By Jason Miller
Executive Editor
Federal News Radio

The Homeland Security Department is tackling one of its biggest management problems first as part of its overall approach to complete its transformation and get off the government’s high-risk list.

Janice Holl Lute, DHS deputy secretary, told Senate Homeland Security and Governmental Affairs lawmakers Thursday that it was improving all stages of its acquisition process as part of its overall management integration effort.

One of the end results, Lute said, is to get off the Government Accountability Office’s high-risk list, which is due out in January. DHS management has been on the list since Congress created the agency in 2003.

“In May of this year, I directed our undersecretary for management to develop a comprehensive strategic management approach that enhances people, structures and processes necessary to meet our mission goals by integrating and aligning functional areas at both the departmental and component levels,” Lute said. “The 2012 budget will represent the department’s efforts to align its budget and program structure to core homeland security missions described in the Quadrennial Homeland Security Review and the Future Year Homeland Security Plan will further reflect the new alignment in the outyears.”

She added that DHS has reevaluated every performance measure – 180 in all. Lute said the agency has recast them in plain language so they provide indicators of the value the program brings to the mission.

Lute said DHS is focusing on seven initiatives that will contribute to the integration of the department’s management. These include enterprise governance, balanced workforce strategy, headquarters consolidation and data center migration.

But it’s coming up with a common language and business discipline across their acquisition, financial management and human capital management processes that will make the biggest difference.

“We have done a lot of work to strengthen our acquisition reform, building on the work that has been done by predecessors in this department,” Lute said. “We are determined to get a handle end-to-end of the acquisition process beginning with our requirements and working through finally to lifecycle cost estimates that are accurate and reflective of the costs of systems over time and understanding how with the interface of key decisions in the acquisition oversight process brings us better products.”

She added that DHS is taking additional steps from integrating science and technology to a greater extent to instituting acquisition career development programs to strengthening their procurement staffing.

The department also is conducting regular reviews of project portfolios.

“Over 70 major acquisition projects have undergone acquisition review boards since 2009,” she said. “There are procurement management reviews, management certification processes and strategic sourcing boards that now meet in the areas of IT, for example, to ensure our acquisition is on track.”

Cathleen Berrick, GAO’s managing director of homeland security and justice issues, testified that on the surface DHS’s plan to improve acquisition processes look good. But, like previous attempts to fix these problems, it will all come down to implementation.

She said previously DHS didn’t follow its own plans.

“We looked at programs and most of them had not gone through the acquisition review board process,” she said. “Most of them didn’t have department approved requirements, department approved acquisition baselines like they were required to by the directive. Sometimes programs would go through the acquisition review board, but the feedback from the board and the recommendations from the board weren’t followed up on.”

Berrick also said DHS needs to be more clear about what their end state is. She said the agency seems to understand where they want to go with acquisition, financial management and human capital, but it’s not clear how all of these fit together down the road.

Lute said the QHSR and other outyears planning will help them detail where they are going.

But in the meantime, Lute said DHS still must focus on some immediate changes, including balancing their federal and contractor workforces.

Sen. Daniel Akaka (D-Hawaii), chairman of the Subcommittee on Government Management, the Federal Workforce and the District of Columbia, said the ratio of employees to contractors almost is 1-to-1 and that needs to be fixed.

Lute said DHS will bring more than 3,500 contractor positions in-house in 2010. DHS will continue to look at contractors that are potentially are doing inherently governmental jobs, closely associated with inherently governmental and critical jobs.

She said DHS has prioritized the conversion to federal employees for those functions.

Besides the acquisition processes and workforce, Lute said DHS is moving ahead with its financial systems consolidation project, known as TASC.

Industry sources expected DHS to make an award in August for the $400 million program. But the Office of Management and Budget slowed down all financial systems projects for review.

Lute said DHS is following OMB’s requirements to focus on specific needs of the components based on risk.

“We have established an executive steering committee to ensure TASC stays in alignment with our high priority needs,” she said.

She said once awarded TASC will focus on 18-24 month deployment schedule and a plan to minimize cost and risk.

“TASC needs strong oversight,” Akaka said. “Financial management has been an ongoing problem since the department’s formation. Many DHS components still use legacy financial management tools from their former agencies.”

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