GSA ANNOUNCES FIRST RESULTS OF 'TIME OUT AND REVIEW'
WASHINGTON, Nov. 22 /PRNewswire/ -- The General Services Administration (GSA) released today the first round of recommendations under its "time out and review" of federal building projects, including the proposed rescission of projects in Florida, Iowa, Indiana and Illinois. If adopted by Congress, GSA's recommendations will yield projected savings of more than $400 million for taxpayers. In making the announcement, GSA Administrator Roger W. Johnson said, "It is apparent that significant savings can be obtained through improvements in the planning process and execution of the federal buildings program. "We promised when we announced our review of building projects that we would make our findings and recommendations public as we complete our process. This is a business-like review that is committed to improving the federal government's real estate program so that we can make decisions that best serve the American taxpayer, now and in the future. The cooperation and support of all parties -- especially the administration, Congress and our client agencies -- has been strong." Since coming to GSA, Johnson repeatedly said in congressional testimony and public interviews that he would call for a "time out" of current building projects, and in September, he initiated the review of approximately 200 federal leasing, renovation and new construction projects in conjunction with the issuance of Vice President Al Gore's National Performance Review (NPR) report. The projects recommended for rescission, or intention to rescind, include the construction of a federal building in Lakeland, Fla.; a parking facility in Burlington, Iowa; a federal courthouse in Hammond, Ind.; and major lease and renovation projects in Chicago. "In these cases, GSA felt that, after thorough review, the current need for these projects could not be confirmed or a consensus did not exist that they should be built," Johnson said. "In the case of Hammond, although we have affirmed a need, the judiciary has indicated they will not occupy the courthouse in the proposed location, therefore in the absence of reconfirmation by the local judiciary, we cannot support the decision to proceed with the project at this time." Significant savings will also come from projected cost savings in the design and construction of projects which were determined to be justified. Johnson said that the savings will result from a "careful review of the project specifications and aggressive value engineering." The bulk of the savings -- over $200 million -- will result from GSA's recommendation to Congress that the original authorization of up to $704 million over 27 years for the Atlanta Federal Center be amended "to permit government ownership and financing," said Julia Stasch, GSA deputy administrator. "Significant savings have been achieved through negotiations and value engineering, and the project has also benefited substantially from the decline in interest rates. "There is a need in Atlanta to move federal employees from older buildings scattered throughout the city into consolidated space, which will afford the greatest flexibility as our agencies restructure and streamline in the coming years. Most of the concern about the project has centered on its authorized costs, and we are recommending a way to structure the project that results in significant savings and adds a valuable asset to the federal portfolio," Stasch said. "The restructured approach could result in a commercially comparable office rental rate, fixed for 27 years, of less than $11 per square foot, plus the cost of parking." Stasch said that GSA's proposal will not alter the federal government's agreement with the city of Atlanta to locate the new federal center in its proposed location. "GSA is pleased that it has been able to find a solution that not only saves millions of taxpayer dollars but has a positive effect on helping to revitalize part of downtown Atlanta and supports the substantial investment the government has made in its nearby Richard B. Russell and Martin Luther King federal buildings." Johnson said that because there will be no "net new" federal office space, future cost reductions will come from reduced square footage, conversions from leased space to owned space and renegotiations of some rental rates, where leasing continues to be the best alternative. "In the first group alone, there is a net reduction of nearly a half million square feet of office space and two lease transactions are recommended for government ownership." In addition, GSA and the Administrative Office of the Courts formed a partnership to study ways to reduce costs of new federal courthouse construction. Johnson said that courthouse construction presents "a different story, because it is acknowledged that court needs are increasing; however, we are working together on ways to improve court needs forecasting, design and construction methods." "This review and our efforts will produce modern, businesslike methods to better manage the federal government's real estate portfolio. We are confident that these changes will bring immediate and long-term savings to the taxpayers," Johnson said. The overall review, which is scheduled for completion no later than mid-March is being led by Stasch, who has private sector real estate experience. Stasch said the review focused first on projects with nearing milestones to minimize any impact on project schedules. GSA's regional officials were directed to look first at the need for a project under the current and projected federal budget and staffing restraints. If the need for a project was justified, officials were then charged with assuring that all available alternatives were considered. The overriding objective, Stasch said, was to determine whether the right and most cost-effective real estate solution had been selected and to recommended reconsideration by Congress in instances where that appears to have not been the case. Where no feasible alternatives to construction or renovation existed, the next step was to evaluate project costs to determine if short- and long-term savings were possible. "This review has confirmed that the federal government's real estate program suffers from a lack of long-range planning, and the taxpayers are often stuck with the added costs," Johnson said. "Therefore, in addition to reviewing current projects, we have asked our regional staffs to develop strategic plans that meet the long-term office space needs of the government." The GSA is a central management agency that sets federal policy in such areas as procurement, real property management and information resources management. The agency also manages diversified governmentwide operations involving buildings management, telecommunications, consumer information, distribution, child care in the federal workplace and the federal government's recycling program. Through its Public Buildings Service, GSA is responsible for nearly 260 million square feet of office space in 7,732 government-owned and leased buildings nationwide. It spends about $5.2 billion annually for real estate management activities, including acquisition of sites and buildings, construction, leasing, repairs, alternations, maintenance and security. -0- 11/22/93 /CONTACT: Pat Dorinson or Steve Guiheen of the General Services Administration, 202-501-1231/
CO: General Services Administration ST: District of Columbia IN: CST SU: EXE RLE
DT-DC -- DC020 -- 6947 11/22/93 16:18 EST
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|Date:||Nov 22, 1993|
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