GAO: DHS needs more caution in using special acquisition authority

The Homeland Security Department used its special acquisition authority 37 times to purchase at least $450 million worth of goods and services since 2004, according to a new report from the Government Accountability Office.

The bulk of the money, $347 million, was spent on seven contracts, GAO said. The two largest contracts were for $106 million to Northrop Grumman Corp. and $105 million to BAE Systems, both for systems to counter the threat of shoulder-fired missiles that terrorists could use to attack aircraft from the ground.

The department's special authority, which expires in September, provides DHS with greater flexibility, but comes with the risk of reduced accountability, lack of transparency and ethical concerns. GAO has recommended greater management control over such contracts to reduce the risks.

The special acquisition authority also is referred to as "other transaction" authority. Congress created it in 1958. It is available primarily to military agencies. Transactions conducted under the authority are exempt from the Federal Acquisition Regulation.

DHS officials described the special authority as a "critical tool" that has given the department needed flexibility and allowed for development of prototype technologies. It has been used primarily by the Science and Technology Directorate.

The department has taken steps to prevent conflicts of interest while using the special authority, including creating guidance on auditing, creating a training program and improving controls over such conflicts, the report said.

Despite those efforts, there still are risks in such contracts, GAO said.

"Risks inherent with the use of other transaction agreements create several accountability challenges. These challenges include attracting and ensuring the use of nontraditional contractors, acquiring intellectual property rights, ensuring financial control and maintaining a skilled acquisition workforce with the expertise to create and maintain these agreements," the GAO report concluded.