GAO: DHS needs better control of interagency buys

The Homeland Security Department needs to make more judicious use of interagency contracts, according to a Government Accountability Office report.

The department spends billions of dollars through interagency contracts, taking advantage of the speed and convenience they offer, rather than running its own procurements, according to GAO.

But DHS officials have not set up the controls and oversight needed to ensure that the money is being well spent, the report states. For example, the department has no process for assessing the risks involved with using interagency contracts or for determining whether better alternatives exist.

DHS also does not systematically monitor its total spending on interagency contracts, or assess the outcomes of its use of this form of procurement, according to the report.

GAO notes that the department's acquisition oversight program has been hindered by a lack of authority and by limited resources because of procurement officials being diverted to help with crises at component agencies, such as the Federal Emergency Management Agency during Hurricane Katrina.

As of August, the DHS Office of the Chief Procurement Officer (OCPO) had just five people assigned to departmentwide oversight of $17.5 billion worth of acquisitions, according to GAO.

The GAO report comes several months after a separate report by the House Government Reform Committee highlighted 32 DHS contracts worth $34.3 billion that it said involved “significant overcharges, wasteful spending or mismanagement.”

At the time, Elaine Duke, the DHS’ chief procurement officer, told the committee that at least some of the problems could be attributed to the insufficient number of employees trained to manage the procurement process, and that she had requested 200 more procurement positions in the DHS fiscal 2008 budget.

DHS' acquisition workforce would benefit from more guidance, according to GAO. The department has issued specific guidance on managing risks associated with interagency agreements, which is DHS’ largest category of interagency contracting at $5 billion in fiscal 2005. But it has not provided specific guidance for other types of interagency contracting, such as the General Services Administration schedules and governmentwide acquisitions contracts, which accounted for almost $1.5 billion in DHS spending.

Auditors concluded that “some DHS users may have lacked expertise and could benefit from guidance and training in the use of these interagency contracts," the report states. "For example, we found that controls, such as the annual review of purchase agreement for discounts on purchases through the GSA schedules [required by the Federal Acquisition Regulation] were not in place.”

In addition to advising DHS to establish better guidance and oversight of the use of interagency contracts, the report recommends that Congress require the secretary to report on efforts to give the chief procurement officer with "sufficient authority over procurement activities at all [DHS] components.”

In its response, DHS said it has already made significant steps in line with the GAO’s recommendations, including putting the chief procurement officer in a key position to review critical DHS programs, boosting the OCPO staff by 25 people, and directing the chief procurement officer to report semi-annually on departmentwide progress in areas such as acquisition planning and DHS reliance on interagency contracts.