[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]
HOMELAND SECURITY CONTRACTING: DOES THE DEPARTMENT EFFECTIVELY LEVERAGE
EMERGING TECHNOLOGIES?
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HEARING
before the
SUBCOMMITTEE ON OVERSIGHT,
INVESTIGATIONS, AND MANAGEMENT
of the
COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
JULY 15, 2011
__________
Serial No. 112-39
__________
Printed for the use of the Committee on Homeland Security
[GRAPHIC] [TIFF OMITTED]
Available via the World Wide Web: http://www.gpo.gov/fdsys/
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COMMITTEE ON HOMELAND SECURITY
Peter T. King, New York, Chairman
Lamar Smith, Texas Bennie G. Thompson, Mississippi
Daniel E. Lungren, California Loretta Sanchez, California
Mike Rogers, Alabama Sheila Jackson Lee, Texas
Michael T. McCaul, Texas Henry Cuellar, Texas
Gus M. Bilirakis, Florida Yvette D. Clarke, New York
Paul C. Broun, Georgia Laura Richardson, California
Candice S. Miller, Michigan Danny K. Davis, Illinois
Tim Walberg, Michigan Brian Higgins, New York
Chip Cravaack, Minnesota Jackie Speier, California
Joe Walsh, Illinois Cedric L. Richmond, Louisiana
Patrick Meehan, Pennsylvania Hansen Clarke, Michigan
Ben Quayle, Arizona William R. Keating, Massachusetts
Scott Rigell, Virginia Kathleen C. Hochul, New York
Billy Long, Missouri Vacancy
Jeff Duncan, South Carolina
Tom Marino, Pennsylvania
Blake Farenthold, Texas
Mo Brooks, Alabama
Michael J. Russell, Staff Director/Chief Counsel
Kerry Ann Watkins, Senior Policy Director
Michael S. Twinchek, Chief Clerk
I. Lanier Avant, Minority Staff Director
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SUBCOMMITTEE ON OVERSIGHT, INVESTIGATIONS, AND MANAGEMENT
Michael T. McCaul, Texas, Chairman
Gus M. Bilirakis, Florida William R. Keating, Massachusetts
Billy Long, Missouri, Vice Chair Yvette D. Clarke, New York
Jeff Duncan, South Carolina Danny K. Davis, Illinois
Tom Marino, Pennsylvania Bennie G. Thompson, Mississippi
Peter T. King, New York (Ex (Ex Officio)
Officio)
Dr. R. Nick Palarino, Staff Director
Diana Bergwin, Subcommittee Clerk
Tamla Scott, Minority Subcommittee Director
C O N T E N T S
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Page
STATEMENTS
The Honorable Michael T. McCaul, a Representative in Congress
From the State of Texas, and Chairman, Subcommittee on
Oversight, Investigations, and Management:
Oral Statement................................................. 1
Prepared Statement............................................. 3
The Honorable William R. Keating, a Representative in Congress
From the State of Massachusetts, and Ranking Member,
Subcommittee on Oversight, Investigations, and Management...... 5
The Honorable Bennie G. Thompson, a Representative in Congress
From the State of Mississippi, and Ranking Member, Committee on
Homeland Security.............................................. 6
WITNESSES
Panel I
Mr. Charles K. Edwards, Acting Inspector General, U.S. Department
of Homeland Security:
Oral Statement................................................. 7
Prepared Statement............................................. 9
Mr. David C. Maurer, Director, Homeland Security and Justice
Team, Government Accountability Office:
Oral Statement................................................. 16
Prepared Statement............................................. 17
Mr. Rafael Borras, Under Secretary for Management and Chief
Acquisition Officer, U.S. Department of Homeland Security:
Oral Statement................................................. 22
Prepared Statement............................................. 23
Dr. Tara O'Toole, Under Secretary, Science and Technology
Directorate, U.S. Department of Homeland Security:
Oral Statement................................................. 29
Prepared Statement of Henry I. Gonzalez on Behalf of the
Science and Technology Directorate........................... 30
Panel II
Mr. James A. Williams, Vice Chair, Homeland Security Committee,
TechAmerica:
Oral Statement................................................. 37
Prepared Statement............................................. 38
Mr. Marc A. Pearl, President and CEO, Homeland Security & Defense
Business Council:
Oral Statement................................................. 43
Prepared Statement............................................. 45
Mr. Scott Amey, General Counsel, Project on Government Oversight:
Oral Statement................................................. 49
Prepared Statement............................................. 51
FOR THE RECORD
The Honorable Michael T. McCaul, a Representative in Congress
From the State of Texas, and Chairman, Subcommittee on
Oversight, Investigations, and Management:
Report of the Homeland Security & Defense Business Council..... 63
APPENDIX I
Mr. Rafael Borras, Under Secretary for Management and Chief
Acquisition Officer, U.S. Department of Homeland Security and
Dr. Tara O'Toole, Under Secretary, Science and Technology
Directorate, U.S. Department of Homeland Security:
Letter to Chairman Michael T. McCaul and Ranking Member William
R. Keating................................................... 67
APPENDIX II
Questions From Chairman Michael T. McCaul........................ 69
HOMELAND SECURITY CONTRACTING: DOES THE DEPARTMENT EFFECTIVELY LEVERAGE
EMERGING TECHNOLOGIES?
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Friday, July 15, 2011
U.S. House of Representatives,
Subcommittee on Oversight, Investigations, and
Management,
Committee on Homeland Security,
Washington, DC.
The subcommittee met, pursuant to call, at 10:00 a.m., in
Room 311, Cannon House Office Building, Hon. Michael T. McCaul
[Chairman of the subcommittee] presiding.
Present: Representatives McCaul, Marino, Keating, Clarke of
New York, and Thompson.
Also present: Representatives Clarke of Michigan, and
Meehan.
Mr. McCaul. The committee will come to order. Good morning.
I want to thank the witnesses for being here today. We have
votes, I think at 11:00, so we are going to try to move this
hearing as quickly as possible. Today's hearing is ``Homeland
Security Contracting: Does the Department Effectively Leverage
Emerging Technologies?'' We are going to examine the Department
of Homeland Security's contract process, and whether or not the
Department seeks out technologies across its components, the
Federal Government and the private sector to reduce costs. I
know Patrick Meehan's going to be here, I understand, in a few
minutes. I ask unanimous consent that he be allowed to sit at
this hearing today. Hearing no objection, it will be so
ordered.
I now recognize myself for an opening statement. It's the
job of Oversight to help reduce the cost of Government. With
our Nation's record debt approaching $15 trillion, we need this
now more than ever. One area of the Federal Government with
great potential to reduce this cost to taxpayers is the
Department of Homeland Security, and specifically, in regard to
its acquisition of technology. The Government Accountability
Office, or GAO, has identified technology acquisition at DHS as
an area of high risk, meaning DHS programs have greater
vulnerabilities to waste, fraud, abuse, and mismanagement.
Today our objective is to examine whether DHS leverages
emerging technologies to accomplish its mission. In other
words, does it properly evaluate technology that is already
available? Or does it needlessly spend millions of taxpayer
dollars reinventing the wheel?
Unfortunately, we know the Department of Homeland Security
has already spent an enormous amount of money developing new
technologies, only to find they don't work, or that there are
off-the-shelf technologies already available that could
accomplish the same objectives. Just yesterday, The Washington
Post reported that DHS plans to spend more than $300 million on
radiation detection equipment that has not been fully tested
and may not work. That's according to the GAO. The Post also
sites a DHS budget request from the General Accounting Office.
Perhaps the most infamous example of this waste and abuse is
the Secure Border Initiative, or SBInet, initiated in 2006
which was, in part, designed to be a surveillance system. After
expending nearly $1 billion, DHS cancelled the program because
SBInet has had, and this is a quote, ``has had continued and
repeated technical problems, cost overruns and schedule delays,
raising fundamental questions about SBInet's ability to meet
the needs for technology along the border.'' Compare SBInet to
the U.S. Army's Rapid Aerostat Initial Deployment, or RAID
system. RAID was initially deployed in Afghanistan in 2003 to
protect U.S. forces. It is a combination of towers and
aerostats, lightweight blimp-like aerial vehicles which provide
a persistent surveillance system in support of intelligence and
reconnaissance needs.
We realize the mission of the Department of Homeland
Security attempting to secure our borders is different from the
Department of Defense. However, it seems to me the basic
mission of SBInet and RAID are the same, and that is to protect
the borders and to provide surveillance. So my question is: Did
DHS examine RAID before attempting to develop a brand-new
surveillance system at the tune of $1 billion? If so, what kept
them from using this equipment already developed by our
Government? If not, what kept them from discovering it? I have
personally been to the border many times to see demonstrations
of other forms of DOD surveillance technology that are proven
to have worked in Afghanistan and Pakistan. This equipment
already exists. The research and development will not be
duplicated. It is built at a fraction of the cost and it is
readily available. This could save taxpayers money and secure
the border much sooner than the SBInet's last predictions.
The GAO has also criticized development of SBInet,
concluding DHS did not follow their own acquisition directives
while developing the program. DHS had not approved key program
documents until several years after acquisition had begun, and
most importantly, GAO found that operational requirements for
SBInet were unclear and unverifiable. These types of mistakes
cost taxpayers billions of dollars. There are other examples of
DHS, how we could reduce the cost to the taxpayer. The Customs
and Border Protection, Transportation Security Administration
and other agencies have purchased an average of $387 million of
detection equipment in each of the last 3 years. A March 2011
Inspector General audit found that DHS could save taxpayer
dollars and reduce duplication by coordinating and
consolidating purchases of metal detectors, explosive detection
systems, and radiation detectors for screening people, baggage,
and cargo. DHS components are only encouraged but not required
to leverage contracts Department-wide to increase efficiencies.
Additionally, in April 2011, a DHS Inspector General audit
found that 10 of the 17, or 59 percent of DHS programs reviewed
were acquisitions in which commercially off-the-shelf equipment
or existing contracts could have fulfilled the mission
requirements.
As a result, the administration costs were increased
without adding value to the program. One of Secretary
Napolitano's top priorities is unifying the Department of
Homeland Security, and supporting a One DHS policy. But
unfortunately, the Secretary and this administration have
failed to coordinate and integrate acquisition functions
Department-wide. This has led to the failure of multiple
acquisition programs and the waste of millions in taxpayer
dollars. This administration needs to stop investing in high-
risk acquisition programs until they can effectively manage and
oversee them. We have a recommended solution for DHS to save
taxpayer dollars, and that is to follow the guidance provided
by the Office of Management and Budget. On February 11, 2011,
the Office of Management and Budget sent out a memorandum to
chief acquisition officers, senior procurement executives, and
chief information officers stating, ``with expenditures of over
$500 billion annually on contracts, and orders for goods and
services, the Federal Government has an obligation to conduct
our procurements in the most effective, responsible, and
efficient manner possible.'' Access to current market
information is critical for agency program managers as they
define requirements and for contracting officers as they
develop acquisition strategies, seek opportunities for small
businesses, and negotiate contract terms. Our industry partners
are often the best source of this information. So productive
interactions between Federal agencies and our industry partners
should be encouraged to ensure that the Government clearly
understands the marketplace and can award a contract or order
for an effective solution at a reasonable price. We must
streamline the DHS contracting process, find technologies that
work, and reduce the burden on the taxpayer.
[The statement of Mr. McCaul follows:]
Prepared Statement of Chairman Michael T. McCaul
As an oversight committee our job is to help reduce the cost of
Government. With our Nation's record debt approaching $15 trillion, we
need this now more than ever before.
One area of the Federal Government with great potential to reduce
this cost to taxpayers is the Department of Homeland Security (DHS)--
specifically in regard to its acquisitions of technology.
The Government Accountability Office (GAO) has identified
technology acquisition at DHS as an area of high risk, meaning DHS
programs have greater vulnerabilities to waste, fraud, abuse, and
mismanagement.
Today our objective is to examine whether DHS leverages emerging
technologies to accomplish its mission.
In other words, does it properly evaluate technology that is
already available? Or does it needlessly spend millions of taxpayer
dollars reinventing the wheel?
Unfortunately, we know the Department of Homeland Security has
already spent an enormous amount of money developing new technologies
only to find they don't work or there are off-the-shelf technologies
that could accomplish the same objectives.
Just yesterday, the Washington Post reported that DHS plans to
spend more than $300 million ``on radiation detection equipment that
has not been fully tested and may not work.'' The Post cites a DHS
budget request from the General Accounting Office.
Perhaps the most infamous example of this is the Secure Border
Initiative net (SBInet), initiated in 2006, which was in part designed
to be a surveillance system.
After expending nearly $1 billion DHS cancelled the program because
``SBInet has had continued and repeated technical problems, cost
overruns, and schedule delays, raising fundamental questions about
SBInet's ability to meet the needs for technology along the border.''
Compare the SBInet system to the U.S. Army's Rapid Aerostat Initial
Deployment (RAID) system.
RAID was initially deployed in Afghanistan in 2003 to protect U.S.
Forces. It is a combination of towers and aerostats--light-weight,
blimp-like aerial vehicles--which provide a persistent surveillance
system in support of intelligence and reconnaissance needs.
We realize the mission of the Department of Homeland Security
attempting to secure our borders is different from the Department of
Defense, however it seems to me the basic mission of the SBInet and
RAID are the same--to provide surveillance.
My question is: Did DHS examine RAID before attempting to develop a
brand-new surveillance system?
If so, what kept them from using the equipment? If not, what kept
them from discovering it?
I have personally been to the Texas-Mexico border to see
demonstrations of other forms of DOD surveillance technology that are
proven to have worked on the Afghanistan-Pakistan border.
This equipment already exists, the research and development would
not be duplicated, it is built at a fraction of the cost, and is
readily available. This could save taxpayers money and secure the
border much sooner than SBI's last predictions of 10-15 years from now.
The GAO has also criticized the development of SBInet concluding
DHS did not follow their own acquisition directives while developing
the program.
DHS had not approved key program documents until several years
after acquisition had begun and most importantly GAO found that
operational requirements for SBInet were unclear and unverifiable.
These types of mistakes cost taxpayers billions of dollars. But
there are other examples of how DHS could reduce costs to the taxpayer.
The Customs and Border Protection, Transportation Security
Administration and other agencies have purchased an average of $387
million of detection equipment in each of the last 3 years.
A March 2011 Inspector General audit found that DHS could save
taxpayer dollars and reduce duplication by coordinating and
consolidating purchases of metal detectors, explosive detection
systems, and radiation detectors for screening people, baggage, and
cargo.
At DHS, components are only encouraged but not required to leverage
contracts Department-wide to increase efficiencies.
Additionally, an April 2011 DHS Inspector General audit found that
10 of the 17 (59%) DHS programs reviewed were acquisitions in which
commercial-off-the-shelf equipment or existing contracts could have
fulfilled mission requirements.
As a result, administrative costs were increased without adding
value to the program. One of Secretary Napolitano's top priorities is
unifying the Department of Homeland Security and supporting a ``One
DHS'' policy.
Unfortunately the Secretary and this administration have failed to
coordinate and integrate acquisition functions Department-wide.
This has led to the failure of multiple acquisition programs and
the waste of millions of taxpayer dollars.
This administration needs to stop investing in high-risk
acquisition programs until they can effectively manage and oversee
them.
We have a recommended solution for DHS to save taxpayer dollars.
Follow the guidance provided by the Office of Management and Budget.
On February 11, 2011, the Office of Management and Budget sent out
a memorandum to Chief Acquisition Officers, Senior Procurement
Executives and Chief Information Officers stating:
``With expenditures of over $500 billion annually on contracts and
orders for goods and services, the Federal Government has an obligation
to conduct our procurements in the most effective, responsible, and
efficient manner possible. Access to current market information is
critical for agency program managers as they define requirements and
for contracting officers as they develop acquisition strategies, seek
opportunities for small businesses, and negotiate contract terms. Our
industry partners are often the best source of this information, so
productive interactions between Federal agencies and our industry
partners should be encouraged to ensure that the Government clearly
understands the marketplace and can award a contract or order for an
effective solution at a reasonable price.''
We must streamline the DHS contracting process, find technologies
that work, and reduce burdens on the taxpayer.
With that I recognize the Ranking Member of the subcommittee, the
gentleman from Massachusetts, Mr. Keating, for 5 minutes for the
purpose of making an opening statement.
Mr. McCaul. I also ask for unanimous consent that Mr.
Clarke from Michigan be able to sit here at the dais. Without
objection, so ordered. With that, now, I recognize the Ranking
Member of this subcommittee, the gentleman from Massachusetts,
Mr. Keating.
Mr. Keating. Thank you, Mr. Chairman. Thank you for having
this hearing on such an important issue. I also want to thank
Ranking Member of the Homeland Security Committee, Mr.
Thompson, for being here, and personally want to thank him for
our last hearing for assisting me at a time when I was engaged
in going to funeral services for a soldier in my district who
was killed in Iraq. Thank you.
I also want to welcome all our witnesses. I am particularly
pleased to have the Under Secretary of Management testifying
today. This is his first appearance before the subcommittee
this Congress. Welcome, and congratulations on your
confirmation.
As the chief architect of the Department's acquisition
strategy, I look forward to receiving his input on ways to
improve DHS contracting. Each year the Department spends
approximately one quarter of its annual budget on procurement,
making it one of the largest procurement agents in the entire
Federal Government. The Department's mission, to secure the
Nation from the many threats we face, spans an enormous amount
of room and sectors, including aviation, border security,
emergency response and importantly, cybersecurity. At the heart
of this mission is the need to develop and acquire leading and
innovative technologies that will keep our country ahead of our
enemies on every front. To make the system work, DHS
headquarters, DHS components, and the private sector must
coordinate and collaborate sharing of ideas and costs.
The Science and Technology Directorate, S&T, is responsible
for managing science and technology research, from development
through transition, for Department components and first
responders. Unfortunately, however, the Department components
have oftentimes looked beyond S&T to outside sources to fulfill
their needs, resulting in higher administrative costs. Since
the Department's inception, it has been included on the
Government Accountability Office's high-risk list, in part,
according to GAO, because of its acquisition process.
The Department is now in the process of implementing a new
method for managing its Department-wide acquisition strategy
and hopefully this will result in better decisions and greater
end-user involvement so that fiascoes like SBInet become a way
of the past.
I am, therefore, pleased to hear about this development.
However, I am concerned about S&T's use of other transaction
authority which is wide open for waste and abuse. The lack of
oversight that has plagued the Department's acquisition process
at S&T and other components and the difficulty the private
sector has when attempting to bring new technology and new
ideas to the Department. So I look forward to hearing from both
panels on this issue. I yield back the rest of my time.
Mr. McCaul. The Chair now recognizes the Ranking Member of
the full committee, the gentleman from Mississippi, Mr.
Thompson.
Mr. Thompson. Thank you very much, Mr. Chairman, for
convening this hearing. We are here to discuss contracting at
the Department of Homeland Security and the manner in which it
leverages emerging technology. In fiscal year 2010, the
Department spent more than $13 billion on more than 88,000
procurement actions. While the vast majority of these were
subject to traditional rules and regulations governing Federal
contracts, some were not. The Homeland Security Act of 2002
granted the Department's Science and Technology Directorate, or
S&T, with the ability to use other transaction authority, or
OTA. In 2012, S&T spent over $11 million on just 10
transactions using this special authority. What troubles me
about OTA is that Federal rules and laws that were created to
protect businesses, taxpayers, and the Federal Government from
waste, fraud, and abuse do not apply.
Most notably, the Federal Acquisition Regulation, or FAR,
which serves as the benchmark for how the Federal Government
does business and ensures integrity, fairness, and openness is
nonexistent. The same is true for the Anti-Kickback Act, the
Small Business Act, the Procurement Integrity Act, and Buy
America, to just name a few. While the freedoms associated with
OTA may attract more businesses to S&T, it also carries
significant risk for the Federal Government that may outweigh
its benefits.
In September 2011, the expiration date for the Department's
ability to use OTA is just 2 months away. I will therefore use
this hearing, along with additional oversight by the committee,
to determine where I will stand on the sunset. I am also
concerned about both the management and S&T budgets that the
Republican Majority recently passed in the House in the form of
H.R. 1. H.R. 1 will slash S&T's budget by 61 percent below the
President's fiscal year 2012 request, and 42 percent below the
fiscal year 2011 levels. The damage done by these cuts will set
a significant impact on S&T and perpetuate the Majority's
insistence that the Department adequately fulfill its mission
with inadequate funding.
I look forward to hearing from the witnesses on the impact
of these cuts. Lastly, Mr. Chairman, in the 111th Congress, the
House passed an S&T authorization bill introduced by my
colleague, Congresswoman Clarke from New York. This bill
strengthened S&T's policies, especially its acquisition
framework. I look forward to receiving bipartisan support in
this Congress in making that bill law. With that, I yield back
the balance of my time.
Mr. McCaul. I thank the gentleman. Other Members of the
subcommittee may submit opening statements for the record. We
have a distinguished panel of witnesses here today, and I would
like to make my introductions and then hear the testimony.
First, Mr. Charles Edwards assumed the position of Acting
Inspector General of the Department of Homeland Security in
February of this year, adding to over 20 years of experience in
the Federal Government. Prior to this position, Mr. Edwards
served as Deputy Inspector General of the Department of
Homeland Security. Thank you so much for being here today.
Next, Mr. David Maurer is the Director in the U.S.
Government Accountability Office's Homeland Security and
Justice Team, where he leads reviews of DHS and DOJ management
issues. Previously, Mr. Maurer served as acting director in the
GAO's Natural Resource and Environmental team, managed and led
work in GAO's International Affairs and Trade Team, and was
also detailed on the House Committee on Appropriations.
Next, Mr. Rafael Borras currently serves as the Under
Secretary for Management at the Department of Homeland
Security, where he oversees management of the Department's
budget appropriations, expenditure of funds, accounting, and
finance. Prior to his appointment with the Department, Mr.
Borras served as vice president with the URS Corporation, a
global engineering and services firm. He also served as deputy
assistant secretary for administration in the U.S. Department
of Commerce. He has great experience. Welcome here today, Mr.
Borras.
Finally, Dr. Tara O'Toole was sworn as Under Secretary of
Science and Technology, or S&T, Directorate at the Department
of Homeland Security in November 2009. Prior to serving at S&T,
Dr. O'Toole was the CEO and director of the Center For
Biosecurity at the University of Pittsburgh Medical Center, and
professor of medicine and of public health at the University of
Pittsburgh from 2003 to 2009. Dr. O'Toole was also one of the
original members of the Johns Hopkins Center For Civilian
Biodefense Strategies, serving as its director from 2001 to
2003.
Welcome, and thank you so much for being here, Dr. O'Toole.
So with that, the Chair now recognizes Mr. Edwards for his
statement.
STATEMENT OF CHARLES K. EDWARDS, ACTING INSPECTOR GENERAL, U.S.
DEPARTMENT OF HOMELAND SECURITY
Mr. Edwards. Good morning, Chairman McCaul, Ranking Members
Thompson and Keating, and distinguished Members of the
subcommittee. I am Charles K. Edwards, acting inspector general
for the Department of Homeland Security, DHS. Thank you for
inviting me today to testify about DHS contracting and
acquisition policies. Acquisitions consume a significant part
of DHS annual budget and are fundamental to the Department's
ability to accomplish its mission. Acquisition management is a
complex process that goes beyond simply awarding a contract. It
begins with the identification of the mission need and
continues with the strategy to fulfill that need while
balancing cost, schedule, and performance.
My testimony today will focus on the findings in two
recently completed audit reports, the Department-wide
management of the detection equipment and DHS oversight of
component acquisition programs. Our audit regarding the
Department-wide management of the detection equipment revealed
that DHS has eight different procurement officers that purchase
detection equipment, including metal detectors, explosive
detection systems, and radiation detectors.
While DHS has applied strategic sourcing strategies for
many common-use items such as firearms, ammunition, and office
supplies, the Department is not using strategic sourcing to
manage its purchase of detection equipment. Components are
encouraged but not required to use the strategic sourcing
program, and they generally do not coordinate and communicate
with each other when acquiring detection equipment. In addition
to the lack of communication among components, some components
did not standardize their own equipment purchases for similar
missions.
For example, USCIS has 24 and CBP has 21 different models
of small X-ray equipment. CBP and USCIS each have 14 different
models of walk-through metal detectors to meet similar
screening missions. As a result of these findings, we
recommended that the Department put a mechanism in place for
components to standardize purchases of similar detection
equipment and identify common mission requirements. Increased
coordination would offer DHS opportunities to streamline the
acquisition process and improve efficiencies. Our report on DHS
oversight of component acquisition programs identified other
improvements that can be made to the acquisition process. After
reviewing the Department's oversight of programs at or about
300 million, we concluded that while DHS generally had
management oversight and controls in place, it needs to further
refine policies and strengthen oversight. We identified two
general areas for improvement, clearer guidance and mandated
use of available tools.
We found that components needed clear guidance for
determining when an acquisition was costly and complicated
enough to be managed as an acquisition program or when the
acquisition could be handled as a simple procurement. We
recommended that the Department create a decision matrix that
the components can apply in pre-planning phases of the
purchasing process in order to reduce this confusion. Regarding
the components' use of available tools our recommendation
focused on two areas, the Next Generation Periodic Reporting
System, or nPRS, and the Strategic Sourcing Program Office, or
SSPO.
nPRS is an integrated system that allows the Department to
track component acquisition investments. For the 17 acquisition
programs we reviewed, we found the components were not
completing and reporting all key information in nPRS. Moreover,
some components have their own data tracking systems in place
of nPRS. We recommended that the Department mandate the use of
nPRS for all acquisition programs and issue improved guidance
regarding nPRS reporting. We also recommended that the
Department offer clearer guidance regarding the use of SSPO.
We concluded that the Department may be incurring increased
costs for component procurement, or components may be
conducting the same market research for procurement. We
recommended that the Department make sure component personnel
are at least considering the use of SSBO, the general services
administration schedule and the Department-wide contracts
during the planning stages of these acquisitions.
In conclusion, the Department has made considerable
progress in establishing its acquisition management practices
and procedures. Through improved guidance to the components and
increased use of tools like strategic sourcing, the Department
will continue to improve its acquisition processes. Chairman
McCaul, this concludes my prepared remarks and I will be happy
to answer any questions that you or other Members may have.
Thank you.
[The statement of Mr. Edwards follows:]
Prepared Statement of Charles K. Edwards
July 15, 2011
Good morning Chairman McCaul, Ranking Member Keating, and
distinguished Members of the subcommittee: I am Charles K. Edwards,
Acting Inspector General of the Department of Homeland Security (DHS).
Thank you for inviting me to testify today about the Department's
contracting and acquisition policies.
As you know, the DHS Office of Inspector General (OIG) was
established in January 2003 by the Homeland Security Act of 2002 by
amendment to the Inspector General Act of 1978. The DHS OIG seeks to
promote economy, efficiency, and effectiveness in DHS programs and
operations and reports directly to both the DHS Secretary and the
Congress. We fulfill our mission primarily by issuing audit,
inspection, and investigative reports that include recommendations for
corrective action, and by referring cases to the United States Attorney
General for prosecution.
I am pleased to have the opportunity to testify about two of our
audit reports today. I will describe some of the serious challenges
facing DHS in acquisition management, the steps DHS has taken, and its
progress, in addressing those challenges, as well as provide details
regarding further improvements the Department can make, specifically in
its oversight of components' acquisition programs and acquisition of
detection equipment.
background
Acquisitions consume a significant part of the Department of
Homeland Security's annual budget and are fundamental to the
Department's ability to accomplish its mission. In fiscal year 2010,
DHS awarded over $13 billion for more than 88,000 procurement actions.
The Under Secretary for Management (USM) is responsible for the
overall DHS acquisition process. As the Department's Chief Acquisition
Officer, the USM is responsible for managing, administering, and
overseeing the Department's acquisition policies and procedures. The
USM delegates the responsibility for effective Department-wide
procurement policies and procedures, including procurement integrity,
to the Chief Procurement Officer (CPO). The Office of the CPO (OCPO) is
responsible for oversight of most DHS acquisition activities and
services, including management, administration, and strategic sourcing,
and excluding financial assistance activities. OCPO responsibilities
also include developing and publishing Department-wide acquisition
regulations, directives, policies, and procedures.
The USM also delegates the responsibility for developing and
implementing the governance processes and procedures for program
management over DHS' various acquisition programs to the Acquisition
Program Management Division (APMD). Separation of the OCPO procurement
management responsibilities for acquiring goods and services and APMD's
program management of the acquisition process provides a layered
approach to DHS' acquisition oversight.
steps taken by dhs to improve its acquisitions management
In 2003, the Government Accountability Office (GAO) listed
implementing and transforming the Department of Homeland Security on
its high-risk list.\1\ GAO stated that the Department's efforts to
integrate 22 independent agencies into a single department was an
``enormous undertaking,'' partly because many of the major components
faced at least one management problem, including financial management
vulnerabilities. In a 2011 update, GAO noted that acquisition
management weaknesses have prevented major programs from meeting
capability, benefit, cost, and schedule expectations.\2\ To address
management challenges, GAO recommended ``validating key acquisition
documents during the acquisition review process.''\3\
---------------------------------------------------------------------------
\1\ GAO-03-119, High Risk Series: An Update (Jan. 2003). GAO
maintains a program to identify Government operations that are high
risk due to greater vulnerabilities to fraud, waste, abuse, and
mismanagement or the need for transformation to address economy,
efficiency, or effectiveness. Since 1990, GAO has designated over 50
areas as high risk and subsequently removed over one-third of the areas
due to progress made.
\2\ GAO-11-278, High-Risk Series: An Update (Feb. 2011), p. 93.
\3\ Id., 33-34.
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In September 2005, we published a report identifying significant
weaknesses that threatened the integrity of the Department's
procurement and program management operations.\4\ We made five
recommendations to address the vulnerabilities in the Department's
acquisition operations. DHS concurred with all five recommendations and
agreed to move ahead with expanded procurement ethics training,
enhancement of oversight, and establishment of a Departmental program
management office to address procurement staff shortages and staff
authority. Since our 2005 report, DHS has implemented management
directives and organizational changes, and developed acquisition
training programs intended to identify inefficiencies in the
acquisition process and prevent procurement ethics violations.
---------------------------------------------------------------------------
\4\ OIG-05-53, Department of Homeland Security's Procurement and
Program Management Operations (Sept. 2005).
---------------------------------------------------------------------------
In November 2008--recognizing the continued increase in the
quantity and complexity of DHS acquisitions--the Chief Acquisition
Officer classified acquisitions into three levels to define the extent
and scope of required project and program management and the specific
official who serves as the Acquisition Decision Authority. For level 1
acquisitions (greater than or equal to $1 billion), the Acquisition
Decision Authority is at the Deputy Secretary level. For level 2
acquisitions, ($300 million to $1 billion), it is the Chief Acquisition
Officer. For level 3 acquisitions (less than $300 million), the
Acquisition Decision Authority is at the Component Head level.
Acquisition Management Directive 102-01, Revision No. 1 (Directive 102-
01), also identifies specific alternate Acquisition Decision
Authorities for each level.
Figure 1 is an overview of the actions DHS has taken since 2005 to
improve its acquisition program.
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
While the Department has taken these and other significant steps to
improve its acquisition oversight processes and controls, our report
OIG-11-71, DHS Oversight of Component Acquisition Programs (April 2011)
identified additional areas for improvement, including improved
guidance to components regarding their use of the next Generation
Periodic Reporting System (nPRS), an integrated system that provides
visibility to the Department to track components' level 1, 2, and 3
acquisition investments.
additional dhs oversight needed for component acquisition
In DHS Oversight of Component Acquisition Programs, we recognized
that the Department has made improvements to its acquisition oversight
processes and controls through implementation of a revised acquisition
management directive. However, the Department needs to provide
additional detailed guidance and improve controls in some areas. The
Department has not fully defined an acquisition program for its
components, or developed consistent guidance for reporting acquisitions
in its standard system. In addition, the Department did not ensure that
components were using all acquisition tools available and that all
components had adequate policies and procedures in place to manage
acquisition programs.
As a result, components created program management offices to
manage simple procurements, incurring unnecessary administrative
program costs without adding value to the programs. Additionally,
without adequate controls in place, the Department did not have
complete visibility of all programs within its acquisition portfolio.
Unclear Guidance
The Department has not fully defined when a component should manage
an acquisition under the requirements of the Acquisition Lifecycle
Framework or manage it as a simple procurement. We found that many
components were committed to following the Department's guidance but
needed more structure for determining when to establish a program to
acquire a product or service. We requested a list of all programs from
each component and received numerous questions and conflicting
responses.
Directive 102-01, which prescribes guidance over the Acquisition
Review Process, Acquisition Lifecycle Framework, and Acquisition Review
Board, establishes the overall policy and structure for acquisition
management within the Department. But the directive does not provide a
decision-making tool to determine if an acquisition warrants the higher
level of internal controls required by the Acquisition Lifecycle
Framework. The supplemental Acquisition Instruction/Guidebook 102-01-
001 (Guidebook) provides detailed instructions on implementing and
managing acquisitions, but also does not provide clear instruction for
determining if an acquisition should become an acquisition program, and
in attempts to comply with the directive, components over classified
programs.
For example, the Federal Law Enforcement Training Center (FLETC) is
automating many of its manual processes, such as student registration,
class scheduling, planning and forecasting, and student records. The
estimated total life cycle cost of this automation is approximately $30
million. FLETC personnel contracted out all of the requirements for the
program, including requirements analysis, development, and maintenance
of an automated system that used commercial off-the-shelf (COTS)
equipment and custom software applications. Because of the unclear
instructions, instead of creating a simple procurement, FLETC created
an acquisition program that may have unnecessarily increased program
management administrative cost.
We reviewed several acquisition programs that do not clearly fit
into the Acquisition Lifecycle Framework process. Ten of the 17 (59%)
programs we reviewed, with an estimated life cycle cost of about $5.3
billion, were acquisitions that identified COTS equipment or existing
contracts to fulfill the needs identified by the program office.
Component personnel likely could have managed these as simple
procurements rather than acquisition programs.
For example, the Transportation Security Administration (TSA)
classified renovation of an existing warehouse building as an
acquisition program. It leased the 104,000-square-foot building in 2003
and renovated approximately 89,000 square feet for about $42 million
over the initial 10-year leasing period. In 2008, TSA primarily relied
on existing contracts to complete 12,500 of the remaining 15,000 square
feet of the warehouse building. According to TSA personnel, the
renovation for the additional 12,500 square feet cost about $2.5
million, with construction completed in January 2010. For this small
renovation project, TSA personnel could have used simple procurement
rules but instead increased administrative costs by implementing the
more complicated internal control structure prescribed in Directive
102-01.
Based on the definition of an acquisition program in the Guidebook,
this renovation could possibly be an acquisition program. However,
based on the processes and procedures laid out in Directive 102-01's
Acquisition Life Cycle Framework and Acquisition Review Process, this
renovation does not meet the intentions of the existing guidance or
present a high enough level of risk to warrant the increased costs of
being managed as a program.
Components should not create acquisition programs for acquiring
products and services that are outside the intent and spirit of
Directive 102-01. The Department can reduce some of the conflicts at
the component level by developing a decision matrix that the components
can apply in the pre-planning phases of the purchasing process.
Use of Available Tools
The APMD and the Office of the Chief Information Officer developed
and currently maintain nPRS. nPRS is an integrated system that provides
DHS headquarters visibility of components' level 1, 2, and 3
acquisition investments. It can also store working and approved key
acquisition documents, earned value management information, and risk
identification. Component personnel are responsible for entering and
updating information regarding their acquisition programs in nPRS. This
information includes, but is not limited to, cost, budget, performance,
and schedule data. Tools available within nPRS include the following:
Current and previous contract award data with earned value
management;
Previous, current, and future budget and funding;
Cost, schedule, and performance status based on Acquisition
Program Baseline parameters;
Information technology program milestone schedule and cost
variances;
Acquisition Decision Memorandum forms that track action
items issued by the Acquisition Review Board;
Key documents approved by DHS headquarters or components,
such as the Mission Needs Statement, Acquisition Plan, and
Acquisition Program Baseline.
The Department has not ensured or mandated that components use all
available tools and supporting programs, including nPRS, to provide
transparency and efficiency of component acquisition programs. As a
result, some components have developed systems comparable to nPRS.
According to APMD personnel, nPRS allows components to create a
copy of nPRS software and integrate it to meet their needs. The copy,
which is called the nPRS Sandbox, allows the components to duplicate
the nPRS software and to use the already developed nPRS as their
oversight tool for draft documents and approval of documentation and
earned value management, as well as cost and schedule status. The
component's Sandbox copy of nPRS is not visible by DHS headquarters or
other components because nPRS restricts access to authorized users. As
of July 2010, TSA, the Federal Emergency Management Agency (FEMA), and
the DHS Chief Financial Office had requested use of the nPRS Sandbox
feature.
Component personnel have developed, or are in the process of
developing, their own data-tracking systems because the Department has
not consistently mandated use of nPRS or its tools. For example:
TSA hired and spent approximately $100,000 for a contractor
in 2005 to develop the TSA Acquisition Program Status Report,
which served as its data-tracking system. As of June 2010, TSA
had merged its acquisition program portfolio, levels 1, 2, and
3, into nPRS and will no longer use the TSA Acquisition Program
Status Report. As of August 2010, nPRS is TSA's official
tracking system for acquisition programs.
FEMA, Customs and Border Protection (CBP), Immigration and
Customs Enforcement (ICE), and U.S. Secret Service (USSS) use
internally developed systems based on software programs such as
Microsoft SharePoint.
CBP personnel were in the process of developing an
additional database to track acquisitions throughout the
Acquisition Life Cycle Framework. We were not able to determine
the cost of this tracking database. According to CBP personnel,
the database development was a verbal agreement between CBP
personnel and the contractor. The statement of work under which
the contractor was performing other work for CBP did not
contain any mention of the verbal agreement.
The USM has not consistently mandated and ensured that components
use nPRS for all level 1, 2, and 3 acquisition programs.
Inconsistent Reporting
In addition to the fact that not all components use nPRS for all
level 1, 2, and 3 acquisition programs, the information entered into
nPRS was not reported consistently. For the 17 acquisition programs we
reviewed, with an estimated life cycle cost of about $9.6 billion, we
found that components were not completing and reporting all key
information in nPRS. Component personnel reported 16 of the 17 programs
reviewed (94%) into nPRS; however, despite detailed nPRS guidance, not
all reports contained the required information. For example, only 7 of
17 programs (41%) reported Acquisition Program Baseline required
milestones, which establish the overall acquisition cost, schedule, and
performance values. Only 13 (76%) programs reviewed contained required
key documentation. Key documents include the mission needs statement,
acquisition plan, operational requirements document, integrated
logistics support plan, and the acquisition program baseline.
Since nPRS became operational in 2008, the Department has issued
conflicting guidance and enforcement for reporting level 1, 2, and 3
acquisition programs. The conflicting verbal and written guidance
confused component personnel, who were not sure whether to report all
acquisition programs or only level 1 and 2 programs.
In May 2010, the USM issued a list of major acquisition programs
that identified 86 level 1 and 2 acquisition programs and elevated some
level 3 acquisition programs for Departmental oversight. According to
APMD personnel, the USM and components jointly create the major
acquisition program and project list. The APMD obtains information from
nPRS and requests updated information from the components regarding
their current number of acquisition programs. Once APMD personnel
receive the information, they create the final list and the USM signs
and issues the new list.
As of July 2010, we identified six acquisition programs listed by
the USM not reported in nPRS. We also identified five level 1 and 2
acquisition programs reported in nPRS but not by the USM. When we asked
USM personnel about the differences, they said that the differences
were due to timing issues. However, we were not able to verify this.
Table 1 compares the list of acquisition programs in the May 2010 USM
memo with the nPRS database as of July 2010.
TABLE 1.--ACQUISITION PROGRAM REPORTING SYSTEM INCONSISTENCIES
------------------------------------------------------------------------
USM Memo--May 2010 nPRS Database--July 2010
------------------------------------------------------------------------
Consolidated Mail System Program.......... No Entry.
Electronic Records Management System...... No Entry.
St. Elizabeth's........................... No Entry.
National Security System Program.......... No Entry.
Online Tracking Information System........ No Entry.
Federal Protective Services............... No Entry.
No Entry.................................. Critical Infrastructure
Technology and Analysis.
No Entry.................................. CBP--Infrastructure.
No Entry.................................. FEMA--Infrastructure.
No Entry.................................. ICE--Infrastructure.
No Entry.................................. USSS--Infrastructure.
------------------------------------------------------------------------
To identify the number of acquisition programs in the Department,
we requested a list of all programs from nPRS, but the USM could
provide only level 1 and 2 acquisition programs. In March 2010, we
asked the components to provide us with a list of all level 1, 2, and 3
acquisition programs so we could gain a complete inventory of
acquisition programs throughout the Department. Though we understand
that there may be differences due to timing of our data reviews, the
USM needs to make sure that components are consistently reporting all
acquisition programs into the standard system. In July 2010, we
obtained our last data from nPRS that showed progress regarding the
number of level 3 acquisition programs components entered in the
system. However, nPRS still does not reflect half of the total number
of level 3 programs components reported outside nPRS.
In sum, the Department does not always know what is in its
acquisition portfolio because of the conflicting written and verbal
guidance provided to the components. The USM has not ensured that
components report all level 1, 2, and 3 acquisition programs in nPRS,
which hinders its ability to have complete visibility into component
acquisition programs. By mandating use of nPRS for all acquisition
programs, the USM would have visibility into components' acquisition
programs and could provide better oversight for its acquisition
portfolio.
We made four recommendations to the Chief Procurement Officer to
strengthen management oversight and controls of component acquisition
programs. The Chief Procurement Officer agreed with our recommendations
and initiated corrective actions.
department-wide management of detection equipment
Our recent audit report, OIG-11-47, DHS Department-wide Management
of Detection Equipment (March 2011), highlighted some of the
acquisition challenges facing the Department when multiple components
have similar requirements or are buying the same type of equipment. We
identified steps the Department can take to improve its acquisition
processes. With improved management, DHS can streamline the acquisition
process, improve efficiencies, and provide uniform equipment inventory
information.
DHS has eight different procurement offices that purchase detection
equipment. Seven of these offices are at the component level, and each
has its own head of contracting. These components are as follows:
CBP
FEMA
FLETC
ICE
Office of Procurement Operations \5\
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\5\ In 2004, the Department created the Office of Procurement
Operations to provide acquisition services to components that did not
have a procurement office.
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TSA
United States Coast Guard (USCG)
USSS.
Components maintain separate inventories for their detection
equipment. For fiscal year 2010, the components had a combined
inventory of more than $3.2 billion worth of detection equipment, most
of which is deployed. The components purchased an average of about $387
million worth of detection equipment in each of the last 3 years,
ranging from about $280 million to $511 million. This equipment
includes metal detectors, explosive detection systems, and radiation
detectors (including some personal protective safety equipment) for
screening people, baggage, and cargo at airports, seaports, and land
ports of entry, as well as Federal buildings.
Our audit work showed that DHS can better manage the acquisition of
detection equipment by developing processes based on best practices
such as strategic sourcing and developing standard data requirements
and nomenclature for inventory management.
Strategic Sourcing
According to a 2005 memorandum from the Office of Management and
Budget:
``Strategic sourcing is the collaborative and structured process of
critically analyzing an organization's spending and then using this
information to make a business decision about acquiring commodities and
services more effectively and efficiently. This process helps agencies
optimize performance, minimize price, increase achievement of socio-
economic acquisition goals, evaluate total life cycle management costs,
improve vendor access to business opportunities, and otherwise increase
the value of each dollar spent.''\6\
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\6\ Office of Management and Budget memorandum to Chief Acquisition
Officers, Implementing Strategic Sourcing (May 20, 2005).
DHS has established a Strategic Sourcing Program and has applied
strategic sourcing strategies for many common use items, such as
firearms, ammunition, and office supplies; however, the Department is
not managing its detection equipment through this program. According to
DHS officials, components are encouraged but not required to use the
Strategic Sourcing Program and generally do not coordinate and
communicate when acquiring detection equipment. There is no mechanism
in place for components to standardize equipment purchases or identify
common mission requirements among components. For example, the
Department's Joint Requirements Council is inactive, and components do
not have the expertise of commodity councils or single-item managers to
rely on when acquiring detection equipment. Further, components view
detection equipment as unique to their missions and do not attempt to
identify common mission requirements among other components. This
results in numerous inefficient purchases by individual components
instead of consolidated purchases.
Standardizing Equipment Purchases
Some components did not standardize equipment purchases and
purchased a variety of different detection equipment models. For
example, United States Citizenship and Immigration Services (USCIS) has
24 and CBP has 21 different models of small X-ray equipment, and CBP
and USCIS each have 14 different models of walk-through metal
detectors. When components have multiple models of equipment to meet
similar missions, DHS incurs higher procurement administrative costs
and logistic support costs for maintenance, training, and support. In
contrast, TSA, which uses and maintains the largest inventory of
detection equipment in the Department, uses only seven different models
of small X-ray equipment and three models of walk-through metal
detectors. By limiting the number of models and types of equipment, TSA
is in a position to increase efficiencies in procurement, maintenance,
and personnel flexibilities.
Common Mission Requirements
We identified about $170 million worth of small X-ray machines,
metal detectors, and personal and hand-held radiation detectors that
DHS could acquire through strategic sourcing strategies. Although
multiple components were using similar equipment to meet similar
screening missions, each component purchased the equipment separately.
Components did not coordinate with each other to identify common
requirements, consolidate purchases to gain buying power, or
consolidate logistic support requirements.
DHS Management Directive 1405 (September 2003) established a Joint
Requirements Council (JRC) as a senior-level requirements review board
to identify cross-cutting opportunities and common requirements among
DHS organizational elements for non-information technology investments.
The JRC met periodically between fiscal years 2004 and 2006.
Representatives on the JRC reviewed programs and processes for
potential mission overlap and redundancies. Among the programs reviewed
were TSA's Secure Flight and Registered Traveler and CBP's Consolidated
Registered Traveler programs. In 2006, the JRC stopped meeting after
the Department assigned the council chair to other duties. However, DHS
now recognizes the importance of the JRC and indicated that it might
revive the council or pursue another alternative to identify duplicate
programs and processes across the Department. This undertaking should
include an effort to identify common data elements and nomenclature
within inventories and to establish a data dictionary for the
Department's detection equipment.
In addition to the JRC, commodity councils are an integral element
of developing an effective strategic sourcing program. Commodity
councils include representatives from across the organization. The
members act as the subject matter experts in the acquisition process
and in establishing requirements for a specific commodity or service.
Generally, the component purchasing the largest quantity of a
particular item takes the lead role in acquiring the commodity or
service and may serve as that commodity's single-item manager.
DHS and other Federal agencies use the commodity council concept.
For example, in 2003, DHS established the Weapons and Ammunition
Commodity Council to create a Department-wide strategy for
consolidating requirements and gaining economies of scale for the
acquisition of weapons and ammunition. The council, which includes
representatives from each component that uses weapons, developed
requirements for firearms, ammunition, and body armor. ICE took the
lead role, using service-level agreements with other components to
establish one overall contract, which is available to all DHS entities.
Inventory Data
DHS inventory systems do not use standard inventory data elements
and standard nomenclature for similar detection equipment. Currently,
DHS is unable to view consolidated inventory information on detection
equipment and must rely on data calls to determine its inventory,
including type, model, and value of equipment on hand. Each component
manages its inventory through eight separate asset management inventory
systems that do not interface, are not compatible, and do not use
standardized data descriptions or nomenclature based on a uniform data
dictionary. DHS does not have a mechanism in place to identify and
assign common data elements to these inventory systems. Without a
common data dictionary based on common data elements and nomenclature,
the Department is not able to efficiently verify the on-hand balances.
As a result, the Department may not be able to evaluate its detection
equipment requirements and develop a disciplined logistics function to
manage its detection equipment.
A GAO report, Framework for Assessing the Acquisition Function at
Federal Agencies, emphasizes data stewardship as a critical success
factor in managing information systems.\7\ It identifies the need for
consistency among data definitions, sources, controls, and edits
routines as a best practice.
---------------------------------------------------------------------------
\7\ GAO-05-218G, September 2005.
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Seven of DHS' asset management inventory systems, however, are
legacy systems. DHS implemented the eighth system for headquarters and
those components that did not have an internal procurement function.
The component legacy systems support the respective components and
continue to operate in stovepipes without interfacing with other
components. Headquarters relies on data calls from each component to
gather Department-wide inventory information.
As part of our audit on detection equipment acquisition, the
components provided us with detection equipment inventories in response
to a data call. The information provided was in nonstandard formats,
and data elements and nomenclature were not standardized. CBP sent
32,000 lines of data, with some entries dated as early as 1940, but its
original submission still did not include all detection equipment on
hand and required a follow-up request to obtain a complete universe.
Unless DHS establishes a uniform or common data dictionary, the
categories and data descriptions will vary among the components and the
Department cannot be sure that the inventory data it relies on are
complete and accurate. For example:
``One component categorized an explosive detection device as `detection
equipment,' another categorized it as `security equipment,' while
another categorized it using specific equipment names, with the
nomenclature including the name of the individual assigned the
equipment.''
To establish control, oversight, and visibility of the component
inventories and until DHS deploys an integrated system; DHS needs to
establish a common data dictionary to standardize data elements across
component and headquarters systems. Establishing an inventory data
dictionary will assist DHS in developing strategic sourcing strategies
and support greater efficiencies in its detection equipment
inventories.
The Department has agreed in principle with our two
recommendations, and is taking action to implement the recommendations.
DHS is evaluating reestablishing the Joint Requirements Council and
other alternatives to achieve the same goal. It will perform a business
case analysis of detection equipment and establish a commodity council
or working group if it determines that this equipment can be
strategically sourced.
conclusion
DHS, established by combining 22 agencies with different legacy
systems, missions, and cultures, has made considerable strides in
establishing its acquisition management practices and procedures. It
has established oversight policies, clarified roles and
responsibilities for acquisition, and worked to address staff
shortages. It needs to continue improvements that affect its cohesion
as a Department and its bottom line. Increased use of tools such as
strategic sourcing and a commonly applied definition of an acquisition
program will help the components work together to leverage resources.
Mr. McCaul. Thank you, Mr. Edwards.
The Chair now recognizes Mr. Maurer for his testimony.
STATEMENT OF DAVID C. MAURER, DIRECTOR, HOMELAND SECURITY AND
JUSTICE TEAM, GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Maurer. Good morning, Chairman McCaul, Ranking Member
Keating, other Members and staff. I am pleased to be here today
to discuss DHS' challenges and progress in developing and
acquiring new technologies to meet homeland security needs.
Let's be clear. DHS has struggled to deploy new technologies.
Drawing on years of work, we have identified three key steps
DHS should take before spending millions or billions on new
systems. First, ensure programs have clear requirements that
can be met and are met. Second, complete testing and evaluation
to ensure new technologies work in real-world situations.
Third, conduct cost-benefit analysis to ensure that taxpayer
dollars are buying systems that improve homeland security
capabilities.
In recent years we have found that DHS has not always done
this and, as a result, DHS ends up taking risks that multi-
billion dollar programs may not deliver their expected
benefits. For example, earlier this week, we reported that TSA
faces significant challenges ensuring that systems to detect
explosives in checked baggage meet the latest requirements. It
took TSA 4 years to begin deploying systems that met enhanced
requirements set in 2005. We also found that TSA lacks an
overall plan to ensure the deployed systems meet requirements
that were further enhanced in 2010. As a result, after spending
over $8 billion since 2001 to improve checked baggage
screening, it remains unclear how long it will take and how
much more it will cost to ensure systems meet requirements.
This March we reported on DHS' on-going efforts to deploy a
virtual fence along the Southwest border. We found that DHS
made key decisions without completing an independent evaluation
of system operational effectiveness and suitability. DHS
developed plans to build on existing technology from the $1.5
billion SBInet program before completing an assessment of how
well that technology works. In addition, our preliminary review
raised questions about DHS' assessment of the cost
effectiveness of a range of border technology options. We are
currently reviewing DHS' efforts to obtain and deploy border
security technologies and expect to report our findings in the
fall. We have also found significant problems with DHS' efforts
to develop and deploy the advanced spectroscopic portal
monitor, or ASP. DHS believes ASPs would do a better job
detecting radiation than the equipment currently deployed on
the Nation's borders at an estimated cost of over $2 billion.
However, among other things, we found that DHS overestimated
how well ASPs worked and underestimated the cost to develop and
deploy the technology. In short, it wasn't clear the program
would improve DHS' primary radiation screening capabilities. As
a result, in February 2010, the Secretary scaled back plans for
the number of ASPs DHS would purchase and how they would be
used.
Now, when you hear examples like this, it's important to
remember why DHS presses the envelope. DHS faces a constant
balancing act between immediate mission needs and the need to
make sound, informed decisions following processes that are not
designed for speed. The good news is that DHS is taking actions
to address these problems. Over the past several months, DHS
has issued new policies for acquisition and testing and
evaluation, implemented a reorganization of the Science and
Technology Directorate, and developed plans to revamp DHS'
overall approach to investment decision making. These changes
in plans show a clear commitment from Department leadership to
take these problems head-on.
Just yesterday, we issued a report on S&T's roles ensuring
DHS acquisition programs are independently tested and
evaluated. We reviewed 11 major acquisition programs and found
that S&T has generally been meeting its oversight requirements
and acting as an honest broker in the acquisition process. In
addition, last month, DHS updated its on-going efforts to
improve how it makes and implements investment and acquisition
decisions. Among other things, their latest plan calls for the
management directorate and S&T to work together to ensure new
technologies meet requirements, and critical mission needs are
tested before use and have demonstrable benefits that were
worth the cost.
In short, there are encouraging signs that things are
changing for the better, but it is still too early to tell. In
many instances, DHS needs to turn plans into concrete action
that clearly demonstrates the Department is meeting
requirements, testing before buying, and delivering benefits
within promised costs and time frames. By doing so, DHS makes
it more likely that multi-million or multi-billion dollar
programs will be delivered on time, within budget, and capable
of meeting critical mission needs. Mr. Chairman, thank you for
the opportunity to testify this morning. I look forward to your
questions.
[The statement of Mr. Maurer follows:]
Prepared Statement of David C. Maurer
July 15, 2011
GAO-11-829T
Chairman McCaul, Ranking Member Keating, and Members of the
subcommittee: I am pleased to be here today to discuss our past work
examining the Department of Homeland Security's (DHS) progress and
challenges in developing and acquiring new technologies to address
homeland security needs. DHS acquisition programs represent hundreds of
billions of dollars in life cycle costs and support a wide range of
missions and investments including border surveillance and screening
equipment, nuclear detection equipment, and technologies used to screen
airline passengers and baggage for explosives, among others. Since its
creation in 2003, DHS has spent billions of dollars developing and
procuring technologies and other countermeasures to address various
threats and to conduct its missions. Within DHS, the Science and
Technology Directorate (S&T) conducts general research and development
and oversees the testing and evaluation efforts of DHS components,
which are responsible for developing, testing, and acquiring their own
technologies. For example, the Transportation Security Administration
(TSA) is responsible for securing the Nation's transportation systems
and, with S&T, researching, developing, and deploying technologies to,
for example, screen airline passengers and their baggage. U.S. Customs
and Border Protection (CBP) is responsible for implementing measures
and technologies to secure the Nation's borders. In recent years, we
have reported that DHS has experienced challenges in managing its
multibillion-dollar acquisition efforts, including implementing
technologies that did not meet intended requirements and were not
appropriately tested and evaluated, and has not consistently included
completed analyses of costs and benefits before technologies were
implemented.
My testimony today focuses on the key findings of our prior work
related to DHS's efforts to acquire and deploy new technologies to
address homeland security needs. Our past work has identified three key
challenges: (1) Developing technology program requirements, (2)
conducting and completing testing and evaluation of technologies, and
(3) incorporating information on costs and benefits in making
technology acquisition decisions. This statement will also discuss
recent DHS efforts to strengthen its investment and acquisition
processes.
This statement is based on reports and testimonies we issued from
May 2009 through July 2011 related to DHS's efforts to manage, test,
and deploy various technology programs and selected updates conducted
in July 2011 related to DHS's efforts to strengthen its investment and
acquisition processes.\1\ For the updates, we reviewed recent DHS
efforts to strengthen its investment and acquisition processes, such as
a June 2011 DHS report on the Department's progress and efforts in
addressing challenges identified in our biennial reports addressing
high-risk management issues.\2\ For our past work, we reviewed program
schedules, planning documents, testing reports, and other acquisition
documentation. For some of the programs we discuss in this testimony,
we conducted site visits to a range of facilities, such as National
laboratories, airports, and other locations to observe research,
development, and testing efforts. We also conducted interviews with DHS
component program managers and S&T officials to discuss issues related
to individual programs. We conducted this work in accordance with
generally accepted Government auditing standards. More detailed
information on the scope and methodology from our previous work can be
found within each specific report.
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\1\ See the related products list at the end of this statement.
\2\ Department of Homeland Security Integrated Strategy for High
Risk Management, Implementation and Transformation, Bi-annual Update to
the Government Accountability Office, June 2011.
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dhs has experienced challenges in developing and meeting key
performance requirements for various technologies
Our past work has found that program performance cannot be
accurately assessed without valid baseline requirements established at
the program start. Without the development, review, and approval of key
acquisition documents, such as the mission need statement, agencies are
at risk of having poorly defined requirements that can negatively
affect program performance and contribute to increased costs.\3\ We
have also identified technologies that DHS has deployed that have not
met key performance requirements. For example, in June 2010, we
reported that over half of the 15 DHS programs we reviewed awarded
contracts to initiate acquisition activities without component or
Department approval of documents essential to planning acquisitions,
setting operational requirements, and establishing acquisition program
baselines.\4\ We made a number of recommendations to help address these
issues as discussed below. DHS has generally agreed with these
recommendations and, to varying degrees, has taken actions to address
them.
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\3\ The mission need statement outlines the specific functional
capabilities required to accomplish DHS's mission and objectives, along
with deficiencies and gaps in these capabilities.
\4\ GAO, Department of Homeland Security: Assessments of Selected
Complex Acquisitions, GAO-10-588SP (Washington, DC: June 30, 2010).
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In addition, our past work has found that DHS faces challenges in
identifying and meeting program requirements in a number of its
programs. For example:
In July 2011, we reported that TSA revised its explosive
detection system (EDS) requirements to better address current
threats and plans to implement these requirements in a phased
approach. However, we reported that only some of the EDSs in
TSA's fleet are configured to detect explosives at the levels
established in the 2005 requirements. The remaining EDSs are
configured to detect explosives at 1998 levels. When TSA
established the 2005 requirements, it did not have a plan with
the appropriate time frames needed to deploy EDSs to meet the
requirements. To help ensure that EDSs are operating most
effectively, we recommended that TSA develop a plan to deploy
and operate EDSs to meet the most recent requirements to ensure
new and currently deployed EDSs are operated at the levels in
established requirements. DHS concurred with our
recommendation.\5\
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\5\ GAO, Aviation Security: TSA Has Enhanced Its Explosives
Detection Requirements for Checked Baggage, but Additional Screening
Actions Are Needed, GAO-11-740 (Washington, DC: July 11, 2011). An EDS
machine uses computed tomography technology to automatically measure
the physical characteristics of objects in baggage. The system
automatically triggers an alarm when objects that exhibit the physical
characteristics of explosives are detected.
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In September 2010, we reported that the Domestic Nuclear
Detection Office (DNDO) was simultaneously engaged in the
research and development phase while planning for the
acquisition phase of its cargo advanced automated radiography
system to detect certain nuclear materials in vehicles and
containers at ports.\6\ DNDO pursued the deployment of the
cargo advanced automated radiography system without fully
understanding the physical requirements of incorporating the
system in existing inspection lanes at ports of entry. We
reported that this occurred because, during the first year or
more of the program, DNDO and CBP had few discussions about
operating requirements for primary inspection lanes at ports of
entry. DHS spent $113 million on the program since 2005 and
canceled the development phase of the program in 2007.
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\6\ GAO, Combating Nuclear Smuggling: Inadequate Communication and
Oversight Hampered DHS Efforts to Develop an Advanced Radiography
System to Detect Nuclear Materials, GAO-10-1041T (Washington, DC: Sept.
15, 2010).
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In May 2010, we reported that not all of the Secure Border
Initiative Network (SBInet) operational requirements that
pertain to Block 1 were achievable, verifiable, unambiguous,
and complete.\7\ For example, a November 2007 DHS assessment
found problems with 19 operational requirements, which form the
basis for the lower-level requirements used to design and build
the system. As a result, we recommended that the Block 1
requirements, including key performance parameters, be
independently validated as complete, verifiable, and affordable
and any limitations found in the requirements be addressed. DHS
agreed with these recommendations and CBP program officials
told us that they recognized the difficulties they experienced
with requirements development practices with the SBInet
program. In January 2011, the Secretary of Homeland Security
announced her decision to end the program as originally
conceived because it did not meet cost-effectiveness and
viability standards.\8\
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\7\ GAO, Secure Border Initiative: DHS Needs to Reconsider Its
Proposed Investment in Key Technology Program, GAO-10-340 (Washington,
DC: May 5, 2010) and Secure Border Initiative: DHS Needs to Address
Testing and Performance Limitations That Place Key Technology Program
at Risk, GAO-10-158 (Washington, DC: Jan. 29, 2010). SBInet Block 1 is
a surveillance, command, control, communications, and intelligence
system fielded in parts of Arizona that is intended to mitigate or
eliminate vulnerabilities along the international border between ports
of entry. Block 1 is an element of DHS's Secure Border Initiative, a
comprehensive, multiyear plan to secure the borders of the United
States and reduce illegal cross border activities such as smuggling of
economic migrants, illegal drugs, and people with terrorist intent.
\8\ GAO, Border Security: Preliminary Observations on the Status of
Key Southwest Border Technology Programs, GAO-11-448T (Washington DC:
Mar. 15, 2011). After an internal assessment initiated in January 2010,
the Secretary of Homeland Security announced in January 2011 that she
had directed CBP to end the SBInet program as originally conceived.
According to DHS, the Secretary's decision was informed by an
independent analysis of cost-effectiveness, a series of operational
tests and evaluations, and Border Patrol input.
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In October 2009, we reported that TSA passenger screening
checkpoint technologies were delayed because TSA had not
consistently communicated clear requirements for testing the
technologies.\9\ We recommended that TSA evaluate whether
current passenger screening procedures should be revised to
require the use of appropriate screening procedures until TSA
determined that existing emerging technologies meet its
functional requirements in an operational environment. TSA
agreed with this recommendation and reported taking actions to
address it.
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\9\ GAO, Aviation Security: DHS and TSA Have Researched, Developed,
and Begun Deploying Passenger Checkpoint Screening Technologies, but
Continue to Face Challenges, GAO-10-128 (Washington, DC: Oct. 7, 2009).
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dhs has encountered challenges in conducting and completing testing and
evaluation
Our prior work has also identified that failure to resolve problems
discovered during testing can sometimes lead to costly redesign and
rework at a later date and that addressing such problems during the
testing and evaluation phase before moving to the acquisition phase can
help agencies avoid future cost overruns. Specifically:
In March 2011, we reported that the independent testing and
evaluation of SBInet's Block 1 capability to determine its
operational effectiveness and suitability was not complete at
the time DHS reached its decision regarding the future of
SBInet or requested fiscal year 2012 funding to deploy the new
Alternative (Southwest) Border Technology.\10\ We reported that
because the Alternative (Southwest) Border Technology
incorporates a mix of technology, including an Integrated Fixed
Tower surveillance system similar to that currently used in
SBInet, the testing and evaluation could have informed DHS's
decision about moving forward with the new technology
deployment.
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\10\ GAO-11-448T.
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In September 2010, we reported that S&T's plans for
conducting operational testing of container security
technologies did not reflect all of the operational scenarios
that CBP was considering for implementation.\11\ We reported
that until the container security technologies are tested and
evaluated consistent with all of the operational scenarios, S&T
cannot provide reasonable assurance that the technologies will
function as intended. For example, S&T did not include certain
scenarios necessary to test how a cargo container would be
transported throughout the maritime supply chain. We
recommended that DHS test and evaluate the container security
technologies consistent with all the operational scenarios DHS
identified for potential implementation. DHS concurred with our
recommendation.
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\11\ GAO, Supply Chain Security: DHS Should Test and Evaluate
Container Security Technologies Consistent with All Identified
Operational Scenarios to Ensure the Technologies Will Function as
Intended, GAO-10-887 (Washington DC: Sept. 29, 2010).
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In October 2009, we reported that TSA deployed explosives
trace portals, a technology for detecting traces of explosives
on passengers at airport checkpoints, even though TSA officials
were aware that tests conducted during 2004 and 2005 on earlier
models of the portals suggested the portals did not demonstrate
reliable performance in an airport environment.\12\ TSA also
lacked assurance that the portals would meet functional
requirements in airports within estimated costs and the
machines were more expensive to install and maintain than
expected. In June 2006, TSA halted deployment of the explosives
trace portals because of performance problems and high
installation costs. We recommended that to the extent feasible,
TSA ensure that tests are completed before deploying checkpoint
screening technologies to airports. DHS concurred with the
recommendation and has taken action to address it, such as
requiring more-recent technologies to complete both laboratory
and operational tests prior to deployment.
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\12\ GAO-10-128.
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dhs has not consistently incorporated information on costs and benefits
in making acquisition decisions
Our prior work has shown that cost-benefit analyses help
Congressional and agency decision-makers assess and prioritize resource
investments and consider potentially more cost-effective alternatives
and that without this ability, agencies are at risk of experiencing
cost overruns, missed deadlines, and performance shortfalls. For
example, we have reported that DHS has not consistently included these
analyses in its acquisition decisionmaking. Specifically:
In March 2011, we reported that the decision by the
Secretary of Homeland Security to end the SBInet program was
informed by, among other things, an independent analysis of
cost-effectiveness.\13\ However, it was not clear how DHS used
the results to determine the appropriate technology plans and
budget decisions, especially since the results of SBInet's
operational effectiveness were not complete at the time of the
Secretary's decision to end the program. Furthermore, the cost
analysis was limited in scope and did not consider all
technology solutions because of the need to complete the first
phase of the analysis in 6 weeks. It also did not assess the
technology approaches based on the incremental effectiveness
provided above the baseline technology assets in the geographic
areas evaluated. As we reported, for a program of this
importance and cost, the process used to assess and select
technology needs to be more robust.
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\13\ GAO-11-448T.
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In October 2009, we reported that TSA had not yet completed
a cost-benefit analysis to prioritize and fund its technology
investments for screening passengers at airport
checkpoints.\14\ One reason that TSA had difficulty developing
a cost-benefit analysis was that it had not yet developed life
cycle cost estimates for its various screening technologies. We
reported that this information was important because it would
help decision-makers determine, given the cost of various
technologies, which technology provided the greatest mitigation
of risk for the resources that were available. We recommended
that TSA develop a cost-benefit analysis. TSA agreed with this
recommendation and has completed a life cycle cost estimate and
collected information for its checkpoint technologies, but has
not yet completed a cost-benefit analysis.
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\14\ GAO-10-128.
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In June 2009, we reported that DHS's cost analysis of the
Advanced Spectroscopic Portal (ASP) program did not provide a
sound analytical basis for DHS's decision to deploy the
portals.\15\ We also reported that an updated cost-benefit
analysis might show that DNDO's plan to replace existing
equipment with advanced spectroscopic portals was not
justified, particularly given the marginal improvement in
detection of certain nuclear materials required of advanced
spectroscopic portals and the potential to improve the current-
generation portal monitors' sensitivity to nuclear materials,
most likely at a lower cost.\16\ At that time, DNDO officials
stated that they planned to update the cost-benefit analysis.
After spending more than $200 million on the program, in
February 2010 DHS announced that it was scaling back its plans
for development and use of the portals technology.
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\15\ GAO, Combating Nuclear Smuggling: Lessons Learned from DHS
Testing of Advanced Radiation Detection Portal Monitors, GAO-09-804T
(Washington, DC: June 25, 2009). The ASP program is an effort by DHS to
develop, procure, and deploy a successor to existing radiation
detection portals. Radiation detection portals, also known as radiation
portal monitors, are designed to detect the emission of radiation from
objects that pass by them. The current portals are generally deployed
at the U.S. land and sea borders by DHS's DNDO and operated by DHS's
CBP.
\16\ GAO-09-804T.
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dhs has efforts under way to strengthen acquisition and technology
development
Since DHS's inception in 2003, we have designated implementing and
transforming DHS as high risk because DHS had to transform 22
agencies--several with major management challenges--into one
Department. This high-risk area includes challenges in strengthening
DHS's management functions, including acquisitions; the impact of those
challenges on DHS's mission implementation; and challenges in
integrating management functions within and across the Department and
its components. Failure to effectively address DHS's management and
mission risks could have serious consequences for U.S. National and
economic security.\17\
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\17\ GAO, High Risk Series: An Update, GAO-11-278 (Washington, DC:
February 2011).
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In part because of the problems we have highlighted in DHS's
acquisition process, implementing and transforming DHS has remained on
our high-risk list. DHS currently has several plans and efforts
underway to address the high-risk designation as well as the more
specific challenges related to acquisition and program implementation
that we have previously identified.
In June 2011, DHS reported to us that it is taking steps to
strengthen its investment and acquisition management processes across
the Department by implementing a decision-making process at critical
phases throughout the investment life cycle. For example, DHS reported
that it plans to establish a new model for managing Department-wide
investments across their life cycles. Under this plan, S&T would be
involved in each phase of the investment life cycle and participate in
new councils and boards DHS is planning to create to help ensure that
test and evaluation methods are appropriately considered as part of
DHS's overall research and development investment strategies. In
addition, DHS reported that the new councils and boards it is planning
to establish to strengthen management of the Department's acquisition
and investment review process would be responsible for, among other
things, making decisions on research and development initiatives based
on factors such as viability and affordability and overseeing key
acquisition decisions for major programs using baseline and actual
data. According to DHS, S&T will help ensure that new technologies are
properly scoped, developed, and tested before being implemented. DHS
also reports that it is working with components to improve the quality
and accuracy of cost estimates and has increased its staff during
fiscal year 2011 to develop independent cost estimates, a GAO best
practice, to ensure the accuracy and credibility of program costs. DHS
reports that four cost estimates for level 1 programs have been
validated to date.
The actions DHS reports taking or has under way to address the
management of its acquisitions and the development of new technologies
are positive steps and, if implemented effectively, could help the
Department address many of these challenges. However, showing
demonstrable progress in implementing these plans is key. In the past,
DHS has not effectively implemented its acquisition policies, in part
because it lacked the oversight capacity necessary to manage its
growing portfolio of major acquisition programs. Since DHS has only
recently initiated these actions, it is too early to fully assess their
impact on the challenges that we have identified in our past work.
Going forward, we believe DHS will need to demonstrate measurable,
sustainable progress in effectively implementing these actions.
Chairman McCaul, Ranking Member Keating, and Members of the
subcommittee, this concludes my prepared statement. I would be pleased
to respond to any questions that you or other Members of the
subcommittee may have.
Mr. McCaul. Thank you, Mr. Maurer. The Chairman now
recognizes the Under Secretary, Mr. Borras, for his testimony.
STATEMENT OF RAFAEL BORRAS, UNDER SECRETARY FOR MANAGEMENT AND
CHIEF ACQUISITION OFFICER, U.S. DEPARTMENT OF HOMELAND SECURITY
Mr. Borras. Good morning, Mr. Chairman, Ranking Member
Keating, Ranking Member Thompson, other distinguished Members
of the panel. I am especially pleased to be here and glad to be
joined by my esteemed colleague, Dr. Tara O'Toole, Under
Secretary for Science and Technology, as well as the acting
Inspector General, Mr. Edwards, and Mr. Maurer from the General
Accountability Office. I am pleased to discuss the issue of how
we acquire and how we manage science and technology at DHS. One
of my top priorities since I arrived at DHS has been to improve
the efficiency and effectiveness of the acquisition process
since it represents approximately $18 billion of the
Department's $55 billion budgets. Based on our own internal
management reviews, as well as IG audits and reviews from GAO,
I concluded that the procurement phase of the acquisition
cycle, from the receipt of requirements through award of
contract, worked fairly well. However, continued attention is
needed on the front end requirements development, as well as
the back end, our program management phrase of the acquisition
cycle.
In January 2011, I submitted a copy of a comprehensive plan
to GAO and furnished a copy as well to this subcommittee that
outlined an integrated strategy for high-risk management. This
strategy provides a road map and clear action plans to
strengthen Department-wide strategic planning for all of the
Department's investments, especially our major acquisition
programs. A key tenet of the program is the integrated
investment life cycle model which I would be happy to describe
in greater detail. But this model defines an end-to-end process
to integrate the way we develop and implement strategies,
capabilities, and resources. It differs from prior efforts at
the Department by providing a repeatable model that will span
the entire DHS enterprise. Presently, many operational units
plan budgets based on a limited view of their mission need.
Under the integrated model, DHS will focus more attention
on the front-end strategic phase, assessing both the
capabilities and requirements up-front, thereby providing a
broader enterprise-wide perspective to help ensure investments
address the greatest needs of the Department and help leverage
success among the various components. The integrated model will
enhance our ability to excel in all facets of planning,
procuring, and execution of our major programs.
We have also undertaken initiatives to address program
execution which will impact the budget, schedule, and
performance of existing and future acquisition programs. Of
particular importance to me is the acquisition of science and
technology products. My partners in science and technology now
play a key role in each phase of the acquisition cycle,
especially in the earliest phases, concept development through
program execution. I expect them to evaluate new and emerging
technologies to address capability gaps which will ultimately
enhance the Department-wide technology, their expertise and
assist the Department in making better technology utilization
decisions. Additionally, we have institutionalized the role of
science and technology test and evaluation groups in our
acquisitions review board process, elevating the role of
operational testing to the highest departmental forum on
acquisition. Our refinements will also help the Department
clearly articulate our long-term strategic acquisition needs,
which will improve industry's understanding of our requirements
and promote a more competitive marketplace.
I have spent countless hours in meetings with industry,
both large and small, listening to their concerns and
soliciting their input and ideas. It is my belief that our
efforts will ultimately result in a more efficient and
innovative solution to help the Department achieve its homeland
security mission.
In closing, DHS is working to improve the effectiveness of
the acquisition life cycle and to provide better linkage
between requirements development, resource allocation,
procurement, and program management, with S&T as our full
partner. We have come a long way, and we still have more work
ahead of us. But we are on the right track to institutionalize
a living framework which will enable the Department to become
better buyers and deliver our taxpayers a better return on the
investments of the resources provided to DHS. Once again, I
thank you for the opportunity to appear before this committee,
and I look forward to answering your questions.
[The statement of Mr. Borras follows:]
Prepared Statement of Rafael Borras
July 15, 2011
Chairman McCaul, Ranking Member Keating, and other distinguished
Members of the committee, I thank you for the opportunity to appear
before you today.
Since my appointment, I have led the development and implementation
of a comprehensive, strategic management approach focused on maturing
organizational effectiveness within DHS. Through this effort, we are
focused on enhancing the financial, acquisition, and human capital
structures and processes necessary to meet DHS mission goals by
integrating and aligning business functional areas at both the
Departmental and Component levels. My approach has been built around
three key elements:
1. Acquisition Enhancement.--Improving upon the current Department
acquisition processes and procedures--addressing the ``front
end'' requirements as well as ``back end'' program management
in order to minimize risk, encourage fiscal responsibility, and
improve end-to-end execution across the entire acquisition life
cycle.
2. Financial Enhancement.--Improving our financial systems and
capabilities in both the management directorate and the
components, emphasizing strong financial and analytical
discipline throughout the Department.
3. Human Capital Management Enhancement.--Making sure we have the
right people in the right positions at the right time, with the
proper workforce balance between DHS and contract staff.
I welcome the opportunity to focus today on the significant
acquisition enhancements that are currently underway at the Department.
The successful delivery of major programs is a strategic business
function of our Department. Nearly half of the DHS budget is dedicated
to obtaining goods and services to support and improve our
capabilities, including over $18 billion in investments in our
acquisition programs. Those who directly carry out our mission require
and deserve the tools and processes to help address their evolving
mission needs effectively and efficiently. With limited resources and
increasing demands, we understand that we must excel in all facets of
planning, procuring, and managing the execution of our major programs.
The Secretary and Deputy Secretary have asked me to lead our on-
going effort to improve the overall acquisition management process,
specifically focusing on strengthening the capabilities and
requirements development process to better support the Department's
strategies and priorities while enhancing program execution. To that
end, we have held a series of strategic meetings with the Chief
Procurement Officer, Chief Information Officer, Component Acquisition
Executives, Heads of Contracting Activity, and other program management
professionals to gain valuable insight into the systemic weaknesses
that we must overcome in order to deliver programs successfully.
Successful program management requires well-defined requirements
based on our priority needs, effective strategies for developing
solutions, and efficient processes to operate and maintain solutions.
Our review of more than 80 major programs shows that our biggest
challenges start with the requirements process and our lack of
qualified program management staff.
integrating requirements and acquisition processes
I submitted a report to GAO in January 2011 titled, Integrated
Strategy for High-Risk Management. In that report, I committed to
strengthening the strategic phase of the Integrated Investment Life
Cycle Model. In the short time since the report was issued, significant
progress has been made to strengthen investment management across the
Department.
The Integrated Investment Life Cycle Model (see Figure 1) is an
end-to-end process that integrates strategy, resources, and
capabilities. It differs from prior efforts in that it is a formal,
repeatable model that will span the DHS enterprise. Presently,
operational units plan budgets based on a limited view of mission need.
Under the integrated model, DHS will mature its ``front-end'' strategic
phase, thereby providing a broader, enterprise-wide perspective and
ensuring our investments address the greatest needs of the Department.
The Integrated Investment Life Cycle Model will facilitate our ability
to excel in all facets of planning, procuring, and managing the
execution of our major programs.
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To date, we have made significant progress towards establishing the
Integrated Investment Life Cycle Model by:
Designing and publishing the Integrated Investment Life
Cycle Model (IILCM) in the Integrated Strategy for High-Risk
Management (January 2011);
Identifying five (5) pilot programs to test the IILCM
concept;
Forming an initial set of Functional Coordination Offices
(FCOs) to provide analytical support;
Planning for the first Capabilities and Requirements Council
(CRC) to meet in early Quarter 4 of fiscal year 2011 to
validate requirements;
Initiating the development of a Decision Support Tool (DST)
to provide enhanced analytic support for major acquisition
programs; and
Continuing the Program Review Board and Acquisition Review
Boards (ARB) for providing decisions for on-going investments.
Ultimately the ARB will migrate to a new Investment Review
Board that has a more holistic reach.
I recognize that effective vendor engagement in the acquisition
process is critical to competition, the identification of commercial
item solutions, and the realization of savings. However, the speed at
which we achieve these objectives must be balanced against the need to
abide by statutes, rules, and regulations.
While the Integrated Investment Life Cycle Model is in the initial
stages of development, we are confident that it will significantly
improve our decision-making processes and are committed to making it
successful. The model will result in improved collaboration among our
Components, greater efficiencies, and an enhanced ability to ensure our
investments are highly responsive to the capability needs of the
homeland security enterprise. It will also help the Department clearly
articulate our long-term strategic acquisition needs, which will
improve industry's understanding of our requirements and promote a more
competitive marketplace. This will ultimately result in more efficient
and innovative solutions to help the Department achieve its mission.
the pre-acquisition process
There is significant unrealized value in maturing the pre-
acquisition process. In the earliest phases of concept development and
program initiation, the Department's Science and Technology Directorate
(S&T) can help define the appropriate technological solutions and
perform feasibility analysis. This can occur while studying the
affordability, performance, and viability of various alternatives.
The continuous performance of requirements management is essential
throughout the acquisition life-cycle, but is most critical during the
earliest planning phase. DHS is strengthening our front-end process by
providing greater rigor and oversight of the development of
requirements. To that end, we have formally incorporated the role of
S&T in the development of all technology requirements for the
Department. S&T is in a unique position to evaluate new and emerging
technologies against capability gaps, which will increase technological
expertise and assist the Department in making better technology ``buy''
decisions for the DHS Enterprise.
S&T has the statutory authority to serve a significant role in the
management of Departmental acquisitions as the Directorate is charged
to, ``conduct basic and applied research, development, demonstration,
testing, and evaluation activities relevant to any or all elements of
the Department.''\1\ The Homeland Security Act provides sufficient
guidance as to ``what'' S&T should be doing in the management of
acquisitions. An enhanced Integrated Investment Life-Cycle Model will
better identify ``how'' S&T will serve a key role in acquisition
management.
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\1\ Homeland Security Act of 2002.
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As Under Secretary O'Toole has noted, ``a critical part of
successfully transitioning technology is gaining an accurate
understanding of the customer needs at the beginning of the
project.''\2\ I am pleased that Under Secretary O'Toole has established
the Acquisition Support and Operations Analysis Group to leverage
technical expertise and assist DHS Components' efforts. Leading this
critical role for S&T is Director Henry Gonzalez, who is responsible
for connecting S&T projects to the operational Components, developing
the Integrated Product Team process to identify component technology
needs, and linking S&T investments to those needs.
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\2\ Testimony of Under Secretary Dr. Tara O'Toole before House
Committee on Science, March 15, 2011.
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The Acquisition Support and Operations Analysis Group will leverage
S&T's critical mass of technical capability and will work in close
collaboration with the Management Directorate to:
Aid the components in developing high-fidelity, testable
operational requirements for their acquisitions;
Aid in executing an analysis of alternatives to ensure that
the most appropriate technical approach is taken; and
Partner with the components throughout an acquisition so
that user needs are translated into real capabilities that can
be validated upon delivery and deployed without delay.
My colleagues in the S&T will expound upon this effort and how it
will guide, support, and strengthen the process.
improving the definition of requirements
In addition to S&T's efforts previously mentioned, the Management
Directorate is establishing a Center of Excellence for Requirements.
The purpose of this Center is to support DHS Component awareness,
understanding, and use/adaptation of proven best practices, which will
provide DHS program managers with proven tools, processes, and
training. The Requirements Center of Excellence will establish a well-
defined and repeatable approach to requirement definition to ensure
that our process guidance explains the information needed for success.
The goal is to support the use of best-in-class requirements management
and execution tools, and standardize operating models for how to best
use the tools.
The greatest value of this effort will be our ability to link
emerging and existing capabilities to operational requirements. A key
challenge will be harmonizing requirements across seemingly disparate
components and investments.
the acquisition process
The Department's acquisition management framework is growing
stronger through the refinement of our policy, processes, procedures,
and the placement of people with the right skill sets in the program
offices. The goal is for every major program to be implemented in the
most responsible and efficient manner possible. Our enterprise-wide
acquisition framework is a key element of our integration strategy, and
the Department has taken a number of steps to strengthen it.
I have gained valuable insight from conversations I have had with
the private sector, specifically those large and small businesses doing
work with DHS. The product of those conversations has, in part, helped
shape our strategy for maturing our acquisition process, and has
resulted in a more constructive dialogue and feedback loop with our
private sector partners. It is essential that we maximize our
investments in the goods and services we acquire to help us achieve our
mission.
DHS has implemented the final version of Acquisition Management
Directive 102-01. Directive 102 formalizes the role of the Acquisition
Review Board in the oversight and governance process by establishing
criteria for reviewing and approving a program's progress through a
standard investment life cycle (See Figure 2). The implementation of
this directive has resulted in productive interactions between program
offices and Department leadership allowing us to mitigate or avoid
unnecessary costs, review schedules, and evaluate performance risks.
The cornerstone of our acquisition review process is the program
baseline. The acquisition program baseline formally documents critical
cost, schedule, and performance parameters that must be met to
accomplish the program's goals. By tracking and measuring actual
program performance against baseline, management is alerted to
potential problems and can take corrective action.
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The Department has provided standardized structure to the
Acquisition Review Board presentation materials, focusing on six key
areas that all programs must report progress on. These include cost,
performance, schedule, risk, funding profile, and staffing. Other
challenges that are unique to the program are discussed, but
standardizing the opening dialog of the Acquisition Review Board has
resulted in better focus on the key issues of program execution.
Additionally, the formalized role of S&T's Testing and Evaluation
in the acquisition review process institutionalizes the rigor of proper
test procedures and plans in the acquisition process.
Another important step in strengthening acquisition program
management is managing risk. We are developing a risk management
capability within our decision support tool as well as a standard
criterion to evaluate program execution risks. This module will provide
for a centralized means to track risks both at the Department and
Component level. Acquisition Review Boards, portfolio reviews, and day-
to-day oversight all aid in identifying risks faced by programs. As
critical risks are identified, steps are taken to place a program on a
path to successfully deliver capability to operators.
A central tenet of the Department's management integration strategy
is the collection and dissemination of business intelligence and a
centralized Decision Support Tool (DST) (See Figure 3). Utilization of
these tools will help us better manage the complex relationships
between mission objectives, program strategy and performance metrics
for a specific program.
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
When fully deployed, the Decision Support Tool will be the
authoritative source for governance boards on the health of individual
programs and help determine ``go/no-go'' decisions. The goal of a
Decision Support Tool is to strengthen accountability for program
management and to develop a common language and discipline for all
program investments by communicating indicators that inform the health
status of programs and provide general performance predictors.
From a strategic level, the Decision Support Tool system will
accomplish the following:
Organize data in a template that guides business owners
through a series of uniform questions to assess the risk of an
investment,
Weigh each response with risk-based algorithms scored to
determine a program's risk relative to the Department's
strategic goals and other competing investments,
Assess the progress of each program during its life cycle on
a periodic basis (e.g., quarterly) relative to pre-established
measures,
Provide a series of customizable reports on program status
in a dashboard format that is visible to designated officials,
according to permission-based roles and responsibilities, and
Store key data for historical use, record data
modifications, and allow users to submit documentation to
support ratings.
By combining the strengths and merits of the Integrated Investment
Life Cycle Model with a Department-wide Decision Support Tool, we will
have the structure, processes, and systems necessary to strategically,
effectively, and efficiently manage our mission goals.
conclusion
DHS is working to improve the effectiveness of the acquisition life
cycle and provide better linkages between requirements development,
resource allocation, procurement and program management. The Integrated
Investment Life Cycle Model is a holistic approach to how DHS
investments should be managed.
Once again, I thank you for the opportunity to appear before you
today, and I look forward to answering your questions.
Mr. McCaul. Thank you, Mr. Borras. The Chairman now
recognizes Under Secretary O'Toole for her testimony.
STATEMENT OF TARA O'TOOLE, UNDER SECRETARY, SCIENCE AND
TECHNOLOGY DIRECTORATE, U.S. DEPARTMENT OF HOMELAND SECURITY
Dr. O'Toole. Thank you Mr. Chairman, Ranking Members,
distinguished Members of the committee, I will make may remarks
very brief so we can get to the questions.
Mr. McCaul. The Chairman thanks you for that.
Dr. O'Toole. Let's see if I can pull it off. The S&T
Directorate was created by Congress in 2002 and given very
broad responsibilities to conduct and coordinate basic and
applied research and development demonstration testing
evaluation activities relevant to any or all elements of DHS.
In addition to designing and managing new technology for the
Department, we are also the core source of technical expertise
of engineers and scientists in this highly operational
department. Our reach and depth in the technical areas is
pertinent to DHS, coupled with our understanding of on-the-
ground operational needs in the Department, I think be used to
gain significant improvements in DHS' acquisition process.
Understand that until very recently, S&T was not regularly or
usually involved in acquisition except in the testing and
evaluation phrase at the back end of the acquisition process.
Secretary Borras and I both required improvements in
acquisition as one of our top priorities, and we have formed a
strong partnership, not just between the two of us, but between
our staffs to institutionalize S&T's roles in the Department's
integrated investment life cycle model. In addition, last fall,
the S&T directorate realigned our organization and created the
office of acquisition support and operational analysis, which
will be led by Mr. Henry Gonzalez, a professional who has 27
years of Federal acquisition experience.
This office is designed specifically to assist DHS'
components in their efforts to establish clear and testable
operational requirements at the very beginning of the
acquisition process, which is key to getting what you want
years later and at the other end of acquisition when you are
ready to put a new technology into the field. As was said by
Mr. Maurer, the most established and visible S&T role in
acquisition right now is in testing and evaluation. As a member
of the DHS acquisition board, our director of operational tests
and evaluation provides independent inputs into the Department
acquisition decision-making forums. We are currently engaged
with 24 programs from across the DHS components that have test
planning or execution analysis underway. The testing and
evaluation and standards division in S&T performs oversight of
all level 1 and non-delegated level 2 acquisitions in the
Department.
The third point I would like to make is that S&T is,
indeed, highly focused on leveraging R&D investments made by
others, whether they be by the Federal Government or the
commercial sector or universities. I would be happy to go into
this further. We have to do this, first of all, because of the
urgency of the operational needs of DHS which simply can't
tolerate the typical 10-year life cycle, the time known to be
required to go from a bench research project to deployment in
the field. Second, because our budget simply cannot afford to
be a soup to nuts, R&D generator. We have to leverage
investments made by the commercial sector and others, and we
have made many moves to make that a more disciplined and
universal activity within S&T, which I would be happy to
describe.
We have extensive interactions with DOD and other Federal
agencies to make sure we know what they are doing and can
garner their technologies as they apply to us. Under Secretary
Borras and I meet quarterly with Ash Carter in DOD for the
purpose of reviewing what technologies they have that might be
relevant to DHS.
I will say two things often make it difficult to translate
DOD technologies into DHS operations. One is cost, and second
is the amount of training required for the technology. But we
do make use of their technologies in many instances, and I
would be happy to talk about that in detail. Finally, I am
compelled to note that the extensive technical expertise and
the unique understanding of DHS operations which S&T embodies,
I think, can be powerfully leveraged against our acquisition
needs.
Mr. McCaul. Dr. O'Toole, I hate to interrupt you. We have
been called to vote. We have about 10 minutes before we have to
get to the floor. If you could maybe wrap up your testimony.
Dr. O'Toole. Okay. One sentence. It all goes away with the
House budget. Thank you, Mr. Chairman.
[The information follows:]
Prepared Statement of Henry I. Gonzalez on Behalf of the Science and
Technology Directorate
July 15, 2011
introduction
Good morning, Chairman McCaul, Ranking Member Keating, and
distinguished Members of the subcommittee. I am honored to appear
before you today on behalf of the Department of Homeland Security's
(DHS) Science and Technology Directorate (S&T) and Under Secretary Tara
O'Toole. My testimony will focus on the Directorate's role in the
Department's requirements gathering and acquisition management
processes, and how these processes leverage existing technology across
the DHS Components and the rest of the Federal Government including the
Department of Defense.
On March 15 of this year, Under Secretary O'Toole appeared before
the House Committee on Science, Space, and Technology, Subcommittee on
Technology and Innovation to describe the results of an extensive S&T
strategic planning process, which are captured in five strategic goals
and reflected in an organizational realignment which took effect last
November. Those five strategic goals are:
Goal No. 1.--Rapidly develop and deliver knowledge,
analyses, and innovative solutions that advance the mission of
the Department;
Goal No. 2.--Leverage technical expertise to assist DHS
Components' efforts to establish operational requirements and
select and acquire needed technologies;
Goal No. 3.--Strengthen the Homeland Security Enterprise and
First Responders' capabilities to protect the homeland and
respond to disasters;
Goal No. 4.--Conduct, catalyze, and survey scientific
discoveries and inventions relevant to existing and emerging
homeland security challenges; and
Goal No. 5.--Foster a culture of innovation and learning in
S&T and across DHS that addresses challenges with scientific,
analytic, and technical rigor.
In support of goal No. 2, the realignment established the
Acquisition Support and Operations Analysis Group (ASOA), bringing
together all of S&T's requirements and acquisition related activities
under one Director who reports directly to the Under Secretary. ASOA is
able to leverage S&T's knowledge, expertise, and other technical
resources across DHS and work closely with the Under Secretary for
Management to improve the requirements gathering process and
acquisition support to the components. As the Director of ASOA, I am
also S&T's Component Acquisition Executive. This provides me with the
ability to participate in the Acquisition Review Boards of other
Component programs and represent S&T at these critical decision-making
forums.
s&t will be a key player in the department's new requirements process
Decades of Federal acquisition management shows that a thorough and
comprehensive requirements process is indispensable to the effective
and efficient delivery of operational benefits to end users. Before
significant investment in pursuing a solution, one needs to invest time
and effort to thoroughly understand the problem and develop detailed
requirements. When this doesn't happen, the Government may end up with
solutions that do not meet actual needs, costing more in the long run.
To maximize the Department's resources, it is critical to have an
enterprise-level requirements process to provide a top-down framework
where the most pressing needs can be identified and prioritized.
Through the leadership of Under Secretary Borras, the Department is
implementing its Integrated Investment Life Cycle (IILC) Model which
provides the enterprise-level requirements setting process.
The IILC includes two key groups: The Department Strategy Council
and the Strategic Requirements Council. The Department Strategy Council
brings together components to set strategic, high-level requirements.
These strategic requirements must then be refined to operational
concepts that can be implemented.
The Strategic Requirements Council (SRC) makes trade-off decisions
between potential solutions. While requirements are being set and
alternatives are being analyzed, it is critical that technologists work
closely with operators to come up with viable solutions. In some cases,
the desired technology may be beyond the state-of-the-art. In those
cases, S&T may take the project on as a research and development
effort, and the SRC can elect a more feasible option or opt to hold off
the acquisition. In other cases, there may be more appropriate
technologies than initially proposed.
By being involved across the Department's IILC, S&T will be able to
assist in developing technically specific and feasible requirements,
setting the stage for acquisitions that are completed on schedule and
within budget. Moving S&T into a stronger support role for this ``front
end'' of acquisition has been a priority for both Under Secretary
O'Toole and Secretary Napolitano. We look forward to S&T's active
engagement in the Capabilities and Requirements Council and other
forums of the Model.
s&t has on-going efforts across the acquisition life cycle
S&T Provides Support for Requirements Development
S&T currently assists Components with requirements analysis. The
first way we have been doing this is through the sponsorship and
management of the Department's two Federally-funded research and
development centers: The Homeland Security Studies and Analysis
Institute (HSSAI) and the Systems Engineering and Development Institute
(SEDI). These two world-class organizations provide requirements
analysis support to every DHS Component. For example, between April
2010 and May 2011, HSSAI issued nearly 50 analytic reports developed
for four operational Components and three headquarters Components, and
is currently engaged in four Analyses of Alternatives for three
operational Components. Similarly, SEDI is providing support to 13
major acquisition programs\1\ at five operational and three
headquarters Components.
---------------------------------------------------------------------------
\1\ The Department defines ``major acquisition programs'' to
include ``Level 1'' and ``Level 2'' programs. Level 1 and Level 2
programs are those with over $1 billion and $500 million life cycle
costs respectively.
---------------------------------------------------------------------------
The second way S&T assists in the requirements process is by
working with Components to define S&T research and development
projects. Over the last few years this process has functioned through
the Capstone Integrated Product Teams (IPT) process. A refocused
approach to the IPTs will establish Science and Technology Investment
Councils (STIC), which elevate participation to the most senior levels
of our Directorate and of each Component. The goal of these STICs is to
engage S&T and the Components in a systematic manner regarding their
critical operational needs, through the creation of new S&T-funded
projects or by modifying existing projects that will address critical
needs and underlying technology gaps. The Under Secretary for Science
and Technology and Component heads will co-chair the STICs and agree on
their key outputs, namely, approved requirements and corresponding
research and development projects. The STIC process is being developed
over the summer and we will have several of the Component STICs in
place by the end of fall.
Finally, we provide Components with requirements development
support at their request. Two specific examples are the Science and
Technology Operational Research and Enhancement (STORE) project and the
Tactical Communications (TACCOM) program. STORE, which is a high-
visibility ``Apex'' project,\2\ is conducting detailed operations
research, evaluating alternative enhanced solutions against dynamic
threats and fielding actual prototype capabilities for the U.S. Secret
Service. In the TACCOM program, we are managing a Technology
Demonstration activity for DHS's U.S. Customs and Border Protection
(CBP) that will feed real-world data on technology capabilities into an
analysis of alternatives.
---------------------------------------------------------------------------
\2\ To meet Components strategic needs, and to provide Component
leaders with an understanding of S&T capabilities, we have instituted
``Apex Projects''. Apex Projects must solve a problem of high-level
operational importance. Best practices learned in these projects will
be documented and infused through the rest of our activities. In
addition to the USSS project described, S&T has initiated an Apex
project with Customs and Border Protection to develop a secure transit
corridor for goods between Mexico, the United States, and Canada.
---------------------------------------------------------------------------
S&T Provides Support to Components During Acquisitions
S&T performs a variety of roles in the Department's acquisition
process. First and most visibly is our statutory Department-wide role
in test and evaluation.
Just as a thorough and comprehensive requirements process is
indispensable to the effective and efficient delivery of operational
benefits to end users, so is a thorough and comprehensive test and
evaluation process. Testing and evaluation, although present throughout
the entire life-cycle of an acquisition, is most critical on the ``back
end.'' It is the final step before the Department makes significant
investment into final production and fielding of the acquired system,
and ensures that the system meets its documented operational
requirements and provides the required capability. As a member of the
DHS Acquisition Review Board, S&T's Director of Operational Test and
Evaluation provides independent inputs into the Department's
acquisition decision-making forums.
S&T's Test and Evaluation organization is currently engaged with 24
programs from across the DHS Components that have Test and Evaluation
activities underway. This includes development and operational testing
and program test and evaluation plans. S&T has assessed six Component
Operational Test and Evaluation activities in the past 12 months that
are at the final stage of acquisition, and is currently involved in
three others. S&T's role also includes serving as the Department lead
for all Test and Evaluation policies and establishing a career ladder
program for Test and Evaluation professionals.
Standards also play an important support role in acquisitions.
Providing standards that can be used by multiple technology vendors to
develop solutions drives market competition, resulting in improved
products at lower costs to the Federal Government, first responders,
and other Homeland Security Enterprise owners and operators. The
Standards branch is currently engaged in three efforts that support
acquisitions including biodetection and radiation/nuclear detection.
S&T also provides acquisition program management expertise to
Components at their request. This is a new function, and we will be
expanding our capacity in the months ahead. Currently we are supporting
CBP on their Automated Commercial Environment (ACE) program where we
have dedicated a senior systems engineer. Working with the ACE program
office, our engineer is developing a revised system architecture and
providing best-practices software development guidance.
s&t leverages existing technology capabilities from across the united
states and interagency partners
To ensure that S&T and DHS are leveraging research and development
from other organizations, S&T created the Research and Development
Partnerships group as part of its reorganization. The director of this
group also reports directly to the Under Secretary, and manages offices
within S&T that reach outside of DHS and oversee a number of joint
projects and interagency processes to maximize the Federal Government's
work, along with the work of our international, private sector, and
university partners.
In addition to these programs, S&T works closely with the
Department of Defense (DOD) and the Department of Energy (DOE) on a
number of partnerships and participates in the Committee on Homeland
and National Security run by the White House Office of Science and
Technology Policy. This group and its subcommittees develop interagency
Research and Development strategies that ensure all organizations
across the Federal Government are utilizing each other's technology
efforts.
While S&T always does a ``horizon scan'' before starting a new
project, including evaluating DOD efforts, it is rare that DOD and DHS
mission needs, operating environments, and budget constraints line up
exactly together. For example, both organizations are concerned about
Improvised Explosive Devices (IED). However, the IED problem in
Afghanistan requires very different solutions than those in the United
States. To continue the example, front-line law enforcement in the
United States cannot use wireless jammers in the middle of a city as
DOD has done in Afghanistan. On the other hand, we may be able to
collaborate on updated handheld devices that detect homemade
explosives.
conclusion
DHS is the third-largest Federal agency with an extremely diverse
operational portfolio. It is vital that the Department builds and
maintains a comprehensive requirements and acquisition process with
proper due diligence and strategic execution. At the same time, our
requirements and acquisition process must be flexible and adaptable to
constantly changing threats and operational needs.
One of the keys to the Department's path forward is through a
stronger integration of S&T into the requirements and acquisition
processes. The continued implementation of Under Secretary O'Toole's
strategic goals and demonstrated partnership with DHS's Under Secretary
for Management shows a clear path of transformation and progress.
Thank you for inviting me to appear before you today. I look
forward to answering your questions and to working with you on S&T's
requirements gathering and acquisition management processes.
Mr. McCaul. The Chairman now recognizes himself for 5
minutes. As I mentioned in my testimony, just, I think very
disturbingly yesterday, The Washington Post reported that DHS
plans to spend millions on troubled radiation detectors, and I
want to focus on that if I can. It basically says the
Department of Homeland Security plans to spend more than $300
million over the next 4 years on radiation detection equipment
that has not been fully tested and may not work. This is
according to the budget request and report by the Government
Accountability Office. That is very concerning to me. We are
talking about detecting radiation. This is nuclear threats
against the United States in its homeland, dirty bombs perhaps
in the homeland. Mr. Maurer and Mr. Edwards, can you tell me,
particularly Mr. Maurer at GAO, tell me what the concern was
with this finding?
Mr. Maurer. Mr. Chairman, we have done a lot of work over
the past several years looking at the ASP program. It has been
trouble from pretty much Day 1. There are a number of concerns
about the program's inability to clearly meet requirements,
come up with a clear cost estimate, have good time frames for
how long it's going to take before it is finally deployed. It
is also not clear whether the new technology is actually better
than existing technology that's already deployed on the
borders.
Some of our prior works also highlighted problems with the
testing that has been done so far with the program, as well as
coordination between DNDO and CBP, the offices within DHS that
are actually developing the technology and the actual end user
of the technology. So the bottom is it has been a sick program
from Day 1.
Mr. McCaul. Mr. Edwards, very succinctly.
Mr. Edwards. We haven't looked at it because GAO was
looking at it. I concur with my colleague from GAO. We plan on
looking at this in our fiscal year 2012 plan.
Mr. McCaul. Dr. O'Toole, I want to give you a chance to
respond to this allegation in The Washington Post that these
systems may not work and that we are spending millions of
dollars on that. Can you respond?
Dr. O'Toole. Thank you, Mr. Chairman. Yes. This is not a
program run by S&T. This is a DNDO program, but I appreciate
the opportunity. One, The Washington Post article is very
misleading. There has been lots of testing of the ASP, as GAO
suggests. What hasn't been done is operational testing which is
the very last stage before you actually go in for a procurement
and try and buy something. The reason there hasn't been
operational testing even scheduled was because we don't think
we are going to procure this. The ASP program is one of these
technologies where we are pushing the envelope of physics, so
it hasn't worked as well as we had hoped.
That is true. I take no issue with what GAO just said. But
we are buying a few of these machines to put in the field to
try and understand why they don't work and if they might be
incrementally improved. Understand, the problem now is that we
are getting as many as 300 hits in a single port per day on
containers that look like they might have radioactive material
in them. Right now, our only option is to unpack each container
or go around it with a hand-held device--these are big
containers about the size of the curtain behind you--and try
and see if we can detect radioactive materials, which we think
is an unsatisfactory set of options. So ASP----
Mr. McCaul. Again, I have to move quickly because of votes
on the floor. But thank you for your testimony. Let me just
bring up another point. Mr. Maurer, you mentioned TSA lacks an
overall plan and they have spent, it is $8 billion that we are
looking at. Can you explain what you mean by they lack an
overall plan?
Mr. Maurer. Sure. Right now TSA has explosive detection
technology deployed at airports that meet two standards. Some
meet standards that were set in 1998. Others meet standards
that were set in 2005. Their long-term plan is to meet more
stringent standards that were set just last year. The work that
we conducted found that there is no overall strategic plan at
TSA to determine how long it is going to take to roll out the
new technology, in other words, update existing systems as well
as procure new systems that can meet the requirements that were
set last year.
Mr. McCaul. That is something I look forward to working
with you on in the future as well. Let me just conclude by
saying that I have had numerous, in the private sector,
numerous companies come to me and say they just can't get
access to the Department of Homeland Security. They can't get a
meeting to talk about their technologies. One company in
particular, you know, does holographic maps for the troops in
Afghanistan, has contracts with the DOD, proven technology.
Border Patrol likes these maps. They have seen them. They have
requested the Department look at these maps. Yet they can't get
a meeting with the Department of Homeland Security. I have sent
three letters asking for this meeting over the last several
months, and I have not had a response. I would hope that the
Department would be a little more responsive, not only to me,
but more importantly, to the private sector in looking at new
technologies that could make a difference. With that, I
recognize the Ranking Member.
Mr. Keating. Thank you, Mr. Chairman. I would just like to
follow up because I am concerned in this respect. It sounds
like implementing an integrated investment lifestyle model and
putting an emphasis on the front end and the back end seems
like a better approach than has been implemented. Now, my
concern is this: The House-passed budget slashed in half S&T's
money and took a huge cut out of management. Sometimes when you
are trying to cut money, you can cost more in the long run. I
want to ask you, on two sides, No. 1, internally on the
management side, how--and anyone can comment on this, how that
would compromise, that level of cut would compromise your
ability to do the management changes that you talked about that
are necessary. No. 2, and importantly so, and I think it
dovetails to what the Chairman said, with these cuts and the
inability to, I think, initiate some of those things, how can
the private sector companies work successfully with you? Is
that going to be compromised by these cuts as well? Anyone can
jump in.
Mr. Borras. I will be happy to respond to that. Mr.
Keating, the proposed cuts would have a significant, if not
drastic impact on the management directorate's ability to do
its job, particularly in acquisition. The planned reduction of
an approximately 70 percent could result, if enacted,
approximately half of the staff that currently now sits in the
management directorate having to be laid off. So it has a
tremendous impact on resources. It has an impact on our ability
to redirect our resources to areas that are in harmony with the
direction that we are taking.
For example, we have proposed a very comprehensive
strategic plan, specifically around 150 positions where we need
to strengthen the acquisition work force. These are program
managers, these are cost estimators. These are schedulers. It
is a modest $24 million expense and that alone is a significant
blow to our ability to improve the ability to be able to
provide good cost, up-front cost estimating, to be able to
better plan and understand the life cycle cost of these
programs. Plus, all of the additional oversight that we have in
place would be severely jeopardized.
Mr. Keating. Dr. O'Toole, you've been asked to do more
under the revisions that Mr. Borras has talked about. How can
you do that? What, and if I get a chance, with the roll call
running up, I am going to ask each of you could this kind of
cut actually cost more money in trying to improve the
acquisition process.
Dr. O'Toole. Yes, I think it certainly will, particularly
over a period of 2 to 5 to 10 years. The cut in S&T is very
dire. It is actually 80 percent of our R&D budget once we get
finished keeping the lights on at the laboratories and other
mandated activities, for example. We would spend what was left
on the R&D budget basically shutting down test beds that we
have already invested money in. When you make the budget for
R&D go up and down, you lose all of your sunk costs, because
R&D projects generally play out over a number of years.
So it not only will cost money in the future, but wastes
money already invested. It will also basically freeze DHS
capabilities in place because we will not be developing new
technology, either internally or with the commercial sector.
Happy to work with you, Mr. Chairman, in getting you a response
to your letter. Although I will say we are a lot smaller than
the commercial sector and they think we are a lot bigger than
we actually are so they get frustrated, not just with the plug
in, which I think we have tried to make much more user
friendly, but we just don't have the resources to pursue every
good idea. If this budget goes through, or anything close to
the House mark, we will stop doing R&D and most of our very
good people will find other employment. These are the folks in
this economy who actually have job options. These are really
good engineers and scientists and they want to do R&D. If I
tell them they are not doing R&D, they are not there to work on
acquisition.
Mr. Keating. Thank you. I am noticing we have 1 minute and
11 seconds to get to the building. So thank you.
Mr. McCaul. We are going to have to run very fast. But I
want to thank the witnesses for your valuable testimony. I
think we have an hour and a half worth of votes, so we are
going to stand in recess. I am going to go ahead and dismiss
this panel. We will come back in an hour and a half with the
second panel. If any other Members have questions they will
submit them for the record. I would ask that you respond. Thank
you so much.
[Recess.]
Mr. McCaul. The committee will come to order. I understand
we had a conversation on the Red Sox that delayed the beginning
of this hearing. I want to thank the witnesses for your
patience. I know it was a long series of votes, but we look
forward to hearing your testimony. I am sorry that we lost our
audience, but this will be a part of the record forever. Thanks
again for being here.
I want to introduce first Jim Williams, who serves as a
Vice Chair for TechAmerica's Homeland Security Committee, and
is also the Senior Vice President of Global Professional
Services. Previously Mr. Williams spent over 30 years working
in the Federal Government retiring as the Commissioner of
General Services Administration Federal Acquisition Service.
That is quite a mouthful. Mr. Williams is also the Director of
the U.S. Visitor and Immigrant Status Indicator Technology
Program, otherwise known as U.S. VISIT at the Department of
Homeland Security.
Thank you so much for being here.
Marc Pearl has served as President and CEO of the Homeland
Security and Defense Business Council since March 2008. Prior
to joining the council, Marc was a Principal and Chairman of IT
Policy Solutions, which he founded to counsel private sector
organizations in meeting their public policy challenges. He
also served as a Chief of Staff and Legislative Counsel to U.S.
Representative Dan Glickman.
Finally, Scott Amey began working at the Project for
Government Oversight in the mid-1990s as a research assistant
and returned to the organization in 2003 to direct its contract
oversight investigations. His work includes reviews of Federal
spending on goods and services, the responsibility of the top
Federal contractors and conflicts of interest and ethics
concerns. He previously clerked for the Honorable James Kenney,
III at the Court of Special Appeals in Maryland.
The Chairman now recognizes Mr. Williams for his testimony.
STATEMENT OF JAMES A. WILLIAMS, VICE CHAIR, HOMELAND SECURITY
COMMITTEE, TECHAMERICA
Mr. Williams. Thank you Chairman McCaul and Ranking Member
Keating. Thank you for providing TechAmerica the opportunity to
present the tech industry's views on integrating emerging
technologies and the contracting process at the Department of
Homeland Security. Thank you for including my written statement
as part of the record.
TechAmerica represents approximately 1,000 member companies
of all sizes from the public and commercial sectors of the
economy and is the industry's largest advocacy organization,
and our member companies provide the bulk of contract services
at DHS. TechAmerica believes the Department can improve their
process and better meet their mission. The challenges the
Department faces are not wholly related to staffing or funding.
It is our belief that this is primarily a communications
challenge. We believe these recommendations will provide
benefits to DHS that can also help DHS's partners in the
homeland security mission at the State, local, Tribal,
international, and private sector levels.
DHS would benefit from increased and on-going industry
engagement throughout the acquisition process because early and
frequent dialogue serves to introduce new cost-effective
capabilities and technologies to the Government and can be
critical to a mission's success.
First, TechAmerica fully endorses the OFPP Myth-Busting
memorandum on open communications issued as part of the 25-
Point Plan. The 25-Point Plan also established a requirement to
submit a draft vendor communications plan by June 30 to OMB for
review. TechAmerica with its member companies that do business
with public sectors around the world would be glad to offer
best practices suggestions on DHS's draft plan.
Second, RFIs and Industry Days provide important
opportunities for industry to understand DHS's needs and new
initiatives and allow industry to research the market for
technological or services solutions and team with small
businesses early in the process. More use of Industry Days with
as much detail as possible about mission goals and requirements
done early in the process will also allow for better one-on-one
discussions with better qualified potential bidders.
Another important area for successful program
implementation is end-user involvement in the acquisition
process. A system that is planned, designed, acquired, tested,
and implemented without continued engagement with the end users
provides too many opportunities for surprise, disappointment,
and failure. Government can do a better job of developing
requirements and linking them back to Government processes and
mission goals.
TechAmerica believes it is important to engage industry in
proactive and collaborative ways throughout the requirements
development process. Trade associations like TechAmerica are
beneficial sounding boards and should be used more, yet it has
become more difficult to get approval from the Department for
key senior representatives to participate in industry dialogues
with TechAmerica or of this sort.
TechAmerica does support the efforts of the DHS Chief
Procurement Officer, Dr. Nick Nayak under the leadership of
Under Secretary Rafael Borras to implement these communications
improvements. But both Government and industry must come
together with knowledge of each party's needs and processes. To
develop and improve this understanding, we encourage DHS to
create a program manager track that allows the education of
acquisition personnel and decision-makers of the common
challenges and issues regarding Government contracting.
DHS should use senior-level speakers from TechAmerica, as
the Department of Defense has done so in their senior-level
classes over the past 20 years. The use of down select speeds
the acquisition process, results in a smaller number and higher
quality proposals in the end, encourages competition and
teaming and provides for lower risk when used with fly-before-
you-buy testing on multiple solutions.
Using pilot programs more will also, when done properly,
allow the opportunity to test new processes and solutions,
attract nontraditional suppliers, better understand program
costs and speed delivery of needed solutions in the face of
critical and evolving threats. The key to increase use of pilot
programs is Departmental leadership and support.
Finally, DHS must commit to an effective safety act
implementation by improved integration with homeland security,
technology acquisition practices, including expediting
technical evaluations of safety act applications relating to
products and services procured by DHS and other Federal
Government entities.
In conclusion, the challenges we face in leveraging
emerging technologies is a question of process, not of people.
The people at DHS are doing great work and service to our
country and industry has many people that share that mission.
Thank you for allowing TechAmerica to present its views.
[The statement of Mr. Williams follows:]
Prepared Statement of James A. Williams
July 15, 2011
Good morning, Chairman McCaul, Ranking Member Keating, and Members
of the subcommittee. My name is Jim Williams, and I am Vice Chair of
TechAmerica's Homeland Security Committee. Thank you for providing
TechAmerica the opportunity to present the technology industry's views
on the contracting process at the Department of Homeland Security (DHS)
and the opportunities to leverage emerging technologies. Technology and
the services TechAmerica's companies offer play a critical role in all
aspects of the DHS mission. From the detection and prevention of
terrorism, protection of America's borders and interior, providing
resiliency after disasters, to ensuring integrity in our immigration
laws, TechAmerica's companies are focused on being part of the
solution. As the threats continue to evolve, it is vital that the more
than 230,000 employees of DHS have the modern technological tools and
the best procurement methods to face these challenges.
The role of DHS at the top of the homeland security pyramid is also
critical to the homeland security needs of State, local, Tribal,
private sector, and international partners. Improvements in DHS's
capabilities can be used by these other partners as part of a layered
strategy for meeting the homeland security mission. The more DHS
combines its acquisition buying power with that of their partners, the
more precious dollars are leveraged to provide greater mission
accomplishment. Thus, any improvements to the acquisition of better
technologies and methods within DHS can have far-reaching positive
impacts.
TechAmerica is the leading voice for the U.S. technology industry,
which is the driving force behind productivity, growth, and jobs
creation in the United States and the foundation of the global
innovation economy. Representing approximately 1,000 member companies
of all sizes from the public and commercial sectors of the economy, it
is the industry's largest advocacy organization. TechAmerica member
companies provide the bulk of contracted-out services at DHS. The
Association is also the technology industry's only grassroots-to-global
advocacy network, with offices in State capitals around the United
States and in Washington, DC, Europe (Brussels), and Asia (Beijing).
TechAmerica was formed by the merger of AeA (formerly the American
Electronics Association), the Cyber Security Industry Alliance (CSIA),
the Information Technology Association of America (ITAA) and the
Government Electronics & Information Technology Association (GEIA).
TechAmerica's extensive track record of addressing issues related
to Government contracting and procurement is well known, and we
continue to maintain a healthy program specifically focused on this
important area. Our Homeland Security Committee meets monthly to
discuss developments in this space, and senior executives from the
Government are always featured as our guest speakers. We are also
highly active within the National Defense University and Defense
Acquisition University systems where executives from our member
companies are invited to provide presentations on the industry
perspective of the Government contracting process. TechAmerica has
conducted this program for the better part of 20 years, and we believe
the frank and open dialogue that takes place at these sessions is one
factor that has led to improved procurements across the Federal
Government.
Today's hearing provides for an important moment to examine and
reflect on the current contracting process at DHS and an opportunity to
investigate new methods and modifications to that process to speed the
adoption of technologies critical to the advancement of the
Department's mission. TechAmerica and its member companies look forward
to further discussions about how to best advance the Government
contracting and procurement process and the issues I will outline
today.
difficulty of the dhs mission
The mission DHS is charged with is broad in scope, to secure and
protect the American people across nearly 7,000 miles of land border
and along 95,000 miles of maritime border. We have great respect for
the work that all DHS employees do every day on behalf of our Nation.
In the early years of the Department, focus was largely directed to
physical threats. However, in the 10 years since 9/11, the
preponderance and sophistication of cyber attacks on the homeland has
stretched the Department's resources and threat environment. America's
enemies are evolving and quickly adopting new technologies with
increased coordination and sophistication. We believe it is critical
then that the methods and technologies we utilize to face these threats
keep pace or surpass those of our adversaries.
Today DHS receives approximately 700 proposals annually in response
to requests for new technology or technology services. TechAmerica
believes there are a number of ways that the agency can improve the
process and better meet their mission. This is not wholly a staffing or
funding problem; it is our belief that this is ultimately a
communication challenge. The communications challenges occur between
the private sector and the Department and internally within DHS. From
our perspective, it appears that too frequently DHS components do not
know what the larger Department is doing, which leads to redundant
efforts, slows the pace of technology adoption, and can be wasteful of
precious funding.
industry engagement
TechAmerica fully endorses the OFPP Memorandum dated February 2,
2011, titled, ``Myth-Busting: Memo to Agency Chief Information Officers
and Chief Acquisition Officers,'' regarding the benefits of more open
communications with the private sector. Enhanced engagement was one of
the five key elements of OMB's 25-Point Plan to Reform Information
Technology Acquisition and Management. TechAmerica Foundation, in its
GTO-21 Commission Report,\1\ called for enhanced internal and external
engagement. This call laid the foundation for the 25-Point Plan, of
which more engagement and communication was an essential tenet.
---------------------------------------------------------------------------
\1\ TechAmerica Foundation, Government in Technology Opportunity in
the 21st Century (GTO-21) (2010), http://www.techamerica.org/Docs/
GTO_21.pdf.
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DHS must be more engaged with industry, especially at the earliest
stages of the procurement process. This must be an on-going
conversation where both sides share their needs and constraints and
work together to identify technological solutions. Early and on-going
dialogue serves to introduce new capabilities and technologies to the
Government buyer and is critical to mission success.
Requests for Information (RFIs), provide an important opportunity
for industry to understand the needs of the agency, begin to research
the market for technological and/or services solutions to the challenge
and prepare internally as a potential bidder. Industry days can provide
important opportunities for the Government to share some substance of
new initiative. It is important, however, that industry day events not
only provide as much detail as possible about requirements, but also be
timed far enough in advance so that Government and industry can follow-
up in one-on-one discussions to take what is learned at the event and
develop it into a successful acquisition strategy.
Industry plays a crucial partnership role with DHS in support of
their mission. The technology sector represents thousands of citizens
who take pride in their work and the safety that the technologies they
build and deploy can provide to all Americans. The more industry and
Government can work together as informed partners, the better the
results will be for all. It should be a goal of the contracting process
to match the needs of particular DHS mission requirements with the best
value solutions and services that technology companies can offer to
meet these needs in the most effective and efficient manner.
Another opportunity for engagement with industry is with trade
associations like TechAmerica. We meet monthly in an effort to hear
from senior DHS representatives to discuss how industry can best
address the ever-changing challenges in providing the technologies
necessary for carrying out the mission of DHS. But, it has become
increasingly difficult to get approval from the Department for key
senior representatives to participate in industry dialogue of this
sort. TechAmerica believes these conversations inform the decision-
making process not only of industry as we work to align our resources,
but also informs Government of the constraints of industry. DHS should
not be constrained from this important line of communication.
The ``25-Point Plan'' established a requirement to submit a draft
Vendor Communications Plan by June 30, 2011 for OMB Review. Hopefully,
this practice will help spread best practices across all departments
and agencies. TechAmerica, with its member companies that do business
with public sectors around the world, would be glad to offer best
practices suggestions on DHS or any agency's draft plans. Finally, on
the engagement and procurement fronts, TechAmerica is very supportive
of the efforts of the DHS Chief Procurement Officer, Dr. Nick Nayak.
His efforts, under the leadership of Under Secretary Rafael Borras, are
committed to helping the Department build the best possible procurement
practices into its operational structure. Under this effort the
Department has held quarterly meetings with the Top 25 contractors to
the Department. However, these meetings could have more impact if the
group was expanded to include contractors not in the Top 25.
end-user involvement
A successful program implementation must incorporate end-users in
the acquisition process. A system that is planned, designed, acquired,
tested, and implemented without on-going engagement with the end-users
provides for too many opportunities for surprise, disappointment, and
failure. Cognizance of internal processes and staff practices must be
accounted for early in the requirements process. Bringing together end-
users, program managers, acquisition professionals, and industry in
face-to-face settings, will afford the opportunity to match the true
needs or goals of the Department with what is available from industry.
This type of planning and engagement with the end-user can shorten
acquisition times and can improve the synchronization of agency needs
with industry solutions. This recommendation for the Department is
applicable to the requirements development process, but is equally
appropriate for all parts of an eventual procurement request, including
the proposal instructions, evaluation criteria, and terms and
conditions negotiations.
Moreover, providing timely and valuable communications with
industry throughout the acquisition process in terms of answers to
industry questions, as soon as possible, and understanding the status
of acquisitions will benefit all parties.
building the acquisition workforce
To improve the contracting process, both industry and Government
must understand each party's needs and background.\2\ To develop and
improve this understanding we encourage DHS to create a program manager
career track to educate decision makers of the common challenges and
issues regarding Government contracting.
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\2\ TechAmerica, TechAmerica's Twenty-First Annual Survey of
Federal Chief Information Officers: Leveraging Technology to Improve
the Performance of the Government, (2011) http://www.techamerica.org/
Docs/fileManager.cfm?f=2011_cio_survey.pdf.
---------------------------------------------------------------------------
For the last 20 years, TechAmerica has provided senior executive
level speakers to present an industry perspective of procurement at
Defense Acquisition University and National Defense University classes
throughout the country. The presentation provides students with the
industry perspective of the contracting process and how each step of
the process affects a corporate actor's culture and workflow.
Specifically, students get detail on how industry must create a
business case and what influences whether a company bids on a specific
program or not, and how we forecast the allocation of our resources to
ready implementation. Further, it is an opportunity for our speakers to
learn more about Government structure and the decision-making process.
We recommend that DHS incorporate a similar curriculum element in its
acquisition training requirements to provide program managers with an
opportunity to learn more about the industry decision-making
perspective.
contracts management and coordination
DHS would benefit from a streamlined contracts management process
and better coordination across divisions. There are opportunities for
DHS to increase their efficiencies in the contracting process including
increased use of ``down select'' contract selection, better timing of
requests for information and better use of existing past-performance
databases to aid the selection process for DHS.
Increased Use of ``Down Select''
The use of ``down select'' speeds the process of procurement,
lowers the cost to industry of participating in the proposal process
and encourages competition and teaming. As a key part of the
acquisition strategy, the Department recently conducted procurements
where an initial review of qualifications and proposals from vendors
allowed them to ``down select'' to a smaller pool of qualified
competitors. The most recent example of this is Customs and Border
Protection's Mobile Surveillance Capability. This strategy allows the
Department to select two or more solutions that can be more thoroughly
tested in the field before either down selecting to a single contractor
or maintaining the option to take two or more solutions into
production. This approach reduces risk to the Government through a
``fly before buy'' trial period, allows for the refinement of the
requirements and allows more participation by industry which creates
greater incentive for industry to invest than under a winner-take-all
approach.
However, just using the ``down select process'' anywhere in the
acquisition process to narrow the field will result in higher quality
of proposals in the end and offer more opportunities to engage and
communicate with a smaller number of bidders.
Better Contract Structure
One example is to set the page limit for a bid higher. Recently,
DHS put out a call for proposals with a 30-page limit. With such a low
page limit, DHS was forced to sift through many more proposals than
necessary and re-purpose an already thin staff away from other
projects. Thirty pages is not enough for a company to sufficiently
describe its capabilities and solution for addressing DHS's need. More
detailed requirements would ensure responses are compliant and deliver
needed solutions.
Furthermore, this process did not encourage industry to participate
in an effective way. Understanding what the Department or its
components can do to encourage teaming can help improve the quality of
the bids, help focus small business participation and help to
streamline communication with a smaller number of bidders.
Contractor Workforce
The Department must also take into account the impact of their
requests on the private sector workforce. A recent DHS program set an
award date for April 2012 and required designations of key personnel in
the proposal. A requirement of this kind, forecast this far out in the
future, is extremely difficult if not impossible for industry to meet.
To set aside personnel for a potential project a year from now puts
industry in the difficult, costly, and potentially career-damaging
position of long-term personnel guessing exercises.
TechAmerica would also recommend that the Department and its
components leverage existing acquisition vehicles where it makes sense
to best allocate both Government's and industry's scarce acquisition
resources and lower the Government's costs. These efforts could be
formalized in a ``Best Practices'' guide for contracting to be shared
across all components.
requirements development process
Government can do a better job of developing requirements and
linking them back to Government processes and mission goals. More RFIs
would give industry a better idea of the end-user needs and allow DHS
to better structure and refine their Requests for Proposals (RFPs) to
allow for more innovative, best value solutions. As an example,
TechAmerica would point to the technique used at the Department of
Veterans Affairs whereby industry is brought in to meet with IT
professionals. Through these exchanges, the needs of the end-user can
be more clearly defined and translated into the IT requirements.
TechAmerica believes it is important to engage industry in
proactive ways throughout the requirements process. Providing drafts,
hosting industry days, and showing future plans with as much detail as
possible can help industry to coordinate and meet the mission of DHS.
We see our relationship as partners and are committed to the success of
their mission. Threats evolve fast and technology evolves faster,
making it critical that industry and Government are in sync.
integrating a formal systems acquisition process
The Department of Homeland Security would benefit from a formalized
systems acquisition process. Government has historically utilized long-
term contracting to procure goods and services, however, in information
technology, a procurement process based in agile development yields
incremental capabilities faster with greater returns on investment.
Technology is an evolving resource and upgrades and enhancements come
rapidly. The adoption of an agile procurement process would permit
Government to more rapidly deploy modular technologies and revisions
rather than large-scale programs that have greater cost of money and
time before mission success can be evaluated.
use of pilot programs
DHS does not use pilot programs enough. Legislation allows for the
Department to take advantage of the use of pilots. The use of pilot
programs allows an agency to try new approaches and obtain waivers from
most statutory and regulatory structures which appear to add
inefficiencies and costs to mission accomplishment. Pilots, done
properly, allow the opportunity to test new processes; introduce
commercial solutions; attract non-traditional suppliers; and speed
delivery of needed solutions in the face of critical threats. The key
to increased use of pilot programs is leadership within the Department.
Leadership must promote and support pilot programs and provide top
cover in the event the pilot doesn't deliver the expected outcome.
keep the safety act viable
The Federal Government, and DHS in particular, must improve the
integration of the SAFETY Act's risk management and liability
protection provisions with homeland security technology acquisition
practices.
Congress passed the SAFETY Act, part of the Homeland Security Act
of 2002, to address the potential risk exposure for companies supplying
anti-terrorism technologies. The SAFETY Act program has been
operational since 2004, but DHS has yet to effectively integrate the
SAFETY Act with its anti-terrorism technology procurement activities.
The DHS acquisition process and the SAFETY Act review process must
be aligned, including expediting technical evaluations of SAFETY Act
applications relating to products and services procured by DHS and
other Federal Government entities. Addressing liability considerations
at the forefront of technology acquisition activities will yield
greater competition in, and better results for, investments in homeland
security technologies.
DHS should improve efforts to educate Federal contracting officials
regarding the SAFETY Act and the SAFETY Act-related changes to the
Federal Acquisition Regulation (``FAR'') that were effective February
17, 2009. FAR subpart 50.200 implements the SAFETY Act's liability
protections to promote development and use of anti-terrorism
technologies.
DHS should update and publish its agency-specific procurement
regulations and procurement procedures in light of the FAR SAFETY Act
provisions so that other Federal agencies may implement corresponding
updates to their respective procurement regulations and practices.
Federal contracting officials should be instructed to ensure that
SAFETY Act considerations are included among the procurement checklists
that contracting officers must complete for technology procurements.
Federal program managers as well as contracting officers should
consider whether requesting a SAFETY Act Pre-Qualification Designation
Notice (as provided in the FAR) would enhance competition with respect
to particular homeland security technology procurements.
DHS leadership must demonstrate focus and commitment to effective
SAFETY Act implementation by improved integration with homeland
security technology acquisition practices.
conclusion
The people of DHS are doing great work in service of their country.
Industry also has many people and companies that share this mission and
seek to improve our partnership and communication to better accomplish
this mission. The challenges we face in leveraging emerging
technologies is more a question of process, not of people.
I would like to once again thank the committee for allowing
TechAmerica to share its views, but more importantly, for focusing this
hearing on the important need for improving the contracting process in
order to ensure that most up-to-date technology is utilized in order to
support the mission of DHS and secure our Nation. TechAmerica and our
member companies look forward to continuing to work with you on this
important issue. Thank you and I would be glad to answer any questions
that you may have.
Mr. McCaul. Thank you, Mr. Williams. The Chairman now
recognizes Mr. Pearl to testify.
STATEMENT OF MARC A. PEARL, PRESIDENT AND CEO, HOMELAND
SECURITY & DEFENSE BUSINESS COUNCIL
Mr. Pearl. Thank you, Mr. Chairman and Ranking Member
Keating. I want to thank you for giving the Council an
opportunity to testify before you today.
Our organization, as you well know, consists of the leading
providers of homeland security solutions for our Nation. Our
major purpose is to facilitate a substantive dialogue between
industry and Government on critical homeland security issues
and to ensure that the private sector's perspectives,
innovation, expertise, and capabilities are maximized in
securing our Nation.
In addition to my full written testimony, I would ask that
the Council's principles on Federal contracting and
procurement, which we conducted a couple years ago as a part of
a major survey, be made part of this record.
My testimony today focuses on providing you with our
collective industry's perspective on how DHS and Congress can
work together more effectively with the private sector to
improve the homeland security procurement and acquisition
process. While the challenges associated with contracting and
procurement are complex, as your opening comments stated, as
well as the previous panel went into, the Council believes that
some of the following steps can further improve the processes
and procedures leading to our shared goals and mission, which
is mission success.
Three things. The Department needs to develop a long-term
acquisition strategy. Second, it needs to develop open and
transparent processes, practices, and procedures that
facilitate a well-defined contract requirement which will
generate competition and then provide incentives for the
private sector to participate in the process. Third, a
standardized centralized procurement process together with an
educated workforce capable of planning and executing the
process.
First in summary. The first one, the need to develop a
long-term strategy. Industry serves, as you well know, a vital
role in providing the technologies, the products, and the
services, what we call the solutions, in the whole aspect of
homeland security. DHS needs to operationalize and succeed in
its mission to in essence bring those in. Industry does not,
however, have limitless resources to develop to provide those
homeland security solutions in a void. Particularly, in the
current economic environment we cannot waste time or money on
building speculative technologies that we believe should or
could be incorporated into our Nation's homeland security
efforts. The development of mid-term and long-term strategic
acquisition plans would create a more predictable homeland
security acquisition environment, allowing then the private
sector to then have the ability to anticipate what the
Government needs and efficiently martial the resources in order
to meet them. When companies are given a blueprint of what the
Government's future needs are, they will have the time to plan
appropriately, align technology, align financial and personnel
resources to address those needs.
Now, we do applaud DHS's announcement this past week on
acquisition planning forecast system that is intended to
provide the private sector with some real-time access to the
DHS forecast of contract opportunities in the near- to the mid-
term, but had that will not satisfy the need for long-term
strategic acquisition planning.
Second is with respect to the need to develop early open
and transparent processes. The DHS, working with industry, must
better define and calibrate requirements to match mission
objectives and achieve mission goals. Because the Government
cannot define those needs in a vacuum or by itself alone, we
believe strongly that the processes, the practices, and the
procedures that facilitate early substantive engagement with
the private sector in an open and transparent manner should be
developed long before an RFP is initiated. Additionally, as Mr.
Williams mentioned, DHS should conduct more industry days
sufficiently in advance of the procurement, not during it or
when it already knows what it is going to be. RFIs and websites
such as FedBizOpps could be used much more effectively.
Last, the need to develop a standardized and centralized
procurement process. Much progress has been made in the last
8\1/2\ years, but DHS still needs a stronger, more centralized
acquisition process that moves away from the current stove-
piped environment. At least 11 unique and potentially
duplicative procurement processes with limited DHS-wide
leverage still exists across the agency. A clear DHS-wide
process, acquisition process, and the use of the same
communication tools would not only enhance efficiency but would
provide the needed transparency so that end-users, acquisitions
and operations officials, and industry could work more
effectively together.
In conclusion, I want to reiterate our shared goal, to
achieve the most successful outcome for all stakeholders
through a process that is transparent, accountable, timely,
cost-effective and that encourages competition, innovation and
investment in the homeland security marketplace. If industry,
Congress, and DHS all work together to find ways to communicate
and engage prior to and throughout the procurement process,
mission success is that much more attainable. I thank you for
the opportunity. The Council looks forward to working with this
subcommittee and the entire committee, and I will take any
questions.
[The statement of Mr. Pearl follows:]
Prepared Statement of Marc A. Pearl
July 15, 2011
introduction
Chairman McCaul, Ranking Member Keating, and distinguished Members
of the subcommittee, I thank you for giving the Homeland Security &
Defense Business Council an opportunity to appear before you today to
discuss the important issues that relate to the Department of Homeland
Security's (DHS) procurement policies and procedures, particularly as
they relate to developing and deploying emerging technologies, as well
as the Department's outreach to the private sector.
I am Marc Pearl, President and CEO of the Council, a non-partisan,
non-profit organization of the leading homeland security solution
providers. Collectively, our members employ more than 3 million
Americans in all 50 States and provide expertise in technology
development and integration, facility and networks design and
construction, human capital, financial management, and program
management. We are honored and proud to work with our country's leaders
in civilian, defense, and intelligence agencies to advance and achieve
their strategic initiatives. The purpose of the Council is to
facilitate two-way substantive dialogue between the private sector and
Government on critical homeland security issues and to ensure that the
private sector's perspectives, innovation, expertise, and capabilities
are maximized in securing our Nation.
At the outset, the Council wants to express our appreciation to
this subcommittee and to the full Committee on Homeland Security for
your continued leadership on the full range of issues associated with
improving the contracting and procurement process within Government and
encouraging partnerships and substantive engagement with industry.
In addition to this written testimony, we would also like to bring
to the subcommittee's attention two relevant documents that serve to
further illuminate the Council's perspective. The first is our
Principles on Federal Contracting and Procurement, developed in late
2009 after surveying our entire membership, which describes some of the
challenges surrounding Federal contracting and procurement. We have
shared this document with Secretary Napolitano and other
representatives within DHS. The second document was my testimony before
the House Committee on Science, Space and Technology's Subcommittee on
Technology and Innovation, in a hearing entitled, ``An Overview of
Science and Technology Research and Development Programs and Priorities
to Effectively Protect Homeland Security'' that was held this past
March. That testimony focused on research and development (R&D)
programs and recommendations that related to the reorganization of the
DHS Science & Technology (S&T) Directorate. While the R&D issues in the
S&T Directorate are not the emphasis of our testimony this morning, we
are cognizant of the Oversight Subcommittee's deep and abiding interest
in this issue and how it views its interrelated nature to the
contracting and procurement issue. It is our understanding that members
of the subcommittee's staff are aware of this testimony.
The Council's testimony today will focus on providing the
subcommittee with our collective industry's perspective on how DHS and
Congress can work together more effectively with the private sector to
improve the homeland security procurement and acquisition process. As
recognized in the April 2011 DHS Office of Inspector General (OIG)
Report on ``DHS Oversight of Component Acquisition Programs,''
acquisitions consume a significant part of the DHS annual budget and
are fundamental to the Department's ability to accomplish its mission.
Acquisition management is a complex process that requires an effective
and efficient acquisition management structure. It begins with the
identification of a mission need; continues with the development of a
strategy, process, and a strong organization to fulfill that need; and
concludes with contract closeout after satisfactorily meeting the
terms. If any infrastructure component is deficient, the entire process
is at risk for failure.
Council members--indeed all providers of homeland security
solutions for our Nation--together with DHS and Congress, share the
same goal: To achieve the capabilities needed by DHS for mission
success through a process that is transparent, accountable, timely,
cost-effective, and that encourages competition, innovation, and
investment in the homeland security marketplace. No one wants to see,
nor can afford, to have time, money, and resources wasted. To reach
this shared goal, the Council strongly believes that we need to
concentrate on developing three things:
(1) A long-term acquisition strategy;
(2) Open and transparent processes, practices, and procedures that
facilitate well-defined contract requirements, generate
competition, and provide incentives for the private sector to
participate in the process; and
(3) A strong organization with a standardized and centralized
procurement process and a workforce capable of planning and
executing the process.
In addition to sharing the same goal, we each have a role in
meeting the goal. Congress can provide funding, direction, and
oversight to the programs and capabilities needed by DHS to achieve its
mission. If DHS and industry work together, with DHS developing greater
engagement and communication with industry prior to and throughout the
entire procurement process, we can leverage already existing
technology, experience, expertise, and dollars to accomplish that
shared goal.
While the challenges associated with contracting and procurement
are complex, the Council is recommending the following steps that we
believe will further improve the process, procedures, people and the
ultimate outcome--mission success:
1. Development of a Mid- to Long-term DHS Strategic Acquisition Plan
The private sector serves an important role in providing the
technologies, products, and services--``the solutions''--that DHS needs
to operationalize its mission. However, industry does not have
limitless resources to devote to homeland security solutions in a void.
Particularly in the current economic environment, the private sector
cannot waste time and money on building speculative technologies that
they believe ``should'' or ``could'' be incorporated into our Nation's
homeland security efforts. They want to develop and deliver the
solutions that the Department and our Nation needs.
While we do not want to diminish the value of the Quadrennial
Homeland Security Review (QHSR), the Bottom-Up Review process, and DHS'
overall 5-year strategic plan, the Council strongly believes that DHS
must develop a mid- to long-term strategic acquisition plan. The lack
of a predictable homeland security acquisition environment impedes
industry's ability to anticipate Government needs and efficiently
marshal the resources to meet them.
Such a strategic acquisition plan would indicate the intended
direction, or change in direction, with programs of record and other
major, multi-year procurements, as well as identify DHS acquisition
guiding principles, objectives, and targets. This would give companies
a blueprint for Government's future needs and the time to plan
appropriately by aligning financial and personnel resources towards
addressing those needs.
In the past week, DHS announced the upcoming release of the
Acquisition Planning Forecast System, which is intended to provide the
private sector with real-time access to the DHS forecast of contract
opportunities. We applaud the development of this tool as a way of
attempting to address the issue in the near to mid-term. While it does
not satisfy the larger issue of long-term strategic acquisition
planning, we recognize it as a step forward in the right direction. Any
assistance that Congress can provide in guiding the development of a
long term strategic acquisition plan would go a long way in providing
the foundation for all interested parties to achieve mission success.
2. Development of Open and Transparent Processes, Practices, and
Procedures That Facilitate Well-Defined Contract Requirements,
Generate Competition, and Provide Incentives for the Private
Sector to Participate in the Process
A. Engaging the Private Sector Before the Procurement
Process Even Begins Will Result in Well-Defined
Contract Requirements and Better Performance/
Results
The private sector wants to develop the capabilities that
Government needs to achieve mission success. To accomplish this, the
Government must provide industry with well-defined contract
requirements. If the requirements in a procurement contract are vague
and subject to different interpretations, it increases the potential
for an increased or lost cost of development, duplication of effort,
and a resulting product or service that fails to meet the Government's
expectations.
Defining the needs in a clear and concise fashion is not a job that
Government can or should do alone. DHS must develop processes,
practices, and procedures that facilitate early substantive engagement
with the private sector in an open and transparent manner long before a
Request for Proposal (RFP) is initiated. Industry input is essential to
help define and calibrate requirements to match mission objectives and
achieve mission goals. The more complex the procurement, the more
critical the need for an open information exchange. Transparency is
also necessary to ensure that no one feels that a particular
technology, product, service, or solution is being highlighted or
unfairly selected. It also helps in defining the ultimate need. If all
participants understand and adhere to ``rules of engagement,'' we can
optimize the input and exchange between the public and private sectors.
Contracting professionals often have a limited understanding of the
private industry and limited exposure with the skills, experiences, and
capabilities of potentially valuable companies. By engaging with the
private sector prior to beginning the procurement process, DHS
personnel, for example, can conduct more effective market research and
gain a greater understanding of existing and emerging technologies,
learn the appropriate industry terminology and concepts associated with
the desired service or equipment, identify potential contractors that
provide the item, and determine the correct scope of the requirements
that best fit the existing vendor base.
The Council strongly supports DHS engaging the private sector by
conducting more Industry Days sufficiently in advance of procurements
to enable the Government to examine and understand the technology that
already exists and begin a dialogue that helps define requirements.
Industry is also encouraged to see the Government issuing more Requests
for Information (RFIs) on the FedBizOpps website, and hopes this trend
continues in the future. An RFI provides a mechanism for the Government
to seek advice and recommendations from the private sector before a RFP
is issued. It allows the Government to conduct market research to
identify what kind of products or service solutions are commercially
available. It asks industry to offer solutions for agency requirements
or objectives; and facilitates the collection of information about
companies with the appropriate capabilities, products, experience, and
expertise. Through this interactive tool, Government and industry can
have a continuous two-way dialogue that results in requirements that
are greatly improved from when the RFI was first issued.
We must stress that the exchange of information with the private
sector cannot stop at the issuance of a RFP, it must continue
throughout the entire procurement process, particularly when
information previously provided has changed. DHS should continue to use
and further develop acquisition websites that provide information for
specific identified procurements, definitions of terminology and
milestones, and regular updates to time schedules, future needs, and
other previously provided information.
B. Use of Procurement Vehicles That Generate Competition,
but Still Provide Incentives for the Private Sector
to Participate in the Process
The Council also stresses the need for procurement vehicles that
generate competition and provide incentives for the private sector to
participate in the process. Industry supports the need for competition
in the contracting process but stresses the need for DHS to balance
these interests and understand the acquisition from the viewpoint of
the contractor. Too much and/or too little competition is
counterproductive.
One type of procurement vehicle often used by Government is the
indefinite delivery/indefinite quality (IDIQ) contracts. While these
types of contracts provide flexibility to the Government, there have
been problems when the selection criteria are not well-defined or the
process is too burdensome. The goal must be to ensure that the task
order vehicle is responsive to both Government and to the client. The
private sector must have an incentive on the task order. If too many
companies participate, a company may think they have no chance of being
awarded the contract and decide it is not worth the time or money to
participate. On the other side, if too many companies are given task
orders, it becomes difficult and time-consuming for Government to
manage the contracts and make good decisions.
DHS must do a better job of selecting a reasonable number of
companies to participate in the process so that companies have an
incentive to compete. This will result in better time management and
ensure contract outcomes that are in the best interest of Government
and the private sector.
3. Develop a Strong Organization That Has a Standardized and
Centralized Procurement Process and a Workforce Capable of
Planning and Executing the Process
A. Development of a Standardized and Centralized DHS
Acquisition and Procurement Process
DHS needs a stronger, more centralized acquisition process that
moves away from the current stovepiped environment. While much progress
has been made since its creation, DHS still has a long way to go in
ensuring collaboration, coordination, and communication across the
agency. Combining almost 2 dozen agencies with different processes and
cultures to form a new department was guaranteed to create challenges.
The Council believes that it is critical to establish an operating
policy that facilitates effective engagement within DHS' components and
with the private sector. There are at least 11 unique procurement
processes across the agency with limited DHS-wide leverage. Large
components run their own processes in different ways and many times
inconsistently. This can result in duplicative efforts. DHS needs more
communication internally and with other agencies to effectively
identify potential technologies that it could leverage in support of
other missions. These opportunities are often only discovered when the
private sector brings them to their attention. The development of a
clear DHS-wide acquisition process and the use of the same
communication tools would not only enhance efficiency, but would
provide needed transparency so that end-users, acquisition and
operations officials, and industry can work together.
In addition, DHS must also have a strong R&D process and S&T
Directorate that keeps us ahead of the curve so we can obtain the most
effective and efficient technologies, services, and solutions that
address our country's security needs. If we can improve coordination of
these programs within the procurement and acquisition process, we will
get even better results. As I mentioned in my introduction, my
recommendations on these issues are contained in my testimony from
March 2011 that focused on reorganization of the DHS S&T Directorate.
While not the focus of my testimony today, I draw your attention to
those recommendations because the R&D and S&T issues contribute to a
strong organization and are interrelated to the contracting and
procurement issue.
B. Ensure a Workforce Capable of Planning and Executing the
Procurement Process by Increasing the Quantity and
Quality of Public Sector Contracting Personnel
We urge Congress to recognize and help address the shortage of
acquisition and procurement staff across the Department. DHS needs the
ability to increase the number of procurement officers with expertise
in technology, engineering, and management to accomplish the complex
operational aspects of oversight and review. Contracting officers must
be accessible, interactive, and open to sharing concerns and approaches
for various aspects of a particular procurement. They must also value
and understand input and substantive dialogue with the private sector
both pre- and post-award. Such an exchange is particularly valuable at
a time when procurements have become more complex. To accomplish these
goals, Congress should support programs that further the development,
training, and retention of acquisition professionals. This could be
accomplished, in part, by ensuring continued funding for the
acquisition ``intern'' program.
The Council has long advocated, for example, that DHS develop an
exchange program with the private sector to improve the management
abilities and technical and professional competencies of its employees.
A professional exchange program would offer DHS direct insight into the
philosophy, procedures, and practices of industry. It would provide
public sector professionals with an opportunity to examine industry
policies and processes, as well as learn first-hand how industry
addresses contracting and procurement issues. This would allow DHS to
interpret the needs of the Department in industry terms. By studying
the best practices of the industry, Government professionals are able
to bring new knowledge, understanding, and empathy back into the
Department to improve its processes. The process would also benefit
industry, which would gain a better understanding of the unique
perspective and experience of the DHS professional. Obtaining such
direct insight and experience is currently unavailable in DHS.
conclusion
As I stated in my introduction, we all share the same goal: To
achieve the most successful outcome for all stakeholders through a
process that is transparent, accountable, timely, cost-effective, and
that encourages competition, innovation, and investment in the homeland
security marketplace. Today's procurement processes need to be more
flexible, inclusive, and dynamic to change. The Council and its members
have worked closely and successfully to nurture a substantive
relationship with the Management and S&T Directorates to discuss and
develop innovative solutions to protect our country. But even amidst
the establishment of these relationships, the business sector, as a
whole has struggled to comprehend the long-term strategic needs and
goals of DHS. This has made our long-term investments toward new
technologies that might become effective solutions, challenging at
best. Similar to the Federal sector, industry has limited resources to
devote to developing homeland security solutions in a void. As we have
already stated, they cannot dedicate resources to building speculative
technologies--we want to deliver the solutions that DHS and our Nation
needs.
We respectfully ask for you to consider, provide guidance and
continued oversight, and help facilitate the steps we have recommended
to improve the process and outcome for all stakeholders:
1. Development of a long-term acquisition strategy;
2. Development of open and transparent processes, practices, and
procedures that facilitate well-defined contract requirements,
generate competition, and provide incentives for the private
sector to participate in the process; and
3. Development of a strong organization with a standardized and
centralized procurement process and a workforce capable of
planning and executing the process.
While DHS is still a relatively young agency and is still evolving,
there is no need to constantly reinvent the wheel. There are many best
practices and lessons learned, (both positive and negative), available
from other Federal agencies that have decades of experience with
procurement and acquisitions.
On behalf of the Homeland Security & Defense Business Council, I
appreciate the opportunity to provide the collective perspectives of
industry on the important issues before the subcommittee. The Council
is willing to provide or facilitate any support, expertise, and input
you need to ensure that we can all work together to achieve mission
success.
Mr. McCaul. Thank you, Mr. Pearl. We look forward to
working with you as well.
Mr. Amey is now recognized.
STATEMENT OF SCOTT AMEY, GENERAL COUNSEL, PROJECT ON GOVERNMENT
OVERSIGHT
Mr. Amey. Thank you. I want to thank Chairman McCaul,
Ranking Member Keating, and the subcommittee for asking the
Project On Government Oversight, also known as POGO, to testify
about issues related to homeland security contracting.
Throughout its 30-year history POGO has created a niche in
investigating, exposing, and helping to remedy waste, fraud,
and abuse in Federal contract spending. We have supported many
reforms that enhance competition, accountability, and
oversight. Additionally, we have voiced concern about
contracting vehicles that place taxpayer dollars at risk. We
consider our work essential to protecting taxpayers because the
Government is now spending over $530 billion each year on
contracts for goods and services.
DHS's mission is extremely varied and difficult, and must
protect the President, oceans, borders, airports, and help
those in need after natural disasters. As a result, DHS has to
be on the cutting edge of new technologies and services to stay
at least one step ahead of threats to our Nation, yet it still
must protect taxpayers and spend money wisely, which raises two
questions: No. 1, what are we buying? No. 2, how are we buying
it?
I will discuss the how first because the numbers are
relatively positive. DHS spent $13.6 billion on contracts in
fiscal year 2010, which is down from its peak spending of $16.5
billion in fiscal year 2006. The purchase of services is
outpacing goods with approximately $10 billion being spent on
service contracts. That might raise some concerns for this
subcommittee as service contracts can be difficult to
administer and oversee due to the fact that DHS is paying for
time and hours worked.
For the most part the agency has awarded contracts under
competitive procedures. According to Federal procurement data,
approximately 85 percent of DHS contract dollars, which is 74
percent of its transactions, were awarded through competitive
procedures. These numbers have dramatically improved since
fiscal year 2006 when DHS was awarding competitive contracts
less than 60 percent of the time.
Data on the types of contracts utilized is incomplete and
therefore this subcommittee should consider requesting detailed
information about the types of contracts being used. This
subcommittee might also want to inquire about DHS's use of
other transaction authority, which was raised in this morning's
comments, especially since that authority is set to expire on
September 30.
Hearings have been held and reports have been issued about
DHS's use of OTs, but many of those are 3 years old. My written
testimony provides a more detailed summary of concerns that
POGO has related to OTs, but I will raise the following
questions that this committee should consider asking:
Is DHS's other transaction authority still meeting policy
objectives? Are OTs being used in the right situations? Are
oversight controls ensuring that OTs are not placing taxpayer
funds at risk? Where is the latest GAO annual report authorized
by section 831? With daily advances in technology are the items
procured under other transaction authority still in use and
essential in protecting against emerging threats? I would say
that is probably not even just for OTs, but that is also for
S&Ts, T&Es.
So I formed a whole sentence with acronyms. Hopefully I get
a pat on the back for that.
Are OTs being converted to FAR-based contracts? Assuming
that DHS needs other transaction authority, is this
subcommittee considering alternatives to the annual sunset
provision?
More to the point of today's hearing is whether DHS is
effectively leveraging emerging technologies. From a
contracting perspective this is a difficult question to answer.
DHS certainly bought new technologies, but how much safer are
we? Many years ago I testified before the full Homeland
Security Committee and stated that DHS was buying infant
technologies that were unproven and sometimes provided little
or no benefit to the agency. It is one thing for those programs
to fail while in their infancy, but it is another for those or
other troubled programs to do so 10 years later. Any questions
about DHS's effectiveness might only be answered if and when
the next disaster or terrorist attack take place.
A GAO report released yesterday documented that in the past
DHS technologies were deployed before appropriate testing and
evaluation was successfully completed, including the deployment
of technologies that had unreliable performance, including the
deployment of technologies that included the removal of 101
airport puffer machines from airports, as well as SBInet now
being kind of scrapped and reevaluated. Without more
information and oversight it is nearly impossible to determine
if DHS is effectively leveraging new technologies that would
protect the country from emerging threats, and my fear is that
only time will tell.
Thank you for inviting me to testify today. I look forward
to answering any questions that you may have and to working
with the subcommittee to further explore how DHS contracting
can be improved.
[The statement of Mr. Amey follows:]
Prepared Statement of Scott Amey
I want to thank Chairman McCaul, Ranking Member Keating, and the
subcommittee for asking the Project On Government Oversight (POGO)\1\
to testify about issues related to Department of Homeland Security
contracting. I am Scott Amey, POGO's General Counsel.
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\1\ Founded in 1981, POGO is a nonpartisan independent watchdog
that champions good Government reforms. POGO's investigations into
corruption, misconduct, and conflicts of interest achieve a more
effective, accountable, open, and ethical Federal Government. For more
information about POGO, please visit www.pogo.org.
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Throughout its 30-year history, POGO has created a niche in
investigating, exposing, and helping to remedy waste, fraud, and abuse
in Government contract spending. We have supported many reforms that
enhance competition, accountability, and oversight. Additionally, we
have voiced concerns about contracting vehicles that often place
taxpayer funds at risk, including cost-reimbursable, time and material,
and labor hour contracts, as well as ``other transaction
authority.''\2\ Many acquisition reforms were imposed prior to the
large increase in Federal contract spending (which exceeded $537
billion in fiscal year 2010), consolidation in the contractor
community, the large-scale hiring of contractors to perform Government
services, and increased demands on the acquisition workforce to do more
with less, which has led to waste, fraud, and abuse. Fallout from the
War on Terror and Hurricane Katrina also highlight how drastically
different the Federal Government's contracting landscape is now from
what it was in past years.
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\2\ The Federal Acquisition Streamlining Act of 1994 (FASA) (Public
Law 103-355), the Federal Acquisition Reform Act of 1996 (FARA) (Public
Law 104-106), the Services Acquisition Reform Act of 2003 (SARA)
(Public Law 108-136), and 10 U.S.C. 2371 have removed taxpayer
protections.
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DHS's mission is to prevent terrorist attacks in the United States,
reduce America's vulnerability to terrorism, and minimize damage from
terrorism and natural disasters. To fulfill this mission, DHS has a
vast organizational mandate that ranges from protecting the President
(U.S. Secret Service), to protecting our oceans (U.S. Coast Guard), to
protecting our borders (Customs & Border Protection and Immigration &
Customs Enforcement), to protecting our airports (Transportation
Security Administration), and to helping every town, city, county, and
State in relief, recovery, and reconstruction efforts (Federal
Emergency Management Agency). As a result, DHS has to be on the cutting
edge of new technologies and services to stay at least one step ahead
of threats to our Nation. Yet, it still must protect taxpayers and
spend money wisely.
how dhs is buying
According to Federal contract data, the Department of Homeland
Security spent $13.6 billion in contracts in fiscal year 2010.\3\ That
total is less than the agency's peak contract spending total of $16.5
billion in fiscal year 2006.
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\3\ All contracting figures were compiled using USAspending.gov
unless stated otherwise.
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DHS spent $3.2 billion on goods and more than $10 billion on
services in fiscal year 2010. For the most part, the agency has awarded
contracts under competitive procedures--according to Federal data,
approximately 85 percent of DHS contract dollars (and 74 percent of
contract transactions) were awarded through competitive procedures.
These numbers have dramatically improved since 2006 when DHS was
awarding genuinely competitive contracts less than 60 percent of the
time.
Data on the type of contracts utilized is more difficult to
analyze, as much of that data is incomplete. That said, is appears that
DHS used fixed-price contracts for over $7 billion worth of contracts
in fiscal year 2010. The data further indicate that nearly $4 billion
was spent using riskier types of cost-reimbursement and time and
material contracts that are prone to waste, fraud, and abuse, and
should be carefully watched.
``Other transaction authority'' (OTA) is another risky procurement
vehicle that should be a concern to this subcommittee, especially since
that authority is set to expire on September 30, 2011.\4\ Other
transaction authority is a term commonly used to refer to the authority
to enter into other transactions (OT) agreements other than contracts,
grants, or cooperative agreements. OT agreements are customized
agreements rather than contracts that can be specifically tailored
based on the Government's needs. The intent was to lure leading-edge
non-traditional companies that were not doing business with the
Government.\5\ The inherent problem, however, is that rather than the
Government controlling what it needs, the OT contractors are placed in
the powerful position of saying ``here's what we will do for you.''
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\4\ Department of Defense and Full-Year Continuing Appropriations
Act, 2011 (Pub. L. 112-10), Section 1651, April 15, 2011. In 2002, DHS
received OTA for research and development prototype projects. Homeland
Security Act of 2002 (Pub. L. 107-296), Section 831, November 25, 2002.
The Homeland Security Act refers to the authority that the Secretary
may exercise to carry out research and development projects and
prototype projects under 10 U.S.C. 2371 and the National Defense
Authorization Act for Fiscal Year 1994 (Pub. L. 103-160), Section 845,
November 30, 1993. The authority, initially granted for 5 years, has
been extended each year, but sunset on September 30, 2011. 6 U.S.C
391(a). The Transportation Security Administration also has authority
to enter OT agreements. Aviation and Transportation Act, (Pub. L. 107-
71), Section 101, November 19, 2001; 49 U.S.C. 106(l)(6).
\5\ Congressional Research Service, ``Other Transaction (OT)
Authority,'' January 27, 2010, pp. 23-25. http://assets.openers.com/
rpts/RL34760_20100127.pdf (Downloaded July 14, 2011) (Hereinafter Other
Transaction (OT) Authority).
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Other transactions generally are not subject to the Federal laws
and regulations governing procurement contracts. Therefore, OTA is
exempt from the usual contracting controls and oversight mechanisms in
contracting statutes, the Federal Acquisition Regulation (FAR) (in
particular Truth in Negotiations Act regulations and Cost Accounting
Standards), Government audits, and Small Business Act requirements for
small business participation.\6\
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\6\ Other Transaction (OT) Authority, pp. 18-22.
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The Congressional Research Service has voiced several concerns
about the use of OTs:
``The nature of other transaction authority contributes to the
challenge of evaluating OTs. Freed from adhering to the FAR and certain
procurement statutes, an agency can tailor an OT to the needs and
circumstances of a particular project and the participants, which means
the usual methods or vehicles for monitoring contractor performance--
such as contract administration and audit services (Part 42 of the FAR)
and quality assurance (Part 46 of the FAR)--are not required.
Additionally, aside from counting the number of traditional
contractors, it is unclear what features of other transactions can be
readily measured or evaluated . . . [I]t is particularly challenging to
evaluate the benefits of OTs.''\7\
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\7\ Other Transaction (OT) Authority, pp. 22-23.
Unlike DoD, which had struggled to lure non-traditional
contractors,\8\ DHS has been successful in doing so. In 2008, GAO found
that nontraditional contractors, including small businesses and
contractors that had not recently worked for the Government, were
involved in 83 percent of the other transaction agreements GAO
reviewed.\9\ Despite this encouraging benchmark, however, GAO uncovered
several problems:
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\8\ Other Transaction (OT) Authority, pp. 23-24; 72% of the
research and 97% of the prototype DoD OTA funding went to traditional
contractors in the late-1990s. Testimony of Donald Mancuso, Deputy
Inspector General Department of Defense, before the Subcommittee on
Readiness and Management Support of the Senate Committee on Armed
Services on Defense Acquisition, April 26, 2000, p. 15. http://
www.dodig.mil/audit/reports/fy00/00-118.pdf (Downloaded July 14, 2011)
\9\ GAO ``identified a total of 50 nontraditional contractors who
participated in 44 (83 percent) of the agreements [it] examined, with
multiple nontraditional contractors involved on 8 agreements. Half of
these contractors had not recently worked for the government.''
Government Accountability Office, ``Department of Homeland Security:
Improvements Could Further Enhance Ability to Acquire Innovative
Technologies Using Other Transaction Authority,'' GAO-08-1088,
September 23, 2008, p. 7. http://www.gao.gov/new.items/d081088.pdf
(hereinafter GAO-08-1088)
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DHS did not have all the information it needed to determine
whether other transaction agreements were successful or that
their benefits outweighed their risks.
DHS was not able to accurately assess whether it was using
other transaction agreements to effectively negotiate
intellectual property and data rights.
DHS could not assure successful outcomes due to inadequate
staffing levels and high turnover in its contracting workforce.
DHS lacked the resources, in terms of knowledge and
workforce capacity, to maximize the benefits and ensure the
transparency of other transaction agreements.\10\
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\10\ GAO-08-1088, pp. 12-16.
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DHS appears to have significantly reduced its use of and dollars
spent on OT agreements,\11\ but those agreements still deserve to be
reviewed and audited. Due to the inherent risk of OT acquisitions and
the lack of reporting by DHS and GAO,\12\ this subcommittee should
consider the extent to which DHS's OTA should be extended, request
information about the OT agreement requirements and deliverables, and
ask the agency about OT programs that can be immediately converted to
FAR-based contracts.
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\11\ Government Accountability Office, Statement of John K.
Needham, Acting Director, Acquisition and Sourcing Management, before
the Subcommittee on Emerging Threats, Cybersecurity, and Science and
Technology, House Committee on Homeland Security, ``Department of
Homeland Security: Status and Accountability Challenges Associated with
the Use of Special DHS Acquisition Authority,'' GAO-08-471T, February
7, 2008, p. 6. http://www.gao.gov/new.items/d08471t.pdf
\12\ Homeland Security Act of 2002 (Pub. L. 107-296), Section
831(b), November 25, 2002. GAO is required by statute to report to
Congress on DHS's ability to lure non-traditional contractors, results
of OT acquisitions, and whether safeguards are needed. The last report
issued by GAO was in 2008. GAO-08-1088.
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what dhs is buying
More to the point of today's hearing is whether DHS is effectively
leveraging emerging technologies. From a contracting perspective, this
is a difficult to question to answer. DHS certainly bought new
technologies, but how much safer are we?
Many years ago, I testified before the full Homeland Security
Committee and stated that DHS was buying infant technologies that were
unproven and sometimes provided little or no benefit to the agency. We
are still paying the price for poor policies and decisions resulting
from the Deepwater and SBInet programs. It was one thing for those
programs to fail while in their infancy, but it is another for those
and other troubled programs to do so 10 years later. Any questions
about DHS's effectiveness might only be answered if and when the next
natural disaster or terrorist attack take place.
Additionally, DHS's reliance on service contractors also makes it
difficult to quantify the effectiveness of its buying because we are
paying for time rather than tangible goods. As often is the case with
service contracts, they are hard to measure and evaluate. For example,
in March 2009, DHS Secretary Janet Napolitano instituted an efficiency
review ``expected to lead to hundreds of millions of dollars in cost
avoidance.''\13\ That review included ``launching efforts to reduce the
Department's reliance on contractors and contract services to
strengthen our Federal workforce.''\14\ Simply stated, DHS wanted to
know more about the services it was procuring and the cost of those
services. Unfortunately, DHS's estimate of the number of its service
contractor employees was off by 100,000,\15\ and I have not heard about
any DHS efforts to streamline, reduce, or cut services that are not
needed or that were or are wasting taxpayer dollars. Without more
information and oversight, it is nearly impossible to determine if DHS
is effectively leveraging new technologies that would protect the
country from emerging threats--only time will tell.
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\13\ Department of Homeland Security, Office of the Press
Secretary, ``Secretary Napolitano Rolls out DHS Efficiency Review
Initiative,'' March 27, 2009. http://www.dhs.gov/ynews/releases/
pr_1238172270388.shtm (Downloaded July 14, 2011)
\14\ Department of Homeland Security, Office of the Press
Secretary, ``Secretary Napolitano Announces Two New Efficiency Review
Initiatives,'' April 7, 2010. http://www.dhs.gov/ynews/releases/
pr_1270667336512.shtm (Downloaded July 14, 2011)
\15\ The DHS has begun to keep statistics on the size of its shadow
Government workforce of contractor employees. It had estimated that the
size of its contractor employee workforce was 200,000, as compared with
188,000 DHS employees, but recently changed the estimate to 110,000
contractor employees. Ed O'Keefe, ``Eye Opener: Homeland Security Has
More Contractors Than Feds,'' The Washington Post, February 24, 2010.
http://voices.washingtonpost.com/federal-eye/2010/02/
eye_opener_homeland_security_h.html (Downloaded September 27, 2010);
Sean Reilly, ``Whoops: Estimate on number of DHS contract employees off
by 100,000 or so,'' Federal Times, April 11, 2011. http://
blogs.federaltimes.com/federal-times-blog/2011/04/11/whoops-estimated-
number-of-dhs-contract-employees-off-by-at-least-100000/ (Downloaded
April 12, 2011)
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recommendations
POGO respectfully requests that this subcommittee consider the
following recommendations to improve DHS contracting:
1. Ensure that full and open competition is the rule, and restore
the definition of ``competitive bidding'' to require at least
two bidders.
2. Require that risky contract vehicles are used in limited
circumstances and only when supported by proper justifications
and oversight protections.
3. Review DHS commercial item and service acquisitions to ensure
that a commercial marketplace exists.
4. Investigate how prime contractors bill the Government at their
own labor rate(s) rather than the rate they pay their
subcontractors on Time and Material or Labor Hour (T&M/LH)
contracts.
5. Confirm that contractors are not performing inherently
Governmental functions, which must be performed by civil
servants.
6. Reestablish the taxpayer-protection checks and balances that
have been removed from the contracting system, including
requiring contractors to provide cost or pricing data to the
Government for all contracts except those where the actual
goods or services being provided are sold in substantial
quantities in the commercial marketplace, and restoring the
Truth in Negotiations Act (which would result in enormous
improvements in contract pricing, negotiation, and
accountability, and save taxpayers billions of dollars per
year).
7. Review DHS's use of the suspension and debarment system,
especially as it has been applied to large contractors with
repeated histories of misconduct.
8. Provide a fair playing field for all DHS contractors to ensure
that all vendors are open to doing business with DHS.
9. Require copies of contracts and task and delivery orders to be
made public on USAspending.gov.
10. Examine and improve the conflict of interest and ethics system
to ensure that DHS employees comply with all Federal conflict
of interest laws and regulations.
11. Renegotiate OT agreements under FAR-based contracts (e.g., FAR
Part 15) as soon as practicable.
Thank you for inviting me to testify today. I look forward to
answering any questions and working with the subcommittee to further
explore how Department of Homeland Security contracting can be
improved.
Mr. McCaul. Thank you, Mr. Amey. I just want to follow up
on some of the discussion we had with the first panel. I
brought up the first-hand accounts of private sector companies
wanting to do business with the Department and just frankly
just not getting access. The two examples, one is a company
that makes holographic maps that the Army is using. I wrote
three letters to help facilitate that kind of a meeting and
they are not even responding to me. They can't get in the door.
Even in spite of the fact that Border Patrol looked at these
maps and really liked them and recommended to Washington that
they look at procuring these maps.
Another instance a guy that--basically they have a device
that can detect heartbeats which could be used in a lot of
instances and it can be used down on the border too to look at
human trafficking. It was originally designed by the Federal
Government, this science, and this individual can't get a
meeting. We heard from Dr. O'Toole, but basically her response
to that was, gee, I guess I will respond to your letter, but
also you know we are just too small, the private sectors are
big, and industry and our office is just too small to
accommodate facilitating these kind of meetings. I just find
that to be inadequate in my judgment. Mr. Williams and Mr.
Pearl, do you have any comments on that?
Mr. Williams. I do, Congressman. I think the stories you
told are all too typical of dealings with DHS over the past few
years. I think it is very sad that they don't understand the
benefits of engaging with the private sector, hearing about new
ideas that could save money, could improve their mission, and I
think it also goes to the attitude of individuals and a culture
to kind of close the doors. I believe, as we have all talked
about, DHS needs to engage the private sector, they need to do
it throughout the process and they need to do it in a very open
and collaborative fashion. That is not happening today.
I did, after the first hearing, went outside and talked to
Nick Nayak and he said, that is unforgivable that you had to
write three letters that were not responded to. I think he is
trying to change things. But again, as people have talked
about, you have got a lot of different procurement officers
there, and I think some of them are just ridiculously gun-shy
about talking to the private sector. My experience in
Government is the only way you are successful is if you engage
everyone. It doesn't, it isn't a matter of time or people, you
can make the time to do these right things. They just don't do
it.
Mr. McCaul. I tend to agree with you on that. Mr. Pearl, do
you have any comments?
Mr. Pearl. Rather than speaking to any one particular
technology, this is something that I have seen for 15 or 20
years in Washington when I started. In fact, the previous--I
was at TechAmerica when it was called ITAA 16 years ago, and it
was never about and should not be about an individual company
trying to get its foot in the door. What I was speaking to was
in point of fact a process, a blueprint, so that whatever the
company is, whether it is a major company, a large company or
whether it is a small garage company that is entrepreneurial,
you shouldn't build in a void. Though I have the greatest
technology for X or the wonderful process for Y, if in fact the
Department doesn't want it, and I am not saying that they do or
don't want the kinds of things that you talked about, but if
the Department doesn't want it then why am I building this in
the first place because I think it is going to help at the
border, I think it is going to help at cargo or emergency
management or whatever it is. So what we are talking about is
this engagement before an individual company comes into the
door and says I have got the greatest, you know, whiz-bang
technology that you have ever seen, and their response is,
well, I don't know if we are ever going to use it, when it
would be deployed, whether I have the money for it.
There should be this dialogue that both Jim and I are
talking about that speaks to the issue of let's talk about a
blueprint, what is our mission goal, not what is checking the
box, what are we going to try to procure for $100,000 here or
$100 million there or $1 billion down the road. We are trying
to look at the broader component. All we have gotten thus far
is these things that are called, for example, a QHSR or a
bottoms-up review, the kind of quadrennial review. That is not
a blueprint, that is everyone commenting on what should be.
What we are looking for are lessons learned that exist in other
agencies, and it shouldn't be in a void not only in what DHS is
about, but what they could learn from other independent
agencies or DOD or DOE.
That is what we have been encouraging, that kind of
dialogue not only with industry but across intra-Government so
that so that you can learn what the processes are within a
Department that is 8\1/2\ years old. The evolution is
continuing, but we need to kind of move forward and stop saying
we know it all, we have got it all down and fighting the last
war. It is giving industry and Government an opportunity to
look ahead of the curve.
Mr. McCaul. Thank you. Just to follow up. Mr. Pearl, you
talked about leveraging existing technologies rather than just
starting from scratch. SBInet is a good example of that. I took
Barkowski, who does a lot of the procurement in science and
technology, Henry Cuellar and I took him down to the border,
and because the Defense Intelligence Agency had sensor
surveillance equipment that had already been produced, the R&D
had been paid for by the taxpayer, they are using this actually
currently in Afghanistan on the Pakistan border, sensor
surveillance technology. Yet it is classic Federal Government,
the left hand doesn't know what the right hand is doing. We had
to make that introduction to him and brought him down on the
border. He looked at what the DOD had to offer and he liked it.
He is starting to procure it and deploy it.
But that is just I think one example of technology that
exists within the Federal Government that is not being
leveraged. But then you look at the private sector, too. There
is so much of this technology out there that is not--existing
technology that is not being properly leveraged, in my view. I
think the end result is not only can you be more effective and
it can be deployed more quickly, but it is also more cost-
effective from the standpoint of the taxpayer.
Mr. Pearl. You would think that. That is what we certainly
in the private sector and what Mr. Williams and I are talking
about, this dialogue is absolutely necessary. One of the things
that the Council is going to be doing later this fall is
bringing a group on a kind of fact-finding, executive tour
mission down to the Southwest Border. We have developed not
only relationships with DHS to develop this kind of dialogue,
but we are bringing DOD and North Command into what is going
on, U.S. Army North, and working very closely with Commanding
General Swan, and try to get--you know, they kind of talk. But
to be, you know, that kind of triangulation of making sure that
the DOD and the DHS and the industry are all in the same room
talking about what those future plans are, whatever leveraging
we can do for tech services, for technology, for personnel,
across the board. I think everybody wants to be there to help,
they are all just kind of doing it on their own and we have to
kind of develop that more in a coordinated, communicative,
collaborative way.
Mr. McCaul. Mr. Williams.
Mr. Williams. I would just say, Congressman, I think what
you are talking about is strategic sourcing, which is how do
you leverage that buying power, leverage what is already out
there. DHS has way too many of the same people buying the same
thing but at different components. Whether it is buying it--
getting it from Department of Defense or just combining their
buying power or combining their vehicles with other Government
vehicles, they don't do enough of that. I think that is true
across the Government, but particularly DHS, which has not
really formed a cohesive whole as a procurement organization.
They are a bunch of different stovepipes. I think they need to
find a way to establish the processes that bring them together
so that they can leverage the existing technologies from the
private sector, existing vehicles and technologies that exist
within DHS and across the Government. I would say if I had to
guess what percentage of DHS's budget that they strategically
source that they could, I would say it is less than 1 percent,
that they could do something better about that other 99
percent.
Mr. McCaul. Well, I certainly hope--I know someone at the
Department is watching this hearing and I hope they are
listening. These are great lessons to be learned, and I think
it would make DHS more effective and it would save the taxpayer
a lot of money. Thank you for your interest in this, your hard
work. I think this is an area that needs a lot of improvement,
and I look forward to working with all of you.
With that I yield now or recognize the Ranking Member.
Mr. Keating. Thank you, Mr. Chairman. I am a big believer
in pilot projects as well. I actually saw Homeland Security
implementing one in Logan Airport which was terrific. It was an
optical project with Lincoln Laboratories, MIT, and Northwest
Pacific. Just looking at them deal with this pilot project,
which is going to really I think improve digital camera
surveillance and revolutionize it.
With that being said, do you think there is enough
interest? You know I would think just intuitively that in the
front end for businesses to engage in pilot projects it is
pretty intense in terms of commitment to capital, commitment to
resources. Do you get a sense that there would be a lot of
interest and create a lot of competition and diversity of
vendors if we had more of a pilot project approach, or would it
be more costly, because you are putting in so much research
without the sense that you are going to be able to actually go
beyond that?
Mr. Pearl. Let me just briefly say that I think the pilot
project, that has been a part and parcel of what homeland
security has been about for 8\1/2\ years, which is, in many
instances, the sense of piloting and trying to kind of figure
that out. It is my impression from talking with both the
Chairman and the Ranking Member of the full committee and
others in Congress, that earmarking and pilot projects are not
really the rule of thumb these days given the economics of what
is going on. So what industry might want to invest in is
different from what Congress can appropriate and what the
administration can invest in as well. The flip of that is, is
that if we are building any pilot project, if any of our
companies are doing that, and yet we don't know on our own what
in point of fact they are looking for, then in point of fact
even if it was successful it may not be eventually implemented
or deployed.
I really do feel Dr. O'Toole's frustration, something that
we have talked about. We are engaging in greater dialogue both
with the Under Secretary of Management and the Under Secretary
of S&T. Her frustration is no different than the 11 acquisition
different processes, which are the multitude of S&T and R&D
projects that are going on in the various components.
TSA, all the great stuff that Administrator Pistole is
doing, he will do it on his own, he will not do it necessarily
in coordination with the broader S&T because he either has his
own funds or he has his own way of looking at it and then goes
back to S&T and may say can you approve this. So if you are
working with Tara O'Toole on a pilot project in the airport it
may not be something TSA is looking at. That is why we are
encouraging--this is not just communication between industry
and Government, this is communication within Government, and
that we think that there needs to be this greater dialogue. If
we in industry can help facilitate that, whether it is between
DOD and DHS or between the various component parts, we want to
do that. I do know that the Under Secretaries both, Rafael
Borras and Tara O'Toole, are encouraging that kind of greater
dialogue. They are trying amidst whatever the budget situations
are to try to develop a better policy and procedures process.
Mr. Amey. From an oversight perspective I would say I don't
have a problem with pilot programs as long as it is open,
transparent, there is a level playing field, you do also open
up some legal issues with intellectual property rights on who
holds them, whether it is the Government, whether it is the
individual contractor, and that has created a multitude of
problems for the Department of Defense through the years that
at the end of the day they R&D funded a project and then it
was--or there wasn't a lot of competition after the fact, so in
essence it was an indirect earmark that went to a specific
contractor, or the requirements are so narrowly tailored based
on that technology that at that point competition won't amass
because people aren't going to compete because they know where
that is being steered to.
Mr. Keating. Good point. Mr. Williams.
Mr. Williams. I would just say I am very much in favor of
pilot programs. I think you can look at it from about three
different ways. One is doing a pilot of emerging technology
where you just want to try it. For example, if there is
something that works great in cybersecurity mode allow the
Department to have the flexibility, which I believe they have,
they just don't exercise it, to try something on a smaller
scale. I think there is also a pilot before you are going to
implement a large-scale system, which I have done, having a
pilot as part of the testing not only lowers the risk of full-
scale implementation, it allows you to better understand the
program cost. The most expensive is actually to go into a fly-
before-you-buy pilot with multiple pilots, that is expensive.
But on some of the larger systems of DHS that might actually be
appropriate.
So I think they have to have a better culture of
understanding when pilots should be used and how to use them
properly, but I absolutely think they ought to do more of that.
Mr. Keating. I like to follow this up from time to time,
but the day has been really broken up, and I apologize to all
of the panelists who had to wait through that. I look forward
for the opportunity in the future to have future discussions
because I do think this is extremely important. I think we have
an agency that was born of so many diverse parts it is still
struggling for some kind of fusion. If we can work together to
improve that, everyone will be benefited, not just in terms of
taxpayer funds but also in terms of our security.
So I would like to follow this up. I do apologize for the
day being so broken up.
Mr. McCaul. Thank you. The Chairman now recognizes the
gentleman from Michigan, Mr. Clarke.
Mr. Clarke of Michigan. Thank you, Mr. Chairman. I also
thank both of you for this hearing and allowing me to be here
today. I was looking at several GAO reports, and I think there
was one back in 2008 that indicated that one of the best ways
to guard against cost overruns and scheduling delays is to have
clear requirements and to have clear performance measures in
order by which to evaluate the performance of the contractor.
Now, with DHS contracting generally it is unique and it is
complex just in terms of its mission. Service contracting,
especially in the area of technology, is extraordinarily
complex. On top of it, when you look at what our goal is, to
fight terrorism, to protect our people, to prevent these
attacks from happening and to be able to respond to them when
they do, the threat is constantly evolving and changing. So the
way that we meet that threat has to change the same way, with
speed.
So some of you had some criticism about the early
deployment of certain technologies. I could understand why. For
example, when we now know that the terrorists are now
considering using radioactive materials to harm us on planes,
and I think the French actually developed some technology
recently that we were talking about that could help screen
against those kinds of materials, that the Department would
immediately want to get on it because we have to act quickly.
So I can understand that. We may even have to act more quickly
than the Department of Defense.
I have got several questions. Let me just lay it out. First
of all, with technologies that are evolving to meet an evolving
threat, everything is moving around, what I have heard is that
we need to better engage the private sector in this, because
definitely our S&T Directorate, that funding is being cut so we
aren't going to be able to do that in-house. But that will be
another policy decision that, if I could, Mr. Chairman, again,
I said repeatedly time and time again, the best way to protect
American citizens is take a share of the Afghanistan security
fund assistance of $12 billion or so and redirect that to
homeland security so that we can have the resources that we
need. But I am not going to make a political issue about that,
but I do want to raise that point.
We don't have the staff and resources funded by tax dollars
to do this research, so we have got to rely on outside partners
like Dr. O'Toole talked about. Mr. Pearl raised this issue I
think a few years ago. So we need early engagement from those
that are developing this technology or are at the cutting edge
of it. How do we best do that regarding a specific, let's say,
procurement? We are not talking about a general access issue
now to introduce like a technology. But on a specific
procurement, without raising the conflict of interest issues
that DHS is very mindful about, which could be a reason why
they may not respond many times to a private contractor or why
they may not even want to respond directly through an inquiry
from a Member of Congress, so they aren't being perceived as
being swayed by outside pressure, because one of the major
contracting principles is we have got to have a fair process
because we are using tax dollars.
So that is one question, is how do we balance the need for
early engagement so we can get the input in shaping the
requirements of the technology that we need to acquire, because
we probably don't know what that is, that is why we need
information on it, because we are not really sure what our
threat maybe is, we have an idea, and then how do we do that
without running into issues that this is somehow wiring the
contract to a certain contractor.
Mr. Pearl. If I may, I think that is an important question,
Congressman Clarke, but maybe to phrase it in a different way.
It is not how do we leverage an emerging technology or how do
we utilize a particular product. I think that the question from
Congress, not to tell you how you should ask the question, but
the question should be, what are we trying to achieve, what is
the goal, what is the mission of that particular program, of
that particular utilization? From that, once that question is
asked precisely by Congress or by the Department or even by
industry, what are you trying to achieve in airport detection,
in border or whatever, then bring before the procurement,
before the RFP, bring the industry together with the people,
with the folks from the Department, to talk about how are the
various component parts made up so that in essence people will
know whether their technology or their service or their product
or their widget is the best one, the best to bring. It
shouldn't be we have decided that we are going to use this
technology and therefore everybody bid on it, whether it is
facial recognition or whatever. So the question should be, what
are we trying to accomplish and what are the capabilities that
the Government brings and what industry brings to accomplish
that goal?
With respect to the global aspect that you raised, that is
easy, because some of these things have been deployed in other
countries, and that is a pilot project unto itself. It may not
be able to be Nationalized if it was used in Israel or if it
was used in Germany or if it was used in Spain, but lessons
learned there is a perfect pilot program, Congressman Keating,
that has been utilized and let's see if we can in essence
transpose that to the United States.
So there are different ways in which we should be part of a
dialogue that gets to exactly what your question I think is
about.
Mr. Williams. If you don't mind, Congressman Clarke, I
think the answer is fairly easy. I had, when I was in
Government, thousands of acquisition personnel working for me
and talking about open communications. I say if you were
building a house and you wanted multiple suppliers, would you
at some point in time do what the Government does, start with
some communication and the closer you got to forming a contract
shut down that communication more and more? No, you would open
it up more and more. The way the Government should go about
doing this is very easy, engage the private sector in ways that
is both open and fair, and it can be done. Start with the
general idea of what is the mission goals and talk to industry
about that, get some feedback. As you go through this iterative
process of communication you start to learn more as a
Government buyer what is the art of the possible from the
private sector. Once you get closure to know what those
requirements are you put those requirements out there and the
acquisition strategy to see how well that matches up with the
private sector.
It is not that hard. It is just a matter of taking a
philosophy of communicating throughout the process in order to
best match up the Government's needs with what the private
sector can offer that is most cost-effective and efficient. It
is not that hard.
Mr. Clarke of Michigan. Is this a sense then that we have
got to change the culture of DHS or are there certain policies
that we need to modify to create the right incentives for open
and transparent communication.
Mr. Williams. I would just say that culture of not
communicating openly is across the Government. I think with DHS
in particular DHS is still a collection of too many disparate
organizations that don't act as one. Now, we would want them to
act as one and raise the bar on how they engage industry. They
don't do that.
Mr. Clarke of Michigan. Now, let me just follow up just on
that in terms of having a comprehensive acquisition process.
Now, my assumption is that all the component parts of DHS, they
all are subject to Federal acquisition regulation. Like some
parts, like the Coast Guard, TSA now I think is even under the
FAR when it used to be under FAA I think when it was a stand-
alone agency. But anyway, my point is this: Do we need to make
any statutory changes to unify the acquisition process for all
the parts of DHS?
Now, what I have heard is that the Coast Guard may still
follow the FAR, but some of their procedures may be different
than other DHS agencies, but that it may provide more
flexibility. But I am not sure of that. This is anecdotal
information I have got. So are there real differences, should
those differences be eliminated and we kind of unify
procurement and acquisition procedures, and then finally if
that is the case do we need some type of statutory change where
this body would come into place.
Mr. Pearl. I would just say, I am certainly not here to ask
for new laws or new regulations. What I would be looking for is
should the Congress and this committee, overall committee, look
at once and for all the value of a comprehensive authorization
bill which gives the kind of blueprint from at least the
Congress' priorities to DHS, rather than always only of giving
the guidelines to the Department through an appropriations
process. If it is only in report language of an appropriations
bill, then therefore they are not getting the kind of guidance
that they might want and they need in order for us to get the
blueprint that we were talking about. So I am not talking about
anything statutorily, I am just simply saying that if Congress
has priorities on mission it might want to look at more closely
a more comprehensive authorization approach, which comes out of
this committee, versus an appropriations approach and only
doing it through appropriating report language.
That is one aspect. It doesn't go to the statutory, but
gives guidance that might be helpful as part of the blueprint
that we are talking about, and would urge the Department to in
fact get us to a point that we would all like to be at.
Mr. Clarke of Michigan. Could that comprehensive
authorization bill then contain that acquisition strategy that
we are looking at, the long-term acquisition strategy for DHS?
Mr. Williams. Congressman Clarke, I am not sure a new law
is needed here. I think there are a lot of plans, such as the
OFPP memorandum on myth-busting on open communications. I think
Dr. Nayak has plans. There are many procurement people there
who work very hard, but I think they have too much fear of
engaging the private sector. They often attribute it to things
like, well, it is their misinterpretation of the rules, it is
the fear of oversight groups telling them they are doing
something that is unfair, it is a fear of protest, which I
always find remarkable, because my experience was the more that
you engage the private sector in a very open and transparent
and competitive way the more you do not get protest.
So I am not sure any new law is necessary. I think it is a
matter of them simply changing their culture and implementing
some of the plans they already have in place.
I will say I would love, and TechAmerica would love, to see
the vendor communications plan that they are supposed to have
delivered to OMB for review on June 30 to see really how far-
reaching that is so that TechAmerica could provide some best
practices suggestions for how to improve the engagement with
the private sector. Again, this engagement with the private
sector is not simply just because we want people to talk to us,
it is because we think we can help the Department better
accomplish their mission in a more cost-effective manner.
Mr. McCaul. We can tell the gentleman has experience in
this issue and I appreciate your insight and wisdom.
Mr. Clarke of Michigan. Can I just----
Mr. McCaul. The Ranking Member has a flight at 2:30, so
being mindful of that----
Mr. Clarke of Michigan. I would like to know if I can meet
separately with you. Because again, a lot of the protests arise
from when you don't have clear requirements in the first place.
Then second, all the good will, the good discussions, the
memos, the GAO reports, everything is leading to one point. I
would like for us now maybe to consolidate this. This body can
actually drive that to happen. If it is something we can do to
give DHS the freedom that they need not to be fearful of
talking to people, we could provide that.
But also too one last point, you know, I have heard time
and time again DHS acquisition personnel, they need the
training, we need the funds to train the people, we need more
acquisition personnel, that would take the burden off of that,
that would allow other personnel then to respond to inquiries
from contractors, from Members of Congress. It is not just
money, but it is how we use it. That is why I urge you, Mr.
Chairman, and your caucus to consider fully funding DHS's
operations right now.
A lot of the problems that we are hearing is if we had more
qualified people with the right attitude, all these problems I
think would vanish.
Mr. Pearl. Simply put, I would just encourage both the
continued dialogue, not only with the Department, but as we
have done, certainly the Council and I am sure TechAmerica has
done, with the individual Members of this committee and with
the subcommittee as well. We continue to want to be in dialogue
with you so that you know exactly what the concerns are and
whether we facilitate or you facilitate or the three, you know,
with the DHS in the room. It shouldn't always be only at a
hearing process, it has to be an on-going dialogue that we all
in fact want to engage in and continue the work of the
oversight of this committee.
Mr. McCaul. Well, I look forward to continuing that
conversation with you both in this setting, also more
informally in the office, you have some great ideas.
Before I adjourn I do want to enter into the record your
report, Mr. Pearl. Without objection, so ordered.
[The information follows:]
Report of the Homeland Security & Defense Business Council Submitted by
Chairman Michael T. McCaul
council principles on federal contracting and procurement: how do we
best achieve strategic alignment between industry and government?
The Homeland Security & Defense Business Council was formed to
drive awareness, understanding, and dialogue among those responsible
for supporting the security of our Nation. The Nation's leading
companies engaged in providing the products, technologies, and services
solutions to the homeland security marketplace participate in the
Council. We are committed to creating a strong public-private sector
business process and substantively engaging the leading executives in
industry and Government to meet the Nation's homeland security
requirements.
Since the creation of the U.S. Department of Homeland Security, the
Council believes that we have not yet optimized and operationalized the
relationship between the public and private sectors in order to
sufficiently leverage industry's full resources to meet the needs of
the Department and the Nation. For example, the lack of a predictable
homeland security acquisition environment hampers industry's ability to
anticipate Government needs and efficiently marshal resources to meet
them. This and other differences in perspective between Government and
private industry prevent our Nation from achieving our security
objectives in the most effective way possible.
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
The Council and its members desire to develop a forum to promote a
substantive and open dialogue between the Department and industry that
will help us align our activities to strengthen support to the DHS
mission and our Nation's overarching homeland security requirements.
Optimally, Congress should also become a full participant in those
aspects of the dialogue that require legislative oversight. Possible
discussion points that will help ``jump start'' a dynamic and healthy
dialogue are outlined below. Government leaders will likely have
additional topics of interest, which can also become part of the
discussion.
discussion points
Need for a Mid- and Long-Term Strategic Plan That Would Provide
Industry With the Ability to Align Its Resources to the Mission
Goals of the Department
Industry makes business, planning, and investment decisions based
on developing and growing long-term capabilities. The U.S. Department
of Homeland Security strategic plan would allow industry to align its
resources and investments to meet the longer-term goals and needs of
the Department. Lacking such a strategy severely limits the ability of
interested companies who want to respond to the Department's needs and
limits industry's investment in the homeland security mission area. The
Department should also consider its influence on companies that service
the State and local market. Many of these companies tend to be small,
privately owned entities with limited resources who are funded through
DHS grant dollars. A focused strategy should reflect requirements that
can be passed down through procurement documents to ensure service and
product providers offerings are in line with DHS's global mission.
Develop a mechanism, or clear ``rules of engagement'' that
would allow industry input in an open, transparent manner.
Industry is ready and able to engage to meet the opportunities and
challenges within the Department; however, all participants
must understand and adhere to ``rules of engagement'' that
optimize input and exchange between the public and private
sectors. The more complex the procurement, the more critical is
the need for an open information exchange. Industry input is
essential to help refine and calibrate requirements to match
mission objectives and achieve mission goals.
Improve the efficacy of the procurement planning process to
optimize the private sector's ability to respond.
Industry needs planning time to align its resources in order to
effectively and adequately respond and to assure its
capabilities meet and exceed the Department's requirements.
Developing a mid- and long-term strategic plan would offer
industry more lead time so that the Department receives the
highest quality bids or options.
Continue to Standardize and Rationalize the Acquisition and
Procurement Process.
Continue to utilize Department-wide vehicles. Combining almost 2
dozen agencies with different processes and cultures to form a
new Department has resulted in many different operating
missions and cultures. This is particularly challenging for
small companies that bring innovation and capability, but lack
the marketing resources to operate across disparate functions
within an organization. This disadvantage is magnified when
having to compete against large entities with sizable marketing
teams focused on each agencies organization. For industry to
provide the best products, technologies and services to the
Department, we strongly support a strategy leading to a more
centralized standardized process.
Recognize and address the need for a higher quantity and
quality of contracting personnel who understand the ``rules of
engagement'' well enough to communicate both pre- and post-
award.
A procurement or acquisition experience is often as good as its
contracting officer. In many members' experience, the more
senior contracting officers tend to provide maximum
interaction. These senior officials communicate more openly and
add to a constructive ``back and forth'' between Government and
industry. The lack of contracting officers in general, has
complicated and frustrated both potential and winning
contractors. Additionally, without adequate understanding of
the appropriate interaction between industry and Government,
contracting officers without experience tend to err on the safe
side and have no interaction at all. This severely hampers the
process and outcome of many acquisitions and procurements.
Address issues and complications surrounding the security
clearance process.
As everyone involved in the security clearance process recognizes--
the lack of standardization and reciprocity among DHS
components causes significant delays, impacts award fees, and
project performance. Consider in the context of small
businesses that the cost of multiple clearance processes
becomes prohibitive and the agency loses the ability to
transfer best practices, technology, and talent across multiple
organizations. A uniform reciprocity should be developed for
internal DHS components.
Optimizing the Dialogue
Leverage private sector resources to help achieve mission
success--aligning the administration's mission with
Congressional concerns and with industry capabilities.
Industry understands that it engages and operates in an environment
where both operational and political considerations alter the
course of events. The Council supports developing an open,
free-flowing dialogue between the Department, the Congress, and
industry that discusses how to better prepare for our role in
the defense and protection of our Nation's people, facilities,
borders, and networks. This dialogue should expand beyond the
Federal contractor community into local business organizations
that can influence community behavior in line with National
interest.
Participate and Support Programs to Encourage and Enhance Mutual
Understanding and Cooperation
In addition to the initiatives outlined above, the Council is
interested in working with DHS in developing an exchange program to
improve the management abilities and technical and professional
competencies of DHS employees. A professional exchange program would
offer the Department first-person insight into the philosophy,
procedures, and practices of industry. The exchange would also offer
public sector professionals an opportunity to fully examine industry
policies and processes, as well as learn first-hand, how industry
addresses contracting and procurement issues--acquiring the ability to
interpret the needs of the Department in industry terms. By studying
the best practices of industry, Government professionals are able to
bring new knowledge, understanding, and empathy back into the
Department to then improve its processes. Obtaining such direct insight
and experience is currently unavailable in DHS. The process is also
extremely beneficial to industry, which in turn receives the unique
perspective and experience of the DHS professional.
Mr. McCaul. Thank you for your testimony. Members may have
additional questions, and I would ask that you respond to them
if they are tendered to you in writing. Great hearing, and
thank you so much for being here. This subcommittee is
adjourned.
[Whereupon, at 1:50 p.m., the subcommittee was adjourned.]
A P P E N D I X I
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Letter From Rafael Borras and Tara O'Toole
July 21, 2011.
The Honorable Michael McCaul,
Chairman, Subcommittee on Oversight, Investigations, and Management,
U.S. House of Representatives, Washington, DC 20515.
[The Honorable William Keating,]
[Ranking Member, Subcommittee on Oversight, Investigations, and
Management, U.S. House of Representatives, Washington, DC
20515.]
On Friday July 15, 2011, we testified before the committee and due
to time constraints, many concerns raised in the opening statements
were not able to be addressed. We wanted to take this opportunity to
share with you the progress that has been and continues to be made with
regard to leveraging technology and the Department's programs in
securing the border, and to correct the reported errors regarding the
Department's Advanced Spectroscopic Portal (ASP) Plan.
As was stated in the hearing, DHS is highly focused on leveraging
research and development investments made by the Federal Government,
the commercial sector, or universities. As part of its recent
organizational realignment, the Science and Technology Directorate
created the Research and Development Partnerships Group, which reports
directly to the Under Secretary, to focus our ``technology foraging''
efforts. As an example of our many interactions with DoD, Under
Secretary of Defense for Acquisition, Technology, and Logistics Dr.
Ashton Carter, DHS Under Secretary for S&T Dr. Tara O'Toole, and DHS
Under Secretary for Management Rafael Borras meet quarterly under the
Capability Development Working Group. This group explores capabilities
of mutual Departmental interest, decides on appropriate implementation
paths that avoid duplication of effort, and informs policy, planning,
and decision making. Under Secretary O'Toole also co-chairs the White
House Office of Science and Technology Policy's Committee on Homeland
and National Security with Assistant Secretary of Defense for Research
and Engineering Zachary Lemnios. The committee and its subcommittees,
consisting of agencies across the Federal Government, collaboratively
develop executable research and development plans.
It is critical in these efforts, however, that the existing
technologies line up with DHS's operational requirements. Part of the
problem with past acquisitions has been the attempt to insert off-the-
shelf technologies, designed for different missions, in to DHS programs
without a careful comparison to DHS's specific operational needs. The
shared focus of the Under Secretary for Management, the Under Secretary
for Science and Technology, and Secretary Napolitano on leveraging S&T
in the ``front end'' of acquisition is targeted specifically at
ensuring that DHS either selects the proper off-the-shelf technology
when it exists, or receives the technology through a disciplined
research, development, and acquisition process.
As you correctly noted in the hearing, the Secure Border Initiative
was started in 2006. This was before the current management controls
were put in place, specifically Acquisition Management Directive 102-
01. Directive 102-01 was signed by then-Under Secretary Elaine Duke in
January of 2010. In July of 2010, the troubled SBInet program was
directed to present a revised Analysis of Alternatives (AoA) in
accordance with Directive 102-01 that re-examined the operator's needs.
This rigorous analysis and mandatory engagement with the field
operations resulted in a much more rational technology plan that
includes proven elements of the former SBInet program while better
utilizing off-the-shelf solutions. Through our management controls, we
directed the suspension of SBInet, forced a re-plan of border security
technology, and supported a new plan to increase operational coverage
and provide deployment flexibility that was not present in the prior
program plan.
Regarding the recent Washington Post article, we want to point out
some key items that the newspaper story did not cover. First, Advanced
Spectroscopic Portal monitors, or ASPs, have been tested and subject to
review and evaluation for over 3 years. These test data were used to
inform a decision on whether to go forward with acquisition and
deployment activities. In April of 2011 the Department held an
Acquisition Review Board (ARB) on ASPs. The ARB directed the Domestic
Nuclear Detection Office (DNDO) and Customs and Border Protection (CBP)
to pursue a revised program that addresses limitation in cargo
conveyance scanning technologies based on the Model-Test-Model approach
recommended by the National Academies of Science. This revised program
was directed by the ARB to include commercially-developed systems and
an analysis of alternatives. Finally, the most recent ASP contract
expired on July 11th of this year--there is no more existing contract
to purchase radiation monitors today, nor will there be until such time
that a new set of requirements is developed by DNDO and CBP, and
approved by the Department's ARB.
We acknowledge that many of the Department's legacy programs have
faced challenges that both the Office of the Inspector General (OIG)
and the Government Accountability Office (GAO) have repeatedly
commented on; however, even the OIG noted in its recent June report
(OIG-11-91) that significant progress has been made in maturing the
Department's acquisition process and program management capabilities.
In fact, the report notes that the Department has implemented all five
recommendations to enhance oversight, established and strengthened the
Department's Acquisition Program Management Division, and addressed
procurement staff shortages and staff authority.
We thank you for your support of the Department of Homeland
Security, and an identical letter has been sent to [Chairman McCaul]
[Ranking Member Keating]. If we can be of any further assistance,
please contact us.
Sincerely,
Rafael Borras,
Under Secretary for Management.
Tara O'Toole,
Under Secretary for Science and Technology.
A P P E N D I X I I
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Questions From Chairman Michael T. McCaul for Charles K. Edwards
Question 1. You mention in your testimony that components are not
consistently reporting their acquisition programs to the Department.
You further state that components have developed, or are in the process
of developing their own data-tracking systems for acquisitions because
the Department has not mandated the use of the Department-wide system.
For example, Customs and Border Protection (CBP) was in the process of
developing an additional database to track acquisitions.
What was CBP's rationale for building its own acquisition database?
What measures is the Department of Homeland Security (DHS) taking
to ensure that the Department is not wasting dollars on multiple
acquisition systems tracking the same information?
Answer. The Department of Homeland Security (DHS) continues to face
challenges associated with implementing a fully integrated acquisition
function. In Audit Report OIG-11-71, ``DHS Oversight of Component
Acquisition Programs,'' we found that the Department developed
inconsistent reporting requirements for components to follow when
reporting an acquisition's progress in the Department's standard
reporting system. The standard system is an integrated system that
provides visibility to the Department to track components' level 1, 2,
and 3 acquisition investments. We recommended that the Department
direct components to report all acquisition programs (level 1, 2, and
3) to the standard system. We are still waiting for the Department's
final reply on the recommendation due to its reorganization of its
acquisition offices, but we believe that once the Department ensures
that all components are reporting the acquisition program data into the
standard system, the Department will have visibility over acquisition
programs.
The Department has identified the standard system that all
components will use to report acquisition programs. The Department of
Homeland Security Management Directive 0007.1, ``Information Technology
Integration and Management,'' establishes the Department's vision and
the authorities and responsibilities of the Department's Chief
Information Officer. It reinforces the commitment to create and manage
a unified department in mission accomplishment and support systems
performance. Within the Department, component heads and line of
business chiefs share the responsibility of developing information
technology to build a progressive 21st Century DHS. Dual accountability
recognizes mission accomplishment as the ultimate responsibility of the
component heads and requires them to support functionality. According
to CBP, it was developing its own acquisition system because it did not
believe that the standard system would provide the appropriate level of
security.
Question 2. In your testimony you state that the Department does
not always know what is in its acquisition portfolio because the Under
Secretary for Management (USM) has not ensured that components report
all acquisition programs. As a result, the USM does not have visibility
to conduct oversight of acquisition programs.
Does the USM need additional authority through legislation to make
sure the Department has proper visibility of all acquisition programs?
Answer. As stated above, we believe with the implementation of our
recommendation, the USM will have visibility over all components'
acquisition programs. One additional suggestion to enhance the USM's
authority, however, would be to give the USM authority to override
funding if a component acquisition program is not meeting all of the
requirements of acquisition life cycle management.
Question 3. According to your testimony, there seems to be a
recurring theme that Department-wide, components are maintaining
separate inventories of their technology equipment, not effectively
leveraging existing technologies, and not imposing standardization of
technologies across DHS.
What steps are being taken to standardize the inventory of
technology and to increase coordination and communication so all
components and the Department are aware of what other components are
purchasing?
What additional efforts are needed to standardize equipment
purchases and identify common mission requirements among components?
Answer. In our report OIG-11-47, Department-wide Management of
Detection Equipment, we found that the Department can improve
management of its detection equipment by using strategic sourcing
principles that it has applied to the acquisition of other commodities,
such as law enforcement officer firearms and ammunition. The Department
does not have a logistics process in place to facilitate strategic
sourcing of detection equipment. Strategic sourcing would require that
management standardize equipment purchases for explosive, metal, and
radiation detection equipment; identify common mission requirements
among components; and develop standard data elements for managing the
inventory accounts of detection equipment. Improving its management of
detection equipment will offer the Department opportunities to
streamline the acquisition process and improve efficiencies. These same
principals can be applied to other commodities across the Department
such as tactical communications equipment.
Question 4. In your testimony you state that all components do not
have adequate policies and procedures in place to manage their
acquisition programs.
Why has the Department given components decision authority to
manage certain acquisitions when they do not have adequate policies and
procedures in place to manage these acquisition programs?
When do you expect these policies and procedures to be in place?
Until components have sound policies and procedure in place, who is
currently managing them?
Answer. In Audit Report OIG-11-71, ``DHS Oversight of Component
Acquisition Programs,'' we stated that although the Department
delegated the responsibility of the management of level 3 programs to
the components (retaining level 1 and level 2 control), the Department
did not take steps to ensure that all components developed prescribed
policies and procedures for oversight of acquisition programs. DHS
Acquisition Management Directive 102-01 states that components retain
authority to set internal acquisition processes and procedures, as long
as they are consistent with the spirit and intent of the directive.
However, not all components have created such policies and procedures,
and the Department had not taken steps to ensure the adequacy of the
processes and procedures that components developed. We reviewed the
component policies and found that four components had created and
issued finalized policies, five had draft policies, and three did not
provide a policy. We recommended to the Department that it implement a
plan of action or completion deadline for Department-wide finalization
of acquisition management policies and procedures. We are still waiting
for the Department's final response on this recommendation.
Question From Chairman Michael T. McCaul for David C. Maurer
Question. Some in the private sector believe that there is a lack
of communication and cooperation between DHS components and the
Department. As a result, technologies are not effectively leveraged and
duplication of efforts occurs.
What specific measures do you recommend that will improve their
coordination efforts?
Answer. In order to improve Department-wide coordination efforts,
leverage technologies more effectively, and reduce duplication, we
recommended in November 2008 that DHS should reinstate the Joint
Requirements Council (JRC) or establish a similar body responsible for
overseeing requirements Department-wide.\1\ Established in 2003, the
JRC was a senior requirements review board responsible for identifying
certain crosscutting opportunities and common requirements across DHS
components, and helping ensure that the Department used its resources
wisely and in the best interest of the American public. However, the
JRC stopped meeting in 2006 after the Chair was assigned to other
duties within the Department. The JRC played a key role in identifying
overlapping DHS investments, and in 2008, DHS officials recognized that
since the JRC stopped meeting, there had been no direction for
requirements or oversight of certain investments at the Department
level and stated that strengthening the JRC was a top priority. DHS
agreed with our recommendation to reconvene the JRC or a similar
council, but it has not yet done so.
---------------------------------------------------------------------------
\1\ GAO, Department of Homeland Security: Billions Invested in
Major Program Lack Appropriate Oversight, GAO-09-29 (Washington, DC:
Nov. 18, 2008).
---------------------------------------------------------------------------
We also reported in June 2010, that DHS's senior-level Acquisition
Review Board (ARB) has begun to meet more frequently and has provided
programs decision memorandums with action items to improve
performance.\2\ At the time of our review, the ARB had reviewed 24
major component acquisition programs in fiscal years 2008 and 2009;
however, more than 40 major acquisition programs had not been reviewed,
and programs had not consistently implemented review action items by
established deadlines.
---------------------------------------------------------------------------
\2\ GAO, Department of Homeland Security: Assessments of Selected
Complex Acquisitions, GAO-10-588SP (Washington, DC: June 30, 2010).
---------------------------------------------------------------------------
In June 2011, DHS reported that it planned to create the
Capabilities and Requirements Council which would serve in a similar
role as the JRC. DHS reported that it will form the new council in the
fourth quarter of 2011, but it is unclear when it is expected to become
fully operational. DHS also reported that it plans to establish a new
model for managing and coordinating Department-wide investments across
their life cycles. Under this plan, the Science and Technology
Directorate (S&T) would be involved in each phase of the investment
life cycle and participate in new councils and boards DHS is planning
to create to help ensure that test and evaluation methods are
appropriately considered as part of DHS's overall research and
development and investment strategies. In addition, DHS reported that
the new councils and boards it is planning to establish to strengthen
management of the Department's acquisition and investment review
process would be responsible for, among other things, making decisions
on research and development initiatives across components based on
factors such as viability and affordability and overseeing key
acquisition decisions for major programs using baseline and actual
data. According to DHS, S&T will help ensure that new technologies are
properly scoped, developed, and tested before being implemented.
The actions DHS reports taking or has underway to address the
management of its acquisitions and the development of new technologies
are positive steps and, if implemented effectively, could help the
Department address many of these challenges. However, showing
demonstrable progress in implementing these plans is key. In the past,
DHS has not effectively implemented its acquisition policies, in part
because it lacked the oversight capacity necessary to manage its
growing portfolio of major acquisition programs. While we support DHS's
efforts to develop councils responsible for overseeing requirements
Department-wide and coordinating programs, it is not yet clear how the
new DHS councils will perform their functions. It is too early to tell
whether it will meet the intent of our past recommendation, improve
coordination between the Department and its components, and continue to
function effectively over time. We will continue to assess these
efforts as part of our on-going work related to DHS technologies and
acquisition management.
Questions From Chairman Michael T. McCaul for Rafael Borras
Question 1. The SBInet program has been terminated. What went
wrong? How can we apply the lessons learned from this program's
termination to any future acquisition program?
Answer. The SBInet program has been terminated, due to not being
the most efficient, effective, and economical way to meet our Nation's
border security needs. SBInet suffered a series of technical issues
that led to significant schedule delays and cost overruns, resulting in
the inability to deliver a cost-effective solution. The capabilities
already fielded through the SBInet program will be utilized to support
the efforts of Customs and Border Protection (CBP) to identify and
reduce threats and illegal cross-border activity.
We have learned from this program and others with similar issues
that the Department's acquisition management framework needs to mature
through the refinement of our policy, processes, procedures, and
placement of people with the right skill sets in the program offices.
The goal is that every major program is implemented in the most
responsible and efficient manner possible. To achieve this, we have
taken steps to strengthen acquisition management through the
implementation of Management Directive 102-01, Acquisition Management
(MD 102-01). This document establishes the overall acquisition
management framework for all major acquisition programs. It formalizes
the role of the Acquisition Review Boards (ARBs) in the oversight and
governance process, as it assesses a program's progress and determines
the criteria for further execution. The implementation of this
directive has resulted in productive interactions between program
offices and Department leadership allowing us to mitigate or avoid
cost, schedule, and performance risks.
Subsequent to releasing the MD 102-01, we established the function
of the Component Acquisition Executive (CAE), a senior acquisition
official within each Component who leads a process and staff to provide
acquisition and program management oversight, policy, and guidance to
ensure statutory, regulatory, and higher-level policy requirements are
fulfilled. We intend for each Component with acquisition programs to
designate a CAE, who will be delegated acquisition decision authority
for the Component's level 2 acquisition portfolio (programs with total
life cycle costs between $300 million and $1,000 million).
Question 2. In your testimony you discuss an Integrated Investment
Life Cycle as an end-to-end process that integrates strategy,
resources, and capabilities. Please describe this process and how this
will improve acquisition management and save taxpayer dollars.
Answer. DHS continues to enhance our enterprise-wide acquisition
framework as a key element of integration strategy. In fiscal year
2010, acquisition management represented nearly $18 billion of the
Department's $55 billion budget. We have made progress in evolving
acquisition management by refining our acquisition policy, processes,
and procedures, particularly the ``front end'' planning and the ``back
end'' program management phases to operate more seamlessly. Our goal is
to have a disciplined oversight processes, Integrated Investment Life
Cycle, that will improve DHS by ensuring our major acquisitions are
effectively managed in order to maximize the value of every homeland
security dollar.
The Integrated Investment Life Cycle establishes a holistic view of
how investments should be managed. DHS will improve the investment
effectiveness at the ``front end'' by providing better linkage between
requirements development, resource allocation, procurement, and program
management. The model strengthens the ``front-end'' in a strategic
phase with the involvement of the Department Strategy Council (DSC) and
the Capabilities and Requirements Council (CRC). The DSC sets strategic
direction, ensures mission needs are consistent with the strategy and
provides overall programming guidance using the Integrated Planning
Guidance (IPG) process. The proposed CRC rationalizes and harmonizes
Department-wide capabilities and makes tradeoff decisions to inform
Component and Department-level budget submissions. This structure will
ensure that decisions are made to achieve our mission needs and to
fulfill critical capability gaps.
The ``Nexus'' or middle phase will continue to be the resource and
allocation phase. Here we focus on verifying the affordability of
capabilities defined in our Resource Allocation Plans (RAPs) and ensure
that funding requests are consistent with strategy, leadership
priorities, and the funding required for major investments. We conclude
with the ``Program Implementation and Operations'' the ``back end''
phase. This phase focuses on performing oversight and execution of all
acquisition investments. We analyze program performance data, and
ensure major acquisition program baselines are managed. The purpose is
to identify and mitigate program risks and make appropriate program
decisions prior to realizing program failures (such as SBInet).
Question 3. Does the Department have the authority it needs to
oversee component acquisitions and enforce the policies that have been
developed by the Office of Procurement Operations?
Answer. The Department has the necessary authority for policy
enforcement and oversight of the Components' major acquisition
programs. The policy developed by the Office of the Chief Procurement
Officer, Acquisition Program Management Division provides a path of
authority for oversight of major programs by the Department at the
Management Directorate level. All Component level 1 and 2 acquisition
programs are reviewed by the Office of Program Accountability and Risk
Management and Acquisition Review Teams that have Department-wide
stakeholder representation prior to either the Deputy Secretary or the
Under Secretary for Management (USM) approving Acquisition Decision
Events. In accordance with the Management Directive 102-01, Acquisition
Management (AD 102-01) must review and approve critical acquisition
life-cycle documents before the programs move forward in the
acquisition life-cycle stages. There can be improvement on the policy
and the conformance of the component programs in complying with the
oversight authority decisions and assigned action items. We are
proactively addressing oversight and governance process improvement as
outlined in the Department of Homeland Security Program Management and
Execution Playbook developed by the USM.
Question 4. Does the Department have a central point of contact to
monitor technological acquisitions and ensure that equipment is
interoperable across the Department and meets the Department's long-
term strategic plan?
Answer. DHS Management Directive 0007.1 requires that the DHS Chief
Information Officer (CIO) review and approve any IT acquisition in
excess of $2.5 million. IT Acquisition Reviews (ITARs) ensure alignment
with administration and Congressional priorities to effectively manage
contracts and procurement risks, as well as with Acquisition Directive
102-01. Each ITAR request goes through the following reviews:
Investment, Enterprise Architecture, Information Security, Enterprise
Services, Accessibility and Portfolio. Recommendations are provided to
the CIO and a determination made for approval, disapproval, or
conditional approval.
The DHS Directive AD 102-01 outlines the Department's Acquisition
Life Cycle Framework, Acquisition Review Process, and Acquisition
Review Board to ensure consistent and efficient acquisition management,
support, review, and approval throughout the Department, and links
DHS's requirements resources and other processes (e.g. systems
engineering, enterprise architecture).
The DHS Systems Engineering Life Cycle Guide (SELC) applies to all
DHS IT Systems and projects and establishes a common life cycle frame
work used to guide DHS projects, regardless of the acquisition type and
size (e.g. capital investment of IT and non-IT, enterprise services,
major and non-major).
The CIO is committed to carrying out the DHS mission in an
effective and efficient manner. Components are required to annually
obtain DHS CIO concurrence with IT infrastructure investments and
Operations and Maintenance expenditure plans through a DHS CIO led
review of an IT Services Portfolio submission.
Additionally, Office of Management and Budget (OMB) issued a memo
on August 8 entitled ``Chief Information Officer Authorities'' that
focuses on, among other items, eliminating duplication and
rationalizing agency IT investments to include IT Infrastructure,
enterprise IT systems, and business systems. The DHS CIO drives the
investment review process for IT investments and has responsibility
over the entire IT portfolio. As part of the IT Reform Plan, OMB
requires CIOs to ensure that IT portfolio analysis is an integral part
of the yearly budget process.
Question 5. What is your view on the Inspector General's
recommendation that the Department should revive the Joint Requirements
Council and make use of commodity councils in the acquisition process?
Answer. DHS recognizes that the adequacy of requirements definition
is essential throughout the acquisition cycle, but most critical during
the planning phase. In 2003, DHS established a Joint Requirements
Council to serve as a senior requirements review board to identify
crosscutting opportunities and common requirements among DHS Components
to ensure that the Department uses its resources wisely and in the best
interest of the American public. Since this council dissolved, DHS has
struggled to ensure Components had clear understanding and guidance on
portfolio capabilities and requirements prior to procurement.
In January 2011, DHS identified our objective to re-establish a
requirements council to review and validate acquisition program
requirements, establish standards, and eliminate unintended
redundancies. To that end, we are establishing the Capabilities and
Requirements Council (CRC) that will perform ``trade-off'' decisions,
reconcile disagreements across program offices and ensure DHS strategic
priorities are met. The CRC will be focused on closing capability gaps
based on the DHS' key functional areas (e.g., domain awareness,
screening, law enforcement). This will be accomplished by aligning
requirements on the basis of broad portfolios, validation of investment
strategies, approving analyses of alternatives and Operational
Requirement Documents.
This governance model will further enhance the implementation of
Management Directive 102-01, Acquisition Management (MD 102-01), which
established the overall acquisition lifecycle framework including a
pre-planning and planning acquisition process. Required pre-planning
documents and activities ensure the Department has a validated need for
a capability, understands the requirement, has developed preliminary
cost estimates, and has reviewed alternatives before a new acquisition
is undertaken. Mission Needs Statements (MNS) are approved by the
appropriate Acquisition Decision Authority. Each program is also
required to develop and submit for approval three critical planning
documents, these are Capability Development Plan (describes what
capability would be delivered to DHS, including the need/gap that will
be filled by the proposed program), an Operational Requirements
Document (ORD), and a Concept of Operations (CONOPs).
To support DHS Component awareness, understanding, and use/
adaptation of proven best practices, we plan to establish a
Requirements Best Practice Community, which will provide DHS program
managers with proven tools, processes, and standards, as well as expert
support. This will establish a more defined and repeatable approach to
requirement definition to ensure that our process guidance explains the
information needed for success and support use of best-in-class
requirements management and execution tools and standardize operating
models for how to best use the tools. The membership of each Community
will include subject matter experts (SMEs) in that discipline from
across the Department. While these SMEs will continue to reside and
report to their home organizations, they will be available for
consultation regarding their expertise in a particular practice which
will aid in both mentoring and training throughout DHS.
Question 6. Collectively the private sector has criticized the
Department for failing to foster communication and coordination between
individual components and with the Department.
How can DHS work to increase information sharing between components
and with the Department to prevent these redundancies and overall
increase efficiency?
Answer. The Department continues to foster communication and
improve coordination among components and between its Components
through multiple efforts, including full peering to OneNet; mature
Enterprise Architecture with comprehensive segment portfolios; robust
enterprise governance with SELC monitoring aligned with key milestones
and active guidance by ESCs; private cloud computing aligned with the
25 Point Implementation Plan; secure IT infrastructure that spans
Policy Enforcement Points and other Defense-in-Depth controls, as well
as the Federal Information Security Management Act of 2002 mandates;
green IT infrastructure through accelerated data center consolidation:
and full accessibility aligned with Section 508. These efforts increase
information sharing and efficiency by preventing redundancies,
minimizing risks, and leveraging the Department's investments.
The Management Directorate and the DHS Private Sector Office (PSO)
work with DHS Components to enhance internal and external visibility of
existing efforts in order to strengthen Component collaboration on
areas that impact the private sector. DHS Headquarters and Operational
Components actively engage and coordinate with a wide variety of
private sector partners in support of Department-wide initiatives
including, but not limited to: Increasing cybersecurity awareness;
fostering a National culture of preparedness; maximizing the
effectiveness of the National Network of Fusion Centers; and enhancing
the security and resilience of the National critical infrastructure.
The PSO leads, and participates in, multiple cross-functional
working groups and task forces to develop and implement corrective
action plans to more efficiently and effectively engage the private
sector. For example, PSO leads the Private Sector Information Sharing
Working Group, which meets monthly, to discuss progress on implementing
recommendations formed--directly from private sector feedback--to
develop more timely and actionable communications with private sector
partners. PSO also hosts a monthly call with DHS Component
representatives with private sector engagement roles and
responsibilities to provide a forum for sharing private sector outreach
activities, best practices, and lessons learned and to highlight
upcoming activities to improve coordination.
As part of the Department's on-going efforts to improve information
sharing, the Office of the Chief Information Officer in the Management
Directorate and PSO are working with other Component representatives to
develop an intra-DHS Homeland Security Information Network (HSIN)
Private Sector Shared Community of Interest to enable increased
transparency and synchronization of private sector engagement efforts.
PSO is also leading the development of the DHS Private Sector Blueprint
that outlines existing DHS private sector engagement to: (i) The
identify of any gaps or unnecessary areas of overlap (some overlap/
redundancy should and always will exist), (ii) develop strategies to
strengthen Component collaboration; and (iii) increase opportunities to
leverage existing programs, efforts, and partnerships for the benefit
of the whole Department.
The Office of the Chief Procurement Officer's (OCPO) Strategic
Sourcing Program also fosters coordination and collaboration among the
DHS Components and Headquarters Offices in the identification,
planning, and execution of Department-wide procurements. These
Department-wide procurements are developed and implemented by a team
comprised of representatives from each component to ensure the needs of
the entire Department are met, eliminating the need for individual
component specific procurements. In addition, the Strategic Sourcing
Program Office holds quarterly meetings with component representatives,
which are designed to increase the communication and awareness of
requirements and potential strategic sourcing initiatives both within
the components and Department-wide. The activities of the Strategic
Sourcing Program Office increase efficiency, reduce redundancy, and
leverage the DHS buying power for commodities and services across the
Department.
In addition, DHS is engaging with its private sector partners
through periodic meetings with the National Infrastructure Advisory
Council (NIAC), a group comprised of private sector stakeholders which
advises the President on the security of critical infrastructures which
include banking and finance, transportation, energy, manufacturing, and
emergency Government services, on discovering new methods to enhance
information sharing.
Question 7. How has the Acquisition Review Board improved the
management and oversight of acquisitions at DHS? How have you increased
oversight of identified high-risk acquisitions?
Answer. To improve acquisition management, DHS developed and
implemented a comprehensive approach establishing acquisition
management standards and oversight. Directive 102-01, Acquisition
Management (issued as interim in November 2008 and final in January
2010) established the overall acquisition management framework for all
major acquisition programs and formalized Acquisition Review Boards
(ARBs) for oversight and governance. As the senior management cross-
component board within the Department, the ARB determines whether a
proposed acquisition has: (1) Met the requirements of key phases in the
acquisition life cycle framework and (2) is thus able to proceed to the
next acquisition phase and eventual full production and deployment. The
ARB reviews the program's status, progress against the current program
plan, and current risks and other program issues. The ARB assesses the
program's progress and establishes criteria for further execution. The
ARB's findings, decisions, and actions are documented in an Acquisition
Decision Memorandum (ADM).
To enhance oversight between Acquisition Review Boards, Component
Portfolio Reviews were implemented in 2009 as a means for the
Department to review and collaborate with each major program on an
annual basis as well as gaining insight on the Components' acquisition
oversight processes and staff. This process, jointly executed by the
Component and the Department, supports management of the Component's
acquisition portfolio and strengthens Departmental governance and
oversight. The final report of the review is signed by the CAE and the
Executive Director, Office of Program Accountability and Risk
Management. These reviews provide insight to systemic acquisition risks
across the Department. By the end of fiscal year 2010, nine Component
portfolio reviews were held. During these reviews, 61 major programs
were examined (over 90 percent of the major program portfolio).
The implementation of Directive 102-01, Acquisition Management has
improved program oversight over the last 3 years. The ARB reviews the
program's status, progress against the current program plan, current
risks, and other program issues. The policy has resulted in DHS program
having numerous interactions with many of DHS' major programs, and has
allowed us to mitigate or avoid cost, schedule, and performance risks.
Since early 2008, there have been more than 50 ARBs conducted. We
submit a quarterly DHS Major Acquisition Status Report which serves to
summarize the current health and highlight our enhanced oversight of
these programs.
Question 8. What policies or procedures are in place to improve
collaboration, coordination, and awareness of technologies and
capabilities across components of the Department, the Federal
Government, universities, and the private sector when developing
program requirements for acquisitions?
Answer. The Science and Technology Directorate (S&T) has fostered a
number of programs and engagements with Components, other Federal
agencies, universities, and the private sector to improve
collaboration, coordination, and awareness of technologies. The Under
Secretary for Management (USM) organizations have been collaborating
with S&T on a number of these initiatives. One of USM's internal
initiatives is to support DHS Component awareness, understanding, and
use/adaptation of proven best practices. USM plans to establish a
Requirements Best Practice Community and S&T will establish a
corresponding Community for Test and Evaluation. These communities
provide DHS Components and program managers with proven tools,
processes, and standards, as well as expert support. Each community
will establish a more defined and repeatable approach to requirement
definition to ensure that our process guidance explains the information
needed for success. They will support use of best-in-class requirements
management and execution tools as well as standardize operating models
for how to best use the tools.
To educate stakeholders on the DHS requirements process and how
organizations like S&T address the needs of the DHS Operational
Components, first responders, and private sector partners through this
process, the DHS Private Sector Office and S&T jointly published
Harnessing the Valuable Experience and Resources of the Private Sector
for the Public Good: Innovative Public-Private Partnerships. This book
demonstrates how sharing information on detailed operational
requirements and conservative estimates of potential available markets
can lead to the cooperative development of needed capabilities. It also
contains information on S&T's commercialization initiatives that foster
mutually beneficial public-private partnerships in order to field
products, technologies, and/or services.
Science and Technology has also established twelve Centers of
Excellence (COE) at universities to develop new technologies, tools,
and advanced methods to support the DHS mission. COE focus areas
include transportation security, food protection, natural disasters,
maritime, border security, immigration, explosives detection, etc.
Research priorities at each COE are carefully defined and vetted with
relevant subject matter experts from across DHS and the Federal
Government through formal workgroups. Many COE projects are jointly
funded by DHS components or other agencies, further enhancing
collaboration and coordination. We are also working together on a
number of IT technology pilot projects with the objective to engage
industry partners and operational personnel to evaluate systems before
establishing acquisition programs. The goal is to ensure future
acquisitions provide necessary capabilities and requirements before
executing programs and allocating significant funding to these
initiatives.
Question 9. The private sector has stated that there are instances
where program requirements are modified after an award of a contract.
How have these modifications lead to contract cost overruns and time
delays?
Answer. Since the circumstances of each program and any related
requirements modifications are different, it is not possible to provide
a specific answer to this question. To ensure that contract
requirements have been adequately identified at the time of award, the
FAR requires that acquisition planning begin as soon as the need is
identified. As a result, at the time of contract award, the
requirements should have been vetted among all interested parties, with
close coordination between the requiring activity and the procuring
activity.
Even with such planning, requirements modifications will occur due
to a variety of circumstances. Some examples of these requirements
modifications include but are not limited to: Changes in funding
levels, changes in strategy, and development of new technologies. The
program manager attempts to mitigate the impact of any such changes;
however, depending on the particular circumstances, there will be
instances where contractors may be required to revise their estimated
cost and may require time to re-direct their efforts. The result can
contribute to cost overruns and schedule delays, which is why we are
striving to improve the ``front end'' of the acquisition process.
DHS will improve the investment effectiveness at the ``front end''
by providing better linkage between requirements development, resource
allocation, procurement and program management. We can ensure planning
documents and activities have been accomplished to validate capability
needs, define business requirements, perform preliminary cost
estimates, and perform alternatives analysis before an acquisition is
undertaken. With the proper pre-planning work, an appropriate
acquisition strategy can be defined. This will allow potential vendors
to clearly understand the Government's requirements during the
solicitation phase resulting in contracts with appropriate solutions
and scope to be put into place at time of contract award.
Question 10. What policies and/or procedures do you have in place
to ensure regular communication with and support from State and local
entities and on-the-ground operation personnel utilizing the new
technology and capability when developing program requirements and
modifying program requirements?
Answer. While Components are responsible for engaging all of their
stakeholders to define program requirements, the Management Directive
102-01, Acquisition Management will validate this communication has
taken place at different points throughout the acquisition life cycle.
The initial point where this occurs is with the definition of the
Mission Needs Statement, where the Component or program defines what
mission gap exists. We ensure Department communication occurs through
the validation of the mission need against Department's strategic
direction (Integrated Planning Guidance) and priorities, and the Office
of Policy.
The most significant engagement point in the Management Directive
102-01, Acquisition Management is through the development of the
Analysis of Alternatives. Here we ensure that the Department has a
validated need for a capability, understands the requirement, has
developed preliminary cost estimates and has reviewed alternatives
before a new acquisition is undertaken. The Component Acquisition
Executive is responsible for reviewing and approving the Analysis of
Alternatives.
Finally, the Component or Program develops an Operational
Requirements Documents (ORD) that defines the business level
requirements to fulfill a mission need. We validate that the proper
interaction has been completed across the stakeholder community to
define these requirements as key performance parameters and ensure the
need is not being filled by an existing system or another planned
program. The purpose is to identify synergies as well as efficiencies
necessary for the Department to meet requirements and achieve DHS
enterprise architecture, as applicable.
All acquisition program artifacts are reviewed by the Office of
Program Accountability and Risk Management (PARM) prior to a request
for a decision on an Acquisition Decision Events (in accordance with
the MD 102-01) by the Deputy Secretary or the Under Secretary for
Management (USM) who must review and approve these critical planning
documents before the program moves forward with the acquisition
planning stage.
Question 11. How does the turnover rate of program managers and
contracting officers impact program requirement modifications, cost
overruns, and time delays?
Answer. Turnover of program managers and contracting officers is an
inevitable occurrence, since no individual will stay in a particular
job for perpetuity. The impact of such changes is twofold: (a) Filling
the position with a capable replacement, and (b) the time required by
the replacement to become familiar with the program so that he/she can
manage it in an efficient and effective manner. In regards to capable
replacements, DHS has implemented a strong certification program for
program managers and contracting officers, which has resulted in a
cadre of certified individuals that can fill gaps when turnover occurs.
In addition, DHS is currently implementing an IT certification program
to further fill potential gaps that may result from employee turnover.
However, even when the vacancies are filled with qualified individuals,
there will almost always be some time delays involved in a transition,
as the program manager becomes familiar with the program strategy,
funding, and other key elements, and the new contracting officer
becomes familiar with the contracting strategy. In addition, as is the
case with any other transition activity, the new program manager and/or
contracting officer may decide to take the program or contract strategy
in a different direction, based on their judgment of the cost/benefits
involved in re-directing the strategy. This re-direction could then
result in a modification to the program or contract requirements. As
noted in our response to the prior question, this requirements
modification may in turn result in a revised estimated cost and
additional time for the contractor to re-direct their efforts.
Question 12. Does the Department have a strategic plan for the
acquisition workforce? What is the Department's plan to recruit, train,
and retain acquisition professionals?
Answer. Integrating the Department's people, structures, and
processes to achieve the Department's mission goals is one of my top
management priorities. The biggest challenge is to institute meaningful
change without disrupting mission-critical, day-to-day operations. The
``Integrated Strategy for High Risk Management'' plan, submitted to GAO
in January 2011, detailed our Integrated Investment Life Cycle which I
consider to be a holistic process to manage our investments.
DHS recognizes that the adequacy of major Program Management
Offices (PMOs) and Acquisition Oversight Staffs varies widely
throughout the Department. The Department has issued a performance goal
to improve acquisition execution across the Acquisition Portfolio by
ensuring key acquisition expertise resides in major program offices and
Acquisition Oversight Staffs. In support of this goal, the Under
Secretary for Management (USM) directed a program office staffing
assessment in fiscal year 2010. This assessment reviewed the staffing
of Component major program offices and Acquisition Oversight staffs
with a focus on determining the adequacy of key disciplines of
Government personnel.
Key findings of the assessment found:
there is a lack of engineering and logistics expertise
across the Department;
there is an absence of Cost Analysts/Cost Estimators across
the Department;
interpretation of Component Acquisition Executive (CAE) core
staff requirements vary by Component;
certification programs are in place for Program Manager and
Contracting Officer's Technical Representative (COTR); and
certification programs for Logistics, Financial Manager, and
Cost Analysts/Estimators are newly established, and System
Engineering certification program is in development.
Planned initiatives to address this staff deficiency include
expanding the Acquisition Corps, especially in the program management
(PM) area; and improving the quality of PM training. The purpose of the
Acquisition Corps is to raise the standards of professionalism and
performance within the PM discipline, especially in the requirements
development and cost estimating phases. A fully-deployed Acquisition
Corps will improve efficiency by leveraging resources based on a
mission need, as opposed to hiring new employees. Furthermore, because
Corps members will complete competency-based training to maintain their
Corps status, the effectiveness of critical programs should improve.
Like many Federal agencies, DHS does not have sufficient numbers of
qualified and trained program managers. Under the direction of the
Office of Chief Procurement Officer (CPO), the Department has
established several DHS-specific curricula and certifications. During
fiscal year 2011 and into fiscal year 2012, the OCPO is working with
the OCIO to develop a certification curriculum for program managers in
the information technology area. Training effectiveness will be
measured and courses provided Nationally. Other agencies have
participated in DHS courses and the feedback provided is positive. The
enhanced training, along with the expansion of the Acquisition Corps,
will significantly increase the acumen among program managers within
DHS. It will also provide the flexibility to allocate resources, where
needed, and create bench strength within the acquisition workforce to
manage resource-challenged programs.
The Department has already established seven acquisition
certification programs. Each of the seven identifies the education,
training, and experience necessary to effectively execute the
responsibilities of that career field. Certification programs have been
established for the following career fields: Contracting, program
management, test and evaluation, business cost estimating, acquisition
financial management, and logistics; DHS has also established a
certification program in the Contracting Officer's Technical
Representative specialty. Under development is the certification
program for systems engineering and we plan to develop a certification
program for IT program managers. Supplementing our certification
program is our centralized acquisition training program. Our training
program includes certification training as well as continuous learning
classes in acquisition related topics. When appropriate, DHS customizes
its acquisition training program to address applicable DHS policies and
procedures. For example, in fiscal year 2010, DHS completed the
development of its Program Management curriculum. The tailoring of
classes enables DHS to educate its workforce on DHS acquisition
policies and on best practices in program management thus fostering a
culture of ``One DHS.'' In fiscal year 2011, DHS continues to develop
course work specifically tailored to DHS policy and processes. For
example, DHS is developing a fundamentals course in test and
evaluation, systems engineering, and business cost estimating.
The Acquisition Professional Career Program (APCP) serves as our
succession plan for filling future acquisition workforce needs. The
APCP is a 3-year development program that recruits high-caliber
individuals into the following entry-level acquisition career fields:
Contracting, program management, systems engineering, logistics,
business, cost estimating, and acquisition information technology.
During the program, participants receive acquisition as well as
leadership training and obtain certification levels commensurate with
their experience. Upon graduation, participants are assigned to
component contracting and acquisition program offices as members of the
DHS acquisition team. In fiscal year 2011, the Department reaped the
benefits of this initiative by graduating 30 contracting specialists.
Once fully implemented, the program will deliver 100 trained and
certified new acquisition professionals to the DHS acquisition
workforce every year to offset losses from retirements and transfers to
non-DHS agencies.
Finally, identifying and staffing program offices with the right
people with the right skill sets are imperative to strengthening the
acquisition management process. In 2010, the Department established a
High Priority Performance Goal (HPPG) to ensure that key acquisition
expertise resides in our major program and acquisition oversight
offices. The Department has met or exceeded all goals related to
strengthening the acquisition programs and oversight offices to ensure
the Department of Homeland Security (DHS) major acquisitions are
effectively managed in order to maximize the value of every DHS dollar.
At the end of September 30, 2011, 94% of the Program Managers of major
acquisition programs are properly certified in accordance with
Department policy, exceeding the fiscal year 2011 target goal of 93%.
Since the beginning of the fiscal year, we have increased the number of
Program Management Offices (PMO) reporting that they have all five of
their respective core positions filled or matrixed from 20 at the end
of fiscal year 2010 to 34 and have increased the number of approved
Acquisition Program Baselines (APBs) from 17 to 28 at the end of the
fourth quarter fiscal year 2011. The current percent of major
acquisition programs with a core team; signed APB; and meeting cost/
schedule/performance is 89%, exceeding the fiscal year 2011 goal of
70%. All seven major operational Components have a Component
Acquisition Executive (CAE) in place (100%). The total number of CAE
staff positions filled has also increased from 25 to 42. The current
percent of Component acquisition oversight organizations with core team
positions filled or matrixed is 75%, meeting the fiscal year 2011 goal
of 70%. The percent of PMOs with major acquisition program core team
positions filled is roughly 70%, which minimally achieves the
Department's goal. Additionally, this year, the Under Secretary for
Management has implemented major initiatives to include building the
Department's Program Management Corps by strengthening training and
certification and expanding the current acquisition mentoring program.
The DHS Appropriations Act of 2012 provided a total of $78,000,000
to OCPO, including an increase of $3,403,000 to enhance DHS acquisition
capabilities.
Question 13. The private sector believes that the DHS procurement
process could be improved by increased communication and by bringing to
the table early in the procurement process end-users, industry, program
managers, and contracting officers.
What measures have DHS taken to address this concern?
How does DHS share with industry its mission needs and what
measures are you putting in place to improve that dialog?
Answer. The Department of Homeland Security (DHS) recognizes that
effective vendor engagement in the acquisition process is critical to
competition, the identification of commercial item solutions, and the
realization of savings. Following is a series of functions, procedures,
and policies that the Department has in place to inform and promote
vendor engagement, enhance competition and transparency.
The DHS Office of the Chief Procurement Officer (OCPO), in
conjunction with the Office of General Counsel and its Ethics
Office provide on-going guidance to the DHS acquisition
community regarding responsible and constructive exchanges with
industry.
DHS's Office of Small and Disadvantaged Business Utilization
(OSDBU) and Component Small Business Specialists provide active
small business support through:
Outreach--participation in over 100 functions per year,
and on-going dialogue with small businesses;
Preparation and Dissemination of the DHS Acquisition
Forecast--generally issued twice a year and updated on an
on-going basis.
OSDBU, with Component support, sponsors popular monthly
Vendor Outreach Sessions, comprised of a series of pre-arranged
15-minute appointments between DHS Small Business Specialists
and representatives from small business communities. These
sessions provide the small business community with an
opportunity to discuss their capabilities and learn of
potential procurement opportunities. Until recently, when the
Small Business Central Event Listing was launched on
FedBizopps.gov, session and registration information was posted
by OSDBU on www.dhs.gov.
DHS has an active full-time Ombudsman and Industry Liaison
who provides on-going information and advice to industry and
Components alike.
For a number of years, DHS has hosted an annual DHS Industry
Day. Industry Day activities include panel discussions from
each Component moderated by the respective DHS Head of
Contracting Activity (HCA). The panels provide acquisition
planning information for the specific Component/Contracting
Activity. This 1-day event provides a forum by which the
Department can communicate its requirements and increase
competition by sharing useful information. Industry Day is open
to representatives of both small and large businesses.
Various DHS Components plan and host Industry Days, issue
draft requests for proposals, requests for information (RFI),
and hold pre-solicitation conferences and de-briefings on an ad
hoc basis.
The DHS acquisition training, regulations, and policy
supplement Federal Acquisition Regulation guidance related to
communication with vendors, and establish frameworks that
promote responsible and constructive exchanges with industry,
e.g., the DHS Market Research Guide's Rules for Meeting with
Industry Representatives and Guidelines for One-on-One
Discussions; DHS Procurement Ethics Training contains specific
guidance regarding pre-award exchanges with vendors, methods
for communicating with vendors, the proper handling of source
selection, contractor bid, and proposal information.
To demonstrate DHS's commitment to effective communication with
industry, Dr. Nick Nayak, DHS Chief Procurement Officer, has added
Quality Industry/Government Communication as one of the OCPO strategic
plan's four major priorities. This priority incorporates the DHS plan
for improving communication with industry during the acquisition
process developed in response to the Office of Federal Procurement
Policy's February 2, 2011, memorandum entitled `` `Myth-Busting':
Addressing Misconceptions to Improve Communication with Industry during
the Acquisition Process.''
On May 4, 2011, the OCPO issued Acquisition Alert 11-18,
``Department-wide Plan for Improving Communication with Industry During
the Acquisition Process.'' The Acquisition Alert, issued to DHS Heads
of the Contracting Activity (HCAs), and disseminated to the DHS
acquisition workforce, included a copy of the ``Myth-Busting''
memorandum; identified existing DHS functions, procedures, and policies
to inform and promote vendor engagement; and established a Department-
wide plan of action to be executed over the next year to enhance vendor
engagement policies and practices.
Acquisition Alert 11-18 called for the receipt of pledges from HCAs
to the Chief Procurement Officer to enhance Component engagement with
industry by:
Designating an appropriately placed Component official to
serve as the Component Industry Communication Liaison with
responsibility for promoting vendor engagement by the
Component, and ensuring that Component contracting personnel
are aware of, and implement the DHS Market Research Guide's
Rules for Meeting with Industry Representatives and Guidelines
for One-on-One Discussions;
Communicating early, frequently, and constructively with
industry in accordance with the Federal Acquisition Regulation,
Homeland Security Acquisition Regulation, Homeland Security
Acquisition Manual including the DHS Market Research Guide's
Rules for Meeting with Industry Representatives and Guidelines
for One-on-One Discussions, and Component supplements thereto;
Striving to be more inclusive by including small businesses,
subgroups of small businesses, and vendors that the Component
has not worked with in the past in their communications with
industry;
Annotating DHS's published procurement forecast to identify
procurements that are likely to involve opportunity for
additional communication with industry, e.g., pre-solicitation
conferences, draft requests for proposals, RFIs, Industry Days;
Protecting non-public information including vendors'
confidential information and the Components' source selection
information;
Promoting Component participation in Department and
Government-wide awareness campaigns to eliminate unnecessary
barriers to vendor engagement; and,
Posting and routinely updating engagement events to include
industry days, small business outreach sessions, pre-
solicitation conferences, RFP question-and-answer sessions,
using the existing ``special notices'' function and the new
Small Business Central Event Listing on Government-wide systems
such as FedBizOpps (www.fbo.gov) in accordance with Acquisition
Alert 11-14 which provides detailed information on the Small
Business Central Event Listing on FedBizOpps).
Every DHS HCA signed and submitted a Vendor Engagement Pledge to
the OCPO by June 6, 2011.
HCA Vendor Engagement Pledges were accompanied by Component
Industry Communication Liaison designations. As indicated in the
pledges, Component Industry Communication Liaisons are responsible for
promoting vendor engagement by the Component, and for ensuring that
Component contracting personnel are aware of, and implement DHS
policies and procedures related to vendor engagement, e.g., the DHS
Market Research Guide's Rules for Meeting with Industry Representatives
and Guidelines for One-on-One Discussions. Component Industry
Communication Liaisons will also be notified of, and responsible for,
promoting Component participation in Department and Government-wide
training opportunities and awareness campaigns to eliminate unnecessary
barriers to vendor engagement. The DHS and Component Industry Liaison
listing has been posted to the following DHS Internet site: http://
www.dhs.gov/xopnbiz/opportunities/industry-communication-liaisons.shtm.
On August 16, 2011, Component Industry Communication Liaisons will
meet with representatives from the OCPO, including the Chief
Procurement Officer and DHS Ombudsman, who will establish expectations
regarding the Industry Communication Liaisons' roles and advise them of
Industry/Government communication enhancement interests and needs, DHS
policies and procedures related to vendor engagement, and the various
emerging and available tools for enhancing communication with industry.
Component Industry Communication Liaisons will be tasked to work with
their respective HCAs to develop Component fiscal year 2012 action
plans to promote enhanced vendor communication.
Additional actions planned or taken to enhance communication with
industry include:
The DHS Acquisition Planning Guide (Appendix H to Homeland
Security Acquisition Manual (HSAM) Chapter 3007) has been
amended to require that acquisition plans for major system
acquisitions as defined in DHS Directive 102-01 ($100 million
in annual expenditures (for services) and $300 million (for
supplies)), which implements FAR Part 34, include a vendor
engagement strategy (as identified in the ``Myth-Busting''
memorandum) or justify why those steps are unnecessary. DHS
policy will also be amended to encourage that acquisition plans
for non-major system acquisitions greater than $10 million
include a vendor engagement strategy. Written justifications
for not including a vendor engagement strategy will not apply
to non-major system acquisition plans.
Through Acquisition Alert 11-14, ``The Small Business
Central Event Listing,'' issued on March 18, 2011, the DHS
contracting community was notified of the availability of the
new Small Business Central Event Listing, an automated search
tool on FedBizOpps (www.fbo.gov), designed to highlight small
business outreach and training opportunities. The Alert
required the DHS Office of Small and Disadvantaged Business
Utilization (OSDBU) and each Component to take immediate steps
to use the Small Business Central Event Listing feature on
FedBizOpps (www.fbo.gov) as a means of sharing new information
on small business outreach and training opportunities. Although
they are not required to use the FBO Small Business Central
Event Listing as their only source for posting small business
events information, OSDBU and DHS Component Small Business
Specialists were reminded to ensure that any event information
posted by them on DHS internet sites is consistent with the
information that they post to the FBO Small Business Central
Event Listing, and that all information posted is current,
complete, and accurate. The DHS OSDBU posts information to FBO
on small business events that are attended by all or the
majority of DHS Components.
In addition, through their executed Vendor Engagement Pledges, DHS
HCAs also pledged to post and routinely update engagement
events to include industry days, small business outreach
sessions, pre-solicitation conferences, RFP question-and-answer
sessions, using the existing ``special notices'' function and
the Small Business Central Event Listing on Government-wide
systems such as FedBizOpps (www.fbo.gov).
The DHS Competition and Acquisition Excellence Awards for
Promoting and Achieving Competition established in 2007,
recognizes outstanding initiatives and accomplishments that
contribute to the efficiency, economy, and improvement of
procurement operations and agency mission support through the
promotion of full and open competition and transparency; the
acquisition of commercial items; and challenging barriers to
competition. The Department considers the absence of effective
Government/Industry communication to be a major barrier to
transparency, competition, and the identification of commercial
item sources. Therefore, as part of its plan for improving
communication with vendors during the acquisition process, DHS
will incentivize responsible and constructive exchanges with
vendors by including the demonstrated implementation of an
effective vendor engagement strategy, e.g., hosting Industry
Days, issuance of draft RFPs, pre-solicitation conferences, use
of wikis to solicit comments, as a formal evaluation criterion
in the evaluation of Component team and individual nominations
for the DHS Competition and Acquisition Excellence Awards
Program.
It is important to communicate appropriate information at
all stages in the acquisition process and especially valuable
to communicate with unsuccessful offerors at the end of the
award process. In April 2011, as part of the DHS Communications
Plan, OCPO amended the Homeland Security Acquisition Manual
(HSAM) to incorporate a new DHS Debriefing Guide (Appendix AA
to HSAM Chapter 3015). The Debriefing Guide summarizes
regulations and DHS policy regarding debriefings and
explanations of the basis for award to encourage communication
with unsuccessful offerors as a means of reducing
misunderstandings and protests; improving future proposals; and
obtaining information that improves DHS's acquisition process.
Beginning in May 2011, OCPO launched related debriefing
training for the DHS contracting community.
On July 6, 2011, DHS announced in FedBizOpps.gov the July
11, 2011 release of its Acquisition Planning Forecast System
(APFS). The APFS is the Department's updated acquisition
planning and forecasting system which provides real-time access
to the DHS Forecast of Contract Opportunities. The user-
friendly interface to APFS will allow businesses to use a
number of search criteria to narrow their search for business
opportunities information and download forecast entries of
interest into Excel for further analysis. The APFS is
accessible at: www.dhs.gov/xopnbiz.
Through the Department's Ombudsman, OSDBU, Component
Industry Liaisons and HCAs, DHS plans to follow-up with
employees and industry representatives within 6 months of
posting the DHS Vendor Engagement Plan (in accordance with the
Office of Federal Procurement Policy's February 2, 2011,
``Myth-Busting'' memorandum, agency Vendor Engagement Plans
must be publically posted following Office of Management and
Budget review and clearance) and periodically thereafter, to
further refine and improve communication. Post-award surveys
will solicit comments and suggestions from Contracting
Officers, Program Managers, and offerors for large, complex
procurements. Feedback will also be sought as a part of
debriefings and focus group meetings.
Question 14. Many acquisition programs have failed to provide full
cost-benefit analyses in the early stages of the acquisition process.
This has put DHS at risk for cost overruns and performance shortfalls.
Why are acquisition programs being approved without these important
documents?
Answer. In November 2008, DHS implemented a comprehensive approach
establishing acquisition management standards and oversight through the
issuance of Directive 102-01, Acquisition Management (final in January
2010). This acquisition management framework formalized Acquisition
oversight and governance for all programs. Oversight of Level 1 and 2
is performed by DHS Under Secretary of Management, while level 3
programs are handled by the Component Acquisition Executives (CAE).
This tiered oversight model established a standard process for
acquisition and program management oversight, policy, and guidance to
ensure statutory, regulatory, and higher-level policy requirements are
fulfilled.
The implementation of this directive improved the pre-planning
acquisition process. Pre-planning documents, including Analysis of
Alternatives (which includes a Cost Benefit Analysis) ensures that the
Department has a validated need for a capability, understands the
requirement, has developed preliminary cost estimates and has reviewed
alternatives before a new acquisition is undertaken. The Component
Acquisition Executive is responsible for reviewing and approving the
Analysis of Alternatives. All acquisition program artifacts are
reviewed by the Acquisition Program Management Division (APMD) before
coming forward for Acquisition Decision Events (in accordance with the
D 102-01) and approved by either the Deputy Secretary or Under
Secretary for Management (USM) who must review and approve these
critical planning documents before the program moves forward with the
acquisition planning stage.
In rare cases when a program is authorized to proceed without
formal document approval, an Acquisition Decision Memorandum is
prepared identifying the corrective actions and time frame a program
must resolve them. Programs do not proceed through the acquisition life
cycle until this occurs. To further improve this, we are developing a
risk management element within our decision support tool as well as a
standard criterion to evaluate program risks. This module will provide
for a centralized means to track risks both at the Department and
Component level. The variety of venues the Department uses to review
programs strengthens risk management. ARBs, portfolio reviews, and day-
to-day contact all aid in identifying risks faced by programs.
Question 15. In your testimony you lay out a plan to improve the
acquisition process at DHS to ensure that all acquisition programs have
solid and well-defined program requirements.
How will all these new councils and boards ensure that the
acquisition process runs smoothly?
How long will it take before we will start seeing improvements in
the acquisition process?
Answer. Soon after my arrival at the Department, I convened my
senior leadership team to re-energize previous efforts to transform
DHS, ``knitting the Department'' together into a more cohesive, well
functioning Department. Integrating the Department's people,
structures, and processes to achieve the Department's mission goals is
one of my top management priorities.
In January 2010, the Department issued an initial integration plan,
which focused on seven management initiatives. In January 2011, the
Department issued an enhanced plan, ``Integrated Strategy for High Risk
Management.'' The enhanced strategy was developed in collaboration with
Headquarters and Component leadership and addressed many of the GAO's
recommendations that have been unresolved since 2003. While there
continued to be fundamental challenges across our management functions,
I am pleased that GAO has recognized the Department's progress. In a
transformed state, our mission goals will drive strategies and the
effectiveness of those strategies will be measured by key performance
indicators or outcomes. I am striving to change the old paradigm where
budget submissions arbitrarily drove strategy. In the new model, my
strategic priorities, currently defined in the Quadrennial Homeland
Security Review (QHSR) will drive operating budgets.
DHS will improve the investment effectiveness at the ``front end''
by providing better linkage between requirements development, resource
allocation, procurement and program management. The model strengthens
the ``front end'' through strategic phasing performed by the Department
Strategy Council (DSC) and the Capabilities and Requirements Council
(CRC). The CRC will perform ``trade-off'' decisions, reconcile
disagreements across program offices and ensure DHS strategic
priorities are met. It will focus on closing capability gaps based on
the DHS' key functional areas (e.g., domain awareness, screening, law
enforcement). This will be accomplished by aligning requirements on the
basis of broad portfolios, validation of investment strategies,
approving analyses of alternatives and Operational Requirement
Documents.
Questions From Chairman Michael T. McCaul for Tara O'Toole
Question 1. The Government Accountability Office just released a
report describing the Transportation Security Administration's (TSA)
failure thus far to implement its 2010 requirements for explosives
detection systems. One of the reasons GAO cited for this lapse is that
TSA and S&T have experienced challenges in collecting explosives data
needed to procure and deploy systems that meet those requirements.
While it is understandable that scientific endeavors like this can
be unpredictable, on the other hand, does the process somehow need to
be revised so that industry is not gearing up to meet requirements for
an acquisition that realistically, simply may not happen due to
scientific challenges?
What can we learn from this experience so that we do not find
ourselves in a similar position in the future?
Answer. S&T concurs with GAO's recommendation that changes need to
be made to the development and acquisition processes. To ensure that
TSA has the information it needs to effectively set requirements for
future detection systems, S&T is working closely with TSA at all levels
to better align S&T research and development programs with TSA's
priorities and acquisition schedules. This allows S&T program managers,
who are overseeing system development and testing and evaluation, as
well as conducting research and gathering data, to establish realistic
expectations of the scientific challenges and likely research time
frames.
The time required for research and discovery is, of course,
inherently difficult to predict. In this case, delays in collecting
research data that support TSA acquisition were caused by unexpected
technical and safety issues not previously encountered in explosives
characterization and detection programs. TSA must establish aggressive
acquisition schedules to ensure the rapid deployment of new technology;
enhance security capabilities to meet emerging threats; and satisfy
budget deadlines established by the use of ARRA funds. S&T and TSA are
collaborating on the development of more effective program management
practices to address these issues.
One outcome from this experience was the development and commitment
to a joint TSA/S&T research and development strategy (documented in
Aviation Security Technology Research and Development Strategy--
attached) that provides a cohesive vision for technology development
and will facilitate the successful transfer of technologies.
In addition to working with TSA, S&T is striving to collaborate
closely with industry during the research and development process. By
engaging industry as programs are being defined, S&T will be better
positioned to anticipate industry's production capabilities to meet
potential TSA requirements. Industry will also be brought into the
program development cycle earlier so that they have a more accurate
understanding of the Department of Homeland Security's needs.
Question 2. Please describe the process by which the components
engage you when they plan to acquire technology--that is, do they come
to you for assistance when their acquisitions hit a certain cost
threshold? If they don't come to you, is anyone assessing whether the
technology is sufficiently mature for acquisition or whether it needs
more R&D? Have there been any acquisitions that you know of in which
you were not involved, but should have been?
Answer. The components are not required to consult S&T when
planning to acquire technology, and in the past have not generally done
so. Between 2007 and 2010, components sought S&T assistance through the
Capstone Integrated Project Team (IPT) process, a practice which
allowed the components to prioritize desired technological solutions to
operational problems that required research and development
investments. S&T then designed and pursued research and development
efforts according to budget limitations and technological feasibility.
Some of these efforts led to product acquisition, but historically S&T
has not played a significant role in DHS acquisitions--except to
execute its mandated responsibilities in operational testing and
evaluation at the ``back end'' of the acquisition cycle, typically just
before a procurement decision is made. It is important to understand
that operational tests assess compliance with the operational
requirements established by the component. Creating such requirements
is not easy (it has been referred to as a ``black art'') and
necessitates a deep understanding of the technology being considered;
operational needs and constraints; and life cycle cost factors. The
evolution of the DHS Acquisition process now underway is intended to
elicit and ensure that all acquisitions are governed by robust
requirements.
In November 2010, part of S&T's realignment was the establishment
of the Acquisition Support and Operations Analysis (ASOA) group, which
is intended to serve components' technical acquisition needs upon
request. In past months, ASOA has responded to requests for assistance
on several planned projects and on projects already underway.
Additionally, S&T and the U.S. Secret Service (USSS) are engaged in an
``Apex Project,'' which is designing a systems-based approach to
technology acquisition for a specific aspect of USSS operations. In
addition to delivering a systems analysis of potential technologies and
their respective ``trade space'' (i.e., benefits, life-cycle costs,
etc.) the project will pilot several possible technology options for
consideration. We are also altering our research and development
project management process to ensure that successful research can more
easily transition into acquisition.
The new S&T/Component Technology Investment Councils (STIC), which
are now being established, will build on and strengthen the former
Capstone IPTs. The STIC process will include engagement of component
leadership and will enable components to request S&T technical and
acquisition assistance, as well as request technological solutions.
The Under Secretaries of S&T and DHS Management are both committed
to making significant improvement in the DHS acquisition process and
are devoting resources to this end. S&T routinely will be engaged in
the ``front end'' of the acquisition cycle, beginning with reviewing
the adequacy of technology requirements. In some cases, S&T may assist
components in activities that precede the formal ``acquisition''
process--for example, in analyzing the operational problem or helping
to conduct technology analysis of alternatives. S&T also participates
in the DHS Acquisition Review Boards (ARBs), which are the highest DHS
acquisition decision-making forums for acquisition programs. S&T's two
members of the ARB are our Component Acquisition Executive and the
Director of Operational Test & Evaluation. Through these
representatives, S&T is able to provide input into the acquisition
decision-making body regarding the technological and testing readiness
of component acquisition programs before they advance to the next phase
of the acquisition process.
Question 3. One of your responsibilities in providing acquisitions
support is assessing the technical risks of technologies under
consideration for procurement. That is to say, your subject matter
experts make assessments as to the maturity and suitability of
technologies for their intended purpose, thereby avoiding major
acquisitions mistakes and financial waste.
Can you please tell the committee whether or not you have a formal,
metrics-based process in place to comprehensively assess such technical
risks? If not, when do you plan to implement such a system to ensure
consistency and rigor across the Department's procurements?
Answer. S&T uses a standard Technology Readiness Level process to
assess the technological maturity of projects and programs within a
research and development context. This metric-oriented process includes
standard definitions for nine readiness levels in research and
development. TRLs do not, however, assess the suitability of a
technology for certain applications or allow reliable comparisons of
different technologies. S&T's portfolio review process, to which all
S&T research and development projects are subject on an on-going basis,
includes several metrics for assessing ``technical risk.'' Within the
context of an on-going acquisition, iterative developmental testing
against established requirements is essential to mitigate technical
risk. Developmental testing is the responsibility of the component.
S&T, as the designated operational test authority for DHS, oversees
operational testing prior to making procurement decisions.
S&T is the co-chair of a new Technology, Science & Acquisition Risk
Working Group, which is part of the Department's Risk Steering
Committee. This working group will continue to standardize the
Department's approach to measuring technological risk across its
investments.
Question 4. How do you prioritize your research efforts--are the
customers involved? Is this process agile so that it can be responsive
to unanticipated and emerging threats?
Answer. At the strategic level, the directorate's priorities for
areas of research, development, and analysis are derived from an
understanding of near- and long-term threats, National needs, and DHS
mission needs and operational vulnerabilities, as articulated in the
administration's National Security Strategy, the Quadrennial Homeland
Security Review (QHSR), and the capability gaps and operational
requirements of DHS components and first responder communities as
established through the STIC process. Each proposed ``new start,'' as
well as each on-going project in our research and development
portfolio, undergoes an on-going review to ensure that it remains
relevant, feasible, and effective.
In reviewing the portfolio, we study written materials, listen to
the project manager's oral presentation, and carefully analyze the
project's likely impact and feasibility (or ``riskiness''), measuring
these attributes against specific metrics determined by S&T with input
from the operating components. These metrics establish a framework to
address elements essential to ensuring that the program will help DHS
meet one or more of its missions, as defined in the QHSR. These
elements include:
Relevance.--To what extent are the project's product(s)
aligned with a concept of operations?
Clarity of customer need.--Are the customer's requirements
clear?
Nature of customer involvement.--Is the team closely
collaborating with the customer to understand, define, and
agree upon project details?
Impact potential.--Do the project's product(s) provide
advantages (such as speed, quality, affordability, superior
concept of operation or breadth of deployment) over the
customer's current approach to dealing with the problem?
Research leadership.--Has this project resulted in
accomplishments (publications, patents, awards, impact on high-
visibility programs or personnel development) that will
position the directorate as a research leader?
Innovation.--Does the project try to realize its objectives
in a way that others have not previously considered or
exploited?
Technical/research feasibility.--How difficult are the
technical or research challenges facing this project?
Project clarity.--How well is the project described or laid-
out? Is it clear what the team will do? Is the problem well-
defined? Is the approach clear?
Transition likelihood.--Is there a clear path to transition?
To customer readiness? Are there any secondary issues related
to the concept of operation; proponency; budgeting, regulatory
or statutory realities; and business value?
Technical maturity.--What is the life-cycle stage of the
core technology that enables this effort?
Time-to-first-use.--When will the results of this research
be usable by a user in the field?
Each project is evaluated and rated by a review panel composed of
S&T leaders, DHS component representatives and independent technical
experts. By measuring all of S&T projects against the framework, we
establish a shareable view of all research and development within S&T.
In so doing, we enable more strategic, longer-term budget decisions;
ensure efficient delivery to the component or individual user; and
cultivate effective communication throughout the process. We also
continue to partner with DHS components through the S&T/Component
Technology Investment Council (successor to the Integrated Product
Team, or IPT) process to help its members develop and prioritize
requirements that improve components' mission performance.
Question 5. How does S&T provide for customer feedback throughout
the development of a technology to ensure the technology will be useful
and fit within any operational constraints?
Answer. Component ``customer'' feedback has historically been
provided to S&T via the Capstone IPT process and will be strengthened
through the STIC process. Feedback has also been provided in working
level IPTs between the components and S&T and via internal portfolio
and strategy reviews. We have successfully piloted a new
``partnership'' approach to research and development projects through
the APEX projects now underway with USSS and Customs and Border
Protection. We intend to emphasize customer engagement as a key
variable in future decisions about research and development
investments. All STIC requests for S&T to perform research and
development will require endorsement by the component head or his
designate. Any S&T investments beyond early, exploratory phase research
will require the formation of a ``partnership'' between S&T and the
component, with specific individuals, including operators representing
the ``end users'' of the technology. This will help ensure on-going
communication and collaboration between S&T and the operating units, as
well as a realistic understanding of the pertinent operational
constraints. S&T's research and development projects will also include
progressively detailed estimates of needed pilot trials, training, and
life cycle costs.
Question 6. Does S&T have any formal annual or periodic review
process where you and the divisions engage external experts in
assessing research progress against established project milestones?
Answer. We have established a process of on-going reviews of our
entire research and development portfolio to ensure that we are: (1)
Investing in technologies that will significantly improve DHS's efforts
to help secure the country and (2) meeting the goals established by our
partners in the operating components and the broader homeland security
enterprise (HSE). We have committed to an annual review of our
portfolio of basic and applied research and development and all
proposed new projects. During this annual review we study written
materials, hear a presentation by the project manager and carefully
analyze the project's likely impact and feasibility (or ``riskiness''),
judging these attributes against specific metrics determined by S&T
with input from the operating components. These metrics establish a
framework to address elements essential to programmatic success in the
context of the DHS missions spelled out in the Quadrennial Homeland
Security Review (QHSR). The framework assesses the project's overall
impact on customer mission; transition of products to the field;
investment in technology to position S&T for the future; coordination
with customers to align projects with their requirements; and
application of an innovative strategy. Each project is evaluated by a
review panel composed of S&T leaders, DHS component representatives and
independent experts. By measuring all of S&T's projects against the
framework, we establish a transparent view of all research and
development within S&T to enable more strategic, longer-term budget
decisions; ensure efficient delivery to the component or individual
user; and cultivate effective communication. These are the same review
model and framework used by both Federal and private research and
development organizations, including the prize-winning Army Engineer
Research and Development Center.
Question 7. What criteria does S&T use to determine whether it will
task a Department of Energy (DOE) National Laboratory, other Federally
Funded Research and Development Centers (FFRDC), universities, or the
private sector with performing R&D to meet identified requirements?
Answer. Selecting a performer to conduct a specific task or
research and development project is one of the most important steps in
research and development. It requires diligent investigation of
potential performers, on-going evaluation and careful professional
judgment. S&T has embarked on an effort to establish a disciplined,
efficient approach to ``technology foraging''--the process of scanning
the wide, dynamic horizon of research and development to identify,
locate, and evaluate emerging or existing technologies, products, and
services, as well as trends in the public and private sectors that
could affect the development of current or future homeland security
systems and architectures, S&T programs or operational needs.
We are piloting possible approaches to technology foraging which
meet S&T's purposes and financial constraints. Foraging services used
by private-sector technology companies whose product sectors are
specialized costs millions of dollars per year. Foraging across the
broad range of technologies used and needed by DHS is extremely
challenging.
S&T attempts to select the best performer, basing each selection on
the task requirements, but some groups have particular strengths.
S&T relies on DOE laboratories to provide enduring capabilities,
such as facilities, infrastructure, management systems, and highly
trained personnel, to deliver critical homeland security solutions. For
example, these laboratories are among the few facilities capable of
testing certain characteristics of homemade explosives. When S&T
enlists a DOE laboratory, it is because that laboratory possesses
unique capabilities and expertise gained from decades of research and
development in its field(s). For example, one laboratory's
understanding of certain mathematical models of explosive effects,
gained from its nuclear weapons missions, proved invaluable for
modeling aspects of aviation security threats. The DOE laboratories
also possess unique capabilities in high-speed computing and chip
manufacturing, capabilities that are important to certain biodefense
activities. Moreover, the DOE facilities invest a portion of their S&T
funds toward building capabilities for future homeland security needs.
Finally, these laboratories are especially suited to conduct basic
research and investigations into complex, enduring, National security
problems requiring multidisciplinary expertise.
DHS Federally Funded Research and Development Centers (FFRDC)
perform a variety of tasks, including systems engineering; conducting
studies and analyses; and operating research laboratories. FFRDCs
provide a unique service to the Government, serving as internal
consultants. The FFRDC's broad, deep knowledge of DHS; their ability to
start work quickly; and their ability to attract and retain high-
quality scientific, technical, and analytic expertise makes them ideal
for certain tasks and problem sets. For example, the Homeland Security
Studies and Analysis Institute (HSSAI) was able to rapidly establish a
team and conduct an analysis of alternatives related to the original
electronic fence along the Southern border. Some tasks require long-
term consultation, which the FFRDC are also suited to provide. Thus, we
utilized the Homeland Security Systems Engineering and Development
Institute (HS SEDI) to construct a ``systems analysis'' of aviation
checkpoint security, a project that has yielded important insights and
which is likely to continue as operations and threats evolve.
Federally Funded Research and Development Centers provide an
independent perspective on the critical issues that they address for
their sponsor(s) and users. A Federally Funded Research and Development
Center has access beyond the level of access common to the normal
contractual relationship. It also has access to Government and supplier
data (including sensitive and proprietary data) and to Government
employees and facilities. A Federally Funded Research and Development
Center may not use its privileged information or access to compete with
the private sector.
A great deal of innovative technology emerges from the private
sector, particularly from small businesses. The directorate has a very
active, award-winning Small Business Innovation Research (SBIR) office.
Through that office, we are seeking better ways to reach out to
companies that do not traditionally do business with the Government;
this is the most important reason we are seeking an extension of Other
Transaction (OT) authority. We have begun to step up our engagements
with the private sector through ``industry days,'' which are intended
to signal the Department's technology needs and priorities and to
better understand companies' potential offerings.
Traditionally, universities have conducted mostly basic research;
however, this tradition is changing. Many of S&T's university Centers
of Excellence (COEs) are producing technologies and analytical products
of great interest to the Department. The work of these researchers is
well-known to S&T. Now, DHS components are also increasingly reaching
out directly to the centers. To date, DHS components have signed COE
contracts worth approximately $22 million in research.
The directorate works with the Department's Office of Procurement
Operations (OPO) to reach the private sector, universities, and
nonprofits. Any of these entities can respond to a number of S&T
solicitations, and our Office of University Programs awards contracts
to university consortiums to serve as centers of excellence for
conducting homeland security research. S&T and OPO established
selection criteria that includes past performance, availability of
technical personnel, preparedness (for example, how steep will the
learning curve be?), subject matter expertise, capabilities, such as
facilities, and costs.
Question 8. We realize there are a number of vacancies within S&T
and it is not a unique problem you face in attracting technical experts
from the private sector to Government service.
In order to meet your goals, including providing Testing and
Evaluation (T&E) and acquisition support to the components, do you
believe you are adequately staffed or staffed with the appropriate
expertise?
Would any special hiring authorities help to attract the right
expertise?
Answer. The Testing & Evaluation area is mature and properly
staffed. The broader acquisition support area is new to S&T. ASOA's
missions and objectives have recently been completed. Currently,
staffing needs are being met through the identification of new
personnel and new billets and/or through the realignment of existing
personnel. In general, attracting scientists and engineers to
Government service is difficult, in part because there is still strong
demand for these skill sets in the private sector and these
professionals do not naturally consider Government as a career option,
and also because pay scales are not competitive with the private
sector. A big impediment to hiring technical experts is the extremely
long time frames (upwards of 6 months) required to complete the Federal
hiring and clearance process. S&T has made important use of ST, 1101,
IPA positions and other special authorities to attract and rapidly hire
technical professionals. While we have made great use of these
authorities, they are intended to bring expert level staff into the
Government. Additional direct hire authority for entry- and mid-level
staff in the difficult-to-attract specialties in the engineering,
science, and technology-related job series would help S&T become more
competitive in the job market and build a solid stable of scientists
and engineers within the Government. Similar authorities exist for
other highly skilled professional series, such as legal and medical
staff.
Question 9. You mentioned that The Science and Technology
Investment Councils (STIC) is currently being developed and that
several of the components of it will be in place by the end of the
fall.
What is the date of when you are supposed to be completed with
developing all of STIC?
Are you currently on track for the development?
When is a estimated date of when these developments will be
implemented?
Are you anticipating any problems from changing from the Capstone
Integrated Product Teams process to STIC?
Answer. The S&T/Component Technology Investment Council (STIC) plan
is complete and is being socialized within the DHS component and
headquarters organizations. The STIC process builds upon the Capstone
IPT process but raises the focus to a more strategic level with
individual components. We do not anticipate problems evolving from IPTs
to STICs. Although research and development projects selected through
the STIC process will require more ongoing engagement of the components
than was usual under the IPT process, the big change will be the
significant decrease in the S&T research and development budget and
consequently, a far more competitive environment for selecting projects
to pursue. The number of research and development projects in the S&T
portfolio has decreased by 60 percent since 2010, from 258 projects to
158 as of July 2011.
Three STIC component teams will commence in the 1st quarter of
fiscal year 2012 and we anticipate that three additional teams will
begin in 2nd quarter fiscal year 2012. The remaining STIC component
teams will start in 3rd quarter fiscal year 2012.
Question 10. You have previously testified that work needs to be
done ``transitioning projects through operational testing and pilots to
adoption by the customer'' and on-the-ground operations.
How can this transitioning process be accomplished in a more cost-
efficient manner?
What obstacles inhibited piloting and testing procedures from being
completed thoroughly before implementation in the past?
What can be done to overcome those obstacles? What steps have you
taken to increase oversight over review processes to ensure that R&D
and project investment are completed on-time and in a thorough way?
Answer. Successfully transitioning new technology from research and
development to routine use is a complex process. It is essential that
research and development begin with a detailed, accurate understanding
of the purpose the technology is intended to serve, and a similar
understanding of the user's operational needs and constraints,
including cost factors. All these factors should be repeatedly
reaffirmed and elaborated upon throughout the course of development, in
consultation with the component leadership and the technology's
intended users. A strong partnership between S&T and component
authorities is needed to ensure that the research and development
effort remains a priority and that the component is preparing to
conduct appropriate operational testing, piloting training, and
acquisition if the technology proves successful.
Due to the urgent operational needs and the need to significantly
leverage greatly reduced S&T budgets, the directorate is emphasizing
the adaptation or adoption of technologies that have reached the late
stages of development, or technologies in which others have invested or
will invest heavily. We will seek to identify such research and
development opportunities through technology foraging, as described in
our response to questions 7 and 11.
Question 11a. The contract and acquisition process has become slow
and cumbersome and has failed to establish proper communication
channels with customers and understanding of operational needs and
constraints.
What process do you have in place to identify operational needs
that require technology solutions?
Answer. We work with components to define S&T research and
development projects. Historically, this partnership has been
accomplished through the Capstone IPT process. However, S&T is
transitioning to two new forms of partnership: (1) A more strategically
focused process called the S&T/Component Technology Investment Council
(STIC), and (2) APEX projects. STICs elevate participation to the most
senior levels of our directorate and of each component. The goal of
these STICs is to engage S&T and the components in a systematic manner
to identify critical operational needs within and across components
that require technology solutions and development by S&T. In addition,
the S&T staff works closely with operators in the field to clearly
understand mission needs and operational realities. At the component's
request S&T has also begun to detail technical experts to particular
component programs to help with specific operational problems and to
acquire a deeper understanding of component needs and operations. An
APEX project, meanwhile, must address high-priority problems and be
reasonably amenable to the formulation of solutions within 18 to 24
months. Each project's purpose and approach are codified in a charter
signed by the Under Secretary for Science and Technology and the
component's head. APEX projects are carried out by well-resourced,
multidisciplinary teams that include both S&T professionals and
operators.
Question 11b. If a technology solution is needed, are your
divisions directed to see if off-the-shelf technology is available or
whether technology can be leveraged from other Government agencies
before proceeding with an R&D effort?
Answer. Yes. Such ``technology foraging'' is a requirement for all
research and development projects. We recognize that such foraging can
reduce both the cost and the time required for research and
development. Accordingly, we actively seek partnerships that would
leverage our own investments. Indeed, our 2010 realignment established
the Research and Development Partnerships Group. That office provides a
portal through which the Department can broadcast its technology needs
and interests. The office also allows the directorate to efficiently
scan the opportunities within the diverse, dynamic research and
development community throughout the world. When assessing technology
needs, we consider whether the solutions already exist; whether other
parties are addressing these gaps; and whether there is an existing
opportunity that DHS can leverage. We seek commercial-off-the-shelf
(COTS) solutions from the commercial sector, other Government agencies,
National laboratories, and universities. S&T is a member of IQT (In-Q-
Tel), a venture-enabled fund established to link the intelligence
community with developments in certain areas of technology development
and to leverage Government technology investments with private capital.
We have several IQT projects under way.
Question 11c. How have the new Apex projects helped to bridge the
customer-developer communication gap and provided oversight?
Answer. S&T develops APEX projects in partnership with the
component to instill ownership and commitment by both organizations.
Both the S&T Under Secretary and the component head sign a charter
outlining the project's objectives, goals, and resources. This
partnership allows S&T to fully understand the component's needs and
mission. The component is a full partner and weighs in on requirements,
planning, technology development, and employment of the final product.
All APEX projects are conducted by teams consisting of S&T staff and
component staff; all are well-resourced. Lessons learned from the APEX
projects are being disseminated throughout other S&T project plans.
Question 11d. How has S&T worked with DHS Component leaders to
oversee project goals and continuously assess each project's progress
on a case-by-case basis?
Answer. S&T engages component leaders throughout the STIC process
and APEX projects. As a result of these partnerships, both S&T and
components dedicate staff and resources to the project. Component staff
works with S&T to plan, define requirements and provide feedback by
participating in working groups, testing and evaluation, program
reviews, and other activities. This partnership helps ensure that S&T
understands the components' requirements and meets them.
Question 12. How has the Office of Private-Public Partnerships
leveraged the innovative ideas and technologies of the private sector
to DHS?
What actions can be taken to enhance the level of technology
foraging within the private sector?
What acquisition and contracting processes inhibit this process
from being completed in a cost-efficient and timely manner?
Answer. DHS S&T's Office of Public-Private Partnerships (PPP),
residing in the Research and Development Partnerships Group (RDP), is
committed to ensuring that personnel both within S&T and throughout DHS
are aware of the myriad of technological advancements underway in the
private sector. As such, it has created a robust outreach capability
designed to maximize DHS insight into the private sector and enhance
the private sector's understanding of DHS requirements. Examples of
this outreach include: Publishing ``Opportunities for the Private
Sector,'' a guide designed to instruct the private sector on how to
effectively work with DHS; publishing ``Developing Operational
Requirements: A Guide to the Cost-Effective and Efficient Communication
of Needs,'' which was designed to instruct operating components of DHS
and other potential end-users of technology, such as first responders,
on how to convey their needs to the private sector; and the sending of
a Full Response Package to all private sector entities that contact DHS
S&T.
The creation of a repository of more than 600 companies and 3,800
self-reported capabilities potentially aligned to DHS needs and
requirements has resulted from this outreach. PPP updates and maintains
this repository and program managers throughout S&T can access it as
part of technology foraging activities to identify potential
alternatives throughout the life cycle of a program.
S&T understands that leveraging private sector and other public
sector technologies, capabilities, and services can help provide needed
high-impact knowledge and products to DHS stakeholders at increased
cost savings and speed of execution. Though PPP and its member offices
form a strong basis for technology foraging at S&T, we are also looking
to work with Federally-funded research and development centers and
industry partners to increase our foraging capabilities and to dive
deeper into technology markets, on-going research, state-of-the-
science, and technology forecasting. Analysts from PPP are working with
other organizations that perform technology forecasting to extract
lessons learned and best practices and to build partnerships.
S&T already has several acquisition and partnering vehicles in
place to work with the private sector and other partners across the
homeland security enterprise (HSE). Memorandums of Understanding,
Memorandums of Agreement, Cooperative Research & Development Agreements
and other non-procurement vehicles allow faster open information and
knowledge sharing than the normal acquisition (contracting) methods.
These vehicles enable S&T to gain useful and actionable information on
products and activities relevant to the HSE needs that may be underway
in the private sector, the National laboratories, university
communities, and other Federal agencies.
Question 13. A November 2008 GAO Report cited that ``many major
investments lacked basic acquisition documents necessary to inform the
investment review process.''
What measures have you taken to address this?
Is it a matter of simply needing better planning and oversight? Or
do you believe that the acquisition process needs changing?
Answer. We do not have detailed insight into why prior acquisition
decisions were made. Since 2009, we have been engaged in the
operational testing and evaluation aspects of acquisitions of a certain
size through our Test & Evaluation and Standards office. In the past 18
months, the directorate has become increasingly engaged in the design
and implementation of the Department's acquisition process. As this
process evolves, we will play an on-going role. The Department
recognizes the need to improve the acquisition process; accordingly, it
is implementing improvements to reduce cost and schedule overruns. DHS
recently published an Integrated Strategy for High Risk Management.
That report provides a comprehensive vision and strategy to manage all
Department-wide investments. We will be a prominent member at the
beginning of the acquisition cycle and remain involved throughout the
acquisition cycle, working closely with four groups of decision-makers:
Department Strategy Council.--We will inform strategic
direction and priorities, using scientific data and
methodologies to analyze National threats, vulnerabilities, and
consequences.
Capabilities and Requirements Council.--We will reconcile
strategic requirements with Department research and development
capability, leveraging existing customer-focused, integrated
product teams.
Program Review Board.--We will provide input into the
prioritization and allocation of research and development
funding among projects for the annual budget and 5-year Future
Years Homeland Security Program.
Investment Review Board.--We will establish the criteria for
testing and evaluation.
To enable improved acquisition decisions, we have established an
Acquisition Support and Operations Analysis (ASOA) group, which
provides the DHS components with a full range of coordinated operations
analysis; systems engineering; test and evaluation; and standards
development support. ASOA will leverage the directorate's critical mass
of technical capability within the Department and will work with the
Under Secretary for Management to:
Help the components develop high-fidelity, testable
operational requirements for their acquisitions;
Help execute an analysis of alternatives to ensure that the
most appropriate technical approach is taken;
Partner with the components throughout an acquisition so
user needs are translated into real capabilities that can be
validated upon delivery and deployed without delay. For
example, the ASOA group currently is assisting Customs and
Border Protection with the Automated Commercial Environment
(ACE), the Mobile Broadband Modernization Program and the
Secure Transit Corridors Program.
Question 14. The establishment of the Acquisition Support and
Operations Analysis (ASOA) has been designed to leverage S&T's
technical capability within DHS to aid in analyzing alternatives and
ensuring that user needs are translated into real capabilities and
deployment without delay.
Has ASOA been effective in establishing operational requirements in
the front end of the acquisition process?
Answer. The Acquisition Support and Operations Analysis (ASOA)
group was established in the 1st quarter fiscal year 2011 and permanent
leadership was put in place in April 2011. ASOA has designed the S&T/
Component Technology Investment Council (STIC) process to identify
prioritized operational requirements and potential technology solutions
to more increased effective transitions into acquisition programs. ASOA
has also engaged the Under Secretary for Management, Assistant
Secretary for Policy and DHS operational components to support the
establishment of the DHS front end requirements process. As the STIC
process becomes operational, results will be seen in fiscal year 2012
in terms of establishment of operational requirements.
Question 15. What are the benefits of the Other Transaction
Authority? What is the extent to which the use of such authority has
contributed to developing technology in order to meet the needs of the
Department and to promoting the National security of the United States?
Answer. DHS was given Other Transaction (OT) authority so that it
could obtain leading-edge research and development and prototypes that
address significant National security needs from sources that cannot be
accessed through traditional Government procurements. Some companies
and other entities are unwilling or unable to meet all of the
Government's procurement regulations in the time required to deliver a
needed capability or technology.
The authority to enter into OTs for research can be used to help
develop support technologies of significant importance to DHS to meet
the Department's future mission needs. Often these arrangements are
made for programs in which industry and Government share in both the
expenses and the benefits. The focus is on programs where both parties
see a future benefit in the resulting products, such as dual-use
science and technology programs.
The authority to enter into OTs for prototype projects can be used
to carry out prototype projects that are directly relevant to systems
the Department will develop and deploy. These projects could include
prototypes of systems, subsystems or components. Typically they are a
limited run of devices, not a replacement for a major acquisition
program.
The following are 10 Awards pursuant to Other Transaction
Authorities in fiscal year 2010:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Title Type Awarding Office Awardee Fiscal Year 2010 Obligation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lightweight Autonomous Chemical OT for Prototype........... DHS Office of Procurement Sensor Research and $136,000
Identification System (LACIS). Operations. Development (SRD)
Corporation.
Technical Objective............. Develop, field-test, and transition to commercial use a next-generation, hand-portable detection system for
chemical vapor hazards such as Chemical Warfare Agents (CWAs) and high-priority Toxic Industrial Chemicals
(TICs). The detection system will provide responders at an incident scene with an accurate, near real-time
analysis of chemical hazards that may be present. The detection system will meet the needs of first responders in
determining what level of personal protective equipment would be required at an incident scene.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Autonomous Rapid Facility Chemical OT for Prototype........... DHS Office of Procurement Smiths Detection Watford Both parties mutually
Agent Monitor (ARFCAM). Operations. (SDW). agreed that the effort
should be de-scoped and
the funds de-obligated.
Technical Objective............. Develop a ``detect-to-protect'' system that is capable of monitoring facilities for the presence of CWAs and high-
priority TICs. The SDW system will have the capability to continuously and autonomously monitor and detect
dangerous levels of these chemicals. The system's response time will provide sufficient warning to engage
effective response measures that include actively managing air flows, evacuating facilities, and notifying
responders.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Autonomous Rapid Facility Chemical OT for Prototype........... DHS Office of Procurement Bruker Daltonics........... $701,325
Agent Monitor (ARFCAM). Operations.
Technical Objective............. Develop a ``detect-to-protect'' system that is capable of monitoring facilities for the presence of CWAs and high-
priority TICs. The Bruker Daltronics system will have the capability to continuously and autonomously monitor and
detect dangerous levels of these chemicals. The system's response time will provide sufficient warning to engage
effective response measures that include actively managing air flows, evacuating facilities, and notifying
responders.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Autonomous Rapid Facility Chemical OT for Prototype........... DHS Office of Procurement Hamilton Standard.......... $293,013
Agent Monitor (ARFCAM). Operations.
Technical Objective............. Develop a ``detect-to-protect'' system that is capable of monitoring facilities for the presence of CWAs and high-
priority TICs. The Hamilton Standard system will have the capability to continuously and autonomously monitor and
detect dangerous levels of these chemicals. The system's response time will provide sufficient warning to engage
effective [sic]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lightweight Autonomous Chemical OT for Prototype........... DHS Office of Procurement Smiths Detection--Edgewood $2,554,887
Identification System (LACIS). Operations. Inc.
Technical Objective............. Develop, field-test, and transition to commercial use a next-generation, hand-portable detection system for
chemical vapor hazards such as Chemical Warfare Agents (CWAs) and high-priority Toxic Industrial Chemicals
(TICs). The detection system will provide responders at an incident scene with an accurate, near real-time
analysis of chemical hazards that may be present. The detection system will meet the needs of first responders in
determining what level of personal protective equipment would be required at an incident scene.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Instantaneous Bio-Aerosol Detector OT for Prototype........... DHS Office of Procurement Menon & Associates, Inc.... $123,854
System (IBADS). Operations.
Technical Objective............. Will develop biological aerosol detection and sensor systems for monitoring the Nation's critical infrastructure.
These ``detect-to-protect'' systems detect biological agents within minutes to protect critical infrastructure
facilities and their occupants.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Critical Infrastructure Protection OT for Research............ DHS Office of Procurement National Institute for $9,250,000
(CIP). Operations. Hometown Security, Inc
(NIHS).
Technical Objective............. Provides program management support in the areas of research, development, and application of community-based
critical infrastructure protection technology. Under this effort, the NIHS, a Kentucky non-profit corporation is
an enterprise which focuses on research and solutions, research requirements definition, technology transfer, and
commercialization and outreach activities.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resilient Electric Grid (REG)....... OT for Prototype........... DHS Office of Procurement American Superconductor Funds were re-aligned due
Operations. Corporation (AMSC). to changes in project
structure.
Technical Objective............. Under the Homeland Innovative Prototypical Solution (HIPS) Program, the recipient provides REG planning and
demonstration support. In conjunction with Consolidated Edison and Southwire Co, AMSC will focus on developing,
designing, and deploying the world's first fault current limiting high temperature superconductor electric cable
system.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operational Testing and Evaluation OT for Prototype........... DHS Office of Procurement National Safe Skies $2,075,730
of Solutions for Cargo Screening Operations. Alliance (NSSA).
Program Initiatives; Vulnerability
and Mitigation Assessment for
General Aviations Airports; and
Checkpoint Security Equipment Data
Collection.
Technical Objective............. Cargo Screening: The NSSA will be assisting DHS to work through this mitigation risk and danger by assessing and
evaluating new security technologies for use in the air cargo industry to further enhance security beyond the
baseline standards. Vulnerability and Mitigation Assessment for General Aviation (GA) Airports: Under the GA
Assessment, the NSSA is tasked to assist DHS in researching and organizing the scientific, engineering, and
technological resources of the United States in order to leverage existing resources and create technological
tools to help protect the Homeland. Checkpoint Security Equipment (CPSE) Data Collection: DHS Science and
Technology Directorate (S&T) Explosive Division (EXD) develops the technical capabilities to detect, interdict,
and lessen the impacts of non-nuclear explosives used in terrorist attacks against mass transit, civil aviation,
and critical infrastructure. This includes passenger, baggage, and cargo-screening technologies; blast-resistant
aircraft construction; and integrated protective systems for high-value facilities.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Multi-Assay Enabled Wide-Area OT for Prototype........... DHS Office of Procurement Red X Defense (RedX)....... $1,621
Sampling and Testing (MAEWeST)-- Operations.
Phase II.
Technical Objective............. Improves upon RedX's existing optical explosives detection ink into microcapsules applied directly to the sampling
substrate, thus eliminating the need for bulky and mechanically complex spray applications and lighting systems.
This design simplification and reduction in power requirement shall allow for the manufacture of a low-cost, easy-
to-use, rugged pocket-sized device that eliminates the common challenges to widespread deployment of other
explosives detectors.
--------------------------------------------------------------------------------------------------------------------------------------------------------
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