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Highlights

In fiscal year 2005, the federal government spent nearly $117 billion on capital investments intended to yield long-term benefits for its operations. Effective capital planning ensures that the sizable investments made by federal agencies result in the most efficient return to taxpayers. Accordingly, GAO evaluated (1) how well selected entities followed the planning phase principles of GAO's Executive Guide and the Office of Management and Budget's (OMB) Capital Programming Guide, (2) OMB's actions to encourage all agencies to conform with capital planning principles, and (3) what capital planning information is received by or would be useful to congressional decision makers. Based on missions, asset types, and capital spending, we selected three entities to review within the Departments of Energy (DOE) and Homeland Security (DHS).

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Recommendations

Matter for Congressional Consideration

Matter Status Comments
To ensure that it is receiving the capital planning information it needs to make informed decisions, Congress may wish to require agencies to develop comprehensive, long-term capital plans and submit them for congressional review.
Closed - Not Implemented
As of February 2012, Congress has not issued such a requirement and no bills are pending.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Energy The Secretary of Energy should ensure that comprehensive alternatives evaluations of capital investments, including consideration of noncapital alternatives as appropriate, are conducted and discussed in agency planning documents.
Closed - Not Implemented
Although DOE concurred with our recommendation to undertake comprehensive alternatives evaluation, in comments on our draft report DOE stated that by following DOE Order 413.3A, they believe they have met the intent of OMB guidance.
Bureau of Customs and Border Protection The Secretary of Homeland Security should direct the Commissioner of CBP to ensure that comprehensive alternatives evaluations of capital investments, including consideration of noncapital alternatives as appropriate, are conducted and discussed in agency planning documents.
Closed - Implemented
Acquisition Directive 102-01 requires analysis to identify the alternatives for providing the desired capability and to develop multiple products. Directive 102-01 is in the last step of the clearance process to prepare the policy document for the Under Secretary for Management's (USM) signature. The USM has already reviewed it for content, so a signed version is expected by the end of February. On 5/26/10 via email, DHS provided GAO with the final Acquisition Directive 102-01, which requires analysis to identify the alternatives for providing the desired capability and to develop multiple products including a life-cycle cost estimate and an integrated logistics support plan. In addition, the directive requires program managers to present an Operational Requirements Document selecting the best of the various alternative options based on a comparison of capability, cost and schedule parameters.
Bureau of Customs and Border Protection The Secretary of Homeland Security should direct the Commissioner of CBP to require the development of criteria to rank and select capital projects.
Closed - Implemented
CBP established an Investment Review Council effective 12/12/07. One of the responsibilities and activities of this council is to develop, review, evaluate, recommend, and employ selection criteria used to prioritize investments as well as to make investment recommendations based on comparisons and trade-offs among competing programs.
Bureau of Customs and Border Protection The Secretary of Homeland Security should direct the Commissioner of CBP to lower the dollar amount of the review threshold for non-information technology capital projects to ensure that all capital projects are linked to the agency's strategic goals and objectives and receive an appropriate level of review.
Closed - Implemented
Effective 12/12/07, all CBP investments fall within the purview of the investment management process overseen by CBP's Investment Review Council.
Bureau of Customs and Border Protection The Secretary of Homeland Security should direct the Commissioner of CBP to require the development of a single, agencywide, long-term capital plan to reflect all long-term capital investment decisions.
Closed - Implemented
On 12/5/07 CBP issued instructions for developing a 5-year Resource Allocation Plan. CBP teams organized by agency strategic goal are to develop an investment plan for the 5-year period needed to implement the new Strategic Plan, including cost estimates for each programmatic activity included in the plan.
Office of Management and Budget The Secretary of Homeland Security should finalize the Investment Review Process and its related guidance.
Closed - Implemented
DHS Acquisition Directive 102-01, effective January 20, 2010, requires analyses to identify the alternatives for providing a desired capability and to develop multiple products including a life-cycle cost estimate and an integrated logistics support plan. In addition, the directive requires program managers to present an Operational Requirements Document selecting the best of the various alternative options based on a comparison of capability, cost and schedule parameters. Furthermore, the directive created common acquisition standards and practices for capital assets, among other things, across all components and headquarters offices.
Department of Energy The Director of the Office of Management and Budget should instruct agencies to make their agencywide, long-term capital plans available to congressional decision makers.
Closed - Not Implemented
In comments on the report draft, OMB said that although there are benefits from OMB review of agency long-term capital plans on an as needed basis, it did not agree that all agencies should be required to submit long-term capital plans. It stated that a summary might be sufficient for the Congressional authorization process or justifications for the appropriate committees.
Department of Homeland Security Further, the Secretary of Energy should require the development of a single, agencywide, long-term capital plan to reflect all long term capital investment decisions.
Closed - Not Implemented
Acquisition Directive 102-01 requires analysis to identify the alternatives for providing the desired capability and to develop multiple products. Directive 102-01 is in the last step of the clearance process to prepare the policy document for the Under Secretary for Management's (USM) signature. The USM has already reviewed it for content, so a signed version is expected by the end of February. On 5/26/10 via email, DHS provided GAO with the final Acquisition Directive 102-01 (effective January 20, 2010), which requires analysis to identify the alternatives for providing the desired capability and to develop multiple products including a life-cycle cost estimate and an integrated logistics support plan. In addition, the directive requires program managers to present an Operational Requirements Document selecting the best of the various alternative options based on a comparison of capability, cost and schedule parameters. Furthermore, the directive created common acquisition standards and practices for capital assets, among other things, across all components and headquarters offices.
Department of Energy The Secretary of Homeland Security should also consider if similar changes need to be made at other DHS component agencies.
Closed - Implemented
Acquisition Directive 102-01 requires analysis to identify the alternatives for providing the desired capability and to develop multiple products. Directive 102-01 is in the last step of the clearance process to prepare the policy document for the Under Secretary for Management's (USM) signature. The USM has already reviewed it for content, so a signed version is expected by the end of February. On 5/26/10 via email, DHS provided GAO with the final Acquisition Directive 102-01 (effective January 20, 2010), which requires analyses to identify the alternatives for providing the desired capability and to develop multiple products including a life-cycle cost estimate and an integrated logistics support plan. In addition, the directive requires program managers to present an Operational Requirements Document selecting the best of the various alternative options based on a comparison of capability, cost and schedule parameters. Furthermore, the directive created common acquisition standards and practices for capital assets, among other things, across all components and headquarters offices.

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