Department of Homeland Security 

Executive Transportation and 

Shuttle Bus Services Contract Review 

DEPARTMENT OF HOMELAND SECURITY 

Office of Inspector General 

OIG-07-37 March 2007
Office of Inspector General 

U.S. Department of Homeland Security 

Washington, DC 20528

 March 30, 2007 

Preface 

The Department of Homeland Security (DHS) Office of Inspector General (OIG) was 

established by the Homeland Security Act of 2002 (Public Law 107-296) by amendment 

to the Inspector General Act of 1978. This is one of a series of audit, inspection, and 

special reports prepared as part of our oversight responsibilities to promote economy, 

efficiency, and effectiveness within the department. 

This report addresses DHS’ award of two executive transportation and shuttle bus 

services contracts to Shirlington Limousine and Transportation, Inc. It is based on 

interviews with employees and officials of relevant agencies and institutions, direct 

observations, and analysis of applicable documents. 

It is our hope that this report will result in more effective, efficient, and economical 

operations. We express our appreciation to all of those who contributed to the 

preparation of this report 

 

 

Richard L. Skinner 

Inspector General 
Table of Contents 

Executive Summary...................................................................................................................1

Background................................................................................................................................3 

Results of Review 

Shirlington Had Unfair Advantage Over Other Offerors ....................................................6 

Management Comments and OIG Analysis ........................................................................8 

OPO Awarded April 2004 Contract to Bidder That Was Unable To Meet Performance 

Requirements ...............................................................................................................10 

Management Comments and OIG Analysis ......................................................................12 

OPO Has Recently Improved Policies and Its Procedures ................................................12 

Conclusions..............................................................................................................................13 

Appendix A: Purpose, Scope, and Methodology...................................................................15 

Appendix B: Congressional Requests ...................................................................................17 

Appendix C: Management Comments to the Draft Report...................................................22 

Appendix D: Authorized Users of DHS Executive Transportation Services........................26 

Appendix E: Shirlington DHS Contracts and Modifications................................................29 

Appendix F: Major Contributors to this Report....................................................................30 

Appendix G: Report Distribution ..........................................................................................31 

Abbreviations 

OAM Office of Asset Management 

CFR Code of Federal Regulations 

DHS Department of Homeland Security 

FAR Federal Acquisition Regulation 

FEMA Federal Emergency Management Agency 

GSA U.S. General Services Administration 

HUBZone Historically Underutilized Business Zone 

OIG Office of Inspector General, Department of Homeland Security 

OPO Office of Procurement Operations 

SBA U.S. Small Business Administration 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 1

OIG 

Department of Homeland Security 

Office of Inspector General

Executive Summary 

In May 2006, Representatives Bennie G. Thompson and Bill Pascrell, 

U.S. House of Representatives Committee on Homeland Security, 

requested that we review DHS’ contract awards to Shirlington 

Limousine and Transportation, Inc. (Shirlington). In June 2006, 

Representatives Mike Rogers and Kendrick B. Meek made a related 

request. Among other questions, they asked what transportation DHS 

offered senior personnel, the validity of Shirlington’s Historically 

Underutilized Business Zone (HUBZone) designation, the basis of the 

April 2004 contract award, and whether Shirlington was a responsible 

contractor. The U.S. Small Business Administration (SBA) approves 

HUBZone certifications, so we limited our review to determining the 

basis of the April 2004 award and establishment of contractor 

responsibility. We referred concerns about potential individual 

culpability to our Office of Investigations. 

The DHS Office of Asset Management (OAM) notified Shirlington 

approximately two months before it notified the public about DHS’ 

executive transportation and shuttle service requirements and its 

intention to use a HUBZone solicitation. These actions did not comply 

with federal regulations and gave Shirlington an unfair advantage over 

other offerors by reducing competition and increasing the likelihood 

that Shirlington would win the contract. Further, the DHS Office of 

Procurement Operations (OPO) did not comply with federal 

regulations when it issued a competitive solicitation after SBA notified 

DHS that no HUBZone competition existed for Shirlington. Federal 

regulations allow such solicitations only when an agency reasonably 

expects that at least two HUBZone businesses will bid. 

OPO awarded the contract to a nonresponsible contractor. Shirlington 

lacked financial resources adequate to fulfill the contract requirement 

to use buses not more than one year old. Shirlington did not have 

appropriate vehicles until almost two months into the performance 

period. OPO did not comply with federal regulations when it awarded 

the contract to a nonresponsible contractor and did not document 

contractor responsibility prior to the April 2004 contract award. 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

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We are not making any recommendations at this time. Senior 

executives, staffing, policy, and oversight processes and procedures 

have changed significantly since the April 2004 contract award. These 

changes should improve compliance with federal regulations. We will 

assess the effectiveness of these changes in future reviews. 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

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Background 

In 2003, the Department of Homeland Security (DHS) provided 

executive transportation and bus services between its headquarters 

locations through a purchase order issued under an existing 

U.S. General Services Administration (GSA) schedule contract to a 

minority-owned, small, disadvantaged business. As DHS’ 

transportation needs increased, DHS needed to compete the 

requirements. 

In January 2004, the DHS Office of Small and Disadvantaged 

Business Utilization referred Shirlington Limousine and 

Transportation, Inc. (Shirlington) to the Office of Asset Management 

(OAM), along with names of three small business concerns. OAM 

first met with Shirlington on January 8, 2004. On February 10, 2004, 

OAM submitted a procurement request to the Office of Procurement 

Operations (OPO), totaling $1.3 million for a one-year, 8(a) or 

HUBZone set-aside to Shirlington. OAM continued to pursue both 

alternatives concurrently in an effort to award Shirlington a sole source 

contract. 

But OPO could not award Shirlington a sole source 8(a) or HUBZone 

contract. Shirlington did not have an 8(a) certificate, consequently, it 

was ineligible for an 8(a) award. Furthermore, the contract’s 

anticipated price would exceed the threshold for issuing a sole source 

award. Federal regulations also do not allow agencies to award sole 

source, HUBZone contracts when a non-HUBZone small business 

concern is already performing the requirement. In this case, the 

incumbent contractor, Millennium Tek, was a non-HUBZone small 

business concern. 

On April 15, 2004, OPO issued a competitive solicitation for 

HUBZone small business concerns. On April 27, 2004, OPO awarded 

Shirlington a one-year contract, with one option year. The base year 

contract totaled $1.6 million, with an additional one-year option 

totaling $1.7 million. The contract requirements grew as DHS added 

service routes. OPO extended the April 2004 contract through 

October 2005, while it competed the future transportation services 

requirements. On October 27, 2005, OPO awarded Shirlington a 

second one-year contract, with four option years. The base year 

contract totaled $3.9 million, with four, one-year options totaling 

approximately $17 million. Prior to the second contract expiring in 

October 2006, OPO exercised the first option year. Expenditures 

through October 2006, for both Shirlington contracts total $8 million. 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

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See Appendix E for information about Shirlington contracts and 

modifications. 

In November 2006, OPO issued a competitive solicitation for small 

business concerns to bid on transportation services. OPO officials told 

us it intended to award a new contract in February 2007, but two 

protests to the solicitation have delayed the process. On 

March 13, 2007, GAO issued a decision regarding the first protest in 

favor of OPO. GAO ruled that the contract requirement was not 

unduly restrictive of competition and was reasonably designed to 

ensure the government’s needs would be met. The decision also stated 

that OPO had a reasonable basis for not setting aside the contract for 

HUBZone small business concerns. Sufficient facts existed to support 

OPO’s conclusion that it did not have a reasonable expectation that 

offers would be received from two or more HUBZone business 

concerns. The remaining protest is still pending resolution by GAO. 

Once resolved, OPO officials will begin reviewing proposals. 

Historically Underutilized Business Zone Program

The Historically Underutilized Business Zone (HUBZone) program, 

which the HUBZone Act of 19971 established, seeks to increase 

employment opportunities, investment, and economic development by 

providing federal contracting assistance to qualified small businesses 

in designated areas. A historically underutilized business zone is an 

area located within one or more qualified census tracts, qualified nonmetropolitan counties, or lands within the external boundaries of an 

Indian reservation. The U.S. Small Business Administration (SBA), in 

its sole discretion, determines whether a business qualifies for the 

program. For a business to be certified as a HUBZone business, it 

must submit an application to SBA with supporting documentation 

that it meets the following criteria. 

• The company is small by SBA standards. 

• The company is exclusively owned and controlled by 

U.S. citizens. 

• At least 35% of company employees reside within a HUBZone. 

• The company’s principal office is located in a HUBZone. 

 

1

 P.L. 105-135, Title VI, December 2, 1997. 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

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8(a) Business Development Program 

The 8(a) Business Development Program is another federal assistance 

program. Its requirements differ in some respects from the HUBZone 

program. For example, it is not geographically based. SBA has the 

responsibility for approving 8(a) Business Development Program 

participants based on the following requirements.2

• The company is small by SBA standards. 

• The company is unconditionally owned and controlled by one 

or more socially and economically disadvantaged individuals 

who are of good character and U.S. citizens. 

• The company demonstrates potential for business success. 

An agency may award contracts through SBA to participating 8(a) 

Business Development Program small businesses on either a 

competitive or a sole source basis.3

 If an agency does not reasonably 

expect at least two eligible and responsible firms to submit fair market 

price offers for a solicitation, the agency can issue a sole source, 

8(a) Business Development Program contract that exceeds the 

competitive threshold.4 For sole source, 8(a) Business Development 

Program contracts, agencies do not have to prepare the written 

justifications and approvals normally required for sole source 

contracts.5

DHS Executive Transportation and Shuttle Bus Services 

DHS leases and maintains control of the vehicles that Shirlington 

operates as the executive motor pool. Shirlington provides personnel 

and supervision, including dispatch service and a quality control 

manager. Shirlington maintains dispatcher and driver logs for a 

continuing 90-day period. The logs contain usage statistics, such as 

pick up and delivery locations, dates, and times; and passenger names. 

DHS authorizes certain department personnel to use executive motor 

pool services. Appendix D lists the positions DHS authorizes. The 

Shirlington dispatchers prioritize trips according to DHS’ instructions. 

 

2

 13 C.F.R. § 124.101-112, Eligibility Requirements For Participation In The 8(a) business Development 

Program, January 1, 2006. 3

 FAR § 19.800(b), Contracting With The Small Business Administration (The 8(a) Program), April 5, 2004. 4

 FAR § 19.805-1(b)(1), General, April 5, 2004. 5

 FAR § 6.302-5(b)(4), Authorized or Required by Statute, April 5, 2004. 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

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DHS plans to consolidate the executive motor pool services that its 

operating components retained when Congress created DHS. The five 

components that have executive motor pool services separate from the 

service Shirlington provides are U.S. Citizenship and Immigration 

Services, U.S. Customs and Border Protection, U.S. Immigration and 

Customs Enforcement, Transportation Security Administration, and 

United States Coast Guard. The Office of OAM told us that personnel 

from the five components do not have approval to use Shirlington’s 

services. Reviewing the other DHS transportation services contracts 

was outside the scope of this review. 

In addition to executive transportation services, Shirlington provides 

shuttle bus services for the approximately 5,000 DHS personnel in the 

Washington, D.C., metropolitan area. Shirlington currently services 

six regular routes using ten shuttle buses. 

Results of Review 

Shirlington Had Unfair Advantage Over Other Offerors 

Federal regulations require an agency to ensure that all potential 

offerors receive the same specific information about proposed 

acquisitions in a timely manner.6 Before issuing the April 2004 

competitive HUBZone solicitation, OAM had ongoing communication 

with Shirlington and released pertinent information to Shirlington 

months in advance of its release to other potential bidders. 

Specifically, the following DHS actions gave Shirlington an unfair 

advantage over its competitors. 

• OAM provided Shirlington on January 9, 2004, a copy of the 

statement of objectives detailing the program requirements. 

On January 12, 2004, Shirlington submitted a written proposal 

to OAM. Shirlington also sent additional information, such as 

copies of its operating policies, cost estimates, a reference 

letter, and a list of proposed drivers for security clearance 

purposes. 

• OAM wanted OPO to reduce the contract requirements so it 

could award Shirlington a sole source, either 8(a) Business 

Development Program or HUBZone contract. In March 2004, 

OPO refused, stating that the contract would exceed $3 million, 

the threshold for a sole source award. It further stated it would 

 

6

 FAR § 15.201, Exchanges with Industry Before Receipt of Proposals, April 5, 2004. 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 7

be inappropriate to understate the requirements to suit DHS’ 

timeline. 

• OPO officials told the DHS Office of Security on April 1, 

2004, before issuing the competitive HUBZone solicitation, 

that it would award Shirlington the contract. According to 

OPO, the contracting specialist made this statement in the 

context of awarding an 8(a) sole source contract to Shirlington. 

• OPO issued the competitive HUBZone solicitation on 

April 15, 2004, approximately seven days after Shirlington 

received its HUBZone certificate on April 8, 2004. OPO 

officials said that a heavy workload delayed the solicitation’s 

issuance. 

• OPO issued a competitive HUBZone solicitation after SBA 

determined that no HUBZone small business competition 

existed for Shirlington in the Washington, D.C., metropolitan 

area. 

• OPO limited the bidding period to 5 days and rejected other 

offerors’ requests to extend the bidding period or to change the 

solicitation to an 8(a) Business Development Program setaside. Federal regulations require agencies to establish a 

reasonable response time that will allow potential offerors a 

reasonable opportunity to respond to the solicitation. However, 

with the current transportation contract expiring on 

April 26, 2004, OPO did not extend the deadline or change the 

solicitation’s requirements because procurement officials said 

it would cause a disruption in transportation services. As a 

result, other offerors did not have time to prepare responsive 

proposals. 

Also, in February 2004, OAM notified Shirlington that it intended to 

use a HUBZone solicitation. On February 10, 2004, OAM issued a 

procurement request for a 1-year, HUBZone contract totaling 

$1.3 million for Shirlington. On February 17, 2004, Shirlington 

submitted its first HUBZone application to SBA. Consequently, 

Shirlington had approximately 2 months to apply for and receive its 

HUBZone certificate. When OPO issued the solicitation in April 

2004, other potential bidders had less than 1 week to respond. The 

short response time was insufficient for other bidders to acquire 

HUBZone certifications or to prepare responsive proposals. DHS 

subsequently disqualified bidders who lacked HUBZone certifications. 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

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OPO also restricted competition for the executive transportation and 

shuttle bus services contract when it issued a HUBZone solicitation. 

Although federal regulations allow an agency to set-aside solicitations 

for HUBZone businesses, the agency must reasonably expect that two 

or more HUBZone businesses will submit offers.7 Before OPO issued 

the solicitation, SBA had determined that no other HUBZone 

businesses existed in the Washington, D.C. area. With the 

understanding that no HUBZone competition existed, OPO issued the 

HUBZone set-aside solicitation. Although four businesses submitted 

offers, only Shirlington qualified as a HUBZone business and won the 

contract.

Management Comments and OIG Analysis 

HUBZone Set-aside Requirements 

OPO acknowledged that it did not follow the normal more detailed 

procurement procedures because of staffing limitations and an 

extraordinarily voluminous workload. The contracting officer relied 

heavily on acquisition support staff and program personnel to make 

acquisition strategy decisions. 

OPO said that the contracting officer made the decision to award to 

Shirlington with the intention of complying with federal regulations 

governing HUBZone Programs. Federal regulations require agencies 

to set aside acquisitions that exceed the simplified acquisition 

threshold for HUBZone small business concerns if the agency makes 

two determinations: that there is reasonable expectation that offers will 

be received from two or more HUBZone small business concerns, and 

that the award will be made a fair market price. OPO further stated 

that if the contracting officer receives only one acceptable offer from a 

qualified HUBzone small business concern, the contracting officer 

should make an award to that concern. In this situation, federal 

regulations will allow a sole source award to that contractor. 

We concur that federal regulations require agencies to set-aside certain 

acquisitions for HUBZone small business concerns. We do not agree 

that OPO had a reasonable expectation that it would receive offers 

from two or more HUBZone small business concerns. The SBA’s 

Assistant Administrator, HUBZone Empowerment Contracting, sent 

OPO, OAM, and Shirlington notification prior to the issuance of the 

solicitation that no HUBZone competition existed for Shirlington. 

Documentary evidence also shows that the Assistant Administrator 

 

7

 FAR § 19.1305(b)(1), HUBZone Set-Aside Procedures, April 5, 2004. 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

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called other HUBZone businesses to validate his research. He assured 

DHS and Shirlington that it could award a sole source, HUBZone 

contract to Shirlington. 

In addition, we saw no documentary evidence that OPO or OAM 

performed any other market research. According to a related GAO 

decision,8 an agency must make reasonable efforts to ascertain whether 

it will receive offers from at least two HUBZone small business 

concerns with the capability to perform the work. The use of a 

particular method for assessing the availability is not required. 

Nonetheless, prior procurement history, market surveys, and advice 

from the agency’s small business specialist may constitute adequate 

grounds for a contracting officer’s decision not to set-aside 

procurement. With only SBA’s market research showing that no 

competition existed for Shirlington among HUBZone small business 

concerns, we conclude that the acquisition did not meet the 

requirements for a HUBZone set-aside. 

8(a) Business Development Program 

OPO expressed concerns that we clarify our report to address the 

circumstances surrounding its original intention to award Shirlington a 

sole source, 8(a) Business Development Program contract. OAM 

urged OPO to reduce the contract requirements to meet the sole source 

threshold for either an 8(a) Business Development Program or 

HUBZone award. 

OPO initially refused to understate the requirements to sole source to 

Shirlington. Despite its original protest, OPO agreed to award such a 

contract to Shirlington, until OPO learned that Shirlington had never 

applied for an 8(a) certificate. The acquisition did not meet the sole 

source requirements for the HUBZone, either. OPO subsequently 

issued a competitive, HUBZone solicitation, after SBA provided OPO, 

OAM, and Shirlington confirmation that no competition existed for 

Shirlington among HUBZone small business concerns in the 

Washington, D.C. metropolitan area. We have adjusted our report, 

where appropriate, to provide additional clarification concerning this 

issue. 

 

8

 United States Government Accountability Office, Decision, B-299241, March 13, 2007. 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

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OPO Awarded April 2004 Contract to Bidder That Was Unable To 

Meet Performance Requirements 

The federal government may award contracts only to responsible 

prospective contractors.9

 Prior to contract award, a contracting officer 

must make an affirmative determination that the prospective contractor 

has the financial and technical resources to perform on the contract, 

integrity, and a good past performance record. The contract officer’s 

signature on a contract is evidence of a determination that the 

prospective contractor is responsible. The official contracting file 

must contain documentation to support the determination. When 

insufficient information exists for an affirmative determination, then 

the contracting officer must make a determination of nonresponsibility. 

OPO did not comply with federal regulations10 when it awarded the 

April 2004 contract because Shirlington was not a responsible 

contractor. Shirlington did not have adequate financial resources to 

fulfill the DHS contract requirement to provide shuttle buses not 

exceeding 1-year old: 

• On April 27, 2004, the first day of the contract, and for several 

weeks thereafter, Shirlington did not have new buses. The 

contract required buses no more than 1-year old. 

• On April 30, 2004, Shirlington asked OPO for advanced 

payments to ease the financial strain that purchasing new buses 

would place on the business. OPO refused to provide advanced 

payments. 

• On May 20, 2004, OPO issued a letter, threatening contract 

termination unless Shirlington corrected performance problems 

and met contract requirements. 

• On May 26, 2004, Shirlington provided DHS confirmation of 

its bus order. 

• On June 7, 2004, Shirlington sent a letter acknowledging its 

difficulty financing new buses to OPO. 

• On June 8, 2004, Shirlington leased two new buses. 

 

9

 FAR § 9.103, Policy, April 5, 2004. 10 See FAR § 9.104, General Standards, April 5, 2004. 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

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• On June 17, 2004, Shirlington leased a third new bus. 

Interviews with program personnel and documents received from 

Shirlington showed that OAM knew Shirlington did not have the 

financial resources to purchase the new buses prior to contract award. 

However, it did not communicate this critical financial information to 

OPO. In addition, OPO did not review Shirlington’s financial 

information or ensure that Shirlington had a commitment to lease or 

purchase new buses. Moreover, OPO did not begin to question 

contractor responsibility until April 28, 2004—2 days after contract 

award. 

OPO also did not properly document the contractor responsibility 

determination for Shirlington, as federal regulations require.11 The 

April 2004 contract file does not contain documentation to support 

OPO’ assertion that it checked a Dunn and Bradstreet12 report, 

reviewed GSA’s suspended and debarred contractors list, and 

contacted the references Shirlington listed in its proposal. According 

to a technical evaluation report prepared by OAM, Shirlington’s 

references spoke “...very highly of the services provided and no 

negative actions or comments are recorded in the contract files.” The 

report did not contain identifying information or dates of contact for 

the references. 

OPO officials told us that (1) its desire to meet OAM’s request to 

select Shirlington, (2) the limited time to fulfill DHS’ transportation 

requirements, and (3) staffing shortages contributed to its failure to 

establish contractor responsibility. At the time, OAM was promoting 

Shirlington through email and verbal discussions. The existing 

transportation services contract was set to expire less than 1 week after 

the deadline for submitting replacement proposals. 

OPO officials also told us that when an agency determines that a 

prospective contractor does not have good past performance, integrity, 

or financial or technical ability to perform a proposed contract, the 

contracting officer must withhold the award and refer the issue for 

SBA review.13 In such cases, SBA allows the bidder to apply for a 

certificate of competency, which, if granted, would enable the agency 

to select the bidder for contract award. SBA independently evaluates 

the bidder for the elements of contractor responsibility. SBA has 

discretion to issue or deny a certificate of competency. 

 

11 See FAR § 9.105-2, Determinations and Documentation, April 5, 2004. 12 Dunn and Bradstreet is a commercial service that provides business credit and research reports. 13 See also FAR § 19.602-1, Referral, April 5, 2004. 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

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OPO officials told us it was likely that SBA would have issued a 

certificate of competency to Shirlington, if DHS had made a 

determination that Shirlington did not meet federal responsibility 

standards. Because OPO did not seek SBA review, we do not know 

whether SBA would or would not have issued Shirlington a certificate 

of competency. Obtaining a certificate of competency would not have 

changed the fact that, prior to contract award, Shirlington did not have 

financial resources adequate to provide new buses. 

Management Comments and OIG Analysis

OPO said that the contracting officer relied solely on past performance 

to establish contractor responsibility and did not conduct any 

additional research. Past performance is only one aspect reviewed to 

determine contractor responsibility. Federal regulations require the 

contracting officer to review other areas, such as integrity and 

financial or technical ability to perform a proposed contract. 

Office of Procurement Operations Has Recently Improved Its 

Policies and Procedures 

Since April 2004, OPO has undergone significant changes to its 

staffing, acquisition review process, and policies and procedures. Had 

these changes been in place when DHS was considering Shirlington’s 

2004 contract award, OPO would likely have acted differently and 

avoided the problems associated with the Shirlington procurement. 

During the past 2 years, senior procurement staff has changed and the 

number of OPO staff and their qualifications increased. A new OPO 

Director was hired in November 2005, and a new Chief Procurement 

Officer took over in January 2006. The number of staff rose from 29 

personnel at the end of fiscal year 2004 to 150 personnel as of 

February 2007. OPO intends to hire up to 220 full-time equivalent 

positions by the end of the current fiscal year. OPO also hired two 

full-time, small business specialists. OPO officials said the small 

business specialists perform the preliminary work, such as market and 

financial research, for the contracting officers during the acquisition 

planning phase. 

Most contracting officers now have the acquisition certifications that 

the DHS acquisition certification program requires. OPO provides 

informal training to its acquisition personnel on a monthly basis. DHS 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 13

policy also requires contracting officer’s technical representatives in 

the program offices to have appropriate professional certifications. 

On July 14, 2006, OPO approved new procedures that require all 

contracting actions to undergo a review by staff at least one level 

senior to the contracting officer. Reviewers determine whether each 

procurement action complies with applicable statutes, regulations, and 

policies. Reviewers also assess the soundness of the acquisition 

strategy and business judgment, and completeness, consistency and 

clarity of the official files. OPO has reviewed several contracts 

according to these procedures since their implementation. 

Dollar thresholds determine the level of additional reviews. The 

Policy, Oversight, and Customer Support division is suppose to review 

all justifications for contracts exceeding $500,000 and all solicitations 

and contract actions greater than $10 million. Legal counsel is 

suppose to review all justifications, solicitations, and contract actions 

greater than $500,000. Starting January 2, 2007, a OPO Board plans 

to review all solicitations and awards of $25 million or more. The 

Policy, Oversight, and Customer Support division, legal counsel, or 

the head of the Contracting Authority can require additional reviews of 

any contract action at any dollar threshold. 

Since its initial award to Shirlington, OPO issued other policies and 

procedures that will likely improve DHS’ compliance with applicable 

requirements. 

• Standardized checklists and documentation procedures for 

solicitations and contracts (June 2005). 

• Management of acquisition workforce certification 

(June 2005). 

• Policies and procedures for establishing the roles, 

responsibilities, and requirements for appointing contracting 

officer’s technical representatives (July 2005). 

• Policies and procedures for preparing contractor performance 

evaluations (July 2006). 

Conclusions

In 2004, OAM appears to have focused exclusively on doing business 

with Shirlington for transportation services. Release of information to 
DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 14

Shirlington months before it was available to other potential bidders 

created an unfair advantage that helped Shirlington secure the DHS 

contract. OPO did not ensure prior to the contract award that 

Shirlington had the financial resources to perform the work. 

Shirlington’s inability to provide new buses at the contract’s inception, 

its repeated requests for advanced payments to help purchase the 

buses, and DHS’ consideration of contract termination for 

performance issues are evidence of Shirlington’s non-responsibility. 

We referred these issues to our Office of Investigations to determine 

the extent of any potential individual culpability for the apparent 

regulatory violations cited in our report. 

DHS made numerous changes in OPO that will likely improve 

compliance with applicable requirements, particularly those 

concerning HUBZone competitions and contractor responsibility 

determinations and documentation. Key executives have changed. 

The number of procurement staff has increased. OPO established 

policies and procedures for contract oversight, including quality 

assurance measures that will likely help avoid future deficiencies. In 

light of the significantly changed situation, we propose no 

recommendations at this time. We will consider the effectiveness of 

these recent changes as we conduct future reviews. 
Appendix A 

Purpose, Scope, and Methodology 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 15

In response to Congressional concerns, we reviewed DHS’ April 2004 

and October 2005 contract awards to Shirlington. We conducted the 

review under the authority of the Inspector General Act of 1978, as 

amended, and according to generally accepted government auditing 

standards. We conducted our work from May 2006 through 

September 2006. 

 

In addition to a general request for basic information concerning the 

Department’s executive transportation services, Congress asked us to 

review and provide answers to the following concerns: 

• Did Shirlington meet the HUBZone certification criteria at the 

time of the April 2004 contract award? 

• What was the basis for the Department’s April 2004 sole 

source award to Shirlington?14

• What steps did the Department take to determine that 

Shirlington was a responsible bidder? 

We limited our scope by relying on SBA’s designation of Shirlington 

as a HUBZone certified business and focused our work on determining 

the basis of the April 2004 award and the establishment of contractor 

responsibility. SBA has the sole responsibility for determining 

whether a small business concern meets the HUBZone criteria. DHS 

does not have the authority to determine HUBZone eligibility or to 

approve HUBZone certificates. The Office of OPO relied exclusively 

on SBA’s certification as required by law. 

Because we relied on SBA’s determination of Shirlington as a 

HUBZone certified business, we reviewed SBA’s Shirlington 

application, protest, and appeal files. SBA had reviewed Shirlington’s 

certification more than once in response to a small business concern 

protest and continues to support its original determination. We 

performed no additional audit work concerning the validity of 

Shirlington’s HUBZone certification. 

To provide general information concerning DHS’ executive 

transportation services, we interviewed DHS’ OAM officials, 

reviewed motor pool assessments, the motor pool operations 

management directive, and driver and dispatch logs. We did not 

review DHS components’ executive transportation contracts, but relied 

 

14 The Congressional request identified the April 2004 contract award as a sole source award. The contract file 

indicates that it was not a sole source award. 
Appendix A 

Purpose, Scope, and Methodology 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 16

on the best available information contained in the motor pool 

assessment reports. We also received a list of personnel approved for 

using Shirlington’s services, but we did not validate the information. 

We received permission from Congressional staff to eliminate an 

information request pertaining to dates, times of use, and names of 

officials using Shirlington. This part of the request dealt with 

operational aspects of Shirlington’s performance, while the rest of the 

request related to contract solicitation and award. Also, answering the 

operational questions would require time-consuming manual analysis 

of large volumes of hard copy records. 

To establish the basis of DHS’ April 2004 award and to establish 

contractor responsibility, we reviewed the relevant contract files. We 

also interviewed officials in the Office of OPO, the Office of OAM, 

and the Office of Small Disadvantaged Businesses, Shirlington 

personnel, and SBA officials. We observed motor pool operations at 

the DHS Nebraska Avenue Complex. We searched emails and files 

from DHS personnel in the Office of OAM and the Office of OPO and 

prepared a chronology of events related to the contracts. We searched 

the Central Contracting Registration Database for contractor 

certifications and consulted with Dunn & Bradstreet, and our Office of 

Investigations and DHS’ Office of Chief Counsel. 

We referred our concerns about potential individual culpability for 

regulatory violations to our Office of Investigations. 
Appendix B 

Congressional Requests 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 17
Appendix B 

Congressional Requests 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 18
Appendix B 

Congressional Requests 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 19
Appendix B 

Congressional Requests 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 20
Appendix B 

Congressional Requests 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 21
Appendix C 

Management Comments to the Draft Report 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 22
Appendix C 

Management Comments to the Draft Report 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 23
Appendix C 

Management Comments to the Draft Report 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 24
Appendix C 

Management Comments to the Draft Report 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 25
Appendix D 

Authorized Users of DHS Executive Transportation Services 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 26

OAM provided us a list of authorized users, which we updated for consistency and DHS’ current position 

titles. We did not validate the list. 

Position 

Advisor to the Chief of Staff 

Advisor to the Secretary 

Assistant Director for Domestic Nuclear Detection 

Assistant Director for Legislative Affairs 

(two positions) 

Assistant Secretary for Grants and Training 

Assistant Secretary for Infrastructure Protection 

Assistant Secretary for Intelligence 

Assistant Secretary for International Affairs 

Assistant Secretary for Legislative Affairs 

Assistant Secretary for Policy 

Assistant Secretary for Private Sector Coordination 

Assistant Secretary for Public Affairs 

Assistant Secretary for Strategic Plans 

Associate General Counsel 

Budget Liaison for Appropriations (two positions) 

Business Transformation Office 

Chief Counsel for Civil Rights and Civil Liberties 

Chief Counsel for Operations 

Chief Counsel for Privacy 

Chief Financial Officer 

Chief Financial Officer for FEMA 

Chief Financial Officer for Science and Technology 

Chief for Administrative Services 

Chief for Systems Engineering Policy 

Chief Human Capital Officer 

Chief Information Officer 

Chief Information Officer for FEMA 

Chief Information Officer for Preparedness 

Chief Information Officer for US-VISIT 

Chief Information Security Officer 

Chief Information Technology Officer 

Chief Medical Advisor for Preparedness 

Contingency Planning and Support 

Chief Medical Officer 

Chief of Staff 

Position 

Chief of Staff for Chief Medical Officer 

Chief of Staff for Grants and Training 

Chief of Staff for International Affairs 

Chief of Staff for Management 

Chief of Staff for National Communication System 

Chief of Staff for Operations 

Chief of Staff for Policy 

Chief of Staff for Preparedness 

Chief of Staff for Procurement 

Chief of Staff for Public Affairs 

Chief of Staff for Science and Technology 

Chief Operating Officer for US-VISIT 

Chief Procurement Officer 

Confidential Assistant to the Secretary 

Coordinator for Gulf Coast Relief and Rebuilding 

Counselor and Advisor to the Under Secretary for 

Preparedness 

Counselor to the Assistant Secretary for Policy 

Counselor to the Chief of Staff 

Counselor to the Coordinator for Gulf Coast 

Rebuilding 

Counselor to the Deputy Secretary 

Counselor to the Secretary 

Deputy Assistant Secretary for Grants and Training 

Deputy Assistant Secretary for Infrastructure 

Protection 

Deputy Assistant Secretary for International Affairs 

Deputy Assistant Secretary for International Affairs 

Mission Integration 

Deputy Assistant Secretary for Operations Policy 

Deputy Assistant Secretary for Policy 

Deputy Assistant Secretary for Public Affairs 

Deputy Budget Officer 

Deputy Chief Financial Officer 

Deputy Chief Information Officer 

Deputy Chief Information Officer for Preparedness 

Deputy Chief of Staff for Infrastructure Protection 
Appendix D 

Authorized Users of DHS Executive Transportation Services 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 27

Position 

Deputy Chief of Staff for International Affairs 

Deputy Chief of Staff for Operations 

Deputy Coordinator for Gulf Coast Relief and 

Rebuilding 

Deputy Director for Contingency Planning and 

Support 

Deputy Director for Current Operations 

Deputy Director for FEMA 

Deputy Director for FEMA Gulf Coast Recovery 

Deputy Director for FEMA Operations 

Deputy Director for Homeland Security Operations 

Center 

Deputy Director for International Affairs 

Information Sharing and Knowledge Management

Deputy Director for International Affairs Plans and 

Integration 

Deputy Director for International Affairs 

Requirements 

Deputy Director for Operations 

Deputy Director for Operations Technology 

Deputy Director for US-VISIT 

Deputy General Counsel (two positions) 

Director for OAM 

Director for Budget 

Director for Cargo and Transportation Unit 

Director for Chemical and Nuclear Preparedness and 

Protection 

Director for Citizenship and Immigration 

Director for Citizenship and Immigration Programs 

Director for Contingency Planning and Support 

Director for Counternarcotics 

Director for Counterterrorism Planning 

Director for Current Operations 

Director for Domestic Nuclear Detection 

Director for Equal Employment Opportunity 

Programs 

Director for FEMA Facilities Management 

Director for FEMA Human Resources 

Director for FEMA Mitigation 

Director for FEMA National Security Coordination 

Position 

Director for FEMA Operations 

Director for FEMA Response 

Director for Foreign Financial Investment Policy 

Director for Grants and Training Division of 

Training and Exercises 

Director for Grants and Training Office of Business 

Administration 

Director for Grants and Training Office of 

Community Preparedness 

Director for Grants and Training Policy, Initiatives, 

and Analysis 

Director for Grants and Training Preparedness 

Programs 

Director for Gulf Coast Rebuilding Legislative 

Affairs 

Director for Gulf Coast Rebuilding Policy 

Director for Gulf Coast Rebuilding Public Affairs 

Director for Gulf Coast Rebuilding Public Liaison 

Director for Homeland Infrastructure Threat and 

Risk Analysis Center 

Director for Homeland Security Advisory Council 

Director for Homeland Security Operations Center 

Director for Human Capital Policy and Program 

Innovation 

Director for Immigration and Customs Enforcement 

Mission Operations 

Director for Immigration and Customs Enforcement 

Policy and Planning 

Director for Implementation Planning for the 

Assistant Secretary for Strategic Planning 

Director for Information Technology Solutions 

Delivery 

Director for Infrastructure Protection 

Director for International Affairs Information 

Sharing and Collaboration 

Director for International Affairs Information 

Sharing and Knowledge Management 

Director for International Affairs Plans and 

Integration 

Director for International Affairs Programs and 

Budget 

Director for International Affairs Requirements 
Appendix D 

Authorized Users of DHS Executive Transportation Services 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 28

Position 

Director for International Affairs Risk Assessment 

Director for International Enforcement Policy 

Director for Law Enforcement 

Director for Legislative Affairs 

Director for Legislative Affairs Operations 

Director for Management Office of Safety and 

Environment Programs 

Director for National Capital Region Coordination 

Director for National Communications Systems 

Director for Office of Financial Management 

Director for Office of National Drug Control Policy 

Director for Office of OPO 

Director for Office of White House Liaison 

Director for Policy Office Field Operations 

Director for Preparedness Business Operations 

Director for Preparedness National Cyber Security 

Division 

Director for Science and Technology Research and 

Development 

Director for Science and Technology Systems 

Engineering and Development 

Director for Secure Border Initiative 

Director for Small and Disadvantaged Business 

Utilization 

Director for State and Local Government 

Coordination 

Director for State and Local Government Public 

Safety Coordination 

Director for the Secretary's Scheduling and Advance

Director for Transportation Infrastructure 

Director for US-VISIT 

Director for US-VISIT Border Control 

Director for US-VISIT Interior Enforcement 

Division Director for FEMA 

Executive Assistant for Legislative Affairs 

Executive Officer for Citizenship and Immigration 

Services 

Executive Secretary 

Executive Secretary for Science and Technology 

General Counsel 

Position 

General Counsel for FEMA 

Inspector General 

Legislative Affairs (five positions) 

Legislative Affairs for Science and Technology (two 

positions) 

Legislative Affairs House of Representatives 

Legislative Affairs Senate 

Ombudsman for Citizenship and Immigration 

Services 

Press Secretary for the Privacy Office 

Principal Deputy Assistant Secretary for 

International Affairs 

Privacy Officer 

Program Manager for International Affairs 

Senior Advisor for Privacy 

Senior Business Analyst for Policy 

Senior Counselor to the Secretary 

Senior Immigration Analyst for Immigration and 

Customs Enforcement 

Senior Intelligence Officer for the Deputy Assistant 

Secretary for International Affairs 

Senior Legal Counsel for Grants and Training 

Senior Military Advisor to the Deputy Secretary 

Senior Policy Advisor to the Under Secretary for 

Management 

Senior Policy Advisor to the Under Secretary for 

Preparedness 

Senior Privacy Analyst 

Special Assistant to the Secretary 

Transportation Policy Advisor 

Under Secretary for Management 

Under Secretary for Preparedness 

Under Secretary for Science and Technology 

White House Fellow 
Appendix E 

Shirlington DHS Contracts and Modifications 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 29

April 2004 Contract 

Modification Contract Value 

Action Date Base Year Option 

Exercised 

Option Not 

Exercised Total 

Expiration 

Total 

Accumulative 

Expenditures 

Award 4/27/2004 $ 1,632,708 --- $1,684,116 $ 3,316,824 4/26/2005 

1 9/26/2004 $ 1,829,460 --- $ 1,684,116 $ 3,513,576 4/26/2005 $ 737,449

2 9/16/2004 $ 1,829,460 --- $ 1,684,116 $ 3,513,576 4/26/2005 $737,449 

3 12/27/2004 $ 2,001,684 --- $ 1,684,116 $ 3,685,800 4/26/2005 $1,218,421 

4 3/1/2005 $ 2,189,226 --- $ 1,684,116 $ 3,873,342 4/26/2005 $1,554,289 

5 4/19//2005 $ 3,104,226 --- $ 1,684,116 $ 4,788,342 7/26/2005 $1,966,749 

6 7/22/2005 $ 4,019,226 --- $ 1,684,116 $ 5,703,342 10/26/2005 $3,831,098 

 TOTAL $3,831,098 

October 2005 Contract 

Modification Contract Value 

Action Date Base Year Option 

Exercised 

Option Not 

Exercised Total 

Expiration 

Total 

Accumulative 

Expenditures

Award 10/27/2005 $ 3,935,344 --- $ 17,296,016 $ 21,231,360 10/23/2006 

1 12/27/2005 $ 3,935,344 --- $ 17,296,016 $ 21,231,360 10/26/2006 $614,125 

2 2/1/2006 $ 3,992,652 --- $ 17,707,571 $ 21,700,223 10/26/2006 $614,125 

3 4/6/2006 $ 3,992,652 --- $ 17,707,571 $ 21,700,223 10/26/2006 $1,569,827 

4 7/24/2006 $ 3,992,652 --- $ 17,707,571 $ 21,700,223 10/26/2006 $2,552,170 

5 10/27/2006 $ 3,992,652 $ 3,138,113 $ 14,569,458 $ 21,700,223 7/26/2007 $3,790,378 

 TOTAL $3,790,378 
Appendix F 

Major Contributors to this Report 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 30

Rosalyn G. Millman, Director 

Ruth Blevins, Audit Supervisor 

Donald Emery, Auditor 

Greg Huff, Auditor 

Cheryl Johnson, Auditor 

Robert Long, Auditor 

Cynthia Noel, Auditor 

Brian Smythe, Analyst 

Gary Stivers, Auditor 
Appendix G 

Report Distribution 

DHS Executive Transportation and Shuttle Bus Services Contract Review 

Page 31

Department of Homeland Security

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

General Counsel 

Executive Secretary 

Under Secretary for Management 

Assistant Secretary for Policy 

Assistant Secretary for Public Affairs 

Assistant Secretary for Legislative and Intergovernmental Affairs 

GAO/OIG Audit Liaison 

Chief Procurement Officer 

Chief Privacy Officer 

Director, Office of Procurement Operations 

Office of Management and Budget

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress

 Congressional Oversight and Appropriations Committees, as appropriate 
Appendix F 

Report Distribution 

Additional Information and Copies 

To obtain additional copies of this report, call the Office of Inspector General (OIG) at 

(202) 254-4100, fax your request to (202) 254-4285, or visit the OIG web site at 

www.dhs.gov/oig. 

OIG Hotline 

To report alleged fraud, waste, abuse or mismanagement, or any other kind of criminal 

or noncrimminal misconduct relative to department programs or operations, call the 

OIG Hotline at 1-800-323-8603; write to DHS Office of Inspector General/MAIL 

STOP 2600, Attention: Office of Investigations – Hotline, 245 Murray Drive, SW, 

Building 410, Washington, DC 20528; fax the complaint to (202) 254-4292; or email 

DHSOIGHOTLINE@dhs.gov. The OIG seeks to protect the identity of each writer 

and caller.