Just ahead of the busiest time of the year for most agency acquisition shops, the Homeland Security Department is throwing in an extra layer of review for its procurement efforts.
DHS Secretary Kristi Noem is requiring her office to review and sign off on all contracts and awards over $100,000.
(AP Photo/Etienne Laurent)
“All proposals for my consideration must include all relevant details, including any mission impact, dollar values, description of the supplies or services, any timeliness issues and a description of the proposed action,” Noem wrote in the memo obtained by Federal News Network. “Requests for approval of obligations above the $100,000 threshold must be submitted via memo through the Executive Secretary process. As with any request for secretarial approval, please allow a minimum of five days for front office review.”
Based on the last three fiscal years’ data, Noem’s office will have to approve more than 5,100 contract actions worth over 100,000.
“I think most, if not all sane and knowledgeable people would consider this policy absolutely nuts,” said Mark Borkowski, who served for 13 years as the assistant commissioner and chief acquisition officer at the Customs and Border Protection directorate before retiring in 2023. “I understand why someone would want to do this. I completely understand the rationale as we did something similar at CBP when I was there. This is as much an opportunity to audit contracts and figure out what is there and look for waste and redundancy. So I understand their motivation, but this will be tremendous workload.”
Data from Deltek, a market research firm, found DHS spends between 45% and 47% of its procurement budget in the fourth quarter, which starts July 1.
Federal News Network asked DHS for more details about the decision, including how the Noem plans to ensure the approval process for contract and grant awards doesn’t create a backlog at a critical time of the year.
A DHS spokesperson said: “Under Secretary Noem’s leadership, DHS is rooting out waste, fraud [and] abuse, and is reprioritizing appropriated dollars. Secretary Noem is delivering accountability to the U.S. taxpayer, which Washington bureaucrats have ignored for decades at the expense of American citizens.”
Noem said in her memo that this new guidance supersedes a previous directive calling for her approval for all spending over $25 million.
DHS policy is “bush league”
Borkowski said the memo opens the door to a lot of questions about the reviews needed when an office picks up an option under an existing contract or for task orders under indefinite delivery, indefinite quantity (IDIQ) type contracts. He said CBP used a time-and-materials contracts to address contingency or emergency needs and questioned whether those, too, would need Secretary approval.
“There has to be some other agenda here. Is the intent to slow down and gum up the works or to stop things? There is no way the secretary will be able to review these contracts,” Borkowski said. “Who will be doing these reviews? The politicals? But they will also need experts in procurement and acquisition from across the agency so that means folks will be pulled away from supporting the mission at one of the busiest times of the year. I know procurement people are often stressed at end of fiscal year so I’d also be concerned what this will do to workload on folks who now have to be diverted to support this process.”
Another former DHS acquisition executive, who requested anonymity for fear of reprisals, called this memo “ridiculous” and “bush league.”
“The procurement system is purposely separated from political influence. By doing this she’s violating that principle,” the former executive said. “Is the secretary in the position to make technical and cost trade-off analysis? Does her staff have cost analysts to determine if the price is ‘right’ based on the requirement? Is she merely looking to see if the award is going to a company favorable to the administration? The mission need and estimated costs are always decided BEFORE the procurement.”
Both Borkowski and the other former executive said the five-day review period and the $100,000 floor threshold also are concerning.
Not only is $100,000 well below the Simplified Acquisition Threshold of $350,000, but many times these small buys are done using purchase cards, which means there is an immediate need for the product or service.
“Smart buying would suggest that low-dollar value items are purchased at economical quantities for the sake of efficiency and to save money. The fact that secretary would want to consider little thing like bulk printer paper buys, restocking rubber gloves at TSA check points or anything of this nature sounds like waste, fraud and abuse to me,” said the former executive. “The secretary and her staff should have far more important things to do with her time.”
5-day reviews critical
Borkowski said contracting officers can easily build in the five-day review requirement into their timeline so as not to impact the acquisition. But he’s skeptical that the secretary’s office can be relied upon to meet their own deadlines.
“If you can’t rely on the five day review, and I don’t believe you can, then I think you will have some serious issues getting contract actions through. Hopefully they find some way to come up with a waiver for contingencies and other urgent needs,” he said.
During his last few years at CBP, Borkowski said he initiated a similar review of service contracts after receiving criticism from oversight bodies like the Government Accountability Office.
“I was tasked to create a review process for service contracts and we met monthly. The first thing we did was collect list of contracts and there were thousands of them. We had to set threshold for what to review and we also looked those deemed high interest. We set a threshold of $2 million. If we went below that, there wasn’t enough hours in the day and would’ve shut the organization down waiting to review them. That was just CBP and just a subset of contracts,” he said. “I ran that and had others to help, and it was a lot of work. And I was just a component acquisition executive. This new effort is going to be an incredible amount of work, particularly if you go down to sec level.”
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