Interagency Contracting: Improved Guidance, Planning, and Oversight Would Enable the Department of Homeland Security to Address Risks
Released: 2006-09-27T00:00:00

Letter

Background

In recent years, federal agencies have been making greater use of interagency contracting—a process by which agencies can use another agency’s contracting services or existing contracts already awarded by other agencies to procure many goods and services. An agency can enter into an interagency agreement with a servicing agency and transfer funds to the servicing agency to conduct the acquisition on its behalf, or an agency can order directly from a servicing agency’s contract, such as the GSA schedules or GWACs. When funds are transferred to another agency, the contracting service can be provided through entrepreneurial, fee-for- service organizations, which are government-run but operate like businesses. Interagency contracts are designed to leverage the government’s aggregate buying power and simplify procurement of commonly used goods and services. In this way, the contracts offer the benefits of improved efficiency and timeliness in the procurement process.

Determining the value of a particular contracting method includes considering benefits such as timeliness and efficiency as well as cost-- including price and fees. Although interagency contracts can provide the advantages of timeliness and efficiency, use of these types of vehicles can also pose risks if they are not properly managed. GAO designated management of interagency contracting a governmentwide high-risk area in 2005. A number of factors make these types of contracts high risk, including their rapid growth in popularity along with their administration and use by some agencies that have limited expertise with this contracting method, and their contribution to a much more complex procurement environment in which accountability has not always been clearly established. In an interagency contracting arrangement, both the agency that holds, and the agency that makes purchases against, the contract share responsibility for properly managing the use of the contract. However, these shared responsibilities often have not been well-defined. As a result, our work and that of some inspectors general has found cases in which interagency contracting has not been well-managed to ensure that the government was getting good value. For example, in our review of the Department of Defense’s (DOD) use of two franchise funds, we found that the organizations providing these services did not always obtain the full benefits of competitive procedures, did not otherwise ensure fair and reasonable prices, and may have missed opportunities to achieve savings on millions of dollars in purchases. In another review, we found task orders placed by DOD on a GSA schedule contract did not satisfy legal requirements for competition because the work was not within the scope of the underlying contract. Recent inspector general reviews have found similar cases. For example, the Inspector General for the Department of the Interior found that task orders for interrogators and other intelligence services in Iraq were improperly awarded under a GSA schedule contract for information technology services.

The Federal Acquisition Regulation (FAR) is the primary regulation governing how most agencies acquire supplies and services with appropriated funds. The regulation provides general guidance for interagency agreements that fall under the authority of the Economy Act and for the GSA schedules and GWACs. The FAR precludes agency acquisition regulations that unnecessarily repeat, paraphrase, or otherwise restate the FAR, limits agency acquisition regulations to those necessary to implement FAR policies and procedures within an agency, and provides for coordination, simplicity, and uniformity in the federal acquisition process. There are several types of interagency contracting. For more information on those included in our review, see appendix II.

DHS spends significant and increasing amounts through interagency contracting—a total of $6.5 billion in fiscal year 2005, including $5 billion through interagency agreements and about $1.5 billion by placing orders off other agencies’ contracts (see fig. 1). DHS’ total spending on interagency contracting increased by about 73 percent in just 1 year.

DHS was established as of March 1, 2003, by merging the functions of 23 agencies and organizations that specialize in one or more aspects of homeland security. OCPO is responsible for creating departmentwide policies and processes to achieve integration and to manage and oversee the acquisition function but does not have enforcement authority to ensure that initiatives are carried out.

There are seven acquisition offices within DHS that pre-date the formation of DHS and continue to operate at the components. OPO was formed with the new department to serve the newly established entities and those components that did not have a separate procurement operation. Of those that pre-date DHS, the Coast Guard and CBP provide different examples of the types of components that formed DHS. The Coast Guard, previously under the Department of Transportation, already had an extensive procurement operation, whereas CBP was created by combining the United States Customs Service, formerly part of the Department of the Treasury, Border Patrol and the inspectional parts of the Immigration and Naturalization Service, and portions of the Department of Agriculture’s Animal Plant and Health Inspection Service. Thus, CBP has been faced with the added challenge of creating a procurement organization to meet its new mission. Our prior work has found that an effective acquisition organization has in place knowledgeable personnel who work together to meet cost, quality, and timeliness goals while adhering to guidelines and standards for federal acquisition.

Enhanced Guidance and Expertise Could Help DHS Address Interagency Contracting Risks

While DHS has developed guidance on the use of interagency agreements—the largest category of interagency contracting at DHS, which amounted to $5 billion in fiscal year 2005—it does not have specific guidance for other types of interagency contracting, including GSA schedules and GWACs, which accounted for almost $1.5 billion in fiscal year 2005. Moreover, we found that some DHS users may have lacked expertise in the proper use of interagency contracts. Although some DHS acquisition officials believe the FAR provides adequate guidance on the use of interagency contracts, such as the GSA schedules, our prior work and inspector general reviews have found numerous cases in which these contracting methods have not been properly used. For example, users have requested work that was not within the scope of the contract and administrators have not ensured fair and reasonable prices. Recognizing this concern, other large agencies, such as DOD and the Department of Energy, have identified the need to carefully manage the use of these contracts and have issued supplemental guidance and emphasized training programs to mitigate these risks.

DHS Guidance Could be Expanded to All Types of Interagency Contracting

DHS departmentwide acquisition guidance covers interagency agreements but not other types of interagency contracting. In December 2003, DHS issued the Homeland Security Acquisition Regulation and the Homeland Security Acquisition Manual to provide departmentwide acquisition guidance. In addition, DHS issued a departmentwide directive on how to use interagency agreements by which funds are transferred to other agencies to award and administer contracts or to provide contracting services on behalf of DHS. However, as we reported in March 2005, the directive was not being followed for purchases made through these agreements. For example, there was little indication that required analyses of alternatives were performed or that required oversight was in place. Although DHS began revising the directive in fiscal year 2004, the revisions have yet to be issued. According to OCPO officials, its limited policy and oversight resources provide assistance to the components as needed, taking time away from acquisition policy efforts, such as developing guidance. For example, OCPO officials provided contracting assistance to the Federal Emergency Management Agency in the response to Hurricanes Katrina and Rita.

To supplement departmentwide DHS guidance on interagency agreements, each of the components we reviewed has issued some implementing guidance. OPO issued guidance addressing the appropriate use of interagency agreements that requires program officials and contracting officers to research other available contract vehicles. In contrast, CBP guidance addresses the goals of an analysis of alternatives, but emphasizes the process and the documentation necessary to execute the interagency agreement. The Coast Guard’s supplemental guidance focuses mainly on the ordering and billing procedures for interagency agreements. However, none of the components we reviewed had implementing guidance for other types of interagency contracts. While DHS acquisition officials acknowledge the need to manage the risks of interagency agreements, some do not see other types of interagency contracting, such as the GSA schedules and GWACs, as needing the same type of attention and believe sufficient guidance is available in the FAR. In fiscal year 2005, the three components we reviewed spent a total of $832 million through GSA schedules, GWACs, and other interagency contracts (see table 1). This is a 53 percent increase over the prior year.

Additional Training Could Help Reduce Management Risks

We have previously reported that use of interagency contracts demands a higher degree of business acumen and flexibility on the part of users and administrators than in the past, and acquisition officials need sufficient training and expertise to ensure the proper use of these types of contracts in an increasingly complex procurement environment. During our review, we identified several examples that showed that DHS may not have obtained a good value for millions of dollars in spending and indicated a need for improved training and expertise (see table 2).

Several contracting officials stated that additional training is needed in the use of interagency contracts but that there was not much training available. In addition, other contracting officials told us that they were not aware of the range of available alternatives for interagency contracting.

Other Large Agencies Have Developed Guidance and Emphasized Training for all Types of Interagency Contracting

To ensure the proper use of all types of interagency contracts, other large procuring agencies, including DOD and the Department of Energy, have issued guidance to supplement the FAR and have emphasized specialized training. DOD is the largest user of other agencies’ contracts and the Department of Energy reported that it spent about $1.7 billion on other agencies’ contracts in fiscal year 2005—a substantial amount, but less than DHS. For example, DOD issued special guidance to ensure that proper procedures and management practices are used when using other agencies’ contracts including GSA schedules. The guidance requires DOD acquisition personnel to evaluate, using specific criteria, whether using a non-DOD contract for a particular purchase is in the best interest of the department. The criteria include the contract’s ability to satisfy the requirements in a timely manner and provide good value. DOD’s guidance also emphasizes using market research to help identify the best acquisition approach to meet the requirement and states that the contracting officer should document this research. The Department of Energy also has issued guidance addressing the proper use of GSA schedules and GWACs. This guidance emphasizes that these contracts are not to be used to circumvent agency regulations and that the contracting officer should ensure that the original order and all future orders are within the scope of the contract. In the case of the GSA schedules, the contracting officer should seek and document advice from GSA’s contracting officer on the proper use of the schedules whenever an issue is in doubt.

In 2004, GSA took a step toward improving the management of GSA contracts and services by implementing the “Get It Right” program in part to secure the best value for federal agencies, improve education and training of the federal acquisition workforce on the proper use of GSA contracts and services, and ensure compliance with federal acquisition policies, regulations, and procedures. As part of the program, DOD and GSA have partnered to offer updated training on the proper use of GSA schedules. In addition, the Department of Energy has instituted training to emphasize the proper use and the need for planning when using the GSA schedules and GWACs.

DHS Did Not Always Assess Total Value When Choosing Interagency Contracts

Interagency contracts are intended to offer a simplified procurement process whereby users commonly rely on planning that has already been conducted by the agency that established the contract to ensure that the prices are competitive. However, our recent work, as well as the work of others, has found that not all interagency contracts provide good value when considering both timeliness and cost. This suggests the need for evaluating the selection of an interagency contract. According to DHS contracting officials the benefits of speed and convenience—not total value including cost—have often driven decisions to choose interagency contracting vehicles. As of July 2005, DHS has required an analysis of alternatives for all purchases. Of the 17 cases in our review, this analysis was only required for the four interagency agreements. None of these interagency agreements indicated that the required analysis was conducted. Without an evaluation of interagency contracting alternatives, DHS users cannot be sure they are obtaining a good value.

Speed and Convenience, Rather Than Planning and Analysis, Often Determined Contract Selection

A sense of urgency has prevailed in DHS’ acquisition decision-making process, according to officials from the Office of Inspector General. For example, one official said that expediting program schedules and contract awards limits time available for adequate procurement planning, which can lead to higher costs, schedule delays, and systems that do not meet mission objectives. Eight of the 16 contracting officers we interviewed at OPO, CBP, and Coast Guard told us that using interagency contracts was a quick and convenient way to acquire needed products and services. A few DHS contracting officers felt that interagency contracts—in particular, GSA schedules—were the only viable alternatives given time constraints. In some cases, officials told us that it could take 4 to 6 months to establish and obtain goods and services through an in-house contract. In other cases, officials stated that purchase requests were received too close to the end of the fiscal year to use anything other than an interagency contract. None of the contracting officials said they chose to use interagency contracts because they also provided good value to DHS in terms of total cost.

Interagency contracts are designed to be convenient to use and require less planning than entering into a full and open competition for a new contract, and users commonly rely on planning that has already been conducted by the agency that established the contract. However, we found that GSA schedule prices may not always be the most competitive, and agencies do not always obtain the required competition when using the schedules, thus, there is no assurance that these contracts are providing good value. In another review, we found that fees charged by the agency that provides the contracting service may not make these contracts cost- effective in some cases. Purchasing agencies also sometimes pay fee on top of fee for the use of another agency’s contract because servicing agencies may be using other agencies’ contracts—including GSA schedules—to make purchases. Fees charged for the use of GWACs also range between 0.65 and 5 percent. Given these concerns, evaluating the selection of an interagency contract is a sound management practice used by other large agencies.

Pursuant to DHS acquisition policy, purchases made through interagency agreements require an analysis of alternatives to determine that the approach is in the government’s best interest; however, in the four cases we reviewed that fell under this requirement, there was no indication that this analysis was performed. In one case, CBP used FedSim, one of GSA’s contracting service providers, to place an order for $9 million for information technology support for systems security. In another case, CBP transferred $5 million to a franchise fund for the purchase of license plate readers. In the two remaining cases, OPO used FedSim to place orders totaling about $45 million against one contract to provide information technology support for the Homeland Secure Data Network. In these examples, there was little evidence that DHS users determined whether this was the best method for acquiring the needed services. These findings are consistent with our March 2005 review, in which we did not find an analysis of alternatives in 94 percent of the cases where it was required. Recent internal reviews at OPO and CBP cited similar findings in which evidence that a determination of findings or an analysis of alternatives was conducted was missing.

In our review of 17 cases, we also found several examples where contracting officers placed orders to fulfill what were perceived to be critical needs, for convenience without comparing alternatives, or to spend funds at the end of the fiscal year without obtaining competing proposals. While an analysis of alternatives was not required in most of these cases, performing such an analysis could have helped DHS users to address some of the known concerns about these types of contracts to ensure that they obtained good value for the department (see table 3).

Recent Planning Requirement Does Not Include Evaluation Criteria

As of July 2005 DHS has required an analysis of alternatives for all acquisitions, including all types of interagency contracts. DHS policy now states that all acquisition plans must include an analysis of alternatives including a discussion of why the acquisition process was chosen and the processes considered. The guidance states that the plan must contain information about the type of contract selected. However, the guidance does not include factors to consider or specific criteria for making a good choice among alternative contracting options. We have found that some agencies have established factors to consider in making this decision. For example, DOD and the Department of Energy have established factors that incorporate considerations of value, policy and regulatory requirements, customer needs, and administrative responsibilities. Following are some of the factors these agencies use: Value: cost (including applicable fees or service charges); whether using an interagency contract is in the best interest of the department.

Policy and regulatory requirements: departmental funding restrictions; departmental policies on small business, performance- based contracting, and competition.

Customer needs: schedule; scope of work; unique terms, conditions and requirements.

Contract administration: including oversight, monitoring, and reporting requirements.

DHS Oversight Program Does Not Assess Outcomes of Interagency Contracting

Although DHS’ spending through interagency contracting totals billions of dollars annually and increased by 73 percent in the past year, the department does not systematically monitor its use of these contracts to assess whether this method for acquiring goods and services is being properly managed and provides good outcomes for the department. While OCPO has established a framework for an acquisition oversight program, the program is not designed to assess the outcomes of different contracting methods including interagency contracting. According to officials, DHS’ acquisition oversight program has been hindered by limited resources and authority.

DHS Does Not Monitor or Assess Use of Interagency Contracting

DHS does not systematically monitor spending on its interagency contracts, which totaled $6.5 billion in fiscal year 2005—37 percent of DHS’ procurement spending for that year. This type of monitoring could provide DHS with useful information to assess its use of this contracting method. For example, as part of its strategic sourcing initiative, DHS officials said they reviewed the component’s use of information technology and telecommunications contracts and determined that the department could achieve savings of $22.5 to $45 million in fees and reduced prices by establishing its own departmentwide contracts. However, DHS does not have available information to make comparable assessments for interagency contracts. For example, DHS officials were not able to readily provide data on the amounts spent through different types of interagency contracts. To respond to our request for information, OCPO prepared a special report on the use of GSA schedules and GWACs. For information on interagency agreements, OCPO had to request data from components. Ultimately, however, we had to compile a summary and clarify information obtained from components.

DHS also does not collect data on the amount of service fees paid to other agencies for the use of contracting services or vehicles regarding interagency contracting, such as the amount of service fees paid to other agencies, and the components, which pay the fees, also do not collect this data. In prior work in this area, we have found that these fees can range from less than 1 percent to 8 percent. In March 2005, we found that OPO, the largest user of interagency contracts among the components, alone paid $12.9 million in service fees in fiscal year 2004. Given that the volume of DHS’ interagency contracting has increased by $2.7 billion, or about 73 percent, since fiscal year 2004, it is likely that the fees paid also have increased substantially. This lack of data is not unique to DHS. Although the need to collect and track data on interagency contracting transactions has become increasingly important governmentwide, there is no governmentwide system to collect this data. In fact, the Office of Management and Budget has an effort underway to collect basic information on interagency contracting from all federal agencies.

While each of the components we visited has established its own internal reviews to evaluate contracting practices, including the use of interagency contracts, these reviews are compliance-based and are not designed to evaluate the outcomes of interagency contracting. For example, OPO, which has taken a comprehensive approach, established procedures for reviewing and approving procurement actions. The review includes an assessment of the documentation for compliance with acquisition regulations or policies; soundness of the acquisition strategy; use of business judgment; and completeness, consistency, and clarity. OPO also had a study completed to determine whether its contracts, task orders, interagency agreements, and other transactions were awarded and administered in compliance with procurement laws, regulations, and internal DHS and OPO operating policies and procedures. While the review found that much improvement was needed to comply with policies and procedures, it was not designed to address areas such as timeliness, total cost including price and fees paid, and customer service to determine whether a particular contract method resulted in the best outcome.

DHS Has Begun to Develop an Oversight Program, but Is Facing Challenges

In December 2005, OCPO issued a policy that provides a framework for a departmentwide acquisition oversight program. However, the framework does not evaluate the outcomes of different contracting methods, including interagency contracting, to determine whether the department obtained good value. Additionally, the Chief Procurement Officer lacks the authority needed to ensure the department’s components comply with its procurement policies and procedures that would help to establish an integrated acquisition function.

The framework includes four key reviews (see table 4). According to DHS officials, the acquisition planning review was operational as of August 2006, and an on-site review was ongoing at the Federal Emergency Management Agency. DHS plans to implement the full program in fiscal year 2007.

According to OCPO officials, while DHS expects to track interagency contracting through this framework, it will not gather data to determine whether these contracts were used effectively. For example, through the operational status reviews, DHS plans to track the number and dollar value of orders placed using interagency agreements and GSA schedules and GWACs. However, these reviews will not collect data on cost including the price of goods and services and fees paid, timeliness, or customer service, that would help them to evaluate whether specific interagency contracts were a good value.

In addition, the Chief Procurement Officer, who is held accountable for departmentwide management and oversight of the acquisition function, lacks the authority and has limited resources to ensure compliance with acquisition policies and processes. As of August 2006, according to OCPO officials, only five staff were assigned to departmentwide oversight responsibilities for $17.5 billion in acquisitions. According to OCPO officials, their small staff faces the competing demands of providing acquisition support for urgent needs at the component level. As a result, they have focused their efforts on procurement execution rather than oversight. Officials also noted that limited resources have delayed the oversight program’s implementation.

DHS’ acquisition function was structured to rely on cooperation and collaboration among DHS components to accomplish the department’s goals. While this structure was intended to make efficient use of resources departmentwide, it has limited the Chief Procurement Officer’s ability to effectively oversee the department’s acquisitions, manage risks, and has ultimately wasted time and other resources. In our prior work, we have found that in a highly functioning acquisition organization, the chief procurement officer is in a position to oversee compliance with acquisition policies and processes by implementing strong oversight mechanisms. In March 2005, we recommended that OCPO be provided sufficient enforcement authority and resources to provide effective oversight of DHS’ acquisition policies and procedures. In a 2005 review of the department’s organization, the Secretary focused on mission initiatives and, as of August 2006, has not changed the structure of the operational functions to provide additional authority to the Chief Procurement Officer.

Conclusions

One of the largest procuring agencies in the federal government, DHS relies on contracts for products and services worth several billions of dollars to meet its complex homeland security mission. Effective acquisition management must include sound policies and practices for managing the risks of large and rapidly increasing use of other agencies’ contracts. While the use of these types of contracts provides speed and convenience in the procurement process, the agencies that manage the contracts and DHS users have not always adhered to sound contracting practices. Guidance and training that could help DHS to address risks is not in place; planning was not always conducted; and adequate monitoring and oversight were not performed. While DHS has developed a framework for an oversight program, until such oversight is in place, DHS cannot be sure that taxpayer’s dollars are being spent wisely and purchases are made in the best interest of the department. While the challenges to effective management of an acquisition function in any organization with a far-reaching mission are substantial, these challenges are further complicated at DHS by an organizational structure in which the Chief Procurement Officer lacks direct authority over the components. Without such authority, the department cannot be sure that necessary steps to implement improvements to its acquisition function will be taken.

Recommendations for Executive Action

To improve the department’s ability to manage the risks of interagency contracting, we recommend that the Secretary of Homeland Security consider the adequacy of the Office of the Chief Procurement Officer’s resources and implement the following three actions: develop consistent, comprehensive guidance, and related training to reinforce the proper use of all types of interagency contracts to be followed by all components; establish, as part of the department’s planning requirement for an analysis of alternatives, criteria to consider in making the decision to use an interagency contract; and implement oversight procedures to evaluate the outcomes of using interagency contracts.

Matter for Congressional Consideration

Because the Secretary has not taken action to ensure departmentwide acquisition oversight, Congress should require the Secretary to report on efforts to provide the Chief Procurement Officer with sufficient authority over procurement activities at all components.

Agency Comments and Our Evaluation

We provided a draft of this report to DHS for review and comment. In written comments, DHS concurred with all of our recommendations and provided information on what action would be taken to address them. The department’s comments are reprinted in appendix III.

Regarding the recommendation for guidance and training to reinforce the proper use of all interagency contracts, DHS stated that it will issue a revised management directive in the near future. This directive will require the reporting of data on interagency agreements. DHS also will issue additional direction to the components on reporting the use of other types of interagency contracts. With regard to training, the OCPO will introduce specific training with respect to all types of interagency contracting for all contracting personnel during fiscal year 2007. With regard to establishing criteria to consider in making the decision to use an interagency contract, DHS will revise the acquisition planning guide to address this recommendation. With regard to implementing oversight procedures to evaluate the outcomes of using interagency contracts, DHS plans to incorporate oversight procedures assessing the proper use of interagency contracts and agreements into its acquisition oversight program.

Concerning the overall use of interagency contracts, the department’s comments stated that it is the goal of the OCPO to reduce the number and value of contracts awarded through the use of interagency contracts or agreements. This will be accomplished in part through the use of new departmentwide contracts for information technology equipment and services. We believe this is a positive step toward improving DHS’ contract management.

In responding to the Matter for Congressional Consideration that the Secretary report on efforts to provide the Chief Procurement Officer with sufficient authority over procurement activities, DHS noted some steps that the Secretary has taken to improve acquisition oversight. revised the investment review process, placing the Chief Procurement Officer in a key position to review and provide oversight of the Department’s most critical programs; supported an increase of 25 OCPO positions to improve acquisition and directed the Chief Procurement Officer to work with all component heads to report on departmentwide progress in key acquisition areas.

While these actions should help, they do not provide the Chief Procurement Officer with sufficient authority to ensure effective oversight of DHS’ acquisition policies and procedures, and we continue to believe that the Congress should require the Secretary to report on efforts to address this lack of authority.

We are sending copies of this report to the Secretary of the Department of Homeland Security, and to other interested agencies and congressional committees. We will also make copies available to others upon request. In addition, this report will be available at no charge on the GAO Web site at http://www.gao.gov.

If you have any questions about this report or need additional information, please contact me at (202) 512-4841 (huttonj@gao.gov). Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Other staff making key contributions to this report were Amelia Shachoy, Assistant Director; Greg Campbell; Christopher Langford; Eric Mader; Bill McPhail; Russ Reiter; Karen Sloan; and Karen Thornton.

Appendix I: Scope and Methodology

To determine the level of interagency contracting at the Department of Homeland Security (DHS), we requested data from each component on fiscal year 2005 purchases made through all types of interagency contracts. We compiled a summary of purchases made through interagency agreements, the General Service Administration’s schedules and governmentwide acquisition contracts (GWAC) from the individual reports we received from each component. We found that the Office of Procurement Operations (OPO), Customs and Border Protection (CBP), and Coast Guard were the largest users of interagency contracts in fiscal year 2005. Based on a review of this data, we selected 17 cases, totaling $245 million. Interagency contracting actions for these components represented a sample of GSA schedule, GWAC, and interagency transactions made through fee-for-service contracting providers. See table 5. The 17 cases were selected to represent procurement actions of $5 million or more at three DHS components. Because our findings included similar problems across these activities, we believe they represent common problems in DHS’ procurement process. To assess the reliability of this data, we compared the data obtained from DHS to the data maintained in the Federal Procurement Data System-Next Generation (FPDS-NG). Based upon the comparison, we determined that the data were sufficiently reliable for our purposes.

To assess the extent to which DHS manages the risks of interagency contracting, we reviewed guidance and oversight at the departmental level and at the three components in our sample—OPO, CBP and Coast Guard, and we interviewed officials in the Office of the Chief Procurement Officer (OCPO) and senior officials of the components under review. To determine how other large agencies address the management risks of interagency contracting, we reviewed relevant guidance and training at the Departments of Defense and Energy. We also reviewed relevant GAO and Inspector General reports.

To assess DHS planning for the use of interagency contracts, we conducted fieldwork at CBP’s National Acquisition Center in Indianapolis, Indiana; National Data Center in Springfield, Virginia; and at the Coast Guard’s procurement office in Norfolk, Virginia, and reviewed contract files and completed a data collection instrument for each of the 17 cases we selected. We also interviewed the contracting officer, program manager and Contracting Officer’s Technical Representative to discuss each case. In conducting our review, we identified the reasons for using interagency contracts and the reasons for choosing a particular interagency contract.

We performed our review between February and August 2006 in accordance with generally accepted government auditing standards.

Appendix II: Department of Homeland Security Interagency Contracting

Appendix III: Comments from the Department of Homeland Security