Navy Office Space: Consolidating Space in Northern Virginia for the Five Systems Commands

Published by the Government Accountability Office on 1990-06-28.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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                                   NAVY OFFICE SPACE
                                   Consolidating Space in
                                   Northern Virginia for
                                   the Five Systems

                                                                                   .,,      s


                                RFSTRICTED--      Not to be released outside the
                                General Accounting Offke unless specifhlly
                                approved by the Office of Congressional
                                               w8ti\               RELEASED
             United St&s
GAO          General Accounting  Office
             Washington, D.C. 20548

             General   Government   Division


             June 28,199O

             The Honorable John P. Murtha
             Chairman, Subcommittee on Defense
             Committee on Appropriations
             House of Representatives

             Dear Mr. Chairman:

             This fact sheet responds, in part, to your request for information about
             the cost of maintaining the five Naval Systems Commands in the Wash-
             ington, D. C., metropolitan area. As agreed with the Subcommittee, we
             (1) identified where the Systems Commands are currently located,
             (2) obtained the status of the current leases for these buildings, and
             (3) determined the status of the General Services Administration’s (GSA)
             efforts to negotiate a lease that consolidates the Systems Commands in
             Northern Virginia.

             Our National Security and International Affairs Division is working on
             other aspects of your request and will report separately on that work.

             As part of its plan to upgrade its space in the National Capital Region,
Background   the Navy plans to consolidate its five Systems Commands at a single site
             in Northern Virginia. Currently, the Systems Commands are located in
             space leased by GSA in Arlington and Alexandria, Virginia. GSA leases
             this space from private organizations and charges the Department of
             Defense (DOD) for the space used by the Navy. GSA calls this charge Rent.
             According to GSA’S regulations, Rent is to reflect the approximate
             equivalent commercial rates for comparable space and services and is to
             be based on the type, quality, and geographical location of the space
             provided. Standard services provided in Rent are to include elevator ser-
             vice, electricity, heat, and air conditioning and are to be based on the
             effort required to service an agency’s space for one shift during a S-day,
             Monday-to-Friday work week. GSA provides special services for
             extended work schedules at an additional cost.

             The Defense Authorization Act of 1989 directed GSA to solicit offers for
             office and related space to meet the Navy’s long-term needs in the
             National Capital Region. In October 1989, GSA issued a solicitation for
             offers requesting about 3 million square feet of space for about 20,000
             employees and related parking to meet the Systems Commands’ long-
             term needs. Plans call for the consolidation to be completed in 1998.

             Page 1                                      GAO/GGD4@39FS   Navy Offlce   Space
                   The Naval Sea Systems Command, Naval Air Systems Command, Space
Results in Brief   and Naval Warfare Systems Command, Naval Supply Systems Com-
                   mand, Naval Facilities Engineering Command, and their support organi-
                   zations are presently housed in 2.27 million square feet of space in 20
                   buildings in Arlington and Alexandria, Virginia. (See app. I, table 1.1.)

                   GSA   has 17 leases, which individually expire from April 1990 through
                   December 1996, for the 20 buildings. Sixteen of the leases are for build-
                   ings in the Crystal City area of Arlington, and 1 lease is for the Hoffman
                   2 building in Alexandria. GSA’s plans call for the Navy to start moving
                   into a new consolidated space in 1993 and for the move to be completed
                   in 1998. To provide the Navy with space between the expiration of the
                   current leases and the availability of the consolidated space, GSA is nego-
                   tiating or plans to negotiate time extensions at market prices on the cur-
                   rent leases. (See app. I, table 1.2.)

                   GSA pays the building owners from $4.00 to $30.45 per square foot on
                   the 17 leases. GSA’S range of costs reflects the quality of the buildings
                   and the age of the leases. Ninety-two percent of the space is office
                   space. GSA charges DOD from $15.92 to $28.49 per square foot in Rent for
                   the office space. These rates reflect the approximate equivalent com-
                   mercial rate for the space and services provided by GSA. Eight percent of
                   the space is for storage and specially equipped space, such as for auto-
                   mated data processing facilities and food service areas. GSA charges DOD
                   27 different rates for this type of space, with the rates ranging from
                   $5.67 to $50.89 per square foot. (See app. I, table I.3 for the rates for
                   each building.)

                   Offerors are currently preparing detailed proposals for the design, con-
                   struction, and maintenance of consolidated space under GSA’S ongoing
                   procurement. The offerors are required to submit their proposals to GSA
                   during June 1990. GSA plans call for awarding a contract for the consoli-
                   dated space during June 1991. (See app. I, table 1.4.)

                   Our work was done at the National Capital Regional Office of GSA’S
Approach           Public Buildings Service (PBS) from March to April 1990. We interviewed
                   contracting personnel and obtained information on the current leases
                   and the schedule for the consolidated lease procurement from PBS’S

                   We discussed the information presented in this fact sheet with PBS offi-
                   cials, who agreed that the information we developed was accurate.

                   Page 2                                       GAO/GGD-gO&WS   Navy Office   Space

As arranged with the Subcommittee, unless you publicly announce its
contents earlier, we plan no further distribution of this fact sheet until
16 days from the date of this letter. At that time, we will send copies to
the House and Senate Committees on Appropriations, House and Senate
Committees on Armed Services, Senate Committee on Environment and
Public Works, House Committee on Public Works and Transportation,
Department of the Navy, General Services Administration, and Office of
Management and Budget. We also will make copies available to others
upon request.

The major contributors to this fact sheet are listed in appendix II. If you
have any questions, please call me on 276-8676.

Sincerely yours,

L. Nye Stevens
Director, Government Business
   Operations Issues

Page 3                                        GAO/GGD4@39FS   Navy Office   Space

Appendix I                                                                                             6
Information on the
Naval Systems
Comrnands’ Location
and GSA’s Leases
Appendix II                                                                                          10
Major Contributors to   General Government Division, Washington, D.C.                                10
This Fact Sheet
Tables                  Table 1.1: Current Space for the Naval Systems                                 6
                            Commands and Support Organizations
                        Table 1.2: Schedule Showing Current Lease Expirations                          8
                            and Planned Move to Consolidated Space
                        Table 1.3: GSA’s Lease Cost for Navy Space and Amount                          9
                            That GSA Charges DOD for This Space
                        Table 1.4: GSA’s Acquisition Schedule for Consolidated                         9
                            Navy Lease


                        DOD       Department of Defense
                        GSA       General Services Administration
                        PBS       Public Buildings Service

                        Page 4                                      GAO/GGD9@39F’S   Navy Office   Space
Page 5   GAO/GGD99-39FS   Navy Offlce   Space
Appendix    I

Infomation on the Naval Systems comma;nds’
Location md GSA’s Leases

Table 1.1: Current Space for the Naval
Systems Commands and Support
Organizations                            Organization                                         Building
                                         Naval Sea Systems Command                            Zachary Taylor                    379,995
                                                                                              James Polk                        284,710
                                                                                              Century                            58,295
                                                                                              Crystal Plaza 5                    57,155
                                                                                              Crystal Mall 2                     53,986
                                                                                              Crystal Park 1                     43,760
                                                                                              Crystal Plaza 6                    23,074
                                                                                              Crystal Mall 4                     10,000
                                                                                              Eads and Fern Stsa                  4,532
                                                                                              Crystal Mall 3                      3,000
                                         Naval Air Systems Command                            Jefferson Plaza 1, 2              391,470
                                                                                              Crystal Gateway 4                  48,220
                                                                                              Crystal Gateway 1                  35,000
                                                                                              Martin Van Buren                    5,518
                                                                                              Eads and Fern Stsa                  5,336
                                                                                              Crystal Gateway 3                   4,045
                                         Space and Naval Warfare                              Martin Van Buren                  252,383
                                         Systems Command                                      Crystal Mall 2                      5,884
                                         Naval Supply Systems Command                         Crystal Mall 3                    136,277
                                                                                              Crystal Park 1                     36,087
                                                                                              Eads and Fern Sts.”                17,400
                                                                                              Crystal Mall 2                      4,510
                                                                                              Martin Van Buren                    3,209
                                                                                              Crystal Mall 4                      2,700
                                                                                              Crystal Plaza 6                     2,400
                                                                                              Jeferson Plaza 1, 2                 2,360
                                         Naval Facilities Engineering Command                 Hoffman 2                            118,285
                                         Strategic Systems Project Office                     Crystal Mall 3                        84,887
                                         Comptroller of the Navy                              Crystal Mall 3                        37,620
                                                                                              Crystal Mall 2                         8,865
                                                                                              Crystal Gateway 4                      5,219
                                         Assistant Secretary of the Navy (Installations and   Crystal Plaza 5
                                         Environment)                                                                             45,450

                                         Page 6                                                   GAO/GGD9@39FS      Navy Office    Space
Appendix I
Information on the Naval System
Cmnmands’ Location and GSA’s Lessee

Organization                                             Building
Navy Office of Technical                                 Crystal Plaza 6                         13,735
TransferBecuritv  Assistance                             Crvstal Plaza 5                          3.730
Office of the General Counsel                            Crvstal Plaza 6                          8.720
                                                         Crystal Plaza 5                          8,495
Personnel Support Detachment                             Crystal    Mall 3                        15,049
Naval Audit Service/Capital                              Crystal    Mall 4                         6,595
Region                                                   Martin    Van Buren                       4,672
                                                         Crystal    Square 5                       2,080
Navy Regional Data Automation Center                     Crystal Mall 3                          11,600
Navy Federal Credit Union                                Crystal Square 5                         5,155
                                                         Zacharv Tavlor                           3,296
Naval Telecommunications Command/Washinaton              Crvstal Plaza 6                          7.885
British Navy                                             Crystal Plaza 6                          6,055
!!$wwariat Headquarters, Civilian Personnel              Crystal Plaza 6
Naval Intelligence Command                               Crystal Plaza 5                        1,675
Total Space                                                                                2,273,344
“GSA’s records list the addresses for the buildings as 1400-1430 S. Eads St., 1201-1301, and 1411 S
Fern St. without providing a name for the buildings.

Page 7                                                        GAO/GGD-!M-SSFs      Navy Office    Space
                                        Appendix I
                                        Information on the Naval Systema
                                        Commands’ Location and GSA% Leases

Table 1.2: Schedule Showing Current
Lease Expiratlons and Planned Move to                                                                                         Schedule for
Concrolidsted Space                                                                                           Current               move to
                                                                                                                  lease       consolidated
                                        Suildina                                                              expires                 space
                                        Century                                          VA01 3022           IO/i 5191                  1z/94
                                        Crystal Gateway 1                                VA021 522           0 l/07/92                  12193
                                        Crystal Gatewav 3                                VAO24OZZ            12/04/96                   12193
                                        Crystal Gateway 4                                VAO25OZZ            10/31/91                  12194
                                        Crystal Mali 2,3, and 4                          VA141 IZZ           02/l l/95                  12197
                                        Crvstal Park 1                                   VA0251 ZZ           05131 I96                  12/98
                                        Crystal Plaza 5                                  VAl324ZZ            02/29/92                   12197
                                        Crystal Plaza 6                                  VA1 28722           08/31/91                  12197
                                        Crvstal Sauare 5                                 VA1 606ZZ           12131I92                   12197
                                        Hoffman 2                                        VA1 54522           02125193                   12197
                                        James Polk                                       VA1447ZZ            07/07/90                   12195
                                        Jefferson Plaza 1 and 2                          VA1 45022           04/30/90                   12193
                                        Martin Van Buren                                 VA1 44622           06/l 8190                 12196
                                        Zachary Taylor                                   VA1451ZZ            09/l 9190                  12198
                                        1400-1430 S. Eads St.a                           VA1 14722           10/31/90                   12198
                                        1411 S. Fern St.”                                VA1 24722           05131I90                   12194
                                        1201-1301 S. Fern St.”                           VA1 19522           11I25190                  12193
                                        aGSA’s records do not provide names for these buildings.

                                        Page 8                                                       GAO/GGIM@3SFfj       Navy Office   Space
                                                Appendix I
                                                Information on the Naval Systems
                                                Canmands’ Location and GSA’s Leases

                                                                                                                            ___~_~                 -
Table 1.3: GSA’8 Lease Coat for Navy
Space and Amount That GSA Charges                                                                                                  GSA’s coat    OSA charge
DOD for This Space                                                                                            Building             per square     to DOD per
                                                Buildina                                                      number                      foot   sciuare fooP
                                                Century                                                       VA01 3022                 $19.27          $23.48
                                                Crystal Gateway 1                                             VA021 522                  20.20           23.89
                                                Crvstal Gatewav 3                                             VAO24OZZ                   25.24           28.27
                                                Crystal Gateway 4                                             VAO25OZZ                   27.07           28.49
                                                Crystal Mall 2, 3, and 4                                      VA1411ZZ                   19.80           21.86
                                                Crystal Park 1                                                VA0251 ZZ                  30.45           27.95
                                                Crvstal Plaza 5                                               VA1 32422                  20.08           21.86
                                                Crystal Plaza 6                                               VA1 28722                  19.10           21.86
                                                Crystal Square 5                                              VA1 606ZZ                  23.10           23.48
                                                Hoffman 2                                                     VA1 54522                   6.02           17.29
                                                James Polk                                                    VAl447ZZ                    6.44           21.86
                                                Jefferson Plaza 1 and 2                                       VA1 45022                   7.89           21.86
                                                Martin Van Buren                                              VA1 4462                    8.05           21.86
                                                Zachary Taylor                                                VA1451 ZZ                   7.66           21.86
                                                1400-1430 S. Eads Stb                                         VA1 14722                   4.00                   c
                                                1411 S. Fern St.b                                             VA1 24722                   5.93           16.50
                                                1201-1301 S. Fern Stb                                         VA1 195ZZ                   8.68           15.92
                                                aThese charges are for office space. In addition to office space, DOD is charged for seven categories of
                                                storage and specially equipped space. About 8 percent of the Navy’s space is for such space, with
                                                GSA charging 27 different rates that range from $5.67 to $50.89.
                                                “GSA’s records do not provide names for these buildings

                                                CGSA’s records show that DOD does not have office space in this building. However, DOD is charged
                                                $567 per square foot for storage space.

Table 1.4: GSA’8 Acquisition   Schedule   for
Conrolldated   Navy Lease                       Action                                                                                    Date
                                                Solicitation   for offers   was issued   telling   offerors    to prepare   proposals     October 4, 1989
                                                for two separate phases. Phase I proposals were to include information
                                                on the offerors’ qualifications, site proposals, expected costs, and
                                                financial capability. Phase II proposals were to include the data needed
                                                for an evaluation of the design, construction, and maintenance of the
                                                proposed facilities.
                                                GSA received Phase 1 proposals from offerors.                                             November 20,1989
                                                GSA requested offerors to submit Phase II proposals.                                      January 9,199O
                                                Due date for submission of Phase II proposals to GSA.                                     June 18,199O
                                                GSA plans to request best and final offers after initial contract                         November 15.1990
                                                Deputy Regional Administrator is scheduled to receive an award                            December 30,199O
                                                recommendation from GSA personnel evaluatina proposals.
                                                Congressional briefings are planned to begin.                                             January 28,199l
                                                Contract award date.                                                                      June 1,199l

                                                Page 9                                                                  GAO/GGD-99-39PS     Navy OftIce Space
Appendix II

Major Contributors to This Fact Sheet

                        William Engel, Assistant Director, Government Business Operations
General Government        Issues
Division, Washington,
                        Robert M. Antonio, Evaluator-in-Charge
DC.             - .

(240018)                Page 10                                   GAO/GGD-99-99FS   Navy Office   Space
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