[House Report 115-45]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 115-45
======================================================================
REDUCING DHS ACQUISITION COST GROWTH ACT
_______
March 20, 2017.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. McCaul, from the Committee on Homeland Security, submitted the
following
R E P O R T
[To accompany H.R. 1294]
The Committee on Homeland Security, to whom was referred
the bill (H.R. 1294) to amend the Homeland Security Act of 2002
to provide for congressional notification regarding major
acquisition program breaches, and for other purposes, having
considered the same, report favorably thereon without amendment
and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for Legislation.............................. 2
Hearings......................................................... 2
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 3
New Budget Authority, Entitlement Authority, and Tax Expenditures 3
Congressional Budget Office Estimate............................. 3
Statement of General Performance Goals and Objectives............ 3
Duplicative Federal Programs..................................... 4
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits....................................................... 4
Federal Mandates Statement....................................... 4
Preemption Clarification......................................... 4
Disclosure of Directed Rule Makings.............................. 4
Advisory Committee Statement..................................... 4
Applicability to Legislative Branch.............................. 4
Section-by-Section Analysis of the Legislation................... 5
Changes in Existing Law Made by the Bill, as Reported............ 5
Purpose and Summary
The purpose of H.R. 1294, the Reducing DHS Acquisition Cost
Growth Act of 2017, is to amend the Homeland Security Act of
2002 to provide for congressional notification regarding major
acquisition program breaches and for other purposes.
H.R. 1294 requires that DHS's major acquisition programs
(those worth $300 million or more) be subject to greater
Departmental and congressional oversight when they fail to meet
(i.e. ``breach'') key cost, schedule, or performance
requirements.
Background and Need for Legislation
The Government Accountability Office (GAO) and the DHS
Office of Inspector General (OIG) have consistently reported on
the longstanding challenges DHS faces in managing its major
acquisition programs, which cost the Department over $7 billion
each year. Every 2 years, the GAO identifies areas in the
Federal Government that are ``high risk'' due to their
vulnerabilities to fraud, waste, abuse, and mismanagement.
Since 2003, GAO has identified DHS's transformation of 22
agencies into one department, and the Department's subsequent
challenges with its management functions, as high risk. In
GAO's 2017 high risk update, GAO noted that DHS has made
progress in addressing its management challenges, but has not
yet completed all the necessary actions to fully address
acquisition management. Additionally, the OIG reports annually
on major management challenges facing the Department. In
November 2016, the OIG identified challenges in DHS's
management of acquisition programs. Although DHS has taken
steps to improve acquisition management, DHS continues to
struggle to ensure that major acquisition programs cost what
was originally estimated, are delivered on schedule, and
provide the capabilities originally intended. H.R. 1294 is
intended to provide greater accountability to major acquisition
programs and provides Congress with greater oversight of
failing acquisition programs to prevent the waste of taxpayer
dollars.
Hearings
No hearings were specifically held on H.R. 1294. However,
the Committee held oversight hearings on acquisition
management, as listed below.
On February 26, 2015, the Subcommittee on Oversight and
Management Efficiency held a hearing entitled ``Assessing DHS's
Performance: Watchdog Recommendations to Improve Homeland
Security.'' The Subcommittee received testimony from The
Honorable John Roth, Inspector General, U.S. Department of
Homeland Security; Ms. Rebecca Gambler, Director, Homeland
Security and Justice, U.S. Government Accountability Office;
and Dr. Daniel M. Gerstein, Senior Policy Researcher, The RAND
Corporation.
On April 22, 2015, the Subcommittee on Oversight and
Management Efficiency held a hearing entitled ``Acquisition
Oversight: How Effectively is DHS Safeguarding Taxpayer
Dollars?'' The Subcommittee received testimony from Ms. Michele
Mackin, Director, Acquisition and Sourcing Management, U.S.
Government Accountability Office; The Honorable Chip Fulghum,
Acting Deputy Undersecretary for Management and Chief Financial
Officer, U.S. Department of Homeland Security; and Dr. Cedric
Sims, Partner, Evermay Consulting Group.
On September 18, 2015, the Subcommittee on Oversight and
Management Efficiency held a hearing entitled ``Making DHS More
Efficient: Industry Recommendations to Improve Homeland
Security.'' The Subcommittee received testimony from Mr. Marc
Pearl, President and Chief Executive Officer, Homeland Security
and Defense Business Council; Mr. Harry Totonis, Board
Director, Business Executives for National Security; and Ms.
Elaine Duke, Principal, Elaine Duke & Associates, LLC.
On February 16, 2017, the Subcommittee on Oversight and
Management Efficiency held a hearing entitled ``Watchdog
Recommendations: A Better Way Ahead to Manage the Department of
Homeland Security.'' The Subcommittee received testimony from
The Honorable John Roth, Inspector General, U.S. Department of
Homeland Security, and Ms. Rebecca Gambler, Director, Homeland
Security and Justice, U.S. Government Accountability Office.
Committee Consideration
The Committee met on March 8, 2017, to consider H.R. 1294,
and ordered the measure to be reported to the House with a
favorable recommendation, without amendment, by voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report legislation and amendments
thereto.
No recorded votes were requested during consideration of
H.R. 1294.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has held oversight
hearings and made findings that are reflected in this report.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
1294, the Reducing DHS Acquisition Cost Growth Act, would
result in no new or increased budget authority, entitlement
authority, or tax expenditures or revenues.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, a cost estimate provided by the
Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974 was not made available to the
Committee in time for the filing of this report. The Chairman
of the Committee shall cause such estimate to be printed in the
Congressional Record upon its receipt by the Committee.
Statement of General Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, H.R. 1294 contains the following
general performance goals and objectives, including outcome
related goals and objectives authorized.
The purpose of H.R. 1294, the Reducing DHS Cost Growth Act
of 2017, is to provide guidance to the Department of Homeland
Security regarding acquisition management.
Duplicative Federal Programs
Pursuant to clause 3(c) of rule XIII, the Committee finds
that H.R. 1294 does not contain any provision that establishes
or reauthorizes a program known to be duplicative of another
Federal program.
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
In compliance with rule XXI of the Rules of the House of
Representatives, this bill, as reported, contains no
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of the Rule
XXI.
Federal Mandates Statement
An estimate of Federal mandates prepared by the Director of
the Congressional Budget Office pursuant to section 423 of the
Unfunded Mandates Reform Act was not made available to the
Committee in time for the filing of this report. The Chairman
of the Committee shall cause such estimate to be printed in the
Congressional Record upon its receipt by the Committee.
Preemption Clarification
In compliance with section 423 of the Congressional Budget
Act of 1974, requiring the report of any Committee on a bill or
joint resolution to include a statement on the extent to which
the bill or joint resolution is intended to preempt State,
local, or Tribal law, the Committee finds that H.R. 1294 does
not preempt any State, local, or Tribal law.
Disclosure of Directed Rule Makings
The Committee estimates that H.R. 1294 would require no
directed rule makings.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short Title.
This section provides that this bill may be cited as the
``Reducing DHS Acquisition Cost Growth Act''.
Sec. 2. Congressional Notification for Major Acquisition Programs.
Section 2 amends subtitle D of the title VIII of the
Homeland Security Act of 2002 (Pub. L. 107-296) and requires
that DHS's major acquisition programs (those worth $300 million
or more) be subject to greater Departmental and congressional
oversight when they fail to meet (i.e. ``breach'') key cost,
schedule, or performance requirements. Specifically, when a
major acquisition program breaches any of those key
requirements, section 2 requires program managers to notify the
officials responsible for overseeing those programs not later
than thirty days after the breach has been identified.
Section 2 also establishes requirements for egregious
instances of major acquisition programs in breach of key
requirements. In extreme cases (when a major acquisition
program exceeds its cost requirements by more than 15 percent,
delays its schedule by more than 180 days, or fails to meet any
performance requirement), the Secretary and the DHS Office of
Inspector General (OIG) must be notified. If this happens,
section 2 requires the Secretary to notify the House and Senate
Committees on Homeland Security of the breach in the next
quarterly Comprehensive Acquisition Status Report (CASR). The
Secretary must include a justification of a major acquisition
program if it exceeds (1) costs by 20 percent more or (2)
planned schedule dates by 12 months or more.
Further, section 2 requires program managers to develop a
plan when a breach occurs on how the breach will be remediated,
which must, among other things, propose corrective actions for
addressing the breach, as well as an analysis identifying
potential root causes behind the breach. This plan must be
submitted to the head of the relevant component, the
Department's Program Accountability and Risk Management (PARM)
division, which is responsible for overseeing major acquisition
programs, and the Under Secretary for Management (USM).
Section 2 requires the USM to review the corrective actions
and either approve the plan or provide alternative corrective
actions for addressing the breach. The USM must submit to the
House and Senate Committees on Homeland Security a copy of the
remediation plan, root cause analysis, and a description of
actions taken to address the breach.
This section should provide greater accountability to major
acquisition programs and provide Congress with greater
oversight of failing acquisition programs to prevent the waste
of taxpayer dollars. Section 2 also includes relevant
definitions related to acquisition management.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italics and existing law in which no change is
proposed is shown in roman):
HOMELAND SECURITY ACT OF 2002
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Homeland
Security Act of 2002''.
(b) Table of Contents.--The table of contents for this Act is
as follows:
* * * * * * *
TITLE VIII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL;
UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS
* * * * * * *
Subtitle D--Acquisitions
Sec. 831. Research and development projects.
* * * * * * *
Sec. 836. Congressional notification and other requirements for major
acquisition program breach.
* * * * * * *
TITLE VIII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL;
UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS
* * * * * * *
Subtitle D--Acquisitions
* * * * * * *
SEC. 836. CONGRESSIONAL NOTIFICATION AND OTHER REQUIREMENTS FOR MAJOR
ACQUISITION PROGRAM BREACH.
(a) Requirements Within Department in Event of Breach.--
(1) Notifications.--
(A) Notification of breach.--If a breach
occurs in a major acquisition program, the
program manager for such program shall notify
the Component Acquisition Executive for such
program, the head of the component concerned,
the Executive Director of the Program
Accountability and Risk Management division,
the Under Secretary for Management, and the
Deputy Secretary not later than 30 calendar
days after such breach is identified.
(B) Notification to secretary.--If a breach
occurs in a major acquisition program and such
breach results in a cost overrun greater than
15 percent, a schedule delay greater than 180
days, or a failure to meet any of the
performance thresholds from the cost, schedule,
or performance parameters specified in the most
recently approved acquisition program baseline
for such program, the Component Acquisition
Executive for such program shall notify the
Secretary and the Inspector General of the
Department not later than five business days
after the Component Acquisition Executive for
such program, the head of the component
concerned, the Executive Director of the
Program Accountability and Risk Management
Division, the Under Secretary for Management,
and the Deputy Secretary are notified of the
breach pursuant to subparagraph (A).
(2) Remediation plan and root cause analysis.--
(A) In general.--If a breach occurs in a
major acquisition program, the program manager
for such program shall submit to the head of
the component concerned, the Executive Director
of the Program Accountability and Risk
Management division, and the Under Secretary
for Management in writing a remediation plan
and root cause analysis relating to such breach
and program. Such plan and analysis shall be
submitted at a date established at the
discretion of the Under Secretary for
Management.
(B) Remediation plan.--The remediation plan
required under this subparagraph (A) shall--
(i) explain the circumstances of the
breach at issue;
(ii) provide prior cost estimating
information;
(iii) include a root cause analysis
that determines the underlying cause or
causes of shortcomings in cost,
schedule, or performance of the major
acquisition program with respect to
which such breach has occurred,
including the role, if any, of--
(I) unrealistic performance
expectations;
(II) unrealistic baseline
estimates for cost or schedule
or changes in program
requirements;
(III) immature technologies
or excessive manufacturing or
integration risk;
(IV) unanticipated design,
engineering, manufacturing, or
technology integration issues
arising during program
performance;
(V) changes to the scope of
such program;
(VI) inadequate program
funding or changes in planned
out-year funding from one 5-
year funding plan to the next
5-year funding plan as outlined
in the Future Years Homeland
Security Program required under
section 874;
(VII) legislative, legal, or
regulatory changes; or
(VIII) inadequate program
man-age-ment personnel,
including lack of sufficient
number of staff, training,
credentials, certifications, or
use of best practices;
(iv) propose corrective action to
address cost growth, schedule delays,
or performance issues;
(v) explain the rationale for why a
proposed corrective action is
recommended; and
(vi) in coordination with the
Component Acquisition Executive for
such program, discuss all options
considered, including the estimated
impact on cost, schedule, or
performance of such program if no
changes are made to current
requirements, the estimated cost of
such program if requirements are
modified, and the extent to which
funding from other programs will need
to be reduced to cover the cost growth
of such program.
(3) Review of corrective actions.--
(A) In general.--The Under Secretary for
Management shall review the remediation plan
required under paragraph (2). The Under
Secretary may approve such plan or provide an
alternative proposed corrective action within
30 days of the submission of such plan under
such paragraph.
(B) Submission to congress.--Not later than
30 days after the review required under
subparagraph (A) is completed, the Under
Secretary for Management shall submit to the
congressional homeland security committees the
following:
(i) A copy of the remediation plan
and the root cause analysis required
under paragraph (2).
(ii) A statement describing the
corrective action or actions that have
occurred pursuant to paragraph
(2)(b)(iv) for the major acquisition
program at issue, with a justification
for such action or actions.
(b) Requirements Relating to Congressional Notification if
Breach Occurs.--
(1) Notification to congress.--If a notification to
the Secretary is made under subsection (a)(1)(B)
relating to a breach in a major acquisition program,
the Under Secretary for Management shall notify the
congressional homeland security committees of such
breach in the next quarterly Comprehensive Acquisition
Status Report, as required by title I of division D of
the Consolidated Appropriations Act, 2016, (Public Law
114-113) following receipt by the Under Secretary of
notification under such subsection.
(2) Significant variances in costs or schedule.--If a
likely cost overrun is greater than 20 percent or a
likely delay is greater than 12 months from the costs
and schedule specified in the acquisition program
baseline for a major acquisition program, the Under
Secretary for Management shall include in the
notification required in paragraph (1) a written
certification, with supporting explanation, that--
(A) such program is essential to the
accomplishment of the Department's mission;
(B) there are no alternatives to the
capability or asset provided by such program
that will provide equal or greater capability
in both a more cost-effective and timely
manner;
(C) the new acquisition schedule and
estimates for total acquisition cost are
reasonable; and
(D) the management structure for such program
is adequate to manage and control cost,
schedule, and performance.
(c) Definitions.--In this section:
(1) Acquisition.--The term ``acquisition'' has the
meaning given such term in section 131 of title 41,
United States Code.
(2) 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.
(3) 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.
(4) 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
Department's mission and business operations.
(5) Breach.--The term ``breach'', with respect to a
major acquisition program, means a failure to meet any
cost, schedule, or performance threshold specified in
the most recently approved acquisition program
baseline.
(6) Congressional homeland security committees.--The
term ``congressional homeland security committees''
means--
(A) the Committee on Homeland Security of the
House of Representatives and the Committee on
Homeland Security and Governmental Affairs of
the Senate; and
(B) the Committee on Appropriations of the
House of Representatives and of the Senate.
(7) Component acquisition executive.--The term
``Component Acquisition Executive'' means the senior
acquisition official within a component who is
designated in writing by the Under Secretary for
Management, in consultation with the component head,
with authority and responsibility for leading a process
and staff to provide acquisition and program management
oversight, policy, and guidance to ensure that
statutory, regulatory, and higher level policy
requirements are fulfilled, including compliance with
Federal law, the Federal Acquisition Regulation, and
Department acquisition management directives
established by the Under Secretary for Management.
(8) 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 at least $300,000,000
(based on fiscal year 2017 constant dollars) over its
life cycle cost.
* * * * * * *