Homeland Security:

Successes and Challenges in DHS's Efforts to Create an Effective Acquisition Organization

GAO-05-179: Published: Mar 29, 2005. Publicly Released: Apr 28, 2005.

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Department of Homeland Security (DHS) organizations are expected to work together to protect the United States from terrorism. To support this primary mission, DHS has been acquiring billions of dollars worth of goods and services. DHS also has been working to integrate the disparate acquisition processes and systems that organizations brought with them when DHS was created 2 years ago. GAO was asked to identify (1) areas where DHS has been successful in promoting collaboration among its various organizations and (2) areas where DHS still faces challenges in integrating the acquisition function across the department. GAO was also asked to assess DHS's progress in implementing an effective review process for major, complex investments.

DHS's disparate organizations have quickly established collaborative relationships to leverage spending for various goods and services without losing focus on small businesses. DHS is using strategic sourcing, that is, formulating purchasing strategies to meet departmentwide requirements for specific commodities, such as office supplies, boats, energy, and weapons. By fostering collaboration, DHS has leveraged its buying power and savings are expected to grow. Also off to a good start is the small business program, whose reach is felt across DHS. Representatives have been designated in each DHS procurement office to help ensure that small businesses have opportunities to compete for DHS's contract dollars. In contrast, lack of clear accountability is hampering DHS's efforts to integrate the acquisition functions of its numerous organizations into an effective whole. DHS remains a collection of disparate organizations, many of which are performing functions with insufficient oversight, giving rise to an environment rife with challenges. Some of DHS's organizations have major, complex acquisition programs that are subject to a multitiered investment review process to help reduce risk and increase chances for successful outcomes in terms of cost, schedule, and performance. Part of the review process features a knowledge-based acquisition approach pioneered by successful commercial firms. DHS's adaptation of this best practices approach, however, does not require two critical management reviews and is missing some key information before decisions are made to invest additional resources. In addition, contractor tracking and oversight is not fully incorporated into DHS policy and guidance. Finally, some aspects of the review process--which has been under revision for many months--need clarification.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To help ensure that DHS receives the goods and services it needs at the best value to the government, the Secretary of Homeland Security should establish a structure to ensure continued support for commodity councils, such as appointing full-time dedicated commodity managers, to ensure that the commodity councils develop long-term strategies, maintain momentum, and continue to realize savings.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: After completing an assessment of its the existing DHS commodity councils, DHS decided to realign the original councils and other investments across three principal commodity councils that account for about 70 percent of DHS requirements. Those councils are: Information Technology, Professional Services, and Security (all related products). Also, DHS hired two business analysts to accommodate the business analysis on a matrix basis. DHS expects to have three dedicated commodity managers by the end of calendar year 2008.

    Recommendation: To help ensure that DHS receives the goods and services it needs at the best value to the government, the Secretary of Homeland Security should provide the Office of the Chief Procurement Officer with sufficient resources and enforcement authority to enable effective, departmentwide oversight of acquisition policies and procedures.

    Agency Affected: Department of Homeland Security

    Status: Closed - Not Implemented

    Comments: DHS does not agree with this recommendation. DHS believes that the Chief Procurement Officer has sufficient authority within the department.

    Recommendation: To help ensure that DHS receives the goods and services it needs at the best value to the government, the Secretary of Homeland Security should conduct a departmentwide assessment of the number of contracting staff and, if a workload imbalance is found, take steps to correct it by re-aligning resources.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: The Department of Homeland Security's Office of the Chief Procurement Officer has made progress in addressing acquisition workforce challenges, including contracting staff, through initiatives related to recruiting, hiring, and training contract specialists. Based on recent audit work discussed in GAO-09-30, this recommendation is closed as implemented.

    Recommendation: To help ensure that DHS receives the goods and services it needs at the best value to the government, the Secretary of Homeland Security should direct higher-level management attention to the implementation of the working capital fund (which is to be used to fund contracting staff for the Office of Procurement Operations) by, for example, determining the level of contracting support needed by the organizations relying on this office, ensuring that appropriate funds are committed to hire needed contracting staff, and ensuring that funds are available on an ongoing basis for continuity.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: According to the DHS Congressional Budget Justification for 2010, the Office of the Chief Financial Officer planned to establish a working capital governance board and review all working capital funds activities, as well as to publish standardized criteria for use of the working capital fund. According to the 2011 justification, the board was formally established to provide oversight and help ensure all activities and cost allocations are reviewed and approved. The board also developed criteria for determining whether a new activity should be included in the working capital fund.

    Recommendation: To help ensure that DHS receives the goods and services it needs at the best value to the government, the Secretary of Homeland Security should revise the October 2004 management directive "Acquisition Line of Business Integration and Management" to eliminate reference to the Coast Guard and Secret Service being statutorily exempt from complying.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: In 2007, the Department of Homeland Security established the Acquisition Program Management Division (APMD) within the Office of the Chief Procurement Officer to develop and maintain acquisition policy, procedures and guidance, and provide support and assistance for Department acquisitions and acquisition personnel. The APMD's November 2008 Acquisition Directive 102-01 applies to all DHS components. By integrating the Department's acquisition function and bringing all components under the same management process, DHS actions address the intent of the recommendation.

    Recommendation: To help ensure that DHS receives the goods and services it needs at the best value to the government, the Secretary of Homeland Security should ensure that DHS's management directive on interagency agreements is followed and that fees paid to other agencies are tracked.

    Agency Affected: Department of Homeland Security

    Status: Open

    Comments: DHS concurred with this recommendation. DHS has stated that it plans to do an oversight review of interagency contracts in fiscal year 2010, that will give it visibility into whether it is complying with applicable guidance. In 2011, DHS conducted a special review on interagency agreements. As of the fall of 2012, the report is in the review stage and will be provided to GAO as soon as it is complete.

    Recommendation: To help ensure that DHS leadership is aware of risks as they arise during the acquisition of major, complex systems, the Secretary of Homeland Security, in making revisions to the investment review policy, should require for all complex, developmental investments a formal design review between the integration and demonstration of a program to ensure that the design is stable and has been demonstrated through prototype testing.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: The Department of Homeland Security's November 2008 Acquisition Directive 102-01 requires projects to undergo Acquisition Decision Events and Systems Engineering Life Cycle Reviews to assess project maturity, risk, and technical progress at pre-defined points in the acquisition life cycle. This process includes formal reviews to help ensure that the chosen design performs as expected and that the product is producible within cost, schedule, and quality targets.

    Recommendation: To help ensure that DHS leadership is aware of risks as they arise during the acquisition of major, complex systems, the Secretary of Homeland Security, in making revisions to the investment review policy, should require for all complex, developmental investments a review before initial production.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: The Department of Homeland Security's November 2008 Acquisition Directive 102-01 requires projects to undergo review by the Department's Acquisition Decision Authority to support low rate production. During the "obtain" phase of the acquisition, the project develops, tests, and evaluates the capability. If low rate production is required to support operational testing, it must be approved at Acquisition Decision Event 2B.

    Recommendation: To help ensure that DHS leadership is aware of risks as they arise during the acquisition of major, complex systems, the Secretary of Homeland Security, in making revisions to the investment review policy, should require that program managers supply additional information--such as cost and schedule estimates based on results of a preliminary design review and critical design review--when their major, complex programs are reviewed.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: The Department of Homeland Security's November 2008 Acquisition Directive 102-01 requires projects to undergo Acquisition Decision Events and Systems Engineering Life Cycle Reviews to assess project maturity, risk, and technical progress at pre-defined points in the acquisition life cycle. For example, program managers are required to prepare and update an Acquisition Program Baseline to formally document the project's critical cost, schedule, and performance parameters. Design reviews are also conducted to ensure that projects can meet the stated performance requirements within cost and schedule constraints.

    Recommendation: To help ensure that DHS leadership is aware of risks as they arise during the acquisition of major, complex systems, the Secretary of Homeland Security, in making revisions to the investment review policy, should require program managers to specifically address contractor oversight in their submissions to investment review boards.

    Agency Affected: Department of Homeland Security

    Status: Closed - Not Implemented

    Comments: The Department of Homeland Security's November 2008 Acquisition Directive 102-01 and accompanying Instruction/Guidebook do not require program managers to specifically address contractor oversight in their submissions to the Acquisition Review Board. Therefore, this recommendation is being closed as not implemented.

    Recommendation: To help ensure that DHS leadership is aware of risks as they arise during the acquisition of major, complex systems, the Secretary of Homeland Security should ensure that stakeholders, including acquisition officials in the Office of the Chief Procurement Officer, have adequate time to review investment submissions and provide formal input to decision-making review boards.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: DHS established the Acquisition Program Management Division (APMD) within the Office of the Chief Procurement Officer to manage DHS's Acquisition Review Process. Responsibilities include reviewing acquisitions and preparing decision-support information and analysis for the Acquisition Review Board, and preparing meeting schedules, agendas, and meeting minutes. The nominal timeline for the end-to-end acquisition review process is expected to be 60 days though this timeline will vary with the size, complexity, and readiness of programs/projects. While some challenges remain in implementing an effective oversight system, including ensuring that all major acquisition programs are reviewed, a tracking system is in place and review time frames have improved.

    Recommendation: To help ensure that DHS leadership is aware of risks as they arise during the acquisition of major, complex systems, the Secretary of Homeland Security should implement training for program managers on the investment review process that emphasizes the importance of a knowledge-based approach.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: Established in 2007, the Department of Homeland Security's Acquisition Program Management Division (APMD) is responsible for developing and maintaining acquisition policy, procedures and guidance, and providing support and assistance for Department acquisitions and acquisition personnel. In conjunction with the November 2008 Acquisition Directive 102-02, the APMD issued an Instruction/Guidebook which explains how to accomplish the requirements set forth in the directive, and has offered courses on the directive to DHS acquisition professionals.

    Recommendation: To help ensure that DHS leadership is aware of risks as they arise during the acquisition of major, complex systems, the Secretary of Homeland Security should require that major acquisitions of services be subject to oversight by the investment review board.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: The Department of Homeland Security's November 2008 Acquisition Directive 102-01 provides a framework for departmental management, support, review and approval of DHS acquisitions including service contracts.

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