However, from fiscal year 2009—when construction  began—through the time of the fiscal year 2014 appropriation, the gap  between requested and received funding was over $1.6 billion. According  to DHS and GSA officials, this gap created cost escalations of over $1  billion and schedule delays of over 10 years. DHS and GSA Consolidation Plans Did Not Fully Conform with Leading Capital Decision- Making Practices

In our September 2014 report, we found that DHS and GSA planning for  the DHS headquarters consolidation did not fully conform with leading  capital decision-making practices intended to help agencies effectively  plan and procure assets. Specifically, we found that DHS and GSA had  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. DHS and GSA officials  reported that they had taken some initial actions that may facilitate  consolidation planning in a manner consistent with leading practices. For  example, DHS has an overall goal of reducing the square footage allotted  per employee across the department in accordance with current  workplace standards, such as standards for telework and hoteling.and GSA officials acknowledged that new workplace standards could  create a number of new development options to consider, as the new  standards would allow for more staff to occupy the current space at St.  Elizabeths than previously anticipated. DHS and GSA officials also  reported analyzing different leasing options that could affect consolidation  efforts. However, we found that the consolidation plans, which were  finalized between 2006 and 2009, had not been updated to reflect these  actions. For example, we found that the  2013 cost estimate—the most recent available—did not include (1) a life- cycle cost analysis of the project, including the cost of repair, operations,  and maintenance; (2) was not regularly updated to reflect significant  changes to the program including actual costs; and (3) did not include an  independent estimate to assist in tracking the budget. In addition, a  sensitivity analysis had not been performed to assess the reasonableness  of the cost estimate. Schedule Estimates

In addition, we found that the 2008 and 2013 schedule estimates did not  include all activities for both the government and its contractors  necessary to accomplish the project’s objectives and did not include  schedule baseline documents to help measure performance as reflected  in leading practices and GSA guidance. For the 2008 schedule estimate,  we also found that resources (such as labor, materials, and equipment)  were not accounted for and a risk assessment had not been conducted to  predict a level of confidence in the project’s completion date. As a result, in our September 2014 report, we recommended  that, after revising the DHS headquarters consolidation plans, DHS and  GSA 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.
Why GAO Did This Study

This testimony summarizes the information contained in GAO's September 2014 report, entitled: Federal Real Property: DHS and GSA Need to Strengthen the Management of DHS Headquarters Consolidation ( GAO-14-648 ).

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.