United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Management, 

Investigations, and Oversight, Committee 

on Homeland Security, House of 

Representatives

DEPARTMENT OF 

HOMELAND SECURITY 

Progress and Continuing 

Concerns with Acquisition 

Management 

Statement of John P. Hutton, Director 

Acquisition and Sourcing Management 

For Release on Delivery

Expected at 2 p.m. EST 

Wednesday, September 17, 2008

 

GAO-08-1164T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 17, 2008

DEPARTMENT OF HOMELAND SECURITY

Progress and Continuing Concerns with Acquisition 

Management 

Highlights of GAO-08-1164T, a testimony 

before the Subcommittee on 

Management, Investigations, and

Oversight, Committee on Homeland 

Security, House of Representatives 

Since it was created in 2003, the 

Department of Homeland Security

(DHS) has obligated billions of 

dollars annually to meet its 

expansive homeland security 

mission. The department’s

acquisitions support complex and 

critical trade, transportation, 

border security, and information 

technology investments. In fiscal 

year 2007, DHS spent over $12

billion on procurements to meet

this mission including spending for

complex services and major

investments. 

Prior GAO work has found that 

while DHS has made some initial 

progress in developing its 

acquisition function since 2003, 

acquisition planning and oversight 

for procurement and major

acquisitions need improvement. 

This testimony discusses GAO’s 

findings in these areas and is based 

on GAO’s body of work on

acquisition management issues. 

What GAO Recommends

While GAO is making no new 

recommendations in the testimony, 

GAO has made numerous

recommendations over the past

several years to improve DHS’s 

acquisition management. DHS has 

generally concurred with these 

recommendations, but actions still 

need to be taken to fully address 

them. 

Recognizing the need to improve its acquisition outcomes, DHS has taken 

some steps to integrate disparate acquisition processes and systems that the 

component organizations brought with them when the department was 

formed. However, we have reported that more needs to be done to develop 

clear and transparent policies and processes for all acquisitions, and to 

develop an acquisition workforce to implement and monitor acquisitions. 

With regard to acquisition planning, DHS did not assess the risk of hiring 

contractors to perform management and professional support services that 

have the potential to increase the risk that government decisions may be 

influenced by, rather than independent from, contractor judgments. Planning 

for services procured through interagency and performance-based contracting 

methods was also lacking. For example, DHS did not always consider 

alternatives to ensure good value when selecting among interagency 

contracts. Shortcomings in DHS’s use of a performance-based approach for 

complex acquisitions included a lack of well-defined requirements, a complete

set of measurable performance standards, or both, at the time of contract 

award or the start of work. Contracts for several investments we reviewed 

experienced cost overruns, schedule delays, or less than expected

performance. 

Acquisition oversight also has consistently been identified as needing 

improvement. While the Chief Procurement Officer (CPO) has recently

implemented a departmentwide oversight program, evaluations of the 

outcomes of acquisition methods and contracted services have not yet been 

conducted. Further, the CPO continues to face challenges in maintaining the 

staffing levels needed to fully implement the oversight program, and CPO 

authority to ensure that components comply with the procurement oversight 

plan remains unclear. 

Selected Department of Homeland Security Missions and Assets

Baggage Screening Border Security Patrol National Security Cutter 

Source: DHS. 

To view the full product, including the scope 

and methodology, click on GAO-08-1164T. 

For more information, contact John P. Hutton 

at (202) 512-4841 or huttonj@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

Thank you for inviting me here today to discuss the Department of 

Homeland Security’s (DHS) progress and areas for improvement in 

managing acquisitions. Over the past several years, as DHS has been 

developing its acquisition function, it has spent billions of procurement 

dollars annually to meet its expansive homeland security mission. The 

department’s acquisition portfolio is broad and complex, supporting 

critical trade, transportation, border security, and information technology 

investments. In fiscal year 2006, more than 80 percent of DHS’s

procurement spending was for services, which can be more complex and 

require different approaches to acquire than purchases of goods. Our prior 

work has found that appropriate planning, structuring, and monitoring of 

acquisitions is critical to ensuring the services provided meet the 

government’s needs.1

 The growing complexity of contracting for 

technically difficult and sophisticated services increases the challenges of

setting appropriate requirements and effectively overseeing contractor 

performance. At the same time, other factors, such as pressure to get 

programs up and running, and technological challenges have impacted 

DHS’s ability to achieve good acquisition outcomes. 

My statement today is drawn from our body of work on DHS’s acquisition 

management. I will discuss DHS’s progress and areas for improvement in 

developing its acquisition function and DHS’s acquisition planning and 

oversight. Specifically, I will highlight relevant findings from our work on 

contractors hired to perform management and professional support 

services, and the use of selected procurement methods, such as 

interagency contracting and performance-based acquisitions. We 

conducted these performance audits in accordance with generally 

accepted government auditing standards. Those standards require that we

plan and perform the audit to obtain sufficient, appropriate evidence to 

provide a reasonable basis for our findings and conclusions based on our 

audit objectives. We believe that the evidence obtained provides a 

reasonable basis for our findings and conclusions based on our audit 

objectives. 

DHS has made some progress in acquisition management—recognizing the 

need to improve acquisition outcomes and taking some steps to organize Summary 

 1

For example, GAO, Defense Acquisitions: Tailored Approach Needed to Improve Service 

Acquisition Outcomes, GAO-07-20 (Washington, D.C.: Nov. 9, 2006).

Page 1 GAO-08-1164T 
and assess the acquisition function. However, we have reported that more 

needs to be done to develop clear and transparent policies and processes 

for all acquisitions and to develop an acquisition workforce to execute and 

monitor acquisitions. Additionally, our work has found that acquisition 

planning and oversight for procurement and major acquisitions need 

improvement. With regard to planning, we found that DHS did not assess 

the risk of hiring contractors to perform professional and management 

support services that have the potential to increase the risk that 

government decisions may be influenced by, rather than independent 

from, contractor judgments. For services procured through interagency

contracting, we found acquisition planning was lacking. DHS did not 

always consider alternatives to ensure good value when selecting among 

interagency contracts. We have also identified a number of shortcomings 

in DHS’s use of a performance-based approach for complex acquisitions.

Earlier this year, we reported that contracts for eight major investments at 

Coast Guard, Customs and Border Protection (CBP), and the 

Transportation Security Administration (TSA) did not always have welldefined requirements, a complete set of measurable performance 

standards, or both at the time of contract award or the start of work, and 

that these contracts experienced cost overruns, schedule delays, or did 

not otherwise meet performance expectations. With regard to oversight, 

while the Chief Procurement Officer (CPO) has recently implemented a 

departmentwide oversight program, evaluations of the outcomes of 

acquisition methods and contracted services have not yet been conducted. 

The CPO continues to face challenges in maintaining the staffing levels 

needed to fully implement the oversight program, and CPO authority to 

ensure that components comply with the procurement oversight plan 

remains unclear. 

DHS has some of the most extensive acquisition needs within the federal

government. In fiscal year 2007, DHS obligated about $12 billion to acquire 

goods and services ranging from the basic goods and services federal 

agencies purchase, such as information technology equipment and 

support, to more complex and unique acquisitions, such as airport security 

systems and Coast Guard ships. 

Background 

DHS and its component agencies have faced a number of challenges 

related to procuring services and major system acquisitions. When DHS 

was formed in 2003, it was responsible for integrating 22 agencies with 

disparate missions. Of these, only seven came with their own procurement 

offices, only some of which had also managed complex acquisitions such 

Page 2 GAO-08-1164T 
as the Coast Guard’s Deepwater program or TSA’s airport screening 

programs. 

While the Homeland Security Acquisition Manual and the Federal 

Acquisition Regulation (FAR) do not distinguish between the terms 

acquisition and procurement, DHS officials have noted that 

procurement—the actual transaction to acquire goods and services—is 

only one element of acquisition. The term acquisition can include the 

development of operational and life-cycle requirements, such as 

formulating concepts of operations, developing sound business strategies, 

exercising prudent financial management, assessing trade-offs, and 

managing program risks. 

We have identified three key performance areas for acquisition 

management: assessing and organizing acquisition functions to meet 

agency needs; developing clear and transparent policies and processes for 

all acquisitions; developing an acquisition workforce to implement and 

monitor acquisitions. Our prior work has shown that these are among the

key elements of an efficient, effective, and accountable acquisition 

function.2

 We testified in April 2008 that, despite its initial positive 

acquisition management efforts, several challenges remained.

3

 The 

following summarizes each of these three areas: 

DHS Has Made Some 

Progress in 

Acquisition 

Management 

• Assessing and organizing the acquisition function: Since it was 

created in 2003, DHS has recognized the need to improve acquisition 

outcomes, and has taken some steps to organize and assess the acquisition 

function. DHS has worked to integrate the disparate acquisition processes 

and systems that the component organizations brought with them when 

the department was created. To help assess acquisition management, in 

2005 the Department developed an oversight program. This program 

incorporates DHS policy, internal controls, and elements of an effective 

acquisition function.4

 This program has been partially implemented and

 2

GAO, Framework for Assessing the Acquisition Function at Federal Agencies, 

GAO-05-218G (Washington, D.C.: September 2005). 

3

GAO, Department of Homeland Security: Progress Made in Implementation of 

Management Functions, but More Work Remains, GAO-08-646T (Washington, D.C.: April 

9, 2008).

4

GAO, Department of Homeland Security: Progress and Challenges in Implementing the

Department’s Acquisition Oversight Plan, GAO-07-900 (Washington, D.C.: June 2007). 

Page 3 GAO-08-1164T 
monitors component-level performance through four recurring reviews: 

self-assessments; operational status; on-site; and acquisition planning. 

However, DHS has not yet accomplished its goal of integrating the 

acquisition function across the department. For example, the structure of 

DHS’s acquisition function creates ambiguity about who is accountable for 

acquisition decisions because it depends on a system of dual 

accountability and cooperation and collaboration between the CPO and 

the component heads. DHS officials stated in June 2007 that that they were

in the process of modifying the lines of business management directive to

clarify the CPO’s authority; however, this directive has yet to be approved. 

• Developing clear and transparent polices and processes: DHS had 

made some progress in this area but has generally not developed clear and 

transparent policies and processes for all acquisitions. Specifically, DHS 

put into place an investment review process in 2003 that adopts many 

acquisition best practices to help the department reduce risk and increase 

the chances for successful investment in terms of cost, schedule, and 

performance. However, in 2005, we found that the process did not include 

critical management reviews.5

 Further, our work has identified concerns 

with the implementation of the investment review process. In 2007, we 

reported that DHS had not fully implemented key practices of its 

investment review process to control projects. For example, we reported 

that DHS executives may not have the information they need to determine 

whether information technology investments are meeting expectations, 

which may increase the risk that underperforming projects are not 

identified and corrected in a timely manner.6

 We have ongoing work on the 

implementation of DHS’s investment review process scheduled to be 

released later this year. 

• Developing an acquisition workforce to implement and monitor 

acquisitions: DHS has taken initial steps needed to develop an acquisition 

workforce. In 2006, DHS reported significant progress in providing staff 

for the component contracting offices, though much work remained to fill 

the positions with qualified, trained acquisition professionals. DHS has 

also taken a positive step by authorizing additional staff for the CPO to 

provide staff for procurement oversight, program management and cost 

 5

GAO, Department of Homeland Security: Successes and Challenges in DHS’s Effort to

Create an Effective Acquisition Organization GAO-05-179 (Washington, D.C.: Mar. 29, 

2005). 

6

GAO, Information Technology: DHS Needs to Fully Define and Implement Policies and

Procedures for Effectively Managing Investments, GAO-07-424 (Washington, D.C.: April 

27, 2007).

Page 4 GAO-08-1164T 
analysis functions. We have ongoing work on DHS’s acquisition workforce 

scheduled to be released later this year. 

Our work on both services contracting and major investments has 

consistently identified the need for improved acquisition planning to better 

ensure taxpayer dollars are spent prudently. Acquisitions must be 

appropriately planned and structured to minimize the risk of the 

government receiving services that are over cost estimates, delivered late, 

and of unacceptable quality.7

 Specifically, we have emphasized the 

importance of clearly defined requirements to achieving desired results, 

and measurable performance standards to ensuring control and 

accountability. Too often, our work on federal acquisitions has reported 

that unrealistic, inadequate, or frequently changing requirements have left

the government vulnerable to wasted taxpayer dollars.8

 For services 

closely supporting inherently governmental functions, we found that DHS 

did not use risk assessment in its plans to hire contractors to provide these 

services.9

 For services procured through methods such as interagency and 

performance-based contracting, we found acquisition planning was 

lacking.10 For major systems, acquisition planning includes establishing 

well-defined requirements and ensuring appropriate resources, such as 

adequate staffing and expertise, are in place to manage the investments; 

yet we have consistently found that these key elements are not in place. 

While there are benefits to using contractors to perform services for the 

government—such as increased flexibility in fulfilling immediate needs—

we and others have raised concerns about the federal government’s 

increased reliance on contractor services. Of key concern is the risk 

Planning for 

Procurement and 

Major Acquisitions 

Need Improvement 

Inadequate Procurement 

Planning 

 7

GAO-07-20. 

8

GAO, Federal Acquisitions and Contracting: Systemic Challenges Need Attention, 

GAO-07-1098T (Washington, D.C.: July 17, 2007). 

9

GAO, Department of Homeland Security: Improved Assessment and Oversight Needed to

Manage Risk of Contracting for Selected Services, GAO-07-990 (Washington, D.C.:

September 2007). 

10GAO, Interagency Contracting: Improved Guidance, Planning, and Oversight Would 

Enable the Department of Homeland Security to Address Risks, GAO-06-996 (Washington,

D.C.: September 2006), and GAO, Department of Homeland Security: Better Planning and

Assessment Needed to Improve Outcomes for Complex Service Acquisitions, GAO-08-263 

(Washington, D.C.: April 2008).

Page 5 GAO-08-1164T 
associated with a contractor providing services that closely support 

inherently governmental functions: the loss of government control over 

and accountability for mission-related policy and program decisions. 

Professional and management support services, including program 

management and support services such as acquisition support, budget 

preparation, intelligence services, and policy development, closely support 

inherently governmental functions. To help ensure that the government 

does not lose control over and accountability for such decisions, 

longstanding federal procurement policy requires attention to the risk that

government decisions may be influenced by, rather than independent 

from, contractor judgments when contracting for services that closely 

support inherently governmental functions. This type of risk assessment is 

also part of the acquisition planning process. While DHS program officials 

generally acknowledged that their professional and management support 

services contracts closely supported inherently governmental functions, 

they did not assess the risk of contractors providing these services. The 

nine cases we reviewed in detail provided examples of cases in which 

contractors provided services integral to and comparable to those 

provided by government employees; contractors provided ongoing 

support; and contract requirements were broadly defined. These 

conditions need to be carefully monitored to help ensure the government

does not lose control over and accountability for mission related 

decisions. To improve DHS’s ability to manage the risk of selected services 

that closely support inherently governmental functions, as well as 

government control over and accountability for decisions, we 

recommended that DHS establish strategic-level guidance on and routinely 

assess the risk of using contractors for selected services and more clearly

define contract requirements. 

DHS’s use of interagency contracting—a process by which one agency 

uses another agency’s contracts and contracting services—is another area

we have identified acquisition planning was lacking. While interagency

contracting offers the benefits of efficiency and convenience, in January 

2005, we noted shortcomings and designated the management of 

interagency contracting as a governmentwide high-risk area. Our work on 

DHS’s use of interagency contracting showed that the department did not 

always select interagency contracts based on planning and analysis and 

instead made decisions based on the benefits of speed and convenience. 

We found that DHS conducted limited evaluation of contracting 

alternatives to ensure good value when selecting among interagency

contracts. While interagency contacting is often chosen because it requires

less planning than establishing a new contract, evaluating the selection of 

an interagency contract is important because not all interagency contracts 

Page 6 GAO-08-1164T 
provide good value when considering both timeliness and total cost. 

Although DHS guidance has required planning and analysis of alternatives 

for all acquisitions since July 2005, we found that it was not conducted for 

the four cases in our review for which it was required. To improve the 

management of interagency contracting, we recommended that DHS 

develop consistent, comprehensive guidance and training and establish 

criteria to consider in selecting an interagency contract. 

To help improve service acquisition outcomes, federal procurement policy 

calls for agencies to use a performance-based approach to the maximum 

extent practicable. This approach includes: a performance work statement 

that describes outcome oriented requirements, measurable performance 

standards, and quality assurance surveillance. In using a performancebased approach, the FAR requires contract outcomes or requirements to 

be well-defined, that is, providing clear descriptions of results to be 

achieved. Our prior reviews of complex DHS investments using a 

performance-based approach point to a number of shortcomings. For 

example, in June 2007, we reported that a performance-based contract for 

a DHS financial management system, eMerge2, lacked clear and complete

requirements, which led to schedule delays and unacceptable contractor 

performance.11 Ultimately, the program was terminated after a $52 million 

investment. The DHS Inspector General has also indicated numerous 

opportunities for DHS to make better use of sound practices, such as welldefined requirements.12

Consistent with these findings, our 2008 report on performance-based 

acquisitions, for which we reviewed contracts for eight major investments 

at Coast Guard, CBP, and TSA, found that contracts for investments that 

did not have well-defined requirements, or a complete set of measurable 

performance standards, or both, at the time of contract award or the start 

of work experienced cost overruns, schedule delays, or did not otherwise 

meet performance expectations.13 In contrast, service contracts for 

Major Investments Using a 

Performance-Based 

Approach 

 11GAO, Homeland Security: Departmentwide Integrated Financial Management Systems 

Remain a Challenge, GAO-07-536 (Washington, D.C.: June 21, 2007).

12See for example, Department of Homeland Security Inspector General, Major 

Management Challenges Facing the Department of Homeland Security, OIG-08-11 

(January 2008), and Department of Homeland Security Inspector General, Transportation 

Security Administration’s Information Technology Managed Services Contract, OIG-06-

23 (February 2006). 

13GAO-08-263.

Page 7 GAO-08-1164T 
investments that had well-defined requirements linked to measurable 

standards performed within budget meeting the standards in all cases 

where contractors had begun work. For example, TSA’s Screening 

Partnership Program improved its contracted services at the San 

Francisco International Airport to incorporate well-defined requirements 

linked to clearly measurable performance standards and delivered 

services within budget. To improve the outcomes of performance-based 

acquisitions, we recommended that DHS improve acquisition planning for

requirements for major complex investments to ensure they are welldefined, and develop consistently measurable performance standards 

linked to those requirements. Following are examples of complex 

investments with contracts that did not have well-defined requirements or 

complete measurable performance standards and did not meet cost, 

schedule, or performance expectations. 

Contracts for systems development for two CBP major investments— 

Automated Commercial Environment (ACE) and Secure Border Initiative 

(SBInet)—lacked both well-defined requirements and measurable 

performance standards prior to the start of work and both experienced

poor outcomes. The first, for DHS’s ACE Task Order 23 project—a trade 

software modernization effort—was originally estimated to cost $52.7 

million over a period of approximately 17 months.14 However, the program 

lacked stable requirements at contract award and, therefore, could not 

establish measurable performance standards and valid cost or schedule 

baselines for assessing contractor performance. Software requirements 

were added after contract award, contributing to a project cost increase of

approximately $21.1 million, or 40 percent, over the original estimate. 

Because some portions of the work were delayed to better define 

requirements, the project is not expected to be completed until January 

2011—over three years later than originally planned. 

The second, Project 28 for systems development for CBP’s SBInet—a 

project to help secure a section of the United States-Mexico border using a 

surveillance system—did not meet expected outcomes due to a lack of 

 14Begun in 2001, ACE is intended to replace and supplement existing cargo processing 

technology and will be developed and deployed in a series of increments. The goals of ACE 

include (1) supporting border security by enhancing analysis and information sharing with 

other government agencies and providing CBP with the means to decide before a shipment 

reaches the border if it should be targeted or expedited and (2) streamlining timeconsuming and labor-intensive tasks for CBP personnel and the trade community through a

national trade account and single Web-based interface. Task Order 23 was the sole focus of 

our review. 

Page 8 GAO-08-1164T 
both well-defined requirements and measurable performance standards. 

CBP awarded the Project 28 contract planned as SBInet’s proof of concept 

and the first increment of the fielded SBInet system before the overall 

SBInet operational requirements and system specifications were finalized. 

More than 3 months after Project 28 was awarded, DHS’s Inspector 

General reported that CBP had not properly defined SBInet’s operational 

requirements and needed to do so quickly to avoid rework of the 

contractor’s systems engineering. We found that several performance 

standards were not clearly defined to isolate the contractor’s performance 

from that of CBP employees, making it difficult to determine whether any

problems were due to the contractor’s system design, CBP employees, or 

both. As a result, it was not clear how CBP intended to measure 

compliance with the Project 28 standard for probability of detecting 

persons attempting to illegally cross the border. Although it did not fully 

meet user needs and its design will not be used as a basis for future SBInet 

development, DHS fully accepted the project after an 8-month delay.

15 In 

addition, DHS officials have stated that much of the Project 28 system will 

be replaced by new equipment and software. However, Project 28 is just 

one part of the entire Secure Border Initiative, and our recent work has 

noted that requirements and testing processes for the initiative have not 

been effectively managed, and important aspects of the program remain in 

flux.16

Additionally, our work has found that the Coast Guard’s Deepwater 

Program, ongoing since the late 1990s, is intended to replace or modernize 

15 major classes of Coast Guard assets. In March 2007, we reported that 

the Coast Guard’s Deepwater contract had requirements that were set at 

unrealistic levels and were frequently changed.17 For some of the 

Deepwater assets, this resulted in cost escalation, schedule delays, and 

reduced contractor accountability over a period of many years of 

producing poor results such as ships that experienced serious structural 

defects. In light of these serious performance and management problems, 

 15GAO, Secure Border Initiative: Observations on the Importance of Applying Lessons 

Learned to Future Projects, GAO-08-508T (Washington D.C.: Feb. 27, 2008).

16GAO, Secure Border Initiative: DHS Needs to Address Significant Risks in Delivering 

Key Technology Investment, GAO-08-1148T (Washington D.C.: Sept. 10, 2008). 

17GAO, Coast Guard: Status of Efforts to Improve Deepwater Program Management and 

Address Operational Challenges, GAO-07-575T (Washington D.C.: Mar. 8, 2007). 

Page 9 GAO-08-1164T 
Coast Guard leadership has changed its approach to this acquisition.18 It 

has taken over the lead role in systems integration, which was formerly 

held by a contractor. Formerly, the contractor had significant program 

management responsibilities, such as contractual responsibility for 

drafting task orders and managing the system integration of Deepwater as

a whole. Coast Guard project managers and technical experts now hold 

the greater balance of management responsibility and accountability for 

program outcomes. Coast Guard officials have begun to hold competitions 

for Deepwater assets outside of the lead system integrator contract, and 

cost and schedule information is now captured at a level that has resulted 

in improved visibility, such as the ability to track and report cost breaches

for assets. The Coast Guard has also begun to follow a disciplined project 

management framework, requiring documentation and approval of 

decisions at key points in a program’s life cycle. However, like other 

federal agencies, the Coast Guard has faced challenges in building an 

adequate government workforce and is relying on support contractors in 

key positions, such as cost estimators and contract specialists. 

Our work on contractors performing services closely supporting 

inherently governmental functions found that DHS program officials and 

contracting officers were not aware of federal requirements for enhanced

oversight for these types of services. Both the FAR and the Office of 

Management and Budget’s Office of Federal Procurement Policy (OFPP) 

policy state that when contracting for these types of services a sufficient

number of qualified government employees assigned to plan and oversee

these contractor activities is needed to maintain control and 

accountability. For the nine cases we reviewed, the level of oversight 

provided did not always help ensure accountability for decisions or the 

ability to judge whether contractors were performing as required.19 We 

found cases in which the DHS components lacked the capacity to oversee 

contractor performance due to limited expertise and workload demands. 

DHS components were also limited in their ability to assess contactor 

performance in a way that addressed the risk of contracting for services 

that closely support inherently governmental functions. Assessing 

Oversight 

Consistently 

Identified as Needing 

Improvement 

 18GAO, Coast Guard: Change in Course Improves Deepwater Management and Oversight, 

but Outcome Still Uncertain,GAO-08-745 (Washington, D.C.: June 24, 2008).

19FAR section 37.114, Special Acquisition Requirements; OFPP Policy Letter 93-1:

Management Oversight of Service Contracting, Office of Federal Procurement Policy, May

18, 1994. 

Page 10 GAO-08-1164T 
contractor performance requires a plan that outlines how services will be 

delivered and establishes measurable outcomes. However, none of the 

oversight plans and contract documents we reviewed contained specific 

measures for assessing contractor performance of selected services. To 

address this deficiency, we recommended that DHS assess the ability of its 

workforce to provide sufficient oversight when using these types of 

contracted services. 

Limited oversight also is due in part to insufficient data to monitor 

acquisitions. Our work on procurement methods, such as interagency 

contracting and performance-based acquisition, has found that DHS does 

not systematically monitor its use of these contracts to assess whether 

these methods are being properly managed, or to assess costs, benefits, or 

other outcomes of these acquisition methods. With regard to interagency 

contracting, we found that DHS was not able to readily provide data on the 

amounts spent through different types of contracts or on the fees paid to 

other agencies for the use of their contracting services or vehicles. This 

lack of information means that DHS cannot assess whether the 

department could achieve savings through using another type of 

contracting vehicle. We similarly found that DHS did not have reliable data 

on performance-based acquisitions to facilitate required reporting, 

informed decisions, and analysis of acquisition outcomes. For example, 

our review of contracts at the Coast Guard, CBP, Immigration and 

Customs Enforcement (ICE), and TSA showed that, about 51 percent of 

the 138 contracts we identified in FPDS-NG as performance-based had 

none of the required performance-based elements: a performance work 

statement, measurable performance standards, and a method of assessing 

contractor performance against performance standards. The unreliability 

of these data makes it difficult for DHS to be able to accurately report on

governmentwide performance targets for performance-based acquisitions. 

We have recommended that DHS work to improve the quality of FPDS-NG 

data so that DHS can more accurately identify and assess the quality of the 

use and outcomes of various procurement methods. 

Inaccurate federal procurement data is not unique to DHS and is a longstanding governmentwide concern. Our prior work and the work of the 

General Services Administration’s Inspector General have identified issues 

Page 11 GAO-08-1164T 
with the accuracy and completeness of FPDS and FPDS-NG data,20 and 

OMB has stressed the importance of submitting timely and accurate 

procurement data to FPDS-NG. The Acquisition Advisory Panel21 has also 

raised concerns about the accuracy of FPDS-NG data.22 These 

circumstances illustrate the magnitude of the challenge DHS faces in 

developing timely and accurate data to monitor acquisitions. 

To improve procurement oversight, the CPO established and has 

implemented a departmentwide program to provide comprehensive insight 

into each component’s programs and disseminate successful management 

techniques throughout DHS.23 This program, which is based on a series of 

component-level reviews, was designed with the flexibility to address 

specific procurement issues. As such, it could be used to address areas 

such as performance-based acquisitions, interagency contracting, and the 

appropriate use of contractors providing services closely supporting 

inherently governmental functions. Some of the four key oversight reviews 

have begun under this program, but management assessments, or 

evaluation of the outcomes of acquisition methods and contracted 

services, have not been conducted. Our work has found that the CPO 

continues to face challenges in maintaining the staffing levels needed to

fully implement the oversight program, and CPO authority to ensure that 

components comply with the procurement oversight plan remains unclear. 

Improving acquisition outcomes has been an ongoing challenge since DHS 

was established in 2003. Our work has consistently noted that sound 

acquisition planning, including clearly defining requirements, and ensuring 

adequate oversight are hallmarks of successful service acquisitions. A 

sufficient acquisition workforce is also key to properly managing 

acquisitions. Our body of work has also included many recommendations 

Conclusion 

 20For example, GAO, Reliability of Federal Procurement Data, GAO-04-295R (Washington,

D.C.: Dec. 30, 2003); GAO, Improvements Needed to the Federal Procurement Data

System-Next Generation, GAO-05-960R (Washington, D.C.: Sept. 27, 2005); and General 

Services Administration Inspector General, Review of the Federal Procurement Data

System-Next Generation (FPDS-NG), Report Number A040127/O/T/F06016 (March 2006). 

21Authorized by section 1423 of the Services Acquisition Reform Act of 2003 as part of the

National Defense Authorization Act of 2004. Pub. L. No. 108-136. 

22Report of the Acquisition Advisory Panel to the Office of Federal Procurement Policy and 

the United States Congress. January 2007. 

23GAO-07-900. 

Page 12 GAO-08-1164T 
to the Secretary of Homeland Security to take actions aimed at improving 

acquisition management, planning, and oversight. While DHS has generally 

concurred with our recommendations, the department has not always 

stated how the underlying causes of the deficiencies we have identified 

will be addressed. Until the department takes needed action to address 

these causes, it will continue to be challenged to make the best use of its 

acquisition dollars. 

Mr. Chairman, this concludes my prepared statement. I would be happy to

respond to any questions that you or other members of the subcommittee 

may have at this time. 

For further information about this statement, please contact me at (202) 

512-4841 or huttonj@gao.gov. Contact points for GAO’s Offices of 

Congressional Relations and Public Affairs are listed on the last page of

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