To determine how effectively DHS used its other transactions authority to  attract nontraditional government contractors, we analyzed DHS’s  reported results from using these authorities in the Counter-MANPADS  and Chem-Bio programs. DHS relies on contractors to self-certify their status as a  nontraditional government contractors during agreement negotiation. Other transactions were created to enhance the federal government’s  ability to acquire cutting-edge science and technology. These solicitations used some commonly accepted  acquisition practices and knowledge-based acquisition principles. DHS  issued a management directive, drafted guidance, and recruited additional  program and contracting staff, which now provide a foundation for using  other transactions authority; however, refinements in these policies and  attention to workforce issues are needed to promote success in the  department’s future use of other transactions. DHS’s policy guidance does  not specify when audit requirements should be included in its other  transactions agreements to help ensure, for example, that payments to  contractors are accurate. By not establishing other transactions training requirements and schedules  for its contracting and program staff to complete them, DHS may not be  equipping its staff to fully understand and leverage the benefits of other  transactions. Acquisition Workforce Capacity May Limit DHS’s Ability To Manage A Growing Future Other Transactions Workload

The S&T Directorate plans an increasing number of mission programs that  could use its other transactions authority, but DHS’s current contracting  workforce may not be sufficient to manage this workload. DHS is currently developing a plan to address contracting workforce  issues. The use of other transactions may help attract high-tech  commercial firms that have shied away from doing business with the  government because of the requirements mandated by the laws and  regulations that apply to traditional procurement contracts. We found that industry’s views vary on the effectiveness of DHS’s  outreach efforts. Lack of Systematic Assessment of Acquisition Activities Involving Other Transactions Impairs Ability to Capture and Use Knowledge

The S&T Directorate’s capacity to build and sustain knowledge for use in  its future acquisitions involving other transactions is in the early stages of  development but the Directorate has not yet developed policies or  procedures to ensure that program and portfolio managers are capturing  and assessing critical information and knowledge gained from its  acquisition activities, including the use of other transactions, for use in  future projects. Recommendations

To promote the efficient and effective use by DHS of its other transactions  authority to meet its mission needs, we have three recommendations for  the Secretary of Homeland Security. The Secretary should direct the  Under Secretary for Management and the Under Secretary for Science and  Technology to   establish guidance on when it is appropriate to include audit provisions in    develop a training program for DHS staff in the use of other transactions  to help ensure the appropriate use of this authority, and    capture knowledge obtained during the acquisition process for use in  planning and implementing future other transactions projects.
Why GAO Did This Study

The Homeland Security Act of 2002 authorized the Department of Homeland Security (DHS) to establish a pilot program for the use of acquisition agreements known as "other transactions." Because they are exempt from many of the requirements that apply to government contracts, other transactions can be useful in acquiring cutting-edge technologies from entities that traditionally have declined to do business with the government. The act requires GAO to report to Congress on the use of other transactions by DHS. To fulfill this obligation, GAO (1) determined if DHS has developed policies and established a workforce to manage other transactions effectively and (2) evaluated how effectively DHS has used its other transactions authority to attract nontraditional government contractors.

What GAO Found

The Department of Homeland Security has issued policy and is developing a workforce to implement its other transactions authority, but the department's policies need further development and its contracting workforce needs strengthening to promote the successful use of the authority in the future. Soon after it was established, DHS issued other transactions solicitations using some commonly accepted acquisition practices and knowledge-based acquisition principles. Subsequently, the department issued a management directive and drafted guidance for using other transactions, loosely modeled on the practices of the Department of Defense (DOD), one of several other agencies with other transactions authority and the one with the most experience with using these agreements. Unlike DOD, however, DHS has not specified in its policies or guidance when its contracting staff should consider the use of independent audits to help ensure, for example, that payments to contractors are accurate. Similarly, DHS has not established training requirements to aid staff in understanding and leveraging the benefits of other transactions. The DHS contracting workforce is limited in size and capacity, which could impede the department's ability to manage a potential increase in its other transactions workload. DHS is taking steps to enhance the capacity of its contracting workforce. The DHS Science and Technology Directorate included nontraditional government contractors in its first two other transactions projects. The Directorate engaged in extensive outreach efforts, such as conducting briefings on its mission and research needs to industry and academic institutions and using a number of Web-based tools to publicize its solicitations. But DHS has not yet developed mechanisms to capture and assess the knowledge gained about the use of other transactions. As a result, DHS may not be able to leverage information from current projects for use in future solicitations that use other transactions.