New BEP plant greenlighted
- Published: Mar 25, 2019, 4 AM
A new paper money factory is in America’s future. The news was hidden in a 1,165-page congressional spending law and was uncovered by reporter Doug Sword in the March 6 issue of the political journal, Roll Call.
The decision to build a new printing facility is the result of a Government Accounting Office report to Congress earlier this year, which said that after 105 years, the current Bureau of Engraving and Printing facility on 14th St. in Washington, D.C., was woefully inadequate for the BEP’s future needs.
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The BEP operates two facilities: the D.C. plant, the main building of which opened in 1914, and a facility in Fort Worth, Texas, which began printing notes in December 1990.
The GAO report provided three options: (1) A major renovation of the current facility that could be done without congressional approval; (2) a new building in another location for both production and administrative functions; or (3) a hybrid plan, with a new building in a new location for currency production, while administrative activities would remain in one of the current buildings in Washington.
BEP preferred the third option.
The GAO study indicated that providing a new production facility in the Washington area and renovated administrative space in the current building would save federal costs, allow for a secure perimeter that meets federal standards, and improve efficiency by allowing production with modern processes and equipment on a single floor.
The bureau got its wish and now has the authority and $1.4 billion to go ahead with its plan to buy land somewhere in the Washington area and begin construction.
The authorization was the conclusion of a long process. Roll Call reported that Marty Grenier, the bureau’s deputy director and chief administrative officer, said in an email that the BEP “worked for more than 20 years to establish a smaller, more efficient manufacturing facility in the National Capitol Region.”
The spending bill passed by Congress says, “Beginning in fiscal year 2019 and for each fiscal year thereafter, amounts in the Bureau of Engraving and Printing Fund may be used for the acquisition of necessary land for, and construction of, a replacement currency production facility.”
Beyond that, not much more is known. On March 14, BEP spokesperson Lydia Washington told Coin World, “With just having received congressional approval, this is still an evolving process and no hard decisions have been made on the location and timing for the build.”
No appropriations needed
Despite the congressional authorization, the new building will not actually use any new appropriations. This is because the BEP’s expenses are paid for by the Federal Reserve Board, which indicated that it supports the plan. In fact, in December it approved $956 million in payments to the bureau for 2019, mainly to print money.
Of that total, $60 million is designated to start the new project, and of that $60 million, $58 million will go to the General Services Administration to cover surveys, transportation and environmental studies, hire construction and management contractors and develop bid documents, and for overhead. The remaining $2 million will be for hiring five contract employees at the BEP for oversight.
Overall, the move is supposed save $579 million through fiscal year 2028, and another $22 million in the following three years. Yet, Republicans in the House did not include the authorization in the spending bill they passed last year. It was only acceded to by the House this year after the Senate passed a version of the bill that included it by a bipartisan 92–6 vote.
The GAO report on the need for a new building in the Washington area provided a contrast between the BEP’s Washington and Fort Worth locations that demonstrated how the former is inefficient and excessively costly.
When the Fort Worth plant opened it was meant to handle about 25 percent of total production. Yet, in the 2016 fiscal year the Fort Worth facility’s portion of production had risen to 58 percent, with the balance coming 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 the differences in efficiency and cost by describing a production process in Washington involving multiple floors and multiple building wings.
It said, “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 new plant in the Washington area will put the two locations on a more equal footing and should save money. Beside lower production costs, when the main building is renovated, it will have 530,000 square feet of office space, allowing Treasury to move operations from space it now leases for $91.7 million a year.
Origins date to 1862
The Bureau of Engraving and Printing had its origins in 1862, but was not officially recognized as an entity by Congress until 1874, and did not become the sole producer of United States paper currency until 1877.
The BEP Historical Research Center provides its full story. It was first located in the Department of the Treasury building at 1500 Pennsylvania Ave., NW. Its first standalone building, at 14th and B Street, was completed in 1880 at a cost of $300,000.
A new building was needed by 1906, and what is now the main building was completed a block away, on C St. between 14th and 15th, at a cost of $2,882,000 in February 1914. It was 296 feet deep and 105 feet high, with four wings. There are four floors, a basement, and a fifth-floor attic. It occupies five acres of land and has nearly 10 acres of floor space.
Within 20 years, that was already not enough, and in August 1935, Congress provided an appropriation for land and construction of another facility on 14th Street between C and D Streets, opposite the main building. That was built for $6,325,000 and opened on May 17, 1938. This is known as the Annex.
The Annex has a central “backbone” running from 14th Street to 13th Street from which there are five wings extending north and south. The sub-basement, basement, first floor, and second floor cover the entire footprint while the third through seventh floors, an attic, and penthouse extend over the wings.
Underground are two tunnels, one that connects with the main building and one with a freight-receiving building and spur line of railroad tracks to the south that is longer used. Both the main building and annex are designated as historic, so any revisions to them are subject to requirements of the National Historic Preservation Act.
By the 1970s more space was again needed, and the country’s economic growth westward and southward resulted in the December 1990 opening of production at the Western Facility in Fort Worth. The single-story plant is on 100 acres of land and has more than 12 acres of floor space.
When it opened formally in 1991, the Fort Worth plant had 288,000 square feet. A 140,000-square-foot addition at the Fort Worth facility opened in 2004 and includes a public tour.
Unlike the United States Mint, prior to the opening of the Fort Worth plant, the BEP’s entire production was limited to a single facility.
The Fort Worth facility, although built to supply the western portion of the nation with Federal Reserve notes, also ensures that the country has the capacity to continue printing paper money even should something catastrophic happen to the facility in the nation’s capital. (The Jan. 13, 1982, crash of an Air Florida airliner into the Potomac River in Washington was very close to the BEP facility.)
Notes produced at the Fort Worth plant are distinguishable by a small “FW” facility mark near the face check number.
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