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What's wrong with DHS acquisition management?

Jun. 24, 2014 - 06:00AM   |  
By TOM ESSIG   |   Comments
Tom Essig is the owner of TWE LLC and former chief procurement officer of the Department of Homeland Security.
Tom Essig is the owner of TWE LLC and former chief procurement officer of the Department of Homeland Security. (File)

Earlier this month, the House passed H.R. 4228, known as the “DHS Acquisition Accountability and Efficiency Act”. The stated purpose of the Act is “[t]o require the department of Homeland Security to improve discipline, accountability, and transparency in acquisition program management.” Apparently, the policies and procedures implemented by the department over the past six years to improve the management of its $17 billion in acquisition programs have not been successful and legislative direction is now required to improve things. So, what went wrong and can corrections be made without mandating requirements at the statutory level?

Between 2008 and 2010, the department reengineered the process it used to oversee and manage its acquisition programs. These changes reflected lessons learned during the early years of the department, as well as those identified during review of programs at other agencies, including, in particular, the department of Defense. Three key aspects of these efforts are:

1. The establishment of detailed policies and procedures for the management of DHS acquisition programs, under Acquisition Management Directive (AMD) 102-01. In addition, detailed guidance documents were issued to help acquisition personnel meet the new requirements. The guidance documents, for example, provide details regarding the required content of an Acquisition Program Baseline (APB) and a sample template to be used when preparing that APB. A striking aspect of these policies and procedures is that virtually all of them are included in H.R. 4228.
2. The establishment of an Acquisition Program Management Division (APMD) staffed with personnel knowledgeable of the broad range of acquisition disciplines, such as program management, systems engineering, cost analysis, test and evaluation, and logistics management. APMD’s duties included both oversight of and support to DHS acquisition programs. They provided guidance and support to program managers working to meet the new departmental policies and procedures and supported the department’s Acquisition Authorities in overseeing program performance. This included support and management of the department’s Acquisition Review Board (ARB), where decisions are made whether or not to allow the program to proceed.
3. A “quick look” assessment of the current status of the department’s major acquisition programs. This was intended to provide information regarding the scope of effort required to bring all of the department’s acquisition programs up to the level they need to be. More detailed assessments would be conducted later, as detailed in the new acquisition management policies and procedure documents.

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By September 2010, the department had completed its 75th ARB and initiated a series of portfolio management reviews. The process was in full swing and DHS was getting the information necessary to effectively manage its acquisition programs. Equally important, the department’s leadership, including its Chief Acquisition Officer, was getting visibility into the capabilities and status of all major programs within the department. Among other benefits, this provided information necessary for the department to reduce duplication in its acquisition programs—a requirement of Sec. 837 of H.R. 4228.

In early 2011, APMD, which was within the office of the DHS Chief Procurement Officer, was merged into a new DHS organization, Program Accountability and Risk Management (PARM), which reported directly to the Under Secretary for Management (USM), who is the department’s Chief Acquisition Officer. Elevating this organization was the right move, reflecting the critical importance of acquisition management to the department.

Between 2011 and 2014, however, the pace of ARB reviews fell dramatically and portfolio management reviews appear to have been sidelined completely. In addition, many of the people brought to the department to staff APMD have since retired or found jobs elsewhere. As a result, it appears that most of the people who were instrumental to the development and initial implementation of the department’s acquisition management procedures (AMD 102-01) are gone. With them, the department may also have lost the knowledge of the things AMD 102-01 was intended to fix.

In its September 2012 report, GAO found a number of continuing problems with DHS’ management of its acquisition programs. They indicated that “DHS culture has emphasized the need to rapidly execute missions more than sound acquisition management practices. Most major programs lack reliable cost estimates, realistic schedules, and agreed-upon baseline objectives, limiting DHS leadership’s ability to effectively manage those programs and provide information to Congress. DHS recognizes the need to implement its acquisition policy more consistently.” All of these program weaknesses were identified by DHS before implementation of AMD 102-01 and that Directive provides specific policies and procedures to correct those weaknesses. But it’s the last sentence in the preceding GAO quote that may be most telling. DHS needs to implement its acquisition policy more consistently.

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As I mentioned previously, much of the language in H.R. 4228 duplicates the language in AMD 102-01. In late 2008, while serving as the DHS CPO, I was asked by several very supportive Congressional staff if it would be beneficial to mandate the new policies and procedures by statute. I asked them not to do that. The policies and procedures that DHS was then about to put in place had never been implemented at any federal agency. While we had high expectations, we also knew that changes would likely be required as we gained experience with new process. The department needed to have the flexibility to fine tune AMD 102-01 as we discovered what worked well and what didn’t. Mandating the requirements of AMD 102-01 under statute would make it virtually impossible to do that.

But it’s now been six years since DHS implemented the policy and it’s not working as well as hoped. It doesn’t appear, however, as though there’s anything wrong with the policy itself. I’m not even sure that H.R. 4228 would require any significant change to AMD 102-01. And that seems to support the argument that the problem is not with the policy and procedures DHS put into place. Rather, it’s that those policies and procedures are not being followed consistently or aggressively. So, while I requested—in 2008—that those policies and procedures not be mandated by statute, it may now be time to do so. For DHS to get the benefit of these policies and procedures, it must follow them consistently. Codifying them should make that happen and I am, therefore, in support of the legislation. But that is probably only one part of the solution.

Major acquisition programs are almost always complex and there is rarely one cause of, or one fix for problems. The process for funding of DHS acquisition programs, for example, creates another set of complexities, which I won’t get into here. And the process only works if you have the people and organizations in place to support it. All of this seemed to be working for the first couple of years under the new DHS acquisition management directive, with 75 major acquisition programs being reviewed by September 2010. Then something changed. It might be worthwhile to identify what, why, and the significance of whatever that was. Otherwise, H.R. 4228 may not have as positive an impact as desired.

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