A Senate committee yesterday halted new construction and leasing by the General Services Administration (GSA) for the rest of the year, freezing an estimated $1 billion in projects here and across the country.
The Senate Environment and Public Works Committee took the drastic action because of committee members' concern that they have no way to know what they are approving in light of revelations about GSA's bookkeeping methods. The committee members also want to reevaluate federal building policies.
"All over America, people are concerned about an agency with fraud and kickbacks." said Sen. Alan K. Simpson (R-Wyo.), a member of the committee. "I think people are tired of that, and the only way I know to deal with it is through the power of the budget. It's a message," he said.
The moratorium immediately halts $400 million in projects already submitted by GSA for committee approval, including the planned $171 million Government Printing Office headquarters in Washington. GSA also plans to submit an additional 100 projects worth $800 million for approval this year.
The freeze received unanimous approval by voice vote from the committee. It applies to all construction, major repairs, alterations, leasing, and lease renewals of $500,000 or more during the first session of Congress.The committee said it would consider waivers of the moratorium only in emergencies.
Sen. Daniel P. Moynihan (D-N.Y.), who moved to impose a freeze, said: "There is a question of how well GSA is doing its job here [in building and leasing federal office space].... If they have a management problem, we have a responsibility to find out."
He added: "We are not happy with the pattern the federal government has been in for 15 or 20 years of leasing buildings from private owners, buildings which are built to be leased by the government. All we have is the rent stubs to show for it."
Sen. Robert T. Stafford (R-Vt.), the ranking Republican committee member who worked on the moratorium with Moynihan, said, "In my case, I would like to have a better understanding of the proposition we are getting $1 worth of building for $1 of taxpayer's money."
Stafford said: "The vote indicated very little confidence in GSA's procedures and figures. With the cloud hanging over GSA, it's a poor time to fire [GSA Administrator Jay] Solomon." This was a reference to Solomon's feeling he is being forced to leave the agency.
"It means we've had enough, and we're not going to take it any more," a committee source said. "We're not going to do anything until this mess [the GSA scandal] is straightened out."
Forty-five persons have been indicted and 38 of those have pleaded guilty or been convicted in continuing federal investigations of fraud and corruption in GSA building and office supply contracts. Both the Baltimore and D. C. U. S. Attorney's offices recently subpoenaed all of GSA's lease records for the Washington area as part of the investigations.
Under current law, GSA, which provides federal workers with office space and supplies, may not proceed with construction or leasing projects of $500,000 or more until both the Senate and House Public Works Committees have approved a prospectus outlining the need for each project and its cost.
Sources said the committee probably would consider a lease renewal as an emergency, since the government already would be an occupant in the buildings. However, in these cases, the committee might approve renewals for a year rather than the usual 10-year or 20-year renewals, the sources said.
During yesterday's vote, the committee pointedly declined to grant a waiver for construction of the new Government Printing Office Building. GSA plans to build the 24-acre structure on a 33-acre site near the Rhode Island Avenue Metro subway station on Brentwood Avenue NE between New York and Rhode Island Avenues. The site has yet to be acquired by the government.
Other construction projects placed in an holding pattern by yesterday's action are a $51 million federal office building in San Francisco, a $32 million building in Omaha, Neb., and a $9 million structure in Lansing, Mich. Building rentals held up include a $120 million lease for the Nuclear Regulatory Commission in the Washington area and a $17 million lease in Knoxville, Tenn.
These figures represent the total rent to be paid over the term of each lease. GSA's public buildings service said it could not immediately supply a comparable figure for all leases that would be affected by the committee's action. Instead, it tallied the rentals over a one-year period.
Solomon said yesterday that he had just learned of the committee's action and had not had time to study it.
One of the committee's concerns is GSA's apparent emphasis on leasing government office space rather than building it. The committee's position is that construction is cheaper than leasing in the long run and has made its position clear to GSA. However, federally leased space has risen 97 percent since 1967, while space owned by GSA has declined.
GSA blames Congress for failing to appropriate the funds needed for new construction.
"One of the biggest arguments for it [leasing] is you have no big lumps of money in the budget for construction," Moynihan acknowledged.
In explaining their vote to freeze funds, several members of the committee referred to their qualms about approving a renewal of a lease last year on a building owned by developers implicated in Maryland political scandals.
"There's a sensitivity that there is a scandal, and we ought to make sure the areas under our control are looked at by us very carefully," Sen. John H. Chafee (R-R.I.), said.
Sen. Jennings Randolph (D-W. Va.), chairman of the committee, said it will hold hearings on GSA practices and legislation to tighten procedures for approving new construction and lease requests before considering lifting the moratorium.