Federal Real Property: DHS and GSA Need to Strengthen the Management of DHS Headquarters Consolidation
Highlights
What GAO Found
The Department of Homeland Security (DHS) and General Services Administration (GSA) planning for the DHS headquarters consolidation does not fully conform with leading capital decision-making practices intended to help agencies effectively plan and procure assets. DHS and GSA officials reported that they have taken some initial actions that may facilitate consolidation planning in a manner consistent with leading practices, such as adopting recent workplace standards at the department level and assessing DHS's leasing portfolio. For example, DHS has an overall goal of reducing the square footage allotted per employee across DHS in accordance with current workplace standards. Officials acknowledged that this could allow more staff to occupy less space than when the campus was initially planned in 2009. DHS and GSA officials also reported analyzing different leasing options that could affect consolidation efforts. However, consolidation plans, which were finalized between 2006 and 2009, have not been updated to reflect these changes. According to DHS and GSA officials, the funding gap between what was requested and what was received from fiscal years 2009 through 2014, was over $1.6 billion. According to these officials, this gap has escalated estimated costs by over $1 billion—from $3.3 billion to the current $4.5 billion—and delayed scheduled completion by over 10 years, from an original completion date of 2015 to the current estimate of 2026. However, DHS and GSA have not conducted a comprehensive assessment of current needs, identified capability gaps, or evaluated and prioritized alternatives to help them adapt consolidation plans to changing conditions and address funding issues as reflected in leading practices. DHS and GSA reported that they have begun to work together to consider changes to their plans, but as of August 2014, they had not announced when new plans will be issued and whether they would fully conform to leading capital decision-making practices to help plan project implementation.
DHS and GSA did not follow relevant GSA guidance and GAO's leading practices when developing the cost and schedule estimates for the St. Elizabeths project, and the estimates are unreliable. For example, GAO found that the 2013 cost estimate—the most recent available—does not include a life-cycle cost analysis of the project, including the cost of operations and maintenance; was not regularly updated to reflect significant program changes, including actual costs; and does not include an independent estimate to help track the budget, as required by GSA guidance. Also, the 2008 and 2013 schedule estimates do not include all activities for the government and its contractors needed to accomplish project objectives. GAO's comparison of the cost and schedule estimates with leading practices identified the same concerns, as well as others. For example, a sensitivity analysis has not been performed to assess the reasonableness of the cost estimate. For the 2008 and 2013 schedule estimates, resources (such as labor and materials) are not accounted for and a risk assessment has not been conducted to predict a level of confidence in the project's completion date. Because DHS and GSA project cost and schedule estimates inform Congress's funding decisions and affect the agencies' abilities to effectively allocate resources, there is a risk that funding decisions and resource allocations could be made based on information that is not reliable or is out of date.
Why GAO Did This Study
DHS and GSA are managing an estimated $4.5 billion construction project at the St. Elizabeths Campus in Washington, D.C. The project, designed to consolidate DHS's executive leadership, operational management, and other personnel at one secure location rather than at multiple locations throughout the Washington, D.C., metropolitan area, has a projected completion date of 2026.
GAO was asked to examine DHS and GSA management of the headquarters consolidation, including the development of the St. Elizabeths campus. This report addresses the extent to which DHS and GSA have (1) developed consolidation plans in accordance with leading capital decision-making practices and (2) estimated the costs and schedules of the St. Elizabeths project in a manner that is consistent with leading practices. GAO assessed various DHS and GSA plans, policies, and cost/schedule estimates, and interviewed DHS and GSA officials.
Recommendations
GAO recommends, among other things, that DHS and GSA develop revised DHS headquarters plans that reflect leading practices for capital decision making and reliable cost and schedule estimates. Congress should consider making future funding for the project contingent upon DHS and GSA developing plans and estimates commensurate with leading practices. DHS and GSA concurred with our recommendations.
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress should consider making future funding for the St. Elizabeths project contingent upon DHS and GSA developing a revised headquarters consolidation plan, for the remainder of the project, that conforms with leading practices and that (1) recognizes changes in workplace standards, (2) identifies which components are to be colocated at St. Elizabeths and in leased and owned space throughout the National Capital Region, and (3) develops and provides reliable cost and schedule estimates. | We reported in September 2014 that DHS and GSA planning for the DHS headquarters consolidation did not fully conform with leading capital decision-making practices. We reported that because DHS and GSA project cost and schedule estimates would inform Congress's funding decisions and affect the agencies' abilities to effectively allocate resources, there was a risk that funding decisions and resource allocations could be made based on information that was not reliable or is out of date. We therefore recommended that Congress should consider making future funding for the St. Elizabeths project contingent upon DHS and GSA developing a revised headquarters consolidation plan, for the remainder of the project, that conforms with leading practices and that (1) recognizes changes in workplace standards, (2) identifies which components are to be colocated at St. Elizabeths and in leased and owned space throughout the National Capital Region, and (3) develops and provides reliable cost and schedule estimates. Since our 2014 report, Congress provided over $1.2 billion in funding to DHS and GSA in fiscal years 2015 through 2022, although DHS and GSA had not yet developed or provided the information we identified that would align the project planning with leading practices. For example, we reported in August 2022 that while DHS and GSA had defined the scope for the remaining projects they planned to build at St. Elizabeths, the agencies had not yet provided reliable cost and schedule estimates. Given the appropriations from fiscal year 2015 through 2022, action has not been taken in response to our recommendation. However, given that the majority of the project has been funded, we believe this recommended action has been overcome by events and are therefore closing this recommendation. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Homeland Security |
Priority Rec.
The Secretary of Homeland Security should designate the headquarters consolidation program a major acquisition, consistent with DHS acquisition policy, and apply DHS acquisition policy requirements. |
In alignment with GAO's recommendation, on September 16, 2014, DHS issued an Acquisition Decision Memorandum designating the DHS-funded portions of the headquarters consolidation program as a Major Acquisition Program to be overseen by the departmental Acquisition Review Board (ARB). DHS made further progress implementing this recommendation by conducting and documenting an ARB of the program on November 15, 2016. The ARB process provided DHS greater oversight of headquarters consolidation, and provided a forum for officials to consider a wide range of issues affecting consolidation efforts, such as funding and project scope. Further, in June 2018, DHS stated that additional ARB reviews will be scheduled when the revised headquarters consolidation plan is finalized (expected by the end of calendar year 2018), and also that DHS is aligning consolidation program documentation to meet the spirit of DHS acquisition policy guidance. These actions are consistent with our recommendation and, as a result, it is now closed as implemented.
|
| Department of Homeland Security |
Priority Rec.
In order to improve transparency and allow for more informed decision making by congressional leaders and DHS and GSA decision-makers, before requesting additional funding for the DHS headquarters consolidation project, the Secretary of Homeland Security and the Administrator of the General Services Administration should work jointly to conduct the following assessments and use the results to inform updated DHS headquarters consolidation plans: (1) a comprehensive needs assessment and gap analysis of current and needed capabilities that take into consideration changing conditions, and (2) an alternatives analysis that identifies the costs and benefits of leasing and construction alternatives for the remainder of the project and prioritizes options to account for funding instability. |
The Department of Homeland Security Headquarters Consolidation Accountability Act of 2015 (Pub. L. No. 114-150), enacted on April 29, 2016, mirrors GAO recommendations in this area. Among other things, the act requires DHS, in coordination with GSA, to submit information to Congress about DHS's headquarters consolidation efforts not later than 120 days of enactment. Required information includes a comprehensive assessment of property and facilities utilized by DHS in the National Capital Region, and an analysis that identifies the costs and benefits of leasing and construction alternatives for the remainder of the consolidation project. In March 2022, DHS-with input from GSA-submitted its report to congressional committees in response to the Act. The report outlines DHS's National Capital Region Real Property Strategy, including construction at DHS's headquarters campus at St. Elizabeths and leased facilities. To inform this strategy and report, GSA estimated and compared costs for leasing and construction alternatives for DHS facilities to meet current and needed capabilities in the National Capital Region. DHS also provided us with information about its needs assessment that informed GSA's analyses and DHS's report to congressional committees. The agencies have prioritized remaining construction projects to be implemented as funding becomes available. By using the information from the needs assessment and analysis of costs and benefits to develop DHS's National Capital Region Real Property Strategy, the agencies are better positioned to demonstrate the justification for the remaining planned construction for the DHS headquarters consolidation project.
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| General Services Administration |
Priority Rec.
In order to improve transparency and allow for more informed decision making by congressional leaders and DHS and GSA decision-makers, before requesting additional funding for the DHS headquarters consolidation project, the Secretary of Homeland Security and the Administrator of the General Services Administration should work jointly to conduct the following assessments and use the results to inform updated DHS headquarters consolidation plans: (1) a comprehensive needs assessment and gap analysis of current and needed capabilities that take into consideration changing conditions, and (2) an alternatives analysis that identifies the costs and benefits of leasing and construction alternatives for the remainder of the project and prioritizes options to account for funding instability. |
The Department of Homeland Security Headquarters Consolidation Accountability Act of 2015 (Pub. L. No. 114-150), enacted on April 29, 2016, mirrors GAO recommendations in this area. Among other things, the act requires DHS, in coordination with GSA, to submit information to Congress about DHS's headquarters consolidation efforts not later than 120 days of enactment. Required information includes a comprehensive assessment of property and facilities utilized by DHS in the National Capital Region, and an analysis that identifies the costs and benefits of leasing and construction alternatives for the remainder of the consolidation project. In March 2022, DHS-with input from GSA-submitted its report to congressional committees in response to the Act. The report outlines DHS's National Capital Region Real Property Strategy, including construction at DHS's headquarters campus at St. Elizabeths and leased facilities. To inform this strategy and report, GSA estimated and compared costs for leasing and construction alternatives for DHS facilities to meet current and needed capabilities in the National Capital Region. DHS also provided us with information about its needs assessment that informed GSA's analyses and DHS's report to congressional committees. The agencies have prioritized remaining construction projects to be implemented as funding becomes available. By using the information from the needs assessment and analysis of costs and benefits to develop DHS's National Capital Region Real Property Strategy, the agencies are better positioned to demonstrate the justification for the remaining planned construction for the DHS headquarters consolidation project.
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| Department of Homeland Security |
Priority Rec.
In order to improve transparency and allow for more informed decision making by congressional leaders and DHS and GSA decision-makers, before requesting additional funding for the DHS headquarters consolidation project, after revising the DHS headquarters consolidation plans, the Secretary of Homeland Security and the Administrator of the General Services Administration should work jointly to develop revised cost and schedule estimates for the remaining portions of the consolidation project that conform to GSA guidance and leading practices for cost and schedule estimation, including an independent evaluation of the estimates. |
The Department of Homeland Security Headquarters Consolidation Accountability Act of 2015 (Pub. L. No. 114-150) was enacted on April 29, 2016. Among other things, the act requires DHS, in coordination with GSA, to submit information to Congress about DHS headquarters consolidation efforts not later than 120 days of enactment. Required information includes a comprehensive assessment of property and facilities utilized by DHS in the National Capital Region, and an analysis that identifies the costs and benefits of leasing and construction alternatives for the remainder of the consolidation project. However, this report did not contain sufficient cost and schedule information for us to perform a comprehensive analysis to assess reliability. In July 2023, GSA provided us with a report from a planning and funding reset for the project, and in December 2023, DHS provided us with updates for its estimates. As of February 2024, we continue to collect documentation from GSA and DHS that supported the updated cost and schedule estimates. Once we obtain all available documentation related to the leading practices for cost and schedule estimation, we will determine the extent to which GSA and DHS have adhered to these leading practices. Continued DHS and GSA attention to following leading practices for capital planning and cost and schedule estimation is critical given the project's multi-billion dollar cost and impact on future departmental operations.
|
| General Services Administration |
Priority Rec.
In order to improve transparency and allow for more informed decision making by congressional leaders and DHS and GSA decision-makers, before requesting additional funding for the DHS headquarters consolidation project, after revising the DHS headquarters consolidation plans, the Secretary of Homeland Security and the Administrator of the General Services Administration should work jointly to develop revised cost and schedule estimates for the remaining portions of the consolidation project that conform to GSA guidance and leading practices for cost and schedule estimation, including an independent evaluation of the estimates. |
The Department of Homeland Security Headquarters Consolidation Accountability Act of 2015 (Pub. L. No. 114-150) was enacted on April 29, 2016. Among other things, the act requires DHS, in coordination with GSA, to submit information to Congress about DHS headquarters consolidation efforts not later than 120 days of enactment. Required information includes a comprehensive assessment of property and facilities utilized by DHS in the National Capital Region, and an analysis that identifies the costs and benefits of leasing and construction alternatives for the remainder of the consolidation project. However, this report did not contain sufficient cost and schedule information for us to perform a comprehensive analysis to assess reliability. In July 2023, GSA provided us with a report from a planning and funding reset for the project, and in December 2023, DHS provided us with updates for its estimates. As of February 2024, we continue to collect documentation from GSA and DHS that supported the updated cost and schedule estimates. Once we obtain all available documentation related to the leading practices for cost and schedule estimation, we will determine the extent to which GSA and DHS have adhered to these leading practices. Continued DHS and GSA attention to following leading practices for capital planning and cost and schedule estimation is critical given the project's multi-billion dollar cost and impact on future departmental operations.
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