DHS Contracts: Opportunities Exist to Improve Oversight and Monitoring of Urgent Noncompetitive Awards
Each year, the Department of Homeland Security acquires billions of dollars of goods and services through contracts awarded without competition. Competition helps ensure the government gets a good price.
Agencies can forgo competition if they have an urgent need, such as disaster response. But, they have to provide written documentation. If the original contract cost increases, officials have to justify it with revised documentation.
DHS components didn't always follow this process.
We recommended DHS clarify when components should revise this documentation to ensure appropriate oversight.
Canal debris in the Florida Keys following Hurricane Irma
What GAO Found
The Department of Homeland Security (DHS) acquires billions of dollars of goods and services each year through contracts awarded through limited or no competition. Competition is generally required for federal contract awards, which GAO has found helps the government determine a fair price. But, there are certain exceptions to competition requirements when justified by an urgent need. Spending on urgent contracts increased from $75 million in fiscal year 2016 to $1.3 billion in fiscal year 2020 due to contracts awarded in response to COVID-19, hurricanes, and other needs. Fiscal year 2020 saw the largest increase in DHS's obligations on urgent awards due to the COVID-19 response (see figure).
COVID-19 Drove a Large Increase in Urgent Noncompetitive Obligations in Fiscal Year 2020
All 18 urgent awards GAO reviewed from selected components justified forgoing competition due to unexpected events, such as natural disasters or bid protests. However, across the contracts GAO reviewed, DHS did not always revise justifications after significant increases in contract value. For example, a U.S. Customs and Border Protection order for soft-sided facilities to shelter individuals arriving at the southwest border increased almost $20 million before a new written justification for using the urgency exception was drafted. Justifications provide an oversight mechanism for senior procurement officials. Taking action to better communicate when contracting officers should revise justifications and approvals after changes in contract value could help DHS ensure increases in value are transparent and in the best interest of the government.
GAO also found that some selected components did not have required appointment letters to document contracting officer representative (COR) responsibilities for monitoring performance across contracts GAO reviewed. Contracting officers are responsible for monitoring contractor performance but may delegate these responsibilities to CORs via appointment letters. Having these letters to clearly document monitoring responsibilities helps ensure that these activities are not overlooked and that contractors are held accountable to provide quality goods and services aligned with the terms of their contracts.
Why GAO Did This Study
Agencies are permitted to award contracts without full and open competition, such as when the unusual and compelling urgency of the agency's circumstances justify limiting competition. But past GAO work found problems with various agencies' use and oversight of contracts awarded citing the urgency exception to competition. GAO was asked to review this issue within DHS.
GAO examined (1) trends in DHS's use of the urgency exception from fiscal years 2016 through 2020; (2) selected DHS components' reasons for using this exception and whether their use of justifications and approvals met acquisition regulations and policies; and (3) whether selected DHS components monitored and documented the performance of urgent, noncompeted contracts. To do so, GAO analyzed federal procurement data; reviewed relevant policies and guidance; and analyzed a nongeneralizable sample of urgent DHS contracts and orders. The sample was selected based on factors such as total dollar value from seven selected DHS components with obligations awarded using the urgency exception. GAO also interviewed DHS officials.
GAO is making three recommendations, including that DHS take steps to ensure that components revise justifications and approvals when appropriate, and maintain COR appointment letters as required. DHS agreed with our recommendations.
Recommendations for Executive Action
|Department of Homeland Security||The Secretary of Homeland Security should ensure that the DHS Chief Procurement Officer take action, such as clearly communicating and enforcing correct procedures, to ensure officials responsible for entering data into FPDS accurately enter information on noncompetitively awarded contracts. (Recommendation 1)||
DHS agreed with our recommendation, and in June 2022 issued DHS Acquisition Alert 22-11, effective upon issuance. The Acquisition Alert impressed upon the DHS components the requirement to ensure competition information is accurately reported to FPDS, and provided several specific examples of how to properly code certain awards in FPDS. Additionally, the Acquisition Alert includes a reminder that Acquisition Policy and Legislation continues to offer comprehensive FPDS training to components. These steps should help DHS ensure that it has quality information on the full extent of its use of noncompetitive awards to inform procurement policy decision and facilitate congressional oversight.
|Department of Homeland Security||The Secretary of Homeland Security should ensure that the DHS Chief Procurement Officer take action to better communicate and enforce department guidance to revise justifications and obtain approvals following certain post-award modifications to urgent noncompetitive contracts. (Recommendation 2)||
DHS agreed with our recommendation, and in September 2022 issued an update to the Homeland Security Acquisition Manual and the DHS Justification and Approval for Other Than Full and Open Competition Guide. The changes provide clearer instruction to the DHS acquisition workforce on when justifications must be revised and prepared pre-and post-award, as well as the requisite reviews and approvals for such justifications. For example, the change instructs contracting officers to consult legal counsel for post-award modifications that increase the contract value by greater than twenty percent to determine if the modification makes a material change to the contract, and that the evidence of the legal review and determination must be included in the contract file. These changes should help ensure there is a mechanism for communicating changes about and conducting oversight of urgent awards, and could help DHS ensure increases in contract value are transparent.
|Department of Homeland Security||The Secretary of Homeland Security should ensure that the DHS Chief Procurement Officer take action, such as clearly communicating and enforcing existing requirements, to ensure contracting officials maintain formal COR appointment letters in the contract file. (Recommendation 3)||
DHS agreed with our recommendation, and in June 2022, DHS issued DHS Acquisition Alert 22-11, effective upon issuance. The Acquisition Alert reminded contracting officials of the requirement to include the COR nomination, and maintain formal COR appointment letters in the contract files, as applicable. Additionally, DHS updated the Office of the Chief Procurement Officer oversight review checklist to include the COR appointment letter. These steps should help DHS ensure there is clear communication and enforcement of existing requirements for maintaining formal appointment letters that clearly identify delegated responsibilities for contract performance monitoring activities, and help contracting officials ensure that key monitoring activities are not overlooked.