Department of Homeland Security: Status and Accountability	 
Challenges Associated with the Use of Special DHS Acquisition	 
Authority (07-FEB-08, GAO-08-471T).				 
                                                                 
Other transaction authority was created to enhance the federal	 
government's ability to acquire cutting-edge science and	 
technology by attracting nontraditional contractors that have not
typically pursued government contracts. The Homeland Security Act
of 2002 granted the department the temporary authority to enter  
into other transactions for research and prototype projects for a
period of 5 years. The Consolidated Appropriations Act of 2008	 
extended this authority until September 30, 2008. This testimony 
discusses (1) the extent to which DHS has used its other	 
transaction authority, (2) the status of DHS's implementation of 
GAO's previous recommendations, and (3) the accountability	 
challenges associated with the use of these agreements. 	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-471T					        
    ACCNO:   A80551						        
  TITLE:     Department of Homeland Security: Status and	      
Accountability Challenges Associated with the Use of Special DHS 
Acquisition Authority						 
     DATE:   02/07/2008 
  SUBJECT:   Accountability					 
	     Conflict of interests				 
	     Contract authority 				 
	     Contracts						 
	     Foreign policies					 
	     Funds management					 
	     Government contracts				 
	     Homeland security					 
	     Internal controls					 
	     Research and development				 
	     Risk assessment					 
	     Technology 					 

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GAO-08-471T

   

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United States Government Accountability Office: 
GAO: 

Testimony before the Subcommittee on Emerging Threats, Cybersecurity, 
and Science and Technology, Committee on Homeland Security Committee, 
House of Representatives: 

For Release on Delivery:
Expected at 2:00 p.m. EST: 
Thursday, February 7, 2008: 

Department Of Homeland Security: 

Status and Accountability Challenges Associated with the Use of Special 
DHS Acquisition Authority: 

Statement of: 

John K. Needham: 
Acting Director, Acquisition and Sourcing Management: 

GAO-08-471T: 

GAO Highlights: 

Highlights of GAO-08-471T, a report to the Subcommittee on Emerging 
Threats, Cybersecurity, and Science and Technology, Committee on 
Homeland Security Committee, House of Representatives. 

Why GAO Did This Study: 

Other transaction authority was created to enhance the federal 
governmentï¿½s ability to acquire cutting-edge science and technology by 
attracting nontraditional contractors that have not typically pursued 
government contracts. The Homeland Security Act of 2002 granted the 
department the temporary authority to enter into other transactions for 
research and prototype projects for a period of 5 years. The 
Consolidated Appropriations Act of 2008 extended this authority until 
September 30, 2008. 

This testimony discusses (1) the extent to which DHS has used its other 
transaction authority, (2) the status of DHSï¿½s implementation of GAOï¿½s 
previous recommendations, and (3) the accountability challenges 
associated with the use of these agreements. 

What GAO Found: 

DHS entered into 37 other transaction agreements between fiscal years 
2004 and 2007, most of which were entered into in the first 2 years. 
Though it has since used this authority less frequently, it continues 
to obligate funds for its earliest agreements. Furthermore, about 77 
percent of the dollars spent on these agreements have been for 7 of 
DHSï¿½s 37 agreements. Contracting representatives also told us that all 
of the agreements to date were for prototype projects and that each 
agreement included at least one nontraditional contractor. GAO plans 
further review of DHSï¿½s use of other transaction agreements as required 
by the Homeland Security Act of 2002. 

DHS has made efforts to improve its use of other transaction agreements 
and to prevent conflicts of interest. The department has taken the 
following steps to address prior GAO recommendations including: 

* creating guidance on when to include audit provisions in other 
transaction agreements; 

* creating a training program on using these agreements; and; 

* improving controls over conflicts of interest. 

GAO also recommended that DHS capture knowledge gained from the 
agreements it has entered into. The department has compiled lessons 
learned from the Department of Defense, but the document is not related 
to DHSï¿½s experience. Furthermore, while DHS created guidance on when to 
include audit provisions in agreements, its guidance only applies to 
certain prototype projects and only in certain circumstances. 

Risks inherent with the use of other transaction agreements create 
several accountability challenges. These challenges include attracting 
and ensuring the use of nontraditional contractors, acquiring 
intellectual property rights, ensuring financial control, and 
maintaining a skilled acquisition workforce with the expertise to 
create and maintain these agreements. 

DHSï¿½s Other Transaction Agreements and Related Spending from Fiscal 
Year 2004 to 2007 (approximations in millions): 

Year: 2004; 
Number of other transaction agreements: 13 million; 
Total value of other transaction agreements: 350 million. 

Year: 2005; 
Number of other transaction agreements: 17 million; 
Total value of other transaction agreements: 45 million. 

Year: 2006; 
Number of other transaction agreements: 4 million; 
Total value of other transaction agreements: 5 million. 

Year: 2007; 
Number of other transaction agreements: 4.5 million; 
Total value of other transaction agreements: 50 million. 

Source: GAO analysis of DHS data. 

What GAO Recommends: 

While GAO is not making recommendations in this testimony, GAO has made 
recommendations over the past few years to help improve DHSï¿½s Science 
and Technology Directorateï¿½s use its other transaction authority. The 
department has generally concurred with these recommendations and has 
taken action to improve its use of other transaction authority, but has 
not fully addressed all of GAOï¿½s recommendations. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.GAO-08-471T]. For more information, contact John 
K. Needham at (202) 512-4841 or [email protected]. 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

Mr. Chairman and Members of the Subcommittee: 

Thank you for inviting me here today to discuss the Department of 
Homeland Security's (DHS) use of its other transaction authority. 
According to DHS officials, this authority, which is set to expire in 
September 2008, is a critical tool because it has given the department 
the flexibility to attract new contractors to help develop and manage 
the mission of an integrated program of science and technology from 
basic research to production. However, the flexibility afforded by 
other transaction authority also carries the risk of reduced 
accountability and transparency. For this reason, it is important to 
monitor the use of this authority to help ensure that the benefits 
outweigh the risks to the government. We have previously reviewed DHS's 
use of this authority and ethics related management controls and made 
recommendations for improvements. 

My statement today will focus on (1) the extent to which DHS has used 
its other transaction authority, (2) the status of DHS's implementation 
of GAO's previous recommendations, and (3) the accountability 
challenges associated with the use of these agreements. In preparation 
for this hearing, we obtained recent data on other transaction 
agreements from DHS and looked at several of these agreements, 
interviewed DHS representatives from the Science and Technology 
Directorate, reviewed related reports and studies, and identified the 
efforts DHS has made to address our previous recommendations.[Footnote 
1] We conducted our work from January to February 2008 and in 
accordance with the 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. We plan to conduct 
additional audit work on DHS's use of other transaction authority as 
required by the Homeland Security Act of 2002. 

Summary: 

In fiscal years 2004 through 2007, DHS entered into 37 other 
transaction agreements with a total value of $443 million. DHS entered 
into most of the agreements in the first 2 fiscal years, with only 
seven new agreements in 2006 and 2007 combined. Most of the spending 
was for a small number of its earliest agreements. Science and 
Technology (S&T) Directorate contracting representatives stated that 
all of the 37 agreements were for prototype projects and included at 
least one nontraditional contractor. 

DHS has taken steps to improve its use of other transaction agreements 
and to avoid conflicts of interest. Specifically, the department has 
developed guidance on when to include audit provisions in agreements, 
developed an other transaction agreement training program, and improved 
management controls over conflicts of interest. DHS also created a 
document on lessons learned to capture knowledge gained from using 
other transactions, but the document is not specific to DHS's 
experience. 

Risks inherent with the use of other transaction agreements create 
several accountability challenges. These challenges include attracting 
and ensuring the use of nontraditional contractors, acquiring 
intellectual property rights, ensuring financial control, and 
maintaining a skilled acquisition workforce. 

Background: 

Other transaction authority was created to enhance the federal 
government's ability to acquire cutting-edge science and technology by 
attracting nontraditional contractors that have not typically pursued 
government contracts. Other transactions are agreements other than 
government contracts, grants, or cooperative agreements and may take a 
number of forms. These agreements are generally not subject to the FAR. 
This authority originated in 1958 when Congress gave the National 
Aeronautics and Space Administration (NASA) the authority to enter into 
contracts, leases, cooperative agreements, or "other transactions." In 
1989, Congress granted the Defense Advanced Research Projects Agency 
(DARPA) temporary authority to use other transactions for advanced 
research projects. In 1991, Congress made this authority permanent and 
extended it to the military services. In 1993, Congress temporarily 
expanded DARPA's other transaction authority, allowing the agency to 
use the agreements for prototype projects. The Homeland Security Act of 
2002 created DHS and granted the agency the authority to enter into 
other transactions for research and development and prototype projects 
for a period of 5 years. Congress granted DHS this authority to attract 
nontraditional[Footnote 2] firms that have not worked with the federal 
government, such as high-tech commercial firms that have resisted doing 
business with the government because of the requirements mandated by 
the laws and regulations that apply to traditional FAR contracts. The 
Consolidated Appropriations Act for 2008 extended this authority until 
September 30, 2008.[Footnote 3] 

DHS began operations in March 2003 incorporating 22 federal agencies to 
coordinate and centralize the leadership of many homeland security 
activities under a single department.[Footnote 4] Since then, DHS has 
become the third largest agency for procurement spending in the U.S. 
government. DHS's acquisition needs range from basic services to 
complex investments, such as sophisticated screening equipment for air 
passenger security and upgrading the Coast Guard's offshore fleet of 
surface and air assets. In fiscal year 2006, according to agency data, 
the department obligated $15.9 billion for goods and services to 
support its broad and complex acquisition portfolio. DHS's S&T 
Directorate supports the department's mission by serving as its primary 
research and development arm. In fiscal year 2006, according to S&T 
data, S&T obligated over $1.16 billion dollars to fund and develop 
technology in support of homeland security missions. The directorate 
has funded technology research and development in part through the use 
of other transaction authority. According to agency officials, S&T is 
the only component within DHS that uses this authority. Because of 
their flexibility, other transactions give DHS considerable latitude in 
negotiating with contractors on issues such as intellectual property, 
reporting on cost, and data rights. In addition, it may relieve the 
parties from certain contract administration requirements that 
nontraditional contractors find burdensome. 

DHS's Use of Other Transaction Authority Has Declined Since Fiscal Year 
2005: 

The number and value of DHS's other transaction agreements has 
decreased since 2005. Its recent other transaction agreements represent 
just a small portion of its total procurement spending. Most of the 
department's use of other transaction authority to date occurred 
between fiscal years 2004 and 2005. Though it has since used this 
authority less frequently, it continues to obligate funds for its 
earliest agreements. About 77 percent of the $443 million spent on 
DHS's agreements has been on 7 of the 37 agreements. S&T contracting 
representatives reported that all of these agreements were for 
prototype projects. 

In fiscal year 2006, other transactions accounted for almost $153 
million of DHS's reported $15.9 billion in procurement obligations, 
approximately 1 percent (see fig. 1). In addition, other transactions 
represent only a small portion of S&T spending. For example, the 
department estimates that from fiscal years 2004 through 2007, S&T 
spent 13 percent of its total obligations on its other transaction 
agreements.[Footnote 5] 

Figure 1: DHS Other Transaction Spending as a Portion of Science & 
Technology and Overall Procurement Spending, Fiscal Year 2006: 

[See PDF for image] 

This figure is a pie-chart depicting the following data: 

* DHS 2006 procurement obligations (without S&T): 93%; 

* S&T 2006 total procurement obligations: 7%; 
- All other S&T 2006 obligations: 6%; 
- S&T 2006 other transaction obligations: 1%. 

Source: GAO analysis of DHS data. 

[End of figure] 

DHS reported a total of 37 other transaction agreements, 30 of which 
were entered into in fiscal years 2004 and 2005. Accordingly, 88 
percent of total spending was for agreements reached in fiscal years 
2004 and 2005 (see fig. 2). While the total number of new agreements 
has decreased since 2005, the total obligations under these agreements 
have generally increased because funds are obligated for agreements 
made in prior years (see fig. 3). 

Figure 2: DHS's Other Transaction Agreements by Agreement Fiscal Year 
and Associated Obligations: 

[See PDF for image] 

This figure is a combination line and vertical bar graph depicting the 
following data: 

Fiscal year: 2004; 
Agreements per year: 13; 
Total spent by agreement year: $16 million. 

Fiscal year: 2005; 
Agreements per year: 17; 
Total spent by agreement year: $2 million. 

Fiscal year: 2006; 
Agreements per year: 3; 
Total spent by agreement year: 0. 

Fiscal year: 2007; 
Agreements per year: 4; 
Total spent by agreement year: $50 million. 

Source: GAO analysis of DHS data. 

[End of figure] 

Figure 3: DHS's Other Transaction Agreements and Associated Obligations 
by Fiscal Year: 

[See PDF for image] 

This figure is a combination line and vertical bar graph depicting the 
following data: 

Fiscal year: 2004; 
Agreements per year: 13; 
Total spent by fiscal year: $75 million. 

Fiscal year: 2005; 
Agreements per year: 17; 
Total spent by fiscal year: $120 million. 

Fiscal year: 2006; 
Agreements per year: 3; 
Total spent by fiscal year: $150 million. 

Fiscal year: 2007; 
Agreements per year: 4; 
Total spent by fiscal year: $130 million. 

Source: GAO analysis of DHS data. 

[End of figure] 

About 77 percent of obligations was for the seven largest other 
transaction agreements (see appendix I). According to S&T, all of these 
agreements included at least one nontraditional contractor, most 
commonly as a subcontractor. 

Though the acquisition outcomes related to DHS's use of other 
transaction authority have not been formally assessed, the department 
estimates that at least some of these agreements have resulted in time 
and cost savings. According to an S&T contracting representative, all 
of its current agreements are for development of prototypes, but none 
of the projects have yet reached production. Therefore, it is too soon 
to evaluate the results. However, the department believes that some of 
these agreements have reduced the time it takes to develop its current 
programs, as compared to a traditional FAR-based contract. In addition, 
DHS has stated that its two cost-sharing agreements for development of 
its Counter-MANPADS technology have resulted in savings of over $27 
million and possibly more. However, the extent to which these savings 
accrue to the government or to the contractor is unclear. 

DHS Has Made Progress in Improving Its Use of Its Other Transaction 
Authority, but Has Yet to Fully Address Prior GAO Recommendations: 

Soon after DHS established the S&T Directorate, S&T issued other 
transaction solicitations using some commonly accepted acquisition 
practices and knowledge-based acquisition principles. For example, DHS 
used integrated product teams and contractor payable milestone 
evaluations to manage other transaction agreements.[Footnote 6] To 
quickly implement its early projects, S&T relied on experienced staff 
from DARPA, other government agencies, and industry to help train S&T 
program and contracting staff in using other transactions and help DHS 
create and manage the acquisition process. S&T also brought in program 
managers, scientists, and experts from other government agencies on a 
temporary basis to provide assistance in other areas. Beyond these 
efforts, GAO found some areas for improvement and recommended that: DHS 
provide guidance on when to include audit provisions in agreements; 
provide more training on creating and managing agreements; capture 
knowledge gained from current agreements for future use; and take 
measures to help rotational staff avoid conflicts of interest. DHS has 
implemented some measures to address many of these recommendations; 
however, it has not addressed all of them. 

* Provide guidance: We recommended that DHS develop guidance on when it 
is appropriate to include audit provisions in other transaction 
agreements. Subsequently, DHS modified its management directive to add 
guidance on including GAO audit provisions in agreements.[Footnote 7] 
However, the guidance only addresses prototype agreements over $5 
million. While S&T contracting officials recently told us that they 
have only issued other transaction agreements for prototypes, they 
noted that the department intends to issue agreements for research 
projects in the future. In addition, it is unclear how the $5 million 
threshold is to be applied. In at least one agreement, the audit 
provision did not apply to subcontractors unless their work also 
exceeded the $5 million threshold. 

* Provide additional training: We recommended that DHS develop a 
training program for staff on the use of other transactions. DHS has 
developed a training program on other transactions, and S&T contracting 
representatives said they have plans to conduct additional sessions in 
2008. The training includes topics such as intellectual property 
rights, acquisition of property in other transactions, and foreign 
access to technology created under other transaction authority. An S&T 
contracting representative told us the Directorate currently has three 
staff with other transaction warrants and has additional in-house 
expertise to draw on as needed, and they said S&T no longer needs to 
rely on other agencies for contracting assistance. 

* Capture lessons learned: We recommended that DHS capture knowledge 
obtained during the acquisition process for use in planning and 
implementing future other transaction projects. In 2005, DHS hired a 
consultant to develop a "lessons learned" document based on DOD's 
experience using other transactions. This is included in DHS's other 
transaction training. However, it was not evident based on our follow- 
up work that DHS has developed a system for capturing knowledge from 
its own experience regarding other transaction agreements the 
directorate has executed since it was created. 

* Ethics: We made a number of recommendations regarding conflicts of 
interest and ethics within S&T. When the S&T Directorate was 
established in 2003, it hired scientists, engineers, and experts from 
federal laboratories, universities, and elsewhere in the federal 
government for a limited time under the Intergovernmental Personnel Act 
(IPA) with the understanding that these staff would eventually return 
to their "home" institution.[Footnote 8] This created potential 
conflicts of interest for those staff responsible for managing S&T 
portfolios as these staff could be put in a position to make decisions 
on their "home" institutions. We recommended that DHS help the 
portfolio managers assigned through IPA comply with conflict of 
interest laws by improving the S&T Directorate's management controls 
related to ethics. DHS has complied with these recommendations to 
define and standardize the role of these portfolio managers in the 
research and development process; provide regular ethics training for 
these portfolio managers; and determine whether conflict of interest 
waivers are necessary. The only outstanding recommendation concerns 
establishing a monitoring and oversight program of ethics-related 
management controls. Furthermore, an S&T official told us the use of 
rotational portfolio managers has largely been eliminated with the 
exception of one portfolio manager who is currently serving a two-year 
term. 

Inherent to Other Transactions' Flexibility Are Certain Accountability 
Challenges: 

With federal agencies' increased reliance on contractors to perform 
mission related functions comes an increased focus on the need to 
manage acquisitions in an efficient, effective, and accountable manner. 
The acquisition function is one area GAO has identified as vulnerable 
to fraud, waste, abuse, and mismanagement. An unintended consequence of 
the flexibility provided by other transaction authority is the 
potential loss of accountability and transparency. Accordingly, 
management controls are needed to ensure intended acquisition outcomes 
are achieved while minimizing operational challenges. Operational 
challenges to successfully making use of other transaction authority 
include: attracting and ensuring the use of non-traditional 
contractors; acquiring intellectual property rights; financial control; 
and maintaining a skilled acquisition workforce. 

Nontraditional Contractors: One of the goals of using other 
transactions is to attract firms that traditionally have not worked 
with the federal government. S&T contracting officials confirmed that 
at least one nontraditional contractor participated in each other 
transaction agreement, generally as a partner to a traditional 
contractor. We have not assessed the extent of the involvement of 
nontraditional contractors or what portion of the funding they receive. 
However, we have reported in the past that DOD had a mixed record in 
attracting nontraditional contractors.[Footnote 9] 

Intellectual Property Rights: One reason companies have reportedly 
declined to contract with the government is to protect their 
intellectual property rights. Alternatively, insufficient intellectual 
property rights could hinder the government's ability to adapt 
developed technology for use outside of the initial scope of the 
project. Limiting the government's intellectual property rights may 
require a trade-off. On the one hand, this may encourage companies to 
work with the government and apply their own resources to efforts that 
advance the government's interests. However, it also could limit the 
government's production options for items that incorporate technology 
created under an other transaction agreement. For example, we 
previously reported that DARPA received an unsolicited proposal from a 
small commercial firm to develop and demonstrate an unmanned aerial 
vehicle capable of vertical take-off and landing based on the company's 
existing proprietary technology. DARPA agreed not to accept any 
technical data in the $16.7 million agreement. To obtain government 
purpose rights,[Footnote 10] DOD would have to purchase 300 vehicles or 
pay an additional $20 million to $45 million.[Footnote 11] Therefore, 
using an other transaction agreement could potentially limit 
competition and lead to additional costs for follow-on work. 

Financial Controls and Cost Accounting: Other transactions are exempt 
from CAS. While other transaction recipients have flexibility in 
tracking costs, they still need to provide cost information and 
demonstrate that government funds are used responsibly. This is 
particularly true for traditional contractors that are performing work 
under both FAR-based contracts as well as other transaction agreements. 
For example, contractors may use in-kind donations to satisfy cost- 
sharing requirements; therefore, it is important that DHS has a means 
to ensure that companies do not satisfy their other transaction cost- 
sharing requirements with work funded under a FAR-based contract. 

Maintaining a Skilled Acquisition Workforce: Other transactions do not 
have a standard structure based on regulatory guidelines and therefore 
can be challenging to create and administer. Prior GAO work has noted 
the importance of maintaining institutional knowledge sufficient to 
maintain government control. The unique nature of other transaction 
agreements means that federal government acquisition staff working with 
these agreements should have experience in planning and conducting 
research and development acquisitions, strong business acumen, and 
sound judgment to enable them to operate in a relatively unstructured 
business environment. Retaining a skilled acquisition workforce has 
been a continual challenge at DHS, and we have ongoing work in this 
area for this Committee. 

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

Contacts and Acknowledgements: 

For further information regarding this testimony, please contact John 
Needham at (202) 512-4841 or ([email protected]). Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this product. Staff making key contributions to 
this statement were Amelia Shachoy, Assistant Director; Brandon Booth; 
Justin Jaynes; Tony Wysocki; Karen Sloan; Laura Holliday; and John 
Krump. 

[End of section] 

Appendix I: Selected DHS Other Transaction Agreements: 

Table 1: Seven Largest DHS Other Transaction Agreements Entered into 
Since Fiscal Year 2004 (dollars in millions): 

Project: Counter-Man Portable Air Defense System; 
Prime contractor: Northrop Grumman Systems Corporation; 
Nontraditional contractor: FedEx; 
Total obligations: $105.5. 

Project: Counter-Man Portable Air Defense System; 
Prime contractor: BAE Systems Information and Electronics Systems 
Integration I; 
Nontraditional contractor: American Airlines and ABX Air Inc.; 
Total obligations: 105.4. 

Project: Bioagent Autonomous Networked Detectors; 
Prime contractor: U.S. Genomics, Inc.; 
Nontraditional contractor: Impact Technologies Consulting; 
Total obligations: 37.0. 

Project: Kentucky Critical Infrastructure Protection Institute; 
Prime contractor: National Institute for Hometown Security, Inc.; 
Nontraditional contractor: Prime contractor is nontraditional; 
Total obligations: 36.5. 

Project: Bio Watch Gen 3 Detection Systems - A Microfluidic-Based 
Autonomous Pathogen Detection System; 
Prime contractor: Microfluidic Systems Inc; 
Nontraditional contractor: Cycle Start; 
Total obligations: 23.3. 

Project: Bio Watch Gen 3 Detection Systems - Lab-in-a-Tube (LIAT) 
Bioagent Autonomous Networked Detector; 
Prime contractor: IQuum LLC; 
Nontraditional contractor: Dyax Corporation; 
Total obligations: 18.4. 

Project: Bioagent Autonomous Networked Detectors; 
Prime contractor: Science Applications International Corp (SAIC); 
Nontraditional contractor: Genomic HealthCare (GHC); 
Total obligations: 15.4. 

Source: DHS reported data on other transaction as of January 2008. 

[End of table] 

[End of section] 

Footnotes: 

[1] We followed up on recommendations made in GAO, Homeland Security: 
Further Action Needed to Promote Successful Use of Special DHS 
Acquisition Authority; and GAO-05-136 (Washington, D.C.: Dec. 15, 
2004), and GAO, Homeland Security: DHS Needs to Improve Ethics-Related 
Management Controls for the Science and Technology Directorate, GAO-06- 
206 (Washington, D.C.: Dec. 22, 2005). 

[2] DHS's Management Directive No. 0771.1, July 8, 2005, defines a 
nontraditional government contractor as a business unit that has not, 
for at least a period of 1 year prior to the date of entering into or 
performing an other transaction agreement, entered into or performed: 
any contract subject to full coverage under federal Cost Accounting 
Standards (CAS); or any contract in excess of $500,000 to carry out 
prototype projects or to perform basic, applied, or advanced research 
projects for a federal agency that is subject to compliance with the 
Federal Acquisition Regulation (FAR). 

[3] Consolidated Appropriations Act, 2008, Pub. L. No. 110-161, Dec. 
26, 2007. 

[4] The Homeland Security Act of 2002, Pub. L. 107-296, Sec. 101, Nov. 
25, 2002, defined the department's missions to include preventing 
terrorist attacks within the United States; reducing U.S. vulnerability 
to terrorism; and minimizing the damages, and assisting in the recovery 
from, attacks that occur within the United States. 

[5] According to S&T, total spending through other transaction 
agreements includes four that are managed by DHS's Domestic Nuclear 
Detection Office (DNDO). S&T contracting representatives told us that 
these agreements were entered into by the S&T Directorate before DNDO 
was created. 

[6] Payable milestones are predetermined, observable technical events 
or other measures of progress that the contractor and government agree 
upon in advance. 

[7] The guidance grants GAO access for a period of 3 years after the 
final payment is made. 

[8] The Intergovernmental Personnel Act (IPA) of 1970, U.S.C. ï¿½ï¿½ 3371- 
76, allows employees to be temporarily assigned to a federal agency. 

[9] GAO, Acquisition Reform: DOD's Guidance on Using Section 845 
Agreements Could Be Improved, GAO/NSIAD-00-33 (Washington, D.C.: April, 
2000). 

[10] Government purpose rights enable the government to allow others to 
use the data for government purposes. See GAO, Intellectual Property: 
Information on the Federal Framework and DOD's Other Transaction 
Authority, GAO-01-980T (Washington, D.C.: July 2001). 

[11] GAO-01-980T. 

[End of section] 

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