DOD Rental Payments to GSA

GAO discussed the Department of Defense's (DOD) rental payments to the General Services Administration (GSA) for office space. GAO noted that: (1) the President's 1993 budget estimates that DOD payments will increase from $385 million in 1992 to $402 million in 1993, but the payments will actually decrease to $369.7 million, since the budget mistakenly included the Air Force's $32.6 million contribution for Pentagon renovation; (2) DOD attributes the total increase in its rental payments for building space from $1.05 billion in 1992 to $1.1 billion in 1993 to Pentagon renovation costs; and (3) the Pentagon renovation plan is scheduled to take 11 years and cost $1.03 billion. GAO also noted that the: (1) Federal Buildings Fund does not generate sufficient revenue to meet operating and capital needs, due to flaws in the Fund's design, periodic rent restrictions, a backlog of neglect in existing buildings, rising dependence on costly leased space, a budget structure that makes short-term leasing look attractive, the lack of a well-articulated location policy, and the failure to develop a strategic plan to reverse disinvestment and provide high-quality working space; and (2) increasing lack of confidence in the Federal Building Fund has resulted in the removal of the Pentagon from GSA custody, congressional granting of independent leasing authority to some agencies, and proposed legislation to abolish the fund.