SENATOR JOHN McCAIN SEEKS INFORMATION ON $12.8 MILLION HOUSING COMPLEX FOR CBP AGENTS IN AJO, ARIZONA

Washington, D.C. ­- September 18, 2013 – (RealEstateRama) — U.S. Senator John McCain (R-AZ) today sent a letter to Thomas S. Winkowski, Acting Commissioner of the U.S. Customs and Border Protection, seeking information on the recently completed $12.8 million housing complex for Customs and Border Protection (CBP) agents in Ajo, Arizona. Each of the 21 housing units cost the American taxpayer roughly $605,000 – a staggering amount when compared to the unit cost of $100,000 for similar area housing.

The text of the letter is below.

September 17, 2013

Mr. Thomas S. Winkowski

Acting Commissioner

U.S. Customs and Border Protection

1300 Pennsylvania Avenue, NW

Washington, DC 20229

Dear Acting Commissioner Winkowski:

I am writing to inquire about the recently completed $12.8 million housing complex for Customs and Border Protection (CBP) agents in Ajo, Arizona. Specifically, I am interested in the seemingly exorbitant costs associated with this project compared to similar real estate developments. I understand that each of the 21 housing units cost the American taxpayer roughly $605,000. This is staggering compared to the unit cost of $100,000 for similar area housing. At a time of limited funding, agencies must make smart financial decisions based on mission requirements and economic realities.

It is my understanding that CBP typically designs and constructs facilities to the Leadership in Energy and Environment Design (LEED) Silver standard. In 2011, the General Services Administration (GSA) required that all new federal buildings and major renovations meet the LEED Gold standard. According to an August 28, 2013, GSA Report on LEED projects, of the 110 LEED certifications currently held by government-owned facilities, only three are rated Platinum. The Ajo housing complex was one of those properties. While concern for the environment must remain a priority, this project’s costs appear to outweigh its benefit to both the local community and to the federal government.

The CBP has been quoted as saying each home’s cost was “approximately $167,000 apiece”. But, the actual cost for each dwelling was significantly larger because the CBP figure omits additional funds spent on “acquisitions of various parcels and 12 existing homes; buyout of four life leases; relocation of the private homeowners and rents; excessing or selling the existing homes; design of the new homes and property and infrastructure improvements.” When considering how the housing needs of CBP personnel in the field should be met, CBP must take into account the total cost of executing a given alternative and relevant overhead costs—not merely construction unit costs.

Finally, I have personally witnessed the hard work and dedication by our brave border agents and integral support staff. From stopping illegal drug smuggling to impeding human trafficking, the mission our agents on the ground face is more important than ever in the fight to secure our nation’s borders. However, successful mission planning requires that CBP be a good steward of taxpayer funding. I understand CBP plans to build an additional 25 housing units in Ajo. I believe that spending for such projects must be supported by sound and prudent analysis and planning that should account for design elements that, even if well-intentioned as environmentally conscious, may undermine the business case that would otherwise support the project.

Accordingly, please provide written response to the following questions and document requests no later than October 1, 2013.

1. Who provided final approval for the Ajo housing development? Please provide name, title, and division. Please also provide the contemporaneous decision-memorandum or similar document that articulates the basis for that approval and this project’s execution.

2. Were alternatives reviewed in lieu of the Ajo development? If so, what costs/benefits were associated with each alternative?

3. What is current occupancy-rate of the Ajo housing complex? Also, what is the retention rate of occupants who have moved into the housing complex since its opening in 2011?

4. Does anyone who was involved in the design, selection, or authorization of the Ajo project currently reside in the complex? If so, please provide names, titles, and divisions.

5. Please provide justification for why the Ajo housing development was built to LEED Platinum specifications instead of Silver or Gold and a detailed cost-breakdown for the project if it had instead been built to Silver or Gold specifications. Please identify who authorized the Platinum certification effort.

6. Did this project receive any subsidies from local or state entities? What percentage of this project was funded by the federal government?

7. Originally, this project was scheduled to cost $10.79 million. What caused the increase to $12.7 million? Who authorized this additional expense and why? Who should ultimately be held responsible for the cost overruns of this project? Who is responsible for future construction projects at CBP?

8. Was the contract for the construction of these housing units awarded competitively? If not, please explain why not and how this contract was in fact awarded.

9. Please provide the CBP Housing Guide and the CBP Construction strategy and include any LEED certification plans for each project.

10. Was a given contractor’s ability to build, or past performance in building housing, to LEED Platinum specifications an evaluation factor or a qualification used to award this construction contract? If not, why not? If so, how did the awardee-contractor score against that evaluation factor or qualification in relation to other bidders?

11. What processes or safeguards have been put in place to prevent future incidents of wasting taxpayer funds? Who will provide final approval for future construction projects?

If you or any of your staff have any questions regarding this request, please contact Brad Patout, Senior Policy Advisor to the Minority, Permanent Subcommittee on Investigations, at 202/224-XXXX. Thank you for your attention to this important matter.

Sincerely,

John McCain

Ranking Member

Permanent Subcommittee on Investigations