Fed Headquarters Renovation Costs Soar Past $2 Billion

The Federal Reserve awarded over $2 billion in construction work for its headquarters renovation without establishing a guaranteed maximum price, according to an inspector general's report. The 120-page evaluation found no evidence of criminal wrongdoing but highlighted significant cost increases.

Construction costs have more than doubled from $921 million budgeted in February 2020 to $2.018 billion in the Board's revised construction budget. The total project budget has risen to $2.381 billion.

The report notes that inflation was a major driver of the increase, but it did not account for the scale of the increases, particularly in mechanical, electrical and plumbing work. Two such packages rose 203%, from a $178 million estimate to $539 million awarded.