GAO

GAO-21-135R, Missile Defense: Observations on Ground-based Midcourse Defense Acquisition Challenges and Potential Contract Strategy Changes, October 21, 2020

The Missile Defense Agency (MDA) is developing a system to defend the U.S. from long-range missile attacks. As MDA continues to develop this system, called Ground-based Midcourse Defense (GMD), it has opportunities to incorporate into its approach lessons learned from over 2 decades of system development. MDA has made progress in developing and fielding elements of the GMD system. For example, MDA is constructing a new missile field to expand the fleet of interceptors. However, MDA has also experienced significant setbacks. Most recently, the Department of Defense canceled development of a key GMD element, the Redesigned Kill Vehicle, in 2019 because of fundamental problems with the system's design. Ongoing Construction of a New Ground-based Midcourse Defense Interceptor Field (July 16, 2019) Over the years, GAO has identified practices that MDA could apply to the GMD program to improve acquisition outcomes, such as: Using knowledge-based acquisition practices Involving stakeholders early and often Providing effective oversight Promoting competition Performing robust testing GAO has also made numerous recommendations to improve MDA's acquisition outcomes and reduce risk. As of July 2020, the department has concurred with most of the recommendations GAO made since MDA's inception in 2002. Although the department has implemented many of the recommendations, it has further opportunities to implement the remaining open recommendations and apply lessons learned on a major, new effort to develop a next-generation GMD interceptor. Since the late 1990s, DOD has executed the GMD program through a prime contractor responsible for developing and integrating the entire weapon system. MDA is considering taking over these responsibilities for GMD for the next phase of the program. GAO found that this approach offers potential benefits to the agency, such as more direct control over and greater insight into GMD's cost, schedule, and performance. However, the approach has some challenges that, if not addressed, could outweigh the benefits. For example, MDA may encounter challenges obtaining the technical data and staffing levels necessary to manage this complex weapon system, which could ultimately affect its availability or readiness. As of October 2020, MDA has not yet determined an acquisition strategy for the next phase of the GMD program. The GMD system aims to defend the U.S. against ballistic missile attacks from rogue states like North Korea or Iran. DOD has been developing this system since the 1990s and has spent $53 billion on the system so far. GMD is a complex system that includes interceptors and a ground system, and MDA has largely relied on a contractor, Boeing, to manage development and system integration. MDA is considering moving away from this approach as the program embarks on developing a key element of the GMD, a new interceptor. The House Armed Services Committee included a provision in a report for GAO to assess the GMD contract structure and identify potential opportunities to improve government management and contractor accountability. This report addresses (1) the lessons learned from challenges MDA encountered acquiring the GMD system and (2) the potential benefits and risks of MDA taking over system integration responsibilities for GMD. To conduct this work, GAO reviewed GMD program documentation, prior GAO reports on missile defense, GAO interviews with other DOD components, and expert panel reviews of GMD. GAO also spoke with officials from MDA and other DOD components. GAO has 17 open recommendations aimed at improving missile defense acquisition outcomes and reducing risk. Recently, DOD has taken steps to address some of these open recommendations, but further action is needed to fully implement the remaining recommendations. For more information, contact W. William Russell at (202) 512-4841 or russellw@gao.gov.

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GAO-21-77, Homeland Security Acquisitions: DHS Has Opportunities to Improve Its Component Acquisition Oversight, October 20, 2020

Four components—Transportation Security Administration, Coast Guard, Customs and Border Protection, and the Countering Weapons of Mass Destruction Office—within the Department of Homeland Security (DHS) implemented the process to formally nominate and designate Component Acquisition Executives (CAE). However, four of the five individuals filling the CAE role—three as acting CAE—in the Management Directorate have not been subjected to this process (see figure). The process, described in guidance, entails preparing a nomination package for DHS to vet candidates' qualifications against criteria, and designating the selected individual in writing. Nomination and Designation Status of Department of Homeland Security's Management Directorate Component Acquisition Executives as of April 2020 Note: Non-major acquisitions are those with an expected life-cycle cost of less than $300 million. DHS indicated that the direct reporting relationship of acting CAEs to the DHS Chief Acquisition Officer makes designating CAEs in the Management Directorate through this process unnecessary. Without using the nomination and designation process, DHS officials lack a standard way to gain insight into the background of the acting CAEs and whether any gaps in experience need to be mitigated. For example, the CAE for the Coast Guard was nominated and designated, but the CAE did not have the acquisition experience that guidance suggests for the position. In the nomination documentation, the Coast Guard identified this issue and described the experienced staff that will support the nominated CAE. However, DHS cannot be confident that the acting CAEs in the Management Directorate are taking mitigation steps, because they have not been subject to this process. Until DHS consistently executes the nomination and designation process described in its guidance, the Chief Acquisition Officer cannot be assured that all acquisition programs are receiving oversight by individuals qualified for the CAE position. DHS invests billions of dollars each year in its major acquisition programs—such as systems to help secure the border, increase marine safety, and screen travelers—to help execute its many critical missions. In fiscal year 2020 alone, DHS planned to spend more than $10 billion on major acquisition programs, and ultimately the department plans to invest more than $200 billion over the life cycle of these programs. A critical aspect of DHS's acquisition process is oversight of this portfolio by the CAEs. Most CAEs are senior acquisition officials below the department level, within the components. The CAEs have oversight responsibilities over the components' major and non-major acquisition programs, among other duties. GAO was asked to review DHS's CAE functions. This report assesses the extent to which selected CAEs are nominated and designated to execute oversight responsibilities, among other objectives. GAO selected five DHS components, including the department-level Management Directorate, based, in part, on their number and type of acquisitions. GAO reviewed DHS's acquisition policy, guidance and documentation from the selected DHS components and interviewed CAEs, CAE support staff, and other DHS officials. GAO is making four recommendations, including that DHS execute the CAE nomination and designation process consistently as defined in its guidance. DHS concurred with all four recommendations. For more information, contact Marie A. Mak at (202) 512-4841 or makm@gao.gov.

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GAO-21-69, VA Health Care: Better Data Needed to Assess the Health Outcomes of Lesbian, Gay, Bisexual, and Transgender Veterans, October 19, 2020

The Department of Veterans Affairs' (VA) Veterans Health Administration (VHA) analyzes national-level data by birth sex to assess health outcomes for women veterans. For example, it analyzes frequency data to identify their most common health conditions. However, VHA is limited in its assessment of health outcomes for the lesbian, gay, bisexual, and transgender (LGBT) veteran population because it does not consistently collect sexual orientation or self-identified gender identity (SIGI) data. VHA officials stated that providers may record veterans' sexual orientation—which can be used to identify lesbian, gay, and bisexual veterans—in non-standardized clinical notes in electronic health records. However, without a standardized field, providers may not be consistently collecting these data, and VHA does not know the total number of these veterans in its system. VHA officials recognize the importance of consistently collecting these data, but have yet to develop and implement a field for doing so. VHA collects SIGI data—which can be used in part to identify transgender veterans—in enrollment, administrative, and electronic health record systems. Although VHA has worked to improve the collection of these data, GAO found inconsistencies in how VHA records SIGI and, according to VA, 89 percent of veterans' records lack SIGI information. VHA added a field to collect this information in the administrative system; however, these data are not linked to electronic health records. As such, VHA providers cannot see the data during clinical visits when determining the appropriate services for transgender veterans, such as screening certain transgender men for breast and cervical cancers, as required by VHA policy. VHA's plan to link SIGI data across both systems has been postponed several times, and the data remain unlinked. VHA Sexual Orientation and Self-Identified Gender Identity (SIGI) Data Collection Limitations, Fiscal Year 2020 Until VHA can more consistently collect and analyze sexual orientation and SIGI data for the veteran population served, it will have a limited understanding of the health care needs of LGBT veterans, including any disparities they may face. VHA provides care to a diverse population of veterans, including women and LGBT veterans. These veterans may experience differences in health outcomes that are closely linked with social or economic disadvantage, and VA considers it important to analyze the services they receive as well as their health outcomes to improve health equity. House Report 115-188 included a provision for GAO to review VA's data collection and reporting procedures for information on veterans' gender and sexual orientation. This report describes how VHA assesses health outcomes for women veterans and examines the extent to which VHA assesses health outcomes for LGBT veterans. GAO reviewed VHA directives and VHA's Health Equity Action Plan. GAO interviewed officials from VHA's Women's Health Services and LGBT Health Program, VHA researchers who focus on women and LGBT veterans, and representatives from other health care systems with experience collecting gender and sexual orientation information. GAO is making four recommendations to VA to consistently collect sexual orientation and SIGI data, and analyze these data to assess health outcomes for LGBT veterans. VA concurred with GAO's recommendations and identified actions it is taking to address them. For more information, contact Debra A. Draper at (202) 512-7114 or draperd@gao.gov.

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GAO-20-679, Tax Administration: Opportunities Exist to Improve Oversight of Hospitals' Tax-Exempt Status, September 17, 2020

Nonprofit hospitals must satisfy three sets of requirements to obtain and maintain a nonprofit tax exemption (see figure). Requirements for Nonprofit Hospitals to Obtain and Maintain a Tax-Exemption While PPACA established requirements to better ensure hospitals are serving their communities, the law is unclear about what community benefit activities hospitals should be engaged in to justify their tax exemption. The Internal Revenue Service (IRS) identified factors that can demonstrate community benefits, but they are not requirements. IRS does not have authority to specify activities hospitals must undertake and makes determinations based on facts and circumstances. This lack of clarity makes IRS's oversight challenging. Congress could help by adding specificity to the Internal Revenue Code (IRC). While IRS is required to review hospitals' community benefit activities at least once every 3 years, it does not have a well-documented process to ensure that those activities are being reviewed. IRS referred almost 1,000 hospitals to its audit division for potential PPACA violations from 2015 through 2019. However, IRS could not identify if any of these referrals related to community benefits. GAO's analysis of IRS data identified 30 hospitals that reported no spending on community benefits in 2016, indicating potential noncompliance with providing community benefits. A well-documented process, such as clear instructions for addressing community benefits in the PPACA reviews or risk-based methods for selecting cases, would help IRS ensure it is effectively reviewing hospitals' community benefit activities. Further, according to IRS officials, hospitals with little to no community benefit expenses would indicate potential noncompliance. However, IRS was unable to provide evidence that it conducts reviews related to hospitals' community benefits because it does not have codes to track such audits. Slightly more than half of community hospitals in the United States are private, nonprofit organizations. IRS and the Department of the Treasury have recognized the promotion of health as a charitable purpose and have specified that nonprofit hospitals are eligible for a tax exemption. IRS has further stated that these hospitals can demonstrate their charitable purpose by providing services that benefit their communities as a whole. In 2010, Congress and the President enacted PPACA, which established additional requirements for tax-exempt hospitals to meet to maintain their tax exemption. GAO was asked to review IRS's implementation of requirements for tax-exempt hospitals. This report assesses IRS's (1) oversight of how tax-exempt hospitals provide community benefits, and (2) enforcement of PPACA requirements related to tax-exempt hospitals. GAO is making one matter for congressional consideration to specify in the IRC what services and activities Congress considers sufficient community benefit. GAO is also making four recommendations to IRS, including to establish a well-documented process to ensure hospitals' community benefit activities are being reviewed, and to create codes to track audit activity related to hospitals' community benefit activities. IRS agreed with GAO's recommendations. For more information, contact Jessica Lucas-Judy at (202) 512-9110 or lucasjudyj@gao.gov.

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GAO-21-72, Fair Labor Standards Act: Observations on the Effects of the Home Care Rule, October 19, 2020

In response to the Department of Labor's Home Care Rule—which extended Fair Labor Standards Act (FLSA) minimum wage and overtime protections to more home care workers—some states made changes in their Medicaid programs, according to studies and GAO interviews with stakeholders and selected state officials. Many stakeholders said the rule led some states to limit home care workers' hours in their Medicaid programs to avoid overtime costs. For example, in Oregon, newly hired home care workers provided through Medicaid were generally limited to 40 hours per week, according to state documentation. Some states also budgeted additional funds for overtime pay. In addition, according to a few stakeholder groups, some states changed service delivery in their Medicaid programs, for example, by discontinuing services such as live-in care. In contrast, several stakeholders said some states did not make any major changes to their Medicaid programs' home care services. Provider agencies, workers, and consumers experienced changes after the Home Care Rule took effect. Specifically, some provider agencies restricted workers' hours to limit overtime costs, though this can result in the need to hire more workers, leading to increased costs of recruiting, training, and scheduling, according to several stakeholders. GAO's analysis of national survey data found that home care workers, when compared to occupations with similar education and training requirements, were more likely to work full-time but did not earn significantly higher earnings following the Home Care Rule (see figure). Many stakeholders GAO spoke with described ongoing challenges consumers face in obtaining home care services, such as difficulty finding workers to hire. Estimated Median Weekly Earnings of Employed Workers, 2010 through 2019 Note: The margins of error at the 95 percent confidence level are within plus or minus 7.2 percent of the estimate itself. Employment in home care is projected to grow nearly 40 percent over the next decade to meet demand from an increasing population of older adults and people with disabilities. Home care workers help those who need assistance with activities of daily living such as dressing, eating, or bathing. State Medicaid programs may allow home care for eligible individuals as an alternative to institutional care. The Department of Labor's (DOL) Home Care Rule, which went into effect in 2015, extended FLSA protections to more home care workers. GAO was asked to review the implementation and effects of the Home Care Rule. This report examines what is known about (1) changes states made to their Medicaid programs in response to the Home Care Rule; and (2) the Home Care Rule's effect on home care provider agencies, workers, and consumers. To address these objectives, GAO analyzed 2010 through 2019 national survey data on workers' hours and wages; interviewed stakeholders from 15 organizations that represent the different groups affected, DOL officials, and home care program officials from three states selected based on variation in their Medicaid programs and minimum wage levels; and reviewed studies on state strategies to implement the Home Care Rule. For more information, contact Melissa Emrey-Arras at (617) 788-0534 or emreyarrasm@gao.gov.

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GAO-20-564, Workplace Sexual Harassment: Experts Suggest Expanding Data Collection to Improve Understanding of Prevalence and Costs, September 30, 2020

Limited nationwide data hinder a comprehensive understanding of the prevalence and costs of workplace sexual harassment. According to GAO's analysis of available federal data and literature review, the few reliable nationwide estimates of sexual harassment's prevalence vary substantially due to differences in methodology, including the question structure and time period the survey used. Moreover, the likelihood of experiencing workplace sexual harassment can vary based on an individual's demographic characteristics—such as gender, race, and age—and whether the workplace is male- or female-dominated. For example, women, younger workers, and women in male-dominated workplaces were more likely to say they experienced harassment. GAO did not find any recent cost estimates of workplace sexual harassment, but identified four broad categories of costs: health, productivity, career, and reporting and legal costs (see figure). Examples of Costs Associated with Workplace Sexual Harassment The Equal Employment Opportunity Commission (EEOC), as part of its mission to prevent and remedy unlawful employment discrimination, maintains data on sexual harassment and retaliation charges filed against employers, but cannot systematically analyze the relationship between the two for all charges filed nationwide. After filing sexual harassment charges or engaging in other protected activity, employees may experience retaliation, such as firing or demotion, and EEOC data show that retaliation charges constitute a growing portion of its workload. EEOC's planning documents highlight its intention to address retaliation and use charge data to inform its outreach to employers. However, while EEOC can review electronic copies of individual charges for details, such as whether a previously filed sexual harassment charge led to a retaliation charge, its data system cannot aggregate this information across all charges. Without the capacity to fully analyze trends in the relationship between sexual harassment and retaliation charges, EEOC may miss opportunities to refine its work with employers to prevent and address retaliation. Experts at GAO's roundtable said nationally representative surveys would help to improve available information on workplace sexual harassment. Expert recommendations focused on three main areas: (1) survey administration and resources, including advantages and disadvantages to various federal roles; (2) methods to collect data, such as using stand-alone surveys or adding questions to existing surveys; and (3) content of data to be collected, including employee and employer characteristics and specific costs. While many workers in the United States experience workplace sexual harassment—resulting in substantial costs to them and their employers—the extent of sexual harassment and the magnitude of its effects are not fully understood. GAO was asked to examine the extent to which reliable information is available on workplace sexual harassment's prevalence and costs. This report examines (1) what is known about the prevalence and costs of U.S. workplace sexual harassment, including the federal workforce, (2) the extent to which EEOC collects sexual harassment data, and (3) data collection approaches experts recommend to improve available information. To address these objectives, GAO analyzed EEOC data and survey data from other federal agencies, interviewed officials and reviewed documentation from multiple federal agencies, and interviewed experts on sexual harassment. GAO also convened a 2-day roundtable of experts, with assistance from the National Academies of Sciences, Engineering, and Medicine, and conducted a literature review. GAO recommends that EEOC assess the feasibility of systematically analyzing its data on retaliation charges and the associated protected activities, including those related to sexual harassment. EEOC did not state whether or not it concurred with GAO's recommendation. GAO continues to believe this recommendation is appropriate, as discussed in the report. For more information, contact Cindy S. Brown Barnes at (202) 512-7215 or brownbarnesc@gao.gov.

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