Summary
In fiscal year 2007, the Department of Homeland Security (DHS) obligated about $12 billion for acquisitions to support homeland security missions. DHS's major investments include Coast Guard ships and aircraft; border surveillance and screening equipment; nuclear detection equipment; and systems to track finances and human resources. In part to provide insight into the cost, schedule, and performance of these acquisitions, DHS established an investment review process in 2003. However, concerns have been raised about how well the process has been implemented--particularly for large investments. GAO was asked to (1) evaluate DHS's implementation of the investment review process, and (2) assess DHS's integration of the investment review and budget processes to ensure major investments fulfill mission needs. GAO reviewed relevant documents, including those for 57 DHS major investments (investments with a value of at least $50 million)--48 of which required department-level review through the second quarter of fiscal year 2008; and interviewed DHS headquarters and component officials.
While DHS's investment review process calls for executive decision making at key points in an investment's life cycle--including program authorization--the process has not provided the oversight needed to identify and address cost, schedule, and performance problems in its major investments. Poor implementation of the process is evidenced by the number of investments that did not adhere to the department's investment review policy--of DHS's 48 major investments requiring milestone and annual reviews, 45 were not assessed in accordance with this policy. At least 14 of these investments have reported cost growth, schedule slips, or performance shortfalls. Poor implementation is largely the result of DHS's failure to ensure that its Investment Review Board (IRB) and Joint Requirements Council (JRC)--the department's major acquisition decision-making bodies--effectively carried out their oversight responsibilities and had the resources to do so. Regardless, when oversight boards met, DHS could not enforce IRB and JRC decisions because it did not track whether components took actions called for in these decisions. In addition, many major investments lacked basic acquisition documents necessary to inform the investment review process, such as program baselines, and two out of nine components--which manage a total of 8 major investments--do not have required component-level processes in place. DHS has begun several efforts to address these shortcomings, including issuing an interim directive, to improve the investment review process. The investment review framework also integrates the budget process; however, budget decisions have been made in the absence of required oversight reviews and, as a result, DHS cannot ensure that annual funding decisions for its major investments make the best use of resources and address mission needs. GAO found almost a third of DHS's major investments received funding without having validated mission needs and requirements--which confirm a need is justified--and two-thirds did not have required life- cycle cost estimates. At the same time, DHS has not conducted regular reviews of its investment portfolios--broad categories of investments that are linked by similar missions--to ensure effective performance and minimize unintended duplication of effort for investments. Without validated requirements, life-cycle cost estimates, and regular portfolio reviews, DHS cannot ensure that its investment decisions are appropriate and will ultimately address capability gaps. In July 2008, 15 of the 57 DHS major investments reviewed by GAO were designated by the Office of Management and Budget as poorly planned and by DHS as poorly performing.
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 better ensure the investment review process is fully implemented and adhered to, the Secretary of Homeland Security should direct the Undersecretary for Management to establish a mechanism to identify and track on a regular basis new and ongoing major investments and ensure compliance with actions called for by investment oversight boards.
Agency Affected: Department of Homeland Security
Status: Open
Comments: DHS concurred with this recommendation and has taken action to implement it. In the department's letter to OMB and Congress, DHS stated that it had created and piloted a Next Generation Periodic Reporting System to regularly track program cost, schedule, and performance information. This system is also intended to track and ensure compliance with action items that result from acquisition oversight board decisions. DHS officials have indicated that the system is being populated with data. However, the system is still in a pilot phase and has not yet been fully implemented.
Recommendation: To better ensure the investment review process is fully implemented and adhered to, the Secretary of Homeland Security should direct the Undersecretary for Management to reinstate the JRC or establish another departmental joint requirements oversight board to review and approve acquisition requirements and assess potential duplication of effort.
Agency Affected: Department of Homeland Security
Status: Open
Comments: In its letter to OMB and the Congress, DHS noted that it has partially implemented this recommendation by developing and implementing a new Strategic Requirements Planning Process for assessing department-wide strategic requirements, capability needs, and gaps. This process was piloted in fiscal year 2008 and DHS plans to continue the process in fiscal years 2009 and 2010 if funding is available. Additionally, DHS has stated that efforts are under way to establish a new Joint Requirements Council to support the Deputy Secretary.
Recommendation: To better ensure the investment review process is fully implemented and adhered to, the Secretary of Homeland Security should direct the Undersecretary for Management to ensure investment decisions are transparent and documented as required.
Agency Affected: Department of Homeland Security
Status: Closed - implemented
Comments: DHS concurred with this recommendation and has taken action to implement it through issuance of the November 2008 interim acquisition management directive 102-01, which requires that acquisition decisions reached at acquisition decision events are documented through an acquisition decision memorandum. These memos are approved by the appropriate acquisition decision authority and have been consistently completed for acquisition decision events occurring through the third quarter of fiscal year 2009.
Recommendation: To better ensure the investment review process is fully implemented and adhered to, the Secretary of Homeland Security should direct the Undersecretary for Management to ensure that budget decisions are informed by the results of investment reviews including IRB approved acquisition information and life cycle cost estimates.
Agency Affected: Department of Homeland Security
Status: Open
Comments: In its letter to OMB and Congress, DHS stated that the November 2008 interim acquisition management directive 102-01 creates a link between the budget and requirements processes and describes interfaces with other investment processes. While the new directive establishes this process more clearly than the prior management directive, evidence that budget decisions are informed by the results of investment reviews will be seen in documents and results produced in upcoming budget cycles.
Recommendation: To better ensure the investment review process is fully implemented and adhered to, the Secretary of Homeland Security should direct the Undersecretary for Management to identify and align sufficient management resources to implement oversight reviews in a timely manner throughout the investment life cycle.
Agency Affected: Department of Homeland Security
Status: Open
Comments: In DHS's letter to OMB and Congress in response to our recommendations, DHS indicated that its Office of the Chief Procurement Officer (OCPO) has identified and aligned management resources to implement oversight reviews by establishing a Senior-executive led Acquisition Program Management Division as well as a Cost Analysis Division within the OCPO. To support these functions, the CPO is seeking an eventual increase in staffing to a total of 58 for acquisition oversight, but DHS noted that potential budgeting restrictions may preclude implementation of this target. As an initial step, DHS's fiscal year 2010 budget request includes an additional 10 full time equivalent positions for acquisition oversight support.
Recommendation: To improve investment management, the Secretary of Homeland Security should direct component heads to ensure that components have established processes to manage major investments consistent with departmental policies.
Agency Affected: Department of Homeland Security
Status: Closed - implemented
Comments: DHS has implemented this recommendation. In its response to OMB and the congress, DHS noted that the November 2008 DHS acquisition management directive 102-01, required components to align their internal policies and procedures with DHS standards within six months. In addition, the DHS Undersecretary for Management issued a January 2009 memo to Component Heads requiring them to create a Component Acquisition Executive position in their organizations responsible for the implementation of management and oversight of component acquisition processes.
Recommendation: To improve investment management, the Secretary of Homeland Security should direct component heads to establish a mechanism to ensure major investments comply with established component and departmental investment review policy standards.
Agency Affected: Department of Homeland Security
Status: Open
Comments: DHS concurred with this recommendation and has made some progress in implementing it. In its letter to OMB and Congress, DHS indicated that the November 2008 acquisition management directive 102-01, reestablishment of the acquisition review board process, and other acquisition initiatives ensure compliance with departmental and component acquisition policies. In January 2009, the DHS Undersecretary for Management issued a memorandum outlining the designation and implementation process for component acquisition executive positions. To fully implement this recommendation, the component acquisition executives will need to be in place and successfully establish and ensure compliance with the new DHS acquisition processes.
