DHS Has Made Some Progress in Acquisition Management

We have identified three key performance areas for acquisition  management: assessing and organizing acquisition functions to meet  agency needs; developing clear and transparent policies and processes for  all acquisitions; developing an acquisition workforce to implement and  monitor acquisitions. The  following summarizes each of these three areas:    Assessing and organizing the acquisition function: Since it was  created in 2003, DHS has recognized the need to improve acquisition  outcomes, and has taken some steps to organize and assess the acquisition  function. DHS has worked to integrate the disparate acquisition processes  and systems that the component organizations brought with them when  the department was created. We have ongoing work on DHS’s acquisition workforce  scheduled to be released later this year. Planning for Procurement and Major Acquisitions Need Improvement

Our work on both services contracting and major investments has  consistently identified the need for improved acquisition planning to better  ensure taxpayer dollars are spent prudently. For services procured through methods such as interagency and  performance-based contracting, we found acquisition planning was  lacking. To help ensure that the government  does not lose control over and accountability for such decisions,  longstanding federal procurement policy requires attention to the risk that  government decisions may be influenced by, rather than independent  from, contractor judgments when contracting for services that closely  support inherently governmental functions. We found that DHS conducted limited evaluation of contracting  alternatives to ensure good value when selecting among interagency  contracts. Our prior reviews of complex DHS investments using a  performance-based approach point to a number of shortcomings. Consistent with these findings, our 2008 report on performance-based  acquisitions, for which we reviewed contracts for eight major investments  at Coast Guard, CBP, and TSA, found that contracts for investments that  did not have well-defined requirements, or a complete set of measurable  performance standards, or both, at the time of contract award or the start  of work experienced cost overruns, schedule delays, or did not otherwise  meet performance expectations. Some of the four key oversight reviews  have begun under this program, but management assessments, or  evaluation of the outcomes of acquisition methods and contracted  services, have not been conducted. Our work has found that the CPO  continues to face challenges in maintaining the staffing levels needed to  fully implement the oversight program, and CPO authority to ensure that  components comply with the procurement oversight plan remains unclear.
Why GAO Did This Study

Since it was created in 2003, the Department of Homeland Security (DHS) has obligated billions of dollars annually to meet its expansive homeland security mission. The department's acquisitions support complex and critical trade, transportation, border security, and information technology investments. In fiscal year 2007, DHS spent over $12 billion on procurements to meet this mission including spending for complex services and major investments. Prior GAO work has found that while DHS has made some initial progress in developing its acquisition function since 2003, acquisition planning and oversight for procurement and major acquisitions need improvement. This testimony discusses GAO's findings in these areas and is based on GAO's body of work on acquisition management issues.

What GAO Found

Recognizing the need to improve its acquisition outcomes, DHS has taken some steps to integrate disparate acquisition processes and systems that the component organizations brought with them when the department was formed. However, we have reported that more needs to be done to develop clear and transparent policies and processes for all acquisitions, and to develop an acquisition workforce to implement and monitor acquisitions. With regard to acquisition planning, DHS did not assess the risk of hiring contractors to perform management and professional support services that have the potential to increase the risk that government decisions may be influenced by, rather than independent from, contractor judgments. Planning for services procured through interagency and performance-based contracting methods was also lacking. For example, DHS did not always consider alternatives to ensure good value when selecting among interagency contracts. Shortcomings in DHS's use of a performance-based approach for complex acquisitions included a lack of well-defined requirements, a complete set of measurable performance standards, or both, at the time of contract award or the start of work. Contracts for several investments we reviewed experienced cost overruns, schedule delays, or less than expected performance. Acquisition oversight also has consistently been identified as needing improvement. While the Chief Procurement Officer (CPO) has recently implemented a departmentwide oversight program, evaluations of the outcomes of acquisition methods and contracted services have not yet been conducted. Further, the CPO continues to face challenges in maintaining the staffing levels needed to fully implement the oversight program, and CPO authority to ensure that components comply with the procurement oversight plan remains unclear.