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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters:

September 2012:

Department of Homeland Security:

Oversight and Coordination of Research and Development Should Be 
Strengthened:

GAO-12-837:

GAO Highlights:

Highlights of GAO-12-837, a report to congressional requesters. 

Why GAO Did This Study:

Conducting R&D on technologies for detecting, preventing, and 
mitigating terrorist threats is vital to enhancing the security of the 
nation. Since its creation, DHS has spent billions of dollars 
researching and developing technologies used to support its missions 
including securing the border, detecting nuclear devices, and 
screening airline passengers and baggage for explosives, among others. 
Within DHS, S&T conducts R&D and is the component responsible for 
coordinating R&D across the department, but other components, such as 
the Coast Guard and DNDO, also conduct R&D to support their respective 
missions. GAO was asked to identify (1) how much DHS invests in R&D 
and the extent to which DHS has policies and guidance for defining R&D 
and overseeing R&D resources and efforts across the department, and 
(2) the extent to which R&D is coordinated within DHS to prevent 
overlap, fragmentation, or unnecessary duplication. GAO reviewed 
information on DHS R&D budgets, contracts, and DHS spending on R&D at 
DOE national laboratories for fiscal years 2010 through 2012. GAO also 
reviewed DHS R&D plans and project documentation, and interviewed DHS 
headquarters and component officials. 

What GAO Found:

The Department of Homeland Security (DHS) does not know the total 
amount its components invest in research and development (R&D) and 
does not have policies and guidance for defining R&D and overseeing 
R&D resources across the department. According to DHS, its Science & 
Technology Directorate (S&T), Domestic Nuclear Detection Office 
(DNDO), and U. S. Coast Guard are the only components that conduct R&D 
and, according to GAO’s analysis, these are the only components that 
report budget authority, obligations, or outlays for R&D activities to 
the Office of Management and Budget (OMB) as part of the budget 
process. However, GAO identified an additional $255 million in R&D 
obligations by other DHS components. For example, S&T reported 
receiving $50 million in reimbursements from other DHS components to 
conduct R&D.  Further, 10 components obligated $55 million for R&D 
contracts to third parties and $151 million to Department of Energy 
(DOE) national laboratories for R&D-related projects, but these were 
not reported as R&D to OMB. According to DHS, it is difficult to 
identify all R&D investments across the department because DHS does 
not have a department wide policy defining R&D or guidance directing 
components how to report all R&D spending and activities. As a result, 
it is difficult for DHS to oversee components’ R&D efforts and align 
them with agency wide R&D goals and priorities. Developing specific 
policies and guidance could assist DHS components in better 
understanding how to report R&D activities, and better position DHS to 
determine how much the agency invests in R&D to effectively oversee 
these investments. 

S&T has taken some steps to coordinate R&D efforts across DHS, but the 
department's R&D efforts are fragmented and overlapping, which 
increases the risk of unnecessary duplication. R&D at DHS is 
inherently fragmented because S&T, the Coast Guard, and DNDO were each 
given R&D responsibilities in law, and other DHS components may pursue 
and conduct their own R&D efforts as long as those activities are 
coordinated through S&T. S&T uses various mechanisms to coordinate its 
R&D efforts including component liaisons, component R&D agreements, 
joint R&D strategies, and integrated R&D product teams composed of S&T 
and component officials. However, GAO identified 35 instances of 
overlap among contracts that DHS components awarded for R&D projects. 
For example, S&T and the Transportation Security Administration both 
awarded overlapping contracts to different vendors to develop advanced 
algorithms to detect the same type of explosive. While GAO did not 
identify instances of unnecessary duplication among these contracts, 
DHS has not developed a policy defining who is responsible for 
coordinating R&D and what processes should be used to coordinate it, 
and does not have mechanisms to track all R&D activities at DHS that 
could help prevent overlap, fragmentation, or unnecessary duplication. 
For example, S&T did not track homeland security-related R&D 
activities that DHS components contracted through DOE national 
laboratories from fiscal year 2010 through 2013; thus, it could not 
provide information on those contracts. Developing a policy defining 
the roles and responsibilities for coordinating R&D, and establishing 
coordination processes and a mechanism to track all R&D projects could 
help DHS mitigate existing fragmentation and overlap, and reduce the 
risk of unnecessary duplication. 

What GAO Recommends:

GAO recommends that DHS develop policies and guidance for defining, 
reporting and coordinating R&D activities across the department; and 
that DHS establish a mechanism to track R&D projects.  DHS concurred 
with GAO’s recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-12-837]. For more 
information, contact David C. Maurer at (202) 512-9627 or 
maurerd@gao.gov. 

[End of section] 

Contents:

Letter:

Background:

DHS Does Not Know Its Total Investment in R&D, and Policies and 
Guidance Could Help Define and Oversee R&D Efforts:

S&T Coordinates Some R&D at DHS, but DHS R&D Is Fragmented and 
Overlapping, Increasing the Risk of Unnecessary Duplication:

Conclusions:

Recommendations for Executive Action:

Agency Comments and Our Evaluation:

Appendix I: Objectives, Scope, and Methodology:

Appendix II: Federal Government Definitions of Research and Development:

Appendix III: Department of Homeland Security Research and Development 
Obligations, Fiscal Year 2011:

Appendix IV: Role of Research and Development in Supporting the 
Department of Homeland Security Acquisition Life Cycle:

Appendix V: Comments from the Department of Homeland Security:

Appendix VI: GAO Contact and Staff Acknowledgments:

Figures:

Figure 1: DHS R&D Budget Authority and Outlays, Fiscal Years 2010 
through 2013:

Figure 2: DHS R&D Obligations, Fiscal Year 2011:

Figure 3: Avenues for Components to Engage in Department of Homeland 
Security's (DHS) Research and Development (R&D) Activities:

Abbreviations:

ASOA: Acquisition Support and Operations Analysis:

ATD: Advanced Technology Development:

CBP: U.S. Customs and Border Protection:

CFO: Chief Financial Officer:

C-TPAT: Customs Trade Partners Against Terrorism:

DHS: Department of Homeland Security:

DNDO: Domestic Nuclear Detection Office:

DOD: Department of Defense:

DOE: Department of Energy:

FAR: Federal Acquisitions Regulation:

FEMA: Federal Emergency Management Agency:

FFAS: Federal Financial Accounting Standards:

FMR: Financial Management Regulation:

FPDS-NG: Federal Procurement Data System Next Generation:

FRG: First Responder Group:

HSARPA: Homeland Security Advanced Research Projects Agency:

ICE: U.S. Immigration and Customs Enforcement:

IED: Improvised Explosive Device:

IPT: Integrated Product Team:

NAPA: National Academy of Public Administration:

NASA: National Aeronautical and Space Administration:

NPPD: National Protection and Programs Directorate:

NSF: National Science Foundation:

OHA: Office of Health Affairs:

OMB: Office of Management and Budget:

ONL: Office of National Laboratories:

OSTP: Office of Science and Technology Policy:

PARM: Program Accountability and Risk Management:

R&D: research and development:

RDT&E: Research, Development, Testing, and Evaluation:

S&T: Science and Technology Directorate:

SDD: System Development and Demonstration:

STICs: Science and Technology Investment Councils:

STORE: Science and Technology Operational Research and Enhancement:

TSA: Transportation Security Administration:

TTA: technology transition agreements:

USCIS: U.S. Citizenship and Immigration Services:

[End of section]

United States Government Accountability Office: 
Washington, DC 20548: 

September 12, 2012:

The Honorable Joseph I. Lieberman: 
Chairman: 
The Honorable Susan Collins: 
Ranking Member: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

The Honorable Daniel Akaka: 
Chairman: 
Subcommittee on Oversight of Government Management, the Federal 
Workforce, and the District of Columbia: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

Conducting research and development (R&D) on technologies for 
detecting, preventing, and mitigating terrorist threats is vital to 
enhancing the security of the nation. The Department of Homeland 
Security (DHS) conducts research, development, testing, and evaluation 
of new technologies that are intended to strengthen the United States' 
ability to prevent and respond to nuclear, biological, explosive, and 
other types of attacks within the United States. The department's 
Science and Technology (S&T) Directorate conducts research, 
development, demonstration, testing, and evaluation activities and 
also has responsibility for coordinating and integrating all such 
activities of the department, as provided by the Homeland Security Act 
of 2002.[Footnote 1] Although S&T conducts R&D and has responsibility 
for coordinating R&D, other DHS components, including the Domestic 
Nuclear Detection Office (DNDO) and the U. S. Coast Guard, conduct R&D 
in support of their respective missions.

Since it began operations in 2003, DHS, through both S&T and other 
components, has spent billions of dollars researching and developing 
technologies used to support a wide range of missions, including 
securing the border, detecting nuclear devices, and screening airline 
passengers and baggage for explosives, among others. In May 2004, we 
reported that DHS had not completed a strategic plan to identify 
priorities, goals, objectives, and policies for the R&D of homeland 
security technologies, and gaps remained in its efforts to coordinate 
with other federal agencies that conduct homeland security R&D. 
[Footnote 2] We recommended that DHS complete a strategic R&D plan and 
ensure that the plan was integrated with homeland security R&D 
conducted by other federal agencies. DHS agreed with our 
recommendation but has not yet implemented it. In June 2009, the 
National Academy of Public Administration (NAPA) reported on S&T's 
structure, processes, and the execution of its cross-government 
leadership role.[Footnote 3] NAPA reported that although S&T was 
charged by statute to provide a leading role in guiding homeland-
security related research, S&T has no authority over other federal 
agencies that conduct homeland-security related research, and was in a 
relatively weak position to carry out its leadership role. NAPA 
further reported that the weaknesses in S&T's strategic planning 
increased the risk for duplication of efforts and recommended, among 
other things, that S&T follow the Office of Management and Budget 
(OMB) and GAO guidance in formulating a strategic plan to guide its 
work. In July 2012, S&T provided a draft strategy that identifies the 
roles and responsibilities for coordinating homeland security science 
and technology related functions across the U.S. government to the 
White House's Office of Science & Technology Policy for review, but 
the White House had not yet approved that draft.[Footnote 4]

In November 2011, we reported that while S&T developed a 5-year R&D 
plan in 2008 to guide its efforts and was finalizing a new strategic 
plan to align its own R&D investments and goals, DHS had not yet 
completed a strategic plan to align all R&D efforts across the 
department, as we previously recommended in 2004.[Footnote 5] We also 
reported that S&T had undertaken a series of efforts related to its 
organizational structure and underwent a new strategic planning 
process, developed new strategic goals, and conducted a reorganization 
intended to better achieve its strategic goals as a result of the NAPA 
study. We also reported that these efforts had only recently been 
initiated, so it was too early to assess their effectiveness.[Footnote 
6]

Not having a department-wide strategy for managing R&D has raised 
questions about the extent to which R&D investments and efforts are 
being overseen and coordinated effectively across DHS. As a result, 
you requested that we conduct a review to determine how DHS oversees 
R&D resources and coordinates R&D efforts across the department. 
Specifically, this report addresses the following two questions:

1. How much does DHS invest in R&D and to what extent does it have 
policies and guidance for defining R&D and overseeing R&D resources 
and efforts across the department?

2. To what extent is R&D coordinated within DHS to prevent overlap, 
fragmentation, and unnecessary duplication across the department? 
[Footnote 7]

To determine how much DHS invests in R&D and the extent to which it 
has policies and guidance for defining R&D and overseeing R&D 
resources, we reviewed DHS's budget and congressional budget 
justifications to identify R&D investments reported from fiscal years 
2011 through 2013. To identify DHS's reported R&D budget authority, we 
analyzed R&D budget authority included in budget submissions to OMB 
from fiscal years 2010 through 2013.[Footnote 8] We also analyzed S&T, 
DNDO, and Coast Guard budgets to identify budget authority for R&D 
activities in non-R&D budget accounts. Further, we analyzed data from 
the Federal Procurement Data System Next Generation (FPDS-NG) to 
identify DHS R&D-related contracts for fiscal years 2007 through 2011. 
We also obtained data from the Department of Energy's (DOE) national 
laboratories from fiscal years 2010 through 2012 to identify how much 
DHS components obligated for R&D-related work at the national 
laboratories. We assessed the reliability of the data we used by 
reconciling it with published data, and interviewing officials 
responsible for overseeing the relevant data systems about, among 
other things, applicable quality control procedures to maintain the 
integrity of the data. We determined that these data were sufficiently 
reliable for the purposes of this report. Further, we interviewed S&T, 
Coast Guard, and DNDO budget officials to determine what portions of 
their budgets would appropriately capture total R&D activities, as 
well as DHS budget officials to discuss R&D spending, how DHS oversees 
R&D funding, and DHS's policies and guidance related to defining, 
overseeing, and coordinating R&D efforts. We also interviewed other 
DHS component officials to discuss the extent to which components 
conducted R&D, captured R&D activities in their budgets, and 
coordinated with S&T. We compared DHS efforts to develop policies and 
guidance with GAO's Standards for Internal Control in the Federal 
Government.[Footnote 9]

To determine the extent to which R&D is coordinated within DHS to 
prevent overlap, fragmentation, and unnecessary duplication, we 
reviewed data on about 15,000 federal procurement contract actions 
coded as R&D in FPDS-NG made by DHS components from fiscal years 2007 
through 2011 to identify contracts that were overlapping or 
duplicative of other contracts issued by different components. 
[Footnote 10] We selected 50 R&D contracts that appeared to contain 
overlap and interviewed the officials of the six components that 
issued them to discuss the nature of those contracts. We could not 
determine the full extent of duplication or overlap occurring in the 
department, because, among other things, the FPDS-NG data system 
captures only a portion of the total R&D activities occurring at DHS. 
We also used our past work on fragmentation, overlap, and duplication 
across the federal government,[Footnote 11] Standards for Internal 
Control in the Federal Government,[Footnote 12] and our prior work 
related to federal collaboration to assess DHS's coordination of R&D 
across the department.[Footnote 13] We also interviewed S&T 
leadership, technical division directors, and DHS component officials 
to discuss S&T and DHS's R&D coordination processes. More details on 
our scope and methodology can be found in appendix I.

We conducted this performance audit from September 2011 through 
September 2012 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives.

Background:

Definition of R&D in the Federal Government:

OMB requires agencies to submit data on R&D programs as part of their 
annual budget submissions. Specifically, agencies are to provide data 
on investments for basic research, applied research, development, R&D 
facilities construction, and major equipment for R&D. OMB provides one 
definition of R&D that all federal agencies are to use to prepare 
budget estimates (see appendix II for a list of federal R&D 
definitions). According to OMB, R&D activities comprise creative work 
undertaken on a systematic basis in order to increase the stock of 
knowledge, including knowledge of man, culture, and society, and the 
use of this stock of knowledge to devise new applications.[Footnote 
14] R&D is further broken down into the following three stages, as 
defined by OMB.[Footnote 15]

* Basic research is a systematic study directed toward a fuller 
knowledge or understanding of the fundamental aspects of phenomena and 
of observable facts without specific applications towards processes or 
products in mind.

* Applied research is a systematic study to gain knowledge or 
understanding to determine the means by which a recognized and 
specific need may be met.

* Development is a systematic application of knowledge or 
understanding, directed toward the production of useful materials, 
devices, and systems or methods, including design, development, and 
improvement of prototypes and new processes to meet specific 
requirements.

DHS R&D Investment:

There are several mechanisms by which agencies such as DHS are 
required to report their investments in R&D, and investments can be 
described in the following ways:

* Budget authority is the legal authorization to obligate funds.

* Obligations are binding agreements for the government to make a 
payment (outlay) for goods and services ordered or received.

* Outlays are payments to liquidate obligations and represent the 
amount actually expended.

For R&D activities, OMB directs agencies to submit information on 
budget authority and outlays for each year. Because the executive 
branch and Congress generally make budget decisions in terms of budget 
authority, budget authority can provide insight into relative 
priorities within the annual budget process and changes in budget 
policies.[Footnote 16] Agencies report obligation data to OMB by 
object classification. Object classes are categories that present 
obligations for items or services purchased according to their initial 
purpose. For R&D-related obligations, OMB has a separate category for 
R&D contracts (object class 25.5). OMB also includes some advisory and 
assistance services for R&D in a separate object class category 
(object class 25.1).[Footnote 17]

DHS is one of nine federal agencies that reported a total of $5 
billion in budget authority in fiscal year 2011 for homeland security 
R&D.[Footnote 18] According to DHS, S&T, DNDO, and the Coast Guard are 
the three components that conduct R&D within the department, with S&T 
by far being the largest R&D entity. DHS reported $512 million in 
budget authority and $752 million in outlays for R&D in fiscal year 
2011.[Footnote 19]

R&D Roles and Responsibilities at DHS:

The Homeland Security Act of 2002 established S&T within DHS and 
provided it with responsibility for, among other things:

* conducting basic and applied research, development, demonstration, 
and testing and evaluation activities relevant to any or all elements 
of DHS;

* establishing and administering the primary R&D activities of the 
department, including the long-term research and development needs and 
capabilities for all elements of the department; and:

* coordinating and integrating all research, development, 
demonstration, testing, and evaluation activities of the 
department.[Footnote 20]

S&T has six technical divisions responsible for managing S&T's R&D 
portfolio and coordinating with other DHS components to identify R&D 
priorities and needs.[Footnote 21] As of September 2012, S&T had 
approximately 79 active R&D projects. Most of S&T's R&D portfolio 
consists of applied and development R&D projects for its DHS 
customers. It also conducts other projects for additional customers, 
including other federal agencies, first responders, and industry, 
among others.

In addition to S&T, DNDO and the Coast Guard conduct R&D activities. 
[Footnote 22] After its establishment in 2005, DNDO assumed 
responsibility from S&T for certain nuclear and radiological R&D 
activities. DNDO is the primary federal organization responsible for 
developing, acquiring, and supporting the deployment of an enhanced 
domestic system to detect and report on attempts to import, possess, 
store, transport, develop, or use an unauthorized nuclear explosive 
device, fissile material, or radiological material in the United 
States.[Footnote 23] As of August 2012, DNDO officials estimated that 
they have 30 R&D projects and plan to obligate $75.9 million for R&D 
in fiscal year 2012. According to Coast Guard officials, the Coast 
Guard R&D Center conducts R&D projects to support the Coast Guard's 
priorities, primarily focusing on maritime safety-related projects. As 
of August 2012, Coast Guard officials estimated that they have 60-70 
applied research projects and have spent about $30 million on R&D in 
fiscal year 2012 so far.

Our Work on Fragmentation, Overlap, and Duplication:

In 2010, Congress directed us to identify programs, agencies, offices, 
and initiatives with duplicative goals and activities within 
departments and government-wide and report annually to Congress. 
[Footnote 24] In March 2011 and February 2012, we issued our first two 
annual reports to Congress in response to this requirement.[Footnote 
25] The annual reports describe areas in which we found evidence of 
fragmentation, overlap, or duplication among federal programs. Using 
the framework established in our prior work on addressing 
fragmentation, overlap, and duplication, we use the following 
definitions for the purpose of assessing DHS's R&D efforts:

* Fragmentation occurs when more than one federal agency (or more than 
one organization within an agency) is involved in the same broad area 
of national interest.

* Overlap occurs when multiple programs have similar goals, engage in 
similar activities or strategies to achieve those goals, or target 
similar beneficiaries. Overlap may result from statutory or other 
limitations beyond the agency's control.

* Duplication occurs when two or more agencies or programs are 
engaging in the same activities or providing the same services to the 
same beneficiaries.

DHS Does Not Know Its Total Investment in R&D, and Policies and 
Guidance Could Help Define and Oversee R&D Efforts:

DHS Does Not Know Its Total Investment in R&D:

DHS does not know how much all of its components invest in R&D, making 
it difficult to oversee R&D efforts across the department. According 
to DHS budget officials, S&T, DNDO, and the Coast Guard are the only 
components that conduct R&D and, according to our analysis, they are 
the only components that report budget authority, obligations, or 
outlays for R&D activities to OMB as part of the budget process. 
However, we identified an additional $255 million in R&D obligations 
by other DHS components. Further, we found that DNDO did not report 
certain R&D budget data to OMB, and R&D budget accounts include a mix 
of R&D and non-R&D spending, further complicating DHS's ability to 
identify its total investment in R&D.

R&D Obligations Not Reported as R&D:

Our analysis of the data that DHS submitted to OMB found that DHS's 
R&D obligations were underreported because other DHS components 
obligated money for R&D contracts that were not reported to OMB as 
R&D. Specifically, for fiscal year 2011, our analysis identified $255 
million in obligations for R&D that DHS did not report as R&D 
contracts in the object classification tables. These obligations 
included DHS components providing S&T with funding to conduct R&D on 
their behalf and components obligating funds through contracts 
directly to industry, universities, or with DOE's national 
laboratories for R&D. Specifically:

* S&T reported receiving $50 million in reimbursements from other DHS 
components, such as U.S. Citizenship and Immigration Services, the 
Secret Service, the Office of Health Affairs, Customs and Border 
Protection (CBP), and the Transportation Security Administration (TSA) 
to conduct R&D projects.[Footnote 26] These obligations were not 
identified as R&D in these components' budgets.

* Our analysis identified 10 components, including CBP, TSA, U.S. 
Immigration and Customs Enforcement (ICE), and the Federal Emergency 
Management Agency (FEMA), that obligated approximately $55 million for 
R&D contracts that were not reported as R&D.[Footnote 27]

* Our analysis identified that DHS components, outside of S&T, DNDO, 
and the Coast Guard, obligated $151 million to DOE national 
laboratories for R&D-related projects (44 percent of total DHS 
spending at the national laboratories in fiscal year 2011).[Footnote 
28] For example, the National Protection and Programs Directorate 
(NPPD) obligated $83 million to DOE national laboratories in fiscal 
year 2011 (see appendix III for R&D obligations by component).

R&D Outlays and Budget Authority:

Our analysis of the data that DHS submitted to OMB also showed that 
DHS's R&D budget authority and outlays were underreported because DNDO 
did not properly report its R&D budget authority and outlays to OMB 
for fiscal years 2010 through 2013. Specifically, for fiscal years 
2010 through 2013, DHS underreported its total R&D budget authority by 
at least $293 million and outlays for R&D by at least $282 million 
because DNDO did not accurately report the data.[Footnote 29] In 
fiscal year 2011, S&T and the Coast Guard reported $512 million in R&D 
budget authority and $752 million in outlays, but DNDO did not report 
$56 million in R&D budget authority or $80 million in outlays. 
[Footnote 30] DNDO officials gave us the data for the missing years as 
depicted in figure 1 along with S&T and Coast Guard data.

Figure 1: DHS R&D Budget Authority and Outlays, Fiscal Years 2010 
through 2013:

[Refer to PDF for image: 2 vertical bar graphs] 

Budget authority: 

Budget year: 2010 actual; 
Science and Technology Directorate: $706 million; 
Domestic Nuclear Detection Office: $74 million; 
United States Coast Guard: $26 million. 

Budget year: 2011 (CR actual); 
Science and Technology Directorate: $486 million; 
Domestic Nuclear Detection Office: $56 million; 
United States Coast Guard: $26 million. 

Budget year: 2012 (enacted); 
Science and Technology Directorate: $356 million; 
Domestic Nuclear Detection Office: $76 million; 
United States Coast Guard: $30 million. 

Budget year: 2013 (requested); 
Science and Technology Directorate: $566 million; 
Domestic Nuclear Detection Office: $86 million; 
United States Coast Guard: $22 million. 

Outlays: 

Budget year: 2010 actual; 
Science and Technology Directorate: $735 million; 
Domestic Nuclear Detection Office: $114 million; 
United States Coast Guard: 27 million. 

Budget year: 2011 (CR actual); 
Science and Technology Directorate: $730 million; 
Domestic Nuclear Detection Office: $80 million; 
United States Coast Guard: $22 million. 

Budget year: 2012 (enacted); 
Science and Technology Directorate: $457 million; 
Domestic Nuclear Detection Office: $88 million; 
United States Coast Guard: $20 million. 

Budget year: 2013 (requested); 
Science and Technology Directorate: $468 million; 
Domestic Nuclear Detection Office: 0; 
United States Coast Guard: $26 million. 

Source: GAO analysis of OMB and DHS data. 

Notes:

Figures do not include spending on R&D facilities.

Outlays are actual expenditure of funds and may occur many years after 
the funds were authorized and obligated. 

[End of figure] 

DNDO budget officials told us that they are aware of the omission and 
confirmed that the OMB submission will be corrected in fiscal year 
2013. DHS budget officials agreed that DHS underreported its R&D 
spending and when asked, could not provide a reason why the omission 
was not flagged by DHS review.

In addition, within S&T, the Coast Guard, and DNDO, it is difficult to 
identify all R&D funding because their R&D budget accounts fund both 
R&D and non-R&D investments. For fiscal year 2011, we estimated that 
78 percent of S&T's Research, Development, Acquisition, & Operations 
account, 51 percent of DNDO's "Research, Development, & Operations" 
account, and 43 percent of the Coast Guard's R&D budget account fund 
R&D activities. Figure 2 provides the various S&T, DNDO, and Coast 
Guard budget accounts and budget activities and what percentage of 
each account was obligated for R&D in fiscal year 2011.

Figure 2: DHS R&D Obligations, Fiscal Year 2011:

[Refer to PDF for image: 3 pie-charts and sub-charts] 

DHS R&D component: Science and Technology Directorate; 
Primary R&D budget account: Research, Development, Acquisition, and 
Operations; 
Total obligation: $765 million; 
Total obligations for R&D: $595 million; 
Budget activity: Research, Development, and Innovation; 
Total obligation (R&D obligations): $500 million ($500 million); 
Percentage of budget activity obligated as R&D: 100%; 
Budget activity: University Programs; 
Total obligation (R&D obligations): $52 million ($52 million); 
Percentage of budget activity obligated as R&D: 100%; 
Budget activity: Laboratory Facilities; 
Total obligation (R&D obligations): $157 million ($9 million); 
Percentage of budget activity obligated as R&D: 6%; 
Budget activity: Acquisition and Operations Support; 
Total obligation (R&D obligations): $56 million ($34 million); 
Percentage of budget activity obligated as R&D: 61%. 

DHS R&D component: Domestic Nuclear Detection Office; 
Primary R&D budget account: Research, Development, and Operations; 
Total obligation: $298 million; 
Total obligations for R&D: $152 million; 
Budget activity: Transformational R&D; 
Total obligation (R&D obligations): $98 million ($98 million); 
Percentage of budget activity obligated as R&D: 100%; 
Budget activity: Systems Development; 
Total obligation (R&D obligations): $68 million ($36 million); 
Percentage of budget activity obligated as R&D: 53%; 
Budget activity: Systems Engineering and Architecture; 
Total obligation (R&D obligations): $35 million ($11 million); 
Percentage of budget activity obligated as R&D: 31%; 
Budget activity: Assessments; 
Total obligation (R&D obligations): $41 million ($6 million); 
Percentage of budget activity obligated as R&D: 15%; 
Budget activity: Operations Support; 
Total obligation (R&D obligations): $33 million ($0.8 million); 
Percentage of budget activity obligated as R&D: 2%; 
Budget activity: National Technical Forensic Center; 
Total obligation (R&D obligations): $23 million ($0.3 million); 
Percentage of budget activity obligated as R&D: 1%. 

DHS R&D component: United States Coast Guard R&D Center; 
Primary R&D budget account: Research, Development, Test, and 
Evaluation; 
Total obligation: $21 million; 
Total obligations for R&D: $9 million
Budget activity: Research, Development, Test, and Evaluation; 
Total obligation (R&D obligations): $21 million ($9 million); 
Percentage of budget activity obligated as R&D: 43%. 

Source: GAo analysis of DHS budget documents. 

Notes:

Percentages might not be exact due to rounding.

For budget activities that officials told us were solely for R&D, such 
as S&T's Research, Development and Innovation and University Programs 
and DNDO's Transformational R&D, we counted the total:

obligations from the activity as R&D obligations. For budget 
activities with both R&D and non-R&D obligations, we analyzed object 
classification tables, specifically object class 25.5 R&D contracts, 
to identify obligations for R&D from each budget activity.

A portion of Coast Guard's obligations for research, development, 
test, and evaluation (RDT&E) is made for personnel compensation and 
benefits. Obligations for this purpose are identified in the object 
classification tables in the budget justification. For FY2011, Coast 
Guard obligated $11.4 million for personnel compensation and benefits. 
Subtracting this from total obligations for the RDT&E budget account 
gives us the total obligations for Coast Guard mission R&D activities, 
$9 million. 

[End of figure] 

DHS's budget director recognized that spending in areas that cut 
across the department, like R&D, are difficult to manage and told us 
that DHS does not have oversight of R&D across the department. DHS is 
taking some steps to address this, including identifying R&D as a 
budget line in DHS's proposed unified account structure, which was 
submitted to Congress in the fiscal year 2013 budget for approval.

In 2007, we reported that appropriators rely on budget exhibits to 
inform the decision to authorize and appropriate funds for many 
programs; thus, accurate classifications of program and projects by 
budget activity are needed for decision makers to readily understand 
how projects are progressing and how money is being spent.[Footnote 
31] Specifically regarding R&D, we reported that decision makers use 
the Department of Defense's (DOD) budget reports, which detail a 
project's stage of development, to assess how much is being invested 
in fundamental science and technology and to determine the future 
capabilities of U.S. military forces.

Policies and Guidance for Defining and Reporting R&D Could Improve 
Oversight:

DHS does not have a departmentwide policy defining R&D or guidance 
directing components how to report R&D activities. As a result, it is 
difficult to identify the department's total investment in R&D, which 
limits DHS's ability to oversee components' R&D efforts and align them 
with agencywide R&D goals and priorities. DHS officials told us that 
DHS uses OMB's definition of R&D, but the definition is broad and its 
application may not be uniform across components, and thus, R&D 
investments may not always be identified as R&D. For example, DHS 
officials told us that test and evaluation is generally not considered 
R&D because the purpose is to test how an existing technology fits 
into an operational environment. However, S&T's Chief Financial 
Officer (CFO) told us that S&T reports test and evaluation activities 
as part of its R&D budget authority.

Further, DHS officials told us that there is no distinct line between 
capital investments and the R&D for technology development. For 
example, NPPD officials told us they consider its cybersecurity system 
to be a capital investment, and not R&D, but they consider R&D of new 
technologies as an important aspect of this system. The variation in 
R&D definitions may contribute to the unreliability of the reporting 
mechanisms for R&D investments in budget development and execution, as 
discussed above. Standards for Internal Control in the Federal 
Government state that policies and mechanisms are needed to enforce 
management's directives, such as the process of adhering to 
requirements for budget development and execution and to ensure the 
reliability of those and other reports for internal and external use. 
[Footnote 32] Additionally, we previously reported that agencies can 
enhance and sustain their collaborative efforts by defining and 
articulating a common outcome and establishing compatible policies, 
procedures, and other means to operate across agency boundaries. 
[Footnote 33] Such definitions could help DHS better identify its R&D 
investment.

Other agencies that have conducted R&D longer than DHS, like DOD and 
the National Aeronautical and Space Administration (NASA), have 
recognized the need to develop policies to better define what efforts 
constitute R&D and manage their R&D activities. For example, DOD's 
Financial Management Regulation defines seven stages of technological 
maturity for R&D activities and links them to the budget process to 
increase transparency and oversight of R&D throughout the department. 
[Footnote 34] Similarly, NASA has a directive that outlines its 
"cohesive management process" for its R&D activities, which 
illustrates program and project life cycles and defines the roles and 
responsibilities of key management personnel.[Footnote 35] DHS 
officials stated that the Chief Financial Officer's (CFO) office has 
oversight of R&D across the department through monthly reports 
submitted by components. For example, S&T provides monthly reports on 
R&D obligations to the CFO that detail obligations by individual 
appropriation accounts for R&D activities. However, those reports 
include R&D that is reported as R&D obligations in the budget process 
and do not provide financial details for the R&D investments made by 
components other than S&T, DNDO, and the Coast Guard, as described 
earlier in this report.

The challenges DHS faces in managing its R&D efforts are similar to 
the challenges the department has faced in managing its acquisitions. 
In September 2008, we reported that DHS had not integrated the 
acquisition function across the department and did not have adequate 
oversight of all of its acquisition programs.[Footnote 36] DHS 
officials agreed with our findings and the agency has taken steps to 
implement policies and guidance to ensure that components follow 
consistent acquisition practices and that a process exists to oversee 
acquisition programs, as outlined in Acquisition Management Directive 
102-01 (AMD 102-01).[Footnote 37] Officials at DHS's Program 
Accountability and Risk Management office (PARM) agreed the department 
has not developed policies or guidance on how components should define 
and oversee R&D investments and efforts. They stated that they are in 
the process of updating AMD 102-01 to include additional sections 
pertaining to nonacquisition investments and that such R&D policy and 
guidance could be incorporated into such updates in the future. (See 
App. IV for an illustration of how R&D supports all four phases of 
DHS's Acquisition Life Cycle as defined by AMD 102-01). Such an update 
could establish policy and guidance for defining R&D consistently 
across the department and outline the processes and procedures for 
overseeing R&D, which would provide more oversight into the R&D 
investments across the department.

S&T Coordinates Some R&D at DHS, but DHS R&D Is Fragmented and 
Overlapping, Increasing the Risk of Unnecessary Duplication:

S&T has coordinated R&D efforts across DHS to some extent, but the 
department's R&D efforts are fragmented and overlapping, which 
increases the risk of unnecessary duplication. We identified 35 
instances of overlap among contracts that DHS components awarded for 
R&D projects, but did not identify instances of duplication among 
these contracts. Additionally, DHS has not developed a policy defining 
who is responsible for coordinating R&D and what processes should be 
used to coordinate it, and S&T does not have mechanisms to track all 
R&D activities at DHS. Developing a policy defining the roles and 
responsibilities for coordinating R&D, and establishing coordination 
processes and a mechanism to track all R&D projects could help DHS 
mitigate existing fragmentation and overlap, and reduce the risk of 
unnecessary duplication.

S&T Has Taken Some Actions to Coordinate R&D across DHS:

The Homeland Security Act of 2002, among other things, requires that 
S&T coordinate and integrate all research, development, demonstration, 
testing, and evaluation activities within DHS and establish and 
administer the primary R&D activities of the department.[Footnote 38] 
To carry out these responsibilities, S&T developed coordination 
practices that fall into four general categories: (1) S&T component 
liaisons, (2) R&D agreements between component heads and S&T, (3) 
joint R&D strategies between S&T and components, and (4) various R&D 
coordination teams made up of S&T and component project managers.

S&T Component Liaisons:

S&T officials stated that one of the primary ways that S&T mitigates 
the risk of overlap and duplication is through component liaisons 
staffed at S&T and S&T officials staffed at component agencies. 
Component liaisons became a primary coordination mechanism under the 
former Under Secretary who requested a Coast Guard official to work at 
S&T as a deputy division director. According to S&T officials, these 
component liaisons have been integral to S&T's coordination efforts. 
As of July 2012, S&T had eight liaisons from TSA, CBP, ICE, NPPD, the 
Secret Service, and the Coast Guard. In addition, S&T had seven 
employees detailed to other components, including CBP, the Secret 
Service, DHS's Office of Policy, DHS's Tactical Communications Program 
Office, DNDO, and TSA, as well as two liaisons at FEMA and DHS's 
Office of the Chief Financial Officer. According to S&T, liaisons help 
S&T maintain communication with components on R&D needs and related 
activities. For example, CBP requested an S&T liaison to provide 
technical expertise to its acquisition division. However, S&T does not 
have liaisons with every component.

Component R&D Agreements:

S&T signed agreements with two components--CBP and the Secret Service--
to help coordinate R&D activities. Under those agreements, S&T is 
working with the components on high-level "Apex projects" that are 
intended to solve components' strategic operational problems within 2 
years. For example, S&T and the Secret Service have an Apex project 
called the Science and Technology Operational Research and Enhancement 
project that was initiated in June 2010 to provide technology 
solutions for the Secret Service to define, establish, and document 
the near-and long-term R&D strategy for the protection of national 
leaders, visiting heads of state and government, designated sites, and 
national special security events. S&T officials stated that the Apex 
project required development and testing of about seven technologies 
which the Secret Service plans to incorporate into its operations. As 
of July 2012, S&T officials reported that all seven technologies were 
in the developmental stage and will undergo testing in late 2012. For 
the CBP Apex project, S&T is overseeing the development and evaluation 
of new technology and infrastructure to help CBP create Secure Transit 
Corridors.[Footnote 39] S&T officials stated that, as of July 2012, 
the project was on track to be completed in 1 year. S&T officials 
stated that it can accommodate only three or four Apex projects at any 
given time because of the time and resources required, but that it 
anticipates starting future Apex projects with FEMA and ICE. As a 
result, these high-level partnerships are not intended to address all 
customer needs at DHS.

Further, S&T provided us with three memorandums of agreement it 
entered into with DHS components as a means to coordinate R&D efforts. 
Specifically, S&T has agreements with CBP to develop a rapid response 
prototype, the Coast Guard to develop a test bed, and TSA to 
coordinate the transition of the Transportation Security Laboratory 
from TSA to S&T which, was completed in 2006. S&T is also currently 
working with TSA on an Aviation Security agreement that is to result 
in S&T supporting TSA in various areas (as outlined in the agreement) 
and providing technology to address capability gaps. S&T plans to 
initiate similar partnerships first with CBP, then with ICE and FEMA.

S&T also works with DHS components to ensure that it meets their R&D 
needs by signing technology transition agreements (TTA) to ensure that 
components use the technologies S&T develops. S&T has 42 TTAs with DHS 
components. For example, TSA agreed to integrate automated intent 
detection technologies to better detect unknown threats before they 
enter the country into its behavior detection-screening program once 
S&T successfully demonstrated that the technologies met performance 
requirements. Additionally, the U.S. Citizenship and Immigration 
Service (USCIS) agreed to deploy rapid DNA-based screening 
technologies to determine kinship to use in the refugee and asylum 
eligibility determination process upon S&T demonstrating that the 
technology meets certain performance criteria. According to S&T 
officials, none of these TTAs has yet resulted in a technology being 
transitioned from S&T to a component.

Component R&D Strategies:

In March 2011, S&T and TSA issued a joint R&D strategy for aviation 
security that identifies TSA's R&D priorities. That plan was a result 
of an internal planning process that prioritized capability gaps and 
focused on the work between TSA and S&T's Explosives and Human 
Factors/ Behavioral Sciences Divisions. According to TSA officials, 
the joint R&D strategic plan does not represent a TSA-wide R&D 
strategy because it does not include surface transportation security 
capability gaps. Rather, the officials said that TSA uses the National 
Infrastructure Protection Plan and an R&D working group with S&T to 
identify those capability gaps. S&T officials stated that it is 
currently updating its R&D Strategy with TSA. S&T is also planning to 
work with the Secret Service, CBP, ICE, and FEMA to build component-
specific R&D strategies that are linked to component acquisition 
programs.[Footnote 40]

R&D Coordination Teams:

S&T's previous Under Secretary instituted the Capstone Integrated 
Product Teams (IPT) process to coordinate R&D efforts between S&T and 
components. IPTs served as S&T's primary mechanism for coordinating 
R&D and consisted of members from S&T and component agencies. In S&T's 
5-year R&D plan for fiscal years 2008 through 2013, S&T identified 12 
IPTs, each of which was focused on a different topic and brought 
together decision makers from DHS components and S&T, as well as end 
users of technologies.[Footnote 41] Additionally, the IPT process 
included teams to coordinate R&D at the project level among S&T and 
components. IPTs solicited input from components to identify and 
address technology gaps and needs and were intended to assist 
operational units in making decisions about technology investments, 
based on S&T's understanding of technology and the state of applicable 
technology solutions. For example, members of the cargo security IPT 
determined that the capability gap that should be addressed was 
enhancing cargo screening and examination systems through detecting or 
identifying terrorist contraband items, like drugs or illegal 
firearms. As a result, S&T identified CanScan, a nonintrusive 
inspection system as a means for addressing that gap.

According to S&T division directors and officials we interviewed, the 
IPT process is no longer in place to coordinate R&D activities at the 
component level, but IPTs are being used by the division directors to 
coordinate R&D activities at the project level.[Footnote 42] In July 
2011, S&T announced the creation of a new process, called Science and 
Technology Investment Councils, which would coordinate R&D activities 
at the most senior levels of each component, rather than at the 
program manager level. However, S&T later decided not to implement the 
councils and instead began implementing two new coordination teams in 
the fall of 2011--a cross-functional team composed of S&T personnel 
focusing on strategic priorities and an integral partner team--led by 
S&T's newly created Acquisition Support and Operations Analysis (ASOA) 
division to focus on components' operational needs.[Footnote 43] 
According to S&T division directors, these new teams are not yet fully 
implemented and they are still using established relationships with 
components through the IPT process to identify components needs and 
coordinate R&D. Additionally, S&T still maintains IPTs with TSA on 
surface transportation.

DHS R&D Is Fragmented and Overlapping, Increasing the Risk of 
Unnecessary Duplication:

R&D at DHS is inherently fragmented because several components within 
DHS--S&T, the Coast Guard, and DNDO--were each given R&D 
responsibilities in law, and other DHS components may pursue and 
conduct their own R&D efforts as long as those activities are 
coordinated through S&T. Fragmentation among R&D efforts at DHS may be 
advantageous if the department determines that it could gain better or 
faster results by having multiple components engage in R&D activities 
toward a similar goal; however, it can be disadvantageous if those 
activities are uncoordinated or unintentionally overlapping or 
duplicative.

To illustrate overlap and the potential for unnecessary duplication, 
we reviewed data on about 15,000 federal procurement contract actions 
coded as R&D taken by DHS components from fiscal years 2007 through 
2012.[Footnote 44] See appendix 1 for details on our methodology for 
identifying overlap. Of those, we identified 50 R&D contracts issued 
by six DHS components--S&T, TSA, FEMA, the Office of Health Affairs 
(OHA), the Coast Guard, and CBP--that appeared to have similar 
activities with another contract and interviewed component officials 
about those R&D activities. We obtained 47 of those 50 contracts and 
reviewed their statements of work.[Footnote 45] On the basis of that 
analysis and our interviews with components, we identified 35 
instances of overlap where components awarded R&D contracts that 
overlapped with R&D activities conducted elsewhere in the department. 
We also found that DHS did not have tracking mechanisms or policies to 
help ensure that this overlap be avoided and better coordinated. 
[Footnote 46] For example:

* S&T awarded four separate contracts to develop methods of detecting 
ammonium nitrate and urea nitrate for the counter-IED program. TSA 
also awarded a contract to a private vendor to investigate the 
detection of ammonium nitrate and ammonium nitrate-based explosives. 
These contracts were similar in that they all addressed the detection 
of the same chemical.

* S&T awarded four separate contracts to develop advanced algorithms 
for explosives detection, while TSA also awarded contracts to develop 
algorithms to evaluate images for explosives. We determined that these 
R&D contracts overlapped because both components were involved in 
developing algorithms for explosives detection.

* S&T awarded a contract to a private vendor for support and analysis 
for seismic hazards, while FEMA also awarded a contract to a private 
vendor to develop seismic guidelines for buildings in the event of an 
earthquake. These contracts overlapped because they were both similar 
in scope.

Although the contracts we selected overlapped, we determined that they 
were not duplicative based on our analysis and our interviews with 
component officials. For example, TSA officials stated that all TSA 
R&D contracts we requested were initially awarded when TSA still 
conducted transportation security-related R&D and were managed by the 
Transportation Security Laboratory (TSL), which moved into S&T in 
2006.[Footnote 47] As a result, TSA did not have oversight into those 
contracts. Additionally, TSA officials stated that some of the 
contracts may have overlapped in the scope of work but were focused on 
different operational missions. S&T officials agreed with TSA, stating 
that some of this overlap occurred during a period of time when TSA 
was still conducting R&D through TSL and during a time when S&T did 
not have the level of contract oversight that it has now. FEMA 
officials stated that FEMA's research projects are related to 
earthquake hazards, rather than to multiple hazards like S&T's 
research projects. They stated that FEMA's coordination with S&T is 
dependent on prior personal relationships rather than through an 
established coordination process.

According to S&T officials, a process does not exist at DHS or within 
S&T to prevent overlap or unnecessary duplication but that 
relationships with components mitigate that risk. They also stated 
that S&T has improved interactions with components over time. For 
example, S&T officials stated that when CBP requested mobile radios to 
improve communication among its field staff, S&T knew that the Secret 
Service and ICE were already working in that area. To address this 
technology need, S&T provided a senior official to lead the Tactical 
Communication Team to address communication among different 
operational components and better coordinate those efforts.

In conducting this analysis, we recognize that overlapping R&D 
activities across similar areas may not be problematic. However, the 
existence of overlapping R&D activities coupled with the lack of 
policies and guidance defining R&D (as mentioned previously) and 
coordination processes is an indication that not all R&D activities at 
DHS are coordinated to ensure that R&D is not unnecessarily 
duplicative. As a result, DHS could increase oversight of R&D, and 
improve coordination of R&D activities to ensure that any duplication 
in R&D activities is purposeful rather than unnecessary, as discussed 
later in this draft. Overlap and the associated risk of unnecessary 
duplication occur throughout the government, as we have reported 
previously, and are not isolated to DHS.[Footnote 48] However, when 
coupled with consistent programmatic coordination, the risk of 
unnecessary duplication can be diminished.

Policy and Tracking Mechanism Could Improve Coordination and Reduce 
Risk of Unnecessary Duplication:

DHS and S&T do not have the policies and mechanisms necessary to 
coordinate R&D across the department and reduce the risk of 
unnecessary duplication. First, as noted earlier in this report, DHS 
does not have the policies and guidance necessary to define and 
oversee R&D investments across the department. While S&T has taken 
steps to coordinate R&D, DHS has not developed a policy defining who 
is responsible for coordinating R&D and what processes should be used 
to coordinate it. Specifically, while S&T has R&D agreements with some 
components, S&T officials rely on the former IPT process to coordinate 
with components. For example, S&T division directors cited the IPT 
process and personal relationships as the primary means to coordinate 
R&D activities with components and generally felt that they were 
coordinating effectively.

However, other component officials we interviewed did not view S&T's 
coordination practices as positively. Specifically, we interviewed six 
components to discuss the extent to which they coordinated with S&T on 
R&D activities. Four components stated that S&T did not have an 
established process that detailed how S&T would work with its 
customers or for coordinating all activities at DHS. For example, one 
component stated that S&T has conducted R&D that it thought would 
address the component's operational need but, when work was completed, 
the R&D project did not fit into the operational environment to meet 
the component's needs. In addition, without an established 
coordination process, the risk for unnecessary duplication increases, 
because components can engage in R&D activities without coordinating 
them through S&T (see figure 3).

Figure 3: Avenues for Components to Engage in Department of Homeland 
Security's (DHS) Research and Development (R&D) Activities:

[Refer to PDF for image: illustration] 

Current avenues to R&D: 
Agencies can engage in R&D activities with no coordination with 
Science and Directorate (S&T). 

DHS component agencies: 
R&D request to: 
DHS S&T; 
Outside party (National labs, private companies, universities, etc.). 

DHS S&T: 
R&D request to: 
Outside party (National labs, private companies, universities, etc.). 

Improved avenues to R&D: 
Agencies can still engage directly with vendors, but with S&T in a 
coordinating role. 

DHS component agencies: 
R&D request to: 
DHS S&T; 
Outside party (National labs, private companies, universities, etc.): 
through coordination with DHS S&T.  

Source: GAO. 

[End of figure]

Standards for Internal Control in the Federal Government states that 
policies and procedures ensure that the necessary activities occur at 
all levels and functions of the organization--not just from top-level 
leadership. This ensures that all levels of the organization are 
coordinating effectively and as part of a larger strategy. 
Additionally, internal control standards provide that agencies should 
communicate necessary information effectively by ensuring that they 
are communicating with, and obtaining information from, external 
stakeholders that may have a significant impact on the agency 
achieving its goals. DHS and S&T could be in a better position to 
coordinate the department's R&D efforts by implementing a specific 
policy outlining R&D roles and responsibilities and processes for 
coordinating R&D.

Furthermore, S&T and DHS have not developed a mechanism to track all 
ongoing R&D projects conducted across DHS components. Specifically, 
neither DHS nor S&T tracks all ongoing R&D projects across the 
department, including R&D activities contracted through the national 
laboratories. The Homeland Security Act of 2002 gave DHS the authority 
to use DOE laboratories to conduct R&D and established S&T's Office of 
National Laboratories (ONL) to be responsible for coordinating and 
using the DOE national laboratories.[Footnote 49] Additionally, DHS 
Directive 143 further directs ONL to serve as the primary point of 
contact to recommend contracting activity approval for work by the 
national laboratories, and review all statements of work issued from 
DHS and directed to the national laboratories. According to S&T, the 
purpose of that review is to ensure the proposed work is within the 
scope, and complies with the terms and conditions, of the prime 
contract between DOE and the national laboratories. We identified 11 
components that reimbursed the national laboratories for R&D between 
fiscal years 2010 and 2013, but ONL could not provide us with any 
information on those activities and told us it did not track them. 
[Footnote 50] According to S&T, ONL's ability to provide information 
on activities across the department is limited by components 
inconsistently operating within the DHS Directive 143 process for 
working with the national laboratories. According to the Director of 
ONL, to identify activities not reported through the DHS Directive 143 
process, S&T uses other means such as relationships with components 
and S&T, as well as reviewing task orders sent to the laboratories 
from DHS, visiting laboratories, and laboratories self- reporting 
their work to ONL.

We previously reported in 2004 that DHS faced challenges using DOE's 
laboratories and balancing the immediate needs of users of homeland 
security technologies with the need to conduct R&D on advanced 
technologies for the future.[Footnote 51] DHS agreed with our 
recommendation to create a strategic R&D plan to identify and develop 
countermeasures to chemical, biological, radiological, nuclear, and 
other emerging terrorist threats and to ensure that it detailed how 
DHS would work with other federal agencies to establish governmentwide 
priorities, identify research gaps, avoid duplication of effort, and 
leverage resources. DHS noted that such a plan was critical to the 
success of the department, and stated that S&T would complete a 
strategic planning process in 2004 that would be reviewed and updated 
annually. To date, DHS has not yet developed a departmentwide 
strategic plan for managing R&D, although S&T has developed its own 
plan.

Standards for Internal Control in the Federal Government states that 
controls are needed to provide reasonable assurance that, among other 
things, reliable data are obtained, maintained, and fairly disclosed 
in reports and agencies comply with laws and regulations. In addition, 
in June 2010, we reported that R&D information should be tracked in a 
consolidated database in order to fully coordinate cybersecurity R&D 
activities to provide essential information about ongoing and 
completed R&D.[Footnote 52] We recommended that the Director of the 
Office of Science and Technology Policy (OSTP) direct its subcommittee 
on Networking and Information Technology Research and Development to 
exercise its leadership responsibilities by, among other things, 
establishing and using a mechanism to keep track of federal 
cybersecurity R&D funding.[Footnote 53] OSTP agreed with our 
recommendation. Additionally, we previously reported that agencies can 
enhance and sustain their collaborative efforts by, among other 
things, agreeing on roles and responsibilities and developing 
mechanisms to monitor, evaluate, and report on results.[Footnote 54]

DHS officials agreed that such mechanisms to track R&D activities were 
necessary, and said they have faced similar challenges in managing 
investments across the department. DHS has attempted to address those 
challenges by, among other things, creating a database called the 
Decision Support Tool that is intended to improve the flow of 
information from component program offices to the DHS Management 
Directorate to support its governance efforts.[Footnote 55] The 
Decision Support Tool could provide an example of how DHS could better 
track ongoing R&D projects occurring in the department. DHS's PARM 
officials stated that they recently added new data fields to capture 
more detailed information on component activities, such as additional 
financial data, at a low cost to DHS, and that such data fields could 
be added to collect information and track R&D activities across DHS, 
such as contracts with private companies or universities and the 
associated costs. However, we reported in March 2012 that DHS 
executives were not confident enough in the data to use the Decision 
Support Tool to make acquisition decisions, and that DHS's plans to 
improve the quality of the data in this database were limited. 
[Footnote 56] We also reported that DHS had limited plans to improve 
the quality of the data because PARM only planned to check the data 
quality in preparation for key milestone meetings in the acquisition 
process. That could significantly diminish the Decision Support Tool's 
value, because users cannot confidently identify and take action to 
address problems meeting cost or schedule goals prior to program 
review meetings. As a result, improvements to the Decision Support 
Tool's data quality before expanding its use could improve the 
collecting and tracking of R&D information and could be used as an 
example of how to better track information occurring across 
components. DHS is taking actions to address the limitations to the 
Decision Support Tool's data quality by working to validate the 
Decision Support Tool's associated acquisition data. A policy that 
defines roles and responsibilities for coordinating R&D and 
coordination processes, as well as a mechanism that tracks all DHS R&D 
projects, could better position DHS to mitigate the risk of 
overlapping and unnecessarily duplicative R&D projects.

Conclusions:

Conducting R&D on technologies is a key component of DHS's efforts to 
detect, prevent, and mitigate terrorist threats and is vital to 
enhancing the security of the nation. Multiple entities across DHS 
conduct various types of R&D in pursuit of their respective missions, 
but DHS does not have a department-wide policy defining R&D or 
guidance directing components how to report R&D activities and 
investments. As a result, DHS does not have the ability to maintain 
oversight of its total investment in R&D across the department, which 
also limits its ability to oversee components' R&D efforts and align 
them with agencywide R&D goals and priorities. Establishing policies 
and guidance for defining R&D across the department and outlining the 
processes and procedures for overseeing R&D would provide more 
oversight of R&D investments across the department. Furthermore, DHS 
has taken some steps to coordinate R&D efforts across the department, 
but does not have a cohesive policy defining roles and 
responsibilities for coordinating R&D and mechanisms to track all DHS 
R&D projects. A policy that defines roles and responsibilities for 
coordinating R&D and coordination processes, as well as a mechanism 
that tracks all DHS R&D projects, could better position DHS to 
mitigate the risk of overlapping and unnecessarily duplicative R&D 
projects.

Recommendations for Executive Action:

To help ensure that DHS effectively oversees its R&D investment and 
efforts and reduces fragmentation, overlap, and the risk of 
unnecessary duplication, we recommend that the Secretary of Homeland 
Security develop and implement policies and guidance for defining and 
overseeing R&D at the department. Such policies and guidance could be 
included as an update to the department's existing acquisition 
directive and should include the following elements:

* a well-understood definition of R&D that provides reasonable 
assurance that reliable accounting and reporting of R&D resources and 
activities for internal and external use are achieved,

* a description of the department's process and roles and 
responsibilities for overseeing and coordinating R&D investments and 
efforts, and:

* a mechanism to track existing R&D projects and their associated 
costs across the department.

Agency Comments and Our Evaluation:

We provided a draft of this report to DHS for its review and comment. 
DHS provided written comments, which are reproduced in full in 
appendix V, and concurred with our recommendation. DHS also described 
actions it plans to take to address the recommendation. Specifically, 
according to DHS, it plans to evaluate the most effective path forward 
to guide uniform treatment of R&D across the department in compliance 
with OMB rules and is considering a management directive, multi 
component steering committee, or new policy guidance to help better 
oversee and coordinate R&D. DHS plans to complete these efforts by May 
1, 2013. Such actions should address the overall intent of our 
recommendation. However, it will be important that whatever DHS 
chooses to do, its actions address the specific elements we outlined 
in our recommendation, including developing a definition of R&D, 
defining roles and responsibilities for oversight and coordination, 
and developing a mechanism to track existing R&D projects and 
investments.

DHS also provided written technical comments, which we incorporated as 
appropriate.

We are sending copies of this report to the Secretary of Homeland 
Security, appropriate congressional committees, and other interested 
parties. This report is also available at no charge on GAO's website 
at [hyperlink, http://www.gao.gov].

If you or your staffs have any questions about this report, please 
contact me at (202) 512-9627 or maurerd@gao.gov. Contact points for 
our Office of Congressional Relations and Public Affairs may be found 
on the last page of this report. Key contributors to this report are 
listed in appendix VI. 

Signed by: 

David C. Maurer: 
Director, Homeland Security and Justice Issues:

[End of section]

Appendix I: Objectives, Scope, and Methodology:

This report answers the following questions:

1. How much does the Department of Homeland Security (DHS) invest in 
research and development (R&D) and to what extent does it have 
policies and guidance for defining R&D and overseeing R&D resources 
and efforts across the department?

2. To what extent is R&D coordinated within DHS to prevent overlap, 
fragmentation, and unnecessary duplication across the department?

To determine how much DHS invests in R&D and the extent that it has 
policies and guidance for defining R&D and overseeing R&D resources 
and efforts across the department, we reviewed DHS's budget and 
congressional budget justifications to identify R&D investments 
reported from fiscal years 2011 through 2013. We analyzed R&D budget 
authority, outlays, and obligations included in budget submissions to 
the Office of Management and Budget (OMB) reported for fiscal years 
2010 through 2013. We also analyzed Science and Technology Directorate 
(S&T), Domestic Nuclear Detection Office (DNDO), and Coast Guard 
budgets to identify obligations for R&D funded by non-R&D budget 
activities as identified in object class tables that present 
obligations by the items or services purchased (e.g. personnel 
compensation and benefits, contractual services and supplies, 
acquisition of assets, grants and fixed charges). In addition, we 
assessed DHS's management and oversight of its R&D spending against 
criteria in GAO's Standards for Internal Control in the Federal 
Government.[Footnote 57]

We analyzed data from the Federal Procurement Data System Next 
Generation (FPDS-NG) to identify R&D-related contracts across DHS for 
fiscal years 2007 through 2011. We filtered these contracts to include 
only those R&D stages coded as basic research, applied research, and 
exploratory development and advanced development, which align more 
closely with recognized definitions of R&D. We excluded the other four 
stages (engineering development, operational systems development, 
management/support, and commercialization) of R&D because these 
activities are linked more closely to procurements rather than R&D 
activities. We also analyzed data from the Department of Energy's 
(DOE) national laboratories from fiscal years 2010 through 2012 to 
identify how much DHS components obligated for R&D-related work at the 
national labs.

To determine the extent that R&D is coordinated within DHS to prevent 
overlap, fragmentation, and unnecessary duplication, we:

* Reviewed component R&D plans and project documentation. We also 
reviewed department and S&T division strategic plans.

* Interviewed officials from DHS, DNDO, the Coast Guard, the 
Transportation Security Administration (TSA), the Office of Health 
Affairs (OHA), U.S. Customs and Border Protection (CBP), the National 
Protection and Programs Directorate (NPPD), and the Secret Service to 
discuss, among other things, their R&D efforts, R&D budgets, and 
coordination with S&T. We interviewed DHS budget and acquisition 
oversight officials to discuss how DHS oversees and manages its R&D 
resources.

* Interviewed S&T's budget official and Homeland Security Advanced 
Research Projects Agency (HSARPA) officials, including directors from 
each of the six technical divisions, to discuss how they coordinated 
with components and prioritized R&D resources.

* Used a data-collection instrument to collect information on S&T R&D 
projects, associated costs of R&D projects, and division customers 
from each HSARPA director and interviewed the Director of S&T's Office 
of National Laboratories, responsible for coordinating S&T and DHS's 
R&D work conducted at the DOE national laboratories to discuss DHS's 
spending at and use of these laboratories.

* Compared DHS's coordination efforts against the relevant legislation 
and criteria, including federal internal control standards as well as 
GAO's recommended practices for collaboration and coordination to 
identify efforts to meet certain provisions and potential areas for 
improvement.[Footnote 58]

To seek examples of potential overlap and duplication, we:

* Reviewed data on about 15,000 federal procurement contract actions 
coded as R&D in the Federal Procurement Data System Next Generation 
(FPDS-NG) made by DHS components from fiscal years 2007 through 2012 
to identify contracts that were potentially overlapping or duplicative 
of other contracts issued by different components. This was the total 
number of DHS contract actions taken from fiscal years 2007 through 
2011.

* Established 32 key words based on our knowledge of the likely areas 
of overlapping R&D related to component missions in order to identify 
areas where components may have issued contracts that were similar in 
scope and to eliminate areas where duplicative activities were likely 
to be present but acceptable (e.g., personnel support and management 
services). We searched for the key words in the FPDS-NG data set to 
identify contracts containing the same key words issued by more than 
one component.

* Independently analyzed the contract descriptions and identified 50 
R&D contracts issued by six components--S&T, the Coast Guard, TSA, 
CBP, OHA, and the Federal Emergency Management Agency (FEMA)--that 
appeared to overlap and interviewed officials from those components to 
discuss the nature of those contracts.[Footnote 59]

* Obtained 47 out of 50 contracts and analyzed each contract's 
statement of work and objectives to determine the type of R&D activity 
and to identify whether each contract was overlapping or duplicative 
of any of the other 46 contracts. Two analysts independently reviewed 
each contract and then came to agreement regarding the presence of 
overlap and duplication.

We could not determine the full extent of duplication or overlap in 
the department, because the FPDS-NG data system captures only a 
portion of the total R&D activities occurring at DHS and we did not 
review the documentation for, or conduct a random sample of, all 
15,000 R&D contract actions. However, the results from our analysis 
illustrate overlap and the potential for unnecessary duplication. We 
also used our past work on fragmentation, overlap, and duplication 
across the federal government; Standards for Internal Control in the 
Federal Government; and our prior reports to assess DHS's coordination 
of R&D across the department.[Footnote 60]

We assessed the reliability of the data we used by reconciling the 
data with published data and applicable quality control procedures to 
maintain the integrity of the data, and interviewing DHS budget and 
procurement officials responsible for overseeing the data systems. In 
addition, we reviewed available FPDS-NG documentation, such as the 
user manual, and OMB guidance to identify related quality control 
mechanisms. We also assessed the reliability of data on DOE's national 
laboratory work for others by interviewing DOE officials responsible 
for compiling and reporting those data. We concluded that these data 
were sufficiently reliable for the purposes of this report.

We conducted this performance audit from September 2011 through 
September 2012 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives.

[End of section]

Appendix II: Federal Government Definitions of Research and Development:

Source: Office of Management and Budget; 
Basic research: Systematic study directed toward fuller knowledge or 
understanding of the fundamental aspects of phenomena and observable 
facts without specific applications toward processes or products; 
Applied research: Systematic study to gain knowledge or understanding 
necessary to determine the means by which a recognized and specific 
need may be met; 
Development: Systematic application of knowledge or understanding, 
directed toward the production of useful materials, devices, and 
systems or methods, including design, development, and improvement of 
prototypes and new processes to meet specific requirements. 

Source: Federal Financial Accounting Standards (FFAS); 
Basic research: Systematic study to gain knowledge or understanding of 
the fundamental aspects of phenomena and observable facts without 
specific applications toward processes or products; 
Applied research: Systematic study to gain knowledge or understanding 
necessary for determining the means by which a recognized and specific 
need may be met; 
Development: Systematic use of the knowledge and understanding gained 
from research for the production of useful materials, devices, 
systems, or methods, including the design and development of 
prototypes and processes. 

Source: Federal Acquisitions Regulation (FAR); 
Basic research: Research directed toward increasing knowledge in 
science with the primary aim being a fuller knowledge or understanding 
of the subject under study, rather than any practical application of 
that knowledge; 
Applied research: The effort that (1) normally follows basic research, 
but may not be severable from the related basic research; 
(2) attempts to determine and exploit the potential of scientific 
discoveries or improvements in technology, materials, processes, 
methods, devices, or techniques; and (3) attempts to advance the state 
of the art; 
Development: Systematic use of scientific and technical knowledge in 
the design, development, testing, or evaluation of a potential new 
product or service (or of an improvement in an existing product or 
service) to meet specific performance requirements or objectives. 

Source: National Science Foundation (NSF) Survey of Federal Funds for 
R&D; 
Basic research: Systematic study directed toward fuller knowledge or 
understanding of the fundamental aspects of phenomena and observable 
facts without specific applications toward processes or products; 
Applied research: Systematic study to gain knowledge or understanding 
necessary to determine the means by which a recognized and specific 
need may be met; 
Development: Systematic application of knowledge or understanding, 
directed toward the production of useful materials, devices, and 
systems or methods, including design, development, and improvement of 
prototypes and new processes to meet specific requirements. 

Source: Department of Defense Research, Development, Testing, and 
Evaluation (RDT&E) Budget Activities (1-7); 
Basic research: (1) Systematic study directed toward greater knowledge 
or understanding of the fundamental aspects of phenomena and of 
observable facts without specific applications toward processes or 
precuts in mind. It is farsighted high payoff research that provides 
the basis for technological progress; 
Applied research: (2) Systematic study to understand the means to meet 
a recognized and specific need. Systematic expansion and application 
of knowledge to develop useful materials, devices, and systems or 
methods. May be oriented, ultimately, toward the design, development, 
and improvement of prototypes and new processes to meet general 
mission area requirements. Applied research may translate promising 
basic research into solutions for broadly defined military needs, 
short of system development; 
Development: DOD divides development into 5 budget activities:; 
(3) Advanced Technology Development (ATD) (4) Advanced Component 
Development and Prototypes (ACD&P) (5) System Development and 
Demonstration (SDD) (6) RDT&E Management Support (7) Operational 
System Development.

Source: National Science Foundation and the Office of Management and 
Budget. 

[End of table] 

[End of section] 

Appendix III: Department of Homeland Security Research and Development 
Obligations, Fiscal Year 2011:

DHS R&D components: Science and Technology Directorate; 
Obligations: 
Reimbursements to S&T: [Empty]; 
FPDS-NG R&D contracts: $78,678,160; 
DOE national laboratories: $93,427,396; 
Component total R&D obligations: $172,105,556.

DHS R&D components: Domestic Nuclear Detection Office; 
Obligations: 
Reimbursements to S&T: $2,429; 
FPDS-NG R&D contracts: $28,529,786; 
DOE national laboratories: $95,427,232; 
Component total R&D obligations: $123,959,446.

DHS R&D components: United States Coast Guard R&D Center; 
Obligations: 
Reimbursements to S&T: [Empty]; 
FPDS-NG R&D contracts: $5,876,014; 
DOE national laboratories: $100,000; 
Component total R&D obligations: $5,976,014.

DHS R&D components: Subtotal; 
Obligations: 
Reimbursements to S&T: $2,429; 
FPDS-NG R&D contracts: $113,083,959; 
DOE national laboratories: $188,954,628; 
Component total R&D obligations: $302,041,016.

DHS R&D components: Other DHS components; 
Obligations: 
Reimbursements to S&T: [Empty]; 
FPDS-NG R&D contracts: [Empty]; 
DOE national laboratories: [Empty]; 
Component total R&D obligations: [Empty].

DHS R&D components: National Protection and Programs Directorate; 
Obligations: 
Reimbursements to S&T: $4,359,000; 
FPDS-NG R&D contracts: $705,926; 
DOE national laboratories: $82,882,861; 
Component total R&D obligations: $87,947,787.

DHS R&D components: Customs and Border Protection; 
Obligations: 
Reimbursements to S&T: $17,593,000; 
FPDS-NG R&D contracts: $754,979; 
DOE national laboratories: $25,109,607; 
Component total R&D obligations: $43,457,585.

DHS R&D components: Federal Emergency Management Agency; 
Obligations: 
Reimbursements to S&T: $450,000; 
FPDS-NG R&D contracts: $8,732,100; 
DOE national laboratories: $28,895,596; 
Component total R&D obligations: $38,077,696.

DHS R&D components: Transportation Security Administration; 
Obligations: 
Reimbursements to S&T: $15,143,000; 
FPDS-NG R&D contracts: $5,594,421; 
DOE national laboratories: $1,833,858; 
Component total R&D obligations: $22,571,279.

DHS R&D components: United States Coast Guard-non R&D-Center; 
Obligations: 
Reimbursements to S&T: [Empty]; 
FPDS-NG R&D contracts: $22,046,643; 
DOE national laboratories: $[Empty]; 
Component total R&D obligations: $22,046,643.

DHS R&D components: Office of Health Affairs; 
Obligations: 
Reimbursements to S&T: $390,000; 
FPDS-NG R&D contracts: $1,275,977; 
DOE national laboratories: $9,246,228; 
Component total R&D obligations: $10,912,205.

DHS R&D components: U.S. Immigration and Customs Enforcement; 
Obligations: 
Reimbursements to S&T: [Empty]; 
FPDS-NG R&D contracts: $10,534,536; 
DOE national laboratories: [Empty]; 
Component total R&D obligations: $10,534,536.

DHS R&D components: U.S. Citizenship and Immigration Services; 
Obligations: 
Reimbursements to S&T: $7,026,000; 
FPDS-NG R&D contracts: [Empty]; 
DOE national laboratories: [Empty]; 
Component total R&D obligations: $7,026,000.

DHS R&D components: Headquarters Operations; 
Obligations: 
Reimbursements to S&T: $4,429,000; 
FPDS-NG R&D contracts: [Empty]; 
DOE national laboratories: [Empty]; 
Component total R&D obligations: $4,429,000.

DHS R&D components: Federal Law Enforcement Training Center; 
Obligations: 
Reimbursements to S&T: [Empty]; 
FPDS-NG R&D contracts: $2,716,215; 
DOE national laboratories: [Empty]; 
Component total R&D obligations: $2,716,215.

DHS R&D components: United States Secret Service; 
Obligations: 
Reimbursements to S&T: $88,000; 
FPDS-NG R&D contracts: $1,816,506; 
DOE national laboratories: $250,000; 
Component total R&D obligations: $2,154,506.

DHS R&D components: Operations Coordination and Planning; 
Obligations: 
Reimbursements to S&T: [Empty]; 
FPDS-NG R&D contracts: [Empty]; 
DOE national laboratories: $2,000,000; 
Component total R&D obligations: $2,000,000.

DHS R&D components: Federal Protective Service; 
Obligations: 
Reimbursements to S&T: [Empty]; 
FPDS-NG R&D contracts: [Empty]; 
DOE national laboratories: $850,000; 
Component total R&D obligations: $850,000.

DHS R&D components: Intelligence and Operations; 
Obligations: 
Reimbursements to S&T: $[Empty]; 
FPDS-NG R&D contracts: $380,230; 
DOE national laboratories: $[Empty]; 
Component total R&D obligations: $380,230.

DHS R&D components: Subtotal; 
Obligations: 
Reimbursements to S&T: $49,478,000; 
FPDS-NG R&D contracts: $54,557,532; 
DOE national laboratories: $151,068,150; 
Component total R&D obligations: $255,103,682.

DHS R&D components: Total DHS R&D obligations; 
Obligations: 
Reimbursements to S&T: $49,480,429; 
FPDS-NG R&D contracts: $167,641,491; 
DOE national laboratories: $340,022,777; 
Component total R&D obligations: $557,144,698. 

Sources: GAO analysis of DHS budget documents and the Federal 
Procurement Data System-Next Generation.

Notes:

1. Totals may not add up due to rounding.

2. We analyzed DHS contract obligations coded as basic research, 
applied research and exploratory development, and advanced development 
in the FPDS-NG.

3. DHS conducted a data call to all components for obligations made to 
the Department of Energy National Laboratories.

3. We omitted from U.S. Customs and Border Protection FPDS-NG R&D 
contracts a deobligation of $12 million for the SBInet program.

4. For the analysis of FPDS-NG R&D contract obligations, we isolated 
contract obligations made from the Coast Guard's R&D Center and the 
rest of Coast Guard. We were not able to do this for the national 
laboratory or reimbursement data because obligations were identified 
only at the component level. 

[End of table] 

[End of section] 

Appendix IV: Role of Research and Development in Supporting the 
Department of Homeland Security Acquisition Life Cycle: 

Acquisition Phases: 

Phase 1: Define the problem; 


Phase 2: Identify the alternatives and resource requirements; 


Phase 3: Develop and evaluate capabilities; 

Phase 4: Produce and maintain capabilities; 

   
How R&D supports the DHS Acquisition Life Phase: 

S&T, DNDO, and USCG work with customers to identify capability gaps. 
Components develop requirements to meet the need. 
Example: 
S&T works with CBP to determine where CBP needs additional 
capabilities for border surveillance technologies. S&T determines how 
to address those capability gaps. 

S&T develops alternatives analysis and other pre-acquisition documents 
to inform component acquisition decisions. Components choose 
alternatives. 
Example: 
TSA or S&T analyzes alternative technologies that may address a 
capability gap. TSA uses this analysis, among other things, to 
determine whether or not to procure a technology or system. 

S&T, DNDO, USCG, or components may conduct R&D to further develop 
requirements or capabilities for technologies. Components may use R&D 
information or their own data to develop and obtain products. 
Example: 
DNDO collects requirements from CBP and converts those into a new 
concept of operations (CONOPS) or technology plan. 

Components continue to engage in development activities well into the 
acquisition lifecycle to further enhance capabilities. 
Example: 
The United States Secret Service may issue a contract for a vendor to 
provide enhanced capabilities to an existing technology. 

Source: GAO analysis of DHS Acquisition Lifecycle Framework and R&D 
activities. 

[End of section]

Appendix V: Comments from the Department of Homeland Security: 

U.S. DEpartment of Homeland Security: 
Washington. DC 20525: 

September 6, 2012: 

David Maurer: 
Director: 
Homeland Security and Justice Issues: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

RE: Draft Report GA0-12-837, "Department of Homeland Security: 
Oversight and Coordination of Research and Development Should be 
Strengthened" 

Dear Mr. Maurer: 

Thank you for the opportunity to review and comment on this draft 
report. The U.S. Department of Homeland Security (DIAS) appreciates 
the U.S. Government Accountability Office's (GAO's) work in planning 
and conducting its review and issuing this report. 

The Department is pleased to note GAO's positive recognition that the 
Science & Technology Directorate (S&T) has taken steps to coordinate 
research and development (R&D) in the Department by establishing 
Component liaisons, R&D strategies and joint agreements between
S&T and Components, and R&D coordination teams. 

The draft report contained one recommendation with which the 
Department concurs. Specifically, GAO recommended that the Secretary 
of Homeland Security: 

Recommendation: Develop and implement policies and guidance for 
defining and overseeing R&D at the department. Such policies and 
guidance could be included as an update to the department's existing 
acquisition directive and should include the following elements: 

* a well-understood definition of R&D that provides reasonable 
assurance that reliable accounting and reporting of R&D resources and 
activities for internal and external use are achieved,

* a description of the department's process and roles and 
responsibilities for overseeing and. coordinating R&D investments and 
efforts, and, 

* a mechanism to track existing R&D projects and their associated 
costs across the department. 

Response: Concur. The Department of Homeland Security is operationally 
focused, which creates a challenging, non-traditional environment for 
R&D activities. Within the Department's operational space, legitimate 
gray area exists between R&D—as defined by GAO or the Office of
Management and Budget (0MB)—and operational research, pilots for 
proven prototypes, and other operational improvements that non-R&D 
agencies typically perform and implement without specific R&D budget 
lines, In defining R&D and ensuring more uniform treatment of R&D 
across the Department DIIS will work to strike the necessary balance 
that acknowledges this ambiguity and does not limit Components' 
flexibility to continue improving their effectiveness and efficiency 
without adding additional or unnecessary hurdles. 

Successful R&D is much more than lists or formulas and depends on a 
continuous assessment of strategic priorities, operational needs, and 
technical capability against constantly shifting threats and unstable 
budgets. S&T understands the need for a more rigorous analytic and 
technical systems approach and coordinates R&D investments with the 
Components at multiple levels. As discussed in the report, the 
Integrated Product Teams (IPTs) were an important step in linking
S&T activities to Component needs. While IPTs were useful from a 
project management perspective, they were unable to consistently and 
strategically link S&T with Components. As a result, S&T moved from 
the IPT approach to the highly collaborative, end-user focused S&T
Resource Allocation Strategy (STRAS), an analytically driven systems 
analysis and engineering method for coordinating and interacting with 
Components that ensures S&T's efforts align with the Components' 
operational mission needs. 

In addition to STRAS, S&T is helping DIIS implement the Integrated 
Investment Lifecycle Model (IILCM), a new process for managing the 
Department's acquisitions, which injects analytical discipline into 
the acquisition process from start to finish. S&T's contribution to the
IILCM is to assure that DHS has clearly articulated needs and 
requirements, that decision makers have data-driven analytics, and to 
ensure that developed and transitioned solutions are consistent with 
the needs of the operational user. Between STRAS, ITLCM, and other 
existing formal and informal relationships with Components, S&T will 
have the tools to continue to improve R&D coordination. In an effort 
to better coordinate R&D across the Department. S&T has also hosted a 
meeting, with all Components present, on the appropriate use of 
Department of Energy Laboratory facilities, and will begin to more 
methodically track these efforts. 

Finally, the portfolio review process will be an important mechanism 
for ensuring a transparent and shareable view of R&D investments and 
enabling strategic, longer-term budget decisions. S&T is working with 
DHS leadership to facilitate adoption of the portfolio review process 
across the Department, beginning with the U.S. Coast Guard, whose 
leadership is working closely with S&T to serve as a pilot for a 
Component portfolio review process. As these reviews are fully 
implemented across the Department, tracking and transparency of R&D 
projects will improve significantly. 

On the basis of the report, DHS will evaluate the most effective path 
forward to guide uniform treatment of R&D across DHS in compliance 
with OMB rules. Options under consideration include a Management 
Directive, a multi-Component steering committee, and/or new policy 
guidance. These actions will complement the IILCM's continued 
development and implementation and will contribute to oversight, 
coordination, and the overall success of DHS's R&D investments.
Estimated Completion Date: May I., 2013. 

Again, thank you for the opportunity to review and comment on this 
draft report. Technical comments were provided under separate cover. 
Please feel free to contact me if you have any questions. We look 
forward to working with you in the future. 

Sincerely, 

Signed by: 

Jim H. Crumpacker: 
Director: 
Departmental GAO-OIG Liaison Office: 

[End of section] 

Appendix VI: GAO Contact and Staff Acknowledgments:

GAO Contact:

David C. Maurer, (202) 512-9627 or maurerd@gao.gov:

Staff Acknowledgments:

In addition to the contact named above, Chris Currie, Assistant 
Director, and Gary Malavenda, Analyst-in-Charge, managed this 
assignment. Emily Gunn and Margaret McKenna made significant 
contributions to this report. Also contributing to this report were 
Katherine Davis, Michele Fejfar, Eric Hauswirth, Carol Henn, Richard 
Hung, Julia Kennon, Tracey King, Nate Tranquilli, Katherine Trimble, 
and Sarah Veale.

[End of section] 

Footnotes: 

[1] Pub. L. No. 107-296, § 302,116 Stat. 2135, 2163-64 (codified as 
amended at 6 U.S.C. § 182).

[2] GAO, Homeland Security: DHS Needs a Strategy to Use DOE's 
Laboratories for Research on Nuclear, Biological, and Chemical 
Detection and Response Technologies, [hyperlink, 
http://www.gao.gov/products/GAO-04-653 (Washington, D.C.: May 24, 
2004). 

[3] National Academy of Public Administration, Department of Homeland 
Security Science and Technology Directorate: Developing Technology to 
Protect America (Washington D.C.: June 2009). 

[4] We did not review this draft strategy as part of our work on DHS 
R&D efforts.

[5] GAO, DHS Research and Development: Science and Technology 
Directorate's Test and Evaluation and Reorganization Efforts, 
[hyperlink, http://www.gao.gov/products/GAO-12-239T, (Washington, 
D.C.: Nov. 17, 2011).

[6] We did not assess the effectiveness of S&T's strategic planning 
process or reorganization as part of this review.

[7] Fragmentation occurs when more than one federal agency (or more 
than one organization within an agency) is involved in the same broad 
area of national interest. Overlap occurs when programs have similar 
goals, devise similar strategies and activities to achieve those 
goals, or target similar users. Duplication occurs when two or more 
agencies or programs are engaged in the same activities or provide the 
same services to the same beneficiaries.

[8] Budget authority is authority provided by federal law to enter 
into financial obligations that will result in immediate or future 
outlays involving federal government funds. 

[9] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/ AIMD-00-21.3.1 
(Washington, D.C.: Nov. 1999). 

[10] This was the total number of DHS contract actions taken from 
fiscal years 2007 through 2011. 

[11] GAO, 2012 Annual Report: Opportunities to Reduce Duplication, 
Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, 
[hyperlink, http://www.gao.gov/products/GAO-12-342SP (Washington, 
D.C.: Feb. 28, 2012); Follow-up on 2011 Report: Status of Actions 
Taken to Reduce Duplication, Overlap, and Fragmentation, Save Tax 
Dollars, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-12-453SP (Washington, D.C.: Feb. 28, 
2012); Employment for People with Disabilities: Little Is Known about 
the Effectiveness of Fragmented and Overlapping Programs, [hyperlink, 
http://www.gao.gov/products/GAO-12-677 (Washington, D.C.: June 29, 
2012); and Justice Grant Programs: DOJ Should Do More to Reduce the 
Risk of Unnecessary Duplication and Enhance Program Assessment, 
[hyperlink, http://www.gao.gov/products/GAO-12-517 (Washington, D.C.: 
July 12, 2012).

[12] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1.

[13] GAO, Results-Oriented Government: Practices That Can Help Enhance 
and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15 (Washington, D.C.: Oct. 21, 
2005); Cybersecurity: Key Challenges Need to Be Addressed to Improve 
Research and Development, [hyperlink, http://www.gao.gov/products/GAO-
10-466 (Washington, D.C.: June 3, 2010) and Homeland Security: DHS 
Needs a Strategy to Use DOE's Laboratories for Research on Nuclear, 
Biological, and Chemical Detection and Response Technologies, 
[hyperlink, http://www.gao.gov/products/GAO-04-653 (Washington, D.C.: 
May 24, 2004).

[14] OMB Circular No. A-11 Section 84.4. This definition includes 
administrative expenses for R&D, but excludes physical assets for R&D 
(such as R&D equipment and facilities), routine testing, quality 
control mapping, collection of general-purpose statistics, 
experimental production, routine monitoring and evaluation of an 
operational program and the training of scientific and technical 
personnel.

[15] OMB Circular No. A-11 Section 84 Character Classification 
(Schedule C) (2011). OMB has used these or similar categories in its 
collection of R&D data since 1949 (OMB, Fiscal Year 2013 Analytical 
Perspectives, 2013 Budget of the U.S. Government, pg. 368).

[16] GAO, Budget Account Structure: A Descriptive Overview, 
[hyperlink, http://www.gao.gov/products/GAO/GAO/AIMD-95-179 
(Washington, D.C.: Sept 18, 1995). 

[17] GAO has reported in the past that using object class data is not 
reliable because the categories are not mutually exclusive. GAO, 
Budget Object Classification: Origins and Recent Trends, [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-94-147 (Washington, D.C.: Sept 
13, 1994). Although OMB defines a separate category for R&D contracts 
(25.5), there is some overlap with the Advisory Services category 
(25.1). OMB object class 25.1 for advisory and assistance services is 
not exclusive to R&D and can be used for other types of services. 

[18] The other agencies conducting homeland security R&D included the 
Departments of Agriculture, Commerce, Defense, Energy, and Health and 
Human Services; the National Aeronautical and Space Administration; 
the Environmental Protection Agency; and the National Science 
Foundation. 

[19] Because outlays are payments to liquidate obligations, they may 
not occur in the same fiscal year as the budget authority under which 
the obligation was made. As a result, outlays generally do not equal 
budget authority in any given fiscal year. In addition, for the 
purpose of this report, we do not include outlays or budget authority 
for R&D facilities.

[20] Pub. L. No. 107-296, § 302, 116 Stat. 2135, 2163-64 (codified as 
amended at 6 U.S.C. § 182).

[21] These divisions are the Borders and Maritime Division, Chemical/ 
Biological Defense Division, Cyber Security Division, Explosives 
Division, Human Factors/ Behavioral Sciences Division, and the 
Infrastructure Protection and Disaster Management Division. In 
addition, S&T's First Responder Group (FRG) identifies, validates, and 
facilitates the fulfillment of first responder requirements through 
the use of existing and emerging technologies, knowledge products, and 
the development of technical standards, according to S&T FRG officials. 

[22] DNDO was established by National Security Presidential Directive 
43 - Homeland Security Presidential Directive 14 and the Security and 
Accountability for Every Port Act of 2006 (SAFE Port Act). Pub. L. No. 
109-347, § 501(a), 120 Stat. 1884, 1932 (codified at 6 U.S.C. § 591). 
When the Homeland Security Act of 2002 transferred Coast Guard to the 
newly established DHS, it provided that the Coast Guard is to be 
maintained as a distinct entity within the department and that the 
authorities, functions, and capabilities of the Coast Guard to perform 
its missions are to be maintained intact. Pub. L. No. 107-296, § 888, 
116 Stat. 2135, 2249 (codified at 6 U.S.C. § 468). 

[23] Pub. L. No. 109-347, § 501(a), 120 Stat. 1884, 1932 (2006) 
(codified at 6 U.S.C. § 592). 

[24] Pub. L. No. 111-139, § 21, 124 Stat. 29 (2010), 31 U.S.C. § 712 
Note. 

[25] See GAO, Opportunities to Reduce Potential Duplication in 
Government Programs, Save Tax Dollars, and Enhance Revenue, 
[hyperlink, http://www.gao.gov/products/GAO-11-318SP (Washington, 
D.C.: March 1, 2011) and [hyperlink, http://www.gao.gov/products/GAO-
12-342SP. 

[26] This figure excludes reimbursements from DNDO and the Coast Guard 
to S&T. 

[27] We analyzed and identified DHS R&D contracts in FPDS-NG 
categorized as basic research, applied research and exploratory 
development, and advanced development.

[28] DHS provided data on obligations to DOE national laboratories.

[29] DNDO budget officials told us that they accounted for their R&D 
spending in the object class codes of Schedule O of MAX A-11, but did 
not enter it into Schedule C of MAX. OMB reports the R&D budget 
authority and outlays from Schedule C. 

[30] DNDO's R&D budget authority for fiscal year 2011 does not include 
the funding for the DNDO Transformational and Applied Research (TAR) 
Programs because the TAR program had been proposed to be transferred 
to S&T, but the Department has since reexamined that position and TAR 
has remained in DNDO, as reflected in the fiscal year 2012 and 2013 
budgets.

[31] GAO, Defense Acquisitions: DOD's Research and Development Budget 
Requests to Congress Do Not Provide Consistent, Complete, and Clear 
Information. [hyperlink, http://www.gao.gov/products/GAO-07-1058 
(Washington, D.C.: Sept. 5, 2007). 

[32] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1.

[33] GAO, Results-Oriented Government: Practices That Can Help Enhance 
and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15 (Washington, D.C.: Oct. 21, 2005).

[34] DOD FMR, DoD 7000.14-R, Volume 2B, Chapter 5.

[35] NASA Procedural Requirements: NASA Research and Technology 
Program and Project Management Requirements. NPR 7120.8 (Effective 
Date February, 05, 2008).

[36] GAO, Department of Homeland Security: Progress and Continuing 
Concerns with Acquisition Management, [hyperlink, 
http://www.gao.gov/products/GAO-08-1164T, (Washington, D.C.: Sept. 17, 
2008), and Department of Homeland Security: Assessments of Selected 
Complex Acquisitions, [hyperlink, http://www.gao.gov/products/GAO-10-
588SP (Washington, D.C.: June 30, 2010).

[37] AMD 102 defines policy and provides guidance for managing and 
tracking DHS's acquisition programs. 

[38] 6 U.S.C. § 182.

[39] The Secure Transit Corridors will allow Customs Trade Partners 
Against Terrorism (C-TPAT) Tier III members with supply chain routes 
originating in Mexico or Canada. The C-TPAT is part of CBP's approach 
for overseeing the security of containerized cargo and the flow of 
international goods by developing a voluntary antiterrorism 
partnership with importers; customs brokers; air, sea, and land 
carriers; and other logistics service providers such as freight 
consolidators and nonvessel common carriers. Tier III members receive 
certain program benefits, such as expedited release of cargo in U.S. 
ports, upon validation that members demonstrate sustained commitment 
to maintaining security measures and supply chain security practices. 

[40] We did not receive information on when S&T planned to complete 
those R&D strategies.

[41] IPT areas were border security, cargo security, chemical/ 
biological defense, cyber security, counter improvised explosive 
device (IED), transportation security, incident management, 
infrastructure protection, information sharing/management, 
interoperability, maritime security, and people screening.

[42] We interviewed directors of divisions responsible for 
coordinating R&D activities throughout the department. These included 
Borders and Maritime Division, Chemical and Biological Division, Cyber 
Security Division, Explosives Division, Human Factors/ Behavioral 
Sciences Division, and Infrastructure Protection Division.

[43] ASOA works with the Under Secretary for Management to aid the 
components in developing high-fidelity, testable operational 
requirements for their acquisitions; aid in executing an analysis of 
alternatives to ensure that the most appropriate technical approach is 
taken; and partner with the components throughout an acquisition so 
that user needs are translated into real capabilities that can be 
validated upon delivery and deployed without delay.

[44] In some cases, contracts were initially awarded prior to 2007 but 
had contract actions taken--whether changes to contracting officials, 
extended period of performance, changes to tasks requested, or other 
modifications--during fiscal years 2007 through 2012. These 
modifications to initial contracts were included in our analysis. 

[45] The Coast Guard, OHA, and DHS were unable to provide 3 contracts 
that we requested.

[46] We also examined about 1,000 task orders sent to the national 
laboratories by DHS components, but the data did not include 
sufficient detail to use for this analysis. 

[47] The conference report accompanying the fiscal year 2006 DHS 
appropriations act provided that certain funding was for consolidating 
all of DHS's R&D efforts except the Coast Guard's R&D efforts into 
S&T. H. Rep. No. 109-241, at 82 (2005). That consolidation took place 
in 2006. 

[48] [hyperlink, http://www.gao.gov/products/GAO-12-342SP.

[49] Pub. L. No. 107-296, § 309, 116 Stat. 2135, 2172 (2002) (codified 
at 6 U.S.C. § 189).

[50] We received obligations data for fiscal year 2010 and 2011; 
funding data for fiscal year 2012, and projected funding data for 
fiscal year 2013.

[51] GAO, Homeland Security: DHS Needs a Strategy to Use DOE's 
Laboratories for Research on Nuclear, Biological, and Chemical 
Detection and Response Technologies, [hyperlink, 
http://www.gao.gov/products/GAO-04-653 (Washington, D.C.: May 24, 2004).

[52] GAO, Cybersecurity: Key Challenges Need to Be Addressed to 
Improve Research and Development, [hyperlink, 
http://www.gao.gov/products/GAO-10-466 (Washington, D.C.: June 3, 2010).

[53] The Networking and Information Technology Research and 
Development Subcommittee is a multiagency coordination body 
responsible for providing leadership in coordinating cybersecurity R&D.

[54] [hyperlink, http://www.gao.gov/products/GAO-06-15.

[55] The Decision Support Tool collects data from existing data 
systems, including information technology, capital investment data and 
out-year planning and budget data from all component agencies' data 
systems in order to centralize and standardize the management of 
resources. This includes information technology data from the Next 
Generation Periodic Reporting System, capital investment planning data 
from the Investment Management System, and financial data from the 
Future Years Homeland Security Program. The Future Years Homeland 
Security Program provides a summary and breakdown of DHS program 
resources over a 5-year period, including resource alignment by goals, 
component appropriations, and component programs, as well as program 
descriptions, milestones, performance measures, and targets. 

[56] GAO, Department of Homeland Security: Continued Progress Made 
Improving and Integrating Management Areas, but More Work Remains, 
[hyperlink, http://www.gao.gov/products/GAO-12-365T (Washington, D.C. 
Mar. 1, 2012). 

[57] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1 
(Washington, D.C.: Nov. 1999).

[58] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1 
(11/99) and Results-Oriented Government: Practices That Can Help 
Enhance and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15 (Washington, D.C.: Oct. 21, 2005).

[59] We did not interview officials responsible for the one contract 
in our sample issued by the Coast Guard, because they were unable to 
locate the contract.

[60] 2012 Annual Report: Opportunities to Reduce Duplication, Overlap 
and Fragmentation, Achieve Savings, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-12-342SP (Washington, D.C.: Feb. 28, 
2012); Follow-up on 2011 Report: Status of Actions Taken to Reduce 
Duplication, Overlap, and Fragmentation, Save Tax Dollars, and Enhance 
Revenue, [hyperlink, http://www.gao.gov/products/GAO-12-453SP 
(Washington, D.C.: Feb. 28, 2012); Employment for People with 
Disabilities: Little Is Known about the Effectiveness of Fragmented 
and Overlapping Programs, [hyperlink, http://www.gao.gov/products/GAO-
12-677 (Washington, D.C.: June 29, 2012); Justice Grant Programs: DOJ 
Should Do More to Reduce the Risk of Unnecessary Duplication and 
Enhance Program Assessment, [hyperlink, 
http://www.gao.gov/products/GAO-12-517 (Washington, D.C.: July 12, 
2012); [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1 
(11/99); and [hyperlink, http://www.gao.gov/products/GAO-06-15.

[End of section] 

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