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GSA, FBI face questions on HQ cancelation

FBIlogoSEABROOK – A Congressional hearing about the unexpected cancelation of the FBI headquarters consolidation yielded few new insights.

Last Wednesday, the Senate’s Environment and Public Works Committee held a hearing entitled “FBI Headquarters Consolidation Project: What Happened and What’s Next.” Staff members from the General Services Administration (GSA) and the FBI were on hand to speak to the committee about what led to the decision to cancel the project and what the next steps would be. On the latter question, the parties agreed to work together and come back to the committee within 120 days with a plan.

“It is clear from today’s testimony that the FBI needs a new headquarters,” said Sen. John Barrasso (R-Wyo.), the committee chair. “Expect this committee to hold another hearing on this subject before the end of the year.”

In explaining the decision to cancel the procurement, GSA and the FBI repeated what they had said before: although the current FBI headquarters, the J. Edgar Hoover building in downtown Washington, D.C., is quite literally falling apart, the lack of full funding for the replacement created too many uncertainties for the GSA to move forward.

“GSA received $200 million and the FBI received $323 million of a combined $1.4 billion request. This resulted in a funding gap of $882 million from the requested level,” said Michael Gelber, acting GSA administrator for public buildings. “After internal and interagency deliberations, GSA determined that moving forward without full funding would put the government at risk for project cost escalations. Additionally, both GSA and the FBI expressed concerns about the potential reduction in the value of the Hoover property.”

The consolidation included a land swap deal, with the private developer selected to build the new headquarters receiving ownership of the Hoover building as part of their payment. But the lack of full funding raised the possibility of the FBI having to remain in the Hoover building longer, which officials worried could result in a lower evaluation of the property’s value by the time the private developer took it over.

“The exchange only works when we get out of the Hoover building. As long as we’re in the Hoover building, it depreciates the value and it also creates complexities in how the developers were going forward,” said Richard Haley, chief financial officer for the FBI’s finance division.

GSA has had to cancel similar land swap deals in recent years because of the same concerns, according to David Wise, director of the physical infrastructure team at the Government Accountability Office.

“GSA has limited experience successfully completing swap exchanges and has only completed a few relatively small exchanges since 2001, both under $10 million. In our 2014 report, we reviewed five projects where GSA proposed and subsequently canceled swap exchange procurements,” he said. “From 2012 to 2015, GSA pursued a large swap exchange potentially involving up to five properties in the Federal Triangle South area of Washington... In February 2016, GSA canceled the procurement, stating that private investor valuations for the two buildings fell short of the government’s estimated values, as well as the amount GSA required to complete its other projects.”

Although GSA has other options for capital projects when funding is spread over multiple years, some of them are not viable in this situation. For example, Haley said constructing the new headquarters complex in phases raises questions of security.

“These sites, all three of them, are so small that to put a building into place and to operate that building with top secret and classified information and at the same time be trying to run a construction site – that was always a concern for us,” he said.

Maryland’s senior senator, Ben Cardin, said he still found some flaws with the agencies’ reasoning in cancelling the project.

“GSA cancels the procurement. Cancels the procurement. Okay, why? Not enough money appropriated by Congress? Well, the Congress put a large sum of money,” he said. “Was it canceled because you want to go now to a lease arrangement? We gave you that authority in 2011, to use a lease authority. Why would you cancel and not come back to us and say we’re changing directions? Are you saying we don’t need a consolidated facility for the FBI? I hope that is not the case.”

In perhaps the only new piece of information to emerge from the hearing, in response to a question from Sen. Mike Rounds (R-S.D.), Gelber revealed that GSA had not selected the preferred location from among the three short list sites – Greenbelt or Landover in Prince George’s County or Springfield in Virginia – as of the cancelation on July 11.

Cardin said there was no real need not to move forward on at least this aspect of the project.

“I don’t understand almost square one. If I understand your authority, you could select a site today. There’s no problem with your authority to announce a location,” he said. “I understand, because you canceled the procurement, you need to now explain the rules that you're going to operate and give developers an opportunity to come forward. But narrowing it to one of the three locations – the NEPA's already been done, so that expedites the process. So where am I wrong that you cannot move this a lot faster than you just said?”

Nearly every committee member expressed frustration about the decision, as well as the communication between the agencies and Congress, which many senators found lacking.

“Senators should not have to find out about a decision of this magnitude by reading about it in The Washington Post,” Barrasso said.

Gelber also stated that it is Trump administration policy to respond to requests for information from the committee chair only, which evoked the ire of Sen. Tom Carper (D-Del.)

“I don’t ever remember an administration that had a policy from the administration that said ‘you don’t have to respond to anybody doing oversight except the chairman of a committee.’ It’s a dangerous situation,” he said. “If the president’s a Democrat, and the minority are Republicans- the folks that usually are on the outside, not in the White House, they’re likely to do better oversight.”

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