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



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



Report 2: The Small Business Administration (SBA) administers several programs to support small businesses, including loan guaranty programs to enhance small business access to capital; contracting programs to increase small business opportunities in securing federal contracts; direct loan programs for businesses, homeowners, and renters to assist their recovery from natural disasters; and small business management and technical assistance training programs to assist business formation and expansion  Congressional interest in these programs has increased in recent years, primarily because assisting small business is viewed as a means to enhance economic growth  The SBA's Surety Bond Guarantee Program has been operational since April 1971  It is designed to increase small business' access to federal, state, and local government contracting, as well as private-sector contracting, by guaranteeing bid, performance, payment, and specified ancillary bonds "on contracts … for small and emerging contractors who cannot obtain bonding through regular commercial channels " The program guarantees individual contracts of up to $6 5 million, and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary  The $6 5 million limit is periodically adjusted for inflation  The SBA's guarantee currently ranges from 80% to 90% of the surety's loss if a default occurs  In FY2018, the SBA guaranteed 10,800 bid and final surety bonds (a payment bond, performance bond, or both a payment and performance bond) with a total contract value of nearly $6 5 billion  Although the surety industry does not report the total value of the bonds it issues each year, estimates based on the total amount of premiums collected by the private sector in recent years suggest that the SBA's Surety Bond Guarantee Program represents, by design, a relatively small percentage of the market for surety bonds (from about 1 1% to 6 7% of the value of surety bonds issued by the private sector)  A surety bond is a three-party instrument between a surety (that agrees to be responsible for the debt or obligation of another), a contractor, and a project owner  The agreement binds the contractor to comply with the contract's terms and conditions  If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed  The surety bond reduces the risk of contracting  Surety bonds are viewed as a means to encourage project owners to contract with small businesses that may not have the credit history or prior experience of larger businesses and are considered to be at greater risk of failing to comply with the contract's terms and conditions  The four general types of surety bonds are bid bonds guarantee that the bidder on a contract will enter into the contract and furnish the required payment and performance bonds if awarded the contract, payment bonds guarantee that suppliers and subcontractors will be paid for work performed under the contract, performance bonds guarantee that the contractor will perform the contract in accordance with its terms and conditions, and ancillary bonds ensure completion of requirements outside of performance or payment, such as maintenance  Surety bonds are important to small businesses interested in competing for a federal contract because the federal government requires prime contractors, prior to the award of a federal contract exceeding $150,000 for the construction, alteration, or repair of any building or public work of the United States, to furnish a performance bond issued by a surety satisfactory to the officer awarding the contract, and in an amount the contracting officer considers adequate, to protect the government  Prime contractors are also required to post a payment bond with a surety satisfactory to the contracting officer for the protection of all persons supplying labor and material in carrying out the work provided for in the contract  Both bonds become legally binding upon award of the contract and their "penal amounts," or the maximum amount of the surety's obligation, must generally be 100% of the original contract price plus 100% of any price increases  Most state and local governments have adopted similar legislation, often called "Little Miller Acts," referencing the Miller Act of 1935 that established the federal requirement  Many private project owners also require contractors to furnish a surety bond before awarding them a contract  This report opens with an examination of the SBA's Surety Bond Guarantee Program's legislative origin and provides a historical summary of the major issues that have influenced the program's development, including the decision to supplement the original Prior Approval Program with a Preferred Surety Bond Guarantee Program (PSB program) that initially provided SBA-approved sureties a lower guarantee rate (not to exceed 70%) than those participating in the Prior Approval Program (not to exceed 80% or 90%, depending on the size of the contract and the type of small business) in exchange for allowing preferred sureties to issue SBA-guaranteed bonds to small businesses without the SBA's prior approval; P L  114-92 , the National Defense Authorization Act for Fiscal Year 2016, which increased the PSB program's guarantee rate from not to exceed 70% to not to exceed 90% of losses; and the decision to increase the program's bond limit  It then examines the program's current eligibility standards and requirements, and provides performance statistics, including the number and amount of bond guarantees issued annually  In addition, it provides data concerning the number and amount of final bonds guaranteed from FY1971 through FY2017 (see Table A-1 ) and for bid and final bonds combined from FY2000 through FY2017 (see Table A-2 )  P L  91-609, the Housing and Urban Development Act of 1970, authorized the SBA's Surety Bond Guarantee Program  The act amended Title IV of the Small Business Investment Act of 1958 (P L  85-699, as amended) to provide the SBA authority to guarantee any surety against loss as the result of a breach of the terms of a bid bond, payment bond, or performance bond by a principal on any contract up to $500,000  The act specified that (1) the principal of the bond is a small business, (2) the bond is required as a condition of bidding on the contract or serving as a prime contractor or subcontractor on the project, (3) the small business is not able to obtain such bond on reasonable terms and conditions without the guarantee, (4) the SBA determines that there is a reasonable expectation that the small business will perform the covenants and conditions of the contract, (5) the contact meets SBA requirements concerning the feasibility of the contract being completed successfully and at a reasonable cost, and (6) the bond's terms and conditions are reasonable in light of the risks involved and the extent of the surety's participation  The act also required that the SBA's guarantee not exceed 90% of the loss incurred by the surety in the event of a breach of the bond's terms and conditions by the small business  The SBA was authorized to finance the program through the Leasing Guarantee Revolving Loan Fund within the Department of the Treasury, which renamed that fund the Lease and Surety Bond Guarantee Revolving Fund  The act authorized the transfer of $5 million from the SBA's Business Loan and Investment Revolving Fund to the Lease and Surety Bond Guarantee Revolving Fund, raising that fund's capital to $10 million available without fiscal year limitation, to support both the lease guarantee program and the surety bond guarantee program  The act also recommended that the program be appropriated up to $1 5 million each fiscal year for three fiscal years after its date of enactment (December 31, 1970) if additional funding were needed to offset the program's expenses  The SBA was directed to administer the program "on a prudent and economically justifiable basis " It was authorized to offset the program's administrative costs by charging a uniform annual fee, subject to periodic review to ensure that the fee is the "lowest fee that experience under the program shows to be justified," and uniform fees for the processing of applications for guarantees  The SBA also was authorized to "obligate the surety to pay the Administration such portions of the bond fee as the Administration determines to be reasonable in light of the relative risks and costs involved " The program's sponsors argued in 1970 that "there is widespread evidence that a significant number of construction contracting organizations find varying degrees of difficulty in obtaining surety bonds" and that "the major share of these organizations are small businesses, and many of them are headed by minority groups " They argued that the Surety Bond Guarantee Program would "facilitate the entry and advancement of small and minority contractors in the construction business " At that time, witnesses at congressional hearings testified that surety bonds were not necessarily required for most private sector construction contracts, but they were required for most public sector construction contracts  The SBA implemented the program on a pilot basis on April 5, 1971, in Kansas City  The program later was expanded to Los Angeles and became nationwide on September 2, 1971  Initially, the SBA guaranteed 90% of the amount of all of the surety bonds in the program and charged sureties 10% of the bond premium paid to the surety company by the contractor  It also charged small business applicants for payment and performance bonds 0 2% of the contract price upon their obtaining the contract  It did not charge for the processing of bid bonds, rejected applications, or applications that did not result in a contract award  Contractors wishing to participate in the program were required to have less than $750,000 in gross annual receipts for the past fiscal year or to have averaged less than $750,000 in gross annual receipts over the past three fiscal years  This size standard was more stringent than for other SBA programs, and it was designed "to reach that segment of small business which was obviously intended to benefit from the legislation as evidenced by the limit of $500,000 on any one contract " Demand for the program exceeded the SBA's expectations  In 1971, the SBA estimated that it would guarantee about 8,000 contracts amounting to about $540 million from FY1972 through FY1974  Instead, it guaranteed 16,118 contracts amounting to nearly $1 1 billion (see Table A-1 in the Appendix)  Because the demand for the program exceeded expectations and the initial fees proved to be insufficient to recoup the program's expenses, in 1974, the SBA requested an additional $25 million for the program  The SBA argued that the additional funds were necessary to take into account the program's projected growth and to establish a reserve fund "to protect against having to suspend [the] program in the fact of more rapid growth than is projected " In response to the SBA's request for additional funding for the program, Congress held congressional hearings to reassess the need for the program and to explore options concerning how to finance the program's proposed expansion  The financing discussions focused on the relative merits of relying primarily on higher fees to increase the program's revenue, reductions in the guarantee percentage to reduce the program's expenses, or additional appropriations to finance the program's proposed expansion  Although the SBA has periodically increased the program's fees and later instituted a tiered system of guarantee percentages, historically, the SBA has tried to keep the program's fees as low as economically feasible and the guarantee percentage as high as economically feasible to encourage the program's use  As an SBA official testified before Congress in 1975: SBA's loss exposure could be reduced by a decrease in the guarantee extended to sureties from 90% to 80%  Before proceeding with this recommendation, a thorough analysis will have to be made of the adverse effect on the willingness of sureties to participate in the program which would result from the increase from 10% to 20% of the sureties' share of the loss potential  An increase in contractor's fees would obviously be beneficial to the operating income of the program, but would also increase the bids which small business-contractors would have to make, thus placing them at a competitive disadvantage with contractors with more ready access to bonding  Moreover, as mentioned previously, the SBA is required by statute to ensure that the fees are the lowest "that experience under the program shows to be justified " Determining the program's appropriate size became a recurring theme at congressional hearings, and continues to be of congressional interest today  For example, Congress has regularly requested testimony from representatives of the surety bond industry and various construction organizations concerning the extent to which the program is necessary to assist small businesses generally, and minority-owned small businesses in particular, in gaining access to surety bonds  Congress has also periodically asked the Government Accountability Office (GAO) to examine the need for the SBA's surety bond guarantee program and to recommend ways to improve the program's management  That testimony and GAO's reports have supported a need for the program, but, as will be discussed, have had somewhat limited usefulness in helping Congress determine the program's appropriate size  In 1974, Congress responded to the SBA's request for additional funding by passing P L  93-386 , the Small Business Amendments of 1974  It established a separate Surety Bond Guarantees Revolving Fund account (hereinafter Revolving Fund) within the Department of the Treasury to support the program  The act also increased the total contract amount that could be guaranteed to $1 million from $500,000 and recommended that the Revolving Fund receive $35 million in additional funding  The Ford Administration objected to providing additional appropriations for the Revolving Fund  Instead, the Administration recommended that the Revolving Fund receive a $20 million transfer from the SBA's Business Loan and Investment Revolving Fund  The transfer would provide the program access to additional capital without affecting the federal budget deficit  Congress approved the Administration's proposal  As shown in Table 1 , the Revolving Fund received $130 5 million in additional appropriations for FY1976 through FY1979 and continued to receive additional appropriations during the 1980s and 1990s  In addition, the program's bond limit was increased to $1 25 million from $1 million in 1986  As discussed below, the increased appropriations and bond limit were not sufficient to continue the program's growth  Instead, both the number and amount of final surety bonds guaranteed by the SBA began to slowly diminish  This general trend continued until the maximum individual surety contract amount was increased, first on a temporary basis by P L  111-5 , the American Recovery and Reinvestment Act of 2009, and later, on a permanent statutory basis, by P L  112-239 , the National Defense Authorization Act for Fiscal Year 2013  As shown in Table 1 , Congress did not appropriate funding for the Revolving Fund from FY2000 to FY2004, allowing the program to cover the cost of claim defaults through its reserve  Congress also increased the program's bond limit to $2 million from $1 25 million in 2000  Congress provided the Revolving Fund $2 9 million in FY2005, $2 86 million in FY2006, $2 86 million in FY2007, and $3 million in FY2008  During the 111 th Congress, P L  111-5 provided the Revolving Fund a separate appropriation of $15 million to support a temporary increase in the program's bond limit to $5 million, and up to $10 million if a federal contracting officer certified in writing that a guarantee in excess of $5 million was necessary, from $2 million  Those funds were in addition to the $2 million appropriation that had already been approved for FY2009  In FY2010, the Revolving Fund received $1 million  Congress has not approved appropriations for the Revolving Fund since then, noting that there have been sufficient funds in the program's reserve to cover the cost of anticipated claim defaults  As mentioned previously, the SBA relied primarily on increased appropriations to finance the program's expansion during the 1970s, but it also increased the program's fees charged to applicants and sureties  For example, in 1976, the SBA increased its fees to sureties to 20% from 10% of the bond premium, instituted a deductible clause on bond claims, and generally limited its approval for bid, participation, and performance bonds to $250,000 unless specified circumstances were met  In 1977, it increased the contractor applicant fee for payment and performance bonds to 0 5% from 0 2% of the contract price upon obtaining the contract  The program's current fee structure is discussed later in this report  Both the number and amount of final surety bonds guaranteed by the SBA increased relatively rapidly during the 1970s (see Table A-1 in the Appendix)  The number of final surety bonds guaranteed by the SBA increased from 1,339 in FY1972 to 20,095 in FY1979, and the amount guaranteed by the SBA increased from $94 4 million in FY1972 to $1 39 billion in FY1979  During the 1980s and 1990s, both the number and amount of final surety bonds guaranteed by the SBA generally declined, in both nominal and inflation-adjusted dollars  A review of congressional testimony during that period suggests that there was no single, discernible factor to account for the program's slow contraction  Because the demand for surety bonds tends to fluctuate with changes in the economy, the program might have been expected to contract somewhat during recessions, but the economy experienced periods of both economic growth and decline during the 1980s and 1990s  There also was no indication that the ability of small businesses to access surety bonds in the private marketplace without the SBA's assistance had materially improved, which, if that had been the case, might have contributed to the decline by reducing the number of small businesses applying for assistance  One possible contributing factor to the decline in SBA-guaranteed surety bonds during that period was the continuing reluctance of many surety companies to participate in the program, either because they did not view the program as particularly profitable or they "had developed alternative methods to the program, such as requiring collateral or funds controls and underwriting programs based in part on credit scores, in order to write small and emerging contractors " Another possible contributing factor was a change in the way the program was perceived by congressional leaders and their reluctance to provide additional resources to continue the program's expansion  During the 1970s, at congressional hearings, witnesses praised the program as a great success in helping small businesses access surety bonds and compete for government contracts  During the 1980s and 1990s, congressional hearings focused less on the program's successes and more on its shortcomings  For example, in 1982, the chair of the Senate Committee on Small Business indicted that the program was subject to "the most insidious types of fraud," including "evidence of involvement of organized crime figures " In addition, reports by both GAO and the SBA's inspector general questioned the SBA's management of the program, arguing, among other things, that the SBA lacked useful underwriting guidelines for surety companies and adequate procedures for verifying applicants' information  During the 1980s, the SBA guaranteed, on average, 11,840 final surety bonds each fiscal year, with the SBA's share of those bonds' value averaging $1 0 billion  During the 1990s, the SBA guaranteed, on average, 5,859 final surety bonds each fiscal year, with the SBA's share of those bonds' value averaging $823 million  During the first decade of the 2000s, the SBA guaranteed, on average, about 1,802 final surety bonds each fiscal year, with the SBA's share of those bonds' value averaging about $385 million  Since then, as indicated in Table 2 and Table A-1 , the number and amount of final surety bonds guaranteed by the SBA has generally increased  This increase is likely due to generally improving economic conditions and the increase in 2013 of the maximum individual contract amount that could be guaranteed from $2 million to $6 5 million, and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary  The surety bonding process begins when a contractor applies for a bond  As GAO has reported Surety companies are generally corporations that are licensed under various insurance laws and, under their charters, have legal power to act as a surety (making themselves responsible for another's obligations) for others  Most surety companies accept business only through independent agents and brokers  In screening a bond applicant, a surety attempts to measure the contractor's ability to undertake and complete the job  When the surety's evaluation of the contractor's acceptability to perform the contract is favorable, the surety underwrites the bond  If the surety does not provide a bond to the bond applicant, the appropriate forms are forwarded to SBA for consideration of a surety bond guarantee  Initially, the SBA surety guaranteed program's bonds were underwritten and issued by large, "standard" surety companies  However, these companies' participation in the program soon began to decline, reportedly because of the administrative burdens associated with the program, such as the SBA's requirement that sureties submit all bond applications to the SBA for review and approval  In addition, the administrative costs of dealing with relatively small bonds versus relatively large ones may have also played a role in the larger, standard surety companies leaving the program  As a congressional witness testified in 1976: You have a professional underwriter, who     is going to be asked to spend 3 or 4 days looking into a $25,000 first-time application  There are many expenses involved  That same underwriter could very easily be writing four or five bonds for $10 million for contractors that everyone knows can perform  And it becomes a matter of how much time and resources can the surety industry devote to this type of business  Another reason may have been the outbreak of the Israeli-Egyptian War in 1973, which was followed by a tripling of oil prices and double-digit inflation  This led to the failure of many smaller contracting companies  In response to the economic downturn, many surety companies enhanced their underwriting standards to protect themselves from rising defaults  As a result, many of the larger surety companies became increasingly reluctant to participate in a program in which the profit margins were relatively small given the required paperwork and the program's limitation on the bond amount, and when the risk of defaults was at a historically high level  As standard sureties left the program, "specialty" surety companies filled the void  Initially, specialty sureties devoted almost all their business exclusively to SBA-guaranteed surety bonds  These companies later expanded their business into offering other high-risk bonds not normally handled by standard sureties  Specialty sureties typically required the contractor to provide collateral for the projects they bonded, and, in most cases, charged higher premiums than standard sureties  In 1982, the SBA invited officials from the Surety Association of America, representing the standard surety companies, to recommend ways to encourage their participation in the program  As mentioned previously, at that time, some specialty surety companies had been accused of associating with organized crime and GAO and the SBA's inspector general had reported fraud and mismanagement in the program  This may help to explain why the SBA was interested in encouraging the larger, more established surety companies to return to the program  The SBA also hoped that greater participation by the larger sureties would lead to lower premiums for small business contractors  During this outreach period, standard surety companies indicated a willingness to increase their participation in the program if the SBA would create a second special program, similar to the SBA's 7(a) loan guarantee program's Preferred Lenders Program  Under the proposal, a surety meeting specified qualification standards would be designed as a "preferred surety" and would be allowed to issue SBA-guaranteed surety bonds prior to receiving the SBA's approval  To participate in the preferred program, the surety's underwriting and administrative standards and procedures would be pre-approved by the SBA, and the surety's decisions would be subject to regular, annual audits  In addition, the SBA's reporting and access to records requirements would be retained  As a measure of their confidence in their own underwriting standards and claims decisions, the standard surety firms indicated that they would accept a 70% guarantee against losses as opposed to the then-allowed 80% or 90% guarantee against losses, as long as firms would not be required to seek the SBA's prior approval for underwriting decisions, bond administration, and claims procedures  Congress subsequently authorized the proposed Preferred Surety Bond Guarantee Program in P L  100-590 , the Small Business Administration Reauthorization and Amendment Act of 1988 (Title II, the Preferred Surety Bond Guarantee Program Act of 1988)  The program was initially authorized on a three-year trial basis, and it was provided permanent statutory authority by P L  108-447 , the Consolidated Appropriations Act, 2005  As discussed in " 114th Congress: Preferred Surety Bond Guarantee Rates " below, P L  114-92 , the National Defense Authorization Act for Fiscal Year 2016, increased the SBA's guarantee for preferred sureties from not less than 70% to not less than 90% of losses  The SBA is authorized to guarantee surety bonds issued to contractors or subcontractors when the business, together with its affiliates, meets the SBA's size standard for the primary industry in which it is engaged; the bond is required; the applicant is not able to obtain such bond on reasonable terms and conditions without a guarantee; and there is a reasonable expectation that the applicant will perform the covenants and conditions of the contract, and the terms and conditions of the bond are reasonable in light of the risks involved and the extent of the surety's participation  The applicant must also "possess good character and reputation," as demonstrated by (1) not being under indictment, being convicted of a felony, or having a final civil judgment stating that the applicant has committed a breach of trust or has violated a law or regulation protecting the integrity of business transactions or business relationships; (2) not having a regulatory authority revoke, cancel, or suspend a license held by the applicant, which is necessary to perform the contract; and (3) never having obtained a bond guarantee by fraud or material misrepresentation or failing to keep the surety informed of unbonded contracts or of a contract bonded by another surety  Applicants must also certify the percentage of work under the contract to be subcontracted  The SBA does not guarantee bonds for applicants that are primarily brokers or have effectively transferred control over the project to one or more subcontractors  Applicants must also certify that they are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from transactions with any federal department or agency  In addition, the SBA will not guarantee a bond issued by a particular surety if that surety, an affiliate of that surety, or a close relative or member of the household of that surety or affiliate owns, directly or indirectly, 10% or more of the business applying for the guarantee  This conflict of interest prohibition also applies to ownership interests in any of the applicant's affiliates  As mentioned previously, the SBA guarantees contracts up to $6 5 million, and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary  There is no limit to the number of bonds that can be guaranteed for any one contractor  The SBA guarantees up to 90% of the loss incurred and paid by a surety if the contract is $100,000 or less, or if the bond is issued on behalf of a socially and economically disadvantaged-owned and controlled small business, a qualified HUBZone small business, a veteran-owned and controlled small business, or a service-disabled veteran-owned and controlled small business  The guarantee rate is 80% if the contract is greater than $100,000, and the business is not owned and controlled by socially and economically disadvantaged individuals, a qualified HUBZone small business, or a veteran-owned or service-disabled veteran-owned small business  The SBA does not charge principals (small business applicants) application or bid bond guarantee fees  If the SBA guarantees a final bond, the principal must pay a contractor fee equal to a percentage of the contract amount, which is determined by the SBA and published in the Federal Register   The FY2019 contractor fee is 0 6% of the contract price for a final bond  The contractor fee is rounded to the nearest dollar, paid to the surety, and the surety remits the fee to the SBA  Sureties also charge principals a premium for issuing and servicing the bond  Sureties are not allowed to charge principals a premium that is more than the amount permitted under applicable state law  Premiums vary depending on the surety's assessment of the risk involved and job size; typically ranging from 1 5% to 3 0% of the contract amount  Sureties interested in participating in the Prior Approval Program or the Preferred Surety Bond Guarantee Program (PSB program) must apply in writing to the SBA  Applicants must be a corporation listed by the U S  Treasury as eligible to issue bonds in connection with federal procurement contracts  The SBA considers several factors when evaluating sureties for the PSB program: the surety must have an underwriting limitation of at least $6 5 million on the Department of the Treasury's list of acceptable sureties; the surety must agree that it will neither charge a bond premium in excess of that authorized by the appropriate state insurance department nor impose any non-premium fee unless such fee is permitted by applicable state law and approved by the SBA; the surety's premium income from contract bonds guaranteed by any government agency (federal, state, or local) can account for no more than one-quarter of the surety's total contract bond premium income; and the surety must vest the underwriting authority for SBA guaranteed bonds to its own employees and final settlement authority for claims and recovery to employees in the surety's permanent claims department  The SBA also considers the surety's rating or ranking designation assigned by a recognized authority  Sureties participating in the PSB program are not eligible to participate in the Prior Approval Program  However, this prohibition does not apply to the surety's affiliates provided that the affiliate is not a participant in the PSB program, their affiliation has been fully disclosed to the SBA, and the affiliate has been approved to participate in the Prior Approval Program  Sureties in the Prior Approval Program must obtain the SBA's approval before issuing a guaranteed bond  Sureties in the PSB program may issue, monitor, and service SBA-guaranteed bonds without prior approval  However, these sureties must notify the SBA electronically of all bonds issued and, for final bonds, they must report and submit to the SBA on a monthly basis all contractor and surety fees that are due  These sureties are also subject to a periodic maximum guarantee authority amount set by the SBA  In addition, effective August 21, 2017, sureties are required, during their initial nine months in the PSB program, to obtain the SBA's prior written approval before executing a bond greater than $2 million  The SBA argued that it was in the taxpayer's interest to require newer sureties to "demonstrate an understanding of the program before being allowed to issue bonds larger than $2 million without SBA's oversight " The terms and conditions of the SBA's bond guarantee agreements with the surety, including the guarantee percentage, may vary from surety to surety, depending on past experience with the SBA  The SBA may take into consideration, among other things, the rating or ranking assigned to the surety by recognized authorities, the surety's loss rate, average contract amount, average bond penalty per guaranteed bond, and the ratio of bid bonds to final bonds, all in comparison with other sureties participating in the same SBA Surety Bond Guarantee Program (Prior Approval or PSB programs)  Sureties are required, among other things, to evaluate the credit, capacity, and character of a principal using standards generally accepted by the surety industry and in accordance with the SBA's standard operating procedures on underwriting and the surety's principles and practices on unguaranteed bonds; reasonably expect that the principal will successfully perform the contract to be bonded; provide bond terms and conditions that are reasonable in light of the risks involved and the extent of the surety's participation; be satisfied as to the reasonableness of cost and the feasibility of successful completion of the contract; ensure that the principal remains viable and eligible for the program; monitor the principal's progress on guaranteed contracts; maintain documentation of job status requests; take all reasonable action to minimize risk of loss, including, but not limited to, obtaining from each principal a written indemnity agreement, secured by such collateral as the surety or the SBA finds appropriate, which covers actual losses under the contract and imminent breach payments; and in the case of loss, pursue all possible sources of salvage and recovery  Participating sureties are subject to audits by SBA-selected and -approved examiners  Prior Approval Program sureties are audited at least once each year and PSB sureties are audited at least once every three years  The SBA does not charge sureties (or small businesses) application or bid bond guarantee fees  It does require sureties to pay a guarantee fee on each SBA-guaranteed bond (other than bid bonds)  The surety fee, which is determined by the SBA and published in the Federal Register , is a percentage of the bond premium  The FY2019 surety fee is 20% of the bond premium that the surety charges the small business, rounded to the nearest dollar  The surety fee is due within 60 days after the SBA's approval of the prior approval payment or performance bond  The SBA does not receive any portion of a surety's non-premium charges  As shown in Table 2 , the number and amount of bid bonds guaranteed by the SBA has generally increased in recent years  For example, in FY2007, the SBA guaranteed 4,192 bid bonds totaling $1 7 billion  In FY2018, the SBA guaranteed 7,354 bid bonds totaling $4 7 billion  Table 2 also shows that the number and amount of SBA-guaranteed final bonds declined somewhat from FY2007 through FY2009 (coinciding with the 2007-2009 recession), and has generally increased since then  Recent increases are likely due to generally improving economic conditions and legislation that temporarily ( P L  111-5 ) and then permanently ( P L  112-239 ) raised the program's maximum individual contract amount from $2 million to $5 million, and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary  As shown in Table 3 , excluding program costs of about $4 million annually, the program has experienced a net positive cash flow in each of the past 12 fiscal years  There is about $97 million in the Surety Bond Guarantee Program Revolving Fund  Historically, the program's default rate has averaged about 3% to 5%  According to the SBA, on average, the default rate on larger contracts tends to be lower than for smaller contracts and the recovery rate for larger contract defaults tends to be greater than for smaller contract defaults  Currently, 28 sureties participate in the Prior Approval Program and 6 participate in the PSB program  Agents empowered to represent a participating surety company are located, or licensed, in all 50 states, American Samoa, the District of Columbia, Guam, the Marshall Islands, Micronesia, the Northern Mariana Islands, Palau, Puerto Rico, and the Virgin Islands  About 80% of the SBA's surety bonds are issued through the Prior Approval Program and 20% through the PSB program  P L  111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA), provided the program an additional appropriation of $15 million and temporarily increased, from February 17, 2009, through September 30, 2010, the maximum bond amount from $2 million to $5 million  The act also authorized the SBA to guarantee a bond of up to $10 million if a federal contracting officer certified in writing that a guarantee in excess of $5 million was necessary  It also revised the program's size standard to "the size standard for the primary industry in which such business concern, and the affiliates of such business concern, is engaged, as determined by the Administrator in accordance with the North American Industry Classification System " The new size standard (e g , up to $36 5 million in average annual receipts over the previous three years for most heavy construction contractors, and up to $15 million in average annual receipts over the previous three years for specialty trade contractors) increased the number of businesses that qualified for the program  Using its rulemaking authority, the SBA made ARRA's temporary size standard permanent on August 11, 2010  Proponents argued that the increased bond limit and size were necessary to "ensure that small businesses are able to secure the surety bonds they need to compete for contracts, grow, and hire more employees " They also argued that "in our current economic recession, small businesses are finding it even more difficult to secure the credit lines necessary to get bonds in the private sector " In their view, the temporary changes would create "significant opportunities to create jobs now in which small businesses will participate and be the driving engine for creation of new jobs in our country " There was no apparent organized opposition to these specific temporary changes to the Surety Bond Guarantee Program  However, there was opposition to ARRA's package of program enhancements for the SBA as a whole, which among other things, provided the SBA $730 million in additional funding, including $255 million for a temporary, two-year small business stabilization program to guarantee loans of $35,000 or less to small businesses for qualified debt consolidation, later named the America's Recovery Capital (ARC) Loan program and $375 million to temporarily subsidize fees for the SBA's 7(a) and 504/CDC loan guaranty programs and increase the 7(a) program's maximum loan guaranty percentage to 90%  Instead of modifying the SBA's program requirements and increasing the SBA's appropriation, opponents advocated business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small businesses, generate economic growth, and create jobs  On September 12, 2011, the Obama Administration advocated, as part of its proposed American Jobs Act, a temporary increase in the SBA surety bond limit to $5 million until the end of FY2012  The Administration argued that raising the program's bond limit "will make it easier for small businesses to take advantage of contracting opportunities generated by the American Jobs Act's proposed infrastructure investments " On December 7, 2012, the Administration also recommended, as part of its request for an additional $60 4 billion in federal resources to address damage caused by Hurricane Sandy, that the SBA surety bond limit be increased to $5 million to enable "more small businesses to participate in the recovery efforts " There were several legislative efforts during the 112 th Congress to increase the program's bond limit  S  1334 , the Expanding Opportunities for Main Street Act of 2011, and its companion bill in the House, H R  2424 , would have reinstated and made permanent ARRA's higher limits (up to $5 million and up to $10 million if a federal contracting officer certifies in writing that a guarantee in excess of $5 million is necessary)  Neither of these bills was reported by a committee for consideration by the House or the Senate  S  1660 , the American Jobs Act of 2011, and its companion bill in the House, H R  12 , would have provided $3 million in additional funding to pay for the cost of temporarily increasing the program's bond limit to $5 million from $2 million until the end of FY2012  Cloture on a motion to proceed to S  1660 was not invoked in the Senate on October 11, 2011, by a vote of 50 to 49  H R  12 was not reported by a committee for consideration in the House  On December 12, 2012, the Senate Committee on Appropriations released its draft of the Hurricane Sandy Emergency Assistance Supplemental bill  It included a provision to increase the program's bond limit to $5 million  This provision was later removed following congressional approval of H R  4310 , the National Defense Authorization Act for Fiscal Year 2013, which became law ( P L  112-239 ) on January 2, 2013  It increased the program's bond limit to $6 5 million, and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary  There was relatively little discussion in the legislative record concerning the reasons for increasing the surety bond program's bond limits, and even less discussion of the reasons for not increasing the limits  Hearings were not held on S  1334 and H R  2424   Also, only one witness during hearings on H R  4310 addressed the SBA surety bond program  That witness supported an increase in the surety bond limit to $5 million, and up to $10 million if a contracting officer certifies its necessity  Advocates argued that bond limits should be raised to bring them more in line with the contracting amounts for other small business programs, such as the 8(a) Minority Small Business and Capital Ownership Development Program, the Historically Underutilized Business Zone (HUBZone) program, the Women-Owned Small Business Federal Contract program, and the Service-Disabled Veteran-Owned Small Business Concerns Program  For example, under 8(a) Minority Small Business and Capital Ownership Development Program, federal contracting officials, at that time, could provide a sole source award to a 8(a) small business if the anticipated award price of the contract did not exceed $6 5 million for manufacturing contracts (now $7 0 million) or $4 million for other contract opportunities, and the contracting officer believed that the award could be made at a fair and reasonable price  Advocates argued that raising the program's bond limit would provide more consistency across small business contracting programs and make it easier for agencies experiencing difficulty issuing contracts in increments of $2 million or less (e g , the Department of Defense [DOD], the General Services Administration, and the Department of State) to participate in the program  Advocates also argued that small businesses awarded contracts exceeding $2 million under the other small business contracting programs are at risk of not being able to complete those contracts due to difficulties in securing a surety bond  For example, the House Committee on Armed Services' Panel on Business Challenges in the Defense Industry argued that the SBA surety bond program's limit should be increased to $6 5 million to match the 8(a) program's $6 5 million threshold for manufacturing contracts and to "increase the opportunities for small businesses to compete for federal contracts, especially in those departments, such as the Department of Defense, where the average size of construction contracts awarded to small businesses for FY2010 exceeded $5 9 million—nearly triple the size for which SBA can provide bonding support " There was no organized opposition to raising the program's bond limits  One possible argument that could have been raised is that higher limits could lead to higher amounts being guaranteed by the SBA and, as a result, increase the risk of program losses  However, the SBA's experience with Recovery Act bonds (over $2 million) suggested that raising the limit may not lead to an increased risk of program losses  The SBA reported that the program's default rate on Recovery Act bonds was lower, in 2009 and 2010, than for its other bonds  The SBA guaranteed 166 Recovery Act bid bonds valued at $518 million and 52 Recovery Act final bonds valued at $145 4 million  There were two defaults, with a bond value of $2 7 million and $2 2 million, respectively  In an effort to enhance surety participation in the SBA's program, H R  776 , the Security in Bonding Act of 2013, introduced and referred to the House Committee on the Judiciary and the House Committee on Small Business on February 15, 2013, would have increased the PSB program's guarantee rate from not to exceed 70% to not to exceed 90% of losses  The bill was reported favorably by both committees on May 21, 2014, and included in H R  4435 , the Howard P  "Buck" McKeon National Defense Authorization Act for Fiscal Year 2015, which was passed by the House on May 22, 2014  This provision was not included in the final version of the bill which was subsequently passed by Congress  Advocates of increasing the PSB program's guarantee rate argued that Despite the different guarantee amounts and the differing levels of review, both the PAP [Prior Approval Program] and PSBP [Preferred Surety Bond Guarantee Program] have similar levels of default  However, over the years, the PSBP program has become less effective for small businesses since only four sureties currently participate in the program because the guarantee rates are no longer competitive enough to encourage commercial sureties to participate  Therefore, since the PSBP is the more efficient program and … does not expose taxpayers to any risk, this legislation amends the SBIA [Small Business Investment Act] to standardize the guarantee rate at 90 percent  The SBA did not formally endorse the proposed guarantee rate increase  However, in its FY2015 and FY2016 congressional budget justification documents, the SBA indicated that it "will investigate establishing a single guaranty percentage in the Prior Approval and PSB programs and restructuring the Prior Approval program " Also, when asked at a congressional hearing held on May 23, 2013, about the proposed guarantee rate increase, an SBA official testified that We are looking very closely at the program  We have seen a decline in the preferred sureties going down from 50% to 14% of our program, which is a very small number  We would like to see more participation in that program  Because of the additional cash flow we have, we do not expect it to increase our costs  And we have some history in our other programs that demonstrate that having the same guarantee level is not a disincentive  There was no discussion in the legislative record during the 113 th Congress opposing an increase in the guarantee rate for the PSB program  One possible objection might have been that increasing the guarantee rate could increase the risk of program losses and result in higher program fees  Higher fees, in turn, could cause hardship for some companies seeking a surety bond  H R  838 , the Security in Bonding Act of 2015, was introduced and referred to the House Committee on the Judiciary and the House Committee on Small Business on February 10, 2015  The bill would have increased the PSB program's guarantee rate from not to exceed 70% to not to exceed 90%, specify requirements concerning the pledge of assets by individual sureties, and require GAO to examine the effects of these changes on small businesses  The House-passed version of H R  1735 , the National Defense Authorization Act for Fiscal Year 2016, included H R  838 's provisions  The Senate-passed version of the bill did not  The conference agreement for H R  1735 , which became P L  114-92 , included H R  838 's provision to increase the PSB program's guarantee rate from not to exceed 70% to not to exceed 90% of losses and its provision to specify requirements concerning the pledge of assets by individual sureties, subject to a one-year delay "to allow for the necessary rulemaking " Congress specified additional requirements concerning the pledge of assets by individual sureties as a means to ensure that "individual sureties have sufficient assets to redeem the bonds " The SBA's final rule implementing the increased PSB program's guarantee rate was effective as of September 20, 2017  The SBA has reported that it is focusing on "strengthening relationships with individual surety companies and the large network of bond agents and producers across the country in order to reach more small businesses in need of bonding " As part of this outreach effort, the SBA has reported that it will continue to emphasize "process improvements that will streamline the application requirements for small businesses and surety companies and their agents " For example, in August 2012, the SBA announced a "Quick APP" for surety bonds up to $250,000 that provides a streamlined underwriting and application process by combining "two applications into one to make it easier and faster for small businesses and contractors, including veteran-owned small businesses, to compete for contracts " The SBA increased the Quick APP (now called the Quick Bond Program) eligibility threshold to $400,000 in 2017  In addition, the SBA reported in 2016 that it was also considering combing the Prior Approval Program and PSB program into a single program featuring the streamlined bond approval and monitoring processes under the PSB program  Several industry groups, including the National Association of Surety Bond Producers and The Surety & Fidelity Association of America, have recommended that the programs be merged, the emphasis on reduced regulatory burdens under the PSB program be maintained, and the program's fees kept as low as economically feasible as a means to encourage more sureties to participate in the program  Perhaps because the proposal has not been formally introduced as a bill, there are no public statements opposing the merger of the two programs  Opposition might come from (1) those who are not convinced that the Surety Bond Guarantee Program is necessary to supplement the private market for surety bonds and would prefer that the program be eliminated rather than reformed or (2) those who believe that a federal program is necessary to supplement the private market for surety bonds, but the existing program is sufficient to meet that need and does not require changes to encourage its expansion  Still other opponents might argue that providing additional authority to sureties to approve and monitor bonds could increase the risk of defaults and program losses  Throughout the program's history, both congressional testimony and GAO examinations have indicated that smaller contracting firms, and especially minority-owned and women-owned small business contracting firms, often have a more difficult time accessing surety bonds in the private marketplace than larger firms  For example, in 1995, GAO reported that "it is not unusual for a small construction company to have some difficulty in obtaining a surety bond " GAO found that about one in three of the smallest contracting firms it surveyed, compared with about one in six of the larger contracting firms it surveyed, reported that they were required to provide collateral  GAO also reported The experiences of the minority-owned firms differed from those of the firms not owned by minorities in several areas  For example, these firms were more likely to be asked to provide certain types of financial documentation, as well as to provide collateral or to meet other conditions; were more likely to be denied a bond and to report losing an opportunity to bid because of delays in processing their request for a bond; and were more likely to depend on jobs requiring bonds for a higher proportion of their revenues  The women-owned firms differed from the firms not owned by women in a few key respects  For example, they … were more likely to be asked to provide more types of financial or other documentation to obtain a bond  In addition, the minority-owned firms reported more often than the firms not owned by minorities that they had to (1) establish an escrow account controlled by the surety company, (2) hire a CPA or a management or consulting firm selected by the surety company to manage the contract, and (3) enter into an arrangement that allows the surety company to manage the job even when the firm is not in default  Although congressional testimony and GAO examinations have supported the need for a program such as the SBA's Surety Bond Guarantee Program, that testimony and GAO's surveys of businesses have been somewhat less useful in helping Congress determine the appropriate size for the program  For example, a review of congressional hearings since the program's inception suggests that congressional witnesses representing the surety companies and various construction organizations, including minority-owned small contracting businesses, have focused their testimony on the need to reduce the SBA's paperwork requirements, which are designed to prevent fraud but increase the sureties' costs; keep the program's fees as low as possible; and keep the program's guarantee rates as high as possible  The SBA's testimony has tended to focus on the need to attract more sureties to the program so that it can reverse the slow downward trajectory the program has experienced over the past two decades in the number and amount of final bonds guaranteed  There has been relatively little testimony provided concerning the broader issue of how large the program should be in comparison with the private sector and what measures or metrics could be used to help make that determination  One possible starting point for determining the program's size in comparison with the private sector is to examine congressional testimony concerning the supply and demand for sureties in the private sector  That testimony suggests that the supply and demand for sureties tends to fluctuate with changes in the overall economy, with the supply of sureties contracting during economic recessions and expanding during economic expansions and the demand for sureties slowing during economic recessions and increasing during economic expansions  Arguably, federal policies could take these fluctuations into account—enacting policies that expand federal support for surety guarantees when supply is tight and reducing federal support for surety guarantees when supply is more plentiful  Of course, when making these decisions, it is necessary to first establish measures or metrics to determine current market conditions  In addition, this line of reasoning assumes that having a federal presence in the surety marketplace is desirable, an assumption not held by all  Ultimately, although having established measures or metrics concerning the supply and demand for surety bonds might be helpful in determining the appropriate size for the SBA's Surety Bond Guarantee Program, that decision will largely rest on personal views concerning the role of the federal government in the private marketplace and the level of acceptable risk in assisting small businesses to gain greater access to surety bonds 
Report 2:  In addition, HHS has data that could be useful for tracking progress in these areas (see table 1)  However, HHS has not adopted specific performance measures with targets specifying the magnitude of the increases HHS hopes to achieve through its efforts to expand access to MAT, and by when  For example, HHS has not established a long-term target specifying the percentage increase in the number of prescriptions for buprenorphine HHS would like to achieve, which would help to show whether efforts by HHS and others are resulting in sufficient progress in increasing prescriptions for this MAT medication  HHS has also not chosen a specific method of measuring treatment capacity or established targets associated with it, which would help to show whether a sufficient number of providers are becoming available to evaluate and treat patients who may benefit from MAT  Without specifying these performance measures and associated targets, HHS will not have an effective means to determine whether its efforts are helping to expand access to MAT  The lack of such performance measures with associated targets is inconsistent with federal internal control standards that specify that management should define objectives and evaluate results  According to these standards, using performance information such as performance measures can help agencies monitor results and determine progress in meeting program goals  In the context of HHS’s efforts to expand access to MAT, establishing appropriate performance measures with associated targets would allow HHS to determine whether its efforts are making sufficient progress or whether they need to be improved  Gauging this progress is particularly important, given the large nationwide MAT treatment gap identified in 2015 between the total number of individuals who could benefit from MAT and the limited number who can access it based on provider availability  This gap was estimated at nearly 1 million people as of 2012, and according to HHS officials and other stakeholders, lack of providers continues to be a challenge  Until HHS establishes performance measures with associated targets for the factors related to access to MAT, the department will be unable to evaluate its progress expanding access to MAT for opioid use disorders  In addition, as of August 2017, HHS has not finalized its approach for the planned evaluation activities, including timeframes  ASPE officials said that timeframes for a finalized evaluation approach had not been established because they were still working with RTI to finalize the evaluation approach given the new leadership priorities  When we spoke with the officials, they provided us with a draft evaluation schedule that covered the contract period ending September 2018  As of October 2017, HHS had not provided a finalized evaluation approach or schedule  Federal internal controls call for management to establish and operate monitoring activities and evaluate results  Without an implementation timeframe for the evaluation’s activities, HHS increases the risk that its evaluation of its agencies’ efforts will not be completed as expeditiously as possible, including an evaluation of HHS’s efforts to expand access to MAT  Officials from selected state health departments and behavioral health agencies, private health insurers, and national associations reported using several different efforts to help expand patients’ access to MAT for opioid use disorders  All of the stakeholders we interviewed reported conducting outreach efforts to communicate information about the importance of MAT and how to access it, or providing training to educate providers on prescribing MAT medications  Efforts by states  State health officials we spoke to described several planned or ongoing efforts to expand access to MAT, some of which are supported by federal funding, including federal grant programs  Officials from all five selected states told us that they are offering outreach to and training for providers to help expand access to MAT  For example, several state officials told us that they are promoting training to (1) encourage physicians to obtain authorization (DATA 2000 waivers) to prescribe buprenorphine and (2) encourage physicians with waivers to treat patients up to their patient limit or to request a higher patient limit  According to the stakeholders, all five selected states have implemented or are planning to implement a health care delivery model or approach that will expand access to MAT  Specifically, these models or approaches focus on integrating the use of MAT into primary care settings  For example, health officials from three states described use of a hub-and-spoke model  This model generally involves centralized intake and initial management of patients at a “hub” (e g , an OTP) and then connecting these patients to community providers at “spokes” (e g , primary care clinics) for ongoing care, with ongoing support provided by the hub as needed  Additionally, officials from two states described offering remote MAT-related consultations through telehealth that connects patients in rural areas with addiction specialists  According to a 2017 Healthcare Fraud Prevention and Partnership whitepaper, telehealth expands the reach of the addiction professional workforce and the existing pool of MAT providers, and it supports remote forms of behavioral therapy to make trained professionals more accessible to those in underserved or isolated communities  Officials from three states described focusing their MAT expansion efforts in various settings, such as in the criminal justice setting and emergency room departments  State health officials from four of the five states told us that programs in their states are using peer specialists (individuals who have successfully recovered from substance abuse disorders) in emergency rooms and other settings to engage with addicted patients and refer them to addiction specialists or behavioral health counselors  Officials from the selected states said that some of these and other efforts are funded through federal sources, such as MAT expansion grants awarded by SAMHSA, or with state funds to the extent they are available  Efforts by private health insurers  Officials from private health insurers reported that they are expanding access to MAT through outreach or training for providers and through the following three efforts: Eliminating the need for prior authorization to prescribe MAT medications  Officials from three insurers reported removing prior authorization requirements for MAT medications, thereby making it easier for patients to access needed MAT medications more readily, rather than undergoing a waiting period for approval to receive the medications  Other private health insurers told us that they continue to require prior authorization, intended for safety reasons and to reduce drug misuse, and officials from one insurer told us that they will allow a patient to access a limited amount of MAT medications for a period of 24 to 72 hours while making a determination about the appropriate treatment services for the patient  Modifying health benefit coverage  Officials from one private health insurance plan told us that the company is redesigning the benefit coverage for methadone and has removed member copays  This effort is intended to make MAT medications more affordable and allow members who are not able to use buprenorphine to have an alternative, such as methadone, that is not cost-prohibitive  Incentivizing providers and health insurance plan members to use MAT  Officials from four private health insurance plans described plans to offer incentives to providers or patients to use MAT  For example, officials from three health plans stated that they are offering alternative payment models or paying higher rates to providers that offer MAT, and another private health insurer is offering incentives to its members who are enrolled in behavioral health programs that provide access to MAT  Efforts by national associations  Officials we interviewed from the national associations—including the American Society of Addiction Medicine, the National Governors Association, and the Association of State and Territorial Health Officials—told us that they are helping to expand access to MAT through outreach and training for their members and by developing tools and resource guides for their members  An official from one association told us that it shares federal grant announcements, including those that are focused on expanding access to MAT, with its members  Officials from another association said it provides training to providers on how to appropriately prescribe MAT medications  In addition, officials from one association told us that they developed an opioid-related road map that identifies examples of strategies—including MAT—that state policymakers can use in their ongoing efforts to address the opioid epidemic  Examples of strategies include reducing the stigma associated with MAT through educating the public and potential providers  Another strategy in the road map is changing payment policies to expand access to MAT services, such as ensuring that Medicaid and other state health programs adequately cover all MAT medications and behavioral interventions and encouraging or requiring commercial health plans to adopt similar policies  HHS funds grant programs and has taken other steps to expand access to MAT, which has been shown to be effective in reducing the prevalence of opioid use disorders and with them, the likelihood of drug overdoses  HHS’s Opioid Initiative began in 2015, and the grants that support it are ongoing, so it is likely too early to determine how effective HHS’s efforts have been in expanding access to MAT and in meeting HHS’s other priorities related to addressing the opioid epidemic  According to HHS, access to MAT can be measured in terms of the number of prescriptions for MAT and by the treatment capacities of OTPs and practitioners who are authorized to prescribe buprenorphine  Our review suggests, however, that HHS may not be ready to perform this evaluation  While HHS told us that it may evaluate the effectiveness of its efforts in the future, the department has not established performance measures with targets that would specify the results that HHS hopes to achieve through its efforts, and by when  Furthermore, HHS has not established timeframes for the activities that will make up its planned evaluation of whether HHS’s efforts have been implemented as intended  Without performance measures with targets and evaluation timeframes, HHS increases the risk that the evaluation will not be completed in a timely manner or that HHS will not know whether its MAT- related efforts are successful or whether new approaches are needed  The evaluation is particularly important, given the hundreds of millions of dollars HHS has invested in its MAT-related grant programs  We are making the following two recommendations to HHS  The Assistant Secretary for Planning and Evaluation should establish performance measures with targets related to expanding access to MAT for opioid use disorders  (Recommendation 1) The Assistant Secretary for Planning and Evaluation should establish timeframes in its evaluation approach that specify when its evaluation of efforts to expand access to MAT will be implemented and completed  (Recommendation 2) We provided a draft of this report to HHS for review, and HHS provided written comments, which are reprinted in appendix II  HHS also provided technical comments, which we incorporated as appropriate  In its written comments, HHS concurred with both of our recommendations  Specifically, for our first recommendation to establish performance measures with targets related to expanding access to MAT for opioid use disorders, HHS stated that developing such measures is appropriate and that the department will continue to work to develop robust performance measures, including measures related to MAT, as part of its overall Opioid Strategy, which includes the department’s most recent efforts to address the opioid epidemic  For our second recommendation to establish timeframes in its evaluation approach that specify when its evaluation of efforts to expand access to MAT will be implemented and completed, HHS agreed that timeframes are important to any evaluation  HHS noted that its evaluation is being conducted under a 2-year contract that is scheduled to end in September 2018  HHS has also provided us with a draft evaluation schedule  We clarified in our report, however, that HHS has not yet provided a finalized approach for the planned evaluation or a finalized schedule establishing timeframes for the activities that will make up the evaluation  Until it finalizes its evaluation approach and establishes related timeframes, HHS increases the risk that it will not complete its planned evaluation by September 2018  We are sending copies of this report to the HHS, and appropriate congressional committees  In addition, the report will be available at no charge on the GAO website at http://www gao gov  If you or your staff have questions about this report, please contact me at (202) 512-7114 or curdae@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  Major contributors to this report are listed in appendix III  According to the Department of Health and Human Services, a diversion control plan is a set of documented procedures intended to reduce the possibility that controlled substances will be transferred or used illicitly  Opioid treatment programs (OTPs) and practitioners who prescribe buprenorphine at the highest patient level through a Drug Addiction Treatment Act of 2000 (DATA 2000) waiver are required to have these plans  OTPs are programs that may administer or dispense medication- assisted treatment (MAT) for people diagnosed with an opioid use disorder, including the use of methadone and buprenorphine  In addition, under a DATA 2000 waiver, practitioners may prescribe buprenorphine for patients, up to a 30-, 100-, or 275 patient limit  An OTP must maintain a current diversion control plan that contains specific measures to reduce the possibility of diversion of controlled substances from legitimate treatment use  Per federal guidelines, the goal of the diversion control plan is to reduce the scope and significance of diversion and its impact on communities  The guidelines state that each OTP’s diversion control plan should make every effort to balance diversion control against the therapeutic needs of the individual patient  They also state that diversion control plans should address at least four general areas of concern: program environment, dosing and take-home medication, prevention of multiple program enrollment, and prescription medication misuse  The guidelines include details about each of these areas: Program environment: Diversion in the program environment can be deterred and detected by regular surveillance and the monitoring of areas in and around the program, where opportunities for diversion may exist  A visible human presence at a program’s location gives community members the opportunity to approach staff with concerns and communicates the program’s commitment to assuring a safe environment and a positive impact on the surrounding community  Dosing and take-home medication: In the area of dosing and take- home medication, diversion control encompasses careful control of inventory, attentive patient dosing, and close supervision of take- home medication  Observing a patient take his or her dose and having each of them drink and speak after dosing are fundamental components of diversion control  Take-home dosing should be provided with careful attention to regulatory compliance and the therapeutic benefit and safety these regulations are meant to promote  Prevention of multiple program enrollment: Reasonable measures should be taken to prevent patients from enrolling in treatment provided by more than one clinic or individual practitioner  An OTP, after obtaining patient consent, may contact other OTPs within a reasonable geographic distance (100 miles) to verify that a patient is not enrolled in another OTP  Misuse of prescription medication: The misuse of prescription medication has become an area of great concern nationally and impacts diversion control planning at OTPs  All OTP physicians and other healthcare providers, as permitted, should register to use their respective state’s prescription drug monitoring program (PDMP) and query it for each newly admitted patient prior to initiating dosing  The PDMP should be checked periodically (for example, quarterly) through the course of each individual’s treatment and, in particular, before ordering take-home doses as well as at other important clinical decision points  SAMHSA’s best-practice guidelines for using buprenorphine for treating opioid use disorders include multiple references to diversion, including monitoring for diversion, storage of this medication to minimize diversion, and use of formulations that may be less likely to be diverted  Specifically, the best practices state that, when possible, practitioners should use the combination buprenorphine/naloxone product, which increases safety and decreases the likelihood of diversion and misuse  Further, physicians who request and receive a waiver to prescribe buprenorphine to treat up to 275 patients outside of an OTP are required to have a diversion control plan  According to an HHS official, as of July 13, 2017, roughly 3,330 of the over 39,000 practitioners with a waiver had a 275-patient limit waiver  The majority of these practitioners, just over 27,000, have a 30-patient limit  According to SAMHSA guidance, the diversion plan should contain specific measures to reduce the possibility of diversion of buprenorphine from legitimate treatment use and should assign specific responsibilities of the medical and administrative staff of the practice setting for carrying out these measures  Further, the guidance states that the plan should address how: the environment at the practice setting can prevent onsite diversion; to prevent diversion with regard to dosing and take-home medication; and to prevent patients from receiving a prescription from more than one practitioner and later diverting some of the prescribed medication  Elizabeth H  Curda, Director, (202) 512-7114 or curdae@gao gov  In addition to the contact name above, Will Simerl, Assistant Director; Natalie Herzog, Analyst-in-Charge; La Sherri Bush; and Emily Wilson made key contributions to this report  Also contributing were Muriel Brown, Krister Friday, Sandra George, and Christina Ritchie 

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.

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



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

Report 1: 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  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 


Report 2:  In addition, HHS has data that could be useful for tracking progress in these areas (see table 1)  However, HHS has not adopted specific performance measures with targets specifying the magnitude of the increases HHS hopes to achieve through its efforts to expand access to MAT, and by when  For example, HHS has not established a long-term target specifying the percentage increase in the number of prescriptions for buprenorphine HHS would like to achieve, which would help to show whether efforts by HHS and others are resulting in sufficient progress in increasing prescriptions for this MAT medication  HHS has also not chosen a specific method of measuring treatment capacity or established targets associated with it, which would help to show whether a sufficient number of providers are becoming available to evaluate and treat patients who may benefit from MAT  Without specifying these performance measures and associated targets, HHS will not have an effective means to determine whether its efforts are helping to expand access to MAT  The lack of such performance measures with associated targets is inconsistent with federal internal control standards that specify that management should define objectives and evaluate results  According to these standards, using performance information such as performance measures can help agencies monitor results and determine progress in meeting program goals  In the context of HHS’s efforts to expand access to MAT, establishing appropriate performance measures with associated targets would allow HHS to determine whether its efforts are making sufficient progress or whether they need to be improved  Gauging this progress is particularly important, given the large nationwide MAT treatment gap identified in 2015 between the total number of individuals who could benefit from MAT and the limited number who can access it based on provider availability  This gap was estimated at nearly 1 million people as of 2012, and according to HHS officials and other stakeholders, lack of providers continues to be a challenge  Until HHS establishes performance measures with associated targets for the factors related to access to MAT, the department will be unable to evaluate its progress expanding access to MAT for opioid use disorders  In addition, as of August 2017, HHS has not finalized its approach for the planned evaluation activities, including timeframes  ASPE officials said that timeframes for a finalized evaluation approach had not been established because they were still working with RTI to finalize the evaluation approach given the new leadership priorities  When we spoke with the officials, they provided us with a draft evaluation schedule that covered the contract period ending September 2018  As of October 2017, HHS had not provided a finalized evaluation approach or schedule  Federal internal controls call for management to establish and operate monitoring activities and evaluate results  Without an implementation timeframe for the evaluation’s activities, HHS increases the risk that its evaluation of its agencies’ efforts will not be completed as expeditiously as possible, including an evaluation of HHS’s efforts to expand access to MAT  Officials from selected state health departments and behavioral health agencies, private health insurers, and national associations reported using several different efforts to help expand patients’ access to MAT for opioid use disorders  All of the stakeholders we interviewed reported conducting outreach efforts to communicate information about the importance of MAT and how to access it, or providing training to educate providers on prescribing MAT medications  Efforts by states  State health officials we spoke to described several planned or ongoing efforts to expand access to MAT, some of which are supported by federal funding, including federal grant programs  Officials from all five selected states told us that they are offering outreach to and training for providers to help expand access to MAT  For example, several state officials told us that they are promoting training to (1) encourage physicians to obtain authorization (DATA 2000 waivers) to prescribe buprenorphine and (2) encourage physicians with waivers to treat patients up to their patient limit or to request a higher patient limit  According to the stakeholders, all five selected states have implemented or are planning to implement a health care delivery model or approach that will expand access to MAT  Specifically, these models or approaches focus on integrating the use of MAT into primary care settings  For example, health officials from three states described use of a hub-and-spoke model  This model generally involves centralized intake and initial management of patients at a “hub” (e g , an OTP) and then connecting these patients to community providers at “spokes” (e g , primary care clinics) for ongoing care, with ongoing support provided by the hub as needed  Additionally, officials from two states described offering remote MAT-related consultations through telehealth that connects patients in rural areas with addiction specialists  According to a 2017 Healthcare Fraud Prevention and Partnership whitepaper, telehealth expands the reach of the addiction professional workforce and the existing pool of MAT providers, and it supports remote forms of behavioral therapy to make trained professionals more accessible to those in underserved or isolated communities  Officials from three states described focusing their MAT expansion efforts in various settings, such as in the criminal justice setting and emergency room departments  State health officials from four of the five states told us that programs in their states are using peer specialists (individuals who have successfully recovered from substance abuse disorders) in emergency rooms and other settings to engage with addicted patients and refer them to addiction specialists or behavioral health counselors  Officials from the selected states said that some of these and other efforts are funded through federal sources, such as MAT expansion grants awarded by SAMHSA, or with state funds to the extent they are available  Efforts by private health insurers  Officials from private health insurers reported that they are expanding access to MAT through outreach or training for providers and through the following three efforts: Eliminating the need for prior authorization to prescribe MAT medications  Officials from three insurers reported removing prior authorization requirements for MAT medications, thereby making it easier for patients to access needed MAT medications more readily, rather than undergoing a waiting period for approval to receive the medications  Other private health insurers told us that they continue to require prior authorization, intended for safety reasons and to reduce drug misuse, and officials from one insurer told us that they will allow a patient to access a limited amount of MAT medications for a period of 24 to 72 hours while making a determination about the appropriate treatment services for the patient  Modifying health benefit coverage  Officials from one private health insurance plan told us that the company is redesigning the benefit coverage for methadone and has removed member copays  This effort is intended to make MAT medications more affordable and allow members who are not able to use buprenorphine to have an alternative, such as methadone, that is not cost-prohibitive  Incentivizing providers and health insurance plan members to use MAT  Officials from four private health insurance plans described plans to offer incentives to providers or patients to use MAT  For example, officials from three health plans stated that they are offering alternative payment models or paying higher rates to providers that offer MAT, and another private health insurer is offering incentives to its members who are enrolled in behavioral health programs that provide access to MAT  Efforts by national associations  Officials we interviewed from the national associations—including the American Society of Addiction Medicine, the National Governors Association, and the Association of State and Territorial Health Officials—told us that they are helping to expand access to MAT through outreach and training for their members and by developing tools and resource guides for their members  An official from one association told us that it shares federal grant announcements, including those that are focused on expanding access to MAT, with its members  Officials from another association said it provides training to providers on how to appropriately prescribe MAT medications  In addition, officials from one association told us that they developed an opioid-related road map that identifies examples of strategies—including MAT—that state policymakers can use in their ongoing efforts to address the opioid epidemic  Examples of strategies include reducing the stigma associated with MAT through educating the public and potential providers  Another strategy in the road map is changing payment policies to expand access to MAT services, such as ensuring that Medicaid and other state health programs adequately cover all MAT medications and behavioral interventions and encouraging or requiring commercial health plans to adopt similar policies  HHS funds grant programs and has taken other steps to expand access to MAT, which has been shown to be effective in reducing the prevalence of opioid use disorders and with them, the likelihood of drug overdoses  HHS’s Opioid Initiative began in 2015, and the grants that support it are ongoing, so it is likely too early to determine how effective HHS’s efforts have been in expanding access to MAT and in meeting HHS’s other priorities related to addressing the opioid epidemic  According to HHS, access to MAT can be measured in terms of the number of prescriptions for MAT and by the treatment capacities of OTPs and practitioners who are authorized to prescribe buprenorphine  Our review suggests, however, that HHS may not be ready to perform this evaluation  While HHS told us that it may evaluate the effectiveness of its efforts in the future, the department has not established performance measures with targets that would specify the results that HHS hopes to achieve through its efforts, and by when  Furthermore, HHS has not established timeframes for the activities that will make up its planned evaluation of whether HHS’s efforts have been implemented as intended  Without performance measures with targets and evaluation timeframes, HHS increases the risk that the evaluation will not be completed in a timely manner or that HHS will not know whether its MAT- related efforts are successful or whether new approaches are needed  The evaluation is particularly important, given the hundreds of millions of dollars HHS has invested in its MAT-related grant programs  We are making the following two recommendations to HHS  The Assistant Secretary for Planning and Evaluation should establish performance measures with targets related to expanding access to MAT for opioid use disorders  (Recommendation 1) The Assistant Secretary for Planning and Evaluation should establish timeframes in its evaluation approach that specify when its evaluation of efforts to expand access to MAT will be implemented and completed  (Recommendation 2) We provided a draft of this report to HHS for review, and HHS provided written comments, which are reprinted in appendix II  HHS also provided technical comments, which we incorporated as appropriate  In its written comments, HHS concurred with both of our recommendations  Specifically, for our first recommendation to establish performance measures with targets related to expanding access to MAT for opioid use disorders, HHS stated that developing such measures is appropriate and that the department will continue to work to develop robust performance measures, including measures related to MAT, as part of its overall Opioid Strategy, which includes the department’s most recent efforts to address the opioid epidemic  For our second recommendation to establish timeframes in its evaluation approach that specify when its evaluation of efforts to expand access to MAT will be implemented and completed, HHS agreed that timeframes are important to any evaluation  HHS noted that its evaluation is being conducted under a 2-year contract that is scheduled to end in September 2018  HHS has also provided us with a draft evaluation schedule  We clarified in our report, however, that HHS has not yet provided a finalized approach for the planned evaluation or a finalized schedule establishing timeframes for the activities that will make up the evaluation  Until it finalizes its evaluation approach and establishes related timeframes, HHS increases the risk that it will not complete its planned evaluation by September 2018  We are sending copies of this report to the HHS, and appropriate congressional committees  In addition, the report will be available at no charge on the GAO website at http://www gao gov  If you or your staff have questions about this report, please contact me at (202) 512-7114 or curdae@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  Major contributors to this report are listed in appendix III  According to the Department of Health and Human Services, a diversion control plan is a set of documented procedures intended to reduce the possibility that controlled substances will be transferred or used illicitly  Opioid treatment programs (OTPs) and practitioners who prescribe buprenorphine at the highest patient level through a Drug Addiction Treatment Act of 2000 (DATA 2000) waiver are required to have these plans  OTPs are programs that may administer or dispense medication- assisted treatment (MAT) for people diagnosed with an opioid use disorder, including the use of methadone and buprenorphine  In addition, under a DATA 2000 waiver, practitioners may prescribe buprenorphine for patients, up to a 30-, 100-, or 275 patient limit  An OTP must maintain a current diversion control plan that contains specific measures to reduce the possibility of diversion of controlled substances from legitimate treatment use  Per federal guidelines, the goal of the diversion control plan is to reduce the scope and significance of diversion and its impact on communities  The guidelines state that each OTP’s diversion control plan should make every effort to balance diversion control against the therapeutic needs of the individual patient  They also state that diversion control plans should address at least four general areas of concern: program environment, dosing and take-home medication, prevention of multiple program enrollment, and prescription medication misuse  The guidelines include details about each of these areas: Program environment: Diversion in the program environment can be deterred and detected by regular surveillance and the monitoring of areas in and around the program, where opportunities for diversion may exist  A visible human presence at a program’s location gives community members the opportunity to approach staff with concerns and communicates the program’s commitment to assuring a safe environment and a positive impact on the surrounding community  Dosing and take-home medication: In the area of dosing and take- home medication, diversion control encompasses careful control of inventory, attentive patient dosing, and close supervision of take- home medication  Observing a patient take his or her dose and having each of them drink and speak after dosing are fundamental components of diversion control  Take-home dosing should be provided with careful attention to regulatory compliance and the therapeutic benefit and safety these regulations are meant to promote  Prevention of multiple program enrollment: Reasonable measures should be taken to prevent patients from enrolling in treatment provided by more than one clinic or individual practitioner  An OTP, after obtaining patient consent, may contact other OTPs within a reasonable geographic distance (100 miles) to verify that a patient is not enrolled in another OTP  Misuse of prescription medication: The misuse of prescription medication has become an area of great concern nationally and impacts diversion control planning at OTPs  All OTP physicians and other healthcare providers, as permitted, should register to use their respective state’s prescription drug monitoring program (PDMP) and query it for each newly admitted patient prior to initiating dosing  The PDMP should be checked periodically (for example, quarterly) through the course of each individual’s treatment and, in particular, before ordering take-home doses as well as at other important clinical decision points  SAMHSA’s best-practice guidelines for using buprenorphine for treating opioid use disorders include multiple references to diversion, including monitoring for diversion, storage of this medication to minimize diversion, and use of formulations that may be less likely to be diverted  Specifically, the best practices state that, when possible, practitioners should use the combination buprenorphine/naloxone product, which increases safety and decreases the likelihood of diversion and misuse  Further, physicians who request and receive a waiver to prescribe buprenorphine to treat up to 275 patients outside of an OTP are required to have a diversion control plan  According to an HHS official, as of July 13, 2017, roughly 3,330 of the over 39,000 practitioners with a waiver had a 275-patient limit waiver  The majority of these practitioners, just over 27,000, have a 30-patient limit  According to SAMHSA guidance, the diversion plan should contain specific measures to reduce the possibility of diversion of buprenorphine from legitimate treatment use and should assign specific responsibilities of the medical and administrative staff of the practice setting for carrying out these measures  Further, the guidance states that the plan should address how: the environment at the practice setting can prevent onsite diversion; to prevent diversion with regard to dosing and take-home medication; and to prevent patients from receiving a prescription from more than one practitioner and later diverting some of the prescribed medication  Elizabeth H  Curda, Director, (202) 512-7114 or curdae@gao gov  In addition to the contact name above, Will Simerl, Assistant Director; Natalie Herzog, Analyst-in-Charge; La Sherri Bush; and Emily Wilson made key contributions to this report  Also contributing were Muriel Brown, Krister Friday, Sandra George, and Christina Ritchie 

ground_truth: The Small Business Administration's (SBA's) Surety Bond Guarantee Program is designed to increase small businesses' access to federal, state, and local government contracting, as well as private-sector contracts, by guaranteeing bid, performance, and payment bonds for small businesses that cannot obtain surety bonds through regular commercial channels. The program guarantees individual contracts of up to $6.5 million, and up to $10 million if a federal contracting officer certifies that such a guarantee is necessary. The SBA's guarantee currently ranges from 80% to 90% of the surety's loss if a default occurs. In FY2018, the SBA guaranteed 10,800 bid and final surety bonds with a total contract value of nearly $6.5 billion. A surety bond is a three-party instrument between a surety (who agrees to be responsible for the debt or obligation of another), a contractor, and a project owner. The agreement binds the contractor to comply with the contract's terms and conditions. If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed. Surety bonds encourage project owners to contract with small businesses that may not have the credit history or prior experience of larger businesses and may be at greater risk of failing to comply with the contract's terms and conditions. Surety bonds are important to small businesses interested in competing for federal contracts because the federal government requires prime contractors—prior to the award of a federal contract exceeding $150,000 for the construction, alteration, or repair of any building or public work of the United States—to furnish a performance bond issued by a surety satisfactory to the contracting officer in an amount that the officer considers adequate to protect the government. P.L. 112-239, the National Defense Authorization Act for Fiscal Year 2013, increased the program's bond limit to $6.5 million, or up to $10 million if a federal contracting officer certifies that such a guarantee is necessary. The limit had been $2 million since 2000, with a temporary increase from February 17, 2009, through September 30, 2010, to $5 million, and up to $10 million if a federal contracting officer certified in writing that such a guarantee was necessary. Advocates of raising the program's bond limit argued that doing so would increase contracting opportunities for small businesses and bring the limit more in line with limits of other small business programs, such as the 8(a) Minority Small Business and Capital Ownership Development Program and the Historically Underutilized Business Zone (HUBZone) Program. Opponents argued that raising the limit could lead to higher amounts being guaranteed by the SBA and, as a result, increase the risk of program losses. This report examines the program's origin and development, including (1) the decision to supplement the original Prior Approval Program with the Preferred Surety Bond Guarantee Program that initially provided a lower guarantee rate (not to exceed 70%) than the Prior Approval Program (not to exceed 80% or 90%, depending on the size of the contract and the type of small business) in exchange for allowing preferred sureties to issue SBA-guaranteed surety bonds without the SBA's prior approval; (2) P.L. 114-92, the National Defense Authorization Act for Fiscal Year 2016, which increased the Preferred Surety Bond Guarantee Program's guarantee rate from not to exceed 70% to not to exceed 90% of losses; and (3) the decision to increase the program's bond limit.