Homeland Security
Transformation Strategy Needed to Address Challenges Facing the Federal Protective Service Gao ID: GAO-04-537 July 14, 2004With responsibility for protecting thousands of federal facilities, the Federal Protective Service (FPS), which transferred from the General Services Administration (GSA) to the Department of Homeland Security (DHS) in March 2003, plays a critical role in the federal government's defense against the threat of terrorism and other criminal activity. GAO was asked to determine what challenges, if any, FPS faces now that it has been transferred from GSA to DHS.
FPS faces a number of significant challenges now that it has been transferred from GSA to DHS. These relate to its expanding mission and increased responsibility, unresolved issues about how it will be funded in the future, and the transfer of FPS mission-support functions to DHS. Expanding mission and increased responsibility: FPS has responsibility for securing approximately 8,800 GSA government-occupied facilities and as a result of the transfer, plans to take on additional DHS facilities. FPS might also seek authority to protect other federal facilities. FPS's mission has also expanded to include other homeland security functions, such as support for efforts to apprehend foreign nationals suspected of illegal activity. In light of these changes, however, FPS does not have a transformation strategy to address its expanding mission, as well as the other challenges it is facing. Unresolved issues related to funding: As part of GSA, FPS was funded from security fees that were included with tenant agencies' rent payments. It has not been decided if FPS will begin billing agencies. DHS believes that FPS lacks the authority to bill agencies for facility protection, but GSA disagrees with DHS. Also, GSA has historically covered a shortfall between the cost of security and security fees collected. In commenting on this report, DHS and GSA said that for fiscal year 2005 the President's budget includes an increase in the FPS security rate that, if enacted, will eliminate the shortfall. Related to funding, we also found that FPS's involvement in homeland security activities not directly related to facility protection is inconsistent with a requirement in the Homeland Security Act of 2002 that FPS funding from agency rents and fees be used solely for the protection of government buildings and grounds. Transfer of mission-support functions to DHS: FPS still relies on GSA for mission-support functions, such as travel services, payroll, and contracting support. DHS plans to assume these functions by the end of fiscal year 2004. However, assuming these functions prematurely could affect FPS's ability to accomplish its mission. For example, FPS relies heavily on contract guards and is dependent on GSA's contracting management software to write contracts, track costs, and make vendor payments.
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-04-537, Homeland Security: Transformation Strategy Needed to Address Challenges Facing the Federal Protective Service
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Report to the Chairman, Committee on Government Reform, House of
Representatives:
July 2004:
HOMELAND SECURITY:
Transformation Strategy Needed To Address Challenges Facing the Federal
Protective Service:
GAO-04-537:
GAO Highlights:
Highlights of GAO-04-537, a report to the Chairman, Committee on
Government Reform, House of Representatives:
Why GAO Did This Study:
With responsibility for protecting thousands of federal facilities, the
Federal Protective Service (FPS), which transferred from the General
Services Administration (GSA) to the Department of Homeland Security
(DHS) in March 2003, plays a critical role in the federal government‘s
defense against the threat of terrorism and other criminal activity.
GAO was asked to determine what challenges, if any, FPS faces now that
it has been transferred from GSA to DHS.
What GAO Found:
FPS faces a number of significant challenges now that it has been
transferred from GSA to DHS. These relate to its expanding mission and
increased responsibility, unresolved issues about how it will be funded
in the future, and the transfer of FPS mission-support functions to
DHS.
* Expanding mission and increased responsibility. FPS has
responsibility for securing approximately 8,800 GSA government-occupied
facilities and as a result of the transfer, plans to take on additional
DHS facilities. FPS might also seek authority to protect other federal
facilities. FPS‘s mission has also expanded to include other homeland
security functions, such as support for efforts to apprehend foreign
nationals suspected of illegal activity. In light of these changes,
however, FPS does not have a transformation strategy to address its
expanding mission, as well as the other challenges it is facing.
* Unresolved issues related to funding. As part of GSA, FPS was funded
from security fees that were included with tenant agencies‘ rent
payments. It has not been decided if FPS will begin billing agencies.
DHS believes that FPS lacks the authority to bill agencies for facility
protection, but GSA disagrees with DHS. Also, GSA has historically
covered a shortfall between the cost of security and security fees
collected. In commenting on this report, DHS and GSA said that for
fiscal year 2005 the President‘s budget includes an increase in the FPS
security rate that, if enacted, will eliminate the shortfall. Related
to funding, we also found that FPS‘s involvement in homeland security
activities not directly related to facility protection is inconsistent
with a requirement in the Homeland Security Act of 2002 that FPS
funding from agency rents and fees be used solely for the protection of
government buildings and grounds.
* Transfer of mission-support functions to DHS. FPS still relies on GSA
for mission-support functions, such as travel services, payroll, and
contracting support. DHS plans to assume these functions by the end of
fiscal year 2004. However, assuming these functions prematurely could
affect FPS‘s ability to accomplish its mission. For example, FPS relies
heavily on contract guards and is dependent on GSA‘s contracting
management software to write contracts, track costs, and make vendor
payments.
The Federal Protective Service Protects Thousands of Federal
Facilities:
[See PDF for image]
[End of figure]
What GAO Recommends:
We are recommending that DHS (1) direct FPS to develop a transformation
strategy that addresses its significant challenges; (2) initiate a
dialogue with GSA to resolve disagreement over billing issues; (3)
take immediate steps to ensure that funds collected from agency rents
and fees are used in the future solely for facility protection; and (4)
ensure that DHS is prepared to integrate FPS mission-support functions
before these functions are transferred, even if the target date has to
be extended. DHS concurred with recommendations 1, 3, and 4. DHS and
GSA continue to disagree on whether FPS has the authority to bill
agencies for its services. As such, we added recommendation 2 after
receiving comments from DHS and GSA to encourage a resolution of this
disagreement.
www.gao.gov/cgi-bin/getrpt?GAO-04-537.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Mark L. Goldstein at
(202) 512-2834 or goldsteinm@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Expanding Responsibilities Pose a Challenge for FPS:
Issues Related to How FPS is Funded:
Successfully Transferring FPS Mission-Support Functions to DHS Will Be
Challenging:
Considering Key Practices Could Help FPS Address Challenges and Achieve
a Successful Transformation:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Homeland Security:
Appendix III: Comments from the General Services Administration:
Appendix IV: GAO Legal Analysis of Issues Concerning FPS Activities Not
Related to Facility Protection:
Figures:
Figure 1: FPS's Location within DHS's Organizational Structure:
Figure 2: FPS Officers Engaged in Biological and Chemical Weapons
Response Training:
Figure 3: FPS Officers Assisting with Crowd Control:
Figure 4: Key Practices for Successful Mergers and Organizational
Transformations:
Abbreviations:
DHS: Department of Homeland Security:
GSA: General Services Administration:
FPS: Federal Protective Service:
BTS: Border and Transportation Security:
ICE: Immigration and Customs Enforcement:
PBS: Public Building Service:
Customs: U.S. Customs Service:
INS: Immigration and Naturalization Service:
FAMS: Federal Air Marshal Service:
NIH: National Institutes of Health:
OMB: Office of Management and Budget:
Letter July 14, 2004:
The Honorable Tom Davis:
Chairman:
Committee on Government Reform:
House of Representatives:
Dear Mr. Chairman:
Attention to the physical security of federal facilities has increased
since the 1995 bombing of the Alfred P. Murrah Federal Building in
Oklahoma City. The September 11, 2001, terrorist attacks further
heightened this concern and led to the consolidation of 22 agencies
into the Department of Homeland Security (DHS). This report responds to
your request for information on the transfer of the Federal Protective
Service (FPS) from the General Services Administration (GSA) to DHS,
where FPS is now part of the Border and Transportation Security
Directorate's (BTS) component known as Immigration and Customs
Enforcement (ICE). In creating DHS, the government's efforts to
prevent, protect against, and respond to potential terrorism were
centralized. The establishment of a new federal department is an
enormous undertaking that, in the case of DHS, comes with significant
risk, which is why we designated the implementation and transformation
of DHS as a high-risk area in January 2003. In addition, we also
designated federal real property as a high-risk area affecting several
agencies, due in part to the major challenge of protecting federal real
property from terrorism.
Our objective was to determine what challenges, if any, FPS faces now
that it has been transferred from GSA to DHS. To do this work, we
collected and analyzed agency documents about the transfer. This
included policies and procedures, information about the organizational
structure, and information on other issues related to the transfer,
such as funding. We assessed the reliability of the data we used and
found that they were sufficiently reliable for the purposes of this
report. We also interviewed DHS, FPS, and GSA officials responsible
for, and directly affected by, the transfer. More information on our
scope and methodology appears in appendix I. We conducted our work in
Washington, D.C., between September 2003 and May 2004 in accordance
with generally accepted government auditing standards.
Results in Brief:
FPS faces a number of significant challenges now that it has been
transferred from GSA to DHS. These relate to its expanding mission and
increased responsibility, unresolved issues about how it will be funded
in the future, and the transfer of FPS mission-support functions to
DHS.
* FPS has responsibility for securing approximately 8,800 GSA owned or
occupied federal facilities and plans to take on responsibility for,
according to FPS, approximately 2,500 additional DHS facilities. FPS
officials also discussed the possibility of expanding FPS's
responsibilities to include protection for facilities where GSA had
previously delegated authority to tenant agencies--FPS identified 20
agencies with delegated authority, including the Departments of
Defense, Interior, and State. DHS has also expanded FPS's mission to
include other functions related to homeland security, such as providing
backup to other DHS law enforcement units in the field in efforts to
apprehend foreign nationals suspected of illegal activity and assisting
with crowd control at major protests. Despite these changes and the
major transformation FPS is facing, FPS does not have an overall
strategy for how it will carry out its expanding mission, as well as
meet other challenges it faces. For this reason, we are recommending
that FPS develop such a strategy for its own transformation. In
commenting on this report, DHS concurred with our recommendation to
develop a transformation strategy for FPS. DHS said that it was
developing a strategic plan for FPS that would address our
recommendation. Although this plan was not issued when we finalized
this report, it is important to note that a transformation strategy
goes beyond what is typically contained in a strategic plan.
Specifically, a transformation strategy would include overall goals for
the transformation with specific action plans and milestones that would
allow FPS to track critical phases and essential activities.
* In addition to these formidable mission-related challenges, there are
unresolved issues related to funding FPS's operations. When FPS was
part of GSA, tenant agencies' rental payments included security fees
that GSA used to fund FPS operations. Now that FPS is part of DHS,
determining the appropriate funding approach for FPS has centered on
whether GSA will continue to bill agencies for FPS's services, which
DHS supports, or whether FPS should take on this function, as GSA would
prefer. Comments from DHS and GSA showed continued disagreement on this
issue. As such, we have added a recommendation to DHS aimed at
resolving the disagreement. Also, GSA has historically covered a gap
that has existed between the cost of protection provided by FPS and the
security fees collected from tenant agencies--GSA said that this gap
was $139 million in fiscal year 2003. In commenting on this report, DHS
and GSA also noted that, for fiscal year 2005, the President's budget
includes an increase in the FPS security rate that, if enacted, will
eliminate the shortfall between FPS collections and the cost of
security. Also related to funding, we found that FPS's involvement in
homeland security activities not directly related to facility
protection is inconsistent with a requirement in the Homeland Security
Act of 2002 that FPS funding from agency rents and fees be used solely
for the protection of government buildings and grounds. DHS said that
FPS's involvement in activities not directly related to facility
protection did not affect its primary mission. However, this is still a
concern because of the specific legal requirement that agency rents and
fees be used solely for facility protection. We are recommending that
the Secretary of Homeland Security take immediate steps to ensure that
funds collected from agency rents and fees are used in the future
solely for the protection of government buildings and grounds. DHS
concurred with this recommendation but had concerns about our
interpretation of the statute, which are discussed in more detail in
the report.
* Another challenge facing FPS is its reliance on GSA for mission-
support functions such as payroll, travel reimbursement, and
contracting support. DHS and GSA did not meet an original goal to
transfer these functions by the end of fiscal year 2003. According to
DHS, FPS, and GSA officials, the delay was caused by issues related to
how DHS systems would be integrated, DHS's focus on integrating larger
departmental components, and difficulties extracting FPS activities
from GSA systems. DHS officials said that they intend to have FPS fully
integrated by the end of fiscal year 2004. However, assuming these
functions prematurely could affect FPS's ability to accomplish its
mission. For example, FPS relies heavily on contract guard services,
but according to DHS officials, is dependent on GSA's contracting
management software for tracking costs and managing vendor payments. As
such, we are recommending that the Secretary of Homeland Security
ensure that DHS is prepared to effectively integrate FPS mission
support before these functions are transferred from GSA. DHS concurred
with this recommendation.
Background:
FPS was established in 1971 as the uniformed protection force of GSA
government-occupied facilities. FPS has authority, among other things,
to enforce laws and regulations aimed at protecting federal property
and persons on such property, and to conduct investigations on, federal
property.[Footnote 1] FPS was originally located within GSA's Public
Building Service (PBS). As part of PBS, FPS was responsible for
providing law enforcement and security services to GSA's tenants and
the public at about 8,800 federal buildings nationwide. As of September
30, 2003, FPS data show that FPS had approximately 1,100 uniformed
officer full-time equivalents (FTE)[Footnote 2] and 13,000 contract
guards to protect GSA-owned or -occupied facilities. In addition, these
data showed that FPS had 353 management and mission-support FTE. In
addition to managing security at GSA-held facilities, FPS officers also
provide other security services such as developing risk assessments,
installing security equipment, and conducting criminal investigations.
In response to the 1995 bombing of the Alfred P. Murrah Federal
Building in Oklahoma City, FPS began enhancing its strategy for
protecting federal facilities and making additional security
improvements at GSA facilities. FPS officials said that FPS also began
relying more on the use of contract guards to provide security and law
enforcement protection at its facilities. FPS currently employs
approximately 13,000 contract guards. The level of physical protection
services FPS provides at each building varies. In some cases, FPS has
delegated the protection of facilities to tenant agencies, which may
have uniformed officers of their own or may contract separately for
guard services.
The September 11 terrorist attacks resulted in a renewed emphasis on
protecting federal facilities and the nation against terrorist
activities. The attacks prompted Congress to pass the Homeland Security
Act, which created the Department of Homeland Security (DHS). The new
department's mission, among other things, is to prevent terrorist
attacks within the United States, reduce the vulnerability of the
United States to terrorism, and minimize the damage and assist in the
recovery from attacks that do occur. The act combined 22 federal
agencies specializing in various disciplines, such as law enforcement,
border security, biological research, computer security, and disaster
mitigation. As a result of the creation of DHS, FPS was moved from GSA
to the new department, effective March 1, 2003. Within DHS, FPS became
part of the Border and Transportation Security Directorate's (BTS)
component known as Immigration and Customs Enforcement (ICE). BTS is
tasked with securing the nation's borders and safeguarding its
transportation infrastructure. ICE is the investigative and law
enforcement arm of BTS and is composed primarily of the investigative
components that were formerly part of the U.S. Customs Service
(Customs) and the Immigration and Naturalization Service (INS). ICE
also includes FPS, the Federal Air Marshal Service (FAMS), and a number
of other offices. Figure 1 shows FPS's location within DHS's
organizational structure.
Figure 1: FPS's Location within DHS's Organizational Structure:
[See PDF for image]
[End of figure]
The transfer of FPS is only one of a number of organizational transfers
and related changes that DHS is managing. While DHS faces the challenge
of protecting the nation from terrorism, it is also tasked with
combining a disparate group of agencies with multiple missions and
unique cultures. Recognizing that the establishment of a new department
is an enormous undertaking, GAO designated the implementation and
transformation of DHS as high-risk in January 2003. This designation is
based on three factors: (1) the size and complexity of the undertaking,
(2) the merging agencies have an array of existing management
challenges, and (3) failure by DHS has potentially serious
consequences.[Footnote 3] In January 2003, GAO also designated federal
real property as a high-risk area in part because of the major
challenges agencies face in protecting federal real property from
terrorism.[Footnote 4]
Expanding Responsibilities Pose a Challenge for FPS:
Under the Homeland Security Act, DHS became responsible for protecting
buildings, grounds, and property owned, occupied, or secured by the
federal government that are under GSA's jurisdiction.[Footnote 5] In
addition to GSA facilities, the act also provides FPS with the
authority to protect the buildings, grounds, and property of other
agencies whose functions were transferred to DHS.[Footnote 6] This
effectively meant that FPS, which was merged into DHS, would continue
its role as the security and protection force for GSA real property
assets as well as DHS properties not held by GSA, and would be
performing this function as part of DHS.[Footnote 7] A March 2003
operational memorandum of agreement between GSA and DHS made FPS
responsible for the same types of security services for GSA facilities
that FPS provided before the move to DHS. These include performing risk
assessments, managing the installation of security equipment, and
conducting criminal investigations. With regard to non-GSA properties,
this amounts to approximately 2,500 properties that were held by DHS
components and were not part of the GSA real property inventory,
according to the FPS chief of staff. This official said that in fiscal
year 2005, FPS would collect information, determine the risk
categories, and identify existing law enforcement and protective
measures at each DHS facility. FPS plans to use this information to
develop a strategy that lays out how FPS can take over responsibility
for security at the 2,500 additional DHS properties. FPS's chief of
staff told us that it might take a number of years before FPS fully
assumes control of security at these facilities.
The Director of FPS said that eventually FPS might seek to expand its
responsibilities to include protection for facilities where GSA had
previously delegated authority to tenant agencies, as well as other
facilities where agencies have protective forces with missions similar
to that of FPS. The Director of FPS stressed that expanding FPS's
authority further is a long-term vision and that FPS is still examining
the feasibility of different options. FPS provided information
identifying 20 agencies where GSA had previously delegated some of its
authority for facility protection or contract guard services. This
included various facilities occupied by the Departments of Defense,
Agriculture, Commerce, Health and Human Services, Interior, Justice,
Labor, State, and Transportation. The Director of FPS said that, in
addition, a number of agencies have their own security forces and that
it does not make sense for the federal government to have multiple
security forces, all charged with facility protection. An example FPS
provided was the National Institutes of Health (NIH), which has a small
police force charged with protecting NIH's Bethesda, Maryland, campus.
FPS officials added that the Homeland Security Act, in their view,
provides FPS with the authority for extending FPS's protection
responsibilities because it provides the Secretary of Homeland Security
with broad authority in implementing actions deemed necessary to
protect against terrorism.[Footnote 8] In commenting on a draft of this
report, DHS said that we took the comments of the Director out of
context. DHS also had concerns with our summary and synthesis of the
relevant statutory requirements FPS has that are related to FPS's
responsibility for protecting federal buildings, grounds, and property.
DHS's comments and our evaluation of them are discussed in more detail
in the agency comments section of this report.
FPS Has New Law Enforcement Authority and Assists with Other DHS
Activities:
In addition to increased responsibility in terms of the number of
buildings under its control, the Homeland Security Act gave FPS new law
enforcement authority for use in carrying out its facility protection
mission. This new law enforcement authority empowers officers and
special agents to take action off of federal property to protect the
property and the public.[Footnote 9] It also allows officers to enter
into agreements with state and local law enforcement personnel to carry
out activities that promote homeland security. Previously, FPS officers
were not authorized to enforce laws off of federal property and, for
example, would have to contact local law enforcement personnel to
handle illegal activity on the street in front of federal buildings, if
it were to occur. FPS officials said that the new authority would
better allow them to protect facilities and become more involved in
intergovernmental activities aimed at promoting homeland security, such
as biological and chemical weapons response training (see fig. 2).
Figure 2: FPS Officers Engaged in Biological and Chemical Weapons
Response Training:
[See PDF for image]
[End of figure]
DHS has also broadened FPS's responsibilities to include assisting with
homeland security activities that are not directly related to facility
protection. For example, FPS officials said that FPS officers have
provided backup for other DHS law enforcement officers in immigration-
related work, such as "Operation Predator," a program aimed at
arresting foreign nationals involved in child pornography. In addition,
FPS officials said that FPS officers assisted with various DHS
activities--such as crowd control at the free trade protests in Miami,
Florida, and protection for major national events such as the Olympics.
At the time of our review, FPS's Web site also listed other activities,
including support for security at the Kentucky Derby, which did not
relate directly to federal facility protection. We also noted instances
where the press reported on FPS participation in other activities, such
as involvement in sobriety checks and safety patrols in San Francisco,
California. FPS officials said that participation in these activities
was intended to enhance FPS's integration into DHS and that FPS's
participation in these types of activities will likely continue. FPS's
involvement in these activities, and, more specifically, issues related
to how they are funded, will be discussed in more detail later in this
report and in appendix IV. Figure 3 shows FPS officers assisting with
crowd control at a protest.
Figure 3: FPS Officers Assisting with Crowd Control:
[See PDF for image]
[End of figure]
FPS's expanding mission and increased responsibility represent a
formidable change for the agency. Transferring to a new federal
department is a significant undertaking for any organization. Yet FPS-
-like several other DHS components--is transferring to DHS while
simultaneously focusing on new issues that reflect fundamental changes
since September 11 in how the government approaches homeland security
issues. In our report designating the establishment of DHS as a high-
risk area, we emphasized that the magnitude of the responsibilities,
combined with the challenge and complexity of the transformation,
underscores the perseverance and dedication that will be required of
all DHS's leaders, employees, and stakeholders in order to achieve
success.[Footnote 10] The Director of FPS agreed with our assessment
that the mission-related changes FPS is facing represent a formidable
challenge. However, our work showed that FPS does not have a strategy
for how it will carry out its expanding mission and increased
responsibility, as well as meet the other challenges it is facing.
FPS's need for such a transformation strategy, as well as its belief
that it is embracing these changes as an opportunity for a positive
transformation, are discussed in more detail later in this report.
Issues Related to How FPS is Funded:
Maintaining a means of funding FPS that will ensure the adequate
protection of federal facilities and allow FPS to meet new homeland
security responsibilities is another challenge. When it was part of
GSA, FPS was funded through security fees that were included with the
rent payments GSA received from tenant agencies. In March 2003, just
after FPS's transfer, GSA and DHS agreed that for fiscal year 2004, GSA
would continue to collect security fees on behalf of FPS and transfer
these funds to DHS. DHS's fiscal year 2004 appropriations act
identifies about $424 million to be transferred from the revenue and
collections in the federal buildings fund[Footnote 11] to DHS for FPS
operations. According to FPS officials, the security fees GSA collects
are intended to cover security standards designated for each building.
These standards cover perimeter, entry, and interior security and
security planning matters.[Footnote 12] Under this process, GSA would
bill agencies for security services on a prorated, square-foot basis,
depending on the amount of space each agency occupied. [Footnote 13]
In addition to these security services, FPS also provides agencies
with additional services, upon request, under its reimbursable program.
For example, agencies may request additional magnetometers or more
advanced perimeter surveillance capabilities. For fiscal year 2004,
FPS's reimbursable program will provide an estimated $337 million in
funding for these requests, according to FPS's chief of staff.
The President's fiscal year 2005 budget, released in February 2004,
proposes that security fee collections be credited to the FPS account
in the Department of the Treasury and identifies $478 million in
funding for FPS. GSA and FPS officials said that for fiscal year 2005,
an approach is under consideration whereby GSA would send tenant
agencies separate bills for security and rent. Instead of collecting
security fees with agency rental payments, tenant agencies would send
the security fees directly to the FPS account at Treasury. Under this
approach, these officials said that these funds would not pass through
the federal buildings fund. In addition, estimates in the President's
2005 budget for the reimbursable program remained at $337 million,
unchanged from fiscal year 2004. In its written response to several
funding questions we posed to FPS officials, DHS said that FPS was
exploring potential future funding strategies that would better support
the expanded mission and revised law enforcement responsibilities
associated with the transfer to DHS. Although no decisions have been
made regarding how FPS will be funded in the future, DHS, FPS, and GSA
officials indicated that discussions to date have centered on whether
GSA would continue its practice of billing agencies for security
services or whether this should be done by FPS. In DHS's written
response on funding issues, DHS took the position that billing
individual agencies for the security services FPS provides for GSA
buildings was GSA's responsibility.
Specifically,
* DHS said that the billing process and equitable distribution of
security costs among the occupants of federal buildings is inherently a
real estate function. As such, distributing security costs is similar
to distributing utility costs, operation and maintenance costs of major
building mechanical systems, and other shared costs. For federal
buildings in GSA's inventory, DHS said that this responsibility is
specifically reserved for GSA.
* DHS said that the Homeland Security Act made it clear that GSA would
continue to be responsible for all real estate-related functions, such
as collecting rents and fees, including fees collected for protective
services.[Footnote 14]
* DHS said that the transfer of FPS to DHS makes it clear that the
primary mission of FPS is to protect buildings and grounds owned or
occupied by the federal government and the persons on the
property.[Footnote 15] According to DHS, FPS does not have the mission
or authority to establish a separate, duplicative billing and
collection process, similar to the one presently established and
operated in support of the GSA real estate mission.
DHS added that one possible approach would entail FPS providing GSA
with the estimated total costs for its basic law enforcement and
protective services. Under this approach, which amounts to FPS billing
GSA in one lump sum for its services, GSA would then determine the best
method for distributing these costs equitably among the tenant
agencies. FPS would also provide separate cost estimates for the
additional costs that are associated with specific buildings, and GSA
would determine the appropriate distribution of these costs among the
tenants occupying the building. GSA officials we interviewed had a
markedly different view from that of DHS on whether GSA or FPS should
bill agencies for security services in the future. According to the
Deputy Commissioner of the Public Buildings Service and a GSA budget
official, GSA does not want to be involved in billing agencies for FPS
security services. These officials said that GSA feels very strongly
about this because GSA no longer has control over setting security
rates and the level of security required at each building.
In addition, in commenting on a draft of this report, GSA provided a
legal analysis that disagreed with DHS's position that FPS lacks
authority to bill agencies for security services. GSA said that it
considers incorrect any implication that GSA is responsible for billing
and collecting fees owed to DHS for FPS-furnished services and that FPS
does not have the authority to bill for such services. GSA's complete
legal analysis is included in appendix III. GSA continued that as a
matter of government efficiency, and in the interest of avoiding
unnecessary duplicative systems, GSA could agree to continue to use its
systems to produce and distribute a bill on behalf of FPS. GSA added
that while it is authorized to provide its billing services to FPS on a
reimbursable basis, this does not mean that DHS's billing
responsibilities for FPS-provided services belong to GSA. We did not
determine whether DHS or GSA was correct in its legal analysis of
issues related to billing. However, because of the differing views of
DHS and GSA, it would be useful for DHS and GSA to engage in further
dialogue so that agreement can be reached. It would be appropriate, in
our view, for DHS to initiate these discussions, since FPS is now part
of DHS. If, after further discussion, DHS and GSA still disagree on
issues related to authority for billing, it would be worthwhile to seek
resolution from the Office of Management and Budget (OMB) or the
Treasury.
Although issues related to authority for billing agencies were
unresolved, we had the following observations related to various
options: having GSA continue to bill for security fees makes FPS
dependent on GSA to implement a funding mechanism for its operations;
in addition to limiting FPS's control over this process, this could
also make it unclear which agency is accountable to tenant agencies and
other stakeholders. On the other hand, much work would likely be needed
for FPS to develop the expertise, information, and systems for
interfacing with GSA and tenant agencies if FPS were to take over the
billing function. For example, on the basis of our discussions with GSA
and FPS officials, FPS would need to cover the costs of, and develop a
method for, collecting up-to-date data on buildings in the GSA
inventory and agency space assignments. FPS would also need a financial
management function for billing and collections, or DHS would have to
integrate such a process into its financial management systems.
Regarding DHS's suggestion that a possible approach might entail FPS
providing a total estimated cost to GSA, it would be critical for FPS
to develop and provide reliable data and GSA would need assurance that
FPS was doing so. Providing reliable data would be a challenge for FPS
because, as will be discussed in more detail later, DHS faces
challenges related to integrating its component agencies' mission
support systems and producing reliable management information.
Nonetheless, DHS emphasized in its discussion on funding issues that
FPS is working to establish the appropriate level of law enforcement
and protective services required and is developing a plan for phasing
these requirements and their related costs into subsequent budget
years. DHS said that this process would utilize historical costs,
workload, benchmarks, and best practices collected from federal, state,
and local agencies that perform similar functions.
As FPS moves forward, accurately identifying costs would also be
important because of shortfalls GSA has experienced between collections
and the cost of providing security. According to FPS's director of
financial management and a GSA budget official familiar with FPS
funding issues, the security fees GSA charges tenant agencies
historically have not been sufficient to cover FPS operations. To
address the past shortfalls, GSA has covered the additional costs with
other funds from the federal buildings fund. For example, according to
a GSA budget official, security fees in fiscal year 2003 generated
about $139 million less than it cost to fund the basic services that
FPS provides to tenant agencies. According to these GSA and FPS
officials, the shortfalls have been caused over the years by increasing
security costs and restrictions on tenant agencies' rental payments
that were enacted in legislation. In commenting on this report, DHS and
GSA also noted that for fiscal year 2005 the President's budget
includes an increase in the FPS security rate that, if enacted, will
eliminate the shortfall between FPS collections and the cost of
security. Nonetheless, even if this increase helps close the gap
between the cost of security and tenant payments, the accurate
identification of costs still represents a challenge that may need to
be addressed if the mechanism for funding FPS were restructured.
Funding for Some FPS Activities Not Directly Related to Facility
Protection:
DHS has broadened FPS's responsibilities to include assisting with
homeland security activities that are not directly related to building
protection. FPS officials said that these activities have primarily
included providing backup to other DHS law enforcement units in the
field and that DHS has the authority under the Homeland Security Act to
engage FPS in activities DHS deems necessary to enhance homeland
security. However, engaging FPS in these activities under its current
funding structure is inconsistent with a provision of the act that
provides that funds transferred by GSA to DHS from rents and fees
collected by GSA are to be used solely for the protection of federal
buildings and grounds.[Footnote 16] FPS officials said that GSA-
transferred funds have been FPS's only source of funding for the
security services it provides and that the reimbursable funds it
receives from agencies are tied to specific agency requirements. It is
our position that DHS's use of FPS staff time and other resources for
activities that are not directly related to the protection of federal
buildings and grounds is inconsistent with the act, which limits the
use of agency funds from rents and fees to the protection of buildings
and grounds owned or occupied by the federal government.
In November 2003, we requested that DHS provide information on the
extent of FPS's involvement in activities not related to building
protection, the legal basis for any such activities, and the reasons
these activities would be permissible in light of the act's prohibition
on the use of funds transferred from GSA to DHS. In a written response
from DHS's Under Secretary for Border and Transportation Security, DHS
stated that it did not keep detailed records of these activities. DHS
said that FPS's involvement in these activities was minor, or de
minimus, and that FPS only performed an assist role. DHS added that the
support FPS provided did not affect the accomplishment of FPS's mission
and that its participation in operations away from federal facilities
was minimal. DHS indicated in its response that these activities were
permissible because they had no impact on FPS operations and because no
special equipment was procured for these activities.
We understand that FPS's involvement in these activities was, in DHS's
view, minor and may not have had a direct effect on facility
protection. We also understand, as DHS pointed out, that FPS's
involvement in such activities can strengthen interoperability and
bonding between FPS and other DHS law enforcement units. However, the
funding of FPS's involvement in these activities is a concern because
of the specific statutory language contained in the Homeland Security
Act related to the use of funds collected from agency rents and fees.
At a minimum, if DHS plans to continue and perhaps increase FPS's
involvement in these activities, having a means of reimbursing FPS, or
funding these activities separately, would be consistent with the
requirement that funds from agency rents and fees intended for facility
protection are used for that purpose. Also, funding these activities
separately would make it necessary for DHS to track them and develop a
way to account for their costs. Having such a process would, as a
result, allow for greater accountability with regard to the deployment
of FPS resources. In its written response to questions we had during
our review on funding issues, DHS said that FPS has an established
process for recouping expenses of a reimbursable nature. DHS
acknowledged that this process could also be used--within DHS--to
recoup the cost of non-facility-protection-related activities
currently being performed by FPS.
In commenting on this report, DHS again expressed its view that such
activities would not have to be reimbursed if they are of limited
duration with local offices, ad hoc, and do not increase the direct
costs of FPS operations and investment in staff. DHS said it proposes
to issue guidance to this effect. We continue to disagree with DHS on
this issue and believe that the proposed guidance would not be
appropriate. The agency comments section of this report and appendix IV
contain a complete discussion of our position.
Successfully Transferring FPS Mission-Support Functions to DHS Will Be
Challenging:
In addition to challenges associated with expanding responsibilities
and establishing a funding mechanism, FPS still was relying on GSA for
many of its mission-support functions. As part of GSA, FPS was not
self-sufficient with respect to mission-support functions, including
payroll, travel services, and contracting. These functions were
performed for FPS by mission-support staff located in other GSA
organizational units. For example, its contracting functions--which are
integral to FPS's mission because of FPS's extensive use of contract
guards--were handled by the contracting component of GSA's Public
Buildings Service. Furthermore, FPS employees used GSA's centralized,
integrated administrative system, known as FedDesk, to perform many
day-to-day functions such as time and attendance and travel requests
and reimbursement. According to FPS officials, FPS's reliance on staff
and systems outside of its organization was different from other,
larger agencies that moved to DHS and had internal mission-support
functions and systems that were transferred to DHS with the
organizations.
Recognizing that FPS faced a challenge, DHS and GSA signed a mission-
support memorandum of agreement in February 2003 so that GSA could
continue to support FPS after the transfer. Under this agreement, GSA
would provide FPS with reimbursable mission support for human
resources, payroll, information technology, and some contracting
functions until these functions were transferred to DHS. FPS officials
said that funds used to reimburse GSA for these services were to come
out of agency rents and fees originally transferred from GSA. DHS and
GSA set a goal of the end of fiscal year 2003 for this transfer.
However, GSA and DHS were unable to meet this goal and opted to extend
the agreement until the end of fiscal year 2004. According to DHS, GSA,
and FPS officials that we interviewed, the transfer of mission support
did not occur for the following reasons:
* DHS was still in the process of determining which mission support
systems it would adopt from agencies and organizations that had
transferred into DHS and how the various systems would be integrated;
* DHS management was focusing its efforts on the transfer of larger
agencies, such as INS and Customs, and DHS believed that since FPS was
being supported by GSA, DHS could focus on agencies that were larger
and were a greater priority; and:
* FPS activities were deeply integrated into GSA's mission-support
systems. For example, FPS's e-mail, telecommunications, travel, time
and attendance, and human resource systems are all part of GSA's
FedDesk system, and extracting them individually for use by DHS would
be difficult.
DHS officials said that they intend to have FPS mission support fully
integrated before the end of fiscal year 2004. Specifically, at the
time of our review, DHS intended to transfer FPS's information
technology support by June 2004 and the remaining administrative
systems--human resources, travel, payroll, and contracting support--by
September 2004. We did not assess the effect that FPS's reliance on GSA
for mission support had on FPS's effectiveness in protecting
facilities. In commenting on this report's discussion of contracting,
DHS stated that the contracting function does not pose a challenge
because it has already transferred from GSA to DHS. According to DHS,
FPS has a senior contracting specialist at headquarters who oversees
policies and standards for the contract guard program. DHS added that
24 contracting officers are currently managing FPS contracts throughout
FPS's 11 regions. Nonetheless, we still believe that the contracting
area poses a challenge because of FPS's continued reliance on GSA to
support this function. More specifically, although FPS has contracting
staff on line, GSA and FPS officials told us that FPS has continued to
use GSA's contracting management software to write contracts, track
costs, and make vendor payments. Contracting support, at the time of
our review, had not been integrated into DHS's systems. The January
2004 mission-support memorandum of agreement between GSA and DHS
specifies that FPS will pay GSA about $544,000 for these services for
fiscal year 2004. Because contracting support is critical to FPS's
ability to accomplish its mission due to its reliance on contract
guards, a smooth transfer of these functions will be imperative.
During our review, we also found other difficulties that FPS had
encountered related to mission support. FPS officials said that their
lack of in-house mission support resulted in instances where law
enforcement officers had to assume administrative duties. For example,
according to these officials, law enforcement personnel played a large
role in resolving problems FPS was having in October 2003 with
government purchase cards that were issued by DHS. These cards, FPS
officials explained, were not compatible with GSA's financial systems
because the DHS cards were from a different financial institution. FPS
officials acknowledged that having law enforcement officers perform
these types of functions could divert resources from protecting
facilities and participating in other homeland security activities.
Furthermore, these officials said that there has been confusion about
whether FPS should adhere to GSA or DHS administrative policies and
procedures, as well as where they should go for assistance or to get
approval for administrative issues. For example, a senior FPS official
said that in October 2003, 7 months after the transfer, DHS and GSA had
not resolved which agency would approve restored annual leave for
officers who were required to be on duty because of emergencies. In
commenting on this report, GSA said that the January 2004 memorandum of
agreement between GSA and DHS had resolved many of the issues related
to administrative policies and procedures. Also, DHS said in its
comments that related to travel, ICE has implemented an electronic
travel system to move to a more efficient travel authorization and
vouchering process.
Clearly, FPS faces a major challenge integrating its mission-support
activities with DHS. In fact, FPS's situation is symptomatic of the
broader mission support and information system challenges DHS is facing
as a new federal department. In our January 2003 Performance and
Accountability Series report on DHS, we reported that DHS faces
considerable challenges in integrating the many systems and processes
that provide management with decision information.[Footnote 17] We
encouraged DHS to identify its needs in order to build effective
systems that can support the national homeland security strategy in the
future. Furthermore, DHS would be faced with the challenge of
integrating the contracting functions of its many constituent programs
and missions, some of which have had past deficiencies. For example, in
May 2002, we reported that for its import processing system, Customs
lacked important acquisition management controls.[Footnote 18] In July
2003, we reported that INS did not have the basic infrastructure--
including oversight, information, and an acquisition workforce--in
place to ensure that its contracting activity is effective.[Footnote
19] Customs and INS concurred with our findings and agreed to take
action. These concerns about contracting issues have implications for
FPS given that it relies heavily on contracting, through its contract
guard program, to accomplish its mission. Overall, given the concerns
about DHS's ability to integrate FPS mission-support activities, FPS's
ability to accomplish its mission could be affected if these functions
were to be transferred prematurely. Therefore, it is important for DHS
to ensure that it can effectively integrate these functions before they
are transferred from GSA, even if it is necessary to extend the
September 2004 target date.
Considering Key Practices Could Help FPS Address Challenges and Achieve
a Successful Transformation:
Despite the challenges it faces, FPS's transfer to DHS presents an
opportunity for a positive transformation. According to FPS officials,
the transfer has given FPS the opportunity to reevaluate its mission
and assess whether it is sufficiently organized and equipped to meet
its new and broader roles. FPS's top management team has embraced the
new role in homeland security and is eager to become fully integrated
with a law enforcement agency. These officials added that they have
begun to rethink FPS's approaches and priorities so that FPS can better
protect federal facilities, the employees who occupy them, and the
visiting public. Fully implementing the transfer into DHS and
completing the type of transformation FPS envisions will be critical to
FPS's long-term viability and success. Yet, given the challenges we
identified, carrying out this transformation will be no easy task. To
better ensure a successful transformation, FPS and its stakeholders
could benefit from considering the experiences of other organizations
that have undergone successful mergers and transformations. GAO's July
2003 report on implementation steps to assist mergers and
transformations identified key practices followed by public and private
sector organizations that have led to success.[Footnote 20] These key
practices are shown in figure 4 and are briefly described below. A more
comprehensive discussion of these practices and related implementation
steps can be found in our July 2003 report.
Figure 4: Key Practices for Successful Mergers and Organizational
Transformations:
[See PDF for image]
[End of figure]
* Ensure top leadership drives the transformation--Because a merger or
transformation entails fundamental and often-radical change, strong and
inspirational leadership is indispensable. Top leadership must set the
direction, pace, and tone and provide a clear, consistent rationale
that brings everyone together behind a single mission.
* Establish a coherent mission and integrated strategic goals to guide
the transformation--The mission and strategic goals of a transformed
organization must become the focus of the transformation, define the
culture, and serve as the vehicle for employees to unite and rally
around. Mission clarity is especially essential to define the purpose
of the transition to employees, customers, and stakeholders. The
strategic goals must align with and support the mission and serve as
continuing guideposts for agency decision making.
* Focus on a key set of principles and priorities at the outset of the
transformation--A clear set of principles and priorities serves as a
framework to help the organization create a new culture and drive
employee behaviors. Focusing on these principles and priorities helps
the organization focus on performing mission-related activities while
maintaining its drive toward achieving the goals of the transformation.
* Set implementation goals and a timeline to build momentum and show
progress--A merger or transformation is a substantial commitment that
could take years to complete and therefore must be carefully monitored.
As a result, it is essential to establish long-term action-oriented
implementation goals and a timeline with milestones to track the
organization's progress toward its short-and long-term transformation
goals.
* Dedicate an implementation team to manage the transformation process-
-Dedicating a strong and stable implementation or integration team that
will be responsible for the transformation's day-to-day management is
important to ensuring that the transformation receives the focused,
full-time attention needed to be sustained and successful.
Specifically, the implementation team is important to ensuring that
various change initiatives are sequenced and implemented in a coherent
and integrated way. Top leadership must give the team the necessary
authority and resources to set priorities, make timely decisions, and
move quickly to implement top leadership's decisions regarding the
transformation.
* Use a performance management system to define responsibility and
ensure accountability for change--An organization's performance
management system is a vital tool for aligning the organization with
desired results and showing how team, unit, and individual performance
contribute to overall organizational results. Performance management
systems can help manage and direct the transformation process. These
systems are the basis for setting employee's expectations in the
transformation process and evaluating individual contributions to the
success of the transformation process and organizational results.
* Establish a communication strategy to create shared expectations and
report related progress--Creating an effective internal and external
communication strategy is essential to implementing a merger or
transformation. Communication is most effective when it occurs early
and often and when it is downward, upward, and lateral. Organizations
have found that communicating information early and often helps to
build trust among employees and stakeholders, as well as an
understanding of the purpose of planned changes. Organizations must
develop a comprehensive communication strategy that reaches out to
employees, customers, and stakeholders and seeks to engage them in the
transformation process.
* Involve employees to obtain their ideas and gain their ownership for
the transformation--A successful merger and transformation must involve
employees and their representatives from the beginning to gain their
ownership of the changes that are occurring in the organization.
Employee involvement strengthens the transformation process by
including frontline perspectives and experiences. Further, employee
involvement helps to create the opportunity to establish new networks,
increase employees' understanding and acceptance of organizational
goals and objectives, and gain ownership of new policies and
procedures.
* Build a world-class organization--Successful organizations
continually seek to implement best practices in processes and systems
in areas such as information technology, financial management,
acquisition management, and human capital.
We did not do an in-depth analysis comparing these practices with FPS's
transformation efforts. Nonetheless, FPS officials, including its
Director, agreed that it would be useful for FPS to consider following
these practices. FPS provided examples where it believed its efforts
reflected these practices. These related to areas such as FPS's heavy
involvement on departmentwide teams dedicated to integrating DHS's
components, participating in the development of a strategic plan for
DHS, and improving its core competencies in, for example, law
enforcement training, so that it is better prepared to fulfill its
expanding mission and responsibilities. However, we noted other
critical areas reflected in the key practices where greater attention
could, in our view, enhance FPS's chances of making a successful
transformation. For example, although FPS has provided input to DHS's
strategic plan,[Footnote 21] which was released in February 2004, FPS
has not developed a transformation strategy of its own that reflects
key practices. Such a strategy could contain implementation goals,
measures, and a timeline that FPS could use to show progress toward its
transformation. In addition to containing goals and measures related to
progress with its transformation, FPS could use such a plan as a
platform for demonstrating its effectiveness with its mission to
protect federal facilities and performance in other homeland security
activities. It could also demonstrate how FPS's transformation links
with the broader goals and objectives that are contained in DHS's
strategic plan that relate to facility protection and FPS's other
homeland security activities. To be more effective, it could also be
linked to DHS's ongoing integration efforts. Incorporating key
practices into FPS's ongoing transformation efforts could be
particularly helpful given the significant challenges FPS is facing.
These challenges--FPS's expanding mission and increased
responsibility, unresolved issues related to funding, and the transfer
of mission support from GSA to DHS--will complicate FPS's
transformation efforts until they are addressed or, at a minimum,
factored into FPS's transformation planning efforts.
In commenting on a draft of this report, DHS said that in March 2004
FPS began developing its own strategic plan, which DHS said would
support the overall goals and objectives of the DHS strategic plan and
would be consistent with GAO's key practices for organizational mergers
and transformations. At the time this report was finalized, FPS's
strategic plan had not been issued. However, it is important to note
that a transformation strategy would contain information beyond what
would be found in a typical strategic plan. The agency comments section
of this report further discusses transformation strategies and what
they contain.
Our past work has discussed adopting similar practices for DHS.
Recognizing that the establishment of a new department is an enormous
undertaking, we designated the implementation and transformation of DHS
as high-risk in our January 2003 Performance and Accountability and
High Risk series.[Footnote 22] We reported that in addition to the high
risk associated with developing a new department from a multitude of
agencies, DHS is confronted with a number of existing major management
challenges from the functions and organizations being transferred to
it. We encouraged DHS to implement some of the key practices to assist
mergers and organizational transformations discussed earlier,
including clearly defining the mission and goals of the new department,
devoting sustained efforts to transition planning, and involving
employees in the transformation process.
We also recommended adopting similar practices at DHS components such
as the U.S. Coast Guard and FAMS. In our work looking at the transition
of the Coast Guard to DHS, we reported that the Coast Guard was
experiencing numerous implementation challenges as it transitioned to
DHS.[Footnote 23] These challenges include developing a new strategic
plan that reflects the Coast Guard's wide variety of missions,
establishing effective communication links and partnerships within DHS
and with external organizations, and establishing performance
management systems that incorporate the Coast Guard's new homeland
security mission. We suggested that the Coast Guard could also benefit
from implementing the key practices for mergers and transformations.
Lastly, we reported that FAMS is facing challenges in implementing
changes resulting from its merger into DHS, including issues related to
roles and responsibilities, training, and coordination with external
organizations such as Transportation Security Administration.[Footnote
24] We recommended the implementation of some of the key practices to
help FAMS with such changes. DHS, FAMS, and the Coast Guard concurred
with our recommendations. For example, in commenting on the
recommendations for FAMS, DHS said that it welcomed our proposals for
using key practices that would ultimately maximize FAMS's ability to
protect the American people, contribute to the protection of the
nation's critical infrastructure, and preserve the viability of the
aviation industry.
Conclusions:
With its critical role in protecting federal real property against the
threat of terrorism and other criminal activity, it is imperative that
FPS's transfer to DHS and its related transformation are successful.
However, in addition to the inherent challenges any organization would
face in becoming part of a new federal department, FPS brings a set of
unique challenges that have great bearing on its ability to accomplish
its mission. Given the significance of the challenges it is facing--an
expanding mission and increased responsibility; unresolved issues
related to funding, including past shortfalls that were covered by GSA;
and various mission-support issues--FPS could benefit from a
transformation strategy that effectively makes the case for what type
of organization it believes it should become and provides a road map
for getting there. Consideration of key practices that others have
focused on to successfully transform their organizations could be an
important part of such a strategy.
Related to funding, it would be appropriate for DHS to initiate a
dialogue with GSA aimed at resolving the disagreement concerning FPS's
authority to bill agencies for security services. Regarding FPS's
involvement in homeland security activities not related to facility
protection, such involvement is a concern because of the requirement in
the Homeland Security Act that agency rents and fees be used solely for
the protection of federal buildings and grounds. At a minimum, if DHS
plans to continue and perhaps increase FPS's involvement in these
activities, having a means of reimbursing FPS, or funding these
activities separately, would be consistent with the requirement that
funds from agency rents and fees intended for facility protection are
used for that purpose. Also, funding these activities separately would
make it necessary for DHS to track them and develop a way to account
for their costs. Finally, ensuring a seamless transfer of mission-
support functions from GSA to DHS is critical. Given the concerns about
DHS's ability to integrate FPS mission-support activities, prematurely
transferring these functions to DHS could negatively affect FPS's
ability to carry out its mission responsibilities.
Recommendations for Executive Action:
We are making four recommendations to the Secretary of Homeland
Security. First, we recommend that the Secretary direct the Director of
FPS--in consultation with the Under Secretary for Border and
Transportation Security and the Assistant Secretary for Immigration and
Customs Enforcement--to develop and implement a transformation strategy
that reflects FPS's consideration of key practices and addresses the
significant challenges it is facing. In particular, this strategy
should identify implementation goals, measures, and a timeline that FPS
could use to show progress toward its transformation and demonstrate
that it is accomplishing its mission while undergoing changes. It
should also link FPS's goals and measures to the broader goals and
objectives contained in DHS's strategic plan and to DHS's ongoing
integration efforts. In serving as a road map for FPS's transformation,
such a strategy should be used by FPS as a platform to identify
strategies and proposals for addressing the significant challenges that
we identified--expanding mission and increased responsibility,
unresolved issues related to funding, and mission-support challenges
related to the eventual transfer of these functions from GSA to DHS.
Second, we recommend that the Secretary initiate a dialogue with GSA
aimed at resolving disagreement between DHS and GSA about whether FPS
has the authority to bill GSA's tenant agencies for security services.
If this issue cannot be resolved, DHS should seek resolution from OMB
or the Treasury. Third, we recommend that the Secretary take immediate
steps to ensure that funds collected from agency rents and fees are
used in the future solely for the protection of buildings and grounds
owned or occupied by the federal government. If FPS continues its
involvement in activities not directly related to facility protection,
a funding process would be needed that is consistent with the
requirement regarding the use of funds from agency rents and fees. In
addition, a means of tracking these activities and determining related
costs would also be needed. Last, we recommend that the Secretary
ensure that DHS is prepared to effectively integrate FPS mission-
support functions before these functions are transferred from GSA, even
if it is necessary to extend the September 2004 goal for the transfer.
Agency Comments and Our Evaluation:
We provided a draft of this report to DHS and GSA for their official
review and comment. DHS provided its comments in a letter from the
Director of Resources, Border and Transportation Security Directorate,
on May 3, 2004. These comments can be found in appendix II. As noted in
DHS's letter, DHS also provided separate technical comments, which we
did not publish but incorporated where appropriate. The U.S. Secret
Service also provided some technical comments, which we incorporated
where appropriate. GSA provided its comments in a letter from the
Deputy Commissioner of the Public Building Service on April 29, 2004.
In commenting on this report, GSA also provided a legal analysis
regarding the authority to charge and collect FPS security fees. GSA's
position was discussed earlier in this report, and its comments and
legal analysis can be found in appendix III. GSA and DHS comments on
the historical gap between security fees and costs were also discussed
earlier in this report.
DHS concurred with our recommendations to develop a transformation
strategy, to ensure that agency rents and fees are used solely for
facility protection, and to ensure that DHS can effectively integrate
FPS mission-support functions before these functions are transferred
from GSA. On the basis of the comments we received from DHS and GSA
showing their continued disagreement on billing issues, we added the
recommendation aimed at resolving this disagreement. As a result, DHS
did not comment on this additional recommendation because it was added
after the comment period. Although DHS generally agreed with the
report's message and concurred with the other recommendations, it took
issue with certain aspects of our analysis. DHS's comments on the
challenges FPS faces in the contracting area were discussed earlier. In
addition, DHS had comments on several other aspects of the report,
which are discussed below. These related to the FPS Director's
discussion of delegations of authority for facility protection, the
extent of FPS's authority to protect federal facilities, the components
of FPS security fees, funding for activities not related to facility
protection, and FPS's need for a transformation strategy.
FPS Director's Comments on Delegation of Authority for Facility
Protection--DHS said that we took certain comments made by the Director
of FPS out of context. DHS was referring to discussions we had with the
Director about expanding FPS's authority to include protection of
facilities where GSA had previously delegated authority to tenant
agencies. DHS said that the Director was referring to efforts by the
House Committee on Transportation and Infrastructure, Subcommittee on
Economic Development, Public Buildings and Emergency Management, to
suspend further delegations of any authority for facility protection to
GSA tenant agencies. While the subject of delegation was discussed with
the Director, we disagree with DHS's assessment that we took the
Director's comments out of context. The discussions dealt specifically
with existing delegations and FPS's desire to expand its
responsibilities by "getting back" authority for protection where it
had previously been delegated by GSA. Furthermore, the Director's
comments were not the only instance where the issue of expanding FPS's
authority was raised. On four other occasions during our review, top
FPS officials, including the chief of staff, made it clear to us that
FPS may seek to expand its authority. This was also discussed by an ICE
official. And, because these issues dealt with possible future plans,
we included the Director's caveat, in the report, that expanding FPS's
authority is a long-term vision and that FPS is still examining the
feasibility of different options. GSA commented that it had no
objections to our interpretation of the Homeland Security Act and
agreed that FPS's authority to protect federal property includes
properties under the custody and control of GSA, as well as those under
the custody and control of DHS. GSA also said that while FPS's law
enforcement authority expanded under the Homeland Security Act, it
defers to DHS on the extent of FPS's authority to protect other federal
properties and personnel.
Extent of FPS's Authority for Facility Protection--DHS commented that
our description of its responsibility for protecting buildings,
grounds, and property suggests limitations that are not present in the
law. In this regard, for example, DHS takes issue with our statement
that under the Homeland Security Act DHS is responsible for protecting
building, grounds, and property "that are under GSA's jurisdiction."
DHS states that "the Homeland Security Act does not mention property
controlled by [GSA]." In making this statement--as well as others cited
by DHS--the report summarizes and synthesizes the relevant statutory
requirements, rather than quoting them verbatim. Thus, while it is true
that the particular provision vesting DHS with protective
responsibilities does not mention GSA-controlled property, DHS clearly
acquired responsibility for GSA-controlled property under the Homeland
Security Act because FPS, which was responsible for protecting federal
agencies and previously under GSA's jurisdiction, was among those
agencies whose functions and personnel were transferred to DHS under
the Homeland Security Act. Nonetheless, on the basis of DHS's comments,
we have made technical clarifications to our descriptions of the law,
where appropriate.
In addition to raising technical issues, DHS makes several statements
that, although not entirely clear, could be read as suggesting that DHS
might be taking a broader view of its authority relating to the
protection of federal buildings and grounds than our analysis of the
statute would support. The relevant statutory provision is 40 U.S.C.
1315(a), as amended by section 1706(b)(1) of the Homeland Security Act,
which provides that: "To the extent provided for by transfers made
pursuant to the Homeland Security Act of 2002, the Secretary of
Homeland Security—shall protect the buildings, grounds, and property
that are owned, occupied, or secured by the Federal Government
(including any agency, instrumentality, or wholly owned or mixed-
ownership corporation thereof) and the persons on the property"
[emphasis added]. DHS states that the description of the facilities
under DHS control in the latter part of the statute is "all inclusive"
and that the "intent of the law is far more inclusive than GSA property
and property transferred as part of the establishment of DHS, none of
which are instrumentalities nor mixed ownership corporations." To the
extent that DHS is maintaining that its authority extends beyond
property under the control and custody of GSA and DHS, we disagree with
its interpretation. The statute provides DHS with authority over
buildings and property only to "the extent provided by transfers made
pursuant to the Homeland Security Act," and thus DHS authority is
limited to properties under the control of GSA (through the transfer of
FPS to DHS) and any other agency whose functions were transferred to
DHS under the act.
Security Fees--DHS said that it believes that our explanation for how
FPS is funded requires clarification because the report did not
distinguish between the two components of FPS security fees. According
to DHS, FPS was traditionally funded through rent portions devoted to
recovering security costs collected by GSA for space occupied by GSA
tenants. These "security fees" consisted of two separate components.
The basic security charge covered security services provided by FPS to
all GSA tenants and includes such services as patrol and response,
security surveys, alarm monitoring, salaries, and other common cost
items. This fee was charged to all GSA tenants and was included in each
tenant's rent bill as a part of the rate per square foot. The building-
specific security charge is for security measures specific to a
particular building based on the designated security level that were
specified by the Department of Justice in June 1995 in response to the
Oklahoma City bombing. For example, a Level IV building may have more
guards, magnetometers, and cameras than a Level I building. The charges
for building-specific security services are allocated by GSA to tenants
based on the number of square feet they occupy in the building. DHS
commented that our draft report did not clarify that security fees for
specific agencies vary depending upon the building and its unique
security requirements. DHS also noted that FPS uses a reimbursable
program to charge for security services that are in excess of what FPS
determines is sufficient for a building or could not be deferred for
inclusion in the next rent estimate cycle. DHS said that understanding
how FPS security fees are charged is important in understanding the
issues associated with how FPS security fees should be billed in the
future. Finally, DHS added that understanding the elements of the
security fee process is essential to understanding why DHS and GSA
disagree as to how security fees should be billed in the future. On the
basis of DHS's comments, we clarified the information in the report
related to the different components of security fees.
Funding for Activities Not Related to Facility Protection--Although DHS
concurred with our recommendation to ensure that funds collected from
agency rents and fees are used solely for facility protection, DHS
again expressed its view that such activities would not have to be
reimbursed if they are of limited duration with local offices, ad hoc,
and do not increase the direct costs of FPS operations and investment
in staff. DHS said it proposes to issue guidance to this effect. DHS
cited Comptroller General legal decisions as a rationale for this
position. DHS also said that some activities that do not appear to
relate to facility protection actually do because of the proximity of
nearby federal buildings. For example, DHS said that FPS's involvement
in the free trade protests in Miami was critical to protecting the
facilities of agencies that were the focal point of the demonstration.
We recognize that there may be situations, such as the Miami protests,
where FPS may engage in activities that are necessary or incidental to
protecting federal buildings. Furthermore, DHS said that FPS
headquarters reviews and approves all FPS regional special operation
plans and expenditures to ensure the appropriate use of funds. DHS also
stated that in response to our report, ICE would develop guidance for
determining when it is reasonable for FPS to provide security services
that are not directly related to the protection of federal buildings
and grounds.
We do not believe that the development of such guidance would be
appropriate. The language in section 422(b)(2) of the Homeland Security
Act of 2002 explicitly restricts the use of funds collected by GSA from
its tenants out of rents and fees "solely" for the protection of
government buildings and grounds.[Footnote 25] Because of this
limitation in the statute, the use of these funds for any purpose other
than the protection of government buildings and grounds would not be
permitted absent reimbursement pursuant to other applicable statutory
authority. DHS refers to two GAO decisions as supporting its proposal
to issue guidance approving the use of funds for unrelated purposes if
such activities "are of limited duration with local offices, ad hoc,
and do not increase the direct costs of FPS operations and investment
in staff."[Footnote 26] We do not agree that these two decisions
support guidance sanctioning the de minimis use of FPS funds for
explicitly prohibited purposes. The two decisions, in allowing
nonreimbursable details in certain circumstances, adopted guidance in
the Federal Personnel Manual, which has been rescinded and is no longer
effective. Moreover, to the extent that the two decisions are read by
DHS as setting a de minimis standard of general applicability, they are
not in keeping with the governing law on the de minimis concept. The
legal concept of de minimis typically goes to measure the amount
associated with a legal violation, allowing trivial or inconsequential
amounts to be overlooked, on a case-by-case basis. The concept has not
been applied to, nor would the case law support, the prospective
approval of activities across an organization like FPS, knowing that
they constitute violations of law.
Accordingly, we would object to DHS establishing guidance for
prospective situations that would sanction FPS's use of funds for de
minimis expenditures that are not incidental or necessary to the
protection of federal buildings and grounds. Our full legal analysis of
this issue is contained in appendix IV.
The Need For a Transformation Strategy--DHS concurred with our
recommendation that FPS develop a transformation strategy because of
its expanding mission and responsibilities, as well as the other
challenges it is facing. DHS said that in March 2004, FPS began
developing its own strategic plan, which DHS said would support the
overall goals and objectives of the DHS strategic plan and would be
consistent with GAO's key practices for organizational mergers and
transformations. At the time of our review, FPS's strategic plan had
not been issued. Although a strategic plan is an important part of
FPS's transformation, a transformation strategy would contain
information beyond what would be found in a typical strategic plan.
More specifically, a transformation strategy would provide a connection
between long-term strategic goals in its strategic plan and the day-to-
day activities of managers and employees engaged in achieving
integration of FPS into DHS.[Footnote 27] Such a transformation
strategy would include overall goals of the transformation with
specific action plans and milestones that would allow it to track
transformation and integration goals identifying critical phases and
essential activities that need to be completed by and on any given
date.[Footnote 28] By demonstrating progress towards reaching these
interim goals, FPS can build momentum and demonstrate that real
progress is being made toward full integration into DHS.
In developing its transformation strategy, it is important that FPS
also consider all the key practices we have identified for effective
mergers and transformations. This would include incorporating a
communications approach that reaches out to employees, customers, and
stakeholders and seeks to genuinely engage them in the transformation
process, as well involving them in various aspects of the
transformation to help gain ownership of the transformation. For
example, in our July 2003 report on mergers and organizational
transformations, we stated that according to a JPMorgan Chase managing
director, the chief executive officer and merger implementation team
publicized and reported progress on specific goals for each phase of
its merger to help rally employees and maintain their drive towards
reaching full integration. These goals were connected to overall themes
and particular milestones, and the JPMorgan Chase chief executive
officer reinforced these goals at leadership meetings and employee
townhalls and in Web-based messages and other communications.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution of it until 30
days from the date of this report. We will then send copies to other
interested congressional committees, the Secretary of Homeland
Security, DHS's Under Secretary for Border and Transportation Security,
DHS's Assistant Secretary for Immigration and Customs Enforcement, the
Administrator of GSA, and the Director of OMB. Copies will also be
available to other interested parties on request. In addition, the
report will be available at no charge on the GAO Web site at
[Hyperlink, http://www.gao.gov].
If you have any questions regarding this report, please contact me on
(202) 512-2834 or at [Hyperlink, goldsteinm@gao.gov], or David
Sausville, Assistant Director, on (202) 512-5403 or at [Hyperlink,
sausvilled@gao.gov]. Other contributors to this report were Kelly
Blado, Casey Brown, Matt Cail, Anne Izod, and Susan Michal-Smith.
Sincerely yours,
Signed by:
Mark L. Goldstein:
Director, Physical Infrastructure Issues:
[End of section]
Appendixes:
Appendix I: Scope and Methodology:
To determine what challenges, if any, the Federal Protective Service
(FPS) has faced since it was taken out of the General Services
Administration (GSA) and transferred to the Department of Homeland
Security (DHS), we collected and analyzed agency documents about the
transfer. This included policies and procedures, information about the
organizational structure, and information on other issues related to
the transfer, such as funding. We also interviewed agency officials
from DHS, FPS, and GSA headquarters who were responsible for and
directly affected by the transfer. After identifying the challenges FPS
was experiencing, we collected documents and spoke to DHS and GSA
agency officials about each challenge. To better understand FPS's
responsibilities and mission, we reviewed relevant laws and documents
and interviewed DHS and GSA agency officials. Specifically, we reviewed
the laws relating to FPS's authority both before and after the transfer
to DHS and analyzed the Homeland Security Act of 2002 to determine if
FPS has gained any new legal authority under the act. We also reviewed
the operational memorandums of agreement between DHS and GSA (for
fiscal years 2003 and 2004) and other information, which we verified,
on FPS's new Web site. We met with GSA officials to discuss the types
of services FPS provided for GSA before and after its transfer to DHS.
We interviewed DHS headquarters officials about the types of security
and protection activities FPS has been performing since the transfer
and their vision for the agency as part of DHS. Lastly, we spoke with
ICE officials to obtain an understanding of how they envision the role
of FPS within their organization.
With regard to funding issues, we analyzed agency budget documents and
interviewed DHS and GSA budget officials. Specifically, to identify how
the agency would be funded in fiscal years 2004 and 2005, we reviewed
the Homeland Security Act, the 2004 GSA and DHS appropriations acts,
and the President's budget for fiscal year 2005 to determine funding
FPS has received and amounts requested. We corroborated funding data
with data from FPS and GSA, as well as OMB data provided for a related
GAO engagement. Lastly, we spoke with GSA and DHS budget officials
about how the agency was funded during the transition (fiscal years
2003 and 2004), how the agency would be funded in the upcoming fiscal
year (fiscal year 2005), and any alternate funding proposals for future
fiscal years, including fiscal year 2006 and beyond. To better
understand FPS mission-support issues, we reviewed the operational and
mission-support memorandums of agreement between DHS and GSA (for
fiscal years 2003 and 2004) to determine what FPS mission-support
systems would transfer to DHS. We interviewed DHS and FPS mission-
support officials in charge of managing all aspects of the transfer,
including the transfer of FPS mission-support functions from GSA to
DHS.
We considered prior GAO work on major management challenges and program
risks of the DHS and challenges facing other DHS components, such as
the Immigration and Naturalization Service, the Federal Air Marshal
Service, and the U.S. Coast Guard. We considered prior GAO work on key
practices used by public and private organizations that have undergone
successful mergers and transformations. We did not do an in-depth
analysis comparing these practices with FPS's transformation efforts.
However, we held discussions with FPS officials to obtain their views
on whether they were applicable to FPS.
DHS, FPS, and GSA provided much of the data and other information used
in this report. We noted cases where these officials provided
testimonial evidence, and we were not always able to obtain
documentation that would substantiate the testimonial evidence they
provided. In cases where officials provided their views and opinions on
various issues within the context that they were speaking for the
organization, we corroborated the information with other officials. We
assessed the reliability of the funding data by (1) performing limited
electronic testing of the data elements; (2) corroborating the data
with FPS, GSA, and information obtained from OMB for another GAO
review; (3) interviewing knowledgeable agency budget officials; and (4)
comparing the data with other published data, such as the fiscal year
2004 GSA and DHS appropriations acts. Overall, we found no
discrepancies with these data and therefore determined that they were
sufficiently reliable for the purpose of this report.
[End of section]
Appendix II: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
May 3, 2004:
Mark L. Goldstein:
Director, Physical Infrastructure Issues:
United States General Accounting Office:
441 G Street, NW:
Washington, D.C. 20548:
Dear Mr. Goldstein:
We have reviewed the GAO Draft Report, Homeland Security:
Transformation Strategy Needed to Address Challenges Facing the Federal
Protective Service, GAO-04-537, (5430283), and generally concur in the
overall findings. However, we believe there are instances in the
narrative that require clarification. We have discussed these below.
Attached please find technical comments intended to improve the
accuracy of the report. With respect to the three recommendations, we
agree subject to the comments provided and especially invite your
attention to our comments on your second recommendation. Our response
follows.
Expanding Responsibilities Pose a Challenge for FPS. The report states:
"Under the Homeland Security Act, DHS became responsible for protecting
buildings, grounds, and property owned, occupied, or secured by the
federal government that are under GSA's jurisdiction." [emphasis added]
The Homeland Security Act does not mention property controlled by the
General Service Administration (GSA.) On this issue the report
continues with "the Homeland Security Act also provides FPS with the
authority to protect buildings, grounds, and property of other agencies
whose functions were transferred to DHS." We believe this statement
requires correction in that the law contains no such language. Further,
this statement implies an explicit limitation on the scope of
Department of Homeland Security (DHS) authority for the protection of
federal property. While the Section 1315 (a) does begin with the phrase
"To the extent provided for by transfers made pursuant to the Homeland
Security Act of 2002," there is no limitation as to GSA property. There
is also no limitation on non-GSA property that was under the custody
and control of those agencies transferred to DHS, as the report
implies. We are of the opinion the law is all inclusive based on the
language in Section 1315 (a) wherein it states after the words "owned,
occupied, or secured by the Federal Government" the following:
"including any agency, instrumentality, or wholly owned or mixed-
ownership corporation thereof...." This clearly reflects the intent of
the law that is far more inclusive than GSA property and property
transferred as part of the establishment of DHS, none of which are
instrumentalities nor mixed ownership corporations.
The comments on page 8 of the draft report which are attributed to the
Director of FPS - "FPS might seek to include protection for facilities
where GSA had previously delegated authority to tenant agencies, as
well as other facilities where agencies have protective forces with
similar missions"-appear to be taken out of context. The comments were
intended to simply reflect previous guidance from the House Committee
on Transportation and Infrastructure, Subcommittee on Economic
Development, Public Buildings and Emergency Management. In two letters
to the Administrator of the General Services Administration (GSA) on
January 29, 2002, and then again on March 4, 2003, the Committee
members expressed their concern about further GSA delegations of FPS
related authority to other agencies without analysis by the Committee
in advance. Specifically, the March 4, 2003 letter to Administrator Per
y from Congressmen LaTourette and Congresswoman Norton stated "Until
the DHS establishes a comprehensive national program, and the operating
and oversight systems to support this program, we continue to believe
that it is in the best interest of not only GSA but also the FPS to
suspend activities to delegate any authority to protect public
buildings." The letter also made reference to the January 2002 letter
indicating that "we requested that you postpone any delegation of such
[law enforcement] authority until such time that the subcommittee has
had an opportunity to analyze the impact of such a delegation on the
FPS..." It is these statements and subsequent conversations with
committee staff that were the genesis for the Director's comments. The
information conveyed was intended to reflect the rethinking of several
approaches, such as delegations of law enforcement authority,
reconsidered in the post 9/11 environment and in many cases later
reflected in the creation of the Department of Homeland Security.
We believe that the interpretation of the language in the Homeland
Security Act on protection of federal property should be broad rather
than narrow. The report does mention DHS' position that the mission of
the Federal Protective Service (FPS) is to protect buildings and
grounds owned or occupied by the Federal Government and the persons on
the property. Clearly, as with any Department or agency, if security
effectiveness and efficiencies can be realized by exercising existing
authorities or pursing additional authorities, the Department will take
appropriate action to achieve those enhancements.
Issues Related to How FPS is Funded: We believe the sections relating
to how FPS is funded require clarification, particularly as they relate
to charging security fees in the future. Preliminarily, a clear
understanding of how GSA funded FPS is necessary. FPS was traditionally
funded through those portions of the rents devoted to recovering
security costs collected by GSA for space occupied by GSA tenant
agencies. Those "security fees" consisted of essentially two separate
charges. The first was a charge for the "Basic Services." This rate was
the same for all agencies regardless of space occupied or location. It
covered the services provided by FPS to all GSA tenants and included
such things as patrol and response, security surveys, alarm monitoring,
salaries, and other common cost items. This charge was included in each
rent bill as part of the rate per square foot and adjusted annually.
The second charge was a "Building Specific" charge. This charge
reflected FPS' cost recovery of security measures that were specific to
a particular building. For example, Level IV security buildings have
many more guards, more magnetometers, cameras, etc., than Level I
buildings, which include small federal offices in shopping centers. The
charges for these Building Specific expenses were allocated by GSA to
the tenant agencies based on their pro rata share of the square feet
occupied in the respective building. This is especially important in
understanding the issues associated with who performs the billing
function in the future as discussed below. As a result, security fees
for specific agencies varied depending upon the building and its unique
security requirements. All tenants share Building Specific expenses.
The draft report did not distinguish between these two types of
charges.
In addition to these two charges, a third vehicle for payment of
security services was the reimbursable program. The reimbursable
program funds those expenses incurred by agencies for security services
that are either in excess of what FPS determined sufficient, or could
not be deferred for inclusion in the next rent estimate cycle. For
example, many of the guards that are currently provided are paid for
through the reimbursable program.
Understanding these elements of the security fee process is essential
to understanding why DHS and GSA disagree as to how security fees
should be billed in the future. Additionally DHS and GSA continue to
pursue resolution of questions of who has the authority to bill for the
provision of FPS services through existing processes. The report
identified $139 million gap in fund collections compared to the
provision of FPS services provided in FY 2003. For FY 2005, the
President's Budget Request includes a rate adjustment that covers FPS'
projected expenses.
Successfully Transferring FPS Mission-Support Functions to DHS Will Be
Challenging: We agree that the transfer of mission support functions
always presents certain challenges. However, the contracting function
does not pose a challenge and was sufficiently accommodated in the
transfer. Contracting at FPS has already transitioned to, and is
operating under the auspices of, the Immigration and Customs
Enforcement (ICE) Procurement Program within DHS, including the review
and issuance of DHS Contracting Warrants. The FPS has a senior
Contracting Specialist at Headquarters that oversees policies and
standards for the contract guard program. Contracts continue to be
awarded and administered by 24 FPS Contracting Officers located in the
1 I FPS Regions. Additional contracting support is available from the
ICE Procurement Program and the Department at large, should the need
arise. With respect to concerns raised in the report on travel
services, ICE has implemented an electronic travel system to move to a
more efficient travel authorization and vouchering process.
Recommendation 1: The Secretary of Homeland Security should direct the
Director of FPS - in consultation with the Under Secretary for Border
and Transportation Security and the Assistant Secretary for Immigration
and Customs Enforcement - to develop and implement a transformation
strategy that reflects FPS's consideration of key practices and
addresses the significant challenges it is facing. In particular, this
strategy should identify implementation goals, measures, and a timeline
that FPS could use to show progress toward its transformation and
demonstrate that it is accomplishing its mission while undergoing
changes. It should also link FPS's goals and measures to the broader
goals and objectives contained in DHS's strategic plan.
RESPONSE: Concur. As noted in the draft report, DHS, issued its
strategic plan in February of 2004. The Director of FPS convened a
national management conference the week of March 1, 2004, to finalize
FPS' draft long-range strategic plan. Consultants from the IBM
Corporation, who participated in the development of the DHS Strategic
Plan, assisted in that effort and were especially attentive to ensuring
FPS alignment with the Department's Strategic Plan. FPS presented its
plan to ICE management and it is in the process of being reviewed and
vetted through ICE management officials. It is anticipated that the FY
2006 budget request will be based on this plan. The FPS strategic plan
will support the overall goals and objectives of the DHS plan and it
will be consistent with the key practices discussed in the draft report
so as to ensure effective implementation.
Recommendation 2: The Secretary of Homeland Security take immediate
steps to ensure that funds collected from agency rents and fees are
used solely for the protection of buildings and grounds owned or
occupied by the federal government. If FPS continues its involvement in
activities not directly related to facility protection, a funding
process would be needed that would be consistent with the requirement
regarding the use of funds from agency rents and fees.
RESPONSE: Concur. The FPS policies and procedures, established while
the FPS was a Program of the GSA, require that the funding transferred
from the Administrator of GSA from rents and fees be used to for the
protection of buildings or grounds owned or occupied by the Federal
Government. Where FPS security services are required but have not been
accounted for in the rent or fees collected by the Administrator of
GSA, the individual agencies must reimburse the FPS for the cost of the
service. The FPS has a program and policies, and extensive experience
in processing and managing reimbursable services. The FPS provides
additional security services to Federal agencies on a direct
reimbursable basis totaling approximately $300 million annually. The
policies and procedures of the FPS require that requests for support or
services not related to the protection of Federal buildings and grounds
must be accompanied by a reimbursement for those services.
However, we must point out that some of the programs questioned by GAO
in the body of the report are directly related to the protection of
Federal facilities. The protection of Federal buildings during
political demonstrations is a primary duty of the FPS. The FPS response
to the Free Trade protests in Miami was critical to protecting the
complex of Federal buildings housing the agencies that were the focal
point of the demonstrations. Likewise, deploying FPS officers and
assets to cities where major political and national events are
scheduled focuses primarily on increased protection for Federal
buildings and grounds adjacent to or in the vicinity of activities
attracting large numbers of participants. All regional special
operation plans (major demonstrations and national events) are reviewed
and approved at FPS Headquarters. Funding is allocated and expenditures
are reviewed by the Headquarters Financial Management staff to ensure
the appropriate use of the funds.
ICE will develop guidance for determining when the provision of service
is reasonable, customary and de minimis with respect to assistance
provided by FPS that are not generally directly related to the
protection of Federal building and grounds. We believe that findings of
the Comptroller General support the provision of this service provided
support to these activities that are of limited duration with local
offices, ad hoc and do not increase the direct costs of FPS operations
and investment in staff.
Recommendation 3. The Secretary of Homeland Security ensure that DHS is
well equipped to assume FPS mission-support functions before these
functions are transferred from GSA, even if it is necessary to extend
the September 2004 goal for the transfer.
RESPONSE: Concur. FPS shares the concern regarding the transfer of
mission support functions from GSA to DHS. FPS procedures governing
everything from finance, travel, time and attendance, information
technology applications, human resource procedures and processes, and
payroll are electronically linked and interdependent via GSA's advanced
systems. The transfer of those functions will require new systems, new
processes, and new training for FPS employees. It will be a challenging
task. FPS and DHS officials are working daily to ensure the transfer is
as efficient and as trouble free as possible. We are confident the
transfer can be accomplished by the target goal of October 1, 2004. We
are equally confident that should DHS determine that reaching that goal
might jeopardize FPS' mission, it will negotiate an extension with GSA
to do so.
Signed by:
David Nicholson:
Director of Resources:
Border and Transportation Security:
Department of Homeland Security:
Enclosure:
[End of section]
Appendix III: Comments from the General Services Administration:
GSA Public Buildings Service:
April 29, 2004:
Mark L. Goldstein:
Director, Physical Infrastructure Issues:
U.S. General Accounting Office:
Washington, DC:
Dear Mr. Goldstein:
The General Services Administration (GSA) appreciates this opportunity
to submit agency comments on the U.S. General Accounting Office (GAO)
"Draft Report to the Chairman, Committee on Government Reform, U.S.
House of Representatives, Homeland Security, Transformation Strategy
Needed to Address Challenges Facing the Federal Protective Service,"
GAO-04-537 (Draft Report). While we know that the Draft Report pertains
to the Department of Homeland Security's (DHS) Federal Protective
Service (FPS) and that DHS will undoubtedly be submitting its own
agency views, GSA felt it necessary to address or clarify certain
issues raised in the Draft Report in this separate submission. We
address the challenges GAO set out in the beginning of the Draft
Report:
Expanding mission and increased responsibility. We have no objections
to GAO's findings regarding the expanding mission of the FPS and defer
to DHS on its authorities to expand the mission of the FPS. We agree
with the Draft Report that under the Department of Homeland Security
Act of 2002, as amended, (the Act) the FPS authorities to protect
Federal properties include properties under the custody and control of
GSA as well as those under the custody and control of DHS. While the
enclosed legal memorandum from GSA's Office of General Counsel notes
that section 1706 of the Act did expand the law enforcement authorities
of the FPS under 40 U.S.C. § 1315, to what extent the FPS has
authorities to protect other Federal properties and personnel, we defer
to DHS.
Unresolved issues related to funding. The enclosed legal memorandum
also addresses most of these issues. However, it does not address the
restriction in Section 422(b)(2) of the Act regarding the use of funds
transferred by the Administrator to the Secretary of Homeland Security
from rents and fees collected by the Administrator. We consider any
implication that GSA is responsible for billing and collecting fees
owed to DHS for FPS furnished services, and that FPS does not have the
authority to bill for their services, to be incorrect. As a matter of
government efficiency, and in the interest of not creating unnecessary
duplicative systems, GSA could agree to continue to use its systems to
produce and distribute a bill on behalf of FPS. While GSA is authorized
to provide its billing services to FPS on a reimbursable basis, this
does not mean that DHS's billing responsibilities for FPS-provided
services belong to GSA.
As for Section 422(b)(2), we note that to the extent that FPS is funded
through fees collected by the Administrator, those fees must be used to
protect Federal buildings and grounds and not for other purposes. This
could definitely impact the ability of FPS to take on expanded roles
unrelated to the protection of Federal property unless funded through
direct appropriations or other DHS sources. As FPS' mission expands, it
is important that the rates charged to GSA and the tenants of GSA
facilities reflect costs attributable to protecting the GSA-controlled
property. Costs associated with the expanded mission, including the
costs associated with the increased overhead at the FPS, Bureau,
Directorate and DHS headquarters levels, should not be charged to GSA
customers.
On pages 16 and 17 of the Draft Report, there is a discussion regarding
the historical gap between the cost of security and tenant payments
that were directly attributable to security. Although the gap existed
in prior years, by FY 2005, based on the President's Budget, the gap
has been closed. Beginning in FY 2004, the President's budget allowed
for $28 million to be funded by a direct appropriation to DHS instead
of through offsetting collections. Additionally, the FY 2004
President's budget reflected an increase in the security rate that
narrowed the shortfall. The FY 2005 President's Budget reflects a
security rate that closed the funding gap. Beginning in FY 2005, FPS is
allowed to charge a security rate to GSA tenants that should fully fund
FPS for services provided to GSA tenants. We take issue with the
implication on page 17 that GSA is available to cover FPS shortfalls,
and specifically the statement: "Addressing this historical gap between
the cost of security and tenant payments represents another challenge
that would need to be addressed if the mechanism for funding FPS were
restructured, particularly if GSA were to no longer cover the shortfall
with other funds." (Draft Report, p. 17, emphasis added). The funding
gap associated with protecting GSA facilities has been addressed in the
FY 2005 President's Budget. GSA has transferred all of the budget
authority and funds associated with FPS and GSA has not requested any
additional authority associated with the transferred functions.
Therefore, if FPS were to expand their mission, it would seem
appropriate for DHS to look for either a direct appropriation or other
DHS funding sources, and it would not be appropriate, nor do we think
legally permissible, to look to GSA to fund any future shortfalls.
Transfer of mission-support functions to DHS. Beginning on page 19,
there is a discussion of FPS mission support functions transferred to
FPS. In March, 2003, GSA transferred to FPS 21 FTE that were directly
related to procurement (contracting) functions and an additional 8 FTE
related to the budget functions. GSA is not providing the contracting
functions as implied in the GAO report - those responsibilities have
been transferred to DHS as required by the Act. The only FTE that are
temporarily remaining with GSA (per a Memorandum of Agreement between
DHS and GSA regarding Support Services for FPS and FedCirc (Support
Services MOU)) are 15 FTE providing payroll, accounting, HR, and other
services associated with GSA's Working Capital Fund that FPS has asked
GSA to provide on a reimbursable basis through FY 2004. Once those
functions are transferred to DHS, the 15 FTE will be transferred to
DHS. The statement on page 20 of the Draft Report: "After FPS's
transfer to DHS, GSA retained the contracting staff responsible for
FPS as part of the memorandum of agreement to provide mission support"
is incorrect and potentially misleading. All FTE associated with the
contracting function were transferred immediately. Furthermore, our
Support Services MOU contemplates the continued availability of
contracts for security guard services on GSA's Federal Supply Service's
Schedules contracts.
Finally, on page 21 of the Draft Report, there is a statement that
"there has been confusion about whether FPS should adhere to GSA or DHS
administrative policies and procedures, as well as where they should go
for assistance or to get approval for administrative issues." Although
that statement may have been true in October 2003, as the example
illustrated, the GSA/DHS Support Services MOU, signed in January 2004,
resolved those issues.
Thanks you for this opportunity to address the issues raised in the
Draft Report. Should you have any questions concerning this letter,
please contact David Morris on (202) 501-4159.
Sincerely,
Signed by:
Paul Chistolini:
Deputy Commissioner:
Public Buildings Service:
Enclosure: OGC Legal Opinion:
[End of letter]
GSA Office of General Counsel:
April 22, 2004:
MEMORANDUM FOR:
PAUL CHISTOLINI:
DEPUTY COMMISSIONER:
PUBLIC BUILDINGS SERVICE (P):
THRU:
Signed by:
SAMUEL J. MORRIS, III:
ASSOCIATE GENERAL COUNSEL:
REAL PROPERTY DIVISION (LR):
FROM:
Signed by:
HARMON R. EGGERS:
DEPUTY ASSOCIATE GENERAL COUNSEL:
REAL PROPERTY DIVISION (LR):
Signed by:
MICHAEL J. WOOTTE:
SENIOR ASSISTANT GENERAL COUNSEL:
REAL PROPERTY DIVISION (LR):
SUBJECT: Authority of the General Services Administration (GSA) and the
Department of Homeland Security (DHS) to Charge and Collect for
Protection, Law Enforcement and Related Security Services:
QUESTIONS PRESENTED:
In response to a recent GAO Draft Audit Report,[NOTE 1] you asked for
the Office of General Counsel's opinion on three related questions:
1) Does GSA have authority to charge and collect from other Federal
agencies for the law enforcement and related security services provided
by DHS's Federal Protective Service (FPS)?
2) Does DHS have the authority to charge other Federal agencies for the
law enforcement or related security services provided by FPS?
3) Under what conditions and authorities could GSA charge and collect
from other Federal agencies for such FPS services?
ANSWERS:
As explained below:
1) GSA lacks the independent authority to bill and collect from other
Federal agencies for the law enforcement or related security services
provided by FPS.
2) Although the Homeland Security Act does not directly address this
function, we believe that an argument can be made that DHS has the
authority to charge (i.e., bill) and collect from other Federal
agencies for the law enforcement or related security services provided
by FPS.
3) GSA could agree to provide the billing and collection services on a
reimbursable basis to DHS, using DHS's own authority to bill and
collect for services provided by FPS. However, if DHS concludes that it
lacks such authority, GSA cannot do for DHS that which DHS lacks
authority to do for itself.
I. GSA Authority to Charge for Space and Services:
GSA's authority to charge for furnishing space and services to federal
agencies is set forth in 40 U.S.C. § 586, which provides in pertinent
part:
§ 586. Charges for space and services:
(a) Definition. In this section, "space and services" means space,
services, quarters, maintenance, repair, and other facilities.
(b) Charges by Administrator of General Services.
(1) In general. The Administrator of General Services shall impose a
charge for furnishing space and services.
(2) Rates. The Administrator shall, from time to time, determine the
rates to be charged for furnishing space and services and shall
prescribe regulations providing for the rates. The rates shall
approximate commercial charges for comparable space and services....
40 U.S.C. § 586 (emphasis added). Charges imposed by GSA under 40
U.S.C. § 586(b) for furnishing space and services are required by law
to be deposited into the Federal Buildings Fund (FBF). 40 U.S.C. §
592(b)(1). Deposits into the FBF are available for GSA's real property
management and related activities in the amounts specified in annual
appropriation laws without regard to fiscal year limitations. 40 U.S.C.
§ 592(c)(1).
In accordance with 40 U.S.C. § 586, GSA is required to charge agencies
occupying GSA-controlled space for "space and services" furnished by
GSA. This provision does not authorize GSA to charge agencies for
services furnished to GSA's tenant agencies by agencies other than GSA.
Therefore, GSA is not authorized by law to charge agencies for the
protection services (including law enforcement and related security
services) furnished by FPS because 40 U.S.C. § 586 only authorizes GSA
to impose charges for services furnished by GSA.
GSA disagrees with the interpretation offered by a DHS official that
the Homeland Security Act of 2002 (hereinafter, "the Act"), and
specifically, section 422 of the Act, 6 U.S.C. § 232, requires that GSA
must continue to be responsible for collecting all fees for protection
services, regardless of whether the services are furnished by DHS or
GSA. As we will explain more fully, the Act clearly transfers from GSA
to DHS certain (but not all) GSA authorities for the protection of
buildings under the custody and control of GSA. The protection
functions transferred were all of the FPS functions, including law
enforcement and related security, along with the necessary GSA
functions related to FPS. Section 422 of the Act sets forth what was
retained by GSA and not transferred to DHS. Section 422 provides as
follows:
§ 422. Functions of Administrator of General Services:
(a) Operation, maintenance, and protection of Federal buildings and
grounds. Nothing in this Act may be construed to affect the functions
or authorities of the Administrator of General Services with respect to
the operation, maintenance, and protection of buildings and grounds
owned or occupied by the Federal Government and under the jurisdiction,
custody, or control of the Administrator. Except for the law
enforcement and related security functions transferred under section
403(3) [6 U.S.C. § 203(3)] the Administrator shall retain all powers,
functions, and authorities vested in the Administrator under chapter 10
of title 40, United States Code [40 U.S.C. §§ 501 et seq.], and other
provisions of law that are necessary for the operation, maintenance,
and protection of such buildings and grounds.
(b) Collection of rents and fees; Federal Buildings Fund.
(1) Statutory construction. Nothing in this Act may be construed--:
(A) to direct the transfer of, or affect, the authority of the
Administrator of General Services to collect rents and fees, including
fees collected for protective services; or:
(B) to authorize the Secretary or any other official in the Department
to obligate amounts in the Federal Buildings Fund established by
section 490(f) of title 40, United States Code [40 U.S.C. § 592].
(2) Use of transferred amounts. Any amounts transferred by the
Administrator of General Services to the Secretary out of rents and
fees collected by the Administrator shall be used by the Secretary
solely for the protection of buildings or grounds owned or occupied by
the Federal Government.
6 U.S.C. § 232 (emphasis added). Further, section 403 of the Act, 6
U.S.C. § 203, transferred the FPS of GSA (which handled law enforcement
and related security functions of GSA), along with the functions of the
Administrator of General Services relating thereto, to DHS. Section
1706 of the Act amended 40 U.S.C. § 1315, expanding the law enforcement
authority of FPS, and providing that DHS became responsible for
protecting buildings, grounds, and property owned, occupied, or secured
by the Federal Government that are under GSA's jurisdiction, in
addition to the properties of other agencies transferred to DHS
pursuant to the Act.
It is clear from Section 422 of the Act, 6 U.S.C. § 232, that except
for the law enforcement and related security functions transferred to
DHS by the Act, GSA retains all powers, functions, and authorities
vested in the Administrator by law for the operation, maintenance, and
protection of GSA-controlled buildings and grounds. GSA is authorized
by numerous interrelated provisions of law to operate, maintain, and
protect GSA-controlled federal buildings and, at the request of a
federal agency, other buildings owned by the Federal Government and
occupied by the agency making the request. [NOTE 2]
Therefore, the Act created some overlap in the protection authorities
of GSA and DHS. Both DHS and GSA have responsibilities for protecting
GSA-controlled buildings and grounds. However, as to GSA-controlled
buildings, DHS is responsible for protection that pertains to law
enforcement and related security functions. FPS functions are akin to
those of any law enforcement agency. FPS enforces laws, building rules
and regulations; investigates and protects against crime; and provides
other police-type services.
On the other hand, GSA also is responsible for the protection of GSA-
controlled buildings and grounds, excluding the DHS law enforcement and
related security functions. GSA's remaining protection functions are
akin to those of any property owner to provide for the care and
safekeeping of their property and the safety of persons on the
property. This may include installing fencing, lighting, and locks on
doors, or controlling access into and out of a building. It can also
include hiring and deploying contract guards, which are provided by
many commercial building owners. However, through GSA's Memorandum of
Agreement (MOA) with DHS, effective as of March 1, 2003, GSA and DHS
have determined that having DHS provide for security guards is a more
effective way of coordinating that protection function with FPS's law
enforcement functions because it provides a more seamless approach to
the law enforcement response through a single chain of command.
Pursuant to the MOA, GSA will continue to make guard contracts
available through the Federal Supply Schedule for use by FPS.
Furthermore, GSA is not authorized to bill and collect for FPS's law
enforcement services because all of GSA's functions relating to FPS,
including GSA's preexisting authority to charge for the law enforcement
and related security services provided by FPS, were transferred by
sections 403(3) and 1706 of the Act to DHS.
In summary, GSA is authorized by 40 U.S.C. § 586 to impose charges for
space and services (including protection services) furnished by GSA,
not protection services (including law enforcement and related security
services) furnished by DHS. The provisions of Section 422(b) of the
Act, when read in conjunction with 40 U.S.C. § 586, simply preserve the
authority of GSA to collect rents and fees (including fees collected
for protection services) provided that the space and services are
furnished by GSA. Section 422(b) does not make GSA responsible for
charging for protection services furnished by DHS.
II. DHS Authority to Charge for Protection Services:
DHS arguably has authority to bill and collect fees for the protection,
law enforcement and related security services provided by DHS through
FPS to other Federal agencies under two separate authorities: A. 40
U.S.C. § 586(c) as to protection services other than strictly law
enforcement services; and B. the aforementioned Transfer Provisions of
the Act as to all DHS protection services including law enforcement.
A. 40 U.S.C. Section 586(c). Subject to approval by GSA and the Office
of Management and Budget (OMB), 40 U.S.C. § 586(c) provides authority
for DHS to impose a charge for certain protection services currently
furnished by FPS to agencies occupying GSA-controlled space and to
credit the amounts received to the DHS appropriation or fund initially
charged for providing the services.
Section 586(c) provides:
(c) Charges by executive agencies.
(1) In general. An executive agency, other than the Administration
[GSA], may impose a charge for furnishing space and services at rates
approved by the Administrator.
(2) Crediting amounts received. An amount an executive agency receives
under this subsection shall be credited to the appropriation or fund
initially charged for providing the space or service. However, amounts
in excess of actual operating and maintenance costs shall be credited
to miscellaneous receipts unless otherwise provided by law.
40 U.S.C. § 586(c) [formerly section 210(k) of the Federal Property and
Administrative Services Act of 1949, 40 U.S.C. § 490(k); when re-
codified, the Code uses the word "Administration" to refer to the
General Services Administration].
The legislative history of 40 U.S.C. § 586(c) states that this section
"would authorize other executive agencies providing building services
similar to those furnished by GSA to charge fees therefore as approved
by the Administrator of General Services. Receipt from such fees could
be credited to the appropriation or fund initially charged, except that
amounts in excess of costs incurred would be credited to miscellaneous
receipts unless otherwise authorized by law." (emphasis added). See
H.R. REP. No. 92-989, at 13 (1972) and H.R. CONE. REP. No. 92-1097, at
12 (1972), reprinted in 1972 U.S.C.C.A.N. 2370, 2378, 2383.
In addition to GSA approval, OMB must approve the rates charged by DHS.
[NOTE 3] Therefore DHS could, with the approval of GSA and OMB,
establish a separate billing and collection process for protection
services (excluding law enforcement services) provided by DHS.
Prior to the enactment of the Act, GSA was vested with the authority to
provide law enforcement services under the former 40 U.S.C. § 318.
However, the Act eliminated GSA's authority to perform law enforcement
functions and, at the same time, vested DHS with broader law
enforcement authority than was previously vested in GSA. See 40 U.S.C.
§ 1315. Therefore, under current law, it does not appear that GSA could
approve rates under 40 U.S.C. § 586(c) for law enforcement services now
being provided by FPS, because such law enforcement services are no
longer services provided by GSA.
However, section 422 of the Act provides that "[e]xcept for the law
enforcement and related security functions transferred [to DHS], the
Administrator shall retain all powers, functions, and authorities
vested in the Administrator under chapter 10 of title 40, United States
Code ..., and other provisions of law that are necessary for the
operation, maintenance, and protection of such buildings and grounds
[under the jurisdiction, custody, or control of the Administrator]." 6
U.S.C. § 232. Therefore, the rates approved by GSA under 40 U.S.C. §
586(c) clearly may include rates for protection services, other than
law enforcement and related security services, provided by FPS. We
believe that the costs for providing contract guard services is an
example of the type of protection service that DHS could bill and
collect from other agencies through this authority.
B. Transfer Provisions of the Act. Alternatively, and in addition to
the authority under 40 U.S.C. § 586(c), the Secretary has the authority
to bill and collect fees for the law enforcement and related security
services provided by its FPS to other Federal agencies because that
function (i.e., billing and collecting for FPS-provided services) was a
function that existed in GSA immediately prior to the creation of the
DHS, and was a function that was transferred to the Secretary by the
Act.
The Act provides in relevant part as follows:
§ 403. Functions transferred:
In accordance with title XV (relating to transition provisions), there
shall be transferred to the Secretary the functions, personnel, assets,
and liabilities of--... (3) the Federal Protective Service of the
General Services Administration, including the functions of the
Administrator of General Services relating thereto;...
Section 403 of the Act, 6 U.S.C. § 203 (emphasis added).
In addition to directing the transfer of the functions of GSA's FPS,
the section specifically provides that the functions of the GSA
Administrator that relate to the FPS and to FPS's functions, personnel,
assets and liabilities are also transferred to DHS. Moreover, section
403 provides that the transfer of these GSA functions shall be in
accordance with the Act's transition provisions in title XV (6 U.S.C. §
541, et seq.) which provide in pertinent part:
§ 1511. Transitional authorities:
(d) Transfer of personnel, assets, obligations, and functions. Upon the
transfer of an agency to the Department--:
(2) the Secretary shall have all functions relating to the agency
[i.e., the Federal Protective Service] that any other official could by
law exercise in relation to the agency immediately before such
transfer, and shall have in addition all functions vested in the
Secretary by this Act or other law.
Section 1511(d)(2) of the Act, 6 U.S.C. § 551(d)(2) (emphasis added).
[NOTE 4]
Further, the Act defines the term "functions" broadly to clearly cover
any and all responsibilities that GSA performed on behalf of the FPS
before enactment of the Act. [NOTE 5] Before the Act, GSA routinely
provided standard level security protection (a FPS function) to other
agencies as part of GSA's standard level user charge for GSA furnished
space and services. [NOTE 6] GSA likewise provided special FPS security
services or above-standard security services to other agencies on a
reimbursable basis. [NOTE 7] Thus, since GSA did perform such billing
and collection functions with respect to the FPS before FPS's transfer
to DHS, that same function (and the concomitant authority and
responsibility) was vested in the Secretary upon the effective date of
the Act. While we note that there is no express language in the Act
specifically authorizing DHS to bill agencies for these services, we
believe that a rational argument can be made to support that
proposition based on the express language in the Act transferring all
the functions as set forth above.
III. GSA Authority to Provide Billing and Collection Services to DHS:
In the alternative to billing agencies directly, because we believe DHS
has the authority to bill and collect for FPS services, DHS could seek
to enter into an agreement with GSA for GSA to provide the billing and
collection services to DHS on a reimbursable basis. Such an agreement
is authorized by 40 U.S.C. § 592(b)(2), [NOTE 8], 40 U.S.C. § 581(g)
[NOTE 9], or the Economy Act, 31 U.S.C. § 1535.
GSA could agree to provide the billing and collection services on a
reimbursable basis to DHS, using DHS's own authority to bill and
collect for services provided by FPS. However, if DHS concludes that it
lacks such authority, GSA cannot do for DHS that which DHS lacks
authority to do for itself.
NOTES:
[1] U.S. General Accounting Office (GAO) Draft Report to the Chairman,
Committee on Government Reform, House of Representatives, "Homeland
Security, Transformation Strategy Needed to Address Challenges Facing
the Federal Protective Service," GAO-04-537.
[2] See Reorganization Plan No. 18 of 1950, 40 U.S.C. § 301 note; 40
U.S.C. §§ 8101, 3101, and 582.
[3] The provisions currently found in 40 U.S.C. §§ 586 and 592
[formerly 40 U.S.C. §§ 490(j), (k), and (f)] were enacted into law by
the Public Buildings Amendments of 1972, Public Law 92-313, 86 Stat.
216. Section 7 of Public Law 92-313 provides: "To carry out the
provisions of the Public Buildings Amendments of 1972, the
Administrator of General Services shall issue such regulations as he
deems necessary. Such regulations shall be coordinated with the Office
of Management and Budget, and the rates established by the
Administrator of General Services pursuant to sections 210(j) and
210(k) of the Federal Property and Administrative Services Act of 1949,
as amended, [now codified as 40 U.S.C. § 586] shall be approved by the
Director of the Office of Management and Budget." Reference to the OMB
approval requirements of Section 7 of Public Law 92-313 was included in
the former 40 U.S.C. § 603 note; however, such a reference is not
included in the current Title 40, United States Code, as codified by
Public Law 107-217, August 21, 2002, 116 Stat. 1062. Nevertheless,
Public Law 107-217 made no substantive changes in existing law;
therefore, Section 7 of Public Law 92-313 remains in full force and
effect. See Title 40, U.S.C. notes following the Table of Former Title
40 U.S.C.
[4] The bracketed text referencing "the Federal Protective Service" was
inserted here because it is clear from the context of the provision
that the term "agency" is referring to the transferred components of
DHS, including the Federal Protective Service. The Act also provides
that: "[F]or purposes of this title [i.e., the title on the Transition]
that: (1) The term 'agency' includes any entity, organizational unit,
program, or function." Pub. L. 107-297, §1501(a), 6 U.S.C. § 541 (a)
(2004).
[5] See the Act, at § 101 - Definitions, which provides: "In this Act,
the following definitions apply:
(8) The term 'functions' includes authorities, powers, rights,
privileges, immunities, programs, projects, activities, duties, and
responsibilities."
Pub. L. 107-297, §101(8), 6 U.S.C. § 101 (2004). While some might
contend the phrase "functions of the Administrator relating thereto"
was intended to only cover the Administrator's statutory authorities
that relate specifically to the FPS, like the authority to appoint
officers, to issue firearms or to provide law enforcement and security
services, etc., all of these functions were already transferred to the
Secretary immediately upon enactment of section 1706 of the Act or
under the first phrase of 403(3), which transferred all of the
functions, personnel, assets and liabilities of the FPS. So, the
phrase about "the functions of the Administrator relating thereto"
must be construed to mean all of GSA's other functions with respect to
the FPS. Furthermore, the Act directs that, with respect to any
function transferred to the Secretary under the Act, any reference in
any Federal law to another department or agency shall be deemed to
refer to the Secretary of Homeland Security. See section 1517 of the
Act, 6 U.S.C. § 557.
[6] See GSA's functions under 40 U.S.C. § 581 (a) and 40 U.S.C. § 1315,
before enactment of the Act; and 40 U.S.C. § 586(b) and § 581(g). See
also, 41 CFR Part 102-85; and GSA's PBS Pricing Desk Guide, 2nd ed.,
section 3.2.6.; and GSA's PBS Customer Guide to Real Property, Chapter
4, Security and Law Enforcement Services.
[7] Id. Also, discussions with PBS's Controller's Office confirms that
GSA would routinely provide above standard services (i.e., services
above those included in GSA's Rent charge (i.e., base rent and
building-specific security charges) to other agencies on a
reimbursable basis using GSA's reimbursable work authorizations
(RWAs).
[8] 40 U.S.C. § 592(b)(2) provides: "Reimbursements for special
services. --This subchapter does not preclude the Administrator of
General Services from providing special services, not included in the
standard level user charge, on a reimbursable basis. The reimbursements
may be credited to the Fund.
[9] 40 U.S.C. § 581 provides that: "The Administrator may - (1) obtain
payments, through advances or otherwise, for services, space, quarters,
maintenance, repair, or other facilities furnished, on a reimbursable
basis, to a federal agency...; and (2) credit the payments to the
applicable appropriation of the Administration."
[End of section]
Appendix IV: GAO Legal Analysis of Issues Concerning FPS Activities Not
Related to Facility Protection:
In its comments on this report, DHS stated that it plans to develop
guidance allowing the use of funds for activities unrelated to the
protection of buildings and grounds where the activities are de
minimis. DHS refers to GAO decisions as supporting the use of funds for
activities that "are of limited duration with local offices, ad hoc,
and do not increase the direct costs of FPS operations and investment
in staff." We do not agree with DHS. We do not believe the GAO
decisions DHS cites support the implementation of the de minimis
concept through guidance sanctioning de minimis uses of FPS funds for
explicitly prohibited purposes.
Under the Homeland Security Act, only the costs of services provided by
FPS personnel that are necessary or incidental to the protection of
federal buildings and grounds may be funded out of agency rents and
fees. Specifically, section 422(b)(2) of the Homeland Security Act of
2002 states:
"Any amounts transferred by the Administrator of General Services to
the Secretary out of rents and fees collected by the Administrator
shall be used by the Secretary solely for the protection of buildings
or grounds owned or occupied by the Federal Government."[Footnote 29]
The language in section 422(b)(2) explicitly restricts the use of funds
collected by GSA from its tenants out of rents and fees "solely" for
the protection of government buildings and grounds. Because of this
limitation in the statute, the use of these funds for any purpose other
than the protection of government buildings and grounds would not be
permitted absent reimbursement pursuant to other applicable statutory
authority.
Section 422(b)(2) recognizes that FPS funds come from rents and fees
paid by other federal agencies to reimburse FPS for services in
protecting their buildings and grounds. To permit DHS to use those
funds for purposes unrelated to the protection of federal buildings and
grounds in effect would burden those agencies with paying part of the
costs of DHS's mission unrelated to the purpose for which they pay
rents and fees. This practice also would result in the unauthorized
augmentation of DHS appropriations. We are not questioning the policy
judgment of DHS in making FPS personnel available for those activities
within DHS's mission that are not related to the protection of federal
buildings and grounds. Rather, we are questioning the use of amounts
transferred by GSA to DHS, given the restriction of section 422(b)(2)
of the Homeland Security Act, for these activities.
DHS does not contend that the statute itself permits DHS to expend
funds for purposes other than the protection of buildings and grounds
and, in fact, DHS recognizes that if funds are used for unrelated
purposes they must be reimbursed. However, DHS claims that if the
unrelated expenditures are de minimis they need not be reimbursed, and
DHS proposes to issue guidance to this effect.
DHS relies on two GAO decisions, involving inter-and intra-agency
details, as supporting its proposed guidance. In the first decision, 64
Comp. Gen. 370 (1985), we held that, absent specific statutory
authority, non-reimbursable details violate the purpose statute, 31
U.S.C. § 1301(a), which provides that appropriations may be spent only
on the objects for which they are appropriated. However, we stated
there were limited exceptions in which non-reimbursable agency details
may still be allowed. Under the first exception, we recognized that
non-reimbursable details would be appropriate, and consistent with the
purpose statute, where the detail furthers a purpose for which the
loaning agency receives appropriations. Under the second exception,
which DHS relies upon, we stated that we would not object to details
failing to meet the purpose test, as long as the detail is de minimis
and the fiscal impact on the appropriation is negligible. In this
decision, for purposes of defining de minimis, we adopted guidance from
the Federal Personnel Manual (FPM) relating to agency details, and said
we would permit "details for brief periods when necessary services
cannot be obtained as a practical matter by other means and the number
of persons and cost involved are minimal." (64 Comp. 370, describing
FPM Ch. 300, subchapter 8, Inst. 262, May 7, 1981.) However, in the
second decision, 65 Comp. Gen. 635 (1986), we recognized that this
discretion had limits. There, we stated that the proposed transfer of
15 to 20 National Labor Relations Board administrative law judges to
the Department of Labor "far exceeds the exception for administrative
convenience we intended to establish." We declined to state the dollar
amount or number of people participating in a detail that would be
considered de minimis. In fact, in subsequent cases regarding the
detail of employees under the Economy Act,[Footnote 30] we reiterated
that the reimbursement of the costs of detailed personnel the agency
must recover must be based on actual costs.[Footnote 31]
As explained below, our opinion in 64 Comp. Gen. 370 does not support
DHS's proposal to issue guidance authorizing de minimis uses of FPS
personnel and resources. The guidance adopted in our decision-the FPM-
has been rescinded and is no longer effective.[Footnote 32] Moreover,
to the extent that our decision is read as setting a de minimis
standard of general applicability, it is not in keeping with the
governing law on this subject.
The concept of de minimis comes from the legal maxim De Minimis Non
Curat Lex--the law does not concern itself with trifles.[Footnote 33]
This maxim, as applied by courts and by administrative agencies in
various contexts, recognizes that a fact or amount may be so
insignificant or trifling that it can be overlooked in deciding a legal
issue. It places intangible injuries, such as those that are small and
difficult to measure, outside the scope of legal relief.[Footnote 34]
In the context of appropriations law, we have occasionally invoked the
de minimis concept to analyze the impact on an appropriation of past
conduct alleged to be in violation of the law. For example, where
agencies have violated anti-lobbying appropriation act restrictions, we
have sometimes found the improper expense to be too small, or too
commingled with proper expenses, to warrant recovery.[Footnote 35] In
those cases we used the de minimis concept to measure the amount
associated with the violation and not to prospectively sanction what
would be a violation of law. In a similar vein, the Justice
Department's Office of Legal Counsel (OLC) has recognized that some
activities may be so minimal, and so difficult to segregate from
official activities, that the associated expenses do not need to be
separately tracked or reimbursed.[Footnote 36]
To the extent generalities can be drawn from these cases, the de
minimis concept is most appropriately applied where amounts are not
readily determinable and it is clear that it would be difficult or
impossible for the agency to allocate the specific costs of an
activity, such as the costs of reading and signing a letter. However,
the concept must be applied on a case-by-case basis, depending on the
unique facts and circumstances involved, not routinely as DHS suggests.
See 65 Comp. Gen. 635.
The guidance proposed by DHS would sanction uses of the FPS for
purposes unrelated to the protection of federal buildings and grounds,
and in our view this is not appropriate. In contrast to the kinds of
situations illustrated above, DHS and FPS should be able to identify
costs of FPS personnel used for such activities, since those types of
costs can be allocated on a daily, hourly, or other periodic basis. For
reimbursements under the Economy Act, recovery of actual costs is
required.[Footnote 37] In fact, those types of costs are commonly
allocated when details or the costs of agency personnel providing
services to another agency are reimbursed by one agency to
another.[Footnote 38] While agencies may have flexibility in applying
the actual cost standard, there must be reasonable assurance that the
performing agency is reimbursed for its costs to avoid the ordering or
performing agency augmenting its appropriations.[Footnote 39]
Furthermore, the de minimis concept applies on a case-by-case basis. As
noted above, the concept of de minimis typically goes to measure the
amount associated with a violation or damages to be recovered. The
concept has not been applied to, nor would the case law support, the
prospective approval of activities across an organization like FPS
knowing fully that they constitute violations of law.[Footnote 40]
Similarly, any violation of a statute, whether it be characterized as
de minimis or technical, is not permissible.[Footnote 41] For these
reasons, we would object to DHS establishing prospective guidance which
would sanction use of FPS funds for expenditures that are not
incidental or necessary to the protection of federal buildings and
grounds.
As discussed above, section 422(b)(2) of the Homeland Security Act of
2002 explicitly directs that funds collected from rents and fees be
used "solely" for the protection of buildings and grounds, and the
statute recognizes no exceptions to this restriction. In most
situations, it can be determined prior to the activity whether it falls
within FPS's mission and is necessary or incidental to the protection
of federal buildings and grounds. We recognize that DHS has some
flexibility under 422(b)(2) of the Homeland Security Act of 2002 in
determining that certain uses of FPS funds may be necessary or
incidental to the protection of federal buildings and grounds. For
example, if FPS officers were engaged in crowd control at the World
Trade protests in Miami incident to their protection of federal
buildings during demonstrations, the expenditure of funds for such
activities would be allowed as "necessary" or "incidental" to the
protection of federal buildings or grounds. However, as we noted in the
report, there are other situations where the use of the FPS is not
related in any way to the protection of federal buildings and grounds
and FPS funds should not be used for such purposes without
reimbursement. For example, officers assisting other DHS law
enforcement personnel in immigration-related work such as "Operation
Predator" or providing security at the Kentucky Derby is not necessary
or incidental to the protection of federal buildings and grounds. If
the activity does not fall within FPS mission or is not necessary or
incidental to the protection of federal buildings and grounds, then the
costs of these activities should be identified and reimbursed by the
benefiting appropriation.
(543083):
FOOTNOTES
[1] 40 U.S.C.A. § 1315.
[2] Civilian employment in the executive branch is measured on the
basis of full-time equivalents (FTE). One FTE is equal to one work year
or 2,080 nonovertime hours. For example, one full-time employee counts
as one FTE, and two half-time employees also count as one FTE.
[3] U.S. General Accounting Office, High-Risk Series: An Update, GAO-
03-119 (Washington, D.C.: January 2003).
[4] See GAO-03-119 and U.S. General Accounting Office, High-Risk
Series: Federal Real Property, GAO-03-122 (Washington, D.C.: January
2003).
[5] 40 U.S.C.A. § 1315 and 6 U.S.C.A. § 203.
[6] 40 U.S.C.A. § 1315.
[7] In technical comments on this report, the U.S. Secret Service said
that FPS plans to take on responsibility for protecting DHS facilities
not otherwise protected by the U.S. Secret Service in connection with
its protective responsibilities under 18 U.S.C. § 3056, or otherwise
under the control of the U.S. Secret Service.
[8] 6 U.S.C.A. § 111.
[9] 40 U.S.C.A. § 1315.
[10] GAO-03-119.
[11] Established by Congress in 1972 and administered by GSA, the
federal buildings fund is a revolving fund in the U.S. Treasury into
which federal agency rent and certain other moneys are deposited.
Moneys deposited into the fund are available, subject to congressional
appropriation, for GSA's real property management and related
activities.
[12] The Department of Justice's June 1995 report, Vulnerability
Assessment of Federal Facilities, designated security levels I through
V into which federal buildings were classified. Fifty-two minimum
standards were established, with level I having 18 minimum standards
and level V having 39 minimum standards. Examples of minimum standards
include lighting with emergency power backup for all buildings
(perimeter security), intrusion detection systems for building levels
III through V (entry security), visitor control systems for building
levels II through V (interior security), and standard armed and unarmed
guard qualifications/training requirements in all buildings (security
planning). FPS uses periodic risk assessments to validate the current
security standards and countermeasures in place at each facility as
well as determine additional security enhancements based on identified
threats.
[13] GSA security fees consisted of two separate components: basic and
building-specific service fees. Basic security fees cover security
services provided by FPS to all GSA tenants and include such services
as patrol and response, security surveys, alarm monitoring, salaries,
and other common cost items. This fee is included in each rent bill on
a cost-per-square-foot basis. Building-specific security fees are for
security measures specific to a particular building based on its
designated security level. For example, a level IV building may have
more guards, magnetometers, and cameras than a level I building.
Building-specific fees are also charged to GSA tenants based on the
square feet they occupy in the building. In technical comments on this
report, the U.S. Secret Service pointed out that some agencies
occupying commercial space do not receive services from FPS, but are
required to pay for FPS benefits at a basic charge per square foot.
[14] 6 U.S.C.A. § 232.
[15] Pub.L. 107-296, Section 1706(b)(1).
[16] 6 U.S.C.A. § 232.
[17] U.S. General Accounting Office, Major Management Challenges and
Program Risks: Department of Homeland Security, GAO-03-102 (Washington,
D.C.: January 2003).
[18] U.S. General Accounting Office, Customs Service Modernization:
Management Improvements Needed on High-Risk Automated Commercial
Environment Project, GAO-02-545 (Washington, D.C.: May 13, 2002).
[19] U.S. General Accounting Office, Contract Management: INS
Contracting Weaknesses Need Attention from the Department of Homeland
Security, GAO-03-799 (Washington, D.C.: July 25, 2003).
[20] U.S. General Accounting Office, Results-Oriented Cultures:
Implementation Steps to Assist Mergers and Organizational
Transformations, GAO-03-669 (Washington, D.C.: July 2, 2003).
[21] U.S. Department of Homeland Security, Securing our Homeland: U.S.
Department of Homeland Security Strategic Plan (Washington, D.C.:
February 2004).
[22] GAO-03-119.
[23] U.S. General Accounting Office, Homeland Security: Challenges
Facing the Coast Guard as it Transitions to the New Department, GAO-03-
467T (Washington, D.C.: Feb. 12, 2003).
[24] U.S. General Accounting Office, Aviation Security: Federal Air
Marshal Service Is Addressing Challenges of Its Expanding Mission and
Workforce, but Additional Actions Needed, GAO-04-242 (Washington, D.C.:
Nov. 19, 2003).
[25] Public Law 107-296, 116 Stat. 2135, 2184-2185 (2002).
[26] The two cited decisions are 64 Comp. Gen. 370 (1985) and 65 Comp.
Gen. 635 (1986).
[27] For example, see U.S. General Accounting Office, Architect of the
Capitol: Management and Accountability Framework Needed for
Organizational Transformation, GAO-03-231 (Washington, D.C.: Jan. 17,
2003).
[28] GAO-03-669.
[29] Public Law 107-296, 116 Stat. 2135, 2184-2185 (2002).
[30] Where no other authority exists, the Economy Act authorizes inter-
or intra-agency provision of services on a reimbursable basis based on
actual costs. See 31 U.S.C. 1535 and 72 Comp. Gen. 159.
[31] See, e.g., B-250377, January 28, 1993 and B-257823, January 22,
1998.
[32] See 60 Fed. Reg. 3055 (Jan. 13, 1995). The only current material
on details is found at 5 C.F.R. Part 300, Subpart C which states that
agencies may detail employees in accordance with 5 U.S.C. 3341
(allowing details for not more than 120 days).
[33] Black's Law Dictionary 443 (7TH ed. 1999).
[34] See 27A Am. Jur. 2d. Equity § 118 and Swick v. City of Chicago, 11
F.3d 85 (1993) (In action alleging he was deprived of property without
due process of law under the Fourteenth Amendment of the Constitution,
police officer was not entitled to recover claimed damages for injury
resulting from being placed on involuntary sick leave because any
injury was de minimis, i.e., intangible, small, difficult to measure.)
[35] In this regard, in several GAO decisions we found violations of
anti-lobbying appropriations act restrictions, but determined that the
amount expended was nominal and not readily determinable--e.g., the
costs of preparing a letter or sending an e-mail--and that the efforts
to effect recovery would greatly exceed the amount to be recovered. See
B-285298, May 22, 2000; B-178528, July 27, 1978; and B-116331, May
29,1961.
[36] In 14 U.S. Op. Off. Legal Counsel 144 (1990), OLC dealt with use
of facilities of the White House Communications Agency (WHCA) for
Presidential travel and communications. The decision observed that
appropriated funds can be used for Presidential media contacts only
with respect to official, as opposed to political communications, but
in a footnote OLC gave an example of a de minimis use of WHCA
facilities. Specifically, OLC noted that "there will always be
particular instances when it will not be evident (and certainly not in
advance) whether use of a WHCA facility will be in furtherance of the
President's official, as distinguished from his political
responsibilities. For example, a presidential aide who returns a
reporter's telephone call will not know until the conversation is over
whether the reporter is interested in political or official matters, or
both. We believe that even when it eventuates that the reporter's
inquiry relates more to the President's political rather than to his
official responsibilities, WHCA may pay for such de minimis use of its
facilities and that special logs need not be maintained nor other
monitoring methods employed—" 14 Op. Off. Legal Counsel 144, at note
18.
[37] See 31 U.S.C. 1535 and 72 Comp. Gen. 159 (1993).
[38] See B-257823, January 22, 1998. (Direct and indirect costs of
personnel allocated by standard hourly rates for each general schedule
grade level included salaries, benefits, costs of management and
support staff as well as overhead.) See also B-250377, January 28,
1993. (Recovery of actual costs of detailed employees should be readily
determinable by pay, personnel and other records that disclose such
information.)
[39] See B-257823, January 22, 1998.
[40] For example, when the Air Force proposed a change to a regulation
relating to the shipment of household goods, which would allow an
agency disbursing officer to make a known overpayment, the Comptroller
General disapproved of the change noting that it would essentially
approve in advance violations of the law. 49 Comp. Gen. 359 (1969).
[41] See, e.g., B-253164, August 23, 1993, in which GAO concluded that
a seemingly "technical" violation of the Anti-Deficiency Act by the
National Labor Relations Board was still a violation of the act and
required a report to Congress and the Office of Management and Budget.
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