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Highlights

The Homeland Security Act of 2002 authorized the Department of Homeland Security (DHS) to establish a pilot program for the use of acquisition agreements known as "other transactions." Because they are exempt from many of the requirements that apply to government contracts, other transactions can be useful in acquiring cutting-edge technologies from entities that traditionally have declined to do business with the government. The act requires GAO to report to Congress on the use of other transactions by DHS. To fulfill this obligation, GAO (1) determined if DHS has developed policies and established a workforce to manage other transactions effectively and (2) evaluated how effectively DHS has used its other transactions authority to attract nontraditional government contractors.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Directorate of Science and Technology To promote the efficient and effective use by DHS of its other transactions authority to meet its mission needs, the Secretary of Homeland Security should direct the Under Secretary for Management and the Under Secretary for Science and Technology to establish guidance on when it is appropriate to include audit provisions in other transactions agreements.
Closed - Implemented
On May 22, 2008, DHS's Office of Procurement Operations issued Procurement Operating Procedure (POP) #311, which establishes procedures for preparing Other Transactions for Prototypes. POP #311 included an Other Transaction Guidebook developed by DHS. The guidebook directs other transaction contracting officers (OTCOs) to include audit access clauses in an other transaction agreement when amounts generated from the awardee's financial or cost records are relied upon as the basis of payment. The guidance also provides direction on when to include audit access clauses for key participants. Finally, the guidance specifies circumstances in which the Defense Contract Audit Agency or an Independent Public Accountant should be used to perform audits on participants in an other transaction agreement. The action taken by DHS addresses GAO's recommendation to establish guidance on when it is appropriate to include audit provisions in other transaction agreements.
Directorate of Management To promote the efficient and effective use by DHS of its other transactions authority to meet its mission needs, the Secretary of Homeland Security should direct the Under Secretary for Management and the Under Secretary for Science and Technology to establish guidance on when it is appropriate to include audit provisions in other transactions agreements.
Closed - Implemented
On August 16, 2005, DHS's Chief Procurement Office issued a guidebook for use by DHS contracting officers, program managers, and other staff when utilizing the Other Transaction procurement authority. This guidebook, "Other Transactions for Prototype Projects," includes instructions on when DHS must include audit requirements in its other transaction agreements. DHS's provision of this guidance addresses our recommendation that DHS establish guidance on when it is appropriate to include audit provisions in its other transaction agreements.
Directorate of Science and Technology To promote the efficient and effective use by DHS of its other transactions authority to meet its mission needs, the Secretary of Homeland Security should direct the Under Secretary for Management and the Under Secretary for Science and Technology to develop a training program for DHS staff in the use of other transactions to help ensure the appropriate use of this authority.
Closed - Implemented
DHS has developed a training program for the use of other transaction authority. All other transaction contracting officers must successfully complete the course prior to receiving a warrant for other transaction agreements. The course includes prototype projects under other transaction agreements. Additionally, the course examines topics including intellectual property rights, the acquisition of property, and foreign access to technology under other transaction agreements. The training provided by DHS addresses GAO's recommendation to develop a training program for DHS staff on the use of other transactions to help ensure the appropriate use of this authority.
Directorate of Management To promote the efficient and effective use by DHS of its other transactions authority to meet its mission needs, the Secretary of Homeland Security should direct the Under Secretary for Management and the Under Secretary for Science and Technology to develop a training program for DHS staff in the use of other transactions to help ensure the appropriate use of this authority.
Closed - Implemented
DHS has developed a training program for the use of other transaction authority. All other transaction contracting officers must successfully complete the course prior to receiving a warrant for other transaction agreements. The course covers prototype project and assistance other transaction agreements. Additionally, the course examines topics including intellectual property rights, the acquisition of property, and foreign access to technology under other transaction agreements. The training provided by DHS meets GAO's recommendation to develop a training program for DHS staff in the use of other transactions to help ensure the appropriate use of this authority.
Directorate of Science and Technology To promote the efficient and effective use by DHS of its other transactions authority to meet its mission needs, the Secretary of Homeland Security should direct the Under Secretary for Management and the Under Secretary for Science and Technology to capture knowledge obtained during the acquisition process for use in planning and implementing future other transactions projects.
Closed - Implemented
In response to this recommendation, DHS representatives told us there is a new draft guide for the use of Other Transaction Agreements (OTA) which includes guidance that project managers and contracting officers meet at the completion of an OTA to develop lessons learned for use in future projects. Representatives said the guidance states that highlights and recommendations from these assessments should be documented and copies provided to the project manager maintained in the file. In addition, suggestions for revising agreement articles or terms and conditions should be maintained in an automated library for review and consideration in future projects. The department has not yet finalized this guidance and DHS representatives said they will provide a copy to GAO when it is final. Previously, DHS contracting representatives stated that they are applying lessons learned through changing policies and practices. For example, the guidance issued by the Office of Procurement Operations in May, 2008 incorporated lessons learned. However, they had not developed a formal process to capture knowledge obtained from using other transaction authority. Other transaction contracting officers within the Science and Technology Directorate share acquisition knowledge on an informal basis, for example, in discussions at staff meetings.
Directorate of Management To promote the efficient and effective use by DHS of its other transactions authority to meet its mission needs, the Secretary of Homeland Security should direct the Under Secretary for Management and the Under Secretary for Science and Technology to capture knowledge obtained during the acquisition process for use in planning and implementing future other transactions projects.
Closed - Implemented
In response to this recommendation, DHS representatives told us there is a new draft guide for the use of Other Transaction Agreements (OTA) which includes guidance that project managers and contracting officers meet at the completion of an OTA to develop lessons learned for use in future projects. Officials said the guidance states that highlights and recommendations from these assessments should be documented and copies provided to the project manager maintained in the file. In addition, suggestions for revising agreement articles or terms and conditions should be maintained in an automated library for review and consideration in future projects. The department has not yet finalized this guidance and DHS representatives said they will provide a copy to GAO when it is final.

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