The White House wants to change the way the federal government funds major building construction projects, like the pending replacement of the FBI headquarters.
Under a proposal detailed Monday, the administration is seeking $10 billion in mandatory funding for the General Services Administration to set up a Federal Capital Revolving Fund, which would allow the GSA to fund major construction projects at their outset, with the client agencies effectively replenishing the fund for up to 15 years.
“Balances in the FCRF would be available for transfer to purchasing agencies to fund large-dollar capital acquisitions only to the extent projects are designated in advance in appropriations Acts and the agency receives a discretionary appropriation for the first of a maximum of 15 required annual repayments,” the administration explains in the president’s fiscal 2024 budget request’s analytical perspectives volume.
The effort to replace the J. Edgar Hoover FBI headquarters in downtown Washington with one of three competing sites, two in Maryland and one in Virginia, is the most obvious immediate use case for the funding. Delegations from Maryland and Virginia have been making their cases to the GSA to be selected, with lawmakers from the two states waging an ongoing feud about the selection criteria.
The project has an estimated balance of $3.5 billion. The administration says that upfront funding will provide certainty and keep the projects from competing with other priorities in department and agency operating budgets.
“Knowing that future discretionary appropriations will have to be used to repay the FCRF provides an incentive for agencies, OMB, and the Congress to select projects with the highest mission criticality and return,” the White House budget document says. GSA Administrator Robin Carnahan alluded to the proposed new funding mechanism in a statement Friday, ahead of the release of the full details.
“For the first time ever, the president’s budget includes a provision that will guarantee full access to the Federal Buildings Fund while preserving Congress’s discretion to decide on and authorize investments — this is a game-changing provision that will enable GSA to modernize and consolidate the federal footprint, saving taxpayers millions and creating good-paying jobs in local communities,” Carnahan said.
$233M sought for FBI building
For the FBI headquarters project, the fiscal 2024 budget requests a $233 million discretionary appropriation for the Federal Buildings Fund to provide for the first of 15 years of repayment for the project.
One of the challenges for the GSA will be seeking to “right-size” the amount of square footage needed for federal civilian office space both in the national capital region and elsewhere because of the transition to remote and hybrid work that has occurred in recent years.
“GSA will play a key role in the transformation of agency space requirements, and the facilitation of the Federal Government’s transition to what is likely to be a smaller, less costly real estate footprint as a result of the way the COVID-19 pandemic transformed the way agencies work,” a GSA congressional budget justification said. “GSA and Federal agency alignment around the opportunity to transform GSA’s real estate portfolio into one that is high performing, more efficient, and physically smaller than today’s inventory has never been better.”