Rather than being as a completely new entity, the department was established by assembling existing parts of 22 different federal agencies and departments into a new framework. In 2004, the Coast Guard (one of the larger components of the newly minted DHS) began to explore how to meet its needs for new headquarters facilities. This need would be used to help advocate for the consolidated headquarters project in future years. Since that year, Administrations of both parties have requested funding for this initiative to support a coordinated construction plan. However, this project has not received consistent funding—over 70% of the funding it has received so far came in FY2009 when a surge of supplemental funding combined with the regular appropriations for GSA and DHS provided almost $1.1 billion for the project. On September 23, 2011, the House Committee Transportation and Infrastructure's Subcommittee on Coast Guard and Maritime Transportation held a hearing to review the status of the DHS headquarters consolidation project, focusing on the move of the Coast Guard to St. Elizabeths, and the effect it would have on the Coast Guard's budget and operations. In January 2014, the majority staff of the House Committee on Homeland Security released "Reality Check Needed: Rising Costs and Delays in Construction of New DHS Headquarters at St. Elizabeths," a report that expressed concerns about the continuation of the project as envisioned given budgetary constraints, noting in the summary:
The Committee recognizes the Department of Homeland Security's (DHS) need to consolidate activities to increase the Department's efficiency and improve its operations and coordination. National Operations Center

Currently, DHS operates a National Operations Center (NOC) at the Nebraska Avenue Complex. Both have been the targets of terrorist attacks. Delays in the completion of new space requires these offices to use more short-term leases, which are more expensive, and thus raise the department's overhead costs. The following four examples of possible ways forward are discussed below:
Going No Further —consolidating the Coast Guard headquarters on the St. Elizabeths campus, but not proceeding with the rest of the project; Going Further, with DHS as Sole West Campus Tenant —Proceeding with the next phase of the project as envisioned; Going Further, with DHS Sharing the West Campus —downscoping the projected DHS presence at St. Elizabeths, but developing the rest of the secure campus for use by other federal partners; Going Further, and Expediting C ompletion —going beyond the existing funding baseline and taking steps to accelerate full consolidation. This option would seem to provide the maximum operational return, providing the infrastructure requested by DHS in its plans for a consolidated headquarters, establishing the departmental operations center, and shortening the time frame between its stand-up and the move of additional component headquarters functions to the campus. As such, if seen to completion, pursuing this option could help reduce barriers to information flow, support coordinated planning, and promote the development of a "One DHS" culture. It is worth noting that making a decision to proceed or not with DHS headquarters consolidation on the West Campus St. Elizabeths will not make certain costs vanish. Whatever course Congress chooses to follow, costs will be rebalanced between a number of types of expenses: construction and move costs for a consolidated headquarters; continued rents for leases across the National Capital Region for maintaining existing headquarters facilities; or the possible (and more difficult to quantify) security, management, communications, logistics, and command and control impacts presented by both the status quo or any proposed change. The need for the continuing missions of the DHS components, the existence of DHS as an entity, and the realities of putting St. Elizabeths back to productive use drive these costs—even an optimally efficient mix of these investments will still result in significant costs to the federal government. Already, based on the delay in finalizing the 2011 bill and the reduced resources provided in that bill for DHS headquarters construction activities, the cost of the headquarters project has grown by $200 million, from a total cost of $3.4 billion to $3.6 billion.
The Department of Homeland Security (DHS) was established in early 2003, bringing together existing parts of 22 different federal agencies and departments in a new framework of operations. In its first few years, the department was reorganized multiple times, and more focus was given to ensuring its components were addressing the perceived threats facing the country rather than to addressing the new organization's management structure and headquarters needs. Therefore, the consolidation of physical infrastructure that one might expect in creating an operation of such size and breadth did not occur at that time.
As the Coast Guard began to plan consolidating its leases on headquarters facilities into secure federally owned space, DHS was finding its original headquarters space at the Nebraska Avenue Complex too limited to meet its evolving needs. In 2006, the George W. Bush Administration proposed combining the two projects into one $3.45 billion headquarters consolidation project on the West Campus of St. Elizabeths Hospital in Anacostia.
Since that year, Administrations of both parties have requested funding for this initiative. Thus far, the project has received $495 million from DHS and $1,063 million from the General Services Administration (GSA), for a total of $1,558 million through FY2014. Most of these resources have been allocated to the construction of a new consolidated headquarters for the Coast Guard on the campus, which opened on June 29, 2013.
However, this project has not received sustained funding from Congress—70% of the funding it has received so far came in FY2009 when a surge of supplemental funding combined with the regular appropriations for GSA and DHS provided $1.1 billion for the project. With the completion of its first key component, and the release of a new cost estimate reflecting a less aggressive construction plan, the debate over this project enters a new phase.
The purpose of this report is to outline the policy considerations to be evaluated in deciding whether to continue funding the consolidation of the remaining DHS headquarters functions at St. Elizabeths, and to explore some of the benefits and consequences of several possible ways forward.
The fate of this initiative could have significant impact on the department operationally, budgetarily, and culturally. Operationally, a consolidated headquarters could enhance management efficiency, provide a more capable departmental operations center to help coordinate the federal response to natural disasters and terrorist attacks, and provide a higher level of security for many DHS headquarters functions. Budgetarily, the department would benefit from reduced overhead costs in the long term, but would face significant pressure on its near term budget to see the construction through to completion. Culturally, the new headquarters could help promote the integration of the department's components into "One DHS," and have some direct and indirect contributions to improving departmental morale.
This report examines four potential ways forward for the headquarters project: Going no further than the Coast Guard headquarters phase; reducing the future DHS presence on the campus and sharing the site with other government agencies; proceeding with the project as outlined in the June 2013 baseline; and aggressively funding the project to accelerate completion.
Making a decision to proceed or not with DHS headquarters consolidation on the West Campus St. Elizabeths will not make certain costs vanish. Whatever course Congress chooses to follow, costs will be rebalanced between a number of types of expenses: construction costs, ongoing lease expenses, the costs of maintaining and restoring the West Campus of St. Elizabeths, and operational and management tradeoffs that are difficult to quantify. The need for the continuing missions of the DHS components, the existence of DHS as an entity, and the realities of putting St. Elizabeths back to productive use drive these costs—even an optimally efficient mix of these investments will still result in significant costs to the federal government.