This is the accessible text file for GAO report number GAO-06-783R 
entitled 'Department of Homeland Security's Use of Special Streamlined 
Acquisition Authorities in Section 833 of the Homeland Security Act of 
2002' which was released on June 21, 2006. 

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June 20, 2006: 

The Honorable Susan M. Collins: 
Chairman: 
The Honorable Joseph I. Lieberman: 
Ranking Member: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

The Honorable Tom Davis: 
Chairman: 
The Honorable Henry A. Waxman: 
Ranking Member: 
Committee on Government Reform: 
House of Representatives: 

The Honorable Peter T. King: 
Chairman: 
The Honorable Bennie G. Thompson: 
Ranking Member: 
Committee on Homeland Security: 
House of Representatives: 

Subject: Department of Homeland Security's Use of Special Streamlined 
Acquisition Authorities in Section 833 of the Homeland Security Act of 
2002: 

In creating the Department of Homeland Security (DHS) in the wake of 
September 11, 2001, some in Congress were concerned that the Department 
might not be able to conduct acquisitions with sufficient speed, 
particularly in an emergency. To that end, Congress enacted section 833 
of the Homeland Security Act of 2002, which provides DHS with special 
streamlined acquisition authorities. Before those authorities could be 
used, however, the Secretary of Homeland Security or a delegate would 
have to determine in writing that the DHS mission would be seriously 
impaired without the use of the authorities. The special streamlined 
acquisition authorities included: 

Increasing the micro-purchase threshold from $2,500 to $7,500. 
Purchases below the micro-purchase threshold do not require competitive 
quotes or compliance with the "Buy America" act. Only certain employees 
would be authorized to make procurements under this authority. 

² Increasing the limit on the use of simplified acquisition procedures 
from $100,000 to $200,000 for contracts awarded and performed within 
the United States, and to $300,000 for contracts awarded and performed 
outside the United States. Simplified acquisition procedures permit 
agencies to use streamlined techniques to acquire good and 
services.[Footnote 1] 

Increasing from $5,000,000 to $7,500,000 the ceiling on the use of 
special simplified procedures to acquire property and services the 
Secretary deems to be "commercial items" under federal procurement 
laws. 

These authorities are scheduled to expire on September 30, 2007. 

Section 833 of the act directed us to report on the Department's use of 
these special streamlined acquisition authorities. Our objectives were 
to determine (1) the extent to which DHS has used the special 
authorities and (2) whether DHS sees a need to extend the authorities 
beyond September 2007. We conducted our review from April to May 2006 
in accordance with generally accepted government auditing standards. 

RESULTS: 

The Department of Homeland Security has never used the special 
streamlined acquisition authorities provided in section 833. According 
to the Director of Acquisition Oversight at DHS, use of the special 
authorities has not been needed because existing authorities have been 
sufficient to meet DHS requirements. For example, the Department makes 
frequent use of the current $2,500 micro-purchase threshold and that 
threshold may increase up to $15,000 for domestic purchases made in 
support of a contingency operation if certain determinations are made. 
With respect to simplified acquisition procedures, the Department 
currently uses these procedures for nearly 2,000 procurements annually 
up to $100,000, and according to DHS, increasing the limit to $200,000 
would make only 100 additional procurements eligible for these 
procedures. For these or other procurements, including those involving 
commercial items, there is authority under Part 16.603 of the Federal 
Acquisition Regulation (FAR) to award letter contracts in emergencies 
or other appropriate circumstances, up to the warranted level of the 
procurement official. Finally, DHS can use the flexibility provided by 
FAR Part 6.3, which provides for contracting without full and open 
competition if the required justifications and approvals are obtained. 

Agency officials also said that the increased authorities provided for 
under section 833 are not worth the time and effort required to justify 
their use given the relatively modest increase in flexibility those 
authorities provide. Specifically, officials said that the approval 
procedures for using the authorities are time consuming and noted that 
approval can only be delegated to a presidential appointee who has been 
confirmed by the Senate. At this time, this limits the approving 
officials within the Department to just the Secretary, the Deputy 
Secretary, and the Under Secretary for Management. 

DHS officials told us that the Department has no interest in extending 
the special acquisition authorities of section 833. They believe the 
authorities should be allowed to expire at the end of September 2007. 

AGENCY COMMENTS: 

We provided a draft of this letter to the Department of Homeland 
Security for its review and comment. Department officials indicated in 
an e-mail message that the letter was accurate and that the Department 
had no additional comments. 

We are sending copies of this letter to other interested congressional 
committees and Members, and to the Secretary of Homeland Security. We 
will make copies available to others upon request. In addition, it will 
be available at no charge on the GAO Web site at [Hyperlink, 
http://www.gao.gov]. 

If you have any questions regarding this letter, please contact me at 
(202) 512-4841 or John Needham, Assistant Director, at (202) 512-5274. 
Contact points for our Office of Congressional Relations and Public 
Affairs may be found on the last page of this letter. Other 
contributors to this effort include Myra Watts Butler, John Krump, and 
Robert Swierczek. 

Signed by: 

William T. Woods: 
Director: 

Acquisition and Sourcing Management: 

(120534): 

FOOTNOTES 

[1] While simplified acquisition procedures promote competition to the 
maximum extent practicable, they are designed to: (1) reduce 
administrative costs; (2) improve opportunities for small, 
disadvantaged, and women-owned businesses to obtain a fair proportion 
of government contracts; (3) promote efficiency and effectiveness in 
contracting; and (4) avoid unnecessary burdens for agencies and 
contractors. Federal Acquisition Regulation, at 13.002. 

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