Department of Homeland Security 

Office of Inspector General 

Update on DHS’ Procurement and 
 

Program Management Operations 
 

OIG-11-91 June 2011 
Office ofInspector General 

U.S. Department of Homeland Security 

Washington, DC 20528 

Homeland 

Security 

JUN 17 2011 

Preface 

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

established by the Homeland Security Act of2002 (Public Law 107-296) by amendment 

to the Inspector General Act of1978. 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. 

This report addresses progress made toward implementing recommendations from our 

prior report, OIG-05-53, Department ofHomeland Security's Procurement and Program 

Management Operations, issued in September 2005. The report's conclusions and 

suggested areas of improvement are based on interviews with employees and officials of 

relevant agencies and institutions, direct observations, and a review of applicable 

documents. 

The findings 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 of those who contributed to the preparation of this report. 

~;f~ Anne L. Richards 

Assistant Inspector General for Audits 
 

Table of Contents 
 

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

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


Results of the Review ..........................................................................................................3 
 

Implementation of Recommendations ...........................................................................3 
 

Procurement Management .......................................................................................3 
 

Program Management ..............................................................................................6 
 

Procurement Ethics ..................................................................................................8 
 

Continuing Efforts by DHS ...........................................................................................9 
 

Management Comments and OIG Analysis ................................................................10 
 

Appendixes 

Appendix A: Purpose, Scope, and Methodology.......................................................11 
 

Appendix B: Management Comments to the Draft Report .......................................12 
 

Appendix C: Major Contributors to this Report........................................................13 
 

Appendix D: Report Distribution ..............................................................................14 
 

Abbreviations 

AMD Acquisition Management Directive 
 

APCP Acquisition Professional Career Program
 


APMD Acquisition Program Management Division 
 

CAE Chief Acquisition Executive 
 

CPO Chief Procurement Officer 
 

DHS Department of Homeland Security 
 

FY fiscal year 
 

GAO Government Accountability Office 
 

HCA Head of Contracting Activity 
 

OCPO Office of the Chief Procurement Officer 
 

OIG Office of Inspector General 
 

PM program manager 
 

S&T Science and Technology Division 
 

USM Under Secretary for Management 
 
OIG
 


Department of Homeland Security 

Office of Inspector General 

Executive Summary 

In 2005, the Office of Inspector General, in coordination with the 

Chief Procurement Officer, assessed the Department of Homeland 

Security’s procurement and program management operations. The 

report made five recommendations to address the vulnerabilities 

identified in the department’s acquisition program. We performed 

this review to determine the department’s progress in 

implementing previous recommendations. 

The department has made progress in its procurement and program 

management operations. It has implemented all five report 

recommendations to enhance oversight, establish the Acquisition 

Program Management Division, and address procurement staff 

shortages and staff authority. 

We have not made any additional recommendations; however, we 

have identified two areas for improvement: mandatory 

procurement ethics training and a standardized method for 

reporting potential procurement ethics violations. 

Update on DHS’ Procurement and Program Management Operations 


Page 1 

Background 

In 2003, the Government Accountability Office (GAO) placed 

Implementing and Transforming the Department of Homeland 

Security, which includes acquisition integration, on its High Risk 

list. GAO raised concerns about the Department of Homeland 

Security’s (DHS) efforts to integrate the acquisition, procurement, 

and program management-related functions of 22 independent 

agencies into a single department. In 2011, GAO said that this 

area will remain on the list until DHS implements several 

improvements, including validating required acquisition 

documents at major milestones in the acquisition review process. 

In September 2005, the Office of Inspector General (OIG) 

published report OIG-05-53, Department of Homeland Security’s 

Procurement and Program Management Operations. Its purpose 

was to identify significant weaknesses that threaten the integrity of 

the department’s procurement and program management 

operations. We made five recommendations to address the 

vulnerabilities in the department’s acquisition operations. DHS 

concurred with all five recommendations and agreed to move 

ahead with expanded procurement ethics training, enhancement of 

oversight, and establishment of a departmental program 

management office, and to address procurement staff shortages and 

staff authority. 

In fiscal year (FY) 2010, DHS awarded more than $13 billion for 

more than 88,000 procurement actions. The Under Secretary for 

Management (USM) is responsible for the overall DHS acquisition 

process. The USM delegates the responsibility for effective 

department-wide procurement policies and procedures, including 

procurement integrity, to the Chief Procurement Officer (CPO). 

The USM also delegates the responsibility for developing and 

implementing the governance processes and procedures for 

program management over DHS’ various acquisition programs to 

the Acquisition Program Management Division (APMD). 

Separation of the Office of CPO’s (OCPO) procurement 

management responsibilities for acquiring goods and services and 

APMD’s program management of the acquisition process provides 

a layered approach to DHS’ acquisition oversight. 

Since our 2005 report, DHS has implemented management 

directives and organizational changes, and developed acquisition 

training programs intended to identify inefficiencies in the 

acquisition process and prevent procurement ethics violations. 

Update on DHS’ Procurement and Program Management Operations 


Page 2 

Figure 1 is an overview of the actions DHS has taken since 2005 to 

improve its acquisition program. 

Figure 1. Milestones in DHS Procurement and Program Management 

Results of the Review 

The department has implemented all five of the prior report’s 

recommendations by addressing staffing issues and developing 

important oversight policies and guidance. These actions have 

improved and standardized DHS’ procurement and program 

management operations. During our review, we identified two 

additional areas for suggested improvement—mandatory 

procurement ethics training and standardized reporting for 

potential procurement ethics violations. 

Implementation of Recommendations 

DHS implemented the five recommendations in our prior report: 

two recommendations to improve procurement management, one 

recommendation for program management, and two 

recommendations for procurement ethics training and oversight. 

Procurement Management 

The two recommendations to improve procurement management 

were (1) that DHS optimize procurement organization resources 

Update on DHS’ Procurement and Program Management Operations 

Page 3 
and structure across the department, and (2) that DHS provide 

OCPO with sufficient staff and authority. 

Procurement Organization Resources and Structure 

In January 2011, DHS reorganized the reporting structure of the 

procurement management and program management functions to 

provide a layered approach to acquisition oversight. OCPO leads 

procurement management functions. USM leads program 

management functions. 

The 2011 acquisition structure allows components to maintain their 

own acquisition and procurement staff. A component Chief 

Acquisition Executive (CAE) is responsible for the program 

management of an acquisition. There are currently eight CAEs in 

DHS. They reside under the Chief Information Officer, Customs 

and Border Protection, Federal Emergency Management Agency, 

Immigration and Customs Enforcement, National Protection & 

Programs Directorate, Transportation Security Administration, 

United States Citizenship and Immigration Services, and the 

United States Coast Guard. 

A component Head of Contracting Activity (HCA) is responsible 

for the procurement of an acquisition. There are currently nine 

HCAs in DHS. They reside under Customs and Border Protection, 

Federal Emergency Management Agency, Federal Law 

Enforcement Training Center, Immigration and Customs 

Enforcement, Office of Procurement Operations, Office of 

Selective Acquisitions, Transportation Security Administration, 

United States Coast Guard, and the United States Secret Service. 

The CAE and the HCA report informally to USM and OCPO, 

respectively. The CAE and HCA acquisition structure, shown in 

Figure 2, is dependent on coordination between OCPO, USM, and 

DHS components. 

Update on DHS’ Procurement and Program Management Operations 


Page 4 

Figure 2. Relationship between HCA and CAE 

DHS Establishes OCPO’s Authority 

The Federal Acquisition Regulation establishes authority and 

statutory guidelines for all federal executive agencies on 

acquisition and procurement activities. In the 2005 report, we 

recommended that DHS provide OCPO with sufficient staff and 

authority to effectively conduct oversight of the department’s 

procurement activities. In 2005, DHS was establishing the 

Acquisition Oversight Program (Management Directive 0784), 

designating OCPO as responsible for ensuring the integrity of 

DHS’ acquisition process through the oversight of all DHS 

acquisitions. Additionally, OCPO has responsibility in multiple 

functional areas, including the establishment of acquisition and 

contract policies, systems, oversight and governance, workforce, 

strategic sourcing, and small business utilization. 

DHS Addresses OCPO’s Staffing Shortages 

OCPO was aware of the staffing shortages identified in our 2005 

report and requested and was granted funding for additional 

procurement staff in 2005, 2006, and 2007. Consequently, the 

number of staff has more than doubled since 2005. In 2008, 

OCPO created the Acquisition Professional Career Program 

(APCP) as an additional way to address the department’s shortage 

of acquisition professionals. The program seeks to develop 

acquisition leaders to facilitate the goal of establishing the culture 

of “One DHS.” APCP is a 3-year program of classroom training 

and direct field experience with multiple DHS components. In the 

Update on DHS’ Procurement and Program Management Operations 

Page 5 
past 2 years, the APCP program has experienced a 62% growth in 

the number of contracting personnel participants, from 48 in 2008 

to 126 in 2010. The DHS contracting workforce more than 

doubled from FY 2005 to the end of FY 2010 (Figure 3). 

Figure 3. Procurement Staff Growth from FY 2005 to FY 2010 

FY 2005 687 

FY 2010 1,387 

0 500 1000 1500 

Based on our review, implementation of Management Directive 

0784, organizational changes within OCPO, and the development 

of APCP demonstrate that DHS has sufficiently addressed our 

recommendations on procurement management staffing, oversight 

authority, and organizational structure and resources. 

Program Management 

The recommendation from our prior report to improve program 

management was as follows: 

Create and staff a DHS organization that will— 

a. develop program management policies and procedures; 

b. provide independent technical support to DHS senior 

management and organizational component program 

managers on an as-required basis; and 

c. identify and foster best practices. 

Establishing APMD and AMD 102-01 

DHS created APMD in 2007, issued Acquisition Management 

Directive (AMD) 102-01 in 2010, and is leveraging the technical 

skills of the Science and Technology Division (S&T). These 

Update on DHS’ Procurement and Program Management Operations 

Page 6 
actions have resolved many of the program management 

vulnerabilities identified in the 2005 report, including the need for 

more independent technical support. 

APMD has primary responsibility for developing and 

implementing the governance processes and procedures for 

program management over DHS’ acquisition programs. APMD, in 

coordination with OCPO, issued AMD 102-01 to provide overall 

policy and structure for acquisition program management to ensure 

that major investments comply with established investment review 

policy standards. AMD 102-01 requires DHS acquisition 

programs to progress through an acquisition framework to ensure 

consistent and efficient acquisition management and approval from 

the decision authority at each phase. To ensure effective oversight 

of AMD 102-01 and provide the requisite oversight of DHS 

acquisitions, DHS has also made a concerted effort to increase the 

number of certified program managers (PMs) since 2005 (Figure 

4). 

Figure 4. Certified Program Managers from FY 2005 to FY 20101 

FY05 FY06 FY07 FY08 FY09 FY10 

Fiscal year 

1 Certification Levels: 

1. Level I: program life cycle cost at or above $1 billion 

2. Level II: program life cycle cost at $300 million or more, but less than $1 billion 

3. Level III: program life cycle cost at less than $300 million 

22 

62 

131 

240 

392 

431 

36 

87 76 

131 152 

299 

35 40 59 

82 

107 125 

0 

50 

100 

150 

200 

250 

300 

350 

400 

450 

500 

# of Certified PMs 

Level I 

Level II 

Level III 

Update on DHS’ Procurement and Program Management Operations 


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Independent Technical Support for Acquisitions 

The program management function for acquisitions receives 

independent technical support from the DHS S&T. S&T provides 

(1) technical support for testing and evaluation, (2) subject matter 

expertise, (3) system engineers to evaluate program life cycles, and 

(4) workforce recommendations to the DHS Acquisition 

Workforce Development Office in OCPO. The Director of DHS’ 

Test and Evaluation and Standards Division is a sitting member of 

the Acquisition Review Board and provides letters of assessment 

on acquisition programs based on test plans, as well as 

recommendations for decision memorandums. 

Establishing the Program Management Council 

The department chartered the Program Management Council in 

December 2006 to provide a venue for PMs and executives to 

exchange information pertaining to program management, develop 

program management policy and requirements, and discuss 

methods for improving the department’s program management 

performance. The council also develops measures and standards 

based on private and public sector requirements, and reviews and 

addresses professional development and staffing needs. 

Based on our review, DHS addressed our recommendation for 

improving program management by creating APMD, developing 

AMD 102-01, leveraging technical support from S&T’s Test and 

Evaluation and Standards Division, and chartering the Program 

Management Council. 

Procurement Ethics 

The two recommendations to improve procurement ethics were (1) 

require expanded procurement ethics training for senior program 

and procurement officials, and (2) ensure that procurement and 

program management oversight processes monitor departmental 

procurement activities for potential standards of conduct 

violations. 

Require Expanded Procurement Ethics Training 

In 2006, DHS began offering procurement ethics training to senior 

executive staff and political appointees on an ad hoc basis. In 

2009, OCPO and the Office of General Counsel’s Ethics Division 

Update on DHS’ Procurement and Program Management Operations 

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collaborated to develop a DHS ethics training tailored to 

acquisition professionals. In October 2010, DHS began offering 

this combined procurement ethics training on a voluntary basis 

throughout OCPO and other DHS components. The combined 

training satisfied the OIG recommendation to expand procurement 

ethics training. According to our review of ethics documentation, 

annual ethics training is required of contracting 

personnel; however, the combined procurement ethics training is 

not a requirement. We suggest that DHS require all personnel 

involved in procurement operations to take the combined 

procurement ethics training instead of the general ethics training 

on an annual basis. This would ensure that all relevant personnel 

receive ethics training with the benefit of an applied focus in 

procurement. 

Procurement and Program Management Oversight 

In December 2005, DHS addressed our recommendation to 

improve procurement and program management oversight 

processes by issuing Management Directive 0784. This directive 

enabled DHS to monitor procurement activities for potential ethics 

violations. AMD 102-01 also provides the capability to monitor 

procurement activities for potential ethics violations through a 

series of internal reviews. The process requires approvals over 

each phase of an acquisition before procuring goods or services. 

Reporting Procurement Ethics Violations 

During this review, we identified varying component practices in 

reporting potential procurement ethics violations. The combined 

procurement ethics training provided by OCPO and the Office of 

General Counsel states that all potential violations should be 

reported to OIG. Interviews revealed no consensus on how 

components handle or report potential violations. As a result, DHS 

has no assurance that it can capture or track potential procurement 

ethics violations to analyze DHS-wide trends and implement 

solutions. We suggest that DHS develop an integrated reporting 

process to capture, track, and analyze information on potential 

procurement ethics violations. 

Continuing Efforts by DHS 

In May 2010, the Deputy Secretary tasked USM to enhance the 

department’s Integrated Strategy for High Risk Management to initiate a 

Update on DHS’ Procurement and Program Management Operations 

Page 9 
more comprehensive, strategic approach to manage people, structures, and 

processes. USM’s office held summits with top department and 

component leaders to develop strategies to improve and streamline 

processes and governance. As a result of those summits, in January 2011, 

DHS provided its strategy to GAO outlining the department’s plans to 

enhance the enterprise-wide acquisition framework. The strategy includes 

five enhanced integration initiatives within acquisition management: 

1.	 Rationalize the requirements development process 

(structures/processes). 

2.	 Improve and streamline governance (structures). 

3.	 Solidify the CAE structure (structures). 

4.	 Enhance business intelligence (processes/systems). 

5.	 Expand the Acquisition Corps concept and strengthen PM 

training (people). 

The department outlined corrective action plans for each of the initiatives 

and said that it will track these plans on a quarterly basis. The department 

indicated that it intends to implement many of these initiatives in FY 

2011. 

This report does not contain any recommendations. 

Management Comments and OIG Analysis 

Management concurred with the report findings. We have incorporated the technical 

comments from the Office of the Chief Procurement Officer into the body of the report. 

Update on DHS’ Procurement and Program Management Operations 


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Appendix A 

Purpose, Scope, and Methodology 

We conducted this assessment between December 17, 2010, and 

February 28, 2011. We reviewed prior GAO and OIG reports from 

2005 to the present, interviewed DHS procurement and project 

management personnel, and obtained input from the Acquisition 

Program Management Division, Office of the Chief Procurement 

Officer, and the Head of Contract Activity for each DHS 

component. The nature and brevity of this assessment precluded 

the use of our normal audit protocols. Our review was conducted 

under the authority of the Inspector General Act of 1978, as amended, 

and according to the Quality Standards for Inspections and 

Evaluations issued by the Council of the Inspectors General on 

Integrity and Efficiency. 

Update on DHS’ Procurement and Program Management Operations 
 

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Appendix B 

Management Comments to the Draft Report 

Management concurred with the report findings. We have incorporated the technical 

comments from the Office of the Chief Procurement Officer into the body of the report. 

Update on DHS’ Procurement and Program Management Operations 
 

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Appendix C 

Major Contributors to this Report 

Paul Wood, Director 

Shelley Howes, Audit Manager 

David Lu, Program Analyst 

Dianne Leyva, Program Analyst 

Carolyn Floyd, Independent Referencer 

Update on DHS’ Procurement and Program Management Operations 
 

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Appendix D 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

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 

Senior Procurement Analyst for Management 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as 

appropriate 

Update on DHS’ Procurement and Program Management Operations 
 

Page 14
 

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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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