Transportation Security Administration: High-Level Attention
Needed to Strengthen Acquisition Function (28-MAY-04,
GAO-04-544).
The Transportation Security Administration (TSA), within the
Department of Homeland Security, was established to secure the
nation's transportation systems, beginning with commercial
airports. To meet its mission, TSA has awarded over $8.5 billion
in contracts since its creation in 2001. Spending on contracts
accounted for 48 percent of TSA's fiscal year 2003 budget.
Because of TSA's reliance on contracts to carry out its mission,
its acquisition infrastructure-- including oversight, policies
and processes, acquisition workforce, and information about its
acquisitions--is critical. GAO was asked to review TSA's
acquisition infrastructure to assess how well TSA is positioned
to carry out its acquisition function.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-04-544
ACCNO: A10218
TITLE: Transportation Security Administration: High-Level
Attention Needed to Strengthen Acquisition Function
DATE: 05/28/2004
SUBJECT: Airport security
Airports
Baggage (personal effects)
Federal procurement
Human resources utilization
Internal controls
Labor force
Performance measures
Personnel recruiting
Policy evaluation
Procurement policy
Procurement practices
Transportation safety
Homeland security
Human capital
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-04-544
United States General Accounting Office
GAO Report to Congressional Requesters
May 2004
TRANSPORTATION SECURITY ADMINISTRATION
High-Level Attention
Needed to Strengthen
Acquisition Function
a
GAO-04-544
Highlights of GAO-04-544, a report to congressional requesters
The Transportation Security Administration (TSA), within the Department of
Homeland Security, was established to secure the nation's transportation
systems, beginning with commercial airports. To meet its mission, TSA has
awarded over $8.5 billion in contracts since its creation in 2001.
Spending on contracts accounted for 48 percent of TSA's fiscal year 2003
budget.
Because of TSA's reliance on contracts to carry out its mission, its
acquisition infrastructure- including oversight, policies and processes,
acquisition workforce, and information about its acquisitions-is critical.
GAO was asked to review TSA's acquisition infrastructure to assess how
well TSA is positioned to carry out its acquisition function.
GAO is recommending that the Secretary of the Department of Homeland
Security direct the Administrator of TSA to elevate the Office of
Acquisition, develop adequate internal controls and performance measures
to ensure effective policies and processes, and assess its current
acquisition workforce and proposed knowledge management systems.
In commenting on a draft of this report, the Department of Homeland
Security generally concurred with this report and its recommendations and
provided additional information.
www.gao.gov/cgi-bin/getrpt?GAO-04-544.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact William T. Woods, (202)
512-8214, [email protected].
May 2004
TRANSPORTATION SECURITY ADMINISTRATION
High-Level Attention Needed to Strengthen Acquisition Function
Since its inception, TSA has been focused on meeting an urgent mandate to
deploy more than 55,000 airport passenger and baggage screening personnel
and equipment to secure the nation's airways. To do so, it created basic
organizational and acquisition infrastructures. However, our review of
TSA's acquisition function and inspector general reports identified a
number of challenges in each of the four areas we assessed.
o Organizational alignment and leadership: TSA's Office of Acquisition
is at an organizational level too low to oversee the acquisition process,
coordinate acquisition activities, and enforce acquisition policies
effectively. The position of the office hinders its ability to help ensure
that TSA follows acquisition processes that enable the agency to get the
best value on goods and services.
o Policies and processes: TSA's acquisition policies and processes
emphasize personal accountability, good judgment, justifiable business
decisions, and integrated acquisition teams. However, effective
implementation of TSA's policies and processes has been hindered by
several factors. For example, TSA has not effectively communicated its
acquisition policies throughout the agency. TSA also lacks internal
controls to identify and address implementation issues and performance
measures to determine whether acquisition policies are achieving desired
results.
o Human capital: TSA risks an imbalance in the size and capabilities of
its acquisition workforce that could diminish the performance of the
acquisition function throughout the agency. TSA's Office of Acquisition
worked closely with the Department of Homeland Security to develop and
begin implementing an acquisition workforce plan. However, TSA's Human
Resource Office, which is responsible for recruiting and hiring the
acquisition workforce agencywide, did not participate in developing the
acquisition workforce plan. Without input from the Human Resources Office,
it is not clear that the workforce plan can be effectively implemented
throughout the agency. In addition, the Office of Acquisition reports that
it is having difficulty attracting, developing, and retaining a workforce
with the acquisition knowledge and skills required to accomplish TSA's
mission.
o Knowledge and information management: While TSA is participating in
the Department of Homeland Security's efforts to develop requirements for
an enterprisewide solution, TSA does not currently have the strategic
information needed to support effective acquisition management decisions.
To manage on a day-to-day basis, program and acquisition managers are
relying on data derived from informal, ad-hoc systems. TSA is in the
process of adopting the Coast Guard's procurement and financial systems as
interim solutions until the Department of Homeland Security implements a
departmentwide system. However, near-term improvement in acquisition
outcomes will be difficult because TSA does not have the data needed to
analyze and improve its acquisition processes.
Contents
Letter
Assessment Summary
Background
TSA's Organizational Alignment and Leadership
TSA's Acquisition Policies and Processes
TSA's Human Capital Management
TSA's Knowledge and Information Management
Conclusions
Recommendations for Executive Action
Agency Comments and Our Evaluation
1
3 5 7 10 15 19 22 23 23
Appendix I Scope and Methodology
Appendix II Key Activities, Roles, and Responsibilities of Key Personnel
Involved in TSA's Acquisition Process
Appendix III Inspector General Testimony and Reports Reviewed
Appendix IV Contracts Reviewed
Appendix V Comments from the Department of Homeland Security
Tables
Table 1: Key Personnel Involved in TSA's Acquisition Function 29 Table 2:
Department of Transportation Audit Reports on Contracting Issues at TSA 31
Table 3: Department of Homeland Security Audit Reports Reviewed That
Include Contracting Issues at TSA 31
Figures
Figure 1: Timeline of TSA's History 5
Figure 2: Organization of TSA 9
Figure 3: Key Activities in the Acquisition Process 29
Abbreviations
FAA Federal Aviation Administration
FAR Federal Acquisition Regulation
TSA Transportation Security Administration
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.
United States General Accounting Office Washington, DC 20548
May 28, 2004
The Honorable Tom Davis
Chairman
The Honorable Henry A. Waxman
Ranking Minority Member
Committee on Government Reform
House of Representatives
The Honorable Don Young
Chairman
The Honorable James L. Oberstar
Ranking Minority Member
Committee on Transportation and Infrastructure
House of Representatives
The Honorable Martin Olav Sabo
Ranking Minority Member
Subcommittee on Homeland Security
Committee on Appropriations
House of Representatives
Since its creation in November 2001, the Transportation Security
Administration (TSA) has awarded more than $8.5 billion in contracts for
goods and services used to secure the nation's transportation systems.1
TSA currently has contracts to recruit, hire, train, and outfit passenger
and baggage screeners, as well as contracts to develop and manufacture
screening equipment and to provide the information technology needed
to manage its day-to-day operations. TSA built its organization while
simultaneously concentrating its resources on meeting tight deadlines for
deploying more than 55,000 federal screeners to all of the nation's
commercial airports.
Because of TSA's significant reliance on contracts to carry out its
mission,
its acquisition infrastructure-including oversight mechanisms, policies
and processes, acquisition workforce, and information systems-will in
large part determine whether the agency succeeds in its mission. However,
1 This figure reflects contract awards through fiscal year 2003.
the Inspectors General of the Departments of Transportation and Homeland
Security-the two executive departments TSA has been a part of since it was
created- have repeatedly criticized the agency's management and oversight
of its contracts.2 As a result, you asked us to review TSA's acquisition
infrastructure to assess how well TSA is positioned to carry out its
acquisition function.
Based on our previous reviews of acquisition management issues
governmentwide, at individual agencies, and at leading private sector
firms, we have identified four broad areas that we believe are critical to
the success of an acquisition organization:
o Organizational alignment and leadership: The appropriate placement of
the acquisition function within an agency can facilitate efficient and
effective management of acquisition activities. In addition, agency
leaders need to create a climate that fosters good acquisition practices.
o Policies and processes: To facilitate effective planning, award,
administration, and oversight of contracts, and to help ensure the best
value on goods and services, the agency must have clear, consistent, and
enforceable policies and processes. Internal controls and performance
measures help to ensure that policies and processes are implemented and
have the desired outcomes.
o Human capital: Strategic workforce planning-including workforce and
skills assessments and succession planning-is key to recruiting, training,
and rewarding staff and ensuring the acquisition workforce has the skills
needed to carry out their responsibilities effectively.
o Knowledge and information management: To inform strategic decisions
aimed at reducing costs, improving service levels, measuring compliance,
and managing providers, the agency must have knowledge and information
systems that can produce credible, reliable, and timely data.
We assessed TSA's acquisition infrastructure against what our previous
work has shown to be best practices in these four areas. To do so, we
reviewed agency directives, memorandums, and other documentation;
interviewed agency officials; and analyzed agency systems and processes.
To gain further insight into how TSA's acquisition system is functioning,
we also reviewed 21 judgmentally selected contract files. For more on our
scope and methodology, see appendix I.
2 See appendix III for a list of Inspector General reports on TSA
acquisitions.
Assessment Summary
We conducted our review from July 2003 through March 2004 in accordance
with generally accepted government auditing standards.
Since its inception, TSA has been focused on meeting an urgent mandate3 to
deploy more than 55,000 airport passenger and baggage screening personnel
and equipment to secure the nation's airways. To do so, it created basic
organizational and acquisition infrastructures. To date, however, TSA has
not developed an acquisition infrastructure that facilitates successful
management and execution of acquisition activities, helps ensure that the
agency acquires quality goods and services at reasonable prices, and
supports informed decisions about acquisition strategy. Specifically, our
review of TSA's acquisition function and inspector general reports
identified a number of challenges in each of the four areas we assessed.
o Organizational alignment and leadership: TSA's Office of Acquisition
is at an organizational level too low to oversee the acquisition process,
coordinate acquisition activities, and enforce acquisition policies
effectively. The position of the office hinders its ability to help ensure
that TSA follows the acquisition processes that enable the agency to get
the best value on goods and services. Senior acquisition officials told us
that the Office of Acquisition is not appropriately placed within TSA;
however, TSA has not elevated the office to a position that would enable
it to coordinate agencywide acquisition activities or enforce acquisition
policies.
o Policies and processes: Because TSA's acquisition policies and
processes emphasize personal accountability, good judgment, justifiable
business decisions, and integrated acquisition teams, effective
implementation of TSA's policies and processes depends on clear
communication, measures to evaluate performance, and incentives to reward
good acquisition practices. Effective implementation of TSA's policies and
processes has been hindered, however, by several factors: (1) TSA has not
effectively communicated its acquisition policies throughout the agency;
(2) TSA
3 The Aviation and Transportation Security Act (Pub. L. No. 107-71, Nov.
19, 2001) mandated that the Under Secretary of Transportation for Security
(1) deploy at all airports in the United States where screening is
required a sufficient number of personnel to conduct screening of all
passengers and property no later than 1 year from enactment of the act,
and (2) ensure that airports have sufficient explosive detection systems
(or alternative means) to screen all checked baggage no later than
December 31, 2002. The Homeland Security Act of 2002 (Pub. L. No. 107-296)
authorized an extension of the deadline for explosive detection systems in
certain circumstances until December 31, 2003.
lacks internal controls to identify and address implementation issues and
performance measures to determine whether TSA's acquisition policies
achieve desired outcomes; and (3) TSA's deadline-driven culture fails to
reinforce the importance of complying with policies.
o Human capital: TSA risks an imbalance in the size and capabilities of
its acquisition workforce that could diminish the performance of the
acquisition function throughout the agency. TSA's Office of Acquisition
worked closely with the Department of Homeland Security to develop and
begin implementing an acquisition workforce plan. However, TSA's Human
Resource Office, which is responsible for recruiting and hiring the
acquisition workforce agencywide, did not participate in developing the
acquisition workforce plan. Without input from the Human Resources Office,
it is not clear that the workforce plan can be effectively implemented
throughout the agency. In addition, the Office of Acquisition reports that
it is having difficulty attracting, developing, and retaining a workforce
with the acquisition knowledge and skills required to accomplish TSA's
mission.
o Knowledge and information management: While TSA is participating in
the Department of Homeland Security's efforts to develop functional
requirements for an enterprisewide solution that supports the department's
resource management functions-including procurement and finance-TSA does
not currently have the strategic information needed to support effective
acquisition management decisions. To manage on a day-to-day basis, program
and acquisition managers are relying on data derived from informal, ad hoc
systems-which are often out-of-date, incomplete, inaccurate, or otherwise
unreliable. TSA is in the process of adopting the Coast Guard's
procurement and financial systems as interim solutions until the
Department of Homeland Security implements departmentwide systems.
However, near-term improvements to TSA's acquisition outcomes will be
difficult until TSA has critical financial and procurement information
systems that allow decision makers to track spending, manage budgets, and
collect detailed data on goods and services, suppliers, and spending
patterns.
We are making four recommendations to the Secretary of Homeland Security
to help improve TSA's acquisition capabilities by elevating the placement
of TSA's Office of Acquisition, developing adequate internal controls and
performance measures, addressing the needs of the acquisition workforce,
and assessing proposed knowledge management systems. In written comments
on a draft of this report, the Department of Homeland Security generally
concurred with our report and recommendations. They also provided
additional information about various initiatives related to our
recommendations.
Background
Two months after the September 11, 2001, terrorist attacks, the President
signed the Aviation and Transportation Security Act, establishing TSA as a
new administration within the Department of Transportation responsible for
securing the nation's transportation systems.4 In February 2002, TSA
assumed responsibility for aviation screening, and by November 2002, the
agency had deployed a federal security screener workforce in the nation's
429 commercial airports. In March 2003, TSA, along with 21 other agencies,
began transferring to the Department of Homeland Security.5 Figure 1 shows
the timeline of TSA's brief history.
Figure 1: Timeline of TSA's History
Source: GAO.
When TSA was established in November 2001, the agency had no personnel, no
organizational structure, no policies and processes, and no legacy
systems. To begin operating, TSA adopted some of the Department of
Transportation's infrastructure components, such as the financial
4 Pub. L. No. 107-71.
5 The Department of Homeland Security was established in November 2002
under the Homeland Security Act (Pub. L. No. 107-296) to align and
coordinate the nation's efforts to secure the homeland from terrorism.
management system, and developed others in-house, such as a procurement
tracking system. In addition, the Aviation and Transportation Security Act
directed TSA to adopt the Federal Aviation Administration's (FAA)
Acquisition Management System, 6 which establishes policy, processes, and
guidance for all aspects of the acquisition life cycle. The act gives
TSA's administrator the latitude to make modifications to FAA's system as
appropriate. Because FAA is, by law, generally exempt from federal
acquisition laws as well as the Federal Acquisition Regulation (FAR),7 and
TSA was directed to adopt FAA's system, TSA is also exempt from these
requirements.
TSA has relied on contractors to accomplish much of its mission. In fiscal
year 2002, TSA obligated more than $3.7 billion for goods and services
procured under contracts awarded by TSA, FAA, and the Department of
Transportation. TSA currently has contracts to manage human resource
needs, including recruiting, hiring, training, and outfitting passenger
and baggage screeners; develop and manufacture screening equipment; and
provide the information technology systems the agency uses to manage its
day-to-day operations. These contracts represent about 48 percent of TSA's
fiscal year 2003 budget.
TSA's large expenditures on goods and services have prompted reviews by
the Inspectors General of the Departments of Transportation and Homeland
Security, who found a lack of contractor oversight and significant cost
overruns.8 For example, in January 2004, the Department of Homeland
Security Inspector General reported that inadequate contractor oversight
contributed to TSA's lack of timely background checks on screeners at
airports. Specifically, inadequate oversight of contractors contributed to
more than 500 boxes of background check documentation remaining
unprocessed for months.9 The Department of Transportation's Inspector
General also found that inadequate oversight and contracts without clearly
defined deliverables caused the cost of
6 This requirement is codified at 49 U.S.C. S: 114(o) (Supp. I 2001).
7 The Federal Acquisition Regulation was established to provide uniform
acquisition policies and procedures across the executive branch of the
U.S. Government. The acquisition laws from which FAA is exempt are listed
at 49 U.S.C. S: 40110(d)(2) (2000). This statute also exempts FAA from the
FAR, which implements these laws.
8 See appendix III for a list of inspector general testimony and reports
on TSA acquisitions.
9 Department of Homeland Security, Inspector General, A Review of
Background Checks for Federal Passenger and Baggage Screeners at Airports,
OIG-04-08 (January 2004).
TSA's initial contracts to balloon. For example, TSA's initial human
resource contract to recruit, screen, hire, and train screeners grew from
$100 million to $700 million within 1 year.10
In late 2003, the Department of Homeland Security's Inspector General
cited integrating the procurement functions of the department's component
organizations as a major management challenge, adding that some of the
procurement functions lacked important management controls.11 Despite
TSA's efforts to resolve initial problems, the Inspector General cited TSA
as an example of an agency lacking procurement management controls.
In a 2004 update to the previous year's report on management challenges,
the Inspector General's Office reported that TSA was taking steps to
address weaknesses in contract oversight, such as increasing the size of
its contract management staff, devising policies and procedures that
require adequate procurement planning, and arranging for the Defense
Contract Audit Agency to perform over 130 contract audits and support
contract administration.
TSA's Organizational Alignment and Leadership
Best Practices The appropriate placement of the acquisition function
within an agency can facilitate efficient and effective management of
acquisition activities. In our work on best practices, 12 we learned that
leading companies elevated or expanded the role of the company's
acquisition organization; designated commodity managers to oversee key
services; and made extensive use of cross-functional teams to help
identify the company's
10 Department of Homeland Security, Inspector General, Review of the
Status of Department of Homeland Security Efforts to Address Its Major
Management Challenges, OIG-04-21 (March 2004).
11 Department of Homeland Security, Inspector General, Major Management
Challenges Facing the Department of Homeland Security (December 31, 2003).
12 U.S. General Accounting Office, Best Practices: Taking a Strategic
Approach Could Improve DOD's Acquisition of Services, GAO-02-230
(Washington, D.C.: Jan. 18, 2002).
service needs, conduct market research, evaluate and select providers, and
manage performance. To cut across traditional organizational boundaries
that contributed to a fragmented approach to acquiring services, these
companies generally restructured their procurement organizations,
typically assigning them greater responsibility and authority for
strategic planning, management, and oversight of the companies' service
spending. In making such changes, the companies acknowledged that
acquisition is an important strategic function and that success in this
area contributes to the accomplishment of company missions. These changes
transformed the role of the purchasing unit from one focused on mission
support to one that was strategically important to the company's bottom
line.
Recent legislation recognizes the importance of placing the acquisition
function at an appropriate level and mandates that most executive
departments appoint a chief acquisition officer.13 This official will have
the responsibility to monitor the performance of acquisition activities
and programs; evaluate the performance of acquisition programs; increase
the use of full and open competition; increase the use of
performance-based contracting; establish clear lines of authority,
accountability, and responsibility for acquisition decision making; manage
the direction of the agency's acquisition policies; advise the head of the
executive agency regarding the appropriate business strategy to achieve
the mission of the executive agency; and develop and maintain an
acquisition career management program to ensure that there is an adequate
acquisition workforce.
Assessment
TSA's Office of Acquisition is at an organizational level too low to
oversee the acquisition process, coordinate acquisition activities, and
enforce acquisition policies effectively. As shown in figure 2, the Office
of Acquisition is at a lower level than other key offices involved in the
acquisition process. Its current position within the organizational
structure essentially relegates acquisition to the status of one of many
administrative functions. The placement of the Office of Acquisition
hinders the ability of the office to oversee the acquisition process and
to coordinate with other offices involved in that process-responsibilities
that are particularly critical given that almost half of TSA's budget is
spent
13 Services Acquisition Reform Act of 2003, tit. XIV of the National
Defense Authorization Act for fiscal year 2004, Pub. L. No. 108-136, S:
1421, 117 Stat. 1663, 1666-67 (2003). TSA is not required to appoint a
chief acquisition officer.
on acquisitions.14 This issue was also noted by senior acquisition
officials who told us that the Office of Acquisition is not appropriately
placed within TSA. Further, the Chief Support Systems Officer said that
adjustments to the placement of the office might be worthy of
consideration.15
Figure 2: Organization of TSA
Administrator
Deputy Administrator
Source: TSA.
From its current position, the office has not been able to coordinate the
agency's acquisition activities or enforce acquisition policies throughout
the agency. This has resulted in certain inefficiencies, as the following
examples demonstrate:
o Senior acquisition officials told us that some program offices within
TSA bypass the Office of Acquisition at key points in the acquisition
process or fail to consult the contracting officer early enough in the
acquisition process-typically without consequence. For example, program
offices have submitted purchase requests without allowing adequate time
for planning, requiring the contracting officers to spend additional time
on tasks such as rewriting the requirements or performing additional
market research to ensure that the goods or services purchased satisfy the
14 TSA officials provided this figure but did not provide additional
verification.
15 The director of the Office of Acquisition's position was elevated to
Deputy Assistant Administrator for Acquisition before we began our audit.
program offices' needs. Had the program offices consulted with the Office
of Acquisition earlier in the process, much of the additional work could
have been avoided.
o Different support offices involved in managing contracts for the
airport screening function did not coordinate when contracting for airport
screening equipment because, according to a senior operations official,
TSA failed to ensure effective communication between the support offices.
As a result, the number of personnel needed to operate the additional
equipment was not sufficient once the equipment was installed.
o Reports from the Inspectors Generals of the Department of Homeland
Security and the Department of Transportation also noted that TSA's
program offices failed to plan for and coordinate contractor oversight.
While TSA's Office of Acquisition now requires program offices to have
oversight plans in place before major contracts are awarded, the office
does not have the means to ensure that oversight plans are actually
implemented.
o The lack of recognition of the importance of the acquisition function
was also evident at a senior level of the organization. For example, an
acquisition official told us that a representative from the Office of
Acquisition was not initially consulted when senior TSA officials were
developing strategies for responding to questions following congressional
testimony on TSA's acquisition problems.
TSA's Acquisition Policies and Processes
Best Practices
Implementing strategic acquisition decisions to achieve agencywide
outcomes requires clear, transparent, and consistent policies and
processes that govern the planning, award, administration, and oversight
of acquisitions.16 Agency policies and processes, along with their
rationale, need to be clearly communicated to all involved in the
acquisition function. In addition, appropriate actions are needed to
ensure acquisition personnel understand the organization's acquisition
policies and processes, as well as their roles and responsibilities in
adhering to them. Appropriate internal controls to ensure that acquisition
personnel follow
16 Policies provide guidance on how the procurement function should be
managed, while processes outline the actions to be taken to implement the
policies.
policies and processes, and performance measures to assess the
effectiveness of policies and processes in achieving desired outcomes,
also are needed.
In our work on best practices, we learned that maintaining clear lines of
communication among all organizations involved in the acquisition
function, and using performance measures to evaluate acquisition
processes, were critical to successfully implementing strategic approaches
to acquisition. Leading companies also found that the use of metrics
increased the likelihood that acquisition processes would be successfully
implemented. Metrics can be used to assess an organization's current
performance level, identify the critical processes that require focused
management attention, obtain the knowledge needed to set realistic goals
for improvement, and document results over time.
Assessment
Since TSA was established, it has issued management directives, policy
letters, and guidance on its acquisition policies and processes. These
have been based on FAA policy and guidance for acquiring goods and
services and on Department of Homeland Security directives. TSA's policies
and processes emphasize personal accountability, good judgment,
justifiable business decisions, and integrated acquisition teams. However,
the following examples indicate that several of these policies have not
been effectively implemented.17
o Despite acquisition policies regarding contractor oversight, the
Department of Homeland Security's Inspector General reported that a lack
of adequate oversight on TSA's early contracts resulted in airline
passenger screeners being allowed to begin work without completing a
criminal history records check or to continue to work with adverse
background checks. Some screeners who had been hired failed background
checks, were determined to be ineligible, and were subsequently fired.
o TSA also failed to implement policies and processes intended to ensure
coordination of acquisition activities. TSA guidelines call for integrated
product teams-which may include representatives from program, technical,
finance, contracting, and legal offices-to coordinate key acquisition
activities and to work together to make decisions throughout the
acquisition process. According to TSA acquisition officials, however,
17 We were not able to assess all of the policies because of time
constraints and the fact that some were still in draft at the time of our
review.
such teams are often not formed, and there is currently no formal process
for doing so. Without such teams, TSA risks having acquisition activities
that are not well coordinated and key decisions that fail to take into
account all essential considerations.
TSA's acquisition policies and processes have not been effectively
communicated throughout the agency. The Office of Acquisition has
implemented training initiatives in an attempt to educate key staff about
their responsibilities, but officials across the agency told us that they
or their staffs are unclear about their roles and responsibilities in the
acquisition process. Because TSA's personnel were hired from other
agencies and from the private sector, which may have defined their roles
and responsibilities differently, it is critical that personnel throughout
TSA have a clear understanding of the agency's acquisition policies and
processes. Personnel must be properly trained in applying the
flexibilities inherent in TSA's acquisition policies to ensure fair and
open competition and effective procurement practices.
TSA lacks performance measures to determine whether its acquisition
policies are achieving desired outcomes. TSA also lacks internal controls
to identify and address implementation issues. Each office within TSA is
responsible for developing its own performance measures. TSA's Office of
Acquisition has measures to track the number of contracts awarded and the
amount of the awards, but does not have measures to assess how well
personnel carry out acquisition activities, such as oversight. For
example, TSA does not track the number of contracts awarded that include
incentives for performance, such as performance-based contracts or
contracts with fees based on different levels of performance.18 The Office
of Acquisition is currently considering the use of customer satisfaction
measures used by the U.S. Navy and the Department of Transportation to
determine whether they would be suitable for measuring the office's
performance. TSA's template for individual performance agreements attempts
to tie individual goals to organizational goals. However, the template has
no acquisition-specific goals. Supervisors may add acquisition-specific
goals for individuals. Without such goals it may be difficult to hold
individuals accountable for performance on acquisition activities.
18 Performance-based contracts are intended to ensure that required
performance quality levels are achieved and that total payment is related
to the degree that services performed meet contract standards.
Performance-based contracts generally specify the objective to be achieved
and allow the contractor to determine the best way to meet the objective.
TSA's deadline-driven culture fails to reinforce the importance of
compliance with policies. TSA officials acknowledged, and Inspector
General reports and testimony confirmed, that TSA initially sacrificed
cost concerns and disciplined acquisition practices in order to meet
schedules. As a result, TSA created a culture that prioritized meeting
deadlines at the expense of other acquisition goals. TSA's initial
deadlines for deploying its screener workforce were met. However, senior
officials from multiple TSA offices told us that the agency has maintained
its sense of urgency, and that program offices still expect acquisition
functions to be accomplished quickly, even if the appropriate acquisition
practices are not always followed.
Contract File Reviews
Our review of 21 contract files showed that TSA did not always use
practices that help to ensure quality and cost efficiency. While some of
the problems we identified in early contracts stemmed from shortcuts taken
to meet urgent deadlines, the persistence of such problems suggests that
TSA did not consistently follow disciplined acquisition practices. TSA's
policies require that the agency perform quality assurance, but several
contract files we reviewed contained little evidence that contract
oversight or quality assurance was performed. For example, the contract
files for background investigations, baggage screening, and engineering
and technical services contained no evidence of oversight or quality
assurance plans. TSA's policies also require that performance metrics be
identified in the requirements of complex contracts. Our review of the
contract files found that TSA failed to develop performance metrics for
the contractor prior to award. Instead, TSA often asked the contractor to
develop these plans or metrics after award. Because of problems with
inadequate contractor oversight, however, TSA now requires that an
oversight plan be in place prior to award.
Several of the contract files we reviewed were cost reimbursement19 or
time and materials20 contracts and did not contain evidence of government
surveillance to ensure cost efficiency. Of the 21 contracts we reviewed, 6
19 In a cost-reimbursement contract, the government establishes a cost
ceiling and assumes the cost risk, since the contractor will receive
reimbursement for all reasonable, allocable, and allowable incurred costs.
20 Time and materials contracts provide for the acquisition of supplies or
of the actual services on the basis of direct labor hours at specified
fixed hourly rates and materials at cost, plus handling costs where
appropriate.
were awarded on a fixed-price basis, and 9 were awarded on a
costreimbursable or time and materials basis, while 6 were a combination.
Cost-reimbursement and time and materials contracts are generally only
suitable when appropriate government surveillance during performance will
provide reasonable assurance that efficient methods and effective cost
controls are used. Frequent use of cost-reimbursement and time and
materials contracts, coupled with the inspector generals' findings that
TSA failed to monitor its contracts, diminishes the assurance that
efficient methods and cost controls are being used.
TSA generally used single-source contracts judiciously for the contract
files we reviewed. TSA's policies, which encourage competition as the
preferred method of contracting, state that use of single-source contracts
is permitted when necessary to accomplish TSA's mission and merely require
that a rational basis for the decision be documented. 21 Of the 21
contract files we reviewed, 3 were for single-source contracts.22 The
remaining contracts were awarded using a variety of procurement methods,
including use of existing government contracts, the Federal Supply
Schedule, required government supply sources, and competitive procedures.
In the 3 single-source contract awards we reviewed, the contract files
contained justifications for using such noncompetitive procedures as
required by TSA's policies. The justifications for awarding contracts on a
single-source basis varied. In one case, for example, the agency
identified a need for additional office furniture to be integrated with
furniture systems already installed at the work site. The justification
stated that the furniture components were not interchangeable between
manufacturers and that it would be more costly to hire a different
contractor to perform follow-on work. (See appendix IV for a description
of the other contracts we reviewed.)
21 In comparison, the Federal Acquisition Regulation, applicable to most
other executive agencies, permits the use of other than full and open
competition only for certain specified circumstances, which are: that only
one responsible source and no other supplies or services will satisfy
agency requirements; unusual and compelling urgency; industrial
mobilization, engineering, developmental, or research capability, or
expert services; international agreement; authorized or required by
statute; national security; or public interest. The regulation also
establishes the required content for each justification and requires
approval of the justification at a level above the contracting officer for
contracts above a certain dollar threshold.
22 One file was for a contract awarded by FAA, not TSA-and was thus not
included in our review.
TSA's Human Capital Management
Best Practices
A strategic human capital management approach enables an agency to
recruit, develop, and retain the right number of personnel with the right
skills to accomplish its mission effectively. Through our work on human
capital management, we have found that high-performing organizations
identify their current and future human capital needs and then develop
acquisition workforce plans containing strategies-such as targeted
investments in employees or recruiting and retention bonuses-to meet these
needs.23 These plans enable the organization to address the critical
skills and competencies needed to achieve results.24 Strategic human
capital approaches need sufficient resources. Senior managers should
devote adequate resources to recruiting, hiring, developing, rewarding,
and retaining talented personnel.25 Succession planning is also needed to
ensure that the workforce is composed of the right number of personnel
with the necessary skills and qualifications to perform the acquisition
function into the future. Changes in the required skill sets of the
acquisition workforce, coupled with the prospect of a decline in
experienced acquisition personnel throughout the government, make the need
for acquisition workforce planning more significant.
Industry and government experts alike recognize that having the right
people with the right skills is key to making a successful transformation
toward a more effective acquisition environment. Over the last decade, the
emergence of several procurement trends, including a rise in services
contracting, has created a need for acquisition workers with a much
23 In December 2003, we issued a report describing principles of human
capital planning that contribute to effective strategic workforce plans.
The five key principles strategic workforce planning should address
include agencywide involvement in implementation of the plan;
determination of critical skills and competencies; development of
strategies to address gaps; building the capability needed to address
administrative, educational, and other requirements; and monitoring and
evaluating the agency's progress towards its human capital goals. U.S.
General Accounting Office, Human Capital: Key Principles for Effective
Strategic Workforce Planning, GAO-04-39 (Washington, D.C.: Dec. 11, 2003).
24 U.S. General Accounting Office, High Risk Series: Strategic Human
Capital Management, GAO-03-120 (Washington, D.C.: Jan, 2003).
25 U.S. General Accounting Office, A Model of Strategic Human Capital
Management, GAO-02-373SP (Washington, D.C.: Mar. 15, 2002).
greater knowledge of market conditions, industry trends, and the technical
details of the commodities and services they procure.
Assessment
TSA risks an imbalance in its acquisition workforce that could diminish
the performance of the acquisition function throughout the agency. With
almost half of TSA's fiscal year 2003 budget devoted to acquisition, a
qualified and trained workforce is critical to ensuring the efficiency of
TSA's acquisition activities.
The Department of Homeland Security has developed a departmentwide
acquisition workforce plan, and TSA began implementing it in February
2004. The plan focuses on formalizing competencies and skill sets;
establishing certification standards;26 and identifying training
requirements, first for contracting specialists and then for acquisition
professionals in other key career fields-including program management,
financial management, engineering, and information technology.27
Subsequent phases of the plan include establishing career paths, targeting
positions for recruitment, establishing mentoring programs, and creating a
strategy for succession planning.
TSA's Office of Acquisition contributed significantly to the Department of
Homeland Security's acquisition workforce plan. However, TSA's Office of
Human Resources, which is responsible for recruiting and hiring and for
succession planning throughout TSA-including the acquisition workforce,
did not participate in developing the plan. Since there are many
acquisition-related positions in offices throughout TSA, the involvement
of key TSA personnel offices-particularly the Human Resources Office-is
important to the success of the acquisition workforce plan. It is not yet
clear how effective the acquisition workforce plan will be, given that an
office responsible for key aspects of implementation did not participate
in the plan's development.
26 Certification refers to the formal process through which the Department
of Homeland Security recognizes an individual for meeting the standards or
achieving the competencies in an acquisition career field.
27 The Department of Homeland Security's draft management directive lists
the following career fields as part of the acquisition workforce:
Business, Cost-Estimating, and Financial Management; Contracting;
Facilities Engineering; Industrial and/or Contract Property Management;
Information Technology; Production, Quality, and Manufacturing; Program
Management; and Purchasing and Procurement Technician.
In responding to a draft of this report, TSA officials commented
that the Human Resources Office was unable to participate in
departmentwide acquisition workforce planning because it has been
facing critical day-to-day problems associated with supporting growth
in the workforce throughout TSA. After functioning for just over 1 year,
the office has hired a manager who will be working on their human capital
strategic planning in conjunction with the overall departmental human
capital planning effort. They also said that TSA is drafting a Human
Capital
Officer Strategy that will focus on identifying career paths for all
occupations, including acquisitions and contracting.
Effective implementation of the acquisition workforce plan is all the
more important because acquisition officials face challenges in attaining
sufficient staffing levels. Office of Acquisition officials are concerned
that
their staff of 61 is not adequate to support the mission. In January 2003,
the Deputy Assistant Administrator of the Office of Acquisition conducted
a study to determine appropriate staffing levels for TSA's Office of
Acquisition. This study assumed contract awards in excess of $4 billion
per year,28 to estimate staffing requirements. Using three different
benchmarks that attempted to estimate staffing needs based on total
awarded value of contracts,29 the study concluded that the Office of
Acquisition would require a staff of between 179 and 628 employees. We
did not conduct an independent assessment of this TSA study to verify the
validity of the study's results. Further, the Office of Human Resources
has
not conducted similar studies to determine appropriate staffing levels for
other acquisition professionals not assigned to the Office of Acquisition.
TSA's Office of Acquisition has been challenged in trying to maintain its
existing acquisition workforce. According to TSA acquisition officials,
attrition among its contracting workforce has been a problem. In the time
period from March 2002 to December 2003, TSA's Office of Acquisition
experienced attrition of approximately 22 percent of its contracting
workforce. To identify the causes for attrition, the Office of Acquisition
began conducting exit interviews. According to acquisition officials,
28 This was the total value of contracts awarded in fiscal year 2002.
29 The TSA benchmarking study cited three benchmarks-one developed by
Acquisition Solutions, Inc.; another adopted by the Procurement Executives
Council; and a third that was based on other civilian agencies' contract
obligations and staffing levels. These benchmarks took into consideration
whether the contracting function was centralized, but did not take into
consideration other factors, such as the types of contracts used.
attrition is a result of the heavy workload, as well as a lack of
incentives, such as tuition reimbursement and performance awards.30 TSA's
human resource officials have not monitored the acquisition workforce
throughout the agency to determine if there are similar troubles retaining
acquisition professionals outside the Office of Acquisition. TSA's human
resources officials said they conducted a job satisfaction survey and plan
to begin conducting exit interviews, but acknowledged that the survey and
exit interviews would be concerned primarily with screener satisfaction.
Efforts to hire acquisition professionals to work in the Office of
Acquisition have been undercut by the limited number of qualified
applicants and possible negative perceptions about TSA. According to TSA
acquisition officials, there is a lack of applicants with adequate
acquisition experience, and TSA is competing with other agencies that
offer more generous benefits, such as tuition reimbursement and clear
career tracks. TSA is authorized to use recruiting and retention
incentives. However, according to officials, the agency has not provided
funding for these types of incentives. Further, qualified applicants are
difficult to recruit because TSA's role within the Department of Homeland
Security is not clearly understood and TSA has a reputation for long work
hours. Human resources officials admitted that their focus is primarily on
screeners, and they do not know whether other offices are experiencing
similar difficulties hiring acquisition professionals.
In addition, acquisition and training officials told us that training
funds for the acquisition workforce are very limited. Training officials
said that funds are sufficient for meeting federal training mandates;
however, there are no additional training funds for further professional
development. Acquisition officials told us that funding for training
Office of Acquisition personnel is limited to $1,000 per year per
employee-an amount that acquisition officials say is insufficient to train
staff who came to TSA without prior contracting experience. The Office of
Acquisition's training funds do not cover training of other acquisition
professionals outside this office. Without sufficient training funds, TSA
is able to provide few professional development opportunities for the
acquisition workforce- limiting career growth. To address the most
critical training needs for the acquisition workforce outside the Office
of Acquisition-such as program
30 Although the agency did not provide funding for performance awards in
fiscal year 2003, human resources officials stated that in fiscal year
2004 offices do have funds for performance awards. Agency officials told
us that no funding had been made available for other retention incentives.
managers, contracting officers' representatives, and technical monitors-
TSA's Office of Acquisition has proactively developed workshops in-house.
However, these workshops are not mandatory for the acquisition workforce.
TSA's Knowledge and Information Management
Best Practices
To make strategic, mission-focused acquisition decisions, organizations
need knowledge and information management processes and systems that
produce credible, reliable, and timely data about the goods and services
acquired and the methods used to acquire them. Leading companies use
procurement and financial management systems to gather and analyze data to
identify opportunities to reduce costs, improve service levels, measure
compliance and performance, and manage service providers. For example,
organizations need integrated financial management systems that provide
reliable, accurate, relevant, and timely financial data to help ensure
dollars are well spent. Such data are needed to estimate and control
program costs, support funding decisions, and oversee contract spending.
Many leading organizations have already implemented an enterprisewide
system to integrate financial and operating data to support both
management decision-making and external reporting requirements.
In a 1994 study of fundamental practices that led to performance
improvements in leading private and public organizations, we reported that
electronic business system initiatives must be focused on process
improvements. Information systems that simply use technology to do the
same work the same way, although faster, typically fail, or reach only a
fraction of their potential.31 In May 2000, we reported that when
developing new electronic business processes, it is important to ensure
that current
31 U.S. General Accounting Office, Executive Guide: Improving Mission
Performance Through Strategic Information Management and Technology,
GAO/AIMD-94-115 (Washington, D.C.: May 1994).
business processes are working well before applying new technology.32 In
fact, agency heads are required by statute to analyze an agency's mission
and revise mission-related and administrative processes, as appropriate,
before making significant investment in information technology that is to
be used in support of the performance of those missions.33 Not improving
business processes prior to investing in new technology creates the risk
of merely automating inefficient ways of doing business.
Assessment
While TSA is participating in the Department of Homeland Security's
efforts to develop functional requirements for an enterprisewide solution
that supports the department's resource management functions- including
finance and procurement,34 TSA does not currently have the strategic
information needed to support effective acquisition management decisions.
Near-term improvements to TSA's acquisition outcomes will be difficult
until TSA has critical knowledge management systems, such as financial and
procurement information systems, that allow decision makers to track
spending and manage budgets and collect detailed data on goods and
services, suppliers, and spending patterns. Despite the fact that TSA
lacks detailed information on the goods and services it purchases, some
aggregate data is available. TSA is an active participant in the
Department of Homeland Security's strategic sourcing program, which is
using the aggregate data to develop a strategy that will allow the
department to leverage its buying for particular commodities.
To manage on a day-to-day basis, inform acquisition decisions, and oversee
contracts, program and acquisition managers are relying on data derived
from informal, ad hoc systems-which are often out of date, incomplete,
inaccurate, or otherwise unreliable. TSA's Office of Acquisition is
temporarily relying on an Access database developed inhouse to track
manually entered procurement information and make acquisition decisions.
However, the temporary database does not contain
32 U.S. General Accounting Office, Electronic Government: Federal
Initiatives Are Evolving Rapidly But They Face Significant Challenges,
GAO/T-AIMD/GGD-00-179 (Washington, D.C.: May 2000).
33 40 U.S.C. S: 11313(5) (formerly 40 U.S.C. S: 1423(5)), as enacted and
recodified by Pub. L. No. 107-217. This requirement was established by the
Clinger-Cohen Act of 1996.
34 These efforts are part of a larger effort by the Department of Homeland
Security to develop an enterprise architecture that is intended to provide
a roadmap for reforming mission operations of business functions and
implementing standardized, nonduplicative, supporting information systems.
enough information to analyze purchases or measure the acquisition
function's performance. For example, a TSA official told us that when a
congressional committee asked for a list of sole-source contracts, TSA
officials had to compile the list manually, by asking contracting officers
which contracts had been awarded on a sole-source basis, because this
information was not in TSA's database. Further, the database does not
automatically track the status of a procurement request. Currently,
program officials must contact the Office of Acquisition to determine the
progress being made on a procurement request-relying on manually compiled
paper files, which are frequently incomplete or inaccurate, to track the
status of a purchase. TSA is now voluntarily reporting its contract
actions to the Homeland Security Contract Information System, which feeds
into the Federal Procurement Data System. This system can produce some
aggregate data, but lacks detailed information on goods and services
purchased.
Until a departmentwide solution is developed, TSA's Office of Acquisition
is planning to adopt the Coast Guard's procurement information system as a
faster and more cost-efficient way of obtaining the basic capability to
track purchase requests and write contracts.35 But TSA officials told us
that, in its current configuration, the system does not have all the
components necessary to enhance strategic acquisition decisions or enable
effective evaluation and assessment of acquisition outcomes.
An additional challenge to data collection and analysis is TSA's financial
management system. According to TSA officials, the agency's current
financial management system, run by the Department of Transportation, does
not provide the information needed to track financial events, summarize
financial information, or otherwise provide critical acquisitionrelated
information. For example, because program offices do not have access to
reliable financial information, program budget officials cannot certify
funds availability to approve a procurement request. As a result, the
Office of Finance must certify funds availability centrally. According to
finance officials, the inability to track spending has also resulted in
difficulties in processing invoices and procurement requests.
35 TSA's Office of Strategic Management and Analysis has proposed a
"business value analysis" study to identify best technology solutions to
solve organizational business priorities. The study will consolidate the
information requirements of the various organizational units within TSA so
that these requirements can be prioritized based on shared, strategic, and
agencywide business needs. However, TSA has not yet approved this plan.
Here too, while the department-level enterprise architecture effort is
proceeding, TSA is in the process of adopting the Coast Guard's financial
management system, which TSA finance officials say is more user-friendly
and provides better reporting capabilities and access than the system TSA
currently uses. It is unclear, however, whether the Coast Guard's
financial management software will facilitate TSA's financial
accountability activities. Independent auditors gave the Department of
Homeland Security's financial statement a qualified balance sheet opinion
based, for the most part, on problems with the Coast Guard's financial
statements. The Coast Guard was unable to provide sufficient documentation
to support certain financial conditions prior to the completion of the
audit.36
Conclusions
As a new agency, TSA was tasked to build an organization from the ground
up to meet a critical and demanding mandate. TSA worked quickly to put a
transportation security workforce in place, creating basic organizational
and acquisition infrastructures and subordinating cost concerns and
disciplined acquisition practices to meet deadlines. With the challenging
initial mandate fulfilled, TSA has begun to build a permanent
infrastructure. TSA now has the opportunity to build a model acquisition
function based on best practices. The opportunity may be lost, however, if
TSA fails to think strategically about the practices it uses to carry out
its acquisition function. By assessing its existing organizational
alignment, policies and processes, human capital approaches, and knowledge
and information systems against a framework of best practices and in
coordination with the Department of Homeland Security, TSA can identify
weaknesses and risk areas to target for improvement.
Attention from TSA's leadership is needed to help TSA's Office of
Acquisition improve acquisition practices agencywide-focusing on all
elements key to a successful acquisition program. Ensuring a strong
workforce and developing well-built procurement and financial management
systems, coupled with a strong message of compliance with
36 The auditors noted that it is "not uncommon for a large established
agency such as the U.S. Coast Guard to require additional time to get its
processes and systems in place to facilitate a financial statement audit."
The auditors also reported that, prior to their audit, the Coast Guard's
financial statements had never been audited on a stand-alone basis, nor
had they been audited at the level of detail required by the Department of
Homeland Security. U.S. Department of Homeland Security, Independent
Auditors Report No. OIG-04-10.
policies and processes and supported by performance measures, would
demonstrate the agency's commitment to effective acquisition practices.
To help ensure that TSA receives the goods and services it needs at the
best value to the government, we recommend that the Secretary of Homeland
Security direct the Administrator of the Transportation Security
Administration to take the following three actions:
Recommendations for
Executive Action
o Elevate the Office of Acquisition to an appropriate level within TSA
to enable it to identify, analyze, prioritize, and coordinate agencywide
acquisition needs.
o Develop an adequate system of internal controls, performance measures,
and incentives to ensure that policies and processes for ensuring
efficient and effective acquisitions are implemented appropriately.
o Direct the TSA Human Capital Office to do the following in
coordination with key offices in the Department of Homeland Security:
o assess TSA's current acquisition workforce (as defined by the
Department of Homeland Security) to determine the number, skills, and
competencies of the workforce;
o identify any gaps in the number, skills, and competencies of the
current acquisition workforce; and
o develop strategies to address any gaps identified, including plans to
attract, retain, and train the workforce.
We also recommend that the Secretary of Homeland Security ensure that its
planned departmentwide knowledge management system provides TSA sufficient
data and analytic capability to
o measure and analyze spending activities and performance-and thereby
highlight opportunities to reduce costs and improve service levels;
o support effective oversight of acquisitions; and
o facilitate the timely reporting of the agency's acquisition activities
and its compliance with acquisition policies and processes.
Agency Comments
and Our Evaluation
In written comments on a draft of this report, the Department of Homeland
Security generally concurred with our report and recommendations and
stated that our identification of areas for improvement will help to
develop the efficiency and effectiveness of TSA's Office of Acquisition.
In response to our recommendation to elevate the position of the Office of
Acquisition, the department stated that the office has been elevated once
before. We have acknowledged this in our report and note that the office
was elevated before we began our review
of TSA's acquisition function. Our review found that even after the office
was elevated, it remained at an organizational level too low to oversee
the acquisition process, coordinate acquisition activities, and enforce
acquisition policies effectively. The department further noted that the
Department of Homeland Security's Chief Procurement Officer is on par with
the Chief Financial Officer and Chief Information Officer, stating that
TSA will consider this option along with others as it works toward
improving the efficiency and effectiveness of its acquisition program.
Whichever option is chosen, we maintain that the Office of Acquisition
should be elevated to an appropriate level within TSA to enable it to
identify, analyze, prioritize, and coordinate agencywide acquisition
needs.
The department also commented that its Office of Human Resources has only
been functioning as a distinct office for a year and that after focusing
on establishing policies, processes, and effective contract management
services, it has hired a manager for planning. TSA has committed to
providing a more proactive approach to all human capital planning.
The department also noted that it is moving towards the enterprisewide
implementation of Oracle Financials and Prism starting in October 2004,
stating that the knowledge management tools recommended in the draft
report will be available to provide TSA sufficient data and analytic
capability to evaluate its processes, performance, and spending. Our
report acknowledges that TSA will be using these Coast Guard procurement
and financial systems; however, we maintain that these systems do not have
all the components necessary to enhance strategic acquisition decisions or
enable effective evaluation and assessment of acquisition outcomes.
As requested by your offices, unless you publicly announce the contents of
this report earlier, we plan no further distribution of it until 30 days
from the date of this letter. We will then send copies of this report to
interested congressional committees, the Secretary of Homeland Security,
and the Administrator of the Transportation Security Administration. We
will make copies available to others upon request. In addition, the report
will be available at no charge on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions regarding this report, please call
me at (202) 512-4841 or Blake Ainsworth, Assistant Director, at (202)
512-4609. Other major contributors to this report were Lara Laufer, Gordon
Lusby, William Petrick, Shannon Simpson, Karen Sloan, Adam Vodraska, and
Kelli Ann Walther.
William T. Woods Director, Acquisition
and Sourcing Management
Appendix I: Scope and Methodology
To review how well TSA is positioned to carry out its acquisition
function, we used GAO's previous best practices work as our criteria. Our
studies of best business practices show four interrelated
elements-organizational alignment, policies and processes, human capital,
and information management- that help to promote good acquisition
outcomes. We used each of the elements to assess TSA's acquisition
function.
To assess TSA's acquisition function across the four elements, we
interviewed senior agency officials, including the Chief Support Systems
Officer and a representative for the Acting Chief Operating Officer. We
also interviewed management and staff within the Office of Acquisition
regarding acquisition policy and processes, contracting training, program
support, and quality assurance.
To assess how well the organization is aligned to facilitate the
integration of the acquisition function throughout the agency, we reviewed
TSA organizational charts, process flowcharts, and presentations by agency
officials on key roles and responsibilities to understand how the
acquisition process is integrated into TSA's organization. To assess
leadership commitment to good acquisition, we also reviewed TSA's
strategic plan and investment review board meeting agendas, minutes, and
investment criteria. For an understanding of organizational alignment and
coordination, we interviewed the Chief Support Systems Officer and a
representative for the Acting Chief Operating Officer. To assess how well
acquisition activities are coordinated and carried out throughout the
agency, we interviewed Assistant Administrators of all major Operations
offices-Aviation Operations, Maritime and Land Security, Security
Intelligence, and Operations Policy-and Mission Support offices- Finance
and Administration, Human Resources, Information Technology, and Workforce
Performance and Training.
To determine TSA's current policies and processes, we reviewed applicable
laws and policies that granted TSA the flexibility to use and modify FAA's
system, and we also interviewed a member of TSA's Legal Counsel. We
analyzed FAA's Acquisition Management System and reviewed TSA's modified
version of this guidance. To assess TSA's progress towards developing and
implementing policies and processes, we reviewed TSA and Department of
Homeland Security memoranda, directives, internal newsletters, handbooks,
quality assurance checklists, and policy documents. To analyze TSA's
effectiveness in implementing policies and processes, we interviewed
Assistant Administrators for each of the Operations offices, as well as
the Division Directors within the Office of Acquisition for each of the
contracting support offices.
Appendix I: Scope and Methodology
Additionally, we interviewed management and staff within the Office of
Acquisition regarding acquisition policy and processes, program support,
and quality assurance.
To assess TSA's effectiveness in hiring, developing, and retaining its
acquisition workforce, we interviewed Office of Acquisition management and
staff, the Director and staff of the Workforce Performance and Training
Office, and two Assistant Administrators for Human Resources. We also
interviewed the Department of Homeland Security's Acquisition Workforce
Manager regarding the department's Acquisition Workforce Plan and TSA's
role in its development and implementation. We reviewed documents and
spoke with agency officials about acquisition workforce training
requirements, available courses, and means of tracking acquisition
training and other workforce data. In addition, we reviewed studies on
TSA's acquisition workforce size, one of which was conducted by a
contractor on behalf of TSA.
To help us assess how effectively the existing TSA information management
system enables the agency to track and manage its acquisition process and
facilitate strategic decision-making, officials from the Office of
Acquisitions, Assistant Administrators for each of the Operations offices,
and Division Directors within the Office of Acquisition explained TSA's
existing and planned information systems and outlined their information
needs. The same officials explained the capabilities of the information
management systems to perform acquisition transactions in support of TSA's
mission. Office of Acquisition staff discussed their data entry and
internal control processes and shared supporting documentation to help us
understand their current systems. To assess the capabilities and
limitations of the financial management system and financial management
processes, we interviewed the Chief Financial Officer and Chief Technology
Officer, as well as additional Finance and Administration staff. To
determine how much knowledge and information is available and accessible
to TSA management, we reviewed the Office of Acquisition's procurement
database, and Strategic Sourcing operations documents. To assess TSA's
plans for future information systems, we reviewed documentation describing
the operations of TSA's systems, proposals for planned initiatives, and
summaries of existing challenges. A representative from the office of
Strategic Management & Analysis provided insight about TSA's strategic
direction.
To gain further insight into how TSA's infrastructure affects its
acquisitions, we judgmentally selected 40 contract files for review. Using
TSA's database of contracts, we identified four types of contract actions
Appendix I: Scope and Methodology
from which to sample-new contracts, task and delivery orders, blanket
purchase agreements, and purchase orders. In each category, we selected
contracts based on award value. Nineteen of the 40 files were not
available or removed from the sample for the following reasons: they were
being closed out at a payment center, FAA awarded the contract rather than
TSA, it represented a duplicate contract, it had already been reviewed by
the Inspector General, they were actually interagency agreements, or it
was being managed by the Defense Contract Management Agency. We reviewed
the remaining 21 pre-and post-award contract files to assess key aspects
of the acquisition process at TSA-such as requirements development, market
research and analysis, acquisition planning, procurement method (including
use of competitive procedures and singlesource contracting), and contract
administration.
We conducted our review from July 2003 through March 2004 in accordance
with generally accepted government auditing standards.
Appendix II: Key Activities, Roles, and Responsibilities of Key Personnel
Involved in TSA's Acquisition Process
Figure 3 shows key activities performed during TSA's acquisition process.
Figure 3: Key Activities in the Acquisition Process
Source: GAO.
Table 1 identifies some of the major acquisition responsibilities
associated with the roles of key personnel.
Table 1: Key Personnel Involved in TSA's Acquisition Function
Office Role Responsibilitiesa
Program Office Program Manager Leads the planning phase of the process.
Identifies the program needs and works
through the investment review process to justify funding for the
acquisition. Together with the Office of Budget, develops a budget for the
acquisition. With assistance from the Contracting Officer, conducts market
research; develops the technical requirements; and prepares a procurement
request package containing, among other items, a statement of work and an
acquisition plan. Obtains appropriate purchase request approvals. After
solicitation, serves on evaluation panels and selects source for award.
After award, the office is responsible for monitoring and reporting
contractor performance.
Contracting Officer's In the planning phase, supports the program manager
in defining the requirement, Technical conducting market research, and
developing the acquisition strategy.
Representative After award, serves as a liaison between the government and
contractor-monitors(member of the and reports on contractor performance to
determine whether contract deliverables and program office) contractor
performance meet expectations.
Program Resource After award, ensures award documentation is correctly
entered into the financial Manager (May be the system and collaborates
with the Office of Acquisition to ensure prompt payment of Program Manager
or invoices.
Contracting Officer's Throughout the process, monitors funds available,
spending against the contract,Technical financial status of the contract,
funds obligated for acquisitions, and status ofRepresentative)
commitments.
Appendix II: Key Activities, Roles, and Responsibilities of Key Personnel
Involved in TSA's Acquisition Process
Office Role Responsibilitiesa
Office of Acquisition Chief Acquisition Officer Throughout the acquisition
cycle, provides leadership, vision, and direction to ensure the integrity
of the acquisition function by developing effective relationships with key
acquisition stakeholders. Also serves as the principle interface with the
Department of Homeland Security and other agencies' senior acquisition
executives.
In the planning phase, participates in investment review board decisions
for TSA and the Department of Homeland Security.
Contracting Officer Collaborates with program officials to advise on
acquisition strategies and alternatives, and participates in acquisition
planning.
Participates in market research with the program office.
Ensures that sufficient funds are available for the obligation.
Prepares the solicitation document.
Publicizes acquisitions.
Issues and amends solicitations.
Conducts negotiations with offerors, and awards and signs contracts for
the government.
Performs contract administration, including delegating certain functions
to the assigned Contracting Officer's Technical Representative.
Assists in monitoring contractor performance where applicable.
Terminates contracts.
Chief Financial Officer Participates in investment review decisions to
ensure that program plans are consistent
Office of Finance
& Administration Office of Budget In the planning phase, certifies the
availability of funds for procurement requests. (This
with the budget.
is normally the responsibility of the program office; however, because
timely budget information is not readily accessible from the financial
system, the Office of Budget is performing this function.)
Chief Counsel Counsel Primarily before award, responsible for
interpreting and providing legal advice related to applicable acquisition
laws and rules, and providing assistance regarding contract clauses and
justifications for exceptions to applicable rules.
Throughout the process, provides necessary legal assistance.
Before award of goods or services
Information Chief Technology related to information technology,
helps the program
office to determine requirements,
Technology Office Officer conduct market research, assess
acquisition
alternatives, and prepare statements
Technology of work and other pieces of the
Specialists solicitation document.
After award, may also assist in
monitoring deliverables and contractor
performance.
For information technology systems,
also develops, maintains, and
facilitates
implementation of information
technology.
Small Business In the planning and solicitation phases, reviews and
approves purchase requests over
Program Manager $200,000 to facilitate small business acquisition
initiatives that enable the agency to accomplish socioeconomic goals.
Investment Reviews and authorizes requests for funding. Review Board
Source: GAO.
a
This is not an all-inclusive list of responsibilities for the role as
indicated.
Appendix III: Inspector General Testimony and Reports Reviewed
Table 2 shows the Department of Transportation Inspector General testimony
and reports reviewed to identify issues associated with the contracting
process at the TSA.
Table 2: Department of Transportation Audit Reports on Contracting Issues at TSA
Report number Title
CC-2002-098 Key Issues Concerning Implementation of the Aviation and
Transportation Security Act (Feb. 5, 2002)
CC-2002-124 Key Budget Issues Facing the Transportation Security
Administration (Apr. 17, 2002)
CC-2002-180 Key Challenges Facing the Transportation Security
Administration (Jun. 20, 2002)
CC-2002-197 Progress in Implementing Provisions of the Aviation and
Transportation Security Act (Jul. 23, 2002)
CC-2002-203 Progress in Implementing Provisions of the Aviation and
Transportation Security Act (Aug. 7, 2002)
CC-2003-066 Aviation Security Costs, Transportation Security
Administration (Feb. 5, 2003)
FI-2003-025 Oversight of TSA Security Screener Contracts, TSA (Feb. 28,
2003)
PT-2003-012 Top Management Challenges (Jan. 21, 2003)
QC-2003-016 Quality Control Review of TSA's Audited FY2002 Financial
Statements (Jan. 27, 2003)
Source: GAO
Table 3 shows the Department of Homeland Security Inspector General
reports reviewed to identify problems associated with the contracting
process at the Transportation Security Administration.
Table 3: Department of Homeland Security Audit Reports Reviewed That
Include Contracting Issues at TSA
Report number Title
None Major Management Challenges Facing the Department of Homeland
Security (March 2003)
None Major Management Challenges Facing the Department of Homeland
Security (Dec. 31, 2003)
OIG-04-08 A Review of Background Checks for Federal Passenger and Baggage
Screeners at Airports (January 2004)
OIG-04-21 Review of the Status of Department of Homeland Security Efforts
to Address Its Major Management Challenges (March 2004)
Source: GAO.
Appendix IV: Contracts Reviewed
Contract award
Vendor Requirement amount Procurement
method
Covenant Aviation
Security, Gate, checkpoint, and $71,270,476 Competed
LLC baggage screener
services
Cooperative Human resource
Personnel services $553,579,473 Competed
Services and supplies
McNeil $7,911,363
Technologies, Inc. Gate, checkpoint, and Competed
baggage screener
services
International Total
Services, Gate, checkpoint, and $29,297,371 Competed
SMS baggage screener
services
Garrett Metal Metal detection Not priced, Federal Supply
Detectors, Inc. equipment various Schedule
unit prices Used qualified
recorded vendors lista
Human resource
Accenture, LLP services $214,799,495 Competed
and supplies
Development and Federal Supply
Deloitte Consulting support $205,000,000 Schedule
of TSA's eGov 4 schedule
operating vendors
considered
platform
Used Qualified
L3 Communications $352,000,000 Vendors List from
Explosive detection FAA
Corporation equipment
Used existing
$17,056,153 government
Unisys Corporation Security technology contract
systems integration
Federal Supply
Grant Thornton, LLP Accounting services $962,674 Schedule
3 schedule
vendors
considered
Global Office Federal Supply
Distributors, Inc. components-filing $22,365 Schedule
cabinets and
installation
Dozier Technologies Parts and labor for
installation of
office
furniture
$1,750,000 Noncompetitive award under SBA's 8(a)
b
program
Maximus, Inc. Technology evaluation, $3,776,377 Existing multiple award
contract
analysis, and report Evaluated 3 prime vendors
of test
results for
identification
credentials
Regus Business Limited competition due
Center Temporary use of $1,260,000 to urgent and
Corporation workstations and compelling need
support
services Contacted 3 vendors and
analyzed quotes
ManTech, MSM Security Services, Inc.
Background investigations and reports
$1,579,805 Federal Supply Schedule Contacted 4 schedule vendors Received 1
response
Planet Associates, Inc. Engineering and technical $499,954 Single Source-cited
"logical follow-on" as
support services to develop an interim TSA property and asset management
database
rational basis
Appendix IV: Contracts Reviewed
Contract award Vendor Requirement amount Procurement method
Kimball Parts and labor for $462,039 Single Source-cited "only one
International responsible
modification of vendor" as rational basis
existing
furniture and Need to integrate with
installation of furniture systems
new furniture already installed at
worksite, and furniture
components are not
interchangeable among
manufacturers
Unicor Federal Chairs and cRequired
Prison installation $308,000 government source
of supply
Industries, Inc.
Human resource Single Source-cited
services "only one
Accenture, LLP $20,754,095 responsible
and supplies-reduce source" as rational
basis
Vendor is only
work backlogs that vendor that can
eliminate
remained from the backlog and format
data to conform to
current database
previous vendor without additional
delay
Wackenhut Undefinitized at Not awarded by TSA;
Corporation Baggage screening awarded by FAA and
services at selected $106,568,616 later taken over by
TSA
airports GAO did not review
FAA award
Unisys $23,300,000 Used existing
Corporation Development and government contract
maintenance of IT
infrastructure
Source: GAO.
a
Orders placed against a General Services Administration multiple award
schedule that use the required ordering procedures are considered to be
issued using full and open competition. The policy of the FAA Acquisition
Management System used by TSA permits placing orders against General
Services Administration schedules for recurring products and services when
it is determined to be in the best interest of the agency.
b Section 8(a) of the Small Business Act (15 U.S.C. S: 637(a)) established
a program that authorizes the Small Business Administration to enter into
all types of contracts with other agencies and let subcontracts for
performing those contracts to firms eligible for program participation.
These subcontractors are referred to as "8(a) contractors." The purpose of
the 8(a) program is to assist eligible small disadvantaged business
concerns to compete in the economy through business development. The
policy of the FAA Acquisition Management System used by TSA allows
individual procurements to be noncompetitively awarded to 8(a) vendors
when the anticipated total value of the procurement does not exceed a
certain threshold ($3 million or, if assigned an industry classification,
$5 million).
c
The policy of the FAA Acquisition Management System used by TSA is to
continue to acquire products and services from required government supply
sources, such as Federal Prison Industries.
Appendix V: Comments from the Department of Homeland Security
GAO's Mission
Obtaining Copies of GAO Reports and Testimony
The General Accounting Office, the audit, evaluation and investigative arm
of Congress, exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability of
the federal government for the American people. GAO examines the use of
public funds; evaluates federal programs and policies; and provides
analyses, recommendations, and other assistance to help Congress make
informed oversight, policy, and funding decisions. GAO's commitment to
good government is reflected in its core values of accountability,
integrity, and reliability.
The fastest and easiest way to obtain copies of GAO documents at no cost
is through the Internet. GAO's Web site (www.gao.gov) contains abstracts
and fulltext files of current reports and testimony and an expanding
archive of older products. The Web site features a search engine to help
you locate documents using key words and phrases. You can print these
documents in their entirety, including charts and other graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as "Today's Reports," on its
Web site daily. The list contains links to the full-text document files.
To have GAO e-mail this list to you every afternoon, go to www.gao.gov and
select "Subscribe to e-mail alerts" under the "Order GAO Products"
heading.
Order by Mail or Phone The first copy of each printed report is free.
Additional copies are $2 each. A check or money order should be made out
to the Superintendent of Documents. GAO also accepts VISA and Mastercard.
Orders for 100 or more copies mailed to a single address are discounted 25
percent. Orders should be sent to:
U.S. General Accounting Office 441 G Street NW, Room LM Washington, D.C.
20548
To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061
To Report Fraud, Contact: Web site: www.gao.gov/fraudnet/fraudnet.htm
Waste, and Abuse in E-mail: [email protected]
Federal Programs Automated answering system: (800) 424-5454 or (202)
512-7470
Jeff Nelligan, Managing Director, [email protected] (202) 512-4800
Public Affairs U.S. General Accounting Office, 441 G Street NW, Room 7149
Washington, D.C. 20548
*** End of document. ***