    Secure Border Initiative: SBInet Expenditure Plan Needs to Better
    Support Oversight and Accountability (15-FEB-07, GAO-07-309).

    In November 2005, the Department of Homeland Security (DHS)
    established the Secure Border Initiative (SBI) program to secure
    U.S. borders and reduce illegal immigration. One element of SBI
    is SBInet, the program responsible for developing a comprehensive
    border protection system. By legislative mandate, DHS developed a
    fiscal year 2007 expenditure plan for SBInet to address nine
    legislative conditions, including a review by GAO. DHS submitted
    the plan to the Appropriations Committees on December 4, 2006. To
    address the mandate, GAO assessed the plan against federal
    guidelines and industry standards and interviewed appropriate DHS
    officials.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-07-309
        ACCNO:   A65985
      TITLE:     Secure Border Initiative: SBInet Expenditure Plan Needs
    to Better Support Oversight and Accountability
         DATE:   02/15/2007
      SUBJECT:   Border control
    	     Border security
    	     Federal legislation
    	     Federal procurement
    	     Homeland security
    	     Immigration
    	     Procurement evaluation
    	     Program evaluation
    	     Reporting requirements
    	     Strategic planning
    	     Secure Border Initiative

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    GAO-07-309

         * [1]Compliance with Legislative Conditions
         * [2]Conclusions
         * [3]Recommendations for Executive Action
         * [4]Agency Comments
         * [5]GAO Contact
         * [6]Staff Acknowledgments
         * [7]GAO's Mission
         * [8]Obtaining Copies of GAO Reports and Testimony

              * [9]Order by Mail or Phone

         * [10]To Report Fraud, Waste, and Abuse in Federal Programs
         * [11]Congressional Relations
         * [12]Public Affairs

    Report to Congressional Committees

    United States Government Accountability Office

    GAO

    February 2007

    SECURE BORDER INITIATIVE

    SBInet Expenditure Plan Needs to Better Support Oversight and
    Accountability

    GAO-07-309

    Contents

    Letter 1

    Compliance with Legislative Conditions 2
    Conclusions 7
    Recommendations for Executive Action 7
    Agency Comments 8
    Appendix I Briefing to the Subcommittees on Homeland Security, Senate and
    House Committees on Appropriations 11
    Appendix II Comments from the Department of Homeland Security 62
    Appendix III GAO Contact and Staff Acknowledgments 65

    Abbreviations

    CBP Customs and Border Protection
    CIO Chief Information Officer
    CPO Chief Procurement Officer
    DHS Department of Homeland Security
    EVM earned value management
    FAR Federal Acquisition Regulation
    IRB Investment Review Board
    IV&V independent verification and validation
    OMB Office of Management and Budget
    PMO Program Management Office
    SBI Secure Border Initiative

    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
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    separately.

    United States Government Accountability Office

    Washington, DC 20548

    February 15, 2007 February 15, 2007

    The Honorable Robert C. Byrd
    Chairman
    The Honorable Thad Cochran
    Ranking Minority Member
    Subcommittee on Homeland Security
    Committee on Appropriations
    United States Senate

    The Honorable Robert C. Byrd
    Chairman
    The Honorable Thad Cochran
    Ranking Minority Member
    Subcommittee on Homeland Security
    Committee on Appropriations
    United States Senate

    The Honorable David E. Price
    Chairman
    The Honorable Harold Rogers
    Ranking Minority Member
    Subcommittee on Homeland Security
    Committee on Appropriations
    House of Representatives

    The Honorable David E. Price
    Chairman
    The Honorable Harold Rogers
    Ranking Minority Member
    Subcommittee on Homeland Security
    Committee on Appropriations
    House of Representatives

    The Secure Border Initiative (SBI) is a comprehensive, multiyear program
    established in November 2005 by the Secretary of Homeland Security to
    secure U.S. borders and reduce illegal immigration. SBI's mission is to
    promote border security strategies that help protect against and prevent
    terrorist attacks and other transnational crimes. Elements of SBI will be
    carried out by several organizations within the Department of Homeland
    Security (DHS). One element of SBI is SBInet, the program within U.S.
    Customs and Border Protection (CBP) responsible for developing a
    comprehensive border protection system. SBInet is responsible for leading
    the effort to ensure that the proper mix of personnel, tactical
    infrastructure, rapid response capability, and technology is deployed
    along the border. In September 2006, after a full and open competition
    source selection, CBP awarded an indefinite delivery/indefinite quantity
    systems integration contract for 3 years, with three 1-year options. The
    minimum dollar amount is $2 million; the maximum is stated as "the full
    panoply of supplies and services to provide 6,000 miles of secure U.S.
    border." According to DHS, the SBInet solution is to include a variety of
    sensors, communications systems, information technology, tactical
    infrastructure (roads, barriers, and fencing), and command and control
    capabilities to enhance situational awareness of the responding officers.
    The solution is also to include the development of a common operating
    picture that provides uniform data, through a command center environment,
    to all DHS agencies and is interoperable with stakeholders external to
    DHS. The Secure Border Initiative (SBI) is a comprehensive, multiyear
    program established in November 2005 by the Secretary of Homeland Security
    to secure U.S. borders and reduce illegal immigration. SBI's mission is to
    promote border security strategies that help protect against and prevent
    terrorist attacks and other transnational crimes. Elements of SBI will be
    carried out by several organizations within the Department of Homeland
    Security (DHS). One element of SBI is SBInet, the program within U.S.
    Customs and Border Protection (CBP) responsible for developing a
    comprehensive border protection system. SBInet is responsible for leading
    the effort to ensure that the proper mix of personnel, tactical
    infrastructure, rapid response capability, and technology is deployed
    along the border. In September 2006, after a full and open competition
    source selection, CBP awarded an indefinite delivery/indefinite quantity
    systems integration contract for 3 years, with three 1-year options. The
    minimum dollar amount is $2 million; the maximum is stated as "the full
    panoply of supplies and services to provide 6,000 miles of secure U.S.
    border." According to DHS, the SBInet solution is to include a variety of
    sensors, communications systems, information technology, tactical
    infrastructure (roads, barriers, and fencing), and command and control
    capabilities to enhance situational awareness of the responding officers.
    The solution is also to include the development of a common operating
    picture that provides uniform data, through a command center environment,
    to all DHS agencies and is interoperable with stakeholders external to
    DHS.

    The Department of Homeland Security Appropriations Act, 2007, required DHS
    to submit to Congress an expenditure plan to establish a security barrier
    along the border of the United States of fencing and vehicle barriers and
    other forms of tactical infrastructure and technology.1 This plan was to
    address nine legislative conditions and was submitted on December 4, 2006.
    As required by the act, we reviewed the plan, and on December 7 and
    December 13, 2006, briefed the House and Senate Appropriations
    Subcommittee staff, respectively, on the results. This report transmits
    these results. The full briefing, including our scope and methodology, is
    reprinted in appendix I.

    Compliance with Legislative Conditions

    The expenditure plan, including related documentation and program
    officials' statements, satisfied four legislative conditions, partially
    satisfied four legislative conditions, and did not satisfy one legislative
    condition. The nine legislative conditions and the level of satisfaction
    are summarized below.

               o Legislative condition 1: Define activities, milestones, and
               costs for implementing the program (partially satisfied).

    The SBInet expenditure plan included general cost information for proposed
    activities and some associated milestone information, such as beginning
    and ending dates. DHS estimates that the total cost for completing the
    acquisition phase for the southwest border is $7.6 billion for fiscal
    years 2007 through 2011. However, the plan and related documentation did
    not include sufficient details about the activities, milestones, or costs
    for implementing the program. Although the plan stated that about $790
    million will be spent in the Tucson sector in Arizona for such elements as
    fencing, ground sensors, radars, cameras, and fixed and mobile towers, the
    plan did not specify how the funds will be allocated by element and did
    not provide specific dates for
    implementation. In addition, the plan did not include activities,
    milestones, or costs for the northern border. According to DHS, work on
    the northern border is not to begin before fiscal year 2009.

    1Pub. L. No. 109-295, 120 Stat. 1355, 1359-60. The Appropriations Act
    required that the expenditure plan be submitted within 60 days after the
    enactment of the act.

               o Legislative condition 2: Demonstrate how activities will further
               the goals and objectives of the SBI, as defined in the SBI
               multiyear strategic plan (not satisfied).

    The SBInet expenditure plan included a section that describes SBI and
    SBInet goals; however, the expenditure plan and related documentation did
    not link individual activities with SBI's goals, as called for by the
    legislative condition. Further, the December 2006 SBI strategic plan
    contained three strategic goals, one of which addresses border control.
    SBI and SBInet senior officials told us all SBInet activities link back to
    the overall goal of controlling the border and that the linkage between
    program goals and activities is intuitive. However, the SBInet expenditure
    plan did not link specific activities to more detailed SBI strategic plan
    goals, such as the annual performance goals.

               o Legislative condition 3: Identify funding and organization
               staffing (including full-time equivalents, contractors, and
               detailees) requirements by activity (satisfied).

    The SBInet program is managed by the SBInet Program Management Office
    (PMO). The PMO plans to execute SBInet activities through a series of
    concurrent task orders and to rely on a mix of government and contractor
    staff. The PMO plans to nearly triple its current workforce, from
    approximately 100 to 270 personnel,2 by September 2007 in order to support
    and oversee this series of concurrent task orders. As of December 2006,
    SBInet officials told us that they have assigned lead staff for the task
    orders that have been awarded.

               o Legislative condition 4: Report on costs incurred, the
               activities completed, and the progress made by the program in
               terms of obtaining operational control of the entire border of the
               United States (partially satisfied).

    2As of December 2006, SBInet personnel included 38 government employees
    and 60 contractor staff. Projected personnel as of September 2007 includes
    113 government employees and 157 contractors.

    The SBInet expenditure plan and related documentation discussed how
    approximately $1.5 billion will be allocated to SBInet activities. For
    example, about $790 million is allocated for the Tucson Border Patrol
    sector and $260 million for the Yuma sector in Arizona.3 However, the plan
    did not include costs incurred to date mainly because SBInet activities
    are in the early stages of implementation and costs had not yet been
    captured by DHS's accounting system (e.g., the SBInet systems integration
    contract was awarded in September 2006 and the first two task orders were
    awarded in September and October 2006). Moreover, the expenditure plan did
    not include a baseline measure of miles under control of the border.4
    While the plan did not discuss progress made to date by the program to
    obtain control of the border, related program documents, such as the
    bimonthly SBI reports to Congress, included information on the number of
    miles under control in the southwest border. According to the November
    2006 bimonthly report, as of August 2006, 284 miles of the southwest
    border are under control.

               o Legislative condition 5: Include a certification by DHS's Chief
               Procurement Officer (CPO) that procedures to prevent conflicts of
               interest between the prime integrator and major subcontractors are
               established and a certification by DHS's Chief Information Officer
               (CIO) that an independent verification and validation agent is
               currently under contract for the project (satisfied).

    On November 30, 2006, DHS's CPO certified that the prime integrator had
    established procedures to prevent conflicts of interest between it and its
    major subcontractors and that DHS is developing a process to monitor and
    oversee implementation of the prime integrator's procedures. Also, on
    November 30, 2006, DHS's Deputy CIO certified that the SBInet program had
    contracted with a private company as the interim independent verification
    and validation (IV&V) agent. However, this company is also responsible for
    performing program activities, including requirements management and test
    and evaluation activities and thus is not independent of all the program's
    products and processes that it could review. The Deputy CIO certified that
    a permanent IV&V agent is to be selected by February 28, 2007, and that
    CBP is to provide information sufficient to determine that this
    independence issue has been resolved.

    3The U.S. Border Patrol has 20 sectors responsible for detecting,
    interdicting, and apprehending those who attempt to illegally enter or
    smuggle people, including terrorists, or contraband, including weapons of
    mass destruction, across U.S. borders between official ports of entry.

    4DHS defines control of U.S. borders as the ability to: detect illegal
    entries, identify and classify entries and determine their respective
    level of threat, efficiently and effectively respond, and bring events to
    a satisfactory law enforcement action.

               o Legislative condition 6: Comply with all applicable acquisition
               rules, requirements, guidelines, and best systems acquisition
               management practices of the federal government (partially
               satisfied).

    SBInet is using, at least to some extent, several acquisition best
    practices. The extent to which these practices are in use varies, and
    outcomes are dependent on successful implementation. However, one
    acquisition requirement not followed was that the SBInet systems
    integration contract did not contain a specific number of units that may
    be ordered or a maximum dollar value. According to the Federal Acquisition
    Regulation (FAR),5 indefinite quantity contracts must specify the maximum
    quantity of supplies or services the agency will acquire. This may be
    stated as a number of units or as a dollar value. SBI and SBInet officials
    told us that the contract already contains a maximum quantity of "6,000
    miles of secure U.S. border" and that this was sufficient to satisfy the
    FAR requirement. We disagree because the statement in the contract about
    the 6,000 miles of secure border merely reflects the agency's overall
    outcome to be achieved with the supplies or services provided but does not
    specify the maximum quantity of supplies or services the agency may
    acquire. We believe that a maximum quantity or dollar value limit should
    be included in the contract in order to ensure that it is consistent with
    the FAR requirement.

    SBInet's acquisition approach calls for considerable concurrency among
    related planned tasks and activities. The greater the degree of
    concurrency among related and dependent program tasks and activities, the
    greater a program's exposure to cost, schedule, and performance risks. SBI
    and SBInet officials told us that they understand the risks inherent in
    concurrency and are addressing these risks. However, they have yet to
    provide evidence that shows they have identified the dependencies among
    their concurrent activities and that they are proactively managing the
    associated risk.

    5FAR 16.504(a)(4)(ii).

    Further, the program office did not fully define and implement key
    acquisition management processes, such as project planning, requirements
    management, and risk management. According to the SBInet Program Manager,
    this is due to the priority being given to meeting an accelerated program
    implementation schedule. However, the program office has begun
    implementing a risk management process and, according to the Program
    Manager, plans to develop a plan for defining and implementing the
    remaining processes by the spring of 2007.

               o Legislative condition 7: Comply with the capital planning and
               investment control review requirements established by the Office
               of Management and Budget (OMB), including Circular A-11, part 7
               (partially satisfied).

    As required by OMB, the plan and related documentation provided a brief
    description of SBInet and addressed the program's management structure and
    responsibilities for most of the program office's directorates. In
    addition, the program office developed a draft privacy impact assessment
    and established an earned value management (EVM) system6 to manage the
    prime integrator's progress against cost and schedule goals. However, an
    OMB-required EVM system had not been fully implemented because the
    baselines against which progress can be measured for the two task orders
    that had been issued, as of December 4, 2006, were not yet established.
    Further, the program office had not yet developed a system security plan
    or determined SBInet's compliance with the DHS enterprise architecture.7

               o Legislative condition 8: Include reviews and approvals by DHS's
               Investment Review Board (IRB), the Secretary of Homeland Security,
               and OMB (satisfied).

    DHS's IRB approved the plan on November 22, 2006; the Secretary of
    Homeland Security approved the expenditure plan on November 22, 2006; and
    OMB approved the plan on December 4, 2006.

               o Legislative condition 9: Include a review by GAO (satisfied).

    6EVM is a management tool to help ensure that work performed for a program
    or project is consistent with cost and schedule goals.

    7An enterprise architecture defines how any organization operates today
    and how it plans to operate in the future, and it includes a road map for
    transitioning between the two sets of operations.

    On December 7, 2006, we briefed the House of Representatives Committee on
    Appropriations staff and on December 13, 2006, we briefed the Senate
    Committee on Appropriations staff regarding the results of our review.

    Conclusions

    The legislatively mandated expenditure plan for SBInet is a congressional
    oversight mechanism aimed at ensuring that planned expenditures are
    justified, performance against plans is measured, and accountability for
    results is ensured. Because the SBInet expenditure plan lacked sufficient
    details on such things as planned activities and milestones, anticipated
    costs and staffing levels, and expected mission outcomes, Congress and DHS
    are not in the best position to use the plan as a basis for measuring
    program success, accounting for the use of current and future
    appropriations, and holding program managers accountable for achieving
    effective control of the southwest border.

    Under the FAR, indefinite quantity contracts such as the SBInet contract
    must contain the specific number of units that may be ordered or a maximum
    dollar value. However, the SBInet contract merely contains the maximum
    number of miles to be secured. While SBInet officials consider this
    sufficient to satisfy the FAR requirement, a maximum quantity expressed in
    units other than the overall outcome to be achieved or expressed as a
    dollar value limit would help ensure that the contract is consistent with
    this requirement.

    DHS's approach to SBInet introduces additional risk because the program's
    schedule entails a high level of concurrency. With multiple related and
    dependent projects being undertaken simultaneously, SBInet is exposed to
    possible cost and schedule overruns and performance problems. Without
    assessing this level of concurrency and how it affects project
    implementation, SBInet runs the risk of not delivering promised
    capabilities and benefits on time and within budget.

    Recommendations for Executive Action

    To help ensure that Congress has the information necessary to effectively
    oversee SBInet and hold DHS accountable for program results, and to help
    DHS manage the SBInet program and ensure that future SBInet expenditure
    plans meet the legislative requirements, we recommend that the Secretary
    of Homeland Security direct the U.S. Customs and Border

    Protection Secure Border Initiative Program Management Office Executive
    Director to take the following three actions:

               o ensure that future expenditure plans include explicit and
               measurable commitments relative to the capabilities, schedule,
               costs, and benefits associated with individual SBInet program
               activities;
               o modify the SBInet systems integration contract to include a
               maximum quantity or dollar value; and
               o re-examine the level of concurrency and appropriately adjust the
               acquisition strategy.

    Agency Comments

    In written comments on a draft of this report, DHS generally agreed with
    our findings and conclusions, but did not agree with our assessment that
    the SBInet contract does not contain specific numbers of units that may be
    ordered or a maximum dollar value. In addition, DHS stated that CBP
    intends to fully satisfy each of the legislative conditions in the near
    future to help minimize the program's exposure to cost, schedule, and
    performance risks. DHS's written comments are reproduced in appendix II.

    With respect to our recommendations, DHS concurred with two of our
    recommendations and disagreed with one. Specifically, DHS concurred with
    our recommendation for future expenditure plans to include explicit and
    measurable commitments relative to capabilities, schedule, costs, and
    benefits associated with individual SBInet program activities. According
    to DHS, future SBInet expenditure plans will include actual and planned
    progress, report against commitments contained in prior expenditure plans,
    and include a section that addresses and tracks milestones. DHS also
    concurred with our recommendation to re-examine the level of concurrency
    and appropriately adjust the acquisition strategy. In its written
    comments, DHS stated that CBP is constantly assessing the overall program
    as it unfolds, and adjusting it to reflect progress, resource constraints,
    refinements and changes in requirements, and insight gained from ongoing
    system engineering activities. DHS also stated that CBP recognizes the
    risk inherent in concurrency and has added this to the program's risk
    management database.

    DHS did not agree with our recommendation to modify the SBInet integration
    contract to include a maximum quantity or dollar value. According to DHS,
    the quantity stated in the contract, "6,000 miles of
    secure U.S. border," is measurable and is therefore the most appropriate
    approach to defining the contract ceiling. We do not agree. Under the FAR,
    an agency may use an indefinite delivery/indefinite quantity contract,
    such as that used for SBInet, when it is not possible to determine in
    advance the precise quantities of goods or services that may be required
    during performance of the contract. Though these types of contracts are
    indefinite, they are not open-ended. The FAR requires that indefinite
    quantity contracts contain a limit on the supplies or services that may be
    ordered, stated in terms of either units or dollars. This limit serves a
    variety of purposes, including establishing the maximum financial
    obligation of the parties. In our view, the purported maximum used in the
    SBInet contract, "the full panoply of supplies and services to provide
    6,000 miles of secure U.S. border," does not allow anyone to calculate
    with any degree of certainty what the maximum financial obligation of the
    parties might turn out to be since the contract does not make clear the
    total amount of supplies or services that would be required to secure even
    1 mile of U.S. border. In order to ensure that the SBInet contract is
    consistent with the FAR, we continue to believe that it should be modified
    to include a maximum quantity, either units or a dollar value, rather than
    the total amount of miles to be secured.

    We are sending copies of this report to the Chairman and Ranking Minority
    Members of other Senate and House committees that have authorization and
    oversight responsibilities for homeland security. We are also sending
    copies to the Secretary of Homeland Security, the Commissioner of Customs
    and Border Protection, and the Director of the Office of Management and
    Budget. Copies of this report will also be available at no charge on the
    GAO Web site at http://www.gao.gov.

    If you or your staff have any further questions about this report, please
    contact Richard Stana at (202) 512-8816 or StanaR@gao.gov. Contact

    points for our Offices of Congressional Relations and Public Affairs may
    be found on the last page of this report. Key contributors to this report
    are listed in appendix III.

    Richard M. Stana
    Director, Homeland Security and Justice Issues

    Randolph C. Hite
    Director, Information Technology Architecture and Systems
    Issues

    William T. Woods
    Director, Acquisition and Sourcing Management

    Appendix I: Briefing to the Subcommittees on Homeland Security, Senate and
    House Committees on Appropriations Appendix I: Briefing to the
    Subcommittees on Homeland Security, Senate and House Committees on
    Appropriations

    Appendix II: Comments from the Department of Homeland Security

    Appendix III: GAO Contact and Staff Acknowledgments

    GAO Contact

    Richard M. Stana, (202) 512-8816, stanar@gao.gov

    Staff Acknowledgments

    In addition to the person named above, Robert E. White, Assistant
    Director; Deborah Davis, Assistant Director; Richard Hung, Assistant
    Director; E. Jeanette Espinola; Frances Cook; Katherine Davis; Gary
    Delaney; Joseph K. Keener; Sandra Kerr; Raul Quintero; and Sushmita
    Srikanth made key contributions to this report.

    (440564)

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    Highlights of [21]GAO-07-309 , a report to congressional committees

    February 2007

    SECURE BORDER INITIATIVE

    SBInet Expenditure Plan Needs to Better Support Oversight and
    Accountability

    In November 2005, the Department of Homeland Security (DHS) established
    the Secure Border Initiative (SBI) program to secure U.S. borders and
    reduce illegal immigration. One element of SBI is SBInet, the program
    responsible for developing a comprehensive border protection system. By
    legislative mandate, DHS developed a fiscal year 2007 expenditure plan for
    SBInet to address nine legislative conditions, including a review by GAO.
    DHS submitted the plan to the Appropriations Committees on December 4,
    2006. To address the mandate, GAO assessed the plan against federal
    guidelines and industry standards and interviewed appropriate DHS
    officials.

    [22]What GAO Recommends

    GAO recommends that DHS (1) ensure that future expenditure plans include
    explicit and measurable commitments relative to the capabilities,
    schedule, costs, and benefits associated with individual SBInet program
    activities; (2) modify the SBInet contract to include a maximum quantity
    or dollar value; and (3) re-examine the level of concurrency and
    appropriately adjust the acquisition strategy. DHS concurred with the
    first and third recommendations, but not the second. DHS stated that the
    contract already contains a maximum quantity. GAO disagrees and believes
    DHS needs to modify the contract to ensure compliance with regulations.

    The SBInet expenditure plan, including related documentation and program
    officials' statements, satisfied four legislative conditions, partially
    satisfied four legislative conditions, and did not satisfy one legislative
    condition. The nine legislative conditions and the level of satisfaction
    are summarized in the table.

    Satisfaction of Legislative Conditions

    Source: GAO analysis of DHS data.

    Satisfying the legislative conditions is important because the expenditure
    plan is intended to provide Congress with the information needed to
    effectively oversee the program and hold DHS accountable for program
    results. Satisfying the legislative conditions is also important to
    minimize the program's exposure to cost, schedule, and performance risks.
    SBInet's December 2006 expenditure plan offered a high-level and partial
    outline of a large and complex program that forms an integral component of
    a broader multiyear initiative. However, the plan and related
    documentation did not include explicit and measurable commitments relative
    to capabilities, schedule, costs, and benefits associated with individual
    SBInet program activities. In addition, the SBInet systems integration
    contract did not contain a specific number of units that may be ordered or
    a maximum dollar value as required by Federal Acquisition Regulation.
    Further, DHS's approach to SBInet introduces additional risk because the
    program's schedule entails a high level of concurrency among related
    planned tasks and activities.

    *** End of document. ***