Federal Real Property:

Strategic Partnerships and Local Coordination Could Help Agencies Better Utilize Space

GAO-12-779: Published: Jul 25, 2012. Publicly Released: Sep 14, 2012.

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What GAO Found

The federal government owns facilities that are underutilized in locations where it also leases space. In some cases, space within these government-owned properties could be occupied by other government agencies. This is particularly true for the U.S. Postal Service (USPS), for which declining mail volume and operational changes have freed space in many facilities. However, this potential for collocation of federal agencies is affected by such factors as the size, location, and condition of the available space.

Officials from various agencies said that, in some cases, collocation could result in more efficient service delivery and cost savings or avoidance. For example, underutilized USPS floor and retail window space could be used by other federal agencies, generating space-use efficiencies for USPS and expanding citizen access to government services. Collocation could also help achieve agency synergies, such as shared technology infrastructure.

Agency officials said that strategic partnerships among federal agencies targeted to meet specific needs and a formal local coordination mechanism could mitigate certain challenges to collocation, including administrative and data challenges. Agencies have varying authorities to share available space in their properties and differing capabilities to handle the administrative tasks associated with sharing space. The General Services Administration (GSA), as the federal government’s property manager, possesses the capability and experience to market properties and manage leases on a large scale. Officials from other agencies suggested that partnerships with GSA or a private entity could address some administrative challenges and improve collocation efforts. However, the ability to identify collocation opportunities is hindered by the lack of a formal information-sharing mechanism. The Federal Real Property Council (FRPC) is a national, policyoriented body and, as such, does not manage the local-level negotiations that collocation would require. The FRPC established a database describing all executive branch properties, but it was not designed to identify and manage collocation opportunities, nor does it include USPS data. In contrast, local federal officials indicated that they possess detailed knowledge of specific properties owned by their respective agencies and, with more structured local coordination, could share that knowledge to support collocation efforts. GSA officials said that local councils were an effective method for sharing information

Why GAO Did This Study

GAO designated the federal government’s management of its nearly 400,000 real property assets as high-risk in part because of overreliance on leasing and the retention of excess facilities. Real property management is coordinated nationally by the FRPC—an association of landholding agencies chaired by the Deputy Director for Management of the Office of Management and Budget (OMB). To explore the potential to reduce leasing by better utilizing owned properties, GAO was asked to examine: (1) the potential for collocation and the factors that can affect that potential, (2) the possible benefits of collocation, and (3) the challenges associated with collocation, and what solutions, if ny, can mitigate these challenges. GAO reviewed property data and documents from eight of the largest propertyholding agencies; laws, regulations and guidance; and prior GAO reports. GAO also analyzed eight case study markets of varying size and federal agency presence, and interviewed agency officials.

What GAO Recommends

OMB should work with FRPC and USPS to, among other things, (1) lead the creation of strategic partnerships between GSA and other property-owning federal agencies with less experience sharing real property, and (2) establish a mechanism (including USPS) for local coordination to improve coordination and identify specific opportunities to share space. OMB, GSA, and USPS generally agreed with the recommendations. The details of agencies’ comments and GAO’s response are addressed more fully within the report.

For more information, contact David J. Wise at (202) 512-2834 or wised@gao.gov.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: GAO designated the federal government's management of its nearly 400,000 real property assets as high-risk in part because of overreliance on leasing and the retention of excess facilities. To address this and other real property challenges, the Congress and the Office of Management and Budget (OMB) have begun efforts to promote colocation--moving federal operations from one stand-alone location to a federal location occupied by another entity--and real property management reform. In 2012, GAO reported that the federal government owns facilities that are underutilized in locations where it also leases space. In some cases, space within these government-owned properties could be occupied by other government agencies. However, this potential for collocation of federal agencies is affected by such factors as the size, location, and condition of the available space. Officials from various agencies said that a formal local coordination mechanism could mitigate certain challenges to collocation. Agencies have varying authorities to share available space in their properties and differing capabilities to handle the administrative tasks associated with sharing space. The General Services Administration (GSA), as the federal government's property manager, possesses the capability and experience to market properties and manage leases on a large scale. However, the ability to identify collocation opportunities is hindered by the lack of a formal information-sharing mechanism. The Federal Real Property Council (FRPC)--a national, policy-oriented body--established a database describing all executive branch properties, but it was not designed to identify and manage collocation opportunities. Therefore, GAO recommended that OMB, in cooperation with FRPC, should establish a mechanism to improve coordination and identify specific opportunities to share space. In 2016, GAO confirmed that OMB has worked with GSA to deploy new real property tools, including the Asset Consolidation Tool (ACT). ACT enables agencies to: (1) search the Federal Real Property Profile and the Public Service's Occupancy Agreement databases for potential collocation opportunities, and (2) access information about available space in close proximity to their own space that may be potential candidates for collocation . With ACT, the agencies have an information sharing mechanism that put them in a better position identify and coordinate collocation opportunities.

    Recommendation: To promote colocation across agencies, the Director of the Office of Management and Budget (OMB) should work with the Federal Real Property Council (FRPC) and the U.S. Postal Service (USPS) to establish a mechanism, which includes USPS, for local coordination in markets with large concentrations of federal agencies to identify, on a case by case basis, specific opportunities to share space and improve coordination of real property use across agencies.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Closed - Implemented

    Comments: GAO designated the federal government's management of its nearly 400,000 real property assets as high-risk in part because of overreliance on leasing and the retention of excess facilities. To address this and other real property challenges, the Congress and the Office of Management and Budget (OMB) have begun efforts to promote colocation-moving federal operations from one stand-alone location to a federal location occupied by another entity-and real property management reform. In 2012, GAO reported that the federal government owns facilities that are underutilized in locations where it also leases space. In some cases, space within these government-owned properties could be occupied by other government agencies. However, this potential for collocation of federal agencies is affected by such factors as the size, location, and condition of the available space. Agency officials said that greater collaboration-through strategic partnerships among federal agencies targeted to meet specific needs and a formal local coordination mechanism-could mitigate some administrative, financial and data challenges to colocation. Agencies' varying real property-management authorities can create administrative challenges, which officials said could be addressed through a strategic partnership with the General Services Administration (GSA). Agencies face challenges identifying colocation opportunities because of limitations with available data and the lack of a coordination mechanism. Although real property management is coordinated nationally by the Federal Real Property Council (FRPC)--an association of landholding agencies chaired by the Deputy Director for Management of OMB--given these challenges, GSA is the only agency that has a core mission of managing real property. Several landholding agencies lack the experience and administrative tools necessary to effectively market and manage their property as a landlord. Creating cross-agency relationships with GSA to assist in tasks such as setting rental rates, crafting lease documents, renovating space, and otherwise managing the property would improve consistency of approach and allow each agency to remain focused on its core mission. Therefore, GAO recommended that OMB should work with FRPC to lead the creation of strategic partnerships and coordinated strategy between GSA and other property-owning federal agencies with less experience sharing real property. In 2015, OMB released a National Strategy for the Efficient Use of Real Property (National Strategy) to guide federal agencies' efforts in managing and decreasing the federal government's real property footprint. OMB's National Strategy outlined, among other things, reducing the size of the inventory by consolidating, collocating, and disposing of properties. OMB and GSA coordinated and initiate dialogue with the agencies to support the National Strategy. Simultaneously, OMB worked with GSA and the FRPC to deploy GSA's Asset Consolidation Tool (ACT). ACT enables agencies to identify available space in close proximity to their own space that may be potential candidates for collocation . As a result of these actions, OMB has establishing a government-wide framework and a tool for overcoming real property management and coordination challenges.

    Recommendation: To promote colocation across agencies, the Director of the Office of Management and Budget (OMB) should work with the Federal Real Property Council (FRPC) and the U.S. Postal Service (USPS) to develop strategic partnerships and a coordinated strategy with assigned roles and tasks between the General Services Administration (GSA) and other federal landholding agencies (USPS specifically) with less experience sharing real property.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Closed - Implemented

    Comments: GAO designated the federal government's management of its nearly 400,000 real property assets as high-risk in part because of overreliance on leasing and the retention of excess facilities. To address this and other real property challenges, the Congress and the Office of Management and Budget (OMB) have begun efforts to promote colocation--moving federal operations from one stand-alone location to a federal location occupied by another entity--and real property management reform. In 2012, GAO reported that federal officials seemed to agree that colocation can produce efficiencies, data limitations, such as the lack of tools, make it difficult to estimate the financial and nonfinancial benefits from collocating federal agencies, because the quality of any estimate is a direct function of the input data. Moreover, colocation will not always be more cost-effective than leasing in the short run, particularly if the costs to reconfigure owned space are high. Generally, however, agencies lack the tools--such as a standardized approach for quantifying costs and benefits--to determine whether, and to what extent, colocations will generate or are generating intended savings or financial benefits, metrics that are key to helping agencies manage their resources. Therefore, GAO recommended that OMB develop and implement tools and supporting guidance on the benefits of collocating federal agencies. In 2015, OMB issued government-wide guidance--the National Strategy for the Efficient Use of Real Property--providing a foundation to further help agencies strategically manage real property. The National Strategy outlined key steps to improve real property management, which included reducing the size of the inventory by consolidating, collocating, and disposing of properties, among other things. In response to an OMB directive, GSA deployed the Asset Consolidation Tool that enables agencies to (1) search the Federal Real Property Profile and the Public Service's Occupancy Agreement databases for potential collocation opportunities, and (2) access information about available space in close proximity to their own space that may be potential candidates for collocation. With this tool and guidance, policy makers are able to develop the information they need to effectively weigh colocation as an option.

    Recommendation: To promote colocation across agencies, the Director of the Office of Management and Budget (OMB) should work with the Federal Real Property Council (FRPC) and the U.S. Postal Service (USPS) to develop and implement tools, along with supporting guidance, to measure, evaluate, and disseminate information on financial and nonfinancial benefits, such as service delivery improvements, from colocating federal agencies.

    Agency Affected: Executive Office of the President: Office of Management and Budget

 

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