IG questions appearance of bias in selection of DHS projects

The head of the Homeland Security Department's research and development office selected for funding three projects that were recommended by former business acquaintances, each of whom sought financial backing to conduct the work, according to a new report from the agency's inspector general.

The IG found that the projects were chosen for justifiable reasons and did not represent a personal conflict of interest for Adm. Jay Cohen, DHS undersecretary for science and technology. But the report suggested that the office take steps to reduce even the appearance of bias in its selection process.

"The method by which the projects were selected was not documented and the selection criteria were not clear, which cast initial doubt on the fairness of the selection of the three projects," the report stated. "Without a clear system for documenting the reasons for the project selections, S&T remains vulnerable to real or perceived conflicts of interest and abuses of position."

Cohen is tasked with identifying, prioritizing and selecting the Homeland Innovative Prototypical Solution and High Impact Technology Solution projects.

Shortly after he took over the directorate in mid-2006, Cohen developed ideas for HIPS and HITS projects from a number of sources, including acquaintances from private industry and academia. Three of the selected projects were suggested by acquaintances he had dealt with during his tenure as chief of the Navy's Office of Naval Research.

By December 2006, Cohen decided on a total of 15 projects, the report found. These projects were later approved by DHS senior leadership and by Congress.

The following year, S&T awarded two of these projects to the entities that had suggested them originally, the report found.

Funding for a third was to be awarded through a competitive bidding process in which the industry member who proposed the project would be participating. According to the IG, some directorate staff members familiar with the selection process were worried that Cohen had preselected certain industry members and their projects on the basis of his relationships with them, rather than on the merit of their proposals.

When Cohen and members of the S&T's Office of Procurement Operations learned of these concerns, they halted the bidding process.

"Even though we did not identify any improper FY 2007 HIPS and HITS selections, the initial appearance of unfairness in the selections is problematic," the IG stated. "Such appearances could undermine the public's trust in the department."

The report recommended that Cohen incorporate stronger internal controls into the process for selecting projects and better document decision-making. The IG also recommended that Cohen remove himself from the selection process, ceding control to another top S&T official.

In his written response, Cohen agreed with the recommendations, but argued that the "unnecessary discussion of unfounded 'ethical concerns' " had no place in the report.

"The draft report raises and then dismisses concerns that some projects were improperly selected, yet goes on to state without foundation that 'the method by which the projects were selected was not transparent, objective or fair,' " he said.

Cohen suggested that high-quality project ideas can come from practically anyone, including private industry, researchers or the general public.

"This is a complex and important topic and deserves a more thorough explanation than the draft report contains," he said. "Unless your inspection found that some statute or regulation was violated, I respectfully request that the discussion in the final report be limited to the need for establishing and documenting a more formal and repeatable process."

Despite the disagreement, the report takes an overall positive tone toward the S&T office, which has come under harsh criticism from Congress in recent years and has experienced significant turnover in its top positions.

In June 2006, the Senate report accompanying the fiscal 2007 DHS appropriations bill said, "The committee is extremely disappointed with the manner in which S&T is being managed…. This component is a rudderless ship without a clear way to get back on course."

Since Cohen's confirmation in August 2006, however, the IG said the directorate has dramatically modified and improved its business and management structure.

"The directorate's new organizational structure centralized programmatic and fiscal oversight, and improved communications," the IG found. "Its new processes for identifying, prioritizing and selecting each of its five types of projects incorporate Department of Homeland Security components' needs to a greater extent than in the past."

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