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Delays to DHS headquarters add $500M

Dec. 4, 2011 - 06:00AM   |  
By ANDY MEDICI   |   Comments
The 11-story Coast Guard building cascades down a hillside, with some stories partially underground.
The 11-story Coast Guard building cascades down a hillside, with some stories partially underground. (Colin Kelly / Staff)

Budget cuts are causing years' worth of delays and driving up the cost of the Department of Homeland Security's headquarters consolidation project by at least a half-billion dollars, according to department estimates obtained by Federal Times.

The initial plan called for $3.45 billion to consolidate DHS operations on the site of the former St. Elizabeths Hospital in Washington, D.C., by the end of fiscal 2016.

But now the same project will cost at least $3.96 billion and take until the end of fiscal 2021 to complete delaying the relocation of more than 10,000 federal workers by up to five years, according to the estimates, which were obtained through a Freedom of Information Act request.

DHS and the General Services Administration, which manages the project's construction, requested $668 million for the consolidation in fiscal 2011 but got $77 million 12 percent of the request.

For 2012, the agencies requested $376 million. The House legislation provides no money for the project; legislation produced by the Senate Appropriations Committee would provide $56 million.

DHS has relied mostly on $200 million in funding from the American Reinvestment and Recovery Act, as well as funds from the 2009 budget, to complete the Coast Guard headquarters by spring of 2013 the only part of the project that appears on track to wrap up on time.

As the costs of the consolidation continue to mount, the future of the effort is increasingly in doubt.

Rep. Robert Aderholt, R-Ala., chairman of the House Appropriations subcommittee on Homeland Security, said in a statement that there are greater priorities that need funding.

He said he chose to fund front-line operations and disaster relief over providing additional money for the consolidation.

"Moving forward, re-evaluating funding for the project is certainly not off the table, but uncertainty about cost constraints and a growing price tag are of great concern and need to be carefully considered before providing any additional funding for St. Elizabeths," Aderholt said.

He said the money Congress provided in fiscal 2011 is enough to complete the new Coast Guard headquarters.

If Congress does not approve any money for the project in fiscal 2012, it will delay the move-in of all other DHS components such as the Federal Emergency Management Agency, Immigration and Customs Enforcement, and Secret Service from two to three years or more, according to the DHS estimate.

DHS is committed to completing the project and the Coast Guard headquarters is its highest priority, according to DHS spokesman Larry Orluskie.

Orluskie said the agency will focus on building its joint operation center next which will allow the agency to maximize its remaining funds in the most effective way possible.

The Office of Management and Budget which approves agency budgets said it is aware of the estimated cost increases but would not comment on how it would respond.

"The administration is currently developing the FY 2013 budget and is not prepared to address future funding requests at this time," OMB spokeswoman Moira Mack said in a statement.

Coast Guard Vice Adm. John Currier said at a September hearing that the Coast Guard had no reluctance to be the first agency to move to St. Elizabeths.

"We are not wavering at all in our commitment to move," Currier said.

But the Coast Guard will be the only agency on that campus for at least two years, according to the DHS estimate.

Rep. David Price, D-N.C., the ranking member of the House Appropriations subcommittee on Homeland Security said the best-case scenario for fiscal 2012 is that Congress will provide enough funds to complete the Coast Guard's move to the new headquarters on time.

He said he doesn't expect the budget situation to get better in fiscal 2013 meaning delays will continue to mount and the project cost will continue to increase.

Price said the consolidation of DHS into one location is critical for a department responsible for so many missions.

Price said he supports fully funding the project and has fought against efforts to "cannibalize" the budget for the consolidation effort.

"The department will not function at full capacity until we have a better space where coordination and cooperation will be facilitated," Price said.

He blamed Republicans for trying to cut too much money from agency budgets instead of drawing in more revenue from taxes.

"It's ‘pay me now' or ‘pay me later,' and if we pay later, we are going to pay more," Price said.

Budget cuts will make it likely that GSA will split the consolidation project into smaller phases, according to GSA spokesman Adam Elkington.

But the longer a construction project is drawn out, the more it will cost, according to Marco Giamberardino, senior director of the federal and heavy construction division of the Associated General Contractors of America.

The cost of materials and labor will continue to increase, and potential savings from working on multiple parts of a project at once will evaporate, he said.

"It will cost the American government and taxpayers much more money," Giamberardino said, adding that he supports the goals of the project and that it should be funded and completed in a timely manner.

But it's not just construction costs that will increase as the project is delayed.

The headquarters project was supposed to help the agency combine 180 leases into fewer than 12 but many of those leases will have to be renewed if moves to the new site are delayed.

Federal Times' review of leasing data reveals that FEMA has several leases valued at more than $6 million annually that expire within the next few years all leases it would have to renew.

Construction of the new FEMA headquarters will not begin until fiscal 2015, according to the estimates.

And although short-term leases would cost more money, longer-term leases would tie an agency's hands if it had to move, said Elaine Duke, a former DHS undersecretary for management.

DHS and GSA would also have to pay the maintenance and upkeep costs of an empty campus if the project is delayed.

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