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September 10, 1998
#98-15

CONTACT:
Richard Maulsby
(703/305-8445)
Brigid Quinn
(703/308-7427)

Press Release, 98-15

National Taxpayers Union Campaign Against PTO Could Cost Americans $72 Million

The National Taxpayers Union's eye-catching but misleading dispatch alleging government waste in the General Services Administration's (GSA) competitive space procurement for the U.S. Patent and Trademark Office (PTO) is an ill-advised effort to stop the project and could cost taxpayers $72 million.

It is always easy to paint Washington bureaucrats as profligate with taxpayer's money, but in this case, while it may make good copy, it is complete fiction and NTU knows it. In fact, NTU has been informed repeatedly by PTO that its attacks are based on misinformation, but NTU has refused to change its story or even sit down with representatives from PTO to discuss this project.

In 1995 Congress mandated GSA to competitively procure a 20-year lease within specific boundaries in Northern Virginia to replace expiring leases for cramped and outdated space PTO has occupied in Crystal City since the mid-1960s. There is good reason that Congress chose to continue to house the PTO in leased space. The last large federal office construction was the Ronald Reagan building which was authorized by Congress in 1987. This was well before a balanced budget and looming shortfalls in programs such as Social Security and Medicare became front-burner issues on the national agenda. Given the way federal construction/purchase is calculated, Congress is unlikely to authorize spending hundreds of millions of dollars in any one year to build or buy the 2 million square feet of space needed for the PTO, as opponents claim should be done.

In mandating a long-term lease for the PTO, Congress certainly did not ignore cost, or give GSA or PTO a blank check. In addition to the obvious advantages of competition, Congress also capped what could be spent on rent and moving expenses. All costs associated with the project, including environmental clean up, if necessary, and all build-out, are included under the rent and moving expense caps. There will be no surprises or extravagant spending!

There is no requirement in the building prospectus for the lavish plazas, fountains and furnishings that detractors deride. The PTO is presently in 18 buildings scattered over a distance of more than one-mile end to end. Throughout this site are open spaces with fountains, jogging paths, and other park-like settings. If any of the three organizations currently vying to lease PTO new space can offer these amenities under the mandated rent ceiling, GSA would certainly consider it in the final decision.

The PTO will not spend $250 for a shower curtain or $1,000 for a coat rack as NTU claims. These figures came from a consultant's study and were hypothetical "worst case" estimates used to calculate the minimum savings that could be achieved from the competitive procurement. No decision on furniture has been made. When furniture is purchased it will be mainly by competitive bid or from the GSA schedule.

PTO will spend about $1.3 billion in rent whether it remains in its current inefficient and outdated space in Crystal City or moves to consolidated space chosen by the competitive procurement. However, when all costs are taken into account, independent studies—including one done by former high-ranking federal procurement policy experts from the Carter and Reagan administrations—conclude that PTO's competitive procurement is sound and will save at least $72 million over the alternative-sole source leases with PTO's existing landlords. A report by the inspector general of the Commerce Department noted that the competitive procurement "will ultimately result in facilities that are more efficient and less expensive than its current facilities."

In spite of all the evidence supporting the savings and benefits of this project, the National Taxpayers Union and its allies continue to undermine the competitive procurement.

PTO's competitive space procurement is good public policy and it has wide-spread support. The project has bi-partisan support in Congress, which includes the chairs and ranking members of PTO's House and Senate appropriations and authorizing committees. In a recent floor statement in support of the project, Senator Orrin Hatch (R-Utah) noted that "...the PTO procurement process followed all the rules and complied with all the safeguards..." and "studies agreed that the competitive lease procurement should proceed so that PTO can obtain the benefits of competition." Senators Chuck Robb (D-Va) and John Warner (R-Va) were among those echoing the Hatch endorsement in floor statements.

The project has the support of the Intellectual Property Association, the American Intellectual Property Lawyers Association, and the American Bar Association's Intellectual Property Law Section—PTO's major constituencies representing thousands of corporations and individuals whose fees fully fund all operations of the PTO. It has the support of the Clinton administration, and PTO's only national union, the National Treasury Employees Union, which represents the membership of two of the agency's three bargaining units, has endorsed it.

Distortion and deceit could end up killing this good government project, forcing the PTO to squander millions of dollars on sole source leases for its current space.

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