Federal Communications Commission Planned Move to the Portals II Building

GGD-98-65R: Published: Feb 27, 1998. Publicly Released: Feb 27, 1998.

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Bernard L. Ungar
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Pursuant to a congressional request, GAO provided information on whether the Federal Communications Commission's (FCC) move into the Portals building would be in the best financial interest of the government compared to remaining in its current facilities.

GAO noted that: (1) despite delays in completing the building, GAO believes that it is in the best interest of the government for FCC to move into the Portals II building; (2) various problems, including a lack of funding and congressional concerns that resulted in a stop work order, caused delays in delivery of Portals II to a General Service Administration (GSA) and FCC's move into the building; (3) FCC is being moved to a new space because in 1988 FCC and GSA agreed to consolidate FCC's operations into one facility; (4) the consolidation's objective was to reduce the total amount of leased space, improve FCC's operating efficiency, and reduce its administrative costs; (5) since 1988, FCC's size has increased to such an extent that in 1998 it occupied space in eight office buildings; (6) also, five of the office buildings FCC currently occupies have major fire-safety code or asbestos-related problems or both; (7) according to GSA, all of the leases for FCC space will expire between June 1998 and April 2003 and would have to be recompeted; (8) therefore, FCC would have to move out of it current space, at least temporarily, even if it does not move to Portals II; (9) the Portals II building was selected to meet FCC's initial square footage needs through a full and open competition in which Portals II was the only offeror among the final three offerors that met both technical and award requirements and the cost authorized for the acquisition by the prospectus approved by the House Committee on Public Works and Transportation; (10) if FCC does not move to Portals II, the government is likely to incur additional substantial costs, although the total amount is not known at this time; (11) although GSA expects FCC's consolidation to reduce FCC's office space needs, the annual total rent cost for Portals II will be about $8.4 million more than the $15.4 million FCC currently pays for its office space with short-term leases; (12) according to GSA officials, if FCC does not move, GSA will have to recompete FCC's space requirements, which would likely increase FCC's rent, given market rates and FCC's special requirements; (13) phase I of the Portals II building was not ready for delivery to GSA as originally scheduled on July 1, 1997; (14) as a result, the beginning of actual construction of the building was delayed by about 6 to 7 months; and (15) in July 1997, GSA agreed to fund FCC's relocation costs with the understanding that FCC had been unable to obtain congressional authority to fund these costs, but would continue as a agency priority, to request annual appropriations to reimburse GSA.

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