Page i GAO-13-846T

HOMELAND 

SECURITY

Observations on 

DHS's Oversight of 

Major Acquisitions 

and Efforts to Match 

Resources to Needs

Statement of Michele Mackin, Director

Acquisition and Sourcing Management

Testimony

Before the Subcommittee on Oversight 

and Management Efficiency, Committee 

on Homeland Security, House of 

Representatives

For Release on Delivery 

Expected at 2:00 p.m. EDT

Thursday, September 19, 2013

GAO-13-846T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-846T, a testimony 

before the Subcommittee on Oversight and 

Management Efficiency, Committee on 

Homeland Security, House of 

Representatives

September 19, 2013

HOMELAND SECURITY

Observations on DHS’s Oversight of Major 

Acquisitions and Efforts to Match Resources to 

Needs

Why GAO Did This Study

GAO has highlighted DHS acquisition 

management issues on its high-risk 

list, and over the past several years, 

GAO’s work has identified significant 

shortcomings in the department’s 

ability to manage an expanding 

portfolio of major acquisitions. It is 

important for DHS to address these 

shortcomings because the department 

invests extensively in acquisition 

programs to help it execute its many 

critical missions. DHS is acquiring 

systems to help secure the border, 

increase marine safety, enhance cyber 

security, and execute a wide variety of 

other operations. In 2011, DHS 

reported to Congress that it planned to 

ultimately invest $167 billion in its 

major acquisition programs. In fiscal 

year 2013 alone, DHS reported it was 

investing more than $9.6 billion.

This statement discusses (1) DHS’s 

acquisition policy and how it has been 

implemented; and (2) DHS’s 

mechanisms for managing emerging 

affordability issues. The statement is 

based on GAO’s prior work on DHS 

acquisition management and leading 

commercial companies’ knowledgebased approach to managing their 

large investments. It also reflects 

observations from ongoing work for 

this subcommittee. For that work, GAO

is reviewing key documentation, and

interviewing headquarters and 

component level acquisition and 

financial management officials. 

What GAO Recommends

GAO is not making any new 

recommendations in this statement. It 

has made numerous recommendations 

in its prior work to strengthen 

acquisition management, and DHS is 

taking steps to address them.

What GAO Found

GAO has previously established that the Department of Homeland Security’s 

(DHS) acquisition policy reflects many sound program management practices 

intended to mitigate the risks of cost growth and schedule slips. The policy 

largely reflects the knowledge-based approach used by leading commercial 

firms, which do not pursue major investments without demonstrating, at critical 

milestones, that their products are likely to meet cost, schedule, and performance 

objectives. DHS policy requires that important acquisition documents be in place 

and approved before programs are executed. For example, one key document is 

an acquisition program baseline, which outlines a program’s expected cost, 

schedule, and the capabilities to be delivered to the end user. However, in 

September 2012, GAO found that the department did not implement the policy 

consistently, and that only 4 of 66 programs had all of the required documents 

approved in accordance with DHS’s policy. GAO made five recommendations, 

which DHS concurred with, identifying actions DHS should take to mitigate the 

risk of poor acquisition outcomes and strengthen management activities. Further, 

GAO reported that the lack of reliable performance data hindered DHS and 

congressional oversight of the department’s major programs. Officials explained 

that DHS’s culture had emphasized the need to rapidly execute missions more 

than sound acquisition management practices. GAO also reported that most of 

the department’s major programs cost more than expected, took longer to deploy 

than planned, or delivered less capability than promised. DHS has taken steps to 

improve acquisition management, but as part of its ongoing work, GAO found 

that DHS recently waived documentation requirements for 42 programs fielded 

for operational use since 2008. DHS explained it would be cost prohibitive and 

inefficient to recreate documentation for previous acquisition phases. GAO plans

to obtain more information on this decision and its effect on the management of 

DHS’s major acquisitions. DHS’s July 2013 status assessment indicated that, as 

of the end of fiscal year 2012, many major programs still face cost and schedule 

shortfalls. DHS expects to provide another update in the near future.

In December 2012, DHS’s Chief Financial Officer reported that the department

faced a 30 percent gap between expected funding requirements for major 

acquisition programs and available resources. DHS has efforts underway to 

develop a more disciplined and strategic approach to managing its portfolio of 

major investments, but the department has not yet developed certain policies and 

processes that could help address its affordability issues. In September 2012, 

GAO reported that DHS largely made investment decisions on a program-byprogram and component-by-component basis and did not have a process to 

systematically prioritize its major investments. In GAO’s work at the Department 

of Defense, it has found this approach hinders efforts to achieve a balanced mix 

of programs that are affordable and feasible and that provide the greatest return 

on investment. DHS’s proposed Integrated Investment Life Cycle Model (IILCM)

is intended to improve portfolio management by ensuring mission needs drive 

investment decisions. For example, a high-level oversight body would identify 

potential trade-offs among DHS’s component agencies. GAO has recommended 

such an oversight body for several years. Full implementation of the IILCM may 

be several years away. GAO will continue to assess the department’s progress in 

its ongoing work.

View GAO-13-846T. For more information, 

contact Michele Mackin at (202) 512-4841 or 

mackinm@gao.gov.
Page 1 GAO-13-846T

Chairman Duncan, Ranking Member Barber, and Members of the 

Subcommittee:

Thank you for the opportunity to discuss acquisition management at the 

Department of Homeland Security (DHS), as well as to discuss some 

lessons learned from our prior work comparing the Department of 

Defense’s (DOD) acquisition practices to those of leading commercial 

companies. As you know, we have highlighted DHS acquisition 

management issues in our high-risk list since 2005.1 Over the past 

several years, our work has identified significant shortcomings in the 

department’s ability to manage an expanding portfolio of major 

acquisitions, and in response to our recommendations, DHS has taken 

steps to improve acquisition management.2

My statement today draws from our prior work on DHS acquisition 

management and leading commercial companies’ approach to managing 

their large investments, work we have done in the context of DOD’s 

approach to managing its large acquisitions.

We believe it is important for 

DHS to continue to address these shortcomings because the department 

invests extensively in acquisition programs to help it execute its many 

critical missions. DHS and its underlying components are acquiring 

systems to help secure the border, increase marine safety, screen 

travelers, enhance cyber security, improve disaster response, and 

execute a wide variety of other operations. In 2011, DHS reported to 

Congress that it planned to ultimately invest $167 billion in its major 

acquisition programs. In fiscal year 2013 alone, DHS reported it planned 

to spend more than $9.6 billion on these programs.

3

 1

GAO, High-Risk Series: An Update, 

The statement also includes 

observations from our ongoing review of DHS’s acquisition funding 

GAO-05-207 (Washington, D.C.: January 2005).

2

For examples, see GAO, Department of Homeland Security: Billions Invested in Major 

Programs Lack Appropriate Oversight, GAO-09-29 (Washington, D.C.: Nov. 18, 2008); 

Department of Homeland Security: Assessments of Selected Complex Acquisitions, 

GAO-10-588SP (Washington, D.C.: June 30, 2010); Homeland Security: DHS Requires 

More Disciplined Investment Management to Help Meet Mission Needs, GAO-12-833

(Washington, D.C.: Sept. 18, 2012).

3

GAO, Best Practices: An Integrated Portfolio Management Approach to Weapon System 

Investments Could Improve DOD’s Acquisition Outcomes, GAO-07-388, (Washington, 

D.C.: March 30, 2007); GAO-09-29; GAO-10-588SP; Defense Acquisitions: Assessments 

of Selected Weapon Programs, GAO-11-233SP (Washington, D.C.: March 29, 2011); 

GAO-12-833. 
Page 2 GAO-13-846T

process, which we are conducting at the request of this subcommittee. 

This statement discusses (1) DHS’s acquisition policy and how it has 

been implemented; and (2) DHS’s mechanisms for managing emerging 

affordability issues. For our prior work, we surveyed all 77 major 

acquisition program offices that DHS identified in 2011 and achieved a 92 

percent response rate.4 We also reviewed all available department-level 

acquisition decisions from November 2008 to April 2012 and interviewed 

acquisition officials at DHS headquarters and components. To determine 

the extent to which DHS has policies in place to effectively manage 

individual acquisition programs, as well as the department’s acquisition 

portfolio as a whole, we compared our key acquisition management 

practices to DHS acquisition policy, and identified the extent to which 

DHS has implemented its policy.5

The work underlying this statement was conducted 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.

More detailed information on our scope 

and methodology for our prior work can be found in the relevant reports. 

To support our ongoing audit, from March to September 2013, we 

reviewed key documentation and interviewed acquisition and financial 

management officials at DHS headquarters and components to 

understand DHS’s affordability issues and the department’s plans to 

address these issues. We are also following up on prior 

recommendations.

DHS Acquisition Management Directive 102-01 (MD 102) and an 

accompanying instruction manual establish the department’s policies and 

processes for managing major acquisition programs. While DHS has had 

an acquisition management policy in place since October 2004, the 

 4

DHS originally identified 82 major acquisition programs in the 2011 major acquisition 

oversight list, but five of those programs were subsequently cancelled in 2011. Seventyone program managers responded to the survey.

5

Appendix II of GAO-12-833 identifies key acquisition management practices established 

in our previous reports examining DHS, the Department of Defense, National Aeronautics 

and Space Administration, and private sector organizations.

Background
Page 3 GAO-13-846T

department issued the initial version of MD 102 in 2008.6

• DHS’s Chief Acquisition Officer—currently the Under Secretary for 

Management (USM)—is responsible for the management and 

Further, senior 

leaders in the department are responsible for acquisition management 

functions, including managing the resources needed to fund major 

programs.

oversight of the department’s acquisition policies and procedures.7

• The Acquisition Decision Authority is responsible for approving the 

movement of programs through the acquisition life cycle at key 

milestone events.8 The USM or Deputy Secretary serve as the 

decision authority for programs with life cycle cost estimates of $1 

billion or greater, while the cognizant component acquisition executive 

may serve as the decision authority for a program with a lower cost 

estimate.

• The DHS Acquisition Review Board (ARB) supports the Acquisition 

Decision Authority by reviewing major acquisition programs for proper 

management, oversight, accountability, and alignment with the 

department’s strategic functions at the key acquisition milestones and 

other meetings as needed.

• The ARB is supported by the Office of Program Accountability and 

Risk Management (PARM), which reports to the USM and is 

responsible for DHS’s overall acquisition governance process. In 

March 2012, PARM issued its first Quarterly Program Accountability 

Report (QPAR), which provided an independent evaluation of major 

programs’ health and risks. Since that time, PARM has issued two 

additional QPARs, most recently in July 2013, and plans to issue a 

fourth by the end of September 2013. PARM also prepares the 

 6

The interim version of MD 102 replaced Management Directive 1400, which had 

governed major acquisition programs since 2006. DHS originally established an 

investment review process in 2003 to provide departmental oversight of major investments 

throughout their life cycles, and to help ensure that funds allocated for investments 

through the budget process are well spent. DHS issued an updated version of MD 102 in 

January 2010 and subsequently updated the guidebook and appendices.

7

The Secretary of DHS designated the USM the department’s Chief Acquisition Officer in 

April 2011.

8

See GAO-12-833 for descriptions of the four phases of the acquisition life cycle and the 

documents requiring department-level approval at Acquisition Decision Events. 
Page 4 GAO-13-846T

Comprehensive Acquisition Status Reports, which are to be submitted 

to the appropriations committees with the President’s budget proposal 

and updated quarterly.9

• The Office of Program Analysis and Evaluation (PA&E), within the 

Office of the Chief Financial Officer, is responsible for advising the 

USM, among others, on resource allocation issues. PA&E also 

oversees the development of the Future Years Homeland Security 

Program (FYHSP). The FYHSP is DHS’s 5-year funding plan for 

programs approved by the Secretary that are to support the 

department’s strategic plan.10

DHS acquisition policy reflects many key program management practices 

intended to mitigate the risks of cost growth and schedule slips.11

However, we previously found that the department did not implement the 

policy consistently. Officials explained that DHS’s culture emphasized the 

need to rapidly execute missions more than sound acquisition 

management practices, and we found that senior leaders did not bring to 

bear the critical knowledge needed to accurately track program 

performance. Most notably, we found that most programs lacked 

approved acquisition program baselines, which are critical management 

tools that establish how systems will perform, when they will be delivered, 

and what they will cost. We also reported that most of the department’s 

major programs were at risk of cost growth and schedule slips as a result.

 9

Consolidated and Further Continuing Appropriations Act, 2013, Pub. L. No. 113-6,127 

Stat. 198, 343.

106 U.S.C. § 454.

11The reference to DHS acquisition policy, for purposes of this testimony, consists of MD 

102-01, and an associated guidebook.

Sound Acquisition 

Management Policy 

Has Not Been 

Implemented 

Consistently and 

Many Programs Have 

Performed Poorly
Page 5 GAO-13-846T

In our past work examining DOD weapon acquisition issues and best 

practices for product development, we have found that leading 

commercial firms pursue an acquisition approach that is anchored in 

knowledge, whereby high levels of product knowledge are demonstrated 

by critical points in the acquisition process.12

A knowledge-based approach to capability development allows 

developers to be reasonably certain, at critical points in the acquisition life 

cycle, that their products are likely to meet established cost, schedule, 

and performance objectives. This knowledge provides them with 

information needed to make sound investment decisions. Over the past 

several years, our work has emphasized the importance of obtaining key 

knowledge at critical points in major system acquisitions and, based on 

this work, we have identified eight key practice areas for program 

management. These key practice areas are summarized in table 1, along 

with our assessment of DHS’s acquisition policy.

While DOD’s major 

acquisitions have unique aspects, our large body of work in this area has 

established knowledge-based principles that can be applied to 

government agencies and can lead to more effective use of taxpayer 

dollars.

 12GAO-11-233SP.

DHS Acquisition Policy 

Generally Reflects Key 

Program Management 

Practices Identified at 

Commercial 

Organizations
Page 6 GAO-13-846T

Table 1: GAO Assessment of DHS’s Acquisition Policy Compared to Key Program-management Practices

GAO key practice area Summary of key practices 

GAO assessment 

of DHS’s

acquisition 

policy

Identify and validate needs Current capabilities should be identified to determine if there is a gap between 

the current and needed capabilities. A need statement should be informed by a 

comprehensive assessment that considers the organization’s overall mission. 



Assess alternatives to select 

most appropriate solution 

Analyses of Alternatives should be conducted early in the acquisition process 

to compare key elements of competing solutions, including performance, costs, 

and risks. Moreover, these analyses should assess many alternatives across 

multiple concepts. 



Clearly establish well-defined 

requirements 

Requirements should be well defined and include input from operators and 

stakeholders. Programs should be grounded in well-understood concepts of 

how systems would be used and likely requirements costs. 



Develop realistic cost estimates 

and schedules 

A cost estimate should be well documented, comprehensive, accurate, and 

credible. A schedule should identify resources needed to do the work and 

account for how long all activities will take. Additionally, a schedule should 

identify relationships between sequenced activities. 



Secure stable funding that 

matches resources to 

requirements 

Programs should make trade-offs as necessary when working in a constrained 

budget environment. 

Demonstrate technology, design, 

and manufacturing maturity 

Capabilities should be demonstrated and tested prior to system development, 

making a production decision, and formal operator acceptance. 

◑

Utilize milestones and exit 

criteria 

Milestones and exit criteria—specific accomplishments that demonstrate 

progress—should be used to determine that a program has developed 

required and appropriate knowledge prior to a program moving forward to the 

next acquisition phase. 

◕

Establish an adequate workforce Acquisition personnel should have appropriate qualifications and experience. 

Program managers should stay on until the end of an acquisition life-cycle 

phase to assure accountability. Government and contractor staff should also 

remain consistent. 

◑

Source: GAO analysis of DHS acquisition policy.

Legend: DHS policy reflects key practices; ◕ DHS policy substantially reflects key practices; ◑

DHS policy partially reflects key practices.

As indicated in table 1, DHS acquisition policy establishes several key 

program-management practices through document requirements. MD 102 

requires that major acquisition programs provide the ARB documents 

demonstrating the critical knowledge needed to support effective decision 

making before progressing through the acquisition life cycle. Figure 1 

identifies acquisition documents that must be approved at the department 

level and their corresponding key practice areas.
Page 7 GAO-13-846T

Figure 1: DHS Acquisition Documents Requiring Department-level Approval

DHS acquisition policy has required these documents since November 

2008, but in September 2012, we reported that the department generally 

had not implemented this policy as intended, and had not adhered to key 

program management practices. For example, we reported that DHS had 

only approved 4 of 66 major programs’ required documents in 

accordance with the policy. See figure 2.

DHS Has Not Consistently 

Implemented Its 

Acquisition Policy
Page 8 GAO-13-846T

Figure 2: Programs That Had Key Acquisition Documents Approved in Accordance 

with MD 102

Note: When we issued our September 2012 report, PARM officials told us that 10 of the 32 programs 

with no documents approved were in sustainment at the time MD 102 was signed, and so was 1 of 

the 30 programs with some documents approved—the Application Support Center. DHS approved 

the Application Support Center’s Mission Need Statement and Acquisition Program Baseline in March 

2011.

In September 2012, we reported that DHS leadership had, since 2008, 

formally reviewed 49 of the 71 major programs for which officials had 

responded to our survey. Of those 49 programs, DHS permitted 43 

programs to proceed with acquisition activities without verifying the 

programs had developed the knowledge required under MD 102. 

Additionally, we reported that most of DHS’s major acquisition programs 

lacked approved acquisition program baselines, as required. These 

baselines are critical tools for managing acquisition programs, as they are 

the agreement between program-, component-, and department-level 

officials, establishing how systems will perform, when they will be 

delivered, and what they will cost.13

 13DHS Acquisition Instruction/Guidebook 102-01-001: Appendix K, Acquisition Program 

Baseline; October 1, 2011.

Officials from half of the eight 
Page 9 GAO-13-846T

components’ acquisition offices we spoke with, as well as PARM officials, 

noted that DHS’s culture had emphasized the need to rapidly execute 

missions more than sound acquisition management practices. PARM 

officials explained that, in certain instances, programs were not capable 

of documenting knowledge, while in others, PARM lacked the capacity to 

validate that the documented knowledge was adequate.

As a result, we reported that senior leaders lacked the critical knowledge 

needed to accurately track program performance, and that most of the 

department’s major programs were at risk of cost growth and schedule 

slips. We also reported that DHS’s lack of reliable performance data not 

only hindered its internal acquisition management efforts, but also limited 

congressional oversight. We made five recommendations to the 

Secretary of Homeland Security at that time, identifying specific actions 

DHS should take to mitigate the risk of poor acquisition outcomes and 

strengthen the department’s investment management activities. DHS 

concurred with all five recommendations, and is taking steps to address 

them, most notably through policy updates.

Since that time, we have continued to assess DHS’s acquisition 

management activities and the reliability of the department’s performance 

data. We currently have a review underway for this subcommittee 

assessing the extent to which DHS is executing effective executive 

oversight and governance (including the quality of the data used) of a 

major effort to modernize an information technology system, TECS. 

TECS is a major border enforcement system used for preventing 

terrorism, providing border security and law enforcement information 

about people who are inadmissible or may pose a threat to the security of 

the United States. We are (1) determining the status of the modernization 

effort, including what has been deployed and implemented to date, as 

well as the extent to which the modernization is meeting its cost and 

schedule commitments, including the quality of schedule estimates; and 

(2) assessing requirements management and risk management practices. 

We plan to issue our report in early November.

According to DHS officials, its efforts to implement the department’s 

acquisition policy were complicated by the large number of programs 

initiated before the department was created, including 11 programs that 

PARM officials told us in 2012 had been fielded and were in the 
Page 10 GAO-13-846T

sustainment phase when MD 102 was signed.14 As part of our ongoing 

work, we found that, in May 2013, the USM waived the acquisition 

documentation requirements for 42 major acquisition programs that he 

identified as having been already fielded for operational use when MD 

102 was issued in 2008. In a memo implementing the waiver, the USM 

explained that it would be cost prohibitive and inefficient to recreate 

documentation for previous acquisition phases. However, he stated that 

the programs will continue to be monitored, and that they must comply 

with MD 102 if any action is taken that materially impacts the scope of the 

current program, such as a major modernization or new acquisition. We 

plan to obtain more information on this decision and its effect on the 

department’s management of its major acquisitions.

In September 2012, we reported that most of DHS’s major acquisition 

programs cost more than expected, took longer to deploy than planned, 

or delivered less capability than promised. We reported that these 

outcomes were largely the result of DHS’s lack of adherence to key 

knowledge-based program management practices. As part of our ongoing 

work, we analyzed a recent PARM assessment that suggests many of the 

department’s major acquisition programs are continuing to struggle. In its 

July 2013 quarterly program assessment, PARM reported that it had 

assessed 112 major acquisition programs. PARM reported that 37 

percent of the programs experienced no cost variance at the end of fiscal 

year 2012, but it also reported that a large percentage of the programs 

were experiencing cost or schedule variances at that time. See table 2.

 14Sustainment begins when a capability has been fielded for operational use, and it 

involves the supportability of fielded systems through disposal, including maintenance and 

the identification of cost reduction opportunities. System operations, support, and 

sustainment costs tend to approach up to 70 percent of life-cycle costs.

Most DHS Major 

Acquisition Programs Have 

Experienced Cost 

Overruns or Schedule 

Delays
Page 11 GAO-13-846T

Table 2: PARM’s Assessment of 112 Major Acquisition Programs as of the End of 

Fiscal Year 2012 

Percentage of programs 

with cost variance

Percentage of programs 

with schedule variance

None 37% 21%

Minimal (1-3 percent) 12 9

Moderate (3-8 percent) 14 21

High (8-10 percent) 2 2

Significant (over 10 percent) 36 47

Source: GAO analysis of PARM data.

Note: Percentages do not add to 100 due to rounding. PARM established the variance categories in 

the July 2013 QPAR.

However, as we reported in September 2012, DHS acquisition programs 

generally did not have the reliable cost estimates and realistic schedules 

needed to accurately assess program performance. We will continue to 

track DHS’s efforts to improve the quality of its program assessments 

moving forward.

We have previously reported that cost growth and schedule slips at the 

individual program level complicated DHS’s efforts to manage its 

investment portfolio as a whole. When programs encountered setbacks, 

the department often redirected funding to troubled programs at the 

expense of others, which in turn were more likely to struggle. DHS’s Chief 

Financial Officer recently issued a memo stating that DHS faced a 30 

percent gap between funding requirements for major acquisition 

programs and available resources. DHS has efforts underway to develop 

a more disciplined and strategic portfolio management approach, but the 

department has not yet developed key portfolio management policies and 

processes that could help the department address its affordability issues, 

and DHS’s primary portfolio management initiative may not be fully 

implemented for several years.

In September 2012, we noted that DHS’s acquisition portfolio may not be 

affordable. That is, the department may have to pay more than expected 

for less capability than promised, and this could ultimately hinder DHS’s 

DHS Is in Early Stages 

of Developing a 

Portfolio Management 

Approach to Mitigate 

Gap Between 

Resources and Needs

The DHS Major Acquisition 

Portfolio Is Unaffordable
Page 12 GAO-13-846T

day-to-day operations.15 As part of our ongoing work, we learned that 

DHS’s Chief Financial Officer issued an internal memo in December 

2012, shortly after our report was issued, stating that the aggregate 5-

year funding requirements for major acquisitions would likely exceed 

available resources by approximately 30 percent. This acknowledgment 

was a positive step toward addressing the department’s challenges, in 

that it clearly identified the need to improve the affordability of the 

department’s major acquisition portfolio. Additionally, the Chief Financial 

Officer has required component senior financial officers to certify that they 

have reviewed and validated all current-, prior-, and future-year funding 

information presented in ARB materials, and ensure it is consistent with 

the FYHSP. Additionally, through our ongoing work, PA&E officials told us 

that the magnitude of the actual funding gap may be even greater than 

suggested because only a small portion of the cost estimates that 

informed the Chief Financial Officer’s analysis had been approved at the 

department level, and expected costs may increase as DHS improves the 

quality of the estimates. This is a concern we share. While holding 

components accountable is important, without validated and departmentapproved documents—such as acquisition program baselines and life 

cycle cost estimates—efforts to fully understand and address the 

department’s overall funding gap will be hindered.

In September 2012, we reported that DHS largely made investment 

decisions on a program-by-program and component-by-component basis. 

DHS did not have a process to systematically prioritize its major 

investments to ensure that the department’s acquisition portfolio was 

consistent with anticipated resource constraints. In our work at DOD, we 

have found this approach hinders efforts to achieve a balanced mix of 

programs that are affordable and feasible and that provide the greatest 

return on investment.16

In our past work focused on improving weapon system acquisitions, we 

found that successful commercial companies use a disciplined and 

integrated approach to prioritize needs and allocate resources.17

 15

As a 

GAO-12-833.

16GAO-07-388.

17GAO-07-388.

DHS Policy and Process 

Initiatives Are Intended to 

Improve Portfolio 

Management Efforts and 

Help Address Affordability 

Issues
Page 13 GAO-13-846T

result, they can avoid pursuing more projects than their resources can 

support, and better optimize the return on their investment. This 

approach, known as portfolio management, requires companies to view 

each of their investments as contributing to a collective whole, rather than 

as independent and unrelated.

With an enterprise perspective, companies can effectively (1) identify and 

prioritize opportunities, and (2) allocate available resources to support the 

highest priority—or most promising—investment opportunities. Over the 

past several years, we have examined the practices that private and 

public sector entities use to achieve a balanced mix of new projects, and 

based on this work, we have identified key practice areas for portfolio 

management. One I would like to highlight today is that investments 

should be ranked and selected using a disciplined process to assess the 

costs, benefits, and risks of alternative products to ensure transparency 

and comparability across alternatives.

In this regard, DHS established the Joint Requirements Council (JRC) in 

2003, to identify crosscutting opportunities and common requirements 

among DHS components and help determine how DHS should use its 

resources. But the JRC stopped meeting in 2006 after the chair was 

assigned to other duties within the department.18

In addition to private and public sector practices, which we discuss above, 

our prior work at DOD has identified an oversight body similar to the 

CRC’s expected function. The Joint Requirements Oversight Council 

(JROC) has a number of statutory responsibilities related to the 

identification, validation, and prioritization of joint military requirements. 

In 2008, we 

recommended that it be reinstated, or that DHS establish another joint 

requirements oversight board, and DHS officials recognized that 

strengthening the JRC was a top priority. Through our ongoing work, we 

have identified that DHS recently piloted a Capabilities and Requirements 

Council (CRC) to serve in a similar role as the JRC. The CRC began 

reviewing a portfolio of cyber capabilities in the summer of 2013. The pilot 

is intended to inform the department’s fiscal year 2015 budget request; 

therefore, it is too soon to assess the outcomes of this new oversight 

body. It is also unknown at this time how DHS will sustain the CRC over 

time or what its outcomes will be.

 18GAO-09-29.
Page 14 GAO-13-846T

This body, which has been required by law since 1997, and its supporting 

organizations review requirements documents several times per year, 

prior to major defense acquisition programs’ key milestones. Through 

these reviews, proposed acquisition programs are scrutinized prior to 

their initiation and before decisions are made to begin production. The 

JROC also takes measures to help ensure the programs are affordable. 

In 2011, we reported that the JROC required the military services to show 

that their proposed programs were fully funded before it validated 

requirements for five of the seven proposed programs we reviewed.19 The 

two other proposed programs were funded at more than 97 and 99 

percent, respectively.20 This full funding requirement is similar to the 

funding certification requirement DHS’s CFO established in December 

2012. While some DOD acquisition programs continue to experience cost 

growth and schedule delays, as identified in our annual report on weapon 

systems acquisitions, the department does have in place mechanisms 

that DHS could adopt to improve the affordability of its acquisition 

portfolio, and put its acquisition programs in a better position to achieve 

successful outcomes.21

In September 2012, we reported that the CRC is one of several new 

councils and offices that DHS would establish as part of its Integrated 

Investment Life Cycle Model (IILCM), which is intended to improve 

portfolio management at DHS through the identification of priorities and 

capability gaps. This model, which the department proposed in January 

2011, would provide a framework for information to flow between councils 

and offices responsible for strategic direction, requirements development, 

resource allocation, and program governance. DHS explained that the 

IILCM would ensure that mission needs drive investment decisions.

While the IILCM, as envisioned, could improve DHS management 

decisions by better linking missions to acquisition outcomes, our ongoing 

work indicates that its full implementation may be several years away. 

From January 2011 to June 2012, the schedule for initiating IILCM 

 19GAO, DOD Weapon Systems: Missed Trade-off Opportunities During Requirements 

Reviews, GAO-11-502, (Washington, D.C.: June 16, 2011).

20In this context, full funding referred to a budgetary allocation in the future-years defense 

program.

21GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, 

GAO-13-249SP, (Washington, D.C.: March 28, 2013). 
Page 15 GAO-13-846T

operations slipped by a year, and in May 2013, a DHS official responsible 

for the IILCM told us he was unsure when the IILCM would be fully 

operational. We also found that some component acquisition officials are 

not aware of how the IILCM would apply to their own acquisition 

portfolios. Some of the officials we interviewed told us that DHS 

leadership needs to conduct more outreach and training about the IILCM 

and how it is expected to work, and a DHS headquarters official told us 

that the department is in the process of implementing an initial 

department-wide IILCM communications strategy. We will continue to 

assess the department’s progress in implementing what it views as a very 

important management model.

Chairman Duncan, Ranking Member Barber, and Members of the 

Subcommittee, this completes my prepared statement. I would be 

pleased to respond to any questions that you may have at this time.

If you or your staff have any questions about this testimony, please 

contact Michele Mackin at (202) 512-4841 or MackinM@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this statement. GAO staff who made key 

contributions to this testimony include Katherine Trimble (Assistant 

Director), Nate Tranquilli, Steve Marchesani, Mara McMillen, and Sylvia 

Schatz.

GAO Contact and 

Staff 

Acknowledgments

(121171)
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO’s website (http://www.gao.gov). Each weekday 

afternoon, GAO posts on its website newly released reports, testimony, 

and correspondence. To have GAO e-mail you a list of newly posted 

products, go to http://www.gao.gov and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s website, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537.

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube.

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts.

Visit GAO on the web at www.gao.gov.

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations

Public Affairs

Please Print on Recycled Paper.