Does the Consumer Protection Agency's Headquarters Need a $139M Upgrade?

Flickr user afagen

The Consumer Financial Protection Bureau, whose creation in 2010 continues to rankle many Republicans, came under fire this month in both the House and Senate for a building renovation it has undertaken with the General Services Administration.

Most CFPB employees are currently in temporary offices at 1 Constitution Square Northeast in Washington while the nearly four-decades-old headquarters at 1700 G Street Northwest is renovated at an estimated cost of $139 million over 30 months, according to CFPB spokesman Sam Gilford. GSA is providing project construction and management services for a 4 percent fee and standard contingency reserves.

“The overhaul of the building is needed because all the major systems, from HVAC to plumbing, are at the end of their useful lives,” Gilford said.

The offbeat building, constructed in 1976 and previously home to the Federal Home Loan Bank Board and the Office of Thrift Supervision, includes an outdoor plaza that leaks into the building’s basement. “No renovations were ever done,” Gilford said, other than roof maintenance, repair, and some nonstructural adjustments to the interior.

But Republicans have honed in on a different cost estimate that they believe points to wasteful spending.

When Cordray testified recently on the agency’s semi-annual report to the financial services panels in both chambers, the lawmakers asserted that the project’s cost has ballooned. It is just one among many problems afflicting the consumer agency that gets no congressional appropriation and is hence, Republicans say, “unaccountable to the people.”

On June 10, Sen. Mike Johanns R-Neb., of the Senate Banking, Housing and Urban Affairs Committee, challenged Cordray on the building renovation project. It is “nearly embarrassing” to read from an architect’s description of plans for the CFPB headquarters in a building the government leases and does not own, Johanns said.

"At the western terminus of the skim fountain, a raised water table spills over and down into a sunken garden below,” Johanns read. “The water cascade creates an atmosphere of white noise as visitors peer over the glass railings, down into the sunken garden pools and plantings below. At the western side of the plaza is a calmer, informal seating area under shady trees. Under the trees, the soft contrast of the stone dust floor further implies the removed space of rest and contemplation. Additional seating is provided along the winder building edge at a lightly elevated, timber-paved porch, which is covered by dark bronze-colored trellis, with a light bronze color adorned with vines.”

The senator then went after the rising costs. “Renovation costs started at $55 million,” he said. “The Washington Examiner thinks it's up to $95 million now. Now I think your own acknowledgement is that it's probably $145 million.”

Cordray called the Examiner portrayal “fiction,” characterizing the $55 million as a “placeholder” from an early, single-year budget. He denied any desire to create a “palace,” saying, “There's nothing special about this, with respect to other government buildings …. It is actually a building that needs a great deal of work. I wish it didn't. I'd rather not spend a single penny on that.”

As for the architect’s description, Cordray said he too found it embarrassing. “It's the kind of flowering statements that someone will make when they're trolling for a bid, trying to get the business and trying to make it sound as wonderful as they can. Much of the flowery words there do not reflect any particular cost. I would say that you could say the same thing about many of the staircases and outer areas around the Capitol here,” he said.

On the House side, Rep. Jeb Hensarling, R-Texas, chairman of the Financial Services Committee, confronted Corday on June 13:

“Director, it's no secret you and I have had both public and private discussions about the accountability of your agency. I look again at the spiraling cost of the office renovations. I look to the National Debt Clock, to my left and my right. I think a lot about this issue and I think a lot about how it impacts my children, particularly when I gaze upon them. So the last time you were here, you stated that the cost of this building, I believe, was less than the figure I had, but now the most recent GSA cost is $139 million and change, [plus a] $22 million cost to [temporarily sublet] space from the GSA while the renovations take place, $13 million in other costs associated with the temporary three-year occupancy of your temporary space at 1 Constitution Square -- this is from your documents -- $339,000 to move to the temporary space, [and] $9,278,000 to pay Skidmore, Owings & Merrill for the renovation. By my math, this now adds to up $184 million on a building that you do not own. Do you agree or disagree with the math?”

Cordray said, “There are numbers about the cost of construction to renovate the building, which has been our previous focus. There are also attendant costs now that we will have to, and have, in fact, moved out of the building so that the construction can be speeded and, therefore, more cost-effective.” He went on to say that he too has children, adding, “I care about the debt just as you do, for the same reasons.”

But “do you agree it's taxpayer money?” the chairman asked.

“It is federal government money,” Cordray rejoined. “We come from the Federal Reserve, as you know.”

When Hensarling read from the same architect’s flowery description, Cordray said, “Every halfway-functioning shopping mall in America has the kind of features you describe. That's puffing by people trying to work through a permit process.” He called the current CFPB building “a dump” and invited the congressman, as he had the senators, to come visit.

Asked for comment, GSA broke down the project’s $139 million as follows: budgeted estimated construction costs, including contingencies, are $125,766,000, which breaks down to about $250 per square foot for a building that is 503,000 gross square feet. GSA itself is to receive $13.3 million total for overseeing the project, providing staff, day-to-day management of design and construction, safety and general inspections, agency specialists reported. Any unused funds will be returned to CFPB.

“GSA is committed to delivering the best value in real estate to the government and the American people,” a spokeswoman said. “The cost estimates of the project fall within similar projects of this size and scope that GSA has completed within the past few years.”

(Image via Flickr user afagen)

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