Federal Real Property: Improved Data and a National Strategy Needed to Better Manage Excess and Underutilized Property

Published by the Government Accountability Office on 2012-08-06.

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

                             United States Government Accountability Office

GAO                          Testimony
                             Before the Subcommittee on Economic
                             Development, Public Buildings and Emergency
                             Management, Committee on Transportation
                             and Infrastructure, House of Representatives

                             FEDERAL REAL
For Release on Delivery
Expected at 10:00 a.m. EDT
Monday, August 6, 2012

                             Improved Data and a
                             National Strategy Needed to
                             Better Manage Excess and
                             Underutilized Property
                             Statement of David Wise, Director
                             Physical Infrastructure

Chairman Denham, Ranking Member Norton, and Members of the

I am pleased to be here today to discuss the federal government’s efforts
to collect data on its excess and underutilized real property assets and
the need to better and more effectively manage these assets. In 2004, the
President issued an executive order establishing the Federal Real
Property Council (FRPC). The executive order required the FRPC to work
with the General Services Administration (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 required for reasons of national
security. 1 The FRPC created the Federal Real Property Profile (FRPP) to
meet this requirement and began data collection in 2005. Following the
implementation of the executive order and nation-wide data collection
efforts, we have reported that agencies continue to face challenges with
managing excess and underutilized properties. 2

My statement draws on our June 2012 report that addressed the extent to
which (1) the FRPP database describes the nature, use, and extent of
excess and underutilized federal real property and (2) progress is being
made toward more effectively managing these properties. 3 My statement
highlights the key findings and recommendations of our report. Our
review focused on five civilian federal real property-holding agencies—
GSA and the departments of Energy (DOE), the Interior (Interior),
Veterans Affairs (VA), and Agriculture (USDA). 4 On the basis of the
available data, these five agencies report approximately two-thirds of the
building square footage reported by civilian agencies. To learn about the

 Federal Real Property Asset Management, Exec. Order No. 13327, 69 Fed. Reg. 5897
(Feb. 6, 2004).
 GAO, Federal Real Property: Proposed Civilian Board Could Address Disposal of
Unneeded Facilities, GAO-11-704T, (Washington, D.C.: June 9, 2011).
 GAO, Federal Real Property: National Strategy and Better Data Needed to Improve
Management of Excess and Underutilized Property, GAO-12-645 (Washington, D.C.: June
20, 2012).
 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 1                                                                         GAO-12-958T
                       processes by which data on such properties are collected and submitted
                       to the FRPP database, we obtained and analyzed the fiscal years 2008,
                       2009, and 2010 FRPP submissions from these agencies and visited a
                       nonprobability sample 5 of approximately 180 buildings at 26 sites where
                       excess or underutilized owned buildings had been reported by the five
                       civilian agencies. 6 In addition, we obtained answers to a set of questions
                       about managing excess and underutilized properties that we posed to the
                       senior real property officers of the selected agencies. We also interviewed
                       Office of Management and Budget (OMB) staff because OMB chairs the
                       FRPC, oversees the implementation of the executive order, and has set
                       cost-savings goals related to excess and underutilized properties. We
                       conducted our review from May 2011 through June 2012 in accordance
                       with generally accepted government auditing standards. Additional
                       information on our scope and methodology can be found in the June 2012
                       report. 7

                       We found that the Federal Real Property Council (FRPC) has not
The Federal            followed sound data collection practices in designing and maintaining the
Government Needs       Federal Real Property Profile (FRPP) database, raising concerns that the
                       database is not a useful tool for describing the nature, use, and extent of
Better Data and a      excess and underutilized federal real property. The FRPC has not
National Strategy to   ensured that key data elements—including buildings’ utilization, condition,
Improve Federal Real   annual operating costs, mission dependency, and value—are defined and
                       reported consistently and accurately. For example, we documented
Property Management    buildings reported to the FRPP as underutilized even though they were
                       fully occupied and we also documented others that were vacant but
                       reported as utilized. We also saw severely dilapidated buildings that were
                       reported as being in excellent condition. In fact, at 23 of the 26 locations
                       visited, we identified inconsistencies and inaccuracies related to these

                        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.
                        In the case of VA, which did not categorize any of its buildings as “excess,” we visited
                       sites where buildings had been reported as “not utilized” or “underutilized.”

                       Page 2                                                                          GAO-12-958T
data elements. 8 As a result, FRPC cannot ensure that FRPP data are
sufficiently reliable to support sound management and decision making
about excess and underutilized property. In addition to problems with data
consistency, we found problems with collaboration and reporting issues,
among others. For example, OMB, as the Chair of the 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 the ability
to collect data, as required, accurately.

In addition to the various problems we found and documented with real
property data, we also found that the federal government continues to
face other challenges when managing excess and underutilized
properties. The federal government has sought ways to generate cost
savings associated with improving management of excess and
underutilized properties. However, some of these efforts have been
discontinued, and the potential savings for others are unclear. For
example, in response to requirements set forth in a June 2010
presidential memorandum for agencies to achieve $3 billion in savings by
the end of fiscal year 2012, GSA reported approximately $118 million in
lease cost savings resulting from four new construction projects.
However, GSA has yet to occupy any of these buildings, and the
agency’s cost-savings analysis projected these savings would occur over
a 30-year period—far beyond the time frame of the presidential
memorandum. Even though the cost savings achieved from efforts to
improve property management are unclear, the five federal agencies that
we reviewed have taken some actions to dispose of and better manage
excess and underutilized property, including using these properties to
meet space needs by consolidating offices and reducing employee work
space to use space more efficiently. However, the agencies still face
long-standing challenges to managing these properties, including the high
cost of property disposal, legal requirements prior to disposal such as
those related to preserving historical properties and the environment,
stakeholder resistance, and remote property locations that are difficult to
sell or dispose. A comprehensive, long-term national strategy would

 Additional examples of inconsistencies and inaccuracies are highlighted in our full report.
See GAO-12-645.

Page 3                                                                         GAO-12-958T
                     support better management of excess and underutilized property by,
                     among other things, defining the scope of the problem; defining goals to
                     be achieved; addressing costs, resources, and investments needed; and
                     outlining the roles and coordination mechanisms across agencies.

                     In our June 2012 report, we made two recommendations that would help
GAO Recommended      the federal government improve excess and underutilized federal real
That OMB and GSA     property management. 9 We recommended that:
Take Action to       •     GSA, in collaboration and consultation with FRPC member agencies,
Improve Excess and         develop and implement a plan to improve the FRPP consistent with
                           sound data collection practices, so that the data collected are
Underutilized              sufficiently complete, accurate, and consistent; and
Property Data and
                           OMB, in collaboration and consultation with FRPC member agencies,
Management           •
                           develop and publish a national strategy for managing federal excess
                           and underutilized real property.

                     In written comments on the report, GSA agreed with our recommendation
                     and stated that the agency has taken specific actions to begin addressing
                     this recommendation, including proposing reforms of the data collection
                     process to FRPC. OMB agreed that real property challenges remain but
                     did not directly state whether it agreed or disagreed with our
                     recommendation. The details of OMB’s and GSA’s comments and those
                     from other agencies we reviewed, as well as our response to these
                     comments, are addressed in full in the report. 10

                     Chairman Denham, Ranking Member Norton, and Members of the
                     Subcommittee, this concludes my prepared statement. I would be happy
                     to answer any questions that you may have at this time.

                     For further information regarding this testimony, please contact David
Contact and          Wise at (202) 512-5731 or wised@gao.gov. In addition, contact points for
Acknowledgments      our Offices of Congressional Relations and Public Affairs may be found


                     Page 4                                                         GAO-12-958T
           on the last page of this statement. Individuals who made key contributions
           to this testimony are David Sausville (Assistant Director), Russell Burnett,
           Keith Cunningham, Kathleen Gilhooly, Raymond Griffith, Amy Higgins,
           and Amy Rosewarne.

           Page 5                                                           GAO-12-958T
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