Causes of Delay in the Federal Communications Commission Move to the Portals II Building

GGD-98-60R: Published: Jan 30, 1998. Publicly Released: Jan 30, 1998.

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Bernard L. Ungar
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GAO provided information on the delayed occupancy of Portals II and the commencement of rental payments by the General Services Administration (GSA) before the Federal Communications Commission (FCC) moves into the building.

GAO noted that : (1) phase I of the Portals II building was not ready for delivery to GSA on July 1, 1997, as originally scheduled, for several reasons; (2) GSA was late in contracting for preparation of the design intent drawing (DID); problems were encountered in getting acceptable DIDs in a timely manner, which delayed the preparation of construction drawings; and the lessor requested extensions on the due dates for the construction drawing submissions; (3) these delays resulted in the actual phased construction of the building being delayed by about 6 to 7 months; (4) consequently, the lease's initial substantial completion and delivery date of July 1, 1997, for phase I of the building was changed to January 3, 1998; (5) the lessor has notified GSA that phase I would be substantially complete on January 26, 1998; (6) in addition to the approximately 6- to 7-month delay in turnover of phase 1 to GSA, FCC officials stated that their move into Portals II would be delayed further; (7) they stated that due to a lack of funding, they are not able to procure specific items and services needed to prepare new space prior to moving into the building; (8) to enable it to move into Portals II, FCC requested funds for this purpose in its fiscal years 1996, 1997, and 1998 budget requests; (9) however, Congress did not approve the requested funds in any of these years because of Appropriations Committees' funding allocations, the Committees' concern about the cost of the relocation, and their concerns with the increased space requirement; (10) GSA gave FCC about $6 million in fiscal year (FY) 1997 but as of January 28, 1998, had not yet provided the $24.1 million promised for FY 1998; (11) rental payments that the lease requires GSA to make for the Portals II space from July 1, 1997, through June 30, 1998, should total about $14 million; (12) as required by the terms of the lease, GSA began making rental payments to the lessor in July 1997, when phase I of the building was originally scheduled to be delivered; (13) however, FCC's liability for rent at Portals II does not commence until it occupies the building; (14) these rental payments are meant to cover the period when building space, although still unoccupied by the tenant, is ready for approved modifications and installation of furniture and equipment needed to support the tenant's operations; and (15) currently, although GSA believes FCC should be able to begin its move into Portals II in June 1998, FCC believes that it will not be able to begin moving sooner than July 10, 1998.

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