```

[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]

    TSA PROCUREMENT REFORM: SAVING TAXPAYER DOLLARS THROUGH SMARTER 
                           SPENDING PRACTICES

=======================================================================

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                        TRANSPORTATION SECURITY

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 8, 2013

                               __________

                           Serial No. 113-15

                               __________

       Printed for the use of the Committee on Homeland Security

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

      Available via the World Wide Web: http://www.gpo.gov/fdsys/

                               __________

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82-589 PDF                WASHINGTON : 2013
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20402-0001

                     COMMITTEE ON HOMELAND SECURITY

                   Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Peter T. King, New York              Loretta Sanchez, California
Mike Rogers, Alabama                 Sheila Jackson Lee, Texas
Paul C. Broun, Georgia               Yvette D. Clarke, New York
Candice S. Miller, Michigan, Vice    Brian Higgins, New York
    Chair                            Cedric L. Richmond, Louisiana
Patrick Meehan, Pennsylvania         William R. Keating, Massachusetts
Jeff Duncan, South Carolina          Ron Barber, Arizona
Tom Marino, Pennsylvania             Dondald M. Payne, Jr., New Jersey
Jason Chaffetz, Utah                 Beto O'Rourke, Texas
Steven M. Palazzo, Mississippi       Tulsi Gabbard, Hawaii
Lou Barletta, Pennsylvania           Filemon Vela, Texas
Chris Stewart, Utah                  Steven A. Horsford, Nevada
Richard Hudson, North Carolina       Eric Swalwell, California
Steve Daines, Montana
Susan W. Brooks, Indiana
Scott Perry, Pennsylvania
Vacancy
                       Greg Hill, Chief of Staff
          Michael Geffroy, Deputy Chief of Staff/Chief Counsel
                    Michael S. Twinchek, Chief Clerk
                I. Lanier Avant, Minority Staff Director
                                 ------                                

                SUBCOMMITTEE ON TRANSPORTATION SECURITY

                Richard Hudson, North Carolina, Chairman
Mike Rogers, Alabama                 Cedric L. Richmond, Louisiana, 
Candice S. Miller, Michigan              Ranking Member
Lou Barletta, Pennsylvania           Sheila Jackson Lee, Texas
Susan W. Brooks, Indiana             Eric Swalwell, California
Michael T. McCaul, Texas (ex         Bennie G. Thompson, Mississippi 
    officio)                             (ex officio)
                     Amanda Parikh, Staff Director
                    Dennis Terry, Subcommittee Clerk

                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Richard Hudson, a Representative in Congress From 
  the State of North Carolina, and Chairman, Subcommittee on 
  Transportation Security:
  Oral Statement.................................................     1
  Prepared Statement.............................................     3
The Honorable Cedric L. Richmond, a Representative in Congress 
  From the State of Louisiana, and Ranking Member, Subcommittee 
  on Transportation Security:
  Oral Statement.................................................     3
  Prepared Statement.............................................     4
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security:
  Oral Statement.................................................     5
  Prepared Statement.............................................     6

                               Witnesses

Statement of Karen Shelton Waters, Assistant Administrator, 
  Office of Acquisition, Transportation Security Administration, 
  U.S. Department of Homeland Security:
  Oral Statement.................................................     7
  Joint Prepared Statement.......................................     9
Mr. Paul Benda, Director, Advanced Research Projects Agency, 
  Science & Technology Directorate, U.S. Department of Homeland 
  Security:
  Oral Statement.................................................    11
  Joint Prepared Statement.......................................     9
Mr. Stephen M. Lord, Director, Forensic Audits and Investigative 
  Services, U.S. Government Accountability Office:
  Oral Statement.................................................    13
  Prepared Statement.............................................    14
Mr. Charles K. Edwards, Deputy Inspector General, U.S. Department 
  of Homeland Security:
  Oral Statement.................................................    23
  Prepared Statement.............................................    24

                                Appendix

Questions From Chairman Richard Hudson for Karen Shelton Waters..    45
Questions From Chairman Richard Hudson for Paul Benda............    46

 
    TSA PROCUREMENT REFORM: SAVING TAXPAYER DOLLARS THROUGH SMARTER 
                           SPENDING PRACTICES

                              ----------                              

                         Wednesday, May 8, 2013

             U.S. House of Representatives,
           Subcommittee on Transportation Security,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1:35 p.m., in 
Room 311, Cannon House Office Building, Hon. Richard Hudson 
[Chairman of the subcommittee] presiding.
    Present: Representatives Hudson, Barletta, Brooks, 
Richmond, and Thompson.
    Mr. Hudson. Our Ranking Member is on the way. I have been 
signaled by staff to go ahead and get going. So the Committee 
on Homeland Security, Subcommittee on Transportation Security 
will come to order. The subcommittee is meeting today to hear 
testimony on TSA procurement reform. I now recognize myself for 
an opening statement.
    First, I would like to thank our witnesses for 
participating in this hearing. We sincerely appreciate your 
time and look forward to hearing your testimony.
    Our purpose today is to examine TSA procurement practices 
and identify ways this $7 billion agency can save taxpayer 
money and provide better security. Ultimately, these two goals 
are not mutually exclusive, but rather are dependent upon one 
another. Every dollar that can be saved from wasteful and 
duplicative programs, reforming broken processes, and 
increasing transparency can eventually be used to better 
protect passengers and confront emerging threats.
    TSA's Office of Acquisition has the lead on planning, 
awarding, and managing the acquisition programs at TSA. Like 
other components of the Department of Homeland Security, TSA 
categorizes its programs based on life-cycle costs. Any program 
with a life-cycle cost over $300 million, such as the passenger 
screening program, requires final approval by DHS.
    We are pleased to have the head of TSA acquisitions with us 
to discuss in detail how her office performs its critical 
functions. Specifically, the office's coordination with DHS 
procurement officials, partnership with the Science and 
Technology Directorate, engagement with the private sector, and 
due diligence in ensuring TSA makes wise investments.
    While some progress has been made in the last few years, 
shortfalls in major technology purposes like advanced imaging 
technology, or AIT, make it clear that TSA still has a long way 
to go. Now, we recognize that TSA has a very difficult job, and 
we want to work with you as we move forward in this process. We 
understand that TSA is constantly trying to respond to new 
threats, but in some cases the pressures to perform and develop 
new technologies can lead to a reactive approach without 
sufficient planning. Having a long-term plan that leverages 
experts within Government and industry can help prevent 
capability gaps.
    In 2009, the Government Accountability Office reported that 
TSA had not completed a cost-benefit analysis to prioritize and 
fund airport screening technology investments such as AIT. That 
was nearly 4 years ago, and to my knowledge no such 
comprehensive cost-benefit analysis has been completed. In 
2012, GAO reported that TSA did not fully follow DHS 
acquisition policies when acquiring AIT. That resulted in DHS 
approving AIT deployment without full knowledge of TSA's 
revised specifications for the technology.
    DHS also approved AIT deployment on the basis of 
laboratory-based testing results and initial field testing 
results, but testing wasn't actually completed until later that 
year. TSA procured AIT without DHS' full knowledge of how TSA 
would test and evaluate AIT.
    While some improvements have been made, we simply cannot 
afford to repeat these types of mistakes. I look forward to 
receiving an update from GAO today on the status of its 
findings and recommendations on AIT and other investments.
    Taking a step back from procurement, it is also important 
to recognize the role of the DHS Science and Technology 
Directorate in testing and evaluation processes for new 
technologies. Despite S&T's best efforts to assist TSA, it is 
unclear whether S&T actually has enough authority to make 
significant difference in whether TSA technology expenditures 
succeed or fail. I am eager to hear directly from S&T today on 
how the Directorate's role in the technology acquisitions 
process can be strengthened and improved.
    To the greatest extent possible I believe more transparency 
and accountability should be included in the TSA procurement 
process. The work of the GAO and DHS Office of Inspector 
General are critical in that regard, and we look forward to 
their insights here today.
    With our witnesses I hope we can identify steps to 
strengthen oversight and accountability of the key 
transportation security programs. The bottom line is TSA's 
procurement decisions impact millions of American taxpayers 
whether they fly or not. It is incumbent upon us to make sure 
taxpayer dollars are being used effectively and efficiently. I 
look forward to discussing ways we can work together to do a 
better of job of ensuring the safety of both Americans' ability 
to travel and their hard-earned tax dollars.
    The Chairman now recognizes the Ranking Minority Member of 
the subcommittee, the gentleman from Louisiana, Mr. Richmond 
for any statement he may have.
    [The statement of Mr. Hudson follows:]
                  Statement of Chairman Richard Hudson
                              May 8, 2013
    First, I would like to thank our witnesses for participating in 
this hearing. We sincerely appreciate your time, and look forward to 
your testimony.
    Our purpose today is to examine TSA procurement practices and 
identify ways this $7 billion agency can save taxpayer money and 
provide better security. Ultimately, these two goals are not mutually 
exclusive, but rather are dependent upon one another. Every dollar that 
can be saved from wasteful and duplicative programs, reforming broken 
processes, and increasing transparency can eventually be used to better 
protect passengers and confront emerging threats.
    TSA's Office of Acquisition has the lead on planning, awarding, and 
managing the acquisition program at TSA. Like other components of the 
Department of Homeland Security, TSA categorizes its programs based on 
life-cycle cost. Any program with a life-cycle cost over $300 million, 
such as the passenger-screening program, requires final approval by 
DHS.
    We are pleased to have the head of TSA Acquisitions with us to 
discuss, in detail, how her office performs its critical function. 
Specifically, the Office's:
   Coordination with DHS procurement officials,
   Partnership with the Science and Technology Directorate,
   Engagement with the private sector, and
   Due diligence in ensuring TSA makes wise investments.
    While some progress has been made in the last few years, shortfalls 
in major technology purchases, like Advanced Imaging Technology, AIT, 
make it clear that TSA still has a long way to go. We recognize that 
TSA is constantly trying to respond to new threats, but in some cases 
the pressures to perform and deploy new technologies can lead to a 
reactive approach without sufficient planning. Having a long-term plan 
that leverages experts within Government and industry can help to 
prevent capability gaps.
    In 2009, the Government Accountability Office reported that TSA had 
not completed a cost-benefit analysis to prioritize and fund airport 
screening technology investments, such as AIT. That was nearly 4 years 
ago, and to my knowledge no such comprehensive cost-benefit analysis 
has been completed.
    In 2012, GAO reported that TSA did not fully follow DHS acquisition 
policies when acquiring AIT. That resulted in DHS approving AIT 
deployment without full knowledge of TSA's revised specifications for 
the technology. DHS also approved AIT deployment on the basis of 
laboratory-based testing results and initial field-testing results, but 
testing wasn't actually completed until later that year. TSA procured 
AIT without DHS' full knowledge of how TSA would test and evaluate AIT.
    While some improvements have been made, we simply cannot afford to 
repeat these types of mistakes. I look forward to receiving an update 
from GAO today on the status of its findings and recommendations on AIT 
and other investments.
    Taking a step back from procurement, it's also important to 
recognize the role of the DHS Science and Technology Directorate in the 
testing and evaluation process for new technologies. Despite S&T's best 
efforts to assist TSA, it's unclear whether S&T actually has enough 
authority to make a significant difference in whether TSA technology 
expenditures succeed or fail. I am eager to hear directly from S&T 
today, on how the Directorate's role in the technology acquisitions 
process can be strengthened and improved.
    To the greatest extent possible, I believe more transparency and 
accountability should be included in the TSA procurement process. The 
work of the GAO and DHS Office of Inspector General are critical in 
that regard, and we look forward to their insights here today. With our 
witnesses, I hope we can identify steps to strengthen oversight and 
accountability of the key transportation security programs.
    The bottom line is TSA's procurement decisions impact millions of 
American taxpayers, whether they fly or not. It is incumbent upon us to 
make sure taxpayer dollars are being used effectively and efficiently. 
I look forward to discussing ways we can work together to do a better 
job of ensuring the safety of both Americans' ability to travel and 
their hard-earned tax dollars.
    With that, I now recognize the Ranking Member of the subcommittee, 
the gentleman from Louisiana, Mr. Richmond, for his opening statement.

    Mr. Richmond. Thank you, Mr. Chairman.
    Good afternoon to the witnesses, and thank you all for 
being here today to testify. I appreciate your work to advance 
TSA's procurement system and their willingness to have an open 
dialogue on the contracting challenges facing TSA.
    After 9/11 TSA was established to implement risk-based 
security policies that address vulnerabilities and threats to 
our transportation system. To carry out its mandate TSA must 
not only procure the right goods and services from reliable 
vendors, but it must have personnel on hand who have the 
knowledge and training to adequately review purchases.
    Unfortunately, TSA has not always purchased the right goods 
or had the technical expertise to evaluate potential purchases. 
A prime example of the failure to link technical expertise with 
successful contracting outcomes was the purchases by TSA of 
puffer machines. The Department spent about $36 million 
developing, procuring, and maintaining machines that were 
supposed to detect explosives. While they worked in the lab 
they failed in the real world. After the machines failed, TSA 
had to spend nearly $1 million to remove them from airports. 
The puffer machines have become a legendary example of a broken 
process.
    Since the puffer machines incident Congress required TSA to 
change its procurement system. When first established, TSA used 
a Department of Transportation procurement process. However, 
this process prohibited greater opportunities for small 
businesses, diluted transparency, and allowed for a lack of 
accountability across the acquisition process. Congress 
required TSA to operate under the FAR system commonly used in 
most Federal Government agencies. Under the FAR, TSA was 
required to contract with small and disadvantaged businesses.
    In fiscal year 2012 TSA spent $2.39 billion contracting for 
goods and services. I look forward to hearing from TSA about 
why it has only been able to spend about 16 percent of its 
contracting dollars with small and disadvantaged businesses, 
well short of its goal of 23 percent. This is especially 
concerning when TSA has one of the lowest small business 
contracting goals in all of DHS.
    Today we also need to evaluate the progress TSA has made in 
training its acquisition workforce to make procurement more 
efficient.
    On a final point, I look forward to hearing from the 
Inspector General about the work he has done on the 
improvements made and the challenges that remain in the TSA 
acquisition process.
    Again, I want to thank all of the witnesses who are here 
today, and I look forward to hearing your testimony.
    Mr. Chairman, thank you, and I yield back.
    [The statement of Mr. Richmond follows:]
             Statement of Ranking Member Cedric L. Richmond
                              May 8, 2013
    I want to first thank the witnesses here today. I appreciate their 
work to advance TSA's procurement system and their willingness to have 
an open dialogue on the contacting challenges facing TSA.
    After 9/11, TSA was established to implement risk-based security 
policies that address vulnerabilities and threats to our transportation 
system.
    To carry out its mandate, TSA must not only procure the right goods 
and services from reliable vendors, but it must have personnel on hand 
who have the knowledge and training to adequately review purchases.
    Unfortunately, TSA has not always purchased the right goods or had 
the technical expertise to evaluate potential purchases.
    A prime example of the failure to link technical expertise with 
successful contracting outcomes was the purchase by TSA of ``puffer 
machines.'' The Department spent about $36 million dollars developing, 
procuring, and maintaining machines that were supposed to detect 
explosives.
    While they worked in the lab, they failed in the ``real world.'' 
After the machines failed, TSA had to spend nearly $1 million to remove 
them from airports. The puffer machines have become a legendary example 
of a broken process. Since the ``puffer machines'' incident, Congress 
required TSA to change its procurement system.
    When first established, TSA used a Department of Transportation 
procurement process. However, this process prohibited greater 
opportunities for small businesses, diluted transparency, and allowed 
for a lack of accountability across the acquisition process.
    Congress required TSA to operate under the FAR--a system commonly 
used in most Federal Government agencies. Under the FAR, TSA was 
required to contract with small and disadvantaged businesses. In fiscal 
year 2012, TSA spent $2.39 billion dollars contracting for goods and 
services.
    I look forward to hearing from TSA about why it was only able to 
spend about 16% of its contracting dollars with small and disadvantaged 
businesses--well short of its goal of 23%.
    This is especially concerning when TSA has one of the lowest small 
business contracting goals in all of DHS.
    Today, we also need to evaluate the progress TSA has made in 
training its acquisition workforce to make procurement more efficient.
    On a final point, I look forward to hearing from the Inspector 
General about the work he has done on the improvements made and 
challenges that remain in the TSA acquisitions process.

    Mr. Hudson. I thank the gentleman.
    The Chairman now recognizes the Ranking Minority Member of 
the full committee, the gentleman from Mississippi, Mr. 
Thompson, for any statement he may have.
    Mr. Thompson. Thank you, Mr. Chairman. I would also like to 
thank the witnesses for appearing today.
    Last year TSA spent $2.39 billion on goods and services. As 
a Member who has conducted extensive oversight of TSA's 
procurement practices, as both Chairman and Ranking Member of 
the full committee, I appreciate the Chairman's desire to take 
a close look at how TSA spends taxpayers' dollars. Upon its 
creation in 2001 TSA was provided wide-ranging spending 
flexibility in the form of an exemption from the Federal 
Acquisition Regulations, commonly referred to as the FAR. TSA 
was also exempt from major procurement laws such as Competition 
and Contracting Act and the Small Business Act.
    In 2008 Congress acted to end TSA's exemption from the FAR, 
more closely aligning TSA's procurement authority with that of 
the rest of the Federal Government. This was done in an effort 
to level the playing field for small businesses and prevent the 
mismanagement and waste of taxpayer dollars. Unfortunately, 5 
years later, and despite being bound by the FAR, challenges 
remain with TSA's procurement activities. As evidenced by the 
on-going removal of $40 million worth of recently purchased AIT 
machines from the field due to privacy and performance 
concerns, TSA continues to spend taxpayer dollars without 
conducting due diligence.
    With the budgetary constraints we face today it is critical 
that every TSA dollar, every dollar TSA spends, goes toward 
technologies and service that work and make our transportation 
system more secure. I am interested in hearing how TSA is 
working with small businesses to enhance their opportunities to 
contract with the agency. While I appreciate that TSA has 
established a Small and Disadvantaged Business Office, I am 
concerned that the agency failed to reach its goal for 
contracting with small businesses in 2012. I look forward to 
hearing Ms. Shelton Waters plan for ensuring this shortfall is 
not repeated in 2013. Small businesses serve as both critical 
job creators and innovators in our society, and TSA should make 
certain that it takes full advantage of opportunities to do 
business with them.
    During our discussion today, Mr. Chairman, I hope the 
subcommittee remains mindful of the taxpayer dollars TSA spends 
on services, as well as goods. Based on data provided by TSA 
over the past 5 years, it has cost taxpayers an additional $75 
million to maintain contract screeners in the Screening 
Partnership Program over what it would have cost to provide 
security with TSOs. Whatever your thoughts on the use of 
private versus Federal screeners, we cannot afford to pay a 
premium for comparable services.
    With that, Mr. Chairman, I yield back the balance of my 
time.
    [The statement of Mr. Thompson follows:]
             Statement of Ranking Member Bennie G. Thompson
                              May 8, 2013
    Last year, TSA spent $2.39 billion on goods and services. As a 
Member who has conducted extensive oversight of TSA's procurement 
practices as both Chairman and Ranking Member of the full committee, I 
appreciate the Chairman's desire to take a close look at how TSA spends 
taxpayer dollars.
    Upon its creation in 2001, TSA was provided wide-ranging spending 
flexibility in the form of an exemption from the Federal Acquisition 
Regulations, commonly referred to as the FAR.
    TSA was also exempt from major procurement laws such as the 
Competition in Contracting Act and the Small Business Act.
    In 2008, Congress acted to end TSA's exemption from the FAR, more 
closely aligning TSA's procurement authority with that of the rest of 
the Federal Government.
    This was done in an effort to level the playing field for small 
businesses and prevent the mismanagement and waste of taxpayer dollars.
    Unfortunately, 5 years later, and despite being bound by the FAR, 
challenges remain with TSA's procurement activities.
    As evidenced by the on-going removal of $40 million worth of 
recently purchased AIT machines from the field due to privacy and 
performance concerns, TSA continues to spend taxpayer dollars without 
conducting due diligence.
    With the budgetary constraints we face today, it is critical that 
every dollar TSA spends goes toward technologies and services that work 
and make our transportation systems more secure.
    I am also interested in hearing how TSA is working with small 
businesses to enhance their opportunities to contract with the agency.
    While I appreciate that TSA has established a Small and 
Disadvantaged Business Office, I am concerned that the agency failed to 
reach its goal for contracting with small businesses in 2012.
    I look forward to hearing Ms. Shelton-Waters plan for ensuring this 
shortfall is not repeated in 2013.
    Small businesses serve as both critical job creators and innovators 
in our society and TSA should make certain that it takes full advantage 
of opportunities to do business with them.
    During our discussion today, Mr. Chairman, I hope the subcommittee 
remains mindful of the taxpayer dollars TSA spends on services as well 
as goods.
    Based on data provided by TSA, over the past 5 years, it has cost 
taxpayers an additional $75 million to maintain contract screeners in 
the Screening Partnership Program over what it would have cost to 
provide security with TSOs.
    Whatever your thoughts on the use of private versus Federal 
screeners, we cannot afford to pay a premium for comparable services.

    Mr. Hudson. Thank you, Mr. Thompson.
    Other Members of the committee are reminded that opening 
statements may be submitted for the record.
    We are pleased to have a distinguished panel of witnesses 
before us today. First, we have Ms. Karen Shelton Waters, who 
is the Transportation Security Administration's assistant 
administrator for the Office of Acquisition. Ms. Waters is 
responsible for the development of the contracting workforce 
and acquisition policy through the review of contract awards, 
investments, interagency agreements, and other transactions. 
Ms. Waters joined TSA in 2009. Prior to her role as assistant 
administrator, she served as deputy assistant administrator, 
chief administrative officer, with the Office of Finance and 
Administration where she provided oversight and management of 
approximately $300 million in contracts.
    Mr. Paul Benda is the Director of the Homeland Security 
Advanced Research Projects Agency at the Department of Homeland 
Security's Science and Technology Directorate. Mr. Benda is 
responsible for directing cutting-edge research being done by 
teams of National experts that develop, test, and evaluate new 
Homeland Security technologies and capabilities. These 
initiatives include the Border and Maritime Security Division, 
the Chemical and Biological Defense Division, the Cybersecurity 
Division, the Explosives Division, and the Resilient Systems 
Division.
    Mr. Stephen Lord is the Director of the Forensic Audits and 
Investigative Services team with the Government Accountability 
Office, GAO. Mr. Lord oversees a team responsible for high-
quality forensic audits and investigations of fraud, waste, and 
abuse. Prior to this position, Mr. Lord served as the director 
of homeland security and justice issues at GAO, and was 
responsible for overseeing and directing the GAO's various 
engagements in the issues related to aviation and surface 
transportation.
    Finally, Mr. Charles Edwards is the deputy inspector 
general of the Department of Homeland Security. Mr. Edwards is 
the head of the Office of Inspector General, a role he first 
attained when named acting inspector general in February 2011. 
Mr. Edwards has over 20 years of experience in the Federal 
Government and has held leadership positions at several Federal 
agencies, including TSA, the United States Postal Service's 
Office of Inspector General, and the United States Postal 
Service.
    Thank you all for being here. The Chairman recognizes Ms. 
Waters to testify.

  STATEMENT OF KAREN SHELTON WATERS, ASSISTANT ADMINISTRATOR, 
OFFICE OF ACQUISITION, TRANSPORTATION SECURITY ADMINISTRATION, 
              U.S. DEPARTMENT OF HOMELAND SECURITY

    Ms. Waters. Good afternoon, Chairman Hudson, Ranking Member 
Richmond, and distinguished Members of the subcommittee. Thank 
you for the opportunity to testify before you today.
    TSA's Office of Acquisition, or OA, plays a critical role 
in supporting TSA's counterterrorism efforts as the agency 
works to expand and improve risk-based, intelligence-driven 
security initiatives across all modes of transportation. OA is 
responsible for performing three critical functions for the 
agency. No. 1, manage programs effectively. No. 2, establish 
value-added business arrangements. No. 3, ensure contractor 
performance and delivery.
    The scope of our work is significant. In the first 2 
quarters of fiscal year 2013, we reported 1,776 contract 
actions. The total obligated dollars associated with these 
actions exceeded $681 million.
    Spending U.S. taxpayer dollars to enhance transportation 
security demands transparency and accountability. OA is 
committed to developing, implementing, and reporting 
acquisition metrics that support TSA's mission, as well as 
testing emerging technology to ensure we are deploying the best 
available technology. This requires close adherence to the 
acquisition review process, as well as strong coordination with 
DHS director operational test and evaluation, or DOT&E. Working 
with DOT&E, TSA has developed a robust evaluation capability 
for screening equipment that encompasses the full range of 
systems engineering life cycle. Additionally, TSA is developing 
a test and evaluation guide that defines the process for 
vendors, and we are exploring the use of third parties to 
conduct vendor readiness testing to mature systems. Our team 
also works with DHS Science and Technology Directorate, or S&T, 
for improved market research and analysis.
    One example of the role OA plays in supporting TSA's 
transformation to a risk-based, intelligence-driven security 
solution is the release earlier this year of a request for 
information seeking input from the contractor community 
concerning the possible expansion of expedited aviation 
physical screening initiatives.
    TSA's goal in conducting this market research is to expand 
TSA PreCheck participation by determining if certain pre-
screening processes conducted by non-Government entities could 
enhance aviation security. Specifically, we sought white papers 
that successfully demonstrate sound, well-reasoned concepts 
that if implemented would identify known travelers pre-screened 
to a high degree of confidence.
    TSA conducted two well-attended industry days to discuss 
this with stakeholders in January and February of this year. We 
also worked with the outside vendors to determine security 
equipment testing capabilities, hoping to use this data to 
assist original equipment manufacturers, or OEMs, in developing 
more mature systems prior to entering the formal test and 
evaluation phase at TSA. This market research for a third-party 
testing concept would allow OEMs the opportunity to assess 
their systems against TSA requirements, enhance and mature 
their technology readiness, and subsequently reduce the time 
required to succeed through each phase of testing at TSA.
    We believe that supporting and identifying third-party 
testing capabilities and by providing the available TSA 
requirements, OEMs will submit more mature systems to TSA for 
qualification testing, allowing TSA to meet its acquisition 
goals with a more streamlined process.
    Partnerships and industry engagement are important drivers 
of innovation at TSA. One example of this is our partnership 
with the Washington Homeland Security Roundtable, a nonprofit 
group comprised of companies that actively engage in the 
homeland security area in policy practices and procurements. 
Collaborating with them via TSA's Senior Executive Industry 
Forum provides a way to engage in meaningful dialogue between 
senior industry and TSA leadership concerning securing 
innovation. Earlier this year TSA and the WHSR also announced 
the creation of industry engagement groups and a Contracting 
Policy Focus Group, both of which are designed to strengthen 
TSA's ability to provide the most effective and efficient 
security. Engaging with industry through such efforts helps TSA 
to achieve this fundamental goal.
    Finally, strategic sourcing and consolidated purchasing 
have become very important tools at DHS for unifying the 
acquisition centers at its eight components and also for 
integrating DHS activities and technology into a more 
comprehensive single enterprise.
    Our Nation continues to face evolving threats to our 
transportation system. Acquisition management operations and 
policy play a crucial role in helping TSA implement an 
intelligence-driven, risk-based approach to security across all 
transportation modes.
    Thank you for the opportunity to appear before you today. I 
look forward to answering your questions.
    [The joint prepared statement of Ms. Waters and Mr. Benda 
follows:]
    Joint Prepared Statement of Karen Shelton Waters and Paul Benda
                              May 8, 2013
    Good afternoon Chairman Hudson, Ranking Member Richmond, and 
distinguished Members of the subcommittee. Thank you for the 
opportunity to testify today about the Transportation Security 
Administration's (TSA) acquisition and procurement policies and 
practices.
    The TSA Office of Acquisition's (OA) mission is to enhance TSA's 
capabilities to protect the Nation's transportation systems by 
providing effective and efficient acquisition and procurement services. 
OA plays a critical role in supporting TSA's counterterrorism efforts 
as the agency works to expand and improve our risk-based, intelligence-
driven security approach across all modes of transportation. We do this 
by managing programs through all phases of the Acquisition Life Cycle 
to ensure that they are planned and executed properly to accomplish 
outcomes on time and within budget. OA also develops procurement 
instruments that use business strategies that maximize value for the 
agency. In addition, we provide contract oversight while managing our 
vendor relationships to ensure that TSA gets the intended return on 
investment for procurement dollars spent.
    To fulfill its security responsibilities for deploying and 
operating state-of-the-art security technology at over 450 airports 
across the Nation, TSA must be able to rapidly deploy technology to 
respond to changing threat information, or to have equipment ready to 
deploy when airport facilities are changed to accommodate the 
equipment. In the first two quarters of fiscal year 2013, TSA executed 
a total of 1,776 contract actions exceeding $681 million in support of 
all TSA contract requirements. To ensure we continue to act as 
responsible stewards of taxpayer dollars, we are developing, 
implementing, and reporting acquisition metrics that coincide with 
TSA's mission and vision as well as fully and adequately testing 
emerging technologies to ensure we are deploying and relying upon the 
best technologies available to protect transportation systems and 
travelers.
     collaboration within the department of homeland security (dhs)
    TSA completes acquisition and procurement measures in close 
coordination with DHS acquisition-related organizations. This includes 
a robust test and evaluation capability that is utilized on screening 
equipment and encompasses the range of the systems' engineering life 
cycle from developmental to operational test and evaluation (T&E). The 
TSA T&E program, which is conducted by the Operational Test Agent and 
approved by DHS through appropriate Test and Evaluation Master Plans, 
provides key insights into capabilities and limitations of all tested 
systems and technologies. Additionally, TSA is developing a test and 
evaluation guide that defines the process for vendors and explores the 
use of third parties to conduct vendor readiness testing to mature 
systems. TSA is working with the DHS Science and Technology Directorate 
(S&T) to conduct market research and analysis in this area and we 
anticipate that the guide will be ready for release in the summer.
    DHS uses strategic sourcing initiatives to leverage the purchasing 
power of the entire Department for a variety of items including 
screening technology. While TSA continues to utilize existing DHS 
strategic sourcing vehicles, we have also been designated the Executive 
Agent/Contracting Activity for security screening equipment that can be 
utilized by other DHS components. By consolidating the Department's 
spending into a single vehicle, DHS expects savings in terms of 
acquisition process as well as in actual procurement costs.
                           testing innovation
    TSA believes that by its supporting and identifying third-party 
testing capabilities and by providing the Original Equipment 
Manufacturers (OEMs) and potential testers, such as universities and 
laboratories, with the applicable TSA requirements and testing 
documentation specific to the systems under development, the OEMs will 
submit more mature systems to TSA for qualification testing. In 
December 2012, TSA issued a Request for Information (RFI) to solicit 
input from security equipment testing entities regarding their 
capabilities to perform developmental test and evaluation of 
Transportation Security Equipment (TSE) and to provide this information 
to OEMs, vendors that originally manufactured the equipment. In an 
effort to expedite the testing, acquisition, and deployment of 
qualified systems, TSA promotes the establishment of preliminary system 
development gateways by identifying capable third-party testing 
facilities. The purpose of creating these gateways is to assist OEMs in 
developing more mature systems prior to entering the formal TSA test 
and evaluation process. This allows OEMs to assess their systems 
against TSA requirements, enhance and mature their technology 
readiness, and subsequently reduce the time required to proceed through 
each phase of TSA testing.
                          industry engagement
    Partnerships and industry engagement are important drivers of 
innovation at TSA, and OA plays an important role in supporting TSA's 
efforts to work with the private sector to develop and deploy 
innovative and effective screening capabilities across the Nation's 
transportation systems.
    In December 2011, TSA executed a Memorandum of Understanding (MOU) 
with the Washington Homeland Security Roundtable (WHSR), a non-profit 
group comprised of companies that are actively engaged in homeland 
security issues. This MOU established a framework for an on-going 
dialogue between TSA representatives and WHSR members concerning 
security innovations. In February 2013, TSA and WHSR announced the 
creation of the Industry Engagement Group, which provides private-
sector companies and organizations with opportunities to work with TSA 
at an enterprise level. This group will not discuss specific 
acquisitions or TSA programs, but rather focuses on identifying methods 
and processes by which TSA can effectively engage with industry on 
matters related to acquisition. The WHSR has also established a TSA 
Contracting/Acquisition Policy Focus Group. This group gathers 
participants' input on policies, regulations, and current practices to 
drive the content and costs of the contracting process so as to 
increase effectiveness and efficiency.
    Additional industry engagement activities include TSA participation 
in monthly discussions with the Security Manufacturers Coalition 
regarding future programmatic direction, challenges, and interests. 
This group was created by the security technology manufacturers 
themselves, and the members must be active vendors of DHS security 
technology. TSA also interacts with the Airport Consultants Council 
(ACC), which is involved in the development and operations of airports 
and related facilities. TSA participates in an annual Technology Day 
with ACC and receives input from the organization regarding TSA 
processes and planning.
    TSA also recognizes that small businesses are of vital importance 
to the economic strength of the country. Each year, TSA hosts the Small 
Business Fair, which provides an opportunity for a range of vendors to 
discuss their products while also learning more about TSA's acquisition 
requirements. We also contribute to vendor outreach events across the 
country through field office participation. In fiscal year 2012, TSA 
obligated $289 million to small businesses in over 2,000 contract 
actions; additionally, TSA exceeded its Small Disadvantaged and Service 
Disabled Veteran-Owned Small Business Goals.
                               conclusion
    Acquisition operations and policy play a crucial role in helping 
TSA and DHS S&T implement an intelligence-driven, risk-based approach 
to security across all transportation modes while implementing 
operational and management efficiencies across the organization. As we 
strive to continue strengthening transportation security and improving, 
whenever possible, the overall travel experience for all Americans, we 
must always remember that our success is defined by our people. Whether 
it is for business or for pleasure, the freedom to travel from place to 
place is fundamental to our way of life, and to do so securely is a 
goal to which everyone at TSA and DHS S&T is fully committed. Thank you 
for the opportunity to appear before you today and I look forward to 
answering your questions.

    Mr. Barletta [presiding]. Thank you, Ms. Waters.
    The Chairman recognizes Mr. Benda to testify.

 STATEMENT OF PAUL BENDA, DIRECTOR, ADVANCED RESEARCH PROJECTS 
 AGENCY, SCIENCE & TECHNOLOGY DIRECTORATE, U.S. DEPARTMENT OF 
                       HOMELAND SECURITY

    Mr. Benda. Good afternoon, Mr. Barletta, Ranking Member 
Richmond, and Mr. Thompson. I appreciate the opportunity to 
come before you today to discuss the Science and Technology 
Directorate's activities in support of TSA. If I could have 
your forbearance for a couple of minutes I would like to say a 
few brief introductory words for S&T. S&T supports DHS 
components and first responders across the homeland security 
enterprise. We focus on technology and knowledge development 
that will make their operations more effective and efficient, 
we build partnerships across the interagency to ensure we 
leverage everyone else's R&D, we basically beg, borrow, and 
steal technology and capabilities where we can find it to 
leverage it against homeland security challenges, we provide 
acquisition support to DHS components by being the technical 
and scientific core of the Department.
    But I would like to start our conversation here today with 
a question, which is: Why invest in S&T? In this era of austere 
budgets, where we have trouble fully funding our front-line 
operations, why should we set money aside for S&T? I think 
there is two reasons behind that. One is an adaptive adversary. 
As we can see on aviation security, we have moved from the 
Lockerbie bombings, which was explosives in checked bags, to 
armed assaults on 9/11, to explosives in printer toner 
cartridges.
    Another is the inexorable march of commerce. Currently, TSA 
screens 2 million domestic air travel passengers a day. They 
expect a growth of 4 to 5 percent per year of travel, which 
means in 5 years you will have 2.5 million passengers 
transiting through our airports, an increase of 500,000 people. 
With the budgets that we have today and expectations that 
staffing levels will remain flat, how do we maintain the 
throughput and the security that is required to keep commerce 
and travel safe? We believe that technology can serve that 
role.
    So the challenge we have is, in this budget environment how 
can we do that? One of the ways we do that is trying to 
leverage the investments made by the Department of Defense, or 
DOD. We are positioning ourselves as the transition partner for 
DOD's R&D and their technologies. We have examples where we 
have leveraged a $25 million program from DARPA and actually 
transitioned that capability into an operational capability for 
an explosive detection system. We have partnered with SOCOM in 
developing a classified capability for the U.S. Secret Service 
that has actually reduced the cost of that capability 
development by over 80 percent, saving around $8 million.
    We work closely with the intel community and CIA's In-Q-
Tel, which is a strategic investment firm. For every dollar S&T 
invests, we get $3 matching from the intelligence community and 
$9 from the private investment community. It is this leveraging 
of others' investments that S&T brings to TSA's problems. But 
the challenge we have is making sure that the investments that 
we make at S&T address TSA's key priorities. To solve that we 
are working to develop R&D strategies. Basically we have 
conversations with senior leadership of the components at the 
assistant administrator, assistant secretary level. We ask them 
to outline what are their key priorities and key challenges. We 
document that, and in fact we are co-writing that R&D strategy 
as we speak with the chief technical officer at TSA, Assistant 
Administrator Sanders, and we will co-sign that strategy. Once 
that is complete, we map our S&T investments against that 
strategy so we can ensure every dollar spent on S&T is on a 
need that the components have.
    But the key isn't only making sure our investments align 
against TSA's needs, but give an industry insight into where we 
are going. We think it is essential that we provide a road map 
to industry on the challenges the components face and the S&T 
investments we are making to meet those challenges. So every 
R&D strategy will be briefed to industry. In fact, we briefed 
our first webinar, which was a briefing on R&D strategies last 
week, which was received by industry as an unmitigated success. 
We plan to do that for all of our R&D strategies.
    So this partnership with S&T and TSA has never been 
stronger and has begun to bear fruit. In fact, TSA has 
designated HSARPA as their lead for developmental test and 
evaluation for explosive detection devices. This, combined with 
our statutory role in operational test and evaluation, should 
create a seamless process for industry and TSA when it comes to 
testing.
    We have worked with TSA where they now force vendors to 
provide the raw data from their explosive detection machines, 
basically breaking up the proprietary stranglehold that those 
vendors had on that data. This is really important because it 
allows to us spur innovation and let small businesses have 
access to those algorithms. Whereas before had you a single 
vendor that provided a single answer, we can now invite small 
businesses to see if they can come up with better ways to 
manipulate that data to get a better answer out.
    But perhaps most exciting are the advances we see in new 
technologies coming down the pike. Working with prestigious 
universities across the country, we have actually developed the 
next-generation AIT machine. We hope to have a prototype within 
the next 3 years, but basically instead of walking into an AIT 
and getting a single picture, we hope to have a walk-through 
AIT machine. We are going to couple that with investment that 
industry has made on a new type of X-ray technology that will 
not only get a better picture, but actually identify what is in 
the bag.
    So the vision is within 3 years you will be able to walk up 
to a checkpoint, drop your bag on a conveyor belt, walk through 
an AIT, and pick up your bag. You will not have to take your 
shoes off, your belt off, or empty your pockets. We believe 
within 3 years we will have that prototype.
    This is only possible because of the strong partnership 
that S&T and TSA has made. We believe that this unprecedented 
partnership that has been built will vastly improve the 
traveling public's experience and change the face of aviation 
security as we know it. Thank you for your time and attention, 
and I will be happy to answer any questions you have.
    Mr. Barletta. Thank you, Mr. Benda.
    The Chairman recognizes Mr. Lord to testify.

  STATEMENT OF STEPHEN M. LORD, DIRECTOR, FORENSIC AUDITS AND 
 INVESTIGATIVE SERVICES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Lord. Thank you, Representative Barletta, Ranking 
Members Richmond and Thompson. I am really happy to be here 
today to discuss the large body of work we completed on TSA's 
acquisitions and related technologies. This is really an 
important issue as these systems represent billions of dollars 
of life-cycle costs. I think if you look at our work very 
broadly and not get into the weeds of any particular port, you 
will see that we have identified three key challenges across 
our work.
    The first underscores the importance of setting clear 
requirements at the start of a program. The second issue is the 
importance of testing technology before you field it. As 
Representative Richmond noted, TSA has had some unfortunate 
examples in the past. Hopefully, those have all been 
successfully addressed. The third issue is delivering systems 
on time and within budget and having a good documentary trail 
to show that has actually taken place.
    In terms of setting requirements, we issued a January 2012 
report on the advanced imaging technology system, and we noted 
in the report that the technology met evolving requirements but 
not the original requirements that were approved at the start 
of the acquisition. We also looked at the way these changes 
were documented and approved in the Department and we didn't 
really see a clear rationale or reasons for why these changes 
took place. It just underscores again the importance of having 
a good set of foundation documents to lay all this out.
    As part of this review we also recommended that TSA develop 
a road map to keep senior management better-informed about 
where the technology was going and what success they were 
having in meeting any new requirements or milestones.
    In terms of the second key issue we have identified--
testing--our work has clearly shown the importance of testing 
technology before fielding it. Otherwise sometimes you 
encounter unsuccessful acquisition outcomes. For example, we 
recently issued a canine report which shows that TSA deployed, 
ramped up their canine program while they were in the middle of 
assessing their operational effectiveness. So, again, you can 
do that, but it is considered a higher-risk strategy. We 
thought it was really important that they do this for this new 
type of canine, they are called passenger screening canines. 
They attempt to detect explosives on a passenger moving through 
the airport terminal in contrast to conventional canines which 
tend to be used in other areas. Hopefully this testing is going 
to allow TSA to determine two important things: Whether the 
passenger screening canines work better than conventional 
canines, whether they are more effective, and where in the 
airport they work best, in the screening area, in the sterile 
area, or in the public lobby area?
    Our work has also underscored the importance of developing 
good baseline measures of cost, schedule, and performance at 
the start of the program, not while the program is already 
underway or if you have already spent precious taxpayer 
resources. The good news is, in response to the challenges we 
have identified in our past report, TSA has taken several 
important actions to rectify these issues. More broadly at the 
Department, the Department of Homeland Security recognizes they 
have had some weaknesses in this area in adhering to their 
governance structure and are taking some additional steps and 
developing some new tools to ensure more successful acquisition 
outcomes.
    But if you looked at the Department more broadly, it is 
clear that significant work still remains. DHS major 
acquisitions continue, they cost more than expected, take 
longer to deploy than planned, and deliver less capability than 
promised. For example, we did a recent report in which we 
noticed that 16 of 42 DHS acquisition programs experienced cost 
growth of 166 percent over 3 years, and that is a pretty big 
jump.
    In closing, our past work has underscored the importance of 
clearly defining and consistently implementing acquisition 
policies and procedures, and having a capable workforce and 
most importantly a supportive management culture to allow these 
procedures to be adhered to and the acquisitions to move 
forward. Doing so will help ensure a good outcome and help 
ensure precious taxpayer dollars are spent wisely.
    Mr. Chairman, this concludes my statement, and I look 
forward to your questions.
    [The prepared statement of Mr. Lord follows:]
                 Prepared Statement of Stephen M. Lord
                              May 8, 2013
                             gao highlights
    Highlights of GAO-13-469T, a testimony before the Subcommittee on 
Transportation Security, Committee on Homeland Security, House of 
Representatives.
Why GAO Did This Study
    TSA acquisition programs represent billions of dollars in life-
cycle costs and support a range of aviation security programs, 
including technologies used to screen passengers and checked baggage. 
Within DHS, TSA is responsible for establishing requirements for 
testing and deploying transportation system technologies. Since 2010, 
GAO has reported that DHS and TSA faced challenges in managing 
acquisition efforts, including deploying technologies that did not meet 
requirements and were not appropriately tested and evaluated.
    As requested, this testimony discusses: (1) The extent to which TSA 
addressed challenges relating to developing and meeting program 
requirements, testing new screening technologies, and delivering 
capabilities within cost and schedule estimates for selected programs, 
and (2) DHS efforts to strengthen oversight of component acquisition 
processes. This testimony is based on GAO products issued from January 
2010 through January 2013, including selected updates conducted in 
March 2013 on TSA's efforts to implement GAO's prior recommendations 
and preliminary observations from on-going work. To conduct the updates 
and on-going work, GAO analyzed documents, such as the AIT road map, 
and interviewed TSA officials.
What GAO Recommends
    GAO has made recommendations to DHS and TSA in prior reports to 
help strengthen its acquisition processes and oversight. DHS and TSA 
generally concurred and are taking actions to address them.
homeland security.--dhs and tsa continue to face challenges developing 
                  and acquiring screening technologies
What GAO Found
    The Transportation Security Administration (TSA) has taken and is 
taking steps to address challenges related to developing, testing, and 
delivering screening technologies for selected aviation security 
programs, but challenges remain. For example, in January 2012, GAO 
reported that TSA faced challenges developing and meeting key 
performance requirements for the acquisition of advanced imaging 
technology (AIT)--i.e., full-body scanners. Specifically, GAO found 
that TSA did not fully follow Department of Homeland Security (DHS) 
acquisition policies when acquiring AIT, which resulted in DHS 
approving Nation-wide AIT deployment without full knowledge of TSA's 
revised specifications. DHS required TSA to notify DHS's Acquisition 
Review Board (ARB) if AIT could not meet any of TSA's five key 
performance parameters or if TSA changed a key performance parameter 
during testing. However, GAO found that the ARB approved TSA for full-
scale production without reviewing the changed parameter. DHS officials 
said that the ARB should have formally reviewed this change to ensure 
that TSA did not change it arbitrarily. GAO recommended that TSA 
develop a road map that outlines vendors' progress in meeting all key 
performance parameters. DHS agreed, and developed a road map to address 
the recommendation, but faces challenges implementing it--e.g., due to 
vendor delays. Additionally, in January 2013, GAO reported that TSA 
faced challenges related to testing and deploying passenger screening 
canine teams. Specifically, GAO concluded that TSA began deploying 
these canine teams to airport terminals in April 2011 prior to 
determining the canine teams' operational effectiveness. In June 2012, 
DHS and TSA began conducting operational assessments to help 
demonstrate canine teams' effectiveness. Also, TSA began deploying 
teams before it had completed an assessment to determine where within 
the airport the canine teams would be most effectively utilized. GAO 
recommended that on the basis of DHS assessment results, TSA expand and 
complete testing to assess the effectiveness of canine teams in areas 
of the airport deemed appropriate. DHS agreed and officials said that 
as of April 2013, TSA had concluded testing in collaboration with DHS 
of canine teams in airport sterile areas--in general, areas of an 
airport for which access is controlled through screening of persons and 
property--and is testing teams on its own in airport sterile and public 
areas.
    DHS has some efforts under way to strengthen its oversight of 
component investment and acquisition processes, but additional actions 
are needed. In September 2012, GAO reported that while DHS had 
initiated efforts to address the Department's acquisition management 
challenges, most of DHS's major acquisition programs continue to cost 
more than expected, take longer to deploy than planned, or deliver less 
capability than promised. GAO identified 42 DHS programs that 
experienced cost growth, schedule slips, or both, with 16 of the 
programs' costs increasing from a total of $19.7 billion in 2008 to 
$52.2 billion in 2011--an aggregate increase of 166 percent. GAO 
concluded that DHS recognized the need to implement its acquisition 
policy more consistently, but that significant work remained. GAO 
recommended that DHS modify acquisition policy to better reflect key 
program and portfolio management practices and ensure acquisition 
programs fully comply with DHS acquisition policy. DHS agreed, and in 
September 2012 officials stated that it was in the process of revising 
its policy to more fully reflect key program management practices.
    Chairman Hudson, Ranking Member Richmond, and Members of the 
committee: I am pleased to be here today to discuss our work examining 
the Transportation Security Administration's (TSA) efforts to develop 
and acquire new technologies to address homeland security needs. Within 
the Department of Homeland Security (DHS), TSA is responsible for 
securing the Nation's transportation systems. TSA's acquisition 
programs represent billions of dollars in life-cycle costs and support 
a wide range of aviation security missions and investments, including 
technologies used to screen passengers, checked baggage, and air cargo, 
among others. For example, technologies used to screen passengers 
include advanced imaging technology (AIT), commonly referred to as 
full-body scanners, that screen passengers for metallic and nonmetallic 
threats such as weapons, explosives, and other objects concealed under 
layers of clothing, and passenger screening canines trained to detect 
explosives being carried or worn by passengers.\1\ In addition, 
technologies used to screen checked baggage include explosives 
detection systems (EDS), which use X-rays with computer-aided imaging 
to automatically measure the physical characteristics of objects in 
baggage.\2\ Consistent with its responsibility, TSA establishes 
requirements for testing and deploying these technologies to, for 
example, screen airline passengers and their property.
---------------------------------------------------------------------------
    \1\ Although canines are not considered a technology, they have 
been included in this testimony as one of the layers TSA relies on to 
screen passengers, baggage, and air cargo for explosives odor.
    \2\ An EDS automatically triggers an alarm when objects that 
exhibit the physical characteristics of explosives are detected.
---------------------------------------------------------------------------
    Since 2010, we have reported that DHS and TSA have experienced 
challenges in managing their multi-billion-dollar acquisition efforts, 
including implementing technologies that did not meet intended 
requirements and were not appropriately tested and evaluated, and not 
consistently completing analyses of costs and benefits before 
technologies were deployed for operational use. As requested, my 
testimony provides an update on that work, including: (1) The extent to 
which TSA has addressed challenges relating to developing and meeting 
program requirements, testing new screening technologies, and 
delivering capabilities within agreed-upon cost and schedule estimates 
for select programs, and (2) DHS efforts to strengthen its oversight of 
component investment and acquisition processes.
    This statement is based on GAO reports and testimonies issued from 
January 2010 through January 2013, including selected updates conducted 
in March 2013 on TSA's efforts to implement our prior 
recommendations.\3\ Specifically, to conduct these updates, we obtained 
information from TSA on the status of the current EDS acquisition and 
upgrades to existing systems, as well as on testing of passenger 
screening canine teams. Our previous reports incorporated information 
we obtained and analyzed from TSA and DHS officials on efforts to 
manage, test, acquire, deploy, and oversee various technology programs, 
including program schedules, planning documents, testing reports, and 
other acquisition documentation. Our previously published products 
contain additional details on the scope and methodology of our reports.
---------------------------------------------------------------------------
    \3\ See the related GAO products list at the end of this statement.
---------------------------------------------------------------------------
    In addition, this statement includes preliminary observations based 
on on-going work we conducted during the winter of 2013 at your 
request, assessing the effectiveness of AIT equipped with automated 
target recognition (ATR) software.\4\ As part of this on-going work, we 
analyzed documents and interviewed TSA officials on the status of AIT 
development and deployment efforts and milestones. All of our work 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. For new 
information that was based on work not previously reported, we obtained 
TSA's views on our findings and incorporated technical comments where 
appropriate.
---------------------------------------------------------------------------
    \4\ We plan to issue a report with the results from this work in 
the fall of 2013. AIT systems equipped with ATR software display 
anomalies that could pose a threat using a generic figure for all 
passengers.
---------------------------------------------------------------------------
                               background
    In 2003, we designated implementing and transforming DHS as high-
risk because DHS had to transform 22 agencies--several with major 
management challenges--into one department.\5\ Further, failure to 
effectively address DHS's management and mission risks could have 
serious consequences for U.S. National and economic security. Given the 
significant effort required to build and integrate a department as 
large and complex as DHS, our initial high-risk designation addressed 
the Department's initial transformation and subsequent implementation 
efforts, to include associated management and programmatic challenges. 
At that time, we reported that the creation of DHS was an enormous 
undertaking that would take time to achieve, and that the successful 
transformation of large organizations, even those undertaking less 
strenuous reorganizations, could take years to implement.
---------------------------------------------------------------------------
    \5\ GAO, High-Risk Series: Government-wide 2013 Update and Progress 
Made by the Department of Homeland Security, GAO-13-444T (Washington, 
DC: Mar. 21, 2013).
---------------------------------------------------------------------------
    As DHS continued to mature, and as we reported in our assessment of 
DHS's progress and challenges 10 years after the terrorist attacks of 
September 11, 2001, we found that the Department implemented key 
homeland security operations and achieved important goals in many areas 
to create and strengthen a foundation to reach its potential.\6\ As a 
result, we narrowed the scope of the high-risk area and changed the 
name from Implementing and Transforming the Department of Homeland 
Security to Strengthening the Department of Homeland Security 
Management Functions. Recognizing DHS's progress in transformation and 
mission implementation, our 2011 high-risk update focused on the 
continued need to strengthen DHS's management functions (acquisition, 
information technology, financial management, and human capital) and 
integrate those functions within and across the Department, as well as 
the impact of these challenges on the Department's ability to 
effectively and efficiently carry out its missions.
---------------------------------------------------------------------------
    \6\ GAO, Department of Homeland Security: Progress Made and Work 
Remaining in Implementing Homeland Security Missions 10 Years after 9/
11, GAO-11-881 (Washington, DC: Sept. 7, 2011).
---------------------------------------------------------------------------
    The Aviation and Transportation Security Act (ATSA) established TSA 
as the Federal agency with primary responsibility for securing the 
Nation's civil aviation system, which includes the screening of all 
passengers and property transported to, from, and within the United 
States by commercial passenger aircraft.\7\ In response to the December 
25, 2009, attempted terrorist attack on Northwest Airlines Flight 253, 
TSA revised its procurement and deployment strategy for AIT, commonly 
referred to as full-body scanners, increasing the number of AIT units 
it planned to procure and deploy. TSA stated that AIT provides enhanced 
security benefits compared with walk-through metal detectors, such as 
enhanced detection capabilities for identifying non-metallic threat 
objects and liquids. In July 2011, TSA began installing ATR software on 
deployed AIT systems designed to address privacy concerns by 
eliminating passenger-specific images. As of May 2013, TSA had deployed 
about 750 AIT systems to more than 200 airports, most of which were 
equipped with ATR software. In January 2012, we issued a classified 
report on TSA's procurement and deployment of AIT that addressed the 
extent to which: (1) TSA followed DHS acquisition guidance when 
procuring AIT, and (2) deployed AIT units are effective at detecting 
threats. Pursuant to the FAA Modernization and Reform Act of 2012, TSA 
was mandated to ensure that all AIT systems used to screen passengers 
are equipped with and employ ATR software by June 1, 2012.\8\ 
Consistent with provisions of the law, TSA subsequently extended this 
deadline to June 1, 2013.\9\
---------------------------------------------------------------------------
    \7\ See Pub. L. No. 107-71, 115 Stat. 597 (2001). For purposes of 
this testimony, ``commercial passenger aircraft'' refers to a U.S.- or 
foreign-flagged air carrier operating under TSA-approved security 
programs with regularly scheduled passenger operations to or from a 
U.S. airport.
    \8\ See Pub. L. No. 112-95,  826, 126 Stat. 11, 132-33 (2012) 
(codified at 49 U.S.C.  44901(l)).
    \9\ On March 26, 2013, TSA published a Notice of Proposed 
Rulemaking in the Federal Register soliciting public comment on the use 
of AIT as a primary means for screening passengers. See 78 Fed. Reg. 
18,287 (Mar. 26, 2013).
---------------------------------------------------------------------------
     tsa has taken some steps to address challenges identified in 
   developing, testing, and delivering select screening technologies
    While TSA has taken some steps and is taking additional steps to 
address challenges related to developing, testing, and delivering 
screening technologies for selected aviation security programs, 
additional challenges remain.
Developing and Meeting Key Performance Requirements for TSA Screening 
        Technologies
    As we have reported in the past few years, it is difficult to fully 
assess program performance without establishing valid baseline 
requirements in key foundation documents at the program start. 
According to best practices established in prior work on major 
acquisitions, without the development, review, and approval of key 
acquisition documents, such as the mission need statement and the 
operational requirements document, agencies are at risk of having 
poorly-defined requirements that can negatively affect program 
performance and contribute to increased costs.\10\ Specifically, we 
have reported in the past few years that TSA has faced challenges in 
developing and meeting program requirements in some of its aviation 
security programs. For example:
---------------------------------------------------------------------------
    \10\ GAO, Best Practices: An Integrated Portfolio Management 
Approach to Weapon System Investments Could Improve DOD's Acquisition 
Outcomes, GAO-07-388 (Washington, DC: Mar. 30, 2007). The mission need 
statement outlines the specific functional capabilities required to 
accomplish DHS's mission and objectives, along with deficiencies and 
gaps in these capabilities. The operational requirements document 
includes key performance parameters and describes the mission, 
capabilities, and objectives to provide needed capabilities.
---------------------------------------------------------------------------
    AIT.--In January 2012 we concluded that TSA did not fully follow 
DHS acquisition policies when acquiring AIT, which resulted in DHS 
approving full AIT deployment without full knowledge of TSA's revised 
specifications.\11\ Specifically, DHS's Acquisition Management 
Directive 102-01 (AD 102) required TSA to notify DHS's Acquisition 
Review Board (ARB) if AIT could not meet any of TSA's five key 
performance parameters or if TSA changed a key performance parameter 
during qualification testing.\12\ Senior TSA officials acknowledged 
that TSA did not comply with the directive's requirements, but stated 
that TSA still reached a ``good decision'' in procuring AIT and that 
the ARB was fully informed of the program's changes to its key 
performance parameters. Further, TSA officials stated that the program 
was not bound by AD 102 because it was a new acquisition process and 
they believed that the ARB was not fully functioning at the time.\13\ 
DHS officials stated that the ARB discussed the changed key performance 
parameter but did not see the documents related to the change and 
determined that TSA must update the program's key acquisition document, 
the Acquisition Program Baseline, before TSA could deploy AIT systems. 
However, we concluded that, according to a February 2010 acquisition 
decision memorandum from DHS, the ARB gave approval to TSA for full-
scale production without reviewing the changed key performance 
parameter. DHS officials stated that the ARB should have formally 
reviewed changes made to the key performance parameter to ensure that 
TSA did not change it arbitrarily. According to TSA, it should have 
submitted its revised requirements for approval, but it did not because 
there was confusion as to whether DHS should be informed of all 
changes. Acquisition best practices state that programs procuring new 
technologies with fluctuating requirements pose challenges to agencies 
ensuring that the acquisition fully meets program needs.\14\ DHS 
acquisition oversight officials agreed that changing key requirements 
is not a best practice for system acquisitions already under way. As a 
result, we found that TSA procured and deployed a technology that met 
evolving requirements, but not the initial requirements included in its 
key acquisition requirements document that the agency initially 
determined were necessary to enhance aviation security. We recommended 
that TSA develop a road map that specifies development milestones for 
AIT and have DHS acquisition officials approve the road map. DHS agreed 
with our recommendation and has taken actions to address it, which we 
discuss below.
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    \11\ In January 2012, we issued a classified report on TSA's 
procurement and deployment of AIT at airport checkpoints.
    \12\ AD 102 (effective November 7, 2008) and its associated 
instruction manual establish the Department's policies and processes 
for managing major acquisition programs. DHS generally defines major 
programs as those expected to cost at least $300 million over their 
respective life cycles, and many are expected to cost more than $1 
billion. The ARB, now called the Investment Review Board, is the cross-
component board within DHS that determines whether a proposed 
acquisition has met the requirements of key phases in the acquisition 
life-cycle framework and is able to proceed to the next phase and 
eventual full production and deployment. Key performance parameters 
(KPP) are system characteristics that are considered critical or 
essential. Failure to meet a KPP could be the basis to reject a system 
solution.
    \13\ DHS's Under Secretary for Management issued a memorandum on 
November 7, 2008, requiring compliance with the directive at the 
program's next formal decision point, but no later than 6 months from 
the date of the directive (by May 2009). DHS acquisition officials 
stated that enforcing compliance with the new policy took almost 1 
year, but that it worked with TSA to make the directive's requirements 
known. However, DHS's previous directive--Management Directive 1400, 
which AD 102 superseded--also required component agencies to follow a 
similar process whereby programs were reviewed by DHS's Investment 
Review Board. Accordingly, the Investment Review Board began reviewing 
TSA's AIT program (at that time called the Whole Body Imager) as early 
as 2008.
    \14\ GAO, Defense Acquisitions: Managing Risk to Achieve Better 
Outcomes, GAO-10-374T (Washington, DC: Jan. 20, 2010).
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    EDS.--In July 2011, we found that TSA revised its EDS requirements 
to better address current threats, and had plans to implement these 
requirements in a phased approach.\15\ However, we found that some 
number of EDS machines in TSA's checked baggage screening fleet were 
configured to detect explosives at the levels established in 2005 and 
that the remaining EDS machines are configured to detect explosives at 
levels established in 1998.\16\ When TSA established the 2005 
requirements, it did not have a plan with the appropriate time frames 
needed to deploy EDS machines that meet the requirements. To help 
ensure that TSA's checked baggage-screening machines are operating most 
effectively, we recommended that TSA develop a plan to deploy EDSs that 
meet the most recent explosive detection requirements established in 
2010 and ensure that new machines, as well as machines already deployed 
in airports, will be operated at the levels established in those 
requirements. DHS concurred with our recommendation and has begun 
taking action to address it. Specifically, in April 2012, TSA reported 
that it had awarded contracts to vendors to implement detection 
upgrades across the currently deployed EDS fleet to meet the 2010 
requirements. In March 2013, TSA reported that it plans to complete 
upgrading the currently deployed fleet by the end of fiscal year 2013. 
However, our recommendation is intended to ensure that EDS machines in 
use at airports meet the most recent detection requirements--both 
previously deployed units as well as newly-procured machines. Until TSA 
develops such a plan, it will be difficult for the agency to provide 
reasonable assurance that its upgrade approach is feasible or cost-
effective.
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    \15\ GAO, Aviation Security: TSA Has Enhanced Its Explosives 
Detection Requirements for Checked Baggage, but Additional Screening 
Actions Are Needed, GAO-11-740 (Washington, DC: Jul. 11, 2011).
    \16\ Details on the number of EDS machines were omitted because TSA 
deemed them Sensitive Security Information, which must be protected 
from public disclosure pursuant to 49 C.F.R. part 1520.
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Testing New Screening Technologies
    As we have reported in the past few years, TSA has not always 
resolved problems discovered during testing, which has led to costly 
redesign and rework at a later date, as shown in the following 
examples. We concluded that addressing such problems before moving to 
the acquisition phase can help agencies better manage costs. 
Specifically:
    Canines.--In January 2013, we found that TSA began deploying 
passenger screening canine teams to airport terminals in April 2011 
prior to determining the teams' operational effectiveness.\17\ 
According to TSA officials, operational assessments did not need to be 
conducted prior to deployment because canines were being used to screen 
passengers by other entities, such as airports in the United Kingdom. 
In June 2012, the DHS Science and Technology Directorate (S&T) and TSA 
began conducting operational assessments to help demonstrate the 
effectiveness of passenger screening canine teams.\18\ We recommended 
that on the basis of the results of DHS's assessments, TSA expand and 
complete operational assessments of passenger screening canine teams, 
including a comparison with conventional explosives detection canine 
teams before deploying passenger screening canine teams on a Nation-
wide basis to determine whether they are an effective method of 
screening passengers in the U.S. airport environment, particularly 
since they cost the Federal Government more than TSA's conventional 
canine teams.\19\ Additionally, we found that TSA began deploying 
passenger screening canine teams before it had completed an assessment 
to determine where within the airport (i.e., the public, checkpoint, or 
sterile areas) the teams would be most effectively utilized.\20\ TSA 
leadership focused on initially deploying passenger screening canine 
teams to a single location within the airport--the sterile area--
because it thought it would be the best way to foster stakeholders' 
acceptance of the teams. However, aviation stakeholders we interviewed 
at the time raised concerns about this deployment strategy, stating 
that passenger screening canine teams would be more effectively 
utilized in nonsterile areas of the airport, such as curbside or in the 
lobby areas. DHS concurred with our recommendation to expand and 
complete testing to assess the effectiveness of the teams in areas of 
the airport deemed appropriate. As of April 2013, TSA concluded testing 
with DHS S&T of passenger screening canine teams in the sterile areas 
of airports, and TSA is still in the process of conducting its own 
testing of the teams in the sterile and public areas of the airports.
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    \17\ GAO, TSA Explosives Detection Canine Program: Actions Needed 
to Analyze Data and Ensure Canine Teams Are Effectively Utilized, GAO-
13-239 (Washington, DC: Jan. 31, 2013).
    \18\ The results were deemed sensitive security information by TSA. 
DHS S&T has responsibility for coordinating and conducting basic and 
applied research, development, demonstration, testing, and evaluation 
activities relevant to DHS components.
    \19\ TSA's conventional explosives detection canines are trained to 
detect explosives in stationary objects (e.g., baggage and vehicles).
    \20\ The sterile area of an airport is the portion in an airport, 
defined in the airport's security program, that provides passengers 
access to boarding aircraft and to which the access generally is 
controlled through the screening of persons and property. See 49 C.F.R. 
 1540.5.
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    EDS.--In July 2011, we found that TSA experienced challenges 
related to collecting explosives data needed by vendors to develop EDS 
detection software.\21\ These data are also needed by TSA for testing 
the machines to determine whether they meet established requirements 
prior to their procurement and deployment to airports. In the course of 
collecting data, TSA officials encountered problems associated with 
safely handling and consistently formulating some explosives, which 
contributed to delays in providing vendors with the data needed to 
develop the explosives detection software. These delays, in turn 
resulted in delays to TSA's planned EDS acquisition schedule, which 
involved implementing the 2010 requirements in phases. We recommended 
that TSA develop a plan to ensure that it has the explosives data 
needed for each of the planned phases of the 2010 EDS requirements 
before starting the procurement process for new EDSs or upgrades 
included in each applicable phase. DHS stated that TSA modified its 
strategy for the EDS's competitive procurement in July 2010 in response 
to challenges working with the explosives by removing the data 
collection from the procurement process. In April 2012, TSA reported 
that it had begun using a Qualified Products List for its acquisition 
of EDS, which would separate the need for explosives data from future 
procurements, and would require that EDS be certified to meet detection 
requirements prior to beginning acquisitions of EDS to meet those 
requirements.\22\
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    \21\ GAO-11-740.
    \22\ Technologies that successfully pass independent and 
operational evaluation are added to a list of qualified products.
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Delivering Capabilities Within Schedule and Cost Estimates
    According to best practices established in prior work on major 
acquisitions, realistic program baselines with stable requirements for 
cost, schedule, and performance are important to delivering 
capabilities within schedule and cost estimates.\23\ Our prior work has 
found that program performance metrics for cost and schedule can 
provide useful indicators of program health and can be valuable tools 
for improving oversight of individual programs. According to DHS's 
acquisition guidance, the program baseline is the contract between the 
program and Departmental oversight officials and must be established at 
program start to document the program's expected cost, deployment 
schedule, and technical performance. Best practices guidance states 
that reliable and realistic cost, schedule, and performance estimates 
help ensure that a program will deliver capabilities on time and within 
budget.\24\ However, as we have reported in the past few years and on 
the basis of our preliminary observations from our on-going work, TSA 
has not always developed accurate baselines for establishing cost, 
schedule, and performance estimates.
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    \23\ GAO-07-388.
    \24\ GAO-07-388.
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    AIT.--In January 2012, we found that TSA did not have clear plans 
to require AIT vendors to meet milestones used during the AIT 
acquisition. On the basis of our findings, we recommended that TSA 
develop a road map that outlines vendors' progress in meeting all key 
performance parameters because it is important that TSA convey vendors' 
progress in meeting those requirements and full costs of the technology 
to decision makers when making deployment and funding decisions. While 
TSA reported that it hoped vendors would be able to gradually improve 
meeting key performance parameters for AIT over time, we concluded that 
TSA would have more assurance that limited taxpayer resources are used 
effectively by developing a road map that specifies development 
milestones for the technology and having DHS acquisition officials 
approve this road map. DHS agreed with our recommendation and has taken 
actions to address it. For example, in February 2012, TSA developed a 
road map that specifies development and deployment milestones, 
including the addition of ATR to existing deployed systems, continued 
development of enhanced detection capabilities, and acquisition plans 
for the next generation of AIT systems (AIT-2).\25\ In July 2012, DHS 
acquisition officials reviewed the AIT road map. However, on the basis 
of our preliminary observations from our on-going work conducted in 
March 2013, we found that TSA has fallen behind schedule as outlined in 
the AIT road map to install ATR software upgrades to existing deployed 
AIT systems because of one of the vendors' inability to develop this 
software in time for the installation of ATR software on all units by 
June 2013. TSA subsequently decided to terminate its contract with this 
vendor and remove all deployed units from airports. TSA has also fallen 
behind schedule as outlined in the AIT road map to acquire and test 
AIT-2 systems because of vendors' inability to provide required 
documentation verifying that contractual requirements have been met and 
the units are ready to begin testing. Although TSA updated the AIT road 
map in October 2012, it subsequently missed some of the key deadlines 
specified in the updated version as well. We currently have on-going 
work related to this area and we plan to report the results in the fall 
of 2013.\26\
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    \25\ In February 2012, TSA issued a request for vendors to provide 
a second generation of AIT system, referred to as AIT-2. In September 
2012, TSA made contract awards to purchase and test AIT-2 systems from 
three vendors. All AIT-2 systems are required to be equipped with ATR, 
have a smaller footprint than previous systems, and be capable of 
meeting enhanced detection requirements, among other things.
    \26\ In response to your request, we have initiated a review of AIT 
that will examine the effectiveness of AIT systems equipped with ATR.
---------------------------------------------------------------------------
    EDS.--In July 2011, we found that TSA had established a schedule 
for the acquisition of EDS machines but it did not fully comply with 
leading practices, and TSA had not developed a plan to upgrade its EDS 
fleet to meet the current explosives detection requirements.\27\ These 
leading practices state that the success of a large-scale system 
acquisition, such as TSA's EDS acquisition, depends in part on having a 
reliable schedule that identifies when the program's set of work 
activities and milestone events will occur, amongst other things. 
However, we reported that the schedule for the EDS acquisition is not 
reliable because it does not reflect all planned program activities and 
does not include a time line to deploy EDSs or plans to procure EDSs to 
meet subsequent phases of explosive detection requirements. On the 
basis of our findings, we concluded that developing a reliable schedule 
would help TSA better monitor and oversee the progress of the EDS 
acquisition. DHS concurred with our recommendation to develop and 
maintain a schedule for the entire Electronic Baggage Screening Program 
in accordance with the leading practices we identified for preparing a 
schedule.\28\ In July 2011, DHS commented that TSA had already begun 
working with key stakeholders to develop and define requirements for a 
schedule and to ensure that the schedule aligns with the best practices 
we outlined. TSA reported in March 2013 that it plans to have an 
updated integrated master schedule by September 2013.
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    \27\ GAO-11-740.
    \28\ TSA's Electronic Baggage Screening Program, one of the largest 
acquisition programs within DHS, certifies and acquires systems used to 
screen checked baggage at TSA-regulated airports throughout the United 
States.
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    Electronic Baggage Screening Program.--In April 2012, we found that 
TSA's methods for developing life-cycle cost estimates for the 
Electronic Baggage Screening Program did not fully adhere to best 
practices for developing these estimates.\29\ According to best 
practices, a high-quality, reliable cost estimation process provides a 
sound basis for making accurate and well-informed decisions about 
resource investments, budgets, assessments of progress, and 
accountability for results and thus is critical to the success of a 
program.\30\ We found that TSA's estimates partially met three 
characteristics and minimally met one characteristic of a reliable cost 
estimate.\31\ DHS concurred with our recommendation that TSA ensure 
that its life-cycle cost estimates conform to cost-estimating best 
practices, and identified efforts under way to address it. DHS also 
acknowledged the importance of producing life-cycle cost estimates that 
are comprehensive, well-documented, accurate, and credible so that they 
can be used to support DHS funding and budget decisions. In April 2013, 
TSA reported it plans to have an updated integrated master schedule and 
revised life-cycle cost estimate by September 2013, which, when 
completed, will allow it to update its cost estimate for the Electronic 
Baggage Screening Program.
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    \29\ GAO, Checked Baggage Screening: TSA Has Deployed Optimal 
Systems at the Majority of TSA-Regulated Airports, but Could Strengthen 
Cost Estimates, GAO-12-266 (Washington, DC: Apr. 27, 2012).
    \30\ GAO, GAO Cost Estimating and Assessment Guide: Best Practices 
for Developing and Managing Capital Program Costs, GAO-09-3SP 
(Washington, DC: Mar. 2 2009).
    \31\ We reported that the estimate was partially comprehensive, 
partially documented, partially accurate, and minimally credible when 
compared against the criteria in our Cost Estimating and Assessment 
Guide.
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    dhs has efforts under way to strengthen oversight of component 
                              acquisitions
    In part because of the challenges we have highlighted in DHS's 
acquisition process, strengthening DHS's management functions remains 
on our high-risk list. However, DHS has efforts under way to strengthen 
its oversight of component acquisition processes.
    We found in September 2012 that while DHS has initiated efforts to 
address the Department's acquisition management challenges, most of the 
Department's major acquisition programs continue to cost more than 
expected, take longer to deploy than planned, or deliver less 
capability than promised.\32\ We identified 42 programs that 
experienced cost growth, schedule slips, or both, with 16 of the 
programs' costs increasing from a total of $19.7 billion in 2008 to 
$52.2 billion in 2011--an aggregate increase of 166 percent. Moreover, 
we reported that DHS leadership has authorized and continued to invest 
in major acquisition programs even though the vast majority of those 
programs lack foundational documents demonstrating the knowledge needed 
to help manage risks and measure performance. For example, we found 
that DHS leadership--through the Investment Review Board or its 
predecessor body, the ARB--has formally reviewed 49 of the 71 major 
programs. We found that DHS permitted 43 of those programs to proceed 
with acquisition activities without verifying the programs had 
developed the knowledge in key acquisition documents as required by AD 
102.\33\ DHS officials reported that DHS's culture has emphasized the 
need to rapidly execute missions more than sound acquisition management 
practice and that DHS could not approve the documents in a timely 
manner. On the basis of our findings, we concluded that DHS recognized 
the need to implement its acquisition policy more consistently, but 
that significant work remains. We recommended that DHS modify 
acquisition policy to better reflect key program and portfolio 
management practices and ensure acquisition programs fully comply with 
DHS acquisition policy. DHS concurred with our recommendations and 
reported taking actions to address some of them. For example, in 
September 2012, DHS stated that it was in the process of revising its 
policy to more fully reflect key program management practices to enable 
DHS to more rapidly respond to programs' needs by facilitating the 
development, approval, and delivery of more specific guidance for 
programs.
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    \32\ GAO, Homeland Security: DHS Requires More Disciplined 
Investment Management to Help Meet Mission Needs, GAO-12-833, 
(Washington, DC: Sept. 18, 2012).
    \33\ We surveyed all of DHS's 77 major acquisition programs from 
January to March 2012, and received a 92 percent response rate. DHS 
originally identified 82 major acquisition programs in the 2011 major 
acquisition oversight list, but 5 of those programs were subsequently 
canceled in 2011. Seventy-one program managers responded to the survey.
---------------------------------------------------------------------------
    In March 2012, we found that to enhance the Department's ability to 
oversee major acquisition programs, DHS realigned the acquisition 
management functions previously performed by two divisions within the 
Office of Chief Procurement Officer to establish the Office of Program 
Accountability and Risk Management (PARM) in October 2011. PARM, which 
is responsible for program governance and acquisition policy, serves as 
the Management Directorate's executive office for program execution and 
works with DHS leadership to assess the health of major acquisitions 
and investments. To help with this effort, PARM is developing a 
database, known as the Decision Support Tool, intended to improve the 
flow of information from component program offices to the Management 
Directorate to support its oversight and management efforts. However, 
we reported in March 2012 that DHS executives were not confident enough 
in the data to use the Decision Support Tool to help make acquisition 
decisions.\34\ On the basis of our findings, we concluded that DHS had 
limited plans to improve the quality of the data because PARM planned 
to check the data quality only in preparation for key milestone 
meetings in the acquisition process. We reported that this could 
significantly diminish the Decision Support Tool's value because users 
cannot confidently identify and take action to address problems meeting 
cost or schedule goals prior to program review meetings.
---------------------------------------------------------------------------
    \34\ GAO, Department of Homeland Security: Continued Progress Made 
Improving and Integrating Management Areas, but More Work Remains, GAO-
12-365T (Washington, DC: Mar. 1, 2012).
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    In February 2013, we reported that DHS updated its Integrated 
Strategy for High-Risk Management in June 2012, which includes 
management initiatives and corrective actions to address acquisition 
management challenges, among other management areas.\35\ In the June 
2012 update, DHS included, for the first time, performance measures and 
progress ratings for all of the management initiatives. The June 2012 
update also identified the resources needed to implement most of its 
corrective actions, although we found that DHS needs to further 
identify its resource needs and communicate and mitigate critical gaps. 
On the basis of our findings, we concluded that the strategy, if 
implemented and sustained, will provide a path for DHS to be removed 
from our high-risk list. Going forward, DHS needs to continue 
implementing its Integrated Strategy for High-Risk Management and show 
measurable, sustainable progress in implementing its key management 
initiatives and corrective actions and achieving outcomes including 
those related to acquisition management. We will continue to monitor 
DHS's efforts to determine if the actions and outcomes are achieved.
---------------------------------------------------------------------------
    \35\ GAO, High-Risk Series: An Update, GAO-13-283 (Washington, DC: 
Feb. 2013).
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     Chairman Hudson, Ranking Member Richmond, and Members of the 
committee, this concludes my prepared statement. I look forward to 
responding to any questions that you may have.

    Mr. Barletta. Thank you. Thank you, Mr. Lord.
    The Chairman recognizes Mr. Edwards to testify.

STATEMENT OF CHARLES K. EDWARDS, DEPUTY INSPECTOR GENERAL, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Mr. Edwards. Good afternoon, Chairman Barletta, Ranking 
Member Richmond, Ranking Member Thompson, and distinguished 
Members of the subcommittee. Thank you for inviting me to 
testify today about improvements that DHS can make to 
procurement and acquisition practices, specifically to those at 
Transportation Security Administration.
    DHS continues to face challenges in implementing a fully 
integrated acquisition process which requires an effective 
acquisition management infrastructure. But let me stress that I 
believe DHS has also made important strides in recent years 
toward improving its acquisition processes. In 2010 DHS 
implemented Acquisition Management Directive MD 102-01, which 
is the principal policy guidance that governs all acquisition 
programs.
    In 2011 the Department strengthened oversight of 
acquisition programs and created the Office of Program 
Accountability and Risk Management, PARM, which reports 
directly to the Under Secretary of Management. It then 
appointed component acquisition executives, CAEs, in all 
components, including TSA, to work collaboratively with PARM. 
As for TSA, it has appointed an Assistant Administrator for 
Acquisition who serves as both the head of the contracting 
activity and the CAE.
    Our report, ``Transportation Security Administration's 
Acquisition of Support Contracts,'' found TSA did not provide 
adequate management and oversight of acquisition for support 
services for transportation security programs. Contractors were 
performing inherently Governmental functions, did not follow 
acquisition guidance, and issued vague statements of work.
    Since its creation TSA has relied on contractors to help 
accomplish many tasks, including acquisitions. Although the 
Federal Acquisition Regulation, known as the FAR, establishes 
contract administration as an inherently Governmental function, 
TSA's support services contractors performed contract 
administration in three of the 13 contracts we reviewed. One of 
those three contractors performed the contracting officer's 
representative support, also known as CORs, for its contract 
along with reviewing its own invoices.
    We recommended that TSA include a contract review of 
inherently Governmental functions as part of a contract 
administration. TSA responded by assigning a quality assurance 
specialist to review every new statement of work for inherently 
Governmental functions.
    Another challenge for TSA identified in our report was the 
lack of dedicated and properly trained CORs. We recommended 
that TSA assigned dedicated, trained, and certified CORs to 
manage and oversee the contract administration function. TSA 
provided us with the necessary training documentation showing 
it had trained and certified CORs.
    Our report, ``Transportation Security Administration 
Logistics Center--Inventory Management,'' recognized that TSA 
include its accountability of screening equipment at the 
logistics center. However, we also determined that TSA stowed 
unusable or obsolete equipment, maintained inappropriate safety 
stock levels, and did not develop an effective inventory 
management process. We made two recommendations to TSA that, 
when implemented, should assist the component with managing 
inventory in its warehouses. TSA concurred with one 
recommendation and partially concurred with the other.
    In March 2010 we issued ``Transportation Security 
Administration's Acquisition of Support Service Contracts,'' 
which included three recommendations to improve TSA's 
acquisition process. In January 2012, we determined that all 
responses and corrective actions were sufficient to close our 
recommendations.
    In conclusion, as the reports I have highlighted 
illustrate, DHS and TSA are taking steps to implement our 
recommendations to strengthen and streamline their procurement 
and acquisition processes. However they continue to face 
challenges that will require more time and effort to overcome. 
My office will continue to examine these processes at the 
Department and its components and to make recommendations 
designed to improve their efficiency and effectiveness. Mr. 
Chairman, this concludes my prepared remarks, and I would be 
happy to answer any questions that you or other Members may 
have. Thank you.
    [The prepared statement of Mr. Edwards follows:]
                Prepared Statement of Charles K. Edwards
                              May 8, 2013
    Good afternoon Chairman, Ranking Member, and distinguished Members 
of the subcommittee.
    I am Charles K. Edwards, Deputy Inspector General of the Department 
of Homeland Security (DHS). Thank you for inviting me to testify today 
about improvements that DHS can make to procurement and acquisition 
practices, specifically to those at the Transportation Security 
Administration (TSA).
    As you know, the DHS Office of Inspector General (OIG) was 
established in January 2003 by the Homeland Security Act of 2002, which 
amended the Inspector General Act of 1978. DHS OIG seeks to promote 
economy, efficiency, and effectiveness in DHS programs and operations 
and reports directly to both the DHS Secretary and Congress. We fulfill 
our mission primarily by issuing audit, inspection, and investigative 
reports that include recommendations for corrective action, and by 
referring criminal cases to the United States Attorney General for 
prosecution.
                       major acquisition programs
    DHS has made important strides in recent years toward improving its 
acquisition process. Nevertheless, DHS continues to face challenges in 
implementing a fully integrated acquisition process, which requires an 
effective acquisition management infrastructure. Acquisition management 
is a complex process that goes beyond simply awarding a contract. It 
begins with the identification of a mission need and continues with the 
development of a strategy to fulfill that need while balancing cost, 
schedule, and performance. The process concludes with contract 
closeout, after satisfactorily meeting the terms. Acquisition 
management includes managing operational and life-cycle requirements--
from formulating concepts of operations, developing sound business 
strategies, and exercising prudent financial management to assessing 
tradeoffs and managing program risks.
    In fiscal year 2011, the Department restructured and strengthened 
its oversight process of all major acquisition programs by creating the 
Program Accountability and Risk Management (PARM) office. PARM reports 
directly to the under secretary for management. It manages and 
implements Acquisition Management Directive (MD) 102-01, serves as the 
executive secretariat to the Acquisition Review Board (ARB) and the 
Component Acquisition Executive Council, and guides managers of major 
investments through the acquisition governance process. PARM also 
provides independent assessments of major investment programs and works 
with DHS partners to enhance business intelligence to inform ARB 
decisions. It monitors programs between formal reviews to identify 
emerging issues that DHS needs to address. Further, the Department 
developed the Decision Support Tool to aid in monitoring and oversight 
and also created Centers of Excellence to assist in improving 
performance.
    In December 2011, the Department also issued the Program Management 
& Execution Playbook (Playbook) to the acquisition workforce. The 
Playbook is the Department's vision for strengthening program 
management and execution capabilities, and for maturing the acquisition 
management system. It addresses several management priorities:
   Increasing the expertise and capabilities of the acquisition 
        and program management workforce;
   Improving program execution;
   Increasing access to expert guidance and best practices; and
   Increasing access to reliable and useful program performance 
        data.
    In addition to managing the day-to-day oversight of acquisition 
programs, PARM developed and implemented a business intelligence tool 
to monitor the operational status of each acquisition program. The 
Decision Support Tool is a web-enabled tool that provides DHS leaders, 
governance boards, and program managers with a central dashboard for 
assessing and tracking the health of major acquisition projects, 
programs, and portfolios. The tool creates graphs, charts, and other 
views of key indicators of program health, such as cost, funding, and 
schedule. The Department's goal is to improve program accountability 
and to strengthen the ability to make sound strategic decisions 
throughout the life cycle of major acquisitions.
    On October 1, 2011, the Decision Support Tool became the official 
source of Acquisition Decision Event (ADE) information and data; it is 
used to provide ARBs with standardized information. On February 13, 
2012, DHS issued a memorandum to all components and programs to ensure 
that, on a monthly basis, all acquisition program information reported 
in the Department's existing data systems is complete, accurate, and 
valid.
    DHS envisions becoming more data-driven, with emphasis on the 
criticality of maintaining quality data within DHS source systems. The 
Department created the Comprehensive Acquisition Status Report (CASR), 
which provides the status of DHS major acquisitions listed in the 
Department of Homeland Security Major Acquisition Oversight List. The 
new CASR format increases the quality of information and can be 
produced more quickly. As the Department's business intelligence 
capability and data fidelity efforts continue to mature, the condensed 
time line will leverage Decision Support Tool automation data to feed 
the CASR in real time.
                    acquisition lifecycle framework
    The Department classifies acquisitions into three levels to define 
the extent and scope of required project and program management and the 
specific official \1\ who serves as the Acquisition Decision Authority. 
The Department oversees level 1 and level 2 acquisition programs. For 
level 1 acquisitions, that is acquisitions more than or equal to $1 
billion, the Acquisition Decision Authority is the deputy secretary. 
For level 2, acquisitions of $300 million to $1 billion, the 
Acquisition Decision Authority is the chief acquisition officer. 
Components are responsible for the oversight and controls for 
acquisition programs below the $300 million threshold.
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    \1\ The Acquisition Decision Authority may designate his or her 
responsibilities to other officials.
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    DHS adopted the Acquisition Lifecycle Framework (ALF) to assure 
consistent and efficient acquisition management, support, review, and 
approval throughout the Department. The ALF is designed to ensure 
stable and well-managed types of acquisition. It is designed to ensure 
that the program manager has the tools, resources, and flexibility to 
execute the acquisition; delivers a product that meets the user's 
requirements; and complies with applicable statutes, regulations, and 
policies.
    The DHS acquisition life cycle process is structured to operate in 
a series of acquisition phases, each leading to an ADE. The ALF is a 
four-phase process that DHS uses to determine whether to proceed with 
an acquisition. The four phases are:
    1. Need--identifying the need to be addressed by the acquisition;
    2. Analyze/Select--analyzing the alternatives to satisfy the need 
        and selecting the best option;
    3. Obtain--developing, testing, and evaluating the selected option 
        and determining whether to approve production;
    4. Product/Deploy/Support--producing and deploying the selected 
        option and supporting it throughout the operational life cycle.
    Each phase leads to an ADE, a pre-determined point within an 
acquisition phase at which the acquisition will undergo a review prior 
to commencement of the next phase. The review is designed to ensure the 
alignment of needs to strategic DHS direction, along with adequate 
planning for upcoming phases of the acquisition. Prior to every ADE, 
components are required to submit acquisition documents to the ARB for 
review, including:
   Mission Needs Statement.--Synopsizes specific functional 
        capabilities required to accomplish the Department's mission 
        and objectives, along with deficiencies and gaps in these 
        capabilities.
   Capability Development Plan.--Defines how critical knowledge 
        to inform decisions will be obtained, defines the objectives, 
        activities, schedule, and resources for the next phase.
   Acquisition Plan.--Provides a top-level strategy for future 
        sustainment and support and a recommendation for the 
        acquisition approach and types of acquisition.
    Each phase ends with a presentation to the ARB, which is the cross-
component board in the Department composed of senior-level decision 
makers at either the Department or component level, depending on the 
total cost estimate of the programs. The ARB determines whether a 
proposed acquisition meets the requirements of key phases in the ALF 
and is able to proceed to the next phase and eventual full production 
and deployment.
    The Acquisition Review Process is followed to prepare for an ARB 
and to ensure appropriate implementation of the ARB's decisions.
                      accountability and controls
    DHS implemented an ALF that includes the ARB to support consistent 
and efficient acquisition management, support, review, and approval 
throughout the Department. In fiscal year 2011, the Department 
maintained about 160 acquisition programs with estimated life-cycle 
costs of more than $144 billion. Our report, DHS Oversight of Component 
Acquisition Programs, OIG-11-71, recognized that the Department had 
made progress in its acquisition oversight process and controls by 
implementing a revised Acquisition Management Directive, 102-01 
(Directive 102-01). In January 2010, the Department issued Revision 
Number 01 of the interim Acquisition Management Directive, 102-01, 
which prescribed guidance over the Acquisition Review Process, the ALF, 
and the ARB. It also issued a supplemental Acquisition Instruction/
Guidebook, 102-01-001, Version 1.9 (November 7, 2008) to the interim 
directive that provided detailed instructions on implementing and 
managing acquisitions. Directive 102-01 and guidebook addressed many of 
the previously identified oversight and control problems in acquisition 
management. The directive and guidebook were positive steps, but there 
are opportunities for improvement.
    The Department needed to refine policies further in some areas and 
strengthen oversight in others. Some components were creating program 
management offices to manage simple procurements, not properly 
reporting programs in the standard system, or not applying strategic 
sourcing strategies to support program development. Additionally, not 
all components developed component-level acquisition policies and 
procedures to manage their programs. As a result, some components 
created unnecessary acquisition programs that potentially increased 
administrative costs without adding value. In addition, the Department 
did not always know what was in its acquisition portfolio.
    Directive 102-01 establishes the overall policy and structure for 
acquisition management within the Department, but does not provide a 
decision-making tool to determine if an acquisition warrants the higher 
level of internal controls required by the ALF. According to the 
Guidebook's glossary, an acquisition program is the totality of 
activities directed at accomplishing a program to acquire, support, or 
sustain capabilities, funded through one or more investments. In 
contrast, the text of the Guidebook defines an acquisition as the 
conceptualization, initiation, design, development, test, contracting, 
production, deployment, logistics support, modification, and disposal 
of systems, supplies, or services (including construction) to satisfy 
DHS' needs. To complicate the definitions further, according to the 
body of the Guidebook, capital assets, enterprise/component-level 
service contracts, interagency agreements, and strategically-sourced 
acquisitions are to follow Directive 102-01.
    These definitions do not provide clear instruction for determining 
when an acquisition should become an acquisition program. In attempts 
to comply with the directive, components have over-classified programs. 
For example, the Federal Law Enforcement Training Center (FLETC) is 
automating many of its manual processes, such as student registration, 
class scheduling, planning and forecasting, and student records. The 
estimated total life-cycle cost of this automation is approximately $30 
million. FLETC personnel contracted out all of the requirements for the 
program, including requirements analysis, development, and maintenance 
of an automated system that used commercial off-the-shelf (COTS) 
equipment and custom software applications. Because the instructions 
did not provide clear guidance, instead of creating a simple 
procurement, FLETC created an acquisition program that may have 
unnecessarily increased program management administrative cost.
    We reviewed several acquisition programs that did not clearly fit 
into the ALF process. Ten of the 17 (59 percent) programs we reviewed, 
with an estimated life-cycle cost of about $5.3 billion, were 
acquisitions that identified COTS equipment or existing contracts to 
fulfill the needs identified by the program office. Component personnel 
likely could have managed these as simple procurements rather than 
acquisition programs. For example, TSA classified renovation of an 
existing warehouse building as an acquisition program. It leased the 
104,000-square-foot building in 2003 and renovated approximately 89,000 
square feet for about $42 million over the initial 10-year leasing 
period. In 2008, TSA primarily relied on existing contracts to complete 
12,500 of the remaining 15,000 square feet of the warehouse building. 
According to TSA personnel, the renovation for the additional 12,500 
square feet cost about $2.5 million and was completed in January 2010. 
For this small renovation project, TSA personnel could have used simple 
procurement rules but instead increased administrative costs by 
implementing the more complicated internal control structure prescribed 
in Directive 102-01.
    Based on the definition of an acquisition program in the Guidebook, 
this renovation could possibly be an acquisition program. However, 
based on the processes and procedures specified in Directive 102-01's 
ALF and Acquisition Review Process, this renovation did not clearly 
meet the intentions of the existing guidance or present a high level of 
risk to warrant the increased costs of being managed as a program.
    Components should not create acquisition programs to acquire 
products and services under a simple procurement because creation of 
such programs is outside the intent and spirit of Directive 102-01. The 
Department can reduce some of the conflicts at the component level by 
developing a decision matrix that the components can apply in the pre-
planning phases of the purchasing process.
           department-wide management of detection equipment
    Our March 2011 audit report, DHS Department-wide Management of 
Detection Equipment, OIG-11-47, highlighted some of the acquisition 
challenges facing the Department when multiple components have similar 
requirements or are buying the same type of equipment. We identified 
steps the Department could take to improve its acquisition processes. 
With improved management, DHS could streamline the acquisition process, 
improve efficiencies, and provide uniform equipment inventory 
information. DHS has eight different procurement offices that purchase 
detection equipment. Seven of these offices are at the component level, 
and each has its own head of contracting. These components are as 
follows:
   U.S. Customs and Border Protection (CBP),
   Federal Emergency Management Agency,
   FLETC,
   U.S. Immigration and Customs Enforcement (ICE),
   Office of Procurement Operations, \2\
---------------------------------------------------------------------------
    \2\ In 2004, the Department created the Office of Procurement 
Operations to provide acquisition services to components that did not 
have a procurement office.
---------------------------------------------------------------------------
   TSA,
   United States Coast Guard,
   United States Secret Service.
    Components maintain separate inventories for their detection 
equipment. For fiscal year 2010, the components had a combined 
inventory of more than $3.2 billion worth of detection equipment, most 
of which was deployed. The components purchased an average of about 
$387 million worth of detection equipment in each of the last 3 years, 
ranging from about $280 million to $511 million. This equipment 
included metal detectors, explosive detection systems, and radiation 
detectors (including some personal protective safety equipment) for 
screening people, baggage, and cargo at airports, seaports, and land 
ports of entry, as well as Federal buildings. As of March 1, 2010, 
TSA's detection equipment accounted for 66 percent of the Department's 
total inventory.
    Our audit work showed that DHS could manage the acquisition of 
detection equipment better by developing processes based on best 
practices such as strategic sourcing.
Strategic Sourcing
    DHS had established a Strategic Sourcing Program and has applied 
strategic sourcing strategies for many common-use items, such as 
firearms, ammunition, and office supplies; however, the Department was 
not managing its detection equipment through this program. According to 
DHS officials, components were encouraged but not required to use the 
Strategic Sourcing Program and generally did not coordinate and 
communicate when acquiring detection equipment. There was no process to 
standardize equipment purchases or identify common mission requirements 
among components. For example, the Department's Joint Requirements 
Council was inactive, and components did not have the expertise of 
commodity councils or single-item managers to rely on when acquiring 
detection equipment. Further, components viewed detection equipment as 
unique to their missions and did not attempt to identify common mission 
requirements among other components. This resulted in numerous 
inefficient purchases by individual components instead of consolidated 
purchases.
Standardizing Equipment Purchases
    Some components did not standardize equipment purchases and 
purchased a variety of different detection equipment models. For 
example, U.S. Citizenship and Immigration Services (USCIS) had 24 and 
CBP had 21 different models of small X-ray equipment, and CBP and USCIS 
each had 14 different models of walk-through metal detectors. When 
components have multiple models of equipment to meet similar missions, 
DHS incurs higher procurement administrative costs and logistic support 
costs for maintenance, training, and support. In contrast, TSA, which 
uses and maintains the largest inventory of detection equipment in the 
Department, uses only seven different models of small X-ray equipment 
and three models of walk-through metal detectors. By limiting the 
number of models and types of equipment, TSA is in a position to 
increase efficiencies in procurement, maintenance, and personnel 
flexibilities.
Common Mission Requirements
    We identified about $170 million worth of small X-ray machines, 
metal detectors, and personal and hand-held radiation detectors that 
DHS could acquire through strategic sourcing strategies. Although 
multiple components were using similar equipment to meet similar 
screening missions, each component purchased the equipment separately. 
Components did not coordinate with each other to identify common 
requirements, consolidate purchases to gain buying power, or 
consolidate logistic support requirements.
    DHS Management Directive 1405 established a Joint Requirements 
Council (JRC) as a senior-level requirements review board to identify 
cross-cutting opportunities and common requirements among DHS 
organizational elements for non-information technology investments. The 
JRC met periodically between fiscal years 2004 and 2006. 
Representatives on the JRC reviewed programs and processes for 
potential mission overlap and redundancies. Among the programs reviewed 
were TSA's Secure Flight and Registered Traveler and CBP's Consolidated 
Registered Traveler programs. In 2006, the JRC stopped meeting after 
the Department assigned other duties to the council chair. However, DHS 
indicated that it might revive the council or pursue another 
alternative to identify duplicate programs and processes across the 
Department. This undertaking should include an effort to identify 
common data elements and nomenclature within inventories and to 
establish a data dictionary for the Department's detection equipment.
    In addition to the JRC, commodity councils are an integral element 
of developing an effective strategic sourcing program. Commodity 
councils include representatives from across the organization. The 
members act as the subject matter experts in the acquisition process 
and in establishing requirements for a specific commodity or service. 
Generally, the component purchasing the largest quantity of a 
particular item takes the lead in acquiring the commodity or service 
and may serve as that commodity's single-item manager.
    DHS and other Federal agencies use the commodity council concept. 
For example, in 2003, DHS established the Weapons and Ammunition 
Commodity Council to create a Department-wide strategy for 
consolidating requirements and gaining economies of scale for the 
acquisition of weapons and ammunition. The council, which includes 
representatives from each component that uses weapons, developed 
requirements for firearms, ammunition, and body armor. ICE took the 
lead, using service-level agreements with other components to establish 
one overall contract, which is available to all DHS entities.
    The Department agreed in principle with our two recommendations and 
took action to implement them. DHS was evaluating reestablishing the 
JRC and other alternatives to achieve the same goal. However, as of 
April 29, 2013, the Department had not reconstituted the JRC. DHS will 
perform a business case analysis of detection equipment and establish a 
commodity council or working group if it determines that this equipment 
can be strategically sourced.
  oig-10-72, transportation security administration's acquisition of 
                           support contracts
    TSA did not provide adequate management and oversight of 
acquisitions for support services for transportation security programs. 
Contractors were performing inherently Governmental functions or roles 
that closely supported the performance of inherently Governmental 
functions, acquisition staff did not follow acquisition guidance, and 
support services contracts contained vague statements of work. This 
occurred because the component did not have an adequate number of 
properly-trained core acquisition staff to administer contracts and 
oversee support services contractors' performance. As a result, TSA did 
not have reasonable assurance that contractors were performing as 
required, that it contracted for the services it needed, that it 
received the services for which it paid, or that taxpayers were 
receiving the best value.
Background
    Since its creation, TSA has relied on support services contractors 
to help accomplish its mission. TSA's decision to contract for services 
such as acquisition support, invoice review, strategic planning, and 
administrative support was largely driven by the need to stand up 
programs and operations quickly after the events of September 11, 2001.
    TSA's contracting officers and contracting officer's 
representatives (COR) provide contract oversight and monitoring. 
Contracting officers and CORs are Federal employees who represent the 
Government's interests in negotiating and administering contracts. TSA 
assigns a contracting officer and a COR to handle each support services 
contract from contract award to closeout. The contracting officer is 
responsible for providing contract administration and oversight. Due to 
the technical nature of TSA contracts, contracting officers delegate 
many of their contract administration and oversight responsibilities to 
CORs, who serve as technical experts in the contract areas to which 
they are assigned. Each COR works with the contracting officer and the 
program office to oversee and monitor contractor performance and 
deliverables.
    Federal acquisition guidance highlights the risks inherent in 
service contracting, particularly for support services. According to 
the Office of Management and Budget, the closer contractor services 
come to supporting inherently Governmental functions, the greater the 
risk of their influencing the Government's control over and 
accountability for decisions. Inherently Governmental functions require 
discretion in applying Government authority or value judgments in 
making decisions for the Government. A Government Accountability Office 
panel stated that increasing reliance on contractors to perform 
services for core Government activities challenges the capacity of 
Federal officials to supervise and evaluate the performance of these 
activities.
    According to the Federal Acquisition Regulation (FAR), Subpart 37 
and Subpart 7, and the Office of Federal Procurement Policy Letter 93-
1, services that tend to affect Government decision making or program 
management require a greater level of scrutiny and an enhanced degree 
of management oversight to prevent abuse. Such scrutiny includes 
assigning a sufficient number of qualified Government acquisition staff 
to provide oversight and ensure that agency officials retain control 
over and remain accountable for policy decisions, based in part on a 
contractor's performance and work products.
Contractors Are Performing Inherently Governmental Functions
    Contractors performed inherently Governmental functions or roles 
that directly support the performance of inherently Governmental 
functions. Although the FAR establishes contract administration as an 
inherently Governmental function, TSA's support services contractors 
performed contract administration in 3 of the 13 contracts we reviewed. 
Specifically, these three contractors reviewed invoices to determine 
whether they were reasonable, correctly charged, and allowable, and 
then recommended the invoices for approval and payment. These three 
contracts represented 40 percent ($265 million) of the total support 
services contracts for fiscal year 2009.
    In addition, one of these three contractors performed COR support 
for its own contract, along with reviewing its own invoices. When we 
brought this to the attention of TSA management, they took immediate 
action to correct the problem.
    Although program officials generally acknowledged that their 
professional and management support services contracts closely 
supported the performance of inherently Governmental functions, they 
believed that contracts for such services were common practice within 
the Government. However, the FAR requires that agency officials retain 
control over and remain accountable for contract administration, 
approval, and payment of invoices. Until TSA provides greater scrutiny 
and enhances management oversight of support services contracts, it 
will continue to risk transferring Government responsibility to 
contractors.
Contracting Officers Are Not Following TSA Acquisition Guidance
    Contracting officers and CORs did not follow TSA's internal 
acquisition guidance for contract administration, oversight, and 
monitoring to ensure that contractors were completing the contracted 
work. For example, for all 13 contracts, the contracting officers' 
contract files were missing COR delegation forms, modifications 
notifying the contractor of changes in the contracting officer, 
documentation of suspension and debarment reviews, base contracts, and 
performance and monitoring reports. CORs' administrative files were 
missing invoices, COR delegation forms, COR training forms, contract 
modifications, and other oversight documentation. Although TSA's 
guidance requires that COR nomination forms and Departmental approval 
forms be completed before CORs assume their duties, our review of the 
contracts showed that 6 (46 percent) of the 13 contracts did not 
include the nomination forms and 2 (15 percent) of the 13 contracts did 
not include the Departmental approval forms before the CORs began 
performing COR duties. Without adequate documentation, there is no 
assurance that contractors are meeting contract provisions or that TSA 
is making appropriate payments for services provided.
    Although TSA's internal acquisition guidance requires quality 
assurance plans or surveillance plans with specific measures for 
assessing contractors' performance, none of the contract or COR files 
we reviewed contained specific measures for assessing contractors' 
performance, plans outlining the specific contract requirements, or 
measurable outcomes of the support services provided. TSA documented 
monthly meetings with contractors to discuss performance, but TSA 
officials did not provide evidence that they independently validated 
the contractors' progress reports. As a result, TSA could not ensure 
that contractors were complying with contract performance requirements.
    CORs submitted invoices to the contracting officers for payment 
without sufficient detail to support payment. We reviewed all of the 
contractors' August 2009 invoices, which totaled approximately $6 
million for the 13 contracts. Each invoice listed the contract 
employee's name and the hours of work performed. However, the invoices 
did not include a detailed description of the work performed or the 
project completed. The contractors' invoices were not specific, so we 
could not determine whether the correct contract was charged or whether 
the work performed was required under the contract. Because CORs cannot 
provide adequate oversight and monitoring without reviewing detailed 
invoices that identify the specific work completed, TSA did not have 
reasonable assurance that contractors were performing as required and 
that full payment was justified on the invoices received.
    We recommended that TSA include a contract review of inherently 
Governmental functions as part of contract administration. TSA assigned 
a Quality Assurance Specialist to review every new Statement of Work 
for inherently Governmental functions and coordinate with the 
initiating program/office and Office of Acquisitions to revise the work 
assignments both internally to the Government and with the contractor 
to ensure that inherently Governmental functions are performed by the 
Government parties. The contract review process for inherently 
Governmental functions is now required for all Procurement Packages.
Contracts Contain Vague Statements of Work
    TSA did not always define the requirements in the Statements of 
Work for support services contracts clearly. Nine of the 13 contracts 
we reviewed contained vague statements of work that did not outline the 
specific requirements or include key deliverables specifying the 
activities the contractor needed to complete. These nine contracts 
represented 79 percent ($523 million) of the total support services 
contracts for fiscal year 2009. Although the FAR requires that 
contracts contain clearly defined Statements of Work, TSA program 
officials acknowledged that the Statements of Work did not always 
reflect program needs accurately or the work the contractors actually 
performed.
    The vague Statements of Work also allowed acquisition personnel to 
add unrelated tasks to contracts. For example, the Statement of Work 
for a $10 million services contract for strategic planning was so vague 
that the contracting officer was able to use it to develop a SharePoint 
(data repository) system for the Passenger Screening Program without 
completing a separate contract modification. The development of a 
SharePoint system is unrelated to strategic planning and is not a 
support service. TSA should have contracted for the system through its 
Office of Information Technology under a separate contract.
    Statements of Work should be clearly written to describe the 
services needed and detailed enough to ensure that personnel use a 
contract as intended. Without clear Statements of Work, TSA cannot be 
sure that contractors are providing the services needed or hold 
contractors accountable for the services they provide.
    TSA often needed to create contract modifications to clarify the 
work it was asking contractors to perform. For the 13 contracts we 
reviewed, TSA executed 97 contract modifications to define more clearly 
the work the contractors were performing.
    Contract modifications require extra work and sometimes add costs 
to contracts. TSA could have avoided extra costs and work for its 
already overburdened staff by clearly defining contract requirements 
before awarding contracts.
    Further, contracts were missing key delivery tables that identified 
the task assignments and delivery dates contractors had to meet. Nine 
of the 13 (69 percent) contracts we reviewed were missing key delivery 
tables with specific requirements and due dates. Specific contract 
requirements and task assignments are critical to gauging contractor 
performance and ensuring that contractors are performing contracted 
services timely.
    We recommended that TSA establish evaluation factors and a review 
process for requirements identified in the Statements of Work. TSA 
provided the necessary documentation describing the new procurement 
request submission on approval tools and processes. The newly-developed 
tools and user guides provided sufficient information to identify each 
stakeholder's roles and responsibilities. TSA implemented its completed 
user guides on its new submission and approval tool on October 1, 2011. 
This process improves the quality of all procurement request documents, 
especially Statements of Work, by causing all procurement request 
packages (not just service contracts) to be routed to, and reviewed by, 
multiple Office of Special Council stakeholders specific to the package 
program. Additionally, the tool documents all comments received with a 
version history. Training has been provided to most of Office of 
Special Council (submitters, reviewers, and approvers). The contracting 
officers and specialists are also part of the review cycle, which 
greatly improves the quality of the whole procurement request package.
TSA Does Not Have a Sufficient Number of Trained COR Staff
    TSA did not provide sufficient management and oversight for its 
support services contracts because it did not have an adequate number 
of dedicated and properly trained CORs. As a result, TSA relied on 
contractors to perform work that is inherently Governmental or directly 
supports the performance of inherently Governmental functions.
    TSA assigned COR responsibilities to technical experts in the area 
covered by the contract. However, CORs remained focused on the program 
offices in which they normally worked and were not available to monitor 
contractor performance, in part because of their workload demands. For 
this reason, TSA relied on contractors to perform many COR functions, 
including invoice review and maintenance of the COR administrative 
files. According to Federal guidelines, some of the COR duties include 
inherently Governmental functions that contractors should not perform.
    TSA should ensure that a core group of technical experts is 
dedicated exclusively to COR functions. By maintaining a core group of 
acquisition experts, TSA would be able to provide better contract 
administration, management, and oversight required by the Office of 
Management and Budget and the FAR. A core group would also reduce the 
continual need to train new staff on COR functions.
    Although COR training is essential to develop skilled staff for 
contract administration, CORs on 85 percent (11 of the 13) of the 
contracts reviewed had not completed the required training. To maintain 
their certifications, TSA requires that CORs receive 40 hours of COR 
training initially, 40 hours of refresher training per 2-year cycle 
(including a minimum of 12 hours in each year), and annual ethics 
training. TSA should review the COR training records to ensure that all 
CORs complete the required training. TSA should also tailor COR 
refresher training to develop skills in contract administration, 
management, and oversight.
    We recommended that TSA assign dedicated, trained, and certified 
CORs to manage and oversee the contract administration function. TSA 
provided the necessary training documentation showing it had trained 
and certified CORs assigned to administer contracts. The Office of 
Security Technology continued to analyze workload across all contract 
administration functions to ensure the appropriate staffing mix. In 
concurring with the recommendation, TSA Office of Acquisition noted 
plans to offer enhanced COR training courses to develop skills in 
contract administration, management, and oversight. OIG agreed that 
completed actions resolved its recommendation, and that the finding 
would be closed once TSA completed its proposed actions. On March 30-
31, 2010, TSA conducted an Overview of Government Contracting Course 
for CORs. For the remainder of 2010, TSA had scheduled COR courses for 
Writing Performance-Based Statements of Work, Corrective Actions, 
Evaluating a Contractor's Performance, and Contract Administration. For 
fiscal year 2011 COR training, TSA was coordinating with DHS, which was 
going to contract for classes. Courses planned for fiscal year 2011 
included Inspection and Acceptance, Risk Management, Evaluating 
Contractor's Performance, and Critical COR Roles and Responsibilities.
  oig-13-82, transportation security administration logistics center--
                          inventory management
    Our report, OIG-13-82, Transportation Security Administration 
Logistics Center--Inventory Management recognized that TSA improved its 
accountability of screening equipment at the Logistics Center. However, 
its plans and procedures for inventory management needed additional 
improvements. TSA stored unusable or obsolete equipment, maintained 
inappropriate safety stock levels, and did not develop an inventory 
management process that systematically deploys screening equipment. As 
a result, TSA may have been losing utility of equipment as it aged. 
Additionally, TSA did not use all storage space within the Logistics 
Center and might have been able to put approximately $800,000 per year, 
which was used to lease two warehouses, to better use.
Equipment in Storage
    TSA operates three warehouses in Texas, collectively known as the 
TSA Logistics Center. The warehouses store various types of Government 
equipment used at airports to screen passengers and baggage, including 
X-ray units, metal detectors, explosive trace detection units, and 
explosive detection systems. As of May 2012, TSA had more than 17,000 
items, valued at about $185.7 million, stored at the Logistics Center, 
including unusable, obsolete equipment and equipment that exceeded 
safety stock requirements.
    The quantity of Transportation Secured Equipment stored in the 
warehouse for more than 2 years accounted for approximately one-half of 
17,004 items in the warehouse, yet it represented almost $8 million, or 
4 percent, of the dollar value recorded for all inventory in the 
warehouse. This illustrates that increased quantities of Transportation 
Secured Equipment stored at the warehouse may significantly increase 
the dollar value of inventory. Further, this may result in millions of 
dollars' worth of screening equipment becoming obsolete or unusable 
while stored for an extended period.
    With prolonged storage, TSA lost utility of equipment as it aged in 
storage. As of May 31, 2012, TSA had 12 automated explosive detection 
system (Auto EDS) units at the warehouse, including three new units 
stored at the warehouse for more than 3 years. According to one TSA 
official, the component did not plan to deploy the Auto EDS units that 
were in storage. In 2007, TSA awarded contracts to acquire Auto EDS 
units to provide baggage-screening technology for checkpoints. However, 
TSA officials explained that other checkpoint technology screened 
baggage faster and required less space than the Auto EDS units and, as 
of November 2012, TSA removed all Auto EDS units from airports. The 
recorded value of the eight Auto EDS units stored at the warehouse in 
November 2012 was approximately $307 million. Upgrades for the Auto EDS 
units in the warehouse cost about $1 million. The Auto EDS units became 
obsolete while aging in the warehouse.
    TSA also stored nonscreening equipment in the warehouse for long 
periods. Specifically, TSA stored more than 3,200 furniture, fixtures, 
and equipment items in the warehouse for more than 2 years. Examples 
include conveyors (powers, exits, extensions, entries, brackets, 
extensions, and pedestals) for more than 5 years, and 41 empty 
equipment crates--used for various pieces of screening equipment--
stored for more than 2 years.
    TSA's warehouse inventory also included obsolete items. The 
inventory showed that TSA had 266 Threat Image Projection Ready X-ray 
units in the warehouse. The machine, used to screen carry-on baggage, 
is obsolete technology, being replaced by Advanced Technology and 
Advanced Technology 2 X-rays. TSA also warehoused five new whole-body 
imager training simulators (laptop computers) for more than 3 years. 
TSA replaced the whole-body imager with advanced imaging technology 
units and never used these laptop simulators.
Safety Stock
    TSA did not have appropriate safety stock levels at the Logistics 
Center to meet its safety stock requirements. TSA relied on 
nondeployable equipment, had insufficient quantities of some equipment, 
and had excessive quantities of other equipment. TSA holds safety stock 
as insurance against uncertainties such as equipment failure, emerging 
requirements, or special events. Adequate safety stock levels permit 
TSA to respond to maintenance needs while minimizing the adverse 
effects on screening operations.
    TSA relied on nondeployable screening equipment to meet safety 
stock requirements. For example, the target safety stock level for one 
type of bottle liquid scanner was 18 units. The warehouse inventory 
report for the third quarter of fiscal year 2012 also showed 18 units 
designated as safety stock; however, 10 of the 18 units needed repair 
and were nondeployable. Based on the number of bottle liquid scanner 
units designated as safety stock in inventory and the condition codes 
assigned to them, only eight units were in redeployment condition. TSA 
officials said that safety stock quantities and levels are evaluated 
and updated every quarter in conjunction with the quarterly warehouse 
disposition process. We identified equipment that needed repair, 
designated as safety stock on consecutive warehouse inventory reports.
    In February 2012, TSA evaluated safety stock inventory for nine 
types of explosive detection system and determined that the quantity of 
safety stock was deficient for six of the nine types. For example, TSA 
set the level of safety stock for one type of EDS actively under 
production and deployment at five units. Although TSA had 12 of these 
units in the warehouse, none was designated as safety stock.
    TSA's ability to respond to critical failures for this piece of 
equipment is affected by not having equipment available for safety 
stock. TSA also assessed checkpoint technology safety stock in July 
2012 and identified equipment with a shortage of warehouse safety 
stock, as well as equipment in inventory that exceeded the safety 
target. TSA also stored empty explosive trace detection cases in 
quantities that exceeded its stated level for safety stock. TSA's July 
2012 review showed almost 1,400 more empty cases in inventory than were 
necessary to meet the target safety stock level of 459. TSA officials 
explained that after explosive trace detection units were placed in 
service, airports sent the empty cases to the warehouse for storage. 
Some of the empty cases were stored in the warehouse for almost 5 
years. To optimize existing warehouse space, TSA could have recycled or 
removed the cases from inventory.
    Without appropriate safety levels, TSA was not prepared to meet 
equipment emergencies that could affect field operations and National 
security, or increase travelers' time spent at passenger screening 
checkpoints. We made two recommendations to TSA that, when implemented, 
should assist the component with managing inventory in its warehouses. 
TSA concurred with one recommendation and partially concurred with the 
other.
transportation security administration's acquisition of support service 
                               contracts
    In March 2010, we issued, Transportation Security Administration's 
Acquisition of Support Service Contracts, OIG-10-72, which included 
three recommendations to improve TSA's acquisition processes. In 
January 2012, based on information sent to us by TSA, we determined 
that all responses and corrective actions were sufficient to close our 
three recommendations, and that no other action was required.
    In conclusion, as the reports I have highlighted illustrate, DHS 
and TSA are taking steps to implement our recommendations to strengthen 
and streamline their procurement and acquisition processes. However, 
they continue to face challenges that will require further time and 
effort to overcome. My office will continue to examine these processes 
at the Department and its components and to make recommendations 
designed to improve their efficiency and effectiveness.
    Mr. Chairman, this concludes my prepared remarks. I welcome any 
questions that you or the Members of the subcommittee may have.

    Mr. Barletta. Thank you, Mr. Edwards.
    We appreciate all of you being here today. I recognize 
myself for 5 minutes to ask some questions.
    Mr. Benda, I was particularly interested in tying our 
airport security to obviously our National security, but also 
dealing with the problem that we are having with visa 
overstays. As you may know, over 40 percent of all the people 
that entered the country illegally didn't cross a border. They 
come legally with a visa, and we have a very difficult time of 
tracking their entry and exit from the country, yet alone those 
that just disappear and never leave.
    With the new technology and the technology that we are 
testing, are we looking at anything that would tie airport 
security with a biometric technology so that we can somehow 
track people as they enter and exit the country?
    Mr. Benda. Certainly, sir. The S&T Directorate is actually 
partnering with CBP and the Office of Policy at the Department 
and looking at biometric air exit, which is part of the 9/11 
Commission recommendations. The Department has a robust program 
on biographic, and S&T has been charged to look at where 
biometric technologies can serve or help augment that purpose.
    I recently actually was just over in the United Kingdom 
where we saw biometrics currently in place. They are in place 
partly for commercial reasons where they want to have what they 
call a common departure lounge, where they can merge both 
international and domestic travelers to try and actually 
increase customs duty-free sales. So there are a lot of 
technologies out there, either from fingerprint scanning to 
iris scanning, and S&T is in the process of actually building a 
test bed of viable technologies so that we can, once we have 
determined what the operational requirements are, we can see 
how well those technologies would perform, and we actually plan 
on deploying a pilot to a U.S. airport within the next year or 
2.
    So it is something we are actively pursuing. We think now 
the time is right. Europe and other areas really taken a lead 
on this. We think we can leverage off a lot of their 
investments and deploy a capability pretty quickly once that 
cost-benefit analysis----
    Mr. Barletta. What would be the time frame would you 
estimate?
    Mr. Benda. Well, it all depends, sir, whether it makes 
sense from a cost-benefit analysis, quite frankly. What level 
of security do you gain? When you look at airports versus land 
border, it will be really hard for us to do biometric 
trafficking of people leaving by land border when we have 227 
million people enter and leave every year. So the lines that we 
would have leaving would be substantial. If we were looking 
only at an air implementation I believe we could certainly have 
a pilot operational for one airport I would say within the next 
2 years would certainly be possible.
    Mr. Barletta. Mr. Lord, Mr. Richmond, and Mr. Thompson 
talked a little bit about the puffer debacle. Why is TSA in 
such a rush to put the untested technology into service without 
doing necessary research? How can we be assured on this 
committee that that won't happen again?
    Mr. Lord. Well, that is an excellent question. I am sure 
TSA cringes every time they hear the word puffer. But to their 
credit, they made some important changes in their process. The 
reason the puffer example occurred is the technology was 
successful in the laboratory and it was immediately moved to 
the field without what we call operational test and evaluation. 
That is testing in the field to make sure it really works 
before full deployment.
    Under their new process they do have operational test and 
evaluation stage where the technology is deployed on a limited 
basis in the field and carefully tested before the final 
decision is made to field it. So I think that was the important 
lesson learned from the puffer. Again, it was over $30 million 
in taxpayer money, people should be concerned about it, but I 
always like to look at it in terms of the process changes they 
made on that, and I think that was a big improvement in their 
process.
    Mr. Barletta. Thank you.
    The Chairman now recognizes the Ranking Minority Member of 
the subcommittee, the gentleman from Louisiana, Mr. Richmond, 
for any questions he may have.
    Mr. Richmond. Thank you, Mr. Chairman.
    I will start with Ms. Waters. Last Congress we heard 
repeatedly from witnesses that in order to have a strong 
acquisition program you have to ensure that you have adequate 
staff dedicated to the program. So that raises two quick 
questions, which is: What is the average tenure of TSA's 
procurement staff, and are the procurement specialists assigned 
to the accounts for the duration of their life cycle?
    Ms. Waters. Thank you for that question. I don't have the 
average tenure of the TSA workforce with me, but we certainly 
will--or the procurement workforce with me--but I will get that 
back to you.
    We do a couple of things in acquisition. One is we 
certainly keep contract specialists and contracting officers 
and outreach officers on those programs until they research a 
mature stage or complete before rotating them to other areas. 
We also have an opportunity to work with DHS in their 
internship program, so we are bringing in new 1102s to be 
filled all the time and other series that are specialized in 
acquisition, such as cost analysts, program managers who help 
us on the acquisition side of the house.
    So I think we have got a more robust workforce right now. I 
think we have got an adequate workforce to meet the need of TSA 
in terms of our procurement needs right now and our acquisition 
management needs right now. As our program grows, as TSA's need 
grows, I think we will look at the opportunity to expand that 
given our budget constraints and what we face from that 
perspective as well.
    Mr. Richmond. In terms of your goals for small and 
disadvantaged businesses, I know that you have reached your 
goals in small disadvantaged and service-disabled veterans. Are 
those goals set by TSA or are they set by DHS?
    Ms. Waters. The overall goal is set by SBA, with close 
coordination with DHS and the Office of Small and Disadvantaged 
Business Utilization, and then those goals are assigned to TSA.
    Mr. Richmond. What is your goal for contracting with 8(a) 
small businesses and did you meet that goal?
    Ms. Waters. So the 8(a) goal is a goal that is not tracked 
at the DHS level. We do set a goal at TSA which is at 2.5 
percent. Last year we did meet that goal. The 8(a) goal is a 
goal that is rolled up into the small disadvantaged business 
and in fiscal year 2012 we did meet that goal as well.
    Mr. Richmond. Let me switch over to a question which I 
think is also a security concern and that is the ability or--
well, you all allowing companies outside the United States to 
manufacture the TSO uniforms. I believe it was either mentioned 
that it was a trade agreement or NAFTA that prohibited you 
from--prohibited you from prohibiting outside companies to make 
it, if that makes any sense. I was just wondering if we have 
safeguards for our military uniforms why can't we have the same 
thing for our TSO uniforms?
    Ms. Waters. So it is my understanding that because TSA is 
under the NAFTA and the Chilean trade agreement act, that we 
treat companies that produce items in Canada and in Mexico as 
domestic companies. While we certainly want to comply with 
that, with those requirements, and what the requirements that 
the Federal Acquisition Regulation require of us, we really 
don't have a say at the end of the day where those companies 
end up manufacturing those uniforms. So we issued the 
solicitation, the company responded, they received the award, 
and then chose to have those items manufactured in those 
locations.
    Mr. Richmond. Do you all view it as I view it, as a 
security concern if those uniforms are manufactured outside the 
United States?
    Ms. Waters. I don't think we have put that designation on 
it. It is certainly something that we can look at. If that 
designation requires us to have those items procured 
domestically then we would certainly comply with that.
    Mr. Richmond. Switching over to Mr. Edwards, quickly, how 
has instituting the FAR helped TSA to refine its acquisition 
program and ensure greater transparency and that consistency is 
embedded in the program?
    Mr. Edwards. In June 2008, prior to that TSA was not 
following the FAR, but after June 2008 they are and instituting 
and following FAR. TSA has also instituted internal guidance 
and policies that augment the FAR regulations. So I think it is 
a good thing that they are following the FAR regulations and 
also the Department has overall visibility over it.
    Mr. Richmond. Thank you.
    Mr. Chairman, I see my time has expired and I yield back.
    Mr. Barletta. Thank you, Mr. Richmond.
    The Chairman now recognizes the Ranking Minority Member of 
the full committee, the gentleman from Mississippi, Mr. 
Thompson, for any questions he may have.
    Mr. Thompson. Thank you Mr. Chairman.
    Ms. Waters, Representative Richmond talked about the small 
business goals and what have you. Why are the TSA small 
business goals the lowest in the agency?
    Ms. Waters. One of the reasons why our goal is at 23 
percent is that I think there is a recognition by SBA and by 
DHS that with the spin that we have in our technology area it 
is a challenge to separate the remaining dollars out and 
achieve a higher goal. Frankly, we are having a challenge 
meeting the 23 percent goal. While we recognize that those are 
challenges, we are also looking at that portfolio, the security 
technology portfolio, and our all of our portfolios for 
opportunities for small business.
    Mr. Thompson. Well, can you provide the committee with 
those challenges that you have to overcome if those small 
business requirements are to be met?
    Ms. Waters. Yes, sir. What we know today is part of the 
challenge with security technology is the testing environment, 
is a company having not only small but large businesses, having 
the capital to be able to endure the testing environment that 
happens at TSA. So what Mr. Benda talked about, about being 
able to use different information that used to be proprietary 
and giving that to the small businesses, gives them maybe not 
the same opportunity but a different opportunity to succeed in 
the security capabilities area.
    Mr. Thompson. Well, have you tried narrowing your 
procurement so that you don't write small businesses out but 
you write them in?
    Ms. Waters. So certainly we do that in many cases. We 
certainly set aside for small business, we have done that with 
the Screening Partnership Program. We have not done that in the 
technology area as of yet, but I think as we mature that 
information and those requirements and we see that opportunity, 
in my opinion there is nothing that is off the table that would 
not include small business if we could find viable candidates.
    Mr. Thompson. Well, let me for my own point say that you 
lower the goal based on what you say you can't find. Can you 
provide us information on what you can't find and what the 
problem is? My issue here is you have lowered the goal and you 
are not even meeting the lower goal. So why not keep it at or 
near where your other agencies are and just say we are trying 
to get there? But you lowered the bar and some of us hear the 
lowering the bar too many times, and I just think from my own 
position it is probably a question of will to get it done.
    Now, why have we lowered the bar on small disadvantaged 
businesses compared to everybody else?
    Ms. Waters. I don't know that the bar was lowered. My 
understanding is that our goal has been 23 percent for several 
years now. Certainly we will provide you with information on 
what we see as those challenges.
    Mr. Thompson. Small disadvantaged, not small business.
    Ms. Waters. So our small disadvantage business goal in 
fiscal year 2012 was 5 percent and we exceeded that by 7.8 
percent.
    Mr. Thompson. Yeah, but it is the lowest. In that instance 
you lowered it and went over it. In lowering it your basement 
or your floor is lower than anybody else in the agency. So why 
not raise it to where everybody else is?
    Ms. Waters. So our goal is again to be successful in all 
areas of small business and we will certainly take that back 
and look at that.
    Mr. Thompson. So you lowered it in order to look 
successful?
    Ms. Waters. I don't believe that that was the case.
    Mr. Thompson. That is what you just said. I mean, you just 
said you lowered it in order to be successful.
    Ms. Waters. But TSA does not unilaterally determine the 
goal, DHS determines the goal.
    Mr. Thompson. All right.
    Mr. Lord--actually it is not Mr. Lord. Ms. Waters again. I 
appreciate your honesty and information. Have we mastered the 
overreliance on contractors in acquisition or is that still a 
challenge?
    Ms. Waters. I believe that we have currently about 13 
contractors supporting my staff of about 170 FTE. I am not 
quite sure what our past numbers were, but we see that as a 
necessary need currently to achieve some goals in some areas 
that we are trying to increase our workload in.
    Mr. Thompson. So you said 13 individuals?
    Ms. Waters. Yes, sir.
    Mr. Thompson. And that is it?
    Ms. Waters. Yes, sir.
    Mr. Thompson. Very good. I yield back.
    Mr. Barletta. Thank you Mr. Thompson.
    The Chairman now recognizes himself for a second round of 
questions.
    Ms. Waters, we have heard from many technology vendors that 
TSA is not transparent enough to allow for efficient research 
and development planning by the private sector to meet TSA 
needs. This may result in less effective and mature screening 
technologies once TSA is ready to make a purchase. I would like 
each of you to answer this. Do you believe TSA should develop 
and share a long-term technology road map to help guide future 
investments by industry? In what ways would transportation 
security benefit from such a road map or planning document?
    Ms. Waters. So I certainly think that we need to provide an 
increased amount of information to industry so that they are 
aware of what our plans are, what our current state is, and 
what we believe our future state needs to be. Part of that is 
our preparing of and getting ready to publish our test and 
evaluation guide which we think will provide critical 
information to industry that speaks to the fact that when they 
come into our testing environment it takes much longer than 
either industry or TSA expects when we are trying to do 
developmental testing and operational testing. So that is one 
area where we see we are making progress and sharing 
information with industry.
    Mr. Barletta. Mr. Benda.
    Mr. Benda. Thank you Mr. Barletta. I do think I agree with 
Ms. Waters, we do need to be more transparent with industry. I 
think that is really the goal of the R&D strategies that we are 
developing in conjunction with TSA. That is part of the reason 
we briefed them at a webinar that is open to all of industry.
    I do think in the past we haven't done as good a job but we 
did have a first step at this where we had a signed aviation 
security R&D strategy with TSA, with Robin Kane and myself, the 
former AA of security capabilities. One of fruits of that is 
actually I talked about the new X-ray device that would 
actually be able to identify what is in your bag. That is 
actually coming out of a current investment by a vendor, $15 
million with their own IRAD or internal money against that, $9 
million of Government money, and we expect the vendor to put 
another $9 million in it.
    So I think we are starting to see again some fruits of that 
labor and I think we need to improve upon it and hopefully have 
more of those come down. The challenge I have when you talk 
about a technology road map is that I am not sure where the 
next technology comes from. I am much more interested in a road 
map of what are the priorities and challenges we have, because 
I believe necessity is the mother of invention. We may not have 
been able to predict 5 years ago that we would be able to use a 
technique called X-ray diffraction to do identification of 
materials in a bag. So by telling them what our challenges and 
capabilities are I think it is a better approach than saying 
you have to achieve this technology.
    Mr. Barletta. Mr. Lord.
    Mr. Lord. I agree with the prior two witnesses. We often 
meet with vendors and they sometimes express concerns about 
limited transparency. I noticed the Department and TSA, they 
seem to be implementing different practices and sessions to 
help share more information with industry, such as industry 
days. They have those on a regular basis and there are other 
forums that take place that are aimed at sharing more 
information.
    But some of the vendor complaints, quite frankly, are 
difficult to evaluate. They always want perfect information, 
and some is obviously procurement-sensitive and you simply 
can't share it with the private sector. But I think in general 
of course more information shared to the best you can the 
better and the happier they will be in the long run and the 
better sense they will have of what your requirements are and 
needs.
    Mr. Barletta. Mr. Edwards.
    Mr. Edwards. Yes, sir. Just like in an acquisition program 
you look at the entire life-cycle cost from cradle to death. 
There definitely needs to be a road map that they need to 
provide that takes into account with the changing in the 
threats. You know, as the threats and the environments change, 
we should be able to adjust, but you definitely need to have a 
road map. You cannot just blindly use the technology, throw it 
away, and then try to go to another one. You definitely need to 
have a road map. Everybody else does.
    Mr. Barletta. Thank you.
    Mr. Lord, in 2009 GAO reported that TSA had not completed a 
cost-benefit analysis on investments for screening passengers 
at airport checkpoints. That was 4 years ago, and my 
understanding is that there has still not been a full cost-
benefit analysis completed. What is the value gained from a 
cost-benefit analysis? Is it primarily that we could eliminate 
programs or requirements that are too expensive for the 
comparably small security benefit that they provide?
    Mr. Lord. A cost-benefit analysis is a really important 
piece of information for managers that lets them consider 
making an investment in an area and also assures them that the 
investment is worthwhile, the benefits exceed the cost. Just so 
you know, that recommendation is still outstanding as of today. 
We have had recent discussions with TSA, they hope to close it 
out by the end of the fiscal year. But, again, a lot of our 
work, looking very broadly across all the programs, that is a 
weakness we have identified and we believe TSA perhaps may need 
to ramp up their capability.
    A related issue is their life-cycle cost estimates. 
Obviously that is an important component of a cost-benefit 
analysis. We consistently identified weaknesses in the way they 
put those together. Are they getting better? Yes. But, again, 
that is still an area they perhaps may want to invest more 
resources in.
    Mr. Barletta. Has TSA begun to do full cost-benefit 
analysis for any of its major programs?
    Mr. Lord. That is a good question. There has been one for 
AIT that was shared with us. So in some cases they do, you 
know. The Passenger Screening Program, that is essentially the 
umbrella program which includes individual components, pieces 
of technology within it. So there have been some, as I recall, 
some cost-benefit analysis done for individual pieces. But we 
thought it was important to have one for the entire program 
given it consists of various technologies that all have to work 
together to achieve the same end.
    Mr. Barletta. Ms. Waters, do you agree this would be a 
prudent step for your agency to take?
    Ms. Waters. Yes, sir. What I would add is we do have one 
major program, which is TIM, that does have a complete analysis 
of alternatives, that does include a cost-benefit analysis. Mr. 
Lord is right, we are working through each and every one of our 
major acquisition programs to ensure not only that the cost-
benefit analysis is completed, if we are not in the O&M stage, 
but certainly you need documentation that speaks to the 
business case that we are trying to do for that investment.
    Mr. Barletta. Thank you.
    The Chairman now recognizes Mr. Richmond for a second round 
of questions.
    Mr. Richmond. Mr. Lord, and very quickly to pick up where 
Chairman Barletta left off, do you have a recommendation for 
the most effective means for TSA or DHS to assess cost-benefit 
analysis?
    Mr. Lord. We come in and we evaluate their efforts. 
Typically they ask us: Well, what standards or best practices 
should we be using? We refer them to the GAO website. We have 
quite an extensive list of standards, criteria, so-called. We 
call it the cost and schedule guide. It is like the Bible for 
doing this, and it is publicly posted on our website. In the 
past when we used it at TSA we actually send one of our cost 
experts over and they sit down with TSA. Sometimes we have 
multiple sessions. They walk them through the guide and they 
compare it to what they provided so they can get a better sense 
of what we are looking for. So I think that is a really 
important step we do. It is essentially analogous to a 
consulting service we provide, free of charge of course. But we 
try to help them better understand our guide, our criteria that 
we use in evaluating their cost estimates.
    Mr. Richmond. Mr. Edwards, have you had an opportunity to 
review how the Department, how they have taken steps to address 
some of the concerns you have previously raised in some of your 
audits?
    Mr. Edwards. Yes, sir. The Department has made progress in 
its oversight and controls by reissuing the advice, the 
acquisition management directive, but the Department needs to 
go further. There needs to be more guidance provided in certain 
areas. For example, it is not clearly defined what an 
acquisition program is. They need to give guidance on that. Not 
everybody, not every component uses the tool to track this, it 
is called NPRS, not everybody is using that. Not every 
component uses all the available tools regarding acquisition, 
and then there is not clear visibility on the acquisition 
portfolio. Because of this, if there is a simple procurement, 
some components create a program management office to oversee a 
simple procurement. It is a waste of administrative cost. So 
there is some progress but much work needs to be done.
    Mr. Richmond. Ms. Waters or Mr. Benda, would you care to 
address the last part of Mr. Edwards comment?
    Ms. Waters. So certainly in working with PARM we are 
maturing and gaining more robust acquisition management program 
structure at TSA. We have outreach officers who work with our 
program offices to guide them through the acquisition 
documentation process that includes all of those things as an 
AOA, a cost-benefit analysis, a life-cycle cost estimate to 
ensure that we are making the soundest business case that we 
can. We also have people embedded from DHS PARM who come and 
assist us with our cost information. So we are taking advantage 
of any and all resources to build our program to strengthen it.
    Mr. Benda. Certainly, Member Richmond. It is one of those 
things that S&T is working closely with under secretary of 
management shop to try and prove acquisitions overall for the 
Department. In S&T we rarely have acquisition-level programs 
above that $300 million where we are required to establish the 
program office. So we don't necessarily cross that threshold 
very often, if at all. We are part of the process going forward 
in making sure that when the Department and other components do 
analysis of alternatives, other technical reviews, that S&T can 
actually assist in those when necessary.
    Mr. Richmond. Ms. Waters, and just going back to the small 
business goals, and if I wrote down correctly I think you told 
Ranking Member Thompson that you had 13 contractors that were 
supporting you all?
    Ms. Waters. Supporting OA, Office of Acquisition.
    Mr. Richmond. Now, those 13 contractors, do they all work 
for one company or are they all independent contractors?
    Ms. Waters. They work for different companies; it is not 
all one company.
    Mr. Richmond. Now, what is the breakdown of those 
companies? Are those small businesses, are those big 
businesses, service-disabled veterans, what?
    Ms. Waters. I don't have that information, but I will 
certainly get that for you.
    Mr. Richmond. Thank you, Mr. Chairman. I yield back. Thank 
the witnesses for their time.
    Mr. Barletta. Thank you, Mr. Richmond.
    The Chairman now recognizes Mr. Thompson.
    Mr. Thompson. Thank you very much.
    Mr. Lord, as part of your prepared testimony to this 
subcommittee last September there was extensive documentation 
about TSA's failure to acquire a DHS-approved acquisition 
program. Let's take the Electronic Baggage Screening Program. 
As of today where is TSA on that?
    Mr. Lord. That is a good question. We raised that last year 
and I am happy to report they now have an approved acquisition 
program baseline. It was approved August 17 last year. The 
reason that is important, I think it is really important to 
understand it is a program baseline that you can measure 
progress against. In this document they tell you what this 
thing is going to cost, when it is going to be delivered, and 
what its capabilities are. It is analogous to buying a car. Who 
would buy a car if you didn't know what it was going to cost, 
what the performance was, gas mileage or horsepower, or when 
the dealer was going to give it to you? So how can you invest 
in a system without the acquisition program baseline where you 
have all this important information in it?
    So the good news is they completed one, but it is a few 
years after they made the initial decision to go forward with 
the technology. Under their guidance you are supposed to do it 
at the front of program, not toward the back. To their credit 
they have taken our recommendation to heart and they have one, 
so we think that is an important step. You can certainly update 
it as you go along, too. But, again, we call it a foundation 
document, it is just not an obscure document nobody ever reads. 
It has really important information in it. So we think these 
baselines are real important.
    Mr. Thompson. If we do that, then from an acquisition 
standpoint, and if we follow it, we should get a better bang 
for our bucks?
    Mr. Lord. Absolutely, absolutely. Also you will be able to 
track, like if you have another hearing a year from now you can 
say, hey, in your original baseline you said A, B, and C, are 
you there or did you shift everything to the right or change 
everything?
    Mr. Thompson. Thank you very much.
    Mr. Edwards, yesterday your office released a report 
relative to the TSA's storage of equipment. Did TSA provide you 
a justification for why it would continue to purchase new 
equipment such as an enhanced metal detector when it already 
had one that had been in storage for 4 years?
    Mr. Edwards. No, sir. In fact we have not done any review 
on a future buy, so we have not received anything.
    Mr. Thompson. So are you aware of a system that TSA has 
available to it that could somehow age the equipment on-site or 
something that would trigger or some kind of tickler system 
that would say before you buy something we have it in 
inventory? Are you aware of any of that?
    Mr. Edwards. No, sir.
    Mr. Thompson. Well, I guess he answered the question. Do 
you plan to pursue it or do we need to send a follow-up letter 
asking you to look into this or what?
    Mr. Edwards. We are currently looking at the AIT 
procurement acquisition piece of it, but if this is something 
you want us to look into it, I will add that to my----
    Mr. Thompson. Well, Mr. Chairman, I think just the fact 
that we are buying equipment and we have got the same equipment 
that has been on hand for 4 years and nobody knows it is on-
hand, somehow we are missing what I think is a reasonable 
opportunity to save the taxpayers some money by just going in 
the warehouse, dusting it off--I mean, not dusting it off, but 
you do whatever you need to do. But since we own it already I 
think it is reasonable to say that we should use it first 
rather than to acquire something else?
    Do you have any idea how much that kind of acquisition 
procedure, how much that cost the taxpayers?
    Mr. Edwards. No, sir. But now, as the assistant 
administrator talked about, DHS has created the Program Ability 
and Risk Management Office, PARM, which is supposed to do an 
independent assessment. They work with the components and they 
also look at different intervals to do their independent 
assessment. So it is something maybe the Department they are 
established to do. I don't know if they are doing it.
    Mr. Thompson. So it looks like we need to get you a second 
letter. Thank you.
    Mr. Barletta. Thank you, Mr. Thompson.
    The Chairman recognizes Mrs. Brooks.
    Mrs. Brooks. Thank you, Mr. Chairman.
    A question for Ms. Waters. As you are aware, this 
subcommittee has conducted consistent and vigorous oversight 
over the procurement over the last several years, but one issue 
that we have consistently heard from vendors is the kind of 
inconsistent level of engagement between TSA and the contractor 
community. We have heard that over the last year there has been 
improvement and that TSA has made progress in the area, and in 
fact is engaging a group like the Security Manufacturers 
Coalition and working through groups like the Washington 
Homeland Security Roundtable to reach a broader audience. So 
while there has been good progress, we understand there is a 
shift, however, of who engages with the vendor community. 
Whereas previously program-level personnel and individuals 
could have non-acquisition-specific conversations with vendors, 
apparently today that is prohibited. Asking if this is true 
and, if so, why has there been this shift in this policy?
    Ms. Waters. So we are very eager to, and think it is a very 
necessary part of what we do, to have robust engagements with 
industry, and we engage at all levels, senior level, 
operational levels, small businesses, large businesses, 
coalitions, any way that we can engage with industry we look to 
do that.
    What we are trying to do internal to TSA is to ensure that 
when vendors do have conversations their program offices that 
the acquisition or procurement process is a part of that 
conversation. We want to make sure that we are capturing that 
need at the very beginning and that we are ensuring that there 
is a fair and equitable process to that acquisition from 
beginning to end.
    Mrs. Brooks. So program-level offices and officers can have 
discussions----
    Ms. Waters. Yes, they can.
    Mrs. Brooks [continuing]. With the vendor community.
    Ms. Waters. We encourage that.
    Mrs. Brooks. But anything having to do with acquisition has 
to do what?
    Ms. Waters. We just want to ensure that we are part of that 
conversation. The engagements with industry are important and 
necessary and it gives us information on how to shape what we 
need to do. But it is also a time where we want to make sure 
that we are not talking about a known requirement, that it is 
just a conversation about possibilities, not a conversation 
about a need. So when that conversation turns into a need is 
when we need to make sure that we are putting it inside the 
acquisition process and not sharing that information unless we 
are sharing it with all. So that is why we are taking those 
steps.
    Mrs. Brooks. Certainly. Can you share with us who some of 
those coalitions or groups are besides maybe the two that I 
have mentioned?
    Ms. Waters. So besides the Washington Homeland Security 
Roundtable, I think it is the--I am sorry, I am blanking out on 
the name.
    Mrs. Brooks. The one that I was aware of, the Security 
Manufacturers Coalition.
    Ms. Waters. Yes, ma'am. There are several others.
    Mrs. Brooks. Okay.
    Ms. Waters. I can get you a list of those, too.
    Mrs. Brooks. Okay.
    Ms. Waters. We also, we have a dedicated industry liaison, 
we do industry days on a regular basis. We do industry days for 
specific program offices, as well as doing industry days for 
small business. So we spend quite an amount of resources 
engaging with industry.
    Mrs. Brooks. Well, and I would assume that industry is the 
group that fosters the innovation and comes up with new ideas 
for TSA. So when you mention when it gets to a need, who 
determines a need, who determines when you say when it rises to 
the level of need that we need to ensure everyone is involved.
    Ms. Waters. So when the Government decides that it is a 
need, is it a Governmental decision, something that is 
inherently Governmental to decide when there is a need, then 
that is when the Federal Acquisition Regulation kicks in and 
says that, you know, we need to make sure that we are treating 
the process fair and equitably. So I can't share information 
with one company that I don't share with all. So we do 
typically go silent in terms of how we are engaging with 
industry at that point because we want to make sure that the 
process has integrity.
    Mrs. Brooks. Certainly. That would be absolutely necessary. 
Just want to make sure that TSA is having very robust 
discussions with industry because of the innovation and because 
of their ideas.
    Thank you. I yield back.
    Mr. Barletta. Thank you, Mrs. Brooks.
    I would like to thank the witnesses for their testimony 
today and the Members for their questions. The Members of the 
committee may have some additional questions for the witnesses 
and we will ask you to respond to these in writing.
    Without objection, the committee stands adjourned.
    [Whereupon, at 2:45 p.m., the subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              

    Questions From Chairman Richard Hudson for Karen Shelton Waters
    Question 1. In the last Congress, TSA received criticism for 
keeping a vast amount of equipment in storage and as a result, altered 
its procurement policies to a ``Just in Time'' system that purchases 
small amounts of equipment immediately prior to deployment. While this 
prevents a backlog of equipment, do you believe that this is the best 
approach in all cases and allows industry to leverage its supply and 
manufacturing networks to provide the highest quality units at the 
lowest cost? If not, then isn't this a move from one bad business 
practice to another?
    Answer. Response was not received at the time of publication.
    Question 2a. The Consolidated and Further Continuing Appropriations 
Act of 2013 included language that directed TSA to provide a 5-year 
investment plan that includes projected funding levels for the next 5 
fiscal years for all passenger screening technology acquisitions.
    Has TSA completed this plan? If so, when do you expect the 
committee to receive a copy? If not, when do you expect it to be 
completed?
    Answer. Response was not received at the time of publication.
    Question 2b. Will the 5-year investment plan be made publically 
available? If so, when do you expect it to be made public?
    Answer. Response was not received at the time of publication.
    Question 3a. As you are aware, last year TSA was planning on 
purchasing CAT/BPSS, a technology intended to verify the authenticity 
of passenger identifications and boarding passes, and compare these two 
pieces of information to ensure a match. At a subcommittee hearing last 
Congress, Members stated concerns about the technology including the 
fact that it would not be linked to State Department of Motor Vehicles 
Databases or to TSA's No-Fly or Selectee lists. At that time, TSA 
decided to postpone the purchase of CAT/BPSS. However, the President's 
fiscal year 2014 budget request includes funding for it and a pre-
solicitation procurement notice was issued on April 24 for boarding 
pass scanners, which TSA hopes to eventually marry up with credential 
authentication technology.
    Has TSA completed a cost-benefit analysis of this technology?
    Answer. Response was not received at the time of publication.
    Question 3b. Has TSA resolved the deficiencies of the technology 
that were identified last year including ensuring that it can link to 
State Department of Motor Vehicle Databases and TSA's No-Fly or 
Selectee lists?
    Answer. Response was not received at the time of publication.
    Question 3c. Has DHS Science and Technology been working with TSA 
to help CAT/BPSS meet technical requirements? If so, in what way? If 
not, why not?
    Answer. Response was not received at the time of publication.
    Question 4. Some technology vendors are finding that in the wake of 
sequestration, TSA is saying that it is not able to accept technologies 
that have been procured because there is now a shortage of staff to 
conduct either Site Acceptance Testing or Final Acceptance Testing of 
systems. This creates a difficult situation for vendors, because if 
their systems aren't tested and accepted, they could be in violation of 
the terms and conditions of their contracts under the Federal 
Acquisition Regulation.
    If this is in fact an issue that has arisen post-sequestration, 
what is TSA doing to assure vendors that they are not in violation of 
the terms and conditions of their contracts because of TSA staffing 
shortfalls?
    Answer. Response was not received at the time of publication.
    Question 5. During the hearing, you mentioned TSA's partnership 
with the Washington Homeland Security Roundtable (WHSR), a non-profit 
group comprised of companies that are actively engaged in homeland 
security issues. In addition, you stated that WHSR created the Industry 
Engagement Group and the TSA Contracting/Acquisition Policy Focus 
Group.
    Do any of the participants of these groups represent a security 
technology manufacturer? If not, why not?
    Answer. Response was not received at the time of publication.
    Question 6a. It is my understanding that TSA and other components 
within DHS use strategic sourcing and often coordinate when purchasing 
detection equipment such as metal detectors, explosive detection 
systems, and radiation detectors for screening people, baggage, and 
cargo at airports, seaports, and land ports of entry.
    Do you think TSA is taking full advantage of strategic sourcing and 
doing a sufficient job coordinating purchases of the same or similar 
detection capabilities with other components? Why or why not?
    Answer. Response was not received at the time of publication.
    Question 6b. How much money do you think DHS has saved by using 
strategic sourcing to acquire its detection equipment?
    Answer. Response was not received at the time of publication.
    Question 7. I understand that TSA is currently exploring the option 
of allowing vendors to use third parties to certify and test their 
technologies. Can you describe what that process would look like and 
when TSA may make a determination of whether to utilize third-party 
testing?
    Answer. Response was not received at the time of publication.
         Questions From Chairman Richard Hudson for Paul Benda
    Question 1. Do you believe it would help industry's research and 
development efforts if TSA were to work with you and establish a 5-year 
acquisition roadmap? Could metrics such as Technology Readiness Levels 
be helpful in communicating such roadmaps?
    Answer. Response was not received at the time of publication.
    Question 2a. TSA seems to struggle with getting innovative new 
security technologies deployed in a quick and cost-effective manner.
    Can you please explain to the committee what DHS S&T is doing to 
help improve the transition of new technologies?
    Answer. Response was not received at the time of publication.
    Question 2b. Can you cite a specific example where TSA and S&T have 
worked together and successfully transitioned a major technology 
acquisition?
    Answer. Response was not received at the time of publication.
    Question 2c. Is there a role for National laboratories and 
universities to help improve the success of technology transitions?
    Answer. Response was not received at the time of publication.
    Question 3. Mr. Benda, you and the under secretary have described a 
strategy for ``technology foraging.'' Under that strategy, you would 
first try to identify mature technologies from other applications, for 
example military, that could be leveraged for homeland security 
applications.
    Do you have a formal process yet for technology foraging?
    Answer. Response was not received at the time of publication.
    Question 4. Last year, TSA was planning on purchasing CAT/BPSS, a 
technology intended to verify the authenticity of passenger 
identifications and boarding passes, and compare these two pieces of 
information to ensure a match. At a subcommittee hearing last Congress, 
Members stated concerns about the technology including the fact that it 
would not be linked to State Department of Motor Vehicles Databases or 
to TSA's No-Fly or Selectee lists. At that time, TSA decided to 
postpone the purchase of CAT/BPSS. However, the President's fiscal year 
2014 budget request includes funding for it and a pre-solicitation 
procurement notice was issued on April 24 for boarding pass scanners, 
which TSA hopes to eventually marry up with credential authentication 
technology.
    Has DHS Science and Technology been working with TSA to help CAT/
BPSS meet technical requirements? If so, in what way? If not, why not?
    Answer. Response was not received at the time of publication.

                                 
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