Homeland Security:

Contract Management and Oversight for Visitor and Immigrant Status Program Need to Be Strengthened

GAO-06-404: Published: Jun 9, 2006. Publicly Released: Jul 10, 2006.

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The Department of Homeland Security (DHS) has established a multibillion-dollar program--U.S. Visitor and Immigrant Status Indicator Technology (US-VISIT)--to control and monitor the pre-entry, entry, visa status, and exit of foreign visitors. To deliver system and other program capabilities, the program relies extensively on contractors, some of whom are managed directly by US-VISIT and some by other agencies (including both DHS agencies, such as Customs and Border Protection, and non-DHS agencies, such as the General Services Administration). Because of US-VISIT's heavy reliance on contractors to deliver program capabilities, GAO was asked to determine whether DHS has established and implemented effective controls for managing and overseeing US-VISIT-related contracts.

US-VISIT-related contracts have not been effectively managed and overseen. The US-VISIT program office established and implemented certain nonfinancial controls for those contracts that it managed directly, such as verifying that contractor deliverables satisfied established requirements. However, it did not implement effective controls for overseeing its contracts managed by other DHS agencies and by non-DHS agencies. Moreover, effective financial controls were not in place on any contracts that GAO reviewed. The program office did not know the full extent of US-VISIT-related contract actions, and it had not performed key nonfinancial practices associated with understanding contractor performance in meeting the terms of these contracts. This oversight gap was exacerbated by the fact that the other agencies had not always established and implemented effective controls for managing their respective contracts. These other agencies directly managed more than half (56 percent) of the total US-VISIT-related contract obligations reported to GAO. The program office and other agencies did not implement effective financial controls. Without these controls, some agencies were unable to reliably report US-VISIT contracting expenditures. Further, the program office and these other agencies improperly paid and accounted for related invoices, including making duplicate payments and payments for non-US-VISIT services with funds designated for US-VISIT. According to the US-VISIT program official responsible for contract matters, the program office has focused on contracts that it manages directly and decided to rely on the responsible agencies to manage the other contracts. Further, it has decided to use other agencies to properly manage financial matters for their respective contracts, and it also decided to rely on another agency for its own financial management services. Without effective contract management and oversight controls, the program office does not know that required program deliverables and mission results will be produced on time and within budget, and that proper payments are made.

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: Given the US-VISIT program's mission importance, size, and heavy reliance on contractor assistance, the Secretary of Homeland Security, to strengthen contract management and oversight, including financial management, should direct the US-VISIT Program Director to require DHS and non-DHS agencies that manage contracts on behalf of the program to (1) clearly define and delineate US-VISIT work from non-US-VISIT work as performed by contractors; (2) record, at the contract level, amounts being billed and expended on US-VISIT-related work so that these can be tracked and reported separately from amounts not for US-VISIT purposes; and (3) determine if they have received reimbursement from the program for payments not related to US-VISIT work by contractors, and if so, refund to the program any amount received in error.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: With the issuance of the March 2006 US-VISIT Contract Administration Management Plan (CAMP), the program office has implemented controls to delineate US-VISIT work from non-US-VISIT work; and to record, at the contract level, amounts being billed and expended on US-VISIT related work, thus allowing these amounts to be tracked and reported separately from amounts not used for US-VISIT purposes. Specifically, the CAMP mandated that all US-VISIT interagency agreements (IAA) were to require DHS, and non-DHS agencies that manage contracts on behalf of the program, to clearly delineate contractors' US-VISIT work from non-US-VISIT work. The CAMP further specified that all IAAs for program contract management were to provide for separate contract-level accounting for US-VISIT billings and expenditures. In fiscal year 2008, we verified that 18 IAAs awarded between July 2006 and July 2008 delineated contractors' US-VISIT and non-US-VISIT work, as required by the CAMP. In fiscal year 2008, we also verified that 18 IAAs awarded between July 2006 and July 2008 included language required by the CAMP to allow for separate tracking and reporting of costs for US-VISIT versus non-US-VISIT work performed by the contractor. These internal control improvements substantially address our recommended actions in this area, and if fully and effectively implemented, should allow for better oversight of payments.

    Recommendation: Given the US-VISIT program's mission importance, size, and heavy reliance on contractor assistance, the Secretary of Homeland Security, to strengthen contract management and oversight, including financial management, should direct the US-VISIT Program Director to require, through agreements, that agencies managing contract actions on the program office's behalf implement effective contract management practices consistent with acquisition guidance for all US-VISIT contract actions, including, at a minimum, (1) establishing and maintaining a plan for performing contract management activities; (2) assigning responsibility and authority for performing contract oversight; (3) training the people performing contract oversight; (4) documenting the contract; (5) verifying that deliverables satisfy requirements; (6) monitoring contractor-related risk; and (7) monitoring contractor performance to ensure that the contractor is meeting schedule, effort, cost, and technical performance requirements.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: US-VISIT has amended the language used in its interagency agreements (IAA) to require providing agencies to implement certain practices designed to strengthen contract management and oversight. These requirements are specified in the May 2007 US-VISIT Contracts Administration Management Plan and have been included in each US-VISIT IAA. Specifically, each IAA specifies that the providing agency is to establish and maintain a plan for performing contract management activities, designate a contracting officer and contracting officer's technical representative to manage all contractual actions, train the people performing contract oversight, and document the contract. Further, the providing agency is to verify that deliverables satisfy requirements; monitor contractor-related risk; and monitor contractor performance to ensure that the contractor is meeting schedule, effort, cost, and technical performance requirements.

    Recommendation: Given the US-VISIT program's mission importance, size, and heavy reliance on contractor assistance, the Secretary of Homeland Security, to strengthen contract management and oversight, including financial management, should direct the US-VISIT Program Director to develop and implement practices for overseeing contractor work managed by other agencies on the program office's behalf, including (1) clearly defining roles and responsibilities for both the program office and all agencies managing US-VISIT-related contracts; (2) having current, reliable, and timely information on the full scope of contract actions and activities; and (3) defining and implementing steps to verify that deliverables meet requirements.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: The May 2007 US-VISIT Contracts Administration Management Plan (CAMP) establishes oversight requirements for US-VISIT's use of interagency agreements (IAA) and defines the information that is to be included in each IAA. For example, the providing agency is to plan, implement, and manage all contractual actions and to monitor and report to US-VISIT on whether the contractor is meeting performance requirements. In turn, US-VISIT is to monitor cost and technical performance of the provider and/or contractor, including receipt and acceptance planning and execution. The CAMP also requires that the providing agency supply US-VISIT with copies of each specific contract action associated with the IAA, including current, reliable, and timely information on the full scope of contract actions and activities funded under the IAA. Finally, the CAMP requires that the US-VISIT point of contact monitor the performance of the provider and/or contractor, including verifying that deliverables satisfy requirements, receiving and accepting deliverables in accordance with local procedures and providing copies of all inspection and acceptance documentation to US-VISIT. Our analysis of selected contract actions shows that these practices are included in the IAAs and US-VISIT monitors them on a regular basis.

    Recommendation: Given the US-VISIT program's mission importance, size, and heavy reliance on contractor assistance, the Secretary of Homeland Security, to strengthen contract management and oversight, including financial management, should direct the US-VISIT Program Director to, for each US-VISIT contract action that the program manages directly, establish and maintain a plan for performing the contractor oversight process, as appropriate.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: The US-VISIT program has established, for each contract action that the program manages directly, a plan for performing the contractor oversight process. More specifically, the program's May 2007 Contracts Administration Management Plan calls for the use of an Individual Contract Oversight Plan for specific contracts, task orders, and delivery orders. Our analysis of individual oversight plans shows that they describe the roles, responsibilities, and authorities involved in conducting contract administration and oversight of the contract action. For example, the individual plans specify that the contracting officer's technical representative (COTR) is to review and analyze the contractor's deliverables, services, and management reports and inspect deliverables and monitor services for conformance to performance standards. Further, each plan states that the COTR is to write an evaluation of the contractor's technical performance at least annually and at the end of performance delivery.

    Recommendation: Given the US-VISIT program's mission importance, size, and heavy reliance on contractor assistance, the Secretary of Homeland Security, to strengthen contract management and oversight, including financial management, should direct the US-VISIT Program Director to ensure that payments to contractors are timely and in accordance with the Prompt Payment Act.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: In our June 2006 report on US-VISIT program office contract management and oversight, we reported that the US-VISIT program office and several of the agencies doing work on its behalf made late payments on invoices. For the invoices that we reviewed, US-VISIT paid interest on approximately 26 percent of the prime contract invoices, representing over $27,000 in payments. In total, US-VISIT reported $108,126 in Prompt Payment Act penalty interest payments for fiscal year 2006. We recommended that the US-VISIT Program Director ensure that payments to contractors are timely and in accordance with the Prompt Payment Act. In response to our recommendation, the program office implemented several changes. First, the US-VISIT Contract Administration Management Plan (CAMP), updated May 15, 2007, required the provider ensure that payments to contractors are timely and in accordance with the Prompt Payment Act. We verified that 18 interagency agreements awarded between July 2006 and July 2008 included language requiring the provider to ensure that payments to contractors are timely and in accordance with the Prompt Payment Act. The program office also implemented an initiative to streamline the payment process in order to decrease the amount of Prompt Payment Act interest, and implemented an initiative to obtain discounts for payments to its prime contractor made within a certain timeframe. US-VISIT reports that it has streamlined its invoice review process for invoices from its prime contractor, with whom it developed the discount initiative. The discount initiative was first utilized on a small-scale pilot with terms that provided a 1% discount for payments within 7 calendar days or .5% discount for payment within 10 calendar days. US-VISIT worked with its payment processor to determine that the timelines could be met. US-VISIT tested and refined new procedures for the payment of invoices. After initial testing of the discount initiative it was expanded in scope. As a result of these initiatives, US-VISIT program office data shows a decrease in the amount of Prompt Payment Act interest payments and savings from its payment discount initiative. These program changes demonstrate not only contract management improvements but also financial savings to the federal government in the timely payment of invoices and a decrease in interest paid under the Prompt Payment Act. We plan to take accomplishments for future financial savings as a result of these initiatives as data becomes available from the agency.

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