DHS Lacks Adequate Controls for Interagency Contracting

Speed and convenience, rather than cost, often drive Department of Homeland Security decisions to use interagency contracting, according to a Government Accountability Office study requested by House and Senate homeland security committee members and released Wednesday.

The report, entitled, “Interagency Contracting: Improved Guidance, Planning and Oversight Would Enable the Department of Homeland Security to Address Risks,” found that in Fiscal year 2005, DHS spent $17.5 billion on contracted purchases, 37 percent of which was through other agencies’ contracts and contracting services. Yet GAO found that DHS lacks sufficient agency-wide guidance for use of interagency contracts and that DHS does not always consider contracting alternatives to ensure good value.

The report is the first of a series of reviews of DHS contracting practices being conducted by GAO at the request of Senate Homeland Security and Governmental Ranking Member Joe Lieberman, D-Conn., Oversight of Government Management Subcommittee Ranking Member Daniel Akaka, D-Hi., and House Homeland Security Committee Ranking Member Bennie G. Thompson, D-Miss., among others.

Senator Lieberman said: “As someone who is fighting in Congress to secure more scarce federal funding for port security, chemical security, grants to first responders, and all the other critical functions of DHS, I am frustrated by the inability of the department to make each dollar stretch as far as it can. It appears the Department routinely enters multi-million dollar interagency contracts without shopping around to see if there is a better deal, and without even keeping track of the millions of dollars of fees DHS is being charged by other agencies.”

Senator Akaka said: “Interagency contracts are a high risk game when agencies such as the Department of Homeland Security lack the controls and sufficient personnel to oversee the billions of dollars spent on contract goods and services. Although interagency contracts may offer economic benefits by leveraging federal purchasing power, the benefits may come at a risk, which is why we have asked GAO to engage in a wide-ranging reviewing of DHS contracting procedures.”

Congressman Thompson said: “The report validates what I have been saying for some time. The way that procurement operations are structured at the Department, the Chief Procurement Officer lacks the necessary authority and staffing resources to reign in the other procurement shops within this behemoth agency. Every wasted homeland security dollar is one more lost opportunity to make the nation more secure.”

The report documents specific weaknesses in DHS procurement oversight and use of interagency contracts:

The DHS Office of Procurement Officer has only five staff members assigned to department-wide oversight responsibilities for $17.5 billion in acquisitions.

Customs and Border Patrol placed orders totaling $51.7 million agreements without required reviews and without determining whether the agreements were still a good value for the agency.

The Office of Procurement Operations had difficulty locating contract files that GAO requested for review. When the files were located, GAO found that they lacked key documentation.

When CBP terminated an order placed with a General Service Administration schedule contractor due to lack of contractor performance in the amount of $1.3 million, CBP failed to refer the dispute to the GSA contracting officer and the government did not recover its costs.

DHS placed two orders worth $9 million and $45 million through a GSA contracting service provider with little evidence that DHS determined that the GSA vehicle was the best method for acquiring the needed services.

GAO also notes that the Secretary of DHS has not taken adequate action to ensure department-wide acquisition oversight and suggests that Congress should require the Secretary to report on efforts to provide the DHS Chief Procurement Officer with sufficient authority over procurement activities of all DHS components.

Upcoming GAO reports requested as part of this series will examine the reliance of DHS on contractors and DHS acquisitions of major systems.