DHS needs better oversight of services contracts: GAO

The Homeland Security Department is paying billions to professional service contractors to perform tasks that are similar to work usually reserved for government employees, officials said today.

The department's reliance on outside help in supporting inherently governmental tasks may put DHS' decision-making at risk of being unduly influenced by contractors, the Government Accountability Office concluded in a new report released at a hearing of the Senate Committee on Homeland Security and Governmental Affairs.

In nine contracts that were closely reviewed by the GAO, department officials did not follow federal guidance in assessing and addressing the risk of allowing contractors to support inherently government tasks such as preparing budgets, developing policies and regulations and coordinating intelligence, GAO said.

DHS program officials "did not assess the risk that government decisions may be influenced by, rather than independent from, contractor judgments ? as required by federal program guidance," GAO said in the report. "In addition, none of the program officials and contractors we spoke with was aware of these requirements, and few believed that their professional and management support service contracts required enhanced oversight."

Senate leaders described the findings as troubling. "The GAO report we receive today delivers a sobering judgment, especially when so much of DHS service contracting comes very close, or in some cases crosses the line, to the performance of inherently government functions," Sen. Susan Collins (R-Maine), ranking Republican on the committee, said at the hearing.

The department spent $15.7 billion on goods and services in fiscal 2006, of which more than $5 billion was obligated for management support, including acquisition support, strategic planning and human resources, GAO said.

In more than half of the 117 cases reviewed at DHS, the work being performed by the hired help was closely supporting inherently governmental functions, the GAO said. Under the Federal Acquisition Regulation these functions require greater oversight and present greater risk to the government.

The nine contracts that were closely reviewed by GAO included a $42.4 million contract awarded to Booz Allen Hamilton Inc. for support in acquisition, policy, budget and other tasks of the Information Analysis and Infrastructure Protection Directorate, said DHS spokesman Larry Orluskie. Earlier this year, that contract was allowed to complete its term, and then it was split into several smaller contracts that were competitively bid, he said.

In response to the report, Elaine Duke, chief procurement officer for DHS, said seven of the nine cases reviewed in detail by the GAO are no longer active contracts. Furthermore, DHS officials are reviewing all noncompetitive contracts and addressing the issues raised by GAO, she said.

Most of the problems outlined by GAO are due to the severe shortage of acquisition and professional staff at the department and governmentwide, and also by DHS' special mandate to fulfill its antiterrorism missions urgently.

"This is not just a DHS issue, it is a federal problem," Duke said at the hearing.

Nonetheless, Collins and Sen. Joseph I. Lieberman (I-Conn.), who chairs the committee, expressed concern at the findings and pledged to work hard to pass their legislation to strengthen controls on contractors.

"This is a tough and critical report," Lieberman told Duke. "But we are not here to play 'gotcha' games. ? We want to work together to make the department work."