oversight

High-Risk Series: Federal Real Property

Published by the Government Accountability Office on 2003-01-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

               United States General Accounting Office

GAO

January 2003
               High-Risk Series
               Federal Real Property




GAO-03-122
               a
This Series
This report on federal real property is part of GAO’s high-risk series, first issued in
1993 and updated periodically. This series identifies areas at high risk due to either
their greater vulnerabilities to waste, fraud, abuse, and mismanagement or major
challenges associated with their economy, efficiency, or effectiveness. A
companion series entitled the Performance and Accountability Series: Major
Management Challenges and Program Risks contains separate reports covering each
cabinet department, most major independent agencies, and the U.S. Postal
Service. The series also includes a governmentwide perspective on transforming
the way the government does business in order to meet 21st century challenges
and address long-term fiscal needs. A list of all of the reports in this series is
included at the end of this report.
                                                  January 2003


                                                  HIGH-RISK SERIES
                                                  Federal Real Property
Highlights of a high-risk area discussed in
the GAO report entitled High-Risk Series:
Federal Real Property (GAO-03-122)




•    Long-standing problems with                  Over 30 agencies control hundreds of thousands of real property assets
     excess and underutilized real                worldwide, including facilities and land, which are worth hundreds of
     property, deteriorating                      billions of dollars. Unfortunately, much of this vast, valuable portfolio
     facilities, unreliable real                  reflects an infrastructure based on the business model and technological
     property data, and costly space              environment of the 1950s. Many of the assets are no longer effectively
     challenges are shared by
     several agencies. These
                                                  aligned with, or responsive to, agencies’ changing missions and are therefore
     factors have multibillion-dollar             no longer needed. Further, many assets are in an alarming state of
     cost implications and can                    deterioration; agencies have estimated restoration and repair needs to be in
     seriously jeopardize mission                 the tens of billions of dollars. Compounding these problems are the lack of
     accomplishment.                              reliable governmentwide data for strategic asset management, a heavy
•    Federal agencies face many                   reliance on costly leasing instead of ownership to meet new needs, and the
     challenges securing real                     cost and challenge of protecting these assets against potential terrorism.
     property due to the threat of
     terrorism.                                   To address these challenges, Congress and the administration have
                                                  undertaken several efforts, including Defense Base Realignment and
                                                  Closures Commissions, the President’s Commission to Study Capital
                                                  Budgeting, and various legislative initiatives. While some of these efforts and
There is a need for a
                                                  other work by individual real property-holding agencies have had some
comprehensive and integrated real
property transformation strategy                  success, much remains to be done governmentwide. Furthermore, despite
that could identify how best to                   these efforts, the problems have persisted and have been exacerbated by
realign and rationalize federal real              competing stakeholder interests in real property decisions; various legal and
property and dispose of unneeded                  budget-related disincentives to businesslike outcomes; the need for better
assets; address significant real                  capital planning among agencies; and the lack of a strategic,
property repair and restoration                   governmentwide focus on real property issues.
needs; develop reliable, useful real
property data; resolve the problem                Given the persistence of the problems and related obstacles, we have added
of heavy reliance on costly leasing;              federal real property as a new high-risk area. Resolving these problems will
and minimize the impact of                        require high-level attention and effective leadership by both Congress and
terrorism on real property.                       the administration. Also, because of the breadth and complexity of the
                                                  issues, the long-standing nature of the problems, and the intense debate that
An independent commission or                      will likely ensue, current structures and processes may not be adequate to
governmentwide task force may be                  address the problems. Thus, there is a need for a comprehensive, integrated
needed to develop this strategy. If               transformation strategy for real property. Realigning the government’s real
resulting actions address the                     property, taking into account future workplace needs, will be critical to
problems and are effectively
                                                  improving the government’s performance and ensuring accountability within
implemented, agencies will be
                                                  expected resource limits.
better able to recover asset values,
reduce operating costs, improve
facility conditions, enhance safety
and security, and achieve mission
effectiveness.

www.gao.gov/cgi-bin/getrpt?GAO-03-122.

For additional information about this high-risk
area, click on the link above or contact John
H. Anderson, Jr. at (202) 512-2834 or
AndersonJ@gao.gov.
Contents



Transmittal Letter                                                                                                     1


Federal Real Property:                                                                                                  2

A High-Risk Area

Appendix
                Appendix:   Lessons Learned and Leading Practices in Real Property                                     48


GAO Contacts                                                                                                           53


Related GAO Products                                                                                                   54


Performance and                                                                                                        58

Accountability and
High-Risk Series




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                            Page i                                                  GAO-03-122 Federal Real Property
A
United States General Accounting Office
Washington, D.C. 20548
                                                                                            Comptroller General
                                                                                            of the United States




           January 2003                                                                                             T
                                                                                                                    ransmL
                                                                                                                         ta
                                                                                                                          ileter




           The President of the Senate
           The Speaker of the House of Representatives

           GAO’s high-risk update is provided at the start of each new Congress in conjunction with a special
           series GAO has issued biennially since January 1999, entitled the Performance and Accountability
           Series: Major Management Challenges and Program Risks. This report, which discusses federal real
           property, is a companion to GAO’s 2003 high-risk update, High-Risk Series: An Update (GAO-03-119).
           These reports are intended to help the new Congress focus its attention on the most important issues
           and challenges facing the federal government.

           Long-standing problems in the federal real property area include excess and underutilized property,
           deteriorating facilities, unreliable real property data, and costly space. These factors have
           multibillion-dollar cost implications and can seriously jeopardize the ability of federal agencies to
           accomplish their missions. Federal agencies also face many challenges securing real property due to
           the threat of terrorism. Given the persistence of these problems and various obstacles that have
           impeded progress in resolving them, GAO is designating federal real property as a new high-risk area.

           This report should help the new Congress and the administration attend to these problems and
           improve agency practices in the real property area for the benefit of the American people. For
           additional information about this report, please contact John H. Anderson, Jr., Managing Director,
           Physical Infrastructure Issues, at (202) 512-2834. GAO contacts for real property issues at specific
           agencies are listed at the end of this report.




           David M. Walker
           Comptroller General
           of the United States




                                     Page 1                                          GAO-03-122 Federal Real Property
Federal Real Property: A High-Risk Area


               Over 30 federal agencies control hundreds of thousands of real property
               assets—including both facilities and land—in the United States and abroad.
               These assets are worth hundreds of billions of dollars. Unfortunately, much
               of this vast and valuable asset portfolio presents significant management
               challenges and reflects an infrastructure based on the business model and
               technological environment of the 1950s. Many assets are no longer
               effectively aligned with, or responsive to, agencies’ changing missions and
               are therefore no longer needed. Furthermore, many assets are in an
               alarming state of deterioration; agencies have estimated restoration and
               repair needs to be in the tens of billions of dollars. Compounding these
               problems are the lack of reliable governmentwide data for strategic asset
               management, a heavy reliance on costly leasing instead of ownership to
               meet new space needs, and the cost and challenge of protecting these
               assets against potential terrorism.

               To address these challenges, Congress and the administration have
               undertaken several efforts, including Defense Base Realignment and
               Closures Commissions and the President’s Commission to Study Capital
               Budgeting. In addition, Congress, the Office of Management and Budget
               (OMB), and the General Services Administration (GSA) have also
               recognized the need for and developed legislative proposals in recent years
               that were designed to address some of the problems. While some of these
               efforts and other work by individual real property-holding agencies have
               had some success, much remains to be done governmentwide. In most
               cases, the effectiveness of current and planned initiatives has yet to be
               determined. Despite these efforts and the sincerity with which the federal
               real property community has embraced the need for reform, the problems
               have persisted and have been exacerbated by competing stakeholder
               interests in real property decisions, various legal and budget-related
               disincentives to businesslike outcomes, the need for better capital planning
               among real property-holding agencies, and the lack of a strategic,
               governmentwide focus on federal real property issues.

               Given the persistence of these problems and various obstacles that have
               impeded progress in resolving them, we are designating federal real
               property as a new high-risk area. Resolving these long-standing problems
               will require high-level attention and effective leadership by Congress and
               the administration. Also, because of the breadth and complexity of the
               issues involved, the long-standing nature of the problems, and the intense
               debate about potential solutions that will likely ensue, current structures
               and processes may not be adequate to address these problems. Given this
               situtation, there is a need for a comprehensive and integrated



               Page 2                                         GAO-03-122 Federal Real Property
Federal Real Property: A High-Risk Area




transformation strategy for federal real property, and an independent
commission or governmentwide task force may be needed to develop this
strategy. Such a strategy could be based on input from agencies, the private
sector, and other interested groups. The strategy should also reflect the
lessons learned and leading practices of public and private organizations
that have attempted to reform their real property practices. These
organizations have recognized that real property, like capital, people,
technology, and information, is a valuable resource that, if managed well,
can support the accomplishment of their missions and the achievement of
their business objectives. In addition, as these organizations are
recognizing, the workplace of the future will differ from today’s work
environment.

For the federal government, technological advancements, electronic
government, flexible workplace arrangements, changing public needs,
opportunities for resource sharing, and security concerns will call for a
new way of thinking about the federal workplace and the government’s real
property needs. Realigning the government’s real property assets with
agency missions, taking into account the requirements of the future federal
role and workplace, will be critical to improving the government’s
performance and ensuring accountability within expected resource limits.
If actions resulting from the transformation strategy comprehensively
address the problems and are effectively implemented, agencies will be
better positioned to recover asset values, reduce operating costs, improve
facility conditions, enhance safety and security, and achieve mission
effectiveness.




Page 3                                         GAO-03-122 Federal Real Property
                       Federal Real Property: A High-Risk Area




The Federal Real       The federal real property environment has many stakeholders and involves
                       a vast and diverse portfolio of assets that are used for a wide variety of
Property Environment   missions. Real property is generally defined as facilities; land; and anything
                       constructed on, growing on, or attached to land. According to the fiscal
                       year 2001 financial statements of the U.S. government, the federal
                       government’s real property assets are worth about $328 billion.1 In terms
                       of facilities, the latest available governmentwide data from GSA indicated
                       that as of September 30, 2000, the federal government owned and leased
                       approximately 3.3 billion square feet of building floor area worldwide.2 As
                       shown in figure 1, the Department of Defense (DOD), U.S. Postal Service
                       (USPS), GSA, and Department of Veterans Affairs (VA) hold the majority of
                       the owned facility space. Figure 1 also shows that DOD, the Department of
                       State (State), GSA, and USPS lease the most space.




                       1
                        This value does not include stewardship assets, which are not reported on the government’s
                       balance sheet. These assets include wilderness areas, scenic river systems, monuments,
                       defense facilities (including military bases), and national defense assets. Also, real property
                       data contained in the financial statements of the U.S. government have been problematic. As
                       discussed in more detail later, we were unable to express an opinion on the U.S.
                       government’s consolidated financial statements for fiscal year 2001.
                       2
                        U.S. General Services Administration, Summary Report of Real Property Owned by the
                       United States Throughout the World, (Washington, D.C.: June 2001); U.S. General Services
                       Administration, Summary Report of Real Property Leased by the United States Throughout
                       the World, (Washington, D.C.: June 2001). As discussed in more detail later, we have
                       reported that the governmentwide real property data that GSA compiles—often referred to
                       as the worldwide inventory—have been unreliable and of limited usefulness. However,
                       these data provide the only available indication of the size and characteristics of the federal
                       real property inventory.




                       Page 4                                                     GAO-03-122 Federal Real Property
                                        Federal Real Property: A High-Risk Area




Figure 1: Percentages of Federal Facility Space Owned and Leased Worldwide, by Agency




                                        The makeup of the federal government’s facilities reflects the diversity of
                                        agencies’ missions and includes military bases, office buildings, embassies,
                                        prisons, courthouses, border stations, laboratories, and park facilities. In
                                        terms of land, available governmentwide data suggest that the federal
                                        government owns roughly 636 million acres. The Departments of the
                                        Interior (DOI) and Agriculture (USDA) hold most of this land, which is
                                        about one-fourth of the total acreage of the United States. Figure 2 shows
                                        that the vast majority of federal land holdings are in the western United
                                        States.




                                        Page 5                                          GAO-03-122 Federal Real Property
                                          Federal Real Property: A High-Risk Area




Figure 2: Percentage of Federal Land Holdings in Major Regions of the United States




                                          Page 6                                      GAO-03-122 Federal Real Property
Federal Real Property: A High-Risk Area




Federal real property managers operate in a complex and dynamic
environment. Numerous laws and regulations govern the acquisition,
management, and disposal of federal real property. The Federal Property
and Administrative Services Act of 1949, as amended (Property Act), is the
law that generally applies to real property held by federal agencies; and
GSA is responsible for the act’s implementation.3 Agencies are subject to
the Property Act, unless they are specifically exempted from it. Agencies
may also have their own statutory authority related to real property. For
example, VA has separate authority to enter into public-private
partnerships to lease its property to nongovernmental entities; in turn,
these entities develop, rehabilitate, or renovate the property.4 DOD has its
own authority to outlease real property under its control for 5 years or
longer, if a determination is made that doing so will promote national
defense or be in the public interest.5 USPS, which is an independent
establishment in the executive branch, is authorized to sell, lease, or
dispose of property under its general powers.6 USPS is exempt from most
federal laws dealing with real property and contracting.7 Agencies must
also comply with numerous other laws related to real property. For
example, the Stewart B. McKinney Homeless Assistance Act, as amended,
provides that property that agencies have identified as unnecessary for
mission requirements must first be made available to assist the homeless.8
The National Historic Preservation Act, as amended, requires agencies to
manage historic properties under their control and jurisdiction and to
consider the effects of their actions on historic preservation.9




3
 40 U.S.C. § 101 et. seq; the Property Act excludes certain types of property, such as public
domain assets and land reserved or dedicated for national forest or national park purposes.
4
38 U.S.C. §§ 8161-8169.
5
10 U.S.C. § 2667.
6
 39 U.S.C. §§ 201 and 401; for the purposes of this discussion of real property issues, we are
defining agencies to include other government entities such as USPS, an independent
establishment in the executive branch.
7
39 U.S.C. § 410.
8
42 U.S.C.§ 11411.
9
16 U.S.C. § 470 et. seq.




Page 7                                                    GAO-03-122 Federal Real Property
                      Federal Real Property: A High-Risk Area




                      Real property decisions draw considerable attention during congressional
                      deliberations over federal appropriations. Members of Congress take a
                      keen interest in federal facilities in their districts and in the economic
                      impact of any decisions. In addition to Congress, OMB, and the real
                      property-holding agencies, several other stakeholders also have an interest
                      in how the federal government carries out its real property acquisition,
                      management, and disposal practices. These stakeholders include state and
                      local governments; business interests in the communities where the assets
                      are located; private sector construction and leasing firms; historic
                      preservation organizations; various advocacy groups; and the public in
                      general, which often views the facilities as the physical face of the federal
                      government in their communities. At both the national and local levels,
                      federal real property practices also tend to attract significant media
                      attention, particularly when these practices are under scrutiny for waste
                      and mismanagement.



The Federal           Despite significant changes in the size and mission needs of the federal
                      government in recent years, the federal portfolio of real property assets in
Government Has Many   many ways still largely reflects the business model and technological
Assets It Does Not    environment of the 1950s. In the last decade alone, the federal government
                      has reduced its workforce by several hundred thousand personnel, and
Need                  several federal agencies have had major mission changes. With these
                      personnel reductions and mission changes, the need for existing space,
                      including general-purpose office space, has declined overall and
                      necessitated the need for different kinds of space. At the same time,
                      technological advances have changed workplace needs, and many of the
                      older buildings are not configured to accommodate new technologies.
                      Furthermore, the advent of electronic government is starting to change
                      how the public interacts with the federal government. These changes will
                      have significant implications for the type and location of property needed
                      in the 21st century. For example, as we reported in July 2001, greater
                      consideration could be given to locating government facilities in rural areas
                      if there is an economic advantage to the government of doing so.10




                      10
                        U.S. General Accounting Office, Facilities Location: Agencies Should Pay More Attention
                      to Costs and Rural Development Act, GAO-01-805 (Washington, D.C.: July 31, 2001).




                      Page 8                                                 GAO-03-122 Federal Real Property
                                              Federal Real Property: A High-Risk Area




                                              Some of the major real property-holding agencies have undergone
                                              significant mission shifts that have affected their real property needs. For
                                              example, after the Cold War, DOD’s force structure was reduced by 36
                                              percent. Despite four rounds of base closures, DOD projects that it still has
                                              considerably more property than it needs. The National Defense
                                              Authorization Act for Fiscal Year 2002,11 which became law in December
                                              2001, gave DOD the authority for another round of base realignments and
                                              military installation closures in 2005. In the mid-1990s, VA began shifting its
                                              role from being a traditional hospital-based provider of medical services to
                                              an integrated delivery system that emphasizes a full continuum of care with
                                              a significant shift from inpatient to outpatient services. Subsequently, VA
                                              has struggled to reduce its large inventory of buildings, many of which are
                                              underutilized or vacant. Although the Department of Energy (DOE) is no
                                              longer producing new nuclear weapons, it still maintains a facilities
                                              infrastructure largely designed for this purpose. Table 1 provides a
                                              summary of excess and underutilized property challenges at some of the
                                              major real property-holding agencies—DOD, VA, GSA, DOE, USPS, and
                                              State. Available data from GSA suggest that these agencies hold over 85
                                              percent of the facilities—in terms of building floor area—in the federal
                                              portfolio.



Table 1: Excess Property Challenges at Some of the Major Real Property-Holding Agencies

Agency     Excess and underutilized property challenge
DOD        DOD still faces major infrastructure realignment challenges. After the Cold War, military force structure was reduced by 36
           percent. Consequently, DOD was left with infrastructure it no longer needed for its military operations. Even with four rounds
           of base realignment and closures that reduced its holdings by 21 percent, DOD recognized that it still had some excess and
           obsolete facilities.a As a result, it implemented a centrally funded demolition program that succeeded in removing 62 million
           square feet of facilities during fiscal years 1998 to 2001, and that is slated to reach 80 million square feet by the end of fiscal
           year 2003. However, DOD believes that there is still more to be done, leading Congress to give the department the authority
           for another round of base realignment and closure in the fiscal year 2002 defense authorization act, scheduled for fiscal
           year 2005. GAO designated DOD infrastructure as a high-risk area in 1997, a designation that remains today.b
VA         VA has struggled to respond to asset realignment challenges due to its mission shift to outpatient, community-based
           services.c We reported in 1999 that VA had 5 million square feet of vacant space and that utilization will continue to
           decline.d VA has recognized that it has excess capacity and has an effort under way known as the Capital Asset
           Realignment for Enhanced Services (CARES) that is intended to address this issue. VA recently completed its initial
           CARES study involving consolidation of services among medical facilities in its Great Lakes Network (including Chicago) as
           well as expansion of services in other locations. VA identified 31 buildings that are no longer needed to meet veterans'
           health care needs in this network, including 30 that are currently vacant.




                                              11
                                                   P.L. 107-107, 115 Stat. 1012, 1342 (2001).




                                              Page 9                                                       GAO-03-122 Federal Real Property
                                              Federal Real Property: A High-Risk Area




(Continued From Previous Page)
Agency      Excess and underutilized property challenge
GSA         GSA recognizes that it has many buildings that are not financially self-sustaining and/or for which there is not a substantial,
            long-term federal purpose. GSA is developing a strategy to address this problem. The L. Mendel Rivers Federal Building in
            Charleston, S.C., (see fig. 1) is a prime example of a highly visible, vacant federal building held by GSA.e
DOE         After shifting away from weapons production, DOE had 1,200 excess facilities totaling 16 million square feet, and the
            performance of its disposal program had not been fully satisfactory, according to DOE’s Inspector General.f Facility
            disposal activities have not been prioritized to balance mission requirements, reduce risks, and minimize life-cycle costs. In
            some cases, disposal plans were in conflict with new facility requirements.
USPS        The issue of excess and underutilized property will need to be part of USPS’s efforts to operate more efficiently. Facility
            consolidations and closures are likely to be needed to align USPS’s portfolio more closely with its changing business
            model.g
State       State has taken steps to improve its disposal efforts; however, it still has a large number of unneeded properties that have
            not yet been sold.h Although State has taken steps to improve its disposal efforts and substantially reduce its inventory of
            unneeded properties, it reported that 92 properties were potentially available for sale as of September 30, 2001, with an
            estimated value of more than $180 million. State has begun the disposal process for some of these properties. State will
            also need to dispose of additional facilities over the next several years as it replaces more than 180 vulnerable embassies
            and consulates for security reasons. Security also has become a primary factor in considering the retention and sale of
            excess property.
                                              a
                                               U.S. General Accounting Office, Defense Infrastructure: Greater Management Emphasis Needed to
                                              Increase the Services’ Use of Expanded Leasing Authority, GAO-02-475 (Washington, D.C.: June 6,
                                              2002).
                                              b
                                               U.S. General Accounting Office, High-Risk Series: An Update, GAO-01-263 (Washington, D.C.: Jan.
                                              2001).
                                              c
                                              U.S. General Accounting Office, VA Health Care: VA Is Struggling to Respond to Asset Realignment
                                              Challenges, GAO/T-HEHS-00-91 (Washington, D.C.: Apr. 6, 2000).
                                              d
                                              U.S. General Accounting Office, VA Health Care: Challenges Facing VA in Developing an Asset
                                              Realignment Process, GAO/T-HEHS-99-173 (Washington, D.C.: July 22, 1999).
                                              e
                                               U.S. General Accounting Office, Public-Private Partnerships: Pilot Program Needed to Demonstrate
                                              the Actual Benefits of Using Partnerships, GAO-01-906 (Washington, D.C.: July 25, 2001).
                                              f
                                              DOE Office of the Inspector General, Disposition of the Department’s Excess Facilities, DOE/IG-0550
                                              (Washington, D.C.: Apr. 3, 2002).
                                              g
                                               U.S. General Accounting Office, U.S. Postal Service: Deteriorating Financial Outlook Increases Need
                                              for Transformation, GAO-02-355 (Washington, D.C.: Feb. 28, 2002).
                                              h
                                               U.S. General Accounting Office, State Department: Sale of Unneeded Overseas Property Has
                                              Increased, but Further Improvements Are Necessary, GAO-02-590 (Washington, D.C.: June 11, 2002).




                                              Page 10                                                       GAO-03-122 Federal Real Property
Federal Real Property: A High-Risk Area




The magnitude of the problem with underutilized or excess federal
property puts the government at significant risk for lost dollars and missed
opportunities. First, underutilized or excess property is costly to maintain.
DOD estimates that it is spending $3 billion to $4 billion each year
maintaining facilities that are not needed. In July 1999, we reported that
vacant VA space was costing as much as $35 million to maintain each
year.12 Costs associated with excess DOE facilities, primarily for security
and maintenance, exceed $70 million annually.13 It is likely that other
agencies that continue to hold excess or underutilized property are also
incurring significant costs for staff time spent managing the properties and
on maintenance, utilities, security, and other building needs. Second, in
addition to day-to-day operational costs, the government is needlessly
incurring unknown opportunity costs, because these buildings and land
could be put to more cost-beneficial uses, exchanged for other needed
property, or sold to generate revenue for the government. For example, in
1998, we reported that VA could reduce expenditures by an estimated $200
million over the next 10 years by consolidating hospital services into three
locations in Chicago, Ill., rather than continuing to operate four
underutilized locations.14 Finally, continuing to hold property that is
unneeded does not present a positive image of the federal government in
local communities. Instead, it presents an image of waste and inefficiency
that erodes taxpayers’ confidence. It also can have a negative impact on
local economies if the property is occupying a valuable location and is not
used for other purposes, sold, or used in a public-private partnership.




12
     GAO/T-HEHS-99-173.
13
     DOE/IG-0550.
14
 U.S. General Accounting Office, VA Health Care: Closing A Chicago Hospital Would Save
Millions and Enhance Access to Services, GAO/HEHS-98-64 (Washington, D.C.: Apr. 16,
1998).




Page 11                                              GAO-03-122 Federal Real Property
                                Federal Real Property: A High-Risk Area




Case Examples: The L.           Two examples of vacant, highly visible federal properties are the L. Mendel
Mendel Rivers Federal           Rivers Federal Building in Charleston, S.C., and St. Elizabeths Hospital in
                                the District of Columbia. The Charleston building, held by GSA, is a 7-story,
Building in Charleston, S.C.,   100,000-square-foot office building on just over 2 acres (see fig. 3). The
and St. Elizabeths Hospital     building is contaminated with asbestos and has been unoccupied since it
in the District of Columbia     sustained damage in 1999 from Hurricane Floyd. In July 2001, we reported
                                that although there was a weak federal demand for space where the
                                property is located, the property is located in a highly desirable location
                                where land values are high and that there was a strong potential for private
                                sector demand.15 GSA is currently exploring various options for disposing
                                of this building.



                                Figure 3: The Vacant L. Mendel Rivers Federal Building in Charleston, S.C.




                                15
                                     GAO-01-906.




                                Page 12                                            GAO-03-122 Federal Real Property
Federal Real Property: A High-Risk Area




Another example of vacant federal property is the west campus of the St.
Elizabeths Hospital complex in the District of Columbia. The federal
government owns almost all of the west campus of St. Elizabeths, which
has 61 mostly vacant buildings containing about 1.2 million square feet of
space on 182 acres. St. Elizabeths began operations in 1855 as the
“Government Hospital for the Insane.” During the Civil War, the hospital
was used to house soldiers recuperating from amputations, and the
property contains a civil war cemetery. Its name changed to St. Elizabeths
in the early 1900s. In 1990, the property—which contains magnificent vistas
of the rivers and the city—was designated a national historic landmark.
This is the same designation given to the White House, the U.S. Capitol
building, and other buildings that have historic significance. The
Department of Health and Human Services (HHS), which is the holding
agency that is responsible for the west campus, has not needed the
property for many years. It has remained mostly vacant during this time,
and HHS has recently taken steps to dispose of the property. However, in
April 2001, we reported that the property had significantly deteriorated and
had environmental and historic preservation issues that would need to be
addressed in order for the property to be disposed of or transferred to
another federal agency.16 Figure 4 shows the vacant, boarded-up Center
Building, which opened in 1855 and served as the main hospital building.




16
 U.S. General Accounting Office, St. Elizabeths Hospital: Real Property Issues Related to
the West Campus, GAO-01-434 (Washington, D.C.: Apr. 16, 2001).




Page 13                                                GAO-03-122 Federal Real Property
Federal Real Property: A High-Risk Area




Figure 4: The Vacant Center Building, St. Elizabeths Hospital, District of Columbia




Page 14                                             GAO-03-122 Federal Real Property
                          Federal Real Property: A High-Risk Area




The Federal Portfolio     Restoration, repair, and maintenance backlogs in federal facilities are
                          significant and reflect the federal government’s ineffective stewardship
Is in an Alarming State   over its valuable and historic portfolio of real property assets. The backlog
of Deterioration          is alarming because of its magnitude—current estimates show that tens of
                          billions of dollars will be needed to restore these assets and make them
                          fully functional. This problem has accelerated in recent years due to the
                          fact that much of the federal portfolio was constructed over 50 years ago,
                          and these assets are reaching the end of their useful lives. A major
                          commitment is necessary to either modernize these facilities or to dispose
                          of them. As pointed out by the National Research Council in 1998, federal
                          assets must be well maintained to operate adequately and cost effectively;
                          to protect their functionality and quality; and to provide a safe, healthy,
                          productive environment for the American public, elected officials, federal
                          employees, and foreign visitors who use them every day. In recognition of
                          the importance of addressing deferred maintenance,17 federal accounting
                          standards require agencies to report deferred maintenance as
                          supplementary information in their financial statements. As with the
                          problems related to underutilized or excess property, the challenges of
                          addressing facility deterioration are also prevalent at major real property-
                          holding agencies.




                          17
                           Deferred maintenance is maintenance that was not performed when it should have been or
                          was scheduled to be and that, therefore, is put off or delayed for a future period.




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DOD Facilities Are in        Over the last decade, DOD reports that it has been faced with the major
Significant Need of Repair   challenge of adequately maintaining its facilities to meet its mission
                             requirements. DOD is responsible for more than 46,425 square miles in the
and Recapitalization         United States and abroad—nearly 5-1/2 times the size of the state of New
                             Jersey. DOD reports that it has a physical plant of some 621,850 buildings
                             and other structures with a replacement value of approximately $600
                             billion. Over time, these installations and facilities have been aging and
                             deteriorating as funds to sustain and recapitalize the facilities have fallen
                             short of reported requirements.18 At present, DOD reports that many of its
                             installations and facilities are not adequate to meet the war-fighting and
                             operational concepts of the 21st century.19 Commanders currently rate two-
                             thirds of their infrastructure condition to be so poor that it significantly
                             affects mission accomplishment and morale. Although DOD no longer
                             reports data on backlog of repairs and maintenance, it reported in 2001 that
                             the cost of bringing its facilities to a minimally acceptable condition was
                             estimated at $62 billion; the cost of correcting all deficiencies was
                             estimated at $164 billion.20

                             DOD reported that it has not fully funded facility maintenance and
                             recapitalization in recent years because of other budgetary priorities.
                             However, facilities require both adequate maintenance and recapitalization
                             funds to keep them in good condition and help fulfill their mission. For
                             instance, without full sustainment, facilities perform poorly and deteriorate
                             more quickly than would be expected, requiring the premature
                             recapitalization of facilities. Even with full sustainment, the regular
                             recapitalization of facilities is necessary to improve facilities’ conditions
                             and performance and to extend the remaining useful life. Recapitalization
                             is also necessary to modernize facilities that no longer meet new mission
                             standards. DOD recently reported that even if all of the funding in its fiscal
                             year 2003 through 2007 future years defense program were appropriated, it

                             18
                              The term “sustain” refers to efforts required to keep a facility at its current physical
                             condition using operation and maintenance funds. “Recapitalize” refers to efforts to
                             improve condition or replace a facility with new construction, using either operation and
                             maintenance or military construction funds.
                             19
                              Defense Facilities Strategic Plan Working Group, Installations Policy Board, Defense
                             Installations 2001: The Framework for Readiness in the 21st Century (Washington, D.C.:
                             Aug. 2001).
                             20
                              U.S. Department of Defense, Report to Congress: Identification of the Requirements to
                             Reduce the Backlog of Maintenance and Repair of Defense Facilities (Washington, D.C.:
                             Apr. 2001).




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would have a shortfall of some $16.5 billion to sustain and modernize
facilities at a 67-year recapitalization rate, an average shortfall of $3.3
billion per year. The private sector replaces or modernizes facilities at an
average rate of about once every 50 years, but defense facilities have fallen
well short of that rate. For example, in fiscal year 2001, DOD facilities’
recapitalization rate was 192 years. At the same time, DOD officials also
acknowledge having facilities in excess of their needs, which they expect
to address in a new base realignment and closure round planned for 2005.

According to DOD, underfunding of facility maintenance and
recapitalization results in an infrastructure that is less and less capable of
supporting current military needs. In a recent annual Installations’
Readiness Report, DOD and the services described the condition of their
existing facilities to Congress.21 According to the report:

• The majority of the Atlantic Fleet's administrative facility inventory
  comprises inefficient, World War II- and post-era temporary and
  semipermanent structures. The age of these facilities, combined with
  long-term underfunding, has resulted in overall poor facility condition
  and a substantial backlog of repair needs. Typical deficiencies of
  administrative facilities were found in plumbing, air conditioning, fire
  protection, electrical systems, and in the general deterioration of
  finishes, due to age and wear. According to the Navy, administrative
  facilities score poorly in funding because priorities continue to focus on
  operations, training, maintenance, production, and quality of life
  facilities.

• The maintenance facilities operated by the Pearl Harbor Naval Shipyard
  and Intermediate Maintenance Facility in Hawaii are in poor physical
  condition. Significant deficiencies exist at the dry docks, machine shop,
  sawmill, sheet metal shop, and other facilities, significantly affecting the
  capability of the shipyard and the quality of workspaces available for
  assigned civilian workers and sailors. Widespread termite damage,
  decrepit restrooms, leaky roofs, uneven floors, corroded steel windows,
  and deteriorated paint and siding are typical of facility conditions.
  According to the Navy, consistent underfunding of maintenance
  facilities in past years has led to these poor conditions. Discretionary
  funding has scarcely been enough to retain dry dock and crane rail


21
 U.S. Department of Defense, Quarterly Readiness Report to the Congress: Unclassified
Annex, (Washington, D.C.: Oct.-Dec., 2001).




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   certification, and many other facilities receive only emergency-type
   repairs to keep them marginally functional.

• The Army Forces Command continues to work around its storage
  problems by using temporary or inadequate facilities. The “just-in-time”
  delivery concept allows for less storage space in some cases. However,
  some installations are using bunkers for storage, some of which are in
  poor condition. In addition to the effects of working in inadequate
  facilities, Forces Command reported that inadequate living conditions
  cause morale problems for single soldiers in barracks and married
  soldiers and their families assigned to family housing units.

• The Air Force’s Air Combat Command has had a number of its taxiways,
  ramps, and parking aprons shut down due to their poor conditions. For
  example, a taxiway at Dyess Air Force Base, Texas, was closed for a
  long period in 2001, which resulted in increased taxiing time, wasted
  fuel, and loss of flying time. At most installations, personnel who should
  be performing other types of work, such as aircraft maintenance, are
  used to sweep deteriorated runways, taxiways, ramps, and aprons
  several times daily to clean up debris. In addition, the command
  reported inadequate space for aircraft maintenance, inoperable hangar
  doors, leaky roofs, poor lighting, inadequate heating and cooling
  systems, and lack of fire suppression. These deficiencies delay repairs;
  limit flying; and require some work to be done in the open, making it
  subject to weather conditions.

Our recent review of the physical condition of recruit barracks showed that
to varying degrees, most barracks were in need of significant repair,
although some barracks were in better condition than others.22 We found
that the exteriors of each service’s barracks were generally in good
condition, but the barracks’ infrastructure often had repair problems that
had persisted over time, primarily because of inadequate maintenance. The
most prevalent problems across the services included a lack of or
inadequate heating and air conditioning; inadequate ventilation
(particularly in bathing areas); and plumbing-related deficiencies (e.g.,
leaks and clogged drains). Base officials told us that although these
deficiencies had an adverse impact on the quality of life for recruits and
were a burden on trainers, they were able to accomplish their overall


22
   U.S. General Accounting Office, Defense Infrastructure: Most Recruit Training Barracks
Have Significant Deficiencies, GAO-02-786 (Washington, D.C.: June 13, 2002).




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training mission. Inadequate ventilation in recruit barracks, especially in
central bathing areas that were often subject to overcrowding and heavy
use, was another common problem across the services. Many of the central
baths in the barracks either had no exhaust fans or had undersized units
that were inadequate to expel moisture arising from shower use. As a
result, mildew formation and damage to the bath ceilings, as shown in
figure 5, were common.



Figure 5: Shower Ceiling Damage at Fort Jackson, S.C., Recruit Barracks




Plumbing deficiencies were also a common problem in the barracks across
the services. Base officials told us that plumbing problems—including
broken and clogged toilets and urinals, inoperable showers, leaky pipes,
and slow or clogged drainpipes and sinks—were recurring problems that
often awaited repairs due to maintenance-funding shortages. Training
officials told us that because of the inadequate bath facilities for the high
number of recruits, they often had to perform “workarounds”—such as




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establishing time limits for recruits taking showers—in order to minimize,
but not eliminate, adverse effects on training time.

Base officials at most of the locations we visited attributed the deteriorated
condition of the recruit barracks to recurring inadequate maintenance,
which they ascribed to funding shortages that had occurred over the last 10
years. Without adequate maintenance, facilities tend to deteriorate more
rapidly. In many cases that officials cited, they were focusing on emergency
repairs and not performing routine preventative maintenance.

Recognizing the need to halt degradation of DOD’s facilities, in 1998, the
Deputy Secretary of Defense reinvigorated the Installations Policy Board
and commissioned it to complete work on a strategic plan for facilities. The
Defense Facilities Strategic Plan, published in August 2001, was the result
of years of work with the defense agencies and services to standardize and
develop terminology, concepts, and models and to shape the information
into an achievable long-range plan. However, the Plan provided only a
framework for improving facilities and did not address all real property
issues DOD faces. We are continuing to examine facility conditions,
assessments, and recapitalization plans as part of our broader ongoing
work on the physical condition and maintenance of all DOD facilities. For
example, we are reviewing the physical condition and recapitalization
plans for all active force facilities in DOD’s inventory; and we recently
initiated a similar review for the reserve components’ facilities.




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Interior Has A Multibillion-   Interior has a significant deferred maintenance backlog that the Interior
Dollar Backlog, Affecting      Inspector General (IG) estimated in April 2002 to be as much as $8 billion
                               to $11 billon. While the dollar magnitude of the problem is only an estimate,
Numerous National              the scope of the problem has been well documented by GAO, the IG, and
Treasures                      Interior itself. For the past two decades, we have reported on the National
                               Park Service’s (NPS) inability to properly maintain its physical assets.
                               These include many of this country’s national treasures like Ellis Island,
                               Independence Hall, Yellowstone National Park, and Mount Rushmore, just
                               to name a few.23 Although a major part of NPS’s mission is to care for many
                               of our natural, cultural, and historic treasures, it has not been able to
                               properly maintain them. The backlog of NPS maintenance needs is
                               growing, and the condition and utility of many invaluable assets are
                               deteriorating. In 1997, we reported that when compared with other schools
                               nationally, schools operated by the Bureau of Indian Affairs (BIA) were
                               generally in worse condition, had more environmental problems, lacked
                               certain key facilities, and were less able to support advancing
                               technologies.24 BIA has reported a significant backlog of deferred
                               maintenance in BIA facilities and that conditions in the educational
                               facilities negatively affect the ability of children to perform.25

                               In addition to NPS and BIA, Interior and its IG have done work indicating
                               that the kind of problems we found at NPS and BIA reflect a
                               departmentwide condition. In 1998, in recognition of growing concerns,
                               Interior undertook a departmentwide analysis of its facilities maintenance
                               situation. The analysis documented that there were widespread deferred
                               maintenance problems and deterioration of assets throughout the
                               constructed infrastructure managed by Interior’s major bureaus.26 Interior’s
                               bureaus manage hundreds of dams and irrigation systems; over 34,000
                               buildings; 120,000 miles of roads; thousands of bridges; fish hatcheries;
                               electric power and natural gas utility lines; campgrounds; and hundreds of

                               23
                                U.S. General Accounting Office, Park Service: Agency Is Not Meeting Its Structural Fire
                               Safety Responsibilities, GAO/RCED-00-154 (Washington, D.C.: May 22, 2000).
                               24
                                U.S. General Accounting Office, School Facilities: Reported Condition and Costs to
                               Repair Schools Funded by Bureau of Indian Affairs, GAO/HEHS-98-47 (Washington, D.C.:
                               Dec. 31, 1997).
                               25
                                BIA Office of Facilities Management and Construction, Operations and Maintenance Cost
                               Comparison Study (Washington, D.C.: Dec. 2001).
                               26
                                These include the Bureau of Reclamation, Fish and Wildlife Service, NPS, BIA, and Bureau
                               of Land Management.




                               Page 21                                                GAO-03-122 Federal Real Property
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                            parks and many nationally known recreational sites. In reporting the
                            results of its analysis, Interior acknowledged that the physical condition of
                            its facilities and the backlog of deferred maintenance needs have never
                            been adequately documented on an Interior-wide basis. As a result of this
                            report, as well as other considerations, Interior has identified the lack of a
                            departmentwide maintenance capability as a mission-critical material
                            weakness. More recently, in February 2002, the IG identified facility
                            maintenance as one of the most significant management challenges facing
                            Interior.



GSA Repair Backlog          GSA has struggled over the years to meet the repair and alteration
Estimated at $5.7 Billion   requirements identified at its buildings. In March 2000, we reported that
                            GSA data showed that over half of GSA’s approximately 1,700 buildings
                            needed repairs estimated at about $4 billion.27 More recently, in August
                            2002, we reported that this estimated backlog of identified repair and
                            alteration needs was up to $5.7 billion.28 This situation is not new. Over a
                            decade ago, we reported that federal buildings had suffered from years of
                            neglect and that actions were needed to bring some of them up to
                            acceptable quality, health, and safety standards. In April 2001, we reported
                            that delaying or not performing needed repairs and alterations in these
                            buildings could have serious consequences, including health and safety
                            concerns.29 The adverse consequences at several deteriorating federal
                            buildings we visited included poor health and safety conditions due to
                            dysfunctional air ventilation systems, inadequate fire safety systems, and
                            unsafe water supply systems; higher operating costs associated with
                            inefficient building heating and cooling systems; restricted capability to
                            add new information technology because of obsolete electrical systems;
                            and continued structural deterioration resulting from water leaks.

                            Our April 2001 report illustrated some of the adverse consequences of
                            deferring repair and alteration needs. For example, the Eisenhower


                            27
                             U.S. General Accounting Office, Federal Buildings: Billions Are Needed for Repairs and
                            Alterations, GAO/GGD-00-98 (Washington, D.C.: Mar. 30, 2000).
                            28
                             U.S. General Accounting Office, Financial Condition of Federal Buildings Owned by the
                            General Services Administration, GAO-02-854R (Washington, D.C.: Aug. 8, 2002).
                            29
                             U.S. General Accounting Office, Federal Buildings: Funding Repairs and Alterations
                            Has Been a Challenge—Expanded Financing Tools Needed, GAO-01-452 (Washington,
                            D.C.: Apr. 12, 2001).




                            Page 22                                               GAO-03-122 Federal Real Property
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Executive Office Building (EEOB) in Washington, D.C.—which is one of
our nation’s grandest and most historic buildings—had suffered water
damage from its leaking roof. Its plumbing; electrical; heating, ventilation,
and air conditioning; and domestic water supply systems were also
seriously deteriorated and outdated. This situation has led to concern by
GSA officials that the building’s cluttered electrical and water supply
systems were a fire hazard. The electrical system also was not capable of
handling 21st century office technology, which is critical to tenant agencies’
accomplishing their missions. In another example, Federal Office Building
3 (FOB 3) in Suitland, Md., had a heating, ventilation, and air conditioning
system that was incapable of providing proper air circulation or
maintaining desired temperatures. This had resulted in the building
containing levels of carbon dioxide that exceeded industry standards,
thereby exposing tenants to unacceptable conditions. The water in FOB 3
was not drinkable due to the building’s deteriorated infrastructure. Figure 6
shows some of the conditions that we observed in these buildings.




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                               Federal Real Property: A High-Risk Area




                               Figure 6: Water Damage in EEOB in Washington, D.C., and Covered Water Fountain
                               with Posted Warning Against Drinking the Water in FOB 3, Suitland, Md.




Other Agencies Have            In 1998, the National Research Council concluded that agencies across the
Struggled with Deteriorating   federal government have accumulated significant backlogs of maintenance
                               and renovation needs and that many federal buildings require major repairs
Facilities                     to bring them up to acceptable quality, health, and safety standards.30 Other
                               major real property-holding agencies have documented repair backlogs and

                               30
                                National Research Council, Stewardship of Federal Facilities: A Proactive Strategy for
                               Managing the Nation’s Public Assets (Washington, D.C.: National Academy Press, 1998).




                               Page 24                                                GAO-03-122 Federal Real Property
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serious deterioration problems, including State, DOE, the Smithsonian
Institution, and USPS.

More specifically:

• In July 2000, State’s IG reported that the management and maintenance
  of State’s 12,000 properties remained a significant challenge. State’s
  Under Secretary for Management testified in 1999 that costcutting over
  the past several years had resulted in poorly maintained properties and
  that the state of disrepair in many department-owned overseas buildings
  was shocking. In May 2002, State estimated its repair backlog to be $736
  million.

• In September 2000, DOE’s IG reported that the condition of DOE’s
  infrastructure was deteriorating at an alarming pace and may be
  inadequate to meet future mission requirements.31 Specifically, this
  situation had resulted in delays in weapons modification,
  remanufacture, and dismantlement as well as in the process of
  surveillance testing of nuclear weapons components.

• Deterioration of the Smithsonian’s 400 buildings over the past decade
  has created a huge maintenance and restoration backlog.32 The
  President’s budget for fiscal year 2003 cited a recent report by the
  National Academy of Public Administration estimating this backlog at
  $1.5 billion over the next decade and stated that funding increases
  necessary to meet this need will not be possible under current budget
  constraints.

• USPS has a growing backlog of facility projects and has limited ability to
  finance needed improvements in its infrastructure—an unsustainable
  situation, given USPS’s need to maintain its massive and growing
  nationwide infrastructure.33

As discussed earlier, the deterioration problem leads to increased
operational costs, has health and safety implications that are worrisome,


31
   DOE Office of the Inspector General, Management of the Nuclear Weapons Production
Infrastructure, DOE\IG-0484 (Washington, D.C.: Sept. 22, 2000).
32
     President’s Budget for Fiscal Year 2003.
33
     GAO-02-355.




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                      and can compromise agency missions. In addition, we have reported that
                      the ultimate cost of completing delayed repairs and alterations may
                      escalate because of inflation and increases in the severity of the problems
                      caused by the delays.34 The overall cost could also be affected by
                      government realignment. That is, to the extent that unneeded property is
                      also in need of repair, disposing of such property could reduce the repair
                      backlog. Another negative effect, which is not readily apparent but
                      nonetheless significant, is the effect that deteriorating facilities have on
                      employee recruitment, retention, and productivity. This human capital
                      element is troublesome because the government’s ability to compete in the
                      job market is often at a disadvantage in terms of the salaries agencies are
                      able to offer. Poor physical work environments exacerbate this problem
                      and can have a negative impact on potential employees’ decisions to take
                      federal positions. Furthermore, research has shown that quality work
                      environments make employees more productive and improve morale.
                      Finally, as with excess or underutilized property, deteriorated property
                      presents a negative image of the federal government to the public. This is
                      particularly true when many of the assets the public uses and visits the
                      most—such as national parks and museums—are deteriorated and in
                      generally poor condition.



Key Decisionmakers    Compounding the problems with excess and deteriorated property is the
                      lack of reliable and useful real property data that are needed for strategic
Lack Reliable and     decisionmaking. GSA’s worldwide inventory of property is the only central
Useful Data on Real   source of descriptive data on the makeup of the real property inventory,
                      such as property address, square footage, acquisition date, and property
Property Assets       type. However, in April 2002, we reported that the worldwide inventory
                      contained data that were unreliable and of limited usefulness.35 For
                      example, fiscal year 2000 data were not current for 12 of 31 real property-
                      holding agencies. In fact, data for nine of the agencies had not been
                      updated since before fiscal year 1997. Furthermore, we reported that the
                      inventory did not contain certain key data—such as data related to space
                      utilization, facility condition, historical significance, security, and age—that
                      would be useful for budgeting and strategic management purposes.



                      34
                           GAO-01-452.
                      35
                       U.S. General Accounting Office, Federal Real Property: Better Governmentwide Data
                      Needed for Strategic Decisionmaking, GAO-02-342 (Washington, D.C.: Apr. 16, 2002).




                      Page 26                                              GAO-03-122 Federal Real Property
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In addition to problems with the worldwide inventory, real property data
contained in the financial statements of the U.S. government have been
problematic. The Chief Financial Officers Act of 1990 (CFO Act), as
expanded by the Government Management Reform Act, required the
annual preparation and audit of individual financial statements for the
federal government’s 24 major agencies. The Department of the Treasury
was also required to compile consolidated financial statements for the U.S.
government annually, which we audit. In March 2002, we reported that—for
the fifth consecutive year—we were unable to express an opinion on the
U.S. government’s consolidated financial statements for fiscal year 2001.
Various material weaknesses36 related to financial systems, fundamental
recordkeeping and financial reporting, and incomplete documentation
continued to (1) hamper the government’s ability to accurately report a
significant portion of its assets, liabilities, and costs; (2) affect the
government’s ability to accurately measure the full costs and financial
performance of certain programs and effectively manage related
operations; and (3) significantly impair the government’s ability to
adequately safeguard certain significant assets and properly record various
transactions. Because the government lacked complete and reliable
information to support asset holdings—including real property—it could
not satisfactorily determine that all assets were included in the financial
statements, verify that certain reported assets actually existed, or
substantiate the amounts at which they were valued.

Aside from the problematic financial data, some of the major real property-
holding agencies have faced challenges in developing quality management
data on their real property assets. Some of these problems were evident at
DOD, the largest property-holding agency. In August 2001, the Deputy
Under Secretary of Defense for Installations and Environment issued a
report that assessed DOD’s real property information systems from a
management standpoint.37 The report concluded that DOD’s current real
property information systems were not sufficiently timely, standardized, or
easily accessible, thus hindering DOD’s ability to make informed strategic
budget and policy decisions about real property issues. More specifically,


36
 A material weakness is a condition that precludes an entity’s internal controls from
providing reasonable assurance that misstatements, losses, or noncompliance material in
relation to the financial statements or to stewardship information would be prevented or
detected on a timely basis.
37
 U.S. Office of the Deputy Under Secretary of Defense for Installations and Environment,
Assessment of DOD Real Property Information Systems (Washington, D.C.: Aug. 8, 2001).




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the report said that DOD real property data were incompatible across DOD
components; inaccessible to key users; and inaccurate and incomplete,
necessitating application of complex and inefficient business rules in order
to make the data usable.

The report said that these shortcomings result in (1) wasted money as
analysts expend excessive resources to produce and obtain usable
information; (2) inconsistent analyses that undermine credibility inside and
outside DOD; and (3) flawed decisions based on poor information,
producing unintended consequences. The report recommended that the
Office of the Deputy Under Secretary of Defense for Installations and
Environment maintain a Web-accessible, consolidated DOD real property
inventory database for use by all DOD activities and analysts. It also
recommended that the Under Secretary, in conjunction with the services
and other defense agencies, create an incentive program for maintaining
high-quality data and establish, publish, and enforce real property
inventory data standards. DOD is moving to implement these
recommendations and believes that the entire defense community will
benefit from the advantages of an improved data system. Our work has also
shown other problems with DOD real property data. For example, we
reported in 2001 that DOD did not have an accurate inventory of historic
properties.38 DOD also did not have an accurate inventory of formerly used
defense sites, which is needed for environmental cleanup.39




38
 U.S. General Accounting Office, Defense Infrastructure: Military Services Lack Reliable
Data on Historic Properties, GAO-01-437 (Washington, D.C.: Apr. 6, 2001).
39
 U.S. General Accounting Office, Environmental Liabilities: DOD Training Range
Cleanup Cost Estimates Are Likely Understated, GAO-01-479 (Washington, D.C.: Apr. 11,
2001).




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Other agencies have faced challenges in their efforts to develop quality
management data. For example, we reported in June 2002 that State’s
property inventory database contained inaccuracies, which could result in
unneeded property not being identified.40 For example, a parking lot in
Paris, purchased in 1948 and valued at up to $10 million, was not included
in the inventory until after a 1998 IG visit highlighted its omission. The
department stated that it is taking steps to improve the accuracy, and
therefore the reliability, of its inventory, including taking immediate action
when incorrect information is discovered. GSA has experienced significant,
long-standing problems with data reliability and accuracy for the property
it controls. Reports we have issued in recent years on problems with GSA’s
repair and alterations program identified poor data as an underlying
problem.41 VA has recognized that it has problems with its real property
information and has undertaken several efforts to make improvements.42
Finally, Interior has no accurate inventory of the assets that need to be
maintained or accurate data on the condition of the assets. As a result, the
agency is unable to determine the size and scope of its maintenance needs;
how much is needed to address these needs; and how much, if any,
progress is being made toward closing the maintenance gap. Interior
acknowledged this problem and has developed an approach for addressing
it.

Quality governmentwide and agency-specific data will be critical for
addressing the wide range of problems facing the government in the real
property area, including excess and unneeded property, deterioration, and
security concerns. Despite the significance of these problems,
decisionmakers do not have access to quality data on what real property
assets the government owns; their value; whether the assets are being used
efficiently; and what overall costs are involved in preserving, protecting,
and investing in them. Also, real property-holding agencies cannot easily
identify opportunities to use excess or unneeded properties at other
agencies that may suit their needs.




40
 U.S. General Accounting Office, State Department: Sale of Unneeded Overseas Property
Has Increased, but Further Improvements Are Necessary, GAO-02-590 (Washington, D.C.:
June 11, 2002).
41
     GAO/GGD-00-98; GAO-01-452.
42
     GAO-02-342.




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Reliance on Costly   As a general rule, building ownership options through construction or
                     purchase are the least expensive ways to meet agencies’ long-term
Leasing              requirements. Lease-purchases—where payments are spread out over time
                     and ownership of the asset is eventually transferred to the government—
                     are generally more expensive than purchase or construction but are
                     generally less costly than using ordinary operating leases to meet long-term
                     space needs. However, over the last decade we have reported that GSA—as
                     the central leasing agent for most agencies—relies heavily on operating
                     leases to meet new long-term needs because it lacks funds to pursue
                     ownership. In 1995, we reported that GSA had entered into 55 operating
                     leases for long-term needs that were estimated to cost $700 million more
                     than construction.43 In 1999, we reported that for nine major operating
                     lease acquisitions GSA had proposed, construction would have been the
                     least-cost option in eight cases and would have saved an estimated $126
                     million. Lease-purchase would have saved an estimated $107 million,
                     compared with operating leases but would have cost $19 million more than
                     construction.44 A prime example of this problem was the Patent and
                     Trademark Office’s long-term requirements in northern Virginia, where the
                     cost of meeting this need with an operating lease was estimated to be $48
                     million more than construction and $38 million more than lease-purchase.
                     In August 2001, we also reported that GSA reduced the term of a proposed
                     20-year lease for the Department of Transportation headquarters building
                     to 15 years so that it could meet the definition of an operating lease. GSA’s
                     fiscal year 1999 prospectus for constructing a new facility for this need
                     showed the cost of construction was estimated to be $190 million less than
                     an operating lease. The Securities and Exchange Commission used a
                     similar approach by reducing the terms of a proposed 20-year lease for its
                     facility to 14 years.45 Although most of our work in this area has focused on
                     GSA-controlled leases, other real property-holding agencies with leasing
                     authority—such as State and VA—also face the same obstacles to
                     ownership. USPS officials told us that they do not believe that USPS has an
                     over-reliance on operating leases.


                     43
                        U.S. General Accounting Office, General Services Administration: Opportunities for Cost
                     Savings in the Public Buildings Area, GAO/T-GGD-95-149 (Washington, D.C.: July 13, 1995).
                     44
                        U.S. General Accounting Office, General Services Administration: Comparison of Space
                     Acquisition Alternatives—Leasing to Lease-Purchase and Leasing to Construction, GAO/GGD-99-
                     49R (Washington, D.C.: Mar. 12, 1999).
                     45
                      U.S. General Accounting Office, Budget Scoring: Budget Scoring Affects Some Lease
                     Terms but Full Extent Is Uncertain, GAO-01-929 (Washington, D.C.: Aug. 31, 2001).




                     Page 30                                                   GAO-03-122 Federal Real Property
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Operating leases—in which periodic lease payments are made over the
specified length of the lease—have become an attractive option in part
because they generally look cheaper in any given year. Pursuant to the
scoring rules adopted as a result of the Budget Enforcement Act of 1990,
the budget authority to meet the government’s real property needs is to be
scored—meaning recorded in the budget—in an amount equal to the
government’s total legal commitment. For example, for lease-purchase
arrangements, the net present value of the government’s legal obligations
over the life of the contract is to be scored in the budget in the first year.
For construction or purchase, the budget authority for the full construction
costs or purchase price is to be scored in the first year. However, for many
of the government’s operating leases—including GSA leases, which,
according to GSA, account for over 70 percent of the government’s leasing
expenditures and are self-insured in the event of cancellation—only the
budget authority to cover the government’s commitment for an annual
lease payment is required to be scored in the budget.46 Given this, while
operating leases are generally more costly over time, compared with other
options, they add much less to a single year’s appropriation total than these
other arrangements, making this choice a more attractive option from an
annual budget perspective, particularly when funds for ownership are not
available. While the requirement for “up-front funding” permits disclosure
of the full costs to which the government is being committed, the budget
scorekeeping rules allow costly operating leases to “look cheaper” in the
short term and have encouraged an overreliance on them for satisfying
long-term space needs.

Decisionmakers have struggled with this matter since the scoring rules
were established and the tendency for agencies to choose operating leases
instead of ownership became apparent. We have suggested the alternative
of scoring all operating leases up-front on the basis of the underlying time
requirement for the space so that all options are treated equally.47 Although
this could be viable, there would be implementation challenges if this were
pursued, including the need to evaluate the validity of agencies’ stated


46
  According to the scoring rules (OMB Circular A-11, app. B), in cases where the operating
lease does not have a cancellation clause or is not paid for with federal funds that are self-
insuring, budget authority to cover the total costs expected over the life of the lease is to be
scored in the first year of the lease.
47
 U.S. General Accounting Office, Supporting Congressional Oversight: Budgetary
Implications of Selected GAO Work for Fiscal Year 2003, GAO-02-576 (Washington, D.C.:
Apr. 26, 2002).




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                      space requirements. Another option—which was recommended by the
                      President’s Commission to Study Capital Budgeting in 1999 and discussed
                      by GAO48—would be to allow agencies to establish capital acquisition funds
                      to pursue ownership where it is advantageous, from an economic
                      perspective. To date, none of these options have been implemented, and
                      debate continues among decisionmakers about what should be done.
                      Finding a solution for this problem has been difficult; however, change is
                      needed because the current practice of relying on costly leasing to meet
                      long-term space needs results in excessive costs to taxpayers and does not
                      reflect a sensible approach to capital asset management.



Security Is an        Terrorism is a major threat to federally owned and leased real property
                      assets, the civil servants and military personnel who work in them, and the
Overarching Concern   public who visits them. This was evidenced by the 1995 Oklahoma City
                      bombing; the 1998 embassy bombings in Africa; the September 11, 2001,
                      attacks on the World Trade Center and Pentagon; and the anthrax attacks
                      in the fall of 2001. Since the Oklahoma City bombing, the federal
                      government has spent billions of dollars on security upgrades within the
                      country and overseas. A study of federal facilities done by the Justice
                      Department in 1995 resulted in minimum-security standards and an
                      evaluation of security conditions in the government’s facilities. In October
                      1995, the President signed Executive Order 12977, which established an
                      Interagency Security Committee (ISC) to enhance the quality and
                      effectiveness of security in nonmilitary federal facilities. Since the attacks
                      on the World Trade Center and the Pentagon, the focus on security in
                      federal buildings has been heightened considerably. Real property-holding
                      agencies have gone on high alert and are employing such measures as
                      searching vehicles that enter federal facilities, restricting parking, and
                      installing concrete barricades. As the government’s security efforts
                      intensify, the government will be faced with important questions regarding
                      the level of security needed to adequately protect federal facilities and how
                      the security community should proceed. Furthermore, the 1995 Justice
                      study placed an emphasis on increasing security where large numbers of
                      personnel are located. However, a risk-based approach—which GSA is
                      using for the federal buildings it controls—appears to be more desirable in
                      light of this new round of threats. In September 2001, we recommended
                      that DOD identify installations that serve a critical military role and ensure

                      48
                       U.S. General Accounting Office, Accrual Budgeting: Experiences of Other Nations and
                      Implications for the United States, GAO/AIMD-00-57 (Washington, D.C.: Feb. 18, 2000).




                      Page 32                                               GAO-03-122 Federal Real Property
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that they receive a higher vulnerability assessment regardless of the
number of personnel assigned at the installations.49 Since 1996, we have
produced more than 60 reports and testimonies on the federal
government’s efforts to combat terrorism. Several of these reports have
recommended that the federal government use risk management as an
important element in developing a national strategy.50

Recent GAO and IG reports have highlighted the problems and challenges
facing agencies in the facility protection and security area:

• We reported in January 2001 that State’s most critical infrastructure
  need is to enhance protection of U.S. embassies and other overseas
  facilities in response to the increased threat of terrorism.51 State has
  determined that not only does it need to enhance security at all existing
  facilities in the long term, it also must replace over 180 facilities that
  may be vulnerable to attack. In addition, the administration has
  recognized a need to rightsize the number and location of staff at U.S.
  diplomatic posts in response to security and other concerns. The August
  2001 President’s Management Agenda directed all agencies overseas to
  rightsize their presence; OMB, in coordination with State and other U.S.
  agencies operating overseas, is working to develop a process for
  rightsizing staff levels.

• In September 2001, we reported that the effectiveness of DOD’s
  antiterrorism program has been limited because the department has not
  (1) assessed all installations to identify vulnerabilities, (2)
  systematically evaluated installation structure to prioritize resource
  requirements, and (3) developed a complete assessment of potential
  threats to each installation.52 Specifically, since 1997, DOD’s
  antiterrorism program has been focused on avoiding mass casualties;
  therefore, its vulnerability assessment resources have been applied to
  installations with a high concentration of military personnel. Recently,


49
     GAO-01-909.
50
 U.S. General Accounting Office, Homeland Security: A Risk Management Approach Can
Guide Preparedness Effort, GAO-02-208T (Washington, D.C., Oct. 31, 2001).
51
     GAO-01-252.
52
 U.S. General Accounting Office, Combating Terrorism: Actions Needed to Improve DOD
Antiterrorism Program Implementation and Management, GAO-01-909 (Washington, D.C.:
Sept. 19, 2001).




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     in July 2002, DOD issued its minimum antiterrorism standards for new
     construction, major renovation, and leases of DOD buildings.

• Given that Interior is responsible for many high-profile facilities—such
  as Hoover Dam and national symbols like the Washington Monument
  and Statue of Liberty that millions of citizens visit every year—security
  is a concern. In February 2002, the Interior IG identified security as one
  of the top management challenges facing the department.

• In April 2002, we reported that GAO special agents were able to breach
  security at four federal buildings in Atlanta.53 They entered the buildings
  without proper authority, carrying briefcases or packages, and bypassed
  the magnetometers and X-ray machines.

• Incidents of anthrax in the mail after the September 11, 2001, attacks
  have heightened the need to improve mail safety and security, which is
  likely to result in previously unexpected expenses for USPS. These
  expenses will be a particular challenge for USPS given its current
  financial condition. USPS will also be challenged in finding ways to
  protect its facilities against bioterrorism. In August 2002, we reported
  that while USPS planned to implement state-of-the-art air filtration
  systems at its processing facilities, it had not adequately tested the
  systems to confirm that they met their intended purpose of trapping
  anthrax.54

• In September 2002, we reported that ISC has carried out some elements
  of its responsibilities but has made little progress on several other
  assigned responsibilities, such as developing and establishing policies
  for security in and protection of federal facilities, developing a strategy
  for ensuring compliance with security standards, overseeing the
  implementation of appropriate security in federal facilities, and
  developing a centralized security database of all federal facilities.55


53
 U.S. General Accounting Office, Security Breaches at Federal Buildings in Atlanta, GA,
GAO-02-668T (Washington, D.C.: Apr. 30, 2002).
54
 U.S. General Accounting Office, Diffuse Security Threats: USPS Air Filtrations Systems
Need More Testing and Cost Benefit Analysis before Implementation, GAO-02-838
(Washington, D.C.: Aug. 22, 2002).
55
 U.S. General Accounting Office, Building Security: Interagency Security Committee Has
Had Limited Success in Fulfilling Its Responsibilities, GAO-02-1004 (Washington, D.C.:
Sept. 22, 2002).




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                          In addition to the clear challenges agencies will continue to face in securing
                          real property assets, the security issue has an impact on the other problems
                          that have been discussed. To the extent that more funding will be needed to
                          increase security, funding availability for repair and restoration, preparing
                          excess property for disposal, and improving real property data systems
                          may be further constrained. Furthermore, real property managers will have
                          to dedicate significant staff time and other human capital resources to
                          security issues and thus may have less time to manage other problems.
                          Another broader effect is the impact that increased security will have on
                          the public’s access to government offices and other assets. Debate arose in
                          the months after September 11, 2001, and continues to this day on the
                          challenge of providing the proper balance between public access and
                          security. In November 2002, the Department of Homeland Security was
                          established and given responsibility to protect buildings, grounds, and
                          property that are owned, occupied, or secured by the federal government—
                          including any agency, instrumentality, or wholly owned or mixed
                          government corporation—and the persons on the property.56 This newly
                          created department will play a large role in meeting this significant
                          challenge.



Various Efforts           Although the federal government faces significant, long-standing problems
                          in the real property area, it is important to give Congress, OMB, GSA, and
Initiated, but Real       the major real property-holding agencies credit for proposing several
Property Problems         reform efforts and other initiatives in recent years. Legislative proposals in
                          the 107th Congress (S. 161257 and H.R. 394758) were aimed at improving real
Persist Due to Factors    property data, establishing senior real property managers at agencies,
that Require High-Level   developing asset management principles, and identifying specific
Attention                 conditions under which GSA and other agencies can enter into real
                          property partnerships with the private sector. Although these proposed
                          bills did not address some of the other major issues needing attention, such
                          as the over-reliance on costly leasing, they would have laid the foundation
                          for beginning to address many of the long-standing problems in the real
                          property area. To address the changing mission of DOD in the post-Cold


                          56
                               P.L. 107-296; Nov. 25, 2002.
                          57
                           Title III of the Managerial Flexibility Act of 2001 (2001) is entitled Federal Property Asset
                          Management Reforms.
                          58
                               The Federal Property Asset Management Reform Act of 2002 (2002).




                          Page 35                                                    GAO-03-122 Federal Real Property
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War era, four rounds of restructuring by Base Realignment and Closures
Commissions have reduced DOD’s infrastructure by about 21 percent. As
mentioned earlier, the National Defense Authorization Act for fiscal year
2002 gave DOD the authority for another round of base realignment and
military installation closures in 2005. DOD officials testified that these
actions could result in recurring annual net savings of about $3 billion.
Although DOD views the base realignment and closure process as having
the greatest impact in terms of savings, this process is only one initiative in
a multipart strategy to reshape military installations and make them more
efficient. Other important initiatives include, but are not limited to,
privatization of housing and utilities, competitive sourcing of noninherently
governmental functions, demolition, and leasing of its real property and
facilities to the private sector. However, we reported in June 2002 that DOD
has made limited use of the authority it has to lease underused property to
reduce infrastructure and base operating costs.59

In the area of budgeting and capital planning, OMB issued its Capital
Programming Guide as a supplement to OMB Circular A-11, part III, in
1997.60 The purpose of the guide was to provide real property managers
with a basic reference on principles and techniques for capital asset
planning, budgeting, procurement, and management. In subsequent
revisions to Circular A-11, part III, OMB increased emphasis on capital
planning and decisionmaking. In June 2002, OMB issued a new section of A-
11—section 800, Managing Physical and Financial Assets—which
requires agencies to include with their budget submissions to OMB self-
assessments of their ability to manage their physical and financial assets. In
discussing issues associated with real property management, OMB
emphasized that effective property management is supported by the timely
and accurate reporting requirement of the Improved Financial
Performance Initiative of the President’s Management Agenda. OMB added
that associated process and system enhancements are laying the
groundwork for informed asset management capabilities and that early
signs of progress have been seen in the area of agency vehicle fleets. OMB
said that in 2003, specific monitoring of agency asset management
practices would be part of the Improved Financial Performance Initiative.



59
     GAO-02-475.
60
 In the most recent version, the guide is now a supplement to part 7 of A-11. Also,
part 8, Managing Federal Assets, has been added.




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Additionally, OMB said that it is preparing to launch a related review of
asset management practices and performance across the executive branch.

As a result of congressional debate in the mid-1990s about whether the
Constitution should be amended to require the government to have a
balanced budget every year, the President’s Commission to Study Capital
Budgeting was established. The Commission’s February 1999 report made a
number of recommendations, including improved strategic planning;
greater use of benefit-cost assessments; establishment and subsequent
assessment of capital acquisition funds as an experiment in a few agencies;
full funding of capital projects before work begins; and incentives for
better asset management.

In addition to DOD, other real property-holding agencies have important
initiatives under way that are designed to address real property challenges.
For example:

• VA has recognized that it can significantly reduce the funds used to
  operate and maintain its capital infrastructure and provide higher
  quality service by developing and implementing market-based plans for
  restructuring assets. As previously discussed, VA’s CARES effort is
  intended to accomplish this. CARES is a data-driven assessment of
  veterans’ health care needs within each of VA’s 21 service networks and
  the strategic realignment of capital assets and related resources to
  better serve the needs of veterans. CARES program officials are
  planning to provide realignment recommendations to the Secretary of
  Veterans Affairs by October 2003. In recent years, VA has also developed
  legislative proposals to establish a capital asset fund, which would,
  among other things, be aimed at improving its capability to dispose of
  unneeded real property by helping to fund related costs such as
  demolition, environmental cleanup, and repairs.

• State has taken steps to implement a more systematic process for
  identifying unneeded properties by (1) requesting posts to annually
  identify excess, underutilized, and obsolete property and (2) requesting
  its own staff and IG officials to place greater emphasis on identifying
  such property when they visit the posts. Although it still has a large
  number of properties that have not yet been sold, State has significantly
  increased its sales of unneeded properties in the last 5 years. From 1997
  through 2001, it sold 104 overseas properties for over $404 million,
  almost triple the proceeds generated in the previous 5-year period.




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                        • GSA began a major effort in 2001—known as the Portfolio Restructuring
                          Initiative—to restructure its inventory to retain primarily strong,
                          income-producing properties. As part of this effort, GSA has begun
                          conducting periodic reviews of the financial and physical condition of
                          the assets; focusing reinvestment funds on performing assets; and
                          disposing of, or dealing with, properties that are not financially self-
                          sustaining and/or for which there is not a substantial, long-term federal
                          purpose. According to GSA, over 40 percent of its buildings have
                          expenses that exceed tenant rent revenue and have a minimal reserve
                          for future building needs.

                        • USPS recognizes that continuing to address the issue of excess and
                          underperforming real property assets will have to be a part of its needed
                          transformation in light of its current financial crisis. USPS officials said
                          they were currently expanding their current disposal efforts.

                        • As mentioned before, Interior has recognized the need for
                          improvements in its real property data and has developed an approach
                          for addressing the problems.

                        While some of the initiatives agencies have undertaken have had success,
                        many are in the early stages of implementation; and in most cases, their
                        effectiveness has yet to be determined. Furthermore, many of the needed
                        reforms have not been initiated or successfully implemented. Despite these
                        efforts and the sincerity with which the federal real property community
                        has embraced the need for reform, the problems have persisted and have
                        been exacerbated by several factors that will require high-level attention
                        from Congress and the administration. These factors include competing
                        stakeholder interests in real property decisions; various legal and budget-
                        related disincentives to businesslike outcomes; the need for improved
                        capital planning; and the lack of a strategic, governmentwide focus on
                        federal real property issues.



Competing Stakeholder   Competing interests in real property decisions have been a part of the
Interests               American political landscape since the country was founded. Members of
                        Congress often pursue funding for federal projects in their districts, and the
                        administration’s budget reflects the President’s spending priorities. While
                        critics may see some of the projects as “pork barrel,” others see them as
                        needed and worthwhile federal investments that reflect various policy
                        priorities. In addition to Congress, OMB, and the real property-holding
                        agencies themselves, several other stakeholders also have an interest in



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how the federal government carries out its real property acquisition,
management, and disposal practices. These include foreign governments;
state and local governments; business interests in the communities where
the assets are located; private sector construction and leasing firms;
historic preservation organizations; various advocacy groups; and the
public in general, which often views the facilities as the physical face of the
federal government in local communities. As a result of competing
stakeholder interests, decisions about real property often do not reflect the
most cost-effective or efficient alternative that is in the interest of the
agency or the government as a whole but instead reflect other priorities. In
particular, this situation often arises when the federal government attempts
to consolidate facilities or otherwise dispose of unneeded assets. For
example:

• DOD has found that infrastructure reductions are difficult and painful
  because achieving significant cost savings requires closing installations
  and eliminating military and civilian jobs in the affected communities.
  DOD’s ability to realign its infrastructure has been affected by
  parochialism among the military services, a cultural resistance to
  change, and congressional and public concern about the effects and
  impartiality of decisions.

• VA’s environment contains a diverse group of competing stakeholders
  who could oppose realignment plans that they feel are not in their best
  interests, even when such changes would benefit veterans.61 For
  example, medical schools that use VA hospitals to train students have
  been reluctant to change long-standing business relationships. Also,
  organized labor has appeared reluctant to support planning decisions
  that result in service restructuring, even when such decisions are in
  veterans’ best interests.

• Historically, proposed post office closures in urban, suburban, or rural
  areas, and changes to postal infrastructure by USPS, have provoked
  intense opposition because post offices are part of American culture
  and business and are viewed as critical to the economic viability of
  small towns and central business districts. Members of Congress and
  other stakeholders have often intervened in the past when USPS has
  attempted to close post offices or consolidate facilities.


61
 U.S. General Accounting Office, VA Health Care: Capital Asset Planning and Budgeting
Need Improvement, GAO/T-HEHS-99-83 (Washington, D.C.: Mar. 10, 1999).




Page 39                                              GAO-03-122 Federal Real Property
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                      • State’s disposal of unneeded overseas property has, in some cases, been
                        delayed pending resolution of disputes with host governments that were
                        restricting property sales.

                      It is important to note that the political process is the most legitimate way
                      to balance competing stakeholder interests in the real property area.
                      Because elected officials are tasked with balancing these interests, it is
                      imperative that these decisionmakers be presented with information on the
                      trade-offs associated with different options and that the costs are
                      transparent and fairly stated.



Legal and Budgetary   The complex legal and budgetary environment in which real property
Disincentives         managers operate has a significant impact on real property decisionmaking
                      and often does not lead to businesslike outcomes. Although the Property
                      Act is the law of general application governing federal real property, many
                      other laws govern real property acquisition, management, and disposal. In
                      addition, annual agency appropriation acts often specify additional new
                      requirements, many of which are project-specific. In the acquisition area—
                      as discussed earlier—budget scoring rules intended to promote budget
                      discipline actually make costly operating leases an attractive option
                      because their costs are spread out over time. We have also reported that
                      public-private partnerships can be a viable option for redeveloping
                      obsolete federal property when they provide the best economic value for
                      the government, compared with other options, such as federal financing
                      through appropriations or sale of the property. However, most agencies are
                      precluded from entering into such arrangements. DOD, VA, and USPS,
                      however, have this authority. S. 1612 and H.R. 3947 would have allowed
                      most agencies to enter into such partnerships. In May 2002, the
                      Congressional Budget Office concluded that the partnerships, like lease-
                      purchase arrangements, should be recorded up front in the budget.

                      Resource limitations, in general, often prevent agencies from addressing
                      real property needs from a strategic portfolio perspective. When available
                      funds for capital investment are limited, Congress must weigh the need for
                      new, modern facilities with the need for renovation, maintenance, and
                      disposal of existing facilities, the latter of which often gets deferred. As the
                      National Research Council has reported, facilities maintenance and repair
                      are often deemed a low priority because facility program managers do not
                      present a good case for funding. Also, the need to balance adequate
                      congressional oversight with the desire to give agencies flexibility to
                      pursue properties on the open market is an ongoing challenge. Lack of



                      Page 40                                          GAO-03-122 Federal Real Property
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funds for building purchases often precludes federal real property
managers from considering the purchase option when an opportunity
arises that may be economically advantageous for the government.

In the disposal area, a range of laws intended to address other objectives
challenges agencies’ efforts to dispose of unneeded property. For example,
USPS is specifically precluded from closing small post offices solely for
economic reasons.62 Furthermore, agencies are required under the National
Environmental Policy Act to consider the environmental impact of their
decisions to dispose of property. Generally speaking, agencies are
responsible for environmental cleanup prior to disposal. Despite the
importance of this, these costs can be considerable and can involve years
of study. For example, we reported that St. Elizabeths Hospital in the
District of Columbia had medical wastes, possible soil contamination,
asbestos, lead paint, and other hazardous substance conditions that would
have to be assessed through two phases of study and ultimately
addressed.63 For property with historic designations—which is common in
the federal portfolio—agencies are required by the National Historic
Preservation Act to ensure that historic preservation is factored into how
the property is eventually used. This is the case with St. Elizabeths, which
is a National Historic Landmark.

The Property Act further specifies that unneeded property first be offered
to other federal agencies; and the Stewart B. McKinney Homeless
Assistance Act, as amended, sets forth a requirement that consideration be
given to making unneeded property available to assist the homeless.
Another factor in the disposal area is that most agencies cannot retain the
proceeds from the sale of unneeded property. Given that agencies are
required to fund the costs of preparing property for disposal, the inability
to retain any of the proceeds acts as an additional disincentive. It seems
reasonable to allow agencies to retain enough of the proceeds to recoup
the costs of disposal, and it may make sense to permit agencies to retain
additional proceeds for reinvestment in real property where a need exists.
However, in considering whether to allow federal agencies to retain
proceeds from real property transactions, it is important for Congress to
ensure that it maintains appropriate control and oversight over these funds,



62
     39 U.S.C. 101(b).
63
     GAO-01-434.




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                            including the ability to redistribute the funds to accommodate changing
                            needs.



Need for Improved Capital   Over the years, we have reported that prudent capital planning can help
Planning                    agencies to make the most of limited resources, and failure to make timely
                            and effective capital acquisitions can result in increased long-term costs.
                            GAO, Congress, and OMB have identified the need to improve federal
                            decisionmaking regarding capital investment. GAO work during the 1990s
                            identified a variety of federal capital projects in which acquisitions yielded
                            poor results—costing more than anticipated, falling behind schedule, and
                            failing to meet mission needs and goals.64 A number of laws enacted in the
                            1990s, including the Federal Acquisition Streamlining Act, the Clinger-
                            Cohen Act, and the Government Performance and Results Act (GPRA) of
                            1993, placed increased emphasis on improving capital decisionmaking
                            practices. OMB also has noted a lack of clear sense of mission for many
                            programs, insufficient consideration of life-cycle costs, and failure to
                            analyze and manage the risk inherent in capital asset acquisitions. OMB’s
                            Capital Programming Guide and its revisions to Circular A-11 have
                            attempted to fill these gaps. However, guidance on project analysis,
                            selection, tracking, and evaluation historically has not been provided on a
                            governmentwide basis. Furthermore, agencies have not always developed
                            overall goals and strategies for implementing capital investment decisions,
                            nor has the federal government generally planned or budgeted for capital
                            assets over the long term.




                            64
                             U.S. General Accounting Office, Executive Guide: Leading Practices in Capital
                            Decisionmaking, GAO/AIMD-99-32 (Washington, D.C.: Dec. 1998).




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Our work in recent years at the individual real property-holding agencies
illustrated some of the challenges agencies have faced and showed that
improvements in capital planning were needed. For example, we reported
in 1999 that VA’s capital asset decisionmaking process appeared to be
driven more by the availability of resources within VA’s different
appropriations than by the overall soundness of investments.65 This
resulted in VA spending millions more on leasing property instead of
ownership because funds were more readily available in the appropriation
that funds leases than in the construction appropriation. We recommended
in January 2001 that DOD should develop a comprehensive long-range plan
for its facilities infrastructure that addresses requirements, reinvestment,
and maintenance and repair needs.66 Our work at USPS showed that a
major site acquisition in California was completed before other options had
been analyzed and while analysis of space requirements and costs was still
under way.67

Another concern we have identified in the capital decisionmaking area is
that capital project funding requests in agencies’ budget justifications often
lacked total project cost information; it was not always clear if the funding
would provide a useful, stand-alone asset.68 For example, the U.S. Coast
Guard’s fiscal year 2001 budget justifications had “To Be Determined”
under the estimated future cost requirement for several ongoing projects.
Without this information, Congress cannot consider the full costs of
proposed commitments. Finally, preliminary results of work we have under
way assessing agencies’ implementation of the planning phase principles in
OMB’s Capital Programming Guide show that some agencies’ principles
do not conform to the OMB principles. For example, some agencies have
had limited success with establishing asset inventories and maintaining
good data on asset condition. The details of this review will be
forthcoming. Improving agencies’ capital planning practices would be the
foundation of any effort to improve the government’s performance in the
real property area. Without a concerted effort in this area, it will be difficult


65
     GAO/T-HEHS-99-83.
66
     GAO-01-263.
67
 U.S. General Accounting Office, U.S. Postal Service: Deficiencies Continue While
Antelope Valley Project Status Remains Uncertain, GAO/GGD-99-147 (Washington, D.C.:
Aug. 31, 1999).
68
 U.S. General Accounting Office, Budget Issues: Agency Data Supporting Capital Project
Funding Requests Could Be Improved, GAO-01-770 (Washington, D.C.: June 8, 2001).




Page 43                                              GAO-03-122 Federal Real Property
                          Federal Real Property: A High-Risk Area




                          for the government to ensure that the purchase of new assets will generate
                          the highest and most efficient returns to taxpayers and that existing assets
                          will be adequately repaired, maintained, and protected.



Lack of a Strategic,      The magnitude of real property-related problems and the complexity of the
Governmentwide Focus on   underlying factors that cause them to persist put the federal government at
                          significant risk in this area. Real property problems related to unneeded
Real Property Issues
                          property and the need for realignment; deteriorating conditions; unreliable
                          data; costly space; and security concerns are shared by several agencies,
                          have multibillion-dollar cost implications, and can seriously jeopardize
                          mission accomplishment. Although some efforts in recent years have
                          attempted to address real property issues with some limited success, these
                          problems have persisted and will continue to grow in magnitude unless
                          they are adequately addressed. To date, there has been no governmentwide,
                          strategic focus on real property issues. Resolving these long-standing
                          problems will require high-level attention and effective leadership by
                          Congress and the administration. The President’s Council on Integrity and
                          Efficiency (PCIE) has echoed this concern by identifying physical
                          infrastructure as one of eight top agency management challenges
                          warranting high-level attention and applying across government.69 In fact,
                          PCIE’s August 2002 report on these challenges stated that the number of
                          agency IGs that cited physical infrastructure as a management challenge
                          for their agencies has doubled since the March 2001 report.70 PCIE
                          attributed the increased attention on the physical infrastructure challenge
                          to the September 11, 2001, terrorist attacks. In its August 2002 report, the
                          PCIE also stated that the physical infrastructure challenge would, in all
                          likelihood, be facing the federal government for quite some time.

                          In addition, because of the breadth and complexity of the issues involved,
                          the long-standing nature of the problems, and the intense debate about
                          potential solutions that will likely ensue, current structures and processes
                          may not be adequate to address the problems. Given this, there is a need for
                          a comprehensive and integrated transformation strategy for federal real
                          property, and an independent commission or governmentwide task force


                          69
                           The President’s Council on Integrity and Efficiency, Report on Top Management
                          Challenges Identified by Agency Inspectors General, (Washington, D.C.: Mar. 27, 2001).
                          70
                           The President’s Council on Integrity and Efficiency, Report on Top Management
                          Challenges Identified by Agency Inspectors General, (Washington, D.C.: Aug. 23, 2002).




                          Page 44                                                GAO-03-122 Federal Real Property
Federal Real Property: A High-Risk Area




may be needed to develop this strategy. Such a strategy, based on input
from agencies, the private sector, and other interested groups, could
comprehensively address these long-standing problems with specific
proposals on how best to

• realign the federal infrastructure and dispose of unneeded property,
  taking into account mission requirements, changes in technology,
  security needs, costs, and how the government conducts business in the
  21st century;

• address the significant repair and restoration needs of the federal
  portfolio;

• ensure that reliable governmentwide and agency-specific real property
  data—both financial and program related—are available for informed
  decisionmaking;

• resolve the problem of heavy reliance on costly leasing; and

• consider the impact that the threat of terrorism will have on real
  property needs and challenges, including how to balance public access
  with safety.

To be effective in addressing these problems, it would be important for the
strategy to focus on

• minimizing the negative effects associated with competing stakeholder
  interests in real property decisionmaking;

• providing agencies with appropriate tools and incentives that will
  facilitate businesslike decisions—for example, consideration should be
  given to what financing options should be available; how disposal
  proceeds should be handled; what process would permit comparisons
  between rehabilitation/renovation and replacement and among
  construction, purchase, lease-purchase, and operating lease; and how
  public-private partnerships should be evaluated;

• addressing federal human capital issues related to real property by
  recognizing that real property conditions affect the federal government’s
  ability to attract and retain high-performing individuals and the
  productivity and morale of employees;




Page 45                                       GAO-03-122 Federal Real Property
Federal Real Property: A High-Risk Area




• improving real property capital planning in the federal government by
  better integrating agency mission considerations into the capital
  decisionmaking process, making businesslike decisions when
  evaluating and selecting capital assets, evaluating and selecting capital
  assets by using an investment approach, and evaluating results on an
  ongoing basis; and

• ensuring credible, long-term budget planning for facility sustainment,
  modernization, or recapitalization.

The transformation strategy should also reflect the lessons learned and
leading practices of organizations in the public and private sectors that
have attempted to reform their real property practices. Over the past
decade, leading organizations in both the public and private sectors have
been recognizing the impact that real property decisions have on their
overall success. More information on lessons learned and leading practices
in the real property area is contained in the appendix.

If the federal government is to more effectively respond to the challenges
associated with strategically managing its multibillion-dollar real property
portfolio, a major departure from the traditional way of doing business is
needed. Better managing these assets in the current environment calls for a
significant paradigm shift to find solutions. Solutions should not only
correct the long-standing problems we have identified but also be
responsive to and supportive of agencies’ changing missions, security
concerns, and technological needs in the 21st century. If actions resulting
from the transformation strategy comprehensively address the problems
and are effectively implemented, agencies will be better positioned to
recover asset values, reduce operating costs, improve facility conditions,
enhance safety and security, and achieve mission effectiveness.

In addition to developing a transformation strategy, it is critical that all the
key stakeholders in government—Congress, OMB, and real property-
holding agencies—continue to work diligently on the efforts planned and
already under way that are intended to promote better real property capital
decisionmaking, such as enacting reform legislation, assessing
infrastructure and human capital needs, and examining viable funding
options. Congress and the administration could work together to develop
and enact needed reform legislation to give real property-holding agencies
the tools they need to achieve better outcomes, foster a more businesslike
real property environment, and provide for greater accountability for real
property stewardship. Congress and the administration could also elevate



Page 46                                          GAO-03-122 Federal Real Property
Federal Real Property: A High-Risk Area




the importance of real property in policy debates and recognize the impact
that real property decisions have on agencies’ missions. Solving the
problems in this area will undeniably require a reconsideration of funding
priorities at a time when budget constraints will be pervasive. However,
experimenting with creative financing tools and allocating sufficient
funding will likely result in long-term benefits.

Property-holding agencies can also help Congress and OMB by providing
reliable data on their real property inventories and linking their real
property planning efforts to their budgets and strategic plans. Agencies
could also strengthen their efforts to share lessons learned, best practices,
and performance measurement approaches that key decisionmakers can
use to gauge progress and measure results. Without effective tools; top
management accountability, leadership, and commitment; adequate
funding; and an effective system to measure results, long-standing real
property problems will continue and likely worsen. However, the overall
risk to the government and taxpayers could be substantially reduced if an
effective transformation strategy is developed and successfully
implemented, reforms are made, and property-holding agencies effectively
implement current and planned initiatives.




Page 47                                         GAO-03-122 Federal Real Property
Appendix

Lessons Learned and Leading Practices in                                                                       Appendx
                                                                                                                     ies




Real Property                                                                                                   Appendx
                                                                                                                      i




               Over the past decade, leading organizations in both the public and private
               sectors have recognized the impact that real property decisions have had
               on their overall success. A 1993 study for the Industrial Development
               Research Foundation (IDRF) conducted by researchers from the
               Massachusetts Institute of Technology and Cornell University detailed the
               innovative practices of private sector organizations, specifically their
               transformation to recognizing and managing real property as a corporate
               resource equally as important as capital, people, technology, and
               information.1 The report concluded that leading organizations are
               recognizing that real property is another valuable capital asset that, if
               managed well, has an impact on mission accomplishment and achievement
               of business objectives.

               General Motors (GM) is an example of a private sector firm that has
               recognized the impact that real property decisions have on an
               organization’s ability to meet its business objectives. In 1995, GM decided
               to consolidate the management of its extensive portfolio of real property
               into a single division called the Worldwide Facilities Group (WFG). Prior to
               this reorganization, each GM division had its own real property
               organization, staff, and processes. According to a GM executive, the
               creation of the WFG brought significant advantages to GM by reducing
               costs and deploying common practices across the company. This executive
               added that the benefits that GM experienced did not result from
               consolidation alone, but from the strategic management of real property as
               a business enterprise.

               Our past work has also shown that foreign governments have recognized
               the need for transforming their real property management practices. In the
               mid 1990s, we examined and reported on methods that Australia, Canada,
               the United Kingdom, and Sweden used to restructure or reform their real
               property management organizations.2 Like the United States, these
               countries had long-standing structural and management problems that
               limited the ability of their real property organizations to meet customers’
               real property needs. These countries recognized the need to manage real
               property assets as investments and to use them to meet mission needs. The


               1
                Michael Joroff, Marc Louargand, Sandra Lambert, and Franklin Becker, Strategic Management of
               the Fifth Resource: Corporate Real Estate (U.S.A.: The Industrial Development Research
               Foundation, 1993).
               2
                U.S. General Accounting Office, Real Property Management: Reforms in Four Countries
               Promote Competition, GAO/GGD-94-166 (Washington, D.C.: Sept. 1994).




               Page 48                                                   GAO-03-122 Federal Real Property
Appendix
Lessons Learned and Leading Practices in
Real Property




countries also made a fundamental shift in their management philosophy
for handling these assets by shifting from providing basic property needs at
the least cost to managing real property in a more businesslike manner to
better meet their customers’ mission needs and to maximize return on
investment.

In 1998, we reported on leading practices in capital decisionmaking used by
state and local governments and private sector organizations recognized
for their outstanding capital decisionmaking practices, including the State
of Maryland, Dayton, Ohio, and Ford Motor Company.3 We identified the
general principles that leading organizations used to make capital
investment decisions, such as for the acquisition or renovation of real
property. One of these principles was integrating organizational goals into
the capital decisionmaking process. Other principles included evaluating
and selecting capital assets using an investment approach, balancing
budgetary control and managerial flexibility when funding capital projects,
using project management techniques to optimize project success, and
evaluating results and incorporating lessons learned into the
decisionmaking process. In addition, we noted that an important factor in
successful capital decisionmaking is strategic planning. Through this
process, an organization translates a vision and makes fundamental
decisions that shape and guide what the organization is and what it does.
We found that leading organizations use their strategic planning processes
to link the expected outcomes of capital projects to the organizations’
overall strategic goals and objectives. In 1999, we reported on practices at
federal agencies that were attempting to use more businesslike approaches
through public-private partnerships. Among other things, we found that
agencies that had successfully implemented public-private partnership
projects had (1) developed their human capital to obtain needed expertise,
(2) implemented strong planning efforts to protect the government's
interests, and (3) obtained congressionally enacted statutory authority to
enter into the partnership.4




3
GAO/AIMD-99-32.
4
 U.S. General Accounting Office, Public-Private Partnerships: Key Elements of Federal
Building and Facility Partnerships, GAO/GGD-99-23 (Washington, D.C.: Feb. 3, 1999).




Page 49                                               GAO-03-122 Federal Real Property
Appendix
Lessons Learned and Leading Practices in
Real Property




GSA has recently undertaken research on leading practices in linking real
property workplace management to agency mission.5 GSA noted that many
agencies do not adequately focus their planning efforts on the assets they
control. Further, GSA’s research showed that due to changing human
capital needs, the impact of administrative services—including real
property—is likely to become more significant. By thinking strategically
about the workplace and how administrative services affect the delivery of
their missions, agencies can directly improve the productivity of their
human capital. GSA recommended the following practices for integrating
administrative services into the strategic planning process:

• Involve administrative support leaders in establishing strategic program
  priorities;

• Integrate key support functions into the strategic planning process;

• Communicate the message throughout the organization to ensure
  thoroughness of input, clarity of expectations, and authenticity of
  associates’ buy-in to agency strategies;

• Adopt tools for planning, managing, and evaluating support function
  contributions; and

• Use analytical tools to set performance targets, standards, and measures
  for key administrative support objectives.




5
 U.S. General Services Administration, Strategic Planning: Aligning Workplace Services
Creates Value (Washington, D.C.: June 2002).




Page 50                                                GAO-03-122 Federal Real Property
Appendix
Lessons Learned and Leading Practices in
Real Property




The physical workspace is evolving, and public and private organizations
are recognizing that they can attain strategic mission objectives more
efficiently when they pay attention to this area. In the case of the federal
government, technological advancements, electronic government, flexible
workplace arrangements, changing public needs, opportunities for
interagency resource sharing, and security concerns will call for a different
way of thinking about the federal workplace and the government’s overall
real property needs. As previously discussed, major corporations and
government agencies are recognizing their real property workspace can be
a tool used to support their organizations’ missions and strategic plans,
meet the needs and practices of their employees, and inexpensively
accommodate change. Further, GSA has found that the flexibility to
accommodate individual work styles and future organizational change is
one of the most important elements of any workspace.6 However, there is
recognition in the real property community that without high-level support,
customer demand, and better assessment of workplace requirements, the
federal government will be challenged in attaining this flexibility.

In August 2002, we sponsored a symposium with assistance from the
National Research Council on leading real property practices and the major
issues facing the federal government in this area. Panelists included
representatives from federal and other public agencies, private companies,
architectural and consulting firms, and a key congressional committee.
Symposium attendees included officials from 10 of the major real property-
holding agencies. Overall, the participants agreed that federal real property
is a problematic area, and they soundly confirmed the problems and
challenges that we and others have identified. The participants were
particularly concerned about the negative effect real property problems
have on an organization’s ability to accomplish its mission and the impact
that poor quality work environments have on an organization’s ability to
attract and retain a quality workforce. In discussions of ways that the
federal government could overcome the problems it is facing in this area,
several recurring themes emerged. These included the following:

• the need for top-level support and commitment from Congress, OMB,
  and other real property holding-agencies to recognize the significance of
  these problems and seek solutions to resolve them;



6
 U.S. General Services Administration, New Adventures in Office Space: The Integrated
Workplace, A Planning Guide (Washington, D.C.: Feb. 2002).




Page 51                                               GAO-03-122 Federal Real Property
Appendix
Lessons Learned and Leading Practices in
Real Property




• the need to integrate facilities with agency mission in strategic planning
  efforts;

• the need for a broader range of financing and management tools;

• the need for skilled people in the real property management area;

• the need to address the negative effects that budget scoring rules have
  on capital decisionmaking;

• the challenge of balancing security concerns with costs and the need for
  public accessibility; and

• the need for high-quality data on real property assets to provide better
  information for strategic decisionmaking.

The panelists generally agreed that there would be no quick fixes for the
federal real property dilemma. Moreover, they recognized that without
effective reforms and strategies for addressing the challenges facing real
property managers, the current crisis would only worsen and continue to
negatively affect agencies’ missions.




Page 52                                        GAO-03-122 Federal Real Property
GAO Contacts




               Subject(s) covered in this
               report                          Contact person
               DOD real property issues        Barry W. Holman, Director
                                               Defense Capabilities and Management
                                               (202) 512-5581
                                               holmanb@gao.gov
               GSA and USPS real property      Bernard L. Ungar, Director
               issues                          Physical Infrastructure
                                               (202) 512-2834
                                               ungarb@gao.gov
               VA real property issues         Cynthia A. Bascetta, Director
                                               Health Care
                                               (202) 512-7101
                                               bascettac@gao.gov
               State real property issues      Jess T. Ford, Director
                                               International Affairs and Trade
                                               (202) 512-4128
                                               fordj@gao.gov
               Interior real property issues   Barry T. Hill, Director
                                               Natural Resources and Environment
                                               (202) 512-9775
                                               hillbt@gao.gov
               DOE real property issues        Gary L. Jones, Director
                                               Natural Resources and Environment
                                               (202) 512-3464
                                               jonesgl1@gao.gov
               Federal budget and capital      Susan Irving, Director
               decisionmaking issues           Strategic Issues
                                               (202) 512-9142
                                               irvings@gao.gov




               Page 53                                              GAO-03-122 Federal Real Property
Related GAO Products



Excess and Underutilized   U.S. General Accounting Office, State Department: Sale of Unneeded
Property                   Overseas Property Has Increased, but Further Improvements Are
                           Necessary, GAO-02-590 (Washington, D.C.: June 11, 2002).

                           U.S. General Accounting Office, U.S. Postal Service: Deteriorating
                           Financial Outlook Increases Need for Transformation, GAO-02-355
                           (Washington, D.C.: Feb. 28, 2002).

                           U.S. General Accounting Office, Public-Private Partnerships: Pilot
                           Program Needed to Demonstrate the Actual Benefits of Using
                           Partnerships, GAO-01-906 (Washington, D.C.: July 25, 2001).

                           U.S. General Accounting Office, St. Elizabeths Hospital: Real Property
                           Issues Related to the West Campus, GAO-01-434 (Washington, D.C.: Apr. 16,
                           2001).

                           U.S. General Accounting Office, VA Health Care: VA Is Struggling to
                           Respond to Asset Realignment Challenges, GAO/T-HEHS-00-91
                           (Washington, D.C.: Apr. 6, 2000).

                           U.S. General Accounting Office, U.S. Postal Service: Deficiencies
                           Continue While Antelope Valley Project Status Remains Uncertain,
                           GAO/GGD-99-147 (Washington, D.C.: Aug. 31, 1999).

                           U.S. General Accounting Office, VA Health Care: Challenges Facing VA in
                           Developing an Asset Realignment Process, GAO/T-HEHS-99-173
                           (Washington, D.C.: July 22, 1999).

                           U. S. General Accounting Office, VA Health Care: Closing A Chicago
                           Hospital Would Save Millions and Enhance Access to Services,
                           GAO/HEHS-98-64 (Washington, D.C.: Apr. 16, 1998).



Deterioriating Property    U.S. General Accounting Office, Financial Condition of Federal Buildings
                           Owned by the General Services Administration, GAO-02-854R
                           (Washington, D.C.: Aug. 8, 2002).

                           U.S. General Accounting Office, Defense Infrastructure: Most Recruit
                           Training Barracks Have Significant Deficiencies, GAO-02-786
                           (Washington, D.C.: June 13, 2002).




                           Page 54                                      GAO-03-122 Federal Real Property
                             Related GAO Products




                             U.S. General Accounting Office, Federal Buildings: Funding Repairs and
                             Alterations Has Been a Challenge—Expanded Financing Tools Needed,
                             GAO-01-452 (Washington, D.C.: Apr. 12, 2001).

                             U.S. General Accounting Office, Park Service: Agency Is Not Meeting Its
                             Structural Fire Safety Responsibilities, GAO/RCED-00-154 (Washington,
                             D.C.: May 22, 2000).

                             U.S. General Accounting Office, Federal Buildings: Billions Are Needed
                             for Repairs and Alterations, GAO/GGD-00-98 (Washington, D.C.: Mar. 30,
                             2000).

                             U.S. General Accounting Office, School Facilities: Reported Condition
                             and Costs to Repair Schools Funded by Bureau of Indian Affairs,
                             GAO/HEHS-98-47 (Washington, D.C.: Dec. 31, 1997).



Governmentwide Real          U.S. General Accounting Office, Federal Real Property: Better
Property Data                Governmentwide Data Needed for Strategic Decisionmaking, GAO-02-342
                             (Washington, D.C.: Apr. 16, 2002).

                             U.S. General Accounting Office, Government Financial Statements: FY
                             2001 Results Highlight the Continuing Need to Accelerate Federal
                             Financial Management Reform, GAO-02-599T (Washington, D.C.: Apr. 9,
                             2002).

                             U.S. General Accounting Office, Environmental Liabilities: DOD
                             Training Range Cleanup Cost Estimates Are Likely Understated,
                             GAO-01-479 (Washington, D.C.: Apr. 11, 2001).

                             U.S. General Accounting Office, Defense Infrastructure: Military Services
                             Lack Reliable Data on Historic Properties, GAO-01-437 (Washington, D.C.:
                             Apr. 6, 2001).



Reliance on Costly Leasing   U.S. General Accounting Office, Supporting Congressional Oversight:
                             Budgetary Implications of Selected GAO Work for Fiscal Year 2003,
                             GAO-02-576 (Washington, D.C.: Apr. 26, 2002).

                             U.S. General Accounting Office, Budget Scoring: Budget Scoring Affects
                             Some Lease Terms but Full Extent Is Uncertain, GAO-01-929 (Washington,
                             D.C.: Aug. 31, 2001).


                             Page 55                                      GAO-03-122 Federal Real Property
                         Related GAO Products




                         U.S. General Accounting Office, Accrual Budgeting: Experiences of Other
                         Nations and Implications for the United States, GAO/AIMD-00-57
                         (Washington, D.C.: Feb. 18, 2000).

                         U.S. General Accounting Office, General Services Administration:
                         Comparison of Space Acquisition Alternatives—Leasing to Lease-
                         Purchase and Leasing to Construction, GAO/GGD-99-49R (Washington,
                         D.C.: Mar. 12, 1999).



Building Security        U.S. General Accounting Office, Building Security: Interagency Security
                         Committee Has Had Limited Success in Fulfilling Its Responsibilities,
                         GAO-02-1004 (Washington, D.C.: Sept. 22, 2002).

                         U.S. General Accounting Office, Diffuse Security Threats: USPS Air
                         Filtrations Systems Need More Testing and Cost Benefit Analysis Before
                         Implementation, GAO-02-838 (Washington, D.C.: Aug. 22, 2002).

                         U.S. General Accounting Office, Security Breaches at Federal Buildings in
                         Atlanta, GA, GAO-02-668T (Washington, D.C.: Apr. 30, 2002).

                         U.S. General Accounting Office, Nuclear Security: Lessons to Be Learned
                         from Implementing NNSA’s Security Enhancements, GAO-02-358
                         (Washington, D.C.: Mar. 29, 2002).

                         U.S. General Accounting Office, Homeland Security: A Risk Management
                         Approach Can Guide Preparedness Efforts, GAO-02-208T (Washington,
                         D.C.: Oct. 31, 2001).

                         U.S. General Accounting Office, Combating Terrorism: Actions Needed to
                         Improve DOD Antiterrorism Program Implementation and Management,
                         GAO-01-909 (Washington, D.C.: Sept. 19, 2001).



Capital Decisionmaking   U.S. General Accounting Office, Budget Issues: Agency Data Supporting
                         Capital Project Funding Requests Could Be Improved, GAO-01-770
                         (Washington, D.C.: June 8, 2001).

                         U.S. General Accounting Office, VA Health Care: Capital Asset Planning
                         and Budgeting Need Improvement, GAO/T-HEHS-99-83 (Washington, D.C.:
                         Mar. 10, 1999).




                         Page 56                                      GAO-03-122 Federal Real Property
Related GAO Products




U.S. General Accounting Office, Executive Guide: Leading Practices in
Capital Decisionmaking, GAO/AIMD-99-32 (Washington, D.C.: Dec. 1998).




Page 57                                    GAO-03-122 Federal Real Property
Performance and Accountability and High-
Risk Series

              Major Management Challenges and Program Risks: A Governmentwide
              Perspective. GAO-03-95.

              Major Management Challenges and Program Risks: Department of
              Agriculture. GAO-03-96.

              Major Management Challenges and Program Risks: Department of
              Commerce. GAO-03-97.

              Major Management Challenges and Program Risks: Department of
              Defense. GAO-03-98.

              Major Management Challenges and Program Risks: Department of
              Education. GAO-03-99.

              Major Management Challenges and Program Risks: Department of
              Energy. GAO-03-100.

              Major Management Challenges and Program Risks: Department of
              Health and Human Services. GAO-03-101.

              Major Management Challenges and Program Risks: Department of
              Homeland Security. GAO-03-102.

              Major Management Challenges and Program Risks: Department of
              Housing and Urban Development. GAO-03-103.

              Major Management Challenges and Program Risks: Department of the
              Interior. GAO-03-104.

              Major Management Challenges and Program Risks: Department of
              Justice. GAO-03-105.

              Major Management Challenges and Program Risks: Department of
              Labor. GAO-03-106.

              Major Management Challenges and Program Risks: Department of State.
              GAO-03-107.

              Major Management Challenges and Program Risks: Department of
              Transportation. GAO-03-108.




              Page 58                                  GAO-03-122 Federal Real Property
Performance and Accountability and High-
Risk Series




Major Management Challenges and Program Risks: Department of the
Treasury. GAO-03-109.

Major Management Challenges and Program Risks: Department of
Veterans Affairs. GAO-03-110.

Major Management Challenges and Program Risks: U.S. Agency for
International Development. GAO-03-111.

Major Management Challenges and Program Risks: Environmental
Protection Agency. GAO-03-112.

Major Management Challenges and Program Risks: Federal Emergency
Management Agency. GAO-03-113.

Major Management Challenges and Program Risks: National
Aeronautics and Space Administration. GAO-03-114.

Major Management Challenges and Program Risks: Office of Personnel
Management. GAO-03-115.

Major Management Challenges and Program Risks: Small Business
Administration. GAO-03-116.

Major Management Challenges and Program Risks: Social Security
Administration. GAO-03-117.

Major Management Challenges and Program Risks: U.S. Postal Service.
GAO-03-118.

High-Risk Series: An Update. GAO-03-119.

High-Risk Series: Strategic Human Capital Management. GAO-03-120.

High-Risk Series: Protecting Information Systems Supporting the
Federal Government and the Nation’s Critical Infrastructures. GAO-03-
121.

High-Risk Series: Federal Real Property. GAO-03-122.




Page 59                                    GAO-03-122 Federal Real Property
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