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115th Congress     }                                {        Report
                        HOUSE OF REPRESENTATIVES
 1st Session       }                                {          115-48

======================================================================



 
       DEPARTMENT OF HOMELAND SECURITY ACQUISITION INNOVATION ACT

                                _______
                                

 March 20, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. McCaul, from the Committee on Homeland Security, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1365]

    The Committee on Homeland Security, to whom was referred 
the bill (H.R. 1365) to amend the Homeland Security Act of 2002 
to require certain acquisition innovation, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment and recommends that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     3
Hearings.........................................................     3
ommittee Consideration...........................................     4
Committee Votes..................................................     5
Committee Oversight Findings.....................................     5
New Budget Authority, Entitlement Authority, and Tax Expenditures     5
Congressional Budget Office Estimate.............................     5
Statement of General Performance Goals and Objectives............     5
Duplicative Federal Programs.....................................     5
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
  Benefits.......................................................     6
Federal Mandates Statement.......................................     6
Preemption Clarification.........................................     6
Disclosure of Directed Rule Makings..............................     6
Advisory Committee Statement.....................................     6
Applicability to Legislative Branch..............................     6
Section-by-Section Analysis of the Legislation...................     6
Changes in Existing Law Made by the Bill, as Reported............     7

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Department of Homeland Security 
Acquisition Innovation Act''.

SEC. 2. ACQUISITION INNOVATION.

  (a) In General.--Title VII of the Homeland Security Act of 2002 (6 
U.S.C. 341 et seq.) is amended by adding at the end the following new 
section:

``SEC. 710. ACQUISITION INNOVATION.

  ``The Under Secretary for Management may--
          ``(1) designate an individual within the Department to manage 
        acquisition innovation efforts of the Department;
          ``(2) test emerging acquisition best practices to carrying 
        out acquisitions, consistent with the Federal Acquisition 
        Regulation and Department acquisition management directives, as 
        appropriate;
          ``(3) develop and distribute best practices and lessons 
        learned regarding acquisition innovation throughout the 
        Department;
          ``(4) establish metrics to measure the effectiveness of 
        acquisition innovation efforts with respect to cost, 
        operational efficiency of the acquisition program (including 
        timeframe for executing contracts), and collaboration with the 
        private sector, including small businesses; and
          ``(5) determine impacts of acquisition innovation efforts on 
        the private sector by--
                  ``(A) engaging with the private sector, including 
                small businesses, to provide information and obtain 
                feedback on procurement practices and acquisition 
                innovation efforts of the Department;
                  ``(B) obtaining feedback from the private sector on 
                the impact of acquisition innovation efforts of the 
                Department; and
                  ``(C) incorporating such feedback, as appropriate, 
                into future acquisition innovation efforts of the 
                Department.''.
  (b) Clerical Amendment.--The table of contents in section 1(b) of the 
Homeland Security Act of 2002 is amended by inserting after the item 
relating to section 709 the following new item:

``Sec. 710. Acquisition innovation.''.

  (c) Information.--Not later than 90 days after the date on which the 
Secretary of Homeland Security submits the annual budget justification 
for the Department of Homeland Security for each of fiscal years 2018 
through 2022, the Secretary shall, if appropriate, provide information 
to the Committee on Homeland Security of the House of Representatives 
and the Committee on Homeland Security and Governmental Affairs of the 
Senate on the activities undertaken in the previous fiscal year in 
furtherance of section 710 of the Homeland Security Act, as added by 
subsection (a) of this Act, on the following:
          (1) Emerging acquisition best practices that were tested 
        within the Department during such year.
          (2) Efforts to distribute best practices and lessons learned 
        within the Department, including through web-based seminars, 
        training, and forums, during such year.
          (3) Utilization by components throughout the Department of 
        best practices distributed by the Under Secretary of Management 
        pursuant to paragraph (3) of such section 710.
          (4) Performance as measured by the metrics established under 
        paragraph (4) of such section 710.
          (5) Outcomes of efforts to distribute best practices and 
        lessons learned within the Department, including through web-
        based seminars, training, and forums.
          (6) Any impacts of the utilization of innovative acquisition 
        mechanisms by the Department on the private sector, including 
        small businesses.
          (7) The criteria used to identify specific acquisition 
        programs or activities to be included in acquisition innovation 
        efforts and the outcomes of such programs or activities.
          (8) Recommendations, as necessary, to enhance acquisition 
        innovation in the Department.

                          Purpose and Summary

    The purpose of H.R. 1365 is to amend the Homeland Security 
Act of 2002 to require certain acquisition innovation.

                  Background and Need for Legislation

    The Government Accountability Office (GAO) and the DHS 
Office of Inspector General (OIG) have consistently reported on 
the longstanding challenges DHS faces in managing its major 
acquisition programs, which cost the Department over $7 billion 
each year. Every 2 years, the Government Accountability Office 
(GAO) identifies areas in the Federal Government that are 
``high risk'' due to their vulnerabilities to fraud, waste, 
abuse, and mismanagement. Since 2003, GAO has identified DHS's 
transformation of 22 agencies into one department, and the 
Department's subsequent challenges with its management 
functions, as high risk. In GAO's 2017 high risk update, GAO 
noted that DHS has made progress in addressing its management 
challenges, but has not yet completed all the necessary actions 
to fully address acquisition management. Additionally, the DHS 
Office of Inspector General (OIG) reports annually on major 
management challenges facing the Department. In November 2016, 
the OIG identified challenges in DHS's management of 
acquisition programs. Although DHS has taken steps to improve 
acquisition management, DHS struggles to ensure that the cost 
of major acquisition programs are in line with original 
estimates, are delivered on schedule, and provide the 
capabilities originally intended.
    H.R. 1365 allows the Under Secretary for Management (USM) 
to designate an official to manage acquisition innovation 
activities in the Department. It also allows the USM to test 
emerging acquisition best practices, develop and distribute 
best practices and lessons learned, engage with private 
industry, and establish performance metrics to assess the 
effectiveness of acquisition innovation efforts. Additionally, 
H.R. 1365 requires the Secretary to provide a report to the 
House and Senate homeland security committees on the USM's 
implementation of acquisition innovation activities.

                                Hearings

    No hearings were specifically held on H.R. 1365. However, 
the Committee held oversight hearings on acquisition 
management, as listed below.
    On February 26, 2015, the Subcommittee on Oversight and 
Management Efficiency held a hearing entitled ``Assessing DHS's 
Performance: Watchdog Recommendations to Improve Homeland 
Security.'' The Subcommittee received testimony from The 
Honorable John Roth, Inspector General, U.S. Department of 
Homeland Security; Ms. Rebecca Gambler, Director, Homeland 
Security and Justice, U.S. Government Accountability Office; 
and Dr. Daniel M. Gerstein, Senior Policy Researcher, The RAND 
Corporation.
    On April 22, 2015, the Subcommittee on Oversight and 
Management Efficiency held a hearing entitled ``Acquisition 
Oversight: How Effectively is DHS Safeguarding Taxpayer 
Dollars?'' The Subcommittee received testimony from Ms. Michele 
Mackin, Director, Acquisition and Sourcing Management, U.S. 
Government Accountability Office; The Honorable Chip Fulghum, 
Acting Deputy Undersecretary for Management and Chief Financial 
Officer, U.S. Department of Homeland Security; and Dr. Cedric 
Sims, Partner, Evermay Consulting Group.
    On September 18, 2015, the Subcommittee on Oversight and 
Management Efficiency held a hearing entitled ``Making DHS More 
Efficient: Industry Recommendations to Improve Homeland 
Security.'' The Subcommittee received testimony from Mr. Marc 
Pearl, President and Chief Executive Officer, Homeland Security 
and Defense Business Council; Mr. Harry Totonis, Board 
Director, Business Executives for National Security; and Ms. 
Elaine Duke, Principal, Elaine Duke & Associates, LLC.
    On February 16, 2017, the Subcommittee on Oversight and 
Management Efficiency held a hearing entitled ``Watchdog 
Recommendations: A Better Way Ahead to Manage the Department of 
Homeland Security.'' The Subcommittee received testimony from 
The Honorable John Roth, Inspector General, U.S. Department of 
Homeland Security, and Ms. Rebecca Gambler, Director, Homeland 
Security and Justice, U.S. Government Accountability Office.

                        Committee Consideration

    The Committee met on March 8, 2017, to consider H.R. 1365, 
and ordered the measure to be reported to the House with a 
favorable recommendation, as amended, by voice vote. The 
Committee took the following actions:
    The following amendments were offered:
 An en bloc amendment offered by Mr. Perry  (#1); was AGREED TO 
by voice vote. Consisting of the following amendments:
     An Amendment:
     Page 2, line 12, strike ``and'' after the semicolon.

     Page 2, line 18, strike the period, the closing quotes, and the 
second period and insert ``; and''.

     Page 2, beginning line 19, insert the following:
     ``(5) determine impacts of acquisition innovation efforts on the 
private sector by-
     ``(A) engaging with the private sector, including small 
businesses, to provide information and obtain feedback on procurement 
practices and acquisition innovation efforts of the Department;
     ``(B) obtaining feedback from the private sector on the impact of 
acquisition innovation efforts of the Department; and
     ``(C) incorporating such feedback, as appropriate, into future 
acquisition innovation efforts of the Department.''.

     An Amendment:
     Page 2, line 23, strike ``REPORT'' and insert ``INFORMATION''.

     Page 3, line 1, insert ``for each of fiscal years 2018 through 
2022'' after ``land Security''.

     Page 3, line 1, strike ``submit'' and insert ``provide 
information''.

     Page 3, line 4, strike ``a report''.

     Page 3, beginning line 7, strike ``. Each such report shall 
include information'' and insert a comma.

     Page 3, line 21, redesignate paragraph (5) as paragraph (6).

     Page 3, beginning line 21, insert the following:
     P(5) Outcomes of efforts to distribute best practices and lessons 
learned within the Department, including through web-based seminars, 
training, and forums.

     Page 3, line 22, strike ``mechanism'' and insert ``mechanisms''.

     Page 3, line 22, insert ``the private sector, including'' after 
``by the Department on''.

     Page 3, after line 23, insert the following:
     P(7) The criteria used to identify specific acquisition programs 
or activities to be included in acquisition innovation efforts and the 
outcomes of such programs or activities.
     P(8) Recommendations, as necessary, to enhance acquisition 
innovation in the Department.

     Page 3, line 22, insert ``the private sector, including'' after 
``by the Department on''.

     Page 3, after line 23, insert the following:
     P(7) The criteria used to identify specific acquisition programs 
or activities to be included in acquisition innovation efforts and the 
outcomes of such programs or activities.
     P(8) Recommendations, as necessary, to enhance acquisition 
innovation in the Department

                            Committee Votes

    Clause 3(b) of Rule XIII of the Rules of the House of 
Representatives requires the Committee to list the recorded 
votes on the motion to report legislation and amendments 
thereto.
    No recorded votes were requested during consideration of 
H.R. 1365.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of Rule XIII of the Rules of the 
House of Representatives, the Committee has held oversight 
hearings and made findings that are reflected in this report.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of Rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
1365, the Department of Homeland Security Acquisition 
Innovation Act, would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of Rule XIII of the Rules of the 
House of Representatives, a cost estimate provided by the 
Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974 was not made available to the 
Committee in time for the filing of this report. The Chairman 
of the Committee shall cause such estimate to be printed in the 
Congressional Record upon its receipt by the Committee.

         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of Rule XIII of the Rules of the 
House of Representatives, H.R. 1365 contains the following 
general performance goals and objectives, including outcome 
related goals and objectives authorized.
    The purpose of H.R. 1365, the Department of Homeland 
Security Acquisition Innovation Act, is to provide guidance to 
the Department of Homeland Security regarding acquisition 
management.

                      Duplicative Federal Programs

    Pursuant to clause 3(c) of Rule XIII, the Committee finds 
that H.R. 1365 does not contain any provision that establishes 
or reauthorizes a program known to be duplicative of another 
Federal program.

   Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    In compliance with Rule XXI of the Rules of the House of 
Representatives, this bill, as reported, contains no 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of the Rule 
XXI.

                       Federal Mandates Statement

    An estimate of Federal mandates prepared by the Director of 
the Congressional Budget Office pursuant to section 423 of the 
Unfunded Mandates Reform Act was not made available to the 
Committee in time for the filing of this report. The Chairman 
of the Committee shall cause such estimate to be printed in the 
Congressional Record upon its receipt by the Committee.

                        Preemption Clarification

    In compliance with section 423 of the Congressional Budget 
Act of 1974, requiring the report of any Committee on a bill or 
joint resolution to include a statement on the extent to which 
the bill or joint resolution is intended to preempt State, 
local, or Tribal law, the Committee finds that H.R. 1365 does 
not preempt any State, local, or Tribal law.

                  Disclosure of Directed Rule Makings

    The Committee estimates that H.R. 1365 would require no 
directed rule makings.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1.   Short Title.

    This section provides that this bill may be cited as the 
``Department of Homeland Security Acquisition Innovation Ac''.

Sec. 2.   Acquisition Innovation.

    Section 2 amends Title VII of the Homeland Security Act of 
2002 (Pub. L. 107-296) and allows for the Under Secretary for 
Management (USM) to designate an individual within the 
Department to manage acquisition innovation efforts; test, 
develop, and distribute acquisition best practices throughout 
the Department; and establish performance metrics to evaluate 
the effectiveness of those efforts. Section 2 also allows for 
the USM to obtain feedback from the private sector on 
acquisition innovation efforts and incorporate such feedback 
into future activities. Further, this section effectively 
codifies innovation activities executed by the current Chief 
Procurement Officer of the Department, such as the Procurement 
Innovation Lab.
    Section 2 also requires the Department to provide a report 
to the House and Senate homeland security committees each year 
on acquisition innovation activities executed in the prior 
year. This will assist Congress in determining whether the 
Department is effectively executing its acquisition innovation 
efforts. The report must include information on (1) tested 
acquisition best practices, (2) efforts to distribute related 
best practices in the Department, (3) utilization of best 
practices by components, (4) results of performance metrics, 
(5) outcomes of efforts to distribute best practices throughout 
the Department, (6) any impacts of acquisition innovation 
activities on the private sector and small businesses, (7) the 
criteria used to identify specific acquisition programs or 
activities to be included in efforts and their associated 
outcomes, and (8) any recommendations that could improve 
acquisition practices in the Department.
    The private sector is a vital element of the homeland 
security enterprise and it is essential that the Department 
proactively engage with industry partners, particularly as the 
Department's acquisition innovation efforts directly impact 
them. As a result, it is vital that DHS reach out to industry 
to identify areas for improvement as it relates to acquisition 
innovation efforts and incorporate its feedback as necessary. 
The Committee would like to emphasize the importance of 
engaging with the private sector, and in particular small 
businesses, when attempting to improve the very acquisition and 
procurement processes that affect them.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                     HOMELAND SECURITY ACT OF 2002


SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Homeland 
Security Act of 2002''.
  (b) Table of Contents.--The table of contents for this Act is 
as follows:

     * * * * * * *

                 TITLE V--NATIONAL EMERGENCY MANAGEMENT

     * * * * * * *
Sec. 710. Acquisition innovation.

           *       *       *       *       *       *       *


TITLE VII--MANAGEMENT

           *       *       *       *       *       *       *


SEC. 710. ACQUISITION INNOVATION.

  The Under Secretary for Management may--
          (1) designate an individual within the Department to 
        manage acquisition innovation efforts of the 
        Department;
          (2) test emerging acquisition best practices to 
        carrying out acquisitions, consistent with the Federal 
        Acquisition Regulation and Department acquisition 
        management directives, as appropriate;
          (3) develop and distribute best practices and lessons 
        learned regarding acquisition innovation throughout the 
        Department;
          (4) establish metrics to measure the effectiveness of 
        acquisition innovation efforts with respect to cost, 
        operational efficiency of the acquisition program 
        (including timeframe for executing contracts), and 
        collaboration with the private sector, including small 
        businesses; and
          (5) determine impacts of acquisition innovation 
        efforts on the private sector by--
                  (A) engaging with the private sector, 
                including small businesses, to provide 
                information and obtain feedback on procurement 
                practices and acquisition innovation efforts of 
                the Department;
                  (B) obtaining feedback from the private 
                sector on the impact of acquisition innovation 
                efforts of the Department; and
                  (C) incorporating such feedback, as 
                appropriate, into future acquisition innovation 
                efforts of the Department.

           *       *       *       *       *       *       *


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