The United States Secret
Service Has Adequate
Oversight and
Management of its
Acquisitions
(Revised)
February 10, 2015
OIG-15-21
HIGHLIGHTS
The United States Secret Service Has Adequate
Oversight and Management of its Acquisitions
February 10, 2015
Why We
Did This
The Department of
Homeland Security (DHS)
and its components
continue to face challenges
in overseeing and managing
acquisition programs. The
Office of Inspector General
(OIG) conducted this audit
to determine whether the
Secret Service had adequate
oversight and management
of its acquisitions.
What We
Recommend
We recommend that the
Secret Service finalize and
issue component-specific
acquisition guidance and
select a Component
Acquisition Executive.
For Further Information:
Contact our Office of Public Affairs at
(202) 254-4100, or email us at
DHS-OIG.OfficePublicAffairs@oig.dhs.gov
What We Found
The United States Secret Service’s acquisition
management program office, established in 2011, has
adequate oversight and management of its acquisition
process, complies with DHS acquisition guidance, and has
implemented some best practices. However, the Secret
Service does not have its own guidance for acquisitions
valued at less than $300 million and, at the time of our
audit, the component did not have a designated
Component Acquisition Executive.
United States Secret Service
Response
The Secret Service concurred with both recommendations
and took action to address them, including selecting a
Component Acquisition Executive, who was subsequently
designated by the DHS Acting Deputy Under Secretary for
Management.
www.oig.dhs.gov OIG-15-21
Errata page for OIG-15-21
The United States Secret Service Has Adequate Oversight
and Management of its Acquisitions
Page 5: Audit scope and methodology paragraphs were added (see
below):
Inserted: Scope and Methodology
To achieve our objective, we reviewed: (1) applicable laws, regulations,
and guidance for procurements and acquisitions in the Federal
Government, DHS, and the Secret Service; (2) prior OIG and Government
Accountability Office audit reports on DHS’ major acquisitions; and (3)
acquisition program documentation for Secret Service acquisition
programs.
We interviewed numerous senior management and acquisition program
officials, including officials from the Secret Service’s Office of
Administration in Washington, DC. We also interviewed staff at DHS’
Office of Program Accountability and Risk Management.
We conducted this audit between May 2014 and September 2014
pursuant to the Inspector General Act of 1978, as amended, and
according to generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based upon our audit objective. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based upon our audit objective.
Note: A new report format was implemented and the scope and
methodology section was inadvertently removed during the review and
editing process.
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OFFICE
OF
INSPECTOR
GENERAL
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Department
of
Homeland
Security
Washington,
DC
20528
/
www.oig.dhs.gov
February
10,
2015
MEMORANDUM
FOR:
The
Honorable
Joseph
Clancy
Acting
Director
United
States
Secret
Service
FROM:
John
Roth
Inspector
General
SUBJECT:
The
United
States
Secret
Service
Has
Adequate
Oversight
and
Management
of
its
Acquisitions
Attached
for
your
information
is
our
revised
final
report,
The
United
States
Secret
Service
Has
Adequate
Oversight
and
Management
of
its
Acquisitions.
We
reissued
the
report
with
a
change
to
page
5.
The
revision
did
not
change
the
findings
or
recommendations
made
in
the
original
report.
Please
see
the
attached
errata
page
for
details.
The
previously
issued
report
provided
the
results
of
our
work
to
determine
whether
the
United
States
Secret
Service
(Secret
Service)
has
adequate
oversight
and
management
of
its
acquisitions.
Since
the
Secret
Service
established
its
acquisition
management
program
office
in
2011,
it
has
had
adequate
oversight
of
its
acquisition
process,
complied
with
DHS
acquisition
guidance,
and
implemented
some
best
practices.
The
Secret
Service
has
not
finalized
guidance
for
acquisitions
with
life
cycle
costs
of
less
than
$300
million.
Results
of
Audit
Although
the
Secret
Service
has
adequate
oversight
and
management
of
its
acquisitions,
having
its
own
policies
and
procedures,
as
well
as
a
designated
Component
Acquisition
Executive
(CAE),
would
strengthen
its
acquisition
program.
In
addition,
to
help
ensure
program
success
in
the
future,
the
component
should
continue
to
incorporate
best
practices
into
its
day
-to
-day
acquisition
activities.
Taken
together,
these
actions
will
decrease
the
risk
of
waste,
fraud,
and
abuse
and
improve
the
Secret
Service's
ability
to
acquire
goods
and
services
in
a
timely
manner
and
at
a
reasonable
cost.
In
fiscal
year
2014,
the
Secret
Service
had
an
operating
budget
of
about
$1.6
billion.
According
to
Office
of
Administration
senior
officials,
the
majority
of
the
budget
goes
to
salaries,
with
the
component
spending
less
than
$500
million
www.
oig.
dhs.
gov
OIG
-15
-21
OFFICE OF INSPECTOR GENERAL
Department of Homeland Security
on items such as information technology, training, rent, utilities,
procurements, and acquisitions.
Oversight and Compliance
The Secret Service complies with the supplemented DHS’ Acquisition
Management Directive, (Directive Number 102-01, Revision 01), originally issued
in January 2010, which provides a policy and structure for managing
acquisitions. The directive categorizes DHS acquisitions as major or nonmajor
based on life cycle cost estimates. Appendix B outlines the Department’s
acquisition life cycle framework.
The Department encourages components to develop their own policies and
guidance for nonmajor programs, as long as they are consistent with the spirit
and intent of the directive and the directive’s implementing guidance. However,
the Secret Service does not have a component-specific policy for its nonmajor
acquisitions, which comprise the majority of its acquisitions.
As shown in table 1, the directive categorizes DHS acquisitions as Level 1, 2, or
3, depending on their life cycle cost estimates. The level also determines the
acquisition decision authority (ADA) for the program as it moves through each
acquisition phase. ADAs have overarching responsibility for acquisition costs,
schedule, risk, and system performance of their acquisition portfolios. ADAs
are also responsible for assessing missed milestones (breaches), directing
corrective actions, and approving any revisions to the cost, schedule, and
performance parameters.
Table 1 – DHS Acquisition Program Levels
Life Cycle Cost
Acquisition Decision
Authority
Level 1
(Major)
Greater than or equal to
$1 billion
Deputy Secretary
Level 2
(Major)
$300 million or more, but
less than $1 billion
Chief Acquisition Officer
Level 3
(Nonmajor)
Less than $300 million Component Head or CAE
Source: DHS OIG, based on DHS Instruction Manual 102-01-001 Acquisition Management
Instruction/Guidebook, October 1, 2011
As of June 2014, the Secret Service had seven acquisition programs. Our
review of the programs showed the Secret Service complied with the guidance
in the directive and thus provided adequate oversight of its acquisitions.
Specifically, acquisition staff members, working with program managers, guide
programs through the acquisition process. This includes developing and
www.oig.dhs.gov 2 OIG-15-21
OFFICE OF INSPECTOR GENERAL
Department of Homeland Security
presenting required documentation for department- and component-level
decision makers. Table 2 lists the Secret Service’s seven acquisition programs,
as of June 2014.
Table 2 – Secret Service Acquisition Programs as of June 2014
Name of Program Acquisition Acquisition Phase
1
Information Integration and Technology
T
ransformation (IITT) 2 Obtain
Multi-level Security* 3 Produce/Deploy/Support
Combined Operations Logistics Database* 3 Obtain
Cross Domain* 3 Obtain
Information Technology Infrastructure 2 Sustainment
Enterprise Financial Management System 3 Sustainment
Next Generation Limousine 3 Analyze/Select
Source: Secret Service
*Although associated with the IITT program, these are considered independent Level 3
acquisitions.
For the IITT program, a Level 2 acquisition, the Secret Service provided the
DHS review board with evidence of program necessity, cost, schedule, and
performance goals. The DHS review board approved one portion of the IITT
program to proceed to the “obtain” phase. The CAE reviews and approves Level
3 programs at the component level. For the Next Generation Limousine
program, a Level 3 acquisition, the program manager provided the acting CAE
with documentation supporting the acquisition need. The acting CAE approved
this program to proceed to the next phase—the “analyze/select” phase. For
both programs, the Secret Service complied with the acquisition process
established by the Department.
The Secret Service has had challenges with three of its acquisition programs. A
contract award protest in the IITT program and a failed test and evaluation of
the Combined Operational Logistics Database 2 affected these programs’
schedules. In both cases, the Secret Service complied with guidance by
reporting these breaches to the proper decision makers and providing
remediation plans. Although the Cross Domain program has not had a breach,
a technical issue is affecting integration of the program. According to a Secret
Service official, a solution for the issue was identified and communicated to the
acting CAE.
1
Appendix B shows the defined acquisition phases in the DHS Acquisition Life Cycle
Framework.
www.oig.dhs.gov 3 OIG-15-21
OFFICE OF INSPECTOR GENERAL
Department of Homeland Security
Secret Service Acquisition Policy
The Department encourages components to develop their own policies and
guidance for Level 3 programs (with life cycle costs of less than $300 million),
as long as they are consistent with the spirit and intent of the directive and its
implementing guidance. The Secret Service drafted its own policy, but has
delayed issuing it until DHS completes a revision of its directive, which is
intended to incorporate a recent departmental initiative. According to a DHS
official, the Department does not expect to complete revisions to the directive
until 2015.
By having component-specific acquisition policies and procedures, the Secret
Service could decrease the risk of waste, fraud, and abuse and increase the
likelihood of acquiring goods and services in a timely manner and at a
reasonable cost.
Component Acquisition Executive
Although the Secret Service CAE left in November 2012, at the time of our
audit, the Secret Service Director had not yet selected a replacement. In DHS,
the CAE, the component’s senior acquisition official, is selected by the
component head and designated in writing by the DHS Acting Deputy Under
Secretary for Management. According to DHS acquisition guidance, the CAE
leads a process and staff to provide acquisition oversight, program
management, and policy and guidance. The CAE also ensures compliance with
laws, regulations, and departmental policy.
At the time of our audit, the deputy CAE at the Secret Service was performing
these duties as an acting CAE. Having a designated CAE emphasizes the
importance of acquisition management and oversight. This position is
particularly critical at the Secret Service because most of its acquisitions are
Level 3 programs requiring component-level review and CAE approval.
Best Practices
The acquisition management program office is taking steps to incorporate
acquisition processes into Secret Service operations and to educate staff on its
benefits. The Secret Service should continue these best practices to expand the
acquisition knowledge base throughout the component. Staff members in the
acquisition management program office assist program managers, provide
acquisition orientation for new employees, and coordinate training and
certifications. The office also sends periodic acquisition newsletters highlighting
available online courses and in-house training to acquisition personnel.
www.oig.dhs.gov 4 OIG-15-21
OFFICE OF INSPECTOR GENERAL
Department of Homeland Security
At the time of our audit, the acting CAE was interacting with senior
management. For example, in late 2012, the acting CAE became an advisory
member of the Enterprise Governance Council, the body responsible for
business-level reviews of significant Secret Service investment initiatives. The
acting CAE also attended program management reviews for information
technology programs and incorporated acquisition elements into the process
for requesting funding for proposed new projects.
Recommendations
Recommendation 1: We recommend that the Assistant Director of the Office
of Administration finalize and issue the component-specific acquisition policy.
Recommendation 2:
We recommend the Director of the United States Secret
Service select a Component Acquisition Executive for designation by the
Department of Homeland Security Under Secretary for Management.
Scope and Methodology
To achieve our objective, we reviewed: (1) applicable laws, regulations, and
guidance for procurements and acquisitions in the Federal Government, DHS,
and the Secret Service; (2) prior OIG and Government Accountability Office
audit reports on DHS’ major acquisitions; and (3) acquisition program
documentation for Secret Service acquisition programs.
We interviewed numerous senior management and acquisition program
officials, including officials from the Secret Service’s Office of Administration in
Washington, DC. We also interviewed staff at DHS’ Office of Program
Accountability and Risk Management.
We conducted this audit between May 2014 and September 2014 pursuant to
the Inspector General Act of 1978, as amended, and according to generally
accepted government auditing standards. Those standards require that we plan
and perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based upon our audit
objective. We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based upon our audit objective.
www.oig.dhs.gov 5 OIG-15-21
OFFICE OF INSPECTOR GENERAL
Department of Homeland Security
Discussion with Component and Audit Follow-up
During our audit, we discussed the results with the Secret Service. We
provided a notice of findings and recommendations and held an exit conference
on September 11, 2014. Secret Service management provided written technical
comments and an official response. We incorporated technical comments, as
appropriate, in this report. Appendix A contains the official management
response.
The Secret Service concurred with recommendation 1. The Secret Service has
written and coordinated its component-specific acquisition policy internally
and expects to publish and issue it by December 31, 2014. OIG has determined
the Secret Service action is responsive to the intent of the recommendation and
considers recommendation 1 resolved and open. We will close the
recommendation when we receive a copy of the issued policy.
The Secret Service concurred with recommendation 2. As recommended, the
component nominated an individual whom the DHS Acting Deputy Under
Secretary for Management designated as the component’s permanent CAE on
December 1, 2014. OIG has determined that the DHS and Secret Service
actions fully address recommendation 2 and has closed the recommendation.
Within 90 days of the date of this memorandum, please provide our office with
a written response that includes the contact information for responsible parties
and any other supporting documentation necessary to inform us about the
status of the open recommendation. Please email a signed pdf copy of all
responses and closeout request to [email protected].
Major contributors to this report are Paul Wood, Audit Director; Cecilia Carroll,
Audit Manager; Shamika Morris, Auditor-in-Charge; Polin Cohanne, Senior
Program Analyst; David Kinard, Auditor; Richard Joyce, Program Analyst;
Vashti Gordon, Program Analyst; Kelly Herberger, Communications Analyst;
and Nancy Pergolizzi, Independent Referencer.
Please call me with any questions at (202) 254-4100 or your staff may contact
Mark Bell, Assistant Inspector General for Audits, at (202) 254Ǧ4100.
www.oig.dhs.gov 6 OIG-15-21
OFFICE OF INSPECTOR GENERAL
Department of Homeland Security
Appendix B
DHS Acquisition Life Cycle Framework
Acquisition Phase
Acquisition
Decision
Event
Purpose
Need 1
Documents the user’s need and plans for
the Analyze/Select Phase
Analyze/Select 2A
Formally establishes the program to
analyze appropriate methods for meeting
approved requirements
Obtain
2B
Plans for method of development and
delivery; establishes strategy for
acquisition/procurement and testing of
solution
2C
Provides Low Rate Initial Production (if
required)
Produce/Deploy/Support 3 Gets capability to the user and maintains it
Sustainment Post-3
Provides maintenance at intended levels of
performance and meeting of contingency
usage requirements
Source: DHS OIG, based on DHS Chief Acquisition Officer memorandums, May 9, 2013, and
June 13, 2014; and DHS Instruction Manual 102-01-001 Acquisition Management
Instruction/Guidebook, Appendix J, October 1, 2011.
www.oig.dhs.gov 9 OIG-15-21
OFFICE OF INSPECTOR GENERAL
Department of Homeland Security
Appendix C
Report Distribution
Department of Homeland Security
Secretary
Deputy Secretary
Chief of Staff
General Counsel
Executive Secretary
Director, GAO/OIG Liaison Office
Assistant Secretary for Office of Policy
Assistant Secretary for Office of Public Affairs
Assistant Secretary for Office of Legislative Affairs
USSS Audit Liaison
Office of Management and Budget
Chief, Homeland Security Branch
DHS OIG Budget Examiner
Congress
Congressional Oversight and Appropriations Committees
www.oig.dhs.gov 10 OIG-15-21
ADDITIONAL INFORMATION AND COPIES
To view this and any of our other reports, please visit our website at: www.oig.dhs.gov.
For further information or questions, please contact Office of Inspector General Public Affairs
at: DHS-OIG.OfficeP[email protected]hs.gov. Follow us on Twitter at: @dhsoig.
OIG HOTLINE
To report fraud, waste, or abuse, visit our website at www.oig.dhs.gov and click on the red
"Hotline" tab. If you cannot access our website, call our hotline at (800) 323-8603, fax our
hotline at (202) 254-4297, or write to us at:
Department of Homeland Security
Office of Inspector General, Mail Stop 0305
Attention: Hotline
245 Murray Drive, SW
Washington, DC 20528-0305
