	Background

		DHS Acquisitions and the Cancellation of Gen-3

We have highlighted DHS acquisition management issues in our high-risk  list since 2005. We released a report  that evaluated the acquisition decision-making process for Gen-3 in  September 2012. On April 24, 2014, DHS issued an Acquisition Decision Memo (ADM)  announcing the cancellation of the acquisition of Gen-3. The ADM also  announced that S&T will explore development and maturation of an  effective and affordable automated aerosol biodetection capability, or  other operational enhancements, that meet the operational requirements  of the BioWatch system. During this process,  the sample is evaluated for the presence of genetic material from five  different biological agents. Our Prior Work on the Gen-3 Acquisition Identified Challenges and DHS Has Since Cancelled the Program

Our prior findings and recommendations related to the Gen-3 acquisition  provide DHS with lessons learned for future decision making. For  example, in addition to—or perhaps reflecting—its origin in a  predetermined solution from the Mission Needs Statement, the AoA did  not fully explore costs or consider benefits and risk information as part of  the analysis. To help ensure DHS based its acquisition decisions on reliable  performance, cost, and schedule information developed in accordance  with guidance and good practices, in our September 2012 report, we  recommended that before continuing the Gen-3 acquisition, DHS  reevaluate the mission need and possible alternatives based on cost- benefit and risk information. DHS concurred with the recommendation  and in 2012, DHS directed the BioWatch program to complete an updated  AoA. On the  basis of our review, we concluded that the IDA-conducted AoA followed  the DHS guidance and resulted in a more robust exploration of  alternatives than the previous effort. On April 24, 2014, the DHS Acquisition Review Board reviewed the  BioWatch Gen-3 acquisition with OHA and issued an ADM announcing  the cancellation of the acquisition of Gen-3. According to the DHS ADM,  the AoA “did not confirm an overwhelming benefit to justify the cost of a  full technology switch” to Gen-3. BioWatch program officials said the  decision to cancel the Gen-3 acquisition was a cost-effectiveness  measure, because the system was going to be too costly to develop and  maintain in its current form. However, our prior work reviewing DHS research and  development efforts highlights challenges DHS may face in transitioning  the future biodetection development efforts S&T is now charged with  exploring back to the program office, OHA. For example, S&T works with  DHS components to ensure that it meets their R&D needs by signing  technology transition agreements (TTA) to ensure that components use  the technologies S&T develops. However, we previously reported in  September 2012 that while S&T had 42 TTAs with DHS components,  none of these TTAs has yet resulted in a technology being transitioned  from S&T to a component. In that review we also found that other DHS  component officials we interviewed did not view S&T’s coordination  practices positively. As a result, we recommended that DHS  develop and implement policies and guidance for defining and overseeing  R&D at the department-level that includes a well-understood definition of  R&D that provides reasonable assurance that reliable accounting and  reporting of R&D resources and activities for internal and external use are  achieved. Future Considerations for the Currently Deployed Gen-2 system

With the cancellation of the Gen-3 acquisition, DHS will continue to rely  on its currently deployed Gen-2 system as an early indicator of an  aerosolized biological attack. Cancellation of the Gen-3 system also  raises questions that need to be answered about the future maintenance  of the Gen-2 system, since it will no longer be replaced, as planned. In  April 2014, program officials described some of the options they are  considering to upgrade the currently deployed system, including:
The addition of a trigger to the current system to enhance  performance indoors. For example, BioWatch program officials indicated they will need to  replace the laboratory equipment for the currently deployed system, as  early as 2015, and readjust life cycle costs. Further, while Gen-2 has been used in the field for over a decade,  information about the technical capabilities for the Gen-2 system,  including the limits of detection, is limited. In 2011, the National Academy  of Sciences stated that the rapid initial deployment of BioWatch did not  allow for sufficient testing, validation, and evaluation of the system and its  components.
Why GAO Did This Study

DHS's BioWatch program aims to detect the presence of biological agents considered to be at a high risk for weaponized attack in major U.S. cities. Initially, development of a next generation technology (Gen-3) was led by DHS S&T, with the goal of improving upon currently deployed technology (Gen-2). Gen-3 would have potentially enabled collection and analysis of air samples in less than 6 hours, unlike Gen-2 which can take up to 36 hours to detect and confirm the presence of biological pathogens. Since fiscal year 2007, OHA has been responsible for overseeing the acquisition of this technology. GAO has published a series of reports on biosurveillance efforts, including a report on DHS's Gen-3 acquisition.
In April 2014, DHS cancelled the acquisition of Gen-3 and plans to move development efforts of an affordable automated aerosol biodetection capability, or other enhancements to the BioWatch system to DHS S&T. This statement addresses (1) observations from GAO's prior work on the acquisition processes for Gen 3, and the current status of the program; (2) observations from GAO's prior work related to DHS S&T and the impact it could have on the BioWatch program; and (3) future considerations for the currently deployed Gen-2 system.
This testimony is based on previous GAO reports issued from 2010 through 2014 related to biosurveillance and research and development, and selected updates obtained from January to June 2014. For these updates, GAO reviewed studies and documents and interviewed officials from DHS and the national labs, which have performed studies for DHS.

What GAO Found

In September 2012, GAO reported that the Department of Homeland Security (DHS) approved the Office of Health Affairs (OHA) acquisition of a next generation biosurveillance technology (Gen-3) in October 2009 without fully following its acquisition processes. For example, the analysis of alternatives (AoA) prepared for the Gen-3 acquisition did not fully explore costs or consider benefits and risk information in accordance with DHS's Acquisition Life-cycle Framework. To help ensure DHS based its acquisition decisions on reliable performance, cost, and schedule information, GAO recommended that before continuing the Gen-3 acquisition, DHS reevaluate the mission need and alternatives. DHS concurred with the recommendation and in 2012 decided to reassess mission needs and conduct a more robust AoA. Following the issuance of the AoA in December 2013, DHS decided in April 2014 to cancel Gen-3 acquisition and move the technology development back to the Science and Technology Directorate (S&T). According to DHS's acquisition decisions memorandum, the AoA did not confirm an overwhelming benefit to justify the cost of a full technology switch to Gen-3. Moreover, DHS officials said the decision to cancel the Gen-3 acquisition was a cost-effectiveness measure, because the system was going to be too costly to develop and maintain in its current form.
GAO's prior work on DHS research and development (R&D) highlights challenges DHS may face in shifting efforts back to S&T and acquiring another biodetection technology. In September 2012, GAO reported that while S&T had dozens of technology transition agreements with DHS components, none of these had yet resulted in a technology developed by S&T being used by a component. At the same time, other DHS component officials GAO interviewed did not view S&T's coordination practices positively. GAO recommended that DHS develop and implement policies and guidance for defining and overseeing R&D at the department that includes a well-understood definition of R&D that provides reasonable assurance that reliable accounting and reporting of R&D resources and activities for internal and external use are achieved. S&T agreed with GAO's recommendations and efforts to address them are ongoing. Addressing these coordination challenges could help to ensure that S&T's technology development efforts meet the operational needs of OHA.
Cancellation of the Gen-3 acquisition also raises potential challenges that the currently deployed Gen-2 system could face going forward. According to DHS officials, DHS will continue to rely on its Gen-2 system as an early indicator of an aerosolized biological attack. However, in 2011, National Academy of Sciences raised questions about the effectiveness of the currently deployed Gen-2 system. While Gen-2 has been used in the field for over a decade, the National Academy of Sciences reported that information about the technical capabilities of the system, including the limits of detection, is limited. In April 2014, DHS officials also indicated that they will soon need to replace laboratory equipment of the currently deployed Gen-2 system and readjust life cycle costs since there will be no Gen-3 technology to replace it.