[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


 
           ACQUISITION OVERSIGHT: HOW EFFECTIVELY IS 
              DHS SAFEGUARDING TAXPAYER DOLLARS?

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                             OVERSIGHT AND
                         MANAGEMENT EFFICIENCY

                                 OF THE

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 22, 2015

                               __________

                           Serial No. 114-15

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

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

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                     COMMITTEE ON HOMELAND SECURITY

                   Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Peter T. King, New York              Loretta Sanchez, California
Mike Rogers, Alabama                 Sheila Jackson Lee, Texas
Candice S. Miller, Michigan, Vice    James R. Langevin, Rhode Island
    Chair                            Brian Higgins, New York
Jeff Duncan, South Carolina          Cedric L. Richmond, Louisiana
Tom Marino, Pennsylvania             William R. Keating, Massachusetts
Patrick Meehan, Pennsylvania         Donald M. Payne, Jr., New Jersey
Lou Barletta, Pennsylvania           Filemon Vela, Texas
Scott Perry, Pennsylvania            Bonnie Watson Coleman, New Jersey
Curt Clawson, Florida                Kathleen M. Rice, New York
John Katko, New York                 Norma J. Torres, California
Will Hurd, Texas
Earl L. ``Buddy'' Carter, Georgia
Mark Walker, North Carolina
Barry Loudermilk, Georgia
Martha McSally, Arizona
John Ratcliffe, Texas
                   Brendan P. Shields, Staff Director
                    Joan V. O'Hara,  General Counsel
                    Michael S. Twinchek, Chief Clerk
                I. Lanier Avant, Minority Staff Director
                                 ------                                

          SUBCOMMITTEE ON OVERSIGHT AND MANAGEMENT EFFICIENCY

                  Scott Perry, Pennsylvania, Chairman
Jeff Duncan, South Carolina          Bonnie Watson Coleman, New Jersey
Curt Clawson, Florida                Cedric L. Richmond, Louisiana
Earl L. ``Buddy'' Carter, Georgia    Norma J. Torres, California
Barry Loudermilk, Georgia            Bennie G. Thompson, Mississippi 
Michael T. McCaul, Texas (ex             (ex officio)
    officio)
               Ryan Consaul, Subcommittee Staff Director
                    Dennis Terry, Subcommittee Clerk
             Vacancy, Minority Subcommittee Staff Director
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Scott Perry, a Representative in Congress From the 
  State of Pennsylvania, and Chairman, Subcommittee on Oversight 
  and Management Efficiency:
  Oral Statement.................................................     1
  Prepared Statement.............................................     3
The Honorable Bonnie Watson Coleman, a Representative in Congress 
  From the State of New Jersey, and Ranking Member, Subcommittee 
  on Oversight and Management Efficiency:
  Oral Statement.................................................     3
  Prepared Statement.............................................     5
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security:
  Prepared Statement.............................................     6

                               Witnesses

Ms. Michele Mackin, Director, Acquisition and Sourcing 
  Management, U.S. Government Accountability Office:
  Oral Statement.................................................     7
  Prepared Statement.............................................     9
Mr. Chip Fulghum, Acting Deputy Under Secretary for Management 
  and Chief Financial Officer, U.S. Department of Homeland 
  Security:
  Oral Statement.................................................    16
  Prepared Statement.............................................    18
Mr. Cedric J. Sims, Partner, Evermay Consulting Group:
  Oral Statement.................................................    23
  Prepared Statement.............................................    25

                                Appendix

Question From Ranking Member Bennie G. Thompson for Michele 
  Mackin.........................................................    43
Questions From Honorable Cedric Richmond for Michele Mackin......    43
Questions From Honorable Norma Torres for Michele Mackin.........    44
Questions From Chairman Scott Perry for Chip Fulghum.............    44
Questions From Ranking Member Bennie G. Thompson for Chip Fulghum    45
Questions From Honorable Cedric Richmond for Chip Fulghum........    45
Questions From Honorable Cedric Richmond for Cedric J. Sims......    45
Question From Honorable Bonnie Watson Coleman for Cedric J. Sims.    45
Questions From Honorable Norma J. Torres for Cedric J. Sims......    46

  ACQUISITION OVERSIGHT: HOW EFFECTIVELY IS DHS SAFEGUARDING TAXPAYER 
                                DOLLARS?

                              ----------                              


                       Wednesday, April 22, 2015

             U.S. House of Representatives,
                     Subcommittee on Oversight and 
                             Management Efficiency,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:44 p.m., in 
Room 311, Cannon House Office Building, Hon. Scott Perry 
[Chairman of the subcommittee] presiding.
    Present: Representatives Perry, Duncan, Clawson, Carter, 
Watson Coleman, and Torres.
    Mr. Perry. Good afternoon, everybody. The Committee on 
Homeland Security, Subcommittee on Oversight and Management 
Efficiency will come to order.
    The purpose of this hearing is to determine if the 
Department of Homeland Security, the DHS, is managing its major 
acquisition programs effectively.
    The Chairman now recognizes himself for an opening 
statement.
    The Department of Homeland Security, the DHS, spends 
billions of taxpayer dollars each year on a variety of programs 
intended to better secure the homeland, including systems to 
secure the border, screen travelers, protect cyber 
infrastructure, and respond to disasters, among other missions.
    DHS' current major acquisition program ultimately may cost 
taxpayers over $200 billion. Needless to say, strong 
accountability and oversight is absolutely necessary to guard 
against waste, fraud, and abuse.
    Since its creation, DHS has had its share of acquisition 
failures. Customs and Border Protection's Secure Border 
Initiative network, SBInet, and the Coast Guard's Deepwater 
Program remain models of how not to manage an acquisition 
program. SBInet alone cost taxpayers over $1 billion, with few 
results from that investment.
    Since 2005, watchdogs at the Government Accountability 
Office have had DHS' acquisition management on its high-risk 
list. Despite steps taken by DHS to issue an acquisition policy 
that reflects program management practices and create an office 
focused on acquisition oversight, programs continue to put 
taxpayer dollars at risk.
    Most importantly, acquisition mismanagement also puts our 
security at risk. Men and women on the front line securing our 
borders, protecting our airports, and defending our shores will 
need to wait longer for systems that may not fully meet their 
operational needs. This is just simply unacceptable.
    Several examples in a GAO report released today highlight 
systems being delivered later than promised: CBP's integrated 
fixed towers, over 6 years late; Coast Guard's long-range 
surveillance aircraft, 9 years late; and its National Security 
Cutter, 4 years late.
    In addition, of seven programs that GAO reviewed, cost 
estimates increased by 40 percent over what DHS originally 
approved. As a result, DHS expects to spend almost $10 billion 
more than they originally estimated on these programs.
    GAO also found that DHS authorized programs to deploy 
capabilities without operational testing, including three 
programs managed by CBP and the Coast Guard. Having served as a 
combat aviator in Iraq, I am incredulous that DHS expects its 
personnel to use equipment that hasn't been field-tested, not 
to mention the fact that I am sure we paid for testing. In 
other instances, testing may have been done after key decisions 
were made.
    The bottom line is testing isn't about checking the box. It 
is about ensuring that tools we give to front-line operators 
actually work.
    DHS must, simply must, do better oversight of its 
acquisition programs. A GAO report issued last month showed 
that DHS has an ad hoc approach for some of its oversight 
efforts because of a lack of written roles and 
responsibilities. DHS also has done a poor job over the years 
of holding programs accountable to its acquisition policy. As 
DHS Inspector General John Roth noted in our first hearing this 
Congress, ``There aren't really any consequences for that 
disobedience.''
    Exactly 1 year ago today, Secretary Johnson announced his 
Unity of Effort initiative to improve the execution of DHS 
missions. Although DHS has created several new mechanisms to 
discuss key decisions, it remains to be seen if these efforts 
are leading to improved outcomes and better safeguarding of 
taxpayer dollars.
    Improving acquisition outcomes at DHS remains a priority 
for this committee. Last Congress, the House passed the first-
ever bill that comprehensively reforms the DHS acquisition 
process. The bill empowered senior DHS officials to hold 
programs accountable, establish strong accountability for 
programs with significant cost and schedule growth, and 
required an effective strategy to inform DHS major purchases. 
This legislation was praised by numerous stakeholders, 
including the comptroller general, DHS inspector general, 
Secretary Johnson, and industry groups.
    As the committee re-engages acquisition legislation this 
Congress, this hearing will provide areas on which to focus. I 
certainly look forward to examining DHS' acquisition programs 
and processes to better understand what must be done to fix 
long-standing problems. Until these problems are resolved, we 
can't be certain that billions that DHS spends will result in 
better acquisition outcomes for the taxpayer and front-line 
operators.
    [The statement of Chairman Perry follows:]
                   Statement of Chairman Scott Perry
                             April 22, 2015
    The Department of Homeland Security (DHS) spends billions of 
taxpayer dollars each year on a variety of programs intended to better 
secure the homeland, including systems to secure the border, screen 
travelers, protect cyber infrastructure, and respond to disasters, 
among other missions. DHS's current major acquisition programs 
ultimately may cost taxpayers over $200 billion. Needless to say, 
strong accountability and oversight is needed to guard against waste, 
fraud, and abuse.
    Since its creation, DHS has had its share of acquisition failures. 
Customs and Border Protection's (CBP) Secure Border Initiative Network 
(SBInet) and the Coast Guard's Deepwater program remain models of how 
not to manage an acquisition program. SBInet alone cost taxpayers over 
$1 billion with few results from that investment. Since 2005, watchdogs 
at the Government Accountability Office (GAO) have had DHS's 
acquisition management on its ``High-Risk List.'' Despite steps taken 
by DHS to issue an acquisition policy that reflects program management 
practices and create an office focused on acquisition oversight, 
programs continue to put taxpayer dollars at risk.
    Most importantly, acquisition mismanagement also puts our security 
at risk. Men and women on the front lines securing our borders, 
protecting our airports, and defending our shores will need to wait 
longer for systems that may not fully meet their operational needs; 
this is unacceptable. Several examples in a GAO report released today 
highlight systems being delivered later than promised: CBP's Integrated 
Fixed Towers, over 6 years late; Coast Guard's Long Range Surveillance 
Aircraft, 9 years late; and its National Security Cutter, 4 years late. 
In addition, of seven programs that GAO reviewed, cost estimates 
increased by 40 percent over what DHS originally approved. As a result, 
DHS expects to spend almost $10 billion more than they originally 
estimated on these programs.
    GAO also found that DHS authorized programs to deploy capabilities 
without operational testing, including three programs managed by CBP 
and the Coast Guard. Having served as a combat aviator in Iraq, I'm 
incredulous that DHS expects its personnel to use equipment that hasn't 
been field tested. In other instances, testing may have been done after 
key decisions were made. Bottom line, testing isn't about checking the 
box, it's about ensuring that the tools we give to front-line operators 
actually work.
    DHS must do better oversight of its acquisition programs. A GAO 
report issued last month showed that DHS has an ad-hoc approach for 
some of its oversight efforts because of a lack of written roles and 
responsibilities. DHS also has done a poor job over the years of 
holding programs accountable to its acquisition policy. As DHS 
Inspector General John Roth noted in our first hearing this Congress, 
``[there aren't] really any consequences for that disobedience.'' 
Exactly 1 year ago today, Secretary Johnson announced his Unity of 
Effort initiative to improve the execution of DHS missions. Although 
DHS has created several new mechanisms to discuss key decisions, it 
remains to be seen if these efforts are leading to improved outcomes 
and better safeguarding of taxpayer dollars.
    Improving acquisition outcomes at DHS remains a priority for this 
committee. Last Congress, the House passed the first-ever bill that 
comprehensively reforms the DHS acquisition process. The bill empowered 
senior DHS officials to hold programs accountable, established strong 
accountability for programs with significant cost and schedule growth, 
and required an effective strategy to inform DHS major purchases. This 
legislation was praised by numerous stakeholders, including the 
comptroller general, DHS inspector general, Secretary Johnson, and 
industry groups. As the committee re-engages acquisition legislation 
this Congress, this hearing will provide areas on which to focus. I 
look forward to examining DHS's acquisition programs and processes to 
better understand what must be done to fix long-standing problems. 
Until these problems are fixed, we can't be certain that the billions 
DHS spends will result in better acquisition outcomes for the taxpayer 
and front-line operators.

    Mr. Perry. The Chairman will now recognize the Ranking 
Minority Member of the subcommittee, the gentlelady from New 
Jersey, Mrs. Watson Coleman, for any statement she may have.
    Mrs. Watson Coleman. Thank you very much, Mr. Chairman, and 
thank you for holding this important hearing.
    This is a very important discussion to improve the 
efficiency of some of the Department of Homeland Security's 
most essential operations.
    In adopting the Acquisition Management Directive and by 
creating the Office of Program Accountability and Risk 
Management, the Department has taken constructive steps towards 
utilizing the information derived from the acquisitions 
program's own work to assess the program's readiness to move 
through the successive stages of investment and capability 
development.
    At the same time, both of the recent GAO studies we will 
discuss today have identified deficiencies in the compilation, 
approval, and currency of acquisition program baselines at 
DHS--a concern which dates back to the first edition of GAO's 
DHS ``Quick Look,'' published in June 2010.
    GAO's analysis related to last month's report on DHS 
acquisition oversight found that, in the DHS master acquisition 
oversight list from this fiscal year, 25 of 72 Level 1 or Level 
2 acquisitions listed have received waivers from DHS reporting 
requirements. In other words, 35 percent of the programs on the 
list with life-cycle costs initially estimated at $300 million 
or more have received waivers from requirements to update a 
range of acquisition-related information, including cost 
estimates.
    To exercise our oversight responsibility, Members of the 
subcommittee must understand the circumstances in which the 
waivers for requirements the acquisition programs report on, 
previously acknowledged as indicators of their progress. The 
subcommittee has asked the Department to provide a May 2013 
memorandum from the under secretary for management granting 
these waivers, and it is concerning that we have just received 
that memo, making it very difficult to thoroughly and 
appropriately assess DHS guidance on the issue.
    Furthermore, GAO's recent assessment of 22 of the 
Department's costliest acquisition programs now underway finds 
that 6 of these programs have not received approval of their 
acquisition program baselines from DHS leadership, though 
Department policy requires such. GAO additionally finds that, 
despite the lack of fully approved baselines, these six 
programs have spent a total of $5 billion as of GAO's review. 
Of the 16 programs in the sample that GAO could assess against 
the APBs, 2 met cost and schedule baselines as of the review.
    Major system acquisitions at the Department of Homeland 
Security spend billions of dollars each year and provide our 
country's front-line operators with the capabilities they need 
to achieve their critical missions. When a DHS acquisition 
program falls short in terms of effectiveness or efficiency, it 
crowds out investment in other high-priority missions.
    I am aware that Chairman McCaul intends to introduce a bill 
to reform DHS acquisition, similar to legislation that was 
passed by the House in last Congress. Members on this side look 
forward to working with you to help to develop and improve the 
bill in this subcommittee.
    I would like to focus on making sure this new legislation 
reflects the strong preference on the part of Congress for DHS 
leaders and program managers to collect and use knowledge 
developed by program offices. This information reduces the risk 
incurred and enhances the value DHS receives when the 
Department makes major acquisition investments.
    In addition, I believe that DHS acquisition reform 
legislation should require that the Department show good cause 
to an acquisition decision authority in any case when DHS 
departs from best practices and knowledge-based acquisition 
management.
    I would like to thank the panel of witnesses for appearing 
before the subcommittee today. I look forward to hearing their 
perspectives on this proposal.
    I am very interested in hearing from the Department of 
Homeland Security. I am sure you will use this hearing as an 
opportunity to outline for the committee how the Secretary's 
Unity of Effort initiative will reverse the Department's 
troubling effort.
    I thank you very much for this opportunity, and I yield 
back my time.
    [The statement of Ranking Member Watson Coleman follows:]
           Statement of Ranking Member Bonnie Watson Coleman
                             April 22, 2015
    This is a very important discussion to improve the efficiency of 
some of the Department of Homeland Security's most essential 
operations.
    In adopting the Acquisition Management Directive, and by creating 
the Office of Program Accountability and Risk Management, the 
Department of Homeland Security has taken constructive steps toward 
utilizing the information derived from acquisition programs' own work 
to assess the programs' readiness to move through successive stages of 
investment and capability development.
    At the same time, both of the recent GAO studies we'll discuss 
today have identified deficiencies in the compilation, approval, and 
currency of acquisition program baselines at DHS, a concern which dates 
back to the first edition of GAO's DHS Quick Look, published in June 
2010.
    GAO's analysis related to last month's report on DHS Acquisition 
Oversight found that in the DHS Master Acquisition Oversight List from 
this fiscal year, 25 of 72 Level 1 or Level 2 acquisitions listed have 
received waivers from DHS reporting requirements
    In other words, 35 percent of the programs on the list with life-
cycle costs initially estimated at $300 million or more have received 
waivers from requirements to update a range of acquisition-related 
information, including their cost estimates.
    To exercise our oversight responsibilities, Members of the 
subcommittee must understand the circumstances in which the Department 
waives requirements that acquisition programs report on previously-
acknowledged indicators of their progress.
    The subcommittee has asked the Department to provide a May 2013 
memorandum from the under secretary for management granting these 
waivers--and it is concerning that the Department provided the memo to 
the committee minutes before the start of the hearing, making it 
difficult to thoroughly and appropriately assess DHS guidance on this 
issue.
    Furthermore, GAO's recent assessment of 22 of the Department's 
costliest acquisition programs now underway finds that six of these 
programs have not received approval of their Acquisition Program 
Baselines (APBs) from DHS leadership, though Department policy requires 
such approval.
    GAO additionally finds that despite the lack of fully-approved 
baselines, these six programs have spent a total of $5 billion as of 
GAO's review. Of the 16 programs in the sample that GAO could assess 
against APBs, two met cost and schedule baselines as of GAO's review.
    Major system acquisitions at the Department of Homeland Security 
spend billions of dollars each year, and provide our country's front-
line operators with the capabilities they need to achieve their 
critical missions.
    When a DHS acquisition program falls short in terms of 
effectiveness or efficiency, it crowds-out investment in other high-
priority missions.
    I am aware that Chairman McCaul intends to introduce a bill to 
reform DHS acquisition, similar to legislation that passed the House 
last Congress. Members on this side look forward to working with you to 
develop and improve the bill in this subcommittee.
    I'd like to focus on making sure this new legislation reflects a 
strong preference on the part of Congress for DHS leaders and program 
managers to collect and use knowledge developed by program offices. 
This information reduces the risk incurred and enhances the value DHS 
receives when the Department makes major acquisition investments.
    In addition, I believe that DHS acquisition reform legislation 
should require that the Department show good cause to an Acquisition 
Decision Authority in any case when DHS departs from best practices in 
knowledge-based acquisition management.
    I would like to thank the panel of witnesses for appearing before 
the subcommittee today, and I look forward to hearing their 
perspectives on these proposals.
    I am very interested in hearing from the Department of Homeland 
Security's acting chief acquisition officer, Mr. Fulghum, who I hope 
will use this hearing as an opportunity to outline for the subcommittee 
how Secretary Johnson's Unity of Effort initiatives will reverse the 
Department's troubling record of acquisition management challenges, 
several of which I've outlined.
    Additionally, I am eager to hear from GAO's Ms. Mackin, whose 
experience in leading assessments of DHS acquisition activities will 
enable her to focus on critical open recommendations to DHS, and offer 
her perspective on how the Department could best prioritize and 
implement open recommendations from GAO reviews.
    I also look forward to hearing from Dr. Sims, whose combination of 
experiences at the DHS component level in the Secret Service, at the 
headquarters level as executive director of the Office of Program 
Accountability and Risk Management, and in the private sector advising 
DHS contractors will help this subcommittee as we look for ways to 
tackle significant management concerns for DHS.
    These concerns strain the DHS budget and threaten the Department's 
operational effectiveness.

    Mr. Perry. The Chairman thanks the Ranking Member.
    Other Members of the subcommittee are reminded that opening 
statements may be submitted for the record.
    [The statement of Ranking Member Thompson follows:]
             Statement of Ranking Member Bennie G. Thompson
                             April 22, 2015
    I thank Acting Under Secretary Fulgum for serving as under 
secretary for management, and I wish him well as he goes from wearing 
multiple hats at DHS to hopefully just one. I am pleased that last 
Thursday, the Senate confirmed Russell Deyo as DHS under secretary for 
management--a position whose duties include service as the Department's 
chief acquisition officer.
    Last April, Secretary Johnson issued a ``Unity of Effort'' 
memorandum to the Department's senior leaders, expressing his 
commitment to better linking DHS ``strategic objectives, budgeting, 
acquisition decisions, operational planning, and mission execution.''
    Agency management performance--including DHS acquisition 
management--affects the Department's long-term financial 
sustainability, DHS operators, and the American people's security. 
Recently, the Government Accountability Office assessed DHS acquisition 
management. GAO's assessment presents troubling evidence that even 
though DHS has taken steps to improve performance, execution and 
management of the Department's major acquisitions offer little evidence 
of incorporating widely-acknowledged best practices.
    In fiscal year 2014, DHS spent $10.7 billion--a bit more than one-
sixth of its total budget authority--on acquisition of systems with 
life-cycle costs estimated at $300 million or more. These acquisitions 
cost real money. We must ensure that each dollar is spent wisely, can 
be accounted for, and advances the homeland security mission. The 
Department's front-line operators depend on systems like Coast Guard 
ships and helicopters to work when they go into harm's way.
    The safety of the American people often depends on the Department's 
ability to buy enough reliable technology--like baggage-screening 
systems--that provides DHS with capabilities they need to accomplish 
their critical missions. Assessing the progress of a major acquisition 
program toward specific objectives by reviewing that program's 
performance against its budget and schedule seems as much common sense 
as a key insight from management science: But GAO has identified 
deficiencies in the development and use of program baselines to manage 
major DHS acquisitions. As Ranking Member Watson Coleman noted, GAO 
could not even assess nearly a quarter of the major DHS acquisitions 
selected for their sample, because there has never been a successful 
completion of all of the reviews required by the Department's own 
acquisition policies.
    What is concerning is that in the absence of required procedures to 
check the feasibility of these programs, GAO reports that six DHS 
acquisitions have spent $5 billion to date. This raises several red 
flags for me because I am too familiar with the Department's history of 
throwing money at programs that have been unsuccessful. This is a cycle 
that cannot continue.
    I want to hear witnesses' best ideas about how Congress can 
strengthen and deepen acquisition reforms pursued to date by DHS 
management, so that major acquisitions will produce significantly 
better results in terms of affordability and effectiveness. At the same 
time, I would appreciate hearing from witnesses how DHS leaders can 
better engage the innovation, efficiency, and competitiveness 
exemplified every day in small and minority businesses.

    Mr. Perry. We are pleased to have a distinguished panel of 
witnesses before us today on this important topic.
    Let me remind the witnesses that their entire written 
statement will appear in the record. I will introduce each of 
you first and then recognize you each for your testimony.
    Ms. Michele Mackin--did I get that correct?
    Ms. Mackin. Yes.
    Mr. Perry [continuing]. Is a director at the U.S. 
Government Accountability Office in the Acquisition and 
Sourcing Management team. Ms. Mackin joined the GAO in 1988 as 
an evaluator in the National Security and International Affairs 
Division. Ms. Mackin has led complex reviews of Federal 
contracting issues, including high-risk contract types, the 
Coast Guard's Deepwater recapitalization project, and Navy 
shipbuilding programs.
    The Honorable Chip Fulghum is the acting deputy under 
secretary for management, acting chief acquisition officer, as 
well as the chief financial officer for the Department of 
Homeland Security. Mr. Fulghum joined DHS in October 2012 as 
its budget director. Prior to joining the Department, Mr. 
Fulghum served for 28 years in the United States Air Force, 
retiring with the rank of colonel. He is also a graduate of The 
Citadel, the Military College of South Carolina.
    Thank you for your service, sir.
    Dr. Cedric Sims is a partner with the Evermay Consulting 
Group. From 2010 until 2012, he served as the director of DHS' 
Office of Program Accountability and Risk Management. Dr. Sims 
also held other positions in the Department, including the 
executive director of the Enterprise Management Business 
Office. Dr. Sims holds a doctorate in engineering from Texas 
A&M University.
    Thank you.
    Thank you all for being here today.
    The Chairman now recognizes Ms. Mackin for her testimony.

STATEMENT OF MICHELE MACKIN, DIRECTOR, ACQUISITION AND SOURCING 
       MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Mackin. Thank you, Mr. Chairman. Good afternoon, 
Ranking Member Watson Coleman and Members of the subcommittee.
    Thank you for having me here today to discuss DHS 
acquisitions, an issue we have reported on for quite some time. 
My statement today is based on two of our recent reports. One, 
as was mentioned, was issued just last month, and the other is 
being released today.
    DHS buys a wide range of systems and technologies to meet 
its many missions. In fact, the Department spends about $11 
billion per year on its largest acquisitions, those estimated 
to cost $300 million or more.
    I will briefly touch on three issues today: First, how 
these large programs are performing in terms of cost and 
schedule; second, the status of testing; and, third, the 
quality of information available to Congress and DHS on these 
large programs.
    To assess cost and schedule, we selected 22 major 
acquisition programs. These included Customs and Border 
Protection systems, TSA screening technologies, and Coast Guard 
ships and aircraft, among others.
    We found, as was mentioned, that six of these 22 programs 
did not have Department-approved acquisition baselines. These 
baselines are critical because they establish agreed-upon cost, 
schedule, and performance targets. Without having approved 
baselines, accountability is obscured, and neither we, 
Congress, nor DHS can know if the programs are performing as 
intended. This is an issue we have highlighted in our past 
work, as well.
    Of the remaining 16 programs in our review, we found that 
14 had experienced schedule delays, and some also had increases 
to their cost estimates. In fact, on average, these programs 
had a 3\1/2\-year schedule delay and, in total, a $9.7 billion 
increase in expected costs.
    While each program has its own story, in general, we 
identified the following reasons for this: Challenges in 
meeting requirements, for example, due to technical 
difficulties; funding shortfalls, where there is a gap, 
sometimes quite significant, between what a program expects to 
receive and what it actually receives in a given year; a 
decision to pursue different or new capabilities after the 
program has begun; and, for some programs, the initial cost or 
schedule estimates simply weren't sound in the first place and 
had to be revised.
    In terms of the testing, 19 of the 22 programs we reviewed 
had delivered some capabilities to end-users such as border 
agents or airports screeners. Fifteen of these programs had 
been operationally tested, and six had passed the tests. For 
many of those that did not past the test, DHS' Office of Test 
and Evaluation has recommended follow-on testing.
    Also, in our review of 30 DHS test assessments, we found 
that about a third did not clearly indicate whether all key 
performance capabilities had been demonstrated. We recommended, 
and DHS agreed, to reflect this in future test assessments.
    Finally, regarding the quality of information, good data of 
course is critical to sound decision making about acquisition 
programs; however, we found problems with DHS' own system for 
reporting acquisition information. Program managers are 
supposed to enter certain information into this system, and 
senior acquisition officials at the components are responsible 
for validating it. But we found inaccuracies in cost estimates 
and blank data fields for some important information, such as 
expenditure amounts or key program milestones.
    These issues call into question whether DHS management has 
the information it needs for effective acquisition oversight. 
Because this data feeds into DHS' reports to Congress, that 
means Congress is not getting accurate and complete 
information. DHS agreed with our recommendation to determine 
how to hold programs and components accountable for entering 
and validating the data in the system.
    That completes my statement. Thank you very much. I will be 
happy to answer questions at the appropriate time.
    [The prepared statement of Ms. Mackin follows:]
                  Prepared Statement of Michele Mackin
                             April 22, 2015
    Chairman Perry, Ranking Member Watson Coleman, and Members of the 
subcommittee: Thank you for the opportunity to discuss acquisition 
management at the Department of Homeland Security (DHS). Each year, DHS 
invests billions of dollars in its major acquisition programs to help 
execute its many critical missions. In fiscal year 2014 alone, DHS 
planned to spend almost $11 billion on these acquisition programs, and 
the Department expects it will ultimately invest more than $200 billion 
in them. DHS and its underlying components are acquiring systems to 
help secure the border, increase marine safety, screen travelers, 
enhance cybersecurity, improve disaster response, and execute a wide 
variety of other operations. Each of DHS's major acquisition programs 
generally costs $300 million or more and can span many years. We have 
reported that DHS's acquisition policy is generally sound, in that it 
reflects key program management practices. Due to shortfalls in 
executing the policy, however, we have highlighted DHS acquisition 
management issues on our high-risk list and made numerous 
recommendations to improve acquisition management practices.\1\ In 
recent years, DHS has taken steps to improve acquisition management by 
dedicating additional resources to oversight and documenting major 
acquisition decisions in a more transparent and consistent manner. 
However, many of our recommendations have not yet been implemented, 
including that DHS ensure all major acquisition programs fully comply 
with DHS acquisition policy.
---------------------------------------------------------------------------
    \1\ GAO, High-Risk Series: An Update, GAO-05-207 (Washington, DC: 
January 2005); Homeland Security Acquisitions: DHS Could Better Manage 
Its Portfolio to Address Funding Gaps and Improve Communications with 
Congress, GAO-14-332 (Washington, DC: Apr. 17, 2014). Also see, for 
example, Homeland Security: DHS Requires More Disciplined Investment 
Management to Help Meet Mission Needs, GAO-12-833 (Washington, DC: 
Sept. 18, 2012).
---------------------------------------------------------------------------
    My statement today draws from two recently completed reviews and 
addresses: (1) The health of 22 DHS major acquisition programs and (2) 
the underlying systems in place to oversee and manage such programs.\2\ 
For the first review, issued in April 2015, we assessed all 14 of DHS's 
largest acquisition programs (with a life-cycle cost estimate of $1 
billion or more) that were in the process of obtaining new capabilities 
as of June 2014. To provide additional insight into factors that can 
contribute to poor acquisition outcomes, we also included 8 other major 
acquisition programs that we or DHS had identified as at risk of not 
meeting their schedules, cost estimates, or capability requirements. 
For all 22 programs, we reviewed acquisition documents required by DHS 
policy, including test plans, and interviewed program managers and 
headquarters acquisition management and test and evaluation officials. 
We verified the cost and schedule data reported for these programs on 
the basis of a data collection instrument and interviews with agency 
officials, and we determined these data elements were sufficiently 
reliable for our purposes. For the second review, issued in March 2015, 
we assessed DHS policies and procedures and interviewed oversight and 
acquisition officials from all nine DHS components that had at least 
one of the Department's largest acquisition programs. From these 
components, we selected a non-generalizable sample of nine major 
programs for a more in-depth analysis of oversight activities and 
reported program data. We also assessed the data reliability of Next 
Generation Periodic Reporting System (nPRS) and determined that the 
data were not sufficiently reliable for our purposes; therefore we used 
these data only for illustrative purposes. More detailed information on 
our scope and methodology can be found in the respective reports.
---------------------------------------------------------------------------
    \2\ GAO, Homeland Security Acquisitions: Major Program Assessments 
Reveal Actions Needed to Improve Accountability, GAO-15-171SP 
(Washington, DC: Apr. 22, 2015) and Homeland Security Acquisitions: DHS 
Should Better Define Oversight Roles and Improve Program Reporting to 
Congress, GAO-15-292 (Washington, DC: Mar. 12, 2015).
---------------------------------------------------------------------------
    We conducted the work on which this statement is based in 
accordance with generally accepted Government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives.
                               background
    DHS policies and processes for managing its major acquisition 
programs are primarily set forth in Acquisition Management Directive 
(MD) 102-01 and DHS Instruction Manual 102-01-001, Acquisition 
Management Instruction/Guidebook. DHS's under secretary for management 
(USM) is the Department's chief acquisition officer and, as such, is 
responsible for managing the implementation of the Department's 
acquisition policies.
    DHS's deputy secretary and USM generally serve as the decision 
authorities for the Department's largest acquisition programs: Those 
with life-cycle cost estimates of $1 billion or greater. Component 
Acquisition Executives--the most senior acquisition management 
officials within each of DHS's component agencies--may be delegated 
decision authority for major acquisition programs with cost estimates 
between $300 million and $1 billion. The decision authority is 
responsible for reviewing acquisition programs at a series of five 
predetermined acquisition decision events to assess whether the program 
is ready to proceed. See figure 1 for DHS acquisition life cycle and 
acquisition decision events. 


    An important aspect of a decision event is the decision authority's 
review and approval of key acquisition documents, including the program 
baseline. This baseline is important because it represents the 
agreement between the program manager, component head, and acquisition 
decision authority as to how systems will perform, when they will be 
delivered, and what they will cost. The acquisition decision authority 
is supported by DHS's Acquisition Review Board, which reviews major 
acquisition programs for proper management, oversight, accountability, 
and alignment with the Department's strategic functions at acquisition 
decision events and other meetings as needed. This board is chaired by 
the acquisition decision authority and consists of individuals who 
manage DHS's mission objectives, resources, and contracts.
    The Office of Program Accountability and Risk Management (PARM) is 
the lead body responsible for overseeing the acquisition process and 
assessing the status of acquisition programs, although other DHS 
offices also have oversight roles. Nearly all of DHS's program 
management offices are located within 13 Department organizations, 
including components such as the Transportation Security Administration 
(TSA), U.S. Coast Guard, and U.S. Customs and Border Protection (CBP). 
Within the components, program management offices are responsible for 
planning and executing DHS's individual programs. They are expected to 
do so within the cost, schedule, and performance parameters established 
in their program baselines. If they cannot do so, the programs' 
decision authority is to rebaseline the program--that is, establish new 
cost, schedule, or performance goals.
    The Director of Operational Test and Evaluation (DOT&E) is 
responsible for approving major acquisition programs' operational test 
agents, operational test plans, and Test and Evaluation Master Plans. 
As appropriate, DOT&E is also responsible for participating in 
operational test readiness reviews, observing operational tests, 
reviewing operational test agents' reports, and assessing the reports. 
DOT&E also provides a letter of assessment that includes an appraisal 
of the program's operational test, a concurrence or non-concurrence 
with the outcome, and any further independent analysis.
programs are experiencing mixed outcomes, though dhs is taking steps to 
                      address enduring challenges
    In April 2015, we found that of the 22 major programs that we 
reviewed, two were on track to meet initial schedule and cost 
parameters, that is, the initial schedules and cost estimates DHS 
leadership approved after the Department revised its acquisition policy 
in November 2008.\3\ Fourteen programs had experienced schedule slips, 
or schedule slips and cost growth. These programs' life-cycle cost 
estimates increased by $9.7 billion, or 18 percent.\4\ I would like to 
highlight a key point: That we were unable to assess schedule and cost 
progress for 6 of the 22 programs because DHS leadership had not yet 
approved baselines establishing their schedules and cost estimates. We 
recommended in 2012 that DHS ensure all major programs fully comply 
with DHS acquisition policy by obtaining Department-level approval for 
key acquisition documents before approving their movement through the 
acquisition life cycle.\5\ DHS agreed with this recommendation but 
acknowledges that it will take some time to fully implement.
---------------------------------------------------------------------------
    \3\ See GAO-15-171SP. DHS issued an updated version of MD 102-01 in 
January 2010 and subsequently updated the guidebook and appendixes.
    \4\ We tracked how each program's schedule and cost has changed 
over time by comparing the schedule and cost estimate from the 
program's initial baseline, approved by DHS after the Department's 
current acquisition policy went into effect in November 2008, to the 
program's expected schedule and cost estimate as of January 2015, based 
on an update provided by each program.
    \5\ GAO-12-833.
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    Part of the reason for the schedule slips and cost growth, as we 
have reported in the past, is program staffing, funding, and 
requirements issues. We previously reported, in 2012, that these issues 
were prevalent Department-wide and we have found this to still be the 
case.
Programs Are Experiencing Mixed Outcomes
    CBP's Automated Commercial Environment program and TSA's Electronic 
Baggage Screening Program were on track to meet their schedules and 
cost estimates established after November 2008. Fourteen other programs 
experienced schedule slips, including 7 that also experienced cost 
growth. Six programs did not have Department-approved baselines. Table 
1 summarizes our findings.

               TABLE 1.--MAJOR ACQUISITION PROGRAMS' PROGRESS AGAINST SCHEDULES AND COST ESTIMATES
----------------------------------------------------------------------------------------------------------------
                                                                  On Track                                No
                                                                   Against    Schedule      Cost     Department-
              Component                         Program            Initial      Slips      Growth      approved
                                                                  Baselines                            Baseline
----------------------------------------------------------------------------------------------------------------
Analysis and Operations..............  Homeland Security         ..........          X   ..........  ...........
                                        Information Network*.
Customs and Border Protection........  Automated Commercial              X   ..........  ..........  ...........
                                        Environment.
                                       Integrated Fixed Towers*  ..........          X   ..........  ...........
                                       Land Border Integration.  ..........  ..........  ..........           X
                                       Non-Intrusive Inspection  ..........  ..........  ..........           X
                                        Systems.
                                       Strategic Air and Marine  ..........  ..........  ..........           X
                                        Program*.
                                       Tactical Communications   ..........  ..........  ..........           X
                                        Modernization*.
                                       TECS (not an acronym)     ..........          X           X   ...........
                                        Modernization*.
Federal Emergency Management Agency..  Logistics Supply Chain    ..........  ..........  ..........           X
                                        Management System*.
Immigration and Customs Enforcement..  TECS (not an acronym)     ..........          X   ..........  ...........
                                        Modernization*.
National Protection and Programs       National Cybersecurity    ..........          X           X   ...........
 Directorate.                           Protection System.
                                       Next Generation Network-- ..........          X           X   ...........
                                        Priority Service.
Transportation Security                Electronic Baggage                X   ..........  ..........  ...........
 Administration.                        Screening Program.
                                       Passenger Screening       ..........          X   ..........  ...........
                                        Program.
U.S. Coast Guard.....................  C4ISR**.................  ..........          X   ..........  ...........
                                       Fast Response Cutter*...  ..........          X   ..........  ...........
                                       HH-65 Conversion/         ..........          X   ..........  ...........
                                        Sustainment Projects.
                                       Long Range Surveillance   ..........          X           X   ...........
                                        Aircraft.
                                       Medium Range              ..........  ..........  ..........           X
                                        Surveillance Aircraft.
                                       National Security Cutter  ..........          X           X   ...........
                                       Offshore Patrol Cutter..  ..........          X   ..........  ...........
U.S. Citizenship and Immigration       Transformation..........  ..........          X           X   ...........
 Services.
----------------------------------------------------------------------------------------------------------------
Source.--GAO analysis of DHS documentation and data. GAO-15-541T
* At risk program that we reviewed to provide insight into some factors that can lead to poor acquisition
  outcomes.
** C4ISR is an acronym for Command, Control, Communications, Computers, Intelligence, Surveillance, and
  Reconnaissance.

    Fourteen programs have at least one major milestone that slipped 
since DHS revised its acquisition policy in November 2008. On average, 
these program milestones slipped more than 3\1/2\ years. Seven 
programs' costs have grown beyond the thresholds initially approved by 
DHS leadership. In total, the 7 programs' acquisition cost estimates 
have increased by 40 percent, and their overall life-cycle cost 
estimates have increased by almost 18 percent, or $9.7 billion as 
mentioned above.
    As noted above, we reported in April 2015 that six programs lack 
DHS-approved baselines, even though these baselines are required by DHS 
policy. This situation prevented us from assessing whether the programs 
were on track to meet their cost estimates and schedules:
   Four of the programs are sponsored by CBP: Land Border 
        Integration, Non-Intrusive Inspection Systems, Strategic Air 
        and Marine Program, and Tactical Communications Modernization. 
        These 4 programs received more than $5 billion in 
        appropriations through fiscal year 2014.
   A fifth program, the Federal Emergency Management Agency's 
        (FEMA) Logistics Supply Chain Management System, also lacks a 
        Department-approved baseline. In April 2014, based on the 
        preliminary results of a DHS Office of Inspector General report 
        that identified this deficiency, the acting USM directed FEMA 
        not to initiate the development of any new capabilities for 
        this program until further notice.
   Finally, as a relatively new program, the Coast Guard's 
        Medium Range Surveillance Aircraft program has not yet had its 
        baseline approved. This program was established in October 2014 
        when DHS leadership directed the Coast Guard to restructure the 
        HC-144A Maritime Patrol Aircraft program to accommodate the 
        addition of 14 C-27J aircraft.
    PARM officials said it is realistic to expect DHS leadership can 
approve baselines for five of the six programs by the end of fiscal 
year 2015 (the exception being the FEMA Logistics Supply Chain 
Management System).
DHS Is Taking Steps to Address Enduring Challenges
    DHS acquisition programs continue to face staffing shortfalls, 
funding instability, and requirements changes that we previously 
identified were prevalent Department-wide. These challenges increase 
the likelihood that acquisition programs will cost more and take longer 
to deliver capabilities than expected. DHS leadership is aware of these 
problems and has taken some steps to address them, but it will likely 
take years to fully resolve them.
            Workforce shortfalls
    As part of an effort to evaluate whether its acquisition programs 
have sufficient numbers of trained, qualified, and experienced 
acquisition staff, DHS headquarters reported that 21 of the 22 programs 
we reviewed faced shortfalls in their program office workforce in 
fiscal year 2014. These shortfalls can pertain to such positions as 
program managers, systems engineers, and logisticians. However, 
officials from 15 of the 21 programs did not identify negative effects 
from these shortfalls, suggesting that officials at DHS headquarters 
and program offices have different views on staffing needs. The 
executive director of PARM acknowledged that standardized staffing 
templates used in the evaluation do not always account for the varying 
quality of people, or particular aspects of specific programs, and said 
that PARM officials developed the templates to help prioritize future 
staffing assessments. This is an issue the Department will continue to 
pursue.
            Funding gaps
    For the 22 programs in our review, we compared their estimated 
funding needs for fiscal years 2014 to 2018 to the expected amounts set 
forth in the Future Years Homeland Security Program report DHS 
submitted to Congress in fiscal year 2014. We found that 11 of the 22 
programs face funding gaps of 10 percent or greater over this period, 
including 5 programs that face funding gaps of 30 percent or greater. 
These funding gaps can be caused by cost growth, unreliable cost 
estimates, requirements changes, revised funding priorities, and other 
factors.
    We previously found that DHS's chief financial officer had 
identified a 30 percent funding gap, from fiscal years 2014 to 2018, 
across the Department's entire major acquisition portfolio.\6\ While 
this acknowledgment was a positive step toward addressing the 
Department's funding gap, funding gaps of this extent are likely to 
impede effective program execution. For example, officials from 6 of 
the 22 programs in our review attributed schedule slips to past funding 
gaps. In response to one of our earlier recommendations on this topic, 
as of June 2014, the Acquisition Review Board is now to specifically 
address affordability issues during all program reviews, and as 
necessary, document explicit tradeoffs among cost, schedule, and 
capability requirements. This is an important step toward closing the 
Department's acquisition funding gap.
---------------------------------------------------------------------------
    \6\ GAO-14-332.
---------------------------------------------------------------------------
Requirements changes
    Finally, we found that requirements changes were common across the 
22 acquisition programs in our review. These are situations where 
programs have revised their requirements after they initiated efforts 
to obtain new capabilities. We have previously concluded that relaxing 
requirements can help mitigate affordability and schedule risks.\7\ 
These changes, however, can also indicate that a program is facing 
execution challenges or expanding its scope beyond what was initially 
envisioned. We found that programs changed requirements for various 
reasons, such as to respond to technology development challenges or to 
address evolving threats. In some cases, program requirements were not 
defined properly in the first place.
---------------------------------------------------------------------------
    \7\ GAO-12-833.
---------------------------------------------------------------------------
dhs has taken steps to improve oversight of major acquisition programs, 
       but lacks key information necessary to manage its programs
    As we reported in March 2015, DHS leadership has undertaken efforts 
that are intended to improve its oversight of major acquisitions.\8\ 
I'll highlight two of these. First, in September 2014, a USM policy 
memorandum clarified the responsibilities of the Component Acquisition 
Executives within the component organizations. These senior officials 
play an important role in acquisition oversight because they are 
responsible for establishing acquisition processes and overseeing the 
execution of programs in their components. The memo sets forth 
oversight responsibilities for these officials--particularly for the 
programs for which they are the acquisition decision authority--and 
clarifies the acquisition oversight chain of command within the 
Department. Now, for example, it has been made clear that for purposes 
of acquisition oversight for specific acquisition decisions, program 
managers report to their Component Acquisition Executives and these 
executives report to the USM. This clarification is useful, as we had 
found differences in these officials' roles and responsibilities prior 
to the memo's issuance. DHS's longer-term goal is to standardize the 
Component Acquisition Executives' acquisition authorities and 
experience levels.
---------------------------------------------------------------------------
    \8\ GAO-15-292.
---------------------------------------------------------------------------
    A second example concerns the roles and responsibilities of PARM, 
which as mentioned above has responsibility for overseeing the 
acquisition process and assessing the status of acquisition programs. 
We found that the roles and responsibilities of PARM staff--who carry 
out day-to-day oversight of, and support to, major acquisition 
programs--were not defined in DHS acquisition policy. Thus, we 
recommended that PARM develop written guidance that defines roles and 
responsibilities of these staff. DHS agreed with the recommendation and 
has already taken action to address it.
    The actions cited above are positive. However, good information is 
critical to sound decision making about acquisition programs. 
Unfortunately, we have found problems in this regard. I've already 
mentioned that 6 of the 22 major programs we recently assessed did not 
have Department-approved acquisition baselines. There are three other 
areas related to incomplete or inaccurate information that I would also 
like to discuss.
Assessments of Operational Testing
    DHS's DOT&E is responsible for numerous aspects of operational 
testing, including an appraisal of programs' operational test events, 
known as a letter of assessment. In our April 2015 report, we found 
ambiguity across DOT&E's letters of assessment in that they did not 
always clearly identify whether the systems tested met all of their key 
performance parameters--capability or system attributes that are 
required to successfully meet the DHS mission. DHS testing policy 
establishes that the primary purpose of test and evaluation is to 
provide timely, accurate information to managers, decision makers, and 
other stakeholders to reduce programmatic, financial, schedule, and 
performance risk. To this end, DOT&E generally identified whether the 
programs' systems were operationally effective and suitable. However, 
without a specific discussion of whether systems met all of their key 
performance parameters in each letter of assessment, DHS leadership may 
not have all of the information needed to make deployment authorization 
decisions. Thus, we recommended, and DHS agreed, to ensure DOT&E 
explicitly address all of the relevant key performance parameters in 
each letter of assessment appraising operational test results.
    In addition, while 19 of the 22 programs we reviewed had deployed 
capabilities, meaning that some capabilities had been delivered to 
operators, DHS leadership had exempted 4 of these programs from 
operational testing for various reasons. Under DHS's test policy, which 
was established in 2009, programs generally should be operationally 
tested before deploying capabilities. The risks and benefits associated 
with deploying capability without operational testing vary on a 
program-by-program basis. For example, DOT&E determined that CBP's Non-
Intrusive Inspection Systems program does adequate acceptance testing 
on commercial-off-the-shelf systems, and that it does not need a test 
plan or operational testing until CBP begins to pursue the next 
generation of capabilities. In another case, DOT&E acknowledged that 
the Coast Guard's HC-130J long-range surveillance aircraft was 
previously demonstrated by the U.S. Air Force and determined that it 
did not need additional operational testing.
Comprehensive Acquisition Status Report to Congress
    In recent years, DHS has been required to submit an annual report 
to Congress addressing a variety of issues pertaining to major 
acquisition programs. PARM is responsible for preparing this 
Comprehensive Acquisition Status Report, or CASR. The most recent 
report, for fiscal year 2014, included 82 major programs and drew 
information from a data system called nPRS, which is DHS's official 
system of record for acquisition program reporting. But we found that 
nPRS, and hence the CASR, contained inaccurate and out-of-date data. 
For example, we found persistent discrepancies between the CASR and 
nPRS for life-cycle cost estimates for some programs even after efforts 
to update or fix the data inaccuracies through an extensive 
adjudication process. Some programs had reported no expenditures for 
the entire fiscal year. Others did not clearly reflect the cost, 
schedule, and technical risks that are supposed to be included in the 
CASR. Although DHS programs are responsible for entering accurate data 
into nPRS, this was not happening consistently. Further, the Component 
Acquisition Executives are responsible for validating the information, 
but this was not occurring consistently either. See figure 2 for our 
assessment of the CASR development process. 


    PARM officials have acknowledged on-going problems with the data 
reported in both nPRS and the CASR, and noted that they are working to 
improve the data quality. We recommended in March 2015, and DHS agreed, 
to determine mechanisms to hold programs accountable for entering data 
in nPRS consistently and accurately and to hold Component Acquisition 
Executives accountable for validating the information.
Oversight of operations and maintenance costs for programs in 
        sustainment
    DHS does not have a structure in place for overseeing the costs of 
42 programs whose acquisition documentation requirements were waived by 
the USM in May 2013.\9\ This waiver covered certain programs in 
sustainment--programs that have been developed and delivered to the 
end-users and are now being operated and maintained. The USM determined 
that it would be cost-prohibitive and inefficient to recreate 
documentation for previous acquisition phases.
---------------------------------------------------------------------------
    \9\ Office of Management and Budget guidance calls for agencies to 
perform annual assessments of the operations and maintenance 
performance of IT investments to ensure these investments continue to 
meet mission needs. We previously assessed DHS's efforts in this area. 
See GAO, Information Technology: Agencies Need to Strengthen Oversight 
of Billions of Dollars in Operations and Maintenance Investments, GAO-
13-87 (Washington, DC: Oct. 16, 2012).
---------------------------------------------------------------------------
    However, an important point is that only 1 of these 42 programs had 
an approved life-cycle cost estimate, which would have delineated 
expected acquisition costs as well as the costs to operate and maintain 
the system. Operations and maintenance costs could run in the billions 
of dollars for these 42 programs, as they can account for more than 80 
percent of program life-cycle costs. We recommended in March 2015, and 
DHS agreed, to produce operations and maintenance cost estimates for 
programs in sustainment and establish responsibility for tracking 
sustainment programs' adherence to those estimates.
    In conclusion, DHS has acknowledged the significant challenges 
facing its portfolio of acquisition programs--such as the $9.7 billion 
increase in life-cycle cost estimates across just seven of its 
programs--and taken steps to improve program information and designate 
oversight responsibilities. However, our analysis shows that DHS's 
oversight and management of its programs remain a work in progress. 
Further efforts, particularly ensuring DHS programs fully comply with 
acquisition policy, would put DHS in a better position to make 
important decisions about its acquisition priorities.
    Chairman Perry, Ranking Member Watson Coleman, and Members of the 
subcommittee, this completes my prepared statement. I would be pleased 
to respond to any questions that you may have at this time.

    Mr. Perry. Thank you, Ms. Mackin.
    The Chairman now recognizes Mr. Fulghum for his testimony.

 STATEMENT OF CHIP FULGHUM, ACTING DEPUTY UNDER SECRETARY FOR 
  MANAGEMENT AND CHIEF FINANCIAL OFFICER, U.S. DEPARTMENT OF 
                       HOMELAND SECURITY

    Mr. Fulghum. Chairman Perry, Ranking Member Watson Coleman, 
and other distinguished Members of the subcommittee, thank you 
for the opportunity to appear today and to discuss acquisition 
management at DHS.
    First of all, let me express my appreciation to my 
colleagues from the GAO for their long-standing and dedicated 
work to support the transformation of acquisition management at 
DHS. Over the past several years, we have forged an excellent 
working relationship with GAO and reached common ground on many 
issues.
    I am gratified by the recent comments that recognize the 
substantial progress the Department has made to address its 
high-risk areas, especially those that fall within acquisition 
management. We are committed to sustaining this progress and 
ensuring program managers effectively execute our acquisition 
programs.
    As the acting deputy under secretary for management and 
acting chief acquisition officer, I am the one responsible for 
overseeing policies, processes, procedures used to acquire and 
oversee goods and services for the Department.
    The momentum gained from the Secretary's Unity of Effort 
initiative has accelerated the work undertaken by previous 
under secretaries for management as well as directors of 
acquisition review to build a stronger management framework 
much earlier in the investment cycle.
    It has been exactly 1 year today since Secretary Johnson 
formally launched the Unity of Effort initiative to better 
integrate the Department's people, organizational structures, 
and operational capability, while emphasizing the need to 
improve acquisition management. Later today, the Secretary will 
release an update outlining the excellent progress we have made 
to implement Unity of Effort. While progress has been made, 
more needs to and will be done.
    In this update, the Secretary will direct me, the USM, to 
begin a new effort called Acquisition Innovations in Motion, or 
AIM. AIM is simply a set of on-going and recurring activities 
designed to enhance how the Department does business and its 
continued improvement of our acquisition process and industry 
engagement to maximize our capability to deliver and procure 
the best solutions possible.
    I was pleased when GAO reported our acquisition policy 
framework is generally sound and reflects key program 
management best practices. This framework serves to bind the 
DHS acquisition community around a common operating procedure.
    In addition to a more substantive policy framework, we have 
engaged the community in the following areas:
    We now have an active Joint Requirements Council consisting 
of senior operational executives from every component in 
headquarters. The JRC works with cross-component mission 
portfolio teams to identify common capability needs and 
challenges across DHS, then oversees and conducts rigorous 
analysis and assessments. Ultimately, this work will be 
codified into a lasting and functional framework for the 
Department's requirements process.
    Our acquisition management improvements are due to strong 
acquisition leadership, commitment, and the dedication and 
expertise of our workforce. We are building a solid foundation 
of strong acquisition policies and practices to make us better. 
We are hiring and training the next generation of acquisition 
professionals through our intern programs. We are committed to 
attracting and retaining top talent to effectively and 
efficiently plan and execute our acquisition programs.
    We will continue to apply ourselves to acquisition 
management improvement through better processes and increased 
oversight, which will lead us through the next phase of 
acquisition reform. To sustain our success, we will continue to 
institutionalize a more integrated approach to acquisition 
management that will result in sound, empirically-based 
decisions around strategy, planning, acquiring needed 
capabilities, and oversight of acquisition programs.
    In closing, I want to reiterate that it is our fundamental 
responsibility to manage the Department effectively and 
efficiently. Sound management is critical to our ability to 
execute our mission successfully, and it is incumbent upon us 
as guardians of the public trust to be mindful of how we expend 
public funds.
    You have my commitment that I will continue to focus 
intensely on strengthening the Department's acquisition 
management functions and that I will work closely with this 
committee and with GAO to achieve that goal.
    Thank you, and I look forward to the discussion.
    [The prepared statement of Mr. Fulghum follows:]
                   Prepared Statement of Chip Fulghum
                             April 22, 2015
    Chairman Perry, Ranking Member Watson Coleman, and other 
distinguished Members of the subcommittee, thank you for the 
opportunity to appear today to discuss acquisition management at DHS. 
My comments will focus on: (1) The impact of Unity of Effort on 
improving acquisition management; (2) our progress and challenges in 
addressing GAO's recommendations.
    I wish to express appreciation to my colleagues from the Government 
Accountability Office (GAO) for their long-standing and dedicated work 
to support the transformation of acquisition management at DHS. Over 
the past several years, we have forged an excellent working 
relationship with GAO and have reached common ground on many issues. I 
am gratified by their recent comments that recognized the substantial 
progress the Department has made to address its high-risk areas, 
especially those that fall within the acquisition management area. We 
are committed to sustaining this progress and working to ensure program 
managers effectively execute our policies, procedures, and 
instructions.
    As acting deputy under secretary for management and acting chief 
acquisition officer, I am ultimately responsible for overseeing the 
policies, processes, and procedures used to acquire and oversee goods 
and services for the Department. The momentum gained from the 
Secretary's Unity of Effort initiative has accelerated the efforts 
undertaken by previous under secretaries for management to build a 
stronger management framework much earlier in the investment life 
cycle. Exactly 1 year ago, Secretary Johnson formally launched the 
Unity of Effort initiative to better integrate the Department's people, 
organizational structures, and operational capability. The Secretary 
also emphasized the need to improve acquisition management through 
enhancements to policies, structures, and processes.
    More importantly, the Unity of Effort initiative has 
institutionalized stronger, more centralized governance structures 
through the establishment of the Secretary's Leaders Council (SLC) and 
the Deputy's Management Action Group (DMAG). Strategy and resourcing 
decisions made by these governance boards ultimately feed the existing 
acquisition process, which continues to oversee acquisition 
investments--from the mission needs phase through completion of a 
program.
    In the past year, the SLC and DMAG have made critical decisions 
around strategy, resource allocation, requirements, and operational 
planning. The decisions have produced: A leaner, more mission-focused 
fiscal year 2016 budget; a campaign plan for the Southern Border; the 
launch of three (3) pilot Joint Task Force(s) to unify operational 
planning, and the re-establishment of the Joint Requirements Council 
(JRC) to improve the quality and validity of the Department's 
requirements generation and oversight process. By virtue of a stronger 
``left side'' of the investment life-cycle process, DHS is better 
positioned to execute strategies to close capability gaps. I will 
discuss the JRC and its impact on acquisition management later in this 
testimony.
    While there is always room for improvement, there are positive 
trends in the way we manage our acquisition programs. In February 2015, 
DHS was identified as one of 16 departments and agencies on GAO's 
``High-Risk List.'' In its report to Congress,\1\ GAO once again noted 
the Department's good progress in addressing 30 recommendations and 
outcomes and stated that DHS is on a path to getting off the High-Risk 
list. Specifically, GAO noted that since its last report in 2013, DHS 
has ``fully addressed'' 9 of 30 risk areas and has made significant 
progress toward addressing the remaining 21. Overall, GAO has stated 
that DHS is a ``model'' for how Federal agencies can work to address 
GAO's high-risk designations. GAO also stated:
---------------------------------------------------------------------------
    \1\ GAO, High-Risk Series: An Update, (GAO-15-290).

``DHS's top leadership, including the Secretary and Deputy Secretary of 
Homeland Security (who assumed leadership of the department after our 
2013 update), have continued to demonstrate exemplary commitment and 
support for addressing the department's management challenges. For 
instance, the department's Deputy Secretary and Under Secretary for 
Management, and other senior management officials have frequently met 
with us to discuss the department's plans and progress, which helps 
ensure common understanding or the remaining work needed to address our 
---------------------------------------------------------------------------
high-risk designation.''

    The Department has worked diligently to improve its acquisition 
processes and these efforts have produced more effective governance and 
significant improvements to future and health of current acquisitions. 
For example, we have established metrics to track program health, 
compliance with processes and policies, and program staffing. In recent 
years, the Acquisition Review Board (ARB) has increased its oversight 
reach and has taken action to cancel or pause several poor-performing 
or higher-risk programs that were not achieving the pre-established 
cost, schedule, and performance goals.
    In a recently-released report,\2\ GAO examined 22 acquisition 
programs on our Major Acquisition Oversight List (MAOL). I am pleased 
with GAO's acknowledgment that DHS is continuing to take steps to 
address challenges related to keeping DHS programs within cost and 
schedule parameters. As GAO recognized, we have already taken 
significant steps to improve acquisition management, such as dedicating 
additional resources to acquisition oversight and documenting major 
acquisition decisions in a more transparent and consistent manner. In 
addition, we are in the process of making policy changes in Management 
Directive (MD) 102-01 based on GAO's recommendations in a September 
2012 report.\3\ These on-going efforts highlight the Department's 
commitment to better acquisition and resource management.
---------------------------------------------------------------------------
    \2\ Homeland Security Acquisitions--Major Program Assessments 
Reveal Actions Needed to Improve Accountability (GAO-15-171SP).
    \3\ Homeland Security: DHS Requires More Disciplined Investment 
Management to Help Meet Mission Needs (GAO-12-833).
---------------------------------------------------------------------------
    In the past 12 months, we have increased the scrutiny of our 
Headquarters oversight responsibility by holding 24 ARBs. During my 
tenure as acting deputy under secretary, I have personally chaired 13 
of those ARBs.
    During these ARBs, substantive decisions were made that 
significantly influenced the performance of these programs. Some key 
decisions included:
   USCG's National Security Cutter and National Automated 
        Identification System; TSA's Electronic Baggage Screening 
        Program; and TSA's Passenger Screening Program for Explosive 
        Trace Detection were all authorized to enter the deployment 
        phase.
   OHA's BioWatch 3 was cancelled.
   FEMA's Logistics Supply Chain Management System was directed 
        to halt any new development until an assessment of its 
        operational capability and capability gaps is completed.
   USCIS Transformation and ICE TECS Modernization (MOD) 
        programs were both removed from breach status.
   TSA's Technology Infrastructure Modernization Program was 
        paused until TSA completes a re-baseline of the Surface and 
        Aviation segments and updates acquisition documentation and 
        strategy.
   CBP's Strategic Air Marine Program was brought into 
        compliance with MD-102 and is working to address actions 
        assigned by the ARB.
   USCG's Medium Range Surveillance Program was directed to re-
        baseline costs for the HC-144 and the C-27J aircraft that were 
        transferred from United States Air Force.
    The impact of this enhanced oversight has been acknowledged by both 
GAO and the DHS inspector general (IG). For example, GAO acknowledged 
that the Automated Commercial Environment (ACE) program which struggled 
for many years to develop the needed capabilities has remained on track 
to meet its approved schedule and cost estimates. The DHS IG has 
recently come to similar findings regarding the ACE program.
    While much has been accomplished, more is being done to address the 
challenges that remain. One of these on-going challenges is to ensure 
that acquisition programs are sufficiently staffed with trained and 
certified acquisition professionals. Recruiting and retaining top 
talent in the program management area is a challenge faced across the 
entire Federal Government. We have completed an analysis of the 
staffing gaps and I am working with component heads to develop 
aggressive action plans to close those gaps by Quarter 2 of fiscal year 
2016. In the mean time, I am holding components accountable for meeting 
their staffing goals or face the possibility that their programs will 
not be allowed to proceed to the next phase of the acquisition cycle.
    In a February 2015 report (GAO-15-290), GAO identified five (5) 
outcomes and recommendations in the Department's acquisition program 
management area. Of the 5 identified outcomes, one is ``fully'' 
addressed and we believe another will be ``mostly addressed'' by the 
end of calendar year 2015. We agree with GAO that we need to do a 
better job with producing and/or updating some of our acquisition 
documentation in a timelier manner. In response to this recommendation, 
I directed the Office of Program Accountability and Risk Management 
(PARM) and Component Acquisition Executives (CAE) to execute a plan to 
complete all outstanding documentation for acquisition programs by the 
end of fiscal year 2015.
    With regard to improving acquisition capabilities, I am pleased 
that GAO has determined that this recommendation is ``fully 
addressed.'' This has been accomplished in large part due to the 
solidification of the CAE structure, which serves as the single point 
of entry into each operational component. Each CAE is operating from a 
standard operating procedure that defines roles, responsibilities, and 
expectations. We will continue to refine this structure and support the 
success of each CAE.
    As mentioned earlier in my testimony, we have made good progress 
addressing the requirements-development process. As indicated, this 
progress was accelerated in June 2014, when the Secretary formally re-
instituted a Department-wide Joint Requirements Council (JRC). The JRC 
is comprised of senior operational executives from all major 
operational and headquarters components. It is chaired by a senior 
executive, currently a Rear Admiral from the Coast Guard, and reports 
directly to the Secretary's office.
    Since June 2014, the JRC has worked to create an effective 
component-driven joint requirements process that analyzes, validates, 
and recommends courses of action to leadership on DHS-wide capabilities 
and requirements that enhance operations, and more effectively and 
efficiently manage the Department's investments. To date, the JRC has 
stood-up a support staff and 5 cross-component teams to assess and 
analyze capabilities across a broad array of portfolios which include: 
Aviation Commonality; Information-based Screening and Vetting; 
Information Sharing; Chemical Biological Radiological Nuclear (CBRN) 
and Cybersecurity. On April 14, 2015, I approved a Joint-Operational 
Requirements Document (J-ORD) for aviation assets that was analyzed and 
validated by the JRC. Additionally, the JRC is in the midst of 
developing an enduring Component-driven joint requirements process.
    The JRC has already achieved initial operating capability and 
projects full operating capability by the end of fiscal year 2016. The 
JRC recently received budget authority in the DHS's fiscal year 2015 
appropriations to solidify the staff and develop a requirement 
generation process. Ultimately, the processes and procedures for the 
requirements-development phase will be codified into policy, which will 
ensure a lasting, functional framework for the Department's 
requirements process.
    Finally, we are in the process of implementing broader improvements 
to the acquisition process, beyond those mentioned previously. I have 
asked the senior procurement executive, chief information officer, and 
executive director for PARM to implement several initiatives by the end 
of fiscal year 2015. The first of these initiatives is engagement with 
industry councils. This engagement will facilitate honest conversations 
about the Department's vision and strategic plan, to include mission-
specific priorities, as well as challenges and gaps in current 
capabilities. Another of these initiatives focuses on obtaining 
feedback on how best to improve the quality and timeliness of our 
contracting process, which includes ``learning events'' on how we can 
improve debriefings, market research, and requests for information.
    In addition, industry feedback may be utilized to make changes to 
MD-102, as well as to determine how best to normalize the acquisition 
life-cycle management review process across all Department-wide 
acquisitions (e.g., Information Technology, Research & Development, and 
professional services). We will also create a ``Procurement Innovation 
Lab'' that leverages the best practices from both the Federal 
Government and industry to improve how we procure innovative 
technologies.
    It is our fundamental responsibility to manage the Department 
effectively and efficiently. Sound management is critical to our 
ability to execute our mission successfully, and it is incumbent upon 
us as guardians of the public trust to be careful and scrupulous in our 
expenditure of public funds. You have my commitment that I will 
continue to focus intensely on strengthening the Department's 
management functions, and that I will work closely with this committee 
and with GAO to achieve that goal.
    While there is still much work to do, we have made significant 
strides in improving acquisition and investment management for the 
Department's portfolio of major programs. I believe we are making 
progress in shifting the paradigm so investment decisions are more 
empirically driven and there is qualified technical expertise to 
support program managers at each phase of the life cycle.
    Thank you for the opportunity and the privilege to appear before 
you.
               Attachment.--Memorandum for DHS Leadership
                             April 22, 2014
FROM: Secretary Johnson
SUBJECT: Strengthening Departmental Unity of Effort
    The Department of Homeland Security has many strengths, starting 
with the professionalism, skill, and dedication of its people and the 
rich history and tradition of its Components. These strengths have 
allowed the Department to achieve many successes in the short time 
since its creation. It is clear to me, however, that DHS has yet to 
reach its full potential as an organization. Such potential is 
difficult to achieve and takes even the best organizations many years. 
Complicating matters is the difficult budget environment we currently 
face.
    Resource constraints also provide the impetus to build and mature 
our organization into one that is greater than the sum of its parts--
one that operates with much greater unity of effort. As I noted in my 
recent testimony on our FY 2015 budget request, I am committed to 
improving our planning, programming, budgeting, and execution processes 
through strengthened Departmental structures and increased capability. 
We must have better traceability between strategic objectives, 
budgeting, acquisition decisions, operational planning, and mission 
execution, in order to improve both Departmental cohesiveness and 
operational effectiveness.
    To be clear, these changes are not designed to centralize decision-
making authority and processes within an opaque DHS Headquarters. To 
the contrary, these changes are intended to transparently incorporate 
DHS Components into unified decision-making processes and the analytic 
efforts that inform decision making. Our collective goal is to better 
understand the broad and complex DHS mission space and empower DHS 
Components to effectively execute their operations.
    To accomplish this task, we will capitalize on existing structures 
and create new capability where needed--for example, as revealed by our 
recent Integrated Investment Life Cycle Management pilot study, which 
tested the linkages between interrelated strategy, capabilities and 
resources, programming and budgeting, and major acquisition oversight 
processes. That effort underscored the need to further strengthen all 
elements of the process, particularly the upfront development of 
strategy, planning, and joint requirements. Our collective task is to 
institutionalize improvements to support our primary objective: The 
effective execution of our missions. I have identified several initial 
focus areas that are intended to build organizational capacity, in 
order to develop action plans and implement change. Each requires our 
immediate attention.
    1. Departmental Leadership Forum.--The Department has not had a 
        forum for its most senior leadership--Component heads, Under 
        Secretaries, and the heads of select other offices--to gather 
        regularly with me and the Deputy Secretary in an environment of 
        trust, and openly place on the table issues, arguments, and 
        disagreements concerning our most challenging issues. This is 
        changing. The Department's Chief of Staff is now scheduling 
        twice-monthly Department Senior Leaders Council meetings, 
        hosted by me, to discuss issues of overall policy, strategy, 
        operations and Departmental guidance. The Deputy Secretary is 
        hosting weekly Deputies Management Action Group meetings, and 
        will use that group to move forward specific initiatives in 
        joint requirements development, program and budget review, 
        acquisition reform, operational planning, and joint operations.
    2. Departmental Management Processes for Investments.--The 
        strategic decisions of the Department's senior leadership are 
        only as good as the processes that support and give effect to 
        those decisions. Although much work has been done to date in 
        the areas of joint requirements analysis, program and budget 
        review, and acquisition oversight, more needs to be done to 
        turn strategy into results. To that end, in order to improve 
        our investment processes, I direct the following:
    a. Under the direction of the Under Secretary for Management, the 
            Chief Financial Officer will strengthen and enhance the 
            Department's programming and budgeting process by 
            incorporating the results of strategic analysis and joint 
            requirements planning into portfolios for review by issue 
            teams. Substantive, large-scale alternative choices will be 
            presented to the Deputies Management Action Group as part 
            of the annual budget development. This review process will 
            also include the Department's existing programmatic and 
            budgetary structure, not just new investments. It will 
            include the ability for DHS to project the impact of 
            current decisions on resource issues such as staffing, 
            capital acquisitions, operations and maintenance, and 
            similar issues that impact the Department's future ability 
            to fulfill its mission responsibilities.
    b. The Deputy Secretary, through the Deputies Management Action 
            Group, will lead an expedited review to provide strategic 
            alternatives for developing and facilitating a DHS 
            Component-driven joint requirements process. This joint 
            requirements process will include oversight of a 
            development test and evaluation capability, identification 
            of priority gaps and overlaps in Departmental capability 
            needs, provision of feasible technical alternatives to meet 
            capability needs, and recommendations to me on the creation 
            of joint programs and joint acquisitions to meet 
            Departmental mission needs.
    c. The Under Secretary for Management will conduct a full review of 
            the Department's acquisition oversight framework, and 
            update the processes described in Directive 102-01. The 
            result must be a transparent, coherent continuum of 
            activities that link and integrate Departmental strategy 
            and planning, development of joint requirements, 
            programming and budgeting decisions, capital investment 
            planning, and the effective and efficient execution of 
            major acquisitions and programs.
    3. DHS Headquarters Strategy, Planning, and Analytical 
        Capability.--The actions directed in this memorandum require a 
        focused, collaborative Department-level strategy, planning, and 
        analytical capability that fully understands Component 
        capabilities in these areas and coordinates with similar 
        Component-level functions, in order to support more effective 
        DHS-wide decision making and operations. As the Secretary of 
        Homeland Security, it is my responsibility to understand from a 
        Departmental perspective how the activities, operations, and 
        programs of each individual Component fit together in order to 
        best meet Departmental mission responsibilities in a 
        constrained resource environment. In some cases, this involves 
        developing a fuller, broader understanding of how the 
        Department meets its operational responsibilities, such as 
        securing our air, land, and sea borders. In other cases, this 
        involves understanding how individual Component resources and 
        activities are collectively integrated and employed in a 
        unified Departmental framework that is agile and flexible to 
        meet current and emerging threats when needed. We used this 
        approach in a limited way for the development of the Blueprint 
        for a Secure Cyber Future, TSA's Security Strategy for Mass 
        Transit and Passenger Rail, the QHSR study on countering 
        biological threats and hazards, and the cross-Departmental 
        Inbound Threat Study.
    My goal in focusing the collective DHS Headquarters strategy, 
        planning, and analytic capability, which will harness a number 
        of existing planning and analytic cells throughout DHS, is not 
        to eliminate the need for Component-level planning or analysis. 
        To the contrary, I intend for this focused DHS Headquarters 
        capability to work together with the planning and analytical 
        organizations within each Component to develop a comprehensive 
        picture of the Department's mission responsibilities and 
        functional capabilities, and to identify points of friction or 
        gaps, thus framing the corresponding choices that must be made. 
        This capability must be integrated into, not created and 
        employed in isolation from, existing Departmental functions 
        that are critical to day-to-day mission execution and mission 
        support activities. In addition to supporting the other actions 
        in this memorandum. I direct the following specific tasks:
    a. The Assistant Secretary for PLCY's Office of Strategy, Planning, 
            Analysis & Risk will stop work on the current version of 
            the FY14-18 DHS Strategic Plan, and instead will be 
            prepared to lead the Department's senior leadership in a 
            strategic planning effort through the Department Senior 
            Leaders Council to set the vision and specific, mission-
            focused outcomes for DHS for the next 5 years. Annual 
            resource planning guidance and operational planning 
            guidance must be based on the Department leadership's 
            strategic plan for addressing challenges over this time 
            period. The decisions we reach now, especially with respect 
            to investments, will dictate what capabilities our 
            successors will have in the future. The Assistant Secretary 
            for PLCY's Office of Strategy, Planning, Analysis & Risk 
            will work with representatives from all of your 
            organizations to develop the Department's FY14-18 Strategic 
            Plan from that vision. The Department Senior Leaders 
            Council meeting and subsequent meetings will be scheduled 
            on release of this memorandum.
    b. The Deputy Secretary and the Department's Chief of Staff, 
            supported by the Assistant Secretary for PLCY's Office of 
            Strategy, Planning, Analysis & Risk, will provide 
            direction, focus, and harmonization of current operational 
            planning and coordination activities and the analytic 
            capability of the Office of Program Analysis and Evaluation 
            with Management Directorate's Office of the Chief Financial 
            Officer, in order to strengthen integrated resource 
            planning, the development of operational planning guidance, 
            and the conduct of strategic analyses in specific 
            portfolios and issue areas. Better synchronization across 
            DHS Headquarters capabilities in these areas will increase 
            DHS Headquarters' capability to effectively conduct and 
            coordinate strategy, planning, and analytic activities.
    4. Departmental Processes for Enhancing Coordinated Operations.--
        The strategic decisions of the Department's senior leadership 
        and the investments our Department makes in current and future 
        capabilities will only be effective if cross-Department 
        operations are planned and executed in a coordinated fashion. 
        Many DHS operations are conducted solely by a single Component, 
        although successful examples of joint operational activities 
        exist in seaports such as Charleston, SC, Miami, FL, San Diego, 
        CA, and Seattle, WA, and through organizations chartered under 
        the National Interdiction Command and Control Plan such as 
        Joint Interagency Task Force-South in Key West, FL, the El Paso 
        Intelligence Center in El Paso, TX, and the Air and Marine 
        Operations Center in Riverside, CA. Targeted examinations of 
        specific mission- and function-related issues are necessary to 
        enhance DHS-wide operational planning efforts, leading to more 
        effective operations. Further, operational planning guided by 
        my strategic intent, with outcomes and quantified targets, will 
        better inform the joint requirements process and future 
        resource decisions. Supporting these objectives, I direct the 
        following:
    a. The Deputy Secretary, through the Deputies Management Action 
        Group, will lead a 60-day review and provide strategic 
        alternatives for future coordinated operations. This effort 
        will evaluate unity of effort options for enhancing DHS 
        operational mission effectiveness in specific locations and 
        geographic regions, or for the integration of cross-
        Departmental functions.
    b. The Deputy Secretary, through the Deputies Management Action 
        Group, will oversee an effort to develop a DHS strategic 
        framework for the security of the U.S. Southern Border and 
        approaches by August 1, 2014, along with a set of nested 
        ``campaign plans'' for specific geographic areas or problem 
        sets. As an initial part of this effort, the Assistant 
        Secretary for PLCY's Office of Strategy, Planning, Analysis & 
        Risk will lead an activity to develop the overall strategic 
        guidance, including outcomes with quantified targets, upon 
        which the framework and campaign plans will be based. Plan 
        development will be led by a senior USCG official, working with 
        responsible DHS Components and DHS Headquarters elements. The 
        strategic framework and campaign plans will include approaches 
        for improved information sharing, sensor integration, and 
        unified command and control structures as appropriate.
    c. The Deputy Secretary, through the Deputies Management Action 
        Group, will lead a 60-day review to provide the Department's 
        senior leadership with strategic options for enhancing DHS 
        homeland security mission effectiveness internationally, 
        through joint policy liaison and operational activity in 
        overseas locations and geographic regions across all DHS 
        components. It is imperative that we explore every opportunity 
        to extend our homeland security efforts, in cooperation with 
        our interagency and foreign partners, far beyond the borders of 
        the United States. I understand that the Department has 
        conducted several evaluations of its international footprint, 
        but in today's budget environment we need to look more closely 
        to make sure we are not leaving gaps nor have unnecessary 
        overlaps in deployment and staffing.
    Enhancing the effectiveness and unity of DHS operations to better 
fulfill our mission responsibilities is my primary reason for making 
these important changes. I recognize that what I am directing 
represents a departure in some ways from current DHS Headquarters and 
Component approaches to management and operations. But in adding 
structure and transparency, combined with collaborative, forthright 
senior leader engagement, we will build together a stronger, more 
unified, and enduring DHS. I intend to discuss these initiatives at the 
next Department Senior Leaders Council meeting, and will begin 
codifying these efforts in appropriate Department directives, beginning 
with the resource planning guidance for FY 2017-2021 and the DHS 
Strategic Plan for FY2014-2018. I look forward to your active support 
of these steps and your frank, forthright participation in the meetings 
that will follow.

    Mr. Perry. Thank you, Mr. Fulghum.
    The Chairman now recognizes Dr. Sims for your testimony, 
sir.

 STATEMENT OF CEDRIC J. SIMS, PARTNER, EVERMAY CONSULTING GROUP

    Mr. Sims. Good afternoon, Chairman Perry, Ranking Member 
Watson Coleman, and distinguished Members of the subcommittee. 
Thank you for the opportunity to appear before you today.
    I am Dr. Sims, partner of Evermay Consulting Group. I was 
the first executive director of the DHS Office of Program 
Accountability and Risk Management, also known as PARM. I 
served DHS headquarters roles for over 3 years. My Federal 
career also includes over 8 years with the United States Secret 
Service, a window that also included the post-9/11 transition 
of Secret Service from Treasury into the Department of Homeland 
Security.
    I am a native Texan and a graduate of Texas A&M University, 
and I have 22 years of experience in engineering and executive 
management applied to law enforcement and homeland security 
pursuits.
    In 2011, I led the development and implementation of the 
Office of Program Accountability and Risk Management, with the 
highest-level support of the under secretary for management and 
my peer chief executive officers. This was a crucial time for 
the agency, and the creation of PARM was necessary to address 
on-going challenges with program management.
    In the simplest terms, PARM has two fundamental 
responsibilities. The first is program accountability. This 
means that all stakeholders, not just the program manager, are 
accountable to the program for its success. The second is risk 
management. This objective is to address risks that are 
inherent in complex programs while supporting prioritization of 
investment decisions. An effective PARM will create an 
environment where the probability of program success increases 
while reducing risks that cause waste and inefficiency.
    With PARM, Departmental acquisition was improved by putting 
in place methods to address front-end requirements and back-end 
program management. The goal is to minimize risk, encourage 
fiscal responsibility, and improve end-to-end execution across 
the entire acquisition life cycle.
    In fiscal year 2011, acquisition programs represented 
nearly $18 billion of the Department's $55 billion budget.
    In my first role at headquarters, I supported the DHS chief 
information officer's review of over 79 major information 
technology programs that accounted for the vast majority of 
$6.4 billion worth of IT spend. From this rigorous effort, we 
observed pockets of excellence across DHS programs, but there 
were also many troubled programs. Despite its large budget, DHS 
had very little Department-wide institutionalization of program 
management disciplines, standards, or tools.
    Coincidentally, GAO had just delivered a letter to the DHS 
Secretary in September 2010 advising to strengthen requirements 
and development processes. In the letter, perennial program 
management deficiencies were highlighted. The confluence of 
events was a clear call to action for reforms in program 
management.
    I established PARM as an office to institute reforms with 
clear objectives: First, rationalize the requirements 
development process; second, improve and streamline governance; 
next, solidify the component acquisition executive role; 
furthermore, enhance business intelligence; and expand the 
acquisition workforce while strengthening program and project 
management training.
    These were the guiding principles of PARM. By the time of 
my departure some 3 years later, the Department was armed with 
the experience gained from a review of over 100 programs and 
the conduct of over 70 acquisition review boards. We drew 
lessons from both successful and unsuccessful experiences. 
Acquisition decisions were well-documented, and the 
expectations of program improvements were clear. The on-going 
body of work to be achieved was extensive but reflected shared 
Departmental responsibilities.
    The recent report about the current state of acquisition 
management at DHS highlights that DHS programs are still 
exhibiting various levels of adherence to Acquisition 
Management Directive 102.
    However, I am encouraged by DHS Secretary Jeh Johnson's 
Unity of Effort to drive more efficient and mature practices 
for managing investments. Acquisition processes are not perfect 
and are still maturing. This could only be achieved through a 
common discipline and set of practices that drive transparency 
and uniformity in decision making.
    The successful delivery of major programs must continue to 
be a strategic business function of the Department. Those who 
directly carry out the mission require and deserve the tools 
and processes to help address their evolving mission needs 
effectively and efficiently.
    Thank you for the opportunity to testify today. I am very 
happy to be here to support your efforts, and I look forward to 
answering your questions.
    [The prepared statement of Mr. Sims follows:]
                  Prepared Statement of Cedric J. Sims
                             April 22, 2015
    Good afternoon, Chairman McCaul, Ranking Member Thompson, Chairman 
Perry, Ranking Member Watson Coleman, and the distinguished Members of 
the subcommittee. Thank you for the opportunity to appear before you 
today.
    I am Dr. Cedric J. Sims, partner of the Evermay Consulting Group. I 
was the first executive director of the Department of Homeland Security 
(DHS) Office of Program Accountability and Risk Management, also known 
as PARM. I served in DHS Headquarters roles for over 3 years.
    My Federal career also includes 8+ years at the U.S. Secret 
Service. This window included the post-9/11 transition for the Secret 
Service from Treasury to DHS. I am a native Texan and graduate of Texas 
A&M University. I have over 22 years of experience in engineering and 
executive management applied to law enforcement, transportation, and 
homeland security pursuits. I have had the unique privilege to serve in 
private sector, State, and Federal agencies.
    In 2011, I led the development and implementation of the Office of 
Program Accountability and Risk Management with the highest-level 
support of the under secretary for management and my peer chief 
executive officers. This was a crucial time for the agency and the 
creation of PARM was designed to create an office responsible for 
program accountability and risk management. In the simplest terms, PARM 
has two fundamental responsibilities. The first is Program 
Accountability--in order to ensure that all stakeholders are 
accountable to the program for its success. The second is Risk 
Management--in order to heighten executive awareness of inherent risks 
to help prioritize investment decisions. Improving upon Departmental 
acquisition, processes and procedures were put in place to address 
``front-end'' requirements as well as ``back-end'' program management, 
in order to minimize risk, encourage fiscal responsibility, and improve 
end-to-end execution across the entire acquisition life cycle.
    In fiscal year 2011, acquisition programs represented nearly $18 
billion of the Department's $55 billion budget. In prior years, I had 
led the development of the Concept for Future Operations for the U.S. 
Secret Service that became the cornerstone of its nearly $300-million 
Information Integration and Technology Transformation program. In my 
first role at DHS headquarters, I supported the DHS chief information 
officer's review of over 79 major Information Technology (IT) programs 
that accounted for the vast majority of the $6.4 billion DHS IT 
investment. There were pockets of excellence across DHS's programs, but 
there were also some very troubled programs. Despite its large budget, 
DHS had very little Department-wide institutionalization of process 
disciplines, standards, and tools for IT programs. Coincidentally, GAO 
had just delivered a letter to DHS in September of 2010, advising the 
Secretary of Homeland Security, ``to strengthen its requirements 
development process.'' In the letter, perennial program management 
deficiencies were highlighted. The confluence of events was a clear 
call to action for reforms in program management.
    I established PARM as an office to institute reforms with clear 
objectives:
   Rationalize the requirements development process;
   Improve and streamline governance;
   Solidify the Component Acquisition Executive (CAE) role;
   Enhance business intelligence; and
   Expand the Acquisition Corps while strengthen Program and 
        Project Management training.
    These were the guiding principles of PARM. By the time of my 
departure, 3 years later, the Department was armed with the experience 
gained from the review of over 100 major programs and the conduct of 
over 70 acquisition review boards. We drew lessons from both successful 
and unsuccessful experiences. Acquisition decisions were well 
documented and expectations for program improvements were clear. The 
on-going body of work to be achieved was extensive but reflected a 
shared Departmental responsibility.
    The successful delivery of major programs must continue to be a 
strategic business function of the Department. Nearly half of the DHS 
budget is dedicated to obtaining goods and services to support and 
improve capabilities, including over $16 billion in investments in 
acquisition programs. Those who directly carry out the mission require 
and deserve the tools and processes to help address their evolving 
mission needs effectively and efficiently.
    There are a few points that should be kept in mind when reading the 
reports about the current state of acquisition management at DHS. 
First, consider the environment where the Department was deploying the 
earliest mission capabilities to meet rapidly-evolving threats. We knew 
the acquisition processes were not perfect and needed maturing. This 
could only be achieved through a common discipline and set of practices 
that drive transparency and uniformity in decision making.
    Through Acquisition Management Directive 102-01 and subsequent 
revisions, we documented policy, governance, and processes requiring 
far more rigorous program management than previous DHS policies and 
practices. The DHS programs are still exhibiting various levels of 
adherence to the directive's guidance. However, I am encouraged by DHS 
Secretary Jeh Johnson's Unity Effort to drive more efficient and mature 
practices for managing investments.
    Second, clear and rigorous practices absolutely needed to be 
established. The cornerstone of our acquisition review process is the 
program baseline. The acquisition program baseline formally documents 
critical cost, schedule, and performance parameters that must be met to 
accomplish the program's goals. By tracking and measuring actual 
program performance against baseline, management is alerted to 
potential problems and can take corrective action. We implemented 
common tools for collection and dissemination of business intelligence 
such as the centralized Decision Support Tool (DST). Utilization of 
these tools helped us better manage the complex relationships between 
mission objectives, program strategy, and performance metrics for a 
specific program.
    Finally, in order for acquisition practices to continue to mature 
in terms of process and oversight, DHS must continue to work 
collaboratively with partners across the Homeland Security enterprise. 
During my tenure, none of the maturation, or any of these improvements 
in oversight, could have occurred without the on-going discipline of 
reviews, done both internally by DHS and its components and externally 
by GAO and IG.
    Ultimately, we must be ever-vigilant to perform a much better job 
of successfully delivering best-in-class solutions to operators, 
stakeholders, and citizens.
    Thank you for the opportunity to testify today. I am very happy to 
be here to support your efforts. I am here as a citizen, fully 
committed to the critical missions of the Department of Homeland 
Security and defense of the people of the United States of America. I 
look forward to answering your questions.

    Mr. Perry. Thank you, Dr. Sims.
    The Chairman now recognizes himself for 5 minutes for 
questioning. I will start with Under Secretary Fulghum.
    You know, in reading the GAO report, I have to tell you, I 
was struck by--you know, things you didn't know, right? The 
impact to our border and maritime security and the scheduled 
delays of several major CPB and Coast Guard acquisition 
programs. You have already mentioned them, but it bears 
repeating: The CPB integrated fixed towers, over 6 years late; 
Coast Guard long-range surveillance aircraft, over 9 years 
late; and the National Security Cutter, 4 years late; the Fast 
Response Cutter, over 4 years late.
    You know, with immigration being an issue--and this isn't 
meant to be a gotcha question, but just curiously. You know, 
when you talk about the integrated fixed tower system that is 6 
years late, according to this, any idea of how--you know, 
because I think it is important to put it in terms so people 
understand that the failure of the acquisition process has 
consequences on the ground.
    Any idea how many illegal aliens will--you know, is there 
an estimate of how many will penetrate the border at those 
locations where the towers are supposed to be and are not?
    Mr. Fulghum. Well, first of all, as you know, I am not the 
immigration expert.
    Mr. Perry. Right.
    Mr. Fulghum. But I can talk to you about what we are doing 
to get the program delivered.
    Mr. Perry. Okay.
    Mr. Fulghum. So, when we talk about 6 years, that is from 
SBInet. As you and GAO have documented, that program did not 
deliver. So we stopped the program, restructured the program.
    The current program is 21 months behind schedule, for two 
reasons. First of all, when we got the bids in, we got a lot 
more than we thought we were going to get, so it took us longer 
to go through that demonstration period. The second part is the 
award was protested.
    We have gotten past that now, and we are now on a path to 
deliver that capability, albeit, as you said, later than we 
would have liked.
    Mr. Perry. Let me ask you this. This isn't part of the 
script, so to speak, or the questions, but I am just--it is a 
billion dollars, right? That is what I have, a billion dollars. 
How did we get a billion dollars into it before we figured out 
it wasn't working? I mean, how does that happen?
    Mr. Fulghum. So, as you know, I wasn't here then, but what 
I would tell you is, based on my experience, that DHS' 
acquisition process--and this is a key tenet of what the 
Secretary is driving us towards--is, if you get it right up 
front, you are going to be able to deliver.
    So, in other words, if you get the requirements up front 
correctly and they are well-defined and you have operator input 
and you get the right mission needs statement, the right 
operational requirements document, if you get a well-defined 
requirement, you will get a better cost estimate, you will get 
more reliable budgets, and then you will be able to proceed 
through the acquisition process.
    What has hampered DHS' ability in the past has been the 
lack of a strong requirements process. The Secretary is fixing 
that. Standing up the JRC is an important milestone. It is up 
and running, and it has actually approved its first joint 
operational requirements document. It has a lot more work to 
do. We need to get the governance underneath it in place.
    But that--and I think my colleague from GAO would agree, as 
well as Cedric, that that is the key to a successful 
acquisition, is identifying requirements up front and getting 
them right.
    Mr. Perry. So, if I can brief you back, it sounds, you 
know, to make it simple for me, because it took a couple 
minutes, but what I heard was, we didn't know, the Department 
didn't know what they were asking for, or they couldn't 
identify the requirements and articulate them so that it is not 
the contractor's fault that they gave us what we asked for. We 
didn't really know what we were asking for, it sounds like, I 
mean, to a certain extent.
    I just wonder how you get a billion dollars into it before 
you figure that out.
    Mr. Fulghum. So I would say that----
    Mr. Perry. Let me ask you this. You know, I heard, what, it 
was, on the one project I think that Ms. Mackin mentioned, 6 of 
15 or something were untested. Like, that is essentially 50 
percent or something like--how are we buying anything that is 
untested?
    Mr. Fulghum. So I would characterize it this way. First of 
all, we leverage testing of--for example, the 130s, we leverage 
testing of the Air Force. So while we didn't do the testing, we 
leveraged testing that DOD did. In another case, while we 
didn't do operational testing, we did acceptance testing.
    Let me just be very clear. Since I have been the under 
secretary for management in the acting role, we have had ARBs, 
and every ARB, no program moves forward without Test and 
Evaluation looking at us and saying, ``Yes, we are comfortable. 
We have looked at the test plan, we have an accurate 
assessment, and we are good with it moving forward.''
    So I believe we have fixed that problem. But, in the past, 
as she has said, some programs have not had all the KPPs, as 
she identified, documented in a way that said how we went 
through that assessment.
    Mr. Perry. So, real quick, since my time has expired, but 
just to finish the thought: So now that you are here and you 
have instituted the program, how long until people like me see 
results?
    Mr. Fulghum. So I think you are already seeing results----
    Mr. Perry. I will let you stop there.
    Mr. Fulghum. Okay.
    Mr. Perry. I don't want to hold other folks up, so, in the 
interest of time, I appreciate it. We will continue.
    Mr. Fulghum. Yes, sir.
    Mr. Perry. With that, the Chairman now recognizes the 
Ranking Member, the gentlelady from New Jersey, Mrs. Watson 
Coleman.
    Mrs. Watson Coleman. Thank you very much.
    I have a lot of questions, so let me see if I can get 
really quick answers, though. I want to start with the GAO.
    Do you think the Department is moving in the right 
direction? Is the Department organizing appropriately? Is it 
creating the entities necessary to ensure that there is good 
decision making in the first place, accountability and then 
verifiability? Is it moving in the right direction?
    Ms. Mackin. I think it is moving in the right direction.
    As you know, there are acquisition oversight 
responsibilities at all----
    Mrs. Watson Coleman. Yes.
    Ms. Mackin [continuing]. Levels in the Department, from the 
USM to PARM and, importantly, the components and the program 
offices. I think, if I had to pick one area where I think more 
could be done, it is at the component and program office level. 
The policies, as we have said for many years, are sound. It is 
a matter of following them in practice.
    Mrs. Watson Coleman. So the component, and what was the 
other thing you said? Component and----
    Ms. Mackin. Program offices.
    Mrs. Watson Coleman. Programs.
    Ms. Mackin. So down to the lower levels in the 
organization.
    Mrs. Watson Coleman. Yes. Thank you.
    Let me move on to Mr. Fulghum, because you mentioned 
something in testimony that I read that had to do with 
personnel. I don't know if it was inadequate personnel, not 
enough personnel.
    To what extent are we having these concerns about the 
Department's success here having to do with personnel as 
opposed to systems? What is the issue with personnel?
    Mr. Fulghum. So I believe the issue you are referring to is 
the program office having adequate staffing and the training of 
those folks.
    So what we have done is we have done a program assessment 
of the staffing needs of the various programs out in DHS. There 
are gaps in those programs, just like there are gaps in 
staffing needs across the Department, and we are working to 
aggressively fill those gaps.
    In addition to that, we have an excellent training 
institute where we get interns. We have about 60 at any given 
time going through the pipeline. We graduate about 30 a year to 
feed those programs. So I believe we are on the right track.
    The last thing I would say very quickly is that no 
program--again, every program that comes before us has to talk 
to us about staffing. They have to show us how many folks they 
have on board versus what they need. If it is not adequate, 
that is one of the considerations, whether they move forward or 
not.
    Mrs. Watson Coleman. So do you have an issue with 
recruiting people or training people or retaining people?
    Mr. Fulghum. So I think we have an excellent recruiting 
tool in our acquisition institute. In the past, we have had 
some trouble placing them and retaining them. Tight budgets 
mean folks were squeezing down the number of folks they had. I 
think we have solved that now, and we are able to place those 
graduates within DHS and keep them.
    Mrs. Watson Coleman. So the memo that I referred to that 
was just delivered to Congress, I guess, yesterday--or today, 
excuse me--referred to a number of instances where you deviated 
from--or not you, but the Department deviated from its 
practices and granted waivers.
    There was an indication that there was going to be an 
assessment of those instances and that there was going to be, I 
guess, a finding, one way or the other, with regard to those 
waivers that were given. Has that been done?
    Mr. Fulghum. So we agreed with GAO. I issued an ADM, I 
believe yesterday, an acquisition decision memorandum, that 
said three basic things.
    First of all, it told program offices to give us a 5-year 
projection on those programs and sustainment in terms of cost.
    The second thing it did--and this is very important--is I 
said, ``I need an end date. When is this program scheduled to 
be done and be complete?'' Because that is important for us so 
it signals when we have to start looking for the next 
investment.
    The third thing that we asked my office to do in CFO is 
simply to make sure that we are looking at these 42 programs as 
we go through our normal programming and budgeting process, 
that they get the appropriate visibility so that we make sure 
that we are not seeing cost growth or things of that nature and 
we can address it through the budget process.
    Mrs. Watson Coleman. What, if anything, do you need from 
us?
    Mr. Fulghum. Well, as----
    Mrs. Watson Coleman. Besides calling you down every other 
day for a hearing.
    Mr. Fulghum. I think the bill that was passed last year 
would certainly help us codify and give us the authority that 
we need. It would codify the framework that we have.
    I think you are going to have to give us some time, and I 
know you hear that a lot from people that sit up here, but you 
are going to have to give us some time, in terms of maturing 
the joint requirements process and getting the foundation that 
started poured concrete over so that it is institutionalized.
    But I think we are making huge improvements each and every 
day, and I think our acquisition process is getting better.
    Mrs. Watson Coleman. Thank you, Mr. Chairman. I yield back 
my time.
    Mr. Perry. The Chairman thanks the gentlewoman.
    The Chairman now recognizes the gentleman from South 
Carolina, the maker of the bill, Mr. Duncan.
    Mr. Duncan. Thank you, Mr. Chairman.
    Thank you.
    It is almost a year ago that we sat in this very room and 
had this same conversation about acquisition reform for DHS. We 
still see a GAO report that talks about schedule delays for up 
to 4 years, the need for baselines and performance metrics, the 
need for program oversight and performance discipline. The 
bottom line is we see programs and solutions which are late, 
cost more, and do less than originally promised.
    Last year, the House passed a bill that I authored to put 
acquisition reform in place. Secretary Johnson assured me that 
it wasn't necessary, that he was going to implement the same 
acquisition reforms at DHS. I hope that is the case.
    I hope we will continue to talk about accountability, 
discipline, and transparency because the Nation is $18-plus-
trillion in debt, and every dollar that is wasted through 
schedule delays or the lack of this acquisition process that is 
necessary, with the necessary metrics and oversight, is a 
dollar that can't be used to defend our borders, can't be used 
to protect our communities or protect our citizens.
    So I think this is so important. I would love to see this 
committee and the Congress pass a version of an acquisition 
reform bill similar to what we passed last year, maybe with a 
few changes.
    So the question I have--and, Ms. Mackin, you were, I 
believe, in this committee last year when we were having these 
conversations.
    The question I have, Mr. Fulghum, is, what is happening 
over at DHS? With Secretary Johnson's assurances to me last 
year that he was going to continue down this track and put 
forth an internal policy for acquisition reform, bring me up to 
speed.
    Mr. Fulghum. Okay. I can tell you what we have been doing 
over the last year.
    First of all, as I said, we stood up a joint requirements 
process, which is key to improving acquisition. It is up and 
running. It has approved its first joint requirements document. 
That is one document, I know that, but that is a strong signal 
that we are serious about getting the requirements piece right.
    What Secretary Johnson was also talking about is making 
sure that we have the right folks doing strategy because 
strategy drives requirements. So we have reorganized our policy 
to be a strategy and planning function that feeds the 
requirements process.
    Then, from the acquisition oversight perspective, we have 
conducted over 22 ARBs. They are not ARBs where we just sit 
around and discuss things; they are outcome-oriented ARBs. I 
have chaired 13 of them myself. We have had programs that have 
come in, like Air and Marine, that haven't been to an ARB in at 
least 4 or 5 years. They came, we gave them actions, and they 
are doing those actions. We would be happy to share with you 
the progress we are making in terms of each one of those 
programs.
    So I believe that, again, we have a ways to go, but the 
Secretary charged us with getting acquisition right, and we are 
doing it.
    Mr. Duncan. Ms. Mackin, do you agree with that assessment 
in the 2015 report that just came out?
    Ms. Mackin. I guess ``cautiously optimistic'' would be the 
way I would phrase it.
    We have been calling for the Joint Requirements Council, 
for example, to be reformulated since 2008. So now it is 
chartered; that is good. We haven't seen any outputs yet. I 
know aviation requirements was first up. So we haven't seen the 
documentation. I look forward to looking at it but, more 
importantly, seeing an output. Are requirements going to be 
considered across the Department and in more of a portfolio 
aspect so that there is not some duplication that may be there 
right now?
    I do think requirements is the most important consideration 
right now for the Department.
    Mr. Duncan. All right. Do you agree that this type of 
oversight from Congress is important?
    Ms. Mackin. Absolutely. As was mentioned, we also did 
definitely support the bill from last year. I think it would go 
a long way toward codifying some roles and responsibilities 
within the Department, calling for acquisition baselines for 
all programs, reporting structures when there is a breach of 
cost, schedule, or performance thresholds and so forth.
    Mr. Duncan. I want to thank you. Thank you for all your 
work, your work, and also at the Department with Secretary 
Johnson. I would love to see where a new program, not some of 
these that we have talked about in the past, but where a new 
program is brought forward, you have advised Congress that this 
is how you are going to acquire, this is the baseline, this is 
the metrics, this is the performance standards we have put in 
place, this is sort of the review that we are going to do, and 
let us track that process, as well. Because I think it is 
important that we save our taxpayer dollars in these times.
    Mr. Chairman, it is 3:15 in the afternoon, 3:20. It is not 
the grooviest time slot, whether you are on TV or whether you 
are in Congress in a Congressional committee. C-SPAN is 
probably not covering this. This isn't the grooviest topic that 
is out there. But it is so important when we talk about saving 
taxpayer dollars, because every dollar is important, so I 
commend you for that.
    I yield back.
    Mr. Perry. The Chairman thanks the gentleman.
    You know, as I read through the briefing, you know, you 
look at up to $10 billion in acquisition-cost loss. I don't 
know, $10 billion seems like real money to me around here, and 
we could probably use it on occasion, from some of the things I 
have seen.
    But, with that, the Chairman now turns to the gentlewoman 
from California, Mrs. Torres.
    Mrs. Torres. Thank you, Mr. Chairman.
    Mr. Fulghum, DHS has the third-largest budget in--your 
agency is the third-largest, with $18 billion spent in goods 
and services annually.
    This report has also identified that personnel has failed 
to follow established guidelines. What factors contribute to 
the on-going schedule delays, cost overruns, and the failure to 
complete programs as intended?
    I know that you have been asked this over and over, and we 
will continue to ask over and over because of the seriousness, 
you know, of the reports that we are receiving. I tend to agree 
with my colleagues, that we have to protect taxpayers' dollars, 
and this is the only avenue that we have to do that.
    Mr. Fulghum. We agree with that.
    I will start with, again, the requirements process. A 
better-defined requirement leads to a better cost estimate, 
which then leads to a better budget build. That alone won't do 
it, but that puts the program on a good start.
    As a part of that requirements process, one thing I need to 
mention is that our S&T Directorate is a key member of that 
body because they need to look at the technical aspects of what 
the requirement is and how we are going about solving that 
requirement to make sure it is technologically feasible. 
Because, as she has mentioned in her report, at times you have 
a good requirement but it is just not technologically mature.
    So why are programs over cost? Because, again, we need 
better-defined requirements, and it will get you a better cost 
estimate. But I will be frank with you; budget uncertainty has 
certainly contributed to this. You know, our budgets have been 
going up and down, and the timing associated with getting those 
budgets has definitely been a contributing factor.
    Mrs. Torres. So how do you intend to complete the 22 
acquisition programs as conceived? How will the Department 
address the shortfalls in funding that have already been 
identified?
    Mr. Fulghum. So, for the six programs that have been 
mentioned here today that need an approved program baseline, 
they will have one by the end of this year. Because what I have 
told those programs is simply this: I need a goalpost, first of 
all. Then we will get a revised cost estimate, and then we will 
be able to come to closure on those programs.
    Each one of them are in various stages of their acquisition 
life cycle, but I can tell you that, where they are missing a 
cost estimate, by the end of this year we will have 7 of the 10 
that need cost estimates done. The other three will be done by 
the first quarter of 2016. So we will have that done.
    Then those that are in breach will come back in front of 
the ARB, and they will be told, I need to hear from you how you 
plan to get the program back on track.
    Mrs. Torres. Last, will you walk me through the process, 
the actions that DHS is taking to ensure that the ARB is 
meeting consistently to review the major acquisition programs?
    Mr. Fulghum. So, a couple things.
    One, we have had 22 ARBs, I think, in the past 12 months, 
13 while I have been there. So it is the responsibility of the 
director of PARM to look out and see when the next major 
acquisition milestone event is. Or if we have said, I want to 
see the program every 3 to 6 months, whether there is an 
acquisition decision event or not, it is his job to make sure 
those programs are coming in.
    As I said before, coming before us is interesting; that is 
good. But then what are the actions and outcomes that we want 
and that we codify in an ADM? So it is the director's 
responsibility to tell me how we are progressing on those 
actions, which he does.
    Mrs. Torres. So the next step would be for us to call the 
director of PARM in here and say, what are the action items, 
and why have we not seen the follow-up that we need to see in 
order to ensure that you have meetings----
    Mr. Fulghum. So I----
    Mrs. Torres [continuing]. And that you have actual--you can 
show for something. I don't want meet-and-greet meetings.
    Mr. Fulghum. No.
    Mrs. Torres. You know, we want results.
    Mr. Fulghum. That is right. We can provide, and we do 
provide, the ADMs. Every acquisition decision memorandum that 
we write, we do provide a copy of it to the Congress. We are 
happy to do that. We are also happy to come talk to you about 
the outcomes that we have had and where we are on each one of 
those.
    Mrs. Torres. Thank you.
    Mr. Perry. The Chairman thanks the gentlewoman.
    The Chairman now recognizes the gentleman from Florida, Mr. 
Clawson.
    Mr. Clawson. Thank you all for coming. Thank you for doing 
this hearing, this committee meeting.
    I was in Foreign Affairs, and so what happens is we are 
often double-booked. So I apologize for being here late, but it 
does not indicate a lack of interest.
    I showed up in June of last year and came in on a special 
election. It is kind of--having come from the private sector, 
where we normally try to get as much information as we can 
before we make a decision, it has been an odd change for me to 
be in an environment where we are asked to make decisions and 
there is very little data.
    So we keep coming to these committee meetings, and we get 
real, live, meaningful anecdotes, of which I do not in any way 
criticize, but when it comes to baseline information of any 
sort--capital expenditure information, historical or otherwise; 
cost information; return on investment to the taxpayer--
whichever part of Homeland Security it is--and I am not trying 
to be partisan at all--I just can't get any baseline data.
    So sometimes I am asked, well, will you approve a certain, 
you know, new border investment or something else, and I always 
feel befuddled because, with no data, nothing that demonstrates 
any kind of, you know, adherence in the past, it is hard to 
make a choice. I don't know how much capital expenditures are 
being spent here. I don't know where it goes. We just don't 
know anything. The reports I see from the GAO says there is 
really no baseline.
    So I kind of say to myself, how did we get here, where we 
spend all these millions and billions, don't know where it 
goes, can't measure how we are doing, and no baseline in place? 
Does that make sense?
    When I go see--for example, I went to see Mr. Fugate at 
FEMA. He says he is setting--he never had it before--he is 
setting in the baseline. We believe him; looks like he is doing 
all the right things. But, on a general sense, I would like to 
help in a nonpartisan way, but I don't know how to do that 
without any data, and I don't know how to get it.
    So you all are probably getting better data than we see, 
and I don't know how much of that is because Congress becomes 
partisan. I would just like to be able to get some data so we 
would know whether taxpayers are getting a fair return and 
people are doing a good job. That doesn't seem too complicated. 
No matter who I ask, who have sat in your chair, I have never 
received any data. I am not trying to be critical or criticize; 
I would just like to know where things stand.
    Now, does what I just laid on you, does that seem par for 
the course, or am I missing something obvious here on how to 
get enough data to where we can really do our jobs as kind of 
the board of directors? I will let you all respond to that one 
by one.
    Because, with no data, I can't say who is doing a good job 
and who is not. I am sorry if any of this repeats what has 
already gone on today.
    Ms. Mackin. I guess I would comment, just speaking about 
major acquisition programs. There is a database that the 
Department has that was part of the work we did. We went to 
look at how good the data was. So that database is supposed to 
have cost estimates for all these programs, baseline data, 
schedules, changes to those schedules, all the information that 
you might be talking about.
    We did find inaccuracies. In fact, the data wasn't reliable 
enough for us to really assess. But that was one recommendation 
we made. Again, it goes back to program managers and the 
components. They are supposed to be going in there and entering 
the correct data for their programs and validating it. DHS 
agreed to see why that wasn't happening.
    Mr. Fulghum. So, as she said, it is not the data; it is the 
quality of the data. The data is there. So let me tell you what 
we are doing about it.
    We have talked to each and every chief acquisition 
executive and said what is in the system she is referring to 
needs to be updated monthly and it needs to be accurate. So 
what we are going to do is, each month we are just going to 
start measuring the validity and accuracy of that data.
    Because what she is also referring to is we provide 
Congress a comprehensive acquisition status report every year 
that has all the things she just described in it. The criticism 
in the past is some of that data is not accurate. It is better 
than it was, but more work needs to be done. But we do have a 
comprehensive acquisition report that we provide each year, and 
we provide quarterly status updates.
    Mr. Clawson. Who sets the goals?
    Mr. Fulghum. With regard to?
    Mr. Clawson. With regard to how much improvement on the 
baseline, how much implementation on the baseline.
    Mr. Fulghum. So, one of my jobs is to say how much better 
are we going to get over time. That is one of my jobs, working 
with the component acquisition executives and the program 
managers.
    Mr. Sims. Sir, it is a pleasure to meet you. My name is 
Cedric Sims.
    I would share with you that one of the things that I would 
share with the program staff is that the programs often--the 
way that they began is how they are going to end. So there are 
a lot of complex programs at the Department that had a rocky 
start and probably haven't quite gotten right yet.
    With respect to data, there was a number of systems that 
were implemented to support data collection. Some of those 
programs were on their own; some of them were at headquarters. 
Finding a common way to get that data in one place was a key 
objective of PARM. I believe the GAO report refers to some of 
those systems.
    At some point, realizing the data at the beginning is not 
going to be pretty, and understanding that sometimes there is 
training so people understand and agree the same number means 
the same thing--when we talk about a cost estimate, let's all 
agree to what a cost estimate actually is. Then, from that 
point, improvements can be driven.
    So, from that, certainly, PARM as an organization had 
traditionally helped do the validity and the validation work 
around the data collection, and PARM's role as an independent 
arbiter of that is very critical and continues to need to be 
reinforced.
    Mr. Perry. If the gentleman would yield, it is my 
understanding that the report--there is a report given with 
some of the data or much of the data that you have asked for, 
but, by statute, it goes to Appropriations, who is not always 
or often willing to give to it this committee.
    In the legislation that is being offered, there would be a 
solution set there where we, too, would get the data. So that 
should be helpful to you.
    Mr. Clawson. Right.
    I guess my point is, or one of my points is, data against a 
baseline, against a goal, that has been previously discussed 
then allows folks to be able to make some sort of rough 
judgment on performance and in terms of accountability. If we 
have a baseline in this committee on much of the cost data and 
capital expenditure data of the Department, we haven't seen it. 
Therefore, if you show us progress, it is hard to measure 
progress without having had a baseline.
    When we had the hearing here on capital expenditures, we 
were given a list of capital expenditures from 2010, as I 
recall. I was embarrassed.
    So, as much as you all can put it in a package that the 
board of directors or the committee can understand in a summary 
state and, therefore, be able to make some sort of judgments 
and some sort of conclusions, then we can be supportive on the 
direction of the Department. Does that make sense to you all?
    So on every group that comes in here, I am always urging, 
please give us data in a way that we can draw performance 
conclusions in a clear managerial way, just like the folks that 
are running the departments.
    Massive data that is uncollated or unconnected in systems 
that aren't integrated and in managerial cost data that is not 
defined across the organization probably won't--it just swamps 
me, you know, and probably won't--I think, Dr. Sims, you 
understand what I am saying here.
    So if you are not integrated yet inside enough to where you 
can come up with common data for yourselves to manage the 
organization, it will be impossible for us to do so from this 
side. Then we just get into partisan criticizing based on 
anecdotes as opposed to real data.
    I don't mean to sound, you know, like I am going on and on 
here, but, Dr. Sims and both of you all, does that make sense? 
Where are we on that? How close would we be in order to come up 
with some sort of managerial summary?
    I am sorry if I am taking too long.
    Mr. Perry. We are going to move on. We are going to do a 
second round here just to make sure we get all the questions--
give an opportunity for all questions to be asked.
    Mr. Sims, you are the former executive director, as stated, 
of PARM. A couple things: I am just wondering what you see the 
challenge is. Is it more poor oversight by DHS? Is it more--or 
would you characterize it as poor program management from a 
component and systematic approach, if you had to choose?
    Mr. Sims. Well, you give me a difficult set of choices 
there.
    Mr. Perry. Yeah. We have them every day here.
    Mr. Sims. Indeed.
    I apologize, but I wouldn't characterize it as either, if 
you don't mind, sir.
    I would say that what we have is a circumstance where, when 
a program is put under the hot light of an acquisition review, 
things get right. They really do. There is no question. I think 
that that has been a very effective process.
    But DHS has a very vast enterprise, and so scaleability is 
important. Baselines are absolutely the first thing that must 
be established for programs. If we don't have a baseline, if we 
don't have anything to evaluate, we have no way to measure 
progress.
    It would be a welcome thing, I think, at some point, to see 
a number of baselines coming and being reported as being 
rebaselined as programs mature their processes and really 
understand what those baselines should be and how the program 
can ultimately deliver on the performance expected.
    We have a phenomenal program management corps at the 
Department of Homeland Security. I would recognize that there 
are several outstanding program executives at DHS, but there 
are also some areas for improvement. I think, often, when you 
see a successful program, you can point to a very successful 
program executive running that program.
    Mr. Perry. Let me continue with you. This is a little bit 
of an uncomfortable question, but I think it is important to 
determine, if we can, some of the facts here or at least your 
perception. Because there is potentially a trust issue, and, of 
course, the public may see this differently than maybe what 
might be alleged.
    But there was the wife of a former DHS inspector general, 
Mr. Charles Edwards, who I am not familiar, so--who faced 
serious--Mr. Edwards apparently faced serious allegations of a 
lack of independence and nepotism. Apparently, Ms. Edwards was 
one of the employees at PARM.
    Can you flesh that out for us at all? Can you tell us, is 
that normal? Is there a policy--and it may be one thing to be 
two members of the same family in the organization, but when 
one is the inspector general, you can see the perception, if 
not the reality, that it creates.
    Is there anything that you can impart to us to kind of 
allay our fears that this was just purely nepotism, that there 
might have been undue influence, et cetera?
    Mr. Sims. Yes, sir. I would be happy to. I don't find that 
uncomfortable at all.
    We have the benefit of being able to scale PARM fairly 
significantly in terms of staff and put out some job 
announcements for opportunities. As I recall, I believe her 
name was Madhuri Edwards. She was selected as one of the 
individuals for PARM.
    At that time--and I just want to be very clear--I was the 
executive director of the office. I had a number of staff that 
were responsible for staffing those positions. I hired my 
deputy directors and told them to run with it from there. Her 
degree of candidacy and the degree to which she was the 
appropriate selectee for a role, I can only believe that the 
process worked as it should.
    She was not an employee of mine. I had departed PARM by the 
time she actually reported to work. So I can't speak to her 
performance thereafter.
    Mr. Perry. Thank you. I appreciate it.
    With that, I will yield to the Ranking Member, Mrs. Watson 
Coleman, for questions.
    Mrs. Watson Coleman. Thank you, Mr. Chairman.
    Dr. Sims, I want to talk to you a little bit because you 
have been inside and now you are outside, and I would like to 
just kind of get your perspective on a couple of things.
    What impact do you think that the Secretary's One DHS 
initiative is having on increasing morale among the acquisition 
personnel and on producing better outcomes regarding program 
management?
    Mr. Sims. Madam, thank you again for the opportunity to 
appear before you.
    I think that that is yet to be seen. I think the 
opportunity to improve morale is there. I think that most 
employees at the Department--I am just reflecting upon my 
time--had a good opportunity to mentor a number of employees 
that were seeking opportunities to come into the Executive 
Service at some point in their career. I found that most were 
seeking authenticity, consistency, clear messaging, and so 
forth. Certainly, I can see out of the message, the unity 
message from Secretary Johnson, very, very strong intent there 
to drive that kind of consistency and authenticity in message.
    Also, too, DHS has a phenomenal mission, and every time we 
had an employee that was detailed from another component, they 
found that they were enriched by that opportunity. I think the 
Unity of Effort will likely open avenues for components to 
share the best and the brightest across the organization and, 
quite frankly, utilize resources where they are best needed at 
the Department.
    So I see it as a positive opportunity, but, you know, the 
time for that to actually be shown as effective, I think we 
will still see that.
    Mrs. Watson Coleman. Yeah.
    Whenever we hear from someone, when we have a discussion 
with the Department, we hear of this great effort, this Unity 
of Effort that Secretary Johnson has advanced, and it is always 
spoken of in a very encouraging and supportive way. So we look 
forward to the fruit that it will bear, because it does seem as 
if we are moving in the right direction in a number of areas.
    That it is at a department with such diversity and just so 
many things happening at one time is amazing. We will never be 
perfect. I mean, as long as we are human beings, we will never 
be perfect. So we need our systems and our accountability there 
so that we don't continue to make the same mistakes over and 
over and over again.
    To that extent, what additional steps do you think that the 
under secretary for management and executive director of PARM 
should take to ensure that the acquisition personnel have the 
training and tools to implement effective baseline 
measurements? Do you think that there is any need for 
additional policy authority or legal authority? If so, what 
would that be?
    Dr. Sims.
    Mr. Sims. Well, madam, I had an opportunity to take a look 
at the bill from the prior Congress, and I believe that that 
would be a fantastic product to support institutionalization of 
some of the best practices at the Department.
    I do believe that, within the Department, that policies 
that are in place are very robust. I think more of an 
understanding of how to actually apply them in different 
contexts will continue to enhance the application of that, so, 
you know, a guidebook that says, this is how you do this. DHS 
has provided one in the past regarding this. As we continue to 
refine the kind of capabilities that are delivered, we need to 
continue to provide that guidance to the programs--a playbook, 
a roadmap, some way that kind-of helps everybody understand 
what this is about.
    Finally, I am encouraged and heard recently that there are 
some efforts to rationalize roles and responsibilities. 
Unfortunately, we see some things as black-and-white, and they 
never were intended to be.
    I note there are several efforts on-going to strengthen the 
role of the CIO at the Department. I think that that should be 
in direct support of efforts to strengthen acquisition 
management at the Department. Those things don't need to be in 
conflict. Again, I benefited from a prior career and working 
very closely with the DHS CIO and would hope that that will 
continue at the Department.
    Mrs. Watson Coleman. Both you and Mr. Fulghum have both 
mentioned the issue of maturation and institutionalization of 
the changes that are taking place. I agree that we do need to 
be mindful of that also.
    Mr. Fulghum, you referred to having issued an ADM recently 
with regard to the memo that we received. I am just wondering, 
is there a time frame for, sort-of, the, you know, execution of 
the elements that are identified? What are we looking at in 
terms of a response?
    Mr. Fulghum. So we have asked for the program offices to 
come back by the 29th of May to give us, again, that 5-year 
cost assessment. Then we well--as well as, again, that program 
end date.
    Then in the next current budget cycle, which is the fiscal 
year 2017 budget cycle, we will take a look at those 42 
programs in terms of where they are in their life cycle against 
that cost estimate and make the appropriate budgetary 
adjustments.
    Mrs. Watson Coleman. Thank you.
    Thank you very much, Mr. Chairman.
    Mr. Perry. The Chairman thanks the Ranking Member.
    We are expecting votes anytime, but, in the mean time, we 
will recognize Mr. Clawson again, the gentleman from Florida.
    Mr. Clawson. Mr. Fulghum, do we have integrated systems in 
IT purchasing, HR, financial, across the different areas of the 
organization?
    Mr. Fulghum. No, sir.
    Mr. Clawson. Is there a program under way to do that, or is 
the thinking to leave it decentralized?
    Mr. Fulghum. No. We are looking on our financial systems--
for example, we are well under way with a modernization effort, 
a shared services solution, wherein we go look at the current 
state of the market, and then we--my words--ride on those 
systems. So we have TSA, Coast Guard, and DNDO scheduled to 
begin that process at the end of this fiscal year, and then we 
will move each one in a successive year.
    Right now, we have six core financial systems in the 
Department, and the goal is to reduce those and go to a shared 
service solution.
    Mr. Clawson. Yeah. That is a good idea. How long will that 
take?
    Mr. Fulghum. Given our current budget, we are scheduled to 
be done in 2020. What I would like to do is see us accelerate 
that, but it will be budget-dependent.
    Mr. Clawson. Right now what you do is you integrate the 
data at headquarters level; is that right?
    Mr. Fulghum. So, from a financial systems perspective, we 
have some business intelligence that takes those disparate 
systems and integrates the data. But it is not ideal.
    Mr. Clawson. Do you have integrated purchasing?
    Mr. Fulghum. We do not have integrated purchasing 
integration with our financial systems across the board. We 
have some but not a complete integration in the systems, which 
is, again, a fundamental requirement of our financial systems 
modernization effort. They have to provide procurement 
integration.
    Mr. Clawson. So do we have a way to measure how good we buy 
things or not? Or you let each entity do that now.
    Mr. Fulghum. So we do have metrics on how well we are 
performing in buying good and services. Our procurement officer 
has that. Can we be better? Yes. But we do have metrics on how 
well we are doing.
    Mr. Clawson. Okay.
    Then the last question: How long before--you are not going 
to have an integrated system until 2020 unless you get more 
money to go quicker. I understand that. So, in the mean time, 
you integrate at a middle level or an upper level--I understand 
that--because management has to run the operation. I got all 
that.
    Even if you measure on a local basis, how long before all 
of your different entities or organizations have baselines? 
What is the goal so that everybody has the measurable baselines 
that all of you all referred to earlier?
    Mr. Fulghum. So, if we are talking on our acquisition 
programs--so we have six programs that she referenced that will 
have acquisition program baselines by the end of this year, 
from which to measure them going forward.
    Mr. Clawson. Sorry if I missed that when I was gone.
    Mr. Fulghum. I would note that, several years ago, we had 
42 programs. We are down to six. We will get those six done 
this year.
    In terms of cost and schedule, particularly cost, we have 
10 programs left that don't have a good cost estimate. We will 
have seven of those done by this year, the remainder done in 
early 2016.
    Mr. Clawson. Your IT system will have a managerial cost 
function that you can spread across each one of the 
acquisitions, right?
    Mr. Fulghum. So, as we move towards a modernized solution, 
we will have a common account structure, which is another 
challenge for DHS. We came from lots of different agencies. 
That common account structure will give you what it is you are 
looking for.
    Mr. Clawson. Okay.
    So the final word I have and the most important: It feels 
to me like you are dealing in 1990 or 1985. So, good luck. You 
have a lot of work to do. Anything we can do--I mean, you know, 
I am being totally serious here. You have a rough way to go 
ahead of you. You have a lot of work to do. So you are 
integrating while you are improving performance at the same 
time, and that is not easy in any environment.
    Mr. Fulghum. Yes, sir.
    Mr. Clawson. So anything that we can do and I can do to 
support, the door is open and we are ready to do so. Any 
information that would be helpful so that we could see how you 
are doing, that is also appreciated.
    Mr. Fulghum. Yes, sir.
    Mr. Clawson. Thank you for all your work, because I know 
this is a tough job.
    Mr. Fulghum. Yes, sir.
    Mr. Perry. The Chairman thanks the gentleman.
    Just one final note before we leave to vote and adjourn the 
meeting. It is our understanding that there has been emphasis 
put on joint requirements. I think the Department has about, 
roughly, 220,000 employees, and, for the joint requirements, 6 
staff members have been designated or are designated.
    So if, Mr. Fulghum, if you can verify that and tell us that 
that is appropriate, and then if Ms. Mackin can also validate 
that, or if you have concerns about that, that would be great.
    Mr. Fulghum. Yeah, I believe we do have six on board today. 
I believe that is accurate.
    Mr. Perry. That is the appropriate number?
    Mr. Fulghum. I think we are still looking to expand that 
capability. We are leveraging, as I said in my opening 
statement, five portfolio teams as an underpinning, but I 
believe we are going to have to expand that, not only at the 
headquarters but also within the components, because that is 
where the requirements come from.
    Mr. Perry. Ms. Mackin, any thoughts?
    Ms. Mackin. Yeah, I don't know what the right number is. I 
think it is really important, though, to have an outcome. If 
that means getting more people on board at the components, I 
think that that is what will need to happen. So we will be 
keeping an eye on that and getting briefed on how the JRC is 
doing.
    Mr. Perry. Okay. Thank you very much.
    I thank the witnesses for their valuable testimony and the 
Members for their questions.
    The Members of the subcommittee may have some additional 
questions for the witnesses, and we will ask you to respond to 
these in writing.
    Pursuant to committee rule 7(e), the hearing record will be 
open for 10 days.
    Without objection, the subcommittee stands adjourned.
    [Whereupon, at 3:56 p.m., the subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              

   Question From Ranking Member Bennie G. Thompson for Michele Mackin
    Question. Ms. Mackin, throughout my tenure on this committee, I 
have asked the Government Accountability Office to look into the DHS 
acquisition process. Each report GAO does yields troublesome 
information. How can DHS ``fix'' the acquisition process? What is the 
realistic time line for ``fixing'' the process? Where else you see the 
need for Congressional intervention?
    Answer. DHS has established an acquisition policy that is generally 
sound and reflects key program management practices, but due to 
shortfalls in executing the policy, we have highlighted DHS acquisition 
management issues in our high-risk updates for several years. Perhaps 
most troubling, DHS has allocated more than $5 billion to programs that 
do not have baselines approved by DHS leadership even though the 
baselines were required by DHS policy. A program's baseline is the 
agreement between the program manager, component head, and acquisition 
decision authority--often DHS's deputy secretary or under secretary for 
management--establishing how systems will perform, when they will be 
delivered, and what they will cost. Without an approved baseline, there 
is little assurance that tax dollars are being used in an effective and 
appropriate manner, which is particularly problematic since we 
previously found DHS's portfolio of acquisition programs is not 
affordable. Additionally, it is difficult to objectively determine 
whether programs without approved baselines are performing well or 
poorly; whether programs should be case studies for good practices, or 
whether DHS managers should be held accountable for bad outcomes. For 
these reasons, DHS must do a better job of implementing its acquisition 
policy to improve acquisition outcomes. Congress could potentially 
encourage DHS to do so by codifying some of the key program management 
practices that DHS's acquisition policy currently reflects, such as in 
the DHS acquisition reform bill (HR 4228) that passed the House last 
year. More consistent implementation of the policy would be a good step 
towards improving acquisition management at DHS, but it will likely 
take years to fully resolve the enduring and prevalent challenges 
affecting acquisition programs Department-wide, including staffing, 
funding, and requirements issues.
      Questions From Honorable Cedric Richmond for Michele Mackin
    Question 1. GAO has reported in the latest DHS Quick Look that out 
of 22 major DHS acquisition programs assessed, the cost estimates for 
seven have increased by $9.7 billion, or 18 percent. How does this 
escalation in costs prevent DHS from executing its acquisition programs 
as intended?
    Answer. When programs cost more than DHS leadership has approved, 
they effectively decrease DHS's buying power and reduce the amount of 
capability the Department will be able to afford in the future. This is 
an important issue because half of the programs we reviewed face 
significant funding gaps, meaning they would benefit from additional 
funding. For example, with the $9.7 billion lost to cost growth, the 
Department could have fielded three times as many border inspection 
systems as currently planned. These systems help identify weapons of 
mass destruction, contraband, and illegal aliens being smuggled into 
the country. This is only one example of a program that faces funding 
shortfalls, and we identified several others responsible for supporting 
border surveillance, cybersecurity, search and rescue, law enforcement, 
and other missions.
    Question 2. GAO's March 2015 report indicated that DHS lacks 
adequate information related to the operations and maintenance costs 
for 42 acquisitions programs. What are the ramifications of this 
information gap?
    Answer. In May 2013, DHS waived the acquisition documentation 
requirements for 42 programs in sustainment, meaning that these 
programs have been developed, delivered, and are currently being 
operated and maintained. This phase of a program can account for more 
than 80 percent of its life-cycle costs. Most troubling, we found that 
only 1 of the 42 waived programs has a Department-approved life-cycle 
cost estimate, which would include the operation and maintenance costs. 
DHS lacks insight into the programs' performance and execution of their 
funding, which could potentially be billions of dollars. Without 
knowing the operations and maintenance cost estimates for these 
programs, DHS will not be able to fully plan for and manage funding 
requirements across its major acquisition programs.
        Questions From Honorable Norma Torres for Michele Mackin
    Question 1a. Please discuss the Department's rationale for testing 
some of its programs and deploying others without testing them.
    Answer. DHS policy establishes that programs generally should be 
operationally tested before deploying capabilities. The primary purpose 
of test and evaluation is to provide timely, accurate information to 
managers, decision makers, and other stakeholders to reduce 
programmatic, financial, schedule, and performance risk. However, we 
found that DHS leadership allowed four programs to deploy capability 
without operational testing for various reasons: The Non-Intrusive 
Inspection (NII) Systems Program, the Next Generation Network--Priority 
Service (NGN-PS) program, and the U.S. Coast Guard's (USCG) HC-130H/J 
and Command, Control, Communications, Computers, Intelligence, 
Surveillance, and Reconnaissance (C4ISR) programs.
    DHS's Director of Operational Test and Evaluation (DOT&E) 
determined that the NII program does adequate acceptance testing on 
commercial-off-the-shelf systems, and that it does not need operational 
testing until the next generation of NII capabilities is pursued. 
Similarly, DOT&E established that the NGN-PS program could use 
acceptance testing, among other things, to determine whether service 
providers are meeting requirements. As for the HC-130H/J program, the 
U.S. Air Force previously conducted operational testing on the HC-130J 
aircraft, and DOT&E determined that it did not need additional 
operational testing. In the case of the C4ISR program, DHS leadership 
approved USCG's plan to deploy capability without operational testing. 
USCG officials have decided to test the C4ISR system in conjunction 
with aircraft and vessels, rather than on a stand-alone basis, to save 
money and avoid duplication. However, we did identify that the USCG 
C4ISR system's key performance parameters were not specifically 
evaluated during past aircraft and vessel tests, and in 2014 we 
recommended USCG fully integrate C4ISR assessments into other assets' 
test plans or test the C4ISR program independently.\1\ USCG concurred 
with this recommendation, and stated it would implement it in fiscal 
year 2015.
---------------------------------------------------------------------------
    \1\ GAO, Coast Guard Acquisitions: Better Information on 
Performance and Funding Needed to Address Shortfalls, GAO-14-450, 
(Washington, DC: June 5, 2014).
---------------------------------------------------------------------------
    Question 1b. At what juncture is approval required from the 
components' acquisition executives, the Acquisition Review Boards and 
senior leadership regarding the operational testing of programs before 
they are deployed?
    Answer. DHS acquisition policy establishes that a major acquisition 
program's decision authority, which is supported by the Acquisition 
Review Board, shall review the program at a series of five 
predetermined acquisition decision events to assess whether the major 
program is ready to proceed through the acquisition life-cycle phases. 
One of these events is designated Acquisition Decision Event (ADE) 2A, 
and DHS policy establishes that the acquisition decision authority 
should approve the program's baseline at that point. This baseline 
should establish the program's overarching schedule, including its 
operational test events, if any. Subsequently, DOT&E should approve the 
program's Test and Evaluation Master Plan, which describes the 
developmental and operational testing needed to determine technical 
performance, limitations, and operational effectiveness and 
suitability. After the program's operational testing, but prior to ADE 
3, DOT&E provides the acquisition decision authority a letter assessing 
the operational test and the associated evaluation. This letter is 
intended to help the acquisition decision authority determine whether 
the program is ready to deploy capability at ADE 3. These are key 
points at which DHS leadership should approve a program's operational 
testing.
          Questions From Chairman Scott Perry for Chip Fulghum
    Question 1. The Deputies Management Action Group, known as the DMAG 
has a crucial role to play in ensuring the Department runs effectively 
and efficiently. This is a very important group (one step below the 
Department's Senior Leader's Council) and it is involved in major 
decisions including the development of the Department's budget and the 
joint requirements process.
    What policies and procedures currently govern the DMAG and how were 
they established?
    Answer. Response was not received at the time of publication.
    Question 2. Are these policies formally outlined and established in 
a DHS policy memorandum? If so, please provide a copy of this 
memorandum to the committee.
    Answer. Response was not received at the time of publication.
    Question 3. What is the process for amending these policies and 
procedures?
    Answer. Response was not received at the time of publication.
    Question 4. As chair of the DMAG, does the deputy secretary have 
any special privileges that allow him to set the DMAG's agenda and/or 
the way it operates?
    Answer. Response was not received at the time of publication.
   Questions From Ranking Member Bennie G. Thompson for Chip Fulghum
    Question 1. In fiscal year 2014, DHS spent $10.7 billion--a bit 
more than one-sixth of its total budget authority--on acquisition of 
systems with life-cycle costs estimated at $300 million or more. 
Throughout my tenure on this committee, I have seen the Department 
throw money at various companies and systems that do not yield results; 
thus, wasting taxpayer dollars. However, I know that there are some 
companies that have capabilities and still cannot seem to get in the 
door at DHS. When the Department makes the decision to spend this type 
of money, how much consideration is given to small and minority 
businesses?
    Answer. Response was not received at the time of publication.
    Question 2. According to the Government Accountability Office GAO 
could not even assess nearly a quarter of the major DHS acquisitions 
assessed in the latest DHS Quick Look, because there has never been a 
successful completion of all of the reviews required by the 
Department's own acquisition policies. As you prepare to transition out 
of the role as acting under secretary for management, how are you 
planning on addressing this issue? Have you had a meeting with the 
Secretary about this? Do you plan on having a meeting with the incoming 
under secretary?
    Answer. Response was not received at the time of publication.
       Questions From Honorable Cedric Richmond for Chip Fulghum
    Question 1. According to GAO's latest DHS Quick Look, 14 of 22 
major DHS acquisitions assessed have experienced schedule slips of up 
to 3 years on average. What is the Department doing to ensure that 
programs remain on track to deliver capabilities to end-users?
    Answer. Response was not received at the time of publication.
    Question 2. Apparently GAO has identified some gaps in information 
that DHS is providing to Congress regarding its acquisitions programs. 
How is DHS responding so that Congress will be given accurate and 
current information going forward?
    Answer. Response was not received at the time of publication.
      Questions From Honorable Cedric Richmond for Cedric J. Sims
    Question 1. In your testimony, you refer to the implementation of 
the Decision Support Tool, or DST as a mechanism to help track the 
performance of acquisitions programs. Since its inception, how 
effective has the DST proven to be in detecting potential issues with 
acquisitions programs?
    Answer. Response was not received at the time of publication.
    Question 2. In your experience as former executive director of the 
Program Accountability and Risk Management Office, how extensive is the 
training provided to personnel regarding the use of the Decision 
Support Tool and other metrics used to assess acquisitions programs?
    Answer. Response was not received at the time of publication.
    Question 3. What, if any adjustments or changes would you make to 
the Program Accountability and Risk Management Office now that you have 
some distance from the Department?
    Answer. Response was not received at the time of publication.
    Question From Honorable Bonnie Watson Coleman for Cedric J. Sims
    Question. As former executive director of the Office of Program 
Accountability and Risk Management, what factors would you say have 
contributed to the irregularities in data found by GAO in the Next 
Generation Periodic Reporting System, or nPRS which caused Congress to 
receive incomplete information in the Department's Comprehensive 
Acquisition Status Report?
    Answer. Response was not received at the time of publication.
      Questions From Honorable Norma J. Torres for Cedric J. Sims
    Question 1a. What would you characterize as your greatest successes 
during your tenure as executive director of the Office of Program 
Accountability and Risk Management, or PARM?
    From your perspective, how has PARM made progress in overseeing 
major acquisitions programs at DHS?
    Answer. Response was not received at the time of publication.
    Question 1b. In what ways has management of the Department's 
acquisitions personnel changed since PARM's creation?
    Answer. Response was not received at the time of publication.

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