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Tuesday, October 2, 2012

DHS Headquarters Consolidation Project: Issues for Congress

William L. Painter
Analyst in Emergency Management and Homeland Security Policy

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.

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. However, this project has not received sustained funding from Congress—over 80% of the funding it has received so far came in FY2009 when a surge of supplemental funding combined with the regular appropriations for the General Services Administration (GSA) and DHS provided almost $1.1 billion for the project. With the completion of its first key component (a new headquarters for the Coast Guard), this project faces an important turning point as budget pressures are impacting potential capital projects across the government and the Administration is developing a new construction plan and cost estimate for DHS headquarters in response.

The purpose of this report is to outline the policy considerations to be evaluated in deciding whether to continue funding the consolidated DHS headquarters 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, the consolidated headquarters would provide a higher level of security for many DHS headquarters functions, and would provide a more capable departmental operations center to help coordinate the federal response to natural disasters and terrorist attacks. 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.

The report looks at five potential ways forward for the headquarters project: immediate termination of it and disposal of the site; moving the Coast Guard in but going no further; moving the Coast Guard in and proceeding with developing the departmental operations center complex and top management offices; rescoping the Coast Guard building as a smaller headquarters for the department overall; and aggressively funding the project to accelerate completion.

Whatever decision is made—even an option to not make a decision on the long-term fate of the project—will bear significant costs, manifested as a combination of up-front construction costs, ongoing lease expenses, and operational and management tradeoffs that are difficult to quantify.

Date of Report: September 21, 2012
Number of Pages: 31
Order Number: R42753
Price: $29.95

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