Department of Homeland Security
Improved Assessment and Oversight Needed to Manage Risk of Contracting for Selected Services Gao ID: GAO-07-990 September 17, 2007In fiscal year 2005, the Department of Homeland Security (DHS) obligated $1.2 billion to procure four types of professional and management support services--program management and support, engineering and technical, other professional, and other management support. While contracting for such services can help DHS meet its needs, there is risk associated with contractors closely supporting inherently governmental functions--functions that should be performed only by government employees. This report (1) describes the contracted services, (2) identifies potential risk and the extent to which DHS considered risk when deciding to contract for these services, and (3) assesses DHS's approach to managing and overseeing these services. GAO analyzed 117 judgmentally selected statements of work and 9 cases in detail for contracts awarded in fiscal year 2005 by the Coast Guard, the Office of Procurement Operations (OPO), and the Transportation Security Administration (TSA).
More than half of the 117 statements of work that GAO reviewed provided for reorganization and planning activities, policy development, and acquisition support--services that closely support the performance of inherently governmental functions. Other such services supporting a broad range of programs and operations at Coast Guard, OPO, and TSA included budget preparation, regulation development, and employee relations. Decisions to contract for professional and management support services were driven by the need for staff and expertise to get programs and operations up and running. However, for the nine cases we reviewed, program officials did not assess the risk that government decisions may be influenced by, rather than independent from, contractor judgments. These cases included services that have the potential to increase this risk. For example, contractors directly supported DHS missions and performed on an ongoing basis work comparable to that of government employees. Most of the nine contracts also lacked detail or covered a wide range of services. Conditions such as these need to be carefully monitored to ensure the government does not lose control over and accountability for mission-related decisions. DHS has not explored ways to manage the risk of these contractor services, such as through total workforce deployment across the organization. The level of oversight DHS provided did not always ensure accountability for decisions or the ability to judge whether the contractor was performing as required. Federal acquisition policy requires enhanced oversight of contracts for services that can affect government decision making, policy development, or program management. While contracting officers and program officials acknowledged their professional and management support services contracts closely supported inherently governmental functions, they did not see a need for increased oversight. Insufficient oversight increases the potential for a loss of management control and the ability to ensure intended outcomes are achieved.
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-07-990, Department of Homeland Security: Improved Assessment and Oversight Needed to Manage Risk of Contracting for Selected Services
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United States Government Accountability Office:
GAO:
Report to Congressional Requesters:
September 2007:
Department Of Homeland Security:
Improved Assessment and Oversight Needed to Manage Risk of Contracting
for Selected Services:
GAO-07-990:
GAO Highlights:
Highlights of GAO-07-990, a report to congressional requesters.
Why GAO Did This Study:
In fiscal year 2005, the Department of Homeland Security (DHS)
obligated $1.2 billion to procure four types of professional and
management support services”program management and support, engineering
and technical, other professional, and other management support. While
contracting for such services can help DHS meet its needs, there is
risk associated with contractors closely supporting inherently
governmental functions”functions that should be performed only by
government employees.
This report (1) describes the contracted services, (2) identifies
potential risk and the extent to which DHS considered risk when
deciding to contract for these services, and (3) assesses DHS‘s
approach to managing and overseeing these services.
GAO analyzed 117 judgmentally selected statements of work and 9 cases
in detail for contracts awarded in fiscal year 2005 by the Coast Guard,
the Office of Procurement Operations (OPO), and the Transportation
Security Administration (TSA).
What GAO Found:
More than half of the 117 statements of work that GAO reviewed provided
for reorganization and planning activities, policy development, and
acquisition support”services that closely support the performance of
inherently governmental functions. Other such services supporting a
broad range of programs and operations at Coast Guard, OPO, and TSA
included budget preparation, regulation development, and employee
relations.
Decisions to contract for professional and management support services
were driven by the need for staff and expertise to get programs and
operations up and running. However, for the nine cases we reviewed,
program officials did not assess the risk that government decisions may
be influenced by, rather than independent from, contractor judgments.
These cases included services that have the potential to increase this
risk. For example, contractors directly supported DHS missions and
performed on an ongoing basis work comparable to that of government
employees. Most of the nine contracts also lacked detail or covered a
wide range of services. Conditions such as these need to be carefully
monitored to ensure the government does not lose control over and
accountability for mission-related decisions. DHS has not explored ways
to manage the risk of these contractor services, such as through total
workforce deployment across the organization.
The level of oversight DHS provided did not always ensure
accountability for decisions or the ability to judge whether the
contractor was performing as required. Federal acquisition policy
requires enhanced oversight of contracts for services that can affect
government decision making, policy development, or program management.
While contracting officers and program officials acknowledged their
professional and management support services contracts closely
supported inherently governmental functions, they did not see a need
for increased oversight. Insufficient oversight increases the potential
for a loss of management control and the ability to ensure intended
outcomes are achieved.
Range of Contracted Services and Related Risk Level:
Low risk level:
Basic services:
* Custodial;
* Food;
* Landscaping;
* Snow removal;
* Storage;
* Trash collection.
Medium risk level:
Professional and management support services that do not closely
support inherently governmental functions:
* Advertising;
* Banking;
* Parking;
* Records maintenance.
High risk level:
Professional and management support services that closely support
inherently governmental functions:
* Acquisition support;
* Budget preparation;
* Developing or interpreting regulations;
* Engineering and technical services;
* Intelligence services;
* Policy development;
* Reorganization and planning.
Source: GAO analysis.
What GAO Recommends:
GAO recommends that DHS take actions to improve its ability to manage
risk and ensure government control over and accountability for
decisions resulting from services that closely support inherently
governmental functions. DHS generally agreed with these
recommendations.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-990].
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:
DHS Contracts for Selected Services Covered a Range of Activities
Closely Supporting Inherently Governmental Functions:
DHS Did Not Consider Risk when Deciding to Contract for Selected
Services:
Management of Contracts for Selected Services May Not Have Been
Sufficient to Mitigate Risk:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Examples of Inherently Governmental and Approaching
Inherently Governmental Functions:
Appendix III: Department of Homeland Security Inspector General
Oversight:
Appendix IV: Comments from the Department of Homeland Security:
Tables:
Table 1: Range of Contracted Services and Related Risk Level:
Table 2: Examples of Limited Control over and Accountability for
Contracts for Selected Services:
Table 3: Requested Fiscal Year 2005 Contract Statements of Work:
Table 4: Fiscal Year 2005 Contracts Reviewed:
Table 5: Examples of Inherently Governmental Functions:
Table 6: Examples of Services That May Approach Being Inherently
Governmental Functions:
Figures:
Figure 1: DHS Contracting in Fiscal Year 2005:
Figure 2: Coast Guard, OPO, and TSA Contracting for Selected
Professional and Management Support Services in Fiscal Year 2005:
Figure 3: Professional and Management Support Services Closely
Supporting Inherently Governmental Functions in Nine Cases Reviewed:
Figure 4: Inspector General Coverage of DHS Offices and Management
Challenges:
Abbreviations:
COTR: Contracting Officer's Technical Representative:
DHS: Department of Homeland Security:
DOD: Department of Defense:
DOE: Department of Energy:
FAR: Federal Acquisition Regulation:
FEMA: Federal Emergency Management Agency:
FPDS-NG: Federal Procurement Data System-Next Generation:
OFPP: Office of Federal Procurement Policy:
OMB: Office of Management and Budget:
OPO: Office of Procurement Operations:
TSA: Transportation Security Administration:
[End of section]
United States Government Accountability Office: Washington, DC 20548:
September 17, 2007:
The Honorable Joseph I. Lieberman: Chairman:
The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs: United States
Senate:
The Honorable Daniel K. Akaka:
Chairman:
The Honorable George V. Voinovich: Ranking Member:
Subcommittee on Oversight of Government Management, the Federal
Workforce, and the District of Columbia: Committee on Homeland
Security and Governmental Affairs: United States Senate:
The Honorable Bennie G. Thompson:
Chairman:
Committee on Homeland Security:
House of Representatives:
In fiscal year 2006, the Department of Homeland Security (DHS)
obligated $15.7 billion for the procurement of goods and
services,[Footnote 1] making it the third largest department in terms
of procurement spending in the federal government. Of this amount, DHS
obligated over $5 billion on contracts for services categorized as
professional and management support, such as strategic planning, human
resources development, and acquisition support.
While there are benefits to using contractors to perform services for
the government--such as increased flexibility in fulfilling immediate
needs--GAO and others have raised concerns about the federal
government's increasing reliance on contractor services. Of key concern
is the risk associated with contractors providing services that closely
support inherently governmental functions: the loss of government
control over and accountability for mission-related policy and program
decisions. Federal guidance requires agencies to assess this risk and
provide oversight accordingly.
Given the dollars obligated for professional and management support
services contracts and the associated risk, you asked us to review
DHS's use of contracts for services that closely support inherently
governmental functions. Specifically, you asked us to (1) describe the
types of services DHS requested through these contracts, (2) identify
potential risk in these contracts and the extent to which DHS
considered risk when deciding to use these contracts, and (3) assess
DHS's approach to managing and overseeing contracts for these types of
services.
To conduct our work, we reviewed applicable federal procurement
policies and data from the Federal Procurement Data System-Next
Generation (FPDS-NG) for fiscal year 2005, the most recent year for
which complete data were available at the time we began our review. To
identify services that closely support inherently governmental
functions, we reviewed federal acquisition guidance that describes
these functions and FPDS-NG service codes. We selected the four
professional and management support services for which DHS obligated
the most dollars in fiscal year 2005--program management and support
services, engineering and technical services, other professional
services, and other management support services. Because FPDS-NG does
not provide definitions for service codes, to better understand the
services provided, we judgmentally selected 125 contract statements of
work for the four types of professional and management support
services. We selected contracts and orders[Footnote 2] awarded by DHS
components, excluding the Federal Emergency Management Agency
(FEMA)[Footnote 3] that had obligated the most on these services at the
time we began our review--the Coast Guard, the Office of Procurement
Operations (OPO), and the Transportation Security Administration (TSA).
From our selected statements of work, we received and reviewed 117
statements and judgmentally selected and conducted a more detailed
review of 9 cases from the three components. These cases totaled over
$82.1 million, ranging in value from $1.3 million to $42.4 million, and
represented a variety of services that closely support inherently
governmental functions. For the 9 cases, we reviewed contract files and
interviewed contracting officers, program officials, and contractors.
In addition, we interviewed staff from the Office of Management and
Budget's (OMB) Office of Federal Procurement Policy (OFPP), the
component heads of contracting activity at OPO and TSA, and the Chief
of the Office of Procurement Policy at the Coast Guard. Appendix I
provides more information on our scope and methodology. We conducted
our review between April 2006 and August 2007 in accordance with
generally accepted government auditing standards.
Results in Brief:
More than half of the 117 statements of work we reviewed provided for
reorganization and planning activities, policy development, and
acquisition support--services that closely support the performance of
inherently governmental functions. For example, contractors provided
reorganization and planning services for the Coast Guard's fleet
modernization effort--the Integrated Deepwater System. In another case,
contractors provided a range of professional services including
strategic planning and legislative support for TSA's Transportation
Worker Identification Credential Program. Employee relations, budget
preparation, and regulation development were also among the services
provided at the Coast Guard, OPO, and TSA.
Decisions to contract for professional and management support services
were driven by the need for staff and expertise to get programs and
operations up and running. However, for the nine cases we reviewed,
program officials did not assess the risk that government decisions may
be influenced by, rather than independent from, contractor judgments.
Long-standing federal procurement policy requires attention to this
risk. Each of the nine cases we reviewed included services that have
the potential to increase this risk. Specifically, the contracts
included services that directly supported DHS missions; in some cases,
contractors were performing on an ongoing basis work also performed by
government employees, such as intelligence analysis and strategic
planning. And in most cases, we found the original justification for
contracting, such as immediate need, had changed, but components
continued to use contractors without reassessing who--private companies
or federal employees--should perform a given function. In addition, six
of the nine contracts lacked detail or covered a wide range of
services. These conditions need to be carefully monitored to ensure the
government does not lose control over and accountability for mission-
related decisions. DHS has not explored ways to manage the risk of
contracting for these services, such as through total workforce
deployment across the organization, which includes the flexible use of
the workforce to reduce skill gaps.
DHS management and oversight of contracts for selected services did not
provide assurance that DHS had adequately mitigated the related risk.
Federal acquisition policy requires enhanced oversight of contractors
providing professional and management support services that can affect
government decision making, support or influence policy development, or
affect program management. However, most contracting officers and
program officials we spoke with were unaware of this requirement and,
in general, did not see a need for enhanced oversight of their
professional and management support services contracts--even though
they acknowledged these contracts closely supported inherently
governmental functions. According to some officials, their contracting
experience and training enabled them to determine if enhanced oversight
was needed. However, we found the level of oversight provided did not
always ensure accountability for decisions or the ability to judge
whether the contractor was performing as required. In addition,
training was not targeted to provide the necessary skills to determine
whether enhanced oversight was needed. Failure to ensure appropriate
oversight increases the potential for a loss of management control and
ability to ensure intended outcomes are achieved.
To improve DHS's ability to manage the risk of selected services that
closely support inherently governmental functions as well as government
control over and accountability for decisions, we are recommending that
the Secretary of Homeland Security take several actions. These actions
include establishing strategic-level guidance on and routinely
assessing the risk of using contractors for selected services, more
clearly defining contract requirements, and assessing the ability of
the workforce to provide sufficient oversight when using selected
services. In written comments on a draft of this report, DHS concurred
with most of our recommendations and provided information on what
action would be taken to address them. However, DHS partially concurred
with our recommendation to assess the risk of selected services as part
of the acquisition planning process and modify existing guidance and
training, noting that its acquisition planning guidance already
provides for the assessment of risk. However, our review found that
this guidance does not address the specific risk of services that
closely support the performance of inherently governmental functions.
DHS also partially concurred with our recommendation to review selected
services contracts as part of the acquisition oversight program,
stating that instead, the Chief Procurement Officer will direct a
special investigation on selected issues as needed. We did not intend
for the formal oversight plan to be modified and leave it to the
discretion of the Chief Procurement Officer to determine how to
implement the recommendation. DHS's comments are reproduced in their
entirety in appendix IV.
Background:
Governmentwide, spending on services contracts has grown substantially
over the past several years. At DHS, in fiscal year 2005 services
accounted for $7.9 billion, or 67 percent, of total procurement
obligations,[Footnote 4] with $1.2 billion obligated for four types of
professional and management support services: program management and
support, engineering and technical, other professional, and other
management support (see fig. 1). More than two-thirds of DHS's
obligations for these services ($805 million) were to support the Coast
Guard, OPO, and TSA.
Figure 1: DHS Contracting in Fiscal Year 2005:
[See PDF for image]
This figure is a pie-chart depicting the following data:
Services: $7.9 billion;
Products: $3.9 billion;
Four selected professional and management support services: $1.2
billion.
Source: GAO analysis of FPDS-NG data.
[End of figure]
The services federal agencies buy are organized under more than 300
codes in FPDS-NG and range from basic services, such as custodial and
landscaping, to more complex professional and management support
services, which may closely support the performance of inherently
governmental functions. Inherently governmental functions require
discretion in applying government authority or value judgments in
making decisions for the government; as such, they should be performed
by government employees, not private contractors.[Footnote 5] The
Federal Acquisition Regulation (FAR) provides 20 examples of functions
considered to be, or to be treated as, inherently governmental,
including:
* determining agency policy and priorities for budget requests,
* directing and controlling intelligence operations,
* approving contractual requirements, and:
* selecting individuals for government employment.
The closer contractor services come to supporting inherently
governmental functions, the greater the risk of their influencing the
government's control over and accountability for decisions that may be
based, in part, on contractor work. This may result in decisions that
are not in the best interest of the government, and may increase
vulnerability to waste, fraud, or abuse. The FAR provides 19 examples
of services and actions that may approach the category of inherently
governmental because of the nature of the function, the manner in which
the contractor performs the contracted services, or the manner in which
the government administers contractor performance.[Footnote 6] Table 1
provides examples of these services and their relative risk of
influencing government decision making.
Table 1: Range of Contracted Services and Related Risk Level:
Low risk level:
Basic services:
* Custodial;
* Food;
* Landscaping;
* Snow removal;
* Storage;
* Trash collection.
Medium risk level:
Professional and management support services that do not closely
support inherently governmental functions:
* Advertising;
* Banking;
* Parking;
* Records maintenance.
High risk level:
Professional and management support services that closely support
inherently governmental functions:
* Acquisition support;
* Budget preparation;
* Developing or interpreting regulations;
* Engineering and technical services;
* Intelligence services;
* Policy development;
* Reorganization and planning.
Source: GAO analysis of selected FPDS-NG and FAR subpart 7.5 categories
of services, and OFPP Policy Letter 93-1.
Note: Professional and management support services consists of 42 codes
in FPDS-NG.
[End of table]
FAR and OFPP guidance address contracting for services that closely
support the performance of inherently governmental functions, including
professional and management support services, due to their potential
for influencing the authority, accountability, and responsibilities of
government officials. In particular, the guidance states that services
that tend to affect government decision making, support or influence
policy development, or affect program management are susceptible to
abuse and require a greater level of scrutiny. Such services include
advisory and assistance, which includes expert advice, opinions, and
other types of consulting services. The guidance requires agencies to
provide greater scrutiny of these services and an enhanced degree of
management oversight. This would include assigning a sufficient number
of qualified government employees to provide oversight and to ensure
that agency officials retain control over and remain accountable for
policy decisions that may be based in part on a contractor's
performance and work products.[Footnote 7]
The potential for the loss of government management control associated
with contracting for services that closely support the performance of
inherently governmental functions or that should be performed by
government employees is a long-standing governmentwide concern. For
example, in 1981, GAO found that contractors' level of involvement in
management functions at the Departments of Energy (DOE) and Defense
(DOD) was so extensive that the agencies' ability to develop options
other than those proposed by the contractors was limited.[Footnote 8] A
decade later, in 1991, GAO reported that DOE had contracted extensively
for support in planning, managing, and carrying out its work because it
lacked sufficient resources to perform the work itself.[Footnote 9] We
noted that while support service contracts are appropriate for
fulfilling specialized needs or needs of a short-term or intermittent
nature, the contracts we reviewed at DOE were not justified on these
bases. In that same year, GAO reported that three agencies--DOE, the
Environmental Protection Agency, and the National Aeronautics and Space
Administration--may have relinquished government control and relied on
contractors to administer some functions that may have been
governmental in nature.[Footnote 10]
More recently, government, industry, and academic participants in GAO's
2006 forum on federal acquisition challenges and opportunities[Footnote
11] and the congressionally mandated Acquisition Advisory
Panel[Footnote 12] noted how an increasing reliance on contractors to
perform services for core government activities challenges the capacity
of federal officials to supervise and evaluate the performance of these
activities. The panel also noted that contracts for professional
services are often performed with close contact between the federal
government and contractor employees, which approaches the line between
personal and nonpersonal services. Personal services are prohibited by
the FAR, unless specifically authorized, and are indicated when the
government exercises relatively continuous supervision and control over
the contractor. Both the panel and GAO acquisition forum participants
noted the large growth in contracting for complex and sophisticated
services has increased attention to the appropriate use of contractors.
DHS Contracts for Selected Services Covered a Range of Activities
Closely Supporting Inherently Governmental Functions:
A broad range of activities related to specific programs and
administrative operations was performed under the professional and
management support services contracts we reviewed. In most cases, the
services provided--such as policy development, reorganization and
planning activities, and acquisition support--closely supported the
performance of inherently governmental functions. Contractor
involvement in the nine cases we reviewed in detail ranged from
providing two to three supplemental personnel to staffing an entire
office.
Of the $805 million obligated by the Coast Guard, OPO, and TSA in
fiscal year 2005 to procure four types of professional and management
support services, more than one-half of the obligations was for
engineering and technical services--most of which was contracted by the
Coast Guard and OPO. Figure 2 provides a breakdown of contracting
dollars for the four selected professional and management support
services by the three DHS components.
Figure 2: Coast Guard, OPO, and TSA Contracting for Selected
Professional and Management Support Services in Fiscal Year 2005:
[See PDF for image]
This figure is a vertical bar graph with three bars depicted in each of
four categories. The vertical axis of the graph represents dollars in
millions from 0 to 250. The horizontal axis of the graph represents the
four categories. The following data is depicted:
Program management/support services:
Coast Guard: $12.3;
Office of Procurement Operations: $76.4;
Transportation Security Administration: $42.5.
Engineering and technical services:
Coast Guard: $201.2;
Office of Procurement Operations: $183.3;
Transportation Security Administration: $30.7.
Other professional services:
Coast Guard: $38.1;
Office of Procurement Operations: $32.7;
Transportation Security Administration: $17.
Other management services:
Coast Guard: $15.8;
Office of Procurement Operations: $74.1;
Transportation Security Administration: $81.2.
Source: GAO analysis of FPDS-NG data.
[End of figure]
Some of the 117 statements of work we reviewed were for services that
did not closely support inherently governmental functions. These
included a TSA contract for employee parking services at airports and a
Coast Guard contract to maintain historic human resource records and
perform data entry. However, most of the selected statements of work we
reviewed did request reorganization and planning activities,
acquisition support, and policy development--services that closely
supported inherently governmental functions.[Footnote 13] Of the 117
statements of work that we reviewed, 71 included a total of 122
services that fell into these three categories--with reorganization and
planning activities requested most often. For example, the Coast Guard
obligated $500,000 for a contractor to provide services for the
Nationwide Automatic Identification System to identify and monitor
vessels approaching or navigating in U.S. waters. The services included
advising and providing recommendations on strategies for project
planning, risk management, and measuring the performance and progress
of the system. Additionally, the tasks included assisting with the
development of earned value management reviews, life-cycle cost
estimates, and cost-benefit analyses. In another example, TSA obligated
$1.2 million to acquire contractor support for its Acquisition and
Program Management Support Division, which included assisting with the
development of acquisition plans and hands-on assistance to program
offices to prepare acquisition documents.
Because contract statements of work can be broad, or contain
requirements that the contractor may not ultimately perform, we
conducted a more detailed review of nine cases to verify the work
performed. In these nine cases, we found that contractors provided a
broad array of services to sustain a range of programs and
administrative operations, with the categories of reorganization and
planning, policy development, and acquisition support requested most
often. For example, $2.1 million in orders supporting the Coast Guard's
fleet modernization effort--the Integrated Deepwater System--included
modeling and simulation services to analyze the operational performance
and effectiveness of various fleet scenarios for program planning. A
$42.4 million OPO order for professional, technical, and administrative
services for multiple offices in DHS's Information Analysis and
Infrastructure Protection Directorate[Footnote 14] included tasks to
assist in developing policies, budget formulation, and defining
information technology requirements.[Footnote 15] Specifically,
contractor personnel provided general acquisition advice and support to
the Information Analysis and Infrastructure Protection business office,
which included the management, execution, process improvement, and
status reporting of procurement requests. For another office, the
contractor provided an analysis of intelligence threats. A $7.9 million
OPO human capital services order provided a full range of personnel and
staffing services to support DHS's headquarters offices, including
writing position descriptions, signing official offer letters, and
meeting new employees at DHS headquarters for their first day of work.
The extent of contractor involvement in the nine case studies varied
from providing two to three supplemental personnel to staffing an
entire office, and in most cases contractor staff performed services on-
site at DHS facilities. Figure 3 shows the type and range of services
provided in the nine case studies and the location of contractor
performance.
Figure 3: Professional and Management Support Services Closely
Supporting Inherently Governmental Functions in Nine Cases Reviewed:
[See PDF for image]
DHS program or office supported, by component, Coast Guard: Integrated
Deepwater System, Modeling and Simulation Services: Total[a] dollars in
billions: $2.1; Service provided: Budget preparation: [Empty]; Service
provided: Policy developent: [Empty]; Service provided: Acquisition
support: [Empty]; Service provided: Developing or interpreting
regulations: [Empty]; Service provided: Reorganization and planning:
[Check]; Service provided: Contractor representing component[b]:
[Empty]; Service provided: Contractor responding to Freedom of
Information Act request: [Empty]; Service type: Program support:
[Check]; Service type: Administrative operations: [Empty]; Location:
Performed on-site at DHS: [Empty]; Location: Performed at contractor
facility: [Check].
DHS program or office supported, by component, Coast Guard: Competitive
Sourcing Program:
Total[a] dollars in billions: $1.7;
Service provided: Budget preparation: [Check];
Service provided: Policy development: [Check];
Service provided: Acquisition support: [Check];
Service provided: Developing or interpreting regulations: [Empty];
Service provided: Reorganization and planning: [Check];
Service provided: Contractor representing component[b]: [Empty];
Service provided: Contractor responding to Freedom of Information Act request: [Empty];
Service type: Program support: [Check];
Service type: Administrative operations: [Empty];
Location: Performed on-site at DHS: [Check];
Location: Performed at contractor facility: [Empty].
DHS program or office supported, by component, Coast Guard: Office of
Standards, Evaluation, and Development:
Total[a] dollars in billions: $1.3;
Service provided: Budget preparation: [Empty];
Service provided: Policy development: [Check];
Service provided: Acquisition support: [Empty];
Service provided: Developing or interpreting regulations: [Check];
Service provided: Reorganization and planning: [Empty];
Service provided: Contractor representing component[b]: [Empty];
Service provided: Contractor responding to Freedom of Information Act request: [Empty];
Service type: Program support: [Check];
Service type: Administrative operations: [Empty];
Location: Performed on-site at DHS: [Check];
Location: Performed at contractor facility: [Empty].
DHS program or office supported, by component, Office of Procurement
Operations: Information Analysis and Infrastructure Protection
Directorate:
Total[a] dollars in billions: $42.4;
Service provided: Budget preparation: [Check];
Service provided: Policy development: [Check];
Service provided: Acquisition support: [Check];
Service provided: Developing or interpreting regulations: [Check];
Service provided: Reorganization and planning: [Check];
Service provided: Contractor representing component[b]: [Check];
Service provided: Contractor responding to Freedom of Information Act request: [Check];
Service type: Program support: [Check];
Service type: Administrative operations: [Check];
Location: Performed on-site at DHS: [Check];
Location: Performed at contractor facility: [Empty].
DHS program or office supported, by component, Office of Procurement
Operations: U.S. Visitor and Immigration Status Indicator Technology:
Total[a] dollars in billions: $11.8;
Service provided: Budget preparation: [Empty];
Service provided: Policy development: [Empty];
Service provided: Acquisition support: [Check];
Service provided: Developing or interpreting regulations: [Empty];
Service provided: Reorganization and planning: [Check];
Service provided: Contractor representing component[b]: [Empty];
Service provided: Contractor responding to Freedom of Information Act request: [Empty];
Service type: Program support: [Check];
Service type: Administrative operations: [Empty];
Location: Performed on-site at DHS: [Empty];
Location: Performed at contractor facility: [Check].
DHS program or office supported, by component, Office of Procurement
Operations: DHS Headquarters Human Capital Services:
Total[a] dollars in billions: $7.9;
Service provided: Budget preparation: [Empty];
Service provided: Policy development: [Empty];
Service provided: Acquisition support: [Empty];
Service provided: Developing or interpreting regulations: [Empty];
Service provided: Reorganization and planning: [Check];
Service provided: Contractor representing component[b]: [Check];
Service provided: Contractor responding to Freedom of Information Act request: [Empty];
Service type: Program support: [Empty];
Service type: Administrative operations: [Check];
Location: Performed on-site at DHS: [Check];
Location: Performed at contractor facility: [Check].
DHS program or office supported, by component, Transportation Security
Administration: Transportation Worker Identification Credential
Program:
Total[a] dollars in billions: $7.9;
Service provided: Budget preparation: [Check];
Service provided: Policy development: [Check];
Service provided: Acquisition support: [Check];
Service provided: Developing or interpreting regulations: [Check];
Service provided: Reorganization and planning: [Check];
Service provided: Contractor representing component[b]: [Check];
Service provided: Contractor responding to Freedom of Information Act request: [Empty];
Service type: Program support: [Check];
Service type: Administrative operations: [Empty];
Location: Performed on-site at DHS: [Check];
Location: Performed at contractor facility: [Empty].
DHS program or office supported, by component, Transportation Security
Administration: Employee Relations Support Services:
Total[a] dollars in billions: $5.4;
Service provided: Budget preparation: [Empty];
Service provided: Policy development: [Check];
Service provided: Acquisition support: [Empty];
Service provided: Developing or interpreting regulations: [Empty];
Service provided: Reorganization and planning: [Empty];
Service provided: Contractor representing component[b]: [Check];
Service provided: Contractor responding to Freedom of Information Act request: [Empty];
Service type: Program support: [Empty];
Service type: Administrative operations: [Check];
Location: Performed on-site at DHS: [Check];
Location: Performed at contractor facility: [Empty].
DHS program or office supported, by component, Transportation Security
Administration: Secure Flight:
Total[a] dollars in billions: $1.6;
Service provided: Budget preparation: [Check];
Service provided: Policy development: [Empty];
Service provided: Acquisition support: [Check];
Service provided: Developing or interpreting regulations: [Check];
Service provided: Reorganization and planning: [Check];
Service provided: Contractor representing component[b]: [Check];
Service provided: Contractor responding to Freedom of Information Act request:
[Empty];
Service type: Program support: [Check];
Service type: Administrative operations: [Check];
Location: Performed on-site at DHS: [Check];
Location: Performed at contractor facility: [Empty].
Source: GAO analysis.
Note: Categories are based on services that approach being inherently
governmental in FAR subpart 7.5 and therefore may not include all the
services provided by contractors in each of the nine cases.
[A] Obligations based on information provided by DHS at the time of our
review.
[B] Situations in which contractors might be assumed to be agency
employees or representatives. FAR section 7.503(d)(13).
[End of figure]
DHS Did Not Consider Risk when Deciding to Contract for Selected
Services:
A lack of staff and expertise to get programs and operations up and
running drove decisions to contract for professional and management
support services. While program officials generally acknowledged that
these contracts closely supported the performance of inherently
governmental functions, they did not assess the risk that government
decisions may be influenced by, rather than independent from,
contractor judgments. In the nine cases we reviewed, we found
contractors providing services integral to an agency's mission and
comparable to those provided by government employees, and contracts
with broadly defined requirements. These conditions need to be
carefully monitored to ensure the government does not lose control over
and accountability for mission related decisions. DHS has not explored
ways to manage the risk of contracting for these services such as
determining the right mix of government-performed and contractor-
performed services or assessing total workforce deployment across the
department. DHS's human capital strategic plan notes the department has
identified core mission critical occupations and plans to reduce skill
gaps in core and key competencies. However, it is unclear how this will
be achieved and whether it will inform the department's use of
contractors for services that closely support inherently governmental
functions.
DHS Contracting Decisions Were Largely Driven by a Lack of Staff and
Expertise and Immediacy of Need:
The reasons most often cited by program officials for contracting for
services was the need for employees--to start up a new program or
administrative operation, provide specific expertise, or meet immediate
mission needs. When DHS was established in 2003, it was charged with
developing strategies, programs, and projects to meet a new mission
while facing skill gaps in core and key competencies. For example, at
TSA--a component built from the ground up--according to program
officials, the lack of federal staff to provide acquisition support led
to hiring contractors for its Secure Flight program. Federal staff
limitations was also a reason for TSA's contract for employee relations
support services. Many TSA, DHS human capital, and Information Analysis
and Infrastructure Protection program officials said that contracting
for services was necessary because they were under pressure to get
program and administrative offices up and running quickly, and they did
not have enough time to hire staff with the right expertise through the
federal hiring process. In another case, in prior work we found that
when OPO was established, the office had only seven staff to serve more
than 20 organizations.[Footnote 16] Since that time, OPO has expanded
and adjusted the use of contractors for specific functions, such as
acquisition support.
In the case of TSA, the agency needed to immediately establish an
employee relations office capable of serving 60,000 newly hired airport
screeners--an undertaking TSA Office of Human Resources officials said
would have taken several years to accomplish if they hired qualified
federal employees. In another case, DHS human capital officials said
there were only two staff to manage human resources for approximately
800 employees, and it would have taken 3 to 5 years to hire and train
federal employees to provide the necessary services. Similarly, the
Coast Guard, a more established agency, lacked the personnel needed to
address new requirements for its competitive sourcing program.
According to Coast Guard program officials, only one federal employee
was in place when the new requirements were established. An acquisition
plan for modeling and simulation services in support of the Coast
Guard's Integrated Deepwater System cited the need for technological
expertise as one of the reasons for hiring contractors. According to
program officials, contracting for such technological capabilities is
routine at the Coast Guard.
Several officials also described a perception of a management
preference for contracting. For example, an OPO contracting officer
said governmentwide strategies to use contractors influenced program
decisions to award services contracts. TSA program and senior officials
also said decisions to contract were in keeping with a conscious
decision to build a lean organization. For example, in prior work, we
found that TSA contracted extensively to manage human resource needs,
develop and manufacture screening equipment, and provide the
information technology systems it uses to manage day-to-day operations.
In fact, such service contracts represented about 48 percent of TSA's
fiscal year 2003 budget.[Footnote 17]
Selected Cases May Have Been at Risk of Contractors Influencing
Government Decisions:
To ensure the government does not lose control over and accountability
for mission-related decisions, long-standing federal procurement policy
requires attention to the risk that government decisions may be
influenced by, rather than independent from, contractor actions when
contracting for services that closely support inherently governmental
functions. Distinguishing roles and responsibilities of contractors and
government employees and carefully defining requirements for contractor
services become especially important when contracting for professional
and management support services since contractors often work closely
with government employees to provide these services. To manage risk,
participants in GAO's acquisition forum stated that agencies need to
determine the right mix of government-performed and contractor-
performed work in particular settings, and that planning for
contracting outcomes and measurable results is a critical element in
managing a multisector workforce of government employees and
contractors. The nine cases we reviewed provided examples of
contractors performing services integral to an agency's mission and
comparable to those performed by government employees, contractors
providing ongoing support, and broadly defined contract requirements--
conditions that need to be carefully monitored to ensure the government
does not lose control over and accountability for mission-related
decisions.
Contractor Services Integral to DHS's Mission and Comparable to Work
Performed by Government Employees:
In seven of the nine cases, contractors provided services that were
integral to DHS's mission or comparable to work performed by government
employees. For example:
* A contractor directly supported DHS efforts to hire federal
employees, including signing offer letters.
* The contractor for the component's employee relations office provided
advice to supervisors on cases, a function also performed by federal
employees in that office.
* A contractor provided acquisition advice and support to the
Information Analysis and Infrastructure Protection Directorate business
office, working alongside federal employees and performing the same
tasks.
In some of these cases officials said contractors were used to fill
staff shortages. We also found that government employees may have
supervised contractor employees. For example, one contractor performed
mission-related budget, program management, and acquisition services
and was located at government operations centers to provide
opportunities for direct review of the contractor's activities. This
type of close supervision of contractor personnel may constitute
personal services--a contracting arrangement that is prohibited by the
FAR, unless specifically authorized.[Footnote 18]
Ongoing Contractor Support:
In all nine cases, the contractor provided services that lasted for
more than 1 year. Given the risk of contracting for selected services,
it is appropriate to periodically reexamine who--private companies or
federal employees--should perform certain services. However, in five of
the nine cases, the original justification for contracting--to quickly
establish a new office or function--had changed, but the components
extended or recompeted services without considering this change. For
example:
* To establish a competitive sourcing program, the Coast Guard hired a
contractor to provide budget, policy, acquisition support, and
reorganization and planning for more than 5 years. These services have
been extended through August 2009.
* OPO established a temporary "bridge" arrangement without competition
to avoid disruption of critical support including budget, policy, and
intelligence services. Although this arrangement was intended to be
temporary, the order was modified 20 times and extended for almost 18
months. Subsequently, these services were competed and awarded to the
original contractor under six separate contracts. DHS provided
information stating that five of the six contracts expire by the end of
September 2007. However, as of August 2007 DHS had yet to provide a
plan for carrying out these services in the future.
* In another OPO case, a contractor was hired to develop a strategic
plan for the US-VISIT program. While the task was completed in less
than a year, the contractor continued to provide related services in
two subsequent orders.
Continuing to contract for these types of services is particularly
risky since the initial contracting decisions did not include an
assessment of risk.
Broadly Defined Requirements:
Describing in detail the work to be performed under a contract helps to
minimize the risk of paying too much for services provided, acquiring
services that do not meet needs, or entering too quickly into sensitive
arrangements. Well-defined contract requirements can also help minimize
the risk of contractors performing inherently governmental functions.
Defining requirements is a part of the acquisition planning process and
prior GAO work has emphasized the importance of clearly defined
requirements to obtain the right outcome.[Footnote 19]
Broadly defined requirements were also apparent in the 117 statements
of work that we reviewed. For example, at TSA we found multiple
statements of work requesting a similar set of services--including
acquisition and strategic planning, contingency planning, program
oversight, and government cost estimating--in support of different
program offices.
In six of our nine case studies, the requirements as written in the
statements of work were often broadly defined. In four cases, the
statements of work lacked specific details about activities that
closely support inherently governmental functions. For example, the
initial statement of work for a $7.9 million OPO order for human
resources support broadly stated that the contractor would rank
candidates for DHS positions. Without specifying how the contractor was
to perform this task, it was unclear how OPO would hold the contractor
accountable for outcomes. The later contract specified how the
contractor was to rank candidates, including the criteria, processes,
and policies to be used. In the other two cases, the statements of work
included an indiscriminate mix of services.
* A $7.9 million TSA contract included program management support
activities, including professional and technical advice, strategic
planning, performance monitoring, conference support, briefing
preparation, project documentation, technical research and analysis,
and stakeholder relations. Some of these activities fit the description
of advisory and assistance services.
* Similarly, a single $42.4 million OPO order included 58 tasks to
provide a diverse range of services throughout the Information Analysis
and Infrastructure Protection Directorate in support of over 15 program
offices and 10 separate directoratewide administrative efforts.
Services included providing strategic communications planning expertise
and representing the directorate as a member of the DHS-wide Homeland
Security Operations Center, providing intelligence analysis for
Immigration and Customs Enforcement and Customs and Border Protection,
supporting administrative functions such as acquisition planning and
human capital management, and defining information technology
requirements for the directorate. Other services included helping
respond to congressional and Freedom of Information Act requests and
preparing budget justification documents and related briefing materials.
Several program officials noted that the statements of work did not
accurately reflect the program's needs or the work the contractors
actually performed. For example, one statement of work for a $1.7
million Coast Guard order included advisory and assistance services.
However, program officials said the contractor never provided these
services. Another Coast Guard statement of work for a $1.3 million
order initially included developing policy, conducting cost-benefit
analyses, and conducting regulatory assessments, though program
officials told us the contractors provided only technical regulatory
writing and editing support. The statement of work was revised in a
later contract to better define requirements.
Officials Generally Did Not Address Risk when Contracting for Selected
Services:
Contracting officers and program officials for the nine case studies
generally acknowledged that their professional and management support
services contracts closely supported the performance of inherently
governmental functions. However, none assessed whether these contracts
could result in the loss of control over and accountability for mission-
related decisions. DHS has not explored ways to address the risk of
contracting for these services such as determining the right mix of
government performed or contractor performed services or assessing
total workforce deployment across the department.
Federal acquisition guidance highlights the risk inherent in service
contracting--particularly those for professional and management
support--and federal internal control standards require assessment of
risks. Internal control standards provide a framework to identify and
address areas at greatest risk of mismanagement, waste, fraud, and
abuse.[Footnote 20] OFPP staff we met with also emphasized the
importance of assessing the risk associated with contracting for
services that closely support the performance of inherently
governmental functions and establishing effective internal management
controls to ensure agency staff are aware of this risk consistent with
the OFPP guidance. While DHS acquisition planning guidance requires
identification of such acquisition risks as cost, schedule, and
performance, or political or organizational factors, it does not
address the specific risk of services that closely support the
performance of inherently governmental functions.[Footnote 21] Prior
GAO work has found that cost, schedule, and performance--common
measures for products or major systems--may not be the most effective
measures for assessing services.[Footnote 22]
DHS's human capital strategic plan notes the department has identified
core mission critical occupations and plans to reduce skill gaps in
core and key competencies. However, prior GAO work found that DHS had
not provided details on the specific human capital resources needed to
achieve its long-term strategic goals.[Footnote 23] Human capital
planning strategies should be linked to current and future human
capital needs, including the total workforce of federal employees and
contractors; its deployment across the organization; and the knowledge,
skills, and abilities needed by agencies.[Footnote 24] Deployment
includes the flexible use of the workforce, such as putting the right
employees in the right roles according to their skills, and relying on
staff drawn from various organizational components and functions and
using "just-in-time" or "virtual" teams to focus the right talent on
specific tasks. We have also noted the importance of focusing greater
attention on which types of functions and activities should be
contracted out and which ones should not while considering other
reasons for using contractors, such as a limited number of federal
employees. DHS's human capital plan is unclear as to how this could be
achieved and whether it will inform the department's use of contractors
for services that closely support the performance of inherently
governmental functions.
Management of Contracts for Selected Services May Not Have Been
Sufficient to Mitigate Risk:
None of the program officials and contracting officers we spoke with
were aware of the federal acquisition policy requirement for enhanced
oversight of contracts for services that closely support the
performance of inherently governmental functions. Further, few believed
that their professional and management support service contracts
required an enhanced level of scrutiny. For the nine cases we reviewed,
the level of oversight DHS provided did not always ensure
accountability for decisions--as called for in federal guidance--or the
ability to judge whether contractors were performing as required. DHS's
Chief Procurement Officer and Inspector General each have ongoing
efforts to improve procurement oversight. These efforts have the
potential to include reviews of contracting for services that closely
support the performance of inherently governmental functions.
Officials Did Not Provide Required Oversight of Contracts for Selected
Services:
The FAR and OFPP require agencies to provide enhanced oversight of
contracts for services that closely support the performance of
inherently governmental functions to ensure these services do not
compromise the independence of government decision making.[Footnote 25]
DHS contracting officers and program officials from our nine case
studies were unaware of these oversight policies. While these officials
acknowledged the professional and management support services provided
under these contracts closely supported the performance of inherently
governmental functions, most did not believe enhanced oversight of the
contracts was warranted.
According to DHS contracting officers and program officials, cost,
complexity, and visibility are risk factors that trigger the need for
enhanced oversight. Neither these officials nor DHS acquisition
planning guidance cite services that closely support the performance of
inherently governmental functions as a risk factor. In five of the nine
cases we reviewed, contract documents outlined routine oversight
responsibilities for the Contracting Officer's Technical Representative
(COTR) but did not address the need for enhanced oversight as a result
of the type of service. Prior GAO work has found that because services
involve a wide range of activities, management and oversight of service
acquisitions may need to be tailored to the specific circumstances,
including developing different measures of quality or
performance.[Footnote 26]
In four of the case studies, contracting officers and program officials
believed their experience and training enabled them to determine
whether or not enhanced oversight was needed. However, none of the
training policies and documents we reviewed--including DHS's directive
for COTR certification and the Defense Acquisition University's
training curriculum--alerted COTRs to federal policy requiring enhanced
oversight for contracts that closely support inherently governmental
functions or to the risk of such contracts.
Control and Accountability Were Limited:
Federal acquisition guidance requires agencies to retain control over
and remain accountable for decisions that may be based, in part, on a
contractor's performance and work products. This includes making sound
judgments on requirements, costs, and contractor performance. Both the
FAR and OFPP policy state that when contracting for services--
particularly for professional and management support services that
closely support the performance of inherently governmental functions--
a sufficient number of qualified government employees assigned to plan
and oversee contractor activities is needed to maintain control and
accountability. However, we found cases in which the components lacked
the capacity to oversee contractor performance due to limited expertise
and workload demands (see table 2). These deficiencies may have
resulted in a lack of control over and accountability for decisions.
Table 2: Examples of Limited Control over and Accountability for
Contracts for Selected Services:
DHS program or office supported, by component: Coast Guard: Integrated
Deepwater System, Modeling and Simulation Services;
Total dollars (in millions): $2.1;
Example of limited control and accountability: Coast Guard program
officials said they lacked the technical expertise needed to determine
what it would take to perform a particular task. In one case, they
anticipated that it would take about 4 hours to modify a simulation.
Later, the contractor estimated the modification would take 120 hours.
Such a discrepancy illustrates the potential problems that can occur
--such as underestimating costs--when government personnel lack the
expertise needed to independently plan for contracted work.
DHS program or office supported, by component: Office of Procurement
Operations: Information Analysis and Infrastructure Protection
Directorate;
Total dollars (in millions): 42.4;
Example of limited control and accountability: One COTR was assigned
to oversee 58 different tasks, ranging from acquisition support to
intelligence analysis to budget formulation and planning, across multiple
offices and locations. Program and contracting officials noted the resulting
oversight was likely insufficient. To provide better oversight for one
of the follow-on contracts, the program official assigned a new COTR to
oversee just the intelligence work and established monthly meetings
between the COTR and program office to discuss the contract. However,
according to the program official, this change was made to ensure that
the contract deliverables and payments were in order rather than to
address the inherent risk of the services performed.
DHS program or office supported, by component: Office of Procurement
Operations: DHS Headquarters Human Capital Services;
Total dollars (in millions): 7.9;
Example of limited control and accountability: The COTR assigned to
oversee the extensive range of personnel services provided by the
contractor lacked technical expertise, which the program manager
believed affected the quality of oversight provided. To improve
oversight for the follow-on contract, the program manager assigned a
COTR with more human resources experience along with an employee with
human resources expertise to assist the COTR.
Source: GAO analysis.
[End of table]
Prior GAO work has shown similar examples of oversight deficiencies
that can contribute to poor outcomes. For example, in work examining
contracts undertaken in support of response and recovery efforts for
Hurricanes Katrina and Rita, we found that the number of monitoring
staff available at DHS was not always sufficient or effectively
deployed to provide oversight.[Footnote 27] Similarly, in work at DOD,
we have found cases of insufficient numbers of trained contracting
oversight personnel, and cases in which personnel were not provided
enough time to complete surveillance tasks, in part due to limited
staffing.[Footnote 28]
Establishing measurable outcomes for services contracts and assessing
contractor performance are necessary to ensure control and
accountability. DHS components were limited in their ability to assess
contractor performance in a way that addressed the risk of contracting
for professional and management support services that closely support
the performance of inherently governmental functions. Assessing
contractor performance requires a plan that outlines how services will
be delivered. However, none of the related oversight plans and contract
documents we reviewed contained specific measures for assessing
contractors' performance of these services.
DHS Is Implementing Oversight Initiatives:
DHS's Chief Procurement Officer and the Inspector General each have
ongoing efforts to assess DHS contract management. The Chief
Procurement Officer is in the process of implementing an acquisition
oversight program, which is intended to assess (1) compliance with
federal acquisition guidance, (2) contract administration, and (3)
business judgment.[Footnote 29] This program was designed with
flexibility to address specific procurement issues, as necessary, and
is based on a series of reviews at the component level. For example,
the on-site review incorporates assessments of individual procurement
actions. These reviews have potential to include contracting for
services that closely support inherently governmental functions.
The Inspector General also has recently increased its procurement
oversight (see app. III). Common themes and risks emerged from this
work, primarily the dominant influence of expediency, poorly defined
requirements, and inadequate oversight that contributed to ineffective
or inefficient results and increased costs. Inspector General reviews
also noted that many DHS procurement offices reported that their lack
of staffing prevents proper procurement planning and severely limits
their ability to monitor contractor performance and conduct effective
contract administration. While these findings have broad application to
services, OFPP Policy Letter 93-1 encourages the Inspectors General to
also conduct vulnerability assessments of services contracting--which
would include services that closely support inherently governmental
functions--to ensure compliance with related guidance.
Conclusions:
When DHS was established in 2003, it faced an enormous challenge to
quickly set up numerous offices and programs that would provide wide-
ranging and complex services critical to ensuring the nation's
security. With limited staffing options, the department relied on
contractors to perform mission-related services that closely support
the performance of inherently governmental functions. However, the
tasks assigned to contractors were not always clearly defined up front,
and the breadth and depth of contractor involvement were extensive in
some cases. Four years later, the department continues to rely heavily
on contractors to fulfill its mission with little emphasis on assessing
the risk and ensuring management control and accountability. Given its
use of contractors to provide selected services, it is critical for DHS
to strategically address workforce deployment and determine the
appropriate role of contractors in meeting its mission. Until the
department emplaces the staff and expertise needed to oversee selected
services, it will continue to risk transferring government
responsibility to contractors.
Recommendations for Executive Action:
To improve the department's ability to manage the risk of selected
services that closely support inherently governmental functions as well
as government control over and accountability for decisions, we
recommend that the Secretary of Homeland Security implement the
following five actions:
* establish strategic-level guidance for determining the appropriate
mix of government and contractor employees to meet mission needs;
* assess the risk of selected contractor services as part of the
acquisition planning process, and modify existing acquisition guidance
and training to address when to use and how to oversee those services
in accordance with federal acquisition policy;
* define contract requirements to clearly describe roles,
responsibilities, and limitations of selected contractor services as
part of the acquisition planning process;
* assess program office staff and expertise necessary to provide
sufficient oversight of selected contractor services; and:
* review contracts for selected services as part of the acquisition
oversight program.
Agency Comments and Our Evaluation:
We provided a draft of this report to OMB and DHS for review and
comment. In written comments, DHS generally concurred with our
recommendations and provided information on what action would be taken
to address them. The department's comments are reprinted in appendix
IV. OMB did not comment on the findings or conclusions of this report.
DHS concurred with three of our recommendations, and partially
concurred with the other two. Regarding the first recommendation, to
establish strategic guidance for determining the appropriate mix of
government and contractor employees, DHS agreed and stated that its
Chief Human Capital and Chief Procurement Officers plan to initiate
staffing studies and recommend the number and skill sets of federal
employees required to successfully manage its long-term projects and
programs. We agree that such action should provide the basis for
developing a strategic approach to managing the risk of contracting for
selected services.
DHS partially concurred with our recommendation to assess the risk of
selected contractor services as part of the acquisition planning
process and to modify existing acquisition guidance and training
accordingly. DHS agreed that its training for contracting officers and
contracting officer's technical representatives should include the
guidance in OFPP Policy Letter 93-1. DHS stated the Chief Procurement
Officer plans to emphasize this requirement to the component Heads of
Contracting Activity and to department contracting personnel and to
coordinate with the Defense Acquisition University to ensure that
guidance is also included in its training. However, DHS stated that its
Acquisition Planning Guide already provides for the assessment of risk.
Our review of the acquisition planning guidance found that it addresses
risk factors such as cost, schedule, and performance, but it does not
address the specific risk of services that closely support the
performance of inherently governmental functions. As we note in our
report, these types of services carry additional risk that should be
considered when making contracting decisions.
Concerning the third recommendation, to define contract requirements to
clearly describe roles, responsibilities, and limitations of selected
contractor services, DHS concurred and anticipated that the risk of
contracting for selected services will be appropriately addressed more
often in the future. However, DHS did not specify related initiatives.
Because developing well-defined requirements can be challenging but is
essential for obtaining the right outcome, we believe this effort will
require sustained attention from DHS.
DHS also concurred with our fourth recommendation, to assess the
program office staff and expertise necessary to provide sufficient
oversight of selected contractor services. DHS stated that this process
has already begun at TSA and that it plans to proceed on a larger-scale
initiative as part of its overall human capital planning.
With respect to our recommendation that DHS review selected services
contracts as part of the acquisition oversight program, DHS agreed that
these types of services require special assessment, but stated that the
Chief Procurement Officer will direct a special investigation on
selected issues as needed rather than as part of the routine
acquisition oversight reviews. We did not intend that the formal
oversight plan be modified. Rather, we recognize that the acquisition
oversight program was designed with flexibility to address specific
procurement issues as necessary. We leave it to the discretion of the
Chief Procurement Officer to determine how to implement the
recommendation to ensure proper oversight.
As agreed with your offices, unless you publicly announce the contents
of this report, we plan no further distribution for 30 days from the
report date. At that time, we will send copies of this report to the
Secretary of Homeland Security, the Director of the Office of
Management and Budget, and other interested congressional committees.
We will also make copies available to others upon request. In addition,
this report will be available at no charge on the GAO Web site at
[hyperlink, http://www.gao.gov].
If you have questions about this report or need additional information,
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. Other staff making key
contributions to this report were Amelia Shachoy, Assistant Director;
Katherine Trimble; Jennifer Dougherty; Cardell Johnson; Matthew
Saradjian; David Schilling; Karen Sloan; Julia Kennon; Alison Martin;
Noah Bleicher; and Kenneth Patton.
Signed by:
John P. Hutton:
Director:
Acquisition and Sourcing Management:
[End of section]
Appendix I: Scope and Methodology:
To describe the types of services the Department of Homeland Security
(DHS) requested through these contracts, we compiled information from
the Federal Procurement Data System-Next Generation (FPDS-NG) on
procurement spending at DHS and its components for fiscal years 2005
and 2006. To supplement our review of information from FPDS-NG, we
reviewed 117 statements of work and conducted more detailed reviews of
nine cases from fiscal year 2005--the year for which the most complete
data were available at the time we began our review. For the 117
statements of work, we used federal acquisition guidance on services
that closely support the performance of inherently governmental
functions as criteria to describe the types of services DHS requested.
Within those services, we selected three broad categories for more
detailed review--reorganization and planning activities, policy
development, and acquisition support.
To identify potential risk and the extent to which DHS considered risk
when deciding to use contracts for selected professional and management
support services that closely support the performance of inherently
governmental functions, and to assess DHS's management and oversight of
contracts for these types of services, we conducted a detailed review
of nine case studies--three at each component. For each case study, we
reviewed contract documentation, including available acquisition plans,
oversight plans, and records, and interviewed procurement and program
officials at the three components about the decision to use contractors
and contractor oversight, including any processes and guidance used. We
interviewed contractors for seven of the nine cases about their working
relationship with the component offices, the work performed, and the
oversight provided by the component. For the other two cases, we
requested interviews, but the contractors were not available. We also
spoke with the heads of contracting activity at the Office of
Procurement Operations (OPO) and the Transportation Security
Administration (TSA), the Chief of the Office of Procurement Policy at
the Coast Guard, and staff at the Office of Management and Budget's
(OMB) Office of Federal Procurement Policy (OFPP).
Selection of Services and Contracts:
To develop criteria for services that closely support the performance
of inherently governmental functions, we reviewed Federal Acquisition
Regulation (FAR) subpart 7.5 on inherently governmental functions and
FAR section 37.114 on special acquisition requirements, and the Office
of Management and Budget's Office of Federal Procurement Policy Letter
93-1 on management oversight of service contracts.[Footnote 30]
To select services to review, a GAO contracting officer reviewed the
FPDS-NG Product and Service Codes Manual and identified over 30
services considered to closely support the performance of inherently
governmental functions across the following categories: research and
development; special studies and analyses; professional,
administrative, and management support services; and education and
training. To confirm the selection, we then compared each of the
services to federal acquisition guidance that describes inherently
governmental functions and services approaching inherently governmental
functions. On the basis of this review, we gathered and analyzed data
from the FPDS-NG on DHS's fiscal year 2005 obligations for 29 services.
Sixteen of the 29 services fell into the professional, administrative,
and management support services category. From this category, we
selected the 4 services for which DHS obligated the most in fiscal year
2005--program management and support services, engineering and
technical services, other professional services, and other management
support services. We reviewed these criteria with DHS acquisition
policy and oversight officials, focusing on the link between the 4
selected services and federal acquisition guidance. Finally, we
selected the three DHS components, excluding the Federal Emergency
Management Agency (FEMA), that had obligated the most for those
services at the time we began our review--the Coast Guard, OPO, and
TSA.[Footnote 31]
To select contracts to review, we compiled data from FPDS-NG on all
fiscal year 2005 contract actions as of the time we began our review
for the 4 services at the three components. Using the brief contract
description available through FPDS-NG, we used FAR guidance to identify
services that closely support the performance of inherently
governmental functions to select a total of 125 statements of work for
the 4 services: 42 from Coast Guard, 43 from OPO, and 40 from TSA (see
table 3).
Table 3: Requested Fiscal Year 2005 Contract Statements of Work:
Component: Coast Guard;
Program management/support services: 8;
Engineering and technical services: 14;
Other professional services: 11;
Other management support services: 9;
Total by component: 42.
Component: OPO;
Program management/support services: 6;
Engineering and technical services: 8;
Other professional services: 6;
Other management support services: 23;
Total by component: 43.
Component: TSA;
Program management/support services: 17;
Engineering and technical services: 1;
Other professional services: 10;
Other management support services: 12;
Total by component: 40.
Component: Total by service type;
Program management/support services: 31;
Engineering and technical services: 23;
Other professional services: 27;
Other management support services: 44;
Total by component: 125.
Source: GAO analysis of fiscal year 2005 FPDS-NG data.
[End of table]
Of the 125 requested, we received 117 statements of work within the 11-
week time period we allowed. In some cases, DHS was unable to locate
files or FPDS-NG entries were unclear or incorrect. Using the more
detailed description of services included in the 117 statements of
work, we again used FAR guidance to identify services that appeared to
closely support the performance of inherently governmental functions to
select three contracts from each component on which to perform a total
of nine case studies. The nine cases we reviewed in detail represented
the 4 types of professional and management support services and ranged
in value from $1.3 million to $42.4 million. Table 4 provides details
on the case study selection process and the cases reviewed.
Table 4: Fiscal Year 2005 Contracts Reviewed:
Dollars in millions.
For Coast Guard, OPO, and TSA: Contracts for four selected professional
and management support services;
Cases: 942;
Total dollars: $805.6;
Selection criteria: All contracts with dollars obligated in fiscal year
2005, as reported in FPDS-NG.
For Coast Guard, OPO, and TSA: Statements of work for four selected
professional and management support services;
Cases: 125;
Total dollars: $229.2;
Selection criteria: Nonprobability sample selected from 942 contracts
in FPDS-NG. Selection based on comparing the contract description with
FAR guidance for services closely supporting inherently governmental
functions. We selected 110 contracts as potentially supporting
inherently governmental functions and an additional 15 contracts based
on the contract description and to represent a range of dollar values.
For Coast Guard, OPO, and TSA: Case studies for four selected
professional and management support services;
Cases: 9;
Total dollars: $82.1;
Selection criteria: Nonprobability sample selected from 117 statements
of work received from DHS. Selection based on comparing the statement
of work description to FAR guidance that describes services closely
supporting inherently governmental functions. Cases represent a variety
of services and dollar values among the three components.
Source: GAO.
Note: Of the 125 statements of work requested, DHS provided 117,
totaling $207.1 million.
[End of table]
We conducted our review between April 2006 and August 2007 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Examples of Inherently Governmental and Approaching
Inherently Governmental Functions:
Federal Acquisition Regulation section 7.503 provides examples of
inherently governmental functions and services or actions that are not
inherently governmental, but may approach being inherently governmental
functions based on the nature of the function, the manner in which the
contractor performs the contract, or the manner in which the government
administers contractor performance. These examples are listed in tables
5 and 6 below.
Table 5: Examples of Inherently Governmental Functions:
1: Directly conduct criminal investigations;
2: Control prosecutions and perform adjudicatory functions other
than arbitration;
3: Command military forces;
4: Conduct foreign relations and determine foreign policy;
5: Determine agency policy, including regulations;
6: Determine federal program priorities for budget requests;
7: Direct and control federal employees;
8: Direct and control intelligence and counterintelligence operations;
9: Select individuals for federal government employment;
10: Approve position descriptions and performance standards for federal
employees;
11: Determine the disposal of government property;
12: In federal procurement activities with respect to prime contracts:
Determine the supplies or services acquired by the government; participate
as a voting member on any source selection boards; approve contractual
documents, including documents defining requirements, incentive plans,
and evaluation criteria; award contracts; administer contracts;
terminate contracts; determine whether contract costs are reasonable,
allocable, and allowable; and participate as a voting member on
performance evaluation boards;
13: Approve agency responses to Freedom of Information Act requests;
14: Conduct administrative hearings to determine eligibility for security
clearances, or that affect personal reputation or eligibility to participate
in government programs;
15: Approve federal licensing actions and inspections;
16: Determine budget policy, guidance, and strategy;
17: Collect, control, and disburse public funds, unless authorized by statute.
Does not include the collection of public charges to mess halls, national
parks, and similar entities and routine voucher and invoice examination;
18: Control treasury accounts;
19: Administer public trusts;
20: Draft congressional testimony, responses to congressional correspondence,
or agency responses to audit reports.
Source: GAO analysis of FAR section 7.503(c).
[End of table]
Table 6: Examples of Services That May Approach Being Inherently
Governmental Functions:
1: Involve or relate to budget preparation;
2: Involve or relate to reorganization and planning activities;
3: Involve or relate to analyses, feasibility studies, and strategy options
to be used in developing policy;
4: Involve or relate to developing regulations;
5: Involve or relate to evaluating another contractor's performance;
6: Support acquisition planning;
7: Assist in contract management;
8: Provide technical evaluation of contract proposals;
9: Assist in developing statements of work;
10: Support the preparation of responses to Freedom of Information Act requests;
11: Work in situations that may permit access to confidential business
information;
12: Provide information regarding agency policies or regulations;
13: Participate in situations where contractors may be assumed to be agency
employees or representatives;
14: Participate as technical advisors to source selection boards or as members
of a source evaluation board;
15: Serve as arbitrators or provide alternative methods of dispute resolution;
16: Construct buildings intended to be secure; 17: Provide inspection services;
18: Provide legal advice and interpret regulations and statutes for government
officials;
19: Provide non-law enforcement security activities that do not directly involve
criminal investigations.
Source: GAO analysis of FAR section 7.503(d):
[End of table]
[End of section]
Appendix III: Department of Homeland Security Inspector General
Oversight:
GAO designated DHS as a high-risk organization in 2003 due to the
serious implications for our national security that result from the
management challenges and program risks associated with implementing
and transforming the department from 22 agencies. In addition, the DHS
Inspector General has identified major management challenges facing the
department, which are updated annually as required by the Reports
Consolidation Act of 2000.[Footnote 32]
Acquisition and contract management are included as a management
challenge identified by the Inspector General. Other management
challenges identified by the Inspector General include catastrophic
disaster response and recovery including FEMA activities and grants
management; financial management; information technology management,
including the National Asset Database to coordinate infrastructure
protection activity; border security; transportation security; and
trade operations and security mainly through the work of customs and
border protection.
The Inspector General provided oversight coverage of DHS and the
identified management challenges during fiscal years 2005 and 2006
through audits, inspections, memos, management reports, and
investigations. The Inspector General issued 106 reports during fiscal
year 2005 and closed 639 investigations. In fiscal year 2006 the
Inspector General issued 133 reports and closed 507 investigations. As
a result, the Inspector General reported over $271.7 million in
questioned costs, unsupported costs, and better use of funds, and over
$157 million in recoveries, fines, and restitutions resulting from
investigations over the 2-year period.
On August 29, 2005, Hurricane Katrina hit the Gulf Coast states,
causing catastrophic damage to the region, and by September 2005,
Congress had passed legislation that provided approximately $63 billion
for disaster relief, the bulk of which went to the Federal Emergency
Management Agency. Consequently, the DHS Inspector General issued a
significant number of reports that addressed FEMA operations and
grantees (see fig. 4).
The DHS Inspector General increased the number of reports related to
contract and acquisition management from 3 in fiscal year 2005 to 32 in
fiscal year 2006 (see fig. 4). These reports ranged from audits of
specific contracts to overall acquisition management by DHS. For
example, the Inspector General reviewed individual contracts for
disaster recovery from Hurricane Katrina, including debris removal, and
also provided a review of the weaknesses in the procurement and program
management operations throughout DHS. In addition to the DHS Inspector
General's reports, the Defense Contract Audit Agency increased the
number of DHS contract audits from 83 reports to 121 reports over the
same fiscal years.
Figure 4: Inspector General Coverage of DHS Offices and Management
Challenges:
[See PDF for image]
This figure is a vertical bar graph with bars depicting number of
reports in ten categories for fiscal years 2005 and 2006. The vertical
axis of the graph represents number of reports from 0 to 80. The
horizontal axis of the graph represents fiscal year 2005 and 2006
reports in the ten categories. The data depicted is as follows:
Acquisition and contract management:
Number of reports, fiscal year 2005: 3;
Number of reports, fiscal year 2006: 32;
Citizenship and Immigrations Services (CIS):
Number of reports, fiscal year 2005: 5;
Number of reports, fiscal year 2006: 7;
Coast Guard:
Number of reports, fiscal year 2005: 7;
Number of reports, fiscal year 2006: 7;
Customs and Border Protection (CBP):
Number of reports, fiscal year 2005: 10;
Number of reports, fiscal year 2006: 20;
FEMA Operations:
Number of reports, fiscal year 2005: 57;
Number of reports, fiscal year 2006: 76;
FEMA grants management:
Number of reports, fiscal year 2005: 53;
Number of reports, fiscal year 2006: 54;
Immigration and Customs Enforcement (ICE):
Number of reports, fiscal year 2005: 6;
Number of reports, fiscal year 2006: 9;
Information technology:
Number of reports, fiscal year 2005: 18;
Number of reports, fiscal year 2006: 24;
Secret Service:
Number of reports, fiscal year 2005: 3;
Number of reports, fiscal year 2006: 3;
Transportation Security Administration (TSA):
Number of reports, fiscal year 2005: 12;
Number of reports, fiscal year 2006: 16.
Source: GAO analysis of DHS Inspector General audits, memos, and
management reports.
[End of figure]
[End of section]
Appendix IV: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security: [hyperlink, http://www.dhs.gov]:
Washington, DC 20528:
September 10, 2007:
Mr. John P. Hutton:
Director, Acquisition and Sourcing Management: U.S. Government
Accountability Office: 441 G Street, NW:
Washington, DC 20548:
Dear Mr. Hutton:
RE: Draft Report GAO-07-990, Department of Homeland Security: Improved
Assessment and Oversight Needed to Manage Risk of Contracting for
Selected Services (GAO Job Code 120544):
The Department of Homeland Security (DHS) appreciates the opportunity
to review and comment on the draft report referenced above. The U.S.
Government Accountability Office (GAO) makes five recommendations to
improve the Department's ability to manage the risk of selected
services that closely support inherently governmental functions as well
as government control over and accountability for decisions. As
detailed below, we agree with three recommendations and partially agree
with the other two.
Recommendation 1: Establish strategic level guidance for determining
the appropriate mix of government and contractor employees to meet
mission needs.
We agree with the recommendation. In concert with the DHS Chief Human
Capital Officer, personnel within the Office of the Chief Procurement
Officer (OCPO) plan to initiate staffing studies related to the skill
sets of individuals and staffing levels of programs under the purview
of the Department. The outcome of this study will include
recommendations for the number and skill sets of federal employees
required to successfully manage long term projects and programs at the
Department. This effort, in conjunction with overall human capital
planning at the Department, should address the concerns relative to
this recommendation.
Recommendation 2: Assess the risk of selected contractor services as
part of the acquisition planning process, and modify existing
acquisition guidance and training to address when to use and how to
oversee those services in accordance with federal acquisition policy.
We partially agree with the recommendation. The DHS Acquisition
Planning Guide already provides for the assessment of risk with respect
to the planned acquisition processes and this requirement will be
emphasized during OCPO discussions with the Heads of Contracting
Activities as well as through an acquisition alert to Department
contracting personnel.
As a result of the information provided by the GAO during the
engagement, the application of OFPP Letter 93-1, Management Oversight
of Service Contracting (May 18, 1994) was brought to the Department's
attention. Further research on the part of OCPO officials led to the
realization that this particular guidance was not part of the regular
training process for acquisition personnel, not only at DHS but also at
the Defense Acquisition University (DAU). We have taken steps to ensure
that this guidance is disseminated and discussed during DHS training
for Contracting Officers and Contracting Officer Technical
Representatives (COTRs) prior to the certification of the COTRs. DHS
officials have also coordinated with the DAU course director for the
COTR training to ensure that OFPP Letter 91.3 guidance is included in
training at the university. Since DHS officials rely on DAU training
and certification to a certain extent for COTRs, we intend to follow-up
on the inclusion of the guidance in OFPP Letter 93-1 in the DAU
training regimen.
Recommendation 3: Define contract requirements to clearly describe
roles, responsibilities, and limitations of selected contractor
services as part of the acquisition planning process.
OCPO officials agree that implementing this recommendation is the key
to the eventual success of the efforts to address the risks of
contracts for services. As part of the initiatives begun by DHS in the
areas of program and project management, and in conjunction with the
staffing studies discussed above, OCPO officials anticipate that an
increased awareness and understanding of the risks associated with
contracted services will be appropriately addressed more often in the
future. There has already been evidence of this recognition occurring
at the Coast Guard, where the Statement of Work for the contract for
the Office of Standards Evaluation and Development support was
completely revised for the most recent award in order to address the
very issue covered in this report. Better requirements definition for
service contracts will lead to fewer Time and Materials type contracts
and more effective use of Performance Based Service Contracts
throughout DHS. This objective will be very difficult to achieve, and
it is far too early to place such progress on a timeline for
completion. Nevertheless, DHS officials recognize the criticality of
the need and have begun to chart a way forward on the broad front of
requirements definition.
Recommendation 4: Assess program office staff and expertise necessary
to provide sufficient oversight of selected contractor services.
We agree. This process has already begun at the Transportation Security
Administration (TSA). The TSA Assistant Administrator for Acquisition
has developed a notional staffing plan for program and project offices
that incorporates both ethical aspects, such as conflicts of interest,
and the examination of inherently governmental functions in the
development of a staffing plan for a program office. The notional plan
is accompanied by a training program as well as guides to the numbers,
skill sets and assignments of federal employees necessary to maintain
program control, provide oversight and ensure that no inherently
governmental functions are performed by service contractors. While this
effort is being implemented on a component scale at TSA, the Department
is proceeding on a larger scale initiative to address many of the same
issues as mentioned in our response to the first recommendation.
Recommendation 5: Review contracts for selected services as part of the
acquisition oversight program.
We partially agree with the recommendation in so far as to agree that
the Director of Acquisition Oversight at the direction of the Chief
Procurement Officer intends to specifically assess the issue raised in
the report and related recommendation. DHS does not concur that the
recommended practice should be incorporated into the routine
acquisition oversight reviews contemplated, planned and executed in
accordance with DHS Directive 0784, Acquisition Oversight Plan and
Guidance. It would be counterproductive to modify the formal Oversight
Plan for each issue raised by an individual GAO or DHS Office of
Inspector General engagement. To do so would disrupt the workflow of
routine oversight assessments and inevitably result in the devolution
of the corporate wide plan into a series of special reports and
jeopardize the intended planned assessments. OCPO senior personnel
agree that the issue of the appropriate use of service contracts is
worthy of special interest as the rest of the responses to this report
are implemented and will direct a special investigation on selected
issues at the appropriate time.
Sincerely,
Signed by:
Steven J. Pecinovsky:
Director:
Departmental GAO/OIG Liaison Office:
[End of section]
Footnotes:
[1] This amount includes procurement obligations as reported by DHS in
the Federal Procurement Data System-Next Generation, the governmentwide
database for federal procurement spending. This system does not include
all actions, such as those under interagency agreements.
[2] Order refers to a task order for services placed against an
established contract.
[3] FEMA obligated the third highest amount for the selected services
in fiscal year 2005. We excluded FEMA from our sample because of
atypical fiscal year 2005 spending on hurricane relief efforts.
[4] In fiscal year 2006, obligations for services increased to 82
percent of DHS's total procurement obligations, largely due to spending
by FEMA for Gulf Coast hurricane relief efforts.
[5] Federal acquisition policy states that contracts shall not be used
for the performance of inherently governmental functions.
[6] FAR section 7.503 includes examples of both inherently governmental
functions and services that may approach being inherently governmental.
See appendix II for a complete list of these services.
[7] FAR section 37.114, Special acquisition requirements; OFPP Policy
Letter 93-1: Management Oversight of Service Contracting, Office of
Federal Procurement Policy, May 18, 1994.
[8] GAO, Civil Servants and Contract Employees: Who Should Do What for
the Federal Government? FPCD-81-43 (Washington, D.C.: June 19, 1981).
[9] GAO, Energy Management: Using DOE Employees Can Reduce Costs for
Some Support Services, GAO/RCED-91-186 (Washington, D.C.: Aug. 16,
1991).
[10] GAO, Government Contractors: Are Service Contractors Performing
Inherently Governmental Functions? GAO/GGD-92-11 (Washington, D.C.:
Nov. 18, 1991).
[11] GAO, Highlights of a GAO Forum: Federal Acquisition Challenges and
Opportunities in the 21st Century, GAO-07-45SP (Washington, D.C.: Oct.
6, 2006).
[12] Report of the Acquisition Advisory Panel to the Office of Federal
Procurement Policy and the United States Congress, January 2007; see
Services Acquisition Reform Act of 2003, Pub. L. No. 108-136, Title
XIV, § 1423.
[13] For the purposes of our review, acquisition support includes
assisting with acquisition planning, contract management, and
developing contract requirements such as statements of work.
[14] In July 2005, DHS announced that the information analysis function
of the Information Analysis and Infrastructure Protection Directorate
would be moved to the newly created Office of Intelligence and Analysis
in an effort to strengthen intelligence functions and information
sharing. Infrastructure protection became a component within the
National Protection and Programs Directorate.
[15] The Department of Veterans Affairs awarded and originally managed
this order on behalf of DHS; OPO assumed administration duties for DHS
in December 2004.
[16] 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).
[17] GAO, Transportation Security Administration: High-Level Attention
Needed to Strengthen Acquisition Function, GAO-04-544 (Washington,
D.C.: May 28, 2004).
[18] See FAR section 37.104 regarding personal services. Under certain
circumstances, DHS is authorized to procure personal services; the
contracts we reviewed were not awarded under this authority.
[19] GAO, Defense Acquisitions: Tailored Approach Needed to Improve
Service Acquisition Outcomes, GAO-07-20 (Washington, D.C.: Nov. 9,
2006), and GAO, Interagency Contracting: Franchise Funds Provide
Convenience, but Value to DOD Is Not Demonstrated, GAO-05-456
(Washington, D.C.: July 29, 2005).
[20] GAO, Standards for Internal Control in the Federal Government,
GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).
[21] DHS requires acquisition planning and documentation for all
procurements and a formal, written, and approved plan for acquisitions
exceeding $5 million.
[22] GAO-07-20.
[23] GAO, Results-Oriented Government: Improvements to DHS's Planning
Process Would Enhance Usefulness and Accountability, GAO-05-300
(Washington, D.C.: Mar. 31, 2005).
[24] GAO, Human Capital: A Self-Assessment Checklist for Agency
Leaders, GAO/GGD-99-179 (Washington, D.C.: September 1999).
[25] FAR subpart 37.5 and OFPP Policy Letter 93-1 state that
contracting officers should ensure that "best practices" techniques are
used when contracting for services and in contract management and
administration.
[26] GAO-07-20.
[27] GAO, Hurricane Katrina: Improving Federal Contracting Practices in
Disaster Recovery Operations, GAO-06-714T (Washington, D.C.: May 4,
2006).
[28] GAO, Contract Management: Opportunities to Improve Surveillance on
Department of Defense Service Contracts, GAO-05-274 (Washington, D.C.:
Mar. 17, 2005).
[29] GAO, Department of Homeland Security: Progress and Challenges in
Implementing the Department's Acquisition Oversight Plan, GAO-07-900
(Washington, D.C.: June 13, 2007).
[30] While TSA is exempt from the FAR, it follows the Acquisition
Management System, developed by the Federal Aviation Administration,
which adheres as a matter of policy to certain governmentwide laws,
regulations, and executive agency requirements.
[31] The Federal Emergency Management Agency obligated the third
highest amount for the selected services in fiscal year 2005. We
excluded FEMA from our sample because of atypical fiscal year 2005
spending on hurricane relief efforts.
[32] Pub. L. No. 106-531, 114 Stat. 2537 (Nov. 22, 2000).
[End of section]
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