[Senate Report 115-170]
[From the U.S. Government Publishing Office]
Calendar No. 240
115th Congress } { Report
SENATE
1st Session } { 115-170
_______________________________________________________________________
DHS ACQUISITION REVIEW BOARD
ACT OF 2017
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
to accompany
S. 886
TO AMEND THE HOMELAND SECURITY ACT OF 2002 TO
ESTABLISH AN ACQUISITION REVIEW BOARD IN THE DEPARTMENT OF HOMELAND
SECURITY, AND FOR OTHER PURPOSES
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
October 16, 2017.--Ordered to be printed
U.S. GOVERNMENT PUBLISHING OFFICE
79-010 WASHINGTON : 2017
____________________________________________________________________
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma HEIDI HEITKAMP, North Dakota
MICHAEL B. ENZI, Wyoming GARY C. PETERS, Michigan
JOHN HOEVEN, North Dakota MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana KAMALA D. HARRIS, California
Christopher R. Hixon, Staff Director
Gabrielle D'Adamo Singer, Chief Counsel
Michelle D. Woods, U.S. Government Accountability Office Detailee
Margaret E. Daum, Minority Staff Director
Stacia M. Cardille, Minority Chief Counsel
Charles A. Moskowitz, Minority Senior Legislative Counsel
Thomas J.R. Richards, Minority Professional Staff Member
Laura W. Kilbride, Chief Clerk
Calendar No. 240
115th Congress } { Report
SENATE
1st Session } { 115-170
======================================================================
DHS ACQUISITION REVIEW BOARD ACT OF 2017
_______
October 16, 2017.--Ordered to be printed
_______
Mr. Johnson, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 886]
[Including cost estimate of the Congressional Budget Office]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 886), to amend the
Homeland Security Act of 2002 to establish an Acquisition
Review Board in the Department of Homeland Security, and for
other purposes, having considered the same, reports favorably
thereon without amendment and recommends that the bill do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................2
III. Legislative History..............................................4
IV. Section-by-Section Analysis......................................4
V. Evaluation of Regulatory Impact..................................5
VI. Congressional Budget Office Cost Estimate........................5
VII. Changes in Existing Law Made by the Bill, as Reported............6
I. Purpose and Summary
S. 886, the DHS Acquisition Review Board Act, amends the
Homeland Security Act of 2002 to establish an Acquisition
Review Board (ARB) within the Department of Homeland Security
(DHS or the Department). The bill designates the DHS Under
Secretary for Management (USM) as the chair of the ARB. The
bill requires the ARB to meet regularly to, among other things,
provide accountability and consistent oversight of DHS
components' major acquisition programs, which are defined as
those with total expenditures of $300 million or more.
Additionally, the bill assists the Department in its efforts to
improve the management of its major acquisition programs by
ensuring the uniform application of acquisition review
procedures across components.
II. Background and the Need for Legislation
DHS has been plagued by longstanding challenges in managing
its major acquisition programs, resulting in the wasteful
spending of untold billions of taxpayer dollars.\1\ For
example, Customs and Border Protection's (CBP) Secure Border
Initiative Network (or SBInet) was cancelled after CBP had
already spent over a billion dollars on the project, due in
part to cost growth and schedule slippages.\2\
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\1\See U.S. Gov't Accountability Office, GAO-17-346SP, Homeland
Security Acquisitions: Earlier Requirements Definition and Clear
Documentation of Key Decisions Could Facilitate Ongoing Progress 1
(2017), http://www.gao.gov/assets/690/683977.pdf; see also Dana
Hedgpath, Congress Says DHS Oversaw $15 Billion in Failed Contracts,
The Washington Post (Sept. 17, 2008), http://www.washingtonpost.com/wp-
dyn/content/article/2008/09/16/AR2008091603200.html.
\2\Watchdog Recommendations: A Better Way Ahead to Manage the
Department of Homeland Security: Hearing Before the Subcomm. on
Oversight and Mgmt. Efficiency of the H. Comm. on Homeland Sec., 115th
Cong. (2017) (testimony of John Roth, Inspector General, U.S. Dep't of
Homeland Sec.), available at http://docs.house.gov/meetings/HM/HM09/
20170216/105541/HHRG-115-HM09-Bio-RothJ-20170216.pdf.
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The Government Accountability Office (GAO) continues to
identify the management of DHS's acquisition programs as ``high
risk'' in its biennial report on Federal programs vulnerable to
fraud, waste, abuse, and mismanagement.\3\ Specifically, in its
2017 review of high-risk Federal programs, GAO reported that
DHS needs to ``ensure consistent, effective oversight'' of its
major acquisition programs and hold programs accountable for
maintaining accurate and reliable cost, schedule, and
performance data.\4\
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\3\U.S. Gov't Accountability Office, GAO-17-317, High-Risk Series:
Progress on Many High-Risk Areas, While Substantial Efforts Needed on
Others 356 (2017), http://www.gao.gov/assets/690/682765.pdf.
\4\Id. at 361.
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The management of major acquisition programs was also cited
in the DHS Office of Inspector General's (OIG) November 2016
annual report on management challenges facing DHS.\5\
Specifically, the OIG found that the Department continues to
fall short in managing major acquisition programs to ensure
programs align with original cost estimates, are delivered on
schedule, and provide operators with the capabilities
originally intended.\6\ Moreover, the GAO and OIG have reported
that although the Department's acquisition management guidance
is ``generally sound'' and includes best practices,
inconsistent application of this guidance across component
agencies has resulted in a lack of uniformity, and, in some
cases, mismanagement of the Department's major acquisition
programs.\7\
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\5\DHS Office of Inspector General, OIG-17-08, Major Management and
Performance Challenges Facing the Department of Homeland Security 3-4
(2016), https://www.oig.dhs.gov/sites/default/files/assets/2017/OIG-17-
08-Nov16.pdf.
\6\Id.; see also DHS Management and Acquisition Reform: Hearing
Before the S. Comm. on Homeland Sec. & Governmental Affairs, 114th
Cong. (2016) (written testimony of John Roth, Inspector General, U.S.
Dep't of Homeland Sec.), available at https://www.oig.dhs.gov/assets/
TM/2016/OIGtm-JR-031616.pdf.
\7\DHS Management and Acquisition Reform: Hearing Before the S.
Comm. on Homeland Sec. & Governmental Affairs, 114th Cong. 15 (2016)
(written testimony of Michele Mackin, Director, Acquisition and
Sourcing Mgmt., U.S. Gov't Accountability Office), available at http://
www.gao.gov/assets/680/675827.pdf; DHS Management and Acquisition
Reform: Hearing Before the S. Comm. on Homeland Sec. & Governmental
Affairs, 114th Cong. 1 (2016) (written testimony of John Roth,
Inspector General, U.S. Dep't of Homeland Sec.), available at https://
www.oig.dhs.gov/assets/TM/2016/OIGtm-JR-031616.pdf.
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In March 2016, the Committee held a hearing entitled DHS
Management and Acquisition Reform. During the hearing, DHS
Inspector General John Roth testified that among the root
causes hindering the performance of DHS's acquisition programs
is that component agencies ``do not always follow departmental
acquisition guidance, which may lead to cost overruns, missed
schedules, and mediocre acquisition performance.''\8\ Mr. Roth
stated that inconsistent application of DHS's acquisition
guidance has adversely affected the Department's constrained
budgetary resources, the timely delivery of security programs,
and the ability to efficiently use its resources.\9\
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\8\DHS Management and Acquisition Reform: Hearing Before the S.
Comm. on Homeland Sec. & Governmental Affairs, 114th Cong. 6 (2016)
(written testimony of John Roth, Inspector General, U.S. Dep't of
Homeland Sec.), available at https://www.oig.dhs.gov/assets/TM/2016/
OIGtm-JR-031616.pdf.
\9\Id.
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In April 2015, the Subcommittee on Oversight and Management
Efficiency of the House Homeland Security Committee held a
hearing entitled Acquisition Oversight: How Effectively is DHS
Safeguarding Taxpayer Dollars?\10\ During the hearing, Michele
Mackin, GAO's Director for Acquisition and Sourcing Management,
testified that DHS's acquisition portfolio faced significant
challenges because the Department did not have a cost oversight
plan in place for programs whose acquisition documentation were
waived.\11\In addition, the acquisition portfolio had cost
growth issues exemplified by the $9.7 billion increase in life-
cycle cost estimates across just seven of its programs.\12\ Ms.
Mackin testified that DHS would be better positioned to make
informed decisions regarding its acquisition programs if steps
were taken to ensure consistent compliance across components
with its acquisition policy.\13\
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\10\Acquisition Oversight: How Effectively is DHS Safeguarding
Taxpayer Dollars?: Hearing Before the Subcomm. on Oversight and Mgmt.
Efficiency of the House Comm. on Homeland Sec., 114th Cong. (2015),
available at https://homeland.house.gov/hearing/acquisition-oversight-
how-effectively-dhs-safeguarding-taxpayer-dollars.
\11\Id. at 11 (written testimony of Michele Mackin, Director of
Acquisition and Sourcing Management, U.S. Gov't Accountability Office),
available at http://docs.house.gov/meetings/HM/HM09/20150422/103274/
HHRG-114-HM09-Wstate-MackinM-20150422.pdf.
\12\Id. at 6.
\13\Id. at 11.
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S. 886 is designed to address concerns of inconsistent
oversight of major acquisition programs by codifying the
Department's ARB as the mechanism for providing senior-level
oversight of all major acquisition programs. Codification of
the ARB addresses concerns raised by GAO and the DHS OIG by
ensuring that the Department consistently applies a uniform
oversight approach across its components' major acquisition
programs. Although the ARB process is currently in practice at
DHS, the bill strengthens the Department's authority to hold
its components accountable for improper acquisition program
management and acquisition program failures. The bill
specifically delineates the responsibilities of the ARB, to
ensure regularity and clarity in the acquisition review
process. One of the most important responsibilities of the ARB
is reviewing critical documentation for major acquisition
programs, such as the acquisition program baseline, which
establishes the program requirements for cost, schedule, and
performance parameters. The bill designates the USM as the
chair of the ARB, ensuring senior DHS management is aware of
and integrally involved in the Department's acquisition
program.
III. Legislative History
Senators Steve Daines (R-MT) and Claire McCaskill (D-MO)
introduced S. 886, the DHS Acquisition Review Board Act of
2017, on April 6, 2017. The bill was referred to the Committee
on Homeland Security and Governmental Affairs.
The Committee considered S. 886 at a business meeting on
July 26, 2017. The Committee reported the bill favorably by
voice vote en bloc. Senators present for the vote were Johnson,
Portman, Lankford, Daines, McCaskill, Tester, Heitkamp, Peters,
Hassan, and Harris.
IV. Section-by-Section Analysis of the Bill, as Reported
Section 1. Short Title
This section names the bill the ``DHS Acquisition Review
Board Act of 2017.''
Sec. 2. Acquisition Review Board
Section 2 adds a new section 836 to Subtitle D of title
VIII of the Homeland Security Act of 2002.
New subsection (a) of Section 836 defines the terms
``acquisition,'' ``acquisition decision authority,''
``acquisition decision event,'' ``acquisition decision
memorandum,'' ``acquisition program,'' ``acquisition program
baseline,'' ``best practices,'' ``Board,'' and ``major
acquisition program.''
New subsection (b) of Section 836 establishes the ARB. This
subsection outlines the mission of the ARB, namely to provide
uniformity within the Department's acquisition review process,
review major acquisition programs, and review the use of best
practices.
New subsection (c) of Section 836 details the composition
of the ARB, including that the ARB will be chaired by the USM.
New subsection (d) outlines the regular meeting
requirements of the ARB and establishes that the ARB is
required to meet any time that a major acquisition program
requires authorization to proceed through the life cycle
process or is in breach of its approved requirements.
Additionally, this paragraph requires the ARB to meet when the
USM determines that a non-major acquisition program needs
review.
New subsection (e) details the responsibilities of the ARB,
including reviewing acquisition documentation for each major
acquisition program, such as the acquisition program baseline,
which sets forth cost, schedule, and performance requirements
for each such program.
New subsection (f) requires the USM to submit a report to
the House Committee on Homeland Security and the Senate
Committee on Homeland Security and Governmental Affairs that
explains the rationale behind a decision that permits a major
acquisition program to proceed to the planning phase of the
life cycle process without first receiving a Department-
approved acquisition program baseline. This report shall
include a plan of action to ensure that any such program
receives an acquisition program baseline.
New subsection (g) provides that, within one year of
enactment of this bill, the USM is to provide Congress with a
report on the activities of the ARB, including acquisition
decision memoranda for each meeting, results of the systematic
reviews, results of the acquisition document reviews, and
information on activities to ensure that best practices are
adopted and implemented throughout the Department.
V. Evaluation of Regulatory Impact
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill and determined
that the bill will have no regulatory impact within the meaning
of the rules. The Committee agrees with the Congressional
Budget Office's statement that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would impose no costs
on state, local, or tribal governments.
VI. Congressional Budget Office Cost Estimate
August 9, 2017.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 886, the DHS
Acquisition Review Board Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Jacob Fabian.
Sincerely,
Keith Hall.
Enclosure
S. 886--DHS Acquisition Review Board Act of 2017
S. 886 would direct the Department of Homeland Security
(DHS) to establish an Acquisition Review Board to review major
acquisition programs and enhance accountability and uniformity
in the review process for DHS acquisitions. Because the bill's
requirements are largely consistent with existing DHS
procurement policies, CBO estimates that implementing S. 886
would cost less than $500,000 annually; such spending would be
subject to the availability of appropriated funds.
Enacting S. 886 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply. CBO
estimates that enacting S. 886 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2028.
S. 886 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
On March 22, 2017, CBO transmitted a cost estimate for H.R.
1282, the DHS Acquisition Review Board Act of 2017, as ordered
by the House Committee on Homeland Security on March 8, 2017.
The two pieces of legislation are similar and CBO's estimates
of their costs are the same.
The CBO staff contact for this estimate is Jacob Fabian.
The estimate was approved by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
VII. Changes in Existing Law Made by the Bill, as Reported
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill as reported are shown as follows (existing law
proposed to be omitted is enclosed in brackets, new matter is
printed in italic, and existing law in which no change is
proposed is shown in roman):
HOMELAND SECURITY ACT OF 2002
* * * * * * *
TITLE VIII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL;
UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS
* * * * * * *
SUBTITLE D--ACQUISITIONS
* * * * * * *
SEC. 836. ACQUISITION REVIEW BOARD.
(a) Definitions.--In this section:
(1) Acquisition.--The term ``acquisition'' has the
meaning given the term in section 131 of title 41,
United States Code.
(2) Acquisition decision authority.--The term
``acquisition decision authority'' means the authority,
held by the Secretary acting through the Deputy
Secretary or Under Secretary for Management to--
(A) ensure compliance with Federal law, the
Federal Acquisition Regulation, and Department
acquisition management directives;
(B) review (including approving, pausing,
modifying, or cancelling) an acquisition
program through the life cycle of the program;
(C) ensure that acquisition program managers
have the resources necessary to successfully
execute an approved acquisition program;
(D) ensure good acquisition program
management of cost, schedule, risk, and system
performance of the acquisition program at
issue, including assessing acquisition program
baseline breaches and directing any corrective
action for such breaches; and
(E) ensure that acquisition program managers,
on an ongoing basis, monitor cost, schedule,
and performance against established baselines
and use tools to assess risks to an acquisition
program at all phases of the life cycle of such
program to avoid and mitigate acquisition
program baseline breaches.
(3) Acquisition decision event.--The term
``acquisition decision event'', with respect to an
acquisition program, means a predetermined point within
each of the acquisition phases at which the acquisition
decision authority determines whether the acquisition
program shall proceed to the next acquisition phase.
(4) Acquisition decision memorandum.--The term
``acquisition decision memorandum'', with respect to an
acquisition, means the official acquisition decision
event record that includes a documented record of
decisions, exit criteria, and assigned actions for the
acquisition, as determined by the person exercising
acquisition decision authority for the acquisition.
(5) Acquisition program.--The term ``acquisition
program'' means the process by which the Department
acquires, with any appropriated amounts, by contract
for purchase or lease, property or services (including
construction) that support the missions and goals of
the Department.
(6) Acquisition program baseline.--The term
``acquisition program baseline'', with respect to an
acquisition program, means a summary of the cost,
schedule, and performance parameters, expressed in
standard, measurable, quantitative terms, which must be
met in order to accomplish the goals of such program.
(7) Best practices.--The term ``best practices'',
with respect to acquisition, means a knowledge-based
approach to capability development that includes--
(A) identifying and validating needs;
(B) assessing alternatives to select the most
appropriate solution;
(C) clearly establishing well-defined
requirements;
(D) developing realistic cost assessments and
schedules;
(E) securing stable funding that matches
resources to requirements;
(F) demonstrating technology, design, and
manufacturing maturity;
(G) using milestones and exit criteria or
specific accomplishments that demonstrate
progress;
(H) adopting and executing standardized
processes with known success across programs;
(I) establishing an adequate workforce that
is qualified and sufficient to perform
necessary functions; and
(J) integrating the capabilities described in
subparagraphs (A) through (I) into the mission
and business operations of the Department.
(8) Board.--The term ``Board'' means the Acquisition
Review Board required to be established under
subsection (b).
(9) Major acquisition program.--The term ``major
acquisition program'' means a Department acquisition
program that is estimated by the Secretary to require
an eventual total expenditure of not less than
$300,000,000 (based on fiscal year 2017 constant
dollars) over the life cycle cost of the acquisition
program.
(b) Establishment of Board.--The Secretary shall establish
an Acquisition Review Board to--
(1) strengthen accountability and uniformity within
the Department acquisition review process;
(2) review major acquisition programs; and
(3) review the use of best practices.
(c) Composition.--
(1) Chairperson.--The Under Secretary for Management
shall serve as chairperson of the Board.
(2) Other members.--The Secretary shall ensure
participation by other relevant Department officials,
including not fewer than 2 component heads or their
designees, as permanent members of the Board.
(d) Meetings.--
(1) Regular meetings.--The Board shall meet regularly
for purposes of ensuring all acquisitions processes
proceed in a timely fashion to achieve mission
readiness.
(2) Other meetings.--The Board shall convene--
(A) at the discretion of the Secretary; and
(B) at any time--
(i) a major acquisition program--
(I) requires authorization to
proceed from one acquisition
decision event to another
throughout the acquisition life
cycle;
(II) is in breach of the
approved requirements of the
major acquisition program; or
(III) requires additional
review, as determined by the
Under Secretary for Management;
or
(ii) a non-major acquisition program
requires review, as determined by the
Under Secretary for Management.
(e) Responsibilities.--The responsibilities of the Board
are as follows:
(1) Determine whether a proposed acquisition has met
the requirements of key phases of the acquisition life
cycle framework and is able to proceed to the next
phase and eventual full production and deployment.
(2) Oversee whether the business strategy, resources,
management, and accountability of a proposed
acquisition is executable and is aligned to strategic
initiatives.
(3) Support the person with acquisition decision
authority for an acquisition in determining the
appropriate direction for the acquisition at key
acquisition decision events.
(4) Conduct systematic reviews of acquisitions to
ensure that the acquisitions are progressing in
compliance with the approved documents for their
current acquisition phases.
(5) Review the acquisition documents of each major
acquisition program, including the acquisition program
baseline and documentation reflecting consideration of
tradeoffs among cost, schedule, and performance
objectives, to ensure the reliability of underlying
data.
(6) Ensure that practices are adopted and implemented
to require consideration of trade-offs among cost,
schedule, and performance objectives as part of the
process for developing requirements for major
acquisition programs prior to the initiation of the
second acquisition decision event, including, at a
minimum, the following practices:
(A) Department officials responsible for
acquisition, budget, and cost estimating
functions are provided with the appropriate
opportunity to develop estimates and raise cost
and schedule matters before performance
objectives are established for capabilities
when feasible.
(B) Full consideration is given to possible
trade-offs among cost, schedule, and
performance objectives for each alternative.
(f) Acquisition Program Baseline Report Requirement.--If
the person exercising acquisition decision authority over a
major acquisition program approves the major acquisition
program to proceed into the planning phase before the major
acquisition program has a Department-approved acquisition
program baseline--
(1) the Under Secretary for Management shall create
and approve an acquisition program baseline report
regarding such approval; and
(2) the Secretary shall--
(A) not later than 7 days after the date on
which the acquisition decision memorandum is
signed, notify in writing the Committee on
Homeland Security of the House of
Representatives and the Committee on Homeland
Security and Governmental Affairs of the Senate
of the decision; and
(B) not later than 60 days after the date on
which the acquisition decision memorandum is
signed, submit to the Committee on Homeland
Security of the House of Representatives and
the Committee on Homeland Security and
Governmental Affairs of the Senate a report
stating the rationale for such decision and a
plan of action to require an acquisition
program baseline for such program.
(g) Report.--Not later than 1 year after the date of
enactment of this section and every year thereafter through
fiscal year 2022, the Under Secretary for Management shall
provide information to the Committee on Homeland Security of
the House of Representatives and the Committee on Homeland
Security and Governmental Affairs of the Senate on the
activities of the Board for the prior fiscal year that includes
information relating to the following:
(1) For each meeting of the Board, any acquisition
decision memoranda.
(2) Results of the systematic reviews conducted under
subsection (e)(4).
(3) Results of acquisition document reviews required
under subsection (e)(5).
(4) Activities to ensure that practices are adopted
and implemented throughout the Department under
subsection (e)(6).
* * * * * * *