Homeland Security: DHS's Chemical, Biological, Radiological, Nuclear and Explosives Program Consolidation Proposal Could Better Consider Benefits and Limitations
Released: 2016-09-12T00:00:00

Letter

Background

In June 2015, DHS delivered its CBRNE Functions Review Report to Congress which proposed consolidating the agency’s core CBRNE functions (see fig. 1), into a new Office of CBRNE Defense.

According to DHS officials, the agency’s proposal to consolidate its CBRNE functions adopts the primary recommendation from a previous DHS study on CBRN consolidation conducted in 2013. At that time, DHS assembled a review team to evaluate CBRN alignment options and produced a report on its findings for the Secretary of Homeland Security. According to DHS officials, the alignment options from the 2013 report were updated in 2015 based on the Secretary’s Unity of Effort Initiative, to include transferring CBRNE threat and risk assessment functions from the DHS Science and Technology Directorate to the proposed CBRNE Office, as well as including the DHS Office for Bombing Prevention from the National Protection and Programs Directorate.

In December 2015, legislation that would amend the Homeland Security Act of 2002 to establish within DHS a consolidated CBRNE Office was passed in the House and referred to the Senate for consideration. This legislation, if approved, would direct the agency to create a new CBRNE office led by an Assistant Secretary responsible for: (1) developing, coordinating, and maintaining DHS’s overall CBRNE strategy and policy; (2) developing, coordinating, and maintaining periodic CBRNE risk assessments; (3) coordinating DHS’s CBRNE activities with other federal agencies; (4) providing oversight for DHS's preparedness for CBRNE threats; and (5) providing support for operations during CBRNE threats or incidents. As described in figure 2, the new CBRNE Office would be comprised of Chemical, Biological, Nuclear, and Explosives mission support divisions. As of July 2016, this legislation had not been taken up by the Senate.

DHS Considered Several Key Factors, but Has Limited Analyses and Documentation Underlying the Benefits and Limitations of Its CBRNE Consolidation Proposal

The CBRNE report and summaries provide some insights into factors considered, but did not include associated underlying data or methodological information, such as how benefits and costs were compared or the extent to which stakeholders were consulted. According to DHS officials, DHS could not locate the underlying information associated with analyses that informed the consolidation proposal due to staff turnover. Without such underlying documentation, we could not fully determine the extent to which DHS considered the benefits and limitations of a CBRNE consolidation as part of its decision-making process.

According to DHS’s report to Congress and the summary documents provided to us, the department developed decision-making criteria, identified as “desired outcomes” and “near-term goals” for its proposed reorganization, and consulted with DNDO, OHA, S&T and leadership of other DHS components, the Office of Management and Budget (OMB) and National Security Council Staff. Also, according to an Office of Policy official, DHS consulted with the Executive Office of the President as well as Congressional staff on its consolidation plan. DHS considered five alignment options, as shown in figure 3, and provided a general assessment of the effects of reorganization on its CBRNE mission.

In May 2012, we reported on key questions for agency officials to consider when evaluating an organizational change that involves consolidation. Table 1 provides a summary of the key questions for evaluating consolidation proposals from this previous work and a summary of our assessment of whether documentation provided to us and interviews with agency officials indicated whether each question was addressed.

DHS’s June 2015 report to Congress and the supporting documentation we reviewed included an evaluation of some, but not all, key questions listed above in Table 1. As previously noted in our May 2012 report, these questions are important to consider when evaluating an organizational change that involves consolidation. Specifically, DHS’s consolidation proposal: Identified strategic outcomes and goals and considered problems to be solved, but did not fully assess and document potential problems that could result from consolidation. DHS’s proposal and supporting documents identified eight near-term goals to be achieved within two years of consolidation, such as providing appropriate CBRN focus and visibility within the department and preserving programs and activities that are currently operating effectively, as shown in figure 3. DHS officials also indicated in documents provided to us several problems that may be solved by a CBRNE program consolidation. For example, in a November 2014 letter from the Secretary of Homeland Security to a congressional committee chair, the Secretary states that consolidation will provide a clearer focal point for external and DHS component engagement on CBRNE issues, among other things. In addition, in a briefing to Congress, DHS officials defined challenges a CBRNE consolidation may address, such as inconsistent CBRN‐related messaging to DHS stakeholders and confusion over a CBRN focal point within DHS and for external stakeholders.

The proposal and supporting documents did not adequately address problems that consolidation may create. Component officials we interviewed provided several examples of potential problems due to consolidation. For example, officials told us that merging staff into one office could result in a need for additional support staff to manage day-to-day functions such as human resources, contracting, and financial management for a larger number of employees. Officials further stated that they may not have sufficient staff to complete these mission needs in a consolidated CBRNE unit. Additionally, component officials expressed concern over the potential allocation of resources in the consolidated office. According to these officials, there is a difference between components with missions that focus on potential terrorism events that are more likely to occur but with limited consequence versus components that focus on potential events that are not as likely to occur but have the potential to be far more catastrophic. These officials added that consolidating these components may complicate resource allocation decisions due to the varying degree to which certain CBRNE activities are seen as a priority over others. According to a DHS official, Office of Policy officials met with two of the five affected CBRNE components to determine potential unintended problems and to develop mitigation measures. However, not all affected components were included in the discussions and the problems and measures were not documented. According to our May 2012 report, the key to any consolidation initiative is validating specific goals that have been evaluated against a realistic assessment of how the consolidation can help achieve these goals. In our past work, we have also found that it is important for agencies to recognize that delays and disruptions are common during consolidations, which can compromise or introduce new problems during these initiatives. As such, it is key that agencies work to anticipate and mitigate these issues or they risk seeing costs increase.

Did not conduct and document a comparison of benefits and costs. While committee report language directed DHS to include an assessment of whether consolidation could produce cost savings, as of May 2016, DHS had not documented a comparison of benefits and costs for its consolidation plan. DHS officials told us that in 2013 they developed a rough cost estimate for the consolidation option, but provided no documentation or analysis supporting the estimate. According to DHS’s proposal, additional analysis is required to determine if budgetary efficiencies can be gained by the recommended consolidation option. An Office of Policy official told us that DHS has yet to conduct this additional analysis, noting that as a result of an appropriations act restriction, officials decided to take few concrete steps to plan for or move forward with the consolidation. Our May 2012 report highlights the importance of benefits and cost considerations as part of the decision- making process for potential organizational consolidations. More specifically, given the potential benefits and costs of consolidation, it is imperative that Congress and the executive branch have the information needed to help effectively evaluate consolidation proposals. Demonstrating that a consolidation proposal is based on a clearly-presented business case or an analysis of benefits and costs can show decision-makers why the initiative is being considered. If agencies cannot reasonably conclude that benefits will outweigh costs, the agency may need to consider consolidation alternatives to meet its goals.

Did not fully identify or document consideration of up-front costs. DHS considered potential up-front costs associated with a CBRNE consolidation but did not document these costs or how they were considered during the reorganization decision-making process.

For example, an Office of Policy official told us that DHS considered some potential up-front costs associated with detailing 19 Office of Bombing Prevention staff to DNDO. However, documentation we reviewed did not describe the extent to which these up-front costs were considered in the decision-making process. Additionally, DHS officials stated they did not conduct an up-front cost estimate associated with changes to physical infrastructure for the consolidation proposal, because the agency intended to leverage existing plans to move to a new location. According to an Office of Policy official, to address the up-front costs associated with the consolidation, DHS plans to take advantage of plans to move staff and resources to the St. Elizabeth’s site in fiscal years 2017 and 2018 in an effort to reduce some of the expenses born out of the consolidation. Even if some of the up-front costs are expected to be covered through existing relocation plans, identifying and accounting for the full amount of up-front funding is important to fully evaluate or prepare for a consolidation. Our May 2012 report indicates that consolidation initiatives often have up-front costs, and agencies must pay them before they can realize any intended gains or savings. For example, agencies may need to pay for equipment and furniture moves or fund employee transfers and buyouts. Further, we also found that a lack of up-front funding can prevent a potentially beneficial initiative from getting off the ground or derail an initiative already underway. Our review of DHS’s proposal does not indicate that these potential expenses or any other up-front costs were fully considered in developing the proposal.

Conducted limited external stakeholder consultations. DHS conducted limited external stakeholder outreach in developing the consolidation proposal, and thus the proposal may not sufficiently account for stakeholder concerns. According to an Office of Policy official, the review team consulted with OMB, National Security Council Staff, the Executive Office of the President (EOP) and Congressional staff. Among the six components involved in the proposed consolidation, DHS officials stated that two of these components, DNDO and OHA, have significant working relationships with a wide range of external stakeholders including the Departments of Defense, State, Energy, and Health and Human Services. However, while the impact of consolidation to external stakeholders was a consideration, agency officials did not solicit input directly from the full range of interagency stakeholders associated with each of the CBRNE components in developing the proposal.

According to a DHS Office of Policy official, DHS’s assessment of its consolidation was that it was an internal reorganization with a goal to improve outward-facing messaging and collaboration. This official also indicated that both DNDO and OHA are considered useful sources for identifying potential positive or negative consolidation impacts for their stakeholders. DHS leadership was satisfied that discussions with the EOP in addition to DNDO and OHA’s engagement with their respective external stakeholders sufficiently accounted for the perspectives of interagency partners, according to the DHS Office of Policy official. However, DHS did not provide documentation of any external stakeholder consultations, including the outcome of any discussions related to the consolidation proposal or how this information was used in the decision-making process. In May 2012, we reported that consolidation success depends on a wide range of factors, including getting incentives right for those affected by the consolidation. External stakeholders often view a consolidation as working against their own interests. For example, agency clients and customers may have concerns about potential reduction in service or access to agency officials. Moreover, stakeholders frequently raise valid concerns on the basis of their familiarity with an agency’s operations, and the concerns need to be addressed openly and objectively. Failure to effectively engage with external stakeholders and understand and address their views can undermine or derail the initiative. We have found that, as a result, it is critical that agencies identify who the relevant external stakeholders are and develop a two- way communication strategy that both addresses their concerns and conveys the rationale for and overarching benefits associated with a consolidation initiative.

According to Standards for Internal Control in the Federal Government, documenting management oversight of processes intended to improve the effectiveness and efficiency of operations provides reasonable assurance that the organization is addressing risks and being good stewards of government resources and achieving results. DHS officials acknowledged that without source documentation underlying the analysis behind the consolidation proposal, the full extent to which the reorganization options were considered is not discernable. By documenting its decision-making process, DHS would provide a means to retain organizational knowledge and mitigate the risk of having that knowledge limited to a few personnel, as well as communicate that knowledge as needed to affected parties. Additionally, attention to the key questions identified from our analysis of previous organizational consolidations would help provide DHS, Congress, and other stakeholders with assurance that important aspects of effective organizational change, including a consideration of the plan’s benefits and limitations, are addressed as part of the agency’s CBRNE reorganization decision-making process. Not fully considering these factors could make the agency’s decision to consolidate vulnerable to risk of failure, increased costs, or stakeholder skepticism.

Key Mergers and Organizational Transformation Practices Could Benefit DHS Moving Forward If Congress Approves the CBRNE Consolidation

Should Congress approve its plan to consolidate, DHS could benefit from incorporating change management approaches such as the key practices and implementation steps derived from organizational transformations undertaken by large private and public sector organizations identified in our previous work. Doing so would help ensure that DHS’s consolidation initiative is results oriented, customer focused, and collaborative in nature. The Consolidated Appropriations Act, 2016, provides that none of the funds appropriated may be used to establish an Office of CBRNE Defense until Congress has authorized such establishment and, as of July 2016, Congress had not approved the proposed consolidation. As a result of this restriction, DHS officials told us they have taken few concrete steps to plan for or move forward with the consolidation. However, if Congress passes authorizing legislation, DHS intends to permanently establish the new CBRNE Office, transfer all requisite personnel, and announce a new leader for the office, according to DHS Office of Policy officials.

As DHS was formed, we reported in July 2003 on key practices and implementation steps for mergers and organizational transformations. The factors listed in Table 2 were built on the lessons learned from the experiences of large private and public sector organizations.

The practices outlined in our July 2003 report are intended to help agencies transform their cultures so that the federal government has the capacity to deliver its promises, meet current and emerging needs, maximize its performance, and ensure accountability. DHS has not evaluated each of these practices. According to DHS officials, the agency is awaiting congressional approval of the proposed consolidation before developing implementation steps. However, should DHS receive this approval to reorganize its CBRNE functions, consulting each of these practices would ensure that lessons learned from other organizations are considered. According to our prior work on organizational change, implementing large-scale change management initiatives, such as mergers and organizational transformations, are not simple endeavors and require the concentrated efforts of both leadership and employees to realize intended synergies and to accomplish new organizational goals. In addition, the practices will be helpful in a consolidated CBRNE environment. For example, overall employee morale differs among the components to be consolidated, as demonstrated by the difference in the 2015 employee satisfaction and commitment scores of DNDO and S&T, making employee involvement to gain their ownership for the transformation a key step to consider. Also, given the range of activities conducted by the consolidated entities, establishing a coherent mission and integrated strategic goals to guide the transformation will be important.

Given the critical nature of DHS’s CBRNE mission, considering key factors from our previous work would help inform a consolidation effort should Congress approve it. The lessons learned by other organizations involved in substantial transformations could provide key insights for agency officials if they implement reorganization and attention to the factors we identified would improve the chances of a successful CBRNE consolidation.

Conclusions

Preventing a terrorist attack in the United States remains the foundation of homeland security, especially when CBRNE threats continue to be enduring areas of concern. DHS’s CBRNE consolidation proposal is intended to centralize CBRNE functions within DHS headquarters while also becoming a focal point for CBRNE issues. However, limited information and analysis related to assessing the benefits and limitations of its consolidation plan prevent DHS from fully demonstrating how its consolidation will lead to an integrated, high-performance organization. Additionally, should Congress approve CBRNE consolidation at DHS, the department could improve the likelihood of a successful consolidation effort if lessons identified in our previous work are considered.

Recommendations for Executive Action

To better provide Congress and affected stakeholders with assurance that important aspects of effective organizational change are addressed as part of the agency’s CBRNE reorganization decision-making process, we recommend that the Secretary of Homeland Security direct the Assistant Secretary for the Office of Policy to complete, document, and make available analyses of key questions related to its consolidation proposal, including: what problems, if any, consolidation may create; a comparison of the benefits and costs the consolidation may entail; a broader range of external stakeholder input including a discussion of how it was obtained and considered.

If DHS’s proposed CBRNE program consolidation is approved by Congress, we recommend that the Secretary of Homeland Security direct the Assistant Secretary for the Office of Policy to use, where appropriate, the key mergers and organizational transformation practices identified in our previous work to help ensure that a CBRNE consolidated office benefits from lessons learned from other organizational transformations.

Agency Comments and Our Evaluation

We provided a draft of this report to DHS for comment. DHS provided technical comments, which we incorporated as appropriate. On July 14, 2016, DHS also provided written comments, reproduced in full in appendix I. DHS concurred with one of our two recommendations, and described actions planned to address it, but did not concur with the other.

DHS did not concur with our first recommendation that the Secretary of Homeland Security direct the Assistant Secretary for the Office of Policy to complete, document, and make available analyses of key questions related to its consolidation proposal, including: what problems, if any, consolidation may create; a comparison of the benefits and costs the consolidation may entail; a broader range of external stakeholder input including a discussion of how it was obtained and considered.

In its comments, DHS stated that completing a study to answer the questions raised in our report and inform a decision that has already been made is redundant. According to DHS, our recommendation does not acknowledge the extent to which these questions have been discussed both internally within DHS and externally with Congress. DHS indicated that it considered the cost and benefits of reorganization within the conduct of the 2013 study, the follow-on work in 2014, and senior leadership meetings as part of the decision-making process. According to DHS, the department reviewed its CBRNE programs and functions by analyzing organizational models and identified several alignment options, each with its own cost and benefits. As we stated in this report, committee report language directed DHS to include an assessment of whether consolidation could produce cost savings, and as of July 2016, DHS had not documented a comparison of benefits and costs for its consolidation plan. DHS officials told us that in 2013 they developed a rough cost estimate for the consolidation option, but provided no documentation or analysis supporting the estimate. Further, according to the CBRNE consolidation proposal DHS submitted to Congress in June 2015, additional analysis is required to determine if budgetary efficiencies can be gained by the recommended consolidation option. Based on our review of available CBRNE consolidation documentation and our prior work on evaluating consolidation proposals, we continue to believe that considering benefits and costs as part of the decision-making process for potential organizational consolidation is important as it would provide Congress and the executive branch the information needed to help effectively evaluate consolidation proposals.

Also in its comments, DHS stated that both monetary and non-monetary costs associated with its proposed reorganization were considered. According to DHS, monetary costs of the proposed consolidation were within the current and planned budget of the affected organizations. DHS also indicated that non-monetary costs such as impact on appropriations and staff morale would likely result in increased benefits to operational effectiveness and efficiency and morale in the new office. Our report acknowledges that DHS considered potential up-front costs associated with a CBRNE consolidation; however, DHS did not document these costs or how they were considered during the reorganization decision- making process. We previously reported in May 2012 that consolidation initiatives often have up-front costs, and agencies must pay them before they can realize any intended gains or savings. For example, agencies may need to pay for equipment and furniture moves or fund employee transfers and buyouts. Based on our review of DHS’s proposal, the department did not fully consider similar potential expenses or up-front costs in developing its proposal. Our prior work has shown that a lack of up-front funding can prevent a potentially beneficial initiative from getting off the ground or derail an initiative already underway. Until DHS completes this analysis and documents its findings, we continue to believe that these potential challenges have yet to be mitigated.

DHS commented that it consulted Congress on its proposed consolidation. Specifically, DHS commented that it provided briefings to the appropriate authorizing and appropriations committees on numerous occasions. Although the Department of Homeland Security CBRNE Defense Act of 2015 (H.R. 3875), which has passed the House, and the President’s budget submission for fiscal year 2017 include DHS’s proposed CBRNE reorganization, authorizing legislation has not been enacted. Implementing our recommendation to complete, document, and make available analyses of key questions related to DHS’s proposal would provide additional information to help decision-makers understand the basis and implications of the proposal. However, according to DHS, the passage of the Consolidated Appropriations Act, 2016 (P.L. 114-113) is a complicating factor. Specifically, DHS stated that the department is concerned that conducting any reorganization-related activities, including further study on the matter, may undermine the department’s original reorganization recommendation with Congress and disrupt ongoing authorizing legislation deliberations. Section 521 of the Consolidated Appropriations Act, 2016, provides that none of the funds appropriated may be used to “establish” an Office of CBRNE Defense until Congress has authorized such establishment. Although DHS cannot use appropriated funds to establish a CBRNE office without authorization, we believe that completing, documenting, and making available the analysis supporting the reorganization recommendation will not disrupt, but rather will assist in ongoing legislative deliberations by providing additional information to decision-makers.

Also in its comments, DHS remarked that our report did not mention the department’s headquarters realignment that occurred between FY 2014 and FY 2015 as part of Secretary of Homeland Security Jeh Johnson’s Unity of Effort Initiative. According to DHS, we did not acknowledge how the proposed CBRNE consolidation would contribute to principal Unity of Effort objectives such as integrating broad and complete DHS mission spaces and empowering DHS components to effectively execute their missions. However, while the department’s Unity of Effort initiative was not the focus of our review, our report acknowledges that according to DHS officials, the CBRNE alignment options from the department’s 2013 report were updated in 2015 based on the Secretary’s Unity of Effort Initiative, to include transferring CBRNE threat and risk assessment functions from the DHS Science and Technology Directorate to the proposed CBRNE Office, as well as including the DHS Office for Bombing Prevention from the National Protection and Programs Directorate. Our report also recognizes that DHS’s CBRNE consolidation proposal is intended to centralize CBRNE functions within DHS headquarters while also becoming a focal point for CBRNE issues. We believe that the additional context provided by DHS, more closely tying its CBRNE consolidation to the department’s larger headquarters realignment efforts, further underscores the importance of our findings. As noted in our report, limited information and analysis related to assessing the benefits and limitations of its consolidation plan prevent DHS from fully demonstrating how its proposal will lead to an integrated, high-performance organization.

DHS concurred with our second recommendation related to using, where appropriate, the key mergers and organizational transformation practices identified in our previous work to help ensure that a CBRNE consolidated office benefits from lessons learned from other organizational transformations. DHS stated that upon receiving congressional approval for its CBRNE consolidation plan, it will use GAO’s report on evaluating consolidation proposals as well as other resources to develop a detailed implementation plan as appropriate. These actions, if fully implemented, should address the intent of the recommendation.

As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the Secretary of Homeland Security and selected congressional committees. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov.

Should you or your staff have any questions, please contact me at 404- 679-1875 or curriec@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix II.

Appendix I: Comments from the Department of Homeland Security

Appendix II: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the individual named above, Ben Atwater (Assistant Director) and Landis Lindsey (Analyst-in-Charge) managed this audit engagement. Chuck Bausell, Eric Hauswirth, Hayden Huang, Tracey King, Tovah Rom, Sarah Veale and Josiah Williams made significant contributions to this report.