Department of Homeland Security

Office of Inspector General 

Better Oversight Needed of Support Services 


Contractors in Secure Border Initiative Programs
 

OIG-09-80 June 2009 
 

Office of Inspector General 

U.S. Department of Homeland Security 

Washington, DC 25028 

June 17, 2009 

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 as part of our oversight responsibilities to promote economy, 

efficiency, and effectiveness within the department. 

The attached report presents the results of our review to determine whether U.S. Customs 

and Border Protection (CBP) has established adequate controls and effective oversight of 

contract workers providing support services to Secure Border Initiative programs. It is 

based on interviews with CBP employees, direct observations, and a review of applicable 

documents. 

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

office, and have been discussed in draft with those responsible for implementation. We 

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

express our appreciation to all who contributed to the preparation of this report. 

Richard L. Skinner 


Inspector General
 
Table of Contents/Abbreviations 


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

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

Results of Audit ...................................................................................................................3
 

Contractors Performing Inherently Governmental Functions........................................3 


Contractor Oversight Needed ........................................................................................4 


Continued Overreliance on Contractors Poses Program Risks......................................5 


Recommendations..........................................................................................................6 


Management Comments and OIG Analysis ..................................................................6 


Appendixes 

Appendix A: Purpose, Scope, and Methodology..........................................................9 


Appendix B: Management Comments to the Draft Report ........................................10 


Appendix C: Major Contributors to this Report .........................................................14 


Appendix D: Report Distribution................................................................................15 


Abbreviations 

CBP U.S. Customs and Border Protection 


COTR contracting officer’s technical representative 


DHS Department of Homeland Security 


SBI Secure Border Initiative 


Better Oversight Needed of Support Services Contractors in Secure Border Initiative Programs 
OIG
 

Department of Homeland Security 

Office of Inspector General 

Executive Summary 

This report presents the results of our review to determine whether 

U.S. Customs and Border Protection has established adequate 

controls and effective oversight of contract workers providing 

support services to Secure Border Initiative programs. 

U.S. Customs and Border Protection has not established adequate 

controls and effective oversight of contract workers responsible for 

providing Secure Border Initiative program support services. 

Because of the Department of Homeland Security’s aggressive 

Secure Border Initiative program schedule coupled with shortages 

of government program managers and acquisition specialists, in 

the early years of the Secure Border Initiative program, U.S. 

Customs and Border Protection relied on contractors to fill the 

skills gap and get the program underway. U.S. Customs and 

Border Protection continues to rely heavily on contract personnel, 

who comprise more than 50% of the Secure Border Initiative 

workforce. Furthermore, U.S. Customs and Border Protection has 

not clearly distinguished between roles and responsibilities that are 

appropriate for contractors and those that must be performed by 

government employees. U.S. Customs and Border Protection also 

has not provided an adequate number of contracting officer’s 

technical representatives to oversee support services contractors’ 

performance. As a result, contractors are performing functions that 

should be performed by government workers. This heavy reliance 

on contractors increases the risk of U.S. Customs and Border 

Protection losing control of decision making in Secure Border 

Initiative program management. 

Although U.S. Customs and Border Protection has recently taken 

steps to improve Secure Border Initiative program management by 

hiring knowledgeable and experienced program managers, 

additional controls are needed to ensure effective oversight of 

support contractor activities. We are recommending that U.S. 

Customs and Border Protection use only federal employees to 

perform inherently governmental functions, and hire additional 

contracting officer’s technical representatives to oversee contractor 

performance. 

Better Oversight Needed of Support Services Contractors in Secure Border Initiative Programs 

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Background 

In 2005, the Secure Border Initiative (SBI) was announced as a 

comprehensive, department-wide effort to secure the Nation’s 

borders. The program was designed to help the department 

achieve its goal of gaining operational control of the southwest 

border within five years through new and improved strategies and 

programs, including (1) enhanced use of people, technology, and 

processes; (2) upgraded infrastructure, such as roads, fencing, and 

Border Patrol facilities; and (3) transportation of detainees from 

Border Patrol facilities to strategically located detention centers. 

U.S. Customs and Border Protection (CBP) was given 

responsibility for program planning, management, and contract 

administration. 

The department established aggressive timeframes for completing 

significant portions of SBI, such as broad deployment of detection 

and surveillance technology along the southwest border in 2008. 

However, at the start of the program, neither CBP nor the 

Department of Homeland Security (DHS) as a whole had enough 

program managers and acquisition specialists to plan and manage 

such a large-scale, complex program. To fill the skills gap and get 

the program underway, CBP made extensive use of contractor 

support services. CBP established an SBI program management 

office as well as an acquisition office directly responsible for 

administering SBI contracts. Table 1 shows the number and mix 

of contractor and government personnel assigned to SBI program 

management since the program’s inception. 

Table 1: Contract and Government Employees in SBI Programs 

Contract 

Government 

Total 

Program Startup May 2007 November 2007 March 2008 November 2008* 

Number 

129 

37

166 

% 

78 

22 

Number

120 

89

209 

% 

57 

43 

Number 

174 

152

326 

% 

53 

47 

Number

175 

167

342 

% 

51 

49 

Number

136 

132

268 

% 

51 

49 

*The workforce reduction in November 2008 reflects the transportation program’s removal from 

SBI. 

CBP relied on monthly progress reports as its primary mechanism 

for overseeing support service contactors’ performance. 

Better Oversight Needed of Support Services Contractors in Secure Border Initiative Programs 

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Results of Audit 

CBP has not established adequate controls and effective oversight 

of contract workers responsible for providing SBI program support 

services. Given the department’s aggressive SBI program 

schedule and shortages of program managers and acquisition 

specialists, CBP relied on contractors to fill the staffing needs and 

get the program underway. However, CBP has not clearly 

distinguished between roles and responsibilities that are 

appropriate for contractors and those that must be performed by 

government employees. CBP also has not provided an adequate 

number of contracting officer’s technical representatives (COTRs) 

to oversee support services contractors’ performance. As a result, 

contractors are performing functions that should be performed by 

government workers. This heavy reliance on contractors increases 

the risk of CBP relinquishing its responsibilities of SBI program 

decisions to support contractors while remaining responsible and 

accountable for program outcomes. 

Contractors Performing Inherently Governmental 

Functions 

According to the Federal Acquisition Regulation, agencies should 

not use contractors to perform inherently governmental functions, 

such as drafting congressional testimony or responding to 

congressional correspondence and independent auditor reports. 

The Federal Acquisition Regulation also provides examples of 

functions that are generally not considered inherently 

governmental, but because of their nature, the manner in which the 

contractor performs them, or the manner in which the government 

administers the contract may approach the category of inherent 

governmental function. Such functions may involve or be related 

to planning, reorganization, acquisition support, contract 

management assistance, development of statements of work, and 

agency representation.1 

Despite these regulations, CBP did not clearly distinguish between 

roles and responsibilities that were appropriate for contractors and 

those that must be performed by government workers because of 

the rush to fill program management positions and get SBI started. 

SBI progress reports for May and June 2007 showed that the 

largest support contractor performed activities that should have 

been the responsibility of government employees, such as drafting 

1

 FAR section 7.503, Inherently Governmental Functions. 

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a statement for presentation by the Border Patrol chief and the SBI 

executive director at a Congressional hearing. 

Similarly, a May 2007 progress report for the same support 

contractor showed that it performed functions that are generally 

not considered to be inherently governmental functions. However, 

these services and actions may approach that category because of 

the nature of the function, the manner in which the contractor 

performed the contract, or the manner in which the Government 

administered contractor performance. These activities included the 

following: 

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Facilitating the planning and update of the SBI program 

management task order; 

Preparing an initial draft of the statement of work for 

command, control, communications, and intelligence design; 

Helping draft the acquisition plan for the command, control, 

communications, and intelligence common operating picture; 

and 

Providing coverage in the absence of SBI fencing and common 

operating picture project managers. 

The Federal Acquisition Regulation cautions that contracts 

supporting government policymaking or decisionmaking require 

special management attention to ensure that contractors do not 

perform inherently governmental functions and that government 

officials properly exercise their authority.2 

Contractor Oversight Needed 

SBI program management did not have enough COTRs to provide 

oversight of SBI support contractors. The shortage of COTRs 

resulted in the following situations: 

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�	 

�	 

�	 

One contract without an assigned COTR; 

The contracting officer responsible for administering all 18 

support services contracts also assigned as their COTR; 

The executive director, SBI Acquisition Office, serving as 

COTR; and 

A program manager responsible for managing the SBInet Test 

and Evaluation Plan assigned as COTR for a support services 

contract that supplied more than 100 workers across SBI 

2

 FAR section 37.114, Special Acquisition Requirements. 

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program offices allowing only 1 hour per week for COTR 

responsibilities. 

The Office of Management and Budget specifies as a best practice 

in contract administration that COTRs function as the “eyes and 

ears” of their contracting officers, monitoring technical 

performance and reporting any potential or actual problems that 

arise. COTRs must stay in close communication with the 

contracting officers, relaying any information that may affect 

contractual commitments and requirements. 

COTRs assigned to SBI support services contracts did not take 

action or notify the contracting officers when progress reports 

showed that contractors were performing prohibited or 

questionable activities. Further, as the number of SBI contractors 

increased, the COTRs had little time for contract oversight duties 

beyond reviewing contractors’ time charges and travel claims. 

COTRs assigned to SBI support services contracts told us that, 

because they were stretched so thin, the only way they would know 

whether a contractor was performing an inherently governmental 

function would be when a program manager brought it to their 

attention. 

Continued Overreliance on Contractors Poses 

Program Risks 

Three years into the SBI program, CBP still has not reevaluated the 

mix of contractors and government employees assigned to SBI 

programs or delineated roles and responsibilities to ensure that 

contractors are not performing inherently governmental functions. 

Nor has CBP assigned an adequate number of COTRs to oversee 

support services contractors’ performance. Although in the past 

year CBP has hired a number of knowledgeable and experienced 

program managers and contracting officers, contractors still 

comprise more than 50% of the total SBI workforce. 

With continued heavy reliance on contractor support services, CBP 

risks losing control of program decisions while remaining 

accountable for mission results. According to a Government 

Accountability Office report, the closer activities performed by 

contractors come to supporting inherently governmental functions, 

the greater the risk that contractors can influence decisionmaking.3 

3 Improved Assessment and Oversight Needed to Manage Risk of Contracting for Selected Services, GAO07-990, September 2007. 

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Undue contractor influence with limited government oversight and 

control can result in decisions that are not in the best interest of the 

government and can increase vulnerability to waste, fraud, abuse, 

and mismanagement. 

Recommendations 

We recommend the Commissioner, U.S. Customs and Border 

Protection: 

Recommendation #1: Distinguish between the roles and 

responsibilities of SBI contractors and those of government 

employees to ensure that only the latter are performing inherently 

governmental functions. 

Recommendation #2: Assign additional COTRs to oversee SBI 

support services contractor performance. 

Management Comments and OIG Analysis 

CBP provided general and specific comments to the report and 

recommendations. We summarized and addressed these comments 

below. A copy of CBP’s written response is included in Appendix 

B. 

CBP’s General Comments: 

CBP management stated that the interval between our field work 

and draft report resulted in the report containing outdated 

information and omitting significant progress made by the program 

office. CBP stated that inherently governmental positions and 

functions were identified as required by regulations. In addition, 

CBP stated that prohibited and questionable activities attributed to 

contract workers did not occur. 

OIG Analysis: CBP accurately reported the timing of our field 

work and draft report. We based our audit findings and 

conclusions on information provided by CBP during field work. 

However, CBP did not provide information we specifically 

requested during field work, such as the annual inventories of 

inherently governmental functions required by Office of 

Management and Budget Circular A-76. SBI officials said they 

did not know whether the 2007 inventory included SBI since the 

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inventory was conducted within a few months of the SBI 

program’s initiation. Further, SBI officials did not provide a longrange plan for use of contractor support services or identify the 

appropriate mix of contractor and government workers. CBP did 

not provide this information until after completion of our field 

work, in response to a draft of this report. 

The additional information provided by CBP corroborated the 

findings and conclusions we developed during field work. For 

example, the SBI Mission Action Plan, completed in February 

2008, stated that SBI leadership had difficulty assessing and 

finalizing human capital needs. A later version of the plan 

extended the deadline for corrective action to clarify roles and 

responsibilities of acquisition management positions to September 

30, 2009. Similarly, the Review of Organizational and Staffing 

Plans completed by CBP’s Office of Human Resources 

Management in April 2008 stated that SBI management was 

reluctant to discuss its organization structure and staffing plans and 

needed to clearly define roles and responsibilities of operational 

personnel. 

Our finding that contractors performed prohibited and questionable 

activities was based on documents provided by CBP. Monthly 

Progress Reports identified CBP support services contractors 

performing prohibited and questionable activities that should have 

been brought to the attention of the Contracting Officer. We could 

not trace these progress reports to specific workers or locations in 

order to determine whether the prohibited and questionable 

activities were accurately reported. Also, CBP could not 

demonstrate that the prohibited and questionable activities were 

brought to the attention of the Contracting Officer or that steps 

were taken to prevent similar questionable activities from 

occurring in the future. 

CBP’s Comments to Recommendation #1: 

CBP concurred with this recommendation and said that it had 

provided documentation to the Office of Management and Budget 

distinguishing between the roles and responsibilities of contractors 

and government employees. 

OIG Analysis: We recognize that CBP has actions underway to 

identify roles and responsibilities of acquisition positions, but these 

actions do not satisfy the intent of our recommendation. Office of 

Management and Budget Circular A-76 requires each federal 

agency to prepare and submit an inventory of commercial activities 

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performed by federal employees; however, the inventory does not 

include activities performed by contractors. Further, SBI Strategic 

Human Capital Plans and Border Security, Fencing, Infrastructure 

and Technology Expenditure Plans described contractor activities 

in broad, general terms. The resource review performed by the 

Office of Human Resources supported our recommendation to 

clarify roles and responsibilities of operational personnel. 

This recommendation will remain open until CBP identifies the 

roles and responsibilities of the SBI workforce, including 

contractors. 

CBP’s Comment to Recommendation #2: 

CBP concurred with this recommendation and reported that it has 

increased its number of COTRs to 47. 

OIG Analysis: We recognize the improvements CBP has made in 

increasing the number of COTRs to oversee the current contract. 

However, CBP has not finalized its Strategic Human Capital 

Framework, Plan of Action and Milestones, and Long-Range 

Human Capital Plan to identify all of the competencies and skill 

sets it will need to sustain operations and oversee future contract 

actions as the SBInet Program evolves and progresses. 

This recommendation will remain open until the Strategic Human 

Capital Framework, Plan of Action and Milestones, and LongRange Human Capital Plan are finalized. 

Better Oversight Needed of Support Services Contractors in Secure Border Initiative Programs 

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Appendix A 

Purpose, Scope, and Methodology 

The objective of our review was to determine whether U.S. Customs and 

Border Protection (CBP) has established adequate controls and effective 

oversight of contract workers providing support services to Secure Border 

Initiative (SBI) programs. 

We interviewed government officials and contract employees at CBP 

headquarters in Washington, DC. We reviewed 18 service contracts and 

interagency agreements (11 labor and materials contracts, 6 estimated cost 

contracts, and 1 cost reimbursable contract) in place between October 1, 

2006, and March 31, 2008. We developed an understanding of internal 

controls over service contracts and interagency agreements by focusing on 

risks identified in prior Government Accountability Office reports and 

congressional hearings and CBP’s procedures to mitigate those risks; 

reviewing pertinent sections of the Federal Acquisition Regulation; and 

interviewing CBP officials responsible for administering the contracts and 

agreements. The understanding gained was used to plan the audit and 

determine the nature, timing, and extent of tests to be performed. In 

addition, we reviewed the methodology used and progress made in 

building organizational capacity at the SBI Program Executive Office; the 

SBInet, Tactical Infrastructure, and Transportation Program Management 

Offices; and the SBI Acquisition Office. 

We conducted this performance audit between September 2007 and June 

2008 according to 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. The evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. 

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Appendix B 

Management Comments to the Draft Report 

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Appendix B 

Management Comments to the Draft Report 

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Appendix B 

Management Comments to the Draft Report 

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Appendix B 

Management Comments to the Draft Report 

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Appendix C 

Major Contributors to this Report 

Mark Ferguson, Audit Manager 

Patricia Alcaniz, Auditor 

Frank Lucas, Auditor 

Vanessa Santos, Auditor 

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Appendix D 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff for Operations 

Chief of Staff for Policy 

Acting General Counsel 

Executive Secretariat 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

Under Secretary for Management 

Chief Procurement Officer 

DHS Audit Liaison 

Acting Commissioner, Customs and Border Protection 

Director, SBI Program Executive Office 

Director, SBI Acquisition Office 

OIG Liaison, CBP 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as 

appropriate 

Better Oversight Needed of Support Services Contractors in Secure Border Initiative Programs 

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ADDITIONAL INFORMATION AND COPIES 

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fax your request to (202) 254-4305, or visit the OIG web site at www.dhs.gov/oig. 

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