Homeland Security:

DHS Requires More Disciplined Investment Management to Help Meet Mission Needs

GAO-12-1029T: Published: Sep 21, 2012. Publicly Released: Sep 21, 2012.

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John P. Hutton
(202) 512-7773
huttonj@gao.gov

 

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What GAO Found

In summary, we found that 68 of the 71 programs that responded to our survey reported that they experienced funding instability, faced workforce shortfalls, or that their planned capabilities changed after initiation. Most respondentsreported a combination of these challenges. We have previously reported that these challenges increase the likelihood acquisition programs will cost more and take longer to deliver capabilities than expected. Although DHS largely does not have reliable cost estimates and realistic schedules to accurately measure program performance, we used our survey results, cost information DHS provided to Congress, and an internal DHS review to identify 42 programs that experienced cost growth, schedule slips, or both. Further, using DHS's future-years funding plans - which aggregate funding levels to produce total project costs - we gained insight into the magnitude of the cost growth for 16 of the 42 programs. The total project costs for these 16 programs increased from $19.7 billion in 2008 to $52.2 billion in 2011, an aggregate increase of 166 percent.

We also found that DHS's acquisition policy reflects many key program management practices that could help mitigate risks and increase the chances for successful outcomes. It requires programs to develop documents demonstrating critical knowledge that would help leaders make better informed investment decisions when managing individual programs, such as operational requirements documents that provide performance parameters that programs must meet, and acquisition program baselines that establish programs’ critical baseline cost, schedule, and performance parameters. However, there are areas where DHS could further enhance its acquisition policy. Furthermore, as we have similarly reported in 2008 and 2010, DHS has not consistently met the requirements it has established. The department has only verified that four programs documented all of the critical knowledge the policy requires to proceed with acquisition activities. A number of officials explained that DHS’s culture has emphasized the need to rapidly execute missions more than sound acquisition management practices. DHS recognizes the need to implement its acquisition policy more consistently, but significant work remains to ensure DHS has the knowledge required to effectively manage its programs.

In addition, we determined that DHS's acquisition policy does not fully reflect several key portfolio management practices, such as allocating resources strategically, and DHS has not yet re-established an oversight board to manage its investment portfolio across the department.Since 2006, DHS has largely made investment decisions on a program-by-program and component-by-component basis. Cost growth and schedule slips, coupled with the fiscal challenges facing the federal government, make it essential that DHS allocate resources to its major programs in a deliberate manner. DHS plans to develop stronger portfolio management policies and processes, but until it does so, DHS programs are more likely to experience additional funding instability, which will increase the risk of further cost growth and schedule slips. These outcomes, combined with a tighter budget, could prevent DHS from developing needed capabilities.

Why GAO Did This Study

This testimony discusses investment management at the Department of Homeland Security (DHS). DHS invests extensively in acquisition programs to help secure the border, facilitate trade, screen travelers, enhance cyber security, improve disaster response, and execute a wide variety of other operations in support of its critical missions. In 2011, DHS reported to Congress that it planned to ultimately invest $167 billion in its major acquisition programs, and in fiscal year 2012 alone, DHS reported it was investing more than $18 billion in the department's acquisition programs. DHS acquisition management activities have been highlighted in our High Risk List since 2005, and our work over the past several years has identified significant shortcomings in the department's ability to manage an expanding portfolio of complex acquisitions. We have previously established that a program must have a sound business case that includes firm requirements, a knowledge-based acquisition strategy, and realistic cost estimates in order to reduce program challenges. These conditions provide a program a reasonable chance of overcoming challenges yet delivering on time and within budget. Earlier this week, GAO issued a report entitled Homeland Security: DHS Requires More Disciplined Investment Management to Help Meet Mission Needs. In this report, GAO found that while DHS has a sound acquisition management policy in place and has introduced initiatives to address longstanding challenges, DHS's ability to manage its acquisition programs is hampered by the lack of consistency with which it has implemented its policy.

For more information, contact John Hutton at (202) 512-4841, or at (huttonj@gao.gov).

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