The Science and  Technology Directorate’s use of other transaction authority has declined  since 2005 when it entered into 28 new agreements. Gaps in the Collection and Reporting of Information on the Use of Other Transactions

Based on our review of all 27 available DHS agreement files, we found  three gaps in the collection and reporting of information on its use of other  transaction authority: (1) DHS does not consistently document the  rationale for entering into an other transaction agreement in an  agreement analysis document, despite DHS guidance to do so;   (2) discrepancies between DHS’s data sources result in an incomplete  picture of other transaction agreements activity, including an inaccurate  annual report to Congress; and (3) DHS does not track the circumstances  that permit the use of other transaction authority, such as the involvement  of a nontraditional contractor, through the phases of an other transaction  agreement. We found that the agreement analysis is not consistently  documented in the files. But DHS officials told us they  have not established metrics. Without consistent information on the universe of other transaction  agreements, DHS continues to report inaccurate or incomplete  information on the use of its other transaction authority in its annual report  to Congress. This may undermine Congress’s ability to obtain a full  picture on the use of this special acquisition authority. Recommendations for Executive Action

To promote the efficient and effective use by DHS of its other transaction  authority to meet its mission needs, we recommend that the Secretary of  Homeland Security direct the Under Secretary for Management to take  the following three actions:
Establish an action plan with specific time frames for fully  implementing the prior GAO recommendation to establish a  mechanism to collect and track relevant data on other transaction  agreements, including the role of the nontraditional contractor, and  systematically assess the data and report to Congress. DHS’s comments are reprinted in appendix III. Appendix I: Objectives, Scope, and Methodology

The objectives for this report were to review (1) the Department of  Homeland Security’s (DHS) Science and Technology Directorate’s use of  other transaction authority, (2) the extent to which DHS has addressed  challenges we previously identified with its use of the authority, and   (3) the information DHS collects and reports on the use of other  transaction authority. To determine the extent to which DHS has addressed challenges with its  use of other transaction authority, we drew upon prior GAO reports on  DHS’s use of other transaction authority, reviewed DHS other transaction  agreement policies and procedures, conducted interviews with DHS  officials, and reviewed other transaction agreement files that were active  on or after April 1, 2008, through September 2011.
Why GAO Did This Study

When DHS was created in 2002, Congress granted it special acquisition authority to use other transaction agreements, which are special vehicles used for research and development or prototype projects. Unlike conventional contracts, other transaction agreements offer flexibilities to reach entities that traditionally have not done business with the government. They have risks, however, because they are exempt from the Federal Acquisition Regulation and other requirements.
The Homeland Security Act of 2002 required GAO to report on the use of other transactions by DHS. In 2004 and 2008, GAO reported on challenges DHS faced. This report covers (1) the DHS Science and Technology Directorates use of other transactions, (2) DHSs progress in addressing challenges, and (3) the information collected on the use of the authority and reported to Congress. GAO examined all 27 available other transaction agreement files, reviewed DHSs other transaction policies and procedures, and interviewed cognizant officials.

What GAO Found

In the last 8 years, the Department of Homeland Securitys (DHS) Science and Technology Directorate has used its special acquisition authority to enter into 58 other transaction agreements. Use of the authority has declined since 2005. DHS officials said the decline is due to uncertainty about the agencys continuing authority to enter into these agreements, among other things.
DHS has made progress in addressing challenges and prior GAO recommendations related to its use of other transaction agreements in five areas.
GAOs analysis of DHSs files and reports to Congress found gaps in the collection and reporting of information on other transactions. Specifically:
DHS does not consistently document the rationale for entering into an other transaction agreement in the agreement analysis document, although DHS guidance requires it to do so.
Recent annual reports to Congress did not contain information on all other transaction agreements.
DHS does not collect information on the circumstances that permit the use of other transaction authority throughout the life of the agreement.
Without complete information about the universe of other transaction agreements, neither Congress nor DHS can have full visibility into the use of this authority.

What GAO Recommends

GAO recommends that DHS (1) develop an action plan with specific time frames for fully implementing GAOs prior recommendation on data collection and congressional reporting, (2) ensure full implementation of its guidance regarding documentation, and (3) establish a policy for reviewing the circumstances that permit the use of other transaction authority throughout the life of the agreement. DHS agreed with these recommendations.