[House Hearing, 113 Congress]
[From the U.S. Government Printing Office]
TSA PROCUREMENT REFORM: SAVING TAXPAYER DOLLARS THROUGH SMARTER
SPENDING PRACTICES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
TRANSPORTATION SECURITY
of the
COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
MAY 8, 2013
__________
Serial No. 113-15
__________
Printed for the use of the Committee on Homeland Security
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.gpo.gov/fdsys/
__________
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COMMITTEE ON HOMELAND SECURITY
Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas Bennie G. Thompson, Mississippi
Peter T. King, New York Loretta Sanchez, California
Mike Rogers, Alabama Sheila Jackson Lee, Texas
Paul C. Broun, Georgia Yvette D. Clarke, New York
Candice S. Miller, Michigan, Vice Brian Higgins, New York
Chair Cedric L. Richmond, Louisiana
Patrick Meehan, Pennsylvania William R. Keating, Massachusetts
Jeff Duncan, South Carolina Ron Barber, Arizona
Tom Marino, Pennsylvania Dondald M. Payne, Jr., New Jersey
Jason Chaffetz, Utah Beto O'Rourke, Texas
Steven M. Palazzo, Mississippi Tulsi Gabbard, Hawaii
Lou Barletta, Pennsylvania Filemon Vela, Texas
Chris Stewart, Utah Steven A. Horsford, Nevada
Richard Hudson, North Carolina Eric Swalwell, California
Steve Daines, Montana
Susan W. Brooks, Indiana
Scott Perry, Pennsylvania
Vacancy
Greg Hill, Chief of Staff
Michael Geffroy, Deputy Chief of Staff/Chief Counsel
Michael S. Twinchek, Chief Clerk
I. Lanier Avant, Minority Staff Director
------
SUBCOMMITTEE ON TRANSPORTATION SECURITY
Richard Hudson, North Carolina, Chairman
Mike Rogers, Alabama Cedric L. Richmond, Louisiana,
Candice S. Miller, Michigan Ranking Member
Lou Barletta, Pennsylvania Sheila Jackson Lee, Texas
Susan W. Brooks, Indiana Eric Swalwell, California
Michael T. McCaul, Texas (ex Bennie G. Thompson, Mississippi
officio) (ex officio)
Amanda Parikh, Staff Director
Dennis Terry, Subcommittee Clerk
C O N T E N T S
----------
Page
Statements
The Honorable Richard Hudson, a Representative in Congress From
the State of North Carolina, and Chairman, Subcommittee on
Transportation Security:
Oral Statement................................................. 1
Prepared Statement............................................. 3
The Honorable Cedric L. Richmond, a Representative in Congress
From the State of Louisiana, and Ranking Member, Subcommittee
on Transportation Security:
Oral Statement................................................. 3
Prepared Statement............................................. 4
The Honorable Bennie G. Thompson, a Representative in Congress
From the State of Mississippi, and Ranking Member, Committee on
Homeland Security:
Oral Statement................................................. 5
Prepared Statement............................................. 6
Witnesses
Statement of Karen Shelton Waters, Assistant Administrator,
Office of Acquisition, Transportation Security Administration,
U.S. Department of Homeland Security:
Oral Statement................................................. 7
Joint Prepared Statement....................................... 9
Mr. Paul Benda, Director, Advanced Research Projects Agency,
Science & Technology Directorate, U.S. Department of Homeland
Security:
Oral Statement................................................. 11
Joint Prepared Statement....................................... 9
Mr. Stephen M. Lord, Director, Forensic Audits and Investigative
Services, U.S. Government Accountability Office:
Oral Statement................................................. 13
Prepared Statement............................................. 14
Mr. Charles K. Edwards, Deputy Inspector General, U.S. Department
of Homeland Security:
Oral Statement................................................. 23
Prepared Statement............................................. 24
Appendix
Questions From Chairman Richard Hudson for Karen Shelton Waters.. 45
Questions From Chairman Richard Hudson for Paul Benda............ 46
TSA PROCUREMENT REFORM: SAVING TAXPAYER DOLLARS THROUGH SMARTER
SPENDING PRACTICES
----------
Wednesday, May 8, 2013
U.S. House of Representatives,
Subcommittee on Transportation Security,
Committee on Homeland Security,
Washington, DC.
The subcommittee met, pursuant to call, at 1:35 p.m., in
Room 311, Cannon House Office Building, Hon. Richard Hudson
[Chairman of the subcommittee] presiding.
Present: Representatives Hudson, Barletta, Brooks,
Richmond, and Thompson.
Mr. Hudson. Our Ranking Member is on the way. I have been
signaled by staff to go ahead and get going. So the Committee
on Homeland Security, Subcommittee on Transportation Security
will come to order. The subcommittee is meeting today to hear
testimony on TSA procurement reform. I now recognize myself for
an opening statement.
First, I would like to thank our witnesses for
participating in this hearing. We sincerely appreciate your
time and look forward to hearing your testimony.
Our purpose today is to examine TSA procurement practices
and identify ways this $7 billion agency can save taxpayer
money and provide better security. Ultimately, these two goals
are not mutually exclusive, but rather are dependent upon one
another. Every dollar that can be saved from wasteful and
duplicative programs, reforming broken processes, and
increasing transparency can eventually be used to better
protect passengers and confront emerging threats.
TSA's Office of Acquisition has the lead on planning,
awarding, and managing the acquisition programs at TSA. Like
other components of the Department of Homeland Security, TSA
categorizes its programs based on life-cycle costs. Any program
with a life-cycle cost over $300 million, such as the passenger
screening program, requires final approval by DHS.
We are pleased to have the head of TSA acquisitions with us
to discuss in detail how her office performs its critical
functions. Specifically, the office's coordination with DHS
procurement officials, partnership with the Science and
Technology Directorate, engagement with the private sector, and
due diligence in ensuring TSA makes wise investments.
While some progress has been made in the last few years,
shortfalls in major technology purposes like advanced imaging
technology, or AIT, make it clear that TSA still has a long way
to go. Now, we recognize that TSA has a very difficult job, and
we want to work with you as we move forward in this process. We
understand that TSA is constantly trying to respond to new
threats, but in some cases the pressures to perform and develop
new technologies can lead to a reactive approach without
sufficient planning. Having a long-term plan that leverages
experts within Government and industry can help prevent
capability gaps.
In 2009, the Government Accountability Office reported that
TSA had not completed a cost-benefit analysis to prioritize and
fund airport screening technology investments such as AIT. That
was nearly 4 years ago, and to my knowledge no such
comprehensive cost-benefit analysis has been completed. In
2012, GAO reported that TSA did not fully follow DHS
acquisition policies when acquiring AIT. That resulted in DHS
approving AIT deployment without full knowledge of TSA's
revised specifications for the technology.
DHS also approved AIT deployment on the basis of
laboratory-based testing results and initial field testing
results, but testing wasn't actually completed until later that
year. TSA procured AIT without DHS' full knowledge of how TSA
would test and evaluate AIT.
While some improvements have been made, we simply cannot
afford to repeat these types of mistakes. I look forward to
receiving an update from GAO today on the status of its
findings and recommendations on AIT and other investments.
Taking a step back from procurement, it is also important
to recognize the role of the DHS Science and Technology
Directorate in testing and evaluation processes for new
technologies. Despite S&T's best efforts to assist TSA, it is
unclear whether S&T actually has enough authority to make
significant difference in whether TSA technology expenditures
succeed or fail. I am eager to hear directly from S&T today on
how the Directorate's role in the technology acquisitions
process can be strengthened and improved.
To the greatest extent possible I believe more transparency
and accountability should be included in the TSA procurement
process. The work of the GAO and DHS Office of Inspector
General are critical in that regard, and we look forward to
their insights here today.
With our witnesses I hope we can identify steps to
strengthen oversight and accountability of the key
transportation security programs. The bottom line is TSA's
procurement decisions impact millions of American taxpayers
whether they fly or not. It is incumbent upon us to make sure
taxpayer dollars are being used effectively and efficiently. I
look forward to discussing ways we can work together to do a
better of job of ensuring the safety of both Americans' ability
to travel and their hard-earned tax dollars.
The Chairman now recognizes the Ranking Minority Member of
the subcommittee, the gentleman from Louisiana, Mr. Richmond
for any statement he may have.
[The statement of Mr. Hudson follows:]
Statement of Chairman Richard Hudson
May 8, 2013
First, I would like to thank our witnesses for participating in
this hearing. We sincerely appreciate your time, and look forward to
your testimony.
Our purpose today is to examine TSA procurement practices and
identify ways this $7 billion agency can save taxpayer money and
provide better security. Ultimately, these two goals are not mutually
exclusive, but rather are dependent upon one another. Every dollar that
can be saved from wasteful and duplicative programs, reforming broken
processes, and increasing transparency can eventually be used to better
protect passengers and confront emerging threats.
TSA's Office of Acquisition has the lead on planning, awarding, and
managing the acquisition program at TSA. Like other components of the
Department of Homeland Security, TSA categorizes its programs based on
life-cycle cost. Any program with a life-cycle cost over $300 million,
such as the passenger-screening program, requires final approval by
DHS.
We are pleased to have the head of TSA Acquisitions with us to
discuss, in detail, how her office performs its critical function.
Specifically, the Office's:
Coordination with DHS procurement officials,
Partnership with the Science and Technology Directorate,
Engagement with the private sector, and
Due diligence in ensuring TSA makes wise investments.
While some progress has been made in the last few years, shortfalls
in major technology purchases, like Advanced Imaging Technology, AIT,
make it clear that TSA still has a long way to go. We recognize that
TSA is constantly trying to respond to new threats, but in some cases
the pressures to perform and deploy new technologies can lead to a
reactive approach without sufficient planning. Having a long-term plan
that leverages experts within Government and industry can help to
prevent capability gaps.
In 2009, the Government Accountability Office reported that TSA had
not completed a cost-benefit analysis to prioritize and fund airport
screening technology investments, such as AIT. That was nearly 4 years
ago, and to my knowledge no such comprehensive cost-benefit analysis
has been completed.
In 2012, GAO reported that TSA did not fully follow DHS acquisition
policies when acquiring AIT. That resulted in DHS approving AIT
deployment without full knowledge of TSA's revised specifications for
the technology. DHS also approved AIT deployment on the basis of
laboratory-based testing results and initial field-testing results, but
testing wasn't actually completed until later that year. TSA procured
AIT without DHS' full knowledge of how TSA would test and evaluate AIT.
While some improvements have been made, we simply cannot afford to
repeat these types of mistakes. I look forward to receiving an update
from GAO today on the status of its findings and recommendations on AIT
and other investments.
Taking a step back from procurement, it's also important to
recognize the role of the DHS Science and Technology Directorate in the
testing and evaluation process for new technologies. Despite S&T's best
efforts to assist TSA, it's unclear whether S&T actually has enough
authority to make a significant difference in whether TSA technology
expenditures succeed or fail. I am eager to hear directly from S&T
today, on how the Directorate's role in the technology acquisitions
process can be strengthened and improved.
To the greatest extent possible, I believe more transparency and
accountability should be included in the TSA procurement process. The
work of the GAO and DHS Office of Inspector General are critical in
that regard, and we look forward to their insights here today. With our
witnesses, I hope we can identify steps to strengthen oversight and
accountability of the key transportation security programs.
The bottom line is TSA's procurement decisions impact millions of
American taxpayers, whether they fly or not. It is incumbent upon us to
make sure taxpayer dollars are being used effectively and efficiently.
I look forward to discussing ways we can work together to do a better
job of ensuring the safety of both Americans' ability to travel and
their hard-earned tax dollars.
With that, I now recognize the Ranking Member of the subcommittee,
the gentleman from Louisiana, Mr. Richmond, for his opening statement.
Mr. Richmond. Thank you, Mr. Chairman.
Good afternoon to the witnesses, and thank you all for
being here today to testify. I appreciate your work to advance
TSA's procurement system and their willingness to have an open
dialogue on the contracting challenges facing TSA.
After 9/11 TSA was established to implement risk-based
security policies that address vulnerabilities and threats to
our transportation system. To carry out its mandate TSA must
not only procure the right goods and services from reliable
vendors, but it must have personnel on hand who have the
knowledge and training to adequately review purchases.
Unfortunately, TSA has not always purchased the right goods
or had the technical expertise to evaluate potential purchases.
A prime example of the failure to link technical expertise with
successful contracting outcomes was the purchases by TSA of
puffer machines. The Department spent about $36 million
developing, procuring, and maintaining machines that were
supposed to detect explosives. While they worked in the lab
they failed in the real world. After the machines failed, TSA
had to spend nearly $1 million to remove them from airports.
The puffer machines have become a legendary example of a broken
process.
Since the puffer machines incident Congress required TSA to
change its procurement system. When first established, TSA used
a Department of Transportation procurement process. However,
this process prohibited greater opportunities for small
businesses, diluted transparency, and allowed for a lack of
accountability across the acquisition process. Congress
required TSA to operate under the FAR system commonly used in
most Federal Government agencies. Under the FAR, TSA was
required to contract with small and disadvantaged businesses.
In fiscal year 2012 TSA spent $2.39 billion contracting for
goods and services. I look forward to hearing from TSA about
why it has only been able to spend about 16 percent of its
contracting dollars with small and disadvantaged businesses,
well short of its goal of 23 percent. This is especially
concerning when TSA has one of the lowest small business
contracting goals in all of DHS.
Today we also need to evaluate the progress TSA has made in
training its acquisition workforce to make procurement more
efficient.
On a final point, I look forward to hearing from the
Inspector General about the work he has done on the
improvements made and the challenges that remain in the TSA
acquisition process.
Again, I want to thank all of the witnesses who are here
today, and I look forward to hearing your testimony.
Mr. Chairman, thank you, and I yield back.
[The statement of Mr. Richmond follows:]
Statement of Ranking Member Cedric L. Richmond
May 8, 2013
I want to first thank the witnesses here today. I appreciate their
work to advance TSA's procurement system and their willingness to have
an open dialogue on the contacting challenges facing TSA.
After 9/11, TSA was established to implement risk-based security
policies that address vulnerabilities and threats to our transportation
system.
To carry out its mandate, TSA must not only procure the right goods
and services from reliable vendors, but it must have personnel on hand
who have the knowledge and training to adequately review purchases.
Unfortunately, TSA has not always purchased the right goods or had
the technical expertise to evaluate potential purchases.
A prime example of the failure to link technical expertise with
successful contracting outcomes was the purchase by TSA of ``puffer
machines.'' The Department spent about $36 million dollars developing,
procuring, and maintaining machines that were supposed to detect
explosives.
While they worked in the lab, they failed in the ``real world.''
After the machines failed, TSA had to spend nearly $1 million to remove
them from airports. The puffer machines have become a legendary example
of a broken process. Since the ``puffer machines'' incident, Congress
required TSA to change its procurement system.
When first established, TSA used a Department of Transportation
procurement process. However, this process prohibited greater
opportunities for small businesses, diluted transparency, and allowed
for a lack of accountability across the acquisition process.
Congress required TSA to operate under the FAR--a system commonly
used in most Federal Government agencies. Under the FAR, TSA was
required to contract with small and disadvantaged businesses. In fiscal
year 2012, TSA spent $2.39 billion dollars contracting for goods and
services.
I look forward to hearing from TSA about why it was only able to
spend about 16% of its contracting dollars with small and disadvantaged
businesses--well short of its goal of 23%.
This is especially concerning when TSA has one of the lowest small
business contracting goals in all of DHS.
Today, we also need to evaluate the progress TSA has made in
training its acquisition workforce to make procurement more efficient.
On a final point, I look forward to hearing from the Inspector
General about the work he has done on the improvements made and
challenges that remain in the TSA acquisitions process.
Mr. Hudson. I thank the gentleman.
The Chairman now recognizes the Ranking Minority Member of
the full committee, the gentleman from Mississippi, Mr.
Thompson, for any statement he may have.
Mr. Thompson. Thank you, Mr. Chairman. I would also like to
thank the witnesses for appearing today.
Last year TSA spent $2.39 billion on goods and services. As
a Member who has conducted extensive oversight of TSA's
procurement practices, as both Chairman and Ranking Member of
the full committee, I appreciate the Chairman's desire to take
a close look at how TSA spends taxpayers' dollars. Upon its
creation in 2001 TSA was provided wide-ranging spending
flexibility in the form of an exemption from the Federal
Acquisition Regulations, commonly referred to as the FAR. TSA
was also exempt from major procurement laws such as Competition
and Contracting Act and the Small Business Act.
In 2008 Congress acted to end TSA's exemption from the FAR,
more closely aligning TSA's procurement authority with that of
the rest of the Federal Government. This was done in an effort
to level the playing field for small businesses and prevent the
mismanagement and waste of taxpayer dollars. Unfortunately, 5
years later, and despite being bound by the FAR, challenges
remain with TSA's procurement activities. As evidenced by the
on-going removal of $40 million worth of recently purchased AIT
machines from the field due to privacy and performance
concerns, TSA continues to spend taxpayer dollars without
conducting due diligence.
With the budgetary constraints we face today it is critical
that every TSA dollar, every dollar TSA spends, goes toward
technologies and service that work and make our transportation
system more secure. I am interested in hearing how TSA is
working with small businesses to enhance their opportunities to
contract with the agency. While I appreciate that TSA has
established a Small and Disadvantaged Business Office, I am
concerned that the agency failed to reach its goal for
contracting with small businesses in 2012. I look forward to
hearing Ms. Shelton Waters plan for ensuring this shortfall is
not repeated in 2013. Small businesses serve as both critical
job creators and innovators in our society, and TSA should make
certain that it takes full advantage of opportunities to do
business with them.
During our discussion today, Mr. Chairman, I hope the
subcommittee remains mindful of the taxpayer dollars TSA spends
on services, as well as goods. Based on data provided by TSA
over the past 5 years, it has cost taxpayers an additional $75
million to maintain contract screeners in the Screening
Partnership Program over what it would have cost to provide
security with TSOs. Whatever your thoughts on the use of
private versus Federal screeners, we cannot afford to pay a
premium for comparable services.
With that, Mr. Chairman, I yield back the balance of my
time.
[The statement of Mr. Thompson follows:]
Statement of Ranking Member Bennie G. Thompson
May 8, 2013
Last year, TSA spent $2.39 billion on goods and services. As a
Member who has conducted extensive oversight of TSA's procurement
practices as both Chairman and Ranking Member of the full committee, I
appreciate the Chairman's desire to take a close look at how TSA spends
taxpayer dollars.
Upon its creation in 2001, TSA was provided wide-ranging spending
flexibility in the form of an exemption from the Federal Acquisition
Regulations, commonly referred to as the FAR.
TSA was also exempt from major procurement laws such as the
Competition in Contracting Act and the Small Business Act.
In 2008, Congress acted to end TSA's exemption from the FAR, more
closely aligning TSA's procurement authority with that of the rest of
the Federal Government.
This was done in an effort to level the playing field for small
businesses and prevent the mismanagement and waste of taxpayer dollars.
Unfortunately, 5 years later, and despite being bound by the FAR,
challenges remain with TSA's procurement activities.
As evidenced by the on-going removal of $40 million worth of
recently purchased AIT machines from the field due to privacy and
performance concerns, TSA continues to spend taxpayer dollars without
conducting due diligence.
With the budgetary constraints we face today, it is critical that
every dollar TSA spends goes toward technologies and services that work
and make our transportation systems more secure.
I am also interested in hearing how TSA is working with small
businesses to enhance their opportunities to contract with the agency.
While I appreciate that TSA has established a Small and
Disadvantaged Business Office, I am concerned that the agency failed to
reach its goal for contracting with small businesses in 2012.
I look forward to hearing Ms. Shelton-Waters plan for ensuring this
shortfall is not repeated in 2013.
Small businesses serve as both critical job creators and innovators
in our society and TSA should make certain that it takes full advantage
of opportunities to do business with them.
During our discussion today, Mr. Chairman, I hope the subcommittee
remains mindful of the taxpayer dollars TSA spends on services as well
as goods.
Based on data provided by TSA, over the past 5 years, it has cost
taxpayers an additional $75 million to maintain contract screeners in
the Screening Partnership Program over what it would have cost to
provide security with TSOs.
Whatever your thoughts on the use of private versus Federal
screeners, we cannot afford to pay a premium for comparable services.
Mr. Hudson. Thank you, Mr. Thompson.
Other Members of the committee are reminded that opening
statements may be submitted for the record.
We are pleased to have a distinguished panel of witnesses
before us today. First, we have Ms. Karen Shelton Waters, who
is the Transportation Security Administration's assistant
administrator for the Office of Acquisition. Ms. Waters is
responsible for the development of the contracting workforce
and acquisition policy through the review of contract awards,
investments, interagency agreements, and other transactions.
Ms. Waters joined TSA in 2009. Prior to her role as assistant
administrator, she served as deputy assistant administrator,
chief administrative officer, with the Office of Finance and
Administration where she provided oversight and management of
approximately $300 million in contracts.
Mr. Paul Benda is the Director of the Homeland Security
Advanced Research Projects Agency at the Department of Homeland
Security's Science and Technology Directorate. Mr. Benda is
responsible for directing cutting-edge research being done by
teams of National experts that develop, test, and evaluate new
Homeland Security technologies and capabilities. These
initiatives include the Border and Maritime Security Division,
the Chemical and Biological Defense Division, the Cybersecurity
Division, the Explosives Division, and the Resilient Systems
Division.
Mr. Stephen Lord is the Director of the Forensic Audits and
Investigative Services team with the Government Accountability
Office, GAO. Mr. Lord oversees a team responsible for high-
quality forensic audits and investigations of fraud, waste, and
abuse. Prior to this position, Mr. Lord served as the director
of homeland security and justice issues at GAO, and was
responsible for overseeing and directing the GAO's various
engagements in the issues related to aviation and surface
transportation.
Finally, Mr. Charles Edwards is the deputy inspector
general of the Department of Homeland Security. Mr. Edwards is
the head of the Office of Inspector General, a role he first
attained when named acting inspector general in February 2011.
Mr. Edwards has over 20 years of experience in the Federal
Government and has held leadership positions at several Federal
agencies, including TSA, the United States Postal Service's
Office of Inspector General, and the United States Postal
Service.
Thank you all for being here. The Chairman recognizes Ms.
Waters to testify.
STATEMENT OF KAREN SHELTON WATERS, ASSISTANT ADMINISTRATOR,
OFFICE OF ACQUISITION, TRANSPORTATION SECURITY ADMINISTRATION,
U.S. DEPARTMENT OF HOMELAND SECURITY
Ms. Waters. Good afternoon, Chairman Hudson, Ranking Member
Richmond, and distinguished Members of the subcommittee. Thank
you for the opportunity to testify before you today.
TSA's Office of Acquisition, or OA, plays a critical role
in supporting TSA's counterterrorism efforts as the agency
works to expand and improve risk-based, intelligence-driven
security initiatives across all modes of transportation. OA is
responsible for performing three critical functions for the
agency. No. 1, manage programs effectively. No. 2, establish
value-added business arrangements. No. 3, ensure contractor
performance and delivery.
The scope of our work is significant. In the first 2
quarters of fiscal year 2013, we reported 1,776 contract
actions. The total obligated dollars associated with these
actions exceeded $681 million.
Spending U.S. taxpayer dollars to enhance transportation
security demands transparency and accountability. OA is
committed to developing, implementing, and reporting
acquisition metrics that support TSA's mission, as well as
testing emerging technology to ensure we are deploying the best
available technology. This requires close adherence to the
acquisition review process, as well as strong coordination with
DHS director operational test and evaluation, or DOT&E. Working
with DOT&E, TSA has developed a robust evaluation capability
for screening equipment that encompasses the full range of
systems engineering life cycle. Additionally, TSA is developing
a test and evaluation guide that defines the process for
vendors, and we are exploring the use of third parties to
conduct vendor readiness testing to mature systems. Our team
also works with DHS Science and Technology Directorate, or S&T,
for improved market research and analysis.
One example of the role OA plays in supporting TSA's
transformation to a risk-based, intelligence-driven security
solution is the release earlier this year of a request for
information seeking input from the contractor community
concerning the possible expansion of expedited aviation
physical screening initiatives.
TSA's goal in conducting this market research is to expand
TSA PreCheck participation by determining if certain pre-
screening processes conducted by non-Government entities could
enhance aviation security. Specifically, we sought white papers
that successfully demonstrate sound, well-reasoned concepts
that if implemented would identify known travelers pre-screened
to a high degree of confidence.
TSA conducted two well-attended industry days to discuss
this with stakeholders in January and February of this year. We
also worked with the outside vendors to determine security
equipment testing capabilities, hoping to use this data to
assist original equipment manufacturers, or OEMs, in developing
more mature systems prior to entering the formal test and
evaluation phase at TSA. This market research for a third-party
testing concept would allow OEMs the opportunity to assess
their systems against TSA requirements, enhance and mature
their technology readiness, and subsequently reduce the time
required to succeed through each phase of testing at TSA.
We believe that supporting and identifying third-party
testing capabilities and by providing the available TSA
requirements, OEMs will submit more mature systems to TSA for
qualification testing, allowing TSA to meet its acquisition
goals with a more streamlined process.
Partnerships and industry engagement are important drivers
of innovation at TSA. One example of this is our partnership
with the Washington Homeland Security Roundtable, a nonprofit
group comprised of companies that actively engage in the
homeland security area in policy practices and procurements.
Collaborating with them via TSA's Senior Executive Industry
Forum provides a way to engage in meaningful dialogue between
senior industry and TSA leadership concerning securing
innovation. Earlier this year TSA and the WHSR also announced
the creation of industry engagement groups and a Contracting
Policy Focus Group, both of which are designed to strengthen
TSA's ability to provide the most effective and efficient
security. Engaging with industry through such efforts helps TSA
to achieve this fundamental goal.
Finally, strategic sourcing and consolidated purchasing
have become very important tools at DHS for unifying the
acquisition centers at its eight components and also for
integrating DHS activities and technology into a more
comprehensive single enterprise.
Our Nation continues to face evolving threats to our
transportation system. Acquisition management operations and
policy play a crucial role in helping TSA implement an
intelligence-driven, risk-based approach to security across all
transportation modes.
Thank you for the opportunity to appear before you today. I
look forward to answering your questions.
[The joint prepared statement of Ms. Waters and Mr. Benda
follows:]
Joint Prepared Statement of Karen Shelton Waters and Paul Benda
May 8, 2013
Good afternoon Chairman Hudson, Ranking Member Richmond, and
distinguished Members of the subcommittee. Thank you for the
opportunity to testify today about the Transportation Security
Administration's (TSA) acquisition and procurement policies and
practices.
The TSA Office of Acquisition's (OA) mission is to enhance TSA's
capabilities to protect the Nation's transportation systems by
providing effective and efficient acquisition and procurement services.
OA plays a critical role in supporting TSA's counterterrorism efforts
as the agency works to expand and improve our risk-based, intelligence-
driven security approach across all modes of transportation. We do this
by managing programs through all phases of the Acquisition Life Cycle
to ensure that they are planned and executed properly to accomplish
outcomes on time and within budget. OA also develops procurement
instruments that use business strategies that maximize value for the
agency. In addition, we provide contract oversight while managing our
vendor relationships to ensure that TSA gets the intended return on
investment for procurement dollars spent.
To fulfill its security responsibilities for deploying and
operating state-of-the-art security technology at over 450 airports
across the Nation, TSA must be able to rapidly deploy technology to
respond to changing threat information, or to have equipment ready to
deploy when airport facilities are changed to accommodate the
equipment. In the first two quarters of fiscal year 2013, TSA executed
a total of 1,776 contract actions exceeding $681 million in support of
all TSA contract requirements. To ensure we continue to act as
responsible stewards of taxpayer dollars, we are developing,
implementing, and reporting acquisition metrics that coincide with
TSA's mission and vision as well as fully and adequately testing
emerging technologies to ensure we are deploying and relying upon the
best technologies available to protect transportation systems and
travelers.
collaboration within the department of homeland security (dhs)
TSA completes acquisition and procurement measures in close
coordination with DHS acquisition-related organizations. This includes
a robust test and evaluation capability that is utilized on screening
equipment and encompasses the range of the systems' engineering life
cycle from developmental to operational test and evaluation (T&E). The
TSA T&E program, which is conducted by the Operational Test Agent and
approved by DHS through appropriate Test and Evaluation Master Plans,
provides key insights into capabilities and limitations of all tested
systems and technologies. Additionally, TSA is developing a test and
evaluation guide that defines the process for vendors and explores the
use of third parties to conduct vendor readiness testing to mature
systems. TSA is working with the DHS Science and Technology Directorate
(S&T) to conduct market research and analysis in this area and we
anticipate that the guide will be ready for release in the summer.
DHS uses strategic sourcing initiatives to leverage the purchasing
power of the entire Department for a variety of items including
screening technology. While TSA continues to utilize existing DHS
strategic sourcing vehicles, we have also been designated the Executive
Agent/Contracting Activity for security screening equipment that can be
utilized by other DHS components. By consolidating the Department's
spending into a single vehicle, DHS expects savings in terms of
acquisition process as well as in actual procurement costs.
testing innovation
TSA believes that by its supporting and identifying third-party
testing capabilities and by providing the Original Equipment
Manufacturers (OEMs) and potential testers, such as universities and
laboratories, with the applicable TSA requirements and testing
documentation specific to the systems under development, the OEMs will
submit more mature systems to TSA for qualification testing. In
December 2012, TSA issued a Request for Information (RFI) to solicit
input from security equipment testing entities regarding their
capabilities to perform developmental test and evaluation of
Transportation Security Equipment (TSE) and to provide this information
to OEMs, vendors that originally manufactured the equipment. In an
effort to expedite the testing, acquisition, and deployment of
qualified systems, TSA promotes the establishment of preliminary system
development gateways by identifying capable third-party testing
facilities. The purpose of creating these gateways is to assist OEMs in
developing more mature systems prior to entering the formal TSA test
and evaluation process. This allows OEMs to assess their systems
against TSA requirements, enhance and mature their technology
readiness, and subsequently reduce the time required to proceed through
each phase of TSA testing.
industry engagement
Partnerships and industry engagement are important drivers of
innovation at TSA, and OA plays an important role in supporting TSA's
efforts to work with the private sector to develop and deploy
innovative and effective screening capabilities across the Nation's
transportation systems.
In December 2011, TSA executed a Memorandum of Understanding (MOU)
with the Washington Homeland Security Roundtable (WHSR), a non-profit
group comprised of companies that are actively engaged in homeland
security issues. This MOU established a framework for an on-going
dialogue between TSA representatives and WHSR members concerning
security innovations. In February 2013, TSA and WHSR announced the
creation of the Industry Engagement Group, which provides private-
sector companies and organizations with opportunities to work with TSA
at an enterprise level. This group will not discuss specific
acquisitions or TSA programs, but rather focuses on identifying methods
and processes by which TSA can effectively engage with industry on
matters related to acquisition. The WHSR has also established a TSA
Contracting/Acquisition Policy Focus Group. This group gathers
participants' input on policies, regulations, and current practices to
drive the content and costs of the contracting process so as to
increase effectiveness and efficiency.
Additional industry engagement activities include TSA participation
in monthly discussions with the Security Manufacturers Coalition
regarding future programmatic direction, challenges, and interests.
This group was created by the security technology manufacturers
themselves, and the members must be active vendors of DHS security
technology. TSA also interacts with the Airport Consultants Council
(ACC), which is involved in the development and operations of airports
and related facilities. TSA participates in an annual Technology Day
with ACC and receives input from the organization regarding TSA
processes and planning.
TSA also recognizes that small businesses are of vital importance
to the economic strength of the country. Each year, TSA hosts the Small
Business Fair, which provides an opportunity for a range of vendors to
discuss their products while also learning more about TSA's acquisition
requirements. We also contribute to vendor outreach events across the
country through field office participation. In fiscal year 2012, TSA
obligated $289 million to small businesses in over 2,000 contract
actions; additionally, TSA exceeded its Small Disadvantaged and Service
Disabled Veteran-Owned Small Business Goals.
conclusion
Acquisition operations and policy play a crucial role in helping
TSA and DHS S&T implement an intelligence-driven, risk-based approach
to security across all transportation modes while implementing
operational and management efficiencies across the organization. As we
strive to continue strengthening transportation security and improving,
whenever possible, the overall travel experience for all Americans, we
must always remember that our success is defined by our people. Whether
it is for business or for pleasure, the freedom to travel from place to
place is fundamental to our way of life, and to do so securely is a
goal to which everyone at TSA and DHS S&T is fully committed. Thank you
for the opportunity to appear before you today and I look forward to
answering your questions.
Mr. Barletta [presiding]. Thank you, Ms. Waters.
The Chairman recognizes Mr. Benda to testify.
STATEMENT OF PAUL BENDA, DIRECTOR, ADVANCED RESEARCH PROJECTS
AGENCY, SCIENCE & TECHNOLOGY DIRECTORATE, U.S. DEPARTMENT OF
HOMELAND SECURITY
Mr. Benda. Good afternoon, Mr. Barletta, Ranking Member
Richmond, and Mr. Thompson. I appreciate the opportunity to
come before you today to discuss the Science and Technology
Directorate's activities in support of TSA. If I could have
your forbearance for a couple of minutes I would like to say a
few brief introductory words for S&T. S&T supports DHS
components and first responders across the homeland security
enterprise. We focus on technology and knowledge development
that will make their operations more effective and efficient,
we build partnerships across the interagency to ensure we
leverage everyone else's R&D, we basically beg, borrow, and
steal technology and capabilities where we can find it to
leverage it against homeland security challenges, we provide
acquisition support to DHS components by being the technical
and scientific core of the Department.
But I would like to start our conversation here today with
a question, which is: Why invest in S&T? In this era of austere
budgets, where we have trouble fully funding our front-line
operations, why should we set money aside for S&T? I think
there is two reasons behind that. One is an adaptive adversary.
As we can see on aviation security, we have moved from the
Lockerbie bombings, which was explosives in checked bags, to
armed assaults on 9/11, to explosives in printer toner
cartridges.
Another is the inexorable march of commerce. Currently, TSA
screens 2 million domestic air travel passengers a day. They
expect a growth of 4 to 5 percent per year of travel, which
means in 5 years you will have 2.5 million passengers
transiting through our airports, an increase of 500,000 people.
With the budgets that we have today and expectations that
staffing levels will remain flat, how do we maintain the
throughput and the security that is required to keep commerce
and travel safe? We believe that technology can serve that
role.
So the challenge we have is, in this budget environment how
can we do that? One of the ways we do that is trying to
leverage the investments made by the Department of Defense, or
DOD. We are positioning ourselves as the transition partner for
DOD's R&D and their technologies. We have examples where we
have leveraged a $25 million program from DARPA and actually
transitioned that capability into an operational capability for
an explosive detection system. We have partnered with SOCOM in
developing a classified capability for the U.S. Secret Service
that has actually reduced the cost of that capability
development by over 80 percent, saving around $8 million.
We work closely with the intel community and CIA's In-Q-
Tel, which is a strategic investment firm. For every dollar S&T
invests, we get $3 matching from the intelligence community and
$9 from the private investment community. It is this leveraging
of others' investments that S&T brings to TSA's problems. But
the challenge we have is making sure that the investments that
we make at S&T address TSA's key priorities. To solve that we
are working to develop R&D strategies. Basically we have
conversations with senior leadership of the components at the
assistant administrator, assistant secretary level. We ask them
to outline what are their key priorities and key challenges. We
document that, and in fact we are co-writing that R&D strategy
as we speak with the chief technical officer at TSA, Assistant
Administrator Sanders, and we will co-sign that strategy. Once
that is complete, we map our S&T investments against that
strategy so we can ensure every dollar spent on S&T is on a
need that the components have.
But the key isn't only making sure our investments align
against TSA's needs, but give an industry insight into where we
are going. We think it is essential that we provide a road map
to industry on the challenges the components face and the S&T
investments we are making to meet those challenges. So every
R&D strategy will be briefed to industry. In fact, we briefed
our first webinar, which was a briefing on R&D strategies last
week, which was received by industry as an unmitigated success.
We plan to do that for all of our R&D strategies.
So this partnership with S&T and TSA has never been
stronger and has begun to bear fruit. In fact, TSA has
designated HSARPA as their lead for developmental test and
evaluation for explosive detection devices. This, combined with
our statutory role in operational test and evaluation, should
create a seamless process for industry and TSA when it comes to
testing.
We have worked with TSA where they now force vendors to
provide the raw data from their explosive detection machines,
basically breaking up the proprietary stranglehold that those
vendors had on that data. This is really important because it
allows to us spur innovation and let small businesses have
access to those algorithms. Whereas before had you a single
vendor that provided a single answer, we can now invite small
businesses to see if they can come up with better ways to
manipulate that data to get a better answer out.
But perhaps most exciting are the advances we see in new
technologies coming down the pike. Working with prestigious
universities across the country, we have actually developed the
next-generation AIT machine. We hope to have a prototype within
the next 3 years, but basically instead of walking into an AIT
and getting a single picture, we hope to have a walk-through
AIT machine. We are going to couple that with investment that
industry has made on a new type of X-ray technology that will
not only get a better picture, but actually identify what is in
the bag.
So the vision is within 3 years you will be able to walk up
to a checkpoint, drop your bag on a conveyor belt, walk through
an AIT, and pick up your bag. You will not have to take your
shoes off, your belt off, or empty your pockets. We believe
within 3 years we will have that prototype.
This is only possible because of the strong partnership
that S&T and TSA has made. We believe that this unprecedented
partnership that has been built will vastly improve the
traveling public's experience and change the face of aviation
security as we know it. Thank you for your time and attention,
and I will be happy to answer any questions you have.
Mr. Barletta. Thank you, Mr. Benda.
The Chairman recognizes Mr. Lord to testify.
STATEMENT OF STEPHEN M. LORD, DIRECTOR, FORENSIC AUDITS AND
INVESTIGATIVE SERVICES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Lord. Thank you, Representative Barletta, Ranking
Members Richmond and Thompson. I am really happy to be here
today to discuss the large body of work we completed on TSA's
acquisitions and related technologies. This is really an
important issue as these systems represent billions of dollars
of life-cycle costs. I think if you look at our work very
broadly and not get into the weeds of any particular port, you
will see that we have identified three key challenges across
our work.
The first underscores the importance of setting clear
requirements at the start of a program. The second issue is the
importance of testing technology before you field it. As
Representative Richmond noted, TSA has had some unfortunate
examples in the past. Hopefully, those have all been
successfully addressed. The third issue is delivering systems
on time and within budget and having a good documentary trail
to show that has actually taken place.
In terms of setting requirements, we issued a January 2012
report on the advanced imaging technology system, and we noted
in the report that the technology met evolving requirements but
not the original requirements that were approved at the start
of the acquisition. We also looked at the way these changes
were documented and approved in the Department and we didn't
really see a clear rationale or reasons for why these changes
took place. It just underscores again the importance of having
a good set of foundation documents to lay all this out.
As part of this review we also recommended that TSA develop
a road map to keep senior management better-informed about
where the technology was going and what success they were
having in meeting any new requirements or milestones.
In terms of the second key issue we have identified--
testing--our work has clearly shown the importance of testing
technology before fielding it. Otherwise sometimes you
encounter unsuccessful acquisition outcomes. For example, we
recently issued a canine report which shows that TSA deployed,
ramped up their canine program while they were in the middle of
assessing their operational effectiveness. So, again, you can
do that, but it is considered a higher-risk strategy. We
thought it was really important that they do this for this new
type of canine, they are called passenger screening canines.
They attempt to detect explosives on a passenger moving through
the airport terminal in contrast to conventional canines which
tend to be used in other areas. Hopefully this testing is going
to allow TSA to determine two important things: Whether the
passenger screening canines work better than conventional
canines, whether they are more effective, and where in the
airport they work best, in the screening area, in the sterile
area, or in the public lobby area?
Our work has also underscored the importance of developing
good baseline measures of cost, schedule, and performance at
the start of the program, not while the program is already
underway or if you have already spent precious taxpayer
resources. The good news is, in response to the challenges we
have identified in our past report, TSA has taken several
important actions to rectify these issues. More broadly at the
Department, the Department of Homeland Security recognizes they
have had some weaknesses in this area in adhering to their
governance structure and are taking some additional steps and
developing some new tools to ensure more successful acquisition
outcomes.
But if you looked at the Department more broadly, it is
clear that significant work still remains. DHS major
acquisitions continue, they cost more than expected, take
longer to deploy than planned, and deliver less capability than
promised. For example, we did a recent report in which we
noticed that 16 of 42 DHS acquisition programs experienced cost
growth of 166 percent over 3 years, and that is a pretty big
jump.
In closing, our past work has underscored the importance of
clearly defining and consistently implementing acquisition
policies and procedures, and having a capable workforce and
most importantly a supportive management culture to allow these
procedures to be adhered to and the acquisitions to move
forward. Doing so will help ensure a good outcome and help
ensure precious taxpayer dollars are spent wisely.
Mr. Chairman, this concludes my statement, and I look
forward to your questions.
[The prepared statement of Mr. Lord follows:]
Prepared Statement of Stephen M. Lord
May 8, 2013
gao highlights
Highlights of GAO-13-469T, a testimony before the Subcommittee on
Transportation Security, Committee on Homeland Security, House of
Representatives.
Why GAO Did This Study
TSA acquisition programs represent billions of dollars in life-
cycle costs and support a range of aviation security programs,
including technologies used to screen passengers and checked baggage.
Within DHS, TSA is responsible for establishing requirements for
testing and deploying transportation system technologies. Since 2010,
GAO has reported that DHS and TSA faced challenges in managing
acquisition efforts, including deploying technologies that did not meet
requirements and were not appropriately tested and evaluated.
As requested, this testimony discusses: (1) The extent to which TSA
addressed challenges relating to developing and meeting program
requirements, testing new screening technologies, and delivering
capabilities within cost and schedule estimates for selected programs,
and (2) DHS efforts to strengthen oversight of component acquisition
processes. This testimony is based on GAO products issued from January
2010 through January 2013, including selected updates conducted in
March 2013 on TSA's efforts to implement GAO's prior recommendations
and preliminary observations from on-going work. To conduct the updates
and on-going work, GAO analyzed documents, such as the AIT road map,
and interviewed TSA officials.
What GAO Recommends
GAO has made recommendations to DHS and TSA in prior reports to
help strengthen its acquisition processes and oversight. DHS and TSA
generally concurred and are taking actions to address them.
homeland security.--dhs and tsa continue to face challenges developing
and acquiring screening technologies
What GAO Found
The Transportation Security Administration (TSA) has taken and is
taking steps to address challenges related to developing, testing, and
delivering screening technologies for selected aviation security
programs, but challenges remain. For example, in January 2012, GAO
reported that TSA faced challenges developing and meeting key
performance requirements for the acquisition of advanced imaging
technology (AIT)--i.e., full-body scanners. Specifically, GAO found
that TSA did not fully follow Department of Homeland Security (DHS)
acquisition policies when acquiring AIT, which resulted in DHS
approving Nation-wide AIT deployment without full knowledge of TSA's
revised specifications. DHS required TSA to notify DHS's Acquisition
Review Board (ARB) if AIT could not meet any of TSA's five key
performance parameters or if TSA changed a key performance parameter
during testing. However, GAO found that the ARB approved TSA for full-
scale production without reviewing the changed parameter. DHS officials
said that the ARB should have formally reviewed this change to ensure
that TSA did not change it arbitrarily. GAO recommended that TSA
develop a road map that outlines vendors' progress in meeting all key
performance parameters. DHS agreed, and developed a road map to address
the recommendation, but faces challenges implementing it--e.g., due to
vendor delays. Additionally, in January 2013, GAO reported that TSA
faced challenges related to testing and deploying passenger screening
canine teams. Specifically, GAO concluded that TSA began deploying
these canine teams to airport terminals in April 2011 prior to
determining the canine teams' operational effectiveness. In June 2012,
DHS and TSA began conducting operational assessments to help
demonstrate canine teams' effectiveness. Also, TSA began deploying
teams before it had completed an assessment to determine where within
the airport the canine teams would be most effectively utilized. GAO
recommended that on the basis of DHS assessment results, TSA expand and
complete testing to assess the effectiveness of canine teams in areas
of the airport deemed appropriate. DHS agreed and officials said that
as of April 2013, TSA had concluded testing in collaboration with DHS
of canine teams in airport sterile areas--in general, areas of an
airport for which access is controlled through screening of persons and
property--and is testing teams on its own in airport sterile and public
areas.
DHS has some efforts under way to strengthen its oversight of
component investment and acquisition processes, but additional actions
are needed. In September 2012, GAO reported that while DHS had
initiated efforts to address the Department's acquisition management
challenges, most of DHS's major acquisition programs continue to cost
more than expected, take longer to deploy than planned, or deliver less
capability than promised. GAO identified 42 DHS programs that
experienced cost growth, schedule slips, or both, with 16 of the
programs' costs increasing from a total of $19.7 billion in 2008 to
$52.2 billion in 2011--an aggregate increase of 166 percent. GAO
concluded that DHS recognized the need to implement its acquisition
policy more consistently, but that significant work remained. GAO
recommended that DHS modify acquisition policy to better reflect key
program and portfolio management practices and ensure acquisition
programs fully comply with DHS acquisition policy. DHS agreed, and in
September 2012 officials stated that it was in the process of revising
its policy to more fully reflect key program management practices.
Chairman Hudson, Ranking Member Richmond, and Members of the
committee: I am pleased to be here today to discuss our work examining
the Transportation Security Administration's (TSA) efforts to develop
and acquire new technologies to address homeland security needs. Within
the Department of Homeland Security (DHS), TSA is responsible for
securing the Nation's transportation systems. TSA's acquisition
programs represent billions of dollars in life-cycle costs and support
a wide range of aviation security missions and investments, including
technologies used to screen passengers, checked baggage, and air cargo,
among others. For example, technologies used to screen passengers
include advanced imaging technology (AIT), commonly referred to as
full-body scanners, that screen passengers for metallic and nonmetallic
threats such as weapons, explosives, and other objects concealed under
layers of clothing, and passenger screening canines trained to detect
explosives being carried or worn by passengers.\1\ In addition,
technologies used to screen checked baggage include explosives
detection systems (EDS), which use X-rays with computer-aided imaging
to automatically measure the physical characteristics of objects in
baggage.\2\ Consistent with its responsibility, TSA establishes
requirements for testing and deploying these technologies to, for
example, screen airline passengers and their property.
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\1\ Although canines are not considered a technology, they have
been included in this testimony as one of the layers TSA relies on to
screen passengers, baggage, and air cargo for explosives odor.
\2\ An EDS automatically triggers an alarm when objects that
exhibit the physical characteristics of explosives are detected.
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Since 2010, we have reported that DHS and TSA have experienced
challenges in managing their multi-billion-dollar acquisition efforts,
including implementing technologies that did not meet intended
requirements and were not appropriately tested and evaluated, and not
consistently completing analyses of costs and benefits before
technologies were deployed for operational use. As requested, my
testimony provides an update on that work, including: (1) The extent to
which TSA has addressed challenges relating to developing and meeting
program requirements, testing new screening technologies, and
delivering capabilities within agreed-upon cost and schedule estimates
for select programs, and (2) DHS efforts to strengthen its oversight of
component investment and acquisition processes.
This statement is based on GAO reports and testimonies issued from
January 2010 through January 2013, including selected updates conducted
in March 2013 on TSA's efforts to implement our prior
recommendations.\3\ Specifically, to conduct these updates, we obtained
information from TSA on the status of the current EDS acquisition and
upgrades to existing systems, as well as on testing of passenger
screening canine teams. Our previous reports incorporated information
we obtained and analyzed from TSA and DHS officials on efforts to
manage, test, acquire, deploy, and oversee various technology programs,
including program schedules, planning documents, testing reports, and
other acquisition documentation. Our previously published products
contain additional details on the scope and methodology of our reports.
---------------------------------------------------------------------------
\3\ See the related GAO products list at the end of this statement.
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In addition, this statement includes preliminary observations based
on on-going work we conducted during the winter of 2013 at your
request, assessing the effectiveness of AIT equipped with automated
target recognition (ATR) software.\4\ As part of this on-going work, we
analyzed documents and interviewed TSA officials on the status of AIT
development and deployment efforts and milestones. All of our work was
conducted in accordance with generally accepted Government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives. For new
information that was based on work not previously reported, we obtained
TSA's views on our findings and incorporated technical comments where
appropriate.
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\4\ We plan to issue a report with the results from this work in
the fall of 2013. AIT systems equipped with ATR software display
anomalies that could pose a threat using a generic figure for all
passengers.
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background
In 2003, we designated implementing and transforming DHS as high-
risk because DHS had to transform 22 agencies--several with major
management challenges--into one department.\5\ Further, failure to
effectively address DHS's management and mission risks could have
serious consequences for U.S. National and economic security. Given the
significant effort required to build and integrate a department as
large and complex as DHS, our initial high-risk designation addressed
the Department's initial transformation and subsequent implementation
efforts, to include associated management and programmatic challenges.
At that time, we reported that the creation of DHS was an enormous
undertaking that would take time to achieve, and that the successful
transformation of large organizations, even those undertaking less
strenuous reorganizations, could take years to implement.
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\5\ GAO, High-Risk Series: Government-wide 2013 Update and Progress
Made by the Department of Homeland Security, GAO-13-444T (Washington,
DC: Mar. 21, 2013).
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As DHS continued to mature, and as we reported in our assessment of
DHS's progress and challenges 10 years after the terrorist attacks of
September 11, 2001, we found that the Department implemented key
homeland security operations and achieved important goals in many areas
to create and strengthen a foundation to reach its potential.\6\ As a
result, we narrowed the scope of the high-risk area and changed the
name from Implementing and Transforming the Department of Homeland
Security to Strengthening the Department of Homeland Security
Management Functions. Recognizing DHS's progress in transformation and
mission implementation, our 2011 high-risk update focused on the
continued need to strengthen DHS's management functions (acquisition,
information technology, financial management, and human capital) and
integrate those functions within and across the Department, as well as
the impact of these challenges on the Department's ability to
effectively and efficiently carry out its missions.
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\6\ GAO, Department of Homeland Security: Progress Made and Work
Remaining in Implementing Homeland Security Missions 10 Years after 9/
11, GAO-11-881 (Washington, DC: Sept. 7, 2011).
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The Aviation and Transportation Security Act (ATSA) established TSA
as the Federal agency with primary responsibility for securing the
Nation's civil aviation system, which includes the screening of all
passengers and property transported to, from, and within the United
States by commercial passenger aircraft.\7\ In response to the December
25, 2009, attempted terrorist attack on Northwest Airlines Flight 253,
TSA revised its procurement and deployment strategy for AIT, commonly
referred to as full-body scanners, increasing the number of AIT units
it planned to procure and deploy. TSA stated that AIT provides enhanced
security benefits compared with walk-through metal detectors, such as
enhanced detection capabilities for identifying non-metallic threat
objects and liquids. In July 2011, TSA began installing ATR software on
deployed AIT systems designed to address privacy concerns by
eliminating passenger-specific images. As of May 2013, TSA had deployed
about 750 AIT systems to more than 200 airports, most of which were
equipped with ATR software. In January 2012, we issued a classified
report on TSA's procurement and deployment of AIT that addressed the
extent to which: (1) TSA followed DHS acquisition guidance when
procuring AIT, and (2) deployed AIT units are effective at detecting
threats. Pursuant to the FAA Modernization and Reform Act of 2012, TSA
was mandated to ensure that all AIT systems used to screen passengers
are equipped with and employ ATR software by June 1, 2012.\8\
Consistent with provisions of the law, TSA subsequently extended this
deadline to June 1, 2013.\9\
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\7\ See Pub. L. No. 107-71, 115 Stat. 597 (2001). For purposes of
this testimony, ``commercial passenger aircraft'' refers to a U.S.- or
foreign-flagged air carrier operating under TSA-approved security
programs with regularly scheduled passenger operations to or from a
U.S. airport.
\8\ See Pub. L. No. 112-95, 826, 126 Stat. 11, 132-33 (2012)
(codified at 49 U.S.C. 44901(l)).
\9\ On March 26, 2013, TSA published a Notice of Proposed
Rulemaking in the Federal Register soliciting public comment on the use
of AIT as a primary means for screening passengers. See 78 Fed. Reg.
18,287 (Mar. 26, 2013).
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tsa has taken some steps to address challenges identified in
developing, testing, and delivering select screening technologies
While TSA has taken some steps and is taking additional steps to
address challenges related to developing, testing, and delivering
screening technologies for selected aviation security programs,
additional challenges remain.
Developing and Meeting Key Performance Requirements for TSA Screening
Technologies
As we have reported in the past few years, it is difficult to fully
assess program performance without establishing valid baseline
requirements in key foundation documents at the program start.
According to best practices established in prior work on major
acquisitions, without the development, review, and approval of key
acquisition documents, such as the mission need statement and the
operational requirements document, agencies are at risk of having
poorly-defined requirements that can negatively affect program
performance and contribute to increased costs.\10\ Specifically, we
have reported in the past few years that TSA has faced challenges in
developing and meeting program requirements in some of its aviation
security programs. For example:
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\10\ GAO, Best Practices: An Integrated Portfolio Management
Approach to Weapon System Investments Could Improve DOD's Acquisition
Outcomes, GAO-07-388 (Washington, DC: Mar. 30, 2007). 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. The operational requirements document
includes key performance parameters and describes the mission,
capabilities, and objectives to provide needed capabilities.
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AIT.--In January 2012 we concluded that TSA did not fully follow
DHS acquisition policies when acquiring AIT, which resulted in DHS
approving full AIT deployment without full knowledge of TSA's revised
specifications.\11\ Specifically, DHS's Acquisition Management
Directive 102-01 (AD 102) required TSA to notify DHS's Acquisition
Review Board (ARB) if AIT could not meet any of TSA's five key
performance parameters or if TSA changed a key performance parameter
during qualification testing.\12\ Senior TSA officials acknowledged
that TSA did not comply with the directive's requirements, but stated
that TSA still reached a ``good decision'' in procuring AIT and that
the ARB was fully informed of the program's changes to its key
performance parameters. Further, TSA officials stated that the program
was not bound by AD 102 because it was a new acquisition process and
they believed that the ARB was not fully functioning at the time.\13\
DHS officials stated that the ARB discussed the changed key performance
parameter but did not see the documents related to the change and
determined that TSA must update the program's key acquisition document,
the Acquisition Program Baseline, before TSA could deploy AIT systems.
However, we concluded that, according to a February 2010 acquisition
decision memorandum from DHS, the ARB gave approval to TSA for full-
scale production without reviewing the changed key performance
parameter. DHS officials stated that the ARB should have formally
reviewed changes made to the key performance parameter to ensure that
TSA did not change it arbitrarily. According to TSA, it should have
submitted its revised requirements for approval, but it did not because
there was confusion as to whether DHS should be informed of all
changes. Acquisition best practices state that programs procuring new
technologies with fluctuating requirements pose challenges to agencies
ensuring that the acquisition fully meets program needs.\14\ DHS
acquisition oversight officials agreed that changing key requirements
is not a best practice for system acquisitions already under way. As a
result, we found that TSA procured and deployed a technology that met
evolving requirements, but not the initial requirements included in its
key acquisition requirements document that the agency initially
determined were necessary to enhance aviation security. We recommended
that TSA develop a road map that specifies development milestones for
AIT and have DHS acquisition officials approve the road map. DHS agreed
with our recommendation and has taken actions to address it, which we
discuss below.
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\11\ In January 2012, we issued a classified report on TSA's
procurement and deployment of AIT at airport checkpoints.
\12\ AD 102 (effective November 7, 2008) and its associated
instruction manual establish the Department's policies and processes
for managing major acquisition programs. DHS generally defines major
programs as those expected to cost at least $300 million over their
respective life cycles, and many are expected to cost more than $1
billion. The ARB, now called the Investment Review Board, is the cross-
component board within DHS that determines whether a proposed
acquisition has met the requirements of key phases in the acquisition
life-cycle framework and is able to proceed to the next phase and
eventual full production and deployment. Key performance parameters
(KPP) are system characteristics that are considered critical or
essential. Failure to meet a KPP could be the basis to reject a system
solution.
\13\ DHS's Under Secretary for Management issued a memorandum on
November 7, 2008, requiring compliance with the directive at the
program's next formal decision point, but no later than 6 months from
the date of the directive (by May 2009). DHS acquisition officials
stated that enforcing compliance with the new policy took almost 1
year, but that it worked with TSA to make the directive's requirements
known. However, DHS's previous directive--Management Directive 1400,
which AD 102 superseded--also required component agencies to follow a
similar process whereby programs were reviewed by DHS's Investment
Review Board. Accordingly, the Investment Review Board began reviewing
TSA's AIT program (at that time called the Whole Body Imager) as early
as 2008.
\14\ GAO, Defense Acquisitions: Managing Risk to Achieve Better
Outcomes, GAO-10-374T (Washington, DC: Jan. 20, 2010).
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EDS.--In July 2011, we found that TSA revised its EDS requirements
to better address current threats, and had plans to implement these
requirements in a phased approach.\15\ However, we found that some
number of EDS machines in TSA's checked baggage screening fleet were
configured to detect explosives at the levels established in 2005 and
that the remaining EDS machines are configured to detect explosives at
levels established in 1998.\16\ When TSA established the 2005
requirements, it did not have a plan with the appropriate time frames
needed to deploy EDS machines that meet the requirements. To help
ensure that TSA's checked baggage-screening machines are operating most
effectively, we recommended that TSA develop a plan to deploy EDSs that
meet the most recent explosive detection requirements established in
2010 and ensure that new machines, as well as machines already deployed
in airports, will be operated at the levels established in those
requirements. DHS concurred with our recommendation and has begun
taking action to address it. Specifically, in April 2012, TSA reported
that it had awarded contracts to vendors to implement detection
upgrades across the currently deployed EDS fleet to meet the 2010
requirements. In March 2013, TSA reported that it plans to complete
upgrading the currently deployed fleet by the end of fiscal year 2013.
However, our recommendation is intended to ensure that EDS machines in
use at airports meet the most recent detection requirements--both
previously deployed units as well as newly-procured machines. Until TSA
develops such a plan, it will be difficult for the agency to provide
reasonable assurance that its upgrade approach is feasible or cost-
effective.
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\15\ GAO, Aviation Security: TSA Has Enhanced Its Explosives
Detection Requirements for Checked Baggage, but Additional Screening
Actions Are Needed, GAO-11-740 (Washington, DC: Jul. 11, 2011).
\16\ Details on the number of EDS machines were omitted because TSA
deemed them Sensitive Security Information, which must be protected
from public disclosure pursuant to 49 C.F.R. part 1520.
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Testing New Screening Technologies
As we have reported in the past few years, TSA has not always
resolved problems discovered during testing, which has led to costly
redesign and rework at a later date, as shown in the following
examples. We concluded that addressing such problems before moving to
the acquisition phase can help agencies better manage costs.
Specifically:
Canines.--In January 2013, we found that TSA began deploying
passenger screening canine teams to airport terminals in April 2011
prior to determining the teams' operational effectiveness.\17\
According to TSA officials, operational assessments did not need to be
conducted prior to deployment because canines were being used to screen
passengers by other entities, such as airports in the United Kingdom.
In June 2012, the DHS Science and Technology Directorate (S&T) and TSA
began conducting operational assessments to help demonstrate the
effectiveness of passenger screening canine teams.\18\ We recommended
that on the basis of the results of DHS's assessments, TSA expand and
complete operational assessments of passenger screening canine teams,
including a comparison with conventional explosives detection canine
teams before deploying passenger screening canine teams on a Nation-
wide basis to determine whether they are an effective method of
screening passengers in the U.S. airport environment, particularly
since they cost the Federal Government more than TSA's conventional
canine teams.\19\ Additionally, we found that TSA began deploying
passenger screening canine teams before it had completed an assessment
to determine where within the airport (i.e., the public, checkpoint, or
sterile areas) the teams would be most effectively utilized.\20\ TSA
leadership focused on initially deploying passenger screening canine
teams to a single location within the airport--the sterile area--
because it thought it would be the best way to foster stakeholders'
acceptance of the teams. However, aviation stakeholders we interviewed
at the time raised concerns about this deployment strategy, stating
that passenger screening canine teams would be more effectively
utilized in nonsterile areas of the airport, such as curbside or in the
lobby areas. DHS concurred with our recommendation to expand and
complete testing to assess the effectiveness of the teams in areas of
the airport deemed appropriate. As of April 2013, TSA concluded testing
with DHS S&T of passenger screening canine teams in the sterile areas
of airports, and TSA is still in the process of conducting its own
testing of the teams in the sterile and public areas of the airports.
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\17\ GAO, TSA Explosives Detection Canine Program: Actions Needed
to Analyze Data and Ensure Canine Teams Are Effectively Utilized, GAO-
13-239 (Washington, DC: Jan. 31, 2013).
\18\ The results were deemed sensitive security information by TSA.
DHS S&T has responsibility for coordinating and conducting basic and
applied research, development, demonstration, testing, and evaluation
activities relevant to DHS components.
\19\ TSA's conventional explosives detection canines are trained to
detect explosives in stationary objects (e.g., baggage and vehicles).
\20\ The sterile area of an airport is the portion in an airport,
defined in the airport's security program, that provides passengers
access to boarding aircraft and to which the access generally is
controlled through the screening of persons and property. See 49 C.F.R.
1540.5.
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EDS.--In July 2011, we found that TSA experienced challenges
related to collecting explosives data needed by vendors to develop EDS
detection software.\21\ These data are also needed by TSA for testing
the machines to determine whether they meet established requirements
prior to their procurement and deployment to airports. In the course of
collecting data, TSA officials encountered problems associated with
safely handling and consistently formulating some explosives, which
contributed to delays in providing vendors with the data needed to
develop the explosives detection software. These delays, in turn
resulted in delays to TSA's planned EDS acquisition schedule, which
involved implementing the 2010 requirements in phases. We recommended
that TSA develop a plan to ensure that it has the explosives data
needed for each of the planned phases of the 2010 EDS requirements
before starting the procurement process for new EDSs or upgrades
included in each applicable phase. DHS stated that TSA modified its
strategy for the EDS's competitive procurement in July 2010 in response
to challenges working with the explosives by removing the data
collection from the procurement process. In April 2012, TSA reported
that it had begun using a Qualified Products List for its acquisition
of EDS, which would separate the need for explosives data from future
procurements, and would require that EDS be certified to meet detection
requirements prior to beginning acquisitions of EDS to meet those
requirements.\22\
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\21\ GAO-11-740.
\22\ Technologies that successfully pass independent and
operational evaluation are added to a list of qualified products.
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Delivering Capabilities Within Schedule and Cost Estimates
According to best practices established in prior work on major
acquisitions, realistic program baselines with stable requirements for
cost, schedule, and performance are important to delivering
capabilities within schedule and cost estimates.\23\ Our prior work has
found that program performance metrics for cost and schedule can
provide useful indicators of program health and can be valuable tools
for improving oversight of individual programs. According to DHS's
acquisition guidance, the program baseline is the contract between the
program and Departmental oversight officials and must be established at
program start to document the program's expected cost, deployment
schedule, and technical performance. Best practices guidance states
that reliable and realistic cost, schedule, and performance estimates
help ensure that a program will deliver capabilities on time and within
budget.\24\ However, as we have reported in the past few years and on
the basis of our preliminary observations from our on-going work, TSA
has not always developed accurate baselines for establishing cost,
schedule, and performance estimates.
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\23\ GAO-07-388.
\24\ GAO-07-388.
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AIT.--In January 2012, we found that TSA did not have clear plans
to require AIT vendors to meet milestones used during the AIT
acquisition. On the basis of our findings, we recommended that TSA
develop a road map that outlines vendors' progress in meeting all key
performance parameters because it is important that TSA convey vendors'
progress in meeting those requirements and full costs of the technology
to decision makers when making deployment and funding decisions. While
TSA reported that it hoped vendors would be able to gradually improve
meeting key performance parameters for AIT over time, we concluded that
TSA would have more assurance that limited taxpayer resources are used
effectively by developing a road map that specifies development
milestones for the technology and having DHS acquisition officials
approve this road map. DHS agreed with our recommendation and has taken
actions to address it. For example, in February 2012, TSA developed a
road map that specifies development and deployment milestones,
including the addition of ATR to existing deployed systems, continued
development of enhanced detection capabilities, and acquisition plans
for the next generation of AIT systems (AIT-2).\25\ In July 2012, DHS
acquisition officials reviewed the AIT road map. However, on the basis
of our preliminary observations from our on-going work conducted in
March 2013, we found that TSA has fallen behind schedule as outlined in
the AIT road map to install ATR software upgrades to existing deployed
AIT systems because of one of the vendors' inability to develop this
software in time for the installation of ATR software on all units by
June 2013. TSA subsequently decided to terminate its contract with this
vendor and remove all deployed units from airports. TSA has also fallen
behind schedule as outlined in the AIT road map to acquire and test
AIT-2 systems because of vendors' inability to provide required
documentation verifying that contractual requirements have been met and
the units are ready to begin testing. Although TSA updated the AIT road
map in October 2012, it subsequently missed some of the key deadlines
specified in the updated version as well. We currently have on-going
work related to this area and we plan to report the results in the fall
of 2013.\26\
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\25\ In February 2012, TSA issued a request for vendors to provide
a second generation of AIT system, referred to as AIT-2. In September
2012, TSA made contract awards to purchase and test AIT-2 systems from
three vendors. All AIT-2 systems are required to be equipped with ATR,
have a smaller footprint than previous systems, and be capable of
meeting enhanced detection requirements, among other things.
\26\ In response to your request, we have initiated a review of AIT
that will examine the effectiveness of AIT systems equipped with ATR.
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EDS.--In July 2011, we found that TSA had established a schedule
for the acquisition of EDS machines but it did not fully comply with
leading practices, and TSA had not developed a plan to upgrade its EDS
fleet to meet the current explosives detection requirements.\27\ These
leading practices state that the success of a large-scale system
acquisition, such as TSA's EDS acquisition, depends in part on having a
reliable schedule that identifies when the program's set of work
activities and milestone events will occur, amongst other things.
However, we reported that the schedule for the EDS acquisition is not
reliable because it does not reflect all planned program activities and
does not include a time line to deploy EDSs or plans to procure EDSs to
meet subsequent phases of explosive detection requirements. On the
basis of our findings, we concluded that developing a reliable schedule
would help TSA better monitor and oversee the progress of the EDS
acquisition. DHS concurred with our recommendation to develop and
maintain a schedule for the entire Electronic Baggage Screening Program
in accordance with the leading practices we identified for preparing a
schedule.\28\ In July 2011, DHS commented that TSA had already begun
working with key stakeholders to develop and define requirements for a
schedule and to ensure that the schedule aligns with the best practices
we outlined. TSA reported in March 2013 that it plans to have an
updated integrated master schedule by September 2013.
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\27\ GAO-11-740.
\28\ TSA's Electronic Baggage Screening Program, one of the largest
acquisition programs within DHS, certifies and acquires systems used to
screen checked baggage at TSA-regulated airports throughout the United
States.
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Electronic Baggage Screening Program.--In April 2012, we found that
TSA's methods for developing life-cycle cost estimates for the
Electronic Baggage Screening Program did not fully adhere to best
practices for developing these estimates.\29\ According to best
practices, a high-quality, reliable cost estimation process provides a
sound basis for making accurate and well-informed decisions about
resource investments, budgets, assessments of progress, and
accountability for results and thus is critical to the success of a
program.\30\ We found that TSA's estimates partially met three
characteristics and minimally met one characteristic of a reliable cost
estimate.\31\ DHS concurred with our recommendation that TSA ensure
that its life-cycle cost estimates conform to cost-estimating best
practices, and identified efforts under way to address it. DHS also
acknowledged the importance of producing life-cycle cost estimates that
are comprehensive, well-documented, accurate, and credible so that they
can be used to support DHS funding and budget decisions. In April 2013,
TSA reported it plans to have an updated integrated master schedule and
revised life-cycle cost estimate by September 2013, which, when
completed, will allow it to update its cost estimate for the Electronic
Baggage Screening Program.
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\29\ GAO, Checked Baggage Screening: TSA Has Deployed Optimal
Systems at the Majority of TSA-Regulated Airports, but Could Strengthen
Cost Estimates, GAO-12-266 (Washington, DC: Apr. 27, 2012).
\30\ GAO, GAO Cost Estimating and Assessment Guide: Best Practices
for Developing and Managing Capital Program Costs, GAO-09-3SP
(Washington, DC: Mar. 2 2009).
\31\ We reported that the estimate was partially comprehensive,
partially documented, partially accurate, and minimally credible when
compared against the criteria in our Cost Estimating and Assessment
Guide.
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dhs has efforts under way to strengthen oversight of component
acquisitions
In part because of the challenges we have highlighted in DHS's
acquisition process, strengthening DHS's management functions remains
on our high-risk list. However, DHS has efforts under way to strengthen
its oversight of component acquisition processes.
We found in September 2012 that while DHS has initiated efforts to
address the Department's acquisition management challenges, most of the
Department's major acquisition programs continue to cost more than
expected, take longer to deploy than planned, or deliver less
capability than promised.\32\ We identified 42 programs that
experienced cost growth, schedule slips, or both, with 16 of the
programs' costs increasing from a total of $19.7 billion in 2008 to
$52.2 billion in 2011--an aggregate increase of 166 percent. Moreover,
we reported that DHS leadership has authorized and continued to invest
in major acquisition programs even though the vast majority of those
programs lack foundational documents demonstrating the knowledge needed
to help manage risks and measure performance. For example, we found
that DHS leadership--through the Investment Review Board or its
predecessor body, the ARB--has formally reviewed 49 of the 71 major
programs. We found that DHS permitted 43 of those programs to proceed
with acquisition activities without verifying the programs had
developed the knowledge in key acquisition documents as required by AD
102.\33\ DHS officials reported that DHS's culture has emphasized the
need to rapidly execute missions more than sound acquisition management
practice and that DHS could not approve the documents in a timely
manner. On the basis of our findings, we concluded that DHS recognized
the need to implement its acquisition policy more consistently, but
that significant work remains. We recommended that DHS modify
acquisition policy to better reflect key program and portfolio
management practices and ensure acquisition programs fully comply with
DHS acquisition policy. DHS concurred with our recommendations and
reported taking actions to address some of them. For example, in
September 2012, DHS stated that it was in the process of revising its
policy to more fully reflect key program management practices to enable
DHS to more rapidly respond to programs' needs by facilitating the
development, approval, and delivery of more specific guidance for
programs.
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\32\ GAO, Homeland Security: DHS Requires More Disciplined
Investment Management to Help Meet Mission Needs, GAO-12-833,
(Washington, DC: Sept. 18, 2012).
\33\ We surveyed all of DHS's 77 major acquisition programs from
January to March 2012, and received a 92 percent response rate. DHS
originally identified 82 major acquisition programs in the 2011 major
acquisition oversight list, but 5 of those programs were subsequently
canceled in 2011. Seventy-one program managers responded to the survey.
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In March 2012, we found that to enhance the Department's ability to
oversee major acquisition programs, DHS realigned the acquisition
management functions previously performed by two divisions within the
Office of Chief Procurement Officer to establish the Office of Program
Accountability and Risk Management (PARM) in October 2011. PARM, which
is responsible for program governance and acquisition policy, serves as
the Management Directorate's executive office for program execution and
works with DHS leadership to assess the health of major acquisitions
and investments. To help with this effort, PARM is developing a
database, known as the Decision Support Tool, intended to improve the
flow of information from component program offices to the Management
Directorate to support its oversight and management efforts. However,
we reported in March 2012 that DHS executives were not confident enough
in the data to use the Decision Support Tool to help make acquisition
decisions.\34\ On the basis of our findings, we concluded that DHS had
limited plans to improve the quality of the data because PARM planned
to check the data quality only in preparation for key milestone
meetings in the acquisition process. We reported that this could
significantly diminish the Decision Support Tool's value because users
cannot confidently identify and take action to address problems meeting
cost or schedule goals prior to program review meetings.
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\34\ GAO, Department of Homeland Security: Continued Progress Made
Improving and Integrating Management Areas, but More Work Remains, GAO-
12-365T (Washington, DC: Mar. 1, 2012).
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In February 2013, we reported that DHS updated its Integrated
Strategy for High-Risk Management in June 2012, which includes
management initiatives and corrective actions to address acquisition
management challenges, among other management areas.\35\ In the June
2012 update, DHS included, for the first time, performance measures and
progress ratings for all of the management initiatives. The June 2012
update also identified the resources needed to implement most of its
corrective actions, although we found that DHS needs to further
identify its resource needs and communicate and mitigate critical gaps.
On the basis of our findings, we concluded that the strategy, if
implemented and sustained, will provide a path for DHS to be removed
from our high-risk list. Going forward, DHS needs to continue
implementing its Integrated Strategy for High-Risk Management and show
measurable, sustainable progress in implementing its key management
initiatives and corrective actions and achieving outcomes including
those related to acquisition management. We will continue to monitor
DHS's efforts to determine if the actions and outcomes are achieved.
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\35\ GAO, High-Risk Series: An Update, GAO-13-283 (Washington, DC:
Feb. 2013).
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Chairman Hudson, Ranking Member Richmond, and Members of the
committee, this concludes my prepared statement. I look forward to
responding to any questions that you may have.
Mr. Barletta. Thank you. Thank you, Mr. Lord.
The Chairman recognizes Mr. Edwards to testify.
STATEMENT OF CHARLES K. EDWARDS, DEPUTY INSPECTOR GENERAL, U.S.
DEPARTMENT OF HOMELAND SECURITY
Mr. Edwards. Good afternoon, Chairman Barletta, Ranking
Member Richmond, Ranking Member Thompson, and distinguished
Members of the subcommittee. Thank you for inviting me to
testify today about improvements that DHS can make to
procurement and acquisition practices, specifically to those at
Transportation Security Administration.
DHS continues to face challenges in implementing a fully
integrated acquisition process which requires an effective
acquisition management infrastructure. But let me stress that I
believe DHS has also made important strides in recent years
toward improving its acquisition processes. In 2010 DHS
implemented Acquisition Management Directive MD 102-01, which
is the principal policy guidance that governs all acquisition
programs.
In 2011 the Department strengthened oversight of
acquisition programs and created the Office of Program
Accountability and Risk Management, PARM, which reports
directly to the Under Secretary of Management. It then
appointed component acquisition executives, CAEs, in all
components, including TSA, to work collaboratively with PARM.
As for TSA, it has appointed an Assistant Administrator for
Acquisition who serves as both the head of the contracting
activity and the CAE.
Our report, ``Transportation Security Administration's
Acquisition of Support Contracts,'' found TSA did not provide
adequate management and oversight of acquisition for support
services for transportation security programs. Contractors were
performing inherently Governmental functions, did not follow
acquisition guidance, and issued vague statements of work.
Since its creation TSA has relied on contractors to help
accomplish many tasks, including acquisitions. Although the
Federal Acquisition Regulation, known as the FAR, establishes
contract administration as an inherently Governmental function,
TSA's support services contractors performed contract
administration in three of the 13 contracts we reviewed. One of
those three contractors performed the contracting officer's
representative support, also known as CORs, for its contract
along with reviewing its own invoices.
We recommended that TSA include a contract review of
inherently Governmental functions as part of a contract
administration. TSA responded by assigning a quality assurance
specialist to review every new statement of work for inherently
Governmental functions.
Another challenge for TSA identified in our report was the
lack of dedicated and properly trained CORs. We recommended
that TSA assigned dedicated, trained, and certified CORs to
manage and oversee the contract administration function. TSA
provided us with the necessary training documentation showing
it had trained and certified CORs.
Our report, ``Transportation Security Administration
Logistics Center--Inventory Management,'' recognized that TSA
include its accountability of screening equipment at the
logistics center. However, we also determined that TSA stowed
unusable or obsolete equipment, maintained inappropriate safety
stock levels, and did not develop an effective inventory
management process. We made two recommendations to TSA that,
when implemented, should assist the component with managing
inventory in its warehouses. TSA concurred with one
recommendation and partially concurred with the other.
In March 2010 we issued ``Transportation Security
Administration's Acquisition of Support Service Contracts,''
which included three recommendations to improve TSA's
acquisition process. In January 2012, we determined that all
responses and corrective actions were sufficient to close our
recommendations.
In conclusion, as the reports I have highlighted
illustrate, DHS and TSA are taking steps to implement our
recommendations to strengthen and streamline their procurement
and acquisition processes. However they continue to face
challenges that will require more time and effort to overcome.
My office will continue to examine these processes at the
Department and its components and to make recommendations
designed to improve their efficiency and effectiveness. Mr.
Chairman, this concludes my prepared remarks, and I would be
happy to answer any questions that you or other Members may
have. Thank you.
[The prepared statement of Mr. Edwards follows:]
Prepared Statement of Charles K. Edwards
May 8, 2013
Good afternoon Chairman, Ranking Member, and distinguished Members
of the subcommittee.
I am Charles K. Edwards, Deputy Inspector General of the Department
of Homeland Security (DHS). Thank you for inviting me to testify today
about improvements that DHS can make to procurement and acquisition
practices, specifically to those at the Transportation Security
Administration (TSA).
As you know, the DHS Office of Inspector General (OIG) was
established in January 2003 by the Homeland Security Act of 2002, which
amended the Inspector General Act of 1978. DHS OIG seeks to promote
economy, efficiency, and effectiveness in DHS programs and operations
and reports directly to both the DHS Secretary and Congress. We fulfill
our mission primarily by issuing audit, inspection, and investigative
reports that include recommendations for corrective action, and by
referring criminal cases to the United States Attorney General for
prosecution.
major acquisition programs
DHS has made important strides in recent years toward improving its
acquisition process. Nevertheless, DHS continues to face challenges in
implementing a fully integrated acquisition process, which requires an
effective acquisition management infrastructure. Acquisition management
is a complex process that goes beyond simply awarding a contract. It
begins with the identification of a mission need and continues with the
development of a strategy to fulfill that need while balancing cost,
schedule, and performance. The process concludes with contract
closeout, after satisfactorily meeting the terms. Acquisition
management includes managing operational and life-cycle requirements--
from formulating concepts of operations, developing sound business
strategies, and exercising prudent financial management to assessing
tradeoffs and managing program risks.
In fiscal year 2011, the Department restructured and strengthened
its oversight process of all major acquisition programs by creating the
Program Accountability and Risk Management (PARM) office. PARM reports
directly to the under secretary for management. It manages and
implements Acquisition Management Directive (MD) 102-01, serves as the
executive secretariat to the Acquisition Review Board (ARB) and the
Component Acquisition Executive Council, and guides managers of major
investments through the acquisition governance process. PARM also
provides independent assessments of major investment programs and works
with DHS partners to enhance business intelligence to inform ARB
decisions. It monitors programs between formal reviews to identify
emerging issues that DHS needs to address. Further, the Department
developed the Decision Support Tool to aid in monitoring and oversight
and also created Centers of Excellence to assist in improving
performance.
In December 2011, the Department also issued the Program Management
& Execution Playbook (Playbook) to the acquisition workforce. The
Playbook is the Department's vision for strengthening program
management and execution capabilities, and for maturing the acquisition
management system. It addresses several management priorities:
Increasing the expertise and capabilities of the acquisition
and program management workforce;
Improving program execution;
Increasing access to expert guidance and best practices; and
Increasing access to reliable and useful program performance
data.
In addition to managing the day-to-day oversight of acquisition
programs, PARM developed and implemented a business intelligence tool
to monitor the operational status of each acquisition program. The
Decision Support Tool is a web-enabled tool that provides DHS leaders,
governance boards, and program managers with a central dashboard for
assessing and tracking the health of major acquisition projects,
programs, and portfolios. The tool creates graphs, charts, and other
views of key indicators of program health, such as cost, funding, and
schedule. The Department's goal is to improve program accountability
and to strengthen the ability to make sound strategic decisions
throughout the life cycle of major acquisitions.
On October 1, 2011, the Decision Support Tool became the official
source of Acquisition Decision Event (ADE) information and data; it is
used to provide ARBs with standardized information. On February 13,
2012, DHS issued a memorandum to all components and programs to ensure
that, on a monthly basis, all acquisition program information reported
in the Department's existing data systems is complete, accurate, and
valid.
DHS envisions becoming more data-driven, with emphasis on the
criticality of maintaining quality data within DHS source systems. The
Department created the Comprehensive Acquisition Status Report (CASR),
which provides the status of DHS major acquisitions listed in the
Department of Homeland Security Major Acquisition Oversight List. The
new CASR format increases the quality of information and can be
produced more quickly. As the Department's business intelligence
capability and data fidelity efforts continue to mature, the condensed
time line will leverage Decision Support Tool automation data to feed
the CASR in real time.
acquisition lifecycle framework
The Department classifies acquisitions into three levels to define
the extent and scope of required project and program management and the
specific official \1\ who serves as the Acquisition Decision Authority.
The Department oversees level 1 and level 2 acquisition programs. For
level 1 acquisitions, that is acquisitions more than or equal to $1
billion, the Acquisition Decision Authority is the deputy secretary.
For level 2, acquisitions of $300 million to $1 billion, the
Acquisition Decision Authority is the chief acquisition officer.
Components are responsible for the oversight and controls for
acquisition programs below the $300 million threshold.
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\1\ The Acquisition Decision Authority may designate his or her
responsibilities to other officials.
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DHS adopted the Acquisition Lifecycle Framework (ALF) to assure
consistent and efficient acquisition management, support, review, and
approval throughout the Department. The ALF is designed to ensure
stable and well-managed types of acquisition. It is designed to ensure
that the program manager has the tools, resources, and flexibility to
execute the acquisition; delivers a product that meets the user's
requirements; and complies with applicable statutes, regulations, and
policies.
The DHS acquisition life cycle process is structured to operate in
a series of acquisition phases, each leading to an ADE. The ALF is a
four-phase process that DHS uses to determine whether to proceed with
an acquisition. The four phases are:
1. Need--identifying the need to be addressed by the acquisition;
2. Analyze/Select--analyzing the alternatives to satisfy the need
and selecting the best option;
3. Obtain--developing, testing, and evaluating the selected option
and determining whether to approve production;
4. Product/Deploy/Support--producing and deploying the selected
option and supporting it throughout the operational life cycle.
Each phase leads to an ADE, a pre-determined point within an
acquisition phase at which the acquisition will undergo a review prior
to commencement of the next phase. The review is designed to ensure the
alignment of needs to strategic DHS direction, along with adequate
planning for upcoming phases of the acquisition. Prior to every ADE,
components are required to submit acquisition documents to the ARB for
review, including:
Mission Needs Statement.--Synopsizes specific functional
capabilities required to accomplish the Department's mission
and objectives, along with deficiencies and gaps in these
capabilities.
Capability Development Plan.--Defines how critical knowledge
to inform decisions will be obtained, defines the objectives,
activities, schedule, and resources for the next phase.
Acquisition Plan.--Provides a top-level strategy for future
sustainment and support and a recommendation for the
acquisition approach and types of acquisition.
Each phase ends with a presentation to the ARB, which is the cross-
component board in the Department composed of senior-level decision
makers at either the Department or component level, depending on the
total cost estimate of the programs. The ARB determines whether a
proposed acquisition meets the requirements of key phases in the ALF
and is able to proceed to the next phase and eventual full production
and deployment.
The Acquisition Review Process is followed to prepare for an ARB
and to ensure appropriate implementation of the ARB's decisions.
accountability and controls
DHS implemented an ALF that includes the ARB to support consistent
and efficient acquisition management, support, review, and approval
throughout the Department. In fiscal year 2011, the Department
maintained about 160 acquisition programs with estimated life-cycle
costs of more than $144 billion. Our report, DHS Oversight of Component
Acquisition Programs, OIG-11-71, recognized that the Department had
made progress in its acquisition oversight process and controls by
implementing a revised Acquisition Management Directive, 102-01
(Directive 102-01). In January 2010, the Department issued Revision
Number 01 of the interim Acquisition Management Directive, 102-01,
which prescribed guidance over the Acquisition Review Process, the ALF,
and the ARB. It also issued a supplemental Acquisition Instruction/
Guidebook, 102-01-001, Version 1.9 (November 7, 2008) to the interim
directive that provided detailed instructions on implementing and
managing acquisitions. Directive 102-01 and guidebook addressed many of
the previously identified oversight and control problems in acquisition
management. The directive and guidebook were positive steps, but there
are opportunities for improvement.
The Department needed to refine policies further in some areas and
strengthen oversight in others. Some components were creating program
management offices to manage simple procurements, not properly
reporting programs in the standard system, or not applying strategic
sourcing strategies to support program development. Additionally, not
all components developed component-level acquisition policies and
procedures to manage their programs. As a result, some components
created unnecessary acquisition programs that potentially increased
administrative costs without adding value. In addition, the Department
did not always know what was in its acquisition portfolio.
Directive 102-01 establishes the overall policy and structure for
acquisition management within the Department, but does not provide a
decision-making tool to determine if an acquisition warrants the higher
level of internal controls required by the ALF. According to the
Guidebook's glossary, an acquisition program is the totality of
activities directed at accomplishing a program to acquire, support, or
sustain capabilities, funded through one or more investments. In
contrast, the text of the Guidebook defines an acquisition as the
conceptualization, initiation, design, development, test, contracting,
production, deployment, logistics support, modification, and disposal
of systems, supplies, or services (including construction) to satisfy
DHS' needs. To complicate the definitions further, according to the
body of the Guidebook, capital assets, enterprise/component-level
service contracts, interagency agreements, and strategically-sourced
acquisitions are to follow Directive 102-01.
These definitions do not provide clear instruction for determining
when an acquisition should become an acquisition program. In attempts
to comply with the directive, components have 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 the instructions
did not provide clear guidance, 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 did not clearly fit
into the ALF process. Ten of the 17 (59 percent) 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, 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 and was 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 specified in Directive 102-01's
ALF and Acquisition Review Process, this renovation did not clearly
meet the intentions of the existing guidance or present a high level of
risk to warrant the increased costs of being managed as a program.
Components should not create acquisition programs to acquire
products and services under a simple procurement because creation of
such programs is 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.
department-wide management of detection equipment
Our March 2011 audit report, DHS Department-wide Management of
Detection Equipment, OIG-11-47, 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 could take to improve its acquisition processes.
With improved management, DHS could 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:
U.S. Customs and Border Protection (CBP),
Federal Emergency Management Agency,
FLETC,
U.S. Immigration and Customs Enforcement (ICE),
Office of Procurement Operations, \2\
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\2\ 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,
United States Secret Service.
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 was 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
included 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. As of March 1, 2010,
TSA's detection equipment accounted for 66 percent of the Department's
total inventory.
Our audit work showed that DHS could manage the acquisition of
detection equipment better by developing processes based on best
practices such as strategic sourcing.
Strategic Sourcing
DHS had 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 was
not managing its detection equipment through this program. According to
DHS officials, components were encouraged but not required to use the
Strategic Sourcing Program and generally did not coordinate and
communicate when acquiring detection equipment. There was no process to
standardize equipment purchases or identify common mission requirements
among components. For example, the Department's Joint Requirements
Council was inactive, and components did not have the expertise of
commodity councils or single-item managers to rely on when acquiring
detection equipment. Further, components viewed detection equipment as
unique to their missions and did not attempt to identify common mission
requirements among other components. This resulted 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, U.S. Citizenship and Immigration Services (USCIS) had 24 and
CBP had 21 different models of small X-ray equipment, and CBP and USCIS
each had 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 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 other duties to the council chair. However, DHS
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 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, using service-level agreements with other components to establish
one overall contract, which is available to all DHS entities.
The Department agreed in principle with our two recommendations and
took action to implement them. DHS was evaluating reestablishing the
JRC and other alternatives to achieve the same goal. However, as of
April 29, 2013, the Department had not reconstituted the JRC. DHS 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.
oig-10-72, transportation security administration's acquisition of
support contracts
TSA did not provide adequate management and oversight of
acquisitions for support services for transportation security programs.
Contractors were performing inherently Governmental functions or roles
that closely supported the performance of inherently Governmental
functions, acquisition staff did not follow acquisition guidance, and
support services contracts contained vague statements of work. This
occurred because the component did not have an adequate number of
properly-trained core acquisition staff to administer contracts and
oversee support services contractors' performance. As a result, TSA did
not have reasonable assurance that contractors were performing as
required, that it contracted for the services it needed, that it
received the services for which it paid, or that taxpayers were
receiving the best value.
Background
Since its creation, TSA has relied on support services contractors
to help accomplish its mission. TSA's decision to contract for services
such as acquisition support, invoice review, strategic planning, and
administrative support was largely driven by the need to stand up
programs and operations quickly after the events of September 11, 2001.
TSA's contracting officers and contracting officer's
representatives (COR) provide contract oversight and monitoring.
Contracting officers and CORs are Federal employees who represent the
Government's interests in negotiating and administering contracts. TSA
assigns a contracting officer and a COR to handle each support services
contract from contract award to closeout. The contracting officer is
responsible for providing contract administration and oversight. Due to
the technical nature of TSA contracts, contracting officers delegate
many of their contract administration and oversight responsibilities to
CORs, who serve as technical experts in the contract areas to which
they are assigned. Each COR works with the contracting officer and the
program office to oversee and monitor contractor performance and
deliverables.
Federal acquisition guidance highlights the risks inherent in
service contracting, particularly for support services. According to
the Office of Management and Budget, the closer contractor services
come to supporting inherently Governmental functions, the greater the
risk of their influencing the Government's control over and
accountability for decisions. Inherently Governmental functions require
discretion in applying Government authority or value judgments in
making decisions for the Government. A Government Accountability Office
panel stated that increasing reliance on contractors to perform
services for core Government activities challenges the capacity of
Federal officials to supervise and evaluate the performance of these
activities.
According to the Federal Acquisition Regulation (FAR), Subpart 37
and Subpart 7, and the Office of Federal Procurement Policy Letter 93-
1, services that tend to affect Government decision making or program
management require a greater level of scrutiny and an enhanced degree
of management oversight to prevent abuse. Such scrutiny includes
assigning a sufficient number of qualified Government acquisition staff
to provide oversight and ensure that agency officials retain control
over and remain accountable for policy decisions, based in part on a
contractor's performance and work products.
Contractors Are Performing Inherently Governmental Functions
Contractors performed inherently Governmental functions or roles
that directly support the performance of inherently Governmental
functions. Although the FAR establishes contract administration as an
inherently Governmental function, TSA's support services contractors
performed contract administration in 3 of the 13 contracts we reviewed.
Specifically, these three contractors reviewed invoices to determine
whether they were reasonable, correctly charged, and allowable, and
then recommended the invoices for approval and payment. These three
contracts represented 40 percent ($265 million) of the total support
services contracts for fiscal year 2009.
In addition, one of these three contractors performed COR support
for its own contract, along with reviewing its own invoices. When we
brought this to the attention of TSA management, they took immediate
action to correct the problem.
Although program officials generally acknowledged that their
professional and management support services contracts closely
supported the performance of inherently Governmental functions, they
believed that contracts for such services were common practice within
the Government. However, the FAR requires that agency officials retain
control over and remain accountable for contract administration,
approval, and payment of invoices. Until TSA provides greater scrutiny
and enhances management oversight of support services contracts, it
will continue to risk transferring Government responsibility to
contractors.
Contracting Officers Are Not Following TSA Acquisition Guidance
Contracting officers and CORs did not follow TSA's internal
acquisition guidance for contract administration, oversight, and
monitoring to ensure that contractors were completing the contracted
work. For example, for all 13 contracts, the contracting officers'
contract files were missing COR delegation forms, modifications
notifying the contractor of changes in the contracting officer,
documentation of suspension and debarment reviews, base contracts, and
performance and monitoring reports. CORs' administrative files were
missing invoices, COR delegation forms, COR training forms, contract
modifications, and other oversight documentation. Although TSA's
guidance requires that COR nomination forms and Departmental approval
forms be completed before CORs assume their duties, our review of the
contracts showed that 6 (46 percent) of the 13 contracts did not
include the nomination forms and 2 (15 percent) of the 13 contracts did
not include the Departmental approval forms before the CORs began
performing COR duties. Without adequate documentation, there is no
assurance that contractors are meeting contract provisions or that TSA
is making appropriate payments for services provided.
Although TSA's internal acquisition guidance requires quality
assurance plans or surveillance plans with specific measures for
assessing contractors' performance, none of the contract or COR files
we reviewed contained specific measures for assessing contractors'
performance, plans outlining the specific contract requirements, or
measurable outcomes of the support services provided. TSA documented
monthly meetings with contractors to discuss performance, but TSA
officials did not provide evidence that they independently validated
the contractors' progress reports. As a result, TSA could not ensure
that contractors were complying with contract performance requirements.
CORs submitted invoices to the contracting officers for payment
without sufficient detail to support payment. We reviewed all of the
contractors' August 2009 invoices, which totaled approximately $6
million for the 13 contracts. Each invoice listed the contract
employee's name and the hours of work performed. However, the invoices
did not include a detailed description of the work performed or the
project completed. The contractors' invoices were not specific, so we
could not determine whether the correct contract was charged or whether
the work performed was required under the contract. Because CORs cannot
provide adequate oversight and monitoring without reviewing detailed
invoices that identify the specific work completed, TSA did not have
reasonable assurance that contractors were performing as required and
that full payment was justified on the invoices received.
We recommended that TSA include a contract review of inherently
Governmental functions as part of contract administration. TSA assigned
a Quality Assurance Specialist to review every new Statement of Work
for inherently Governmental functions and coordinate with the
initiating program/office and Office of Acquisitions to revise the work
assignments both internally to the Government and with the contractor
to ensure that inherently Governmental functions are performed by the
Government parties. The contract review process for inherently
Governmental functions is now required for all Procurement Packages.
Contracts Contain Vague Statements of Work
TSA did not always define the requirements in the Statements of
Work for support services contracts clearly. Nine of the 13 contracts
we reviewed contained vague statements of work that did not outline the
specific requirements or include key deliverables specifying the
activities the contractor needed to complete. These nine contracts
represented 79 percent ($523 million) of the total support services
contracts for fiscal year 2009. Although the FAR requires that
contracts contain clearly defined Statements of Work, TSA program
officials acknowledged that the Statements of Work did not always
reflect program needs accurately or the work the contractors actually
performed.
The vague Statements of Work also allowed acquisition personnel to
add unrelated tasks to contracts. For example, the Statement of Work
for a $10 million services contract for strategic planning was so vague
that the contracting officer was able to use it to develop a SharePoint
(data repository) system for the Passenger Screening Program without
completing a separate contract modification. The development of a
SharePoint system is unrelated to strategic planning and is not a
support service. TSA should have contracted for the system through its
Office of Information Technology under a separate contract.
Statements of Work should be clearly written to describe the
services needed and detailed enough to ensure that personnel use a
contract as intended. Without clear Statements of Work, TSA cannot be
sure that contractors are providing the services needed or hold
contractors accountable for the services they provide.
TSA often needed to create contract modifications to clarify the
work it was asking contractors to perform. For the 13 contracts we
reviewed, TSA executed 97 contract modifications to define more clearly
the work the contractors were performing.
Contract modifications require extra work and sometimes add costs
to contracts. TSA could have avoided extra costs and work for its
already overburdened staff by clearly defining contract requirements
before awarding contracts.
Further, contracts were missing key delivery tables that identified
the task assignments and delivery dates contractors had to meet. Nine
of the 13 (69 percent) contracts we reviewed were missing key delivery
tables with specific requirements and due dates. Specific contract
requirements and task assignments are critical to gauging contractor
performance and ensuring that contractors are performing contracted
services timely.
We recommended that TSA establish evaluation factors and a review
process for requirements identified in the Statements of Work. TSA
provided the necessary documentation describing the new procurement
request submission on approval tools and processes. The newly-developed
tools and user guides provided sufficient information to identify each
stakeholder's roles and responsibilities. TSA implemented its completed
user guides on its new submission and approval tool on October 1, 2011.
This process improves the quality of all procurement request documents,
especially Statements of Work, by causing all procurement request
packages (not just service contracts) to be routed to, and reviewed by,
multiple Office of Special Council stakeholders specific to the package
program. Additionally, the tool documents all comments received with a
version history. Training has been provided to most of Office of
Special Council (submitters, reviewers, and approvers). The contracting
officers and specialists are also part of the review cycle, which
greatly improves the quality of the whole procurement request package.
TSA Does Not Have a Sufficient Number of Trained COR Staff
TSA did not provide sufficient management and oversight for its
support services contracts because it did not have an adequate number
of dedicated and properly trained CORs. As a result, TSA relied on
contractors to perform work that is inherently Governmental or directly
supports the performance of inherently Governmental functions.
TSA assigned COR responsibilities to technical experts in the area
covered by the contract. However, CORs remained focused on the program
offices in which they normally worked and were not available to monitor
contractor performance, in part because of their workload demands. For
this reason, TSA relied on contractors to perform many COR functions,
including invoice review and maintenance of the COR administrative
files. According to Federal guidelines, some of the COR duties include
inherently Governmental functions that contractors should not perform.
TSA should ensure that a core group of technical experts is
dedicated exclusively to COR functions. By maintaining a core group of
acquisition experts, TSA would be able to provide better contract
administration, management, and oversight required by the Office of
Management and Budget and the FAR. A core group would also reduce the
continual need to train new staff on COR functions.
Although COR training is essential to develop skilled staff for
contract administration, CORs on 85 percent (11 of the 13) of the
contracts reviewed had not completed the required training. To maintain
their certifications, TSA requires that CORs receive 40 hours of COR
training initially, 40 hours of refresher training per 2-year cycle
(including a minimum of 12 hours in each year), and annual ethics
training. TSA should review the COR training records to ensure that all
CORs complete the required training. TSA should also tailor COR
refresher training to develop skills in contract administration,
management, and oversight.
We recommended that TSA assign dedicated, trained, and certified
CORs to manage and oversee the contract administration function. TSA
provided the necessary training documentation showing it had trained
and certified CORs assigned to administer contracts. The Office of
Security Technology continued to analyze workload across all contract
administration functions to ensure the appropriate staffing mix. In
concurring with the recommendation, TSA Office of Acquisition noted
plans to offer enhanced COR training courses to develop skills in
contract administration, management, and oversight. OIG agreed that
completed actions resolved its recommendation, and that the finding
would be closed once TSA completed its proposed actions. On March 30-
31, 2010, TSA conducted an Overview of Government Contracting Course
for CORs. For the remainder of 2010, TSA had scheduled COR courses for
Writing Performance-Based Statements of Work, Corrective Actions,
Evaluating a Contractor's Performance, and Contract Administration. For
fiscal year 2011 COR training, TSA was coordinating with DHS, which was
going to contract for classes. Courses planned for fiscal year 2011
included Inspection and Acceptance, Risk Management, Evaluating
Contractor's Performance, and Critical COR Roles and Responsibilities.
oig-13-82, transportation security administration logistics center--
inventory management
Our report, OIG-13-82, Transportation Security Administration
Logistics Center--Inventory Management recognized that TSA improved its
accountability of screening equipment at the Logistics Center. However,
its plans and procedures for inventory management needed additional
improvements. TSA stored unusable or obsolete equipment, maintained
inappropriate safety stock levels, and did not develop an inventory
management process that systematically deploys screening equipment. As
a result, TSA may have been losing utility of equipment as it aged.
Additionally, TSA did not use all storage space within the Logistics
Center and might have been able to put approximately $800,000 per year,
which was used to lease two warehouses, to better use.
Equipment in Storage
TSA operates three warehouses in Texas, collectively known as the
TSA Logistics Center. The warehouses store various types of Government
equipment used at airports to screen passengers and baggage, including
X-ray units, metal detectors, explosive trace detection units, and
explosive detection systems. As of May 2012, TSA had more than 17,000
items, valued at about $185.7 million, stored at the Logistics Center,
including unusable, obsolete equipment and equipment that exceeded
safety stock requirements.
The quantity of Transportation Secured Equipment stored in the
warehouse for more than 2 years accounted for approximately one-half of
17,004 items in the warehouse, yet it represented almost $8 million, or
4 percent, of the dollar value recorded for all inventory in the
warehouse. This illustrates that increased quantities of Transportation
Secured Equipment stored at the warehouse may significantly increase
the dollar value of inventory. Further, this may result in millions of
dollars' worth of screening equipment becoming obsolete or unusable
while stored for an extended period.
With prolonged storage, TSA lost utility of equipment as it aged in
storage. As of May 31, 2012, TSA had 12 automated explosive detection
system (Auto EDS) units at the warehouse, including three new units
stored at the warehouse for more than 3 years. According to one TSA
official, the component did not plan to deploy the Auto EDS units that
were in storage. In 2007, TSA awarded contracts to acquire Auto EDS
units to provide baggage-screening technology for checkpoints. However,
TSA officials explained that other checkpoint technology screened
baggage faster and required less space than the Auto EDS units and, as
of November 2012, TSA removed all Auto EDS units from airports. The
recorded value of the eight Auto EDS units stored at the warehouse in
November 2012 was approximately $307 million. Upgrades for the Auto EDS
units in the warehouse cost about $1 million. The Auto EDS units became
obsolete while aging in the warehouse.
TSA also stored nonscreening equipment in the warehouse for long
periods. Specifically, TSA stored more than 3,200 furniture, fixtures,
and equipment items in the warehouse for more than 2 years. Examples
include conveyors (powers, exits, extensions, entries, brackets,
extensions, and pedestals) for more than 5 years, and 41 empty
equipment crates--used for various pieces of screening equipment--
stored for more than 2 years.
TSA's warehouse inventory also included obsolete items. The
inventory showed that TSA had 266 Threat Image Projection Ready X-ray
units in the warehouse. The machine, used to screen carry-on baggage,
is obsolete technology, being replaced by Advanced Technology and
Advanced Technology 2 X-rays. TSA also warehoused five new whole-body
imager training simulators (laptop computers) for more than 3 years.
TSA replaced the whole-body imager with advanced imaging technology
units and never used these laptop simulators.
Safety Stock
TSA did not have appropriate safety stock levels at the Logistics
Center to meet its safety stock requirements. TSA relied on
nondeployable equipment, had insufficient quantities of some equipment,
and had excessive quantities of other equipment. TSA holds safety stock
as insurance against uncertainties such as equipment failure, emerging
requirements, or special events. Adequate safety stock levels permit
TSA to respond to maintenance needs while minimizing the adverse
effects on screening operations.
TSA relied on nondeployable screening equipment to meet safety
stock requirements. For example, the target safety stock level for one
type of bottle liquid scanner was 18 units. The warehouse inventory
report for the third quarter of fiscal year 2012 also showed 18 units
designated as safety stock; however, 10 of the 18 units needed repair
and were nondeployable. Based on the number of bottle liquid scanner
units designated as safety stock in inventory and the condition codes
assigned to them, only eight units were in redeployment condition. TSA
officials said that safety stock quantities and levels are evaluated
and updated every quarter in conjunction with the quarterly warehouse
disposition process. We identified equipment that needed repair,
designated as safety stock on consecutive warehouse inventory reports.
In February 2012, TSA evaluated safety stock inventory for nine
types of explosive detection system and determined that the quantity of
safety stock was deficient for six of the nine types. For example, TSA
set the level of safety stock for one type of EDS actively under
production and deployment at five units. Although TSA had 12 of these
units in the warehouse, none was designated as safety stock.
TSA's ability to respond to critical failures for this piece of
equipment is affected by not having equipment available for safety
stock. TSA also assessed checkpoint technology safety stock in July
2012 and identified equipment with a shortage of warehouse safety
stock, as well as equipment in inventory that exceeded the safety
target. TSA also stored empty explosive trace detection cases in
quantities that exceeded its stated level for safety stock. TSA's July
2012 review showed almost 1,400 more empty cases in inventory than were
necessary to meet the target safety stock level of 459. TSA officials
explained that after explosive trace detection units were placed in
service, airports sent the empty cases to the warehouse for storage.
Some of the empty cases were stored in the warehouse for almost 5
years. To optimize existing warehouse space, TSA could have recycled or
removed the cases from inventory.
Without appropriate safety levels, TSA was not prepared to meet
equipment emergencies that could affect field operations and National
security, or increase travelers' time spent at passenger screening
checkpoints. We made two recommendations to TSA that, when implemented,
should assist the component with managing inventory in its warehouses.
TSA concurred with one recommendation and partially concurred with the
other.
transportation security administration's acquisition of support service
contracts
In March 2010, we issued, Transportation Security Administration's
Acquisition of Support Service Contracts, OIG-10-72, which included
three recommendations to improve TSA's acquisition processes. In
January 2012, based on information sent to us by TSA, we determined
that all responses and corrective actions were sufficient to close our
three recommendations, and that no other action was required.
In conclusion, as the reports I have highlighted illustrate, DHS
and TSA are taking steps to implement our recommendations to strengthen
and streamline their procurement and acquisition processes. However,
they continue to face challenges that will require further time and
effort to overcome. My office will continue to examine these processes
at the Department and its components and to make recommendations
designed to improve their efficiency and effectiveness.
Mr. Chairman, this concludes my prepared remarks. I welcome any
questions that you or the Members of the subcommittee may have.
Mr. Barletta. Thank you, Mr. Edwards.
We appreciate all of you being here today. I recognize
myself for 5 minutes to ask some questions.
Mr. Benda, I was particularly interested in tying our
airport security to obviously our National security, but also
dealing with the problem that we are having with visa
overstays. As you may know, over 40 percent of all the people
that entered the country illegally didn't cross a border. They
come legally with a visa, and we have a very difficult time of
tracking their entry and exit from the country, yet alone those
that just disappear and never leave.
With the new technology and the technology that we are
testing, are we looking at anything that would tie airport
security with a biometric technology so that we can somehow
track people as they enter and exit the country?
Mr. Benda. Certainly, sir. The S&T Directorate is actually
partnering with CBP and the Office of Policy at the Department
and looking at biometric air exit, which is part of the 9/11
Commission recommendations. The Department has a robust program
on biographic, and S&T has been charged to look at where
biometric technologies can serve or help augment that purpose.
I recently actually was just over in the United Kingdom
where we saw biometrics currently in place. They are in place
partly for commercial reasons where they want to have what they
call a common departure lounge, where they can merge both
international and domestic travelers to try and actually
increase customs duty-free sales. So there are a lot of
technologies out there, either from fingerprint scanning to
iris scanning, and S&T is in the process of actually building a
test bed of viable technologies so that we can, once we have
determined what the operational requirements are, we can see
how well those technologies would perform, and we actually plan
on deploying a pilot to a U.S. airport within the next year or
2.
So it is something we are actively pursuing. We think now
the time is right. Europe and other areas really taken a lead
on this. We think we can leverage off a lot of their
investments and deploy a capability pretty quickly once that
cost-benefit analysis----
Mr. Barletta. What would be the time frame would you
estimate?
Mr. Benda. Well, it all depends, sir, whether it makes
sense from a cost-benefit analysis, quite frankly. What level
of security do you gain? When you look at airports versus land
border, it will be really hard for us to do biometric
trafficking of people leaving by land border when we have 227
million people enter and leave every year. So the lines that we
would have leaving would be substantial. If we were looking
only at an air implementation I believe we could certainly have
a pilot operational for one airport I would say within the next
2 years would certainly be possible.
Mr. Barletta. Mr. Lord, Mr. Richmond, and Mr. Thompson
talked a little bit about the puffer debacle. Why is TSA in
such a rush to put the untested technology into service without
doing necessary research? How can we be assured on this
committee that that won't happen again?
Mr. Lord. Well, that is an excellent question. I am sure
TSA cringes every time they hear the word puffer. But to their
credit, they made some important changes in their process. The
reason the puffer example occurred is the technology was
successful in the laboratory and it was immediately moved to
the field without what we call operational test and evaluation.
That is testing in the field to make sure it really works
before full deployment.
Under their new process they do have operational test and
evaluation stage where the technology is deployed on a limited
basis in the field and carefully tested before the final
decision is made to field it. So I think that was the important
lesson learned from the puffer. Again, it was over $30 million
in taxpayer money, people should be concerned about it, but I
always like to look at it in terms of the process changes they
made on that, and I think that was a big improvement in their
process.
Mr. Barletta. Thank you.
The Chairman now recognizes the Ranking Minority Member of
the subcommittee, the gentleman from Louisiana, Mr. Richmond,
for any questions he may have.
Mr. Richmond. Thank you, Mr. Chairman.
I will start with Ms. Waters. Last Congress we heard
repeatedly from witnesses that in order to have a strong
acquisition program you have to ensure that you have adequate
staff dedicated to the program. So that raises two quick
questions, which is: What is the average tenure of TSA's
procurement staff, and are the procurement specialists assigned
to the accounts for the duration of their life cycle?
Ms. Waters. Thank you for that question. I don't have the
average tenure of the TSA workforce with me, but we certainly
will--or the procurement workforce with me--but I will get that
back to you.
We do a couple of things in acquisition. One is we
certainly keep contract specialists and contracting officers
and outreach officers on those programs until they research a
mature stage or complete before rotating them to other areas.
We also have an opportunity to work with DHS in their
internship program, so we are bringing in new 1102s to be
filled all the time and other series that are specialized in
acquisition, such as cost analysts, program managers who help
us on the acquisition side of the house.
So I think we have got a more robust workforce right now. I
think we have got an adequate workforce to meet the need of TSA
in terms of our procurement needs right now and our acquisition
management needs right now. As our program grows, as TSA's need
grows, I think we will look at the opportunity to expand that
given our budget constraints and what we face from that
perspective as well.
Mr. Richmond. In terms of your goals for small and
disadvantaged businesses, I know that you have reached your
goals in small disadvantaged and service-disabled veterans. Are
those goals set by TSA or are they set by DHS?
Ms. Waters. The overall goal is set by SBA, with close
coordination with DHS and the Office of Small and Disadvantaged
Business Utilization, and then those goals are assigned to TSA.
Mr. Richmond. What is your goal for contracting with 8(a)
small businesses and did you meet that goal?
Ms. Waters. So the 8(a) goal is a goal that is not tracked
at the DHS level. We do set a goal at TSA which is at 2.5
percent. Last year we did meet that goal. The 8(a) goal is a
goal that is rolled up into the small disadvantaged business
and in fiscal year 2012 we did meet that goal as well.
Mr. Richmond. Let me switch over to a question which I
think is also a security concern and that is the ability or--
well, you all allowing companies outside the United States to
manufacture the TSO uniforms. I believe it was either mentioned
that it was a trade agreement or NAFTA that prohibited you
from--prohibited you from prohibiting outside companies to make
it, if that makes any sense. I was just wondering if we have
safeguards for our military uniforms why can't we have the same
thing for our TSO uniforms?
Ms. Waters. So it is my understanding that because TSA is
under the NAFTA and the Chilean trade agreement act, that we
treat companies that produce items in Canada and in Mexico as
domestic companies. While we certainly want to comply with
that, with those requirements, and what the requirements that
the Federal Acquisition Regulation require of us, we really
don't have a say at the end of the day where those companies
end up manufacturing those uniforms. So we issued the
solicitation, the company responded, they received the award,
and then chose to have those items manufactured in those
locations.
Mr. Richmond. Do you all view it as I view it, as a
security concern if those uniforms are manufactured outside the
United States?
Ms. Waters. I don't think we have put that designation on
it. It is certainly something that we can look at. If that
designation requires us to have those items procured
domestically then we would certainly comply with that.
Mr. Richmond. Switching over to Mr. Edwards, quickly, how
has instituting the FAR helped TSA to refine its acquisition
program and ensure greater transparency and that consistency is
embedded in the program?
Mr. Edwards. In June 2008, prior to that TSA was not
following the FAR, but after June 2008 they are and instituting
and following FAR. TSA has also instituted internal guidance
and policies that augment the FAR regulations. So I think it is
a good thing that they are following the FAR regulations and
also the Department has overall visibility over it.
Mr. Richmond. Thank you.
Mr. Chairman, I see my time has expired and I yield back.
Mr. Barletta. Thank you, Mr. Richmond.
The Chairman now recognizes the Ranking Minority Member of
the full committee, the gentleman from Mississippi, Mr.
Thompson, for any questions he may have.
Mr. Thompson. Thank you Mr. Chairman.
Ms. Waters, Representative Richmond talked about the small
business goals and what have you. Why are the TSA small
business goals the lowest in the agency?
Ms. Waters. One of the reasons why our goal is at 23
percent is that I think there is a recognition by SBA and by
DHS that with the spin that we have in our technology area it
is a challenge to separate the remaining dollars out and
achieve a higher goal. Frankly, we are having a challenge
meeting the 23 percent goal. While we recognize that those are
challenges, we are also looking at that portfolio, the security
technology portfolio, and our all of our portfolios for
opportunities for small business.
Mr. Thompson. Well, can you provide the committee with
those challenges that you have to overcome if those small
business requirements are to be met?
Ms. Waters. Yes, sir. What we know today is part of the
challenge with security technology is the testing environment,
is a company having not only small but large businesses, having
the capital to be able to endure the testing environment that
happens at TSA. So what Mr. Benda talked about, about being
able to use different information that used to be proprietary
and giving that to the small businesses, gives them maybe not
the same opportunity but a different opportunity to succeed in
the security capabilities area.
Mr. Thompson. Well, have you tried narrowing your
procurement so that you don't write small businesses out but
you write them in?
Ms. Waters. So certainly we do that in many cases. We
certainly set aside for small business, we have done that with
the Screening Partnership Program. We have not done that in the
technology area as of yet, but I think as we mature that
information and those requirements and we see that opportunity,
in my opinion there is nothing that is off the table that would
not include small business if we could find viable candidates.
Mr. Thompson. Well, let me for my own point say that you
lower the goal based on what you say you can't find. Can you
provide us information on what you can't find and what the
problem is? My issue here is you have lowered the goal and you
are not even meeting the lower goal. So why not keep it at or
near where your other agencies are and just say we are trying
to get there? But you lowered the bar and some of us hear the
lowering the bar too many times, and I just think from my own
position it is probably a question of will to get it done.
Now, why have we lowered the bar on small disadvantaged
businesses compared to everybody else?
Ms. Waters. I don't know that the bar was lowered. My
understanding is that our goal has been 23 percent for several
years now. Certainly we will provide you with information on
what we see as those challenges.
Mr. Thompson. Small disadvantaged, not small business.
Ms. Waters. So our small disadvantage business goal in
fiscal year 2012 was 5 percent and we exceeded that by 7.8
percent.
Mr. Thompson. Yeah, but it is the lowest. In that instance
you lowered it and went over it. In lowering it your basement
or your floor is lower than anybody else in the agency. So why
not raise it to where everybody else is?
Ms. Waters. So our goal is again to be successful in all
areas of small business and we will certainly take that back
and look at that.
Mr. Thompson. So you lowered it in order to look
successful?
Ms. Waters. I don't believe that that was the case.
Mr. Thompson. That is what you just said. I mean, you just
said you lowered it in order to be successful.
Ms. Waters. But TSA does not unilaterally determine the
goal, DHS determines the goal.
Mr. Thompson. All right.
Mr. Lord--actually it is not Mr. Lord. Ms. Waters again. I
appreciate your honesty and information. Have we mastered the
overreliance on contractors in acquisition or is that still a
challenge?
Ms. Waters. I believe that we have currently about 13
contractors supporting my staff of about 170 FTE. I am not
quite sure what our past numbers were, but we see that as a
necessary need currently to achieve some goals in some areas
that we are trying to increase our workload in.
Mr. Thompson. So you said 13 individuals?
Ms. Waters. Yes, sir.
Mr. Thompson. And that is it?
Ms. Waters. Yes, sir.
Mr. Thompson. Very good. I yield back.
Mr. Barletta. Thank you Mr. Thompson.
The Chairman now recognizes himself for a second round of
questions.
Ms. Waters, we have heard from many technology vendors that
TSA is not transparent enough to allow for efficient research
and development planning by the private sector to meet TSA
needs. This may result in less effective and mature screening
technologies once TSA is ready to make a purchase. I would like
each of you to answer this. Do you believe TSA should develop
and share a long-term technology road map to help guide future
investments by industry? In what ways would transportation
security benefit from such a road map or planning document?
Ms. Waters. So I certainly think that we need to provide an
increased amount of information to industry so that they are
aware of what our plans are, what our current state is, and
what we believe our future state needs to be. Part of that is
our preparing of and getting ready to publish our test and
evaluation guide which we think will provide critical
information to industry that speaks to the fact that when they
come into our testing environment it takes much longer than
either industry or TSA expects when we are trying to do
developmental testing and operational testing. So that is one
area where we see we are making progress and sharing
information with industry.
Mr. Barletta. Mr. Benda.
Mr. Benda. Thank you Mr. Barletta. I do think I agree with
Ms. Waters, we do need to be more transparent with industry. I
think that is really the goal of the R&D strategies that we are
developing in conjunction with TSA. That is part of the reason
we briefed them at a webinar that is open to all of industry.
I do think in the past we haven't done as good a job but we
did have a first step at this where we had a signed aviation
security R&D strategy with TSA, with Robin Kane and myself, the
former AA of security capabilities. One of fruits of that is
actually I talked about the new X-ray device that would
actually be able to identify what is in your bag. That is
actually coming out of a current investment by a vendor, $15
million with their own IRAD or internal money against that, $9
million of Government money, and we expect the vendor to put
another $9 million in it.
So I think we are starting to see again some fruits of that
labor and I think we need to improve upon it and hopefully have
more of those come down. The challenge I have when you talk
about a technology road map is that I am not sure where the
next technology comes from. I am much more interested in a road
map of what are the priorities and challenges we have, because
I believe necessity is the mother of invention. We may not have
been able to predict 5 years ago that we would be able to use a
technique called X-ray diffraction to do identification of
materials in a bag. So by telling them what our challenges and
capabilities are I think it is a better approach than saying
you have to achieve this technology.
Mr. Barletta. Mr. Lord.
Mr. Lord. I agree with the prior two witnesses. We often
meet with vendors and they sometimes express concerns about
limited transparency. I noticed the Department and TSA, they
seem to be implementing different practices and sessions to
help share more information with industry, such as industry
days. They have those on a regular basis and there are other
forums that take place that are aimed at sharing more
information.
But some of the vendor complaints, quite frankly, are
difficult to evaluate. They always want perfect information,
and some is obviously procurement-sensitive and you simply
can't share it with the private sector. But I think in general
of course more information shared to the best you can the
better and the happier they will be in the long run and the
better sense they will have of what your requirements are and
needs.
Mr. Barletta. Mr. Edwards.
Mr. Edwards. Yes, sir. Just like in an acquisition program
you look at the entire life-cycle cost from cradle to death.
There definitely needs to be a road map that they need to
provide that takes into account with the changing in the
threats. You know, as the threats and the environments change,
we should be able to adjust, but you definitely need to have a
road map. You cannot just blindly use the technology, throw it
away, and then try to go to another one. You definitely need to
have a road map. Everybody else does.
Mr. Barletta. Thank you.
Mr. Lord, in 2009 GAO reported that TSA had not completed a
cost-benefit analysis on investments for screening passengers
at airport checkpoints. That was 4 years ago, and my
understanding is that there has still not been a full cost-
benefit analysis completed. What is the value gained from a
cost-benefit analysis? Is it primarily that we could eliminate
programs or requirements that are too expensive for the
comparably small security benefit that they provide?
Mr. Lord. A cost-benefit analysis is a really important
piece of information for managers that lets them consider
making an investment in an area and also assures them that the
investment is worthwhile, the benefits exceed the cost. Just so
you know, that recommendation is still outstanding as of today.
We have had recent discussions with TSA, they hope to close it
out by the end of the fiscal year. But, again, a lot of our
work, looking very broadly across all the programs, that is a
weakness we have identified and we believe TSA perhaps may need
to ramp up their capability.
A related issue is their life-cycle cost estimates.
Obviously that is an important component of a cost-benefit
analysis. We consistently identified weaknesses in the way they
put those together. Are they getting better? Yes. But, again,
that is still an area they perhaps may want to invest more
resources in.
Mr. Barletta. Has TSA begun to do full cost-benefit
analysis for any of its major programs?
Mr. Lord. That is a good question. There has been one for
AIT that was shared with us. So in some cases they do, you
know. The Passenger Screening Program, that is essentially the
umbrella program which includes individual components, pieces
of technology within it. So there have been some, as I recall,
some cost-benefit analysis done for individual pieces. But we
thought it was important to have one for the entire program
given it consists of various technologies that all have to work
together to achieve the same end.
Mr. Barletta. Ms. Waters, do you agree this would be a
prudent step for your agency to take?
Ms. Waters. Yes, sir. What I would add is we do have one
major program, which is TIM, that does have a complete analysis
of alternatives, that does include a cost-benefit analysis. Mr.
Lord is right, we are working through each and every one of our
major acquisition programs to ensure not only that the cost-
benefit analysis is completed, if we are not in the O&M stage,
but certainly you need documentation that speaks to the
business case that we are trying to do for that investment.
Mr. Barletta. Thank you.
The Chairman now recognizes Mr. Richmond for a second round
of questions.
Mr. Richmond. Mr. Lord, and very quickly to pick up where
Chairman Barletta left off, do you have a recommendation for
the most effective means for TSA or DHS to assess cost-benefit
analysis?
Mr. Lord. We come in and we evaluate their efforts.
Typically they ask us: Well, what standards or best practices
should we be using? We refer them to the GAO website. We have
quite an extensive list of standards, criteria, so-called. We
call it the cost and schedule guide. It is like the Bible for
doing this, and it is publicly posted on our website. In the
past when we used it at TSA we actually send one of our cost
experts over and they sit down with TSA. Sometimes we have
multiple sessions. They walk them through the guide and they
compare it to what they provided so they can get a better sense
of what we are looking for. So I think that is a really
important step we do. It is essentially analogous to a
consulting service we provide, free of charge of course. But we
try to help them better understand our guide, our criteria that
we use in evaluating their cost estimates.
Mr. Richmond. Mr. Edwards, have you had an opportunity to
review how the Department, how they have taken steps to address
some of the concerns you have previously raised in some of your
audits?
Mr. Edwards. Yes, sir. The Department has made progress in
its oversight and controls by reissuing the advice, the
acquisition management directive, but the Department needs to
go further. There needs to be more guidance provided in certain
areas. For example, it is not clearly defined what an
acquisition program is. They need to give guidance on that. Not
everybody, not every component uses the tool to track this, it
is called NPRS, not everybody is using that. Not every
component uses all the available tools regarding acquisition,
and then there is not clear visibility on the acquisition
portfolio. Because of this, if there is a simple procurement,
some components create a program management office to oversee a
simple procurement. It is a waste of administrative cost. So
there is some progress but much work needs to be done.
Mr. Richmond. Ms. Waters or Mr. Benda, would you care to
address the last part of Mr. Edwards comment?
Ms. Waters. So certainly in working with PARM we are
maturing and gaining more robust acquisition management program
structure at TSA. We have outreach officers who work with our
program offices to guide them through the acquisition
documentation process that includes all of those things as an
AOA, a cost-benefit analysis, a life-cycle cost estimate to
ensure that we are making the soundest business case that we
can. We also have people embedded from DHS PARM who come and
assist us with our cost information. So we are taking advantage
of any and all resources to build our program to strengthen it.
Mr. Benda. Certainly, Member Richmond. It is one of those
things that S&T is working closely with under secretary of
management shop to try and prove acquisitions overall for the
Department. In S&T we rarely have acquisition-level programs
above that $300 million where we are required to establish the
program office. So we don't necessarily cross that threshold
very often, if at all. We are part of the process going forward
in making sure that when the Department and other components do
analysis of alternatives, other technical reviews, that S&T can
actually assist in those when necessary.
Mr. Richmond. Ms. Waters, and just going back to the small
business goals, and if I wrote down correctly I think you told
Ranking Member Thompson that you had 13 contractors that were
supporting you all?
Ms. Waters. Supporting OA, Office of Acquisition.
Mr. Richmond. Now, those 13 contractors, do they all work
for one company or are they all independent contractors?
Ms. Waters. They work for different companies; it is not
all one company.
Mr. Richmond. Now, what is the breakdown of those
companies? Are those small businesses, are those big
businesses, service-disabled veterans, what?
Ms. Waters. I don't have that information, but I will
certainly get that for you.
Mr. Richmond. Thank you, Mr. Chairman. I yield back. Thank
the witnesses for their time.
Mr. Barletta. Thank you, Mr. Richmond.
The Chairman now recognizes Mr. Thompson.
Mr. Thompson. Thank you very much.
Mr. Lord, as part of your prepared testimony to this
subcommittee last September there was extensive documentation
about TSA's failure to acquire a DHS-approved acquisition
program. Let's take the Electronic Baggage Screening Program.
As of today where is TSA on that?
Mr. Lord. That is a good question. We raised that last year
and I am happy to report they now have an approved acquisition
program baseline. It was approved August 17 last year. The
reason that is important, I think it is really important to
understand it is a program baseline that you can measure
progress against. In this document they tell you what this
thing is going to cost, when it is going to be delivered, and
what its capabilities are. It is analogous to buying a car. Who
would buy a car if you didn't know what it was going to cost,
what the performance was, gas mileage or horsepower, or when
the dealer was going to give it to you? So how can you invest
in a system without the acquisition program baseline where you
have all this important information in it?
So the good news is they completed one, but it is a few
years after they made the initial decision to go forward with
the technology. Under their guidance you are supposed to do it
at the front of program, not toward the back. To their credit
they have taken our recommendation to heart and they have one,
so we think that is an important step. You can certainly update
it as you go along, too. But, again, we call it a foundation
document, it is just not an obscure document nobody ever reads.
It has really important information in it. So we think these
baselines are real important.
Mr. Thompson. If we do that, then from an acquisition
standpoint, and if we follow it, we should get a better bang
for our bucks?
Mr. Lord. Absolutely, absolutely. Also you will be able to
track, like if you have another hearing a year from now you can
say, hey, in your original baseline you said A, B, and C, are
you there or did you shift everything to the right or change
everything?
Mr. Thompson. Thank you very much.
Mr. Edwards, yesterday your office released a report
relative to the TSA's storage of equipment. Did TSA provide you
a justification for why it would continue to purchase new
equipment such as an enhanced metal detector when it already
had one that had been in storage for 4 years?
Mr. Edwards. No, sir. In fact we have not done any review
on a future buy, so we have not received anything.
Mr. Thompson. So are you aware of a system that TSA has
available to it that could somehow age the equipment on-site or
something that would trigger or some kind of tickler system
that would say before you buy something we have it in
inventory? Are you aware of any of that?
Mr. Edwards. No, sir.
Mr. Thompson. Well, I guess he answered the question. Do
you plan to pursue it or do we need to send a follow-up letter
asking you to look into this or what?
Mr. Edwards. We are currently looking at the AIT
procurement acquisition piece of it, but if this is something
you want us to look into it, I will add that to my----
Mr. Thompson. Well, Mr. Chairman, I think just the fact
that we are buying equipment and we have got the same equipment
that has been on hand for 4 years and nobody knows it is on-
hand, somehow we are missing what I think is a reasonable
opportunity to save the taxpayers some money by just going in
the warehouse, dusting it off--I mean, not dusting it off, but
you do whatever you need to do. But since we own it already I
think it is reasonable to say that we should use it first
rather than to acquire something else?
Do you have any idea how much that kind of acquisition
procedure, how much that cost the taxpayers?
Mr. Edwards. No, sir. But now, as the assistant
administrator talked about, DHS has created the Program Ability
and Risk Management Office, PARM, which is supposed to do an
independent assessment. They work with the components and they
also look at different intervals to do their independent
assessment. So it is something maybe the Department they are
established to do. I don't know if they are doing it.
Mr. Thompson. So it looks like we need to get you a second
letter. Thank you.
Mr. Barletta. Thank you, Mr. Thompson.
The Chairman recognizes Mrs. Brooks.
Mrs. Brooks. Thank you, Mr. Chairman.
A question for Ms. Waters. As you are aware, this
subcommittee has conducted consistent and vigorous oversight
over the procurement over the last several years, but one issue
that we have consistently heard from vendors is the kind of
inconsistent level of engagement between TSA and the contractor
community. We have heard that over the last year there has been
improvement and that TSA has made progress in the area, and in
fact is engaging a group like the Security Manufacturers
Coalition and working through groups like the Washington
Homeland Security Roundtable to reach a broader audience. So
while there has been good progress, we understand there is a
shift, however, of who engages with the vendor community.
Whereas previously program-level personnel and individuals
could have non-acquisition-specific conversations with vendors,
apparently today that is prohibited. Asking if this is true
and, if so, why has there been this shift in this policy?
Ms. Waters. So we are very eager to, and think it is a very
necessary part of what we do, to have robust engagements with
industry, and we engage at all levels, senior level,
operational levels, small businesses, large businesses,
coalitions, any way that we can engage with industry we look to
do that.
What we are trying to do internal to TSA is to ensure that
when vendors do have conversations their program offices that
the acquisition or procurement process is a part of that
conversation. We want to make sure that we are capturing that
need at the very beginning and that we are ensuring that there
is a fair and equitable process to that acquisition from
beginning to end.
Mrs. Brooks. So program-level offices and officers can have
discussions----
Ms. Waters. Yes, they can.
Mrs. Brooks [continuing]. With the vendor community.
Ms. Waters. We encourage that.
Mrs. Brooks. But anything having to do with acquisition has
to do what?
Ms. Waters. We just want to ensure that we are part of that
conversation. The engagements with industry are important and
necessary and it gives us information on how to shape what we
need to do. But it is also a time where we want to make sure
that we are not talking about a known requirement, that it is
just a conversation about possibilities, not a conversation
about a need. So when that conversation turns into a need is
when we need to make sure that we are putting it inside the
acquisition process and not sharing that information unless we
are sharing it with all. So that is why we are taking those
steps.
Mrs. Brooks. Certainly. Can you share with us who some of
those coalitions or groups are besides maybe the two that I
have mentioned?
Ms. Waters. So besides the Washington Homeland Security
Roundtable, I think it is the--I am sorry, I am blanking out on
the name.
Mrs. Brooks. The one that I was aware of, the Security
Manufacturers Coalition.
Ms. Waters. Yes, ma'am. There are several others.
Mrs. Brooks. Okay.
Ms. Waters. I can get you a list of those, too.
Mrs. Brooks. Okay.
Ms. Waters. We also, we have a dedicated industry liaison,
we do industry days on a regular basis. We do industry days for
specific program offices, as well as doing industry days for
small business. So we spend quite an amount of resources
engaging with industry.
Mrs. Brooks. Well, and I would assume that industry is the
group that fosters the innovation and comes up with new ideas
for TSA. So when you mention when it gets to a need, who
determines a need, who determines when you say when it rises to
the level of need that we need to ensure everyone is involved.
Ms. Waters. So when the Government decides that it is a
need, is it a Governmental decision, something that is
inherently Governmental to decide when there is a need, then
that is when the Federal Acquisition Regulation kicks in and
says that, you know, we need to make sure that we are treating
the process fair and equitably. So I can't share information
with one company that I don't share with all. So we do
typically go silent in terms of how we are engaging with
industry at that point because we want to make sure that the
process has integrity.
Mrs. Brooks. Certainly. That would be absolutely necessary.
Just want to make sure that TSA is having very robust
discussions with industry because of the innovation and because
of their ideas.
Thank you. I yield back.
Mr. Barletta. Thank you, Mrs. Brooks.
I would like to thank the witnesses for their testimony
today and the Members for their questions. The Members of the
committee may have some additional questions for the witnesses
and we will ask you to respond to these in writing.
Without objection, the committee stands adjourned.
[Whereupon, at 2:45 p.m., the subcommittee was adjourned.]
A P P E N D I X
----------
Questions From Chairman Richard Hudson for Karen Shelton Waters
Question 1. In the last Congress, TSA received criticism for
keeping a vast amount of equipment in storage and as a result, altered
its procurement policies to a ``Just in Time'' system that purchases
small amounts of equipment immediately prior to deployment. While this
prevents a backlog of equipment, do you believe that this is the best
approach in all cases and allows industry to leverage its supply and
manufacturing networks to provide the highest quality units at the
lowest cost? If not, then isn't this a move from one bad business
practice to another?
Answer. Response was not received at the time of publication.
Question 2a. The Consolidated and Further Continuing Appropriations
Act of 2013 included language that directed TSA to provide a 5-year
investment plan that includes projected funding levels for the next 5
fiscal years for all passenger screening technology acquisitions.
Has TSA completed this plan? If so, when do you expect the
committee to receive a copy? If not, when do you expect it to be
completed?
Answer. Response was not received at the time of publication.
Question 2b. Will the 5-year investment plan be made publically
available? If so, when do you expect it to be made public?
Answer. Response was not received at the time of publication.
Question 3a. As you are aware, last year TSA was planning on
purchasing CAT/BPSS, a technology intended to verify the authenticity
of passenger identifications and boarding passes, and compare these two
pieces of information to ensure a match. At a subcommittee hearing last
Congress, Members stated concerns about the technology including the
fact that it would not be linked to State Department of Motor Vehicles
Databases or to TSA's No-Fly or Selectee lists. At that time, TSA
decided to postpone the purchase of CAT/BPSS. However, the President's
fiscal year 2014 budget request includes funding for it and a pre-
solicitation procurement notice was issued on April 24 for boarding
pass scanners, which TSA hopes to eventually marry up with credential
authentication technology.
Has TSA completed a cost-benefit analysis of this technology?
Answer. Response was not received at the time of publication.
Question 3b. Has TSA resolved the deficiencies of the technology
that were identified last year including ensuring that it can link to
State Department of Motor Vehicle Databases and TSA's No-Fly or
Selectee lists?
Answer. Response was not received at the time of publication.
Question 3c. Has DHS Science and Technology been working with TSA
to help CAT/BPSS meet technical requirements? If so, in what way? If
not, why not?
Answer. Response was not received at the time of publication.
Question 4. Some technology vendors are finding that in the wake of
sequestration, TSA is saying that it is not able to accept technologies
that have been procured because there is now a shortage of staff to
conduct either Site Acceptance Testing or Final Acceptance Testing of
systems. This creates a difficult situation for vendors, because if
their systems aren't tested and accepted, they could be in violation of
the terms and conditions of their contracts under the Federal
Acquisition Regulation.
If this is in fact an issue that has arisen post-sequestration,
what is TSA doing to assure vendors that they are not in violation of
the terms and conditions of their contracts because of TSA staffing
shortfalls?
Answer. Response was not received at the time of publication.
Question 5. During the hearing, you mentioned TSA's partnership
with the Washington Homeland Security Roundtable (WHSR), a non-profit
group comprised of companies that are actively engaged in homeland
security issues. In addition, you stated that WHSR created the Industry
Engagement Group and the TSA Contracting/Acquisition Policy Focus
Group.
Do any of the participants of these groups represent a security
technology manufacturer? If not, why not?
Answer. Response was not received at the time of publication.
Question 6a. It is my understanding that TSA and other components
within DHS use strategic sourcing and often coordinate when purchasing
detection equipment such as metal detectors, explosive detection
systems, and radiation detectors for screening people, baggage, and
cargo at airports, seaports, and land ports of entry.
Do you think TSA is taking full advantage of strategic sourcing and
doing a sufficient job coordinating purchases of the same or similar
detection capabilities with other components? Why or why not?
Answer. Response was not received at the time of publication.
Question 6b. How much money do you think DHS has saved by using
strategic sourcing to acquire its detection equipment?
Answer. Response was not received at the time of publication.
Question 7. I understand that TSA is currently exploring the option
of allowing vendors to use third parties to certify and test their
technologies. Can you describe what that process would look like and
when TSA may make a determination of whether to utilize third-party
testing?
Answer. Response was not received at the time of publication.
Questions From Chairman Richard Hudson for Paul Benda
Question 1. Do you believe it would help industry's research and
development efforts if TSA were to work with you and establish a 5-year
acquisition roadmap? Could metrics such as Technology Readiness Levels
be helpful in communicating such roadmaps?
Answer. Response was not received at the time of publication.
Question 2a. TSA seems to struggle with getting innovative new
security technologies deployed in a quick and cost-effective manner.
Can you please explain to the committee what DHS S&T is doing to
help improve the transition of new technologies?
Answer. Response was not received at the time of publication.
Question 2b. Can you cite a specific example where TSA and S&T have
worked together and successfully transitioned a major technology
acquisition?
Answer. Response was not received at the time of publication.
Question 2c. Is there a role for National laboratories and
universities to help improve the success of technology transitions?
Answer. Response was not received at the time of publication.
Question 3. Mr. Benda, you and the under secretary have described a
strategy for ``technology foraging.'' Under that strategy, you would
first try to identify mature technologies from other applications, for
example military, that could be leveraged for homeland security
applications.
Do you have a formal process yet for technology foraging?
Answer. Response was not received at the time of publication.
Question 4. Last year, TSA was planning on purchasing CAT/BPSS, a
technology intended to verify the authenticity of passenger
identifications and boarding passes, and compare these two pieces of
information to ensure a match. At a subcommittee hearing last Congress,
Members stated concerns about the technology including the fact that it
would not be linked to State Department of Motor Vehicles Databases or
to TSA's No-Fly or Selectee lists. At that time, TSA decided to
postpone the purchase of CAT/BPSS. However, the President's fiscal year
2014 budget request includes funding for it and a pre-solicitation
procurement notice was issued on April 24 for boarding pass scanners,
which TSA hopes to eventually marry up with credential authentication
technology.
Has DHS Science and Technology been working with TSA to help CAT/
BPSS meet technical requirements? If so, in what way? If not, why not?
Answer. Response was not received at the time of publication.
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