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The Nuclear Regulatory Commission (NRC) committed the federal government – and ultimately the taxpayers – to a $350 million building it proposed to walk away from and let taxpayers pick up the tab.

During a hearing of the Subcommittee on Economic Development, Public Buildings, and Emergency Management, Chairman Lou Barletta (R-PA) questioned the NRC and the General Services Administration (GSA) – the federal government’s landlord agency – about how the two agencies justified ignoring a $38 million authorization by the Committee on Transportation and Infrastructure to lease 120,000 square feet for NRC projected employee increases, and instead commit to a lease for 358,000 square feet that is costing taxpayers $350 million. 

Furthermore, now that the Federal Government is locked into this new, expensive long-term lease, the NRC testified today that instead of moving employees into the new building, it would rather renew an expiring lease at another of its buildings for another $177 million.

“This committee, and the Administration as well, continue to demand that federal agencies reduce their real estate footprint, better utilize office space, and save money, yet the NRC has done the opposite,” Barletta said. “The NRC’s staffing levels are now lower than they were in 2007, but over the same time period the agency has increased its space by 53 percent. I don't think the President's directive to shrink the federal footprint is a suggestion. I think he means it. I know we mean it.  Today the NRC is finally admitting they have too much space, but their proposed solution simply calls for another federal agency to move into their excessive new building while taxpayers continue to foot the bill.”

The Subcommittee today questioned the NRC and the GSA about their plans to ensure the costs of their previous decisions are minimized.  During questioning however, it became clear that neither agency had any specific plan in place to fill the NRC’s empty building space taxpayers are now paying for.

When Chairman Barletta asked NRC Executive Director for Operations William Borchardt whether the agency will again go around the long-standing Committee lease prospectus process in the future, or whether the agency will abide by the Committee’s authorizations, Borchardt could not commit to the panel that the NRC would abide by that process.

The Subcommittee also heard testimony from the Departments of Homeland Security (DHS) and Health and Human Services (HHS): federal agencies that are making efforts to reduce their footprint and improve the utilization of their office space.  For example, while the NRC’s utilization rate has skyrocketed to 322 square feet per person, HHS’s policy is to house people at the rate of 170 square feet per person and the DHS target is 150 square feet per person.

Background: the NRC’s $350 Million Decision

The NRC headquarters in Rockville, Maryland currently includes three main buildings plus three satellite offices totaling 1.2 million in rentable square feet.  The three main buildings on the NRC campus are known as White Flint 1, White Flint 2, and White Flint 3.  White Flint 1 is federally owned, while White Flint 2 and 3 are leased.  White Flint 3 is the recent build-to-suit leased office building the NRC obligated the federal government to for a 15-year lease term at a cost of $350 million.  The lease on White Flint 2 expires in December 2013, and the NRC proposes to renew the lease on this entire building at a cost of $177 million, despite the nearly vacant White Flint 3 next door.

For a variety of reasons, in 2006 the NRC believed its personnel were going to increase.  At the NRC’s request, the GSA submitted a lease prospectus to the Committee on Transportation and Infrastructure in 2007 for an additional 120,000 square feet of office space at a maximum cost of $38 million dollars for ten years.  The Committee authorized the prospectus shortly thereafter.

However, rather than abide by the Committee authorization, the NRC leased several satellite locations and a custom building three times as large and ten times as expensive as authorized: in total 443,000 square feet for $400 million dollars.  The custom building, White Flint 3, was constructed across the street from the NRC’s headquarters and was finished last year.  The NRC has been paying rent on the nearly vacant building since December. 

The NRC’s office space has grown from 785,000 square feet in 2007 to over 1.2 million square feet of space in 2013 – a 53% increase.  Over the same time period the NRC’s staff level has actually decreased from 3,340 to 3,250 people. As a result, the NRC’s space utilization rate went from 195 usable square feet per person in 2007 to 322 square feet today. 

Despite all this new empty space in White Flint 3 and clear directives from Congress and the President, the NRC wants to the Committee to fully renew a lease at its White Flint 2 building for $177 million.

At today’s hearing the NRC proposed letting another federal agency move into much of the empty White Flint 3.  Although the NRC would decrease its own footprint, taxpayers would still bear the cost of the agency’s $350 million decision to ignore the Committee’s initial authorization.

Barletta and members of the Committee demanded that the NRC and the GSA identify a solution that improves the NRC’s space utilization while also lowering the federal cost.  In this Congress, the Committee has worked to improve federal space utilization and authorize GSA proposals that will produce real savings.  Since January, the space reductions and cost savings realized in Committee approved lease proposals will result in over $470 million in savings to the taxpayer. 

More information from today’s hearing, including testimony, video, and additional background information can be found here. 

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