oversight

Federal Real Property: National Strategy and Better Data Needed to Improve Management of Excess and Underutilized Property

Published by the Government Accountability Office on 2012-06-20.

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

             United States Government Accountability Office

GAO          Report to the Chairman, Subcommittee on
             Federal Financial Management, Government
             Information, Federal Service, and International
             Security, Committee on Homeland Security
             and Governmental Affairs, U.S. Senate
June 2012
             FEDERAL REAL
             PROPERTY
             National Strategy and
             Better Data Needed to
             Improve Management
             of Excess and
             Underutilized
             Property




GAO-12-645
                                               June 2012

                                               FEDERAL REAL PROPERTY
                                               National Strategy and Better Data Needed to
                                               Improve Management of Excess and Underutilized
                                               Property
Highlights of GAO-12-645, a report to the
Chairman, Subcommittee on Federal Financial
Management, Government Information,
Federal Service, and International Security,
Committee on Homeland Security and
Governmental Affairs, U.S. Senate

Why GAO Did This Study                         What GAO Found
The federal government has made                The Federal Real Property Council (FRPC) has not followed sound data
some progress addressing previously            collection practices in designing and maintaining the Federal Real Property
identified issues with managing federal        Profile (FRPP) database, raising concern that the database is not a useful tool for
real property. This includes
                                               describing the nature, use, and extent of excess and underutilized federal real
establishing FRPC—chaired by the
                                               property. For example, FRPC has not ensured that key data elements—
Office of Management and Budget
(OMB)—which created the FRPP                   including buildings' utilization, condition, annual operating costs, mission
database managed by GSA. GAO was               dependency, and value—are defined and reported consistently and accurately.
asked to determine the extent to which         GAO identified inconsistencies and inaccuracies at 23 of the 26 locations visited
(1) the FRPP database accurately               related to these data elements (see the fig. for an example). As a result, FRPC
describes the nature, use, and extent          cannot ensure that FRPP data are sufficiently reliable to support sound
of excess and underutilized federal real       management and decision making about excess and underutilized property.
property, and (2) progress is being
made toward more effective                     The federal government has undertaken efforts to achieve cost savings
management of these properties. GAO            associated with better management of excess and underutilized properties.
analyzed the data collection process           However, some of these efforts have been discontinued and potential savings for
and agency data, visited 26 sites              others are unclear. For example, in response to requirements set forth in a June
containing excess and underutilized            2010 presidential memorandum for agencies to achieve $3 billion in savings by
buildings from five civilian federal real      the end of fiscal year 2012, the General Services Administration (GSA) reported
property holding agencies with                 approximately $118 million in lease cost savings resulting from four new
significant portfolios, and interviewed        construction projects. However, GSA has yet to occupy any of these buildings
officials from these five agencies and         and the agency’s cost savings analysis projected these savings would occur over
OMB staff about how they collect               a 30-year period—far beyond the time frame of the memorandum. The five
FRPP data and manage excess and                federal agencies that GAO reviewed have taken some actions to dispose of and
underutilized properties.                      better manage excess and underutilized property, including using these
What GAO Recommends                            properties to meet space needs by consolidating offices and reducing employee
                                               work space to use space more efficiently. However, they still face long-standing
GAO recommends that, in consultation           challenges to managing these properties, including the high cost of property
with FRPC, GSA develop a plan to               disposal, legal requirements prior to disposal, stakeholder resistance, and remote
improve the FRPP and that OMB                  property locations. A comprehensive, long-term national strategy would support
develop a national strategy for                better management of excess and underutilized property by, among other things,
managing federal excess and                    defining the scope of the problem; clearly addressing achievement goals;
underutilized real property. GSA               addressing costs, resources, and investments needed; and clearly outlining roles
agreed with GAO’s recommendation               and coordination mechanisms across agencies.
and agreed with the report’s findings,
in part. OMB agreed that real property         Building Incorrectly Reported in the FRPP Database
challenges remain but raised concerns
about how GAO characterized its
findings on FRPP accuracy and other
statements. GAO believes its findings
are properly presented. The details of
agencies’ comments and GAO’s
response are addressed more fully
within the report.
                                               Note: Data for this dilapidated U.S. Department of Agriculture building indicated that it was in near
                                               perfect condition and fully utilized even though it was vacant at the time GAO visited the site and it
                                               had multiple safety and health issues including rat and beehive infestations. The building has since
View GAO-12-645. For more information,         been demolished.
contact David Wise at (202) 512-5731 or at
wised@gao.gov.

                                                                                                  United States Government Accountability Office
Contents


Letter                                                                                    1
               Background                                                                 5
               Excess and Underutilized Property Data Are Inconsistent and
                 Inaccurate because of Lack of Sound Data Collection Practices            9
               Although Some Progress Has Been Made, Federal Property
                 Management Is Still Challenging and Efforts Lack a National
                 Strategy                                                               29
               Conclusions                                                              44
               Recommendations for Executive Action                                     45
               Agency Comments and our Evaluation                                       46

Appendix I     Objectives, Scope, and Methodology                                       49



Appendix II    Federal Real Property Council Fiscal Year 2010 Inventory Data
               Elements and Descriptions                                                54



Appendix III   Comments from the Office of Management and Budget                        58



Appendix IV    Comments from the General Services Administration                        67



Appendix V     Comments from the Department of Veterans Affairs                         72



Appendix VI    Comments from the U.S. Department of Agriculture                         82



Appendix VII   GAO Contact and Staff Acknowledgments                                    84




               Page i                                       GAO-12-645 Federal Real Property
Tables
          Table 1: Definitions of FRPP Performance Measures in 2010 FRPC
                   Guidance                                                           6
          Table 2: FRPP Building Utilization Categories                               7
          Table 3: Utilization and Annual Operating Cost Data for All Assets
                   Reported by FRPC in 2010                                         28
          Table 4: Identified Problems with Agencies’ Cost Savings Estimates
                   Related to Excess and Underutilized Property                     32
          Table 5: Desirable Characteristics for a National Strategy, from
                   Conception to Implementation                                     43


Figures
          Figure 1: Example of Inaccurate Reporting of Utilization Data at a
                   VA site                                                          11
          Figure 2: Example of Inaccurate Reporting of Utilization Data at a
                   USDA site                                                        12
          Figure 3: How Alternative Repair Needs Designations Affect
                   Condition Index Data                                             13
          Figure 4: Example of Inconsistent FRPP Condition Index Reporting
                   at an Interior Site                                              14
          Figure 5: Examples of Federal Property Reported as Being in
                   Excellent Condition in the FRPP Database                         15
          Figure 6: Excess and Inactive Buildings with High Annual
                   Operating Costs                                                  17
          Figure 7: Exterior of the Eisenhower Executive Office Building            18
          Figure 8: Empty Buildings in Poor Condition with High PRVs                20
          Figure 9: Examples of Large Reported PRV Fluctuations for
                   Federal Real Properties                                          22
          Figure 10: Alternate Use of a Concrete Slab by GSA                        37
          Figure 11: Interior Property No Longer Slated for Demolition
                   because of Historic Designation Challenges                       39
          Figure 12: Vacant DOE Property with Radiological Contamination            40
          Figure 13: Abandoned and Contaminated GSA Property                        41




          Page ii                                       GAO-12-645 Federal Real Property
Abbreviations
CBO          Congressional Budget Office
CPAIS        Corporate Property Automated Information System
CPRA         Civilian Property Realignment Act
DOE          Department of Energy
FRPC         Federal Real Property Council
FRPP         Federal Real Property Profile
GSA          General Services Administration
OMB          Office of Management and Budget
PRV          plant replacement value
USDA         Department of Agriculture
VA           Department of Veterans Affairs



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Page iii                                                 GAO-12-645 Federal Real Property
United States Government Accountability Office
Washington, DC 20548




                                   June 20, 2012

                                   The Honorable Thomas R. Carper
                                   Chairman
                                   Subcommittee on Federal Financial Management,
                                   Government Information, Federal Service,
                                     and International Security
                                   Committee on Homeland Security
                                     and Governmental Affairs
                                   United States Senate

                                   Dear Mr. Chairman,

                                   The federal government’s real property portfolio is vast and diverse and
                                   includes almost 400,000 buildings that are located throughout the country
                                   and are owned and leased by different federal agencies. We have noted
                                   long-standing problems with how this property is managed, designating
                                   federal real property management as a high-risk area in January 2003. 1
                                   In 2004, the administration added managing federal real property to the
                                   President’s Management Agenda and the President issued an executive
                                   order establishing the Federal Real Property Council (FRPC). FRPC is
                                   chaired by the Deputy Director for Management of the Office of
                                   Management and Budget (OMB) and is composed of all agency Senior
                                   Real Property Officers, the Controller of OMB, the Administrator of the
                                   General Services Administration (GSA), and any other full-time or
                                   permanent part-time federal officials or employees as deemed necessary
                                   by the Council Chairman. The executive order required FRPC to work
                                   with GSA to establish and maintain a single, comprehensive database
                                   describing the nature, use, and extent of all real property under the
                                   custody and control of executive branch agencies, except when otherwise




                                   1
                                    GAO, High-Risk Series: Federal Real Property, GAO-03-122 (Washington, D.C.: January
                                   2003). Our high-risk series identifies areas at high risk because of their greater
                                   vulnerabilities to waste; fraud; abuse; and mismanagement or major challenges
                                   associated with their economy, efficiency, or effectiveness.




                                   Page 1                                               GAO-12-645 Federal Real Property
required for reasons of national security. 2 FRPC created the Federal Real
Property Profile (FRPP) to meet this requirement.

These efforts notwithstanding, we have reported that the federal
government continues to face a number of challenges to effectively
managing its real property. 3 In particular, we have reported on challenges
to disposing of excess properties and making better use of properties that
are underutilized. 4

In response to your request that we assess issues related to excess and
underutilized federal real property, this report addresses two objectives:

1) the extent to which the FRPP database consistently and accurately
   describes the nature, use, and extent of excess and underutilized
   federal real property and




2
 Federal Real Property Asset Management, Exec. Order No. 13327, 69 Fed. Reg. 5897
(Feb. 6, 2004). The executive order applies to agencies under the Chief Financial Officers
Act of 1990. The act agencies are the executive branch agencies listed at 31 U.S.C.
§901(b) and include the Departments of Agriculture, Commerce, Defense, Education,
Energy, Health and Human Services, Homeland Security, Housing and Urban
Development, Interior, Justice, Labor, State, Transportation, the Treasury, and Veterans
Affairs; the Environmental Protection Agency; the National Aeronautics and Space
Administration; the U.S. Agency for International Development; GSA; the National Science
Foundation: the Nuclear Regulatory Commission; the Office of Personnel Management;
the Small Business Administration; and the Social Security Administration. The order does
not apply to the U.S. Postal Service.
3
 For example, See GAO, Federal Real Property: Proposed Civilian Board Could Address
Disposal of Unneeded Facilities, GAO-11-704T (Washington, D.C.: June 9, 2011); High-
Risk Series: An Update, GAO-11-278 (Washington, D.C.: February 2011); and Federal
Real Property: Progress Made Toward Addressing Problems, but Underlying Obstacles
Continue to Hamper Reform, GAO-07-349 (Washington, D.C.: Apr. 13, 2007).
4
 Section 102 of Title 40 of the U.S. Code defines excess property as “property under the
control of a federal agency that the head of the agency determines is not required to meet
the agency’s needs or responsibilities.” However, GSA officials told us that designating a
property as excess in the FRPP does not mean that an agency is declaring it to GSA as
excess for the purpose of disposal. For example, they said that agencies can designate a
property as excess in the FRPP as a way of creating a “parking lot” for properties that they
are not prepared to address. Underutilized property means “an entire property or portion
thereof, with or without improvements, which is used: (a) Irregularly or intermittently by the
accountable Executive agency for current program purposes of that agency; or (b) For
current program purposes that can be satisfied with only a portion of the property.” 41
C.F.R. § 102-75.50.




Page 2                                                     GAO-12-645 Federal Real Property
2) the extent to which progress is being made toward more effectively
   managing excess and underutilized federal real property.

To address these objectives, we obtained and analyzed FRPP
submissions and other real property data from five civilian 5 real property–
holding agencies; interviewed real property officers at these agencies;
visited sites where the agencies had reported excess or underutilized
properties; interviewed OMB staff; and reviewed pertinent laws,
regulations, policies, and other documents related to the agencies’ real
property management. The five agencies we selected for review were
GSA, the Departments of Energy (DOE), the Interior (Interior), Veterans
Affairs (VA), and Agriculture (USDA). On the basis of the available data,
these five agencies report approximately two-thirds of the building square
footage reported by civilian agencies. We obtained answers to a set of
questions about managing excess and underutilized properties that we
posed to the senior real property officers of these five agencies. For each
agency, we also obtained fiscal year 2008, 2009, and 2010 FRPP
submissions, as well as data from each agency’s internal systems that
were the source of their FRPP submissions. 6 According to our
conversations with agency officials, FRPP submissions can be changed
only by the agency submitting the data. As a result, we believe that the
FRPP submissions obtained from the agencies match the data contained
in the FRPP database and are sufficiently reliable for the purpose of
evaluating the consistency and accuracy of the corresponding data in the
FRPP database. To gather detailed examples of excess and underutilized
properties and to learn about the processes by which data on such
properties are collected and submitted to the FRPP database, we visited




5
 We reported in September 2011 on Department of Defense excess facilities. We found
that the Department of Defense is limited in its ability to identify potential excess facilities
because it does not maintain complete and accurate data concerning the utilization of its
facilities. See GAO, Excess Facilities: DOD Needs More Complete Information and a
Strategy to Guide Its Future Disposal Efforts, GAO-11-814 (Washington, D.C.:
Sept. 19, 2011).
6
 We chose GSA, DOE, Interior, and VA because these agencies contained the largest
total building square footage of all civilian real property agencies that are required to
submit data under the executive order. We added USDA to our list of selected agencies
because USDA reported significantly more excess properties than the other civilian
agencies in 2009, the most recent data we had available at the time.




Page 3                                                       GAO-12-645 Federal Real Property
a nonprobability sample 7 of approximately 180 buildings at 26 sites
where excess or underutilized owned buildings had been reported by the
five civilian agencies. 8 We selected sites clustered around four U.S.
cities. 9 In selecting sites, we considered the number of excess or
underutilized buildings reported at each site and the distance of each site
from the city. Across the 26 sites, we attempted to balance the numbers
of sites and buildings selected for the five agencies, and the numbers of
excess versus underutilized buildings selected. Prior to each visit, we
analyzed data for each building and developed a set of questions about
the data submission for local property managers. During site visits, we
interviewed local property managers, compared what we observed at
each building with the FRPP data for that building, and documented what
we observed. Where possible, we took photographs of the buildings. 10 In
addition to this work related to the FRPP, we interviewed OMB staff
because OMB chairs FRPC, oversees the implementation of the
executive order, and has set cost savings goals related to excess and
underutilized properties.

We conducted this performance audit from May 2011 to June 2012 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and


7
 Because this is a nonprobability sample, observations made at these site visits do not
support generalizations about other properties described in the FRPP database or about
the characteristics or limitations of other agencies’ real property data. Rather, the
observations made during the site visits provided specific, detailed examples of issues
that were described in general terms by agency officials regarding the way FRPP data are
collected and reported and served to complement our analysis of data collection practices
across these agencies.
8
 In the case of VA, which did not categorize any of its building as “excess,” we visited
sites where buildings had been reported as “not utilized” or “underutilized.”
9
 We visited excess and underutilized properties in areas of the country where our staff
members doing this work were located—Washington, D.C.; Dallas, Texas; and Los
Angeles, California. We found only one DOE site that matched our criteria in these three
areas, so we selected another region of the country that had a large concentration of
excess and underutilized DOE properties—Oak Ridge, Tennessee. We did not attempt to
compare the accuracy of one agency’s data against the accuracy of another. Our purpose
was to visit multiple sites from different agencies in different geographic regions.
10
    At some sites, we could not take photographs because of security concerns.




Page 4                                                    GAO-12-645 Federal Real Property
             conclusions based on our audit objectives. Further details on our scope
             and methodology can be found in appendix I.


             In 2010, federal agencies reported about 3.35 billion square feet of
Background   building space to the FRPP: 79 percent of the reported building space
             was federally owned, 17 percent was leased, and 4 percent was
             otherwise managed. 11 The data indicated that the agencies used most of
             the space—about 64 percent—as offices, warehouses, housing,
             hospitals, and laboratories. The five agencies we reviewed—GSA, DOE,
             Interior, VA, and USDA—reported owning or leasing more than 866
             million square feet of building space, or about 25 percent of the total
             reported square footage for all agencies. 12

             Initially, FRPC defined 23 FRPP data elements to describe the federal
             government’s real property inventory. By 2008, FRPC had expanded the
             number of data elements included in the FRPP to 25. 13 FRPC requires
             agencies to update their FRPP real property data annually. Each asset
             included in the database is assigned a unique identification number that
             allows for tracking of the asset to the unique data that describe it.

             In addition to developing the database, the 2004 executive order required
             FRPC to develop guidance and best practices for real property
             management and develop performance measures to determine the
             effectiveness of federal real property management. The executive order
             specifically states that performance measures shall be designed “to
             enable the heads of executive branch agencies to track progress in the
             achievement of Governmentwide property management objectives, as
             well as allow for comparing the performance of executive branch
             agencies against industry and other public sector agencies.” In 2005, in
             its initial annual guidance to federal agencies, FRPC designated four



             11
               Otherwise managed buildings may be owned by a state government or by a foreign
             government that has granted rights for use to the federal government in an arrangement
             other than a lease agreement. Otherwise managed properties may also be trust entities
             that hold title to real property assets predominantly used as museums, but federal funds
             may be received to cover certain operations and maintenance costs.
             12
               The Department of Defense reported owning or leasing about 63 percent of the total
             building square footage reported for fiscal year 2010.
             13
              See appendix II for a list of the 25 FRPP data elements as defined in 2010.




             Page 5                                                   GAO-12-645 Federal Real Property
                                          FRPP data elements as performance measures: utilization, condition
                                          index, annual operating costs, and mission dependency. The definitions
                                          of these four data elements in 2010 can be found in table 1. 14

Table 1: Definitions of FRPP Performance Measures in 2010 FRPC Guidance

Data element             Description                                                  How data are reported
Utilization              The state of having been made use of, that is,               The utilization of a building is recorded as
                                                 a                                                                                           b
                         the rate of utilization.                                     overutilized, utilized, underutilized, or not utilized.
Condition index          General measure of the constructed asset’s                   Condition index is calculated as 1 minus the ratio of
                         condition at a specific point in time.                       repair needs to plant replacement value multiplied
                                                                                      by 100.
Annual operating costs   Expenses for recurring maintenance and repair                Annual operating costs must be greater than or equal
                         costs, utilities, cleaning or janitorial costs, and          to zero.
                         roads or grounds expenses.
Mission dependency       The value an asset brings to the performance of              Mission dependency must be recorded as one of
                         the mission as determined by the governing                   three options:
                         agency.                                                      1. mission critical
                                                                                      2. mission dependent, not critical
                                                                                      3. not mission dependent.
                                          Source: GAO analysis of FRPC information.
                                          a
                                           For office and hospital space, utilization measures the ratio of occupancy to current design capacity,
                                          for warehouses it measures the ratio of gross square feet occupied to current design capacity, for
                                          laboratories it measures the ratio of active units to current design capacity, and for housing it
                                          measures the percentage of individual units that are occupied.
                                          b
                                           Agencies are required to submit utilization information for offices, hospitals, warehouses,
                                          laboratories, and housing. Any building categorized as a post office, prison or detention center,
                                          school, museum, industrial, service, communication systems, or “other,” including “other institutional
                                          uses” does not require utilization information. Buildings categorized as housing are not permitted to
                                          receive a designation of overutilized or not utilized (not applicable must be recorded in these cases).
                                          FRPC guidance directed agencies to maintain the actual utilization percentage for audit purposes up
                                          to 2010 and some agencies reported the percentage voluntarily. Beginning in 2011, agencies were
                                          required to report utilization using actual percentages rather than the four-way classification described
                                          in this table.


                                          FRPC’s 2010 Guidance for Real Property Inventory Reporting provides
                                          specific guidelines on how to report a building as overutilized,
                                          underutilized, utilized, or not utilized based on the building’s use and the
                                          percentage of the building that is used (see table 2).




                                          14
                                           GSA, Federal Real Property Council: 2010 Guidance for Real Property Inventory
                                          Reporting (Washington, D.C.: Oct. 25, 2010).




                                          Page 6                                                             GAO-12-645 Federal Real Property
Table 2: FRPP Building Utilization Categories

Building use                          Overutilized            Utilized             Underutilized                Not utilized
Office                                          >95%          75–95%                       <75%               Not applicable
Hospital                                         >95            70–95                     25–70                       <25%
Warehouse                                        >85            50–85                     10–50                         <10
Laboratory                                       >85            60–85                     30–60                         <30
Housing                              Not applicable            85–100                       <85               Not applicable
                                         Source: FRPC.



                                         FRPC has been collecting FRPP data on federal government properties
                                         since 2005. We have reported that results-oriented organizations follow a
                                         number of sound data collection practices when gathering the information
                                         necessary to achieve their goals. 15 For example, these organizations
                                         recognize that they must balance their ideal performance measurement
                                         systems against real world considerations, such as the cost and effort
                                         involved in gathering and analyzing data. These organizations also tie
                                         performance measures to specific goals and demonstrate the degree to
                                         which the desired results are achieved. Conversely, we have observed
                                         that organizations that seek to manage an excessive number of
                                         performance measures may risk creating a confusing excess of data that
                                         will obscure rather than clarify performance issues. Limiting the number of
                                         measures to the vital few not only keeps the focus of data collection
                                         where it belongs, it helps ensure that the costs involved in collecting and
                                         analyzing the data do not become prohibitive. Furthermore, results-
                                         oriented organizations report on the performance data they collect.

                                         Following the implementation of the executive order and nationwide data
                                         collection efforts, we have reported that agencies continue to face
                                         challenges with managing excess and underutilized properties. 16 For
                                         example, we have previously reported that the legal requirements
                                         agencies must adhere to, such as requirements for screening and
                                         environmental cleanup as well as requirements related to historical
                                         properties, present a challenge to consolidating federal properties. 17 In


                                         15
                                          See GAO, Executive Guide: Effectively Implementing the Government Performance and
                                         Results Act, GAO/GGD-96-118 (Washington, D.C.: June 1996).
                                         16
                                           GAO-11-704T.
                                         17
                                           GAO-11-278.




                                         Page 7                                              GAO-12-645 Federal Real Property
addition, before GSA can dispose of a property that an agency no longer
needs, it must offer the property to other federal agencies. If other federal
agencies do not need the property, GSA must then make the property
available to state and local governments as well as certain nonprofit
organizations and institutions for public benefit uses such as homeless
shelters, educational facilities, or fire and police training centers.
According to agency officials, as a result of this lengthy process, excess
or underutilized properties may remain in an agency’s possession for
years. Furthermore, the costs of disposing of property can further hamper
an agency’s efforts to address its excess and underutilized property
problems. For example, properties that contain radiological contamination
must be mitigated before they can be disposed. In addition, the interests
of multiple—and often competing—stakeholders may not align with the
most efficient use of government resources and complicate real property
decisions.

Despite these challenges, both the previous and current administrations
have implemented a number of cost savings initiatives associated with
excess and underutilized property. In August 2005, the administration set
a goal to reduce the size of the federal inventory by $15 billion by 2009. 18
In June 2010, the President directed federal civilian agencies to achieve
$3 billion in savings by the end of fiscal year 2012 through reducing
annual operating costs, generating income through disposing of assets,
using existing real property more effectively by consolidating existing
space, expanding telework, 19 and other space realignment efforts. 20
Furthermore, on May 4, 2011, the administration proposed legislation—
referred to as the Civilian Property Realignment Act (CPRA)—to establish
a legislative framework for disposing of and consolidating real property,
among other things. In September 2011, 21 OMB projected that the
proposal would save the government $4.1 billion over 10 years from sales
proceeds, and that savings would also be achieved through decreased



18
  According to OMB staff, in 2007, this goal was changed to achieving a $9 billion
reduction in 2009 and a $15 billion reduction by 2015.
19
 Telework is a work flexibility arrangement under which an employee works at home or a
work site other than the location at which the employee would otherwise work.
20
  The administration reports that agencies have now identified more than $3 billion in
potential savings.
21
 OMB, Living Within Our Means and Investing in the Future: The President’s Plan for
Economic Growth and Deficit Reduction (Washington, D.C., September 2011).




Page 8                                                   GAO-12-645 Federal Real Property
                             operating costs and efficiencies. 22 However, the Congressional Budget
                             Office (CBO) has concluded that CPRA would probably not result in a
                             significant increase in proceeds from the sale of federal properties over
                             the next 10 years. 23


                             FRPC has not followed sound data collection practices, and, as a result,
Excess and                   FRPP data do not describe excess and underutilized properties
Underutilized                consistently and accurately. Consistent with this, FRPP data did not
                             always accurately describe the properties at the majority of sites we
Property Data Are            visited and often overstated the condition and annual operating costs,
Inconsistent and             among other things.
Inaccurate because of
Lack of Sound Data
Collection Practices


FRPP Data Do Not             Agency officials described ways in which key performance measures in
Describe Excess and          the FRPP database are reported inconsistently or inaccurately. At 23 of
Underutilized Federal Real   the 26 sites that we visited, we found inconsistencies or inaccuracies
                             related to the following performance measures described in the
Properties Consistently      background: (1) utilization, (2) condition index, (3) annual operating costs,
and Accurately               and (4) mission dependency. As a result of the discussions we had with
                             agency officials about how FRPP data are reported, as well as the
                             inconsistencies and inaccuracies described in the following sections, we
                             question whether FRPP data provide an adequate tool for decision
                             making or measuring performance, such as the cost savings initiatives
                             put forth by OMB.



                             22
                               When CPRA was first proposed, OMB projected that it would save the government $15
                             billion within 3 years after enactment in sales proceeds and operations and maintenance
                             savings. However, OMB staff told us that after internal deliberations, they decided to
                             change this projection.
                             23
                               Letter from Douglas W. Elmendorf, Director, Congressional Budget Office, to Darrell E.
                             Issa, Chairman, Committee on Oversight and Government Reform, U.S. House of
                             Representatives, responding to Chairman Issa’s request for the Congressional Budget
                             Office to analyze the President’s legislative proposal to expedite the disposal of federal
                             civilian real property, June 27, 2011.




                             Page 9                                                   GAO-12-645 Federal Real Property
Utilization   We found that the agencies we reviewed do not report property utilization
              consistently. FRPC guidance states that for offices, hospitals, and
              warehouses, utilization is the ratio of occupancy to current design
              capacity. 24 Although USDA requires its agencies to follow FRPC
              guidance, USDA stated that FRPC has not established governmentwide
              definitions for occupancy or current design capacity. As a result, each
              agency within USDA has its own internal procedures for determining a
              building’s utilization level. Moreover, VA defines utilization differently
              from FRPC guidance, that is, the ratio of “ideal space” to existing space,
              which VA stated is different from occupancy. Despite the inconsistency of
              this method of defining utilization with FRPC guidance, VA officials
              reported that OMB staff approved of their method of reporting utilization. 25
              Furthermore, OMB acknowledged that it is standard practice for agencies
              to measure utilization tailored to the agencies’ specific needs and
              circumstances.

              Among the 26 federal sites we visited, we found utilization data
              inconsistencies or inaccuracies for properties at 19 of these sites. For
              example, at one VA site, a building we toured was reported to have a
              utilization of 39 percent in 2010 FRPP data and 45 percent utilization in
              2011 source data, even though local officials said this building has been
              fully occupied since 2008. See figure 1. Another building that we toured
              at the same site was reported to be 0 percent utilized in 2010 FRPP
              data 26 and 59 percent utilized in 2011 agency source data. 27 However, all


              24
                For laboratories, utilization is the ratio of active units to current design capacity. For
              housing, utilization is the percentage of individual units that are occupied.
              25
                In calculating utilization for offices, hospitals and warehouses (see footnote 24 for FRPC
              guidance on measuring utilization for laboratories and houses), FRPC guidance directs
              agencies to determine the ratio of occupancy to “current design capacity,” but VA
              determines utilization based on “ideal space.” Following their concept of utilization, VA
              officials reported that an old building with an inefficient floor plan may be larger than
              necessary for the service it provides, but if changes cannot be made to the building
              because of its historical designation or because it is cost prohibitive to renovate, this
              building may be perpetually designated as underutilized even though it is fully occupied on
              a day-to-day basis.
              26
                Though not required, VA reported the actual percentage of utilization for buildings that
              required a utilization submission to the FRPP in fiscal year 2010.
              27
                In addition to reviewing FRPP data from fiscal year 2008 to fiscal year 2010, we also
              obtained property data for select data elements from the source databases that each
              agency uses to generate its annual FRPP submissions. This helped ensure we had
              updated information for the buildings we visited during our review. The agency source
              data for each agency was from September or October of 2011.




              Page 10                                                      GAO-12-645 Federal Real Property
                                          but one of the rooms in the building were vacant, and local officials said
                                          only 10 percent of the building was utilized. 28

Figure 1: Example of Inaccurate Reporting of Utilization Data at a VA site




                                          In addition, at one USDA site we visited, we found two houses that have
                                          been empty since 2009; however, they were both reported to the FRPP
                                          as utilized for 2009 and 2010. See figure 2 to view images of these two
                                          USDA buildings. We also found problems with the utilization data at
                                          properties owned by the other three agencies included in our review.




                                          28
                                            VA took ownership of this building from DOD in 2011, but VA began occupying
                                          approximately 10 percent of the space since 2008. According to the local VA officials who
                                          manage the building, the level of occupancy for this building has not changed since 2008
                                          and remains only 10 percent occupied.




                                          Page 11                                                 GAO-12-645 Federal Real Property
Figure 2: Example of Inaccurate Reporting of Utilization Data at a USDA site




                                          a
                                           According to FRPC guidance, housing units must be 85 percent to100 percent occupied to warrant a
                                          utilization score of “utilized.”


Condition Index                           As was the case with utilization, we found that agencies do not report the
                                          condition of their properties consistently. According to FRPC guidance,
                                          condition index is a general measure of the constructed asset’s condition
                                          and is calculated by using the ratio of repair needs to the plant
                                          replacement value (PRV). 29 Needed repairs are determined by the
                                          amount of repairs necessary to ensure that a constructed asset is
                                          restored to a condition substantially equivalent to the originally intended
                                          and designed capacity, efficiency, or capability. 30 However, we found that
                                          agencies do not always follow this guidance. For example, when
                                          agencies have determined that a property is not needed and will
                                          ultimately be disposed, they may assign no repair needs to that property
                                          even though the property may be in a state of significant disrepair. Doing
                                          so allows agencies to use their limited funds to maintain properties that
                                          they regularly use, but it can lead to condition index data that do not
                                          accurately reflect each property’s condition as set forth in FRPC



                                          29
                                            PRV is the cost of replacing the existing constructed asset at today’s standards. PRV
                                          will be discussed in greater detail later in this report. The entire formula for condition index
                                          is 1 minus the ratio of repair needs to PRV multiplied by 100.
                                          30
                                           GSA , Federal Real Property Council: 2010 Guidance for Real Property Inventory
                                          Reporting.




                                          Page 12                                                      GAO-12-645 Federal Real Property
                                        guidance. Figure 3 is an example of how the condition index of a building
                                        with high repair needs can significantly change depending on whether
                                        agency officials choose to follow FRPC guidance or if they assign zero
                                        dollars in repair needs because repairs are not planned.

Figure 3: How Alternative Repair Needs Designations Affect Condition Index Data




                                        While it may be a good practice not to assign repair needs to dilapidated
                                        buildings that no longer support agencies in carrying out their mission, the
                                        fact that these buildings may report a perfect or near-perfect condition
                                        index provide decision makers with an inconsistent representation of the
                                        condition of buildings at a given site. We found examples at all five
                                        agencies we visited where a property in very poor condition received a
                                        higher condition index score than a property in good condition. Figure 4
                                        demonstrates examples of this at an Interior site we visited.




                                        Page 13                                         GAO-12-645 Federal Real Property
Figure 4: Example of Inconsistent FRPP Condition Index Reporting at an Interior Site




                                         We found condition index reporting inconsistencies and inaccuracies at
                                         21 of 26 sites visited. The practice of assigning no repair needs to many
                                         excess and underutilized buildings because agencies have no intention of
                                         repairing them led to severely blighted buildings receiving excellent
                                         condition scores. 31 Figure 5 illustrates several separate buildings that
                                         received high condition index scores, even though they are in poor
                                         condition. Some of the problems with these buildings include asbestos,
                                         mold, collapsed walls or roofs, health concerns, radioactivity,
                                         deterioration, and flooding.




                                         31
                                           High condition indexes are indicative of properties that are in better condition than
                                         properties with lower condition indexes. As such, a property with a 100 percent condition
                                         index would represent a property that is in perfect or near-perfect condition.




                                         Page 14                                                  GAO-12-645 Federal Real Property
Figure 5: Examples of Federal Property Reported as Being in Excellent Condition in the FRPP Database




Annual Operating Costs                  Agencies are required to report annual operating costs to FRPP for each
                                        building. However, we found that agencies are not always able to
                                        determine the annual operating costs at the building level and this can



                                        Page 15                                            GAO-12-645 Federal Real Property
lead to inaccurate and misleading data. For example, some DOE
buildings are not individually metered, so DOE officials who manage
those buildings collect annual operating costs data at the site level and
apportion these costs to the individual buildings according to square
footage. Additionally, VA told us that many of its buildings are located on
medical campuses and are not individually metered; therefore, utilities
cannot be measured for one particular building.

We found data inconsistencies and inaccuracies for annual operating
costs at 19 of 26 sites that we visited. For example, an Interior property
had large fluctuations in annual operating costs from one year to the next
that did not seem to match the utilization of the building. It was listed as
utilized in 2008 but had recorded annual operating costs of $0. In 2009,
the building was listed as underutilized but the annual operating costs
were listed as $10,516. In 2010, the property was then listed as
underutilized with annual operating costs of $18,981, an increase of more
than 80 percent. An Interior official at this site told us that annual
operating costs are determined using a complicated calculation that
includes a compilation of data from various sources controlled at the
regional and headquarters levels. Furthermore, because of the difficulty in
measuring operating costs at the building level, only one of USDA’s
component agencies even attempts to measure the actual operating
costs of each individual building. As such, all other agencies within USDA
have developed their own methods for determining annual operating
costs at the location and building levels, and this can cause large
fluctuations in reported operating costs. For example, a USDA property
we visited had reported annual operating cost increases from $374,000 in
2009 to more than $1 million in 2010. This increase in operating costs
occurred while the status, utilization, condition, and value of the property
remained steady during the same time frame. Officials at this site told us
another challenge in reporting these costs is that they do not have the
financial system for determining actual operating costs.

In addition to large fluctuations in annual operating costs from one year to
the next, we also identified instances of buildings that report high annual
operating costs even though all utilities have been turned off and no
maintenance was being conducted. This could lead to inflated
expectations of the savings potential if these buildings were disposed.
Figure 6 provides examples of some excess and inactive buildings with
high annual operating costs.




Page 16                                         GAO-12-645 Federal Real Property
Figure 6: Excess and Inactive Buildings with High Annual Operating Costs




Mission Dependency                      FRPP guidance provides very little information to agencies on how
                                        mission dependency should be reported, and the data are generally not
                                        useful for measuring performance. For example, agencies have three
                                        options for assigning mission dependency to their assets: mission critical;
                                        mission dependent, not critical; and not mission dependent. 32 A short
                                        definition of each category is included but no additional guidance or
                                        clarification is provided. We found that agencies do not measure mission
                                        dependency in a consistent manner because the data element can be
                                        measured differently by each agency. For example, one office within DOE
                                        uses a complex decision tree to determine the mission dependency of



                                        32
                                          FRPC guidance defines these three categories as follows: (1) mission critical: without
                                        constructed asset or parcel of land, mission is compromised; (2) mission dependent, not
                                        critical: does not fit into mission critical or not mission dependent categories; and (3) not
                                        mission critical: mission unaffected. A fourth category, not rated, is available for
                                        Department of Defense base realignment and closure properties. GSA, Federal Real
                                        Property Council: 2010 Guidance for Real Property Inventory Reporting.




                                        Page 17                                                     GAO-12-645 Federal Real Property
                                         assets while another office at DOE reports mission dependency based on
                                         the operating status of a building. In addition, VA’s designation of mission
                                         dependency is a function of utilization. Assets with a high percentage of
                                         utilization are labeled “mission critical” and those with low utilization are
                                         labeled “not mission dependent.” VA officials said they use this method
                                         because it is the best way for them to manage the mission dependency of
                                         their assets—for example, hospitals measure performance by the number
                                         of patients served. However, since mission dependency is based strictly
                                         on utilization in VA data, this performance measure does not provide any
                                         new information on the asset in the FRPP database.

                                         In fact, FRPC guidance indicates that the reported value of this
                                         performance measure is determined separately by each governing
                                         agency; thus, it is unclear how this measure can have any meaning as a
                                         performance measure across agencies when reported to the national
                                         database. Furthermore, GSA officials familiar with FRPP submissions told
                                         us that mission dependency is a subjective data element. As such, we
                                         could not determine whether FRPP data accurately described the mission
                                         dependency of the buildings we visited. For example, we visited the
                                         Eisenhower Executive Office Building in Washington, D.C., which is listed
                                         as “mission dependent, not critical” even though this building is located
                                         next to the White House and houses offices for key White House staff.
                                         Figure 7 provides exterior images of the Eisenhower Executive Office
                                         Building as it is being renovated.

Figure 7: Exterior of the Eisenhower Executive Office Building




                                         Page 18                                         GAO-12-645 Federal Real Property
Value (PRV)   In addition to identifying the four performance measures discussed
              previously, FRPC also identified value as a data element for the FRPP
              database. Value is not identified as a performance measure by FRPC, as
              discussed earlier, but it is a key data element and central component for
              calculating condition index. However, the concept of value in the FRPP can
              be misleading. Value in FRPC guidance is defined as the cost of replacing
              an existing constructed asset at today’s standards and is known as PRV. 33
              However, GSA officials cautioned us not to think of PRV as an asset’s
              actual worth because it is not an appraisal of the property or any kind of
              measure of the asset’s market value. Moreover, we found that PRV is
              typically much higher than the actual worth of the building because PRV
              does not take into account market conditions or the condition of the asset.
              For example, in May 2011, GSA auctioned a parcel of land that contained
              several buildings and structures for $6.4 million. We visited 10 of these
              properties before the auction was finalized. Although the values may have
              been calculated according to FRPC guidance, the total PRV for the
              properties we saw was well over twice that amount (almost $17 million) not
              counting the value of the land itself. (The value of land is not reported to the
              FRPP.)

              Additionally, according to agency officials, many excess properties do not
              have the potential for generating revenue for the federal government.
              Specifically, USDA officials reported that a lot of excess properties just
              need to be demolished because they cannot be sold or conveyed.
              Indeed, we visited more than 80 buildings on our site visits that agencies
              plan to demolish when they have the resources to execute the
              demolitions. These properties would never be replaced or sold. Some of
              these properties’ PRVs are very high by definition, even though the
              condition of the building clearly indicates that the actual market or
              appraisal value would be much lower (because condition does not factor
              into PRV calculations). Figure 8 shows properties that have high reported
              values and high condition indexes even though they are in poor condition
              and have remained unused for many years. By examining the data alone,
              these properties would not appear to be candidates for demolition.
              However, these properties actually have no value to the agencies,
              according to agency officials, and may even be considered liabilities. In
              these cases, even though the agencies may be following FRPC guidance,


              33
                FRPC only requires the value of buildings and structures to be reported in the federal
              real property inventory. As such, land is excluded for value. GSA, Federal Real Property
              Council: 2010 Guidance for Real Property Inventory Reporting.




              Page 19                                                  GAO-12-645 Federal Real Property
                                        the high PRV values could be misleading if used as an indicator of
                                        property value and potential revenue.

Figure 8: Empty Buildings in Poor Condition with High PRVs




                                        We are not suggesting that FRPC should create a data element that
                                        describes the market value or actual worth of a building. Interior officials
                                        told us that evaluating the market value of federal properties is beyond
                                        the abilities of many government real property management staff, since
                                        they are not engaged in the real estate market. Furthermore, GSA
                                        officials said that it would be cost prohibitive to conduct market value
                                        appraisals of all federal property, and that it would be impractical,
                                        considering that many excess properties will be demolished rather than
                                        sold or conveyed. However, commonly referring to the PRV as “value”
                                        could perpetuate confusion on the nature of the federal government’s



                                        Page 20                                          GAO-12-645 Federal Real Property
property portfolio and an overstatement of its worth. Therefore, any broad
statements made about the overall worth of the federal portfolio cannot be
substantiated with FRPP data. As such, the federal government does not
have any means of accurately characterizing the overall value of the
federal portfolio.

In addition to the confusion that referencing the PRV as “value” can bring,
we also found inconsistencies in the reported PRV at the sites we visited.
For example, we found instances of a property’s PRV changing
significantly from one year to another that officials were unable to explain.
Figure 9 shows properties that reported significant changes in value from
one year to the next that local agency officials could not explain.




Page 21                                         GAO-12-645 Federal Real Property
Figure 9: Examples of Large Reported PRV Fluctuations for Federal Real Properties




                                        Page 22                                     GAO-12-645 Federal Real Property
                        The types of inconsistencies and inaccuracies we have identified in these
                        five key data elements suggest that the FRPP database is not a useful
                        decision-making tool for managing federal real property. Even though the
                        2004 executive order provides that performance measures shall be
                        designed so that heads of executive agencies can track progress in
                        meeting property management objectives, three out of five senior real
                        property officers at the agencies we reviewed reported that they do not use
                        FRPP data to manage real property, but instead use information from their
                        own data systems for making management decisions. The other two
                        officers stated that the FRPP performance measures were valuable.
                        However, we question the utility of these performance measures
                        considering the types of inconsistencies and inaccuracies we identified.
                        Without consistent and accurate data, heads of executive branch agencies
                        may not have the information they need to make effective management
                        decisions about their excess and underutilized properties. Furthermore,
                        OMB staff will be challenged to effectively manage problems with excess
                        and underutilized property across the federal government.


FRPC Has Not Followed   We have previously reported that results-oriented organizations make
Sound Data Collection   sure that the data they collect are sufficiently complete, accurate, and
Practices               consistent enough to document performance and support decision
                        making. 34 However, FRPC has not followed sound data collection
                        practices when collecting FRPP data that would help them collect these
                        data in a way that is sufficiently consistent and accurate to be useful for
                        making property management decisions. We found problems with the
                        way FRPC has collected FRPP data that relate to data consistency,
                        performance measures, collaboration, and data reporting.

Data Consistency        FRPC has not ensured that data elements are consistently defined and
                        reported. The 2004 executive order stated that it is the role of the
                        Administrator of GSA, in consultation with FRPC, to establish and
                        maintain the federal database and to establish data and information
                        technology standards to facilitate reporting on a uniform basis. As
                        illustrated in the previous section, we found that data were reported
                        inconsistently, sometimes because the guidance was not clear or
                        because agencies were not following the guidance. For example, Interior
                        officials told us that the definitions provided in FRPC guidance of key data



                        34
                         GAO/GGD-96-118.




                        Page 23                                         GAO-12-645 Federal Real Property
                       elements, such as utilization, are very basic and that more guidance
                       would be needed to report this data consistently. In addition, as stated
                       earlier in this report, VA officials reported that OMB agreed to let VA use
                       an alternative definition for utilization than the one provided in FRPC
                       guidance. Because key data elements are not reported uniformly, they
                       can have no collective meaning when amassed in a single database. If
                       FRPC finds that certain kinds of data cannot be defined the same from
                       agency to agency, that kind of data may not belong in a single database
                       that appears to be standard across the government. Decision makers
                       may assume that data reported for a particular data element have the
                       same meaning across the federal government. This could lead to
                       incorrect assumptions about the nature and scope of real property
                       management problems.

Performance Measures   FRPC has designated performance measures in the FRPP database that
                       are ineffective. As discussed previously, FRPC designated four data
                       elements in the FRPP as performance measures. However, these
                       measures are not linked to any performance goals, and FRPC guidance
                       does not explain what constitutes acceptable performance on these
                       measures. By establishing performance measures before establishing the
                       specific performance goals that it seeks to achieve through FRPP data
                       collection, FRPC’s requirements may cause agencies to waste valuable
                       time and resources collecting the wrong data. Without effective
                       performance goals to guide its data collection, FRPC cannot ensure that
                       the data gained from these performance measures are an effective use of
                       resources.

                       In addition, the performance measures designated by FRPC are not
                       consistent with the requirements described in the 2004 executive order.
                       The executive order states that FRPC should work with the Administrator
                       of GSA to “establish appropriate performance measures to determine the
                       effectiveness of Federal real property management. Such performance
                       measures shall include, but are not limited to, evaluating the costs and
                       benefits involved with acquiring, repairing, maintaining, operating,
                       managing, and disposing of Federal real properties at particular
                       agencies.” Furthermore, the executive order states that the measures
                       should be designed in such a way as to allow for comparing the
                       performance of agencies against that of industry and other public sector
                       agencies. However, because these measures have not been
                       implemented consistently, they cannot be used for comparison within the
                       government or outside of it and, therefore, cannot be used to determine
                       the effectiveness of federal real property management or to evaluate the
                       costs and benefits of various management activities. If FRPC determines


                       Page 24                                         GAO-12-645 Federal Real Property
                that it cannot design measures that meet the requirements described in
                the executive order, FRPC could request that the executive order be
                reexamined.

Collaboration   OMB, as the Chair of FRPC, has not collaborated effectively with the
                agencies that submit FRPP data and may be requiring agencies to spend
                resources on data collection that is not useful. The agencies we reviewed
                expressed concerns about the data collection process, including the
                amount of data collection required, the time they are given to implement
                new data requirements, and their ability to collect data as required
                accurately. For example, USDA officials told us that they have a very
                large portfolio of federal property and that it is labor intensive to collect all
                of the required data. In addition, Interior officials stated that when new
                data requirements are implemented, they need 1 to 2 years lead time in
                order to update data systems and train staff in order to collect the data
                accurately—historically, they said they have been given less than 6
                months to implement new guidance. Moreover, GSA officials who review
                FRPP data submitted by other agencies stated that when agencies have
                told OMB staff that they do not have the ability to accurately gather
                information as required, OMB staff have told them to collect the data to
                the best of their ability. GSA officials also told us that OMB staff have
                acknowledged that data collection may not be accurate at first, but that as
                agencies get accustomed to collecting the data, they will find ways to
                collect it more accurately.

                These agency concerns were magnified during the last FRPP reporting
                period (fiscal year 2011). The amount of data that FRPC requires federal
                agencies to report increased significantly in 2011, and federal agencies
                reported that they did not have the time or resources to respond to these
                requirements effectively. FRPC added five new data elements to the
                collection requirements, not counting the new elements’ subelements,
                which also must be taken into consideration. 35 To put this into
                perspective, from 2005 through 2010, only two new data elements were


                35
                  As part of its 2011 guidance, the FRPP requires agencies to collect additional
                information for five new data elements which also consist of 10 subelement categories.
                These five new data elements include total annual British Thermal Units consumption,
                personnel, anticipated disposition of asset, determination of excess, and potential
                candidate for sale. In addition, other changes were made to previous data elements. For
                example, beginning in 2011, agencies were required to report the percentage of utilization.
                GSA, Federal Real Property Council: 2011 Guidance for Real Property Inventory
                Reporting, Version 3.




                Page 25                                                  GAO-12-645 Federal Real Property
added to FRPP reporting requirements. Furthermore, FRPC did not
finalize the guidance for 2011 submission requirements until October 4,
2011, and data collection was due on December 15, 2011.

Agency officials told us that the reporting changes and short timelines
created a significant burden to their agencies, and that the submitted data
subsequently may not be accurate. For example, USDA officials reported
that it had to make extensive changes to their Corporate Property
Automated Information System (CPAIS)—USDA’s real property data
system of record—to comply with the new reporting requirements. They
added that, because of the late distribution of the requirements, agencies
had little time to respond to the data changes, causing USDA to have to
shut down the CPAIS system to prevent compromise of fiscal year 2011
data while they attempted to update their systems to comply with the
required changes. In addition, Interior officials told us that they requested
waivers for part of the new reporting requirements that they could not
report accurately in the time they had to respond. However, OMB staff did
not respond to their waiver request—to accept or deny it—so Interior
officials submitted data to the best of their ability, with little confidence
that the data were accurate. Furthermore, GSA reported that one of the
new reporting requirements—obtaining the numbers of personnel in each
building—will be resource intensive and time consuming and that the data
could be inaccurate. OMB staff told us that they held conference calls
with the agencies, reviewed their feedback and weighed the burden the
data collection presented to the agencies. For example, the data element
describing total annual British Thermal Units consumption was made
optional for a year and reporting personnel data was limited to only
certain building asset types. However, the burdens the agencies reported
with the 2011 data submissions, including the fact that Interior received
no response to their waiver request at all, raises questions as to the
effectiveness of the collaboration efforts.

We asked OMB staff why data collection requirements increased in 2011
and they reported that the data collection requirements were modified to
provide a more comprehensive basis for governmentwide analysis of the
federal real estate inventory. However, it is unclear how this information
provides a more comprehensive analytic basis when the agencies have
told OMB that they cannot guarantee that the collected data are accurate.
Collecting and analyzing data creates costs for federal agencies as they
must direct time and staff resources to this task. We have previously
emphasized the importance of limiting the number of measures to the
vital few measures considered essential for producing data for decision
making. Furthermore, increasing data collection requirements without


Page 26                                         GAO-12-645 Federal Real Property
                 ensuring that agencies have the time and resources to respond increases
                 the likelihood that inaccurate data are collected. DOE reported that the
                 increased reporting requirements drain agency resources and that FRPP
                 reporting should be limited to a few data elements that would allow for
                 reporting a few critical statistics describing federal properties.

                 While agency concerns have increased, effective collaboration has
                 reportedly decreased. Agency officials told us that FRPC has stopped
                 meeting as often as it did in years past, which has limited collaboration
                 opportunities. In addition, VA officials told us that they are just one voice
                 when FRPC meets to discuss data collection requirements. They said
                 that many of the agencies that are part of FRPC have very small
                 portfolios, so detailed data collection requirements are not particularly
                 burdensome. These agencies with smaller portfolios have an equal voice
                 to agencies with large property portfolios, such as VA and the Department
                 of Defense, even though agencies with large portfolios bear a much
                 greater burden when data collection requirements are added. DOE
                 officials stated that there needs to be a formal process for adding data
                 elements to collection requirements that includes collecting and formally
                 resolving agency comments on difficulties with data collection or the
                 inability to report on certain requirements accurately. Without improving
                 collaboration efforts, FRPC cannot ensure that the costs involved in
                 collecting and analyzing the data are commensurate with the benefits
                 obtained from gathering it.

Data Reporting   Even if the data were useful, we found that FRPC reports very little of
                 what it collects from the agencies. From the millions of pieces of data
                 collected from the thousands of assets reported by federal agencies to
                 the FRPP in fiscal year 2010, FRPC produced a 19-page, high-level
                 summary report. 36 In this summary report, two of the four data elements
                 listed as performance measures—condition index and mission
                 dependency—were not included in the report. In addition, the PRV
                 reported by agencies is also not included in the report. GSA officials told
                 us that some information about federal real property portfolios should not
                 be released to the public for security reasons. However, the fact that
                 FRPC does not report two data elements that it has designated as
                 performance measures raises issues with transparency and


                 36
                   See FRPC, Federal Real Property Council’s FY 2010 Federal Real Property Report: An
                 Overview of the U.S. Government’s Real Property Assets at
                 http://www.gsa.gov/portal/content/102880, accessed April 29, 2012.




                 Page 27                                              GAO-12-645 Federal Real Property
accountability. Furthermore, the amount of information that FRPC reports
compared to the extensive information it collects raises further questions
about whether FRPC is balancing the cost of collecting the data with the
benefit it provides. We have previously stated that reporting performance
information can help Congress make informed decisions and give the
taxpayers a better understanding of what the government is providing in
return for their tax dollars. 37 Better alignment between the data collected
and reported would add transparency and accountability, not only to the
federal government’s management of its property, but also on the
resources spent to collect the data.

The other two performance measures—utilization and annual operating
costs—are included in FRPC’s report. For example, the data in table 3 is
provided in the summary report, which listed the annual operating costs of
all reported underutilized properties at more than $1.5 billion dollars.

Table 3: Utilization and Annual Operating Cost Data for All Assets Reported by
FRPC in 2010

                                         Number of        Total             Annual
                                            assets   square feet     operating cost
 Not utilized                                6,700    39,645,100       $112,151,700
 Over utilized                              65,800   959,380,400      9,693,933,400
 Under utilized                             71,000   450,612,900      1,553,359,300
 Utilized                                   89,000   614,314,900      4,440,635,200
Source: GAO presentation of FRPC data.



Considering that we found inconsistencies in the way utilization and
annual operating cost data are collected and reported, the accuracy of
these data and other tables in the summary report is questionable.
Furthermore, providing decision makers with this information is
problematic. Decision makers could incorrectly use a table such as this to
estimate potential cost savings through a reduction of annual operating
costs associated with initiatives to dispose of properties that are
underutilized or not utilized.




37
  GAO/GGD-96-118.




Page 28                                              GAO-12-645 Federal Real Property
                              The federal government has taken some steps to address excess and
Although Some                 underutilized property management problems by developing the FRPP
Progress Has Been             database, among other things. However, cost savings efforts associated
                              with excess and underutilized property over the years were discontinued
Made, Federal                 and recent efforts may overstate potential savings. Although the federal
Property Management           agencies we reviewed have taken some actions to try to address excess
Is Still Challenging          and underutilized properties, long-standing challenges remain. As a
                              result, a national strategy could help the federal government prioritize
and Efforts Lack a            future management efforts.
National Strategy

Limited Progress Has Been     The federal government has made some progress in managing real
Made in Managing Excess       property since we first added this issue to our high-risk series. In a 2007
and Underutilized Federal     review of federal real property, we found that the administration at that
                              time made progress toward managing federal real property and
Property, but the Extent of   addressing some long-standing problems. 38 The 2004 executive order
Cost Savings Is Not Clear     established FRPC to develop property management guidance and act as
                              a clearinghouse for property management best practices. FRPC created
                              the FRPP database and began data collection in December 2005. As part
                              of a 2011 update to our high-risk series, we reported that the federal
                              government has also taken steps to improve real property management,
                              most notably by implementing some GSA data controls and requiring
                              agencies to develop data validation plans. 39 Prior to designating property
                              management as high risk, reliable tools for tracking property were
                              generally unavailable. Consequently, we determined that the
                              development of a database and the implementation of additional data
                              quality controls were steps in the right direction. However, on the basis of
                              our current work, it appears that data controls have not brought about
                              widespread improvements with data consistency and accuracy as was
                              anticipated. Nonetheless, we found that the FRPP can be used in a
                              general sense to track assets. For example, during our site visits, agency
                              officials were able to match assets with the real property unique




                              38
                               GAO-07-349.
                              39
                               GAO-11-278.




                              Page 29                                         GAO-12-645 Federal Real Property
identification numbers assigned to them in the FRPP database and were
able to locate even small, remote buildings using these numbers. 40

In addition to establishing FRPC, developing the FRPP, and
implementing the executive order, the previous and current
administrations have sought ways to generate cost savings associated
with improving management of excess and underutilized properties.
However, these efforts have not led to proven cost savings associated
with the management of these properties.

Cost savings goals set by the previous administration were
discontinued. In 2007, we reported that adding real property
management to the President’s Management Agenda in 2004 increased
its visibility as a key management challenge and focused greater attention
on real property issues across the government. 41 As part of this agenda,
the previous administration set a goal of reducing the size of the federal
real property inventory by 5 percent, or $15 billion, by the year 2015.
OMB staff at the time reported that there was an interim goal to achieve
$9 billion of the reductions by 2009. OMB staff recently told us that the
current administration is no longer pursuing these goals. Furthermore, the
senior real property officers of the five agencies we reviewed told us that
they were never given specific disposal targets to reach as part of these
prior disposal goals.

Cost savings associated with improved management of excess and
underutilized properties as directed in the June 2010 presidential
memorandum are unclear. OMB staff also said that while the goals of
the previous administration are no longer being pursued, the current
administration issued a memorandum that directed civilian agencies to
achieve $3 billion in savings by fiscal year 2012 through better
management of excess properties, among other things. According to the
administration’s website, as of September 2011, approximately half of the
cost savings had been achieved ($1.48 billion). Almost half of the total
goal (about $1.4 billion) is targeted to the five agencies we reviewed.
Officials from these agencies reported various cost savings measures



40
  We did not attempt to determine whether all buildings at the sites we visited had
corresponding unique identification numbers. However agency officials were able to locate
buildings using unique identification numbers.
41
 GAO-07-349.




Page 30                                                 GAO-12-645 Federal Real Property
such as selling real property, forgoing operations and maintenance costs
from disposed properties, and reducing energy costs through
sustainability efforts to achieve agency savings targets. 42 As of the first
quarter of fiscal year 2012, only two of the agencies we reviewed—GSA
and USDA—were claiming any sales proceeds from the sale of federal
real property: GSA reported $41.1 million in savings from sales proceeds
and USDA reported approximately $5.6 million. Interior officials stated
that individual sales with positive net proceeds are offset by those sales in
which the cost of the disposal (i.e., as a result of environmental
remediation and repair) is greater than any proceeds realized.
Furthermore, DOE officials reported that the disposition costs of the
properties they sold during the time frame of the memorandum were
actually greater than the proceeds. As a result, DOE has reported a net
loss of $128 million on property sales for this time period. VA also did not
include asset sales as part of its savings plan.

Four of the five agencies told us that they believe they will reach their
savings targets by the end of fiscal year 2012; however, whether they
claim to reach those goals or not, the actual and estimated savings
associated with excess and underutilized property management may be
overstated. Furthermore, agencies were not required to develop cost
savings that reflected a reduction in agency budgets. We found problems
with cost savings estimates related to excess and underutilized property
management from all five of the federal agencies we reviewed
(see table 4). 43




42
  The presidential memorandum does not require that all $3 billion in savings be obtained
from efficiencies related to excess and underutilized property; cost savings can also be
achieved through sustainability efforts such as better energy and water use that affect all
real property in an agency’s portfolio, among other things. However, for the purposes of
this report, we focused on the extent of agency actions that are taken in response to this
memorandum that affect excess and underutilized federal real property.
43
  We did not conduct a comprehensive analysis of the cost savings claimed by the five
reviewed agencies and have not evaluated the reliability of the cost savings they claim.
We spoke with agency officials about their cost savings targets and found several issues
that were of concern to us even without conducting an in-depth review of their claims. Our
concerns are detailed in table 4.




Page 31                                                  GAO-12-645 Federal Real Property
Table 4: Identified Problems with Agencies’ Cost Savings Estimates Related to Excess and Underutilized Property

Agency Cost savings projections                                             Identified problems
DOE    DOE officials stated that as of December 31, 2011, the               DOE used FRPP annual operating cost data to estimate this
       department had achieved $361 million in savings associated           savings. On the basis of our findings in this report, we believe
       with the operations and maintenance of disposed properties.          that using the FRPP data to project cost savings is
       DOE officials project that this number will reach $375 million       questionable.
       in savings by the end of fiscal year 2012.
       DOE officials stated that they counted operations and                Using this methodology, DOE would count operations and
       maintenance savings for a full year regardless of when in the        maintenance costs for an entire year, even if the property
       fiscal year the savings were realized.                               was disposed late in the fiscal year.
       DOE counted the repair needs of disposed assets as                   Using this methodology to determine cost avoidance
       approximately $133 million of its cost savings.                      assumes that all of the disposed assets would have been
                                                                            fully repaired in the years that this memorandum covers. In
                                                                            reality, agencies have limited budgets to repair and maintain
                                                                            its assets and must carefully choose which assets to repair in
                                                                            a given year. Agencies often choose not to repair assets that
                                                                            are going to be disposed because they need to use their
                                                                            limited funds to repair the assets that they regularly use.
GSA        GSA officials told us that as of December 31, 2011, they had     GSA did not provide complete information on the projected
           achieved approximately $317 million (out of the agency’s         savings that would total $450 million by the end of fiscal year
           $450 million target) and that they anticipated that the agency   2012. Furthermore, as part of its reported $317 million cost
           would reach the full target by the end of fiscal year 2012.      savings, GSA included $118.3 million for “Lease Transition to
                                                                            Federal Construction.” GSA reported that this is the result of
                                                                            an analysis of savings that would be accrued if buildings
                                                                            were constructed to replace four properties that are currently
                                                                            leased. The estimated savings were based on the present
                                                                            value of savings over a 30-year period. However, the GSA
                                                                            estimate represents savings for the entire 30-year period
                                                                            (i.e., over the life of the buildings) rather than only for the 3
                                                                            fiscal years specified in the presidential memorandum (fiscal
                                                                            years 2010 through 2012). Moreover, GSA has yet to occupy
                                                                            any of the four buildings, and it is unclear if their construction
                                                                            is under way. Thus, even if cost savings could be claimed for
                                                                            all 3 years reviewed for each building, the cost savings for
                                                                            these 3 years would be significantly lower than GSA reported
                                                                            saving.
           GSA counted repair needs as $55.7 million of its achieved        Using this methodology to determine cost avoidance
           cost savings and projects more than $30 million more by the      assumes that all of the disposed assets would have been
           end of fiscal year 2012.                                         fully repaired in the years that this memorandum covers. In
                                                                            reality, agencies have limited budgets to repair and maintain
                                                                            their assets and must carefully choose which assets to repair
                                                                            in a given year. Agencies often choose not to repair assets
                                                                            that are going to be disposed because they need to use their
                                                                            limited funds to repair the assets that they regularly use.
Interior   Interior officials stated that they had saved $78 million in     In March 2012, Interior officials told us that they had not
           operations and maintenance costs from disposed properties        subtracted the disposal costs or taken into consideration
           as of September 30, 2011.                                        replacement costs of the disposed assets. Once these costs
                                                                            were considered, Interior officials stated that their net savings
                                                                            were only $8.3 million.




                                              Page 32                                                      GAO-12-645 Federal Real Property
Agency Cost savings projections                                               Identified problems
       Interior officials stated that although they will fall short of the    Interior counted $4.2 million of innovations savings from
       original projections related to the operations and                     capital investment projects the department had canceled.
       maintenance costs of disposed properties, they will still              Interior plans to count the funds that would have been spent
       achieve their disposal target through higher-than-expected             on these projects as cost savings toward the presidential
       innovations savings (more than $40 million higher than they            memorandum targets even though Interior used these funds
       had previously projected).                                             for other projects. In addition, Interior counted $20.1 million in
                                                                              savings toward the presidential memorandum based on
                                                                              volunteer work (Interior valued volunteer hours at $21.86 per
                                                                              volunteer hour). This volunteer work is a normal part of
                                                                              Interior’s business and does not reflect any new initiative as a
                                                                              result of the memorandum. Furthermore, Interior reported
                                                                              more than $20 million in innovations savings from eliminated
                                                                              operations and maintenance costs from disposed or
                                                                              transferred assets. Interior used FRPP annual operating cost
                                                                              data to estimate this savings. On the basis of our findings in
                                                                              this report, we believe that using FRPP data to project cost
                                                                              savings is questionable.
VA        In February 2012, we reported that VA assumed that it would VA did not account for the time necessary to implement this
          achieve savings of nearly $14 million through a reduction in        initiative—that is, the time it would take the department to
          leased space in fiscal year 2012 by increasing the number of increase the number of employees who telework frequently,
                                                    a
          employees who telework frequently.                                  put in place office-sharing arrangements, and subsequently
                                                                              reduce the amount of leased space.
          We reported that as of January 2012, VA officials said that         This would result in lower savings than VA estimated.
          they had not reduced the amount of space it leases and does
          not expect to achieve the space reductions necessary to
          achieve estimated savings in this area until the end of fiscal
                        b
          year 2012.
          VA officials told us that other estimated cost savings related VA was not able to demolish or mothball many of the
          to excess and underutilized property management will not            buildings it identified as vacant or underutilized, as it had
                                                                                                                       c
          occur before the end of fiscal year 2012.                           planned, particularly larger buildings.
          VA expects that it will make up these missed targets through While these savings could be considerable, they would
          higher-than-expected savings from energy and sustainability encompass more than $60 million of VA’s $80 million savings
          initiatives that affect all VA property.                            target, which means that very little of VA’s cost savings
                                                                              associated with the memorandum would relate to addressing
                                                                              excess and underutilized property.
USDA      As of September 2011, USDA officials estimated that they            USDA based this figure on estimates using PRV. As discussed
          would receive more than $40 million of actual cost savings          previously, the PRV is not the market value of these assets, nor
          (out of the agency’s $300 million target) from proceeds from is it the sales price of the asset. USDA officials found that these
          the sale of assets in fiscal years 2010 and 2011.                   sales actually totaled approximately $5.6 million and they had to
                                                                              adjust their estimates accordingly.
          USDA officials stated that they counted operations and              Using this methodology, USDA would count operations and
          maintenance savings for a full year regardless of when in the maintenance costs for an entire year, even if the lease was
          fiscal year the savings were realized. USDA officials stated        closed late in the fiscal year.
          that it is difficult to project the date of when a lease will close
          and savings will begin, but they acknowledged that USDA’s
          estimated savings assumed that all closures occurred in
          quarter one of the fiscal year.
                                               Source: GAO analysis of agency information.
                                               a
                                                GAO, VA Health Care: Methodology for Estimating and Process for Tracking Savings Need
                                               Improvement, GAO-12-305 (Washington, D.C.: Feb. 27, 2012).
                                               b
                                                GAO-12-305.
                                               c
                                                The VA Handbook defines mothballing as abandoning a building but maintaining a minimal level of
                                               heating and cooling. This also includes blocking entryways, avoiding vandalism, and ensuring
                                               building integrity. See VA, Managing Underutilized Real Property, Including Disposal, Handbook 7633
                                               (Washington D.C.: Apr. 18, 2006).



                                               Page 33                                                       GAO-12-645 Federal Real Property
                          OMB staff has not provided information to support projected cost
                          savings if CPRA is enacted. In addition to the expected savings
                          resulting from the June 2010 presidential memorandum, OMB staff
                          reported that CPRA—the legislation the administration has proposed to
                          address real property management obstacles—will result in $4.1 billion in
                          savings within 10 years following enactment from sales proceeds as well
                          as unspecified savings from operating costs and efficiencies. However,
                          the CPRA projections may not reflect true cost savings. OMB staff did not
                          provide a methodology, calculations, or any other basis for its stated
                          projections. Furthermore, CBO concluded that CPRA would probably not
                          result in a significant increase in proceeds from the sale of federal
                          properties over the next 10 years. 44 CBO noted that the Department of
                          Defense holds about one-third of the excess properties. CPRA would
                          have no effect on these properties, because the proposal only applies to
                          civilian agencies. Furthermore, CBO estimated that implementing CPRA
                          would cost $420 million over the 2012 through 2016 period to prepare
                          properties for sale or transfer. The President’s fiscal year 2013 budget
                          requested $17 million to implement CPRA (if it is enacted) and $40 million
                          to establish an Asset Proceeds and Space Management Fund to facilitate
                          the disposal process intended to reimburse agencies for some necessary
                          costs associated with disposing of property. This amount is far short of
                          the $420 million that CBO projected would be needed to prepare
                          properties for sale or transfer within a 4-year period. 45


Federal Agencies Have     Despite problems with data collection and national cost savings goals, we
Made Progress but Still   found that agencies have taken steps to address excess and
Face Long-standing        underutilized properties in their portfolios. For example, all five agencies
                          we reviewed have taken steps to use property more efficiently, as follows:
Challenges



                          44
                            Letter from Douglas W. Elmendorf, Director, Congressional Budget Office, to Darrell E.
                          Issa, Chairman, Committee on Oversight and Government Reform, U.S. House of
                          Representatives, responding to Chairman Issa’s request for the Congressional Budget
                          Office to analyze the President’s legislative proposal to expedite the disposal of federal
                          civilian real property, June 27, 2011.
                          45
                            While CBO questioned the proceeds that would be obtained through property sales,
                          CBO did report in its analysis that CPRA could result in additional properties being
                          disposed of in other ways that would reduce the need for future appropriated funds to
                          maintain them.




                          Page 34                                                  GAO-12-645 Federal Real Property
•    Identifying underutilized assets to meet space needs. VA officials told
     us that they implemented a process to identify vacant and
     underutilized assets that they could use to meet space needs. In
     addition, VA officials stated that the department is planning to reuse
     currently utilized assets that will be available in the future. VA officials
     added that they have identified 36 sites that include 208 buildings and
     more than 600 acres that they can use to provide more than 4,100
     units of homeless and other veteran housing.

•    Consolidating offices among and within agencies. USDA and Interior
     signed a memorandum of understanding in November 2006 that
     allows the agencies to colocate certain operations and use their
     buildings more efficiently. The memorandum of understanding
     enables the agencies to share equipment and space. In addition,
     USDA closed laboratories at four locations and consolidated
     operations with existing USDA sites. In its National Capital Region,
     USDA has consolidated five separate leased locations, totaling
     363,482 square feet, into one location at Patriot’s Plaza in
     Washington, D.C. USDA reported that the consolidation into Patriot’s
     Plaza will result in annual rent savings of about $5.6 million. DOE
     officials also stated that the department encourages offices to
     consolidate operations when it is cost effective to do so. The
     department also increased the use of an office building at the
     Lawrence Livermore National Laboratory from 22 percent to 100
     percent by changing its use from office space to a building that
     houses computers. Furthermore, VA consolidated its medical center
     campuses in Cleveland, Ohio, and engaged a number of private
     partners directly to reuse the unneeded sites, using its Enhanced Use
     Lease authority. 46

•    Reducing employee work space. To use space more efficiently,
     Interior reduced new space utilization per employee from 200 usable
     square feet per person to 180 usable square feet per person. This
     action decreased total new space by 10 percent in all areas including
     employee work space and conference space.




46
  We have work under way that examines how some civilian agencies, as one tool to
enhance use of federal real property, are using their authority to enter into Enhanced Use
Leases—long-term agreements with nonfederal entities for the use of excess or
underutilized federal property in exchange for cash or other considerations.




Page 35                                                  GAO-12-645 Federal Real Property
•   Using operations and maintenance charges to reduce operating costs
    and encourage efficient use of space. DOE officials reported that
    several sites servicing multiple programs or performing work for
    others have developed a space charge system whereby a site
    charges tenants for the operations and maintenance of the square
    footage they occupy on a square foot basis. This charge defrays
    operations and maintenance costs associated with the site and
    encourages tenants to minimize their own space use.

•   Transferring unneeded property to other entities. Interior officials have
    disposed of excess properties by transferring them to other
    organizations to use. For example, Interior officials reported that the
    department donated a freezer building and a laboratory building at the
    Woods Hole Science Center in Falmouth, Massachusetts to the
    Woods Hole Oceanographic Institution. The department also
    transferred buildings and land at a Corbin, Virginia site to the National
    Oceanic and Atmospheric Administration.

•   Creating alternate uses for unused assets. GSA found an alternate
    use for 400,000 square feet of a concrete slab that remained after
    demolishing an excess building. When needed, GSA leases the slab
    to the Federal Emergency Management Agency as outdoor storage
    space for electric generators and other heavy equipment and as a
    staging area for equipment during responses to disasters (see fig. 10).




Page 36                                         GAO-12-645 Federal Real Property
Figure 10: Alternate Use of a Concrete Slab by GSA




•    Using telework and hoteling work arrangements. 47 All five agencies
     we reviewed require or allow employees to use alternate work
     arrangements such as teleworking or hoteling, when feasible, to more
     efficiently use space. For example, GSA instituted a pilot hoteling
     project at the Public Building Service headquarters in Washington,
     D.C., to reduce needed space.

Progress notwithstanding, agencies still face many of the same long-
standing challenges we have described since we first designated real
property management as a high-risk area.

Agency disposal costs can outweigh the financial benefits of
property disposal. USDA officials reported that the costs of disposing of
real property can outweigh savings that result from building demolition



47
  Hoteling is a work arrangement in which employees work in multiple sites and use
nondedicated, nonpermanent work spaces assigned for use by reservation on an as
needed basis thus reducing needed space.




Page 37                                                GAO-12-645 Federal Real Property
and that limited budgetary resources create a disincentive to property
disposal. USDA determined that the total annual cost of maintaining
1,864 assets with annual operating costs less than $5,000 was $3 million.
Conversely, USDA concluded that the disposal costs for these assets
equals or exceeds their annual operating cost of $3 million. Thus,
disposal of the assets would not result in immediate cost savings, and
USDA has not demolished the assets. In addition, Interior officials
reported that numerous National Park Service buildings acquired during
the planning for a Delaware River dam that was never built are excess, as
are many cabins and houses along the Appalachian Trail. Because
Interior is not spending any operations and maintenance on these assets,
disposing of them would not provide savings to the department. As a
result, Interior has made a business decision to only fund a small
percentage of these disposals at the Delaware River dam site.

Legal requirements—such as those related to preserving historical
properties and the environment—can make the property disposal
process lengthy according to agency officials. Meeting requirements
associated with historical properties can delay or prevent disposal of
excess buildings. 48 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. 49 For example, VA officials reported that they are unable to
dispose of a 15,200-square-foot building at Menlo Park, California that
has been used as both a residence and a research building during its 83-
year history. The building has been scheduled for demolition since 2001,
but VA cannot demolish it because of a historical designation. In addition,
in 2010, Interior canceled the disposal of a 95-square-foot stone property
that we visited because it was found eligible for historic designation. The
property is in poor condition and has not been used for many years, but
Interior officials told us that they are now planning to stabilize and restore
the structure (see fig. 11).




48
 We have work under way that examines these challenges in more detail.
49
 16 U.S.C. §§ 470f, 470h-2.




Page 38                                              GAO-12-645 Federal Real Property
Figure 11: Interior Property No Longer Slated for Demolition because of Historic
Designation Challenges




Environmental requirements can also complicate disposal. Under the
National Environmental Policy Act, as amended, agencies are required to
consider the environmental impact of their decisions to dispose of
property; 50 landholding agencies are responsible for supervising
decontamination of excess and surplus real property that has been
contaminated with hazardous materials of any sort. 51 However, required
environmental assessments and remediation of unneeded property can
be expensive and time consuming. For example, DOE officials reported
that most of the agency’s excess buildings will be costly to demolish
because of radiological contamination. DOE is responsible for


50
  Pub. L. No. 91-190, 83 Stat. 852 (Jan. 1, 1970), codified as amended at 42 U.S.C.
§§ 4321-4347 (2011).
51
 41 C.F.R. § 102-75.955.




Page 39                                                 GAO-12-645 Federal Real Property
                                       remediation of contaminated nuclear weapons manufacturing and testing
                                       sites that include thousands of excess buildings contaminated with
                                       radiological or chemical waste. DOE officials reported that because their
                                       decontamination and disposal funds are limited, they might not be able to
                                       dispose of these buildings for many years (see fig. 12).

Figure 12: Vacant DOE Property with Radiological Contamination




                                       GSA officials reported that environmental contamination of properties is a
                                       significant challenge to their property disposal efforts. For example,
                                       environmental contamination has delayed disposal of a GSA site, that we
                                       visited, until at least 2015. This 435 acre site is a former Department of
                                       Defense storage site that includes abandoned warehouses, steel sheds,
                                       and concrete pier foundations, among other structures. The site is
                                       contaminated with low level radioactivity and unexploded munitions. GSA
                                       officials told us that they are working with state officials and the Department
                                       of Defense to identify the contamination at the site and plan remedial
                                       actions (see fig. 13).




                                       Page 40                                          GAO-12-645 Federal Real Property
Figure 13: Abandoned and Contaminated GSA Property




                                     Stakeholder interests can conflict with property disposal or reuse
                                     plans. VA officials reported that they have been unable to dispose of
                                     buildings in part because local interests are opposed to the department’s
                                     disposal plans. In 2006, VA announced a decision to pursue an enhanced
                                     use lease on approximately 30 acres of the 56.5 acre St. Albans, New
                                     York campus. Under the terms of the lease, a private partner would
                                     construct a nursing home and domiciliary and outpatient clinic buildings
                                     with all needed equipment and furnishings in exchange for development
                                     rights to the remaining acreage at the site. In 2010, VA selected a
                                     developer to operate and maintain state-of-the-art buildings and leased
                                     land for the duration of the lease. However, VA officials reported that
                                     because of opposition to their plans from local organizations, they
                                     canceled the disposal and lease plans for the site. GSA officials also
                                     reported that local stakeholder interests have delayed conveyance of a
                                     federal building in Portland, Oregon. The Department of Education plans
                                     to use the building for educational activities beneficial to the community.
                                     However, the officials received a request from the city of Portland that
                                     certain offices that were already located in the building remain in
                                     downtown Portland. GSA is attempting to find suitable space for these
                                     offices in downtown Portland so that it can convey the building to the
                                     Department of Education.

                                     Locations of some federal properties can make property disposal
                                     and reuse difficult. DOE officials reported that they demolish most
                                     excess buildings rather than sell or reuse them, because the department



                                     Page 41                                        GAO-12-645 Federal Real Property
                            must locate buildings in remote areas that include acreage that can serve
                            as security and environmental buffer zones for nuclear-related activities.
                            Likewise, Interior officials reported that most of their buildings are located
                            on public domain lands, lands held in trust, or in remote or inaccessible
                            areas. Furthermore, VA officials reported that most of their buildings are
                            located on medical center campuses. All three agencies reported that
                            because excess buildings located on federal land are not easily
                            accessible or cannot be sold to nongovernment entities, sales or
                            conveyances of these buildings can be prevented. Interior officials
                            reported that the department spends significant resources to eliminate the
                            nongovernment ownership of parcels of land within the boundaries of
                            public domain lands, so selling properties on the land, even if it were
                            legal, would contradict the goal of the department. Often, the only option
                            they have is to remove buildings or structures, which in many cases, are
                            cost prohibitive. For example, Interior officials reported that many former
                            privately owned fishing camps and recreation sites at Voyageurs National
                            Park in Minnesota are in remote locations that make their removal difficult
                            and cost prohibitive.


A National Strategy Could   Nine years after we designated the issue of managing federal real
Guide Improvement           property as high-risk, and numerous efforts to address it, the federal
Efforts                     government still faces many of the same long-standing challenges. We
                            previously reported that complex interagency and intergovernmental
                            efforts can benefit from developing a national strategy; however, a
                            comprehensive national strategy has not been developed to address the
                            excess and underutilized property problem. 52 Given the complexities of
                            issues related to excess and underutilized federal real property
                            management, unsuccessful implementation of cost savings efforts across
                            administrations, and the issues that still remain with data reporting, we
                            believe that a national strategy could provide a clear path forward to help
                            federal agencies manage excess and underutilized property in the long
                            term. A national strategy can guide federal agencies and other
                            stakeholders to systematically identify risks, resources needed to address
                            those risks, and investment priorities when managing federal portfolios.
                            Without a national strategy, the federal government may be ill-equipped
                            to sustain efforts to better manage excess and underutilized property.


                            52
                              GAO, Biosurveillance: Efforts to Develop a National Biosurveillance Capability Need a
                            National Strategy and a Designated Leader, GAO-10-645 (Washington, D.C.:
                            June 30, 2010).




                            Page 42                                                 GAO-12-645 Federal Real Property
In 2004, we identified a set of six desirable characteristics to aid
responsible parties in developing and implementing national strategies to
guide senior policy decision makers and to better ensure accountability. 53
Table 5 provides a summary of these six characteristics.

Table 5: Desirable Characteristics for a National Strategy, from Conception to
Implementation

 Desirable characteristic             Description
 Purpose, scope, and methodology      Addresses why the strategy was produced, the
                                      scope of its coverage, and the process by which it
                                      was developed
 Problem definition and risk          Addresses the particular national problems the
 assessment                           strategy is directed toward
 Goals, subordinate objectives,       Addresses what the strategy is trying to achieve
 activities, and performance          and steps to achieve those results, as well as the
 measures                             priorities, milestones, and performance measures
                                      to gauge results
 Resources, investments, and risk     Addresses what the strategy will cost, the sources
 management                           and types of resources and investments needed,
                                      and where resources and investments should be
                                      targeted based on balancing risk reductions with
                                      costs
 Organizational roles,                Addresses who will be implementing the strategy,
 responsibilities, and coordination   what their roles will be compared with those of
                                      others, and mechanisms for them to coordinate
                                      their efforts
 Integration and implementation       Addresses how a national strategy relates to other
                                      strategies’ goals, objectives, and activities, and to
                                      subordinate levels of government and their plans
                                      to implement the strategy
Source: GAO analysis.



Such a national strategy could help the federal government make
progress on managing excess and underutilized properties in the
following ways, among others:

•     Defining the scope of the coverage of national efforts to deal with
      properties managed by federal agencies could help keep efforts
      focused on issues that lend to governmentwide efforts, as opposed to
      those that are better left to each agency to manage.


53
  See GAO, Combating Terrorism: Evaluation of Selected Characteristics in National
Strategies Related to Terrorism, GAO-04-408T (Washington, D.C.: Feb. 3, 2004).




Page 43                                                 GAO-12-645 Federal Real Property
              •   Defining the problem and assessing the risks could help ensure that
                  agencies are prioritizing their efforts to manage excess and
                  underutilized properties in the most efficient manner.

              •   Clearly addressing what a strategy for managing federal properties is
                  meant to achieve could help FRPC develop effective performance
                  measures and evaluate whether current performance measures and
                  data elements are necessary for meeting nationwide performance
                  goals.

              •   Addressing the cost, sources, and type of resources and investments
                  needed could help FRPC measure the costs of collecting data and
                  ensuring that it is commensurate with the benefits received from the
                  collected data.

              •   Clearly outlining roles and developing an effective mechanism for
                  coordination can ensure that effective collaboration is taking place
                  between FRPC and federal agencies, particularly when new data
                  collection requirements are implemented.

              •   Addressing how the national strategy relates to agencies’ individual
                  goals and management strategies can ensure that the national
                  strategy provides the guidance agencies need to better manage their
                  portfolios.


              The federal government has made some progress in managing real
Conclusions   property since it was first added to our high-risk series. The FRPC
              created the FRPP database to track federal property and the federal
              agencies we reviewed have taken some actions to address excess and
              underutilized property. Even with long-standing efforts to improve the
              management of excess and underutilized properties and save costs,
              federal agencies continue to face many of the same challenges that we
              have reported for over a decade. The problems still facing the federal
              government in this area highlight the need for a long-term,
              comprehensive national strategy to bring continuity to efforts to improve
              how the federal government manages its excess and underutilized real
              property and improve accountability for these efforts. Such a strategy
              could lay the framework for addressing the issue of inconsistent and
              inaccurate data on excess and underutilized federal properties. We
              continue to believe that consistent and accurate data on federal real
              property are necessary for the federal government to effectively manage
              real property. While the 2004 executive order charged the Administrator



              Page 44                                         GAO-12-645 Federal Real Property
                      of GSA, in consultation with FRPC, to develop the data reporting
                      standards for the FRPP database, the current standards have allowed
                      agencies to submit data that are inconsistent and therefore not useful as
                      a measure for comparing performance inside and outside the federal
                      government. Also, the current definitions of certain data elements could
                      perpetuate confusion on the nature of federal government properties. For
                      example, the FRPP data element, PRV, is commonly referred to as an
                      asset’s “value,” which can cause decision makers to make assumptions
                      about the worth of the asset even though the PRV cannot be accurately
                      used in this way. Moreover, many agencies do not have the resources to
                      collect data at the asset level, and the information that is reported in order
                      to meet requirements for asset-level data is likely conveying an
                      inaccurate picture of excess and underutilized property. Furthermore,
                      federal government agencies have vastly different uses for properties,
                      and it may be challenging to collect certain kinds of property management
                      data using a single database. This makes it difficult for decision makers to
                      understand the scope of the problem and assess potential cost savings
                      and revenue generation. Now that FRPC has had several years of
                      experience with these data, it is in a better position to refine data
                      collection requirements by identifying data that are suitable for
                      comparison in a nationwide database. Following sound data collection
                      practices could help FRPC to thoroughly evaluate and retool the FRPP so
                      that it collects and provides data that are consistent and accurate to
                      decision makers, even if this means collecting less data in the short term.
                      GSA is uniquely positioned to lead this effort because of its charge to
                      develop FRPP data reporting standards.


                      We are making two recommendations, one to the Director of OMB and
Recommendations for   one to the Administrator of GSA.
Executive Action
                      We recommend that the Director of OMB require the OMB Deputy
                      Director for Management, as chair of FRPC, in collaboration and
                      consultation with FRPC member agencies, to develop and publish a
                      national strategy for managing federal excess and underutilized real
                      property that includes, but is not limited to, the following characteristics:

                      •   a statement of purpose, scope, and methodology;

                      •   problem definition and risk assessment;

                      •   goals, subordinate objectives, activities, and performance measures,
                          including the milestones and time frames for achieving objectives;


                      Page 45                                           GAO-12-645 Federal Real Property
                     •   resources, investments, and risk management;

                     •   organizational roles, responsibilities, and coordination; and

                     •   integration and implementation plans.

                     We recommend that the Administrator of GSA, in collaboration and
                     consultation with FRPC member agencies, develop and implement a plan
                     to improve the FRPP, consistent with sound data collection practices, so
                     that the data collected are sufficiently complete, accurate, and consistent.
                     This plan should include, but not be limited to the following areas:

                     •   ensuring that all data collection requirements are clearly defined and
                         that data reported to the database are consistent from agency to
                         agency;

                     •   designating performance measures that are linked to clear
                         performance goals and that are consistent with the requirements in
                         the 2004 executive order (or seeking changes to the requirements in
                         this order as necessary);

                     •   collaborating effectively with the federal agencies that provide the
                         data when determining data collection requirements and limiting the
                         number of measures collected to those deemed essential, taking into
                         account the cost and effort involved in collecting the data when
                         determining data collection requirements; and

                     •   developing reports on the data that are collected.


                     We provided a draft of this report to OMB, GSA, VA, USDA, DOE, and
Agency Comments      Interior for review and comment. OMB did not directly state whether it
and our Evaluation   agreed or disagreed with our recommendations. OMB agreed that
                     challenges remain in the management of the federal government's excess
                     and underutilized properties; however, OMB raised concerns with some
                     of the phrasing in our report and offered further context and clarification
                     regarding the administration’s overall efforts on real property reform.
                     OMB’s comments are contained in appendix III, along with our response.
                     GSA agreed with our recommendation to improve the FRPP and
                     described actions its officials are taking to implement it. GSA also
                     partially agreed with our findings and offered some clarifications. GSA’s
                     comments are contained in appendix IV along with our response. VA
                     generally agreed with the overall message of our report, but disagreed



                     Page 46                                         GAO-12-645 Federal Real Property
with how we presented certain issues. VA’s comments are contained in
appendix V along with our response. USDA provided clarifying comments
which we incorporated, where appropriate. USDA’s comments are
contained in appendix VI. DOE provided technical clarifications, which
we incorporated where appropriate, but did not include as an appendix.
Interior did not provide comments.

OMB stated that, because our conclusion regarding the accuracy of
FRPP data is based on our sample of 26 site visits, further study is
needed to determine whether the problems we found are systemic.
However, as discussed in the report, our findings are primarily based on
the issues we identified with FRPC’s data collection practices, which are
the basis of the entire FRPP data collection process and are thus
systemic. The 26 sites that we visited complement those findings and
illustrate how poor data collection practices affect data submissions;
however, they are not the only basis for our findings. Furthermore, OMB
stated that the administration has a strategy for improving the
management of federal real property that serves as an important
foundation for the national strategy we recommend in this report. While
the initiatives OMB described may represent individual, positive steps, we
do not believe that they fully reflect the key characteristics of a cohesive
national strategy. A national strategy would improve the likelihood that
current initiatives to improve real property management will be sustained
across future administrations. A more detailed discussion of our views on
OMB’s comments can be found in appendix III.

GSA stated that our report correctly identifies many of the problems that
hampered effective FRPP data collection in 2011. According to GSA, it
has taken specific actions to begin addressing our recommendation,
including modifying FRPC guidance to the agencies to clarify report
definitions and proposing reforms of the collection process to FRPC
consistent with our recommendation. GSA also offered a few
clarifications on our findings. GSA stated that it was unclear whether the
examples of inconsistencies we discuss in our report are systemic. As
noted, our findings are primarily based on the problems we found with the
overall data collection process. Thus, our recommendation to GSA
involves adopting sound data collection practices. In addition, GSA
stated that, because FRPP data is reported annually, property utilization
and condition may change from the time that information is submitted.
However, we took steps, including discussing the history of each property
with local property managers, to ensure that any inconsistencies we
found were not due to changes between the time data was reported and




Page 47                                         GAO-12-645 Federal Real Property
the time we visited the building. These steps and a more detailed
discussion of our views on GSA’s comments can be found in appendix IV.

VA generally agreed with our findings and provided additional information
on VA’s federal real property portfolio, their methods of reporting real
property data, and efforts the department is taking to address its excess
and underutilized properties. However, VA disagreed with some of our
statements related, for example, to property utilization. A more detailed
discussion of our views on VA’s comments can be found in appendix V.
In addition, USDA provided comments and clarifications which we
incorporated, where appropriate. For example, USDA clarified its
previous statement regarding utilization reporting to emphasize that
component agencies are directed to follow FRPC guidance, but
acknowledged that this guidance was inconsistent. USDA also clarified a
previous statement regarding problems faced by the agency when
reporting FRPP data in 2011. USDA’s comments can be found in
appendix VI.

We are sending copies of this report to the Director of OMB; the
Administrator of GSA; and the Secretaries of Energy, Interior, Veterans
Affairs, and Agriculture. Additional copies will be sent to interested
congressional committees. We will also make copies available to others
upon request, and the report is available at no charge on the GAO
website at http://www.gao.gov.

If you have any questions about this report, please contact me at
(202) 512-5731 or wised@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. Major contributors to this report are listed in appendix VII.

Sincerely yours,




David Wise
Director
Physical Infrastructure Issues




Page 48                                         GAO-12-645 Federal Real Property
Appendix I: Objectives, Scope, and
              Appendix I: Objectives, Scope, and
              Methodology



Methodology

              Our objectives were to determine to what extent (1) the Federal Real
              Property Profile (FRPP) database consistently and accurately describes
              the nature, use, and extent of excess and underutilized federal real
              property, and (2) progress is being made toward more effectively
              managing excess and underutilized federal real property. We identified
              five civilian real property-holding agencies for our review: the General
              Services Administration (GSA); the Departments of Energy (DOE), the
              Interior (Interior), and Veterans Affairs (VA); and the U.S. Department of
              Agriculture (USDA). We chose GSA, DOE, Interior, and VA because
              these were the four largest agencies in terms of total building square
              footage of all civilian real property agencies that are required to submit
              data under the executive order. 1 On the basis of the data available, these
              five agencies report approximately two-thirds of the building square
              footage reported by civilian agencies. We did not consider agencies in the
              Department of Defense because we previously reported on the
              department’s excess facilities. 2 We added USDA to our list of selected
              agencies because USDA reported more excess properties than any other
              civilian agency in 2009. 3

              To determine to what extent the FRPP database described the nature,
              use, and extent of excess and underutilized federal real property, we
              obtained and analyzed FRPP data submissions and other real property
              data from the five selected agencies; interviewed real property officers at
              these agencies; visited sites where the agencies had reported excess or
              underutilized properties; interviewed Office of Management and Budget
              (OMB) staff; and reviewed FRPC guidance and other documents related
              to the agencies’ real property data and the FRPP database. We obtained
              the agencies’ FRPP data submissions for fiscal years 2008 through 2010.
              According to our conversations with agency officials, FRPP submissions



              1
               Based on the square footage reported by GSA in 2009. See GSA Office of
              Governmentwide Policy, FY 2009 Federal Real Property Statistics at
              http://www.gsa.gov/portal/content/102880, last accessed March 2, 2012. At the time of
              selection, the 2010 statistical report had not been released.
              2
               GAO-11-814.
              3
               In May 2011, the administration posted an interactive map of excess federal properties
              on its website. See http://www.whitehouse.gov/issues/fiscal/excess-property-map, last
              accessed February 27, 2012. OMB told us that this map was created from the list of
              excess properties submitted to the FRPP database in 2009. The data from this map
              showed that USDA has greater than 2000 more properties than the civilian agency with
              the next highest number.




              Page 49                                                 GAO-12-645 Federal Real Property
Appendix I: Objectives, Scope, and
Methodology




can only be changed by the agency submitting the data. As a result, we
believe that the FRPP submissions obtained from the agencies match the
data contained in the FRPP database and are sufficiently reliable for the
purpose of evaluating the consistency and accuracy of the FRPP
database. In addition, for select data elements, we obtained real property
data from the source databases that each agency uses to generate its
annual FRPP submissions. We obtained source system data to get the
actual percentage of utilization of each property as of the date when
these data were extracted and provided to us in September or October of
2011. For the years of our FRPP data review (fiscal years 2008 through
2010), agencies were only required to report utilization using four
categories: overutilized, utilized, underutilized, or not utilized. However,
the FRPP guidance stated that agencies should maintain the actual
percentage of utilization in their own systems for audit purposes. 4

We posed questions to senior real property officers at the five agencies
about the collecting and reporting of real property data. To gather detailed
examples of excess and underutilized properties and to learn about the
processes by which data on such properties are collected and submitted
to the FRPP database, we visited sites where the five agencies had
reported excess or underutilized properties. We selected these sites
using information from the agencies’ FRPP submissions. To narrow our
scope, we chose only federally owned buildings for our visits. Using the
most recent FRPP submissions we had at the time (fiscal year 2010), we
selected a nonprobability sample of owned buildings for each agency that
were listed as excess (on the status indicator data element) or
underutilized (on the utilization data element), or both. Because VA did
not classify any of their owned buildings as “excess,” we also selected VA
buildings classified as “not utilized.” 5 Because this is a nonprobability
sample, observations made at these site visits do not support
generalizations about other properties described in the FRPP database or



4
 Beginning in fiscal year 2011, agencies were required to submit the actual utilization
percentage for buildings that require a utilization submission.
5
 VA defined “excess” differently than the other agencies we reviewed. Unless VA was
ready to turn a building over to GSA to be disposed, it did not list the building as excess,
and in its fiscal year 2010 submission it did not record any agency-owned buildings as
excess. Because we still wanted to see VA properties not in use, we selected VA
properties listed as “not utilized” (on the utilization data element) and treated these in the
same way as properties listed as “excess” (on the status indicator data element) by the
other four agencies.




Page 50                                                     GAO-12-645 Federal Real Property
Appendix I: Objectives, Scope, and
Methodology




about the characteristics or limitations of other agencies’ real property
data. Rather, the observations made during the site visits provided
specific, detailed examples of issues that were described in general terms
by agency officials regarding the way FRPP data is collected and
reported. We focused on sites clustered around four cities: Washington,
D.C.; Dallas, Texas; Los Angeles, California; and Oak Ridge, Tennessee.
This strategy afforded both geographic diversity and balance among our
selected agencies while also accommodating time and resource
constraints. In selecting sites and buildings in and around these four
cities, we took into account the following factors:

•   We prioritized sites that had multiple excess and/or underutilized
    properties. This allowed us to see more properties in a limited amount
    of time.

•   We prioritized the selection of excess and/or underutilized properties
    that fell into one of the five types of real property uses required to
    submit utilization data in 2010—offices, warehouses, hospitals,
    laboratories, and housing. However, we also selected some buildings
    classified as “other,” particularly buildings that were large or that had
    high reported values. 6

•   We attempted to balance the numbers of excess and underutilized
    buildings we selected. (Some buildings were classified as both excess
    and underutilized since these classifications are made in different data
    elements in FRPP.)

•   We attempted to visit four or five sites from each of the five different
    agencies. 7 However, most GSA sites consisted of only one building,
    so we selected more sites for GSA. In the end, we selected four sites
    from each of Interior and USDA, five from each of DOE and VA, and
    eight from GSA. In all, we selected 26 sites.



6
 One of our site visits was a return to a property that we had visited for a 2011 testimony
on federal real property. For that testimony, we visited properties that had been listed on
the White House website as excess. At that time, local agency officials were puzzled as to
why some utilized properties were listed as excess. Since we later found out that this
information was based on the 2009 list of excess properties, we visited those properties
again to follow up on the data submissions of those properties.
7
 We did not select properties to support comparisons among agencies in the reliability of
their data, nor do we make any such comparisons.




Page 51                                                  GAO-12-645 Federal Real Property
Appendix I: Objectives, Scope, and
Methodology




Whereas we selected sites based in large part on the numbers and kinds
of buildings they had, the exact set of buildings we visited at each site
depended on additional factors. At some sites, there were too many
excess and underutilized properties to see them all. In those
circumstances, we prioritized large buildings with high reported values
and tried to see a number of different kinds of buildings (e.g., a mix of
offices and warehouses). At several sites, local property officials identified
other properties with issues related to excess and underutilized property
that we toured and analyzed.

Prior to each site visit, we analyzed the FRPP data submissions for fiscal
years 2008 through 2010 and agencies’ source system data we obtained
in September or October 2011, and developed questions about the data
submissions for local property managers. During our site visits, we
interviewed local property managers and compared what we observed at
each building with the FRPP data for that building. When not restricted by
security concerns, we photographed the building. In addition to questions
about individual properties, we questioned the local officials about the
kind of data they collect on the properties and how they collect it.

To summarize inconsistencies and inaccuracies between our
observations at the properties we visited and the FRPP data for those
properties, we analyzed 2008 through 2010 FRPP data for all of the
properties. As part of this review, we checked the reported utilization,
condition index, value, and annual operating costs for each building for all
three years. Four analysts, working together, evaluated these data both
for inaccuracies (cases where the data clearly misrepresented the actual
utilization, condition, value, or annual operating costs of a property) and
for year-to-year inconsistencies (cases where reported values showed
large year-to-year changes that did not correspond to observable
changes in the property and that agency officials could not explain). Each
of the 26 sites was counted as having a problem on a given data element
if at least one inconsistency or inaccuracy was identified for that element. 8
The four analysts discussed each case and arrived at a consensus as to
whether a problem existed in each data element for each site.



8
 For the purpose of our review, we defined an inconsistency as a fluctuation of 20 percent
or greater for data reported from one year to another and for which local agency officials
were unable to provide an explanation for such a significant change. We defined an
inaccuracy as a data error that clearly misrepresented the actual utilization, condition,
value, or annual operating costs of a property.




Page 52                                                  GAO-12-645 Federal Real Property
Appendix I: Objectives, Scope, and
Methodology




To determine the progress being made toward more effective
management of federal excess and underutilized real property, we asked
the senior real property officers at each of our selected agencies to
provide written responses to a standard list of questions. These questions
addressed management issues related to excess and underutilized
owned buildings, how FRPP data are reported, and progress the agency
is making toward sales and utilization goals set by the OMB. We analyzed
the written responses to our questions and reviewed supporting
documentation provided by agency officials such as regulations, policies,
and other documents. In addition to reviewing the written responses to
our questions, we reviewed a number of our previous reports and
pertinent reports by the Federal Real Property Council (FRPC), the
Congressional Budget Office, and the Congressional Research Service.
We also reviewed and analyzed federal laws relating to real property for
the major real property-holding agencies.

Because OMB chairs FRPC and has set cost savings goals related to
federal real excess and underutilized properties, we analyzed documents
related to these goals—including the 2004 executive order, the June 2010
presidential memorandum on “Disposing of Unneeded Federal Real
Estate,” and legislation proposed by the administration known as the
Civilian Property Realignment Act (CPRA). We also interviewed
knowledgeable OMB staff about agency-specific targets related to the
June 2010 presidential memorandum, the methodology used to project
potential cost savings if CPRA were to be enacted, and progress toward
costs savings goals set by the previous administration.

We conducted this performance audit from May 2011 to June 2012 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.




Page 53                                       GAO-12-645 Federal Real Property
Appendix II: Federal Real Property Council
                                  Appendix II: Federal Real Property Council
                                  Fiscal Year 2010 Inventory Data Elements and
                                  Descriptions


Fiscal Year 2010 Inventory Data Elements
and Descriptions

Data
element
number    Data element name    Data element definition
1         Real property type   Real property type indicates the asset as land, building, or structure.
2         Real property use    Real property use indicates the asset’s predominant use as land, building, or structure.
                        a
3         Legal interest       The legal interest indicator is used to identify a real property asset as being owned by the
                               federal government, leased to the federal government (i.e., as lessee), or otherwise managed
                               by the federal government. Otherwise managed properties are (1) owned by a state or
                               foreign government that has granted rights for use to the federal government using an
                               arrangement other than a lease, or (2) trust entities that hold titles to assets predominantly
                               used as museums, yet may receive some federal funds to cover certain operational and
                               maintenance costs.
                 b
4         Status               Status reflects the predominant physical and operational status of the asset. Buildings,
                               structures, and land assets have one of the following attributes:
                               •    Active. Currently assigned a mission by the reporting agency.
                               •    Inactive. Not currently being used but may have a future need. Includes real property in
                                    a caretaker status (closed pending disposal; for example, facilities that are pending a
                                    Base Realignment and Closure action) and closed installations with no assigned current
                                    federal mission or function.
                               •    Excess. Formally identified as having no further program use of the property by the
                                    landholding agency.
                               •    Disposed. Required for assets that have exited the federal portfolio of assets during the
                                    current reporting period.
5         Historical status    Each asset owned or leased by the federal government (and those otherwise managed by
                               museum trusts) has one of the following historical status attributes:
                               •    National Historic Landmark
                               •    National Register listed
                               •    National Register eligible
                               •    Noncontributing element of a National Historic Landmark or National Register listed
                                    district
                               •    Evaluated, not historic
6         Reporting agency     Reporting agency refers to the federal government agency reporting the property to the
                               FRPC inventory database.
7         Using organization   Using organization refers to the predominant federal government agency or other nonfederal
                               government entity occupying the property.
8         Size                 Size refers to the size of the real property asset according to appropriate units of measure.
                               The unit of measure used for the three real property types is as follows:
                               •    For land, the unit of measure is acreage and is designated as either rural acres or urban
                                    acres.
                               •    For buildings, the unit of measure is area in square feet and is designated as gross
                                    square feet.
                               •    For structures, the unit of measure includes the size (or quantity) and unit of measure,
                                    and can include square yards, linear feet, miles, and the numbers of specific types of
                                    structures.




                                  Page 54                                                   GAO-12-645 Federal Real Property
                                      Appendix II: Federal Real Property Council
                                      Fiscal Year 2010 Inventory Data Elements and
                                      Descriptions




Data
element
number    Data element name        Data element definition
9         Utilization              Utilization is defined as the state of having been made use of, that is, the rate of utilization.
                                   The utilization rate for each of the five building predominant use categories is defined as
                                   follows:
                                   •     office: ratio of occupancy to current design capacity,
                                   •     hospital: ratio of occupancy to current design capacity,
                                   •     warehouse: ratio of gross square feet occupied to current design capacity,
                                   •     laboratory: ratio of active units to current design capacity, and
                                   •     housing: percent of individual units that are occupied.
10        Value                    Value is defined as the cost of replacing the existing constructed asset at today’s standards
                                   and is also known as plant replacement value (PRV) or functional replacement value.
11        Condition index          Condition index is a general measure of the constructed asset’s condition at a specific point
                                   in time. The condition index is calculated as the ratio of repair needs to PRV. Repair needs
                                   are the amount necessary to ensure that a constructed asset is restored to a condition
                                   substantially equivalent to the originally intended and designed capacity, efficiency, or
                                   capability. Agencies will initially determine repair needs based on existing processes, with a
                                   future goal to further refine and standardize the definition. The condition index will be
                                   reported as a “percent condition” on a scale of zero to 100 percent.
12        Mission dependency       Mission dependency is the value an asset brings to the performance of the mission as
                                   determined by the governing agency:
                                   •     mission critical: without constructed asset or parcel of land, mission is compromised;
                                   •     mission dependent, not critical: does not fit into mission critical or not mission dependent
                                         categories; and
                                   •     not mission dependent: mission unaffected.
13        Annual operating costs   Annual operating costs consist of the following:
                                   •     recurring maintenance and repair costs,
                                   •     utilities,
                                   •     cleaning and janitorial costs, and
                                   •     roads and grounds expenses
14        Main location            Main location refers to the street or delivery address for the asset or the latitude and
                                   longitude coordinates.
15        Real property unique     Real property unique identifier is a code that is unique to a real property asset that will allow
          identifier               for linkages to other information systems. The real property unique identifier is assigned by
                                   the reporting agency and can contain up to 24 alpha-numeric digits.
16        City                     The city or town associated with the reported main location in which the land, building, or
                                   structure is located.
17        State                    The state or District of Columbia associated with the reported main location in which the land,
                                   building, or structure is located.
18        Country                  The country associated with the reported main location in which the land, building, or
                                   structure is located.
19        County                   The county associated with the reported main location in which the land, building, or structure
                                   is located.
20        Congressional district   The congressional district associated with the reported main location in which the land,
                                   building, or structure is located.
21        ZIP code                 The ZIP code associated with the reported main location in which the land, building, or
                                   structure is located.




                                      Page 55                                                     GAO-12-645 Federal Real Property
                                             Appendix II: Federal Real Property Council
                                             Fiscal Year 2010 Inventory Data Elements and
                                             Descriptions




Data
element
number    Data element name              Data element definition
22        Installation/subinstallation   Installation identifier. Land, buildings or other structures, or any combination of these.
          identifier                     Examples of installations are a hydroelectric project, office building, warehouse building,
                                         border station, base, post, camp, or an unimproved site.
                                         Subinstallation identifier. Part of an installation identified by a different geographic location
                                         code than that of the headquarters installation. An installation must be separated into
                                         subinstallations and reported separately when the installation is located in more than one
                                         state or county. However, an agency may elect to separate an installation into
                                         subinstallations even if the installation is not located in more than one state or county.
23        Restrictions                   Restrictions are limitations on the use of real property and include
                                         •    environmental restrictions (cleanup-based restrictions, etc.),
                                         •    natural resource restrictions (endangered species, sensitive habitats, floodplains, etc.),
                                         •    cultural resource restrictions (archeological, historic, Native American resources, except
                                              those excluded by Executive Order 13007, Section 304 of the National Historical
                                              Preservation Act, etc.),
                                         •    developmental (improvements) restrictions,
                                         •    reversionary clauses from deed,
                                         •    zoning restrictions,
                                         •    easements,
                                         •    rights of way,
                                         •    mineral interests,
                                         •    water rights,
                                         •    air rights,
                                         •    other,
                                         •    not applicable
24        Disposition                    Agencies are required to provide all assets that have exited the federal portfolio of assets
                                         during the reporting fiscal year. This will include, but is not limited to, sales, federal transfers,
                                         public benefit conveyances, demolitions, and lease terminations. Disposition data is reported
                                         only in the year the asset has exited the federal portfolio of assets.
                                         Agencies are required to provide
                                         •    status,
                                         •    reporting agency,
                                         •    real property unique identifier,
                                         •    disposition.
                                         Agencies are also required to report
                                         •    disposition method (methods include public benefit conveyance, federal transfer, sale,
                                              demolition, lease termination, or other),
                                         •    disposition date,
                                         •    disposition value (the PRV for public benefit conveyances, federal transfers, demolitions,
                                              and other dispositions; the sales price for sales; and the government’s cost avoidance for
                                              lease terminations),
                                         •    net proceeds (the proceeds received as part of assets disposed through sales and
                                              termination of leases minus the disposal costs incurred by the agency), and
                                         •    recipient (the name of the federal agency or nonfederal recipient that received the
                                              property through public benefit conveyance or federal transfer).




                                             Page 56                                                      GAO-12-645 Federal Real Property
                                 Appendix II: Federal Real Property Council
                                 Fiscal Year 2010 Inventory Data Elements and
                                 Descriptions




Data
element
number    Data element name   Data element definition
25        Sustainability      Sustainability is reported for building assets, is optional reporting for structures, and is not
                              reported for land and reflects whether or not an asset meets the sustainability criteria set forth
                              in Section 2 (f) (ii) of Executive Order 13423. To be considered sustainable and report “yes,”
                              the asset must meet the five Guiding Principles for High Performance and Sustainable
                              Buildings or be third-party certified as sustainable by an American National Standards
                              Institute (ANSI)-accredited institution:
                              •     Yes. Asset has been evaluated and meets guidelines set forth in Section 2 (f) (ii) of
                                    Executive Order 13423.
                              •     No. Asset has been evaluated and does not meet guidelines set forth in Section 2 (f) (ii)
                                    of Executive Order 13423.
                              •     Not yet evaluated. Asset has not yet been evaluated on whether or not it meets
                                    guidelines set forth in Section 2 (f) (ii) of Executive Order 13423.
                              •     Not applicable. Guidelines set forth in Section 2 (f) (ii) of Executive Order 13423 do not
                                    apply to the asset. This includes assets that will be disposed of by the end of fiscal year
                                    2015 and are no longer in use.
                                 Source: FRPC.
                                 a
                                  The legal interest element includes a lease maintenance indicator and a lease authority indicator,
                                 which are not reported for “owned” and “otherwise managed” properties. This report focuses on
                                 owned properties.
                                 b
                                  The status element includes an outgrant indicator identifying when the rights to the property have
                                 been conveyed or granted to another entity. For the purposes of this report, we did not evaluate or
                                 analyze information for the outgrant indicator.




                                 Page 57                                                         GAO-12-645 Federal Real Property
Appendix III: Comments from the Office of
                            Appendix III: Comments from the Office of
                            Management and Budget



Management and Budget

Note: GAO comments
supplementing those in
the report text appear at
the end of this appendix.




See comment 1.




See comment 2.




                            Page 58                                     GAO-12-645 Federal Real Property
                 Appendix III: Comments from the Office of
                 Management and Budget




See comment 3.




See comment 4.




                 Page 59                                     GAO-12-645 Federal Real Property
                 Appendix III: Comments from the Office of
                 Management and Budget




See comment 5.




See comment 6.




                 Page 60                                     GAO-12-645 Federal Real Property
                 Appendix III: Comments from the Office of
                 Management and Budget




See comment 7.




                 Page 61                                     GAO-12-645 Federal Real Property
Appendix III: Comments from the Office of
Management and Budget




Page 62                                     GAO-12-645 Federal Real Property
               Appendix III: Comments from the Office of
               Management and Budget




               The following are GAO’s comments on the Office of Management and
               Budget letter dated May 30, 2012.


               1. OMB stated that the agency agreed with the report’s general
GAO Comments      conclusion that challenges remain in the management of excess and
                  underutilized properties, but that significant progress has been made.
                  While we stated that limited progress has been made, our draft and
                  final report do not describe the progress as significant.

               2. OMB stated that the agency is concerned with some phrasing in the
                  report that may lead the reader to draw unintended conclusions
                  regarding the appropriate next steps for improving the accuracy and
                  consistency of the FRPP. OMB stated that based on its
                  understanding of our report, our findings are based on the 26 site
                  visits we conducted and further study is needed to determine whether
                  the issues we found with the consistency and accuracy of FRPP data
                  are systemic. OMB also asserts that despite our use of a non-
                  probability sample, we make generalizations based on the sample in
                  the report. As we discuss in the report and reiterated in discussions
                  with OMB staff during the comment period, our findings are primarily
                  based on the problems we found with FRPC’s data collection
                  practices, which affect the entire data collection process. The work
                  we did at 26 sample sites complement those findings and illustrate
                  how poor data collection practices impact data submissions, but they
                  are not the only basis for our conclusions. Furthermore, in its
                  comments, OMB acknowledged that “it has been standard practice for
                  each agency to measure certain data elements, such as utilization,
                  through agency-specific means tailored to the agency’s individual
                  needs and circumstances.” Therefore, it is unlikely, as OMB asserts,
                  that further study could find consistent data on properties outside of
                  our sample when OMB has acknowledged that the standards
                  themselves are inconsistent for reporting data. For these reasons, we
                  believe our recommendation remains valid that GSA, in consultation
                  with FRPC, should first address the problems with data collection
                  practices, which our methodology and findings showed were in fact
                  systemic. In response to OMB’s comment, we clarified the report to
                  emphasize the basis for our findings.

               3. OMB commented that this report conflicts with previous testimonies
                  and our 2011 update to GAO’s high-risk series which described prior
                  improvements. This report acknowledges such prior progress but
                  provides a more in-depth review of multiple agencies’ data collection
                  practices than prior work. Furthermore, as our report describes, in


               Page 63                                       GAO-12-645 Federal Real Property
Appendix III: Comments from the Office of
Management and Budget




    December 2011, changes were made to the data collection
    requirements which led to further concerns by agencies about data
    accuracy. Our report findings are also consistent with a September
    2011 GAO report that discussed the Department of Defense’s FRPP
    data. 1 In that report we found that the Department of Defense’s
    reported FRPP utilization data consisted of multiple discrepancies
    between the reported utilization designations and actual building
    utilization, along with other FRPP submission inaccuracies. Therefore,
    this report is consistent with our prior conclusions that some progress
    has been made since 2003, which we have discussed in multiple
    GAO reports and testimonies. However, the report on the Department
    of Defense’s data and this report demonstrated significant problems in
    the data collection process.

4. We believe that our first recommendation—that OMB develop a
   national strategy—would assist in addressing the tension OMB
   describes between providing agencies with the flexibility to define data
   elements based on their agency-specific requirements and
   establishing governmentwide data elements that can be used to
   support aggregate analysis across the entire FRPP database. We will
   continue to engage OMB on the topic of real property management
   and we believe that this report outlines the next steps. As we
   recommend in this report, a critical step is for OMB to develop a
   national strategy for managing excess and underutilized properties.
   In the area of data collection, a national strategy could help identify
   management priorities for problems such as this and lay out the
   principles for weighing the cost of uniform data collection to the
   agencies with the benefit that would be obtained by aggregate
   analysis of uniform data. As we stated in the report, if certain data
   elements cannot be collected consistently, they may not be
   appropriate to include in a database that appears to be standard
   across the government.

5. We agree with OMB’s statement that the method of attributing cost
   savings to efforts made to improve property management could be
   further clarified so that the public has a clear understanding of how
   such savings are calculated. We believe that transparency and
   accountability are critical in the federal government’s service to the
   taxpayers and would support action taken by OMB to increase



1
GAO-11-814.




Page 64                                         GAO-12-645 Federal Real Property
Appendix III: Comments from the Office of
Management and Budget




    transparency in this regard. We did not make a specific
    recommendation regarding how cost savings, particularly cost savings
    associated with the June 2010 presidential memorandum, should be
    clarified. Our report assessed real property management issues
    related to excess and underutilized property and recommended a
    national strategy that could be used to guide efforts such as the June
    2010 presidential memorandum.

6. OMB stated that the report’s characterization of the administration’s
   Civilian Property Realignment Act (CPRA) proposal could benefit from
   further clarity on savings goals and further context about our recent
   support for the proposal. Regarding savings goals, OMB stated that
   the administration’s $4.1 billion estimate of the potential proceeds
   from the Act’s implementation reflects an analysis of the potential
   proceeds that would result from the entire federal real property
   inventory, not just those currently identified as “excess.” We
   acknowledged in the report that these savings, according to OMB,
   would also come from reduced operating costs and efficiencies. We
   could not, however, analyze the basis for these savings because, as
   we discussed, OMB did not provide us with a methodology,
   calculations, or any basis for its stated projections. We requested this
   information from OMB multiple times over a period of eight months,
   and were only provided with a general description of the savings,
   similar to what OMB provided in its letter commenting on this report.
   Until we can evaluate the analysis OMB references, we will be unable
   to provide a more thorough assessment. Furthermore, our views on
   the effect that CPRA could have on problems we have found in
   federal real property management have not changed: that CPRA can
   be somewhat responsive to real property management challenges
   faced by the government. For example, CPRA proposes an
   independent board that would streamline the disposal process by
   selecting properties it considers appropriate for public benefit uses.
   This streamlined process could reduce disposal time and costs.

7. OMB stated that the administration has a strategy for improving the
   management of federal real property that serves as an important
   foundation for the national strategy we recommend in this report.
   OMB stated that several significant initiatives, including the June 2010
   presidential memorandum on excess property and the
   recommendation for a civilian property realignment board, represent a
   comprehensive and carefully considered governmentwide strategy for
   addressing the government’s long-term real property challenges.
   While the efforts OMB describes represent a range of individual
   initiatives, we continue to believe that they lack the key characteristics


Page 65                                         GAO-12-645 Federal Real Property
Appendix III: Comments from the Office of
Management and Budget




    of a cohesive national strategy. A national strategy would improve the
    likelihood that current initiatives to improve real property management
    will be sustained across future administrations. The desirable
    characteristics of a national strategy that we’ve identified—such as a
    clear purpose, scope, and methodology; problem definition and risk
    assessment; and identified resources, investments, and risk
    management—could serve to articulate a more sustained, long-term
    strategy to guide individual initiatives such as those described in
    OMB’s comments. For example, related to resources and
    investments, agencies often lack funding to prepare unneeded
    properties for disposal or to pursue demolition. A national strategy
    could address this issue directly and transparently so that the true
    costs of real property reform are evaluated more completely by
    decision makers.




Page 66                                        GAO-12-645 Federal Real Property
Appendix IV: Comments from the General
                            Appendix IV: Comments from the General
                            Services Administration



Services Administration

Note: GAO comments
supplementing those in
the report text appear at
the end of this appendix.




See comment 1.




See comment 2.




                            Page 67                                  GAO-12-645 Federal Real Property
                 Appendix IV: Comments from the General
                 Services Administration




See comment 3.




                 Page 68                                  GAO-12-645 Federal Real Property
Appendix IV: Comments from the General
Services Administration




Page 69                                  GAO-12-645 Federal Real Property
Appendix IV: Comments from the General
Services Administration




Page 70                                  GAO-12-645 Federal Real Property
               Appendix IV: Comments from the General
               Services Administration




               The following are GAO’s comments on the General Services
               Administration letter dated June 7, 2012.


               1. GSA stated that it is unclear whether the examples of inconsistencies
GAO Comments      described in our report are systemic throughout the FRPP, or are
                  occurring in specific agencies’ reporting of the data. As we discuss in
                  the report, our findings are primarily based on the problems we found
                  with FRPC’s data collection practices, which negatively impact the
                  entire data collection process. The examples of inconsistencies and
                  inaccuracies that we describe complement those findings and
                  illustrate how poor data collection practices affect data submissions,
                  but they are not the only basis for our conclusions. In fact, our
                  recommendation to improve FRPP data collection involves the sound
                  data collection practices that we believe should be put in place. GSA
                  has agreed with this recommendation and has taken action to begin
                  correcting the problems we identified. In response to GSA’s
                  comments, we made some clarifications to the report’s discussion of
                  the basis of our findings.

               2. GSA stated that, because the FRPP is an annual report, property
                  utilization may change from the time it is submitted in December. As
                  we conducted site visits for this review, we took steps to ensure that
                  any inconsistencies and inaccuracies we found were not due to a
                  significant change in the building’s use from the time it was reported
                  to the time we visited. First, we discussed the history of the building’s
                  use with the local officials who manage the building to ensure that
                  there was no recent change in the building’s utilization. Second, since
                  2011 FRPP data had not been reported at the time we began our site
                  visits, we obtained utilization data from the agencies’ source systems
                  (which are used to produce FRPP utilization data) so that we had
                  recent utilization data (as of the fall of 2011) before we began our site
                  visits in December 2011.

                   GSA also stated that the condition of the buildings may change or
                   may not be updated annually. Related to this issue, we found that all
                   five agencies did not always follow the guidance provided by the
                   FRPC on how to calculate condition index. This led to severely
                   blighted buildings receiving excellent condition scores, which could
                   not be accounted for by reported changes in condition over a
                   relatively short period of time.

               3. GSA made a comment related to the computation formula for
                  Condition Index. We have clarified this statement in the report.



               Page 71                                        GAO-12-645 Federal Real Property
Appendix V: Comments from the Department
                            Appendix V: Comments from the Department
                            of Veterans Affairs



of Veterans Affairs

Note: GAO comments
supplementing those in
the report text appear at
the end of this appendix.




                            Page 72                                    GAO-12-645 Federal Real Property
Appendix V: Comments from the Department
of Veterans Affairs




Page 73                                    GAO-12-645 Federal Real Property
                           Appendix V: Comments from the Department
                           of Veterans Affairs




Now on p. 10, first full
paragraph.




Now footnote 25.




Now top of p. 24.




See comment 1.




See comment 2.




                           Page 74                                    GAO-12-645 Federal Real Property
                              Appendix V: Comments from the Department
                              of Veterans Affairs




Now on pages 10-11.


See comment 3.




Now near the top of p. 16.




See comment 4.




 Now near the top of p. 18.




                              Page 75                                    GAO-12-645 Federal Real Property
                Appendix V: Comments from the Department
                of Veterans Affairs




Now on p. 20.




Now on p. 31.




                Page 76                                    GAO-12-645 Federal Real Property
                 Appendix V: Comments from the Department
                 of Veterans Affairs




Now on p. 33.




See comment 5.




Now on p. 35.



Now on p. 35.




                 Page 77                                    GAO-12-645 Federal Real Property
                            Appendix V: Comments from the Department
                            of Veterans Affairs




                        `




This statement is no
longer in the report.

Now on p. 38.




Now on p. 41.


Now on pages 41-42.




                            Page 78                                    GAO-12-645 Federal Real Property
               Appendix V: Comments from the Department
               of Veterans Affairs




               The following are GAO’s comments on the Department of Veterans
               Affairs letter dated May 29, 2012.


               1. VA stated that its complex model for calculating utilization is
GAO Comments      consistent with FRPC guidance because the guidance allows for
                  flexibility on how agencies determine a key component of utilization
                  (current design capacity) and that OMB agreed with their approach.
                  However, rather than exercising flexibility in its use of current design
                  capacity, VA used a different definition of utilization than the definition
                  outlined in FRPC guidance. FRPC guidance defines utilization as the
                  ratio of occupancy to current design capacity; however, VA defines
                  utilization as the ratio of ideal space to existing space. 1 While we
                  acknowledge in our report that VA received OMB approval for
                  reporting utilization differently, this method of reporting utilization is
                  still inconsistent with the definition of utilization in FRPC guidance.
                  Utilization is a performance measure and the 2004 executive order
                  stated that performance measures shall be designed to allow
                  comparing the agencies’ performance against industry and other
                  public sector agencies. The inconsistencies we found from VA and
                  other agencies in reporting utilization makes comparing utilization
                  among agencies impossible.

               2. VA also stated that “identifying underutilizations is much better than
                  ignoring the fact that the building may not be properly sized to deliver
                  services to Veterans.” We did not suggest that VA should ignore any
                  aspect of its buildings that is problematic. We continue to believe that
                  VA’s method of calculating utilization has led to some buildings being
                  continuously designated as underutilized even when local officials,
                  who know the buildings best, have told us that the buildings have
                  been fully occupied.

               3. VA stated that the reasons for the inaccuracies that we found in
                  utilization at two VA buildings were due to the use of these buildings
                  as “swing space,” meaning that utilization changes frequently based
                  on need for space. In its comments, VA indicated that since FRPP


               1
                In calculating utilization for offices, hospitals, and warehouses, FRPC guidance directs
               agencies to determine the ratio of occupancy to “current design capacity.” For
               laboratories, utilization is the ratio of active units to current design capacity. For housing,
               utilization is the percentage of individual units that are occupied. However, VA determines
               utilization based on “ideal space.”




               Page 79                                                     GAO-12-645 Federal Real Property
Appendix V: Comments from the Department
of Veterans Affairs




    data are reported annually, the designation of this space at the time of
    reporting changed from the time that we visited the sites. However,
    as we conducted our site visits for this review, we took steps to
    ensure that any inconsistencies we found were not due to a significant
    change in the building’s use from the time it was reported to the time
    we visited. First, we discussed the history of the building’s use since
    2008 with the local officials who manage the building to ensure that
    there was no recent change in the building’s utilization. Second, since
    2011 FRPP data had not been reported at the time we began our site
    visits, we obtained utilization data from the agencies’ source systems
    (which are used to produce FRPP utilization data) so that we had
    recent utilization data (as of the fall of 2011). The data we obtained
    from VA were current as of October 2011 and our visit took place in
    December 2011. Based on VA’s comments, we clarified this
    information in our report to show that we accounted for the time
    between 2010 FRPP reporting and our visit in December 2011.
    Based on our visits to the buildings and our discussions about the
    history of the buildings’ use with the VA officials who manage them,
    we do not believe that VA’s explanation accounts for the
    inconsistencies we found in utilization as detailed below:

    •     Local VA officials who manage the buildings told us that the first
          building VA discussed in its comments is used for accounting and
          payroll purposes and that it was always fully occupied during the
          period of our review (dating back to 2008). However, the building
          was reported to the FRPP as underutilized during each of these
          years. In fact, just two months prior to our visit, VA’s October
          2011 source data showed a utilization of 45 percent for this
          building even though it was fully occupied.

    •     Local VA officials who manage the second building VA discussed
          in its comments told us that the building was mostly unoccupied
          because they had recently acquired it from the Department of
          Defense and that multiple improvements had to be made before it
          could be occupied by staff. Based on this, the local officials told
          us that it could not have been utilized at 59 percent in October
          2011 as VA source data indicated.

4. VA made a comment related to individually metered buildings. We
   clarified VA’s statement in the report so that it is consistent with these
   comments.

5. In reference to our findings on problems with cost savings associated
   with the June 2010 presidential memorandum, VA stated that it


Page 80                                           GAO-12-645 Federal Real Property
Appendix V: Comments from the Department
of Veterans Affairs




      disagreed with findings in a previous GAO report (GAO-12-305) that
      we referenced. 2 In its comments on GAO-12-305, VA officials did not
      concur with certain parts of the report related to decreasing energy
      costs and improving non-recurring maintenance contracting.
      However, we did not reference the previous GAO report on these
      matters. Rather, we referenced that report’s discussion on savings
      associated with reducing leased space through telework. VA
      confirmed the problems that the previous GAO team found with the
      savings associated with the telework program in its comments on
      GAO-12-305, stating that the “telework program is still in its infancy
      and actual real property savings requires reducing space that is
      currently leased. These reductions in leased space may not be fully
      realized in 2012.” As a result, VA stated it its comments on GAO-12-
      305 that the telework initiative was removed from the description of
      savings in its fiscal year 2013 budget. This is consistent with what we
      describe in this report. Therefore, VA’s restatement of its
      disagreement with findings in GAO-12-305 has no bearing on this
      report.




2
    GAO-12-305.




Page 81                                          GAO-12-645 Federal Real Property
Appendix VI: Comments from the U.S.
              Appendix VI: Comments from the U.S.
              Department of Agriculture



Department of Agriculture




See p. 48.




             Page 82                                GAO-12-645 Federal Real Property
             Appendix VI: Comments from the U.S.
             Department of Agriculture




See p. 48.




             Page 83                               GAO-12-645 Federal Real Property
Appendix VII: GAO Contact and Staff
                            Appendix VII: GAO Contact and
                            Staff Acknowledgments



Acknowledgments

                  David Wise, (202) 512-5731 or wised@gao.gov
GAO Contact
                  In addition to the contact named above, David Sausville, Assistant
Staff             Director; Amy Abramowitz; Russell Burnett; Kathleen Gilhooly; Raymond
Acknowledgments   Griffith; Amy Higgins; Amber Keyser; Michael Mgebroff; John Mingus Jr.;
                  Joshua Ormond; Amy Rosewarne; Minette Richardson; Sandra Sokol;
                  and Elizabeth Wood made key contributions to this report.




(542185)
                  Page 84                                      GAO-12-645 Federal Real Property
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