Key Issues > High Risk > Managing Federal Real Property
High Risk Medallion

Managing Federal Real Property

This information appears as published in the 2013 High Risk Report.

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The federal government faces long-standing problems in managing federal real property, including effectively managing excess and underutilized property, an overreliance on leasing, and protecting federal facilities. The government has given high level attention to this issue and has made progress in real property management, but the underlying challenges that hamper reform remain. Specifically, the government continues to lack consistent, accurate, and useful data to support decision making. In addition, competing stakeholder interests regarding the disposition of excess real property, and legal requirements such as those related to environmental cleanup also present challenges. The Federal Protective Service (FPS) has struggled to effectively target limited resources for protecting federal facilities. Additionally, challenges persist with the Department of Defense’s management of its real property (see DOD Support Infrastructure Management for an update on this topic).

The federal government holds excess and underutilized property, relies extensively on costly leasing practices, and faces numerous challenges in securing real property. The government has made progress reforming real property management after GAO designated it high risk in 2003. For example, the 2004 Executive Order 13327 established the Federal Real Property Council (FRPC), composed of members from real property-holding agencies to promote reform efforts. However, the federal government has not yet fully addressed the underlying challenges that hamper reform, including legal requirements, a lack of accurate and useful data to support decision-making, and competing stakeholder interests. For example, although GAO recognized data improvement efforts in its 2011 high risk update, the government still has limited data that support strategic decision making. In addition, competing stakeholder interests, and legal requirements agencies must adhere to, such as those related to environmental cleanup and historic preservation, present a challenge to disposing of real property. In May 2011, the administration proposed legislation, referred to as the Civilian Property Realignment Act (CPRA). CPRA would, among other things, establish a legislative framework for disposing of and consolidating civilian real property. However, this and other real property reform legislation introduced in Congress have not been enacted.

The federal government continues to retain more real property than it needs. In June 2010, the President directed federal civilian agencies were to have achieved $3 billion in cost savings by 2012 through a number of methods, one of which was better management of excess properties. Although the Office of Management and Budget (OMB) and federal agencies believe they will reach their savings targets, the actual savings associated with selling excess and better managing underutilized property are not transparent and may be overstated. The lack of reliable data is a significant challenge to identifying and reducing the government’s unneeded and underutilized property. FRPC developed the Federal Real Property Profile (FRPP) database to collect key inventory information on the government’s real property holdings. However, FRPC has not followed sound data collection practices in designing and maintaining the FRPP, which raises concerns that the database is not a useful tool for describing the nature, use, and extent of excess and underutilized federal real property.

The federal government continues to rely heavily on leasing. The government often leases space from private landlords in the same real estate market where it also owns underutilized real property. This practice is inefficient, resulting in millions of dollars of additional costs to federal agencies. From 2006 to 2011, the amount of space that the General Service Administration (GSA), the leasing agent for many federal agencies, leased from the private sector grew more than 12 percent, while also losing millions of dollars on these leased assets. Even though agencies pay rent and fees to GSA that are designed to cover the costs, GSA has lost $200 million on leases since 2005, including $75 million in 2011 alone. As a result, GSA had to use funds generated from its owned inventory to offset the losses, which decreases the funds available to invest in GSA’s owned assets. In some cases, federal agencies in the same market could consolidate into other government-owned properties. However, agencies do not have a strong understanding of real property held by other agencies and may lack the authority or expertise to lease underutilized property to other federal agencies.

Federal agencies also continue to face challenges in securing real property. For example, FPS management and funding challenges have hampered the agency’s ability to protect about 9,000 federal facilities managed by GSA. In particular, FPS has limited ability to allocate resources using a risk management strategy and lacks appropriate oversight and enforcement to manage its growing contract guard program. In addition, while GAO found that FPS’s approach to collaborating with state and local law enforcement was reasonable and consistent with key practices, FPS lacked the data needed to fully put these collaboration efforts into practice.

Sustained progress is needed to address the conditions and underlying challenges that make this area high risk. Multiple administrations have committed to a more strategic approach toward managing real property. However, their efforts have not yet fully addressed the underlying challenges that GAO identified. GAO has recommended as a corrective action plan that OMB, in consultation with FRPC, develop a national strategy for managing federal excess and underutilized real property. Additionally, FRPP is not yet a useful tool for describing the nature, use, and extent of excess and underutilized federal real property. Accordingly, GAO has recommended that GSA and FRPC take action to improve the FRPP to increase federal capacity to implement and monitor corrective measures. Finally, to better protect facilities, agencies such as FPS should develop a comprehensive program to increase its capacity to allocate budget-limited physical security resources to the highest needs.

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    • David Wise
    • Director, Physical Infrastructure
    • (202) 512-2834
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