Department of Homeland Security: Progress and Continuing Concerns
with Acquisition Management (17-SEP-08, GAO-08-1164T).		 
                                                                 
Since it was created in 2003, the Department of Homeland Security
(DHS) has obligated billions of dollars annually to meet its	 
expansive homeland security mission. The department's		 
acquisitions support complex and critical trade, transportation, 
border security, and information technology investments. In	 
fiscal year 2007, DHS spent over $12 billion on procurements to  
meet this mission including spending for complex services and	 
major investments. Prior GAO work has found that while DHS has	 
made some initial progress in developing its acquisition function
since 2003, acquisition planning and oversight for procurement	 
and major acquisitions need improvement. This testimony discusses
GAO's findings in these areas and is based on GAO's body of work 
on acquisition management issues.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-1164T					        
    ACCNO:   A84263						        
  TITLE:     Department of Homeland Security: Progress and Continuing 
Concerns with Acquisition Management				 
     DATE:   09/17/2008 
  SUBJECT:   Accountability					 
	     Contract administration				 
	     Contract performance				 
	     Contractors					 
	     Cost analysis					 
	     Cost control					 
	     Cost overruns					 
	     Data integrity					 
	     Federal procurement				 
	     Homeland security					 
	     Military forces					 
	     Performance measures				 
	     Procurement					 
	     Procurement planning				 
	     Procurement policy 				 
	     Program evaluation 				 
	     Program management 				 
	     Risk assessment					 
	     Risk management					 
	     Schedule slippages 				 
	     Standards						 
	     Strategic planning 				 
	     Work measurement					 
	     Standards evaluation				 
	     Program costs					 

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GAO-08-1164T

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Testimony: 

Before the Subcommittee on Management, Investigations, and Oversight, 
Committee on Homeland Security, House of Representatives: 

United States Government Accountability Office: 
GAO: 

For Release on Delivery: 
Expected at 2 p.m. EST:
Wednesday, September 17, 2008: 

Department Of Homeland Security: 

Progress and Continuing Concerns with Acquisition Management: 

Statement of John P. Hutton, Director: 
Acquisition and Sourcing Management: 

GAO-08-1164T: 

GAO Highlights: 

Highlights of GAO-08-1164T, a testimony before the Subcommittee on 
Management, Investigations, and Oversight, Committee on Homeland 
Security, House of Representatives. 

Why GAO Did This Study: 

Since it was created in 2003, the Department of Homeland Security (DHS) 
has obligated billions of dollars annually to meet its expansive 
homeland security mission. The departmentï¿½s acquisitions support 
complex and critical trade, transportation, border security, and 
information technology investments. In fiscal year 2007, DHS spent over 
$12 billion on procurements to meet this mission including spending for 
complex services and major investments. 

Prior GAO work has found that while DHS has made some initial progress 
in developing its acquisition function since 2003, acquisition planning 
and oversight for procurement and major acquisitions need improvement. 
This testimony discusses GAOï¿½s findings in these areas and is based on 
GAOï¿½s body of work on acquisition management issues. 

What GAO Found: 

Recognizing the need to improve its acquisition outcomes, DHS has taken 
some steps to integrate disparate acquisition processes and systems 
that the component organizations brought with them when the department 
was formed. However, we have reported that more needs to be done to 
develop clear and transparent policies and processes for all 
acquisitions, and to develop an acquisition workforce to implement and 
monitor acquisitions. 

With regard to acquisition planning, DHS did not assess the risk of 
hiring contractors to perform management and professional support 
services that have the potential to increase the risk that government 
decisions may be influenced by, rather than independent from, 
contractor judgments. Planning for services procured through 
interagency and performance-based contracting methods was also lacking. 
For example, DHS did not always consider alternatives to ensure good 
value when selecting among interagency contracts. Shortcomings in DHSï¿½s 
use of a performance-based approach for complex acquisitions included a 
lack of well-defined requirements, a complete set of measurable 
performance standards, or both, at the time of contract award or the 
start of work. Contracts for several investments we reviewed 
experienced cost overruns, schedule delays, or less than expected 
performance. 

Acquisition oversight also has consistently been identified as needing 
improvement. While the Chief Procurement Officer (CPO) has recently 
implemented a departmentwide oversight program, evaluations of the 
outcomes of acquisition methods and contracted services have not yet 
been conducted. Further, the CPO continues to face challenges in 
maintaining the staffing levels needed to fully implement the oversight 
program, and CPO authority to ensure that components comply with the 
procurement oversight plan remains unclear. 

Figure: Selected Department of Homeland Security Missions and Assets: 

[Refer to PDF for image} 

Photographs of: 
Baggage Screening; 
Border Security Patrol; 
National Security Cutter. 

Source: DHS. 

[End of figure] 

What GAO Recommends: 

While GAO is making no new recommendations in the testimony, GAO has 
made numerous recommendations over the past several years to improve 
DHSï¿½s acquisition management. DHS has generally concurred with these 
recommendations, but actions still need to be taken to fully address 
them. 

To view the full product, including the scope and methodology, click on 
GAO-08-1164T. For more information, contact John P. Hutton at (202) 512-
4841 or [email protected]. 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

Thank you for inviting me here today to discuss the Department of 
Homeland Security's (DHS) progress and areas for improvement in 
managing acquisitions. Over the past several years, as DHS has been 
developing its acquisition function, it has spent billions of 
procurement dollars annually to meet its expansive homeland security 
mission. The department's acquisition portfolio is broad and complex, 
supporting critical trade, transportation, border security, and 
information technology investments. In fiscal year 2006, more than 80 
percent of DHS's procurement spending was for services, which can be 
more complex and require different approaches to acquire than purchases 
of goods. Our prior work has found that appropriate planning, 
structuring, and monitoring of acquisitions is critical to ensuring the 
services provided meet the government's needs.[Footnote 1] The growing 
complexity of contracting for technically difficult and sophisticated 
services increases the challenges of setting appropriate requirements 
and effectively overseeing contractor performance. At the same time, 
other factors, such as pressure to get programs up and running, and 
technological challenges have impacted DHS's ability to achieve good 
acquisition outcomes. 

My statement today is drawn from our body of work on DHS's acquisition 
management. I will discuss DHS's progress and areas for improvement in 
developing its acquisition function and DHS's acquisition planning and 
oversight. Specifically, I will highlight relevant findings from our 
work on contractors hired to perform management and professional 
support services, and the use of selected procurement methods, such as 
interagency contracting and performance-based acquisitions. We 
conducted these performance audits in accordance with generally 
accepted government auditing standards. Those standards require that we 
plan and perform the audit to obtain sufficient, appropriate evidence 
to provide a reasonable basis for our findings and conclusions based on 
our audit objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

Summary: 

DHS has made some progress in acquisition management--recognizing the 
need to improve acquisition outcomes and taking some steps to organize 
and assess the acquisition function. However, we have reported that 
more needs to be done to develop clear and transparent policies and 
processes for all acquisitions and to develop an acquisition workforce 
to execute and monitor acquisitions. Additionally, our work has found 
that acquisition planning and oversight for procurement and major 
acquisitions need improvement. With regard to planning, we found that 
DHS did not assess the risk of hiring contractors to perform 
professional and management support services that have the potential to 
increase the risk that government decisions may be influenced by, 
rather than independent from, contractor judgments. For services 
procured through interagency contracting, we found acquisition planning 
was lacking. DHS did not always consider alternatives to ensure good 
value when selecting among interagency contracts. We have also 
identified a number of shortcomings in DHS's use of a performance-based 
approach for complex acquisitions. Earlier this year, we reported that 
contracts for eight major investments at Coast Guard, Customs and 
Border Protection (CBP), and the Transportation Security Administration 
(TSA) did not always have well-defined requirements, a complete set of 
measurable performance standards, or both at the time of contract award 
or the start of work, and that these contracts experienced cost 
overruns, schedule delays, or did not otherwise meet performance 
expectations. With regard to oversight, while the Chief Procurement 
Officer (CPO) has recently implemented a departmentwide oversight 
program, evaluations of the outcomes of acquisition methods and 
contracted services have not yet been conducted. The CPO continues to 
face challenges in maintaining the staffing levels needed to fully 
implement the oversight program, and CPO authority to ensure that 
components comply with the procurement oversight plan remains unclear. 

Background: 

DHS has some of the most extensive acquisition needs within the federal 
government. In fiscal year 2007, DHS obligated about $12 billion to 
acquire goods and services ranging from the basic goods and services 
federal agencies purchase, such as information technology equipment and 
support, to more complex and unique acquisitions, such as airport 
security systems and Coast Guard ships. 

DHS and its component agencies have faced a number of challenges 
related to procuring services and major system acquisitions. When DHS 
was formed in 2003, it was responsible for integrating 22 agencies with 
disparate missions. Of these, only seven came with their own 
procurement offices, only some of which had also managed complex 
acquisitions such as the Coast Guard's Deepwater program or TSA's 
airport screening programs. 

While the Homeland Security Acquisition Manual and the Federal 
Acquisition Regulation (FAR) do not distinguish between the terms 
acquisition and procurement, DHS officials have noted that procurement-
-the actual transaction to acquire goods and services--is only one 
element of acquisition. The term acquisition can include the 
development of operational and life-cycle requirements, such as 
formulating concepts of operations, developing sound business 
strategies, exercising prudent financial management, assessing trade- 
offs, and managing program risks. 

DHS Has Made Some Progress in Acquisition Management: 

We have identified three key performance areas for acquisition 
management: assessing and organizing acquisition functions to meet 
agency needs; developing clear and transparent policies and processes 
for all acquisitions; developing an acquisition workforce to implement 
and monitor acquisitions. Our prior work has shown that these are among 
the key elements of an efficient, effective, and accountable 
acquisition function.[Footnote 2] We testified in April 2008 that, 
despite its initial positive acquisition management efforts, several 
challenges remained.[Footnote 3] The following summarizes each of these 
three areas: 

* Assessing and organizing the acquisition function: Since it was 
created in 2003, DHS has recognized the need to improve acquisition 
outcomes, and has taken some steps to organize and assess the 
acquisition function. DHS has worked to integrate the disparate 
acquisition processes and systems that the component organizations 
brought with them when the department was created. To help assess 
acquisition management, in 2005 the Department developed an oversight 
program. This program incorporates DHS policy, internal controls, and 
elements of an effective acquisition function.[Footnote 4] This program 
has been partially implemented and monitors component-level performance 
through four recurring reviews: self-assessments; operational status; 
on-site; and acquisition planning. However, DHS has not yet 
accomplished its goal of integrating the acquisition function across 
the department. For example, the structure of DHS's acquisition 
function creates ambiguity about who is accountable for acquisition 
decisions because it depends on a system of dual accountability and 
cooperation and collaboration between the CPO and the component heads. 
DHS officials stated in June 2007 that that they were in the process of 
modifying the lines of business management directive to clarify the 
CPO's authority; however, this directive has yet to be approved. 

* Developing clear and transparent polices and processes: DHS had made 
some progress in this area but has generally not developed clear and 
transparent policies and processes for all acquisitions. Specifically, 
DHS put into place an investment review process in 2003 that adopts 
many acquisition best practices to help the department reduce risk and 
increase the chances for successful investment in terms of cost, 
schedule, and performance. However, in 2005, we found that the process 
did not include critical management reviews.[Footnote 5] Further, our 
work has identified concerns with the implementation of the investment 
review process. In 2007, we reported that DHS had not fully implemented 
key practices of its investment review process to control projects. For 
example, we reported that DHS executives may not have the information 
they need to determine whether information technology investments are 
meeting expectations, which may increase the risk that underperforming 
projects are not identified and corrected in a timely manner.[Footnote 
6] We have ongoing work on the implementation of DHS's investment 
review process scheduled to be released later this year. 

* Developing an acquisition workforce to implement and monitor 
acquisitions: DHS has taken initial steps needed to develop an 
acquisition workforce. In 2006, DHS reported significant progress in 
providing staff for the component contracting offices, though much work 
remained to fill the positions with qualified, trained acquisition 
professionals. DHS has also taken a positive step by authorizing 
additional staff for the CPO to provide staff for procurement 
oversight, program management and cost analysis functions. We have 
ongoing work on DHS's acquisition workforce scheduled to be released 
later this year. 

Planning for Procurement and Major Acquisitions Need Improvement: 

Our work on both services contracting and major investments has 
consistently identified the need for improved acquisition planning to 
better ensure taxpayer dollars are spent prudently. Acquisitions must 
be appropriately planned and structured to minimize the risk of the 
government receiving services that are over cost estimates, delivered 
late, and of unacceptable quality.[Footnote 7] Specifically, we have 
emphasized the importance of clearly defined requirements to achieving 
desired results, and measurable performance standards to ensuring 
control and accountability. Too often, our work on federal acquisitions 
has reported that unrealistic, inadequate, or frequently changing 
requirements have left the government vulnerable to wasted taxpayer 
dollars.[Footnote 8] For services closely supporting inherently 
governmental functions, we found that DHS did not use risk assessment 
in its plans to hire contractors to provide these services.[Footnote 9] 
For services procured through methods such as interagency and 
performance-based contracting, we found acquisition planning was 
lacking.[Footnote 10] For major systems, acquisition planning includes 
establishing well-defined requirements and ensuring appropriate 
resources, such as adequate staffing and expertise, are in place to 
manage the investments; yet we have consistently found that these key 
elements are not in place. 

Inadequate Procurement Planning: 

While there are benefits to using contractors to perform services for 
the government--such as increased flexibility in fulfilling immediate 
needs--we and others have raised concerns about the federal 
government's increased reliance on contractor services. Of key concern 
is the risk associated with a contractor providing services that 
closely support inherently governmental functions: the loss of 
government control over and accountability for mission-related policy 
and program decisions. Professional and management support services, 
including program management and support services such as acquisition 
support, budget preparation, intelligence services, and policy 
development, closely support inherently governmental functions. To help 
ensure that the government does not lose control over and 
accountability for such decisions, longstanding federal procurement 
policy requires attention to the risk that government decisions may be 
influenced by, rather than independent from, contractor judgments when 
contracting for services that closely support inherently governmental 
functions. This type of risk assessment is also part of the acquisition 
planning process. While DHS program officials generally acknowledged 
that their professional and management support services contracts 
closely supported inherently governmental functions, they did not 
assess the risk of contractors providing these services. The nine cases 
we reviewed in detail provided examples of cases in which contractors 
provided services integral to and comparable to those provided by 
government employees; contractors provided ongoing support; and 
contract requirements were broadly defined. These conditions need to be 
carefully monitored to help ensure the government does not lose control 
over and accountability for mission related decisions. To improve DHS's 
ability to manage the risk of selected services that closely support 
inherently governmental functions, as well as government control over 
and accountability for decisions, we recommended that DHS establish 
strategic-level guidance on and routinely assess the risk of using 
contractors for selected services and more clearly define contract 
requirements. 

DHS's use of interagency contracting--a process by which one agency 
uses another agency's contracts and contracting services--is another 
area we have identified acquisition planning was lacking. While 
interagency contracting offers the benefits of efficiency and 
convenience, in January 2005, we noted shortcomings and designated the 
management of interagency contracting as a governmentwide high-risk 
area. Our work on DHS's use of interagency contracting showed that the 
department did not always select interagency contracts based on 
planning and analysis and instead made decisions based on the benefits 
of speed and convenience. We found that DHS conducted limited 
evaluation of contracting alternatives to ensure good value when 
selecting among interagency contracts. While interagency contacting is 
often chosen because it requires less planning than establishing a new 
contract, evaluating the selection of an interagency contract is 
important because not all interagency contracts provide good value when 
considering both timeliness and total cost. Although DHS guidance has 
required planning and analysis of alternatives for all acquisitions 
since July 2005, we found that it was not conducted for the four cases 
in our review for which it was required. To improve the management of 
interagency contracting, we recommended that DHS develop consistent, 
comprehensive guidance and training and establish criteria to consider 
in selecting an interagency contract. 

Major Investments Using a Performance-Based Approach: 

To help improve service acquisition outcomes, federal procurement 
policy calls for agencies to use a performance-based approach to the 
maximum extent practicable. This approach includes: a performance work 
statement that describes outcome oriented requirements, measurable 
performance standards, and quality assurance surveillance. In using a 
performance-based approach, the FAR requires contract outcomes or 
requirements to be well-defined, that is, providing clear descriptions 
of results to be achieved. Our prior reviews of complex DHS investments 
using a performance-based approach point to a number of shortcomings. 
For example, in June 2007, we reported that a performance-based 
contract for a DHS financial management system, eMerge2, lacked clear 
and complete requirements, which led to schedule delays and 
unacceptable contractor performance.[Footnote 11] Ultimately, the 
program was terminated after a $52 million investment. The DHS 
Inspector General has also indicated numerous opportunities for DHS to 
make better use of sound practices, such as well-defined requirements. 
[Footnote 12] 

Consistent with these findings, our 2008 report on performance-based 
acquisitions, for which we reviewed contracts for eight major 
investments at Coast Guard, CBP, and TSA, found that contracts for 
investments that did not have well-defined requirements, or a complete 
set of measurable performance standards, or both, at the time of 
contract award or the start of work experienced cost overruns, schedule 
delays, or did not otherwise meet performance expectations.[Footnote 
13] In contrast, service contracts for investments that had well- 
defined requirements linked to measurable standards performed within 
budget meeting the standards in all cases where contractors had begun 
work. For example, TSA's Screening Partnership Program improved its 
contracted services at the San Francisco International Airport to 
incorporate well-defined requirements linked to clearly measurable 
performance standards and delivered services within budget. To improve 
the outcomes of performance-based acquisitions, we recommended that DHS 
improve acquisition planning for requirements for major complex 
investments to ensure they are well-defined, and develop consistently 
measurable performance standards linked to those requirements. 
Following are examples of complex investments with contracts that did 
not have well-defined requirements or complete measurable performance 
standards and did not meet cost, schedule, or performance expectations. 

Contracts for systems development for two CBP major investments-- 
Automated Commercial Environment (ACE) and Secure Border Initiative 
(SBInet)--lacked both well-defined requirements and measurable 
performance standards prior to the start of work and both experienced 
poor outcomes. The first, for DHS's ACE Task Order 23 project--a trade 
software modernization effort--was originally estimated to cost $52.7 
million over a period of approximately 17 months.[Footnote 14] However, 
the program lacked stable requirements at contract award and, 
therefore, could not establish measurable performance standards and 
valid cost or schedule baselines for assessing contractor performance. 
Software requirements were added after contract award, contributing to 
a project cost increase of approximately $21.1 million, or 40 percent, 
over the original estimate. Because some portions of the work were 
delayed to better define requirements, the project is not expected to 
be completed until January 2011--over three years later than originally 
planned. 

The second, Project 28 for systems development for CBP's SBInet--a 
project to help secure a section of the United States-Mexico border 
using a surveillance system--did not meet expected outcomes due to a 
lack of both well-defined requirements and measurable performance 
standards. CBP awarded the Project 28 contract planned as SBInet's 
proof of concept and the first increment of the fielded SBInet system 
before the overall SBInet operational requirements and system 
specifications were finalized. More than 3 months after Project 28 was 
awarded, DHS's Inspector General reported that CBP had not properly 
defined SBInet's operational requirements and needed to do so quickly 
to avoid rework of the contractor's systems engineering. We found that 
several performance standards were not clearly defined to isolate the 
contractor's performance from that of CBP employees, making it 
difficult to determine whether any problems were due to the 
contractor's system design, CBP employees, or both. As a result, it was 
not clear how CBP intended to measure compliance with the Project 28 
standard for probability of detecting persons attempting to illegally 
cross the border. Although it did not fully meet user needs and its 
design will not be used as a basis for future SBInet development, DHS 
fully accepted the project after an 8-month delay.[Footnote 15]In 
addition, DHS officials have stated that much of the Project 28 system 
will be replaced by new equipment and software. However, Project 28 is 
just one part of the entire Secure Border Initiative, and our recent 
work has noted that requirements and testing processes for the 
initiative have not been effectively managed, and important aspects of 
the program remain in flux.[Footnote 16] 

Additionally, our work has found that the Coast Guard's Deepwater 
Program, ongoing since the late 1990s, is intended to replace or 
modernize 15 major classes of Coast Guard assets. In March 2007, we 
reported that the Coast Guard's Deepwater contract had requirements 
that were set at unrealistic levels and were frequently changed. 
[Footnote 17] For some of the Deepwater assets, this resulted in cost 
escalation, schedule delays, and reduced contractor accountability over 
a period of many years of producing poor results such as ships that 
experienced serious structural defects. In light of these serious 
performance and management problems, Coast Guard leadership has changed 
its approach to this acquisition.[Footnote 18] It has taken over the 
lead role in systems integration, which was formerly held by a 
contractor. Formerly, the contractor had significant program management 
responsibilities, such as contractual responsibility for drafting task 
orders and managing the system integration of Deepwater as a whole. 
Coast Guard project managers and technical experts now hold the greater 
balance of management responsibility and accountability for program 
outcomes. Coast Guard officials have begun to hold competitions for 
Deepwater assets outside of the lead system integrator contract, and 
cost and schedule information is now captured at a level that has 
resulted in improved visibility, such as the ability to track and 
report cost breaches for assets. The Coast Guard has also begun to 
follow a disciplined project management framework, requiring 
documentation and approval of decisions at key points in a program's 
life cycle. However, like other federal agencies, the Coast Guard has 
faced challenges in building an adequate government workforce and is 
relying on support contractors in key positions, such as cost 
estimators and contract specialists. 

Oversight Consistently Identified as Needing Improvement: 

Our work on contractors performing services closely supporting 
inherently governmental functions found that DHS program officials and 
contracting officers were not aware of federal requirements for 
enhanced oversight for these types of services. Both the FAR and the 
Office of Management and Budget's Office of Federal Procurement Policy 
(OFPP) policy state that when contracting for these types of services a 
sufficient number of qualified government employees assigned to plan 
and oversee these contractor activities is needed to maintain control 
and accountability. For the nine cases we reviewed, the level of 
oversight provided did not always help ensure accountability for 
decisions or the ability to judge whether contractors were performing 
as required.[Footnote 19] We found cases in which the DHS components 
lacked the capacity to oversee contractor performance due to limited 
expertise and workload demands. DHS components were also limited in 
their ability to assess contactor performance in a way that addressed 
the risk of contracting for services that closely support inherently 
governmental functions. Assessing contractor performance requires a 
plan that outlines how services will be delivered and establishes 
measurable outcomes. However, none of the oversight plans and contract 
documents we reviewed contained specific measures for assessing 
contractor performance of selected services. To address this 
deficiency, we recommended that DHS assess the ability of its workforce 
to provide sufficient oversight when using these types of contracted 
services. 

Limited oversight also is due in part to insufficient data to monitor 
acquisitions. Our work on procurement methods, such as interagency 
contracting and performance-based acquisition, has found that DHS does 
not systematically monitor its use of these contracts to assess whether 
these methods are being properly managed, or to assess costs, benefits, 
or other outcomes of these acquisition methods. With regard to 
interagency contracting, we found that DHS was not able to readily 
provide data on the amounts spent through different types of contracts 
or on the fees paid to other agencies for the use of their contracting 
services or vehicles. This lack of information means that DHS cannot 
assess whether the department could achieve savings through using 
another type of contracting vehicle. We similarly found that DHS did 
not have reliable data on performance-based acquisitions to facilitate 
required reporting, informed decisions, and analysis of acquisition 
outcomes. For example, our review of contracts at the Coast Guard, CBP, 
Immigration and Customs Enforcement (ICE), and TSA showed that, about 
51 percent of the 138 contracts we identified in FPDS-NG as performance-
based had none of the required performance-based elements: a 
performance work statement, measurable performance standards, and a 
method of assessing contractor performance against performance 
standards. The unreliability of these data makes it difficult for DHS 
to be able to accurately report on governmentwide performance targets 
for performance-based acquisitions. We have recommended that DHS work 
to improve the quality of FPDS-NG data so that DHS can more accurately 
identify and assess the quality of the use and outcomes of various 
procurement methods. 

Inaccurate federal procurement data is not unique to DHS and is a long- 
standing governmentwide concern. Our prior work and the work of the 
General Services Administration's Inspector General have identified 
issues with the accuracy and completeness of FPDS and FPDS-NG data, 
[Footnote 20] and OMB has stressed the importance of submitting timely 
and accurate procurement data to FPDS-NG. The Acquisition Advisory 
Panel[Footnote 21] has also raised concerns about the accuracy of FPDS-
NG data.[Footnote 22] These circumstances illustrate the magnitude of 
the challenge DHS faces in developing timely and accurate data to 
monitor acquisitions. 

To improve procurement oversight, the CPO established and has 
implemented a departmentwide program to provide comprehensive insight 
into each component's programs and disseminate successful management 
techniques throughout DHS.[Footnote 23] This program, which is based on 
a series of component-level reviews, was designed with the flexibility 
to address specific procurement issues. As such, it could be used to 
address areas such as performance-based acquisitions, interagency 
contracting, and the appropriate use of contractors providing services 
closely supporting inherently governmental functions. Some of the four 
key oversight reviews have begun under this program, but management 
assessments, or evaluation of the outcomes of acquisition methods and 
contracted services, have not been conducted. Our work has found that 
the CPO continues to face challenges in maintaining the staffing levels 
needed to fully implement the oversight program, and CPO authority to 
ensure that components comply with the procurement oversight plan 
remains unclear. 

Conclusion: 

Improving acquisition outcomes has been an ongoing challenge since DHS 
was established in 2003. Our work has consistently noted that sound 
acquisition planning, including clearly defining requirements, and 
ensuring adequate oversight are hallmarks of successful service 
acquisitions. A sufficient acquisition workforce is also key to 
properly managing acquisitions. Our body of work has also included many 
recommendations to the Secretary of Homeland Security to take actions 
aimed at improving acquisition management, planning, and oversight. 
While DHS has generally concurred with our recommendations, the 
department has not always stated how the underlying causes of the 
deficiencies we have identified will be addressed. Until the department 
takes needed action to address these causes, it will continue to be 
challenged to make the best use of its acquisition dollars. 

Mr. Chairman, this concludes my prepared statement. I would be happy to 
respond to any questions that you or other members of the subcommittee 
may have at this time. 

Contacts and Acknowledgments: 

For further information about this statement, please contact me at 
(202) 512-4841 or [email protected]. Contact points for GAO's Offices of 
Congressional Relations and Public Affairs are listed on the last page 
of this product. Key contributors to this statement were Amelia 
Shachoy, Assistant Director; Ann Marie Udale, Karen Sloan and Kenneth 
Patton. 

[End of section] 

Footnotes: 

[1] For example, GAO, Defense Acquisitions: Tailored Approach Needed to 
Improve Service Acquisition Outcomes, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-20] (Washington, D.C.: Nov. 9, 
2006). 

[2] GAO, Framework for Assessing the Acquisition Function at Federal 
Agencies, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-218G] 
(Washington, D.C.: September 2005). 

[3] GAO, Department of Homeland Security: Progress Made in 
Implementation of Management Functions, but More Work Remains, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-646T] (Washington, 
D.C.: April 9, 2008). 

[4] GAO, Department of Homeland Security: Progress and Challenges in 
Implementing the Department's Acquisition Oversight Plan, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-900] (Washington, D.C.: June 
2007). 

[5] GAO, Department of Homeland Security: Successes and Challenges in 
DHS's Effort to Create an Effective Acquisition Organization 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-179] (Washington, 
D.C.: Mar. 29, 2005). 

[6] GAO, Information Technology: DHS Needs to Fully Define and 
Implement Policies and Procedures for Effectively Managing Investments, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-424] (Washington, 
D.C.: April 27, 2007). 

[7] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-20. 

[8] GAO, Federal Acquisitions and Contracting: Systemic Challenges Need 
Attention, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1098T] 
(Washington, D.C.: July 17, 2007). 

[9] GAO, Department of Homeland Security: Improved Assessment and 
Oversight Needed to Manage Risk of Contracting for Selected Services, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-990] (Washington, 
D.C.: September 2007). 

[10] GAO, Interagency Contracting: Improved Guidance, Planning, and 
Oversight Would Enable the Department of Homeland Security to Address 
Risks, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-996] 
(Washington, D.C.: September 2006), and GAO, Department of Homeland 
Security: Better Planning and Assessment Needed to Improve Outcomes for 
Complex Service Acquisitions, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-08-263] (Washington, D.C.: April 2008). 

[11] GAO, Homeland Security: Departmentwide Integrated Financial 
Management Systems Remain a Challenge, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-536] (Washington, D.C.: June 
21, 2007). 

[12] See for example, Department of Homeland Security Inspector 
General, Major Management Challenges Facing the Department of Homeland 
Security, OIG-08-11 (January 2008), and Department of Homeland Security 
Inspector General, Transportation Security Administration's Information 
Technology Managed Services Contract, OIG-06-23 (February 2006). 

[13] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-263]. 

[14] Begun in 2001, ACE is intended to replace and supplement existing 
cargo processing technology and will be developed and deployed in a 
series of increments. The goals of ACE include (1) supporting border 
security by enhancing analysis and information sharing with other 
government agencies and providing CBP with the means to decide before a 
shipment reaches the border if it should be targeted or expedited and 
(2) streamlining time-consuming and labor-intensive tasks for CBP 
personnel and the trade community through a national trade account and 
single Web-based interface. Task Order 23 was the sole focus of our 
review. 

[15] GAO, Secure Border Initiative: Observations on the Importance of 
Applying Lessons Learned to Future Projects, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-08-508T] (Washington D.C.: Feb. 
27, 2008). 

[16] GAO, Secure Border Initiative: DHS Needs to Address Significant 
Risks in Delivering Key Technology Investment, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-08-1148T] (Washington D.C.: Sept. 
10, 2008). 

[17] GAO, Coast Guard: Status of Efforts to Improve Deepwater Program 
Management and Address Operational Challenges, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-575T] (Washington D.C.: Mar. 
8, 2007). 

[18] GAO, Coast Guard: Change in Course Improves Deepwater Management 
and Oversight, but Outcome Still Uncertain, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-08-745] (Washington, D.C.: June 
24, 2008). 

[19] FAR section 37.114, Special Acquisition Requirements; OFPP Policy 
Letter 93-1: Management Oversight of Service Contracting, Office of 
Federal Procurement Policy, May 18, 1994. 

[20] For example, GAO, Reliability of Federal Procurement Data, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-295R] (Washington, 
D.C.: Dec. 30, 2003); GAO, Improvements Needed to the Federal 
Procurement Data System-Next Generation, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-05-960R] (Washington, D.C.: Sept. 
27, 2005); and General Services Administration Inspector General, 
Review of the Federal Procurement Data System-Next Generation (FPDS-
NG), Report Number A040127/O/T/F06016 (March 2006). 

[21] Authorized by section 1423 of the Services Acquisition Reform Act 
of 2003 as part of the National Defense Authorization Act of 2004. Pub. 
L. No. 108-136. 

[22] Report of the Acquisition Advisory Panel to the Office of Federal 
Procurement Policy and the United States Congress. January 2007. 

[23] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-900]. 

[End of section] 

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