Corps of Engineers Acquisition of Building in New Orleans District

AFMD-88-56FS: Published: Jun 7, 1988. Publicly Released: Jul 7, 1988.

Additional Materials:


Office of Public Affairs
(202) 512-4800

In response to a congressional request, GAO reviewed the Army Corps of Engineers' acquisition of a district office building in New Orleans, Louisiana, specifically the: (1) interest rate it used to determine the lease payments; (2) total cost to the government of the lease-purchase compared to the outright purchase of the building; (3) legislation pertaining to expenditure controls in purchasing capital items through the Corps' revolving fund; and (4) year in which the Corps would report the principal portion of the lease payments to Congress as a capital expenditure.

GAO found that: (1) although the contract did not contain the interest rate, the Corps determined that the interest rate was approximately 15 percent; (2) the use of the lease-purchase option instead of purchasing the building directly would result in a loss to the federal government of $23.5 million over the 25-year lease term; (3) with the addition of about $26,000 per month for taxes and insurance, the total cost was about $31.3 million; (4) H.R. 12928 provided no limit to the fund's capital expenditures; and (5) if the Corps continues to report all planned capital expenditures over $700,000, it should report the principal portion of the lease payments in its fiscal year 2000 budget submission.

Sep 28, 2016

Sep 27, 2016

Sep 26, 2016

Sep 23, 2016

Sep 21, 2016

Sep 7, 2016

Aug 30, 2016

Aug 11, 2016

Jul 22, 2016

Looking for more? Browse all our products here