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Sen. Daniel Patrick Moynihan promised "GLORY" for New York when he pushed in 1988 for the construction of a federal office tower and the nation's largest and costliest courthouse in lower Manhattan.
But mounting costs and design problems have plagued the $1 billion federal project in downtown Foley Square to the point that some industry insiders have dubbed it "Folly Square."
A New York Newsday investigation has found that federal officials circumvented bidding laws designed to hold down prices and avoid favoritism. Officials discouraged competition for contracts and then approved design changes that added tens of millions of dollars to the project's price tag, the investigation has found.
As a result, contractors and 2,500 union workers have reaped a bonanza from the project.
"This is the pot of gold for contractors and developers," said William Coleman, a former commissioner with the U.S. General Services Administration. GSA records show the courthouse is the most expensive one of its kind to date.
The 27-story courthouse and 34-story tower, which will house a number of federal agencies, including the Internal Revenue Service and the Environmental Protection Agency, are nearing completion and are expected to open early next year.
The huge public investment in the project came at a time when vacant office space downtown was going begging. The courthouse itself will be more than twice the original 250,000 square feet requested by the courts.
`Emergency' Cited
GSA first required developers to bankroll the construction with private loans. After accepting bids for Foley Square, however, GSA reversed itself and arranged low-cost federal financing instead. But GSA did not seek new bids - required by laws designed to prevent favoritism - when the financing terms changed.
Instead, then-GSA head Richard Austin told Congress that cramped federal quarters in Manhattan had created an emergency need for the skyscrapers. Austin said seeking new bids would take too long and cost too much.
When told of the newspaper's findings, Sen. Howard Metzenbaum (D-Ohio), a critic of federal construction, said he would ask GSA and the Justice Department to probe federal bidding procedures for Foley Square.
"How do you say that building a 27-story courthouse and a 34-story office building is an emergency?" Metzenbaum asked.
The cost of land acquisition, interest on construction...