WASHINGTON The costs incurred by the Consumer Financial Protection Bureau in renovating its offices were in line with similar projects taken on by other agencies and not extravagant, according to the agency's inspector general.
The watchdog released a report Wednesday in response to accusations by Republicans that the bureau was spending too much on its renovation.
"We determined that construction costs appear reasonable based on comparisons to an independent cost estimate and the costs of two comparable building renovations identified by the U.S. General Services Administration," the report said. "We also determined that potential renovation costs are below the amount previously budgeted and obligated for the renovation."
The CFPB, which was created with the passage of the Dodd-Frank Act in 2010, has occupied the former offices of the now-defunct Office of Thrift Supervision.
The report detailed that the construction contract for the CFPB headquarters renovation that was approved by the General Services Administration which manages federal facilities was for $97.7 million, with additional funds available depending on various options that the agency has not yet determined, such as ground-floor retail or a childcare center. The architecture and engineering contract covered an additional $12 million and a construction management contract was approved for $4.4 million. The project was budgeted at $145.1 million and to date is projected to cost $138.7 million, the report says.
The IG's office said that CFPB followed all appropriate procedures in identifying and awarding its contracts, but did say that the cost-effectiveness of renovating the facilities rather than renting existing office space over the 30-year life of the renovations relies on an assumption that comparable office space costs will grow at a rate of at least 3.5% annually. At the time the decision was made, office space costs were projected to grow at between 2.7% and 4.5% for the next five years, and as of the end of 2014 comparable rents were growing at a rate of 3.7% to 4.5%, the report said.
The CFPB praised the report's findings, saying that the agency is "pleased that the report found that the construction costs for the bureau's headquarters renovation appear reasonable and that we have designed and implemented appropriate controls for approving, managing, and documenting renovation costs and project decisions."
Members of the House Financial Services Committee which requested the report had accused the CFPB of being too lavish in its renovation of the former OTS building. The IG's office had estimated last year that the renovation costs could be as high as $216 million, though that accounted for contingencies that appear not to have materialized.