Auditors: DHS procurement is a work in progress

The Homeland Security Department has achieved some important successes in building a purchasing organization but has fallen short in several acquisition areas, according to the Government Accountability Office.

Rep. Tom Davis, chairman of the House Government Reform Committee, noted in a statement that DHS' fledgling purchasing organization 'has been successful in some areas, [but] it still faces challenges in integrating acquisition functions across the department.'

Davis cited DHS' success in using strategic sourcing, which already has led to $14 million in savings and is expected to generate further economies. 'GAO also found that, in 2004, DHS awarded 35 percent of its prime contract dollars to small businesses, exceeding the small business goal of 23 percent,' Davis said.

But the Virginia Republican added that the auditors also had found disturbing trends. 'While an October 2004 directive delegates the responsibility to manage and oversee all DHS acquisition activities to the chief procurement officer, in practice there is little enforcement, and the directive exempts the U.S. Coast Guard and the U.S. Secret Service.' Davis said that the auditors hadn't found any reasonable basis for the exemption. 'Policy decisions such as this one will effectively shackle the CPO in integrating acquisition functions,' he said.

The auditors also criticized DHS for allowing its component units to conduct procurements with little or no central control. For example, the Coast Guard obligated about $2.1 billion in fiscal 2004, or about 23 percent of the department's total, according to the report. The October 2004 policy statement exempting the guard from central acquisition control states that the exemption is mandated by law. 'We disagree,' the report stated. 'We are not aware of any explicit statutory exemption that that would prevent the application of this directive [to the Coast Guard].'

DHS' failure to completely integrate its buying offices and methods could lead to workload imbalances and other problems, according to the report. The department also has built a dual accountability structure for some procurement functions, assigning their oversight to both the CPO and the heads of the component organizations, potentially causing other problems.

The auditors said the CPO needs additional staff to enforce department acquisition policy and that the central purchasing office lacks some management controls over its contracts with other federal organizations.

Department officials generally agreed with the GAO recommendations, according to a written response included with the report. In some cases, the department officials said they already had adopted improvements that would fix the problems, but GAO disagreed and said more work needs to be done.

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