Legislators rip DHS contracting practices

Lawmakers put Homeland Security Department officials on the spot at a Thursday hearing, pushing for assurances that widely publicized contracting problems highlighted in a new committee report would not recur.

The report on the DHS acquisition system, requested by House Government Reform Committee chairman Tom Davis, R-Va., and ranking member Henry Waxman, D-Calif., compiled information on 32 agency contracts that were identified as having significant wasteful spending or mismanagement. The contracts were worth a total of $34.3 billion.

Many of the contracts have been in the spotlight before. Among those highlighted were a $1.7 billion Federal Emergency Management Agency contract for trailers to house people affected by Hurricane Katrina, many of which have not been used; failures in the $10 billion US VISIT program implementation; and the purchase of radiation detectors that reportedly cannot distinguish between nuclear material and common household materials such as cat litter and bananas.

The committee report cited rapidly increasing contract spending at DHS, a rise in the number of contracts awarded noncompetitively and a lack of contract management stemming in part from a shortage of procurement personnel.

But in testimony before the committee, officials from the DHS acquisition team said the department's relatively recent creation and short deadlines, as well as sometimes overly broad contract requirements, were central to the problems.

David Zavada, assistant inspector general in DHS' Office of Audits, described the department, which was formed in March 2003 from 23 agencies, as "very young." He said officials are working hard to bring disparate cultures together, but know they must also be ready to perform their missions.

Zavada said the shortage of properly trained acquisition personnel was a critical part of the problem. "The combination of broadly defined contracts and lack of staffing, mixed with aggressive timelines, is a formula for a high-risk area," he said.

One line of questioning focused on a request for proposals for the Secure Border Initiative, which seeks "reliable … cost effective solution(s) to manage, control and secure the border," but does not spell out the department's specific needs. At the time the RFP was released, Deputy Secretary Michael Jackson told companies, "We're asking you to come back and tell us how to do our business."

"That's not governing," Waxman said. "That's not planning. It's utter incompetence, and it's going to cost the taxpayers billions."

The committee report noted that in fiscal 2005, more than half of DHS contract dollars were awarded without full and open competition.

Michael Sullivan, director of acquisition sourcing and management at the Government Accountability Office, said no-bid contracts are sometimes necessary in exceptional circumstances, for example in acquiring a particular proprietary technology. He noted that competition is preferred.

The SBI contract, which nearing its September deadline for selection of a prime contractor, appears to be at the intersection of accelerated scheduling, broad requirements and still-emerging technologies -- giving it "tremendous risks," Zavada said.

Davis expressed little sympathy for the agency.

"DHS has been tasked with critical missions subject to hard deadlines," he said. "Addressing our myriad vulnerabilities requires the department to acquire complex, high-risk, state-of-the-art solutions likely to have problems even under an ideal management structure. With so much at stake, and so little room for error, the size or difficulty of the challenge can be no excuse for a failure to put an effective management structure in place."