At DHS, in fiscal year 2005 services accounted  for $7.9 billion, or 67 percent, of total procurement obligations, with $1.2  billion obligated for four types of professional and management support  services: program management and support, engineering and technical,  other professional, and other management support (see fig. 1). Of the $805 million obligated by the Coast Guard, OPO, and TSA in fiscal  year 2005 to procure four types of professional and management support  services, more than one-half of the obligations was for engineering and  technical services—most of which was contracted by the Coast Guard and  OPO. However, most of the selected statements of work we reviewed  did request reorganization and planning activities, acquisition support, and  policy development—services that closely supported inherently  governmental functions. DHS Did Not Consider Risk when Deciding to Contract for Selected Services

A lack of staff and expertise to get programs and operations up and  running drove decisions to contract for professional and management  support services. These conditions need to be carefully monitored to ensure  the government does not lose control over and accountability for mission  related decisions. DHS has not explored ways to manage the risk of  contracting for these services such as determining the right mix of  government-performed and contractor-performed services or assessing  total workforce deployment across the department. Selected Cases May Have Been at Risk of Contractors Influencing Government Decisions

To ensure the government does not lose control over and accountability  for mission-related decisions, long-standing federal procurement policy  requires attention to the risk that government decisions may be influenced  by, rather than independent from, contractor actions when contracting for  services that closely support inherently governmental functions. Broadly defined requirements were also apparent in the 117 statements of  work that we reviewed. However, program  officials said the contractor never provided these services. For the nine cases we reviewed, the level of  oversight DHS provided did not always ensure accountability for  decisions—as called for in federal guidance—or the ability to judge  whether contractors were performing as required. According to DHS contracting officers and program officials, cost,  complexity, and visibility are risk factors that trigger the need for  enhanced oversight. Recommendations for Executive Action

To improve the department’s ability to manage the risk of selected  services that closely support inherently governmental functions as well as  government control over and accountability for decisions, we recommend  that the Secretary of Homeland Security implement the following five  actions:    establish strategic-level guidance for determining the appropriate mix  of government and contractor employees to meet mission needs;    assess the risk of selected contractor services as part of the acquisition  planning process, and modify existing acquisition guidance and training  to address when to use and how to oversee those services in  accordance with federal acquisition policy;    define contract requirements to clearly describe roles, responsibilities,  and limitations of selected contractor services as part of the acquisition  planning process;    assess program office staff and expertise necessary to provide  sufficient oversight of selected contractor services; and  review contracts for selected services as part of the acquisition  oversight program. To identify potential risk and the extent to which DHS considered risk  when deciding to use contracts for selected professional and management  support services that closely support the performance of inherently  governmental functions, and to assess DHS’s management and oversight of  contracts for these types of services, we conducted a detailed review of  nine case studies—three at each component.
Why GAO Did This Study

In fiscal year 2005, the Department of Homeland Security (DHS) obligated $1.2 billion to procure four types of professional and management support services--program management and support, engineering and technical, other professional, and other management support. While contracting for such services can help DHS meet its needs, there is risk associated with contractors closely supporting inherently governmental functions--functions that should be performed only by government employees. This report (1) describes the contracted services, (2) identifies potential risk and the extent to which DHS considered risk when deciding to contract for these services, and (3) assesses DHS's approach to managing and overseeing these services. GAO analyzed 117 judgmentally selected statements of work and 9 cases in detail for contracts awarded in fiscal year 2005 by the Coast Guard, the Office of Procurement Operations (OPO), and the Transportation Security Administration (TSA).

What GAO Found

More than half of the 117 statements of work that GAO reviewed provided for reorganization and planning activities, policy development, and acquisition support--services that closely support the performance of inherently governmental functions. Other such services supporting a broad range of programs and operations at Coast Guard, OPO, and TSA included budget preparation, regulation development, and employee relations. Decisions to contract for professional and management support services were driven by the need for staff and expertise to get programs and operations up and running. However, for the nine cases we reviewed, program officials did not assess the risk that government decisions may be influenced by, rather than independent from, contractor judgments. These cases included services that have the potential to increase this risk. For example, contractors directly supported DHS missions and performed on an ongoing basis work comparable to that of government employees. Most of the nine contracts also lacked detail or covered a wide range of services. Conditions such as these need to be carefully monitored to ensure the government does not lose control over and accountability for mission-related decisions. DHS has not explored ways to manage the risk of these contractor services, such as through total workforce deployment across the organization. The level of oversight DHS provided did not always ensure accountability for decisions or the ability to judge whether the contractor was performing as required. Federal acquisition policy requires enhanced oversight of contracts for services that can affect government decision making, policy development, or program management. While contracting officers and program officials acknowledged their professional and management support services contracts closely supported inherently governmental functions, they did not see a need for increased oversight. Insufficient oversight increases the potential for a loss of management control and the ability to ensure intended outcomes are achieved.