69–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 115–45 

REDUCING DHS ACQUISITION COST GROWTH ACT 

MARCH 20, 2017.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. MCCAUL, from the Committee on Homeland Security, 

submitted the following 

R E P O R T 

[To accompany H.R. 1294] 

The Committee on Homeland Security, to whom was referred the 

bill (H.R. 1294) to amend the Homeland Security Act of 2002 to 

provide for congressional notification regarding major acquisition 

program breaches, and for other purposes, having considered the 

same, report favorably thereon without amendment and recommend that the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 1 

Background and Need for Legislation .................................................................... 2 

Hearings ................................................................................................................... 2 

Committee Consideration ........................................................................................ 3 

Committee Votes ...................................................................................................... 3 

Committee Oversight Findings ............................................................................... 3 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 3 

Congressional Budget Office Estimate ................................................................... 3 

Statement of General Performance Goals and Objectives .................................... 3 

Duplicative Federal Programs ................................................................................ 4 

Congressional Earmarks, Limited Tax Benefits, and Limited Tariff Benefits ... 4 

Federal Mandates Statement ................................................................................. 4 

Preemption Clarification ......................................................................................... 4 

Disclosure of Directed Rule Makings ..................................................................... 4 

Advisory Committee Statement .............................................................................. 4 

Applicability to Legislative Branch ........................................................................ 4 

Section-by-Section Analysis of the Legislation ...................................................... 5 

Changes in Existing Law Made by the Bill, as Reported ..................................... 5 

PURPOSE AND SUMMARY

The purpose of H.R. 1294, the Reducing DHS Acquisition Cost 

Growth Act of 2017, is to amend the Homeland Security Act of 

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2002 to provide for congressional notification regarding major acquisition program breaches and for other purposes. 

H.R. 1294 requires that DHS’s major acquisition programs (those 

worth $300 million or more) be subject to greater Departmental 

and congressional oversight when they fail to meet (i.e. ‘‘breach’’) 

key cost, schedule, or performance requirements. 

BACKGROUND AND NEED FOR LEGISLATION

The Government Accountability Office (GAO) and the DHS Office 

of Inspector General (OIG) have consistently reported on the longstanding challenges DHS faces in managing its major acquisition 

programs, which cost the Department over $7 billion each year. 

Every 2 years, the GAO identifies areas in the Federal Government 

that are ‘‘high risk’’ due to their vulnerabilities to fraud, waste, 

abuse, and mismanagement. Since 2003, GAO has identified DHS’s 

transformation of 22 agencies into one department, and the Department’s subsequent challenges with its management functions, as 

high risk. In GAO’s 2017 high risk update, GAO noted that DHS 

has made progress in addressing its management challenges, but 

has not yet completed all the necessary actions to fully address acquisition management. Additionally, the OIG reports annually on 

major management challenges facing the Department. In November 2016, the OIG identified challenges in DHS’s management of 

acquisition programs. Although DHS has taken steps to improve 

acquisition management, DHS continues to struggle to ensure that 

major acquisition programs cost what was originally estimated, are 

delivered on schedule, and provide the capabilities originally intended. H.R. 1294 is intended to provide greater accountability to 

major acquisition programs and provides Congress with greater 

oversight of failing acquisition programs to prevent the waste of 

taxpayer dollars. 

HEARINGS

No hearings were specifically held on H.R. 1294. However, the 

Committee held oversight hearings on acquisition management, as 

listed below. 

On February 26, 2015, the Subcommittee on Oversight and Management Efficiency held a hearing entitled ‘‘Assessing DHS’s Performance: Watchdog Recommendations to Improve Homeland Security.’’ The Subcommittee received testimony from The Honorable 

John Roth, Inspector General, U.S. Department of Homeland Security; Ms. Rebecca Gambler, Director, Homeland Security and Justice, U.S. Government Accountability Office; and Dr. Daniel M. 

Gerstein, Senior Policy Researcher, The RAND Corporation. 

On April 22, 2015, the Subcommittee on Oversight and Management Efficiency held a hearing entitled ‘‘Acquisition Oversight: 

How Effectively is DHS Safeguarding Taxpayer Dollars?’’ The Subcommittee received testimony from Ms. Michele Mackin, Director, 

Acquisition and Sourcing Management, U.S. Government Accountability Office; The Honorable Chip Fulghum, Acting Deputy Undersecretary for Management and Chief Financial Officer, U.S. Department of Homeland Security; and Dr. Cedric Sims, Partner, 

Evermay Consulting Group. 

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On September 18, 2015, the Subcommittee on Oversight and 

Management Efficiency held a hearing entitled ‘‘Making DHS More 

Efficient: Industry Recommendations to Improve Homeland Security.’’ The Subcommittee received testimony from Mr. Marc Pearl, 

President and Chief Executive Officer, Homeland Security and Defense Business Council; Mr. Harry Totonis, Board Director, Business Executives for National Security; and Ms. Elaine Duke, Principal, Elaine Duke & Associates, LLC. 

On February 16, 2017, the Subcommittee on Oversight and Management Efficiency held a hearing entitled ‘‘Watchdog Recommendations: A Better Way Ahead to Manage the Department of 

Homeland Security.’’ The Subcommittee received testimony from 

The Honorable John Roth, Inspector General, U.S. Department of 

Homeland Security, and Ms. Rebecca Gambler, Director, Homeland 

Security and Justice, U.S. Government Accountability Office. 

COMMITTEE CONSIDERATION

The Committee met on March 8, 2017, to consider H.R. 1294, 

and ordered the measure to be reported to the House with a favorable recommendation, without amendment, by voice vote. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the recorded votes on the motion to report legislation and amendments thereto. 

No recorded votes were requested during consideration of 

H.R. 1294. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee has held oversight hearings and 

made findings that are reflected in this report. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that H.R. 1294, the 

Reducing DHS Acquisition Cost Growth Act, would result in no 

new or increased budget authority, entitlement authority, or tax 

expenditures or revenues. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, a cost estimate provided by the Congressional 

Budget Office pursuant to section 402 of the Congressional Budget 

Act of 1974 was not made available to the Committee in time for 

the filing of this report. The Chairman of the Committee shall 

cause such estimate to be printed in the Congressional Record upon 

its receipt by the Committee. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, H.R. 1294 contains the following general perVerDate Sep 11 2014 04:19 Mar 21, 2017 Jkt 069006 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\HR045.XXX HR045
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formance goals and objectives, including outcome related goals and 

objectives authorized. 

The purpose of H.R. 1294, the Reducing DHS Cost Growth Act 

of 2017, is to provide guidance to the Department of Homeland Security regarding acquisition management. 

DUPLICATIVE FEDERAL PROGRAMS

Pursuant to clause 3(c) of rule XIII, the Committee finds that 

H.R. 1294 does not contain any provision that establishes or reauthorizes a program known to be duplicative of another Federal program. 

CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND LIMITED

TARIFF BENEFITS

In compliance with rule XXI of the Rules of the House of Representatives, this bill, as reported, contains no congressional earmarks, limited tax benefits, or limited tariff benefits as defined in 

clause 9(e), 9(f), or 9(g) of the Rule XXI. 

FEDERAL MANDATES STATEMENT

An estimate of Federal mandates prepared by the Director of the 

Congressional Budget Office pursuant to section 423 of the Unfunded Mandates Reform Act was not made available to the Committee in time for the filing of this report. The Chairman of the 

Committee shall cause such estimate to be printed in the Congressional Record upon its receipt by the Committee. 

PREEMPTION CLARIFICATION

In compliance with section 423 of the Congressional Budget Act 

of 1974, requiring the report of any Committee on a bill or joint 

resolution to include a statement on the extent to which the bill or 

joint resolution is intended to preempt State, local, or Tribal law, 

the Committee finds that H.R. 1294 does not preempt any State, 

local, or Tribal law. 

DISCLOSURE OF DIRECTED RULE MAKINGS

The Committee estimates that H.R. 1294 would require no directed rule makings. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

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SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short Title. 

This section provides that this bill may be cited as the ‘‘Reducing 

DHS Acquisition Cost Growth Act’’. 

Sec. 2. Congressional Notification for Major Acquisition Programs. 

Section 2 amends subtitle D of the title VIII of the Homeland Security Act of 2002 (Pub. L. 107-296) and requires that DHS’s major 

acquisition programs (those worth $300 million or more) be subject 

to greater Departmental and congressional oversight when they fail 

to meet (i.e. ‘‘breach’’) key cost, schedule, or performance requirements. Specifically, when a major acquisition program breaches 

any of those key requirements, section 2 requires program managers to notify the officials responsible for overseeing those programs not later than thirty days after the breach has been identified. 

Section 2 also establishes requirements for egregious instances of 

major acquisition programs in breach of key requirements. In extreme cases (when a major acquisition program exceeds its cost requirements by more than 15 percent, delays its schedule by more 

than 180 days, or fails to meet any performance requirement), the 

Secretary and the DHS Office of Inspector General (OIG) must be 

notified. If this happens, section 2 requires the Secretary to notify 

the House and Senate Committees on Homeland Security of the 

breach in the next quarterly Comprehensive Acquisition Status Report (CASR). The Secretary must include a justification of a major 

acquisition program if it exceeds (1) costs by 20 percent more or (2) 

planned schedule dates by 12 months or more. 

Further, section 2 requires program managers to develop a plan 

when a breach occurs on how the breach will be remediated, which 

must, among other things, propose corrective actions for addressing 

the breach, as well as an analysis identifying potential root causes 

behind the breach. This plan must be submitted to the head of the 

relevant component, the Department’s Program Accountability and 

Risk Management (PARM) division, which is responsible for overseeing major acquisition programs, and the Under Secretary for 

Management (USM). 

Section 2 requires the USM to review the corrective actions and 

either approve the plan or provide alternative corrective actions for 

addressing the breach. The USM must submit to the House and 

Senate Committees on Homeland Security a copy of the remediation plan, root cause analysis, and a description of actions taken 

to address the breach. 

This section should provide greater accountability to major acquisition programs and provide Congress with greater oversight of 

failing acquisition programs to prevent the waste of taxpayer dollars. Section 2 also includes relevant definitions related to acquisition management. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italics 

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and existing law in which no change is proposed is shown in 

roman): 

HOMELAND SECURITY ACT OF 2002 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Homeland Security Act of 2002’’. 

(b) TABLE OF CONTENTS.—The table of contents for this Act is as 

follows: 

* * * * * * * 

TITLE VIII—COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR 

GENERAL; UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL 

PROVISIONS 

* * * * * * * 

Subtitle D—Acquisitions 

Sec. 831. Research and development projects. 

* * * * * * * 

Sec. 836. Congressional notification and other requirements for major acquisition 

program breach. 

* * * * * * * 

TITLE VIII—COORDINATION WITH NONFEDERAL ENTITIES; INSPECTOR GENERAL; UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS 

* * * * * * * 

Subtitle D—Acquisitions 

* * * * * * * 

SEC. 836. CONGRESSIONAL NOTIFICATION AND OTHER REQUIREMENTS FOR MAJOR ACQUISITION PROGRAM BREACH. 

(a) REQUIREMENTS WITHIN DEPARTMENT IN EVENT OF BREACH.— 

(1) NOTIFICATIONS.— 

(A) NOTIFICATION OF BREACH.—If a breach occurs in a 

major acquisition program, the program manager for such 

program shall notify the Component Acquisition Executive 

for such program, the head of the component concerned, the 

Executive Director of the Program Accountability and Risk 

Management division, the Under Secretary for Management, and the Deputy Secretary not later than 30 calendar 

days after such breach is identified. 

(B) NOTIFICATION TO SECRETARY.—If a breach occurs in 

a major acquisition program and such breach results in a 

cost overrun greater than 15 percent, a schedule delay 

greater than 180 days, or a failure to meet any of the performance thresholds from the cost, schedule, or performance 

parameters specified in the most recently approved acquisiVerDate Sep 11 2014 04:19 Mar 21, 2017 Jkt 069006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6603 E:\HR\OC\HR045.XXX HR045
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tion program baseline for such program, the Component 

Acquisition Executive for such program shall notify the Secretary and the Inspector General of the Department not 

later than five business days after the Component Acquisition Executive for such program, the head of the component 

concerned, the Executive Director of the Program Accountability and Risk Management Division, the Under Secretary for Management, and the Deputy Secretary are notified of the breach pursuant to subparagraph (A). 

(2) REMEDIATION PLAN AND ROOT CAUSE ANALYSIS.— (A) IN GENERAL.—If a breach occurs in a major acquisition program, the program manager for such program shall 

submit to the head of the component concerned, the Executive Director of the Program Accountability and Risk Management division, and the Under Secretary for Management in writing a remediation plan and root cause analysis 

relating to such breach and program. Such plan and analysis shall be submitted at a date established at the discretion of the Under Secretary for Management. 

(B) REMEDIATION PLAN.—The remediation plan required 

under this subparagraph (A) shall— 

(i) explain the circumstances of the breach at issue; 

(ii) provide prior cost estimating information; 

(iii) include a root cause analysis that determines the 

underlying cause or causes of shortcomings in cost, 

schedule, or performance of the major acquisition program with respect to which such breach has occurred, 

including the role, if any, of— 

(I) unrealistic performance expectations; 

(II) unrealistic baseline estimates for cost or 

schedule or changes in program requirements; 

(III) immature technologies or excessive manufacturing or integration risk; 

(IV) unanticipated design, engineering, manufacturing, or technology integration issues arising 

during program performance; 

(V) changes to the scope of such program; 

(VI) inadequate program funding or changes in 

planned out-year funding from one 5-year funding 

plan to the next 5-year funding plan as outlined in 

the Future Years Homeland Security Program required under section 874; 

(VII) legislative, legal, or regulatory changes; or 

(VIII) inadequate program man–age–ment personnel, including lack of sufficient number of staff, 

training, credentials, certifications, or use of best 

practices; 

(iv) propose corrective action to address cost growth, 

schedule delays, or performance issues; 

(v) explain the rationale for why a proposed corrective action is recommended; and 

(vi) in coordination with the Component Acquisition 

Executive for such program, discuss all options considered, including the estimated impact on cost, schedule, 

or performance of such program if no changes are 

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made to current requirements, the estimated cost of 

such program if requirements are modified, and the extent to which funding from other programs will need to 

be reduced to cover the cost growth of such program. 

(3) REVIEW OF CORRECTIVE ACTIONS.— (A) IN GENERAL.—The Under Secretary for Management 

shall review the remediation plan required under paragraph (2). The Under Secretary may approve such plan or 

provide an alternative proposed corrective action within 30 

days of the submission of such plan under such paragraph. 

(B) SUBMISSION TO CONGRESS.—Not later than 30 days 

after the review required under subparagraph (A) is completed, the Under Secretary for Management shall submit 

to the congressional homeland security committees the following: 

(i) A copy of the remediation plan and the root cause 

analysis required under paragraph (2). 

(ii) A statement describing the corrective action or actions that have occurred pursuant to paragraph 

(2)(b)(iv) for the major acquisition program at issue, 

with a justification for such action or actions. 

(b) REQUIREMENTS RELATING TO CONGRESSIONAL NOTIFICATION

IF BREACH OCCURS.— (1) NOTIFICATION TO CONGRESS.—If a notification to the Secretary is made under subsection (a)(1)(B) relating to a breach 

in a major acquisition program, the Under Secretary for Management shall notify the congressional homeland security committees of such breach in the next quarterly Comprehensive Acquisition Status Report, as required by title I of division D of 

the Consolidated Appropriations Act, 2016, (Public Law 114– 

113) following receipt by the Under Secretary of notification 

under such subsection. 

(2) SIGNIFICANT VARIANCES IN COSTS OR SCHEDULE.—If a 

likely cost overrun is greater than 20 percent or a likely delay 

is greater than 12 months from the costs and schedule specified 

in the acquisition program baseline for a major acquisition program, the Under Secretary for Management shall include in the 

notification required in paragraph (1) a written certification, 

with supporting explanation, that— 

(A) such program is essential to the accomplishment of 

the Department’s mission; 

(B) there are no alternatives to the capability or asset 

provided by such program that will provide equal or greater capability in both a more cost-effective and timely manner; 

(C) the new acquisition schedule and estimates for total 

acquisition cost are reasonable; and 

(D) the management structure for such program is adequate to manage and control cost, schedule, and performance. 

(c) DEFINITIONS.—In this section: 

(1) ACQUISITION.—The term ‘‘acquisition’’ has the meaning 

given such term in section 131 of title 41, United States Code. 

(2) ACQUISITION PROGRAM.—The term ‘‘acquisition program’’ 

means the process by which the Department acquires, with any 

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appropriated amounts, by contract for purchase or lease, property or services (including construction) that support the missions and goals of the Department. 

(3) ACQUISITION PROGRAM BASELINE.—The term ‘‘acquisition 

program baseline’’, with respect to an acquisition program, 

means a summary of the cost, schedule, and performance parameters, expressed in standard, measurable, quantitative 

terms, which must be met in order to accomplish the goals of 

such program. 

(4) BEST PRACTICES.—The term ‘‘best practices’’, with respect 

to acquisition, means a knowledge-based approach to capability 

development that includes— 

(A) identifying and validating needs; 

(B) assessing alternatives to select the most appropriate 

solution; 

(C) clearly establishing well-defined requirements; 

(D) developing realistic cost assessments and schedules; 

(E) securing stable funding that matches resources to requirements; 

(F) demonstrating technology, design, and manufacturing 

maturity; 

(G) using milestones and exit criteria or specific accomplishments that demonstrate progress; 

(H) adopting and executing standardized processes with 

known success across programs; 

(I) establishing an adequate workforce that is qualified 

and sufficient to perform necessary functions; and 

(J) integrating the capabilities described in subparagraphs (A) through (I) into the Department’s mission and 

business operations. 

(5) BREACH.—The term ‘‘breach’’, with respect to a major acquisition program, means a failure to meet any cost, schedule, 

or performance threshold specified in the most recently approved acquisition program baseline. 

(6) CONGRESSIONAL HOMELAND SECURITY COMMITTEES.—The 

term ‘‘congressional homeland security committees’’ means— 

(A) the Committee on Homeland Security of the House of 

Representatives and the Committee on Homeland Security 

and Governmental Affairs of the Senate; and 

(B) the Committee on Appropriations of the House of Representatives and of the Senate. 

(7) COMPONENT ACQUISITION EXECUTIVE.—The term ‘‘Component Acquisition Executive’’ means the senior acquisition official 

within a component who is designated in writing by the Under 

Secretary for Management, in consultation with the component 

head, with authority and responsibility for leading a process 

and staff to provide acquisition and program management oversight, policy, and guidance to ensure that statutory, regulatory, 

and higher level policy requirements are fulfilled, including 

compliance with Federal law, the Federal Acquisition Regulation, and Department acquisition management directives established by the Under Secretary for Management. 

(8) MAJOR ACQUISITION PROGRAM.—The term ‘‘major acquisition program’’ means a Department acquisition program that is 

estimated by the Secretary to require an eventual total expendiVerDate Sep 11 2014 04:19 Mar 21, 2017 Jkt 069006 PO 00000 Frm 00009 Fmt 6659 Sfmt 6603 E:\HR\OC\HR045.XXX HR045
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ture of at least $300,000,000 (based on fiscal year 2017 constant 

dollars) over its life cycle cost. 

* * * * * * * 

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