Federal Real Property:

Strategic Focus Needed to Help Manage Vast and Diverse Warehouse Portfolio

GAO-15-41: Published: Nov 12, 2014. Publicly Released: Nov 12, 2014.

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What GAO Found

The federal government's vast civilian warehouse inventory supports a wide range of agencies' storage needs; however, some data in the Federal Real Property Portfolio (FRPP) are not transparent for decision makers. According to the fiscal year 2013 FRPP data, three civilian agencies—the General Services Administration (GSA), the Department of the Interior (Interior), and the Department of Energy (DOE)—held or leased the most civilian warehouse space. GSA's warehouse portfolio— the largest covering about 29-million square feet—was divided across multiple agencies. This is because of GSA's landlord role to provide federal agencies with space from its government-owned inventory, as well as through leases with private companies. In the FRPP, GSA classified nearly all of this warehouse space as utilized and active. However, GAO found that among these warehouses were buildings that were vacant for extended periods of time. This discrepancy raises questions about the transparency and usefulness of FRPP warehouse data, which could be misinterpreted by decision makers, including Congress and the Office of Management and Budget.

GSA, Interior, and DOE officials reported a wide range of challenges in acquiring , managing , and disposing of warehouse space, for example:

Storage specifications related to the materials being stored, such as humidity controls for paper documents, can pose challenges acquiring space.

Aging and historical facilities can be difficult to manage because they require costly maintenance or may no longer meet agencies' storage requirements.

Agencies are required to address contamination or environmental concerns when disposing of warehouses—for example through sale or demolition—which can be expensive and time consuming. Disposing of warehouses in remote or secured areas can be particularly challenging.

GSA has taken steps to fulfill its real-property leadership role for the warehouse portfolio, but its approach lacks strategic focus. As the government's landlord, GSA has applied needs assessment and alternatives evaluation—leading capital-planning practices—to help agencies acquire warehouse space. However, GSA applied these practices on an asset-by-asset basis, rather than as part of a larger strategy rooted in priorities and a long-term plan, per leading practices. A strategic approach could help GSA overcome what are often seen as intractable challenges, such as a reliance on costly, long-term leasing or taking action to dispose of aging and obsolete assets. Additionally, GSA has a leadership role as a government-wide policy maker in the real property area. As part of the Freeze the Footprint policy, which directs agencies not to increase the total square footage of their domestic office and warehouse inventory compared to a fiscal year 2012 baseline, GSA has a role to consult with other agencies on more effective practices and efficient use of warehouse and office space. Despite past efforts, GSA has not fulfilled this government-wide policy role by providing a strategy for efficient use of warehouse space or leveraging its landlord experience to strategically address some of the challenges facing federal agencies. Such a strategy could encourage agencies to rethink their overall storage needs, and consolidate and colocate, when possible.

Why GAO Did This Study

GAO has identified managing the federal government's real property portfolio—which includes warehouses— as a high-risk area, due to long-standing problems such as reliance on long-term leasing. In 2013, federal civilian agencies reported that they occupied approximately 19,000 warehouses consisting of approximately 90-million square feet of space. GAO was asked to examine the management of federal civilian warehouses.

This report examines (1) available information on the characteristics of federal warehouses held or leased by civilian agencies; (2) the challenges selected civilian agencies report in acquiring, managing, and disposing of warehouse space; and (3) the extent to which GSA has fulfilled its federal real property leadership role with respect to warehouses. GAO analyzed fiscal year 2013 FRPP data on warehouses held or leased by federal civilian agencies; visited 30 GSA, Interior, and DOE warehouses—selected to reflect a variety of uses and sizes—and interviewed officials from the three agencies about real property data, the characteristics of warehouses, challenges to warehouse management, and GSA's real-property leadership role.

What GAO Recommends

GAO recommends that GSA take actions to (1) enhance transparency of the FRPP data, (2) develop and implement a strategy to prioritize and plan for warehouse space, and (3) develop a strategy for its government-wide policy role in relation to warehouses. GSA generally agreed with the recommendations.

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

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In our 2014 report on the management of federal civilian warehouses and the available information on the characteristics of federal warehouses held or leased by civilian agencies, we found that some data in the General Services Administration (GSA) Federal Real Property Portfolio (FRPP) are not transparent for decision makers. GSA's warehouse portfolio covers 29 million square feet and is spread across multiple agencies. This is because of GSA's landlord role to provide federal agencies with space from its government owned inventory, as well through leases with private companies. GSA classified nearly all of its warehouse space as utilized and active in the FRPP. However, we found that among these warehouses were buildings that were vacant for extended periods of time. This discrepancy raises questions about the transparency and usefulness of FRPP warehouse data, which could be misinterpreted by decision makers, including Congress and the Office of Management and Budget. We recommended that in GSA's FRPP documents, GSA should make transparent how its mission, which is to provide space to federal agencies, affects the reporting of its real property portfolio as it relates to utilization and status data elements. GSA agreed with our recommendation that it should make transparent in its FRPP documents how its mission affects the reporting of its real property portfolio. Subsequently, GSA included a statement in the fiscal year 2014 and 2015 FRPP Annual Reports clarifying how GSA's mission affects the reporting of real property assets as it pertains to utilization and status data elements. Including a clarifying statement enhances the usefulness of GSA's data and of all warehouse portfolio data government-wide. Improving transparency will potentially help GSA and others make better informed decisions regarding warehouse space.

    Recommendation: To enhance the transparency of the FRPP data and help GSA make more informed decisions regarding the planning, effective and efficient management, and disposal of civilian warehouse assets, in GSA's FRPP documents, GSA should make transparent how its mission, which is to provide space to federal agencies, affects the reporting of its real property portfolio as it relates to utilization and status data elements.

    Agency Affected: General Services Administration

  2. Status: Open

    Comments: The General Services Administration (GSA) analyzed warehouse data and determined that the existing tools and processes are the most appropriate way to treat warehouses because these tools and processes consider warehouses within the context of local markets, client agencies, and GSA's short and long-term investment plans. However, GSA continues to lack a strategic approach to prioritize warehouses and make long-term, informed decisions about government warehouse space. Further, in light of GSA's aging warehouse inventory and agencies' modern-day storage needs, there is potentially a growing gap between what GSA can provide from the government's owned portfolio and what the tenant agencies require. Because the agency lacks a strategy focused on its warehouse portfolio, GSA may have limited ability to address this potentially growing gap as well as the unique challenges facing GSA's warehouse portfolio. Such a strategy would enable GSA and tenant agencies to prioritize their needs and take a long-term view of the warehouse inventory to support better informed decisions. We will follow-up with GSA regarding this recommendation, which is intended to enhance GSA's existing tools and processes, as they relate to warehouses.

    Recommendation: To enhance the transparency of the FRPP data and help GSA make more informed decisions regarding the planning, effective and efficient management, and disposal of civilian warehouse assets, in GSA's landlord role, which is performed by the Public Buildings Service, and as part of its efforts to address our 2012 recommendation to develop and publish a comprehensive 5-year capital plan, GSA should develop and implement a strategy specific to warehouses. This strategy should apply capital-planning leading practices, involving prioritization and long-term planning, to the warehouse portion of GSA's portfolio.

    Agency Affected: General Services Administration

  3. Status: Closed - Implemented

    Priority recommendation

    Comments: GAO has identified managing the federal government's real property portfolio?which includes warehouses? as a high-risk area, due to long-standing problems such as reliance on long-term leasing. In 2013, federal civilian agencies reported that they occupied approximately 19,000 warehouses consisting of approximately 90-million square feet of space. In 2014, GAO reported that GSA has taken steps to fulfill its real-property leadership role for the warehouse portfolio, but its approach lacks strategic focus. GSA has helped agencies consolidate their warehouse space and reduce their footprint. While GSA has followed some leading practices in capital- decision making to fulfill agencies' warehouse space needs, GSA has applied these practices on a case-by-case, asset-by-asset basis. Thus, GSA lacked a strategic approach to help it overcome what are often seen as intractable challenges, such as a reliance on costly, long-term leasing or taking action to dispose of aging and obsolete assets. Additionally, GSA has a leadership role as a government-wide policy maker in the real property area. As part of the Freeze the Footprint policy, which directed agencies not to increase the total square footage of their domestic office and warehouse inventory compared to a fiscal year 2012 baseline, GSA had a role to consult with other agencies on more effective practices and efficient use of warehouse and office space. Despite past efforts, GSA had not fulfilled this government-wide policy role by providing a strategy for efficient use of warehouse space or leveraging its landlord experience to strategically address some of the challenges facing federal agencies. Therefore, GAO recommended that in its government-wide policy role, GSA should develop a strategy for its role in promoting effective and efficient practices in warehouse management across the federal government, including, but not limited to: warehouse management guidance that GSA could develop, lessons learned that GSA could promote, and the type of leadership that GSA could provide to agencies as they assess their warehouse portfolios. In 2017, GAO confirmed GSA developed best practices in warehouse management and a standard guide for strategic warehousing. GSA created a publicly available website to provide strategic guidance, best practices and information about successful initiatives regarding warehousing. This website contains the best practices developed by GSA as well as those from other agencies. GSA also advertised the website in the Federal Register to inform the agencies. Finally, GSA issued a bulletin to the heads of federal agencies on warehousing and storage of assets that provides guidance for agencies to develop effective warehousing programs. Among other things, this bulletin includes guidance on warehouse location, layout, and special storage considerations. As a result, GSA is strategically promoting effective and efficient use of warehouse space government wide.

    Recommendation: To enhance the transparency of the FRPP data and help GSA make more informed decisions regarding the planning, effective and efficient management, and disposal of civilian warehouse assets, in its government-wide policy role, which is performed by Office of Government-wide Policy, GSA should develop a strategy for its role in promoting effective and efficient practices in warehouse management across the federal government, including, but not limited to: warehouse management guidance that GSA could develop, lessons learned that GSA could promote, and the type of leadership that GSA could provide to agencies as they assess their warehouse portfolios.

    Agency Affected: General Services Administration

 

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