Interagency Contracting:

Improved Guidance, Planning, and Oversight Would Enable the Department of Homeland Security to Address Risks

GAO-06-996: Published: Sep 27, 2006. Publicly Released: Sep 27, 2006.

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The Department of Homeland Security (DHS) has some of the most extensive acquisition needs within the federal government. In fiscal year 2005, DHS spent $17.5 billion on contracted purchases, $6.5 billion, or 37 percent, of which was through the use of other agencies' contracts and contracting services, a process known as interagency contracting. While these types of contracts offer the benefits of efficiency and convenience, in January 2005, GAO noted shortcomings and designated the management of interagency contracting as a governmentwide high-risk area. Given the department's critical national security mission and the results of our earlier work, GAO reviewed the extent to which DHS manages the risks of interagency contracting and assessed DHS' guidance, planning, and oversight of interagency contracting.

DHS has developed guidance on how to manage the risks of some but not all types of interagency contracts. The department has guidance for interagency agreements--the largest category of interagency contracting at the department--but does not have specific guidance for using other types of contracts such as the General Services Administration (GSA) schedules and governmentwide acquisition contracts (GWAC), which amounted to almost $1.5 billion in fiscal year 2005. Moreover, in some cases we found users may have lacked expertise that could be addressed through guidance and training on the use of these types of contracts. DHS did not always consider alternatives to ensure good value when selecting among interagency contracts. While this contracting method 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 timeliness and cost. As of July 2005 DHS has required planning and analysis of alternatives for all acquisitions. In this review, we found that in all four cases for which an analysis of alternatives was required, it was not conducted. DHS officials said benefits of speed and convenience--not total value including cost--have often driven decisions to choose these types of contracts. DHS does not systematically monitor its total spending on interagency contacts and does not assess the outcomes of its use of this contracting method. According to officials, DHS' acquisition oversight program has been hindered by limited resources and authority. As of August 2006, the Office of the Chief Procurement Officer had five staff assigned to departmentwide oversight responsibilities for $17.5 billion in acquisitions. In March 2005, GAO recommended that the Chief Procurement Officer be provided sufficient authority to provide effective oversight of DHS' acquisition policies and procedures. Without this authority, DHS cannot be certain that acquisition improvements 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

    Matter for Congressional Consideration

    Matter: Because the Secretary of Homeland Security has not taken action to ensure departmentwide acquisition oversight, Congress may wish to consider requiring the Secretary to report on efforts to provide the Chief Procurement Officer with sufficient authority over procurement activities at all components.

    Status: Closed - Implemented

    Comments: Since the Secretary of Homeland Security had not taken action to ensure departmentwide acquisition oversight, GAO recommended that Congress should require the Secretary to report on efforts to provide the Chief Procurement Officer with sufficient authority over procurement activities at all components. PL 110-161 required the Secretary of Homeland Security to report on the authority of the Chief Procurement Officer and the adequacy of staffing. DHS submitted its report in April 2008, and GAO reviewed the report and briefed committee staff on its assessment of the strengths and weaknesses of the DHS report.

    Recommendations for Executive Action

    Recommendation: To improve the department's ability to manage the risks of interagency contracting, the Secretary of Homeland Security should consider the adequacy of the Office of the Chief Procurement Officer's resources and establish, as part of the department's planning requirement for an analysis of alternatives, criteria to consider in making the decision to use an interagency contract.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: GAO found that the Department of Homeland Security did not always select interagency contracts based on planning and analysis and instead made decisions based on the benefits of speed and convenience-not total value including cost. Therefore, GAO recommended that as part of the department's planning requirement for an analysis of alternatives, DHS develop criteria to consider in making the decision to use an interagency contract. On August 18, 2008, DHS issued an instruction guide on interagency agreements, including a requirement for an analysis of alternatives, including the criteria to identify and evaluate various methods of obtaining needed goods and services, and to determine which alternative is the most advantageous to the government.

    Recommendation: To improve the department's ability to manage the risks of interagency contracting, the Secretary of Homeland Security should consider the adequacy of the Office of the Chief Procurement Officer's resources and develop consistent, comprehensive guidance, and related training to reinforce the proper use of all types of interagency contracts to be followed by all components.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: The Department of Homeland Security revised and issued an instruction guide and a directive to reinforce the proper use of all types of interagency contracts in August 2008. In addition, between October 2008 and April 2009, DHS reports that 437 employees received training on the proper use and docementation for interagency acquisitions.

    Recommendation: To improve the department's ability to manage the risks of interagency contracting, the Secretary of Homeland Security should consider the adequacy of the Office of the Chief Procurement Officer's resources and implement oversight procedures to evaluate the outcomes of using interagency contracts.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: GAO found that the Department of Homeland Security did not have in place sound oversight practices that would enable it to evaluate the outcomes of its use of interagency contracts. The Department has developed an acquisition oversight program that includes addressing interagency contracting as part of the reviews. DHS plans to conduct a special oversight review in the first quarter of fiscal year 2011.

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