DEPARTMENT OF HOMELAND SECURITY 

Office of Inspector General 

DHS’ Efforts to Develop the Homeland 

Secure Data Network 

Office of Information Technology 

OIG-05-19 April 2005
Office of Inspector General 

 

U.S. Department of Homeland Security 

Washington, DC 20528 

Preface 

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

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

General Act of 1978. This is one of a series of audit, inspection, and special reports prepared by 

the OIG as part of its DHS oversight responsibilities to promote economy, effectiveness, and 

efficiency within the department. 

This report assesses the process used to develop and implement the Homeland Secure Data 

Network. It is based on interviews with DHS officials, direct observations, and a review of 

applicable documents. 

The recommendations herein have been developed to the best knowledge available to the OIG, 

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

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

appreciation to all of those who contributed to the preparation of this report. 

 

Richard L. Skinner 

Acting Inspector General 
Contents 

Introduction.................................................................................................................................... 3 

Results in Brief .............................................................................................................................. 4 

Background.................................................................................................................................... 5 

Findings.......................................................................................................................................... 7 

Challenges Remain to Ensure that HSDN User and Security Requirements Will Be Met ..... 7 

DHS Used an Appropriate Approach for the Acquisition of HSDN ............................... 14 

Recommendations................................................................................................................... 15 

Appendices 

Appendix A Purpose, Scope, and Methodology.............................................................. 17 

Appendix B Management’s Comments ........................................................................... 19 

Appendix C HSDN Implementation Phases and Services............................................... 21 

Appendix D HSDN Phase 1 Sites..................................................................................... 22 

Appendix E Major Contributors to This Report ............................................................. 23 

Appendix F Report Distribution ..................................................................................... 24 

Acronyms 

C&A Certification and Accreditation 

CIO Chief Information Officer 

CONOPS Concept of Operations 

CSDN Customs Secure Data Network 

CTO Chief Technology Officer 

Customs U.S. Customs Service (Department of the Treasury) 

Deliverables Activities and Related Documentation 

DISA Defense Information Systems Agency 

DHS Department of Homeland Security 

DOD Department of Defense 

FAR Federal Acquisition Regulations 

FEDSIM Federal Systems Integration and Management Center 

FISMA Federal Information Security Management Act 

GSA General Services Administration 

HSAWG HSDN Security Accreditation Working Group 

HSDN Homeland Secure Data Network 

Review Of DHS’ Effort to Develop The Homeland Secure Data Network 

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Contents 

IPT Integrated Product Team for HSDN 

IT Information Technology 

IV&V Independent Verification and Validation 

OIG Office of Inspector General 

OMB Office of Management and Budget 

PMO Project Management Office for HSDN 

SDLC System Development Life Cycle 

SIPRNET Secure Internet Protocol Router Network 

ST&E Security Test and Evaluation 

Figures 

Figure 1 DHS SDLC Phases 

Figure 2 Expansion of User Requirements from CSDN to HSDN 

Figure 3 Requirements Definition Methods for CSDN and HSDN 

Figure 4 Status of Key Security, Design, and Development Activities 

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OIG 

Department of Homeland Security 

Office of Inspector General 

Introduction 

Terrorist attacks on U.S. interests around the world, culminating with the 

September 11, 2001, attack on the homeland, highlight the need for U.S. 

government organizations involved in terrorism prevention and response 

to share vital intelligence information securely in order to coordinate their 

activities. The Homeland Security Act of 2002 specifically recognized this 

need and established procedures to address it. 

Anticipating the need to share intelligence and other information securely 

to fulfill its homeland defense mission, the Department of Homeland 

Security (DHS) is streamlining and merging disparate classified networks 

into a single, integrated network called the Homeland Secure Data 

Network (HSDN). Homeland security leaders envision that HSDN will 

become the major secure information thoroughfare joining together 

intelligence agencies, law enforcement, disaster management, and frontline disaster response organizations in the common goal of protecting our 

nation and its citizens. 

As part of its ongoing responsibilities to evaluate the effectiveness of DHS 

programs and activities, we conducted a review of the HSDN. The 

objectives of this review were to determine whether HSDN: met user 

needs; complied with information security standards and policies; and, 

was cost-effective. 

We conducted fieldwork at DHS’ Office of Chief Information Officer 

(CIO), and several DHS directorates and critical agencies. We performed 

our review between August and November 2004, according to generally 

accepted government auditing standards. See Appendix A for a 

description of our purpose, scope, and methodology. 

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Results in Brief 

DHS has taken a number of key steps toward the implementation of 

HSDN. These include: establishing a Program Management Office 

(PMO) for development and implementation of HSDN; performing tasks 

in the planning, requirements definition, and design phases of the DHS 

System Development Life Cycle (SDLC) process for the new network; 

defining the HSDN system concept; identifying some user requirements 

for HSDN; and, awarding a contract for the design, development, testing, 

and implementation of HSDN. Further, DHS used an appropriate 

approach for the acquisition of HSDN. 

DHS officials believed that the Department of Defense (DOD) planned to 

terminate DHS’ access to the DOD secure network, Secret Internet

Protocol Router Network1

 (SIPRNET), by December 31, 2004. 

Accordingly, the DHS CIO established an aggressive nine-month 

timeframe to implement HSDN. However, this accelerated schedule 

prevented DHS from adequately completing critical system development 

requirements. Specifically, the methods for collecting and documenting 

the functional and security needs of users during the requirements 

definition phase for the new network did not provide adequate assurance 

that user needs at the 600 sites will be met. Further, security 

implementation requirements and essential testing had not been completed 

one month prior to deployment. Without completing and documenting 

these activities in sufficient time for review and adjustment to eliminate or

mitigate risk, DHS does not have assurance that HSDN complies with 

security standards and policies. 

We are recommending that the CIO: 

• Ensure that users are involved in the requirements definition process 

for all future implementation phases of HSDN. 

• Verify that all necessary activities and documents, including 

certification and accreditation and thorough security control testing, 

are completed prior to system deployment. 

 1

 The Defense Information System Network has two separate internet protocol router networks: the 

SIPRNET and the Sensitive But Unclassified (SBU) Internet Protocol Network. The SIPRNET is an 

encrypted, closed loop system, meaning that it is completely separated from all other computer systems. 

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Background 

The HSDN grew out of an initiative at the U.S. Customs Service2

(Customs), called the Customs Secure Data Network (CSDN). The 

CSDN, which was estimated to cost $60 million, was intended to connect 

128 sites. When Customs became part of DHS, CSDN was incorporated 

into the DHS consolidated information technology (IT) infrastructure. 

The HSDN will be comprised of secure network connections on a data 

communications framework that links HSDN users to data centers. These 

data centers will provide users with access to DHS data and will connect 

to other secure, federal systems through gateways.3

 

HSDN will be implemented in four phases. The first phase of the HSDN 

is intended to provide an integrated network for secure access to data 

classified as Secret.4

 In the last phase of implementation, HSDN will 

provide the capability of sharing Top Secret5

 information. At a cost $337 

million, the HSDN will eventually connect 600 geographically dispersed

DHS intelligence gathering units, operational components, and other 

federal, state, and local agencies involved in homeland security activities. 

In the initial phase, HSDN will provide a suite of tools, including data 

access, secure e-mail, collaboration tools, data mining, intelligence 

analysis, and secure messaging6

 capabilities to 73 sites. In subsequent 

phases, additional HSDN capabilities will be added and extended 

throughout DHS and to other federal, state, and local organizations. 

Appendix C describes the HSDN Implementation Phases, along with the 

initial and future services to be provided. Appendix D provides a detailed 

list of the 73 sites included in Phase 1 of the HSDN implementation. 

The HSDN project is organized under the overall leadership of the DHS 

Office of the CIO. The DHS Chief Technology Officer (CTO), who 

 2 The U.S. Customs Service, formally under the U.S. Department of the Treasury, divested to the U.S.

Department of Homeland Security, pursuant to the Homeland Security Act of 2002 (P.L. 107-296). 3 A gateway is a hardware/software package that is used to interconnect networks with different protocols. 

The gateway has its own processor and memory, and can perform protocol and bandwidth conversions. 4

 “Secret” data is defined by Executive Order 12958 (Classified National Security Information) as 

information that if disclosed to unauthorized persons or compromised could cause serious damage to U.S. 

national security. 5

 “Top Secret” data is defined by Executive Order 12958 (Classified National Security Information) as 

information that if disclosed to unauthorized persons or compromised could cause exceptionally grave 

damage to U.S. national security. 6

 Secure e-mail allows users to encrypt e-mail messages so they cannot be read even if intercepted.

Collaboration tools, such as an electronic white-board, allow people in distant offices to work together over a

data communications link. Data mining provides tools to find the data you are looking for in very large 

databases. Intelligence analysis provides summarized intelligence data. Secure messaging handles 

encryption of e-mail, files, and other data sent over the network without any user intervention. 

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reports to the CIO, oversees the PMO, which has day-to-day responsibility 

for managing HSDN. The PMO has an organizational plan which 

describes activities employed to manage the HSDN acquisition, such as 

the governance structure, program office organizational structure, and 

staffing levels. Through a contract with the General Services 

Administration’s (GSA) Federal Systems Integration and Management 

(FEDSIM) Center, the PMO built an organization for program

development, implementation, and operations. On April 12, 2004, DHS 

awarded a contract to a prime contractor and its related partners for the 

design and completion of HSDN as well as integrating existing and new 

business processes and technologies. With its prime contractor on board, 

the PMO supported the near-term Phase 1 and planned for the delivery of 

HSDN to meet DHS classified communications objective as a part of a 

consolidated, secure DHS information infrastructure. 

DHS is using a system development life cycle (SDLC) methodology to 

provide a structured approach to managing IT projects. As illustrated in 

Figure 1, there are eight phases in the DHS SDLC: 

• Planning Phase: Defines the system concept from the user’s

perspective and establishes a comprehensive development plan. 

• Requirements Definition Phase: Defines detailed requirements 

(users and technical staff) to ensure that the system will meet user 

requirements. Establishes a functional baseline. 

• Design Phase: Transforms requirements into detailed design 

specifications. Establishes an allocated baseline, documented in 

the System Design Document. 

• Development Phase: Builds the system (development team) 

according to the design specified during the Design Phase. 

Conducts development testing. 

• Test Phase: Tests and evaluates independently to ensure that the 

developed system functions properly. Satisfies the requirements 

(including security requirements) developed in the Requirements 

Definition Phase and performs adequately in the host environment. 

• Implementation Phase: Deploys system to designated production 

sites. Completes product baseline, including the production 

system, databases, an updated data dictionary, associated 

infrastructure, and supporting documentation. 

• Operations and Maintenance Phase: Becomes operational. 

Identifies necessary system modifications. Documents them as 

“System Change Requests.” 

• Disposition Phase: Retires from the operational environment. 

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Figure 1: DHS SDLC Phases 

SDLC

Process

Implementation

Phase

•Build system

•Test system build

O&M

Phase

Planning

Phase

Requirements

Definition

Phase

Design

Phase

Development

Phase Test

Phase

Disposition

Phase

•Design system

•Establish allocated 

baseline

•Define requirements

•Establish functional baseline

•Establish plan

for developing 

system

•Retire system

•Archive data

•Migrate system to

production 

environment

•Carry out system

enhancements

•Establish product

baseline

•Deploy system

•Conduct independent testing and evaluation

SDLC

Process

Implementation

Phase 

•Build system

•Test system build

O&M

Phase 

Planning

Phase 

Requirements

Definition

Phase

Design

Phase 

Development

Phase Test

Phase 

Disposition 

Phase 

•Design system

•Establish allocated

baseline

•Define requirements

•Establish functional baseline

•Establish plan

for developing 

system

•Retire system

•Archive data

•Migrate system to

production 

environment

•Carry out system

enhancements

•Establish product

baseline

•Deploy system

•Conduct independent testing and evaluation

Source: DHS Sensitive Systems Handbook, Information Technology Security Program,

DHS MD-4300, June 2003. 

DHS policy requires security to be integrated into the SDLC from the IT 

system’s inception to the system’s disposal through adequate and effective 

management, personnel, operational, and technical control mechanisms. In 

addition, OMB Circular A-130 requires that federal agencies ensure that 

major information systems proceed in a timely fashion toward agreedupon milestones in an information life cycle. Also, OMB requires that 

information systems deliver their intended benefits, meet user 

requirements, and identify and offer security protections. 

Findings 

Challenges Remain to Ensure That HSDN User and Security 

Requirements Will Be Met 

DHS has taken key steps toward the implementation of HSDN. The PMO 

performed tasks in the planning, requirements definition, and design 

phases of the DHS SDLC process for the new network. For example, 

DHS defined the HSDN system concept, identified some user

requirements for HSDN, and awarded a contract for the design, 

development, testing, and implementation of HSDN. However, because 

DHS adopted an accelerated schedule for HSDN deployment, it did not 

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adequately complete key system development steps. Specifically, users 

were not sufficiently involved in the requirements definition phase and 

security implementation requirements and essential testing were not 

completed on schedule. As a result, DHS does not have assurance that 

HSDN will satisfy user needs and adequately protect classified 

information. 

DHS Did Not Employ Sufficient Collection Methods During The HSDN 

Requirements Definition Phase

During the requirements definition phase for HSDN, DHS did not use 

sufficient methods and outreach efforts to ensure that the HSDN user 

community supported the functional baseline of the acquisition, and that 

the acquisition was based upon clearly understood needs. During 2002, 

prior to the creation of DHS, the former U.S. Customs defined and 

documented its user requirements for CSDN. When DHS acquired the 

CSDN program, the PMO accepted its applicability as a pilot for DHS’ 

mission and user requirements. However, by the time the PMO presented 

the HSDN business case justification to the DHS Investment Review 

Board (November 2003), it had not validated that the requirements 

developed by Customs users met the needs of all DHS sites. In addition, 

DHS did not collect sufficient input to identify and document user 

requirements for the 600 HSDN sites. Figure 2 contrasts CSDN with 

HSDN in terms of project complexity and user requirements, as 

represented by lines of business. 

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Figure 2: Expansion of User Requirements from CSDN to HSDN 

DHS

HSDN

FY 2004

Treasury

CSDN

FY 2002

CSDN was designed to connect to 

128 sites. HSDN will eventually

incorporate 600 sites. In addition,

HSDN will add six new services.

CSDN User Needs

1. Combat Terrorism

2. Border Control

3. Improve Law Enforcement

HSDN User Needs

1. Combat Terrorism

2. Border Control

3. Improve Law Enforcement

4. Improve Transportation Security

5. Enhance First Responder Programs

6. Improve Information Sharing

7. Decrease Response Time for Action

8. Improve Quality of Decision Making

9. Mitigate Threats to Our Homeland

Source: OIG figure based on analysis of CSDN FY2002 and HSDN FY2004 business 

case justifications and capital asset plans. 

The DHS CTO said that three methods were used to identify user 

requirements: Integrated Product Team (IPT) meetings, HSDN Town Hall 

meetings, and DHS directorate and critical agency’s CIO reviews. 

However, prior to the contract award for HSDN in April 2004, these 

methods did not adequately involve users in determining and documenting 

the functionality needed for HSDN. Figure 3 identifies all the methods 

employed during the requirements definition phases for CSDN and 

HSDN. Specifically: 

• The CTO said that the IPT meetings served as an important forum for 

obtaining user requirements. However, as of November 2004, only 

two IPT meetings were held. The first meeting (July 2003) involved 

only two DHS components: the Bureau of Customs and Border 

Protection and Bureau of Immigration and Customs Enforcement. 

• The second IPT meeting in February 2004, held two months before the 

HSDN contract was awarded, introduced current DHS users to the 

project, rather than identify user needs. In addition, we interviewed 

18 IPT members from DHS components to determine whether user 

requirements had been accurately identified for the network. Five of 

the 18 IPT members said that they had not been involved in the 

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definition of user requirements. Four of the 18 IPT members said that 

they had not reviewed the HSDN design. 

• The CTO said that Town Hall meetings were held to provide a forum

for HSDN discussions and to collect user needs from user 

representatives. However, none of the IPT members were aware of the 

HSDN Town Hall meetings, and DHS did not develop minutes or 

attendance lists for the meetings. 

• Only two meetings with DHS component CIOs were held (June 2003 

and September 2003) to formally review HSDN user requirements 

before the contract award. However, the reviews were not detailed 

and the PMO did not have documentation showing that the CIOs 

accepted the requirements identified for the acquisition and subsequent 

design of HSDN. 

• The PMO developed a requirements crosswalk with some DHS 

organizational elements in March 2003. However, other DHS 

components requiring secure connectivity for information sharing, 

IAIP, S&T, and the OIG, were not involved. 

Figure 3: Requirement Definition Methods for CSDN and HSDN 

Requirements

Crosswalk

(CBP, USCG, ICE, USSS, 

TSA, EPR)

June

2003

Nov

2003

July

2003

1st IPT

Meeting-HSDN Pilot 

(CBP & ICE)

1stReview

of HSDN by

DHS CIOs

March

2003

Review of

CSDN by DHS

Classified IT

Working Group

Sept

2003

2nd Review

of HSDN by

DHS CIOs

HSDN

Requirements

and Scope

Presented to

DHS IRB

Treasury-US Customs Service DHS 

February

2002

CSDN

February

2003

CSDN

Development of CSDN

User Requirements

(13 IPT Meetings Held) 

Development of HSDN 

User Requirements

(2 IPT Meetings Held)

Feb

2004

April

2004

Contract

Awarded to

Northrop 

Grumman

2nd IPT

Meeting-HSDN

Presentation

(All DHS Directorates

and Critical Agencies)

Source: Adapted from HSDN Investment Review Board Presentation, November 20, 

2003.

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According to the DHS Sensitive Systems Handbook, users should be 

involved in defining the detailed requirements for new systems to ensure 

that the system will meet user needs. However, DHS’ methods for 

collecting and confirming user requirements prior to contract award did 

not lead to assurance that user needs at the 600 sites will be met. As a 

result of the weaknesses in defining the user requirements for Phase 1, 

DHS does not have assurance that the HSDN will satisfy users’ functional 

and security needs, and adequately protect classified information. 

Key Activities - Including Security Implementation Requirements and 

Essential Testing - Not Completed

Many of the key activities needed to control the implementation of HSDN 

have not been completed. During August 2004, DHS was in the planning 

phase of the SDLC and intended to deploy HSDN by December 31, 2004.7

 

As of November 2004, the PMO was still working on compliance with 

security standards and policies. In an effort to implement the HSDN 

within the nine-month timeframe established by the CTO, the PMO did 

not follow its own schedule that would allow for thorough preparation and 

adjustment of HSDN security, design, and development activities. 

The CIO’s office believed that the DOD planned to terminate DHS’ access 

to the DOD secure network by December 31, 2004. Accordingly, the 

DHS CIO established an aggressive nine-month timeframe to implement 

HSDN and, thus, did not complete a number of key implementation steps. 

However, the SIPRNET Service Manager at the Defense Information 

Systems Agency said that there was no intent to revoke DHS access on 

this specific date, but to phase out services once HSDN was fully 

operational. 

Figure 4 highlights the activities that need to be completed for HSDN. We 

analyzed the status of 41 HSDN key activities listed in the Task Orders. 

Of these deliverables, 30 of 40 (75%) missed their delivery dates. As of 

October 31, 2004, 28 of 41 (68%) deliverables still had not been 

completed. Many of these deliverables included key security planning and 

implementation activities to minimize the risks that the system can be 

compromised and to ensure that risk elimination or mitigation efforts are 

implemented prior to deploying the system. Essential documentation, 

such as the vulnerabilities assessment report, security test and evaluation 

report, and system certification packages, were not complete. 

 7

 DHS revised the HSDN implementation timeline from December 2004 to March 2005. 

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Figure 4: Status of Key Security, Design, and Development Activities 

Aug. 23,

2004 

Oct. 31,

2004 

Scheduled 

Delivery Date Key HSDN Security, Design, or Development Activity 

NS NS July 28, 2004 Security Test & Evaluation Plan 

NS NS May 3, 2004 System Concept of Operations (CONOPS): Continuity of Operations 

Plan

NS NS April 17, 2004 Security Test Results and Corrective actions

NS NS April 17, 2004 Site/System Certification Package (each site C&A)

NS NS April 17, 2004 Vulnerabilities Assessment Report as discovered

NS NS October 29, 2004 Service Catalog 

NS NS November 30, 2004 Technology Refreshment Plan (candidate subsystems)

NS NS October 31, 2004 Business Process Re-Engineering Assessment Document

NS NS June 7, 2004 HSDN Support Plan 

NS NS June 7, 2004 HSDN Training Plan 

NS NS June 7, 2004 Help Desk Standard Operating Procedures 

NS NS November 30, 2004 Enterprise Architecture 

NS NS April 22, 2004 Site Installation Plan (Prepared for each site). 

NS NS June 16, 2004 Documents and Manuals 

NS NS July 14, 2004 HSDN Installation Plan 

NS NS June 8, 2004 Network Operation Center Standard Operating Procedures: Disaster

Recovery

NS ID June 8, 2004 Security Training Plan and Curriculum

NS ID June 8, 2004 HSDN Security Plan: Disaster Recovery Plan/Procedures

ID ID Date Not Established Privacy Impact Assessment

ID ID June 8, 2004 Contractor Facility and Physical Security Plan 

ID ID May 10, 2004 Configuration Management Plan and Procedures 

ID ID May 3, 2004 System CONOPS

ID ID May 10, 2004 External Interconnection Agreements 

ID ID April 12, 2004 Computer Network Defense CONOPS 

ID ID May 10, 2004 Computer Incident Response Team

ID ID May 10, 2004 Communication Security Plan 

ID ID May 3, 2004 HSDN Master Test Plan 

ID ID July 28, 2004 System Security Authorization Agreement (SSAA): Part B

ID C May 17, 2004 HSDN Quality Control Plan 

ID C April 12, 2004 SSAA: Part A

ID C May 3, 2004 Government Furnished Equipment Use/Reuse Guidelines 

C C May 2, 2004 HSDN Quality Assurance Surveillance Plan 

C C April 20, 2004 System Architecture 

C C April 12, 2004 Transition Plan 

C C April 12, 2004 HSDN Deployment Plan 

C C April 12, 2004 Fault Analysis Plan 

C C April 12, 2004 HSDN Risk Management Plan 

C C April 12, 2004 HSDN Design Document 

C C April 12, 2004 Kickoff Meeting Briefing Charts

C C April 12, 2004 HSDN Project Management Plan 

C C April 12, 2004 Work Breakdown Structure 

C = Completed ID = In Development NS = Not Started Security Related

Activities 

Source: OIG figure based on an analysis of HSDN project deliverables. 

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According to DHS policy and NIST standards, security controls must be 

incorporated into the SDLC from the system’s inception through its disposal. 

The PMO established the HSDN Security Accreditation Working Group 

(HSAWG) to involve user agencies in the Site/System Certification and 

testing processes. However, this group was not formed until October 2004, 

two months before HSDN was scheduled for deployment. During its first 

meeting, held on November 19, 2004, the HSAWG recognized security was a 

major concern and that documentation on security controls was needed.8

 As of 

October 31, 2004, 18 of 20 (90%) deliverables providing information for 

HSDN certification and accreditation were not completed. (See shaded 

activities in Figure 4). 

The DHS Management Directive on Information Technology Systems 

Security9

 requires a certification and accreditation to be completed before any 

system can be granted authority to operate.10 Accordingly, each of the 73 user 

sites must have a completed site certification and accreditation package before 

it can be connected to the HSDN to ensure that undetected vulnerabilities are 

not inherited and spread system-wide. After the packages are distributed, the 

sites will need time to conduct site surveys and correct any deficiencies or 

identify mitigating conditions prior to being connected in December 2004. As 

of November 19, 2004, certification packages for completion by each site 

before converting to the HSDN had not been distributed to the sites.11 

Accordingly, one month prior to the scheduled HSDN deployment, the site 

certification and accreditations were not completed. 

As of November 2004, DHS had not performed essential system testing as 

part of the testing phase of the certification and accreditation. Specifically, 

the development of the security test and evaluation (ST&E) plan,12 which was 

scheduled for completion in July 2004, had not yet begun. According to NIST 

800-37, completing this testing and properly responding to the results should 

be completed during the initiation phase of the SDLC, when system

requirements are established. 

In addition, the HSDN Master Test Plan,13 which was scheduled to be finished 

in May 2004, had not been finalized. The HSDN Master Test Plan would aid 

in determining whether the functional and security requirements are met, 

 8

 DHS Minutes of HSAWG meeting, November 19, 2004. 9

 DHS Management Directive No. 4300A, Information Technology Systems Security Management, June 

2003. 

10 The primary purpose of system C&A is to promote appropriate risk management to ensure security is 

provided for all information collected, processed, transmitted, stored, or disseminated by systems. 11 DHS Minutes of HSAWG meeting, November 19, 2004. 12 The ST&E plan outlines the testing to be conducted to verify that security controls are built into HSDN 

function as intended and to aid in the assessment of acceptable risk. 13 The Master Test Plan outlines the unit level, integration, operational, installation, and external interface

testing that will be conducted to ensure that the system functions as intended. 

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facilitate assessing the effectiveness and strength of internal controls and 

security, and provide criteria for acceptance when passed, corrective action if 

failed, or eligibility for new or replaced system components. The Federal 

Information Security Management Act (FISMA) of 200214 requires each 

agency to perform testing and periodic evaluations of the effectiveness of

information security and includes the testing of management, operational, and 

technical controls to ensure that security controls are in place to maintain risk 

at an acceptable level.15

Insofar as the Master Test Plan had not been followed, many of the IPT 

members who we contacted did not have the test schedule and were uncertain 

whether they would be involved in testing. Further, there was little or no 

understanding of the testing process or when and how adjustments would be 

made. Additionally, to improve internal controls and risk management after 

deployment, users may require more extensive testing than contracted, leading 

to additional expenditures and resource utilization that could have been 

avoided. 

DHS Used An Appropriate Approach For The Acquisition Of 

HSDN 

DHS employed an appropriate approach for promoting cost effectiveness of 

the acquisition of HSDN. To determine if the acquisition plan called for open 

competition, we reviewed the CSDN and HSDN OMB Exhibits 300, Task

Order, and conducted interviews with the PMO. According to the information 

provided, the Task Order request was released under the GSA’s Millennia 

Contract to eight top industry leaders that could serve as prime contractors for 

HSDN. The proposers submitted written proposals and made oral 

presentations to the PMO. DHS selected the Millennia contract on both 

technical and cost considerations as a basis for ensuring the cost effectiveness 

of the acquisition of services related to HSDN design, development, and 

implementation. 

The Millennia contract is an Indefinite Delivery/Indefinite Quantity, 

Government-wide Acquisition Contract that fulfills the federal government’s 

demand for large system integration and development projects by providing 

information technology services in a timely and cost-effective manner. The 

following are characteristics of the contract that support the cost effectiveness 

of the HSDN acquisition approach.

 14 FISMA was enacted as Title III of the E-Government Act of 2002, P.L. 107-347. 15 Id., § 301; codified in 44 U.S.C. §§ 3544(a)(2)(D) and (b)(5)(A). 

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• The contract contains five Cost Reimbursement Task Orders, suitable for 

use when uncertainties in contract performance do not permit cost to be 

estimated with sufficient accuracy to use a fixed price contract. 

• The contract is structured with award fees based on meeting development 

and deployment milestones, and upon achieving performance metrics as 

specified in Service Level Agreements. 

• The contract specifies that metrics be collected and reported as factors in 

an Earned Value Management System. To ensure that the HSDN Project 

will be developed in a cost-effective manner, the Task Order implements 

an Earn Value Management System that complies with the ANSI/EIA 

Standard 748.

The PMO utilized the GSA’s FEDSIM Center as the contract office representative 

on fee-for-service basis to provide technical and administrative support and 

acquisition services, including contract award and oversight. Under the Millennia 

contract, Northrop Grumman will perform the design, development, testing, and 

implementation activities for HSDN, using functional and security requirements 

developed by DHS. 

 

Recommendations 

To better manage the implementation of HSDN, we recommend that the CIO: 

1. Ensure that users are extensively involved in the requirements definition 

process for all future implementation phases of HSDN. 

2. Verify that all necessary activities and documents, including certification 

and accreditation and thorough security control testing are completed prior 

to system deployment. 

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Management Comments and Our Evaluation 

We obtained written comments on a draft of this report from DHS. We have incorporated 

the comments where appropriate and included a copy of the comments in their entirety as 

Appendix B. DHS agreed with each of our recommendations. Below is a summary of 

DHS’ response to each recommendation and our assessment of the response. 

Recommendation 1: Ensure that users are extensively involved in the requirements 

definition process for all future implementation phases of HSDN. 

The HSDN Program Director has established a senior position in the PMO as 

requirements lead for the program, and has assigned a PMO staff to that role to ensure 

that users are involved in the requirement definition process for all implementation 

phases of HSDN. 

We accept DHS’ response for ensuring that users are extensively involved in the 

requirements definition process for all future implementation phases of HSDN. 

Recommendation 2: Verify that all necessary activities and documents, including 

certification and accreditation and thorough security control testing are completed 

prior to system deployment. 

The HSDN PMO concurs that HSDN must be fully certified and accredited prior to 

system operation. Current certification and accreditation activities are managed by the 

Security group in the HSDN PMO, and occupy two senior full time PMO staff. 

Complying with the DHS certification and accreditation process involves development of 

a full documentation suite, verification of security control testing, and completion of the 

full process prior to system operation. 

 

We accept DHS’ response that HSDN will comply with the DHS certification and 

accreditation process prior to system operation. 
 Appendix A 

 Purpose, Scope, and Methodology

Page 17

The objectives of our review were to determine whether HSDN: (1) met user needs; 

(2) complied with information security standards and policies; and, (3) was costeffective. 

We reviewed DHS efforts and requirement definition methodology - to determine 

whether HSDN met functional and security requirements of users - in relation to its 

system development life cycle methodology and applicable directives. We analyzed the 

Office of Management and Budget (OMB) Exhibits 300 for business case justification for 

CSDN and HSDN. We conducted interviews with the PMO, FEDSIM, and 

representatives of: 

DHS Directorates or Critical Agencies

• Border and Transportation Security16

 Bureau of Customs and Border Protection 

 Bureau of Immigration and Customs Enforcement 

 Transportation Security Administration 

• Emergency Preparedness & Response 

• Information Analysis and Infrastructure Protection 

• Science & Technology 

• United States Secret Service 

Non-DHS Agency

• Defense Information System Agency17 

To determine the extent to which HSDN complied with information security standards 

and policies, we reviewed applicable laws, federal regulations and standards, and 

directives. We compared security planning and implementation efforts with requirements 

to determine whether they were met. We reviewed the two completed certification and 

accreditation documents, the HSDN Risk Management Plan and the first part of the 

System Security Authorization Agreement. We analyzed 41 key security, design, and 

development activities in terms of their schedule and progress. We conducted interviews 

with DHS officials to assess their involvement in and concerns with security planning 

and testing. 

To determine whether the DHS used an effective acquisition strategy for developing 

HSDN, we analyzed the acquisition approach and selection, OMB Exhibits 300 for 

CSDN and HSDN, and the DHS Task Order in relation to the Federal Acquisition 

Regulations (FAR) and Government Accountability Office, Assessing Acquisition Risk 

for IT Investments. In addition, we reviewed the Request for Proposals issued under the 

 

16 Three DHS components are from the BTS directorate. 

17 We met with Defense officials to obtain an understanding of SIPRNET requirements and DHS connectivity to SIPRNET. 
 Appendix A 

 Purpose, Scope, and Methodology

Review Of DHS’ Effort to Develop The Homeland Secure Data Network

Page 18

Millennia contract to determine whether user requirements were translated into the 

contractor’s Statement of Work. 

We conducted our review between August and November 2004, pursuant to the Inspector 

General Act of 1978, as amended, and according to generally accepted government 

auditing standards. Major contributors to this report are listed in Appendix E. 
 Appendix B 

 Management’s Comments 

Review Of DHS’ Effort to Develop The Homeland Secure Data Network

Page 19
 Appendix B 

 Management’s Comments 

Review Of DHS’ Effort to Develop The Homeland Secure Data Network

Page 20
 Appendix C 

 HSDN Implementation Phases 

 and Services

Page 21

Phase 1 

•Secret Gateway

•Available at 73 sites: 

 DHS Headquarters 

 6 DHS agencies: 

 (CBP, ICE, USSS, EP&R, S&T, and TSA) 

 Three cities: 

 (Richmond, VA; New York, NY; Albany, NY) 

Phase 2 

•DHS-wide deployment 

•Department of Energy, Justice, and State 

 gateways 

•Temporary/remote locations brought online 

Phase 3 

•Governors’ offices; state, local, and other U.S. 

 domestic civilians; other federal agencies; and, 

 emergency operation centers brought online 

Phase 4 

•Top Secret gateway 

Initial Services

•Common software settings 

•Secure e-mail 

•Collaboration across people, partners, and 

 applications 

•Secure messaging 

•Data mining and intelligence analysis 

•End-user notification 

Future Services 

•Characteristics of information 

•Remote access anytime, anywhere 

•Advanced query 

•Phone calls using computer network 

•Document management 

•Geospatial analysis (mapping data) 

•Collection requirements management 

•Secure video conferencing 

•Improved productivity by tagging many 

 objects simultaneously 

Source: OIG Analysis, based on Northrop Grumman, HSDN Project Kickoff Meeting, April 2004, p.35, 

and DHS Investment Review Board Presentation, November 20, 2003, p.6.
 Appendix D 

 HSDN Phase 1 Sites (June 2004) 

Review Of DHS’ Effort to Develop The Homeland Secure Data Network

Page 22

O ffic e L o catio n

BUR EA U O F C U S TOM S A N D B O RDER PRO T EC T IO N

(CBP )

1 . O ffic e o f In te llig e n c e W a shin g ton, D C

2 . N a tional L aw E n fo rc e m ent

C om m unications C e n te r

O rland o , F L

3 . O ffic e o f In fo rm a tio n a n d

T e chno lo gy 

N ew ingto n , V A

4 . N a tional T a rg e ting C e n te r R e s to n , V A

5 . A riz o n a C u s tom s M a nag e m e n t

C e n te r (CM C ) 

T u c s o n , A Z

6 . G u lf CM C N ew O rle a n s , LA

7 . M id P a c ific CM C S an F rancisco, C A

8 . N o rth A tla n tic CM C B o s to n , M A

9 . S o u th P a c ific CM C Long B each , C A

1 0 . W e s t G re a t L a k e s CM C D e tro it, M I

1 1 . E a s t T e xa s CM C H o u s ton, T X

1 2 . M id Am e ric a C M C C h ic a g o , IL

1 3 . New Y o rk C M C N ew Y o rk , NY

1 4 . N o rth F lo rid a CM C T am p a , F L

1 5 . S o u th A tla n tic CM C C o llege P a rk , G A

1 6 . S o u th T e xas CM C Lare d o , T X

1 7 . W . T e xa s & NM CM C E l Pa s o , TX 

1 8 . E a s t G re a t L a ke s CM C B u ffa lo , N Y

1 9 . M id A tlantic CM C B a ltim o re , M D

2 0 . NW G re a t P la in s CM C S e a ttle , W A

2 1 . No rth P a c ific C M C P o rtla nd, O R

2 2 . S o u th F lo rid a C M C M ia m i, F L

2 3 . S o u thern C a lifo rn ia CM C S an D iego , C A

2 4 . P o rt of N ew a rk N ew a rk , NJ

IM M IG R A T IO N A N D C U STO M S E N FO R C E M E N T (IC E )

2 5 . HQ W a shin g ton D C

2 6 . T a c tic a l In te llig e n ce C ente r B a y S t. Louis , M S

2 7 . A ir M a rin e O p e ra tio n C ente r R iv e rs id e , C A

2 8 . S p e c ia l O p e ra tions C e n te r A lb uqu e rq ue, NM

2 9 . F ie ld In te llig e n c e U n it -N E N ew Y o rk , NY

3 0 . F ie ld In te llig e n c e U n it- S E M iam i, F L

3 1 . F ie ld In te llig e n c e U n it- S C H o u s ton, T X

3 2 . F ie ld In te llig e n c e U n it -N C C h ic a g o , IL

3 3 . F ie ld In te llig e n c e U n it- SW T u c s o n , A Z

3 4 . F ie ld In te llig e n c e U n it P a cific Long B each , C A

3 5 . S p e c ia l A gent in C h a rge B a ltim o re , M D

3 6 . S p e c ia l A gent in C h a rge B o s to n , M A

3 7 . S p e c ia l A gent in C h a rge B u ffa lo , N Y

3 8 . S p e c ia l A gent in C h a rge D a lla s , T X

3 9 . S p e c ia l A gent in C h a rge D e n v e r, CO

4 0 . S p e c ia l A gent in C h a rge D e tro it, M I

4 1 . S p e c ia l A gent in C h a rge E l Pa s o , TX 

4 2 . S p e c ia l A gent in C h a rge Los A n geles, C A

4 3 . S p e c ia l A gent in C h a rge N ew O rle ans, LA

4 4 . S p e c ia l A gent in C h a rge N ew Y o rk , N Y

4 5 . S p e c ia l A gent in C h a rge N ew a rk , NJ

4 6 . S p e c ia l A gent in C h a rge P hoe n ix , A Z

4 7 . S p e c ia l A gent in C h a rge S a n A n to n io , T X

4 8 . S p e c ia l A gent in C h a rge S an D iego , C A

4 9 . S p e c ia l A gent in C h a rge S an F rancisco, C A

5 0 . S p e c ia l A gent in C h a rge S eattle , W A

5 1 . S p e c ia l A gent in C h a rge S t. P a u l, M N

5 2 . S p e c ia l A gent in C h a rge T u c s o n , A Z

O ffic e L o c a tion 

U S S EC R E T S ER V IC E (U S S S )

53. U S S S W a s h in g to n , D C

54. U S S S B e lts v ille , M D

D H S HEA DQ U ART ERS

5 5 . HQ B u ild in g W a s h in g to n , D C

5 6 . HQ B u ild in g W a s h in g to n , D C

5 7 . HQ B u ild in g W a s h in g to n , D C

E M E R G EN C Y P R E P A R E D N E S S & R E S PO N S E (E P & R ) 

5 8 . H ead q u a rte rs W a s h in g to n , D C

5 9 . Em e rg e n c y AC B e rry v ille , VA 

6 0 . R egio n 10, M E R S B o th e ll, W A

6 1 . R egio n 6, M E R S D e n to n , T X

6 2 . R egio n 8 , M E R S Lakew o o d , CO

6 3 . R egio n 1 , M E R S M a yn a rd , M A

6 4 . R egio n 4 , M E R S T hom asville , G A

SC IE N C E AN D T EC HNO LO G Y (S& T ) D IR EC TO R A T E

6 5 . N o rthw e s t D C W a s h in g to n D C

6 6 . F o rt D ie trick F re d e rick, M D

T RANSPO R T A T IO N SEC URIT Y A G EN C Y (T SA)

6 7 . C o lo ra d o S p rin g s C O

6 8 . A n nap o lis J u nction M D

6 9 . H e rn d o n VA 

7 0 . A rlin g to n V A

STA T E /L O C A L 

7 1 . New Y o rk NY 

72. A lb any NY 

73. R ichm o nd VA 

S ourc e : H S D N D e p lo ym en t P la n , (D e liv e rable 21),

d a te d J u n e 9 , 2 0 04.
 Appendix E 

 Major Contributors to This Report 

Review Of DHS’ Effort to Develop The Homeland Secure Data Network

Page 23

Frank Deffer, Assistant Inspector General, Office of Information Technology 

Special Projects Division

Marj Leaming, Director 

Steve Harrison, Audit Manager 

Louis Ochoa, Senior Auditor 
 Appendix F 

 Report Distribution 

Review Of DHS’ Effort to Develop The Homeland Secure Data Network

Page 24

Department of Homeland Security

Secretary 

Deputy Secretary 

General Counsel 

Under Secretary, Management 

DHS GAO/OIG Liaison Officer 

DHS Chief Information Security Officer 

DHS Office of Security 

DHS Public Affairs 

CIO Audit Liaison 

Office of Management and Budget

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress

Appropriate Congressional Oversight and Appropriations Committees 
Additional Information and Copies 

To obtain additional copies of this report, call the Office of Inspector General 

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

site at www.dhs.gov/oig. 

OIG Hotline 

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

criminal or noncriminal misconduct relative to department programs or operations, 

call the OIG Hotline at 1-800-323-8603; write to DHS Office of Inspector 

General/MAIL STOP 2600, Attention: Office of Investigations - Hotline, 245 

Murray Drive, SW, Building 410, Washington, DC 20528, or email 

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

and caller. 

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