Yesterday, the House passed H.R. 3547, the Consolidated Appropriations Act, 2014, by a vote of
359 - 67. This evening the Senate passed the bill by a vote of 72-26. The bill comes after Congress failed to pass any of the 12 appropriations bills for fiscal year (FY) 2014. AGC
advocated for the passage of the bill to ensure predictability for FY 2014 federal construction programs.
The legislation – which ends four years of Congress funding government agencies through a series of stopgap spending bills and funding extensions – sets overall discretionary spending levels of $1.1 trillion as agreed to in the budget conference agreement. These levels are $45 billion over levels that had been scheduled under automatic sequester spending cuts.
AGC has done an
analysis of the FY 2014 federal construction accounts in the bill. The following is a summary of the appropriations bill and the federal construction programs that AGC closely monitors:
Federal Construction
Overall, federal construction funding accounts generally see either slightly increasing or relatively flat funding in FY 2014, with more optimistic signs for federal contractors than not. While the hard numbers show that military construction accounts in total see a slight decrease, they do not account for sequestration cuts in FY 2013. As a result, contractors should actually expect a slight increase in overall military construction spending. On the U.S. Army Corps Civil Works side, contractors should expect a small spike—$723 million—in funding, representing a positive development. Also, and perhaps most notably, the General Services Administration increases to over $1.5 billion, which is more than what the agency has received for construction over the last three fiscal years.
Military Construction
Despite the small decrease in total military construction accounts in FY 2014 compared to FY 2013, contractors should expect slightly more—roughly 3 percent—overall dollars flowing to military construction projects, as the FY 2013 figures do not include sequestration cuts. As the figures in the chart below indicate, the Department of Defense will significantly more construction dollars into the Air Force construction accounts in FY 2014, after a significant draw-back in FY 2013.
The
final FY 2014 appropriations bill’s explanatory text, after page 13, lists all of the projects included in the final bill by state and country
. In addition, it should be noted that:
- None of the funds from the Air Force Military Construction Account earmarked for military construction projects in Saipan or for Pacific Air-power Resiliency in Guam, Joint Region Marianas may be obligated or expended until the Department of Defense completes a Pacific Air Resiliency Study;
- Funds in the BRAC 1990 and BRAC 2005 accounts have been merged into one account, under BRAC 1990; and
- The bill includes $150 million for DoD’s Energy Conservation Investment Program, which promotes green building initiatives, among other things.
USACE Civil Works
For major construction accounts overall, the U.S. Army Corps of Engineers Civil Works program will experience a significant 17 percent—$723 million—increase in FY 2014 when compared to FY 2013. The FY 2014 Civil Works funding figures show an improvement of over $400 million from FY 2012. Most notably, the Operations and Maintenance (O&M) Account—which largely funds harbor maintenance dredging—and the Mississippi River and Tributary Account see a 25 percent plus increase in FY 2014. You can find a list of projects that could receive construction account funding in FY 2014 by viewing the
bill explanatory text, starting at page 7A; projects that could receive MR&T funds begin at page 12A, and projects that could receive O&M projects at page 15A.*The FY 2013 figures do not reflect sequestration cuts or rescissions.
Concerning the Construction Account, USACE can only initiate up to but no more than four new construction projects in FY 2014. This means that if a project did not receive funding through the Construction Account in FY 2013 or in prior years, it is a new construction project. No more than four of those new construction projects may begin in FY 2014. However, funding in the Construction Account may be used without restriction for construction projects that received funding in prior fiscal years. Three of those four new construction projects must either benefit mostly either: (1) navigation transportation; or (2) flood and storm damage reduction. One of those four new construction projects must mostly benefit environmental restoration purposes.
It is also important to note that over $1 billion allocated from O&M comes from the Harbor Maintenance Trust Fund. Consequently, more than 50 percent of the annual HMTF revenues will go towards harbor maintenance. This is a truly positive step by appropriators in moving towards fully using HMTF revenues for harbor maintenance, for which AGC has long advocated. In addition, 25 percent of funding for the Olmsted Lock and Dam project will come from the Inland Waterways Trust Fund (IWTF). This means that the remaining funds in the IWTF—$60 million—may be used for other lock and dam projects. For a number of years the Olmsted project has used a substantial amount of IWTF funding, to the determent of the rest of the system.
*Please note that this chart does not include other USACE accounts including the regulatory, administrative and Assistant Secretary of the Army accounts.
Federal Facilities
General Services Administration
GSA will see a robust FY 2014 program reminiscent of the stimulus years. The Construction and Acquisition Account is funded at $506 million and the Repairs and Alterations Account is funded at $1.253 billion. Yes, that’s “Billion” with a “B.” As the chart below indicates, GSA has seen anemic levels of construction funding over the previous three fiscal years. In its advocacy efforts, AGC has noted that such levels of funding fail to adequately fund maintenance activities, let alone improve the federal facility portfolio.
In addition the bill calls for funding of construction projects for:
- San Ysidro, CA—US Land Port of Entry, $128,300,000
- Lakewood, CO—Denver Federal Center, $13,938,000
- Washington, DC—DHS Consolidation at St. Elizabeth’s, $155,000,000
- San Yuan, PR—Federal Bureau of Investigation, $85,301,000
- Laredo, TX—US Land Port of Entry, $25,786,000
- Winchester, VA—FBI Central Record Complex, $97,853,000; and
- The housing requirements of the Judiciary’s Southern District in Mobile, AL Provides $69,500,000 to meet.
For the VA, while overall construction funding remains nearly the same as in FY 2013, the story rests in a drastic change in allocation of funds. The VA construction accounts will see total funds amounting to $1.057 billion in FY 2014. However, the vast majority of those funds will be for the Minor Construction Account--$714.8 million—which pays for projects below $10 million. The VA’s Major Construction Account—for projects over $10 million—has dipped from $1,194 billion in FY 2010 to just $342 million in FY 2014. This is likely a result of difficulties the VA has had successfully completing major hospital projects throughout the country over the last several years responsible for the continuing loss of congressional faith in the agency to deliver cost-effective projects.
Department of Veterans Affairs*Please note that these GSA accounts did not experience sequestration cuts in FY 2013.
To view the priority projects funded by Congress under this appropriations bill from the Major Construction Account,
see page 45 of the bill explanatory text.
In addition, the bill:
- Provides $85 million for the construction of state extended care facilities;
- Provides $46 million for grants for construction of veterans cemeteries; and
- Allows proceeds or revenues derived from enhanced-use leasing activities to be deposited into the construction major and minor accounts.
For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org. *Please note that the VA did not experience any cuts as a result of sequestration in FY 2013.
