Fed's $2B Renovation Costs Skyrocket Without Guaranteed Maximum Price

The Federal Reserve awarded over $2 billion in construction work for its headquarters renovation without setting a guaranteed maximum price, according to an inspector general's report.

The report found that inflation was a factor in the cost increases, but it did not account for the scale of the increases, particularly in mechanical, electrical, and plumbing work.

Construction costs have more than doubled, from $921 million budgeted in February 2020 to $2.018 billion in the Board's most recently revised construction budget.

The total project budget has risen to $2.381 billion, with the Fed covering its expenses out of its own earnings and sending any surplus to the Treasury.