Biden Proposes $28B to Revamp Federal Buildings, More for Electrified Federal Fleet

President Biden unveiled on Wednesday a plan to provide a significant boost to federal building funding and to overhaul the way the government’s capital projects are financed. 

The $28 billion for federal buildings was part of a much larger proposal to allocate $2 trillion toward infrastructure and job growth around the country, the next major legislative push for the White House after Biden signed the $1.9 trillion COVID-19 relief bill into law earlier in March. The president would carve out $18 billion to modernize the Veterans Affairs Department’s hospitals and clinics and $10 billion for all other federal buildings. The Biden administration is looking to place a particular emphasis on constructing and retrofitting federal buildings in a sustainable manner. 

At least part of the $10 billion would go into a “federal capital revolving fund,” an idea first pitched by the Trump administration. Such a fund would establish seed money for agency infrastructure and would allow projects to be funded over time, rather than all up front. Agencies would refill the fund’s coffers over the course of several years through their annual appropriations. The current process has often led agencies to defer projects as their massive price tags would have crowded out other priorities. 

“It’s a more rational way of thinking about and budgeting for these projects, rather than saying you have to suck it up and absorb it all in year one,” said Norman Dong, who oversaw the federal government’s physical space as commissioner of the Public Buildings Service within the General Services Administration under President Obama and briefly under Trump. 

The $10 billion would go toward purchase, construction or renovation of federal facilities with an eye toward modernization, sustainability and resilience, the White House said. GSA has for years received a fraction of its requested funding for capital projects, including just 39% of its ask for fiscal 2021. The cash infusion would allow GSA to address its backlog of maintenance repairs and new development, though agencies would still be on the hook to eventually reimburse the revolving fund.

Upgrading VA Medical Facilities

The White House also highlighted that while the average private sector hospital in the U.S. is 11 years old, VA facilities have a median age of 58. The $18 billion investment would coincide with a congressionally required commission’s review of VA’s infrastructure to potentially recommend facilities to close or consolidate. 

“The president believes our veterans deserve state-of-the-art hospitals and care,” the White House said. 

The White House said it would use “the vast tools of federal procurement” to purchase “low carbon materials” for new projects and to ensure they only use clean power. Dong, now a managing partner at FD Stonewater, said GSA has for years sought to clean up the federal footprint and Biden’s proposed efforts would continue that ongoing work. The initiative could mirror one in 2009, when GSA received $5 billion as part of the American Recovery and Reinvestment Act to invest in greener federal buildings. 

The Biden administration also plans to use the government’s massive buying power to steer jobs and production toward clean energy manufacturing, noting agencies spend more than $500 billion on goods and services annually. It would allocate $46 billion in federal buying toward electric vehicles, charging ports and electric heat pumps for buildings. The White House reiterated a previous Biden promise to electrify the federal fleet, this time clarifying it would include the U.S. Postal Service. USPS recently announced a contract for the first swath of its plan to replace its 200,000 fleet, though it said just 10% of those vehicles would be electric. Postal officials said the agency would be open to going more electric, but it did not have the funds and would require outside assistance to make the purchases. 

Throughout the COVID-19 pandemic, much of the federal workforce has worked remotely. Dong cautioned federal leaders to use this time as an opportunity to review their portfolios and determine what space agencies actually require. Even if Congress provides the $10 billion Biden is requesting, he said, the administration should take a “hard look” at what projects are truly necessary.