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MISMANAGEMENT OF THE BORDER SURVEILLANCE

SYSTEM AND LESSONS FOR THE NEW

AMERICA’S SHIELD INITIATIVE

PART I, II, AND III

HEARING

BEFORE THE

SUBCOMMITTEE ON MANAGEMENT, 

INTEGRATION, AND OVERSIGHT

OF THE

COMMITTEE ON HOMELAND SECURITY 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST and SECOND SESSION

JUNE 16, 2005, DECEMBER 16, 2005,

and FEBRUARY 16, 2006

Serial No. 109–21

Printed for the use of the Committee on Homeland Security 

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html
COMMITTEE ON HOMELAND SECURITY 

CHRISTOPHER COX, California, Chairman 

DON YOUNG, Alaska 

LAMAR S. SMITH, Texas 

CURT WELDON, Pennsylvania, Vice Chairman 

CHRISTOPHER SHAYS, Connecticut 

PETER T. KING, New York 

JOHN LINDER, Georgia 

MARK E. SOUDER, Indiana 

TOM DAVIS, Virginia 

DANIEL E. LUNGREN, California 

JIM GIBBONS, Nevada 

ROB SIMMONS, Connecticut 

MIKE ROGERS, Alabama 

STEVAN PEARCE, New Mexico 

KATHERINE HARRIS, Florida 

BOBBY JINDAL, Louisiana 

DAVE G. REICHERT, Washington 

MICHAEL MCCAUL, Texas 

CHARLIE DENT, Pennsylvania 

BENNIE G. THOMPSON, Mississippi 

LORETTA SANCHEZ, California 

EDWARD J. MARKEY, Massachusetts 

NORMAN D. DICKS, Washington 

JANE HARMAN, California 

PETER A. DEFAZIO, Oregon 

NITA M. LOWEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

ZOE LOFGREN, California 

SHEILA JACKSON-LEE, Texas 

BILL PASCRELL, JR., New Jersey 

DONNA M. CHRISTENSEN, U.S. Virgin Islands 

BOB ETHERIDGE, North Carolina 

JAMES R. LANGEVIN, Rhode Island 

KENDRICK B. MEEK, Florida 

SUBCOMMITTEE ON MANAGEMENT, INTEGRATION AND OVERSIGHT

MIKE ROGERS, Alabama, Chairman 

CHRISTOPHER SHAYS, Connecticut 

JOHN LINDER, Georgia 

TOM DAVIS, Virginia 

KATHERINE HARRIS, Florida 

DAVE G. REICHERT, Washington 

MICHAEL MCCAUL, Texas 

CHARLIE DENT, Pennsylvania 

CHRISTOPHER COX, California (Ex Officio) 

KENDRICK B. MEEK, Florida 

EDWARD J. MARKEY, Massachusetts 

ZOE LOFGREN, California 

SHEILA JACKSON-LEE, Texas 

BILL PASCRELL, JR., New Jersey 

DONNA M. CHRISTENSEN, U.S. Virgin Islands 

BENNIE G. THOMPSON, Mississippi (Ex Officio)

(II) 
(III)

C O N T E N T S

Page 

STATEMENTS

The Honorable Mike Rogers, a Representative in Congress From the State 

of Alabama, and Chairman, Subcommittee on Management, Integration, 

and Oversight: ......................................................................................................

Oral Statement ..................................................................................................... 1 

Prepared Statement ............................................................................................. 52

The Honorable Kendrick B. Meek, a Representative in Congress From the 

State of Florida, and Ranking Member, Subcommittee on Management, 

Integration, and Oversight .................................................................................. 2 

The Honorable Christopher Cox, a Representative in Congress From the 

State of California, and Chairman, Committee on Homeland Security .......... 3

The Honorable Bennie G. Thompson, a Representative in Congress From 

the State of Mississippi, and Ranking Member, Committee on Homeland 

Security ................................................................................................................. 5

The Honorable Sheila Jackson-Lee, a Representative in Congress From the 

State of Texas: 

Oral Statement ..................................................................................................... 34

Prepared Statement June, 16, 2005 ................................................................... 6

The Honorable John Linder, a Representative in Congress From the State 

of Georgia .............................................................................................................. 29

The Honorable Michael McCaul, a Representative in Congress From the 

State of Texas ....................................................................................................... 37

The Honorable Dave G. Riechert, a Representative in Congress From the 

State of Washington ............................................................................................. 32

The Honorable Christopher Shays, a Representative in Congress From the 

State Connecticut ................................................................................................. 48

WITNESSES 

THURSDAY, JUNE 16, 2005

Mr. Joel S. Gallay, Deputy Inspector General, U.S. General Services 

Administration: 

Oral Statement ..................................................................................................... 7

Prepared Statement ............................................................................................. 9

Mr. Greg Pellegrino, Global Managing Director—Public Sector, Deloitte 

Touche Tohmatsu: 

Oral Statement ..................................................................................................... 19

Prepared Statement ............................................................................................. 21

Mr. Joseph A. Saponaro, President, L–3 Communications, Government 

Services, Inc.: 

Oral Statement ..................................................................................................... 14

Prepared Statement ............................................................................................. 16

Accompanied by: Mr. Thomas Miller, General Counsel ....................................... 28

FRIDAY, DECEMBER 16, 2005

The Honorable Richard L. Skinner, Inspector General, Department of 

Homeland Security: 

Oral Statement ..................................................................................................... 54

Prepared Statement ............................................................................................. 56
Page

IV

Accompanied by: Mr. Carl Mann, Chief Inspector, Office of Inspections and 

Special Reviews, Office of Inspector General, Department of Homeland 

Security: Oral Statement ..................................................................................... 64

THURSDAY, FEBRUARY 16, 2006

Mr. Gregory L. Giddens, Dirctor, Secure Border Initiave Program, 

Department of Homeland Security: 

Oral Statement ..................................................................................................... 79 

Prepared Statement ............................................................................................. 80 

Mr. James C. Handley, Regional Administrator, Great Region 5, General 

Services Administration: 

Oral Statement ..................................................................................................... 84 

Prepared Statement ............................................................................................. 85 

FOR THE RECORD

FRIDAY, DECEMBER 16, 2005

Questions Submitted by the Honorable Mike Rogers ........................................... 107
(1)

MISMANAGEMENT OF THE BORDER 

SURVEILLANCE SYSTEM AND LESSONS 

FOR THE NEW AMERICA’S SHIELD INITIATIVE 

PART I 

Thursday, June 16, 2005

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON HOMELAND SECURITY, 

SUBCOMMITTEE ON MANAGEMENT, 

INTEGRATION AND OVERSIGHT, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:06 a.m., in Room 

2212, Rayburn House Office Building, Hon. Mike Rogers [chairman 

of the subcommittee] presiding. 

Present: Representatives Rogers, Cox, Shays, Linder, Reichert, 

McCaul, Dent, Thompson, Meek, Jackson-Lee, and Christensen. 

Mr. ROGERS. [Presiding.] This meeting of the Homeland Security 

Subcommittee on Management, Integration, and Oversight will 

come to order. 

I would first like to welcome our guests and thank you for taking 

the time out of your busy schedules to be with us today. 

We are holding this hearing today to discuss the issue of border 

patrol surveillance technology. 

In 1998, the former Immigration and Naturalization Service 

launched the Integrated Surveillance Intelligence System, known 

as ISIS. This system was originally designed to detect illegal aliens 

and drug traffickers crossing our borders. 

A major component of the system is the Remote Video Surveillance program. This network integrates multiple color, thermal and 

infrared cameras, which are mounted on 50-to 80-foot poles along 

the borders, into a single remote-controlled system. 

Later this year, the Department of Homeland Security plans to 

roll out a new initiative to expand and upgrade this system. Known 

as the America’s Shield Initiative, this program will expand and replace ISIS to help prevent terrorists from slipping over our borders 

between the ports of entry. It is expected to cost $2.5 billion. 

In December 2004, the Inspector General of the General Services 

Administration issued an audit. This report found numerous problems with the Border Patrol’s contract for the Remote Video Surveillance program. 

For example, the initial $2 million award was made to the International Microwave Corporation, known as IMC, without documented evidence of a competition. Interestingly, however, one year 
2

later IMC received a $200 million extension for many of the tasks 

that had fallen outside the scope of the original contract. 

GSA also found problems with the equipment. At the Border Patrol location in Blaine, Washington, for example, auditors found 

cameras and other pieces of equipment that did not work. Some 

needed frequent repair. 

At three other locations, including Detroit, auditors found surveillance sites where no equipment had even been delivered and no 

work was underway. At other sites in New York, Arizona and 

Texas, some equipment had been installed, but was not operational. 

GSA also noted these deficiencies: 60-foot poles that were paid 

for but never installed; sensitive equipment that failed to meet 

electrical codes; an operations center where contractors and government employees did little or no work for over a year; and, not surprisingly, numerous cost-overruns. 

In September 2004, GSA abruptly halted extending the contract, 

leaving approximately 70 border sites without monitoring equipment. It also forced the contractor to ship truckloads of equipment 

back to the Border Patrol. Today, that equipment is gathering dust 

in a warehouse. 

What we have here, plain and simple, is a case of gross mismanagement of a multimillion dollar contract. This agreement has 

violated federal contracting rules. And it has wasted taxpayers’ dollars. Worst of all, it has seriously weakened our border security. 

Today we will hear from the GSA’s Deputy Inspector General 

about the findings of this audit. We will also hear from the President of L–3 Communications, the company that acquired IMC. 

We will also hear from a leading private sector expert on the best 

practices in government contract management. 

And in a future and not too distant hearing, we will hear from 

representatives of the Department of Homeland Security. And we 

will be interested in obtaining information and documents on this 

contract from the department. 

We will also look forward to a response to a letter that Congressman Meek and I sent to Secretary Chertoff on May 27, which is 

still pending a response. 

Again, I would like to thank our witnesses for being here today, 

and I look forward to hearing your testimony. I now yield to my 

colleague, the Ranking Member, Mr. Meek from Florida, for any 

comments that he may have. 

Mr. MEEK. Thank you, Mr. Chairman. And once again, it is good 

to be here with you, having this subcommittee meeting. And I am 

glad to be joined by the full committee chairman and the ranking 

member. 

I would also like to say that I am glad that we are discussing 

the issues that have been raised by the inspector general of the 

General Services Administration about the Integrated Surveillance 

Intelligence System, known as ISIS. 

The network of cameras and sensors that are along our borders 

that we are trying to protect the American people, we know that 

there are a number of failures. Even though it only covers 4 percent of America’s border, it is not strong enough to be able to protect us all. 
3

And even though I am glad to hear that DHS has decided to 

move forward with using technology to protect our borders, it has 

failed to explain how and why America’s Shield Initiative is more 

effective or efficient than the Integrated Surveillance Intelligence 

System. I understand that the ISIS system will be supplemented 

by an ASI system, which has integrated new technologies. And I 

want to make sure that we look at the mistakes that have led to 

the failure of ISIS. 

This will let us understand how the ASI system will work better. 

But before I take the opportunity to not only welcome the witnesses we do have, I have to point out the fact that we do not have 

witnesses from the department. 

In my opinion, Mr. Chairman, this is very disappointing. I know 

that you tried to get them here. And it would have been very helpful to have those members here. 

Hopefully, they could have answered some of the questions on 

our May 27th letter. But I have to point out for the record some 

of those questions that we put out before them: what evaluation 

has been done of the program, number one; number two, what 

steps it took to address the management and program contract 

issues that obviously are glaring; the specific difference between 

the Integrated Surveillance System and America’s Shield Initiative; 

and also, how the implementation of America’s Shield Initiative is 

safeguarded to avoid the problems that were pointed out by the 

General Services auditor. 

However, it is my understanding that as of yesterday, DHS has 

failed to provide the subcommittee with this information. And also, 

I checked this morning and we still have not received it. 

The second issue I would also like to raise is the fact that for us 

to be able to move forth and be able to make sure that the American people are getting what they deserve as it relates to having 

protected borders using this new technology, until we hear from 

the Department of Homeland Security in a meaningful way, we are 

still—in my opinion—very vulnerable and also wasting the taxpayers’ money. 

Mr. Chairman, I look forward to hearing from our witnesses that 

we do have here. And I want to thank those that are here from the 

public and private sector because our goal here in this subcommittee is to make sure that not only do we protect our borders, 

but we make sure that we spend the taxpayers’ dollars responsibly. 

So I look forward to the testimony. I look forward to hopefully 

learning more about protecting our borders, but also pointing out 

the inequities that are ongoing today. 

Mr. Chairman, thank you once again for having this hearing. 

And I look forward to hearing good testimony. 

Mr. ROGERS. I thank the gentleman. 

The Chair now recognizes the Chairman of the full committee, 

Mr. Cox of California. 

Mr. COX. Thank you, Mr. Chairman. This is a very important 

hearing for the reasons that you both laid out. I want to thank you 

for having it. 

We are not interested merely in exhuming the failures of the 

past, but more importantly, in inferring organizational lessons of 

both the contracting and procurement for the Department of Home-
4

land Security going forward with respect to the America’s Shield 

Initiative. 

And there is a purpose to all this. In just six weeks, to remind 

my colleagues, on July 27, 2005, Ahmed Ressam, whom we refer 

to as the Millennium Bomber, is going to be sentenced for his attempt to smuggle explosives across the northern United States border into Port Angeles, Washington. 

His plan, of course, was to blow up LAX, the Los Angeles International Airport. And that plan was thwarted six years ago by an 

alert customs agent. 

Today, we have the opportunity to examine key findings in the 

General Services Administration’s audit, through the IG, of the Remote Video Surveillance program and its parent program, the Integrated Surveillance Intelligence System. What the audit reflects, as 

the Chairman has noted, is that these key initiatives of the former 

INS and the Border Patrol to protect our borders were not effectively managed. 

The result was a waste of taxpayer dollars and, more importantly, more seriously, continuing holes in our border security system. 

We will explore today questions regarding four things about this 

failure: first, the initial award of the first RVS contract six years 

ago; second, the contract mechanisms that were used; third, the 

type and quality of equipment that was installed; and fourth, the 

management of the contract, both by the Border Patrol and GSA. 

This hearing is timely because the Department of Homeland Security will soon announce its plans regarding the America’s Shield 

Initiative, which, of course, is going to supplement and replace both 

the ISIS and the RVS programs. The department estimates that America’s Shield will cost $2.5 

billion over the next five years; that is, perhaps a justifiable 

amount, given that it is going to focus on an aggressive effort to 

monitor over 6,000 miles of our borders with surveillance technology. But it is, nonetheless, a significant sum of money. And it 

is absolutely vital that this time we get it right. 

America’s Shield, as planned, will integrate the use of ground 

sensors, unmanned aerial vehicles, regional command centers and 

border agents on the ground. As we prepare to spend $2.5 billion 

on this initiative, it is important to examine the lessons of past failures and, more importantly, to infer what best practices can be applied in the future for managing ASI. 

Currently, the Department of Homeland Security is the second 

largest spending agency in the Federal Government after the Department of Defense. Simply to manage the DHS acquisitions requires approximately 700 Department of Homeland Security employees. They are responsible for $13 billion of contracts. 

The Bureau of Customs and Border Protection, which is the leading agency for the America’s Shield Initiative, has 80 acquisition 

staff handling $2.6 billion in planned obligations for the current fiscal year. When the department was established, it had legacy components. And those legacy components have contributed no fewer 

than seven separate procurement offices. 

The Homeland Security Act of 2002 created 35 new offices within 

DHS that have no independent procurement support. So, the Chief 
5

Procurement Officer established an eighth office, the Office of Procurement Operations, to support over $2 billion in transactions by 

those 35 offices. 

Under the current organizational structure at DHS, the Chief 

Procurement Officer has direct line authority over only the eighth 

office that he established. He has only indirect line authority over 

the seven legacy procurement offices. 

So Mr. Chairman, I look forward to exploring in this hearing, 

and afterwards with the Department of Homeland Security, what 

organizational changes the Congress can help the department to 

make in order to strengthen the procurement process and improve 

overall contract management at DHS. There is no more important 

substantiation of this requirement than with the America’s Shield 

Initiative that is the focus of this hearing. 

Thank you, Mr. Chairman. 

Mr. ROGERS. Thank you. 

The Chair now recognizes the Ranking Member of the full committee, the gentleman from Mississippi, Mr. Thompson. 

Mr. THOMPSON. Thank you very much, Mr. Chairman and ranking member. 

And I would like to welcome the witnesses to the panel this 

morning. 

Border security is vital to America’s security. Ensuring the safety 

of our borders must be one of this committee’s main priorities. 

Border Patrol agents, support personnel and equipment and technology each play a role in ensuring the safety of our borders. The 

successful and comprehensive use of technology can serve as a force 

multiplier along our vast borders and provide the clock surveillance 

and monitoring. 

ISIS was envisioned as a means to integrate technology in our 

nation’s border protection strategy. However, the December 2004 

audit by the inspector general of GSA revealed major and significant problems within the ISIS program. 

Over a 10-year period, the American taxpayers have paid $239 

million for ISIS; yet, based on this GSA report, only 4 percent of 

the border has been covered. In our oversight role, we need to understand not only what has happened, but how it happened and 

how mistakes can be avoided in the future. 

It is not enough to change the name of ISIS to America’s Shield. 

We must change the practices that led to the problem. 

For fiscal year 2006, the administration requested $51 million for 

the America’s Shield Initiative. And this Congress appropriated the 

amount requested. 

We must ensure that the past and future investment of the 

American taxpayer is properly spent. We cannot fulfill our constitutionally mandated function if the administration refuses to cooperate. 

We do not have witnesses who can tell us why the INS decided 

to allow GSA to manage this contract. We do not have witnesses 

who can tell us why the GSA failed to exercise oversight of the contract. We do not have the witnesses from DHS who can tell us the 

steps that have been taken to assure that these mistakes will not 

be repeated. 
6

1 Associated Press; ‘‘Armed Civilians to Patrol Mexican Border’’ (3/20/05). See also, Ayres, 

Chris; ‘‘Tombstone vigilantes ride shotgun to keep the strangers out;’’ The London Times; pg. 

42 (4/1/05). 

I am happy to hear the chairman’s comments, in his opening 

statement, that we will continue to pursue the individuals to get 

them before this committee to answer some of these questions. 

But also, Mr. Chairman, at this point, we do not have witnesses 

who can paint a complete picture and provide a forward-looking 

strategy for us. The DHS IG will release a report in 30 days on the 

failure of ISIS. 

At that time, this committee should convene a hearing with representatives from DHS, IG and GSA procurement office and of the 

Department of Homeland Security to look at the failure of ISIS. We 

cannot fulfill our oversight mission unless all relevant parties are 

called before this committee. 

And I look forward to that taking place, Mr. Chairman. 

I support the men and women in our Border Patrol. They need 

the kind of help that technology can bring. And we must do our 

part to assure that they have an efficient and effective system. 

We can do better than the mistakes of ISIS. We can make America safer and make America’s Shield the program that it is intended to be, only if we build on the errors of the past. 

And I look forward to the testimony, Mr. Chairman. 

Mr. ROGERS. Thank you. And I do assure you, we are going to 

have a subsequent hearing for those parties. And DHS has assured 

us that they will make it a point to be at that hearing. 

I want to remind other members that they can provide opening 

statements for the record.

PREPARED STATEMENT OF THE HONORABLE SHEILA JACKSON-LEE A REPESENTATIVE

IN CONGRESS FROM THE STATES OF TEXAS

JUND 16, 2005

Chairman Rogers and Ranking Member Meeks, I appreciate your efforts in holding today’s hearing concerning the new border surveillance system. As a Representative of the 18th Congressional District of Texas and Ranking Member on the Judiciary Subcommittee on Immigration, Border Security, and Claims, the success of the 

new America’s Shield Initiative (ASI) is a major issue for me as well as my constituency. 

On the Immigration Subcommittee as well as with this body, I have worked extensively to underscore the need for more technology and manpower at the borders 

in order to obviate the need for volunteer militias such as the Minuteman Project. 

I am concerned about the potential for violence along the border, given that many 

of the participants carry firearms.1

In addition to an analysis of the performance of AS I, I would like to know what 

actions the Department is taking to monitor the activities of the Minutemen and 

other private individuals involved in monitoring border movements of undocumented persons. I would also like to know what, if any, efforts are underway to 

guard against violence along our border by the armed Minutemen or other private 

individuals involved In monitoring border movements of undocumented persons. 

In addition to enhancing technology, we must ensure that we have a trained and 

an adequate number of employees available to patrol in order to thwart the propagation of armed private individuals along these borders who pose a threat to undermine the Department’s role in protecting our borders and, if violence results could 

create significant new homeland security threats that could overshadow the real 

issue of porous borders. 

I hope that the integration problems that riddled the Integrated Surveillance Intelligence System (ISIS) do not carry over to ASI. This body as well as the Full 

Committee must exercise sufficient oversight as we move forward with implementation of this new technology. Thank you.
7

Mr. ROGERS. And we are delighted to have such a great panel of 

folks to testify with us today. 

I would like to start off by recognizing Mr. Joel Gallay, Deputy 

Inspector General of the U.S. General Services Administration, for 

his comments. 

STATEMENT OF JOEL GALLAY 

Mr. GALLAY. Thank you, Mr. Chairman, Mr. Meek, members of 

the subcommittee. I am pleased to have the opportunity to appear 

today to discuss our recent audits of GSA’s contracting efforts in 

support of the Border Patrol’s Remote Video Surveillance Program. 

Over the past several years, we have performed a number of audits of contracting practices of GSA’s Federal Technology Service 

Client Support Centers across the nation. In a series of reports, beginning in early 2003, we identified widespread problems in FTS 

contracting. 

Our initial reports prompted a request from the GSA Administrator for us to conduct a nationwide review. In our 2004 audit, 

part of that review, we sampled over 300 task orders awarded by 

FTS, including 13 relating to the RVS project. The total value of 

those 13 orders was $43.4 million. 

Our review found that there were a number of significant deficiencies in the RVS procurement, along with a lack of adequate 

progress in actually implementing the RVS improvements and 

chronic inattention on the part of both GSA and the Border Patrol 

to the proper administration of the contract. 

Despite the critical nature of the program and despite having paid the contractor nearly $20 million, as of last summer, at the 

end of our field work, none of the sites covered in our sample had 

fully operational RVS systems in place. At some locations, no 

equipment had been installed; and at others, problems with the 

equipment rendered the system incomplete and unreliable. 

Procurement deficiencies occurred in a number of areas. A major 

problem was the lack of competition in awarding the RVS contracts. 

In brief, in 1999, FTS made individual task orders on the order 

of $1 to $2 million to a contractor for the purchase and installation 

of RVS cameras and monitoring equipment. The following year, as 

the chairman pointed out, FTS awarded to that same contractor 

and a team of vendors, effectively on a sole-source basis, a blanket 

purchase agreement valued at more than $250 million for a nationwide RVS project. 

This new contract represented an enormous increase in scope 

and value over the initial award. It should have been formally competed to allow all interested, qualified vendors an opportunity to 

respond. 

Another problem highlighted by our audit work was the use of 

contracting vehicles that were inappropriate for construction services. A considerable portion of the RVS project required construction work to install foundations, erect poles and towers up to 300 

feet in height, and hook up to utilities. 

Skilled craftsmen were employed to build and install the components of the system. Engineering firms were needed to design the 

installation and define the specific requirements for each location. 
8

The contractor’s multiple award schedule contract and those of 

its team members did not include the services necessary to perform 

such work. The scheduled contract it held was primarily a commodities contract for furnishing radios and microwave transmission 

equipment, not construction work. 

This appears to have been an attempt to improperly shoehorn a 

broad and complex project into a more narrowly defined and conveniently available existing contract. Government personnel procuring construction services require specialized training. FTS personnel lacked that training and expertise. 

In the case of the RVS program, FTS undertook projects it had 

neither the authority nor skills to properly procure and manage. 

Our review also found widespread inadequate contract administration and project management on the part of both FTS and the Border Patrol. 

FTS’ lack of oversight of its task orders resulted in payments 

being made for shoddy work, for work that was incomplete, for 

goods never delivered to the government and for unsupported increases in billing rates. We found significant problems with equipment delivery and installation. 

For example, we found locations where no equipment had been 

delivered and no work was underway for as long as 2 years after 

issuance of the task orders. In other locations, equipment had been 

delivered but not installed or had been installed but was not operational, with cameras and other equipment not functioning or having continuing reliability problems. 

We found parts laying on the desert floor and in storage adjacent 

to Border Patrol property. We also found that the contractor ordered and billed the government for equipment that sat in warehouses, sometimes for years. 

Our review also found that in many instances, the contractor did 

not provide the thermal imaging camera equipment that its own 

pricing worksheets had identified as components of the contract 

line items of the BPA. Instead, the contractor provided less expensive cameras having less capability. 

According to the contract files, there was no corresponding reduction in price to the government, nor was approval for the changes 

obtained from the FTS contracting officer. This created a potential 

for overpayments totaling $6.5 million, when medium-range cameras were provided instead of the more expensive long-range ones. 

Our review found that FTS did not have adequate internal controls to ensure that the procurements were properly managed. In 

many instances, FTS approved payments for services without ever 

visiting the sites or adequately verifying whether the services 

invoiced were actually rendered. 

In some cases, FTS paid for products that were not installed or 

even delivered. Both FTS contracting personnel and Border Patrol 

management bear accountability for the failings we identified. 

Clearly, neither agency adequately fulfilled its responsibilities. 

Before closing, I think it is important to let the committee know 

that GSA and FTS have made a number of improvements since our 

initial audits. In July 2004, the Administrator, in conjunction with 

DOD, launched the Get It Right Initiative to help ensure proper 

contracting practices. 
9

1 ‘‘Compendium of Audits of the Federal Technology Service Regional Client Support Centers,’’ 

dated December 14, 2004. 2 As our work was a review of GSA’s procurement practices, we did not review the overall efficiency, effectiveness, or management of the RVS program. 

The initiative has led to the implementation of better controls 

across FTS. And we believe the agency is making genuine progress 

in addressing the serious contracting deficiencies we found in our 

reviews. 

Finally, I would note that there are perhaps some lessons that 

can be learned here. The RVS effort was in many respects a major 

project gone awry. 

Underlying the problems we found was the failure to follow basics: to adhere to proper procurement rules and practices; to ensure 

there was adequate planning, selection of an appropriate contracting vehicle and open competition; to ensure ongoing communication between GSA and the client agency and between headquarters and on-site users; and to ensure there was attentive contract administration and effective of the contractor’s performance. 

All of these are simply basic elements of good government contracting. Our review of FTS contracting and the experience with 

the Border Patrol’s RVS program demonstrates just how important 

such basics are to protecting the public interest and to the proper 

stewardship of taxpayer funds. 

Mr. Chairman, that concludes my statement. I would be happy 

to answer any questions you or the subcommittee may have. 

[The statement of Mr. Gallay follows:]

PREPARED STATEMENT OF JOEL S. GALLAY

Mr. Chairman, Mr. Meek and Members of the Subcommittee: 

Thank you for this opportunity to discuss our office’s recent audit of task orders 

issued by GSA’s Federal Technology Service (FTS) Client Support Centers (CSCs). 

Our reviews included the procurement of services and equipment for the Border Patrol’s Remote Video Surveillance (RVS) program, part of the Department of Homeland Security’s overall Integrated Surveillance and Intelligence System.

Audits of GSA Contracting Practices 

Over the past several years, we have performed a number of audits of FTS contracting practices at its Client Support Centers across the nation. The FTS Centers 

assist Federal agencies in identifying technology solutions and acquiring, deploying, 

managing and using them. FTS revenue from client agencies for these services has 

significantly increased over the last several years and reached $5.4 billion in FY 

2004. 

In a series of audit reports beginning in early 2003, we identified numerous improper task order and contract awards, including improper sole-source awards, work 

outside the contract scope, lack of support for fair and reasonable pricing, improper 

task order modifications, frequent inappropriate use of time-and-materials task orders, misuse of small business contracts, and failure to enforce contract provisions. 

Overall, we found that FTS failed to adequately ensure that contracting laws and 

regulations were followed.

Review of Homeland Security Task Orders 

Our 2004 audit 1 was part of a nationwide review requested by the GSA Administrator in response to our earlier findings. In this review we sampled over 300 task 

orders awarded by FTS, including 13 that related to the RVS project.2 The task orders included: (1) installation of surveillance cameras to be mounted on poles and 

other structures; (2) construction of towers for microwave transmission equipment; 

(3) installation of monitoring equipment in Border Patrol facilities located along the 

U.S.-Canada and U.S.-Mexico borders; and (4) provision of a maintenance and repair facility. The total value of the 13 orders included in the audit sample was $43.4 

million. 

Our review concluded that there were a number of significant deficiencies in the 

RVS procurement, as well as a lack of adequate progress in actually implementing 
10

3 A BPA (blanket purchase agreement) is a vehicle which provides a simplified method of filling agencies’ anticipated repetitive needs for supplies or services. BPAs are typically established 

under existing multiple award schedule (MAS) contracts, but can also be freestanding arrangements. This BPA was a teaming arrangement involving six FSS MAS contractors whose products and services would be used to provide the RVS? components. 

the RVS security improvements, and chronic inattention on the part of both GSA 

and the Border Patrol to the administration of the contract and management of the 

project. Despite the critical nature of these security improvements and nearly $20 

million already paid to the contractor for the eight RVS installations in our sample, 

as of the end of our field work in Summer 2004, none of the eight sites had fully 

operational RVS systems. At some of these locations, no equipment had been installed, and at others, problems with the equipment installed to date have rendered 

the system incomplete and unreliable. Contracting deficiencies occurred in five 

broad areas: lack of competition for contract award; use of an inappropriate contract 

vehicle; inadequate contract administration and project management; contractor’s 

providing less expensive equipment; and ineffective management controls.

Lack of Competition in RVS Contract Award 

From meetings with CSC officials, we determined that the contract for the RVS 

project was not conducted with full and open competition as required by federal acquisition regulations. According to FTS records, in the fall of 1998, the Immigration 

and Naturalization Service (INS), at that time the Border Patrol’s parent agency, 

issued a Request for Proposal for the RVS project. In response, several vendors 

made oral presentations at INS headquarters in Washington, D.C. 

In November 1999, FTS awarded an initial task order to International Microwave 

Corporation (IMC) for $2 million, for the purchase and installation of cameras and 

monitoring equipment at one RVS location. Despite our repeated requests, no documentation was provided evidencing the criteria used to evaluate the vendors’ proposals or the analysis that led to the award to IMC. 

One year later, in December 2000, FTS awarded a Blanket Purchase Agreement 

(BPA) 3 to IMC and a team of vendors for RVS cameras and monitoring equipment 

to be installed at dozens of locations across the nation. Although the work under 

this BPA far exceeded, in dollar amount and extent of work, the initial task order, 

it was nonetheless awarded to IMC without further competition, contrary to federal 

acquisition regulations. The BPA increased the contract value to more than $257 

million. This new contract represented an orders of magnitude increase over the initial award, and should have been formally competed to allow interested, qualified 

vendors the opportunity to provide contract proposals. 

In proposing the BPA, the vendor asserted that substantial savings to the Government would result from additional discounts off the FSS Schedule pricelists for the 

monitoring equipment. However, no such savings occurred. For example, one item 

we found on schedule, a Hitachi camera, was priced under the BPA at more than 

double the FSS Schedule price. The BPA called for hundreds of these cameras at 

a unit cost about $2700 higher than the FSS schedule price. Moreover, the vast majority of the items to be supplied were not on IMC’s or any of the teaming vendors? 

FSS Schedule pricelists. Other equipment was subsequently purchased from a company partially owned by the prime contractor.

Inappropriate Contract for Construction Services 

A considerable portion of the RVS project required construction work, including 

the use of backhoes, cranes, bulldozers and boring equipment to install foundations, 

erect poles and towers up to 300 feet in height, and connect to utilities. Skilled 

craftsmen such as electricians, carpenters, steeplejacks, and heavy equipment operators were employed to build and install the components of the system. Engineering 

firms were needed to design the installation and define the specific requirements 

for each location. IMC’s FSS schedule contract, and those of its team members, did 

not include the services necessary to perform such work. 

The FSS Schedule contract with IMC was a commodities contract for furnishing 

radios and microwave transmission equipment, not construction work. It contained 

none of the requisite references to construction laws and regulations that protect 

employee wages, workplace safety, the environment, the integrity of the procurement process, or ensure timely delivery and quality of workmanship. Congress has 

determined, with the passage of numerous such laws, that there are inherent risks 

to the Government and special requirements associated with construction work. For 

example, the Davis-Bacon Act requires prevailing wage determinations; these requirements were not incorporated into the task orders, resulting in a potential unfunded liability to the Government. Furthermore, Government personnel procuring 

construction services require specialized training and experience. FTS personnel 
11

lack that training and expertise. In the case of the RVS program, FTS undertook 

projects it had neither the authority nor skills to properly procure and manage.

Inadequate Contract Administration and Project Management 

Due to inadequate contract administration and project management on the part 

of FTS and the Border Patrol, as of the end of our field work in Summer 2004, none 

of the eight locations we reviewed had fully installed and operational RVS systems, 

despite almost $20 million in payments to IMC. FTS’s lack of oversight of its task 

orders resulted in several questionable practices involving customers and contractors, including payment made for shoddy work, work that was incomplete or never 

delivered to the Government, and unexplained increases in billing rates. Neither the 

BPA nor the individual task orders included detailed specifications, thus often leaving interpretation of the Border Patrol’s needs up to the contractor. 

Our site visit to one location in Washington State revealed serious problems with 

the quality of the installation of equipment. Cameras and other pieces of equipment 

were not functioning and had numerous reliability problems resulting in significant 

down-time and the need for frequent repairs. Border Patrol officials performed a 

technical inspection of the work and identified numerous problems. Remediation efforts were underway by the contractor at the time we made our visit. 

At three other locations (Tucson Station, Arizona, Carrizo Springs, Texas, and Detroit, Michigan), although task orders had been issued one to two years earlier, no 

equipment had been delivered and no work was underway at the time we contacted 

Border Patrol officials. At three additional locations (Buffalo, New York, Nogales, 

Arizona, and Laredo, Texas), some equipment had been installed but the components were not operational. In Buffalo, only four of 59 cameras had been installed. 

At Nogales and Laredo, some work had been done, but system components were still 

not operational as other equipment, such as microwave towers, had yet to be installed. On our visit to Naco, Arizona, some equipment had been delivered, but 

there was no evidence of installation. We found parts in storage and laying on the 

desert floor adjacent to Border Patrol property. According to Border Patrol officials, 

no contractor personnel had been on-site since the equipment was delivered to Naco 

about a year prior to our visit. 

Border Patrol officials at the Arizona locations raised concerns about workmanship and adherence to national electrical codes and, in particular, protection against 

lightning strikes. The Border Patrol’s local electronic technicians had been left 

largely in the dark as to the equipment to be furnished or the design of the system 

to be provided; no one provided them with design drawings or specifications for the 

equipment. 

The table below summarizes the status of RVS improvements at each of the eight 

sites we reviewed:

State Location Value Date 

Issued Status 

Amount Paid 

to

the Contractor 

Carrizo Springs, TX $4,742,500 12/09/02 Not Installed $2,190,169

Nogales, Arizona 3,048,500 11/15/01 Partially Installed 1,758,980

Laredo, Texas 4,156,175 10/25/02 Partially Installed 4,114,933

Naco, Arizona 3,536,550 06/29/01

Not Installed; some 

equipment delivered 2,850,649

Tucson Station, Arizona 2,345,000 05/21/02 Not Installed 623,974

Detroit, Michigan 3,343,500 05/13/03 Not Installed 362,880

Buffalo, New York 5,287,500 01/31/03 Partially Installed 1,347,713

Blaine, Washington 6,695,182 11/24/99 Operational Problems 6,624,367

Totals: $33,154,907 $19,873,665

Delays were often attributable to the acquisition of the land where the camera 

monopoles or transmission towers were to be installed. The task orders required the 

contractor, at a cost to the Government of about $280,000, to provide assistance to 

the Government in acquiring the sites, but did not define what specific work was 
12

4There is some evidence that the contractor may have informed headquarters Border Patrol 

personnel of the planned substitution of cameras. However, GSA contracting officials were not 

so informed. 5L–3 Communications acquired IMC in February 2003, and became the contractor of record 

on the project.

required. Border Patrol officials told us that little assistance in acquiring the property had been provided by the contractor. Instead, Border Patrol officers themselves 

were charged with identifying property owners and negotiating leases or access 

rights. 

It made little sense for FTS to issue task orders for procurement and installation 

of the RVS system before sites had been acquired. Yet that is what occurred. The 

contractor ordered equipment and billed the Government for equipment that languished in warehouses. 

Delays in installation and operation of the RVS components were also exacerbated 

by FTS officials extending, without adequate justification, the period of contract performance for the task orders. Of the 13 task orders sampled, there were 18 contract 

modifications to extend the period of performance, none of which included proper 

justification for the extension. 

Further, due to lack of contract oversight, some Management, Administration, and 

Engineering task orders inappropriately specified higher billing rates than required. 

In one order for $3.1 million for labor costs and program management support, FTS 

incorporated higher labor rates from another IMC contract into the task order with 

a sole source justification, costing the Government an additional $600,000. A task 

order for $1.8 million of additional funding for program management support similarly incorporated the higher labor billing rate, resulting in an estimated additional 

cost to the Government of $219,000. These task orders were performed on a timeand-materials basis, yet the invoices submitted to the FTS, and which FTS paid, did 

not include the required support for hours worked and hourly billing rates.

Providing Less Expensive Equipment Without Contracting Officer Approval 

In numerous instances, the contractor did not provide the thermal imaging camera equipment that its pricing worksheets identified as a component of the contract 

line items provided for in the BPA. Instead, the contractor provided less expensive 

cameras having less capability. According to the contract files, there was no corresponding reduction price to the Government, and approval for the changes was 

not obtained from the FTS contracting officer.4 This created a potential for overpay- ments of at least $6.5 million for thermal imaging cameras when medium-range 

cameras were provided instead of the more expensive long-range ones. 

Bills of material reviewed during our audit, used by the contractor to price the 

Border Patrol project, provided for FLIR brand thermal imaging cameras with doubler lenses at a cost of $48,500. The doubler lens, valued at $10,000, expanded the 

camera’s range of vision. The Border Patrol purchased several hundred of these 

cameras, but few actually included the doubler lens. As of the end of our field work, 

the Border Patrol’s master inventory data showed 396 FLIR brand thermal imaging 

cameras, but only 78 were delivered with the doubler lens, resulting in a potential 

overcharge to the Government of approximately $3,180,000 (318 x $10,000). 

The contractor provided two types of other cameras that also did not come with 

doubler lenses, and were uncooled, medium-range cameras, as opposed to the cooled, 

long-range cameras that were built into the contract price. The master inventory 

data showed 328 ISAP brand cameras. This camera was priced on the FSS multiple 

award schedule at $38,500, resulting in a potential overcharge to the Government 

of at least $3.28 million ($48,500 — $38,500 = $10,000; 328 x $10,000 = $3,280,000). 

The Border Patrol inventory also showed 70 BAE brand cameras, another less expensive thermal imaging camera, priced at $23,080, resulting in a potential overcharge of $1,779,400 ($48,500 — $23,080 = $25,420; 70 x $25,420 = $1,779,400). 

Contractor officials 5 told us that thermal imaging cameras with doubler lenses 

were not required for every installation, and that the contract gave the Border Patrol the flexibility to decide which type of camera it needed. However, we learned 

from the contractor that each BPA contract line item that included a thermal camera installation was priced to include the more expensive camera with doubler lens. 

No adjustment to the BPA price to reflect the less expensive equipment was offered 

by the contractor or requested by FTS. 

Ineffective Management Controls. 

Overall, for the RVS task orders we reviewed, we determined that FTS did not 

have adequate internal controls to ensure that the procurements were made and executed in accordance with applicable regulations. Contracting officers often did not 

get involved in the development of requirements or decisions on procurement meth-
13

odology until the Border Patrol had already made those crucial decisions. Consequently, orders were signed that often were flawed from the beginning. 

FTS contracting officials did not adhere to federal acquisition regulations governing purchases under the multiple award schedule and as a result failed to obtain 

adequate competition and ensure fair and reasonable pricing for the Government. 

Time-and-materials task orders were issued to contractors with no review of labor 

hours to ascertain the level of effort necessary to accomplish the work, and there 

was no evaluation of the proposed mix of labor skills to determine if the contractor’s 

proposal met the needs of the Government. 

In many instances, FTS approved payment for services and installations never inspected. FTS failed to visit the sites or adequately verify whether or not services 

invoiced were actually rendered, and whether work had actually been completed. In 

some cases, FTS paid for products that were not installed, or were still sitting in 

the contractors? or manufacturers? warehouses. 

In summary, from our review of the task orders for the RVS installations, it is 

clear that neither FTS nor the Border Patrol adequately fulfilled its responsibilities 

in administering the contract and managing the project. Proper adherence to government contracting competition requirements was lacking. Task orders awarded to 

contractors failed to adequately define the actual work to be performed. Improper 

contracting vehicles were used to accomplish client agency objectives. Border Patrol 

officials failed to bring contractor deficiencies to FTS? attention, and FTS itself performed no inspections. Nevertheless, the contractor continued to receive payment for 

incomplete work. RVS systems remained to be fully installed long after the specified 

contract performance period, and installed equipment did not operate properly.

Lessons Learned 

The RVS program reflected many of the problems that can arise when attempting 

to execute major projects without the benefit of sound acquisition planning and effective project management and oversight. There are a few fundamentals of good 

contracting that, if properly adhered to, would have greatly increased the chances 

for overall project success. 

First, the client agency is in the most knowledgeable position to develop the requirements for its own programs. It knows best what the agency’s program objectives should be. It also should recognize what its in-house capabilities are and be 

able to determine if outside assistance is required to better define its contract requirements. GSA’s role should be to ensure that the client’s requirements are described in sufficient detail to allow potential vendors to prepare proposals and to foster competition in response to the Government’s stated needs. 

Second, sufficient time must be set aside to allow for proper acquisition planning. 

GSA and the client agency need to collaborate at the earliest possible time to identify the most appropriate and efficient procurement vehicle and to ensure there is 

proper competition. The procurement vehicle selected should provide the full scope 

of services and commodities that have been identified as necessary to accomplish the 

project. Attempting to ‘‘shoehorn’’ a broad and complex project into a narrowly defined contract vehicle is a recipe for problems further down the road; it may also 

unfairly preclude awards to vendors who may be better qualified to accomplish the 

work. Proper competition of a project among several vendors or teams of vendors 

will generally produce a wider range of potential solutions, and often generates 

questions from the vendors about the project that may identify problems not addressed in the original plan. It affords the greatest assurance of obtaining the best 

value for the government. 

Third, the evaluation of proposals received from contractors is the responsibility 

of GSA as the contracting agency. Experts in the client agency’s program, however, 

should participate as members of evaluation panels or technical advisors. Evaluations of proposals should be performed in accordance with the factors established 

by the Government during the acquisition planning process and conducted with integrity and independence and in accordance with established regulations and practices. 

Finally, the contracting officer should establish a formal plan identifying the roles 

and responsibilities of GSA and the client agency in ensuring that the contract 

terms and conditions relating to quality, quantity and timeliness are met. The Government representatives charged with these responsibilities must collectively possess the knowledge, training and experience to handle the job. The responsibilities 

and authorities of the team members should be defined in writing by the contracting 

officer and/or the project manager. Just as musicians need a conductor to make 

them into an orchestra, a project needs a single overall director to make sure that 

all the parts come together in a planned sequence. Communication among team 

members at all levels and effective oversight by the agencies involved is crucial to 
14

ensuring that the often unforeseen complications and disruptions that can affect any 

large project can be addressed before they become serious problems. 

We firmly believe that had the RVS program followed these basic precepts of 

proper government contracting, the mission of the client agency and the interests 

of the taxpayer would have been far better served. 

Before closing, I think it is important to let the Committee know that GSA and 

FTS have made a number of improvements since our initial audits. In July 2004, 

the Administrator, in conjunction with DoD, launched the ?Get it Right? program 

to help ensure proper contracting practices. The initiative has led to the implementation of better controls across FTS nationwide, as well as individual Client Support 

Center management improvement plans. It has resulted in greatly increased attention to ensuring adequate competition, determining best value, and utilizing and 

properly administering the appropriate contract vehicles. These efforts have been 

fully supported by GSA’s management team. We believe the agency is making genuine progress in addressing the serious contracting deficiencies found in our reviews. 

In conclusion, the RVS effort was in many respects a major project gone awry. 

A principal reason was the failure to follow basics: to adhere to proper procurement 

rules and practices; to ensure there was adequate planning, selection of an appropriate contracting approach, and open competition; to ensure on-going communication between GSA and the client agency, and between headquarters and on-site 

users; and to ensure there was attentive contract administration and effective oversight of contractor performance. All of these are simply basic elements of good procurement practices. Our review of FTS contracting, and the experience with the Border Patrol’s RVS program, demonstrates just how important such basics are to protecting the public interest and to the proper stewardship of taxpayer funds. 

Mr. Chairman, that concludes my formal statement. I would be happy to answer 

any questions you or members of the Subcommittee may have.

Mr. ROGERS. After that statement, I trust we are going to have 

a lot of questions. 

[Laughter.] 

But I would like to go to our next panelist now. 

And thank you, Mr. Gallay. 

The Chair now recognizes Mr. Joseph Saponaro, President of L–

3 Communications Government Services, to offer a statement. 

I understand that you have with you today Mr. Thomas Miller. 

Mr. SAPONARO. Yes, sir. 

Mr. ROGERS. Thank you. The floor is yours. 

STATEMENT OF JOSEPH SAPONARO 

Mr. SAPONARO. Thank you, Mr. Chairman. 

Good morning. I am Joe Saponaro, president of L–3 Communications Government Services, Inc., known as GSI, joined by Tom Miller, general counsel of L–3 Communications Services Group, which 

GSI is a division. 

First, thank you for inviting L–3 to participate in this hearing. 

We welcome the opportunity to share our relevant corporate experience and to support the America’s Shield Initiative. 

To assist you, we would like to discuss our experiences from the 

Remote Video Surveillance Contract, which was a forerunner to 

ASI. The RVS contract was let by INS in 1999 through GSA. It was 

a small contract, $5 million initially, awarded to a small business, 

International Microwave Corporation. 

But in response to expanding requirements, the contract funding 

ultimately exceeded $150 million, taxing seriously the management 

capacity of both IMC and the administering government office. 

Nevertheless, under RVS, 246 sites with daytime and nighttime vision cameras were installed. Where properly maintained, this system is operational today. 
15

L–3 purchased IMC in November 2002, at which time the RVS 

contract was, from the customer’s assessment, being performed in 

a satisfactory manner. By the middle of 2003, however, the effects 

of the rapidly growing RVS program had become apparent. 

To better support the program, on January 1, 2004, L–3 merged 

IMC into L–3’s Government Services, Inc., a company with greater 

management depth. IMC’s original management was not retained. 

In the spring of 2004, the GSA inspector general audited the 

RVS contract as part of an agency-wide review of contracting practices under GSA’s information technology schedule. The audit report, which was published in December 2004, was harshly critical 

of GSA contracting practices, including the issuance of contracts 

under the GSA IT Schedule 70 contracts. 

I know this committee is also aware of the allegations of IMC 

wrongdoing under the RVS contract that emerged from the audit. 

We have provided the committee staff a copy of our detailed responses refuting these allegations, which were also sent to GSA 

and the IG in January. 

Our responses to these allegations show with specific detail and 

backup data that the claims are wrong. Regrettably, the GSA IG 

never allowed us to comment on the findings prior to issuing the 

report. The damage by this report has been done. And L–3 has 

worked hard to correct the record. 

L–3 is still submitting information to the government. We are 

here today because we take our partnership with the government 

seriously and have a deep sense of responsibility for the continued 

performance of the RVS program. 

Indicative of our commitment, L–3 continued to support the RVS 

program without interruption, even though GSA ceased paying its 

invoices in March 2004, presumably because of the ongoing IG 

audit. Up until September 24, 2004, GSA assured L–3 and the Border Patrol that the RVS contract would be extended, probably until 

the end of 2004, so that critical installations could be completed. 

On September 24, 2004, GSA notified L–3 that there would be 

no extension of labor funding and that L–3 was to stand down and 

cease work effective September 30. Both L–3 and the Border Patrol 

sought relief from this but were unsuccessful. 

To this day, we are working through an exhaustive invoice review with the Border Patrol and GSA to collect the millions of dollars still owed to L–3 in this contract. 

So what can we learn from the RVS experience to help ensure 

the success of ASI? First, selection of the proper contract vehicle 

will allow for installation, construction and other activities required 

to deploy sensors on the border. 

ASI will involve substantial construction. And it will require a 

massive system integration effort. 

Thus, it will require sophisticated program and contract management working as a team, preferably within a single customer agency. RVS program and contract management were split between two 

agencies, an impossible situation for any complex program. 

Next, it will be necessary to acquire land rights and environmental clearances along the border, a very large and complex task. 

Indeed, the acquisition of land rights and environmental clearances 

by the government was a central reason for RVS delays. 
16

Congress and CBP should seek streamlined approaches to acquiring land rights for ASI and should coordinate work activities consistent with the availability of land and access to work sites. 

With the 20 CBP sectors managed from a central office, ASI will 

require a command and control system that facilitates sector integration. Our experience indicates that the best way to achieve this 

end is to include the user community—the Border Patrol agents in 

the field—in the requirements and design process. 

The Customs and Border Protection Service has a challenging 

task in securing our country’s borders. Technology, properly 

planned and deployed along the borders, is a force multiplier that 

will only enhance the performance of the dedicated people of CBP. 

L–3 not only wants to participate in this success; we feel a duty 

to complete the task begun under RVS. L–3 provides high-technology products and service worth billions annually to the government. We recognize both the letter and spirit of our obligations and 

we demand the highest ethical standards. 

L–3 is successful because we live these standards in everything 

we do. 

Thank you for your time and attention. My colleague and I will 

be pleased to answer any questions. 

[The statement of Mr. Saponaro follows:]

PREPARED STATEMENT OF JOSPH SAPONARO

Good morning, Mr. Chairman. I am Joe Saponaro, President of L–3 Communications, Government Services, Inc., known as GSI. I am joined by Tom Miller, General 

Counsel of L–3 Communications Government Services Group, of which GSI is a division. 

First, thank you for inviting L–3 to participate in this hearing. L–3 is keenly 

aware of the paramount importance of the America Shield Initiative in protecting 

our borders and securing our safety—elements that are crucial to victory in the 

Global War on Terror. We are honored to have this opportunity to share our relevant corporate experience and offer ideas to help make ASI a successful program. 

A program the magnitude of ASI will only be successful if the Congress is active 

in providing leadership, resources and guidance for the program. With clear Congressional participation, the executive branch—through the professionals at the US 

Customs and Border Protection Service—can confidently define the objectives, develop the plans and implement a comprehensive ASI program that will produce unprecedented levels of security for the American people. 

It is in that context that we would like to share our experiences and lessons 

learned from the Remote Video Surveillance contract, which was, in some measure, 

a predecessor to ASI. The RVS contract was let by the Immigration and Naturalization Service in 1999 through the General Services Administration. It was a small 

contract—$5 million initially—awarded to a small business, International Microwave Corporation (IMC), later acquired by L–3 Communications. It is important to 

keep in mind that the objective of RVS was to deploy video technology along key 

points of the US borders. When the contract was first let it was never envisioned 

that it would become a comprehensive shield to protect our country. 

In the post-9/11 world, the RVS objective changed. No longer was the paramount 

concern one of illegal immigration; suddenly and irrevocably, the issue became one 

of preventing terrorists from reaching American soil. Consequently, the RVS contract became a high priority program, with funding that exceeded $150 million by 

its expiration on September 30, 2004—orders of magnitude larger and more complex 

than envisioned in the original contract. It is fair to say that the contract outgrew 

the company performing it and the Government offices administering it, neither of 

which had the processes in place at that time to efficiently work a contract of this 

magnitude. And yet, had RVS been fully deployed, it would have only covered 4% 

of the borders. Even with its staggering growth, RVS was never a project of ASI’s 

scope and size. 

In November 2002, L–3 purchased IMC. In the RVS contract, IMC had an important mission that was consistent with L–3’s strategic goals in supporting the defense 

of our country. Moreover, at that time, performance of the RVS contract was, from 
17

the customer’s assessment, satisfactory. There was no indication of any weaknesses 

in the IMC management concept or in the program’s execution. 

By the middle of 2003, however, the effects of the unplanned growth of the RVS 

program were becoming apparent; IMC did not have adequate program and contract 

management experience to keep up with the mounting complexity of the project. 

Recognizing this management challenge, L–3 moved aggressively to reengineer our 

management concept. We merged IMC into Government Services, Inc. on January 

1, 2004 and replaced IMC’s original management team. 

During spring of 2004, the RVS contract was audited by the GSA Office of the 

Inspector General as a part of the agency-wide review of contracting practices under 

GSA’s Information Technology Schedule contracts. The audit report, which was 

harshly critical of GSA contracting practices, was issued in December 2004. The fundamental finding of the audit was that GSA had awarded contracts under GSA IT 

Schedule 70 contract vehicles for materials and services that could not be appropriately purchased under those contracts. RVS was identified as one such contract 

for GSA Region 5. 

The RVS contract expired on September 30, 2004 even though not all funded sites 

had been installed. We believe that the results of the audit led directly to GSA’s 

decision not to extend the RVS project, even though L–3 and the Border Patrol had 

been repeatedly assured by the GSA contracting officer that it would be extended. 

While L–3 is mindful of the shortcomings of the greatly expanded RVS contract, 

we believe the successes of the program must also be recognized. By the expiration 

of the RVS contract on September 30, 2004, a total of 246 sites with daytime and 

night vision cameras had been installed. Where properly maintained, the system is 

operational today. However, as with any high technology system exposed to the environment, RVS cannot be expected to operate continuously without regular maintenance. It will, in time, cease to function. Without a contract, L–3 can only informally 

advise the Border Patrol on how to handle these failures and L–3 has been forthcoming with such advice whenever asked. It is also important to note that L–3 has 

honored and will continue to honor all of its warranty obligations under the contract. 

I know that this Committee is aware of the allegations of IMC wrongdoing under 

the RVS contract that emerged from the audit, such as: camera substitutions; no 

operation and maintenance services performed by IMC; the Government not receiving delivery of certain RVS systems; and problems at the Blaine, Washington site. 

While there are important lessons to be learned from the contract, the audit allegations were unfounded. We have provided the Committee a copy of our detailed responses refuting these allegations, which were sent to both GSA and the IG in January. Our responses to these allegations show with specific detail and back-up data 

that the IG claims were wrong. L–3 does not know whether the contract was legally

awarded under the IT schedule. We understand that GSA disputes this finding. 

L–3 does know, without doubt, that IMC did not improperly substitute cameras 

and over-bill the contract as alleged in the report. Documentation of this has been 

provided to the Committee. All cameras delivered during the RVS program were (1) 

authorized under the contract, (2) billed in accordance with the contract and, most 

importantly, (3) selected by the customer. 

We also know that we provided the services billed for at the Operations and Maintenance Center in Albuquerque, New Mexico, contrary to the report’s allegation that 

no work had been performed there for the last year of the contract. Documentation 

of this has been provided to the Committee. There are exhaustive records of work 

performed at the O & M Center which fully refute the IG’s allegation. Further, the 

allegation in the IG report was apparently based on an anecdotal comment made 

by an unidentified individual in the course of an entirely different audit and, to our 

knowledge, the GSA IG never tested the veracity of that statement. 

We know that the Government received full value under the contract for all sites, 

whether they were complete at the time of contract expiration or not. Documentation of this has been provided to the Committee. The IG inspected certain sites 

while conducting their audit in spring of 2004. The IG then reached the conclusion 

that these eight sites were incomplete and that the Government had been charged 

approximately $20 million. The IG report overlooked, first, that performance continued at these sites from spring 2004 until contract expiration on September 30, 2004. 

Consequently, of the eight sites mentioned, installation of four sites was effectively 

complete by contract expiration. The remaining four sites could not be completed in 

time because of the Government’ difficulties in conducting environmental assessments and acquiring land rights. Finally, even at the incomplete sites, L–3 can only 

be paid for the costs incurred when the contract expired. Thus, the Government has 

not paid for work or materials it has not received. 
18

We know that problems at the Blaine, Washington site set forth in the IG report 

were all corrected at L–3’s expense and that the site was fully functional when the 

contract expired. Documentation of this has been provided to the Committee. L–3 

acknowledges that there were problems with the Blaine installation. By contract expiration, the Blaine site had been fully remediated to the Government’s satisfaction. 

Beyond the clearly erroneous allegations contained in the report, L–3 notes that 

the GSA IG never allowed L–3 to comment on its findings prior to publishing its 

report, which is the normal procedure in the audit process. The simple act of discussing these charges with L–3 prior to issuing the report could have prevented the 

spread of inaccurate and damaging information. The damage done by this report to 

L–3’ reputation has been significant, and L–3 is working hard to correct the record. 

The Committee has our detailed responses that were submitted to GSA and the IG 

last January. L–3 is here today because we take our partnership with the Government seriously and have a deep sense of responsibility for the continued performance of the RVS program. 

Indicative of our commitment, L–3 continued to support the RVS program without 

interruption even though GSA ceased paying L–3’s invoices in March 2004, presumably because of the ongoing IG audit. Up until September 24, 2004, GSA assured 

L–3 and the Border Patrol that the RVS contract would be extended, probably until 

the end of 2004, so that critical installations could be completed. On September 24, 

GSA notified L–3 that there would be no extension of labor funding and that L–

3 was to stand down and cease work effective September 30. Both L–3 and the Border Patrol sought relief from this but were unsuccessful. To this day, we are working through an exhaustive invoice review process with the Border Patrol and GSA 

to collect the millions of dollars still owed on this contract. 

What are the critical considerations for ASI and what can we learn from the RVS 

experience to help ensure the success of ASI? 

First, selection of the proper contract vehicles and program management structure 

will ensure that the needed skill sets and management experience are devoted to 

ASI and that the Government can be assured of optimal results. The proper contract 

vehicle will allow for the installation, construction and other activities required to 

deploy sensors on our borders. 

ASI has at least two complicating elements: it will involve substantial construction and it will be a massive system integration effort. Accordingly, it will require 

sophisticated program and contract management, working as a team—preferably 

within a single customer agency. A serious RVS problem was that one agency was 

handling the program management while another had the contracting authority. 

This created an untenable situation once the contract became more complicated 

than simply buying products off of a schedule. 

Second, a major project to deploy technology along the US borders depends, in the 

first instance, on the acquisition of land rights and environmental clearances—neither a quick nor simple process. Under RVS, the acquisition of land rights, which 

included environmental assessments, was the central reason for delayed installations. Congress and CBP should streamline the process of acquiring land rights and 

environmental clearances for ASI and coordinate work activities consistent with the 

availability of the land and access to the work sites. At a minimum, installation 

projects should be in two phases—phase one for land rights and phase two for installation—with the installation schedule contingent on the completion of phase one. 

Third, we must address the issue of command and control. Currently, our borders 

are protected by 20 different sectors of the Border Patrol. Under RVS, the sectors 

were the dominant Border Patrol entities, rather than being coordinated by the 

home office. IMC often found itself trying to coordinate with two customer agencies 

and a contracting agency. To avoid this, we recommend that CBP install program 

and contract authority in the central office and have the sector offices coordinate 

through a single point of contact. This is all the more important given that ASI 

should include a command and control function and sector integration with a sophisticated and state-of-the-art command and control system. 

A primary goal of ASI should be to provide to Border Patrol agents improved information on inappropriate penetrations of the U. S. borders. The CBP sectors and 

sites should be key elements in establishing site specific requirements for ASI. Accordingly, the CBP program management office needs to provide a forum for these 

sector and site requirements. 

Finally, it is worth noting that RVS and, to an even greater extent, ASI are high 

technology projects. The temptation is to press for state of the art equipment. The 

problem is that the state of the art in technology is often not fully proven and can 

lead to disappointing results. We recommend a Congressionally-mandated technology test and evaluation process to establish that the products to be deployed will 

meet the life cycle requirements of the program. 
19

The Customs and Border Protection Service has a challenging task in securing 

our country’s borders, and L–3 is confident that CBP will gather and use the resources needed to achieve this task. Technology, properly planned and deployed 

along the borders, is a force multiplier that will enhance the performance of the 

dedicated people at CBP. L–3 not only wants to participate in this success, we feel 

a duty to complete the task begun under RVS. 

L–3 provides high technology products and services worth billions annually to the 

Government. We recognize not only the letter of our obligations but the spirit as 

well, and we demand uncompromising standards of ethics. L–3 is successful because 

we honor these values. 

Thank you for your time and attention. My colleague and I will be pleased to answer any questions you may have.

Mr. ROGERS. And we thank you, Mr. Saponaro. 

The Chair now recognizes Mr. Greg Pellegrino, Global Managing 

Director, Public Sector for Deloitte Touche Tohmatsu. 

STATEMENT OF GREG PELLEGRINO 

Mr. PELLEGRINO. Good morning, Mr. Chairman, Congressman 

Meek and subcommittee members. I am Greg Pellegrino, the global 

managing director for the public sector industry within Deloitte 

Touche, one of the world’s largest professional services firms. 

I am directly responsible for our work with the Department of 

Homeland Security. And I am currently the chairman of the board 

of directors for the industry’s Homeland Security and Defense Business Council. It is important to underscore the urgency of efforts 

like the America’s Shield Initiative. 

In the post–9/11 world, government simply has no choice but to 

be as nimble as those who seek to cause harm and to be responsive 

to sudden events that disrupt our communities and the nation’s 

economy. The challenges of this new environment are daunting. 

And we are dependent on the rapid adoption of new technologies 

to accomplish a new mission without bringing the economy to a 

crawl by creating the very same disruptions that we are seeking to 

avoid. 

However, consider that a 2002 study by Gartner, one of the leading analyst firms, found that major corporate investments in technology are not used as intended and that 80 percent of the time, 

they are abandoned within 6 months. That statistic is simply unacceptable when it comes to our nation’s security. 

So government’s historic approach to project management is 

being put to a test in this new environment. Its hierarchal approach is running up against the pace, complexity and diversity in 

today’s fast-paced economy. 

The unique constraints of government contracting make it difficult for departments to achieve their goals at a level of cost and 

efficiency comparable to commercial entities. Whenever these constraints conspire to bring a new idea or an innovative program like 

RVS to its knees, we—both industry and government—often ask 

ourselves how we got here. 

How do programs with bright minds and huge resources lead to 

results where no one is satisfied? 

To illustrate the challenge of large programs, I would like to describe a management parable called often the Abilene Paradox. It 

is a story about a group of Texans trying to keep cool during a 

scorching West Texas summer. 
20

One of them suggests heading off to Abilene in an un-air conditioned Buick 53 miles down the road for an ice cream; 4 hours and 

106 miles later, on one of the hottest days of the year, they got to 

talking. And it turns out that no one really wanted to go to Abilene. 

But each of them thought the others did. And these large programs begin to look a lot like rides to Abilene, where the lesson is 

that managers in both the government and industry need to seek 

out ways to break the cycle, to challenge the assumptions that were 

behind programs when they began, to monitor feedback and to 

measure results more effectively. 

Too often, these wayward programs lose the focus of their original objective, while leadership in both the government and industry navigate the hurdles of keeping the program itself alive. It is 

as if the incentives reward success in overcoming the barriers, instead of achieving the mission itself. 

So how does government break the cycle and better ensure that 

we get results from these major cutting-edge technology investments like ASI? I suggest three principles. 

One, while the tendency is to regulate and seek to get greater 

control, we actually need to build a close, collaborative environment 

where industry and government managers work more closely together to ensure success of these new programs. New restrictions 

on contracting will not make our borders safer; more innovation 

will. 

Two, develop a corps of modern managers, skilled in the complex 

tasks of building links beyond the public sector with whoever can 

serve the interests of the taxpayers. 

And three, foster a culture of challenging old assumptions and 

past decisions. Every major program like this faces a point in its 

path that they either follow the plan or achieve the mission. The 

mission needs to be above the plan. And adjustments need to be 

made when necessary in order to ensure that the mission is 

achieved. 

In my written testimony, I have discussed a few specific ways to 

pursue these three principles. And I will just share a few of them 

in closing. 

For one thing, it is important to look beyond the Beltway to assemble the expertise that best fits the issues at hand. The federal 

government is entitled to the best talent and the best equipment 

that professional services and manufacturers industries can provide, regardless of industry and regardless of geography. 

As well, these innovative programs face unique challenges. And 

they need a strong executive leader in government to take responsibility for ensuring they achieve success. 

Keep it on course, keep the team inspired and back them up 

under fire and when things need to change. And flexibility should 

be regarded as a crucial element of the program. 

Plans need to be adjusted for changing circumstances and public 

attitudes. And it is important to plan for these contingencies because it is rarely that the expected changes are the ones that cause 

problems. 
21

And government, finally, should ensure greater accountability 

from its suppliers by aligning incentives, sharing risks and measuring performance more closely. 

Overall, the public and the private sectors need to work from the 

same game plan, one that yields lower costs and delivers intended 

results more predictably, that will help us get to where we need to 

go, where taxpayers want our country to go and to ensure we get 

there together and that we are glad we went along for the ride. 

Thank you. I look forward to your questions. 

[The statement of Mr. Pellegrino follows:]

PREPARED STATEMENT OF GREG PELLEGRINO

Chairman Rogers, Congressman Meek, and Members of the Subcommittee, I am 

Greg Pellegrino, the Global Managing Director of the Public Sector practice supporting the member firms of Deloitte Touche Tohmatsu. I am also a principal within 

Deloitte Consulting LLP. In that capacity, I am directly responsible for our work 

across the Department of Homeland Security. And I serve as Chairman of the Board 

of Directors for the Homeland Security and Defense Business Council in Washington, D.C., a non-profit association of the leading companies focused on the homeland security market. 

Deloitte Touche Tohmatsu is one of the world’s largest professional services firms, 

with more than 120,000 employees in nearly 150 countries. In the United States, 

we have more than 2,500 partners and 29,000 employees working from 90 U.S. cities, providing audit, tax, financial advisory and consulting services. 

Serving the United States government is one of Deloitte’s most significant strategic initiatives. We are proud to be working alongside leaders from civilian and defense agencies supporting their strategic initiatives through our expertise in human 

capital, financial management, technology integration, auditability, and program 

management. 

I’ve had the unique opportunity over the last 20 years to work with leading public 

and private sector organizations helping them navigate their way through management and technology challenges. These efforts have included the adoption of emerging technologies for programs as diverse as ship maintenance with the U.S. Navy, 

putting computers into school classrooms throughout Florida, and helping to speed 

up the matching process for vital organs throughout the U.S. I also helped to create 

a national model for highway safety information and led our efforts to support Governor John Engler’s revolutionary e-Michigan program to reform the way government services are delivered using the Internet. Those experiences led to my direct 

involvement in helping to define the strategies and tools to support information 

sharing for the newly formed Transportation Security Administration (TSA) following 9/11 and I have led Deloitte’s teams supporting the Department of Homeland 

Security since its creation. 

I think I can be most helpful to the Committee today by focusing on what I have 

gleaned from my own experiences with large-scale programs, much of which has 

been in leading truly transformational initiatives, driven by cutting edge technologies. I will discuss what I believe are best practices that will help to ensure the 

success of America’s Shield Initiative (ASI) in protecting our borders.

New World, New Approach 

It is important to underscore the urgency of efforts like ASI. We are in an era 

in which more and more of what government is involved in is clearly transformational in nature. In the post-9/11 world, government simply has no choice but 

to be as nimble as those who seek to cause harm and to be responsive to sudden 

events that disrupt our communities and the national economy. 

The challenges of the new environment are daunting. Whether it is securing over 

100,000 miles of land surrounding our borders, ensuring every container entering 

our ports is safe, or searching every piece of luggage boarding an aircraft, we are 

dependent on the rapid adoption of new technologies to accomplish a new mission 

without bringing the economy to a crawl by creating the very same disruptions that 

we are seeking to avoid. 

However consider that a 2002 study by Gartner, one of the leading analyst firms, 

found that major corporate investments in technology are not used as intended—

and 80 percent of the time, they are abandoned within six months. That statistic 

is simply unacceptable when in comes to our nation’s security. So the key question 
22

is: How does government better ensure that it gets results from investments in 

major programs that are dependent on new technologies and breakneck speed? 

In rising to this challenge, government’s historic approach to project management 

is being put to the test. Its hierarchical approach is running head up against the 

pace, complexity, and diversity in today’s fast-paced economy. Long reporting 

chains, narrow work restrictions, and compartmentalized operating units are no 

longer acceptable if we are to make advances in how government operates. 

This is by no means a challenge specific to government alone. Neither the public—

nor private sectors are immune to change. Many organizations are revamping the 

old organization chart of closed boxes sealed off into distinct columns. In its place, 

they are shaping a dynamic web in which participants connect and cooperate on an 

ongoing, networked basis. 

The Department of Homeland Security continues to demonstrate its commitment 

to keep up with these forces for change. For example, organizations like Customs 

and Border Protection have created a dedicated program management office for ASI 

and are strengthening project management expertise through the same certification 

programs that industry depends on through the Project Management Institute. In 

fact, the department’s own deputy secretary, Michael Jackson, has a proven track 

record of collaborating with the private sector to tackle tough management challenges. He led the effort to engage some of the brightest minds from industry to help 

the Department of Transportation respond to 9–11 and legislation that created the 

new TSA. The leadership and creativity to reach beyond the beltway to engage highly talented, senior executives from some of the world’s leading private-sector organizations in helping the government achieve something that had never been conceived 

is an essential skill for this new environment.

Government’s Unique Challenges 

The notion that the government can solve its toughest management challenges by 

simply acting more like a corporation is unsound. Many transformational initiatives 

that have been introduced smoothly and economically in the private sector often fall 

prey to what might be called a ‘‘government gap:’’ the unique constraints that make 

it difficult for government institutions to achieve their goals at a level of cost and 

efficiency comparable to commercial entities. 

All too often, government’s unique nature undermines its ability to work with a 

service provider across a project’s scope and life. 

It enforces an arm’s-length relationship when close collaboration is needed. 

It drags out procurement time frames, often making technologies obsolete between 

the time an RFP is issued and a purchasing decision is made. 

And detailed procedural requirements, prolonged budget processes, multiple decision-making layers, and detailed design directives stall it to the pace of a tortoise 

when today’s world is demanding the speed of a rabbit.

Abilene Paradox 

Whenever these forces conspire to bring a new idea or an innovative program to 

its knees, we—both industry and government—often ask ourselves how we got here. 

After all, I’m confident that 100% of these ambitious programs start out with the 

best intentions among all of the parties to achieve the desired results. 

What are the underlying causes that often lead to program failure? To address 

that question, I’d like to describe a management example, called ‘‘The Abilene Paradox,’’ which is often referenced by Deloitte’s Human Capital practice as well as in 

leading business schools. It illustrates the issues that emerge with organizational 

decision-making. This story is about a group of Texans sitting in their backyard, trying to keep as cool as possible during a scorching West Texas summer. One of them 

suggests heading off to Abilene—taking an un-air-conditioned 1958 Buick fifty-three 

miles down the road for a nice dinner at the cafeteria. Four hours and 106 miles 

later, on one of the hottest days of the year, they ended up spending most of their 

time looking for shady places to get a break. 

On the way back, people in the car got to talking. It turned out that no one really 

wanted to go to Abilene in the middle of a heat wave. But each one of them thought 

the others did. 

So they all went along for the ride. 

Too often wayward programs lose the focus of their original objectives while leadership in both the government and contractor teams navigate the hurdles of keeping 

the program alive. It is as if the incentives reward success in overcoming the barriers rather then the mission itself. We need to find better ways to harness the dedication of the government workforce with the speed and innovation of industry that 

it is depending on for this new mission.
23

Crucial elements of success: Clarity and Flexibility 

So how can we avoid losing our way, and begin to consistently drive change and 

results? In my experience, when we have been able to drive transformational 

projects to the goals set out for them and within the cost allocated, we have been 

doing two things: 

Solving the right business problem, and being held accountable for the right results. 

And, providing the teams involved with the flexibility to change course when they 

felt they had identified a better approach, or when they found they were going down 

the wrong path. 

Government can achieve a shared focus by clearly defining deadlines, objectives, 

and capabilities targeted to results. One of the classic examples was how NASA responded to the challenge of putting a man on the moon by rapidly growing industry’s role through the Apollo mission. And another is the rapid response to 9–11 

through the creation of organizations like TSA through close collaboration with industry and a focus on meeting deadlines. 

Such accomplishments are obviously not unique. They can be identified in various 

corners of government. The question is, how to create a government-wide environment that will nurture and sustain this type of focused, flexible—and successful—

approach?

Three Guiding Principles: 

Partnership, Skills, A Culture of Change 

In addressing that, I would like to put forward several ideas, under the rubric 

of three guiding principles: 

1. Government needs to seek out new approaches to collaborate with the private 

sector, with greater predictability and cost-effectiveness. When working with the 

private sector, it is best to introduce a partnership approach early on—and build 

on it. New restrictions on government contracting won’t make our borders safer. 

Greater innovation will. 

2. Government must continue to build the internal skills necessary to match the 

capabilities sought from the private sector—including the capacity to manage complex relationships. It is important to invest in developing program, project and procurement management capabilities within the civil service. 

3. Government must foster a culture of challenging old assumptions and past decisions. The ability to adapt to new circumstances depends on the willingness to recognize when traditional approaches are flawed or obsolete. In our effort to redesign 

the systems for matching organs with recipients there was a point we abandoned 

the original solution—more than halfway through—and still met the project’s requirements on time and within budget. It was the type of decision that demanded 

close collaboration and trust between the customer and the contractor. And I would 

point out that it was only because of the clarity of the goals that such a bold decision was feasible. Every major program worth doing faces such a critical moment 

when we all must make a choice—to follow the plan, or achieve the mission. We 

need to be able to put the mission above the plan. 

I’d like to discuss some specific ways we can pursue these three principles.

Transparency: Open the System Up—Don’t Tie It Down 

When problems occur, government’s understandable tendency is to focus on how 

to regulate them away. But regulation won’t fix the problems—transparency will. 

Transparency stimulates innovation; regulations often stifle it. The culture of challenging assumptions of the past depends on flexibility and decentralization—not a 

rigid adherence to checking off boxes.

Notch Some Early Wins 

In government as everywhere, success breeds success. It is necessary to foster 

clear, visible successes to support continuing implementation, and more importantly, 

to provide a continuing focus on larger objectives. We believe in pursuing what we 

call ‘‘100 day wins’’—targeting short-term results that are achievable, regular, frequent, and build to the ultimate goal—while maintaining a keen focus on how such 

results ultimately fit into the overall vision. Similarly, expectations must be managed throughout the process, so that the roadblocks one is bound to encounter do 

not become insurmountable, simply due a loss of confidence among stakeholders.

Look Beyond the Beltway 

Experience and expertise is not restricted to any enclave. It is crucial to go ‘‘beyond the Beltway’’ as necessary to assemble the expertise that best fits the issues 

at hand. Rather than be restricted to an inner circle here in Washington, D.C., as 

one of the largest buyers of professional services in the world, the federal govern-
24

ment is entitled to access the best professional talent that the professional services 

firms can provide.

Recruit a Champion 

Big, innovative projects face big, unique challenges. That’s why they need a champion—a government sponsor with commitment to keep it on course, motivational 

abilities to keep the team inspired, and political savvy to back it up when it’s under 

fire.

Be Flexible—and Plan for Contingencies 

Political environments are not known for being static. The public’s priorities 

change, and plans need to be adjusted for changing circumstances. Given the importance of maintaining public support, flexibility is a crucial element of any program. 

Similarly, it’s important to plan for appropriate contingencies. It’s rarely the expected developments that cause problems.

Link Design and Implementation 

For understandable reasons, government tends to insist on an arms-length relationship between public and private-sector entities in program and project management. Unfortunately, that leads to splitting off two elements in a program that 

should be intrinsically linked—design and implementation. 

Linking design and implementation by ensuring continuity—and accountability—

of a team through the entire life of the effort is critical. For example, the City of 

London installed more than 600 cameras at 174 locations to charge travelers who 

drove into the city—a revolutionary program that was a achieved in just over two 

years. It was led by a strong program management office that took the ‘‘client’s-side’’ 

in eliminating barriers, aligning policies, and managing over 130 stakeholder organizations to achieve results. The success of that groundbreaking program, by the 

way, also owed much to the previous two points, effective sponsorship and flexibility.

Emphasize the Result—Not The Process 

Perhaps as a consequence of its unique mandate and nature, the focus within government too often tends to be on the process rather than the result. Missing the 

forest for the trees is an occupational hazard in both public and private sectors, but 

the impact in government agencies can be especially debilitating. As I said a few 

minutes ago, we’ve all been involved in journeys where we get to a point where we 

can either follow the plan, or achieve the mission. The plan is a means—the mission 

is the end.

Establish Clear Accountability 

When responsibility for a project is parceled out in unconnected pieces, it is difficult to pin down who to blame if results far short. However, you really do need 

a single throat to choke when things go wrong. Large-scale programs may be complex, but the lines of responsibility must be clear. But it is important to keep in 

mind the need to go beyond traditional accountability. Rather than rely on process 

standardization, it is vital to introduce the principles that characterize the 21st century organization, including its dependence on partners to achieve its results.

Build a Public-Private Partnership 

In the words of the director for administration and services at the Department 

of Defense’s acquisition training institute: ‘‘Acquisition is no longer about managing 

supplies. It’s about managing suppliers.’’ Government can shape a new kind of supplier partnership to ensure greater accountability, by aligning incentives, sharing 

risks, and measuring performance. 

The Homeland Security and Defense Business Council has offered DHS to help 

with the challenge of increasing the number of certified project managers by offering 

to help fund a new certification program through the Project Management Institute. 

This will create a new generation of public sector managers that are both disciplined 

and agile enough to work closely with industry to achieve a new level of performance through programs such as ASI.

Conclusion 

Government and its partners share the same goal. We want to see projects completed on-time and on-target. We want to see programs that meet their objectives. 

But sometimes there are roadblocks.

How do we overcome them?

By focusing on building partnership, skills and a culture of change.

The public and private sectors need to be able to work from the same game plan—

one that yields lower costs and intended results. 
25

Government needs to make it a priority to develop the corps of modern managers 

skilled in the complex—and essential—task of building links and reaching out beyond the public sector to whomever can serve the interests of the taxpayer. 

And public and private sector managers need to be able to speak out early if we 

think we’re getting off track—or if there’s a better track, a newer technology or a 

better solution. So we get to where we need to go—where taxpayers of this country 

want us to go—and in order to ensure that we get there together.

Thank you. I look forward to your questions.

Mr. ROGERS. I thank all of you for your statements. And I will 

lead off with the questions. 

First, I just want everybody to know, I am just struck by how 

much money has been abused in this particular instance. And it is 

not just what you would typically expect in federal spending 

abuses. 

This is adversely affecting the security of our nation. And that 

makes it particularly offensive to me. 

But I want to start my questions with Mr. Gallay. 

You used the word that your review revealed ‘‘chronic inattention.’’ And I am still trying to get my hands around how this $2 

million contract was issued. Was it bid? Do you have any documents about how Border Patrol decided IMC would get the contract? 

And then somehow, they got $44 million worth of add-ons in the 

first year. And then your statement was, ‘‘After $44 million, none 

of the sites had a functional RVS system.’’ And then they were 

given a $250 million extension. 

How did that happen? 

Mr. GALLAY. I wish there was a simple answer. 

Mr. ROGERS. Did your audit reveal anything? 

Mr. GALLAY. Going back to the initial procurement, there was an 

individual task order during 1999, there was one or two on the 

order of $1 or $2 million. We had sought the records of—the details 

of—that initial competition. We never did actually get those. We do 

not doubt that there was some degree of competition or we know 

that proposals were submitted and that there was a review by the 

Border Patrol of those proposals. 

But it was not a full and open competition at the point at which 

this individual task order was expanded to a blanket purchase 

agreement; that is the point at which the requirements really dramatically changed. 

Mr. ROGERS. Was there a paper trail as to how that occurred, 

how they arrived at one provider? 

Mr. GALLAY. There is a paper trail with respect to the blanket 

purchase agreement, but the real issue was that there should have 

been full and open competition at that point and there was not. 

The underlying notion was to say: since IMC had a schedule contact, that would be a device under which competition would not ordinarily be required. 

Once you put in place the blanket purchase agreement, all future 

orders under that BPA do not require further competition. And 

that was really the problem. It is at that point at which the requirement really ballooned into a nationwide program that had a 

value of over $250 million, that was not in keeping with the scope 

of the original order, and that is where there should have been 
26

competition. The original proposals really related to just that $1 

million or $2 million task order. 

Mr. ROGERS. But in your audit, you did not find any restraint or 

barriers outside which they could not have gone? I mean, they went 

from $2 million to $250 million. Could they have been $1 billion? 

Mr. GALLAY. Well, the limitation would have been that with respect to the BPA. To the extent that it could have been extended 

or renewed, you are correct. 

Mr. ROGERS. You also mentioned that they were shoehorning 

monies that apparently were meant for purchase of commodities 

like cameras and such into construction. Is that lawful? 

Mr. GALLAY. It is certainly not good procurement practice. This 

again goes back to the nature of the contract that IMC had, which 

was for equipment, some IT services and repairs. 

The underlying notion of using the BPA was to say, okay, well 

we can stay with this one vendor and use them for the full range 

of services that are needed. That was really the essence of our finding, that this was not proper procurement. 

At the point at which you knew your requirements really extended to this full range of other services, it was not appropriate. 

It was not lawful under the federal acquisition regulations to stay 

with that single vehicle for this purpose, when in fact you were 

really talking about a whole wide range of purposes. 

Mr. ROGERS. But in that response, you did say it was not lawful. 

Mr. GALLAY. That is correct. 

Mr. ROGERS. In your opinion? 

Mr. GALLAY. In terms of violation of federal acquisition regulations. 

Mr. ROGERS. Great. 

Who was supervising this? Or was anybody? I notice you made 

reference to your office and you also made reference to the FTS. 

Mr. GALLAY. The FTS, Federal Technology Service, which is part 

of GSA. 

Mr. ROGERS. Right. 

Mr. GALLAY. Well, yes. The BPA did go through a process. It was 

handled out of the Chicago region and then was presented for approval up through the chains back at FTS headquarters. 

So it is not like this was done, you know, in some sort of midnight, behind-the-scenes scenario. 

Mr. ROGERS. So the people supervising this project seemed okay. 

Mr. GALLAY. The RVS project, the Border Patrol efforts, did not 

occur in isolation. The real essence of our findings, in terms of our 

overall review, was that these kinds of problems were occurring 

with respect to FTS contracting activities across the board. 

Something like 85 percent of their activities involve DOD. The 

reasons were many. Chiefly, probably the culture in which there 

was a great emphasis placed on growing the business. GSA and 

FTS are dependent on the fees they earn from contracting agencies 

or from client agencies. 

And also, a desire to work with the client, do whatever the client 

wished. Doing whatever the client wished became more important 

than complying with federal acquisition regulations and good procurement practices. 

Mr. ROGERS. And the law. 
27

Mr. GALLAY. Well, that is correct. 

Mr. ROGERS. My time is up. I now yield to my friend and colleague from Florida, Mr. Meek, for any questions he may have. 

Mr. MEEK. Thank you, Mr. Chairman. And once again, I would 

just like to say I am glad that we are having this hearing. 

Mr. Gallay, I want to ask you just one more question as it relates 

to your findings. How long have you been in the business of being 

an inspector general? 

Mr. GALLAY. A good long while. I have been with the IG’s office 

since 1979 and have also been a federal prosecutor. 

Mr. MEEK. So you have seen a lot. Where does this case, this report that you all have generated as it relates to the practices that 

took place in this area, where does it rank as it relates to decisions 

that should have been made that were not made and also to waste 

of taxpayers’ dollars? 

Mr. GALLAY. It is certainly up there among the headline problems we have seen. Again, because it goes to something that is a 

critical program; that is the reason you are having this hearing. 

Mr. MEEK. Critical program, I am pretty sure. Also, I guess, 

would you believe, of a waste of the taxpayers’ dollars in many 

cases, as it relates to accountability? 

Mr. GALLAY. I am sorry? 

Mr. MEEK. As it relates to accountability from the department? 

And also, I guess, some responsibility by those individuals, those 

contractors, that are receiving money, I would assume. I am not 

putting words in your mouth, but I am just asking the question: 

a waste of the taxpayers’ dollars. 

Mr. GALLAY. That is correct. 

Mr. MEEK. Okay. 

Mr. Saponaro? 

Mr. SAPONARO. Saponaro. 

Mr. MEEK. Saponaro. I am sorry, sir. I am very sorry. 

Your company acquired the original awardee of the contract. Am 

I correct? 

Mr. SAPONARO. Yes. 

Mr. MEEK. You all deal in a number of federal contracts. Is that 

an accurate statement? 

Mr. SAPONARO. Yes. 

Mr. MEEK. Under House rules, there is a disclosure form. You all 

have quite a few federal contracts. There is the Air Force, the Department of Defense, with General Administration. How many different contracts do you all have ongoing with the federal government? 

Mr. SAPONARO. I think L–3 as a company and current revenue 

is about $8 billion in annual size. So I think we have thousands 

of contracts with both the DOD agencies, other international agencies, as well as Homeland Security. 

Mr. MEEK. I am looking here and there is like a page-and-a-half 

of federal contracts that you all have. And especially when it comes 

down to this $200-plus million that we are dealing with here, I 

mean, that is a pretty big one. 

Is that the largest one? 

Mr. SAPONARO. No, it is not. 

Mr. MEEK. Okay. 
28

I noticed that you said something in your testimony that you all 

had some issues with some of the inspector general’s findings. You 

wanted to be able to respond to some of it but did not have the opportunity to do so. 

Where do you lie blame here as it relates to this? And were there 

some mismanagement within your company? Or was there mismanagement in the Department of Homeland Security? Were you 

all misled? 

Probably you can answer some of the blatant questions that are 

here, of how the contract continued from what the inspector general said, cameras that were bought at a cheaper rate than what 

the government was actually billed. I mean, how do we explain 

some of those things? 

I was looking in your testimony and I did not quite see it. But 

I do appreciate the fact that you are here. 

Mr. SAPONARO. Yes. And I appreciate the opportunity to address 

some of those issues, particularly ones raised in the IG report. 

As far as the camera substitution issue, we delivered essentially 

what the Border Patrol requested. Early on, in the 1999 period, 

prior to 2000, it was in fact a time and materials contract. And 

Border Patrol sectors would, in fact, select cameras that they felt 

were best for that sector. 

The GSA would approve it. And we would in fact purchase it and 

deliver it, as requested by the Border Patrol, and in fact bill them 

in accordance with what the costs were for that camera. 

Subsequent to the BPA, which was more of a fixed price arrangement on the contract, they had a selection of at least two different 

cameras with two different types of options on each camera. And 

again, I think we delivered pretty much what the Border Patrol requested. 

There was a site plan created. They could change within this 

framework of what was on the BPA, as he suggested, and either 

pick a flare type or an ISAP camera. They could add a 2X extender 

to get improved visibility or not. 

And whatever they chose, we actually got that approved by the 

GSA and then delivered that particular camera and, in fact, billed 

them in accordance with what the costs of those cameras were. So 

the interpretation, as we understand it, made that there was a single type of camera at a single price for all these installations made 

within the IG report is absolutely not correct with respect to the 

way the contract was executed. 

Mr. MEEK. Okay. 

Mr. MILLER. Mr. Meek, would you mind if I amplified a little bit 

on what Mr. Saponaro said? 

Mr. MEEK. I guarantee you, if I get an opportunity to ask another question, I will ask the question to you directly. I am on the 

negative side of my time and there are some other members here. 

Mr. SAPONARO. There were a couple of other things. I think the 

other point—and I think it is a significant one—raised in the report 

that there was something like $20 million spent for sites over the 

U.S. that were not delivered and the government was billed. The 

fact is that, at the time the IG made its visit, as he indicated somewhere in the summer, there were eight particular task orders on 

the contract that involved several sites around the country. 
29

Mr. MEEK. Well, let me, before you get into that, there are several other members who need to ask questions. I am pretty sure 

that you are going probably be the flavor of the day, so you will 

have an opportunity to answer those questions. 

[Laughter.] 

Mr. SAPONARO. Okay. 

Mr. MEEK. Mr. Gallay, I have a couple more questions for you 

if I get another round to ask additional questions. 

Mr. Chairman, thank you. 

Mr. ROGERS. Thank you. 

The chair now recognizes the gentleman from Georgia, Mr. Linder. 

Mr. LINDER. Mr. Gallay, did anyone lose their job over this? 

Mr. GALLAY. There are actually some proposed removal actions 

underway now. 

Mr. LINDER. There was something that was criminal. 

Mr. GALLAY. I am sorry? 

Mr. LINDER. Is anything being pursued as criminal? 

Mr. GALLAY. We have an open investigation at the present time. 

Mr. LINDER. Who is ‘‘we’’? 

Mr. GALLAY. Our office, the Office of Inspector General at GSA. 

Mr. LINDER. Do you expect that to occur? 

Mr. GALLAY. It would really be inappropriate for me to say anything other than that we have an open investigation. 

Mr. LINDER. You said these were just essentially commodities. 

Mr. GALLAY. No, the nature of the work was certainly well beyond commodities. It was construction, installation of equipment 

and associated services. 

Mr. LINDER. That was not completed. That was not completed, 

construction and installation? 

Mr. GALLAY. Well, no. At many sites, construction was done. But 

at the eight sites we visited, the reference that was just made, in 

the summer of 2004, at none of those sites was the installation 

complete. And that was after having spent $20 million identified as 

to each of those sites. That was the total spent with respect to 

those sites. 

Mr. LINDER. Mr. Saponaro, you said, ‘‘We delivered what was ordered.’’

Mr. SAPONARO. As far as the cameras, yes, sir. 

Mr. LINDER. But you did not install them. 

Mr. SAPONARO. I am sorry? 

Mr. LINDER. You did not install them? 

Mr. SAPONARO. No, I was just about to comment on these eight 

specific sites that were being mentioned here. It was visited in the 

summertime. And the contract actually was ended on the 30th of 

September, 2004. And at that time, four of those eight were completely installed and completely operational, as they are today. 

The other four sites that were not completed were strictly not 

completed because of the requirements for the government, meaning the Border Patrol had to provide environmental clearances and 

land accesses before we could complete the installation at these 

other four sites. And in fact, those sites were not completed. 

But in anticipation of that happening, because we ordered cameras and ordered a number of other things to go in those four sites, 
30

assuming they would be approved, and the government was only 

billed for the equipment and cost that we bore to get that partially 

completed site. So we completed four. The four that were 

uncompleted, we only billed the government for what our costs 

were on those programs. 

Mr. LINDER. When you purchased IMC, was it a stock sale or an 

asset sale? 

Mr. SAPONARO. I believe it was a stock sale, although I am not 

sure actually. 

Mr. LINDER. So you all also purchased their liability? 

Mr. SAPONARO. Yes, sir. 

Mr. LINDER. Is there any investigation going on in your company 

about escalating a $2 million contract to $250 million without any 

bid? 

Mr. SAPONARO. I think we had several things, when we got involved and it started to appreciate. 

Mr. LINDER. My question was is your company investigating how 

a $2 million single contract escalated to $250 million? 

Mr. SAPONARO. No, not to my knowledge. 

Mr. LINDER. Do you think you ought to do that? 

Mr. SAPONARO. I think it may be good to look into that. We have 

not been focused on that. We have been focused on some of these 

other issues. 

Mr. LINDER. So you are an $8 billion company? Is that L–3 Communications? Or is that L–3 Government Services? 

Mr. SAPONARO. L–3 Communications is $8 billion; Government 

Services Company is $400 million. 

Mr. LINDER. And about more than half of that was the contract 

for the border. 

Mr. SAPONARO. No, those are annual revenue numbers. I would 

say, just to correct the record on the numbers, there may have been 

a contract awarded at $250 million. I am actually not sure of that. 

I am sure that $150 million were task-funded on this contract. 

And I am also sure that we only invoiced something like about 

$100 million or $110. 

So there is some $40 million to $50 million, as far as I know, still 

sitting in GSA. And there may be in fact more appropriations. 

Mr. LINDER. Mr. Gallay, are you sure that it was a $250 million 

operation. 

Mr. GALLAY. Absolutely. Well, the value of the BPA was $257 

million. Absolutely. 

Mr. LINDER. Is there $50 million laying around at GSA? Mr. 

Saponaro said that there might be $50 million; he did not know 

where it is. 

Mr. GALLAY. I do not know the answer to that. The total obligations, there were orders placed against the BPA. There were also 

orders outside the BPA. And I believe the total obligations that 

have gone through FTS are on the order of $200 million. 

Mr. LINDER. Thank you. 

Mr. ROGERS. The gentleman yields back. 

The Chair now recognizes the Ranking Member of the full committee, Mr. Thompson, from Mississippi. 

Mr. THOMPSON. Thank you very much. 
31

Mr. Gallay, can you, without any hesitation or reservation, say 

to this committee that proper procurement procedures were not followed? 

Mr. GALLAY. Absolutely. That is correct. They were not followed. 

Mr. THOMPSON. Can you say to us that those procedures presently exist within procurement practices within the federal government? 

Mr. GALLAY. That standards exist? 

Mr. THOMPSON. The standards. 

Mr. GALLAY. Absolutely. 

Mr. THOMPSON. Did you look at whether or not the individuals 

that Mr. Linder referred to had the proper training to administer 

those standards that existed? 

Mr. GALLAY. Did we look at that? I am sorry. 

Mr. THOMPSON. Did you look at the people who have been disciplined to see whether or not the standards that you were talking 

about, that they had received the training or anything? 

Mr. GALLAY. That was not within the scope of our review. However, I did reference the Get It Right program. One important element of that, in addition to making it very clear as a matter of first 

principle that procurement regulations should be complied with, 

one element though was also to emphasize training, to look to the 

procurement workforce and ensure that greater attention is paid to 

proper training. 

Mr. THOMPSON. Now the sole source contract that raises most of 

the committee’s concern here today, is it your opinion that that 

contract should not have been sole source? 

Mr. GALLAY. Absolutely. 

Mr. THOMPSON. That there are other people in the marketplace 

who, if they were given an opportunity to competitively bid on that 

contract, they would have? 

Mr. GALLAY. Yes, sir. The fundamental principle of government 

contracting is that there should be open competition. And that can 

occur in a variety of ways. 

The device of the BPA in this case, in a situation where the nature of the procurement was so substantially transformed and so 

far exceeded the nature of the existing schedule contract that IMC 

held, absolutely required under proper procedures that there 

should have been open competition. 

Mr. THOMPSON. Mr. Saponaro, you indicated that L–3 was not allowed to comment on the report. And I want to make sure that we 

get the language correct. We have some comments to an audit by 

GSA that your company has made and a second response to that. 

Mr. SAPONARO. The question, I think, my comments really were 

that more typically our experience that IG was in our offices, did 

do their audit. They audited five of GSA. And more typically, with 

such serious findings, there would be some opportunity for GSA to 

get that report or share that report before it is published so that 

we can at least comment on whether we think the validity of the 

data is correct. And we never got that opportunity to do that. 

Mr. THOMPSON. Did you request it? 

Mr. SAPONARO. We did not know the report was being generated. 

No, sir. We did not. 
32

But typically, we would see that, with such accusations being 

made in the report. The first time we saw a copy, a piece of the 

report, was 2 weeks before it was released to the press in the end 

of December 2004. 

Mr. THOMPSON. Thank you. 

Mr. Gallay, you heard what was just said. Do you agree with 

that? 

Mr. GALLAY. It would not be typical for us to provide a copy of 

the report to a contractor. This was an internal audit report. In the 

process of preparing it, we did provide copies to the management 

officials at FTS to get their input back. And they were taken into 

account in the issuance of our final report. 

And we stand by our findings. It would not have been typical for 

an outside contractor to get a copy of this report prior to its being 

finalized. 

And I would note, we are also aware of the response that they 

have provided. And we will not go into details at this time, but we 

also stand by our findings with respect to that. If the committee 

wishes to explore some of the issues on the cameras, we could address those as well. 

Mr. THOMPSON. There is another concern I have about the contract. It appears that some aspects of this contract went beyond the 

scope of installation and maintenance and that, to some degree, the 

equipment was stored somewhere and we, in turn, were paying to 

have it stored, the same people that installed it. 

In other words, there were a number of entities receiving payment. But from what we saw, they were one and the same. Is that 

your recollection of some of the storage facilities? 

Mr. GALLAY. I do not know specifically the reference to the storage facilities. Certainly, there were materials that were delivered 

to sites and were—that would be the situation in Naco, Arizona. It 

was just lying out on the desert and also in storage adjacent to the 

property. 

There may have been payments made in connection with that 

storage. I do not recall specifically about that. I could get you that 

information. 

Mr. THOMPSON. That is the one I have recollection myself. And 

at some point, I am sure, maybe the second round of questions, we 

could get to it. 

Mr. GALLAY. Yes, sir. 

Mr. ROGERS. The gentleman yields back. 

The Chair now recognizes the gentleman from Washington, Mr. 

Reichert, for any questions he may have. 

Mr. REICHERT. Thank you, Mr. Chairman. 

My question will go to all the members that wish to answer. The 

memo that we got, we received prior to this hearing, states that 

only 2 to 4 percent of the border and $200 million paid for work 

that was poor, incomplete or never delivered. 

And what I was pleased to hear is that there is an investigation 

being conducted. Whether criminal or some internal misconduct, 

there certainly needs to be an investigation conducted on behalf of 

the American people to find out really what happened. 

More importantly, we need to look toward the future because the 

whole issue here is protecting our country and our nation’s borders. 
33

And looking through your testimony for this hearing, I am appalled 

to hear about the gross mismanagement of federal taxpayer dollars. 

In a post–September 11th world, it is unacceptable for the Department of Homeland Security to waste this kind of money—hundreds of millions of dollars. 

My district in Washington State is right next to the Canadian 

border. And part of the report certainly refers to Blaine, Washington. 

And we have learned from Al-Qa‘ida and other terrorist groups 

that they continually look for ways to exploit the Canadian border 

and our vulnerabilities there. As many of you know, the so-called 

Millennium Bomber, Ahmed Ressam, was apprehended there in 

1999. 

The bottom line for me is this: we talked a little bit about it and 

I heard some comments about things that we need to do in the future—close government and business partnerships and modern 

managers. And new technology and we have to focus on achieving 

the mission and look for the best talent and be flexible in how we 

approach these projects. 

These are all things that we have known. These are commonsense things that all of us should know when approaching any kind 

of project in our daily work. These are things that we all do. 

I want to know how this sort of thing can be specifically prevented from happening in the future. 

Mr. GALLAY. Well, I think the essentials, as I mentioned earlier, 

are nothing new under the sun. It is adherence to some just basic 

elements of good contracting practices: acquisition planning beforehand, early identification what the requirements are; stick to the 

principles that are well established, of having competition when it 

is called for; and attentive and effective contract administration. 

There does have to be a partnership between the government 

and the contracting community. And going forward, we are increasingly relying on contractors to do the government’s business. 

The government has responsibilities and contactors have responsibilities. And if people are not diligent about paying attention to 

those responsibilities, we are going to be back here at another 

hearing. 

Mr. REICHERT. I guess I am really puzzled. I was the sheriff of 

Seattle just up until January 3 of this year. I had 1,100 employees. 

And there is a ranking structure. There is accountability. There is 

responsibility, a supervisory responsibility. 

Where did that all fall apart? What happened to the accountability piece and people being held responsible and the line of supervision? 

Mr. PELLEGRINO. In this new environment where speed and the 

dependency on suppliers that are outside of the government in 

order to achieve these more complex missions, you have to recognize that the traditional hierarchal approaches sometimes just simply do not work in this new world where you have to be able to 

manage as well horizontally, not just up and down. 

And in that environment, looking at not only the issues related 

to contract compliance, which both industry and government, everyone would agree at the beginning of these programs that compli-
34

ance is not optional, that it is mandatory and it is essential to 

being effective in serving the federal government. 

However, as good people intend to go down the path together and 

try to get something accomplished, if they in this particular program had achieved what they originally set out to, it would be an 

example that we would all call creative, an accomplishment. And 

we would not be having a hearing focused on some of the issues 

because when good things get done, we tend to say that we were 

creative; we did a good job; we did it quickly; we saved money. 

But in an environment where the mission is moving faster than 

the pace of the government to keep up from a contracting perspective, we are depending on new approaches moving forward. If you 

look at NASA, for example, NASA contracts 80 percent of its budget. It is a recognition that, in a high-tech world, the dependency on 

suppliers and a partnership with industry and changing the management approaches to manage the network of organizations that 

are necessary to support a mission is a new skill. 

We have to be able to teach that new skill. We have to have contracting be able to be responsive to rapidly changing priorities, 

moving ahead. And that is going to require us to continue to invest 

in the development of these new modern managers. 

Now DHS is taking this issue seriously. And the new secretary 

and the deputy secretary are focused on strengthening the program 

management capabilities—not just the project management, the 

program management capabilities—by certifying more and more 

program managers through the Program Management Institute. 

So there are measures that are being taken. They are essential 

to build that new workforce. It does not exist today, although I do 

agree it is common sense when you look back at a program that 

has failed to achieve its objective. 

Mr. ROGERS. The gentleman yields back. 

The Chair now recognizes the gentlelady from Texas, Ms. Jackson-Lee. 

Ms. JACKSON-LEE. I thank the chair and the ranking member 

and the ranking member of the full committee for this hearing. 

And I was not a sheriff, but I was a lawyer and a former associate 

judge in local government. And I am equally concerned, as my 

friend is. 

So I think this is truly a bipartisan crisis because it deals with 

the utilization of public dollars, but more importantly, in one of the 

most trusted or areas that needs the greatest trust of the American 

people, and that is their security. 

So I hope that we will not have another hearing and we have an 

empty chair, which I assume is next to the last speaker here, sort 

of a very glaring empty space of the Department of Homeland Security. 

And I hope that we will have the Homeland Security representative face this committee, Mr. Chairman, Ranking Member, as you 

so eloquently stated, so that we can restore the trust, but also be 

a part of helping to secure the American people. It is a great disappointment to me. 

I am one of the border states. And when we do not get it right, 

not that we face any more danger than anyone else, but that we 

are constantly at risk because we are certainly a border that faces 
35

or has a greater opportunity for individuals to pass over that line 

into the United States illegally. 

I am interested in where the problem lies. We know that Border 

Patrol agents and law enforcement officers are trained in the basic 

skills of law enforcement. And we know now law enforcement has 

encompassed new technology. 

DNA, for example, for those who are on the prosecution side and 

ultimately the trying of cases, DNA has become a new technological 

tool. And we know that there are a lot of equipment that we have 

been arguing about here in Washington, banging the gavel and the 

table, saying, ‘‘Let’s get the technology out there. Let’s get scanners 

out there. Let’s put these things in the hands of the persons who 

are engaged in law enforcement.’’

So I am trying to track down, Mr. Gallay and Mr. Saponaro—is 

it Saponaro? Is that correct? 

Mr. SAPONARO. Yes, it is. Thank you. 

Ms. JACKSON-LEE. Trying to track down where the problems lie. 

If I could get Mr. Gallay to tell me whether or not we need, when 

you talk about the Border Patrol and their failure to have any attention to this RSV security improvement, chronic inattention, I 

note in your testimony, which leads of course to chronic mismanagement and chronic failure of the use of federal funds. 

Tell me the crux of the problem. Is it law enforcement people 

who are more skilled at their tasks of being at the border or arrests? Is it that there is no institutional structure, there is no procurement process, there is no paperwork that came down from the 

Department of Homeland Security when it merged? 

Border Patrol has no internal mechanism? What is the problem 

that would allow the wrong equipment or the wrong processes to 

be utilized and thereby diminish our security? 

Mr. GALLAY. I think there were enough problems to go around. 

Everyone that participated in this program bears a share of the responsibility for the fact that it did not work as it should have. 

Certainly GSA and the contracting arm did not do what it should 

have in terms of supporting the Border Patrol and providing the 

right kind of contract vehicle—competition—and failed to provide 

the right kind of contract administration support. The Border Patrol itself did not pay sufficient attention to what was being provided to it by the contractor. And there were significant failings on 

the part of the contractors on performance. 

So everybody had a seat at this table. 

Ms. JACKSON-LEE. So this committee has a responsibility. Let me 

just go quickly to Mr. Saponaro. Can you provide this committee 

with a complete list of the prices for the components of the RVS 

sites and the costs of these component parts to IMC? 

And let me add this one. Can you provide this committee with 

substantial records explaining why IMC was awarded such a large 

government contract over another equally or more qualified company? 

Mr. SAPONARO. With respect to the first thing you asked, yes we 

can. And I think, to some extent, some of the data we have supplied already does do that. But I think we can supply a complete 

auditing of our price list and what we charged for each of the sites 

that exist. 
36

Ms. JACKSON-LEE. I would appreciate a freestanding answer on 

that. 

Mr. SAPONARO. Okay. On the second point, I am not sure we can 

provide that. I think it was pointed out here earlier that we should 

obviously take a look and do our own investigation of how this happened, to be awarded a larger contract from the initial. 

We have not done that, to my knowledge. I would point out, however, that the selection of the contract is not really done by the contractor, meaning IMC or L–3 or any other contractor. It is done by 

the government. 

They pick the contract appropriate to perform the work. And in 

this case, it is absolutely clear that the contract selected was not 

adequate to really perform this work. 

Many of the non–IT-related construction activities pointed to by 

the IG audit report could not be done under the IT Schedule 70 

contract. And as a result, I mean, that was the biggest failing in 

the selection of the contract because this work—to install sensors, 

et cetera, along the border—does in fact require that kind of work 

to be done. 

I think, as far as some of the other things that were mentioned 

here, we are aware of the Blaine, Washington thing. We did find 

out there was problems there in the summertime. L–3 actually 

stepped up on its own and completely fixed that system so it is 

operational today. 

And in fact, I would make a recommendation that either the 

committee or its staff or some members of the committee actually 

go out to look at some of these sites and see how they really work. 

They have been very effective in a lot of the places in Texas that 

I think the agents used them successfully in performing their work. 

There is no doubt that I think that whatever ASI does going forward in the application of technology will require, I think some 

training and involvement with the agents in the field to make sure 

they can utilize effectively this technology they get, whatever it is, 

because I think they are the key. 

The key point here is to provide them information in a rapid and 

timely fashion so they can better do their job. And they ought to 

be part of the process of requirements, as I said in my testimony 

earlier. 

Ms. JACKSON-LEE. Mr. Chairman, I appreciate his kind offer. My 

understanding is there has been information associated with the 

audit, but not a complete itemized list. If we can take Mr. 

Saponaro up on his offer to provide us with a complete itemized 

listing of the prices and the additional records that he may have, 

that would be helpful to the committee. 

Mr. SAPONARO. We definitely will. 

Ms. JACKSON-LEE. Thank you very much. 

Mr. ROGERS. The gentlelady yields back. 

Ms. JACKSON-LEE. I yield back. 

Mr. ROGERS. And I would offer, let you know that I talked with 

the Ranking Member. We have every intention of going out and inspecting, as a committee, these sites where they are working and 

where they are not working. 

But we will have to schedule that a little bit later. 
37

Right now, the Chair recognizes the gentleman from Texas, Mr. 

McCaul, for any questions he may have. 

Mr. MCCAUL. Thanks, Mr. Chairman. I think the issue for this 

hearing is accountability or lack thereof. But what is most disturbing to me is not the $2 million—which it was and we do not 

know what we got for the $2 million—not that the taxpayers, in 

my view, got ripped off, but that it impacts our national security. 

This has a direct impact on our national security. I am interested 

in this investigation. 

Mr. Gallay, you mentioned improper procurement procedures involved with the contract, used the word ‘‘unlawful,’’ I believe, at 

one point in your testimony. I am a former federal prosecutor like 

you. I worked on counterterrorism investigations. I also worked in 

the Public Integrity Section in Washington. 

And I understand you cannot comment on the nature of the investigation. But tell me, who is conducting the investigation? 

Mr. GALLAY. We have an investigation underway ourselves, the 

Office of Inspector General of GSA. In the course of that investigation, we are also coordinating with other cognizant law enforcement agencies. 

That would include the Inspector General’s Office at DHS and 

the FBI. 

Mr. MCCAUL. So the FBI is investigating this matter currently? 

Mr. GALLAY. It would be more accurate just to say that we are 

conducting an investigation and we have coordinated with them. 

Mr. MCCAUL. Okay. Is anyone from the United States Attorney’s 

Office or with Public Integrity looking into this? 

Mr. GALLAY. I really would not want to get into any further details about the nature of the investigation other than just to say 

it is ongoing. 

Mr. MCCAUL. Do you know how many individuals are under investigation? 

Mr. GALLAY. It would not be appropriate for me to get into any 

specifics with respect to that. I would be happy to do it in executive 

session. 

Mr. MCCAUL. I think perhaps we should do that. 

The second half of my question relates to, we spent $200 million. 

I do not know what we got for that. And now we are proposing $2 

billion to expand. 

And that obviously gives us some pause, given the lack of performance of this contract; 2 to 4 percent of the border was covered 

with the $200 million. I think 6,000 miles will be covered under the 

$2 billion contract. 

Can any of you tell us, first of all, what did we get for the $200 

million contract? And how are we going to do better with the $2 

billion? And what is that going to provide? 

Mr. SAPONARO. If I could? First of all, just to correct the record, 

from our record on the Remote Video Surveillance System, we have 

installed 246 sites at various locations, which we could provide you 

a complete list. That 246 sites cost the government $100 million, 

not $200 million. I just want to pound away on that because our 

records, that is what we have actually invoiced GSA that much 

money, not $200 million. So that is the record. 
38

I think of the 246 sites, all of them are at least operational or 

being maintained to be operational, as I stated earlier. There were 

several that were not completed at the end of the contract, which 

was not continued, primarily due to the problems associated with 

getting environmental assessments completed or land leases or 

things that had to be done so that work could be installed on the 

border. And in fact, if those things were completed, that equipment 

could in fact be installed on a going-forward basis. 

Again, all of this investment made on RVS in its current capacity 

can, in fact, be integrated in the future ASI program. So it is not 

an investment that went down the drain. In some respects, it can 

be integrated. 

And in fact, any kind of ASI program should have a pretty sophisticated integration of technology and a refresh of that technology in the future over the lifecycle of that for such a large program. So you spent $100 million and you got 246 sites installed on 

the border, many of it being used successfully by Border Patrol 

agents today. 

Mr. MCCAUL. Is this mostly cameras on poles and surveillance? 

Mr. SAPONARO. Yes. The RVS program was, as opposed to the 

ASI broader program, was principally to mount poles in the ground 

and then some series of either 10 or more cameras on those poles 

focused on some section of the border. And they would cover different geographic ranges. And that way, that information would 

then be communicated back to a control center where they could 

view the information coming from the video cameras into the control station. 

That is all the RVS program was. There are other sensors and 

things that the Border Patrol has experimented with—remote vehicles and other types of sensors. But they were not part of the RVS 

program but, in fact, will be part—I think—of an ASI program that 

perhaps should use a multiplicity of different technologies because 

each of these sections of the geography of the U.S. border are different, requiring different kinds of systems to really handle the 

surveillance of those kind of borders. 

Mr. MCCAUL. And lastly, Mr. Chairman, if I could just—I noticed 

that 6,000 of the border. 

Mr. SAPONARO. Yes. 

Mr. MCCAUL. I, too, am from Texas. It is a border state. How 

much of that 6,000, what percentage of the southwest border, 

where we have the major influx of illegal immigration, which poses 

a threat to our national security, how much of that will be on the 

southwest border? 

Mr. SAPONARO. I do not know the exact answer to that question 

off the top of my head. But I certainly would be prepared to get 

exactly how many miles of coverage we have in both Texas and Arizona. We have perhaps the majority of these installations are on 

the southern border. 

And I could get that number. And we could supply it with this 

information requested into the record from our version. 

Certainly, I am sure the Border Patrol or Customs and Border 

Patrol has perhaps the answer at the tip of their fingers. I just do 

not have it. 

Mr. MCCAUL. Thank you, Mr. Chairman. 
39

Mr. ROGERS. The gentleman yields back. The Chair now would 

like to begin a second round of questions. 

Mr. Saponaro, you just made a clarification and said that your 

company had billed $100 million. 

Mr. SAPONARO. That is correct. 

Mr. ROGERS. For 246 camera sites—246, 247? I heard both numbers. I do not know which. 

Mr. SAPONARO. Yes, that is correct. 

Mr. ROGERS. And describe for me actually what that site is. 

What would be at the typical site? 

Mr. SAPONARO. A typical site would be an area of the border 

where we mount a pole—a 60-foot pole, as you indicated, in the 

ground and then mount on the pole upwards of—anywhere from 

seven to 10 cameras, depending on the geography of that section 

of the border. 

Mr. ROGERS. So each side will have how many poles? 

Mr. SAPONARO. Well, it depends on the geography of the site. 

Mr. ROGERS. Okay. 

Mr. SAPONARO. What we were just talking about is there are four 

cameras on any individual pole. 

Mr. ROGERS. Okay. 

Mr. SAPONARO. Okay? And then that information is then transmitted back to a control tower and that either could be directly, depending on distance to the control tower, or through a relay communication device. 

Mr. ROGERS. Are they wired together? Or is it through satellite 

signals that they communicate? 

Mr. SAPONARO. They are radio transmitted back really to the 

control. 

Mr. ROGERS. Okay. The cameras themselves, how much do they 

cost—does each cameras cost? You said you have the kind that 

were requested, not the better kind. 

Mr. SAPONARO. There was a range of cameras at the end of the 

contract. There was, I believe, FLIR cameras were one camera; the 

ISAP camera was another type of camera. A FLIR camera had a 

lens extender feature that could be added to get better vision. 

Mr. ROGERS. So how much would the most expensive camera 

that you had to put on there cost? 

Mr. SAPONARO. I would say $35,000 to $50,000. 

Mr. MILLER. It was actually $48,500 for the FLIR with the extender. 

Mr. ROGERS. Okay. Well, math is not my strong suit. But $100 

million at 246 or 247 sites is over $300,000 per site. I cannot imagine why it would cost over $300,000 to put a 60-foot pole in the 

ground and a $35,000 camera on top of it. What am I missing? 

Mr. SAPONARO. I think that is about the right number, $300,000 

per site, is about the right number of the total cost to do that. 

Mr. MILLER. Mr. Chairman, if I could help clarify? 

Mr. ROGERS. Please do. 

Mr. MILLER. There are four cameras on each pole, two nighttime 

infrared cameras, two of the daytime cameras. The nighttime cameras that the inspector general discussed are the ones that are approximately $48,500. 
40

So you have two on each pole; then the lower priced, daytime 

camera. Then you have microwave transmission equipment as well 

as the cost of installation and other accessories to go along with it, 

a very large pole as well that has to be planted in the ground. 

Mr. ROGERS. Now you just described to me about $150,000 worth of equipment and poles. How do you get the other $150,000 into 

that mix? 

Mr. MILLER. I think when you look at the entirety of what goes 

into that pole, including installation, et cetera, that there is a basis 

for the price. 

Mr. ROGERS. Okay. I would like to have an itemization of that. 

Mr. Gallay, did your audit find that to be an accurate statement? That this roughly $300,000 per site was supported by the actual 

equipment necessitated on that site? 

Mr. GALLAY. Well, certainly the price of the contract line item 

number was on the order of $300,000. I think the real issue is: 

what should it have been? And it goes back to the question that 

was asked before. There have been many installations that are up 

and running around the country. 

The question is: did we get our money’s worth? And the point 

about competition is that that would have been the way to determine what was the appropriate price. 

This procurement vehicle does not provide any great assurance 

as to whether or not that was the appropriate price. 

Mr. ROGERS. Right. We are finding that a lot in this committee, not just on this item. We are being told it costs $190,000 to put 

a Border Patrol officer through a five-month training program, but 

yet you can send your child to Harvard University for a four-year 

degree for $20,000 less than that. And somehow, that makes sense 

to the people that sat at that table that you are sitting at today. 

The last thing I wanted to ask you about was—there was a reference you made earlier to fees being obtained by TRS and somebody else as being a possible cause for some of this—the lax oversight. What did you mean? 

Mr. GALLAY. By FTS? By the Federal Technology Service? 

Mr. ROGERS. Yes. And there is somebody else that you said generated fees. 

Mr. GALLAY. Well, I think what I was saying, what you are referring to, was that one of the underlying causes, we believe, in our 

review of all of the FTS contracting practices in terms of what happened in the environment there, was the fact that they were motivated to get more business and part of that was keeping the client 

happy. 

And that became more of a dominant concern, in some cases, 

than proper adherence to proper federal procurement practices. 

GSA is no longer an appropriated fund agency. And for the most 

part, it operates based on fees generated from its contract activities 

in support of other client agencies in the federal government. 

On the FTS side, Federal Technology Service side, the fees they 

would get for performing these contracts, acquisition and support 

services would range from about 1 to 4 percent. FSS, the Federal 

Supply Service, which operates the schedule contracts, which IMC 

had held, which was the basis for the BPA, had gotten to be about 

1 percent. That is down to .75 percent now on its contracts. 
41

Mr. ROGERS. So these are agencies that would be reviewing the 

process? 

Mr. GALLAY. Well, FTS was the component of GSA that operated, 

that handled this procurement. 

Mr. ROGERS. And they had an economic incentive for it to be a 

larger project. 

Mr. GALLAY. Well, one could look at it that way. That was not 

a specific element of our finding in the report. 

Our point was more directed toward the environment that was 

created in terms of let’s emphasize growing the business, you know, 

let’s keep the client happy. That became the dominant motivator. 

And the net result that we found was a whole range of problems 

in terms of failure to follow proper contracting procedures. 

Mr. ROGERS. My time is up. I appreciate your responses. 

Mr. GALLAY. Thank you, Mr. Chairman. 

Mr. ROGERS. The gentleman from Florida, Mr. Meek. 

Mr. MEEK. Thank you, Mr. Chairman. 

Mr. Saponaro, I want to give you the opportunity—you wanted, 

you and Mr. Miller, wanted to explain a little bit more about what 

you were doing as it relates to cameras. But before that, I just 

want to ask you a question. 

Are there any other inspector general’s reports or anything that 

we need to be aware of that your company happens to have the 

contract on? 

Mr. SAPONARO. Not to my knowledge. We do not have any other 

such—

Mr. MEEK. Not at this time. And I would say that the GSA does 

not have—this is the only issue, this particular contract, that you 

are actually looking into the practices of the company? 

Mr. GALLAY. Of L–3? 

Mr. MEEK. Yes. 

Mr. GALLAY. To my knowledge. I would have to check and let the 

committee know if there are others. 

Mr. MEEK. Okay. I ask that question because I am encouraged 

by the fact that you are here, sir, because you want to set the 

record straight, if the record needs to be set straight. I am concerned by the fact of all the media coverage on this and all of the 

attention on the GSA report and all, that there has not been an 

internal investigation launched yet to find out who did what wrong, 

if something did go wrong, in your opinion. 

I am also concerned that I have already mentioned that the Department of Homeland Security is not here. And believe me, when 

they come, I am pretty sure that there will be more fireworks in 

this committee about what took place. 

But I do this congressional thing every day. And if there is something that is happening the next day that did not happen the days 

that I have been here, then I am going to raise the question. 

So basically, your testimony today is the fact that you did not 

find anything out of the ordinary with this contract until you saw 

the report. It was the first knowledge, I guess, to your level or Mr. 

Miller, that there was an issue. 

Mr. SAPONARO. I think it is accurate to say that, as I mentioned 

in the opening remarks, IMC had this contract. We acquired it in 
42

the year 2002, the end of 2002. It ran in a separate sort of company 

within L–3. 

And by the time we looked at it in mid–2003 and began to look 

at the contract and performance and the magnitude of this thing, 

we felt that it would be more appropriate to integrate it into a larger company, GSI, and then to change the management and put 

some of our own management practices in, which were used to handling larger programs. So we actually did that. 

As we got some indications during the execution of the contract 

in 2004 from the GSA people we were dealing with, the question 

asked me earlier was did we do our own investigation of the award 

going from $2 million to $250 million. We did not do that, but we 

did look deeply into the way we were performing the program during 2004 and took every step we really did do to improve the performance of the contract to L–3 standards. 

As I mentioned in my opening remarks, L–3 has a very, very 

strong code of ethics in terms of not only performing contracts to 

the letter of the law, but performing the spirit of the contract. So 

we were on the move, trying to improve our performance. 

At the same time, of course, the IG was completing its audit of 

the—

Mr. MEEK. Mr. Saponaro, let me ask you this question quickly. 

Is there someone still living within the old management team within L–3 now? 

Mr. SAPONARO. No, sir. 

Mr. MEEK. No one? The president, vice president, no one? 

Mr. SAPONARO. No one. 

Mr. MEEK. Okay. So you still have stockholders that were involved in that company? 

Mr. SAPONARO. I am sorry, could you repeat that? 

Mr. MEEK. Was the company publicly traded? 

Mr. SAPONARO. No, it was not. 

Mr. MEEK. Okay. 

Mr. SAPONARO. And one other correction I would make to that. 

We have an employee that works for us now that was an employee 

of IMC. And she continues to manage and very successfully manage a lot of other programs for us. 

Mr. MEEK. Okay. 

Mr. SAPONARO. She is currently an employee. 

Mr. MEEK. Okay, let me ask you a quick question. This is to be 

continued. We are not trying to come in for a landing right now. 

You have an ongoing investigation. There may be others that we 

do not know of at this time that may have an ongoing investigation 

into the practices of not only the department. 

But I also think that there is some responsibility on the side of 

the contactors. I mean, it is encouraging that you are here. I do not 

think it is a bad thing. I think it is a great thing. 

But I think that it is important. I think it has been said here 

10 times over today that we are very concerned about this. 

And for the first time in the history of the Congress that we have 

a Homeland Security standing committee, the mission of this subcommittee is to make sure that the American taxpayers get what 

they deserve—protection and also the accountability. 
43

As it relates to the investigation that you all are conducting 

within GSA, when do you think that will be coming in for a landing? Or you do not know? 

Mr. GALLAY. I really could not say. It would be inappropriate to 

talk in any detail about the investigation. 

Mr. MEEK. Would you be willing to come back before the committee when the department comes back or comes before this committee? 

Mr. GALLAY. Certainly. 

Mr. MEEK. Okay. I think it would be helpful because I believe 

it will be only fair to have your office represented at the same time 

the Department of Homeland Security is before us. They have quite 

a bit of explaining to do as it relates to what is happening. 

I want to ask you the same question. The individuals that were 

over the contract, you said earlier, well there is a process right now 

of evaluating their job status within the department. But they are 

still—do you have knowledge, are they still working for the Department of Homeland Security in the capacity of awarding contracts 

on a sole-source basis? 

Mr. GALLAY. I cannot speak to what is going on at Homeland Security. At GSA, that is what you are asking me about? 

Mr. MEEK. Yeah, GSA. I am sorry. 

Mr. GALLAY. There are some people that were involved who are 

no longer at the agency. There are some people who are still there. 

And as I said, there are actions that are being proposed. And they 

have to work their way through the process. 

Mr. MEEK. Okay. 

Well, Mr. Chairman, I once again just would first of all like to 

thank you and also the chairman and ranking member for continuing to pay attention to this issue. We are not only in this area 

finding questionable practices, but in others. 

So we have to continue to go through this process. And I am 

pretty sure the Department of Defense, especially with the Iraq 

war going on, they are going to have to go through this process too. 

This is hopefully to prevent this from happening again. Not only 

is it bad for the federal government, but it is also bad for the contractors that are involved. 

But I guess the truth will float to the top eventually. And I 

would suggest that your company plays a very close role in this. 

If it is something that you all have not done, you better say it 

quickly because I am pretty sure that someone is going to have to 

answer for something that happened here. 

And I do not know how far it is going to go. But I hope that some 

of the things that have been brought to light can be explained because I know the American people will feel better, because some of 

this stuff is truly hard to believe. 

Thank you. 

Mr. ROGERS. Thank you. 

I prefaced my questions a little while ago about the pole site 

costs by telling you math was not my strong suit. And I have to 

apologize. My math was wrong. It was not $300,000 per site; it was 

$406,000 per site. 

Can you speak to that? 
44

Mr. SAPONARO. Yes, sir. I will try to speak to that. I mean, you 

had some idea of what the equipment costs were, including additionally to the cameras were some radio communications equipment. But the evolution of the sites also involved site planning; 

that is, there had to be some labor involved to do the planning for 

the site, just to get that to the Border Patrol for their approval. 

Some labor involved to supply information to the Army Corps of 

Engineers that handle the environmental assessments and all that 

part of it. There was a number of things involved. 

And it is not only installing these sites, getting power to the sites 

and, I would say, several labor-related activities that supported the 

equipment that you roughly added up. And I think we can and will 

provide you sort of a breakdown of the site in terms of the components and the costs that go with it. 

Mr. ROGERS. I look forward to that. 

Mr. SAPONARO. And we are prepared to stand behind it. 

Mr. ROGERS. I look forward to that. And before I move to the 

next questioner, I did want to revisit one statement you made and 

that was you said you have installed these 246 cameras. 

You said, ‘‘Many are being used today by Border Patrol officers.’’

Mr. SAPONARO. Yes. 

Mr. ROGERS. Not all of them? 

Mr. SAPONARO. I think all of them are being used. 

Mr. ROGERS. When you said many, it made me think that maybe 

some of them were not working. 

Mr. MILLER. I think the qualifier there is because since September 30, 2004, to our knowledge, there has been no maintenance 

of the system as it was installed on that date. These are high-technology cameras. And in particular, a great number of them are 

cooled cameras. 

And there will be failures if they are not maintained. We cannot 

speak to the current status. 

Mr. ROGERS. Thank you very much. 

I now yield to the gentleman from Washington, Mr. Reichert, for 

his second round of questions. 

Mr. REICHERT. Thank you, Mr. Chairman. 

First of all, this will be my last time to talk to you, so I want 

to thank you for being here. I know it is tough to sit in this meeting room and answer these hard questions. But we have that responsibility to the American people and appreciate you being here 

and giving us your honest answers. 

I want to get back to just the responsibility issue that I share 

with my colleague from Florida, that someone will be held responsible and accountable here. And I know we cannot talk about details of the investigation. People in this room recognize that investigation will uncover some misconduct, if not criminal activity. 

You can talk about vertical or horizontal responsibility, poor 

management. You can talk about silos. You can talk about all those 

things that might have prevented certain things from happening, 

how to manage a project within an old and tired system and trying 

to transfer it to a new and more modern system of management. 

But the fact is that checks and balances here, whatever system 

we are talking about, failed. One of the questions that I had, now 
45

as we look to the future, we want to get things done. And we want 

to make sure that we get our money’s worth. 

One of the things that has to happen is the Homeland Security 

Department has to have authority to enter into agreements and 

partnerships with private companies and businesses, partnerships 

and partnerships with them. Do they have that authority now? 

Mr. PELLEGRINO. Just from firsthand experience, both our own 

organization as well as working with many of the leading suppliers, 

as the chairman of their association, supporting the department, 

they do have that authority. They are somewhat under-resourced, 

as the full committee chairman described earlier. 

I think his numbers, in fact, were pretty accurate and on-target 

as of yesterday, in an update that our industry received from the 

chief procurement officer in terms of where they were with resources. Private industry spends 2.5 to 3 percent of their acquisition costs on resources to manage those procurements. 

So 2 to 3 percent of the total cost of what they buy is spent on 

managing the acquisition. Today, if Homeland Security added literally twice as many contracting and procurement officers within 

their organization to run these acquisitions, they would only still 

be at half of the standard industry benchmark. 

Double the current workforce and they would still be at half, 

which would mean that, to achieve the same level of performance 

as the private sector, they would have to work twice as hard. That 

is a very challenging environment. 

And what that will drive, as we enter into a period where more 

and more government workers are also facing retirement over the 

next decade, is a greater dependence on private sector and systems 

integrators in order to achieve some of these very complex programs. So we need to develop that workforce, add those resources. 

I know the department is committed to doing that. And they 

have already begun to make some progress. 

And likewise, industry is stepping up to the plate as well. In fact, 

we have offered, as an industry group, to help facilitate the development of more skills in this new program management area by 

sponsoring some of the training, as well as some of the skills development, working side by side, to ensure that industry and government have comparable skills together to ensure that these types of 

things do not happen. 

Mr. REICHERT. So now that you have described some of the difficulties that the Department of Homeland Security is facing, is it 

realistic to assume that we can complete America’s Shield—6,000 

miles—in 4 years? 

Mr. PELLEGRINO. A program like that faces many challenges, as 

we have heard here. You have a full range of different types of 

skills that have to be brought together in order to address the full 

life cycle. 

We have heard about site development and construction costs 

and putting up holes and wiring cameras. These are all different 

types of skills necessary. 

And so a program like this has to address that entire life cycle 

of capabilities. I am reminded that the city of London a few years 

ago installed over 600 cameras in 174 locations in just 2 years. And 
46

they charge every driver of a vehicle into the center city every day 

for that privilege. 

And such a system being built in such a short period of time had 

a couple of critical elements: one, the mayor itself put his office on 

the line relative to the accomplishment of that very complex program. And he ran a very large program office that represented the 

client side, what we would say. 

In other words, the program office represented the government 

in ensuring that all of the steps that were necessary were performed and competed and that the money was only paid when the 

job was done. That program was successful and it went live and it 

has operated very efficiently ever since it went in place 2 years ago. 

So 2 years, a program that is equally ambitious and complex, 

just in the sense of putting something into a city that is that old, 

with new technology. And we should learn from programs like that, 

in terms of how they accomplished it. 

Mr. REICHERT. So was that a yes? 

Mr. PELLEGRINO. Yeah. 

[Laughter.] 

Mr. REICHERT. Thank you, Mr. Chairman. 

Mr. ROGERS. The Chair now recognizes the gentleman from 

Texas, Mr. McCaul, for any more questions he may have. 

Mr. MCCAUL. Thank you, Mr. Chairman. 

I want to clarify some of the testimony. It is great to have all 

this technology on the border. I am generally supportive if we do 

it right. 

But do we have the personnel to maintain it? Because if we do 

not, it is not of any benefit. I know that may be a little bit out of 

your field, but if you could address that issue, I think. 

Mr. Miller, I know you are counsel, but you seemed to touch on 

that issue. It is an issue that we as a Congress, we fund Border 

Patrol and DHS. And so it is an issue I would like to hear your 

response. 

Mr. SAPONARO. Border Patrol has established a center for operations and maintenance for the existing towers that are there in 

Albuquerque, in Texas. And we had 19 people, in addition to the 

Border Patrol people, helping to maintain that equipment. 

In fact, that was one of the areas where the IG report, in our testimony, that we have clear records of what these people were doing 

exactly in terms of maintenance. I think in the acquisition of ASI, 

the logistical support for the more complicated systems perhaps 

should be in the hands of the prime integrator for some period of 

time, during the warranty period in the first couple of years of the 

system, they have the most to gain to make sure that equipment 

is in fact operating and working successfully, assuming there are 

some metrics or fixed price arrangement. 

But I think currently, we do not know actually the status of the 

maintenance activities that have been done on the RVS equipment 

since September 30 since we have been off the contract. 

Mr. MCCAUL. Do you have an estimate of how many, sort of the 

personnel numbers, what it would require to maintain the Shield 

Initiative? 

Mr. SAPONARO. I do not really know that number. I think it definitely could be estimated. And we have not been privy to, in indus-
47

try, really what the vision and objectives and requirements really 

are for ASI. 

It most likely will involve a multiplicity of technologies that can 

be deployed in different parts of the border, a program that I think 

might evolve over a longer period than the 4 years you mentioned, 

although it is hard to make a judgment on that without seeing 

what the priorities of the program are. 

And as was indicted here earlier, once most prime contractors in 

the industry today, you know, really get up every morning trying 

to figure out how better to work with their customers to provide 

quality services and solution. And we are not getting up every 

morning to figure out how to cause some events that may cause another program to happen. 

So I think the vision, priorities; then I think you could make a 

comment of whether this system can be done in 4 years. That 

seems like a pretty aggressive schedule. 

Mr. MCCAUL. Mr. Gallay, a question regarding your investigation. Did you request documents from Border Patrol as to how this 

contract was awarded? 

Mr. GALLAY. In the context of our audit, yes we did. 

Mr. MCCAUL. Right. 

And was there any compliance with that request? 

Mr. GALLAY. Our requests were made through the FTS contracting officials, which handled the procurement. And I regret to 

say we were not provided with those documents. We never got a 

really satisfactory explanation as to why, as to whether or not they 

were destroyed or could not be located or what. 

We made that request multiple times. We never were provided 

with the documentation. And that is reflected in the formal statement. 

Mr. MCCAUL. So you made several requests to Border Patrol. 

Mr. GALLAY. To FTS, which made the request to the Border Patrol. And during the pendency of our request, we kept being told 

that yes, there is a box of materials relating to the initial RFP and 

the proposals and the awards. And those would be provided; those 

would be provided. 

Suddenly, we were then told they were not available. 

Mr. MCCAUL. And so no documents were produced? 

Mr. GALLAY. Not to us. 

Mr. MCCAUL. Is it typical when you have a contract awarded to 

maintain those records as to how the contract was awarded? 

Mr. GALLAY. Yes, sir. 

Mr. MCCAUL. But in this case, they did not have any documents? 

Mr. GALLAY. None were provided to us. That is not typical. And 

that is most disturbing. 

Mr. MCCAUL. And did they indicate they just did not have any 

documents? Or they just did not want to comply? 

Mr. GALLAY. We did not get a satisfactory explanation as to why 

the documents were not provided to us. 

Mr. MCCAUL. I am very disturbed by that. 

I think that is something, Mr. Chairman, that we should pursue 

on this committee. 
48

Lastly, Mr. Saponaro, I know you sort of acquired a bit of a liability when you bought or acquired IMC. And this may apply to 

Mr. Gallay as well. 

It is my understanding that IMC bought ISAP and that there 

were certain cameras that were specified to be used for the surveillance, but that at some point, the decision was made to substitute 

the more expensive cameras with the cheaper version. And I believe that was in your report. 

Is that accurate? Or could you comment on that? 

Mr. GALLAY. That is correct. Now this is a point on which there 

is some difference between L–3 and our view of events. I will say 

that, in terms of the point we made, the pricing of the proposal, 

which was done by IMC early on, was based for each contract line 

item on a certain array of cameras. And that pricing was based on 

the FLIR cameras at $48,500. There may have been other variations. 

And again, this goes back to the discussion about the government 

needing to work hand-in-hand with contractors. L–3’s point was, 

well, they were free to make some changes in the selection of the 

individual cameras. Our point is, if that was done, that certainly 

should have been, in fairness, reflected in the price. 

Mr. MCCAUL. And did the contractor ever notify GSA of this 

change? 

Mr. GALLAY. We received some indication that the contractor did 

have conversations with the Border Patrol about some of the 

changes and that Border Patrol headquarters may have approved 

them, although one of the issues we found on our field visits was 

the people in the field clearly wanted the higher-end cameras and 

were not satisfied with some of the substitutions that were made. 

Mr. MCCAUL. So the agents in the field wanted the higher-value 

camera. The decision was made at a higher level to go with the 

cheaper? 

Mr. GALLAY. That is essentially correct. And just to follow up on 

your other point, there was not notification to the FTS contracting 

officer about those changes. 

Mr. MCCAUL. Okay. I see my time has expired. Thank you. 

Mr. ROGERS. Thank the gentleman. 

The Chair now recognizes the gentleman from Connecticut, Mr. 

Shays, for any questions he may have. 

Mr. SHAYS. Thank you very much. 

The chairman of the full committee was here earlier and outlined 

this. We would love some answers as to the issue of seven procurement offices, the creation of a chief procurement office, the legacy 

of these 22 departments becoming one. 

Under this issue, do you believe the current organizational structure is adequate to support successful contracting actions for the 

$2.5 billion America’s Shield Initiative? 

And that would go to you, Mr. Pellegrino. 

Mr. PELLEGRINO. I believe that the department is taking measures to ensure that CBP is adequately resourced and the chief procurement officer recognizes this as a significant challenge and has 

already begun to add a significant number of acquisition resources 

in order to address the current constraints. 
49

Mr. SHAYS. You have about 700 totally and you are going to go 

to 400 more or so? 

Mr. PELLEGRINO. I am not sure, 400 more? Today, I think it 

would be larger than that is the current plans. I believe that 400 

more would just reflect the need that they have in both CBP and 

TSA. 

Mr. SHAYS. Are you looking to consolidate these? 

Mr. PELLEGRINO. This is not our role as Deloitte Touche. But I 

believe that they are addressing these issues in terms of how to 

better integrate the different procurement organizations within the 

department. 

And we believe that their plans are well considered and appropriate. 

Mr. SHAYS. Do you believe that the chief procurement officer 

should have direct line authority over the others? 

Mr. PELLEGRINO. I believe that to have a chief procurement officer, it should have that type of authority. 

Mr. SHAYS. Any opinions expressed by the other panelists on this 

issue? 

Let me just ask, in one other area, in light of the management 

failures—and I would ask GSA on this—in light of the management failures outlined in your report, your audit, considering how 

significantly larger and more complex the ASI contract is projected 

compared to ISIS, which of these contracting options are you recommending GSA pursue for ASI? 

Mr. GALLAY. Which of the options? I am sorry. 

Mr. SHAYS. Yeah. 

Mr. GALLAY. I am not sure I understood what the array of options was. 

Mr. SHAYS. Well, you have one option is the full and open competition; you have option two, assisted contracting; and option 

three, partial-assisted contracting. 

Mr. GALLAY. I do not have a specific recommendation. But certainly, the notion of open competition has to be an integral part of 

anything going forward here. And I would have serious reservations about anything that took away from that. 

But essential to a project of this scope is proper planning and development of an acquisition concept that takes into account the difficulties that are to be encountered and provides everybody that is 

in the position to submit a proposal that opportunity. 

Mr. SHAYS. Any other opinion by other panelists? 

Mr. PELLEGRINO. I believe, from an industry perspective, full and 

open competition and a primary systems integrator to manage the 

program and the delivery is the right model. 

Mr. SHAYS. Okay. It is pretty striking to me that this department, $13 billion purchasing is an extraordinary amount of money. 

And it is a little unsettling that we still have not kind of sorted 

this out to the extent that we need to. 

Are we finishing up here, sir? 

Mr. ROGERS. Yes. 

Mr. SHAYS. Is there any question that you wish that the members had asked, that you were prepared for, that you need to put 

on the record? It can be on any issue. 

Anything you stayed up all night preparing for? 
50

[Laughter.] 

Seriously, is there any issue that any of you would like to put 

on the record? So I will assume no. 

Thank you. 

Mr. ROGERS. Thank the gentleman; he yields back. 

I want to thank the witnesses for your very valuable testimony 

and your presence. And I want to thank the members for their 

questions. 

Panelists, I would like you to be advised that the record will be 

held open for the next 10 days. So if members do have some questions, I would appreciate you responding to those. 

And with that, this hearing is adjourned. 

[Whereupon, at 12:04 p.m., the subcommittee was adjourned.] 
(51)

MISMANAGEMENT OF THE BORDER 

SURVEILLANCE SYSTEM AND LESSONS 

FOR THE NEW SECURE BORDER INITIATIVE 

PART II 

Friday, December 16, 2005

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON HOMELAND SECURITY, 

SUBCOMMITTEE ON MANAGEMENT, 

INTEGRATION, AND OVERSIGHT, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:45 a.m., in Room 

311, Cannon House Office Building, Hon. Mike Rogers [chairman 

of the subcommittee] presiding. 

Present: Representatives Rogers, Linder, McCaul, Meek, Pascrell, 

and Thompson. 

Mr. ROGERS. I would like to call this meeting of the Subcommittee on Management, Integration, and Oversight of the Committee on Homeland Security to order. I thank the witness for 

being here. 

We are holding this second hearing today to examine what went 

wrong with the border surveillance camera program, and how to 

avoid repeating the mistakes of the past in the new Secure Border 

Initiative. 

I would first like to welcome our witness, the Inspector General 

from the Department of Homeland Security, in his first appearance 

before the subcommittee since his confirmation. On June 16, 2005, 

we held our first hearing on mismanagement of the Integrated Surveillance Intelligence System, referred to as ISIS. This program, 

managed by the Border Patrol, is a network of remote surveillance 

technology that includes ground sensors and cameras mounted on 

poles along the Nation’s borders. 

That hearing focused on a report from the General Services Administration Inspector General on disturbing financial and management problems in the ISIS program. These included: The ballooning of the initial contract award from $2 million to $200 million 

in just one year without competition; secondly, payments for tasks 

outside the scope of the original contract; payments for cameras 

and other equipment that did not work or were never installed; and 

then finally, numerous cost overruns in violations of contracting 

rules. 

Today we will hear from the Inspector General for the Department of Homeland Security on his review of border surveillance 

technology. The Inspector General’s report, which is being released 
52

to the public today, identified a lack of effective oversight by the 

Border Patrol of the ISIS contract. 

Today’s oversight hearing is particularly important as the Department moves forward with its comprehensive new plan to secure 

our borders and reduce illegal immigration. This program, known 

as the Secure Border Initiative, is a multi-year, multi-billion dollar 

program that will use the combination of personnel, infrastructure, 

and technology. SBI is a far more ambitious and more expensive 

undertaking than was ISIS. Given the size and scope of SBI, it is 

critical that the Department not repeat the mistakes we have seen 

with ISIS. 

I thank the Inspector General for being here today. I look forward to your testimony. 

Now I would like to recognize the ranking member of the committee, my friend from Florida, Mr. Meek, for any statement he 

may have. 

[The statement of Mr. Rogers follows:]

PREPARED OPENING STATEMENT OF THE HONORABLE MIKE ROGERS

DECEMBER 16, 2005

We are holding this second hearing today to examine what went wrong with the 

border surveillance camera program, and how to avoid repeating the mistakes of the 

past in the new Secure Border Initiative. 

I would first like to welcome our sole witness—the Inspector General for the Department of Homeland Security—in his first appearance before this Subcommittee 

since his confirmation. 

On June 16, 2005, we held our fIrst hearing on mismanagement of the Integrated 

Surveillance Intelligence System, referred to as ISIS (pronounced: Eye-sis).

This program, managed by the Border Patrol, is a network of remote surveillance 

technology that includes ground sensors and cameras mounted on poles along the 

Nation’s borders. 

That hearing focused on a report from the General Services Administration Inspector General on disturbing financial and management problems in the ISIS program. 

These included—

• the ballooning of the initial contract award from $2 million, to $200 million, 

in one year without competition; 

• payments for tasks outside the scope of the original contract; 

• payments for cameras and other equipment that did not work, or were never 

installed; and 

• numerous cost overruns and violations of contracting rules. 

Today we will hear from the Inspector General for the Department of Homeland 

Security on his review of border surveillance technology. 

The Inspector General’s report—which is being released to the public today—identified a lack of effective oversight by the Border Patrol of the ISIS contract. 

Today’s oversight hearing is particularly important. . .as the Department moves 

forward with its comprehensive new plan to secure our borders, and reduce illegal 

immigration. 

This program—known as the Secure Border Initiative—is a multi-year, multi-billion dollar program that will use a combination of personnel, infrastructure, and 

technology. 

S–B–I is a far more ambitious—and expensive—undertaking than ISIS. Given the 

size and scope of S–B–I, it is critical that the Department not repeat the mistakes 

we have seen in ISIS. 

We thank the Inspector General for being here today, and look forward to your 

testimony.

Mr. MEEK. Thank you, Mr. Chairman. Once again, I am glad to 

be here at this second hearing on the Integrated Surveillance Intelligence System, better known as ISIS. I want to also thank the Inspector General for Homeland Security, Mr. Skinner, for being 
53

here, and also the Chief Inspector of the Office of Inspections and 

Special Reviews, Inspector Mann. Thank you, sir, for being here before us today. 

First, I want to say in our first hearing, we heard from Mr. Joel 

Gallay, the Acting Inspector General at the General Services Administration. After describing the many problems with the ISIS 

contract, Mr. Gallay summarized the problems with this contract 

by stating that this contract failed to follow proper procurement 

rules, ensure adequate procurement planning, selection, and an appropriate contract vehicle, required open competition, and also provided oversight of the contracts before him. These are some of the 

places where we fell short. 

In a nutshell, the contract had problems because it didn’t follow 

the accepted rules in Federal contracting procurement guidelines. 

At this point, the Department has spent over $400 million on border security technology, but has failed to cover more than 10 percent of the borders. This leads me to believe that the problems outlined in June by Mr. Gallay are still problems that face the Department of Homeland Security in implementing this program today 

under whichever name they may give it at this point. 

For me, the question is how can we get beyond this point and 

bring about solutions. I believe that the answer is clear. There 

must be effective leadership and a clear vision and accountability, 

especially on how the taxpayer dollars are being spent. 

Mr. Chairman, I understand that we are planning to have a 

third hearing on ISIS in February, and the Department of Homeland Security is planning to testify at that hearing. I hope that 

they come before us and provide us with solutions to many of the 

problems we heard about in June and the problems that I expect 

that we will hear about today with this report. 

I just want to thank our witnesses once again for the work that 

they are doing. It is a very young department, but we need the 

oversight and we need your professional staff to stay motivated so 

that the taxpayers’ dollars are being spent in the way they should 

be spent and, at the same time, protecting our borders and our 

country. Thank you. 

Mr. ROGERS. I thank the gentleman. The Chair now recognizes 

the ranking member of the full committee, our friend and colleague 

from Mississippi, Mr. Thompson, for any statement he may have. 

Mr. THOMPSON. Thank you very much, Mr. Chairman. Welcome 

to our witnesses. I am happy that you have come before us today. 

I, too, attended the hearing in June and, like most of my colleagues, was very alarmed at what we were told. I am looking forward to your presentation this morning. This is our third new 

name for the same program, and we have to do better than just rename a program; we have to absolutely make sure that we do what 

is required. We have spent some $428, $429 million on this program, and as my colleague, Mr. Meek, just indicated, and we are 

only about 10 percent home. We have only demoted four employees 

in the process. So we have a long way to go. We all agree that we 

can’t stand people shoulder-to-shoulder on the border to protect it. 

Technology absolutely has to be the way to go. But somehow, with 

the ability of this government, either procurement is not right or 
54

something, and we just have to do what is right to protect our borders. 

So I look forward to the testimony. I want to personally thank 

Mr. Skinner and his operation for the help that they have provided 

the people of the gulf coast during Katrina. You have done a good 

job. I would say that an IG’s job is not really a thankless job but, 

nonetheless, you don’t make a lot of friends. But I assure you the 

taxpayers of this country appreciate you for the job that you do. 

Mr. Chairman, I yield back the rest of my time and look forward 

to the testimony. 

Mr. ROGERS. I thank the gentleman. I would also remind the 

members if they would like to provide opening statements for the 

record, they will be able to do so. 

STATEMENT OF THE HONORABLE RICHARD L. SKINNER, 

INSPECTOR GENERAL, DEPARTMENT OF HOMELAND 

SECURITY 

Mr. ROGERS. The Chair now recognizes the Honorable Richard L. 

Skinner, Inspector General of the Department of Homeland Security, to testify. He is accompanied by Mr. Carl Mann, Chief Inspector for the Inspector General’s Office of Inspections and Special Reviews. Mr. Skinner, you may proceed. 

Mr. SKINNER. Thank you, Mr. Chairman and members of the 

committee. It is a pleasure to be here to talk about our report on 

remote surveillance technology. As you know, CBP, Customs and 

Border Protection, uses a mix of agents, intelligence, technology, 

and equipment to secure our Nation’s border. The technology includes cameras and sensors to detect and identify illegal border intrusions recently augmented by aerial, or unmanned aerial vehicles, UAVs, along the southwest border. CBP manages remote surveillance technology under the auspices of the Integrated Surveillance Intelligence System as we all know as ISIS. Since fiscal year 

1997, when it started under the Department of Justice, ISIS has 

received more than $429 million in funding. Our report discusses 

a number of problems associated with the ISIS program, and it will 

be posted on our Web site later today. These issues are also summarized in my prepared statement. 

In my oral remarks today, however, I would like to focus on the 

contract management problems that we encountered during our review. Before I begin, I wish to point out that we did not set out 

to audit CBP’s contract with International Microwave Corporation 

but, because of the impact that contract management problems had 

on the effective implementation of ISIS, we felt compelled to comment on it in our report. 

The first observation that anyone who looks at this program 

would make is that contract accountability was most certainly confused. At the Department of Justice where ISIS began, it actually 

began with the IT Office within the INS. Then it was transferred 

to the Border Patrol office. From there, INS dealt through GSA, 

using a Federal supply schedule contract and a blanket purchase 

agreement to eventually reach the contractor. The contractor, as integrator or coordinator, teamed with five other companies to procure and install the equipment that CBP had requested. This shifting of responsibility, the use of GSA as an intermediary, and the 
55

use of different procurement vehicles are not in themselves that extraordinary as procurement practices. But, taken together, this 

over-taxed everyone’s capacity to manage this contract and this 

program effectively. As a result, most contractor invoices were paid 

without CBP certification or, more recently, CBP certified the invoices, but after they had been paid. For example, in 2005, we were 

certifying invoices for goods and services that were delivered in 

2002. 

In our sample of about 65 invoices, we could only identify 7 invoices that were actually recommended for payment by CBP. No invoices in our sample, however, were rejected, although we understand that there were some invoices that were rejected by CBP. 

This resulted in payments to the contractor for goods and services 

that were never received. 

At one point, CBP attempted to bring the contractor into compliance. On September 9, 2003, the ISIS program manager wrote a 

detailed letter to the contractor outlining a litany of concerns regarding the contractor’s performance. The letter cited inefficient financial tracking and cost control, inefficient inventory control, failure to meet required deadlines and deliverable due dates, and a 

failure to notify the government of impediments to installations of 

cameras. The letter made several recommendations for remediation. However, one month later, GSA instructed the contractor to 

disregard CBP’s letter on the grounds that CBP should not have 

had such communication with a contractor. While technically, GSA 

was correct in doing this, the contracting officer made no attempt 

to address the problems reported by the ISIS program manager. Instead, in the same letter, GSA advised that it had determined that 

no invoices could be submitted for non-IT related work, although 

such work had been performed, invoiced, and paid since the inception of the contract years earlier; 1998, in fact. 

In essence, the letter from GSA was a stop work order. GSA did 

not coordinate this action with CBP, nor did it offer an alternative 

means or solution to get the work done. Consequently, little work 

on the ISIS contract has occurred over the past 2 years. 

Another acquisition management issue that we think could be 

improved relates to site acquisition. To meet the ambitious goals of 

ISIS and presumably of the Secure Border Initiative, SBI, a significant number of additional surveillance structures and supporting 

infrastructure will likely be required. Based on a review of CBP 

records, however, camera installations took, on average, 20 months 

to install or to complete. The most time-consuming aspect involved 

site selection, securing land access, and performing environmental 

assessments. Much of this preconstruction activity under the contract was performed sequentially when some steps, in our opinion 

at least, could have been performed concurrently. We made seven 

recommendations to CBP. It concurred with all of them. However, 

it appears that ISIS is now being subsumed into the much broader 

Secure Border Initiative, SBI. As a result, the program has been 

put on hold. 

CBP indicated that the next step would involve the selection of 

an integration contractor, which is projected to occur in September 

2006. Given the uncertainty of when or if ISIS implementation, at 

least as currently envisioned by CBP might resume, we asked CBP 
56

1DHS OIG, A Review of Remote Surveillance Technology along U.S. Land Borders (OIG–06–

15)

to provide our office with a detailed corrective action plan addressing each of our recommendations prior to then. Furthermore, we 

plan to monitor very closely the Department’s strategy for rolling 

out its SBI, Secure Border Initiative, and the costs associated with 

its implementation. 

Mr. Chairman, this concludes my statement. I am pleased to answer any questions you or the committee may have. 

[The statement of Mr. Skinner follows:]

PREPARED STATEMENT OF RICHARD L. SKINNER

FRIDAY, DECEMBER 16, 2005 

Good morning Mr. Chairman and Members of the Subcommittee. Thank you for 

the opportunity to discuss the Office of Inspector General’s (OIG) review of the effectiveness of border surveillance, remote assessment, and monitoring technology in assisting the Department of Homeland Security’s (DHS) Bureau of Customs and Border Protection (CBP) to detect illegal entry into the United States.1

Introduction 

The Office of Border Patrol (OBP), within CBP, is the primary federal law enforcement organization responsible for detecting and preventing illegal aliens, terrorists, 

and contraband from entering the United States between official ports of entry. To 

accomplish its mission, OBP uses a mix of agents, information, technology, and 

equipment. 

The technology OBP uses includes cameras and sensors to detect and identify illegal border intrusions. OBP manages remote surveillance technology under the auspices of the Integrated Surveillance Intelligence System (ISIS) program and the 

America’s Shield Initiative (ASI). Since Fiscal Year 1997, ISIS and ASI have received more than $429 million in funding. ISIS equipment includes sensors, the Remote Video Surveillance (RVS) system, and the Intelligent Computer Assisted Detection (ICAD) system. The key elements are as follows:

ISIS Equipment 

Sensors, primarily seismic and magnetic, buried in the ground, provide primary 

remote detection capability. When a sensor detects activity, alerts are sent via radio 

transmission to an OBP sector or station communications center. According to OBP, 

there are more than 11,000 sensors along the northern and southwest borders. Sensors are part of the first level of a layered border security strategy. Sensor technology is the most widely used as well as the easiest and least expensive to install 

and maintain. 

The RVS system provides the primary remote identification capability. It includes both color (day) and thermal-infrared (night) cameras, which are mounted on 

sixty or eighty-foot poles or other structures. The RVS system utilizes related infrastructure such as repeater towers, control room monitors, and toggling keyboards 

to zoom, pan, and tilt the cameras. As of August 2005, 255 RVS camera sites and 

27 non-camera sites (repeater towers, for example) are operational. There are 168 

RVS camera sites and 38 non-camera sites that are incomplete. 

The ICAD system provides OBP with a resource tracking and response coordination capability. ICAD is integrated with the sensors so that when a sensor is triggered, an alert is registered in ICAD. The alert creates an event record, or ticket, 

that is used to record data pertaining to the alert and eventually the result of an 

OBP agent’s investigation. ICAD aids Law Enforcement Communication Assistants 

(LECAs) in tracking OBP agent activities and provides OBP with a means to generate activity reports.

Law Enforcement Communications Assistants (LECA) 

LECAs are primarily responsible for providing radio and dispatch support to OBP 

agents in the field. They are the coordination point between ISIS and the OBP 

agent. The LECAs monitor both RVS camera and ICAD terminals. Once they observe suspicious activity or receive a sensor alert notification through ICAD, they 

relay the appropriate information to OBP agents who will investigate and report on 

the incident. When the results of the OBP agent’s investigation are received, the 

LECA closes the ICAD ticket.
57

2 ISIS was initiated while the Border Patrol was part of the Department of Justice’s Immigration and Naturalization Service (INS). Within INS, the Office of Information Resources Management (OIRM) was the principal manager of the ISIS program. In April 2001, a memorandum 

of understanding was established between OIRM and Border Patrol that transferred the RVS 

system and sensor program to Border Patrol but left the ICAD component of ISIS with OIRM. 

In March 2003, when Border Patrol became a component of DHS, all ISIS elements transferred 

to the Border Patrol. All references to OBP refer to both current and legacy INS activities related to the ISIS program. 3 According to OBP officials, the RVS system currently deployed provides approximately five 

percent border coverage given an average tower height of 70 feet and viewing range of 1.5 miles. 

Results of Review 

Several limitations of border surveillance, remote assessment and monitoring 

technology as well as significant delays and cost overruns in the procurement of the 

RVS system have impeded the success of ISIS.

ISIS Has Not Been Integrated 

Since its introduction, ISIS has had varying expectations.2 However, it is clear 

that sensors and RVS cameras were intended to work together, leveraging the detection capabilities of sensors with the visual identification capabilities of RVS cameras. 

To date, ISIS components have not been integrated to the level predicted at the 

onset of the program. RVS cameras and sensors are not linked whereby a sensor 

alert automatically activates a corresponding RVS camera to pan and tilt in the direction of the triggered sensor. However, even if ISIS was fully integrated, due to 

a limited number of operational RVS sites (255 nationwide), integration opportunities would be limited to the areas near these sites.3

The lack of automated integration undercuts the effectiveness and potential of 

ISIS. Since no automated integration exists between RVS cameras and sensors, the 

integration of information from these two sources becomes the responsibility of the 

LECAs. The LECA is required to select the appropriate RVS camera, manually maneuver the camera in the direction of the sensor, and then attempt to identify the 

cause of the sensor alert.

OBP Could Not Demonstrate Force—Multiplication Advantages of 

Technology 

Senior CBP and OBP officials have repeatedly stated in congressional testimony 

and program documents that ISIS is a force-multiplier. OBP officials asserted that 

ISIS has been successful in serving as a force-multiplier in that it frees the use of 

the limited number of OBP agents who would otherwise be needed to monitor the 

border. However, OBP has not developed performance measures to evaluate the effectiveness of ISIS or its role as a force multiplier. 

OBP officials pointed out that to measure accurately the force-multiplication benefits of ISIS technology requires an accounting of the number of attempted illegal entries and the number of attempts that were successful. Since this information is not 

easily obtainable, OBP must consider other indicators to measure force-multiplication and response effectiveness.

ICAD Data is Incomplete and Unreliable for Measuring Force-Multiplication 

OBP officials acknowledged that ICAD data could be used to analyze force-multiplication and response effectiveness. However, because of the numerous variables 

involved in cataloging information in ICAD, and because some OBP sectors are recording certain events in ICAD while other sectors are not, they also acknowledge 

that ICAD data would be of limited value and that conclusions drawn from this data 

would vary. 

Several factors limit the accuracy of ICAD data, thus its usefulness for measuring 

force-multiplication benefits and response effectiveness is limited. For example, 

LECAs may not always have time to advise an OBP agent of sensor alerts or camera observations. Similarly, OBP agents may not be available to respond. If there 

is a delay between the sensor alert or camera observation and when an OBP agent 

investigates the possible intrusion, the ticket may simply be cleared as ‘‘Unidentified,’’ ‘‘Not Available,’’ or ‘‘Unknown.’’

Few Apprehensions Attributed to Sensor Alerts 

Using sample ICAD data, we determined that more than 90 percent of the responses to sensor alerts resulted in ‘‘false alarms’’—something other than illegal 

alien activity, such as local traffic, outbound traffic, a train, or animals. On the 

southwest border, only two percent of sensor alerts resulted in apprehensions; on 

the northern border, less than one percent of sensor alerts resulted in apprehensions. 
58

Therefore, despite claims that ISIS prevents OBP agents from having to respond 

to false alarms, our analysis indicates that OBP agents are spending many hours 

investigating legitimate activities because sensors cannot differentiate between illegal activity and legitimate events, and because there are too few operational RVS 

camera sites available for OBP personnel to evaluate the cause of an intrusion alert 

remotely.

ISIS Procurement 

Over the life of ISIS different contracts, regulations, and agreements have affected 

the installation of the RVS sites, including, Federal Acquisition Regulations and 

General Services Administration (GSA) federal supply schedule contracts with various vendors, particularly the federal supply schedule contracts with International 

Microwave Corporation (IMC) and a Blanket Purchase Agreement (BPA). 

In September 1998, the INS entered into an interagency agreement with GSA 

through a Memorandum of Understanding (MOU). According to the MOU, GSA 

would provide information processing services through task orders to private sector 

contractors, while GSA would provide the contracting officer and the contracting officer’s technical representative. 

In March 1999, IMC was awarded a contract to engineer, install, manage, and 

provide remote surveillance equipment and support to multiple sites throughout the 

United States. Following the initial award to IMC, INS requested that GSA issue 

a BPA to IMC, citing cost savings as the greatest benefit of a BPA. Specifically, INS 

highlighted a unique teaming alliance that IMC had with five technology companies, 

which would result in favorable equipment discounts up to 16 percent below the 

GSA federal schedule price list. Additionally, INS stated that IMC had emerged as 

the principal systems integrator and that approval of the BPA would help standardize the RVS equipment by eliminating the continual requests from the field for 

customization. 

In November 2000, GSA issued a BPA to IMC for an estimated $200 million in 

purchases to support all RVS requirements through September 30, 2004. Only ISIS 

technology and OBP agent support equipment and services could be ordered under 

this BPA.

OBP’s Oversight of RVS Equipment Contract Activities was Ineffective 

Our primary objective was to review OBP’s use of remote surveillance technology, 

including RVS equipment, rather than audit its procurement practices. Nonetheless, 

while conducting our review, we encountered certain contract management issues 

that adversely affected the timely installation of RVS equipment. 

To test the adequacy of contracting oversight, we reviewed procurement documents for a sample of seven RVS installation Technical Directives (TDs), six issued 

under the BPA and one issued prior to the BPA. Weak project management and contract oversight, exacerbated by frequent turnover of ISIS program managers, resulted in RVS camera sites being incomplete, leaving large portions of the border 

without camera coverage. 

In addition, completed work was not finished in a timely manner. More than $37 

million in DHS funds remain unspent in GSA accounts.

OBP Certified Few Contractor Invoices Prior to Payment 

According to OBP and GSA records, most contractor invoices were paid without 

OBP certification. Procedurally, OBP should have certified correct and properly supported invoices, thereby accepting services, and returned the certifications to the 

contractor, who would forward the invoices and certifications to GSA for payment. 

Currently, OBP is certifying invoices after the invoices have been paid. OBP hired 

Performance Management Consulting (PMC) to assist in verifying contractor invoices and closing TDs. As evidence that OBP certified invoices, OBP provided copies of email messages primarily written by PMC employees recommending payment 

of invoices submitted by the RVS contractor. PMC did recommend rejection of a few 

invoices. Most invoices were neither accepted nor rejected by OBP. In the six TDs 

in our sample, only seven invoices were recommended for payment in the certification emails, although according to GSA records, 65 invoices submitted by the contractor for these six TDs were paid in full. No invoices were rejected. However, the 

certification emails did include rejections of a few invoices for TDs that were not 

in our sample. 

According to GSA, the GSA contracting officer’s technical representative was to 

ensure that OBP received and approved contractor invoices. GSA agreed that, in 

practice, there was confusion about the responsibilities of OBP and GSA and, as the 

project grew and became more complex, the potential for error and pressure to keep 

on schedule increased. Nonetheless, OBP was obligated to certify invoices; but there 
59

is minimal evidence that it fulfilled that obligation. This resulted in payment to the 

contractor for unverified goods and services.

OBP Made Some Efforts to Bring the Contractor into Compliance with the 

BPA 

OBP attempted to bring the contractor into compliance with the BPA. On September 9, 2003, the ISIS program manager wrote a detailed letter to the contractor 

outlining a litany of concerns regarding the contractor’s performance. The letter 

cited inefficient financial tracking and cost control, inefficient inventory control, a 

failure to meet required deadlines and deliverable due dates, and a failure to notify 

the government of impediments to installations. The letter made several recommendations for remediation. 

However, GSA complicated OBP’s efforts. In October 2003, GSA concluded that 

BPA invoices could not be submitted for construction-related expenses. According to 

the MOU, funds for RVS installations were directed to the GSA ‘‘Information Technology (IT) Fund.’’ On October 9, 2003, the GSA contracting officer wrote a letter 

to IMC instructing the company not to submit any invoices for non-IT related work. 

This letter instructed the contractor to disregard OBP’s letter of September 9, 2003, 

too. According to GSA’s letter, the GSA contracting officer is the only authority who 

can provide contractual direction and OBP’s letter was not legally binding. Despite 

this correspondence, GSA continued to pay invoices that the contractor submitted 

after this letter was sent. In essence, the letter from the GSA contracting officer was 

a stop work order. It does not appear that GSA coordinated this action with OBP.

Challenges Exist in Expanding Surveillance Coverage 

Based on a review of RVS camera installation schedules and OBP records, these 

installations took, on average, 20 months to complete. The most time consuming aspect of installing RVS sites and associated infrastructure involved site selection, securing land access, and performing environmental assessments. In some instances, 

these administrative activities took more than 12 months to accomplish. This requirement will continue to exist in completing future RVS camera sites, repeater 

tower sites, and supporting power infrastructure. 

Much of this pre-construction activity was performed sequentially when some 

steps could have been performed concurrently. For example, U.S. Army Corps of Engineers personnel could have performed informal consultation with state, tribal, and 

federal regulatory agencies and provided a preliminary assessment as to whether 

a potential environmental consideration might exist as part of the site selection 

process, while other contract activities—such as preparing, reviewing, and approving the contractor’s technical and cost proposals, validating selected sites, and preparing property access agreements—were in progress. 

To meet the ambitious goals of ASI, a significant number of additional surveillance structures and supporting infrastructure will likely be required. Once land access is obtained, environmental assessments will need to be performed for all sites 

considered for RVS camera, repeater tower, and supporting power infrastructure installations. Legislation such as the National Environmental Policy Act requires that 

federal agencies analyze the proposed federal actions that could significantly affect 

the environmental quality, including a detailed analysis of alternatives to the proposed action. Depending on the level of environmental evaluation and coordination 

required, some of these activities could take months to complete. 

If OBP successfully obtains land access and favorable subsequent environmental 

assessments, resistance to the installation of ISIS equipment from special interest 

groups, privacy advocacy groups, private landowners, tribal governments, and other 

concerned citizens may further complicate or delay the installation of camera sites 

or force OBP to pursue alternate locations. 

Some sectors have been successful in getting permission from other governmental, 

as well as non-governmental sources, to either access video feeds from non-OBP 

cameras or to install RVS cameras on non-OBP infrastructure. This strategy cannot 

be used in all locations where cameras are needed, but if access to property that 

meets strategic or tactical objectives can be secured, this approach would accelerate 

the process of establishing surveillance coverage. 

Another limitation to current surveillance coverage is that once installed, RVS 

camera sites cannot be easily moved to respond to changes in the traffic patterns 

of illegal aliens. During our field visits, OBP demonstrated mobile surveillance technology or ‘‘scope trucks,’’ which are available in some sectors. Mobile surveillance 

technology will eliminate the need to lease property or perform costly and time-consuming environmental assessments. Also, this technology could allow OBP to move 

remote surveillance platforms to different locations in response to changing traffic 

patterns of illegal aliens.
60

Unmanned Aerial Vehicles for Border Security 

OBP’s use of Unmanned Aerial Vehicles (UAVs) along a portion of the southwest 

border is one positive step toward using mobile technology. Nevertheless, challenges 

remain in expanding the use of UAVs, as well. While the UAVs that were tested 

are able to stay airborne for up to 20 hours, which surpasses any current capability 

of aircraft in OBP’s fleet, there are significant limitations to the UAV system. 

Weather conditions can impact the operational capabilities of UAVs. Dense cloud 

cover limits the visual acuity of some sensor and camera packages. Also, icing conditions and thunderstorms cause difficulty for UAV flights. 

UAVs remain very costly to operate and require a significant amount of logistical 

support as well as specialized operator and maintenance training. Operating one 

UAV requires a crew of up to 20 support personnel. OBP officials mentioned that 

the cost to operate a UAV is more than double the cost of manned aircraft, and that 

the use of UAVs has resulted in fewer seizures. However, the fact remains that 

UAVs can stay on station for an extended period of time, which is a distinct advantage over manned air support. According to OBP, the Hermes UAV costs $1,351 per 

flight hour and the Hunter costs $923. Those figures included acquisition costs, operations and maintenance costs, and the salaries and benefits of the pilots, payload 

operators, and mechanics. Flight hour costs were based on leasing the tested UAVs 

as opposed to a purchase, which OBP says would be less expensive.

Recommendations 

We recommended that CBP (1) maximize integration opportunities and ensure 

that future remote surveillance technology investments and upgrades can be integrated; (2) standardize the process for collecting, cataloging, processing, and reporting intrusion and response data; (3) develop and apply performance measures to 

evaluate whether current and future technology solutions are providing force-multiplication benefits and increasing response effectiveness; (4) continue to work with 

GSA to resolve contract related claims, financially reconcile funding provided to 

GSA, and obtain the return of the unused funds to DHS; (5) develop strategies to 

streamline the site selection, site validation, and environmental assessment process 

to minimize delays of installing surveillance technology infrastructure; (6) expand 

the shared use of existing private and governmental structures to install remote 

surveillance technology infrastructure where possible; and (7) continue to identify 

and deploy the use of non-permanent or mobile surveillance platforms. 

In its response, CBP concurred with all seven of our recommendations. However, 

we regarded five of their responses insufficient to resolve our recommendations. We 

have requested that CBP provide additional information in those instances. 

Additionally, six of CBP’s responses to our recommendations mention ASI. ASI is 

being subsumed into the much broader Secure Border Initiative (SBI). As a result, 

ASI has been put on hold according to OBP. In its response, CBP indicates that a 

key milestone toward ASI implementation will be the selection of a development and 

integration contractor, which is projected to occur in September 2006. Given the uncertainty of when, or if, ASI implementation as currently envisioned by CBP, we 

asked CBP to provide specific actions or activities that it will take prior to the proposed ASI implementation date to resolve our recommendations. 

Mr. Chairman, this concludes my prepared statement. I will be pleased to answer 

any questions you or the members may have.

Mr. ROGERS. Thank you very much, Mr. Skinner. In reviewing 

your statement last night, I was most struck by the conclusion following the recommendations you made. After you outlined your 

recommendations, you stated, ‘‘In its response, CBP concurred with 

all seven of our recommendations. However, we regarded five of 

their responses insufficient to resolve our recommendation.’’ 

Tell me—they are saying we know we did wrong, but we are not 

going to do anything about it? What does that mean? 

Mr. SKINNER. In essence what they are saying is yes, we agree 

with your findings, we agree with your conclusions, and yes, we 

agree with your recommendations that corrective action has to take 

place. What they did not provide us is exactly what they intend to 

do to make those corrections. So now—

Mr. ROGERS. It would be nice to know, wouldn’t it? 
61

Mr. SKINNER. As I say in my oral statement, now we are going 

back and asking, we need to know exactly what you are going to 

do in order to correct these issues. 

Mr. ROGERS. Okay. I would also like to direct your attention to 

the section a couple of pages before that titled, OBP certified fewer 

contractor invoices prior to payment. 

This is the only part of your report I had a hard time really understanding what you were saying because of all the acronyms. 

Can you kind of walk me through, in plain English, what you were 

saying in that section? 

Mr. SKINNER. First, let me apologize for all the acronyms, and we 

are going to work on that. 

Mr. ROGERS. Thank you. 

Mr. SKINNER. In essence, what we are saying is that the way the 

arrangement was supposed to work is that we entered into an 

agreement and an MOU with GSA. GSA was going to serve as our 

contracting officer. GSA appointed a contracting officer technical 

rep to handle the technical or admin parts of the contract, whereas 

OBP, under the agreement, was to manage the contract in this 

sense: they were to provide the taskings to the contractor, they 

were to review the delivery of the goods and services, and they 

were to review the invoices for those goods and services. They were 

to determine whether the invoices or the bills that arrived were, in 

fact, supportable, and that the goods and services had been, in fact, 

delivered and were acceptable. 

The CBP would then certify: we received the goods and services, 

we gave that certification back to the contractor, who then would 

turn it over to the COTR, who would process it and authorize the 

check. 

Mr. ROGERS. You lost me again. The COTR, what is the COTR? 

Mr. SKINNER. I am sorry, the Contracting Officer’s Technical 

Rep. It is someone who is appointed by the contractor or to handle 

the technical parts of the contract. 

Mr. ROGERS. Is that what you refer to here as a PMC, Performance Management Consultant? 

Mr. SKINNER. No. This is a very good point. 

CBP does not have sufficient contracting officers, they do not 

have sufficient contracting reps who can serve on behalf of contracting officers, nor do they have sufficient certified program managers to manage large procurements. Therefore, they hired a private firm to do this on their behalf. This firm then, acting on behalf 

of the Department, would review the goods and services received 

and the related bills and certify that they were, in fact, sufficient 

and supportable. 

What we found in our sample, we reviewed about 65 invoices, 

and of those 65 invoices, we determined that only six of the invoices that were submitted for payment were, in fact, reviewed and 

certified or approved by CBP or its agent, the contractor, before it 

was paid by the contracting officer. In other words—

Mr. ROGERS. I understand that. What was the response to that? 

I mean, have you asked anybody how did that happen? 

Mr. SKINNER. Yes, we did. 

Mr. ROGERS. And what did they say? 
62

Mr. SKINNER. It was simply—what we found through this whole 

process, which began way back in 1998, that the program was shuffling from one office to a second office. And then to compound matters even worse, there was a reorganization under DHS. Then, to 

even compound matters even further, within the program, there 

was staff turnover. So what we had here was people were being 

brought in, they were ill-equipped, ill-trained to actually provide 

procurement oversight, and they were unable to fulfill their responsibilities. 

The CBP at that time could have been more decisive; they could 

have been more assertive. They did not—they were distracted by 

other issues and, as a result, these contracts, the activities under 

the contract were proceeding without anyone monitoring what was 

going on. The contracting officer just simply assumed that the Department was monitoring these things, and they were not. 

Mr. ROGERS. Okay. I thank you. I have a lot more questions, but 

I will wait until the next round. 

I would like to ask, though, that when you finally receive the response back from CBP to your recommendations and what they intend to do about them, if you would forward a copy to this committee. We would appreciate it. 

Mr. SKINNER. We most certainly will. 

Mr. ROGERS. The Chair recognizes the gentleman from Florida, 

Mr. Meek, for any questions he may have. 

Mr. MEEK. Thank you, Mr. Chairman. Once again, thank you to 

our witnesses. 

You are familiar now, Mr. Inspector General, of what your office 

is doing now with Katrina-related, I guess, Rita-related contracts, 

of being on the ground, being in their face, and being there with 

those contracting officers. Can you talk a little bit about what you 

are doing now and how can it apply to contracts such as this one 

and how can we head off I guess reporting the news after the taxpayers’ money has been spent inappropriately? 

Mr. SKINNER. Yes, it can. This is not news. We were not surprised with anything that we are finding with Katrina right now. 

The Department is ill-equipped, from a procurement perspective, to 

provide oversight of the large number of contracts for which it is 

responsible. 

In April of last year, of 2005, the Secretary arrived and we did 

discuss these issues. He asked what are some of the major issues 

that need to be addressed immediately, and we advised him, your 

procurement operations. As a result of that, he asked us to do an 

integrity review. In early May, we issued a report in which we 

identified weaknesses throughout the Department, not just with regards to FEMA or Katrina, or not just within CBP, but throughout 

the Department. We were woefully understaffed and ill-equipped to 

manage our contracts. 

Let me give you an example. CBP, which has responsibility for 

ISIS, has 23 program managers responsible for over $1 billion in 

procurements. But of those 23 program managers, only three are 

certified to provide that oversight; that is, with the experience and 

training in procurement to provide program oversight for procurement. 
63

Mr. MEEK. Excuse me, sir. Are you referring to the report at the 

time that it was printed, or that is the situation as it stands now? 

Mr. SKINNER. That was in May of 2005. It is very unlikely that 

it has increased a lot, because the training and the experience to 

obtain certification to handle procurements the size of ISIS, for example, a $200 million, $400 million project, it can take months and 

years. There may be some modest improvement, but I would be 

very surprised if it was substantial. 

Also, with regard to contracting, on a national scale, it is recommended that a procurement official should have about approximately a $5 million inventory of procurements for which you would 

be responsible on the average, per procurement officer. In the case 

of CBP, for example, I think each procurement officer has responsibility for over $13 million per individual, which is almost twice 

what is recommended on a national scale. So they are woefully 

understaffed. 

Mr. MEEK. Is the national scale based on Federal contracts, or 

are you just saying local government, State government? 

Mr. SKINNER. This is recommended by associations of acquisition, 

institutes, NGOs, nongovernment offices. On a national scale in the 

government, it is probably between $6 million and $8 million. So 

we are still anywhere from 2 to 1–1/2 to 2 times what we should 

be handling. 

Mr. MEEK. I would love to get a copy of that integrity report that 

you put forth. I don’t know if I am stating—was it the integrity inhouse report? 

Mr. SKINNER. No. I believe we published this on the Web back 

in the May, June time frame. I am happy to send up another copy. 

Mr. MEEK. If it is on the Web, we will get it. 

I know that it is very difficult, especially for the job that you 

have to report; it is almost like in Katrina, the report was that the 

storm was coming and we weren’t ready on all levels. And you are 

reporting now here before this committee that it still exists or possibly exists at the Department now. So as we speak, there is Federal contracts that are not receiving the kind of oversight from the 

procurement office or attention from a qualified procurement officer 

to be able to make sure the taxpayers’ dollars are well spent. 

I am hoping, Mr. Chairman, and I know, Inspector General, I 

hope I will get another opportunity to come around again, but I 

hope, Mr. Chairman, that when the Department comes, they have 

some real answers. Because usually what we get is the Potomac 

two-step about oh, that is covered, I don’t know, that was an old 

report, that was under another department. I want to thank you 

for having this meeting again. 

Mr. ROGERS. Thank you. I now recognize the gentleman from 

Texas, Mr. McCaul, for any statements or questions he may have. 

Mr. MCCAUL. Thank you, Mr. Chairman. I thank the witnesses 

for being here. Mr. Skinner, I think you are doing a good job since 

you have come into your role, and I want to also commend Chairman Rogers for introducing the Secure Border Initiative Accountability Act, which I was proud to be an original cosponsor of, addressing this situation. 

I have a series of questions, and I may not be able to get them 

all in in 5 minutes, but I want to go back to your investigation of 
64

how this all came about. This was—was this a sole source contract, 

or was it competitively bid? 

Mr. SKINNER. Originally it was competitively bid, is that right, Carl, in 1997. That is when we started with $2 million. 

The way this thing worked, it worked from the ground up. In 

other words, the Department did not have a strategic plan saying 

we want to have integrated surveillance, video and sensor surveillance on a national scale to cover the State of Texas, New Mexico, 

and parts of the northwest. It actually filtered up. In other words, 

it was a data call saying, if we have funding, where would you like 

to put cameras or sensors? So each sector would submit their request and, based on those requests, the Department would approve 

a sector: one sector would get cameras this year, and another sector 

would get cameras next year. It was done on an incremental basis. 

After they went through its first round, they realized that this 

is actually a worthwhile endeavor and they wanted to expand it. 

I think just recently they referred to it as America’s Shield Initiative, and they started expanding this initiative. The growth of the 

program then went from $2 million to $200 million to $429 million, 

where it is today, before it was suspended. 

Mr. MCCAUL. So the answer is it was competitively bid? 

Mr. SKINNER. Well, the very first contract. So they had the contractor in place. They realized they liked it. They went back to GSA 

and said we would like to expand. In our opinion, they pulled the 

contractor off the general schedule, they did it under a blanket purchase agreement, but it grew to such an extent that they probably 

should have went out and rebid. 

Mr. MCCAUL. So the original contract was competitively bid and 

then, after that, it was essentially amended with the same contractor. 

Mr. SKINNER. Yes. 

Mr. MCCAUL. When you have a competitive bid, are you required 

to maintain documents relating to that competitive bid? 

Mr. SKINNER. Most certainly. 

Mr. MCCAUL. Is that by regulation? 

Mr. SKINNER. Yes, and also by procurement law as well. 

Mr. MCCAUL. So by law, it is required. Were those documents requested by you in this case? 

Mr. SKINNER. The blanket purchase order? Yes. 

Mr. MANN. Yes. 

Mr. MCCAUL. Were those documents provided to you? 

Mr. SKINNER. Yes. 

Mr. MANN. Yes. 

Mr. MCCAUL. I recall at the last hearing, you had difficulty getting from Border Patrol documents related to the competitive bid; 

is that accurate? 

Mr. SKINNER. That may have been GSA had difficulty getting 

those documents. 

Mr. MCCAUL. But you were able to get those? 

Mr. SKINNER. Yes, the original procurement, the blanket purchase agreements and the MOUs with GSA. 

Mr. MCCAUL. Okay. I want to get to what was done in terms of 

reprimands or penalties to employees in the Federal Government. 

Can you tell me briefly who was reprimanded? 
65

Mr. SKINNER. To our knowledge, no one. 

Mr. MCCAUL. Did any demotions take place as a result of this? 

Mr. SKINNER. Not to our knowledge, but we didn’t ask those 

questions with regards to the Department of Homeland Security. 

Mr. MANN. Pardon me. We do understand that some employees 

in the contracting office that was managing this contract out of the 

Chicago area were, in fact, reassigned. We did not get all of the details as to what led up to the reassignment. We suspect that the 

improper management of this contract may have contributed to 

that. However, we cannot say categorically that the lack of contract 

control on this particular contract was the sole source that caused 

the reassignments. 

Mr. MCCAUL. So the only action taking place in response to all 

this from an internal policy standpoint, and we are speculating, it 

sounds like, was the reassignment of four employees? 

Mr. SKINNER. That is correct. 

Mr. MANN. Yes, sir. 

Mr. MCCAUL. How much was the total contract award at the end 

of the day before it was stopped? 

Mr. SKINNER. With the installation, installation of cameras, I believe it was around $200 million; is that correct? 

Mr. MANN. Yes, sir. 

Mr. MCCAUL. And as I understand it, only $9,000—we are only 

seeking, or you are, I guess the Department of Homeland Security 

is only seeking $9,000 back. How much money was wasted? 

Mr. SKINNER. The GSA is looking at that, and I believe they are 

very close to finishing their work. Since the contract was awarded 

by GSA, they have that oversight responsibility. We were looking 

at this from more of a program management perspective. 

Mr. MCCAUL. I understand. And perhaps this is out of your 

realm, but so the only disciplinary action was the possible reassignment of four employees, and the only remedy against the contractor 

to date has been asking for seeking $9,000 when we are talking 

about a $200 million contract? 

Mr. SKINNER. I can’t say that it is only $9,000. GSA would have 

more details on that. 

Mr. MCCAUL. I understand. I see my time has expired. I will talk 

again. Thanks. 

Mr. ROGERS. I thank the gentleman. I would like to make sure 

we are clear on this initial bid. I am looking at the language from 

the GSA Inspector General’s audit, which said they found no documentation as to how the initial task order was complete and no 

documentation regarding the basis for award to IMC. And you 

found something inconsistent with that? 

Mr. SKINNER. No. I think GSA was alluding to the decision made 

by the Department to award a blanket purchase. 

Mr. ROGERS. No, sir. This is before that. They subsequently 

make reference to the fact they couldn’t find any documentation as 

to why it ballooned to a $200 million blanket purchase order. I am 

talking about the initial contract for surveillance contracts being 

given to a radio company with no competitive bidding. 

Mr. SKINNER. The $2 million. 

Mr. ROGERS. The initial $2 million. 
66

Mr. SKINNER. It is our understanding that it was competitively 

let, and we have documentation to support that. 

Mr. ROGERS. I would like to see that, because that is completely 

inconsistent with what GSA’s audit found, and it was pretty detailed. 

Mr. SKINNER. We will be happy to provide that. 

Mr. ROGERS. I appreciate that. What we did learn from that 

audit was that there was no competitive bidding, that they had invited some people to come in and make an oral presentation, and 

then at the end of those oral presentations, they issued a sole contract, but there was no objective criteria laid out that was competitively bid. So I would love to know how you see that differently. 

I am sorry to get off track, but I thought we needed to clear that 

up before we went forward with any more questions. 

The Chair now recognizes the ranking member of the full committee, Mr. Thompson, for any questions he may have. 

Mr. THOMPSON. Thank you very much. The only thing I can say 

is if I take the June hearing and fast forward it to this one, I am 

even more troubled by what you presented, Mr. Skinner. 

I guess I have some just basic questions. Did we have any nonperformance or cancellation clauses in this contract? 

Mr. SKINNER. Carl, are you familiar with that? 

Mr. MANN. I am not familiar with that. 

Mr. SKINNER. I am not sure if we did or not. We can get back 

to you on that. Again, keep in mind that the thrust or the objective 

of this review was not a contract evaluation, but rather a review 

to see how well ISIS was working. But we could not overlook the 

impact that contract management had on the effectiveness of ISIS’s 

ability to work. So we were compelled to comment on that. We did 

not actually study the contract itself or the contractual arrangements. We relied on GSA to do that for us. 

Mr. THOMPSON. Well, Mr. Chairman, somewhere between Mr. 

Skinner and GSA, we ought to ask for that review to happen so 

that we at least can have, I think, the basis for as much information as we can. 

Moving forward, I am troubled now by the fact that some of this 

technology that we CBP has, the unmanned units, in your report 

you said that it is costing us more to staff the unmanned unit than 

it would a manned unit in terms of cost; is that correct? 

Mr. SKINNER. That is correct. 

Mr. THOMPSON. And that the question as to whether or not you 

are getting any more with the unmanned unit versus the manned 

unit. 

Mr. SKINNER. That is something that requires further study. The 

one thing that I think we need to recognize is the unmanned vehicles can stay in the air for long, prolonged periods of time, whereas 

the manned vehicles cannot. 

Mr. THOMPSON. The other question, moving forward is, did we 

cancel the contract, and I know we are getting into the contract, 

with the private contractor whose job was to oversee invoices? Was 

that contract still in force during your review? 

Mr. SKINNER. It was during our review. There hasn’t been a 

whole lot of work since October 2003, but I am not sure exactly 
67

when the contract was put in place, and I am not real sure when 

it was stopped. 

Mr. THOMPSON. Well, I guess what I need is what company was 

doing that? 

Mr. SKINNER. Performance Management Consulting, PMC, as we 

have referred to, in our acronyms. 

Mr. THOMPSON. I think the committee would benefit from some 

review of the contract, some analysis of the work done. We have 

heard your testimony so far, but from your testimony, more questions are raised as to whether or not the taxpayers got the best for 

the payment in the contract, and I just think that if we can, Mr. 

Chairman, get provided that information on the contract, because 

I think it causes real concern. 

Is it customary to contract out the approval of invoices? 

Mr. SKINNER. I don’t believe that is a preferred method of providing oversight. Quite frankly, I would have to commend CBP for 

doing it, because they did not have the ability to do it, so they did 

have the sense enough to go find an expert to do it for them. 

Mr. THOMPSON. But what is your analysis of the job the expert 

did? 

Mr. SKINNER. Well, it is hard for me to make a judgment as to 

whether they did a great job, because when you look at the invoices 

and you see only six have been certified out of 65, it does not appear that they were doing a good job. 

Mr. THOMPSON. I understand maybe the Potomac definition of 

expert is a little different from where I am from, but I think we 

could have gotten a better job from that, but I see my time as expired. I yield back, Mr. Chairman. 

Mr. ROGERS. I thank the gentleman. I concur. 

The Chair now recognizes the gentleman from New Jersey, Mr. 

Pascrell, for any questions he may have. 

Mr. PASCRELL. Thank you, Mr. Chairman, good morning. We get 

more and more astonished by what we hear. Inspector General 

Skinner, thank you for your service and thank you for your previous service in FEMA. It was a freestanding agency and it worked, 

so you brought some expertise here, and we should listen to you. 

Mr. SKINNER. Thank you. 

Mr. PASCRELL. There is nothing more offensive to me in looking 

back before 9/11 and since 9/11, Mr. Chairman, than those people 

who have taken advantage of securing our neighborhoods and our 

families and our borders, in securing also the security of the country by what has happened overseas. To me, this is vial. This is unacceptable. I have heard very little transparency or credibility, accountability in any of these committee meetings, to be very honest 

with you. One has to conclude, one has to conclude that we sit up 

here and say we want to protect the taxpayer, we want to look at 

the system that was created, 90 percent of which, 90 percent of 

which in the ISIS, correct me if I’m wrong, were all false starts; 

either rabbits running across the borders and were picked up, and 

some traffic or some truck from Mexico where the back was falling 

out, and they were picked up by someone coming across the border. 

One has to conclude that it doesn’t work, it is broken. 

But I would like to ask you this question. If border security requires technological integration at the border, and interoperability, 
68

yet we seem to be approaching this on a piecemeal basis; this is 

my perception. It seems that this kind of piecemeal approach will 

either cost more money, lead to poor results, or compromise our security. I don’t sense any urgency, as Lee Hamilton and Tom Kean 

said in the 9/11 Report, and the 9/11 Report of recent time. Do you 

share my concerns about these likely outcomes and, if so, how 

should we remedy the situation? 

Mr. SKINNER. Yes, we do. And one of the things that we have recommended to the Department is that the CBP, before they proceed, 

that they begin working very closely, hand in hand, with our 

science and technology directorate, where they can find the technology that is needed so that they can make wise investments. At 

the same time, we have made recommendations that before they 

proceed with any future large procurements, that they be vetted 

through an investment review board. 

That is in a separate report dealing with our procurement oversight; it does not deal with ISIS per se, but this would apply here. 

As we proceed, we need to first ensure that the technology that we 

are going to put out there works. Two, we want to clearly define 

what our objectives are. What is our vision? What do we want to 

accomplish? Let’s don’t do it from the ground up, let’s do it in a 

strategic manner. And hopefully, under the SBI, and it is too early 

for us to comment on that, but it is our understanding that is the 

approach they are going to be trying to take. 

Mr. PASCRELL. Last night, Mr. Skinner, we voted on an amendment, and don’t ask me what we are amending, because I thought 

we left homeland security talking about border security, and we 

wound up in an immigration bill. So God knows what can happen 

today. Hold on to your hats. We haven’t seen the conclusion yet. 

But last night we voted on an amendment that would, among 

other things, essentially create a 2,000-mile fence along the Canadian border. Just envision this, a 2,000-mile fence, a long fence, a 

pretty long fence. If this were to actually occur, how would it impact, in your mind, on the American Shield Initiative? 

Mr. SKINNER. Sir, I am not qualified to answer that without having more information. One, I am not familiar with the amendment; 

and two, when you say American Shield, which is now going to become the Secure Border Initiative, as of right now has not been 

clearly defined, and it is something that the Secretary and his executive team is currently working on. 

Mr. PASCRELL. I mean the fence is not going to have any appreciable impact upon this high-tech system that we want to employ. 

If we don’t have the fence, we still have to do this. If we still have 

the fence, are we still going to do this, to your knowledge? 

Mr. SKINNER. Are we trying to keep us in, or are we trying to 

keep someone out? 

Mr. PASCRELL. I think they are trying to keep us in. 

Mr. SKINNER. I don’t know what the technology associated with 

the fence would be. I mean, can it be breached? 

Mr. PASCRELL. I just had the picture, Mr. Chairman, of Marat 

Assad. We are trying to keep those folks out and we wind up locking ourselves in. Just think about that for a little while, you know, 

before we go home this weekend. 

Do I have time for one more question? 
69

Mr. ROGERS. Yes. 

Mr. PASCRELL. Thanks. The Department has estimated that it is 

going to take about $2.5 billion to fully implement the technological 

portions of the Shield program. Based on your audit findings, do 

you believe that this estimate is accurate? 

Mr. SKINNER. We don’t know, and that is something that we are 

looking at, and we are going to be monitoring it very, very closely. 

We just had our initial oversight briefing yesterday with regards 

to SBI, and we are going to be monitoring this thing as it is rolled 

out, and we are going to maintain a very, very close eye on any of 

the funds that they are proposing or asking for or spending. 

Mr. PASCRELL. The final half of the question. Do you sense any 

urgency in getting this done? 

Mr. SKINNER. Yes, I do. Within the Department, yes, I do. It is 

something—they are moving at a rapid pace; very, very fast, faster 

than I have seen any department move, and a good illustration of 

that would be the 2SR. To do a study and reorganize in a 4-month 

period is something I have seen other departments take years to 

do. 

So there is a sense of urgency within the Department that we 

need to redefine the direction that we are going and build on our 

past successes, as few as they are. 

Mr. PASCRELL. Thank you. Thank you, Mr. Chairman. 

Mr. ROGERS. The Chair would like to yield to Mr. McCaul. I understand he has an inquiry. 

Mr. MCCAUL. Just a clarification. The amendment last night was 

not a 2,000-mile fence, but rather, fences at strategic points, and 

then technology in-between those points. So I just wanted to clarify 

that for the record. 

Mr. PASCRELL. Excuse me. Mr. Chairman, I am talking about 

simply the northern part of the country. Part of the amendment 

dealt with also the border between the United States and Mexico. 

That was part of it as well. 

Mr. MCCAUL. Well, the southern border, as I understood it, if the 

gentleman will yield, was strategic; it costs to do that. But it is not 

germane in this hearing. 

Mr. ROGERS. I have some questions. We are going to be called for 

votes pretty soon, so I would like to try to get through another 

round, if we could. And I know I am going to have some additional 

questions I want to submit to you in writing as well. I am curious 

to know how many sites were supposed to be installed in total from 

the inception in 1997 until 2003 when the plug was pulled, and 

how many have, in fact, been installed? I noticed in one report I 

read last night that there were 65 sites yet to be completed. So how 

many sites in total were supposed to be erected? 

Mr. SKINNER. I believe the total was supposed to be about 488. 

That included camera sites and repeater sites. What was actually 

completed was 255 camera sites, 27 repeater sites, for a total of 

282 sites. 

Mr. ROGERS. So about half? 

Mr. SKINNER. About 60 percent. What was not completed was 

168 camera sites, 38 repeater sites, and 206 total sites were left incomplete. 
70

Mr. ROGERS. So we were paying, based on what you are telling 

me, about $800,000 a site. 

Mr. SKINNER. That is correct. Approximately, yes. 

Mr. ROGERS. For a pole with two to four cameras on each one. 

Mr. SKINNER. Yes, but that also included the wiring and tape, 

swivels and other things that would make the camera work. 

Mr. ROGERS. I know that doesn’t shock some people in Washington, but that is just an astounding number to me—and most 

people in America, I would think. What, if anything, has the Department done since the suspension of the ISIS contract to maintain these existing cameras and sensors? 

Mr. SKINNER. Right now, unfortunately, they have been maintained in two ways: (1) on-site by CBP agents. For example, if they 

have to switch batteries or something that is a simple to do; or if 

it is something that that requires major repair, CBP has a site—

I believe it is in Albuquerque, New Mexico—where they will extract 

the camera and send it to Albuquerque for repair. 

Mr. ROGERS. And you talked about these 200 and roughly 80 

sites that have been completed. What percentage of our border does 

that cover? I read 2 to 4 percent somewhere. Is that accurate? 

Mr. SKINNER. That is accurate. I was going to say about 5 percent. I think those were the figures that they were giving us. 

And this gets back to the other issue that we are having with 

this whole program, that is, we have 5 percent covered, but how 

much should have been covered? How much do we want covered? 

What is our vision? What is our objective here? 

Mr. ROGERS. I noticed in your evaluation you also were very critical as to the integration capabilities of these camera systems. Now 

when I went to the border this summer I was very impressed with 

what the cameras could do. But you seem critical of their ability 

to integrate the sensor information into a central database where 

a border patrol agent would be monitoring these cameras. Is that 

still your opinion? 

Mr. SKINNER. Well, some are better than others. For one thing, 

the cameras have to be manned at a central control point in order 

to react to a sensor. The camera does not automatically react to a 

sensor. And if you go to some of these control sites, you may have 

one person trying to monitor a stream of 200 cameras, or 200 sensors. And that can create problems—the technology can do a little 

bit better job than that. 

Mr. ROGERS. Well, that was one of your seven areas of recommendation. Was that one of the five that they didn’t adequately 

respond to? 

Mr. SKINNER. Technology, yes. 

Mr. ROGERS. The integration. 

Mr. SKINNER. Yes. 

Mr. ROGERS. And the last area I want to visit before my time is 

up is disciplinary actions. I look back at how IMC got the initial 

contract and then how it ballooned into a blanket purchase order. 

Then, as Mr. Thompson was referencing, they contracted whomever 

to oversee it because they didn’t have time to oversee it themselves. 

What disciplinary action has been taken? Have there been any civil 

actions? 
71

You know, I assume this contractor was paid for what he was 

supposed to have been doing. Has there been a civil action to get 

money back? What disciplinary actions have taken place? And are 

they adequate in your opinion? 

Mr. SKINNER. The contractor in the arrangement between the 

Federal Government and the contractor is currently under investigation by the GSA OIG, and I believe they will have their report 

ready in time for the February hearing. That is my understanding. 

Mr. ROGERS. And that includes the disciplinary actions in that 

report. 

Mr. SKINNER. If there are any, I would assume they would be in 

that report. If you are talking about disciplinary action as a result 

of mismanagement within CBP, it will not be addressed in that report unless there was some criminal culpability. 

Mr. THOMPSON. Will the gentleman yield? 

Mr. ROGERS. I will be happy to yield. 

Mr. THOMPSON. I guess my concern is, if we pay people to look 

at invoices and make recommendations for payment and your test 

of the system revealed that a majority of instances indicated that 

that was not done, I think there is some cause for concern, Mr. 

Chairman, on our part that, in fact, we paid for a product that was 

never delivered. And I think that goes to part of your concern. 

Mr. SKINNER. May I comment on that? 

Mr. THOMPSON. Certainly. 

Mr. SKINNER. We will go back to work papers and get some validation as to whether invoices were made available to the contractor 

and were not reviewed. 

What we were finding was that the contractor was submitting invoices directly to the GSA contracting officer and the contracting 

officer was paying the bill without advising the CBP or their agent 

who was charged with reviewing those bills. So the six that we 

identified as being paid were probably bills that CBP became 

aware of. The others, it is our understanding, they may not have 

even been aware of until after the fact. That is why we found examples where CBP was reviewing, or the contractor on their behalf, was reviewing bills this past summer that were submitted to 

GSA in 2002. That is where I think you may find the gap. 

Mr. THOMPSON. Well, can you tell us, under the contract for the 

private vendor and CBP, did it say that the invoices had to be submitted to the private contractor or to the CBP or to GSA? 

Mr. SKINNER. They are to be submitted to CBP for certification 

prior to submission to the contracting officer. That was not occurring. 

Mr. THOMPSON. So they would go to CBP and stay. 

Mr. SKINNER. They were not going to CBP. They were going directly to the contracting officer. 

Mr. THOMPSON. Okay. So I guess maybe we need a matrix on 

procurement. But I guess my concern, more than anything else, is 

if a system was defined as to how payment was to be performed, 

is it your testimony that the payment system was not followed? 

Mr. SKINNER. That is correct. It was a very awkward process, 

very awkward. 
72

Mr. ROGERS. I think that this whole ISIS program is the poster 

child for gross mismanagement, and I think that your audit has revealed that, as well as GSA’s. 

I also want to make it clear, for anybody from DHS that is here, 

we are going to have a hearing in February. I think everybody on 

this panel, as well as a lot of Americans who are paying the taxes, 

are looking for some heads to roll. When you spend $429 million 

and you only get 60 percent of what you were supposed to get, we 

don’t need to see people just being slapped on the hand for this. 

This is just inexplicably unforgivable. 

Any questions by the ranking member from Florida, Mr. Meek? 

Mr. MEEK. Thank you, Mr. Chairman. 

Inspector General, I know that the day you were releasing your 

report I know possibly the Department had a copy of the report, 

your report following up on this ISIS program, and I know GSA 

has done one. Has any of this been passed on or asked for by the 

Justice Department or any other agency that may pursue a criminal route? 

Mr. SKINNER. GSA OIG, I am sure, is working with Department 

of Justice with regard to their investigation of the contractor and 

their billing relationship with GSA or the Federal Government. 

Our office has not been involved in the actual contractor–Federal 

Government relationship. We rely on GSA to do that on our behalf. 

Mr. MEEK. Reading some of this—mean, we are talking about demotions and heads rolling and all, but I mean, just looking at the 

report and hearing what we have heard from GSA, I mean, it is 

just very difficult not to even mention the issue of criminal activity 

here. I can tell you that I am very disturbed because the taxpayers 

not only got robbed in the spirit of protecting our borders, but they 

got robbed as relates to just—individuals thought that it was okay 

to just mail checks to a contractor that wasn’t doing the work. 

The reason why I raised my concerns earlier, in the first round 

of questions, about that activity, I could say very well it could be 

going on now, not maybe intentionally. Maybe it is not intentional. 

But I don’t see the kind of forward lean from the Department right 

now. I just don’t see it. I don’t feel—and I believe that there is only 

so far that we can ride the horse, seeing we are a new department 

and we are trying to catch up. 

Meanwhile, we are here thinking we are appropriating and authorizing money and we are protecting not only our constituents 

but Americans in general, and it is just not happening. 

I am very disturbed and I think, Mr. Chairman, that especially 

the folks that sit on this side and the folks that sit on that side, 

we are united in this effort. But I think that the Department, we 

should probably put forth some questions, some real boilerplate 

questions that we want answers to, and they should be answers beyond a one- or two-line issue. 

I know, Inspector General, that just looking at what is written 

in this report, I know the Department has some issues with it. And 

I just want to thank your staff once again and all the folks that 

are sitting behind you all for the work that you all are doing because this is—I don’t think that we have heard the end of it. And, 

unfortunately, I hope that we are not—you are not before us again 

talking about something, as I speak now, that is happening. 
73

I am very, very concerned. I know you are aware of the amendment that I put forth earlier in this Congress to give your office 

more—almost just as many inspector generals or assistant inspector generals as the Department of Defense. Because the way I look 

at it, the integrity of the Department, the integrity of defending 

America is at stake. 

And we don’t want to lose the American people on this. We just 

don’t want to lose them. Because we could very easily lose them, 

especially if doing a good job of protecting our borders, preventing 

terrorist attacks—and we are asking Americans to do some things 

that they haven’t done before as relates to personal information 

and all of those things. So when they see instances such as this 

one, and others that are out there being reported daily, it is very 

discouraging. 

So I look forward not only to the Department—but I thank you. 

As we continue to understand the report more and Americans understand it more, I think we will hopefully be on the path to try 

to avoid some of these issues. But I want to thank you. 

I know my office will be calling you on that whole procurementofficer-ratio issue based on the money that is being spent. Because 

if we do know that that is a problem, we need to try to deal with 

it and monitor, Mr. Chairman, some of the legislation that is going 

through the committee. We think that we are doing good, and we 

know that we have to have the FTEs in that area trained to be a 

part of making sure that the taxpayer dollars are not spent in an 

inappropriate way because an individual is not qualified or we 

don’t have enough. 

Thank you, Mr. Chairman. 

Mr. ROGERS. I thank the gentleman. 

The Chair now recognizes the gentleman from Texas, Mr. 

McCaul, for any final questions he may have. 

Mr. MCCAUL. Thank you, Mr. Chairman. 

I would like to echo my colleague’s comments. There is nothing 

more disturbing than wasting taxpayers’ money at the expense of 

protecting the American people. And I agree with the chairman. 

This is a really a poster child for mismanagement within the Department of Homeland Security, and it is something we will be following up on. 

I had some very specific questions, and I do think it would be 

good to get the Inspector General for Homeland Security’s sense for 

what happened here with the contracting issues, because there 

were some problems from the inception with this contract. I don’t 

know if you have looked into that from the CBP standpoint or not, 

but that may be something we will want to talk about. Can you answer that? 

Mr. SKINNER. We have looked at it more from a global perspective in our initial review. But as a result of that, in April, I created 

a new division within the OIG, the Office of Procurement, that is 

focused entirely on providing oversight of the Department’s procurement activities. 

With regard to this issue, yes, the Department came ill-equipped 

when it was formed in 2003, in March. They have done little up 

through 2005 to address those issues. Since 2005, there has been 

an active recruiting campaign. There has been an active training 
74

campaign. There has been an active government ethics campaign 

for all procurement officers with the Department. This is all within 

the last 3, 4, 5, 6 months. We have not seen the impact of any of 

this yet. 

I know, for example, as a result of Katrina, FEMA is in the process of hiring 120 additional procurement officers, and that is on a 

fast track. I meet on a weekly basis and I will meet again today, 

every Friday, with the Katrina procurement integrity board of the 

Department, and their primary focus right now is hiring for 

Katrina operations. 

Mr. MCCAUL. And I would like to commend you for injecting 

yourself, the IG’s office, at the procurement stage with those officers. It is a great idea. I know with Katrina you are doing that. 

Because we have to vote soon, let me get to the point. I do understand—is it your understanding that there is a current criminal investigation by the Department of Justice? 

Mr. SKINNER. No, it is my understanding that there is an investigation by the GSA OIG. 

Mr. MCCAUL. Okay. 

Mr. SKINNER. And, of course, any OIG investigation will be coordinated with the Department of Justice. 

Mr. MCCAUL. Well, the GSA Inspector General indicated that 

there was. 

One last question. Your report indicated that on September 9 of 

2003 that the ISIS program manager wrote a letter to the contractor, IMC, expressing concerns over what was happening here 

and the failures. And your report also characterized this letter as 

a stop work letter, or stop work order. However, GSA instructed 

IMC to disregard the letter, since GSA was the only contracting authority that could do that, and that the Border Patrol letter was 

not legally binding. And, despite this correspondence, in your report it appears GSA continued to pay invoices that the contractor 

submitted after this letter was sent out. What happened here? And 

how much did the taxpayers lose as a result of that? 

Mr. SKINNER. Let me explain. That is not the exact sequence of 

events. 

In September, 2003, the ISIS project manager—and, again, keep 

in mind this contract was just transferred from the Department of 

Justice only 6 months prior—reviewed the activities under the contract and found several problems, which we identify in our report. 

He took—the project manager took it upon himself to write directly 

to the contractor saying we have a problem here and I want to get 

it fixed. He did not stop the contract—it was not a stop order letter. 

GSA, in turn, wrote saying CBP is not authorized, nor do they 

have the authority to ask for such a remediation plan, nor should 

they be dealing directly with the contractor. That is what the contracting officer is supposed to do. 

In and about the same time, or in the same letter, the contracting officer said, by the way, you are charging construction 

costs against this program, whereas the agreement only allows you 

to charge IT costs. And since the only way you can complete this 

project is through construction, that is, the construction of the 

poles and things of that nature, that, in essence, was a stop order. 

It wasn’t a stop order because of lack of performance. It was a stop 
75

order because CPB was not authorized to spend funds out of an IT 

account for construction. 

That is essentially when ISIS came to a stop. Bills, of course, 

were being paid after that to settle up accounts. Also, there was 

some IT work done to install cameras on poles that had already 

been installed. All installation came to a stop. 

Mr. MCCAUL. I see my time has expired. 

Mr. ROGERS. It is. And I want to thank the members for their 

questions. I want to thank you, Mr. Skinner, and you, Mr. Mann, 

for your time. It has been a very beneficial hearing for us. 

I would remind you that for the next 10 days we will keep the 

record open. Members may want to submit questions for the record, 

and I would ask you to respond to those in writing. 

And, without objection, we are in adjournment. 

[Whereupon, at 11:56 a.m., the subcommittee was adjourned.] 

(77)

MISMANAGEMENT OF THE BORDER 

SURVEILLANCE SYSTEM AND LESSONS 

LEARNED FOR THE NEW BORDER INITIATIVE 

PART III 

Thursday, February 16, 2006

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON HOMELAND SECURITY, 

SUBCOMMITTEE ON MANAGEMENT, 

INTEGRATION, AND OVERSIGHT, 

Washington, DC. 

The subcommittee met, pursuant to call, at 1:45 p.m., in Room 

311, Cannon House Office Building, Hon. Mike Rogers [chairman 

of the subcommittee] presiding. 

Present: Representatives Rogers, Meek, and Jackson-Lee. 

Mr. ROGERS. [Presiding.] This hearing of the Management, Integration, and Oversight Subcommittee of the Homeland Security 

Committee will come to order. 

Today we are holding our third hearing on the mismanagement 

of the Integrated Surveillance and Intelligence System, referred to 

as ISIS. This program includes the cameras and sensors that monitor our nation’s borders. 

Let me begin by welcoming our two distinguished witnesses and 

thank them for being here today. 

I would like to note for the record that this is the first appearance before Congress by the director of the department’s new Secure Border Initiative office. 

In our first hearing on ISIS, the deputy inspector general of the 

General Services Administration testified that ISIS was ‘‘a major 

project gone awry’’ and ‘‘a waste of taxpayers’ dollars.’’

At our second hearing in December, the department’s inspector 

general stated that weak project management and contract oversight left large portions of the border without camera coverage. 

His audit also found that payments were made for goods and 

services never received; that installment of cameras took an average of 20 months to complete; that only 50 percent of the camera 

sites were completed for a cost of approximately $800,000 per completed site; and, finally, that millions of dollars intended for border 

surveillance remained unspent in GSA accounts. 

Just last week, the head of the U.S. Border Patrol agency, Chief 

David Aguilar, testified before Congressman McCaul’s subcommittee. At that hearing, Chief Aguilar stated that ISIS had 

‘‘major problems.’’
78

In my view, the ISIS program is nothing less than the poster 

child of government waste and mismanagement. 

In today’s hearing, we will examine three areas with officials 

from agencies responsible for the ISIS program: first, what went 

wrong with the ISIS program and what steps have been taken to 

fix those problems; second, and the area that I think is most important, what disciplinary actions have been taken against those federal employees who mismanaged the ISIS program; and then, 

thirdly, what assurances do we have that the mistakes made in the 

ISIS program will not be repeated in the implementation of the Secure Border Initiative. 

As Ranking Member Meek and I have indicated in two letters to 

the deputy secretary, Michael Jackson, we expect those employees 

responsible for the ISIS problems to receive severe disciplinary action and not just a slap on the wrist. We expect nothing less for 

those who waste taxpayer dollars and jeopardized our border security. 

And with that, I will yield to the ranking member, Mr. Meek, for 

any comments that he may have. 

Mr. MEEK. Thank you, Mr. Chairman. 

I want to thank our witnesses for being here. 

And I am glad that we are having a third hearing on this issue. 

Hopefully, the third time will be a charm. And the chairman has 

called this hearing to give the department an opportunity to respond, not only to the auditor general’s report, but many other reports that are out there. 

I am pretty sure all of you are aware, and the chairman just 

mentioned, we sent correspondence to the department hoping that 

the two of you will be able to answer the questions in detail of, not 

only the department’s response or message, but to also answer our 

questions as it relates to disciplinary action that has been taken or 

hopefully forthcoming to be taken against those individuals that 

are responsible, not only for the immediate oversight of the ISIS 

program, but also those individuals that have oversight over them. 

I think it is important also for the American people to really understand what happened in this case, because right now the department has launched a new initiative similar to ISIS to be able 

to protect our borders. 

We have to know this as an oversight committee to be able to 

make sure that the taxpayers’ dollars are being spent in the way 

they are supposed to be spent. 

At the same time, those individuals that have the responsibility, 

after we appropriate, after we legislate, of carrying out the programs that will protect Americans and protect our borders, they 

should also be held responsible. 

Mr. Chairman, I just wanted to say that I know that Mr. 

Giddens has a long history in the procurement field. And I also 

know that the issues that we are going to be talking about here 

today I am pretty sure that you have a pretty good idea of what 

we are going to ask. 

Hopefully, we will hear something new from the department that 

we have not heard thus far, as it relates to the explanation of how 

we got to this point. 
79

As you know, we started in the summer of 2005, so we are well 

into a year of having these hearings and, hopefully, there will be 

some new information revealed here today. 

This is not a witch hunt; this is just our job as an oversight committee of being able to get to the bottom or close to the bottom of 

what has happened so that we do not have to repeat ourselves. 

So, Mr. Chairman, I am glad that, once again, that we are here. 

I want to thank our witnesses for coming. 

I want to say, again, we sent correspondence saying that hopefully either you can answer—both of you can answer our questions 

or the people sitting behind you can answer our questions so that 

we can hopefully share it with our colleagues in the full committee. 

Thank you, Mr. Chairman. 

Mr. ROGERS. I thank the gentleman. 

The chair now calls our first witness, Mr. Gregory L. Giddens, 

director of the Secure Border Initiative program at the U.S. Department of Homeland Security, for any statement he may have. 

STATEMENT OF GREGORY GIDDENS, DIRECTOR, SECURE 

BORDER INITIATIVE PROGRAM, DEPARTMENT OF 

HOMELAND SECURITY 

Mr. GIDDENS. Good afternoon, Mr. Chairman and Ranking Member Meek. Thank you for the opportunity to come before you today 

to talk about the legacy border surveillance program, ISIS, and the 

Remote Video Surveillance System that was a part of that. 

Mr. Chairman, in your opening comments, you mentioned the 

mismanagement of the program. I am not going to sit here today 

and dispute that. Mistakes were made on this program. And, sir, 

they were made from the very beginning. 

At that time INS partnered with GSA to go down this path, we 

really structured a program that would be more fitting for a commodity buy versus a buy that was for a part of a critical mission 

set. And, I think, was the beginning of the undoing of the program. 

And that is one of the clear lessons that we have learned from 

this, as we are structuring SBI and as we go forward looking at 

major acquisitions, and treating those as major acquisitions of mission-critical programs, and the requisite planned program controls, 

risk management, test and evaluation plans, program management 

plans—processes and procedures, roles and responsibilities, we 

have learned a lot of lessons from that. 

Collocating program management and contracting staff and engineering staff, there is a lot of lessons learned. And I will certainly 

be glad to elaborate more on that as we go forward. 

We certainly appreciate the committee’s support of the Department of Homeland Security and our efforts to secure the border to 

make it safe and secure. 

And, Mr. Chairman and Ranking Member, I would welcome your 

continued oversight as we go forward. 

Clearly, SBI in itself is a complicated program. It is critical, but 

it is complicated. And I will not sit before you and pretend it is not. 

And I would welcome your continued engagement. 

And I also just want to make a point. I appreciate the work that 

the staff has done with us, even before this hearing, in general on 
80

SBI and their willingness to meet with us and discuss issues that 

DHS has and try to build a collaborative partnership. 

[The statement of Mr. Giddens follows:]

PREPARED STATEMENT OF GREGORY GIDDENS

Chairman Rogers, Ranking Member Meek, and members of the Committee: 

Thank you for the opportunity to address you today, and for your ongoing support 

of the Department of Homeland Security’s (DHS) efforts to keep America’s borders 

safe and secure. I am Gregory Giddens, Director of the DHS Secure Border Initiative (SBI) Program Executive Office. I am pleased to be here today to discuss the 

legacy border surveillance technology program known as the Integrated Surveillance 

Intelligence System (ISIS), and to identify how DHS has incorporated the lessons 

learned in our acquisition and management processes as we move forward to gain 

control of our nation’s borders. 

DHS shares Congressional concern over the problems identified in the December 

9, 2004, audit report by the Inspector General (IG), General Services Administration 

(GSA), regarding the administration and oversight of the procurement of the Remote 

Video Surveillance System (RVSS), one component of the Integrated Surveillance Intelligence System (ISIS). These concerns were a major factor in the decision to terminate the ISIS program and related contracts at the end of FY2004. 

In 2004, the successor border surveillance technology project referred to as the 

America’s Shield Initiative (ASI) was initiated and designed to ensure the shortcomings or problematic issues of ISIS were not repeated. The requirements of this 

program are now being subsumed into a more comprehensive program called the Secure Border Initiative (SBI), which will be discussed in greater detail later. SBI incorporates similar sound acquisition and procurement strategies

The ISIS Project 

ISIS had its origins in a program begun in 1998 to improve Border Patrol surveillance capabilities by acquiring new sensors, cameras, and Intelligent ComputerAided Detection (ICAD) capabilities. Border Patrol was then a part of the former 

Immigration and Naturalization Service (INS). The Office of Information Resources 

Management (OIRM) at the INS originally was the Program Manager for this effort. 

Through a 1998 Memorandum of Understanding between INS and the General 

Services Administration (GSA), the initial ISIS contract vehicles, including the Remote Video Surveillance System (RVSS) program, were GSA Federal Supply Schedule contracts. 

The RVSS project installed camera systems mounted on poles, towers, and other 

structures at a limited number of locations on the northern and southern borders. 

The cameras transmitted video images back to a control room where Law Enforcement Communications Assistants viewed the images and dispatched Border Patrol 

agents as necessary. At first the RVSS Project was supported through a series of 

individual orders with various contractors. In 1999, GSA selected a single vendor, 

the International Microwave Corporation (IMC) (later purchased by L–3 Communications), to provide RVSS capabilities as requested by OIRM in response to Border 

Patrol requirements. The award was converted to a Blanket Purchasing Agreement 

(BPA) between GSA and IMC in November 2000 under GSA Federal Technology 

Schedule 70, with a period of performance from November 8, 2000, until September 

30, 2004. Under the BPA, OIRM provided program management oversight of the 

ISIS, and GSA served as the Contracting Officer (CO) and the Contracting Officer’s 

Technical Representative (COTR). 

In April 2001, program management responsibilities for the ISIS BPA were transferred to the Office of Border Patrol (OBP) through a Memorandum of Understanding signed by OIRM and OBP. GSA continued to exercise CO and COTR authority. With the creation of the DHS in March 2003, OBP became a part of U.S. 

Customs and Border Protection (CBP) and OIRM became part of Immigration and 

Customs Enforcement (ICE). Because of the continuously unresolved prior and ongoing problems with the IMC contract, CBP allowed the contract to lapse in September 2004, rather than renew it. 

The CBP Office of Finance is continuing to work with GSA to recertify all remaining ISIS funding, which can only be utilized for the original intent of providing border surveillance technology.

IG Reports 

Numerous problems with the RVSS project resulted in the GSA Administrator requesting the IG to conduct an audit. This audit covered all the GSA Federal Technology Service’s (FTS) Regional Client Support Centers and was performed by the 
81

GSA IG office in Fiscal Years (FY) 2003 and 2004. Although the majority of the 

audit findings related to GSA’s procurement practices and alleged mismanagement 

by the integration contractor with regard to the purchase and installation of the 

RVSS, some of the findings and recommendations also focused on the OBP role in 

program management. 

The GSA IG report identified three major areas with regard to the ISIS/RVSS acquisition that related to CBP/OBP: 

• Inadequate contract management and oversight. 

• Lack of acquisition planning. 

• Inadequate provision for competition. 

The DHS Inspector General issued a report (OIG–06–15) in December 2005 entitled ‘‘A Review of Remote Surveillance Technology Along the U.S. Land Borders’’ 

which also catalogues CBP’s corrective actions regarding the problems with the ISIS 

project. [Maintained in committee file.]

Corrective Actions Addressed Through ASI 

In 2004, CBP initiated ASI. ASI was designed to provide technology to improve 

our nation’s ability to detect, classify, and respond to illegal attempts to enter the 

United States between the ports of entry. 

CBP took a rigorous approach to managing and overseeing ASI planning for major 

acquisitions and investments, with a specific focus on correcting the problems that 

had existed with the previous ISIS effort. An ASI Program Management Office 

(PMO) was developed and staffed by the CBP OBP, the Office of Information and 

Technology, the Office of Procurement, and contractor personnel. PMO personnel 

were well qualified in program management, systems acquisition, logistics, contract 

management and oversight, and engineering, and brought a significant level of experience to the program. The PMO ensured its procurement processes and structure 

adhered strictly to Federal and DHS procurement guidelines. 

To govern the operation of the PMO and comply with DHS investment management policy, the PMO created and implemented the following formal plans and processes for the acquisition of the ASI. This detailed level of planning meets the highest standards of federal enterprise architecture for acquisition projects and ensured 

all activities associated with the project were firmly under the supervision of senior 

management:

• Cost-benefit analysis 

• Program Management Plan 

• Acquisition Performance Baseline 

• Acquisition Plan 

• Source Selection Plan (draft) 

• Risk Management Plan 

• Test and Evaluation Master Plan 

• Configuration Management Plan 

• Integrated Logistics Support Plan 

• Program Level Work Breakdown Schedule and Integrated Schedule 

In accordance with FAR, Parts 7 and 39, the ASI Program Manager developed a 

comprehensive acquisition strategy that emphasizes the use of non-developmental, 

open systems technology to both ensure competition and to shorten the amount of 

time required to field the first incremental capabilities to the field. ASI planned to 

validate technologies and approaches through prototyping before approval was given 

to enter the production phase.

The ASI plan envisaged that: 

The ASI program manager, contracting officer, contracting officer technical representatives (COTR) and support staff would be responsible for day-to-day administrative matters as well as cost, schedule and performance tracking. Contract performance would be managed through the application of Earned Value Management, 

the Contractor’s CMMI Level 3 methodology, program management reviews, and design and milestone reviews. 

• A procuring contracting officer would be on-site during the period of performance for the prototype development and acceptance testing. 

• The contractor would be required to provide a quality management plan within 60 days of contract award. 

• The contract and, as appropriate, any associated task orders will have a Government point of contact who will periodically audit the contractor’s implementation of its quality management plan. 

• A deliverables review system would be established by CBP to ensure timely 

delivery and Government inspection and acceptance of deliverables required in 

the contract. 
82

• Each line item would be accepted after successful completion of acceptance 

testing. 

• Invoices would be reviewed by the COTR to ensure that the contractor has 

met all the acceptance criteria before the approval and payment of each invoice. 

• CBP and the development and integration contractor would identify, assess, 

track, and mitigate all risks that can potentially impact contract cost, schedule, 

and performance.

The Secure Border Initiative—The Way Forward 

On November 2, 2005, Secretary Chertoff announced a comprehensive multi-year 

plan to secure America’s borders and reduce illegal immigration. The, the Secure 

Border Initiative (or SBI) focuses broadly on three major t themes, controlling the 

border, immigration enforcement within the United States, and the Temporary 

Worker Program. 

The Secretary’s vision for SBI includes: 

• More agents and officers to patrol our borders, secure our ports of entry and 

enforce immigration laws; 

• Expanded detention and removal capabilities to eliminate ‘‘catch and release’’; 

• A comprehensive and systematic upgrade of the technology used in controlling 

the border, including use of manned and unmanned aerial assets (UAV’s); 

• Increased investment in infrastructure improvements—providing additional 

physical security and to sharply reduce illegal border crossings; 

• Improve interior enforcement of our immigration laws. 

• Working in close coordination with international partners to ensure illegal entrants are quickly returned to their countries of origin. 

DHS has instituted specific leadership and management structures through SBI 

which will ensure program management deficiencies of legacy efforts such as ISIS 

are not repeated. Specifically, DHS has created an SBI Program Executive Office 

within the Office of the Assistant Secretary for Policy, Planning and International 

Affairs. I am the Director of that office. Weekly meetings are chaired by the Secretary and attended by a broad scope of DHS senior leaders to ensure we are realizing near term improvements in our immigration enforcement with existing resources, while continuing to focus on building a multiyear strategy that will address 

the gaps in our current approach. We also place a priority in working with our international partners, particularly in the area of detention and removals. We are appreciative of those nations that work with us most closely in this area; I would like 

to specifically note the excellent cooperation that we have experienced with El Salvador and Honduras. 

Furthermore, CBP has created an SBI program management office (PMO) in the 

Office of Policy of Planning with direct reporting responsibility to the Commissioner. 

The organizational structure provides the SBI PMO with the advantage of drawing 

on the full range of relevant expertise and capabilities within CBP to ensure fully 

successful management of the effort. Leaders from the operational side of the agency 

provide overall project management, while the acquisition process for SBI technology and infrastructure are supervised by highly trained and certified program 

managers with extensive experience in the Federal Acquisition Regulations (FAR). 

The PMO also leverages expertise from the ASI PMO. Similarly, program management offices are also being developed for the Immigration and Customs Enforcement 

and Citizenship and Immigration Services.

SBInet 

A critical component of the SBI strategy to control the border is the Department’s 

plan to launch a comprehensive program to transform its border control technology 

and infrastructure. This program, named SBInet, will integrate multiple state of the 

art systems and traditional security infrastructure into a single comprehensive border security suite for the department. CBP will serve as the executive agent for the 

SBInet program—leading, managing, and working with an industry integrator to 

implement this aggressive new DHS program. 

Last month, DHS held an ‘‘Industry Day’’ to reach out to America’s private industry as a first step in building a strategic partnership in support of the Secure Border 

Initiative (SBI). More than 400 representatives from the private sector attended the 

SBInet Industry Day, which challenged industry to develop an integrated solution 

using a combination of new technology, tactical infrastructure, personnel, facilities, 

sensor and response platforms, communications, as well as existing government resources and infrastructure. 

The DHS goal is to award an integrator contract by the end of this fiscal year 

through a constructive down select competition in full compliance with the FAR. 

DHS has contracted with an independent contractor to provide professional assist-
83

ance with drafting the Request for Proposal and the process of reviewing proposals 

submitted in response. 

We expect the private sector systems integrator to help CBP and DHS provide a 

solution that provides deterrence, detection, and apprehension by a solution that: 

• Fully integrates and balances the tradeoffs of personnel, technology and infrastructure requirements 

• Addresses the need to coordinate operations and share information among all 

relevant DHS agencies and other federal, state, local and tribal law enforcement, defense, legal and intelligence agencies. 

• Evaluates the illegal entry threat against the current level of resources, 

prioritizes the shortfalls based on areas of greatest operational need, and provides a comprehensive road-map for achieving full operational control of the 

border in the shortest possible time. 

• Includes a detailed and comprehensive set of performance measures to ensure 

we have a robust ability to view and understand the impact of adding resources 

to ensure the expected improvements in operational capabilities actually are occurring.

Rigorous Program Management and Leadership 

DHS is well positioned to meet the challenges of awarding and overseeing SBInet, 

and ensuring mistakes of the past are not repeated. The following actions have been 

instituted to establish rigorous program management and leadership necessary for 

success of large scale projects such as SBInet: Specifically: 

• For major programs, oversight is provided by the DHS Program Executive 

and Central Procurement Offices, as well as by Senior Management in DHS organizations. 

• The CBP SBI Program Management Office will include an independent, objective assessment of acquisition planning and implementation activities. 

• The contractor will be required to provide a quality management plan within 

60 days of contract award. 

• CBP and the integration contractor will identify, assess, track and mitigate 

all risks that can potentially impact contractor costs, schedule, and performance 

• The program manager, contracting officer, contracting officer technical review 

(COTR) will be held to the highest standards of accountability for program performance 

• Contract performance will be managed through the application of Earned 

Value Management, program management reviews, and design and milestone 

reviews. 

• A Contracting Officer will be assigned to CBP Acquisition Project Management Offices for the duration of the program to provide effective oversight for 

acquisition planning, solicitation, and contract administration activities. 

• The contract and associated task orders will have a Government point of contact who will periodically audit the contractor’s implementation of its quality 

management plan. 

• CBP will establish a deliverables review system to ensure timely delivery and 

Government inspection and acceptance of deliverables required in the contract. 

• Line items will be accepted only after successful completion of acceptance 

testing.

Conclusion 

Gaining control of the border is a major challenge, which requires a comprehensive strategy that fully integrates personnel, technology and infrastructure most effectively, and through the Secure Border Initiative the Federal Government has defined this goal as a major priority. 

Under this program, effective measures will be in place to provide high standard 

program management, direct supervision of all program activities by senior leadership, detailed performance metrics to measure operational capabilities. 

Several IG, GAO and Congressional reviews of the problems associated with the 

ISIS program have highlighted the serious shortcomings in the management of the 

acquisition and procurement process, and DHS has taken steps to ensure similar 

problems do not occur in any current or future program.

Closing 

Thank you again for the opportunity, Mr. Chairman to speak to you today. I will 

be happy to answer any questions from you or the other Members of the Subcommittee.

Mr. ROGERS. I thank the gentleman. 
84

The chair now recognizes our next witness, Mr. James C. 

Handley, regional administrator for the Great Lakes Region 5 of 

the U.S. General Services Administration, for any statement you 

may have. 

Mr. Handley? 

STATEMENT OF JAMES HANDLEY 

Mr. HANDLEY. Thank you, Chairman Rogers, Minority Member 

Meek. 

We, too, have not shied away from admitting that mistakes were 

made in this program, as our I.G. most adequately testified before 

you some time ago, identifying certain shortcomings in the administration of this contract. 

I will say that we have enjoyed now in these last few months a 

very good relationship with the Department of Homeland Security 

and the contractor in this case to try and arrive at some final numbers to present to everyone and close this matter out. 

As you know, probably from previous testimony, that this all 

started in 1998. A close-out for all orders occurred in 2004. And 

since that time, we have been working to close out the program 

and to come up with some final numbers of accountability. 

As you also noted, and the I.G. testified about, the December 14, 

2004, audits. In those audits, there were several concerns raised. 

Just to enumerate a few of those, a lack of competition in the 

awarding of the RVS contract, the inappropriate contract for construction services, inadequate contract administration, providing 

equipment without contract or approval, and ineffective management controls. 

We agree with that, Mr. Chairman. And we are doing as much 

as we can today in trying to put those things behind us and to put 

in place—I think we do have in place now controls for addressing 

those kinds of matters in the future. 

Once again, I would enumerate just a few. For instance, putting 

management controls in place to ensure adequate review and documentation, replacing key managers. 

As you pointed out earlier, there were some shortcomings, and 

some key managers have been replaced. We do conduct regular 

meetings, as I mentioned a moment ago, with the contractor and 

DHS. 

We also do consultation with our inspector general and with the 

general counsel in our office, who has been instrumental in guiding 

us through this process. 

And we now have a process for requiring that funds are appropriately appropriated, if you will, and that the contracting vehicles 

are the correct contracting vehicles. 

We also have a contract review board, which is pre-solicitation 

and do post-award reviews. 

In addition to these actions, as you pointed out earlier, there 

were several disciplinary actions that were given out. And we send 

a paper to the committee on this prior to coming. 

My written testimony goes into detail about how we conducted 

our deliberations, and I will be happy to answer questions you have 

about that. 
85

One thing we would point out, we have had—you may have 

heard of it; you may not have heard of it. But at GSA we have 

what we call the Get it Right program. We are trying to make sure 

that we are doing things right in the acquisition field. 

We recognize that this is an means to an end, that what we are 

really striving for is excellency in acquisition. 

I will conclude my testimony at this time and be happy to answer any questions you might have about this program and about 

those disciplinary actions, which you referred to earlier. 

Thank you, Mr. Chairman. 

[The statement of Mr. Handley follows:]

PREPARED STATEMENT OF JAMES C. HANDLEY

Good afternoon, Chairman Rogers and Members of the Subcommittee. Thank you 

for the opportunity to appear before you to discuss the General Services Administration’s (GSA) role in the U.S. Border Patrol Integrated Surveillance and Intelligence 

System (ISIS). I am Jim Handley, Regional Administrator for GSA’s Great Lakes 

Region (Region 5), and I am pleased to be here today to discuss the December 2004 

GSA audit of the Federal Technology Service (FTS), particularly the contract awarded for the U.S. Border Patrol’s Remote Video Surveillance (RVS) program and what 

we are doing to correct these errors.

BACKGROUND 

In late 1998, the former Immigration and Naturalization Service Border Patrol 

approached our regional FTS for acquisition support, including network cabling, IT 

services, commodities, network maintenance and upgrades for the RVS program. 

Initially, individual orders were issued; however, due to anticipated requirements, 

it was determined that a Blanket Purchase Agreement (BPA) would better streamline the process and provide for quantity discounts. The BPA, with an estimated 

value of $200 million, was awarded to International Microwave Corporation (IMC) 

on November 14, 2000. The BPA was established under the terms of IMC’s position 

on the Federal Supply Schedule (FSS) Contract FSS70. IMC was subsequently acquired by L3 Communications Incorporated in 2003. 

The BPA expired for new orders on May 5, 2004, although some work was ongoing 

through September 30, 2004. The BPA, however, did not account for all equipment 

and services provided in support of the Border Patrol’s surveillance needs and there 

were ancillary equipment requirements and support not covered under the BPA 

which were procured under separate task orders.

GSA AUDIT 

The December 14, 2004, Office of Inspector General (OIG) audit was part of a nationwide review requested by the GSA Administrator to answer the following question: Were procurements awarded and administered in accordance with the Federal 

Acquisition Regulations and the terms of the contracts utilized? As we found out, 

the answer to this question was no. 

A copy of that final audit was provided to the Committee when it was released 

and GSA’s Deputy Inspector General appeared before the Subcommittee on June 16, 

2005, to discuss the audit in greater detail. 

In its final report, the OIG raised several concerns, such as: 

• the lack of competition in the awarding of the RVS contract 

• the inappropriate contract for construction services 

• inadequate contract administration and project management 

• providing equipment without contractor approval 

• ineffective management controls 

I assure you that these concerns are currently being addressed on a detailed level 

within the Region.

PROJECT REFORMS 

Mr. Chairman and Members of the Subcommittee, I agree with these findings of 

the OIG. There were definitely certain instances of inappropriate contracting practices. These practices were not specific to Region 5 but part of a larger problem that 

permeated FTS nationwide. This is not meant to excuse our actions in any way, but 

it is meant to reinforce the OIG’s finding of environmental problems throughout the 

organization. 

Since the receipt of the OIG audit and as a direct result of it, Region 5 has made 

tremendous strides in correcting the issues raised. Some of these actions were taken 
86

immediately while some have taken more time. This is a situation that will require 

a dedicated effort on our behalf to make sure this does not occur again. And I assure 

you, we are focusing our resources to resolve these issues. 

Some of the actions we have taken on the regional and programmatic levels include: • Putting management controls in place to ensure adequate review and documentation is provided; 

• Replacing key managers with individuals who were experienced in their field 

and focused on customer service, quality of tasks, and adherence to procurement 

regulations; 

• Conducting regular meetings with the Contractor and U.S. Customs and Border Protection to address any discrepancies in contracting procedures and contractor performance; 

• Requiring a Memorandum of Understanding or Memorandum of Agreement 

with each task order to confirm GSA and customer roles and responsibilities; 

• Consulting with the Office of General Counsel in our acquisition planning and 

execution; 

• Limiting contracting authority to allow for more management control; • Establishing a database to monitor every phase of the acquisition; • Reviewing funds received, obligated, and invoiced between the two GSA financial centers; 

• Validating all GSA financial data at the task order level to ensure funds and 

payment records match; 

• Encouraging Contracting Officers to become more involved in task planning 

and encouraging customers to invite their contracting and financial management offices into discussions; 

• Requiring that project funds be accepted only at the Director level or higher 

to ensure incoming work will be carried out effectively and efficiently; 

• Instituting a regional remediation plan to review existing task orders and address any deficiencies or areas of concern; 

• Establishing a Contract Review Board for pre-solicitation and post-award reviews; 

• Reviewing all contract actions to ensure compliance with applicable regulations and policies; 

• Revising performance measures to emphasize quality and eliminate the emphasis on volume and revenue; and 

• Requiring a continued review of operating procedures to ensure pre- and postaward and contract administration is effectively carried out.

DISCIPLINARY ACTIONS 

Mr. Chairman and Members of the Subcommittee, in addition to our actions mentioned above, disciplinary action was needed. Prior to this hearing, we provided the 

Subcommittee with a description of the disciplinary actions we have taken against 

certain GSA personnel as a result of the audit. In that letter, as well as in communication with the Subcommittee staff, we name the individuals involved, their positions and the nature and outcome of the disciplinary action taken against each. 

However, for the purposes of this open hearing, and because of Privacy Act considerations, I will limit my testimony today to briefly describing the general disciplinary 

process at GSA and addressing the questions we received from the Subcommittee.

1. How these cases happened at GSA? 

As I have discussed previously, as a result of an OIG audit report on the FTS 

Client Support Center in GSA’s Great Lakes Region, several improper task orders 

and contract awards were identified. Through further investigation, GSA found that 

some of the GSA employees involved in these procurements were engaged in misconduct and were issued disciplinary notices for their actions. These cases were the 

result of those proposed disciplinary actions. Several other personnel actions resulted in non-adverse actions, including official reprimands.

2. Who decides the cases at GSA? 

The GSA Delegations of Authority permits the Heads of Services and Staff Offices 

and Regional Administrators to designate officials in their individual organization 

or region who are authorized to take disciplinary actions. Designated officials are 

usually in the line of authority over the disciplined employee. The type of disciplinary action taken determines who decides the matter. For example, warning and 

reprimand notices are usually issued by the first line supervisor. Suspension and 

removal actions require a proposal notice before a decision is rendered. Therefore, 

there is a proposing official and deciding official.

3. What is the procedure and how are they decided? 
87

The Heads of GSA’s Services and Staff Offices and Regional Administrators are 

responsible for the maintenance of discipline and adherence to the standards of conduct by employees under their jurisdiction. Immediate supervisors have the primary 

responsibility for discipline and initiating appropriate corrective action when it becomes necessary. When a supervisor suspects misconduct has occurred that supervisor conducts an inquiry to secure the facts needed to determine what disciplinary 

action, if any, is warranted. 

As I mentioned previously, disciplinary action can take the form of a warning notice, an official reprimand or more serious penalties such as a suspension, a demotion to a lower grade or removal from Federal service. When an adverse action, such 

as a suspension, demotion or removal, is proposed the agency must comply with 

Title 5, Part 752 of the Code of Federal Regulations, which entitles an employee 

against whom such action is taken certain rights. These rights include the following: 

(1) an advance written notice stating the specific reasons for the proposed action; 

(2) a reasonable amount of time to reply orally and/or in writing to the charge(s) 

against him/her and to furnish affidavits and other documentary evidence in support of the reply; (3) to be represented by an attorney or other representative; and 

(4) a written decision and the specific reasons for that decision at the earliest practicable date. If the employee fails to make either a written and/or oral reply, the 

deciding official will make a decision based on the record as a whole. The decision 

is based on certain factors, prescribed by the Merit Systems Protection Board 

(MSPB), such as the employee’s past disciplinary record, if any, his/her past work 

performance, length of service, the notoriety of the offense and the consistency of 

the penalty with those imposed upon other employees for the same or similar offenses. 

Before applying these factors, the deciding official will make the determination as 

to which charges can be sustained based on the evidence of the record as a whole. 

The deciding official should make this decision independently, free of advice from 

the proposing official. 

After making a determination on which charges to sustain, the deciding official 

must do a full analysis of the case to determine its outcome and then apply the relevant mitigating factors to the case at issue. In order to take an adverse action, the 

deciding official must make the determination that the misconduct at issue is severe 

and the penalty promotes the efficiency of the agency. Also, the penalty should be 

in accordance with the agency’s penalty guide. 

If an employee receives a suspension for longer than 14 work days, a demotion 

to a lower grade or removal from Federal service, he/she can appeal this decision 

to the MSPB within 30 calendar days of the effective date of the action. If the appeal proceeds to hearing, an Administrative Judge will decide whether the charges 

against the employee are sustained and, if so, whether the penalty imposed is reasonable. 

The MSPB will not disturb the agency’s choice of penalty unless the severity of 

it appears totally unwarranted in light of the relevant factors. If the deciding official 

fails to consider relevant mitigating factors, MSPB may mitigate the penalty to 

bring it within parameters of reasonableness, which is determined based on MSPB 

case law.

4. What were the final decisions? 

Four GSA employees from the Great Lakes Region received the proposed adverse 

actions. All four actions were decided by the agency and all involved disciplinary 

actions against the individuals. Three of those cases have been appealed and settled. 

The fourth has an appeal pending with the MSPB. The three settled cases resulted 

in one person being demoted from a GS–15 to a GS–13; one person being demoted 

from a GS–15 to a GS–14; and one person agreed to retire from Federal service in 

lieu of being demoted from a GS–14 to a GS–13. 

The pending appeal also involves a full grade demotion.

MOVING FROM ‘‘GET IT RIGHT’’ TO EXCELLENCE IN ACQUISITION 

Mr. Chairman and Members of the Subcommittee, excellence in acquisition is the 

top priority for GSA. Conducting acquisitions the right way is critical to everyone. 

In July 2004, the Administrator, in conjunction with the Department of Defense, 

launched the ‘‘Get it Right’’ program to help promote proper contracting practices. 

The initiative has led to the implementation of better controls across FTS nationwide, as well as individual Client Support Center management improvement plans. 

‘‘Get it Right’’ has resulted in greatly increased attention to ensuring adequate competition, determining best value and utilizing and properly administering the appropriate contract vehicles. These efforts have been fully supported by GSA’s management team and we believe the agency is making genuine progress in addressing the 

serious contracting deficiencies found in our reviews. As I discussed earlier, the 
88

management team in GSA’s Great Lakes Region fully embraced the ‘‘Get it Right’’ 

initiative, and we have begun implementing a wide-range of program reforms in our 

procurements . 

The ‘‘Get it Right’’ Plan is the foundation for Acquisition Excellence and is based 

on five objectives: 

1. Secure the best value for Federal agencies and American taxpayers through 

an efficient and effective acquisition process, while ensuring full and open competition and instilling integrity and transparency in the use of GSA contracting 

vehicles. 

2. Make acquisition policies, regulations and procedures clear and explicit. 

3. Improve education/training of the Federal acquisition workforce on the proper 

use of GSA contracting vehicles and services. 

4. Ensure compliance with Federal acquisition policies, regulations and procedures. Non-compliance is unacceptable! 

5. Communicate with the acquisition community, including agencies, industry 

partners, the Office of Management and Budget, Congress and other stakeholders regarding the use of GSA contracting vehicles and services. 

While the Get It Right Plan demonstrates our strong commitment to ensuring the 

proper use of GSA contracting vehicles and services in order to be in full compliance 

with Federal Acquisition Regulations and best practices, we view the ‘‘Get it Right’’ 

program as the means to an end. We are committed to excellence in acquisition at 

GSA and we know that that goal must begin with GSA’s strong commitment to ensuring the proper use of GSA contracting vehicles and services in order to be in full 

compliance with Federal laws and regulations and best practices. 

In addition to the regional and programmatic reforms put in place as a result of 

the audit, GSA has implemented better controls within FTS nationwide, and GSA 

has been making genuine progress in addressing the serious FTS contracting deficiencies found in our reviews. 

Our Office of the Chief Acquisition Officer (CAO) has updated policy guidance on 

doing business with other agencies. We are increasing the use of competition in the 

procurement process and raising our own goals for competitive contracting, including small businesses in acquisition strategies and the use of small businesses to 

achieve socio-economic goals. We are also clarifying how to account for other direct 

costs when ordering from a GSA schedule. In 2006, the CAO is launching a multiyear campaign to rewrite the General Services Acquisition Manual (GSAM) and will 

be updating our acquisition regulations to ensure we have clear and explicit rules 

on which our GSA customers and associates can rely. On the national level, we are 

also working on an interagency contracting workgroup that OMB’s Office of Federal 

Procurement Policy has put in place that will once again move us toward a common 

understanding of our responsibilities, both internally and government wide. Also, 

GSA has begun a thorough assessment of our acquisition workforce to determine 

whether they have the skills to ′′Get it Right′′ and to achieve excellence in acquisition. Finally, to ensure that we are doing things right, we are working closely with 

our Inspector General’s office in reviewing our procurements, and our CAO’s office 

has been traveling to each of the regional offices, conducting Program Management 

Reviews (PMR) of contracting actions. These PMRs are not audits, but are independent peer reviews, performed on an annual basis by GSA acquisition professionals; and are designed to ensure that acquisitions functions are in compliance 

with all applicable regulations, policies and procedures, to provide acquisitions solutions, and to identify and share best practices.

CLOSING 

Mr. Chairman and Members of the Subcommittee, in its audit, the OIG raised 

several concerns. You have heard from the OIG directly and I have outlined them 

for you today. Everyone at GSA, from our Administrator and top executives, to our 

acquisitions officials, to our program managers take these concerns seriously. Our 

‘‘Get it Right’’ initiative demonstrates our commitment on a nationwide level and 

we are addressing them on a detailed level within the Region as well. 

Thank you again for this opportunity to speak with you about this very important 

matter this afternoon. We are committed to serious reforms and we are proud of 

our progress in rectifying the problems discovered. I will be happy to answer any 

questions you may have.

Mr. ROGERS. Thank you. And that is exactly what I would like 

to go to first. 

Mr. HANDLEY. Okay. 

Mr. ROGERS. My understanding of the disciplinary actions are 

that there were four individuals that were downgraded or taken 
89

down in pay grade by one level. Nobody was fired. Is that inaccurate? This is $250 million we are talking about. 

Mr. HANDLEY. That is correct, Mr. Chairman. Yes, your statement would be accurate. There have been some departures of people who were involved in the program. 

Mr. ROGERS. Through retirement. 

Mr. HANDLEY. Actually that, but there were also some people, 

frankly, who left. I am speaking now from my region, Region 5 

only, which is in Chicago. 

There were two or three key individuals who departed before the 

I.G. audit findings were finalized and before the disciplinary process began. 

But you were right; there were four what we call adverse actions 

taken. As you pointed out, no one was dismissed, but there were 

mitigating factors which we have to consider in these cases—

Mr. ROGERS. Such as? 

Mr. HANDLEY. Such as mostly as past performance, how these 

people have conducted their—st of these people were long-time federal government employees. And you have to take into consideration their past work performance in issuing any disciplinary action. 

Mr. ROGERS. Are you limited to that by some rules or regulations? 

Mr. HANDLEY. Yes. These restrictions are called—it is something 

called the Douglas factors. And when you are dealing with the 

Merit Systems Protection Board, which on matters of personnel in 

the government are subject to going through their process, you are 

bound by these factors, which are called the Douglas factors. 

And once again, they are basically just past performance. 

Mr. ROGERS. From what I see, these are all pretty well-paid 

folks, GS–13, GS–14, GS–15, and virtually all of these people were 

reduced one grade. That is a slap on the wrist if I have ever seen 

one, particularly given the massive amount of money that we are 

talking about. 

Mr. HANDLEY. Right. Well, it is a massive amount of money; 

there is no question about that. 

Mr. ROGERS. And a lot of questions, too, about the propriety of 

their action. When you look at this unbid contract morphing from 

a $2 million contract to a $200 million contract, ultimately $250 

million, with no competitive bidding and nobody getting in trouble 

for it, and the cameras were not even put up, it makes you think 

that, at a minimum, some people would be terminated for that 

level of incompetence and possible corruption. 

Mr. HANDLEY. Well, frankly, it was proposed that they be released from federal service. But once again, the deciding official is 

bound to consider these factors, which I referred to before, which 

are the Douglas factors—

Mr. ROGERS. Who is the deciding official? 

Mr. HANDLEY. The decision official in this case was my deputy, 

deputy regional administrator in Chicago. 

Mr. ROGERS. And he was the person who was recommending termination or—
90

Mr. HANDLEY. No, the recommending authority was the assistant—not the assistant regional administrator that was there at the 

time of these actions, but the one who subsequently came in. 

Mr. ROGERS. Right. 

Mr. HANDLEY. He was the one who was the recommending official. And then—

Mr. ROGERS. And he recommended termination? 

Mr. HANDLEY. He recommended termination. 

Mr. ROGERS. For one or more? 

Mr. HANDLEY. For, I believe, four individuals. 

Mr. ROGERS. And then your deputy said no? 

Mr. HANDLEY. My deputy, well, he had to consider, as I say, 

these factors. And after considering those factors and deciding 

what was supportable going forward, he made the decisions as 

have been presented to you. 

And incidentally, you know, to a federal employee or to any employee in any organization, when you get knocked down in grade 

and you get taken out of a job, that is a pretty devastating thing. 

Granted, I know what you are saying. Accountability to the taxpayer is paramount; I agree with you wholeheartedly. But in this 

case, the affected people think this has been a pretty severe punishment. 

Mr. ROGERS. Well, the affected people are wrong. The thing that 

we all have to keep in mind what the American people, the American taxpayer, is thinking about this. 

We hear about all of these outrageous abuses and waste after 

Katrina, just on the news in the last couple of days about these 

11,000 mobile homes that we paid $300 million for, they are sitting 

in a field rotting. And nobody is using them or sees any use of 

them in the near future. 

We see this, $250 million for cameras that most, half of which, 

did not go up, and the ones that did go up are not working. I mean, 

it erodes the confidence of the citizenry in the Congress and the 

homeland security. 

So, you know, there is a lot more at stake than just, you know, 

the feelings of these people. 

And my question, I guess, though is: Is it your opinion that, because of that outcome, because your deputy had his hands tied by 

these regulations, these merit system regulations, do you think 

that is one of the other things that should be implemented as a 

consequence, that we ought to be giving more latitude to management to ensure that their employees take responsibility for their 

actions? 

Mr. HANDLEY. I do not see a downside to that at all, sir. I think 

that would be a good thing to do. 

Mr. ROGERS. Okay. I see my time is expired. 

I yield to the ranking member for any questions he may have. 

Mr. MEEK. Thank you, Mr. Chairman. 

Mr. Handley, if I can continue on a line of questioning that the 

chairman was asking, you mentioned I believe the factor where you 

could not fire an individual—what is the name of that? 

Mr. HANDLEY. The Douglas factor. 

Mr. MEEK. Douglas factor, okay. I am familiar. That was a mitigating factor—
91

Mr. HANDLEY. Right, they are. 

Mr. MEEK. —looking at all of those different disciplinary opportunities that you may have based on past performance. I am familiar with it, but the name slipped my mind there quickly. 

These individuals could have been suspended, am I correct? 

Mr. HANDLEY. They could have been. 

Mr. MEEK. For a period of time? 

Mr. HANDLEY. Yes, that would be one of the recommendations 

that could have come. 

Mr. MEEK. Right. Were they? 

Mr. HANDLEY. I do not believe so. Of these four individuals, I do 

not think they were suspensions. They were demotions. 

Mr. MEEK. And I think this thing is a lot bigger than the four 

individuals. I think they have some bosses and some other folks 

that kind of knew that something was going wrong here. 

When you are talking about $250 million, that is an awful lot of 

money, even on the federal level. And we are talking about border 

security. This is not some study that was done in the university 

and the money was spent in a way that it should not have been 

spent. Some universities wish they could get $250 million. 

I represent a district, if someone misspends $1 million, they will 

have the federal prosecutor trying to prosecute them for misappropriation of these dollars. 

As far as your agency is concerned, as it relates to disciplinary 

action or any further action, are you done with your whole inquiry 

and disciplinary action, not only on behalf of the four, but possible 

others that could be involved in this? 

Mr. HANDLEY. This, as we see it, is the end of the issue. 

Mr. MEEK. Okay. So you are saying that the individuals that 

were disciplined, that they actually went through being demoted a 

grade, that the department sees it as quite severe? 

Mr. HANDLEY. Yes. One of the four cases, Congressman, is still 

pending appeal. But I would have no reason to believe that it will 

be overturned, but it is pending appeal. 

Mr. MEEK. If someone at the department was to take one of your 

vehicles and crash it, what do you do with them? Do you demote 

them, or do you fire them, or what do you do with them? 

Mr. HANDLEY. I think it depends on the circumstance. If they 

were negligent, I am sure we would fire them, that they would undergo some kind of a warning or disciplinary action, once again depending on the merits of the case. 

It is hard to make just a blanket statement regarding that, because there could be any set of circumstances you can imagine, I 

guess. 

Mr. MEEK. We are not looking for blood here; we are just looking 

to make sure that bad behavior is not rewarded. And I am going 

to tell you, I have been in a career service setting before in my professional career. And I have seen people dismissed, and I mean dismissed for far less than wasting $250 million. 

Mr. HANDLEY. Right. 

Mr. MEEK. So, with all due respect, sir, it is kind of hard for me 

to believe that, because of all of the mitigating factors that is involved here that these individuals only got demoted just one step 

down. 
92

And that is the reason why we have this era of one may say cronyism. And folks get turned off with government. This is the perfect example. 

Now, we have to continue to march on, on this issue, and push 

the department to hopefully come up, not only with better answers, 

but with better action. 

If someone in an office in the same?what are they doing now? 

Are they over at some procurement program? Are they still in the 

business, in the area of where they were? 

Mr. HANDLEY. They are out of any management responsibility 

now. 

Mr. MEEK. What are they doing? 

Mr. HANDLEY. Well, one of the people transferred to another 

service within GSA. And she is out of the management chain. The 

one gentleman, as I say, he is still pending appeal. One of the four 

people retired. 

And the other lady has been demoted to a non-supervisory role 

in the same service. She is no longer involved in acquisition. 

Mr. MEEK. Are they doing any contracting whatsoever? 

Mr. HANDLEY. No. 

Mr. MEEK. None of them? 

Mr. HANDLEY. No. No. And we have implemented a whole new 

policy of oversight in that area. We have got much stronger reviews. 

Once again, I am not saying that we were not negligent, we did 

not make a lot of mistakes. But we do have the measures in place 

now which I think will address a lot of this. 

And I know any certain amount of money, to me, is a big amount 

of money, even a few million dollars. 

But when we speak of $250 million, when this whole thing is 

said and done and we come up with a final determination of what 

money was squandered or what did happen, the number will be far 

less. I mean, there was some value that did occur within this $250 

million which we are talking about. 

Once again, Congressman, I am not saying that any amount of 

money in the millions is not substantial; to me, that is a lot of 

money. But it will not end up being a squandering of $250 million. 

Mr. MEEK. Maybe a question for both of you. You are on our way 

to the America’s Shield Initiative, and I am pretty sure we are all 

familiar with it. We call it ASI. 

What are the corrective actions to make sure that we do not?you 

are speaking of it very loosely by saying we have things in place. 

It just seems like, time after time, in this committee, Mr. Chairman, and the department, and I am dealing with the federal dollar, 

that it is a lot of after the fact. And there is a real what one may 

call incompetence tax that the American people are paying. 

These are the dollars that just fall down a black hole and they 

have no real public benefit to it. And I do not know if anyone is 

really accumulating the numbers, but it is in the billions. 

And so, when folks start talking about saving the taxpayers’ 

money, I mean, this is very, very important work. So I am just trying to figure out, because I know now, dealing with the issues, 

dealing with Katrina and all the other issues that we have out 
93

there, we are supposed to have this accountability arm with the inspector general being a part of the whole contracting experience. 

Can you explain to me a little bit more how we will never go 

down this road again or prevent going down this road again? I hate 

to say never, because I know folks are human. But at the same 

time, I do not understand it. 

If I was to tell you, if you were to walk out this door, and there 

is some water on the floor there, and if you step in it you are going 

to slip, you may step in it the first time, and slip, and say, ‘‘Well, 

you know, Kendrick told me that that water was out there.’’

But you go there the second time, you are going to be looking to 

the right. Well, in this case, we walked out of the door well over 

10 or 15 times, in my little short time here in Congress. 

So I am trying to figure out, how can we stop stepping in the 

same puddle? So can you just elaborate a little bit more? Because 

this exercise is more than who did it; this is about making sure 

that we do not continue having Groundhog Day all over again, 

talking about the things that we are talking about constantly. 

I would like to talk about forward progress here. 

Mr. HANDLEY. Right. 

Mr. MEEK. But we are spending a lot of time talking about what 

just happened yesterday, because we talked about it last week and 

we thought it would be corrected, and we just continue to do the 

same thing. 

Mr. HANDLEY. Right. 

Mr. MEEK. So, Mr. Chairman, I know I have gone over my time, 

but, you know, I think we do have enough time to try to get a better understanding of how this will not happen again. And, of 

course, let’s continue to have the discourse on where the department is headed. 

Mr. HANDLEY. My written statement does have an enumeration 

of some of these things. But let me just go over a couple which are 

very key to our oversight today, which we did not have in place at 

the time this occurred. 

We now have project review panels in the services that review 

these things, and discussions with the customer agency occur in a 

much more meaningful fashion to get better understanding going 

forward of exactly what is expected of all parties. 

We now review all acquisition plans, and any acquisition plan 

which involves a project of over $100,000 has to be signed off on 

by me, and only after it is reviewed by the true professionals in our 

organization. 

In our region, we have what is called a regional acquisition management staff. They review it for all technical aspects, and then it 

goes to our regional council. They sign off on it. And not until then 

do I sign it. 

As pointed out earlier, we have a process now where these 

things, which may originate—much of this originated at a place 

called Wright–Patterson Air Force Base in Dayton, Ohio. Those 

folks no longer have the authority out there to sign off on a project 

of anywhere near this magnitude, and now has to go to Washington, D.C., for a review by the proper acquisition folks. 

Let’s see. We now have a system whereby the agency, the customer agency, verifies the source of the funds, the proper year, allo-
94

cation or appropriation of the funds. And that has to be certified 

before we can go forward. 

They have been enumerated. I will be happy to provide you additional information on that, but those are a few of the things which 

we now have in place, which I think will avoid this—I do not know 

that we will ever avoid the black hole you spoke of. 

I suppose there will always be waste. Hopefully we can minimize 

it. We think many of these things that we put in place will help 

GSA minimize that exposure. 

Mr. MEEK. Towards that initiative, Mr. Chair, as I yield back, I 

just want you to think about it, because I am pretty sure we are 

going to have another round. 

I just want to make sure that—I want to talk to you about the 

staffing and the enforcement of what you just explained. 

Because many times we start initiatives, and if there is 10 people 

in compliance—I am just taking a number; I am not saying that 

there is 10—and you put these new responsibilities on them, and 

it is still 10 people, if they could not comply with the old rules, how 

can they do it with the new rules and all of the steps that you just 

talked about? 

When we talk about streamlining government, nine times out of 

10 compliance does not play a very strong acting role in that particular situation. 

So if you can think about that, maybe in the next round of questions we can talk about it and go from there. Thank you for your—

Mr. HANDLEY. Thank you, sir. 

Mr. ROGERS. I thank the gentleman. 

The gentlelady from Texas is recognized for any questions she 

may have. 

Ms. JACKSON-LEE. Mr. Chairman, I want to thank you and the 

ranking member for consistent, valuable hearings that we have had 

over the period of time. 

And I will beg the indulgence of the witnesses. I may stay for a 

second round, but I do want to have a corrected record for something that I find enormously important, and that is the title of this 

committee is Management, Integration and Oversight. 

And so, as we are looking at lessons for the new border initiative, 

which I believe are extremely important, and I understand that 

there are some benchmarks, Mr. Handley and Mr. Giddens, that 

we may not have met as of yet. 

Just a couple of hours ago, we were in this committee with the 

secretary of Homeland Security, Mr. Chertoff. Unfortunately, we 

have not, although this committee has been?and at the full committee, excuse me—has been organized for at least one session, and 

we did so in order to be at the cutting edge of protecting America. 

In this instance, we are talking about border security, but there 

are issues such as intelligence gathering, and there are issues dealing with natural disasters. 

I was frustrated that, in a time when we need to be moving forward in our oversight, that Mr. Chertoff, who has spent few hours 

before our full committee, the last time appearing here on July 

2005, thought that lunch for more than an hour and 15 minutes 

was more important than addressing some of the severe manage-
95

ment deficiencies that I believe resulted in 1,300 people dying in 

the gulf region. 

Now, we can look prospectively, and I think that is key. As I 

said, I applaud the chairman and the ranking member, because 

this committee has been, I think, at the cutting edge of trying to 

improve the workings of the Department of Homeland Security. We 

have been meticulous in that work. 

But I cannot imagine, despite all of the editorial comments about 

Katrina fatigue, how sad that is, that we in Washington would tolerate a cabinet member who infrequently comes to the Hill, particularly before this committee. 

And let me say that I intend to mind my manners, because I do 

not usually speak when someone is not present. But Mr. Chertoff 

had an opportunity to stay and to allow members to question him 

rather fully. But again, as the record will reflect, and I stand ready 

to be corrected, he had to go to lunch. 

The chairman of the full committee attempted to indicate that 

my facts were wrong about why Mr. Chertoff was leaving or that 

he had an appointment. He had an appointment at 1:30, and we 

were forced to end the hearing at 12:15. 

So if there is an explanation to you gentlemen, who are clearly 

part of the family, and not necessarily in the line of fire in this 

sense, dealing with Katrina, whatever ways that you are able to 

communicate with the secretary, let it be known that America is 

watching and that these positions are privileged positions. 

They do not belong to an individual; whether it is elected or appointed, you are a servant of the American people. 

And if we are attempting to ask hard questions about why 1,300 

people died, if we are trying to find out why there is an e-mail fight 

when CNN made it very clear that the levees were breaking between the 29th and the 30th, why you felt there was no reason, as 

the controller general indicated, to designate a designated leader to 

lead and coordinate the efforts. 

And I think that management, integration and oversight, we certainly failed in management of the Homeland Security Department. And I believe that this committee failed in its jurisdiction or 

its duty by defining the hearing as a budget hearing, as opposed 

to a hearing to address some of the immediacies. 

My comments are that, if this was a terrorist act and the levees 

had been imploded by terrorists, foreign or domestic, we would be 

having hearings, upon hearings, upon hearings, and rightly so. 

But because there are people suffering in the Gulf Coast who are 

homeless, who are without businesses or work, because their faces 

represent the faces of America in all their diversity, we go on with 

business as usual in the United States of America. 

The secretary of homeland security has to go to lunch, while I 

am facing thousands upon thousands of constituents in Houston, 

Texas, who are literally homeless, suffering traumatic experiences 

day after day, because they have no place to go. 

I do not know what kind of country we are living in; I do not 

know what kind of leadership we have. But I would say that this 

represents, in my mind, one of the biggest failures of a department 

and a nation that we could ever imagine, and as well I restate my 

call for Mr. Chertoff to be fired, reprimanded or censured, because 
96

I see no passion, no concern whatsoever in the presentation that 

he made here today. 

And, Mr. Chairman and the ranking member, let me—I know 

there will be a second round. Thank you for your indulgence. 

And I would simply say that I hope it may be that you have 

heard enough and that the committee that was so designated 

might have been sufficient, but I would just argue this. 

I would not want to pursue going over what happened—I am certainly frustrated—but I do think this committee would be well in 

its jurisdiction to prospectively go forward and find out, not 6 

months down, Mr. Chairman, or what we are doing, but why did 

not the secretary come here and say, ‘‘In 10 days, we will be back 

before the full committee with a directed plan that answers the 

tragedy of Katrina’’? 

We do not when we will hear from him again, and I would like 

this committee to make the request that Mr. Chertoff either be before us or others talking about a concrete plan, as we face hurricane season of 2006. 

Is anybody home? Are the lights on in America for those who are 

suffering? 

I yield back, Mr. Chairman. 

Mr. ROGERS. And I thank the gentlelady. 

I would like to revisit the disciplinary action subject. 

Mr. Handley, specifically—and I ask Mr. Giddens to offer the 

same response, or a similar response, or a response to the same 

kind of question—specifically, what would you suggest be done differently that would allow you the latitude to appropriately discipline an employee that made a similar misjudgment in decisionmaking in the future? 

Mr. HANDLEY. Honestly, Mr. Chairman, I do not know. I am not 

an expert in H.R. And without much more background, I do not 

feel qualified to answer that question. 

I think you do have to consider extenuating factors when you are 

talking about disciplining individuals. I just do not feel qualified to 

answer that, but I will give it some thought and provide an answer 

to you by consulting with others, if you would like? 

Mr. ROGERS. I would. 

Mr. Giddens, with SBI going forward, if a similar problem arose, 

what would you like to have in place to make sure that you were 

able to appropriately discipline your subordinates? 

Mr. GIDDENS. Sir, I think the first thing I would like to have in 

place is a process so that those issues could identify, while they are 

still young, and do not continue and continue for a month and 

month. 

And I think that is one of the lessons that we have to learn on 

our side, is to set up a structure to really manage our acquisitions 

and to bring program management and systems engineering discipline to manage those and provide a leading indicator so that we 

get insight. 

Mr. ROGERS. And do you have those in place now? 

Mr. GIDDENS. We are building those, sir. And, for example, our 

program management plan, which would detail our roles, responsibilities and processes, we will have that in place before we make 

the award of SBI Net this September. 
97

So we are in the process of building those. And we are leveraging 

other programs. We are also inviting in a third party to come in 

and do an assessment of where we are in our planning process, and 

try to bring ideas from outside the department to help us make the 

best acquisition plan and then execute that well going forward. 

Mr. ROGERS. What do you anticipate the cost of SBI, the border 

security technology component to be? What do you anticipate the 

cost of that program being, given that it is going to be for the entire border, not just 5 percent like ISIS? 

Mr. GIDDENS. Sir, that would be a question I will need to take 

back. We have not yet done an independent government estimate. 

It is a different program than the ASI program, and it is not just 

a technology piece; it is more inclusive. 

Mr. ROGERS. Right. 

Mr. GIDDENS. It will be a large investment and will be worthy 

of this committee’s insight. 

Mr. ROGERS. But you acknowledge that the technology component will be a multibillion-dollar component? 

Mr. GIDDENS. Yes, sir. 

Mr. ROGERS. And we have every reason to be apprehensive going 

into it, based on this more limited program and how it went awry. 

Mr. GIDDENS. Yes, sir. 

Mr. ROGERS. Let me ask, one of the things I noticed in preparing 

for this hearing was that the procurement officers in ISIS had a 

responsibility for, as I understand it, around $13 million worth of 

contracts, which was double the normal recommended government 

level of contracting. And in the private sector, I understand it is 

$5 million. 

Your background is in procurement. Are you familiar with that 

at all? 

Mr. GIDDENS. Yes, sir. I am familiar with that, through reading 

the various I.G. reports and audits. 

Mr. ROGERS. What level of responsibility would the procurement 

officers in your SBI program be shouldered with? Would they maintain those reasonable levels of responsibility of $7 to $8 million? 

Mr. GIDDENS. Well, sir, part of it would be the dollar amount and 

part of it the complexity and the number of the transactions. 

If they are managing, from a procurement perspective, the acquisition of a single end item that is a large dollar value item, even 

say it is $100 million a single item, they may be able to manage 

that, where if you have four different items that are $20 to $25 

million with a lot of transactions, then they may not be reasonable 

for that one person to load. 

One of the things that we have done within DHS and in CBP is 

really added procurement staff in preparation for ASI and now for 

ASI Net, to make sure that we have got a better balance of that. 

I mentioned early the third-party review. We will also, as part 

of that third-party review, we will have a staffing review to give 

us insight based on some best practices across the government on 

what should be the right level of staffing to support this activity. 

Mr. ROGERS. Let me ask both of you to answer this. Going forward with this SBI program, which all of us would acknowledge is 

critically important to our nation’s future security, can each of you 

tell me, with a high degree of confidence, that we will not see the 
98

same types of mistakes made and abuses occur with SBI’s technology component that we saw with ISIS? 

And I will start with you, Mr. Handley. 

Mr. HANDLEY. Thank you, Mr. Chairman. If we were fortunate 

enough to be their agent in future endeavors, I can assure you that 

we will have things in place that will not put us here in front of 

you again. 

We will do a much job. We think we have got those things in 

place today. As I like the say, the proof is in the pudding. But I 

think, yes, we can assure that we would do a much better job. 

Mr. ROGERS. You have got those things in place, except for the 

ability to discipline your employees when they go off the—

Mr. HANDLEY. That is correct. And I think that is a fair question, 

and I will consult with people within GSA. And maybe they will 

have some others that we will talk about, and we will get back to 

you on that. 

Mr. ROGERS. Thank you. 

Mr. Giddens, the SBI is your baby. Do you have a high degree 

of confidence that we will not have this same problem, going forward with that technology component, as we saw with ISIS? 

Mr. GIDDENS. Yes, sir. I have a high degree of confidence that 

I can assure you we will not have these kind of problems. 

But, sir, I do not want to sit here and assure you that we are 

not going to have some type of problems. This will be a complicated 

undertaking, and we are going to manage it and work to have the 

right processes, procedures in place to be good stewards. 

But we do not want to learn this lesson again. 

Mr. ROGERS. My time is up, but I would like to ask the same 

thing of you I ask of Mr. Handley, and that is I would request that 

you go back and look at your options for disciplining employees 

who are just as abusive with their power as these people were with 

ISIS. 

And let the ranking member and me know if you do not have all 

of the options available that you think you need to run a tight ship. 

Mr. GIDDENS. Yes, sir. 

Mr. ROGERS. Because if you have got some suggestions, there are 

things that we can recommend, as far as changes, we will be happy 

to champion that cause for you. 

Mr. GIDDENS. Thank you, sir. 

Mr. ROGERS. I yield back. 

Now the ranking member is recognized for any questions he may 

have. 

Mr. MEEK. Thank you, Mr. Chairman. 

Mr. Handley, you have been in and out of this process over a 

number of years. And you have been in situations where you have 

been in the administrative level and making decisions on staffing 

and FTs, where you were authorized through Congress. 

It runs along the lines of what the chairman was just speaking 

with the director on. Do you feel that you have what you need to 

be accountable with the taxpayers’ dollars, as it relates to the programs that you outlined in the first round of questioning, as it relates to compliance? 
99

Mr. HANDLEY. I believe we do, sir. I think we can always hone 

the process, and I think you have some of the very people in this 

room today who were involved in that. 

And we get your message loud and clear, and I think we will 

be—we have within GSA a Human Capital Council, which is very 

much involved in looking at those areas which are what we call our 

mission-critical occupations and things like that, where we can 

definitely do a better job. 

Mr. MEEK. Well, let me just say this. My question in the last 

round was: Do you still have the same number of individuals that 

are working on compliance within the GSA, prior to your new initiative, of all of the benchmarks that one has to go through to get 

a certain dollar procurement order through? 

Is it the same group? It is the same five? It is the same 10? What 

do you have? 

Mr. HANDLEY. No. It is not the same people doing the review at 

this point in time. As you might expect, these things change. All 

these jobs within the government are works in progress, because 

you have people coming and going and whatnot, and you have different directives and things you have to abide by. 

But, clearly, we have a different group of people reviewing programs in the Great Lakes region. And my guess is that, across the 

country and all regions of the GSA, there are a lot of new people 

looking at these things. 

Mr. MEEK. Mr. Giddens, do you feel that, as it relates—I know 

that you are just getting really into your capacity of what you are 

doing now, but do you feel, again—I know that the chairman asked 

you, but I am asking you again, because the department is constantly in the news about mismanagement of the public dollar. 

And it is not your fault. It is not something that you need to 

brunt on your shoulders, saying that I am here wearing the badge 

of the Department of Homeland Security, but I just want to make 

sure and I want to be crystal clear, because I think—and I know 

it is not a light thing to come before Congress, and testify, and 

start speaking in sentences and putting a period at the end. 

We know that there will be issues, but it is not every day that 

we have $250 million issues, especially when it comes down to protecting the borders of the United States of America. 

Do you have what you need, sir, again to be repetitive, to be able 

to make sure that we are not having another hearing like this anytime soon? 

Mr. GIDDENS. Yes, sir. We have resources in place and are growing resources, as well, as we prepare to make the award and then 

execute the contract for SBI Net. 

Mr. MEEK. When you say ‘‘growing resources,’’ could you elaborate? 

Mr. GIDDENS. Well, we have, based on the 2006 appropriation—

Mr. MEEK. This is the $51 million? 

Mr. GIDDENS. No, sir, that was a 2005 appropriation. 

Mr. MEEK. Okay. 

Mr. GIDDENS. But there was staff included in the 2006, and CBP 

has taken that staff, and is building their program office, and putting those people in there. And they have already started that back 

in January. 
100

And we are confident that they are putting together the right 

staff. We are going to do a third-party staffing assessment for that, 

to get an outside set of eyes on that. 

But yes, sir, I am confident we are putting the right processes 

and resources in place. 

Mr. MEEK. You know, Mr. Chairman, I mean, hearing the witnesses, I mean, it is almost like they are hear and they are saying, 

‘‘Hey, listen, we are with you all. We are all in this thing together. 

We want to do the right thing. No one set out to waste $250 million.’’

I think we need to go a step further. I mean, I would like to, Mr. 

Chairman—and I know that if we can both make the time—to kind 

of figure out who are these individuals that are carrying out the 

duty of watching over the taxpayers’ dollars? 

Of course, we are the stewards of appropriating constitutionally, 

but I am talking about the individuals that are down there punching in and out every day, taking a 30-minute lunch break. 

I think we need to interface with those individuals, because they 

will not come and sit at that table. But we need to kind of find out 

how well this program is working. 

I think it is where the money that has been wasted thus far, and 

also the mission to protect our borders. So I look forward, hopefully—and I do not know if GSA is going to be a part of that experience, but, if they are, I think it is worth a field trip to wherever 

these individuals are who will be carrying out the procurement responsibilities for this. 

I really want to know the compliance end of it. You know, who 

is looking at it, outside of the inspector general? Because they are, 

like, after. They are almost like—they come up and they write the 

report after it is done, for us to call you to the Hill to come give 

your side, and the money is already spent. 

So, Director, I look forward, as you start moving into your procurement stage—you said September of this year, am I correct, sir? 

Mr. GIDDENS. Yes, sir. 

Mr. MEEK. So I am assuming somewhere in August that you will 

be almost—you would have almost accomplished what you needed 

to accomplish to get the people in place to be able to oversee, not 

only the letting of the contract, but the responsibility for oversight 

and compliance. 

Mr. GIDDENS. Yes, sir. 

Mr. MEEK. So if you could please commit to keep the committee 

in writing informed on the forward progress of this, it will be very 

helpful to us, so that we can take the appropriate field trip and 

meet with the individuals that are maybe four or five tiers under 

you, have an opportunity to have a conversation with them. 

I think it would be well worth all of our time, so that we can understand, because I am not going to rely—you may move on to another position. But I want to make sure that that principle is in 

there with those individuals and they feel good about the process. 

Because they do not set out to do wrong; they set out to do right. 

Mr. Chairman, I yield back my time. 

Mr. ROGERS. I thank the gentleman. 

The gentlelady from Texas is recognized for another round of 

questions. 
101

Ms. JACKSON-LEE. Thank you very much, Mr. Chairman. 

Let me just, Mr. Handley, acknowledge your work. And I am 

going to pose questions to Mr. Giddens, because I am well aware 

that you had to take the contract over and obviously were working 

in the framework that GSA works as a procurement entity, not 

really one that has the standard informational background, but you 

put the nuts and bolts together. And I appreciate that. 

But, Mr. Giddens, let me thank you for your work that you did 

previously in the deepwater effort. And I know this was another 

life that you had, but I always want to take an opportunity to 

thank the Coast Guard for the work that was done during Hurricane Katrina. 

So I just want to offer that appreciation and thank you for your 

work. 

We have a serious state of affairs. And you will find that I will 

weave in and out of the ongoing episodes and scenarios that are occurring in the Gulf Coast. 

I will cite for you the expenditures of a no-bid contract with one 

of the major engineering firms that generated 10,000 mobile homes 

that are now stuck in the mud in Arkansas for $431 million. 

That brings me to what I understand is an expenditure of $439 

million for only 4 percent coverage of the border, is what I am understanding. And I am certainly going to yield to you to try to help 

me understand where you are at this point. 

The other thing is that, coming from the southern border—and 

I recognize the importance of both borders, having been to both of 

them, walked alongside the border on both ends—that we still are 

operating, I believe, with the same technology, the same equipment, the same infrastructure. 

And even though we have this new Secure Border Initiative, it 

is my understanding that we have not made any steps forward on 

this equipment or that we are having any personnel who are engaged in operating the equipment or functioning in a way that 

should be. 

You came to this position when, Mr. Giddens, the position that 

you hold now? 

Mr. GIDDENS. I believe it was last October. 

Ms. JACKSON-LEE. About last October. And have you met with 

Secretary Chertoff on these issues dealing with the failing border? 

Mr. GIDDENS. Yes, ma’am. 

Ms. JACKSON-LEE. And when did you have that meeting? 

Mr. GIDDENS. I met with him several times, on the Secure Border Initiative and where we are moving forward as part of that program. 

Ms. JACKSON-LEE. Specifically, however, when you have met with 

him several times, this figure leaks out that we have spent $439 

million and only 4 percent of the border is now seemingly covered. 

In the meetings, was this your Secure Border Initiative team or 

was this—what framework of a meeting was this, please? 

Mr. GIDDENS. The meeting was on the Secure Border Initiative 

and it is generally with the secretary and the component heads 

within DHS. Assistant Secretary Baker and myself were there from 

Secure Border office. 
102

And really the intent of that is to ensure there is good communication, coordination, integration across the department. But, 

ma’am, as you can appreciate, it is an issue that is outside of Border Patrol. CPB has a role. ICE has a role. And a lot of agency 

components within the department have a role. 

And the secretary—we meet with him, usually it is once a 

week—to go over current status and issues on the program. 

Ms. JACKSON-LEE. Very good. I wish he had given that much attention to Hurricane Katrina, as well. 

Did you report to him the status of this particular—I will give 

him status reports as it relates to the Secure Border Initiative, the 

ongoing concerns about the equipment and also the limited amount 

of coverage that we are getting? 

Mr. GIDDENS. Yes, ma’am. That is one of the reasons that he has 

been so aggressive with us and getting this awarded so that we can 

start upgrading that equipment and provide an integrated suite of 

tools for the men and women—

Ms. JACKSON-LEE. Tell me, what do you mean by aggressive? 

What has he done? And I am very interested, because I would like 

to see some progress being made. 

Mr. GIDDENS. One of the things that we have done is within the 

department and CBP, we stood up the program office to gather requirements, release the RFP, do a source selection, and make a 

competitive award by September. 

Ms. JACKSON-LEE. So this was a competitive-bid, as opposed to 

a no-bid contract? 

Mr. GIDDENS. It will be a competitive bid. 

Ms. JACKSON-LEE. It is forthcoming? 

Mr. GIDDENS. Yes, ma’am. 

Ms. JACKSON-LEE. And when do you expect that? I did not hear 

what you said on the time frame. 

Mr. GIDDENS. This September. 

Ms. JACKSON-LEE. This September is going to be when the RFP 

is going to be out or—I am not hearing—

Mr. GIDDENS. It will be awarded this September. 

Ms. JACKSON-LEE. So is it out on the street now? 

Mr. GIDDENS. No, ma’am. I anticipate that going out the first 

week of April. 

Ms. JACKSON-LEE. Okay. And in your mind, do you think that is 

as fast as it could be done? 

Mr. GIDDENS. Yes, ma’am. And the challenge is there is a great 

need on the border. And our job is, through the acquisition process, 

provide those tools and equipment. 

I appreciate your comments about the work that the Coast Guard 

does and that they did relative to Katrina. And I am not ashamed 

to say that, you know, one of the things that touched me about that 

is when we saw Coast Guard helicopters rescuing people. 

And those were helicopters that our office helped set in place to 

re-engine—

Ms. JACKSON-LEE. Outstanding. 

Mr. GIDDENS. —so that we could pluck people off of rooftops and 

out of danger, to make those helicopters safe and reliable for use. 
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So I do not make any bones about that acquisition is something 

for the bureaucracy. It is in the?to provide capability and capacity 

to the men and women in federal service on the front lines. 

And I think your reference back to Katrina, the thing I thought 

about was seeing those HH–65 Charlies that we, within 7 months, 

had test flights of new engines on those so that they could be a safe 

and reliable asset to go out and do business when called upon. 

That is the same kind of focus, the same kind of passion that we 

are going to have within SBI. I made a trip to the border; I have 

seen the equipment that they have had for 20 or 30 years. 

I have seen the cameras that ISIS—I actually mounted and was 

actually in a control room when those cameras saw people jumping 

over the fence. And they were able, because of those cameras, to 

stop those folks and catch them. 

So there is some benefit out there, as well, from these cameras. 

They are in operation now, and they are providing service to the 

Border Patrol. But that is not enough. We have to do more. 

And it is not just the technology; it is providing command-andcontrol capabilities to allow sound operational decisions to be made 

by Border Patrol agents that work in a very dangerous environment. 

We need to give them all the information they can to have situational awareness and then the response capabilities in order to 

carry out their mission. 

Ms. JACKSON-LEE. Well, Mr. Giddens, we are very lucky to have 

you. 

And let me just close by saying: Are you comfortable that the 

procurement process that has generated no-bid contracts at the 

very early stages, again, of Katrina, and that have not been effective, are you confident that, as you move forward in the procurement process going forward there are sufficient structures in place 

that, one, the equipment is going to be or the contract is going to 

generate superior type service, similar to what you have recounted 

in what you did previously in the Coast Guard? 

And, by the way, the Coast Guard was literally the saving grace 

of anything that occurred down in that region. 

But are you confident? And are you confident that you will have 

an ongoing relationship, not with deputies, not with assistant secretaries, but are you confident that Secretary Chertoff is going to 

actually be in place, knowing what is going on, monitoring what is 

going on, listening to your input, such as you can convey that to 

this committee? 

Mr. GIDDENS. Yes, ma’am. 

Ms. JACKSON-LEE. I look forward to that, and I look forward to 

not you, Mr. Giddens, in front of this committee, but I look forward 

to Mr. Chertoff appearing and being able to be as articulate as you 

have been, and as knowledgeable as you have been, and certainly 

as committed. 

I yield back. 

Mr. ROGERS. I thank the gentlelady. 

I would like to pick back up with the line of questioning that I 

was pursuing with Mr. Handley but with Mr. Giddens instead. 

Before this hearing, I would ask both—I had directed my staff 

to inform both your offices I wanted you to be prepared to talk at 
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length about the disciplinary actions that were taken by employees 

in your department. And I have pursued that with Mr. Handley. 

But several of the employees involved in this ISIS abuse were 

Border Patrol officers. In reviewing the statement that you submitted to the committee prior to this hearing, I did not see any reference to any disciplinary actions by your department or Border 

Patrol for the actions of any of its employees. 

Could you update us and let us know what, if any, disciplinary 

actions have been taken against any Border Patrol officers who 

were involved in the ISIS program? 

Mr. GIDDENS. Yes, sir. There have been no disciplinary actions 

with any of the INS, former INS employees, or the CBP employees. 

The people that were involved in initiating this program within 

INS are no longer with the federal government. 

The people that to a degree inherited this program, and started 

raising some of the issues and concerns, and then took actions to 

try and working with GSA to shut it down and to end it, they are 

not working on SBI. They have been reassigned. 

But again, those were people that inherited it and started working through issues, and then said, ‘‘Hey, this is not working. We 

need to get out of this contract.’’

Mr. ROGERS. So let me make sure I understand. The employees 

that were affiliated with this project that have some culpability in 

this abuse are no longer with the federal government? 

Mr. GIDDENS. The Federal government, yes, sir. 

Mr. ROGERS. And those that came in to clean it up are the folks 

that you have left? 

Mr. GIDDENS. Yes, sir. 

Mr. ROGERS. Okay. That is all I have got. 

I yield to the ranking member for any additional questions he 

may have. 

Mr. MEEK. Well, Mr. Chairman, I really do not have any further 

questions. I believe that our two witnesses have tried to answer the 

questions to the best of their ability. 

I just wanted assurances, a, that disciplinary has been carried 

out as far as it can be carried out. The last we want are media reports and other reports about individuals that mishandled $250 

million still being upheld by the department, by both departments, 

as though it is just another day at the office, because it is not. 

Also, I heard in testimony from both of our witnesses that corrective action and standards have been put in place to make sure that 

this never happens again or come close to never happening again, 

especially not at this magnitude, in dealing with the issue of border 

security. 

Director Giddens, I know that one of the things that you spoke 

on a little earlier was the fact that you are taking the appropriate 

staffing to start letting the contract Ms. Jackson-Lee was sharing 

with you. 

And I know that Undersecretary Michael Jackson mentioned 

that it will be—you said it will be out in April? 

Mr. GIDDENS. The first week of April. 

Mr. MEEK. Okay. And was mentioning March. I hope we do not 

start—you believe first week in April. You are pretty confident 
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about that, that we could start moving forward in the procedure of 

getting that contract out on the street. 

I hope that you have what you need in place to make sure that 

every t is crossed and every sentence, at the end of it, has a period 

there, or every I is dotted, because we do not want this to be 

Groundhog Day again. It will be embarrassing for this committee. 

And I will tell you right now that this committee does not want 

to be embarrassed, especially with the taxpayers’ dollars, because 

people stand in judgment of all of us on this committee on a given 

Tuesday every 2 years. 

And I do not want to have to explain to them that we did not 

do everything that we could possibly do to make sure that the taxpayers’ dollars are not wasted again. 

So I am not putting that on your shoulders; I am just putting it 

out there to the department, both departments. We have direct 

oversight over Department of Homeland Security, and so I am 

speaking to you directly. 

Hopefully that message will get back to as high as the secretary 

of the department and anyone in the White House that oversees 

policy at the department, that we all have a responsibility. 

We are elected, you all are selected to lead. By us being elected, 

we have a higher responsibility to the American people, because by 

the fact that they elected us to represent them gives us the authority to ask the questions that we asked and to carry out the oversight that we must carry out. 

Mr. Chairman, I just want to say in closing I am so glad that, 

since the formation of our subcommittee, that we have continued 

to stick with this issue. And this is not the end; we will continue 

to stick with this issue all the way through. 

I just want to commend you that, on this issue, we have really 

worked in a bipartisan way, Mr. Chairman, equally signing letters 

together, putting forth legislation to make sure that we do not approach this particular threshold again. 

And it is a pleasure to continue to work with you on this; unfortunately, it has to be under these circumstances. 

Mr. ROGERS. Thank you, witnesses. 

I thank the gentleman. 

The chair now recognizes for any final question Ms. Jackson-Lee 

of Texas. 

Ms. JACKSON-LEE. Thank you. I want to echo the comments of 

the ranking member in how this committee in general as worked. 

As you well know, we have overlapping hearings. In fact, my 

hearing is going right now with the economic infrastructure, but I 

wanted to be here because I thought the management of a department, Mr. Chairman and ranking member, are clearly, I think, at 

the heart and soul of the service to the American people. 

I keep hearing the question, and I did not hear the answer, of 

what kind of disciplinary action. And, forgive me, did someone answer whether they are in the process thereof of addressing the 

question? 

And I might say this, because it would seem that we would take 

pleasure in being able to sit three or four feet above the witness 

table and make comments about people’s livelihood or future. 
106

And, frankly, I would rather be giving out accolades, and Congressional Medal of Freedom, and a number of other citations, to 

be able to compliment what is going on. 

But for a product or a project to have been so ignored, clearly 

there needs to be some sort of a reprimand, if you will. 

So I just want to yield. Has someone answered the question or 

is it under review? I just did not get the answer. 

Mr. ROGERS. In short, it was answered, and it is not what you 

want to hear. 

There were four employees, GSA employees, who are well paid, 

GS–13, —14, and–15s, who were demoted one level in pay. The 

other folks who were with GSA that had some culpability retired, 

and the same thing with the folks with Border Patrol. 

Nobody was demoted. Nobody was fired. The folks who had some 

culpability early on have decided to move on to the private sector, 

either through retirement or of their own volition. But, yes, we saw a $250 million program had about $100 million 

of that wasted. And nobody was fired. 

Ms. JACKSON-LEE. And I want to—and, thank you, Mr. Chairman. You are right; I did not hear it correctly. 

But we do not take comfort in this line of questioning. And for 

fear of tying various themes together, I think that there lie sort of 

the theme and the chain that found itself ultimately with the horrific response, the failure in Hurricane Katrina. 

So I want to say this. 

Mr. Handley, you are functioning now, and monitoring, and moving forward. and I would like to see us have reports back really 

quite frequently, as we monitor the progress of this particular effort. 

I happen to sit on the Subcommittee on Immigration in the Judiciary Committee, and I can assure you before the committee, some 

of its jurisdiction moved to homeland security, we had the whole 

mettle, if you will. 

And this whole question of border security is likewise a key element to the nation’s security. One of the messages that Secretary 

Chertoff said today was protection and prevention. Unfortunately, 

this hearing goes to the crux of failures to prevention and protections. 

And so, one, I am sure the reprimands are behind us on this. unfortunate saga. Again, let the record state that we are going down 

the same unfortunate path with the failures of Hurricane Katrina, 

because we heard no one suggest any kind of reprimand, censure 

or firing, except for the scapegoating of Michael Brown. 

This committee is here for serious business, and that is to help 

a 180,000-plus-person department with very staff, I know, working 

in many, many areas, give the best product that we can possibly 

give for the American people. 

I think this border security initiative and the progress that will 

take place between now and September is crucial. It is one of the 

steps that can be shown to this committee and the full committee 

that DHS knows what it is doing and that it is engaged in the protection of the American people. 

And, again, although he is not present, I hope that the meetings 

with you, Mr. Giddens, and the secretary are more than frequent. 
107

And I know that some may find this to be somewhat humorous. 

Just take a ride down to New Orleans, and Biloxi, Mississippi, and 

Houston, Texas, and you will find that in other places where 

Katrina survivors and Rita survivors are, and this is not humorous. 

The management of this department is poor. The leadership is 

poorer. And for those of you who are working hard everyday, we 

want to thank you. 

But to the head, I believe that they have been ineffective, asleep 

at the wheel, and we will see whether or not this September, if we 

are all here to talk about it, that border security initiative is in 

place and, God forbid, God forbid that there be some horrific tragedy, manmade because we have failed, we are derelict in our duties. 

I yield back, Mr. Chairman. 

Mr. ROGERS. And I thank the gentlelady. 

I appreciate the time that the witnesses put into your statements 

and for making yourself available for this. 

I do want to make the point that this is our third hearing. This 

committee did not exist when these problems occurred, much less 

this subcommittee. This permanent standing Committee on Homeland Security was only established 13 months ago by the Congress. 

We will be all over this subject matter in the future. We will be 

having a fourth hearing this fall on SBI and the technical component. 

So just know that we take our responsibility in oversight and 

management supervision very seriously, and we will be looking forward to working with you in a collaborative fashion in the future 

to ensure these kind of things do not happen again. 

And, again, I want to thank the witnesses. I do want to remind 

you that the record will be left open for 10 days. 

As you know, earlier today our voting on the floor ended for the 

week, so most members are headed for the airport, which is why 

you do not see more in attendance today. 

But I am sure that we will have some questions that we will submit to the record. I would ask you to respond to those in writing 

and submit them back to us. 

So with that, this meeting is adjourned. 

[Whereupon, at 2:58 p.m., the subcommittee was adjourned.]

FOR THE RECORD 

QUESTIONS FOR THE RECORD SUBMITTED BY CHAIRMAN MIKE ROGERS

FRIDAY, DECEMBER 16, 2005

In our first hearing we held on the ISIS program, we heard testimony from the 

Office of Inspector General for the General Services Administration. The testimony 

was highly critical of the contracting and management of the border surveillance 

system. Testimony revealed a program that resulted in a ‘‘major project gone awry’’ 

and ‘‘a waste of the taxpayer’s dollars.’’

Question: 1. Are your findings consistent with this characterization of the 

ISIS program? 

Yes. We characterized the ISIS program as having weak project management and 

contract oversight, which resulted in remote video surveillance (RVS) camera sites 

not being completed, leaving large portions of the border without camera coverage. 

We believe that was due in part to the frequent turnover of ISIS program managers. 

The first observation anyone who looks at this program would make is that contract accountability was confused. This is the net affect of shifting contract respon-
108

sibilities within the Immigration and Naturalization Service between its Office of 

Information Resources Management and the Office of Border Patrol (OBP) when 

dealing with the contractor, the contractor’s ‘‘teaming’’ arrangement with five other 

companies to obtain the equipment OBP requested, the use of the General Services 

Administration (GSA) as an intermediary, and the use of different procurement vehicles.

Question: 2. What should have been done differently in managing the 

contracts for the Remote Video Surveillance (RVS) equipment? 

This question might better be directed to GSA’s OIG, since our inspection focused 

on the programmatic applications rather than the acquisition or management of the 

contract. We were critical of OBP’s role, however. Although the contracting officer 

and contracting officer’s technical representative were GSA employees, it was incumbent upon OBP to oversee contractor performance and certify contractor invoices.

Question: 3. What, if anything, has the department done since the suspension of the ISIS contract in September 2004 to maintain the existing cameras, and install new cameras, along the border? 

It is our understanding that maintenance of ISIS equipment continues to be performed by OBP agents, Customs and Border Protection (CBP) electronics technicians, and by contract personnel at the operation and maintenance facility in Albuquerque, New Mexico. Additionally, we understand that OBP plans to enter into 

other contract arrangements to complete the work at some locations where the work 

was started but not completed.

Question: 4. Your review, as well as the GSA Inspector General’s review, 

found improper sole-source awards, work outside the contract scope, and 

lack of effective oversight [sic] contract provisions. In your opinion, to 

what degree has the Department of Homeland Security identified the improper procurement practices regarding ISIS and other border surveillance programs? To what extent have these problems been addressed? 

What more can the department do? 

We reported a general need for more comprehensive acquisition guidance and 

oversight in our report, ‘‘Department of Homeland Security’s Procurement and Program Management Operations,’’ OIG–05–53, September 2005. In this report, we recommended that DHS require expanded procurement ethics training for senior program and procurement officials; ensure procurement and program management 

oversight processes monitor departmental procurement activities for potential standards of conduct violations; create and staff a DHS organization to develop program 

management policies and procedures; provide independent technical support to DHS 

senior management and organizational component program managers on an as-required basis; and identify and foster best practices. 

The GAO reported in 2005 that the Office of the Chief Procurement Officer 

(OCPO) had only two people to conduct oversight on the eight separate procurement 

offices and almost $9.8 billion in procurement activity during FY 2004. GAO recommended that DHS provide OCPO with sufficient resources and enforcement authority to enable effective department-wide oversight of acquisition policies and procedures. DHS issued a management directive on the Acquisition Oversight Program 

in December 2005. Therefore, we also recommended that DHS provide the OCPO 

with sufficient staff and authority to effectively conduct oversight of DHS’ procurement operations. 

In response to our report, management began action to correct the reported problems. Specifically, the OCPO is developing a training class on procurement ethics 

for senior program and procurement officials that is emphasizing real examples of 

procurement fraud in addition to teaching applicable regulations. OCPO issued a 

DHS management directive on the Acquisition Oversight Program in December 

2005 and is hiring additional staff to conduct oversight of other acquisition offices. 

Finally, DHS began work to create a Departmental Program Management Office in 

FY 2007.

On November 2, 2005, Homeland Security Secretary Michael Chertoff announced a comprehensive multi-year plan, referred to as the Secure Border 

Initiative (SBI), which is designed to integrate technologies, infrastructure, 

and personnel to gain ‘‘operational control’’ over the nation’s borders in 

five years. This initiative is expected to cost hundreds of millions, if not billions, of dollars over a number of years. 

Question: 1. To your knowledge, what are the Department’s plans for this 

new initiative? How will the existing ISIS program, including the Remote 
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Video Surveillance (RVS) cameras, be integrated into the Secure Border 

Initiative? 

SBI is still a work in progress. We will know more when we get the department’s 

action plan for implementing our recommendations, due 90 days after issuance of 

the report. It is our understanding that ISIS, for which the RVS program is a part, 

will continue to be a subset of the much broader America’s Shield Initiative, which 

is one of many components of the SBI. However, the SBI, particularly the technology aspects of it, has not been fully articulated.

Question: 2. Based on your review, what lessons were learned from the 

problems in contract oversight for ISIS and the Remote Video Surveillance 

program that can be applied to this much larger, more complex, and much 

more expensive Secure Border Initiative? 

The lessons learned include: (1) DHS must properly assert itself as the customer 

and contract underwriter, and (2) DHS must have a sufficient number of competent, 

adequately trained, and certified contract managers commensurate with the size, 

complexity, and value of SBI.

Question: 3. What management and financial controls should the Department of Homeland Security have in place to ensure the effective acquisition of new surveillance equipment and services under the Secure Border 

Initiative? 

DHS and its subcomponents must have a sufficient number of competent, adequately trained, and certified contract managers commensurate with the size, complexity, and value of its procurement activity. In addition, DHS must ensure fair 

and open competition before a contract is awarded to make sure the government 

gets the best value possible. 

The Department of Homeland Security needs management and financial controls 

over all procurements, not just the Secure Border Initiative. We have not yet conducted a comprehensive review of the controls over acquisition programs, although 

we reported a general need for more comprehensive acquisition guidance and oversight in our report, ‘‘Department of Homeland Security’s Procurement and Program 

Management Operations,’’ OIG–05–53, September 2005.

Question: 4. In light of the problems with ISIS, what should the roles of 

the Chief Financial Officer and the Chief Procurement Officer be in overseeing Secure Border Initiative contracts? 

The DHS Under Secretary for Management through the Chief Financial Officer 

and Chief Procurement Officer must ensure fair and open competition for DHS procurements and that DHS has a sufficient number of competent, adequately trained, 

and certified contract managers. 

We reported a general need for more comprehensive acquisition guidance and 

oversight in our report, ‘‘Department of Homeland Security’s Procurement and Program Management Operations,’’ OIG–05–53, September 2005.

Question: 5. Do you believe the Department currently has the necessary 

number of staff under the Chief Financial Officer and the Chief Procurement Officer to effectively oversee future contracts in the Secure Border 

Initiative? 

We have reported that both the Chief Financial Officer and Chief Procurement 

Officer need more staff and authority to effectively carry out their general oversight 

responsibilities. Both issues were discussed in our report on ‘‘Major Management 

Challenges Facing the Department of Homeland Security,’’ OIG–06–14, December 

2005. We also reported on general organizational issues in our report, ‘‘Department 

of Homeland Security’s Procurement and Program Management Operations,’’ OIG–

05–53, September 2005. In that report, we recommended that DHS provide OCPO 

with sufficient staff and authority to effectively conduct oversight of DHS’ procurement operations. DHS management concurred with our recommendations and is 

taking action to increase staffing for procurement oversight.

Question: 6. In your opinion, do you believe the Department’s new organizational structure under Secretary Chertoff’s Second Stage Review is fully 

equipped to implement the comprehensive multi-year Secure Border Initiative? If not, what organizational changes would you recommend? 

We have reported that both the Chief Financial Officer and Chief Procurement 

Officer need more staff and authority to effectively carry out their general oversight 

responsibilities. Both issues were discussed in our report on ‘‘Major Management 

Challenges Facing the Department of Homeland Security,’’ OIG–06–14, December 

2005. We have not, however, fully assessed the organizational structure for the Secure Border Initiative, although we reported on general organizational issues in our 
110

report, ‘‘Department of Homeland Security’s Procurement and Program Management Operations,’’ OIG–05–53, September 2005. In that report, we recommended 

that DHS create and staff an organization to develop program management policies 

and procedures; provide independent technical support to DHS senior management 

and organizational component program managers on an as-required basis; and identify and foster best practices. We further recommended that DHS provide OCPO 

with sufficient staff and authority to effectively conduct oversight of DHS’ procurement operations. DHS management concurred with our recommendations and is 

taking action to increase staffing for procurement oversight.

Your report, as well as the General Services Administration Inspector 

General’s report, identified problems in the use of a ‘‘blanket purchase 

agreement’’ for the contractor—International Microwave Corporation 

(IMC)—to install poles and cameras along our borders. 

Question: 1. Could you describe the problems with a blanket purchase 

agreement? 

Within the context of our review, the primary problems were associated with 

CBP’s oversight of the blanket purchase agreement for the installation of RVS camera sites and not with the contract vehicle itself. A contributing factor to CBP’s 

oversight problems with this particular blanket purchase agreement was the 

issuance of technical directives for the design and installation of RVS systems prior 

to the completion of the permit, zoning and lease negotiations (as evidenced by the 

fact that the technical directive required the contractor to provide assistance to the 

Government during these processes). Permitting, zoning, and lease negotiations can 

sometimes be protracted legal processes and are subject to delay. Contractors are 

motivated to bill for their services as soon as possible after the incurrence of costs 

in order to recoup their costs and reduce the carrying cost of their inventory. Delays 

in the zoning, permitting and leasing processes may have resulted in the contractor 

incurring additional carrying costs attributable to a high level of RVS inventory. 

The blanket purchase agreement appeared to have adequate contractual provisions 

in place to allow CBP to adequately monitor contract services. Therefore, we consider the CBP oversight to be the primary problem with this particular blanket purchase agreement.

Question: 2. What type of contracts would you recommend the Department utilize for the Secure border Initiative? 

The type of contract is less important than the management and oversight of the 

contract. DHS must choose the type of contract that best fits the nature of the procurement.

Based on your review of Remote Video Surveillance (RVS) camera installation schedules and Border Patrol records, these installations took, on average 20 months to complete. And, administrative activities alone, in some 

instances, took more than 12 months to accomplish. 

Question: 1. Did your report identify the cause of these significant 

delays? 

Yes. The most time consuming aspect of installing RVS sites and associated infrastructure, involved site selection, securing land access, and performing environmental assessments.

Question: 2. Are there ways to streamline the site selection, site validations, and environmental assessments to minimize delays? If so, what are 

they? 

Yes. We believe that much of the pre-construction activity could be performed concurrently. For example, U.S. Army Corps of Engineers personnel could perform informal consultation with state, tribal, and federal regulatory agencies and provide 

a preliminary assessment as to whether a potential negative environmental effect 

might exist as part of the site selection process, while other contract activities—such 

as preparing, reviewing, and approving the contractor’s technical and cost proposals, 

validating selected sites, and preparing property access agreements—are being performed. 

In addition, CBP could expand the shared use of existing private and governmental structures to install remote surveillance technology infrastructure where 

possible and continue to identify and deploy the use of non-permanent or mobile 

surveillance. The use of existing infrastructure and non-permanent, mobile surveillance platforms, where possible, will eliminate the need for time-consuming site access activities.
111

Question: 3. Given the ambitious goals of the new Secure Border Initiative, has the Department dentified ways in which similar administrative 

hurdles can be eliminated? 

Yes. CBP advised that it would make every possible use of existing private and 

government structures to install future remote surveillance technology. In addition, 

CBP stated that it would implement strategies to streamline the site selection process through a Risk Management Plan.

Despite a Federal investment of more than $429 million since 1997, your 

audit revealed that ISIS components have not been integrated to the level 

predicted at the program’s onset. For example, as your report points out, 

if ground sensors are triggered, cameras do not automatically pan in the 

direction of the activated sensor. 

Question: 1. In your opinion, how and to what extent has the lack of integration weakened our border security? 

ISIS’s lack of automated integration has made border surveillance more staff intensive instead of a force multiplier. Law Enforcement Communication Assistants 

must perform manual integration to confirm the cause of a sensor alert using RVS 

cameras where the two are installed in close proximity. Where cameras and sensors 

are not co-located, the cameras must be continually monitored to be effective and 

OBP agents must investigate all sensor alerts because video surveillance is unavailable. Without the necessary personnel to perform video analysis or investigate sensor alerts, force-multiplication benefits are minimized.

Question: 2. In your opinion, what are the impediments to achieving 

greater integration of the existing Remote Video Surveillance (RVS) components? 

Neither the RVS nor the Intelligent Computer Assisted Detection (ICAD) system 

contract required the automated integration of RVS cameras with sensors. Nevertheless, OBP did attempt to integrate these two systems using both hardware and 

software design modifications that would have automated the integration between 

sensors and RVS cameras. These modifications were ‘‘successfully demonstrated,’’ 

but never deployed because solutions did not meet functional requirements. Even 

if the attempts to integrate these two systems were successful, due to the limited 

number of RVS sites installed, this would have only covered approximately five percent of the border.

Question: 3. Based on your review, can you determine whether the existing system can be fully integrated? If so, what steps need to be taken? 

No. OBP tested hardware and software design modifications that would have 

automated the integration between sensors and RVS cameras. However, further refinements in integration capabilities are necessary. For example, how an RVS camera would react to multiple sensor alerts being triggered at or near the same time 

remains unresolved.

Question: 4. What steps would you recommend to the Border Patrol to ensure that remote surveillance technologies deployed in the future can be 

fully integrated? 

We did not make a specific recommendation that CBP should institute to integrate technology. However, we do endorse OBP’s work with Customs and Border 

Protection’s Office of Information Technology, and its consulting contractor, to identify and refine ASI requirements, and the Science and Technology Directorate to 

identify potential technology solutions to address impending ASI requirements. 

CBP officials advised that they plan to establish ASI requirements and objectives 

and then hire a contractor to serve as a prime integrator. Once ASI is further refined and the prime integration contractor identifies specific technology requirements to meet OBP’s objectives, we anticipate that this collaborative effort will address immediate and future ASI integration requirements if executed properly.

Your report ‘‘evaluates the effectiveness of border surveillance, remote 

assessment, and monitoring technology in assisting the Bureau of Customs 

and Border Protection (CBP) to detect illegal entry into the United States.’’

Question: 1. Could you please elaborate on the report’s finding that the 

Border Patrol could not demonstrate ‘‘force-multiplication advantages’’ in 

the ISIS program? 

We questioned whether remote surveillance technology is providing force-multiplication benefits or increasing response effectiveness because according to our 

analysis of sample sensor alert data, non-ISIS sources of illegal alien detection 

proved to be as effective based on a percentage of apprehensions per sensor alert 

as RVS camera detections. Non-ISIS detections are primarily observations by citi-
112

zens, OBP agents, or other agency personnel. Along the northern border, non-ISIS 

sources were more effective than RVS camera detections, and both non-ISIS sources 

and RVS cameras performed better than sensors based on a percentage of arrests 

per sensor alert. Our analysis of sample sensor alert data also indicated that more 

than 90% of the responses to ground sensor alerts resulted in ‘‘false alarms,’’ meaning that OBP agents spent many hours investigating activities that did not involve 

illegal attempts to enter the United States. Nevertheless, OBP officials assert that 

ISIS has been successful in serving as a force-multiplier in that it frees the use of 

the limited number of OBP agents who would otherwise be needed to monitor the 

border.

Question: 2. How would you advise the Border Patrol to address your report’s finding that data is incomplete and unreliable for measuring effectiveness? 

We recommended that the Commissioner for CBP should standardize the process 

for collecting, cataloging, processing, and reporting ICAD intrusion and response 

data. CBP stated that they recently released enhancements to the ICAD system that 

provides aids and tools to improve and standardize the data collection process. CBP 

indicated that response data fields have been defined, which should lead to more 

consistent recording of activity. We believe these enhancements will lead to improved data collection and reliability which in-turn will allow OBP to analyze forcemultiplication benefits and response effectiveness better.

Question: 3. How would you advise the Border Patrol to address your report’s finding that its oversight of contract activities and its oversight of 

contractor performance were ineffective? 

We would suggest that the Border Patrol hire a sufficient number of competent, 

adequately trained, and certified contract managers commensurate with the size, 

complexity, and value of its procurements and ensure that contract awards are 

based on fair and open competition. It might also consider obtaining the services of 

a contractor with expertise in large project management and contract oversight to 

advise it and augment the Border Patrol’s own capabilities given the complexity and 

high dollar value of the project.

Question: 4. Could you please elaborate on the report’s finding that the 

Border Patrol certified few contractor invoices prior to payment and what 

effect [sic] this practice had on the ISIS program? 

According to our analysis of OBP and GSA records, most contractor invoices were 

paid without OBP certification despite a requirement of the BPA that OBP must 

certify correct and properly supported invoices. Overall, OBP rejected few invoices, 

and most invoices were not addressed (either accepted or rejected). According to 

GSA, the GSA contracting officer’s technical representative should have ensured 

that OBP received and approved contractor invoices. GSA agreed that, in practice, 

there was confusion about the responsibilities of OBP and GSA. GSA added that as 

the project grew and became more complex, the potential for error and pressure to 

keep on schedule increased. Nonetheless, OBP was obligated to certify invoices, and 

there is minimal evidence that it fulfilled that obligation. This resulted in payment 

to the contractor for unverified goods and services.

Your report cites that millions of dollars dedicated for installing border 

surveillance cameras remain unspent in accounts at the General Services 

Administration (GSA). 

Question: 1. Based on your review, could you determine where along the 

borders cameras have not been installed because of this bureaucratic 

delay? 

As of August 2005, 168 RVS camera sites and 38 non-camera sites were incomplete. According to OBP reports, these sites are within the following OBP sectors:

• Buffalo • El Paso • San Diego 

• Del Rio • Laredo • Tucson 

• Detroit • Marfa • Yuma 

• El Centro • McAllen.

Question: 2. What recommendations do you have to expedite allocation of 

these funds for deployment of more border security cameras? Or, do you 

believe these funds should be reallocated though the new Secure Border 

Initiative? 
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We recommended that the Commissioner for CBP, continue to work with GSA and 

the RVS contractor to settle remaining claims under the BPA, financially reconcile 

funding provided to GSA, and obtain the return of the unused funds to the Department. In an interview, a senior OBP official told us that OBP has completed 

verifying invoices with the contractor and GSA, and GSA is going to permit the OBP 

to spend remaining funds, approximately $37 million, through GSA, on ‘‘ISIS-like 

equipment.’’ According to the OBP, this will occur after GSA pays agreed upon outstanding debts to the contractor. OBP officials said that OBP would receive an official letter confirming this agreement from GSA after GSA’s counsel approves it. As 

of the date of the hearing, that letter had not been received.

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