a

GAO

United States Government Accountability Office

Report to the Chairman, Committee on 

Government Reform, House of 

Representatives

July 2004 HOMELAND 

SECURITY

Transformation 

Strategy Needed to 

Address Challenges 

Facing the Federal 

Protective Service

GAO-04-537
www.gao.gov/cgi-bin/getrpt?GAO-04-537.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Mark L. 

Goldstein at (202) 512-2834 or 

goldsteinm@gao.gov. 

Highlights of GAO-04-537, a report to the 

Chairman, Committee on Government 

Reform, House of Representatives 

July 2004

HOMELAND SECURITY

Transformation Strategy Needed to 

Address Challenges Facing the Federal 

Protective Service 

FPS faces a number of significant challenges now that it has been transferred 

from GSA to DHS. These relate to its expanding mission and increased 

responsibility, unresolved issues about how it will be funded in the future, and 

the transfer of FPS mission-support functions to DHS. 

• Expanding mission and increased responsibility. FPS has responsibility 

for securing approximately 8,800 GSA government-occupied facilities and 

as a result of the transfer, plans to take on additional DHS facilities. FPS 

might also seek authority to protect other federal facilities. FPS’s mission 

has also expanded to include other homeland security functions, such as 

support for efforts to apprehend foreign nationals suspected of illegal 

activity. In light of these changes, however, FPS does not have a 

transformation strategy to address its expanding mission, as well as the 

other challenges it is facing. 

• Unresolved issues related to funding. As part of GSA, FPS was funded 

from security fees that were included with tenant agencies’ rent payments. 

It has not been decided if FPS will begin billing agencies. DHS believes 

that FPS lacks the authority to bill agencies for facility protection, but GSA 

disagrees with DHS. Also, GSA has historically covered a shortfall 

between the cost of security and security fees collected. In commenting 

on this report, DHS and GSA said that for fiscal year 2005 the President’s 

budget includes an increase in the FPS security rate that, if enacted, will 

eliminate the shortfall. Related to funding, we also found that FPS’s 

involvement in homeland security activities not directly related to facility 

protection is inconsistent with a requirement in the Homeland Security Act 

of 2002 that FPS funding from agency rents and fees be used solely for the 

protection of government buildings and grounds. 

• Transfer of mission-support functions to DHS. FPS still relies on GSA 

for mission-support functions, such as travel services, payroll, and 

contracting support. DHS plans to assume these functions by the end of 

fiscal year 2004. However, assuming these functions prematurely could 

affect FPS’s ability to accomplish its mission. For example, FPS relies 

heavily on contract guards and is dependent on GSA’s contracting 

management software to write contracts, track costs, and make vendor 

payments.

The Federal Protective Service Protects Thousands of Federal Facilities 

With responsibility for protecting 

thousands of federal facilities, the 

Federal Protective Service (FPS), 

which transferred from the General 

Services Administration (GSA) to 

the Department of Homeland 

Security (DHS) in March 2003, 

plays a critical role in the federal 

government’s defense against the 

threat of terrorism and other 

criminal activity. GAO was asked to 

determine what challenges, if any, 

FPS faces now that it has been 

transferred from GSA to DHS. 

We are recommending that DHS (1) 

direct FPS to develop a 

transformation strategy that 

addresses its significant challenges; 

(2) initiate a dialogue with GSA to 

resolve disagreement over billing 

issues; (3) take immediate steps to 

ensure that funds collected from 

agency rents and fees are used in 

the future solely for facility 

protection; and (4) ensure that DHS 

is prepared to integrate FPS 

mission-support functions before 

these functions are transferred, 

even if the target date has to be 

extended. DHS concurred with 

recommendations 1, 3, and 4. DHS 

and GSA continue to disagree on 

whether FPS has the authority to 

bill agencies for its services. As 

such, we added recommendation 2 

after receiving comments from DHS 

and GSA to encourage a resolution 

of this disagreement. 
Page i GAO-04-537 Federal Protective Service

Contents

Letter 1

Results in Brief 2

Background 3

Expanding Responsibilities Pose a Challenge for FPS 6

Issues Related to How FPS is Funded 12

Successfully Transferring FPS Mission-Support Functions to DHS 

Will Be Challenging 18

Considering Key Practices Could Help FPS Address Challenges and 

Achieve a Successful Transformation 22

Conclusions 27

Recommendations for Executive Action 28

Agency Comments and Our Evaluation 29

Appendixes

Appendix I: Scope and Methodology 36

Appendix II: Comments from the Department of Homeland Security 38

Appendix III: Comments from the General Services Administration 43

Appendix IV: GAO Legal Analysis of Issues Concerning FPS Activities Not 

Related to Facility Protection 54

Figures Figure 1: FPS’s Location within DHS’s Organizational Structure 5

Figure 2: FPS Officers Engaged in Biological and Chemical 

Weapons Response Training 9

Figure 3: FPS Officers Assisting with Crowd Control 11

Figure 4: Key Practices for Successful Mergers and Organizational 

Transformations 23
Contents

Page ii GAO-04-537 Federal Protective Service

Abbreviations

DHS U.S. Department of Homeland Security 

GSA U.S. General Services Administration

FPS Federal Protective Service 

BTS Border and Transportation Security

ICE Immigration and Customs Enforcement

PBS Public Building Service

INS Immigration and Naturalization Service 

FAMS Federal Air Marshal Service 

NIH National Institutes of Health 

OMB Office of Management and Budget

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Page 1 GAO-04-537 Federal Protective Service

United States Government Accountability Office

Washington, D.C. 20548

A

July 14, 2004 Letr

The Honorable Tom Davis

Chairman

Committee on Government Reform

House of Representatives

Dear Mr. Chairman:

Attention to the physical security of federal facilities has increased since 

the 1995 bombing of the Alfred P. Murrah Federal Building in Oklahoma 

City. The September 11, 2001, terrorist attacks further heightened this 

concern and led to the consolidation of 22 agencies into the Department of 

Homeland Security (DHS). This report responds to your request for 

information on the transfer of the Federal Protective Service (FPS) from 

the General Services Administration (GSA) to DHS, where FPS is now part 

of the Border and Transportation Security Directorate’s (BTS) component 

known as Immigration and Customs Enforcement (ICE). In creating DHS, 

the government’s efforts to prevent, protect against, and respond to 

potential terrorism were centralized. The establishment of a new federal 

department is an enormous undertaking that, in the case of DHS, comes 

with significant risk, which is why we designated the implementation and 

transformation of DHS as a high-risk area in January 2003. In addition, we 

also designated federal real property as a high-risk area affecting several 

agencies, due in part to the major challenge of protecting federal real 

property from terrorism. 

Our objective was to determine what challenges, if any, FPS faces now that 

it has been transferred from GSA to DHS. To do this work, we collected and 

analyzed agency documents about the transfer. This included policies and 

procedures, information about the organizational structure, and 

information on other issues related to the transfer, such as funding. We 

assessed the reliability of the data we used and found that they were 

sufficiently reliable for the purposes of this report. We also interviewed 

DHS, FPS, and GSA officials responsible for, and directly affected by, the 

transfer. More information on our scope and methodology appears in 

appendix I. We conducted our work in Washington, D.C., between 

September 2003 and May 2004 in accordance with generally accepted 

government auditing standards.
Page 2 GAO-04-537 Federal Protective Service

Results in Brief FPS faces a number of significant challenges now that it has been 

transferred from GSA to DHS. These relate to its expanding mission and 

increased responsibility, unresolved issues about how it will be funded in 

the future, and the transfer of FPS mission-support functions to DHS. 

• FPS has responsibility for securing approximately 8,800 GSA owned or 

occupied federal facilities and plans to take on responsibility for, 

according to FPS, approximately 2,500 additional DHS facilities. FPS 

officials also discussed the possibility of expanding FPS’s 

responsibilities to include protection for facilities where GSA had 

previously delegated authority to tenant agencies—FPS identified 20 

agencies with delegated authority, including the Departments of 

Defense, Interior, and State. DHS has also expanded FPS’s mission to 

include other functions related to homeland security, such as providing 

backup to other DHS law enforcement units in the field in efforts to 

apprehend foreign nationals suspected of illegal activity and assisting 

with crowd control at major protests. Despite these changes and the 

major transformation FPS is facing, FPS does not have an overall 

strategy for how it will carry out its expanding mission, as well as meet 

other challenges it faces. For this reason, we are recommending that 

FPS develop such a strategy for its own transformation. In commenting 

on this report, DHS concurred with our recommendation to develop a 

transformation strategy for FPS. DHS said that it was developing a 

strategic plan for FPS that would address our recommendation. 

Although this plan was not issued when we finalized this report, it is 

important to note that a transformation strategy goes beyond what is 

typically contained in a strategic plan. Specifically, a transformation 

strategy would include overall goals for the transformation with specific 

action plans and milestones that would allow FPS to track critical 

phases and essential activities. 

• In addition to these formidable mission-related challenges, there are 

unresolved issues related to funding FPS’s operations. When FPS was 

part of GSA, tenant agencies’ rental payments included security fees that 

GSA used to fund FPS operations. Now that FPS is part of DHS, 

determining the appropriate funding approach for FPS has centered on 

whether GSA will continue to bill agencies for FPS’s services, which 

DHS supports, or whether FPS should take on this function, as GSA 

would prefer. Comments from DHS and GSA showed continued 

disagreement on this issue. As such, we have added a recommendation 

to DHS aimed at resolving the disagreement. Also, GSA has historically 
Page 3 GAO-04-537 Federal Protective Service

covered a gap that has existed between the cost of protection provided 

by FPS and the security fees collected from tenant agencies—GSA said 

that this gap was $139 million in fiscal year 2003. In commenting on this 

report, DHS and GSA also noted that, for fiscal year 2005, the President’s 

budget includes an increase in the FPS security rate that, if enacted, will 

eliminate the shortfall between FPS collections and the cost of security. 

Also related to funding, we found that FPS’s involvement in homeland 

security activities not directly related to facility protection is 

inconsistent with a requirement in the Homeland Security Act of 2002 

that FPS funding from agency rents and fees be used solely for the 

protection of government buildings and grounds. DHS said that FPS’s 

involvement in activities not directly related to facility protection did 

not affect its primary mission. However, this is still a concern because of 

the specific legal requirement that agency rents and fees be used solely 

for facility protection. We are recommending that the Secretary of 

Homeland Security take immediate steps to ensure that funds collected 

from agency rents and fees are used in the future solely for the 

protection of government buildings and grounds. DHS concurred with 

this recommendation but had concerns about our interpretation of the 

statute, which are discussed in more detail in the report.

• Another challenge facing FPS is its reliance on GSA for mission-support 

functions such as payroll, travel reimbursement, and contracting 

support. DHS and GSA did not meet an original goal to transfer these 

functions by the end of fiscal year 2003. According to DHS, FPS, and 

GSA officials, the delay was caused by issues related to how DHS 

systems would be integrated, DHS’s focus on integrating larger 

departmental components, and difficulties extracting FPS activities 

from GSA systems. DHS officials said that they intend to have FPS fully 

integrated by the end of fiscal year 2004. However, assuming these 

functions prematurely could affect FPS’s ability to accomplish its 

mission. For example, FPS relies heavily on contract guard services, but 

according to DHS officials, is dependent on GSA’s contracting 

management software for tracking costs and managing vendor 

payments. As such, we are recommending that the Secretary of 

Homeland Security ensure that DHS is prepared to effectively integrate 

FPS mission support before these functions are transferred from GSA. 

DHS concurred with this recommendation. 

Background FPS was established in 1971 as the uniformed protection force of GSA 

government-occupied facilities. FPS has authority, among other things, to 
Page 4 GAO-04-537 Federal Protective Service

enforce laws and regulations aimed at protecting federal property and 

persons on such property, and to conduct investigations on, federal 

property.1

 FPS was originally located within GSA’s Public Building Service 

(PBS). As part of PBS, FPS was responsible for providing law enforcement 

and security services to GSA’s tenants and the public at about 8,800 federal 

buildings nationwide. As of September 30, 2003, FPS data show that FPS 

had approximately 1,100 uniformed officer full-time equivalents (FTE)2

 and 

13,000 contract guards to protect GSA-owned or -occupied facilities. In 

addition, these data showed that FPS had 353 management and missionsupport FTE. In addition to managing security at GSA-held facilities, FPS 

officers also provide other security services such as developing risk 

assessments, installing security equipment, and conducting criminal 

investigations. 

In response to the 1995 bombing of the Alfred P. Murrah Federal Building in 

Oklahoma City, FPS began enhancing its strategy for protecting federal 

facilities and making additional security improvements at GSA facilities. 

FPS officials said that FPS also began relying more on the use of contract 

guards to provide security and law enforcement protection at its facilities. 

FPS currently employs approximately 13,000 contract guards. The level of 

physical protection services FPS provides at each building varies. In some 

cases, FPS has delegated the protection of facilities to tenant agencies, 

which may have uniformed officers of their own or may contract separately 

for guard services. 

The September 11 terrorist attacks resulted in a renewed emphasis on 

protecting federal facilities and the nation against terrorist activities. The 

attacks prompted Congress to pass the Homeland Security Act, which 

created the Department of Homeland Security (DHS). The new 

department’s mission, among other things, is to prevent terrorist attacks 

within the United States, reduce the vulnerability of the United States to 

terrorism, and minimize the damage and assist in the recovery from attacks 

that do occur. The act combined 22 federal agencies specializing in various 

disciplines, such as law enforcement, border security, biological research, 

computer security, and disaster mitigation. As a result of the creation of 

1

40 U.S.C.A. § 1315.

2

Civilian employment in the executive branch is measured on the basis of full-time 

equivalents (FTE). One FTE is equal to one work year or 2,080 nonovertime hours. For 

example, one full-time employee counts as one FTE, and two half-time employees also 

count as one FTE.
Page 5 GAO-04-537 Federal Protective Service

DHS, FPS was moved from GSA to the new department, effective March 1, 

2003. Within DHS, FPS became part of the Border and Transportation 

Security Directorate’s (BTS) component known as Immigration and 

Customs Enforcement (ICE). BTS is tasked with securing the nation’s 

borders and safeguarding its transportation infrastructure. ICE is the 

investigative and law enforcement arm of BTS and is composed primarily 

of the investigative components that were formerly part of the U.S. 

Customs Service (Customs) and the Immigration and Naturalization 

Service (INS). ICE also includes FPS, the Federal Air Marshal Service 

(FAMS), and a number of other offices. Figure 1 shows FPS’s location 

within DHS’s organizational structure. 

Figure 1: FPS’s Location within DHS’s Organizational Structure

The transfer of FPS is only one of a number of organizational transfers and 

related changes that DHS is managing. While DHS faces the challenge of 

protecting the nation from terrorism, it is also tasked with combining a 

disparate group of agencies with multiple missions and unique cultures. 

Recognizing that the establishment of a new department is an enormous 

undertaking, GAO designated the implementation and transformation of 

Under Secretary of 

Emergency 

Preparedness and 

Response

Secretary

Under Secretary of 

Science and 

Technology

Under Secretary of 

Information Analysis 

and Infrastructure 

Protection

Under Secretary of 

Border and 

Transportation 

Security

Under Secretary of 

Management

Transportation 

Security 

Administration

Federal Air 

Marshal 

Service

Air and Marine 

Operations

Office of 

Investigations

Federal Protective 

Service

Office of 

Intelligence

Detention and 

Removal 

Operations

Immigration and 

Customs 

Enforcement

Customs and Border 

Protection

U.S. Department of Homeland Security

Source: FPS.
Page 6 GAO-04-537 Federal Protective Service

DHS as high-risk in January 2003. This designation is based on three 

factors: (1) the size and complexity of the undertaking, (2) the merging 

agencies have an array of existing management challenges, and (3) failure 

by DHS has potentially serious consequences.3

 In January 2003, GAO also 

designated federal real property as a high-risk area in part because of the 

major challenges agencies face in protecting federal real property from 

terrorism.4

Expanding 

Responsibilities Pose a 

Challenge for FPS 

Under the Homeland Security Act, DHS became responsible for protecting 

buildings, grounds, and property owned, occupied, or secured by the 

federal government that are under GSA’s jurisdiction.5

 In addition to GSA 

facilities, the act also provides FPS with the authority to protect the 

buildings, grounds, and property of other agencies whose functions were 

transferred to DHS.6

 This effectively meant that FPS, which was merged 

into DHS, would continue its role as the security and protection force for 

GSA real property assets as well as DHS properties not held by GSA, and 

would be performing this function as part of DHS.7

 A March 2003 

operational memorandum of agreement between GSA and DHS made FPS 

responsible for the same types of security services for GSA facilities that 

FPS provided before the move to DHS. These include performing risk 

assessments, managing the installation of security equipment, and 

conducting criminal investigations. With regard to non-GSA properties, this 

amounts to approximately 2,500 properties that were held by DHS 

components and were not part of the GSA real property inventory, 

according to the FPS chief of staff. This official said that in fiscal year 2005, 

FPS would collect information, determine the risk categories, and identify 

existing law enforcement and protective measures at each DHS facility. 

3

U.S. General Accounting Office, High-Risk Series: An Update, GAO-03-119 (Washington, 

D.C.: January 2003).

4

See GAO-03-119 and U.S. General Accounting Office, High-Risk Series: Federal Real 

Property, GAO-03-122 (Washington, D.C.: January 2003).

5

40 U.S.C.A. § 1315 and 6 U.S.C.A. § 203.

6

40 U.S.C.A. § 1315.

7

In technical comments on this report, the U.S. Secret Service said that FPS plans to take on 

responsibility for protecting DHS facilities not otherwise protected by the U.S. Secret 

Service in connection with its protective responsibilities under 18 U.S.C. § 3056, or 

otherwise under the control of the U.S. Secret Service.
Page 7 GAO-04-537 Federal Protective Service

FPS plans to use this information to develop a strategy that lays out how 

FPS can take over responsibility for security at the 2,500 additional DHS 

properties. FPS’s chief of staff told us that it might take a number of years 

before FPS fully assumes control of security at these facilities. 

The Director of FPS said that eventually FPS might seek to expand its 

responsibilities to include protection for facilities where GSA had 

previously delegated authority to tenant agencies, as well as other facilities 

where agencies have protective forces with missions similar to that of FPS. 

The Director of FPS stressed that expanding FPS’s authority further is a 

long-term vision and that FPS is still examining the feasibility of different 

options. FPS provided information identifying 20 agencies where GSA had 

previously delegated some of its authority for facility protection or contract 

guard services. This included various facilities occupied by the 

Departments of Defense, Agriculture, Commerce, Health and Human 

Services, Interior, Justice, Labor, State, and Transportation. The Director of 

FPS said that, in addition, a number of agencies have their own security 

forces and that it does not make sense for the federal government to have 

multiple security forces, all charged with facility protection. An example 

FPS provided was the National Institutes of Health (NIH), which has a 

small police force charged with protecting NIH’s Bethesda, Maryland, 

campus. FPS officials added that the Homeland Security Act, in their view, 

provides FPS with the authority for extending FPS’s protection 

responsibilities because it provides the Secretary of Homeland Security 

with broad authority in implementing actions deemed necessary to protect 

against terrorism.8

 In commenting on a draft of this report, DHS said that 

we took the comments of the Director out of context. DHS also had 

concerns with our summary and synthesis of the relevant statutory 

requirements FPS has that are related to FPS’s responsibility for protecting 

federal buildings, grounds, and property. DHS’s comments and our 

evaluation of them are discussed in more detail in the agency comments 

section of this report.

FPS Has New Law 

Enforcement Authority and 

Assists with Other DHS 

Activities

In addition to increased responsibility in terms of the number of buildings 

under its control, the Homeland Security Act gave FPS new law 

enforcement authority for use in carrying out its facility protection mission. 

This new law enforcement authority empowers officers and special agents 

8

6 U.S.C.A. § 111.
Page 8 GAO-04-537 Federal Protective Service

to take action off of federal property to protect the property and the 

public.9

 It also allows officers to enter into agreements with state and local 

law enforcement personnel to carry out activities that promote homeland 

security. Previously, FPS officers were not authorized to enforce laws off of 

federal property and, for example, would have to contact local law 

enforcement personnel to handle illegal activity on the street in front of 

federal buildings, if it were to occur. FPS officials said that the new 

authority would better allow them to protect facilities and become more 

involved in intergovernmental activities aimed at promoting homeland 

security, such as biological and chemical weapons response training (see 

fig. 2). 

9

40 U.S.C.A. § 1315.
Page 9 GAO-04-537 Federal Protective Service

Figure 2: FPS Officers Engaged in Biological and Chemical Weapons Response 

Training

DHS has also broadened FPS’s responsibilities to include assisting with 

homeland security activities that are not directly related to facility 

Source: FPS.
Page 10 GAO-04-537 Federal Protective Service

protection. For example, FPS officials said that FPS officers have provided 

backup for other DHS law enforcement officers in immigration-related 

work, such as “Operation Predator,” a program aimed at arresting foreign 

nationals involved in child pornography. In addition, FPS officials said that 

FPS officers assisted with various DHS activities—such as crowd control at 

the free trade protests in Miami, Florida, and protection for major national 

events such as the Olympics. At the time of our review, FPS’s Web site also 

listed other activities, including support for security at the Kentucky Derby, 

which did not relate directly to federal facility protection. We also noted 

instances where the press reported on FPS participation in other activities, 

such as involvement in sobriety checks and safety patrols in San Francisco, 

California. FPS officials said that participation in these activities was 

intended to enhance FPS’s integration into DHS and that FPS’s 

participation in these types of activities will likely continue. FPS’s 

involvement in these activities, and, more specifically, issues related to how 

they are funded, will be discussed in more detail later in this report and in 

appendix IV. Figure 3 shows FPS officers assisting with crowd control at a 

protest.
Page 11 GAO-04-537 Federal Protective Service

Figure 3: FPS Officers Assisting with Crowd Control

FPS’s expanding mission and increased responsibility represent a 

formidable change for the agency. Transferring to a new federal department 

is a significant undertaking for any organization. Yet FPS—like several 

other DHS components—is transferring to DHS while simultaneously 

focusing on new issues that reflect fundamental changes since September 

11 in how the government approaches homeland security issues. In our 

report designating the establishment of DHS as a high-risk area, we 

Source: FPS.
Page 12 GAO-04-537 Federal Protective Service

emphasized that the magnitude of the responsibilities, combined with the 

challenge and complexity of the transformation, underscores the 

perseverance and dedication that will be required of all DHS’s leaders, 

employees, and stakeholders in order to achieve success.10 The Director of 

FPS agreed with our assessment that the mission-related changes FPS is 

facing represent a formidable challenge. However, our work showed that 

FPS does not have a strategy for how it will carry out its expanding mission 

and increased responsibility, as well as meet the other challenges it is 

facing. FPS’s need for such a transformation strategy, as well as its belief 

that it is embracing these changes as an opportunity for a positive 

transformation, are discussed in more detail later in this report.

Issues Related to How 

FPS is Funded 

Maintaining a means of funding FPS that will ensure the adequate 

protection of federal facilities and allow FPS to meet new homeland 

security responsibilities is another challenge. When it was part of GSA, FPS 

was funded through security fees that were included with the rent 

payments GSA received from tenant agencies. In March 2003, just after 

FPS’s transfer, GSA and DHS agreed that for fiscal year 2004, GSA would 

continue to collect security fees on behalf of FPS and transfer these funds 

to DHS. DHS’s fiscal year 2004 appropriations act identifies about $424 

million to be transferred from the revenue and collections in the federal 

buildings fund11 to DHS for FPS operations. According to FPS officials, the 

security fees GSA collects are intended to cover security standards 

designated for each building. These standards cover perimeter, entry, and 

10GAO-03-119.

11Established by Congress in 1972 and administered by GSA, the federal buildings fund is a 

revolving fund in the U.S. Treasury into which federal agency rent and certain other moneys 

are deposited. Moneys deposited into the fund are available, subject to congressional 

appropriation, for GSA’s real property management and related activities.
Page 13 GAO-04-537 Federal Protective Service

interior security and security planning matters.12 Under this process, GSA 

would bill agencies for security services on a prorated, square-foot basis,

depending on the amount of space each agency occupied. 13 In addition to 

these security services, FPS also provides agencies with additional 

services, upon request, under its reimbursable program. For example, 

agencies may request additional magnetometers or more advanced 

perimeter surveillance capabilities. For fiscal year 2004, FPS’s 

reimbursable program will provide an estimated $337 million in funding for 

these requests, according to FPS’s chief of staff. 

The President’s fiscal year 2005 budget, released in February 2004, 

proposes that security fee collections be credited to the FPS account in the 

Department of the Treasury and identifies $478 million in funding for FPS. 

GSA and FPS officials said that for fiscal year 2005, an approach is under 

consideration whereby GSA would send tenant agencies separate bills for 

security and rent. Instead of collecting security fees with agency rental 

payments, tenant agencies would send the security fees directly to the FPS 

account at Treasury. Under this approach, these officials said that these 

funds would not pass through the federal buildings fund. In addition, 

estimates in the President’s 2005 budget for the reimbursable program 

remained at $337 million, unchanged from fiscal year 2004. In its written 

response to several funding questions we posed to FPS officials, DHS said 

12The Department of Justice’s June 1995 report, Vulnerability Assessment of Federal 

Facilities, designated security levels I through V into which federal buildings were 

classified. Fifty-two minimum standards were established, with level I having 18 minimum 

standards and level V having 39 minimum standards. Examples of minimum standards 

include lighting with emergency power backup for all buildings (perimeter security), 

intrusion detection systems for building levels III through V (entry security), visitor control 

systems for building levels II through V (interior security), and standard armed and unarmed 

guard qualifications/training requirements in all buildings (security planning). FPS uses 

periodic risk assessments to validate the current security standards and countermeasures in 

place at each facility as well as determine additional security enhancements based on 

identified threats. 

13GSA security fees consisted of two separate components: basic and building-specific 

service fees. Basic security fees cover security services provided by FPS to all GSA tenants 

and include such services as patrol and response, security surveys, alarm monitoring, 

salaries, and other common cost items. This fee is included in each rent bill on a cost-persquare-foot basis. Building-specific security fees are for security measures specific to a 

particular building based on its designated security level. For example, a level IV building 

may have more guards, magnetometers, and cameras than a level I building. Buildingspecific fees are also charged to GSA tenants based on the square feet they occupy in the 

building. In technical comments on this report, the U.S. Secret Service pointed out that 

some agencies occupying commercial space do not receive services from FPS, but are 

required to pay for FPS benefits at a basic charge per square foot.
Page 14 GAO-04-537 Federal Protective Service

that FPS was exploring potential future funding strategies that would 

better support the expanded mission and revised law enforcement 

responsibilities associated with the transfer to DHS. Although no decisions 

have been made regarding how FPS will be funded in the future, DHS, FPS, 

and GSA officials indicated that discussions to date have centered on 

whether GSA would continue its practice of billing agencies for security 

services or whether this should be done by FPS. In DHS’s written response 

on funding issues, DHS took the position that billing individual agencies for 

the security services FPS provides for GSA buildings was GSA’s 

responsibility. 

Specifically, 

• DHS said that the billing process and equitable distribution of security 

costs among the occupants of federal buildings is inherently a real 

estate function. As such, distributing security costs is similar to 

distributing utility costs, operation and maintenance costs of major 

building mechanical systems, and other shared costs. For federal 

buildings in GSA’s inventory, DHS said that this responsibility is 

specifically reserved for GSA. 

• DHS said that the Homeland Security Act made it clear that GSA would 

continue to be responsible for all real estate-related functions, such as 

collecting rents and fees, including fees collected for protective 

services.14

• DHS said that the transfer of FPS to DHS makes it clear that the primary 

mission of FPS is to protect buildings and grounds owned or occupied 

by the federal government and the persons on the property.15 According 

to DHS, FPS does not have the mission or authority to establish a 

separate, duplicative billing and collection process, similar to the one 

presently established and operated in support of the GSA real estate 

mission. 

DHS added that one possible approach would entail FPS providing GSA 

with the estimated total costs for its basic law enforcement and protective 

services. Under this approach, which amounts to FPS billing GSA in one 

146 U.S.C.A. § 232.

15Pub.L. 107-296, Section 1706(b)(1).
Page 15 GAO-04-537 Federal Protective Service

lump sum for its services, GSA would then determine the best method for 

distributing these costs equitably among the tenant agencies. FPS would 

also provide separate cost estimates for the additional costs that are 

associated with specific buildings, and GSA would determine the 

appropriate distribution of these costs among the tenants occupying the 

building. GSA officials we interviewed had a markedly different view from 

that of DHS on whether GSA or FPS should bill agencies for security 

services in the future. According to the Deputy Commissioner of the Public 

Buildings Service and a GSA budget official, GSA does not want to be 

involved in billing agencies for FPS security services. These officials said 

that GSA feels very strongly about this because GSA no longer has control 

over setting security rates and the level of security required at each 

building. 

In addition, in commenting on a draft of this report, GSA provided a legal 

analysis that disagreed with DHS’s position that FPS lacks authority to bill 

agencies for security services. GSA said that it considers incorrect any 

implication that GSA is responsible for billing and collecting fees owed to 

DHS for FPS-furnished services and that FPS does not have the authority to 

bill for such services. GSA’s complete legal analysis is included in 

appendix III. GSA continued that as a matter of government efficiency, and 

in the interest of avoiding unnecessary duplicative systems, GSA could 

agree to continue to use its systems to produce and distribute a bill on 

behalf of FPS. GSA added that while it is authorized to provide its billing 

services to FPS on a reimbursable basis, this does not mean that DHS’s 

billing responsibilities for FPS-provided services belong to GSA. We did not 

determine whether DHS or GSA was correct in its legal analysis of issues 

related to billing. However, because of the differing views of DHS and GSA, 

it would be useful for DHS and GSA to engage in further dialogue so that 

agreement can be reached. It would be appropriate, in our view, for DHS to 

initiate these discussions, since FPS is now part of DHS. If, after further 

discussion, DHS and GSA still disagree on issues related to authority for 

billing, it would be worthwhile to seek resolution from the Office of 

Management and Budget (OMB) or the Treasury. 

Although issues related to authority for billing agencies were unresolved, 

we had the following observations related to various options: having GSA 

continue to bill for security fees makes FPS dependent on GSA to 

implement a funding mechanism for its operations; in addition to limiting 

FPS’s control over this process, this could also make it unclear which 

agency is accountable to tenant agencies and other stakeholders. On the 

other hand, much work would likely be needed for FPS to develop the 
Page 16 GAO-04-537 Federal Protective Service

expertise, information, and systems for interfacing with GSA and tenant 

agencies if FPS were to take over the billing function. For example, on the 

basis of our discussions with GSA and FPS officials, FPS would need to 

cover the costs of, and develop a method for, collecting up-to-date data on 

buildings in the GSA inventory and agency space assignments. FPS would 

also need a financial management function for billing and collections, or 

DHS would have to integrate such a process into its financial management 

systems.

Regarding DHS’s suggestion that a possible approach might entail FPS 

providing a total estimated cost to GSA, it would be critical for FPS to 

develop and provide reliable data and GSA would need assurance that FPS 

was doing so. Providing reliable data would be a challenge for FPS 

because, as will be discussed in more detail later, DHS faces challenges 

related to integrating its component agencies’ mission support systems and 

producing reliable management information. Nonetheless, DHS 

emphasized in its discussion on funding issues that FPS is working to 

establish the appropriate level of law enforcement and protective services 

required and is developing a plan for phasing these requirements and their 

related costs into subsequent budget years. DHS said that this process 

would utilize historical costs, workload, benchmarks, and best practices 

collected from federal, state, and local agencies that perform similar 

functions. 

As FPS moves forward, accurately identifying costs would also be 

important because of shortfalls GSA has experienced between collections 

and the cost of providing security. According to FPS’s director of financial 

management and a GSA budget official familiar with FPS funding issues, 

the security fees GSA charges tenant agencies historically have not been 

sufficient to cover FPS operations. To address the past shortfalls, GSA has 

covered the additional costs with other funds from the federal buildings 

fund. For example, according to a GSA budget official, security fees in 

fiscal year 2003 generated about $139 million less than it cost to fund the 

basic services that FPS provides to tenant agencies. According to these 

GSA and FPS officials, the shortfalls have been caused over the years by 

increasing security costs and restrictions on tenant agencies’ rental 

payments that were enacted in legislation. In commenting on this report, 

DHS and GSA also noted that for fiscal year 2005 the President’s budget 

includes an increase in the FPS security rate that, if enacted, will eliminate 

the shortfall between FPS collections and the cost of security. Nonetheless, 

even if this increase helps close the gap between the cost of security and 

tenant payments, the accurate identification of costs still represents a 
Page 17 GAO-04-537 Federal Protective Service

challenge that may need to be addressed if the mechanism for funding FPS 

were restructured.

Funding for Some FPS 

Activities Not Directly 

Related to Facility 

Protection

DHS has broadened FPS’s responsibilities to include assisting with 

homeland security activities that are not directly related to building 

protection. FPS officials said that these activities have primarily included 

providing backup to other DHS law enforcement units in the field and that 

DHS has the authority under the Homeland Security Act to engage FPS in 

activities DHS deems necessary to enhance homeland security. However, 

engaging FPS in these activities under its current funding structure is 

inconsistent with a provision of the act that provides that funds transferred 

by GSA to DHS from rents and fees collected by GSA are to be used solely 

for the protection of federal buildings and grounds.16 FPS officials said that 

GSA-transferred funds have been FPS’s only source of funding for the 

security services it provides and that the reimbursable funds it receives 

from agencies are tied to specific agency requirements. It is our position 

that DHS’s use of FPS staff time and other resources for activities that are 

not directly related to the protection of federal buildings and grounds is 

inconsistent with the act, which limits the use of agency funds from rents 

and fees to the protection of buildings and grounds owned or occupied by 

the federal government.

In November 2003, we requested that DHS provide information on the 

extent of FPS’s involvement in activities not related to building protection, 

the legal basis for any such activities, and the reasons these activities 

would be permissible in light of the act’s prohibition on the use of funds 

transferred from GSA to DHS. In a written response from DHS’s Under 

Secretary for Border and Transportation Security, DHS stated that it did not 

keep detailed records of these activities. DHS said that FPS’s involvement 

in these activities was minor, or de minimus, and that FPS only performed 

an assist role. DHS added that the support FPS provided did not affect the 

accomplishment of FPS’s mission and that its participation in operations 

away from federal facilities was minimal. DHS indicated in its response 

that these activities were permissible because they had no impact on FPS 

operations and because no special equipment was procured for these 

activities. 

166 U.S.C.A. § 232.
Page 18 GAO-04-537 Federal Protective Service

We understand that FPS’s involvement in these activities was, in DHS’s 

view, minor and may not have had a direct effect on facility protection. We 

also understand, as DHS pointed out, that FPS’s involvement in such 

activities can strengthen interoperability and bonding between FPS and 

other DHS law enforcement units. However, the funding of FPS’s 

involvement in these activities is a concern because of the specific 

statutory language contained in the Homeland Security Act related to the 

use of funds collected from agency rents and fees. At a minimum, if DHS 

plans to continue and perhaps increase FPS’s involvement in these 

activities, having a means of reimbursing FPS, or funding these activities 

separately, would be consistent with the requirement that funds from 

agency rents and fees intended for facility protection are used for that 

purpose. Also, funding these activities separately would make it necessary 

for DHS to track them and develop a way to account for their costs. Having 

such a process would, as a result, allow for greater accountability with 

regard to the deployment of FPS resources. In its written response to 

questions we had during our review on funding issues, DHS said that FPS 

has an established process for recouping expenses of a reimbursable 

nature. DHS acknowledged that this process could also be used—within 

DHS—to recoup the cost of non-facility-protection-related activities 

currently being performed by FPS.

In commenting on this report, DHS again expressed its view that such 

activities would not have to be reimbursed if they are of limited duration 

with local offices, ad hoc, and do not increase the direct costs of FPS 

operations and investment in staff. DHS said it proposes to issue guidance 

to this effect. We continue to disagree with DHS on this issue and believe 

that the proposed guidance would not be appropriate. The agency 

comments section of this report and appendix IV contain a complete 

discussion of our position. 

Successfully 

Transferring FPS 

Mission-Support 

Functions to DHS Will 

Be Challenging

In addition to challenges associated with expanding responsibilities and 

establishing a funding mechanism, FPS still was relying on GSA for many of 

its mission-support functions. As part of GSA, FPS was not self-sufficient 

with respect to mission-support functions, including payroll, travel 

services, and contracting. These functions were performed for FPS by 

mission-support staff located in other GSA organizational units. For 

example, its contracting functions—which are integral to FPS’s mission 

because of FPS’s extensive use of contract guards—were handled by the 

contracting component of GSA’s Public Buildings Service. Furthermore, 

FPS employees used GSA’s centralized, integrated administrative system, 
Page 19 GAO-04-537 Federal Protective Service

known as FedDesk, to perform many day-to-day functions such as time and 

attendance and travel requests and reimbursement. According to FPS 

officials, FPS’s reliance on staff and systems outside of its organization was 

different from other, larger agencies that moved to DHS and had internal 

mission-support functions and systems that were transferred to DHS with 

the organizations. 

Recognizing that FPS faced a challenge, DHS and GSA signed a missionsupport memorandum of agreement in February 2003 so that GSA could 

continue to support FPS after the transfer. Under this agreement, GSA 

would provide FPS with reimbursable mission support for human 

resources, payroll, information technology, and some contracting functions 

until these functions were transferred to DHS. FPS officials said that funds 

used to reimburse GSA for these services were to come out of agency rents 

and fees originally transferred from GSA. DHS and GSA set a goal of the 

end of fiscal year 2003 for this transfer. However, GSA and DHS were 

unable to meet this goal and opted to extend the agreement until the end of 

fiscal year 2004. According to DHS, GSA, and FPS officials that we 

interviewed, the transfer of mission support did not occur for the following 

reasons:

• DHS was still in the process of determining which mission support 

systems it would adopt from agencies and organizations that had 

transferred into DHS and how the various systems would be integrated;

• DHS management was focusing its efforts on the transfer of larger 

agencies, such as INS and Customs, and DHS believed that since FPS 

was being supported by GSA, DHS could focus on agencies that were 

larger and were a greater priority; and

• FPS activities were deeply integrated into GSA’s mission-support 

systems. For example, FPS’s e-mail, telecommunications, travel, time 

and attendance, and human resource systems are all part of GSA’s 

FedDesk system, and extracting them individually for use by DHS would 

be difficult. 

DHS officials said that they intend to have FPS mission support fully 

integrated before the end of fiscal year 2004. Specifically, at the time of our 

review, DHS intended to transfer FPS’s information technology support by 

June 2004 and the remaining administrative systems—human resources, 

travel, payroll, and contracting support—by September 2004. We did not 

assess the effect that FPS’s reliance on GSA for mission support had on 
Page 20 GAO-04-537 Federal Protective Service

FPS’s effectiveness in protecting facilities. In commenting on this report’s 

discussion of contracting, DHS stated that the contracting function does 

not pose a challenge because it has already transferred from GSA to DHS. 

According to DHS, FPS has a senior contracting specialist at headquarters 

who oversees policies and standards for the contract guard program. DHS 

added that 24 contracting officers are currently managing FPS contracts 

throughout FPS’s 11 regions. Nonetheless, we still believe that the 

contracting area poses a challenge because of FPS’s continued reliance on 

GSA to support this function. More specifically, although FPS has 

contracting staff on line, GSA and FPS officials told us that FPS has 

continued to use GSA’s contracting management software to write 

contracts, track costs, and make vendor payments. Contracting support, at 

the time of our review, had not been integrated into DHS’s systems. The 

January 2004 mission-support memorandum of agreement between GSA 

and DHS specifies that FPS will pay GSA about $544,000 for these services 

for fiscal year 2004. Because contracting support is critical to FPS’s ability 

to accomplish its mission due to its reliance on contract guards, a smooth 

transfer of these functions will be imperative. 

During our review, we also found other difficulties that FPS had 

encountered related to mission support. FPS officials said that their lack of 

in-house mission support resulted in instances where law enforcement 

officers had to assume administrative duties. For example, according to 

these officials, law enforcement personnel played a large role in resolving 

problems FPS was having in October 2003 with government purchase cards 

that were issued by DHS. These cards, FPS officials explained, were not 

compatible with GSA’s financial systems because the DHS cards were from 

a different financial institution. FPS officials acknowledged that having law 

enforcement officers perform these types of functions could divert 

resources from protecting facilities and participating in other homeland 

security activities. Furthermore, these officials said that there has been 

confusion about whether FPS should adhere to GSA or DHS administrative 

policies and procedures, as well as where they should go for assistance or 

to get approval for administrative issues. For example, a senior FPS official 

said that in October 2003, 7 months after the transfer, DHS and GSA had not 

resolved which agency would approve restored annual leave for officers 

who were required to be on duty because of emergencies. In commenting 

on this report, GSA said that the January 2004 memorandum of agreement 

between GSA and DHS had resolved many of the issues related to 

administrative policies and procedures. Also, DHS said in its comments 

that related to travel, ICE has implemented an electronic travel system to 

move to a more efficient travel authorization and vouchering process.
Page 21 GAO-04-537 Federal Protective Service

Clearly, FPS faces a major challenge integrating its mission-support 

activities with DHS. In fact, FPS’s situation is symptomatic of the broader 

mission support and information system challenges DHS is facing as a new 

federal department. In our January 2003 Performance and Accountability 

Series report on DHS, we reported that DHS faces considerable challenges 

in integrating the many systems and processes that provide management 

with decision information.17 We encouraged DHS to identify its needs in 

order to build effective systems that can support the national homeland 

security strategy in the future. Furthermore, DHS would be faced with the 

challenge of integrating the contracting functions of its many constituent 

programs and missions, some of which have had past deficiencies. For 

example, in May 2002, we reported that for its import processing system, 

Customs lacked important acquisition management controls.18 In July 2003, 

we reported that INS did not have the basic infrastructure—including 

oversight, information, and an acquisition workforce—in place to ensure 

that its contracting activity is effective.19 Customs and INS concurred with 

our findings and agreed to take action. These concerns about contracting 

issues have implications for FPS given that it relies heavily on contracting, 

through its contract guard program, to accomplish its mission. Overall, 

given the concerns about DHS’s ability to integrate FPS mission-support 

activities, FPS’s ability to accomplish its mission could be affected if these 

functions were to be transferred prematurely. Therefore, it is important for 

DHS to ensure that it can effectively integrate these functions before they 

are transferred from GSA, even if it is necessary to extend the September 

2004 target date.

17U.S. General Accounting Office, Major Management Challenges and Program Risks: 

Department of Homeland Security, GAO-03-102 (Washington, D.C.: January 2003).

18U.S. General Accounting Office, Customs Service Modernization: Management 

Improvements Needed on High-Risk Automated Commercial Environment Project, GAO02-545 (Washington, D.C.: May 13, 2002).

19U.S. General Accounting Office, Contract Management: INS Contracting Weaknesses 

Need Attention from the Department of Homeland Security, GAO-03-799

(Washington, D.C.: July 25, 2003).
Page 22 GAO-04-537 Federal Protective Service

Considering Key 

Practices Could Help 

FPS Address 

Challenges and 

Achieve a Successful 

Transformation

Despite the challenges it faces, FPS’s transfer to DHS presents an 

opportunity for a positive transformation. According to FPS officials, the 

transfer has given FPS the opportunity to reevaluate its mission and assess 

whether it is sufficiently organized and equipped to meet its new and 

broader roles. FPS’s top management team has embraced the new role in 

homeland security and is eager to become fully integrated with a law 

enforcement agency. These officials added that they have begun to rethink 

FPS’s approaches and priorities so that FPS can better protect federal 

facilities, the employees who occupy them, and the visiting public. Fully 

implementing the transfer into DHS and completing the type of 

transformation FPS envisions will be critical to FPS’s long-term viability 

and success. Yet, given the challenges we identified, carrying out this 

transformation will be no easy task. To better ensure a successful 

transformation, FPS and its stakeholders could benefit from considering 

the experiences of other organizations that have undergone successful 

mergers and transformations. GAO’s July 2003 report on implementation steps 

to assist mergers and transformations identified key practices followed by public 

and private sector organizations that have led to success.20 These key practices 

are shown in figure 4 and are briefly described below. A more 

comprehensive discussion of these practices and related implementation 

steps can be found in our July 2003 report. 

20U.S. General Accounting Office, Results-Oriented Cultures: Implementation Steps to 

Assist Mergers and Organizational Transformations, GAO-03-669 (Washington, D.C.:

July 2, 2003).
Page 23 GAO-04-537 Federal Protective Service

Figure 4: Key Practices for Successful Mergers and Organizational Transformations

• Ensure top leadership drives the transformation—Because a merger 

or transformation entails fundamental and often-radical change, strong 

and inspirational leadership is indispensable. Top leadership must set 

the direction, pace, and tone and provide a clear, consistent rationale 

that brings everyone together behind a single mission. 

• Establish a coherent mission and integrated strategic goals to guide 

the transformation—The mission and strategic goals of a transformed 

organization must become the focus of the transformation, define the 

culture, and serve as the vehicle for employees to unite and rally around. 

Mission clarity is especially essential to define the purpose of the 

transition to employees, customers, and stakeholders. The strategic 

goals must align with and support the mission and serve as continuing 

guideposts for agency decision making. 

• Focus on a key set of principles and priorities at the outset of the 

transformation—A clear set of principles and priorities serves as a 

framework to help the organization create a new culture and drive 

employee behaviors. Focusing on these principles and priorities helps 

Ensure top 

leadership 

drives the 

transformation

Establish a 

coherent 

mission and 

integrated 

strategic goals 

to guide the 

transformation

Focus on a key 

set of principles 

and priorities at 

the outset of 

the 

transformation

Set 

implementation 

goals and a 

timeline to build 

momentum and 

show progress 

from day one

Dedicate an 

implementation 

team to 

manage the 

transformation 

process

Use the 

performance 

management 

system to 

define 

responsibility 

and ensure 

accountability 

for change

Establish a 

communication 

strategy to 

create shared 

expectations 

and report 

related progress

Build a worldclass 

organization

Involve 

employees to 

obtain their 

ideas and gain 

their ownership 

for the 

transformation

Sources: GAO (presentation); Photos: Photo Disc, Dynamic Graphics, EyeWire, and Ingram Publishing.

SUCCESSFUL TRANSFORMATION
Page 24 GAO-04-537 Federal Protective Service

the organization focus on performing mission-related activities while 

maintaining its drive toward achieving the goals of the transformation. 

• Set implementation goals and a timeline to build momentum and 

show progress—A merger or transformation is a substantial 

commitment that could take years to complete and therefore must be 

carefully monitored. As a result, it is essential to establish long-term 

action-oriented implementation goals and a timeline with milestones to 

track the organization’s progress toward its short- and long-term 

transformation goals. 

• Dedicate an implementation team to manage the transformation 

process—Dedicating a strong and stable implementation or integration 

team that will be responsible for the transformation’s day-to-day 

management is important to ensuring that the transformation receives 

the focused, full-time attention needed to be sustained and successful. 

Specifically, the implementation team is important to ensuring that 

various change initiatives are sequenced and implemented in a coherent 

and integrated way. Top leadership must give the team the necessary 

authority and resources to set priorities, make timely decisions, and 

move quickly to implement top leadership’s decisions regarding the 

transformation. 

• Use a performance management system to define responsibility and 

ensure accountability for change—An organization’s performance 

management system is a vital tool for aligning the organization with 

desired results and showing how team, unit, and individual performance 

contribute to overall organizational results. Performance management 

systems can help manage and direct the transformation process. These 

systems are the basis for setting employee’s expectations in the 

transformation process and evaluating individual contributions to the 

success of the transformation process and organizational results. 

• Establish a communication strategy to create shared expectations and 

report related progress—Creating an effective internal and external 

communication strategy is essential to implementing a merger or 

transformation. Communication is most effective when it occurs early 

and often and when it is downward, upward, and lateral. Organizations 

have found that communicating information early and often helps to 

build trust among employees and stakeholders, as well as an 

understanding of the purpose of planned changes. Organizations must 

develop a comprehensive communication strategy that reaches out to 
Page 25 GAO-04-537 Federal Protective Service

employees, customers, and stakeholders and seeks to engage them in 

the transformation process. 

• Involve employees to obtain their ideas and gain their ownership for 

the transformation—A successful merger and transformation must 

involve employees and their representatives from the beginning to gain 

their ownership of the changes that are occurring in the organization. 

Employee involvement strengthens the transformation process by 

including frontline perspectives and experiences. Further, employee 

involvement helps to create the opportunity to establish new networks, 

increase employees’ understanding and acceptance of organizational 

goals and objectives, and gain ownership of new policies and 

procedures. 

• Build a world-class organization—Successful organizations 

continually seek to implement best practices in processes and systems 

in areas such as information technology, financial management, 

acquisition management, and human capital.

We did not do an in-depth analysis comparing these practices with FPS’s 

transformation efforts. Nonetheless, FPS officials, including its Director, 

agreed that it would be useful for FPS to consider following these 

practices. FPS provided examples where it believed its efforts reflected 

these practices. These related to areas such as FPS’s heavy involvement on 

departmentwide teams dedicated to integrating DHS’s components, 

participating in the development of a strategic plan for DHS, and improving 

its core competencies in, for example, law enforcement training, so that it 

is better prepared to fulfill its expanding mission and responsibilities. 

However, we noted other critical areas reflected in the key practices where 

greater attention could, in our view, enhance FPS’s chances of making a 

successful transformation. For example, although FPS has provided input 

to DHS’s strategic plan,21 which was released in February 2004, FPS has not 

developed a transformation strategy of its own that reflects key practices. 

Such a strategy could contain implementation goals, measures, and a 

timeline that FPS could use to show progress toward its transformation. In 

addition to containing goals and measures related to progress with its 

transformation, FPS could use such a plan as a platform for demonstrating 

its effectiveness with its mission to protect federal facilities and 

21U.S. Department of Homeland Security, Securing our Homeland: U.S. Department of 

Homeland Security Strategic Plan (Washington, D.C.: February 2004).
Page 26 GAO-04-537 Federal Protective Service

performance in other homeland security activities. It could also 

demonstrate how FPS’s transformation links with the broader goals and 

objectives that are contained in DHS’s strategic plan that relate to facility 

protection and FPS’s other homeland security activities. To be more 

effective, it could also be linked to DHS’s ongoing integration efforts. 

Incorporating key practices into FPS’s ongoing transformation efforts 

could be particularly helpful given the significant challenges FPS is facing. 

These challenges—FPS’s expanding mission and increased responsibility, 

unresolved issues related to funding, and the transfer of mission support 

from GSA to DHS—will complicate FPS’s transformation efforts until they 

are addressed or, at a minimum, factored into FPS’s transformation 

planning efforts. 

In commenting on a draft of this report, DHS said that in March 2004 FPS 

began developing its own strategic plan, which DHS said would support the 

overall goals and objectives of the DHS strategic plan and would be 

consistent with GAO’s key practices for organizational mergers and 

transformations. At the time this report was finalized, FPS’s strategic plan 

had not been issued. However, it is important to note that a transformation 

strategy would contain information beyond what would be found in a 

typical strategic plan. The agency comments section of this report further 

discusses transformation strategies and what they contain.

Our past work has discussed adopting similar practices for DHS. 

Recognizing that the establishment of a new department is an enormous 

undertaking, we designated the implementation and transformation of DHS 

as high-risk in our January 2003 Performance and Accountability and High 

Risk series.22 We reported that in addition to the high risk associated with 

developing a new department from a multitude of agencies, DHS is 

confronted with a number of existing major management challenges from 

the functions and organizations being transferred to it. We encouraged DHS 

to implement some of the key practices to assist mergers and 

organizational transformations discussed earlier, including clearly defining 

the mission and goals of the new department, devoting sustained efforts to 

transition planning, and involving employees in the transformation process. 

We also recommended adopting similar practices at DHS components such 

as the U.S. Coast Guard and FAMS. In our work looking at the transition of 

the Coast Guard to DHS, we reported that the Coast Guard was 

22GAO-03-119.
Page 27 GAO-04-537 Federal Protective Service

experiencing numerous implementation challenges as it transitioned to 

DHS.23 These challenges include developing a new strategic plan that 

reflects the Coast Guard’s wide variety of missions, establishing effective 

communication links and partnerships within DHS and with external 

organizations, and establishing performance management systems that 

incorporate the Coast Guard’s new homeland security mission. We 

suggested that the Coast Guard could also benefit from implementing the 

key practices for mergers and transformations. Lastly, we reported that 

FAMS is facing challenges in implementing changes resulting from its 

merger into DHS, including issues related to roles and responsibilities, 

training, and coordination with external organizations such as 

Transportation Security Administration.24 We recommended the 

implementation of some of the key practices to help FAMS with such 

changes. DHS, FAMS, and the Coast Guard concurred with our 

recommendations. For example, in commenting on the recommendations 

for FAMS, DHS said that it welcomed our proposals for using key practices 

that would ultimately maximize FAMS’s ability to protect the American 

people, contribute to the protection of the nation’s critical infrastructure, 

and preserve the viability of the aviation industry.

Conclusions With its critical role in protecting federal real property against the threat of 

terrorism and other criminal activity, it is imperative that FPS’s transfer to 

DHS and its related transformation are successful. However, in addition to 

the inherent challenges any organization would face in becoming part of a 

new federal department, FPS brings a set of unique challenges that have 

great bearing on its ability to accomplish its mission. Given the significance 

of the challenges it is facing—an expanding mission and increased 

responsibility; unresolved issues related to funding, including past 

shortfalls that were covered by GSA; and various mission-support issues—

FPS could benefit from a transformation strategy that effectively makes the 

case for what type of organization it believes it should become and 

provides a road map for getting there. Consideration of key practices that 

23U.S. General Accounting Office, Homeland Security: Challenges Facing the Coast Guard 

as it Transitions to the New Department, GAO-03-467T (Washington, D.C.: Feb. 12, 2003).

24U.S. General Accounting Office, Aviation Security: Federal Air Marshal Service Is 

Addressing Challenges of Its Expanding Mission and Workforce, but Additional Actions 

Needed, GAO-04-242 (Washington, D.C.: Nov. 19, 2003).
Page 28 GAO-04-537 Federal Protective Service

others have focused on to successfully transform their organizations could 

be an important part of such a strategy. 

Related to funding, it would be appropriate for DHS to initiate a dialogue 

with GSA aimed at resolving the disagreement concerning FPS’s authority 

to bill agencies for security services. Regarding FPS’s involvement in 

homeland security activities not related to facility protection, such 

involvement is a concern because of the requirement in the Homeland 

Security Act that agency rents and fees be used solely for the protection of 

federal buildings and grounds. At a minimum, if DHS plans to continue and 

perhaps increase FPS’s involvement in these activities, having a means of 

reimbursing FPS, or funding these activities separately, would be 

consistent with the requirement that funds from agency rents and fees 

intended for facility protection are used for that purpose. Also, funding 

these activities separately would make it necessary for DHS to track them 

and develop a way to account for their costs. Finally, ensuring a seamless 

transfer of mission-support functions from GSA to DHS is critical. Given 

the concerns about DHS’s ability to integrate FPS mission-support 

activities, prematurely transferring these functions to DHS could negatively 

affect FPS’s ability to carry out its mission responsibilities.

Recommendations for 

Executive Action 

We are making four recommendations to the Secretary of Homeland 

Security. First, we recommend that the Secretary direct the Director of 

FPS—in consultation with the Under Secretary for Border and 

Transportation Security and the Assistant Secretary for Immigration and 

Customs Enforcement—to develop and implement a transformation 

strategy that reflects FPS’s consideration of key practices and addresses 

the significant challenges it is facing. In particular, this strategy should 

identify implementation goals, measures, and a timeline that FPS could use 

to show progress toward its transformation and demonstrate that it is 

accomplishing its mission while undergoing changes. It should also link 

FPS’s goals and measures to the broader goals and objectives contained in 

DHS’s strategic plan and to DHS’s ongoing integration efforts. In serving as 

a road map for FPS’s transformation, such a strategy should be used by FPS 

as a platform to identify strategies and proposals for addressing the 

significant challenges that we identified—expanding mission and increased 

responsibility, unresolved issues related to funding, and mission-support 

challenges related to the eventual transfer of these functions from GSA to 

DHS. Second, we recommend that the Secretary initiate a dialogue with 

GSA aimed at resolving disagreement between DHS and GSA about 

whether FPS has the authority to bill GSA’s tenant agencies for security 
Page 29 GAO-04-537 Federal Protective Service

services. If this issue cannot be resolved, DHS should seek resolution from 

OMB or the Treasury. Third, we recommend that the Secretary take 

immediate steps to ensure that funds collected from agency rents and fees 

are used in the future solely for the protection of buildings and grounds 

owned or occupied by the federal government. If FPS continues its 

involvement in activities not directly related to facility protection, a 

funding process would be needed that is consistent with the requirement 

regarding the use of funds from agency rents and fees. In addition, a means 

of tracking these activities and determining related costs would also be 

needed. Last, we recommend that the Secretary ensure that DHS is 

prepared to effectively integrate FPS mission-support functions before 

these functions are transferred from GSA, even if it is necessary to extend 

the September 2004 goal for the transfer.

Agency Comments and 

Our Evaluation 

We provided a draft of this report to DHS and GSA for their official review 

and comment. DHS provided its comments in a letter from the Director of 

Resources, Border and Transportation Security Directorate, on May 3, 

2004. These comments can be found in appendix II. As noted in DHS’s 

letter, DHS also provided separate technical comments, which we did not 

publish but incorporated where appropriate. The U.S. Secret Service also 

provided some technical comments, which we incorporated where 

appropriate. GSA provided its comments in a letter from the Deputy 

Commissioner of the Public Building Service on April 29, 2004. In 

commenting on this report, GSA also provided a legal analysis regarding 

the authority to charge and collect FPS security fees. GSA’s position was 

discussed earlier in this report, and its comments and legal analysis can be 

found in appendix III. GSA and DHS comments on the historical gap 

between security fees and costs were also discussed earlier in this report.

DHS concurred with our recommendations to develop a transformation 

strategy, to ensure that agency rents and fees are used solely for facility 

protection, and to ensure that DHS can effectively integrate FPS missionsupport functions before these functions are transferred from GSA. On the 

basis of the comments we received from DHS and GSA showing their 

continued disagreement on billing issues, we added the recommendation 

aimed at resolving this disagreement. As a result, DHS did not comment on 

this additional recommendation because it was added after the comment 

period. Although DHS generally agreed with the report’s message and 

concurred with the other recommendations, it took issue with certain 

aspects of our analysis. DHS’s comments on the challenges FPS faces in the 

contracting area were discussed earlier. In addition, DHS had comments on 
Page 30 GAO-04-537 Federal Protective Service

several other aspects of the report, which are discussed below. These 

related to the FPS Director’s discussion of delegations of authority for 

facility protection, the extent of FPS’s authority to protect federal facilities, 

the components of FPS security fees, funding for activities not related to 

facility protection, and FPS’s need for a transformation strategy.

FPS Director’s Comments on Delegation of Authority for Facility 

Protection—DHS said that we took certain comments made by the Director 

of FPS out of context. DHS was referring to discussions we had with the 

Director about expanding FPS’s authority to include protection of facilities 

where GSA had previously delegated authority to tenant agencies. DHS 

said that the Director was referring to efforts by the House Committee on 

Transportation and Infrastructure, Subcommittee on Economic 

Development, Public Buildings and Emergency Management, to suspend 

further delegations of any authority for facility protection to GSA tenant 

agencies. While the subject of delegation was discussed with the Director, 

we disagree with DHS’s assessment that we took the Director’s comments 

out of context. The discussions dealt specifically with existing delegations 

and FPS’s desire to expand its responsibilities by “getting back” authority 

for protection where it had previously been delegated by GSA. 

Furthermore, the Director’s comments were not the only instance where 

the issue of expanding FPS’s authority was raised. On four other occasions 

during our review, top FPS officials, including the chief of staff, made it 

clear to us that FPS may seek to expand its authority. This was also 

discussed by an ICE official. And, because these issues dealt with possible 

future plans, we included the Director’s caveat, in the report, that 

expanding FPS’s authority is a long-term vision and that FPS is still 

examining the feasibility of different options. GSA commented that it had 

no objections to our interpretation of the Homeland Security Act and 

agreed that FPS’s authority to protect federal property includes properties 

under the custody and control of GSA, as well as those under the custody 

and control of DHS. GSA also said that while FPS’s law enforcement 

authority expanded under the Homeland Security Act, it defers to DHS on 

the extent of FPS’s authority to protect other federal properties and 

personnel.

Extent of FPS’s Authority for Facility Protection—DHS commented that 

our description of its responsibility for protecting buildings, grounds, and 

property suggests limitations that are not present in the law. In this regard, 

for example, DHS takes issue with our statement that under the Homeland 

Security Act DHS is responsible for protecting building, grounds, and 

property “that are under GSA’s jurisdiction.” DHS states that “the Homeland 
Page 31 GAO-04-537 Federal Protective Service

Security Act does not mention property controlled by [GSA].” In making 

this statement—as well as others cited by DHS—the report summarizes 

and synthesizes the relevant statutory requirements, rather than quoting 

them verbatim. Thus, while it is true that the particular provision vesting 

DHS with protective responsibilities does not mention GSA-controlled 

property, DHS clearly acquired responsibility for GSA-controlled property 

under the Homeland Security Act because FPS, which was responsible for 

protecting federal agencies and previously under GSA’s jurisdiction, was 

among those agencies whose functions and personnel were transferred to 

DHS under the Homeland Security Act. Nonetheless, on the basis of DHS’s 

comments, we have made technical clarifications to our descriptions of the 

law, where appropriate.

In addition to raising technical issues, DHS makes several statements that, 

although not entirely clear, could be read as suggesting that DHS might be 

taking a broader view of its authority relating to the protection of federal 

buildings and grounds than our analysis of the statute would support. The 

relevant statutory provision is 40 U.S.C. 1315(a), as amended by section 

1706(b)(1) of the Homeland Security Act, which provides that: “To the 

extent provided for by transfers made pursuant to the Homeland Security 

Act of 2002, the Secretary of Homeland Security...shall protect the 

buildings, grounds, and property that are owned, occupied, or secured by 

the Federal Government (including any agency, instrumentality, or wholly 

owned or mixed-ownership corporation thereof) and the persons on the 

property” [emphasis added]. DHS states that the description of the facilities 

under DHS control in the latter part of the statute is “all inclusive” and that 

the “intent of the law is far more inclusive than GSA property and property 

transferred as part of the establishment of DHS, none of which are 

instrumentalities nor mixed ownership corporations.” To the extent that 

DHS is maintaining that its authority extends beyond property under the 

control and custody of GSA and DHS, we disagree with its interpretation. 

The statute provides DHS with authority over buildings and property only 

to “the extent provided by transfers made pursuant to the Homeland 

Security Act,” and thus DHS authority is limited to properties under the 

control of GSA (through the transfer of FPS to DHS) and any other agency 

whose functions were transferred to DHS under the act.

Security Fees—DHS said that it believes that our explanation for how FPS 

is funded requires clarification because the report did not distinguish 

between the two components of FPS security fees. According to DHS, FPS 

was traditionally funded through rent portions devoted to recovering 

security costs collected by GSA for space occupied by GSA tenants. These 
Page 32 GAO-04-537 Federal Protective Service

“security fees” consisted of two separate components. The basic security 

charge covered security services provided by FPS to all GSA tenants and 

includes such services as patrol and response, security surveys, alarm 

monitoring, salaries, and other common cost items. This fee was charged to 

all GSA tenants and was included in each tenant’s rent bill as a part of the 

rate per square foot. The building-specific security charge is for security 

measures specific to a particular building based on the designated security 

level that were specified by the Department of Justice in June 1995 in 

response to the Oklahoma City bombing. For example, a Level IV building 

may have more guards, magnetometers, and cameras than a Level I 

building. The charges for building-specific security services are allocated 

by GSA to tenants based on the number of square feet they occupy in the 

building. DHS commented that our draft report did not clarify that security 

fees for specific agencies vary depending upon the building and its unique 

security requirements. DHS also noted that FPS uses a reimbursable 

program to charge for security services that are in excess of what FPS 

determines is sufficient for a building or could not be deferred for inclusion 

in the next rent estimate cycle. DHS said that understanding how FPS 

security fees are charged is important in understanding the issues 

associated with how FPS security fees should be billed in the future. 

Finally, DHS added that understanding the elements of the security fee 

process is essential to understanding why DHS and GSA disagree as to how 

security fees should be billed in the future. On the basis of DHS’s 

comments, we clarified the information in the report related to the 

different components of security fees.

Funding for Activities Not Related to Facility Protection—Although DHS 

concurred with our recommendation to ensure that funds collected from 

agency rents and fees are used solely for facility protection, DHS again 

expressed its view that such activities would not have to be reimbursed if 

they are of limited duration with local offices, ad hoc, and do not increase 

the direct costs of FPS operations and investment in staff. DHS said it 

proposes to issue guidance to this effect. DHS cited Comptroller General 

legal decisions as a rationale for this position. DHS also said that some 

activities that do not appear to relate to facility protection actually do 

because of the proximity of nearby federal buildings. For example, DHS 

said that FPS’s involvement in the free trade protests in Miami was critical 

to protecting the facilities of agencies that were the focal point of the 

demonstration. We recognize that there may be situations, such as the 

Miami protests, where FPS may engage in activities that are necessary or 

incidental to protecting federal buildings. Furthermore, DHS said that FPS 

headquarters reviews and approves all FPS regional special operation plans 
Page 33 GAO-04-537 Federal Protective Service

and expenditures to ensure the appropriate use of funds. DHS also stated 

that in response to our report, ICE would develop guidance for determining 

when it is reasonable for FPS to provide security services that are not 

directly related to the protection of federal buildings and grounds. 

We do not believe that the development of such guidance would be 

appropriate. The language in section 422(b)(2) of the Homeland Security 

Act of 2002 explicitly restricts the use of funds collected by GSA from its 

tenants out of rents and fees “solely” for the protection of government 

buildings and grounds.25 Because of this limitation in the statute, the use of 

these funds for any purpose other than the protection of government 

buildings and grounds would not be permitted absent reimbursement 

pursuant to other applicable statutory authority. DHS refers to two GAO 

decisions as supporting its proposal to issue guidance approving the use of 

funds for unrelated purposes if such activities “are of limited duration with 

local offices, ad hoc, and do not increase the direct costs of FPS operations 

and investment in staff.”26 We do not agree that these two decisions support 

guidance sanctioning the de minimis use of FPS funds for explicitly 

prohibited purposes. The two decisions, in allowing nonreimbursable 

details in certain circumstances, adopted guidance in the Federal 

Personnel Manual, which has been rescinded and is no longer effective. 

Moreover, to the extent that the two decisions are read by DHS as setting a 

de minimis standard of general applicability, they are not in keeping with 

the governing law on the de minimis concept. The legal concept of de 

minimis typically goes to measure the amount associated with a legal 

violation, allowing trivial or inconsequential amounts to be overlooked, on 

a case-by-case basis. The concept has not been applied to, nor would the 

case law support, the prospective approval of activities across an 

organization like FPS, knowing that they constitute violations of law. 

Accordingly, we would object to DHS establishing guidance for prospective 

situations that would sanction FPS’s use of funds for de minimis

expenditures that are not incidental or necessary to the protection of 

federal buildings and grounds. Our full legal analysis of this issue is 

contained in appendix IV.

25Public Law 107-296, 116 Stat. 2135, 2184-2185 (2002).

26The two cited decisions are 64 Comp. Gen. 370 (1985) and 65 Comp. Gen. 635 (1986).
Page 34 GAO-04-537 Federal Protective Service

The Need For a Transformation Strategy—DHS concurred with our 

recommendation that FPS develop a transformation strategy because of its 

expanding mission and responsibilities, as well as the other challenges it is 

facing. DHS said that in March 2004, FPS began developing its own 

strategic plan, which DHS said would support the overall goals and 

objectives of the DHS strategic plan and would be consistent with GAO’s 

key practices for organizational mergers and transformations. At the time 

of our review, FPS’s strategic plan had not been issued. Although a strategic 

plan is an important part of FPS’s transformation, a transformation strategy 

would contain information beyond what would be found in a typical 

strategic plan. More specifically, a transformation strategy would provide a 

connection between long-term strategic goals in its strategic plan and the 

day-to-day activities of managers and employees engaged in achieving 

integration of FPS into DHS.27 Such a transformation strategy would 

include overall goals of the transformation with specific action plans and 

milestones that would allow it to track transformation and integration 

goals identifying critical phases and essential activities that need to be 

completed by and on any given date.28 By demonstrating progress towards 

reaching these interim goals, FPS can build momentum and demonstrate 

that real progress is being made toward full integration into DHS. 

In developing its transformation strategy, it is important that FPS also 

consider all the key practices we have identified for effective mergers and 

transformations. This would include incorporating a communications 

approach that reaches out to employees, customers, and stakeholders and 

seeks to genuinely engage them in the transformation process, as well 

involving them in various aspects of the transformation to help gain 

ownership of the transformation. For example, in our July 2003 report on 

mergers and organizational transformations, we stated that according to a 

JPMorgan Chase managing director, the chief executive officer and merger 

implementation team publicized and reported progress on specific goals 

for each phase of its merger to help rally employees and maintain their 

drive towards reaching full integration. These goals were connected to 

overall themes and particular milestones, and the JPMorgan Chase chief 

executive officer reinforced these goals at leadership meetings and 

27For example, see U.S. General Accounting Office, Architect of the Capitol: Management 

and Accountability Framework Needed for Organizational Transformation, GAO-03-231

(Washington, D.C.: Jan. 17, 2003).

28GAO-03-669.
Page 35 GAO-04-537 Federal Protective Service

employee townhalls and in Web-based messages and other 

communications. 

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution of it until 30 days from 

the date of this report. We will then send copies to other interested 

congressional committees, the Secretary of Homeland Security, DHS’s 

Under Secretary for Border and Transportation Security, DHS’s Assistant 

Secretary for Immigration and Customs Enforcement, the Administrator of 

GSA, and the Director of OMB. Copies will also be available to other 

interested parties on request. In addition, the report will be available at no 

charge on the GAO Web site at http://www.gao.gov.

If you have any questions regarding this report, please contact me on (202) 

512-2834 or at goldsteinm@gao.gov, or David Sausville, Assistant Director, 

on (202) 512-5403 or at sausvilled@gao.gov. Other contributors to this 

report were Kelly Blado, Casey Brown, Matt Cail, Anne Izod, and Susan 

Michal-Smith.

Sincerely yours,

Mark L. Goldstein 

Director, Physical Infrastructure Issues
Page 36 GAO-04-537 Federal Protective Service

Appendix I

Scope and Methodology ApApenednxidexiIs

To determine what challenges, if any, the Federal Protective Service (FPS) 

has faced since it was taken out of the General Services Administration 

(GSA) and transferred to the Department of Homeland Security (DHS), we 

collected and analyzed agency documents about the transfer. This included 

policies and procedures, information about the organizational structure, 

and information on other issues related to the transfer, such as funding. We 

also interviewed agency officials from DHS, FPS, and GSA headquarters 

who were responsible for and directly affected by the transfer. After 

identifying the challenges FPS was experiencing, we collected documents 

and spoke to DHS and GSA agency officials about each challenge. To better 

understand FPS’s responsibilities and mission, we reviewed relevant laws 

and documents and interviewed DHS and GSA agency officials. 

Specifically, we reviewed the laws relating to FPS’s authority both before 

and after the transfer to DHS and analyzed the Homeland Security Act of 

2002 to determine if FPS has gained any new legal authority under the act. 

We also reviewed the operational memorandums of agreement between 

DHS and GSA (for fiscal years 2003 and 2004) and other information, which 

we verified, on FPS’s new Web site. We met with GSA officials to discuss 

the types of services FPS provided for GSA before and after its transfer to 

DHS. We interviewed DHS headquarters officials about the types of 

security and protection activities FPS has been performing since the 

transfer and their vision for the agency as part of DHS. Lastly, we spoke 

with ICE officials to obtain an understanding of how they envision the role 

of FPS within their organization. 

With regard to funding issues, we analyzed agency budget documents and 

interviewed DHS and GSA budget officials. Specifically, to identify how the 

agency would be funded in fiscal years 2004 and 2005, we reviewed the 

Homeland Security Act, the 2004 GSA and DHS appropriations acts, and the 

President’s budget for fiscal year 2005 to determine funding FPS has 

received and amounts requested. We corroborated funding data with data 

from FPS and GSA, as well as OMB data provided for a related GAO 

engagement. Lastly, we spoke with GSA and DHS budget officials about 

how the agency was funded during the transition (fiscal years 2003 and 

2004), how the agency would be funded in the upcoming fiscal year (fiscal 

year 2005), and any alternate funding proposals for future fiscal years, 

including fiscal year 2006 and beyond. To better understand FPS missionsupport issues, we reviewed the operational and mission-support 

memorandums of agreement between DHS and GSA (for fiscal years 2003 

and 2004) to determine what FPS mission-support systems would transfer 

to DHS. We interviewed DHS and FPS mission-support officials in charge of 
Appendix I

Scope and Methodology

Page 37 GAO-04-537 Federal Protective Service

managing all aspects of the transfer, including the transfer of FPS missionsupport functions from GSA to DHS. 

We considered prior GAO work on major management challenges and 

program risks of the DHS and challenges facing other DHS components, 

such as the Immigration and Naturalization Service, the Federal Air 

Marshal Service, and the U.S. Coast Guard. We considered prior GAO work 

on key practices used by public and private organizations that have 

undergone successful mergers and transformations. We did not do an indepth analysis comparing these practices with FPS’s transformation 

efforts. However, we held discussions with FPS officials to obtain their 

views on whether they were applicable to FPS.

DHS, FPS, and GSA provided much of the data and other information used 

in this report. We noted cases where these officials provided testimonial 

evidence, and we were not always able to obtain documentation that would 

substantiate the testimonial evidence they provided. In cases where 

officials provided their views and opinions on various issues within the 

context that they were speaking for the organization, we corroborated the 

information with other officials. We assessed the reliability of the funding 

data by (1) performing limited electronic testing of the data elements; (2) 

corroborating the data with FPS, GSA, and information obtained from OMB 

for another GAO review; (3) interviewing knowledgeable agency budget 

officials; and (4) comparing the data with other published data, such as the 

fiscal year 2004 GSA and DHS appropriations acts. Overall, we found no 

discrepancies with these data and therefore determined that they were 

sufficiently reliable for the purpose of this report. 
Page 38 GAO-04-537 Federal Protective Service

Appendix II

Comments from the Department of Homeland 

Security ApendxiI
Appendix II

Comments from the Department of Homeland 

Security

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Appendix II

Comments from the Department of Homeland 

Security

Page 40 GAO-04-537 Federal Protective Service
Appendix II

Comments from the Department of Homeland 

Security

Page 41 GAO-04-537 Federal Protective Service
Appendix II

Comments from the Department of Homeland 

Security

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Appendix III

Comments from the General Services 

Administration ApendxiI
Appendix III

Comments from the General Services 

Administration

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Appendix III

Comments from the General Services 

Administration

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Appendix III

Comments from the General Services 

Administration

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Appendix III

Comments from the General Services 

Administration

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Appendix III

Comments from the General Services 

Administration

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Appendix III

Comments from the General Services 

Administration

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Appendix III

Comments from the General Services 

Administration

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Appendix III

Comments from the General Services 

Administration

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Appendix III

Comments from the General Services 

Administration

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Appendix III

Comments from the General Services 

Administration

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Appendix IV

GAO Legal Analysis of Issues Concerning FPS 

Activities Not Related to Facility Protection ApendxiIV

In its comments on this report, DHS stated that it plans to develop guidance 

allowing the use of funds for activities unrelated to the protection of 

buildings and grounds where the activities are de minimis. DHS refers to 

GAO decisions as supporting the use of funds for activities that “are of 

limited duration with local offices, ad hoc, and do not increase the direct 

costs of FPS operations and investment in staff.” We do not agree with 

DHS. We do not believe the GAO decisions DHS cites support the 

implementation of the de minimis concept through guidance sanctioning 

de minimis uses of FPS funds for explicitly prohibited purposes.

Under the Homeland Security Act, only the costs of services provided by 

FPS personnel that are necessary or incidental to the protection of federal 

buildings and grounds may be funded out of agency rents and fees. 

Specifically, section 422(b)(2) of the Homeland Security Act of 2002 states: 

“Any amounts transferred by the Administrator of General Services to the Secretary out of 

rents and fees collected by the Administrator shall be used by the Secretary solely for the 

protection of buildings or grounds owned or occupied by the Federal Government.”1

The language in section 422(b)(2) explicitly restricts the use of funds 

collected by GSA from its tenants out of rents and fees “solely” for the 

protection of government buildings and grounds. Because of this limitation 

in the statute, the use of these funds for any purpose other than the 

protection of government buildings and grounds would not be permitted 

absent reimbursement pursuant to other applicable statutory authority. 

Section 422(b)(2) recognizes that FPS funds come from rents and fees paid 

by other federal agencies to reimburse FPS for services in protecting their 

buildings and grounds. To permit DHS to use those funds for purposes 

unrelated to the protection of federal buildings and grounds in effect would 

burden those agencies with paying part of the costs of DHS’s mission 

unrelated to the purpose for which they pay rents and fees. This practice 

also would result in the unauthorized augmentation of DHS appropriations. 

We are not questioning the policy judgment of DHS in making FPS 

personnel available for those activities within DHS’s mission that are not 

related to the protection of federal buildings and grounds. Rather, we are 

questioning the use of amounts transferred by GSA to DHS, given the 

restriction of section 422(b)(2) of the Homeland Security Act, for these 

activities.

1

Public Law 107-296, 116 Stat. 2135, 2184-2185 (2002). 
Appendix IV

GAO Legal Analysis of Issues Concerning 

FPS Activities Not Related to Facility 

Protection

Page 55 GAO-04-537 Federal Protective Service

DHS does not contend that the statute itself permits DHS to expend funds 

for purposes other than the protection of buildings and grounds and, in 

fact, DHS recognizes that if funds are used for unrelated purposes they 

must be reimbursed. However, DHS claims that if the unrelated 

expenditures are de minimis they need not be reimbursed, and DHS 

proposes to issue guidance to this effect. 

DHS relies on two GAO decisions, involving inter- and intra-agency details, 

as supporting its proposed guidance. In the first decision, 64 Comp. Gen. 

370 (1985), we held that, absent specific statutory authority, nonreimbursable details violate the purpose statute, 31 U.S.C. § 1301(a), which 

provides that appropriations may be spent only on the objects for which 

they are appropriated. However, we stated there were limited exceptions in 

which non-reimbursable agency details may still be allowed. Under the first 

exception, we recognized that non-reimbursable details would be 

appropriate, and consistent with the purpose statute, where the detail 

furthers a purpose for which the loaning agency receives appropriations. 

Under the second exception, which DHS relies upon, we stated that we 

would not object to details failing to meet the purpose test, as long as the 

detail is de minimis and the fiscal impact on the appropriation is 

negligible. In this decision, for purposes of defining de minimis, we 

adopted guidance from the Federal Personnel Manual (FPM) relating to 

agency details, and said we would permit “details for brief periods when 

necessary services cannot be obtained as a practical matter by other means 

and the number of persons and cost involved are minimal.” (64 Comp. 370, 

describing FPM Ch. 300, subchapter 8, Inst. 262, May 7, 1981.) However, in 

the second decision, 65 Comp. Gen. 635 (1986), we recognized that this 

discretion had limits. There, we stated that the proposed transfer of 15 to 

20 National Labor Relations Board administrative law judges to the 

Department of Labor “far exceeds the exception for administrative 

convenience we intended to establish.” We declined to state the dollar 

amount or number of people participating in a detail that would be 

considered de minimis. In fact, in subsequent cases regarding the detail of 

employees under the Economy Act,2

 we reiterated that the reimbursement 

of the costs of detailed personnel the agency must recover must be based 

on actual costs.3

2

Where no other authority exists, the Economy Act authorizes inter- or intra-agency 

provision of services on a reimbursable basis based on actual costs. See 31 U.S.C. 1535 and 

72 Comp. Gen. 159. 

3

See, e.g., B-250377, January 28, 1993 and B-257823, January 22, 1998. 
Appendix IV

GAO Legal Analysis of Issues Concerning 

FPS Activities Not Related to Facility 

Protection

Page 56 GAO-04-537 Federal Protective Service

As explained below, our opinion in 64 Comp. Gen. 370 does not support 

DHS’s proposal to issue guidance authorizing de minimis uses of FPS 

personnel and resources. The guidance adopted in our decision–the FPM–

has been rescinded and is no longer effective.4

 Moreover, to the extent that 

our decision is read as setting a de minimis standard of general 

applicability, it is not in keeping with the governing law on this subject. 

The concept of de minimis comes from the legal maxim De Minimis Non 

Curat Lex— the law does not concern itself with trifles.5

 This maxim, as 

applied by courts and by administrative agencies in various contexts, 

recognizes that a fact or amount may be so insignificant or trifling that it 

can be overlooked in deciding a legal issue. It places intangible injuries, 

such as those that are small and difficult to measure, outside the scope of 

legal relief.6

 In the context of appropriations law, we have occasionally 

invoked the de minimis concept to analyze the impact on an appropriation 

of past conduct alleged to be in violation of the law. For example, where 

agencies have violated anti-lobbying appropriation act restrictions, we 

have sometimes found the improper expense to be too small, or too 

commingled with proper expenses, to warrant recovery. 7

 In those cases we 

used the de minimis concept to measure the amount associated with the 

violation and not to prospectively sanction what would be a violation of 

law. In a similar vein, the Justice Department’s Office of Legal Counsel 

(OLC) has recognized that some activities may be so minimal, and so 

4

See 60 Fed. Reg. 3055 (Jan. 13, 1995). The only current material on details is found at 5 

C.F.R. Part 300, Subpart C which states that agencies may detail employees in accordance 

with 5 U.S.C. 3341 (allowing details for not more than 120 days). 

5

Black’s Law Dictionary 443 (7th ed. 1999). 

6

See 27A Am. Jur. 2d. Equity § 118 and Swick v. City of Chicago, 11 F.3d 85 (1993) (In action 

alleging he was deprived of property without due process of law under the Fourteenth 

Amendment of the Constitution, police officer was not entitled to recover claimed damages 

for injury resulting from being placed on involuntary sick leave because any injury was de 

minimis, i.e., intangible, small, difficult to measure.)

7

In this regard, in several GAO decisions we found violations of anti-lobbying appropriations 

act restrictions, but determined that the amount expended was nominal and not readily 

determinable—e.g., the costs of preparing a letter or sending an e-mail—and that the efforts 

to effect recovery would greatly exceed the amount to be recovered. See B- 285298, May 22, 

2000; B-178528, July 27, 1978; and B-116331, May 29,1961.
Appendix IV

GAO Legal Analysis of Issues Concerning 

FPS Activities Not Related to Facility 

Protection

Page 57 GAO-04-537 Federal Protective Service

difficult to segregate from official activities, that the associated expenses 

do not need to be separately tracked or reimbursed.8

To the extent generalities can be drawn from these cases, the de minimis

concept is most appropriately applied where amounts are not readily 

determinable and it is clear that it would be difficult or impossible for the 

agency to allocate the specific costs of an activity, such as the costs of 

reading and signing a letter. However, the concept must be applied on a 

case-by-case basis, depending on the unique facts and circumstances 

involved, not routinely as DHS suggests. See 65 Comp. Gen. 635. 

The guidance proposed by DHS would sanction uses of the FPS for 

purposes unrelated to the protection of federal buildings and grounds, and 

in our view this is not appropriate. In contrast to the kinds of situations 

illustrated above, DHS and FPS should be able to identify costs of FPS 

personnel used for such activities, since those types of costs can be 

allocated on a daily, hourly, or other periodic basis. For reimbursements 

under the Economy Act, recovery of actual costs is required.9

 In fact, those 

types of costs are commonly allocated when details or the costs of agency 

personnel providing services to another agency are reimbursed by one 

agency to another.10 While agencies may have flexibility in applying the 

actual cost standard, there must be reasonable assurance that the 

performing agency is reimbursed for its costs to avoid the ordering or 

8

In 14 U.S. Op. Off. Legal Counsel 144 (1990), OLC dealt with use of facilities of the White 

House Communications Agency (WHCA) for Presidential travel and communications. The 

decision observed that appropriated funds can be used for Presidential media contacts only 

with respect to official, as opposed to political communications, but in a footnote OLC gave 

an example of a de minimis use of WHCA facilities. Specifically, OLC noted that “there will 

always be particular instances when it will not be evident (and certainly not in advance) 

whether use of a WHCA facility will be in furtherance of the President’s official, as 

distinguished from his political responsibilities. For example, a presidential aide who 

returns a reporter’s telephone call will not know until the conversation is over whether the 

reporter is interested in political or official matters, or both. We believe that even when it 

eventuates that the reporter’s inquiry relates more to the President’s political rather than to 

his official responsibilities, WHCA may pay for such de minimis use of its facilities and that 

special logs need not be maintained nor other monitoring methods employed...” 14 Op. Off. 

Legal Counsel 144, at note 18. 

9

See 31 U.S.C. 1535 and 72 Comp. Gen. 159 (1993). 

10See B-257823, January 22, 1998. (Direct and indirect costs of personnel allocated by 

standard hourly rates for each general schedule grade level included salaries, benefits, costs 

of management and support staff as well as overhead.) See also B-250377, January 28, 1993. 

(Recovery of actual costs of detailed employees should be readily determinable by pay, 

personnel and other records that disclose such information.)
Appendix IV

GAO Legal Analysis of Issues Concerning 

FPS Activities Not Related to Facility 

Protection

Page 58 GAO-04-537 Federal Protective Service

performing agency augmenting its appropriations.11 Furthermore, the de 

minimis concept applies on a case-by-case basis. As noted above, the 

concept of de minimis typically goes to measure the amount associated 

with a violation or damages to be recovered. The concept has not been 

applied to, nor would the case law support, the prospective approval of 

activities across an organization like FPS knowing fully that they constitute 

violations of law.12 Similarly, any violation of a statute, whether it be 

characterized as de minimis or technical, is not permissible.13 For these 

reasons, we would object to DHS establishing prospective guidance which 

would sanction use of FPS funds for expenditures that are not incidental or 

necessary to the protection of federal buildings and grounds. 

As discussed above, section 422(b)(2) of the Homeland Security Act of 

2002 explicitly directs that funds collected from rents and fees be used 

“solely” for the protection of buildings and grounds, and the statute 

recognizes no exceptions to this restriction. In most situations, it can be 

determined prior to the activity whether it falls within FPS’s mission and is 

necessary or incidental to the protection of federal buildings and grounds. 

We recognize that DHS has some flexibility under 422(b)(2) of the 

Homeland Security Act of 2002 in determining that certain uses of FPS 

funds may be necessary or incidental to the protection of federal buildings 

and grounds. For example, if FPS officers were engaged in crowd control at 

the World Trade protests in Miami incident to their protection of federal 

buildings during demonstrations, the expenditure of funds for such 

activities would be allowed as “necessary” or “incidental” to the protection 

of federal buildings or grounds. However, as we noted in the report, there 

are other situations where the use of the FPS is not related in any way to 

the protection of federal buildings and grounds and FPS funds should not 

be used for such purposes without reimbursement. For example, officers 

assisting other DHS law enforcement personnel in immigration-related 

work such as “Operation Predator” or providing security at the Kentucky 

11See B-257823, January 22, 1998.

12For example, when the Air Force proposed a change to a regulation relating to the 

shipment of household goods, which would allow an agency disbursing officer to make a 

known overpayment, the Comptroller General disapproved of the change noting that it 

would essentially approve in advance violations of the law. 49 Comp. Gen. 359 (1969). 

13See, e.g., B-253164, August 23, 1993, in which GAO concluded that a seemingly “technical” 

violation of the Anti-Deficiency Act by the National Labor Relations Board was still a 

violation of the act and required a report to Congress and the Office of Management and 

Budget. 
Appendix IV

GAO Legal Analysis of Issues Concerning 

FPS Activities Not Related to Facility 

Protection

Page 59 GAO-04-537 Federal Protective Service

Derby is not necessary or incidental to the protection of federal buildings 

and grounds. If the activity does not fall within FPS mission or is not 

necessary or incidental to the protection of federal buildings and grounds, 

then the costs of these activities should be identified and reimbursed by the 

benefiting appropriation. 

(543083)
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