The General Services Administration is facing a $680 million budget shortfall because of reduced demand by agencies for office space and rent reductions on existing space, The Washington Post reported today.
GSA officials said that $232 million of the shortfall was due to the fact that agencies demanded less space than GSA had estimated. "Although for 20 years, everyone has talked about downsizing the government, it didn't really happen before as far as space," said Robert Peck, commissioner of GSA's Public Buildings Service.
GSA also cut the rents it charges agencies in 18 cities to bring its rates more in line with those of the private sector, adding another $209 million to the shortfall.
Other factors contributing to the budget gap included several construction projects that took longer to complete than anticipated, problems with rent estimates made in 1995, and what GSA characterized as various "technical errors."
Peck and GSA acting administrator David Barram said the shortfall was relatively small in comparison to the total Federal Buildings Fund, which is estimated to be $5.7 billion next year according to Clinton Administration budget projections.
To make up for the shortfall, GSA officials said they would try to halt new construction of federal buildings for one year and cut back on repairs of buildings.
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