Ask a RAM: Consolidation Funding

Question—You’ve talked previously about consolidation funding for projects.  Is this funding program still available?  How has it benefited recipients so far, and is it worth my time to consider?

In our 2014 Focus Summer edition, we talked to you about 'consolidation funding' and how your agency could benefit from it.  We have updated information to share with you about this exciting and innovative program.

While consolidating federal offices affords the government opportunities to reduce rental payments and utility costs, shrinking the federal footprint requires effective long-term planning and coordination.  It also requires funding to mobilize the effort.  Whether it’s moving a leased location into a federally owned building or conducting a major alterations project in federally owned space, both GSA and our clients must front the money required to achieve long-term objectives.  Recognizing the advantages and budgetary challenges of consolidation, Congress allocated GSA funding since Fiscal Year (FY) 2014 to expressly facilitate federal consolidation efforts.

In FY 2014 and 2015 GSA allocated $140 million to 22 agencies for 45 projects. These consolidation projects reduced nearly 1.1 million usable square feet (USF) and as a result, produced over $36 million in annual rent savings.

In FY 2016, GSA is planning for a proposed $200 million in consolidation funds.  We expect to be able to fund 30 to 40 projects for 15 to 20 agencies if we receive this funding.  This funding could reduce up to 1 million USF resulting in $35 to $50 million in annual rent savings.  

While projects vary in size and scope, typical consolidation projects avoid lease costs, recapture vacant federal space, optimize the federal footprint and workspace, consolidate leased space into owned space, and reconfigure/reduce owned space.  While these funds cover necessary project costs, including design and construction, the PBS pricing policy, including tenant improvement (TI) amortization, still applies.  

If you’re wondering how these funds can help, here’s an example.  The IRS in Seattle, WA, had reduced space needs and was looking to consolidate their Federal Building occupancy.  They also had a function in a leased space that was scheduled for expiration.  With a $1.5 million investment in consolidation funds, IRS was able to move from their more expensive lease and co-locate their operational functions in a reduced footprint in the Federal Building.  IRS has saved the taxpayer almost $184,000 in annual rent so far and about 11,000 rentable square feet—all while incorporating additional space efficiencies.

Early planning for a consolidation fund project is essential, and GSA will eagerly assist your agency with its consolidation effort.  GSA has worked with our client agencies to identify 33 projects for FY 2016 consolidation funds, but we certainly can accommodate more.  If this kind of project sounds like an exciting funding opportunity for your agency, please get in touch with your agency’s Regional Account Manager (RAM) listed below.

PBS Regional Account Managers
Pat Zucca (215) 446-2889
Dorothy Grosick (215) 446-4569
Kimberly Hart (215) 446-4588
Peggy Murr (215) 446-2888
Justin Owens (215) 446-5712
Pedro Viera (215) 446-4534
Jessica Giannone (215) 446-4599


This article is part of the Summer 2015 issue of the FOCUS newsletter. Please visit the Focus Newsletter page to read our newsletter. To subscribe to FOCUS, complete the online subscription form.

Last Reviewed 2015-07-29