    Federal Real Property: DHS Has Made Progress, but Additional
    Actions Are Needed to Address Real Property Management and
    Security Challenges (22-JUN-07, GAO-07-658).

    The Department of Homeland Security (DHS) has a large, diverse
    portfolio of property it uses to carry out its mission. GAO's
    objectives were to (1) describe DHS's real property portfolio;
    (2) determine what challenges, if any, DHS faces in managing real
    property and what actions it has taken in response to the
    administration's real property initiative; (3) determine what
    challenges DHS and the General Services Administration (GSA) face
    in consolidating DHS's Washington, D.C. headquarters; and (4)
    describe actions DHS has taken to help ensure the security of its
    facilities. GAO reviewed documents and interviewed officials from
    DHS, GSA, and other stakeholders, including the National Capital
    Planning Commission (NCPC) and the District of Columbia (D.C.).
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-07-658
        ACCNO:   A71328
      TITLE:     Federal Real Property: DHS Has Made Progress, but
    Additional Actions Are Needed to Address Real Property Management
    and Security Challenges
         DATE:   06/22/2007
      SUBJECT:   Cost analysis
    	     Facility management
    	     Facility security
    	     Federal property
    	     Federal property management
    	     Homeland security
    	     Physical security
    	     Real property
    	     Strategic planning

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    GAO-07-658

         * [1]Results in Brief
         * [2]Background
         * [3]DHS Has a Large and Diverse Real Property Portfolio

              * [4]U.S. Coast Guard Has the Majority of DHS Property
              * [5]Types and Locations of DHS Property

         * [6]DHS Faces Several Challenges Managing Real Property but Has

              * [7]DHS Faces the Challenge of Integrating the Real Property Man
              * [8]Percentage of Underutilized Property Is Higher for DHS than
              * [9]DHS Real Property Data Are Improving, but Some Components St
              * [10]DHS Officials Believe That Better Tools Would Help Address L
              * [11]Capital Planning Functions across DHS Are Relatively New
              * [12]DHS Is Making Progress Meeting the Requirements of the Admin
              * [13]OMB Has Upgraded DHS's Real Property Management Score

         * [14]DHS Headquarters Consolidation Faces Challenges Related to I

              * [15]Consolidation at St. Elizabeths Could Cost over $3.26 Billio
              * [16]Key Stakeholders Are Concerned about Historic Preservation,
              * [17]Master Plan Is Critical to the Consolidation's Outcome

         * [18]DHS Has Taken Actions Intended to Improve the Security of It

              * [19]DHS Has Taken Actions to Improve Communication among Compone
              * [20]DHS Has Not Yet Fully Implemented Risk Management Practices
              * [21]DHS Has an Incomplete Set of Facility Protection Performance
              * [22]FPS Faces Ongoing Challenges
              * [23]DHS Has Not Developed a Physical Security Plan As Required u

         * [24]Conclusions
         * [25]Recommendations for Executive Action
         * [26]Agency Comments and Our Evaluation
         * [27]Evaluation of DHS and GSA Comments
         * [28]Evaluation of the D.C. Office of Planning Comments
         * [29]Evaluation of NCPC Comments
         * [30]Evaluation of the Advisory Council on Historic Preservation
         * [31]Evaluation of U. S. Commission of Fine Arts Comments
         * [32]GAO Comments
         * [33]GAO Comments
         * [34]GAO Contact
         * [35]Acknowledgments
         * [36]GAO's Mission
         * [37]Obtaining Copies of GAO Reports and Testimony

              * [38]Order by Mail or Phone

         * [39]To Report Fraud, Waste, and Abuse in Federal Programs
         * [40]Congressional Relations
         * [41]Public Affairs

    Report to the Ranking Member, Committee on Homeland Security and
    Governmental Affairs, U.S. Senate

    United States Government Accountability Office

    GAO

    June 2007

    FEDERAL REAL PROPERTY

    DHS Has Made Progress, but Additional Actions Are Needed to Address Real
    Property Management and Security Challenges

    GAO-07-658

    Contents

    Letter 1

    Results in Brief 3
    Background 6
    DHS Has a Large and Diverse Real Property Portfolio 10
    DHS Faces Several Challenges Managing Real Property but Has Made Progress
    Addressing Them 17
    DHS Headquarters Consolidation Faces Challenges Related to Its Cost and
    Stakeholder Concerns 29
    DHS Has Taken Actions Intended to Improve the Security of Its Facilities,
    but Its Efforts Are Lacking in Certain Key Areas 46
    Conclusions 58
    Recommendations for Executive Action 59
    Agency Comments and Our Evaluation 60
    Evaluation of DHS and GSA Comments 61
    Evaluation of the D.C. Office of Planning Comments 63
    Evaluation of NCPC Comments 63
    Evaluation of the Advisory Council on Historic Preservation Comments 64
    Evaluation of U. S. Commission of Fine Arts Comments 64
    Appendix I Scope and Methodology 66
    Appendix II FRPC Inventory Data Elements and Descriptions 68
    Appendix III Comments from the Department of Homeland Security 71
    GAO comments 76
    Appendix IV Comments from the General Services Administration 77
    GAO Comments 86
    Appendix V Comments from the District of Columbia Office of Planning 89
    Appendix VI Comments from the National Capital Planning Commission 93
    Appendix VII Comments from the Advisory Council on Historic Preservation
    94
    Appendix VIII Comments from the U.S. Commission of Fine Arts 97
    Appendix IX GAO Contact and Staff Acknowledgments 99

    Tables

    Table 1: DHS Real Property Profile by Component 13
    Table 2: DHS's Implementation of OMB's Real Property Initiative 28
    Table 3: DHS Real Property Housing Scenarios for the Washington, D.C.,
    Area 31
    Table 4: Preliminary Estimate of the Cost to Develop the St. Elizabeths
    Site 36

    Figures

    Figure 1: Profile of DHS's Real Property Portfolio 12
    Figure 2: Percentage of Square Footage across DHS Components (Owned and
    Leased) 14
    Figure 3: Building-Usage Types across DHS 15
    Figure 4: DHS Real Property Square Footage by State 16
    Figure 5: DHS's Real Property Organization 26
    Figure 6: The Administration Building on the West Campus of St. Elizabeths
    33
    Figure 7: View from St. Elizabeths West Campus Looking North 33
    Figure 8: GSA's Proposed St. Elizabeths Standard Development Schedule 39

    Abbreviations

    AMP asset management plan
    CAO Chief Administrative Officer
    CIS Citizenship and Immigration Service
    CBP Customs and Border Protection
    DDOT District Department of Transportation
    DO Departmental Offices
    DHS Department of Homeland Security
    FEMA Federal Emergency Management Agency
    FLETC Federal Law Enforcement Training Center
    FPS Federal Protective Service
    FRPC Federal Real Property Council
    GSA General Services Administration
    HSPD-7 Homeland Security Presidential Directive Number 7
    INS Immigration and Naturalization Service
    ICE Immigration and Customs Enforcement
    ISC Interagency Security Committee
    NCPC National Capital Planning Commission
    NEPA National Environmental Policy Act
    NHPA National Historic Preservation Act
    NTHP National Trust for Historic Preservation
    OMB Office of Management and Budget
    RPMC Real Property Management Committee
    S&T Directorate for Science and Technology
    SRPO Senior Real Property Officer
    TAPS The Automated Prospectus System
    TSA Transportation Security Administration
    USSS U.S. Secret Service

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
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    separately.

    United States Government Accountability Office
    Washington, DC 20548

    June 22, 2007

    The Honorable Susan Collins
    Ranking Member
    Committee on Homeland Security and Governmental Affairs
    United States Senate

    Dear Senator Collins:

    The Homeland Security Act of 2002 combined 22 federal agencies
    specializing in various disciplines--such as law enforcement, border
    security, biological research, computer security, and disaster
    mitigation--into the Department of Homeland Security (DHS) to bring a
    central focus to the government's efforts to prevent and respond to
    terrorist threats. DHS is now the third largest federal agency, with an
    estimated 180,000 employees and a budget authority of $42.8 billion for
    fiscal year 2007. Much of DHS is housed in facilities managed by the
    General Services Administration (GSA), including both government-owned
    property and space GSA leases from the private sector. The Federal
    Protective Service (FPS), which is located within DHS, protects GSA
    buildings where DHS is a tenant, while DHS components are responsible for
    protecting federal buildings under DHS's control that FPS does not
    protect.

    We have found over the years that many federal agencies face long-standing
    challenges involving excess and underutilized property, deteriorating
    facilities, unreliable property data, a heavy reliance on costly leasing,
    and facility protection in the post-September 11 environment. These
    findings led to our designation, in January 2003, of real property
    management as a high-risk area.^1 In response to our high-risk
    designation, the administration added a real property initiative to the
    President's Management Agenda; and the President issued Executive Order
    13327, which implements the real property initiative by outlining several
    requirements intended to have agencies accurately account for, maintain,
    and manage their real property assets. As such, in reviewing real property
    management activities at DHS, we addressed the following questions:

    ^1GAO, High Risk Series: An Update, [42]GAO-07-310 (Washington, D.C.: Jan.
    31, 2007).

               1. What is the profile of DHS's real property portfolio?
               2. What challenges, if any, does DHS face in managing its real
               property portfolio and what actions has it taken in response to
               the administration's real property initiative?
               3. What challenges do DHS and GSA face in consolidating DHS's
               headquarters in Washington, D.C.?
               4. What actions has DHS taken to help ensure the physical security
               of the facilities where it is located?

    To answer our first question, we obtained and analyzed DHS and GSA real
    property data. We also interviewed DHS and GSA real property officials and
    a contractor that is helping DHS develop its real property inventory.
    Although we identified challenges that DHS faces with collecting some real
    property data elements, we determined that other data elements--such as
    total number of buildings and structures--that we are presenting later in
    the report were sufficiently reliable for the purposes of our review. To
    answer our second question, we interviewed DHS real property officials
    about challenges and considered the extent to which DHS has implemented
    Executive Order 13327 as the basis for measuring DHS's progress in real
    property management. For the first and second questions, we also
    interviewed Office of Management and Budget (OMB) staff because OMB
    oversees real property management governmentwide. To answer our third
    question, we reviewed and analyzed key documents and interviewed DHS real
    property officials from headquarters and GSA officials responsible for
    assisting DHS with its headquarters consolidation efforts. This included
    reviewing planning documents related to a proposed consolidation of DHS
    headquarters on the West Campus of St. Elizabeths Hospital in the District
    of Columbia. We also interviewed additional stakeholders, including
    officials from the National Capital Planning Commission (NCPC) and the
    District of Columbia Office of Planning. The stakeholders we contacted are
    discussed in more detail in appendix 1. To answer the fourth question, we
    interviewed DHS physical security headquarters officials and security
    officials from DHS's various components. We also interviewed FPS officials
    and GSA officials responsible for security at locations where GSA houses
    DHS. We analyzed pertinent physical security documents and policies from
    DHS and GSA. We conducted our work between March 2006 and April 2007 in
    accordance with generally accepted government auditing standards.

    Results in Brief

    DHS's 10 major organizational components have a large and diverse real
    property portfolio that consists largely of properties where DHS's legacy
    agencies were housed before the department's creation. According to DHS
    and GSA data, this portfolio includes more than 27,000 owned or leased
    buildings and structures, totaling almost 78 million square feet. Property
    in this portfolio generally falls into four categories: (1) federally
    owned property that DHS controls; (2) federally owned property that GSA
    controls and DHS rents from GSA as a tenant agency; (3) property that is
    not federally owned that DHS leases through GSA, which acts as a leasing
    agent for DHS and charges DHS rent to occupy the space; and (4) property
    that is not federally owned that DHS leases directly without GSA
    involvement. About 72 percent of DHS real property is federally owned,
    either controlled by DHS or GSA, while about 28 percent of DHS real
    property is federally leased, either directly from a nonfederal entity by
    DHS or through GSA. These percentages are similar to governmentwide
    percentages for these property categories. Seventy nine percent of federal
    real property is federally owned, while 21 percent is leased or otherwise
    managed. The U.S. Coast Guard (Coast Guard) occupies the bulk of DHS real
    property, accounting for 69 percent of its buildings, 90 percent of its
    structures, such as docks, piers, bridges, monuments, and statues, and
    about 41 percent of its square footage. DHS's real property portfolio
    reflects the diversity of its components' various missions and thus
    includes office buildings, law enforcement training centers, laboratories,
    border control sites, and detention facilities.

    DHS faces challenges in the real property area, but has made progress
    toward addressing them in response to the administration's real property
    management initiative. One major challenge relates to DHS's creation as a
    new federal department that combined 22 existing agencies, which has made
    the development of a cohesive approach to real property management a
    significant undertaking. For example, some components, most notably the
    Coast Guard, arrived intact with stable real property portfolios as well
    as strategies, an organization, and processes for managing assets. Others,
    such as Customs and Border Protection and Immigration and Customs
    Enforcement, were formed from multiple legacy agencies, each with
    different real property portfolios and asset management strategies. Other
    challenges DHS faces--including making better use of underutilized
    property and ensuring data are reliable--are typical of those we have
    found at other agencies in recent years. For example, DHS reported that
    about 9.7 percent of its inventory was underutilized, and DHS has yet to
    fully assess the reliability of its real property data. DHS also faces
    other challenges common to many federal agencies, including various legal
    and budget-related limitations that often do not lead to businesslike
    outcomes and a need for improved capital planning. To address the
    challenges, DHS has clearly benefited from the administration's focus on
    improving real property management across government. On the
    administration's agency scorecard for real property
    management--established in fiscal year 2004 to measure each agency's
    progress in implementing Executive Order 13327--DHS has achieved a
    "yellow" status, which indicates progress in strategically managing real
    property by, for example, designating a senior real property officer and
    developing an OMB-approved asset management plan. However, we found that
    DHS could do more to improve its capital decision-making practices by
    embracing OMB's capital planning principles, such as developing a
    departmentwide capital plan. We are recommending that DHS's Secretary use
    OMB's capital planning principles to link DHS's long-term capital needs
    with the asset management planning activities required under the
    President's real property initiative.

    Consolidating its Washington, D.C., area locations will be challenging for
    DHS because of the costs involved, currently estimated to be at least
    $3.26 billion, and key stakeholders' concerns about the redevelopment of
    the West Campus of St. Elizabeths Hospital, DHS's preferred location. DHS
    believes that by consolidating most of its headquarters operations,
    greater efficiencies would result, its mission would be better integrated,
    and the security of its facilities could be better managed. In the
    Washington, D.C., area, DHS has seven core operating components from 22
    legacy agencies in 53 locations, accounting for approximately 7 million
    square feet of federally owned and leased office space with most leases
    due to expire in the next 10 years. DHS is pursuing St. Elizabeths for its
    consolidation, based on analyses conducted by GSA, and ultimately wants
    4.5 million square feet of space at this location. The St. Elizabeths West
    Campus has 61 buildings on 176 acres and is a National Historic Landmark
    District. As the government's real property disposal agency, GSA gained
    custody and control of the site after it was transferred in December 2004
    from the Department of Health and Human Services. According to GSA and
    DHS, the St. Elizabeths site is able to accommodate DHS's preferred amount
    of development and is advantageous from a security perspective because of
    its security setbacks, the space between a property's perimeter barrier
    and a building's exterior.

    GSA and DHS estimate that the overall consolidation would cost at least
    $3.26 billion if 4.5 million square feet of office space, plus parking, is
    developed at the St. Elizabeths West Campus. Using an analysis prepared by
    GSA, DHS has also testified that a consolidation alternative of 4.5
    million gross square feet would save an estimated $1 billion over 30 years
    in current dollars over an alternative involving renewing leases, although
    a revised GSA analysis--that assumes a lower rental rate for parking space
    than office space--currently estimates cost savings at $743 million.
    However, it is important to note that this cost-savings analysis does not
    (1) use DHS's actual and projected leasing costs for locations where it is
    currently housed; (2) include DHS costs to develop the site, which include
    costs such as tenant building improvements and currently stand at $1.32
    billion, or how those costs would vary depending on the alternative
    chosen; and (3) examine a range of possible alternatives to house DHS and
    their associated costs for the St. Elizabeths site. Additionally, GSA and
    DHS could better support their case for consolidation at St. Elizabeths
    West Campus with a thorough analysis of the savings they expect from
    reducing the costs of physical security investment and hardening at
    downtown leased locations. While GSA's analysis is useful to determine
    whether a construction and leasing alternative is more cost effective, a
    more comprehensive analysis that considers the additional factors above
    would improve transparency and allow for more informed decision making. We
    are recommending that DHS and GSA develop a more comprehensive cost
    analysis to better justify the St. Elizabeths consolidation from the
    perspective of the government, as a whole. In addition to the challenge of
    obtaining funding for a series of projects of this magnitude, DHS and GSA
    face objections from several key stakeholders that are concerned about
    whether the project would comply with current historic preservation and
    environmental laws. These stakeholders generally support federal use and
    development of the property, up to 2.5 million square feet of office
    space, but have concerns about the magnitude of the current alternatives
    under consideration, given the designation of St. Elizabeths as a National
    Historic Landmark District. There is also concern about the project's
    effect on the local community, including the project's traffic impacts and
    the availability of contracting and retail opportunities. However, some
    community leaders have stated that they support locating federal
    development at St. Elizabeths as an economic driver and magnet for
    additional development and revitalization. Critical to the outcome of the
    proposed consolidation is GSA's development of a Master Plan, currently
    scheduled to be released in July 2007 for review and public comment with a
    final Master Plan scheduled to be submitted by December 2007.

    In recent years, DHS has taken actions intended to improve the security of
    its facilities, but its efforts fall short in certain key areas, such as
    fully implementing risk management across its components. Like other
    federal agencies, DHS has made physical security improvements to its
    facilities, such as adding pop-up bollards and installing bullet-resistant
    glass. DHS has also designated a Chief Security Officer for the department
    and established a Chief Security Officer Council to assist the Chief
    Security Officer in evaluating security issues. DHS also plays an
    important role in developing guidance for agencies to follow in protecting
    federal facilities against the threat of terrorism through the Interagency
    Security Committee (ISC), which DHS chairs. However, despite the actions
    DHS has taken and its prominent role in facility protection
    governmentwide, most DHS components have not fully implemented risk
    management for facility protection, which we have recommended and DHS has
    advocated for federal agencies. Risk management is useful for ensuring
    that security resources are directed where they are needed most and yield
    the greatest improvements in facility protection. Furthermore, despite
    DHS's role in developing guidance for federal, state, and local officials
    in performance measurement, no DHS components currently have a fully
    developed set of agency- and facility-specific physical security
    performance measures. And, FPS has not finalized a transformation
    strategy, which we recommended almost 3 years ago, to address several
    challenges FPS faced, including its expanding mission and issues related
    to funding. We also found that DHS has not developed a physical security
    plan, as all executive agencies are required to develop under Homeland
    Security Presidential Directive 7 (HSPD-7). It is critical that DHS lead
    by example in the physical security area, and we are therefore
    recommending that DHS develop a physical security plan that addresses
    DHS's plans to fully implement risk management and develop performance
    measures for facility protection.

    DHS concurred with our recommendations to link DHS's long-term capital
    needs with its asset management planning activities and to develop a
    physical security plan, but it only partially agreed with our
    recommendation to develop a comprehensive cost analysis for the St.
    Elizabeths site. GSA did not concur with our recommendation to develop a
    comprehensive cost analysis for the St. Elizabeths site. We maintain that
    such an analysis would lead to more informed decision making. See
    appendixes III and IV for DHS's and GSA's letters and our comments. DHS's
    and GSA's comments are also discussed at the end of the report. Other
    stakeholders--the D.C. Office of Planning, NCPC, the Advisory Council on
    Historic Preservation, and the U.S. Commission of Fine Arts--provided
    comments and additional information which we have incorporated in this
    report, as appropriate.

    Background

    The Homeland Security Act of 2002 combined 22 federal agencies
    specializing in various disciplines into the Department of Homeland
    Security. DHS is organized into directorates, components and agencies,
    collectively referred to as components. Responsibility for real property
    asset management resides in the [43]Office of the Under Secretary for
    Management , which is also responsible for the DHS's budgets, expenditure
    of funds, accounting and finance, procurement, human resources,
    information technology systems, facilities and equipment, and the
    identification and tracking of performance measurements.

    The 10 major components with real property requirements and portfolios are
    as follows:

               o The [44]Federal Emergency Management Agency (FEM A) prepares the
               nation for hazards, manages federal response and recovery efforts
               following any national incident, and administers the National
               Flood Insurance Program.
               o The [45]Transportation Security Administration  (TSA) protects
               the nation's transportation systems to ensure freedom of movement
               for people and commerce.
               o [46]Customs and Border Protection (CBP) protects the nation's
               borders to prevent terrorists and terrorist weapons from entering
               the United States, while facilitating the flow of legitimate trade
               and travel.
               o [47]Immigration and Customs Enforcement (ICE) the largest
               investigative arm of DHS, identifies and mitigates vulnerabilities
               in the nation's border, economic, transportation, and
               infrastructure security.
               o The [48]Federal Law Enforcement Training Center (FLETC) provides
               career-long training to law enforcement professionals to help them
               fulfill their responsibilities safely and proficiently.
               o [49]Citizenship and Immigration Services (CIS) administers
               immigration and naturalization adjudication functions and
               establishes immigration services policies and priorities.
               o The [50]Directorate for Science and Technology (S&T) is the
               primary research and development arm of DHS. It provides federal,
               state, and local officials with the technology and capabilities to
               protect the homeland.
               o The [51]U.S. Coast Guard (Coast Guard) protects the public, the
               environment, and U.S. economic interests--in the nation's ports
               and waterways, along the coast, on international waters, or in any
               maritime region as required to support national security.
               o The [52]U.S. Secret Service (USSS) protects the President and
               other high-level officials and investigates counterfeiting and
               other financial crimes, including financial institution fraud,
               identity theft, computer fraud, and computer-based attacks on the
               nation's financial, banking, and telecommunications
               infrastructure.
               o Departmental Offices (DO) provide vision, strategic planning,
               organizational structure, policy guidance, and executive
               leadership.

               Since January 2003, we have identified federal real property as a
               high-risk area because of long-standing problems with excess and
               underutilized property, deteriorating facilities, unreliable
               property data, and a heavy reliance on costly leasing. Federal
               agencies were also facing many challenges in protecting their
               facilities against the threat of terrorism. In addition, we found
               that these problems have been exacerbated by competing stakeholder
               interests in real property decisions, various legal and
               budget-related disincentives to businesslike outcomes, and the
               need for better capital planning among agencies.

               DHS must meet key real property management requirements
               established in

               o Executive Order 13327,
               o Federal Real Property Asset Management Initiative (real property
               initiative),
               o Federal Real Property Council guidance, and
               o OMB guidance for the real property initiative.

               In response to our high-risk designation, the President signed
               Executive Order 13327 in February 2004, Federal Real Property
               Asset Management, which directs each executive agency such as DHS
               to (1) appoint a Senior Real Property Officer (SRPO), (2) develop
               and implement an asset management plan, (3) develop and use a real
               property data inventory, and (4) develop and use performance
               measures. The executive order also called for the establishment of
               the interagency Federal Real Property Council (FRPC) to develop
               guidance to implement the executive order, serve as a
               clearinghouse for best practices, and facilitate the efforts of
               the SRPOs. FRPC initially identified and defined 23 data elements
               that must be captured and reported by the 15 largest federal
               landholding agencies, including DHS (see app. II for a description
               of these 23 data elements).^2 Four of the 23 data elements
               established by FRPC are performance measures--utilization,
               condition index, mission dependency, and annual operating and
               maintenance costs. OMB is responsibile for overseeing the
               implementation of these real property requirements through its
               real property initiative, the goal of which is to ensure that
               agencies maintain their property inventories at the right size,
               cost, and condition to support agency missions and objectives.

               The National Capital Planning Act of 1952, as amended, requires
               federal agencies to prepare master plans for proposed development
               using federal funds in consultation with NCPC, which provides
               overall planning guidance for federal land and buildings in the
               Washington, D.C., metropolitan area. A master plan should include
               the present composition of a site and the plan for its orderly and
               comprehensive long-range development, generally over a period of
               20 years. NCPC has determined that a master plan is a required
               preliminary stage of planning prior to agency preparation and
               submission to NCPC of site and building plans for individual
               projects. Master plans are necessary for sites on which more than
               one principal building, structure, or activity is located or is
               proposed to be located. A master plan also serves as the basic
               planning document for intergovernmental coordination on
               developments and projects within a site. GSA is preparing a Master
               Plan for the St. Elizabeths site in conjunction with the
               environmental impact statement that it must prepare for the site
               under the National Environmental Policy Act (NEPA).

               After the 1995 bombing of the Alfred P. Murrah Federal Building in
               Oklahoma City, the Department of Justice created minimum security
               standards for federal facilities. In October 1995, the President
               signed Executive Order 12977, which established ISC. ISC was
               expected to enhance the quality and effectiveness of security in,
               and protection of, facilities in the United States that are
               occupied by federal employees for nonmilitary activities and to
               provide a permanent body to address continuing governmentwide
               security issues for federal facilities. ISC is expected to have
               representation from all the major federal departments and
               agencies, as well as a number of key offices. ISC's specific
               responsibilities under the executive order generally relate to
               three areas: developing policies and standards, ensuring
               compliance and overseeing implementation, and sharing and
               maintaining information.

    ^2In August 2006, FRPC added a 24th data element on disposition of real
    property.

               In November 2004, we identified key practices that collectively
               could provide a framework to guide agencies' facility protection
               efforts, including allocating resources using risk management,
               leveraging security technology, and measuring program performance.
               We also identified obstacles to implementing these key practices,
               including challenges in developing quality data to form the basis
               for risk management, ensuring that technology performs as
               expected, and determining how to measure the impact of various
               facility protection approaches on improving facility protection.
               In July 2004, we identified challenges facing FPS as it moved from
               GSA to DHS.

               Since September 11, 2001, the focus on protecting the nation's
               critical infrastructure has grown considerably. The Homeland
               Security Act of 2002 and other administration policies assigned
               DHS specific duties associated with coordinating the nation's
               efforts to protect critical infrastructure, and HSPD-7 stated that
               Secretary of Homeland Security was responsible for coordinating
               the overall national effort to identify, prioritize, and protect
               critical infrastructure and key resources. Under the Homeland
               Security Act of 2002, the FPS was transferred from GSA to DHS and,
               as a result of this transfer, DHS assumed responsibility for
               coordinating ISC in March 2003.

    			  DHS Has a Large and Diverse Real Property Portfolio

               DHS's 10 major organizational components have a large and diverse
               real property portfolio that largely consists of the property
               where DHS's legacy agencies were housed before the department's
               creation. According to DHS and GSA data, this portfolio includes
               more than 27,000 owned or leased buildings and structures totaling
               about 78 million square feet, accounting for 2 percent of the
               federal real property portfolio. As shown in figure 1, property in
               this portfolio generally falls into four categories: (1) federally
               owned property that DHS controls; (2) federally owned property
               that GSA controls and leases to DHS as a tenant agency; (3)
               property that is not federally owned that DHS leases through GSA,
               which acts as a leasing agent for DHS and charges DHS rent to
               occupy the space; and (4) property that is not federally owned
               that DHS leases directly without GSA involvement.

               As the federal government's real property manager, GSA provides
               office space for most federal agencies, including DHS, and also
               provides other types of space, such as laboratories and border
               stations. The Federal Buildings Fund, which is administered by
               GSA, is an intergovernmental revolving fund that GSA uses as a
               means to finance the operating and capital costs associated with
               federal space under its control or custody. GSA charges
               agencies--including DHS--rent, and the receipts are deposited into
               this fund. Congress exercises control over the fund through
               appropriations that set annual limits--called obligational
               authority--on how much of the fund can be expended for various
               activities. In fiscal year 2006, DHS paid GSA approximately $828
               million in rent for the lease of federally owned property held by
               GSA and for property leased from a third party through GSA,
               depicted in figure 1 as 16.5 percent and 24.9 percent,
               respectively. Although DHS obtains 42.0 percent of its space
               through GSA (fig. 1) more than one-half of DHS property does not
               involve GSA. This property is either federally owned property held
               directly by DHS or property DHS leased from a third party,
               depicted as 55.2 percent and 3.5 percent, respectively, (fig. 1).
               Overall, the percentages of DHS-occupied space that are federally
               owned versus leased generally fall in line with trends for the
               government, as a whole. About 72 percent of DHS real property is
               federally owned, either controlled by DHS or GSA, while about 28
               percent of DHS real property is federally leased, either directly
               from a nonfederal entity by DHS or indirectly through GSA. By
               comparison, 79 percent of federal property is federally owned,
               while 21 percent is leased or otherwise managed.^3

    ^3Otherwise-managed properties are those owned by a state government or
    foreign government that holds title to the real property, but has granted
    rights for use to a federal government entity in other than a leasehold
    arrangement.

               Figure 1: Profile of DHS's Real Property Portfolio

               U.S. Coast Guard Has the Majority of DHS Property

               At the component level, the Coast Guard occupies the majority of
               DHS real property, accounting for 69 percent of its buildings, 90
               percent of its structures, and about 41 percent of its square
               footage. As shown in table 1 and figure 2, CBP and ICE have the
               second and third highest real property square footage, 19 percent
               and 10 percent, respectively. CBP and ICE also lease the most
               property, about 12 million square feet and 6 million square feet,
               respectively. Fifty-five percent of DHS's square footage is
               federally owned and under the control of DHS, while 41 percent is
               leased through GSA. If Coast Guard real property is excluded from
               the analysis of DHS real property, DHS components lease about 71
               percent of the remaining real property, a higher rate of reliance
               on leases than is found governmentwide. Some components, like ICE
               and CIS, said that they preferred to lease much of their property
               so that they would have the flexibility to move offices to
               wherever immigration populations increase or clusters of activity
               develop. For changing and short-term needs such as these, it may
               make economic sense to lease. However, DHS is trying to reduce its
               reliance on leasing for long-term needs. For example, in January
               2007, CBP purchased the 10 acre Nogales Border Patrol Station in
               Arizona for $5.4 million with 30 months remaining on a $90,000 per
               month lease. This purchase saved CBP $2.7 million in future lease
               payments through 2008 plus the cost of subsequent leases. In
               another example, DHS hopes to consolidate its Washington, D.C.,
               headquarters at the St. Elizabeths site to reduce its reliance on
               leasing in the Washington, D.C., metropolitan area. As we have
               reported, building ownership--rather than ordinary operating
               leases--is often a less expensive way to meet agencies' long-term
               space requirements.^4

    Table 1: DHS Real Property Profile by Component

                         Occupied  Percent            Percent
                   square footage of total             leased             Percent
    Component             (SF)       SF  Leased SF      SF   Owned SF owned SF
    Coast Guard     32,158,182   41.3 %  2,466,826   7.1 %  29,691356   69.1 %
    CBP             15,077,506     19.4 11,764,095    33.7  3,313,411      7.7
    ICE              7,866,571     10.1  6,463,027    18.5  1,403,544      3.3
    FLETC            5,550,505      7.1      4,079     0.0  5,546,426     12.9
    CIS              5,373,280      6.9  5,373,280    15.4          0        0
    FEMA             2,922,833      3.8  1,918,223     5.5  1,004,610      2.3
    USSS             2,459,577      3.2  2,184,049     6.3    275,528      0.6
    TSA              3,397,519      4.4  3,397,519     9.7          0        0
    DO               1,038,313      1.3  1,038,313     3.0          0        0
    S&T                659,701      0.8    101,062     0.3    558,639      1.3
    Other            1,331,850      1.7    146,370     0.4  1,185,480      2.8
    Total           77,835,837      100 34,856,843     100 42,978,994      100

    Source: GAO analysis of DHS and GSA real property data.

    ^4GAO, High Risk Series: Federal Real Property, [53]GAO-03-122
    (Washington, D.C.: January 2003).

    Figure 2: Percentage of Square Footage across DHS Components (Owned and
    Leased)

    Types and Locations of DHS Property

    Not surprisingly, DHS's real property portfolio reflects the diversity of
    its components' various missions and thus includes office buildings, law
    enforcement training centers, laboratories, border control sites, and
    detention facilities. Of over 11,700 buildings in its portfolio, three
    building-usage types were most common: family housing, warehouses, and
    offices (see fig. 3). Family housing, most of which is associated with the
    Coast Guard, is the most common building type, accounting for about 2,900
    buildings or 25 percent of DHS's building inventory. Offices and
    warehouses account for about 2,400 and 2,350 buildings, respectively, or
    21 percent and 20 percent of DHS's building inventory. In terms of square
    footage, offices account for 44 percent of DHS's inventory, while family
    housing and warehouses account for 17 and 6 percent, respectively.
    Examples of other relatively common building usage types include service
    buildings and institutional buildings.^5 By comparison, in 2005, offices
    were the most common building type across the federal government,
    accounting for 20 percent of the federal government's square footage,
    while family housing and warehouses were second and third, accounting for
    18 and 13 percent of the federal government's square footage, respectively
    (fig. 3).

    Figure 3: Building-Usage Types across DHS

    As shown in figure 4, California has the most DHS real property square
    footage. DHS also has a significant presence in Texas, Alaska, Florida,
    Georgia, Virginia, Maryland, the District of Columbia, New York, and
    Massachusetts. This is generally consistent with federal space
    governmentwide, which is concentrated heavily in California, Texas,
    Virginia, Maryland, and Florida.

    ^5Service buildings are used for service activities, such as maintenance
    and repair shops, dry cleaning plants, post exchange stores, airport
    hangars, and buildings primarily used for vehicle maintenance and repair.
    Institutional buildings are used for institutional purposes other than
    schools, hospitals, and prisons, such as libraries, chapels, outpatient
    clinics, dining facilities, and buildings housing entertainment and
    recreational activities.

    Figure 4: DHS Real Property Square Footage by State

    DHS Faces Several Challenges Managing Real Property but Has Made Progress
    Addressing Them

    In addition to the challenge associated with being a new federal
    department, DHS faces other challenges that, in some key areas, are
    typical of those we have found at other agencies in recent years. Since we
    designated federal real property as a high-risk area in 2003, we have
    reported on long-standing problems across several agencies that include
    unneeded and deteriorating property, unreliable real property data, and
    heavy reliance on costly leasing. In addition, deep-rooted obstacles,
    including competing stakeholder interests, legal and budgetary
    limitations, and a need for improved capital planning, continue to hamper
    reform. DHS has taken steps to address the challenges, largely in response
    to the administration's real property initiative.

    DHS Faces the Challenge of Integrating the Real Property Management Activities
    of 22 Legacy Agencies

    DHS faces the major challenge of being a new federal department that
    combined 22 existing agencies, making the development of a cohesive
    approach to real property management a significant undertaking. Some
    components, most notably the Coast Guard, arrived intact with stable real
    property portfolios as well as established strategies, organization, and
    processes for asset management. Others, such as CBP and ICE, were formed
    from multiple legacy agencies, each with distinct real property portfolios
    and asset management strategies that needed to be integrated to function
    as one. Components such as TSA and S&T are relatively new federal
    functions with growing portfolios and newly established real property
    asset management organizations. DHS and OMB officials cited the
    integration of DHS's 22 legacy agencies, whose primary missions are not
    real property management, as one of the biggest challenges facing managers
    of DHS real property. Examples of the challenge of integration at the
    component level include the following:

               o CBP, which was created through the consolidation of Customs, the
               Border Patrol, and the inspective functions of the Immigration and
               Naturalization Service (INS) and of the Agriculture and Plant
               Health Inspection Service into a new parent organization, was
               challenged with inventorying unique types of property (roads,
               walls, and technical infrastructure) within the Border Patrol that
               have not been inventoried in the past. CBP recently completed its
               real property inventory of assets, including its border patrol
               stations.
               o ICE, formed in 2003 by combining the law enforcement arms of INS
               and the former U.S. Customs Service, is facing the challenge of
               increasing its real property staff to do all the needed real
               property work. A senior ICE real property official said that very
               few real property staff transitioned with ICE in 2003, so ICE's
               real property program is behind the programs of most other DHS
               components. This official said that ICE plans to have a complete
               real property staff by the end of fiscal year 2007.
               o CIS, which transitioned into DHS with the service and benefit
               functions of INS, also faces transition challenges. According to
               DHS officials, it did not receive any administrative staff and not
               enough security staff, so CIS had to set up its own management
               processes in these areas and start over.

               DHS officials recognize the significant challenge they face
               developing a cohesive approach to real property management at DHS.
               To address this challenge and respond to the administration's real
               property initiative, DHS created the Chief Administrative Officer
               Council and the DHS Real Property Management Committee (RPMC) in
               fiscal year 2004. Both were established to review and coordinate
               DHS real property issues. The activities and makeup of these
               councils will be discussed later as they relate to DHS's actions
               in response to the real property initiative.

    			  Percentage of Underutilized Property Is Higher for DHS than for
    			  Some Other Large Agencies

               In our update of the high-risk series for real property in 2007,
               we reported that according to DHS, approximately 9.7 percent of
               its inventory is underutilized.^6 DHS reported more combined
               underutilized and excess property than some federal departments
               that we surveyed.^7 For example, some departments, including the
               Department of the Interior, the Department of State, and the
               Department of Veterans Affairs report levels of underutilized or
               excess property at or below 2 percent. Other agencies--including
               the Department of Energy, the National Aeronautics and Space
               Administration, and large real property holding agencies like
               DHS--have similar or higher levels of underutilized property and
               report that over 10 percent of the facilities in their inventories
               were underutilized. Retaining excess and underutilized properties
               is not the best use of federal dollars because properties are
               costly to maintain and results in lost opportunities when they are
               not put to more beneficial uses. In addition, continuing to hold
               real property that may no longer be needed or that could be better
               used does not present a positive image of the federal government
               in local communities.

    ^6GSA Management Regulations define underutilized property as an entire
    property or portion of a property that is used only at irregular periods
    or intermittently by the accountable agency or property that is being used
    for the agency's current program purposes that can be satisfied with only
    a portion of the property. (41 C.F.R. 102-75.50).

    ^7GAO, Federal Real Property: Progress Made Toward Addressing Problems,
    but Underlying Obstacles Continue to Hamper Reform, [54]GAO-07-349
    (Washington, D.C.: Apr. 13, 2007).

               At the time of our review, DHS was developing a Vacant Space
               Report that its components will use to report on their
               underutilized and excess real property. As new space requirements
               arise, they will be evaluated against this Vacant Space Report to
               determine if the new requirement can be accommodated in the
               underutilized or excess space before DHS seeks new space. If no
               suitable candidate can be found for excess real property, the
               disposal process will be initiated. At the moment, a Vacant Space
               Report is being developed for use only for the Washington, D.C.,
               area. Underutilized space is tracked via DHS's Real Property
               Information System. DHS currently follows the Coast Guard's
               policies, procedures, and authorities for real property disposal.
               This is in accordance with established DHS policy to continue
               using legacy authorities, policies, and procedures under
               Management Directive 560. DHS also follows Coast Guard policy
               because the Coast Guard has about 69 percent of the federally
               owned real property in the DHS portfolio.

    			  DHS Real Property Data Are Improving, but Some Components Struggle
    			  to Collect Complete Information on Some Data Elements

               Overall, DHS real property data are mostly complete because DHS
               has compiled an initial set of data on its real property
               consistent with FRPC definitions.^8 DHS components provide data
               for all data elements required under FRPC guidance, although some
               data elements are temporary proxies. Some DHS components, such as
               the Coast Guard and TSA, said that they have a robust real
               property data inventory that they use daily in their decision
               making. For example, a TSA real property official noted that TSA's
               real property database is able to generate daily reports about TSA
               real property needs. DHS as a whole is working toward providing
               evidence to OMB that all its components use an accurate and
               current inventory in their daily management decision making.

               Although DHS components' data are mostly complete, some
               components, such as CBP and ICE, are using data proxies for some
               data elements until these components can develop more robust data
               measures. The condition index, a measure of an asset's condition
               at a particular point in time, is an example of a problematic
               performance measure. A common problem for some components,
               particularly the larger ones that were formed from multiple legacy
               agencies, is finding the resources to fully develop certain data
               elements, so components are developing proxies in the interim. For
               example, as a proxy for a building's condition index--which,
               according to a DHS official, would be expensive to perform--CBP
               hired a consultant to do a mini-assessment of its properties. The
               consultant rated each of CBP's properties on a scale of 1 to 5
               (with 1 being in excellent condition and 5 being unusable.) CBP
               will use these ratings to prioritize decisions about how best to
               maintain its real property assets.

    ^8Although DHS has yet to assess the accuracy and reliability of its real
    property data, we deemed the dataset complete and reliable enough to
    report broadly on its profile.

               CBP and ICE have not developed a true condition index for each of
               their real property holdings because, according to DHS officials,
               these components lack the funding to conduct full facility
               condition assessments. These assessments are important because
               they establish an ongoing process for monitoring facility
               conditions and enable an agency to develop a comprehensive plan
               for facility maintenance and building renewal. Data from the
               assessments enable the agency to prioritize projects for budget
               requests and increase the agency's accountability since the
               assessments enable the agency to show a direct correlation between
               its facility needs and budget plans. Full facility condition
               assessments would also allow DHS to accurately estimate its
               deferred maintenance backlog, which it is currently unable to
               do.^9 DHS officials say there are disparities in how components
               track deferred maintenance across the department and acknowledge
               that this is a problem. DHS said it had to take a sample of
               deferred maintenance in the department to estimate that its
               deferred maintenance costs in fiscal year 2005 were between $497
               million and $619 million.

               Components such as the Coast Guard, CBP, and ICE use data proxies
               to report annual operating and maintenance costs. These components
               are having difficulty tracking costs for recurring maintenance and
               repairs, utilities, cleaning and janitorial services, and
               landscaping at the building level. For example, the Coast Guard
               noted that tracking annual operating costs was difficult because,
               although the Coast Guard can easily calculate the costs of
               managing a facility (which consists of multiple buildings), the
               agency does not have the systems in place to account for cost
               streams at the building level. For example, the Coast Guard cannot
               capture the costs of janitorial services and landscaping at the
               building level. Without building-level cost information, it
               becomes more difficult for the Coast Guard to identify how its
               costs may be increasing over time, which could help the Coast
               Guard take action to reduce costs. DHS is working to correct this
               challenge within each of these components.^10

    ^9Deferred maintenance is maintenance that was not performed when
    scheduled and is put off for the future.

    ^10In commenting on this report, CBP stated that although there are
    ongoing difficulties in gathering some of this operating cost data,
    changes made to CBP's enterprise system in fiscal year 2007 will allow CBP
    to start tracking expenditures for specific utility and service contract
    material groups by building. CBP is also working with local and regional
    energy providers to update account and location information to provide
    better tracking of utility costs.

               The Coast Guard, CBP, FEMA, and ICE have also struggled to report
               on various property restrictions, such as whether property has
               historical, endangered species, developmental, or environmental
               restrictions. Some components use a data proxy as a substitute for
               fully researched data on restrictions. For example, since the
               Coast Guard and CBP do not have data on which buildings have
               lead-based paint and collecting these data for thousands of
               buildings would take considerable time and resources, the agencies
               are using each building's construction date as a proxy for
               environmental restrictions. Buildings constructed after 1977, when
               lead-based paint was banned from housing, are not restricted.
               Without information on buildings' potential health hazards, such
               as lead-based paint or asbestos, DHS real property managers cannot
               make fully informed real property management decisions. DHS
               officials noted that it was difficult for components with hundreds
               or thousands of buildings and structures, such as the Coast Guard
               and CBP, to review the thousands of documents associated with all
               the buildings in their portfolios that would need to be reviewed
               to accurately identify all restrictions.

               Lastly, some components are not reporting all real property assets
               to DHS's Real Property Information System. For example, the Coast
               Guard's reported inventory did not include approximately 2.3
               million square feet of GSA-leased space and 1.0 million square
               feet of directly leased space. FEMA's real property inventory is
               missing some disaster leases and structures. Having a real
               property database with complete data on an agency's real property
               assets is important for effective real property management
               decision making. DHS's components are working to fully update this
               information before their next submission to DHS's Real Property
               Information System.

    			  DHS Officials Believe That Better Tools Would Help Address Legal
    			  and Budgetary Limitations

               As at other federal agencies, we found that the complex legal and
               budgetary environment in which real property managers operate has
               a significant impact on real property decision making and often
               does not lead to businesslike outcomes at DHS. For example, many
               agencies, including DHS, are not authorized to retain any of the
               proceeds from the sale of surplus property. We have reported that
               this legal limitation can lead agencies to retain unneeded assets
               that create maintenance and upkeep costs for the government. Coast
               Guard officials said that having the authority to retain some
               reasonable percentage of proceeds from disposal of surplus real
               property would help offset the amount of time and cost it takes to
               complete a sale.

               To facilitate the disposal of federally owned historic
               lighthouses, the National Historic Preservation Act (NHPA) was
               amended to provide a mechanism for their disposal.^11 Under this
               program, a senior Coast Guard official noted the agency works with
               GSA to sell Coast Guard lighthouses to a responsible party. The
               act authorizes the crediting of net proceeds from the public sale
               of historic lighthouses under Coast Guard control to the Coast
               Guard appropriation account that is used to maintain lighthouses
               remaining under the Coast Guard's control.^12 According to this
               official, a similar arrangement between DHS and a third party for
               real property other than lighthouses would help DHS make better
               use of its underutilized assets.

               In addition to the authority to retain proceeds, Coast Guard
               officials identified enhanced-use leasing as a real property
               management tool that they do not have but that would enable them
               to better manage their real property portfolio.^13 The Departments
               of Defense and Veterans Affairs have been authorized to enter into
               enhanced-use leasing agreements. Enhanced-use leasing encourages
               innovative public-private partnerships that leverage underutilized
               properties to generate revenues and reduce operating costs.

    ^11The National Historic Lighthouse Preservation Act of 2000 amended NHPA.
    See 16 U.S.C. S 470w-7.

    ^1216 U.S.C. S 470w-8.

    ^13Enhanced-use lease agreements are lease agreements for property under
    an agency's control or custody that the agency can (1) enter into with a
    public or private entity and (2) receive as payment under the lease either
    cash or other consideration such as repairs of the facilities.

               Capital Planning Functions across DHS Are Relatively New

               Over the years, we have reported that prudent capital planning can
               help agencies to make the most of limited resources and that
               failure to make timely and effective capital acquisitions can
               result in increased long-term costs.^14 Real property is one of
               the major types of capital assets that agencies acquire. Other
               capital assets include information technology, major equipment,
               and intellectual property. GAO, Congress, and OMB have identified
               a need to improve federal decisions about capital investment. Our
               Executive Guide,^15 OMB's Capital Programming Guide, and OMB's
               revisions to Circular A-11 have been designed to provide guidance
               to agencies for making capital investment decisions. However,
               agencies are not required to use this guidance. Furthermore,
               agencies have not always developed overall goals and strategies
               for implementing capital investment decisions, nor has the federal
               government planned or budgeted for capital assets over the long
               term.

               Our prior work assessing agencies' implementation of the planning
               phase principles in OMB's Capital Programming Guide and our
               Executive Guide found that some agencies' practices did not fully
               conform to OMB's principles and that the agencies' implementation
               of capital planning principles was mixed. Specifically, for the
               agencies we reviewed, their capital planning processes were
               generally linked to their strategic goals and objectives, and most
               of them had formal processes for ranking and selecting proposed
               capital investments; however, the agencies had limited success
               using agencywide asset inventory systems and data on asset
               condition to identify performance gaps. In addition, we found that
               none of the agencies had developed a comprehensive, agencywide,
               long-term capital investment plan.^16

    ^14Capital plans, covering 5 years or more, explain and justify an
    agency's long-term capital asset decisions. These plans should be the
    result of an executive review process that has determined the proper mix
    of existing assets and new investments needed to fulfill the
    organization's missions, goals, and objectives. Capital assets are land,
    structures, equipment, and intellectual property that are used by the
    federal government and have an estimated useful life of 2 years or more.

    ^15GAO, Executive Guide: Leading Practices in Capital Decision-Making,
    [55]GAO/AIMD-99-32 (Washington, D.C.: December 1998).

    ^16GAO, Agency Implementation of Capital Planning Principles Is Mixed,
    [56]GAO-04-138 (Washington, D.C.: Jan. 16, 2004).

               During this review, we found that DHS's long-term capital planning
               is relatively new and generally needs improvement. DHS does not
               yet have a departmentwide capital plan but is working toward
               developing one. DHS's Investment Review Process is designed to
               promote sound capital asset decisions across the department.
               However, we have reported that this process has problems, such as
               reliance on interim guidance that has changed frequently over the
               last 2 years, making it difficult for staff to know if they are
               using the latest version. The Coast Guard has a well-established
               capital planning function, but other DHS components have capital
               planning functions that have just been formed. For example, CBP
               established its capital planning process in November 2004, but has
               not developed a comprehensive long-term capital plan, although it
               does have documents that contain some elements of such a plan.^17
               CIS's capital planning process, also established in 2004 after the
               formation of DHS, uses a long-term strategic plan to assess the
               current state of its real property assets and to work toward
               developing a longer-term capital plan. Other DHS components, such
               as ICE and FEMA, have long-term capital planning functions that
               are in early stages or lack real property programs with long-term
               capital plans. In February 2007, ICE developed a draft 20-year
               leasing plan that charts real property inventory, lease
               acquisition, and other key metrics. According to ICE officials,
               the 20-year plan allows ICE the ability to forecast capital needs
               and align staff and resources to execute projects. However,
               although ICE has made progress, additional work is needed.

               Without capital plans for each of its components, DHS will have
               difficulty making the most of limited resources and making timely
               and effective capital acquisitions that will reduce long-term real
               property costs and free funding for mission-related activities.
               Having capital plans for its components would be particularly
               beneficial, given that DHS is a relatively new federal department
               that inherited the real property portfolio held by its components'
               former agencies and is now responsible for aligning its real
               property assets with its current and future mission. Once plans
               are developed and aggregated, linking the agencywide capital plan
               with DHS's asset management plan, which we have recommended that
               OMB require for other agencies, would be beneficial. Without a
               clear linkage or crosswalk between these two plans, the
               relationship between the real property goals specified in the
               asset management plan and the agency's longer-term capital plans
               could be uncertain.

    ^17GAO, Federal Capital: Three Entities Implementation of Capital Planning
    Principles Is Mixed, [57]GAO-07-274 (Washington, D.C.: Feb. 23, 2007).

               DHS Is Making Progress Meeting the Requirements of the
    			  Administration's Real Property Initiative

               DHS has taken several actions to implement key real property
               management initiatives set forth in Executive Order 13327 and
               other guidance documents.^18 First, DHS has designated its Chief
               Administrative Officer (CAO) as DHS's Senior Real Property Officer
               (SRPO). According to DHS officials, this official's functions as
               SRPO and CAO are evenly split. As SRPO, this official serves on
               the FRPC and coordinates the formulation and implementation of
               real property management planning and policy for DHS. As CAO, the
               official manages and directs the department's administrative
               service functional areas, including asset management, occupational
               safety and health, environmental planning and management, historic
               preservation, and energy management. The CAO supervises a Senior
               Executive Service-level Director of Asset Management who in turn
               supervises an Assistant Director for Real Property. The CAO
               reports to the Under Secretary for Management (see fig. 5).

    ^18See the background section of this report for background on the key
    real property management requirements DHS is required to meet.

    Figure 5: DHS's Real Property Organization

    A key step in implementing these real property management initiatives and
    in formulating a DHS-wide real property strategy was the creation of the
    Chief Administrative Officer Council and the DHS Real Property Management
    Committee in fiscal year 2004. Both were established to review and
    coordinate DHS real property issues. The Council is chaired by the DHS
    Chief Administrative Officer and includes all the senior real property
    officers of the components. The Committee is chaired by the DHS
    Headquarters Assistant Director of Asset Management for Real Property, and
    the remaining members are real property chiefs representing the
    components. The Committee plays a lead role in developing and implementing
    DHS real property policies and processes, including DHS's asset management
    plan.

    The administration's Executive Order 13327 required DHS to develop and
    implement an asset management plan (AMP),^19 develop a real property
    inventory that tracks DHS's assets, and develop and use performance
    measures. OMB approved DHS's AMP in June 2006. The objective of the AMP is
    to foster an environment within DHS that will promote better asset
    management and the disposal of unneeded federal properties. The plan is
    also designed to implement the Real Property Initiative, the goal of which
    is to ensure that real property inventories are maintained at the right
    size, cost, and condition to support agency missions and objectives. DHS
    says that the goals of the asset management plan are to help DHS provide
    appropriate facilities and infrastructure, in an expert, cost-effective,
    and timely manner to achieve the right mix of facilities for specified and
    implied missions, professional working environments, and responsible
    stewardship of public and private resources.

    OMB Has Upgraded DHS's Real Property Management Score

    In June 2006, OMB upgraded DHS' Real Property Asset Management Score from
    red to yellow after DHS (1) designated a SRPO, (2) developed an approved
    asset management plan, (3) developed a generally complete real property
    data inventory, (4) submitted this inventory for inclusion into the
    governmentwide real property inventory database, and (5) established
    performance measures consistent with FRPC standards. In order to receive a
    green designation, DHS developed an OMB-approved 3-year timeline (approved
    in the 2nd quarter of fiscal year 2007) for implementing its asset
    management plan, and is now implementing the plan and must now take steps
    to demonstrate daily decision-making using real property data and
    performance measures, and show that its strategic plans, asset management
    plan, and performance measures are consistent (see table 2).

    ^19An asset management plan lays out an agency's plan to promote the
    efficient use of its real property assets by, among other things,
    accurately inventorying and describing its assets, aligning its assets
    with its mission, and disposing of unneeded assets.

    Table 2: DHS's Implementation of OMB's Real Property Initiative

    Real property management action                             Implementation
    Agency has an SRPO who actively serves on the FRPC.         Yes
    Agency has completed and maintained a comprehensive         Yes
    inventory and profile of agency real property.
    Agency has established asset management performance         Yes
    measures.
    Agency has provided timely and accurate information for     Yes
    inclusion into the governmentwide real property inventory
    database.
    Agency has developed an OMB-approved asset management plan. Yes
    Agency has established an OMB-approved 3-year rolling       Yes
    timeline with date-certain deadlines by which agency will
    address opportunities and determine its priorities as
    identified in the asset management plan.
    Agency has demonstrated steps taken towards implementation  No
    of the asset management plan.
    Agency routinely uses accurate and current asset inventory  No
    information and asset maximization performance measures in
    management decision making.
    Agency's management of its property assets is consistent    No
    with the agency's overall strategic plan, asset management
    plan, and performance measures.

    Source: OMB.

    DHS has developed an OMB-approved 3-year timeline to implement the goals
    and objectives of its asset management plan. Consistent with the goals and
    objectives of the asset management plan, DHS has developed the following
    goals to be fulfilled through a series of initiatives over the next 3
    years:

               o Instill a culture of informed, results-based decision making;
               o Achieve greater uniformity in real property policies and
               approaches;
               o Leverage human capital to maximize value added to real property
               decisions;
               o Deploy acquisition tools that promote effective asset
               management;
               o Identify requirements for long-term data management and begin
               investment selection steps;
               o Develop a measure to track customer satisfaction and use results
               to continuously improve real property service delivery;
               o Accelerate disposal of unneeded assets;
               o Colocate appropriate facilities.

               For example, DHS's Asset Management Real Property Division has
               started to identify requirements for long-term data management and
               to begin the investment review steps required by DHS to plan the
               acquisition of a new system. In doing so, DHS has begun to define
               a program of requirements for a real property asset management
               data system. In addition, to develop a measure to track customer
               satisfaction and use the results to improve real property service
               delivery, RPMC will lead a task force to develop a customer
               satisfaction survey applicable to all components. Also, with the
               goal of instilling a culture of informed, results-based decision
               making, DHS plans to implement and institutionalize the
               appropriate use of key performance measures as the basis for real
               property management decisions. Core performance measures will
               include a mission dependency index, facility utilization rate,
               facility condition index, and operating costs. DHS is currently
               addressing comments by OMB to include additional milestones that
               will lead to measurable results for the identified initiatives.
               Furthermore, since DHS initially set a very aggressive goal of
               meeting OMB's green standard by the end of 2007, DHS and OMB
               agreed to the rebaselining of achieving the green standard to the
               3rd quarter of 2008 to establish a more realistic implementation
               schedule.

               However, as discussed earlier, DHS has struggled with some
               elements of assembling a complete real property data inventory,
               including collecting data for some performance measures such as
               facility condition. And, for DHS as for many other federal
               agencies, it is too early to tell whether the implementation of
               its asset management plan will be successful, although DHS appears
               headed in the right direction. DHS officials have indicated that
               among its next steps is to prioritize funding to fully assess the
               condition of its facilities. Without complete facility condition
               data, active and efficient stewardship of government real property
               assets is difficult. DHS must also link its asset management plan
               with its yet-to-be-developed capital plan.

    			  DHS Headquarters Consolidation Faces Challenges Related to Its Cost
    			  and Stakeholder Concerns

               DHS components are currently dispersed throughout the Washington,
               D.C., area, and DHS wants to better align its real property
               portfolio in the area with its mission by consolidating its
               headquarters facilities. GSA and DHS estimate that the total cost
               of a DHS consolidation that involves 4.5 million square feet
               space, plus parking--the amount of office space DHS says it
               needs--will be at least $3.26 billion. According to GSA, this
               estimate is a preliminary, planning-level estimate based on
               alternatives currently under study. DHS believes that lessons
               learned from Hurricane Katrina and the department's Second Stage
               Review^20 have reinforced its need to be better integrated to
               prepare for and respond to natural disasters or terrorist attacks
               and to meet its mission of leading a unified national effort to
               secure America. GSA has identified the West Campus of St.
               Elizabeths site as the best candidate for the consolidation in the
               Washington, D.C., area, but the cost of the planned consolidation
               and stakeholders' concerns pose challenges for DHS. GSA is
               currently preparing a Master Plan for the redevelopment of the
               site as it incorporates stakeholder input. An official draft that
               incorporates all stakeholders' input has not yet been presented to
               stakeholders. A draft is due to be submitted to NCPC for review
               and public comment in July 2007.

               DHS states that consolidation of the core of its operations at St.
               Elizabeths will better integrate the department. In the
               Washington, D.C., area, DHS has seven core components in 85
               buildings and 53 locations, accounting for approximately 7 million
               gross square feet of government owned and leased office space. We
               agree that DHS's current housing configuration is too dispersed
               and needs to be better integrated. DHS anticipates that the end
               state of the consolidation effort will result in DHS being down to
               six to eight locations. DHS expects its need for office space to
               grow to about 8 million square feet over the next 5 years. About
               70 percent of DHS's space in Washington, D.C., is privately held
               and is leased directly by DHS or through GSA.

               According to DHS, its components' dispersion across multiple
               locations creates less than ideal facility protection capabilities
               and adversely affects communication, coordination, and cooperation
               across components. In October 2006, DHS developed a plan for
               consolidation called National Capital Region Housing Master Plan
               for the Washington, D.C., area, which presents DHS's strategy for
               consolidating its headquarters and operating components in the
               Washington, D.C., area.^21 Under this plan, DHS would consolidate
               its mission execution functions on the West Campus of St.
               Elizabeths site in Washington, D.C., and it would also consolidate
               its support services, such as procurement, but at a location other
               than St. Elizabeths. In addition, DHS maintains that consolidation
               will reduce the department's costs to manage its real property
               portfolio by enabling the department to avoid the costs of
               renewing leases for 4.7 million square feet of office space in the
               Washington, D.C., metro area that expire over the next 10 years.
               According to DHS, since its plan for consolidation at St.
               Elizabeths uses a campus with security setbacks--the space between
               a property's perimeter barrier and a building's exterior--it would
               also save costs by reducing the need for extensive blast
               protection hardenings throughout the campus.

    ^20DHS's Second Stage Review was a systematic evaluation of its
    operations, policies, and structures completed in June 2005.

    ^21DHS was directed to submit a comprehensive headquarters master plan for
    the future location of all DHS offices and components. See H. R. Conf.
    Rep. No. 109-699, at 118 -119 (2006) accompanying the Department of
    Homeland Security Appropriations Act for Fiscal Year 2007, P. L. 109-295
    (2006). The Conference Report further stated that DHS was prohibited from
    relocating Coast Guard headquarters or any other DHS component until DHS
    completed the plan and GSA submitted a prospectus for congressional review
    and approval. DHS submitted its National Capital Region Housing Master
    Plan to Congress in October 2006.

               The plan states that increased colocation and consolidation will
               be necessary to achieve the following five objectives:

               o improve mission effectiveness,
               o create a unified DHS organization,
               o increase organizational efficiency,
               o size DHS's real property portfolio accurately to fit its
               mission,
               o reduce real property occupancy costs.

               DHS considered a baseline scenario (existing conditions) and three
               alternative housing scenarios to determine which scenario would
               best accomplish these five objectives (see table 3).

               Table 3: DHS Real Property Housing Scenarios for the Washington,
               D.C., Area

    Scenario           Description
    Baseline           Existing conditions, 85 buildings in 53 locations.
    Dispersed          Multiple buildings averaging between 185,000 and
                          300,000 rentable square feet that consolidate
                          components or similar purpose facilities.
    Mid-sized building Multiple buildings averaging between 300,000 and
                          850,000 rentable square feet, supported by several
                          smaller buildings, including unique facilities.
    Campus             Consolidation resulting in several campuses, including
                          one large campus, in addition to unique facilities that
                          require strategic locations.

               Source: DHS.

               DHS found that the colocation and consolidation benefits of the
               campus scenario are more favorable than those of the other
               scenarios and the estimated annual costs of the campus scenario
               are 10 to 15 percent lower than for the baseline scenario.
               Although the campus scenario involves higher short-term transition
               costs than the alternative scenarios, DHS concluded that the
               life-cycle and organizational benefits to DHS outweigh these
               costs.

    			  Consolidation at St. Elizabeths Could Cost over $3.26 Billion

               The West Campus of St. Elizabeths has 61 buildings containing 1.1
               million square feet of space on 176 acres located in the Anacostia
               neighborhood of Southeast Washington, D.C. It is a National
               Historic Landmark District. This designation recognizes the
               exceptional national significance of the property and is the same
               designation given to the White House and the Capitol. In
               commenting on this report, the U.S. Commission of Fine Arts and
               the Advisory Council on Historic Preservation noted other values
               of the property, including the site's historic and cultural value
               related to the history of the treatment of mental illness and
               serving as a hospital site during the Civil War, and the
               architectural value of many buildings that display the
               Gothic-Revival architectural style. Figure 6 shows the
               Administration Building on the campus. In addition to the
               buildings on the West Campus, the National Historic Landmark
               designation covers the landscaping and grounds, the scenic vistas
               of the river and city, and the Civil War cemetery (see fig. 7).
               GSA took custody and control of the site after it was transferred
               in December 2004 from the Department of Health and Human Services,
               which no longer needed the site. According to GSA, there was
               extensive deterioration of all the buildings and the campus due to
               lack of maintenance and preservation by Health and Human Services
               prior to GSA taking custody and control. The buildings are in such
               poor condition, restoration is needed, according to GSA and other
               stakeholders.

               Figure 6: The Administration Building on the West Campus of St.
               Elizabeths

               Figure 7: View from St. Elizabeths West Campus Looking North

               The West Campus of St. Elizabeths is GSA's preferred site for
               consolidation because, according to GSA, it (1) can accommodate
               the 4.5 million square feet of office space, plus parking, DHS
               maintains it needs and (2) is available immediately, which are two
               key requirements for DHS. According to DHS, the occupancy plan is
               based on the guiding principle that the campus must serve as the
               central hub for leadership, operations coordination, policy, and
               program management in support of the DHS's strategic goals.
               According to DHS, a campus setting promotes those critical mission
               execution functions that facilitate integrated decision making,
               effective communications, cooperation, and coordination. GSA
               analyzed available properties within the Washington metropolitan
               area and determined that the West Campus of St. Elizabeths is the
               only site capable of meeting these two core requirements.^22 No
               single site under the federal government's control and custody can
               accommodate DHS's need of 7 million square feet. Because the St.
               Elizabeths West Campus is already owned by the federal government,
               acquisition costs for the consolidation as a whole would be
               low.^23 DHS also cites St. Elizabeths' location and capacity for
               high-security features as additional reasons for selecting the
               site. St. Elizabeths is located within 2.5 miles of the U.S.
               Capitol and 3 miles from downtown D.C. In addition, St.
               Elizabeths' terrain provides some natural buffer zones, while if
               DHS is to remain in locations downtown, costly hardening of
               buildings for security purposes would be required.

               GSA and DHS estimate that the total cost of a DHS consolidation at
               St. Elizabeths that involves 4.5 million square feet of office
               space, plus parking, will be at least $3.26 billion, based on
               alternatives currently under study.^24 According to GSA, $150 to
               $200 million of this cost estimate includes the costs of
               infrastructure improvements and design. Infrastructure costs
               include the costs of installing utilities, fiber-optic lines, and
               telephone lines, and also the costs of GSA's transportation
               improvements on or adjacent to the site. According to GSA, the
               total scope of transportation improvements will be determined when
               the Record of Decision is signed by the GSA Regional
               Administrator.^25 Other expenses included in the $3.26 billion
               total include construction, renovation, information technology,
               furniture, fixtures and equipment, and moving costs. (See table 4
               for a summary of estimated costs to develop the St. Elizabeths
               site.)^26 GSA's estimate includes the cost of transportation
               improvements to streets, roads, and highways in the vicinity of
               St. Elizabeths to support the federal redevelopment project. The
               transportation improvement estimate ranges from $27 million to $40
               million, of which the District Department of Transportation's
               (DDOT) costs range between $4 million and $14 million, according
               to GSA. GSA's estimate does not include all the mitigations--such
               as dioxin remediation and landscaping--that may be required to
               meet the concerns of stakeholders.^27 In addition, access to the
               campus is dependent on transportation projects estimated to cost
               over $1 billion to be borne by the D.C. government--costs that are
               not part of the total estimate. These projects were planned by
               DDOT before GSA formulated its plans to redevelop the St.
               Elizabeths West Campus. The D.C. government has only approved
               partial funding for these transportation improvements thus far.
               DDOT is a cooperating agency for the Environmental Impact
               Statement currently under development by GSA. According to GSA, it
               is coordinating with the Federal Highway Administration and DDOT
               to help ensure that regional projects planned for the area are
               funded consistent with the St. Elizabeths West Campus development
               schedule.

    ^22GSA's alternative location analysis lists locations that GSA considered
    to house DHS and why each was eliminated from further study.

    ^23GSA is requesting funds in its fiscal year 2008 budget to purchase
    about 2 acres of land from both the District of Columbia and CSX
    Corporation; a similar request was submitted for land necessary to access
    the site from Malcolm X Drive. This acreage is necessary to develop
    entrance/exit points to the West Campus to reduce the increased traffic
    generated by the new federal campus.

    ^24According to construction industry standards, estimates made during the
    conceptual design phase of a construction project, the current phase of
    the Coast Guard component of the St. Elizabeths development, generally
    have a degree of accuracy of plus or minus 30 percent.

    ^25The Record of Decision is the [58]decision [59]document for an
    [60]environmental impact statement that identifies all alternatives and
    describes the reasons for the selection of an alternative.

    ^26Infrastructure costs include costs such as planning and design,
    demolition of selected structures, utility upgrades, roadwork, perimeter
    security, and landscape repair.

    ^27GSA has identified the presence of dioxin on-site. The cost of
    remediation is unknown and would be borne by the Department of Health and
    Human Services, as required by a Memorandum of Agreement signed when the
    site was transferred to GSA in December 2004.

               Table 4: Preliminary Estimate of the Cost to Develop the St.
               Elizabeths Site

    Type of cost                    Amount
    Build out, design, moving and   $1.32 billion
    furnishings (DHS cost)
    Construction and infrastructure $1.94 billion
    (GSA cost)
    Additional development costs    (1) $4 to 14 million in off-site
                                       improvements at the Malcolm X Interchange
                                       funded by DDOT.

                                       (2) Unknown mitigation costs such as
                                       dioxin remediation funded by the
                                       Department of Health and Human Services
                                       and other mitigations funded by GSA.
    Total                           $3.26 billion (plus additional development
                                       costs such as mitigation costs)

               Source: GSA and DHS.

               Based on a GSA cost analysis, DHS has testified that without
               federal construction at St. Elizabeths, the department will
               continue to be housed in leased space resulting in an estimated $1
               billion more in cost over a 30-year period compared with the
               consolidation.^28 A revised GSA cost analysis received on June
               13--that assumes a lower rental rate for parking space than office
               space--estimates savings at $743 million. We did not assess the
               assumptions that form the basis of either analysis, as they were
               provided right before this report was published. Furthermore, it
               is important to note that the analysis is not designed to assess
               costs to the federal government as a whole and does not include
               actual costs where DHS is currently housed. According to GSA, this
               analysis is based on average rental rates for Washington, D.C.
               While GSA's cost analysis is useful in determining whether
               construction or leasing is more cost-effective, a more
               comprehensive analysis that includes additional factors is
               necessary to determine the cost of the St. Elizabeths development
               to the government as a whole. For example, a more comprehensive
               analysis could take into account (1) DHS's actual and projected
               leasing costs for locations where it is currently housed;^29 (2)
               DHS costs to develop the site--including costs such as tenant
               building improvements, which stand at $1.32 billion--and how those
               costs would vary depending on the alternative ultimately selected,
               and (3) a range of leasing and construction alternatives and their
               associated costs for the St. Elizabeths site, depending on the
               square footage that actually goes to the St. Elizabeths West
               Campus. A comprehensive cost analysis would improve transparency
               and allow for more informed decision making. Actual and projected
               leasing costs for the locations where DHS is currently housed
               would provide a more accurate estimate of costs if a consolidation
               at St. Elizabeths does not occur and serve as a baseline against
               other consolidation alternatives. Accounting for all of DHS's
               current locations in an analysis and identifying which leases
               could potentially be replaced by space at St. Elizabeths would
               also be helpful to decision makers in understanding the
               consolidation. Furthermore, incorporating DHS costs such as tenant
               building improvements and moving and furnishing costs--which stand
               at an estimated $1.32 billion--and how those costs would vary
               depending on the alternative ultimately selected, would be
               important in order to evaluate St. Elizabeths costs from the
               perspective of the federal government as a whole, not simply from
               GSA's perspective. And, examining the costs of a range of varying
               amounts of development at the site would be useful should funding
               for the preferred option become difficult to obtain. Finally, GSA
               and DHS could better support their case for consolidation at St.
               Elizabeths West Campus with a thorough analysis of the savings
               they expect from reducing the costs of physical security
               investment and hardening at downtown leased locations.^30 A more
               comprehensive St. Elizabeths cost analysis such as this would
               improve transparency and help GSA, DHS, and key stakeholders,
               including Congress, better assess the merits of the consolidation
               from a cost perspective for the government as a whole.

    ^28DHS testified on the results of GSA's cost analysis on March 1, 2007,
    before the House of Representatives Homeland Security Committee,
    Subcommittee on Management, Investigations, and Oversight. GSA conducted
    this analysis using the Automated Prospectus System (TAPS), a cost
    analysis tool used by federal agencies to assist in real estate decision
    making. GSA uses TAPS analysis to make decisions about leasing and new
    construction options. GSA's St. Elizabeths cost analysis looked at the
    present value of the cost of ownership over 30 years--not the overall
    costs to develop St. Elizabeths, currently estimated at $3.26
    billion--which occur at the front end of this 30 year period and then do
    not recur. GSA's cost of ownership analysis does not include DHS's $1.32
    billion in development costs, but does include costs for utilities and
    repairs that would not be part of development costs.

    ^29According to GSA, DHS is currently paying an average of $30 per square
    foot for its leased locations totaling $135 million annually. In addition,
    in commenting on a draft of this report, GSA said that it has awarded a
    contract to verify the DHS headquarters occupancies in the National
    Capital Region and to develop scenarios that identify the most
    cost-effective approach to achieve DHS's final housing solution,
    recognizing DHS's colocation requirement. This study is scheduled for
    completion in the fall of 2007.

    ^30GSA provided us with an analysis that compared the cost of providing
    security to the Bureau of Alcohol, Tobacco, Firearms, and Explosives to
    the cost of providing security at the St. Elizabeths West Campus. However,
    because it was provided right before this report was published, we did not
    assess it.

               GSA and DHS are moving forward with requesting funding for the
               first phase of the consolidation, and therefore a more
               comprehensive analysis would better inform decision making. GSA
               has tentatively developed a three-phased approach for managing the
               consolidation, with construction funding originally requested for
               the Coast Guard's new headquarters building in fiscal year 2007
               and ending with final occupancy of the third phase in fiscal year
               2015 (see fig. 8). According to GSA, the Coast Guard requires
               fiscal year 2011 or earlier occupancy for their new headquarters
               space, and timely Coast Guard occupancy is critical. Due to the
               lack of funding for the St. Elizabeths project in the fiscal year
               2007 Continuing Resolution, GSA is concerned that the overall
               schedule may be delayed with corresponding adverse impacts on DHS
               operations and integration. GSA and DHS are working together to
               update the schedule and will work with Congress on options to
               recover from any schedule slippage that results from not receiving
               funding in fiscal year 2007. GSA and DHS have requested funds for
               the project for fiscal year 2008.^31 DHS headquarters and
               remaining components would relocate in the second and third
               phases. During phase 1-a and 1-b, which extends from the end of
               2007 to 2011, DHS anticipates bringing 3,860 employees to the
               site. During phase 2, which ends in 2013 if construction begins in
               2009, and Phase 3, which ends in 2015 if construction begins in
               2011, DHS will add another 5,000 employees each, for a total of up
               to 14,000 employees. While this three-phase approach distributes
               costs across a number of years, according to DHS, it prolongs the
               current fragmented DHS housing structure and could thus affect
               mission performance. DHS intends to evaluate options to accelerate
               construction and combine phases with GSA to the extent that
               funding is available to do so. The Coast Guard would be the first
               DHS component to move its headquarters under current plans.
               Because of recent hiring, the Coast Guard has outgrown its current
               primary headquarters location; the lease expires in May 2008.^32
               Other Coast Guard offices in the Washington, D.C., area will also
               be incorporated in the consolidation.

    ^31The Revised Continuing Appropriations Resolution for Fiscal Year 2007
    specifically stated none of the funds appropriated or otherwise made
    available for GSA's Real Property Activities, Federal Buildings Fund may
    be obligated for the Coast Guard consolidation and development of St.
    Elizabeths campus in the District of Columbia. P.L. No. 110-5, 121 Stat.
    8, 57 (2007).

    ^32DHS said that this lease expiration will be bridged until the new
    headquarters is completed.

    Figure 8: GSA's Proposed St. Elizabeths Standard Development Schedule

    GSA and DHS officials said that GSA would fund about $1.94 billion and DHS
    would fund about $1.32 billion of the current estimated $3.26 billion
    dollar total. Under the current GSA development schedule, the Coast Guard
    is scheduled to be fully moved in by fiscal year 2011, if GSA receives
    appropriations as requested. DHS stated that most of the DHS-specific
    costs will be incurred, regardless of whether the St. Elizabeths West
    Campus is developed because of the need to renew expiring leases over the
    coming years. More specifically, funding activity and related planning
    thus far have been as follows:

               o To begin funding the consolidation, GSA was provided $24.9
               million in fiscal year 2006 for the design phase of the Coast
               Guard headquarters construction project. GSA also received $13
               million for, according to GSA, identification of fire code
               deficiencies, renovation cost estimates, a buildings demolition
               study, master planning, NEPA studies, site exit analysis, a Campus
               Design (infrastructure only), restoration of landscaping, cleaning
               of storm water systems and underground pipe replacement, upgrades
               to selected fire protection systems, repair of the wastewater
               system, deferred maintenance, and repair and stabilization of
               selected structures at the St. Elizabeths West Campus site in
               fiscal year 2006.
               o GSA and DHS did not receive any funding for DHS headquarters
               consolidation for fiscal year 2007.^33 The Coast Guard and
               Maritime Transportation Act of 2006 provided that the Coast Guard
               cannot move any personnel, property, or other assets to St.
               Elizabeths until the GSA Administrator submits a plan for the site
               to certain congressional committees.^34 As required by law, the
               plan should include, among other things, the design of facilities
               for at least one federal agency other than the Coast Guard, which
               houses no fewer than 2,000 employees. GSA is now developing a plan
               in response to the act. GSA is also developing a Master Plan for
               the St. Elizabeths site, which will be discussed in more detail
               later.
               o GSA's fiscal year 2008 request was about $347 million, the bulk
               of which was for phase 1-a and phase 1-b of the proposed project.
               Phase 1-a is proposed to provide 1.135 million square feet of
               space and 650 parking spaces for the Coast Guard headquarters
               facility, which will house 3,860 Coast Guard employees. Phase 1-b
               is proposed to provide 203,000 square feet of shared support and
               other space and 350 parking spaces. Phase 1-a and phase 1-b,
               according to GSA, are required to fully support the Coast Guard's
               operations, and therefore are scheduled to be completed together.
               This request also includes $26 million for the design of phase 2.

    ^33Despite not receiving funding in fiscal year 2007, DHS states that due
    to delays in the Master Plan and Environmental Impact Statement
    development, the actual delay in the project due to the lack of fiscal
    year 2007 funding is only about 2 to 4 months.

    ^34GSA was required to submit the plan to the House Committee on
    Transportation and Infrastructure and the Senate Committee on Commerce,
    Science, and Transportation and the Senate Committee on Environment and
    Public Works. See P. L. No. 109-241, 120 Stat. 516, 523-524 (2006).

               o After not receiving any funding in fiscal year 2007, DHS has
               requested $120 million for fiscal year 2008 to continue with its
               consolidation plans for the St. Elizabeths site. According to DHS;
               DHS, GSA, and OMB have developed a balanced funding stream that
               takes into account the lack of fiscal year 2007 appropriations. In
               commenting on a draft of this report, GSA expressed concern about
               its ability to meet the U.S. Coast Guard requirements within its
               fiscal year 2008 St. Elizabeths budget of approximately $347
               million. This funding will be used for Coast Guard headquarters
               construction costs over and above what GSA is paying,
               tenant-specific phase 2 and phase 3 design costs, and staffing
               costs. This is a portion of the $1.32 billion that DHS estimates
               is needed for all costs associated with the development of and
               move to St. Elizabeths.
               o The balance of project funding for phase 2 ($491 million) was to
               be requested in a future fiscal year. The goal of phase 2 is to
               provide 1.6 million square feet of highly secure housing plus
               parking garages containing 2,000 spaces to consolidate other DHS
               components.
               o Phase 3 would add another 1.6 million square feet of space to
               accommodate what DHS hopes will be the bulk of its remaining
               components.

               According to GSA, the final cost of the St. Elizabeths West Campus
               development will depend, initially, on the final Master Plan
               layout and density selected and then by the final design and
               construction contracts awarded by the federal government. GSA is
               currently preparing the Master Plan for the redevelopment of the
               site and was originally exploring seven development scenarios that
               ranged from 1.4 million to 4.5 million square feet of modern
               office space (plus parking) that would reuse most of the historic
               structures on the site. However, because the Coast Guard and
               Maritime Transportation Act of 2006 stipulated that the Coast
               Guard may not move to the site until, among other things, a plan
               for the site includes a facility for at least one federal agency
               other than the Coast Guard that houses no fewer than 2,000
               employees, GSA said that it is no longer considering the two
               alternatives that looked at developing only 1.4 million square
               feet of space. Only the five alternatives that develop 3.0 million
               and 4.5 million square feet of space (plus parking) will now be
               considered.^35 DHS maintains that it currently plans to reuse 77
               to 81 percent of the existing square footage that contributes to
               the site's status as a National Historic Landmark, even in the
               most intensely developed alternatives.

    ^35If parking is included, the square footage for each Master Plan
    alternative ranges from 4.34 million square feet to 6.36 million square
    feet.

               GSA plans to issue a draft Master Plan for public comment in July
               2007 and to submit the final Master Plan by December 2007.
               According to GSA, GSA and NCPC have agreed to a 60 day review for
               the preliminary and final St. Elizabeths West Campus Master Plan
               submissions. As the central planning agency for the federal
               government in the National Capital Region, NCPC is charged with
               planning for the appropriate and orderly development of the
               national capital and for the conservation of important natural and
               historic features. To this end, NCPC is charged with preparing a
               comprehensive plan for federal activities in Washington, D.C., and
               reviewing the development plans for federal agencies for
               consistency with the comprehensive plan. Under 40 U.S.C. S 8722,
               NCPC has approval authority over site and building designs and
               uses NCPC-approved Master Plans as the basis for subsequent
               reviews and approvals. The U.S. Commission of Fine Arts was
               established by Congress in 1910 as an independent agency to advise
               the federal and District of Columbia governments on matters of
               design and aesthetics that affect the appearance of the nation's
               capital. One of the roles of the U.S. Commission of Fine Arts is
               to provide advice on proposed building projects.

    			  Key Stakeholders Are Concerned about Historic Preservation,
    			  Environmental Issues, and Impact on the Local Community

               In redeveloping St. Elizabeths, GSA must comply with the NHPA and
               the NEPA. Under NHPA, federal agencies are required to consider
               the effects of their activities on historic properties and to
               undertake planning and actions necessary to minimize harm to the
               historic property.^36 As part of the NHPA process, GSA is
               consulting with the D.C. State Historic Preservation Officer, the
               Advisory Council on Historic Preservation, NCPC, the U.S.
               Commission of Fine Arts, and many other groups. NEPA provides for
               the consideration of environmental issues in federal agency
               planning and decisionmaking. NEPA requires federal agencies, such
               as GSA, to prepare an environmental impact statement for actions
               that may significantly affect the quality of the human
               environment. GSA is conducting both reviews concurrently to avoid
               duplication, since both are public processes and NEPA addresses
               preservation issues as well as environmental concerns.

    ^3616 U.S.C. S 470f and 16 U.S.C.S 470h-2.

               As part of its consultations with various organizations in
               developing the Master Plan, DHS and GSA have encountered
               objections from several key stakeholders that are concerned about
               whether the project would comply with current historic
               preservation and environmental laws. Views expressed are generally
               the views of senior staff and do not represent the final positions
               of the organizations themselves, which will officially provide
               comment as consulting parties once GSA submits its draft Master
               Plan in July 2007. According to January 19 and September 21, 2006,
               letters submitted to GSA by NCPC's Executive Director, NCPC is
               concerned that GSA's alternatives for the St. Elizabeths West
               Campus thus far do not sufficiently protect the historic and
               natural settings of the site. According to NCPC and other
               stakeholders, including the U.S. Commission of Fine Arts, the
               Advisory Council on Historic Preservation, the National Trust for
               Historic Preservation, and the D.C. Office of Planning's Historic
               Preservation Office, DHS's programmatic requirements are taking
               precedence over the preservation and planning interests of the
               campus itself. NCPC and other stakeholders are concerned that
               developing 4.5 million square feet of office space, plus parking,
               for DHS at St. Elizabeths will not protect the site's status as a
               National Historic Landmark District. Some stakeholders maintain
               that developing this much space, as well as other alternatives
               that have been discussed involving 3.0 million square feet, will
               have significant, adverse effects on the historic setting and
               character of the site and make mitigation and minimization under
               NEPA and NHPA difficult if not impossible to achieve. Stakeholders
               generally support federal use and maintain that the site can hold
               about 2.0 to 2.5 million square feet of development (plus parking)
               without compromising the site's status as a National Historic
               Landmark District.^37

               In addition, according to the National Trust for Historic
               Preservation (NTHP), each alternative requires a more thorough
               exploration of options for off-site and underground parking, in
               order to minimize harm to the maximum extent possible by reducing
               the additional mass and bulk of aboveground structures in the
               National Historic Landmark District. During our review DHS
               maintained that it currently plans to reuse 77 to 81 percent of
               the existing square footage that contributes to the site's status
               as a National Historic Landmark District, even in the most
               intensely developed alternatives.

    ^37According to the District of Columbia Historic Preservation Office, a
    few years ago the District of Columbia Office of Planning conducted a
    study of St. Elizabeths for the purpose of a redevelopment plan. That
    study proposed 2.7 million gross square feet for the West Campus prior to
    any preservation reviews. In addition, both NCPC and the D.C. State
    Historic Preservation Officer point to GSA's own August 2005 Land Use
    Feasibility Study, which lays out the risks associated with various
    development scenarios, to illustrate risks to historic resources under the
    alternatives considered. Of the eight scenarios considered, only the 1.6
    million square foot scenario was not high risk for protecting St.
    Elizabeths as a National Historic Landmark.

               GSA does not concur with stakeholders views on historic
               preservation issues. According to GSA, it will, to the maximum
               extent possible, undertake planning and actions necessary to
               minimize harm to the landmark as is required by the National
               Historic Preservation Act. GSA acknowledged that it had not yet
               developed an alternative that reflected the views of many of the
               stakeholders, but stated that a draft Master Plan would be
               available for review in July 2007 and that certainly this was
               possible.

               Furthermore, according to the NCPC Executive Director in a
               September 2006 letter, the proposed St. Elizabeths development
               does not address a number of significant policies in the
               Comprehensive Plan for the National Capital: Federal Elements,
               including policies to sustain exemplary standards of historic
               property stewardship and to preserve open space at St. Elizabeths
               for public use and enjoyment of views from the site.^38 GSA noted
               that although it may not address the policies discussed above
               because sometimes there are trade-offs that must be made in the
               process of developing a site, it does address the vast majority of
               the Comprehensive Plan.

               In addition, some stakeholders assert that GSA has not adequately
               considered other DHS headquarters alternatives. For example, in a
               letter dated January 26, 2007, the NTHP suggested that GSA could
               explore financing the acquisition of an alternative site by
               disposing of the St. Elizabeths campus for preservation-sensitive
               development. GSA responded by stating that it is statutorily
               obligated to first consider land that it owns to meet government
               housing needs. In addition, GSA argues that it does not make
               financial sense to pay for a lease or the costs of a land swap
               when the St. Elizabeths site can meet DHS's needs if National
               Historic Landmark issues can be resolved satisfactorily. Moreover,
               according to GSA, it will be able to preserve the site's historic
               and natural character while developing 4.5 million gross square
               feet of office space, plus parking. Overall, the debate centers on
               how much development the site can accommodate while protecting the
               site's status as a National Historic Landmark District.

    ^38We do not address the issue of public access in detail in our report,
    but in general, most stakeholders with whom we talked supported some type
    of limited public access to the site such as access to the Point for
    certain holidays and access by permit to the Civil War cemetery. Most
    stakeholders acknowledged that unlimited access was not a realistic
    option. We agree with DHS that in the post 9-11 security environment,
    access to the site is a complicated issue.

               In addition to concerns about the historic preservation and
               environmental issues related to DHS's consolidation at St.
               Elizabeths, D.C. planning officials and residents of the community
               have concerns about how the proposed development will affect those
               living in the area. The residents of Ward 8, the community that
               would be most affected by the St. Elizabeths development, are
               primarily concerned about increased traffic and whether the
               potential economic benefit of job availability, contracting
               opportunities, and retail possibilities will materialize. A D.C.
               planning official also expressed concern that a federal presence
               there will offer no taxable infrastructure, require increased
               public service response (fire, ambulance, hospital), and expose
               the community to the risk of a terrorist attack. However, some
               community leaders have stated in various public forums that they
               support locating federal development at St. Elizabeths as an
               economic driver and magnet for additional development and
               revitalization.

    			  Master Plan Is Critical to the Consolidation's Outcome

               Critical to the outcome of the proposed consolidation is GSA's
               development of the Master Plan, currently scheduled to be released
               for comment by July 2007 and submitted by December 2007 to NCPC
               for review and public comment. A completed plan should allow a
               better estimation of the overall costs of this consolidation and
               should incorporate stakeholders' concerns. Most stakeholders we
               contacted--including NCPC, the Advisory Council on Historic
               Preservation, and the D.C. Planning Office--acknowledge that GSA's
               outreach to the local community, review agencies, and interested
               consulting parties has been extensive, even though many
               stakeholders believe that GSA has not sufficiently incorporated
               stakeholders' concerns into the five current Master Plan
               alternatives by adding an additional alternative that accommodates
               their concerns. GSA has not developed an additional alternative,
               but says it has made modifications to the existing alternatives,
               including moving development away from vistas and sight lines,
               preserving a majority of the historic buildings, and limiting the
               height of new buildings on the site.

               Federal agencies are required to consult with NCPC prior to the
               preparation of construction plans originated by the agency for
               proposed developments and projects within the National Capital
               Region. According to NCPC, once GSA's draft Master Plan is
               completed, NCPC will review it for compliance with federal
               environmental and historic preservation laws. NCPC will prepare a
               report with recommendations to the agency, which GSA must
               consider. GSA hopes its efforts to reach out to stakeholders and
               resolve their concerns will conclude with an agreement with the
               D.C. State Historic Preservation Officer and Advisory Council on
               Historic Preservation as signatories.

               DHS Has Taken Actions Intended to Improve the Security of Its
    			  Facilities, but Its Efforts Are Lacking in Certain Key Areas

               DHS has taken a number of actions intended to improve the security
               of its facilities. Like other federal agencies, DHS has made
               physical improvements at the individual building level, such as
               adding pop-up bollards, installing bullet-resistant glass, and
               implementing access controls in many buildings across the
               department. For example, ICE is using new smart-card technology
               through a security pilot project at several of its facilities
               across the country, including Federal Plaza in New York City. The
               Coast Guard is using the latest technology to evaluate the
               credentials of contractors. FLETC is using bullet-resistant glass
               at key access control points and pop-up bollards to repel
               unauthorized vehicles. FLETC has also established fingerprint
               systems and captures facial images via digital cameras to improve
               access control. FEMA has installed pop-up bollards and added
               surveillance cameras to its headquarters in downtown Washington.
               TSA told us that it utilizes closed circuit television, contract
               security guards, access control, intrusion detection and vehicle
               security barriers. TSA also told us that it has established
               network connectivity for its closed circuit television at its
               Washington, D.C. facilities, enabling the TSA Chief Security
               Officer and his headquarters staff to monitor each facility.

               DHS security officials said that increasing the use of
               technologies like access controls, while requiring an initial
               up-front investment, would save DHS money in the long run since
               fewer guards would be needed. It would also improve security they
               said. At DHS's Nebraska Avenue Complex, for example, where some of
               DHS' headquarters offices are located, DHS uses glass-partitioned
               turnstiles with access control card readers to give cleared
               employees access at this location. Employees swipe their access
               card and if the card is approved, the turnstile opens. The access
               control validates the card without involving guards. DHS has
               backed up this system through the use of closed circuit television
               cameras that monitor the turnstiles. All activity is recorded by
               digital video that can be reviewed if necessary following a
               breach. By efficiently using technology to supplement and
               reinforce other security measures, DHS can more effectively
               address vulnerabilities that are identified by the risk-management
               process with appropriate countermeasures. Our past work showed
               broad concurrence among GAO, Inspectors General, facility security
               experts, and agency experts that making efficient use of security
               technology to protect federal facilities is a key practice.^39

    			  DHS Has Taken Actions to Improve Communication among Components
    			  and across Functional Lines

               Besides taking actions at the individual building level, DHS has
               implemented several management changes intended to improve
               facility protection. DHS has designated a Chief Security Officer
               for the department and established a Chief Security Officer
               Council to assist the Chief Security Officer in evaluating
               security issues.^40 In addition, DHS's Chief Administrative
               Officer, Chief Security Officer, and ISC personnel are working
               together to integrate physical security programs and plans into
               DHS's overall real property management program. DHS real property
               management officials and physical security officials have begun to
               communicate and coordinate regularly through meetings. For
               example, DHS real property and security officials are
               collaborating on the design of the St. Elizabeths site
               headquarters buildings to ensure that building designs are
               properly evaluated from a security perspective. The security
               coordinator makes certain that security features are considered
               early and incorporated into each building's design. This
               coordination should reduce the need for making costly changes
               later or creating security risks that are impossible to mitigate
               later. The coordination has also led to discussions about
               including physical security data, such as data on compliance with
               ISC standards and security levels, in DHS's Real Property
               Information System. Coordination also allows DHS's physical
               security officials to provide input upfront about how real
               property decisions affect physical security. For example, if DHS
               decides to rent one floor of a particular office building,
               consideration must be given to the consequences of DHS's presence
               there. DHS often ends up needing to secure the entire building,
               which can be costly, or DHS cannot afford to secure the entire
               building, which may pose a security risk. DHS currently occupies
               about 2,400 office buildings that are leased or owned, so there is
               considerable potential for security savings if security is
               considered upfront.

    ^39GAO, Homeland Security: Further Actions Needed to Coordinate Federal
    Agencies' Facility Protection Efforts and Promote Key Practices,
    [69]GAO-05-49 (Washington, D.C.: Nov. 30, 2004).

    ^40OMB has directed DHS to move the chairman of the Interagency Security
    Committee in fiscal year 2008 to DHS's Office of the Under Secretary for
    National Protection and Programs.

               DHS has also improved internal security coordination in other
               ways. For example, DHS has formed the Facility Security
               Commodities Council, which meets once every 2 months to discuss
               security issues and share information, such as which companies are
               providing the best contract guard service, what to include in a
               standard contract for guard forces, or how to add on to security
               equipment contracts to get security equipment such as X-ray
               machines less expensively. Information sharing and coordination
               among organizations are crucial to producing comprehensive and
               practical approaches and solutions to address terrorist threats
               directed at federal facilities. Our work showed a broad
               consensus--on the basis of prior GAO and Inspector General work
               and information from agencies and the private sector--that by
               having a process in place to obtain and share information on
               potential threats to federal facilities, agencies can better
               understand the risk they face and more effectively determine what
               preventive measures should be implemented. Establishing a means of
               coordinating and sharing information is crucial to determining the
               appropriate amount of security for facilities.

               DHS also plays an important role in developing guidance for
               federal agencies and its own components to follow in protecting
               federal facilities against the threat of terrorism through ISC,
               which DHS chairs. ISC, which includes representatives of all the
               major property-holding agencies and was established after the
               bombing of the Oklahoma City federal building in 1995, has a range
               of governmentwide responsibilities relating to protecting
               nonmilitary facilities. These generally involve developing
               policies and standards, ensuring compliance and overseeing
               implementation, and sharing and maintaining information. To ensure
               that DHS itself follows ISC guidance, draft DHS Management
               Directive 11001 formalizes the requirement that DHS components
               meet ISC standards.^41 The compliance reporting process will begin
               in 2008. For example, beginning in 2008, each component must
               report how many of its buildings are in compliance with Management
               Directive 11001 and, if not, it must provide an explanation. DHS
               has also recently developed a compliance checklist, which provides
               a baseline of basic physical security considerations that DHS's
               components can use in determining what facility protection
               activities they need to undertake.

    ^41Management directives for DHS are under a top to bottom review by order
    of the Deputy Secretary. The issuance of Management Directive 11001 is
    dependent on the results of the review.

               DHS Has Not Yet Fully Implemented Risk Management Practices for Its
    			  Facilities

               Despite these improvements and DHS's prominent role in facility
               protection governmentwide, most DHS components have not fully
               implemented risk management for facility protection, which we have
               recommended and DHS has advocated for other agencies, or the
               components use risk management tools that DHS officials said have
               limited capabilities. DHS components are in the process of
               determining risk management methodologies to assist in
               prioritizing resources. Some components, such as ICE, currently
               use a risk management tool with capabilities that, according to
               FPS officials, are not as robust as necessary to fully prioritize
               security needs. FPS, located within ICE and responsible for
               protecting thousands of federal facilities, conducts security risk
               assessments for ICE and for all DHS space leased through GSA using
               risk management software. FPS officials said that this tool is not
               sophisticated enough to effectively allow them to prioritize
               physical security improvements building by building. FPS officials
               have three primary concerns about the current risk management
               tool. First, current risk management software does not allow FPS
               to compare risks from building to building so that security
               improvements to buildings can be prioritized. Second, current risk
               assessments need to be categorized more precisely. Too many
               assessments are simply categorized as high or low, which does not
               allow for a refined prioritization of security improvements.
               Third, the risk management tool does not allow for tracking the
               implementation status of security recommendations based on
               assessments. CIS also uses FPS's risk management tool to conduct
               its risk assessments. According to FPS, FPS is leading the
               development of a new software tool that will meet obligations
               under the National Infrastructure Protection Plan. In partnership
               with other DHS components, including CBP and FEMA, this risk
               assessment and management program will be made available to all
               government entities in need of a risk assessment methodology. FPS
               expects this tool to be available by fiscal year 2008.

               Some components are closer to fully implementing risk management
               practices to prioritize resources than others. For example, the
               Coast Guard has an initiative under way to tier its assets into
               categories to help prioritize facility protection resources for
               the assets that are most critical to DHS's core mission. The Coast
               Guard has been conducting vulnerability assessments within each
               tier for the past year and a half. Components such as FEMA and TSA
               do not use formal risk assessment tools to prioritize security
               resources across the component. FEMA, for example, prioritizes
               security resources through the judgments of security officials
               using criteria such as the seriousness of the security issue, the
               location, and the resources available at the time. TSA noted that
               although it does not use a formal risk assessment tool to
               prioritize resources across the department, it has conducted a
               risk assessment for its headquarters and Transportation Security
               Operations Center, based on threat and vulnerability assessments
               and incorporated additional appropriate security measures across
               its facilities.

               DHS headquarters security officials said that while DHS components
               do not have a formal, common tool to conduct risk assessments to
               prioritize funding for facility protection, components can rely on
               ISC criteria and DHS's June 2006 National Infrastructure
               Protection Plan for risk management guidance.^42 ISC places
               federal facilities in five different categories (with
               corresponding security standards) based on factors such as
               building size, agency mission and function, tenant population, and
               level of public access. For example, a level II building is
               defined as having between 2,500 to 80,000 square feet and between
               11 and 150 employees engaged in routine activities with a moderate
               level of public access. A level IV building is defined as
               occupying more than 150,000 square feet of space and housing more
               than 450 employees with a "high volume of public contact." At each
               level of security, ISC specifies minimum security standards that
               must be met.^43 The National Infrastructure Protection Plan risk
               management framework establishes a process for combining
               consequence, vulnerability, and threat information to produce a
               comprehensive, systematic, and rational assessment of risk that
               drives protection activities for a component. According to senior
               DHS headquarters security officials, each component within DHS
               must develop its own risk assessment program and ensure that they
               are aligned with its mission and needs.

               A more robust risk management approach can help DHS make decisions
               systematically and is consistent with the National Strategy for
               Homeland Security and DHS's strategic plan, which have called for
               the use of risk-based decisions to prioritize DHS's resource
               investments in homeland security-related programs. Likewise, the
               President and Congress have widely supported a risk management
               approach for homeland security, and the Secretary of Homeland
               Security has made risk management the centerpiece of departmental
               policy. Allocating resources using risk management is a systematic
               and analytical process to consider the likelihood that a threat
               will endanger an asset, such as real property, and identify,
               evaluate, select, and implement actions that reduce the risk or
               mitigate the consequences of an event. Although risk management
               principles can be applied to facility protection in various ways,
               our past work has shown that most risk management approaches
               generally involve identifying potential threats, assessing
               vulnerabilities, identifying the assets that are most critical to
               protect, in terms of mission and significance, and evaluating
               mitigation alternatives for their likely effect on risk and their
               cost. In short, risk management is useful for ensuring that
               security resources are directed where they are needed most. Our
               past work has also shown that there was consensus in the security
               community--including GAO, inspectors generals, agencies, national
               experts, and the private sector--that using risk management
               practices provides the foundation for an effective facility
               protection program.

    ^42The National Infrastructure Protection Plan provides the overarching
    approach for integrating the nation's many critical infrastructure and key
    resource protection initiatives into a single national effort.

    ^43Under its Action Plan for 2007 and 2008, the Interagency Security
    Committee has a work group updating the physical security standards for
    existing buildings, which includes updates to building levels I to V and
    the Department of Justice's Vulnerability Assessment of Federal
    Facilities, published in 1995.

               Some agencies we have reported on use more robust methods of risk
               management. For example, as we reported in June 2005, the
               Department of the Interior (Interior) has developed a uniform risk
               assessment and ranking methodology called the National Monuments
               and Icons Assessment Methodology.^44 According to information from
               Interior, this methodology is specifically designed to quantify
               risk, identify needed security enhancements, and measure
               risk-reduction benefits at icons and monuments. The National
               Monuments and Icons Assessment Methodology has a consequence
               assessment phase and a risk assessment phase. During the
               consequence assessment phase, there is an asset tier ranking
               process, in which each asset's iconic significance is subjectively
               determined. Specific attack scenarios--involving threats such as
               chemical/biological agents, aircraft, or improvised explosive
               devices--are used to evaluate security at each asset and score
               attack consequences. Consequence categories include casualties,
               economic impact, and length of disruption. During the risk
               assessment phase, Interior uses the methodology to determine the
               effectiveness of existing security systems for preventing or
               mitigating the specified attack scenarios. Using risk values
               calculated from this comparison, Interior assigns asset risk
               ratings of high, medium, or low, and formulates specific
               mitigation recommendations. Before developing this approach,
               Interior did not have a uniform, comprehensive risk management
               approach for icons and monuments. It relied instead on the
               judgment of senior officials in determining where resources should
               be directed, and the risk assessments completed at individual
               sites were done by a number of external experts using different
               methodologies.

    ^44GAO, Homeland Security: Actions Needed to Better Protect National Icons
    and Federal Office Buildings from Terrorism, [70]GAO-05-790 (Washington,
    D.C.: June 24, 2005).

               DHS Has an Incomplete Set of Facility Protection Performance
    			  Measures to Help Ensure Agency Accountability for Meeting Program
    			  Goals

               Under HSPD-7, the Government Facilities Sector, for which ICE is
               responsible, is tasked with establishing performance measure
               guidance for federal, state, and local governments so that they
               can better assess the effectiveness of their facility protection
               programs. ISC is working with the Government Facilities Sector to
               develop this performance measure guidance. It is expected that
               this guidance will be complete at the end of fiscal year 2007.
               This guidance is designed to measure agency-level performance; it
               does not address facility-specific performance measures.

               Even though DHS has a leadership role in this area, none of its
               components had a fully established set of agency- and facility-
               specific physical security performance measures to evaluate the
               effectiveness of physical security programs at the time of our
               review. Some components are in the process of developing measures
               or have an incomplete set. For example, TSA does not have a set of
               performance measures to fully evaluate how it protects its
               facilities, but said it was currently considering using
               performance measures such as the number of unauthorized people who
               enter a building or the number of people who are blocked at
               entrances. TSA also noted that it considers its facility
               protection to be successful because it has no known breach in its
               headquarters and Transportation Security Operations Center. FEMA
               officials told us that in order to assess its progress in
               improving security, the agency needs to develop performance
               measures that allow it to track security assessments and
               recommendations. FPS, located within ICE, currently has a number
               of performance measures to assess facility protection
               effectiveness, but noted that the measures could be improved. FPS
               said that it tracks measures such as whether building
               countermeasures are working as designed, whether countermeasures
               are deployed on time, and how quickly FPS responds to calls for
               service. FPS officials said that upgraded risk assessment software
               would aid them in tracing facility protection performance
               measures. For example, FPS said that it would like to better track
               how long it takes for its MegaCenters,^45 which are FPS's regional
               emergency call centers, to respond to alarm calls. FPS is tracking
               call response times to some degree now but is unable to
               distinguish between major and minor calls, which officials said
               can create misleading data. In September 2006, we reported that
               performance measures for assessing MegaCenter operations are not
               always clearly stated or measurable and do not address
               governmentwide priorities of efficiency, cost of service, and
               outcome--which are among the attributes of successful performance
               measures that we have identified.^46 Other DHS components noted
               that some facility protection efforts can be difficult to measure.
               For example, CIS and TSA noted that it is difficult to demonstrate
               when an agency has stopped or deterred an attempted unauthorized
               entrance to a building with security countermeasures or best
               practices because it is typically not possible to know when such
               unauthorized attempts occur.

               Performance measurement can ensure accountability for achieving
               broad program goals and improving security at the individual
               facility level. At the agency level, we have reported that tying
               security goals to broader agency mission goals can help federal
               agencies measure the effectiveness and ensure the accountability
               of their security programs. Our work has shown a consensus among
               various stakeholders that performance measurement is a key
               practice that agencies should follow. Using performance
               measurement for facility protection is a practice that--according
               to our review--is in the early stages of development at DHS at the
               agency- and facility-specific levels. In May 2006, we reported on
               performance measures that organizations outside the U.S.
               government--including private-sector firms, state and local
               governments, and foreign government agencies--use to help improve
               the security of facilities, inform risk-management and
               resource-allocation decisions, and hold security officials and
               others in their organizations accountable for security
               performance.^47 These included output measures, such as the
               average time needed to process background screenings, and outcome
               measures, such as the change in the total number of security
               incidents relating to thefts, vandalism, and acts of terrorism.
               For example, an agency in Australia monitors an outcome
               measure--the impact of additional security expenditures on a
               facility's risk rating--while controlling for existing security
               enhancements that mitigate the risk, such as the number of guard
               patrols and the adequacy of access control systems (e.g.,
               electronic locks). In another example, each business line in one
               financial services organization conducts security compliance
               reviews of its facilities, including confirming the presence of
               required key security equipment and determining whether staff are
               following security policies.

    ^45FPS MegaCenters provide three primary security services: alarm
    monitoring, radio monitoring, and dispatching of FPS police officers and
    contract guards.

    ^46GAO, Homeland Security: Federal Protective Service Could Better Measure
    the Performance of Its Control Centers, [71]GAO-06-1076 (Washington, D.C.:
    Sept. 29, 2006).

    ^47GAO, Homeland Security: Guidance and Standards Are Needed for Measuring
    the Effectiveness of Agencies' Facility Protection Efforts, [72]GAO-06-612
    (Washington, D.C.: May 31, 2006).

               FPS Faces Ongoing Challenges

               FPS protects buildings under GSA's control, including those where
               DHS is a tenant. After the creation of DHS, FPS moved from GSA to
               the new department effective March 1, 2003. In fiscal year 2007,
               FPS has 1,208 full-time employees, including special agents,
               police officers, inspectors, and support personnel.^48
               Approximately 15,000 contract security guards support FPS's
               workforce. FPS is required to protect about 8,800 buildings under
               GSA's control, many of which are leased by DHS. Even though it has
               the authority, FPS does not protect any DHS buildings outside GSA
               space because it lacks resources. Most DHS components rely on
               security arrangements that existed before DHS was formed in 2003.
               The demands of its facility protection responsibilities to protect
               GSA facilities challenge FPS. FPS charges a basic security fee for
               services such as law enforcement and regular building security
               assessments, but this fee does not adequately cover the costs of
               the basic security services that FPS is required to provide. One
               of the tasks that FPS must conduct in its role as a protector of
               federal buildings is building security assessments. Building
               security assessments are a type of security evaluation to
               determine how susceptible a facility is to various forms of threat
               or attack. These assessments include countermeasures to reduce
               threats and thereby decrease vulnerability.^49 DHS officials said
               that some components conduct their own building security
               assessments over and above the security assessment conducted by
               FPS. DHS components sometimes conduct their own assessments
               because FPS's assessments are not always timely or of sufficiently
               high quality.

    ^48The President's fiscal year 2008 budget request provides for 950
    full-time employees.

    ^49Security assessments for existing buildings are conducted on a cyclical
    schedule based on the buildings' designated Department of Justice security
    level--every 2 years for Level 4; every 3 years for Level 3, and every 4
    years for Levels 1 and 2. FPS uses Federal Security Risk Management
    software to assist in developing building security assessments.

               Senior DHS physical security officials said that FPS does not have
               the staff resources to conduct all of these regular assessments in
               a timely manner, but these officials also say problems with the
               quality of the assessments are most likely attributable to a lack
               of quality training for FPS personnel in conducting the
               assessments. Conducting extra assessments wastes resources, while
               not completing assessments in a timely fashion imperils the
               security of DHS facilities. FPS agreed that it does not have an
               adequate number of building security assessors for the number of
               buildings in its inventory. FPS estimated that there are about 450
               inspectors for about 8,800 GSA buildings that FPS is required to
               protect. FPS said that in some areas, especially in the western
               United States, a single inspector must cover all of the buildings
               over a wide area. FPS said that some inspectors are responsible
               for as many as 50 buildings, and each inspection can take 1 week
               or more. FPS noted that inspectors have responsibilities other
               than inspections, such as teaching security training classes,
               crime prevention, and law enforcement patrol and response.
               However, because of the large geographic areas some inspectors are
               required to cover, they must spend a significant amount of time
               and travel funds performing inspections. According to FPS, the
               time it takes to conduct assessments, travel, and perform other
               duties can make it difficult to conduct timely inspections. FPS
               believes that an increased number of inspectors in some regions
               would help save money in the long run by cutting travel
               expenses.^50

               In order to solve this problem, senior DHS physical security
               officials suggested that DHS establish consistent building
               security assessment training. This training would provide a core
               basis for conducting assessments across DHS, regardless of whether
               FPS or the components conduct them and would help ensure that
               assessments are completed consistently. One senior DHS security
               official noted that GSA has a 4 to 5 week training course for
               procurement that might serve as a model for how DHS could conduct
               the assessment training. DHS's Federal Law Enforcement Training
               Center recently completed a feasibility study that proposed the
               creation of a standard physical security training program for all
               federal agencies involved in physical security. Physical security
               assessment training would be part of this physical security
               training program. Security assessment training would help ensure
               that assessments are completed consistently and do not need to be
               conducted twice.^51

    ^50In commenting on our report, ICE officials noted that FPS was
    transitioning to an inspector-based workforce that will increase the
    number of inspectors assigned to the protection of federal facilities. FPS
    will use a risk-based staffing model to assign inspectors to the highest
    risk facilities.

    ^51In commenting on our report, ICE noted that FPS plans to revise the
    Physical Security Academy curriculum in fiscal year 2008 to support
    training on the use of a new Risk Assessment and Management Program. In
    addition, FPS is partnering with the DHS Office of Security and Federal
    Law Enforcement Training Center in an effort to develop a standardized
    physical security training program for all federal agencies, drawing in
    part upon the experiences of the FPS Physical Security Academy.

               As we reported in July 2004, maintaining a means of funding FPS
               that will ensure adequate protection of federal facilities and
               allow FPS to meet homeland security responsibilities is a
               challenge. DHS maintains that the funding FPS receives from basic
               security fees is not nearly enough for FPS to provide adequate
               basic security service.^52 FPS reported in November 2006 that it
               faced a funding shortfall of $60 million. FPS officials said that
               FPS cannot always provide basic security services requested by
               some DHS and other non-GSA entities because FPS lacks funding for
               additional employees. For example, FPS has received requests for
               security services from Indian Reservation Hospitals and the Social
               Security Administration that it was not able to fulfill.

               Compounding the challenges FPS faces, FPS officials noted that DHS
               components are often unable to implement recommendations in FPS
               assessments. For example, CIS is aware that it needs bollards and
               garage and driveway barriers at its headquarters building, but it
               has not been able to prioritize funding to implement these
               measures. In other instances, FPS noted that it may conduct a
               security assessment for a component, but because of a lack of
               funding or a lag in funding, recommendations are not implemented
               for 18 to 24 months. That leaves a component vulnerable for as
               long as 2 years, and by that time, the recommendation may have
               changed in priority. In addition, some components, such as FEMA,
               CIS, and S&T, said that the response time and quality of FPS's
               security assessments need improvement, partially because of the
               demands placed on FPS by its expanding mission. Senior DHS
               physical security officials said that FPS needs to redefine its
               role and core mission to focus on work that it can handle, given
               its budget and the training and qualifications of its employees.
               In response to our recommendation of almost 3 years ago, FPS is
               developing a transformation plan, although this plan has not been
               finalized.^53

    ^52FPS provides three categories of security services: (1) basic security,
    (2) building-specific security, and (3) tenant-specific security. Basic
    security is provided by DHS (ICE/FPS) to GSA-controlled properties and
    includes law enforcement, such as building alarm monitoring, and physical
    security, such as building security assessments. Basic security fees are
    included in fees paid directly to FPS on a cost-per-square foot basis. The
    basic security fee is currently capped at 39 cents per square foot,which
    DHS and FPS maintain is not nearly enough to cover costs for basic
    security services. The President's fiscal year 2008 budget proposes to
    increase the current basic security from 39 cents to 57 cents per square
    foot. Building-specific security is provided in addition to the basic
    security provided in a particular building as a result of DHS building
    security assessment recommendations. Examples of building-specific
    security measures include contract guards, security equipment, and
    security fixtures. Agencies pay for these security services out of their
    own budget if they determine that they want them. Tenant-specific security
    includes additional reimbursable services and equipment for agencies to
    meet their HSPD-12 requirements, which include card readers and contractor
    background suitability determinations. Most of FPS's funding comes from
    the building-specific and tenant-specific security that it provides.

    ^53GAO, Homeland Security: Transformation Strategy Needed to Address
    Challenges Facing the Federal Protective Service, [73]GAO-04-537 ,
    (Washington, D.C.: July 14, 2004.)

               DHS Has Not Developed a Physical Security Plan As Required under HSPD-7

               DHS clearly faces a number of challenges related to the protection
               of its own facilities but has not developed a physical security
               plan. The challenges DHS faces--such as implementing risk
               management, measuring performance, and funding needed security
               enhancements--are similar to those faced by many agencies. HSPD-7
               recognized the need for an organized, carefully considered
               approach to protecting physical assets, including facilities, and
               required that all federal departments and agencies develop
               physical security plans. Specifically, HSPD-7 states:

               "By July 2004, the heads of all Federal departments and agencies
               shall develop and submit to the Director of the OMB for approval
               plans for protecting the physical and cyber critical
               infrastructure and key resources that they own or operate. These
               plans shall address identification, prioritization, protection,
               and contingency planning, including the recovery and
               reconstitution of essential capabilities."

               DHS officials believe that the 2006 National Infrastructure
               Protection Plan, which provides an overarching approach for
               integrating the nation's many critical infrastructure and key
               resource protection initiatives into a single national effort,
               serves as DHS's physical security plan. However, the National
               Infrastructure Protection Plan does not address the
               "identification, prioritization, protection, and contingency
               planning, including the recovery and reconstitution of essential
               capabilities," specifically for DHS-occupied facilities. Having
               such a plan would be particularly useful for DHS and its
               stakeholders--including OMB and Congress--in devising a course of
               action for protecting DHS facilities and making associated funding
               trade-offs. Furthermore, it is imperative that DHS, as the
               government's central agency for protection against terrorism, lead
               by example in formulating how the department itself is approaching
               the range of difficult challenges that agencies across government
               also face in the facility protection area.

    			  Conclusions

               Like other agencies, DHS faces real property challenges, including
               excess and deteriorating property, data quality issues, reliance
               on costly leasing, and the threat of terrorism against its
               facilities. DHS also faces funding and budgetary limitations,
               which are often at odds with businesslike decisions. Given the
               size and diversity of DHS's portfolio, the challenges it faces,
               and the importance of DHS's mission, it is critical that DHS
               implement the requirements of the President's real property
               initiative, which DHS has made progress in doing recently. As
               DHS's efforts to strategically manage its property progress,
               greater emphasis on long-term capital planning, which needs
               improvement, could help DHS make the most of limited resources and
               make timely and effective capital acquisitions. It would be
               particularly beneficial for DHS to link such capital planning
               efforts--such as the development of a departmentwide long-term
               capital plan--to its asset management planning efforts under the
               real property initiative, because DHS inherited the real property
               held by its components' former agencies and is faced with
               realigning these assets in the coming years. Shortcomings in the
               capital planning area have clear implications for the
               administration's real property initiative. Real property is one of
               the major types of capital assets that agencies require. Since
               asset management plans developed under the real property
               initiative are intended to guide agencies' year-to-year real
               property management actions, capital plans could provide a useful
               longer term context for agencies' real property decisions.

               DHS faces a number of significant challenges related to its
               planned consolidation of Washington, D.C., headquarters operations
               on the West Campus of St. Elizabeths, which is a National Historic
               Landmark District. DHS believes that by consolidating most of its
               headquarters operations, greater efficiencies would result,
               mission integration would occur, and the security of its
               facilities could be better managed. The cost of the consolidation
               could be at least $3.26 billion, according to GSA. GSA has
               conducted some analysis to justify developing the West Campus of
               St. Elizabeths to consolidate DHS's headquarters. However, GSA and
               DHS lack a more comprehensive cost analysis that would improve
               transparency and in the context of all the other factors--such as
               programmatic and security goals--would help decision makers,
               including Congress, better understand the cost trade-offs of
               developing a variety of densities and configurations at the site
               and assess the merits of the consolidation from the perspective of
               the federal government as a whole.

               In the area of security for the buildings DHS itself occupies, DHS
               has implemented a number of management- and building-specific
               actions. However, DHS has not fully implemented risk management
               for facility protection across all of its components, has not
               developed a full set of performance measures, and has not
               developed a physical security plan as is required under HSPD-7.
               DHS has also lagged in developing a transformation strategy to
               address problems at FPS, which we recommended almost 3 years ago.
               With its critical role in protecting federal real property against
               the threat of terrorism and other criminal activity and given its
               expanding mission and funding and staffing shortfalls, FPS could
               benefit from a transformation strategy that effectively makes the
               case for what type of organization it believes it should become
               and provides a road map for getting there. We made this
               recommendation previously in July 2004. FPS has drafted, but not
               finalized, such a plan. Although the challenges DHS faces are
               similar to those other agencies have faced, it is critical that
               DHS lead by example in protecting its own facilities against the
               threat of terrorism.

    			  Recommendations for Executive Action

               We recommend that the Secretary of Homeland Security take the
               following two actions:

               o In order to make the most of limited resources and to make
               timely and effective capital acquisitions that will result in a
               decrease of long-term real property costs, the Secretary should
               use the Office of Management and Budget's capital planning
               principles to link DHS's long-term capital needs with the asset
               management planning activities required under the President's real
               property initiative.
               o In order to lead by example by formulating how the department
               itself is approaching the range of difficult challenges that
               agencies across government face in the facility protection arena,
               the Secretary should develop a physical security plan for DHS, as
               required by HSPD-7, that addresses DHS's plans to fully implement
               risk management and develop performance measures for facility
               protection.

               We recommend that both the Secretary of Homeland Security and
               Administrator of the General Services Administration take the
               following action:

               o In order to better support DHS's preferred course of action at
               St. Elizabeths, the Secretary and Administrator should jointly
               perform a comprehensive analysis of the costs, from the
               perspective of the federal government as a whole, that would
               result if DHS headquarters operations are consolidated at St.
               Elizabeths, and compare these costs to the costs of other
               alternatives at the St. Elizabeths campus.

               Agency Comments and Our Evaluation

               We provided a draft of this report to DHS, GSA, NCPC, the Advisory
               Council on Historic Preservation, the U.S. Commission of Fine
               Arts, and the D.C. Office of Planning. DHS concurred with our
               recommendations to link DHS's long-term capital needs with its
               asset management planning activities and to develop a physical
               security plan, but it only partially agreed with our
               recommendation to develop a comprehensive cost analysis, from the
               perspective of the government as a whole, for the St. Elizabeths
               site. DHS's comments are discussed below and are contained in
               appendix III, along with our specific comments on issues raised by
               DHS. DHS also provided technical clarifications, which we
               incorporated, where appropriate. GSA partially agreed with the
               findings related to the potential development of St. Elizabeths,
               but it did not concur with our recommendation that GSA and DHS
               perform a comprehensive analysis of the costs to consolidate DHS's
               headquarters at the St. Elizabeths site. GSA's comments are
               discussed below and are contained in appendix IV, along with our
               specific comments on issues raised by GSA. GSA also provided
               technical clarifications, which we incorporated, where
               appropriate. Comments received from NCPC, the Advisory Council on
               Historic Preservation, the U.S. Commission of Fine Arts, and the
               D.C. Office of Planning are contained in appendixes V through
               VIII, respectively, and are discussed below in more detail. NCPC,
               the Advisory Council on Historic Preservation, the D.C. Office of
               Planning, and the U.S. Commission of Fine Arts commented on the
               St. Elizabeths portion of the report. NCPC said that the document
               is an accurate reflection of NCPC's concerns and understanding of
               the project. NCPC also emphasized that all comments in the report
               are those of staff and not of NCPC itself. The D.C. Office of
               Planning generally agreed with the findings of the report and
               provided additional information, which we have incorporated in
               this report as appropriate. The U.S. Commission of Fine Arts did
               not comment on our recommendation related to DHS's consolidation
               and provided additional information, which we incorporated as
               appropriate. The Advisory Council on Historic Preservation agreed
               with our recommendation that DHS and GSA jointly perform a
               comprehensive cost analysis for the variety of alternatives at the
               St. Elizabeths site and provided additional information, which we
               incorporated as appropriate.

    			  Evaluation of DHS and GSA Comments

               DHS concurred with our recommendations to link DHS's long-term
               capital needs with its asset management planning activities and to
               develop a physical security plan, but it only partially agreed
               with our recommendation to develop a comprehensive cost analysis
               for the St. Elizabeths site. According to GSA and DHS, GSA is
               actively engaged in determining the overall real property costs
               for DHS in the Washington, D.C., area. However, DHS stated that
               the recommendation ignores the fact that DHS cannot operate
               effectively, as currently housed, and believes that consolidation
               is a requirement, not a desire. DHS also stated that it will not
               renew a lease after it expires unless it consolidates functions,
               improves efficiencies, eliminates duplication and is economically
               feasible. DHS further stated that our draft report did not
               acknowledge that the "status quo" scenario is not acceptable. GSA
               did not concur with our recommendation regarding a comprehensive
               cost analysis. GSA stated that such an analysis would be
               misleading and ignores the fact that DHS's current housing
               configuration is unacceptable. GSA also stated that DHS would not
               renew leases in place, but that the department would seek to
               consolidate its headquarters functions through another vehicle.

               We agree that DHS's current housing configuration is not optimal
               and did not suggest that the status quo should be maintained.
               Instead, our report intends to convey our belief, on the basis of
               work done for this review, that Congress needs better information
               on the costs associated with redeveloping St. Elizabeths--for a
               range of alternatives and from the perspective of the government
               as a whole--in order to fund and oversee a construction
               undertaking of this magnitude. Understanding the costs associated
               with the "status quo," which would involve renewing current leases
               and finding other housing solutions, would serve as an important
               baseline for comparison. Having a comprehensive analysis of the
               costs of various development scenarios at the St. Elizabeths site,
               including DHS's and GSA's preferred development of 4.5 million
               square feet of office space (plus parking) would improve
               transparency and help Congress better understand the costs and
               operational trade-offs of development at various densities and
               configurations at the site. We are concerned that DHS and GSA will
               only analyze the 4.5 million square foot options. We believe that
               the merits of other options could be evaluated, given the concerns
               expressed by key stakeholders regarding the DHS- and GSA-preferred
               density level and the fact that funding availability for the
               project as a whole has not been determined by Congress.

               If anything less than the DHS- and GSA-preferred alternative is
               unacceptable, as DHS and GSA have maintained, a comprehensive
               analysis could be the vehicle for making this case to Congress. In
               this regard, an assessment of DHS's current configuration would
               help Congress fully understand why the status quo, or lesser
               densities than DHS and GSA are pursuing, are unacceptable. The
               analysis could also help stakeholders understand the long-term
               costs to the federal government as a whole--whether incurred by
               DHS, GSA, or the Department of Health and Human Services, as well
               as the District of Columbia--and how these long-term costs would
               vary depending on the amount of square footage developed at the
               St. Elizabeths site.

               It is also important to note that in the report, in the interest
               of being fair and balanced, we describe the arguments of DHS and
               GSA for consolidation, while also describing the concerns of
               stakeholders, so that Congress can understand the various
               viewpoints. We are also fully aware, as GSA stated in its
               comments, that GSA has conducted some analysis to justify
               developing the West Campus of St. Elizabeths to consolidate DHS's
               headquarters. We also agree that use of the St. Elizabeths site
               for DHS's headquarters would make use of previously underutilized
               federal property and that excess and underutilized property has
               been a GAO concern in previous reports. However, as discussed
               above, a more comprehensive cost analysis--in the context of all
               the other factors, such as programmatic and security goals--would
               help decision makers better understand the cost trade-offs of
               developing a variety of densities and configurations at the site.

               After sending us its official comments, GSA revised its estimate
               of the cost to develop St. Elizabeths to $3.26 billion with GSA
               incurring $1.94 billion of costs and DHS incurring $1.32 billion
               of costs. GSA also provided updated transportation improvement
               estimates to streets, roads, and highways in the vicinity of St.
               Elizabeths to support the federal redevelopment project. Updated
               total costs for transportation improvements range from $27 million
               to $40 million, of which DDOT's costs range between $4 million and
               $14 million, according to GSA. GSA has budgeted for the difference
               between total costs and what DDOT will pay, based on current GSA
               estimates. For the purposes of this report, we used GSA's most
               recent estimates. However, we believe that these changing cost
               estimates, and the confusion about them that we encountered,
               demonstrate the value of a comprehensive cost analysis that would
               improve transparency and allow for more informed decision making.

               We also examined the additional information that DHS and GSA
               provided to us after agency comments. We incorporated this new
               information as appropriate, but it did not change our
               recommendation that DHS and GSA should jointly conduct a more
               comprehensive cost analysis.

    			  Evaluation of the D.C. Office of Planning Comments

               The D.C. Office of Planning agreed with our recommendation calling
               for a comprehensive analysis of the cost to develop St. Elizabeths
               under various development scenarios for the St. Elizabeths. The
               Office of Planning also appreciated the thorough and thoughtful
               assessment of the numerous effects that arise from the potential
               consolidation of DHS operations on the West Campus of St.
               Elizabeths Hospital. It also provided additional comments. For
               example, the Office of Planning clarified that it supported
               federal development at the St. Elizabeths West Campus but is
               concerned with the magnitude of the project and its effects. The
               Office of Planning also expressed concern that GSA is not
               considering a development alternative of 2.0 to 2.5 million square
               feet of office space that aligns with the views of most of the
               stakeholders and consulting parties. The office is also concerned
               about how to control growth at the St. Elizabeths site once an
               agreed upon square footage is established. Lastly, the office said
               that eliminating the lowest density alternatives--and failing to
               explore all of the feasible alternatives--is contrary to both the
               expressed intention of the Master Plan document itself and to the
               letter and spirit of both the NEPA and the regulations
               implementing Section 106 of the National Historic Preservation
               Act. See appendix V for the full comments provided by the D.C.
               Office of Planning.

    			  Evaluation of NCPC Comments

               NCPC, in a letter from its Executive Director, said that our
               report is an accurate reflection of NCPC's concerns and
               understanding of the project. NCPC also noted that it has not yet
               had the opportunity to formally review and comment on the St.
               Elizabeths project. As a result, all comments are those of the
               staff and not of NCPC itself. See appendix VI for the full
               comments provided by NCPC.

               Evaluation of the Advisory Council on Historic Preservation Comments

               The Advisory Council on Historic Preservation (Council) agreed
               with our recommendation that DHS and GSA jointly perform a
               comprehensive cost analysis for a variety of alternatives at the
               St. Elizabeths site. The Council letter stated that insufficient
               information has been provided to demonstrate how much cost savings
               may be realized by DHS through the redevelopment of the St.
               Elizabeths campus in comparison to other alternatives. The Council
               letter also stated that many other consulting parties continue to
               express this concern in the context of the National Historic
               Preservation Act consultation process and that further
               justification and explanation would facilitate more effective
               consultation. The Council letter also stated that the report
               adequately documents the concerns of stakeholders and the
               challenges faced in addressing these concerns. Lastly, the Council
               letter stated that it would like to see further discussions on the
               importance of the National Historic Landmark District and the
               criteria that the National Park Service utilizes for determining
               the site's historic significance. See appendix VII for the full
               comments provided by the Advisory Council on Historic
               Preservation.

    			  Evaluation of U. S. Commission of Fine Arts Comments

               The U.S. Commission of Fine Arts (Commission) did not comment on
               our recommendations, but said that our report did not fully
               discuss the value of the St. Elizabeths property. The Commission
               acknowledged that we discussed the impact of the DHS consolidation
               on traffic, the cost of providing public services, and the
               economic revitalization of the community. However, the Commission
               said that we did not adequately discuss the site's historic and
               cultural value related to the history of the treatment of mental
               illness and as a hospital site during the Civil War, the
               architectural value of many buildings, or the ecological value of
               the site, including serving as a habitat for endangered species.
               We incorporated a discussion of these factors into our report. The
               Commission also stated that other values of St. Elizabeths include
               its value as potentially positive generator of urban development
               and its stunning views. We believe that we captured these points
               with our statement that some community leaders support locating
               federal development at St. Elizabeths as an economic driver and
               magnet for additional development and revitalization and our
               discussion of the scenic views of the District being available
               from the site. See appendix VIII for the full comments provided by
               the U.S. Commission of Fine Arts.

               As agreed with your office, unless you publicly announce the
               contents of this report earlier, we plan no further distribution
               until 30 days from the report date. At that time, we will send
               copies to the Secretary of DHS, the Administrator of GSA, the
               Chairman and Executive Director of NCPC, the Chairman of the
               Advisory Council on Historic Preservation, the Secretary of the
               U.S. Commission of Fine Arts, and the Director of the D.C. Office
               of Planning. Additional copies will be sent to interested
               congressional committees and the Director of OMB. We will also
               make copies available to others upon request, and the report will
               be available at no charge on the GAO Web site at
               [61]http://www.gao.gov .

               If you have any questions about this report, please contact me at
               (202) 512-2834 or at [62]goldsteinm@gao.gov . Contact points for
               our Offices of Congressional Relations and Public Affairs may be
               found on the last page of this report. GAO staff who made key
               contributions to this report are listed in appendix IX.

               Sincerely yours,

               Mark L. Goldstein
    			  Director, Physical Infrastructure Issues

    			  Appendix I: Scope and Methodology

               To answer our first question, we obtained and analyzed Department
               of Homeland Security (DHS) and General Services Administration
               (GSA) real property data from DHS's Real Property Information
               System, DHS's centralized real property database and GSA's Federal
               Real Property Profile, its centralized real property database. We
               also interviewed (1) DHS real property officials from
               headquarters, (2) DHS officials responsible for DHS's Real
               Property Information System, (3) a contractor that is helping DHS
               develop its real property inventory, and (4) GSA officials
               responsible for GSA's Federal Real Property Profile. In addition
               to assessing the information we obtained about the data from these
               interviews, we conducted electronic testing of the data. These
               tests included logic tests, tests for duplicates, and checking
               frequencies and values for outliers. It was during this assessment
               and our interviews that we discovered deficiencies with some of
               the data elements. For example, some DHS components are using data
               proxies for some data elements--such as condition index, operating
               costs, and restrictions--until these components can develop more
               robust data measures. We do not present data on any of these data
               elements--which DHS acknowledges it is working to improve--in the
               body of the report. However, we determined that the DHS and GSA
               real property data (such as total number of buildings and
               structures) that we are presenting in the report were sufficiently
               reliable for the purposes of our review.

               To answer question 2, we interviewed DHS real property officials
               from headquarters and DHS's various components about challenges
               and used Executive Order 13327, which implements the real property
               initiative of the President's Management Agenda, as the basis for
               measuring DHS's progress in real property management. For
               questions 1 and 2, we also interviewed Office of Management and
               Budget (OMB) staff because of OMB's oversight role in real
               property management. We reviewed and analyzed key pertinent
               documentation, including DHS's asset management plan, Federal Real
               Property Council guidance, OMB's assessment of DHS's progress, and
               OMB guidance.

               To answer question 3, we reviewed and analyzed key documents,
               reviewed the relevant authorities, and interviewed DHS real
               property officials from headquarters and GSA officials responsible
               for assisting DHS with its headquarters consolidation efforts.
               This included reviewing planning documents, including GSA's
               location alternatives analysis to comply with the NEPA, GSA's 2005
               land use feasibility analysis, DHS's 2006 housing master plan, and
               GSA's master planning documents, related to a proposed
               consolidation of DHS headquarters on the West Campus of St.
               Elizabeths Hospital in the District of Columbia. We also
               interviewed additional stakeholders, including officials from the
               National Capital Planning Commission (NCPC), the Advisory Council
               on Historic Preservation, the U.S. Commission of Fine Arts, the
               Council on Environmental Quality, the State Historic Preservation
               Officer, and Ward 8 Coordinator from the D.C. Office of Planning.

               To answer the fourth question, we interviewed DHS physical
               security headquarters officials and officials from DHS's various
               components. We also interviewed Federal Protective Service
               officials and GSA officials responsible for security at locations
               where GSA houses DHS. We analyzed Homeland Security Presidential
               Directive Number 7 and pertinent physical security documents and
               policies from DHS and GSA. We conducted our work between March
               2006 and April 2007 in accordance with generally accepted
               government auditing standards.

    Appendix II: FRPC Inventory Data Elements and Descriptions

    Data
    element
    number  Data element name            Definition
    1       Real property type           Identifies the asset as one of the
                                            following categories of real
                                            property: land; building; or
                                            structure.
    2       Real property use            Indicates the asset's predominant use
                                            in one of the following categories:
                                            land; building; or structure.
    3       Legal interest               Identifies a real property as being
                                            owned by the federal government,
                                            leased by the federal government
                                            (i.e., as lessee), or otherwise
                                            managed by the federal government.
    4       Status                       Reflects the predominant
                                            physical/operational status of the
                                            asset as active, inactive, or excess.
    5       Historical status            Identifies owned and leased property
                                            as National Historic Landmark (NHL);
                                            National Register Listed (NRL);
                                            National Register Listed; National
                                            Register Eligible; Noncontributing
                                            element of NHL/NRL district; Not
                                            evaluated; Evaluated, Not Historic.
    6       Reporting agency             Refers to the federal government
                                            agency/bureau reporting the property
                                            to the FRPC Inventory database.
    7       Using organization           Refers to the predominant federal
                                            government agency/bureau (or other
                                            nonfederal government entity)
                                            occupying the property.
    8       Size                         Refers to the size of the real
                                            property asset according to
                                            appropriate units of measure. The
                                            unit of measure used for the three
                                            real property types is as follows:

                                               o For land, the unit of measure is
                                               acreage and the land is designated
                                               as either rural acres or urban
                                               acres.
                                               o For buildings, the unit of
                                               measure is area in square feet and
                                               designated as gross square feet
                                               (GSF).

                                            For structures, a structure unit of
                                            measure table is provided that
                                            contains reporting guidelines for the
                                            unit of measure for specific types of
                                            structures.
    9 (PM)  Utilization                  Captures the rate of utilization for
                                            a building--that is, the percentage
                                            of space (square footage) used for
                                            agency purposes.

                                            Is reported

                                               o on a scale from 0 to 100;
                                               o by building type--office,
                                               warehouse, hospital, laboratory,
                                               and housing--and
                                               o by category--overutilized,
                                               utilized, underutilized, or not
                                               utilized--depending on where the
                                               utilization rate falls within
                                               percentage ranges defined for each
                                               building type.
    10      Value                        Defined as the functional replacement
                                            value; the cost of replacing the
                                            existing constructed asset at today's
                                            standards. (value = unit x unit cost
                                            x overhead factor)
    11 (PM) Condition index              Provides a general measure of a
                                            building or structure's condition at
                                            a specific point in time.

                                            Is calculated

                                               o annually,
                                               o as the ratio of repair needs to
                                               plant replacement value (PRV); (CI
                                               = (1 - $repair needs/$PRV) x 100.
                                               o "Repair needs" is the amount
                                               necessary to restore a building to
                                               a condition substantially
                                               equivalent to its original
                                               condition

                                                       o Agencies and departments
                                                       will initially use an
                                                       existing process to
                                                       determine their repair
                                                       needs.
                                                       o Agencies will later
                                                       refine and standardize
                                                       their definition of repair
                                                       needs.

                                               o PRV is the cost of replacing an
                                               existing building so that it meets
                                               today's standards.
                                               o The higher the CI, the better
                                               the condition of the building.

                                            Is reported

                                               o for an entire agency or
                                               department,
                                               o on a scale from 0 to 100
                                               percent.

                                            Agencies and departments initially
                                            set target CI levels in consultation
                                            with OMB.
    12 (PM) Mission dependency           The value a building brings to an
                                            agency's performance of its mission
                                            as determined by the agency

                                            May be categorized as

                                               o mission critical - without the
                                               building or land, the agency's
                                               mission is compromised;
                                               o mission dependent, not critical
                                               - falls between mission critical
                                               and not mission dependent; or
                                               o not mission dependent - without
                                               the building or land, the agency's
                                               mission is unaffected.
    13 (PM) Annual operating costs       Includes costs for

                                               o recurring maintenance and
                                               repairs;
                                               o utilities (plant operating and
                                               energy purchase costs);
                                               o cleaning or janitorial services
                                               (pest control, refuse collection
                                               and disposal, including recycling
                                               operations); and
                                               o roads/grounds (grounds
                                               maintenance, landscaping, and snow
                                               and ice removal from roads, piers
                                               and airfields).

                                            Will be reported annually.
    14      Main location                Refers to the street/delivery address
                                            for the asset or the latitude and
                                            longitude coordinates. Either of the
                                            following will be provided for the
                                            constructed asset or parcel of land:
                                            street address; or latitude and
                                            longitude (if no security concerns).
    15      Real property unique         A code that is unique to an item of
               identifier                   real property that will allow for
                                            linkages to other information
                                            systems. The real property unique
                                            identifier is assigned by the
                                            reporting agency and can contain up
                                            to 24 alpha-numeric digits.
    16      City                         Provides the four-digit Geo Location
                                            Codes (GLC) for the city or town
                                            associated with the reported main
                                            location in which the land parcel,
                                            building, or structure is located.
    17      State                        Provides the two-digit GLC for the
                                            state associated with the reported
                                            main location in which the land
                                            parcel, building, or structure is
                                            located.
    18      Country                      Provides the three-digit GLC for the
                                            country associated with the reported
                                            main location in which the land
                                            parcel, building, or structure is
                                            located.
    19      County                       Provides the three-digit GLC for the
                                            county associated with the reported
                                            main location in which the land
                                            parcel, building, or structure is
                                            located.
    20      Congressional district       Provides the value for the
                                            congressional district associated
                                            with the reported main location in
                                            which the land parcel, building, or
                                            structure is located.
    21      ZIP code                     Provides the five-digit ZIP code
                                            associated with the reported main
                                            location in which the land parcel,
                                            building, or structure is located
                                            and, if known, the additional
                                            four-digit zip code suffix.
    22      Installation/Subinstallation Headquarters installations - Land,
               identifier                   buildings, other structures, and
                                            facilities, or any combination of
                                            these. Examples of installations are
                                            a national forest, national park,
                                            hydroelectric project, office
                                            building, warehouse building, border
                                            station, base, post, camp, or an
                                            unimproved site. Provide a 24-digit
                                            alpha-numeric code for the
                                            installation ID assigned by the
                                            reporting agency.

                                            Subinstallation - Part of an
                                            installation identified by a
                                            different GLC than that of the
                                            headquarters installation. An
                                            installation must be separated into
                                            subinstallations (and reported
                                            separately) when the installation is
                                            located in more than one state or
                                            county. However, an agency may elect
                                            to separate an installation into
                                            subinstallations even if the
                                            installation is not located in more
                                            than one state or county. Provide a
                                            six-digit alpha-numeric code for the
                                            subinstallation ID assigned by
                                            reporting agency.
    23      Restrictions                 Refers to limitations on the use of
                                            real property. Provides one or more
                                            of the following values for each
                                            building, structure, and parcel of
                                            land: environmental restrictions
                                            (cleanup-based restrictions, etc.);
                                            natural resource restrictions
                                            (endangered species, sensitive
                                            habitats, floodplains, etc.);
                                            cultural resource restrictions
                                            (archeological, historic, Native
                                            American resources (except those
                                            excluded by EO 13007, section 304 of
                                            the National Historical Preservation
                                            Act), etc.); developmental
                                            (improvements) restrictions;
                                            reversionary clauses from deed;
                                            zoning restrictions; easements
                                            (including access for maintenance
                                            rights, etc.); rights-of-way; mineral
                                            interests; water rights; air rights;
                                            other; nonapplicable.

               Source: GSA, Interim FY 2005 Guidance for Real Property Inventory
               Reporting as of October 11, 2005.

               Note: PM = Performance measure.

    Appendix III: Comments from the Department of Homeland Security

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix.

    See comment 2.

    See comment 1.

    GAO Comments

               The following are GAO's comments on the Department of Homeland
               Security letter dated June 12, 2007.

    1. DHS describes the value of GSA's Automated
                            Prospectus System (TAPS) in its comments. While we
                            agree that a TAPS analysis is a good tool to make
                            decisions about leasing and new construction options,
                            it does not allow a comprehensive analysis of the
                            costs of various development scenarios at the St.
                            Elizabeths site that would help decision makers
                            better understand the costs of the trade-offs of
                            developing a variety of densities and configurations
                            at the site. In addition, DHS is incorrect in stating
                            that GSA's TAPS analysis includes DHS's costs of
                            $1.32 billion. GSA acknowledged in its comments that
                            DHS costs are not part of the TAPS analysis, but
                            argues that the costs would not vary significantly,
                            depending on the alternative selected at St.
                            Elizabeths so the costs exclusion does not affect the
                            validity of the analysis.
                            2. DHS stated that the staff of the consulting
                            parties advance the position that the St. Elizabeths
                            campus should be open for public use and that the St.
                            Elizabeths campus has never been open for unfettered
                            public use. We do not address the issue of public
                            access in detail in our report, but in general, most
                            stakeholders with whom we talked supported some type
                            of limited public access to the site such as access
                            to the Point for certain holidays and access by
                            permit to the Civil War cemetery. Most stakeholders
                            acknowledged that unlimited access was not a
                            realistic option. We agree with DHS that in the post
                            9-11 security environment, access to the site is a
                            complicated issue. As DHS states, we believe that
                            working with the community to come to an agreement
                            about limited public access to portions of the campus
                            consistent with threat levels and providing July 4th
                            access to view fireworks is a reasonable way to
                            proceed.

    Appendix IV: Comments from the General Services Administration

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix.

    See comment 2.

    See comment 1.

    See comment 4.

    See comment 3.

    See comment 7.

    See comment 6.

    See comment 5.

    See comment 8.

    See comment 9.

    See comment 11.

    See comment 12.

    See comment 10.

    GAO Comments

               The following are GAO's comments on the General Services
               Administration letter dated June 6, 2007.

                            1. We have updated the report to include the updated
                            transportation costs to be borne by GSA and the
                            District Department of Transportation that were
                            provided to us after receiving agency comments. These
                            transportation cost estimates supersede those
                            provided in the agency comments.
                            2. We disagree with GSA's statement that we double
                            counted project infrastructure costs. The $2 billion
                            estimate for GSA's portion of St. Elizabeths
                            development costs, which was included in the draft
                            report we sent to GSA, was based on estimates
                            discussed at interviews conducted with GSA on
                            November 29, 2006, as well as follow-up telephone
                            conversations with GSA in February and March 2007.
                            Also, in a February 8, 2007, letter from GSA, we were
                            provided documentation that listed development costs
                            for St. Elizabeths at about $2 billion. After sending
                            us official agency comments, GSA revised its estimate
                            of the cost to develop St. Elizabeths to $3.26
                            billion with GSA incurring $1.94 billion of costs and
                            DHS incurring $1.32 billion of costs. Since GSA's
                            current estimate stands at $3.26 billion, we will use
                            this estimate in our report; but we believe that
                            these changing cost estimates--and the confusion
                            about them--demonstrate that a comprehensive cost
                            analysis would, in our view, improve transparency and
                            allow for more informed decision making.
                            3. We disagree that including DHS's actual costs for
                            its current locations as a baseline would be
                            misleading. We agree that DHS's current housing
                            configuration is not optimal and that DHS may pursue
                            other alternatives other than renewing current
                            leases. However, it would be useful for congressional
                            decision makers to have an analysis of what DHS is
                            currently paying and will pay in leases over a
                            30-year period as a baseline and compare the 30 year
                            cost under that scenario with the 30-year cost of
                            ownership under other configurations and square
                            footages at the St. Elizabeths site (2.5, 3.0, and
                            4.5 million square feet).
                            4. We are not saying that DHS tenant-specific costs
                            would vary significantly if DHS moved to a different
                            location than St. Elizabeths. We are suggesting that
                            a comprehensive cost analysis of how DHS costs would
                            vary, depending on the configuration and square
                            footage developed at the St. Elizabeths site and
                            would be useful to decision makers. For example, if 3
                            million square feet of office space were developed at
                            St. Elizabeths, DHS's costs, such as build-out costs,
                            moving costs, and remaining leasing costs, would be a
                            certain amount. However, if 4.5 million square feet
                            of office space were developed at St. Elizabeths,
                            these DHS costs would certainly vary to some degree.
                            An understanding of the degree to which these costs
                            might vary, depending on the alternative selected,
                            would promote informed decision making.
                            5. As discussed earlier, we believe that a
                            comprehensive analysis of the costs of various
                            development scenarios at the St. Elizabeths site
                            ranging from zero development (for use as baseline)
                            to DHS's and GSA's preferred development of 4.5
                            million square feet of office space (plus parking),
                            or higher, would help decision makers at GSA, DHS,
                            and Congress better understand the cost trade-offs of
                            developing a variety of densities and configurations
                            at the site. A comprehensive cost analysis would also
                            help stakeholders understand the long-term costs to
                            the federal government, whether incurred by DHS, GSA,
                            or the Department of Health and Human Services, as
                            well as the District of Columbia government and how
                            these long-term costs would vary, depending on the
                            amount of square footage developed at the St.
                            Elizabeths site. We would not limit the analysis to
                            those solutions that fully meet DHS's colocation
                            need, since alternatives that partially meet DHS's
                            colocation needs could be explored if only to
                            understand the trade-offs of developing a variety of
                            densities and configurations at the site.
                            6. We agree that a stay-in-place scenario is not a
                            good alternative for DHS. However, we believe that an
                            understanding of current and projected leasing costs
                            would provide a useful baseline of comparison against
                            other alternatives for decision makers. GSA's
                            economic analysis does this to some degree, but in
                            our view it does not explore a complete range of
                            alternatives for the St. Elizabeths site.
                            7. We disagree. Based on the interviews conducted and
                            letters provided by NCPC, the D.C. Office of
                            Planning, Advisory Council on Historic Preservation,
                            and National Trust for Historic Preservation, we
                            believe that stakeholders generally maintain that 2.0
                            to 2.5 million square feet of office space can fit on
                            the site, plus parking, without compromising the
                            site's historic character. Only the U.S. Commission
                            of Fine Arts expressed a preference for a lower
                            amount of office development on the site.
                            8. We agree that stakeholder statements in our report
                            do not reflect agencies' official positions, but we
                            believe they accurately reflect the concerns or views
                            of key stakeholders that are senior officials in
                            these organizations. We have added a statement in our
                            report that states views expressed are generally the
                            views of key staff, not official positions of the
                            organizations themselves who will officially provide
                            comment as consulting parties once GSA submits its
                            draft Master Plan in July 2007. We also attribute
                            some statements to an individual within a particular
                            agency or cite the letter from which any statements
                            came. For example, NCPC expressed its views of the
                            potential consolidation of DHS at the St. Elizabeths
                            campus through letters signed by its Executive
                            Director on January 19, 2006, and September 21, 2006.
                            An analysis and description of the debate around the
                            development of St. Elizabeths would not be complete
                            without this context of stakeholder concerns. In our
                            view, it would not be appropriate to wait until after
                            the Record of Decision regarding the St. Elizabeths
                            site became final to inform Congress of stakeholder
                            concerns since congressional debate about, and
                            discussion of, funding for the project is already
                            under way.
                            9. We do not believe that describing the concerns of
                            stakeholders is inappropriate, even though GSA has
                            not issued its draft environmental impact statement.
                            As discussed above, an analysis and description of
                            the debate around the development of St. Elizabeths
                            would not be complete without this context of
                            stakeholder concerns. In our view, it would not be
                            appropriate to wait until after GSA's Record of
                            Decision regarding the St. Elizabeths site became
                            final to inform Congress of stakeholder concerns as
                            this is an ongoing and deliberative process. We
                            acknowledge that GSA has attempted to fully engage
                            stakeholders as it works through the complexities of
                            the project.
                            10. We agree that the St. Elizabeths site's
                            infrastructure costs, building conditions, and
                            historic preservation demands make providing
                            cost-effective housing for federal agencies a
                            challenge. That is precisely why a comprehensive cost
                            analysis of the total costs to the federal government
                            as a whole, at varying square footages, at the St.
                            Elizabeths site would be beneficial. We believe that
                            such an analysis would lead to more informed decision
                            making.
                            11. See comment 10.
                            12. GSA correctly notes that our audit focus has
                            changed from evaluating DHS's plans to consolidate
                            its headquarters in Washington, D.C. to a focus on
                            the challenges that DHS and GSA face in consolidating
                            DHS's headquarters in Washington, D.C. Given the
                            large role that GSA plays in efforts to consolidate
                            DHS's headquarters at the West Campus of St.
                            Elizabeths, we determined during our engagement that
                            a focus on the challenges that both DHS and GSA face
                            was warranted. During the course of the engagement,
                            most of the discussions with GSA focused on the
                            challenges it faces as it assists DHS in its need to
                            consolidate.

               Appendix V: Comments from the District of Columbia Office of Planning

               Appendix VI: Comments from the National Capital Planning Commission

               Appendix VII: Comments from the Advisory Council on Historic Preservation

               Appendix VIII: Comments from the U.S. Commission of Fine Arts

               Appendix IX: GAO Contact and Staff Acknowledgments

               GAO Contact

               Mark Goldstein, 202-512-2834

    			  Acknowledgments

               In addition to the individual listed above, David Sausville,
               Assistant Director; Michaela Brown; Tonnye Conner-White; George
               Depaoli; Sharon Dyer; Brandon Haller; Grant Mallie; Kieran
               McCarthy; Joshua Ormond; and Susan Michal-Smith made significant
               contributions to this report.

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    [74]www.gao.gov/cgi-bin/getrpt?GAO-07-658 .

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    Highlights of [75]GAO-07-658 , a report to the Ranking Member, Committee
    on Homeland Security and Governmental Affairs, U.S. Senate

    June 2007

    FEDERAL REAL PROPERTY

    DHS Has Made Progress, but Additional Actions Are Needed to Address Real
    Property Management and Security Challenges

    The Department of Homeland Security (DHS) has a large, diverse portfolio
    of property it uses to carry out its mission. GAO's objectives were to (1)
    describe DHS's real property portfolio; (2) determine what challenges, if
    any, DHS faces in managing real property and what actions it has taken in
    response to the administration's real property initiative; (3) determine
    what challenges DHS and the General Services Administration (GSA) face in
    consolidating DHS's Washington, D.C. headquarters; and (4) describe
    actions DHS has taken to help ensure the security of its facilities. GAO
    reviewed documents and interviewed officials from DHS, GSA, and other
    stakeholders, including the National Capital Planning Commission (NCPC)
    and the District of Columbia (D.C.).

    [76]What GAO Recommends

    GAO recommends that DHS (1) use capital planning principles to link its
    capital needs with its asset management plan and (2) develop a physical
    security plan. GAO also recommends that DHS and GSA (3) develop a more
    comprehensive analysis of the costs to the government as a whole for DHS's
    headquarters consolidation. DHS agreed with the first two recommendations.
    GSA did not agree with the third recommendation, while DHS partially
    agreed. GAO maintains that such an analysis is needed. GAO also obtained
    comments from other stakeholders.

    DHS's 10 major organizational components have a portfolio that includes
    more than 27,000 owned or leased buildings and structures totaling about
    78 million square feet. About 72 percent of DHS real property is federally
    owned, while about 28 percent of DHS real property is federally leased.
    The U.S. Coast Guard has the majority of DHS real property, accounting for
    69 percent of its buildings and about 41 percent of its square footage.
    DHS faces challenges but has made progress toward addressing them in
    response to the administration's real property management initiative. One
    major challenge relates to DHS being a new federal department that
    combined 22 existing agencies, which has made the development of a
    cohesive approach to real property management a significant undertaking.
    On the administration's scorecard for real property management, DHS has
    achieved a "yellow" status, which indicates progress in strategically
    managing real property by, for example, designating a senior real property
    officer and developing an OMB-approved asset management plan. However, DHS
    could do more to link its capital decision-making practices to its real
    property initiatives.

    Consolidating DHS's Washington, D.C., area locations will be challenging
    because of the costs involved, estimated to be at least $3.26 billion, and
    stakeholders' concerns about the redevelopment of the West Campus of St.
    Elizabeths Hospital-- DHS's preferred location--which is under the control
    of GSA and is a National Historic Landmark District. DHS believes that by
    consolidating most of its headquarters operations, greater efficiencies
    would result, its mission would be better integrated, and security of the
    facilities could be better managed. DHS has testified that an estimated $1
    billion would be saved over 30 years through the consolidation, although a
    revised analysis estimates cost savings at $743 million. However, this
    savings analysis does not (1) use actual and projected leasing costs for
    locations where DHS is currently housed, (2) include DHS costs of $1.32
    billion to develop the site, and (3) examine a range of square footage
    alternatives. A more comprehensive analysis would improve transparency and
    help key stakeholders, including Congress, make more informed decisions
    about the consolidation. Also, several key stakeholders are concerned
    about compliance with historic preservation and environmental laws and the
    effect the project will have on the local community, although some
    community leaders support it. In July 2007, GSA plans to issue a draft
    Master Plan for stakeholder review that, according to GSA, will address
    these concerns.

    In recent years, DHS has taken actions intended to improve the security of
    its facilities, but its efforts fall short in certain key areas. DHS has
    designated a Chief Security Officer for the department and has established
    a Chief Security Officer Council to evaluate security issues. However,
    most DHS components have not fully implemented risk management for
    facility protection, which DHS has advocated for other agencies, nor has
    DHS developed a physical security plan, as required by HSPD-7.

    References

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      45. http://www.dhs.gov/dhspublic/verify_redirect.jsp?url=www.tsa.gov&title=Transportation+Security+Administration+%28TSA
      46. http://www.dhs.gov/dhspublic/verify_redirect.jsp?url=http%3A%2F%2Fwww.cbp.gov&title=Customs+and+Border+Protection
      47. http://www.dhs.gov/dhspublic/verify_redirect.jsp?url=www.ice.gov&title=Immigration+and+Customs+Enforcement+%28ICE%29
      48. http://www.dhs.gov/dhspublic/verify_redirect.jsp?url=http%3A%2F%2Fwww.fletc.gov&title=Federal+Law+Enforcement+Training+Center
      49. http://www.dhs.gov/dhspublic/verify_redirect.jsp?url=http%3A%2F%2Fuscis.gov&title=Citizenship+and+Immigration+Services
      50. http://www.dhs.gov/dhspublic/interapp/editorial/editorial_0530.xml
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      64. http://www.gao.gov/
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      68. mailto:AndersonP1@gao.gov
      69. http://www.gao.gov/cgi-bin/getrpt?GAO-05-49
      70. http://www.gao.gov/cgi-bin/getrpt?GAO-05-790
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    *** End of document. ***