FDA’s reward for consolidating personnel into new buildings on the White Oak headquarters and abandoning facilities it leased off-campus was a rent increase of more than 23%.

The situation will require a substantial budgetary increase, according to FDA’s justification of President Obama’s fiscal year 2016 budget request, even though it may defy logic.

FDA also intends to update campus plans to determine how best to deal with its ongoing growth with White Oak now at capacity in its existing form.

The budget request includes a 5% boost from the previous fiscal year’s enacted budget for General Services Administration rental payments, which are the dollars FDA pays its sister federal agency for use of government buildings (see table at end of story).

During FY 2014, the agency moved about 2,900 Center for Biologics Evaluation and Research, Office of Generic Drugs and other personnel to White Oak, including the new four-building Life Sciences-Biodefense Laboratory.

The benefits of the consolidation already are evident as productivity has increased now that “researchers in labs are side-by-side with product reviewers,” the agency said in an email.

The agency said that GSA rent for the new buildings is $42 million per year, an $8 million increase (23.5%) from the rent it paid for the leased space it vacated.

FDA said it knew costs would increase and that program budgets would not be affected. GSA payments for the buildings also are not expected to decrease much over time because they are “based on prevailing market rental rates.”

“We relocated from leased space that was over 20 years old into brand new, state of the art laboratories and Class A office buildings absolutely vital to carrying out our important health care responsibilities,” the agency said in the email.

FDA also said in the budget document that its GSA rent cost increased “disproportionately” in FY 2014 because it occupied the four new buildings at White Oak for a full year.

“The space is also more expensive than the vacated locations because GSA charges higher rent for newer, more modern facilities,” the agency said in the budget document.

FDA requested $242.1 million, including $65.4 million in user fee revenue, to cover GSA rental payments, including the additional costs associated with the new buildings.

The agency also proposed a number of reductions to low-priority enforcement and other activities in its FY 2016 budget request (see related storyAlso see "FDA Field Operations Would Endure Reductions Under Budget" - Pink Sheet, 9 February, 2015.).

When construction was in full swing a few years ago, FDA argued that it needed all the funds for new buildings to ensure it would not have to rent outside office space for employees Also see "FDA FY 2012 Budget Gives Hamburg Regulatory Science Upgrade A Year Late" - Pink Sheet, 21 February, 2011..

CBER and OGD spent several weeks moving personnel and transitioning services over to White Oak from other nearby locations in 2014 Also see "CBER To Pause Receipt Of Lot Release Samples During Move To White Oak" - Pink Sheet, 14 April, 2014..

Master Plan Update ‘Essential’

The moves pushed White Oak’s population to about 9,000 employees. FDA said its FY 2016 budget for the campus will help expand support services, transportation, labor and loading dock services, as well as a centralized safety program.

In addition, the agency asked for another $5 million to update the White Oak master plan because “FDA requires additional staff not anticipated in the 2009 master plan due to new and expanded authorities and public health responsibilities,” according to the budget document.

It was called an “essential” part of the budget request. Staffing needs must increase 70% by FY 2016, compared to FY 2008, FDA said in the email.

“The feasibility study is needed to address its expanded workforce and the facilities needed to accommodate them,” the agency said.

White Oak now is considered full in terms of the personnel it can house in existing buildings, but “not full in terms of the maximum number of employees the campus will be able to accommodate upon completion of the approved 2009 master plan,” FDA said in the email.

The existing master plan for the White Oak campus still has four additional buildings and associated infrastructure that are still to be built that would allow another 500 employees to be relocated there, FDA said in the email. GSA has not secured the funds for the remaining construction.

FDA eventually wants to “consolidate the majority of personnel that are not in the field onto the White Oak campus,” although the Center for Veterinary Medicine laboratories and Center for Food Safety and Applied Nutrition are not slated to move there, the agency said.

The White Oak budget would increase more than $5 million in FY 2016, compared to the FY 2015 enacted level.

FDA also asked for $136.5 million, including $47.4 million in user fees, for “other rent and rent-related activities.” The $20 million increase would fund items such as commercial rent payments, security, service contracts and utilities.

The agency said operational rent costs for its 16,000 staff members “continually increase beyond” its control.

“Without new funding to cover rent costs, FDA will have to reduce program activities to pay rent, significantly hampering food safety and medical product safety priorities,” the agency said in its budget documents.

FDA has hired more than 1,000 new employees in recent years to handle new responsibilities associated with the generic drug user fee program, but still has a number of other openings left to fill ([A#14150120003]).

Locations Continue Changing Outside HQ

Consolidation also will continue outside of White Oak.

In FY 2015, FDA intends to relocate personnel from two “headquarters office buildings” into one leased location in Rockville, Md. One Office of Criminal Investigations field office and five Office of Regulatory Affairs resident posts also are scheduled to be relocated, according to the budget document.

In addition, FDA expects to open one new resident post as well as decommission and release a CBER lab.

In FY 2014, the agency relocated staff from eight leased headquarters office buildings, vacated a Center for Drug Evaluation and Research lab in St. Louis and opened a new Sample Processing Center. FDA also relocated five resident posts and vacated two others, according to the budget document.

FDA has been working to locate more personnel overseas, including in China, to improve its facility inspection capabilities. But it has run into trouble securing the necessary visas ([A#00140908003]).

FDA Infrastructure Budgets
Program	FY 2014 Actual	FY 2015 Enacted	FY 2016 Request	FY 2014-FY 2016 Change
GSA Rental Payments	$209.37 million	$228.43 million	$242.09 million	$32.71 million (16%)
Other Rent and Related Activities	$109.42 million	$116.41 million	$136.53 million	$27.12 million (25%)
White Oak	$61.60 million	$47.12 million	$52.22 million	-$9.39 million (-15%)
Total	$380.39 million	$391.95 million	$430.83 million	$50.44 million (13%)
Source: FDA congressional justification of FY 2016 Presidential Budget Request

FDA’s Rent Is Too Damn High: Consolidated Labs Cost More Than Off-Campus Space

More from United States

More from North America