[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

ACQUISITION OVERSIGHT: HOW EFFECTIVELY IS
DHS SAFEGUARDING TAXPAYER DOLLARS?

=======================================================================

HEARING

BEFORE THE

SUBCOMMITTEE ON
OVERSIGHT AND
MANAGEMENT EFFICIENCY

OF THE

COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS

FIRST SESSION

__________

APRIL 22, 2015

__________

Serial No. 114-15

__________

Printed for the use of the Committee on Homeland Security

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Available via the World Wide Web: http://www.gpo.gov/fdsys/

__________

U.S. GOVERNMENT PUBLISHING OFFICE
94-890 PDF WASHINGTON : 2015

_______________________________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Publishing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
E-mail, gpo@custhelp.com.

COMMITTEE ON HOMELAND SECURITY

Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas Bennie G. Thompson, Mississippi
Peter T. King, New York Loretta Sanchez, California
Mike Rogers, Alabama Sheila Jackson Lee, Texas
Candice S. Miller, Michigan, Vice James R. Langevin, Rhode Island
Chair Brian Higgins, New York
Jeff Duncan, South Carolina Cedric L. Richmond, Louisiana
Tom Marino, Pennsylvania William R. Keating, Massachusetts
Patrick Meehan, Pennsylvania Donald M. Payne, Jr., New Jersey
Lou Barletta, Pennsylvania Filemon Vela, Texas
Scott Perry, Pennsylvania Bonnie Watson Coleman, New Jersey
Curt Clawson, Florida Kathleen M. Rice, New York
John Katko, New York Norma J. Torres, California
Will Hurd, Texas
Earl L. ``Buddy'' Carter, Georgia
Mark Walker, North Carolina
Barry Loudermilk, Georgia
Martha McSally, Arizona
John Ratcliffe, Texas
Brendan P. Shields, Staff Director
Joan V. O'Hara, General Counsel
Michael S. Twinchek, Chief Clerk
I. Lanier Avant, Minority Staff Director
------

SUBCOMMITTEE ON OVERSIGHT AND MANAGEMENT EFFICIENCY

Scott Perry, Pennsylvania, Chairman
Jeff Duncan, South Carolina Bonnie Watson Coleman, New Jersey
Curt Clawson, Florida Cedric L. Richmond, Louisiana
Earl L. ``Buddy'' Carter, Georgia Norma J. Torres, California
Barry Loudermilk, Georgia Bennie G. Thompson, Mississippi
Michael T. McCaul, Texas (ex (ex officio)
officio)
Ryan Consaul, Subcommittee Staff Director
Dennis Terry, Subcommittee Clerk
Vacancy, Minority Subcommittee Staff Director

C O N T E N T S

----------
Page

Statements

The Honorable Scott Perry, a Representative in Congress From the
State of Pennsylvania, and Chairman, Subcommittee on Oversight
and Management Efficiency:
Oral Statement................................................. 1
Prepared Statement............................................. 3
The Honorable Bonnie Watson Coleman, a Representative in Congress
From the State of New Jersey, and Ranking Member, Subcommittee
on Oversight and Management Efficiency:
Oral Statement................................................. 3
Prepared Statement............................................. 5
The Honorable Bennie G. Thompson, a Representative in Congress
From the State of Mississippi, and Ranking Member, Committee on
Homeland Security:
Prepared Statement............................................. 6

Witnesses

Ms. Michele Mackin, Director, Acquisition and Sourcing
Management, U.S. Government Accountability Office:
Oral Statement................................................. 7
Prepared Statement............................................. 9
Mr. Chip Fulghum, Acting Deputy Under Secretary for Management
and Chief Financial Officer, U.S. Department of Homeland
Security:
Oral Statement................................................. 16
Prepared Statement............................................. 18
Mr. Cedric J. Sims, Partner, Evermay Consulting Group:
Oral Statement................................................. 23
Prepared Statement............................................. 25

Appendix

Question From Ranking Member Bennie G. Thompson for Michele
Mackin......................................................... 43
Questions From Honorable Cedric Richmond for Michele Mackin...... 43
Questions From Honorable Norma Torres for Michele Mackin......... 44
Questions From Chairman Scott Perry for Chip Fulghum............. 44
Questions From Ranking Member Bennie G. Thompson for Chip Fulghum 45
Questions From Honorable Cedric Richmond for Chip Fulghum........ 45
Questions From Honorable Cedric Richmond for Cedric J. Sims...... 45
Question From Honorable Bonnie Watson Coleman for Cedric J. Sims. 45
Questions From Honorable Norma J. Torres for Cedric J. Sims...... 46

ACQUISITION OVERSIGHT: HOW EFFECTIVELY IS DHS SAFEGUARDING TAXPAYER
DOLLARS?

----------

Wednesday, April 22, 2015

U.S. House of Representatives,
Subcommittee on Oversight and
Management Efficiency,
Committee on Homeland Security,
Washington, DC.
The subcommittee met, pursuant to call, at 2:44 p.m., in
Room 311, Cannon House Office Building, Hon. Scott Perry
[Chairman of the subcommittee] presiding.
Present: Representatives Perry, Duncan, Clawson, Carter,
Watson Coleman, and Torres.
Mr. Perry. Good afternoon, everybody. The Committee on
Homeland Security, Subcommittee on Oversight and Management
Efficiency will come to order.
The purpose of this hearing is to determine if the
Department of Homeland Security, the DHS, is managing its major
acquisition programs effectively.
The Chairman now recognizes himself for an opening
statement.
The Department of Homeland Security, the DHS, spends
billions of taxpayer dollars each year on a variety of programs
intended to better secure the homeland, including systems to
secure the border, screen travelers, protect cyber
infrastructure, and respond to disasters, among other missions.
DHS' current major acquisition program ultimately may cost
taxpayers over $200 billion. Needless to say, strong
accountability and oversight is absolutely necessary to guard
against waste, fraud, and abuse.
Since its creation, DHS has had its share of acquisition
failures. Customs and Border Protection's Secure Border
Initiative network, SBInet, and the Coast Guard's Deepwater
Program remain models of how not to manage an acquisition
program. SBInet alone cost taxpayers over $1 billion, with few
results from that investment.
Since 2005, watchdogs at the Government Accountability
Office have had DHS' acquisition management on its high-risk
list. Despite steps taken by DHS to issue an acquisition policy
that reflects program management practices and create an office
focused on acquisition oversight, programs continue to put
taxpayer dollars at risk.
Most importantly, acquisition mismanagement also puts our
security at risk. Men and women on the front line securing our
borders, protecting our airports, and defending our shores will
need to wait longer for systems that may not fully meet their
operational needs. This is just simply unacceptable.
Several examples in a GAO report released today highlight
systems being delivered later than promised: CBP's integrated
fixed towers, over 6 years late; Coast Guard's long-range
surveillance aircraft, 9 years late; and its National Security
Cutter, 4 years late.
In addition, of seven programs that GAO reviewed, cost
estimates increased by 40 percent over what DHS originally
approved. As a result, DHS expects to spend almost $10 billion
more than they originally estimated on these programs.
GAO also found that DHS authorized programs to deploy
capabilities without operational testing, including three
programs managed by CBP and the Coast Guard. Having served as a
combat aviator in Iraq, I am incredulous that DHS expects its
personnel to use equipment that hasn't been field-tested, not
to mention the fact that I am sure we paid for testing. In
other instances, testing may have been done after key decisions
were made.
The bottom line is testing isn't about checking the box. It
is about ensuring that tools we give to front-line operators
actually work.
DHS must, simply must, do better oversight of its
acquisition programs. A GAO report issued last month showed
that DHS has an ad hoc approach for some of its oversight
efforts because of a lack of written roles and
responsibilities. DHS also has done a poor job over the years
of holding programs accountable to its acquisition policy. As
DHS Inspector General John Roth noted in our first hearing this
Congress, ``There aren't really any consequences for that
disobedience.''
Exactly 1 year ago today, Secretary Johnson announced his
Unity of Effort initiative to improve the execution of DHS
missions. Although DHS has created several new mechanisms to
discuss key decisions, it remains to be seen if these efforts
are leading to improved outcomes and better safeguarding of
taxpayer dollars.
Improving acquisition outcomes at DHS remains a priority
for this committee. Last Congress, the House passed the first-
ever bill that comprehensively reforms the DHS acquisition
process. The bill empowered senior DHS officials to hold
programs accountable, establish strong accountability for
programs with significant cost and schedule growth, and
required an effective strategy to inform DHS major purchases.
This legislation was praised by numerous stakeholders,
including the comptroller general, DHS inspector general,
Secretary Johnson, and industry groups.
As the committee re-engages acquisition legislation this
Congress, this hearing will provide areas on which to focus. I
certainly look forward to examining DHS' acquisition programs
and processes to better understand what must be done to fix
long-standing problems. Until these problems are resolved, we
can't be certain that billions that DHS spends will result in
better acquisition outcomes for the taxpayer and front-line
operators.
[The statement of Chairman Perry follows:]
Statement of Chairman Scott Perry
April 22, 2015
The Department of Homeland Security (DHS) spends billions of
taxpayer dollars each year on a variety of programs intended to better
secure the homeland, including systems to secure the border, screen
travelers, protect cyber infrastructure, and respond to disasters,
among other missions. DHS's current major acquisition programs
ultimately may cost taxpayers over $200 billion. Needless to say,
strong accountability and oversight is needed to guard against waste,
fraud, and abuse.
Since its creation, DHS has had its share of acquisition failures.
Customs and Border Protection's (CBP) Secure Border Initiative Network
(SBInet) and the Coast Guard's Deepwater program remain models of how
not to manage an acquisition program. SBInet alone cost taxpayers over
$1 billion with few results from that investment. Since 2005, watchdogs
at the Government Accountability Office (GAO) have had DHS's
acquisition management on its ``High-Risk List.'' Despite steps taken
by DHS to issue an acquisition policy that reflects program management
practices and create an office focused on acquisition oversight,
programs continue to put taxpayer dollars at risk.
Most importantly, acquisition mismanagement also puts our security
at risk. Men and women on the front lines securing our borders,
protecting our airports, and defending our shores will need to wait
longer for systems that may not fully meet their operational needs;
this is unacceptable. Several examples in a GAO report released today
highlight systems being delivered later than promised: CBP's Integrated
Fixed Towers, over 6 years late; Coast Guard's Long Range Surveillance
Aircraft, 9 years late; and its National Security Cutter, 4 years late.
In addition, of seven programs that GAO reviewed, cost estimates
increased by 40 percent over what DHS originally approved. As a result,
DHS expects to spend almost $10 billion more than they originally
estimated on these programs.
GAO also found that DHS authorized programs to deploy capabilities
without operational testing, including three programs managed by CBP
and the Coast Guard. Having served as a combat aviator in Iraq, I'm
incredulous that DHS expects its personnel to use equipment that hasn't
been field tested. In other instances, testing may have been done after
key decisions were made. Bottom line, testing isn't about checking the
box, it's about ensuring that the tools we give to front-line operators
actually work.
DHS must do better oversight of its acquisition programs. A GAO
report issued last month showed that DHS has an ad-hoc approach for
some of its oversight efforts because of a lack of written roles and
responsibilities. DHS also has done a poor job over the years of
holding programs accountable to its acquisition policy. As DHS
Inspector General John Roth noted in our first hearing this Congress,
``[there aren't] really any consequences for that disobedience.''
Exactly 1 year ago today, Secretary Johnson announced his Unity of
Effort initiative to improve the execution of DHS missions. Although
DHS has created several new mechanisms to discuss key decisions, it
remains to be seen if these efforts are leading to improved outcomes
and better safeguarding of taxpayer dollars.
Improving acquisition outcomes at DHS remains a priority for this
committee. Last Congress, the House passed the first-ever bill that
comprehensively reforms the DHS acquisition process. The bill empowered
senior DHS officials to hold programs accountable, established strong
accountability for programs with significant cost and schedule growth,
and required an effective strategy to inform DHS major purchases. This
legislation was praised by numerous stakeholders, including the
comptroller general, DHS inspector general, Secretary Johnson, and
industry groups. As the committee re-engages acquisition legislation
this Congress, this hearing will provide areas on which to focus. I
look forward to examining DHS's acquisition programs and processes to
better understand what must be done to fix long-standing problems.
Until these problems are fixed, we can't be certain that the billions
DHS spends will result in better acquisition outcomes for the taxpayer
and front-line operators.

Mr. Perry. The Chairman will now recognize the Ranking
Minority Member of the subcommittee, the gentlelady from New
Jersey, Mrs. Watson Coleman, for any statement she may have.
Mrs. Watson Coleman. Thank you very much, Mr. Chairman, and
thank you for holding this important hearing.
This is a very important discussion to improve the
efficiency of some of the Department of Homeland Security's
most essential operations.
In adopting the Acquisition Management Directive and by
creating the Office of Program Accountability and Risk
Management, the Department has taken constructive steps towards
utilizing the information derived from the acquisitions
program's own work to assess the program's readiness to move
through the successive stages of investment and capability
development.
At the same time, both of the recent GAO studies we will
discuss today have identified deficiencies in the compilation,
approval, and currency of acquisition program baselines at
DHS--a concern which dates back to the first edition of GAO's
DHS ``Quick Look,'' published in June 2010.
GAO's analysis related to last month's report on DHS
acquisition oversight found that, in the DHS master acquisition
oversight list from this fiscal year, 25 of 72 Level 1 or Level
2 acquisitions listed have received waivers from DHS reporting
requirements. In other words, 35 percent of the programs on the
list with life-cycle costs initially estimated at $300 million
or more have received waivers from requirements to update a
range of acquisition-related information, including cost
estimates.
To exercise our oversight responsibility, Members of the
subcommittee must understand the circumstances in which the
waivers for requirements the acquisition programs report on,
previously acknowledged as indicators of their progress. The
subcommittee has asked the Department to provide a May 2013
memorandum from the under secretary for management granting
these waivers, and it is concerning that we have just received
that memo, making it very difficult to thoroughly and
appropriately assess DHS guidance on the issue.
Furthermore, GAO's recent assessment of 22 of the
Department's costliest acquisition programs now underway finds
that 6 of these programs have not received approval of their
acquisition program baselines from DHS leadership, though
Department policy requires such. GAO additionally finds that,
despite the lack of fully approved baselines, these six
programs have spent a total of $5 billion as of GAO's review.
Of the 16 programs in the sample that GAO could assess against
the APBs, 2 met cost and schedule baselines as of the review.
Major system acquisitions at the Department of Homeland
Security spend billions of dollars each year and provide our
country's front-line operators with the capabilities they need
to achieve their critical missions. When a DHS acquisition
program falls short in terms of effectiveness or efficiency, it
crowds out investment in other high-priority missions.
I am aware that Chairman McCaul intends to introduce a bill
to reform DHS acquisition, similar to legislation that was
passed by the House in last Congress. Members on this side look
forward to working with you to help to develop and improve the
bill in this subcommittee.
I would like to focus on making sure this new legislation
reflects the strong preference on the part of Congress for DHS
leaders and program managers to collect and use knowledge
developed by program offices. This information reduces the risk
incurred and enhances the value DHS receives when the
Department makes major acquisition investments.
In addition, I believe that DHS acquisition reform
legislation should require that the Department show good cause
to an acquisition decision authority in any case when DHS
departs from best practices and knowledge-based acquisition
management.
I would like to thank the panel of witnesses for appearing
before the subcommittee today. I look forward to hearing their
perspectives on this proposal.
I am very interested in hearing from the Department of
Homeland Security. I am sure you will use this hearing as an
opportunity to outline for the committee how the Secretary's
Unity of Effort initiative will reverse the Department's
troubling effort.
I thank you very much for this opportunity, and I yield
back my time.
[The statement of Ranking Member Watson Coleman follows:]
Statement of Ranking Member Bonnie Watson Coleman
April 22, 2015
This is a very important discussion to improve the efficiency of
some of the Department of Homeland Security's most essential
operations.
In adopting the Acquisition Management Directive, and by creating
the Office of Program Accountability and Risk Management, the
Department of Homeland Security has taken constructive steps toward
utilizing the information derived from acquisition programs' own work
to assess the programs' readiness to move through successive stages of
investment and capability development.
At the same time, both of the recent GAO studies we'll discuss
today have identified deficiencies in the compilation, approval, and
currency of acquisition program baselines at DHS, a concern which dates
back to the first edition of GAO's DHS Quick Look, published in June
2010.
GAO's analysis related to last month's report on DHS Acquisition
Oversight found that in the DHS Master Acquisition Oversight List from
this fiscal year, 25 of 72 Level 1 or Level 2 acquisitions listed have
received waivers from DHS reporting requirements
In other words, 35 percent of the programs on the list with life-
cycle costs initially estimated at $300 million or more have received
waivers from requirements to update a range of acquisition-related
information, including their cost estimates.
To exercise our oversight responsibilities, Members of the
subcommittee must understand the circumstances in which the Department
waives requirements that acquisition programs report on previously-
acknowledged indicators of their progress.
The subcommittee has asked the Department to provide a May 2013
memorandum from the under secretary for management granting these
waivers--and it is concerning that the Department provided the memo to
the committee minutes before the start of the hearing, making it
difficult to thoroughly and appropriately assess DHS guidance on this
issue.
Furthermore, GAO's recent assessment of 22 of the Department's
costliest acquisition programs now underway finds that six of these
programs have not received approval of their Acquisition Program
Baselines (APBs) from DHS leadership, though Department policy requires
such approval.
GAO additionally finds that despite the lack of fully-approved
baselines, these six programs have spent a total of $5 billion as of
GAO's review. Of the 16 programs in the sample that GAO could assess
against APBs, two met cost and schedule baselines as of GAO's review.
Major system acquisitions at the Department of Homeland Security
spend billions of dollars each year, and provide our country's front-
line operators with the capabilities they need to achieve their
critical missions.
When a DHS acquisition program falls short in terms of
effectiveness or efficiency, it crowds-out investment in other high-
priority missions.
I am aware that Chairman McCaul intends to introduce a bill to
reform DHS acquisition, similar to legislation that passed the House
last Congress. Members on this side look forward to working with you to
develop and improve the bill in this subcommittee.
I'd like to focus on making sure this new legislation reflects a
strong preference on the part of Congress for DHS leaders and program
managers to collect and use knowledge developed by program offices.
This information reduces the risk incurred and enhances the value DHS
receives when the Department makes major acquisition investments.
In addition, I believe that DHS acquisition reform legislation
should require that the Department show good cause to an Acquisition
Decision Authority in any case when DHS departs from best practices in
knowledge-based acquisition management.
I would like to thank the panel of witnesses for appearing before
the subcommittee today, and I look forward to hearing their
perspectives on these proposals.
I am very interested in hearing from the Department of Homeland
Security's acting chief acquisition officer, Mr. Fulghum, who I hope
will use this hearing as an opportunity to outline for the subcommittee
how Secretary Johnson's Unity of Effort initiatives will reverse the
Department's troubling record of acquisition management challenges,
several of which I've outlined.
Additionally, I am eager to hear from GAO's Ms. Mackin, whose
experience in leading assessments of DHS acquisition activities will
enable her to focus on critical open recommendations to DHS, and offer
her perspective on how the Department could best prioritize and
implement open recommendations from GAO reviews.
I also look forward to hearing from Dr. Sims, whose combination of
experiences at the DHS component level in the Secret Service, at the
headquarters level as executive director of the Office of Program
Accountability and Risk Management, and in the private sector advising
DHS contractors will help this subcommittee as we look for ways to
tackle significant management concerns for DHS.
These concerns strain the DHS budget and threaten the Department's
operational effectiveness.

Mr. Perry. The Chairman thanks the Ranking Member.
Other Members of the subcommittee are reminded that opening
statements may be submitted for the record.
[The statement of Ranking Member Thompson follows:]
Statement of Ranking Member Bennie G. Thompson
April 22, 2015
I thank Acting Under Secretary Fulgum for serving as under
secretary for management, and I wish him well as he goes from wearing
multiple hats at DHS to hopefully just one. I am pleased that last
Thursday, the Senate confirmed Russell Deyo as DHS under secretary for
management--a position whose duties include service as the Department's
chief acquisition officer.
Last April, Secretary Johnson issued a ``Unity of Effort''
memorandum to the Department's senior leaders, expressing his
commitment to better linking DHS ``strategic objectives, budgeting,
acquisition decisions, operational planning, and mission execution.''
Agency management performance--including DHS acquisition
management--affects the Department's long-term financial
sustainability, DHS operators, and the American people's security.
Recently, the Government Accountability Office assessed DHS acquisition
management. GAO's assessment presents troubling evidence that even
though DHS has taken steps to improve performance, execution and
management of the Department's major acquisitions offer little evidence
of incorporating widely-acknowledged best practices.
In fiscal year 2014, DHS spent $10.7 billion--a bit more than one-
sixth of its total budget authority--on acquisition of systems with
life-cycle costs estimated at $300 million or more. These acquisitions
cost real money. We must ensure that each dollar is spent wisely, can
be accounted for, and advances the homeland security mission. The
Department's front-line operators depend on systems like Coast Guard
ships and helicopters to work when they go into harm's way.
The safety of the American people often depends on the Department's
ability to buy enough reliable technology--like baggage-screening
systems--that provides DHS with capabilities they need to accomplish
their critical missions. Assessing the progress of a major acquisition
program toward specific objectives by reviewing that program's
performance against its budget and schedule seems as much common sense
as a key insight from management science: But GAO has identified
deficiencies in the development and use of program baselines to manage
major DHS acquisitions. As Ranking Member Watson Coleman noted, GAO
could not even assess nearly a quarter of the major DHS acquisitions
selected for their sample, because there has never been a successful
completion of all of the reviews required by the Department's own
acquisition policies.
What is concerning is that in the absence of required procedures to
check the feasibility of these programs, GAO reports that six DHS
acquisitions have spent $5 billion to date. This raises several red
flags for me because I am too familiar with the Department's history of
throwing money at programs that have been unsuccessful. This is a cycle
that cannot continue.
I want to hear witnesses' best ideas about how Congress can
strengthen and deepen acquisition reforms pursued to date by DHS
management, so that major acquisitions will produce significantly
better results in terms of affordability and effectiveness. At the same
time, I would appreciate hearing from witnesses how DHS leaders can
better engage the innovation, efficiency, and competitiveness
exemplified every day in small and minority businesses.

Mr. Perry. We are pleased to have a distinguished panel of
witnesses before us today on this important topic.
Let me remind the witnesses that their entire written
statement will appear in the record. I will introduce each of
you first and then recognize you each for your testimony.
Ms. Michele Mackin--did I get that correct?
Ms. Mackin. Yes.
Mr. Perry [continuing]. Is a director at the U.S.
Government Accountability Office in the Acquisition and
Sourcing Management team. Ms. Mackin joined the GAO in 1988 as
an evaluator in the National Security and International Affairs
Division. Ms. Mackin has led complex reviews of Federal
contracting issues, including high-risk contract types, the
Coast Guard's Deepwater recapitalization project, and Navy
shipbuilding programs.
The Honorable Chip Fulghum is the acting deputy under
secretary for management, acting chief acquisition officer, as
well as the chief financial officer for the Department of
Homeland Security. Mr. Fulghum joined DHS in October 2012 as
its budget director. Prior to joining the Department, Mr.
Fulghum served for 28 years in the United States Air Force,
retiring with the rank of colonel. He is also a graduate of The
Citadel, the Military College of South Carolina.
Thank you for your service, sir.
Dr. Cedric Sims is a partner with the Evermay Consulting
Group. From 2010 until 2012, he served as the director of DHS'
Office of Program Accountability and Risk Management. Dr. Sims
also held other positions in the Department, including the
executive director of the Enterprise Management Business
Office. Dr. Sims holds a doctorate in engineering from Texas
A&M University.
Thank you.
Thank you all for being here today.
The Chairman now recognizes Ms. Mackin for her testimony.

STATEMENT OF MICHELE MACKIN, DIRECTOR, ACQUISITION AND SOURCING
MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

Ms. Mackin. Thank you, Mr. Chairman. Good afternoon,
Ranking Member Watson Coleman and Members of the subcommittee.
Thank you for having me here today to discuss DHS
acquisitions, an issue we have reported on for quite some time.
My statement today is based on two of our recent reports. One,
as was mentioned, was issued just last month, and the other is
being released today.
DHS buys a wide range of systems and technologies to meet
its many missions. In fact, the Department spends about $11
billion per year on its largest acquisitions, those estimated
to cost $300 million or more.
I will briefly touch on three issues today: First, how
these large programs are performing in terms of cost and
schedule; second, the status of testing; and, third, the
quality of information available to Congress and DHS on these
large programs.
To assess cost and schedule, we selected 22 major
acquisition programs. These included Customs and Border
Protection systems, TSA screening technologies, and Coast Guard
ships and aircraft, among others.
We found, as was mentioned, that six of these 22 programs
did not have Department-approved acquisition baselines. These
baselines are critical because they establish agreed-upon cost,
schedule, and performance targets. Without having approved
baselines, accountability is obscured, and neither we,
Congress, nor DHS can know if the programs are performing as
intended. This is an issue we have highlighted in our past
work, as well.
Of the remaining 16 programs in our review, we found that
14 had experienced schedule delays, and some also had increases
to their cost estimates. In fact, on average, these programs
had a 3\1/2\-year schedule delay and, in total, a $9.7 billion
increase in expected costs.
While each program has its own story, in general, we
identified the following reasons for this: Challenges in
meeting requirements, for example, due to technical
difficulties; funding shortfalls, where there is a gap,
sometimes quite significant, between what a program expects to
receive and what it actually receives in a given year; a
decision to pursue different or new capabilities after the
program has begun; and, for some programs, the initial cost or
schedule estimates simply weren't sound in the first place and
had to be revised.
In terms of the testing, 19 of the 22 programs we reviewed
had delivered some capabilities to end-users such as border
agents or airports screeners. Fifteen of these programs had
been operationally tested, and six had passed the tests. For
many of those that did not past the test, DHS' Office of Test
and Evaluation has recommended follow-on testing.
Also, in our review of 30 DHS test assessments, we found
that about a third did not clearly indicate whether all key
performance capabilities had been demonstrated. We recommended,
and DHS agreed, to reflect this in future test assessments.
Finally, regarding the quality of information, good data of
course is critical to sound decision making about acquisition
programs; however, we found problems with DHS' own system for
reporting acquisition information. Program managers are
supposed to enter certain information into this system, and
senior acquisition officials at the components are responsible
for validating it. But we found inaccuracies in cost estimates
and blank data fields for some important information, such as
expenditure amounts or key program milestones.
These issues call into question whether DHS management has
the information it needs for effective acquisition oversight.
Because this data feeds into DHS' reports to Congress, that
means Congress is not getting accurate and complete
information. DHS agreed with our recommendation to determine
how to hold programs and components accountable for entering
and validating the data in the system.
That completes my statement. Thank you very much. I will be
happy to answer questions at the appropriate time.
[The prepared statement of Ms. Mackin follows:]
Prepared Statement of Michele Mackin
April 22, 2015
Chairman Perry, Ranking Member Watson Coleman, and Members of the
subcommittee: Thank you for the opportunity to discuss acquisition
management at the Department of Homeland Security (DHS). Each year, DHS
invests billions of dollars in its major acquisition programs to help
execute its many critical missions. In fiscal year 2014 alone, DHS
planned to spend almost $11 billion on these acquisition programs, and
the Department expects it will ultimately invest more than $200 billion
in them. DHS and its underlying components are acquiring systems to
help secure the border, increase marine safety, screen travelers,
enhance cybersecurity, improve disaster response, and execute a wide
variety of other operations. Each of DHS's major acquisition programs
generally costs $300 million or more and can span many years. We have
reported that DHS's acquisition policy is generally sound, in that it
reflects key program management practices. Due to shortfalls in
executing the policy, however, we have highlighted DHS acquisition
management issues on our high-risk list and made numerous
recommendations to improve acquisition management practices.\1\ In
recent years, DHS has taken steps to improve acquisition management by
dedicating additional resources to oversight and documenting major
acquisition decisions in a more transparent and consistent manner.
However, many of our recommendations have not yet been implemented,
including that DHS ensure all major acquisition programs fully comply
with DHS acquisition policy.
---------------------------------------------------------------------------
\1\ GAO, High-Risk Series: An Update, GAO-05-207 (Washington, DC:
January 2005); Homeland Security Acquisitions: DHS Could Better Manage
Its Portfolio to Address Funding Gaps and Improve Communications with
Congress, GAO-14-332 (Washington, DC: Apr. 17, 2014). Also see, for
example, Homeland Security: DHS Requires More Disciplined Investment
Management to Help Meet Mission Needs, GAO-12-833 (Washington, DC:
Sept. 18, 2012).
---------------------------------------------------------------------------
My statement today draws from two recently completed reviews and
addresses: (1) The health of 22 DHS major acquisition programs and (2)
the underlying systems in place to oversee and manage such programs.\2\
For the first review, issued in April 2015, we assessed all 14 of DHS's
largest acquisition programs (with a life-cycle cost estimate of $1
billion or more) that were in the process of obtaining new capabilities
as of June 2014. To provide additional insight into factors that can
contribute to poor acquisition outcomes, we also included 8 other major
acquisition programs that we or DHS had identified as at risk of not
meeting their schedules, cost estimates, or capability requirements.
For all 22 programs, we reviewed acquisition documents required by DHS
policy, including test plans, and interviewed program managers and
headquarters acquisition management and test and evaluation officials.
We verified the cost and schedule data reported for these programs on
the basis of a data collection instrument and interviews with agency
officials, and we determined these data elements were sufficiently
reliable for our purposes. For the second review, issued in March 2015,
we assessed DHS policies and procedures and interviewed oversight and
acquisition officials from all nine DHS components that had at least
one of the Department's largest acquisition programs. From these
components, we selected a non-generalizable sample of nine major
programs for a more in-depth analysis of oversight activities and
reported program data. We also assessed the data reliability of Next
Generation Periodic Reporting System (nPRS) and determined that the
data were not sufficiently reliable for our purposes; therefore we used
these data only for illustrative purposes. More detailed information on
our scope and methodology can be found in the respective reports.
---------------------------------------------------------------------------
\2\ GAO, Homeland Security Acquisitions: Major Program Assessments
Reveal Actions Needed to Improve Accountability, GAO-15-171SP
(Washington, DC: Apr. 22, 2015) and Homeland Security Acquisitions: DHS
Should Better Define Oversight Roles and Improve Program Reporting to
Congress, GAO-15-292 (Washington, DC: Mar. 12, 2015).
---------------------------------------------------------------------------
We conducted the work on which this statement is based in
accordance with generally accepted Government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
background
DHS policies and processes for managing its major acquisition
programs are primarily set forth in Acquisition Management Directive
(MD) 102-01 and DHS Instruction Manual 102-01-001, Acquisition
Management Instruction/Guidebook. DHS's under secretary for management
(USM) is the Department's chief acquisition officer and, as such, is
responsible for managing the implementation of the Department's
acquisition policies.
DHS's deputy secretary and USM generally serve as the decision
authorities for the Department's largest acquisition programs: Those
with life-cycle cost estimates of $1 billion or greater. Component
Acquisition Executives--the most senior acquisition management
officials within each of DHS's component agencies--may be delegated
decision authority for major acquisition programs with cost estimates
between $300 million and $1 billion. The decision authority is
responsible for reviewing acquisition programs at a series of five
predetermined acquisition decision events to assess whether the program
is ready to proceed. See figure 1 for DHS acquisition life cycle and
acquisition decision events.

An important aspect of a decision event is the decision authority's
review and approval of key acquisition documents, including the program
baseline. This baseline is important because it represents the
agreement between the program manager, component head, and acquisition
decision authority as to how systems will perform, when they will be
delivered, and what they will cost. The acquisition decision authority
is supported by DHS's Acquisition Review Board, which reviews major
acquisition programs for proper management, oversight, accountability,
and alignment with the Department's strategic functions at acquisition
decision events and other meetings as needed. This board is chaired by
the acquisition decision authority and consists of individuals who
manage DHS's mission objectives, resources, and contracts.
The Office of Program Accountability and Risk Management (PARM) is
the lead body responsible for overseeing the acquisition process and
assessing the status of acquisition programs, although other DHS
offices also have oversight roles. Nearly all of DHS's program
management offices are located within 13 Department organizations,
including components such as the Transportation Security Administration
(TSA), U.S. Coast Guard, and U.S. Customs and Border Protection (CBP).
Within the components, program management offices are responsible for
planning and executing DHS's individual programs. They are expected to
do so within the cost, schedule, and performance parameters established
in their program baselines. If they cannot do so, the programs'
decision authority is to rebaseline the program--that is, establish new
cost, schedule, or performance goals.
The Director of Operational Test and Evaluation (DOT&E) is
responsible for approving major acquisition programs' operational test
agents, operational test plans, and Test and Evaluation Master Plans.
As appropriate, DOT&E is also responsible for participating in
operational test readiness reviews, observing operational tests,
reviewing operational test agents' reports, and assessing the reports.
DOT&E also provides a letter of assessment that includes an appraisal
of the program's operational test, a concurrence or non-concurrence
with the outcome, and any further independent analysis.
programs are experiencing mixed outcomes, though dhs is taking steps to
address enduring challenges
In April 2015, we found that of the 22 major programs that we
reviewed, two were on track to meet initial schedule and cost
parameters, that is, the initial schedules and cost estimates DHS
leadership approved after the Department revised its acquisition policy
in November 2008.\3\ Fourteen programs had experienced schedule slips,
or schedule slips and cost growth. These programs' life-cycle cost
estimates increased by $9.7 billion, or 18 percent.\4\ I would like to
highlight a key point: That we were unable to assess schedule and cost
progress for 6 of the 22 programs because DHS leadership had not yet
approved baselines establishing their schedules and cost estimates. We
recommended in 2012 that DHS ensure all major programs fully comply
with DHS acquisition policy by obtaining Department-level approval for
key acquisition documents before approving their movement through the
acquisition life cycle.\5\ DHS agreed with this recommendation but
acknowledges that it will take some time to fully implement.
---------------------------------------------------------------------------
\3\ See GAO-15-171SP. DHS issued an updated version of MD 102-01 in
January 2010 and subsequently updated the guidebook and appendixes.
\4\ We tracked how each program's schedule and cost has changed
over time by comparing the schedule and cost estimate from the
program's initial baseline, approved by DHS after the Department's
current acquisition policy went into effect in November 2008, to the
program's expected schedule and cost estimate as of January 2015, based
on an update provided by each program.
\5\ GAO-12-833.
---------------------------------------------------------------------------
Part of the reason for the schedule slips and cost growth, as we
have reported in the past, is program staffing, funding, and
requirements issues. We previously reported, in 2012, that these issues
were prevalent Department-wide and we have found this to still be the
case.
Programs Are Experiencing Mixed Outcomes
CBP's Automated Commercial Environment program and TSA's Electronic
Baggage Screening Program were on track to meet their schedules and
cost estimates established after November 2008. Fourteen other programs
experienced schedule slips, including 7 that also experienced cost
growth. Six programs did not have Department-approved baselines. Table
1 summarizes our findings.

TABLE 1.--MAJOR ACQUISITION PROGRAMS' PROGRESS AGAINST SCHEDULES AND COST ESTIMATES
----------------------------------------------------------------------------------------------------------------
On Track No
Against Schedule Cost Department-
Component Program Initial Slips Growth approved
Baselines Baseline
----------------------------------------------------------------------------------------------------------------
Analysis and Operations.............. Homeland Security .......... X .......... ...........
Information Network*.
Customs and Border Protection........ Automated Commercial X .......... .......... ...........
Environment.
Integrated Fixed Towers* .......... X .......... ...........
Land Border Integration. .......... .......... .......... X
Non-Intrusive Inspection .......... .......... .......... X
Systems.
Strategic Air and Marine .......... .......... .......... X
Program*.
Tactical Communications .......... .......... .......... X
Modernization*.
TECS (not an acronym) .......... X X ...........
Modernization*.
Federal Emergency Management Agency.. Logistics Supply Chain .......... .......... .......... X
Management System*.
Immigration and Customs Enforcement.. TECS (not an acronym) .......... X .......... ...........
Modernization*.
National Protection and Programs National Cybersecurity .......... X X ...........
Directorate. Protection System.
Next Generation Network-- .......... X X ...........
Priority Service.
Transportation Security Electronic Baggage X .......... .......... ...........
Administration. Screening Program.
Passenger Screening .......... X .......... ...........
Program.
U.S. Coast Guard..................... C4ISR**................. .......... X .......... ...........
Fast Response Cutter*... .......... X .......... ...........
HH-65 Conversion/ .......... X .......... ...........
Sustainment Projects.
Long Range Surveillance .......... X X ...........
Aircraft.
Medium Range .......... .......... .......... X
Surveillance Aircraft.
National Security Cutter .......... X X ...........
Offshore Patrol Cutter.. .......... X .......... ...........
U.S. Citizenship and Immigration Transformation.......... .......... X X ...........
Services.
----------------------------------------------------------------------------------------------------------------
Source.--GAO analysis of DHS documentation and data. GAO-15-541T
* At risk program that we reviewed to provide insight into some factors that can lead to poor acquisition
outcomes.
** C4ISR is an acronym for Command, Control, Communications, Computers, Intelligence, Surveillance, and
Reconnaissance.

Fourteen programs have at least one major milestone that slipped
since DHS revised its acquisition policy in November 2008. On average,
these program milestones slipped more than 3\1/2\ years. Seven
programs' costs have grown beyond the thresholds initially approved by
DHS leadership. In total, the 7 programs' acquisition cost estimates
have increased by 40 percent, and their overall life-cycle cost
estimates have increased by almost 18 percent, or $9.7 billion as
mentioned above.
As noted above, we reported in April 2015 that six programs lack
DHS-approved baselines, even though these baselines are required by DHS
policy. This situation prevented us from assessing whether the programs
were on track to meet their cost estimates and schedules:
Four of the programs are sponsored by CBP: Land Border
Integration, Non-Intrusive Inspection Systems, Strategic Air
and Marine Program, and Tactical Communications Modernization.
These 4 programs received more than $5 billion in
appropriations through fiscal year 2014.
A fifth program, the Federal Emergency Management Agency's
(FEMA) Logistics Supply Chain Management System, also lacks a
Department-approved baseline. In April 2014, based on the
preliminary results of a DHS Office of Inspector General report
that identified this deficiency, the acting USM directed FEMA
not to initiate the development of any new capabilities for
this program until further notice.
Finally, as a relatively new program, the Coast Guard's
Medium Range Surveillance Aircraft program has not yet had its
baseline approved. This program was established in October 2014
when DHS leadership directed the Coast Guard to restructure the
HC-144A Maritime Patrol Aircraft program to accommodate the
addition of 14 C-27J aircraft.
PARM officials said it is realistic to expect DHS leadership can
approve baselines for five of the six programs by the end of fiscal
year 2015 (the exception being the FEMA Logistics Supply Chain
Management System).
DHS Is Taking Steps to Address Enduring Challenges
DHS acquisition programs continue to face staffing shortfalls,
funding instability, and requirements changes that we previously
identified were prevalent Department-wide. These challenges increase
the likelihood that acquisition programs will cost more and take longer
to deliver capabilities than expected. DHS leadership is aware of these
problems and has taken some steps to address them, but it will likely
take years to fully resolve them.
Workforce shortfalls
As part of an effort to evaluate whether its acquisition programs
have sufficient numbers of trained, qualified, and experienced
acquisition staff, DHS headquarters reported that 21 of the 22 programs
we reviewed faced shortfalls in their program office workforce in
fiscal year 2014. These shortfalls can pertain to such positions as
program managers, systems engineers, and logisticians. However,
officials from 15 of the 21 programs did not identify negative effects
from these shortfalls, suggesting that officials at DHS headquarters
and program offices have different views on staffing needs. The
executive director of PARM acknowledged that standardized staffing
templates used in the evaluation do not always account for the varying
quality of people, or particular aspects of specific programs, and said
that PARM officials developed the templates to help prioritize future
staffing assessments. This is an issue the Department will continue to
pursue.
Funding gaps
For the 22 programs in our review, we compared their estimated
funding needs for fiscal years 2014 to 2018 to the expected amounts set
forth in the Future Years Homeland Security Program report DHS
submitted to Congress in fiscal year 2014. We found that 11 of the 22
programs face funding gaps of 10 percent or greater over this period,
including 5 programs that face funding gaps of 30 percent or greater.
These funding gaps can be caused by cost growth, unreliable cost
estimates, requirements changes, revised funding priorities, and other
factors.
We previously found that DHS's chief financial officer had
identified a 30 percent funding gap, from fiscal years 2014 to 2018,
across the Department's entire major acquisition portfolio.\6\ While
this acknowledgment was a positive step toward addressing the
Department's funding gap, funding gaps of this extent are likely to
impede effective program execution. For example, officials from 6 of
the 22 programs in our review attributed schedule slips to past funding
gaps. In response to one of our earlier recommendations on this topic,
as of June 2014, the Acquisition Review Board is now to specifically
address affordability issues during all program reviews, and as
necessary, document explicit tradeoffs among cost, schedule, and
capability requirements. This is an important step toward closing the
Department's acquisition funding gap.
---------------------------------------------------------------------------
\6\ GAO-14-332.
---------------------------------------------------------------------------
Requirements changes
Finally, we found that requirements changes were common across the
22 acquisition programs in our review. These are situations where
programs have revised their requirements after they initiated efforts
to obtain new capabilities. We have previously concluded that relaxing
requirements can help mitigate affordability and schedule risks.\7\
These changes, however, can also indicate that a program is facing
execution challenges or expanding its scope beyond what was initially
envisioned. We found that programs changed requirements for various
reasons, such as to respond to technology development challenges or to
address evolving threats. In some cases, program requirements were not
defined properly in the first place.
---------------------------------------------------------------------------
\7\ GAO-12-833.
---------------------------------------------------------------------------
dhs has taken steps to improve oversight of major acquisition programs,
but lacks key information necessary to manage its programs
As we reported in March 2015, DHS leadership has undertaken efforts
that are intended to improve its oversight of major acquisitions.\8\
I'll highlight two of these. First, in September 2014, a USM policy
memorandum clarified the responsibilities of the Component Acquisition
Executives within the component organizations. These senior officials
play an important role in acquisition oversight because they are
responsible for establishing acquisition processes and overseeing the
execution of programs in their components. The memo sets forth
oversight responsibilities for these officials--particularly for the
programs for which they are the acquisition decision authority--and
clarifies the acquisition oversight chain of command within the
Department. Now, for example, it has been made clear that for purposes
of acquisition oversight for specific acquisition decisions, program
managers report to their Component Acquisition Executives and these
executives report to the USM. This clarification is useful, as we had
found differences in these officials' roles and responsibilities prior
to the memo's issuance. DHS's longer-term goal is to standardize the
Component Acquisition Executives' acquisition authorities and
experience levels.
---------------------------------------------------------------------------
\8\ GAO-15-292.
---------------------------------------------------------------------------
A second example concerns the roles and responsibilities of PARM,
which as mentioned above has responsibility for overseeing the
acquisition process and assessing the status of acquisition programs.
We found that the roles and responsibilities of PARM staff--who carry
out day-to-day oversight of, and support to, major acquisition
programs--were not defined in DHS acquisition policy. Thus, we
recommended that PARM develop written guidance that defines roles and
responsibilities of these staff. DHS agreed with the recommendation and
has already taken action to address it.
The actions cited above are positive. However, good information is
critical to sound decision making about acquisition programs.
Unfortunately, we have found problems in this regard. I've already
mentioned that 6 of the 22 major programs we recently assessed did not
have Department-approved acquisition baselines. There are three other
areas related to incomplete or inaccurate information that I would also
like to discuss.
Assessments of Operational Testing
DHS's DOT&E is responsible for numerous aspects of operational
testing, including an appraisal of programs' operational test events,
known as a letter of assessment. In our April 2015 report, we found
ambiguity across DOT&E's letters of assessment in that they did not
always clearly identify whether the systems tested met all of their key
performance parameters--capability or system attributes that are
required to successfully meet the DHS mission. DHS testing policy
establishes that the primary purpose of test and evaluation is to
provide timely, accurate information to managers, decision makers, and
other stakeholders to reduce programmatic, financial, schedule, and
performance risk. To this end, DOT&E generally identified whether the
programs' systems were operationally effective and suitable. However,
without a specific discussion of whether systems met all of their key
performance parameters in each letter of assessment, DHS leadership may
not have all of the information needed to make deployment authorization
decisions. Thus, we recommended, and DHS agreed, to ensure DOT&E
explicitly address all of the relevant key performance parameters in
each letter of assessment appraising operational test results.
In addition, while 19 of the 22 programs we reviewed had deployed
capabilities, meaning that some capabilities had been delivered to
operators, DHS leadership had exempted 4 of these programs from
operational testing for various reasons. Under DHS's test policy, which
was established in 2009, programs generally should be operationally
tested before deploying capabilities. The risks and benefits associated
with deploying capability without operational testing vary on a
program-by-program basis. For example, DOT&E determined that CBP's Non-
Intrusive Inspection Systems program does adequate acceptance testing
on commercial-off-the-shelf systems, and that it does not need a test
plan or operational testing until CBP begins to pursue the next
generation of capabilities. In another case, DOT&E acknowledged that
the Coast Guard's HC-130J long-range surveillance aircraft was
previously demonstrated by the U.S. Air Force and determined that it
did not need additional operational testing.
Comprehensive Acquisition Status Report to Congress
In recent years, DHS has been required to submit an annual report
to Congress addressing a variety of issues pertaining to major
acquisition programs. PARM is responsible for preparing this
Comprehensive Acquisition Status Report, or CASR. The most recent
report, for fiscal year 2014, included 82 major programs and drew
information from a data system called nPRS, which is DHS's official
system of record for acquisition program reporting. But we found that
nPRS, and hence the CASR, contained inaccurate and out-of-date data.
For example, we found persistent discrepancies between the CASR and
nPRS for life-cycle cost estimates for some programs even after efforts
to update or fix the data inaccuracies through an extensive
adjudication process. Some programs had reported no expenditures for
the entire fiscal year. Others did not clearly reflect the cost,
schedule, and technical risks that are supposed to be included in the
CASR. Although DHS programs are responsible for entering accurate data
into nPRS, this was not happening consistently. Further, the Component
Acquisition Executives are responsible for validating the information,
but this was not occurring consistently either. See figure 2 for our
assessment of the CASR development process.

PARM officials have acknowledged on-going problems with the data
reported in both nPRS and the CASR, and noted that they are working to
improve the data quality. We recommended in March 2015, and DHS agreed,
to determine mechanisms to hold programs accountable for entering data
in nPRS consistently and accurately and to hold Component Acquisition
Executives accountable for validating the information.
Oversight of operations and maintenance costs for programs in
sustainment
DHS does not have a structure in place for overseeing the costs of
42 programs whose acquisition documentation requirements were waived by
the USM in May 2013.\9\ This waiver covered certain programs in
sustainment--programs that have been developed and delivered to the
end-users and are now being operated and maintained. The USM determined
that it would be cost-prohibitive and inefficient to recreate
documentation for previous acquisition phases.
---------------------------------------------------------------------------
\9\ Office of Management and Budget guidance calls for agencies to
perform annual assessments of the operations and maintenance
performance of IT investments to ensure these investments continue to
meet mission needs. We previously assessed DHS's efforts in this area.
See GAO, Information Technology: Agencies Need to Strengthen Oversight
of Billions of Dollars in Operations and Maintenance Investments, GAO-
13-87 (Washington, DC: Oct. 16, 2012).
---------------------------------------------------------------------------
However, an important point is that only 1 of these 42 programs had
an approved life-cycle cost estimate, which would have delineated
expected acquisition costs as well as the costs to operate and maintain
the system. Operations and maintenance costs could run in the billions
of dollars for these 42 programs, as they can account for more than 80
percent of program life-cycle costs. We recommended in March 2015, and
DHS agreed, to produce operations and maintenance cost estimates for
programs in sustainment and establish responsibility for tracking
sustainment programs' adherence to those estimates.
In conclusion, DHS has acknowledged the significant challenges
facing its portfolio of acquisition programs--such as the $9.7 billion
increase in life-cycle cost estimates across just seven of its
programs--and taken steps to improve program information and designate
oversight responsibilities. However, our analysis shows that DHS's
oversight and management of its programs remain a work in progress.
Further efforts, particularly ensuring DHS programs fully comply with
acquisition policy, would put DHS in a better position to make
important decisions about its acquisition priorities.
Chairman Perry, Ranking Member Watson Coleman, and Members of the
subcommittee, this completes my prepared statement. I would be pleased
to respond to any questions that you may have at this time.

Mr. Perry. Thank you, Ms. Mackin.
The Chairman now recognizes Mr. Fulghum for his testimony.

STATEMENT OF CHIP FULGHUM, ACTING DEPUTY UNDER SECRETARY FOR
MANAGEMENT AND CHIEF FINANCIAL OFFICER, U.S. DEPARTMENT OF
HOMELAND SECURITY

Mr. Fulghum. Chairman Perry, Ranking Member Watson Coleman,
and other distinguished Members of the subcommittee, thank you
for the opportunity to appear today and to discuss acquisition
management at DHS.
First of all, let me express my appreciation to my
colleagues from the GAO for their long-standing and dedicated
work to support the transformation of acquisition management at
DHS. Over the past several years, we have forged an excellent
working relationship with GAO and reached common ground on many
issues.
I am gratified by the recent comments that recognize the
substantial progress the Department has made to address its
high-risk areas, especially those that fall within acquisition
management. We are committed to sustaining this progress and
ensuring program managers effectively execute our acquisition
programs.
As the acting deputy under secretary for management and
acting chief acquisition officer, I am the one responsible for
overseeing policies, processes, procedures used to acquire and
oversee goods and services for the Department.
The momentum gained from the Secretary's Unity of Effort
initiative has accelerated the work undertaken by previous
under secretaries for management as well as directors of
acquisition review to build a stronger management framework
much earlier in the investment cycle.
It has been exactly 1 year today since Secretary Johnson
formally launched the Unity of Effort initiative to better
integrate the Department's people, organizational structures,
and operational capability, while emphasizing the need to
improve acquisition management. Later today, the Secretary will
release an update outlining the excellent progress we have made
to implement Unity of Effort. While progress has been made,
more needs to and will be done.
In this update, the Secretary will direct me, the USM, to
begin a new effort called Acquisition Innovations in Motion, or
AIM. AIM is simply a set of on-going and recurring activities
designed to enhance how the Department does business and its
continued improvement of our acquisition process and industry
engagement to maximize our capability to deliver and procure
the best solutions possible.
I was pleased when GAO reported our acquisition policy
framework is generally sound and reflects key program
management best practices. This framework serves to bind the
DHS acquisition community around a common operating procedure.
In addition to a more substantive policy framework, we have
engaged the community in the following areas:
We now have an active Joint Requirements Council consisting
of senior operational executives from every component in
headquarters. The JRC works with cross-component mission
portfolio teams to identify common capability needs and
challenges across DHS, then oversees and conducts rigorous
analysis and assessments. Ultimately, this work will be
codified into a lasting and functional framework for the
Department's requirements process.
Our acquisition management improvements are due to strong
acquisition leadership, commitment, and the dedication and
expertise of our workforce. We are building a solid foundation
of strong acquisition policies and practices to make us better.
We are hiring and training the next generation of acquisition
professionals through our intern programs. We are committed to
attracting and retaining top talent to effectively and
efficiently plan and execute our acquisition programs.
We will continue to apply ourselves to acquisition
management improvement through better processes and increased
oversight, which will lead us through the next phase of
acquisition reform. To sustain our success, we will continue to
institutionalize a more integrated approach to acquisition
management that will result in sound, empirically-based
decisions around strategy, planning, acquiring needed
capabilities, and oversight of acquisition programs.
In closing, I want to reiterate that it is our fundamental
responsibility to manage the Department effectively and
efficiently. Sound management is critical to our ability to
execute our mission successfully, and it is incumbent upon us
as guardians of the public trust to be mindful of how we expend
public funds.
You have my commitment that I will continue to focus
intensely on strengthening the Department's acquisition
management functions and that I will work closely with this
committee and with GAO to achieve that goal.
Thank you, and I look forward to the discussion.
[The prepared statement of Mr. Fulghum follows:]
Prepared Statement of Chip Fulghum
April 22, 2015
Chairman Perry, Ranking Member Watson Coleman, and other
distinguished Members of the subcommittee, thank you for the
opportunity to appear today to discuss acquisition management at DHS.
My comments will focus on: (1) The impact of Unity of Effort on
improving acquisition management; (2) our progress and challenges in
addressing GAO's recommendations.
I wish to express appreciation to my colleagues from the Government
Accountability Office (GAO) for their long-standing and dedicated work
to support the transformation of acquisition management at DHS. Over
the past several years, we have forged an excellent working
relationship with GAO and have reached common ground on many issues. I
am gratified by their recent comments that recognized the substantial
progress the Department has made to address its high-risk areas,
especially those that fall within the acquisition management area. We
are committed to sustaining this progress and working to ensure program
managers effectively execute our policies, procedures, and
instructions.
As acting deputy under secretary for management and acting chief
acquisition officer, I am ultimately responsible for overseeing the
policies, processes, and procedures used to acquire and oversee goods
and services for the Department. The momentum gained from the
Secretary's Unity of Effort initiative has accelerated the efforts
undertaken by previous under secretaries for management to build a
stronger management framework much earlier in the investment life
cycle. Exactly 1 year ago, Secretary Johnson formally launched the
Unity of Effort initiative to better integrate the Department's people,
organizational structures, and operational capability. The Secretary
also emphasized the need to improve acquisition management through
enhancements to policies, structures, and processes.
More importantly, the Unity of Effort initiative has
institutionalized stronger, more centralized governance structures
through the establishment of the Secretary's Leaders Council (SLC) and
the Deputy's Management Action Group (DMAG). Strategy and resourcing
decisions made by these governance boards ultimately feed the existing
acquisition process, which continues to oversee acquisition
investments--from the mission needs phase through completion of a
program.
In the past year, the SLC and DMAG have made critical decisions
around strategy, resource allocation, requirements, and operational
planning. The decisions have produced: A leaner, more mission-focused
fiscal year 2016 budget; a campaign plan for the Southern Border; the
launch of three (3) pilot Joint Task Force(s) to unify operational
planning, and the re-establishment of the Joint Requirements Council
(JRC) to improve the quality and validity of the Department's
requirements generation and oversight process. By virtue of a stronger
``left side'' of the investment life-cycle process, DHS is better
positioned to execute strategies to close capability gaps. I will
discuss the JRC and its impact on acquisition management later in this
testimony.
While there is always room for improvement, there are positive
trends in the way we manage our acquisition programs. In February 2015,
DHS was identified as one of 16 departments and agencies on GAO's
``High-Risk List.'' In its report to Congress,\1\ GAO once again noted
the Department's good progress in addressing 30 recommendations and
outcomes and stated that DHS is on a path to getting off the High-Risk
list. Specifically, GAO noted that since its last report in 2013, DHS
has ``fully addressed'' 9 of 30 risk areas and has made significant
progress toward addressing the remaining 21. Overall, GAO has stated
that DHS is a ``model'' for how Federal agencies can work to address
GAO's high-risk designations. GAO also stated:
---------------------------------------------------------------------------
\1\ GAO, High-Risk Series: An Update, (GAO-15-290).

``DHS's top leadership, including the Secretary and Deputy Secretary of
Homeland Security (who assumed leadership of the department after our
2013 update), have continued to demonstrate exemplary commitment and
support for addressing the department's management challenges. For
instance, the department's Deputy Secretary and Under Secretary for
Management, and other senior management officials have frequently met
with us to discuss the department's plans and progress, which helps
ensure common understanding or the remaining work needed to address our
---------------------------------------------------------------------------
high-risk designation.''

The Department has worked diligently to improve its acquisition
processes and these efforts have produced more effective governance and
significant improvements to future and health of current acquisitions.
For example, we have established metrics to track program health,
compliance with processes and policies, and program staffing. In recent
years, the Acquisition Review Board (ARB) has increased its oversight
reach and has taken action to cancel or pause several poor-performing
or higher-risk programs that were not achieving the pre-established
cost, schedule, and performance goals.
In a recently-released report,\2\ GAO examined 22 acquisition
programs on our Major Acquisition Oversight List (MAOL). I am pleased
with GAO's acknowledgment that DHS is continuing to take steps to
address challenges related to keeping DHS programs within cost and
schedule parameters. As GAO recognized, we have already taken
significant steps to improve acquisition management, such as dedicating
additional resources to acquisition oversight and documenting major
acquisition decisions in a more transparent and consistent manner. In
addition, we are in the process of making policy changes in Management
Directive (MD) 102-01 based on GAO's recommendations in a September
2012 report.\3\ These on-going efforts highlight the Department's
commitment to better acquisition and resource management.
---------------------------------------------------------------------------
\2\ Homeland Security Acquisitions--Major Program Assessments
Reveal Actions Needed to Improve Accountability (GAO-15-171SP).
\3\ Homeland Security: DHS Requires More Disciplined Investment
Management to Help Meet Mission Needs (GAO-12-833).
---------------------------------------------------------------------------
In the past 12 months, we have increased the scrutiny of our
Headquarters oversight responsibility by holding 24 ARBs. During my
tenure as acting deputy under secretary, I have personally chaired 13
of those ARBs.
During these ARBs, substantive decisions were made that
significantly influenced the performance of these programs. Some key
decisions included:
USCG's National Security Cutter and National Automated
Identification System; TSA's Electronic Baggage Screening
Program; and TSA's Passenger Screening Program for Explosive
Trace Detection were all authorized to enter the deployment
phase.
OHA's BioWatch 3 was cancelled.
FEMA's Logistics Supply Chain Management System was directed
to halt any new development until an assessment of its
operational capability and capability gaps is completed.
USCIS Transformation and ICE TECS Modernization (MOD)
programs were both removed from breach status.
TSA's Technology Infrastructure Modernization Program was
paused until TSA completes a re-baseline of the Surface and
Aviation segments and updates acquisition documentation and
strategy.
CBP's Strategic Air Marine Program was brought into
compliance with MD-102 and is working to address actions
assigned by the ARB.
USCG's Medium Range Surveillance Program was directed to re-
baseline costs for the HC-144 and the C-27J aircraft that were
transferred from United States Air Force.
The impact of this enhanced oversight has been acknowledged by both
GAO and the DHS inspector general (IG). For example, GAO acknowledged
that the Automated Commercial Environment (ACE) program which struggled
for many years to develop the needed capabilities has remained on track
to meet its approved schedule and cost estimates. The DHS IG has
recently come to similar findings regarding the ACE program.
While much has been accomplished, more is being done to address the
challenges that remain. One of these on-going challenges is to ensure
that acquisition programs are sufficiently staffed with trained and
certified acquisition professionals. Recruiting and retaining top
talent in the program management area is a challenge faced across the
entire Federal Government. We have completed an analysis of the
staffing gaps and I am working with component heads to develop
aggressive action plans to close those gaps by Quarter 2 of fiscal year
2016. In the mean time, I am holding components accountable for meeting
their staffing goals or face the possibility that their programs will
not be allowed to proceed to the next phase of the acquisition cycle.
In a February 2015 report (GAO-15-290), GAO identified five (5)
outcomes and recommendations in the Department's acquisition program
management area. Of the 5 identified outcomes, one is ``fully''
addressed and we believe another will be ``mostly addressed'' by the
end of calendar year 2015. We agree with GAO that we need to do a
better job with producing and/or updating some of our acquisition
documentation in a timelier manner. In response to this recommendation,
I directed the Office of Program Accountability and Risk Management
(PARM) and Component Acquisition Executives (CAE) to execute a plan to
complete all outstanding documentation for acquisition programs by the
end of fiscal year 2015.
With regard to improving acquisition capabilities, I am pleased
that GAO has determined that this recommendation is ``fully
addressed.'' This has been accomplished in large part due to the
solidification of the CAE structure, which serves as the single point
of entry into each operational component. Each CAE is operating from a
standard operating procedure that defines roles, responsibilities, and
expectations. We will continue to refine this structure and support the
success of each CAE.
As mentioned earlier in my testimony, we have made good progress
addressing the requirements-development process. As indicated, this
progress was accelerated in June 2014, when the Secretary formally re-
instituted a Department-wide Joint Requirements Council (JRC). The JRC
is comprised of senior operational executives from all major
operational and headquarters components. It is chaired by a senior
executive, currently a Rear Admiral from the Coast Guard, and reports
directly to the Secretary's office.
Since June 2014, the JRC has worked to create an effective
component-driven joint requirements process that analyzes, validates,
and recommends courses of action to leadership on DHS-wide capabilities
and requirements that enhance operations, and more effectively and
efficiently manage the Department's investments. To date, the JRC has
stood-up a support staff and 5 cross-component teams to assess and
analyze capabilities across a broad array of portfolios which include:
Aviation Commonality; Information-based Screening and Vetting;
Information Sharing; Chemical Biological Radiological Nuclear (CBRN)
and Cybersecurity. On April 14, 2015, I approved a Joint-Operational
Requirements Document (J-ORD) for aviation assets that was analyzed and
validated by the JRC. Additionally, the JRC is in the midst of
developing an enduring Component-driven joint requirements process.
The JRC has already achieved initial operating capability and
projects full operating capability by the end of fiscal year 2016. The
JRC recently received budget authority in the DHS's fiscal year 2015
appropriations to solidify the staff and develop a requirement
generation process. Ultimately, the processes and procedures for the
requirements-development phase will be codified into policy, which will
ensure a lasting, functional framework for the Department's
requirements process.
Finally, we are in the process of implementing broader improvements
to the acquisition process, beyond those mentioned previously. I have
asked the senior procurement executive, chief information officer, and
executive director for PARM to implement several initiatives by the end
of fiscal year 2015. The first of these initiatives is engagement with
industry councils. This engagement will facilitate honest conversations
about the Department's vision and strategic plan, to include mission-
specific priorities, as well as challenges and gaps in current
capabilities. Another of these initiatives focuses on obtaining
feedback on how best to improve the quality and timeliness of our
contracting process, which includes ``learning events'' on how we can
improve debriefings, market research, and requests for information.
In addition, industry feedback may be utilized to make changes to
MD-102, as well as to determine how best to normalize the acquisition
life-cycle management review process across all Department-wide
acquisitions (e.g., Information Technology, Research & Development, and
professional services). We will also create a ``Procurement Innovation
Lab'' that leverages the best practices from both the Federal
Government and industry to improve how we procure innovative
technologies.
It is our fundamental responsibility to manage the Department
effectively and efficiently. Sound management is critical to our
ability to execute our mission successfully, and it is incumbent upon
us as guardians of the public trust to be careful and scrupulous in our
expenditure of public funds. You have my commitment that I will
continue to focus intensely on strengthening the Department's
management functions, and that I will work closely with this committee
and with GAO to achieve that goal.
While there is still much work to do, we have made significant
strides in improving acquisition and investment management for the
Department's portfolio of major programs. I believe we are making
progress in shifting the paradigm so investment decisions are more
empirically driven and there is qualified technical expertise to
support program managers at each phase of the life cycle.
Thank you for the opportunity and the privilege to appear before
you.
Attachment.--Memorandum for DHS Leadership
April 22, 2014
FROM: Secretary Johnson
SUBJECT: Strengthening Departmental Unity of Effort
The Department of Homeland Security has many strengths, starting
with the professionalism, skill, and dedication of its people and the
rich history and tradition of its Components. These strengths have
allowed the Department to achieve many successes in the short time
since its creation. It is clear to me, however, that DHS has yet to
reach its full potential as an organization. Such potential is
difficult to achieve and takes even the best organizations many years.
Complicating matters is the difficult budget environment we currently
face.
Resource constraints also provide the impetus to build and mature
our organization into one that is greater than the sum of its parts--
one that operates with much greater unity of effort. As I noted in my
recent testimony on our FY 2015 budget request, I am committed to
improving our planning, programming, budgeting, and execution processes
through strengthened Departmental structures and increased capability.
We must have better traceability between strategic objectives,
budgeting, acquisition decisions, operational planning, and mission
execution, in order to improve both Departmental cohesiveness and
operational effectiveness.
To be clear, these changes are not designed to centralize decision-
making authority and processes within an opaque DHS Headquarters. To
the contrary, these changes are intended to transparently incorporate
DHS Components into unified decision-making processes and the analytic
efforts that inform decision making. Our collective goal is to better
understand the broad and complex DHS mission space and empower DHS
Components to effectively execute their operations.
To accomplish this task, we will capitalize on existing structures
and create new capability where needed--for example, as revealed by our
recent Integrated Investment Life Cycle Management pilot study, which
tested the linkages between interrelated strategy, capabilities and
resources, programming and budgeting, and major acquisition oversight
processes. That effort underscored the need to further strengthen all
elements of the process, particularly the upfront development of
strategy, planning, and joint requirements. Our collective task is to
institutionalize improvements to support our primary objective: The
effective execution of our missions. I have identified several initial
focus areas that are intended to build organizational capacity, in
order to develop action plans and implement change. Each requires our
immediate attention.
1. Departmental Leadership Forum.--The Department has not had a
forum for its most senior leadership--Component heads, Under
Secretaries, and the heads of select other offices--to gather
regularly with me and the Deputy Secretary in an environment of
trust, and openly place on the table issues, arguments, and
disagreements concerning our most challenging issues. This is
changing. The Department's Chief of Staff is now scheduling
twice-monthly Department Senior Leaders Council meetings,
hosted by me, to discuss issues of overall policy, strategy,
operations and Departmental guidance. The Deputy Secretary is
hosting weekly Deputies Management Action Group meetings, and
will use that group to move forward specific initiatives in
joint requirements development, program and budget review,
acquisition reform, operational planning, and joint operations.
2. Departmental Management Processes for Investments.--The
strategic decisions of the Department's senior leadership are
only as good as the processes that support and give effect to
those decisions. Although much work has been done to date in
the areas of joint requirements analysis, program and budget
review, and acquisition oversight, more needs to be done to
turn strategy into results. To that end, in order to improve
our investment processes, I direct the following:
a. Under the direction of the Under Secretary for Management, the
Chief Financial Officer will strengthen and enhance the
Department's programming and budgeting process by
incorporating the results of strategic analysis and joint
requirements planning into portfolios for review by issue
teams. Substantive, large-scale alternative choices will be
presented to the Deputies Management Action Group as part
of the annual budget development. This review process will
also include the Department's existing programmatic and
budgetary structure, not just new investments. It will
include the ability for DHS to project the impact of
current decisions on resource issues such as staffing,
capital acquisitions, operations and maintenance, and
similar issues that impact the Department's future ability
to fulfill its mission responsibilities.
b. The Deputy Secretary, through the Deputies Management Action
Group, will lead an expedited review to provide strategic
alternatives for developing and facilitating a DHS
Component-driven joint requirements process. This joint
requirements process will include oversight of a
development test and evaluation capability, identification
of priority gaps and overlaps in Departmental capability
needs, provision of feasible technical alternatives to meet
capability needs, and recommendations to me on the creation
of joint programs and joint acquisitions to meet
Departmental mission needs.
c. The Under Secretary for Management will conduct a full review of
the Department's acquisition oversight framework, and
update the processes described in Directive 102-01. The
result must be a transparent, coherent continuum of
activities that link and integrate Departmental strategy
and planning, development of joint requirements,
programming and budgeting decisions, capital investment
planning, and the effective and efficient execution of
major acquisitions and programs.
3. DHS Headquarters Strategy, Planning, and Analytical
Capability.--The actions directed in this memorandum require a
focused, collaborative Department-level strategy, planning, and
analytical capability that fully understands Component
capabilities in these areas and coordinates with similar
Component-level functions, in order to support more effective
DHS-wide decision making and operations. As the Secretary of
Homeland Security, it is my responsibility to understand from a
Departmental perspective how the activities, operations, and
programs of each individual Component fit together in order to
best meet Departmental mission responsibilities in a
constrained resource environment. In some cases, this involves
developing a fuller, broader understanding of how the
Department meets its operational responsibilities, such as
securing our air, land, and sea borders. In other cases, this
involves understanding how individual Component resources and
activities are collectively integrated and employed in a
unified Departmental framework that is agile and flexible to
meet current and emerging threats when needed. We used this
approach in a limited way for the development of the Blueprint
for a Secure Cyber Future, TSA's Security Strategy for Mass
Transit and Passenger Rail, the QHSR study on countering
biological threats and hazards, and the cross-Departmental
Inbound Threat Study.
My goal in focusing the collective DHS Headquarters strategy,
planning, and analytic capability, which will harness a number
of existing planning and analytic cells throughout DHS, is not
to eliminate the need for Component-level planning or analysis.
To the contrary, I intend for this focused DHS Headquarters
capability to work together with the planning and analytical
organizations within each Component to develop a comprehensive
picture of the Department's mission responsibilities and
functional capabilities, and to identify points of friction or
gaps, thus framing the corresponding choices that must be made.
This capability must be integrated into, not created and
employed in isolation from, existing Departmental functions
that are critical to day-to-day mission execution and mission
support activities. In addition to supporting the other actions
in this memorandum. I direct the following specific tasks:
a. The Assistant Secretary for PLCY's Office of Strategy, Planning,
Analysis & Risk will stop work on the current version of
the FY14-18 DHS Strategic Plan, and instead will be
prepared to lead the Department's senior leadership in a
strategic planning effort through the Department Senior
Leaders Council to set the vision and specific, mission-
focused outcomes for DHS for the next 5 years. Annual
resource planning guidance and operational planning
guidance must be based on the Department leadership's
strategic plan for addressing challenges over this time
period. The decisions we reach now, especially with respect
to investments, will dictate what capabilities our
successors will have in the future. The Assistant Secretary
for PLCY's Office of Strategy, Planning, Analysis & Risk
will work with representatives from all of your
organizations to develop the Department's FY14-18 Strategic
Plan from that vision. The Department Senior Leaders
Council meeting and subsequent meetings will be scheduled
on release of this memorandum.
b. The Deputy Secretary and the Department's Chief of Staff,
supported by the Assistant Secretary for PLCY's Office of
Strategy, Planning, Analysis & Risk, will provide
direction, focus, and harmonization of current operational
planning and coordination activities and the analytic
capability of the Office of Program Analysis and Evaluation
with Management Directorate's Office of the Chief Financial
Officer, in order to strengthen integrated resource
planning, the development of operational planning guidance,
and the conduct of strategic analyses in specific
portfolios and issue areas. Better synchronization across
DHS Headquarters capabilities in these areas will increase
DHS Headquarters' capability to effectively conduct and
coordinate strategy, planning, and analytic activities.
4. Departmental Processes for Enhancing Coordinated Operations.--
The strategic decisions of the Department's senior leadership
and the investments our Department makes in current and future
capabilities will only be effective if cross-Department
operations are planned and executed in a coordinated fashion.
Many DHS operations are conducted solely by a single Component,
although successful examples of joint operational activities
exist in seaports such as Charleston, SC, Miami, FL, San Diego,
CA, and Seattle, WA, and through organizations chartered under
the National Interdiction Command and Control Plan such as
Joint Interagency Task Force-South in Key West, FL, the El Paso
Intelligence Center in El Paso, TX, and the Air and Marine
Operations Center in Riverside, CA. Targeted examinations of
specific mission- and function-related issues are necessary to
enhance DHS-wide operational planning efforts, leading to more
effective operations. Further, operational planning guided by
my strategic intent, with outcomes and quantified targets, will
better inform the joint requirements process and future
resource decisions. Supporting these objectives, I direct the
following:
a. The Deputy Secretary, through the Deputies Management Action
Group, will lead a 60-day review and provide strategic
alternatives for future coordinated operations. This effort
will evaluate unity of effort options for enhancing DHS
operational mission effectiveness in specific locations and
geographic regions, or for the integration of cross-
Departmental functions.
b. The Deputy Secretary, through the Deputies Management Action
Group, will oversee an effort to develop a DHS strategic
framework for the security of the U.S. Southern Border and
approaches by August 1, 2014, along with a set of nested
``campaign plans'' for specific geographic areas or problem
sets. As an initial part of this effort, the Assistant
Secretary for PLCY's Office of Strategy, Planning, Analysis &
Risk will lead an activity to develop the overall strategic
guidance, including outcomes with quantified targets, upon
which the framework and campaign plans will be based. Plan
development will be led by a senior USCG official, working with
responsible DHS Components and DHS Headquarters elements. The
strategic framework and campaign plans will include approaches
for improved information sharing, sensor integration, and
unified command and control structures as appropriate.
c. The Deputy Secretary, through the Deputies Management Action
Group, will lead a 60-day review to provide the Department's
senior leadership with strategic options for enhancing DHS
homeland security mission effectiveness internationally,
through joint policy liaison and operational activity in
overseas locations and geographic regions across all DHS
components. It is imperative that we explore every opportunity
to extend our homeland security efforts, in cooperation with
our interagency and foreign partners, far beyond the borders of
the United States. I understand that the Department has
conducted several evaluations of its international footprint,
but in today's budget environment we need to look more closely
to make sure we are not leaving gaps nor have unnecessary
overlaps in deployment and staffing.
Enhancing the effectiveness and unity of DHS operations to better
fulfill our mission responsibilities is my primary reason for making
these important changes. I recognize that what I am directing
represents a departure in some ways from current DHS Headquarters and
Component approaches to management and operations. But in adding
structure and transparency, combined with collaborative, forthright
senior leader engagement, we will build together a stronger, more
unified, and enduring DHS. I intend to discuss these initiatives at the
next Department Senior Leaders Council meeting, and will begin
codifying these efforts in appropriate Department directives, beginning
with the resource planning guidance for FY 2017-2021 and the DHS
Strategic Plan for FY2014-2018. I look forward to your active support
of these steps and your frank, forthright participation in the meetings
that will follow.

Mr. Perry. Thank you, Mr. Fulghum.
The Chairman now recognizes Dr. Sims for your testimony,
sir.

STATEMENT OF CEDRIC J. SIMS, PARTNER, EVERMAY CONSULTING GROUP

Mr. Sims. Good afternoon, Chairman Perry, Ranking Member
Watson Coleman, and distinguished Members of the subcommittee.
Thank you for the opportunity to appear before you today.
I am Dr. Sims, partner of Evermay Consulting Group. I was
the first executive director of the DHS Office of Program
Accountability and Risk Management, also known as PARM. I
served DHS headquarters roles for over 3 years. My Federal
career also includes over 8 years with the United States Secret
Service, a window that also included the post-9/11 transition
of Secret Service from Treasury into the Department of Homeland
Security.
I am a native Texan and a graduate of Texas A&M University,
and I have 22 years of experience in engineering and executive
management applied to law enforcement and homeland security
pursuits.
In 2011, I led the development and implementation of the
Office of Program Accountability and Risk Management, with the
highest-level support of the under secretary for management and
my peer chief executive officers. This was a crucial time for
the agency, and the creation of PARM was necessary to address
on-going challenges with program management.
In the simplest terms, PARM has two fundamental
responsibilities. The first is program accountability. This
means that all stakeholders, not just the program manager, are
accountable to the program for its success. The second is risk
management. This objective is to address risks that are
inherent in complex programs while supporting prioritization of
investment decisions. An effective PARM will create an
environment where the probability of program success increases
while reducing risks that cause waste and inefficiency.
With PARM, Departmental acquisition was improved by putting
in place methods to address front-end requirements and back-end
program management. The goal is to minimize risk, encourage
fiscal responsibility, and improve end-to-end execution across
the entire acquisition life cycle.
In fiscal year 2011, acquisition programs represented
nearly $18 billion of the Department's $55 billion budget.
In my first role at headquarters, I supported the DHS chief
information officer's review of over 79 major information
technology programs that accounted for the vast majority of
$6.4 billion worth of IT spend. From this rigorous effort, we
observed pockets of excellence across DHS programs, but there
were also many troubled programs. Despite its large budget, DHS
had very little Department-wide institutionalization of program
management disciplines, standards, or tools.
Coincidentally, GAO had just delivered a letter to the DHS
Secretary in September 2010 advising to strengthen requirements
and development processes. In the letter, perennial program
management deficiencies were highlighted. The confluence of
events was a clear call to action for reforms in program
management.
I established PARM as an office to institute reforms with
clear objectives: First, rationalize the requirements
development process; second, improve and streamline governance;
next, solidify the component acquisition executive role;
furthermore, enhance business intelligence; and expand the
acquisition workforce while strengthening program and project
management training.
These were the guiding principles of PARM. By the time of
my departure some 3 years later, the Department was armed with
the experience gained from a review of over 100 programs and
the conduct of over 70 acquisition review boards. We drew
lessons from both successful and unsuccessful experiences.
Acquisition decisions were well-documented, and the
expectations of program improvements were clear. The on-going
body of work to be achieved was extensive but reflected shared
Departmental responsibilities.
The recent report about the current state of acquisition
management at DHS highlights that DHS programs are still
exhibiting various levels of adherence to Acquisition
Management Directive 102.
However, I am encouraged by DHS Secretary Jeh Johnson's
Unity of Effort to drive more efficient and mature practices
for managing investments. Acquisition processes are not perfect
and are still maturing. This could only be achieved through a
common discipline and set of practices that drive transparency
and uniformity in decision making.
The successful delivery of major programs must continue to
be a strategic business function of the Department. Those who
directly carry out the mission require and deserve the tools
and processes to help address their evolving mission needs
effectively and efficiently.
Thank you for the opportunity to testify today. I am very
happy to be here to support your efforts, and I look forward to
answering your questions.
[The prepared statement of Mr. Sims follows:]
Prepared Statement of Cedric J. Sims
April 22, 2015
Good afternoon, Chairman McCaul, Ranking Member Thompson, Chairman
Perry, Ranking Member Watson Coleman, and the distinguished Members of
the subcommittee. Thank you for the opportunity to appear before you
today.
I am Dr. Cedric J. Sims, partner of the Evermay Consulting Group. I
was the first executive director of the Department of Homeland Security
(DHS) Office of Program Accountability and Risk Management, also known
as PARM. I served in DHS Headquarters roles for over 3 years.
My Federal career also includes 8+ years at the U.S. Secret
Service. This window included the post-9/11 transition for the Secret
Service from Treasury to DHS. I am a native Texan and graduate of Texas
A&M University. I have over 22 years of experience in engineering and
executive management applied to law enforcement, transportation, and
homeland security pursuits. I have had the unique privilege to serve in
private sector, State, and Federal agencies.
In 2011, I led the development and implementation of the Office of
Program Accountability and Risk Management with the highest-level
support of the under secretary for management and my peer chief
executive officers. This was a crucial time for the agency and the
creation of PARM was designed to create an office responsible for
program accountability and risk management. In the simplest terms, PARM
has two fundamental responsibilities. The first is Program
Accountability--in order to ensure that all stakeholders are
accountable to the program for its success. The second is Risk
Management--in order to heighten executive awareness of inherent risks
to help prioritize investment decisions. Improving upon Departmental
acquisition, processes and procedures were put in place to address
``front-end'' requirements as well as ``back-end'' program management,
in order to minimize risk, encourage fiscal responsibility, and improve
end-to-end execution across the entire acquisition life cycle.
In fiscal year 2011, acquisition programs represented nearly $18
billion of the Department's $55 billion budget. In prior years, I had
led the development of the Concept for Future Operations for the U.S.
Secret Service that became the cornerstone of its nearly $300-million
Information Integration and Technology Transformation program. In my
first role at DHS headquarters, I supported the DHS chief information
officer's review of over 79 major Information Technology (IT) programs
that accounted for the vast majority of the $6.4 billion DHS IT
investment. There were pockets of excellence across DHS's programs, but
there were also some very troubled programs. Despite its large budget,
DHS had very little Department-wide institutionalization of process
disciplines, standards, and tools for IT programs. Coincidentally, GAO
had just delivered a letter to DHS in September of 2010, advising the
Secretary of Homeland Security, ``to strengthen its requirements
development process.'' In the letter, perennial program management
deficiencies were highlighted. The confluence of events was a clear
call to action for reforms in program management.
I established PARM as an office to institute reforms with clear
objectives:
Rationalize the requirements development process;
Improve and streamline governance;
Solidify the Component Acquisition Executive (CAE) role;
Enhance business intelligence; and
Expand the Acquisition Corps while strengthen Program and
Project Management training.
These were the guiding principles of PARM. By the time of my
departure, 3 years later, the Department was armed with the experience
gained from the review of over 100 major programs and the conduct of
over 70 acquisition review boards. We drew lessons from both successful
and unsuccessful experiences. Acquisition decisions were well
documented and expectations for program improvements were clear. The
on-going body of work to be achieved was extensive but reflected a
shared Departmental responsibility.
The successful delivery of major programs must continue to be a
strategic business function of the Department. Nearly half of the DHS
budget is dedicated to obtaining goods and services to support and
improve capabilities, including over $16 billion in investments in
acquisition programs. Those who directly carry out the mission require
and deserve the tools and processes to help address their evolving
mission needs effectively and efficiently.
There are a few points that should be kept in mind when reading the
reports about the current state of acquisition management at DHS.
First, consider the environment where the Department was deploying the
earliest mission capabilities to meet rapidly-evolving threats. We knew
the acquisition processes were not perfect and needed maturing. This
could only be achieved through a common discipline and set of practices
that drive transparency and uniformity in decision making.
Through Acquisition Management Directive 102-01 and subsequent
revisions, we documented policy, governance, and processes requiring
far more rigorous program management than previous DHS policies and
practices. The DHS programs are still exhibiting various levels of
adherence to the directive's guidance. However, I am encouraged by DHS
Secretary Jeh Johnson's Unity Effort to drive more efficient and mature
practices for managing investments.
Second, clear and rigorous practices absolutely needed to be
established. The cornerstone of our acquisition review process is the
program baseline. The acquisition program baseline formally documents
critical cost, schedule, and performance parameters that must be met to
accomplish the program's goals. By tracking and measuring actual
program performance against baseline, management is alerted to
potential problems and can take corrective action. We implemented
common tools for collection and dissemination of business intelligence
such as the centralized Decision Support Tool (DST). Utilization of
these tools helped us better manage the complex relationships between
mission objectives, program strategy, and performance metrics for a
specific program.
Finally, in order for acquisition practices to continue to mature
in terms of process and oversight, DHS must continue to work
collaboratively with partners across the Homeland Security enterprise.
During my tenure, none of the maturation, or any of these improvements
in oversight, could have occurred without the on-going discipline of
reviews, done both internally by DHS and its components and externally
by GAO and IG.
Ultimately, we must be ever-vigilant to perform a much better job
of successfully delivering best-in-class solutions to operators,
stakeholders, and citizens.
Thank you for the opportunity to testify today. I am very happy to
be here to support your efforts. I am here as a citizen, fully
committed to the critical missions of the Department of Homeland
Security and defense of the people of the United States of America. I
look forward to answering your questions.

Mr. Perry. Thank you, Dr. Sims.
The Chairman now recognizes himself for 5 minutes for
questioning. I will start with Under Secretary Fulghum.
You know, in reading the GAO report, I have to tell you, I
was struck by--you know, things you didn't know, right? The
impact to our border and maritime security and the scheduled
delays of several major CPB and Coast Guard acquisition
programs. You have already mentioned them, but it bears
repeating: The CPB integrated fixed towers, over 6 years late;
Coast Guard long-range surveillance aircraft, over 9 years
late; and the National Security Cutter, 4 years late; the Fast
Response Cutter, over 4 years late.
You know, with immigration being an issue--and this isn't
meant to be a gotcha question, but just curiously. You know,
when you talk about the integrated fixed tower system that is 6
years late, according to this, any idea of how--you know,
because I think it is important to put it in terms so people
understand that the failure of the acquisition process has
consequences on the ground.
Any idea how many illegal aliens will--you know, is there
an estimate of how many will penetrate the border at those
locations where the towers are supposed to be and are not?
Mr. Fulghum. Well, first of all, as you know, I am not the
immigration expert.
Mr. Perry. Right.
Mr. Fulghum. But I can talk to you about what we are doing
to get the program delivered.
Mr. Perry. Okay.
Mr. Fulghum. So, when we talk about 6 years, that is from
SBInet. As you and GAO have documented, that program did not
deliver. So we stopped the program, restructured the program.
The current program is 21 months behind schedule, for two
reasons. First of all, when we got the bids in, we got a lot
more than we thought we were going to get, so it took us longer
to go through that demonstration period. The second part is the
award was protested.
We have gotten past that now, and we are now on a path to
deliver that capability, albeit, as you said, later than we
would have liked.
Mr. Perry. Let me ask you this. This isn't part of the
script, so to speak, or the questions, but I am just--it is a
billion dollars, right? That is what I have, a billion dollars.
How did we get a billion dollars into it before we figured out
it wasn't working? I mean, how does that happen?
Mr. Fulghum. So, as you know, I wasn't here then, but what
I would tell you is, based on my experience, that DHS'
acquisition process--and this is a key tenet of what the
Secretary is driving us towards--is, if you get it right up
front, you are going to be able to deliver.
So, in other words, if you get the requirements up front
correctly and they are well-defined and you have operator input
and you get the right mission needs statement, the right
operational requirements document, if you get a well-defined
requirement, you will get a better cost estimate, you will get
more reliable budgets, and then you will be able to proceed
through the acquisition process.
What has hampered DHS' ability in the past has been the
lack of a strong requirements process. The Secretary is fixing
that. Standing up the JRC is an important milestone. It is up
and running, and it has actually approved its first joint
operational requirements document. It has a lot more work to
do. We need to get the governance underneath it in place.
But that--and I think my colleague from GAO would agree, as
well as Cedric, that that is the key to a successful
acquisition, is identifying requirements up front and getting
them right.
Mr. Perry. So, if I can brief you back, it sounds, you
know, to make it simple for me, because it took a couple
minutes, but what I heard was, we didn't know, the Department
didn't know what they were asking for, or they couldn't
identify the requirements and articulate them so that it is not
the contractor's fault that they gave us what we asked for. We
didn't really know what we were asking for, it sounds like, I
mean, to a certain extent.
I just wonder how you get a billion dollars into it before
you figure that out.
Mr. Fulghum. So I would say that----
Mr. Perry. Let me ask you this. You know, I heard, what, it
was, on the one project I think that Ms. Mackin mentioned, 6 of
15 or something were untested. Like, that is essentially 50
percent or something like--how are we buying anything that is
untested?
Mr. Fulghum. So I would characterize it this way. First of
all, we leverage testing of--for example, the 130s, we leverage
testing of the Air Force. So while we didn't do the testing, we
leveraged testing that DOD did. In another case, while we
didn't do operational testing, we did acceptance testing.
Let me just be very clear. Since I have been the under
secretary for management in the acting role, we have had ARBs,
and every ARB, no program moves forward without Test and
Evaluation looking at us and saying, ``Yes, we are comfortable.
We have looked at the test plan, we have an accurate
assessment, and we are good with it moving forward.''
So I believe we have fixed that problem. But, in the past,
as she has said, some programs have not had all the KPPs, as
she identified, documented in a way that said how we went
through that assessment.
Mr. Perry. So, real quick, since my time has expired, but
just to finish the thought: So now that you are here and you
have instituted the program, how long until people like me see
results?
Mr. Fulghum. So I think you are already seeing results----
Mr. Perry. I will let you stop there.
Mr. Fulghum. Okay.
Mr. Perry. I don't want to hold other folks up, so, in the
interest of time, I appreciate it. We will continue.
Mr. Fulghum. Yes, sir.
Mr. Perry. With that, the Chairman now recognizes the
Ranking Member, the gentlelady from New Jersey, Mrs. Watson
Coleman.
Mrs. Watson Coleman. Thank you very much.
I have a lot of questions, so let me see if I can get
really quick answers, though. I want to start with the GAO.
Do you think the Department is moving in the right
direction? Is the Department organizing appropriately? Is it
creating the entities necessary to ensure that there is good
decision making in the first place, accountability and then
verifiability? Is it moving in the right direction?
Ms. Mackin. I think it is moving in the right direction.
As you know, there are acquisition oversight
responsibilities at all----
Mrs. Watson Coleman. Yes.
Ms. Mackin [continuing]. Levels in the Department, from the
USM to PARM and, importantly, the components and the program
offices. I think, if I had to pick one area where I think more
could be done, it is at the component and program office level.
The policies, as we have said for many years, are sound. It is
a matter of following them in practice.
Mrs. Watson Coleman. So the component, and what was the
other thing you said? Component and----
Ms. Mackin. Program offices.
Mrs. Watson Coleman. Programs.
Ms. Mackin. So down to the lower levels in the
organization.
Mrs. Watson Coleman. Yes. Thank you.
Let me move on to Mr. Fulghum, because you mentioned
something in testimony that I read that had to do with
personnel. I don't know if it was inadequate personnel, not
enough personnel.
To what extent are we having these concerns about the
Department's success here having to do with personnel as
opposed to systems? What is the issue with personnel?
Mr. Fulghum. So I believe the issue you are referring to is
the program office having adequate staffing and the training of
those folks.
So what we have done is we have done a program assessment
of the staffing needs of the various programs out in DHS. There
are gaps in those programs, just like there are gaps in
staffing needs across the Department, and we are working to
aggressively fill those gaps.
In addition to that, we have an excellent training
institute where we get interns. We have about 60 at any given
time going through the pipeline. We graduate about 30 a year to
feed those programs. So I believe we are on the right track.
The last thing I would say very quickly is that no
program--again, every program that comes before us has to talk
to us about staffing. They have to show us how many folks they
have on board versus what they need. If it is not adequate,
that is one of the considerations, whether they move forward or
not.
Mrs. Watson Coleman. So do you have an issue with
recruiting people or training people or retaining people?
Mr. Fulghum. So I think we have an excellent recruiting
tool in our acquisition institute. In the past, we have had
some trouble placing them and retaining them. Tight budgets
mean folks were squeezing down the number of folks they had. I
think we have solved that now, and we are able to place those
graduates within DHS and keep them.
Mrs. Watson Coleman. So the memo that I referred to that
was just delivered to Congress, I guess, yesterday--or today,
excuse me--referred to a number of instances where you deviated
from--or not you, but the Department deviated from its
practices and granted waivers.
There was an indication that there was going to be an
assessment of those instances and that there was going to be, I
guess, a finding, one way or the other, with regard to those
waivers that were given. Has that been done?
Mr. Fulghum. So we agreed with GAO. I issued an ADM, I
believe yesterday, an acquisition decision memorandum, that
said three basic things.
First of all, it told program offices to give us a 5-year
projection on those programs and sustainment in terms of cost.
The second thing it did--and this is very important--is I
said, ``I need an end date. When is this program scheduled to
be done and be complete?'' Because that is important for us so
it signals when we have to start looking for the next
investment.
The third thing that we asked my office to do in CFO is
simply to make sure that we are looking at these 42 programs as
we go through our normal programming and budgeting process,
that they get the appropriate visibility so that we make sure
that we are not seeing cost growth or things of that nature and
we can address it through the budget process.
Mrs. Watson Coleman. What, if anything, do you need from
us?
Mr. Fulghum. Well, as----
Mrs. Watson Coleman. Besides calling you down every other
day for a hearing.
Mr. Fulghum. I think the bill that was passed last year
would certainly help us codify and give us the authority that
we need. It would codify the framework that we have.
I think you are going to have to give us some time, and I
know you hear that a lot from people that sit up here, but you
are going to have to give us some time, in terms of maturing
the joint requirements process and getting the foundation that
started poured concrete over so that it is institutionalized.
But I think we are making huge improvements each and every
day, and I think our acquisition process is getting better.
Mrs. Watson Coleman. Thank you, Mr. Chairman. I yield back
my time.
Mr. Perry. The Chairman thanks the gentlewoman.
The Chairman now recognizes the gentleman from South
Carolina, the maker of the bill, Mr. Duncan.
Mr. Duncan. Thank you, Mr. Chairman.
Thank you.
It is almost a year ago that we sat in this very room and
had this same conversation about acquisition reform for DHS. We
still see a GAO report that talks about schedule delays for up
to 4 years, the need for baselines and performance metrics, the
need for program oversight and performance discipline. The
bottom line is we see programs and solutions which are late,
cost more, and do less than originally promised.
Last year, the House passed a bill that I authored to put
acquisition reform in place. Secretary Johnson assured me that
it wasn't necessary, that he was going to implement the same
acquisition reforms at DHS. I hope that is the case.
I hope we will continue to talk about accountability,
discipline, and transparency because the Nation is $18-plus-
trillion in debt, and every dollar that is wasted through
schedule delays or the lack of this acquisition process that is
necessary, with the necessary metrics and oversight, is a
dollar that can't be used to defend our borders, can't be used
to protect our communities or protect our citizens.
So I think this is so important. I would love to see this
committee and the Congress pass a version of an acquisition
reform bill similar to what we passed last year, maybe with a
few changes.
So the question I have--and, Ms. Mackin, you were, I
believe, in this committee last year when we were having these
conversations.
The question I have, Mr. Fulghum, is, what is happening
over at DHS? With Secretary Johnson's assurances to me last
year that he was going to continue down this track and put
forth an internal policy for acquisition reform, bring me up to
speed.
Mr. Fulghum. Okay. I can tell you what we have been doing
over the last year.
First of all, as I said, we stood up a joint requirements
process, which is key to improving acquisition. It is up and
running. It has approved its first joint requirements document.
That is one document, I know that, but that is a strong signal
that we are serious about getting the requirements piece right.
What Secretary Johnson was also talking about is making
sure that we have the right folks doing strategy because
strategy drives requirements. So we have reorganized our policy
to be a strategy and planning function that feeds the
requirements process.
Then, from the acquisition oversight perspective, we have
conducted over 22 ARBs. They are not ARBs where we just sit
around and discuss things; they are outcome-oriented ARBs. I
have chaired 13 of them myself. We have had programs that have
come in, like Air and Marine, that haven't been to an ARB in at
least 4 or 5 years. They came, we gave them actions, and they
are doing those actions. We would be happy to share with you
the progress we are making in terms of each one of those
programs.
So I believe that, again, we have a ways to go, but the
Secretary charged us with getting acquisition right, and we are
doing it.
Mr. Duncan. Ms. Mackin, do you agree with that assessment
in the 2015 report that just came out?
Ms. Mackin. I guess ``cautiously optimistic'' would be the
way I would phrase it.
We have been calling for the Joint Requirements Council,
for example, to be reformulated since 2008. So now it is
chartered; that is good. We haven't seen any outputs yet. I
know aviation requirements was first up. So we haven't seen the
documentation. I look forward to looking at it but, more
importantly, seeing an output. Are requirements going to be
considered across the Department and in more of a portfolio
aspect so that there is not some duplication that may be there
right now?
I do think requirements is the most important consideration
right now for the Department.
Mr. Duncan. All right. Do you agree that this type of
oversight from Congress is important?
Ms. Mackin. Absolutely. As was mentioned, we also did
definitely support the bill from last year. I think it would go
a long way toward codifying some roles and responsibilities
within the Department, calling for acquisition baselines for
all programs, reporting structures when there is a breach of
cost, schedule, or performance thresholds and so forth.
Mr. Duncan. I want to thank you. Thank you for all your
work, your work, and also at the Department with Secretary
Johnson. I would love to see where a new program, not some of
these that we have talked about in the past, but where a new
program is brought forward, you have advised Congress that this
is how you are going to acquire, this is the baseline, this is
the metrics, this is the performance standards we have put in
place, this is sort of the review that we are going to do, and
let us track that process, as well. Because I think it is
important that we save our taxpayer dollars in these times.
Mr. Chairman, it is 3:15 in the afternoon, 3:20. It is not
the grooviest time slot, whether you are on TV or whether you
are in Congress in a Congressional committee. C-SPAN is
probably not covering this. This isn't the grooviest topic that
is out there. But it is so important when we talk about saving
taxpayer dollars, because every dollar is important, so I
commend you for that.
I yield back.
Mr. Perry. The Chairman thanks the gentleman.
You know, as I read through the briefing, you know, you
look at up to $10 billion in acquisition-cost loss. I don't
know, $10 billion seems like real money to me around here, and
we could probably use it on occasion, from some of the things I
have seen.
But, with that, the Chairman now turns to the gentlewoman
from California, Mrs. Torres.
Mrs. Torres. Thank you, Mr. Chairman.
Mr. Fulghum, DHS has the third-largest budget in--your
agency is the third-largest, with $18 billion spent in goods
and services annually.
This report has also identified that personnel has failed
to follow established guidelines. What factors contribute to
the on-going schedule delays, cost overruns, and the failure to
complete programs as intended?
I know that you have been asked this over and over, and we
will continue to ask over and over because of the seriousness,
you know, of the reports that we are receiving. I tend to agree
with my colleagues, that we have to protect taxpayers' dollars,
and this is the only avenue that we have to do that.
Mr. Fulghum. We agree with that.
I will start with, again, the requirements process. A
better-defined requirement leads to a better cost estimate,
which then leads to a better budget build. That alone won't do
it, but that puts the program on a good start.
As a part of that requirements process, one thing I need to
mention is that our S&T Directorate is a key member of that
body because they need to look at the technical aspects of what
the requirement is and how we are going about solving that
requirement to make sure it is technologically feasible.
Because, as she has mentioned in her report, at times you have
a good requirement but it is just not technologically mature.
So why are programs over cost? Because, again, we need
better-defined requirements, and it will get you a better cost
estimate. But I will be frank with you; budget uncertainty has
certainly contributed to this. You know, our budgets have been
going up and down, and the timing associated with getting those
budgets has definitely been a contributing factor.
Mrs. Torres. So how do you intend to complete the 22
acquisition programs as conceived? How will the Department
address the shortfalls in funding that have already been
identified?
Mr. Fulghum. So, for the six programs that have been
mentioned here today that need an approved program baseline,
they will have one by the end of this year. Because what I have
told those programs is simply this: I need a goalpost, first of
all. Then we will get a revised cost estimate, and then we will
be able to come to closure on those programs.
Each one of them are in various stages of their acquisition
life cycle, but I can tell you that, where they are missing a
cost estimate, by the end of this year we will have 7 of the 10
that need cost estimates done. The other three will be done by
the first quarter of 2016. So we will have that done.
Then those that are in breach will come back in front of
the ARB, and they will be told, I need to hear from you how you
plan to get the program back on track.
Mrs. Torres. Last, will you walk me through the process,
the actions that DHS is taking to ensure that the ARB is
meeting consistently to review the major acquisition programs?
Mr. Fulghum. So, a couple things.
One, we have had 22 ARBs, I think, in the past 12 months,
13 while I have been there. So it is the responsibility of the
director of PARM to look out and see when the next major
acquisition milestone event is. Or if we have said, I want to
see the program every 3 to 6 months, whether there is an
acquisition decision event or not, it is his job to make sure
those programs are coming in.
As I said before, coming before us is interesting; that is
good. But then what are the actions and outcomes that we want
and that we codify in an ADM? So it is the director's
responsibility to tell me how we are progressing on those
actions, which he does.
Mrs. Torres. So the next step would be for us to call the
director of PARM in here and say, what are the action items,
and why have we not seen the follow-up that we need to see in
order to ensure that you have meetings----
Mr. Fulghum. So I----
Mrs. Torres [continuing]. And that you have actual--you can
show for something. I don't want meet-and-greet meetings.
Mr. Fulghum. No.
Mrs. Torres. You know, we want results.
Mr. Fulghum. That is right. We can provide, and we do
provide, the ADMs. Every acquisition decision memorandum that
we write, we do provide a copy of it to the Congress. We are
happy to do that. We are also happy to come talk to you about
the outcomes that we have had and where we are on each one of
those.
Mrs. Torres. Thank you.
Mr. Perry. The Chairman thanks the gentlewoman.
The Chairman now recognizes the gentleman from Florida, Mr.
Clawson.
Mr. Clawson. Thank you all for coming. Thank you for doing
this hearing, this committee meeting.
I was in Foreign Affairs, and so what happens is we are
often double-booked. So I apologize for being here late, but it
does not indicate a lack of interest.
I showed up in June of last year and came in on a special
election. It is kind of--having come from the private sector,
where we normally try to get as much information as we can
before we make a decision, it has been an odd change for me to
be in an environment where we are asked to make decisions and
there is very little data.
So we keep coming to these committee meetings, and we get
real, live, meaningful anecdotes, of which I do not in any way
criticize, but when it comes to baseline information of any
sort--capital expenditure information, historical or otherwise;
cost information; return on investment to the taxpayer--
whichever part of Homeland Security it is--and I am not trying
to be partisan at all--I just can't get any baseline data.
So sometimes I am asked, well, will you approve a certain,
you know, new border investment or something else, and I always
feel befuddled because, with no data, nothing that demonstrates
any kind of, you know, adherence in the past, it is hard to
make a choice. I don't know how much capital expenditures are
being spent here. I don't know where it goes. We just don't
know anything. The reports I see from the GAO says there is
really no baseline.
So I kind of say to myself, how did we get here, where we
spend all these millions and billions, don't know where it
goes, can't measure how we are doing, and no baseline in place?
Does that make sense?
When I go see--for example, I went to see Mr. Fugate at
FEMA. He says he is setting--he never had it before--he is
setting in the baseline. We believe him; looks like he is doing
all the right things. But, on a general sense, I would like to
help in a nonpartisan way, but I don't know how to do that
without any data, and I don't know how to get it.
So you all are probably getting better data than we see,
and I don't know how much of that is because Congress becomes
partisan. I would just like to be able to get some data so we
would know whether taxpayers are getting a fair return and
people are doing a good job. That doesn't seem too complicated.
No matter who I ask, who have sat in your chair, I have never
received any data. I am not trying to be critical or criticize;
I would just like to know where things stand.
Now, does what I just laid on you, does that seem par for
the course, or am I missing something obvious here on how to
get enough data to where we can really do our jobs as kind of
the board of directors? I will let you all respond to that one
by one.
Because, with no data, I can't say who is doing a good job
and who is not. I am sorry if any of this repeats what has
already gone on today.
Ms. Mackin. I guess I would comment, just speaking about
major acquisition programs. There is a database that the
Department has that was part of the work we did. We went to
look at how good the data was. So that database is supposed to
have cost estimates for all these programs, baseline data,
schedules, changes to those schedules, all the information that
you might be talking about.
We did find inaccuracies. In fact, the data wasn't reliable
enough for us to really assess. But that was one recommendation
we made. Again, it goes back to program managers and the
components. They are supposed to be going in there and entering
the correct data for their programs and validating it. DHS
agreed to see why that wasn't happening.
Mr. Fulghum. So, as she said, it is not the data; it is the
quality of the data. The data is there. So let me tell you what
we are doing about it.
We have talked to each and every chief acquisition
executive and said what is in the system she is referring to
needs to be updated monthly and it needs to be accurate. So
what we are going to do is, each month we are just going to
start measuring the validity and accuracy of that data.
Because what she is also referring to is we provide
Congress a comprehensive acquisition status report every year
that has all the things she just described in it. The criticism
in the past is some of that data is not accurate. It is better
than it was, but more work needs to be done. But we do have a
comprehensive acquisition report that we provide each year, and
we provide quarterly status updates.
Mr. Clawson. Who sets the goals?
Mr. Fulghum. With regard to?
Mr. Clawson. With regard to how much improvement on the
baseline, how much implementation on the baseline.
Mr. Fulghum. So, one of my jobs is to say how much better
are we going to get over time. That is one of my jobs, working
with the component acquisition executives and the program
managers.
Mr. Sims. Sir, it is a pleasure to meet you. My name is
Cedric Sims.
I would share with you that one of the things that I would
share with the program staff is that the programs often--the
way that they began is how they are going to end. So there are
a lot of complex programs at the Department that had a rocky
start and probably haven't quite gotten right yet.
With respect to data, there was a number of systems that
were implemented to support data collection. Some of those
programs were on their own; some of them were at headquarters.
Finding a common way to get that data in one place was a key
objective of PARM. I believe the GAO report refers to some of
those systems.
At some point, realizing the data at the beginning is not
going to be pretty, and understanding that sometimes there is
training so people understand and agree the same number means
the same thing--when we talk about a cost estimate, let's all
agree to what a cost estimate actually is. Then, from that
point, improvements can be driven.
So, from that, certainly, PARM as an organization had
traditionally helped do the validity and the validation work
around the data collection, and PARM's role as an independent
arbiter of that is very critical and continues to need to be
reinforced.
Mr. Perry. If the gentleman would yield, it is my
understanding that the report--there is a report given with
some of the data or much of the data that you have asked for,
but, by statute, it goes to Appropriations, who is not always
or often willing to give to it this committee.
In the legislation that is being offered, there would be a
solution set there where we, too, would get the data. So that
should be helpful to you.
Mr. Clawson. Right.
I guess my point is, or one of my points is, data against a
baseline, against a goal, that has been previously discussed
then allows folks to be able to make some sort of rough
judgment on performance and in terms of accountability. If we
have a baseline in this committee on much of the cost data and
capital expenditure data of the Department, we haven't seen it.
Therefore, if you show us progress, it is hard to measure
progress without having had a baseline.
When we had the hearing here on capital expenditures, we
were given a list of capital expenditures from 2010, as I
recall. I was embarrassed.
So, as much as you all can put it in a package that the
board of directors or the committee can understand in a summary
state and, therefore, be able to make some sort of judgments
and some sort of conclusions, then we can be supportive on the
direction of the Department. Does that make sense to you all?
So on every group that comes in here, I am always urging,
please give us data in a way that we can draw performance
conclusions in a clear managerial way, just like the folks that
are running the departments.
Massive data that is uncollated or unconnected in systems
that aren't integrated and in managerial cost data that is not
defined across the organization probably won't--it just swamps
me, you know, and probably won't--I think, Dr. Sims, you
understand what I am saying here.
So if you are not integrated yet inside enough to where you
can come up with common data for yourselves to manage the
organization, it will be impossible for us to do so from this
side. Then we just get into partisan criticizing based on
anecdotes as opposed to real data.
I don't mean to sound, you know, like I am going on and on
here, but, Dr. Sims and both of you all, does that make sense?
Where are we on that? How close would we be in order to come up
with some sort of managerial summary?
I am sorry if I am taking too long.
Mr. Perry. We are going to move on. We are going to do a
second round here just to make sure we get all the questions--
give an opportunity for all questions to be asked.
Mr. Sims, you are the former executive director, as stated,
of PARM. A couple things: I am just wondering what you see the
challenge is. Is it more poor oversight by DHS? Is it more--or
would you characterize it as poor program management from a
component and systematic approach, if you had to choose?
Mr. Sims. Well, you give me a difficult set of choices
there.
Mr. Perry. Yeah. We have them every day here.
Mr. Sims. Indeed.
I apologize, but I wouldn't characterize it as either, if
you don't mind, sir.
I would say that what we have is a circumstance where, when
a program is put under the hot light of an acquisition review,
things get right. They really do. There is no question. I think
that that has been a very effective process.
But DHS has a very vast enterprise, and so scaleability is
important. Baselines are absolutely the first thing that must
be established for programs. If we don't have a baseline, if we
don't have anything to evaluate, we have no way to measure
progress.
It would be a welcome thing, I think, at some point, to see
a number of baselines coming and being reported as being
rebaselined as programs mature their processes and really
understand what those baselines should be and how the program
can ultimately deliver on the performance expected.
We have a phenomenal program management corps at the
Department of Homeland Security. I would recognize that there
are several outstanding program executives at DHS, but there
are also some areas for improvement. I think, often, when you
see a successful program, you can point to a very successful
program executive running that program.
Mr. Perry. Let me continue with you. This is a little bit
of an uncomfortable question, but I think it is important to
determine, if we can, some of the facts here or at least your
perception. Because there is potentially a trust issue, and, of
course, the public may see this differently than maybe what
might be alleged.
But there was the wife of a former DHS inspector general,
Mr. Charles Edwards, who I am not familiar, so--who faced
serious--Mr. Edwards apparently faced serious allegations of a
lack of independence and nepotism. Apparently, Ms. Edwards was
one of the employees at PARM.
Can you flesh that out for us at all? Can you tell us, is
that normal? Is there a policy--and it may be one thing to be
two members of the same family in the organization, but when
one is the inspector general, you can see the perception, if
not the reality, that it creates.
Is there anything that you can impart to us to kind of
allay our fears that this was just purely nepotism, that there
might have been undue influence, et cetera?
Mr. Sims. Yes, sir. I would be happy to. I don't find that
uncomfortable at all.
We have the benefit of being able to scale PARM fairly
significantly in terms of staff and put out some job
announcements for opportunities. As I recall, I believe her
name was Madhuri Edwards. She was selected as one of the
individuals for PARM.
At that time--and I just want to be very clear--I was the
executive director of the office. I had a number of staff that
were responsible for staffing those positions. I hired my
deputy directors and told them to run with it from there. Her
degree of candidacy and the degree to which she was the
appropriate selectee for a role, I can only believe that the
process worked as it should.
She was not an employee of mine. I had departed PARM by the
time she actually reported to work. So I can't speak to her
performance thereafter.
Mr. Perry. Thank you. I appreciate it.
With that, I will yield to the Ranking Member, Mrs. Watson
Coleman, for questions.
Mrs. Watson Coleman. Thank you, Mr. Chairman.
Dr. Sims, I want to talk to you a little bit because you
have been inside and now you are outside, and I would like to
just kind of get your perspective on a couple of things.
What impact do you think that the Secretary's One DHS
initiative is having on increasing morale among the acquisition
personnel and on producing better outcomes regarding program
management?
Mr. Sims. Madam, thank you again for the opportunity to
appear before you.
I think that that is yet to be seen. I think the
opportunity to improve morale is there. I think that most
employees at the Department--I am just reflecting upon my
time--had a good opportunity to mentor a number of employees
that were seeking opportunities to come into the Executive
Service at some point in their career. I found that most were
seeking authenticity, consistency, clear messaging, and so
forth. Certainly, I can see out of the message, the unity
message from Secretary Johnson, very, very strong intent there
to drive that kind of consistency and authenticity in message.
Also, too, DHS has a phenomenal mission, and every time we
had an employee that was detailed from another component, they
found that they were enriched by that opportunity. I think the
Unity of Effort will likely open avenues for components to
share the best and the brightest across the organization and,
quite frankly, utilize resources where they are best needed at
the Department.
So I see it as a positive opportunity, but, you know, the
time for that to actually be shown as effective, I think we
will still see that.
Mrs. Watson Coleman. Yeah.
Whenever we hear from someone, when we have a discussion
with the Department, we hear of this great effort, this Unity
of Effort that Secretary Johnson has advanced, and it is always
spoken of in a very encouraging and supportive way. So we look
forward to the fruit that it will bear, because it does seem as
if we are moving in the right direction in a number of areas.
That it is at a department with such diversity and just so
many things happening at one time is amazing. We will never be
perfect. I mean, as long as we are human beings, we will never
be perfect. So we need our systems and our accountability there
so that we don't continue to make the same mistakes over and
over and over again.
To that extent, what additional steps do you think that the
under secretary for management and executive director of PARM
should take to ensure that the acquisition personnel have the
training and tools to implement effective baseline
measurements? Do you think that there is any need for
additional policy authority or legal authority? If so, what
would that be?
Dr. Sims.
Mr. Sims. Well, madam, I had an opportunity to take a look
at the bill from the prior Congress, and I believe that that
would be a fantastic product to support institutionalization of
some of the best practices at the Department.
I do believe that, within the Department, that policies
that are in place are very robust. I think more of an
understanding of how to actually apply them in different
contexts will continue to enhance the application of that, so,
you know, a guidebook that says, this is how you do this. DHS
has provided one in the past regarding this. As we continue to
refine the kind of capabilities that are delivered, we need to
continue to provide that guidance to the programs--a playbook,
a roadmap, some way that kind-of helps everybody understand
what this is about.
Finally, I am encouraged and heard recently that there are
some efforts to rationalize roles and responsibilities.
Unfortunately, we see some things as black-and-white, and they
never were intended to be.
I note there are several efforts on-going to strengthen the
role of the CIO at the Department. I think that that should be
in direct support of efforts to strengthen acquisition
management at the Department. Those things don't need to be in
conflict. Again, I benefited from a prior career and working
very closely with the DHS CIO and would hope that that will
continue at the Department.
Mrs. Watson Coleman. Both you and Mr. Fulghum have both
mentioned the issue of maturation and institutionalization of
the changes that are taking place. I agree that we do need to
be mindful of that also.
Mr. Fulghum, you referred to having issued an ADM recently
with regard to the memo that we received. I am just wondering,
is there a time frame for, sort-of, the, you know, execution of
the elements that are identified? What are we looking at in
terms of a response?
Mr. Fulghum. So we have asked for the program offices to
come back by the 29th of May to give us, again, that 5-year
cost assessment. Then we well--as well as, again, that program
end date.
Then in the next current budget cycle, which is the fiscal
year 2017 budget cycle, we will take a look at those 42
programs in terms of where they are in their life cycle against
that cost estimate and make the appropriate budgetary
adjustments.
Mrs. Watson Coleman. Thank you.
Thank you very much, Mr. Chairman.
Mr. Perry. The Chairman thanks the Ranking Member.
We are expecting votes anytime, but, in the mean time, we
will recognize Mr. Clawson again, the gentleman from Florida.
Mr. Clawson. Mr. Fulghum, do we have integrated systems in
IT purchasing, HR, financial, across the different areas of the
organization?
Mr. Fulghum. No, sir.
Mr. Clawson. Is there a program under way to do that, or is
the thinking to leave it decentralized?
Mr. Fulghum. No. We are looking on our financial systems--
for example, we are well under way with a modernization effort,
a shared services solution, wherein we go look at the current
state of the market, and then we--my words--ride on those
systems. So we have TSA, Coast Guard, and DNDO scheduled to
begin that process at the end of this fiscal year, and then we
will move each one in a successive year.
Right now, we have six core financial systems in the
Department, and the goal is to reduce those and go to a shared
service solution.
Mr. Clawson. Yeah. That is a good idea. How long will that
take?
Mr. Fulghum. Given our current budget, we are scheduled to
be done in 2020. What I would like to do is see us accelerate
that, but it will be budget-dependent.
Mr. Clawson. Right now what you do is you integrate the
data at headquarters level; is that right?
Mr. Fulghum. So, from a financial systems perspective, we
have some business intelligence that takes those disparate
systems and integrates the data. But it is not ideal.
Mr. Clawson. Do you have integrated purchasing?
Mr. Fulghum. We do not have integrated purchasing
integration with our financial systems across the board. We
have some but not a complete integration in the systems, which
is, again, a fundamental requirement of our financial systems
modernization effort. They have to provide procurement
integration.
Mr. Clawson. So do we have a way to measure how good we buy
things or not? Or you let each entity do that now.
Mr. Fulghum. So we do have metrics on how well we are
performing in buying good and services. Our procurement officer
has that. Can we be better? Yes. But we do have metrics on how
well we are doing.
Mr. Clawson. Okay.
Then the last question: How long before--you are not going
to have an integrated system until 2020 unless you get more
money to go quicker. I understand that. So, in the mean time,
you integrate at a middle level or an upper level--I understand
that--because management has to run the operation. I got all
that.
Even if you measure on a local basis, how long before all
of your different entities or organizations have baselines?
What is the goal so that everybody has the measurable baselines
that all of you all referred to earlier?
Mr. Fulghum. So, if we are talking on our acquisition
programs--so we have six programs that she referenced that will
have acquisition program baselines by the end of this year,
from which to measure them going forward.
Mr. Clawson. Sorry if I missed that when I was gone.
Mr. Fulghum. I would note that, several years ago, we had
42 programs. We are down to six. We will get those six done
this year.
In terms of cost and schedule, particularly cost, we have
10 programs left that don't have a good cost estimate. We will
have seven of those done by this year, the remainder done in
early 2016.
Mr. Clawson. Your IT system will have a managerial cost
function that you can spread across each one of the
acquisitions, right?
Mr. Fulghum. So, as we move towards a modernized solution,
we will have a common account structure, which is another
challenge for DHS. We came from lots of different agencies.
That common account structure will give you what it is you are
looking for.
Mr. Clawson. Okay.
So the final word I have and the most important: It feels
to me like you are dealing in 1990 or 1985. So, good luck. You
have a lot of work to do. Anything we can do--I mean, you know,
I am being totally serious here. You have a rough way to go
ahead of you. You have a lot of work to do. So you are
integrating while you are improving performance at the same
time, and that is not easy in any environment.
Mr. Fulghum. Yes, sir.
Mr. Clawson. So anything that we can do and I can do to
support, the door is open and we are ready to do so. Any
information that would be helpful so that we could see how you
are doing, that is also appreciated.
Mr. Fulghum. Yes, sir.
Mr. Clawson. Thank you for all your work, because I know
this is a tough job.
Mr. Fulghum. Yes, sir.
Mr. Perry. The Chairman thanks the gentleman.
Just one final note before we leave to vote and adjourn the
meeting. It is our understanding that there has been emphasis
put on joint requirements. I think the Department has about,
roughly, 220,000 employees, and, for the joint requirements, 6
staff members have been designated or are designated.
So if, Mr. Fulghum, if you can verify that and tell us that
that is appropriate, and then if Ms. Mackin can also validate
that, or if you have concerns about that, that would be great.
Mr. Fulghum. Yeah, I believe we do have six on board today.
I believe that is accurate.
Mr. Perry. That is the appropriate number?
Mr. Fulghum. I think we are still looking to expand that
capability. We are leveraging, as I said in my opening
statement, five portfolio teams as an underpinning, but I
believe we are going to have to expand that, not only at the
headquarters but also within the components, because that is
where the requirements come from.
Mr. Perry. Ms. Mackin, any thoughts?
Ms. Mackin. Yeah, I don't know what the right number is. I
think it is really important, though, to have an outcome. If
that means getting more people on board at the components, I
think that that is what will need to happen. So we will be
keeping an eye on that and getting briefed on how the JRC is
doing.
Mr. Perry. Okay. Thank you very much.
I thank the witnesses for their valuable testimony and the
Members for their questions.
The Members of the subcommittee may have some additional
questions for the witnesses, and we will ask you to respond to
these in writing.
Pursuant to committee rule 7(e), the hearing record will be
open for 10 days.
Without objection, the subcommittee stands adjourned.
[Whereupon, at 3:56 p.m., the subcommittee was adjourned.]

A P P E N D I X

----------

Question From Ranking Member Bennie G. Thompson for Michele Mackin
Question. Ms. Mackin, throughout my tenure on this committee, I
have asked the Government Accountability Office to look into the DHS
acquisition process. Each report GAO does yields troublesome
information. How can DHS ``fix'' the acquisition process? What is the
realistic time line for ``fixing'' the process? Where else you see the
need for Congressional intervention?
Answer. DHS has established an acquisition policy that is generally
sound and reflects key program management practices, but due to
shortfalls in executing the policy, we have highlighted DHS acquisition
management issues in our high-risk updates for several years. Perhaps
most troubling, DHS has allocated more than $5 billion to programs that
do not have baselines approved by DHS leadership even though the
baselines were required by DHS policy. A program's baseline is the
agreement between the program manager, component head, and acquisition
decision authority--often DHS's deputy secretary or under secretary for
management--establishing how systems will perform, when they will be
delivered, and what they will cost. Without an approved baseline, there
is little assurance that tax dollars are being used in an effective and
appropriate manner, which is particularly problematic since we
previously found DHS's portfolio of acquisition programs is not
affordable. Additionally, it is difficult to objectively determine
whether programs without approved baselines are performing well or
poorly; whether programs should be case studies for good practices, or
whether DHS managers should be held accountable for bad outcomes. For
these reasons, DHS must do a better job of implementing its acquisition
policy to improve acquisition outcomes. Congress could potentially
encourage DHS to do so by codifying some of the key program management
practices that DHS's acquisition policy currently reflects, such as in
the DHS acquisition reform bill (HR 4228) that passed the House last
year. More consistent implementation of the policy would be a good step
towards improving acquisition management at DHS, but it will likely
take years to fully resolve the enduring and prevalent challenges
affecting acquisition programs Department-wide, including staffing,
funding, and requirements issues.
Questions From Honorable Cedric Richmond for Michele Mackin
Question 1. GAO has reported in the latest DHS Quick Look that out
of 22 major DHS acquisition programs assessed, the cost estimates for
seven have increased by $9.7 billion, or 18 percent. How does this
escalation in costs prevent DHS from executing its acquisition programs
as intended?
Answer. When programs cost more than DHS leadership has approved,
they effectively decrease DHS's buying power and reduce the amount of
capability the Department will be able to afford in the future. This is
an important issue because half of the programs we reviewed face
significant funding gaps, meaning they would benefit from additional
funding. For example, with the $9.7 billion lost to cost growth, the
Department could have fielded three times as many border inspection
systems as currently planned. These systems help identify weapons of
mass destruction, contraband, and illegal aliens being smuggled into
the country. This is only one example of a program that faces funding
shortfalls, and we identified several others responsible for supporting
border surveillance, cybersecurity, search and rescue, law enforcement,
and other missions.
Question 2. GAO's March 2015 report indicated that DHS lacks
adequate information related to the operations and maintenance costs
for 42 acquisitions programs. What are the ramifications of this
information gap?
Answer. In May 2013, DHS waived the acquisition documentation
requirements for 42 programs in sustainment, meaning that these
programs have been developed, delivered, and are currently being
operated and maintained. This phase of a program can account for more
than 80 percent of its life-cycle costs. Most troubling, we found that
only 1 of the 42 waived programs has a Department-approved life-cycle
cost estimate, which would include the operation and maintenance costs.
DHS lacks insight into the programs' performance and execution of their
funding, which could potentially be billions of dollars. Without
knowing the operations and maintenance cost estimates for these
programs, DHS will not be able to fully plan for and manage funding
requirements across its major acquisition programs.
Questions From Honorable Norma Torres for Michele Mackin
Question 1a. Please discuss the Department's rationale for testing
some of its programs and deploying others without testing them.
Answer. DHS policy establishes that programs generally should be
operationally tested before deploying capabilities. The primary purpose
of test and evaluation is to provide timely, accurate information to
managers, decision makers, and other stakeholders to reduce
programmatic, financial, schedule, and performance risk. However, we
found that DHS leadership allowed four programs to deploy capability
without operational testing for various reasons: The Non-Intrusive
Inspection (NII) Systems Program, the Next Generation Network--Priority
Service (NGN-PS) program, and the U.S. Coast Guard's (USCG) HC-130H/J
and Command, Control, Communications, Computers, Intelligence,
Surveillance, and Reconnaissance (C4ISR) programs.
DHS's Director of Operational Test and Evaluation (DOT&E)
determined that the NII program does adequate acceptance testing on
commercial-off-the-shelf systems, and that it does not need operational
testing until the next generation of NII capabilities is pursued.
Similarly, DOT&E established that the NGN-PS program could use
acceptance testing, among other things, to determine whether service
providers are meeting requirements. As for the HC-130H/J program, the
U.S. Air Force previously conducted operational testing on the HC-130J
aircraft, and DOT&E determined that it did not need additional
operational testing. In the case of the C4ISR program, DHS leadership
approved USCG's plan to deploy capability without operational testing.
USCG officials have decided to test the C4ISR system in conjunction
with aircraft and vessels, rather than on a stand-alone basis, to save
money and avoid duplication. However, we did identify that the USCG
C4ISR system's key performance parameters were not specifically
evaluated during past aircraft and vessel tests, and in 2014 we
recommended USCG fully integrate C4ISR assessments into other assets'
test plans or test the C4ISR program independently.\1\ USCG concurred
with this recommendation, and stated it would implement it in fiscal
year 2015.
---------------------------------------------------------------------------
\1\ GAO, Coast Guard Acquisitions: Better Information on
Performance and Funding Needed to Address Shortfalls, GAO-14-450,
(Washington, DC: June 5, 2014).
---------------------------------------------------------------------------
Question 1b. At what juncture is approval required from the
components' acquisition executives, the Acquisition Review Boards and
senior leadership regarding the operational testing of programs before
they are deployed?
Answer. DHS acquisition policy establishes that a major acquisition
program's decision authority, which is supported by the Acquisition
Review Board, shall review the program at a series of five
predetermined acquisition decision events to assess whether the major
program is ready to proceed through the acquisition life-cycle phases.
One of these events is designated Acquisition Decision Event (ADE) 2A,
and DHS policy establishes that the acquisition decision authority
should approve the program's baseline at that point. This baseline
should establish the program's overarching schedule, including its
operational test events, if any. Subsequently, DOT&E should approve the
program's Test and Evaluation Master Plan, which describes the
developmental and operational testing needed to determine technical
performance, limitations, and operational effectiveness and
suitability. After the program's operational testing, but prior to ADE
3, DOT&E provides the acquisition decision authority a letter assessing
the operational test and the associated evaluation. This letter is
intended to help the acquisition decision authority determine whether
the program is ready to deploy capability at ADE 3. These are key
points at which DHS leadership should approve a program's operational
testing.
Questions From Chairman Scott Perry for Chip Fulghum
Question 1. The Deputies Management Action Group, known as the DMAG
has a crucial role to play in ensuring the Department runs effectively
and efficiently. This is a very important group (one step below the
Department's Senior Leader's Council) and it is involved in major
decisions including the development of the Department's budget and the
joint requirements process.
What policies and procedures currently govern the DMAG and how were
they established?
Answer. Response was not received at the time of publication.
Question 2. Are these policies formally outlined and established in
a DHS policy memorandum? If so, please provide a copy of this
memorandum to the committee.
Answer. Response was not received at the time of publication.
Question 3. What is the process for amending these policies and
procedures?
Answer. Response was not received at the time of publication.
Question 4. As chair of the DMAG, does the deputy secretary have
any special privileges that allow him to set the DMAG's agenda and/or
the way it operates?
Answer. Response was not received at the time of publication.
Questions From Ranking Member Bennie G. Thompson for Chip Fulghum
Question 1. In fiscal year 2014, DHS spent $10.7 billion--a bit
more than one-sixth of its total budget authority--on acquisition of
systems with life-cycle costs estimated at $300 million or more.
Throughout my tenure on this committee, I have seen the Department
throw money at various companies and systems that do not yield results;
thus, wasting taxpayer dollars. However, I know that there are some
companies that have capabilities and still cannot seem to get in the
door at DHS. When the Department makes the decision to spend this type
of money, how much consideration is given to small and minority
businesses?
Answer. Response was not received at the time of publication.
Question 2. According to the Government Accountability Office GAO
could not even assess nearly a quarter of the major DHS acquisitions
assessed in the latest DHS Quick Look, because there has never been a
successful completion of all of the reviews required by the
Department's own acquisition policies. As you prepare to transition out
of the role as acting under secretary for management, how are you
planning on addressing this issue? Have you had a meeting with the
Secretary about this? Do you plan on having a meeting with the incoming
under secretary?
Answer. Response was not received at the time of publication.
Questions From Honorable Cedric Richmond for Chip Fulghum
Question 1. According to GAO's latest DHS Quick Look, 14 of 22
major DHS acquisitions assessed have experienced schedule slips of up
to 3 years on average. What is the Department doing to ensure that
programs remain on track to deliver capabilities to end-users?
Answer. Response was not received at the time of publication.
Question 2. Apparently GAO has identified some gaps in information
that DHS is providing to Congress regarding its acquisitions programs.
How is DHS responding so that Congress will be given accurate and
current information going forward?
Answer. Response was not received at the time of publication.
Questions From Honorable Cedric Richmond for Cedric J. Sims
Question 1. In your testimony, you refer to the implementation of
the Decision Support Tool, or DST as a mechanism to help track the
performance of acquisitions programs. Since its inception, how
effective has the DST proven to be in detecting potential issues with
acquisitions programs?
Answer. Response was not received at the time of publication.
Question 2. In your experience as former executive director of the
Program Accountability and Risk Management Office, how extensive is the
training provided to personnel regarding the use of the Decision
Support Tool and other metrics used to assess acquisitions programs?
Answer. Response was not received at the time of publication.
Question 3. What, if any adjustments or changes would you make to
the Program Accountability and Risk Management Office now that you have
some distance from the Department?
Answer. Response was not received at the time of publication.
Question From Honorable Bonnie Watson Coleman for Cedric J. Sims
Question. As former executive director of the Office of Program
Accountability and Risk Management, what factors would you say have
contributed to the irregularities in data found by GAO in the Next
Generation Periodic Reporting System, or nPRS which caused Congress to
receive incomplete information in the Department's Comprehensive
Acquisition Status Report?
Answer. Response was not received at the time of publication.
Questions From Honorable Norma J. Torres for Cedric J. Sims
Question 1a. What would you characterize as your greatest successes
during your tenure as executive director of the Office of Program
Accountability and Risk Management, or PARM?
From your perspective, how has PARM made progress in overseeing
major acquisitions programs at DHS?
Answer. Response was not received at the time of publication.
Question 1b. In what ways has management of the Department's
acquisitions personnel changed since PARM's creation?
Answer. Response was not received at the time of publication.

[all]