of acquisitions at DHS? How have you increased 
oversight of identified high-risk acquisitions?
    Answer. To improve acquisition management, DHS developed and 
implemented a comprehensive approach establishing acquisition 
management standards and oversight. Directive 102-01, Acquisition 
Management (issued as interim in November 2008 and final in January 
2010) established the overall acquisition management framework for all 
major acquisition programs and formalized Acquisition Review Boards 
(ARBs) for oversight and governance. As the senior management cross-
component board within the Department, the ARB determines whether a 
proposed acquisition has: (1) Met the requirements of key phases in the 
acquisition life cycle framework and (2) is thus able to proceed to the 
next acquisition phase and eventual full production and deployment. The 
ARB reviews the program's status, progress against the current program 
plan, and current risks and other program issues. The ARB assesses the 
program's progress and establishes criteria for further execution. The 
ARB's findings, decisions, and actions are documented in an Acquisition 
Decision Memorandum (ADM).
    To enhance oversight between Acquisition Review Boards, Component 
Portfolio Reviews were implemented in 2009 as a means for the 
Department to review and collaborate with each major program on an 
annual basis as well as gaining insight on the Components' acquisition 
oversight processes and staff. This process, jointly executed by the 
Component and the Department, supports management of the Component's 
acquisition portfolio and strengthens Departmental governance and 
oversight. The final report of the review is signed by the CAE and the 
Executive Director, Office of Program Accountability and Risk 
Management. These reviews provide insight to systemic acquisition risks 
across the Department. By the end of fiscal year 2010, nine Component 
portfolio reviews were held. During these reviews, 61 major programs 
were examined (over 90 percent of the major program portfolio).
    The implementation of Directive 102-01, Acquisition Management has 
improved program oversight over the last 3 years. The ARB reviews the 
program's status, progress against the current program plan, current 
risks, and other program issues. The policy has resulted in DHS program 
having numerous interactions with many of DHS' major programs, and has 
allowed us to mitigate or avoid cost, schedule, and performance risks. 
Since early 2008, there have been more than 50 ARBs conducted. We 
submit a quarterly DHS Major Acquisition Status Report which serves to 
summarize the current health and highlight our enhanced oversight of 
these programs.
    Question 8. What policies or procedures are in place to improve 
collaboration, coordination, and awareness of technologies and 
capabilities across components of the Department, the Federal 
Government, universities, and the private sector when developing 
program requirements for acquisitions?
    Answer. The Science and Technology Directorate (S&T) has fostered a 
number of programs and engagements with Components, other Federal 
agencies, universities, and the private sector to improve 
collaboration, coordination, and awareness of technologies. The Under 
Secretary for Management (USM) organizations have been collaborating 
with S&T on a number of these initiatives. One of USM's internal 
initiatives is to support DHS Component awareness, understanding, and 
use/adaptation of proven best practices. USM plans to establish a 
Requirements Best Practice Community and S&T will establish a 
corresponding Community for Test and Evaluation. These communities 
provide DHS Components and program managers with proven tools, 
processes, and standards, as well as expert support. Each community 
will establish a more defined and repeatable approach to requirement 
definition to ensure that our process guidance explains the information 
needed for success. They will support use of best-in-class requirements 
management and execution tools as well as standardize operating models 
for how to best use the tools.
    To educate stakeholders on the DHS requirements process and how 
organizations like S&T address the needs of the DHS Operational 
Components, first responders, and private sector partners through this 
process, the DHS Private Sector Office and S&T jointly published 
Harnessing the Valuable Experience and Resources of the Private Sector 
for the Public Good: Innovative Public-Private Partnerships. This book 
demonstrates how sharing information on detailed operational 
requirements and conservative estimates of potential available markets 
can lead to the cooperative development of needed capabilities. It also 
contains information on S&T's commercialization initiatives that foster 
mutually beneficial public-private partnerships in order to field 
products, technologies, and/or services.
    Science and Technology has also established twelve Centers of 
Excellence (COE) at universities to develop new technologies, tools, 
and advanced methods to support the DHS mission. COE focus areas 
include transportation security, food protection, natural disasters, 
maritime, border security, immigration, explosives detection, etc. 
Research priorities at each COE are carefully defined and vetted with 
relevant subject matter experts from across DHS and the Federal 
Government through formal workgroups. Many COE projects are jointly 
funded by DHS components or other agencies, further enhancing 
collaboration and coordination. We are also working together on a 
number of IT technology pilot projects with the objective to engage 
industry partners and operational personnel to evaluate systems before 
establishing acquisition programs. The goal is to ensure future 
acquisitions provide necessary capabilities and requirements before 
executing programs and allocating significant funding to these 
initiatives.
    Question 9. The private sector has stated that there are instances 
where program requirements are modified after an award of a contract. 
How have these modifications lead to contract cost overruns and time 
delays?
    Answer. Since the circumstances of each program and any related 
requirements modifications are different, it is not possible to provide 
a specific answer to this question. To ensure that contract 
requirements have been adequately identified at the time of award, the 
FAR requires that acquisition planning begin as soon as the need is 
identified. As a result, at the time of contract award, the 
requirements should have been vetted among all interested parties, with 
close coordination between the requiring activity and the procuring 
activity.
    Even with such planning, requirements modifications will occur due 
to a variety of circumstances. Some examples of these requirements 
modifications include but are not limited to: Changes in funding 
levels, changes in strategy, and development of new technologies. The 
program manager attempts to mitigate the impact of any such changes; 
however, depending on the particular circumstances, there will be 
instances where contractors may be required to revise their estimated 
cost and may require time to re-direct their efforts. The result can 
contribute to cost overruns and schedule delays, which is why we are 
striving to improve the ``front end'' of the acquisition process.
    DHS will improve the investment effectiveness at the ``front end'' 
by providing better linkage between requirements development, resource 
allocation, procurement and program management. We can ensure planning 
documents and activities have been accomplished to validate capability 
needs, define business requirements, perform preliminary cost 
estimates, and perform alternatives analysis before an acquisition is 
undertaken. With the proper pre-planning work, an appropriate 
acquisition strategy can be defined. This will allow potential vendors 
to clearly understand the Government's requirements during the 
solicitation phase resulting in contracts with appropriate solutions 
and scope to be put into place at time of contract award.
    Question 10. What policies and/or procedures do you have in place 
to ensure regular communication with and support from State and local 
entities and on-the-ground operation personnel utilizing the new 
technology and capability when developing program requirements and 
modifying program requirements?
    Answer. While Components are responsible for engaging all of their 
stakeholders to define program requirements, the Management Directive 
102-01, Acquisition Management will validate this communication has 
taken place at different points throughout the acquisition life cycle. 
The initial point where this occurs is with the definition of the 
Mission Needs Statement, where the Component or program defines what 
mission gap exists. We ensure Department communication occurs through 
the validation of the mission need against Department's strategic 
direction (Integrated Planning Guidance) and priorities, and the Office 
of Policy.
    The most significant engagement point in the Management Directive 
102-01, Acquisition Management is through the development of the 
Analysis of Alternatives. Here we ensure that the Department has a 
validated need for a capability, understands the requirement, has 
developed preliminary cost estimates and has reviewed alternatives 
before a new acquisition is undertaken. The Component Acquisition 
Executive is responsible for reviewing and approving the Analysis of 
Alternatives.
    Finally, the Component or Program develops an Operational 
Requirements Documents (ORD) that defines the business level 
requirements to fulfill a mission need. We validate that the proper 
interaction has been completed across the stakeholder community to 
define these requirements as key performance parameters and ensure the 
need is not being filled by an existing system or another planned 
program. The purpose is to identify synergies as well as efficiencies 
necessary for the Department to meet requirements and achieve DHS 
enterprise architecture, as applicable.
    All acquisition program artifacts are reviewed by the Office of 
Program Accountability and Risk Management (PARM) prior to a request 
for a decision on an Acquisition Decision Events (in accordance with 
the MD 102-01) by the Deputy Secretary or the Under Secretary for 
Management (USM) who must review and approve these critical planning 
documents before the program moves forward with the acquisition 
planning stage.
    Question 11. How does the turnover rate of program managers and 
contracting officers impact program requirement modifications, cost 
overruns, and time delays?
    Answer. Turnover of program managers and contracting officers is an 
inevitable occurrence, since no individual will stay in a particular 
job for perpetuity. The impact of such changes is twofold: (a) Filling 
the position with a capable replacement, and (b) the time required by 
the replacement to become familiar with the program so that he/she can 
manage it in an efficient and effective manner. In regards to capable 
replacements, DHS has implemented a strong certification program for 
program managers and contracting officers, which has resulted in a 
cadre of certified individuals that can fill gaps when turnover occurs. 
In addition, DHS is currently implementing an IT certification program 
to further fill potential gaps that may result from employee turnover. 
However, even when the vacancies are filled with qualified individuals, 
there will almost always be some time delays involved in a transition, 
as the program manager becomes familiar with the program strategy, 
funding, and other key elements, and the new contracting officer 
becomes familiar with the contracting strategy. In addition, as is the 
case with any other transition activity, the new program manager and/or 
contracting officer may decide to take the program or contract strategy 
in a different direction, based on their judgment of the cost/benefits 
involved in re-directing the strategy. This re-direction could then 
result in a modification to the program or contract requirements. As 
noted in our response to the prior question, this requirements 
modification may in turn result in a revised estimated cost and 
additional time for the contractor to re-direct their efforts.
    Question 12. Does the Department have a strategic plan for the 
acquisition workforce? What is the Department's plan to recruit, train, 
and retain acquisition professionals?
    Answer. Integrating the Department's people, structures, and 
processes to achieve the Department's mission goals is one of my top 
management priorities. The biggest challenge is to institute meaningful 
change without disrupting mission-critical, day-to-day operations. The 
``Integrated Strategy for High Risk Management'' plan, submitted to GAO 
in January 2011, detailed our Integrated Investment Life Cycle which I 
consider to be a holistic process to manage our investments.
    DHS recognizes that the adequacy of major Program Management 
Offices (PMOs) and Acquisition Oversight Staffs varies widely 
throughout the Department. The Department has issued a performance goal 
to improve acquisition execution across the Acquisition Portfolio by 
ensuring key acquisition expertise resides in major program offices and 
Acquisition Oversight Staffs. In support of this goal, the Under 
Secretary for Management (USM) directed a program office staffing 
assessment in fiscal year 2010. This assessment reviewed the staffing 
of Component major program offices and Acquisition Oversight staffs 
with a focus on determining the adequacy of key disciplines of 
Government personnel.
    Key findings of the assessment found:
   there is a lack of engineering and logistics expertise 
        across the Department;
   there is an absence of Cost Analysts/Cost Estimators across 
        the Department;
   interpretation of Component Acquisition Executive (CAE) core 
        staff requirements vary by Component;
   certification programs are in place for Program Manager and 
        Contracting Officer's Technical Representative (COTR); and
   certification programs for Logistics, Financial Manager, and 
        Cost Analysts/Estimators are newly established, and System 
        Engineering certification program is in development.
    Planned initiatives to address this staff deficiency include 
expanding the Acquisition Corps, especially in the program management 
(PM) area; and improving the quality of PM training. The purpose of the 
Acquisition Corps is to raise the standards of professionalism and 
performance within the PM discipline, especially in the requirements 
development and cost estimating phases. A fully-deployed Acquisition 
Corps will improve efficiency by leveraging resources based on a 
mission need, as opposed to hiring new employees. Furthermore, because 
Corps members will complete competency-based training to maintain their 
Corps status, the effectiveness of critical programs should improve. 
Like many Federal agencies, DHS does not have sufficient numbers of 
qualified and trained program managers. Under the direction of the 
Office of Chief Procurement Officer (CPO), the Department has 
established several DHS-specific curricula and certifications. During 
fiscal year 2011 and into fiscal year 2012, the OCPO is working with 
the OCIO to develop a certification curriculum for program managers in 
the information technology area. Training effectiveness will be 
measured and courses provided Nationally. Other agencies have 
participated in DHS courses and the feedback provided is positive. The 
enhanced training, along with the expansion of the Acquisition Corps, 
will significantly increase the acumen among program managers within 
DHS. It will also provide the flexibility to allocate resources, where 
needed, and create bench strength within the acquisition workforce to 
manage resource-challenged programs.
    The Department has already established seven acquisition 
certification programs. Each of the seven identifies the education, 
training, and experience necessary to effectively execute the 
responsibilities of that career field. Certification programs have been 
established for the following career fields: Contracting, program 
management, test and evaluation, business cost estimating, acquisition 
financial management, and logistics; DHS has also established a 
certification program in the Contracting Officer's Technical 
Representative specialty. Under development is the certification 
program for systems engineering and we plan to develop a certification 
program for IT program managers. Supplementing our certification 
program is our centralized acquisition training program. Our training 
program includes certification training as well as continuous learning 
classes in acquisition related topics. When appropriate, DHS customizes 
its acquisition training program to address applicable DHS policies and 
procedures. For example, in fiscal year 2010, DHS completed the 
development of its Program Management curriculum. The tailoring of 
classes enables DHS to educate its workforce on DHS acquisition 
policies and on best practices in program management thus fostering a 
culture of ``One DHS.'' In fiscal year 2011, DHS continues to develop 
course work specifically tailored to DHS policy and processes. For 
example, DHS is developing a fundamentals course in test and 
evaluation, systems engineering, and business cost estimating.
    The Acquisition Professional Career Program (APCP) serves as our 
succession plan for filling future acquisition workforce needs. The 
APCP is a 3-year development program that recruits high-caliber 
individuals into the following entry-level acquisition career fields: 
Contracting, program management, systems engineering, logistics, 
business, cost estimating, and acquisition information technology. 
During the program, participants receive acquisition as well as 
leadership training and obtain certification levels commensurate with 
their experience. Upon graduation, participants are assigned to 
component contracting and acquisition program offices as members of the 
DHS acquisition team. In fiscal year 2011, the Department reaped the 
benefits of this initiative by graduating 30 contracting specialists. 
Once fully implemented, the program will deliver 100 trained and 
certified new acquisition professionals to the DHS acquisition 
workforce every year to offset losses from retirements and transfers to 
non-DHS agencies.
    Finally, identifying and staffing program offices with the right 
people with the right skill sets are imperative to strengthening the 
acquisition management process. In 2010, the Department established a 
High Priority Performance Goal (HPPG) to ensure that key acquisition 
expertise resides in our major program and acquisition oversight 
offices. The Department has met or exceeded all goals related to 
strengthening the acquisition programs and oversight offices to ensure 
the Department of Homeland Security (DHS) major acquisitions are 
effectively managed in order to maximize the value of every DHS dollar. 
At the end of September 30, 2011, 94% of the Program Managers of major 
acquisition programs are properly certified in accordance with 
Department policy, exceeding the fiscal year 2011 target goal of 93%. 
Since the beginning of the fiscal year, we have increased the number of 
Program Management Offices (PMO) reporting that they have all five of 
their respective core positions filled or matrixed from 20 at the end 
of fiscal year 2010 to 34 and have increased the number of approved 
Acquisition Program Baselines (APBs) from 17 to 28 at the end of the 
fourth quarter fiscal year 2011. The current percent of major 
acquisition programs with a core team; signed APB; and meeting cost/
schedule/performance is 89%, exceeding the fiscal year 2011 goal of 
70%. All seven major operational Components have a Component 
Acquisition Executive (CAE) in place (100%). The total number of CAE 
staff positions filled has also increased from 25 to 42. The current 
percent of Component acquisition oversight organizations with core team 
positions filled or matrixed is 75%, meeting the fiscal year 2011 goal 
of 70%. The percent of PMOs with major acquisition program core team 
positions filled is roughly 70%, which minimally achieves the 
Department's goal. Additionally, this year, the Under Secretary for 
Management has implemented major initiatives to include building the 
Department's Program Management Corps by strengthening training and 
certification and expanding the current acquisition mentoring program.
    The DHS Appropriations Act of 2012 provided a total of $78,000,000 
to OCPO, including an increase of $3,403,000 to enhance DHS acquisition 
capabilities.
    Question 13. The private sector believes that the DHS procurement 
process could be improved by increased communication and by bringing to 
the table early in the procurement process end-users, industry, program 
managers, and contracting officers.
    What measures have DHS taken to address this concern?
    How does DHS share with industry its mission needs and what 
measures are you putting in place to improve that dialog?
    Answer. The Department of Homeland Security (DHS) recognizes that 
effective vendor engagement in the acquisition process is critical to 
competition, the identification of commercial item solutions, and the 
realization of savings. Following is a series of functions, procedures, 
and policies that the Department has in place to inform and promote 
vendor engagement, enhance competition and transparency.
   The DHS Office of the Chief Procurement Officer (OCPO), in 
        conjunction with the Office of General Counsel and its Ethics 
        Office provide on-going guidance to the DHS acquisition 
        community regarding responsible and constructive exchanges with 
        industry.
   DHS's Office of Small and Disadvantaged Business Utilization 
        (OSDBU) and Component Small Business Specialists provide active 
        small business support through:
     Outreach--participation in over 100 functions per year, 
            and on-going dialogue with small businesses;
     Preparation and Dissemination of the DHS Acquisition 
            Forecast--generally issued twice a year and updated on an 
            on-going basis.
   OSDBU, with Component support, sponsors popular monthly 
        Vendor Outreach Sessions, comprised of a series of pre-arranged 
        15-minute appointments between DHS Small Business Specialists 
        and representatives from small business communities. These 
        sessions provide the small business community with an 
        opportunity to discuss their capabilities and learn of 
        potential procurement opportunities. Until recently, when the 
        Small Business Central Event Listing was launched on 
        FedBizopps.gov, session and registration information was posted 
        by OSDBU on www.dhs.gov.
   DHS has an active full-time Ombudsman and Industry Liaison 
        who provides on-going information and advice to industry and 
        Components alike.
   For a number of years, DHS has hosted an annual DHS Industry 
        Day. Industry Day activities include panel discussions from 
        each Component moderated by the respective DHS Head of 
        Contracting Activity (HCA). The panels provide acquisition 
        planning information for the specific Component/Contracting 
        Activity. This 1-day event provides a forum by which the 
        Department can communicate its requirements and increase 
        competition by sharing useful information. Industry Day is open 
        to representatives of both small and large businesses.
   Various DHS Components plan and host Industry Days, issue 
        draft requests for proposals, requests for information (RFI), 
        and hold pre-solicitation conferences and de-briefings on an ad 
        hoc basis.
   The DHS acquisition training, regulations, and policy 
        supplement Federal Acquisition Regulation guidance related to 
        communication with vendors, and establish frameworks that 
        promote responsible and constructive exchanges with industry, 
        e.g., the DHS Market Research Guide's Rules for Meeting with 
        Industry Representatives and Guidelines for One-on-One 
        Discussions; DHS Procurement Ethics Training contains specific 
        guidance regarding pre-award exchanges with vendors, methods 
        for communicating with vendors, the proper handling of source 
        selection, contractor bid, and proposal information.
    To demonstrate DHS's commitment to effective communication with 
industry, Dr. Nick Nayak, DHS Chief Procurement Officer, has added 
Quality Industry/Government Communication as one of the OCPO strategic 
plan's four major priorities. This priority incorporates the DHS plan 
for improving communication with industry during the acquisition 
process developed in response to the Office of Federal Procurement 
Policy's February 2, 2011, memorandum entitled `` `Myth-Busting': 
Addressing Misconceptions to Improve Communication with Industry during 
the Acquisition Process.''
    On May 4, 2011, the OCPO issued Acquisition Alert 11-18, 
``Department-wide Plan for Improving Communication with Industry During 
the Acquisition Process.'' The Acquisition Alert, issued to DHS Heads 
of the Contracting Activity (HCAs), and disseminated to the DHS 
acquisition workforce, included a copy of the ``Myth-Busting'' 
memorandum; identified existing DHS functions, procedures, and policies 
to inform and promote vendor engagement; and established a Department-
wide plan of action to be executed over the next year to enhance vendor 
engagement policies and practices.
    Acquisition Alert 11-18 called for the receipt of pledges from HCAs 
to the Chief Procurement Officer to enhance Component engagement with 
industry by:
   Designating an appropriately placed Component official to 
        serve as the Component Industry Communication Liaison with 
        responsibility for promoting vendor engagement by the 
        Component, and ensuring that Component contracting personnel 
        are aware of, and implement the DHS Market Research Guide's 
        Rules for Meeting with Industry Representatives and Guidelines 
        for One-on-One Discussions;
   Communicating early, frequently, and constructively with 
        industry in accordance with the Federal Acquisition Regulation, 
        Homeland Security Acquisition Regulation, Homeland Security 
        Acquisition Manual including the DHS Market Research Guide's 
        Rules for Meeting with Industry Representatives and Guidelines 
        for One-on-One Discussions, and Component supplements thereto;
   Striving to be more inclusive by including small businesses, 
        subgroups of small businesses, and vendors that the Component 
        has not worked with in the past in their communications with 
        industry;
   Annotating DHS's published procurement forecast to identify 
        procurements that are likely to involve opportunity for 
        additional communication with industry, e.g., pre-solicitation 
        conferences, draft requests for proposals, RFIs, Industry Days;
   Protecting non-public information including vendors' 
        confidential information and the Components' source selection 
        information;
   Promoting Component participation in Department and 
        Government-wide awareness campaigns to eliminate unnecessary 
        barriers to vendor engagement; and,
   Posting and routinely updating engagement events to include 
        industry days, small business outreach sessions, pre-
        solicitation conferences, RFP question-and-answer sessions, 
        using the existing ``special notices'' function and the new 
        Small Business Central Event Listing on Government-wide systems 
        such as FedBizOpps (www.fbo.gov) in accordance with Acquisition 
        Alert 11-14 which provides detailed information on the Small 
        Business Central Event Listing on FedBizOpps).
    Every DHS HCA signed and submitted a Vendor Engagement Pledge to 
the OCPO by June 6, 2011.
    HCA Vendor Engagement Pledges were accompanied by Component 
Industry Communication Liaison designations. As indicated in the 
pledges, Component Industry Communication Liaisons are responsible for 
promoting vendor engagement by the Component, and for ensuring that 
Component contracting personnel are aware of, and implement DHS 
policies and procedures related to vendor engagement, e.g., the DHS 
Market Research Guide's Rules for Meeting with Industry Representatives 
and Guidelines for One-on-One Discussions. Component Industry 
Communication Liaisons will also be notified of, and responsible for, 
promoting Component participation in Department and Government-wide 
training opportunities and awareness campaigns to eliminate unnecessary 
barriers to vendor engagement. The DHS and Component Industry Liaison 
listing has been posted to the following DHS Internet site: http://
www.dhs.gov/xopnbiz/opportunities/industry-communication-liaisons.shtm.
    On August 16, 2011, Component Industry Communication Liaisons will 
meet with representatives from the OCPO, including the Chief 
Procurement Officer and DHS Ombudsman, who will establish expectations 
regarding the Industry Communication Liaisons' roles and advise them of 
Industry/Government communication enhancement interests and needs, DHS 
policies and procedures related to vendor engagement, and the various 
emerging and available tools for enhancing communication with industry. 
Component Industry Communication Liaisons will be tasked to work with 
their respective HCAs to develop Component fiscal year 2012 action 
plans to promote enhanced vendor communication.
    Additional actions planned or taken to enhance communication with 
industry include:
   The DHS Acquisition Planning Guide (Appendix H to Homeland 
        Security Acquisition Manual (HSAM) Chapter 3007) has been 
        amended to require that acquisition plans for major system 
        acquisitions as defined in DHS Directive 102-01 ($100 million 
        in annual expenditures (for services) and $300 million (for 
        supplies)), which implements FAR Part 34, include a vendor 
        engagement strategy (as identified in the ``Myth-Busting'' 
        memorandum) or justify why those steps are unnecessary. DHS 
        policy will also be amended to encourage that acquisition plans 
        for non-major system acquisitions greater than $10 million 
        include a vendor engagement strategy. Written justifications 
        for not including a vendor engagement strategy will not apply 
        to non-major system acquisition plans.
   Through Acquisition Alert 11-14, ``The Small Business 
        Central Event Listing,'' issued on March 18, 2011, the DHS 
        contracting community was notified of the availability of the 
        new Small Business Central Event Listing, an automated search 
        tool on FedBizOpps (www.fbo.gov), designed to highlight small 
        business outreach and training opportunities. The Alert 
        required the DHS Office of Small and Disadvantaged Business 
        Utilization (OSDBU) and each Component to take immediate steps 
        to use the Small Business Central Event Listing feature on 
        FedBizOpps (www.fbo.gov) as a means of sharing new information 
        on small business outreach and training opportunities. Although 
        they are not required to use the FBO Small Business Central 
        Event Listing as their only source for posting small business 
        events information, OSDBU and DHS Component Small Business 
        Specialists were reminded to ensure that any event information 
        posted by them on DHS internet sites is consistent with the 
        information that they post to the FBO Small Business Central 
        Event Listing, and that all information posted is current, 
        complete, and accurate. The DHS OSDBU posts information to FBO 
        on small business events that are attended by all or the 
        majority of DHS Components.
    In addition, through their executed Vendor Engagement Pledges, DHS 
        HCAs also pledged to post and routinely update engagement 
        events to include industry days, small business outreach 
        sessions, pre-solicitation conferences, RFP question-and-answer 
        sessions, using the existing ``special notices'' function and 
        the Small Business Central Event Listing on Government-wide 
        systems such as FedBizOpps (www.fbo.gov).
   The DHS Competition and Acquisition Excellence Awards for 
        Promoting and Achieving Competition established in 2007, 
        recognizes outstanding initiatives and accomplishments that 
        contribute to the efficiency, economy, and improvement of 
        procurement operations and agency mission support through the 
        promotion of full and open competition and transparency; the 
        acquisition of commercial items; and challenging barriers to 
        competition. The Department considers the absence of effective 
        Government/Industry communication to be a major barrier to 
        transparency, competition, and the identification of commercial 
        item sources. Therefore, as part of its plan for improving 
        communication with vendors during the acquisition process, DHS 
        will incentivize responsible and constructive exchanges with 
        vendors by including the demonstrated implementation of an 
        effective vendor engagement strategy, e.g., hosting Industry 
        Days, issuance of draft RFPs, pre-solicitation conferences, use 
        of wikis to solicit comments, as a formal evaluation criterion 
        in the evaluation of Component team and individual nominations 
        for the DHS Competition and Acquisition Excellence Awards 
        Program.
   It is important to communicate appropriate information at 
        all stages in the acquisition process and especially valuable 
        to communicate with unsuccessful offerors at the end of the 
        award process. In April 2011, as part of the DHS Communications 
        Plan, OCPO amended the Homeland Security Acquisition Manual 
        (HSAM) to incorporate a new DHS Debriefing Guide (Appendix AA 
        to HSAM Chapter 3015). The Debriefing Guide summarizes 
        regulations and DHS policy regarding debriefings and 
        explanations of the basis for award to encourage communication 
        with unsuccessful offerors as a means of reducing 
        misunderstandings and protests; improving future proposals; and 
        obtaining information that improves DHS's acquisition process. 
        Beginning in May 2011, OCPO launched related debriefing 
        training for the DHS contracting community.
   On July 6, 2011, DHS announced in FedBizOpps.gov the July 
        11, 2011 release of its Acquisition Planning Forecast System 
        (APFS). The APFS is the Department's updated acquisition 
        planning and forecasting system which provides real-time access 
        to the DHS Forecast of Contract Opportunities. The user-
        friendly interface to APFS will allow businesses to use a 
        number of search criteria to narrow their search for business 
        opportunities information and download forecast entries of 
        interest into Excel for further analysis. The APFS is 
        accessible at: www.dhs.gov/xopnbiz.
   Through the Department's Ombudsman, OSDBU, Component 
        Industry Liaisons and HCAs, DHS plans to follow-up with 
        employees and industry representatives within 6 months of 
        posting the DHS Vendor Engagement Plan (in accordance with the 
        Office of Federal Procurement Policy's February 2, 2011, 
        ``Myth-Busting'' memorandum, agency Vendor Engagement Plans 
        must be publically posted following Office of Management and 
        Budget review and clearance) and periodically thereafter, to 
        further refine and improve communication. Post-award surveys 
        will solicit comments and suggestions from Contracting 
        Officers, Program Managers, and offerors for large, complex 
        procurements. Feedback will also be sought as a part of 
        debriefings and focus group meetings.
    Question 14. Many acquisition programs have failed to provide full 
cost-benefit analyses in the early stages of the acquisition process. 
This has put DHS at risk for cost overruns and performance shortfalls.
    Why are acquisition programs being approved without these important 
documents?
    Answer. In November 2008, DHS implemented a comprehensive approach 
establishing acquisition management standards and oversight through the 
issuance of Directive 102-01, Acquisition Management (final in January 
2010). This acquisition management framework formalized Acquisition 
oversight and governance for all programs. Oversight of Level 1 and 2 
is performed by DHS Under Secretary of Management, while level 3 
programs are handled by the Component Acquisition Executives (CAE). 
This tiered oversight model established a standard process for 
acquisition and program management oversight, policy, and guidance to 
ensure statutory, regulatory, and higher-level policy requirements are 
fulfilled.
    The implementation of this directive improved the pre-planning 
acquisition process. Pre-planning documents, including Analysis of 
Alternatives (which includes a Cost Benefit Analysis) ensures that the 
Department has a validated need for a capability, understands the 
requirement, has developed preliminary cost estimates and has reviewed 
alternatives before a new acquisition is undertaken. The Component 
Acquisition Executive is responsible for reviewing and approving the 
Analysis of Alternatives. All acquisition program artifacts are 
reviewed by the Acquisition Program Management Division (APMD) before 
coming forward for Acquisition Decision Events (in accordance with the 
D 102-01) and approved by either the Deputy Secretary or Under 
Secretary for Management (USM) who must review and approve these 
critical planning documents before the program moves forward with the 
acquisition planning stage.
    In rare cases when a program is authorized to proceed without 
formal document approval, an Acquisition Decision Memorandum is 
prepared identifying the corrective actions and time frame a program 
must resolve them. Programs do not proceed through the acquisition life 
cycle until this occurs. To further improve this, we are developing a 
risk management element within our decision support tool as well as a 
standard criterion to evaluate program risks. This module will provide 
for a centralized means to track risks both at the Department and 
Component level. The variety of venues the Department uses to review 
programs strengthens risk management. ARBs, portfolio reviews, and day-
to-day contact all aid in identifying risks faced by programs.
    Question 15. In your testimony you lay out a plan to improve the 
acquisition process at DHS to ensure that all acquisition programs have 
solid and well-defined program requirements.
    How will all these new councils and boards ensure that the 
acquisition process runs smoothly?
    How long will it take before we will start seeing improvements in 
the acquisition process?
    Answer. Soon after my arrival at the Department, I convened my 
senior leadership team to re-energize previous efforts to transform 
DHS, ``knitting the Department'' together into a more cohesive, well 
functioning Department. Integrating the Department's people, 
structures, and processes to achieve the Department's mission goals is 
one of my top management priorities.
    In January 2010, the Department issued an initial integration plan, 
which focused on seven management initiatives. In January 2011, the 
Department issued an enhanced plan, ``Integrated Strategy for High Risk 
Management.'' The enhanced strategy was developed in collaboration with 
Headquarters and Component leadership and addressed many of the GAO's 
recommendations that have been unresolved since 2003. While there 
continued to be fundamental challenges across our management functions, 
I am pleased that GAO has recognized the Department's progress. In a 
transformed state, our mission goals will drive strategies and the 
effectiveness of those strategies will be measured by key performance 
indicators or outcomes. I am striving to change the old paradigm where 
budget submissions arbitrarily drove strategy. In the new model, my 
strategic priorities, currently defined in the Quadrennial Homeland 
Security Review (QHSR) will drive operating budgets.
    DHS will improve the investment effectiveness at the ``front end'' 
by providing better linkage between requirements development, resource 
allocation, procurement and program management. The model strengthens 
the ``front end'' through strategic phasing performed by the Department 
Strategy Council (DSC) and the Capabilities and Requirements Council 
(CRC). The CRC will perform ``trade-off'' decisions, reconcile 
disagreements across program offices and ensure DHS strategic 
priorities are met. It will focus on closing capability gaps based on 
the DHS' key functional areas (e.g., domain awareness, screening, law 
enforcement). This will be accomplished by aligning requirements on the 
basis of broad portfolios, validation of investment strategies, 
approving analyses of alternatives and Operational Requirement 
Documents.
       Questions From Chairman Michael T. McCaul for Tara O'Toole
    Question 1. The Government Accountability Office just released a 
report describing the Transportation Security Administration's (TSA) 
failure thus far to implement its 2010 requirements for explosives 
detection systems. One of the reasons GAO cited for this lapse is that 
TSA and S&T have experienced challenges in collecting explosives data 
needed to procure and deploy systems that meet those requirements.
    While it is understandable that scientific endeavors like this can 
be unpredictable, on the other hand, does the process somehow need to 
be revised so that industry is not gearing up to meet requirements for 
an acquisition that realistically, simply may not happen due to 
scientific challenges?
    What can we learn from this experience so that we do not find 
ourselves in a similar position in the future?
    Answer. S&T concurs with GAO's recommendation that changes need to 
be made to the development and acquisition processes. To ensure that 
TSA has the information it needs to effectively set requirements for 
future detection systems, S&T is working closely with TSA at all levels 
to better align S&T research and development programs with TSA's 
priorities and acquisition schedules. This allows S&T program managers, 
who are overseeing system development and testing and evaluation, as 
well as conducting research and gathering data, to establish realistic 
expectations of the scientific challenges and likely research time 
frames.
    The time required for research and discovery is, of course, 
inherently difficult to predict. In this case, delays in collecting 
research data that support TSA acquisition were caused by unexpected 
technical and safety issues not previously encountered in explosives 
characterization and detection programs. TSA must establish aggressive 
acquisition schedules to ensure the rapid deployment of new technology; 
enhance security capabilities to meet emerging threats; and satisfy 
budget deadlines established by the use of ARRA funds. S&T and TSA are 
collaborating on the development of more effective program management 
practices to address these issues.
    One outcome from this experience was the development and commitment 
to a joint TSA/S&T research and development strategy (documented in 
Aviation Security Technology Research and Development Strategy--
attached) that provides a cohesive vision for technology development 
and will facilitate the successful transfer of technologies.
    In addition to working with TSA, S&T is striving to collaborate 
closely with industry during the research and development process. By 
engaging industry as programs are being defined, S&T will be better 
positioned to anticipate industry's production capabilities to meet 
potential TSA requirements. Industry will also be brought into the 
program development cycle earlier so that they have a more accurate 
understanding of the Department of Homeland Security's needs.
    Question 2. Please describe the process by which the components 
engage you when they plan to acquire technology--that is, do they come 
to you for assistance when their acquisitions hit a certain cost 
threshold? If they don't come to you, is anyone assessing whether the 
technology is sufficiently mature for acquisition or whether it needs 
more R&D? Have there been any acquisitions that you know of in which 
you were not involved, but should have been?
    Answer. The components are not required to consult S&T when 
planning to acquire technology, and in the past have not generally done 
so. Between 2007 and 2010, components sought S&T assistance through the 
Capstone Integrated Project Team (IPT) process, a practice which 
allowed the components to prioritize desired technological solutions to 
operational problems that required research and development 
investments. S&T then designed and pursued research and development 
efforts according to budget limitations and technological feasibility. 
Some of these efforts led to product acquisition, but historically S&T 
has not played a significant role in DHS acquisitions--except to 
execute its mandated responsibilities in operational testing and 
evaluation at the ``back end'' of the acquisition cycle, typically just 
before a procurement decision is made. It is important to understand 
that operational tests assess compliance with the operational 
requirements established by the component. Creating such requirements 
is not easy (it has been referred to as a ``black art'') and 
necessitates a deep understanding of the technology being considered; 
operational needs and constraints; and life cycle cost factors. The 
evolution of the DHS Acquisition process now underway is intended to 
elicit and ensure that all acquisitions are governed by robust 
requirements.
    In November 2010, part of S&T's realignment was the establishment 
of the Acquisition Support and Operations Analysis (ASOA) group, which 
is intended to serve components' technical acquisition needs upon 
request. In past months, ASOA has responded to requests for assistance 
on several planned projects and on projects already underway. 
Additionally, S&T and the U.S. Secret Service (USSS) are engaged in an 
``Apex Project,'' which is designing a systems-based approach to 
technology acquisition for a specific aspect of USSS operations. In 
addition to delivering a systems analysis of potential technologies and 
their respective ``trade space'' (i.e., benefits, life-cycle costs, 
etc.) the project will pilot several possible technology options for 
consideration. We are also altering our research and development 
project management process to ensure that successful research can more 
easily transition into acquisition.
    The new S&T/Component Technology Investment Councils (STIC), which 
are now being established, will build on and strengthen the former 
Capstone IPTs. The STIC process will include engagement of component 
leadership and will enable components to request S&T technical and 
acquisition assistance, as well as request technological solutions.
    The Under Secretaries of S&T and DHS Management are both committed 
to making significant improvement in the DHS acquisition process and 
are devoting resources to this end. S&T routinely will be engaged in 
the ``front end'' of the acquisition cycle, beginning with reviewing 
the adequacy of technology requirements. In some cases, S&T may assist 
components in activities that precede the formal ``acquisition'' 
process--for example, in analyzing the operational problem or helping 
to conduct technology analysis of alternatives. S&T also participates 
in the DHS Acquisition Review Boards (ARBs), which are the highest DHS 
acquisition decision-making forums for acquisition programs. S&T's two 
members of the ARB are our Component Acquisition Executive and the 
Director of Operational Test & Evaluation. Through these 
representatives, S&T is able to provide input into the acquisition 
decision-making body regarding the technological and testing readiness 
of component acquisition programs before they advance to the next phase 
of the acquisition process.
    Question 3. One of your responsibilities in providing acquisitions 
support is assessing the technical risks of technologies under 
consideration for procurement. That is to say, your subject matter 
experts make assessments as to the maturity and suitability of 
technologies for their intended purpose, thereby avoiding major 
acquisitions mistakes and financial waste.
    Can you please tell the committee whether or not you have a formal, 
metrics-based process in place to comprehensively assess such technical 
risks? If not, when do you plan to implement such a system to ensure 
consistency and rigor across the Department's procurements?
    Answer. S&T uses a standard Technology Readiness Level process to 
assess the technological maturity of projects and programs within a 
research and development context. This metric-oriented process includes 
standard definitions for nine readiness levels in research and 
development. TRLs do not, however, assess the suitability of a 
technology for certain applications or allow reliable comparisons of 
different technologies. S&T's portfolio review process, to which all 
S&T research and development projects are subject on an on-going basis, 
includes several metrics for assessing ``technical risk.'' Within the 
context of an on-going acquisition, iterative developmental testing 
against established requirements is essential to mitigate technical 
risk. Developmental testing is the responsibility of the component. 
S&T, as the designated operational test authority for DHS, oversees 
operational testing prior to making procurement decisions.
    S&T is the co-chair of a new Technology, Science & Acquisition Risk 
Working Group, which is part of the Department's Risk Steering 
Committee. This working group will continue to standardize the 
Department's approach to measuring technological risk across its 
investments.
    Question 4. How do you prioritize your research efforts--are the 
customers involved? Is this process agile so that it can be responsive 
to unanticipated and emerging threats?
    Answer. At the strategic level, the directorate's priorities for 
areas of research, development, and analysis are derived from an 
understanding of near- and long-term threats, National needs, and DHS 
mission needs and operational vulnerabilities, as articulated in the 
administration's National Security Strategy, the Quadrennial Homeland 
Security Review (QHSR), and the capability gaps and operational 
requirements of DHS components and first responder communities as 
established through the STIC process. Each proposed ``new start,'' as 
well as each on-going project in our research and development 
portfolio, undergoes an on-going review to ensure that it remains 
relevant, feasible, and effective.
    In reviewing the portfolio, we study written materials, listen to 
the project manager's oral presentation, and carefully analyze the 
project's likely impact and feasibility (or ``riskiness''), measuring 
these attributes against specific metrics determined by S&T with input 
from the operating components. These metrics establish a framework to 
address elements essential to ensuring that the program will help DHS 
meet one or more of its missions, as defined in the QHSR. These 
elements include:
   Relevance.--To what extent are the project's product(s) 
        aligned with a concept of operations?
   Clarity of customer need.--Are the customer's requirements 
        clear?
   Nature of customer involvement.--Is the team closely 
        collaborating with the customer to understand, define, and 
        agree upon project details?
   Impact potential.--Do the project's product(s) provide 
        advantages (such as speed, quality, affordability, superior 
        concept of operation or breadth of deployment) over the 
        customer's current approach to dealing with the problem?
   Research leadership.--Has this project resulted in 
        accomplishments (publications, patents, awards, impact on high-
        visibility programs or personnel development) that will 
        position the directorate as a research leader?
   Innovation.--Does the project try to realize its objectives 
        in a way that others have not previously considered or 
        exploited?
   Technical/research feasibility.--How difficult are the 
        technical or research challenges facing this project?
   Project clarity.--How well is the project described or laid-
        out? Is it clear what the team will do? Is the problem well-
        defined? Is the approach clear?
   Transition likelihood.--Is there a clear path to transition? 
        To customer readiness? Are there any secondary issues related 
        to the concept of operation; proponency; budgeting, regulatory 
        or statutory realities; and business value?
   Technical maturity.--What is the life-cycle stage of the 
        core technology that enables this effort?
   Time-to-first-use.--When will the results of this research 
        be usable by a user in the field?
    Each project is evaluated and rated by a review panel composed of 
S&T leaders, DHS component representatives and independent technical 
experts. By measuring all of S&T projects against the framework, we 
establish a shareable view of all research and development within S&T. 
In so doing, we enable more strategic, longer-term budget decisions; 
ensure efficient delivery to the component or individual user; and 
cultivate effective communication throughout the process. We also 
continue to partner with DHS components through the S&T/Component 
Technology Investment Council (successor to the Integrated Product 
Team, or IPT) process to help its members develop and prioritize 
requirements that improve components' mission performance.
    Question 5. How does S&T provide for customer feedback throughout 
the development of a technology to ensure the technology will be useful 
and fit within any operational constraints?
    Answer. Component ``customer'' feedback has historically been 
provided to S&T via the Capstone IPT process and will be strengthened 
through the STIC process. Feedback has also been provided in working 
level IPTs between the components and S&T and via internal portfolio 
and strategy reviews. We have successfully piloted a new 
``partnership'' approach to research and development projects through 
the APEX projects now underway with USSS and Customs and Border 
Protection. We intend to emphasize customer engagement as a key 
variable in future decisions about research and development 
investments. All STIC requests for S&T to perform research and 
development will require endorsement by the component head or his 
designate. Any S&T investments beyond early, exploratory phase research 
will require the formation of a ``partnership'' between S&T and the 
component, with specific individuals, including operators representing 
the ``end users'' of the technology. This will help ensure on-going 
communication and collaboration between S&T and the operating units, as 
well as a realistic understanding of the pertinent operational 
constraints. S&T's research and development projects will also include 
progressively detailed estimates of needed pilot trials, training, and 
life cycle costs.
    Question 6. Does S&T have any formal annual or periodic review 
process where you and the divisions engage external experts in 
assessing research progress against established project milestones?
    Answer. We have established a process of on-going reviews of our 
entire research and development portfolio to ensure that we are: (1) 
Investing in technologies that will significantly improve DHS's efforts 
to help secure the country and (2) meeting the goals established by our 
partners in the operating components and the broader homeland security 
enterprise (HSE). We have committed to an annual review of our 
portfolio of basic and applied research and development and all 
proposed new projects. During this annual review we study written 
materials, hear a presentation by the project manager and carefully 
analyze the project's likely impact and feasibility (or ``riskiness''), 
judging these attributes against specific metrics determined by S&T 
with input from the operating components. These metrics establish a 
framework to address elements essential to programmatic success in the 
context of the DHS missions spelled out in the Quadrennial Homeland 
Security Review (QHSR). The framework assesses the project's overall 
impact on customer mission; transition of products to the field; 
investment in technology to position S&T for the future; coordination 
with customers to align projects with their requirements; and 
application of an innovative strategy. Each project is evaluated by a 
review panel composed of S&T leaders, DHS component representatives and 
independent experts. By measuring all of S&T's projects against the 
framework, we establish a transparent view of all research and 
development within S&T to enable more strategic, longer-term budget 
decisions; ensure efficient delivery to the component or individual 
user; and cultivate effective communication. These are the same review 
model and framework used by both Federal and private research and 
development organizations, including the prize-winning Army Engineer 
Research and Development Center.
    Question 7. What criteria does S&T use to determine whether it will 
task a Department of Energy (DOE) National Laboratory, other Federally 
Funded Research and Development Centers (FFRDC), universities, or the 
private sector with performing R&D to meet identified requirements?
    Answer. Selecting a performer to conduct a specific task or 
research and development project is one of the most important steps in 
research and development. It requires diligent investigation of 
potential performers, on-going evaluation and careful professional 
judgment. S&T has embarked on an effort to establish a disciplined, 
efficient approach to ``technology foraging''--the process of scanning 
the wide, dynamic horizon of research and development to identify, 
locate, and evaluate emerging or existing technologies, products, and 
services, as well as trends in the public and private sectors that 
could affect the development of current or future homeland security 
systems and architectures, S&T programs or operational needs.
    We are piloting possible approaches to technology foraging which 
meet S&T's purposes and financial constraints. Foraging services used 
by private-sector technology companies whose product sectors are 
specialized costs millions of dollars per year. Foraging across the 
broad range of technologies used and needed by DHS is extremely 
challenging.
    S&T attempts to select the best performer, basing each selection on 
the task requirements, but some groups have particular strengths.
    S&T relies on DOE laboratories to provide enduring capabilities, 
such as facilities, infrastructure, management systems, and highly 
trained personnel, to deliver critical homeland security solutions. For 
example, these laboratories are among the few facilities capable of 
testing certain characteristics of homemade explosives. When S&T 
enlists a DOE laboratory, it is because that laboratory possesses 
unique capabilities and expertise gained from decades of research and 
development in its field(s). For example, one laboratory's 
understanding of certain mathematical models of explosive effects, 
gained from its nuclear weapons missions, proved invaluable for 
modeling aspects of aviation security threats. The DOE laboratories 
also possess unique capabilities in high-speed computing and chip 
manufacturing, capabilities that are important to certain biodefense 
activities. Moreover, the DOE facilities invest a portion of their S&T 
funds toward building capabilities for future homeland security needs. 
Finally, these laboratories are especially suited to conduct basic 
research and investigations into complex, enduring, National security 
problems requiring multidisciplinary expertise.
    DHS Federally Funded Research and Development Centers (FFRDC) 
perform a variety of tasks, including systems engineering; conducting 
studies and analyses; and operating research laboratories. FFRDCs 
provide a unique service to the Government, serving as internal 
consultants. The FFRDC's broad, deep knowledge of DHS; their ability to 
start work quickly; and their ability to attract and retain high-
quality scientific, technical, and analytic expertise makes them ideal 
for certain tasks and problem sets. For example, the Homeland Security 
Studies and Analysis Institute (HSSAI) was able to rapidly establish a 
team and conduct an analysis of alternatives related to the original 
electronic fence along the Southern border. Some tasks require long-
term consultation, which the FFRDC are also suited to provide. Thus, we 
utilized the Homeland Security Systems Engineering and Development 
Institute (HS SEDI) to construct a ``systems analysis'' of aviation 
checkpoint security, a project that has yielded important insights and 
which is likely to continue as operations and threats evolve.
    Federally Funded Research and Development Centers provide an 
independent perspective on the critical issues that they address for 
their sponsor(s) and users. A Federally Funded Research and Development 
Center has access beyond the level of access common to the normal 
contractual relationship. It also has access to Government and supplier 
data (including sensitive and proprietary data) and to Government 
employees and facilities. A Federally Funded Research and Development 
Center may not use its privileged information or access to compete with 
the private sector.
    A great deal of innovative technology emerges from the private 
sector, particularly from small businesses. The directorate has a very 
active, award-winning Small Business Innovation Research (SBIR) office. 
Through that office, we are seeking better ways to reach out to 
companies that do not traditionally do business with the Government; 
this is the most important reason we are seeking an extension of Other 
Transaction (OT) authority. We have begun to step up our engagements 
with the private sector through ``industry days,'' which are intended 
to signal the Department's technology needs and priorities and to 
better understand companies' potential offerings.
    Traditionally, universities have conducted mostly basic research; 
however, this tradition is changing. Many of S&T's university Centers 
of Excellence (COEs) are producing technologies and analytical products 
of great interest to the Department. The work of these researchers is 
well-known to S&T. Now, DHS components are also increasingly reaching 
out directly to the centers. To date, DHS components have signed COE 
contracts worth approximately $22 million in research.
    The directorate works with the Department's Office of Procurement 
Operations (OPO) to reach the private sector, universities, and 
nonprofits. Any of these entities can respond to a number of S&T 
solicitations, and our Office of University Programs awards contracts 
to university consortiums to serve as centers of excellence for 
conducting homeland security research. S&T and OPO established 
selection criteria that includes past performance, availability of 
technical personnel, preparedness (for example, how steep will the 
learning curve be?), subject matter expertise, capabilities, such as 
facilities, and costs.
    Question 8. We realize there are a number of vacancies within S&T 
and it is not a unique problem you face in attracting technical experts 
from the private sector to Government service.
    In order to meet your goals, including providing Testing and 
Evaluation (T&E) and acquisition support to the components, do you 
believe you are adequately staffed or staffed with the appropriate 
expertise?
    Would any special hiring authorities help to attract the right 
expertise?
    Answer. The Testing & Evaluation area is mature and properly 
staffed. The broader acquisition support area is new to S&T. ASOA's 
missions and objectives have recently been completed. Currently, 
staffing needs are being met through the identification of new 
personnel and new billets and/or through the realignment of existing 
personnel. In general, attracting scientists and engineers to 
Government service is difficult, in part because there is still strong 
demand for these skill sets in the private sector and these 
professionals do not naturally consider Government as a career option, 
and also because pay scales are not competitive with the private 
sector. A big impediment to hiring technical experts is the extremely 
long time frames (upwards of 6 months) required to complete the Federal 
hiring and clearance process. S&T has made important use of ST, 1101, 
IPA positions and other special authorities to attract and rapidly hire 
technical professionals. While we have made great use of these 
authorities, they are intended to bring expert level staff into the 
Government. Additional direct hire authority for entry- and mid-level 
staff in the difficult-to-attract specialties in the engineering, 
science, and technology-related job series would help S&T become more 
competitive in the job market and build a solid stable of scientists 
and engineers within the Government. Similar authorities exist for 
other highly skilled professional series, such as legal and medical 
staff.
    Question 9. You mentioned that The Science and Technology 
Investment Councils (STIC) is currently being developed and that 
several of the components of it will be in place by the end of the 
fall.
    What is the date of when you are supposed to be completed with 
developing all of STIC?
    Are you currently on track for the development?
    When is a estimated date of when these developments will be 
implemented?
    Are you anticipating any problems from changing from the Capstone 
Integrated Product Teams process to STIC?
    Answer. The S&T/Component Technology Investment Council (STIC) plan 
is complete and is being socialized within the DHS component and 
headquarters organizations. The STIC process builds upon the Capstone 
IPT process but raises the focus to a more strategic level with 
individual components. We do not anticipate problems evolving from IPTs 
to STICs. Although research and development projects selected through 
the STIC process will require more ongoing engagement of the components 
than was usual under the IPT process, the big change will be the 
significant decrease in the S&T research and development budget and 
consequently, a far more competitive environment for selecting projects 
to pursue. The number of research and development projects in the S&T 
portfolio has decreased by 60 percent since 2010, from 258 projects to 
158 as of July 2011.
    Three STIC component teams will commence in the 1st quarter of 
fiscal year 2012 and we anticipate that three additional teams will 
begin in 2nd quarter fiscal year 2012. The remaining STIC component 
teams will start in 3rd quarter fiscal year 2012.
    Question 10. You have previously testified that work needs to be 
done ``transitioning projects through operational testing and pilots to 
adoption by the customer'' and on-the-ground operations.
    How can this transitioning process be accomplished in a more cost-
efficient manner?
    What obstacles inhibited piloting and testing procedures from being 
completed thoroughly before implementation in the past?
    What can be done to overcome those obstacles? What steps have you 
taken to increase oversight over review processes to ensure that R&D 
and project investment are completed on-time and in a thorough way?
    Answer. Successfully transitioning new technology from research and 
development to routine use is a complex process. It is essential that 
research and development begin with a detailed, accurate understanding 
of the purpose the technology is intended to serve, and a similar 
understanding of the user's operational needs and constraints, 
including cost factors. All these factors should be repeatedly 
reaffirmed and elaborated upon throughout the course of development, in 
consultation with the component leadership and the technology's 
intended users. A strong partnership between S&T and component 
authorities is needed to ensure that the research and development 
effort remains a priority and that the component is preparing to 
conduct appropriate operational testing, piloting training, and 
acquisition if the technology proves successful.
    Due to the urgent operational needs and the need to significantly 
leverage greatly reduced S&T budgets, the directorate is emphasizing 
the adaptation or adoption of technologies that have reached the late 
stages of development, or technologies in which others have invested or 
will invest heavily. We will seek to identify such research and 
development opportunities through technology foraging, as described in 
our response to questions 7 and 11.
    Question 11a. The contract and acquisition process has become slow 
and cumbersome and has failed to establish proper communication 
channels with customers and understanding of operational needs and 
constraints.
    What process do you have in place to identify operational needs 
that require technology solutions?
    Answer. We work with components to define S&T research and 
development projects. Historically, this partnership has been 
accomplished through the Capstone IPT process. However, S&T is 
transitioning to two new forms of partnership: (1) A more strategically 
focused process called the S&T/Component Technology Investment Council 
(STIC), and (2) APEX projects. STICs elevate participation to the most 
senior levels of our directorate and of each component. The goal of 
these STICs is to engage S&T and the components in a systematic manner 
to identify critical operational needs within and across components 
that require technology solutions and development by S&T. In addition, 
the S&T staff works closely with operators in the field to clearly 
understand mission needs and operational realities. At the component's 
request S&T has also begun to detail technical experts to particular 
component programs to help with specific operational problems and to 
acquire a deeper understanding of component needs and operations. An 
APEX project, meanwhile, must address high-priority problems and be 
reasonably amenable to the formulation of solutions within 18 to 24 
months. Each project's purpose and approach are codified in a charter 
signed by the Under Secretary for Science and Technology and the 
component's head. APEX projects are carried out by well-resourced, 
multidisciplinary teams that include both S&T professionals and 
operators.
    Question 11b. If a technology solution is needed, are your 
divisions directed to see if off-the-shelf technology is available or 
whether technology can be leveraged from other Government agencies 
before proceeding with an R&D effort?
    Answer. Yes. Such ``technology foraging'' is a requirement for all 
research and development projects. We recognize that such foraging can 
reduce both the cost and the time required for research and 
development. Accordingly, we actively seek partnerships that would 
leverage our own investments. Indeed, our 2010 realignment established 
the Research and Development Partnerships Group. That office provides a 
portal through which the Department can broadcast its technology needs 
and interests. The office also allows the directorate to efficiently 
scan the opportunities within the diverse, dynamic research and 
development community throughout the world. When assessing technology 
needs, we consider whether the solutions already exist; whether other 
parties are addressing these gaps; and whether there is an existing 
opportunity that DHS can leverage. We seek commercial-off-the-shelf 
(COTS) solutions from the commercial sector, other Government agencies, 
National laboratories, and universities. S&T is a member of IQT (In-Q-
Tel), a venture-enabled fund established to link the intelligence 
community with developments in certain areas of technology development 
and to leverage Government technology investments with private capital. 
We have several IQT projects under way.
    Question 11c. How have the new Apex projects helped to bridge the 
customer-developer communication gap and provided oversight?
    Answer. S&T develops APEX projects in partnership with the 
component to instill ownership and commitment by both organizations. 
Both the S&T Under Secretary and the component head sign a charter 
outlining the project's objectives, goals, and resources. This 
partnership allows S&T to fully understand the component's needs and 
mission. The component is a full partner and weighs in on requirements, 
planning, technology development, and employment of the final product. 
All APEX projects are conducted by teams consisting of S&T staff and 
component staff; all are well-resourced. Lessons learned from the APEX 
projects are being disseminated throughout other S&T project plans.
    Question 11d. How has S&T worked with DHS Component leaders to 
oversee project goals and continuously assess each project's progress 
on a case-by-case basis?
    Answer. S&T engages component leaders throughout the STIC process 
and APEX projects. As a result of these partnerships, both S&T and 
components dedicate staff and resources to the project. Component staff 
works with S&T to plan, define requirements and provide feedback by 
participating in working groups, testing and evaluation, program 
reviews, and other activities. This partnership helps ensure that S&T 
understands the components' requirements and meets them.
    Question 12. How has the Office of Private-Public Partnerships 
leveraged the innovative ideas and technologies of the private sector 
to DHS?
    What actions can be taken to enhance the level of technology 
foraging within the private sector?
    What acquisition and contracting processes inhibit this process 
from being completed in a cost-efficient and timely manner?
    Answer. DHS S&T's Office of Public-Private Partnerships (PPP), 
residing in the Research and Development Partnerships Group (RDP), is 
committed to ensuring that personnel both within S&T and throughout DHS 
are aware of the myriad of technological advancements underway in the 
private sector. As such, it has created a robust outreach capability 
designed to maximize DHS insight into the private sector and enhance 
the private sector's understanding of DHS requirements. Examples of 
this outreach include: Publishing ``Opportunities for the Private 
Sector,'' a guide designed to instruct the private sector on how to 
effectively work with DHS; publishing ``Developing Operational 
Requirements: A Guide to the Cost-Effective and Efficient Communication 
of Needs,'' which was designed to instruct operating components of DHS 
and other potential end-users of technology, such as first responders, 
on how to convey their needs to the private sector; and the sending of 
a Full Response Package to all private sector entities that contact DHS 
S&T.
    The creation of a repository of more than 600 companies and 3,800 
self-reported capabilities potentially aligned to DHS needs and 
requirements has resulted from this outreach. PPP updates and maintains 
this repository and program managers throughout S&T can access it as 
part of technology foraging activities to identify potential 
alternatives throughout the life cycle of a program.
    S&T understands that leveraging private sector and other public 
sector technologies, capabilities, and services can help provide needed 
high-impact knowledge and products to DHS stakeholders at increased 
cost savings and speed of execution. Though PPP and its member offices 
form a strong basis for technology foraging at S&T, we are also looking 
to work with Federally-funded research and development centers and 
industry partners to increase our foraging capabilities and to dive 
deeper into technology markets, on-going research, state-of-the-
science, and technology forecasting. Analysts from PPP are working with 
other organizations that perform technology forecasting to extract 
lessons learned and best practices and to build partnerships.
    S&T already has several acquisition and partnering vehicles in 
place to work with the private sector and other partners across the 
homeland security enterprise (HSE). Memorandums of Understanding, 
Memorandums of Agreement, Cooperative Research & Development Agreements 
and other non-procurement vehicles allow faster open information and 
knowledge sharing than the normal acquisition (contracting) methods. 
These vehicles enable S&T to gain useful and actionable information on 
products and activities relevant to the HSE needs that may be underway 
in the private sector, the National laboratories, university 
communities, and other Federal agencies.
    Question 13. A November 2008 GAO Report cited that ``many major 
investments lacked basic acquisition documents necessary to inform the 
investment review process.''
    What measures have you taken to address this?
    Is it a matter of simply needing better planning and oversight? Or 
do you believe that the acquisition process needs changing?
    Answer. We do not have detailed insight into why prior acquisition 
decisions were made. Since 2009, we have been engaged in the 
operational testing and evaluation aspects of acquisitions of a certain 
size through our Test & Evaluation and Standards office. In the past 18 
months, the directorate has become increasingly engaged in the design 
and implementation of the Department's acquisition process. As this 
process evolves, we will play an on-going role. The Department 
recognizes the need to improve the acquisition process; accordingly, it 
is implementing improvements to reduce cost and schedule overruns. DHS 
recently published an Integrated Strategy for High Risk Management. 
That report provides a comprehensive vision and strategy to manage all 
Department-wide investments. We will be a prominent member at the 
beginning of the acquisition cycle and remain involved throughout the 
acquisition cycle, working closely with four groups of decision-makers:
   Department Strategy Council.--We will inform strategic 
        direction and priorities, using scientific data and 
        methodologies to analyze National threats, vulnerabilities, and 
        consequences.
   Capabilities and Requirements Council.--We will reconcile 
        strategic requirements with Department research and development 
        capability, leveraging existing customer-focused, integrated 
        product teams.
   Program Review Board.--We will provide input into the 
        prioritization and allocation of research and development 
        funding among projects for the annual budget and 5-year Future 
        Years Homeland Security Program.
   Investment Review Board.--We will establish the criteria for 
        testing and evaluation.
    To enable improved acquisition decisions, we have established an 
Acquisition Support and Operations Analysis (ASOA) group, which 
provides the DHS components with a full range of coordinated operations 
analysis; systems engineering; test and evaluation; and standards 
development support. ASOA will leverage the directorate's critical mass 
of technical capability within the Department and will work with the 
Under Secretary for Management to:
   Help the components develop high-fidelity, testable 
        operational requirements for their acquisitions;
   Help execute an analysis of alternatives to ensure that the 
        most appropriate technical approach is taken;
   Partner with the components throughout an acquisition so 
        user needs are translated into real capabilities that can be 
        validated upon delivery and deployed without delay. For 
        example, the ASOA group currently is assisting Customs and 
        Border Protection with the Automated Commercial Environment 
        (ACE), the Mobile Broadband Modernization Program and the 
        Secure Transit Corridors Program.
    Question 14. The establishment of the Acquisition Support and 
Operations Analysis (ASOA) has been designed to leverage S&T's 
technical capability within DHS to aid in analyzing alternatives and 
ensuring that user needs are translated into real capabilities and 
deployment without delay.
    Has ASOA been effective in establishing operational requirements in 
the front end of the acquisition process?
    Answer. The Acquisition Support and Operations Analysis (ASOA) 
group was established in the 1st quarter fiscal year 2011 and permanent 
leadership was put in place in April 2011. ASOA has designed the S&T/
Component Technology Investment Council (STIC) process to identify 
prioritized operational requirements and potential technology solutions 
to more increased effective transitions into acquisition programs. ASOA 
has also engaged the Under Secretary for Management, Assistant 
Secretary for Policy and DHS operational components to support the 
establishment of the DHS front end requirements process. As the STIC 
process becomes operational, results will be seen in fiscal year 2012 
in terms of establishment of operational requirements.
    Question 15. What are the benefits of the Other Transaction 
Authority? What is the extent to which the use of such authority has 
contributed to developing technology in order to meet the needs of the 
Department and to promoting the National security of the United States?
    Answer. DHS was given Other Transaction (OT) authority so that it 
could obtain leading-edge research and development and prototypes that 
address significant National security needs from sources that cannot be 
accessed through traditional Government procurements. Some companies 
and other entities are unwilling or unable to meet all of the 
Government's procurement regulations in the time required to deliver a 
needed capability or technology.
    The authority to enter into OTs for research can be used to help 
develop support technologies of significant importance to DHS to meet 
the Department's future mission needs. Often these arrangements are 
made for programs in which industry and Government share in both the 
expenses and the benefits. The focus is on programs where both parties 
see a future benefit in the resulting products, such as dual-use 
science and technology programs.
    The authority to enter into OTs for prototype projects can be used 
to carry out prototype projects that are directly relevant to systems 
the Department will develop and deploy. These projects could include 
prototypes of systems, subsystems or components. Typically they are a 
limited run of devices, not a replacement for a major acquisition 
program.
    The following are 10 Awards pursuant to Other Transaction 
Authorities in fiscal year 2010:

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                Title                             Type                   Awarding Office                  Awardee            Fiscal Year 2010 Obligation
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Lightweight Autonomous Chemical       OT for Prototype...........  DHS Office of Procurement    Sensor Research and          $136,000
 Identification System (LACIS).                                     Operations.                  Development (SRD)
                                                                                                 Corporation.
    Technical Objective.............      Develop, field-test, and transition to commercial use a next-generation, hand-portable detection system for
                                           chemical vapor hazards such as Chemical Warfare Agents (CWAs) and high-priority Toxic Industrial Chemicals
                                           (TICs). The detection system will provide responders at an incident scene with an accurate, near real-time
                                       analysis of chemical hazards that may be present. The detection system will meet the needs of first responders in
                                                determining what level of personal protective equipment would be required at an incident scene.
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Autonomous Rapid Facility Chemical    OT for Prototype...........  DHS Office of Procurement    Smiths Detection Watford     Both parties mutually
 Agent Monitor (ARFCAM).                                            Operations.                  (SDW).                       agreed that the effort
                                                                                                                              should be de-scoped and
                                                                                                                              the funds de-obligated.
    Technical Objective.............  Develop a ``detect-to-protect'' system that is capable of monitoring facilities for the presence of CWAs and high-
                                           priority TICs. The SDW system will have the capability to continuously and autonomously monitor and detect
                                           dangerous levels of these chemicals. The system's response time will provide sufficient warning to engage
                                           effective response measures that include actively managing air flows, evacuating facilities, and notifying
                                                                                          responders.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Autonomous Rapid Facility Chemical    OT for Prototype...........  DHS Office of Procurement    Bruker Daltonics...........  $701,325
 Agent Monitor (ARFCAM).                                            Operations.
    Technical Objective.............  Develop a ``detect-to-protect'' system that is capable of monitoring facilities for the presence of CWAs and high-
                                       priority TICs. The Bruker Daltronics system will have the capability to continuously and autonomously monitor and
                                        detect dangerous levels of these chemicals. The system's response time will provide sufficient warning to engage
                                           effective response measures that include actively managing air flows, evacuating facilities, and notifying
                                                                                          responders.
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Autonomous Rapid Facility Chemical    OT for Prototype...........  DHS Office of Procurement    Hamilton Standard..........  $293,013
 Agent Monitor (ARFCAM).                                            Operations.
    Technical Objective.............  Develop a ``detect-to-protect'' system that is capable of monitoring facilities for the presence of CWAs and high-
                                       priority TICs. The Hamilton Standard system will have the capability to continuously and autonomously monitor and
                                        detect dangerous levels of these chemicals. The system's response time will provide sufficient warning to engage
                                                                                        effective [sic]
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Lightweight Autonomous Chemical       OT for Prototype...........  DHS Office of Procurement    Smiths Detection--Edgewood   $2,554,887
 Identification System (LACIS).                                     Operations.                  Inc.
    Technical Objective.............      Develop, field-test, and transition to commercial use a next-generation, hand-portable detection system for
                                           chemical vapor hazards such as Chemical Warfare Agents (CWAs) and high-priority Toxic Industrial Chemicals
                                           (TICs). The detection system will provide responders at an incident scene with an accurate, near real-time
                                       analysis of chemical hazards that may be present. The detection system will meet the needs of first responders in
                                                determining what level of personal protective equipment would be required at an incident scene.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Instantaneous Bio-Aerosol Detector    OT for Prototype...........  DHS Office of Procurement    Menon & Associates, Inc....  $123,854
 System (IBADS).                                                    Operations.
    Technical Objective.............   Will develop biological aerosol detection and sensor systems for monitoring the Nation's critical infrastructure.
                                         These ``detect-to-protect'' systems detect biological agents within minutes to protect critical infrastructure
                                                                                facilities and their occupants.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Critical Infrastructure Protection    OT for Research............  DHS Office of Procurement    National Institute for       $9,250,000
 (CIP).                                                             Operations.                  Hometown Security, Inc
                                                                                                 (NIHS).
    Technical Objective.............     Provides program management support in the areas of research, development, and application of community-based
                                        critical infrastructure protection technology. Under this effort, the NIHS, a Kentucky non-profit corporation is
                                       an enterprise which focuses on research and solutions, research requirements definition, technology transfer, and
                                                                           commercialization and outreach activities.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resilient Electric Grid (REG).......  OT for Prototype...........  DHS Office of Procurement    American Superconductor      Funds were re-aligned due
                                                                    Operations.                  Corporation (AMSC).          to changes in project
                                                                                                                              structure.
    Technical Objective.............      Under the Homeland Innovative Prototypical Solution (HIPS) Program, the recipient provides REG planning and
                                        demonstration support. In conjunction with Consolidated Edison and Southwire Co, AMSC will focus on developing,
                                        designing, and deploying the world's first fault current limiting high temperature superconductor electric cable
                                                                                            system.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operational Testing and Evaluation    OT for Prototype...........  DHS Office of Procurement    National Safe Skies          $2,075,730
 of Solutions for Cargo Screening                                   Operations.                  Alliance (NSSA).
 Program Initiatives; Vulnerability
 and Mitigation Assessment for
 General Aviations Airports; and
 Checkpoint Security Equipment Data
 Collection.
    Technical Objective.............   Cargo Screening: The NSSA will be assisting DHS to work through this mitigation risk and danger by assessing and
                                         evaluating new security technologies for use in the air cargo industry to further enhance security beyond the
                                          baseline standards. Vulnerability and Mitigation Assessment for General Aviation (GA) Airports: Under the GA
                                          Assessment, the NSSA is tasked to assist DHS in researching and organizing the scientific, engineering, and
                                         technological resources of the United States in order to leverage existing resources and create technological
                                           tools to help protect the Homeland. Checkpoint Security Equipment (CPSE) Data Collection: DHS Science and
                                        Technology Directorate (S&T) Explosive Division (EXD) develops the technical capabilities to detect, interdict,
                                        and lessen the impacts of non-nuclear explosives used in terrorist attacks against mass transit, civil aviation,
                                        and critical infrastructure. This includes passenger, baggage, and cargo-screening technologies; blast-resistant
                                                      aircraft construction; and integrated protective systems for high-value facilities.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Multi-Assay Enabled Wide-Area         OT for Prototype...........  DHS Office of Procurement    Red X Defense (RedX).......  $1,621
 Sampling and Testing (MAEWeST)--                                   Operations.
 Phase II.
    Technical Objective.............  Improves upon RedX's existing optical explosives detection ink into microcapsules applied directly to the sampling
                                        substrate, thus eliminating the need for bulky and mechanically complex spray applications and lighting systems.
                                       This design simplification and reduction in power requirement shall allow for the manufacture of a low-cost, easy-
                                           to-use, rugged pocket-sized device that eliminates the common challenges to widespread deployment of other
                                                                                     explosives detectors.
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