Construction started at the campus in 2009. DHS and GSA officials reported that they have taken some  initial actions that could affect consolidation plans, such as adopting  recent workplace standards at the department level and assessing DHS’s  leasing portfolio. These types of actions may facilitate consolidation  planning in a manner consistent with leading practices. However, the  current collection of plans, which DHS and GSA finalized between 2006  and 2009, have not been updated to address these changes and funding  instability that could affect future headquarters needs and capabilities. DHS and GSA have not conducted a comprehensive assessment of  current needs, identified capability gaps, or evaluated and prioritized  alternatives that would help officials adapt consolidation plans to  changing conditions and address funding issues as reflected in leading  practices. According to  DHS and GSA officials, they have begun to work together to consider  changes to the DHS headquarters consolidation plans. However, DHS  and GSA have not announced when new plans will be issued, and it is  unclear if they will fully conform with leading capital decision-making  practices to help plan project implementation. As discussed earlier, from fiscal year  2009—when construction began—through the time of the fiscal year 2014  appropriation, the gap between what DHS and GSA requested and what  was received was over $1.6 billion. According to DHS and GSA officials,  this funding gap has created cost escalations of over $1 billion and  schedule delays of 10 years, relative to their original estimates. For example:
Keep the current estimated number of staff (14,000) with a reduced  square footage (3.7 million). We compared the 2013 cost estimate and the 2008 and 2013 schedule  estimates with leading practices for developing such estimates and found  that the estimates do not or only minimally or partially conform with key  characteristics for developing reliable estimates. Specifically,  our comparison showed that the project cost estimate:
Does not include a life-cycle cost analysis. We  found that the estimate was updated based on available funding, but  was not regularly updated to reflect significant changes to the  program including actual costs. Does not include an independent cost estimate. Do not include a complete schedule baseline document. Because DHS and GSA  project cost and schedule estimates inform Congress’s funding decisions  and affect the agencies’ abilities to effectively allocate resources across  competing projects in their capital programs, there is a risk that funding  decisions and resource allocations could be made based on information  that is not reliable. Recommendations for Executive Action

In order to improve transparency and allow for more informed decision  making by congressional leaders and DHS and GSA decision-makers, we  recommend that, before requesting additional funding for the DHS  headquarters consolidation project, the Secretary of Homeland Security  and the Administrator of the General Services Administration work jointly  to take the following two actions:  conduct the following assessments and use the results to inform  updated DHS headquarters consolidation plans: a comprehensive needs assessment and gap analysis of current  and needed capabilities that take into consideration changing  conditions, and 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. Matter for Congressional Consideration

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 NCR,  and (3) develops and provides reliable cost and schedule estimates. Appendix I: Objectives, Scope, and Methodology

We conducted our review to examine (1) the extent to which the  Department of Homeland Security (DHS) and the General Services  Administration (GSA) developed DHS headquarters consolidation plans in  accordance with leading capital decision-making principles, and (2) the  extent to which DHS and GSA have estimated the costs and schedules of  the DHS headquarters consolidation project at St. Elizabeths in a manner  that is consistent with leading practices. To determine the extent to which DHS and GSA developed DHS  headquarters consolidation plans in accordance with leading capital  decision-making principles, we reviewed and analyzed DHS and GSA  capital planning documents and interviewed DHS and GSA officials  responsible for the planning and management of the St. Elizabeths  project, as well as DHS and GSA senior leadership. To determine the extent to which DHS and GSA have estimated the costs  and schedules of the DHS headquarters consolidation project at St.  Elizabeths in a manner that is consistent with leading practices, we  interviewed DHS and GSA program officials and compared DHS and  GSA overall project cost and schedule estimates with GAO leading  practices. The 2008  schedule estimate listed project completion in 2016.
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.

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.

What GAO Recommends

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.