After 104 years in the same building, if Congress grants its
approval, the Bureau of Engraving and Printing will get a new, modern
money factory in the Washington, D.C., area.
The details are presented in a 32-page report to Congress from the
U.S. Government Accountability Office. The GAO report was necessary
because, while the BEP can renovate an existing facility with its own
funds, it needs congressional authorization to purchase land and build
a new facility.
A new production plant is needed, according to the report, which
recounts numerous problems if the status quo remains in place. Most
important is the realization that the demand for paper currency is not
going to decline significantly in the next decade.
The number of bank notes in circulation increased by 43 percent from
2008 to 2016. The number of ATMs is growing, and cash still accounts
for 32 percent of all transactions, and half of those under $25. The
report says that the Federal Reserve System and Treasury Department
predict a continued rise in the demand for cash over the next 10 years.
A contrast with current operations at the one-floor production
facility in Fort Worth, Texas, demonstrates that the current
Washington operation is inefficient and excessively costly. When the
Fort Worth plant opened in December 1990 it was meant to handle about
25 percent of total production. In the 2016 fiscal year the Fort Worth
facility’s portion of production had risen to 58 percent, with the
balance from Washington, even though the latter has more employees.
Costs of production are also considerably higher in Washington. In
2016, $1 and $20 notes cost 23 percent and 7 percent more,
respectively, to produce in Washington than in Fort Worth. The report
accounted for this as it describes a production process in Washington
involving multiple floors and multiple building wings.
“Specifically, in D.C., after notes are printed on one side, they
are moved to another floor to dry for at least 72 hours, brought back
to the original floor to be printed on the opposite side, and again
moved to the other floor to dry.
“In Fort Worth, because the production occurs in one large room on
one floor, these processes occur in adjacent spaces on the same floor.
As a result, according to BEP, notes travel more than twice as far
during production in the D.C. facility,” the report recounts.
The GAO detailed several options in its report:
➤ A major renovation of the current facility. This could be done by
the BEP without congressional approval.
➤ A new building in another location for both production and
➤ A hybrid plan, meaning a new building in a new location for
currency production, while administrative activities would remain in
one of the current buildings in Washington.
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Studies and research show the least expensive option to be a new
building, similar to the one in Fort Worth, with a single floor and a
secure perimeter compliant with current standards. Despite the cost
difference, BEP prefers the hybrid option. The report indicates the
BEP’s preference is to remain in the Washington area, but it would
agree to the construction of a new facility in a different location if necessary.
The hybrid option would cost about $1.4 billion. BEP Director
Leonard R. Olijar explained in a letter attached to the report why the
bureau favors the hybrid approach. He said building a new production
facility in the Washington area while renovating administrative space
in the current building would save federal costs, allow for a secure
perimeter that met federal standards, and improve efficiency by
allowing production with modern processes and equipment on a single floor.
He stressed, however, that “the current production environment in
the facility is inadequate to meet the challenges of counterfeit
deterrence and complete the robust annual currency order … while
maintaining or surpassing world-class quality currency note
standards.” He added that a near-term decision is needed, and if none
is forthcoming, the BEP would have to begin a costly and inefficient
large-scale renovation of its existing building in southwest Washington.
The BEP indicated it needs a decision by the end of 2018. If a new
printing facility is not authorized, GAO says that renovation of the
current D.C. facility is estimated to cost $2 billion. This is the
most expensive and lengthy of the three alternatives.
Complicating any renovation plans, both the Washington facility’s
104-year-old main building and an 80-year-old annex are designated as
historic, so revisions to them would be subject to requirements of the
National Historic Preservation Act.