The goal of BioWatch is to provide early warning,  detection, or recognition of a biological attack. Since fiscal year 2007, DHS’s OHA has been responsible for  overseeing the acquisition of this technology. DHS Did Not Fully Develop Critical Information for Initial Investment Decision Making

DHS approved the Gen-3 acquisition in October 2009, but it did not fully  engage in the early phases of its acquisition framework to ensure that the  acquisition was grounded in a justified mission need and that it pursued  an optimal solution—for example, DHS did not fully develop a Mission  Needs Statement or an Analysis of Alternatives with a cost-benefit  analysis, as called for in its Acquisition Life-cycle Framework. They said that the department directed them to  proceed because there was already departmental consensus around the  solution. DHS Did Not Develop Complete and Reliable Performance, Schedule, and Cost Information before Approving the Gen-3 Acquisition

In October 2009, DHS approved the Gen-3 acquisition at ADE-2A— based on the information contained in acquisition documents provided by  the BioWatch program—authorizing the BioWatch program to proceed  with characterization testing of Gen-3 candidate technologies. Additionally, they reported that  they did not account for risk in the schedule estimates that were included  in the Acquisition Program Baseline for ADE-2A. to engage in a full effort to develop a Life-Cycle Cost Estimate in  accordance with the GAO Cost Estimating Guide ahead of ADE-2A, but  were directed by the department to proceed with the best point estimate  they could derive. These changes in performance, schedule, and cost,  along with maturation in the department’s acquisition management  process, create an opportunity for DHS to reevaluate the mission need  and alternatives in a more comprehensive and systematic fashion, and in  accordance with DHS acquisitions guidance, to help ensure that it invests  its limited resources in the most cost-effective solution possible. BioWatch Must Demonstrate System Performance and Receive Approval before Full Deployment, Estimated for 2022

According to DHS officials the remaining steps in the Gen-3 acquisition  include performance testing, operational testing and evaluation,  production, deployment, and sustainment. Collectively, the BioWatch program estimates that this testing will take  approximately 3 years and cost approximately $89 million. If the BioWatch program can demonstrate that the candidate technology  meets requirements and DHS approves the Gen-3 acquisition at ADE-3,  the DHS June 2011 life-cycle cost estimate indicates that Gen-3 is  expected to cost $5.8 billion (80 percent confidence) through June 2028. To prepare for the deployment of Gen-3, the BioWatch program must  work with Gen-3 jurisdictions to prepare sites for detector placement and  to develop location-specific Concepts of Operations to provide key  information and considerations—such as specifying roles and  responsibilities and developing public information and risk communication  messages—that are integral to response operations in the event that  Gen-3 detects a pathogen. Similarly, the $2.1 billion cost estimate  presented to DHS decision makers and Congress for planning purposes  at the start of the acquisition is now $5.8 billion (for the first 13 years of  deployment; only 6 of which are for full deployment) and may still rise  because of lingering uncertainty about the acquisition strategy. Recommendations for Executive Action

To help ensure that Gen-3’s public health and risk mitigation benefits  justify the costs, the program pursues an optimal solution, and DHS  bases its acquisition decisions on reliable performance, cost, and  schedule information developed in accordance with guidance and good  practices, we recommend that before continuing the Gen-3 acquisition,  the Secretary of Homeland Security ensure that program and acquisition  decision makers take the following two actions:  1.  reevaluate the mission need and systematically analyze alternatives  based on cost-benefit and risk information, using information from  studies like those conducted by the Homeland Security Institute and  Sandia National Laboratories, along with any other risk and cost  information that may need to be developed, and 2.  update other acquisition documents, such as the Acquisition Program  Baseline and the Operational Requirements Document, to reflect any  changes to performance, cost, and schedule information that result  from the reevaluation of mission needs and alternatives. DHS concurred with both recommendations,  but did not concur that these actions need to be completed before  continuing with the acquisition. Our work showed that DHS does not have  reasonable assurance that the solution it has been pursuing warrants  investment of limited resources and that it represents an optimal solution.
Why GAO Did This Study

The 2001 anthrax attacks brought attention to the potentially devastating consequences of a biological attack. DHS operates a program, known as BioWatch, intended to help detect such an attack by airborne pathogens. The currently deployed technology can take 12 to 36 hours to confirm the presence of pathogens. DHS has been pursuing a third generation of the technology that will perform automated testing, potentially generating a result in under 6 hours and reducing labor costs.
GAO was asked to examine issues related to the Gen-3 acquisition. This report addresses the extent to which (1) DHS used its acquisition life cycle framework to justify the need and consider alternatives; (2) DHS developed reliable performance, schedule, and cost expectations; and (3) steps remaining before Gen-3 can be deployed. GAO reviewed acquisition documentation and test results and interviewed agency officials from the BioWatch program and other DHS components with development, policy, and acquisition responsibilities.

What GAO Found

The Department of Homeland Security (DHS) approved the Generation-3 (Gen-3) acquisition in October 2009, but it did not fully engage in the early phases of its acquisition framework to ensure that the acquisition was grounded in a justified mission need and that it pursued an optimal solution. Critical processes in the early phases of DHS's framework are designed to (1) justify a mission need that warrants investment of resources and (2) select an optimal solution by evaluating viable alternatives based on risk, costs, and benefits. BioWatch program officials said that these early acquisition efforts were less comprehensive and systematic than the DHS framework calls for because there was already departmental consensus around the solution. Without a systematic effort to justify the need for the acquisition in the context of its costs, benefits, and risks, DHS has pursued goals and requirements for Gen-3 with limited assurance that they represent an optimal solution. Reevaluating the mission need and systematically analyzing alternatives could provide better assurance of an optimal solution.
The performance, schedule, and cost expectations presented in required documents when DHS approved the acquisition were not developed in accordance with DHS guidance and good acquisition practices--like accounting for risk in schedule and cost estimates. BioWatch program officials said that DHS leadership directed them to prepare information quickly for the 2009 decision, which was accelerated by more than 1 year. Since DHS approved the acquisition in October 2009, the estimated date for full deployment has been delayed from fiscal year 2016 to fiscal year 2022, and the original life cycle cost estimate for the 2009 decision--a point estimate unadjusted for risk--was $2.1 billion. In June 2011, DHS provided a risk-adjusted estimate at the 80 percent confidence level of $5.8 billion. Comprehensive and systematic information developed using good practices for cost and schedule estimating, could help ensure more reliable performance, schedule, and cost information for decision makers.
Several steps remain before DHS can deploy and operate Gen-3. First, DHS must conduct additional performance and operational testing. This testing--estimated to take 3 years and cost $89 million--is intended to demonstrate full system performance, including the information technology network. To do so, the BioWatch program must address testing challenges including limitations on the use of live pathogens, among others. Following operational testing, DHS intends to decide whether to authorize the production and deployment of Gen-3. If Gen-3 is approved, the BioWatch program plans to prepare for deployment by working with BioWatch jurisdictions to develop location-specific plans to guide Gen-3 operations. DHS estimates show that about $5.7 billion of the $5.8 billion life-cycle cost remains to be spent to test, produce, deploy, and operate Gen-3 through fiscal year 2028.

What GAO Recommends

GAO recommends that before continuing the acquisition, DHS reevaluate the mission need and alternatives and develop performance, schedule, and cost information in accordance with guidance and good acquisition practices. DHS concurred with the recommendations, but not the implementation timeline. DHS plans to proceed with the acquisition while implementing them to avoid further delays. However, GAO believes the recommendations should be enacted before DHS proceeds with the acquisition as discussed in this report.