DHS Updated Policies and Procedures to Incorporate the Kissell Amendment Restriction

		DHS Procurement Policies Contain the Kissell Amendment Restriction

In August 2009, DHS updated its procurement regulations, the HSAR, to  incorporate the Kissell Amendment restriction on the procurement of  textiles from foreign sources; since then DHS inserted language  incorporating the restriction into the 11 uniform and body armor contracts  we reviewed. All 11 of the contracts we reviewed for uniforms and body armor entered  into by a DHS component since August 2009 included language  regarding the restriction of the Kissell Amendment. One vendor holds this  uniforms contract. DHS Has Procedures to Ensure That the Kissell Amendment Restriction Is Properly Applied

DHS employs multiple procedures, according to officials, in an effort to  ensure that the restriction on the procurement of foreign textiles from the  Kissell Amendment was and is properly applied, including (1) a  standardized procurement contract review process; (2) a requirement for  all DHS components to use established department-wide contracts; (3)  verification procedures to ensure the stated country of origin is correct;  and (4) trainings on foreign procurement restrictions. The Kissell Amendment Restriction Has a Limited Effect on DHS Textile Procurements

In practice, the Kissell Amendment affects DHS textile purchases in a  limited manner due to multiple factors. For most DHS components, these  factors limit the effect of the Kissell Amendment restriction to certain  foreign textile procurements directly related to U.S. national security  interests that fall between $150,000 and $191,000. Therefore, the  Kissell Amendment restricts TSA’s procurement of certain foreign textiles  above $150,000 from all but three foreign countries. The Kissell  Amendment restriction applies only to those textile items that are directly  related to national security interests for procurements above the $150,000  simplified acquisition threshold, and must be applied in a manner  consistent with U.S. obligations under international agreements. DHS Procured Over Half of the Value of Textile Items for the Current Uniforms Contract from Foreign Sources

From October 2014 to June 2017, 58 percent of the value of uniform  items ordered by DHS came from outside the United States. Appendix I: Objectives, Scope, and Methodology

A Senate Report accompanying Senate Bill 1619, a bill related to the  Consolidated Appropriations Act, 2016, includes a provision for us to  review the Department of Homeland Security’s (DHS) implementation and  compliance with the Kissell Amendment, as well as the effectiveness of  the policy. This report examines the extent to which (1) DHS has  incorporated the Kissell Amendment into its procurement policies and  procedures and (2) the Kissell Amendment affects DHS’s procurement of  textiles. We  interviewed officials from DHS and the office of the U.S. Trade  Representative (USTR). We also interviewed officials from the U.S. textile  and apparel industry, including the National Council of Textile  Organizations and the American Apparel and Footwear Association. To determine the extent to which the Kissell Amendment affects DHS’s  procurement of textiles, we reviewed relevant government regulations  and laws, U.S. international agreements, DHS contract files, and ordering  data for the largest textile contract since the effective date of the Kissell  Amendment. We determined these estimates were  sufficiently reliable to represent DHS’s intended purchases of textile  products by country of origin under this contract.
Why GAO Did This Study

The U.S. textile industry sustained significant losses when textile production fell from $71 billion in 2006 to $46 billion in 2009, according to the U.S. Bureau of Economic Analysis. As a part of the American Recovery and Reinvestment Act of 2009, Congress passed the Kissell Amendment, which placed a restriction on DHS's procurement of certain textiles from foreign sources. DHS has applied this restriction to uniforms and body armor. The amendment was intended to increase opportunities for American textile and apparel manufacturers, according to the Senate Committee on Appropriations.
The Senate report that accompanied Senate Bill 1619, a bill related to the Consolidated Appropriations Act, 2016, includes a provision for GAO to review DHS's implementation of the Kissell Amendment and its effectiveness. This report addresses the extent to which (1) DHS has incorporated the Kissell Amendment into its procurement policies and procedures and (2) the Kissell Amendment affects DHS's procurement of textiles. To perform this work, GAO analyzed DHS policies and procedures, procurement obligations data, textile contract files, and vendor ordering data from DHS's current uniforms contract. GAO also interviewed DHS and U.S. Trade Representative officials and private sector representatives, including the vendor for the current DHS uniforms contract. GAO received technical comments from DHS, which GAO incorporated as appropriate.

What GAO Found

The U.S. Department of Homeland Security (DHS) has updated its policies and procedures to incorporate a restriction on its procurement of certain textiles as specified in the “Kissell Amendment.” In August 2009, DHS amended its procurement policies to reflect the Kissell Amendment restriction and describe the limitations on DHS's procurement of specified textiles from sources outside the United States. All 11 contracts GAO reviewed for uniforms and body armor entered into by a DHS component since August 2009 included language regarding the Kissell Amendment restriction. In addition, according to officials, DHS has several procedures to ensure that contracting officers adhere to the requirements of the Kissell Amendment. These include a required acquisition review process; a requirement for all DHS components to use department-wide contracts; verification procedures; and training for contracting personnel on the Kissell Amendment restriction.
In practice, the Kissell Amendment restriction affects a limited number of procurements due to multiple factors and has not fully restricted DHS from purchasing textiles from foreign sources. The restriction applies only to certain textile purchases directly related to U.S. national security interests above the simplified acquisition threshold of $150,000, and must be applied consistent with U.S. obligations under international agreements. For most of DHS, this restriction limits only procurements that fall between $150,000 and $191,000, the World Trade Organization Government Procurement Agreement threshold. However, because procurements by the Transportation Security Administration (TSA) of textiles are excluded from most international agreements, the Kissell Amendment prevents TSA's purchasing of certain textiles above $150,000 from all but three foreign countries. In September 2014, DHS signed a uniforms contract, the largest procurement covered by the Kissell Amendment. Under this contract, DHS has ordered 58 percent of the $164.6 million in uniform items from foreign sources through June 2017 (see figure).