Summary
In fiscal year 2005, the Department of Homeland Security (DHS) obligated $1.2 billion to procure four types of professional and management support services--program management and support, engineering and technical, other professional, and other management support. While contracting for such services can help DHS meet its needs, there is risk associated with contractors closely supporting inherently governmental functions--functions that should be performed only by government employees. This report (1) describes the contracted services, (2) identifies potential risk and the extent to which DHS considered risk when deciding to contract for these services, and (3) assesses DHS's approach to managing and overseeing these services. GAO analyzed 117 judgmentally selected statements of work and 9 cases in detail for contracts awarded in fiscal year 2005 by the Coast Guard, the Office of Procurement Operations (OPO), and the Transportation Security Administration (TSA).
More than half of the 117 statements of work that GAO reviewed provided for reorganization and planning activities, policy development, and acquisition support--services that closely support the performance of inherently governmental functions. Other such services supporting a broad range of programs and operations at Coast Guard, OPO, and TSA included budget preparation, regulation development, and employee relations. Decisions to contract for professional and management support services were driven by the need for staff and expertise to get programs and operations up and running. However, for the nine cases we reviewed, program officials did not assess the risk that government decisions may be influenced by, rather than independent from, contractor judgments. These cases included services that have the potential to increase this risk. For example, contractors directly supported DHS missions and performed on an ongoing basis work comparable to that of government employees. Most of the nine contracts also lacked detail or covered a wide range of services. Conditions such as these need to be carefully monitored to ensure the government does not lose control over and accountability for mission-related decisions. DHS has not explored ways to manage the risk of these contractor services, such as through total workforce deployment across the organization. The level of oversight DHS provided did not always ensure accountability for decisions or the ability to judge whether the contractor was performing as required. Federal acquisition policy requires enhanced oversight of contracts for services that can affect government decision making, policy development, or program management. While contracting officers and program officials acknowledged their professional and management support services contracts closely supported inherently governmental functions, they did not see a need for increased oversight. Insufficient oversight increases the potential for a loss of management control and the ability to ensure intended outcomes are achieved.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director:
Team:
Phone:
John P. Hutton
Government Accountability Office: Acquisition and Sourcing Management
(202) 512-7773
Recommendations for Executive Action
Recommendation: To improve the department's ability to manage the risk of selected services that closely support inherently governmental functions as well as government control over and accountability for decisions, the Secretary of Homeland Security should establish strategic-level guidance for determining the appropriate mix of government and contractor employees to meet mission needs.
Agency Affected: Department of Homeland Security
Status: Open
Comments: DHS is conducting two initiatives that may result in guidance that addresses this recommendation. In May 2009, DHS initiated a workforce assessment to determine the appropriate mix of contractors and full-time employees. The same month, DHS announced plans to review all professional service contracts valued at $1 million or more to identify contracts for core capability functions. These efforts, when completed, could help DHS to improve its ability to manage the risk of selected services.
Recommendation: To improve the department's ability to manage the risk of selected services that closely support inherently governmental functions as well as government control over and accountability for decisions, the Secretary of Homeland Security should assess the risk of selected contractor services as part of the acquisition planning process, and modify existing acquisition guidance and training to address when to use and how to oversee those services in accordance with federal acquisition policy.
Agency Affected: Department of Homeland Security
Status: Open
Comments: In May 2009, DHS announced a mandatory review of selected service contracts to ensure contracts are not used for inherently governmental work or core functions that should be performed by federal employees. The results of this review could improve DHS's ability to manage the risk of contracting for selected services. DHS has already taken some steps to address the recommendation: following GAO's audit work on this engagement, the DHS Chief Procurement Officer issued a memo that addresses, in part, concerns about inherently governmental functions in contracts and monitoring the level of contractors in the blended workforce. In addition, DHS has reviewed selected contracts in its acquisition planning efforts. For example, in 2008 contracts from the Domestic Nuclear Detection Office were reviewed to consider the risk of contractors performing selected services.
Recommendation: To improve the department's ability to manage the risk of selected services that closely support inherently governmental functions as well as government control over and accountability for decisions, the Secretary of Homeland Security should define contract requirements to clearly describe roles, responsibilities, and limitations of selected contractor services as part of the acquisition planning process.
Agency Affected: Department of Homeland Security
Status: Open
Comments: In May 2009, DHS announced a review of professional service contracts at award, or when options are exercised, to ensure functions do not include inherently governmental work or core functions that should be performed by federal employees. In addition, DHS procurement officials have stated that better definition of requirements, including clearly defining roles, responsibilities, and limitations of selected contractor services will result in fewer Time and Materials (T&M) type contracts and more effective use of Performance-Based Service Acquisition. In 2008, DHS conducted training that addressed the roles, responsibilities, and limitations of T&M contracts.
Recommendation: To improve the department's ability to manage the risk of selected services that closely support inherently governmental functions as well as government control over and accountability for decisions, the Secretary of Homeland Security should assess program office staff and expertise necessary to provide sufficient oversight of selected contractor services.
Agency Affected: Department of Homeland Security
Status: Open
Comments: According to representatives from the DHS Chief Procurement Office, acquisition guidance and related processes established in November, 2008 should help to assess the expertise of program office staff to oversee contractors. DHS has previously stated that direction to program office staff regarding additional oversight should be provided when contracts for selected services are first established and appropriate staff assigned at that time. The DHS review of selected professional services contracts, launched in May 2009, will look at whether there are sufficient federal employees to provide oversight for the contractor services. We will continue to follow this review to see if it addresses the recommendation.
Recommendation: To improve the department's ability to manage the risk of selected services that closely support inherently governmental functions as well as government control over and accountability for decisions, the Secretary of Homeland Security should review contracts for selected services as part of the acquisition oversight program.
Agency Affected: Department of Homeland Security
Status: Open
Comments: According to the Office of the Chief Procurement Officer, DHS is not reviewing contracts for selected services as part of the acquisition oversight program as GAO recommended. However, the May 2009 departmentwide efficiency review includes mandatory reviews of selected professional services contracts to identify potential risks of services that closely support inherently governmental functions.
