FOR OFFICIAL USE ONLY [use red text] 

 

 

DEPARTMENT OF HOMELAND SECURITY FOR OFFICIAL USE ONLY 

Office of Inspector General 

The Science and Technology Directorate’s 

Processes for Selecting and Managing 

Research and Development Programs 

OIG-08-85 August 2008
Office ofInspector General

U.S. Department of Homeland Security

Washington, DC 20528

Homeland

Security

August 7, 2008

Preface

The Department of Homeland Security (DHS) Office ofInspector General (OIG) was established by

the Homeland Security Act of2002 (public Law 107-296) by amendment to the Inspector General

Act of1978. 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 the processes the DHS Science and Technology Directorate uses to select and

manage research and development efforts and balance the funding between various types of

research--basic, innovative, and transitional--and the entities that conduct it. The report also

addresses how the directorate leverages research and development by external organizations and

guards against duplicative work. It is based on interviews with key directorate officials and staff as

well as senior leaders of other relevant agencies and institutions and a review of applicable

documents.

The recommendations herein have been developed to the best knowledge available to our office, and

have been discussed in draft with those responsible for implementation. It is our hope that this

report will result in more effective, efficient, and economical operations. We express our

appreciation to all ofthose who contributed to the preparation ofthis report.

Richard L. Skinner

Inspector General
Table of Contents/Abbreviations 

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

Background............................................................................................................................................2 

Results of Review ..................................................................................................................................4 

Centralized Authority Is Improving R&D Project Management ......................................................4 

S&T Improved Some Project Selection Processes, But Additional Improvements Are Needed ...13 

Recommendations ...........................................................................................................................33 

Management Comments and OIG Analysis....................................................................................33 

Figures 

Figure 1: Former S&T Directorate Portfolio and Technical Divisions ..........................................5

Figure 2: New S&T Organizational Structure for Conducting R&D Projects ...............................7 

Figure 3: Technical Divisions’ Research and Transition Sections ...............................................10

Figure 4: S&T FY 2007 Budget Allocation..................................................................................16 

Figure 5: Lifecycle for S&T R&D Projects by Project Type .......................................................20 

Figure 6: Transition Project Selection Process .............................................................................21 

Figure 7: S&T Transition Integrated Product Teams ...................................................................22 

Figure 8: Technology Oversight Group........................................................................................23
 

Figure 9: Tech Solutions Review Process ....................................................................................25

Figure 10: Basic Research Project Selection Process...................................................................27 

Figure 11: HIPS/HITS Project Selection Process.........................................................................28 

Figure 12: SBIR Project Selection Process...................................................................................32
 

Appendices 

Appendix A: Purpose, Scope, and Methodology ...........................................................................37 

Appendix B: Management’s Comments to the Draft Report.........................................................38 

Appendix C: HIPS/HITS Program Details.....................................................................................43 

Appendix D: Major Contributors to this Report ............................................................................45 

Appendix E: Report Distribution ...................................................................................................46 

Abbreviations 

COE Center of Excellence 

DHS Department of Homeland Security 

FAR Federal Acquisition Regulations 

FFRDC Federally Funded Research and Development Center 

FY Fiscal Year 

HIPS Homeland Innovative Prototypical Solution 

HITS High Impact Technology Solution 

HSARPA Homeland Security Advanced Research Projects Agency 
Table of Contents/Abbreviations 

IPT Integrated Product Team 

R&D Research and Development 

SBIR Small Business Innovative Research Program 

STTR Small Business Technology Transfer Program 

S&T Science and Technology Directorate 
OIG 

Department of Homeland Security 

Office of Inspector General 

Executive Summary 

This report is responsive to two congressional requests, one from the 

Honorable Tom Davis, then-Chairman of the House Committee on 

Government Reform, and the other from the then minority staff of the House 

Committee on Homeland Security. The requests directed us to look at the 

manner in which the Science and Technology Directorate executes its research 

and development programs. 

As a result of new leadership, the Directorate dramatically modified the way it 

does business by improving its management structure and processes for 

identifying, prioritizing, and selecting projects. The Directorate’s new 

organizational structure centralized programmatic and fiscal oversight, and 

improved communications. Its new processes for identifying, prioritizing, and 

selecting each of its five types of projects incorporate Department of 

Homeland Security components’ needs to a greater extent than in the past. 

However, the new processes may not address first responders’ needs 

adequately. Additionally, the processes for identifying, prioritizing, and 

selecting basic research and some innovation projects are not clear or 

documented, making the Directorate vulnerable to concerns of real or 

perceived conflicts of interest. Although ultimately we did not find any 

statutory or regulatory violations, we identified three projects that initially 

appeared to have been chosen for improper reasons. Had there been a process 

in place and record of the rationale for selecting those projects, these 

appearances of bias may have been prevented. We are making three 

recommendations to improve the integrity of the project selection process. 

In addition to its request that we assess changes in the research and 

development programmatic strategy, Congress asked us to evaluate how the 

Directorate decides to fund its projects. The results of that review will be 

submitted in a subsequent report. 

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Background 

Following the tragic events of September 11, 2001, Congress passed the 

Homeland Security Act of 2002, establishing the Department of Homeland 

Security (DHS) and within it, the Science and Technology Directorate 

(S&T).1

 Among other things, the Act entrusted S&T with: 

•	 Conducting basic and applied research, development, demonstration, 

testing, and evaluation activities that are relevant to any or all elements 

of the [d]epartment...;2 

•	 Establishing a system for transferring homeland security developments 

or technology to federal, state, local government, and private sector 

entities;3 

•	 Coordinating with other appropriate executive agencies in developing 

and carrying out the science and technology agenda of the 

[d]epartment to reduce duplication and identify unmet needs.4 

The Act also empowered S&T to establish or contract with federally funded 

research and development centers (FFRDCs)5 and establish university centers 

for homeland security.6 In addition, the Act grants DHS equal access to and 

use of the United States Department of Energy sponsored national laboratories 

at the same costs as the Department of Energy pays and without additional 

administrative fees.7

 Finally, the Act allows S&T to contract its research and 

development (R&D) work to the public sector using routine federal award 

processes and “other transactions authority.”8 

The Homeland Security Act of 2002 also created the Homeland Security 

Advanced Research Projects Agency (HSARPA), which is to be led by a 

Director, appointed by the Under Secretary for Science and Technology.9 The 

Director is mandated to: 

“award competitive, merit-reviewed grants, cooperative 

agreements, or contracts to public or private entities, 

including businesses, ... FFRDCs, and universities to: 

1 6 U.S.C. § 181. 

2 6 U.S.C. § 182(4).
 3 6 U.S.C. § 182(6).
 4 6 U.S.C. § 182(13). 

5 6 U.S.C. § 185. 

6 6 U.S.C. § 188(b)(2).
 7 6 U.S.C. § 189(e). 

8 6 U.S.C. §§ 188 & 391(a). 

9 6 U.S.C. § 187.
 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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•	 Support basic and applied ... research to promote 

revolutionary changes in technologies that would 

promote homeland security; 

•	 Advance the development, testing, and evaluation, and 

deployment of critical homeland security technologies; 

and 

•	 Accelerate the prototyping and deployment of 

technologies that would address homeland security 

vulnerabilities.”10 

Since its inception, S&T has experienced several changes in 

leadership. It has had two Under Secretaries and two acting Under 

Secretaries in 4 years. While some change occurred under each, the 

basic organizational construct and its rules of engagement did not 

change significantly until mid-2006. 

Congress has previously expressed dissatisfaction with the 

management of S&T and its seeming lack of direction. For example, 

in June 2006, the Senate report accompanying the fiscal year (FY) 

2007 DHS appropriations bill included “the [c]ommittee is extremely 

disappointed with the manner in which S&T is being managed.... 

This component is a rudderless ship without a clear way to get back on 

course.”11 

In August 2006, Congress confirmed the appointment of Admiral Jay 

Cohen as the Under Secretary for Science and Technology. The same 

month, the Honorable Tom Davis, then-Chairman of the House 

Committee on Government Reform, requested a review of the 

processes used to initiate and manage HSARPA projects. We 

expanded the scope of our review to include a request by the then 

minority staff of the House Committee on Homeland Security to 

examine the processes by which S&T prioritizes and funds its R&D 

projects. 

10 6 U.S.C. § 187(b)(3).
 11 Senate Report 109-273, U.S. Department of Homeland Security Appropriations Bill, 2007. 

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Results of Review 

Centralized Authority Is Improving R&D Project Management 

The Under Secretary’s new organizational structure improves upon the former 

structure by centralizing decision-making authority and enabling better 

programmatic and fiscal oversight. Six technical divisions execute projects 

within their subject matter areas. Three portfolios: Transition, Research, and 

Innovation/HSARPA, guide the selection and management of the projects 

within each technical division. The new Strategy, Policy, and Budget 

Division, which oversees S&T’s finances, has developed procedures for 

monitoring the financial status and overall progress of S&T R&D projects. 

Division directors meet weekly with the Under Secretary or the Chief of Staff. 

Overall, the new organizational model and processes improve S&T’s ability to 

manage research projects, which should result in the transfer of new 

technology to DHS, other federal entities, and state, local, and tribal first 

responders. 

Original Organizational Structure Was Decentralized and Inhibited 

Information Exchange and Management Oversight 

S&T’s original organizational structure and processes split the responsibilities 

for the projects’ lifecycle between independent offices. The Plans, Programs, 

and Budgets office identified, selected, and determined the funding for the 

R&D projects. S&T staff said that the Plans, Programs, and Budgets office 

did not consistently involve the DHS components when it identified and 

selected projects to pursue. Once it made its selections, the office assigned 

each project to one of three executing offices: the Office of Research and 

Development, HSARPA, or Office of Systems Engineering and Development 

(see Figure 1). These offices were responsible for awarding project funding to 

an R&D entity to execute the project and managing the entity’s progress. 

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Figure 1: Former S&T Organizational Structure for Conducting R&D Projects 

Source: Figure derived from OIG Report 04-24, 10/01/03, S&T Business Process 

The Plans, Programs, and Budgets office assigned the projects to the 

executing offices according to the type of organization that would conduct the 

R&D project, such as national laboratories, FFRDCs, Centers of Excellence 

(COEs), or private industry. The Plans, Programs, and Budgets office 

assigned basic research projects to the Office of Research and Development, 

which would select a national lab, FFRDC, or COE to conduct the work. The 

Homeland Security Act of 2002 mandated that HSARPA undertake projects 

that were revolutionary and that it contract with public or private 

organizations to conduct the work.12 The Plans, Programs, and Budgets office 

nevertheless assigned HSARPA the R&D projects it determined would be 

conducted by private industry alone, regardless of whether they had potential 

for “revolutionary” change. In contrast, the Office of Systems Engineering 

and Development received the more mature R&D projects that were almost 

ready to transition to S&T customers, regardless of whether the organization 

conducting the R&D work was a federal, academic, or private entity. It 

executed its projects through a variety of partners. 

Prior to mid-2006, S&T did not maintain a centralized program management 

or budget tracking system. Some S&T employees said that the Plans, 

Programs, and Budgets office did not follow up consistently on the progress 

of projects it assigned to the executing offices. Similarly, the executing 

offices did not habitually update the Plans, Programs, and Budgets office on 

their projects’ progress or financial status. Each executing office functioned 

12 6 U.S.C. § 187(b)(3)(a). 

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as an independent entity, maintaining its own management and budget 

tracking tools. The absence of overarching, directorate-wide program 

management and budget tracking systems made it difficult for S&T to render 

timely, accurate, and thorough fiscal and project management updates to 

senior S&T and departmental leaders and to Congress. 

As a result of the split in responsibilities and minimal directorate-wide 

program management, some S&T employees said that at times the executing 

offices’ program managers did not adhere to the Plans, Programs, and Budgets 

office’s project descriptions. Rather, the program managers used the project 

funding for other projects that they thought appropriate. Therefore, the 

budgets set by the Plans, Programs, and Budgets office did not match the 

projects that the divisions were conducting. The difference between some of 

the funding approved by the Plans, Programs, and Budgets office and its 

actual use for other projects by the program managers contributed to S&T’s 

inaccurate accounting of its R&D program expenditures. 

According to some S&T employees and DHS component customers, another 

consequence of mismanagement was that S&T transitioned few R&D projects 

to the components. A few other S&T staff said that even though S&T was 

achieving some programmatic success, it was not adept at articulating those 

success stories. Recognizing that it takes 1 to 8 years to get a product to 

market, no one we interviewed was able to identify more than a few 

technologies that had been transitioned to the field by the former leadership 

team. 

The New S&T Organizational Structure Unifies Project Management 

The new Under Secretary reorganized S&T to ensure that single entities, 

called technical divisions, manage R&D projects’ entire lifecycle, from the 

identification of potential projects through prioritization, selection, and 

execution (see Figure 2). The technical divisions are organized according to 

R&D project subject matter, such as explosives, borders, and maritime 

security. In addition, three portfolios—Transition, Basic Research, and 

Innovation/HSARPA—assist the technical divisions in executing the projects. 

Each of the three portfolios focuses on R&D projects at a certain stage of 

development: basic, applied, or transition. The Under Secretary also unified 

the formerly disparate project management processes by implementing a 

single project status report, a new database for tracking project progress, and a 

more robust budget office. The organization and processes are modeled from 

those the Under Secretary developed as the Chief of the Office of Naval 

Research. They provide continuity and strong management oversight, which 

should result in the transition of more technologies to S&T’s customers. 

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Figure 2: New S&T Organizational Structure for Conducting R&D Projects 

Source: Data derived from S&T documents 

S&T’s R&D projects are executed by the technical divisions, with varying 

levels of assistance from the portfolios. The technical divisions are organized 

according to the major subject matter areas of S&T research: 

• Explosives; 

• Chemical/Biological; 

• Command, Control, and Interoperability; 

• Borders and Maritime Security; 

• Human Factors; and 

• Infrastructure and Geophysical. 

The technical division directors maintain subject matter expertise and 

awareness of programs being conducted within the division and also R&D 

work being conducted domestically and internationally. They are responsible 

for the daily oversight of the projects in their divisions. The program 

managers, who are technical division staff, are involved in the day-to-day 

management of their projects, and ensure the projects meet their cost, 

schedule, and performance goals. 

Three portfolios—Transition, Research, and Innovation/HSARPA—and the 

Special Programs division exercise varying degrees of authority over the R&D 

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projects being executed in the technical divisions. Each has a specific 

research focus and methodology. The Transition portfolio has significant 

authority in assisting with the selection and management of the two types of 

projects in its responsibility, transition and Tech Solutions. Transition 

projects are at an advanced stage of development and, if successful, will 

transfer to DHS components or other customers within 3 years. Tech 

Solutions projects address technology needs identified by federal, state, local, 

and tribal first responders. Designed to be completed within 1 year, the Tech 

Solutions projects modify existing technology or use rapid development 

methods to meet first responders’ needs quickly. 

The Research portfolio assists in guiding the technical divisions’ basic 

research projects, which are fundamental, long-term projects that may take up 

to 8 years. Coordinating DHS’ use of the national laboratories and COEs, it 

provides high-level guidance regarding the direction for the technical 

divisions’ basic research. It also has a liaison staff person in each of the 

technical divisions. This portfolio exerts the least control over projects being 

conducted by the technical divisions. 

The Innovation/HSARPA portfolio 

guides the innovation projects HIPS delivers prototype-level

within the technical divisions, demonstrations of game-changing 

which are the Homeland technologies in 2 to 5 years. They

have a moderate to high risk of Innovative Prototypical Solution 

(HIPS) and High Impact failure, but if successful, a high

Technology Solution (HITS) payoff.

projects, and the Small Business 

HITS delivers proofs-of-concept Innovative Research (SBIR) and 

Small Business Technology within 1 to 3 years. They have a

Transfer (STTR) programs. HIPS considerable risk of failure, with

and HITS are projects with a high potential for significant gains in 

risk of failure, but if successful capability. 

would be “game changing,” novel 

uses of technology to solve DHS and first responder technological needs. 

Figure 11 and Appendix C provide detailed information on HIPS and HITS. 

SBIR and STTR programs are legislatively mandated to direct a percentage of 

federal research funding to small businesses. (More information on SBIR and 

STTR programs is available at http://www.sba.gov). The 

Innovation/HSARPA portfolio, in conjunction with the Under Secretary, 

exerts more control over its projects than the other portfolios. In 2007, the 

Under Secretary identified, prioritized, and selected the HIPS and HITS 

projects. The portfolio shared the management of the HIPS and HITS projects 

with the technical divisions. The portfolio also directs the process for 

identifying and awarding the SBIR and STTR projects, and maintains some 

management control over their execution. 

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In addition to the three portfolios, S&T has three other divisions that inform 

S&T division directors. The International and Interagency Programs divisions 

provide insight into research and development being conducted outside of 

S&T. The Special Programs division informs the technical divisions of 

classified programs that might be of interest. The Special Programs division 

also conducts special access projects. Those are R&D projects at any stage of 

development that are classified due to the extremely sensitive nature of the 

technology or the way in which it is used. Relatively few special access 

projects are managed in the technical divisions because of their sensitivity. 

We do not address the special access projects in this review because they are 

classified and limited in number and funding. 

In addition to the portfolios, the Strategy, Policy, and Budget division 

provides fiscal oversight to the R&D projects. The office combines policy, 

planning, programming, budgeting, and financial execution functions. It 

assists the technical divisions with budget development, monitoring, financial 

reporting, and acquisition support. 

As depicted in Figure 3, there are transition and research section chiefs in each 

division who coordinate the work of the technical divisions’ program 

managers with those portfolios. The transition portfolio section chiefs work 

closely with the program managers and with their own portfolio management 

in every aspect of a project, from identifying, prioritizing, and selecting a 

project, through funding and managing it. 

In contrast, the research section chiefs may provide guidance to program 

managers, but the Research portfolio is not as involved with the section chiefs 

and the management of the research projects. This difference between the 

Transition and Research portfolios’ involvement through their respective 

section chiefs is a function of the type of research being conducted in each 

portfolio. The transition projects have more definite specifications and 

deadlines that require close coordination with the customers to whom they 

will be transferred. Research projects are more exploratory and longer term, 

requiring less customer involvement, and less intervention by the Research 

portfolio. 

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Figure 3: Technical Divisions’ Research and Transition Sections 

Source: Figure derived from S&T documents 

Unlike the research and transition section chiefs, there are no 

Innovation/HSARPA section chiefs. The program managers responsible for 

Innovation/HSARPA HIPS and HITS projects report to both the technical 

division director in whose division the program is executed and to the Director 

of Innovation. The reporting relationship is complicated in that not all 

program managers responsible for HIPS and HITS are technical division staff. 

Instead, some are Innovation/HSARPA staff, embedded in the technical 

divisions to execute the HIPS and HITS projects. The reporting relationships 

for the program managers who are Innovation/HSARPA staff have been 

established for personnel matters, such as approvals for the HIPS and HITS 

training and travel requests. 

However, unified rules for governing project progress have not been 

developed because the technical division directors have varying ideas of how 

to share responsibility with the Director for Innovation/HSARPA portfolio. 

Accordingly, the Director of Innovation/HSARPA negotiates the management 

responsibilities for project progress separately with each technical division 

director. This method of operating was ongoing at the time of our fieldwork, 

and should be adequate if it is communicated effectively to the program 

managers. 

The new organizational structure fosters communication between the R&D 

divisions as well as up the chain of command. Since most of the program 

managers are located in the technical divisions, they have easy access to 

subject matter experts within their division. They attend portfolio meetings as 

well as meetings in their own technical divisions, thereby gaining insight into 

the other projects at a similar stage of development as well as those with a 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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similar subject matter focus. The section chiefs pass information and 

guidance from Transition and Research portfolios to the divisions’ R&D 

projects. The program managers report to the technical division directors, 

who with the portfolio, and special support division directors, report directly 

to the Under Secretary and attend weekly senior leadership meetings where 

they provide updates and share information. They use the same tool to 

summarize their projects, a one-page document that describes each project’s 

goals, schedule, and progress. If they disagree on any aspect of a project’s 

activity, the Chief of Staff or the Under Secretary resolves it. This exchange 

of information reduces the risks of redundancy with other projects being 

conducted within or outside of S&T as well as increases the opportunities to 

leverage other research efforts. 

The new organizational structure succeeds in providing unified management 

oversight throughout the lifecycle of each R&D project and networks for 

information exchange. The complementary oversight provided by the 

technical divisions and portfolios ensures that everyone, from program 

managers through senior officials, monitor and share accountability for the 

lifecycle of their projects. By grouping projects by subject matter in the 

technical divisions, program managers can exchange useful information 

related to their projects’ area of science. In addition, program managers can 

share information related to their projects’ developmental level through the 

portfolio’s section chiefs. Technical division and portfolio directors share 

information with each other and the Under Secretary and Chief of Staff in the 

weekly senior leadership meetings. 

S&T Centralized Fiscal Oversight and Developed a Tracking Tool, Providing 

Another Layer of Programmatic Management 

After the Under Secretary began his tenure, S&T centralized the R&D 

programs’ fiscal oversight and developed an electronic tracking tool, which 

should enhance its ability to manage the R&D programs. Prior to August 

2006, S&T was unable to account quickly for the total number of projects and 

funding invested in each due to disparate management and accounting systems 

maintained by the primary R&D organizations. After the Under Secretary 

arrived, the Strategy, Policy, and Budget division began an extensive effort to 

compile a list of all ongoing projects and an accounting of the funding that 

had been committed, obligated, and disbursed for each. 

After compiling the list of funded projects, S&T needed a system for 

maintaining and reporting program information. The Strategy, Policy, and 

Budget division developed an electronic system into which program managers 

regularly enter key project data, such as project milestones, progress, and 

financial outlays. The system is helping S&T management monitor and 

enforce programmatic and fiscal discipline. For example, program managers 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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must enter project execution plans before funds will be allocated for their 

projects. The Strategy, Policy, and Budget division also monitors the rates of 

commitment and obligation of funds to projects. When progress appears 

slow, a Strategy, Policy, and Budget division staff member seeks to identify 

the problem and solve it. 

In addition, S&T uses the data in its annual audits and regular independent 

verification and validation of its R&D projects. Independent verification and 

validation identifies projects for which the performer has not submitted an 

invoice within 180 days and attempts to resolve any fiscal or programmatic 

factors that might be the cause of the delays. S&T had a number of such 

projects when the Under Secretary arrived. Funds were reserved for research 

that never took place. Now when the Strategy, Policy, and Budget division 

encounters a program that has not disbursed funding for 180 days, it works 

with the program manager to contact the performer and determine whether 

there is a problem. The Strategy, Policy, and Budget division assists in 

resolving the problems that are identified. 

The tracking system or the procedures for using it may need to be adjusted. 

Some program managers said that using the system is too time-consuming and 

that the interface is unwieldy. However, the systematic collection of key 

program data into a format that can be used for internal control measures is an 

enormous improvement that will have far-reaching effects on S&T’s ability to 

manage its projects and use its funding effectively. 

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S&T Improved Some Project Selection Processes, But Additional 

Improvements Are Needed 

Many of S&T’s new project selection processes are resulting in better 

informed R&D investment decisions that ultimately will provide DHS 

components and other stakeholders with useful, new technologies. Several 

offices in the new structure provide overarching guidance by monitoring R&D 

work being conducted outside DHS and informing senior staff of the work 

that S&T might leverage. This information also allows S&T to avoid 

inadvertently funding redundant projects. Each of the five project types in the 

new structure has its own process for identifying, prioritizing, and selecting 

the R&D projects it will fund. The processes used for the transition, Tech 

Solutions, SBIR, and STTR projects are clear, documented, and objective. 

The DHS components conduct the processes for selecting the transition 

projects, which is a significant improvement over the former processes that 

did not include the components. However, those processes may not address 

the interests of state, local, and tribal first responders adequately. In addition, 

S&T has not yet established processes for identifying, prioritizing, and 

selecting the basic research and the HIPS and HITS projects. It should do so 

to ensure the most useful projects are selected and to prevent any concern that 

outside organizations improperly assert influence over the selection process. 

S&T was subject to such concerns over its selection of basic research projects 

in the past. During the course of our review, we identified three HIPS and 

HITS projects that initially seemed suspicious, but that we later concluded 

were selected for appropriate reasons. Without a clear process and 

documentation of the rationale, S&T will continue to be prone to suspicion of 

improper motives in project selections. 

Former Processes for Selecting Projects Involved Stakeholders Inconsistently, 

Resulting In Poor Customer Satisfaction 

Previously, S&T did not consistently involve the DHS components or other 

stakeholders in the project selection process. The processes it used were not 

objective and transparent according to some S&T and DHS component staff, 

and S&T provided little documentation to support them. This approach led to 

poor customer satisfaction and may not have resulted in the identification and 

execution of R&D projects that would have had the greatest effect in 

addressing the Nation’s homeland security needs. 

The Plans, Programs, and Budgets office, in conjunction with an Internal 

Review Board, used an Integrated Product Team (IPT) process to identify, 

prioritize, and select R&D projects. The Plans, Programs, and Budgets 

portfolio managers and a representative from each of the former technical 

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divisions: the Office of Research and Development, HSARPA, and the Office 

of Systems Engineering and Development, constituted the IPTs’ membership. 

The IPTs did not include DHS components, other federal agencies, or first 

responders. The IPT members suggested ideas for R&D projects. The Plans, 

Programs, and Budgets office prioritized the projects, but an Internal Review 

Board made the final selection of those that would be funded. 

Some S&T and DHS components’ staff said that because it did not obtain 

ideas for new technologies from the DHS components, S&T selected projects 

that did not meet the components’ needs. The components did not support 

some of the R&D decisions made by S&T and were not disposed to adopting 

the new technologies once they were developed. 

A related problem was that S&T needed objective, transparent procedures for 

identifying, prioritizing, and selecting projects. S&T staff members were 

unable to produce documentation of the former procedures or criteria by 

which S&T selected R&D projects. In addition, some S&T and component 

staff said that awarding projects to certain national laboratories was the 

impetus for decisions to select and fund some projects. Staff said that certain 

national laboratories suggested ideas for R&D projects that interested the 

laboratories, and S&T would fund that research without thoroughly vetting the 

ideas. These staff members said that this inappropriate favoritism harmed 

S&T’s reputation. More importantly, without a thorough and independent 

analysis, S&T may have selected projects that did not address the most 

important homeland security needs. 

The Homeland Security Act of 2002 directed that S&T conduct R&D projects 

that are relevant to all DHS components, and that it establish a system for 

transferring technologies to federal, state, and local governments, as well as 

private sector entities.13 By not including DHS components and other 

customers in the identification of R&D needs, and by not using objective and 

transparent procedures for identifying, prioritizing, and selecting R&D 

projects, S&T did not meet congressional intent, disappointed components, 

and may have missed opportunities to make the Nation more secure. 

Initial Process for Identifying Projects Produced Rational R&D Budget 

Allocation Between Portfolios 

In late 2006, S&T assessed the current inventory of projects before selecting 

new ones. The Strategy, Policy, and Budget division staff compiled a list of 

ongoing projects and worked with DHS components and technical division 

staff to determine which R&D projects should be transitioned into the new 

organizational structure, which should be transitioned but modified, and 

13 6 U.S.C. § 182(4), (6). 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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which should be terminated. As a result, S&T terminated or modified certain 

programs to reflect the DHS mission and the components’ needs. S&T used 

funding saved from the terminated projects to fund other projects, which 

resulted in an equitable allocation of the FY 2007 R&D budget between the 

portfolios. 

The Strategy, Policy, and Budget division and S&T staff identified and 

assessed 167 programs, some of which may have included multiple projects. 

Of those, 50 were former HSARPA efforts. The review process consisted of 

two rounds. Each project was initially assessed to determine whether: 

•	 There was a customer who supported the project; 

•	 The work was being conducted at DHS or elsewhere; 

•	 The funding was being expended; 

•	 The project was at an advanced stage of development; 

•	 The project was relevant to DHS; and 

•	 The technology would have a positive effect on more than one 

component or other S&T stakeholder. 

During the second round, division directors could dispute the projects the 

Strategy, Policy, and Budget division proposed to modify or terminate. They 

considered project and execution plans in making their determinations. 

S&T transitioned the projects it decided to continue into the new 

organizational structure, placing each project in the technical division that best 

matched its subject matter, and aligning each project with either the Research 

or Transition portfolio according to its stage of development. The former 

HSARPA projects were assigned to either the Research or Transition 

portfolios because they were not efforts that promised revolutionary change as 

called for by the Homeland Security Act of 2002. This left the new 

Innovation/HSARPA portfolio with only ongoing SBIR and STTR projects. 

S&T received an appropriation of slightly more than $838 million for 

FY 2007 programs, projects, and activities (see Figure 4 below). It gave the 

funding for the transition and research R&D projects to the technical 

divisions, not to the portfolios. Together, the technical divisions received 

approximately $596 million for R&D projects, which includes a statutorily 

mandated 2.5% of the budget for SBIR projects. In contrast, S&T gave the 

funding for the HIPS and HITS projects to the Innovation/HSARPA portfolio 

instead of the technical divisions. S&T provided $38 million for those 

projects, approximately 5% of its FY 2007 budget. Additionally, S&T placed 

$5.5 million in the Transition portfolio to fund the Tech Solutions projects. 

The total R&D project funding was $639.9 million. The remainder of the 

funding was used to fund R&D support activities. S&T provided the 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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Figure 4: S&T FY 2007 Program, Project, Activity Budget Allocation 

Source: Data derived from S&T documents 

Transition portfolio with $18.5 million to support the SAFETY Act and 

program transitions. The Research portfolio received $154.2 million to fund 

the DHS laboratories, the COEs, and university fellowships. In addition, the 

Testing and Evaluation/Standards division, which develops testing and 

evaluation methodology, received more than $25.4 million to fund its work. 

S&T’s approach to funding the FY 2007 projects was reasonable. After 

terminating unnecessary projects and modifying others, S&T determined that 

the funding allocation between transition and basic research projects was 

proportionally the same as in previous years. S&T officials said that they saw 

no need to change the funding proportions. Because the transition projects 

that were continued with FY 2007 funds had been successful and were 

expected to transition to the components or other customers, it would be 

wasteful and irresponsible to cut the funding for those projects. 

The basic research projects that were continued were long-term efforts in 

areas of interest to the department, such as explosives, chemistry, and biology. 

They should not be stopped without a compelling reason. The HIPS and 

HITS received 5% of the funding, which seems appropriate for projects that 

are likely to fail, but will provide revolutionary advances should they succeed. 

The Tech Solutions projects received a small percentage of funds. Given the 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

Page 16 
 

constraints of reorganizing S&T and managing FY 2007 funds that had 

already been committed, the FY 2008 allocation to the new Tech Solutions 

projects is adequate. However, S&T should consider whether to divert a 

larger proportion of its funds in FY 2010 and beyond to that program, 

depending on first responders’ interest. The SBIR projects received the 

statutorily required amount, and the STTR projects did not receive any 

funding because S&T did not meet the budgetary threshold required for 

funding those projects. 

Using clear criteria to review and terminate projects of negligible value to 

homeland security was a prudent approach to transitioning worthwhile 

projects from the former to the new organizational structure. It ensured that 

the R&D funding and S&T staff were devoted to worthwhile projects. The 

resulting allocation of funds between the R&D programs was rational and 

established a strong financial baseline for the new organization. 

S&T Established New Offices to Capture Ideas and Leverage Other 

Organizations’ Work for Its R&D Projects 

There are many potential sources of ideas for projects, including personal 

knowledge; DHS components; federal, state, and local first responders; and 

work being pursued in other areas of the government and the private sector, 

domestically and internationally. S&T established several new offices to 

improve its ability to identify proposed work or work undertaken outside of 

S&T. These offices have been effective in providing ideas for projects or 

external efforts to leverage. 

International and federal R&D programs provide ideas or projects to leverage 

for the benefit of homeland security. Congress recognized this when it passed 

the Homeland Security Act, which states that the Under Secretary for Science 

and Technology has the responsibility for, among other things: “Coordinating 

with other appropriate executive agencies in developing and carrying out the 

science and technology agenda of the department to reduce duplication and 

identify unmet needs.”14 

The S&T Interagency, International, and the Special Programs divisions 

capture and disseminate information about federal, international, or sensitive 

R&D efforts that might fulfill S&T’s priorities so that S&T may avoid 

conducting redundant efforts inadvertently and may leverage the work of 

others. The new Interagency Programs division reviews R&D programs of 

other domestic federal agencies and national laboratories. Likewise, the 

International Programs division evaluates international projects that S&T may 

leverage. Both report programs of interest to the technical division directors 

14 6 U.S.C. § 182(13). 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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for their consideration. One key responsibility of the Director of the Special 

Programs division is to provide the portfolios and technical divisions with 

information about classified or especially sensitive programs that are relevant 

to their projects. Each of these entities uses a broad network of informal and 

formal contacts to gather information, and each has already assisted in 

identifying relevant research. 

The private sector is another source of ideas for R&D projects. S&T staff at 

all levels said that vendors bombard them with oral and written presentations 

of ideas for R&D projects that they believe S&T should award to them. Some 

vendors are simply marketing their ideas, which S&T refers to as unsolicited 

concepts; others are submitting official, written offers, referred to as 

unsolicited proposals. 

To manage the growing number of unsolicited proposals and concepts, and 

ensure the subject matter experts in the technical divisions are aware of them, 

the Under Secretary created the Office of Concepts and Ideas in the Transition 

portfolio. S&T staff who receive unsolicited concepts and proposals should 

forward those documents to the new office. The office logs the documents 

and forwards the unsolicited ideas to the appropriate technical divisions, and 

the unsolicited proposals to the DHS Office of Procurement Operations for 

handling in accordance with the federal acquisition regulations. The Office of 

Concepts and Ideas provides a pragmatic solution for tracking the numerous 

unsolicited ideas that come in to S&T. However, many of the S&T 

employees we spoke with did not know that the office existed. As a result, the 

office may not receive all of the ideas that are submitted, which would 

undermine its effectiveness. S&T plans to train its employees on procedures 

for handling unsolicited proposals and concepts. 

S&T Has Improved Some Processes for Selecting R&D Projects, Although It 

Should Improve Others 

After identifying the transition and former HSARPA projects to continue in 

FY 2007, S&T needed to establish processes for selecting those projects in 

FY 2008 and the future. In addition, it had to establish processes quickly for 

selecting the HIPS, HITS, SBIR, and Tech Solutions projects that it would 

fund in 2007. 

Previously, S&T relied on one office, Plans, Programs, and Budgets, and an 

Internal Review Board to identify and prioritize the R&D projects. Today, 

there is a unique selection process for each type of project in which the 

technical divisions and portfolios have varying levels of responsibility. 

Involving the technical divisions in the selection of projects improves 

accountability throughout the project lifecycle. 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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The processes for selecting transition, Tech Solutions, and SBIR projects are 

adequate, and in the case of Transition projects are excellent, because they use 

a clear process with objective criteria, and they are repeatable. However, the 

S&T technical divisions, which are responsible for the selection of basic 

research projects, have not developed clear, repeatable processes or criteria for 

selecting those projects. In addition, the Under Secretary, who was 

responsible for the selection of the Innovation portfolio’s HIPS and HITS 

projects, did not establish a process or clear criteria for selecting the projects 

for FY 2007. 

S&T may not have had enough time to develop processes and criteria for 

selecting basic research and HIPS and HITS projects for FY 2007, given that 

the Under Secretary’s appointment was confirmed in August 2006, and much 

of the first months of his tenure was dedicated to identifying and reviewing 

projects and reorganizing the directorate. We commend S&T for quickly 

initiating repeatable, objective processes for selecting transition, Tech 

Solutions, and SBIR projects, and we recommend changes to the selection 

processes for basic research and HIPS and HITS projects. The processes now 

in place are illustrated in Figure 5. 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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Figure 5: Lifecycle for S&T R&D Projects by Project Type 

Source: OIG derived from multiple sources 

Process for Selecting Transition Projects Is Rational and Repeatable 

DHS components now identify, prioritize, and select the transition projects 

that S&T will fund. Accordingly, the new process will improve S&T’s ability 

to meet the components’ needs for new technologies. Additionally, the results 

of the process influence the selection of basic research, HIPS and HITS, and 

SBIR projects. This cascading effect will further enhance the directorate’s 

success in developing new technologies that will have a direct effect on the 

components’ operations. The process is modeled after one that the Under 

Secretary developed at the Office of Naval Research, and is documented and 

repeatable. Given that approximately half of S&T’s R&D budget is allocated 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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to transition projects, having a strong project selection process is important to 

its success and the success of the organizations it supports. 

As a result of the Strategy, Policy, and Budget division’s review and transfer 

of projects to the new organizational structure, the technical divisions 

inherited projects that consumed their FY 2007 and FY 2008 transition project 

budgets. Therefore, they did not have to identify and select projects for those 

years. However, to select projects for FY 2009 and beyond, the technical 

divisions and the Transition portfolio implemented a new IPT process. 

Figure 6 plots the path that transition projects take from identifying potential 

projects through prioritizing and selecting them. The key change in the new 

process is that DHS components are now responsible for identifying, 

prioritizing, and selecting transition projects. 

Figure 6: Transition Project Selection Process 

Source: OIG derived from multiple sources 

The Under Secretary established IPTs for major areas of interest for homeland 

security, each with its own budget for funding transition projects. IPT 

membership consists of a lead entity or entities, which is always one or more 

DHS components; the S&T technical division that most closely corresponds to 

the IPT’s area of interest; and an acquisition staff member from the lead 

component. Some end-users may attend IPT meetings, but nonfederal endusers generally are not invited. End-users are nonvoting members. The 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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IPT Component Lead / 

Co-lead 

Acquisition 

Lead 

S&T Division Facilitator End User 

Border Security United States Customs & 

Border Protection / United 

States Immigration & 

Customs Enforcement 

DHS 

Component 

Borders & Maritime Security Agents 

Cargo Security United States Customs & 

Border Protection 

DHS 

Component 

Borders & Maritime Security Officers / Industry 

Chem/Bio 

Defense 

Office of the Chief Medical 

Officer / Office of 

Infrastructure Protection 

DHS 

Component 

Chemical & Biological Policy 

Cyber Security National Protection & 

Programs 

DHS 

Component 

Command, Control, & 

Interoperability 

Infrastructure Owners / 

Operators 

Explosives 

Prevention 

Transportation Security 

Administration / United 

States Secret Service 

DHS 

Component 

Explosives Agents 

Incident 

Management 

Federal Emergency 

Management Agency 

DHS 

Component 

Infrastructure & Geophysical First Responders 

Interoperability Federal Emergency 

Management Agency / 

National Protection and 

Programs – Office of 

Emergency 

Communications 

DHS 

Component 

Command, Control, & 

Interoperability 

Emergency Responders 

Information 

Sharing 

Office of Intelligence 

Analysis 

DHS 

Component 

Command, Control, & 

Interoperability 

Office of Operations 

Coordination / 

Homeland Security 

Infrastructure Threat & 

Risk Analysis Center 

Infrastructure 

Protection 

Office of Infrastructure 

Protection 

DHS 

Component 

Infrastructure & Geophysical 

Maritime Security United States Coast Guard DHS 

Component 

Borders & Maritime Security 

People 

Screening 

Screening Coordination 

Office / United States 

Citizenship & Immigration 

Service 

DHS 

Component 

Human Factors 

components most closely aligned with the end-users are supposed to represent 

their interests. Any DHS component may attend any meetings, but they 

cannot vote. S&T facilitates the meetings, but also does not vote. Figure 7 

shows the composition of the IPTs. 

Figure 7: S&T Transition Integrated Product Teams 

Source: Figure derived from S&T documents 

The IPTs meet at least four times to identify and select projects. During the 

first two meetings, the component members identify gaps in their capabilities 

that correspond to the IPT’s subject focus and then prioritize the gaps. 

In the interim, S&T technical division staff members research whether 

technology is already available or research is occurring elsewhere to address 

the prioritized gaps identified in the first two meetings. Regardless of the 

outcome, S&T develops a high-level plan for R&D approaches to resolve the 

gaps, and it identifies funding requirements. During the third and fourth 

meetings, the IPTs review S&T’s plans and determine which projects to 

undertake given budgetary limits and the estimated funding required for each 

proposed project. 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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To ensure that they are serious about their investments and will transition the 

projects, S&T asks the components to sign Technology Transfer Agreements. 

Technology Transfer Agreements are the culmination of negotiations to 

solidify the program’s specifications, schedule, and acquisition. 

To ensure they align with homeland security priorities, the Technology 

Oversight Group reviews the IPT’s project selections. Members of this senior 

DHS technology review committee include the Deputy Secretary, who serves 

as chairman; the DHS Chief Financial Officer; the Under Secretaries of 

National Protection and Programs (formerly, Preparedness) and Management; 

and the Under Secretary for Science and Technology, who is a nonvoting 

member (see Figure 8). 

Figure 8: Technology Oversight Group 

Source: Figure derived from S&T documents 

In addition to reviewing the IPTs’ lists of transition projects to fund, this year 

the Technology Oversight Group had a $35 million realignment budget to 

fund projects it considered important, but which the IPT budgets were unable 

to fund. The group used the realignment budget to fund 18 FY 2009 programs 

for seven IPTs. 

Once the Technology Oversight Group finalizes the list of projects, Project 

IPTs meet to refine project plans, specifications, and schedules and monitor 

their progress once they have been initiated. The IPT representatives delegate 

staff to serve on the project IPTs. 

The components are very enthusiastic about the IPT process, especially their 

role in identifying and prioritizing gaps and selecting appropriate technology 

solutions. The components expressed minor concerns about some process 

issues, which should be resolved as the process matures. For example, S&T 

scheduled the initial IPT meetings too closely together, some information 

needed to be distributed better, and it was not entirely clear what S&T 

intended as next steps following the IPTs. S&T’s Transition portfolio is 

working with the components to address these issues. 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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In addition, some S&T staff expressed concern that the IPTs did not include 

state, local, and tribal first responders. The Homeland Security Act of 2002 

directs S&T to transfer technologies to federal, state, local, and tribal 

governments, and private sector entities.15 S&T responded that state, local, 

and tribal partners need not attend the IPTs because the components are in 

regular contact with these authorities and can represent their interests at the 

IPT meetings. Additionally, S&T said that the Tech Solutions office accepts 

suggestions for technology improvements directly from all first responders, 

thus providing them with a forum for voicing their capability gaps. As the 

components may not know all of the first responders’ needs and concerns, the 

IPTs may not identify, prioritize, and select transition projects that address the 

needs of all. Additionally, Tech Solutions has very little funding to address 

the first responders’ needs. S&T should consider whether to modify the 

process to incorporate the needs and requirements of state, local, and tribal 

first responders. 

The process has not been completely successful from S&T’s perspective 

either. The components have been reluctant to sign the Technology Transfer 

Agreements. S&T believes that once the component leads understand the 

importance of the agreements, they will support them. Some Technology 

Transfer Agreements may not be signed because the component 

representatives cannot guarantee the availability of funding in future years. In 

such cases, the best result may be a good faith agreement that would recognize 

the component’s commitment to transitioning the technology, but would 

stipulate that potential obstacles outside the control of the agency might affect 

the transition process. S&T will continue to move the projects forward while 

it works with the components to secure the Technology Transfer Agreements 

or good faith agreements. 

S&T’s inability to secure Technology Transfer Agreements and other issues 

are relatively small compared to the success of the new IPT process for 

identifying and selecting Transition projects. The new process is a rational 

method that ensures that transition projects reflect the needs of components. 

Successful transition projects will provide the components and other S&T 

customers with technologies they need to complete their mission. 

Process for Selecting Tech Solutions Projects Is Adequate and Evolving 

The Transition portfolio’s Tech Solutions office has a clear, sustainable 

process with objective criteria for selecting its R&D projects. The office 

obtains ideas for projects by asking federal, state, local, and tribal first 

responders to submit descriptions of gaps in their capabilities to an email box, 

15 6 U.S.C. § 182(6). 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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techsolutions@dhs.gov. However, unlike the IPT process for transition 

projects, first responders do not prioritize and select the projects to be funded. 

Instead, the S&T Tech Solutions staff members work with an interagency 

board that is sponsored by DHS, the United States Department of Justice, and 

the United States Department of Defense to prioritize and select the projects 

that meet its criteria of requiring less than $250,000 in S&T funding and less 

than a year to complete in prototype. In addition, the board weighs the 

relative need of the projects against each other. The board vets the ideas with 

S&T technical division staff, DHS components, national laboratories, or the 

private sector to determine possible solutions, their cost, and completion 

requirements. 

The interagency board is piloting a modified process for prioritizing projects. 

In addition to cost, speed, and need, the process assesses: the risk of failure, 

which must be low to medium; and the maturity of the technology, which 

must be more advanced than basic research. 

Tech Solutions provides first responders the opportunity to contribute directly 

to the project selection process by communicating their gaps in capability to 

S&T. The process, shown in Figure 9, is repeatable, documented to some 

degree, and uses clear criteria. It should assist S&T in selecting projects that 

will be most useful to the first responder community. 

Figure 9: Tech Solutions Review Process 

Source: Figure derived from S&T documents 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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Basic Research Project Selection Process Needs To Be Defined 

S&T staff and other department officials said that in the past, S&T used the 

national laboratories to identify basic research projects that the laboratories 

wanted to undertake. S&T selected those projects with little analysis of 

overall homeland security needs, according to those staff members. To avoid 

these problems in the future and to ensure S&T dedicates its basic research 

budget to the work that is most meaningful to homeland security, it should 

develop and document a repeatable process with objective criteria for 

prioritizing and selecting basic research projects. 

Basic research projects explore more fundamental areas of science. S&T 

views basic research as a pipeline of work that in 8 years or less may become 

transition or innovation projects. Due to their long-term nature, basic research 

projects do not change much, and S&T does not award new ones often. S&T 

allotted 10% of the FY 2007 R&D budget to continuing existing basic 

research projects and initiating a few new projects. 

S&T staff said that the technical divisions’ research section chiefs will exert 

considerable influence over the identification and selection of basic research 

projects. They are division staff who report to their respective division 

directors, but maintain an informal reporting relationship to the Director of 

Research. 

The research section chiefs will use the IPTs’ results as a source of ideas in 

identifying and prioritizing future basic research projects, and they have 

already adjusted some of the research projects to align with the capability gaps 

articulated by the IPTs. Also, the Interagency, International, and Special 

Programs divisions, as well as the national laboratories, COEs, and the private 

sector, will serve as sources for basic research project ideas. However, at the 

time of our fieldwork, S&T had not developed a process or criteria for 

prioritizing and selecting the basic research projects. Without a clear process 

and criteria, S&T may not select the projects that are most needed and will 

remain vulnerable to perceptions that national laboratories or others have too 

much influence over the process. S&T should develop a clear, repeatable 

process with objective criteria for identifying, prioritizing, and selecting basic 

research projects. The selection process for basic research projects is shown 

in Figure 10. 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

Page 26 
Figure 10: Basic Research Project Selection Process 

Source: OIG derived from multiple sources 

Process for Selecting New HIPS and HITS Projects Needs Stronger Internal 

Controls 

The Under Secretary assumed responsibility for identifying, prioritizing, and 

selecting the FY 2007 HIPS and HITS projects, but did not document the 

process or its results. Figure 11 shows the HIPS/HITS project selection 

process. We learned that the Under Secretary selected three projects that were 

suggested by business acquaintances from his tenure as Chief of Naval 

Research, each of whom sought funding to conduct the work. We concluded 

that the Under Secretary did not select these or any other projects in order to 

award project funding later to certain industry members. However, the 

method by which the projects were selected was not documented and the 

selection criteria were not clear, which cast initial doubt on the fairness of the 

selection of the three projects. 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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Figure 11: HIPS/HITS Project Selection Process 

Source: OIG derived from multiple sources 

Without a clear system for documenting the reasons for the project selections, 

S&T remains vulnerable to real or perceived conflicts of interest and abuses of 

position. S&T should develop a more rigorous process for identifying, 

prioritizing, and selecting HIPS and HITS projects, and ensure the process 

documents the reasons behind the selections. Additionally, the Under 

Secretary should delegate the responsibility for managing the process to the 

Director of Innovation/HSARPA. 

The Under Secretary acquired HIPS and HITS ideas from several sources 

early in his tenure at S&T. One was from the remarks of senior DHS leaders 

at an October 2006 offsite meeting hosted by Secretary Chertoff. During the 

meeting, senior component representatives discussed mission challenges and 

gaps in capabilities. The Under Secretary said that the information presented 

by component representatives unexpectedly gave him ideas for developing 

revolutionary, new technologies to meet the department’s needs. Other ideas 

arose from some of the Under Secretary’s acquaintances from private industry 

and academia, who suggested HIPS and HITS projects to him. 

In December 2006, the Under Secretary decided on 15 HIPS and HITS 

projects that reflected the needs of the components. He did not document the 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

Page 28 
 

 

 

process or the criteria he used in making the selections, other than that he 

ensured that each technical division had at least one project to balance 

innovative advancements across the missions of DHS. He discussed the list 

with the Director of the Innovation/HSARPA portfolio and with the S&T 

Corporate Board, which is composed of the Chief of Staff, three portfolio 

directors, and six technical division directors. They provided their opinions 

on the proposed projects, but they did not fundamentally change the list. 

Next, the Under Secretary presented the list to senior DHS leadership, who 

approved it, and then to Congress, which approved all but one of the projects. 

Later, the Under Secretary increased the number of projects to 19, but S&T 

cancelled one project in June 2007. 

The Under Secretary selected three projects that had been suggested by some 

of his business acquaintances from his tenure as Chief of Naval Research. In 

2007, S&T awarded two of these projects to the entities that had suggested 

them. The funding for the third was to be awarded by means of a competitive 

process in which the industry member who proposed the idea was 

participating. Some S&T staff members familiar with the projects initially 

suspected that the Under Secretary had preselected certain industry members 

and their projects on the basis of his relationships with them, not on the merit 

of their project proposals. The Under Secretary and members of the Office of 

Procurement Operations stopped the third procurement when they learned of 

those concerns. We reviewed the circumstances of the three selections and 

concluded that they were made for legitimate reasons. 

Even though we did not identify any improper FY 2007 HIPS and HITS 

selections, the initial appearance of unfairness in the selections is problematic. 

Such appearances could undermine the public’s trust in the department. The 

FAR encourages pre-solicitation engagement with industry,16 but it cautions 

that business must be conducted with integrity, fairness, and openness. 

“An essential consideration in every aspect of the System 

[acquisition system] is maintaining the public’s trust. Not 

only must the System have integrity, but the actions of each 

member of the Team must reflect integrity, fairness, and 

openness.”17 

The selection of HIPS and HITS should be the result of an objective, 

analytical process that ensures S&T does not overlook the most promising 

revolutionary technologies, and is not, in fact or perception, unduly biased 

toward any particular provider. The circumstances surrounding the selection 

of the three projects above were brought on by several factors. 

16 FAR 15.201. 

17 FAR 1.102-2(c)(1). 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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•	 The Under Secretary and S&T had little time to identify all of the 

HIPS and HITS projects and improvised throughout the process. Time 

constraints contributed to the Under Secretary not documenting the 

process and rationale for selecting these projects. 

•	 The Under Secretary’s role as both the agency’s spokesperson and the 

official selecting the HIPS and HITS projects put him in a potentially 

awkward and conflicted position regarding his role as project selection 

official. 

•	 The Under Secretary’s familiarity with the R&D community is 

extensive, and the same community used those relationships to gain 

unique access to him, his managers, and potential federal funding. 

The need to select projects quickly without a documented process or rationale 

when combined with the Under Secretary’s dual roles and large network of 

R&D contacts challenged S&T’s adherence to acquisition policies and 

procedures. Although we later learned that our concerns were unfounded, 

S&T should make changes to avoid the likelihood that similar appearances 

arise in future selections of HIPS and HITS projects. 

One of the Under Secretary’s duties as chief S&T executive is to garner the 

best ideas for improving homeland security. To accomplish this, he engages 

industry representatives at conferences and meetings, and maintains an “open 

door policy” to encourage them to provide ideas for homeland security R&D 

projects. Industry representatives are also eager to meet the Under Secretary 

to present their ideas and pursue federal funding for their work. The Under 

Secretary cannot possibly meet everyone who wants to promote their 

suggestions for R&D projects; yet on the basis of his meetings with industry 

and DHS officials and without a clear process or criteria, he decided which 

HIPS and HITS projects to pursue. The Under Secretary’s dual 

responsibilities of encouraging industry to engage with S&T and leading the 

selection of HIPS and HITS projects were inherently risky when carried out 

simultaneously as they may raise concerns of favoritism or lack of objectivity. 

Furthermore, the Under Secretary said that when he arrived at S&T he 

intended to reach out to “proven performers,” those industry members and 

academics who had conducted successful R&D projects in the past that could 

provide ideas and perhaps R&D services. Also, these performers, some of 

whom were familiar to the Under Secretary from his years at the Office of 

Naval Research, sought to conduct work for S&T and obtain funding for their 

projects. Given the Under Secretary’s predisposition to rely on proven 

performers, the pool of ideas for HIPS and HITS was more likely to be limited 

to those acquaintances and the few others who meet with him. If he relies on 

proven performers with whom he is already acquainted, he raises the 

possibility of the appearance of bias in project selection. 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

Page 30 
We are not advocating that the Under Secretary abandon his open door policy, 

as federal acquisition regulations allow for and govern such interactions. 

However, to remove any doubt about S&T’s adherence to regulations, S&T 

needs to incorporate stronger internal controls into the process for selecting 

the HIPS and HITS. The Under Secretary said he will establish policies and 

procedures for documenting the selection of future HIPS and HITS projects. 

In addition, the Under Secretary should remove himself from the selection 

process, and assign the Director of Innovation/HSARPA to develop objective 

criteria and oversee the identification and selection of HIPS and HITS 

projects. Innovation staff should be required to document the rationale for 

each selected project. 

SBIR Project Selection Process Is Evolving 

The federal SBIR Program, mandated by the Small Business Innovation 

Development Act of 1982 (Public Law 97-219), exists to involve small and 

disadvantaged businesses in federal R&D work. S&T’s former process for 

identifying and selecting SBIR projects was not rigorous, but the office plans 

to implement a new program for FY 2008 projects. The new process for 

identifying programs will involve direct consultations with the IPTs. Figure 

12 shows the SBIR project selection process. 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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Figure 12: SBIR Project Selection Process 

Source: OIG derived from multiple sources 

For FY 2007, the SBIR office asked each of S&T’s six technical divisions to 

submit a prioritized list of potential SBIR projects. The Director of 

Innovation/HSARPA selected the top priority topic from each of the divisions 

using the criteria of whether the project would fill the needs of multiple DHS 

components and other homeland security providers. In FY 2008, the SBIR 

office will ask the IPTs to identify their top priorities for SBIR projects. The 

S&T representative to the IPTs will evaluate the IPTs’ submissions. S&T 

officials said that they will probably select one project from each IPT, using 

criteria similar to that used in FY 2007. However, the SBIR office may 

choose not to select an IPT’s choice, should the proposed project not have a 

strong justification. As a component of the Innovation portfolio, the SBIR 

office may also consider selecting a project from the list of HIPS and HITS. 

The SBIR Program’s proposed method for identifying new programs in 

FY 2008 and beyond will reflect the interests of the components as 

communicated to them through the IPTs, which is a positive change from the 

former process. As SBIR refines its project identification processes, it should 

develop further and document the criteria for prioritizing and selecting 

projects. 

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Recommendations 

We recommend that the Under Secretary for Science and Technology: 

Recommendation #1: Determine whether the IPT process is satisfying the 

needs of state, local, and tribal first responders. If their needs are not being 

considered adequately, S&T should develop processes for including the first 

responders’ gaps in capabilities in its IPT processes. 

Recommendation #2: Direct the Director of Research to work with the 

technical division directors and their Research Section Leads to develop and 

document clear, repeatable processes with objective criteria for prioritizing 

and selecting basic research projects. 

Recommendation #3: Transfer responsibility for identifying, prioritizing, 

and selecting the HIPS and HITS to the Director of the Innovation/HSARPA 

portfolio and charge the director with developing and documenting clear, 

repeatable processes with objective criteria for identifying, prioritizing, and 

selecting HIPS and HITS projects. 

Management Comments and OIG Analysis 

S&T provided technical and formal comments to our report. In his letter 

transmitting those documents, the Under Secretary provided comments, as 

well. S&T concurred with our recommendations, but also suggested some 

changes. We evaluated all of the comments and modified the report where 

appropriate. Appendix B provides a copy of S&T’s formal comments and the 

Under Secretary’s letter. We summarized those comments and provided our 

analysis of them in the following paragraphs. 

Recommendation #1: Determine whether the IPT process is satisfying the 

needs of state, local, and tribal first responders. If their needs are not being 

considered adequately, S&T should develop processes for including the first 

responders’ gaps in capabilities in its IPT processes. 

S&T Response: S&T concurred with the recommendation and suggested that 

activities it has undertaken satisfied this recommendation. S&T commented 

that it has increased its outreach to the state, local, and tribal governments, as 

well as the information it transmits to the IPTs on behalf of those groups. For 

example, S&T expanded the title and responsibilities of one of its 

management positions to Director of Interagency and First Responder 

Programs, which now serves as a liaison to national and international first 

responder associations in addition to other duties. S&T also established a 

liaison position in the California Governor’s Office of Homeland Security, 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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and it may initiate similar programs with other states if this pilot program in 

California is successful. Additionally, S&T continues to conduct national 

interagency outreach to coordinate federal, state, local, and tribal 

collaboration. S&T will update the IPTs with information gathered from each 

of these activities. 

OIG Analysis: S&T has satisfied this recommendation. S&T has established 

formal lines of communication that should enhance the IPT’s understanding of 

the state, local, and tribal first responders’ needs. 

Accordingly, this recommendation is resolved and closed. No other action is 

required. 

Recommendation #2: Direct the Research section chiefs to work with their 

technical division directors to develop and document a clear, repeatable 

process with objective criteria for prioritizing and selecting basic research 

projects. 

S&T Response: S&T concurred with our recommendation in general, but 

suggested that we modify the wording to: 

Direct the Director of Research to work with the technical 

division directors and their Research Section Leads to develop 

and document clear, repeatable process[es] with objective 

criteria for prioritizing and selecting basic research projects. 

In addition, S&T noted that the Director of Research recently completed a 

review of the divisions’ basic research programs and processes, and is 

currently assessing whether S&T’s portfolio of basic research projects is 

complete and free of redundancies. The Director of Research is refining and 

documenting the processes by which S&T identifies, prioritizes, and selects 

basic research projects. Additionally, S&T has established a Research 

Council to coordinate a consistent approach to planning and executing basic 

research projects, which would include project selection. In addition, the 

National Academy of Sciences is helping S&T determine a better means of 

measuring effectiveness of the portfolio. 

OIG Analysis: We agree with S&T’s suggestion and we modified the 

recommendation (see page 33). 

S&T has indicated that it is undertaking steps to fulfill the recommendation. 

In its action plan, S&T should provide evidence that it has implemented clear, 

repeatable processes with objective criteria for selecting basic research 

projects. The recommendation is resolved and open. 

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Recommendation #3: Transfer responsibility for identifying, prioritizing, 

and selecting the HIPS and HITS projects to the Director of the 

Innovation/HSARPA portfolio and charge the Director with developing and 

documenting clear, repeatable processes with objective criteria for identifying, 

prioritizing, and selecting HIPS and HITS projects. 

S&T Response: While the Under Secretary disagreed with information 

conveyed in this section of the report, S&T concurred with recommendation 

#3 and reported it has taken steps to satisfy it. The Under Secretary disagreed 

with our characterization of the HIPS and HITS selection process as unfair, 

especially because we determined that no legal or regulatory violations were 

committed. He briefed DHS leadership, the Office of Management and 

Budget, and Congress about the projects, which brought objectivity and 

fairness to the process. The Under Secretary recommended that, absent a 

violation of statute or regulation, we should limit our discussion in this section 

to a recommendation that S&T establish and document a more formal and 

repeatable process. S&T proposed several changes to our report to reflect 

these concerns. 

In its formal comments, S&T noted that it has established a formal process for 

identifying and prioritizing new HIPS and HITS projects. The Director of 

Innovation will review project ideas and brief the S&T Corporate Board, the 

Deputy Under Secretary, and the Under Secretary, who will be given an 

opportunity to modify the list. The Under Secretary will brief the list to the 

Technology Oversight Group. 

OIG Analysis: We reviewed the Under Secretary’s comments on the 

Selection of HIPS and HITS section of our draft report and modified the 

section, where appropriate. We understand that the Under Secretary vetted 

the list of HIPS and HITS projects with senior DHS management, the Office 

of Management and Budget, and Congress. However, those actions did not 

overcome the causes of our initial concern. Although we concluded that no 

regulatory or statutory violations occurred, S&T is not fulfilling the FAR’s 

direction that the actions of each person involved in an acquisition reflect 

“integrity, fairness, and openness” in order to maintain the public’s trust. The 

Under Secretary emphasized that he does not have acquisition authority. Yet, 

the planning and selection processes are the initial steps in an acquisition. By 

engaging in those actions, the Under Secretary avails himself to the provisions 

of the FAR. 

Without an objective, documented process to provide the underlying rationale 

for his decisions, the Under Secretary’s selections of three HIPS and HITS 

projects initially appeared unfair. We discussed the three incidents because 

they illustrate the impact of not having such a process. However, we modified 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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this section to state more clearly that the Under Secretary’s actions did not 

violate any statutes or regulations. 

In its action plan, S&T should provide: (1) documentation of the new process, 

including the criteria that will be used to identify, prioritize, and select new 

HIPS and HITS projects; and (2) documentation showing that S&T has 

transferred responsibility for the HIPS and HITS project selection to the 

Director of Innovation/HSARPA, and charged the Director with establishing a 

repeatable and objective project selection process. 

This recommendation is resolved and open. 

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Appendix A 

Purpose, Scope, and Methodology 

This report is responsive to two congressional requests, one from the 

Honorable Tom Davis, then Chairman of the House Committee on 

Government Reform, and the other from the then minority staff of the House 

Committee on Homeland Security. The requests directed us to look at the 

manner in which S&T executes its R&D programs. 

The purpose of our review was to examine the processes S&T uses to identify, 

prioritize, select, and manage R&D investments and balance the funding 

between basic, innovative, and transition research and the entities that conduct 

it. Our report is based on interviews with key S&T officials and staff as well 

as senior leaders of other relevant DHS agencies and institutions, and a review 

of applicable laws, regulations, and documents. 

Our fieldwork was conducted from January 2007 to November 2007. During 

this period, we conducted more than 120 interviews, including 12 senior 

officials in seven DHS components who provided insights into the 

effectiveness of S&T’s new IPT process. We also interviewed S&T officials 

and staff to learn about the current and former organizational structure and 

management processes. In addition, we interviewed a number of senior staff 

at national laboratories and S&T program partners at certain Centers of 

Excellence to obtain their perspectives of current and former S&T operations. 

We reviewed and analyzed extensive documentation. We studied related 

laws, regulations, executive orders, and DHS management directives. We 

reviewed S&T guidelines and procedures, and analyzed S&T financial 

documents. Lastly, we examined reports from the General Accountability 

Office, relevant speeches, testimony, and news articles. 

Due to the classified nature of the Special Programs division’s projects in 

S&T, we did not review how these programs are identified, selected, awarded, 

or managed. 

This review was conducted under the authority of the Inspector General Act of 

1978, as amended, and according to the Quality Standards for Inspections 

issued by the President’s Council on Integrity and Efficiency. 

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Appendix B 

Management’s Comments to the Draft Report 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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Appendix B 

Management’s Comments to the Draft Report 

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Appendix B 

Management’s Comments to the Draft Report 

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Appendix B 

Management’s Comments to the Draft Report 

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Appendix B 

Management’s Comments to the Draft Report 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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Appendix C 

HIPS/HITS Program Details 

Homeland Innovative Prototypical Solutions (HIPS): 

•	 Deliver prototype-level demonstrations of game-changing 

technologies in 2 to 5 years 

•	 Moderate to high risk, with high payoff 

Explosives Chemical & 

Biological 

Command, 

Control, & 

Interoperability 

Borders & 

Maritime 

Security 

Human Factors Infrastructure & 

Geophysical 

Project CHLOE: None Scalable Scalable Future Attribute Resilient 

High altitude Common Composite Screening Electric Grid 

aerial platform Operating Vessel Technology (REG): System 

existing above Picture Prototype Mobile Module to prevent 

civil aviation Experiment (SCVP): (FAST M2): cascading 

airspace. (SCOPE): Lightweight, Relocatable lab effects of power 

• PM from Leverage Global composite to test for surge on 

Innovation Observer JCTD. material with behavioral / electrical grids. 

• Funding: • PM from high-speed hull. physiological • PM from 

$18M over 2 Innovation • PM from cues of “hostile Innovation 

years • Funding: $4M 

over 2 years 

Innovation 

• Funding: 

$17M over 3 

years 

intent.” 

• PM from 

Innovation 

• Funding: 

$38M over 5 

years 

• Funding: 

$27M over 4 

years 

SENSIT: System SAFE Container Levee 

to identify (SAFECON): 90- Strengthening 

numerous liquids second container & Rapid Repair: 

in baggage. screening Rapidly stop 

• PM from device. breach in levee. 

Innovation • PM from • PM from 

• Funding: Innovation Innovation 

$7.8M over 4 • Funding: • Funding: 

years $23M over 4 

years 

$13.5M over 

4 years 

IED & VehicleBorne IED 

Defeat: Detect, 

prevent, mitigate 

& counter IEDs. 

• PM from 

Division 

• Funding: 

$22M over 5 

years 

Storm Surge 

Mitigation: Limit 

& mitigate storm 

surge. 

• PM from 

Innovation 

• Funding: $9M 

over 3 years 

Source: OIG derived from multiple sources 

The Science and Technology Directorate’s Processes for Selecting and Managing Research and Development Programs 

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Appendix C 

HIPS/HITS Program Details 

High Impact Technology Solutions (HITS): 

•	 Proof-of-concept answers within 1 to 3 years that could result in highpayoff technology breakthroughs 

•	 Considerable risk of failure, but offer the potential for significant gains 

in capability 

Explosives Chemical / 

Biological 

Command, 

Control, & 

Interoperability 

Borders & 

Maritime 

Security 

Human Factors Infrastructure & 

Geophysical 

None Real Time Bio 

Detect: DNA 

sequencing for 

high speed bio 

sensing. 

• PM from 

Division 

• Funding: 

$2M over 2 

years 

First NET: First 

responder 

reliable relay 

link. 

• PM from 

Innovation 

• Funding: 

$1.5M over 2 

years 

Cancelled 

06/08/07 

Tunnel 

Detection: 

Detect & confirm 

illegal 

underground 

border structures 

& activities. 

• PM from 

Innovation 

• Funding: 

$3M over 2 

years 

Document 

Validator: High 

proficiency 

scanner to 

identify 

fraudulent 

documents. 

• PM from 

Innovation 

• Funding: 

$1.5M over 2 

years 

Critical 

Infrastructure 

Change 

Detection: 

Monitor critical 

infrastructure. 

• PM from 

Research 

• Funding: 

$2M over 2 

years 

Cell All: Multi-Band Biometric Resilient 

Ubiquitous Radio: Detector: High Tunnel: Tunnel 

chemical / Interoperable & proficiency, protection / blast 

biological agent inexpensive small biometric mitigation. 

detector. hand-held scanner. • PM from 

• PM from radios. • PM from Research 

Innovation • PM from Innovation • Funding: 

• Funding: division • Funding: $2M $4.5M over 3 

$4M over 3 • Funding: over 2 years years 

years $6.275M 

over 1 year 

Source: OIG derived from multiple sources 

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Appendix D 

Major Contributors to this Report 

William McCarron, Chief Inspector 

Elizabeth Kingma, Senior Inspector 

Kirsten Murray, Inspector 

Jonathan Davis-Olo, Inspector 

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Additional Information and Copies 

To obtain additional copies of this report, call the Office of Inspector General 

(OIG) at (202) 254-4199, fax your request to (202) 254-4305, 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 noncriminal misconduct relative to department programs or 

operations: 

• Call our Hotline at 1-800-323-8603; 

• Fax the complaint directly to us at (202) 254-4292; 

• Email us at DHSOIGHOTLINE@dhs.gov; or 

•	 Write to us at: 

DHS Office of Inspector General/MAIL STOP 2600, Attention: 

Office of Investigations - Hotline, 245 Murray Drive, SW, Building 410, 

Washington, DC 20528. 

The OIG seeks to protect the identity of each writer and caller.