GAO blasts department and GSA for lapsed schedule and cost overruns.
Congress should consider making future funding for the Homeland Security Department’s consolidation at St. Elizabeths hospital contingent on two agencies developing a more precise tenant plan that “conforms with leading practices” and recognizes how the workplace has changed in recent years, auditors said on Friday.
A Government Accountability Office report unveiled at a House hearing took Homeland Security and the General Services Administration to task for adding $1 billion to the cost of uniting some 50 scattered DHS components on one campus in Washington’s Southeast quadrant while extending the project’s time frame by 10 years.
The DHS consolidation effort, begun in 2006 to achieve efficiency and streamline coordination among the department’s leaders, moved Coast Guard headquarters to the mental hospital site in August 2013. But the original cost estimate of $3.4 billion has grown to $4.5 billion, and the projected completion date delayed from 2016 to 2026.
The GAO report is “a monument to mismanagement,” said House Homeland Security Subcommittee Chairman Jeff Duncan, R-S.C. “It’s been three years since construction began with some funds from the 2009 Stimulus Act in classic big-government style to lift us out of the recession,” he said. “What we got were cushy offices for Washington bureaucrats, courtyards with Brazilian ivywood, a living roof and rainwater-flush toilets—driven by a political agenda. We could have used normal plumbing.”
Duncan excoriated GSA’s plan for the Coast Guard facility as “not being worth the paper it’s written on,” saying the new building lacks promised access roads and transport facilities.
Asserting that a “generalized milestone schedule is what leads to cost overruns.” Duncan lamented other examples of Homeland Security Department overspending in the throes of an $18 trillion U.S. debt. “Given our deficit spending,” he said, “at what time do we drop back and punt?”
Duncan’s critique was largely shared by ranking member Rep. Ron Barber, D-Ariz., who faulted GSA and DHS for not considering alternative plans and DHS for not considering the project a major expenditure that would merit rigorous oversight. Both lawmakers back a bill for larger acquisition reform at DHS. Barber noted, however, that Congress in 2007 appropriated only a $6 million out of the $360 million President George W. Bush requested for Homeland Security consolidation.
The agency representatives defended the project as a relative success given the uncertainties of fluctuating congressional funding. Chris Cummiskey, acting undersecretary for management at Homeland Security, said the new Coast Guard headquarters will “will save money and foster greater unity of effort. We have projects across our portfolio that are troubled, but I don’t’ see this as one of them.”
The reason DHS doesn’t classify the project as “major” is that the bulk of funding goes to GSA, Cummiskey said. “When we receive consistent funding for phases two and three—the central building complex—we can deliver on time.”
Taxpayers will save, he added, because 60 percent of his department’s National Capital Region leases expire between fiscal 2016 and 2020, saving $700 million over 30 years.
Cummiskey agreed, however, with GAO’s recommendations for improved planning to factor in changes in work styles, such as telecommuting, saying his team works regularly with the congressional watchdog agency.
Norman Dong, commissioner of GSA’s Public Buildings Service, said the “St. Elizabeths project is a critical element of GSA’s overall consolidation plan that would shift 50 leases across the National Capital Region.” The new campus will “host more people in less space, creating 14,000 seats, plus more through telework and desk sharing,” he said.
“We delivered phase one on time and on budget,” Dong said, but he noted piecemeal funding has created problems as construction labor costs rose and workers had to demobilize and remobilize equipment. “Uncertainty makes it difficult scope out the full project on a specific schedule,” he added. Pulling the plug with only the Coast Guard in place would require $132 million a year in maintenance, he said.
President Obama’s fiscal 2015 budget seeks $250 million for the center building complex, and a contract will be awarded by the end of September, Dong said. GSA is seeking to identify other funding, such as proceeds from selling off the Cotton Annex at Federal Triangle.
David Maurer, GAO’s director of homeland security and justice issues, said GSA and DHS’ work has improved over the past seven years, but they have “missed an opportunity” by not seeing the need for more comprehensive cost analysis and violated their own rules on counting operating costs in with construction expenses. “The agencies were frozen in 2006 to 2009,” he said, while Congress in the meantime appropriated $1.6 billion less than expected for the project and work-world habits changed. “They must up their game.”
GAO takes no position on the policy question of whether to cancel the consolidation, Maurer said, “but Congress needs a clearer road map on St. Elizabeths.”
District of Columbia Democratic Delegate Eleanor Holmes Norton, sitting in with special permission, said the fact that current leases costing $5.2 billion over 30 years would be canceled under the long-term plan, meaning that “finishing the project would virtually pay for itself.”
But, Duncan said, “Congress doesn’t have the money to fund it, and we’re still in a recession.”
Those who would continue the St. Elizabeths project were given a boost by the release on Friday of a report on the project by the Senate Homeland Security and Governmental Affairs Committee. It draws from interviews with the department’s top officials—including former secretaries Tom Ridge, Michael Chertoff and Janet Napolitano—agency documents and independent analysis, according to committee Chairman Tom Carper, D-Del.
He cited advantages to consolidation, such as improving crisis management, improving morale and productivity, and creating travel and management efficiencies. “Completing a consolidated headquarters for the department will not only save nearly a billion taxpayer dollars, it will help our nation better prevent and respond to terrorist attacks and other disasters,” Carper said in a statement. “Given its importance, the St. Elizabeths DHS consolidation project should remain a funding priority, and Congress and the administration should come together on a plan to move forward with the project.”
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