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Budget cuts prompt GSA to halt renovation of its headquarters

Oct. 6, 2011 - 06:00AM   |  
By ANDY MEDICI   |   Comments
The General Services Administration headquarters building in Washington, D.C.
The General Services Administration headquarters building in Washington, D.C. (Staff file photo)

Severe budget cuts are forcing the General Services Administration to abandon indefinitely further renovations and a planned expansion to its headquarters in Washington.

Employees who have been working in temporary leased offices during the renovation will move back to the headquarters building by February 2013 18 months ahead of the original move-in date according to an Oct. 5 email distributed to GSA employees by Emily Barocas, GSA's associate administrator for communications.

Barocas said the earlier relocation will save money and reuniting employees at headquarters will improve the way the agency operates. But she added "there is going to be some disruption" associated with the relocation, and she labeled the upcoming move the next phase of GSA's "extreme challenge."

Employees were also notified of the curtailed plans with a video on GSA Administrator Martha Johnson's internal blog.

The headquarters renovation project had been divided into two phases with $162 million obligated for the first phase. GSA has estimated the total project to cost between $200 million to $250 million.

Phase one renovated most of the existing 700,000-square-foot building while phase two would have added more than 105,000 square feet of space.

Barocas said that by ending three current leases early and moving employees back to headquarters, the agency will save $28 million annually in leasing and operating costs.

GSA plans to begin phase two of the renovations when it gets funding for the project.

But it appears that is not likely to happen anytime soon.

GSA is not expected to request money for the next phase of its headquarters renovation because it has other higher-priority projects to complete, including the Food and Drug Administration's consolidation at White Oak, Md., and the Department of Homeland Security consolidation in Southeast Washington, according to a congressional aide familiar with the agency's budget who asked not to be named.

The agency has renovated about 70 percent of the building, according to the aide.

Budget cuts over the last year have sent the agency reeling, forcing GSA to postpone or cancel projects across the country and threatening GSA's ability to provide basic services for its federal tenants.

GSA saw its funding for new construction drop 91 percent from fiscal 2010 to fiscal 2011 and saw a 32 percent cut to its renovation budget.

Proposals for fiscal 2012 are bleaker: The House Appropriations Committee provided no money for new construction and $280 million for repairs. The Senate legislation provides $56 million for repairs and $280 million for new construction.

The federal building fund the revolving pool of funding GSA uses to maintain property, pay rent and manage its construction and renovation portfolio was cut from $9.1 billion in 2010 to $7.6 billion in 2011. Legislation passed by the House would cut it still further, to $7.2 billion, the lowest level since 2007.

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