The Government Accountability Office (GAO) has previously found problems with Federal Emergency Management Agency (FEMA), U.S. Agency for International Development, and Departments of Defense and State use and oversight of contracts awarded citing the urgency exception to competition. The watchdog was therefore asked to review this issue within the Department of Homeland Security (DHS).
DHS acquires billions of dollars of goods and services each year through contracts awarded through limited or no competition. Competition is generally required for federal contract awards, which GAO has found helps the government determine a fair price. But, there are certain exceptions to competition requirements when justified by an urgent need. Justifications provide an oversight mechanism for senior procurement officials.
Spending on urgent contracts increased from $75 million in fiscal year 2016 to $1.3 billion in fiscal year 2020 due to contracts awarded in response to COVID-19, hurricanes, and other needs. Five components—FEMA, the U.S. Coast Guard, U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, and the Transportation Security Administration (TSA)—accounted for 96 percent of DHS’s $2.6 billion in obligations on urgent contracts from fiscal years 2016 through 2020. Each component made obligations on urgent contracts relevant to its mission. For example, FEMA obligated about $260 million related to hurricanes and other disasters, a majority of which was for goods such as tank and pump systems, fuel tanks, and hot meals during the response to Hurricanes Harvey and Maria. Meanwhile, a substantial amount of TSA obligations were on a single urgent contract for services pertaining to the maintenance and repair of airport screening equipment.
Fiscal year 2020 saw the largest increase in DHS’s obligations on urgent awards due to the pandemic response. However, when excluding COVID-19, obligations on urgent contracts in fiscal year 2020 decreased.
All urgent awards GAO reviewed from selected components justified forgoing competition due to unexpected events, such as natural disasters or bid protests. However, across the contracts GAO reviewed, DHS did not always revise justifications after significant increases in contract value. For example, a U.S. Customs and Border Protection (CBP) order for soft-sided facilities to shelter individuals arriving at the southwest border increased almost $20 million before a new written justification for using the urgency exception was drafted. In another example, Federal Law Enforcement Training Centers (FLETC) extended the period of performance of a contract for critical training services resulting in a more than fivefold increase in obligations, from about $677,000 to $4.4 million, without revising the justification and getting approval for the revision. FLETC officials told GAO that they recalled the proper authority approving the modification, but said that they were unable to find written documentation of the approval.
Some component officials GAO spoke with acknowledged that there are sometimes errors or confusion related to coding noncompetitive awards. For example, CBP officials said that errors are possible in entering data, so some urgent contracts awarded using simplified acquisition procedures may be coded incorrectly.
GAO also found that some selected components did not have required appointment letters to document contracting officer representative (COR) responsibilities for monitoring performance across contracts GAO reviewed. Contracting officers are responsible for monitoring contractor performance but may delegate these responsibilities to CORs via appointment letters. CBP, ICE, and the U.S. Secret Service were unable to provide GAO with COR appointment letters for six of the 15 awards that the watchdog reviewed for which CORs were assigned. In one instance, component officials said the urgency of the requirement left them with insufficient time to draft the letters. Also, Coast Guard officials identified a contract for which they said there was not enough time to assign and appoint a COR due to the urgency of the requirement. They instead had to rely on on-site personnel to manage performance and contract oversight.
GAO’s report notes DHS’s improvements and makes three recommendations, with which the agency has concurred.
- Clearly communicate and enforce correct procedures, to ensure officials responsible for entering data accurately enter information on noncompetitively awarded contracts.
- Better communicate and enforce department guidance to revise justifications and obtain approvals following certain post-award modifications to urgent noncompetitive contracts.
- Clearly communicate and enforce existing requirements, to ensure contracting officials maintain formal COR appointment letters in the contract file.
DHS expects to complete work to address the first and third recommendations by the end of this month. In response to the second recommendation, DHS will review existing guidance and policy to identify areas requiring clarification or expansion. Following this, it will issue an acquisition alert and/or update policy and guidance as appropriate by August 31, 2022.