Department of Homeland Security:

Improvements Could Further Enhance Ability to Acquire Innovative Technologies Using Other Transaction Authority

GAO-08-1088: Published: Sep 23, 2008. Publicly Released: Sep 23, 2008.

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When the Department of Homeland Security (DHS) was created in 2002, it was granted "other transaction" authority--a special authority used to meet mission needs. While the authority provides greater flexibility to attract and work with nontraditional contractors to research, develop, and test innovative technologies, other transactions carry the risk of reduced accountability and transparency--in part because they are exempt from certain federal acquisition regulations and cost accounting standards. In 2004, GAO reported on DHS's early use of this authority. This follow-up report determines the extent to which nontraditional contractors have been involved in DHS's other transactions, and assesses DHS's management of the acquisition process when using this authority to identify additional safeguards. To conduct its work, GAO reviewed relevant statutes, guidance, and prior GAO reports on other transactions, and interviewed contracting and program management officials, as well as contractors. GAO also reviewed 53 files for agreements entered into from fiscal years 2004 through 2008 and identified those involving nontraditional contractors.

DHS's other transactions documentation indicates that nontraditional contractors played a significant role in over 80 percent of the Science and Technology directorate's other transaction agreements. GAO identified 50 nontraditional contractors who participated in 44 agreements--one-third of them were prime contractors and about half of them were small businesses. These contractors provided a variety of technologies and services that DHS described as critical--including technology designed to detect chemical warfare agents after a suspected or known chemical attack. The proportion of dollars obligated for nontraditional contractors on an agreement did not necessarily indicate the importance of their contributions. For example, only 1 percent of total agreement obligations were allocated to a nontraditional subcontractor that, according to the prime contractor, was specially qualified for developing tests for a hazardous substance detection system. While DHS has continued to develop policies and procedures for other transactions, including some to mitigate financial and program risks for prototype projects, the department faces challenges in systematically assessing its use of other transactions and maintaining a skilled contracting workforce. DHS issued guidance in 2008 and continued to provide training to contracting staff on the use of other transactions. However, DHS does not track information on the amount of funds paid to nontraditional contractors or the nature of the work they performed, which could help the department assess whether it is obtaining the full benefits of other transaction authority. DHS recently updated its procurement database to capture information on other transaction agreements, but the database does not include all of the data DHS would need to assess nontraditional contractor involvement. Further, DHS's ability to maintain a stable and capable contracting workforce remains uncertain due to high staff turnover and the lack of a staff planning method.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In response to this recommendation, as well as a follow-up recommendation made in GAO-12-557, in March 2012, DHS established an internal web page to capture and update a listing of all current and completed other transaction agreements, including the role of and funding to nontraditional contractors. In addition, DHS collects information on intellectual property rights as part of its efforts to assess lessons learned from other transaction agreements, which include requests for feedback from contractors. DHS included information on nontraditional contractors and intellectual property rights in its 2012 report to Congress, which satisfied the recommendation. In future reports to Congress, DHS should consider providing additional detail about the how intellectual property rights were tailored to meet the specific needs of each project, to make clearer the extent to which this benefit has been achieved.

    Recommendation: To promote the efficient and effective use by DHS of its other transactions authority to meet its mission needs, the Secretary of Homeland Security should direct the Under Secretary for Management and the Under Secretary for Science and Technology to collect relevant data on other transaction agreements, including the roles of and funding to nontraditional contractors and intellectual property rights, and systematically assess and report to Congress on the use of these agreements to ensure that the intended benefits of the authority are achieved.

    Agency Affected: Department of Homeland Security

  2. Status: Closed - Not Implemented

    Comments: In response to this recommendation, DHS officials stated that they now have sufficient numbers of contracting officers trained to use other transaction agreements (OTA). The workload has declined as a result of fewer other transaction agreements, so DHS does not plan to take any further action. DHS officials said that they do not monitor workload or perform any workload analysis for OTAs. DHS officials also stated that OFPP is undertaking an acquisition staffing study, and they do not plan to do a separate analysis.

    Recommendation: To promote the efficient and effective use by DHS of its other transactions authority to meet its mission needs, the Secretary of Homeland Security should direct the Under Secretary for Management and the Under Secretary for Science and Technology to direct the Office of Procurement Operations to work with the Science and Technology directorate to determine the number of contracting officers needed to help ensure a sufficient contracting workforce to execute other transaction authority.

    Agency Affected: Department of Homeland Security

 

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