Department of Homeland Security 

Office of Inspector General 

U.S. Customs and Border Protection's 


Acquisition of 25 Acres of Land 


in Lordsburg, New Mexico 


OIG-11-06 November 2010 
Office ofInspector General

U.S. Department of Homeland Security

Washington, DC 20528

NOV - 1 2010

Homeland

Security

MEMORANDUM FOR: The Honorable Alan Bersin

Commissioner

U.S. Customs and Border Protection

FROM: Ric~kinner Inspector General

SUBJECT: u.s. Customs and Border Protection's Acquisition of25

Acres ofLand in Lordsburg, New Mexico

Attached for your information is our final letter report, U.S. Customs and Border

Protection's Acquisition of25 Acres ofLand in Lordsburg, New Mexico. We

incorporated the formal comments from U.S. Customs and Border Protection in the

report.

Consistent with our responsibility under the Inspector General Act, we are providing

copies of our report to appropriate congressional committees with oversight and

appropriation responsibilities over the Department of Homeland Security. We will post

the report on our website for public dissemination.

Should you have any questions, please call me, or your staff may contact Anne L.

Richards, Assistant Inspector General for Audits, at (202) 254-4100.

Attachment

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Background 

As a result of a citizen complaint, the U.S. Department of Homeland Security, Office of 

Inspector General, conducted a review of U.S. Customs and Border Protection’s (CBP) 

purchase of 25 acres of land to construct a new Border Patrol facility in Lordsburg, New 

Mexico. The complaint raised concerns that the price CBP paid for the land was 

significantly more than it was worth and not consistent with similar property sales in the 

area. 

CBP protects our Nation’s borders from terrorism, human and drug smuggling, illegal 

migration, and agricultural pests, while simultaneously facilitating the flow of legitimate 

travel and trade. As part of CBP, the U.S. Border Patrol’s mission is to detect and 

interdict terrorists and weapons of terror while accomplishing traditional missions such as 

detecting, apprehending, and deterring smugglers of humans, drugs, and contraband. 

In 2006, to improve border security, President George W. Bush called for hiring more 

than 6,000 new Border Patrol agents. As a result, the existing Border Patrol facility in 

Lordsburg, New Mexico experienced overcrowding. The Lordsburg Border Patrol 

facility was originally built to accommodate approximately 50 agents, but in 2009 the 

station reached a staffing level of more than 250 agents. 

CBP officials decided to replace the existing Lordsburg facility with another facility in 

Lordsburg.1

 CBP considered building a new facility on the existing site, but the site did 

not allow for expansion or the addition of helicopter pads, all-terrain vehicles, and 

equestrian services. Also, building on the existing site would have impacted ongoing 

Border Patrol operations. Therefore, in May 2006, CBP officials decided to acquire land 

in Lordsburg to build a replacement Border Patrol facility. 

CBP’s Facilities Management and Engineering Office and its regional facility centers 

oversee design and contract preparation for land acquisitions. The Office of Border 

Patrol determines operational and mission requirements for new facilities. In real estate 

acquisitions, CBP relies on the United States Army Corps of Engineers (USACE) to 

provide appraisals, environmental impact evaluations, and other related services. 

Based on operational requirements, CBP identified three possible locations for a 

replacement Lordsburg Border Patrol facility. All three sites were near freeway 

interchanges on the outskirts of Lordsburg. The owners of these three sites were: 

• U.S. Bureau of Land Management 

• Hidalgo County 

• State of New Mexico 

1

 We did not evaluate CBP’s process or reasoning used to determine that Lordsburg was the most 

appropriate location to build the replacement facility. 

U.S. Customs and Border Protection's Acquisition of 25 Acres of Land in Lordsburg, New Mexico
 

Page 2
 
 

CBP officials determined that the site owned by the State of New Mexico was the 

preferred location. CBP eliminated the U.S. Bureau of Land Management site from 

consideration owing to the lack of utility service and possible groundwater 

contamination. According to CBP, these conditions would be expensive to mitigate. 

Office of Border Patrol officials determined that the Hidalgo County site was poorly 

suited for a Border Patrol station because it is surrounded by highways, a railroad, and 

commercial properties, which would limit its privacy and its ability to expand. CBP did 

not order appraisals of the value of any of the sites when determining which site was best. 

Figure 1 identifies the selected 25-acre parcel as the subject property. 

Figure 1 - Map of the Subject Property and Surrounding Area (Source: Google Maps)) 

In December 2006, CBP engaged USACE to appraise the value of the selected site. 

USACE contracted with a private appraiser, and in December 2006 the appraiser valued 

the subject property at $37,500. The New Mexico State Land Office (NMSLO), which 

manages land for the State of New Mexico, rejected the appraised value and countered 

with an offer of $544,500. 

In February 2008, a different appraisal firm completed a second appraisal for USACE 

and valued the subject property at $47,500. NMSLO rejected the second offer and 

countered with a $1.25 million offer, based on an internal valuation of the property. The 

significant difference between the appraised values and the counteroffers was caused by 

the appraisers and NMSLO disagreeing on what constituted comparable sales. Some 

land in the area sold for $1,000 to $3,000 per acre, while other land sold for $70,000 to 

$100,000 per acre. 

U.S. Customs and Border Protection's Acquisition of 25 Acres of Land in Lordsburg, New Mexico
 

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To resolve the valuation difference, CBP held a meeting with the NMSLO and USACE 

in June 2008. The meeting participants discussed a tentative price of $750,000 for the 

property. In December 2008, a contract appraiser hired by the NMSLO appraised the 

property at $750,000. To confirm this value, in January 2009, USACE conducted a third 

appraisal that valued the property at $712,500. The appraiser attributed the increase in 

appraised value to a number of factors, including a reinterpretation of the highest and best 

use from the earlier appraisals. In February 2009, CBP rescinded the first two appraisals 

and said that those appraisals misinterpreted key elements of the property. In June 2009, 

CBP purchased the 25 acres for $750,000. 

Results of Audit 

CBP’s decision to build the Border Patrol facility in Lordsburg limited the number of 

available properties that could be used for that facility. Although CBP negotiated a price 

of $750,000 with the NMSLO, the limited number of properties weakened CBP’s 

negotiating position when determining that price. CBP adhered to DHS policies and 

procedures when purchasing this land. 

Limiting Sites to Lordsburg, NM, Diminished CBP’s Bargaining Position 

CBP’s decision to build in Lordsburg limited its options for acceptable properties. 

Lordsburg is a small town with only three nearby freeway interchanges from the I-10 

interstate. Only two of these interchanges, Exit 20 to the west and Exit 24 to the east, 

provide immediate access to undeveloped land (Exit 22 leads directly to Main Street and 

the town center). The NMSLO owns a portion of the undeveloped land around Exit 20 

and Exit 24, including the subject property. At the time of the purchase, other owners of 

nearby undeveloped land included Hidalgo County and the U.S. Bureau of Land 

Management. However, CBP determined that the only suitable land was the 25 acres 

owned by the NMSLO. As a result, CBP chose to acquire and build the facility on the 

subject property. 

CBP paid $750,000 for the subject property in Lordsburg after USACE conducted a third 

appraisal. However, CBP’s negotiating position was weakened by only seriously 

considering one property for purchase. CBP chose to build the new facility in Lordsburg 

and determined that only one property in Lordsburg was suitable. Therefore, CBP had no 

option but to buy that property at the price that the State of New Mexico wanted. 

CBP adhered to federal regulations when negotiating for the land. CBP must follow the 

Uniform Relocation Act2

 and its implementing regulations when acquiring real property, 

such as land and buildings. The implementing regulations allow for negotiation of a 

price above the appraised value through an option called an administrative settlement. 

According to the implementing regulations: 

2 42 U.S.C. § 4651 

U.S. Customs and Border Protection's Acquisition of 25 Acres of Land in Lordsburg, New Mexico
 

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“The purchase price for the property may exceed the amount offered as just 

compensation when reasonable efforts to negotiate an agreement at that amount 

have failed and an authorized Agency official approves such administrative 

settlement as being reasonable, prudent, and in the public interest.” 

As described in the implementing regulations, CBP used an administrative settlement to 

negotiate a price for the Lordsburg property. According to this process, the Executive 

Director of CBP’s Facilities Management and Engineering Office must be satisfied that 

the purchase was reasonable, prudent, and in the public best interest. 

CBP officials determined that the purchase was— 

•	 Reasonable based on the USACE appraisal valuing the land at $712,500, which 

was within a reasonable amount of the agreed-upon purchase price; 

•	 Prudent because the cost of the land was deemed to be less than the cost, in both 

time and resources, of selecting a new site for the Border Patrol facility; and 

•	 In the public’s best interest because a new Lordsburg Border Patrol facility was 

urgently needed to help reduce overcrowding at the existing Lordsburg facility. 

We are not making any recommendations. 

Management Comments and OIG Analysis 

We obtained written comments to our draft report from the Assistant Commissioner, 

Office of Internal Affairs at CBP. We have included a copy of the comments in 

Appendix B. CBP generally concurred with the findings in this report. We also 

reviewed CBP’s technical comments and made changes where appropriate. 

U.S. Customs and Border Protection's Acquisition of 25 Acres of Land in Lordsburg, New Mexico
 

Page 5
 
Appendix A 

Purpose, Scope, and Methodology 

We conducted this audit to determine whether the amount U.S. 

Customs and Border Protection (CBP) paid for 25 acres of land 

purchased from the State of New Mexico was fair, reasonable, and 

consistent with DHS policies and procedures. 

We reviewed pertinent records and supporting documentation to 

address whether the basis, assumptions, and methodology used to 

purchase the 25 acres of land was in compliance with the Uniform 

Appraisal Standards for Federal Land Acquisitions and the 

Uniform Relocation Act. We reviewed planning documents and 

the three appraisals commissioned by USACE. 

We interviewed CBP Headquarters officials with the Office of 

Facilities Management and Engineering and with the Office of 

Border Patrol to understand CBP’s land acquisition process and 

CBP’s land appraisal process, with a specific focus on the 

Lordsburg land acquisition. We visited CBP’s Dallas Facility 

Center and interviewed CBP staff in charge of the Lordsburg land 

acquisition. We interviewed USACE officials involved with the 

Lordsburg land acquisition and obtained their views and opinions 

regarding the subject appraisal process. 

We contracted with an independent federal appraiser to conduct a 

review of two of the appraisals to assess if the appraisals were 

conducted in accordance with the Uniform Appraisal Standards for 

Federal Land Acquisitions. The results of this review did not 

materially affect our conclusions. 

We performed our audit between December 2009 and August 2010 

at CBP Headquarters in Washington, DC, and at CBP’s Dallas 

Facility Center in Dallas, TX. We did not make a site visit to 

Lordsburg, NM, to view the subject property. We did not evaluate 

CBP’s site selection process to determine the thoroughness of its 

search, nor did we attempt to identify other suitable sites that might 

have been available at the time of purchase. 

We conducted this audit under the authority of the Inspector 

General Act of 1978, as amended, and according to 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. 

U.S. Customs and Border Protection's Acquisition of 25 Acres of Land in Lordsburg, New Mexico
 

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Appendix B 

Management Comments to the Draft Report 

U.S. Customs and Border Protection's Acquisition of 25 Acres of Land in Lordsburg, New Mexico 

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Appendix C 

Major Contributors to This Report 

Brooke Bebow, Director 

Lorinda Couch, Desk Officer 

Richard Kotecki, Auditor-in-Charge 

Brian Blaha, Auditor 

Jeanne Genao, Program Analyst 

Tristan Weir, Program Analyst 

Brandon Landry, Independent Referencer 

U.S. Customs and Border Protection's Acquisition of 25 Acres of Land in Lordsburg, New Mexico 

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Appendix D 

Distribution List 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

General Counsel 

Executive Secretariat 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

Commissioner, U.S. Customs and Border Protection 

CBP Audit Liaison 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as 

appropriate 

U.S. Customs and Border Protection's Acquisition of 25 Acres of Land in Lordsburg, New Mexico 

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ADDITIONAL INFORMATION AND COPIES 

To obtain additional copies of this report, please call the Office of Inspector General (OIG) at (202) 254-4100, 

fax your request to (202) 254-4305, or visit the OIG web site at www.dhs.gov/oig. 

OIG HOTLINE 

To report alleged fraud, waste, abuse or mismanagement, or any other kind of criminal or noncriminal 

misconduct relative to department programs or operations: 

• Call our Hotline at 1-800-323-8603; 

• Fax the complaint directly to us at (202) 254-4292; 

• Email us at DHSOIGHOTLINE@dhs.gov; or 

• Write to us at: 

DHS Office of Inspector General/MAIL STOP 2600, 

Attention: Office of Investigations - Hotline, 

245 Murray Drive, SW, Building 410, 

Washington, DC 20528. 

The OIG seeks to protect the identity of each writer and caller.