Department of Homeland Security's Use of Special Streamlined Acquisition Authorities in Section 833 of the Homeland Security Act of 2002
Gao ID: GAO-06-783R June 20, 2006
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 including the following three items. First, 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. Second, 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. Third, 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.
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.
GAO-06-783R, Department of Homeland Security's Use of Special Streamlined Acquisition Authorities in Section 833 of the Homeland Security Act of 2002
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Acquisition Authorities in Section 833 of the Homeland Security Act of
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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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