General Services Administration: Delegated Buildings Adequately Operated But Better GSA Oversight Needed

Published by the Government Accountability Office on 1990-05-15.

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

             6’                                                             l -

                      United   States   General   Accounting   Office
                      Report to the Chairman, Subcommittee *‘L
    GAO               on General Services, Federalism and the ;
                      District of Columbia, Committee on      t
                      Governmental Affairs, U.S. Senate       ;:

                      But Better GSA
                      Oversight Needed

                                                                              ’ .:.
’   GAO/GGIHW-76                                                                 ..
                   United States
                   General Accounting Office
                   Washington, D.C. 20548

                   General Govemment Division


                   May 15,199O

                   The Honorable Jim Sasser
                   Chairman, Subcommittee on General Services,
                     Federalism and the District of Columbia
                   Committee on Governmental Affairs
                   United States Senate

                   Dear Mr. Chairman:

                   As requested by the Subcommittee, we are providing you with the
                   results of our follow-up review of the General Services Administration’s
                   (GSA) Building Delegation Program. This program significantly changed
                   GSA’S role by delegating to certain tenant agencies day-to-day building
                   operation responsibilities, such as cleaning and recurring repairs. In an
                   earlier report on GSA’S pilot delegations and the Reagan Administration’s
                   1984 decision to expand the program nationwide,’ we supported build-
                   ing delegations but noted that GSA needed to collect all cost and perform-
                   ance data to effectively oversee delegations and assess agency
                   performance. This report updates that prior work, provides information
                   on how well the agencies operate delegated buildings, and identifies
                   various actions GSA needs to take to improve its oversight of the

                   Available evidence indicates that the building delegation program
Results in Brief   works. GSA evaluations indicate that agencies are doing an adequate job
                   in the day-to-day operations of delegated buildings. Also, all agency offi-
                   cials we contacted in nine delegated buildings believe that building ser-
                   vices have improved under the program.

                   However, GSA’S oversight of delegated buildings continues to be hindered
                   because GSA does not require agencies to submit all operating cost and
                   performance data. Without these data, GSA cannot determine whether
                   agency officials manage building operations cost-effectively because GSA
                   (1) cannot identify how much the agencies spend to operate the build-
                   ings or (2) determine whether the agencies obtain economical and effi-
                   cient building services. The cost data that GSA does require from these
                   agencies are frequently inaccurate or sometimes never received.

                   ‘Building Operations: GSA’s Delegations of Authority to Tenant Agencies (GAOIGGD-88-103, Aug. 3,

                   Page 1                                                    GAO/GGlMO-76 Delegated Buildings

                 Further, not all GSA regions analyze the cost data to identify potentially
                 inefficient operations. Better data on operating costs and services cou-
                 pled with an analytical process to evaluate agency performance would
                 strengthen GSA’S ability to oversee delegated building operations.

                 GSA  can also provide better program assistance by (1) routinely commu-
                 nicating common delegated building management problems and emerg-
                 ing building operational trends to GSA regional and delegated building
                 officials, and (2) sharing GSA'S building manager training curriculum
                 with delegated building managers. These actions could

             l   improve delegated building operations by allowing GSA regional and del-
                 egated building officials to benefit from each other’s experiences, and
             l   provide delegated building officials guidance on the courses and exper-
                 iences that     believes building managers need to be effective.

                 GSA  is responsible for operating about 239 million square feet of space in
Background       over 7,000 buildings nationwide. These buildings are either owned by
                 the government or leased from private owners. Traditionally, on behalf
                 of its tenants, GSA directly performed or contracted out to commercial
                 firms part or all of the building operations function.

                 In response to a common perception among federal agencies that GSA
                 was not providing timely or responsive building services, GSA, between
                 1982 and 1984, experimented with a pilot program to test the costs and
                 benefits of delegating building operations to a few selected agencies in
                 the Washington, DC., metropolitan area.g In late 1984, the Reagan
                 Administration decided to reduce GSA'S operational role by expanding
                 the building delegation program nationwide. The Office of Management
                 and Budget directed GSA to delegate building operations authority to
                 agencies in single tenant buildings where feasible and economical.

                 As a result, GSA'S role has changed significantly, from operating all gov-
                 ernment buildings in GSA'S inventory to operating some-usually multi-
                 tenant-buildings     and overseeing and assisting agencies that operate
                 others. As emphasized in our recently issued report on GSA's overall

                 ‘GSA defines building operations as cleaning and landscaping; preventive maintenance; recurring
                 repairs; minor alterations; utilities; certain security services; and selected aspects of other building
                 functions, such as awarding and administering building services contracts.

                 Page 2                                                            GAO/GGDSO-76       Delegated   Buildings

                         management practices,” effective GSA leadership and oversight of the
                         building delegation program are essential to ensure its success. At a min-
                         imum, effective program leadership and oversight requires that GSA (1)
                         determine whether the agencies adequately carry out delegated building
                         operations-such    as cleaning or repairs, (2) gather and analyze the data
                         to determine whether the agencies’ building operations are cost-effec-
                         tive, (3) promote effective communication of operational issues between
                         the agencies and GSA, and (4) share GSA’S building management expertise
                         with the agencies.

                         As of February 1989, GSA had 2,160 delegated buildings that contained
                         over 78 million occupiable square feet of space. One hundred ninety-six
                         of the buildings were agency-operated and contained about 45 million
                         occupiable square feet of space; 1,964 were lessor-operated buildings
                         containing about 33 million occupiable square feet of space.

                         Our objectives were to determine whether (1) agencies were adequately
Objectives, Scope, and   operating delegated buildings, (2) GSA was effectively overseeing build-
Methodology              ing delegations, and (3) GSA was providing assistance to the agencies.
                         This review updates our August 1988 report on pilot delegations and
                         specifically focuses on the 196 agency-operated delegated buildings that
                         contain the majority of delegated building square footage. We did not
                         review the 1,964 lessor-operated delegated buildings because the tenant
                         agencies do not directly operate the buildings on a day-to-day basis.

                         To accomplish our objectives, we did work at GSA’S central office, three
                         GSA regional offices, and nine delegated buildings. At GSA’S central office
                         we reviewed and analyzed information on delegation policies and proce-
                         dures, discussed program operations with responsible program officials,
                         analyzed all 40 completed evaluation reports covering 76 of the 196
                         agency-operated buildings,” and reviewed available studies dealing with
                         building delegations.

                         At the three regions -the National Capital Region (NCR) in Washington,
                         D.C.; Region III in Philadelphia, Pennsylvania; and Region IX in San
                         Francisco, California-we     reviewed delegated building management

                         “General Services Administration: Sustained Attention Required to Improve Performance (GAO/
                             -. 0 - 14 , Nov. 6, 1989).

                         ‘Evaluation reports for the remaining 120 buildings were not available because either the reports
                         were not finalized or the evaluations were not completed.

                         Page 3                                                        GAO/GGD-90-76     Delegated   Buildings

                           files; interviewed officials responsible for overseeing delegated build-
                           ings; reviewed available fiscal year 1988 delegated buildings cost
                           reports, which were the most current available; analyzed delegated
                           building occupant surveys; interviewed building evaluators; and
                           observed three delegated building evaluations. These regions are respon-
                           sible for 161 delegated buildings, or about 86 percent of the 45 million
                           occupiable square feet of space that is agency-operated.

                           At the nine delegated buildings, we reviewed pertinent building manage-
                           ment files, analyzed available fiscal year 1988 operating cost reports,
                           and interviewed agency officials responsible for operating the buildings.
                           We selected these buildings to cover a variety of conditions, such as geo-
                           graphic location, size, fiscal year 1989 operating budget, and whether
                           building management was performed in-house or by a commercial facil-
                           ity management contractor. (See app. I for specific details on each
                           selected building.)

                           Since we confined our work to available completed evaluation reports,
                           occupant surveys, and visits to nine delegated buildings, our detailed
                           findings cannot be projected to the operations of all delegated buildings.
                           We did our audit work between March and November 1989 in accor-
                           dance with generally accepted government auditing standards. Written
                           comments on a draft of this report were obtained from GSA and have
                           been incorporated into this final report where appropriate.

                           Available evidence indicates that delegated buildings have been ade-
Delegated Buildings’       quately operated. Specifically, GSA has evaluated 76 of the 196 agency-
Day-To-Day                 operated buildings and concluded that 71 were operated in a satisfac-
Operations Adequate        tory manner or better. Agency officials responsible for building opera-
                           tions in the nine delegated buildings we visited said that building
                           operations had improved since delegations, and they wanted the pro-
                           gram to continue.

GSA Evaluations Indicate   To help oversee delegated buildings, GSA established an evaluation pro-
                           gram to determine whether the agencies (1) preserve and protect the
Delegated Buildings        delegated buildings; (2) provide timely and responsive building services;
Operated Satisfactorily    and (3) adhere to applicable laws, policies, and regulations. GSA regional
                           offices are required to evaluate each building on or near the first anni-
                           versary of the building’s delegation. Regional offices are also required to
                           do subsequent evaluations biennially or more frequently if the initial
                           evaluation identifies unsatisfactory agency operations.

                           Page 4                                        GAO/GGLHO-76 Delegated Buildings

                            GSA  developed guidelines to help ensure that the evaluations are objec-
                            tive, uniform, and consistent, The guidelines cover 11 areas-operations
                            and maintenance, energy management, cleaning, security, fire protection
                            and safety, repair and alterations, resource management, contracting,
                            space assignment and utilization, concessions, and lease management.
                            GSA uses the program area evaluation results as a basis for assessing the
                            overall operations of each delegated building.

                            As of November 1989, GSA had completed and issued 40 final evaluation
                            reports covering 76 of the 196 agency-operated buildings. The com-
                            pleted evaluation reports showed that, overall, 71 of the buildings were
                            operated in a satisfactory manner or better, and 5 buildings were oper-
                            ated in a less than satisfactory manner. When evaluations identify
                            unsatisfactory operations, GSA recommends corrective actions and
                            expects the agencies to implement the recommendations. GSA plans to
                            reevaluate four of the buildings which had unsatisfactory operations to
                            determine whether the agencies have taken corrective action. However,
                            GSA does not plan to reevaluate the other building, which is a small
                            warehouse, due to limited GSA resources.

Agencies Like Delegations   Building conditions affect employee morale and retention, productivity,
                            and mission success. Consequently, agencies must be satisfied with their
                            building services and overall working environments. In the 9 delegated
                            buildings we visited, all 19 agency executives and building management
                            officials we talked with said that the quality of building services
                            improved under the delegation program.

                            Specifically, they said that with control of building operations in their
                            own hands, they are in a much better position to adapt these operations
                            to the agencies’ goals and mission objectives than when GSA controlled
                            the buildings and services. For example, building managers at one loca-
                            tion said that their agency has minimized interruptions that building
                            services cause by considering operational needs when planning mainte-
                            nance and repair schedules. GSA had required the agency to shut down
                            computer operations the night before GSA started computer room repair
                            work. Now that the agency schedules maintenance and repair work, the
                            computer system, which usually operates 24 hours a day, 7 days a week,
                            is not shut down until an hour before the repair work starts.

                            NCR building occupant surveys also indicated that delegated building
                            occupants are satisfied with their working environments. As part of del-
                            egated building evaluations, GSA regional staff may survey the opinions

                            Page5                                         GAO/GGD9@76DelegatedBuildings

                           of building occupants. These surveys generally ask a sample of occu-
                           pants to rate routinely provided building services as either excellent,
                           satisfactory, or needing improvement. We analyzed all available NCR
                           occupant surveys and found that 14 of 19 buildings surveyed received
                           an overall passing grade. That is, at least 70 percent of the respondents
                           in each of the 14 buildings rated the overall building services as satisfac-
                           tory or excellent. Senior GSA officials told us that similar occupant
                           surveys were not done when GSA operated the buildings. Rather, GSA
                           evaluators interviewed three or four agency building management offi-
                           cials to obtain their views regarding the quality of GSA building services.
                           As a result, GSA cannot compare current satisfaction levels with those
                           that existed prior to delegations.

                           Although agencies appear to be doing an adequate job in the day-to-day
GSA Oversight of           operations of delegated buildings, GSA cannot determine whether agen-
Delegated Buildings        cies are operating the buildings cost-effectively. GSA cannot identify how
Needs to Be                much agencies spend to operate the buildings, or determine whether the
                           agencies obtain economical and efficient building services. GSA'S over-
Strengthened               sight of delegated buildings continues to be hindered because GSA does
                           not require the agencies to submit all operating cost and performance
                           data. In addition, the cost data that GSA does require from the agencies
                           are frequently inaccurate or sometimes never received. Further, not all
                           GSA regions analyze the data to identify potential inefficient operations.

All Cost and Performance   Annually, the agencies pay GSA rent for delegated buildings, and GSA
Data Not Available         transfers back to the agencies an amount that GSA estimates it would
                           have spent, in the absence of delegation, to provide standard-level build-
                           ing services. GSA defines standard-level services as those building ser-
                           vices provided during a normal 50-hour work week (5 days at 10 hours
                           per day). To oversee how agencies use this funding to provide standard
                           services, GSA requires agencies to submit an annual building operations
                           cost report. The report is designed to show, by service category, the
                           total amount agencies spend to provide standard-level building services.

                           In promoting the building delegation program, GSA told the agencies that
                           they could supplement GSA funding with agency funds to upgrade their
                           environments. The agencies also have spent their own funds to provide
                           night and weekend building services-e.g., cleaning, utilities, and secur-
                           ity. GSA considers expenditures an agency makes to upgrade its environ-
                           ment or for night and weekend services to be above standard-level and
                           does not want these costs reflected in the annual building cost report. As

                           Page6                                         GAO/GGD9@76DelegatedBuildings

                                  a result, the building cost reports that GSA receives do not show all oper-
                                  ating costs. For example, one agency’s financial management and budget
                                  officials said that their agency spent about $6 million of its fiscal year
                                  1988 funds to upgrade and provide above standard-level services at its
                                  main building. These costs were not reflected in the agency’s building
                                  cost report.

                                  Our August 1988 report and our recent GSA management report said that
                                  because GSA does not collect all cost data, it has lost visibility over build-
                                  ing operating expenditures and cannot determine how much it costs to
                                  operate a building under the delegation program. Further, both reports
                                  recognized that even if GSA collected all building operations cost infor-
                                  mation, GSA still could not determine whether the building was being
                                  operated cost effectively because it does not collect performance data-
                                  the quantity and quality of services provided. With all cost and per-
                                  formance data, GSA could begin to assess agency performance in operat-
                                  ing individual delegated buildings as well as compare the operations of
                                  similar delegated buildings within a geographic area. In our GSA manage-
                                  ment report, we recommended, and GSA’s Acting Administrator agreed,
                                  that agencies should report all operating cost and performance informa-
                                  tion He also said that GSA officials plan to meet with agency representa-
                                  tives to discuss the best way to obtain the data.

Standard-Level cost               While GSA agrees that it should begin to collect all operating cost and
                                  performance data, GSA also needs to ensure that the annual building cost
Reports Inaccur *ate Or Not       reports on standard-level services it currently requires are accurate and
Received                          received. At the nine buildings we visited, we found that, for various
                                  reasons, six of the seven buildings submitted inaccurate fiscal year 1988
                                  building cost reports. The cost reports at the other two buildings were
                                  not available for review. The following examples illustrate some of the
                                  errors we identified and agencies’ comments on why they occurred:

                              l   One building cost report excluded labor costs of approximately
                                  $260,000. The building management officials said that because their
                                  agency keeps payroll records at its headquarters, the officials did not
                                  have the labor cost data. The officials also said that they erred in
                                  reporting $136,133 of non-cleaning materials and supplies under the
                                  cleaning category.
                              l   Another building cost report showed costs that nearly equalled the
                                  amount GSA provided for standard-level operations. The agency’s finan-
                                  cial management and budget officials said that some of the costs
                                  reported were actual costs, but the utilities figure was “plugged” so that

                                  Page 7                                          GAO/GGD90-76   DelegatedBuildings

                      the total cost reported would be close to the amount GSA provided. These
                      officials said that they (1) were reluctant to report actual expenditures
                      because GSA might provide less funding or withdraw the delegation, and
                      (2) cannot accurately determine expenditures for standard-level ser-
                      vices because the building operates 24 hours a day, 7 days a week, and
                      utility and service contract bills do not identify charges for standard-
                      and above standard-level services.

                      GSA'S    evaluations of overall delegated building operations confirmed
                      that agencies submit inaccurate building cost reports. Our analysis of 76
                      GSA delegated building evaluation reports showed that 23 of the cost
                      reports were inaccurate. For example, at one building, building manage-
                      ment officials reported operating expenses that equalled the funds GSA
                      provided. In response to GSA's inquiry regarding the reported expenses,
                      the officials replied that even though actual costs exceeded GSA'S fund-
                      ing, they believed that reported building costs could not exceed GSA
                      funded amounts.

                      Moreover, 38 of the 161 fiscal year 1988 building cost reports for NCR,
                      Region III, and Region IX were never received. Although GSA'S standard
                      delegation agreement specifies that the agencies should submit the cost
                      reports to the appropriate regional office, several agency officials who
                      responded to GSA follow-up requests said they were unaware of this
                      requirement and sent the reports to GSA'S central office. Central office
                      officials said they had received two or three cost reports and had for-
                      warded them to the appropriate regional office. Except for these
                      reports, the officials said no other cost reports were received by the cen-
                      tral office. As a result, GSA regional officials did not have the data neces-
                      sary to identify potentially inefficient operations in 38 buildings.

Not All GSA Regions   Even if the agencies submitted accurate annual building cost reports to
Analyze Cost Data     the GSA regions, only one of the three regions we visited used the build-
                      ing cost reports to identify inefficient operations. NCR officials have
                      developed a methodology to analyze the cost data to enhance their over-
                      sight of delegated building operations. At the end of each fiscal year,
                      KCR officials analyze the building cost data to identify all variances
                      between GSA funded amounts and actual reported costs of 0 and plus or
                      minus 10 percent or more. According to NCR delegation officials, (1) a O-
                      percent variance indicates that the agency may be reporting funded
                      rather than actual costs; (2) a plus variance of 10 percent or more indi-
                      cates possible inefficiencies that should be corrected; and (3) a minus
                      variance of 10 percent or more indicates possible efficiencies that should

                      Page 8                                          GAO/GGD9@76   Delegated   Buildings

                        be shared with other delegated building officials. If NCR officials find
                        such variances, they are to write the agencies and ask them to assess the
                        reasonableness of the reported costs.

                        In contrast, GSA’sRegion IX and III officials have not routinely analyzed
                        building cost reports to identify potentially inefficient operations. These
                        officials said that, unlike NCR, they had not considered the benefits of
                        analyzing the cost reports. Region IX officials who oversee delegated
                        buildings said that when they receive the reports they merely look at
                        the total operating and maintenance costs, but do not compare the data
                        to current year funding or prior year reported costs. A Region III delega-
                        tion program official said that an analysis similar to that done by the
                        NCR would be beneficial in that it would help identify buildings that may
                        be inefficiently operated.

                        In addition to strengthening its ability to oversee delegated buildings,
GSA Could Better        GSA  could better assist its regional staff that is responsible for the dele-
Assist Regional Staff   gation program and delegated building managers. Specifically, GSA could
and Delegated           routinely communicate to its regional office staffs and delegated build-
                        ing managers the common problems and the emerging trends associated
Building Managers       with delegated building management. GSA also could share its building
                        manager training curriculum with delegated building managers. Such
                        actions would allow GSA regional staff and delegated building managers
                        to benefit from each other’s experiences, and provide delegated building
                        managers guidance on the courses and experiences that GSA believes are
                        necessary for effective building management.

Communicate Common      GSA'S  central office routinely analyzes and disseminates to its regional
                        administrators the evaluation results of GsA-operated buildings. Accord-
Problems and Everging   ing to senior GSA officials, analyzing and disseminating evaluation
Trends                  results provides a mechanism for, among other things, ensuring the
                        preservation and protection of GsA-operated buildings. However, GSA
                        does not routinely analyze and disseminate the results of delegated
                        building evaluations, which are similar to the evaluations of GsA-oper-
                        ated buildings.

                        GSAregional officials, an interagency task force, and delegated building
                        managers have recognized that sharing the delegated building evalua-
                        tion results would be beneficial. GSAregional officials responsible for

                        Page 9                                          GAO/GGDW76    Delegated   Buildings

overseeing delegated building operations said that if they had informa-
tion on the common problems found during delegated building evalua-
tions they would be aware of and in a position to prevent or correct
similar problems. The April 1985 Report of the Interagency Task Force
on Delegations of Authority recommended that GSA publish comparative
information on how the agencies carry out delegated responsibilities.
Further, building managers in the nine delegated buildings we visited
said that information identifying common problems and emerging trends
in building operations would be very helpful. For example, one manager
said that receiving a summary of common problems identified in dele-
gated building evaluations would help him avoid or identify and correct
such problems within his buildings. Another manager said that with
information on emerging trends, such as automated preventive mainte-
nance programs, she would have pursued instituting similar operations
in her building.

GSA  has made some efforts to communicate building problems and
trends, but has not routinely analyzed and disseminated the results of
delegated building evaluations. For example, the central office Delega-
tions Division staff, which is responsible for providing program policy,
coordination, and oversight, analyzed 21 delegated building evaluation
reports-covering     40 buildings- at the request of GSA’S Public Buildings
Service Commissioner. The Commissioner had this one-time analysis dis-
tributed at GSA’s March 1989 Assistant Regional Administrators’ Confer-
ence. The analysis highlighted operational problems and noted that
agencies were implementing automated preventive maintenance pro-
grams. According to a senior GSA official, the Commissioner instructed
GSA staff to investigate the highlighted problems and to look for similar
problems in other delegated buildings.

The Delegations Division has also encouraged the sharing of innovative
and effective programs at NCR Delegations Users Group meetings. The
NCR Users Group serves as a forum for delegated building officials in the
Washington, D.C., metropolitan area to discuss common delegation
issues.s The available minutes of the NCR Users Group meetings indicate
that officials from four different agencies made presentations on pro-
grams they had implemented in their buildings. Three officials gave
presentations on automated maintenance systems, and one official dis-
cussed his building’s energy management program.

“Similar building delegation groups do not exist in other GSA regions.

Page 10                                                        GAO/GGD!M-76   Delegated   Buildings

                       The Director of the Delegations Division gave two reasons why her staff
                       does not routinely analyze and disseminate the common problems and
                       emerging trends identified by the delegated building evaluation reports.
                       First, the staff has never considered doing routine analyses. Second, the
                       staff believes that the evaluation reports provide few examples of suc-
                       cessful agency implemented building management and/or operating
                       trends that could be used in other delegated buildings.

                       Our analysis of the completed evaluation reports, however, showed that
                       the reports did identify common problems and successful developments
                       in building operations. For example, the completed evaluation reports
                       showed that officials in 23 of the 76 buildings were having problems
                       accurately reporting annual building costs for standard-level services.
                       Also, 13 completed evaluation reports-covering     36 buildings-showed
                       that agency officials had automated various building management activ-
                       ities, such as energy management, preventive maintenance, or cost
                       accounting operations. Because GSA has no plans to analyze and dissemi-
                       nate the results of completed evaluations, and the NCR Users Group
                       meetings serve a limited audience, GSA regional and delegated building
                       officials may not receive information that could help them (1) identify,
                       correct, and/or avoid operational problems, and (2) implement new tech-
                       nologies that improve building operations.

Share GSA Building     GSA  has developed its Occupational Certification Program to improve the
                       professionalism and expertise of, among other occupations, GSA building
Manager Training       managers. The program’s building manager training curriculum identi-
Curriculum             fies (1) the knowledge, skills, and abilities that GSA believes are neces-
                       sary for its building managers, and (2) the training and developmental
                       activities that these managers should complete. For example, the curric-
                       ulum recommends that manager trainees complete rotational assign-
                       ments in day-to-day building operations such as repair and alteration,
                       physical security, and maintenance. However, GSA has not shared the
                       training curriculum with delegated building managers.

                       Over the years, GSA and other organizations have recognized that GSA
                       should provide structured training curriculums for agency staff to help
                       ensure that delegated buildings are operated effectively. Specifically,

                     . in September 1984, the GSA Inspector General recommended that GSA
                       develop a training program for agency staff to ensure an effective tran-
                       sition of building operation responsibilities;

                       Page 11                                      GAO/GGD90-76   Delegated   Buildings

l   in April 1985, the Interagency Task Force on Delegations of Authority
    recommended that GSA develop a real property management training
    curriculum to promote professionalism among delegated building man-
    agers; and
l   in February 1986,  GSA’s Public Buildings Service Commissioner said that,
    to help agencies operate delegated buildings, GSA will incorporate its
    building manager training curriculum into a governmentwide training

    GSA  has provided building management training to agency staff. The
    training consisted of courses, seminars, and/or workshops, and
    addressed such topics as contract administration, building maintenance,
    and building delegation funding. In addition, GSA has referred agency
    staffs to other sources of building operations training.

    However, agency and GSA regional officials said that GSA should take
    additional steps to improve the training offered and guidance provided.
    In the nine delegated buildings we visited, the agency officials responsi-
    ble for building operations said that specific courses in building manage-
    ment and administration and GSA’s building cost reporting requirements
    would be very helpful. They also said that GSA'S building manager train-
    ing curriculum would provide them with useful guidance for identifying
    the most beneficial training for their building management staff.

    The GSA regional officials responsible for overseeing delegated buildings
    in the three regions we visited also said that delegated building officials
    should receive more training. They cited building cost reporting and pre-
    ventive maintenance as two areas in which GSA should provide addi-
    tional training to improve delegated building operations. Further, they
    said that sharing GSA'S building manager training curriculum with
    agency officials would inform them of the courses and experiences that
    GSA believes a building manager needs.

    Because of resource constraints, senior GSA officials said that GSA
    focused its efforts on delegating operational authority to the agencies
    and did not develop structured training programs for delegated building
    personnel. GSA officials responsible for developing building manager
    training programs said that they had not considered sharing the curricu-
    lum with the agencies, but acknowledged that it could be done. Although
    Region III has shared GSA'S building manager training curriculum with
    selected agencies, NCR and Region IX have not. As a result, delegated
    building managers who did not receive GSA's curriculum may not be

    Page12                                        GAO/GGIMO-76DelegatedBuildings

                  acquiring the knowledge, skills, and abilities needed to effectively oper-
                  ate the buildings.

                  Although available evidence indicates that day-to-day delegated build-
Conclusions       ing operations-such      as cleaning or repairs-are adequate and agency
                  officials believe the quality of building services has improved, GSA can-
                  not determine whether delegated building operations are cost-effective.
                  GSA cannot make this determination because it lacks all cost and per-
                  formance data to oversee the program. Also, GSA'S required building cost
                  data for standard-level services are frequently inaccurate or sometimes
                  never received. Further, not all GSA regions analyze the building cost
                  data to identify inefficient operations.

                  GSA  has also missed opportunities to assist GSA regional and delegated
                  building officials-opportunities   that could improve delegated building
                  operations. Because GSA has not routinely disseminated available infor-
                  mation on common problems and the emerging trends in building opera-
                  tions to GSA regional and delegated building officials, they have not
                  benefitted from each other’s experiences. And because GSA has not
                  shared its building manager training curriculum with delegated building
                  officials, they may not have acquired the skills and experiences GSA
                  deems necessary to effectively manage buildings.

Recommendations   in our recent GSA management report, we recommend that the GSA
                  Administrator direct the regional offices to (1) work with the agencies
                  to ensure that cost data currently collected to oversee and monitor stan-
                  dard-level services are accurate and submitted to the appropriate
                  regional office, and (2) analyze the cost data to identify potential ineffi-
                  cient operations.

                  We also recommend that the Administrator require the Public Buildings
                  Service Commissioner to (1) identify common problems and the emerg-
                  ing trends associated with delegated building operations and communi-
                  cate them to GSA regional and delegated building officials, and (2) share
                  GSA'S building manager training curriculum with delegated agency

                  Page13                                         GAO/GGD-!JO-76LklegatedBuildings

                      In an April 6, 1990, letter the Acting Administrator of GSA provided
Agency Comments and   written comments on a draft of this report and generally agreed with
Our Evaluation        our recommendations. (See app. II.) Specifically, he said that GSA has
                      begun efforts to examine the most appropriate methods for collecting
                      total cost data on delegated buildings from the agencies and plans to
                      start gathering this information beginning in fiscal year 199 1. He also
                      said that GSA will (1) advise its regional offices that cost report data
                      should be carefully scrutinized and the reports incorporated into their
                      reviews of delegated buildings; (2) disseminate to the agencies common
                      problems, trends, and successes that GSA identifies during its building
                      evaluations; and (3) share its building manager training curriculum with
                      agency officials and work with them to identify what additional train-
                      ing/skills are needed, as well as the best methods to obtain them.

                      While the Acting Administrator generally agreed with our recommenda-
                      tions, he said that he saw no need to collect performance data beyond
                      that which is required through GSA'S evaluation program. We disagree.
                      GSA usually evaluates the operations of delegated buildings every 2
                      years. As mentioned in our recent GSA management report, collecting
                      performance data only when making periodic evaluations limits GSA'S
                      oversight capability. By more frequently collecting this information
                      from agencies, GSA could more regularly and thoroughly assess the qual-
                      ity and quantity of delegated building services and compare the level of
                      services being provided in similar delegated and non-delegated buildings
                      within the same geographic area.

                      As agreed with the Subcommittee, we are sending copies of this report
                      to the Administrator of the General Services Administration, the Direc-
                      tor of the Office of Management and Budget, and other interested par-
                      ties. Copies of this report will also be made available to others upon

                      Page 14                                     GAO/GGD90-76   Delegated   Buildings

Major contributors to this report are listed in appendix III. If you have
any questions regarding this report, please contact me on 275-8676.

Sincerely yours,

L. Nye Stevens
Director, Government Business
   Operations Issues

Page 16                                       GAO/GGD-SO-76   Delegated   Buildings

Letter                                                                                                    1
Appendix I                                                                                           18
Statistics on Nine
Delegated Buildings
Appendix II                                                                                          19
Comments From the
General Services
Appendix III
Major Contributors to
This Report


                        GSA       General Services Administration
                        NCR       National Capital Region

                        Page 16                                     GAO/GGD!W76   Delegated   Buildings
Page 17   GAO/GGLNl-76   Delegated   Buildings
Statistics on Nine Government-Operated
Delegated Buildings Visited

                                                   Occupiable    square                 FY 1989
Department/agency       building and location                       feet    operating    budget    Type facility   management
National Capital Region
Department of Labor                                             1,191,813           $6,437,700     In-house
   Frances Perkins Building
   Washrngton, D.C.
Department of State                                             1,612,085           $6,618,700     In-house
   Main State Building
   Washington, D.C.
Federal Trade Commissron                                         164,490            $1,276,600     In-house
   FTC Building
   Washinaton. D.C
Region III
Social Security Administration                                   390,530            $2,379,600     Commercial contract
   Mid-Atlantic Program Service Center
   Philadelphia, Pa.
U.S. Coast Guard                                                  79,661                $583,400   In-house
   Fifth Distnct Headquarters
   Portsmouth, Va.
Region IX
Internal Revenue Service                                         456,085            $2,577,500     In-house
   Fresno Service Center
   Fresno, Calif.
Minerals Management Service                                       57,125                $215,400   Commercial contract
   Federal Buildina
   Los Angeles, C&f.
Social Security Administration                                   400,130            $2,091,200     In-house
   Western Program Service Center
   Richmond, Calif.
U.S. Geologrcal Survey                                            55,833                $112,800   In-house
   Flaqstaff Field Center
   Flagstaff, Anz.

                                                Page 18                                       GAO/GGD9@76     Delegated   Buildings
Appendix II

Comments From the General
Services Administration

                                            General Services Administration
                                                Washington, DC 20405

              April     6,   1990

              The Honorable        Charles      A. Bowsher
              Comptroller       General     of the
                United     States
              General     Accounting       Office
              Washington,       DC 20548
              Dear    Mr.    Bowsher:
              Thank you       for the opportunity               to comment on the             draft     General
              Accounting        Office   (GAO) audit            report,   "Delegated            Buildings
              Adequately        Operated   But Better             GSA Oversight      Is       Needed."
              The report       offers    a number of recommendations,            which we generally
              concur     with,     that  would serve      to enhance    the General      Services
              Administration's          (GSA's)   oversight      role.    As indicated      in the
              report,      the delegations       program,     as viewed    by agencies      and as
              demonstrated         in the results      of GSA's reviews       of delegated
              operations,        has been a highly        successful    program.
              We have continuously               explored         ways to improve           program
              effectiveness          by providing           training        and technical         advice       to
              agencies.          Based on an assessment                 of agency       training       needs,     we
              developed        and provided         training         courses,       specifically         tailored     to
              delegatee        agencies,       in contract           administration            and lease
              management.          A total       of 24 classes            were held in Washington,                DC;
              Kansas City,         MO: San Francisco,                CA: Philadelphia,            PA; and
              Los Angeles,         CA.     Over 500 delegatee                agency     personnel        attended
              these     courses      at no cost other              than travel         expenses.         We have held
              three     training       conferences,           which     included       workshops       on technical
              and administrative             issues       relating        to real      property      management.

              We have provided              keynote        speakers       at a delegated           agency     forum in
              our National            Capital     Region        to address         agencies     on real       property
              management          issues.        We established,             with     the endorsement           of the
              Office      of Management           and Budget,           a system        of allocation         accounts
              to monitor          and account           for spending         under the delegation               program.
              We have developed               and implemented             an evaluation         program,        that
              mirrors       the program          utilized         in evaluating          our non-delegated
              facilities,           to ensure         that    the assets         are properly         maintained       and,
              where necessary.              worked with           agencies       to correct        any deficient
              areas.        We have disseminated                  information         on operational          issues     to
              agencies        on a wide spectrum                of topics        such as environmental
              issues,       e.g.,      radon or asbestos.                 We have reviewed            an agency's
              headquarters            delegations          program      to determine         their     effectiveness
              of the management               of their        delegated        sites.

                       Page 19                                                             GAO/GGD90-76       DelegatedBuilclings
         Appendix II
         Comment.9 From the General
         Services Adminbtration

                                           -    2 -

We acknowledge          the need to collect          total  cost data on delegated
buildings      and have begun to examine               the most appropriate       methods
to obtain      this     information.         Our plan is to start       gathering      this
information        beginning       in fiscal    year 1991.        We do not,    however,
believe     there     is a need to collect           any additional     performance
data over and above that              which is required         through  our evaluation
program     which     focuses      on service    delivery     in terms   of quality        and
We appreciate       the time and effort     you and your staff   have devoted
to developing       this  draft   report,  and we look forward   to working
with you to continue         to improve   GSA's program.    Our detailed
comments    regarding     the recommendations     of the report  are
Thank    you   for    the   opportunity    to    comment   on this     report.

ccting     qdministrator

         Page 20                                                  GAO/GGDM-76      Delegated     Buildings
       Appendix    II
       Comments      From the General
       Services   Administration

                                     ON THE GAO DRAFT
                         BUT BETTERGSA OVERSIGHTNEEDED"

All   Cost and Performance              Data     Are   Not   Available

The General Services Administration       (GSA) agrees that there is a
need to capture total cost data on delegated buildings.          This
information    will prove helpful in gauging total financial
activity    in each facility.    In fact, we have, in response to the
recommendations of GAO's general management review of GSA
 (GAO/GGD-M-103), begun exploring different       approaches to
collecting    this information   from agencies.   By the beginning of
fiscal year 1991, we intend to publish a Federal Property
Management Regulation which will address this requirement.
Standard     Level     Cost Report6            Are Inaccurate            or Not Received
The report states that annual standard level cost reports
required under the delegation     agreement are inaccurate or not
received by GSA’s regional offices.       In addition,  in those
instances where regions receive the reports many of them do not
routinely   analyze the data.    We agree that these reports can
serve as a tool to examine inefficiencies      in operations.     We will
advise our regional offices of the importance of incorporating
cost reports in their reviews of delegated facilities         and that
they carefully    scrutinize  the data submitted.
Communicate        Common Problems and Emerging                   Trends
Effective   communication has been an intrinsic   part of the
delegations   program. We have hosted delegations     forums, issued
policy guidance on a myriad of subjects impacting the performance
and management of the delegations   program, co-chaired a quarterly
delegated agency user group meeting, and worked with agencies at

       Page 2 I                                                             GAO/GGD-90-76   Delegated   Buildings
        Appendix II
        Comments From the General
        Services Administration

local   and headquarters levels to provide technical                advice as well
as resolve    areas of concern.        We agree that communicating
information    on emerging trends and common problems to our
regional office staffs and delegated building managers is a
worthwhile endeavor and believe that this is yet another method
to ensure the continued success of the delegations                  program.      We
have included in our strategic          plan a requirement that we define
and establish     distinct    roles for our regions,         support centers       and
field offices to assist,         coordinate,   train,    monitor,      and evaluate
agencies in the performance of their delegated                responsibilities.
As part of this enhanced communication effort,                we will
disseminate the results of all building             operational       evaluations
to the respective       agencies, identifying       common trends or problems
as well as sharing success in accomplishing              efficiencies         in
Share GSA Building       Manager Training       Curriculum
The report discusses the benefits of GSA sharing its building
manager training       program with delegated agency officials.             As
stated in the report,        we have offered    a wide range of training
opportunities      to the agencies in the form of conferences,            l-day
seminars, and formalized training          courses.     We have continuously
endeavored to satisfy agencies' training            requirements     wherever
possible.       We will personally     work with the agencies to share our
building      manager training   curriculum and explore what additional
training/skills       are needed, and the most appropriate         methods,
(either in-house or private,         or a combination)      to obtain them.

        Page22                                                GAO/GGDW-76DelegatedBuildings
Appendix III

Major Contributors to This Report

                        Gerald Stankosky, Assistant Director,
General Government        Government Business Operations Issues
Division, Washington,   Gerald P. Barnes, Assignment Manager
                        Wesley M. Phillips, Evaluator

                        Keith Oleson, Evaluator-in-Charge
San Francisco           Eddie W. Uyekawa, Evaluator
Regional Office         Delores J. Ammay, Evaluator

(014030)                Page 23                                   GAO/GGLHO-76   Delegated   Buildings