[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]




 
DOD AND DHS: IMPLEMENTING AGENCY WATCHDOGS' RECOMMENDATIONS COULD SAVE 
                           TAXPAYERS BILLIONS

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

                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 19, 2013

                               __________

                           Serial No. 113-31

                               __________

Printed for the use of the Committee on Oversight and Government Reform


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                      http://www.house.gov/reform


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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              MARK POCAN, Wisconsin
DOC HASTINGS, Washington             TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming           ROBIN L. KELLY, Illinois
ROB WOODALL, Georgia                 DANNY K. DAVIS, Illinois
THOMAS MASSIE, Kentucky              PETER WELCH, Vermont
DOUG COLLINS, Georgia                TONY CARDENAS, California
MARK MEADOWS, North Carolina         STEVEN A. HORSFORD, Nevada
KERRY L. BENTIVOLIO, Michigan        MICHELLE LUJAN GRISHAM, New Mexico
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                    Stephen Castor, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 19, 2013...................................     1

                               WITNESSES

The Honorable Robert Hale, Under Secretary of Defense 
  (Comptroller), U.S. Department of Defense
    Oral Statement...............................................     7
    Written Statement............................................    10
Mr. Lynne Halbrooks, Principal Deputy Inspector General, U.S. 
  Department of Defense
    Oral Statement...............................................    15
    Written Statement............................................    17
The Honorable Rafael Borras, Under Secretary for Management, U.S. 
  Department of Homeland Security
    Oral Statement...............................................    30
    Written Statement............................................    32
Mr. Charles Edwards, Deputy Inspector General, U.S. Department of 
  Homeland Security
    Oral Statement...............................................    44
    Written Statement............................................    46

                                APPENDIX

The Honorable Elijah Cummings, a Member of Congress from the 
  State of Maryland, Opening Statement...........................    94
The Honorable John Mica, a Member of Congress from the State of 
  Florida, Opening Statement.....................................    96
The Honorable Kerry Bentivolio, a Member of Congress from the 
  State of Michigan, Opening Statement...........................    97
Oversight and Government Reform Full Committee Hearing, Opening 
  Statement......................................................    98
The Honorable Gerald E. Connolly,a Member of Congress from the 
  State of Virginia, Opening Statement...........................   100
Letter from Mr. Brett A. Mansfield, Acting Assistant Inspector 
  General Communications and Congressional Liaison to The 
  Honorable Darrell Issa, a Member of Congress from the State of 
  California.....................................................   102
Questions for the Record from the Hon. Kerry Bentivolio to Mr. 
  Halbrooks......................................................   103
Questions for the Record from the Hon. Kerry Bentivolio to Mr. 
  Charles Edwards................................................   104
Questions for the Record from the Hon. Kerry Bentivolio to Mr. 
  Borras.........................................................   125
Questions for the Record from the Hon. Paul A. Gosar to Witnesses   127
Questions for the Record from the Hon. Jackie Speier, a Member of 
  Congress from the State of California to Mr. Hale..............   129
Letter to Chairman Darrell Issa from Mr. Brett A. Mansfield......   135


DOD AND DHS: IMPLEMENTING AGENCY WATCHDOGS' RECOMMENDATIONS COULD SAVE 
                           TAXPAYERS BILLIONS

                              ----------                              


                        Tuesday, March 19, 2013

                  House of Representatives,
      Committee on Oversight and Government Reform,
                                           Washington, D.C.
    The committee met, pursuant to call, at 10:00 a.m., in Room 
2154, Rayburn House Office Building, Hon. Darrell E. Issa 
[chairman of the committee] presiding.
    Present: Representatives Issa, Mica, Duncan, Jordan, 
Walberg, Lankford, Amash, Gosar, DesJarlais, Gowdy, Farenthold, 
Woodall, Meadows, DeSantis, Cummings, Maloney, Norton, Tierney, 
Clay, Connolly, Speier, Pocan, Duckworth, Cardenas, and 
Horsford.
    Staff Present: Ali Ahmad, Majority Communications Advisor; 
Alexia Ardolina, Majority Assistant Clerk; Jen Barblan, 
Majority Counsel; Richard A. Beutel, Majority Senior Counsel; 
Molly Boyl, Majority Parliamentarian; Caitlin Carroll, Majority 
Deputy Press Secretary; Steve Castor, Majority General Counsel; 
John Cuaderes, Majority Deputy Staff Director; Jessica L. 
Donlon, Majority Counsel; Kate Dunbar, Majority Legislative 
Assistant; Adam P. Fromm, Majority Director of Member Services 
and Committee Operations; Linda Good, Majority Chief Clerk; 
Frederick Hill, Majority Director of Communications and Senior 
Policy Advisor; Christopher Hixon, Majority Deputy Chief 
Counsel, Oversight; Jean Humbrecht, Majority Counsel; Mark D. 
Marin, Majority Director of Oversight; Tegan Millspaw, Majority 
Professional Staff Member; Kristin L. Nelson, Majority Counsel; 
Ashok M. Pinto, Majority Deputy Chief Counsel, Investigations; 
James Robertson, Majority Professional Staff Member; Scott 
Schmidt, Majority Deputy Director of Digital Strategy; Jonathan 
J. Skladany, Majority Counsel; Peter Warren, Majority 
Legislative Policy Director; Rebecca Watkins, Majority Deputy 
Director of Communications; Meghan Berroya, Minority Counsel; 
Beverly Britton Fraser, Minority Counsel; Susanne Sachsman 
Grooms, Minority Chief Counsel; Carla Hultberg, Minority Chief 
Clerk; Peter Kenny, Minority Counsel; Elisa LaNier, Minority 
Deputy Clerk; and Dave Rapallo, Minority Staff Director.
    Chairman Issa. The committee will come to order.
    The Oversight Committee exists to secure two fundamental 
principles: first, Americans have a right to know that the 
money Washington takes from them is well spent and, second, 
Americans deserve an efficient, effective Government that works 
for them. Our duty on the Oversight and Government Reform 
Committee is to protect these rights.
    Our solemn responsibility is to hold Government accountable 
to taxpayers, because it is taxpayers that have a right to know 
what they get from their Government. We will work tirelessly, 
in partnership with citizen watchdogs and our inspectors 
general, to deliver the facts to the American people and bring 
genuine reform to the Federal bureaucracy.
    Today I want to thank our ranking member, Mr. Cummings, for 
joining me in this ongoing effort to offer up a fact-based 
blueprint for the conversation unfolding about controlling 
Government spending and waste.
    Two weeks ago we examined the Department of Transportation 
and the Department of Education. Today we will hear from 
witnesses from two of the largest Government agencies: the 
Department of Defense and the Department of Homeland Security.
    With the attention of policymakers on how to best manage 
sequestration, this is a time to lead the discussion by finding 
and eliminating waste as part of that savings. For weeks, the 
Administration has made a concerted public relations effort to 
speak about the dire consequences of sequestration, and there 
will be some areas that will be, quite frankly, missed. But, 
candidly, the claims of a dire consequence have been disproven.
    We are not here to argue over sequestration directly. As a 
matter of fact, we are most interested in the $67 billion that 
have been identified by the IGS that, if implemented, could 
save most of the cost of sequestration.
    We certainly understand that some of that $67 billion is 
one-time. But, this year, this cut is essential and we can do 
some of it through means less painful to the American people 
then across-the-board cuts.
    Recognizing that we are dealing with two of the larger 
pockets of money and, in the case of Homeland Security and our 
Department of Defense, we are dealing with the very security of 
the American people. So today, as we focus on unimplemented IG 
recommendations, I want to remind all of our members on both 
sides of the dais that this is an area where the largest amount 
of dollar reduction is occurring and that $2.3 billion into the 
size of these budgets is a lot of money. Additionally, it is 
not surprising that the greatest amount of unimplemented 
savings also occurs with the men and women in front of us.
    So I am hoping this hearing will refocus us again on common 
sense reform in savings, and finding ways to have reduction in 
cost without a reduction in the services we count on and the 
protection we so much need.
    With that, it is a pleasure to recognize the ranking member 
for his opening statement.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Today's hearing falls on the 10-year anniversary of the 
invasion of Iraq. Ten years ago today our Nation entered a war 
that has now cost the American taxpayers more than $2 trillion. 
Obviously, this staggering amount will be even higher when we 
calculate the final cost of the war in Afghanistan, which is 
still going on today.
    During these wars, billions of dollars have been paid 
through contracts with private defense companies. According to 
the Commission on Wartime Contracting, just one company, 
Kellogg Brown & Root, was paid more than $40 billion.
    Under so-called sole-source contracts, many companies never 
competed for a single task order. Because these cost-plus 
contracts guaranteed corporate profits, they incentivize 
companies to pad their bills.
    Rather than raising revenues to pay for these trillion 
dollar wars, the Bush administration slashed taxes, primarily 
benefitting the richest members of our society. From 2001 to 
2010, Bush tax cuts reduced our Nation's revenues by nearly $1 
trillion.
    So now that we have ended the war in Iraq, are winding down 
the war in Afghanistan, and are facing record deficits, it 
would be logical to seek additional revenues and reduce defense 
spending, particularly on wasteful defense contracts. Instead, 
our House Republicans propose something vastly different.
    The Ryan budget, unveiled last week, would eliminate health 
insurance for tens of millions of Americans, slash Medicaid for 
the poorest among us, reduce education funding for children 
with disabilities, kick tens of thousands of kids out of Head 
Start, and abandon our commitment to seniors who rely on 
Medicare. House Republicans would rather do all of these things 
than ask the richest among us to contribute a penny more to 
address our Nation's fiscal challenges.
    Although most people agree that it is time to rein in 
wasteful defense spending, the Ryan budget would increase the 
Pentagon's budget to $645 billion next year. Although our wars 
are ending and the Pentagon's contract management system is 
broken, the Ryan budget would pump tens of billions of dollars 
more into defense spending each year for the next decade.
    Today's hearing offers a prime opportunity to take a step 
back and identify massive savings at the largest agency in the 
Federal Government, the Department of Defense. The Pentagon's 
inspector general and the Government Accountability Office have 
warned repeatedly that the Defense Department continues to 
squander billions of dollars on wasteful contracts. Let me 
highlight just one example.
    Over the past 10 years, the Pentagon has severely 
mismanaged the biggest weapons acquisition program in history, 
the F-35 Joint Strike Fighter. It rushed to buy aircraft 
without adequate testing and it disregarded recommendations to 
slow down the acquisition process. As a result, the program now 
faces skyrocketing costs, expensive retrofits, and unacceptably 
poor performance. Experts have challenged the need for this 
aircraft and the Simpson-Bowles Commission recommended 
counseling the Marine variant, reducing other variant 
purchases, and outfitting planes already in service with less 
expensive upgrades.
    According to the Pentagon's Office of Operational Test and 
Evaluation, testing for the Joint Strike Fighter has been 
extremely limited due to restrictions, including no night or 
weather capability and no combat capability. The Navy's version 
of this plane cannot land on aircraft carriers, the radar does 
not appear to work, and no version of this plane has been 
cleared to fly at night.
    Last year, the Pentagon's own acquisition chief called this 
acquisition malpractice. Nevertheless, the Department is 
forging ahead with plans to buy nearly 2,500 planes for $400 
billion, and the American taxpayers will be on the hook for 
another $1 trillion just to maintain these planes over their 
service lives.
    Mr. Chairman, I am thankful that today, before we consider 
Draconian cuts to core services that Americans across the 
Country rely on every single day, we will have an opportunity 
to closely examine this program and others at DOD and DHS in 
order to break our Nation's addiction to wasteful contract 
spending.
    I thank our witnesses very much for being here today and I 
look forward to hearing their testimony. And, Mr. Chairman, 
with that, I yield back.
    Mr. Mica. [Presiding.] I thank the ranking member for his 
opening statement and recognize myself for a couple minutes.
    First, I want to say that we look forward to working with 
the Minority, particularly as chair of the Government 
Operations Subcommittee. I look forward to working with Mr. 
Connolly as we drill deeper into some of the issues of waste, 
fraud, and abuse, and how we can eliminate some of that 
unnecessary spending and cost and actually do a better job in a 
time of sequestration and budget cuts.
    However, since the sequestration went into effect, rather 
than identify wasteful and redundant programs that can be cut, 
the Administration, unfortunately, has gone around touting the 
alleged harmful consequences of sequestration. Some of them are 
over the top. They have threatened thousands of teachers will 
get a pink slip, federal prosecutors would have to close cases 
and let criminals go.
    Even programs like Meals on Wheels, that provide our 
seniors with assistance, would be cut; millions of seniors 
would lose this assistance, another claim. Thousands of 
students, I think 70,000 they said, would lose access to Head 
Start programs. I think I even saw the DHS secretary threaten 
long lines and delays at our airports because of TSA cutbacks.
    Unfortunately, all of these statements I believe to be 
exaggerations. We have people who can speak to some of these 
claims here today, and that is part of the purpose of this 
hearing, is to identify some common sense ways that we can cut 
costs and improve efficiency in Government. Now, I know that 
sounds like a radical idea, but we can do it together.
    There are plenty of obvious candidates to cut wasteful 
spending, such as a $27 million project to help fund pottery 
classes in Morocco. Now, I know that is essential, but I think 
it could be a candidate that we could look at for eliminating 
wasteful spending. Half a million dollars to support specialty 
shampoo products for dogs and cats. Now, that is one, we have 
to keep that program going; $141,000 to fund a Chinese study on 
swine manure has to be absolutely essential to the continuation 
of the Republic as we know it; a $3,700 grant to build a 
miniature street in West Virginia out of Legos. I know how 
critical that is to the continuation of humanity.
    Then we have 3,986 TSA headquarter employees, and I believe 
I saw the figure, 26.8 percent of their headquarter employees 
are supervisors. These folks are all making in excess of 
$100,000 a year and we have only 457 airports in the entire 
Country that have any TSA presence. That is 3,986 TSA 
headquarter employees, but we can't service the public at our 
airports.
    We are going to hear from two inspectors general today, who 
will testify and have identified $2 billion worth of potential 
savings at their agencies that have not been implemented. So I 
think we could have a very productive session today, working in 
a very bipartisan manner, not in an alarmist manner, and 
eliminate some of these false claims and shed some light on 
where we can save money.
    So, with that, I would like to leave the record open for 
seven days, if it is okay with the ranking member, for members 
to submit statements for the record.
    Now I would like to turn to recognizing our witnesses.
    Mr. Tierney, oh, I am sorry, did you want to make an 
opening statement?
    Mr. Tierney. Yes, I would, Mr. Chairman.
    Mr. Mica. Okay.
    Mr. Tierney. Yes, if I might. Thanks.
    Mr. Mica. We will yield five minutes to Mr. Tierney.
    Mr. Tierney. Thank you. I notice that Mr. Chaffetz isn't 
here, the chairman of the Subcommittee on Oversight for the 
National Security and Homeland Security. We have been working 
in a very bipartisan manner for some time now. I just want to 
make a couple of quick statements off the top on sequestration.
    Of course, when you read the sequestration order, you 
understand that there is not as much discretion to the 
executive branch as some might think; that, by its very nature, 
it dictates what must be cut and how it must be cut, down to 
the program level, and excludes a number of different things. 
So it is not a question of just giving over to the executive 
and having them make great decisions; many things they are sort 
of restricted from doing that.
    But I welcome these hearings. I would have hoped we would 
have had these hearings before sequestration went into effect. 
We should have been looking together to try to identify common 
ground that we could get rid of some things that we think are 
waste, fraud, or abuse on that. Certainly, the Department of 
Defense, which has not passed an audit in some time, if ever, 
would be a good place to start looking on that; it has been a 
problem in contracting.
    A lot of our subcommittee hearings have identified that. 
The cost and time and scope elements of looking at every 
contract, and oftentimes lose track of the time, the cost of 
time, when it gets extended out; changing the specifications 
during the course of contracts. The problems just go on and on: 
not having enough contract managers, not having enough that are 
trained, losing control of the project and continuing to go on 
in that basis. So we have a lot to work on.
    But 10 years ago today the United States began its invasion 
of Iraq based on flawed intelligence from the Bush 
administration, and since that time hundreds of billions of 
dollars of U.S. taxpayers have poured into Iraq and Afghanistan 
to support the wars and finance our reconstruction efforts 
there. We were concerned with the staggering sums of money that 
were provided and the lack of oversight, so, in 2005, Jim 
Leach, Republican from Iowa, and I coauthored bipartisan 
legislation that led the way to creating the Commission on 
Wartime Contracting. According to that Commission's final 
report, up to $60 billion in taxpayer funds were lost in Iraq 
and Afghanistan due to waste, fraud, and abuse.
    In response to these findings, I introduced the Oversight 
and Accountability in Wartime Contracting Act last Congress to 
strengthen the system for awarding and overseeing contractors 
in war zones and to reduce our reliance on no-bid contracts, 
both of which are serious issues. The bill adopted key 
recommendations of the Commission and included some of the same 
reforms that ended up in the National Defense Authorization 
Act. We worked across the aisle; we have long championed 
efforts to increase viability into contracts, to reduce the 
reliance on sole-source contracts, and to strengthen oversight 
mechanisms, but all of those problems continue to remain and 
continue to need our attention.
    This committee and the Subcommittee on National Security 
have long played an important role in identifying and 
preventing waste, fraud, and abuse in our Government programs, 
particularly in Iraq and Afghanistan. The subcommittee 
previously led a bipartisan investigation of jet fuel contracts 
in Kyrgyzstan and the multibillion dollar host nation trucking 
contract in Afghanistan. We worked on those with Mr. Flake over 
a series of years.
    Our investigation found that the trucking contract had 
spawned a vast extortion racket in which warlords, criminals, 
and insurgents extorted contractors for protection payments. 
Too often our contracts were developed without any insight not 
only into the base contract, but certainly into the 
subcontracts and the contracts at levels below those.
    Congressman Chaffetz has continued this tradition and he 
and I have introduced legislation seeking accountability over 
the $3 billion in U.S. plans to spend on fuel for the Afghan 
Army. We are also now leading a bipartisan investigation of the 
multibillion dollar food contract in Afghanistan that has led 
the Government to demand more than $750 million in 
overpayments.
    Given the fiscal challenges that are facing this Country, I 
welcome the opportunity to work on additional ways to reduce 
waste in the departments and protect the taxpayer dollars.
    So I thank you, Mr. Chairman, for the time and I look 
forward to working together on this committee to identify at 
least as healthy a portion as we can of the waste, fraud, and 
abuse that passes through the Department of Defense and 
Homeland Security budgets. Thank you.
    Mr. Mica. I thank you, Mr. Tierney, and, again, your 
counterpart, I guess, Mr. Chaffetz, National Security 
Subcommittee, and your willingness to work as the ranking 
member with him and the committee and Mr. Cummings.
    As I said, members will have seven days to submit opening 
statements for the record.
    So, with those comments, I will now recognize our panel 
today. Our witnesses include The Honorable Robert Hale. He is 
Under Secretary of Defense and Chief Financial Officer at the 
Department of Defense. We have Ms. Lynne Halbrooks, the 
Principal Deputy Inspector General for the Office of the 
Inspector General at the Department of Defense. We have the 
Honorable Rafael Borras. He is the Under Secretary of 
Management for DHS, Department of Homeland Security; and Mr. 
Charles Edwards. He is the Inspector General for the Office of 
Inspector General at the Department of Homeland Security. So 
those are our first four witnesses.
    Witnesses, as is customary, this is an investigations 
oversight panel of Congress. If you will stand and be sworn, 
please. Raise your right hand.
    Do you solemnly swear or affirm that the testimony you are 
about to give before this committee of Congress is the whole 
truth and nothing but the truth, so help you God?
    [Witnesses respond in the affirmative.]
    Mr. Mica. Let the record reflect that the witnesses all 
answered in the affirmative.
    I thank you so much for being with us and we will now 
recognize each of you. The customary procedure is you get five 
minutes to present your remarks. If you have lengthy additional 
information or testimony you would like submitted as part of 
the record, just redress that through the chair and it will be 
included.
    With that, let me first recognize Mr. Hale and welcome you. 
Mr. Hale, again, is the Under Secretary of Defense and Chief 
Financial Officer for the Department of Defense. Welcome, sir, 
and you are recognized.

                       WITNESS STATEMENTS

             STATEMENT OF THE HONORABLE ROBERT HALE

    Mr. Hale. Well, thank you. I do have a statement, if you 
would include it in the record.
    Mr. Mica. Without objection, your statement will be part of 
the record. Proceed.
    Mr. Hale. So good morning to all the members of the 
committee and thank you for the opportunity to discuss efforts 
to improve efficiency at the Department of Defense. I am joined 
today by Lynne Halbrooks, the acting inspector general for the 
Department.
    Our offices share a common goal, which is to support the 
national security mission while making the best possible use of 
every taxpayer dollar. And I can tell you we review and make 
use of the many IG reports that are issued each year.
    Like Congress, DOD is mindful that our Nation is dealing 
with significant fiscal pressures. If I could borrow a line 
from Dwight Eisenhower, the patriot today is the fellow who can 
do the job with less money. That statement is, if anything, 
even more valid in our time than it was in the 1950s.
    Accordingly, our budget requests at DOD in recent years 
have included steps to curtail or eliminate programs that fail 
to meet needs or which were seriously troubled or provided 
capabilities too narrow to justify their expense. As a result, 
more than 20 DOD weapons programs have been restructured or 
eliminated in recent years, including the VH-71 Presidential 
helicopter, the Navy's DDG-1000 ship program, the Air Force's 
TSAT satellite, the Army's Future Combat System, and the 
Marines' Expeditionary Fighting Vehicle. We also ended 
production of two aircraft that have met their inventory 
objectives, the F-22 and C-17.
    DOD has eliminated lower priority organizations, such as 
the Joint Forces Command, the first time we have ever 
disestablished a combatant command. We have disestablished 
other organizations, including the Second Fleet headquarters in 
Norfolk and two Air Operations Centers in Europe. We have cut 
costs through improved business practices and greater reliance 
on multi-year procurements, fuel saving initiatives, contract 
consolidation, and reliance on the VA's drug pricing schedule 
for pharmaceuticals.
    These and other initiatives have led to planned savings in 
the President's budget for fiscal year 2012 of about $150 
billion over the five-year period 2012 to 2016. The 2013 budget 
projected another $60 billion in savings for the period 2013 
through 2017.
    In addition, DOD has sought to slow the growth in military 
compensation while fully supporting the All-Volunteer Force. We 
proposed modest increases in the fees that military retirees 
pay for health care and proposed altering pharmacy co-pays in 
ways that encourage the use of generic brands and mail order 
delivery, which are much cheaper for us. We also proposed 
slowing the growth in military basic pay. In the President's 
budget for 2013, these initiatives save $29 billion over five 
years.
    Finally, in our most recent budget, we proposed cutting 
back on selected Air Force aircraft and retiring nine Navy 
ships early.
    Looking ahead, we will continue these efforts to make more 
disciplined use of resources. Because the President's budget 
for 2014 hasn't been sent to Congress, I can't be specific, but 
I can tell you that we will again propose a package of changes.
    While DOD can propose efficiencies, I need your help on 
this committee and the Congress. Congress must approve them 
before they can take effect. In recent years, Congress denied a 
number of proposals to eliminate lower priority weapons 
programs and military units. Congress has also rejected some 
proposals to consolidate infrastructure and to slow the growth 
in military compensation, including partially rejecting 
increases in fees and co-pays for military retiree health care. 
These congressional actions, if sustained, will add billions to 
our budget over the coming years, and we hope that, during this 
period of downward pressure on our budgets, that Congress will 
reconsider and approved these efficiency initiatives.
    Unfortunately, these improvements alone aren't going to be 
enough to meet the budget cuts imposed by sequestration. We are 
facing $46 billion of savings in less than seven months. We 
will do everything we can to use efficiencies, to use IG 
reports. Our goal is to minimize adverse effects on the 
mission. But the law itself is mindless and across-the-board, 
and efficiency initiatives aren't going to be able to meet a 
number of these cuts.
    In 2013, we are also wrestling with a misallocation of 
funds under the current Continuing Resolution. We don't have 
enough operations and maintenance money, which is key to 
military readiness. We actually have too many investment 
dollars.
    The bottom line of this sequestration and the Continuous 
Resolution problems is going, unfortunately, to be a crisis in 
military readiness, and you have heard that testimony from the 
Joint Chiefs in many forms.
    In view of the serious economic problems facing our Nation, 
we hope Congress will support all our efficiency initiatives, 
even the ones that are hard. We also hope that Congress will 
replace the current CR with appropriations bills, and they seem 
to be heading in that direction, at least for DOD. Finally, we 
urge Congress to pass a deficit reduction package that the 
President can sign that permits the de-triggering of this 
mindless sequestration. The continued strength of our national 
security depends on successful action in all of our 
initiatives.
    That completes my statement, Mr. Chairman. After the other 
witnesses have spoken, I would be glad to answer questions.
    [Prepared statement of Mr. Hale follows:]

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    Chairman Issa. [Presiding.] Thank you, Mr. Hale
    We now go to Lynne Halbrooks, the Principal Deputy 
Inspector General of the Office of Inspector General of the 
Department of Defense. Welcome again.
    I apologize for being off, testifying at another hearing. I 
had no questions, so I came back quickly.
    The gentlelady is recognized.

                  STATEMENT OF LYNNE HALBROOKS

    Ms. Halbrooks. Thank you, Chairman. Chairman Issa, Ranking 
Member Cummings, and distinguished members of the committee, 
good morning and thank you for the opportunity to be here today 
to appear before you to discuss our efforts to reduce waste and 
improve efficiency within the Department of Defense.
    I would like to thank this committee for its critical work 
and sustained focus over the last several years to highlight 
the issues of unimplemented inspector general recommendations. 
It is essential to good government and effective stewardship of 
taxpayer dollars that IG recommendations are implemented.
    I am proud to be here today to represent the hundreds of 
dedicated DOD Office of Inspector General employees who, for 30 
years, have been committed to conducting critical audits, 
investigations, inspections, and evaluations.
    Over the past 10 years, our office has issued more than 
1300 reports addressing a wide variety of challenges within the 
Department and providing 7,684 recommendations to correct 
deficiencies. Of those, 95 percent have been addressed and 
closed and 5 percent, or 386 recommendations, remain open. 
Collectively, these reports have resulted in $37.3 billion in 
achieved monetary benefits to the Department, with additional 
potential monetary benefits of $3.5 billion based on open 
recommendations.
    We have a strong follow-up program for tracking the status 
and implementation of recommendations and have found DOD 
leadership to be responsive to our recommendations. I believe 
the high level of responsiveness is a direct result of our 
focused oversight efforts.
    We prioritize our activities to ensure oversight is timely, 
relevant, and responsive to the dynamic environment within the 
Department and annually we prepare and submit our summary of 
what we consider to be the most serious management and 
performance challenges facing the Department. These challenges 
include acquisition processes and contract management; 
financial management; joint war fighting and readiness; 
information assurance, security and privacy; health care; 
equipping and training Iraq and Afghan security forces; and the 
nuclear enterprise.
    Additionally, we treat oversight pertaining to life and 
safety issues as a top priority. For example, over the past 
several years our office has found faulty testing of personal 
protective equipment, as well as electrical and fire safety 
issues.
    My prepared statement provides a number of recent examples 
that illustrate how our recommendations have identified ways 
for the Department to be more efficient and save money. For 
example, in September of 2012, we issued a report on the 
Missile Defense System that questioned the planned procurement 
and identified over $2.5 billion in potential savings. 
Management agreed with our report and recommendations, stating, 
``the impact of the current fiscally-constrained environment 
compels redirection of funding to other systems.''
    We are currently following up with management to document 
the actions taken and the actual savings realized.
    We have also identified $423.7 million in potential 
monetary benefits that could be achieved through more effective 
use of existing inventory and procurement in spare parts. The 
Department is also currently taking action on those 
recommendations.
    Financial management is another challenge area where 
potential monetary benefits and savings can and have been 
identified. Our office has issued a series of reports which 
address concerns with the Department's financial systems. In 
these reports, we recommend that DOD halt deployment of 
specific systems until our concerns are addressed.
    While the Department continues to take action to improve 
these processes, my staff and I remain concerned that the 
Department will have difficulty in meeting their financial 
readiness goals.
    I thank the committee for inviting me to testify on 
opportunities to reduce waste and improve efficiencies at DOD 
through implementation of our recommendations. We look forward 
to working with Department leadership to ensure our concerns 
are addressed in a timely manner. Given the fiscal challenges 
the Country is facing, every dollar we can save and put to 
better use is critical.
    This concludes my statement today. I request my written 
statement be included in the record and welcome any questions 
the committee may have.
    [Prepared statement of Ms. Halbrooks follows:]

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    Chairman Issa. Without objection, all opening statements 
will be placed in the record.
    With that, we recognize Secretary Borras.

            STATEMENT OF THE HONORABLE RAFAEL BORRAS

    Mr. Borras. Chairman Issa, Ranking Member Cummings, and 
other distinguished members of the committee, thank you for the 
opportunity to discuss the efforts to improve efficiency across 
the Department of Homeland Security.
    As the chief management official at DHS, I oversee policy, 
operations, and oversight for each of the critical management 
lines of businesses. These include acquisition, human capital, 
budget and finance, information technology, capital assets, and 
security.
    One of the top priorities during my three-year tenure has 
been to lay the groundwork to systematically integrate the 
Department's management infrastructure. My personal experience 
as an executive in the private sector, as well as in the 
previous Federal and local government positions, has shown that 
building a strong and accountable management foundation is the 
best way to ensure that any organization operates at peak 
efficiency. Expanding on the work of my predecessors at DHS, I 
believe we are making significant progress to strengthen and 
mature that foundation.
    When the current administration arrived in 2009, the 
management infrastructure was relatively decentralized and some 
of the basic management authorities and delegations at the 
headquarters level to the Components needed to be updated. 
Working with the Components, we made lines of authority in 
oversight much clearer, providing headquarters with better 
visibility into the Components day-to-day operations. This has 
resulted in significant improvements to both the financial and 
acquisition management areas.
    The Government Accountability Office's 2013-15 high-risk 
report acknowledges that significant progress has been made 
over the past three years to transform and integrate our 
management functions. We value the independent analysis 
provided by both the GAO and the OIG, and use their assessments 
as a barometer to measure our progress and to continue to make 
improvements.
    I am pleased to be joined today by Acting Inspector General 
Edwards. The Department has fostered an open and collaborative 
relationship with the OIG to find and reach resolution on their 
recommendations. Since March 2011, DHS has concurred on over 95 
percent of the OIG's recommendations and has increased the rate 
of closeout in findings from recommendations from 56 percent to 
nearly 75 percent. We expect this positive trend to continue. 
It is clear to me that we share the same goal: to improve the 
quality of management at the Department.
    I would like to take this opportunity to describe how 
enhancements for our management infrastructure are improving 
efficiency, specifically in the areas of acquisition and 
financial management.
    The acquisition management function plays a key role in 
supporting the Department's mission goals. As a DHS chief 
acquisition officer, I oversee annual expenditures of roughly 
$18 billion and have instituted several changes to improve the 
quality and the accountability of the Department's acquisition 
structures and processes. In 2011, I restructured and 
strengthened oversight of all major acquisition programs, which 
included creating an Office of Program Accountability and Risk 
Management, or PARM, and requiring the office to report 
directly to me. PARM ensures that all programs comply with 
Management Directive 102-01, which is the principle policy 
guiding the governance and the development and the execution of 
all programs.
    In the financial management area, for fiscal year 2012, DHS 
received its first qualified audit opinion on all five of its 
financial statements. This full-scope audit opinion is a 
pivotal step towards increasing transparency and accountability 
for the Department's resources and is a result of DHS's ongoing 
commitment to instituting sound financial management practices. 
We are focusing resources to obtain an unqualified opinion for 
2013.
    The Department has also made significant improvement in its 
efforts to eliminate improper payments above and beyond the 
statutory requirements. Since 2009, DHS has been found 
compliant with the Improper Payments and Elimination Recovery 
Act of 2010 and its predecessor, the Improper Payments 
Information Act of 2002. Since mid-2010, we have recouped or 
resolved 95 percent of the $21 million reported as high dollar 
overpayments. We continue to improve payment controls and to 
process and maintain good stewardship of taxpayer dollars.
    Since the beginning of the administration, DHS has made an 
unprecedented commitment to efficiency, fiscal discipline, and 
accountability. Since 2009, DHS has identified over $4 billion 
in cost avoidances and reduction, and have redeployed those 
funds to mission critical initiatives across the Department.
    Driving consolidation, integration, and standardization 
across the IT infrastructure is critical to realizing 
additional efficiencies. We have, for example, consolidated 18 
legacy data centers into two state-of-the-art enterprise data 
centers. A CFO audit revealed that these migrations have 
resulted in average annual savings of $17 million.
    Concluding, in the past four years the Department has made 
substantial strides to integrate management, improve 
efficiency, and maintain our service levels, despite operating 
with a relatively flat budget. We take seriously our 
responsibility to be good stewards of taxpayer money and I 
firmly believe we have a stronger, more integrated management 
structure that will continue to yield positive results.
    I thank you for the opportunity to appear here today and I 
look forward to answering your questions.
    [Prepared statement of Mr. Borras follows:]

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    Chairman Issa. Thank you.
    General Edwards?

                  STATEMENT OF CHARLES EDWARDS

    Mr. Edwards. Good morning, Chairman Issa, Ranking Member 
Cummings, and members of the committee. Thank you for the 
opportunity to discuss the work of DHS Office of Inspector 
General.
    Since our inception in 2003, DHS's OIG has issued 8,068 
recommendations to the Department, of which 1,253 remain open 
and unimplemented. My testimony today will discuss and address 
a few high priority open recommendations which require focus on 
ways the Department can improve its program operations, reduce 
fraud, waste, and mismanagement.
    First, DHS personnel require interoperability to 
communicate both with other DHS components and external 
partners. DHS established a goal that all components would be 
able to communicate using interoperable radio systems by 
establishing a common radio channel and purchasing standardized 
equipment.
    However, in November 2012, we reported that only 1 of 479 
radio users we reviewed could access and communicate using the 
specified channel, and only 78 of 382 radios tested contained 
all the correct program settings. We recommended that DHS 
develop and disseminate policies and procedures to standardize 
Department-wide radio use to ensure interoperability.
    A second example involves CBP's unmanned aircraft system 
program. Congress appropriated more than $240 million to 
establish this program and CBP developed plans to use the 
unmanned aircraft's capabilities. We reported in May 2012, 
however, that CBP's approach may underutilize resources and 
limit CBP's mission. We recommended that CBP analyze 
requirements and develop plans to achieve the U.S. mission 
availability objective and acquire funding to provide necessary 
operations, maintenance, and equipment.
    The third example involves FEMA. In January 2012, we 
reported that only 6.3 percent of the public assistance 
projects for Louisiana had been closed out in the six years 
since Hurricane Katrina made landfall. Many of those projects 
are years past the closeout deadlines. They could involve 
substantial amounts of obligated funds that could be put to 
better use. The Federal Government provided 100 percent funding 
of the public assistance projects and, therefore, the State has 
no incentive to close completed projects. We recommended that 
FEMA develop and implement policies, procedures, and time lines 
to ensure the projects with 100 percent Federal funding are 
closed timely.
    Additional high priority open recommendations focus on the 
accountability issues of financial management, information 
technology management, and cybersecurity. For example, although 
DHS produced auditable financial statements in fiscal year 2012 
and obtained a qualified opinion on those statements, 
challenges remain. DHS's financial management systems are not 
able to process, store, and report financial data in a manner 
to ensure accuracy, confidentiality, integrity, and 
availability.
    With respect to IT management, CBP has the largest IT 
budget among the DHS components. Although the CBP chief 
information officer has taken several actions to support 
effective IT management, we reported in June 2012 that system 
challenges remain, including issues of systems availability, 
interoperability, and functionality.
    Finally, in the area of cybersecurity, we have open 
recommendations regarding the risk of insider threats at TSA 
and the implementation of international cybersecurity programs.
    In conclusion, DHS has a critical role to play in ensuring 
national awareness, preparedness, and coordinated response to 
potential emergency situations, suspicious activities, and 
terrorist threats. Our reports provide the Department Secretary 
and Congress with an objective assessment of the issues, and at 
the same time provide specific recommendations to correct 
deficiencies and improve the economy, efficiency, and 
effectiveness of the Department's programs.
    Our work, however, is only effective if the Department 
implements corrective actions timely to address deficiencies 
and weaknesses. Doing so will help ensure that the Department 
exercises proper stewardship of Federal resources.
    Mr. Chairman, this concludes my prepared remarks, and I 
would be happy to answer any questions that you or the members 
may have.
    [Prepared statement of Mr. Edwards follows:]

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    Chairman Issa. Thank you all.
    I will now recognize myself for a round of questioning.
    Ms. Halbrooks, do you have subpoena authority as the IG at 
DOD?
    Ms. Halbrooks. Yes. We have documentary and testimonial 
subpoena authority.
    Chairman Issa. Have you ever had to use your testimonial 
subpoena authority?
    Ms. Halbrooks. We have, sir. We have used it twice.
    Chairman Issa. Ever?
    Ms. Halbrooks. Yes.
    Chairman Issa. Does that mean you don't need it or does 
that mean that the fact that you have it means people 
reasonably comply in a timely fashion for interviews?
    Ms. Halbrooks. The latter. While we have issued it twice, 
there have been a few other occasions where we have indicated 
our intent to issue one, and witnesses have cooperated. 
Likewise, of course, immeasurable is the effect of just having 
it and people knowing that we have it.
    Chairman Issa. Mr. Edwards, do you have such subpoena 
authority?
    Mr. Edwards. No, sir.
    Chairman Issa. Loaded question: Have you asked people to 
testify and they have simply declined and you have been unable 
to get them?
    Mr. Edwards. Not that I am aware of, sir.
    Chairman Issa. Is there currently a system, General 
Halbrooks, is there currently a system for anybody to get 
testimonial subpoena authority other than yourself?
    Ms. Halbrooks. We are the only inspector general's office 
that has testimonial subpoena authority. It was given to us in 
the fiscal year 2010 National Defense Authorization Act.
    Chairman Issa. So you have had it for a few years. Have you 
abused that authority?
    Ms. Halbrooks. We have been very careful and judicious, and 
have not abused that authority. The rule of the law requires 
that we notify the Justice Department before we issue those 
subpoenas, and that has gone very well.
    Chairman Issa. So you have worked in consultation with the 
Justice Department. And have they made suggestions, 
corrections, any kind of input over the years?
    Ms. Halbrooks. No. They have concurred or not objected to 
our issuance of the subpoenas.
    Chairman Issa. Now I am going to go out on a limb. Do you 
believe that this committee should provide a system for all IGS 
to have access to similar authority?
    Ms. Halbrooks. That is a difficult decision. It certainly 
has helped us. It is something that I think has to be used 
carefully and with specific controls in place. We are 
comfortable we have those controls and that we use it very 
judiciously. I am not sure how that would translate to the rest 
of the IG community, sir.
    Chairman Issa. Well, Mr. Hale, would you say that this is a 
tool that you are happy that your IG has?
    Mr. Hale. I think the IG system is working fine, Mr. 
Chairman. I will stay with that. I think we get good help and 
we try to respond, as Ms. Halbrooks said.
    Chairman Issa. Okay. It is obviously an area of interest 
for myself on this committee.
    Mr. Borras, Under Secretary Borras, you have increased, not 
just you, but your predecessor, have increased by about 5,500 
TSA individuals between 2005 and 2012, 1,000 for general work, 
this is full-time equivalents, and 4,500 for agents to operate 
advanced image technology systems, is that correct?
    Mr. Borras. I don't know the exact number, but there has 
been an increase.
    Chairman Issa. Okay. Well, suffice to say we got it from a 
letter. And this committee has held an awful lot of hearings on 
the failure of those advanced imaging systems, and it doesn't 
surprise you, I am sure, to know that the last 14 or 15 times I 
have gone through security I haven't gone through those imaging 
devices because, more and more, people are moving back to the 
old ones.
    When you are looking at how to accomplish sequestration, 
have you considered simply this 8 percent reduction in force 
through attrition to accomplish a big part of it? In other 
words, recognize a failure as a failure and allow attrition at 
TSA to pay for a big part of sequestration?
    Mr. Borras. Well, Mr. Chairman, as you know, the PPA 
structure in TSA is structured in such a way that salaries, for 
example, are their own PPA and subject to the effect of 
sequestration, and we don't have the ability to----
    Chairman Issa. Wait, wait, wait a second, please. Your 
attrition at TSA is high. If, 19 months ago, you had put a 
hiring freeze on, today you would have more than 5500 less TSA 
agents. Now, you might have to hire some or transfer some, but 
you would have accomplished that if, 19 months ago, when 
sequestration was signed by the President.
    And, Mr. Hale, I wish you hadn't said it was mindless in a 
way that disparages the President. Hopefully you didn't mean 
that when he signed it.
    Mr. Hale. I had in mind the law.
    Chairman Issa. Well, it has his signature on it and my vote 
on it, so it is double mindless, perhaps.
    Again, I go through security. Virtually everybody up here 
on the dais goes through. We are acutely aware that TSA is an 
organization that is very large, has a lot of people. It is 
your largest single budget item. Again, if you made decisions 
19 months ago to use attrition as a tool, wouldn't you have 
substantially less people on the payroll, if you had made plans 
to work with less people? I understand that it is a union 
organization, you can't just be arbitrary. But if I have a 
choice of furloughing today or planning ahead, if I have an 
idea of how I can work with less people, why didn't you do 
that, and wouldn't it have reduced that number?
    Mr. Borras. Well, Mr. Chairman, two things. One, certainly 
there was an expectation within DHS, and I would suppose in 
both the administration and Congress, that sequestration would 
never come to pass. However, we did prudently look at various 
options. One of the things we had to be mindful of is not 
violating the Impoundment Control Act, where you would 
willfully withhold monies in spite of the way the monies were 
appropriated. So we did look at and we have instituted across 
the Department, certainly since March 1st, since we have had 
sequestration in place, hiring freezes.
    There still is volatility as it relates to the impact of 
sequestration. The Senate CR bill that may pass has some 
significant changes particularly that affect TSA. One example 
would be the FAMS.
    Chairman Issa. Okay, well, my time has expired. I just want 
to quickly comment. If you didn't anticipate and begin doing 
things after the President signed the law, it would certainly 
not be prudent to anticipate some relief coming from a future 
action now. But for all of us on the committee, sequestration, 
many of us thought, would be negotiated out, but the reduction 
of 2.3 percent was always still the law.
    So your anticipation of not having across-the-board had to 
recognize you still were expecting a substantial portion of 
that 2.3 to hit each of your areas that you could save in. So 
to say that you didn't think 2.3 was going to happen is to say 
that you didn't expect that the President signed that reduction 
in good faith. He did sign it in good faith; it meant that you 
had to prepare for that, and apparently you didn't. And we will 
hear from the FCC and a few other entities that did exactly 
what we described, began reducing their headcount of full-time 
equivalents in advance.
    With that, I will yield to the ranking member for seven 
minutes.
    Mr. Cummings. Can I have 7.5, like you did, Mr. Chairman? 
It was 7.5.
    Chairman Issa. Sure.
    Mr. Cummings. Thank you.
    Chairman Issa. I was just rounding.
    Mr. Cummings. Okay. Let's round up.
    Mr. Edwards, do you believe that you need testimonial 
subpoena authority?
    Mr. Edwards. The IG community is divided. Of course, from 
DHS we do believe that we would need that.
    Mr. Cummings. And so although you have never had a problem 
getting witnesses in, you feel like you need it? Can you 
explain why?
    Mr. Edwards. Well, because when we need to go and reach 
outside of DHS employees or contractors, without having that 
authority, we have to still go to the Department of Justice. 
And we have been very prudent in every action that we have 
taken, and I feel, and many in the IG community also feel that 
having this authority would only bolster the IG's role.
    Mr. Cummings. Ms. Halbrooks, your job is to oversee the 
Department of Defense, the biggest agency in the Federal 
Government, with an annual budget of more than $1 trillion. In 
your written testimony, the number one area you highlight for 
reform is acquisition process and contract management. You say 
``challenges include obtaining adequate competition, defining 
contract requirements, obtaining fair and reasonable prices, 
and oversight of contract performance.'' Is that right?
    Ms. Halbrooks. That is right, sir.
    Mr. Cummings. And with that in mind, I want to ask about 
the largest weapons contract in history, the Joint Strike 
Fighter. So far, the Department has spent 12 years developing 
this deeply flawed aircraft and the cost has skyrocketed to 
about $400 billion, is that correct? Is that correct, ma'am?
    Ms. Halbrooks. That is my understanding.
    Mr. Cummings. You don't know that?
    Ms. Halbrooks. We haven't done any work ourselves in the IG 
office. I know GAO recently issued a report on the cost 
overruns, but we have not looked at that particular weapon 
system with respect to cost overruns.
    Mr. Cummings. So something costing $400 billion and $1 
trillion over 30 years, is it just the way you operate that you 
don't look at these weapons systems or what? I am kind of 
confused here.
    Ms. Halbrooks. No, we do look at weapons systems. I 
certainly don't want to leave you with that impression. Major 
weapon system acquisition is a focus of our work and the one 
example that I illustrate in my testimony of the JLENS program.
    Mr. Cummings. Right.
    Ms. Halbrooks. We were able to save the Department $2.5 
billion when they agreed to cancel that program.
    On the F-35, and we continue, by the way, to look at other 
ACAT1 and ACAT2, the largest investments in the Department. 
They have 83 of the high value programs at $1.6 trillion and 
116 ACAT2s. So we do focus on that and that is going to be a 
continued area for renewed focus for the remainder of time.
    What we have done with the F-35 is decided that the value 
that we could add, because the cost overruns have been looked 
at in other places and certainly the Department leadership is 
aware of them, as well as the program office in GAO has added 
insight, we have undertaken this past year to do an assessment 
of the quality management of the system. So we have been to 
several contractor and subcontracting sites where they are 
actually producing parts of the F-35 and looked at whether the 
Government is getting what they have paid for. We have issued 
notices of concern with respect to the quality management and 
oversight at each of those plants. We will be rolling those up 
and issuing a final report in the next few months.
    Mr. Cummings. Okay, I am glad you said that because this 
reminds me so much of the Deepwater project with the Coast 
Guard. I swear, it is almost like a mirror type situation. So 
you just said some very significant words, something that I 
used to say when we were dealing with the Deepwater project. I 
said, is Government getting what it paid for.
    Now, Ms. Halbrooks, combat planes need to fly at night, 
would you agree?
    Ms. Halbrooks. Yes, sir.
    Mr. Cummings. They need to flight at night. The same 
testing office reports that this plane does not yet have combat 
capability, nor can it fly at night. Would you agree that 
combat planes need to be able to engage in combat?
    Ms. Halbrooks. Yes, sir.
    Mr. Cummings. Yes. And the Navy's version of this plane 
can't land on aircraft carriers. Ms. Halbrooks, I assume you 
would agree that this is a significant problem.
    Ms. Halbrooks. It is, sir. And if I could add, you 
mentioned the Office of Test and Evaluation within the 
Department, and that is, I think, an example of the attention 
that the Department is giving this and how we have decided to 
use the IG resources in a way that complements that, in terms 
of focusing on the quality and what is happening in the 
individual plans, and not duplicate the oversight that is 
happening elsewhere.
    Mr. Cummings. But I want to go back to something that you 
said, and I mentioned it a little bit earlier. You said the 
challenges include obtaining adequate competition, defining 
contract requirements, obtaining fair and reasonable prices, 
and oversight of contract performance. One of the things that 
we discovered in the Deepwater process is that we had extremely 
poor acquisition process. In other words, the people who were 
doing the acquisitions were not necessarily qualified to do 
them. When we changed that, we suddenly saw a big difference.
    Is this a situation where we have an acquisition problem? I 
mean, is that part of the problem or do you know?
    Ms. Halbrooks. I think that is right. I think our reports 
have shown that over time and I think the Department has 
knowledge the acquisition workforce over the past several years 
has languished and that they have been trying to staff up and 
improve the quality of that workforce. But the lack of contract 
oversight, especially in the contingency operations, as 
Congressman Tierney talked about, remains a vulnerability for 
the Department.
    Mr. Cummings. Ms. Halbrooks, to your office's credit, the 
IG sounded the alarm on this flawed approach to acquisition 
years ago, and your office and the Government Accountability 
Office warned about the practice of something called 
concurrency. That is when the Department produces and buys 
planes while critical testing is still going on.
    Mr. Hale, let me turn to you. Right now these planes don't 
work. Only a fraction of the testing is complete. Yet, the 
Department still plans to buy nearly 2,500 planes at a cost of 
$400 billion. The Department's own acquisition chief, Under 
Secretary Frank Kendall, called this ``acquisition 
malpractice.''
    Mr. Hale, do you agree with Mr. Kendall? Do you think this 
is acquisition malpractice?
    Mr. Hale. I am going to let Mr. Kendall defend those words, 
Mr. Cummings.
    Mr. Cummings. Well, what do you think?
    Mr. Hale. I believe we need the F-35. I know that is true. 
We have a badly aging Air Force fleet and a badly aging Marine 
Corps fleet in particular, as well as problems in the Navy. But 
I sit every day in staff meetings with Frank Kendall and I know 
that he is deeply involved in trying to do a better job 
managing the F-35, which does have problems. I am also 
convinced, based on 40 years of watching the Department, we 
will make this plane work at night and land on carriers, and 
all the things it needs to do.
    Mr. Cummings. To the tune of $1 trillion over the next 30 
years? One trillion? How long do we have to wait?
    Mr. Hale. The plane is still in development, so we will 
need to wait until we solve these problems. I understand your 
concerns, and we share those concerns at the Department, but we 
know we have to make this plane fly and fly right, and I 
believe we will do that.
    Mr. Cummings. Thank you, Mr. Chairman.
    Chairman Issa. Thank you.
    We now go to Mr. Mica.
    Would the gentleman yield for 10 seconds?
    Mr. Mica. Yes.
    Chairman Issa. I might note that we will spend over $150 
trillion over that period of time, just to put the trillion 
dollars in perspective.
    I yield back.
    Mr. Mica. Thank you.
    Mr. Borras, how much is the total DHS budget, did you say? 
In your testimony you gave a multibillion figure.
    Mr. Borras. I was referring to the----
    Mr. Mica. Well, what is your total? What do you spend in 
DHS?
    Mr. Borras. The gross amount?
    Mr. Mica. The gross amount.
    Mr. Borras. The gross amount is just under $60 billion.
    Mr. Mica. Sixty billion. Okay, here is one of the 
categories of DHS, just your management, sort of your top 
bureaucracy. You spend $324 million under the category of 
Office of Chief Information Officer, is that correct?
    Mr. Borras. That appears to be.
    Mr. Mica. A third of the billion dollars for information 
office.
    Is that an area, Mr. Edwards, that might be a candidate for 
some cost savings? Is that absolutely essential for the process 
of DHS, Mr. Edwards?
    Mr. Edwards. Well, DHS spends about $6 billion in IT 
systems and infrastructure. Office of Chief Information 
Officer.
    Mr. Mica. Yes. So it might be a candidate.
    Mr. Edwards. Sure.
    Mr. Mica. Okay. Just my point.
    Let me drill down a little bit to TSA. First, the Secretary 
said, this is the 4th of March, we are going to see lines 150 
to 200 percent as long as we see, and this is at TSA screening 
points. Are you aware of that, Mr. Borras?
    Mr. Borras. Yes, I am.
    Mr. Mica. Do you know any reason why she shouldn't step 
down as Secretary when she makes a remark like that? Do you 
agree with it? Maybe we should have you step down too. Because 
there is no reason in an agency, how much is the agency's total 
budget? How much is the agency's total budget? It is $5.5 
billion for TSA.
    Mr. Borras. For TSA?
    Mr. Mica. Yes.
    Mr. Borras. Yes.
    Mr. Mica. And within that you can move money around, can't 
you, for sequestration?
    Mr. Borras. You cannot move money without reprogramming 
authority.
    Mr. Mica. No, but, again, within the $5.5 billion, you have 
to cut $276 million. Now, let me ask you a question about how 
many personnel you have in TSA headquarters. Offline we have 
3,900, just a hair under 4,000 people in administration, 
making, on average, $103,000 a year. Is that correct?
    Mr. Borras. I don't know the exact number.
    Mr. Mica. Well, you should know. That is what is correct. 
It is online. That is the amount. And you have how many 
screeners? According to your online, also, 51,277? Is that 
correct, or in that range?
    Mr. Borras. In that range, yes, sir.
    Mr. Mica. And you can't move some of the people out of 
administrative positions, sitting on their butt within just 
miles of the capitol of Washington, and put them to work? I 
mean, we should have the secretary out there screening people, 
if we need to do that to expedite people through the airport, 
and you.
    This is a joke. She needs to find other employment soon, 
and you may need to find it, and some of the 4,000 people 
making $103,000 a year, and tell the public that they may be 
waiting three and four hours. You have the discretion to move 
money and personnel around within that account, isn't that 
correct?
    Mr. Edwards. Yes.
    Mr. Mica. To meet that, Mr. Edwards? Mr. Edwards, the IG, 
just said yes.
    This is one of the most shameful things I have seen any 
agency do, and you are bloated beyond control. You have almost 
66,000 people; you have 10,000 administrative people out in the 
field. Do you know the percentage of people in the headquarters 
that are supervisory level? You ought to look at this 
information. It is nearly 27; it is 26.8 percent. And some of 
those positions can't be sequestered, Mr. Borras?
    We never intended Homeland Security to bloat to this 
extent. I was one of the authors of TSA. I can tell you that 
was never Congress's intent. We never intended Homeland 
Security to grow to an agency that is totally out of control. 
This is an outrage to the American people. I am offended by the 
Secretary of Homeland Security to tell us and the American 
people that they are going to be subject to her form of torture 
to try to make sequestration look like it can't be handled, 
that we can't make these cuts and reductions from 
administrative overhead from management. Ten thousand people 
out in the field.
    How many airports are there where there is TSA presence, 
Mr. Borras, in the United States?
    Mr. Borras. It is about 470.
    Mr. Mica. Four hundred fifty-seven. And 30 airports have 70 
percent of the traffic, right? So you have airports with 
private screening, like Rochester, New York, Kansas City, 
Kansas, with 15 to 18 TSA administrative personnel that you 
don't need. You can get rid of some of these people. You can 
get rid of some of the people and get them out of the offices 
across the Potomac and around Washington, get them to work. And 
51,000 screeners. Congress even put a cap of 40,000 screeners 
at one time. We started with 68,500. What are you doing? It is 
outrageous.
    Chairman Issa. I thank the gentleman.
    Mr. Mica. I yield back the balance of my time.
    Chairman Issa. Under Secretary, if you would like to 
answer, I will allow time. I know there were a lot of questions 
there.
    Mr. Borras. There were a lot of questions there and there 
were a lot of characterizations of both the intent of the 
secretary and of the Department. I appreciate the Congressman's 
concern for aviation security. He has been very outspoken over 
the many years.
    Let me just say that we are doing everything we can to 
minimize the impact of sequestration not just in TSA, but 
across the board in the Department. I will say that the 
leadership is absolutely committed to minimizing the disruption 
of the services of the Department to both the traveling public, 
to the movement of cargo, to aviation security, to the 
protection of the President, to the response of natural 
disasters and otherwise. Sequestration is pretty much agnostic, 
Mr. Chairman.
    Chairman Issa. I apologize for interrupting, but we are 
sort of on overtime that belongs to the other party. The 
gentleman, in that, did ask you if you could have reduced or 
you could reduce some of the administrative overhead. That 
seemed to be a clear question. Could you answer that? Then we 
will go to the other side.
    Mr. Borras. We are looking at, certainly, all of the 
overhead expenses, not just at TSA, across the board. We have 
instituted, in TSA, a hiring freeze; we have reduced overtime, 
which will have an impact, progressively, over time, not 
immediate, will have a progressive impact on operations. But we 
are looking at all areas.
    Chairman Issa. Thank you.
    Mr. Tierney.
    Mr. Tierney. Thank you, Mr. Chairman.
    I know that this may not have been the intent of some 
people that put the Homeland Security laws together, but as one 
who voted against it, I think it was something we all could 
have anticipated would happen with the creation of a new 
department, it would blow out of control. I think at the time 
we said it was like rearranging the deck chairs on a sinking 
ship, as opposed to doing something constructive.
    Chairman Issa. Would the gentleman yield? I heard it as 
strapping together multiple sinking ships, actually.
    Mr. Tierney. So here we are, and the fact of the matter is 
that we look at these things and we never should have let it 
get to sequestration. And I would hope that all these concerns 
that we show, Congress has the ability to dictate how money is 
spent, and maybe we ought to take some of that responsibility 
on ourselves, instead of grilling some of these witnesses.
    You are here and you should get grilled for your testimony 
or whatever, but Congress spends the dime. We ought to be 
deciding what money is going out to these departments. Then we 
don't have to argue with you about how it is spent. So if we 
accept some of our responsibility, and if we had accepted it 
long before sequestration, life would have been better for a 
lot of different people and we could have avoided all of this.
    Now, Mr. Hale, I understand that the Joint Strike Fighter 
has actually been spared any major cuts under the sequester, is 
that correct?
    Mr. Hale. No. It is a program project activity. It will 
take at least a 7.8 percent cut, depending on how it comes out. 
It will be reduced.
    Mr. Tierney. Okay. How do you intend to reduce it?
    Mr. Hale. The program manager will decide. They will look 
at a variety of things; support equipment, management reserves 
I would guess would be the start, but I expect we will buy 
fewer aircraft, probably two to four, and I think they are 
still thinking how they will do that. Incidentally, the whole 
game may change again, as Congress passes a budget, if they do 
so this week, because it will significantly affect the program 
project and activity status or structure.
    Mr. Tierney. Well, respectfully, I say to you your defense 
of the F-35 reminds me of the defenses I used to see of the F-
22, and it is really a little bit disturbing. This program is 
out of control, and it looks to me like it is a program that 
just got too big to kill, and we find people just running 
around, not wanting to do what I think is pretty clearly 
indicated should be done on this.
    I note that in the Simpson-Bowles report; I note it on the 
Stimson report, a whole bunch of other reports that come out 
and indicate that this program is just growing exponentially, 
not necessarily to the benefit of the American people or our 
defense on that.
    Let me switch the subject, if I can, Ms. Halbrooks. We have 
a number of laws and regulations on the books that purport to 
encourage or to stop single source contracting. We really ask 
for full and open competition. Can you tell us a little bit 
about what risks are engendered by the failure to openly bid 
and compete a contract?
    Ms. Halbrooks. I think open competition is inherent to 
getting the best pricing, the best value for the Government, 
and making sure that contracting is done in the most efficient 
and effective way. So it is a foundational concept that we 
compete contracts for the best price for the Government.
    Mr. Tierney. Well, recently, The Washington Post, among 
others, reported that no-bid contracts are increasing.
    Mr. Hale, I think one of the things that was reported is 
that the Department spent $100 billion on no-bid contracts last 
year. Is that correct?
    Mr. Hale. I don't know that number. I will check for you. 
But there is a lot.
    Mr. Tierney. Would you get us that information, please?
    Mr. Hale. Yes. I will supply it for the record.
    Mr. Tierney. All right. So this happens even more in 
wartime. We found that out through the investigations we did on 
our own; we also found it out through the Wartime Contracting 
Commission, who said it was an unprecedented degree of no-bid 
contracts in both Iraq and Afghanistan and, really, there was 
no adequate competition on that.
    One example of that was $36 billion for the Logistics Civil 
Augmentation Program 3 contract. That was awarded to KBR, 
Kellogg, Brown and Root. The Army did not require competition 
on any task orders under the contract for eight full years. So 
in the absence of that full and open competition, no one should 
be surprised when the Defense Contract Audit Agency found high 
amounts of questioned and unsupported costs.
    So we see this happening time and time again. It tends to 
create, particularly with the bridge extensions. Can you tell 
us how many of those sole-source bridge extension contracts 
exist, Mr. Hale?
    Mr. Hale. I don't have that number either.
    Mr. Tierney. Would you get us that information as well?
    Mr. Hale. We will get that for the record.
    Mr. Tierney. It seems that that is being used to avoid re-
competing the contract and it really creates an advantage for 
incumbent contractors, sort of stifles competition.
    What steps are you taking in the Department to sort of end 
that practice or to increase competition and reduce sole-source 
contracting?
    Mr. Hale. Well, the strongest one is a commitment to it, 
and we are committed to it. As Lynne said, it is a key. We are 
struggling right now because one of the best sources of 
competition is services contracting, and it is being cut 
severely as we try to achieve efficiencies, and it will be cut 
under sequestration and the other problems that we face.
    We are also, with lower budgets, finding it is harder to 
maintain multiple contractors in some of these large programs, 
because it is expensive up front to do it. But we share the 
commitment to competition is key to getting lower prices.
    Mr. Tierney. Just on the Defense Logistics Agency and the 
food contract over in Afghanistan there is a $750 million 
discrepancy in that contract, and yet they are giving them 
another sole-source contract for an extension on that. That 
kind of thing just seems absurd.
    Ms. Halbrooks, are you satisfied with the answer Mr. Hale 
just gave?
    Ms. Halbrooks. Well, I appreciate his commitment, and the 
Department's, to ensuring that sole-source contracts are 
scrutinized, but I think there still is a way to go. And the 
prime vendor example that you gave in Afghanistan does still 
present a concern, although we are encouraged that, after we 
issued our report, with potential monetary benefits of $125 
million on that contract, that DOA actually went back and 
further scrubbed the books and looked deeper and is trying to 
recoup substantially more than that, which does show to me a 
willingness of the Department to take our IG recommendations 
and apply them more broadly to the problems at hand.
    Mr. Tierney. Except they gave the contract to the same 
company again.
    Ms. Halbrooks. True.
    Chairman Issa. Thank you.
    We now go to Mr. Walberg. We now go to Mr. Farenthold. Mr. 
Farenthold, would you yield for 10 seconds?
    Mr. Farenthold. Absolutely, Mr. Chairman.
    Chairman Issa. I just want to read from my Wikipidea on the 
F-22 Raptor. Sixty-six billion dollars was the program cost, 
180 are in service and it continues to be a mainstay and a 
critical element in the stealth inventory of the Department of 
Defense.
    I will let that be answered later.
    Mr. Farenthold.
    Mr. Farenthold. Thank you very much, Mr. Chairman. As a 
member of the Transportation Committee, I am also deeply 
concerned about the TSA, so, Mr. Borras, Chairman Mica asks you 
about the statement Secretary Napolitano made, seeing doubling 
of wait times in airports as a result of sequestration. Has 
that happened?
    Mr. Borras. I am not aware that we have had any doubling of 
wait times at airports across the Country.
    Mr. Farenthold. Has there been any significant measurable 
increase that you are aware of?
    Mr. Borras. I am aware of, in some instances, where, in 
some airports, due to the elimination or reduction of overtime 
that is required and has resulted in some additional wait time.
    Mr. Farenthold. You are aware that the UK's Telegraph 
reported that airport officials at two of our busiest airports, 
Atlanta and LAX, have reported no significant changes in wait 
time, nothing beyond what is normal.
    I guess my concern, and we are seeing it throughout the 
Government, is the scare tactics associated with sequestration 
and bad choices being made on where to implement those cuts. 
Are you all still talking about doing furloughs within the TSA?
    Mr. Borras. No.
    Mr. Farenthold. All right. So how are you looking at 
meeting those cuts?
    Mr. Borras. Predominantly, again, the cuts at TSA cut 
across the various program plan activity accounts, the PPAs. 
The way TSA is structured, most of their salaries and expenses 
are in individual PPAs, so those will be subject to the 5 
percent cut.
    Mr. Farenthold. So you are going to cut salaries, then?
    Mr. Borras. No. You will have to reduce overtime; you will 
reduce training in other accounts.
    Mr. Farenthold. Okay. And the chairman pointed out was it 
over 25 percent, one in four, there is one manager for every 
four TSA employees? I mean, that seems awful high to me, too.
    Mr. Borras. I don't know that that is the number. I would 
be happy to provide the committee with a complete accounting of 
the supervisory staff ratio.
    Mr. Farenthold. And with these cuts you all are still 
hiring, right?
    Mr. Borras. No, we have a hiring freeze.
    Mr. Farenthold. Then how come there are 54 security 
specialist jobs currently posted on the Federal Government 
employment Web site?
    Mr. Borras. Well, I don't know what date those were posted.
    Mr. Farenthold. That was today.
    Mr. Borras. I don't know what the posting date of those 
were.
    Mr. Farenthold. All right, so you are wasting people's time 
having them apply for jobs that aren't there. You might want to 
go ahead and take those down.
    Mr. Hale, I wanted to visit with you about some of the 
Defense Department issues. I have a Corpus Christi Army Depot 
in the district I represent and they are potentially facing 
furloughs, despite saving the Government a ton of money on 
repairing rotary wing aircraft. But assuming the Senate passes 
the MilCon VA and DOD appropriations similar to the House, are 
you going to have the flexibility to minimize furloughs and 
cuts and the overall effect of the sequestration on the program 
if we give you more reprogramming authority in an 
appropriations bill, as opposed to a CFR?
    Mr. Hale. Well, first, we didn't, unfortunately, get, so 
far, at least, any additional transfer authority for 
reprogramming. Our problems are more than sequestration, Mr. 
Farenthold. You are probably aware of this, but the continuing 
resolution has the money in the wrong places. That will get 
fixed if the Congress passes it.
    But we have numerous other problems. We are going to 
protect our wartime spending, which means we have to take 
disproportional cuts in the base budget; and, unfortunately, 
right now we are spending more than we anticipated two years 
ago when we put together the wartime budget. When you add all 
that up, over the next seven months, we are about 40 percent 
short, under current laws, of our needs for O&M, which is 
causing the readiness crisis.
    The bill that is before Congress or the Senate right now, 
if it passes, will solve about a third of that, but we will 
still be in a crisis situation. We are going to have to cut 
training and lay off people.
    Mr. Farenthold. I appreciate that. I am running out of 
time. I don't mean to jump around, but I do want to get to Mr. 
Edwards and ask him a question specifically with respect to IT 
and homeland security. One of you all's recommendations was 
increasing security from possible insider threats by simple 
things like disabling the USB port on computers so rogue 
employees couldn't download all sorts of data. Have those been 
implemented yet?
    Mr. Edwards. Thank you, sir. TSA did not concur with us, so 
that remains still unresolved.
    Mr. Farenthold. It seems to me like every low budget spy 
movie you have has somebody plugging something into a USB port 
and walking off with all sorts of data. Just turning those off 
would seem like an inexpensive, easy recommendation. And there 
are quite a few other recommendations throughout Homeland 
Security that haven't been implemented and would save money, is 
that not correct?
    Mr. Edwards. There is 1,253.
    Mr. Farenthold. Thank you very much.
    I yield back.
    Chairman Issa. I thank the gentleman.
    We now go to the gentlelady from California, who was here 
at the bell, Ms. Speier.
    Ms. Speier. Mr. Chairman, thank you, and thank you to those 
at the witness table.
    I would like to spend a couple minutes talking about Ms. 
Halbrooks' document, that we should probably spend an entire 
hearing on, because it talks about an issue that I thought was 
fixed decades ago, when we had gold-plated toilet seats, and we 
are paying exorbitant amounts of money for parts.
    In one of your reports you reference a ramp gate roller 
assembly, it looks like this little roller that you might see 
on a dishwasher, that was actually purchased at the Corpus 
Christi Army Depot. Its cost from the Defense Logistics 
Administration would be $10.25, but we, at the Corpus Christi 
Army Depot, paid $1,626 for that.
    Now, that is a 15,768 percent cost increase. Why are we 
still having these kinds of problems? To you, Ms. Halbrooks and 
Mr. Hale.
    Ms. Halbrooks. The root cause of the problems is a topic 
that probably Mr. Hale can address as well, but when the 
Department shifted, in 2004, to performance-based logistics, 
one of the unfortunate results was that the services are buying 
these types of parts from contractors and, in addition, DLA 
already has an inventory of excess parts.
    The reports that we have done, both with respect to the 
Sikorsky and Boeing contracts to support helicopters, where the 
spare parts are kept at the Corpus Christie Depot, have 
multiple examples of this type of thing. And you are right, it 
is a small part, it looks like a washer, and it is basically 
the Department has been buying spare parts that they already 
have in inventory and paying too much for them.
    Ms. Speier. All right, so how are we going to fix that, Mr. 
Hale?
    Mr. Hale. If we paid too much for that part, we need to get 
our money back. I am not familiar with that particular one.
    Ms. Speier. Well, you should be familiar with it.
    Mr. Hale. We have an organization to do that.
    Ms. Speier. All right, Mr. Hale, excuse me. You should be 
familiar with this because this is all out of an inspector 
general report that you should have studied very carefully when 
it was produced.
    Ms. Halbrooks, when was this produced?
    Ms. Halbrooks. Our reports were issued in both 2011 and 
2012. I will say, ma'am, that we have worked closely with the 
director of DLA. One of the concerns that we had when we 
identified that this problem was still remaining is that there 
were probably other contracts for equipment that the Department 
had where there was also excess inventory that needed to be 
drawn down. The Department has issued a policy, I am not sure 
if it was Army, I will have to get that for you or the 
Department can certainly, to require that they use the existing 
inventory.
    So they have responded to our reports and they have 
certainly concurred in our recommendations, and one of the 
agreements, rather, discussions that we had with the Department 
after these reports were issued was the efficient use of IG 
resources versus management proactive involvement. We could 
continue to look at contract after contract, or the Department 
could fix the problem. They indicated to us a willingness to 
proactively go and look at other systems and spare parts. We 
hope they are doing that and we are going to check up on them 
this year and do some more work in this area.
    Ms. Speier. It reminds me of the patient that complains 
about having been in the hospital and then finding out they 
paid $50 for an aspirin. It sounds like that is what we are 
doing in terms of some of these projects, so maybe that will 
explain why an F-35 is looking at a trillion dollars in costs 
over a short period of time.
    I guess I would like to see us fix something instead of 
just complaining about it. It is not very constructive for us 
to beat you all around the head and not have anything come from 
it. So I guess, Ms. Halbrooks, what I would like to hear from 
you is if there was one thing this committee could kind of 
focus in on that would truly save money within the Department 
of Defense which you haven't been getting traction on, what 
would that be?
    Ms. Halbrooks. I think you have hit on one, spare parts, 
certainly, and I think the other one we have discussed as well, 
already, and that is the review of major weapons systems that 
are over budget and behind schedule.
    Ms. Speier. All right. In my remaining 17 seconds, let me 
just say that one of the other issues that I think we need to 
spend some time on is the overhead. We can talk about retaining 
somehow the profit sector, but if the contractors are allowed 
to pad their contracts with overhead, we are losing the battle. 
And I hope that you would address that at some point as well. 
Thank you.
    Chairman Issa. I thank the gentlelady.
    We now go to the gentleman from North Carolina, Mr. 
Meadows.
    Mr. Meadows. Thank you, Mr. Chairman.
    And thank you, each of you, for your testimony.
    Secretary Borras, as you were testifying early on, you said 
over the last three years what you did was took a decentralized 
management approach and centralized that to become more 
efficient, is that correct?
    Mr. Borras. That is correct.
    Mr. Meadows. So essentially the management of DHS is under 
your purview and you oversee that in this new centralized 
organization?
    Mr. Borras. Well, we haven't completely centralized. What I 
was referring to was the management directorates, those that 
report directly to me, the CFO, the CIO, the chief procurement 
office, et cetera, that those were largely decentralized in the 
management directorate and we have taken to centralize that. So 
if you are implying that I have centralized the management of 
CBP, TSA, et cetera, all under my control, the answer would be 
no.
    Mr. Meadows. So we are centralized in a decentralized way 
is what you are saying. So we have areas all over that still 
have their own vertical reporting areas.
    Mr. Borras. That is correct.
    Mr. Meadows. Okay. As we look at this, I want to focus on 
two areas, and one of it is the planning in anticipation of 
sequestration and how that was done. Because in some areas it 
sounds like we did unbelievable planning; in others it sounds 
like we did none. And I want to refer back. In 2011, some 26 
employees received bonuses of over $10,000 apiece, with the 
highest bonus being $57,000 to a single employee. There are 
indications that in 2012 not only did we cut back on that, but 
those were, indeed, increased in terms of the level of bonuses. 
Would you say that that is a fair characterization?
    Mr. Borras. That doesn't square with my recognition of 
Department bonuses. Department bonuses over the last several 
years had begun to come down. So the amount of money we spend 
on bonuses has been decreasing.
    Mr. Meadows. So you would say 2012 decreased from 2011?
    Mr. Borras. I would be happy to provide you those numbers.
    Mr. Meadows. Well, from the Federal Web site, what we have 
is, under the Freedom of Information request, it indicated that 
these facts are indeed correct: 26 people got bonuses of 
$10,000 or more and $57,000. So as part of this, in this 
anticipation, with regards to bonuses, when sequestration was 
originally signed into law, did you put out anything that said 
we needed to hold off on bonuses to make sure furloughs were 
not put on more of the rank and file?
    Mr. Borras. The Department issued guidance back in the 
fall. Our bonus cycle was much earlier than the sequestration 
cycle, but we put out guidance Department-wide which lowered 
the total amount available for bonuses.
    Mr. Meadows. So that happened as a result of sequestration, 
you put out a plan to reduce bonuses?
    Mr. Borras. Well, that was a recognition of the need to 
begin to control costs, absolutely.
    Mr. Meadows. All right. So as we look at this, going 
forward with this, I want to shift gears to, I guess, the 
secretary in the recent report we talked about, illegal traffic 
across the borders and some release of illegal detainees that 
we had of some 2,000, and I think the secretary warned that, 
because of sequestration, that we were going to have additional 
drug and human smugglers that were taking advantage of 
sequestration. How would this prediction, what was it based on, 
that we are going to have this additional human trafficking and 
drug because of sequestration?
    Mr. Borras. Well, I am not familiar with that specific 
quote.
    Mr. Meadows. It was in The Washington Post on Sunday.
    Mr. Borras. But I am not familiar with that specific quote. 
In general, all of the accounts, as I described earlier, are 
subject to the sequestration cuts, which includes, as well, 
those accounts that are in the removal operations of ICE.
    Mr. Meadows. So would you say that that statement was not 
based on any real data, then, it is just an overarching theme?
    Mr. Borras. Well, I don't know the specific statement that 
she made relative to that.
    Mr. Meadows. So was there any study that was done in terms 
of additional increased drug trafficking that might result? Was 
there any study at all done, specific study?
    Mr. Borras. That wouldn't be something that I would be 
specifically aware of; that wouldn't be in my purview, to look 
at that kind of work.
    Mr. Meadows. So who would know about any studies?
    Mr. Borras. Well, whether it is the Customs and Border 
Protection or ICE, I am sure we can provide the committee some 
information to respond to your question relative to studies on 
impact on border.
    Mr. Meadows. All right, thank you.
    I yield back. Thank you, Mr. Chairman.
    Chairman Issa. I thank the gentleman.
    We now go to the gentlelady from the District of Columbia, 
Ms. Norton.
    Ms. Norton. Thank you very much, Mr. Chairman.
    Some had looked at the cuts, certainly the 10-year cuts, as 
opportunities to look at the untouchable budget, the Defense 
Department budget. No one, of course, envisioned that any 
budget, domestic or defense, would be aided by the sequester 
cuts. But some, certainly on the other side of the aisle, were 
willing to do the sequester, because they want cuts no matter 
what happens. At least they got some cuts.
    I note, by the way, that the Republican budget, both last 
year and this year, cuts enormously, and even this year even 
more enormously, domestic programs, while increasing the 
Pentagon budget. It does seem to me that the justification lies 
on those who want to increase any budget at a time when every 
other budget is being cut.
    So let's take a look at one program. There are a thousand 
programs one could choose. The Joint Strike Fighter program. 
That is a really ambitious program, a $400 billion program, 
because it relates to existing fleets across the board; Army, 
Marine Corps, and Navy. And that may be well the most efficient 
thing to do, so I don't question the initial idea. But this 
project has faced all of the problems associated with big 
defense projects of the kind from cost overruns to poor 
performance of the aircraft itself. I am interested in the bad 
management of the acquisition process.
    In 2003, the plan was to purchase 2500 aircraft over the 
life of this program. Despite the problems, including the cost 
overruns, I understand the Department still plans to purchase 
2500 aircraft. Mr. Hale, is that correct?
    Mr. Hale. Yes.
    Ms. Norton. Now, let's look at the cost estimate for one 
plane. And I have to ask what is the function of these cost 
estimates if they rise so consequentially. In 2003, the cost 
estimate was $81 million; today it is estimated to cost twice 
as much. We have gone through a recession. I thought the cost 
of materials was less. So I have to understand that increase 
during this period, so I ask, first, could you explain why the 
acquisition cost per plane has doubled in just 10 years?
    Mr. Hale. Well, I would like to check those numbers for you 
for the record. I don't have them in my head.
    Ms. Norton. Would they surprise you if those were in fact 
correct?
    Mr. Hale. No. I mean, the costs have gone up substantially.
    Ms. Norton. Well, what would cause the cost to double?
    Mr. Hale. Unanticipated cost growth. We misestimated what 
it was going to cost to develop and to buy the aircraft when it 
was first put forward and unanticipated problems in the testing 
process I think are the two major reasons.
    Ms. Norton. Having done such projects over the years, you 
don't build in problematic areas so that you wouldn't have what 
seems hard to explain, such huge increases in costs?
    Mr. Hale. We tried, but obviously in this case we weren't 
successful, or at least not fully successful.
    Ms. Norton. All right. Well, let's look at the sequester. 
Surely, that provides an opportunity for you to look at some 
way to cut the acquisition cost of this Joint Strike Fighter.
    Mr. Hale. And we didn't need sequester to do it. We have 
been pushing in every way we can, including trying to sharpen 
our pencils with the contractor and do a better job of 
negotiating with them, and I think we have at least had some 
success in that area.
    Ms. Norton. So do you expect that, particularly when the 
contractor sees what you are going through, and since you have 
been negotiating, that you will at least be able, at this 
point, to bring down this cost from $161 million, doubling the 
cost that was predicted 10 years ago?
    Mr. Hale. I would hope that we could bring them down. That 
certainly is our goal and we will do everything we can to make 
that happen.
    Ms. Norton. Mr. Hale, are you in the process of negotiating 
now on that matter?
    Mr. Hale. I am sorry?
    Ms. Norton. Are you in the process of negotiating to bring 
down the cost?
    Mr. Hale. Yes. We buy these planes in lots, and each lot is 
negotiated, and there was a lengthy negotiation over the prior 
lot, and it was caused by our desire to bring down the cost. 
So, absolutely, we will continue in future ones.
    Ms. Norton. Could I ask, Mr. Chairman, that within the next 
60 days you report to the chairman of this committee what 
progress you have made on bringing down the cost of the Joint 
Strike Fighter program?
    Mr. Hale. We will do it.
    Ms. Norton. Thank you very much.
    Mr. Jordan. [Presiding.] Thank you.
    The gentleman from Oklahoma, Mr. Lankford.
    Mr. Lankford. Thank you, Mr. Chairman.
    Mr. Hale, I would like to get a chance to follow up on the 
conversation earlier about sequestration and the effects of the 
full year appropriations bill on DOD. You had mentioned before 
that about a third of the problem is solved in that. Could you 
go into greater detail on what help do you receive with a full 
year appropriation?
    Mr. Hale. The major help, and the continuing resolution 
fixed our base budget at the fiscal 2012 level. We made major 
changes between 2012 and 2013, increasing our operation and 
maintenance funding to maintain ready forces and cutting back 
on investment to meet the budget targets. The CR wiped that 
out.
    If we get an appropriations bill as the current one being 
debated before the Senate, it will get the money in the right 
appropriations, and that is the major help that it will provide 
to us and it will be significant. But it won't get rid of the 
problems. We will still have sequestration and we still have a 
commitment to protect our wartime or OCO budget, which means a 
disproportionate cut on the base and some other OCO problems.
    Mr. Lankford. I understand. I am trying to drill down a 
little more. A general statement of it will help doesn't help 
us. What does that mean is what I am asking. Because we are 
very concerned, as you are as well, about protecting workers 
and not protecting waste. Where we can find waste, we need to 
eliminate it. That is why the IG report is so significant to 
us, as well and your Department has been very helpful to 
identify those things with the IG and say let's take action on 
that.
    But where we can find issues with inventory, as Ms. Speier 
had mentioned earlier, we have a washer that is $1600 and that 
kind of thing happens, that infuriates us. We want to protect 
our workers in the process, as you do as well, I am sure, so I 
need more specifics.
    When you say it helps a third of the way there, what do you 
mean by that?
    Mr. Hale. Briefly, we have a shortfall of around $35 
billion under current law and what is called our operations and 
maintenance budget. It is made up of sequestration; it is 
caused by the fact that the money is in the wrong 
appropriations and by the OCO or wartime problems. I can give 
you more detail, but I will take more time than you would like. 
About a third of that will get fixed when you put the money in 
the right appropriations, if the Congress enacts that 
legislation.
    And I couldn't agree with you more. We need to try to 
accommodate all of these, and we have told our managers find 
efficiencies if you can. But these cuts are sufficiently abrupt 
and large that we will have to go well beyond straight 
efficiencies. Anything that we could identify and get approved 
by Congress wouldn't be enough to get $46 billion out of the 
defense budget in seven months, so we are going to have to do 
other things.
    Mr. Lankford. When you talk about the $46 billion, that is 
the budget authority number. What is the budget outlay number 
that has bene identified? That is the actual. What actually 
happens this year?
    Mr. Hale. We don't deal in outlays, usually, but it is 
probably about 80 percent of that. A lot of it is O&M. I would 
have to get you that. We think in budget authority, which is 
what you appropriated.
    Mr. Lankford. I understand, but the latest estimate that we 
have is this is about an $85 billion cut.
    Mr. Hale. That is for the total Government.
    Mr. Lankford. Correct, across the total Government. And the 
actual budget outlays for that for this single year is about 
$45 billion to $44 billion.
    Mr. Hale. Okay.
    Mr. Lankford. So that statement would be that there is only 
a $1 billion cut everywhere else this year. I don't think it 
would hold up. So it is about half of it. So what I am trying 
to figure out for DOD, have they identified what effect it has 
this year on it or what effects it is going to have out. Does 
that make sense?
    Mr. Hale. I am not sure I understand. On the outlays, you 
mean?
    Mr. Lankford. On the outlays.
    Mr. Hale. We don't normally deal with that. I don't have 
that number in my head. It is probably 75 percent or so of the 
budget authority cut, but I will get it for the record.
    Mr. Lankford. Okay. That would be terrific to be able to 
have because we are trying to identify what is the actual 
impact for this single seven month time period. It is not $46 
billion for this seven month time period, though the effects of 
it have to take and have to start with that. I understand how 
it goes through the process.
    You also mentioned that there has been a dramatic increase 
in the cost of the war, or at least what you expected it would 
be in that. Can you give us some additional detail on that, 
especially since we referred to several things where prime 
contractors and some waste that is there? I don't want a war 
fighter hurt based on us not taking some of these 
recommendations in place.
    Mr. Hale. Two years ago, when we put together the overseas 
contingency operations budget, we underestimated the tempo of 
operations for the Army and the Air Force. We have also seen 
higher costs for transportation to get equipment out of 
Afghanistan, partly because of the ground lines, our inability 
to get full access to the ground lines of communication in 
Pakistan. The combination of those events have left us probably 
$6 billion to $10 billion short in fiscal 2013 of OCO budgets, 
and we are working to find every way we can to cut those back 
at the moment, because it will be a very difficult thing for us 
to handle in this kind of an environment.
    Mr. Lankford. Okay. One thing, if we can follow up on this 
in the days ahead. Dr. Coburn, in the Senate, has identified 
multiple areas where DOD overlaps with other agencies, whether 
that be energy research or a lot of different research 
projects. It tends to be that DOD ends up being the landing 
point for, if you want to do something in research for 
something, you land in DOD because no one can vote against 
defense funding on that.
    Has there been any progress made of identifying some of 
those specific projects to say there is no reason for us to do 
this, this is waste, and be able to get rid of it?
    Mr. Hale. So this is the department of everything report?
    Mr. Lankford. That is correct.
    Mr. Hale. The big dollars that were in there were things, 
and some of them we are doing, cut back on our defense agencies 
and we have made every effort to do that. They have been part 
of our overall reductions that I mentioned in my testimony. We 
have cut back on a number of general officers and senior 
executive service, one thing he recommended. He recommended we 
cut back on tuition assistance and, painful though it is, we 
are in the process of doing it.
    But I would point out that some of the things he 
recommended actually run counter to the laws you passed. He 
urged us to take a large number of military personnel and make 
them into civilians because they are sometimes cheaper. The 
Congress passed a law that said we had to cut proportion.
    Mr. Lankford. I understand.
    Mr. Hale. So we tried to implement his recommendations.
    Mr. Lankford. I understand a large part of his 
recommendations dealt with things like energy, where DOD and 
DOE are both doing energy research. And I understand it helps 
protect our men and women in uniform if we can have more 
efficient vehicles on the fields, having to refuel less. I get 
that. But if research is already being done in some other 
place, we need to be more efficient with that. That is just 
coordination between agencies to get that accomplished.
    With that, I yield back.
    Mr. Jordan. I thank the gentleman.
    The gentleman from Wisconsin, Mr. Pocan, is recognized.
    Mr. Pocan. Thank you, Mr. Chair. I have a question really 
that is more proactive in this area of trying to reduce waste 
and improve efficiency. The question is for Mr. Hale.
    I know that right now the DOD and the VA are trying to do a 
joint venture to do electronic health records, and I give a lot 
of credit to DOD that you did put out an RFI to some private 
contractors to take a look at that, but I think the concern 
that some of us may have is the original proposal was going to 
cost somewhere, I think the range is pretty wide, $4 billion to 
$16 billion over a six year process if we did it internally.
    Yet, I know there are a lot of vendors who do this 
currently who have what you would call, I guess, off-the-shelf 
programs that could work to integrate so that you could have 
this done much, much more quickly and at a fraction of the 
cost, at least initially.
    So, again, I give credit to DOD because I know you have 
done the RFI to the commercial providers to get some more 
information. DVA has not; they plan on, I think, using Vista 
and doing it internally still, at this point.
    I was just wondering what you are looking at as you are 
making this decision whether or not you are going to try to go 
to an off-the-shelf, more immediate and less costly plan, or 
what you are looking at as you balance, I guess, with DVA, if 
they are not going to do something.
    And let me just give you my concern. Back in our 
legislature, we did this with a voter file. We had someone 
create a system from scratch at a cost of $27 million, which, 
on the day the contract ended, we threw out and we had spent 
the $27 million. And our neighboring State of Minnesota did a 
system for about $3 million. So sometimes when you try to 
create something from scratch, especially with a six-year 
timeline, that is like a generation in software difference.
    I just want to know a little more about the thinking, 
because if this is an area we can provide some immediate 
savings now to what is budgeted for and have a system in place 
sooner, I would just like to know a little more how DOD is 
looking at this.
    Mr. Hale. Well, we are committed, our HR, to working with 
VA. It is a high priority program for us and for them. I have 
to tell you I don't think we have figured out how to do it yet. 
I will also tell you we have not budgeted anywhere near the 
sorts of numbers you mentioned. We spent about $300 million of 
DOD money on that project so far, and we want to hold down the 
cost wherever we can, but we also want to make it work. So I 
can't give you a blueprint. I will go back for you and check 
for the record to see if there is any additional information I 
can provide. But I think, frankly, we haven't figured it out.
    Mr. Pocan. Okay. Can I ask is there a concern that you are 
not looking, and not specifically DOD, but the combined forces 
of the two agencies, at doing something that would be a little 
more immediate and a little less costly by doing one of these 
off-the-shelf, and there is a number of companies that do it 
that are out there, versus trying to kind of do this from 
scratch?
    Mr. Hale. There is an internal balance, sometimes we have 
tried off-the-shelf stuff and it just hasn't worked because it 
doesn't need our needs. So we have to balance the two. But I 
hear your point and, again, I think we are looking at all 
options right now and working with the VA, but I want to 
underscore we are committed to this project.
    Mr. Pocan. Well, if you could provide the committee with 
some additional information on that, it would be very helpful. 
And just so you know, I have called and DOD staff have been 
extremely helpful when we have called on this. But I think your 
estimated cost that is coming out of this joint venture is the 
$4 billion to $16 billion, but I think we have had some private 
firms to us in the under $1 billion cost. So it is a big, big 
difference and that is why that and the fact that it could be 
implemented in a fraction of the time a lot of us are just very 
concerned. So any information you can provide the committee 
would be appreciated.
    I yield my time back.
    Mr. Jordan. I thank the gentleman.
    The gentleman from South Carolina is recognized, Mr. Gowdy.
    Mr. Gowdy. Thank you, Mr. Chairman.
    Mr. Borras, what is a Level 1 detainee?
    Mr. Borras. You are referring to in ICE?
    Mr. Gowdy. Yes.
    Mr. Borras. That is something that I would have to get back 
to you on.
    Mr. Gowdy. But you wouldn't disagree if I told you it was 
an aggravated felon. Level 1s are aggravated felons, and 10 of 
them were released due to sequestration. Do you know what it 
costs per day to detain an aggravated felon?
    Mr. Borras. No, I do not.
    Mr. Gowdy. Would you disagree if I told you it was $122 a 
day to detain an aggravated felon?
    Mr. Borras. No. A hundred twenty-two dollars sounds 
approximately right in terms of our cost per detention per bed 
per night.
    Mr. Gowdy. All right, so if it is $122 a day to detain a 
Level 1 aggravated felon, do you know how many Level 1 
aggravated felons were released by ICE as part of their cost 
savings due to sequestration?
    Mr. Borras. I do not.
    Mr. Gowdy. It would be 10 of them. So 10 times 122, even 
for a liberal arts major, is what, about $1,200 a day? Is that 
close?
    Mr. Borras. That sounds good.
    Mr. Gowdy. Is there nothing else in the Department budget 
where you could find $1,200 a day in savings other than to 
release Level 1 offenders?
    Mr. Borras. Well, the issue of whether it is Level 1 or any 
offenders aside----
    Mr. Gowdy. Well, right now it is Level 1 because they are 
aggravated felons. So could you not find $1,200 somewhere else 
in the DHS budget other than releasing Level 1 aggravated 
felons as part of your cost-saving measures?
    Mr. Borras. If I had the discretion to be able to pick and 
choose where in the Department to pull savings, I certainly can 
do that.
    Mr. Gowdy. Now, wait a minute. How much money is DHS 
sitting on? Right now.
    Mr. Borras. Our total budget?
    Mr. Gowdy. No. How much unencumbered money are you sitting 
on right now?
    Mr. Borras. Unobligated money, I don't have that exact 
number.
    Mr. Gowdy. Well, I don't need an exact number. Is it more 
than $1,200?
    Mr. Borras. Yes, sir.
    Mr. Gowdy. Okay. So don't act as if you didn't have any 
choice but to release aggravated felons. You are not suggesting 
that, are you? That the only choice you had was to release 
Level 1 aggravated felons back onto the streets? Is that what 
you are suggesting?
    Mr. Borras. I am not suggesting that in the least.
    Mr. Gowdy. Mr. Edwards, did you find any places where DHS 
might possibly save $1,200 a day?
    Mr. Edwards. We have a number of recommendations.
    Mr. Gowdy. I will just settle for one. Where is one where 
they might possibly have been able to do something other than 
release aggravated felons as part of their cost-saving 
measures?
    Mr. Edwards. Well, on this release part of it, I received a 
letter last week from Senator Coburn and I am looking into it, 
so I can't really comment on that.
    Mr. Gowdy. Well, comment on any area where they might 
possibly have found $1200 a day. Anything? Conferences? Travel? 
Detailees? Vehicles?
    Mr. Edwards. Yes to all of that.
    Mr. Gowdy. Promotional materials? Anything?
    Mr. Edwards. Yes to all of that.
    Mr. Gowdy. Mr. Borras, when was the first time you realized 
the sequestration might be a possibility?
    Mr. Borras. Probably in August of 2011.
    Mr. Gowdy. August of 2011. So that gave you how many months 
to prepare to do something other than to release Level 1 
aggravated felons? How many months between August 2011 and 
March 2013?
    Mr. Borras. Nineteen, 20 months.
    Mr. Gowdy. All right. Would you agree with me that the 
decision to release Level 1 aggravated felons was not the only 
option you had? There were other places you could have cut 
cost. Do you agree or disagree with that?
    Mr. Borras. I don't know enough about that particular 
budget line item to know what other options were available in 
that PPA to make choices to result in that release.
    Mr. Gowdy. Well, I am going to ask you again. Is your 
testimony that the only choice ICE had was to release 
aggravated felons back onto the street? There was nothing else 
they could do as a cost-savings measure? Is that your 
testimony?
    Mr. Borras. No, that is not my testimony.
    Mr. Gowdy. Okay. All right, thanks.
    Chairman Issa. I would ask the gentleman have an additional 
one minute. Would the gentleman yield?
    Mr. Gowdy. Be happy to, Mr. Chairman.
    Chairman Issa. Just following up. I want to make sure we 
get to this. Nothing in sequestration forced you to make that 
decision, is that correct, or your agency?
    Mr. Borras. Not that I am aware of.
    Chairman Issa. There were, as the gentleman was asking, 
there were clearly alternatives that could have been pursued. 
So this was a choice, not a requirement.
    Mr. Borras. I would have to assume that it was done on the 
basis of analysis of that particular budget activity.
    Chairman Issa. Okay, let's do the budget activity.
    Mr. Edwards, quickly, if you, from your experience, if you 
simply didn't apprehend and incarcerate non-Level 1 felons, 
wouldn't you quickly accomplish the same as the release of 
those felons? Looking at the amount of those felons released 
and the amount that come in every day in less than a month, if 
you just didn't take in these other people, wouldn't you reach 
the same number as releasing these felons?
    Mr. Edwards. Looking at your analysis, that makes sense.
    Chairman Issa. Okay. I thank you.
    Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman.
    Mr. Borras, this issue that Mr. Gowdy raised about 
aggravated felons, isn't that really a matter of a line item in 
your budget, not about sequestration? Aren't you limited to 
34,000 and you had 36,000?
    Mr. Borras. We are required to make 34,000 beds available, 
that is correct.
    Mr. Connolly. That is right. And you exceeded that number, 
so you had to do something to bring it down, since Congress is 
the one that mandates this line item in the budget, is that not 
correct?
    Mr. Borras. We do have a mandated requirement.
    Mr. Connolly. That is right. So it has nothing to do with 
sequestration, per se; it has to do with how we appropriate 
your funding, is that correct?
    Mr. Borras. Yes.
    Mr. Connolly. Thank you. Just to clear that up.
    There seems to be a narrative going around, all of a 
sudden, that sequestration is not so bad and that anything that 
is unpopular or anything that might attract attention 
unfavorably can be avoided. We even had a suggestion a little 
earlier in this hearing that maybe the secretary herself should 
leave her office and go and clear passengers at an airport 
somewhere. And I find that intriguing since so many people, 
just last summer, were decrying how dreadful and apocalyptic 
the consequences of sequestration in fact would be.
    Mr. Borras, you are in management. Presumably, you have 
been looking at worst case scenarios with respect to 
sequestration. Your own testimony is you have certainly been 
cognizant of it since August of 2011. So you have gone through 
some scenarios, is that not correct?
    Mr. Borras. That would be correct.
    Mr. Connolly. And is it inevitable that we are going to see 
furloughs in the workforce that falls under your purview?
    Mr. Borras. That is correct, particularly in Customs and 
Border Protection.
    Mr. Connolly. Right. I was going to get into that. So will 
we have furloughs of TSA employees that are unavoidable?
    Mr. Borras. The answer to that question is a little 
complex. As I alluded to earlier, the current Senate CR that is 
being debated, and should it come to pass, will change some of 
the financial parameters of the sequestration as we know it 
today.
    Mr. Connolly. All right. Absent that, because that hasn't 
happened yet, presumably, you have to plan for furloughs in the 
TSA workforce, is that correct?
    Mr. Borras. Well, we have the ability right now to avoid 
furloughs in the TSA workforce.
    Mr. Connolly. Entirely?
    Mr. Borras. Entirely.
    Mr. Connolly. So what we heard earlier about up to 13 days 
of furloughs in the 47,000 workforce were false?
    Mr. Borras. No, I wouldn't characterize it as false. I 
think there have been different iterations of sequestration, 
depending on what time. For example, there was a scenario based 
on the January 1st and the percentage cut that would be 
required to meet that. Then there was another calculation, 
series of calculations based on the March 1st date. The big 
uncertainty is since we don't know what the funding 
availability is for the back half of the year, we are making 
projections, estimates based on limited amount of information.
    Mr. Connolly. And do you expect furloughs in the CBP?
    Mr. Borras. In fact, we have already issued 60,000 furlough 
notices at Customs and Border Protection.
    Mr. Connolly. And why were you so able to do that, but not 
on the TSA?
    Mr. Borras. On the Customs and Border Protection, their 
budget, the way it is structured, the PPAs that contain the 
salaries and expense accounts are predominantly salaries, so 
there is no alternative; you cannot move money around from 
different program activities, so the cut has to come out of the 
salary and expense line item. And we are calculating presently 
about 12 to 14 days of furlough.
    Mr. Connolly. You were asked a little bit earlier by my 
friend and colleague from Texas, Mr. Farenthold, whether there 
had been any major delays or disruptions in security at major 
airports in the United States since sequestration kicked in, 
and you answered not to your knowledge, is that correct?
    Mr. Borras. That is correct.
    Mr. Connolly. When did sequestration kick in, Mr. Borras?
    Mr. Borras. March 1st.
    Mr. Connolly. March what?
    Mr. Borras. March 1st.
    Mr. Connolly. And what is today's date?
    Mr. Borras. Today is still the 19th.
    Mr. Connolly. The 19th. So it has been 18 days. So did we 
expect the consequences of sequestration to kick in within the 
first 19 days?
    Mr. Borras. No. I think the expectation that it would be 
progressive.
    Mr. Connolly. Right. So the fact that we haven't seen major 
disruptions doesn't mean there couldn't be some, and, as a 
matter of fact, we haven't really seen the full kick-in of 
sequestration, just given the nature of the calendar, 19 days. 
We are not talking about the apocalypse here, we are talking 
about a rolling set of spending reductions that cumulatively 
most certainly will have an impact. Would that be accurate?
    Mr. Borras. That is an accurate statement.
    Mr. Connolly. Thank you, Mr. Chairman.
    Chairman Issa. Thank you.
    Pursuant to wanting to make sure that we do get the facts 
correct, on television, Secretary Napolitano said the 
following: several hundred, relating to the perfect storm of 
budgetary problems, the release of ICE-held prisoners, several 
hundred were related to sequester, but it wasn't thousand. 
Oddly enough, between one side saying it was thousand and 
perhaps zero, the secretary has cleared it up, it was several 
hundred.
    With that, we go to the gentleman from Arizona, Mr. Gosar.
    Mr. Gosar. Thank you, Chairman.
    First of all, I would like to thank the inspector general's 
office. It is celebrating their 35th anniversary. It started 
back in 1978 with 12 of the first 73 IGS, so thank you very, 
very much.
    For Ms. Halbrooks and Mr. Edwards, are you privy to the OMB 
documents?
    Ms. Halbrooks. Regarding what, sir?
    Mr. Gosar. Prevailing wage. The discrepancy in prevailing 
wage.
    Ms. Halbrooks. I am not familiar with that issue.
    Mr. Gosar. I find it very interesting that we are talking 
about tens of billions of dollars, and yet they cite 100 
percent failure in prevailing wage accuracy that could save, if 
we had better accuracy on the prevailing wage, tens of billions 
of dollars, probably in both of your departments. Would this be 
something that would be very acutely brought forward?
    Mr. Edwards. We would be glad to look into that.
    Mr. Gosar. I would like to. You know, the current format is 
100 percent, at least with the audit, the responses were 100 
percent failure on those. If we were just to move that to the 
Department of Statistics, we would have much more accuracy and 
even, by their consensus, we would send tens of billions of 
dollars across the board.
    Mr. Borras, is this the first time we have gone through 
sequestration?
    Mr. Borras. Yes.
    Mr. Gosar. Wrong. Wrong answer. In the 1980s we did 
sequestration. Let me ask you another question. Are you aware 
there was two programs or two bills put forward to mitigate 
sequestration in a much better scenario, start the 
conversation? Two bills from the House, how about that? Were 
there two bills from the House?
    Mr. Borras. I believe there were.
    Mr. Gosar. Yes, one in May of 2012 and one in December of 
2012. Let me ask you another question. Is it a one-way street 
in which Congress dictates, cannot the agencies ask to 
mitigate?
    Mr. Borras. Absolutely.
    Mr. Gosar. Where was that? Is there any documents you can 
point to asking Congress for mitigation in each of the 
different agencies, in sequestration?
    Mr. Borras. Oh, not that I am aware of. But you asked me is 
it possible.
    Mr. Gosar. So there is lack of leadership.
    Mr. Borras. Well, I wouldn't characterize it as lack of 
leadership. I think we have been doing, and I have testified--
--
    Mr. Gosar. Well, first of all, let me interrupt you. 
Obviously, you didn't because, in your testimony earlier, you 
said that you thought the sequestration aspects would be 
mitigated out, right, early in your testimony today?
    Mr. Borras. I did say that was the expectation.
    Mr. Gosar. Yes. I mean, that's typical. I am private 
sector. I am a dentist impersonating a politician. So I can see 
where bureaucrats get that kind of connotation. I find it 
offensive to the taxpayer that we would mitigate that. I think 
that what we should have been doing is looking at the 
opportunity for better spending the taxpayer dollars.
    Mr. Edwards, I want to get back to in your testimony you 
mentioned the Department of Homeland Security was not complying 
with the Federal Financial Management Improvement Act of 1996 
or the OMB's requirements under its revised version of 
Financial Management Systems Circular. Can you explain why DHS 
has yet to comply with these laws and directives?
    Mr. Edwards. Yes, sir. Initially, DHS went with the big 
bang concept of having this one huge system, but now, under Mr. 
Borras' leadership and others from the Department, instead of 
having this big bang approach, have each one of the components 
have a reliable financial system and then use business 
intelligence to draw the information out that could be produced 
daily. They are in the process of doing that, but still, even 
though they achieve the auditable qualified opinion, it was 
heavy lift because of the manual processes. But the hope is 
that as the systems, individual systems at the components come 
together and are fully functional, that would meet the 
requirement.
    Mr. Gosar. So it seems to me when Mr. Borras was talking in 
regards to this, some parts within the agency are not 
responding to others or they have a different accountability 
system. Is that true?
    Mr. Edwards. They all have their own individuals systems 
now, and some of them are legacy systems. For instance, CBP has 
a really good system; Coast Guard system is not that good and 
they are working on it; FEMA is working on it as well. So all 
of these systems, once it is fully functional individually, 
could come together with a business.
    Mr. Gosar. Is there some way that we could initiate making 
that speed up that system a little bit, Congress?
    Mr. Edwards. Absolutely.
    Mr. Gosar. And how would that happen?
    Mr. Edwards. You would just, in the appropriations bill, 
put in language saying that this needs to be met.
    Mr. Gosar. Mr. Chairman, I would like from both Ms. 
Halbrooks and from Mr. Edwards re-looking at the calibration of 
accuracy for the prevailing wage and what kind of savings we 
could save in both DOD and Homeland Security. I would 
appreciate that in writing.
    Chairman Issa. I thank the gentleman.
    And if you would agree to give those in follow-up writing, 
that would be helpful.
    Ms. Halbrooks. Yes.
    Chairman Issa. Thank you.
    We now go to the gentlelady from Illinois, Ms. Duckworth.
    Ms. Duckworth. Thank you, Mr. Chairman.
    Ms. Halbrooks, in your testimony you indicated that over 
the past 10 years the DOD IG's office has issued over 1,300 
reports and 7,684 recommendations of deficiencies. Of these, 
you have a very remarkable 95 percent of cases where the cases 
were addressed and closed.
    So I am confused as to why your office would walk away from 
the responsibility of providing oversight for the F-35 
acquisition process, the most expensive weapons system that we 
have ever purchased in our Nation's history, especially the 
concurrent acquisition process, when oversight of the 
acquisition process is one of the things, in your testimony, 
that you say you need to provide oversight for.
    Ms. Halbrooks. Thank you. I don't think that we have walked 
away from oversight of the acquisition process for that system. 
I think that we are confident that there is oversight within 
the Department and from others in Government, and decided to 
focus our resources on a complementary review for that weapon 
system, as well as other weapons systems that weren't getting 
as much scrutiny but also offered potential savings.
    Ms. Duckworth. Potential savings as high as could be gained 
from savings from the F-35 process?
    Ms. Halbrooks. Well, the potential savings would all depend 
on the recommendations and how management would implement them. 
Certainly, some of the lesser systems, if our recommendations 
are that the requirements be scrutinized and they are canceled, 
could potentially also yield large dollar savings.
    Ms. Duckworth. So, now, will you be relying on other people 
to provide oversight of the retrofitting process for F-35s, the 
ones that we have already bought but are not operational and 
taxpayers will still have to fund up to I am hearing figures 
from $1.7 billion to $4 billion to retrofit those aircraft? 
Will you be relying on other people to provide that oversight?
    Ms. Halbrooks. Well, we want to make sure the Department 
has the best information from objective, unbiased sources, so 
we will continue to look at whose best position to provide 
that; and if we need to get involved, we will.
    Ms. Duckworth. Okay.
    Mr. Hale, I happen to agree with you that certainly 
providing our troops with the best equipment and most advanced 
equipment, and moving them way from aging weapons system is 
certainly a priority. I flew the oldest flying Blackhawk in the 
United States Army inventory, a 1978 model delivered in, it was 
the fourth one off the production line. So I understand aging 
weapons systems. But, to date, the F-22 has yet to fly a single 
combat mission and, to date, we yet have a single F-35 that is 
operational. It can't even do vertical takeoffs and landings 
right now, except for in test flights.
    In looking at this deeply flawed process, the concurrent 
acquisition process for the F-35, are you planning, in DOD, to 
continue that type of process in the purchase of future weapons 
systems, such as sixth generation fighters, which we are 
already saying that we need, even before the F-35 is delivered?
    Mr. Hale. There is a balance to be struck here. If you 
eliminated all concurrency, total testing, everything done 
completely, it would take us 25 years, instead of 10, to do it. 
There is a balance to be struck. I am not arguing we have done 
it ideally in the case of the F-35. I think there are lessons 
to be learned and we could do better. But I don't think we want 
to eliminate concurrency if sensible amounts of it speed 
getting these weapons into the hands of our troops, and that is 
important.
    Ms. Duckworth. But these weapons systems that we are 
getting into the hands of our troops can't actually be flown or 
used in combat because of the concurrent process.
    Mr. Hale. Well, we are not going to put it in the hands of 
troops until it can do the things it has to do to both protect 
them and fight effectively, and that is probably why we haven't 
got IOC yet for the F-35. But we are going to make that plane 
work. I have a long history of doing it. It is not always 
pretty, but we will make that plane work.
    Ms. Duckworth. And how far behind schedule from when we 
started the concurrent acquisition process, will the F-35 be 
operational?
    Mr. Hale. That is a good question.
    Ms. Duckworth. It is now what, 10 years behind schedule?
    Mr. Hale. I don't have that in my head, but it would be a 
substantial period.
    Ms. Duckworth. So I say again are you saying that you will 
still pursue the same concurrent acquisition process for future 
weapons systems that you did for the F-35, or will you be doing 
a review to look at how deeply flawed that system is and 
perhaps adjusting it?
    Mr. Hale. We will absolutely try to make it better and 
learn lessons from it. What I said is, in principle, I don't 
think getting rid of all concurrency is in the best interest of 
the taxpayers, because it would spread the programs out so 
long, one, we wouldn't get the weapons we need and, two, there 
would be even more cost growth. There is a balance to be 
struck. Maybe we didn't get it exactly right for the F-35, but 
I wouldn't rule out concurrency in principle.
    Ms. Duckworth. You really did get it right with the F-35. 
In fact, we are talking in the trillions of dollars eventually.
    Ms. Halbrooks, I asked General Brogdon about the security 
of the supply chain and making sure that every piece of 
equipment in our military weapons system, especially the F-35, 
comes from a secure source, so that we don't, for example, have 
Chinese manufactured chips in the avionics system. And he was 
very honest and said that he is looking at it, but that he 
found four items, in fact, that were from unauthorized 
countries. Are we looking at that in other weapons systems as 
well?
    Ms. Halbrooks. I can't, today, think that we have a review 
that encompasses specifically, but as we look at contracting 
and how these systems are being built, and if the contractors 
are complying with the requirements, that should be something 
that we would come across. But I appreciate your focus and I 
will take that.
    Ms. Duckworth. I am sorry, Mr. Chairman, I have gone way 
over.
    Chairman Issa. I am not sorry. Would the gentlelady yield 
for a second?
    Ms. Duckworth. Yes, sir.
    Chairman Issa. Colonel Duckworth, thank you for your 
service, but thank you for the question I think you asked Mr. 
Hale that he answered, which was he intends, apparently, to 
continue being over budget, over time, and describing a program 
that is in fact ``not pretty, but it is going to work.''
    Would you like to revise that and talk in terms of reform 
that would have us not be over budget, over time again, and 
then say but it is not pretty, but we are going to make it 
work?
    Mr. Hale. Mr. Chairman, the question I heard was whether we 
would abandon all concurrency. That is the question to which I 
said no.
    Chairman Issa. If the gentlelady wants to follow up.
    Ms. Duckworth. Thank you, Mr. Chairman. My question was 
will you be pursuing the exact same process for the F-35 for 
future combat systems, especially the Next Generation 6 
fighters that you are proposing now.
    Mr. Hale. I mean, the answer is no. We will do better and 
we will look to reform it. But I don't want to throw out all 
concurrency. I don't think that is wise. I guess I 
misunderstood you. I am sorry.
    Ms. Duckworth. May I ask one more question?
    Chairman Issa. Of course.
    Ms. Duckworth. Not a problem. And then will you be advising 
your inspector general to provide greater oversight or will 
you, again, in future systems, rely on other agencies to 
provide that oversight?
    Mr. Hale. We would welcome oversight from the inspector 
general.
    Chairman Issa. Thank you.
    Now we go to the gentleman from Ohio, Mr. Jordan.
    Mr. Jordan. Thank you, Mr. Chairman.
    Mr. Borras, during Mr. Connolly's question, he talked about 
sequestration taking effect March 1st, and in the past 19 days 
he asked you we haven't seen any major disruptions. I believe 
your answer was yes to that question, is that correct?
    Mr. Borras. Yes.
    Mr. Jordan. Okay. And then putting aside what Mr. Gowdy 
brought up, the fact that we released 10 Level 1 aggravated 
felons, your answer to we haven't seen many major disruptions 
was yes. Yet, on March 4th we have the statement by Secretary 
Napolitano. She said, as a result of sequestration, airports 
were seeing lines 150 to 200 percent as long as they would 
normally expect. So which is it? Three days after the 
sequestration the Secretary of Department of Homeland Security 
is saying we have lines 200 percent of normal and you are 
saying we haven't seen any major disruptions. Which one is 
true?
    Mr. Borras. Well, I don't know the specific statement that 
was made by the Secretary.
    Mr. Jordan. I just read it to you: ``150 to 200 percent as 
long as we would normally expect.'' You just told Mr. Connolly 
we haven't seen any major disruptions. You have your boss 
saying we have. Who is telling the truth?
    Mr. Borras. Well, again, I don't know what the statement 
is. If you are saying the statement said that we are currently 
seeing, at all airports, or that is the projection.
    Mr. Jordan. She said airports were seeing 150 to 200 
percent lines as long as we would normally expect. Was she 
wrong or were you wrong in what you gave your answer to Mr. 
Connolly? Or is 200 percent of the line, is that not a 
disruption? It is a yes or no. One of you has to be right; one 
of you has to be wrong.
    Mr. Borras. Well, I am not aware of that.
    Mr. Jordan. Well, according to the reporter, she is wrong, 
so maybe what you said is maybe the case, maybe we haven't seen 
major disruptions.
    In your answer to the chairman in the first round of 
questions, he was talking about attrition and ways you could 
have planned for this, and you said this, ``We thought 
sequestration wouldn't happen.'' Now, does the United States 
Department of Homeland Security make a habit of not preparing 
for the law of the land when it comes to its management 
practices? As Mr. Gowdy pointed out, as the chairman pointed 
out, you had 20 months to get ready of this.
    But because you had this assumption it wasn't going to 
happen, you didn't prepare. I mean, you told the chairman we 
didn't expect it to happen. So when did you finally start, 
March the 2nd? When did you finally prepare for something you 
had 19 months lead time on?
    Mr. Borras. I would say we began to plan preliminarily for 
sequestration in the fall.
    Mr. Jordan. So which is it, you thought it wasn't going to 
happen, but you did start to plan. Where are you at?
    Mr. Borras. Exactly, that is where I am at. Certainly, in 
August of 2011 there was the hope that we would not face 
sequestration. In the fall, clearly, as January 1st was 
approaching, we continued to look at the possibility of 
sequestration.
    Mr. Jordan. So you waited a year.
    Mr. Borras. No, we did not wait a year.
    Mr. Jordan. Well, you said past August 2011. You said in 
the fall, as January 1st started to approach, you started to 
get ready. So you waited a year. Maybe if you hadn't waited a 
year, maybe you wouldn't have 50 job postings today on your Web 
site offering jobs. Maybe you wouldn't have to be saying we are 
going to have to furlough people.
    Have you responded to the chairman's letter where he asked 
your Department were there ways we could be helpful maintaining 
the reduction in spending in sequestration, but ways we, as 
Congress, could be helpful in helping you implement this? Have 
you responded to that letter?
    Mr. Borras. I am not aware of a letter that was written to 
me.
    Mr. Jordan. No, it was written to the Department. You are 
here representing the Department, correct? Yes, it was written 
to the Department. Have you responded? Has the Department 
responded?
    Mr. Borras. I believe that letter is in clearance.
    Mr. Jordan. What does that mean?
    Mr. Borras. It is being completed and should be responded 
to the chairman by the end of the week.
    Mr. Jordan. Again, it seems to me if you had 20 months to 
prepare for this, the chairman asked you how we can help you 
better implement it, you should have something ready to email 
right away, some response ready to go; here is our plan of 
action, Mr. Chairman, here is what we can do. We would 
appreciate your help giving us some flexibility in these 
particular areas of our budget.
    Finally, last area I want to get to, Mr. Chairman, last 40 
seconds here. Ms. Speier and I have been working on this issue 
of conferences that agencies have attended and the amount of 
taxpayer dollars used at these various conferences. Do you know 
how many conferences the Department of Homeland Security has 
attended in 2012?
    Mr. Borras. I don't have that number off the top of my 
head.
    Mr. Jordan. Do you know how much money you have spent on 
conferences, overnight conferences, where employees from your 
Department go? Do you know how many dollars you have spent on 
those kind of things?
    Mr. Borras. I don't have that number off the top of my 
head.
    Mr. Jordan. Mr. Edwards, do you happen to know those 
numbers?
    Mr. Borras. No, sir, but we did a report in 2009, we had 12 
recommendations, and we are currently doing an audit on 
conference spending.
    Mr. Jordan. Do you know, Mr. Edwards, of any of the 
conferences that employees from Homeland Security have 
attended, if any of them exceeded the amounts, the level per 
attendee that was spent at the GSA conference, the now famous 
GSA conference in Vegas? Do you know?
    Mr. Edwards. No, sir.
    Mr. Jordan. Okay. Well, we would like for you to get that 
information, if you could.
    Mr. Edwards. Yes.
    Mr. Jordan. Mr. Chairman, I yield back.
    Chairman Issa. Thank you.
    We are going to wrap up. I going to do just a couple of 
questions.
    First of all, Secretary Hale, we have been a little tough 
on you, but I want to thank you. DOD is the only cabinet 
position that has responded with any specificity or any answer 
to our letters as to areas in which, legislatively or 
appropriations, we could provide you changes. So I appreciate 
that.
    I want to touch on one thing, and I think, General 
Halbrooks, you have been sort of almost beat up for not going 
after the F-35, and I could pile on on that, because I do think 
that it is such a large amount of dollars that special 
attention, at least over the shoulder of those doing oversight, 
is appropriate. But I want to touch base on something that I 
think should be a DOD imperative.
    Ms. Duckworth, you said you flew the oldest Blackhawk, 
entering service in 1978. I don't know how to tell you this, 
but I was on UH-1s. There were just Charlies and they were 
first generation. You were not born when those went into 
production.
    Ms. Duckworth. [Remarks made off microphone.]
    Chairman Issa. You did fly Hs. Well, they were hotels. They 
called them hotels because they were big.
    But when the other end of acquisition, which is repair part 
and disposal, it has been a mess at DOD at all parts of it 
since before most people in this audience were born. We buy 
things, they get shipped in. At Fort Riley, Kansas, if I 
remember correctly, there is still an anchor there because 
somebody ordered a ship's anchor by mistake, and once it was 
railed in, they didn't know what else to do with it, so they 
put it there.
    The disposal of equipment and the reuse has never been 
centralized. Now, if I were to go online today and I were to 
say I needed a part for a 1989 X, Chrysler 300, whatever it 
was, I can go to a single Web site and virtually every salvage 
yard in America feeds into that, and I can find out where the 
parts are, where the car is that contains that part.
    The world has modernized so that you do not have an excess 
part simply get sold off at a small auction and not put back 
into the system. And, more importantly, auctions continue to 
occur at every little base and compound, rather than a central 
selling system where people all over the world can bid up the 
price of the excesses of the Department of Defense.
    Now, it is not just the Department of Defense, but I would 
like you to really look at it because, in my two decades in the 
active and then reserves, the gentlelady's 21 years now, this 
hasn't gotten fixed. But the world has fixed this problem to a 
scale in which almost anything is sold globally, is auctioned 
globally; and we continue to have local auctions where people 
show up and they get deals.
    I know it is a small part of it, but I have been waiting 
for an opportunity to say isn't this the kind of thing that, in 
addition to a billion dollar failed acquisition program out of 
Dayton, that we could also learn to sell our excesses and reuse 
our excesses better? Isn't that an item that IGS have been 
talking about and organizational people have been talking about 
since you first knew there was a Department of Defense?
    Mr. Hale. I thought there was, and I am going to express my 
ignorance and take a risk here, Mr. Chairman, the Defense 
Resource Management Utilization Service or Reutilization 
Service. But let me go back and find more from our logistics 
experts, because I hear you, eBay and other things like it 
should certainly allow us those opportunities. I think we were 
using some of them.
    Chairman Issa. And I agree with you, there have been 
efforts to try to do it, but I can tell you today it doesn't 
work.
    General Halbrooks, I assume you have looked at the 
perfectly good product going out to sale while the same exact 
product is being reacquired in a very near location.
    Ms. Halbrooks. Certainly, that is consistent with the work 
that we have done on our spare parts reports that we have 
talked about today. But, more broadly than that, I appreciate 
your input and the committee members' input into areas for 
future work. As we start to look forward to doing our fiscal 
year 2014 audit planning, they will certainly be areas we take 
into consideration.
    Chairman Issa. Thank you.
    Mr. Cummings, do you have anything?
    Mr. Cummings. Thank you very much.
    There has been quite a bit of effort made here today, Mr. 
Borras and Mr. Hale, talking about how you should have been 
prepared better for sequestration, and I want to be fair to 
you, and I don't know if you know this, but I need you to let 
me know if you know this.
    According to what we did, according to what the Congress of 
the United States did, did you know that, according to Section 
116(b) of the Continuing Appropriations Resolution of 2013, 
Congress required Federal agencies to submit their plans to 
implement sequestration cuts to the Congressional 
Appropriations Committee 30 days after the President issues a 
sequestration order? And President Obama issued his 
sequestration order on March the 1st, 2013, so in order to 
implement the $85 billion and across-the-board spending cuts 
for fiscal year 2013, and, as a result, agencies are required 
to submit their sequestration plans to Congress, we have 
ordered you to do this now, you understand that, by April 1st, 
2013. Were you aware of that, Mr. Hale?
    Mr. Hale. Absolutely. We call it a spin plan. Now, we are 
going to have a real problem because you are about to change 
the whole framework for us, I hope, in passing an 
appropriations legislation or a new continuing resolution is 
going to change the whole way we do sequestration. So I don't 
know if we will make it, but we are well aware of it.
    Mr. Cummings. Are you working on that plan?
    Mr. Hale. Yes.
    Mr. Cummings. I got that. I am just asking, first of all, 
are you working on it pursuant to law that we passed.
    Mr. Hale. Yes.
    Mr. Cummings. Okay. Number two, you are also telling me 
that because of the continuing resolution, that a monkey wrench 
may be thrown into that. Is that what you are saying?
    Mr. Hale. Yes.
    Mr. Cummings. And can you explain that to me?
    Mr. Hale. The sequestration law requires that we base the 
cuts on program project and activity. It was defined by this 
continuing resolution you passed last September. It will now 
change and be applied, for at least the Department of Defense, 
based on what will essentially be an appropriations bill in 
this new continuing resolution. So all the numbers, all the 
base from which you take the cuts are going to change, and we 
will need to go back and make sure we still have the right 
plans.
    Mr. Cummings. Now, is your interpretation of a law that we 
passed, the one I just referenced, in other words, you still 
have a deadline of April 1st, as you interpret the law?
    Mr. Hale. Yes.
    Mr. Cummings. So you all are going to be working hard, I 
take it, once you figure out what we, as a Congress, what we 
are going to do.
    Mr. Hale. We will do our best.
    Mr. Cummings. Do you think you will be able to make that 
April 1st deadline?
    Mr. Hale. Probably not.
    Mr. Cummings. Okay.
    Mr. Hale. Not with meaningful information. I mean, we can 
give you old stuff, but that is not going to help you or us.
    Mr. Cummings. Yes, I understand. It is getting kind of 
late.
    Mr. Borras, were you aware of that?
    Mr. Borras. Yes.
    Mr. Cummings. So are you all preparing to submit your plan 
by April 1st, as required by Congress?
    Mr. Borras. We are working on our plan to meet the 30-day 
requirement as per law, and as Under Secretary Hale mentioned, 
we too will have adjustments that will be made to that plan 
based on the continuing resolution that gets passed for the 
balance of the year.
    Mr. Cummings. Were you aware of that, Ms. Halbrooks? Were 
you aware of that?
    Ms. Halbrooks. Yes. Yes.
    Mr. Cummings. Okay. And you?
    So this really does cause some problems for you, doesn't 
it, Mr. Borras?
    Mr. Borras. It will require some adjustment. I provided one 
example earlier in TSA, the FAMS program, which the impact 
would be about an additional $60 billion reduction; Secret 
Service, about $100 million reduction based on the estimates of 
what we know the bill to be today.
    Mr. Cummings. Well, you know, it is interesting that we 
here in Congress, and I have talked to a number of Congress 
people, we too had to make some changes. I know I have just 
told my employees they are taking two days of furlough, and 
people say sequestration does not have impact. That is real. 
That is a real deal. Some of these people making $40,000, 
$45,000; they are losing two days a month. That is real.
    As a matter of fact, they have already started taking 
furlough days. So we are just going to have to work through 
this and hopefully it will not be as painful as it appears that 
it will be for some people.
    Thank you.
    Chairman Issa. Would the gentleman yield?
    Mr. Cummings. Of course.
    Chairman Issa. I think the ranking member brings up an 
important point, that the CR that we passed out of the House 
that has major changes primarily for Department of Defense does 
create a situation in which a bill not yet passed, but to take 
effect for sure, one way or the other, by April 1st does change 
what particularly Department of Defense is going to report, and 
I do think that is the best reason for this committee to make 
every effort to try to find things that, no matter what the 
effects of future bills, agencies would want to either adjust 
or reduce or eliminate and work together on; and I thank the 
gentleman for pointing that out.
    Mr. Cummings. Thank you.
    Chairman Issa. Mr. Jordan, I understand you have another 
question?
    Mr. Jordan. Just real quick, Mr. Chairman. I didn't get 
this in in my five minutes.
    Back to Ms. Napolitano's statement on March 4th, 2013, she 
said that major airports were seeing lines 150 to 200 percent 
as long as we would normally expect. Did the Department survey 
airports around the Country between November 1st and November 
4th to get that information that Ms. Napolitano then based her 
statement upon?
    Mr. Borras. I don't have an answer to that question. I am 
not involved in the operations of either the airports or the 
borders and wouldn't be cognizant at this time of what 
information was presented to the secretary relative to those 
operational matters out in the field.
    Mr. Jordan. The fact is the reporter at that newspaper who 
reported this said they in fact called O'Hare Airport, Los 
Angeles International Airport, and Atlanta's airport and the 
spokesperson for those respective airports said there were no 
major delays.
    So I just want to know where she got the information. What 
information did she base that statement on? And it would seem 
to me the only information you could base that statement on is 
if you called up the airports and said are you in fact 
experiencing delays, and are they 150 to 200 percent longer 
lines than you normally have at this point in the year.
    You don't know if that was done?
    Mr. Borras. I don't have that information. I would be happy 
to provide you the basis for that statement.
    Mr. Jordan. I appreciate that and I hope you do get that to 
us, but it would seem to me, when you come in front of the 
committee, knowing that this is going to be about 
sequestration, knowing that this statement was made three days 
after sequestration took effect, it seems to me you would know 
what information the Secretary of the Department of Homeland 
Security based that statement on. And yet you come here and you 
just say I don't know.
    So, with that, Mr. Chairman, I would yield back.
    Chairman Issa. Thank you.
    Ms. Duckworth, do you have any questions?
    Mr. Cummings?
    Mr. Cummings. Just one question.
    Mr. Hale and Mr. Borras, do you think that April 1st 
deadline should be extended?
    Mr. Hale. Well, Mr. Cummings, it is in the law. We will do 
our best to meet it. I just am concerned about meeting it well 
at this point, but we will get something as quickly as we can. 
I think we can work with you and with the committees.
    Mr. Cummings. Mr. Borras?
    Mr. Borras. We will respond to the law. If there are any 
changes between now and April 1st, we will adjust accordingly, 
but right now we are planning to respond on April 1st.
    Mr. Cummings. All right, thank you.
    Chairman Issa. I am going to follow up on that briefly.
    Mr. Hale, isn't it true that the appropriations bills 
passed out of the House substantially reflects requests that 
you had for changes? In other words, the negotiation that went 
on that led to DOD in the CR actually having, effectively, a 
new appropriation? Isn't that, at least for our guidance, when 
I am talking to my colleagues and Mr. Cummings is talking to 
his, that, really, you have given us most of what you are going 
to say on April 1st, which is we would like to have what was in 
the House's CR negotiated? I realize there is always an 
anomaly, but a lot of it is reflected there?
    Mr. Hale. Yes and no. The yes part is--the no part is that 
they want us to look at each program, there are 2500 of them in 
the Department of Defense, and say what the specific cuts are 
against that level. That isn't in the bill and we will have to 
do that for you, and we need to do that too. I mean, we need a 
spin plan to execute this, although I still hope that you end 
it in some fashion. But if it doesn't get ended, then we have 
to make it work, and we will.
    Chairman Issa. Thank you.
    I want to thank all of you for your testimony today. We 
will leave, as I believe was said earlier, five days for all to 
revise and extend, and for opening remarks of members. And, 
again, thank you.
    We stand adjourned.
    [Whereupon, at 12:30 p.m., the committee was adjourned.]


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