Department of Homeland Security
Progress and Challenges in Implementing the Department's Acquisition Oversight Plan Gao ID: GAO-07-900 June 13, 2007The Department of Homeland Security (DHS), the third largest department in federal procurement spending in fiscal year 2006, has faced ongoing cost, schedule, and performance problems with major acquisitions and procurement of services. In December 2005, DHS established an acquisition oversight program to provide insight into and improve components' acquisition programs. In 2006, GAO reported that DHS faced challenges in implementing its program. Congress mandated that DHS develop an oversight plan and tasked GAO with analyzing the plan. GAO (1) evaluated actions DHS and its components have taken to implement the acquisition oversight plan and (2) identified implementation challenges. GAO also identified opportunities for strengthening oversight conducted through the plan. GAO reviewed relevant DHS documents and GAO and DHS Inspector General reports and interviewed officials in the office of the Chief Procurement Officer (CPO) and nine DHS components.
The CPO has taken several actions to implement DHS's acquisition oversight plan--which generally incorporates basic principles of an effective and accountable acquisition function. The plan monitors acquisition performance through four recurring reviews: self-assessment, operational status, on-site, and acquisition planning. Each component has completed the first self-assessment, which has helped components identify and prioritize acquisition weaknesses. In addition, each component has submitted an initial operational status report to the CPO and on-site reviews are being conducted. Despite this progress, the acquisition planning reviews are not sufficient to determine if components adequately plan their acquisitions--in part because a required review has not been implemented and the CPO lacks visibility into components' planning activities. DHS faces two key challenges in implementing its acquisition oversight plan. First, the CPO has had limited oversight resources to implement plan reviews. However, recent increases in staff have begun to address this challenge. Second, the CPO lacks sufficient authority to ensure components comply with the plan--despite being held accountable for departmentwide management and oversight of the acquisition function. GAO has previously recommended that DHS provide the CPO with sufficient enforcement authority to enable effective acquisition oversight. In addition to these challenges, GAO identified two opportunities to strengthen internal controls for overseeing the plan's implementation and for increasing knowledge sharing. Specifically, independent evaluations of DHS's oversight program could help ensure that the plan maintains its effectiveness over time. Sharing knowledge and lessons learned could provide DHS's acquisition workforce with the information needed to improve their acquisition processes and better achieve DHS's mission.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-07-900, Department of Homeland Security: Progress and Challenges in Implementing the Department's Acquisition Oversight Plan
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
June 2007:
Department Of Homeland Security:
Progress and Challenges in Implementing the Department's Acquisition
Oversight Plan:
GAO-07-900:
GAO Highlights:
Highlights of GAO-07-900, a report to congressional committees
Why GAO Did This Study:
The Department of Homeland Security (DHS), the third largest department
in federal procurement spending in fiscal year 2006, has faced ongoing
cost, schedule, and performance problems with major acquisitions and
procurement of services. In December 2005, DHS established an
acquisition oversight program to provide insight into and improve
components‘ acquisition programs.
In 2006, GAO reported that DHS faced challenges in implementing its
program. Congress mandated that DHS develop an oversight plan and
tasked GAO with analyzing the plan. GAO (1) evaluated actions DHS and
its components have taken to implement the acquisition oversight plan
and (2) identified implementation challenges. GAO also identified
opportunities for strengthening oversight conducted through the plan.
GAO reviewed relevant DHS documents and GAO and DHS Inspector General
reports and interviewed officials in the office of the Chief
Procurement Officer (CPO) and nine DHS components.
What GAO Found:
The CPO has taken several actions to implement DHS‘s acquisition
oversight plan”which generally incorporates basic principles of an
effective and accountable acquisition function. The plan monitors
acquisition performance through four recurring reviews: self-
assessment, operational status, on-site, and acquisition planning. Each
component has completed the first self-assessment, which has helped
components identify and prioritize acquisition weaknesses. In addition,
each component has submitted an initial operational status report to
the CPO and on-site reviews are being conducted. Despite this progress,
the acquisition planning reviews are not sufficient to determine if
components adequately plan their acquisitions”in part because a
required review has not been implemented and the CPO lacks visibility
into components‘ planning activities.
DHS faces two key challenges in implementing its acquisition oversight
plan. First, the CPO has had limited oversight resources to implement
plan reviews. However, recent increases in staff have begun to address
this challenge. Second, the CPO lacks sufficient authority to ensure
components comply with the plan”despite being held accountable for
departmentwide management and oversight of the acquisition function.
GAO has previously recommended that DHS provide the CPO with sufficient
enforcement authority to enable effective acquisition oversight.
In addition to these challenges, GAO identified two opportunities to
strengthen internal controls for overseeing the plan‘s implementation
and for increasing knowledge sharing. Specifically, independent
evaluations of DHS‘s oversight program could help ensure that the plan
maintains its effectiveness over time. Sharing knowledge and lessons
learned could provide DHS‘s acquisition workforce with the information
needed to improve their acquisition processes and better achieve DHS‘s
mission.
What GAO Recommends:
GAO is recommending that the CPO reevaluate the approach to the
acquisition planning reviews and that DHS enhance internal controls to
strengthen the oversight plan through periodic external reviews and
knowledge sharing. DHS concurred with GAO‘s recommendations.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-900].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact John Hutton at (202) 512-
4841 or huttonj@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Plan Implementation Is Under Way, but Acquisition Planning Oversight
May Not Be Sufficient:
The CPO Faces Challenges in Implementing Reviews and Corrective
Actions:
External Reviews and Knowledge Sharing Could Improve Acquisition
Oversight:
Conclusion:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Homeland Security:
Tables:
Table 1: Four Oversight Plan Reviews:
Table 2: Potential Problems with Acquisition Planning Reviews:
Figure:
Figure 1: DHS Components with HCAs and Lines of Reporting:
Abbreviations:
AAP: Advanced Acquisition Planning:
CPO: Chief Procurement Officer:
DHS: Department of Homeland Security:
FEMA: Federal Emergency Management Agency:
FLETC: Federal Law Enforcement Training Center:
GCR: Gulf Coast Recovery:
HCA: Head of Contracting Activity:
OPO: Office of Procurement Operations:
United States Government Accountability Office:
Washington, DC 20548:
June 12, 2007:
The Honorable Robert C. Byrd:
Chairman:
The Honorable Thad Cochran:
Ranking Member:
Subcommittee on Homeland Security:
Committee on Appropriations:
United States Senate:
The Honorable David E. Price:
Chairman:
The Honorable Harold Rogers:
Ranking Member:
Subcommittee on Homeland Security:
Committee on Appropriations:
House of Representatives:
Since it was established, the Department of Homeland Security (DHS) has
been responsible for integrating 22 federal agencies with disparate
missions into one department. In fiscal year 2006, DHS obligated $15.6
billion for goods and services, making it the third largest department
in federal procurement spending. DHS components have experienced
ongoing cost, schedule, and performance problems with major
acquisitions as well as procurement of services. Since January 2003,
GAO has designated the implementation and transformation of DHS a high-
risk area, stating the need for management capacity and oversight
mechanisms.[Footnote 1]
In December 2005, DHS established an acquisition oversight program in
addition to existing oversight mechanisms, such as the investment
review process. The program is designed to provide the Chief
Procurement Officer (CPO) comprehensive insight into each component's
acquisition programs and disseminate successful acquisition management
approaches throughout DHS.[Footnote 2] In 2006, we reported that DHS
faced challenges in implementing this program, due to unclear
accountability for acquisition outcomes and inadequate staffing to
conduct departmentwide oversight.[Footnote 3] Subsequent to our report,
Congress, in a conference report accompanying the DHS fiscal year 2007
Appropriations bill, directed DHS to submit a plan to the
Appropriations Committees by January 2007 identifying necessary
oversight resources and how improvements in the performance of its
procurement functions will be achieved.[Footnote 4] GAO was required to
assess the plan.
In April 2007, we briefed your Committees on our analysis and findings.
This report expands on that briefing. Specifically, we (1) evaluated
the actions DHS and its components have taken to implement the
acquisition oversight plan through May 2007 and (2) identified the
challenges DHS faces in implementing the plan. We also identified
opportunities for strengthening oversight conducted through the plan.
To conduct our work, we reviewed relevant GAO and DHS Office of the
Inspector General reports and DHS documents, such as the oversight
plan, completed reviews, and guidance to components. We interviewed
officials in the office of the CPO and nine DHS components. We
conducted our work from February 2007 to June 2007 in accordance with
generally accepted government auditing standards.
Results in Brief:
The CPO, responsible for providing oversight reviews to verify the
integrity of component acquisition processes, has taken several actions
to implement DHS's acquisition oversight plan. The plan generally
incorporates basic principles of an effective and accountable
acquisition function and includes mechanisms to monitor acquisition
performance through four recurring reviews: self-assessment,
operational status, on-site, and acquisition planning. Each of the 9
components with procurement offices has completed the first self-
assessment, which have helped components identify and prioritize
acquisition weaknesses. In addition, each component has submitted
initial operational status reports to the CPO, which are currently
under review. CPO-led teams are also conducting on-site reviews of
components. However, the CPO has not developed sufficient mechanisms to
verify that components complete key elements of acquisition planning
reviews. For example, most components have not conducted an annual
review of their acquisition planning processes--though required to do
so since December 2005--and the CPO has yet to check whether components
have fulfilled this requirement.
DHS faces challenges in implementing its acquisition oversight plan.
First, the CPO has limited oversight resources to implement the plan,
but has made progress in increasing staff to authorized levels.
Specifically, when implementation of the plan began in 2006, only two
personnel were assigned acquisition oversight as their primary duty.
The CPO received funding for eight additional oversight positions and
as of June 2007, seven of the additional positions had been filled.
Second, the CPO, who is held accountable for departmentwide management
and oversight of the acquisition function, lacks sufficient authority
to ensure components take corrective actions based on oversight review
recommendations. We have previously recommended that the Secretary of
Homeland Security provide the CPO with sufficient enforcement authority
to enable effective acquisition oversight.
In addition to these challenges, we identified two opportunities based
on federal standards to strengthen internal controls for overseeing the
plan's implementation and for increasing knowledge sharing.
Specifically, periodic assessments of the oversight program by the DHS
Inspector General or an external auditor could help ensure that the
plan maintains its effectiveness over time. Sharing knowledge and
lessons learned from the oversight plan reviews through memorandums and
regular meetings could provide DHS's acquisition workforce with
information needed to improve their acquisition processes and better
achieve DHS's mission.
To improve oversight provided in the plan, we are recommending that the
CPO reevaluate its approach to the acquisition planning reviews and
determine whether the oversight mechanisms are sufficient to improve
component acquisition planning. In addition, we are recommending that
DHS enhance internal controls to strengthen the effectiveness of the
oversight plan through periodic external reviews and knowledge sharing.
In written comments on a draft of this report, DHS concurred with our
recommendations. In addition, DHS commented on planned actions
regarding acquisition authority including revising a management
directive and designating the Chief Acquisition Officer for the
department. DHS's comments are included in their entirety in appendix
II.
Background:
In 2003, the Department of Homeland Security was created and tasked
with integrating numerous agencies and offices with varying missions
from the General Services Administration; the Federal Bureau of
Investigation; and the Departments of Agriculture, Defense, Energy,
Health and Human Services, Justice, Transportation, and Treasury; as
well as the Coast Guard and the Secret Service.
Eight DHS components have internal procurement offices with a Head of
Contracting Activity (HCA) who reports directly to the component head
and is accountable to the CPO.[Footnote 5] The Office of Procurement
Operations (OPO) also has an HCA who provides contracting support to
all other components and reports directly to the CPO. The HCA for each
component has overall responsibility for the day-to-day management of
the component's acquisition function. Figure 1 shows the organizational
relationship between the HCAs and the CPO.
Figure 1: DHS Components with HCAs and Lines of Reporting:
[See PDF for image]
Source: DHS (data); GAO (analysis and presentation).
Note: The Office of Procurement Operations provides contracting support
to multiple DHS components, not shown in this figure, which do not have
their own acquisition staff. During our review, Gulf Coast Recovery
(GCR) had its own HCA. CPO officials told us that as of May 2007 FEMA's
HCA subsumed responsibility for GCR contracting efforts.
[End of figure]
Plan Implementation Is Under Way, but Acquisition Planning Oversight
May Not Be Sufficient:
We reported in September 2006 that DHS planned to fully implement its
acquisition oversight program during fiscal year 2007.[Footnote 6] The
plan is composed of four recurring reviews: self-assessment,
operational status, on-site, and acquisition planning. The CPO has
issued an acquisition oversight program guidebook, provided training on
self-assessment and operational status reviews, and began
implementation of the four reviews in the plan (see table 1).
Table 1: Four Oversight Plan Reviews:
Self-assessment.
Description: HCA for each component assesses the component's staff,
processes, and programs;
Frequency: Annually;
Status: Components completed first assessment as of March 2007.
Operational status reviews.
Description: The component assesses the status of the acquisition
function and submits a quarterly narrative and data on performance
metrics to the CPO, and the CPO holds a quarterly meeting with each
individual HCA to discuss the results; The HCA has 30 days to provide
the CPO with an action plan in response to the review and is
responsible to ensure that action items are completed;
Frequency: Quarterly;
Status: Components have submitted their reports as of May 2007 and the
CPO review is under way.
On-site reviews.
Description: A matrixed DHS team led by the CPO reviews each
component's compliance with acquisition regulations, contract
administration, use of good business judgment, and verification of
procurement data; The head of the component is responsible for ensuring
that the findings of the reviews are acted upon and closed out in a
timely manner;
Frequency: Minimum of once every 3 years (rotating) unless compelling
reasons necessitate more frequent reviews;
Status: Office of Procurement Operations review began in March 2007;
Federal Law Enforcement Training Center (FLETC) review to start in June
2007.
Acquisition planning reviews.
Description: This review has three elements: (1) Individual Acquisition
Plans-The CPO reviews component's acquisition plans that exceed a
contract value of $50 million for most components.[A];
Frequency: Ongoing;
Status: CPO review of acquisition plans under way.
Description: (2) Acquisition Planning Review-Component HCAs review
programs and assess acquisition planning process;
Frequency: Annually;
Status: Not implemented as planned.
Description: (3) Advanced Acquisition Planning (AAP) database-
Components are required to enter information on all acquisitions over
$100,000 into the database;
Frequency: Quarterly;
Status: Components enter information into the database.
Source: GAO analysis of DHS data.
[A] The CPO reviews acquisitions that exceed $5 million for Secret
Service and FLETC.
[End of table]
The acquisition oversight plan generally incorporates basic principles
of an effective and accountable acquisition function and includes
mechanisms to monitor acquisition performance. Specifically, the plan
incorporates DHS policy, internal controls, and elements of an
effective acquisition function: organizational alignment and
leadership, policies and processes, human capital, knowledge and
information management, and financial accountability.[Footnote 7] While
it is too early to assess the plan's overall effectiveness in improving
acquisition performance, initial implementation of the first self-
assessment has helped most components prioritize actions to address
identified weaknesses. In addition, the CPO has helped several
components implement organizational and process changes that may
improve acquisition performance over time. For example, one component,
with the assistance of the CPO, elevated its acquisition office to a
level equivalent to its financial office.
However, the acquisition planning reviews are not sufficient to
determine if components' adequately plan their acquisitions. Federal
acquisition regulations and DHS directives require agencies to perform
acquisition planning in part to ensure good value, including cost and
quality. Component HCAs are responsible to ensure that acquisition
plans are completed in a timely manner, include an efficient and
effective acquisition strategy and the resulting contract action or
actions support the component's mission. Inadequate procurement
planning can lead to higher costs, schedule delays, and systems that do
not meet mission objectives. Several recent reviews have identified
problems in DHS's acquisition planning. In 2006, we reported that DHS
often opted for speed and convenience in lieu of planning and analysis
when selecting a contracting method and may not have obtained a good
value for millions of dollars in spending.[Footnote 8] As part of a
2006 special review of Federal Emergency Management Agency's (FEMA)
contracts, DHS's CPO found significant problems with the requirements
process and acquisition strategy and recommended in part that FEMA
better plan acquisitions.[Footnote 9] For example, the CPO reported
that FEMA's total cost for its temporary housing program could have
been significantly reduced if FEMA had appropriately planned to acquire
temporary homes before the fiscal year 2005 hurricane season. A 2006
internal review of the Office of Procurement Operation's contracts
similarly found little evidence that acquisition planning occurred in
compliance with regulations. While a key goal of the oversight program
is to improve acquisition planning, we found potential problems with
each of the three elements of the acquisition planning reviews, as
shown in table 2.
Table 2: Potential Problems with Acquisition Planning Reviews:
CPO reviews certain individual acquisition plans.
Purpose: The CPO reviews certain acquisition plans to ensure that each
complies with regulations and policies and also provides
recommendations and guidance;
Potential Problems: The CPO's review is advisory because the component
HCA is responsible to ensure that the plan complies with regulations
and that the resulting acquisition meets the component's mission
requirements in an efficient and effective manner; The HCA is not
required to incorporate the CPO's comments into the plan. Instead, the
HCA must document in the contract file how the comments were addressed;
As a result, the CPO has little assurance that review comments are
included in the final versions of the acquisition plans.
HCAs review their component's acquisition planning process each year.
Purpose: Annual reviews are intended to ensure the efficiency and
effectiveness of the components' acquisition planning process;
Potential Problems: The CPO does not monitor whether HCAs complete the
annual acquisition planning reviews; Most component HCAs were not aware
of the requirement to complete an annual acquisition planning review
and had not done so; As a result, HCAs and the CPO may not identify and
address poor acquisition planning processes or opportunities to
strengthen processes.
HCAs update the AAP database.
Purpose: HCAs are to provide data into the database to publicize
contracting opportunities and to assist components in managing
schedules for planned acquisitions;
Potential Problems: The CPO has not established an effective mechanism
to monitor the database:
In reviewing individual acquisition plans, the CPO has not been able to
establish a process that allows them to check that required information
is entered into the database; During the first on-site review at the
Office of Procurement Operations, CPO officials indicated they could
not verify the accuracy and completeness of Office of Procurement
Operations' information in the database--as it had intended--because
the database does not retain historical data for comparing the database
to documents; As a result, the CPO's visibility into the components'
planning activities is limited.
Source: GAO analysis of DHS data and interviews with DHS officials.
[End of table]
The CPO Faces Challenges in Implementing Reviews and Corrective
Actions:
DHS faces two challenges in achieving the goals of its acquisition
oversight plan. First, the CPO has had limited resources to implement
the plan reviews. When implementation of the plan began in 2006, only
two personnel were assigned acquisition oversight as their primary
duty. The CPO received funding for eight additional oversight
positions. However, officials told us that they have struggled to find
qualified individuals. As of June 2007, seven positions had been
filled. As part of the Department's fiscal year 2008 appropriation
request, the CPO is seeking two additional staff, for a total of 12
oversight positions. The CPO will also continue to rely on resources
from components to implement the plan, such as providing staff for on-
site reviews.
Second, while the CPO can make recommendations based on oversight
reviews, the component head ultimately determines what, if any, action
will be taken. DHS's organization relies on cooperation and
collaboration between the CPO and components to accomplish
departmentwide acquisition goals. However, to the extent that the CPO
and components disagree on needed actions, the CPO lacks the authority
to require compliance with recommendations. We have previously reported
that the DHS system of dual accountability results in unclear working
relationships between the CPO and component heads. DHS policy also
leaves unclear what enforcement authority the CPO has to ensure that
acquisition initiatives are carried out. In turn, we recommended that
the Secretary of Homeland Security provide the CPO with sufficient
enforcement authority to effectively oversee the Department's
acquisitions--a recommendation that has yet to be implemented.[Footnote
10] CPO officials believe that there are other mechanisms to influence
component actions, such as providing input into HCA hiring decisions
and performance appraisals.
External Reviews and Knowledge Sharing Could Improve Acquisition
Oversight:
Making the most of opportunities to strengthen its acquisition
oversight program--along with overcoming implementation challenges--
could position the agency to achieve better acquisition outcomes. We
identified two such opportunities: periodic external assessments of the
oversight program and sharing knowledge gained from the oversight plan
reviews across the department.
Federal internal control standards call for periodic external
assessments of programs to help ensure their effectiveness.[Footnote
11] An independent evaluation of DHS's acquisition oversight program by
the Inspector General or an external auditor could help strengthen the
oversight conducted through the plan and better ensure that the program
is fully implemented and maintaining its effectiveness over time. In
particular, an external assessment with results communicated to
appropriate officials can help maintain the strength of the oversight
program by alerting DHS to acquisition concerns that require oversight,
as well as monitoring the plan's implementation. For example, the plan
initially called for components to complete the self-assessment by
surveying their acquisition staff; however, the level of staff input
for the first self-assessments was left to the discretion of the HCAs.
Specifically, CPO officials advised HCAs to complete the questions
themselves, delegate the completion to one or more staff members, or
select a few key people from outside their organization to participate.
While evolution of the plan and its implementation is to be expected
and can result in improvements, periodic external assessments of the
plan could provide a mechanism for monitoring changes to ensure they do
not diminish oversight.
Federal internal control standards also call for effective
communication to enable managers to carry out their responsibilities
and better achieve components' missions.[Footnote 12] The CPO has been
assigned responsibility for ensuring the integrity of the oversight
process--in part by providing lessons learned for acquisition program
management and execution. While the CPO intends to share knowledge with
components by posting lessons learned from operational status reviews
to DHS's intranet, according to CPO officials, the Web site is
currently limited to providing guidance and training materials and does
not include a formal mechanism to share lessons learned among
components. In addition to the Web site, other opportunities may exist
for sharing knowledge. For example, CPO officials indicated that the
CPO meets monthly with component HCAs to discuss acquisition issues.
The monthly meetings could provide an opportunity to share and discuss
lessons learned from oversight reviews. Finally, knowledge could be
regularly shared with component acquisition staff through internal
memorandums or reports on the results of oversight reviews.
Conclusion:
Integrating 22 federal agencies while implementing acquisition
processes needed to support DHS's national security mission is a
herculean effort. The CPO's oversight plan generally incorporates basic
principles of an effective acquisition function, but absent clear
authority, the CPO's recommendations for improved acquisition
performance are, in effect, advisory. Additional actions are needed to
achieve the plan's objectives and opportunities exist to strengthen
oversight through enhanced internal controls. Until DHS improves its
approach for overseeing acquisition planning, the department will
continue to be at risk of failing to identify and address recurring
problems that have led to poor acquisition outcomes.
Recommendations for Executive Action:
To improve oversight of component acquisition planning processes and
the overall effectiveness of the acquisition oversight plan, we
recommend that the Chief Procurement Officer, Department of Homeland
Security, take the following three actions:
* Reevaluate the approach to oversight of acquisition planning reviews
and determine whether the mechanisms under the plan are sufficient to
monitor component actions and improve component acquisition planning
efforts.
* Request a periodic external assessment of the oversight plan
implementation and ensure findings are communicated to and addressed by
appropriate officials.
* Develop additional opportunities to share lessons learned from
oversight reviews with DHS components.
Agency Comments and Our Evaluation:
We provided a draft of this report to DHS for review and comment. In
written comments, DHS generally agreed with our facts and conclusions
and concurred with all of our recommendations and provided information
on what actions would be taken to address them.
Regarding the recommendation on acquisition planning, DHS stated that
during on-site reviews they will verify that CPO comments on
acquisition plans have been sufficiently addressed. DHS is also
developing training for component HCAs and other personnel to emphasize
that CPO comments related to compliance with applicable laws and
regulations must be incorporated into acquisition plans. The CPO will
also annually require an acquisition planning review as part of the
oversight plan's operational status reviews. Additionally, DHS intends
to change the advanced acquisition planning database so that historical
data are available for review. With regard to the recommendation for
periodic external assessment of the oversight plan, DHS stated they
plan to explore opportunities to establish a periodic external review
of the oversight program. However, the first priority of the
acquisition oversight office is to complete initial component on-site
reviews. For the recommendation to develop additional opportunities to
share lessons learned from oversight reviews, DHS stated it intends to
share consolidated information from operational status and on-site
reviews in regular meetings with component HCA staff. In addition, the
CPO plans to explore further opportunities for sharing oversight
results with the entire DHS acquisition community.
DHS also responded to a 2005 GAO recommendation on the issue of the CPO
lacking authority over the component HCAs. DHS commented that it is in
the process of modifying its acquisition lines of business management
directive to ensure that no DHS contracting organization is exempt. In
addition, DHS stated that the Under Secretary for Management has
authority as the Chief Acquisition Officer to monitor acquisition
performance, establish clear lines of authority for making acquisition
decisions, and manage the direction of acquisition policy for the
department, and that these authorities also devolve to the CPO.
Modifying the management directive to ensure no DHS contracting
organization is exempt is a positive step. However, until DHS formally
designates the Chief Acquisition Officer, and modifies applicable
management directives to support this designation, DHS's existing
policy of dual accountability between the component heads and the CPO
leaves unclear the CPO's authority to enforce corrective actions to
achieve the department's acquisition goals, which was the basis of our
earlier recommendation.
DHS's letter is reprinted in appendix II. DHS also provided technical
comments which were incorporated as appropriate.
We are sending copies of this report to interested congressional
committees and the Secretary of DHS. We will also make copies available
to others upon request. In addition, the report will be available at no
charge on GAO's Web site at http://www.gao.gov.
If you or your staff have questions regarding this report, please
contact me at (202) 512-4841 or huttonj@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. Principal contributors to this report
were Amelia Shachoy, Assistant Director; William Russell; Tatiana
Winger; Heddi Nieuwsma; Lily Chin; Karen Sloan; and Sylvia Schatz.
Signed by:
John Hutton, Director:
Acquisition and Sourcing Management:
[End of section]
Appendix I: Scope and Methodology:
To determine actions taken by DHS to implement the acquisition
oversight plan and challenges DHS faces, we reviewed prior GAO and DHS
Office of the Inspector General reports pertaining to acquisition
oversight as well as relevant DHS documents, such as the oversight
plan, documents of completed reviews and guidance to components,
including training materials. We interviewed officials in the CPO's
office and the nine DHS components with acquisition offices. We
compared efforts undertaken to implement the plan by DHS officials
against established program policies, the fiscal year 2007
implementation schedule, and other guidance materials. We reviewed four
component self-assessments that were provided to us and also reviewed
areas in which the CPO provided assistance to components based on self-
assessment results. We also reviewed Standards for Internal Control in
the Federal Government.
We conducted our work from February 2007 to June 2007 in accordance
with generally accepted government auditing standards.
[End of section]
Appendix II: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
June 12, 2007:
Mr. John Hutton, Director:
Acquisition and Sourcing Management:
Government Accountability Office:
Washington, D.C.
Dear Mr. Hutton:
Re: Draft report GAO-07-900, "Department of Homeland Security: Progress
and Challenges in Implementing the Department's Acquisition Oversight
Plan."
GAO notes "The acquisition oversight plan generally incorporates basic
principles of an effective and accountable acquisition function and
includes mechanisms to monitor acquisition performance. Specifically,
the plan incorporates DHS policy, internal controls, and elements of an
effective acquisition function: organizational alignment and
leadership, policies and processes, human capital, knowledge and
information management, and financial accountability." GAO also
acknowledges that the CPO has helped several components reengineer
processes that may improve acquisition performance over time.
Attached are comments on the specific recommendations but we also
wanted to address the issue of the Chief Procurement Officer's (CPO)
authority over the Heads of Contracting Activities (HCA) at the DHS
Components. The report states that "the CPO lacks sufficient authority
to ensure components comply with the [oversight] plan" and restates an
earlier GAO recommendation in GAO audit 05-179, Homeland Security
Successes and Challenges in DHS's Efforts to Create an Effective
Acquisition Organization, that "the Secretary of Homeland Security
provides the CPO with sufficient enforcement authority to effectively
oversee the Department's acquisition and manage risks"-a recommendation
that has yet to be implemented. We respectfully do not agree with this
recommendation. CPO has sufficient authority, including the ability to
revoke or restrict the HCAs contracting authority, and the ability to
concur in selection and performance of HCAs. Nevertheless, we concur
with a prior GAO recommendation regarding a weakness in our current
Acquisition Line of Business Management Directive and are in the
process of modifying it to ensure that no DHS contracting organization
is exempt from the directive.
In testimony June 7, 2007, before the US Senate Committee on Homeland
Security and Governmental Affairs Committee Subcommittee on Oversight
of Government Management, the Federal Workforce and the District of
Columbia, Under Secretary for Management Paul A. Schneider cited the
Services Acquisition Reform Act which was enacted as part of Title XIV
of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L.
108-136, Nov. 24, 2003) (41 U.S.C. 414(a)), as the authority for the
Under Secretary for Management and the Chief Procurement Officer for
managing and directing the procurement function at the Department.
As the Chief Acquisition Officer, the Under Secretary's authorities
include in part:
* Monitoring the performance of acquisition activities and acquisition
programs of the Department, evaluating the performance of those
programs on the basis of applicable performance measurements and
advising the Secretary regarding the appropriate business strategy to
achieve the mission of the Department.
* Making acquisitions consistent with applicable laws and establishing
clear lines of authority, accountability and responsibility for
acquisition decision making within the Department.
* Managing the direction of acquisition policy for the Department
including implementation of the unique acquisition policies, regulation
and standards of the Department.
These authorities also devolve to the Chief Procurement Officer who
reports to the Under Secretary.
The following is the Departmental response to the recommendations
contained in the report.
Recommendation 1. Reevaluate the approach to oversight of acquisition
planning reviews and determine whether the mechanism under the plan is
sufficient to monitor component actions and improve component
acquisition planning efforts.
Concur. DHS will take several steps to address this recommendation.
First, DHS will include a review of acquisition plans as part of future
on-site reviews to ensure that Office of the Chief Procurement Officer
(OCPO) comments and recommendations on acquisition plans have been
sufficiently addressed in the final acquisition plans. It is noted that
if during the CPO review of an Acquisition Plan there are instances of
a failure to comply with specific statutory or regulatory requirements,
those are highlighted as mandatory comments that must be incorporated
before proceeding, as opposed to the reviewers opinions on improving
the plan as presented. Second, the CPO will develop a training module
for presentation to Component HCAs and other relevant component
personnel to emphasize this requirement and modify the Operational
Assessment to include an annual reporting requirement on the
Acquisition Planning review. Finally, the Advanced Acquisition Planning
(AAP) database is a Web based reporting tool that satisfies the
requirement for advanced acquisition planning as set forth in FAR Part
7 and is also a database from which the Small Business forecast is
drawn. Upon discovery of the limited data availability on the Website
hosting this database, CPO directed that the database be modified to
address the data availability and archiving issue to ensure that full
year data is available at any time and that archived data is available
and easily accessed.
Recommendation 2. Request a periodic external assessment of the
oversight plan implementation and ensure findings are communicated to
and addressed by appropriate officials.
Concur. The first priority of the Acquisition Oversight office is to
complete the initial comprehensive on-site reviews of each component.
Plans, activities and schedules to accomplish that by the 4tH Quarter
of FY 08 are in place. In the coming months the Acquisition Oversight
office will explore opportunities for establishing a periodic third
party review of the DHS Oversight program. This third party will likely
be an outside agency such as the Federal Acquisition Institute or the
Defense Acquisition University or another entity with a sufficient
knowledge base in Federal Acquisition to be able to provide meaningful,
constructive criticism of the program.
Recommendation 3. Develop additional opportunities to share lessons
learned from oversight reviews with DHS components.
Concur. Steps are being taken in two specific areas to address this
effort. First, the quarterly Operational Assessments, which are a
common collection of acquisition and contracting related data, are
being reviewed independently with each Head of Contracting Activity by
the Acquisition Oversight office to ensure a common understanding of
the information requested and consistent responses so that data can be
consolidated and compared across components. The Oversight office is
receiving positive feedback from the component HCAs interviewed to date
that the data collection has already shown benefits to the HCAs by
highlighting information that had otherwise been overlooked in their
own assessments. The goal of this effort is to be able to consolidate
the information in order to identify any outliers from a particular
component in order for the CPO to specifically address them with the
HCA.
In addition, these reports, aggregated over a fiscal year will be used
by the CPO to establish specific performance goals that the CPO sets
for all of the HCAs in the Department. Second, the results of the
comprehensive on-site reviews will be similarly aggregated to provide
the CPO with an overarching view of the state of the acquisition and
procurement function in the Department. As analyses are completed this
will become a routine agenda item for the DHS CAO council, made up of
the collective HCAs from all components which meets every month. The
CPO will explore the recommendation that other analyses, reports or the
results of reviews be shared across the entire DHS Acquisition
community, bearing in mind that many of the reports will be component
or program specific.
We thank you again for the opportunity to review this most important
report and provide comments.
Sincerely,
Signed by:
Steven J. Pecinovsky:
Director:
Departmental GAO/OIG Liaison Office:
[End of section]
(120651)
FOOTNOTES
[1] GAO, High-Risk Series: An Update, GAO-03-119 (Washington D.C.:
January 2003).
[2] DHS Management Directive 0784, Acquisition Oversight Program.
[3] GAO, Interagency Contracting: Improved Guidance, Planning, and
Oversight Would Enable the Department of Homeland Security to Address
Risks, GAO-06-996 (Washington, D.C.: Sept. 27, 2006).
[4] H.R. Rep. No. 109-699, at 118 (2006).
[5] These components have their own internal procurement offices
because they joined DHS with their own contracting support.
[6] GAO-06-996.
[7] GAO, Framework for Assessing the Acquisition Function at Federal
Agencies, GAO-05-218G (Washington D.C.: September 2005).
[8] GAO-06-996.
[9] As part of the oversight plan, the CPO conducts special on-site
reviews in response to issues that need immediate attention. At the
request of the Office of Management and Budget's Office of Federal
Procurement Policy, the CPO reviewed several FEMA programs in 2006,
focusing on the Hurricane Katrina response. The CPO is currently
conducting a follow-up review of FEMA to determine whether corrective
actions have been taken.
[10] GAO, Homeland Security: Successes and Challenges in DHS's Efforts
to Create an Effective Acquisition Organization, GAO-05-179
(Washington, D.C.: Mar. 29, 2005).
[11] See GAO, Internal Control: Standards for Internal Control in the
Federal Government, GAO/AIMD-00-21.3.1 (Washington D.C.: November
1999).
[12] GAO/AIMD-00-21.3.1.
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