St. Elizabeths' Homeland Security Project Misses Mark by $1.6B

WASHINGTON, DC—Federal mismanagement of the St. Elizabeths' campus construction project has resulted in a $1.6 billion increase in costs, from $3.3 billion to the current estimate of $4.5 billion and delayed its delivery by over 10 years, from an original completion date of 2015 to the current estimate of 2026, according to a report released on Friday by the Government Accountability Office.

The project is the new headquarters for the Department of Homeland Security, and is meant to consolidate the agency's operations at one location rather than the multiple locations throughout the city that it currently maintains.

The GAO found that the planning by the Department of Homeland Security and General Services Administration for the headquarters consolidation "does not fully conform with leading capital decision-making practices intended to help agencies effectively plan and procure assets."

For example, the report noted that after its initial planning for the project department decided to reduce further the square footage allotted per employee. The department and GSA also analyzed different leasing options that could affect consolidation efforts.

However, GAO found that the consolidation plans, which were finalized between 2006 and 2009, were not updated to reflect these changes, which was a major factor behind the funding gap and delay in delivery. Homeland Security and GSA have also not conducted a current needs assessment, identified capability gaps, or evaluated and prioritized alternatives to address the gap in funding, GAO also said.

Another misstep GAO found was that 2013 cost estimate—the most recent available—does not include a life-cycle cost analysis of the project and was not regularly updated to reflect significant program changes.

That estimate also does not include an independent analysis to help track the budget; nor was a sensitivity analysis performed to assess the reasonableness of the cost estimate. "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is a risk that funding decisions and resource allocations could be made based on information that is not reliable or is out of date."

Homeland Security and GSA are considering changes to the plans for the project, "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," the report said.