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The Homeland Security Department must take steps to ensure that contractors in management support roles do not perform inherently governmental functions or influence government decisions, the Government Accountability Office has concluded.

In a report released Wednesday (GAO-07-990), the watchdog agency said that while it is necessary for DHS to use contractors to fill certain professional and management support roles, the department must improve its ability to manage the risk that accompanies the practice and ensure that the government maintains control over and accountability for its own decisions.

The Senate Homeland Security and Governmental Affairs Committee requested the report and held a hearing Wednesday to discuss whether DHS is too dependent on contractors.

DHS has used support contractors extensively to stand up new programs and offices quickly or reorganize existing ones. In the past several years, the agency has spent billions of dollars to procure these services from the private sector. In fiscal 2005, DHS spent $1.2 billion on professional and management support services; that number rose to $5 billion the next fiscal year.

"There is a danger that the department may become so dependent on contractors that it simply has no in-house ability to evaluate the solutions its contractors propose or to develop options on its own accord," said Sen. Joseph Lieberman, I-Conn., chairman of the committee. DHS could "be in danger of losing the ability to think and act on its own for the American people."

Steve Schooner, co-director of the Government Procurement Law Program at the George Washington University Law School, testified that DHS' need for contract services was unlikely to dissipate in the short term.

"It's a reflection of the fact that we've hollowed out the government workforce, especially the most skilled and talented individuals," Schooner said.

Some lawmakers said they are concerned that the agency is using its frazzled establishment as an excuse to engage in irresponsible contracting more than four years after it opened.

"It's not the beginning anymore," said Sen. Claire McCaskill, D-Mo. "The practice is growing, especially in the area of overseeing the overseers. . . . Contractors are overseeing companies they work for; it's incestuous."

Elaine Duke, DHS chief procurement officer, said she shares the committee's concern about increasing reliance on contractors across all agencies and is committed to managing the risks associated with using the private sector to support mission-critical functions.

"At DHS and across the government, there is a need to be increasingly sensitive to organizational conflict of interest issues, contractor ethics, and avoiding crossing into the employer/employee relationship when our federal employees interface with contractor employees," Duke said.

She said she generally agreed with GAO's recommendations and is taking steps to implement them. In particular, Duke is focused on building core competency within DHS' acquisition workforce and on more clearly defining the requirements for service contracts.

In August, Duke issued a memorandum to contracting officials at all DHS component agencies laying out her plans for improving service contracting; she testified Wednesday that as the agency matures and the acquisition workforce is strengthened, those improvements will be expanded.

COMMENTS

• If strategic planning, the determination of the course of our government's agencies - which in turn sets much of the course of the federal government, is not inherently governmental, then nothing is. Yet the service contracts that underlie so much of agency expenditures routinely pay contractors for strategic planning services. Kevin Blume Posted October 22, 2007 3:23 PM
• A simple solution: hire more federals!!! Every where I turn to there are federal vacancies not being filled or even advertised, why? It is not a budget issue, there is plenty of budget authority. SO what is the problem? This is NOT a procurement problem, it is a leadership issue! Hire more federals and this will build a competent workforce for the future with less dependence on contractors. Dallas Posted October 22, 2007 2:21 PM
• In the last 3 weeks, I bid on and lost in a competition to provide, among other things, the services of a Contract Specialist to DHS-ICE in Denver. The Point of Contact to whom I submitted my proposal was a contractor employee. The day bids were due, the CO admitted to me that her employer was also bidding for the contract. I said that the blatant Organizational Conflict of Interest disqualified them from bidding. So the CO issued a Mod stating that it did not constitute an OCI. They make up their own reality. Brian Posted October 20, 2007 4:31 AM