A Navy office project for up to 20,000 workers in Northern Virginia may be scaled down by as much as one-third to reflect expected cuts in the defense budget, federal officials have told five developers bidding on the contract.
The Navy project, now an $821 million proposal for at least 3 million square feet of office space, could be reduced to a less expensive plan for as little as 2 million square feet, General Services Administration officials said.
The GSA is overseeing the project and changed the project's guidelines at Navy officials' request.
Navy sources said Friday that the request amounted to an acknowledgment that the current proposal may be too large in light of a rising federal budget deficit and projections for a scaled-down Navy in the 1990s.
Several members of Congress, including Sen. John W. Warner (R-Va.) and Rep. Frank R. Wolf (R-Va.), have encouraged the Navy to reconsider the size of the project, which has been proposed for six sites in Arlington and Alexandria.
In a letter last month to Navy Secretary H. Lawrence Garrett III, Wolf said that decreased tensions with the Soviet Union, the opening of Eastern Europe and the rising U.S. budget deficit warranted another look at the Navy project.
The size of the project, Wolf said in the letter, may have been "based on assumptions of future space requirements that are no longer realistic . . . . The changes around the world, and the potential for significant force reductions, indicate that serious consideration should be given" to trimming the size of the project.
Warner said Friday that the move toward a smaller Navy facility is "a very prudent decision, given the uncertainty of the downward trend in defense spending."
Art Turowski, manager of the Navy project for the GSA, said that last week the five bidding developers each were asked to submit proposals for 2 million, 2.25 million, 2.5 million, 2.75 million and 3 million square feet of office space.
Despite the forecast for defense cuts, the Navy still wants a site that could accommodate an expansion of up to 3 million square feet, Turowski said.
A spokesman for one of the developers said the request for smaller proposals should not significantly delay the bidding.
"Typically, the less space required, the more flexibility we have," said Scott E. Sterling, spokesman for the Charles E. Smith Cos., which has submitted two of the six proposals for the Navy project, including one that would include renovating existing Crystal City buildings now occupied by Navy workers.
The House has approved a bill authorizing $679.6 million next year for the Navy project, which is expected to be funded over two or three years.
A similar plan is stalled in a Senate subcommittee because the panel's chairman, Daniel Patrick Moynihan (D-N.Y.), is questioning the Bush administration's effort to avoid borrowing money by paying for the project up front. Moynihan, who calls such an expenditure unlikely in a time of a dwindling federal budget, wants to stretch payments over 20 or 30 years.