	DHS Faces Challenges in Establishing an Integrated Acquisition Function

The structure of DHS’s acquisition function creates ambiguity about who  is accountable for acquisition decisions. A common theme in our work on  DHS’s acquisition management has been the department’s struggle from  the outset to provide adequate support for its mission components and  resources for departmentwide oversight. DHS, however, relies on dual accountability and collaboration  between the CPO and the heads of DHS’s components. However, we  have reported that the directive may not achieve its goal of creating an  integrated acquisition organization because it creates unclear working  relationships between the CPO and the heads of DHS components. In 2006, DHS reported significant progress in  providing staff for the component contracting offices, though much work  remained to fill the positions with qualified, trained acquisition  professionals. In 2005, we recommended that the Secretary of Homeland  Security provide the CPO with sufficient resources to effectively oversee  the department’s acquisitions. Accordingly, in December  2005, the CPO established a departmentwide acquisition oversight  program, designed to provide comprehensive insight into each  component’s acquisition programs and disseminate successful acquisition  management approaches throughout DHS. DHS Investment Review Process Needs Improvement

In 2003, DHS put in place an investment review process to help protect its  major, complex investments. In  March 2005, we reported that in establishing this process, DHS has  adopted a number of acquisition best practices that, if applied  consistently, could help increase the chance for successful outcomes. However, we noted that incorporating additional program reviews and  knowledge deliverables into the process could better position DHS to  make well-informed decisions on its major, complex investments. Concerns have been raised about the  effectiveness of the review process for large investments at DHS. DHS Reliance on Contracting For Critical Services Requires Enhanced Management Attention

To quickly get the department up and running and to obtain necessary  expertise, DHS has relied extensively on other agencies’ and its own  contracts for a broad range of mission-related services and complex  acquisitions. The growing complexity of  contracting for technically difficult and sophisticated services increases  challenges in terms of setting appropriate requirements and effectively  monitoring contractor performance. With the increased reliance on  contractors comes the need for an appropriate level of oversight and  management attention to its contracting for services and major systems. Conclusion

Since DHS was established in 2003, it has been challenged to integrate 22  separate federal agencies and organizations with multiple missions, values,  and cultures into one cabinet-level department.
Why GAO Did This Study

In fiscal year 2006, the Department of Homeland Security (DHS) obligated $15.6 billion to support its broad and complex acquisition portfolio. Since it was tasked with integrating 22 separate federal agencies and organizations into one cabinet-level department, DHS has been working to create an integrated acquisition organization while addressing its ongoing mission requirements and responding to natural disasters and other emergencies. Due to the enormity of this challenge, GAO designated the establishment of the department and its transformation as high-risk in January 2003. This testimony discusses DHS's (1) challenges to creating an integrated acquisition function; (2) investment review process; and (3) reliance on contracting for critical needs. This testimony is based primarily on prior GAO reports and testimonies.

What GAO Found

The structure of DHS's acquisition function creates ambiguity about who is accountable for acquisition decisions because it depends on a system of dual accountability and collaboration between the Chief Procurement Officer (CPO) and the component heads. Further, a common theme in GAO's work on acquisition management has been DHS's struggle to provide adequate support for its mission components and resources for departmentwide oversight. In 2006, DHS reported significant progress in staffing for the components and the CPO, though much work remained to fill the positions. In addition, DHS has established an acquisition oversight program, designed to provide the CPO comprehensive insight into each component's acquisition programs and disseminate successful acquisition management approaches departmentwide. However, GAO continues to be concerned that the CPO may not have sufficient authority to effectively oversee the department's acquisitions. In 2003, DHS put in place an investment review process to help protect its major complex investments. In 2005, GAO reported that this process adopted many acquisition best practices that, if applied consistently, could help increase the chances for successful outcomes. However, GAO noted that incorporating additional program reviews and knowledge deliverables into the process could better position DHS to make well-informed decisions. Concerns have been raised about how the investment review process has been used to oversee its largest acquisitions, and DHS plans to revise the process. DHS has contracted extensively for a broad range of services and complex acquisitions. The growing complexity of contracting for technically difficult and sophisticated services increases challenges in terms of setting appropriate requirements and effectively monitoring contractor performance. However, DHS has been challenged to provide the appropriate level of oversight and management attention to its contracting for services and major systems.