GAO report calls for stronger controls on Department of Homeland Security major acquisitions

WASHINGTON — The Department of Homeland Security (DHS) must strengthen its controls over major acquisitions or risk billions of dollars in cost overruns, according to a report issued Wednesday at the request of Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman, ID-Conn., Ranking Member Susan Collins, R-Maine, Senator Tom Carper, D-Del., and Rep. Mike McCaul, R-Texas.   

The report by the Government Accountability Office (GAO) found that investments are often hampered by, unreliable cost estimates, workforce shortfalls in key management positions, funding instability, and insufficient data to track performance of  investments. GAO concluded that without greater discipline, DHS will likely continue to pay more than expected for less capability than promised, which will ultimately hinder DHS’s day-to-day operations and its ability to execute its mission. GAO does, though, credit DHS with undertaking a variety of initiatives to address acquisition challenges. The report of 77 major acquisitions – each worth over $300 million in total lifecycle costs – was conducted over the course of a year.

Carper said: “Every agency across the federal government has a responsibility to the American taxpayer to develop and employ sound acquisition management policies.  While the Department of Homeland Security (DHS) has made some important and necessary progress in this area, today’s report reveals that that the department has struggled to consistently follow its own rules, resulting in cost overruns, schedule delays, and limited oversight. We must do better.  With our federal debt and deficit at record highs, it is imperative that DHS and all federal agencies better manage the billions of dollars in acquisitions they make each year. As Chairman of the Subcommittee on Federal Financial Management, I will continue to work with Secretary Napolitano to ensure the department has the resources and tools it needs to adopt a more thorough and disciplined approach for managing its investments, and ultimately, carrying out its mission to secure our nation.”

Lieberman said: “The lesson from this report is that management matters.  DHS expects to spend at least $167 billion on systems to protect the border, screen travelers, facilitate trade, enhance cybersecurity, and improve disaster response.   The Department must implement strong internal controls so that planning for these investments is careful, and oversight is stringent.  The good news is that DHS is already taking action to address the concerns that GAO has identified.  Now Congress needs to back up DHS in its efforts.”

Collins said: “Ten years after its creation, DHS continues to mismanage major procurements.  Many are over budget, behind schedule, or fall short on expected deliverables, putting the $167 billion that DHS plans to spend over time for its major acquisition programs at unacceptable risk.  Taxpayers are getting cheated by these failures – aggressive department-wide acquisition management must be a priority instead of an afterthought.”

McCaul said: “Billions of taxpayer dollars have been continually put at risk and multiple security programs do not fully meet DHS needs because Department management does not hold its acquisition programs accountable. These issues could result in two options: fewer resources to protect our homeland or bankrolling these failures on the backs of future generations.  Neither of these options is acceptable.”

DHS has reported that it is investing more than $18 billion in its acquisition programs in FY 2012.  DHS’s acquisition efforts have been on GAO’s list of programs or agencies at high risk of mismanagement since 2005.  

 GAO also found that:

  • Of 71 programs examined, 42 had experienced cost growth or schedule slips.
  • Projected costs for 16 of DHS’s acquisition programs increased from $19.7 billion in 2008 to $52.2 billion in 2011 – an increase of 166 percent.
  • Most DHS acquisitions lack reliable cost estimates.
  • Almost all program managers reported challenges related to funding instability, workforce shortages, or changes to requirements following the design and development phases.
  • DHS’s acquisition policies embody management practices that could mitigate program risks. However, GAO could identify only four acquisitions that were supported by all the documentation required by those policies.
  • DHS has introduced a number of initiatives to improve acquisition management, but significant work remains to implement these initiatives in order for them to be effective.

 The report can be viewed by following this link: