Questions about projects and project costs.
Pursuant to section 3(g) of the proposed legislation, a project must be a federal facility, which is defined in section 3(e) as land, together with improvements, structures, and fixtures having a useful life of at least 25 years. The facility must also by one in which Federal personnel perform the agency mission.
In addition to the cost of the facility itself, section 3(g) allows the cost of site, design, management and inspection, construction, and commissioning to be paid by a purchase transfer, and also purchases of associated furniture, fixtures, and equipment necessary to furnish the Federal facility for initial occupancy.
Note that pursuant to section 3(g), the following costs cannot be covered by the revolving fund: items acquired for resale in the ordinary course of operations, consumable goods such as operating materials and supplies, normal maintenance and repair of real property, salaries and other operating expenses of agencies, grants to non-Federal entities, tax incentives, Federal credit assistance provided to non-Federal entities, and capital leases pursuant to which title does not automatically pass to the Government.
Yes, section 3(g) permits using the revolving fund to pay for facilities acquired by purchase, construction, manufacture, lease-purchase, installment purchase, outlease-leaseback, exchange, or modernization by renovation. The cost of P3s and other alternative financing would be calculated pursuant to existing scoring rules so that decision makers would be able to compare those costs with other methods of acquiring the same asset.
4. What happens if the actual project cost exceeds the amount approved for transfer from the revolving fund?
Section 4(e) directs that no additional funds can be transferred to cover the higher cost unless first approved by an Appropriations Act, so the purchasing agency would need to return to Congress and request the additional funding.
Section 7(c) requires any excess funding to be returned to the revolving fund.
6. Is the annual repayment amount recalculated if the actual project cost differs from the purchase transfer approved by Congress?
Yes, section 6(c)(2) requires GSA to recalculate the annual repayment amount so that the sum of the repayments equals the actual cost of the project.
7. What happens if the sum of all newly approved projects exceeds the balance in the revolving fund?
In such circumstances, section 4(g) of the proposed legislation requires the Administrator to reduce the purchase transfer amount for all new projects by a uniform percentage so as to eliminate the excess. Ideally, the Appropriations Committees would have a system for tracking purchase transfer approvals to avoid this situation.
Section 6(d) requires the agency to continue making the annual repayments until it has fully repaid the revolving fund. If the disposal is by sale, the agency must first use the sale proceeds to repay the revolving fund. Any remaining sale proceeds stay at the purchasing agency, or at GSA for a project held in GSA’s inventory, and are permanently available to support the agency’s real property activities.