Federal Bureau of Investigation
Actions Needed to Document Security Decisions and Address Issues with Condition of Headquarters Buildings Gao ID: GAO-12-96 November 8, 2011In Process
According to FBI and GSA assessments, the FBI's headquarters facilities--the Hoover Building and the headquarters annexes--do not fully support the FBI's long-term security, space, and building condition requirements. The FBI has addressed many security concerns at the Hoover Building by implementing protective measures. Furthermore, in response to a recommendation GAO made in a law enforcement sensitive version of this report issued in July 2011, the FBI has updated its security assessment of the Hoover Building in accordance with security standards issued in 2010. The assessment includes recommendations but does not indicate whether recommended actions will be implemented. While this is reasonable given the short period of time since GAO's July 2011 report, documentation of decisions on the recommendations and tracking implementation is important because of facility planning and budget implications--for both the Hoover Building and a new headquarters--and time needed to coordinate with GSA. FBI officials told GAO that the annexes will be assessed against the 2010 security standards. The officials noted, though, that the dispersion of staff in annexes creates security challenges. The Hoover Building's original design is inefficient, according to GSA assessments, making it difficult to reconfigure space to promote staff collaboration. Staff dispersion across annexes likewise hampers collaboration and the performance of some classified work. Furthermore, the condition of the Hoover Building is deteriorating, and GSA assessments have identified significant recapitalization needs. However, GSA has decided to limit investments in the Hoover Building to those necessary to protect health and safety and keep building systems functioning while GSA assesses the FBI's facility needs. This decision increases the potential for building system failures and disruption to the FBI's operations. Through studies conducted over the past decade, the FBI and GSA have considered three broad alternatives, each with variations, to try to meet the FBI's facility needs--(1) modernize the Hoover Building, (2) demolish the Hoover Building and construct a new headquarters on the existing site, and (3) acquire a new headquarters on a new site. In doing so, the FBI and GSA thus far have generally followed leading practices for capital decision making. To varying degrees, these alternatives would improve security, space, and building conditions, but each would take several years to implement. Estimates of the alternatives' costs, developed in the studies, are not comparable because they were prepared at different times and for different purposes. The FBI and GSA plan to discuss the FBI's facility needs with the Office of Management and Budget, and GSA and the FBI will need to present a business case, including current, comparable cost estimates, to support the choice of a preferred alternative and financing strategy. The FBI's 2011 security assessment of the Hoover Building, as well as information on any security improvements that may be needed at the annexes, could inform the agencies' decisions and help ensure that limited budgetary resources are allocated effectively. This is a public version of a law enforcement sensitive report that GAO issued in July 2011, which has been updated, including a modification to a recommendation, to reflect recent FBI actions. Information that the FBI and the Department of Homeland Security deemed sensitive has been omitted. The FBI should document decisions about, and track its implementation of, all security recommendations for the Hoover Building and the FBI's headquarters annexes. GSA should reassess its decision to limit recapitalization investments in the Hoover Building, since the FBI is likely to stay in it for several more years while its long-term facility needs are being planned. The FBI agreed with these recommendations. GSA indicated it is working to implement GAO's recommendation.
GAO-12-96, Federal Bureau of Investigation: Actions Needed to Document Security Decisions and Address Issues with Condition of Headquarters Buildings
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United States Government Accountability Office:
GAO:
Report to Congressional Committees:
November 2011:
Federal Bureau of Investigation:
Actions Needed to Document Security Decisions and Address Issues with
Condition of Headquarters Buildings:
GAO-12-96:
GAO Highlights:
Highlights of GAO-12-96, a report to congressional committees.
Why GAO Did This Study:
Since September 11, 2001, the Federal Bureau of Investigation‘s (FBI)
mission and workforce have expanded, and the FBI has outgrown its
aging headquarters, the J. Edgar Hoover Building (Hoover Building). As
a result, the FBI also operates in over 40 annexes, the majority
located in the National Capital Region. In the explanatory statement
accompanying the 2009 Omnibus Appropriations Act, GAO was directed to
examine the FBI‘s headquarters facilities. In response, GAO examined
the extent to which (1) these facilities support the FBI‘s security,
space, and building condition requirements and (2) the FBI and the
General Services Administration (GSA)”-the real property steward for
the Hoover Building”have followed leading capital decision-making
practices in identifying alternatives for meeting the FBI‘s facility
needs. GAO reviewed security, space, and condition assessments and
planning studies; visited FBI facilities; and interviewed FBI and GSA
officials.
What GAO Found:
According to FBI and GSA assessments, the FBI‘s headquarters
facilities-”the Hoover Building and the headquarters annexes”-do not
fully support the FBI‘s long-term security, space, and building
condition requirements. The FBI has addressed many security concerns
at the Hoover Building by implementing protective measures.
Furthermore, in response to a recommendation GAO made in a law
enforcement sensitive version of this report issued in July 2011, the
FBI has updated its security assessment of the Hoover Building in
accordance with security standards issued in 2010. The assessment
includes recommendations but does not indicate whether recommended
actions will be implemented. While this is reasonable given the short
period of time since GAO‘s July 2011 report, documentation of
decisions on the recommendations and tracking implementation is
important because of facility planning and budget implications”-for
both the Hoover Building and a new headquarters”-and time needed to
coordinate with GSA. FBI officials told GAO that the annexes will be
assessed against the 2010 security standards. The officials noted,
though, that the dispersion of staff in annexes creates security
challenges. The Hoover Building‘s original design is inefficient,
according to GSA assessments, making it difficult to reconfigure space
to promote staff collaboration. Staff dispersion across annexes
likewise hampers collaboration and the performance of some classified
work. Furthermore, the condition of the Hoover Building is
deteriorating, and GSA assessments have identified significant
recapitalization needs. However, GSA has decided to limit investments
in the Hoover Building to those necessary to protect health and safety
and keep building systems functioning while GSA assesses the FBI‘s
facility needs. This decision increases the potential for building
system failures and disruption to the FBI‘s operations.
Through studies conducted over the past decade, the FBI and GSA have
considered three broad alternatives, each with variations, to try to
meet the FBI‘s facility needs”-(1) modernize the Hoover Building, (2)
demolish the Hoover Building and construct a new headquarters on the
existing site, and (3) acquire a new headquarters on a new site. In
doing so, the FBI and GSA thus far have generally followed leading
practices for capital decision making. To varying degrees, these
alternatives would improve security, space, and building conditions,
but each would take several years to implement. Estimates of the
alternatives‘ costs, developed in the studies, are not comparable
because they were prepared at different times and for different
purposes. The FBI and GSA plan to discuss the FBI‘s facility needs
with the Office of Management and Budget, and GSA and the FBI will
need to present a business case, including current, comparable cost
estimates, to support the choice of a preferred alternative and
financing strategy. The FBI‘s 2011 security assessment of the Hoover
Building, as well as information on any security improvements that may
be needed at the annexes, could inform the agencies‘ decisions and
help ensure that limited budgetary resources are allocated effectively.
This is a public version of a law enforcement sensitive report that
GAO issued in July 2011, which has been updated, including a
modification to a recommendation, to reflect recent FBI actions.
Information that the FBI and the Department of Homeland Security
deemed sensitive has been omitted.
What GAO Recommends:
The FBI should document decisions about, and track its implementation
of, all security recommendations for the Hoover Building and the FBI‘s
headquarters annexes. GSA should reassess its decision to limit
recapitalization investments in the Hoover Building, since the FBI is
likely to stay in it for several more years while its long-term
facility needs are being planned. The FBI agreed with these
recommendations. GSA indicated it is working to implement GAO‘s
recommendation.
View [hyperlink, http://www.gao.gov/products/GAO-12-96]. For more
information, contact David C. Maurer at (202) 512-9627 or
maurerd@gao.gov or David J. Wise at (202) 512-2834 or wised@gao.gov.
[End of section]
Contents:
Letter:
Background:
FBI Headquarters Facilities Present Security, Space, and Condition
Challenges:
Consistent with Leading Practices Thus Far, the FBI and GSA Have
Identified Alternatives for Better Meeting the FBI's Facility Needs
and Are Developing an Approach for Moving Forward:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: FBI and GSA Studies Related to FBI Headquarters Planning:
Appendix III: Financing Strategies Available for Capital Projects:
Appendix IV: Comments from the Federal Bureau of Investigation:
Appendix V: Comments from the General Services Administration:
Appendix VI: Comments from the Department of Homeland Security:
Appendix VII: GAO Contacts and Staff Acknowledgments:
Figures:
Figure 1: J. Edgar Hoover Building Facing Pennsylvania Avenue and 10th
Street:
Figure 2: Map Showing the J. Edgar Hoover Building and Surrounding
Streets:
Figure 3: Design Features That Limit the Hoover Building's Efficiency:
Figure 4: Conditions GAO Observed at the Hoover Building:
Figure 5: Timeline of FBI and GSA Studies of FBI Facility Requirements:
Figure 6: The Baseline Status Quo and Alternative 1 Consider Continued
Use of the Hoover Building:
Figure 7: Alternatives 2 and 3 Consider New Construction on the
Existing Hoover Site or a New Site:
Abbreviations:
DHS: Department of Homeland Security:
FBF: Federal Buildings Fund:
FBI: Federal Bureau of Investigation:
FPS: Federal Protective Service:
FSL: facility security level:
GSA: General Services Administration:
ISC: Interagency Security Committee:
LEED: Leadership in Energy and Environmental Design:
NCPC: National Capital Planning Commission:
OMB: Office of Management and Budget:
SCIF: sensitive compartmented information facility:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
November 8, 2011:
The Honorable Barbara A. Mikulski:
Chairwoman:
The Honorable Kay Bailey Hutchison:
Ranking Member:
Subcommittee on Commerce, Justice, Science and Related Agencies:
Committee on Appropriations:
United States Senate:
The Honorable Frank Wolf:
Chairman:
The Honorable Chaka Fattah:
Ranking Member:
Subcommittee on Commerce, Justice, Science and Related Agencies:
Committee on Appropriations:
House of Representatives:
The Federal Bureau of Investigation (FBI), within the Department of
Justice, acts to protect and defend the United States against crime,
terrorism, and foreign intelligence threats. Since September 11, 2001,
the FBI's antiterrorism mission has greatly expanded and its efforts
in other areas--such as cyber crime--have also grown. The agency's
total headquarters workforce has increased by approximately 5 percent
annually since 2001. As a result, the FBI has outgrown its main
headquarters facility, the J. Edgar Hoover Building (Hoover Building)
in Washington, D.C. Headquarters staff who cannot be accommodated in
the Hoover Building are dispersed in over 40 leased annexes (annexes),
the majority of which are located in the National Capital Region. FBI
officials report that the dispersion of staff, combined with condition
deficiencies at the Hoover Building and site, affects security and
creates operational inefficiencies. In addition, these security,
space, and building condition issues have raised congressional
concerns about how well the Hoover Building and annexes meet the FBI's
security requirements and operational needs. In its 2005 Asset
Management Plan, the FBI identified the need for a new headquarters
facility to support its strategic objectives, which include providing
security for personnel and information in an efficient and cost-
effective workspace. To meet these objectives, the FBI has taken steps
to document its headquarters facility requirements and, in
collaboration with the General Services Administration (GSA), the
government's real property steward, has studied a number of
alternatives for meeting its needs.
Congress directed us, in the explanatory statement accompanying the
2009 Omnibus Appropriations Act,[Footnote 1] to review the Hoover
Building and associated off-site locations in light of its concerns
about the security posture of the Hoover Building and its inability to
house the current FBI Headquarters workforce. We examined (1) the
extent to which the Hoover Building and annexes support the FBI's
operational requirements for security, space, and building condition
and (2) the extent to which the FBI and GSA have followed leading
capital decision-making practices in identifying alternatives for
meeting the FBI's operational requirements and the extent to which
each alternative would address these requirements.
This report is a public version of a law enforcement sensitive report
that we issued in July 2011. It communicates the publicly releasable
aspects of our findings while omitting information that the FBI and
DHS considered sensitive about the FBI's operations, the security
posture of the FBI's facilities, and measures the FBI has put in place
to protect its workforce. The overall methodology used for both
reports is the same.
To determine the extent to which the Hoover Building and annexes
support the FBI's operational requirements for security, space, and
building condition, we visited the Hoover Building and five annexes--
which we selected to illustrate different facility security levels and
degrees of staff fragmentation--to examine conditions firsthand and
interview on-site representatives from FBI divisions (programs) and
security officials about those conditions. More specifically:
* For security, we compared past site-specific facility security
assessments (security assessments) for the Hoover Building and 15 of
the annexes to federal security standards. For the Hoover Building, we
also assessed whether recommendations to improve security were
implemented. We spoke with agency security officials about the
security assessments, risks, and challenges resulting from dispersed
operations. Following our issuance of the law enforcement sensitive
version of this report in July 2011, the FBI updated its security
assessment of the Hoover Building, which we reviewed.
* For space, we reviewed the size and location of current facilities
and programs, and we interviewed FBI program officials to understand
the effects on operations of having different programs housed in
several locations. We also compared attributes of the Hoover Building--
such as its efficiency (how much of its space is usable for mission
needs)--to GSA standards and guidance.
* For building condition,[Footnote 2] we analyzed assessments of the
Hoover Building's physical condition and compared this information to
GSA policies for building condition. In addition, we examined GSA's
asset business plan for the building[Footnote 3] and other studies to
identify completed maintenance projects, deferred maintenance, and
planned major repair and recapitalization projects, and we asked FBI
and GSA officials about their assessments of the Hoover Building's
condition.[Footnote 4]
To determine the extent to which the FBI and GSA have followed leading
capital decision-making practices in identifying alternatives for
meeting the FBI's operational requirements, we compared the FBI's and
GSA's planning actions against leading practices we have reported on
in this area.[Footnote 5] In addition, we reviewed FBI and GSA studies
of the FBI's facilities and operational requirements and identified
the alternatives discussed in these studies for meeting the
requirements. We determined that the alternatives fell into three
broad categories--(1) modernize the Hoover Building, (2) demolish the
Hoover Building and construct a new headquarters on the existing site,
and (3) construct a new headquarters on a new site--each of which
included a number of variations. For our analysis, we focused on the
categories, since the appropriateness of the variations could not be
determined without further study and would depend on site-specific
conditions. We then assessed the extent to which each alternative
would address the FBI's security, space, and building condition
requirements.
We did not independently analyze the FBI's requirements for security,
which are based on its assessments of the threats it faces and their
probability of occurrence; its requirements for space, which are based
on its projections of each FBI program's future staffing and space
needs, such as the need for secure conference rooms; or its process
for deciding which programs to house in a new consolidated facility.
In our view, such analyses were outside the scope of our review and
would require extensive reviews of classified intelligence on threats
and hostile groups, as well as of programmatic mission justifications
for FBI branches and their associated staffing levels. We did,
however, determine that the FBI senior leadership was involved in
deciding which FBI programs should be colocated. Furthermore, because
the FBI and GSA are still in the early stages of the facility planning
process and had not finalized cost estimates for budgetary purposes at
the time of our review, we did not validate cost estimates for new
construction or past cost estimates for modernizing or redeveloping
the Hoover Building and site. Appendix I contains a more detailed
discussion of our scope and methodology.
We conducted this performance audit from July 2010 to November 2011,
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
In 1964, the National Capital Planning Commission (NCPC) approved the
design concept for FBI headquarters. Construction started in 1967, and
in 1974, FBI personnel began moving into the new building, which was
named for the FBI's first director, J. Edgar Hoover (see figure 1).
Situated on one entire city block in downtown Washington, D.C., and
containing approximately 2.4 million gross square feet of space, the
building is bounded by four major city streets--9th, 10th, and E
Streets and Pennsylvania Avenue--all of which are open to public
traffic (see figure 2). The building is a concrete structure, 7
stories high on its Pennsylvania Avenue side and 11 stories high on
its E Street side. A dry moat[Footnote 6] protects the building in
addition to numerous antivehicular barriers.
Figure 1: J. Edgar Hoover Building Facing Pennsylvania Avenue and 10th
Street:
[Refer to PDF for image: photograph]
Source: GSA.
[End of figure]
Figure 2: Map Showing the J. Edgar Hoover Building and Surrounding
Streets:
[Refer to PDF for image: street map]
Source: National Park Service.
[End of figure]
When the FBI first occupied the Hoover Building, it was primarily a
law enforcement organization. Since then, its mission has grown in
response to evolving threats and now includes counterterrorism,
counterintelligence, weapons of mass destruction deterrence, and cyber
security. Accordingly, use of the Hoover Building has changed to
support new programs in these areas. For example, the Hoover Building
originally housed a crime laboratory, and more space was dedicated to
records storage. These functions have since been transferred to off-
site locations, making space available for new programs in the Hoover
Building.
The FBI's headquarters workforce has grown as the agency has assumed
new mission responsibilities. In 2001, the FBI had 9,700 headquarters
staff,[Footnote 7] working in 7 locations. Today, the FBI has 17,300
headquarters staff, including those housed in more than 40 annexes,
the majority of which are located within the National Capital
Region.[Footnote 8] According to the FBI, programs in 21 of these off-
site locations and in the Hoover Building should be colocated to meet
the agency's mission requirements.[Footnote 9] In projecting its
staffing levels from fiscal year 2010 through fiscal year 2018, the
FBI estimated that its headquarters workforce will grow by a total of
7 percent during that period.
The FBI's headquarters facilities, like all facilities in the United
States occupied by federal employees for nonmilitary activities, are
subject to the Interagency Security Committee's (ISC) baseline
facility security standards. The ISC, chaired by the Department of
Homeland Security (DHS) and composed of representatives from all major
federal departments and agencies, is tasked with coordinating federal
agencies' facility protection efforts, developing security standards,
and overseeing the implementation of security measures.[Footnote 10]
In 2004, the ISC issued security criteria for federally owned
facilities and space leased by agencies (hereafter referred to as the
2004 ISC standards),[Footnote 11] establishing facility security
standards for space owned or leased by the federal government. In
2010, the ISC issued new standards that superseded the 2004 standards.
The new security criteria (hereafter referred to as the 2010 ISC
standards) were intended to make security an integral part of the
operations, planning, design, construction, renovation, or acquisition
of federal facilities--whether in owned or leased space.[Footnote 12]
The 2010 ISC standards establish a baseline set of protective measures
(countermeasures) to be applied at each facility according to its
security level and outline a risk management process for agencies to
follow as they assess the security of their facilities.[Footnote 13]
To determine the security level of a federal facility, the ISC uses
criteria that it issued in 2008. Factors considered in determining the
facility security level (FSL) include the criticality of an agency's
mission, the symbolism of the facility, and the building's size and
population. The Hoover Building is categorized at the same FSL applied
to the headquarters facilities of other agencies with national
security missions, such as the Central Intelligence Agency and the
Department of Defense. The FSLs of the FBI's annexes in the National
Capital Region vary.
In meeting its needs for office space, the FBI generally works through
GSA, although it has received direct appropriations to construct
specialized facilities, such as the FBI laboratory and academy
training facilities,[Footnote 14] and has entered into leases on its
own. GSA can use government-owned or leased facilities to meet an
agency's space needs.[Footnote 15] If a facility is not available to
meet the agency's needs and the estimated cost of a new facility
exceeds a defined dollar threshold,[Footnote 16] GSA can request
congressional authorization to construct or lease a new facility by
submitting a project prospectus.[Footnote 17] GSA typically funds new
federal construction and the acquisition of leased space from the
Federal Buildings Fund (FBF).[Footnote 18] Agencies occupying GSA-
controlled space (owned or leased) pay rent to GSA, which GSA deposits
into the FBF. GSA then pays the landlord from the FBF for those
buildings it leases.[Footnote 19] In addition to federal construction
or leasing, GSA has the authority to enter into a sale-leaseback
[Footnote 20] or a ground lease and leaseback[Footnote 21] arrangement
through which GSA sells or leases federal land to a developer that
builds a facility on the site and leases it back to GSA.[Footnote 22]
We have previously reported that the FBF is not large enough to meet
GSA's construction and major repair needs[Footnote 23] and that
alternative financing strategies may be viable options for GSA to meet
agencies' facilities needs.[Footnote 24]
GSA has generally provided space in leased facilities for the FBI's
expanded headquarters staff. We have also reported that GSA has used
operating leases extensively to meet agencies' long-term space needs,
even though building ownership is generally less costly.[Footnote 25]
Both GSA and the FBI have generally concluded that the FBI has long-
term space needs and that its operations should be consolidated to
achieve greater security and efficiency. Working with GSA, the FBI has
studied a number of alternatives for consolidation.
FBI Headquarters Facilities Present Security, Space, and Condition
Challenges:
The Hoover Building Does Not Meet the FBI's Long-Term Security
Requirements:
According to FBI officials, the Hoover Building does not meet the
FBI's long-term security requirements.[Footnote 26] We found that
planning for the FBI's headquarters security requirements has evolved
over time. A 2005 GSA study and a 2009 FBI study cited different
planning assumptions about the security requirements for a new FBI
headquarters. The 2010 ISC standards do not prescribe security
requirements for federal facilities like the Hoover Building or new
facilities that an agency proposes to construct or lease. Instead, the
2010 standards indicate that, in establishing requirements for
existing or new facilities, agencies should determine what combination
of countermeasures would provide an appropriate level of protection
against identified threat scenarios that the ISC refers to as the
"design-basis threat." Furthermore, the 2010 ISC standards indicate
that whenever an agency-determined threat level deviates from the ISC
design-basis threat baseline, the factors that influenced the agency's
threat assessment must be documented and fully supported by detailed
information as part of the assessment.
In addition to the Hoover Building not meeting the FBI's long-term
security requirements, FBI security officials told us on our site
visits that they have some security concerns--to varying degrees--
about some of the headquarters annexes, including the following:
* Proximity of non-FBI tenants to FBI employees performing sensitive
operations. At least nine annexes are located in multitenant
buildings, where some space is leased by the FBI and other space is
leased by nonfederal tenants. While this arrangement does not
automatically put FBI operations at risk, it heightens security
concerns.
* Lack of control over common areas. FBI security officials also cited
a lack of control over common areas in multitenant buildings. For
example, at one annex we visited, FBI officials told us that the
building's landlord denied the FBI's request to implement some
recommended countermeasures made in 2007 and in 2009 by DHS's Federal
Protective Service (FPS), which conducts security assessments of
facilities under the control or custody of GSA. The landlord chose not
to implement the countermeasures, citing costs and concerns about
inconveniencing nonfederal tenants in the building.[Footnote 27]
* FBI Police response. According to FBI officials, security at the
annexes is primarily handled by contract guards, local police, or the
FBI's internal police force, the FBI Police, depending on the location
and circumstances. The FBI Police does not physically station its
personnel at the annexes; rather, it periodically conducts patrols of
annexes.
FBI Has Implemented Several Countermeasures to Improve the Security of
the Hoover Building:
Over the past several years, the FBI has implemented countermeasures
at the Hoover Building to improve security, including:
* upgrading the building's exterior windows;
* moving and upgrading the security of the FBI business visitor center
so that it now provides internal queuing for identification checks, an
X-ray screening area, a badge office, and a secure waiting area;
* strengthening barriers to prevent unauthorized access;
* installing new doors to the building to meet the FBI's requirements
for protection against forced entry;
* securing air intakes to keep airborne contaminants out of the
building; and:
* paying the District of Columbia government to restrict public
metered parking along one side of the building in order to prevent
unscreened vehicles from parking or idling near the building.
Although the FBI has implemented these countermeasures, others have
yet to be implemented, and FBI officials did not provide historical
documentation of the agency's rationale for not implementing them. FBI
security officials we spoke with were not part of the earlier decision
making, but suggested that some past recommendations were not
implemented because of their high cost and potential impact on
operations. A 2005 GSA study concluded that some of the
recommendations would have been costly and disruptive to the FBI's
operations within the building. Because FBI officials did not provide
historical documentation of the FBI's rationale for not implementing
some recommendations, it is difficult for us to determine why the FBI
and GSA did not pursue them. More recently, in 2008, the FBI received
approval from NCPC for one security project at the Hoover Building,
but FBI officials reported they were unsuccessful in obtaining funding
for the project before NCPC's approval expired. The FBI said it
intends to resubmit its request for NCPC approval at the end of fiscal
year 2011, and if the request is approved, it may attempt to obtain
funding in fiscal year 2012.
While implementing recommended countermeasures may not always be
feasible--because of physical limitations or budgetary restrictions,
for example--the 2010 ISC standards require agencies to document any
decision to reject or defer the countermeasures' implementation,
including whether the agency is willing to accept risk and whether
there are any alternative strategies to meet the agency's required
level of protection. This ISC standard is consistent with a component
of our risk management framework that calls for agencies to identify
and evaluate alternatives to mitigate risk, taking into account the
alternatives' likely effect on risk and their cost.[Footnote 28]
FBI Recently Performed a Comprehensive Security Assessment of the
Hoover Building and Intends to Have the Security of Its Annexes
Assessed against the 2010 ISC Standards:
FBI officials performed a comprehensive security assessment of the
Hoover Building in 2011 using the 2010 ISC facility security
standards. This assessment, which the FBI provided to us after we
issued our law enforcement sensitive version of this report in July
2011, was the FBI's first comprehensive review of the building's
security since 2002, although FBI officials told us they had assessed
the security of selected portions of the building during the interim.
For federal buildings under the control or custody of GSA, such as the
Hoover Building, FPS normally conducts periodic security assessments
unless the tenant agency waives the requirement for FPS to do so. The
FBI waived the requirement for FPS to conduct security assessments of
the Hoover Building, acknowledging that it would assume responsibility
for conducting the assessments itself. However, the FBI did not
conduct a comprehensive assessment of the Hoover Building from 2002
until 2011 because, according to FBI officials, the FBI had concluded
that an updated assessment would be unlikely to yield new information.
Under the current ISC standards, agencies are to conduct security
assessments of their facilities at regular intervals, depending on the
building's FSL. The requirement for the Hoover Building is every 3
years. The ISC also requires agencies to document their security
assessment findings in a report, including the threats and
vulnerabilities they have identified and the specific countermeasures
they have recommended based on their building's FSL. Conducting
regular security assessments is also an important component of one of
our key practices in protecting federal facilities--allocating
resources using a risk management approach. This practice emphasizes
the need to identify threats and assess vulnerabilities in order to
develop countermeasures and to prioritize the allocation of resources
as conditions change.[Footnote 29]
In July 2011, we reported that an updated security assessment would
allow the FBI to fully assess the building against the 2010 ISC
standards, evaluate if additional security technologies could be
implemented, and document decisions about whether to implement certain
recommendations or accept risk going forward. We also noted that an
updated security assessment would provide the FBI with current
information to help prioritize its allocation of security-related
resources across all of its facilities. We recommended that the FBI
update the Hoover Building's security assessment using the 2010 ISC
standards, including (1) documenting threats, (2) analyzing the
building security requirements, and (3) indicating whether
recommendations would be implemented.
Subsequent to our July 2011 law enforcement sensitive report, the FBI
completed a security assessment of the Hoover Building. This security
assessment was conducted by the FBI's Physical Security Unit and
coordinated with the FBI Police and the FBI's Facilities and Logistics
Services Division. FBI security staff evaluated security conditions
against specific criteria outlined in the 2010 ISC standards.
According to our analysis, the assessment covered some areas that were
not covered in the 2002 assessment. Moreover, the assessment
documented both the security posture of the Hoover Building and the
FBI's building security requirements in relation to baseline ISC
requirements. Where appropriate, the assessment included
recommendations, and those recommendations were recently forwarded to
the FBI's executive management for consideration. Currently, the FBI
is in the process of determining its response to these
recommendations, some of which would require capital investments in
the building. FBI needs time to make final decisions on some
recommendations and may need to reach agreement with GSA as the
federal steward for the building. As the FBI determines its response
to the recommendations, it is important that it document decisions
because of their budget implications and effect on the planning for
its long-term facility needs.
According to FBI security officials, they were not aware of any
countermeasures that needed to be implemented at the annexes. Although
they indicated that they do have security concerns about headquarters
annexes, such as lack of control over building common areas, the
officials told us the annexes generally meet the 2004 ISC standards
for leased space.
We received security assessments or other security-related
information--from both FPS and the FBI--for most, but not all, of the
21 annexes.[Footnote 30] According to the FBI, it intends to request
that FPS assess the annexes' compliance with the 2010 ISC standards
when the new standards are fully implemented and then evaluate the
need for any additional countermeasures.[Footnote 31] Tracking the
implementation status of all countermeasures recommended in FPS or FBI
security assessments will provide the FBI with complete, current
information on any security vulnerabilities at its annexes, and help
it determine the extent to which the annexes meet the 2010 ISC
standards and the FBI's security requirements.
The Hoover Building's Design Limits Space Efficiencies and Hampers
Collaboration; Dispersion of Staff Causes Operational and Logistical
Challenges:
Although the Hoover Building is large, occupying an entire city block,
much of its approximately 2.4 million gross square feet of space is
unusable, and the remaining usable space[Footnote 32]--according to a
2007 study conducted for GSA and the FBI--is not designed to meet the
needs of today's FBI.[Footnote 33] According to a 2008 GSA market
appraisal of the building, its design is inefficient and functionally
obsolete.[Footnote 34] According to the FBI, the space is laid out as
efficiently as possible, but the original design of the building's
floor plates is inefficient.[Footnote 35] For example, the building
provides a lower percentage of usable square footage for office and
mission functions than a federal office building built to current
design standards. In its 2010 facilities standards,[Footnote 36] GSA
established a space efficiency target of 75 percent for new federal
office buildings, based on the ratio of usable to gross square
footage.[Footnote 37] The Hoover Building's efficiency ratio is 53
percent. Figure 3 illustrates some of the features that limit the
building's efficiency.
Figure 3: Design Features That Limit the Hoover Building's Efficiency:
[Refer to PDF for image: illustration]
Building structural elements-”such as load-bearing columns and trusses
associated with cantilevered upper stories-”limit opportunities to
reconfigure interior spaces and convert some closed office areas to
open space.
Work areas are too deep”-from the windows to the building core area”-
which limits access to natural daylight. Today‘s federal construction
standards advocate access to daylight as a means of improving energy
and environmental efficiency.
Courtyard results in some interior space being allocated to long,
inefficient corridors, limiting circulation within the building.
Open-air second level is not usable for office space.
Source: GAO analysis of a GSA-commissioned space effectiveness study
and GSA facility design standards.
[End of figure]
To accommodate additional staff at the Hoover Building, the FBI has
reconfigured parts of the building's interior, including converting
about 200,000 square feet of basement, cafeteria, and storage space to
offices. Renovations were implemented reactively as the agency's
mission grew. Some areas could not be renovated as open spaces, as
desired, because the building's original design hampered such changes.
While converting building support space has provided the FBI with some
additional offices in the Hoover Building, GSA's facility condition
assessment[Footnote 38] indicates that those offices may not be
adequately ventilated and cooled. As a result, some space may provide
an uncomfortable working environment for staff. GSA has a project
planned to address ventilation requirements. While the project was
proposed as early as 2004, we found that GSA has been unable to get
the design approvals needed to implement the project.[Footnote 39] FBI
officials we spoke with also indicated that the building lost some
functionality--for example, they said less space was available for
meetings--after those spaces were converted to offices to accommodate
the agency's rapid growth.
The FBI and GSA have concluded that the Hoover Building's interior
design remains a significant barrier to staff collaboration and
information sharing across teams.[Footnote 40] Furthermore, GSA has
concluded that the building's structure constrains further increases
in its efficiency.[Footnote 41] For example, a 2007 study for GSA and
the FBI found that the Hoover Building's long corridors and closed
office suites result in significant fragmentation among working groups
that hampers communication and collaboration and that the building's
inflexible design is incompatible with changing mission needs. FBI
officials told us that whereas newer office buildings with modular
designs can be quickly and cost-efficiently reconfigured to
accommodate new missions or staff growth, the Hoover Building would
likely require months of modernization work to achieve similar
results.[Footnote 42] According to senior FBI and GSA officials, space
restrictions at the Hoover Building limit the FBI's ability to meet
two GSA workplace goals for the next decade--to improve collaboration
and communication and to make more efficient use of space.[Footnote 43]
Because the Hoover Building cannot readily be modified to accommodate
new mission needs and staff growth, and because core headquarters
staff are therefore dispersed among multiple annexes, the FBI now
faces several operational and logistical challenges. According to FBI
officials, space constraints at the Hoover Building and the resulting
dispersion of staff sometimes prevent the FBI from physically locating
certain types of analysts and specialists together. For example,
according to an FBI report, one FBI division within the Hoover
Building is not able to embed analysts within other offices--to
facilitate greater collaboration--because of the lack of available
space. During our site visits, FBI officials reported logistical
challenges as well, including a lack of facilities at a few annexes
for discussing some classified information, known as sensitive
compartmented information facilities (SCIF). As a result, some FBI
personnel told us they have to travel to meetings in different
locations across the National Capital Region, resulting in inefficient
use of their time and the FBI's transportation resources. Furthermore,
FBI officials at three annexes we visited reported that the private
landlords responsible for building maintenance at their sites were
often slow to respond to maintenance requests from the FBI, such as
requests for repairs to malfunctioning heating and cooling systems.
To mitigate the operational and logistical challenges of dispersion
and to avoid further complications as its workforce continues to grow,
the FBI has centralized its real property management functions for
headquarters and has begun to take a more focused approach to managing
its space needs. In 2005, the FBI established a central Space
Management Unit[Footnote 44] and started assessing its headquarters
space needs twice a year. In addition, it initiated an interim phased
plan to consolidate some leases into fewer facilities based on the
lease expiration dates until it can obtain a facility designed to
consolidate operations in the Hoover Building and in the 21 annexes it
has determined should be colocated.
The Hoover Building Is Aging and Showing Signs of Deterioration, but
Needed Repairs and Recapitalization Projects Have Been Deferred:
Although the Hoover Building is nearing its life-cycle age and
exhibiting signs of deterioration,[Footnote 45] GSA has decided to
limit major repair and recapitalization investments to those systems
or components that affect life safety and building functionality until
it is determined whether the FBI will remain a long-term occupant of
the building.[Footnote 46] According to GSA, its investments have been
appropriate to ensure that FBI operations are not at risk. For
example, since 2004, GSA has spent approximately $22 million to
upgrade components and systems in the Hoover Building.[Footnote 47]
Nevertheless, a 2009 GSA physical condition survey estimated that the
building requires about $80.5 million in further repairs and upgrades.
The condition survey identifies repair needs to the building's air-
handling distribution systems and ductwork ($44.2 million), electrical
switchgear ($23.3 million), and elevators ($2.3 million), among other
systems.[Footnote 48] GSA officials told us these repairs have been
deferred. GSA also has plans to repair the building's concrete façade
($8.9 million)[Footnote 49] and to replace the entire fire alarm
system ($22 million), but has not yet obtained funding for either
project. GSA officials indicated that the fire alarm system
replacement would most likely be included in any future renovation of
the Hoover Building.
During a tour of the Hoover Building given by FBI officials, we
observed several signs of exterior and interior deterioration. One FBI
official stated that some areas of the upper-level exterior façade
have deteriorated over time, heightening the risk that pieces of
concrete could fall and strike pedestrians below. As a precautionary
measure, GSA and the FBI have installed netting around the upper level
of the building to catch any falling debris. In addition, water
infiltration from the courtyard has corroded parts of the parking
garage ceiling. The basement is also prone to flooding from the
interior courtyard during periods of rain. Figure 4 depicts conditions
we observed during our tour.
Figure 4: Conditions GAO Observed at the Hoover Building:
[Refer to PDF for image: 2 photographs]
Concrete material that was part of the buliding's exterior facing--the
building envelope or skin--that came loose and was removed from the
building.
Recycling bin rigged with a plastic chute to direct rainwater runoff
that infiltrated the basement.
Source: GAO.
[End of figure]
At the time of our review, the Hoover Building was categorized as a
"core asset" in GSA's asset business plan.[Footnote 50] However, this
categorization was inconsistent with GSA's decision to limit major
repair and recapitalization investments in the building. GSA core
assets generally have a long-term holding period of at least 15 years.
For buildings with a long-term holding period, GSA policy states that
reinvestment will be funded to ensure maintenance of the building's
quality and condition at levels appropriate to meet continuing mission
and customer needs.[Footnote 51] This includes all preventative
maintenance, necessary upgrades, and enhancements to the building and
its systems to maintain the asset in appropriate condition. GSA's near-
term maintenance policy for the Hoover Building is more consistent
with GSA's policy for a "transition asset." A transition asset
typically has a 6-to 15-year holding period as its tenant prepares for
relocation to a new federal building or a leased building. For such an
asset, GSA funds projects that meet basic needs in transition, but
avoids any major reinvestment. In its technical comments on our draft
law enforcement sensitive report, GSA reported that it has recently
recategorized the Hoover Building as a transition asset to reflect the
FBI's concerns about the building's security, condition, and
efficiency, as well as GSA's own decision to limit investments in the
building. GSA further reported that its categorization of the building
may change again if the FBI moves or further study of the asset points
to a change. Regardless of how the building is categorized, it will
likely be used for several more years, and its large backlog of
deferred maintenance, major repairs, and recapitalization requirements
increases the potential for systems or components to fail and
potentially disrupt FBI operations.
Consistent with Leading Practices Thus Far, the FBI and GSA Have
Identified Alternatives for Better Meeting the FBI's Facility Needs
and Are Developing an Approach for Moving Forward:
FBI and GSA Planning Actions Have Been Generally Consistent with
Applicable Leading Practices in Capital Decision Making:
Over the past decade, the FBI and GSA have conducted a number of
studies (see figure 5) to assess the FBI headquarters facilities'
strategic and mission needs. Through these studies, they have
determined the condition of the FBI's current assets and identified
gaps between current and needed capabilities, as well as studied a
range of alternatives to meet the FBI's requirements. (See appendix II
for more detail on the studies undertaken by the FBI and GSA.) These
activities are consistent with applicable GAO leading practices in
capital decision making.[Footnote 52]
Figure 5: Timeline of FBI and GSA Studies of FBI Facility Requirements:
[Refer to PDF for image: timeline]
2001: Condition assessment.
2002: Security assessment.
2005: Headquarters housing strategy.
2006: Site study.
2007: Space study.
2008: Real estate appraisal.
2009: Relocation study.
2010: Consolidation report (final draft).
Source: GAO analysis.
[End of figure]
GAO Capital Decision-Making Practices 1 and 2: Assess Requirements and
Determine Gaps between Current and Needed Capabilities:
Consistent with our first two leading practices in capital decision
making--to conduct a comprehensive assessment of needs to meet an
agency's mission goals and objectives and to identify the current
capabilities and condition of existing assets (i.e., facilities) to
meet those needs--the FBI and GSA conducted facility condition and
security assessments of the Hoover Building in 2001 and 2002[Footnote
53] and identified recommendations in both areas. For example, the
poor condition of the Hoover Building was identified as a gap in the
FBI's need for a functional headquarters. In addition, as noted, the
FBI's 2005 Asset Management Plan[Footnote 54] identified the need for
a new headquarters facility to safeguard personnel and information
within efficient and cost-effective workspace, and the FBI has worked
with GSA to identify its strategic facility and space requirements.
Also in 2005, the FBI Director and a Deputy FBI Director--with input
from assistant directors--decided which FBI programs should be
colocated in a headquarters facility to meet the agency's strategic
and mission requirements. According to their analysis, the FBI
Director; the National Security Branch, including its counterterrorism
and intelligence divisions; the Criminal, Cyber, Response, and
Services Branch; and other FBI headquarters functions, such as the
Information Technologies Branch, would need to be colocated.
Throughout the decision-making process, FBI senior officials have
consulted with senior GSA regional and national officials to discuss
the FBI's requirements and the range of alternatives to meet the FBI's
needs. In 2007, GSA and the FBI found that the need to colocate
certain FBI programs--to better enable collaboration and facilitate
information sharing[Footnote 55]--could not be met in the Hoover
Building and the annexes and that the FBI's operations in the Hoover
Building and 21 of its annexes in the National Capital Region should
be consolidated.[Footnote 56] This decision to consolidate is also
consistent with a 2010 presidential memorandum directing federal
agencies to eliminate lease arrangements that are not cost-effective,
pursue consolidation opportunities, and identify reductions when new
space is acquired, as the FBI pointed out in its 2010 consolidation
report.[Footnote 57]
In the studies they conducted from 2005 through 2009, the FBI and GSA
identified security requirements for a consolidated FBI headquarters
facility. Our previously issued law enforcement sensitive report
describes these security requirements. The 2005 through 2009 planning
studies also identified space requirements for an FBI headquarters
facility. For example, a formal space programming study performed by
the FBI's architectural consultant established space requirements for
approximately 11,600 personnel and for support headquarters spaces,
such as conference rooms and SCIF space. This personnel figure was
based on current staffing levels for the functions that the FBI had
determined should be colocated in a headquarters facility, adjusted to
allow for limited future growth. To further identify the FBI's
headquarters space requirements, the architectural consultant and
staff from the FBI's Facilities and Logistics Services Division met
with representatives from the FBI's branches and their divisions to
assess their operational needs, such as access to SCIF space or
proximity to another organization or function. In addition, the FBI
Facilities and Logistics Services Division established space standards
for staff after reviewing GSA and industry benchmarks.[Footnote 58]
According to the FBI, it requires modern, open-plan office space for
its operations and shared team spaces to promote collaboration and
information sharing across mission teams[Footnote 59] and to permit
easy reconfiguration to meet changing needs, such as space for newly
formed internal and interagency task forces.[Footnote 60] The FBI also
identified requirements for large SCIFs to fully support its
divisions' classified discussion and processing needs.
GAO Capital Decision-Making Practice 3: Identify Alternatives to Close
Gaps:
Consistent with our third leading practice in capital decision making--
decide how best to meet a gap by identifying and evaluating
alternative approaches--the FBI and GSA, in their 2005 through 2009
planning studies, identified and analyzed a range of alternatives,
together with their estimated costs and benefits, for meeting the gap
between the FBI's current and needed space. These alternatives fall
into three categories: (1) modernizing the Hoover Building;[Footnote
61] (2) demolishing the building and constructing a new facility on
the existing site;[Footnote 62] and (3) acquiring a new consolidated
headquarters facility--through federal construction or lease--on a new
site.[Footnote 63] Figures 6 and 7 provide summary information about
these three alternatives and the status quo, which we include because
the Office of Management and Budget (OMB) requires agencies to submit
baseline information when they propose a major capital acquisition.
[Footnote 64]
Figure 6: The Baseline Status Quo and Alternative 1 Consider Continued
Use of the Hoover Building:
[Refer to PDF for image: illustrated text]
Baseline: FBI remains in the Hoover Building and annex offices and
implements upgrades over time:
Security: The FBI's security concerns about its headquarters
facilities would remain.
Operations: Operations would remain fragmented. Fragmentation could
increase if the FBI headquarters workforce grows by an estimated 7
percent total by 2018.
Condition: The Hoover Building would continue to age, and system
deterioration would continue if major projects were not initiated.
Costs: Total annex lease costs would increase if more leased space
were needed to meet FBI's growing needs.
Time to implement: Life-cycle, life-safety, and security upgrades
would be implemented over time as needed and as funding
became available.
Alternative 1: The Hoover Building modernized, leases consolidated:
Security: The FBI's security concerns about its headquarters
facilities would remain.
Operations: Operations would remain fragmented because usable space
within the Hoover Building would not greatly increase. Fragmentation
could increase and disruption would occur during implementation of the
building modernization as staff move into swing space”outside the
Hoover Building”during renovation. Also during renovation, staff could
have difficulty accessing space suitable for classified work. After
the renovation, fragmentation would continue but might be alleviated
as leases at the annexes expire and if FBI and GSA could consolidate
those annexes into fewer, but larger, facilities. However, FBI's
projected growth would likely result in more staff being located in
annexes outside of the Hoover Building.
Condition: The Hoover Building's physical condition would improve with
modernization. A modernization could meet some Leadership in Energy
and Environmental Design (LEED)[A] standards, but it would not be
comparable to a new building meeting LEED gold criteria as GSA
requires for newly constructed federal facilities.
Costs: GSA's preliminary cost estimate for modernization is about $1.7
billion based on 2007 construction cost factors.
* The costs did not include any additional leased annex space that
would be required to meet the FBI's projected staffing growth by 2018.
* According to a report by one of GSA's consultants, modernization
costs would significantly exceed new construction costs.
* According to GSA officials, generally, the cost of providing similar
levels of security to an existing building is more expensive than
including those items in the construction of a newly designed building.
* According to GSA officials, the Hoover Building could be modernized
at less cost for another federal agency-”one without the FBI's high
security needs-”if the FBI vacated the facility and the construction
contractor renovated the building before the new tenant moved in.
Time to implement: This project is estimated to take approximately 14
years to complete assuming a phased approach with swing space provided
for FBI operations during construction.
Source: GAO analysis.
[A] The U.S. Green Building Council's Leadership in Energy and
Environmental Design green building rating system defines sustainable
features for buildings and includes a set of performance standards
that can be incorporated into the design and construction of
buildings. When the standards are met during facility design and
construction, credits are earned to enable buildings to be certified
in accordance with an established four-level scale--certified, silver,
gold, and platinum.
[End of figure]
Figure 7: Alternatives 2 and 3 Consider New Construction on the
Existing Hoover Site or a New Site:
[Refer to PDF for image: illustrated text]
Alternative 2: The Hoover Building is demolished, new building built
on existing site:
Security: The FBI's security concerns about its headquarters facility
would remain.
Operations: Operations would remain fragmented because any new
facility on the Hoover Building site would still not have enough
square footage to meet the FBI's operational needs. The new building
would likely be smaller than the existing facility. Fragmentation
would also increase while FBI staff were relocated during
construction. Finding appropriate swing space, including space for
classified work, could be difficult.
Condition: The facility would be designed to meet LEED certification
requirements and GSA design and workplace standards.
Costs: In 2006. a GSA contractor estimated construction costs of $850
million. The estimate does not include the costs of:
* tenant-specific operations (e.g., the costs of constructing SCIF
space in the new building), leasing swing space for employees, moving
twice, and constructing temporary SCIFs in swing space; and;
* additional leased annex space that would be required to meet the
FBI's projected staffing growth by 2018.
Time to implement: This project is estimated to take approximately 9
years to complete.
Alternative 3: New consolidated headquarters facility built on new
site:
Security: The new consolidated headquarters facility should be able to
fully meet the FBI's security requirements based on the 2010 ISC
security standard.
Operations: Efficiency would increase because the new facility would
allow for the optimal organization of divisions to include FBI's
projected staffing growth. Space within the new facility would be
designed, using an open-plan concept, to allow for future
reconfiguration in response to changes in FBI's mission.
Condition: The new facility would be located on about 50 acres of land
and accessible to public transportation systems. The facility would be
designed to meet LEED certification requirements and GSA design and
workplace standards.
Costs: In 2010, the FBI and GSA estimated a project cost of
approximately $1.2 billion to acquire a new site and design and
construct a new headquarters facility on it. The estimate does not
include the costs of:
* meeting FBI requirements for equipment, system furniture, moves, and
other items;
* private financing incurred by a private developer”-such as the costs
of securing a construction loan and paying any interest on it-”should
GSA contract with a developer to construct the building and lease it
to GSA; and;
* the developer's return on investment and a possible lease increase
when the lease was renewed.
Time to implement: This project is estimated to take approximately 7
years to complete.
Source: GAO analysis.
[End of figure]
The cost estimates in figures 6 and 7 cannot be compared because the
studies and estimates were completed at different times, for different
purposes, by different consultants, using different methodologies and
facility specifications.
GAO Capital Decision-Making Practice 4: Establish a Review and
Approval Framework:
As the FBI and GSA continue to advance through the capital planning
process, our leading practices in capital decision making can help
guide their efforts, as well as inform decision makers' evaluations of
any preferred alternative and other alternatives considered. Our
fourth leading practice--establish a review and approval framework
that is supported by analyses[Footnote 65]--encourages management
reviews and approvals, supported by the proper financial, technical,
and risk analyses that are critical in making sound capital investment
decisions.
OMB's guidance, together with GSA's Capital Planning Program Guide,
provides a capital asset review framework such as our fourth leading
practice describes. OMB's guidance requires GSA--if GSA constructs or
leases a headquarters facility for the FBI's use--to submit a capital
asset business case in support of the project. According to OMB's
guidance, the FBI and GSA need to partner to develop the business
case--providing input on the estimated project costs and financing
strategies[Footnote 66]--but the design and construction budget
request would be part of GSA's annual budget submission to OMB if the
construction is to be funded through the FBF. (See appendix III for
information on the FBF.) This business case should include the total
estimated life-cycle costs--for the preferred alternative and the
other alternatives the agencies considered[Footnote 67]--including the
costs of acquisition, operations, maintenance, and disposal.[Footnote
68] In addition, GSA's guide directs GSA to conduct a variety of
reviews, such as site feasibility studies and environmental analyses,
designed to ensure that projects are feasible and in compliance with
all federal construction requirements.
GAO Capital Decision-Making Practice 5: Rank and Select an Alternative:
As GSA develops a capital asset business case for OMB with input from
the FBI, it will have to rank the alternatives the agencies considered
and select a preferred alternative. This ranking, when weighed against
other relative priorities that the FBI and GSA will have to evaluate,
would be consistent with our fifth capital decision-making practice--
rank and select projects based on established criteria. FBI officials
have preliminarily concluded that their security and space
requirements can be met only through the construction of a new
headquarters facility on a new site. GSA officials have thus far
generally concluded that the FBI has long-term space needs and that
FBI operations should be consolidated to achieve greater security and
efficiency, but have not finalized their construction cost estimates.
According to GSA officials, the FBI and GSA will discuss the FBI's
needs with OMB, and a final decision will be based on the results of a
more comprehensive analysis that GSA will complete with FBI input for
OMB. For the preferred alternative, GSA officials said they will need
to undertake a final due diligence process to revalidate the FBI's
program requirements, update costs, and initiate feasibility studies--
such as an assessment of the likelihood that sites are available in
the National Capital Region--so as to develop a detailed prospectus
for formal OMB approval and congressional consideration.[Footnote 69]
Our leading practices state that prudent decision makers also should
consider various funding options available to them. In the case of
real property, that means considering other funding alternatives in
comparison to funding new construction or a modernization through the
FBF. In separate interviews, both GSA's Deputy Administrator and
Director of the Office of Real Property Asset Management indicated
that GSA will undertake a thorough analysis of a range of financing
strategies as part its due diligence. (See appendix III for a
description of some of the financing strategies that GSA may
consider.) According to GSA, it almost always recommends federal
construction using the FBF because this is usually the lowest cost
alternative. However, GSA reports that in the current budgetary
environment, it believes that alternative strategies such as the
ground lease and leaseback arrangement--providing for eventual
ownership of the building by the government--may need to be
considered.[Footnote 70]
After GSA and the FBI identify a preferred alternative and financing
strategy, and if the alternative entails constructing a new federal
facility through the FBF, GSA will have to rank the need for any FBI
headquarters capital project against other FBI and governmentwide
facility needs. GSA ranks projects from all agencies that have
identified requirements--first by GSA region and then nationally. The
GSA Administrator decides which major prospectus projects to propose
within GSA's budget based on recommendations and input from the
Commissioner of the Public Buildings Service, among others. While GSA
has general criteria for prioritizing capital construction and major
modernization needs, it does not specifically include security among
its ranking criteria. Instead, according to a GSA official, the agency
relies on its customers to convey their mission-critical needs in a
way that reflects which issues, such as security, are critical to
them. At this time, GSA officials could not indicate how a new FBI
headquarters facility--or a major modernization of the Hoover
Building--might be ranked in relation to other competing federal asset
needs. FBI staff we spoke with indicated that a new headquarters
project has the support of the FBI Director, but it is unclear whether
a new headquarters is the most important facility need for the FBI or
whether regional field office facility needs may be more important.
The FBI and GSA plan to continue working together to reach a decision
with OMB on how best to meet the FBI's needs. GSA reports that fiscal
year 2014 is likely the earliest that any budget request and
prospectus might be put forth for congressional consideration. Based
on that insight and our review of preliminary FBI and GSA schedules,
we estimate that the earliest that any project could be completed
would be fiscal year 2020.
Conclusions:
With its employees dispersed throughout the National Capital Region
and many of them housed in the aging and inefficient Hoover Building--
a facility constructed prior to current ISC standards governing
security countermeasures--the FBI is under pressure to find an
alternative that will meet its security, space, and building condition
requirements. Any alternative will take years to implement and is
likely to cost over a billion dollars. It is therefore important that
the choice of an alternative be based on up-to-date assessments of the
FBI's security, space, and building condition needs. In the interim,
the FBI and GSA may have opportunities to further enhance security and
address condition deficiencies at the FBI's current facilities.
For the next several years or more, the FBI's headquarters workforce
will be dispersed between the Hoover Building and the headquarters
annexes. During this time, it is important that the FBI and FPS
conduct security assessments of the annexes, as required by the 2010
ISC standards, and that the FBI track the implementation status of
recommended countermeasures for all its headquarters facilities. For
the FBI, documentation of decisions to implement recommendations--
whether made in its 2011 security assessment of the Hoover Building or
in future assessments of its headquarters annexes against the 2010 ISC
standards--could inform decisions on how best to meet the FBI's long-
term headquarters facility needs. Complete, current information on
security needs and the status of recommended countermeasures--some
that have budget implications--at both the Hoover Building and the
annexes could indicate to the FBI whether it is allocating its
security resources as efficiently as possible to mitigate risks. Such
information could also help the FBI and GSA evaluate alternatives to
the FBI's current dispersed headquarters structure and develop a
business case to support a budget request for the alternative that
they determine would best meet the FBI's security needs.
Given the likelihood that FBI employees will be housed in the Hoover
Building for several more years no matter which alternative is
ultimately selected, and that the building may remain in GSA's
portfolio whether it is occupied by the FBI or another federal tenant,
it is important to ensure that GSA's current strategy for maintaining
the facility is appropriate. The deferred maintenance, repairs, and
recapitalization projects that have accumulated under this strategy
could lead to system or component failures and potentially disrupt FBI
operations. Allowing the building to deteriorate further could also
make it difficult to house another agency in the Hoover Building if
the FBI moves to a different location.
Ultimately, decisions about the future of the FBI's headquarters
facilities will require careful consideration of policy matters
related to the FBI's mission and security needs and competing budget
priorities, as well as other factors, such as the availability of a
suitably sized site in the National Capital Region where the FBI's
headquarters operations could be colocated. Currently, planning for a
new FBI headquarters is ongoing, and GSA has yet to submit a business
case for a preferred alternative to OMB, which is essential in the
decision as to which specific alternative and financing strategy to
pursue.
Recommendations for Executive Action:
To ensure that complete, current security information is being used to
minimize risks to FBI facilities, operations, and personnel and to
inform a final decision on how best to meet the FBI's long-term
facility requirements, we recommend that the Attorney General direct
the FBI Director to take the following two actions:
* Document whether any recommendations from the FBI's 2011 security
assessment will be implemented at the Hoover Building.
* Track the implementation status of all recommendations made in FPS
or FBI security assessments--of both the Hoover Building and the FBI's
headquarters annexes--using the 2010 ISC standards. Where
recommendations are not implemented, document the rationale for
accepting risk, including any alternate strategies that are considered.
Given that the FBI will likely remain in the Hoover Building for at
least the next several years, we also recommend that the GSA
Administrator direct the Commissioner of the Public Buildings Service
to take the following action:
* Evaluate GSA's current strategy to minimize major repair and
recapitalization investments and take action to address any facility
condition issues that could put FBI operations at risk and lead to
further deterioration of the building, potentially affecting continued
use of the Hoover Building by the FBI or any future tenant.
Agency Comments and Our Evaluation:
We provided a draft of the law enforcement sensitive version of this
report to the Department of Justice, GSA, and DHS for review and
comment. In that law enforcement sensitive report we also recommended
that the Attorney General direct the FBI Director to update the Hoover
Building's security assessment using the 2010 ISC standards--to
include undertaking an analysis of its building security requirements,
documenting if threat scenarios exceed the ISC design-basis threat,
and indicating whether recommendations would be implemented. Given
that the FBI took action to address part of the recommendation--
subsequent to our July 2011 law enforcement sensitive report but prior
to this public version--we modified the recommendation to reflect the
FBI's recent security assessment. Specifically, the security
assessment documents threats and analyzes building security
requirements consistent with ISC security standards, but does not
indicate whether recommended actions will be implemented. This is
reasonable given the short period of time since our report and the
FBI's ensuing analysis. We therefore revised the first recommendation
above to focus on the need for the FBI to document decisions on the
2011 security assessment's recommendations.
Our July 2011 law enforcement sensitive report also recommended that
the FBI track the implementation status of all recommendations in FPS
or FBI security assessments. We will continue to monitor the FBI's
decisions and actions related to its security assessment of the Hoover
Building--and the security assessments of the FBI headquarters annexes-
-as indicated in the recommendations above.
For security reasons and for clarity, we made additional modifications
to the language used in the above recommendations to the Attorney
General compared to the language we used in our July 2011 law
enforcement sensitive report.
We received written comments from the FBI on our law enforcement
sensitive report on behalf of the Department of Justice. We also
received written comments from GSA and DHS on that report. The FBI
concurred with our recommendations and said that its primary concern
in finding a long-term solution for its headquarters facility needs is
to mitigate the operational impact of a fragmented workforce located
at multiple sites across a wide geographic area. The FBI also cited
concerns that its current headquarters housing is inefficient and
expensive, and stated that a new, consolidated headquarters facility
is one of the FBI's highest priorities. GSA indicated that it is
currently taking appropriate action to implement our recommendation
and remains committed to making all necessary investments in the
Hoover Building to ensure ongoing operations until a long-term
solution for the FBI can be developed. Written comments--on our law
enforcement sensitive report--from the FBI, GSA, and DHS are reprinted
with sensitive information redacted in appendixes IV through VI,
respectively. The FBI, GSA, and DHS provided additional clarifying and
technical comments, which we incorporated throughout the report as
appropriate in consideration of sensitivity concerns.
In addition, we provided a draft of this public report to the FBI,
GSA, and DHS for review. Those agencies provided no additional
comments.
We are providing copies of this report to appropriate congressional
committees, the Attorney General, the Director of the Federal Bureau
of Investigation, the Administrator of the General Services
Administration, the Secretary of Homeland Security, and other
interested parties. In addition, this report will also be available at
no charge on the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staffs have any questions about this report, please
contact David C. Maurer at (202) 512-9627, maurerd@gao.gov, or David
J. Wise at (202) 512-2834, wised@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 VII.
Signed by:
David C. Maurer:
Director, Homeland Security and Justice Issues:
Signed by:
David J. Wise:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
Congress directed us, in the explanatory statement accompanying the
2009 Omnibus Appropriations Act, to review the J. Edgar Hoover
Building (Hoover Building)--the main headquarters building for the
Federal Bureau of Investigation (FBI)--and the FBI's off-site
locations (annexes), which support headquarters and are dispersed
throughout the National Capital Region.[Footnote 71] We conducted our
review to examine (1) the extent to which the Hoover Building and
annexes support the FBI's operational requirements for security,
space, and building condition and (2) the extent to which the FBI and
the General Services Administration (GSA) have followed leading
capital decision-making practices in identifying alternatives for
meeting the FBI's operational requirements and the extent to which
each alternative would address these requirements.
To determine the extent to which the Hoover Building and annexes
support the FBI's operational requirements for security, space, and
building condition, we visited the Hoover Building and five annexes.
We selected the five annexes to represent different facility security
levels (FSL); different FBI divisions, such as Cyber and
Counterterrorism; and varying degrees of staff fragmentation. While
visiting these annexes, we examined security, space, and building
condition issues firsthand and interviewed on-site program and
security officials about the FBI's operational requirements and the
extent to which the annexes do, or do not, meet those needs.
For security-related issues at the five annexes, we reviewed site-
specific facility security assessments (security assessments) that
were conducted by either FBI security officials or the Department of
Homeland Security's Federal Protective Service (FPS) in relation to
Interagency Security Committee (ISC) security standards that are
applicable to owned and leased federal buildings. We also discussed
with FBI officials the extent to which countermeasures recommended in
those security assessments had been implemented. In our July 2011 law
enforcement sensitive report, we recommended that the FBI conduct a
new security assessment in accordance with updated security standards
issued in 2010. In response to our recommendation, the FBI conducted
such an assessment, which we also reviewed.
During our site visits, we interviewed FBI security officials about
the security assessments, security risks and challenges, and actual
security incidents or breaches at each facility. We also asked FBI
officials whether any security challenges at the annexes were a direct
result of operations not being colocated at the Hoover Building. To
learn more about security issues at the Hoover Building, we toured the
building while FBI officials reported on security vulnerabilities and
some countermeasure improvements that had been implemented, and we
interviewed FBI security, police, and facilities officials with
knowledge of these improvements.
In addition, we interviewed FBI security and facility officials about
outstanding security projects to determine why they had not been
implemented. To identify these projects, we reviewed FBI, FPS, GSA,
and National Capital Planning Commission documents, including the
FBI's 2002 security assessment of the Hoover Building, as well as
numerous FBI and GSA planning studies that identified security
requirements for the building. We interviewed FPS security officials
about the security standards for federal facilities, both past and
present, and the FSL determination process. We reviewed FPS's 2000
Policy Handbook and the ISC standards from 2004 and 2010. Furthermore,
we reviewed and analyzed GSA's design standards related to security.
[Footnote 72] In addition, we relied on internal security experts from
GAO's Office of Security and Forensic Audits and Investigative Service
to verify security assumptions and requirements.
For space-related issues, we reviewed the size and location of current
facilities and programs; reviewed FBI and GSA reports that tracked
annex leases, space use, and the Hoover Building's efficiency (how
much of its space is usable for mission needs) and how the existing
space does, or does not, meet the FBI's operational needs; and
interviewed FBI program officials to understand the effects on
operations of having different programs housed in several annexes. We
reviewed FBI and GSA planning studies that identified which FBI
programs or functions should be colocated. We compared attributes of
the Hoover Building, such as its efficiency, to GSA standards and
compared the Hoover Building to other agency headquarters in the
National Capital Region. We asked FBI officials about the systems they
use to manage their real property data and how frequently they update
their leasing and space planning data. We used GSA's asset business
plans to cross check the real property data reported to us by the FBI
to ensure reasonable consistency in the facility data, such as the
ownership status and size (i.e., square footage) of facilities.
Furthermore, we reviewed and analyzed GSA's design standards related
to building efficiency and space planning.
For building condition issues, we analyzed assessments of the Hoover
Building's physical condition and compared this information to GSA
policies for building condition. We also asked GSA how often it
conducts facility condition assessments of owned buildings. We
examined GSA's asset business plan and other studies of the Hoover
Building to identify completed maintenance projects, deferred
maintenance, and planned major repair and recapitalization projects.
We also asked FBI and GSA officials about their assessments of the
Hoover Building's condition.
To determine the extent to which the FBI and GSA have followed leading
capital decision-making practices in identifying alternatives for
meeting the FBI's operational requirements, we compared the FBI's and
GSA's planning actions against leading practices we have reported on
in this area.[Footnote 73] In addition, we reviewed FBI and GSA
studies of the FBI's facilities and operational requirements,
identified the alternatives discussed in these studies for meeting the
requirements, and reviewed relevant laws relating to real property. We
determined that the alternatives fell into three broad categories,
each of which included a number of variations. For our analysis, we
focused on the categories, since the appropriateness of the variations
could not be determined without further study and would depend on site-
specific conditions. We then assessed the extent to which each
alternative would address the FBI's security, space, and building
condition requirements.[Footnote 74]
We did not independently analyze the FBI's requirements for security,
which are based on its assessments of the threats it faces and their
probability of occurrence; its requirements for space, which are based
on its projections of each FBI program's future staffing and space
needs; or the FBI's process for deciding which programs need to be
colocated at a single location. In our view, such analyses were
outside the scope of our review and would require extensive reviews of
classified intelligence on threats and hostile groups, as well as of
programmatic mission justifications for FBI branches and their
associated staffing levels. We did, however, determine that the FBI
senior leadership was involved in deciding which FBI programs should
be colocated. Furthermore, because the FBI and GSA are still in the
early stages of the facility planning process and have not yet
prepared final cost estimates for the Office of Management and Budget
(OMB), we did not validate preliminary cost estimates for new
construction or past cost estimates for modernizing or redeveloping
the Hoover Building and site.
We conducted this performance audit from July 2010 to November 2011 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
[End of section]
Appendix II: FBI and GSA Studies Related to FBI Headquarters Planning:
This appendix provides summary information about eight studies that
provide information on the condition of the Hoover Building and the
FBI's facility needs. The studies, issued from 2001 through 2010, are
presented in chronological order.
1. Condition assessment, 2001:
In 2001, a facility engineering consultant conducted a facility
condition assessment for GSA of the Hoover Building and identified
numerous building deficiencies including deferred maintenance and life-
cycle replacement projects. The study concluded the building was in
poor condition. The contractor prepared three funding scenarios to
provide GSA with insight into how the condition of the building would
be affected based on various investment assumptions over 20 years. One
scenario included improving the building condition to an industry-
acceptable level.
2. Security assessment, 2002:
In 2002, the FBI conducted a security assessment of the building, and
with the assistance of two consultants, identified recommendations to
further improve the building's security.
3. Headquarters housing strategy, 2005:
In 2005, a real estate services consultant contracted by GSA studied
the FBI's facility needs. According to the consultant, the FBI's
mission was impaired by a fragmented headquarters organization that
caused staff to be dispersed across the Hoover Building and 16 annexes
at that time in the National Capital Region. In addition, the
consultant documented space inefficiencies in the Hoover Building. To
address these deficiencies, the consultant developed a strategic
housing plan and facility requirements for FBI headquarters. These
requirements included:
* meeting ISC security standards,
* making maximum use of open-plan office space,
* providing enough secure space for handling classified information,
* planning building systems to support current and future information
technology needs, and:
* providing extensive emergency backup power as well as state-of-the-
art air filtration systems.
The consultant developed three consolidation alternatives[Footnote 75]
for addressing identified deficiencies and meeting the FBI's
headquarters facility needs based on projected 2011 staffing levels:
[Footnote 76]
* one-site consolidation with both headquarters national security and
law enforcement located together;
* two-site consolidation (option A) with national security functions
at one site and law enforcement functions at a second site; and:
* two-site consolidation (option B) with a more even distribution of
FBI headquarters elements (compared to option A) and no split between
national security and law enforcement functions.
A preliminary financial analysis, which estimated the net present
value of savings for each alternative over 30 years, showed that each
alternative was more economically beneficial than the status quo. The
savings were largely due to the planned consolidation of 3.1 million
rentable square feet into 2.3 million rentable square feet.[Footnote
77]
According to a draft timeline, it would take nearly 3 years for GSA to
complete its analysis, develop a project prospectus for congressional
authorization, and identify a site. Another 3 years was estimated for
design, construction, and move-in.
Citing detailed cost estimates for a project of similar size for
another intelligence agency, the consultant predicted a total project
cost of over $1.5 billion.
4. Site study, 2006:
In 2006, another real estate services consultant hired by GSA studied
a range of scenarios for use of the Hoover Building and site. This
study was intended to inform GSA management decisions on optimizing
the value of the Hoover Building as a GSA real property asset and was
not necessarily performed to identify alternatives for meeting the
FBI's headquarters facility needs. The study did, however, consider
the impact on operations if the FBI remained as the building tenant.
The consultant identified five scenarios:
* maintain and operate the building "as is,"
* vacate the building and sell the asset,
* modernize the building,[Footnote 78]
* vacate and demolish the building and redevelop the site,[Footnote
79] and:
* partially demolish the building to redevelop the front side facing
Pennsylvania Avenue and renovate the back portion that faces E Street.
[Footnote 80]
Estimated costs to modernize the Hoover Building ranged from $850
million to $1.1 billion. Estimated costs to demolish the Hoover
Building and redevelop the site ranged from $853 million to $1.4
billion.[Footnote 81]
The study concluded that no alternative was a definite best option for
GSA.
The study reported that a modernization, in general, would not improve
the building's gross and rentable square footage. In addition, this
alternative would create a demand for swing space and could adversely
affect the FBI's operations if the FBI remained as the building's
tenant during the modernization. According to the study, the
modernization would be least costly if the FBI vacated the entire
building to give the construction contractor unrestricted access.
According to the study, redeveloping the site with a new building or
buildings would not meet GSA's required rate of return on investment,
and constructing a new secure facility would sacrifice tremendous
value associated with a highly marketable location.
5. Space study, 2007:
In 2007, GSA hired an architectural design and planning consultant to
assess the condition of the Hoover Building and determine the extent
to which it supports the FBI's mission. The consultant assessed the
Hoover Building's design and use of space against industry standards
and compared the Hoover Building to facilities used by other
intelligence agencies.
According to the report, the FBI's work process is dynamic, requiring
intelligence gathered by one team to be shared with multiple teams for
whom the intelligence may also be relevant. To respond to the FBI's
work process and mission, the consultant determined that the FBI's
workplace should promote collaboration and communication among staff
and be easily reconfigured. The study found that the Hoover Building
does not generally meet these criteria because of its structural
characteristics and inherent inefficiencies. For example, the study
found that aspects of the building--including the location of
structural elements and hard wall partitions--result in an inherently
inefficient use of space. According to the consultant, these
characteristics limit the degree to which the FBI can reconfigure
space to optimize its operations and respond to mission changes. The
consultant concluded that the Hoover Building is a significant barrier
to the FBI's performance and operational effectiveness and no longer
effectively supports the FBI's mission.
The consultant also indicated that the renovations necessary to make
the Hoover Building viable, feasible, and desirable may be
unjustifiable given the costs and disruption they would entail. The
consultant concluded that relocating the FBI to a new facility would
likely lead to a significant improvement in performance at a lower
cost.
6. Real estate appraisal, 2008:
In 2008, GSA hired a real estate appraisal firm to develop a market-
value opinion of the Hoover Building and site to inform GSA's asset
management strategy. The appraisal firm considered three valuation
approaches: (1) a cost approach; (2) a sales comparison approach; and
(3) an income capitalization approach.[Footnote 82]
The appraisal firm described the construction quality of the existing
building as average and the condition of the building as below
average. It also found the building inferior to other office buildings
constructed during the same period. In particular, the consultant
reported the building windows are very small compared to modern office
building windows and that larger windows are generally required to
attract tenants to higher-priced leased space. The firm reported that
GSA had estimated a cost of over $200 million to modify the structure
and replace its windows.
GSA provided the appraisal firm with a list of planned
recapitalization projects totaling over $460 million, to be
implemented over 10 years; however, the appraiser reported that GSA's
Property Manager had indicated that, for lack of funds, none of the
planned capital expenditures would likely be made. Therefore, the
appraiser did not consider the value of any planned recapitalization
projects in the estimated value. However, the appraiser reported that
even if the planned capital expenditures were made, the Hoover
Building would not be considered a Class A office building.[Footnote
83]
The appraiser reported that the site was zoned to permit retail,
office, housing, mixed, and public uses, and the appraiser concluded
that no reasonably probable use of the site would be likely to
generate a higher value than office use. Accordingly, the appraiser
identified office use, developed to the level permitted by the zoning,
as the highest and best use of the property.
The appraiser reported that the site, if redeveloped, could
accommodate a building area of approximately 2.5 million gross square
feet based on the current zoning regulations. The appraiser also noted
that the existing Hoover Building is 2.4 million gross square feet and
therefore a building on the redevelopment site would likely be similar
in size. The appraiser noted that the existing building is set back
farther from Pennsylvania Avenue greater than is typical for a
commercial office building downtown but not far enough where
demolishing the building to capture the space would be cost-effective.
Redevelopment would enable a developer to construct a new Class A
office building.
7. Relocation study, 2009:
In 2009, the FBI contracted with an architectural and planning firm to
develop a housing plan, space requirements program, and conceptual
site plans for consolidating its headquarters in a new facility onto a
single site. While the 2005 GSA study examined space requirements at a
macro level, it did not provide a detailed housing plan and space
requirements program. Thus, to more fully define its requirements, the
FBI established goals for the 2009 study. These goals were to:
* develop a housing plan that identified the FBI branches and
divisions to be located on-site;
* summarize staffing levels by branch and division, including both FBI
personnel and contractors;
* summarize future staffing growth factors;
* develop space-planning standards and workspace types;
* develop a space requirements program for branches and divisions
based on those staffing and space standards;
* identify required adjacencies;
* outline common shared support spaces and special space requirements;
* recommend an ideal floor plate size for a new building that would
maximize future flexibility;
* identify circulation factors for the building;
* calculate total gross and usable square footage of a new facility;
* develop conceptual site plans; and:
* identify design criteria, including Leadership in Energy and
Environmental Design, security, and building code requirements.
The consultant collected data by walking through the FBI's
headquarters spaces, using a space requirements questionnaire, and
interviewing FBI personnel in the facilities, security, and
information technology groups to verify information from the
questionnaire. Each FBI branch and division reviewed the consultant's
data.
Using FBI personnel counts from 2008 with projections for future
growth through 2013 and 2018, the consultant derived overall square
footage tabulations. FBI's Resource Planning Office provided the
personnel counts and growth projections.
Based on the space and security requirements for the main headquarters
building, the consultant developed planning estimates for the site
acreage required.
The consultant developed two site concepts: (1) a suburban office
campus and (2) a more urban site located near the Washington beltway.
Preliminary cost estimates for a new headquarters were developed based
on the consultant's analyses of space and security requirements. FBI
costs for special security equipment, communications and information
systems, modular systems furniture, and moving were not included in
the construction-related costs but were separately estimated and are
not considered GSA project costs.
Land costs were estimated on the basis of comparable land sales over
the past several years in a variety of locations inside and outside
the beltway. The suburban and beltway property costs were each
averaged to determine average expected prices. The land costs were
added to the GSA project cost summary and increased by 10 percent to
reflect potential increases in land value, which may occur before a
property is acquired.
The study identified a need for a headquarters facility containing an
estimated 2.6 million gross square feet--including 2.1 million usable
square feet--to house nearly 11,600 personnel. Required site sizes
were estimated at between 55 and 65 acres based on zoning assumptions
for suburban and more urban locations.
8. Consolidation report (Final Draft), 2010:
In 2010, the FBI's Facilities and Logistic Services Division prepared
an executive-level report to summarize past FBI and GSA findings and
conclusions about the Hoover Building and both agencies' studies of
the need for a new headquarters facility. The report was intended to
update FBI leadership on the current headquarters planning, costs, and
recommendations prior to discussions with GSA and OMB. The report
outlines a range of acquisition strategies that GSA and the FBI could
use to acquire a new consolidated headquarters and identifies the
FBI's preferred strategy.
According to the report, the FBI's mission-critical headquarters
operations are dispersed in 22 separate locations including the Hoover
Building, up from 17 when GSA first studied the issue in 2005. Citing
space and staffing requirements, the report identifies the need for a
facility with 2.5 million gross square feet, 2.2 million rentable
square feet, and 1.9 million usable square feet to house an estimated
11,500 personnel. The report further anticipates a reduction of
approximately 873,400 rentable square feet when the 22 current
locations are consolidated, as well as an estimated annual savings of
at least $30 million in leased housing costs.
[End of section]
Appendix III: Financing Strategies Available for Capital Projects:
This appendix describes potential financing strategies that may be
considered in acquiring a new headquarters for the FBI.
Federal Construction Using the Federal Buildings Fund:
* Construction or modernization is funded through GSA's Federal
Buildings Fund (FBF).
* We have previously reported that although ownership through federal
construction is often the most cost-effective option,[Footnote 84]
pursuant to budget scoring rules, the full cost of construction of a
capital project is recorded up front in the budget.
* The FBF is the primary means of financing the operating and capital
costs associated with federal space owned or managed by GSA. GSA's
Public Buildings Service charges federal agencies rent, the receipts
of which are deposited in the FBF. Congress exercises control over the
FBF through the annual appropriations process, setting annual limits
on how much of the fund can be used for various activities. In
addition, Congress may appropriate additional amounts for the FBF.
Among the activities the FBF is used for are new construction,
building repairs and alterations, building operations, and rental of
space.
Lease of Federal Site to a Developer Who Constructs a Facility On-site
and Leases It Back to the Government (i.e., Ground Lease and
Leaseback):
* GSA officials report that lease construction by a developer could be
pursued using GSA real property authorities in 40 U.S.C. § 585(c) or
Section 412 of Public Law 108-447 (hereafter referred to as Section
412).[Footnote 85]
* 40 U.S.C. § 585(c) authorizes GSA to lease federal property--for not
more than 30 years--to a developer who would build a facility on a
site owned by the government and lease it back to GSA. The title to
the parcel never leaves government ownership, and at the expiration of
the lease, the title to the building passes to the United States.
* Section 412 provides GSA with new, additional authorities to dispose
of and use its real property inventory by sale, lease, exchange, and
leaseback arrangements. Section 412 does not specify any limit on the
term of the lease.
* According to GSA, it has attempted to use 40 U.S.C. § 585(c) only
once as a development authority, and it ultimately did not complete
the project using this authority. GSA has never used Section 412 as a
development authority.
* Section 412 also authorizes GSA to retain the net proceeds from its
real property disposals. Section 412 might enable GSA to use the
proceeds of a sale--if the existing Hoover Building or site were sold--
to pay for some of a new project's costs.
* How a leaseback is structured will determine how it is scored, and
it may be treated as a capital lease with the amount equal to the
asset cost recorded up front in the budget.[Footnote 86]
* Given the current budgetary environment, this type of arrangement
may be more feasible now than in the past. Furthermore, even though
GSA told us that it almost always recommends the traditional funding
strategy--federal construction--it has said that in the current
budgetary environment, it believes that alternative strategies such as
a ground lease and leaseback arrangement may need to be considered.
* FBI officials believe that if a ground lease and leaseback
arrangement were to be pursued, the agency may be able to move into a
new consolidated facility 2 or 3 years earlier than it could with a
direct federal appropriation for design and construction, given the
demands on the FBF.
Lease Construction (i.e., Leasing):
* The government acquires space through an operating lease.
* The government has no ownership of the land or the facility at any
time.
* We have previously reported that operating leases tend to be the
most expensive approach to meeting long-term federal space needs and
that over the last decade, GSA has relied heavily on operating leases
to meet new long-term needs because it lacks funds to pursue
ownership.[Footnote 87] GSA currently leases more space than it owns.
Use of this approach has grown because only the annual lease payment
needs to be recorded in GSA's budget request, reducing the up-front
funding commitment but generally costing the federal government more
over time.
[End of section]
Appendix IV: Comments from the Federal Bureau of Investigation:
U.S. Department of Justice:
Federal Bureau of Investigation:
Washington, D.C. 20535-0001:
June 30, 2011:
Mr. David C. Maurer:
Director, Homeland Security and Justice:
United States Government Accountability Office:
441 G Street, Northwest:
Washington, D.C. 20548:
Mr. David J. Wise:
Director, Physical Infrastructure:
United States Government Accountability Office:
441 G Street, Northwest:
Washington, D.C. 20548:
Dear Messrs. Maurer and Wise:
The Federal Bureau of Investigation (FBI) appreciates the opportunity
to review and respond to your draft report [Redacted].
The Report presents factual information on the poor physical condition
and security shortcomings of the J. Edgar Hoover FBI Building and the
numerous FBI headquarters offsite locations. However, the operational
impact of a fragmented workforce located at multiple sites across a
wide geographic area is the FBI's primary concern and is the driving
force behind our urgency of finding a long term resolution to this
situation.
The FBI headquarters today is dispersed in over 40 separate locations
including 22 locations in the National Capital Region which need to be
consolidated into a central headquarters facility. The J. Edgar Hoover
FBI Building, which has exceeded its capacity, houses just 52% of
headquarters staff with the remainder at 21 off-site leased locations.
This dispersion has created significant challenges with regard to
effectively managing the Bureau's headquarters' divisions and offices,
facilitating organizational change, sharing information and
collaboration across operational and administrative functions.
The FBI's current headquarters housing is both inefficient and
expensive. The inadequate design of the J. Edgar Hoover Building does
not support an agile workforce in the 21st Century. This poor design
coupled with the redundancies and the inefficiency associated with 22
separate locations, 3,092,654 Rentable Square Feet (RSF), costing over
$170 million annually in rent and operating expenses support the need
for a new FBI Headquarters. [Redacted]
Our analysis and recently commissioned outside study indicates what
efficiencies gained from consolidation and an "open office" design
plan, overall required square footage to house the FBI headquarters
could be reduced by almost 900,000 RSF, with estimated savings to the
US Government of $47-$59 million annually.
The FBI cannot afford to continue the status quo. from an operational
effectiveness or a fiscal stewardship perspective. A new consolidated
FBI headquarters facility is urgently needed and we view this as one
of our highest priorities for the foreseeable future.
In conclusion, the efforts of the GAO in completing this Report are
greatly appreciated. Upon review of the Report, the FBI concurs with
the two recommendations directed to the FBI.
Sincerely,
Signed by:
T. J. Harrington:
Associate Deputy Director:
[End of section]
Appendix V: Comments from the General Services Administration:
GSA:
The Administrator:
U.S. General Services Administration:
1275 First Street, NE:
Washington, DC 20417:
Telephone: (292) 501-0300:
Fax: (202) 219-1243:
June 27, 2011:
The Honorable Gene L. Dodaro:
Comptroller General of the United States:
Government Accountability Office:
Washington, DC 20548:
Dear Mr. Dodaro:
The U.S. General Services Administration (GSA) appreciates the
opportunity to comment on the draft U.S. Government Accountability
Office (GAO) report [Redacted]. In addition to recommendations made to
the Department of Justice and the Federal Bureau of Investigation
(FBI), the report recommends that the Commissioner of the Public
Buildings Service take the following action:
Evaluate GSA's current strategy to minimize major repair and
recapitalization investments and take action to address any facility
condition issues that could put FBI operations at risk and lead to
further deterioration of the building that could affect continued use
of the Hoover Building by the FBI or any future tenant.
GSA is taking appropriate action to implement this recommendation. We
give priority to both life safety projects and other work necessary to
maintain tenancy in the building. GSA remains committed to making all
necessary investments to ensure ongoing operations until a long-term
solution for FBI can be developed. In addition, enclosed are technical
comments that update and clarify statements in the draft report.
If you have any additional questions or concerns, please do not
hesitate to contact me or Mr. Robert A. Peck, Commissioner, Public
Buildings Service. Mr. Peck can be reached at (202) 501-1100. Staff
inquiries may be directed to Mr. Flavio Peres, Deputy Assistant
Commissioner for Portfolio Management. Mr. Peres can be reached at
(202) 208-1280.
Sincerely,
Signed by:
Martha Johnson:
Administrator:
Enclosure:
[End of letter]
GAO Draft Report for Agency Comment GSA Technical Comments 6.14.11:
[Redacted paragraph]
Page 20:
Reference: "Although the Hoover Building is nearing its life-cycle age
and exhibiting signs of deterioration, GSA has decided to limit major
repair and recapitalization investments to those systems or components
that affect life safety and building functionality until it is
determined whether the FBI will remain a long-term occupant of the
building."
Comment: GSA has made appropriate mid-term investments to ensure FBI
operations aren't at risk and remains committed to making all
necessary investments to ensure ongoing operations until a long-term
solution can be developed. This strategy provides for maintaining the
asset as functional for the FBI's headquarters, reducing conditions
that put FBI operations at risk, and addressing life safety issues.
Page 22:
Reference: "GSA's decision to limit major repair and recapitalization
investments is inconsistent with its categorization of the Hoover
Building in its asset business plan as a "core asset." GSA core assets
generally have a long-term holding period of at least 15 years. For
buildings with a long-term holding period, GSA policy states that
reinvestment will be funded to ensure maintenance of the building's
quality and condition at levels appropriate to meet continuing mission
and customer needs. This includes all preventative maintenance,
necessary upgrades, and enhancements to the building and its systems
to maintain the asset in appropriate condition. GSA's near-term
maintenance policy for the Hoover Building is more consistent with
GSA's policy for a "transition" asset. A transition asset typically
has a 6- to 15-year holding period as its tenant prepares for
relocation to a new federal building or a leased building. For such an
asset, GSA funds projects that meet basic needs in transition, but
avoids any major reinvestment. According to GSA officials, the Hoover
Building's categorization could change as they continue to study the
FBI's needs and the building's potential for reuse by another agency
should the FBI relocate to a new facility. While the categorization of
the Hoover Building as a core asset could change, the building will
likely be used for several more years, and its large backlog of
deferred maintenance, major repairs, and recapitalization requirements
increases the potential for systems or components to fail and
potentially disrupt FBI operations."
Comment: During the course of its recent review of this asset, GSA has
changed the portfolio segment category of the Hoover building to
"Transition" to reflect FBI's determination that the building is
functionally obsolete for their purposes. This change more accurately
reflects the asset's recent investment strategy. However, this
categorization may change depending on the prospect of FBI vacating
the building and/or further study of the asset.
[End of section]
Appendix VI: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
June 23, 2011:
Mr. David C. Maurer:
Director:
Homeland Security and Justice:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Re: Draft Report [Redacted]
Dear Mr. Maurer:
Thank you for the opportunity to review and comment on this draft
report. The U.S. Department of Homeland Security (DHS) appreciates the
U.S. Government Accountability Office's (GAO's) work in planning and
conducting its review and issuing this report.
The Department is pleased to note the report's positive acknowledgment
of the DHS role as Chair of the Interagency Security Committee (ISC),
tasked in part with developing baseline facility security standards
and coordinating federal agencies' facility protection efforts. The
report also recognizes the role of DHS's Federal Protective Service
(FPS) in conducting periodic security assessments of federal buildings
such as the Federal Bureau of Investigation's (FBI's) Hoover Building.
Although the report does not contain any recommendations specifically
directed at DHS, the Department remains committed to continuing its
work with interagency partners, such as the FBI and the General
Services Administration, to identify and mitigate security-related
vulnerabilities at federal facilities, as appropriate. For example,
FPS is prepared to assist the FBI in updating the Hoover Building's
security assessment using the 2010 ISC standard, if called upon to do
so.
Again, thank you for the opportunity to review and comment on this
draft report. We look forward to working with you on future homeland
security issues.
Sincerely,
Signed by:
Jim H. Crumpacker:
Director:
Departmental GAO/OIG Liaison Office:
[End of section]
Appendix VII: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
David C. Maurer, Director, Homeland Security and Justice Issues, (202)
512-9627 or maurerd@gao.gov:
David J. Wise, Director, Physical Infrastructure Issues, (202) 512-
2834 or wised@gao.gov:
Staff Acknowledgments:
In addition to the individuals named above, Michael Armes, Assistant
Director; Sandra Burrell, Assistant Director; John Bauckman, Analyst-
in-Charge; Kevin Craw; Daniel Hoy; Bess Eisenstadt; Susan Michal-
Smith; Linda Miller; Sara Ann Moessbauer; Joshua Ormond; Thomas
Predmore; and Janet Temko made key contributions to this report.
[End of section]
Footnotes:
[1] Explanatory statement in the 2009 Committee Print of the House
Committee on Appropriations on H.R. 1105, at 1764 accompanying the
2009 Omnibus Appropriations Act, Pub. L. No. 111-8, Div. B, Title II,
123 Stat. 524, 574 (2009).
[2] GAO has reported that buildings require adequate maintenance,
repair, and recapitalization--replacing systems at the end of their
useful life--to keep them in good condition. See GAO, Federal Real
Property: Government's Fiscal Exposure from Repair and Maintenance
Backlogs Is Unclear, [hyperlink,
http://www.gao.gov/products/GAO-09-10] (Washington, D.C.: Oct. 16,
2008).
[3] An asset business plan is a repository for critical facts about a
GSA asset and is used to guide business decisions and to track the
asset's financial performance and progress toward mandated building
performance criteria.
[4] Since 1994, GSA has delegated routine maintenance and operations
authority for the Hoover Building to the FBI, but GSA retains
responsibility for major capital repair and replacement projects in
the building. One of GSA's objectives as the government's real
property steward is that the physical condition of federal buildings
will be maintained to reflect market standards. In general, the
responsibility for maintenance and repair of the annexes resides with
the building landlord, and therefore we did not assess the physical
condition of annex spaces.
[5] Our assessment was based on past GAO work, including Executive
Guide: Leading Practices in Capital Decision-Making, [hyperlink,
http://www.gao.gov/products/GAO/AIMD-99-32] (Washington, D.C.: Dec. 1,
1998); Public-Private Partnerships: Factors to Consider When
Deliberating Governmental Use as a Real Property Management Tool,
[hyperlink, http://www.gao.gov/products/GAO-02-46T] (Washington, D.C.:
Oct. 1, 2001); and Budget Issues: Alternative Approaches to Finance
Federal Capital, [hyperlink, http://www.gao.gov/products/GAO-03-1011]
(Washington, D.C.: Aug. 21, 2003).
[6] This moat is a trench that helps to limit how close pedestrians
and vehicles can get to the building and directs access to specific
entry points.
[7] Staff counts include both federal and contractor positions.
[8] A few FBI headquarters annexes are located outside the National
Capital Region.
[9] The other FBI annexes that are not proposed to be colocated house
functions such as warehousing, records management, continuity of
operations, and a van shop.
[10] Following the bombing of the Alfred P. Murrah federal building in
Oklahoma City, Executive Order 12977 was issued and called for the
creation of an interagency security committee to address the quality
and effectiveness of physical security requirements for federal
facilities by developing and evaluating security standards.
[11] ISC, "2004 ISC standards" (Washington, D.C.: 2004).
[12] ISC, "2010 ISC standards" (Washington, D.C.: 2010).
[13] The ISC released its 2010 standards as an interim standard with a
24-month validation period. The validation period is intended to allow
for user input to inform the final standard.
[14] In those instances, the facilities were constructed on a
Department of Defense site in Quantico, Virginia.
[15] 40 U.S.C. § 584 provides that the Administrator of General
Services may assign or reassign space for an executive agency in any
federally owned or leased building after consultation with the head of
the affected agency and a determination by the Administrator that the
assignment or reassignment is advantageous to the government in terms
of economy, efficiency, or national security.
[16] The fiscal year 2011 threshold for proposed new construction,
alterations, and leases was $2.79 million.
[17] A prospectus is a document containing project and cost
information that GSA submits to the Office of Management and Budget
and Congress for approval as part of the authorization process for new
construction or leasing projects.
[18] The FBF is a revolving fund managed by GSA that finances--from
rent charged to occupants of GSA-controlled space--real property
management and related activities of GSA's Public Buildings Service.
Principal activities include the operation, maintenance, and repair of
GSA-owned and -leased buildings and the construction of new federal
facilities. The FBF also provides for the rental of space in privately
owned buildings. In this report, we refer to property that is owned by
the federal government and under the control and custody of GSA as GSA-
owned property.
[19] If an agency enters into a lease with a private building owner or
through another federal agency, the agency would pay rent directly to
one of those entities and not to GSA.
[20] Under a sale-leaseback arrangement, a federal agency sells an
asset and then leases back some or all of the asset from the purchaser.
[21] Under a ground lease and leaseback arrangement, a federal site is
leased to a developer and a facility is constructed to government
specifications and leased back to the government. The title to the
parcel never leaves government ownership. At the expiration of the
lease, the title to the building passes to the United States.
[22] 40 U.S.C. § 585(c) authorizes GSA to lease a federal site to a
developer and then pay rent for space, for a period of not more than
30 years, in buildings erected on land owned by the government. Also,
Section 412 of Pub. L. No. 108-447 118, Stat. 2809, 3259, enacted in
2004, provides GSA with additional authority to dispose of and use its
real property by various means, including leaseback arrangements.
[23] GAO, Federal Buildings: Funding Repairs and Alterations Has Been
a Challenge--Expanded Financing Tools Needed, [hyperlink,
http://www.gao.gov/products/GAO-01-452] (Washington, D.C.: Apr. 12,
2001).
[24] GAO, Public-Private Partnerships: Pilot Program Needed to
Demonstrate the Actual Benefits of Using Partnerships, [hyperlink,
http://www.gao.gov/products/GAO-01-906] (Washington, D.C.: July 25,
2001). In addition, Congress may also appropriate moneys from the
General Fund of the Treasury to the FBF as it deems necessary.
[25] GAO, Federal Real Property: Reliance on Costly Leasing to Meet
New Space Needs Is an Ongoing Problem, [hyperlink,
http://www.gao.gov/products/GAO-06-136T] (Washington, D.C.: Oct. 6,
2005).
[26] Our previously issued law enforcement sensitive report contains
additional information on the security posture of the Hoover Building
and the FBI's security requirements.
[27] We have previously reported on the challenges associated with
protecting leased space in facilities with nonfederal tenants, such as
the lack of control over common areas like building lobbies and
elevators.This lack of control stems, in part, from the inability of
federal tenants to negotiate changes to those areas, such as the
installation of X-ray machines, because private landlords frequently
believe that such countermeasures would inconvenience other tenants
and the public. See GAO, Building Security: New Federal Standards Hold
Promise, But Could Be Strengthened to Better Protect Leased Space,
[hyperlink, http://www.gao.gov/products/GAO-10-873] (Washington, D.C.:
Sept. 22, 2010).
[28] GAO, Homeland Security: Further Actions Needed to Coordinate
Federal Agencies' Facility Protection Efforts and Promote Key
Practices, [hyperlink, http://www.gao.gov/products/GAO-05-49]
(Washington, D.C.: Nov. 30, 2004).
[29] GAO, Homeland Security: Greater Attention to Key Practices Would
Improve the Federal Protective Service's Approach to Facility
Protection, [hyperlink, http://www.gao.gov/products/GAO-10-142]
(Washington, D.C.: Oct. 23, 2009).
[30] For those FBI annexes under the control or custody of GSA, the
extent to which FPS assesses the security of the building depends on
whether the FBI is the sole tenant or one of several federal tenants.
In cases where the FBI is the sole tenant in the facility, the FBI
usually signs a waiver stating that the FBI is responsible for
conducting its own assessments. FPS officials stated that for
multitenant buildings, FPS normally assesses the security of the
facility's exterior and the common areas within the building, but does
not enter the office space in which the FBI conducts its operations.
[31] See footnote 13.
[32] Usable square footage is space that is generally assignable for
the tenant's use, such as office space, conference rooms that are not
shared, computer server rooms, and tenant storage areas. It does not
include nonassignable space, such as vertical ducts and public
elevators and stairs.
[33] GSA, "Space study" (unpublished study, 2007).
[34] GSA, "Real estate appraisal" (unpublished opinion, 2008).
[35] A floor plate refers to the entirety of the floor layout,
including both the usable space and the nonassignable space. The
design of the nonassignable space and the size of the building
elements within that space, such as elevators and stairs, influence
the space efficiency of the building.
[36] GSA, Facilities Standards for the Public Buildings Service
(November 2010).
[37] GSA defines space efficiency as the minimum necessary space for
an agency's desired functions to be properly accommodated, with
minimum "waste" between usable area and gross area.
[38] GSA, "Building evaluation" (unpublished study, 2011).
[39] In 2007, the Commission of Fine Arts requested that GSA revise
the proposed design to address the commission's concerns about
proposed architectural details. Established in 1910 by an act of
Congress, the commission reviews and approves designs for buildings
erected by the federal government in the nation's capital.
[40] GSA, "Space study" (2007).
[41] FBI space-programming studies show that if the FBI were to
consolidate into more efficient, modern space, it would need
approximately 2.2 million rentable square feet compared with the 3.1
million rentable square feet that it occupies today in the Hoover
Building and 21 off-site annexes.
[42] At one location we visited, where the FBI leases space from
another intelligence agency, FBI officials identified "smart walls"
that can easily be modified to meet new task forces' operational and
security requirements. For example, one official said that the FBI
transformed a conference room area into secure office space for 15
workstations within a week.
[43] GSA, The New Federal Workplace: A Report on the Performance of
Six Workplace 20-20 Projects (Washington, D.C.: June 2009).
[44] In 2004, the FBI Director proposed the establishment of a
Facilities and Logistic Services Division to consolidate and
standardize real property management throughout the FBI. In June 2005,
the Attorney General approved the establishment of this division.
Within that division, a headquarters Space Management Unit was created
to better manage the growth in FBI headquarters space needs by
standardizing and formalizing space assignments, allocations, and
projections, and by coordinating new leasing actions.
[45] The National Research Council has reported that facilities and
their building systems--such as the electrical system--generally have
a finite, expected useful life, over which time proper maintenance
should occur and after which time the systems may need to be replaced.
Most buildings are designed for a minimum service life of 30 years,
but with proper maintenance may perform for 40 to 100 years.
[46] In 2010, GSA awarded a maintenance contract that provides for
routine operations and maintenance of the heating, ventilation, and
cooling systems in the Hoover Building.
[47] Since 2004, GSA has completed or is in the process of completing
several recapitalization projects at the Hoover Building, including an
$11.4 million chiller replacement, a $5 million upgrade to the
building's electrical closets, and a $5.2 million project to install
energy-efficient lighting.
[48] GSA's Public Buildings Service assesses the physical condition of
GSA assets regularly through the use of a physical condition survey.
Every 2 years, a team of Public Buildings Service associates,
including the asset manager and the property manager, physically
inspect a building to assess its current condition and needs and to
document changes in condition over time using a series of questions
contained in the survey.
[49] GSA plans to treat the building's concrete façade with a chemical
consolidant to make it less porous and thus less susceptible to
deterioration.
[50] GSA, "Asset Business Plan for the J. Edgar Hoover Building"
(unpublished plan, May 24, 2010).
[51] GSA, "FY10 Asset Management Plan" (unpublished plan, 2010).
[52] See [hyperlink, http://www.gao.gov/products/GAO/AIMD-99-32]. We
developed our leading practices for use in conjunction with the Office
of Management and Budget's Capital Programming Guide, a supplement to
its Circular A-11, which provides detailed guidance to federal
agencies on planning, budgeting, acquiring, and managing capital
assets.
[53] As we discussed earlier in this report, the FBI updated its
security assessment of the Hoover Building in 2011.
[54] Executive Order 13327, Federal Real Property Asset Management,
issued February 4, 2004, required agencies to develop and implement an
agency asset management plan that would identify actions to be taken
to improve the operational and financial management of the agency's
real property inventory and give consideration to a number of real
property issues. These issues include the (1) acquisition costs of
real property assets; (2) operating, maintenance, and security costs
at federal properties; (3) disposal of real property excess to
agencies' needs; (4) opportunities for cooperative arrangements with
the commercial real estate community; and (5) enhancement of federal
agency productivity through an improved working environment.
[55] According to the FBI, efforts to improve collaboration and
communication also respond to recommendations--made to the nation's
intelligence community--by the National Commission on Terrorist
Attacks Upon the United States and the Commission on the Intelligence
Capabilities of the United States Regarding Weapons of Mass
Destruction.
[56] GSA, "Space study" (2007).
[57] Presidential Memorandum--Disposing of Unneeded Federal Real
Estate (June 10, 2010).
[58] The FBI's space standards call for an average workstation of 49
square feet (7 feet by 7 feet).
[59] Our review of FBI planning documents shows that the FBI
considered using alternative workplace strategies--such as
teleworking--to help address its space needs but determined that
because most of its work is highly classified, teleworking is not a
practical option and also does not support its mission need to bring
teams together.
[60] GSA's federal workplace goals for the next decade call for open-
space floor plans that promote collaboration and provide greater
flexibility to reconfigure space to meet the changing needs of
building occupants.
[61] GSA, "Site study" (unpublished study, 2006).
[62] GSA, "Site study" (2006).
[63] GSA, "FBI headquarters housing strategy" (unpublished study,
2005); FBI, "Relocation study" (unpublished study, 2009); and FBI,
"Consolidation report" (unpublished, final draft report, 2010).
[64] Some alternatives included variations. For example, the
modernization alternative included four variations that ranged from
vacating the entire building during the renovation to renovating the
occupied building floor by floor.
[65] See [hyperlink, http://www.gao.gov/products/GAO/AIMD-99-32].
[66] The FBI would also need to identify its contributions to the
other related project costs that are not part of the design and
construction estimate--such as the costs of moving, systems furniture,
and security equipment. Funding for these costs would be requested
separately through the FBI's budget submission.
[67] OMB Circular A-11, Part 7, "Planning, Budgeting, Acquisition, and
Management of Capital Assets" indicates that in selecting the best
capital asset, agencies should identify at least three viable
alternatives in addition to a baseline representing the status quo. In
addition, agencies should identify specific qualitative benefits, as
well as quantitative costs and benefits, to be realized.
[68] GSA would need to consult with OMB as to whether the disposition
or reuse of the Hoover Building and site should be factored into the
business case analysis.
[69] The prospectus shall include, among other things, a brief
description of the space, the location of the space, an estimate of
the maximum cost to the United States, and a statement of how much the
government is already spending to accommodate the employees who will
occupy the space. Prospectus requirements also apply to alterations of
public buildings. For large federal construction projects, GSA
typically submits an initial prospectus to request authorization for
site acquisition and design funding and a second prospectus for
construction funding. See 40 U.S.C. § 3307.
[70] If a facility were constructed by a developer and leased for the
FBI's use, annual rent would be requested by the FBI in the
appropriate budget year to coincide with its occupancy of the new
facility. Rent is then paid to GSA and deposited into the FBF. GSA
then pays the landlord from the FBF.
[71] Explanatory statement in the 2009 Committee Print of the House
Committee on Appropriations on H.R. 1105, at 1764 accompanying the
2009 Omnibus Appropriations Act, Pub. L. No. 111-8, Div. B, Title II,
123 Stat. 524, 574 (2009).
[72] GSA, Facilities Standards for the Public Buildings Service
(November 2010).
[73] See GAO, Executive Guide: Leading Practices in Capital Decision-
Making, [hyperlink, http://www.gao.gov/products/GAO/AIMD-99-32]
(Washington, D.C.: Dec. 1, 1998).
[74] See [hyperlink, http://www.gao.gov/products/GAO-03-1011].
[75] Each of the three consolidation alternatives would provide
approximately 2.3 million rentable square feet of space. Each of the
three consolidation alternatives also included a small downtown
Washington, D.C., location for elements that need to coordinate
closely with Congress, the Department of Justice, or the White House
as well as an administrative annex outside the downtown area.
[76] Staffing projections assumed an annual growth rate of 5 percent
during fiscal years 2005 through 2011. The projected fiscal year 2011
staffing level was 9,500 personnel. In January 2011, the FBI reported
that if a move to a consolidated campus occurred in January 2011, an
estimated 10,000 staff--500 more than projected in 2005--would be
relocated to the new headquarters.
[77] To provide an equal-size comparison, the status quo baseline in
the plan considered that GSA would acquire an additional 610,000
rentable square feet of leased space to accommodate the FBI's
projected growth during fiscal years 2005 through 2011.
[78] Four variations were considered, including (1) vacating the
building and renovating it; (2) renovating by floor; (3) renovating by
quadrant; and (4) renovating by floor and building out the open-air
second floor and mezzanine.
[79] Two variations were considered, including (1) constructing a
single secure building and (2) constructing three buildings.
[80] The front of the Hoover Building is triangular in shape and
includes the building's central courtyard. The concept envisioned a
more efficient structure built on this portion of the site.
[81] The cost estimates do not include costs for swing space to house
personnel while construction takes place.
[82] The cost approach assumes a buyer would pay no more for a
property than what it would cost to construct a like property with the
same utility. The sales comparison approach assumes a buyer would pay
no more than what it would cost to acquire a similar existing
property. The income capitalization approach reflects the market's
perception of a relationship between a property's potential income and
its market value.
[83] The Building Owners and Management Association International
defines Class A office buildings as the most prestigious buildings
that compete for premier office users with rents above average for the
area. Such buildings have high-quality standard finishes, state-of-the-
art systems, exceptional accessibility, and a definite market
presence. Class B office buildings compete for a wide range of users
with rents in the average range for the area. Building finishes are
fair to good for the area, and systems are adequate.
[84] GAO, Federal Real Property: Reliance on Costly Leasing to Meet
New Space Needs Is an Ongoing Problem, [hyperlink,
http://www.gao.gov/products/GAO-06-136T] (Washington, D.C.: Oct. 6,
2005).
[85] Pub. L. No. 108-447, 118 Stat. 2809, 3259 (2004).
[86] For more information, see OMB Circular No. A-11, Appendix B,
"Budgetary Treatment of Lease-Purchases and Leases of Capital Assets"
(2010).
[87] [hyperlink, http://www.gao.gov/products/GAO-06-136T].
[End of section]
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