CBP spent about $680,000 per house and about $118,000 per mobile home
The Office of Inspector General for the Department of Homeland Security released its findings Thursday on the Custom’s and Border Patrol housing project in Ajo, Arizona. The final report entitled, CBP Did Not Effectively Plan and Manage Employee Housing in Ajo, Arizona, contains five recommendations aimed at improving CBP’s planning and management of future housing projects.
CBP built 21 two and three bedroom family-style houses, ranging in size from 1,276 to 1,570 square feet, CBP paid about $975,000, or almost triple the amount it may have actually needed to pay, for 12 acres of land.
CBP designed the houses to include nonessential or upgraded items, which added unnecessary costs. For example, the houses have quartz countertops and stainless steel appliances in the kitchens, free-standing additional freezers, wireless ceiling fans, plantation shutters, and walk-in pantries. According to a CBP official, higher quality items were used because CBP believed if “they spent more up front, they would save money in the end.” CBP said it selected higher priced wireless fans to avoid having to replace the pull strings on standard ceiling fans. CBP was unable to provide cost comparisons or support how its decisions resulted in cost savings.
CBP built attached garages measuring about 748 square feet with 27foot ceilings. According to auditor’s research, a garage of this size could accommodate at least three cars. CBP said it built the garages for storage and because of the Arizona climate. CBP decided the large garages would ensure employees had enough space to accommodate two large personal vehicles, as well as storage space for work gear. According to a CBP official, most agents and officers assigned to the Lukeville Port of Entry and Ajo station have two cars. However, CBP could not provide supporting documentation for this statement. Additionally, the study concluded that although a carport or canopy to shade vehicles was a desired feature, garages were unnecessary.
CBP bypassed key acquisition controls and procedures. As a result, CBP spent about $680,000 per house and about $118,000 per mobile home for employee housing in Ajo, which was significantly more than the Ajo average home price of $86,500.
The auditors identified about $4.6 million CBP spent on the project that could have been put to better use. According to CBP, once funding becomes available, it plans to build more houses in Lukeville, close to Ajo.
Auditors made five recommendations to improve CBP’s planning and management of future housing projects. CBP concurred with all five recommendations and, according to the OIG, CBP has begun implementing corrective actions to address the findings.
Additional Findings and Background:
According to the Office of Inspector General’s (OIG)report, “In 2008, CBP identified a need for employee housing along the southwest border, particularly in Arizona and Texas, given the remoteness and limited housing market. CBP began planning the construction of employee housing in Ajo, Arizona, in 2008 and completed construction in late 2012.”
In 2009, CBP proposed a master development plan for employee housing at six locations: Ajo, Arizona; Piegan, Montana; Presidio, Texas; Sierra Blanca, Texas; Sanderson, Texas; and Van Horn, Texas. CBP prioritized developing Ajo, because it anticipated higher border crossings at the nearby Port of Entry in Lukeville, Arizona. CBP also expected an increase in staff at the Lukeville Port of Entry and the Ajo Border Patrol Station.
CBP completed the CBP Housing Program Feasibility Study for Ajo to evaluate the existing housing conditions, employee needs, and housing alternatives in Ajo. According to the Ajo study, the housing in the Ajo private rental market would not accommodate Office of Field Operations and Office of Border Patrol staff and future planned increases in staff. The Ajo study projected it would cost about $585,000 per house to construct the planned housing in Ajo.
CBP decided to build in Ajo because of its proximity to the Ajo Border Patrol Station and relatively short distance from the Lukeville Port of Entry. Lukeville does not offer community services, and its residents rely on schools and rental properties in Ajo. CBP entered into an agreement with the General Services Administration to plan, design, and construct facilities to support the housing project in Ajo. GSA is responsible for meeting the real estate space requirements of Federal agencies. According to CBP, GSA was best qualified to manage the project, given its extensive knowledge from previous experience with CBP projects.
CBP purchased property that added unnecessary costs to the project. CBP paid about $975,000, or almost triple the amount it may have actually needed to pay, for 12 acres of land. According to CBP, it selected this location because the other three properties available in Ajo were undesirable, undeveloped, or not large enough to accommodate the number of houses it planned to build.
CBP eliminated Lukeville as a possible location based on the recommendations of its Office of Internal Affairs, which cited the site’s adjacency to the border with Mexico and the unpredictable nature of border violence in the southwest. CBP did not conduct a threat assessment to verify that the location in Lukeville, which was the least expensive option, should be eliminated.
The land CBP chose was a mobile home park containing five privately owned mobile homes with 75 year prepaid leases. To comply with Federal regulations,1 CBP bought out the mobile home occupants’ 75 year leases and paid their relocation expenses, which cost about $575,000. According to the Ajo study, CBP did not need the portion of land with mobile homes to satisfy OFO’s housing needs. A CBP official warned that using this particular property would lead to a greater cost to the government since CBP was required to purchase the leases and pay relocation expenses. In addition to the extra cost associated with the leases, CBP paid $64,350 (19 percent) more than the appraised value of the land.
A real estate appraisal determined the land’s value was $335,650. The seller proposed a price of $518,000. To expedite the process and avoid a lengthy Federal land seizure, a memorandum to the former Executive Director recommended approval of a counter offer of $400,000.
During the award of the construction contract, CBP did not have the total amount of funding necessary to build on the entire property. Although the 12 acres could have accommodated 46 houses, CBP only had funding to build 21 houses. Even though, at the time of the Ajo study, CBP was aware it had limited funding for the size of the land and the planned number of houses, it decided to
develop the site first and adjust the funding and construction schedule accordingly. As a result, more than half the land (6.63 acres) worth $183,459 remains vacant. CBP plans to build at a different location in Lukeville and has no plans to build additional houses on this vacant property.
CBP designed and built housing that exceeded employee needs. In 2009, CBP conducted the Ajo study to determine the number of houses, family size, and type of dwelling needed for OFO and OBP at the Lukeville POE and the Ajo Border Patrol Station. The study concluded that OFO and OBP staff needed one bedroom apartment-style housing for use during the workweek. According to the information CBP collected during the Ajo study, 80 percent of the OFO officers were single and 89 percent of the officers owned a permanent residence in another location. CBP did not collect the information for border patrol agents working at the Ajo Border Patrol Station. Instead, CBP calculated OBP’s Ajo housing needs based on information collected from another similarly sized border patrol station.
Rather than build the recommended one bedroom apartment-style housing, CBP built 21 two and three bedroom family-style houses, ranging in size from 1,276 to 1,570 square feet. In building the family-style houses, CBP ignored the recommendations made in the Ajo study to build workweek housing for single OFO officers.
According to the Ajo study, “Since CBP housing is elective, CBP must be careful about the quality, quantity and types of housing it develops. The result of not doing so is that the housing units may be constructed but not occupied, which has occurred before.” The study also noted, “Many of the single officers are at the lowest rung of the pay scale and do not want to pay for additional bedrooms that they will not use.”
CBP also increased project funding seven times without specifying the reason for the increases and how the funds would be spent. These issues occurred because CBP ignored recommendations from a study conducted to guide the project. In addition, CBP did not have procedures to prevent purchasing more land than was necessary, as well as nonessential items and amenities.