DHS acquisitions support a wide range of missions and investments including ships and aircraft, border surveillance and screening equipment, nuclear detection equipment, and systems to track the department’s financial and human resources. In support of these investments, DHS, in 2003, established an investment review process to help reduce risk and increase the chances for successful acquisition outcomes by providing departmental oversight of major investments throughout their life cycles and to help ensure that funds allocated for investments through the budget process are being spent wisely, efficiently, and effectively. Our work over the past several years has consistently pointed to the challenges DHS has faced in effectively managing and overseeing its acquisition of programs and technologies. In November 2008, we reported that DHS had not effectively implemented its investment review process, and as a result, the department had not provided the oversight needed to identify and address cost, schedule, and performance problems for its major acquisitions. Specifically, we reported that of the 48 major investments reviewed requiring milestone or annual reviews, 45 were not reviewed in accordance with the departments’ investment review policy, and 18 were not reviewed at all. Four of these investments had transitioned into a late acquisition phase—production and deployment—without any required reviews. We recommended and DHS concurred that DHS identify and align sufficient management resources to implement oversight reviews in a timely manner throughout the investment life cycle. In June 2010, we reported that over half of the 15 DHS programs we reviewed awarded contracts to initiate acquisition activities without component or department approval of documents essential to planning acquisitions, setting operational requirements, and establishing acquisition program baselines. Our work noted that without the development, review, and approval of these key acquisition documents, agencies are at risk of having poorly defined requirements that can negatively affect program performance and contribute to increased costs. In January 2011, DHS reported that it has begun to implement an initiative to assist programs with completing departmental approval of acquisition program baselines. In our February 2011 biennial update of the status of high-risk areas needing attention by Congress and the executive branch, we continued to designate DHS’s implementation and transformation, which includes the department’s management functions, as a high-risk area. For example, because of acquisition management weaknesses, major programs, such as SBInet, have not met capability, benefit, cost, and schedule expectations. Further, DHS had not fully planned for or acquired the workforce needed to implement its acquisition oversight policies as we previously recommended. As of January 2011, DHS reported that it had increased its acquisitions management staffing and planned to hire more staff to develop cost estimates. DHS has taken several actions to address these recommendations and implement more discipline and rigor in its acquisition processes. Specifically, DHS created the Acquisition Program Management Division in 2007 to develop and maintain acquisition policies, procedures, and guidance as a part of the system acquisition process. DHS also issued an interim acquisition directive and guidebook in November 2008 for programs to use in preparing key documentation to support component and departmental making. In January 2010, DHS finalized the acquisition directive which established acquisition life-cycle phases and senior-level approval of each major acquisition program at least three times at key acquisition decision events during a program’s acquisition life-cycle. This directive established the acquisition life-cycle framework with four phases: (1) identify a capability need (need phase); (2) analyze and select the means to provide that capability (analyze/select phase); (3) obtain the capability (obtain phase); and (4) produce, deploy, and support the capability (produce/deploy/support phase). Each acquisition phase culminates in a presentation to the Acquisition Review Board (ARB), which is to review each major acquisition (that is, those designated as level 1 or level 2 programs) at least three times at key acquisition decision events during a program’s acquisition life cycle. The acquisition decision authority—the Chief Acquisition Officer or other designated senior-level official—is to chair the ARB and decide whether the proposed acquisition meets certain requirements necessary to move on to the next phase and eventually to full production. The directive outlines the extent and scope of required program, project, and service management; level of reporting requirement; and the acquisition decision authority based on whether the acquisition is classified as level 1, 2, or 3. The acquisition decision authority for major acquisitions—level 1 and level 2—is to be at the department or component level and the acquisition decision authority for nonmajor acquisitions—level 3—is to be at the component level.An acquisition may be raised to a higher level acquisition level by the ARB. The ARB supports the acquisition decision authority in determining the appropriate direction for an acquisition at key Acquisition Decision Events. Following an ARB meeting, the Acquisition Program Management Division is to prepare an acquisition decision memorandum as the official record of the meeting to be signed by the acquisition decision authority. This memo is to describe the approval or other decisions made at the ARB and any action items to be satisfied as conditions of the decision. The ARB reviews are to provide an opportunity to determine a program’s readiness to proceed to the following life-cycle phase. However, we reported in March 2011 that the ARB had not reviewed most of DHS’s major acquisition programs by the end of fiscal year 2009 and programs that were reviewed had not consistently implemented action items identified as part of the review by established deadlines. Our prior work has shown that when these types of reviews are skipped or not fully implemented, programs move forward with little, if any, early department-level assessment of the programs’ costs and feasibility, which contributes to poor cost, schedule, and performance outcomes. As a part of its responsibilities, the Acquisition Program Management Division has identified major DHS acquisition programs, projects, or services for oversight through the ARB process. According to Acquisition Program Management Division officials, beginning in fiscal year 2009, the list was to be updated on a yearly basis through interviews with and documentation from component program offices. In May 2010, the Undersecretary for Management identified 86 programs on DHS’s major oversight list for fiscal year 2010, 62 of which TES and component officials determined required T&E oversight—that is programs that were in an acquisition phase where T&E was being planned or conducted. Several of the 62 programs consisted of multiple subprojects, such as TSA’s Passenger Screening Program. For more information on these 86 major acquisition programs, see appendix II. DHS’s 2010 acquisition directive also includes guidance for preparing documentation to support component and departmental decision making and specifies requirements for developmental and operational T&E as a part of the acquisition review process. Developmental T&E may include a variety of tests, such as system qualification testing, system acceptancetesting, and software testing. Developmental testing may be carried out by the user and may be conducted in simulated environments, such as laboratories, test facilities, or engineering centers that might or might not be representative of the complex operational environment. Operational T&E is a field test, performed under realistic conditions by actual users in order to determine the operational effectiveness and suitability of a system, and the corresponding evaluation of the data resulting from the test. To carry out its responsibilities for overseeing T&E, S&T established TES in 2006 and created the position of Director of TES in June 2007. TES’s mission is to establish and manage DHS T&E policies and procedures and to oversee and coordinate T&E resources to verify attainment of technical performance specifications and operational effectiveness and suitability. To carry out its T&E oversight, in fiscal year 2010, TES had a budget of about $23 million and as of February 2011 had a staff of 26, which includes the TES Director, 19 staff dedicated to T&E activities, and 6 dedicated to developing standards. In May 2009, DHS issued a delegation which specified the responsibilities and duties of the Director of Operational Test & Evaluation. The TES Director and Director of Operational Test and Evaluation, while distinct positions in the T&E directive, share some advisory, review, and oversight responsibilities. For example, both are responsible for advising program managers in developing T&E documentation and approving test and evaluation master plans. The TES Director is responsible for developing DHS T&E policy and the Director of Operational Test and Evaluation is to approve operational test plans and report to the ARB after assessing operational test reports. Since May 2009, the Director of Operational Test and Evaluation position has not been continuously filled according to the current TES Director. In a November 2010 memo, the Under Secretary for Science and Technology designated one person as both the director of TES and the Director of Operational Test and Evaluation until further notice. The T&E directive outlines the responsibilities of the TES Director and the Director of Operational Test and Evaluation. According to the directive, the TES Director is to establish the department’s testing and evaluation policies and processes and the Director of Operational Test and Evaluation is to administer those policies and processes. The directive also outlines TES’s responsibilities in overseeing T&E across DHS components and its role in the acquisition review process. Table 1 describes TES’s T&E responsibilities as outlined in the T&E directive for all level 1, level 2, and special oversight acquisition programs. The T&E directive requires TES to review and approve required component acquisition documentation before an ARB meets for an acquisition decision event. These documents are meant to be reviewed and, if required, approved in a sequential order associated with the acquisition phase, because these documents build upon one another. Figure 1 presents TES’s responsibilities throughout the four DHS acquisition phases as defined in the acquisition directive. To carry out these responsibilities for the 62 acquisition programs under its oversight in fiscal year 2010, TES has test area managers who assist component officials in fulfilling their T&E responsibilities and provide guidance and clarification in regard to the requirements in the T&E directive.