Update: DHS Re-established As Decision Authority
November 4, 2008
"The recent decision to rescind the U.S. Coast Guard's acquisition decision authority formalizes an oversight structure that had effectively been in place since 2006, despite the delegation provided in 2003. The DHS Investment Review Process has conducted reviews of U.S. Coast Guard acquisition programs, including the various Deepwater projects and contracts, as documented in Acquisition Decision Memorandums. The formal rescission merely documents the operating procedures and demonstrates uniformity in the DHS acquisition management function as detailed in its new Acquisition Directive 102-01."
- Department of Homeland Security's Chief Procurement Officer, Mr. Thomas W. Essig
On September 25, 2008, in accordance with GAO recommendations, DHS re-established itself as the acquisition decision authority for the Coast Guard’s Deepwater projects. Acquisition decision authority refers to the Department’s approval of key project milestone decisions at critical junctures for each major acquisition project, and has no impact on the Coast Guard’s contracting authority. The Coast Guard’s Deepwater projects have been operating in this manner for close to a year, so this change simply formalizes the process already in use as part of Coast Guard acquisition reform.
This resumption of acquisition decision authority does not imply removal of Coast Guard management of major acquisition projects. Rather, as promulgated in the Coast Guard’s Blueprint for Acquisition Reform and recommended by GAO, it re-establishes DHS as the key authority for Deepwater major acquisition project milestone decisions and formalizes the shift to proper acquisition decision authority and the Coast Guard's Major Systems Acquisition Manual (MSAM) guidance that was introduced in the Blueprint in July 2007.
The formal implementation of Coast Guard practice and the GAO’s recommendation ensures continued MSAM compliance and that major projects are reviewed and approved by DHS at prescribed decision milestones. Prior to DHS approval to proceed toward the next milestone, the Coast Guard must demonstrate the project is properly progressing by satisfying milestone and acquisition plan criteria.
GAO acknowledges that reforms, as delineated in the Blueprint for Acquisition Reform, have led to improved management and oversight of Deepwater projects. In fact, GAO recognized in its report the Coast Guard has made significant strides in effectively managing its acquisitions portfolio and was already returning to the original processes prescribed in the MSAM by the time it made its recommendation. Specifically, the report notes:
“The Coast Guard has begun to follow the disciplined, project management framework of its Major Systems Acquisition Manual (MSAM), which requires documentation and high-level executive approval of decisions at key points in a program’s life cycle.”
Major Systems Acquisition Manual
The MSAM requires DHS approval of project milestone decisions at critical junctures for each major acquisition project to ensure proper DHS decision authority and oversight of acquisition projects. In 2003, based on the Integrated Deepwater Program plan at the time, DHS delegated acquisition decision authority to the Coast Guard. In its June 2008 report, GAO recommended the delegation be rescinded to better align Deepwater management and oversight and facilitate decision-making authority across the Department. Re-establishment of acquisition decision authority enhances departmental oversight by re-engaging DHS in the decision-making process and re-introduces the disciplined acquisition processes required by the MSAM.
Report and Legislation References
DHS’s resumption of acquisition decision authority complies with the explanatory language accompanying the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009, signed into law on September 30, 2008. That law prescribed the following action to the Secretary of the Department of Homeland Security (DHS):
“Due to the Coast Guard's failure to adequately oversee the Deepwater program, the Secretary shall rescind the delegation of acquisition authority provided to the Coast Guard for Deepwater in order to keep oversight within the OCPO, as recommended by GAO [U.S. Government Accountability Office]
This language references GAO’s report to Congress titled “Coast Guard: Change in Course Improves Deepwater Management and Oversight, but Outcome Still Uncertain” (GAO-08-745, June 2008), in which the following recommendation was made:
“To help ensure that the initiatives to improve Deepwater management and oversight continue as intended and to facilitate decision-making across the department, we recommend that the Secretary of Homeland Security direct the Undersecretary for Management to rescind the delegation of Deepwater acquisition decision authority.”