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



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



Report 2: To help manage its multi-billion dollar acquisition investments, DHS has established policies and processes for acquisition management, requirements development, test and evaluation, and resource allocation  The department uses these policies and processes to deliver systems that are intended to close critical capability gaps, helping enable DHS to execute its missions and achieve its goals  DHS policies and processes for managing its major acquisition programs are primarily set forth in its Acquisition Management Directive 102-01 and Acquisition Management Instruction 102-01-001  DHS issued the initial version of this directive in November 2008 in an effort to establish an acquisition management system that effectively provides required capability to operators in support of the department’s missions  DHS’s Under Secretary for Management is currently designated as the department’s Chief Acquisition Officer and, as such, is responsible for managing the implementation of the department’s acquisition policies  DHS’s Under Secretary for Management serves as the acquisition decision authority for the department’s largest acquisition programs, those with LCCEs of $1 billion or greater  Component Acquisition Executives—the most senior acquisition management officials within each of DHS’s components—may be delegated acquisition decision authority for programs with cost estimates between $300 million and less than $1 billion  Table 1 identifies how DHS has categorized the 28 major acquisition programs we review in this report, and table 7 in appendix III specifically identifies the programs within each level  DHS acquisition management policy establishes that a major acquisition program’s decision authority shall review the program at a series of predetermined acquisition decision events to assess whether the major program is ready to proceed through the acquisition life-cycle phases  Depending on the program, these events can occur within months of each other, or be spread over several years  Figure 1 depicts the acquisition life cycle established in DHS acquisition management policy  An important aspect of an acquisition decision event is the decision authority’s review and approval of key acquisition documents  See table 2 for a description of the type of key acquisition documents requiring department-level approval before a program moves to the next acquisition phase  DHS acquisition management policy establishes that the APB is the agreement between program, component, and department-level officials establishing how systems will perform, when they will be delivered, and what they will cost  Specifically, the APB establishes a program’s schedule, costs, and key performance parameters  DHS defines key performance parameters as a program’s most important and non- negotiable requirements that a system must meet to fulfill its fundamental purpose  For example, a key performance parameter for an aircraft may be airspeed and a key performance parameter for a surveillance system may be detection range  The APB schedule, costs, and key performance parameters are defined in terms of an objective and minimum threshold value  According to DHS policy, if a program fails to meet any schedule, cost, or performance threshold approved in the APB, it is considered to be in breach  Programs in breach are required to notify their acquisition decision authority and develop a remediation plan that outlines a time frame for the program to return to its APB parameters, re-baseline—that is, establish new schedule, cost, or performance goals—or have a DHS-led program review that results in recommendations for a revised baseline  In addition to the acquisition decision authority, other bodies and senior officials support DHS’s acquisition management function: The Acquisition Review Board reviews major acquisition programs for proper management, oversight, accountability, and alignment with the department’s strategic functions at acquisition decision events and other meetings as needed  The board is chaired by the acquisition decision authority or a designee and consists of individuals who manage DHS’s mission objectives, resources, and contracts  The Office of Program Accountability and Risk Management (PARM) is responsible for DHS’s overall acquisition governance process, supports the Acquisition Review Board, and reports directly to the Under Secretary for Management  PARM develops and updates program management policies and practices, reviews major programs, provides guidance for workforce planning activities, provides support to program managers, and collects program performance data  Components, such as U S  Customs and Border Protection, the Transportation Security Administration, and the U S  Coast Guard sponsor specific acquisition programs  The head of each component is responsible for oversight of major acquisition programs once the programs complete delivery of all planned capabilities to end users  Component Acquisition Executives within the components are responsible for overseeing the execution of their respective portfolios  Program management offices, also within the components, are responsible for planning and executing DHS’s individual programs  They are expected to do so within the cost, schedule, and performance parameters established in their APBs  If they cannot do so, programs are considered to be in breach and must take specific steps, as noted above  Figure 2 depicts the relationship between acquisition managers at the department, component, and program level  DHS established a Joint Requirements Council (JRC) to develop and lead a component-driven joint requirements process for the department  The JRC has issued policies outlining a process for analyzing and validating capability gaps, needs, and requirements  The JRC consists of a chair and 14 members who are senior executives or officers that represent key DHS headquarters offices and seven of the department’s operational components  The JRC chair rotates annually among the seven operational components  JRC members represent the views of their components or office leadership, endorse and prioritize validated capability needs and operational requirements (user-defined performance parameters outlining what a system must do), and make recommendations that are supported by analytical rigor  Figure 3 depicts the current headquarters and component members of the JRC  The JRC provides input to two senior-level entities: The Acquisition Review Board—as a member, the JRC chair advises the board on capability gaps, needs, and requirements at key milestones in the acquisition life cycle  The Deputy’s Management Action Group, which the Secretary established in April 2014, is a decision-making body that is chaired by the Deputy Secretary  Its membership consists of the DHS Chief of Staff, DHS Under Secretaries, senior operational component deputies and select support component deputies, and the Chief Financial Officer  The group provides recommendations to the Deputy Secretary for consideration in the annual resource allocation process that reflects DHS’s investment priorities  The group reviews JRC- validated capability needs and recommendations, provides direction and guidance to the JRC, and endorses or directs related follow-on JRC activities  The JRC is responsible for validating proposed capability needs and requirements for all major acquisitions, as well as for programs that are joint or of interest to the Deputy’s Management Action Group, regardless of level  See table 3 for a description of the key requirements documents requiring JRC validation  In general, the DHS requirements development process moves from broad mission needs and capability gaps to operational requirements  See figure 4  In May 2009, DHS established policies that describe processes for testing the capabilities delivered by the department’s major acquisition programs  The primary purpose of test and evaluation is to provide timely, accurate information to managers, decision makers, and other stakeholders to reduce programmatic, financial, schedule, and performance risks  We provide an overview of each of the 28 programs’ test activities in the individual program assessments presented in appendix I  DHS testing policy assigns specific responsibilities to particular individuals and entities throughout the department: Program managers have overall responsibility for planning and executing their programs’ testing strategies, including scheduling and funding test activities and delivering systems for testing  They are also responsible for controlling developmental testing, which is used to assist in the development and maturation of products, manufacturing, or support processes  Developmental testing includes engineering- type tests used to verify that design risks are minimized, substantiate achievement of contract technical performance, and certify readiness for operational testing  Operational test agents are responsible for planning, conducting, and reporting on operational test and evaluation, which is intended to identify whether a system can meet its key performance parameters and provide an evaluation of the operational effectiveness, suitability, and cybersecurity of a system in a realistic environment  Operational effectiveness refers to the overall ability of a system to provide a desired capability when used by representative personnel  Operational suitability refers to the degree to which a system can be placed into field use and sustained satisfactorily  The operational test agents may be organic to the component, another government agency, or a contractor, but must be independent of the developer in order to present credible, objective, and unbiased conclusions  The Director, Office of Test and Evaluation is responsible for approving major acquisition programs’ operational test agent and test and evaluation master plans, among other things  A program’s test and evaluation master plan must describe the developmental and operational testing needed to determine technical performance and operational effectiveness, suitability, and cybersecurity  As appropriate, the Director is also responsible for observing operational tests, reviewing operational test agents’ reports, and assessing the reports  Prior to a program’s acquisition decision event 3, the Director provides the program’s acquisition decision authority a letter of assessment that includes an appraisal of the program’s operational test, a concurrence or non-concurrence with the operational test agent’s evaluation, and any further independent analysis  As an acquisition program proceeds through its life cycle, the testing emphasis moves gradually from developmental testing to operational testing  See figure 5  DHS has established a planning, programming, budgeting, and execution process to allocate resources to acquisition programs and other entities throughout the department  DHS uses this process to produce the department’s annual budget request and multi-year funding plans presented in the FYHSP, a database that contains, among other things, 5-year funding plans for DHS’s major acquisition programs  According to DHS guidance, the 5-year plans should allow the department to achieve its goals more efficiently than an incremental approach based on 1-year plans  DHS guidance also states that the FYHSP articulates how the department will achieve its strategic goals within fiscal constraints  At the outset of the annual resource allocation process, the department’s Offices of Policy and Chief Financial Officer provide planning and fiscal guidance, respectively, to the department’s components  In accordance with this guidance, the components should submit 5-year funding plans to the Chief Financial Officer  These plans are subsequently reviewed by DHS’s senior leaders, including the DHS Secretary and Deputy Secretary  DHS’s senior leaders are expected to modify the plans in accordance with their priorities and assessments, and they document their decisions in formal resource allocation decision memorandums  DHS submits the revised funding plans to the Office of Management and Budget, which uses them to inform the President’s annual budget request—a document sent to Congress requesting new budget authority for federal programs, among other things  In some cases, the funding appropriated to certain accounts in a given fiscal year can be carried over to subsequent fiscal years  Figure 6 depicts DHS’s annual resource allocation process  Federal law requires DHS to submit an annual FYHSP report to Congress at or about the same time as the President’s budget request  This report presents the 5-year funding plans in the FYHSP database at that time  Two offices within DHS’s Office of the Chief Financial Officer support the annual resource allocation process: The Office of Program Analysis and Evaluation (PA&E) is responsible for establishing policies for the annual resource allocation process and overseeing the development of the FYHSP  In this role, PA&E develops the Chief Financial Officer’s planning and fiscal guidance, reviews the components’ 5-year funding plans, advises DHS’s senior leaders on resource allocation issues, maintains the FYHSP database, and submits the annual FYHSP report to Congress  The Cost Analysis Division is responsible for reviewing, analyzing, and evaluating acquisition programs’ LCCEs to ensure the cost of DHS programs are presented accurately and completely, in support of resource requests  This division also supports affordability assessments of the department’s budget, in coordination with PA&E, and develops independent cost estimates for major acquisition programs upon request by DHS’s Under Secretary for Management or Chief Financial Officer  Of the 24 programs we assessed with approved schedule and cost goals, 10 were on track to meet those goals during 2017  The other 14 programs were not on track because they changed or breached their schedule goals, cost goals, or both  We found that most programs updated their cost estimates in response to requirements DHS established in January 2016 that are intended to provide decision makers with more timely information  These actions are in accordance with GAO’s best practice to regularly update cost estimates and we plan to use these updated estimates to measure programs’ cost changes going forward  Based on our April 2014 recommendation, DHS revised the format of its fiscal year 2018–2022 FYHSP report to Congress to include acquisition affordability tables for select major acquisition programs  However, the report shows—and our analysis of programs’ current cost estimates confirms— that some programs face acquisition funding gaps in fiscal year 2018  We also reviewed 4 programs that were early in the acquisition process and planned to establish department-approved schedule and cost goals in calendar year 2017  However, these programs were delayed in getting department approval for their initial APBs for various reasons and, therefore, we excluded them from our assessment of whether programs were on track to meet their schedule and cost goals during 2017  DHS leadership subsequently approved initial APBs for 2 particularly complex and costly programs—a border wall system along the southwest U S  border and the Coast Guard’s Heavy Polar Icebreaker—in January 2018  We plan to assess these programs in next year’s review, but provide more details on all 4 additional programs we reviewed in the individual assessments in appendix I  Table 4 summarizes our findings and we present more detailed information after the table  From January 2017 to January 2018, 10 of the 24 programs we assessed with department-approved APBs were on track to meet their schedule and cost goals  This is fewer than our last annual review in which we found that 17 of the 26 programs we assessed were on track during 2016  Three of the 10 programs on track during 2017 were on track against initial schedule and cost goals; that is, the schedule and cost estimates in the baseline DHS leadership initially approved after the department’s acquisition management policy went into effect in November 2008  The other 7 programs had re-baselined prior to January 2017 and were on track against revised schedules and cost estimates that reflected past schedule slips, cost growth, or both  However, some of the programs on track in 2017 identified risks that may lead to schedule slips or cost growth in the future  For example, officials from the Technology Infrastructure Modernization program told us that staffing challenges may impede their ability to execute the program in accordance with its current APB  We also identified 2 programs that are in the process of re-baselining or plan to re-baseline in the near future to account for significant program changes or to add capabilities  For example, the Next Generation Networks Priority Services program plans to update its APB to establish schedule, cost, and performance goals for the next increment, which is intended to address landline capabilities for providing government officials emergency telecommunication services  During 2017, 14 of the 24 programs we assessed with department- approved APBs were not on track  Twelve of these programs had at least one major acquisition milestone that slipped, including 6 of these programs that also changed or breached their cost goals  Two additional programs changed or breached only their cost goals  As of January 2018, 6 of the 12 programs that experienced a schedule slip were in breach and had not yet revised their goals  Therefore, the magnitude of the schedule slips is unknown  For the remaining 6 programs, the change in schedule during 2017 ranged from a delay of 6 months to 66 months  Figure 7 identifies the programs that experienced schedule slips and the extent to which their major milestones slipped in 2017, as well as—for additional context—in prior years  While there are various reasons for schedule delays, the result is that end users may not get needed capabilities when they originally anticipated  Examples of the reasons why these key milestones slipped in 2017 include the following: New requirements: For example, the Passenger Screening Program re-baselined in May 2017 for the fifth time since its initial APB was approved in January 2012  This latest re-baseline was to remediate a 17-month breach caused by delays in incorporating new cybersecurity requirements in one of the program’s transportation security equipment technologies, known as the Credential Authentication Technology  The program now plans to achieve full operational capability for this system by December 2023—more than 9 years later than it initially planned  In another example, the Tactical Communications Modernization program re-baselined in November 2017—4 months after the program notified DHS leadership that it would not achieve full operational capability as planned  The reason for this re-baseline was to resolve issues related to federal information security requirements  The program now plans to achieve this milestone by March 2019, which is more than a year later than its initial APB threshold  Technical challenges: For example, the Continuous Diagnostics and Mitigation program re-baselined in June 2017 to account for significant coverage gaps identified during the deployment of phase 1 sensors and to establish cost, schedule, and performance goals for phase 3 tools  The program’s full operational capability date slipped almost 4 years after this milestone was redefined as the point in time at which phase 1–3 tools are available to all participating civilian agencies  Additionally, the Automated Commercial Environment program declared a schedule breach in April 2017—its second in less than a year—after encountering difficulties developing its remaining functionality  These difficulties have caused further delays to the program’s final acquisition milestone decision  External factors: Officials from the Logistics Supply Chain Management System program notified DHS leadership in September 2017 that the program would not complete all required activities to achieve acquisition decision event 3 and subsequent events, including full operational capability  The primary reason for the delay was because program staff were deployed to support response and recovery efforts during the 2017 hurricane season  Additionally, the Medium Lift Helicopter program experienced delays in getting key acquisition documents approved in time to achieve its acquisition decision event 3  These delays were attributed, in part, to DHS leadership directing Customs and Border Protection to develop a comprehensive border plan that included the helicopter’s capabilities  We elaborate on the reasons for all 12 programs’ schedule slips in the individual assessments in appendix I  Of the 14 programs not on track during 2017, 8 revised or breached their established cost goals  Four of these 8 programs revised their cost goals when they re-baselined to address new requirements and technical challenges, among other things  When the Passenger Screening Program re-baselined in May 2017, the program’s APB threshold for its life-cycle costs increased $418 million (8 percent) over its previous APB  However, the revised threshold is $1 billion below the threshold established in the program’s initial APB, which was approved in January 2012  From 2012 to 2015, the program’s scope was reduced in response to funding constraints  However, emerging threats drove the program to increase capability requirements, which has subsequently increased costs  When the Continuous Diagnostics and Mitigation program re- baselined in June 2017, the APB threshold for life-cycle costs decreased by $15 million (1 percent)  However, the program shifted some acquisition costs to operations and maintenance (O&M) to be consistent with DHS’s new common appropriations structure  This, in addition to other changes, increased the APB threshold for O&M by $631 million (3,712 percent)  When the National Security Cutter program re-baselined in November 2017 to account for a ninth ship—as directed by Congress—the APB cost thresholds for acquisition and O&M increased by $453 million (8 percent) and $123 million (1 percent), respectively  When the Immigration and Customs Enforcement’s TECS Modernization program re-baselined in November 2017 in preparation for acquisition decision event 3, the APB cost thresholds increased overall  Specifically, the acquisition cost threshold decreased by $14 million (6 percent) when the program included actual costs through fiscal year 2016, among other things, and the O&M cost threshold increased by $147 million (92 percent) when the program extended the estimate by 4 years and included support costs for an additional 11 years  The other 4 programs breached their established cost goals during 2017  The Medium Lift Helicopter and Electronic Baggage Screening programs breached certain APB cost thresholds when they shifted costs between categories, such as O&M to acquisitions or vice versa, to be consistent with DHS’s new common appropriations structure  The Tactical Communications Modernization program experienced a cost breach primarily because of increases in costs for contractor labor and support for facilities and infrastructure  The program’s APB cost threshold for O&M increased by $110 million (23 percent) when it re-baselined in November 2017  The Automated Commercial Environment program experienced a cost breach because it had to extend its contracts to address the development difficulties discussed above  The magnitude of the program’s cost goal changes is not yet known because the program does not plan to revise its APB until August 2018  We elaborate on the reasons for all 8 programs’ cost goal changes or breaches in the individual program assessments in appendix I  In January 2016, based on several of our past recommendations, DHS required major acquisition programs to begin submitting to headquarters (1) detailed data on program affordability, such as updates to the program’s LCCE and funding source information, to help inform the department’s annual resource allocation process, and (2) an annual LCCE update  These requirements are intended to provide more timely information that may improve DHS’s efforts to address acquisition program affordability issues, as well as internal and external oversight of programs’ progress against its cost goals  These actions are in accordance with GAO’s cost estimating best practices, which state that cost estimates should be updated with actual costs so that they are always relevant and current  As a result, we have used these sources to provide the programs’ current estimate in the individual assessments in appendix I, as appropriate, and plan to use these data sources to measure programs’ cost changes going forward  According to officials from the Cost Analysis Division, a program’s annual LCCE update should inform the affordability submission to support the annual resource allocation process and can be completed at any point during the fiscal year leading up to this process  We examined documentation to ascertain whether the programs we reviewed complied with the two requirements  For the 24 programs we assessed with department-approved APBs, we found the following: All 24 programs submitted the detailed data on program affordability to headquarters by June 2017 to inform the fiscal year 2019 resource allocation cycle  Most programs’ submissions accounted for changes since the program’s last LCCE was approved by DHS’s Chief Financial Officer, except three  For example, the Long Range Surveillance Aircraft program’s submission reflected no updates from its November 2011 LCCE because the program was in the process of re-baselining to account for significant changes  The program began re-baselining nearly 3 years ago and has been delayed for various reasons, including challenges with the vendor hired to complete a revision of the program’s LCCE  Eighteen of the 24 programs submitted annual LCCE updates  Three programs—Automated Commercial Environment, H-65, and Transformation—did not submit an annual LCCE update because they were in breach  The other 3 programs—all within the Coast Guard—did not submit an annual LCCE because, according to Coast Guard officials, they have limited internal cost estimating capability and rely on outside sources for this service, which led to delays in completing the annual LCCEs for these programs  Coast Guard officials said they are reviewing options to resolve these delays and improve the Coast Guard’s cost estimating capability  Cost Analysis Division officials anticipate the Coast Guard will increase compliance with the annual LCCE requirement in fiscal year 2018  They also plan to update the annual LCCE template to include additional information, such as comparisons of the updated estimates to the program’s APB cost goals and projected funding  In addition, DHS revised the format of its FYHSP report to Congress, improving insight into major programs’ acquisition funding, but decreasing insight into O&M funding  In April 2014, we found that DHS could better communicate its funding needs for acquisition programs to Congress and recommended that DHS enhance the content for future FYHSP reports by presenting programs’ annual cost estimates and any anticipated funding gaps, among other things  DHS concurred with the recommendation and, for the first time, included acquisition affordability tables that presented programs’ annual acquisition cost estimates compared to projected acquisition funding for select major acquisition programs in its FYHSP report for fiscal years 2018–2022  However, DHS no longer reported O&M funding for individual programs  DHS reported in the FYHSP that it focused on acquisition information because O&M funding estimates are generally stable year-to-year and components manage O&M in various ways, such as by individual program or across a portfolio of programs  By removing O&M funding information in the FYHSP for all programs, DHS presents an incomplete picture of programs’ full funding needs and affordability  In April 2018, we assessed the extent to which DHS had accounted for O&M costs and funding in greater detail and recommended that DHS reverse the exclusion of O&M funding at the acquisition program level in its FYHSP report to Congress for all components  DHS officials stated that they plan to re-introduce O&M funding for major acquisition programs in the FYHSP report for fiscal years 2019–2023 based on multiple internal discussions about the best way to present a more comprehensive view of programs’ total costs and feedback from key stakeholders, such as the Office of Management and Budget  Based on the information presented in the FYHSP report for fiscal years 2018–2022, DHS’s acquisition portfolio is not affordable over the next 5 years  For example, the report contained acquisition affordability tables for 18 of the 24 programs we assessed that have approved APBs  Of these 18 programs, 9 were projected to have an acquisition affordability gap in fiscal year 2018  However, some of these projections are outdated since the FYHSP report—which was issued in September 2017—relied on cost information as of April 2016  Therefore, we updated these tables using the programs’ current acquisition cost estimate presented in the individual assessments in appendix I  Based on our assessment of programs’ current cost estimates, we also found that a total of 9 programs are projected to have an acquisition affordability gap in fiscal year 2018  However, 3 of these 9 programs were different programs than those identified based on the FYHSP report  Of the 9 programs we identified with a projected acquisition affordability gap in fiscal year 2018, we found the following: Five programs identified other funding, such as funding from previous fiscal years that remained available for obligation—known as carryover funding—which would address their projected acquisition funding gap  For example, in the FYHSP report, DHS projected allocating approximately $16 million in funding for the Technology Infrastructure Modernization program in fiscal year 2018 to cover an estimated $16 million in acquisition costs  However, in its November 2017 annual LCCE update, this program’s acquisition cost increased to almost $30 million, resulting in a projected acquisition affordability gap of almost 45 percent  The program plans to realign $57 million in O&M carryover funding to cover this and any future acquisition shortfalls  Four programs did not identify other funding that would address their projected acquisition funding gap, which increases the likelihood that they will cost more and take longer to deliver capabilities to end users than expected  For example, in the FYHSP report, DHS projected allocating $109 million in funding for the Non-Intrusive Inspection Systems program in fiscal year 2018 to cover an estimated $103 million in acquisition costs  However, in its April 2017 annual LCCE update, this program’s acquisition costs increased to nearly $186 million, resulting in a projected acquisition affordability gap of 41 percent  The program identified only $2 5 million in fiscal year 2017 acquisition carryover funding  Further, 5 of the 24 programs we assessed were not included in the fiscal years 2018–2022 FYHSP report because they were no longer expected to receive acquisition funding  Officials from 3 of these 5 programs projected funding gaps that could cause future program execution challenges, such as schedule slips or cost growth  For example, the National Bio and Agro-Defense Facility anticipates a projected funding shortfall of approximately $90 million over the next 5 years, which officials said could delay a number of activities to make the facility operational  We elaborate on programs’ affordability over the next 5 years in the individual program assessments in appendix I  We assessed DHS’s policies outlining the department’s processes for acquisition management, resource allocation, and requirements and found that, when considered collectively, they generally reflect key portfolio management practices  In March 2007, we examined the practices that private sector entities use to achieve a balanced mix of new projects and found that successful commercial companies use a disciplined and integrated approach to prioritize needs and allocate resources when making investments  This approach, known as portfolio management, requires companies to view each of their investments as contributing to a collective whole, rather than as independent and unrelated  With this perspective, companies can effectively (1) identify and prioritize opportunities, and (2) allocate available resources to support the highest priority—or most promising—opportunities  Based on this and other work, we identified four key practice areas for portfolio management in September 2012  We previously assessed DHS’s acquisition management and resource allocation policies against our key portfolio management practices in September 2012 and April 2014, respectively  We found that the policies in place at the time of our reviews did not fully reflect all of the key portfolio management practices and recommended that DHS revise its policies to do so  DHS concurred with our recommendations and subsequently took actions to mature and solidify the department’s portfolio management processes and policies  In April 2014, the Secretary of Homeland Security issued a memorandum titled Strengthening Departmental Unity of Effort, which aimed to strengthen DHS’s structures and processes to improve departmental cohesiveness and operational effectiveness, among other things  The memorandum identified several initial focus areas intended to build organizational capacity, one of which centered on improving and integrating the department’s processes for acquisition oversight, resource allocation, and joint requirements analysis  To improve these processes, the memorandum directed senior DHS leaders to update the existing acquisition management and resource allocation processes, as well as lead an expedited review to provide alternatives for developing and facilitating a component-driven joint requirements process, which ultimately led to the re-establishment of the JRC  In response to our recommendations and the Unity of Effort memorandum, DHS issued new policies outlining the acquisition management, resource allocation, and requirements processes in 2016  We assessed these policies and found that, when considered collectively, they generally reflect the key portfolio management practices, as shown in table 5  Because DHS’s new policies were issued in 2016, we did not specifically assess DHS’s implementation of them  However, we did review documentation resulting from the acquisition management, resource allocation, and requirements processes since January 2016 to get a sense of how the department began implementation  Examples of how DHS’s policies reflect the key portfolio management practices and their implementation status are outlined below  Clearly define and empower leadership: the policies identify the roles and responsibilities for decision makers in the acquisition management, resource allocation, and requirements processes, as well as establish cross-functional teams to support those decision makers  For example, to fulfill the role of acquisition decision authority, the Under Secretary for Management is supported by the Acquisition Review Board, which consists of key DHS senior leaders responsible for managing the department’s finances, contracts, and testing, among other things  We reviewed the memorandums issued since January 2016 that document Acquisition Review Board decisions and found that, through this group, DHS has taken steps to manage across programs through its acquisition management process  For example, after reviewing the status of several individual Customs and Border Protection programs in 2016, the Acquisition Review Board identified the need for a comprehensive border plan that depicts the component’s current land, maritime, and air domain awareness capabilities  In October 2016, the Deputy Under Secretary for Management—who was serving as acquisition decision authority at the time—directed Customs and Border Protection to develop such a plan  The plan is to consist of separate analyses for each of the three domains—starting with land— that reflect end users’ capability requirements for systems, such as Integrated Fixed Towers, Multi-Role Enforcement Aircraft, and Medium Lift Helicopter, that address relevant domain threats  As of February 2018, Customs and Border Protection had not yet completed the analysis for land domain awareness capabilities  Establish standard assessment criteria and demonstrate comprehensive knowledge of the portfolio: the policies establish standard criteria for assessing major acquisition programs through the acquisition management, resource allocation, and requirements processes  For example, the updated resource allocation handbook established that PA&E conduct annual assessments of all major investments using standard criteria in five main categories— contribution to DHS’s mission, program health, risk, resources, and governance—to assess the portfolio of investments and present alternatives for leadership decision  PA&E officials told us they used these criteria when assessing components’ resource allocation requests during development of the President’s fiscal year 2018 budget to develop funding options for the Deputy’s Management Action Group, which is responsible for making resource allocation recommendations for the Secretary’s approval  PA&E presented its funding options by DHS mission, which, according to officials associated with the Deputy’s Management Action Group, allowed the group to make cross-component allocation decisions that directly aligned with the department’s strategic goals  We could not verify these officials’ assertions based on the documentation we were provided, but will continue to monitor PA&E’s assessment of major acquisition programs against the standard criteria as the department’s implementation of its resource allocation policies matures  In addition, PARM formally established its Acquisition Program Health Assessments in October 2016 after more than a year of development and pilot efforts  These assessments are intended to monitor major acquisition programs quarterly (both on an individual program level and in aggregate) by rating programs against standard criteria in several categories—such as program management, financial management, and human capital—that DHS deemed important for successful program execution  We reviewed the quarterly reports issued from January 2016 to April 2017 and found that they primarily focused on individual programs  The portfolio-level information contained in these reports was limited to program results grouped in various categories, such as by component, by acquisition life-cycle phase, and by investment type (e g , information technology)  PARM officials said they plan to use the health assessments as a portfolio management tool in the future and are working to determine how to best to analyze and present portfolio-level data  We will continue to track PARM’s implementation of the health assessment process moving forward through GAO’s High Risk work to determine DHS’s progress in demonstrating that major acquisition programs are on track to achieve their established goals  Prioritize investments by integrating the requirements, acquisition, and budget processes: the policies identify areas where DHS’s requirements, acquisition management, and resource allocation processes are integrated and establish processes for prioritizing investments  For example, the updated resource allocation policies require reviews of DHS’s major acquisition portfolio during this annual process  When the portfolio faces a funding gap, programs are to be returned to their respective components for scope or funding adjustments, or prioritized by department leadership to identify an affordable set of programs  For the fiscal year 2018 resource allocation cycle, PA&E officials provided an example where DHS leadership directed components to identify funding from alternative sources to fund specific purposes related to DHS’s mission to prevent terrorism and enhance security  However, as previously discussed, the resulting FYHSP report for fiscal years 2018–2022 showed that DHS’s portfolio of major acquisition programs is not affordable over the next 5 years  In addition, the requirements policies established the Joint Assessment of Requirements, an annual process to prioritize emerging and existing requirements to inform the department’s resource allocation decisions  As we found in October 2016, the JRC plans to implement the Joint Assessment of Requirements through a 3-year phased approach that is expected to be fully implemented in time to inform DHS’s fiscal year 2021 budget request  In fiscal year 2016, the JRC completed the first phase, which included (1) developing initial criteria to evaluate emerging requirements, and (2) evaluating and prioritizing a sample of those requirements against the initial criteria  Based on these results, JRC officials told us in September 2017 that they are working to develop assessment metrics for the criteria as part of the next phase  We will continue to track the JRC’s progress through GAO’s High Risk work to determine DHS’s progress to effectively operate the JRC  Continually make go/no go decisions to rebalance the portfolio: the requirements policies outlining the Joint Assessment of Requirements process also reflected the key practices to conduct reviews (1) annually to make requirement scoping adjustments as priorities change and (2) when new investments are identified  However, as previously discussed, the JRC is still in the process of implementing this process  We consider this overall key practice area to be partially met because DHS’s policies do not reflect the key practice (3) to reassess programs that breach established thresholds within the context of the portfolio to determine if the program remains relevant and affordable  PARM officials told us that—in practice—DHS reassesses programs in the context of their component’s overall acquisition portfolio based on a certification of funds memorandum submitted to DHS’s Chief Financial Officer when programs re-baseline as a result of a cost, schedule, or performance breach  The memorandum is intended to enable the Acquisition Review Board to discuss affordability by certifying a program’s funding levels and identifying trade-offs necessary to address any projected funding gaps  We previously found that the certification of funds memorandum was an effective tool for DHS leadership to assess program affordability  However, DHS’s acquisition management policy requires components to submit this memorandum prior to most acquisition decision events, but not when a program re-baselines as a result of a cost, schedule, or performance breach  During our review of programs’ progress against schedule and cost goals in 2017, we found one instance where a component did not follow the practice to submit this memorandum when one of its programs re-baselined as a result of a breach  Specifically, Customs and Border Protection did not submit a certification of funds memorandum when the Tactical Communications Modernization program re-baselined in November 2017 as a result of a schedule and cost breach  Nevertheless, DHS leadership approved the program’s revised APB and removed it from breach status, even though DHS’s Chief Financial Officer identified that the program’s revised LCCE was not affordable  PARM officials stated that this instance was an oversight because, at the time, the department was still determining when certification of funds memorandums should be submitted  According to the federal standards for internal control, documentation of internal control practices is necessary so that they can be implemented effectively  By amending its acquisition management policy to require a certification when a program re-baselines as a result of a cost, schedule, or performance breach, DHS can ensure that leadership receives the necessary information to reassess that program’s affordability in the context of a larger portfolio  PARM officials stated that, moving forward, components will be required to submit a certification of funds memorandum for each program when a new APB is submitted for DHS leadership approval  In contrast, the acquisition management policy does reflect the key practice (4) to use information gathered from post-implementation reviews to fine tune investment processes and the portfolio to achieve strategic outcomes  For example, DHS’s acquisition management policy requires programs to conduct post-implementation reviews 6 to 18 months after initial operational capability to identify and document any deployment or implementation and coordination issues, how they were resolved, and how they could be prevented in the future  These reviews are intended to help identify capability gaps that may inform future acquisitions, among other things  However, PARM officials said that they do not consider the results of the post-implementation reviews when managing the department’s current acquisition portfolio because these reviews are typically conducted after program oversight shifts from PARM to the component  While post-implementation reviews are conducted later in the acquisition life cycle, the insights they provide could be leveraged by other programs in the acquisition portfolio, not just the program under review  For example, the Integrated Fixed Towers program completed a post-implementation review in June 2016 after its initial deployment of capabilities to the Arizona border  The review found that changes in illegal traffic patterns as a result of the program’s deployment may be predicted, and other technologies may be able to compensate for changes in these patterns  This information could help other programs under development plan for similar outcomes or enable DHS to change deployment plans for existing programs to address changes in threats  PARM has an opportunity to use the results from programs’ post- implementation reviews since it is responsible for overseeing the department’s acquisition portfolio by monitoring each investment’s cost, schedule, and performance against established baselines  Federal standards for internal control state that management should obtain data on a timely basis so that they can be used for effective monitoring and that separate evaluations may provide feedback on the effectiveness of ongoing monitoring  By leveraging the results from post-implementation reviews in its monitoring efforts, PARM may be better able to ensure that programs in the current acquisition portfolio achieve their baselines  PARM officials stated they have generally focused on leveraging information gathered from canceled acquisition programs, such as where and why plans went wrong  However, they agreed that they could better leverage post- implementation review information gathered from programs that complete planned capability deployments  DHS’s mission to safeguard the American people and homeland requires a broad portfolio of acquisitions  However, the performance of DHS’s major acquisition portfolio during 2017 did not improve compared to our last review because we found that more programs will require more time and may require more money to complete than initially planned  DHS is collecting more timely cost estimate information on its acquisition programs to make more informed investment decisions  Yet DHS continues to face challenges in funding its acquisition portfolio, which highlights the need for disciplined policies that reflect best practices to ensure that the department does not pursue more programs than it can afford  DHS leadership has taken positive steps in recent years by strengthening its policies for acquisition management and resource allocation, and establishing policies related to requirements  Collectively, these policies reflect an integrated approach to managing investments  However, opportunities remain to further strengthen the acquisition management policy by documenting DHS’s current practice to reassess programs that breach their established cost, schedule, or performance thresholds to ensure they are still worth pursuing within the context of the portfolio  Additionally, leveraging information learned once programs complete deployment across the acquisition portfolio could help ensure that programs stay on track against their baselines in the first place  This is particularly relevant because DHS is initiating a number of complex and costly acquisition programs, such as development of a wall system along the southwest border and the Coast Guard’s Heavy Polar Icebreaker, which could benefit from this type of information  We are making the following two recommendations to DHS: The Under Secretary for Management should update DHS’s acquisition management policy to require components to submit a certification of funds memorandum when a major acquisition program re-baselines in response to a breach  (Recommendation 1) The Under Secretary for Management should require PARM to assess the results of major acquisition programs’ post-implementation reviews and identify opportunities to improve performance across the acquisition portfolio  (Recommendation 2) We provided a draft of this report to DHS for review and comment  In its comments, reproduced in appendix IV, DHS concurred with both of our recommendations and identified actions it planned to take to address them  DHS also provided technical comments, which we incorporated as appropriate  We are sending copies of this report to the appropriate congressional committees and the Secretary of Homeland Security  In addition, the report is available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions about this report, please contact me at (202) 512-4841 or makm@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 key contributions to this report are listed in appendix V  This appendix presents individual assessments for each of the 28 programs we reviewed  Each assessment presents information current as of January 2018  They include standard elements, such as an image, a program description, and summaries of the program’s progress in meeting cost and schedule goals, performance and testing activities, and program management-related issues, such as staffing  Each assessment also includes the following figures: Fiscal Years 2018–2022 Affordability  This figure compares the funding plan presented in the Future Years Homeland Security Program report to Congress for fiscal years 2018–2022 to the program’s current cost estimate  We use this funding plan because the data are approved by the Department of Homeland Security (DHS) and Office of Management and Budget, and was submitted to Congress to inform the fiscal year 2018 budget process  The figure only presents acquisition funding because DHS did not report operations and maintenance (O&M) funding for individual programs in its funding plan to Congress  In addition, the data do not account for other potential funding sources, such as carryover  Acquisition Program Baseline (APB) vs  Current Estimate  This figure compares the program’s cost thresholds from the initial APB approved after DHS’s acquisition management policy went into effect in November 2008 and the program’s current DHS-approved APB to the program’s expected costs as of January 2018  The source for the current estimate is the most recent cost data we collected (i e , a department-approved life-cycle cost estimate, updated life-cycle cost estimates submitted during the resource allocation process to inform the fiscal year 2019 budget request, or a fiscal year 2017 annual life- cycle cost estimate update)  Schedule Changes  This figure consists of two timelines that identify key milestones for the program  The first timeline is based on the initial APB DHS leadership approved after the department’s current acquisition management policy went into effect  The second timeline identifies when the program expected to reach its major milestones as of January 2018 and includes milestones introduced after the program’s initial APB  Dates shown are based on the program’s APB threshold dates or updates provided by the program office  Test Status  This table identifies key recent and upcoming test events  It also includes DHS’s Director, Office of Test and Evaluation’s assessment of programs’ test results, if an assessment was conducted  Staffing Profile  This figure identifies the total number of staff a program needs (measured in full time equivalents) including how many are considered critical and how many staff the program actually has  Lastly, each program assessment summarizes comments provided by the program office and identifies whether the program provided technical comments  AUTOMATED COMMERCIAL ENVIRONMENT (ACE) CUSTOMS AND BORDER PROTECTION (CBP) The ACE program is developing software that will electronically collect and process information submitted by the international trade community  ACE is intended to provide private and public sector stakeholders access to information, enhance the government’s ability to determine whether cargo should be admitted into the United States, and increase the efficiency of operations at U S  ports by eliminating manual and duplicative trade processes, and enabling faster decision making  Final deployment and operational testing of ACE functionality delayed  Program plans to identify an approach to address collections functionality in March 2018  We last reported on this program in March 2018 and April 2017 (GAO-18-271, GAO-17-346SP)  CBP declared a cost and schedule breach in April 2017—5 months after re-baselining the program in response to a prior breach—because of difficulties developing the collections aspect of ACE’s remaining functionality, which collects and processes duties owed on imported goods  CBP reported that its officials were not versed in the complexities of collections in the legacy system and underestimated the level of effort required to integrate collections capabilities into ACE  As a result, the program delayed final deployment of ACE functionality several times and missed the deadlines for completing the remaining milestones in its current acquisition program baseline (APB), including achieving acquisition decision event (ADE) 3 and full operational capability (FOC) by the revised dates of June 2017 and September 2017, respectively  Additional coding and testing to complete ACE development also required contract extensions that exceeded the current APB cost thresholds  The program subsequently decoupled collections from ACE’s remaining functionality to permit deployment of the other post-release capabilities—such as liquidations and reconciliation—using a phased approach between September 2017 and February 2018  In November 2017, CBP officials estimated that efforts to decouple collections from post-release functionality would be an additional $32 million in acquisition costs  CBP officials plan to cover these costs with $18 million in fiscal year 2017 carryover funding and by reprogramming $14 million from ACE disaster recovery funding  CBP is in the process of determining a path forward for collections, which is due to Department of Homeland Security (DHS) leadership by the end of March 2018  CBP then plans to update the program’s acquisition documentation, including APB and life- cycle cost estimate, by August 2018  Until then, the time frame for completing ACE’s remaining milestones and true cost of the program, including the cost to complete collections development is unknown  The program was not included in DHS’s funding plan to Congress for fiscal years 2018 to 2022 because DHS did not report operations and maintenance (O&M) funding for individual programs  CBP officials anticipate receiving approximately $535 million in O&M funding over this 5-year period  Customs and Border Protection (CBP) AUTOMATED COMMERCIAL ENVIRONMENT (ACE) When DHS leadership re-baselined ACE’s cost, schedule, and performance parameters in 2013, the program adopted an agile software development methodology to accelerate software creation and increase flexibility in the development process  As of October 2017, the ACE program office oversees 11 agile teams that conduct development and O&M activities  CBP officials said they extended the program’s agile development contracts in 2017 to permit further development of the collections function  In identifying a path forward for collections, CBP officials stated there are three main options: 1  leave collections in the legacy system, 2  continue to pursue development and deployment in ACE, or 3  move collections to a different program altogether  The program previously experienced a schedule breach in June 2016 because it delayed events to address external stakeholders’ concerns about transitioning to ACE  According to CBP officials, CBP has signed a memorandum of understanding with each of the 22 partner agencies responsible for clearing or licensing cargo that provides access to ACE  As of February 2018, 21 of the partner agencies had transitioned to ACE and the program was piloting a solution for the remaining partner  In September 2017, CBP reported that ACE continued to lack a director of testing and evaluation  CBP officials said they do not plan to fill this vacancy despite plans to conduct further testing because existing staff have successfully covered the workload and a large portion of testing has already been completed  CBP officials provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  CUSTOMS AND BORDER PROTECTION (CBP) The Biometric Entry-Exit Program is developing capabilities to enhance traveler identification upon departure from the U S  at air, land, and sea ports of entries by collecting biometric data, such as fingerprints and facial recognition  The program plans to match this data to biometric data obtained from travelers upon their arrival into the U S  to identify foreign nationals that stay in the U S  beyond their authorized periods of admission and verify the identities of travelers leaving the U S  CBP completed four biometric pilot programs and selected a solution for development  DHS has explored biometric exit capabilities since 2009, but was directed to expedite implementation in March 2017  GAO last reported on this program in February 2017 (GAO- 17-170)  In June 2017, the Department of Homeland Security’s (DHS) Under Secretary for Management (USM) granted the Biometric Entry-Exit Program acquisition decision event (ADE) 1 approval after CBP completed several pilot initiatives to study the feasibility of proposed biometric exit solutions at air and land ports of entry  The USM also authorized the program to continue testing a pilot exit solution at Hartsfield-Jackson Atlanta International Airport and conduct technology demonstrations as needed, but directed the program to achieve ADE 2A prior to deploying a solution to the 20 U S  airports with the most international flights  CBP officials initially planned to achieve ADE 2A approval in September 2017—the point at which the program would establish cost, schedule, and performance goals in a DHS-approved acquisition program baseline (APB)—and pursue separate ADE 2B decisions to initiate development of a biometric solution for each type of port of entry, starting with air  As of December 2017, the program had yet to conduct its ADE 2A because CBP officials have had to resolve several issues identified by the Joint Requirements Council that has delayed approval of the program’s operational requirements document (ORD)  In January 2018, CBP officials said the program plans to conduct ADE 2A in February or March 2018 and is aiming for ADE 2B for the biometric air solution in December 2018  In December 2015, Congress established an account to be used for the development and implementation of the biometric entry-exit system starting in 2017  Specifically, Congress provided that half the amount collected from fee increases for certain visa applications from fiscal years 2016 through 2025—up to $1 billion—would be available to DHS until expended  In February 2017, DHS leadership approved the program to use about $73 million of this funding in fiscal year 2017 for information technology investments and programmatic and operational support, among other things  In September 2017, DHS’s Chief Financial Officer approved the program’s life-cycle cost estimate (LCCE), which CBP expects to refine as the program progresses to meet the fee-funding limit  According to CBP officials, the current funding structure poses challenges because the fees will fluctuate based on immigration rates  Customs and Border Protection (CBP) of a traveler to different sources—one technology compared the photo to the traveler’s passport upon entrance to the U S ; the other technology compared the photo to a gallery of photos based on the outbound flight manifest during an airline’s boarding process  According to CBP officials, the facial recognition technology that matched photos during an airline’s boarding process was the most viable approach and served as the foundation for its development of the ADE 2A acquisition documents  Officials stated a similar approach may be feasible for land border crossings, but will require further planning  In January 2018, CBP officials stated they were developing a test and evaluation master plan—which will outline the developmental and operational test approach—for the biometric exit air solution  DHS’s Director, Office of Test and Evaluation will need to review and approve this plan prior to the program’s ADE 2B  Since 1996, several federal statutes have required development of an entry and exit system for foreign nationals  DHS has been exploring biometric exit capabilities since 2009 and an Executive Order issued in March 2017 directed DHS to expedite the implementation of the biometric entry-exit system  The Biometric Entry-Exit Program plans to develop a capability to match a traveler’s biometric data against data contained in existing DHS biometric data repositories— primarily the National Protection and Program Directorate’s IDENT system  DHS is in the process of replacing and modernizing IDENT through the Homeland Advanced Recognition Technology (HART) program because IDENT is at risk of failure  However, HART has experienced delays, which could affect the Biometric Entry-Exit Program’s development progress  For the air biometric solution, CBP plans to pursue a public/private partnership in which airlines and airports invest in the equipment to collect biometric data  According to CBP officials, this approach could reduce program costs and improve the passenger boarding process  In August 2017, CBP officials told GAO that several airlines have expressed interest in partnering with the program, including one that expanded CBP’s pilot of facial recognition matching for outbound flights to additional gates at the Hartsfield-Jackson Atlanta International Airport  CBP officials reported a staffing gap of 14 full time equivalent staff which the program plans to fill once partnerships with airlines are established  CBP officials stated that authorized funds are collected from visa fee increases that expire in fiscal year 2025  Beyond 2025, officials stated that additional funding will need to be appropriated or the fee increases extended to continue the program  They added that fee collections are currently below forecasted levels and may come under the current $1 billion limit  CBP officials also provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  CUSTOMS AND BORDER PROTECTION (CBP) The border wall system is intended to prevent the illegal entry of people, drugs, and other contraband by enhancing and adding to the 654 miles of existing barriers along the U S  southwest border  CBP plans to create a border enforcement zone between a primary barrier—such as a fence—and a secondary barrier  To establish the enforcement zone, the wall system may also include detection technology, surveillance cameras, lighting, and roads for maintenance and patrolling  CBP has evaluated prototypes for new barrier designs, but risks with planned detection technologies exist  CBP is leveraging staff and the contracting strategy from prior border fencing programs  GAO last reported on the existing Southwest border barriers in February 2017 (GAO-17-331)  In April 2017, Department of Homeland Security (DHS) leadership granted CBP permission to procure barrier prototypes to inform new design standards and approved the construction of the first segment of the wall system  CBP subsequently awarded 8 task orders with a total value of over $3 million for the development of prototypes and selected San Diego as the first segment  CBP plans to replace an existing 14 miles of primary and secondary barriers in San Diego  DHS plans to use fiscal year 2017 funding for the replacement of the primary barrier, which it plans to rebuild to existing design standards  DHS has requested funding for replacement of the secondary barrier beginning in fiscal year 2018 that it plans to rebuild to new design standards once established  DHS leadership plans to approve acquisition documentation—including an acquisition program baseline (APB) and a life-cycle cost estimate (LCCE)—for each segment to determine affordability prior to authorizing construction  However, CBP officials said they do not plan to develop an APB for the San Diego segment because DHS already approved construction  In January 2018, DHS leadership approved an APB establishing cost, schedule, and performance goals for a second segment in the Rio Grande Valley (RGV), which will extend an existing barrier by 60 miles  To inform leadership’s decision, DHS headquarters conducted an independent cost estimate, which CBP adopted as the program’s LCCE  The LCCE includes costs for both the San Diego and RGV segments  However, DHS officials stated that the amounts in the LCCE are not releasable until CBP evaluates the prototypes, determines, and designs a final solution for the San Diego secondary barrier, and updates the LCCE—which is not expected to be complete until June 2018  The costs presented here are only for the RGV segment  CBP reported that construction of the RGV segment would be sufficiently funded if it receives $1 3 billion of acquisition funding in fiscal year 2018  However, CBP identified a shortfall in operations and maintenance (O&M) funding from fiscal years 2019 to 2022 that it plans to cover with existing funding from the Tactical Infrastructure program, which will be responsible for maintenance of the wall system as segments are complete  If funded, the program expects to achieve full operational capability for the RGV segment in March 2023  Customs and Border Protection (CBP) The Border Wall System Program was initiated in response to an Executive Order issued in January 2017 stating that the executive branch is to secure the southern border through the immediate construction of a physical wall on the southern border of the U S  To expedite the acquisition planning process, CBP officials said they leveraged expertise from staff that worked on previous border fencing programs and were familiar with implementation challenges, such as land access  CBP intends to prioritize segments based on threat levels, land ownership, and geography, among other things  From fiscal years 2007 to 2015, CBP spent approximately $2 3 billion to construct pedestrian and vehicle fencing along the southwest border  CBP’s Tactical Infrastructure program is responsible for sustaining this fencing and other infrastructure—such as gates, roads, and bridges— over its lifetime  CBP plans to continue coordinating with the U S  Army Corps of Engineers (USACE) for engineering support and for awarding and oversight of construction contracts  CBP anticipates that all contract awards issued by USACE in support of the RGV segment will be firm fixed price  If appropriations are received, the program plans to award construction contracts for the first portion of RGV in May 2018 and for the secondary barrier in San Diego in August 2018  In February 2018, CBP officials stated that staffing the program office is a challenge because funding has not yet been received  CBP officials said that existing work for the program is being handled by current CBP staff  CBP officials provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  INTEGRATED FIXED TOWERS (IFT) CUSTOMS AND BORDER PROTECTION (CBP) The IFT program helps the Border Patrol detect, track, identify, and classify illegal entries in remote areas  IFT consists of fixed surveillance tower systems equipped with ground surveillance radar, daylight and infrared cameras, and communications systems linking the towers to command and control centers  CBP plans to deliver or upgrade approximately 53 IFT systems across six areas of responsibility (AoR) in Arizona: Nogales, Douglas, Sonoita, Ajo, Tucson, and Casa Grande  System acceptance test completed in Douglas AoR and requirements were met  Program is adequately staffed, but simultaneous deployments in the future may have a negative impact  GAO last reported on this program in November and April 2017 (GAO-18-119, GAO-17-346SP)  In December 2017, CBP declared a schedule breach of the IFT program’s current acquisition program baseline (APB) because the program did not receive the funding needed to complete planned deployments on time to achieve its full operational capability (FOC) date of September 2020  The program’s FOC date previously slipped 5 years because of delays in the initial contract award process and funding shortfalls  CBP completed IFT deployments to the Douglas AoR in June 2017 and anticipates completing deployments to the Sonoita AoR in December 2017, as scheduled  However, in September 2017, CBP officials stated that they requested—but did not receive—additional funding from the Department of Homeland Security (DHS) to address new IFT requirements, including camera upgrades and replacement of existing tower systems deployed under a legacy program  In January 2015, Border Patrol requested the program prioritize replacement of the legacy systems in the Tucson and Ajo AoRs because the technology was obsolete and more expensive to maintain than the IFT technology planned for deployment in other AoRs  Without additional funding, CBP officials stated that they would be unable to exercise the contract options for the remaining AoRs on time  In June 2017, the program updated its life-cycle cost estimate (LCCE), which is slightly less than its current APB cost thresholds  This LCCE update includes estimated costs for the new requirements  The affordability gap from fiscal years 2018 to 2022 may be overstated because DHS’s funding plan to Congress no longer contained operations and maintenance (O&M) funding for individual programs  CBP identified $8 million in acquisition carryover funding for fiscal year 2018 and officials anticipate receiving $126 million in O&M funding to cover $100 million in O&M costs over the next 5 years  The program plans to submit a revised APB to DHS leadership by June 2018  However, the FOC date may be further delayed because of land access issues  CBP officials told GAO that they have not yet reached an agreement with the Tohono O’odham Nation—a sovereign Native American Nation—to access tribal lands, which these officials said is necessary for the construction of IFTs in the Ajo and Casa Grande AoRs  10/15 Initial operational capability (Nogales) Customs and Border Protection (CBP) INTEGRATED FIXED TOWERS (IFT) When CBP initiated the IFT program, it decided to procure a non-developmental system, and it required that prospective contractors demonstrate their systems prior to CBP awarding the contract  The program awarded the contract to EFW, Inc  in February 2014, but the award was protested  GAO sustained the protest and CBP had to reevaluate the offerors’ proposals before it again decided to award the contract to EFW, Inc  As a result, EFW, Inc  could not initiate work at the deployment sites until fiscal year 2015  According to CBP officials, the number of IFT systems deployed to a single AoR is subject to change based on assessments by the Border Patrol  DHS leadership directed CBP to develop a comprehensive border plan in October 2016 that includes IFT capabilities and—when preparing for the last budget cycle—the program estimated costs for expansion to the southwest border beginning in fiscal year 2019  In September 2017, CBP officials told GAO that they did not have any current staffing gaps  However, CBP officials added that if the program receives full funding and reaches an agreement with the Tohono O’odham Nation to initiate IFT deployments to the Ajo and Casa Grande AoRs, while concurrently deploying capability to the Sonoita and Tucson sectors, they will be short on government and contracted staff  CBP officials provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  MEDIUM LIFT HELICOPTER (UH-60) CUSTOMS AND BORDER PROTECTION (CBP) UH-60 is a medium-lift helicopter that CBP uses for law enforcement and border security operations, air and mobility support and transport, search and rescue, and other missions  CBP’s UH-60 fleet consists of 20 aircraft acquired from the U S  Army in three different models  CBP previously acquired 4 modern UH-60M aircraft and converted 6 of its older 16 UH-60A aircraft into more capable UH-60L models  CBP is replacing the remaining 10 UH-60A with reconfigured Army HH-60L aircraft  CBP test agent and the Army completed testing of reconfigured HH-60L prototype  CBP has initiated efforts to acquire additional converted HH-60L aircraft from the Army  GAO last reported on this program in April 2017 (GAO-17-346SP)  The program breached the cost and schedule goals in its acquisition program baseline (APB) and, as of December 2017, CBP officials stated they were in the process of developing the breach notification required under the Department of Homeland Security’s (DHS) acquisition policy  In its annual life-cycle cost estimate (LCCE) update, the program shifted some operations and maintenance (O&M) costs to acquisitions to be consistent with DHS’s new appropriation structure  For example, the program shifted costs for recurring upgrades from O&M to acquisition because these upgrades require development and production  As a result, the program’s updated acquisition cost estimate exceeded the APB acquisition cost threshold, which constitutes a cost breach under DHS’s acquisition policy  CBP officials stated that they did not initially declare a cost breach because the program’s total LCCE was within the APB threshold  The program also did not hold its acquisition decision event (ADE) 3 by the APB deadline of September 2017  The ADE 3 is intended to approve the transfer of CBP’s remaining UH-60A aircraft for reconfigured Army HH60-L aircraft based on an evaluation of a reconfigured prototype  According to CBP officials, the program did not complete the required acquisition documentation by the ADE 3 deadline, in part, because DHS leadership directed CBP to develop a comprehensive border plan in October 2016 that includes UH-60 capabilities  It is unclear when the ADE 3 will occur because, as of December 2017, several documents were pending validation by the Joint Requirements Council  The affordability gap from fiscal years 2018 to 2022 may be overstated because DHS’s funding plan to Congress no longer contained O&M funding for individual programs  In addition, CBP officials previously told GAO that UH-60 O&M is funded through a separate, central funding account for all of CBP’s air and marine assets  CBP officials stated that the projected acquisition funding gap in fiscal years 2019 and 2020 is primarily for replacing obsolete parts that were previously considered O&M  According to these officials, the Army conducts an annual obsolescence study that will help CBP identify and prioritize replacements across the UH-60 fleet based on available funding levels  Customs and Border Protection (CBP) MEDIUM LIFT HELICOPTER (UH-60) CBP previously acquired UH-60 as a part of its Strategic Air and Marine Program (StAMP)  In July 2016, DHS leadership designated UH-60 as a separate and distinct major acquisition program  CBP initially planned to convert all 16 of its UH-60A aircraft into UH-60L models, but changed its strategy once it learned the Army planned to divest several HH-60L aircraft that could more easily be converted into UH-60L aircraft for CBP missions  CBP officials anticipated the new strategy could reduce the program’s costs by an estimated $70 million, accelerate its schedule, and result in newer aircraft since the Army’s HH-60L airframes had fewer operating hours than CBP’s existing UH-60A aircraft  In September 2017, CBP officials told GAO they had initiated efforts to acquire additional HH-60L aircraft by conducting a study of current capability gaps and drafting a mission need statement  As of September 2017, program officials confirmed that they maintain a consolidated program office where the same staff from StAMP continue to support all remaining acquisitions, including the UH-60  However, these officials stated that they plan to realign staff to a dedicated asset over time  Program officials also stated that the program has hired a dedicated cost estimator and would like to hire additional staff to focus on procuring spare parts and common component issues, such as radio replacements, for CBP’s air and marine assets  CBP officials reiterated that the changes in acquisition costs were primarily a result of cost realignment and that the program’s total life-cycle cost is still within the initial APB LCCE goals  CBP officials also stated that—to supplement Army test data—the program’s OTA participated in the flight tests and will provide a formal report on the results  MULTI-ROLE ENFORCEMENT AIRCRAFT (MEA) CUSTOMS AND BORDER PROTECTION (CBP) MEA are fixed-wing, multi-engine aircraft that can be configured to perform multiple missions including maritime, air, and land interdiction, as well as signals detection to support law enforcement  The current MEA configuration is equipped with marine search radar and an electro-optical/infrared sensor to support maritime and land surveillance and airborne tracking missions  MEA will replace CBP’s fleet of aging C-12, PA-42, and BE-20 aircraft  Testing of new configuration planned for May 2018, but requirements not yet defined  Began retrofitting accepted MEA with new mission system in fiscal year 2017  GAO last reported on this program in April 2017 (GAO-17- 346SP)  According to CBP officials, the program is on track to meet the cost and schedule goals in its current acquisition program baseline (APB) for 16 maritime interdiction MEA and is actively pursuing additional aircraft  In April 2016, CBP developed a report that identified capability needs in three mission areas and proposed increasing the program’s total to 38 aircraft by adding 13 air and 6 land interdiction MEA, and 3 signals detection MEA  The Joint Requirements Council endorsed CBP’s findings, but recommended CBP develop a number of requirements documents—including an operational requirements document—to fully validate the findings  As of September 2017, CBP officials told GAO they were in the process of updating these documents to focus on air interdiction capabilities—the next MEA configuration  These officials stated that completing these documents has been delayed, in part, because Department of Homeland Security (DHS) leadership directed CBP to develop a comprehensive border plan in October 2016 that includes MEA capabilities  Despite not yet completing all the updated documents, DHS leadership approved CBP’s request to procure MEA 17 in September 2017 after the congressional conferees agreed to an additional aircraft beyond DHS’s budget request  CBP anticipates delivery of MEA 17 by September 2018, which is within the program’s full operational capability (FOC) date  However, if the program receives approval to acquire additional aircraft, the FOC date will be extended  The program completed an annual life-cycle cost estimate update, which exceeds the program’s current APB cost thresholds, because it reflects costs for all 38 aircraft, among other reasons  The affordability gap from fiscal years 2018 to 2022 may be overstated because DHS’s funding plan to Congress no longer contained operations and maintenance (O&M) funding for individual programs  In addition, CBP officials previously told GAO that MEA’s O&M is funded through a separate, central funding account for all of CBP’s air and marine assets  In September 2017, CBP officials said that the program was fully funded for 17 aircraft but had some affordability challenges with spare parts, which they are working with CBP and DHS headquarters to address  Customs and Border Protection (CBP) MULTI-ROLE ENFORCEMENT AIRCRAFT (MEA) CBP is replacing the mission system processor on the MEA with a system used by the U S  Navy and U S  Coast Guard that is intended to enhance operator interface and sensor management, as well as replace obsolete equipment  CBP’s OTA tested a prototype of the processor during an operational assessment in July 2015  The OTA found that the MEA had resolved issues found during prior testing, but also made 29 additional recommendations and findings to improve the aircraft and new mission system’s effectiveness  DHS’s Director, Office of Test and Evaluation (DOT&E) concurred with the OTA’s findings  CBP previously acquired MEA as a part of its Strategic Air and Marine Program (StAMP)  In July 2016, DHS leadership designated MEA as a separate and distinct major acquisition program  CBP initially planned to procure 50 MEA and awarded the first production contract in September 2009  However, the aircraft did not perform well during testing  In October 2014, DHS leadership said CBP could not procure or accept transfer of additional MEA without approval  CBP procured 12 aircraft under the initial contract and—with DHS approval—CBP awarded a new indefinite delivery, indefinite quantity contract in September 2016 for 1 base year and four 1-year options to support procurement of additional aircraft  In December 2017, CBP officials said the program had received 12 aircraft and awarded contracts for 5 more  According to program officials, MEA 13-16 will be delivered with the new mission system and CBP began retrofitting previously delivered aircraft in fiscal year 2017  As of September 2017, program officials confirmed that they maintain a consolidated program office where the same staff from StAMP continue to support all remaining acquisitions, including MEA  However, these officials stated that they plan to re-align staff to a dedicated asset over time  Program officials also stated that the program has hired a dedicated cost estimator and would like to hire additional staff to focus on procuring spare parts and common component issues, such as radio replacements, for CBP’s air and marine assets  CBP officials stated that delays in receiving approval of the program’s requirements documents may pose a risk to exercising options for additional MEA on an existing contract, which could stop production and increase contract costs associated with procuring future aircraft  CBP officials added that air and marine requirements officers continue to produce documentation requested by the Joint Requirements Council to provide sufficient context for the mission need and border security  CBP officials also provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  CUSTOMS AND BORDER PROTECTION (CBP) The NII Systems Program supports CBP’s interdiction of weapons of mass destruction, contraband such as narcotics, and illegal aliens being smuggled into the United States, while facilitating the flow of legitimate commerce  CBP officers use large- and small-scale NII systems at air, sea, and land ports of entry; border checkpoints; and international mail facilities to examine the contents of containers, railcars, vehicles, baggage, and mail  CBP initiated efforts for future NII requirements and procurements  66 percent staffing gap contributed to delays in NII deployments  GAO last reported on this program in April 2017 (GAO-17-346SP)  The NII Systems Program is on track to meet its approved schedule and cost goals  The estimates in the program’s annual life-cycle cost estimate (LCCE) update continued to decrease overall compared to its approved acquisition program baseline (APB) cost thresholds  Specifically, compared to the prior year’s estimate, the program’s acquisition costs decreased by $96 million and operations and maintenance (O&M) costs increased by $22 million  However, the LCCE update only estimated costs through fiscal year 2026—9 years short of the program’s final year  The LCCE primarily decreased because of a reduction of 1,977 planned additional and replacement NII systems  CBP officials said fewer large- and small-scale systems are needed because some systems have longer estimated lives than expected, and systems procured have better capability  CBP officials do not anticipate that the reduction in quantities will have an adverse effect on operations because they stated that the new systems can provide dual purpose capabilities (i e , one system can replace multiple separate systems)  The affordability gap from fiscal years 2018 to 2022 may be overstated because DHS’s funding plan to Congress no longer contained O&M funding for individual programs  CBP officials anticipate receiving approximately $605 million of O&M funding over this 5-year period to cover about $626 million in estimated O&M costs, which includes $100 million to operate and maintain radiation detection equipment acquired by the Domestic Nuclear Detection Office  These officials also identified $37 million in carryover funding to cover the remaining $21 million of O&M estimated costs  However, the program is projected to have a $266 million acquisition funding gap from fiscal years 2018 to 2022 The program has a plan to address funding shortfalls but, according to CBP officials, it has not yet needed to implement the strategies in this plan because of several factors, including cost reductions achieved through combined life-cycle contracts and lower-than-expected actual technology costs in fiscal year 2016  Customs and Border Protection (CBP) trucks as they are driven through the inspection portals—low dose X-ray to inspect the truck cab and high dose X-ray to inspect the cargo trailer  In March 2017, the Joint Requirements Council validated a capability analysis report that assessed current capability gaps in NII operations to assist with identifying potential upgrades to existing systems and developing requirements for future systems  According to program officials, CBP plans to review and update, as necessary, the mission need statement in fiscal year 2018  Additionally, program officials are preparing a consolidated acquisition plan for future procurements  These officials said CBP has not yet determined whether future procurements would be included into the current NII Systems Program of record or constitute a new acquisition program  CBP’s ability to successfully execute the existing NII Systems Program and plan for future efforts may be at risk because of understaffing  As of January 2018, the NII Systems Program continued to face a staffing gap of approximately 66 percent, including critical vacancies such as the acquisition program manager and a logistics program manager  Officials also noted that a lack of adequate personnel to procure, test, and deploy NII systems forces the program to prioritize its acquisitions, which can result in delays of NII deployments and testing efforts  For example, one manufacturer increased its output rate of NII systems, but the program did not have the staff to accept the systems at the increased rate  Officials anticipate the program may remain understaffed until CBP completes a reorganization that started more than a year ago, in which acquisition programs are realigned from a mission-support office to their operational entity  CBP officials provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  REMOTE VIDEO SURVEILLANCE SYSTEM (RVSS) CUSTOMS AND BORDER PROTECTION (CBP) The RVSS program helps the Border Patrol detect, track, identify and classify illegal entries across U S borders  RVSS consists of daylight and infrared video cameras mounted on fixed towers and buildings with communications systems that link to command and control centers  From 1995 to 2005, CBP deployed approximately 310 RVSS towers along the U S  northern and southern borders, and initiated efforts to upgrade legacy RVSS towers in Arizona in 2011  Program does not plan to conduct additional operational testing on future deployments  Once funded, program plans to award a new contract for deployments in sectors along the southwest border  GAO last reported on this program in November 2017 (GAO-18-119)  In April 2016, Department of Homeland Security (DHS) leadership elevated RVSS from a level 3 program—which focused on upgrading legacy RVSS in Arizona—to a level 1 program after approving CBP’s plan to expand deployments to the Rio Grande Valley (RGV) sector and adding an additional 6 sectors along the southwest border  At this time, DHS leadership approved the program to move forward with deployments to two RGV stations, which can be completed as options under the program’s existing contract  However, the program was required to re-baseline to account for its expanded scope and conduct an acquisition decision event (ADE) to obtain approval for additional deployments  As of January 2018, the program had not yet conducted its ADE or obtained DHS approval for an acquisition program baseline (APB) that established cost, schedule, and performance goals for the expanded program  In September 2017, CBP officials told us that they had drafted the APB and other required documentation, such as a life-cycle cost estimate (LCCE), but were unsure when the ADE would occur because the program had not received funding for the additional deployments  In addition, the ADE may have been delayed because DHS leadership directed CBP to develop a comprehensive border plan in October 2016 that includes RVSS capabilities  In September 2017, DHS leadership approved the RVSS’s revised LCCE which totaled nearly $4 billion for all program costs from fiscal years 2011 through 2042, including expansion along the southwest border and new initiatives such as a pilot for relocatable RVSS towers  DHS conducted an independent cost estimate for the program, which DHS cost estimating officials stated was within 2 percent of the program’s LCCE  RVSS was not included in DHS’s funding plan to Congress for fiscal years 2018 to 2022 because it had not yet been elevated to a level 1 program at the time the plan was developed  CBP officials stated that the program has received acquisition funding to cover the approved RGV deployments  However, CBP officials told GAO that the program may also assume responsibility for maintaining all legacy RVSS, but has not received adequate operations and maintenance funding to do so  Customs and Border Protection (CBP) REMOTE VIDEO SURVEILLANCE SYSTEM (RVSS) In July 2013, CBP awarded a firm fixed-price contract for a commercially available, non-developmental system  This contract covered the program’s initial scope to deploy upgraded RVSS in Arizona and two stations within the RGV sector, which can be completed as options  According to CBP officials, the program will need to award a new contract to cover expansion to the remaining six sectors along the southwest border  In September 2017, CBP officials said that the request for proposals for the new contract had been drafted but it cannot be released until the program receives funding  CBP officials told GAO that RVSS is coordinating with CBP’s Border Wall System Program on some planned deployments within the RGV sector  For example, CBP is considering moving 2 of the planned RVSS towers to be co-located with the planned barrier, which officials stated may provide better surveillance  If the Border Wall System Program does not receive funding, CBP officials said the towers will be placed in the originally planned locations  CBP officials stated that the RVSS program requires additional staff for contracting activities, maintenance activities for legacy RVSS, and for relocatable tower pilot deployments  To mitigate the staffing gap, CBP officials said they prioritize responsibilities of current personnel to meet program execution needs  CBP officials provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  CUSTOMS AND BORDER PROTECTION (CBP) The TACCOM program is intended to upgrade land mobile radio infrastructure and equipment to support approximately 95,000 users at CBP and other federal agencies  It is replacing obsolete radio systems with modern digital systems across various sectors located in 19 different service areas, linking these service areas to one another through a nationwide network, and building new communications towers to expand coverage in 5 of the 19 service areas  Issues related to security requirements have delayed full operational capability by more than a year  Program is being re-organized under Border Patrol, but still faces staffing challenges  GAO last reported on this program in April 2017 (GAO-17-346SP)  In November 2017, Department of Homeland Security (DHS) leadership re-baselined the TACCOM program, removing it from breach status after the program experienced a schedule slip and cost growth  In July 2017, CBP officials notified DHS leadership that the program would not achieve full operational capability (FOC) as planned due to issues related to federal information security requirements  The program now plans to achieve FOC by March 2019—more than a year later than its initial acquisition program baseline (APB) deadline  According to CBP officials, FOC will include planned upgrades to the San Diego system, which requires transitioning management of the legacy system from the Department of Justice to DHS  In August 2017, CBP officials stated that both agencies were reviewing an agreement with plans to complete the transition in fiscal year 2018  CBP officials stated that the program realized it would exceed its initial APB cost thresholds as it was developing its annual life-cycle cost estimate (LCCE) update and subsequently submitted a revised LCCE for DHS leadership approval  The program’s costs primarily grew because of increases in costs for contractor labor and support for facilities and infrastructure  CBP officials said the program’s initial estimates were immature; however, DHS leadership approved the initial LCCE in December 2015—4 years after the program began sustaining capabilities  DHS’s Chief Financial Officer (CFO) approved the program’s revised LCCE in November 2017, but noted that the program’s estimate exceeded its available funding and requested that the program address the affordability gap before it was re-baselined  CBP officials said that they are conducting an affordability analysis, which they anticipate will be completed by March 2018  Nevertheless, DHS leadership approved the program’s re-baseline in November 2017  CBP officials subsequently identified errors in the approved APB cost threshold tables and provided revised amounts, which are presented here  The program was not included in DHS’s funding plan to Congress for fiscal years 2018 to 2022 because DHS did not report operations and maintenance (O&M) funding for individual programs  CBP officials anticipate receiving approximately $120 million in O&M funding over this 5-year period  Customs and Border Protection (CBP) CBP officials told GAO that in January 2018, the program will move from a mission support office to a joint program office under Border Patrol as a part of CBP’s reorganization that started more than a year ago  The goal of this move is to make CBP land mobile radio capabilities seamless by combining the mission critical voice functions of Air and Marine Operations, the Border Patrol, and the Office of Field Operations—the TACCOM program’s primary customers—under one organizational leader, the Border Patrol Chief  CBP officials anticipate that the current TACCOM program structure will remain in place after this move with the exception of the program’s engineers, which will move to CBP’s Office of Information and Technology but be assigned to support TACCOM full time  In August 2017, CBP officials told GAO they were in the process of hiring staff to fill the program’s vacant positions  They added that the fiscal year 2019 budget contains plans for additional infrastructure enhancements, which will require technical staff to assist in the planning and execution of these efforts and may put additional strain on the program’s limited government technical staff  They noted that the hiring and retention of qualified land mobile radio engineers and information technology technical staff is a challenge because of competition with the private sector, among other factors  In addition to maintenance of the CBP Land Mobile Radio System that provides critical communication needs for CBP agents and officers protecting U S  borders, CBP officials stated the TACCOM program is providing infrastructure, such as building an engineering lab to facilitate design, development, test, and evaluation activities, to support improvements in CBP’s current and future Land Mobile Radio Systems  CBP officials also provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  CUSTOMS AND BORDER PROTECTION (CBP) TECS (not an acronym) is a law-enforcement information system that has been in place since the 1980s and helps CBP officials determine the admissibility of persons entering the United States at border crossings, ports of entry, and prescreening sites located abroad  CBP initiated efforts to modernize TECS to provide users with enhanced capabilities for accessing and managing data  Immigration and Customs Enforcement has a separate TECS Modernization program  System operationally effective and suitable, but cybersecurity testing needed  CBP working to address and prevent major system outages  GAO last reported on this program in April 2017 (GAO-17-346SP)  In July 2017, Department of Homeland Security (DHS) leadership granted the program acquisition decision event (ADE) 3 approval, but required CBP to conduct follow-on operational test and evaluation (OT&E) before declaring full operational capability (FOC)  This is more than a 2-year delay from CBP’s initial FOC date and a 9-month delay from its most recent revised FOC date  DHS approved the fourth version of the program’s acquisition program baseline (APB) in July 2016  In this APB, CBP split FOC into two separate operational capability milestones at its data centers to better reflect the program’s activities  CBP delivered operational capability at the primary data center in Decemberas scheduled—which provides redundant TECS access to minimize downtime during system maintenance or unscheduled outages  However, not all test results were available in time for the program’s ADE 3 decision, which contributed to DHS leadership’s decision to delay declaring FOC  2016, which included transitioning all TECS users to the modernized system  CBP delivered operational capability at the secondary data center in June 2017—The program updated its life-cycle cost estimate (LCCE) for ADE 3, which is within its current APB cost thresholds  However, the LCCE only included costs through fiscal year 2021—7 years short of DHS’s guidance that states program cost estimates should cover at least 10 years from the FOC date  Nevertheless, DHS granted the program ADE 3 approval without an understanding of the program’s full life-cycle costs, as required by its acquisition policy  CBP officials plan to update the LCCE by the end of calendar year 2018 to include costs for future years and other items, such as costs associated with follow-on OT&E and moving the data centers to a cloud environment—a CBP-wide initiative  The program was not included in DHS’s funding plan to Congress for fiscal years 2018 to 2022 because DHS did not report operations and maintenance (O&M) funding for individual programs  CBP officials anticipate receiving approximately $205 million in O&M funding over the next 4 years and have identified carryover for each year  However, CBP officials said there may be a small funding gap starting in fiscal year 2020, but they expect to achieve savings by migrating the data centers to a cloud environment  Customs and Border Protection (CBP) Since the program has completed development, CBP is focused on ensuring that the modernized TECS system works as intended by addressing operational issues as they are identified  For example, on January 2, 2017, a primary TECS Modernization application experienced a major outage that resulted in long airport delays  In August 2017, CBP officials said they continually monitor system health through a 24/7 operations center and have established a group dedicated to addressing the issues related to the January 2, 2017, outage  In September 2017, DHS’s Office of Inspector General (OIG) found that nearly 100 outages, periods of latency, or degraded service were reported for three TECS Modernization applications between June 2016 and March 2017  The OIG also found that CBP’s monthly reports on TECS system availability did not include periods of slowness or service interruptions that were caused by external factors  For example, the January 2, 2017, incident was identified in CBP outage reports, but was not captured in the monthly report because it was caused by a change to an external feed to the TECS system  CBP officials clarified that the monthly reports only account for interruptions that result in a full loss of operations for all TECS system users  The OIG recommended that CBP develop a plan to address factors that contributed to challenges regarding availability of primary traveler screening applications, among other things  CBP concurred with the recommendations  On January 1, 2018, the TECS system experienced another major outage that caused long airport delays; CBP officials said this incident is under review  CBP officials provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  LOGISTICS SUPPLY CHAIN MANAGEMENT SYSTEM (LSCMS) FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA) LSCMS is a computer-based tracking system that FEMA officials use to track shipments during disaster-response efforts  It is largely based on commercial-off-the- shelf software  FEMA initially deployed LSCMS in 2005, and initiated efforts to enhance the system in 2009  According to FEMA officials, LSCMS can identify when a shipment leaves a warehouse and the location of a shipment after it reaches a FEMA staging area near a disaster location  FEMA now anticipates reaching full operational capability by June 2019, up to 6 months late  Recent testing shows progress, but additional operational testing delayed to May 2018  GAO last reported on this program in April 2017 (GAO-17-346SP)  In November 2017, Department of Homeland Security (DHS) leadership approved a revised acquisition program baseline (APB) after the LSCMS program experienced a schedule breach  In September 2017, FEMA officials notified DHS leadership that it would not complete all required activities—including follow-on operational test and evaluation (OT&E)—to achieve acquisition decision event (ADE) 3 and full operational capability (FOC) by its initial APB dates of September 2018 and December 2018, respectively  According to FEMA officials, the delay was primarily caused by the need to deploy LSCMS program personnel in support of response and recovery efforts during the 2017 hurricane season  The program now plans to achieve FOC by June 2019—up to 6 months later than initially planned  DHS leadership authorized LSCMS to resume all development and acquisition efforts in March 2016 after a nearly 2-year program pause following program management issues  In October 2017, FEMA officials told GAO that they had completed several development efforts—such as integration with DHS’s asset management system—and were in the process of adding Electronic Data Interchange (EDI) to allow LSCMS to interface with its partners’ information systems  The program’s annual life-cycle cost estimate (LCCE) update continued to be within its APB cost thresholds  However, the program’s APB thresholds are not adjusted to account for risk, which increases the chance that the program could experience a cost breach  As of November 2017, FEMA officials did not anticipate that its schedule delays would lead to a cost breach  Federal Emergency Management Agency (FEMA) LOGISTICS SUPPLY CHAIN MANAGEMENT SYSTEM (LSCMS) The LSCMS program previously experienced significant execution challenges because of poor governance  FEMA initially deployed the enhanced LSCMS in 2013 without DHS leadership approval, a DOT&E letter of assessment, or a DHS-approved APB documenting the program’s costs, schedule, and performance parameters, as required by DHS’s acquisition policy  DHS’s Office of Inspector General also found that neither DHS nor FEMA leadership ensured the program office identified all mission needs before selecting a solution  In response, DHS leadership paused all LSCMS development efforts in April 2014 until the program addressed these issues, among others  FEMA subsequently completed an analysis of alternatives and developed an APB based on this assessment  DHS leadership approved the APB in December 2015 and authorized FEMA to resume all LSCMS development and acquisition efforts in March 2016  In October 2017, FEMA officials told GAO that the LSCMS program had minimal staffing shortages and was working to recruit additional staff  Officials previously attributed the program’s governance and testing challenges, in part, to staffing shortages and we previously found that it only had 7 of the 22 5 full time equivalents it needed in fiscal year 2014  Although the program has obtained more staff since then, FEMA officials noted in October 2017 that during disasters—such as 2017 hurricanes Harvey, Irma, and Maria—LSCMS program personnel are deployed to support response and recovery efforts, which leave program positions vacant for the duration of the deployment  FEMA officials stated that during the response to hurricanes Harvey, Irma and Maria in 2017, LSCMS processed supply chain transactions that exceeded the total number of transactions from the preceding 12 years—which includes the response to Hurricane Katrina  They added that the program provided support for nearly 130 million meals in 2017 compared to a total of approximately 84 million from the 12 previous years  FEMA officials also provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  IMMIGRATION AND CUSTOMS ENFORCEMENT (ICE) Since the 1980s, TECS (not an acronym) has provided case management, intelligence reporting, and information sharing capabilities to support ICE’s mission to investigate and enforce border control, customs, and immigration laws  ICE initiated efforts to modernize TECS in 2009 to replace aging functionality and provide end users with additional functionality to meet mission needs
Report 2:  In FY2020, the discretionary spending limits are slated to decrease, after having been increased in FY2018 and FY2019 by the Bipartisan Budget Act of FY2018 (BBA; P L  115-123 )  The nondefense discretionary cap (the one relevant for housing programs and activities) will decline by more than 9% in FY2020, absent any additional legislative changes  More than three-quarters of HUD's appropriations are devoted to three rental assistance programs serving more than 4 million families: the Section 8 Housing Choice Voucher (HCV) program, Section 8 project-based rental assistance, and the public housing program  Funding for the HCV program and project-based rental assistance has been increasing in recent years, largely because of the increased costs of maintaining assistance for households that are currently served by the programs  Public housing has, arguably, been underfunded (based on studies undertaken by HUD of what it should cost to operate and maintain it) for many years  Despite the large share of total HUD funding these rental assistance programs command, their combined funding levels only permit them to serve an estimated one in four eligible families, which creates long waiting lists for assistance in most communities  A similar dynamic plays out in the U S  Department of Agriculture's Rural Housing Service budget  Demand for housing assistance exceeds the supply of subsidies, yet the vast majority of the RHS budget is devoted to maintaining assistance for current residents  In a budget environment with limits on discretionary spending, the pressure to provide increased funding to maintain current services for existing rental assistance programs must be balanced against the pressure from states, localities, and advocates to maintain or increase funding for other popular programs, such as HUD's Community Development Block Grant (CDBG) program, grants for homelessness assistance, and funding for Native American housing  The Trump Administration's budget request for FY2020 proposes an 18% decrease in funding for HUD's programs and activities as compared to the prior year  It proposes to eliminate funding for several programs, including multiple HUD grant programs (CDBG, the HOME Investment Partnerships Program, and the Self-Help and Assisted Homeownership Opportunity Program (SHOP)), and to decrease funding for most other HUD programs  In proposing to eliminate the grant programs, the Administration cites budget constraints and proposes that state and local governments take on more of a role in the housing and community development activities funded by these programs  Additionally, the budget references policy changes designed to reduce the cost of federal rental assistance programs, including the Making Affordable Housing Work Act of 2018 (MAHWA) legislative proposal, released by HUD in April 2018  If enacted, the proposal would make a number of changes to the way tenant rents are calculated in HUD rental assistance programs, resulting in rent increases for assisted housing recipients, and corresponding decreases in the cost of federal subsidies  Further, it would permit local program administrators or property owners to institute work requirements for recipients  In announcing the proposal, HUD described it as setting the programs on "a more fiscally sustainable path," creating administrative efficiency, and promoting self-sufficiency  Low-income housing advocates have been critical of it, particularly the effect increased rent payments may have on families  Beyond HUD, the Administration's FY2020 budget request for USDA's Rural Housing Service would eliminate funding for most rural housing programs, except for several loan guarantee programs  It would continue to provide funding to renew existing rental assistance, but also proposes a new minimum rent policy for tenants designed to help reduce federal subsidy costs  For more on HUD appropriations trends in general, see CRS Report R42542, Department of Housing and Urban Development (HUD): Funding Trends Since FY2002   For more on the FY2020 budget environment, including discretionary spending caps, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions   Several pieces of assisted housing legislation that were enacted in prior Congresses are expected to be implemented during the 116 th Congress  In the FY2016 HUD appropriations law, Congress mandated that HUD expand the Moving to Work (MTW) demonstration by 100 public housing authorities (PHAs)  MTW is a waiver program that allows a limited number of participating PHAs to receive exceptions from HUD for most of the rules and regulations governing the public housing and voucher programs  MTW has been controversial for many years, with PHAs supporting the flexibility it provides (e g , allowing PHAs to move funding between programs), and low-income housing advocates criticizing some of the policies being adopted by PHAs (e g , work requirements and time limits)  Most recently, GAO issued a report raising concerns about HUD's oversight of MTW, including the lack of monitoring of the effects of policy changes under MTW on tenants  HUD was required to phase in the FY2016 expansion and evaluate any new policies adopted by participating PHAs  Following a series of listening sessions and advisory committee meetings, and several solicitations for comment, HUD issued a solicitation of interest for the first two expansion cohorts in December 2018  As of the date of this report, no selections had yet been made for those cohorts  The Rental Assistance Demonstration (RAD) was an Obama Administration initiative initially designed to test the feasibility of addressing the estimated $25 6 billion backlog in unmet capital needs in the public housing program by allowing local PHAs to convert their public housing properties to either Section 8 Housing Choice Vouchers or Section 8 project-based rental assistance  PHAs are limited in their ability to mortgage, and thus raise private capital for, their public housing properties because of a federal deed restriction placed on the properties as a condition of federal assistance  When public housing properties are converted under RAD, that deed restriction is removed  As currently authorized, RAD conversions must be cost-neutral, meaning that the Section 8 rents the converted properties may receive must not result in higher subsidies than would have been received under the public housing program  Given this restriction, and without additional subsidy, not all public housing properties can use a conversion to raise private capital, potentially limiting the usefulness of a conversion for some properties  While RAD conversions have been popular with PHAs, and HUD's initial evaluations of the program have been favorable, a recent GAO study has raised questions about HUD's oversight of RAD, and about how much private funding is actually being raised for public housing through the conversions  RAD, as first authorized by Congress in the FY2012 HUD appropriations law, was originally limited to 60,000 units of public housing (out of roughly 1 million units)  However, Congress has since expanded the demonstration  Most recently, in FY2018, Congress raised the cap so that up to 455,000 units of public housing will be permitted to convert to Section 8 under RAD, and it further expanded the program so that Section 202 Housing for the Elderly units can also convert  Not only is HUD currently implementing the FY2018 expansion, but the President's FY2020 budget request to Congress requests that the cap on public housing RAD conversions be eliminated completely  Several major disasters that have recently affected the United States have led to congressional activity related to disaster response and recovery programs  When such incidents occur, the President may authorize an emergency or major disaster declaration under the Robert T  Stafford Disaster Relief and Emergency Assistance Act (Stafford Act; P L  93-288 , as amended), making various housing assistance programs, including programs provided by the Federal Emergency Management Agency (FEMA) , available to disaster survivors  FEMA-provided housing assistance may include short-term, emergency sheltering accommodations under Section 403—Essential Assistance—of the Stafford Act (e g , the Transitional Sheltering Assistance (TSA) program, which is intended to provide short-term hotel/motel accommodations)  Interim housing needs may be met through the Individuals and Households Program (IHP) under Section 408—Federal Assistance to Individuals and Households—of the Stafford Act  IHP assistance may include financial (e g , assistance to rent alternate housing accommodations ) and/or direct assistance (e g , multi family lease and repair , Transportable Temporary Housing Units , or direct lease ) to eligible individuals and households who, as a result of an emergency or disaster, have uninsured or under-insured necessary expenses and serious needs that cannot be met through other means or forms of assistance  IHP assistance is intended to be temporary and is generally limited to a period of 18 months following the date of the declaration , but it may be extended by FEMA  The Disaster Recovery Reform Act of 2018 (DRRA, Division D of P L  115-254 ), which became law on October 5, 2018, is the most comprehensive reform of FEMA's disaster assistance programs since the passage of the Sandy Recovery Improvement Act of 2013 (SRIA, Division B of P L  113-2 ) and, prior to that, the Post-Katrina Emergency Management Reform Act of 2006 (PKEMRA, P L  109-295 )  The DRRA legislation focuses on improving pre-disaster planning and mitigation, response, and recovery, and increasing FEMA accountability  As such, it amends many sections of the Stafford Act  In addition to those amendments, DRRA includes new standalone authorities and requires reports to Congress, rulemaking, and other actions  The 116 th Congress has expressed interest in the oversight of DRRA's implementation, including sections that amend FEMA's temporary housing assistance programs under the Stafford Act  These sections include the following: DRRA Section 1211—State Administration of Assistance for Direct Temporary Housing and Permanent Housing Construction—amends Stafford Act Section 408(f)—Federal Assistance to Individuals and Households, State Role—to allow state, territorial, or tribal governments to administer Direct Temporary Housing Assistance and Permanent Housing Construction, in addition to Other Needs Assistance (ONA)  It also provides a mechanism for state and local units of government to be reimbursed for locally implemented housing solutions  This provision may allow states to customize disaster housing solutions and expedite disaster recovery; however, FEMA may need to provide guidance to clarify the requirements of the application and approval process for the state, territorial, or tribal government that seeks to administer these programs  DRRA Section 1212—Assistance to Individuals and Households—amends Stafford Act Section 408(h)—Federal Assistance to Individuals and Households, Maximum Amount of Assistance—to separate the cap on the maximum amount of financial assistance eligible individuals and households may receive for housing assistance and ONA  The provision also removes financial assistance to rent alternate housing accommodations from the cap, and creates an exception for accessibility-related costs  This may better enable FEMA's disaster assistance programs to meet the recovery-related needs of individuals, including those with disabilities and others with access and functional needs, and households who experience significant damage to their primary residence and personal property as a result of an emergency or major disaster  However, there is also the potential that this change may disincentivize sufficient insurance coverage because of the new ability for eligible individuals and households to receive separate and increased housing and ONA awards that more comprehensively cover disaster-related real and personal property losses  DRRA Section 1213—Multifamily Lease and Repair Assistance—amends Stafford Act Section 408(c)(1)(B)—Federal Assistance to Individuals and Households, Direct Assistance—to expand the eligible areas for multifamily lease and repair, and remove the requirement that the value of the improvements or repairs not exceed the value of the lease agreement  This may increase housing options for disaster survivors  The Inspector General of the Department of Homeland Security must assess the use of FEMA's direct assistance authority to justify this alternative to other temporary housing options, and submit a report to Congress  For more information on DRRA, see CRS Insight IN11055, The Disaster Recovery Reform Act: Homeland Security Issues in the 116th Congress   Additionally, tables of deadlines associated with the implementation actions and requirements of DRRA are available upon request  Native Americans living in tribal areas experience a variety of housing challenges  Housing conditions in tribal areas are generally worse than those for the United States as a whole, and factors such as the legal status of trust lands present additional complications for housing  In light of these challenges, and the federal government's long-standing trust relationship with tribes, certain federal housing programs provide funding specifically for housing in tribal areas  The Tribal HUD-Veterans Affairs Supportive Housing (Tribal HUD-VASH) program provides rental assistance and supportive services to Native American veterans who are homeless or at risk of homelessness  Tribal HUD-VASH is modeled on the broader HUD-Veterans Affairs Supportive Housing (HUD-VASH) program, which provides rental assistance and supportive services for homeless veterans  Tribal HUD-VASH was initially created and funded through the FY2015 HUD appropriations act ( P L  113-235 ), and funds to renew rental assistance have been provided in subsequent appropriations acts  However, no separate authorizing legislation for Tribal HUD-VASH currently exists  In the 116 th Congress, a bill to codify the Tribal HUD-VASH program ( S  257 ) was ordered to be reported favorably by the Senate Committee on Indian Affairs in February 2019  A substantively identical bill passed the Senate during the 115 th Congress ( S  1333 ), but the House ultimately did not consider it  For more information on HUD-VASH and Tribal HUD-VASH, see CRS Report RL34024, Veterans and Homelessness   The main federal program that provides housing assistance to Native American tribes and Alaska Native villages is the Native American Housing Block Grant (NAHBG), which was authorized by the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA,  P L  104-330 )  NAHASDA reorganized the federal system of housing assistance for tribes while recognizing the rights of tribal self-governance and self-determination  The NAHBG provides formula funding to tribes that can be used for a range of affordable housing activities that benefit primarily low-income Native Americans or Alaska Natives living in tribal areas  A separate block grant program authorized by NAHASDA, the Native Hawaiian Housing Block Grant (NHHBG), provides funding for affordable housing activities that benefit Native Hawaiians eligible to reside on the Hawaiian Home Lands  NAHASDA also authorizes a loan guarantee program, the Title VI Loan Guarantee, for tribes to carry out eligible affordable housing activities  The most recent authorization for most NAHASDA programs expired at the end of FY2013, although NAHASDA programs have generally continued to be funded in annual appropriations laws  (The NHHBG has not been reauthorized since its original authorization expired in FY2005, though it has continued to receive funding in most years  ) NAHASDA reauthorization legislation has been considered in varying degrees in the 113 th , 114 th , and 115 th Congresses but none was ultimately enacted  The 116 th Congress may again consider legislation to reauthorize NAHASDA  In general, tribes and Congress have been supportive of NAHASDA, though there has been some disagreement over specific provisions or policy proposals that have been included in reauthorization bills  Some of these disagreements involve debates over specific program changes that have been proposed  Others involve debate over broader issues, such as the appropriateness of providing federal funding for programs specifically for Native Hawaiians and whether such funding could be construed to provide benefits based on race  For more information on NAHASDA, see CRS Report R43307, The Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA): Background and Funding   In the past, Congress has regularly extended a number of temporary tax provisions that address a variety of policy issues, including certain provisions related to housing  This set of temporary provisions is commonly referred to as "tax extenders " Two housing-related provisions that have been included in tax extenders packages recently are (1) the exclusion for canceled mortgage debt, and (2) the deduction for mortgage insurance premiums, each of which is discussed further below  The most recently enacted tax extenders legislation was the Bipartisan Budget Act of 2018 ( P L  115-123 ) in the 115 th Congress  That law extended the exclusion for canceled mortgage debt and the ability to deduct mortgage insurance premiums through the end of 2017 (each had previously expired at the end of 2016)  As of the date of this report, these provisions had not been extended beyond 2017  In the 116 th Congress, S  617 , the Tax Extender and Disaster Relief Act of 2019, would extend each of these provisions through calendar year 2019  For more information on tax extenders in general, see CRS Report R45347, Tax Provisions That Expired in 2017 ("Tax Extenders")   Historically, when all or part of a taxpayer's mortgage debt has been forgiven, the forgiven amount has been included in the taxpayer's gross income for tax purposes  This income is typically referred to as canceled mortgage debt income  During the housing market turmoil of the late 2000s, some efforts to help troubled borrowers avoid foreclosure resulted in canceled mortgage debt  The Mortgage Forgiveness Debt Relief Act of 2007 ( P L  110-142 ), signed into law in December 2007, temporarily excluded qualified canceled mortgage debt income associated with a primary residence from taxation  The provision was originally effective for debt discharged before January 1, 2010, and was subsequently extended several times  Rationales put forth when the provision was originally enacted included minimizing hardship for distressed households, lessening the risk that nontax homeownership retention efforts would be thwarted by tax policy, and assisting in the recoveries of the housing market and overall economy  Arguments against the exclusion at the time included concerns that it makes debt forgiveness more attractive for homeowners, which could encourage homeowners to be less responsible about fulfilling debt obligations, and concerns about fairness given that the ability to realize the benefits depends on a variety of factors  More recently, because the economy, housing market, and foreclosure rates have improved significantly since the height of the housing and mortgage market turmoil, the exclusion may no longer be warranted  For more information on the exclusion for canceled mortgage debt, see CRS Report RL34212, Analysis of the Tax Exclusion for Canceled Mortgage Debt Income   Traditionally, homeowners have been able to deduct the interest paid on their mortgage, as well as property taxes they pay, as long as they itemize their tax deductions  Beginning in 2007, homeowners could also deduct qualifying mortgage insurance premiums as a result of the Tax Relief and Health Care Act of 2006 ( P L  109-432 )  Specifically, homeowners could effectively treat qualifying mortgage insurance premiums as mortgage interest, thus making the premiums deductible if homeowners itemized and their adjusted gross incomes were below a specified threshold ($55,000 for single, $110,000 for married filing jointly)  Originally, the deduction was to be available only for 2007, but it was subsequently extended several times  Two possible rationales for allowing the deduction of mortgage insurance premiums are that it assisted in the recovery of the housing market, and that it promotes homeownership  The housing market, however, has largely recovered from the market turmoil of the late 2000s, and it is not clear that the deduction has an effect on the homeownership rate  Furthermore, to the degree that owner-occupied housing is over subsidized, extending the deduction could lead to a greater misallocation of the resources that are directed toward the housing industry  In the past, Congress has regularly extended a number of temporary tax provisions that address a variety of policy issues, including certain provisions related to housing  This set of temporary provisions is commonly referred to as "tax extenders " Two housing-related provisions that have been included in tax extenders packages recently are (1) the exclusion for canceled mortgage debt, and (2) the deduction for mortgage insurance premiums, each of which is discussed further below  The most recently enacted tax extenders legislation was the Bipartisan Budget Act of 2018 ( P L  115-123 ) in the 115 th Congress  That law extended the exclusion for canceled mortgage debt and the ability to deduct mortgage insurance premiums through the end of 2017 (each had previously expired at the end of 2016)  As of the date of this report, these provisions had not been extended beyond 2017  In the 116 th Congress, S  617 , the Tax Extender and Disaster Relief Act of 2019, would extend each of these provisions through calendar year 2019  For more information on tax extenders in general, see CRS Report R45347, Tax Provisions That Expired in 2017 ("Tax Extenders")   Historically, when all or part of a taxpayer's mortgage debt has been forgiven, the forgiven amount has been included in the taxpayer's gross income for tax purposes  This income is typically referred to as canceled mortgage debt income  During the housing market turmoil of the late 2000s, some efforts to help troubled borrowers avoid foreclosure resulted in canceled mortgage debt  The Mortgage Forgiveness Debt Relief Act of 2007 ( P L  110-142 ), signed into law in December 2007, temporarily excluded qualified canceled mortgage debt income associated with a primary residence from taxation  The provision was originally effective for debt discharged before January 1, 2010, and was subsequently extended several times  Rationales put forth when the provision was originally enacted included minimizing hardship for distressed households, lessening the risk that nontax homeownership retention efforts would be thwarted by tax policy, and assisting in the recoveries of the housing market and overall economy  Arguments against the exclusion at the time included concerns that it makes debt forgiveness more attractive for homeowners, which could encourage homeowners to be less responsible about fulfilling debt obligations, and concerns about fairness given that the ability to realize the benefits depends on a variety of factors  More recently, because the economy, housing market, and foreclosure rates have improved significantly since the height of the housing and mortgage market turmoil, the exclusion may no longer be warranted  For more information on the exclusion for canceled mortgage debt, see CRS Report RL34212, Analysis of the Tax Exclusion for Canceled Mortgage Debt Income   Traditionally, homeowners have been able to deduct the interest paid on their mortgage, as well as property taxes they pay, as long as they itemize their tax deductions  Beginning in 2007, homeowners could also deduct qualifying mortgage insurance premiums as a result of the Tax Relief and Health Care Act of 2006 ( P L  109-432 )  Specifically, homeowners could effectively treat qualifying mortgage insurance premiums as mortgage interest, thus making the premiums deductible if homeowners itemized and their adjusted gross incomes were below a specified threshold ($55,000 for single, $110,000 for married filing jointly)  Originally, the deduction was to be available only for 2007, but it was subsequently extended several times  Two possible rationales for allowing the deduction of mortgage insurance premiums are that it assisted in the recovery of the housing market, and that it promotes homeownership  The housing market, however, has largely recovered from the market turmoil of the late 2000s, and it is not clear that the deduction has an effect on the homeownership rate  Furthermore, to the degree that owner-occupied housing is over subsidized, extending the deduction could lead to a greater misallocation of the resources that are directed toward the housing industry  

ground_truth: The federal government owns billions of dollars of personal property—such as office furniture, scientific equipment, and industrial machinery. By law, each agency is required to follow GSA's disposal process so that an agency's unneeded property can be used by other agencies or certain non-federal entities. Since 2012, agencies have reduced their office and warehouse space due to government-wide initiatives, a reduction that in turn has required agencies to dispose of some affected personal property. GAO was asked to review how federal agencies identify and dispose of unneeded personal property. This report examines (1) how selected agencies assess whether personal property is needed and (2) how these agencies dispose of unneeded property and how, if at all, space reduction efforts have affected disposals. GAO reviewed federal statutes and regulations, and selected five agencies—EPA, Forest Service, GSA, HUD, and IRS—mainly based on space reduction results and goals. GAO reviewed these agencies' property disposal data for 2012 through 2016 and interviewed headquarters and field staff about their property management and disposal processes. The five agencies GAO reviewed—the Environmental Protection Agency (EPA), Forest Service, General Services Administration (GSA), Department of Housing and Urban Development (HUD), and Internal Revenue Service (IRS)—generally do not have policies or processes for identifying unneeded personal property, such as office furniture, on a proactive basis. Instead, officials from these agencies said they typically identified unneeded property as a result of a “triggering event,” such as an office space reduction. Executive agencies are required by law to continuously review property under their control to identify unneeded personal property and then dispose of it promptly. Without such policies or processes, agencies may not be routinely identifying unneeded property that could be used elsewhere, and efforts to maximize federal personal property use and minimize unnecessary storage costs may not be effective. GSA has issued regulations establishing a government-wide disposal process for unneeded personal property. However, according to GSA officials, the agency lacks the authority to promulgate regulations or formal guidance on management of in-use agency property, and there is no government-wide guidance to agencies on identifying unneeded personal property. Agencies are required to have internal control activities—such as policies and procedures—for reasonable assurance of efficient operations and minimal resource waste, and the Office of Management and Budget (OMB) provides guidance to agencies on implementing such activities. Guidance from OMB that emphasizes agencies' internal control responsibilities could help ensure that agencies are proactively and regularly identifying property that is no longer needed. The selected agencies reported little difficulty in following GSA's personal property disposal process, reporting over 37,000 items as unneeded property in fiscal years 2012 through 2016. This property was disposed of through transfers to other agencies, donations to authorized recipients, sales, or discarding. When disposing of personal property from space reduction projects at locations GAO visited, agencies also reported using GSA's process (see figure). Overall, agencies said they have not experienced major challenges with disposing of personal property from space reduction efforts. This lack of challenges could be because projects are geographically dispersed and spread over several years. OMB should provide guidance to executive agencies on managing their personal property, emphasizing that agencies' policies or processes should reflect the requirement to continuously review and identify unneeded personal property. OMB did not comment on GAO's recommendation.

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



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

Report 1: Federal agencies’ personal property may include commonly used items, such as computers, office equipment, and furniture, and more specialized property reflective of their mission, such as scientific devices, fire control equipment, heavy machinery, precious metals, generators, and chemicals  Some items require special handling, such as hazardous materials, animals, and firearms  See figure 1 for examples of federal personal property  Federal agencies manage personal property while they are using it  Specifically, executive agencies are required by law to: maintain adequate inventory controls and accountability systems for property under their control; continually survey property under their control to identify excess; promptly report excess property to GSA and dispose of it in accordance with GSA regulations; and use existing agency property or obtain excess property from other federal agencies before purchasing new property  GSA assists agencies when they no longer need personal property and has established a government-wide personal-property disposal process in federal regulation  The process generally begins when an agency declares a personal property item as “excess”—that is, the agency determines it no longer needs the item to carry out its mission  Agencies are to make this determination only after ensuring the property is not needed elsewhere within the agency  Once property is declared excess, there are four potential property disposal methods: transfer to another federal agency or certain non-federal entities, donation, sale, and abandonment or destruction  Federal agencies and some non-federal entities have the priority to acquire excess property, through transfer  If none of these eligible entities have requested the property for transfer after 21 days, the property becomes “surplus”—that is, GSA determines that federal agencies no longer need the item to carry out their missions  Surplus property may be donated to eligible entities through a State Agency for Surplus Property, representing the state of the prospective donee  Property not donated within 5 days after the close of the 21-day screening period may be sold to the general public and, finally, unsold property may be abandoned or destroyed  See appendix II for an expanded description of the personal property disposal process  OMB is responsible for establishing government-wide management policies and requirements and provides guidance to agencies to implement them  OMB has issued guidance for specific types of personal property, such as for government aircraft and information technology systems  OMB also implemented the Freeze the Footprint and Reduce the Footprint initiatives, starting in 2012, to reduce the amount of domestic office and warehouse space needed by the federal government, in part, through consolidations and improved space utilization  As a result, federal agencies have reported achieving space reductions, and they have goals for additional reductions in the future  Although these reductions are a relatively small part of the federal government’s overall footprint, according to OMB, through this and other efforts agencies collectively reduced their office and warehouse space by about 25 million square feet from fiscal years 2012 through 20156  As federal agencies continue to reduce office and warehouse space, they will also likely have to manage or dispose of personal property, such as office furniture or stored property, from these spaces  Each of the five selected agencies we reviewed have policies and processes for carrying out their responsibilities to maintain adequate accountability systems and inventory controls for property under their control: All five agencies have policies for regularly inventorying their personal property to physically locate and verify property tracked in their asset management systems  EPA, GSA OAS, and IRS policies require physical inventories of personal property once a year, while Forest Service’s policy requires inventories every other fiscal year and a 10 percent sample inventory in the alternate years  HUD policies require inventories every 2 years at its headquarters, but according to HUD officials, field locations conduct inventories annually  All of the agencies also have an electronic asset-management system for maintaining information on personal property  Although each agency has its own system, and the type of information maintained varied by agency or type of property, generally each system generates a record for each property item that provides descriptive information about the item, such as manufacturer name, model number, serial number or other identifier, acquisition cost, condition, and current location  We found that the five agencies use these policies and processes to track and inventory certain property determined by each agency to be “accountable ” Accountable property is nonexpendable personal property with an expected useful life of 2 years or longer that an agency determines should be tracked in its property records, based on an item’s acquisition cost and sensitivity  Each agency determines its own appropriate acquisition cost threshold: four of the agencies—EPA, Forest Service, HUD, and IRS—consider property with an original acquisition cost of $5,000 or greater to be accountable; GSA OAS’s accountable threshold is $10,000 or greater  In addition, certain sensitive property— such as digital cameras, laptop computers with hard drives, and firearms—is considered accountable regardless of acquisition cost because it could be easily stolen or can store data or personal information  Table 1 provides a snapshot of accountable personal property items— including the reported original acquisition cost, amount, and examples— reported from 4 of the selected agencies’ asset management systems in 2017  The agencies in our review generally did not track in their asset management systems or formally inventory their remaining—or “non- accountable”—personal property that did not meet their definition of accountable property  According to agency officials we interviewed, they do not track or inventory low value items because: (1) the cost and manpower required to do so are too high; (2) certain property, such as office furniture, is less susceptible to theft; or (3) agencies believe they are not required by law to inventory low value items  While agencies are required to have systems of accounting and internal controls that provide effective control over, and accountability for, their assets, they generally have latitude in how they implement these procedures, including which property to track and inventory  While the five selected agencies had policies and processes for their property accountability and inventory control responsibilities, they largely did not have policies and processes for carrying out their responsibilities, as established in law, to continually survey property under their control to identify excess  According to officials at each of the selected agencies, the responsibility for identifying unneeded property generally lies with that agency’s property custodians—designated officials who are assigned responsibility for the property—or the agency program or individual using the property  Four of the five selected agencies’ policies do not require property custodians or other property users to assess property for continued need  Furthermore, these four agencies’ policies did not have specific criteria for the property custodian or user to assess property for continued need  Only IRS’s personal-property management policy specifies that the property custodian is responsible for identifying excess property and provides criteria to be applied in doing so, such as whether property is still needed in its location and the feasibility of transferring it to other locations, taking into account the property’s condition and transportation charges  An official at one of the selected agencies identified several specific criteria that should be used to assess property for continued need, including the item’s serviceability, whether it poses a safety hazard, and the feasibility of relocating it  However, the official acknowledged that these or any other criteria are not part of the agency’s formal policy  The personal property policy of an agency not included in our review— NASA—includes requirements and criteria to review NASA property for continued need in multiple ways  For example, it requires a high-level NASA official to conduct a walk-through inspection annually to identify idle or underused equipment that is no longer needed and report it as excess  It also requires, as part of an annual property inventory, that property that appears to be excess, worn out, or in obvious need of repair be noted as such and that guidance on identifying unneeded property be provided to personnel involved in conducting the inventories as well as employees assigned to use the property  In addition to not having policies on identifying and assessing property for continued need, agencies we reviewed also did not have a systematic process for doing so  Instead, when describing situations in which they declared property as excess, officials said they typically did so as a result of a “triggering event ” The types of triggering events the officials cited include an office move or consolidation or a lifecycle replacement of laptops  For example, officials from field locations of three of these agencies reported declaring most of their existing furniture as excess as the result of an office relocation or renovation  Agency officials said they were unable to use their existing furniture and had to declare it excess because it did not conform to new space utilization standards  At another agency, officials were disposing of a large number of laptop computers that had been declared excess because they had been replaced by new computers  Officials at two agencies said an assessment of property for continued need is an assumed practice that is part of the inventory for accountable property  However, an official from one of these agencies acknowledged that assessing need is not addressed in the written instructions provided to those conducting the inventory  Officials from two other agencies acknowledged that they continue to retain unneeded property that should be declared excess in storage on-site but had not pursued disposal due to other competing responsibilities with higher priorities  Proactively assessing personal property for continued need instead of responding to a triggering event can help agencies achieve both effective and efficient operations by ensuring that only needed property is retained and unneeded property is identified and declared excess  Federal internal control standards require that agencies design and maintain internal control activities—such as policies and procedures—to identify risks arising from mission and mission-support operations, and to provide reasonable assurance that agencies are operating in an efficient manner that minimizes the waste of resources  Such a system also provides reasonable assurance that agency property is safeguarded against waste, loss, or unauthorized use  OMB staff and GSA officials agreed that assessing all types of property—accountable and non-accountable—for continued need is important and called-for by internal control standards  Because the agencies we reviewed did not have systematic processes for assessing the continued need for personal property, they may not be aware of potential risks of maintaining property that may no longer be needed for operational purposes  Furthermore, previous work others have performed has shown that inaction on unneeded or idle property can limit efficient use of the government’s personal property, unnecessarily use an agency’s resources, or miss opportunities for potential cost savings, for example: The Department of Homeland Security’s Inspector General found that the U S  Coast Guard could not ensure that personal property was efficiently reutilized or properly disposed of to prevent unauthorized use or theft because the Coast Guard did not have adequate policies, procedures, and processes to identify and screen, reutilize, and dispose of excess personal property properly, including criteria for identifying such property  The EPA’s Inspector General estimated EPA could save $8 9 million in reduced warehouse costs through improved management of stored personal property  GSA personal property asset management studies conducted in 2003 and 2005 found, among other things, that personal property is not being used to its fullest extent in some agencies and that no government-wide usage assessment or standard exists to detect whether property is no longer needed and can be reported as excess  Without a triggering event, agencies may not be seeking out or identifying property that is no longer needed and declaring it excess as often as they should  Such unneeded property may be put to better use elsewhere within the agency or the federal government, or agencies may purchase or lease new property instead of using another agency’s property that is unneeded but not reported as excess  In addition, agencies may be missing opportunities to realize cost savings by identifying and disposing of unneeded property, such as property stored in warehouses, to reduce or make better use of that space  While the requirements for agencies to continually survey property under their control to identify excess is established in law, according to GSA officials, there are no government-wide regulations on managing personal property or fulfilling this specific requirement  According to GSA OGP officials, GSA does not have the authority to promulgate regulations or issue formal guidance on personal property that is in use by executive agencies  Furthermore, according to the officials, GSA is only authorized by law to prescribe regulations on excess and surplus personal property  OMB staff stated that they could issue a notification, such as a controller alert to agencies’ chief financial officers, to reinforce the statutory requirement that agencies conduct assessments of personal property for continued need  OMB periodically issues such alerts to highlight emerging financial management issues for agencies and also issues guidance to agencies through bulletins, circulars, and memorandums  By issuing a controller alert or other guidance, OMB can help ensure that agencies are proactively taking steps to evaluate their property for continued need, including developing appropriate policies for doing so, and can thereby improve efforts to promote maximum use of excess personal property  Officials from the five agencies we reviewed reported that they followed GSA’s automated process to dispose of property once they had made the determination it was no longer needed to support their agency’s mission  As previously described, GSA regulations on disposing of property establish a specific process for all executive agencies to follow, and GSA has also issued guidance to help agencies dispose of property under this process  In particular, once an agency has determined that the property it has is no longer needed within the agency, the agency is required to promptly report the property to GSA as excess, typically by entering information about it into GSAXcess, GSA’s web-based system for facilitating personal property disposal  This method requires agency employees to manually enter information using data entry screens that include help screens and error messages  GSA encourages agencies to provide a complete description of the property and to include multiple photographs of it  Officials from the five agencies we reviewed reported no significant difficulties with entering information into GSAXcess; collectively, these agencies reported over 37,000 items as excess property from fiscal year 2012 through 2016  Figure 2 indicates the number of items each selected agency reported to GSA as excess during that period  Once information entry is completed, the disposal process begins  If the property is not disposed of during one stage, it advances to the next stage  The disposal process is shown in figure 3  Agency officials we interviewed told us that responsibility for disposing of property is decentralized and typically occurs at the property’s location, whether at an agency headquarters, regional office, or lower level  Because of the large federal government presence in the Washington, D C , area, agency offices in that area may have access to resources to facilitate the disposal process that are unavailable elsewhere, such as transferring excess property to certain entities that complete some or all aspects of the disposal process for a fee  Two such entities are GSA’s Personal Property Center in Springfield, Virginia, which takes full accountability and control of an agency’s excess property for a fee and handles all the details of the disposal process, and USDA’s Centralized Excess Property Operation in Beltsville, Maryland  According to USDA’s Agriculture Property Management Regulations, property not needed by USDA or its bureau offices in the Washington, D C , area must be transferred to this office for final disposal actions  It also provides these same services to some non-USDA agencies  Agencies also use GSAXcess to search for and select available excess property  Agency officials told us that the system also sends disposition instructions to the property-holding agency, when the property is to be transferred to other federal agencies, donated, or sold and that the agencies follow these instructions  For example, when an agency requests an excess item in GSAXcess and GSA approves the request, the system notifies the requesting agency and the property-holding agency and provides contact information to arrange to complete the transaction  None of the selected agency officials reported difficulties completing a transfer or donation transaction  For property not transferred, donated, or sold, GSA notifies the agency that the property has no commercial value and can be abandoned or destroyed  All of our selected agencies reported trying to recycle such property  Selected agency officials told us they disposed of property from space reduction efforts, such as Freeze the Footprint and Reduce the Footprint, the same way as other personal property—using GSA’s disposal process  To meet space reduction goals, selected agencies are undertaking projects at dozens of locations  Projects have primarily involved leased space for offices and warehouses and have included office moves, consolidations, and closures  As federal agencies carry out these space reduction projects, they must also address any personal property in the project spaces  Selected agencies reported several factors that affected their decisions about this property, which for three of the agencies was primarily office furniture  Four agencies reported needing less space than they previously occupied because of changes in agency missions or staffing levels  Furthermore, officials from GSA OAS and IRS noted that workplace trends, including teleworking and decreased staffing, reduced the space needed  Finally, agencies also reported that the office furniture itself was mostly unsuitable because it was old and because it could not be configured for use in more efficient office space designs  As a result, some selected agency locations that completed an office move or renovation project reported that most of their existing furniture was not needed in their new space  For example, in its Reduce the Footprint plan for fiscal years 2017 through 2021, HUD noted that many of its locations were designed and furnished when it had a much larger staffing level and reported that in 2016, its usable square feet per employee was 356  Subsequently, HUD revised its space design standards, requiring future office spaces to adhere to a utilization rate of 175 square feet or less  At the HUD project we visited, an official told us the furniture in use before the project was old and was generally too large to be used to achieve space design standards  In 2017, Housing and Urban Development (HUD) reduced its Denver regional office space by 30 percent  HUD’s lease was expiring and it needed less space because it had fewer employees in the office, in part due to increased telework  Adhering to new space utilization standards in its office and furniture design further reduced HUD’s overall required space  An example of a new workstation is shown above  Before the project, the agency occupied about five floors of a commercial building  HUD renovated in place, one floor at a time, and replaced its existing office furniture with new  Personal property at this office included primarily office furniture, such as desks and 25-year old modular systems, and equipment, such as telephones  As each floor was completed and employees moved to new workstations, the property official on-site disposed of their old furniture and workstations by entering its information in GSAXcess  The official reported selling some of the excess furniture after completing the first floor but recycled or discarded excess furniture in subsequent rounds  In some cases, agencies did not dispose of all the personal property after a space reduction project but instead were able to retain it for other uses within the agency  For example, IRS officials reported closing an office in Englewood, Colorado, and transferred its furniture to Ogden, Utah, for storage for an upcoming project  GSA OAS officials in Denver said that after a space reduction project in which GSA decreased the size of its regional office, it retained the unneeded furniture and office space for temporary use by other agencies  For property that was declared excess following a space reduction project, agencies reported transferring, donating, and selling property to dispose of it, using GSA’s process  For example, officials in GSA OAS, Forest Service, and IRS locations told us they transferred some excess property to other federal agencies  The Forest Service in Denver transferred some modular office furniture to the Bureau of Land Management and the U S  Postal Service  The Forest Service and IRS also reported donating property, such as office furniture and equipment, through the State Agencies for Surplus Property program  Four agencies reported selling some of their property from a space reduction project  For example, HUD’s regional office in Denver sold some of its excess office furniture, which dated to 1992, and recycled or discarded the remainder  When disposing of property from a space reduction project, some agencies sought assistance from GSA  GSA’s Office of Personal Property Management (GSA OPPM) assists agencies, when requested, in disposing of personal property, and officials at selected agency locations reported receiving assistance and training  In one example, GSA officials told us that a regional office of a selected agency needed to dispose of an office full of furniture and, in addition to using the disposal process, contacted GSA OPPM for additional assistance  Because of the large amount of property, GSA OPPM took steps to make other agencies in the area aware of the available property and facilitated access to allow agencies to view the property  In another example, GSA OPPM officials met with officials from another agency in the planning stages of a relocation to answer questions and provided advice and guidance for disposing of personal property  When the Forest Service’s lease on its Denver-area office expired, the agency leased space in another location, requiring a move but reducing its office by over 21,000 square feet  The agency sought to conform to new space utilization standards, which required more efficiently-designed furniture than its existing office furniture  Because the Forest Service did not reuse most of its old furniture in its new space, it no longer had a need for it  The Forest Service retained some of the furniture for use in other Forest Service offices within the region and declared the remainder as excess  Through GSAXcess, the Forest Service transferred some of its excess furniture to other federal agencies, such as the Bureau of Land Management and the U S  Postal Service  The Forest Service sold some furniture at auction; broken items were recycled  Agencies may dispose of large amounts of property during a space reduction project, but overall, agency officials reported few challenges in doing so  This may be in part because any effects from space reductions are distributed across an entire agency  Although selected agencies’ average Reduce the Footprint space reduction goals ranged from 97,000 square feet to 662,000 square feet each fiscal year from 2016 to 2020, each agency’s efforts consisted of dozens of geographically dispersed projects of various sizes to be completed over several years  For example, as of fiscal year 2016, EPA had 21 space reduction projects planned from fiscal years 2016 through 2021, with individual anticipated reductions ranging from less than 1,000 square feet to more than 140,000 square feet  At least one project is present in 8 of EPA’s 10 regions  Agencies’ ability to pay for space reduction projects may also have affected these projects’ effects  Two selected agencies said they delayed projects because of a lack of funding  Agencies may reduce costs over the long term because of lower rent for smaller spaces but they may have to pay some expenses upfront, such as for moving, renovations, and new furniture  Although officials from all five agencies told us they have been able to manage personal property disposals from space reductions, they identified factors that can impact the efficient use of the disposal process during a space reduction project and some strategies taken to address them: Inventorying non-accountable property: As a space reduction project commenced at a location, most selected agencies reported that they did not have a complete list of the personal property affected by the project  As previously described, selected agencies do not maintain an itemized list of non-accountable personal property and for four agencies, office furniture is generally non-accountable  During a space reduction project, property personnel had to develop some type of inventory to identify property that would be needed and property that should be disposed of  Selected agencies had various methods for conducting such an inventory  For example, officials from two agencies said they walked through the affected space and created a list of all the items  Officials from one agency said a contractor was hired for this purpose  Most agencies reported using the inventory they created to enter information on excess property into GSAXcess  Officials at GSA’s OPPM offices in Philadelphia and Fort Worth said that they offer training and guidance to agencies in conducting inventories  Managing disposals within time frames: Agencies generally are not able to begin the disposal process until the property is no longer in use  For example, agency staff continue to use their old workspaces until they can move to new workspaces  Agencies also face deadlines, such as vacating space due to a lease expiration or commencement of renovation work  Officials from three agencies described challenges completing the disposal process—reporting excess personal property as well as completing transactions to transfer, donate, sell or abandon or destroy it—within required time frames  Some agency officials reported using different strategies to address this timing challenge  For example, one agency official was able to enter information about the excess property items into GSAXcess while employees were still using them  According to the official, this was possible because a note could be included in the property item’s description in GSAXcess, with the date when the property would be available  When the property was no longer in-use within the agency, the transfers or other transactions were completed  Additionally, an agency may conduct an on-site screening of its unneeded property to allow other federal agencies or authorized parties to physically view and identify any furniture they want  For example, GSA OPPM officials in Philadelphia conducted an on-site screening of unneeded office furniture resulting from the agency’s regional office relocation  Federal agencies collectively have billions of dollars’ worth of personal property, ranging from office furniture to highly specialized equipment that, when in use, supports agency missions  However, the agencies in our review did not have policies and systematic processes for identifying unneeded property  Furthermore, other’s previous work has shown that agencies across the government may not be effectively assessing their property for continued need, leading to idle property that could be put to better use elsewhere within the agency or the federal government and potential unnecessary storage costs  Consequently, agencies may be retaining property that is no longer needed  GSA has recognized that opportunities may exist for agencies to more effectively manage property under their control, but according to GSA OGP officials, GSA’s authority is limited to agency property that has been declared excess or surplus  According to OMB staff, OMB has the authority to issue guidance, such as controller alerts, emphasizing agencies’ property management obligations, and thus, it is well-positioned to assist agencies to more effectively manage their property and to ensure unneeded property is made available to others, as appropriate  The Director of OMB should provide guidance to executive agencies on managing their personal property, emphasizing that agencies’ policies or processes should reflect the requirement to continuously review and identify unneeded personal property  (Recommendation 1) We provided a draft of this report to OMB, EPA, the Forest Service, GSA, HUD, and IRS for comment  OMB stated that it did not have any comments on our draft report in an email and provided a technical clarification to the report, which we incorporated  GSA and IRS provided technical comments in an email, which we incorporated as appropriate  EPA, the Forest Service, and HUD each stated in an email that they did not have any comments on the draft report  We are sending copies of this report to the appropriate congressional committees, the Director of the Office of Management and Budget, the Administrator of the Environmental Protection Agency, the Secretary of the U S  Department of Agriculture, the Administrator of the General Services Administration, the Secretary of the Department of Housing and Urban Development, and the Secretary of the Department of the Treasury  In addition, the report is available at no charge on the GAO website at http://www gao gov  If you or your staffs have any questions about this report, please contact me at (202) 512-2834 or rectanusl@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 making key contributions to this report are listed in appendix III  The objectives of this report were to examine (1) how selected federal agencies assess whether personal property is needed and (2) how selected federal agencies dispose of unneeded personal property, and how, if at all, space reduction efforts have affected disposals  We excluded certain types of personal property, such as aircraft and vehicles, from our review because of our prior or ongoing work  To address our objectives, we reviewed applicable federal statutes and regulations pertaining to personal property management and disposal, our prior work, and reports by federal agencies’ Offices of Inspector General on personal property issues  In addition, to determine how selected federal agencies assess whether personal property is needed, we conducted background searches to inform our understanding of key practices for personal property and asset management through a search of databases containing peer-reviewed articles, government reports, general news, hearings and transcripts, and association and think tank papers  We also reviewed relevant asset management practices, such as ASTM standards and the General Services Administration’s (GSA) Federal Asset Management Evaluation and Personal Property Asset Management Study  In order to select agencies that may have had recent experiences with excess personal property, we selected 5 of the 24 agencies that were included in the Freeze the Footprint and Reduce the Footprint initiatives  We selected agencies based on their overall Freeze the Footprint results, in terms of the amount of square feet reduced, and Reduce the Footprint goals for reducing domestic office and warehouse space, and the amount of personal property declared excess over the last 5 years, as reported to GSA’s GSAXcess system from fiscal years 2012 to 2016, to coincide with the Freeze the Footprint time frame  Specifically, we obtained information on the Freeze the Footprint results and Reduce the Footprint goals from the Office of Management and Budget’s public website and from Performance gov  We limited our scope to civilian federal agencies with personal property within the United States  Although we have previously reported that the overall accuracy of data that agencies reported on office and warehouse space reductions could be improved, we found that the data were generally reliable for our purposes  After reviewing the data for any inconsistencies and discussing the information with selected agency officials to ensure that the reported numbers for the Reduce the Footprint initiative were current, we determined that the quality of the data were sufficient for our use in selecting agencies  In order to select agencies that were more likely to have relevant, recent experience with excess personal property from space reduction efforts, we ranked these agencies based on their Freeze the Footprint results, Reduce the Footprint goals, and the amount of declared excess personal property, and eliminated the bottom third of the agencies  We selected GSA as our first agency due to its central role in excess personal property disposal, and randomly selected four additional agencies from the remaining agencies  These agencies were the Environmental Protection Agency, the U S  Department of Agriculture, the Department of Housing and Urban Development, and the Department of the Treasury  The organizational structure of two selected agencies, the Department of Agriculture and the Department of the Treasury, is different than the other three agencies in that they are comprised primarily of sub-agencies  Therefore, we selected the largest sub-agency for both departments—the Forest Service within the Department of Agriculture and the Internal Revenue Service within the Department of the Treasury  We obtained information from the five selected federal agencies on the total value and number of items in their asset management systems in 2017 to understand the size and scope of personal property assets they manage  As we used the information to describe the scope of the agencies’ property holdings, we did not verify the data  We also analyzed documents, such as the selected agencies’ personal property management policies, along with policies from the National Aeronautics and Space Administration and Department of Energy, to understand how they addressed requirements for managing personal property  We included these agencies’ policies based on our review of prior work related to personal property  We interviewed officials from the selected agencies about their processes for managing personal property assets, such as their inventory procedures  However, we did not independently assess agencies’ inventory practices  We also interviewed staff from the Office of Management and Budget (OMB) to discuss regulations and policies pertaining to personal property and OMB’s role in personal property management  To determine how selected federal agencies dispose of excess and surplus personal property and how space reduction efforts may have affected disposals, in addition to the above, we obtained information from each selected agency on its space reduction projects and interviewed officials about their roles and responsibilities in the agency’s space reduction planning efforts and personal property disposal process  We also conducted site visits to Philadelphia, Pennsylvania, and Denver, Colorado to meet with regional and local officials from each selected agency responsible for managing and disposing of personal property  These locations were chosen based on the number of our selected federal agencies present, the amount of excess personal property declared, and the existence of space reduction projects  We discussed property accountability policies, overall personal property disposal processes, and how the disposal processes were affected by government-wide space savings initiatives, such as Freeze the Footprint and Reduce the Footprint, and any efforts to prepare for them, and requested supporting documentation on the amount of property declared as excess and the disposition outcomes of that property  We did not independently verify the information that was provided, as data reported as excess from space reduction projects are not always tracked separately from other property disposed of for other reasons  We reviewed documents and interviewed officials from GSA’s Office of Personal Property Management (GSA OPPM) in GSA’s headquarters, in Philadelphia and in Fort Worth, Texas, to discuss their role in assisting agencies in disposing of personal property and to obtain their views on how personal property disposals have been affected by space reductions  Finally, we interviewed GSA’s Office of Government-wide Policy (GSA OGP) officials about the Interagency Committee on Property Management and the Property Management Executive Council regarding their personal property and asset management efforts and met with officials and representatives from the following: the U S  Department of Agriculture’s Centralized Excess Property Operation, the Users and Screeners Association–Federal Excess Personal Property, and the National Association of State Agencies for Surplus Property to discuss their roles in the reuse and disposal of Federal personal property  We conducted this performance audit from July 2016 to February 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  The Federal Property and Administrative Services Act of 1949, as amended, requires executive agencies, in part, to promptly report excess property to the General Services Administration (GSA) and dispose of it in accordance with GSA regulations  Each executive agency is also required to fulfill requirements for personal property by using existing agency property or by obtaining excess property from other federal agencies before purchasing new property  GSA’s disposal process, as laid out in federal regulation, incorporates and facilitates these requirements, providing a means for both disposing of and acquiring unneeded property: agencies with excess personal property can dispose of it and other agencies, authorized non-federal entities, and, eventually, the general public can acquire this property  After determining that a property item is no longer needed to complete its mission, an agency may have several options for proceeding before formally declaring the property as excess to GSA: Immediately authorize abandonment or destruction of the property: Determine, in writing, that the property has no commercial value or the estimated cost of its continued care and handling would exceed the estimated proceeds from its sale  If an agency makes such a determination, it may abandon or destroy the property without reporting it to GSA as excess  In lieu of abandonment or destruction, an agency may donate excess personal property to a public body without going through GSA  Directly transfer the property to another federal agency: Agencies usually become aware of available property through informal means, such as a contact at the disposing agency, according to GSA  GSA approval for such a transfer is not needed if the total original acquisition cost for each item does not exceed $10,000  If this cost is greater than $10,000, the acquiring agency must obtain prior approval from GSA  In either case, the acquiring agency must notify GSA of the transfer  Directly transfer the property to an eligible recipient under a special authority: Special authorities are legal provisions that are designed to give excess assets to groups that may use them for a particular purpose, such as universities that can use the National Aeronautics and Space Administration’s scientific equipment in their research  Some authorities exist to collectively support all federal agencies and some support an agency-specific program  According to GSA, the primary government-wide programs are the Stevenson-Wydler Technology Innovation Act of 1980 and Executive Order 12999, also known as the Computers for Learning program  Recipients meeting eligibility requirements of the special authority contact agencies to determine the availability of property, and the agency and recipient must complete the appropriate documentation to make a record of the transfer  An agency initiates GSA’s disposal process by formally declaring property as excess, either by completing and submitting a form to GSA or, more typically, by electronic entry of an item into GSAXcess, GSA’s real-time, Web-based site for facilitating the disposal process  The latter method requires agency employees to enter information about the excess property using data entry screens that include help screens and error messages  GSA encourages reporting agencies to provide a complete description of the property and to include multiple photographs of the property  The disposal process generally consists of four sequential stages in which personal property may be transferred to another agency or eligible recipient, donated, sold, or abandoned or destroyed, as described below  If the property is not disposed of during one stage, it advances to the next stage, though the holding agency generally retains physical custody of the property until it is disposed of  Table 2 illustrates actions a disposing agency and eligible property recipients take during each of the four stages of the disposal process after an agency declares property excess  In addition to the individual named above, the following individuals made important contributions to this report: David J  Wise (Director), Nancy Lueke (Assistant Director), Travis Thomson (Analyst-in-Charge), Lacey Coppage, Rosa Leung, Josh Ormond, Amy Rosewarne, Pamela Vines, and Elizabeth Wood 


Report 2:  Customs and Border Protection (CBP) executes a separate TECS Modernization program  Conducted additional testing of a revised key performance parameter and cybersecurity  Program has improved integration with external systems  GAO last reported on this program in April 2017 (GAO-17-346SP)  In November 2017, Department of Homeland Security (DHS) leadership approved a revised life-cycle cost estimate (LCCE) and acquisition program baseline (APB) in preparation for the program’s acquisition decision event (ADE) 3 following deployment of final functionality  According to ICE officials, the program completed deployment of full operational capability (FOC) functionality in August 2017—4 months earlier than initially planned  FOC functionality included enhancements to case management capabilities, such as improved system search capabilities  The functionality was deployed in conjunction with enhancements and fixes for initial operational capability (IOC) functionality  The program achieved IOC in June 2016, which entailed delivering 80 percent of the modernized TECS functionality and successfully transitioning ICE off the legacy system  The overall cost thresholds in the current APB increased compared to the program’s prior APB from July 2016  Specifically, the acquisition cost threshold decreased by $14 million and the operations and maintenance (O&M) cost threshold increased by $147 million  These costs changed for various reasons, such as the following: The acquisition cost threshold decreased when ICE included actual costs through fiscal year 2016 and accounted for funding shortfalls  ICE officials told GAO that the program experienced a funding shortfall in fiscal year 2017 that led it to adjust spending under multiple contracts and shift some costs to fiscal year 2018  The O&M cost threshold increased when ICE extended the estimate from fiscal years 2024 to 2028 and continued contractor and systems engineering support for an additional 11 years  The affordability gap from fiscal years 2018 to 2022 may be overstated because DHS’s funding plan to Congress no longer contained O&M funding for individual programs  ICE officials anticipate receiving approximately $94 million in O&M funding to cover an estimated $105 million in O&M costs over this 5-year period  ICE officials said that they are pursuing strategies to reduce future O&M costs, such as awarding a competitive contract in March 2018 for O&M activities and any future enhancements  ICE officials continue to work closely with CBP to provide users access to various systems through the modernized TECS system  The program previously worked to resolve technical problems with CBP support services that emerged during final integration testing of the ICE and CBP modernized TECS systems, which contributed to a 3-month delay in achieving IOC  Users reported during initial OT&E that the modernized ICE TECS system was an improvement over the legacy system but they requested better integration with external systems, such as CBP’s Seized Assets and Case Tracking System (SEACATS), which they use to determine the disposition of seized assets for case management and reporting purposes  According to ICE officials, CBP subsequently decided to modernize SEACATS  ICE officials stated that they have coordinated closely with CBP to integrate the two modernized systems and ensure un-interrupted access to SEACATS for TECS users  For example, ICE developed a workaround so that TECS users maintain access to the latest seizure data available from the modernized SEACATS  ICE officials added that they continue to make improvements in interfaces with other external systems as prioritized by end users  In July 2017, ICE reported that the program was fully staffed  ICE officials provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  CONTINUOUS DIAGNOSTICS AND MITIGATION (CDM) NATIONAL PROTECTION AND PROGRAMS DIRECTORATE (NPPD) The CDM program aims to strengthen the cybersecurity of the federal government’s networks at more than 65 participating civilian agencies by providing tools and dashboards that continually monitor and report on network vulnerabilities  Tools are delivered in four phases: phase 1 and 2 tools report vulnerabilities in hardware and software, and user access controls, respectively; phase 3 tools will report on efforts to prevent attacks; and phase 4 tools will provide encryption to protect network data  Program revised its key performance parameters and test and evaluation master plan as a part of its rebaseline  Program plans to change its acquisition strategy and continues to face workforce challenges  GAO last reported on this program in April 2017 (GAO-17-346SP)  In June 2017, Department of Homeland Security (DHS) leadership re-baselined the CDM program for the third time to approve initiating development of phase 3 and to address challenges encountered during phase 1  Specifically, contractors previously found large gaps—ranging from 19 to 384 percent—in the actual number of devices needing phase 1 tools than what was originally reported by 12 agencies  The operations and maintenance (O&M) cost thresholds increased by $631 million when the program shifted some potential acquisition costs to beThe program’s new acquisition program baseline (APB) modified the program’s cost, schedule, and performance parameters  For example: consistent with DHS’s new appropriation structure, among other things  The O&M cost thresholds previously decreased by $1 2 billion, in part, because DHS leadership determined the program would only fund CDM tools for the first 2 years after deployment  The acquisition costs did not increase despite phase 1 challenges, in part, because coverage for the U S  Postal Service— The program’s full operational capability (FOC) date slipped almost 4 years after which had the largest gap in estimated devices—will no longer be funded by the CDM program  it was redefined from deployment of phase 1-3 tools at 5 agencies to the availability of these tools to all participating agencies  However, the program’s costs will increase and its FOC date may slip further once the program establishes goals for phase 4  NPPD officials said they were unable to complete planning efforts for phase 4 in time to incorporate it into the most recent APB revision and, therefore, plan to re-baseline the CDM program again in 2018  The CDM program identified a potential acquisition affordability gap in fiscal year 2018 based on its revised life-cycle cost estimate, which it addressed by adjusting the phase 3 schedule to shift some acquisition costs out to fiscal year 2020  The affordability gap from fiscal years 2018 to 2022 may be overstated because DHS’s funding plan to Congress no longer contained O&M funding for individual programs  However, the program anticipates receiving approximately $281 million in O&M funding over the 5-year period  12/16 Phase 1 initial operational capability (IOC) National Protection and Programs Directorate (NPPD) CONTINUOUS DIAGNOSTICS AND MITIGATION (CDM) The CDM program updated its acquisition plan as a part of its re-baselining efforts, which reflects a change in strategy for procuring CDM tools and integration services for participating agencies through the General Services Administration (GSA)  Previously, the CDM program issued task orders for these tools and services through blanket purchase agreements established under vendors’ GSA Federal Supply Schedule contracts  These agreements are set to expire in August 2018  Going forward, the program plans to use an existing GSA government-wide acquisition contract—known as Alliant—to obtain CDM tools and services  According to NPPD officials, the new acquisition strategy is intended to provide greater flexibility in contracting for current capabilities and to support future capabilities  It will also allow participating agencies to order additional CDM-approved products or services from GSA’s schedule for information technology equipment, software, and services; however, as of September 2017, NPPD officials stated they were in the process of determining how this process will work  NPPD officials said that the program continues to face workforce challenges related to managing the program’s change in contracts and planning for phase 4  In February 2018, NPPD officials stated that they had on-boarded 5 staff to help address the program’s reported fiscal year 2017 gap of 16 full time equivalents  They noted that another 5 candidates were in the hiring process and that NPPD continues to work with officials from DHS’s Office of the Chief Security Officer to reduce continued challenges in onboarding new staff due to the lengthy security clearance process  In addition to activities outlined in this assessment, NPPD officials stated that the CDM program continues to manage its budget to ensure program costs match available funding, and is leveraging the collective buying power of federal agencies and strategic sourcing to achieve government cost savings on CDM products  NPPD officials also stated that, as of December 2017, CDM has deployed agency dashboards to 23 agencies and was conducting and testing information exchanges of data between agency dashboards and the federal dashboard  HOMELAND ADVANCED RECOGNITION TECHNOLOGY (HART) NATIONAL PROTECTION AND PROGRAMS DIRECTORATE (NPPD) HART will replace and modernize the Department of Homeland Security’s (DHS) legacy biometric identification system—known as IDENT—which shares information on foreign nationals with U S  government and foreign partners to facilitate legitimate travel, trade, and immigration  NPPD plans to develop HART in four increments: increments 1 and 2 will replace and enhance IDENT functionality; increments 3 and 4 will provide additional biometric services, as well as a web portal and new tools for analysis and reporting  Key performance parameters will be demonstrated as capability is developed  Program has developed mitigation plans to address workforce risks  GAO last reported on this program in April 2017 (GAO-17-346SP)  In June 2017, NPPD declared a schedule breach when it determined the HART program would not be able to meet its initial acquisition program baseline (APB) milestones  DHS leadership approved the program’s APB in April 2016 and authorized the program to initiate development efforts for increments 1 and 2 in October 2016  NPPD officials attribute the schedule slip to multiple delays in awarding the contract for increments 1 and 2 as a result of issues with the request for proposals (RFP)  The program released the RFP in February 2017 and awarded the contract in September 2017—approximately 9 months later than NPPD officials had planned  However, the program experienced additional delays after a bid protest to the contract award was filed with GAO in October 2017  GAO subsequently denied the protest and NPPD officials said the program plans to initiate work with the contractor in March 2018  HART initially planned to achieve initial operational capability (IOC) with the deployment of increment 1 in December 2018, at which point program officials anticipated beginning to transition users from IDENT to HART  However, it is unclear when this will now occur, which is a significant challenge because IDENT is at risk of failure and may be unable to fully support requirements related to new programs— such as Customs and Border Protection’s Biometric Entry-Exit  As a result, delays in HART could contribute to delays in other DHS acquisition programs  The program updated its life-cycle cost estimate (LCCE) in June 2017 to inform the budget process  This LCCE is within its current APB cost thresholds, but does not account for the contractor’s solution  The program plans to update its LCCE and other acquisition documentation, such as its APB, after initiating work with the contractor  The affordability gap from fiscal years 2018 to 2022 may be overstated because DHS’s funding plan to Congress no longer contained operations and maintenance (O&M) funding for individual programs  However, the program anticipates receiving approximately $1 3 billion in O&M funding to cover $1 5 billion in O&M costs  NPPD officials explained that the current O&M cost estimate includes costs for maintaining IDENT  Future LCCE updates will reflect delivery of services through HART, which NPPD officials anticipate will be more cost effective  National Protection and Programs Directorate (NPPD) HOMELAND ADVANCED RECOGNITION TECHNOLOGY (HART) NPPD officials told GAO they are currently planning for increments 3 and 4 and plan to refine the cost, schedule, and performance goals for these increments in its next APB  NPPD plans to pursue a separate contract for the development and delivery of increments 3 and 4  However, the program will require DHS leadership approval prior to initiating these development efforts  In September 2017, NPPD officials told GAO they had hired two staff and planned to hire additional staff to address the program’s staffing gap of 5 5 full time equivalents  In response to DHS leadership’s direction, the program coordinated with DHS’s Chief Technology Officer to assess the skills and functions of staff necessary to execute the program and to develop the HART staffing plan  In its June 2017 staffing plan, the program identified workforce risks, including the potential for experiencing insufficient technical skillsets and inadequate resources to simultaneously execute development of HART and operate IDENT  To mitigate these risks, the program plans to develop a training plan to address the gap in skills, leverage support within the program by cross- training staff, and issue contracts for additional support as needed, among other things  However, if the program does not have adequate staff to complete these efforts, it may experience further schedule delays  NPPD officials stated that the program’s schedule delays pose a challenge because IDENT remains at risk of failure despite incremental improvements to extend its service life and may be unable to fully support new customer requirements or requirements related to new programs  They added that the program has a risk management process, which it is using to manage a variety of identified risks—including several related to workforce  They noted that these risks have not yet materialized  NPPD officials also provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  NATIONAL CYBERSECURITY PROTECTION SYSTEM (NCPS) NATIONAL PROTECTION AND PROGRAMS DIRECTORATE (NPPD) NCPS is intended to defend the federal civilian government from cyber threats  NCPS develops and delivers capabilities through a series of “blocks ” Blocks 1 0, 2 0, and 2 1 are fully deployed and provide intrusion-detection and analytic capabilities across the government  The NCPS program is currently deploying EINSTEIN 3 Accelerated (EA) to provide intrusion-prevention capabilities and plans to deliver block 2 2 to improve information sharing across agencies  A at 95 percent of agencies and departments  GAO last reported on this program in April 2017 (GAO-17-346SP)  NPPD officials said the program is on track to meet the schedule and cost goals in its current acquisition program baseline (APB), which reflected changes resulting from the adoption of some of the Department of Homeland Security’s (DHS) Homeland Security Information Network (HSIN) capabilities for block 2 2 rather than developing custom solutions  However, challenges in completing test plans delayed testing: Initial operational test and evaluation (OT&E) for EA transition to sustainment— slipped from September 2016 to May 2017  The initial test event for block 2 2—intended to inform the ADE 2C for deploying additional block 2 2 capabilities—slipped from March 2017 to September 2017  As of August 2017, NPPD officials said NCPS had adopted all planned HSIN capabilities but one because of security concerns, which HSIN is addressing by piloting a new tool  The program updated its life-cycle cost estimate (LCCE) in June 2017 to inform the budget process, which is within its current APB cost thresholds  However, the program plans to update the LCCE again to support the EA, and costs through fiscal year 2022  The affordability gap from fiscal years 2018 to 2022 may be overstated because DHS’s funding plan no longer contained O&M funding for individual programs  NPPD officials anticipate receiving $1 8 billion in O&M funding over this 5-year period  The program is also projected to have an $83 million surplus in acquisition funding over this 5-year period, which NPPD officials anticipate will be less once the LCCE revision is complete  National Protection and Programs Directorate (NPPD) NATIONAL CYBERSECURITY PROTECTION SYSTEM (NCPS) A intrusion-prevention capabilities have been primarily provided through sole source contracts with internet service providers (ISP) and a contract to provide basic intrusion-prevention services  In December 2015, Congress required DHS to make available for use by federal agencies, certain capabilities, such as those provided by NCPS’s EA at approximately 93 percent of civilian federal agencies and departments and, in January 2018, NPPD officials said NCPS was up to 95 percent  According to NPPD officials, the program first focused on integrating EA for individual agencies and departments, but stated that they continue to work with all agencies and departments to provide EA services and approximately 95 percent of the federal civilian  gov user population is protected by at least one EA and an OA of NCPS block 2 2 information sharing capabilities in 2017  NPPD officials also provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  NEXT GENERATION NETWORKS PRIORITY SERVICES (NGN-PS) NATIONAL PROTECTION AND PROGRAMS DIRECTORATE (NPPD) NGN-PS is intended to address an emerging capability gap in the government’s emergency telecommunications service, which prioritizes select officials’ phone calls when networks are overwhelmed  NPPD executes NGN-PS through commercial telecommunications service providers, which addresses the government’s requirements as they modernize their own networks  NPPD is executing NGN-PS in two phases—(1) voice and (2) data and video  Initial operational capability for voice phase wireless capabilities achieved in August 2017  Acquisition of data and video phase capabilities to begin in September 2021  GAO last reported on this program in April 2017 (GAO-17-346SP)  In November 2017, the Department of Homeland Security’s (DHS) Chief Financial Officer approved a revised life-cycle cost estimate (LCCE) for NGN-PS, which includes costs for the entire program’s voice phase and eliminates operations and maintenance (O&M) costs  The program removed O&M costs because capabilities acquired through NGN-PS are transferred to and funded through NPPD’s Priority Telecommunications Service (PTS) once they become operational  NGN-PS is currently focused on delivering its voice phase, which is divided into three increments: Increment 1 maintains current priority service on long distance calls as commercial service providers update their networks; Increment 2 delivers wireless capabilities; and Increment 3 is intended to address landline capabilities  The program’s previous LCCE and current acquisition program baseline (APB) only include costs associated with increments 1 and 2  NPPD officials told GAO they plan to update the program’s APB in January 2018 to include costs, schedule, and performance goals for increment 3 and expect to receive DHS leadership approval to initiate development by August 2018  NGN-PS remains on track to meet its cost and schedule goals for the first two increments of the voice phase  The program’s full operational capability (FOC) for increment 1 previously slipped from June 2017 to March 2019, which NPPD officials attributed to funding shortfalls  NGN-PS achieved initial operational capability (IOC) for increment 2 wireless capabilities in August 2017 when priority service via cellular towers was demonstrated by the program’s largest service provider  The program projects an acquisition affordability gap of $92 million from fiscal years 2018 to 2022  However, DHS’s current funding plan does not include funding for increment 3, which accounts for the funding shortfall in fiscal years 2021 and 2022  NPPD officials said they anticipate receiving an additional $79 million in acquisition funding over this 2-year period, but will continue to prioritize capabilities if additional funding is not provided  These officials also said the program has achieved cost savings on increments 1 and 2 that will mitigate some of the projected shortfall in fiscal years 2018 and 2019  National Protection and Programs Directorate (NPPD) NEXT GENERATION NETWORKS PRIORITY SERVICES (NGN-PS) NGN-PS was established in response to an Executive Order requiring the federal government to have the ability to communicate at all times during all circumstances to ensure national security and manage emergencies  A Presidential Policy Directive issued in July 2016 superseded previous directives requiring continuous communication services for select government officials  According to NPPD officials, the new directive validates the program’s requirements for the voice phase and was used to develop requirements for the video and data phase  The program expects to begin the acquisition of the phase 2 for video and data in September 2021  In July 2017, NPPD reported that the program needed a systems engineer and was mitigating the vacancy with contracted support staff  The program also identified a need for an additional systems engineer and program support staff starting in fiscal year 2019 to support the start of increment 3  In August 2017, NPPD officials told GAO they continue to face challenges hiring and retaining engineers with adequate experience because of competition with the private sector  The program has historically mitigated staffing gaps by leveraging support from contracted and PTS program staff, as needed  In addition to activities identified in this assessment, NPPD officials stated that the program has received Joint Requirements Council validation of the phase 2 concept of operations and DHS leadership approval of the phase 2 operational requirements document  As of January 2018, the updated APB was in the approval process  NPPD officials also provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  NATIONAL BIO AND AGRO-DEFENSE FACILITY (NBAF) SCIENCE AND TECHNOLOGY DIRECTORATE (S&T) The NBAF program is constructing a state-of-the-art laboratory in Manhattan, Kansas to replace the Plum Island Animal Disease Center  The facility will enable the Department of Homeland Security (DHS) and the Department of Agriculture (USDA) to conduct research, develop vaccines, and provide enhanced diagnostic capabilities to protect against foreign animal, emerging, and zoonotic diseases that threaten the nation’s food supply, agricultural economy, and public health  Commissioning process underway, but performance will not be demonstrated until construction is complete  NBAF adequately staffed, but staffing needs will change as operational stand-up activities begin  GAO last reported on this program in April 2017 (GAO-17-346SP)  The program’s annual life-cycle cost estimate (LCCE) update is within its current acquisition program baseline (APB) cost thresholds and, according to NBAF officials, the program remains on track to meet its schedule goals  In August 2017, NBAF officials said that construction activities thus far—such as pouring concrete for the main laboratory and steel framing—have proceeded as anticipated and will continue through December 2020  NBAF officials told GAO the program has already received full acquisition funding for facility construction efforts through federal appropriations and gift funds from the state of Kansas  As construction continues, the program plans to begin operational stand-up activities for the facility  However, a potential affordability gap may delay the program’s ability to complete these stand-up activities, which are needed to begin conducting laboratory operations  The program was not included in DHS’s funding plan to Congress for fiscal years 2018 to 2022 because DHS did not report operations and maintenance (O&M) funding for individual programs  However, NBAF officials anticipate receiving only $149 million in O&M funding to cover an estimated $239 million in O&M costs over the next 5 years, resulting in a projected shortfall of approximately $90 million  NBAF officials stated the O&M funding gap could delay a number of operational stand-up activities, including plans to award a management operations and research support contract in October 2018, the purchase of laboratory and information technology equipment, and hiring of operations management staff  According to NBAF officials, if operational stand-up activities are delayed, there is a risk the facility will not be fully operational by December 2022, as is currently planned  This may delay the transition from the Plum Island Animal Disease Center, which is nearing the end of its useful life  NBAF officials reported that S&T plans to communicate the program’s future funding needs to DHS leadership through the annual budget process  If the program does not receive the funding it requests, these officials stated that S&T will prioritize the operational stand-up activities that best reduce the risk of schedule delays  Science and Technology Directorate (S&T) NATIONAL BIO AND AGRO-DEFENSE FACILITY (NBAF) NBAF officials reported that they coordinate regularly with key stakeholders  For example, they hold regular coordination meetings with USDA officials to discuss NBAF operations, including operational stand-up activities and future procurement  The NBAF program office has also begun outreach to the federal regulators responsible for awarding the registrations needed for NBAF to conduct laboratory operations to begin planning for this authorization process  The NBAF program office is currently fully staffed  However, NBAF officials reported the program’s staffing needs will change in the coming years, as the program progresses through construction and begins operational stand-up of the facility  For example, over the next 5 years, the program will need to hire an operations director, bio-risk manager, chief information officer, and facility manager, among others, for NBAF operations management  However, the projected O&M funding shortfall during this same period could affect the program’s ability to hire new staff when needed and complete operational stand-up activities on time  NBAF officials provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  ELECTRONIC BAGGAGE SCREENING PROGRAM (EBSP) TRANSPORTATION SECURITY ADMINISTRATION (TSA) Established in response to the terrorist attacks of September 11, 2001, EBSP tests, procures, and deploys transportation security equipment, such as explosives trace detectors and explosives detection systems, across approximately 440 U S  airports to ensure 100 percent of checked baggage is screened for explosives  EBSP is primarily focused on delivering new systems with enhanced screening capabilities and developing software upgrades for existing systems  Program is incorporating requirements to address cybersecurity risk for existing systems  EBSP plans to pursue a new procurement approach in 2018, and staffing challenges exist  GAO last reported on this program in April 2017 (GAO-17-346SP)  In the program’s annual life-cycle cost estimate update, its operations and maintenance (O&M) costs exceeded the acquisition program baseline (APB) cost threshold, which constitutes a breach under the Department of Homeland Security’s (DHS) acquisition policy  The O&M costs increased when TSA accounted for updated maintenance costs and quantities, and shifted salaries from acquisition to O&M to align with DHS’s new appropriation structure  TSA officials said they did not submit a breach notification because they considered the movement of salaries to be an administrative change  The program plans to update its APB in calendar year 2018 to reflect a new plan for procuring equipment under its current acquisition strategy  TSA officials said this APB will also reflect the cost changes  In May 2016, DHS leadership approved a revised APB for EBSP, which reflects its current acquisition strategy to competitively procure systems on an ongoing basis using qualified product lists  The program’s revised APB cost thresholds decreased compared to its initial APB, which TSA officials attributed to various reasons, including shortening the program’s end date by 3 years and lower than anticipated actual costs, among other things  TSA officials told GAO that one of their primary challenges is funding, and the program is projected to face a $72 million acquisition funding shortfall in fiscal year 2018  TSA identified $70 million in carryover funding to address this gap  To mitigate anticipated funding gaps in future years, TSA officials said they may shift projects from one fiscal year to another or cancel them altogether, which may result in the delay or elimination of screening capabilities  The affordability gap from fiscal years 2018 to 2022 may be overstated because DHS’s funding plan to Congress no longer contained O&M funding for individual programs  TSA anticipates receiving $980 million in O&M funding over this 5-year period to cover $1 billion in O&M costs  TSA officials anticipate achieving the program’s final APB milestone—initial operational capability (IOC) for systems that detect additional materials and provide an advanced threat detection algorithm—by its revised threshold date  Previously, EBSP planned to award contracts for these systems in September 2015 and September 2018, respectively  Transportation Security Administration (TSA) ELECTRONIC BAGGAGE SCREENING PROGRAM (EBSP) As of December 2017, EBSP had deployed 1,664 explosives detection systems and 2,638 explosives trace detectors nationwide  In 2018, EBSP plans to pursue a new competitive procurement approach to replace and update existing systems that will include: New contract vehicles to better align EBSP procurement activities with the program’s strategic roadmap  Updates to EBSP’s vendor qualification process to allow for vendor collaboration before testing  Transitioning from procuring systems with different sizes and speeds to two types: (1) inline systems that integrate with a baggage handling system and are linked through a network and (2) standalone systems that may be integrated with a baggage handling system, but not linked to a network  The program is in the process of updating its acquisition documentation to reflect this new procurement approach and TSA officials anticipate opening a qualified products list for new systems starting in June 2018  TSA officials said that staffing remains a challenge for the program because of cuts in government and contracted mission support staff and critical vacancies, including a division director  In September 2017, TSA reported that existing personnel across the program have assumed responsibilities of these positions, but workloads are unsustainable at current staffing levels  TSA officials stated that EBSP continues to procure, test, and deploy equipment and capabilities to recapitalize older equipment, improve security screening capability at airports, and enhance the detection capabilities of the fleet  They added that TSA employs extensive testing to verify the suitability and effectiveness of equipment to meet requirements  Moving forward, EBSP intends to establish IOC milestones for new technologies and capabilities, while allowing TSA the flexibility to make risk-based decisions  TSA officials also provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  PASSENGER SCREENING PROGRAM (PSP) TRANSPORTATION SECURITY ADMINISTRATION (TSA) The Department of Homeland Security (DHS) established PSP in response to the terrorist attacks of September 11, 2001  PSP identifies, tests, procures, deploys, and sustains transportation security equipment across approximately 440 U S  airports to help TSA officers identify threats concealed on people and in their carryon items  The program aims to increase threat detection capabilities, improve the efficiency of passenger screening, and balance passenger privacy and security  Started testing on the Credential Authentication Technology in TSA Precheck lanes during 2017  Critical staffing vacancies persist and may delay followon acquisition planning efforts  GAO last reported on this program in April 2017 (GAO-17-346SP)  In May 2017, the DHS Under Secretary for Management (USM) approved the sixth version of the PSP acquisition program baseline (APB) and subsequently removed the program from breach status  In January 2016, TSA declared a schedule breach of a key milestone—acquisition decision event (ADE) 3—for the Credential Authentication Technology (CAT) because of delays in incorporating new cybersecurity requirements  Consistent with previous versions of the program’s APB, the new baseline modified the program’s cost, schedule, and performance parameters  For example, the program established the following: Separate CAT milestone dates for TSA Precheck and standard lanes  TSA officials stated there is no capability difference between screening lanes, but an initial focus on TSA Precheck lanes will assist with demonstrating CAT requirements and resolving past testing issues that contributed to an initial 4-year delay to CAT’s full operational capability (FOC) date  PSP now plans to reach FOC for CAT more than 5 years later than its revised target of June 2018 and more than 9 years later than initially planned  New FOC dates for other technologies, which TSA officials said are expected to be more realistic about delivery dates and account for changes in some FOC quantities  For example, TSA requested and received approval in September 2017 to increase FOC quantities for second generation Advanced Technology (AT-2) TierI systems to meet increasing passenger volume and expected airport growth  In May 2017, the USM also directed the program to revise its life-cycle cost estimate (LCCE) in response to less-than-expected funding levels  The new LCCE also shifted some acquisition costs to operations and maintenance (O&M) to be consistent with DHS’s new appropriation structure  TSA officials believe the new funding profile will be sufficient to sustain legacy PSP equipment, but will significantly limit the program’s ability to enhance existing equipment capabilities and support operational needs  The affordability gap from fiscal years 2018 to 2022 may be overstated because DHS’s funding plan to Congress no longer contained O&M funding for individual programs  TSA anticipates receiving $906 million in O&M funding over this 5-year period to cover $923 million in O&M costs  05/17 APB version 6 0 approved 03/20 CAT ADE 3 (precheck lanes) 09/21 CAT ADE 3 (standard lanes) 12/21 CAT FOC (precheck lanes) 12/23 CAT FOC (standard lanes) Transportation Security Administration (TSA) PASSENGER SCREENING PROGRAM (PSP) Automated screening lanes operational utility assessment AT-2 tier II follow-on operational test & evaluation (OT&E) TSA employs two acquisition strategies to acquire PSP systems: Qualified Product List (QPL) approach—used for proven technologies when capability requirements are rigid and contractors’ systems are mature  Any contractors’ systems that demonstrate they meet the capability requirements are added to the QPL  TSA has used this approach to acquire the second generation AT-2 systems, Bottled Liquid Scanners, and Explosive Trace Detectors  Low Rate Initial Production (LRIP) approach—used when capability requirements are flexible and contractors’ systems are evolving  Under this approach, PSP uses a series of development contracts to enhance systems’ capabilities over time  PSP is currently using this approach to acquire CAT  TSA planned to initiate new acquisition programs starting in fiscal year 2018 that will replace PSP, but this effort may be at risk because of understaffing  In August 2017, TSA reported that its checkpoint screening division—whose staff is concurrently responsible for PSP and its follow-on programs—continued to have staffing vacancies, including project managers, analysts, and a deputy program manager  TSA is mitigating these gaps with existing staff and, according to TSA officials, the staffing challenges may decrease because the new programs may be delayed in response to funding cuts  TSA officials provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  TECHNOLOGY INFRASTRUCTURE MODERNIZATION (TIM) TRANSPORTATION SECURITY ADMINISTRATION (TSA) The TIM program was initiated to address shortfalls in TSA’s threat assessment screening and vetting functions by providing a modern and centralized end-to-end credentialing system  The TIM system will manage credential applications and the review process for millions of transportation workers and travelers across three segment populations: maritime, surface, and aviation  It will support large programs, such as TSA Precheck and the Transportation Worker Identification Credential  Operational testing identified limitations with the system; cybersecurity has not been assessed  Staffing gaps in key areas, such as systems engineering and testing, are a significant program risk  GAO last reported on this program in October and April 2017 (GAO-18-46, GAO-17- 346SP)  The TIM program is on track to meet the cost and schedule goals in its current acquisition program baseline (APB)  In September 2016, the Department of Homeland Security’s (DHS) Under Secretary for Management approved the TIM program’s revised APB—which reflected a new technical approach to deploy capabilities using an agile development methodology—and subsequently removed the program from breach status, authorizing TSA to resume new development after a nearly 22-month pause  DHS leadership paused new development in January 2015 after the program breached its initial APB goals for various reasons, including technical challenges, insufficient contractor performance, and the addition of new requirements after DHS leadership had approved the program’s initial acquisition strategy  The program now plans to achieve full operational capability (FOC) in March 2022 and its life-cycle cost estimate (LCCE) increased to account for this 6-year schedule slip and integration with the Transportation Vetting System, among other things  Since the program’s re-baseline, it has been developing and deploying capabilities in 2-month incremental agile releases, such as functionality to transition TSA Precheck program to the TIM system  The program updated its LCCE in November 2017 to inform a program review with DHS leadership, which is within its current APB cost thresholds  The affordability gap from fiscal years 2018 to 2022 may be overstated because DHS’s funding plan to Congress no longer contained operations and maintenance (O&M) funding for individual programs  TSA officials anticipate receiving approximately $318 million in O&M funding over this 5-year period, which includes nearly $118 million in fees from vetting programs  TSA officials plan to realign $57 million to cover the projected acquisition shortfall, and said any additional surplus funding available in fiscal year 2022 would be used to implement new system requirements identified by the program’s customers  In November 2017, TSA officials identified several program and technical risks that could affect the program’s cost, schedule, and performance  These risks include an increase in new requirements and increased risk of system vulnerabilities and cyberattacks if the program does not identify a provider to perform software updates on open source code  TSA officials are working to mitigate these risks  Transportation Security Administration (TSA) TECHNOLOGY INFRASTRUCTURE MODERNIZATION (TIM) Under the program’s new technical approach, TSA plans to replace the TIM system’s existing commercial-off-the-shelf applications with open source applications—software that can be accessed, used, modified, and shared by anyone—and move to a new virtual environment  The program’s new agile development methodology develops, tests, and deploys capabilities using an iterative, rather than a sequential approach  Consistent with this strategy, TSA awarded task orders in 2016 and 2017 totaling $34 5 million to the program’s existing contractor for agile design and development services, and plans to competitively award a new contract by May 2018  In October 2017, GAO found that TSA had not fully implemented several leading practices to ensure successful agile adoption  GAO also found that TSA and DHS needed to conduct more effective oversight of the TIM program to reduce the risk of repeating past mistakes  DHS concurred with all 14 recommendations made by GAO to improve program execution and oversight, and identified actions DHS and TSA can take to address them  TSA reported that staffing challenges are a significant risk to the program’s success and identified gaps in key areas—such as systems engineering, testing, and agile development  Program officials told GAO these positions cannot be filled because of a hiring freeze within TSA, which the component has imposed to assess their current workforce and restructure, if necessary  Program officials told GAO they requested waivers from the hiring freeze and, as of January 2018, they had received approval to hire 4 additional staff  TSA officials provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  FAST RESPONSE CUTTER (FRC) UNITED STATES COAST GUARD (USCG) The USCG uses the FRC to conduct search and rescue, migrant and drug interdiction, and other law enforcement missions  The FRC carries one cutter boat on board and is able to conduct operations in moderate sea conditions  The FRC replaces the USCG’s Island Class patrol boat and provides improved fuel capacity, surveillance, and communications interoperability with other Department of Homeland Security (DHS) and Department of Defense assets  FRC found operationally effective and suitable, and all key performance parameters validated  Main diesel engine issues persist, which may require further retrofits  GAO last reported on this program in March and April 2017 (GAO-17-218, GAO-17- 346SP)  According to USCG officials, the FRC program is on track to meet its current cost and schedule goals  The USCG plans to acquire 58 FRCs and, as of September 2017, 25 had been delivered and 19 were on contract  To inform the budget process, the program updated its life-cycle cost estimate in June 2017, which is within its current acquisition program baseline (APB) cost thresholds  Previously, the program’s initial operational capability (IOC) date slipped after a bid protest related to the program’s initial contract award—now known as phase 1—and the need for structural modifications  USCG officials attributed the 5-year slip in the program’s full operational capability (FOC) date to a decrease in annual procurement quantities under the phase 1 contract  Specifically, in fiscal years 2010 and 2011, the quantities decreased from 6 FRCs per year to 4  In May 2014, the USCG determined that it would procure only 32 of the 58 FRCs through this contract and initiated efforts to conduct a full and open competition for the remaining 26 vessels—known as phase 2  In May 2016, the USCG awarded the phase 2 contract for the remaining 26 FRCs, which has a potential value of $1 42 billion  Under the phase 2 contract, the USCG can procure 4 to 6 FRCs per option period  The USCG ordered 6 FRCs at the time of the phase 2 award and, in June 2017, exercised an option for an additional 6 FRCs  The USCG has established that the annual procurement quantity will be dictated by funding levels, and funding shortfalls could cause further schedule delays  The affordability gap from fiscal years 2018 to 2022 may be overstated because—as we found in April 2015—DHS’s funding plan to Congress does not contain operations and maintenance (O&M) funding for USCG programs  USCG officials anticipate receiving $1 6 billion in O&M funding over this 5-year period  USCG officials stated that they expect to exercise an option for 4 FRCs in fiscal year 2018 and that the USCG plans to prioritize acquisition funding in fiscal years 2019 and 2020 to procure the final 10 hulls and complete procurement of all 58 FRCs  United States Coast Guard (USCG) FAST RESPONSE CUTTER (FRC) The USCG continues to work with the contractor—Bollinger Shipyards, LLC—to address issues covered by the warranty and acceptance clauses for each ship  For example, 18 engines—9 operational engines and 9 spare engines—have been replaced under the program’s warranty  According to USCG documentation, 65 percent of the current issues with the engines have been resolved through retrofits; however, additional problems with the engines have been identified since our April 2017 review  For example, issues with water pump shafts are currently being examined through a root cause analysis and will be redesigned and are scheduled to undergo retrofits starting in December 2018  We previously found that the FRC’s warranty resulted in improved cost and quality by requiring the shipbuilder to pay for the repair of defects  As of September 2017, USCG officials said the replacements and retrofits completed under the program’s warranty allowed the USCG to avoid an estimated $104 million in potential unplanned costs—of which $63 million is related to the engines  The FRC program does not have any critical staffing vacancies, but the USCG identified insufficient staffing for shore-side support groups as a potential risk that could affect the asset’s operations  These groups provide maintenance to the FRCs while they are in port  In order to mitigate this staffing issue, the USCG is using commercial contracts for maintenance to supplement the capacity of the USCG’s maintenance staff  USCG officials stated that the FRC program is fully funded, executable, and on track to reach FOC by March of 2027  They added that FRCs were recently delivered to locations in Mississippi, Alaska, and Hawaii  USCG officials stated that FRCs are integral to USCG operations, such as providing critical support during the recent hurricane season, and that the program office continues to work with the contractor and stakeholders to quickly and properly address issues with FRCs as they are identified  USCG officials also provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  H-65 CONVERSION/SUSTAINMENT PROGRAM (H-65) UNITED STATES COAST GUARD (USCG) The H-65 aircraft is a short-range helicopter that the USCG uses to fulfill its missions, including search and rescue, ports and waterways security, marine safety, and defense readiness  The H-65 acquisition program increased the fleet’s size by 7 aircraft, added armament capabilities, upgraded navigation systems, and replaced each of the helicopters’ engines  The program is currently focused on upgrades to radar sensors, the automatic flight control system (AFCS), and avionics  Operational assessment of avionics upgrade planned to start in February 2018  Program fully staffed, but schedule slips raise risks with future staffing requirements  GAO last reported on this program in April 2017 (GAO-17-346SP)  As of November 2017, the program remains in breach of its current acquisition program baseline (APB)  In November 2016, the USCG notified Department of Homeland Security (DHS) leadership that it would not complete all activities required—including developmental testing and an operational assessment—to achieve acquisition decision event (ADE) 2C for low-rate initial production of the avionics and AFCS upgrades by its current APB threshold date of March 2017  USCG officials primarily attributed these delays to an underestimation of the technical effort necessary to meet the requirements and have subsequently worked with the contractor to continue development of avionic upgrades  In January 2017, DHS leadership directed the program to update its APB, life-cycle cost estimate (LCCE) and test and evaluation master plan by May 2017  However, the USCG did not meet this deadline, in part, because it decided to add a service life extension program (SLEP) to the H-65 program  The SLEP is expected to extend the current 20,000 flight hour service life of each aircraft by another 10,000 flight hours by replacing obsolete aircraft components  USCG officials stated that this will allow the USCG to delay purchasing new aircraft to prioritize funding for the Offshore Patrol Cutter  USCG officials plan to obtain approval for the SLEP when the program submits its revised APB for DHS approval, which is expected by March 2018  The program is revising its LCCE, but provided an update in June 2017 to inform the budget process  This update exceeds its current APB thresholds because it includes an initial estimate for the SLEP  The USCG estimates that the SLEP will cost $54 million for the entire fleet  USCG officials attributed the increase in operations and maintenance (O&M) costs to the additional extension of the aircraft’s operational life  The program’s O&M costs previously increased due to the USCG’s decision to extend the aircraft’s operational life from 2030 to 2039  The affordability gap from fiscal years 2018 to 2022 may be overstated because— as we found in April 2015—DHS’s funding plan to Congress does not contain O&M funding for USCG programs  USCG officials anticipate receiving $1 6 billion in O&M funding over this 5-year period  United States Coast Guard (USCG) H-65 CONVERSION/SUSTAINMENT PROGRAM (H-65) The USCG awarded new contracts to Rockwell Collins—the original equipment manufacturer of the legacy AFCS and avionics—to address the challenges encountered with development of the new upgrades  Specifically, the program awarded new contracts to support continued development of the AFCS and avionics upgrades in July 2016 and March 2017, respectively  As of September 2017, the combined value of both contracts totaled more than $15 million  The USCG cancelled development of a dedicated surface search radar capability for the H-65 in 2014, but USCG officials said a commercial off-the-shelf weather radar with surface search capability will be installed as part of the avionics upgrade  USCG officials said there is some risk involved with extending the aircrafts’ service life beyond 20,000 flight hours since it has never been done by other agencies that operate the H-65  However, USCG officials stated that the aircraft manufacturer, Airbus, assisted the USCG’s chief aeronautical engineer in identifying specific parts needing replacement and is providing support  In July 2017, the USCG reported that the program was fully staffed, but that the schedule slips have introduced potential risks with future staffing requirements  The program is mitigating these risks by extending some military personnel and ensuring rotating personnel are replaced by new staff with the expertise needed to complete the program’s planned activities, such as testing  USCG officials provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  UNITED STATES COAST GUARD (USCG) The program is intended to assist the USCG in maintaining the capability to access the Arctic and Antarctic polar regions  The USCG requires its icebreaking fleet to conduct multiple missions, including defense readiness; marine environmental protection; ports, waterway, and coastal security; and search and rescue  The USCG plans to acquire three heavy icebreakers to recapitalize the only existing operational heavy icebreaker, which is nearing the end of its service life  Program initiated model testing of hull and propulsion systems, which will inform design decisions  Program office integrates USCG and Navy personnel, but funding responsibilities may cause challenges  GAO last reported on this program in September 2017 (GAO-17-698R)  In June 2014, Department of Homeland Security (DHS) leadership granted the program acquisition decision event (ADE) 1 approval  The Acting Under Secretary for Management also acknowledged the USCG’s need to accelerate the acquisition process to mitigate gaps in the heavy icebreaking capability because the service life of the USCG’s only heavy polar icebreaker, which had already been extended, could end as early as 2020  In January 2018, DHS leadership approved the program’s initial acquisition program baseline (APB) establishing cost, schedule, and performance goals  The USCG planned to achieve a combined ADE 2A and 2B by December 2017, which would authorize the initiation of development efforts  According to DHS officials, this milestone was delayed to February 2018 to allow for the completion of required acquisition documents to inform the decision, such as the program’s life-cycle cost estimate and APB  The USCG is partnering with the Navy to leverage shipbuilding expertise and engaging early with potential shipbuilders through industry studies to mitigate some risks associated with the program’s accelerated acquisition schedule  However, GAO previously found that the program faces challenges in implementing the accelerated schedule  For example, the first icebreaker—which is preliminarily estimated to cost about $750 million to design and construct—would need to be fully funded in fiscal year 2019 at the same time the USCG is expecting to prioritize funding for the Offshore Patrol Cutter  In fiscal year 2017, the Consolidated Appropriations Act or associated explanatory materials, reflected funding for the program, including $150 million for advance procurement of heavy polar icebreakers and $25 million to the USCG for programmatic costs, respectively  USCG officials stated that the Navy funding could cover most of the design costs but would not cover long lead items or construction costs for any of the ships  They further stated that uncertainties with the amount and source of future appropriations have made planning the icebreaker acquisition challenging  United States Coast Guard (USCG) DHS leadership approved four key performance parameters (KPP) related to the ship’s ability to independently break through ice, the ship’s operating duration, and communications  In May 2017, the USCG began model testing of potential hull designs and propulsion configurations  USCG officials explained that the hulls of icebreakers are unique from other ships because they must balance a hull design optimized for icebreaking, which are generally broad and blunt, against a hull design optimized for seakeeping, which are generally narrow and streamlined  USCG officials noted that the power demands and propulsion system for the ship are dependent on the hull design  USCG officials stated that maneuverability was identified as a challenge during model testing and explained that azimuthing propulsors—propellers that sit below the ship and can rotate 360 degrees—offered better maneuverability than traditional propulsion systems  USCG officials said these propulsors are widely used on commercial ships, but may need modification to meet the USCG’s requirements  USCG officials anticipate results from the model testing to be completed by March 2018 and plan to use these results to inform the final specifications for the ships  The USCG established an integrated heavy polar icebreaker program office with the Navy and in 2017, DHS, the USCG, and Navy entered into several agreements that outline oversight roles, among other things  For example, these agreements state that the program will follow DHS acquisition policies with DHS leadership serving as the acquisition decision authority for program milestones  However, the Navy will review and approve acquisition documents before the program seeks DHS approval  These agreements also state that the program’s contracting actions could be funded by either USCG or Navy appropriations, and the source of the appropriations will award the contract  The program plans to competitively award a contract, which would include options for the detail design and construction for all three ships to a single shipbuilder by June 2019  Program officials stated they plan to award the contract under full and open competition to obtain competitive prices and include the construction of the three ships as options to accommodate the program’s funding uncertainties  In February 2017, the USCG awarded contracts to five shipbuilders—valued at approximately $4 million each—for design studies which will inform program decisions  Program officials stated that under these design studies contracts, the shipbuilders developed several potential ship designs and preliminary costs, with a focus on alternative propulsion options and hull designs  In August 2017, USCG officials told GAO that the program’s staffing gap was not negatively impacting program efforts  USCG officials stated that the program office had completed requirements for ADE 2A and 2B, and is on track to release the request for proposals for the detail design and construction contract by March 2018  These officials added that, during 2017, the program office refined the program’s requirements, completed ice and open water model testing, and partnered with five industry teams to evaluate multiple design solutions  USCG officials also provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  LONG RANGE SURVEILLANCE AIRCRAFT (HC-130H/J) UNITED STATES COAST GUARD (USCG) The USCG uses HC-130H and HC-130J aircraft to conduct search and rescue missions, transport cargo and personnel, support law enforcement, and execute other operations  Both aircraft are quad-engine propeller-driven platforms  The HC-130J is a modernized version of the HC-130H, which has advanced engines, propellers, and equipment that provide enhanced speed, altitude, range, and surveillance capabilities  Performance testing of new mission system processor complete  Transfer of HC-130H aircraft to other agencies ongoing  GAO last reported on this program in April 2017 (GAO-17-346SP)  During 2017, the USCG continued a nearly 3-year effort to re-baseline the program— which includes revisions to the program’s life-cycle cost estimate (LCCE) and acquisition program baseline (APB)—to account for significant changes  Specifically, the USCG decided to pursue an all HC-130J fleet and, in fiscal year 2014, Congress directed the transfer of 7 HC-130H aircraft to the U S  Air Force  The USCG was in the process of upgrading these aircraft, but cancelled further HC-130H upgrades  In September 2017, Department of Homeland Security (DHS) leadership directed the USCG to submit the revised APB by January 2018  According to USCG officials, the re-baseline has been delayed, in part, because Congress also directed the USCG to conduct a multi-phased analysis of its mission needs  In November 2016, the USCG submitted the results of its analysis for fixed- wing aircraft, which confirmed the planned total quantity of 22 HC-130J aircraft and an annual flight-hour goal of 800 hours per aircraft  USCG officials said the results of the analysis will be reflected in the program’s revised LCCE and subsequent APB, but noted that challenges with the vendor hired to complete the LCCE revision have also contributed to delays  The program submitted cost information in June 2017 to inform the budget process, but it reflected no updates from the program’s November 2011 LCCE  USCG officials previously attributed the acquisition cost growth and schedule slip from the program’s initial APB to the increase in HC-130J quantities from 6 to 22  However, when the revised LCCE is complete, estimated costs may decrease since the HC-130J aircraft are less expensive to maintain  As of December 2017, USCG officials stated they had received 11 HC-130J aircraft and had awarded contracts for 3 more—some of which were not requested  USCG officials previously stated that the program needs to acquire 1-2 HC-130J aircraft per year to meet its full operational capability (FOC) date  However, it is unclear how the USCG will meet its FOC date because it only requested funding for 1 aircraft over the next 5 years  The affordability gap from fiscal years 2018 to 2022 may be overstated because—as we found in April 2015—DHS’s funding plan to Congress does not contain operations and maintenance (O&M) funding for USCG programs  USCG officials anticipate receiving approximately $1 4 billion in O&M funding over this 5- year period  United States Coast Guard (USCG) LONG RANGE SURVEILLANCE AIRCRAFT (HC-130H/J) In December 2013, Congress directed the transfer of 7 HC-130H aircraft to the U S  Air Force for modifications—which consists of upgrades and installing a fire retardant delivery system—and subsequent transfer to the U S  Forest Service  This direction factored into the USCG’s decision to pursue an all HC-130J fleet  As of December 2017, the Forest Service had not yet received any modified aircraft primarily because of issues with contractors  According to USCG officials, the original contract the Air Force awarded to install the fire retardant delivery system in May 2016 was terminated 7 months later due to an unqualified vendor and a new contract has not yet been awarded  In the meantime, the Forest Service is using 2 of the 7 HC-130Hs  USCG officials said these aircraft are not modified, but outfitted with a less effective firefighting device  As of November 2017, the USCG plans to operate 14 of its HC-130H aircraft until the end of their service lives or until they can be replaced with new HC-130J aircraft  However, as previously discussed, the USCG has not requested funding for the additional HC-130J aircraft to support this plan  In October 2017, USCG officials reported that they were in the process of hiring staff to address the program’s staffing gap  USCG officials provided technical comments on a draft of this assessment, which GAO incorporated, as appropriate  MEDIUM RANGE SURVEILLANCE AIRCRAFT (HC-144A/ C-27J) UNITED STATES COAST GUARD (USCG) The USCG uses HC-144A and C-27J aircraft to conduct all types of missions, including search and rescue and disaster response  All 32 aircraft—18 HC-144A aircraft and 14 C-27J aircraft—are twin-engine propeller driven platforms  The interior of both aircraft are able to be re-configured to accommodate cargo, personnel or medical transports  Developmental testing of new mission system processor is ongoing  Program continues to face challenges related to purchasing spare parts and accessing technical data  GAO last reported on this program in April 2017 and March 2015 (GAO-17-346SP, GAO-15-325)  USCG officials said the program is on track to meet the cost and schedule goals in its current acquisition program baseline (APB), which Department of Homeland Security (DHS) leadership approved in August 2016 to reflect the restructuring of the HC-144A acquisition program  The USCG initially planned to procure a total of 36 HC-144A aircraft, but reduced that number to the 18 it had already procured after Congress directed the transfer of 14 C-27J aircraft from the U S  Air Force to the USCG in fiscal year 2014  The program’s APB divides the program into two phases: phase 1 includes acceptance of the 18 HC-144A aircraft and upgrades to the aircraft’s mission and flight management systems, and phase 2 includes acceptance of and modifications to the C-27J aircraft to meet the USCG’s mission needs  In October 2017, USCG officials told GAO that the program had initiated phase 1 efforts to upgrade the first HC-144A aircraft  The USCG plans to complete upgrades on all HC-144As by the end of fiscal year 2021  For phase 2, the USCG has accepted all 14 C-27Js from the U S  Air Force and plans to complete the modification of all C-27Js by March 2025 to achieve full operational capability (FOC)  To inform the budget process, the program updated its life-cycle cost estimate (LCCE) in June 2017, which is within its current APB cost thresholds  This estimate includes C-27J modification costs, such as installation of a new sensor package and new mission system processor  The program’s LCCE for the 36 HC-144A aircraft previously increased to $28 7 billion in 2012 when the USCG accounted for 5 years of additional costs, among other things  The current LCCE represents a considerable decrease, but also reflects a reduction in the number of aircraft and planned flight hours  The affordability gap from fiscal years 2018 to 2022 may be overstated because—as we found in April 2015—DHS’s funding plan to Congress does not contain operations and maintenance (O&M) funding for USCG programs  USCG officials anticipate receiving nearly $1 7 billion in total funding over this 5-year period to cover nearly $1 8 billion in total costs  United States Coast Guard (USCG) MEDIUM RANGE SURVEILLANCE AIRCRAFT (HC-144A/C-27J) The USCG still faces challenges in transitioning the C-27J into the USCG fleet  In March 2015, GAO found that the successful and cost-effective fielding of the C-27J aircraft is contingent on the USCG’s ability to address risk areas including, purchasing spare parts and accessing technical data, among other issues  According to USCG officials, the program continues to face challenges purchasing spare parts and accessing technical data  The program is reliant on the aircraft original equipment manufacturer for about 35 percent of spare C-27J parts  For other parts, USCG officials said that the USCG continues to look for ways to provide the same or similar parts for the aircraft at a faster rate and the USCG plans to award contracts to two additional manufacturers in calendar year 2018  USCG officials stated that retrieving technical data for the C-27J aircraft remains a challenge, but the USCG is working with the Department of Defense to obtain rights to data currently owned by the original equipment manufacturer  Once the USCG receives appropriate rights to C-27J technical data, the USCG officials said they can begin modification of the aircraft  The USCG also plans to purchase the same surface search radar used on the HC-144A or the HC-130J for the C-27J, which will give the USCG some commonality in maintenance, logistics, and training for this aspect of the aircraft  In October 2017, USCG officials told GAO that the program’s staffing is adequate and the gap has not negatively affected the program  USCG officials stated that the program remains on track to meet the cost, schedule, and performance goals outlined in its current APB and that they monitor APB key parameters in accordance with DHS guidance  These officials added that market research continues to increase supply chain sources and to identify products for new mission systems  USCG officials also provided technical comments, which GAO incorporated as appropriate  NATIONAL SECURITY CUTTER (NSC) UNITED STATES COAST GUARD (USCG) The USCG uses the NSC to conduct search and rescue, migrant and drug interdiction, environmental protection, and other missions  The NSC replaces and provides improved capabilities over the USCG’s High Endurance Cutters  The NSC carries helicopters and cutter boats, provides an extended on-scene presence at forward deployed locations, and operates worldwide  Follow-on operational testing began in October 2017, but cybersecurity testing delayed  The USCG is conducting a study to determine root cause of propulsion system issues  GAO last reported on this program in March and April 2017 (GAO-17-218, GAO-17- 346SP)  In November 2017, Department of Homeland Security (DHS) leadership approved a revised acquisition program baseline (APB), which accounted for the addition of a ninth NSC to the program of record  The USCG originally planned to acquire only eight NSCs; however, in the Consolidated Appropriations Act of 2016, Congress directed that not less than $640 million be immediately available and allotted to contract for the production of a ninth NSC  In December 2016, the USCG awarded a contract to produce the ninth NSC and, as of November 2017, six NSCs had been delivered and three were under construction  The USCG anticipates delivery of the ninth NSC in September 2020, which coincides with the program’s prior APB threshold date for full operational capability (FOC)  However, the revised APB extends this date by 1 year to account for any risks in delivering the additional ship  The program’s FOC date previously slipped 4 years, which USCG officials attributed to funding shortfalls, among other things  The ninth NSC contributed to a $453 million and $123 million increase in the program’s APB cost thresholds for acquisition and operations and maintenance (O&M), respectively  However, the program’s revised life-cycle cost estimate (LCCE) is still lower than its initial estimate for eight ships, which USCG officials attribute to more accurate estimates  The revised LCCE also included costs for several design changes the USCG has had to implement on equipment with known issues  As of September 2017, 12 equipment systems required design changes, which totaled an estimated cost of over $260 million  This work includes structural enhancement work on the first two NSCs and the replacement of the gantry crane, which aids in the deployment of cutter boats  The affordability gap from fiscal years 2018 to 2022 may be overstated because— as we found in April 2015—DHS’s funding plan to Congress does not contain O&M funding for USCG programs  USCG officials anticipate receiving approximately $2 1 billion in O&M funding over this 5-year period to cover the NSC’s estimated $1 8 billion in O&M costs, but stated it will refine its annual budget request based on the program’s needs each year  The USCG also identified carryover funding to cover the projected acquisition funding shortfall in fiscal year 2018  United States Coast Guard (USCG) NATIONAL SECURITY CUTTER (NSC) The NSC program does not have any critical staffing vacancies  However, in July 2017, the program reported that the greatest staffing challenge is a potential extension to the program’s end date if the USCG acquires more than 9 NSCs  If this occurs, the program office must reassess future staffing requirements to ensure adequate program oversight continues until the last NSC completes post-delivery activities  In addition, the USCG has made changes to its staffing model for operating the NSCs  The USCG initially planned to implement a crew rotational concept in which crews would rotate while NSCs were underway to achieve a goal of 230 days away from the cutter’s homeport  In February 2018, USCG officials told GAO they abandoned the crew rotational concept because the concept did not provide the USCG with the expected return on investment  Instead, USCG officials said a new plan has been implemented that does not rotate crew and is anticipated to increase the days away from home port from the current capability of 185 days to 200 days  USCG officials stated that NSCs had a record year of narcotics seizures in 2017  In addition to the test activities identified in this assessment, USCG officials stated that the first follow-on OT&E event was completed in December 2017 and the first cybersecurity test event is scheduled for February 2018  They also noted that the shipbuilder continues to show improving cost performance and is completing construction within budget  USCG officials also provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  OFFSHORE PATROL CUTTER (OPC) UNITED STATES COAST GUARD (USCG) The USCG plans to use the OPC to conduct patrols for homeland security, law enforcement, and search and rescue operations  The OPC is being designed for long-distance transit, extended on-scene presence, and operations with deployable aircraft and small boats  It is intended to replace the USCG’s aging Medium Endurance Cutters (MEC) and bridge the operational capabilities provided by the Fast Response Cutters and National Security Cutters (NSC)  Program plans to refine the ship’s design, as needed, based on early operational assessment results  Program’s acquisition strategy incorporated some best practices  GAO last reported on this program in April and June 2017 (GAO-17-346SP, GAO-17-654T)  According to USCG officials, the OPC program is on track to meet its cost and schedule goals  In September 2014, Department of Homeland Security (DHS) leadership approved the program’s current acquisition program baseline (APB), which accounts for schedule slips resulting from delays in awarding the program’s initial contracts and a subsequent bid protest  The USCG expects to start construction of the first OPC in fiscal year 2019 and procure a total of 25 ships  The USCG plans to initially fund one OPC per year and eventually two OPCs per year until all 25 OPCs are delivered  USCG officials have stated that additional OPC delays will decrease the USCG’s operational capacity because the MECs will likely require increased downtime for maintenance and other issues, reducing their availability  In January 2016, DHS leadership directed the USCG to revise the OPC life-cycle cost estimate (LCCE) and submit it for approval within 6 months of awarding the detailed design and construction contract for the ships—which the USCG subsequently awarded in September 2016  In June 2017, the program submitted an updated LCCE to inform the budget process that—while not approved by DHS leadership—accounts for the contract award and the program’s schedule slips  As of December 2017, the program’s revised LCCE still had not been approved  It is unclear whether it will address other issues, such as an increase in the estimated weight of each ship  The OPC’s initial LCCE was based in large part on the estimated weight of each ship  However, in November 2017, USCG officials said the ship is expected to weigh up to 35 percent more than originally estimated  Nevertheless, USCG officials expect to procure all 25 OPCs for the program’s APB objective cost of $10 5 billion because the contractor identified cost efficiencies to compensate for the increased weight  GAO previously raised questions about the OPC’s affordability and its effect on other USCG acquisition programs, such as the Heavy Polar Icebreaker  Specifically, GAO noted that the OPC procurement will consume about two-thirds of the USCG’s planned acquisition budget between fiscal years 2018 and 2032 based on recent funding history  The program’s affordability gap from fiscal years 2020 to 2022 may be overstated because—as we found in April 2015—DHS’s funding plan to Congress does not report operations and maintenance (O&M) funding for USCG programs  USCG officials anticipate receiving $103 million in O&M funding over this 5-year period  United States Coast Guard (USCG) OFFSHORE PATROL CUTTER (OPC) The USCG is in the process of completing the design of the OPC before starting construction, which is in-line with GAO shipbuilding best practices  In addition, USCG officials stated that the program is using state-of-the-market technology that has been proven on other ships as opposed to state-of-the-art technology, which lowers the risk of the program  The USCG used a two-phased down-select strategy to select a contractor to deliver the OPC  For phase 1, the USCG conducted a full and open competition and selected three contractors to perform preliminary design work  For phase 2, the USCG selected one of the phase 1 contractors—Eastern Shipbuilding—to develop a detailed design of the OPC and construct no more than the first 11 ships  The contract—worth approximately $110 million—includes separate options for each ship  The options for ships 10 and 11 were unpriced and included in the solicitation as an incentive to convert the contract type from fixed price incentive to firm fixed price  These options will be included in a repricing proposal submitted by the contractor for ships 6-9 after delivery of the first ship  USCG officials have stated the USCG will decide whether to exercise the option for ships 10 and 11 based on the contractor’s re-pricing proposal for ships 6-9  The USCG plans to re-compete the contract for the remaining 14-16 ships  The OPC program continued to increase its required staffing level and the USCG reported that adjustments to staffing will continue as the program matures  The program faces shortages including engineers, a logistics manager, and a technical director, but USCG officials said they are hiring staff to address these gaps  USCG officials stated that the OPC program is fully funded, executable, and on track to award construction for the first OPC in September 2018  These officials said design efforts are on track and the contractor is meeting the milestones to deliver the first OPC in 2021  USCG officials noted that they are continuing to increase staff at the contractor’s facility to prepare for the start of construction for the first OPC  USCG officials also provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  UNITED STATES CITIZENSHIP AND IMMIGRATION SERVICES (USCIS) The Transformation program was established in 2006 to transition USCIS from a fragmented, paper-based filing environment to a consolidated, paperless environment for processing immigration and citizenship applications  The program developed a new system architecture and delivers capability through releases that correspond to new product lines within four lines of business: Citizenship, Immigrant, Non-Immigrant, and Humanitarian  Revision of key performance parameters and test and evaluation master plan in progress  Program is reorganizing to leverage expertise within USCIS and revise its approach  GAO last reported on this program in April 2017 and July 2016 (GAO-17-346SP, GAO-16- 467)  The program remains in breach of its current acquisition program baseline (APB)  In September 2016, the Transformation program experienced a schedule breach when it failed to complete deployment of all the product lines associated with the Citizenship line of business  The deployment was delayed because of challenges processing new product lines on the new system architecture and other technical issues with the case management system  Prior to the breach, the program deployed six product lines, which supported approximately 24 percent of the total workload processed by USCIS in fiscal year 2016  Department of Homeland Security (DHS) leadership previously re- baselined the program in April 2015 after USCIS determined that it could not use any of the architecture delivered under its initial strategy, despite having invested more than $475 million in its development  In December 2016, DHS leadership directed USCIS to stop planning and development for new product lines, develop a breach remediation plan, and update its acquisition documentation  In February 2017, DHS leadership approved the program’s remediation plan and the program has since made progress in implementing this plan  However, DHS leadership elected to continue with the program’s pause in new development following program reviews in March 2017, July 2017, and October 2017  USCIS officials said they are revising the program’s acquisition documents—including its APB and life-cycle cost estimate (LCCE)—and plan to re-baseline by March 2018  The program updated the total costs in its LCCE to inform the budget process, but these costs do not reflect the program’s re-baselining plans  As a result, the status of the program against its cost and schedule goals is unclear  However, the program is more than 3 years past its original full operational capability (FOC) date  The affordability gap from fiscal years 2018 to 2022 may be overstated because DHS’s funding plan to Congress no longer contained operations and maintenance funding for individual programs  USCIS uses revenue from premium processing fees to fund the Transformation program and routinely collects more fees than the program’s estimated costs  USCIS officials told GAO that the program office underwent a reorganization in January 2017 to help address the program’s recent challenges  This effort included dismantling the program office and repositioning Transformation under the USCIS Office of Information Technology so the program could leverage expertise in areas such as engineering within USCIS  USCIS officials reported that the program no longer plans to deliver capability by product lines because this strategy focused too narrowly on the automation of forms associated with the lines of business  Going forward, USCIS officials said the program plans to develop capabilities that will address broader objectives, such as reducing the time it takes to process applications and decisions  The program previously made significant changes after it experienced a 5-month delay with its first release, which was deployed in May 2012  DHS attributed this delay to weak contractor performance and pursuing an unnecessarily complex system, among other things  To address these issues, the Office of Management and Budget, DHS, and USCIS determined the program should implement a new acquisition strategy, which allowed for an agile software development methodology and increased competition for development work  This strategy was reflected in the program’s April 2015 re-baseline  USCIS officials told GAO that they plan to address the Transformation program’s staffing gap now that the reorganization is complete  USCIS officials provided technical comments on a draft of this assessment, which GAO incorporated as appropriate  To help determine the extent to which the Department of Homeland Security (DHS) has taken actions to enhance its policies and processes to better reflect key portfolio management practices, we assessed the department’s requirements, acquisition management, and resource allocation policies using key practices we established in September 2012  These key practices are based on our past work, in which we examined the practices that private sector entities use to achieve a balanced mix of new projects and found that successful commercial companies use a disciplined and integrated approach to prioritize needs and allocate resources  As a result, these organizations can avoid pursuing more projects than their resources can support and better optimize the return on their investments  This approach, known as portfolio management, requires companies to view each of their investments as contributing to a collective whole, rather than as independent and unrelated  The objectives of this audit were designed to provide congressional committees insight into the Department of Homeland Security’s (DHS) major acquisition programs  We assessed the extent to which (1) DHS’s major acquisition programs are on track to meet their schedule and cost goals and (2) DHS has taken actions to enhance its policies and processes to better reflect key portfolio management practices  To answer these questions, we reviewed 28 of DHS’s 79 major acquisition programs  We reviewed all 16 of DHS’s Level 1 acquisition programs— those with life-cycle cost estimates (LCCE) of $1 billion or more—that had at least one project, increment, or segment in the Obtain phase—the stage in the acquisition life cycle when programs develop, test, and evaluate systems—at the initiation of our audit  Additionally, we reviewed 12 other major acquisition programs—including 8 Level 1 programs that either had not yet entered or were beyond the Obtain phase, and 4 Level 2 programs that have LCCEs between $300 million and less than $1 billion—that we identified were at risk of not meeting their cost estimates, schedules, or capability requirements based on our past work and discussions with DHS officials  Specifically, we met with representatives from DHS’s Office of Program Accountability and Risk Management (PARM)—DHS’s main body for acquisition oversight—as a part of our scoping effort to determine which programs (if any) were facing difficulties in meeting their cost estimates, schedules, or capability requirements  The 28 selected programs were sponsored by eight different components, and they are identified in table 7, along with our rationale for selecting them  To determine the extent to which DHS’s major acquisition programs are on track to meet their schedule and cost goals, we collected key acquisition documentation for each of the 28 programs, such as all LCCEs and acquisition program baselines (APB) approved at the department level since DHS’s current acquisition management policy went into effect in November 2008  DHS policy establishes that all major acquisition programs should have a department-approved APB, which establishes a program’s critical cost, schedule, and performance parameters, before they initiate efforts to obtain new capabilities  Twenty four of the 28 programs had one or more department-approved LCCEs and APBs between November 2008 and December 31, 2017  We used these APBs to establish the initial and current cost and schedule goals for the programs  We then developed a data collection instrument to help validate the information from the APBs and collect similar information from programs without department-approved APBs  Specifically, for each program, we pre-populated a data collection instrument to the extent possible with the schedule and cost information we had collected from the APBs and our 2017 assessment (if applicable) to identify schedule and cost goal changes, if any, since (a) the program’s initial baseline was approved and (b) January 2017—the data cut-off date of the report we issued in April 2017  We shared our data collection instruments with officials from the program offices to confirm or correct our initial analysis and to collect additional information to enhance the timeliness and comprehensiveness of our data sets  We then met with program officials to identify causes and effects associated with any identified schedule and cost goal changes  Subsequently, we drafted preliminary assessments for each of the 28 programs, shared them with program and component officials, and gave these officials an opportunity to submit comments to help us correct any inaccuracies, which we accounted for as appropriate (such as when new information was available)  Additionally, in July 2017, we collected copies of the detailed data on affordability that programs submitted to inform the fiscal year 2019 resource allocation process  We also collected copies of any annual LCCE updates programs submitted in fiscal year 2017  For each of the 24 programs with a department-approved APB, we compared (a) the most recent cost data we collected (i e , a department-approved LCCE, the detailed LCCE information submitted during the resource allocation process, a fiscal year 2017 annual LCCE update, or an update provided by the program office) to (b) DHS’s funding plan presented in the Future Years Homeland Security Program (FYHSP) report to Congress for fiscal years 2018–2022, which presents 5-year funding plans for DHS’s major acquisition programs, to assess the extent to which a program was projected to have an acquisition funding gap in fiscal year 2018  Through this process, we determined that our data elements were sufficiently reliable for the purpose of this engagement  The FYHSP reports information by the department’s new common appropriation structure, which created standard appropriation fund types including (1) procurement, construction, and improvements and (2) operations and support  We refer to these types of funding as (1) acquisition and (2) operations and maintenance throughout this report  which are listed in appendix II—and identified any significant shortfalls  Specifically, we assessed the joint requirements directives and instruction manual; DHS’s Acquisition Management Directive 102-01, Acquisition Management Instruction 102-01-001, and other related guidance; and DHS’s resource allocation directive, instruction, and handbook  First, we assessed each group of policies against the key practices using the following ratings: Met—the documents fully reflected the key practice  Partially met—the documents reflected some, but not all parts of the key practice  Not met—the documents did not reflect the key practice  We shared our preliminary analysis for each group of policies with the DHS officials responsible for implementing them—specifically, the Joint Requirements Council (JRC), PARM, and the Office of Program Analysis and Evaluation (PA&E)—to discuss our findings, identify relevant sections of the documents we had not yet accounted for, and solicit their thoughts on those key practices that were not reflected in the policies  Second, we used the scores for each group of policies to develop a department-wide rating for each key practice  When applicable, we weighted the department-wide rating based on the intent of the key practice  For example, the department-wide rating for the key practice related to resource allocation across the portfolio was based more heavily on the rating for the resource allocation policies, rather than the ratings for the requirements or acquisition management policies  Third, we rolled-up the ratings for all the key practices in a particular area—as identified in appendix II—to establish a department-wide overall rating for each key practice area  We concluded that a key practice area was met if all ratings for the individual key practices in that area were met; partially met if the ratings for the individual key practices in that area were all partially met or a mix of met and not met; or not met if the ratings for the individual key practices in that area were all not met  In addition, we reviewed documentation that resulted from DHS’s requirements, acquisition management, and resource allocation processes since January 2016 to get a sense of how the department has implemented its current policies  For example, we reviewed JRC- validated requirements documents; acquisition decision memorandums; Acquisition Program Health Assessment reports; and documentation related to the development of DHS’s fiscal year 2018 budget request and the fiscal year 2018–2022 FYHSP report, including resource allocation guidance, presentations to DHS leadership, and preliminary decisions  We also interviewed officials from the JRC, PARM, PA&E, and the Deputy’s Management Action Group to identify any current and planned initiatives to improve management of the department’s portfolio of major acquisition programs  We then compared our assessment of DHS’s current policies, practices, and planned initiatives to our previous findings and the Standards for Internal Control in the Federal Government  We conducted this performance audit from March 2017 through May 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  In addition to the contact listed above, Rick Cederholm (Assistant Director), Aryn Ehlow (Analyst-in-Charge), Pete Anderson, Lorraine Ettaro, Helena Johnson, TyAnn Lee, Alexis Olson, Sylvia Schatz, Roxanna Sun, and Lindsay Taylor made key contributions to this report  Other contributors included Mathew Bader, Carissa Bryant, Andrew Burton, Erin Butkowski, Lisa Canini, Jenny Chow, John Crawford, Lindsey Cross, Laurier R  Fish, Betsy Gregory-Hosler, Claire Li, Sarah Martin, Marycella Mierez, Erin O’Brien, Katherine Pfeiffer, John Rastler, Ashley Rawson, Andrew Redd, Jill Schofield, Charlie Shivers III, and Jeanne Sung  DHS Program Costs: Reporting Program-Level Operations and Support Costs to Congress Would Improve Oversight  GAO-18-344  Washington, D C : April 25, 2018  Homeland Security Acquisitions: Identifying All Non-Major Acquisitions Would Advance Ongoing Efforts to Improve Management  GAO-17-396  Washington, D C : April 13, 2017  Homeland Security Acquisitions: Earlier Requirements Definition and Clear Documentation of Key Decisions Could Facilitate Ongoing Progress  GAO-17-346SP  Washington, D C : April 6, 2017  Coast Guard Cutters: Depot Maintenance Is Affecting Operational Availability and Cost Estimates Should Reflect Actual Expenditures  GAO-17-218  Washington, D C : March 2, 2017  Homeland Security Acquisitions: Joint Requirements Council’s Initial Approach Is Generally Sound and It Is Developing a Process to Inform Investment Priorities  GAO-17-171  Washington, D C : October 24, 2016  Homeland Security Acquisitions: DHS Has Strengthened Management, but Execution and Affordability Concerns Endure  GAO-16-338SP  Washington, D C : March 31, 2016  National Security Cutter: Enhanced Oversight Needed to Ensure Problems Discovered during Testing and Operations Are Addressed  GAO-16-148  Washington, D C : January 12, 2016  TSA Acquisitions: Further Actions Needed to Improve Efficiency of Screening Technology Test and Evaluation  GAO-16-117  Washington, D C : December 17, 2015  Homeland Security Acquisitions: Major Program Assessments Reveal Actions Needed to Improve Accountability  GAO-15-171SP  Washington, D C : April 22, 2015  Coast Guard Aircraft: Transfer of Fixed-Wing C-27J Aircraft Is Complex and Further Fleet Purchases Should Coincide with Study Results  GAO-15-325  Washington, D C : March 26, 2015  Homeland Security Acquisitions: DHS Should Better Define Oversight Roles and Improve Program Reporting to Congress  GAO-15-292  Washington, D C : March 12, 2015  Coast Guard Acquisitions: Better Information on Performance and Funding Needed to Address Shortfalls  GAO-14-450  Washington, D C : June 5, 2014  Homeland Security Acquisitions: DHS Could Better Manage Its Portfolio to Address Funding Gaps and Improve Communications with Congress  GAO-14-332  Washington, D C : April 17, 2014  Homeland Security: DHS Requires More Disciplined Investment Management to Help Meet Mission Needs  GAO-12-833  Washington, D C : September 18, 2012  Department of Homeland Security: Assessments of Selected Complex Acquisitions  GAO-10-588SP  Washington, D C : June 30, 2010  Department of Homeland Security: Billions Invested in Major Programs Lack Appropriate Oversight  GAO-09-29  Washington, D C : November 18, 2008 

ground_truth: Each year, the DHS invests billions of dollars in a diverse portfolio of major acquisition programs to help execute its many critical missions. DHS's acquisition activities are on GAO's High Risk List, in part, because of management and funding issues. The Explanatory Statement accompanying the DHS Appropriations Act, 2015 included a provision for GAO to review DHS's major acquisitions. This report, GAO's fourth annual review, assesses the extent to which: (1) DHS's major acquisition programs are on track to meet their schedule and cost goals, and (2) DHS has taken actions to enhance its policies and processes to better reflect key practices for effectively managing a portfolio of investments. GAO reviewed 28 acquisition programs, including DHS's largest programs that were in the process of obtaining new capabilities as of April 2017, and programs GAO or DHS identified as at risk of poor outcomes. GAO assessed cost and schedule progress against baselines, assessed DHS's policies and processes against GAO's key portfolio management practices, and met with relevant DHS officials. During 2017, 10 of the Department of Homeland Security (DHS) programs GAO assessed that had approved schedule and cost goals were on track to meet those goals. GAO reviewed 28 programs in total, 4 of which were new programs that GAO did not assess because they did not establish cost and schedule goals before the end of calendar year 2017 as planned. The table shows the status of the 24 programs GAO assessed. Reasons for schedule delays or cost increases included technical challenges, changes in requirements, and external factors. Recent enhancements to DHS's acquisition management, resource allocation, and requirements policies largely reflect key portfolio management practices (see table). However, DHS is in the early stages of implementing these policies. GAO identified two areas where DHS could strengthen its portfolio management policies and implementation efforts: DHS's policies do not reflect the key practice to reassess a program that breaches—or exceeds—its cost, schedule, or performance goals in the context of the portfolio to ensure it is still relevant or affordable. Acquisition management officials said that, in practice, they do so based on a certification of funds memorandum—a tool GAO has found to be effective for DHS leadership to assess program affordability—submitted by the component when one of its programs re-baselines in response to a breach. Documenting this practice in policy would help ensure DHS makes strategic investment decisions within its limited budget. DHS is not leveraging information gathered from reviews once programs complete implementation to manage its portfolio of active acquisition programs. DHS's acquisition policy requires programs to conduct post-implementation reviews after initial capabilities are deployed, which is in line with GAO's key practices. Acquisition management officials said they do not consider the results of these reviews in managing DHS's portfolio because the reviews are typically conducted after oversight for a program shifts to the components. Leveraging these results across DHS could enable DHS to address potential issues that may contribute to poor outcomes, such as schedule slips and cost growth, for other programs in its acquisition portfolio. GAO recommends DHS update its acquisition policy to require certification of fund memorandums when programs re-baseline as a result of a breach and assess programs' post-implementation reviews to improve performance across the acquisition portfolio. DHS concurred with GAO's recommendations.