prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: The U S  Fourth National Climate Assessment, released in 2018, concluded that "the impacts of global climate change are already being felt in the United States and are projected to intensify in the future—but the severity of future impacts will depend largely on actions taken to reduce greenhouse g as [GHG] emissions and to adapt to the changes that will occur " Although a variety of efforts seeking to reduce GHG emissions are currently underway on the international and sub-national level, federal policymakers and stakeholders have different viewpoints over what to do, if anything, about future climate change and related impacts  Their views regarding climate change cover a wide range of perspectives  For example, some contend that climate change poses a "direct, existential threat" to human society and that nations must start making significant reductions in GHG emissions in order to avoid "dire effects " To support this argument, proponents of climate change mitigation highlight the evidence and conclusions from recent reports that are generally considered authoritative, including: 1  The Intergovernmental Panel on Climate Change, Global W arming of 1 5°C , 2018; and 2  The U S  Global Change Research Program, Fourth National Climate Assessment , Volume II: Impacts, Risks, and Adaptation in the United States , 2018  On the other hand, some question whether there are sufficient risks of climate change to merit a federal program requiring GHG emission reductions  In addition, others argue that a unilateral approach to climate change by the United States could disproportionately impact domestic industries while achieving minimal results in global climate change mitigation  If Congress were to consider establishing a program to reduce GHG emissions, one option would be to apply a tax or fee on GHG emissions or the inputs that produce them  This type of approach is commonly called a carbon tax or a GHG emissions fee (see "Terminology Issues: A Carbon Tax or an Emissions Fee?")  This report does not compare and analyze the multiple policy tools available to Congress that could address climate change (see text box "Other Policy Options for Addressing GHG Emissions")  This report focuses on the policy considerations and potential impacts of using a carbon tax or GHG emissions fee to control GHG emissions  The key human-related GHG is CO 2 , which is generated primarily through the combustion of fossil fuels: coal, oil, and natural gas  In 2016, fossil fuel combustion accounted for 94% of U S  CO 2 emissions and 76% of U S  GHG emissions  A carbon tax could apply either directly to GHG emissions or to the materials—based on their carbon contents—that ultimately generate the emissions (i e , "emissions inputs")  A carbon price on emissions or their emissions inputs—mainly fossil fuels—would increase the relative price of the more carbon-intensive energy sources, particularly coal  This result could spur innovation in less carbon-intensive technologies (e g , renewable energy, nuclear power, carbon capture and sequestration [CCS]) and stimulate other behavior that may decrease emissions, such as efficiency improvements  The energy price increases could also have both economy-wide impacts and negative effects on specific industries and particular demographic groups  A carbon tax approach has received some attention and debate in recent years  In the 115 th Congress, Members introduced nine carbon tax or fee proposals  Outside of Congress, the Climate Leadership Council—a bipartisan group of former policymakers and industry leaders—published a conceptual carbon tax approach in 2017 that generated some interest  Some of the industry leaders on the council represent major energy companies, including Shell, BP, and ExxonMobil  On the other hand, many Members have expressed their opposition to a carbon tax  Starting in the 112 th Congress and going through the 115 th Congress, Members have introduced resolutions in both the House and Senate expressing the view that a carbon tax is not in the economic interests of the United States  In 2018, the House passed a resolution "expressing the sense of Congress that a carbon tax would be detrimental to the United States economy" ( H Con Res  119 )  An analogous resolution was not introduced in the Senate in the 115 th Congress  The first section of this report examines carbon tax design issues, including the point of taxation, the rate of taxation, and potential border carbon adjustments  The second section discusses issues related to the distribution of carbon tax revenues  The third section discusses additional considerations associated with a carbon tax program, including estimates of GHG emissions, federal revenue, and fossil fuel prices and changes in energy use  The fourth section provides concluding observations  If policymakers decide to establish a carbon tax system, Congress would face several key design decisions, including the point of taxation—where to impose the tax and what to tax—the rate of taxation, and whether and/or how to address imported carbon-intensive materials  Alternatively, Congress could direct one or more federal agencies to determine these design features through a rulemaking procedure  Although a few of the GHG emission reduction proposals in prior Congresses delegated such authority to an agency, such as the U S  Environmental Protection Agency (EPA), all of the proposals since the 111 th Congress have included some degree of design details in the statutory language  (A later section discusses carbon tax revenue application considerations ) The point of taxation would determine which entities would be required to (1) make tax payments based on emissions or emission inputs, such as fossil fuels, (2) monitor emissions or emission inputs, and (3) maintain records of relevant activities and transactions  This section provides some considerations for policymakers deciding which GHG emissions and/or emission sources to cover in a carbon tax system  Throughout the U S  economy, millions of discrete sources generate GHG emissions: power plants, industrial facilities, motor vehicles, households, commercial buildings, livestock, etc  Administrative costs and challenges would likely increase with a broader scope of an emissions tax  A carbon tax may apply to CO 2 emissions alone, which account for most U S  GHG emissions, or to multiple GHGs  Carbon tax proposals that apply only to CO 2 generally attach a price to a metric ton of CO 2 emissions (mtCO 2 )  Some sources emit non-CO 2 GHGs, such as methane, nitrous oxides, and sulfur hexafluoride  GHG emissions from these sources could be addressed by attaching a price to a metric ton of CO 2 emissions-equivalent (mtCO 2 e)  This term of measure is used because GHGs vary by global warming potential (GWP)  At these sources, the determined GWP values would be an important issue  Policymakers may consider limiting the tax to sectors or sources that emit above a certain percentage of total U S  GHG emissions, many of which currently report their emissions to the government  For more than 20 years, monitoring devices or systems have been installed in smokestacks of most large facilities, such as power plants, which are required to periodically report emissions data to EPA  In addition, since 2010, EPA has collected annual emissions data from approximately 8,000 facilities that directly release above certain amounts of GHG emissions  Using these established monitoring frameworks, policymakers could employ a "downstream" approach, applying a carbon tax at the point where the GHGs from these facilities are released to the atmosphere  Alternatively, the tax could be applied to reliable proxies for emissions, such as emission inputs  For example, the carbon content of fossil fuels—coal, natural gas, petroleum—can serve as a proxy for the emissions released when the fuels are combusted  Applying a tax on emission inputs allows for the consideration of various points of taxation  For instance, emission inputs could be taxed at "upstream" (e g , wells) or "midstream" stages in that process (e g , refineries), the latter allowing for potential tax administration advantages that may be provided by specific infrastructure chokepoints in the fossil fuel market  For example, with respect to petroleum, the number of upstream sources—wells that produce crude oil—is over 445,000, but the number of midstream sources—facilities that refine crude oil—is only 137  Table A-1 (in Appendix A) lists the top GHG emission sources in the United States  These sources combined to account for approximately 95% of U S  GHG emissions in 2016  Table A-1 identifies the number of entities for each source category (e g , number of coal mines, number of steel production facilities) and the percentage of total U S  GHG emissions the category contributes  In the case of fossil fuel combustion—which accounted for 76% of total U S  GHG emissions—the table provides several options for segmenting the universe of sources if policymakers choose to implement a carbon tax  It identifies the number of entities that might be subject to the carbon tax under a particular option (pending any exclusions)  For example, policymakers could address fossil fuel combustion emissions by applying a carbon tax to fossil fuels (based on their carbon content) at the following entities, which include both upstream and midstream infrastructure chokepoints: 137 petroleum refineries (based on 2017 data) and 166 petroleum importers (based on 2018 data); 671 coal mines and eight companies supplying imported coal (based on 2017 data); and 1,679 entities that report natural gas deliveries to the Energy Information Administration (EIA) on Form EIA-176 and 123 natural gas fractionators (based on 2016 data)  Some of the above points of taxation might take advantage of the administrative frameworks for existing federal excise taxes  For example, a per-barrel federal excise tax on crude oil at the refinery supports the Oil Spill Liability Trust Fund  An excise tax on the sale or use of coal supports the Black Lung Disability Trust Fund  A central policy choice when establishing a price on GHG emissions is the rate of the carbon tax  Several approaches, which are discussed below, could inform the decision  One approach would set the carbon tax rate at a level or pathway—based on modeling estimates—that would achieve a specific GHG emissions target  For example, a 2018 study estimated the carbon tax rate needed to meet the U S  GHG emission reduction targets established under the 2015 Paris Agreement: 26%-28% below 2005 net GHG emission levels by 2025  The study found that a constant tax rate of $43/ton starting in 2019 would meet the 2025 reduction target  Emissions reduction estimates from carbon tax programs are based on multiple assumptions  Accordingly, such estimates provide different tax rates needed to meet a particular emissions target depending on these assumptions  See " Impacts on GHG Emission Levels " for selected analyses of emission reductions for a given carbon price and rate of price increase  Under another approach, policymakers could base the carbon tax rate on the estimated marginal net benefits associated with reduced CO 2 emissions  The net benefits would be the avoided net damages (i e , costs) of climate change  The estimates of net benefits of avoided emissions often rely on analyses of the social cost of carbon (SC-CO 2 ) or the social cost of greenhouse gases (SC-GHG )  Therefore, policymakers could use SC-CO 2 measurements—as the basis for an estimate of the net benefits of a marginal change in emissions—to set the rate of a carbon tax or emissions fee  One potential challenge of relying on SC-CO 2 estimates to set a carbon fee are methodological concerns  For example, the existing estimates in peer-reviewed research cover a wide range  In addition, some argue that the underlying simulation models for estimating the SC-CO 2 values are insufficient  For any level of emissions, the projected increase in global average temperature may cover multiple degrees Fahrenheit, and other measures of climate change, such as precipitation patterns, may encompass directional uncertainties  No estimates of impacts are comprehensive at this time, and many of the risks are difficult to estimate and value  When valuing the SC-CO 2 , analysts encounter a range of views on methods and assumptions, and establishing study parameters may be challenging  For example, estimates of the monetary values of climate change impacts may be difficult or controversial to estimate, such as the monetary values associated with human deaths or sickness  A related framework question is whether to include global climate impacts or just domestic impacts  In addition, the element of time in climate change impacts particularly complicates the valuation  The fact that many impacts of climate change will occur in the distant future requires consideration of society's willingness to pay in the near term to reduce emissions that would cause future damages, mostly to future generations  To take time into account, economists discount future values to a calculated "present value " Economists do not agree on the appropriate discount rate(s) to use for a multi-generational, largely nonmarket issue such as human-induced climate change  The choice of discount rate can significantly increase or decrease values of the SC-CO 2   A low discount rate would give greater value today to future impacts than would a higher discount rate  High discount rates can reduce the value today of future climate change impacts to a small fraction of their undiscounted values  A high discount rate would recommend applying fewer of today's resources to addressing climate change impacts in the future  Since 2008, federal agencies have used SC-CO 2 estimates in dozens of final rulemakings as a method to estimate the net benefits of abating CO 2 emissions  An Interagency Working Group prepared SC-CO 2 estimates, which were updated over time and subjected to expert and public comment  On March 28, 2017, President Trump issued Executive Order 13783, "Promoting Energy Independence and Economic Growth," which effectively withdrew the federal SC-CO 2 estimates  Nonetheless, federal agencies have used new, interim values generated by EPA in 2017, modified from the withdrawn technical support documents, in regulatory and other decisions  Legislation could set a carbon price citing any of these SC-CO 2 values or others available from nonfederal researchers or prescribe methods for estimating new ones  Using SC-CO 2 estimates to set the tax rate would involve a cost-benefit framework  Although many posit that a cost-benefit framework remains the best option, some economists argue that a cost-benefit framework may be inappropriate for climate change policy for these reasons Many experts expect climate change—and policies to address it—to cause nonmarginal changes to economies and ecosystems  The changes are expected to increase disproportionately with incremental climate change with a potential for crossing critical "tipping points" after which systems change dramatically and rapidly  Climate change impacts are multi-generational, and uncertainty and disagreement exists about whether and how to assign a present value to social costs and benefits over generations  Some impacts from climate change may be irreversible on the timescale of human civilizations, such as melting of major ice sheets in Antarctica or Greenland  Policymakers might consider a carbon tax as a fiscal tool to help reduce the federal deficit, reduce other taxes, or pay for specific programs that may or may not be related to climate change policy  In addition, some have proposed a phased-in approach, setting a rate that is initially lower but increases at an announced or adjustable rate either for a fixed period or indefinitely  Advantages of this approach include providing an opportunity for consumers and investors to adjust their behavior before the higher tax rates go into effect, such as purchasing more energy efficient appliances or investing in low-emissions technologies  Phasing in a carbon tax, however, could delay climate-related benefits  If Congress finds agreement in principle on carbon pricing, the rate(s) could emerge from the process of reaching political agreement  Elements that might be considered include the options described above or consideration of the magnitude of overall economic impact; impacts on certain economic sectors, regions, or population groups; timing to motivate and allow an orderly transition to a lower-GHG economy; or other factors  Many stakeholders have voiced concerns over how a U S  carbon price system would interact with policies in other nations, particularly if the United States were to enact a carbon tax system that covers more sources or is more stringent than enacted elsewhere  A central concern is that a U S  carbon tax could raise U S  prices more than the prices of goods manufactured abroad, potentially creating a competitive disadvantage for some domestic businesses  Certain businesses may become less profitable, lose market share, and reduce jobs  The industries generally expected to experience disproportionate impacts under a U S  carbon tax are often described as "emission-intensive, trade-exposed" industries  An industry's CO 2 emission intensity is a function of both direct CO 2 emissions from its manufacturing process (e g , CO 2 from cement or steel production) and indirect CO 2 emissions from the inputs to the manufacturing process (e g , electricity, natural gas)  Such industries are likely to experience greater cost increases than less carbon intensive industries, all else being equal  In general, trade-exposed industries are those that face greater international competition compared to other domestic industries  A carbon tax could present a particular challenge for these industries, because they might be less able to pass along the tax in the form of higher prices, because they may lose global market share—and jobs—to competitors in countries lacking comparable carbon policies  Policymakers might consider approaches to mitigate these potential economic impacts in several ways  One approach that has received interest in recent years is a border adjustment mechanism, which is often described as a border carbon adjustment (BCA) in the carbon tax context  A BCA would apply a tariff to emission-intensive, imported goods such as steel, aluminum, cement, and certain chemicals  Each of the carbon price proposals in the 115 th Congress would have established a BCA to address emission-intensive imports  Another rationale for adding a BCA to a carbon tax system is the possibility that it would encourage other nations to adopt comparable carbon price policies  Many of the recently proposed BCA mechanisms allow for exemptions for nations with comparable programs  To date, no nations have implemented a BCA as part of their climate change policies  Establishing an economically efficient BCA would likely present substantial challenges  For example, policymakers must decide which goods and/or industries would be covered by a BCA and how the adjustment program would assess the comparability of varied climate-related policies in other nations  In addition, accurately determining and verifying the volume of GHG emissions embodied in a particular imported product would be data intensive and challenging  To alleviate some of the measurement complexity, policymakers could limit the program to selected industries and apply default values and assumptions to particular manufacturing processes  However, this simplified approach could result in less accurate import price adjustments, which could potentially affect the accuracy of GHG emission reductions achieved by the carbon tax program  Another option would be to allow companies to provide measured, independently verified emissions data as an alternative to default values  In addition, the border adjustment approach would likely raise concerns of violating international trade rules  Further, some researchers have highlighted the potential for unintended consequences from a BCA  For example, some studies have found that a border adjustment may lead to lower net exports than the carbon price alone, due to the adjustment's terms-of-trade effect on U S  currency  These issues are beyond the scope of this report, but some of the concerns may be lessened to some degree if a larger number of nations establish comparable emission reduction policies, as many have agreed to do under the Paris Agreement  Another possible rationale for a BCA is to address the concern of "emissions leakage" (or "carbon leakage")  Emissions leakage "occurs when economic activity is shifted as a result of the emission control regulation [e g , a carbon tax program] and, as a result, emission abatement achieved in one location that is subject to emission control regulation is [diminished] by increased emissions in unregulated locations " The concern of emissions leakage has been central in the debate over whether the United States (or any nation) should unilaterally address GHG emissions  A BCA may diminish the potential for emissions leakage by reducing the incentive to shift economic activity to a nation without a comparable carbon tax  However, some recent studies raise questions regarding the degree to which emissions leakage would be a concern under a unilateral U S  carbon tax  Although a tax may be levied on fossil fuels or GHG emission sources at various points in the economy, the carbon tax impacts may be experienced elsewhere  Policymakers have multiple options to address these expected impacts  Policymakers would face challenging decisions regarding the distribution of the new carbon tax revenues  As discussed below, some economic analyses indicate that certain distributions of tax revenue—depending on the level of the tax—would have a greater economic impact than the direct effects from the tax or fee on GHG emissions  Carbon tax revenues could be treated as general fund revenue without a dedication to a specific purpose in the enacting legislation (i e , subject to the annual appropriations process), or policymakers could state that the new revenues would support deficit (or debt) reduction  Alternatively, the enacting legislation could return the tax revenue to the economy in some manner, sometimes called "revenue recycling " All of the carbon tax legislative proposals in recent Congresses have proposed some manner of revenue recycling, specifically directing the carbon tax revenue to support specific policy objectives  Carbon tax revenues may be used to support a variety of policy goals  When deciding how to allocate the new revenue stream, policymakers would likely encounter trade-offs among objectives, including: reducing the economy-wide costs resulting from a carbon tax program; alleviating the costs borne by subgroups in the U S  population, particularly low-income households and/or communities most dependent on carbon-intensive economic activity; and supporting specific policy objectives, such as domestic employment, climate change adaptation, energy efficiency, technological advance, energy diversity, or federal deficit reduction, among others  In general, economic carbon tax studies have found that the relative ranking of revenue recycling options to mitigate the economy-wide impacts is generally the opposite of the relative ranking for alleviating distributional impacts  The contrasting relative rankings highlight a central tradeoff policymakers would face when deciding how to allocate carbon tax revenues  The following sections discuss these trade-offs and some of the revenue application options that have received attention in recent years  A large body of economic literature has examined the economic impacts of hypothetical carbon tax programs, particularly the impacts of using the carbon tax revenues for different purposes  Many of the economic studies cited below were prepared prior to the enactment of the Tax Cuts and Jobs Act (TCJA, P L  115-97 )  Signed by President Trump in December 2017, the act changed various elements of the U S  federal tax system  In particular, the act lowered the corporate income tax rate from 35% to 21%  As discussed below, adjusting the corporate income tax rate is one of the central policy options generally considered in carbon tax economic literature both before and after enactment of P L  115-97   Based on a selected review of the economic literature that includes the tax code changes in P L  115-97 , the central conclusions from carbon tax literature regarding revenue recycling appear to be largely unchanged  A primary concern with a carbon tax is the potential economy-wide costs that may result  Generally, a tax or fee on GHG emissions or the fuels that generate them would increase certain energy prices, namely fossil fuels, in the near- to medium-term as well as the prices of goods and services produced using these materials, like electricity  This outcome is inherent to the carbon tax, as its purpose is to increase the relative price of the more carbon-intensive energy sources compared to less carbon-intensive alternatives, encourage innovation in less carbon-intensive technologies, and promote other activity (e g , energy efficiency) that may decrease emissions  These expected outcomes will have some economy-wide impacts  Ultimately, the economy-wide effects would depend on a number of factors, including, but not limited to, the magnitude and scope of the carbon tax and, most importantly, use of the ensuing revenues  Economy-wide costs (referred to as macroeconomic costs) are often measured in terms of changes in projected gross domestic product (GDP) or another societal-scale metric, such as economic welfare  The magnitude of macroeconomic impacts from a carbon tax has been a subject of debate among policymakers and stakeholders  In addition, results of economy-wide impacts will not include comparisons of impacts to different subpopulations or geographic regions, which may be of interest to policymakers  Multiple economic studies and models have examined and compared various options for addressing the economy-wide impacts that may result from a carbon tax  One option for reducing the economic cost of a carbon tax is using the revenue to reduce existing taxes, such as those on labor, income, and investment  Economists generally describe such taxes as distortionary, because the taxes discourage economically beneficial activity, such as employment and investment  Another option for policymakers is to use the tax revenues to address the national debt  Fewer studies have examined deficit reduction scenarios, because "modeling the effects of budget deficits is much more difficult than modeling the effects of tax cuts " Some studies have concluded that using tax revenues for this purpose would help alleviate economy-wide costs from a carbon tax because of the reduced need to impose distortionary taxes in the future  These studies indicate that the economy-wide benefit would be delayed and its realization assumes policymakers would, sometime in the future, address the deficit by raising taxes  Many recent legislative proposals would distribute the carbon tax revenue back to households in lump-sum payments  Policymakers have generally included this carbon tax revenue application to address distribution impacts (discussed below)  These payments could take multiple forms  Economic analyses typically assume an equal payment to individuals or households regardless of their income or location or the effects of the carbon price on them individually  Alternatively, payments could be targeted or scaled to different segments of the population  Among the options mentioned above, economic studies indicate that using carbon tax revenues to offset reductions in existing, distortionary taxes would be the most economically efficient use of the revenues and yield the greatest benefit to the economy overall  This concept is sometimes referred to as a "tax swap " Using carbon tax or fee revenues to offset other distortionary taxes (e g , labor or capital) may yield a "double-dividend," which includes: reduced GHG emissions; and reduced market distortions by reducing other distortionary taxes, such as investment or income  The economic models that examine the economic impacts of a carbon tax differ in their frameworks and underlying assumptions and often include multiple scenarios involving different uses of carbon tax revenue  In general, the economic models find that certain revenue recycling options may reduce the economy-wide carbon tax impacts but may not eliminate them entirely  Some studies cite particular economic modeling scenarios in which a carbon tax with certain revenue recycling applications would produce a net increase in GDP or economic welfare compared to a baseline scenario  These results indicate that, in certain modeling conditions, the economic improvements gained by reducing existing distortionary taxes would be greater than the costs imposed by the new carbon tax (without including the intended climate benefits of the policy)  For example, results from a 2018 study demonstrated a net increase in GDP, compared to baseline conditions, when carbon tax revenues were used to finance proportionate reductions in labor tax rates (payroll tax)  In general, the economic carbon tax studies usually agree on the relative ranking of revenue recycling options in terms of their ability to mitigate the economy-wide impacts of a carbon tax program  The studies indicate that the approaches that use carbon tax revenue to proportionately lower existing tax rates are able to mitigate more of the carbon tax economy-wide costs than using the revenue to provide a lump-sum distribution to individuals or households  Researchers prepared multiple carbon tax analyses prior to the enactment of the TCJA in 2017 that estimated the magnitude GDP impacts  As with other estimates relating to carbon tax impacts, the results depend on the scope of the carbon tax, underlying assumptions in the analytical model, and the terms of measurement: Some estimates measure GDP growth rates; others measure actual GDP  Figure 1 illustrates the modeled GDP results from a 2018 carbon tax analysis that includes the changes made by the TCJA  This study assessed the GDP impacts under a $50/mtCO 2 e carbon tax (starting in 2020 and increasing by 2% annually) that would apply to CO 2 emissions from fossil fuel combustion and methane emissions from fossil fuel production activities  The figure compares projected GDP impacts under a baseline scenario (i e , no carbon tax) with three carbon tax revenue applications: a payroll tax rate reduction tax swap, a lump-sum distribution to households, and a scenario that would use tax revenue to reduce the national debt for 10 years and then use revenues for a lump-sum distribution to households  The figure projects GDP impacts in 2020, 2024, 2029, and 2039  As the figure indicates, the payroll tax rate scenario would result in a 0 1% loss of GDP in the first year (2020), but would yield GDP gains in subsequent years compared to baseline  The lump-sum distribution approach would yield GDP losses each year, ranging from 0 3% to 0 4% below the projected baseline  The deficit reduction approach would yield a range of GDP losses in the first 10 years—ranging from 0 4% to 0 04%—but would yield a GDP gain in 2039 (if not before), compared to baseline  Opponents of a carbon tax approach often highlight the GDP losses that would result from a carbon tax  Policymakers and stakeholders may have different perspectives regarding whether the magnitude of the GDP impacts are significant  In addition, GDP impact estimates may be presented in several ways  For example, one could compare the differences in GDP value for a particular year between carbon tax scenarios and a baseline scenario  This approach is employed in the above figure  Alternatively, one could present the GDP losses with a cumulative measure  For instance, if one were to add up the annual GDP losses (for example, over a 10-year period) from the lump-sum scenario compared to the baseline scenario, the resulting sum would be much larger  These types of calculations would require assumptions about annual GDP growth rates  Some may point out that the GDP impact estimates do not account for the environmental and public health benefits for reducing GHG emissions and that the GDP projections should be compared with the climate benefits achieved from the program as well as the estimated costs of taking no action  As discussed above, estimates of climate-related benefits and costs often contain considerable uncertainty and have generated debate in recent years  Many economic analyses have found that a carbon tax (before revenue recycling) would produce a regressive outcome among households, with lower-income households facing a larger impact from the tax than higher-income households  However, "the degree to which a carbon tax is found to disproportionately burden low-income households varies across studies, based on the metrics against which analysts measure costs " Entities that pay the carbon tax may pass its costs back to fuel producers or forward to fuel consumers  If entities pass the costs forward, consumers would face higher prices for fuels and electricity and carbon-intensive products  When the carbon tax is passed forward to consumers, lower-income households in particular would likely face a disproportionate impact (i e , regressive outcome), because a larger percentage of their income is used to pay for energy needs, such as electricity, gasoline, or home heating oil  Many economic analyses of carbon price scenarios assume that the vast majority (if not all) of the carbon tax impact is passed forward to consumers, leading to a regressive outcome  On the other hand, if entities pass the costs backward to producers, the tax impacts would fall on labor through reduced wages or owners of capital through reduced returns on investment  Economic models that assume this outcome produce more progressive results (absent revenue recycling), with lower-income households experiencing smaller impacts than higher-income households  The economic analyses appear to agree that the distributional effects among households (i e , regressive vs  progressive) of a carbon tax program would be largely dependent on how the carbon tax revenues were used  A number of economic studies have used models to estimate the impacts of a carbon tax across households under several revenue distribution scenarios  The results vary because the studies use different modeling frameworks, carbon tax rates and scopes, underlying assumptions, and ways to measure impacts  For example, a 2018 study assessed the impacts to household income for different household quintiles under a carbon tax of $50/mtCO 2 e, starting in 2020  This study examined four revenue distribution scenarios: 1  reduce federal deficit, 2  reduce corporate income tax rate, 3  reduce payroll tax rate, and 4  provide a per-capita rebate to households  This report highlights this study, because it includes carbon tax revenue applications that have generated interest in recent years  In addition, this analysis was prepared after the 2017 tax rate changes in P L  115-97   Figure 2 illustrates the modeled results, which the study measured as percentage reductions to household income  Thus, negative percentages illustrated in the figure are gains to household income  The per-capita rebate approach provides the most progressive result, yielding a net benefit for the bottom three household quintiles but a net loss for the top quintile  The fourth quintile impact is zero  By comparison, the other approaches produce varying degrees of regressive outcomes while providing a net gain for wealthier groups in two particular instances  Of the four options, the payroll tax rate reduction approach estimates the smallest variance between the income quintiles, ranging from a 0 5% loss for the lowest quintile to a 0 2% gain for the fourth quintile  The fifth quintile impact is zero  The relative ranking among options for progressivity is generally the opposite of the relative ranking for mitigating economy-wide impacts  Other economic analyses have found similar relative rankings of revenue recycling options  The contrasting rankings highlight a central tradeoff policymakers would face when deciding how to allocate carbon tax revenues  Policymakers could allot some portion of the revenues to partially support both objectives  In a 2018 carbon tax study, economic modelers assessed a scenario in which a portion of the revenue was used to offset the welfare impacts for the lowest-income household quintile and the remaining revenue supported reductions in capital tax rates  The study's models estimated that a carbon tax's impacts on the lowest-income household quintile could be counteracted with approximately 10% of the revenue  This would allow for 90% of the revenue to be used to reduce capital tax rates and thus address the economy-wide impacts from the carbon tax  As discussed above, a carbon tax is projected to disproportionately impact certain industries, particularly those that are described as "emission-intensive, trade-exposed industries " To address these concerns, many of the recent carbon tax legislative proposals have included design mechanisms that would attach a carbon price to certain imported materials and products (see " Border Carbon Adjustments ")  Another approach to addressing the competitiveness concerns of domestic industries would involve distributing a portion of the carbon tax revenues to emission-intensive, trade-exposed industries as rebates based on their output  Output rebate proposals generally determine rebate amounts by measuring emissions intensity at the relevant sector level or by a benchmark that would encourage facilities to reduce their emissions intensity  These rebates could be phased out over time or continue until other nations adopt comparable carbon price policies  Under a carbon tax system in Canada, which is scheduled to take effect in 2019, industries will be subject to an "output-based pricing system " Some contend that the data and administrative resources necessary to implement such a program would be substantial  A carbon tax system is also expected to disproportionately impact fossil fuel industries and the communities that rely on their employment  In particular, coal-mining communities are expected to experience substantial impacts based on the coal production declines predicted in carbon tax analyses  For example, one model estimates that under a $50/mtCO 2 e carbon tax, annual U S  coal production would decline by almost 80% in 2030 compared to a reference case  Policymakers may consider supporting worker transition or community transition assistance to help mitigate the economic impacts  Several of the recent carbon tax proposals would have devoted carbon tax revenues for this objective  Policymakers may also consider using the carbon tax revenues to provide funding to support a range of objectives, which may include policy goals that are not directly related to climate change  Some options are identified below, and many have been included in recent legislative proposals or in state GHG mitigation programs that raise revenues: Technology development and deployment: Efforts to reduce the costs of emission mitigation technologies—particularly carbon capture, utilization, and sequestration—are often considered in carbon tax programs, and Congress has funded such programs in other legislation  Energy efficiency programs: Although a carbon tax would likely stimulate energy efficiency to some degree, Congress may consider using the revenues to provide additional incentives and/or technical assistance, particularly to encourage households and small businesses to increase efficiency, which would also reduce the effects of the tax on their energy bills  States in the Regional Greenhouse Gas Initiative (RGGI) have used revenues from the program to support efficiency improvements, among other objectives  Biological sequestration: Trees, plants, and soils sequester carbon, removing it from the earth's atmosphere  Revenues could be used to promote carbon sequestration efforts, particularly forestry or agricultural activities, which would supplement the GHG reductions of the carbon tax  Adaptation to climate change: Regardless of emission reduction efforts taken today, climatic changes are expected due to the ongoing accumulation of GHGs in the atmosphere  Therefore, some advocate using revenues to reduce potential damage—domestically and internationally—of a changing climate  Deficit reduction: The possible contribution of a carbon tax to deficit reduction would depend on the magnitude and scope of the carbon tax, various market factors, and assumptions about the size of the deficit  Some carbon tax proposals in recent congressional sessions would have allotted a portion of revenues for deficit reduction  Infrastructure funding: Some recent proposals have provided funding for infrastructure projects  This objective could be combined with funding for adaptation activities  Multiple economic studies have estimated the emission reductions that particular carbon tax designs could achieve  Economic models provide estimates based on the best information available at the time  Comparing results from different studies is problematic, because the studies' scenarios differ in multiple ways, including the tax rate, start date, scope of the program, assumptions about economic growth and technological advances, and assumptions about other federal and state policies and their effects  A 2018 study avoided some of these comparison difficulties by inviting modeling teams to analyze a coordinated set of scenarios  The 2018 Stanford Energy Modeling Forum study ("EMF 32") assembled 11 modeling teams to analyze the economic impacts of four carbon tax scenarios starting in 2020: a $25/metric ton and $50/metric ton carbon tax, increasing annually by 1% and 5%  Within each of these carbon price frameworks, the models ran separate revenue distribution scenarios: a reduction in labor tax rates, a reduction in capital tax rates, and household rebates  Figure 3 illustrates the study's estimates of CO 2 emissions from fossil fuel combustion  The red lines in the figure display the average values for the 11 models  The shaded areas illustrate the range of results, highlighting the uncertainties in emission reduction estimates  Based on these results, the study authors concluded that each of the tax rate scenarios would likely achieve the U S  CO 2 emission reduction targets under the Paris Agreement  As Figure 3 indicates, a carbon tax or emissions fee could be set with the expectation that it would achieve an emissions reduction target, but the resulting level of emissions would be uncertain  The uncertainty of resulting emissions may lead some stakeholders to disfavor a carbon tax or fee option to control GHG emissions  Although uncertain emissions are inherent with a carbon tax approach, Congress could employ certain design elements to enhance the emission control certainty  For example, the existing GHG emission reporting data could be used to track the impact and performance of a carbon price  If policymakers determine that emission reduction is not occurring at a desired pace, the price could be amended  Legislation could establish the conditions and process by which price changes could occur  Some may argue that adjusting the carbon price to reflect actual emissions performance would undermine the benefits of price certainty  Others may point out that unplanned adjustments to the carbon price could be politically unpalatable  For example, it may be difficult for policymakers to increase the tax rate, especially during periods of high energy prices  Some have suggested that Congress authorize an independent board or agency with the mandate to modify the tax rate administratively in order to meet pre-determined emission reduction objectives  Although this approach would likely improve emission certainty, long-term price certainty may be sacrificed to some degree, depending on the authority of the delegated entity to adjust the tax rate  Some would argue that potential year-to-year emission variations under a carbon tax would not undermine efforts to control climate change so long as long-term emission goals are achieved  Indeed, they would assert that annual emission fluctuations are preferable to price volatility that could result from an emissions cap program  They support their preference for price control by suggesting that CO 2 generates damages through its overall accumulation as concentrations in the atmosphere, not its annual flow  A potential concern of a carbon tax is whether it would be effective in reducing GHG emissions in all of its covered sectors, particularly emissions in the transportation sector  As of 2016, the transportation sector contributes the largest percentage (36%) of CO 2 emissions from fossil fuel combustion, with electric power second at 35%  Carbon tax analyses generally agree that the majority of the emission reductions resulting from a carbon tax program would occur in the electricity sector  By comparison, economic models generally conclude that a carbon tax would have much less of an impact on emissions in the transportation sector  Several factors explain this projected outcome  The transportation sector offers fewer opportunities to switch to less carbon-intensive fuels in the short term than does the electric power sector, which can displace coal with natural gas relatively quickly  In addition, short-term emission changes in the transportation sector are largely influenced by changes in driving demand, which has historically been relatively insensitive to gasoline price increases  Based on these projected outcomes, some may contend that to achieve deeper, long-term reductions in total GHG emissions, policymakers would need to complement a carbon tax with other programs, such as vehicle technology standards (e g , Corporate Average Fuel Economy, CAFE) or fuel performance standards, among other options  The quantity of revenues generated under a carbon tax system depend on the program's design features, namely the tax base and rate, as well as such independent factors as prices in global energy markets  They would also depend on how covered emission sources respond to the carbon price, for example by adopting alternative technologies or changing behavior  Several carbon tax studies have prepared revenue estimates, which are presented in Table 1   From a public finance perspective, a carbon tax may not be a reliable source of long-term funding, because a primary goal of the carbon tax is to reduce its tax base—GHG emissions  The estimates in Table 1 project carbon tax revenue values in 2020  Multiple studies have projected carbon tax revenue trajectories beyond 2020  In the 2018 EMF 32 study, all but one of eight models projected carbon tax revenue increases from 2020 through 2040  The carbon tax scenarios with larger annual rate increases resulted in steeper trajectories of increasing revenues through 2040  The models' estimates of annual carbon tax revenue in 2040 ranged from approximately $250 billion to $475 billion (under the tax rate scenario of $50/metric ton, increasing 5% annually)  Fossil fuels have a wide range of CO 2 emission intensity (i e , emissions per unit of energy)  As illustrated in Figure 4 , the CO 2 emission intensity of coal is approximately 30% more than oil and approximately 80% more than natural gas  These emissions intensity differences would lead to different tax rates per unit of energy across different fuels in a carbon tax regime  Carbon taxes could affect fuel prices in complex ways  The change in consumer fuel prices would likely not be the same as the price paid by the party directly subject to the tax  Actual price impacts for consumers would depend on multiple factors, including whether: a carbon tax is applied at the beginning of the production process ("upstream") to fossil fuels; and the price impacts are passed through to end users and not absorbed by upstream energy producers or midstream entities, such as retailers  In addition, market participants such as electric power plant operators can avoid paying the increased costs by substituting fuels or technologies  Energy consumers may modify their behavior in the marketplace—energy conservation, consuming less or different products and services—to mitigate impacts from the increased prices  Table 2 includes estimates of price increases on coal, crude oil, natural gas, home heating oil, and motor gasoline based on a carbon tax rate of $25/mtCO 2 that applies CO 2 emissions from fossil fuel combustion  As indicated in the table, a carbon tax would have the greatest impact on the price of coal due to coal's relatively high CO 2 emissions intensity  By comparison, a carbon tax is expected to have less of an impact on the price of gasoline, increasing its price by 8%  Economic models have projected how carbon prices would impact energy use, particularly the consumption of different fossil fuels and less carbon-intensive alternatives, such as renewables or nuclear power  For example, the 2018 EMF 32 study, which included results from 11 modeling groups, assessed how several carbon tax scenarios would impact energy consumption  Highlights of these models' results (compared to reference case scenarios) include the following: Coal consumption could decline by 40% to nearly 100% by 2030 under a $50/mtCO 2 carbon tax, though one model projected an increase in coal due to the model incorporating CCS technology  Natural gas consumption estimates vary across the models, with some showing minimal change in 2030 and others showing declines ranging between 40% and 60%  Oil consumption estimates indicate that the largest decline (approximately 4% by 2030) would occur under the $50/mtCO 2 carbon tax scenario  Wind energy consumption could increase by 48% to 300% by 2030 under a $50/mtCO 2 carbon tax scenario  A carbon tax is one policy option to address U S  GHG emission levels, which contribute to climate change and related impacts  Economic modeling indicates that a carbon tax would achieve emission reductions, the level of which would depend on which GHG emissions and sources are covered and the rate of the carbon tax  A carbon tax would generate a new revenue stream  The magnitude of the revenues would depend on the scope and rate of the tax and multiple market factors, which introduce uncertainty in the revenue projections  A 2018 CBO study estimated that a $25/metric ton tax on CO 2 emissions from energy-related activities and other selected GHG emission sources would yield approximately $100 billion in the first year of the program  To put this estimate in context, the CBO projected that total federal revenue would be $3 5 trillion in FY2019  Policymakers would face challenging decisions regarding the distribution of the new carbon tax revenues  Depending on the level of the tax, some economic analyses indicate that the distribution of tax revenue could yield greater economic impacts than the direct impacts of the tax  Some models indicate that the economic impacts are greatest in the early years of the carbon tax  Policymakers could apply the tax revenues to support a range of policy objectives  When deciding how to allocate the revenues, policymakers would encounter trade-offs among objectives  The central trade-offs involve minimizing economy-wide costs, lessening the costs borne by specific groups—particularly low-income households—and supporting a range of specific policy objectives  A primary concern with a carbon tax is the potential economy-wide costs that may result  The potential costs would depend on a number of factors, including the magnitude, design, and use of revenues of the carbon tax  In general, economic literature finds that some of the modeled revenue applications would reduce the economy-wide costs imposed by a carbon tax but may not eliminate them entirely  Policymakers and stakeholders may have different perspectives regarding whether these estimated economy-wide costs (typically measured in terms of GDP loss) represent a significant concern  Some argue that the estimated economy-wide costs should be compared with the policy option of not establishing a carbon tax  This comparison is uncertain as carbon tax analyses do not generally consider the benefits that would be gained by reducing GHG emissions and avoiding climate change and its adverse impacts  Some studies cite particular economic modeling scenarios in which a carbon tax and revenue recycling could produce a net increase in GDP or economic welfare, compared to a baseline scenario  These scenarios involve using carbon tax revenues to offset reductions in existing, distortionary taxes, such as corporate income or payroll taxes  Although the models indicate that these revenue applications would yield the greatest benefit to the economy overall, the models also find that lower-income households would likely face a disproportionate impact under such revenue applications  As lower-income households spend a greater proportion of their income on energy needs, these households are expected to experience disproportionate impacts from a carbon tax if revenues were not recycled back to them in some fashion, such as a lump-sum distribution  Carbon tax revenues that are used to offset the burden imposed on various sectors or specific population groups would not be available to support other objectives  An additional concern with a carbon tax involves potential disproportionate impacts to "emission-intensive, trade-exposed industries " Policymakers could select among several options to address these concerns, either by establishing a border carbon adjustment program or allocating some of the carbon tax revenues to selected industry sectors based on an output-based metric  If other nations were to adopt comparable carbon price policies, this concern may be alleviated to some degree  Relatedly, a carbon tax is projected to disproportionately impact fossil fuel industries, particularly coal, and the communities that rely on their employment  To alleviate these impacts, policymakers could allocate some of the carbon tax revenue to provide transition assistance to employees or affected communities  Table A-1 identifies sources of GHG emissions that account for 0 5% or more of total U S  GHG emissions  The sources are listed in descending order by their percentage contribution  CO 2 emissions from fossil fuel combustion, which accounts for almost 76% of total U S  GHG emissions, are broken down by fossil fuel type: petroleum, coal, and natural gas  The table identifies potential points in the economy at which a carbon tax could be applied  The table lists the approximate number of entities that would be involved with different tax applications  The number of entities listed is current as of the most recent data available and varies accordingly by category  See table notes for details  The right-hand column of the table provides additional comments for some of the emission sources  In some cases the comments discuss potential opportunities for additional GHG emissions coverage at a particular source  In other cases, the comments address potential limitations of covering all of the emissions from a particular source 


Report 2:  To be certified as a HUBZone small business, at least 35% of the small business's employees must generally reside in a HUBZone  In FY2017, the federal government awarded $7 53 billion to HUBZone-certified small businesses  $1 90 billion was awarded with a HUBZone preference ($1 49 billion through a HUBZone set-aside, $65 3 million through a HUBZone sole source award, and $346 9 million through a HUBZone price-evaluation preference); $1 53 billion was awarded to HUBZone-certified small businesses in open competition with other firms; and $4 10 billion was awarded with another small business preference (e g , set-asides and sole source awards for small businesses generally and for 8(a), women-owned, and service-disabled veteran-owned small businesses)  This program allows agencies to set aside contracts for SDVOSBs  Also, federal agencies may award sole source contracts to SDVOSBs so long as the award can be made at a fair and reasonable price, and the anticipated total value of the contract, including any options, is below $4 million ($6 5 million for manufacturing contracts)  For purposes of this program, veterans and service-related disabilities are defined as they are under the statutes governing veterans affairs  In FY2017, the federal government awarded $18 2 billion to SDVOSBs  $6 8 billion was awarded through a SDVOSB set-aside award; $4 3 billion was awarded to a SDVOSB in open competition with other firms; and $7 1 billion was awarded with another small business preference (e g , set-asides and sole source awards for small businesses generally and for HUBZone firms, 8(a) firms, and WOSBs)  Under this program, contracts may be set aside for economically disadvantaged WOSBs in industries in which women are underrepresented and substantially underrepresented  Federal agencies may award sole source contracts to WOSBs so long as the award can be made at a fair and reasonable price, and the anticipated total value of the contract, including any options, is below $4 million ($6 5 million for manufacturing contracts)  In FY2017, the federal government awarded $21 3 billion to WOSBs  $648 9 million was awarded with a WOSB preference ($580 5 million through a WOSB set-aside and $68 4 million through a WOSB sole source award); $7 0 billion was awarded to a WOSB in open competition with other firms; and $13 7 billion was awarded with another small business preference (e g , set-asides and sole source awards for small businesses generally and for HUBZone firms, 8(a) firms, and SDVOSBs)  Federal contracting officers are required to provide the SBA's PCR (or, if a PCR is not assigned, the SBA Area Office serving the procuring activity area) a "reasonable period of time" to review any solicitation requiring submission of a small business subcontracting plan and to submit advisory findings before the solicitation is issued  The PCR's advisory comments regarding the small business subcontracting plan's acceptability must be submitted, in writing, to the appropriate contracting officer within five working days after the plan's receipt  As mentioned previously, the SBA's commercial market representatives help prime contractors find small businesses to perform subcontracts; counsel contractors on their responsibility to maximize subcontracting opportunities for small businesses; and conduct periodic reviews, often in concert with a SBA PCR, of contractors awarded contracts that require an acceptable small business subcontracting plan  Federal agencies may also set aside contracts or make sole source awards to small businesses not participating in any other program under certain conditions  The Department of Transportation's (DOT's) Disadvantaged Business Enterprise (DBE) Program originally began in 1980 as a minority/women's business enterprise program "established by regulation under the authority of Title VI of the Civil Rights Act of 1964 and other nondiscrimination statutes that apply to DOT financial assistance programs " Congress has reauthorized the DBE program several times since its inception; most recently in P L  114-94 , the Fixing America's Surface Transportation Act (FAST-Act)  The FAST-Act provides, that, except to the extent the Secretary of Transportation determines otherwise, not less than 10% of the amounts made available for any program under Titles I (federal-aid highways), II (innovative project finance), III (public transportation) and VI (innovation) of the act and 23 U S  Code 403 (highway safety research and development), shall be expended with DBEs  DOT also has a separate DBE program for airport concessions  A DBE is a for-profit small business owned and controlled by socially and economically disadvantaged individuals  Eligibility for the DBE program differs somewhat from the 8(a) program  For example, under the DBE program, women are presumed to be socially and economically disadvantaged individuals  Also, to be regarded as economically disadvantaged, an individual must have a personal net worth (excluding ownership interest in the firm and equity in his or her primary personal residence) that does not exceed $1 32 million  The DBE must also meet SBA size criteria and have average annual gross receipts not exceeding $23 98 million  Size limits for the airport concessions DBE program are higher  The DBE program's eight objectives are to 1  ensure nondiscrimination in the award and administration of DOT-assisted contracts in the department's highway, transit, and airport financial assistance programs; 2  create a level playing field on which DBEs can compete fairly for DOT-assisted contracts; 3  ensure that the department's DBE program is narrowly tailored in accordance with applicable law; 4  ensure that only firms that fully meet the program's eligibility standards are permitted to participate as DBEs; 5  help remove DBE-participation barriers in DOT-assisted contracts; 6  promote the use of DBEs in all types of federally-assisted contracts and procurement activities conducted by recipients; 7  assist the development of firms that can compete successfully in the marketplace outside the DBE program; and 8  provide appropriate flexibility to recipients of federal financial assistance in establishing and providing opportunities for DBEs  Other federal programs promote subcontracting with small disadvantaged businesses (SDBs)  SDBs include 8(a) participants and other small businesses that are at least 51% unconditionally owned and controlled by socially or economically disadvantaged individuals or groups  Individuals owning and controlling non-8(a) SDBs may have net worth of up to $750,000 (excluding ownership interests in the SDB firm and equity in their primary personal residence)  Otherwise, however, SDBs must generally satisfy the same eligibility requirements as 8(a) firms, although they do not apply to the SBA to be designated SDBs in the same way that 8(a) firms do  Federal agencies must negotiate "subcontracting plans" with the apparently successful bidder or offeror on eligible prime contracts prior to awarding the contract  Subcontracting plans set goals for the percentage of subcontract dollars to be awarded to SDBs, among others, and describe efforts that will be made to ensure that SDBs "have an equitable opportunity to compete for subcontracts " Federal agencies may also consider the extent of subcontracting with SDBs in determining to whom to award a contract or give contractors "monetary incentives" to subcontract with SDBs  As of February 11, 2019, the SBA's Dynamic Small Business Search database included 2,538 SBA-certified SDBs and 100,595 self-certified SDBs  The SBA's 7(j) Management and Technical Assistance program provides "a wide variety of management and technical assistance to eligible individuals or concerns to meet their specific needs, including: (a) counseling and training in the areas of financing, management, accounting, bookkeeping, marketing, and operation of small business concerns; and (b) the identification and development of new business opportunities " Eligible individuals and businesses include "8(a) certified firms, SDBs, businesses operating in areas of high unemployment, or low income or firms owned by low income individuals " In FY2017, the 7(j) Management and Technical Assistance program assisted 4,100 small businesses  The SBA's Surety Bond Guarantee program aims to increase small businesses' access to federal, state, and local government contracting, as well as private-sector contracts, by guaranteeing bid, performance, and payment bonds for small businesses that cannot obtain surety bonds through regular commercial channels  The program guarantees individual contracts of up to $6 5 million and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary  The SBA's guarantee ranges from not to exceed 80% to not to exceed 90% of the surety's loss if a default occurs  In FY2017, the SBA guaranteed 10,397 bid and final surety bonds with a total contract value of more than $6 3 billion  A surety bond is a three-party instrument between a surety (someone who agrees to be responsible for the debt or obligation of another), a contractor, and a project owner  The agreement binds the contractor to comply with the terms and conditions of a contract  If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed  The surety bond reduces the risk associated with contracting  Surety bonds are meant to encourage project owners to contract with small businesses that may not have the credit history or prior experience of larger businesses and may be at greater risk of failing to comply with the contract's terms and conditions  Surety bonds are important to small businesses interested in competing for federal contracts because the federal government requires prime contractors—prior to the award of a federal contract exceeding $150,000 for the construction, alteration, or repair of any building or public work of the United States—to furnish a performance bond issued by a surety satisfactory to the contracting officer in an amount that the officer considers adequate to protect the government  Small business mentor-protégé programs typically seek to pair new businesses with more experienced businesses in mutually beneficial relationships  Protégés may receive financial, technical, or management assistance from mentors in obtaining and performing federal contracts or subcontracts, or serving as suppliers under such contracts or subcontracts  Mentors may receive credit toward subcontracting goals, reimbursement of certain expenses, or other incentives  The federal government currently has several mentor-protégé programs to assist small businesses in various ways  The 8(a) Mentor-Protégé Program is a government-wide program designed to assist small businesses "owned and controlled by socially and economically disadvantaged individuals" participating in the SBA's Minority Small Business and Capital Ownership Development Program (commonly known as the 8(a) program) in obtaining and performing federal contracts  For that purpose, mentors may (1) form joint ventures with protégés that are eligible to perform federal contracts set aside for small businesses; (2) make certain equity investments in protégé firms; (3) lend or subcontract to protégé firms; and (4) provide technical or management assistance to their protégés  The SBA's A ll S mall B usiness Mentor-Protégé Program is a government-wide mentor-protégé program for all small business concerns, consistent with the SBA's mentor-protégé program for participants in the SBA's 8(a) Business Development program  The Department of Defense (DOD) Mentor-Protégé Program , in contrast, is agency-specific  It assists various types of small businesses and other entities in obtaining and performing DOD subcontracts and serving as suppliers on DOD contracts  Mentors may (1) make advance or progress payments to their protégés that DOD reimburses; (2) award subcontracts to their protégés on a noncompetitive basis when they would not otherwise be able to do so; (3) lend money to or make investments in protégé firms; and (4) provide or arrange for other assistance  Other agencies also have agency-specific mentor-protégé programs to assist various types of small businesses or other entities in obtaining and performing subcontracts under agency prime contracts  The Department of Homeland Security (DHS), for example, has a mentor-protégé program wherein mentors may provide protégés with rent-free use of facilities or equipment, temporary personnel for training, property, loans, or other assistance  Because these programs are not based in statute, unlike the SBA and DOD programs, they generally rely upon preexisting authorities (e g , authorizing use of evaluation factors) or publicity to incentivize mentor participation  Currently, more than 1,200 mentor-protégé agreements are in place, even though there are issues with the accuracy and thoroughness of some federal agency records  Since 1978, federal agency heads have been required to establish federal procurement goals, in consultation with the SBA, "that realistically reflect the potential of small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals" to participate in federal procurement  Each agency is required, at the conclusion of each fiscal year, to report its progress in meeting the goals to the SBA  In 1988, Congress authorized the President annually to establish government-wide minimum participation goals for procurement contracts awarded to small businesses and small businesses owned and controlled by socially and economically disadvantaged individuals  Congress required the government-wide minimum participation goal for small businesses to be "not less than 20% of the total value of all prime contract awards for each fiscal year" and "not less than 5% of the total value of all prime contract and subcontract awards for each fiscal year" for small businesses owned and controlled by socially and economically disadvantaged individuals  Each federal agency was also directed to "have an annual goal that presents, for that agency, the maximum practicable opportunity for small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals to participate in the performance of contracts let by such agency " The SBA was also required to report to the President annually on the attainment of the goals and to include the information in an annual report to Congress  The SBA negotiates the goals with each federal agency and establishes a small business eligible baseline for evaluating the agency's performance  The agency head is required to "make consistent efforts to annually expand participation by small business concerns from each industry category " If the SBA and the agency cannot agree on the goals, the agency may submit the case to the Office of Management and Budget (OMB) Office of Federal Procurement Policy (OFPP) for resolution  The small business eligible baseline excludes certain contracts that the SBA has determined do not realistically reflect the potential for small business participation in federal procurement (such as those awarded to mandatory and directed sources), contracts funded predominately from agency-generated sources (i e , non-appropriated funds), contracts not covered by the FAR, acquisitions on behalf of foreign governments, and contracts not reported in the Federal Procurement Data System – Next Generation, or FPDS-NG (such as government procurement card purchases and contracts valued less than $10,000)  These exclusions typically account for 18% to 20% of all federal prime contracts each year  The SBA then evaluates the agencies' performance against their negotiated goals annually, using FPDS-NG data, managed by the U S  General Services Administration (GSA), to generate the small business eligible baseline  This information is compiled into the official Small Business Goaling Report, which the SBA releases annually  Each agency that fails to achieve any proposed prime or subcontract goal is required to submit a justification to the SBA on why it failed to achieve a proposed or negotiated goal with a proposed plan of corrective action  Agencies can take credit in every category that is applicable to the recipient of the contract  For example, "when counting goaling achievements, a contract awarded to a service-disabled Veteran-Owned Woman-Owned Small Business would be counted toward the Small Business (SB) goal, the Service-Disabled Veteran-Owned Small Business (SDVOSB) goal and the Women-Owned Small Business (WOSB) goal  However, these category counts are not summed to triple the total count  The Sum of Parts Does Not Equal the Whole (italics in original) " Over the years, federal government-wide procurement goals have been established for small businesses generally ( P L  100-656 , the Business Opportunity Development Reform Act of 1988, and P L  105-135 , the HUBZone Act of 1997—Title VI of the Small Business Reauthorization Act of 1997); small businesses owned and controlled by socially and economically disadvantaged individuals ( P L  100-656 ); women ( P L  103-355 , the Federal Acquisition Streamlining Act of 1994); small businesses located within a HUBZone ( P L  105-135 ); and small businesses owned and controlled by a service-disabled veteran ( P L  106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999)  The current federal small business procurement goals are at least 23 0% of the total value of all small business eligible prime contract awards to small businesses for each fiscal year; 5 0% of the total value of all small business eligible prime contract awards and subcontract awards to small disadvantaged businesses (including participants in the SBA's 8(a) Program) for each fiscal year; 5 0% of the total value of all small business eligible prime contract awards and subcontract awards to women-owned small businesses; 3 0% of the total value of all small business eligible prime contract awards and subcontract awards to HUBZone small businesses; and 3 0% of the total value of all small business eligible prime contract awards and subcontract awards to service-disabled veteran-owned small businesses  There are no punitive consequences for not meeting these goals  However, the SBA's Small Business Goaling Report is distributed widely, receives media attention, and serves to heighten public awareness of the issue of small business contracting  For example, agency performance as reported in the SBA's Small Business Goaling Report is often cited by Members during their questioning of federal agency witnesses during congressional hearings  As shown in Table 1 , the FY2017 Small Business Goaling Report , using FPDS-NG data, indicates that federal agencies met the federal procurement goal for small businesses generally, small disadvantaged businesses, and service-disabled veteran-owned small businesses in FY2017  Table 1 also provides, for comparative purposes, the percentage of total reported federal contracts (without exclusions) awarded to those small businesses in FY2017  Before awarding a federal contract, the contracting officer must affirmatively determine that the business is responsible to perform the contract  If the contracting officer determines that an apparent successful small business offeror lacks certain elements of responsibility (e g , is unable to fulfill the requirements of a specific government procurement because it lacks capability, competency, capacity, credit, integrity, perseverance, tenacity, or limitations on subcontracting), the officer is required to refer the matter in writing to the SBA for review and a possible Certificate of Competency (COC), even if the next acceptable offer is also from a small business  The COC certifies in writing that the small business meets all required elements of responsibility for the purpose of receiving and performing a specific government contract  The "COC program empowers the SBA to certify to contracting officers as to all elements of responsibility of any small business concern to receive and perform a specific government contract  The COC program does not extend to questions concerning regulatory requirements imposed and enforced by other federal agencies " As mentioned previously, the SBA's commercial market representatives conduct periodic compliance reviews of contractors awarded contracts that require an acceptable small business subcontracting plan  In addition, once the contract is completed, federal agencies are required to pay the contractor on a timely basis and pay interest penalties for late payments  Under specified circumstances, federal agencies may also pay contractors before the contract's payment's due date  The periodic compliance review can take place on-site, at the contracting agency, or virtual  Materials that may be reviewed include the contractor's contract files, correspondence that is directly or indirectly related to the contract, IT systems, subcontracting methods, and procedures  Contractors are selected randomly for audit  The SBA may enter into agreements with other federal agencies to conduct these assessments  The compliance report includes compliant and non-compliant items found during the assessment of the contractor's subcontracting activities and a rating indicating the contractor's level of compliance or non-compliance, ranging from unsatisfactory to outstanding  If any deficiencies are found, the contractor is required to submit, within 30 days of the compliance review rating letter date, a corrective action plan (CAP)  The CAP is submitted to the SBA Area Office via email, or any method designated by the SBA  The commercial market representative conducts a follow-up compliance report within six months to a year of the date the SBA acknowledges receipt of the contractor's CAP to ensure that corrective actions have been taken to eliminate the deficiencies  The SBA keeps the federal agency that awarded the contract informed of the contractor's adherence to correcting the deficiencies  If the contractor refuses to provide or address all deficiencies in the CAP, a delinquent CAP letter is sent advising the contractor that it has 15 days from the letter's date to comply with federal regulations  If an acceptable CAP is not received in the allotted time frame the case is escalated to the SBA's subcontracting program manager who informs the SBA's Office of Government Contracting director and works with the SBA's Office of General Counsel and the federal agency that awarded the contract for resolution or to begin accessing liquidated damages  Once a contract is awarded, federal agencies are generally required to pay interest to prime contractors on any invoice payments the agency fails to make by the date(s) specified in the contract, or within 30 days of receipt of a proper invoice for the amount due if no date is specified in the contract  Similar requirements exist for prime contractors in paying subcontractors on construction contracts  These requirements are especially important for small businesses in the construction industry  Specifically, every construction contract awarded by a federal agency must contain clauses obligating the prime contractor to (1) pay the subcontractor for "satisfactory performance" under the subcontract within seven days of receiving payment from the agency and (2) pay interest on any amounts that are not paid within the proper time frame  The contract must also obligate the prime contractor to include similar payment and interest penalty terms in its subcontracts, as well as require its subcontractors to impose these terms on their subcontractors  This latter provision ensures that the payment and interest penalty requirements flow down to all tiers of construction subcontractors  In addition, required subcontracting plans must incorporate terms obligating the prime contractor to notify the agency awarding the contract in writing if a subcontractor is paid a reduced price for goods supplied or services completed under the contract, or if payment is made to the subcontractor more than 90 days past due  The prime contractor must include the reason for the reduction in payment or failure to pay a subcontractor within 90 days  If the contracting officer for a covered contract (a contract that requires an acceptable subcontracting plan) determines that a prime contractor has a history of unjustified, untimely payments to contractors, the contracting officer shall record the contractor's identity, describe the circumstances under which the contractor may be determined to have a history of unjustified, untimely payments to subcontractors, and include the contractor's identity in, and make publicly available through, the Federal Awardee Performance and Integrity Information System, or any successor  This information is used by federal agencies to "evaluate the business ethics and quality of prospective contractors competing for Federal contracts and to protect taxpayers from doing business with contractors that are not responsible sources " Federal agencies are permitted to make an accelerated payment up to seven days before the required payment date in a federal contract, or earlier if the agency deems it necessary on a case-by-case basis if, after receiving a proper invoice, it is in the best interest of the government, and any of the following is true: the invoice in under $2,500; the payment is to a small business; or the payment is related to an emergency, disaster, or military deployment  In addition, the Secretary of Defense is required, to the fullest extent permitted by law, to establish an accelerated payment date for its small business prime contractors, with a goal of 15 days after receipt of a proper invoice for the amount due if a specific payment date is not established by contract  The Secretary of Defense is also required to establish, to the fullest extent permitted by law, an accelerated payment date for its prime contractors that subcontract with small businesses, with a goal of 15 days after receipt of a proper invoice for the amount due if a specific payment date is not established by contract and the prime contractor agrees to make payments to the subcontractor "in accordance with the accelerated payment date, to the maximum extent practicable, without any further consideration from or fees charged to the subcontractor " The small business contracting programs described in this report generally have strong bipartisan support  However, that does not mean that these programs face no opposition or that issues have not been raised concerning the impact or operations of specific programs  For example, small business advocates seek policies that reduce or eliminate exclusions that narrow the reach of small business contracting preferences, want the SBA to use the total value of all prime contract awards in the Small Business Goaling Report, and want the SBA to use a more discerning methodology for awarding performance grades to federal agencies in meeting its small business contracting goals  Critics have questioned some of these programs' effectiveness, in terms of both promoting small business opportunities to win federal contracts and a more diversified, robust economy  Many observers judge the relative success or failure of federal efforts to enhance small business contracting opportunities by whether the federal government and individual federal agencies meet the procurement goals in the annual Small Business Goaling Report  In recent years, the federal government has generally succeeded in meeting the government-wide goals of awarding 23% of the total value of all small business eligible prime contract awards to small businesses generally, 5% to SDBs, and 3% to SDVOSBs  However, it has had difficulty meeting the goals of 5% to WOSBs and 3% to HUBZone small businesses  The Small Business Goaling Report is the most convenient measure available to compare federal small business contracting performance over time, but it has limitations  For example, the report does not include all federal contracts, because some are not deemed to be small business eligible and others are not recorded in the FPDS-NG  In addition, the report does not evaluate the effect these contracts have on small businesses, industry competitiveness, or the overall economy  As one group of researchers has argued, the entire goal-setting process … is geared to measuring the dollars and contracts awarded to small business, and pays little attention to the effect that access to government contracts has on small business starts, growth, and wealth generation  Results of the program are also hard to isolate, difficult to measure, and generally not judged against the next best or other alternative policies [emphasis in original]  Comprehensive studies examining the effect of small business contracting preferences on small business startups, growth, wealth generation, and industry competitiveness may prove useful for congressional oversight  In the meantime, although the Small Business Goaling Report has its limitations, it can help policymakers identify programs most in need of examination  For example, the SBA has announced that it is focusing additional efforts on promoting the HUBZone program to federal contracting officials, primarily due to the continuing difficulties federal agencies have had in meeting the 3% goal for HUBZone small businesses 

ground_truth: The U.S. Fourth National Climate Assessment, released in 2018, concluded that "the impacts of global climate change are already being felt in the United States and are projected to intensify in the future—but the severity of future impacts will depend largely on actions taken to reduce greenhouse gas [GHG] emissions and to adapt to the changes that will occur." Members of Congress and stakeholders articulate a wide range of perspectives over what to do, if anything, about GHG emissions, future climate change, and related impacts. If Congress were to consider establishing a program to reduce GHG emissions, one option would be to attach a price to GHG emissions with a carbon tax or GHG emissions fee. In the 115th Congress, Members introduced nine bills to establish a carbon tax or emissions fee program. However, many Members have expressed their opposition to such an approach. In particular, in the 115th Congress, the House passed a resolution "expressing the sense of Congress that a carbon tax would be detrimental to the United States economy." Multiple economic studies have estimated the emission reductions that particular carbon tax would achieve. For example, a 2018 study analyzed various impacts of four carbon tax rate scenarios: a $25/metric ton of CO2 and $50/metric ton of CO2 carbon tax, increasing annually by 1% and 5%. The study concluded that each of the scenarios would likely achieve the U.S. GHG emission reduction target pledged under the international Paris Agreement (at least in terms of CO2 emissions). A carbon tax system would generate a new revenue stream, the magnitude of which would depend on the scope and rate of the tax, among other factors. In 2018, the Congressional Budget Office (CBO) estimated that a $25/metric ton carbon tax would yield approximately $100 billion in its first year. CBO projected that federal revenue would total $3.5 trillion in FY2019. Policymakers would face challenging decisions regarding the distribution of the new carbon tax revenues. Congress could apply revenues to support a range of policy objectives but would encounter trade-offs among the objectives. The central trade-offs involve minimizing economy-wide costs, lessening the costs borne by specific groups—particularly low-income households and displaced workers in certain industries (e.g., coal mining)—and supporting other policy objectives. A primary argument against a carbon tax regards it potential economy-wide impacts, often measured as impacts to the U.S. gross domestic product (GDP). Some may argue that projected impacts should be compared with the climate benefits achieved from the program as well as the estimated costs of taking no action. The potential impacts would depend on a number of factors, including the program's magnitude and design and, most importantly, the use of carbon tax revenues. In general, economic literature finds that some of the revenue applications would reduce the economy-wide costs from a carbon tax but may not eliminate them entirely. In addition, some studies cite particular economic modeling scenarios in which certain carbon tax revenue applications produce a net increase in GDP compared to a baseline scenario. These scenarios involve using carbon tax revenues to offset reductions in other tax rates (e.g., corporate income or payroll taxes). Although economic models generally indicate that these particular revenue applications would yield the greatest benefit to the economy overall, the models also find that lower-income households would likely face a disproportionate impact under such an approach. As lower-income households spend a greater proportion of their income on energy needs (electricity, gasoline), these households are expected to experience disproportionate impacts from a carbon tax if revenues were not recycled back to them in some fashion (e.g., lump-sum distribution). A price on GHG emissions could create a competitive disadvantage for some industries, particularly "emission-intensive, trade-exposed industries." Policymakers have several options to address this concern, including establishing a "border carbon adjustment" program, which would levy a fee on imports from countries without comparable GHG reduction programs. Alternatively, policymakers could allocate (indefinitely or for a period of time) some of the carbon tax revenues to selected industry sectors or businesses. Relatedly, a carbon tax system is projected to disproportionately impact fossil fuel industries, particularly coal, and the communities that rely on their employment. To alleviate these impacts, policymakers may consider using some of the revenue to provide transition assistance to employees or affected communities.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.



Report 2: The Secret Service plays a critical role in protecting the President, Vice President, their immediate families, and national leaders, among others  In addition, the component is responsible for safeguarding the nation’s currency and financial payment systems  To accomplish its mission, Secret Service officials reported that, as of June 2018, the component had approximately 7,100 employees (including the Uniformed Division, special agents, and administrative, professional, and technical staff)  These employees were assigned to the component’s headquarters in Washington, D C , and 133 field offices located throughout the world (including 115 domestic offices and 18 international offices)  The Secret Service’s employees are heavily dependent on the component’s IT infrastructure and communications systems to perform their daily duties  According to data reported on the Office of Management and Budget’s IT Dashboard, the component planned to spend approximately $104 8 million in fiscal year 2018 to modernize and maintain its IT environment  To manage this IT environment, the Secret Service hired a full-time CIO in November 2015  In addition, in an effort to improve its management structure, the component consolidated all IT staff and assets under this new CIO in March 2017  OCIO officials stated that these staff include the government employees who provide direct and indirect support of the day-to-day operations of the Secret Service’s enterprise systems and services  According to Secret Service officials, the component’s IT workforce included 190 staff, as of July 2018  These officials stated that 166 of these employees were located in the component’s headquarters in Washington, D C , and 24 were located in domestic field offices  The officials also reported that these July 2018 staffing levels were below their current approved staffing level of 220 staff (which included 44 positions in domestic field offices)  Secret Service IT staff also deploy to other locations, as necessary, to provide support for certain security activities  For example, the Secret Service reported that, in 2017, OCIO deployed over 79 staff to New York, N Y , to provide communications support during the United Nations General Assembly  As a component of DHS, the Secret Service must follow the department’s policies and processes for managing acquisitions, including IT acquisitions  DHS categorizes its acquisition programs according to three levels that are determined by the life cycle costs of the programs  These levels then determine the extent of required program and project management and the acquisition decision authority (the individual responsible for management and oversight of the acquisition)  The department also categorizes its acquisition programs as major or non- major based on expected cost  Table 1 describes the levels of DHS’s acquisition programs and their associated acquisition decision authorities  DHS’s policies and processes for managing major acquisition programs are primarily set forth in its Acquisition Management Directive 102-01 and Acquisition Management Instruction 102-01-001  In particular, these policies establish that a major acquisition program’s decision authority is to review the program at a series of predetermined acquisition decision events to assess whether the program is ready to proceed through the acquisition life cycle phases  Figure 1 depicts the acquisition life cycle established in DHS acquisition management policy  DHS’s Acquisition Management Directive and Instruction do not establish an acquisition life cycle framework for the department’s non-major acquisition programs  Instead, according to the Instruction, Component Acquisition Executives (i e , the senior acquisition official within a component that is responsible for implementation, management, and oversight of the component’s acquisition process) are required to establish component-specific non-major acquisition policies and guidance that support the “spirit and intent” of the department’s acquisition policies  To that end, the Secret Service developed a policy that establishes an acquisition life cycle framework for its non-major acquisition programs  This acquisition framework for the component’s non-major acquisition programs is consistent with the acquisition framework that DHS established for its major acquisition programs  In particular, the Secret Service’s framework includes the same phases and decision events as DHS’s framework (e g , acquisition decision event 2A, the point at which the acquisition decision authority determines whether a program may proceed into the obtain phase)  In addition, DHS’s Systems Engineering Life Cycle Instruction and Guidebook outline a framework of major systems engineering activities and technical reviews that are to be conducted by all DHS programs and projects, both major and non-major  This framework is intended to ensure that appropriate systems engineering activities are planned and implemented, and that a program’s development effort is meeting the business need  In particular, the systems engineering life cycle framework consists of nine major activities (e g , requirements definition, integration, and testing) and a set of related technical reviews (e g , preliminary design review) and artifacts (e g , requirements documents)  DHS policy allows programs to tailor these activities, technical reviews, and artifacts based on the unique characteristics of the program (e g , scope, complexity, and risk)  For example, a program may combine systems engineering technical reviews and artifacts, or add additional reviews  This tailored approach must be documented in a program’s systems engineering life cycle tailoring plan  The systems engineering technical reviews are intended to provide DHS the opportunity to determine how well a program has completed the necessary systems engineering activities  Each technical review includes a minimum set of exit criteria that must be satisfied before a program may move on to the next systems engineering activity  At the end of the technical review, the program manager must develop a technical review completion letter that documents the outcome of the review, including stakeholder concurrence that the exit criteria were satisfied  Moreover, DHS’s agile instruction, which was first issued in April 2016 and updated in April 2018, identifies agile as the preferred development approach for the department’s IT programs and projects  Agile is a type of incremental (i e , modular) development, which calls for the rapid delivery of software in small, short increments rather than in the typically long, sequential phases of a traditional waterfall approach  DHS’s agile instruction also states that component CIOs are to set modular (i e , incremental) outcomes and target measures to monitor progress in achieving agile implementation for IT programs and projects  To that end, the department identified core metrics that its agile IT programs are to use to monitor progress, including the number of story points completed per release and the number of releases per quarter  Further, DHS policy and guidance have established an acquisition (i e , contract) review process that is intended to enable the DHS CIO to review and effectively guide the department’s IT expenditures  According to the department’s IT acquisition review guidance, DHS components with a CIO (which includes the Secret Service) are to submit to DHS OCIO for review, IT acquisitions that (1) have total estimated procurement values of $2 5 million or more; and (2) are funded by a level 1, 2, or 3 program with a life cycle cost estimate of at least $50 million (i e , a major investment, as defined by DHS’s capital planning and investment control guidance)  DHS policies and guidance also establish numerous responsibilities for the department’s component-level CIOs that are aimed at ensuring proper oversight and management of the components’ IT investments  Among other things, these component-level CIO responsibilities relate to topics such as IT budgeting, portfolio management, and oversight of programs’ systems engineering life cycles  Table 2 identifies 14 selected IT oversight responsibilities for DHS’s component CIOs  The Secret Service acquires IT infrastructure and services that are intended to improve its ability to execute its investigation and protection missions  According to data reported on the Office of Management and Budget’s IT Dashboard, the Secret Service planned to spend about $104 8 million on IT in fiscal year 2018, which included approximately $34 6 million for the development and modernization of its IT infrastructure and services, and about $70 2 million for the operations and maintenance of this infrastructure (including 21 existing IT systems)  Also according to data reported on the IT Dashboard, as of April 2018, the Secret Service had one major IT investment (called the Information Integration and Technology Transformation and discussed in more detail later in this report), seven non-major IT investments, and one non- standard infrastructure investment  Figure 2 depicts the Secret Service’s planned IT spending for fiscal year 2018  The Secret Service has faced long-standing challenges in managing its IT infrastructure  For example, A National Security Agency audit of the Secret Service’s IT environment in 2008 identified network and system vulnerabilities that needed immediate remediation to protect the component’s systems and electronic information  The Secret Service determined in 2010 that it had IT capability gaps associated with three key areas: network security, information sharing and situational awareness, and operational communications  The component reported that it required a significant IT modernization effort with sustained investment of resources to replace dated and restrictive network and communications capabilities  The Secret Service also reported in 2010 that it had 42 mission- support applications that were operating on a 1980’s mainframe that lacked multi-level security (i e , the ability to view classified information from two security levels, such as secret and top secret, at the same time), was beyond its equipment life cycle, and was at risk of failing  Further, in 2011, DHS’s Office of Inspector General reported that the Secret Service’s existing infrastructure did not meet current operational requirements  According to the Secret Service, this dated infrastructure was unable to support newer technologies (e g , Internet protocol), share common DHS enterprise services, or migrate to the department’s consolidated data centers  To address challenges with its IT environment, in 2009, the Secret Service initiated the IITT investment, which is intended to modernize and enhance the component’s infrastructure, communications systems, applications, and processes  In particular, IITT is a portfolio of programs and projects that are meant to, among other things, improve systems availability in support of the Secret Service’s business operations, increase interoperability with other government systems and networks, enhance the component’s system and network security, and enable scalability to support growth  From 2010 to July 2018, according to OCIO officials, the Secret Service spent approximately $392 million on IITT  In fiscal year 2018, the component had planned to spend approximately $42 7 million on IITT (i e , about 40 percent of its total planned IT spending for the fiscal year), according to data reported on the Office of Management and Budget’s IT Dashboard  In total, the planned life cycle cost estimate for IITT is at least $811 million  As of June 2018, IITT was a major investment comprised of two programs (one of which included three projects) and one standalone project (i e , it was not part of another program) that had capabilities that were in planning or development and modernization  These programs and project were the Enabling Capabilities program, Enterprise Resource Management System program (which included three projects that were each being implemented using an agile methodology: Uniformed Division Resource Management System, Events Management, and Enterprise-wide Scheduling), and the Multi-Level Security project  Table 3 describes the IITT programs and projects that had capabilities that were in planning or development and modernization, as of June 2018  The table also includes the associated level, acquisition decision authority, estimated life cycle costs, and planned or actual dates of operational capability for each of the programs and projects  (Appendix II also provides additional information on these programs and projects ) The Enabling Capabilities program within IITT is designated as a major acquisition program  As such, its acquisition decision authority is the DHS Under Secretary for Management, and both DHS and the Secret Service provide oversight to this program  IITT’s other program and project—the Enterprise Resource Management System program (which includes three projects, as discussed earlier) and Multi-Level Security project—are designated non-major acquisition programs  In June 2011, DHS’s Under Secretary for Management delegated acquisition decision authority for this non-major program and project to the Secret Service Component Acquisition Executive  As such, oversight of the Enterprise Resource Management System program (including its three projects) and the Multi- Level Security project is conducted primarily at the component level  The Secret Service also implemented other capabilities that are now in operations and maintenance (i e , the capabilities have been fielded and are operational) as part of the IITT investment, such as a capability to move data between systems in separate classification levels (e g , top secret and secret) and communications interoperability  Table 4 describes IITT capabilities that are in operations and maintenance  DHS, including the Secret Service, has faced long-standing challenges in effectively managing its workforce  In January 2003, we designated the implementation and transformation of DHS as high risk, including its management of human capital, because it had to transform 22 agencies—several with major management challenges—into one department  This represented an enormous and complex undertaking that would require time to achieve in an effective and efficient manner  Since that time, the department has made important progress in strengthening and integrating its management functions  Nevertheless, we have continued to report that significant work remains for DHS to improve these management functions  Among other things, we previously reported that the department had lower average employee morale than the average for the rest of the federal government  We also reported that, in 2011, based on employee responses to the Office of Personnel Management’s Federal Employee Viewpoint Survey—a tool that measures employees’ perceptions of whether and to what extent conditions characterizing successful organizations are present in their agency—DHS was ranked 31st out of 33 large agencies on the Partnership for Public Service’s Best Places to Work in the Federal Government rankings  The most recent results of these surveys in 2017 showed that DHS continues to maintain its low rankings  DHS’s Office of Inspector General has reported on challenges that the Secret Service has faced in managing its IT workforce  Specifically, in October 2016, the Inspector General reported that the Secret Service CIO did not have oversight of, or authority over, all IT resources, including the workforce; in particular, almost all of the component’s IT employees were located in a division outside of OCIO; and the Secret Service had vacancies in key positions responsible for managing IT, including not having a full-time CIO from December 2014 through November 2015  As previously discussed, the Secret Service has taken actions to address these two issues with the management of its IT workforce  These actions included hiring its full-time CIO in November 2015 and consolidating the workforce and all IT assets under this CIO in March 2017  Of the 14 selected responsibilities established for component-level CIOs in DHS’s IT management policies, the Secret Service CIO had fully implemented 11 responsibilities and had partially implemented 3 responsibilities  Table 5 summarizes the extent to which the Secret Service CIO had implemented each of the 14 responsibilities  The Secret Service CIO fully implemented 11 of the 14 selected component-level CIO responsibilities  Examples of the responsibilities that the CIO fully implemented are as follows: Develop, implement, and maintain a detailed IT strategic plan  Consistent with DHS’s IT Integration and Management directive, in January 2017, the Secret Service CIO developed an IT strategic plan that outlined the CIO’s strategic IT goals and objectives, as well as tasks intended to meet the goals and objectives  The CIO maintained this strategic plan, to include updating it in January 2018  The CIO also took steps to implement the tasks identified within the strategic plan, such as working to develop an IT training program  In particular, as part of this effort to develop an IT training program, OCIO identified recommended training for the office’s various IT workforce groups (discussed in more detail later in this report)  Concur with each program’s and/or project’s systems engineering life cycle tailoring plan  In accordance with DHS’s Systems Engineering Life Cycle instruction, the Secret Service CIO concurred with the systems engineering life cycle tailoring plan for one program and three projects included in the Secret Service’s IITT investment  Specifically, the CIO documented his approval via his signature on the tailoring plans for IITT’s Enabling Capabilities program, and Multi-Level Security, Uniformed Division Resource Management System, and Events Management projects  Participate on DHS’s CIO Council, Enterprise Architecture Board, or other councils/boards as appropriate, and appoint employees to serve when necessary  As required by DHS’s IT Integration and Management directive, the Secret Service CIO participated on two required DHS-level councils/boards, and appointed a delegate to serve in his place, when necessary  Specifically, the Secret Service CIO or the CIO’s delegate—the Deputy CIO—attended bi-monthly meetings of the DHS CIO Council  In addition, another Secret Service CIO appointee—the component’s Chief Architect—attended an ad hoc meeting of the Enterprise Architecture Board in June 2017  In addition, the Secret Service CIO had partially implemented three component-level CIO responsibilities, as follows  Manage the component IT investment portfolio, including establishing a component-level IT acquisition review process that enables component and DHS review of component acquisitions (i e , contracts) that contain IT  As directed in DHS’s Capital Planning and Investment Control directive and guidebook, the Secret Service CIO took steps to manage the component’s IT investment portfolio, including reviewing certain contracts containing IT  For example, among our random sample of 33 IT contracts that the Secret Service awarded between October 1, 2016, and June 30, 2017, we found that the CIO or the CIO’s delegate had reviewed 31 of these contracts  However, the CIO had not established and documented a defined process for reviewing contracts containing IT, which may have contributed to why the CIO or the CIO’s delegate did not review 2 of the 33 contracts in our sample  OCIO officials were unable to explain why neither of these officials reviewed the 2 contracts, which had a combined planned total procurement value of approximately $1 75 million  In particular, one of the contracts, with a planned total procurement value of about $1,122,934, was to provide credentialing services for the 2017 Presidential Inauguration  The other contract, with a planned total procurement value of about $629,337, was to provide maintenance support for a logistics system  The OCIO officials acknowledged that both contracts should have been approved by one of these officials  Without establishing and documenting an IT acquisition review process that ensures that the CIO or the CIO’s delegate reviews all contracts containing IT, as appropriate, the CIO’s ability to analyze the contracts to ensure that they are a cost-effective use of resources and are aligned with the component’s missions and goals is limited  Ensure all component IT policies are in compliance and alignment with DHS IT directives and instructions  As required by DHS’s IT Integration and Management directive, the Secret Service CIO had ensured that certain component IT policies were in compliance and alignment with DHS IT directives and instructions  For example, in alignment with the department’s IT Integration and Management directive, the Secret Service’s Investment Governance for IT policy specifies that the component CIO (in conjunction with each Secret Service Office) is responsible for developing the component IT spend plan, as well as developing and maintaining an IT strategic plan  However, the Secret Service’s enterprise governance policy was not in compliance with DHS’s IT Integration and Management directive  Specifically, while the department’s policy states that the Secret Service CIO is responsible for developing and reviewing the component’s IT budget formulation and execution, the Secret Service’s enterprise governance policy does not specify this as the CIO’s responsibility  According to OCIO officials, the Secret Service CIO participates in the development and review of the IT budget formulation and execution as a member of the Executive Resources Board (the Secret Service’s highest-level governing body, which has the final decision authority and responsibility for enterprise governance), and the Secret Service Deputy CIO is a voting member of the Enterprise Governance Council (the Secret Service’s second-level governance body and advisory council to the Executive Resources Board)  However, the Secret Service’s enterprise governance policy has not been updated to reflect these roles  The Secret Service did not update its enterprise governance policy to properly reflect the CIO’s and Deputy CIO’s roles on the Executive Resources Board or Enterprise Governance Council because OCIO officials were not aware that these roles were not properly documented in the component’s policy until we identified this issue during our review  Further compounding the issue of the Secret Service’s enterprise governance policy not properly reflecting the CIO’s and Deputy CIO’s roles and responsibilities on the component’s governance boards is that the Secret Service has not developed a charter for its Executive Resources Board  We have previously reported that a best practice for effective investment management is to define and document the board’s membership, roles, and responsibilities  One such way to do so is via a charter  According to Secret Service officials, the component does not have a charter for the board because, while the Secret Service has established the board pursuant to law, there is little statutory guidance on how the board must be formalized, including whether a charter is required  The officials acknowledged that development of a board charter is a best practice  They stated that, in response to our review, the component has begun efforts to develop a charter for the Executive Resources Board, but they did not know when it would be completed  Until the Secret Service updates its enterprise governance policy to specify (1) the CIO’s current role and responsibilities on the Executive Resources Board, to include developing and reviewing the IT budget formulation and execution, and (2) the Deputy CIO’s role and responsibilities on the Enterprise Governance Council, the CIO’s ability to develop and review the component’s IT budget may be limited  Further, until the Secret Service develops a charter for its Executive Resources Board that specifies the roles and responsibilities of all board members, including the CIO, the Secret Service will not be effectively positioned to ensure that all members understand their roles and responsibilities on the board and will perform them as expected  Set modular outcomes and target measures to monitor the progress in achieving agile implementation for IT programs and/or projects within their component  Consistent with DHS policy, the Secret Service CIO has set modular outcomes and target measures to monitor the progress of two IITT projects that the component is implementing using an agile methodology—Uniformed Division Resource Management System and Events Management  For example, the modular outcomes set for these projects included measuring planned and actual burndown (i e , the number of user stories completed)  In addition, the projects were to measure their velocity (i e , the rate of work completed) for each sprint (i e , a set period of time during which the development team is expected to complete tasks related to developing a piece of working software)  However, the modular outcomes and target measures did not include product quality or post-deployment user satisfaction, although such measures are leading practices for managing agile projects  According to Secret Service OCIO officials, the component does not mandate the specific metrics that its agile projects are to use; instead, each project is to determine the metrics based on stakeholder requirements and unique project characteristics  The officials further stated that these metrics are to be documented in an acquisition program baseline and program management plan; this baseline and program management plan are then to be approved by the CIO  To its credit, the component’s one agile project that, as of May 2018, had deployed its system to users—the Uniformed Division Resource Management System—did measure product quality  OCIO officials also stated that they regularly receive verbal, undocumented feedback from users on the system and they plan to conduct a documented user satisfaction survey on this system by September 2018  Nevertheless, without ensuring that product quality and post- deployment user satisfaction metrics are included in the modular outcomes and target measures that the CIO sets for monitoring agile projects, the Secret Service lacks assurance that the Events Management project or other future agile projects will measure product quality or post-deployment user satisfaction  Without guidance specifying that agile projects track these metrics, the projects may not do so and the CIO may be limited in his knowledge of the progress being made on these projects  Workforce planning and management is essential for ensuring that federal agencies have the talent, skill, and experience mix they need to execute their missions and program goals  To help agencies effectively conduct workforce planning and management, the Office of Personnel Management, the Chief Human Capital Officers Council, DHS, the Secret Service, and we have identified numerous leading practices related to five workforce areas: strategic planning, recruitment and hiring, training and development, employee morale, and performance management  Table 6 identifies the five workforce areas and 15 selected leading practices associated with these areas (3 practices within each area)  Of the five selected workforce planning and management areas, the Secret Service had substantially implemented two of the areas and minimally implemented three of the areas for its IT workforce  In addition, of the 15 selected leading practices associated with these workforce planning and management areas, the Secret Service had fully implemented 3 practices, partly implemented 8 practices, and did not implement any aspects of 4 practices  Table 7 summarizes the extent to which the Secret Service had implemented for its IT workforce the five selected workforce planning and management areas and 15 selected leading practices associated with those areas, as of June 2018  Strategic workforce planning is an essential activity that an agency needs to conduct to ensure that its human capital program aligns with its current and emerging mission and programmatic goals, and that the agency is able to meet its future needs  We previously identified numerous leading practices related to IT strategic workforce planning, including that an organization should (1) establish and maintain a strategic workforce planning process, including developing all competency and staffing needs; (2) regularly assess competency and staffing needs, and analyze the IT workforce to identify gaps in those areas; and (3) develop strategies and plans to address gaps in competencies and staffing  The Secret Service minimally implemented the three selected leading practices associated with the IT strategic workforce planning area  Specifically, the component partly implemented two of the practices and did not implement one practice  Table 8 lists these selected leading practices and provides our assessment of the Secret Service’s implementation of the practices  Establish and maintain a strategic workforce planning process, including developing all competency and staffing needs—partly implemented  The Secret Service took steps to establish a strategic workforce planning process for its IT workforce  For example, the Secret Service CIO developed and maintained a plan that identified strategic workforce planning tasks, to include analyzing the staffing requirements of the IT workforce  In addition, the Secret Service defined general core competencies (e g , communication and customer service) for its workforce, including IT staff  However, OCIO did not identify all required knowledge and skills needed to support this office’s functions  In particular, while OCIO identified certain technical competencies that its IT workforce needs, such as cybersecurity, the office did not identify and document all of the technical competencies that it needs  OCIO officials stated that they did not identify and document the technical competencies that the office needs because the Secret Service was focused on reorganizing the IT workforce under a single, centralized reporting chain within the CIO’s office  Consequently, the officials stated that they had not completed the work to identify all required IT knowledge and skills necessary to support the office  Yet, the Secret Service completed the IT workforce reorganization effort over a year ago, in March 2017 and, since then, OCIO has not identified all of the required IT knowledge and skills that the office needs  OCIO officials told us that they plan to identify all of the technical competency needs for the IT workforce, but they were unable to specify a time frame for when these needs would be fully identified  Until OCIO identifies all of the required knowledge and skills for the IT workforce, the office will be limited in its ability to identify and address any competency gaps associated with this workforce  In addition, the Secret Service did not reliably determine the number of IT staff that it needs in order to support OCIO’s functions  Specifically, in January 2017, an independent review of the staffing model that the component used to identify its IT workforce staffing needs found that the model was not based on any verifiable underlying data  In late August 2018, Office of Human Resources officials reported that they had hired a contractor in early August 2018 to update the staffing model to improve the quality of the data  These officials expected the contractor to finish updating the model by August 2019  The officials plan to use the updated model to identify the Secret Service’s IT workforce staffing needs for fiscal year 2021  Updating the staffing model to incorporate verifiable workload data should increase the likelihood that the Secret Service is able to appropriately identify its staffing needs for its IT workforce  Regularly assess competency and staffing needs, and analyze the IT workforce to identify gaps in those areas—not implemented  The Secret Service regularly assessed the competency and staffing needs for 1 of the occupational series within its IT workforce (i e , the 2210 IT Specialist series)  However, it did not regularly assess the competency and staffing needs for the remaining 11 occupational series that are associated with the component’s IT workforce, nor identify any gaps that it had in those areas  OCIO officials stated that they had not assessed these needs or identified competency or staffing gaps because, among other things, the Secret Service was focused on reorganizing the IT workforce under a single, centralized reporting chain within the CIO’s office  However, as previously mentioned, the component completed this effort in March 2017, but OCIO did not subsequently assess its competency and staffing needs, nor identify gaps in those areas  OCIO officials reported that they plan to assess the competencies of the IT workforce to identify any gaps that may exist; however, they were unable to identify a specific date by which they expect to have the capacity to complete this assessment  Until OCIO regularly analyzes the IT workforce to identify its competency needs and any gaps it may have, OCIO will be limited in its ability to determine whether its IT workforce has the necessary knowledge and skills to meet its mission and goals  Further, Office of Human Resources officials reported that they plan to update the staffing model that they use to identify their IT staffing needs to include more reliable workload data  However, as discussed earlier, the Secret Service had not yet developed that updated model to determine its IT staffing needs  Office of Human Resources officials reported that once they update the staffing model they plan to re- evaluate the Secret Service’s IT staffing needs  The officials also stated that, going forward, they plan to reassess these needs each year as part of the annual budget cycle  Regular assessments of the IT workforce’s staffing needs should increase the likelihood that the Secret Service is able to appropriately identify the number of IT staff it needs to meet its mission and programmatic goals  Develop strategies and plans to address gaps in competencies and staffing—partly implemented  The Secret Service developed recruiting and hiring strategies to address certain competency and staffing needs (e g , cybersecurity) for its IT workforce  These strategies included, among other things, participating in DHS-wide recruiting events and using special hiring authorities  However, because OCIO did not identify all of its IT competency and staffing needs, and lacked a current analysis of its entire IT workforce, the Secret Service could not provide assurance that the recruiting and hiring strategies it developed were specifically targeted towards addressing current OCIO competency and staffing gaps  For example, without an analysis of the IT workforce’s skills, OCIO did not know the extent to which it had gaps in areas such as device management and cloud computing  As a result, the Secret Service’s recruiting strategies may not have been targeted to address any gaps in those areas  Until the Secret Service updates its recruiting and hiring strategies and plans to address all IT competency and staffing gaps identified (after OCIO completes its analysis of the entire IT workforce, as discussed earlier), the Secret Service will be limited in its ability to effectively recruit and hire staff to fill those gaps  According to the Office of Personnel Management, the Chief Human Capital Officers Council, and our prior work, once an agency has determined the critical skills and competencies that it needs to achieve programmatic goals, and identifies any competency or staffing gaps in its current workforce, the agency should be positioned to build effective recruiting and hiring programs  It is important that an agency has these programs in place to ensure that it can effectively recruit and hire employees with the appropriate skills to meet its various mission requirements  The Office of Personnel Management, the Chief Human Capital Officers Council, and we have also identified numerous leading practices associated with effective recruitment and hiring programs  Among these practices, an agency should (1) implement recruiting and hiring activities to address skill and staffing gaps by using the strategies and plans developed during the strategic workforce planning process; (2) establish and track metrics to monitor the effectiveness of the recruitment program and hiring process, including their effectiveness at addressing skill and staffing gaps, and report to agency leadership on progress addressing those gaps; and (3) adjust recruitment plans and hiring activities based on recruitment and hiring effectiveness metrics  The Secret Service minimally implemented the selected three leading practices associated with the recruitment and hiring workforce area  Specifically, the component partly implemented one of the three practices and did not implement the other two practices  Table 9 lists these selected practices and provides our assessment of the Secret Service’s implementation of the practices  Implement recruiting and hiring activities to address skill and staffing gaps by using the strategies and plans developed during the strategic workforce planning process—partly implemented  OCIO officials implemented the activities identified in the Secret Service’s recruiting and hiring plans  For example, as identified in its recruiting plan, OCIO participated in a February 2017 career fair to recruit job applicants at a technology conference  In addition, in August 2017, OCIO participated in a DHS-wide recruiting event  Secret Service officials reported that, during this event, they conducted four interviews for positions in OCIO  However, as previously discussed, OCIO did not identify all of its IT competency and staffing needs, and lacked a current analysis of its entire IT workforce  Without complete knowledge of its current IT competency and staffing gaps, the Secret Service could not provide assurance that the recruiting and hiring strategies that it had implemented fully addressed these gaps  Establish and track metrics to monitor the effectiveness of the recruitment program and hiring process, including their effectiveness at addressing skill and staffing gaps, and report to agency leadership on progress addressing those gaps—not implemented  The Secret Service had not established and tracked metrics for monitoring the effectiveness of its recruitment and hiring activities for the IT workforce  Officials in the Office of Human Resources attributed this to staffing constraints and said their priority was to address existing staffing gaps associated with the Secret Service’s law enforcement groups  In June 2018, Office of Human Resources officials stated that they plan to implement metrics to monitor the effectiveness of the hiring process for the IT workforce by October 2018  The officials also stated that they were in the process of determining (1) the metrics that are to be used to monitor the effectiveness of their workforce recruiting efforts and (2) whether they need to acquire new technology to support this effort  However, the officials did not know when they would implement the metrics for assessing the effectiveness of the recruitment activities and whether they would report the results to leadership  Until the Office of Human Resources (1) develops and tracks metrics to monitor the effectiveness of the Secret Service’s recruitment activities for the IT workforce, including their effectiveness at addressing skill and staffing gaps; and (2) reports to component leadership on those metrics, the Secret Service and the Office of Human Resources will be limited in their ability to analyze the recruitment program to determine whether the program is effectively addressing IT skill and staffing gaps  Further, Secret Service leadership will lack the information necessary to make effective recruitment decisions  Adjust recruitment plans and hiring activities based on recruitment and hiring effectiveness metrics—not implemented  While the Secret Service CIO stated in June 2018 that he planned to adjust the office’s recruiting and hiring strategies to focus on entry- level staff rather than mid-career employees, this planned adjustment was not based on metrics that the Secret Service was tracking  Instead, the CIO stated that he planned to make this change because his office determined that previous mid-career applicants were often unwilling or unable to wait for the Secret Service’s lengthy, required background investigation process to be completed  However, as previously mentioned, the Secret Service did not develop and implement any metrics for assessing the effectiveness of the recruitment and hiring activities for the IT workforce  As a result, the Office of Human Resources and OCIO were not able to use such metrics to inform adjustments to their recruiting and hiring plan and activities, thus, reducing their ability to target potential candidates for hiring  Until the Office of Human Resources and OCIO adjust their recruitment and hiring plans and activities as necessary, after establishing and tracking metrics for assessing the effectiveness of these activities for the IT workforce, the Secret Service will be limited in its ability to ensure that its recruiting plans and activities are appropriately targeted to potential candidates  In addition, the component will lack assurance that these plans and activities will effectively address skill and staffing gaps within its IT workforce  An organization should invest in training and developing its employees to help ensure that its workforce has the information, skills, and competencies that it needs to work effectively  In addition, training and development programs are an integral part of a learning environment that can enhance an organization’s ability to attract and retain employees with the skills and competencies needed to achieve cost-effective and timely results  DHS, the Secret Service, and we have previously identified numerous leading training and development-related practices  Among those practices, an organization should (1) establish a training and development program to assist the agency in achieving its mission and goals; (2) use tracking and other control mechanisms to ensure that employees receive appropriate training and meet certification requirements, when applicable; and (3) collect and assess performance data (including qualitative or quantitative measures, as appropriate) to determine how the training program contributes to improved performance and results  The Secret Service minimally implemented the selected three leading practices associated with the training and development workforce area  Specifically, the component partly implemented two of the three practices and did not implement one practice  Table 10 lists these selected leading practices and provides our assessment of the Secret Service’s implementation of the practices  Establish a training and development program to assist the agency in achieving its mission and goals—partly implemented  OCIO was in the process of developing a training program for its IT workforce  For example, OCIO developed a draft training plan that identified recommended training for the office’s various IT workforce groups (e g , voice communications employees)  However, the office had not defined the required training for each IT workforce group  In addition, OCIO officials had not yet determined which activities they would implement as part of the training program (e g , soliciting employee feedback after training is completed and evaluating the effectiveness of specific training courses), nor did they implement those activities  OCIO officials stated that they had not yet fully implemented a training program because their annual training budget for fiscal year 2018 was not sufficient to implement such a program  However, resource constrained programs especially benefit from identifying and prioritizing training activities to inform training budget decisions  Until OCIO (1) defines the required training for each IT workforce group, (2) determines the activities that it will include in its IT workforce training and development program based on its available training budget, and (3) implements those activities, the office may be limited in its ability to ensure that the IT workforce has the necessary knowledge and skills for their respective positions  Use tracking and other control mechanisms to ensure that employees receive appropriate training and meet certification requirements, when applicable—partly implemented  OCIO used a training system to track that the managers for IITT’s programs had met certain certification requirements for their respective positions  In addition, OCIO manually tracked the technical training that certain IT staff took  However, as discussed earlier, OCIO did not define the required training for each IT workforce group  As such, the office was unable to ensure that IT staff received the appropriate training relevant to their respective positions  Until it ensures that IT staff complete training specific to their positions (after defining the training required for each workforce group), OCIO will have limited assurance that the workforce has the necessary knowledge and skills  Collect and assess performance data (including qualitative or quantitative measures, as appropriate) to determine how the training program contributes to improved performance and results—not implemented  As previously discussed, OCIO did not fully implement a training program for the IT workforce; as such, the office was unable to collect and assess performance data related to such a program  OCIO officials stated that, once they fully implement a training program, they intend to collect and assess data on how this program contributes to improved performance  However, the officials were unable to specify a time frame for when they would do so  Until OCIO collects and assesses performance data (including qualitative or quantitative measures, as appropriate) to determine how the IT training program contributes to improved performance and results (once the training program is implemented), the office may be limited in its knowledge of whether the training program is contributing to improved performance and results  Employee morale is important to organizational performance and an organization’s ability to retain talent to perform its mission  We have previously identified numerous leading practices for improving employee morale  Among other things, we have found that an organization should (1) determine root causes of employee morale problems by analyzing employee survey results using techniques such as comparing demographic groups, benchmarking against similar organizations, and linking root cause findings to action plans; and develop and implement action plans to improve employee morale; (2) establish and track metrics of success for improving employee morale, and report to agency leadership on progress improving morale; and (3) maintain leadership support and commitment to ensure continued progress in improving employee morale, and demonstrate sustained improvement in morale  With regard to its IT workforce, the Secret Service substantially implemented the selected three practices associated with the employee morale workforce area  Specifically, the component fully implemented two of the selected practices and partly implemented one practice  Table 11 lists these selected practices and provides our assessment of the Secret Service’s implementation of the practices  Determine root causes of employee morale problems by analyzing employee survey results using techniques such as comparing demographic groups, benchmarking against similar organizations, and linking root cause findings to action plans  Develop and implement action plans to improve employee morale—fully implemented  The Secret Service used survey analysis techniques to determine the root causes of its low employee morale, on which we have previously reported  For example, the component conducted a benchmarking exercise where it compared the morale of the Secret Service’s employees, including IT staff, to data on the morale of employees at other agencies, including the U S  Capitol Police, U S  Coast Guard, and the Drug Enforcement Administration  As part of this exercise, the Secret Service also compared its employee work-life offerings (e g , on-site childcare and telework program) to those available at other agencies  In addition, the Secret Service developed and implemented action plans for improving employee morale  Among these action plans, for example, the component implemented a student loan repayment program and expanded its tuition assistance program’s eligibility requirements  Establish and track metrics of success for improving employee morale, and report to agency leadership on progress improving morale—fully implemented  The Secret Service tracked metrics for improving employee morale and reported the results to leadership  For example, the component tracked metrics on the percentage of the workforce, including IT staff, that participated in the student loan repayment and tuition assistance programs  In addition, the Chief Strategy Officer reported to the Chief Operating Officer the results related to meeting those metrics  Maintain leadership support and commitment to ensure continued progress in improving employee morale, and demonstrate sustained improvement in morale—partly implemented  Secret Service leadership developed and implemented initiatives that demonstrated their commitment to improving the morale of the Secret Service’s workforce  For example, since 2014, the Secret Service had worked with a contractor to identify ways to improve the morale of its entire workforce, including IT staff  However, as of June 2018, the Secret Service was unable to demonstrate that it had sustained improvement in the morale of the component’s IT staff  In particular, the component was only able to provide IT workforce-specific results from one employee morale assessment that was conducted subsequent to the consolidation of this workforce into OCIO in March 2017  These results were from an assessment conducted by the component’s Inspection Division in December 2017 (the assessment found that the majority of the Secret Service’s IT employees rated their morale as “very good” or “excellent ”) While the component also provided certain employee morale results from the Office of Personnel Management’s Federal Employee Viewpoint Survey in 2017, these results were not specific to the IT workforce  Instead, this workforce’s results were combined with those from staff in another Secret Service division  According to OCIO officials, the results were combined because, at the time of the survey, the IT workforce was administratively identified as being part of that other division  OCIO officials stated that, going forward, they plan to continue to assess the morale of the IT workforce on an annual basis as part of the Federal Employee Viewpoint Survey  In addition, the officials stated that OCIO-specific results may be available as part of the 2018 survey results, which the officials expect to receive by September 2018  By measuring employee satisfaction on an annual basis, the Secret Service should have increased knowledge of whether its initiatives that are aimed at improving employee morale are in fact increasing employee satisfaction  Agencies can use performance management systems as a tool to foster a results-oriented organizational culture that links individual performance to organizational goals  We have previously identified numerous leading practices related to performance management that are intended to enhance performance and ensure individual accountability  Among the performance management practices, agencies should (1) establish a performance management system that differentiates levels of staff performance and defines competencies in order to provide a fuller assessment of performance, (2) explicitly align individual performance expectations with organizational goals to help individuals see the connection between their daily activities and organizational goals, and (3) periodically provide individuals with regular performance feedback  The Secret Service substantially implemented the selected three leading practices associated with the performance management workforce area  Specifically, the component fully implemented one of the three practices and partly implemented the other two practices  Table 12 lists these selected leading practices and provides our assessment of the Secret Service’s implementation of the practices  Establish a performance management system that differentiates levels of staff performance and defines competencies in order to provide a fuller assessment of performance—partly implemented  The Secret Service’s performance management process requires leadership to make meaningful distinctions between levels of staff performance  In particular, the component’s performance plans for IT staff, which are developed by the Office of Human Resources and tailored by OCIO, as necessary, specify the criteria that leadership use to determine if an individual has met or exceeded the expectations associated with each competency identified in their respective performance plan  The performance plans include pre-established, department-wide competencies that are set by DHS, as well as occupational series-specific goals that may be updated by the Secret Service  However, because OCIO did not fully define and document all of its technical competency needs for the IT workforce, as discussed earlier, the Secret Service’s performance plans for IT staff did not include performance expectations related to the full set of technical competencies required for their respective positions  In addition, because OCIO officials were unable to specify a time frame for when they will identify all of the technical competency needs for the IT workforce (as previously discussed), the officials were also unable to specify a time frame for when they would update the IT workforce’s performance plans to include those relevant technical competencies  Until OCIO updates the performance plans for each occupational series within the IT workforce to include the relevant technical competencies, once identified, against which IT staff performance should be assessed, the office will be limited in its ability to provide IT staff with a complete assessment of their performance  In addition, Secret Service management will have limited knowledge of the extent to which IT staff are meeting all relevant technical competencies  Explicitly align individual performance expectations with organizational goals to help individuals see the connection between their daily activities and organizational goals—partly implemented  The Secret Service’s performance plans for IT staff identified certain goals that appeared to be related to organizational goals and objectives  For example, the performance plan for the Telecommunications Specialist occupational series (which is one of the series included in OCIO’s IT workforce) identified a goal for staff to support the voice, wireless, radio, satellite, and video systems serving the Secret Service’s protective and investigative mission  This performance plan goal appeared to be related to the component’s strategic goal on Advanced Technology, which included an objective to create the infrastructure needed to fulfill mission responsibilities  However, the Secret Service was unable to provide documentation that explicitly showed how individual employee performance links to organizational goals, such as a mapping of the goals identified in employee performance plans to organizational goals  Specifically, while Office of Human Resources officials stated that each Secret Service directorate is responsible for ensuring that employee goals map to high-level organizational goals, OCIO officials stated that they did not complete this mapping  The officials were unable to explain why they did not align the goals in their employees’ performance plans to the component’s high-level goals  According to the officials, the Secret Service is in the process of implementing a new automated tool that will require each office to explicitly align individual performance expectations to organizational goals  The officials stated that OCIO plans to use this tool to create employees’ fiscal year 2019 performance plans  By explicitly demonstrating how individual performance expectations align with organizational goals, the Secret Service’s IT staff should have a better understanding of how their daily activities contribute towards achieving the Secret Service’s goals  Periodically provide individuals with regular performance feedback—fully implemented  Secret Service leadership periodically provided their IT staff with performance feedback  Specifically, on an annual basis, OCIO staff received feedback during a mid-year and end-of-year performance feedback assessment  In our prior work, we have stressed that candid and constructive feedback can help individuals maximize their contribution and potential for understanding and realizing the goals and objectives of an organization  Further, this feedback is one of the strongest drivers of employee engagement  According to leading practices of the Software Engineering Institute, effective program oversight includes monitoring program performance and conducting reviews at predetermined checkpoints or milestones  This is done by, among other things, comparing actual cost, schedule, and performance data with estimates in the program plan and identifying significant deviations from established targets or thresholds for acceptable performance levels  In addition, the Software Engineering Institute previously identified leading practices for effectively monitoring the performance of agile projects  According to the Institute, agile development methods focus on delivering usable, working software frequently; as such, it is important to measure the value delivered during each iteration of these projects  To that end, the Institute reported that agile projects should be measured on velocity (i e , number of story points completed per sprint or release), development progression (e g , the number of user stories planned and accepted), product quality (e g , number of defects), and post-deployment user satisfaction  DHS and the Secret Service had fully implemented the selected leading practice for monitoring the performance of one program and three projects within the IITT investment, and conducting reviews of this program and these projects at predetermined checkpoints  In addition, with regard to the selected leading practice for monitoring agile projects, the Secret Service had fully implemented this practice for one of its two projects being implemented using agile and had partially implemented this practice for the other project  Table 13 provides a summary of DHS’s and the Secret Service’s implementation of these leading practices, as relevant for one program and three projects within IITT  Monitor program performance and conduct reviews at predetermined checkpoints or milestones  Consistent with leading practices, DHS and the Secret Service monitored the performance of IITT’s program and projects by comparing actual cost, schedule, and performance information against planned targets and conducting reviews at predetermined checkpoints  For example, within the Secret Service: The Enabling Capabilities program and Multi-Level Security project monitored their contractors’ costs spent to-date on a monthly basis and compared them to the total contract amounts  OCIO used integrated master schedules to monitor the schedule performance of the Enabling Capabilities program and Multi-Level Security project  OCIO also monitored the cost, schedule, and performance of the Uniformed Division Resource Management System and Events Management projects during monthly status reviews  In addition, DHS and the Secret Service conducted acquisition decision event reviews and systems engineering life cycle technical reviews of IITT’s program and projects at predetermined checkpoints and, when applicable, identified deviations from established cost, schedule, and performance targets  For example: Secret Service OCIO met with DHS’s Office of Program Accountability and Risk Management in February 2017, and with DHS’s Acting Under Secretary for Management in June 2017, to discuss a schedule breach for the Enabling Capabilities program  In particular, the Enabling Capabilities program informed DHS that the program needed to change the planned date for acquisition decision event 3 (the point at which a decision is made to fully deploy the system) in order to conduct tests in an operational environment prior to that decision event  This delay was due to the Secret Service misunderstanding the tests that it was required to conduct prior to that decision event  Specifically, the Enabling Capabilities program had conducted tests on “production representative” systems, but these tests were not sufficient to meet the requirements for acquisition decision event 3  The project team for Multi-Level Security identified that certain technical issues they had experienced would delay system deployment and full operational capability (the point at which an investment becomes fully operational)  As such, in October 2017, the project notified the Secret Service Component Acquisition Executive of these expected delays  In particular, the web browser that was intended to provide users on “Sensitive But Unclassified” workstations the ability to view information from different security levels, experienced technical delays in meeting personal identity verification requirements  The project team also described for the executive how the schedule delay would affect the project’s performance metrics and funding, and subsequently updated the project plan accordingly  Measure and monitor agile projects on, among other things, velocity (i e , number of story points completed per sprint or release), development progression (e g , the number of features and user stories planned and accepted), product quality (e g , number of defects), and post-deployment user satisfaction  Secret Service OCIO measured its two agile projects—Uniformed Division Resource Management System and Events Management— using certain agile metrics  In particular, OCIO officials measured the Uniformed Division Resource Management System and Events Management projects using key metrics related to velocity and development progression  For example, the officials measured development progression for both projects on a daily basis  In addition, OCIO officials monitored each project’s progress against these metrics during bi-weekly reviews that they conducted with each project team  The OCIO officials also tracked product quality metrics for the Uniformed Division Resource Management System  For example, on a monthly basis, the officials tracked the number of helpdesk tickets that had been resolved related to the system  In addition, on a quarterly basis, they tracked the number of Uniformed Division Resource Management System defects that (1) had been fixed and (2) were in the backlog  However, while OCIO officials received certain post-deployment user satisfaction information from end-users of the Uniformed Division Resource Management System by, among other things, tracking the number of helpdesk tickets related to the system and via daily verbal, undocumented feedback from certain Uniformed Division officers, OCIO officials had not fully measured and documented post- deployment user satisfaction with the system, such as via a survey of employees who use the system  The officials stated that they had not conducted and documented a survey because they were focused on (1) addressing software performance issues that occurred after they deployed the system to a limited number of users, and (2) continuing system deployment to the remaining users after they addressed the performance issues  OCIO officials stated that they plan to conduct such a documented survey by the end of September 2018  The results of the user satisfaction survey should provide OCIO with important information on whether the Uniformed Division Resource Management System is meeting users’ needs  The Secret Service’s full implementation of 11 of 14 component-level CIO responsibilities constitutes a significant effort to establish CIO oversight for the component’s IT portfolio  Additional efforts to fully implement the remaining 3 responsibilities, including ensuring that all IT contracts are reviewed, as appropriate; ensuring that the Secret Service’s enterprise governance policy appropriately specifies the CIO’s role in developing and reviewing the component’s IT budget formulation and execution; and ensuring agile projects measure product quality and post-deployment user satisfaction, will further position the CIO to effectively manage the Secret Service’s IT portfolio  When effectively implemented, IT workforce planning and management activities can facilitate the successful accomplishment of an agency’s mission  However, the Secret Service had not fully implemented all of the 15 selected practices for its IT workforce for any of the five areas— strategic planning, recruitment and hiring, training and development, employee morale, and performance management  The Secret Service’s lack of (1) a strategic workforce planning process, including the identification of all required knowledge and skills, assessment of competency gaps, and targeted strategies to address specific gaps in competencies and staffing; (2) targeted recruiting activities, including metrics to monitor the effectiveness of the recruitment program and adjustment of the recruitment program and hiring efforts based on metrics; (3) a training program, including the identification of required training for IT staff, ensuring that staff take required training, and assessment of performance data regarding the training program; and (4) a performance management system that includes all relevant technical competencies, greatly limits its ability to ensure the timely and effective acquisition and maintenance of the Secret Service’s IT infrastructure and services  On the other hand, by monitoring program performance and conducting reviews at predetermined checkpoints for one program and three projects associated with the IITT investment, in accordance with leading practices, the Secret Service and DHS provided important oversight needed to guide that program and those projects  Measuring projects on leading agile metrics also provided the Secret Service CIO with important information on project performance  We are making the following 13 recommendations to the Director of the Secret Service: The Director should ensure that the CIO establishes and documents an IT acquisition review process that ensures the CIO or the CIO’s delegate reviews all contracts containing IT, as appropriate  (Recommendation 1) The Director should update the enterprise governance policy to specify (1) the CIO’s current role and responsibilities on the Executive Resources Board, to include developing and reviewing the IT budget formulation and execution; and (2) the Deputy CIO’s role and responsibilities on the Enterprise Governance Council  (Recommendation 2) The Director should ensure that the Secret Service develops a charter for its Executive Resources Board that specifies the roles and responsibilities of all board members, including the CIO  (Recommendation 3) The Director should ensure that the CIO includes product quality and post-deployment user satisfaction metrics in the modular outcomes and target measures that the CIO sets for monitoring agile projects  (Recommendation 4) The Director should ensure that the CIO identifies all of the required knowledge and skills for the IT workforce  (Recommendation 5) The Director should ensure that the CIO regularly analyzes the IT workforce to identify its competency needs and any gaps it may have  (Recommendation 6) The Director should ensure that, after OCIO completes an analysis of the IT workforce to identify any competency and staffing gaps it may have, the Secret Service updates its recruiting and hiring strategies and plans to address those gaps, as necessary  (Recommendation 7) The Director should ensure that the Office of Human Resources (1) develops and tracks metrics to monitor the effectiveness of the Secret Service’s recruitment activities for the IT workforce, including their effectiveness at addressing skill and staffing gaps; and (2) reports to component leadership on those metrics  (Recommendation 8) The Director should ensure that the Office of Human Resources and OCIO adjust their recruitment and hiring plans and activities, as necessary, after establishing and tracking metrics for assessing the effectiveness of these activities for the IT workforce  (Recommendation 9) The Director should ensure that the CIO (1) defines the required training for each IT workforce group, (2) determines the activities that OCIO will include in its IT workforce training and development program based on its available training budget, and (3) implements those activities  (Recommendation 10) The Director should ensure that the CIO ensures that the IT workforce completes training specific to their positions (after defining the training required for each workforce group)  (Recommendation 11) The Director should ensure that the CIO collects and assesses performance data (including qualitative or quantitative measures, as appropriate) to determine how the IT training program contributes to improved performance and results (once the training program is implemented)  (Recommendation 12) The Director should ensure that the CIO updates the performance plans for each occupational series within the IT workforce to include the relevant technical competencies, once identified, against which IT staff performance should be assessed  (Recommendation 13) DHS provided written comments on a draft of this report, which are reprinted in appendix III  In its comments, the department concurred with all 13 of our recommendations and provided estimated completion dates for implementing each of them  For example, with regard to recommendation 2, the department stated that the Secret Service would update its enterprise governance policy and related policies to outline the roles and responsibilities of the CIO and Deputy CIO, among others, by March 31, 2019  In addition, for recommendation 13, the department stated that the Secret Service OCIO will include relevant technical competencies in performance plans, as appropriate, in the next performance cycle that starts in July 2019  If implemented effectively, these actions should address the weaknesses we identified  The department also identified a number of other actions that it said had been taken to address our recommendations  For example, in response to recommendation 8, which calls for the Office of Human Resources to (1) develop and track metrics to monitor the effectiveness of the Secret Service’s recruitment activities for the IT workforce and (2) report to component leadership on those metrics, DHS stated that the Secret Service’s Office of Human Resources’ Outreach Branch provides to the department metrics on recruitment efforts toward designated priority mission-critical occupations  However, for fiscal year 2017, only 1 of the 12 occupational series associated with the Secret Service’s IT workforce was designated as a mission-critical occupation for the component (i e , the 2210 IT Specialist series)  The 11 other occupational series were not designated as mission- critical occupations  In addition, for fiscal year 2018, none of these 12 occupational series were designated as mission-critical occupations  As such, metrics on recruiting for these IT series may not have been reported to DHS leadership  Moreover, while we requested documentation of the recruiting metrics for the Secret Service’s IT workforce and, during the course of our review, had multiple subsequent discussions with the Secret Service regarding such metrics, the component did not provide documentation that demonstrated it had established recruiting metrics for its IT workforce  Tracking such metrics and reporting the results to Secret Service leadership, as we recommended, would provide management with important information necessary to make effective recruitment decisions  Further, in response to recommendation 10, which among other things, calls for the CIO to define the required training for each IT workforce group, the department stated that the Secret Service OCIO recently developed training requirements for each workforce group, which were issued during our audit  However, while during our audit OCIO provided a list of recommended training courses, the office did not identify them as being required courses  Defining training that is required for each IT workforce group, as we recommended, would inform OCIO of the necessary training for each position and enable the office to prioritize this training, to ensure that its staff have the needed knowledge and skills  In addition to the aforementioned comments, we received technical comments from DHS and Secret Service officials, which we incorporated, as appropriate  We are sending copies of this report to the appropriate congressional committees, the Secretary of Homeland Security, the Director of the Secret Service, and other interested parties  In addition, this report is available at no charge on the GAO website at http://www gao gov  Should you or your staffs have any questions on information discussed in this report, please contact me at (202) 512-4456 or HarrisCC@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff who made major contributions to this report are listed in appendix IV  Our objectives were to evaluate the extent to which: (1) the U S  Secret Service (Secret Service) Chief Information Officer (CIO) has implemented selected information technology (IT) oversight responsibilities, (2) the Secret Service has implemented leading workforce planning and management practices for its IT workforce, and (3) the Secret Service and the Department of Homeland Security (DHS) have implemented selected performance and progress monitoring practices for the Information Integration and Technology Transformation (IITT) investment  To address the first objective, we analyzed DHS’s policies and guidance on IT management to identify the responsibilities that were to be implemented by the component-level CIO related to overseeing the Secret Service’s IT portfolio, including existing systems, acquisitions, and investments  From the list of 33 responsibilities that we identified, we then excluded the responsibility that was associated with information security, which is expected to be addressed as part of a separate, subsequent GAO review  We also excluded those responsibilities that were significantly large in scope (e g , implement an enterprise architecture) or that, in our professional judgment, lacked specificity (e g , provide timely delivery of mission IT services)  As a result, we excluded from consideration for this review a total of 10 CIO responsibilities  For the 23 that remained, we then combined certain responsibilities that overlapped with other related responsibilities  For example, we combined related responsibilities on the component CIO’s review of IT contracts  As a result, we identified 14 responsibilities for review  We validated with the acting DHS CIO that these responsibilities were key responsibilities for the department’s component-level CIOs  We then included all 14 of the responsibilities in our review  The 14 selected component-level CIO responsibilities were: 1  Develop and review the component IT budget formulation and execution  2  Manage the component IT investment portfolio, including establishing an IT acquisition review process that enables component and DHS review of component acquisitions (i e , contracts) that contain IT  3  Develop, implement, and maintain a detailed IT strategic plan  4  Ensure all component IT policies are in compliance and alignment with DHS IT directives and instructions  5  Concur with each program’s and/or project’s systems engineering life cycle tailoring plan  6  Support the Component Acquisition Executive to ensure processes are established that enable systems engineering life cycle technical reviews and that they are adhered to by programs and/or projects  7  Ensure that all systems engineering life cycle technical review exit criteria are satisfied for each of the component’s IT programs and/or projects  8  Ensure the necessary systems engineering life cycle activities have been satisfactorily completed as planned for each of the component’s IT programs and/or projects  9  Concur with the systems engineering life cycle technical review completion letter for each of the component’s IT programs and/or projects  10  Maintain oversight of their component’s agile development approach for IT by appointing the responsible personnel, identifying investments for adoption, and reviewing artifacts  11  With Component Acquisition Executives, evaluate and approve the application of agile development for IT programs consistent with the component’s agile development approach  12  Set modular outcomes and target measures to monitor the progress in achieving agile implementation for IT programs and/or projects within their component  13  Participate on DHS’s CIO Council, Enterprise Architecture Board, or other councils/boards as appropriate, and appoint employees to serve when necessary  14  Meet the IT competency requirements established by the DHS CIO, as required in the component CIO’s performance plan  To determine the extent to which the Secret Service CIO has implemented these responsibilities, we obtained and assessed relevant component documentation and compared it to the responsibilities  Specifically, we obtained and analyzed documentation including evidence of the CIO’s participation on the Secret Service governance board that has final decision authority and responsibility for enterprise governance, including the IT budget; monthly program management reports showing the CIO’s oversight of IT programs, projects, and systems; monthly status reports on program spending; the Secret Service’s IT strategic plan; the Secret Service’s enterprise governance policy; meeting minutes from the DHS board and council on which the CIO participated (i e , the CIO Council and Enterprise Architecture Board); and documentation demonstrating whether the CIO met the IT competency requirements  In addition, we obtained and analyzed relevant documentation related to the CIO’s oversight of the major IT investments on which the Secret Service was spending development, modernization, and enhancement funds during fiscal year 2017  As of July 2017, the component had one investment—IITT—that met this criterion  IITT is a portfolio investment that, as of July 2017, included two programs (one of which included three projects) and one standalone project (i e , it was not part of another program) that had capabilities that were in planning or development and modernization: the Enabling Capabilities program, Enterprise Resource Management System program (which included three projects, called Uniformed Division Resource Management System, Events Management, and Enterprise-wide Scheduling), and Multi-Level Security project  In particular, we obtained and analyzed documentation related to the CIO’s oversight of the systems engineering life cycles for IITT’s Enabling Capabilities program and the Uniformed Division Resource Management System, Events Management, and Multi-Level Security projects  This documentation included acquisition program baselines, systems engineering life cycle tailoring plans, and systems engineering life cycle technical review briefings and completion letters  We then compared the documentation against the five selected systems engineering life cycle oversight responsibilities (responsibilities 5, 6, 7, 8, and 9)  We also obtained and analyzed documentation related to the CIO’s oversight of two projects that the Secret Service was implementing using an agile methodology—Uniformed Division Resource Management System and Events Management  Specifically, we obtained and assessed documentation of (1) the CIO’s approval for these projects to be implemented using an agile methodology and (2) the agile development metrics that the CIO established for each of these projects  We then compared this documentation to the three agile development-related component-level CIO responsibilities (responsibilities 10, 11, and 12)  Further, to determine the extent to which the Secret Service CIO had established an IT acquisition (i e , contract) review process that enabled component and DHS review of component contracts that contain IT (which is part of responsibility 2), we first asked Secret Service officials to provide us with a list of all new, unclassified IT contracts that the component awarded between October 1, 2016, and June 30, 2017  The Secret Service officials provided a list of 54 contracts  We validated that these were contracts for IT or IT services by: (1) searching for them in the Federal Procurement Data System – Next Generation; (2) identifying their associated product or service codes, as reported in that system; and (3) determining whether those codes were included in the universe of 79 IT product or service codes identified by the Category Management Leadership Council  In validating the list of 54 contracts provided by the Secret Service, we determined that 5 of the contracts were not associated with an IT product or service code  As such, we removed those contracts from the list  In addition, we found that three other items identified by the component were not in the Federal Procurement Data System – Next Generation  Secret Service officials subsequently confirmed that these three items were not contracts  We therefore removed these three items from the list  As such, the final list of validated contracts identified by the Secret Service included 46 IT contracts  In addition, to identify any IT contracts that were not included in the list provided by the Secret Service, we conducted a search of the Federal Procurement Data System – Next Generation to identify all unclassified contracts that (1) the component awarded between October 1, 2016, and June 30, 2017; (2) were not a modification of a contract; and (3) were associated with 1 of the 79 IT product or service codes identified by the Category Management Leadership Council  Based on these criteria, we identified 144 Secret Service IT contracts in the Federal Procurement Data System – Next Generation (these 144 contracts included the 46 contracts previously identified by Secret Service officials)  We then asked Secret Service officials to validate the accuracy, completeness, and reliability of these data, which they did  From each of these two lists of IT contracts (i e , the list of 46 IT contracts identified by the Secret Service and the list of 144 IT contracts that we identified from the Federal Procurement Data System – Next Generation), we then selected random, non-generalizable samples of contracts, as described below  First, from the list of 46 IT contracts identified by Secret Service officials, we removed 4 contracts that had total values of less than $10,000  To ensure that we selected across all contract sizes, we randomly selected 12 contracts from the remaining list of 42 contracts, using the following cost ranges: $10,000 to $50,000 (4 contracts), more than $50,000 to less than $250,000 (4 contracts), and more than $250,000 (4 contracts)  Second, from our list of 144 IT contracts that we identified from the Federal Procurement Data System – Next Generation, we removed the 46 contracts identified by Secret Service officials  We also removed 12 contracts that had total values of less than $10,000  To ensure that we selected across all contract sizes, we randomly selected 21 contracts from the remaining list of 86 contracts, using the following cost ranges: $10,000 to $50,000 (7 contracts), more than $50,000 to less than $250,000 (7 contracts), and more than $250,000 (7 contracts)  In total, we selected 33 IT contracts for review  We separated the contracts into the three cost ranges identified above in order to ensure that contracts of different value levels had been selected  This enabled us to determine the extent to which the CIO appropriately reviewed contracts of all values  To determine the extent to which the CIO had established an IT contract approval process that enabled the Secret Service and DHS, as appropriate, to review IT contracts, we first asked Secret Service Office of the CIO (OCIO) officials for documentation of their IT contract approval process  These officials were unable to provide such documentation  Instead, the officials stated that the Secret Service CIO or the CIO’s delegate approves all IT contracts prior to award  The officials also provided documentation that identified four staff to whom the CIO had delegated his approval authority  Further, the officials stated that, in accordance with DHS’s October 2016 IT acquisition review guidance, they submitted to DHS OCIO for approval any IT contracts that met DHS’s thresholds for review, including those that (1) had total estimated procurement values of $2 5 million or more, and (2) were associated with a major investment  Based on the IT acquisition review process that Secret Service OCIO officials described, we then obtained and analyzed each of the 33 selected IT contracts and associated approval documentation to determine whether or not the Secret Service CIO or the CIO’s delegate had approved each of the contracts  In particular, we (1) reviewed the name of the contract approver on the approval documentation, and (2) compared the signature dates that were on the contracts to the signature dates that were identified on the associated approval documentation  In addition, to determine whether or not the Secret Service CIO submitted to DHS OCIO for approval the IT contracts that (1) had total estimated procurement values of $2 5 million or more, and (2) were associated with major investments, we first analyzed the 144 Secret Service IT contracts that we had previously pulled from the Federal Procurement Data System – Next Generation to determine which contracts met the $2 5 million threshold  We identified 4 contracts that met this threshold  We then requested that OCIO identify the levels (i e , major or non-major) of the investments associated with these contracts  According to OCIO officials, 3 of the 4 contracts were associated with non-major investments and 1 was not associated with an investment  As such, based on DHS’s October 2016 IT acquisition review guidance, none of these contracts needed to be submitted to DHS OCIO for review  We also interviewed Secret Service officials, including the CIO and Deputy CIO, regarding the CIO’s implementation of the 14 selected component-level responsibilities  We assessed the evidence against the selected responsibilities to determine the extent to which the CIO had implemented them  To address the second objective—determining the extent to which the Secret Service had implemented leading workforce planning and management practices for its IT workforce—we first identified seven topic areas associated with human capital management based on the following sources: The Office of Personnel Management’s Human Capital Framework  Office of Personnel Management and the Chief Human Capital Officers Council Subcommittee for Hiring and Succession Planning, End-to-End Hiring Initiative  GAO, High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts Needed on Others  GAO, IT Workforce: Key Practices Help Ensure Strong Integrated Program Teams; Selected Departments Need to Assess Skill Gaps  GAO, Department of Homeland Security: Taking Further Action to Better Determine Causes of Morale Problems Would Assist in Targeting Action Plans  GAO, Human Capital: A Guide for Assessing Strategic Training and Development Efforts in the Federal Government  GAO, Results-Oriented Cultures: Creating a Clear Linkage between Individual Performance and Organizational Success  DHS acquisition guidance  Secret Service acquisition guidance  Among these topic areas, we then selected five areas that, in our professional judgment, were of particular importance to successful workforce planning and management  They were also previously identified as part of our high-risk and key issues work on human capital management  These areas include: (1) strategic planning, (2) recruitment and hiring, (3) training and development, (4) employee morale, and (5) performance management  We also reviewed these same sources and identified numerous leading practices associated with the five topic areas  Among these leading practices, we then selected three leading practices within each of the five areas (for a total of 15 selected practices)  The selected practices were foundational practices that, in our professional judgment, were of particular importance to successful workforce planning and management  Table 14 identifies the five selected workforce areas and 15 selected associated practices  To determine the extent to which the Secret Service had implemented the selected leading workforce planning and management practices for its IT workforce, we obtained and assessed documentation and compared it against the 15 selected practices  In particular, we analyzed the Secret Service’s human capital strategic plan, human capital staffing plan, IT strategic plan, documentation of the component’s staffing model that it used to determine the number of IT staff needed, an independent verification and validation report on the component’s staffing models, documentation of the current number of IT staff, the Secret Service’s recruitment and outreach plans, documentation of DHS’s hiring authorities (which are applicable to the Secret Service), the Secret Service’s training strategic plan, IT workforce training plan, action plans for improving employee morale, and templates used for measuring and reporting employee performance  We also interviewed Secret Service officials—including the CIO, Deputy CIO, and workforce planning staff—about the component’s workforce- related policies and documentation  Further, we discussed with the officials the Secret Service’s efforts to implement the selected workforce practices for its IT workforce  Regarding our assessments of the Secret Service’s implementation of the 15 selected workforce planning and management practices, we assessed a practice as being fully implemented if component officials provided supporting documentation that demonstrated all aspects of the practice  We assessed a practice as not implemented if the officials did not provide any supporting documentation for that practice, or if the documentation provided did not demonstrate any aspect of the practice  We assessed a practice as being partly implemented if the officials provided supporting documentation that demonstrated some, but not all, aspects of the selected practice  In addition, related to our assessments of the Secret Service’s implementation of the five selected overall workforce areas, we assessed each area as follows, based on the implementation of the three selected practices within each area: Fully implemented: The Secret Service provided evidence that it had fully implemented all three of the selected practices within the workforce area; Substantially implemented: The Secret Service provided evidence that it had either fully implemented two selected practices and partly implemented the remaining one selected practice within the workforce area, or fully implemented one selected practice and partly implemented the remaining two selected practices within the workforce area; Partially implemented: The Secret Service provided evidence that it had partly implemented each of the three selected practices within the workforce area; Minimally implemented: The Secret Service provided evidence that it partly implemented two selected practices and not implemented the remaining one selected practice within the workforce area, or partly implemented one selected practice and not implemented the remaining two selected practices within the workforce area; or Not implemented: The Secret Service did not provide evidence that it had implemented any of the three selected practices within the workforce area  To address the third objective—determining the extent to which the Secret Service and DHS have implemented selected performance and progress monitoring practices for IITT—we reviewed leading project monitoring practices and guidance from the Software Engineering Institute  First, we reviewed the practices within the Project Monitoring and Control process area of the Institute’s Capability Maturity Model Integration® for Acquisition  Based on our review, we identified four practices associated with monitoring program performance and progress  In our professional judgment, all four of these practices were of significance to managing the IITT investment given the phase of the life cycle that the investment was in  As such, we elected to include all four of these practices in our review, and combined them into one practice, as follows: Monitor program performance and conduct reviews at predetermined checkpoints or milestones by, among other things, comparing actual cost, schedule, and performance data with estimates in the program plan and identifying significant deviations from established targets or thresholds for acceptable performance levels  Next, given the agile development methodology that the Secret Service was using for certain projects within IITT, we reviewed the Software Engineering Institute’s technical note on the progress monitoring of agile contractors  Based on our review, and in consultation with an internal expert, we selected four agile metrics that the Institute identified as important for successful agile implementations and that, in our professional judgment, were of most significance to monitoring the performance of IITT’s agile projects  We then combined these four metrics into one practice, as follows: Measure and monitor agile projects on velocity (i e , number of story points completed per sprint or release), development progression (e g , the number of features and user stories planned and accepted), product quality (e g , number of defects), and post-deployment user satisfaction  To determine the extent to which DHS and the Secret Service had implemented the first selected practice, we analyzed relevant program management and governance documentation for IITT’s Enabling Capabilities program, and Multi-Level Security, Uniformed Division Resource Management System, and Events Management projects  In particular, we analyzed acquisition program baselines, DHS acquisition decision event memorandums, artifacts from DHS and Secret Service program oversight reviews, cost monitoring reports, program integrated master schedules, and program status briefings, and compared this documentation to the selected practice  We also interviewed Secret Service OCIO officials regarding the Secret Service’s and DHS’s efforts to monitor the IITT investment’s performance and progress  To determine the extent to which the Secret Service had implemented the second selected practice related to measuring and monitoring agile projects on agile metrics (i e , velocity, development progression, product quality, and post-deployment user satisfaction), we obtained and analyzed agile-related documentation for the two projects that the Secret Service was implementing using an agile methodology—Uniformed Division Resource Management System and Events Management  Specifically, to determine the extent to which the Secret Service was measuring and monitoring these two projects on metrics for velocity and development progression, we obtained and analyzed documentation, such as sprint burndown charts and monthly program status reports, and compared it to the selected practice  In addition, the agile metrics for product quality and post-deployment user satisfaction were only applicable to projects that had been deployed to users  As such, these metrics were applicable to the Uniformed Division Resource Management System (which the Secret Service had deployed to users) and were not applicable to Events Management (which the Secret Service had not yet deployed to users, as of early May 2018)  We therefore obtained and analyzed documentation demonstrating that Secret Service OCIO measured product defects for the Uniformed Division Resource Management System  We also requested documentation demonstrating that OCIO had measured and monitored post-deployment user satisfaction for this project, including via a survey  OCIO officials stated that they had not conducted such a survey and were unable to provide documentation demonstrating they had measured post- deployment user satisfaction for the Uniformed Division Resource Management System  To assess the reliability of the cost, schedule, and agile-related data that were in DHS and the Secret Service’s program management and governance documentation for the IITT investment, we (1) analyzed related documentation and assessed the data against existing agency records to identify consistency in the information, and (2) examined the data for obvious outliers, incomplete, or unusual entries  We determined that the data in these documents were sufficiently reliable for our purpose, which was to evaluate the extent to which DHS and the Secret Service had implemented processes for monitoring the IITT investment’s performance and progress  We conducted this performance audit from May 2017 to November 2018 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  As of June 2018, the Secret Service’s Information Integration and Technology Transformation (IITT) investment included two programs (one of which included three projects) and one project that had capabilities that were in planning or development and modernization, as described below: Enabling Capabilities  This program is intended to, among other things, (1) modernize and enhance the Secret Service’s information technology (IT) network infrastructure, including increasing bandwidth and improving the speed and reliability of the Secret Service’s IT system performance; (2) enhance cybersecurity to protect against potential intrusions and viruses; and (3) provide counterintelligence and data mining capabilities to improve officials’ ability to perform the Secret Service’s investigative mission  Enterprise Resource Management System  This program comprises three projects that are intended to provide: a system that will enable the Secret Service’s Uniformed Division to efficiently and effectively plan, provision, and schedule missions (this project is referred to as Uniformed Division Resource Management System), a system that will unify the logistical actions (e g , assigning personnel) surrounding special events that Secret Service agents need to protect, such as the United Nations General Assembly (this project is referred to as Events Management), and a capability for creating schedules for Secret Service agents and administrative, professional, and technical staff, as well as the ability to generate reports on information such as monthly hours worked (this project is referred to as Enterprise-wide Scheduling)  Multi-Level Security  This project is intended to enable authorized Secret Service users to view two levels of classified information on a single workstation  Previously, data at various security levels were contained and used in multiple disparate systems  Multi-Level Security is intended to streamline users’ access to information at different security levels in order to enable them to more quickly and effectively perform their duties  Table 15 provides the planned life cycle cost and schedule estimates (threshold values) for each IITT program and project that had capabilities in planning or development and modernization, as of June 2018  In addition, the table describes any changes in those cost and schedule estimates, as well as the key reasons for any changes, as identified by officials from the Secret Service’s Office of the Chief Information Officer  In addition to the contact named above, the following staff made key contributions to this report: Shannin O’Neill (Assistant Director), Emily Kuhn (Analyst-in-Charge), Quintin Dorsey, Rebecca Eyler, Javier Irizarry, and Paige Teigen 
Report 2:  To be certified as a HUBZone small business, at least 35% of the small business's employees must generally reside in a HUBZone  In FY2017, the federal government awarded $7 53 billion to HUBZone-certified small businesses  $1 90 billion was awarded with a HUBZone preference ($1 49 billion through a HUBZone set-aside, $65 3 million through a HUBZone sole source award, and $346 9 million through a HUBZone price-evaluation preference); $1 53 billion was awarded to HUBZone-certified small businesses in open competition with other firms; and $4 10 billion was awarded with another small business preference (e g , set-asides and sole source awards for small businesses generally and for 8(a), women-owned, and service-disabled veteran-owned small businesses)  This program allows agencies to set aside contracts for SDVOSBs  Also, federal agencies may award sole source contracts to SDVOSBs so long as the award can be made at a fair and reasonable price, and the anticipated total value of the contract, including any options, is below $4 million ($6 5 million for manufacturing contracts)  For purposes of this program, veterans and service-related disabilities are defined as they are under the statutes governing veterans affairs  In FY2017, the federal government awarded $18 2 billion to SDVOSBs  $6 8 billion was awarded through a SDVOSB set-aside award; $4 3 billion was awarded to a SDVOSB in open competition with other firms; and $7 1 billion was awarded with another small business preference (e g , set-asides and sole source awards for small businesses generally and for HUBZone firms, 8(a) firms, and WOSBs)  Under this program, contracts may be set aside for economically disadvantaged WOSBs in industries in which women are underrepresented and substantially underrepresented  Federal agencies may award sole source contracts to WOSBs so long as the award can be made at a fair and reasonable price, and the anticipated total value of the contract, including any options, is below $4 million ($6 5 million for manufacturing contracts)  In FY2017, the federal government awarded $21 3 billion to WOSBs  $648 9 million was awarded with a WOSB preference ($580 5 million through a WOSB set-aside and $68 4 million through a WOSB sole source award); $7 0 billion was awarded to a WOSB in open competition with other firms; and $13 7 billion was awarded with another small business preference (e g , set-asides and sole source awards for small businesses generally and for HUBZone firms, 8(a) firms, and SDVOSBs)  Federal contracting officers are required to provide the SBA's PCR (or, if a PCR is not assigned, the SBA Area Office serving the procuring activity area) a "reasonable period of time" to review any solicitation requiring submission of a small business subcontracting plan and to submit advisory findings before the solicitation is issued  The PCR's advisory comments regarding the small business subcontracting plan's acceptability must be submitted, in writing, to the appropriate contracting officer within five working days after the plan's receipt  As mentioned previously, the SBA's commercial market representatives help prime contractors find small businesses to perform subcontracts; counsel contractors on their responsibility to maximize subcontracting opportunities for small businesses; and conduct periodic reviews, often in concert with a SBA PCR, of contractors awarded contracts that require an acceptable small business subcontracting plan  Federal agencies may also set aside contracts or make sole source awards to small businesses not participating in any other program under certain conditions  The Department of Transportation's (DOT's) Disadvantaged Business Enterprise (DBE) Program originally began in 1980 as a minority/women's business enterprise program "established by regulation under the authority of Title VI of the Civil Rights Act of 1964 and other nondiscrimination statutes that apply to DOT financial assistance programs " Congress has reauthorized the DBE program several times since its inception; most recently in P L  114-94 , the Fixing America's Surface Transportation Act (FAST-Act)  The FAST-Act provides, that, except to the extent the Secretary of Transportation determines otherwise, not less than 10% of the amounts made available for any program under Titles I (federal-aid highways), II (innovative project finance), III (public transportation) and VI (innovation) of the act and 23 U S  Code 403 (highway safety research and development), shall be expended with DBEs  DOT also has a separate DBE program for airport concessions  A DBE is a for-profit small business owned and controlled by socially and economically disadvantaged individuals  Eligibility for the DBE program differs somewhat from the 8(a) program  For example, under the DBE program, women are presumed to be socially and economically disadvantaged individuals  Also, to be regarded as economically disadvantaged, an individual must have a personal net worth (excluding ownership interest in the firm and equity in his or her primary personal residence) that does not exceed $1 32 million  The DBE must also meet SBA size criteria and have average annual gross receipts not exceeding $23 98 million  Size limits for the airport concessions DBE program are higher  The DBE program's eight objectives are to 1  ensure nondiscrimination in the award and administration of DOT-assisted contracts in the department's highway, transit, and airport financial assistance programs; 2  create a level playing field on which DBEs can compete fairly for DOT-assisted contracts; 3  ensure that the department's DBE program is narrowly tailored in accordance with applicable law; 4  ensure that only firms that fully meet the program's eligibility standards are permitted to participate as DBEs; 5  help remove DBE-participation barriers in DOT-assisted contracts; 6  promote the use of DBEs in all types of federally-assisted contracts and procurement activities conducted by recipients; 7  assist the development of firms that can compete successfully in the marketplace outside the DBE program; and 8  provide appropriate flexibility to recipients of federal financial assistance in establishing and providing opportunities for DBEs  Other federal programs promote subcontracting with small disadvantaged businesses (SDBs)  SDBs include 8(a) participants and other small businesses that are at least 51% unconditionally owned and controlled by socially or economically disadvantaged individuals or groups  Individuals owning and controlling non-8(a) SDBs may have net worth of up to $750,000 (excluding ownership interests in the SDB firm and equity in their primary personal residence)  Otherwise, however, SDBs must generally satisfy the same eligibility requirements as 8(a) firms, although they do not apply to the SBA to be designated SDBs in the same way that 8(a) firms do  Federal agencies must negotiate "subcontracting plans" with the apparently successful bidder or offeror on eligible prime contracts prior to awarding the contract  Subcontracting plans set goals for the percentage of subcontract dollars to be awarded to SDBs, among others, and describe efforts that will be made to ensure that SDBs "have an equitable opportunity to compete for subcontracts " Federal agencies may also consider the extent of subcontracting with SDBs in determining to whom to award a contract or give contractors "monetary incentives" to subcontract with SDBs  As of February 11, 2019, the SBA's Dynamic Small Business Search database included 2,538 SBA-certified SDBs and 100,595 self-certified SDBs  The SBA's 7(j) Management and Technical Assistance program provides "a wide variety of management and technical assistance to eligible individuals or concerns to meet their specific needs, including: (a) counseling and training in the areas of financing, management, accounting, bookkeeping, marketing, and operation of small business concerns; and (b) the identification and development of new business opportunities " Eligible individuals and businesses include "8(a) certified firms, SDBs, businesses operating in areas of high unemployment, or low income or firms owned by low income individuals " In FY2017, the 7(j) Management and Technical Assistance program assisted 4,100 small businesses  The SBA's Surety Bond Guarantee program aims to increase small businesses' access to federal, state, and local government contracting, as well as private-sector contracts, by guaranteeing bid, performance, and payment bonds for small businesses that cannot obtain surety bonds through regular commercial channels  The program guarantees individual contracts of up to $6 5 million and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary  The SBA's guarantee ranges from not to exceed 80% to not to exceed 90% of the surety's loss if a default occurs  In FY2017, the SBA guaranteed 10,397 bid and final surety bonds with a total contract value of more than $6 3 billion  A surety bond is a three-party instrument between a surety (someone who agrees to be responsible for the debt or obligation of another), a contractor, and a project owner  The agreement binds the contractor to comply with the terms and conditions of a contract  If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed  The surety bond reduces the risk associated with contracting  Surety bonds are meant to encourage project owners to contract with small businesses that may not have the credit history or prior experience of larger businesses and may be at greater risk of failing to comply with the contract's terms and conditions  Surety bonds are important to small businesses interested in competing for federal contracts because the federal government requires prime contractors—prior to the award of a federal contract exceeding $150,000 for the construction, alteration, or repair of any building or public work of the United States—to furnish a performance bond issued by a surety satisfactory to the contracting officer in an amount that the officer considers adequate to protect the government  Small business mentor-protégé programs typically seek to pair new businesses with more experienced businesses in mutually beneficial relationships  Protégés may receive financial, technical, or management assistance from mentors in obtaining and performing federal contracts or subcontracts, or serving as suppliers under such contracts or subcontracts  Mentors may receive credit toward subcontracting goals, reimbursement of certain expenses, or other incentives  The federal government currently has several mentor-protégé programs to assist small businesses in various ways  The 8(a) Mentor-Protégé Program is a government-wide program designed to assist small businesses "owned and controlled by socially and economically disadvantaged individuals" participating in the SBA's Minority Small Business and Capital Ownership Development Program (commonly known as the 8(a) program) in obtaining and performing federal contracts  For that purpose, mentors may (1) form joint ventures with protégés that are eligible to perform federal contracts set aside for small businesses; (2) make certain equity investments in protégé firms; (3) lend or subcontract to protégé firms; and (4) provide technical or management assistance to their protégés  The SBA's A ll S mall B usiness Mentor-Protégé Program is a government-wide mentor-protégé program for all small business concerns, consistent with the SBA's mentor-protégé program for participants in the SBA's 8(a) Business Development program  The Department of Defense (DOD) Mentor-Protégé Program , in contrast, is agency-specific  It assists various types of small businesses and other entities in obtaining and performing DOD subcontracts and serving as suppliers on DOD contracts  Mentors may (1) make advance or progress payments to their protégés that DOD reimburses; (2) award subcontracts to their protégés on a noncompetitive basis when they would not otherwise be able to do so; (3) lend money to or make investments in protégé firms; and (4) provide or arrange for other assistance  Other agencies also have agency-specific mentor-protégé programs to assist various types of small businesses or other entities in obtaining and performing subcontracts under agency prime contracts  The Department of Homeland Security (DHS), for example, has a mentor-protégé program wherein mentors may provide protégés with rent-free use of facilities or equipment, temporary personnel for training, property, loans, or other assistance  Because these programs are not based in statute, unlike the SBA and DOD programs, they generally rely upon preexisting authorities (e g , authorizing use of evaluation factors) or publicity to incentivize mentor participation  Currently, more than 1,200 mentor-protégé agreements are in place, even though there are issues with the accuracy and thoroughness of some federal agency records  Since 1978, federal agency heads have been required to establish federal procurement goals, in consultation with the SBA, "that realistically reflect the potential of small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals" to participate in federal procurement  Each agency is required, at the conclusion of each fiscal year, to report its progress in meeting the goals to the SBA  In 1988, Congress authorized the President annually to establish government-wide minimum participation goals for procurement contracts awarded to small businesses and small businesses owned and controlled by socially and economically disadvantaged individuals  Congress required the government-wide minimum participation goal for small businesses to be "not less than 20% of the total value of all prime contract awards for each fiscal year" and "not less than 5% of the total value of all prime contract and subcontract awards for each fiscal year" for small businesses owned and controlled by socially and economically disadvantaged individuals  Each federal agency was also directed to "have an annual goal that presents, for that agency, the maximum practicable opportunity for small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals to participate in the performance of contracts let by such agency " The SBA was also required to report to the President annually on the attainment of the goals and to include the information in an annual report to Congress  The SBA negotiates the goals with each federal agency and establishes a small business eligible baseline for evaluating the agency's performance  The agency head is required to "make consistent efforts to annually expand participation by small business concerns from each industry category " If the SBA and the agency cannot agree on the goals, the agency may submit the case to the Office of Management and Budget (OMB) Office of Federal Procurement Policy (OFPP) for resolution  The small business eligible baseline excludes certain contracts that the SBA has determined do not realistically reflect the potential for small business participation in federal procurement (such as those awarded to mandatory and directed sources), contracts funded predominately from agency-generated sources (i e , non-appropriated funds), contracts not covered by the FAR, acquisitions on behalf of foreign governments, and contracts not reported in the Federal Procurement Data System – Next Generation, or FPDS-NG (such as government procurement card purchases and contracts valued less than $10,000)  These exclusions typically account for 18% to 20% of all federal prime contracts each year  The SBA then evaluates the agencies' performance against their negotiated goals annually, using FPDS-NG data, managed by the U S  General Services Administration (GSA), to generate the small business eligible baseline  This information is compiled into the official Small Business Goaling Report, which the SBA releases annually  Each agency that fails to achieve any proposed prime or subcontract goal is required to submit a justification to the SBA on why it failed to achieve a proposed or negotiated goal with a proposed plan of corrective action  Agencies can take credit in every category that is applicable to the recipient of the contract  For example, "when counting goaling achievements, a contract awarded to a service-disabled Veteran-Owned Woman-Owned Small Business would be counted toward the Small Business (SB) goal, the Service-Disabled Veteran-Owned Small Business (SDVOSB) goal and the Women-Owned Small Business (WOSB) goal  However, these category counts are not summed to triple the total count  The Sum of Parts Does Not Equal the Whole (italics in original) " Over the years, federal government-wide procurement goals have been established for small businesses generally ( P L  100-656 , the Business Opportunity Development Reform Act of 1988, and P L  105-135 , the HUBZone Act of 1997—Title VI of the Small Business Reauthorization Act of 1997); small businesses owned and controlled by socially and economically disadvantaged individuals ( P L  100-656 ); women ( P L  103-355 , the Federal Acquisition Streamlining Act of 1994); small businesses located within a HUBZone ( P L  105-135 ); and small businesses owned and controlled by a service-disabled veteran ( P L  106-50 , the Veterans Entrepreneurship and Small Business Development Act of 1999)  The current federal small business procurement goals are at least 23 0% of the total value of all small business eligible prime contract awards to small businesses for each fiscal year; 5 0% of the total value of all small business eligible prime contract awards and subcontract awards to small disadvantaged businesses (including participants in the SBA's 8(a) Program) for each fiscal year; 5 0% of the total value of all small business eligible prime contract awards and subcontract awards to women-owned small businesses; 3 0% of the total value of all small business eligible prime contract awards and subcontract awards to HUBZone small businesses; and 3 0% of the total value of all small business eligible prime contract awards and subcontract awards to service-disabled veteran-owned small businesses  There are no punitive consequences for not meeting these goals  However, the SBA's Small Business Goaling Report is distributed widely, receives media attention, and serves to heighten public awareness of the issue of small business contracting  For example, agency performance as reported in the SBA's Small Business Goaling Report is often cited by Members during their questioning of federal agency witnesses during congressional hearings  As shown in Table 1 , the FY2017 Small Business Goaling Report , using FPDS-NG data, indicates that federal agencies met the federal procurement goal for small businesses generally, small disadvantaged businesses, and service-disabled veteran-owned small businesses in FY2017  Table 1 also provides, for comparative purposes, the percentage of total reported federal contracts (without exclusions) awarded to those small businesses in FY2017  Before awarding a federal contract, the contracting officer must affirmatively determine that the business is responsible to perform the contract  If the contracting officer determines that an apparent successful small business offeror lacks certain elements of responsibility (e g , is unable to fulfill the requirements of a specific government procurement because it lacks capability, competency, capacity, credit, integrity, perseverance, tenacity, or limitations on subcontracting), the officer is required to refer the matter in writing to the SBA for review and a possible Certificate of Competency (COC), even if the next acceptable offer is also from a small business  The COC certifies in writing that the small business meets all required elements of responsibility for the purpose of receiving and performing a specific government contract  The "COC program empowers the SBA to certify to contracting officers as to all elements of responsibility of any small business concern to receive and perform a specific government contract  The COC program does not extend to questions concerning regulatory requirements imposed and enforced by other federal agencies " As mentioned previously, the SBA's commercial market representatives conduct periodic compliance reviews of contractors awarded contracts that require an acceptable small business subcontracting plan  In addition, once the contract is completed, federal agencies are required to pay the contractor on a timely basis and pay interest penalties for late payments  Under specified circumstances, federal agencies may also pay contractors before the contract's payment's due date  The periodic compliance review can take place on-site, at the contracting agency, or virtual  Materials that may be reviewed include the contractor's contract files, correspondence that is directly or indirectly related to the contract, IT systems, subcontracting methods, and procedures  Contractors are selected randomly for audit  The SBA may enter into agreements with other federal agencies to conduct these assessments  The compliance report includes compliant and non-compliant items found during the assessment of the contractor's subcontracting activities and a rating indicating the contractor's level of compliance or non-compliance, ranging from unsatisfactory to outstanding  If any deficiencies are found, the contractor is required to submit, within 30 days of the compliance review rating letter date, a corrective action plan (CAP)  The CAP is submitted to the SBA Area Office via email, or any method designated by the SBA  The commercial market representative conducts a follow-up compliance report within six months to a year of the date the SBA acknowledges receipt of the contractor's CAP to ensure that corrective actions have been taken to eliminate the deficiencies  The SBA keeps the federal agency that awarded the contract informed of the contractor's adherence to correcting the deficiencies  If the contractor refuses to provide or address all deficiencies in the CAP, a delinquent CAP letter is sent advising the contractor that it has 15 days from the letter's date to comply with federal regulations  If an acceptable CAP is not received in the allotted time frame the case is escalated to the SBA's subcontracting program manager who informs the SBA's Office of Government Contracting director and works with the SBA's Office of General Counsel and the federal agency that awarded the contract for resolution or to begin accessing liquidated damages  Once a contract is awarded, federal agencies are generally required to pay interest to prime contractors on any invoice payments the agency fails to make by the date(s) specified in the contract, or within 30 days of receipt of a proper invoice for the amount due if no date is specified in the contract  Similar requirements exist for prime contractors in paying subcontractors on construction contracts  These requirements are especially important for small businesses in the construction industry  Specifically, every construction contract awarded by a federal agency must contain clauses obligating the prime contractor to (1) pay the subcontractor for "satisfactory performance" under the subcontract within seven days of receiving payment from the agency and (2) pay interest on any amounts that are not paid within the proper time frame  The contract must also obligate the prime contractor to include similar payment and interest penalty terms in its subcontracts, as well as require its subcontractors to impose these terms on their subcontractors  This latter provision ensures that the payment and interest penalty requirements flow down to all tiers of construction subcontractors  In addition, required subcontracting plans must incorporate terms obligating the prime contractor to notify the agency awarding the contract in writing if a subcontractor is paid a reduced price for goods supplied or services completed under the contract, or if payment is made to the subcontractor more than 90 days past due  The prime contractor must include the reason for the reduction in payment or failure to pay a subcontractor within 90 days  If the contracting officer for a covered contract (a contract that requires an acceptable subcontracting plan) determines that a prime contractor has a history of unjustified, untimely payments to contractors, the contracting officer shall record the contractor's identity, describe the circumstances under which the contractor may be determined to have a history of unjustified, untimely payments to subcontractors, and include the contractor's identity in, and make publicly available through, the Federal Awardee Performance and Integrity Information System, or any successor  This information is used by federal agencies to "evaluate the business ethics and quality of prospective contractors competing for Federal contracts and to protect taxpayers from doing business with contractors that are not responsible sources " Federal agencies are permitted to make an accelerated payment up to seven days before the required payment date in a federal contract, or earlier if the agency deems it necessary on a case-by-case basis if, after receiving a proper invoice, it is in the best interest of the government, and any of the following is true: the invoice in under $2,500; the payment is to a small business; or the payment is related to an emergency, disaster, or military deployment  In addition, the Secretary of Defense is required, to the fullest extent permitted by law, to establish an accelerated payment date for its small business prime contractors, with a goal of 15 days after receipt of a proper invoice for the amount due if a specific payment date is not established by contract  The Secretary of Defense is also required to establish, to the fullest extent permitted by law, an accelerated payment date for its prime contractors that subcontract with small businesses, with a goal of 15 days after receipt of a proper invoice for the amount due if a specific payment date is not established by contract and the prime contractor agrees to make payments to the subcontractor "in accordance with the accelerated payment date, to the maximum extent practicable, without any further consideration from or fees charged to the subcontractor " The small business contracting programs described in this report generally have strong bipartisan support  However, that does not mean that these programs face no opposition or that issues have not been raised concerning the impact or operations of specific programs  For example, small business advocates seek policies that reduce or eliminate exclusions that narrow the reach of small business contracting preferences, want the SBA to use the total value of all prime contract awards in the Small Business Goaling Report, and want the SBA to use a more discerning methodology for awarding performance grades to federal agencies in meeting its small business contracting goals  Critics have questioned some of these programs' effectiveness, in terms of both promoting small business opportunities to win federal contracts and a more diversified, robust economy  Many observers judge the relative success or failure of federal efforts to enhance small business contracting opportunities by whether the federal government and individual federal agencies meet the procurement goals in the annual Small Business Goaling Report  In recent years, the federal government has generally succeeded in meeting the government-wide goals of awarding 23% of the total value of all small business eligible prime contract awards to small businesses generally, 5% to SDBs, and 3% to SDVOSBs  However, it has had difficulty meeting the goals of 5% to WOSBs and 3% to HUBZone small businesses  The Small Business Goaling Report is the most convenient measure available to compare federal small business contracting performance over time, but it has limitations  For example, the report does not include all federal contracts, because some are not deemed to be small business eligible and others are not recorded in the FPDS-NG  In addition, the report does not evaluate the effect these contracts have on small businesses, industry competitiveness, or the overall economy  As one group of researchers has argued, the entire goal-setting process … is geared to measuring the dollars and contracts awarded to small business, and pays little attention to the effect that access to government contracts has on small business starts, growth, and wealth generation  Results of the program are also hard to isolate, difficult to measure, and generally not judged against the next best or other alternative policies [emphasis in original]  Comprehensive studies examining the effect of small business contracting preferences on small business startups, growth, wealth generation, and industry competitiveness may prove useful for congressional oversight  In the meantime, although the Small Business Goaling Report has its limitations, it can help policymakers identify programs most in need of examination  For example, the SBA has announced that it is focusing additional efforts on promoting the HUBZone program to federal contracting officials, primarily due to the continuing difficulties federal agencies have had in meeting the 3% goal for HUBZone small businesses 

ground_truth: Commonly known for protecting the President, the Secret Service also plays a leading role in investigating and preventing financial and electronic crimes. To accomplish its mission, the Secret Service relies heavily on the use of IT infrastructure and systems. In 2009, the component initiated the IITT investment—a portfolio of programs and projects that are intended to, among other things, improve systems availability and security in support of the component's business operations. GAO was asked to review the Secret Service's oversight of its IT portfolio and workforce. This report discusses the extent to which the (1) CIO implemented selected IT oversight responsibilities, (2) Secret Service implemented leading IT workforce planning and management practices, and (3) Secret Service and DHS implemented selected performance monitoring practices for IITT. GAO assessed agency documentation against 14 selected component CIO responsibilities established in DHS policy; 15 selected leading workforce planning and management practices within 5 topic areas; and two selected leading industry project monitoring practices that, among other things, were, in GAO's professional judgment, of most significance to managing IITT. The U.S. Secret Service (Secret Service) Chief Information Officer (CIO) fully implemented 11 of 14 selected information technology (IT) oversight responsibilities, and partially implemented the remaining 3. The CIO partially implemented the responsibilities to establish a process that ensures the Secret Service reviews IT contracts; ensure that the component's IT policies align with the Department of Homeland Security's (DHS) policies; and set incremental targets to monitor program progress. Additional efforts to fully implement these 3 responsibilities will further position the CIO to effectively manage the IT portfolio. Of the 15 selected practices within the 5 workforce planning and management areas, the Secret Service fully implemented 3 practices, partly implemented 8, and did not implement 4 (see table). Within the strategic planning area, the component partly implemented the practice to, among other things, develop IT competency needs. While the Secret Service had defined general core competencies for its workforce, the Office of the CIO (OCIO) did not identify all of the technical competencies needed to support its functions. As a result, the office was limited in its ability to address any IT competency gaps that may exist. Also, while work remains to improve morale across the component, the Secret Service substantially implemented the employee morale practices for its IT staff. Secret Service officials said the gaps in implementing the workforce practices were due to, among other things, their focus on reorganizing the IT workforce within OCIO. Until the Secret Service fully implements these practices for its IT workforce, it may be limited in its ability to ensure the timely and effective acquisition and maintenance of the component's IT infrastructure and services. Of the two selected IT project monitoring practices, DHS and the Secret Service fully implemented the first practice to monitor the performance of the Information Integration and Technology Transformation (IITT) investment. In addition, for the second practice—to monitor projects on incremental development metrics—the Secret Service fully implemented the practice on one of IITT's projects and partially implemented it on another. In particular, OCIO did not fully measure post-deployment user satisfaction with the system on one project. OCIO plans to conduct a user satisfaction survey of the system by September 2018, which should inform the office on whether the system is meeting users' needs. GAO is making 13 recommendations, including that the Secret Service establish a process that ensures the CIO reviews all IT contracts, as appropriate; and identify the skills needed for its IT workforce. DHS concurred with all recommendations and provided estimated dates for implementing each of them.