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United States Government Accountability Office: 
GAO: 

Report to the Chairman, Subcommittee on Federal Financial Management, 
Government Information, Federal Services, and International Security, 
Committee on Homeland Security and Governmental Affairs, U.S. Senate: 

July 2012: 

Federal Real Property: 

Strategic Partnerships and Local Coordination Could Help Agencies 
Better Utilize Space: 

GAO-12-779: 

GAO Highlights: 

Highlights of GAO-12-779, a report to the Chairman, Subcommittee on 
Federal Financial Management, Government Information, Federal 
Services, and International Security, Committee on Homeland Security 
and Government Affairs, U.S. Senate. 

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 any, can mitigate these challenges. GAO reviewed 
property data and documents from eight of the largest property-holding 
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 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 (see figure). 

Figure: Condition of Federally Owned Property with Underutilized Space: 

[Refer to PDF for image: 2 photographs] 

Recently renovated space; 
World War II era storage hut in present day. 

Source: GAO. 

[End of figure]  
 
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, policy-oriented 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. 

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. 

View [hyperlink, http://www.gao.gov/products/GAO-12-779]. For more 
information, contact David J. Wise at (202) 512-2834 or wised@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Underutilized Owned Federal Space Exists, but Size, Location, and 
Condition Affect Colocation Potential: 

Colocation Could Yield Service-Delivery Efficiency and Cost-Avoidance 
Benefits in Some Cases: 

Greater Inter-Agency Collaboration Could Mitigate Some Challenges to 
Colocation: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments: 

Appendix I: Scope and Methodology: 

Appendix II: Selected Leasing and Retention of Proceeds Authorities 
for In-Scope Agencies: 

Appendix III: Comments from the U.S. Postal Service: 

Appendix IV: Comments from the Department of Veterans Affairs: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Figures: 

Figure 1: Total Square Footage Comparison for Federal Civilian 
Agencies' Properties, Fiscal Years 2010 to 2012: 

Figure 2: Examples of Vacant and Underutilized USPS Space: 

Figure 3: GSA-Held Vacant Space in Dallas, Texas: 

Figure 4: Vacant USPS Space in Easton, Pennsylvania, Requiring 
Renovation: 

Figure 5: Building 1 at the Philadelphia Navy Yard: Exterior, Interior 
Unfinished, Interior Finished: 

Figure 6: The Former Downtown Philadelphia USPS Mail Processing and 
Distribution Center, Now IRS Offices: 

Figure 7: Examples of Federally Held Spaces Described in the FRPP: 

Figure 8: Examples of Spaces Used by Interior at a Leased Site: 

Abbreviations: 

CPRA: Civilian Property Realignment Act: 

DEA: Drug Enforcement Administration: 

DHS: Department of Homeland Security: 

DOD: Department of Defense: 

DOE: Department of Energy: 

FBF: Federal Buildings Fund: 

FBI: Federal Bureau of Investigation: 

FRPC: Federal Real Property Council: 

FRPP: Federal Real Property Profile: 

FSA: Farm Service Agency: 

GPRA: Government Performance and Results Act: 

GRPIS: Governmentwide Real Property Information Sharing program: 

GSA: General Services Administration: 

IG: Inspector General: 

IRS: Internal Revenue Service: 

NRCS: Natural Resources Conservation Service: 

NPS: National Park System: 

OIG: Office of Inspector General: 

OMB: Office of Management and Budget: 

SSA: Social Security Administration: 

UFC: Unified Facilities Criteria: 

USDA: Department of Agriculture: 

USPS: U.S. Postal Service: 

VA: Department of Veterans Affairs: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

July 25, 2012: 

The Honorable Thomas R. Carper: 
Chairman: 
Subcommittee on Federal Financial Management Government Information, 
Federal Services, and International Security: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

Dear Mr. Chairman: 

The federal government's real property inventory includes nearly 
400,000 owned and leased buildings located throughout the country. 
[Footnote 1] As we have reported, the federal government retains more 
owned property than it needs while simultaneously leasing property 
from other entities, a practice that is not cost-efficient in the long 
run, resulting in millions of dollars of additional costs to the 
federal government.[Footnote 2] In addition to an overreliance on 
leasing, federal agencies continue to face long-standing problems, 
such as excess and underutilized property and protecting federal 
facilities. Because of these issues, we have designated the management 
of federal real property as a high-risk area.[Footnote 3] 

There are current efforts promoting colocation--moving federal 
operations from one stand-alone location to a federal location 
occupied by another entity--and real property management reform. For 
example, several versions of the Civilian Property Realignment Act 
(CPRA) are pending in Congress and are aimed at, among other things, 
reducing the operating and maintenance costs of federal civilian real 
properties by disposing of unneeded properties; realigning other 
properties by consolidating, colocating, and reconfiguring space; and 
by realizing other operational efficiencies.[Footnote 4] A Senate 
bill, the Federal Real Property Asset Management Reform Act of 2012, 
would 1) impose new duties on federal agencies to maintain inventory 
controls and establish goals for reducing inventories of underutilized 
properties, 2) establish and direct the Federal Real Property Council 
(FRPC)--chaired by the Office of Management and Budget (OMB)--to 
establish an asset management plan and submit an asset disposal plan, 
and 3) require the Administrator of General Services Administration 
(GSA) and the FRPC to establish and maintain a database of agency real 
property.[Footnote 5] Additionally, postal reform legislation includes 
a specific provision related to colocation between USPS and other 
federal agencies, establishing and tasking the FRPC with identifying 
federal agency field offices that could be colocated with USPS and 
other civilian properties and permitting federal agencies to lease 
space for their field offices from USPS.[Footnote 6] In May 2012, OMB 
also released a memorandum directing agencies to offset any growth in 
new building space with corresponding decreases through 
consolidations, colocations, or disposal of space from the agency's 
inventory.[Footnote 7] 

To help inform the discussion, you asked us to examine issues 
surrounding opportunities for colocating federal agencies by which the 
federal government could reduce privately owned, leased space by 
consolidating onto underutilized federally owned property. This report 
addresses: 

(1) whether the potential for colocation exists and, if so, what 
factors can affect that potential; 

(2) the potential benefits of colocation; and: 

(3) the challenges associated with colocation and what solutions, if 
any, might help mitigate these challenges. 

To examine these issues, we analyzed real property data from eight 
agencies with substantial domestic property portfolios: the 
Departments of Agriculture (USDA), Defense (DOD), Energy (DOE), 
Homeland Security (DHS), Interior (Interior), and Veterans Affairs 
(VA); GSA; and the U. S. Postal Service (USPS). Using available real 
property data provided by the agencies and ranging from fiscal years 
2007 to 2012, supplemented by interviews with regional and national 
level agency officials, we selected eight U.S. markets in which we 
conducted case studies. We selected these eight markets to represent 
markets of various sizes, geographic regions, owned and leased federal 
properties, and agencies present. In the case study markets with DOD 
properties, we focused only on DOD properties not located on military 
bases. We also reviewed relevant legislation and analyzed data and 
documentation provided by the agencies. 

We conducted this performance audit from July 2011 through July 2012 
in accordance with generally accepted government-auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. Further 
details on our scope and methodology can be found in appendix I. 

Background: 

Federal Real Property: 

The federal government's vast real property inventory reflects the 
diversity of agencies' missions and includes office buildings, 
prisons, post offices, courthouses, laboratories, and border stations. 
The Federal Real Property Profile (FRPP) is a database of owned and 
leased space held by executive branch agencies. It is maintained by 
GSA on behalf of the FRPC, although FRPC controls access to the data. 
[Footnote 8] In 2010, FRPP data indicated that 24 executive branch 
agencies held about 3.35-billion square feet of building space. 
[Footnote 9] These agencies reported that 79 percent of the total 
reported building space was federal-government owned; 17 percent was 
leased, and 4 percent of the space was otherwise managed.[Footnote 10] 
The eight agencies we reviewed--USDA, DOD, DOE, DHS, DOI, VA, GSA, and 
USPS--reported holding over 3.32-billion square feet of building space 
or about 99 percent of reported square footage. 

Owned and Leased Space: 

GSA and USPS are the largest civilian holders of federally owned 
property. They hold the largest amounts of space, by square foot, of 
the civilian agencies that we examined. As noted previously, we 
excluded much of DOD's property from the scope of our review because 
of the security requirements of traditional military bases, which 
would make colocation with other agencies unlikely. GSA and USPS 
together hold more square footage--almost 660-million square feet--
than the other agencies we reviewed, excluding DOD, combined--over 454-
million square feet. (See figure 1.) Additionally, both agencies have 
a wide national presence--GSA-held properties exist in over 750 
markets and USPS-held property is in almost 36,000 cities and towns. 

Figure 1: Total Square Footage Comparison for Federal Civilian 
Agencies' Properties, Fiscal Years 2010 to 2012: 

[Refer to PDF for image: horizontal bar graph] 

Agency: GSA; 
Total owned square footage: 182.0 million square feet; 
Total leased square footage: 193.0 million square feet. 

Agency: USPS; 
Total owned square footage: 198.3 million square feet; 
Total leased square footage: 84.0 million square feet. 

Agency: Other agencies[A]; 
Total owned square footage: 407.3 million square feet; 
Total leased square footage: 47.0 million square feet. 
 
Sources: GAO analysis of GSA, DNS, USPS, and FRPP data.      

[A] DOD data are excluded from this analysis. 

Note: This analysis includes active buildings only; land and 
structures or property that are disposed, excess, or inactive are not 
included. USDA, DOE, GSA-"leased," Interior, VA data are from fiscal 
year 2010; DHS and GSA-"owned" data are from fiscal year 2011, and 
USPS data are from fiscal year 2012. 

[End of figure] 

Federal agencies, particularly GSA in its role as broker and property 
manager to the civilian portion of the U.S. government, rely on costly 
leasing, and the number of federal government leases has increased in 
recent years. The civilian federal agencies we reviewed held leases in 
close to 41,000 assets covering nearly 324-million square feet of 
space, with GSA and USPS leasing the most space.[Footnote 11] Nearly 
all of GSA's leases are for other tenant agencies--for example, its 
four largest customers in the leased inventory are the Department of 
Justice, DHS, the Social Security Administration (SSA), and Department 
of Treasury (Treasury)--based upon those agencies' identified needs. 
According to GSA's annual portfolio report, since fiscal year 2008, 
its leased inventory has experienced faster growth than its owned 
inventory. We have reported that over time GSA has relied heavily on 
operating leases to meet new long-term needs because it lacks up-front 
funding needed to purchase buildings or space.[Footnote 12] In 
addition, GSA has reported operational losses related to leasing, once 
indirect overhead expenses have been allocated, in recent years. 
[Footnote 13],[Footnote 14] 

GSA's Role: 

GSA is authorized by law to acquire, manage, utilize, and dispose of 
real property for most federal agencies. GSA is able to enter into 
lease agreements for up to 20 years that the Administrator of GSA 
considers to be in the interest of the federal government and 
necessary to accommodate a federal agency.[Footnote 15] GSA uses this 
authority to lease space on behalf of many federal government agencies. 

In 2004, the administration added managing federal real property to 
the President's Management Agenda and the President issued an 
executive order, applicable to 24 executive departments and agencies 
1) establishing FRPC and 2) requiring FRPC to work with GSA to 
establish and maintain a single, comprehensive database describing the 
nature, use, and extent of all federal real property held by executive 
branch agencies, except when otherwise required for reasons of 
national security.[Footnote 16] FRPC worked with GSA to create the 
FRPP to meet this requirement. FRPC is chaired by the Deputy Director 
for Management of OMB and is composed of Senior Real Property Officers 
from the 24 executive departments and agencies, the Controller of OMB, 
the Administrator of GSA, and any other full-time or permanent part-
time federal officials or employees as deemed necessary by the 
Chairman of the Council. The order does not apply to USPS and FRPC 
does not work directly with USPS on the management of its real 
property.[Footnote 17] These efforts notwithstanding, we have 
previously reported that the federal government continues to face a 
number of challenges to effectively managing its real property. 
[Footnote 18] In particular, we have reported on challenges to 
disposing of excess properties, making better use of properties that 
are underutilized, and reducing overreliance on leasing.[Footnote 19] 

USPS Challenges: 

USPS, which is an independent establishment of the executive branch, 
is authorized to sell, lease, or dispose of property and is exempt 
from most federal laws dealing with real property and contracting. 
[Footnote 20] Although declining mail volume and changes to its 
operations have resulted in excess capacity and facility space 
throughout the postal network, our recent work has shown that USPS 
faces challenges, such as legal restrictions and local stakeholder 
influences, that have limited its ability to close postal facilities 
in order to restructure its retail and processing network.[Footnote 
21] For example, USPS has often faced resistance from affected 
employees, communities, and elected officials when it has attempted to 
consolidate its processing operations and networks or close mail-
processing facilities because of concerns about possible effects on 
service, employees, and communities. USPS recently announced that it 
will maintain existing retail locations, with modified operating 
hours. As a result of these issues, USPS has more space than it needs. 
Our recent work has also shown that USPS faces a deteriorating 
financial condition. For example, at the end of fiscal year 2011, the 
USPS had incurred a $5.1-billion loss for the year, had $2 billion 
remaining on its $15-billion borrowing limit,[Footnote 22] and 
projects it will be unable to make its $5.5 billion scheduled retiree 
health benefits payment to the federal government.[Footnote 23] In 
addition, USPS was conceived as a financially self-sufficient entity, 
but its revenues do not cover costs at about 80 percent of its retail 
facilities.[Footnote 24] 

Underutilized Owned Federal Space Exists, but Size, Location, and 
Condition Affect Colocation Potential: 

Underutilized Owned Space: 

The federal government owns facilities that are underutilized in 
locations where it also leases space for different purposes. This is 
particularly true for USPS, as declining mail volume and changes in 
operations have freed space in many owned facilities. While there are 
problems with using governmentwide data to identify underutilized 
space, as will be discussed later in this report, we observed 
underutilized space held by multiple federal entities in the case 
study markets we visited for this report. For example, in each case 
study market, we observed one or more cases of vacant or underutilized 
space in post offices, including both offices and space on the 
processing floor, that officials said could be re-configured and 
physically separated from USPS operations (see figure 2.) 

Figure 2: Examples of Vacant and Underutilized USPS Space: 

[Refer to PDF for image: 4 photographs] 

Vacant USPS offices (top) and underutilized spaces on the processing 
floor (bottom). 

Source: GAO. 

[End of figure] 

In some cases, spaces within these underutilized owned properties 
could be used by other government agencies. According to a recent 
report by the USPS Office of Inspector General (OIG) related to post 
office utilization, excess floor and retail window space exists 
nationwide that could be used by other government agencies or used to 
perform transactions on behalf of other government agencies.[Footnote 
25] The USPS OIG's office also conducted several regional studies 
examining excess USPS space and noted a correlation between space 
leased by GSA and the ability of USPS to significantly accommodate 
federal space needs. For example, one of those studies estimated that 
of the USPS districts reviewed, USPS excess space may accommodate 147 
of 175 (or 84 percent) of agencies' current federal leases, and noted 
that GSA paid considerably more per square foot than the value 
assigned to USPS space. However, the Inspector General (IG) did not 
determine whether the excess space identified was usable for sharing 
with other agencies, in part because USPS systems and policies do not 
identify usable areas, and noted that more information would be 
necessary to determine whether USPS's excess space would be suitable 
for another government tenant. 

Space Size, Location, and Condition Affect Colocation Potential: 

We observed several attributes that could affect using underutilized 
space for colocation. These attributes included size, location, and 
condition, which would likely render some spaces more appropriate for 
sharing than others. Much of the underutilized space we observed was 
small--only several hundred to a few thousand square feet. We also 
observed underutilized space that was not contiguous. Both of these 
attributes could limit those spaces' suitability for effective 
colocation. Furthermore, underutilized space that we observed varied 
in terms of its location within facilities. For example, GSA and VA 
officials described having some space that is less desirable to 
potential tenants. Although we observed generally high occupancy in 
GSA's multi-agency federal buildings, GSA officials showed us some 
space they said is not easily leased because of its location, such as 
a first floor interior office bordering the building's maintenance 
hallways or windowless basement spaces, and noted that these extra 
spaces can remain in GSA buildings when an agency does not require the 
entirety of a vacant space. VA officials noted similar issues, in that 
empty or available space at its campuses is often located in buildings 
surrounded by other VA buildings, which can make it harder for outside 
parties to access and use. 

Additionally, we observed underutilized space in a wide range of 
conditions, from rundown to newly renovated, which could also affect 
colocation options. GSA officials said that a variety of physical 
aspects of the space may factor into the desirability of the space for 
colocation, including ceiling height, support column size, lighting, 
and windows. For example, Figure 3 shows interior office space in a 
GSA-held federal building in downtown Dallas that GSA officials told 
us has been vacant for years, a vacancy that they attributed to the 
lack of natural light and the large support columns that make it 
difficult to place workstations. 

Figure 3: GSA-Held Vacant Space in Dallas, Texas: 

[Refer to PDF for image: photograph] 

Source: GAO. 

[End of figure] 

Colocation Could Yield Service-Delivery Efficiency and Cost-Avoidance 
Benefits in Some Cases: 

Federal officials we spoke with indicated that colocation could result 
in improved government operations through increased efficiencies for 
service access or delivery to the public in some cases. For example, 
VA officials stated that their incentive for colocation is to expand 
veterans' medical care efficiently, and that sharing space with other 
agencies with similar missions, such as the U.S. Army, could help 
achieve that goal and avoid duplicating medical capacity. Moreover, 
according to a recent report by the USPS OIG, the Postal Service would 
benefit from sharing post office space with other government entities 
while generating revenue and increasing efficiency by expanding 
citizen access to government operations. For example, USPS currently 
has interagency agreements to provide non-postal government services, 
such as accepting passport applications and Selective Service 
registration forms. DHS officials discussed broadly how DHS is often 
colocated with USDA, the Drug Enforcement Administration (DEA) and the 
Federal Bureau of Investigation (FBI) because those agencies have 
complementary missions to certain DHS operations. These colocations 
take place in both GSA-held and DHS-held space. While not inter-
agency, Interior officials described how the agency has tried to 
colocate its various bureaus for the sake of agency synergies, 
especially since the public often does not distinguish among the roles 
of the bureaus. They noted that integrating services in space or 
function is a good practice that could occur across agencies. USDA 
officials also said that the colocation of the Farm Service Agency 
(FSA) and the Natural Resources Conservation Service (NRCS) provided 
synergies because they are able to share databases and pass 
information more readily between the two entities. 

Federal officials also said that, under certain circumstances, 
colocation could result in cost savings or avoidance for the federal 
government. For example, DHS officials described the department's 
examination of colocation opportunities within the department, and 
cited one case it studied where cost savings could result from 
productivity gains, reduced redundancy, and cost avoidance. USPS 
officials in multiple locations noted USPS would benefit from revenue 
from a federal agency tenant. For example, USPS could share 
underutilized floor and retail window space with other government 
agencies, generating revenue to offset some building costs. 
Additionally, GSA officials described the motivation to accomplish 
savings from consolidation and colocation as responsible asset 
stewardship. 

While federal officials seemed to agree that colocation can produce 
efficiencies, data limitations, such as the lack of a national, multi-
agency asset-management tool as discussed in the next section, make it 
difficult to estimate the financial and nonfinancial benefits from 
colocating 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. For 
example, DOD officials said that it cost $20 million to renovate a 
vacant 70,000-square-foot warehouse within the Naval Support Facility 
in suburban north Philadelphia and move the Navy Human Resources 
Service Center there from leased commercial space. They estimated that 
the payback period for the move would exceed 30 years. Information on 
cost and service delivery improvements from colocations can help 
agencies decide whether to proceed with colocations and aid agencies 
in evaluating completed colocations. 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. 
Moreover, some federal officials indicated that quantitatively 
measuring the nonfinancial results of colocations, such as 
intergovernmental collaboration, was difficult to do because these are 
difficult concepts to monetize, as they can be subjective. We found 
that agencies generally lacked the tools to measure the costs and 
benefits of colocation efforts. Our work on capital decision making 
has shown that establishing an analytical framework for review, 
approval, and selection of projects; evaluating a project's results; 
and incorporating lessons learned into the decision-making process are 
all key principles and practices of such an effort.[Footnote 26] 
Establishing a framework with a mixture of financial and nonfinancial 
benefits, such as service delivery improvements, allows entities to 
better evaluate performance. 

Greater Inter-Agency Collaboration Could Mitigate Some Challenges to 
Colocation: 

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 GSA. Acquiring the needed up-front 
financing for repair or renovation remains challenging for agencies, 
although some agencies have secured up-front financing through 
partnerships with private entities. Agencies face challenges 
identifying colocation opportunities because of limitations with 
available data and the lack of a coordination mechanism. Officials 
from a few agencies suggested that structured local or regional 
coordination could best identify opportunities where the missions of 
various agencies could be "matched" to appropriate space because of 
local and regional federal officials' more detailed knowledge of local 
needs, conditions, and opportunities. 

Administrative Challenges: 

Agencies have varying real property management authorities related to 
colocation, including the ability to share property and retain the 
proceeds, and this variation can create administrative challenges for 
agencies seeking to increase inter-agency colocation opportunities. 
For example, USPS can share its property with private or government 
entities and retain the proceeds,[Footnote 27] but other agencies may 
not be able to do so.[Footnote 28] DOE officials reported that the 
agency is allowed, under certain circumstances, to share government-
owned real property, but it is not allowed to retain the proceeds, 
unless provided for in its annual appropriation. In addition, even if 
an agency has the authority to share real property, it may not be well-
prepared to handle tasks such as setting lease rates and managing the 
financial arrangements for renovations. For example, GSA officials 
said some agencies do not know what rates to charge for the space they 
would share with other agencies. Moreover, Navy officials said 
agencies with the authority to share properties can face 
administrative challenges managing the many various sources of funds 
potentially needed should extensive renovations be necessary to bring 
properties up to usable condition. 

Officials from six agencies as well as commercial real estate 
officials said that to overcome some of these administrative 
challenges and improve colocation efforts, agencies could address 
specific challenges through a strategic partnership with GSA. They 
said GSA has administrative structures and experiences that could 
benefit less-experienced agencies. For example, GSA, as the federal 
government's property manager, already possesses the capability to 
market and price properties and manage leases on a large scale. Our 
previous work on the Government Performance and Results Act (GPRA) 
[Footnote 29] also supports the idea that strategic partnerships could 
be beneficial to overcoming these challenges. We have reported that 
cross-government agency collaboration can produce more public value 
than can be produced when agencies act alone.[Footnote 30] 
Specifically, agencies can enhance and sustain their collaborative 
efforts by engaging in a variety of practices[Footnote 31] such as 
establishing policies and procedures to operate across agency 
boundaries, by, for example, developing interagency handbooks that 
define common standards, policies, and procedures. During our review, 
officials from four agencies suggested that increased collaboration 
through some of these practices could help mitigate some of the 
administrative challenges of colocation. As a potential approach for 
these types of strategic partnerships, OMB officials described GSA's 
effort to work with selected agencies to develop strategic plans for 
future property needs and identify potential areas for consolidation. 

USPS has some experience collaborating with other agencies on real 
property issues, and as it explores further options to better utilize 
excess space, strategic partnerships with other agencies, particularly 
GSA, could help USPS overcome administrative challenges that may be 
impeding colocation. A February 2012 USPS OIG report said USPS has 
experience with intergovernmental collaboration because it already 
shares space in federal buildings and conducts transactions for other 
federal entities.[Footnote 32] For example, the Mansfield, Ohio, 
federal building hosts a post office as well as offices of SSA, the 
Internal Revenue Service (IRS), and the U.S. Department of Labor. The 
report noted that because many postal facilities are near many GSA-
leased properties, sharing space could potentially lower overall 
federal lease costs. The report recognized USPS's need to optimize its 
network through internal consolidations and closures, but said USPS 
could use its underutilized resources better through external 
collaboration. USPS management agreed with the OIG recommendation to 
develop and implement a strategy to address these findings. 

Financial Challenges: 

During our site visits, we found federally owned properties that could 
be made available for leasing; however, many of the spaces would need 
substantial repair or renovation, and acquiring the needed up-front 
financing remains challenging for agencies.[Footnote 33] For example, 
we saw several USPS properties in which the available space required 
substantial renovation to replace old carpet, peeling paint, and 
outdated fixtures, and to repair water damage (see figure 4). However, 
USPS's deteriorating financial condition may limit the costs it can 
incur to renovate its facilities prior to sharing them with other 
agencies.[Footnote 34] 

Figure 4: Vacant USPS Space in Easton, Pennsylvania, Requiring 
Renovation: 

[Refer to PDF for image: 2 photographs] 

Upstairs offices in the Easton Main Post Office with walls, ceilings 
and floors damaged by water. 

Source: GAO. 

[End of figure] 

We also observed spaces that would need potentially costly specialized 
repairs or renovations. For example, some of the U.S. Navy properties 
we visited at the mixed-use Philadelphia Navy Yard (see figure 5) 
would need asbestos abatement and water damage repair. Navy officials 
told us that the properties could be leased from the Navy by other 
government agencies, and that some agencies have made inquiries to do 
so. However, they said that the agencies were alarmed by the 
complexity and costs of repairs, which effectively ended any further 
consideration of the properties for colocation. Had any agencies 
pursued leasing the properties, Navy officials said they likely would 
lack sufficient up-front financing. In addition to general and 
specialized renovation costs, Navy officials said DOD Unified 
Facilities Criteria (UFC) requirements prescribe certain antiterrorism 
measures, such as blast-proof windows and security gates, which can 
further elevate the costs of renovations to DOD-owned buildings, both 
on and off-base. 

Figure 5: Building 1 at the Philadelphia Navy Yard: Exterior, Interior 
Unfinished, Interior Finished: 

[Refer to PDF for image: 3 photographs] 

Source: GAO. 

[End of figure] 

The up-front costs of renovations present a challenge to GSA that 
hinders its colocation efforts. GSA regional officials said that 
financing renovations is the most serious challenge they face in 
improving the utilization of their assets. Regional officials said 
they have considered acquiring vacant USPS facilities that could 
support colocation, but have been reluctant to do so in part because 
of the up-front cost of the extensive renovations needed to make the 
properties usable. As we have previously reported, in recent years 
budgeting and appropriations decisions, made by the executive branch 
and Congress, have limited the amount of resources made available from 
the Federal Buildings Fund to GSA to fund real property operations, 
acquisition, and maintenance.[Footnote 35] GSA headquarters officials 
told us that these limitations make it challenging for the agency to 
effectively manage its portfolio and result in delayed or canceled 
projects. 

In an era of resource constraints and competing priorities, some 
agencies have secured up-front financing through partnerships with 
private entities. Federal officials suggested that such strategic 
partnerships have helped agencies respond to financial challenges 
associated with renovations, although our previous work has shown this 
option generally adds expense. Both GSA and USPS cited previous IRS 
consolidations into underutilized USPS properties in Kansas City and 
Philadelphia that were arranged using private financing to overcome a 
lack of up-front federal funding. These arrangements involved multiple 
stakeholders and were large-scale, complex arrangements designed to 
replace outdated regional IRS offices (see figure 6).[Footnote 36] 
Private real estate development and GSA regional officials said that 
if GSA had access to up-front funding to renovate the building, the 
Philadelphia arrangement would not have been necessary, and the 
property could have remained in the federal inventory.[Footnote 37] 
This outcome would have made redevelopment more cost-efficient for the 
government in the long-term, because as we have reported, renovations 
financed by the private sector will generally cost more than those 
financed by Treasury borrowing.[Footnote 38] 

Figure 6: The Former Downtown Philadelphia USPS Mail Processing and 
Distribution Center, Now IRS Offices: 

[Refer to PDF for image: 4 photographs] 

A private entity took title of and renovated the 1935 building, and 
now leases it back to the federal government. 

Source: GAO. 

[End of figure] 

Data Challenges: 

The only national-level, multi-agency real property database--the 
FRPP--was not designed to be an active asset management system. 
[Footnote 39] As such, it does not possess the level of detail 
necessary to support the identification of colocation opportunities. 
The FRPP can provide basic descriptive information about the 
government's federal property holdings, such as address, square 
footage and facility type; however, colocation decisions would require 
more data elements than would be practical to add to the FRPP. For 
example, the FRPP provides square footage information, but it does not 
provide information on orientation or use of space. We visited a DHS-
held site where most of the facility was underground and much of the 
unoccupied space was used by environmental systems such as air 
filtration units and pumps that could not be removed. (See figure 7.) 
The FRPP does not reveal that the facility is underground, nor does it 
convey the substantial challenges to reconfiguring the space. 
Similarly, we found that one building under renovation was 
characterized as "underutilized" in the FRPP. While not technically 
incorrect, characterizing this space as underutilized can be 
misleading because the simple utilization designation does not 
necessarily indicate if the space can be immediately occupied or used 
for colocation. 

Figure 7: Examples of Federally Held Spaces Described in the FRPP: 

[Refer to PDF for image 2 photographs] 

The FRPP does not capture when "underutilized" buildings are under 
renovation (left) or when spaces cannot be occupied, such as areas 
used for environmental systems at an underground facility (right). 

Source: GAO. 

[End of figure] 

As a result, local and regional federal officials are generally better 
positioned than headquarters officials to manage the colocation 
process because of their more detailed knowledge of local needs, 
conditions, and opportunities. We found that detailed property 
knowledge necessary to facilitate colocations was concentrated at the 
regional and local levels, rather than at headquarters. When we asked 
for detailed information about specific properties, we were referred 
to local and regional federal officials, who were knowledgeable about 
specific sites and facilities. Some headquarters officials were 
familiar with attempts at colocation and could describe overall 
situations, but they were not the primary contacts for these efforts, 
nor could they readily describe the properties' attributes or local 
office needs. In general, local and regional federal officials said 
that they knew property details--such as space configuration, access 
routes, and parking availability--that would be important for 
facilitating colocations.[Footnote 40] In addition, FRPC, which 
created the FRPP database, is a national, policy-oriented body. As 
such, the scope of FRPC's mission does not include managing the local-
level negotiations that colocation would require. 

The detailed property knowledge held by local federal officials is 
important for ensuring an appropriate match between the agency that 
owns the property and the agency that would lease space. Officials 
from many agencies reported that matching the location of available 
property to the mission and security needs of the agency searching for 
space is an important consideration; for example, DOE's need for 
isolated, remote sites as compared to VA's interest in sites readily 
accessible to veterans. However, officials noted that there are no 
universal requirements regarding their respective agencies' property 
needs--rather, the property needs vary across the country in response 
to mission needs. In some cases, agencies have operational 
requirements that would make colocation inappropriate if the potential 
tenant and potential lessor did not share the same mission needs. For 
example, USPS officials noted the Postal Service's need to keep mail 
secure and separate from potential tenant agencies or members of the 
public who may need to access the facility. Additionally, officials 
from DOD told us that in some circumstances their security 
requirements would make them ill-suited to share space with other 
agencies, such as when public access would be required. However, in 
instances where mission needs were similar, potential tenants might 
see enhanced security as desirable. 

In other cases, an agency's mission may dictate the need for a 
specialized facility that could make colocation inappropriate. For 
example, USDA officials in a few regions told us that farmers often 
drove farm vehicles, including tractors, to Service Center locations 
and that in these cases, underground parking in a federal building 
would be problematic. In addition, we visited a leased Interior site 
that required a blacksmith and carpentry shop, cold storage for 
artifacts, and parking for large maintenance vehicles, such as wood-
chippers and industrial mowers (see photos in figure 8 below). An 
Interior official said that these needs would have to be taken into 
account to share space. None of these details are included in the 
FRPP, but local and regional officials from several agencies noted 
that they can speak readily on how mission needs and facility details 
may impact colocation. 

Figure 8: Examples of Spaces Used by Interior at a Leased Site: 

[Refer to PDF for image: 3 photographs] 

Interior carpentry space to repair historic design elements of Park 
Service property (left), a cold storage locker (center), and one of 
Interior's maintenance vehicles stored on-site (right). 

Source: GAO. 

[End of figure] 

Officials from several agencies acknowledged that property knowledge 
is sometimes communicated informally. However, various officials noted 
that the lack of a systematic mechanism to share information hinders 
any efforts to colocate. Officials from a few agencies suggested that 
structured local or regional coordination could best identify 
opportunities where the missions of various agencies could be 
"matched" to appropriate space. Several local officials who showed us 
vacant federal spaces said there is currently no online or formal 
mechanism they can use to share vacancy details with officials from 
other agencies who might need space. A previous effort at local 
coordination--the Governmentwide Real Property Information Sharing 
program (GRPIS)--experienced some success, according to GSA officials, 
which they attributed to connections made at the local level. The 
program was tasked with encouraging and facilitating the sharing of 
real property information among federal agencies, and it revolved 
around the formation of real property councils within major federal 
communities nationwide. GSA officials said that local councils were an 
effective method for sharing information. However, officials said the 
program became essentially inactive after responsibility for the 
program was transferred within GSA and local connections were lost. 

Conclusions: 

Colocating federal agencies into government-owned space represents an 
opportunity to improve government operations while simultaneously 
addressing two of the federal government's long-standing real-property 
management challenges: reducing over-reliance on costly leasing and 
the presence of underutilized owned property. Our analysis of eight 
markets shows that there are underutilized owned properties near areas 
where the government also leases space for other purposes. However, 
colocations are far more complicated than just matching the square 
feet needed with the square feet available. Agencies' mission needs 
and building-specific issues that include security, condition, 
configuration, and use must align for the colocation to fully succeed. 
FRPC has coordinated federal real property actions for almost a decade 
at the national level, but detailed local knowledge of agency missions 
and facility needs combined with systematic communication channels are 
needed to match owners with compatible tenants. 

Once matched, numerous capacity and administrative hurdles remain as 
challenges to successful colocation. 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. 

Colocation is not always the right answer. We found that agencies can 
force relocations into ill-suited locations, pushing the financial 
break even point out decades into the future. Without the tools to 
measure the benefits and costs of colocation efforts or proposals, 
policy makers are unable to effectively weigh colocation as an option. 
Understanding the financial costs and savings associated with 
colocation efforts, as well as the nature and extent of synergies and 
improved services, will allow agencies to better demonstrate that the 
benefits can be worth the costs of renovating and moving an agency out 
of privately leased space. 

Recommendations for Executive Action: 

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 implement GAO's 
three recommendations: 

* 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. 

* 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. 

* 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 Comments: 

We provided a draft of this report to OMB, GSA, USPS, VA, USDA, DOE, 
Interior, DHS, DOD, and IRS for review and comment. In commenting on a 
draft of this report, officials from OMB said that they agreed with 
the report's findings, conclusions, and recommendations and offered 
technical comments that we incorporated as appropriate. They said that 
OMB has little power over how USPS manages its real property assets. 
The officials also said that GSA has already started looking at 
consolidating tenant field operations within its portfolio, and 
suggested that the report clarify the role that we recommend GSA takes 
in facilitating consolidations. USPS agreed with the facts and 
findings in the report and provided comments regarding our 
recommendations. USPS's comments are contained in appendix III. GSA 
agreed with our recommendations and provided technical comments that 
we incorporated as appropriate. DHS and VA provided clarifying 
technical comments which we incorporated, where appropriate. VA's 
comments are contained in appendix IV. USDA, DOE, Interior, DHS, DOD, 
and IRS did not provide comments. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies to the 
Secretary of Agriculture, the Secretary of Defense, the Secretary of 
Energy, the Administrator of General Services, the Secretary of 
Homeland Security, the Secretary of the Interior, the Commissioner of 
Internal Revenue, the Director of the Office of Management and Budget, 
the Postmaster General, and the Secretary of Veterans Affairs. In 
addition, the report will be available at no charge on GAO's Web site 
at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions, please contact me at (202) 
512-2834 or wised@gao.gov. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this report. GAO staff who made key contributions to this 
report are listed in appendix V. 

Sincerely yours, 

Signed by: 

David J. Wise: 
Director, Physical Infrastructure Issues: 

[End of section] 

Appendix I: Scope and Methodology: 

Our objective was to review the issues surrounding colocation--that 
is, moving federal operations from one stand-alone location to a 
federal location occupied by another entity.[Footnote 41] To 
accomplish this, we addressed (1) if the potential for cross-agency 
colocation exists, what factors can affect that potential; (2) the 
potential benefits of colocation; and (3) the challenges associated 
with colocation, and what solutions, if any, can mitigate these 
challenges. During the course of our work we used the Federal Real 
Property Portfolio (FRPP), a government-wide database of owned and 
leased space, maintained by GSA on behalf of the Federal Real Property 
Council (FRPC). We recently reported that the FRPC has not followed 
sound data collection practices--related to data consistency, 
performance measures, collaboration, and data reporting--when 
collecting FRPP data, that would help them collect these data in a way 
that is sufficiently consistent and accurate to be useful making 
property management decisions.[Footnote 42] We recommended that GSA 
develop a plan to improve the FRPP consistent with sound data 
collection practices. Nonetheless, we also reported that the FRPP can 
be used in a general sense to track assets. As such, for this report, 
we used FRPP data for the limited purposes of identifying agencies 
within our scope, selecting case study markets and summarizing agency-
level statistics on owned and leased property. 

We used the 2010 Federal Real Property Portfolio (FRPP) summary report 
and U.S. Postal Service property data to identify the agencies which 
hold the largest amounts of property. We then limited our scope to 8 
of the top 10 agencies, which include the Departments of Agriculture 
(USDA), Defense (DOD), Energy (DOE), Homeland Security (DHS), the 
Interior (Interior), Veterans Affairs (VA), the General Services 
Administration (GSA), and the U.S. Postal Service (USPS).[Footnote 43] 

To determine the factors that can affect cross-agency consolidation, 
we analyzed detailed data and interviewed agency officials about the 
property holdings in 8 specific U.S. markets: Allentown PA, Cleveland 
OH, Dallas TX, Kansas City KS, Kerrville TX, Philadelphia PA, San 
Antonio TX, and Waco TX. To select these areas and provide nationwide 
statistics on owned and leased facilities, we analyzed basic inventory 
data, including location, occupant, size, owned/leased data from the 
FRPP for the 7 agencies in our scope that are represented in the FRPP. 
USPS, which is not represented in the FRPP, provided data from its 
internal systems. While case studies are not generalizable, we 
selected diverse markets in terms of market size, geographic region, 
owned and leased federal properties, and agencies present. Although we 
used GSA-defined markets as a guideline, to better reflect the 
interests of this review we delineated markets by using an estimated 
60-minute commute radius, and selected the borders based on 
professional judgment (for example, in more rural areas, following the 
direction of development.) We identified the primary cities of large 
and medium markets using GSA data, and then selected small markets 
within driving distance of a large or medium-sized market in order to 
facilitate travel. 

Because there are no reliable real property cost and benefit data, we 
primarily relied on interviews with federal agency officials at the 
national, regional, and local levels to determine the potential 
benefits of colocation. We focused on benefits that were mentioned by 
officials from more than one agency and more than one market. We also 
reviewed relevant GAO and other reports and documents, including USPS 
Office of Inspector General reports, and laws, regulations, and 
guidance. 

To determine the challenges associated with colocation and what 
solutions, if any, could mitigate these challenges, we visited 
facilities that were both owned and leased, with a particular emphasis 
on owned offices and warehouses that were categorized as 
underutilized.[Footnote 44] We did not include properties categorized 
as inactive, excess, or disposed in our scope, and we did not include 
land. Using this information, we conducted an analysis to identify key 
challenges that agencies face when making property decisions and the 
options, if any, for mitigating those challenges. We also interviewed 
agency officials at the national, regional, and local level, and 
reviewed documentation provided to us regarding specific properties. 
We did not examine any screenings for other potential uses of real 
property, such as use for the homeless or public benefit. To determine 
which challenges were the most pressing, we only included challenges 
which were raised in more than one market and by more than one agency. 

We conducted this performance audit from July 2011 through July 2012 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Selected Leasing and Retention of Proceeds Authorities 
for In-Scope Agencies: 

This list is not intended to be inclusive of all of an agency's real 
property authorities; there may be other authorities not included 
below that may authorize colocation. 

Agency: Agriculture (USDA); 
Relevant statute and description of authority: Enhanced Use Lease 
Authority Pilot Program; 
7 U.S.C. § 3125a note; 
The Secretary of Agriculture is authorized to establish a pilot 
program and lease nonexcess real property at the Beltsville 
Agricultural Research Center and the National Agricultural Library to 
any individual or entity, including agencies or instrumentalities of 
State or local governments, if the Secretary determines that the lease 
is consistent with, and will not adversely affect, the mission of the 
agency administering the property; will enhance the use of the 
property; will not permit any portion of the property or facility to 
be used for the public retail or wholesale sale of merchandise or 
residential development; will not permit the construction or 
modification of facilities financed by nonfederal sources to be used 
by an agency, except for incidental use; and will not include any 
property or facility required for any agency purpose without prior 
consideration of the needs of the agency. Consideration for any lease 
shall be for fair market value and for cash. The Secretary is 
authorized to enter into leases until June 18, 2013, and the term of 
the lease shall not exceed 30 years.[A] 
Retention of Proceeds/Enhanced Use Lease Authority Pilot Program; 7 
U.S.C. § 3125a note; Consideration for leases shall be deposited in a 
capital asset account, which is available until expended, without 
further appropriation, for maintenance, capital revitalization, and 
improvements to the department's properties and facilities at the 
Beltsville Agricultural Research Center and the National Agricultural 
Library. 

Agency: Defense (DOD)[B]; 
Relevant statute and description of authority: Leases of Non-Excess 
Property of Military Departments; 
10 U.S.C. § 2667; 
The Secretary of a military department is authorized to lease 
nonexcess real property under the control of the department that is 
not needed for public use if the Secretary considers the lease to be 
advantageous to the United States and upon such terms that will 
promote the national defense or be in the public interest. The term of 
the lease may not be more than 5 years, unless the Secretary 
determines the term should be longer to promote the national defense 
or to be in the public interest. Lease payments shall be in cash or in-
kind consideration for an amount not less than fair market value. In-
kind consideration includes maintenance, protection, alteration, 
repair, or environmental restoration of property or facilities; 
construction of new facilities; providing facilities; 
or providing or paying for utility services. 
Retention of Proceeds/Leases of Non-Excess Property of Military 
Departments; 
10 U.S.C. § 2667; 
Proceeds from leases of a military department are deposited into a 
special account in the Treasury and are available to the Secretary of 
that military department for such activities as maintenance, 
protection, alteration, or environmental restoration of property or 
facilities; construction of new facilities; lease of facilities; 
or payment of utility services. At least 50 percent of the proceeds 
received shall be available for activities at the military 
installations where the proceeds are derived. Prior to fiscal year 
2005, any amounts deposited in a special account from the disposition 
of property were only available as provided in an appropriation act. 
Beginning in fiscal year 2005, any amounts deposited into a special 
account from the disposition of property are appropriated and 
available for obligation or available to the Secretary without 
additional congressional action.[C] 
Conveyance or Lease of Existing Property and Facilities; 
10 U.S.C. § 2878; 
The Secretary concerned is authorized to convey or lease property or 
facilities, including ancillary supporting facilities to eligible 
entities at such consideration the Secretary concerned considers 
appropriate for the purposes of the alternative authority for 
acquisition and improvement of military housing and to protect the 
interests of the United States.[D] 
Retention of Proceeds/Conveyance or Lease of Existing Property and 
Facilities; 
10 U.S.C. § 2883; 
Proceeds from the conveyance or lease of property or facilities under 
10 U.S.C. § 2878 shall be credited to the Department of Defense 
Housing Improvement Funds. Proceeds may be used to carry out 
activities with respect to the alternative authority for the 
acquisition and improvement of military housing, including activities 
required in connection with the planning, execution, and 
administration of contracts subject to such amounts as provided in 
appropriation acts. 

Agency: Energy (DOE); 
Relevant statute and description of authority: Leasing of Property; 
42 U.S.C. § 7256; 
The Secretary of Energy is authorized to lease acquired real property 
located at a DOE facility that is to be closed or reconfigured and is 
not needed by DOE at the time the lease is entered into if the 
Secretary considers the lease to be appropriate to promote national 
security or is in the public interest. The term of the lease may be up 
to 10 years, with an option to renew the lease for another 10 years, 
if the Secretary determines that a renewal of the lease will promote 
national security or be in the public interest. Lease payments may be 
in cash or in-kind consideration and may be for an amount less than 
fair market value. In kind consideration may include services relating 
to the protection and maintenance of the leased property.
Retention of Proceeds/Leasing of Property; 
42 U.S.C. § 7256; 
To the extent provided in advance in appropriations acts, the 
Secretary is authorized to use the funds received as rents to cover 
administrative expenses of the lease, maintenance and repair of the 
leased property, or environmental restoration activities at the 
facility where the leased property is located. 

Agency: General Services Administration (GSA); 
Relevant statute and description of authority: Disposition of Real 
Property; 
40 U.S.C. § 543; 
The Administrator of GSA is authorized to dispose of surplus real 
property by sale, exchange, lease, permit, or transfer for cash, 
credit, or other property.
Conveyance of Property Consolidated Appropriations Act of 2005, Pub. 
L. No. 108-447, §412, 118 Stat. 2809, 3259 (2004); 
The Administrator of GSA, notwithstanding any other provision of law, 
is authorized to convey by sale, lease, exchange, or otherwise, 
including through leaseback arrangements, real and related personal 
property, or interests therein. 
Retention of Proceeds/Conveyance of Property Consolidated 
Appropriations Act of 2005, Pub. L. No. 108-447, § 412, 118 Stat. 
2809, 3259 (2004); 
Net proceeds from the disposition of real property are deposited in 
GSA's Federal Buildings Fund (FBF) and are used for GSA real property 
capital needs to the extent provided in appropriations acts. 

Agency: Homeland Security (DHS/U.S. Coast Guard); 
Relevant statute and description of authority: General Powers of the 
Commandant, U.S. Coast Guard; 
14 U.S.C. § 93(a)(13); 
The U.S. Coast Guard may rent or lease real property, not required for 
immediate use, for a period not exceeding 5 years. Payments received 
from the rental or lease, less amount of expenses incurred (exclusive 
of governmental personal services), to be deposited in the Treasury. 

Agency: Interior (DOI); 
Relevant statute and description of authority: Leases for National 
Park System (NPS); 
16 U.S.C. § 1a-2(k)(1)-(4); 
Interior is authorized to enter into a lease with any person or 
governmental entity for the use of buildings and associated property 
administered by the Secretary as part of the National Park System. 
Leases shall be for fair market value rental. Buildings and associated 
property leased shall be used for an activity that is consistent with 
the purposes established by law for the unit in which the building is 
located; shall not result in degradation of the purposes and values of 
the unit; and shall be compatible with National Park Service programs. 
Retention of Proceeds/Leases for NPS; 
16 U.S.C. § 1a-2(k)(5); 
Rental payments must be deposited into a special Treasury account 
where the availability of funds is not subject to an appropriation 
act. Funds are available for infrastructure needs such as facility 
refurbishment, repair and replacement, infrastructure projects 
associated with park resource protection, and direct maintenance of 
the leased buildings and associated properties. 
Leases for Housing NPS employees; 
16 U.S.C. § 17o; 
Interior is authorized where necessary and justified to make available 
employee housing, on or off the lands under the administrative 
jurisdiction of the National Park Service, and to rent or lease such 
housing to field employees of the National Park Service at rates based 
on the reasonable value of the housing. 
Housing for NPS employees; 
16 U.S.C. § 17o; 
Subject to the appropriation of necessary funds in advance, Interior 
is authorized to lease federal lands and interests in land to 
qualified persons for up to 50 years for the construction of field 
employee quarters. 
Presidio of San Francisco; 
16 U.S.C. § 460bb note; 
The Presidio Trust is authorized to enter into leases with any person, 
firm, association, organization, corporation or governmental entity 
necessary to carry out its authorized activities. The Presidio Trust 
is authorized to establish procedures for lease agreements for the use 
and occupancy of Presidio facilities. The National Park Service or any 
other Federal agency is authorized to enter into leases with the 
Presidio Trust which are necessary and appropriate. 

Agency: Postal Service (USPS); 
Relevant statute and description of authority: USPS Real Property 
Authorities; 
39 U.S.C. § 401(5); 
The Postal Service is authorized to acquire in any legal manner, real 
property or any interest therein, as it deems necessary or convenient 
in the transaction of its business and to hold, maintain, sell, lease, 
or otherwise dispose of such property or any interest therein. 
USPS Real Property Authorities; 
39 U.S.C. § 401(6); 
The Postal Service is authorized to construct, operate, lease, and 
maintain buildings, facilities, or equipment, and to make other 
improvements on any property owned or controlled by it. 
USPS Retention of Proceeds/Real Property Authorities; 
39 U.S.C. §§ 2003, 2401; 
Proceeds are deposited into the Postal Service Fund and remain 
available to the Postal Service without fiscal year limitation to 
carry out the purposes, functions, and powers of the Postal Service. 
All revenues received by the Postal Service are appropriated to the 
Postal Service and are available without additional congressional 
action. 

Agency: Veterans Affairs (VA); 
Relevant statute and description of authority: VA Transfer Authority - 
Capital Asset Fund; 
38 U.S.C. § 8118; 
The Secretary of VA is authorized to transfer real property under VA's 
control or custody to another department or agency of the United 
States, to a state or political subdivision of a state, or to any 
public or private entity, including an Indian tribe until December 31, 
2018. The property must be transferred for fair market value, unless 
it is transferred to a homeless provider. Property under this 
authority cannot be disposed of until the Secretary determines that 
the property is no longer needed by the department in carrying out its 
functions and is not suitable for use for the provision of services to 
homeless veterans by the department under the McKinney-Vento Act. 
Authority to Outlease; 
38 U.S.C. § 8122; 
The Secretary may lease for a term not exceeding 3 years lands or 
buildings, or parts or parcels thereof, belonging to the United States 
and under the Secretary's control. A lease made to any public or 
nonprofit organization may provide for the maintenance, protection, or 
restoration, by the lessee, of the property leased, as a part or all 
of the consideration for the lease. Prior to the execution of any such 
lease, the Secretary shall give appropriate public notice of the 
Secretary's intention to do so in the newspaper of the community in 
which the lands or buildings to be leased are located. The proceeds 
from such leases (less expenses for maintenance, operation, and repair 
of buildings leased for living quarters) shall be turned over to the 
Treasury of the United States as miscellaneous receipts. 
Retention of Proceeds/Transfer Authority; 
38 U.S.C. § 8118; 
Proceeds from the transfer of real property are deposited into the VA 
Capital Asset Fund and, to the extent provided in advance in 
appropriations acts, may be used for property transfer costs such as 
demolition, environmental remediation, and maintenance and repair; 
costs associated with future transfers of property under this 
authority; costs associated with enhancing medical care services to 
veterans by improving, renovating, replacing, updating, or 
establishing patient care facilities through minor construction 
projects; and costs associated with the transfer or adaptive use of 
property that is under the Secretary's jurisdiction and listed on the 
National Register of Historic Places. 

Source: GAO analysis: 

[A] This pilot program was enacted in the Food, Conservation, and 
Energy Act of 2008, Pub. L. No. 110-246, § 7409, 112 Stat. 1651, 2014-
2016 (2008). 

[B] Our review of DOD did not include real property at a military 
installation designated for closure or realignment under a base 
closure law. Therefore, for purposes of this appendix we have excluded 
DOD authorities relating to base closure or realignment. Additionally, 
while some authorities in this enclosure, such as 10 U.S.C. § 2667, 
contain subsections relating to base closure and realignment, for 
purposes of this enclosure we are referring to the other subsections 
of the statute. 

[C] Department of Defense Appropriations Act for Fiscal Year 2005, 
Pub. L. No. 108-287, § 8034, 118 Stat. 951, 978 (2004). 

[D] This authority does not apply to property or facilities located on 
or near a military installation approved for closure under a base 
closure law. See 10 U.S.C. § 2878(b). 

[End of table] 

[End of section] 

Appendix III: Comments from the U.S. Postal Service: 

Tom A. Samra: 
Vice President, Facilities: 
United States Postal Service: 

July 12, 2012: 

Mr. Keith Cunningham: 
Assistant Director: 
GAO: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Cunningham: 

Thank you for the opportunity to review the draft report entitled 
Strategic Partnerships and Local Coordination Could Help Agencies 
Better Utilize Space (GAO-12-779). As previously indicated, we are in 
agreement with the factual statements and findings contained in the 
report. However, with respect to the three recommendations for 
Executive Action, we have some concerns as follows: 

1) Recommendation calling for inclusion of USPS in local coordination 
efforts: USPS does not object to the concept of sharing space and will 
consider co-locating with other federal agencies. USPS prefers, 
however, that this be carried out on a case-by-case basis. Please note 
that USPS has implemented a proactive program to review and take steps 
necessary to consolidate and right-size space needs, as well as, to 
determine how to best utilize any resulting excess space. In 
situations where USPS has identified underutilized space, we are 
actively and aggressively pursuing third party tenants where deemed 
appropriate by engaging CBRE, a National Real Estate Services 
Provider. Such space is being marketed to generate revenue and reduce 
overall expense. While USPS can agree to make other federal agencies 
aware of available excess space, at this time based on the USPS' 
ongoing financial challenges and consolidation efforts, USPS 
ultimately needs the flexibility to lease excess space to a tenant, 
either private 3° party or federal agency, that provides the most 
synergistic and financial benefits to USPS. 

2) Recommendation to develop strategic partnerships with assigned 
roles and tasks: USPS does not object to the concept of developing 
strategic partnerships and has actively pursued opportunities with GSA 
where deemed to be mutually beneficial. Oftentimes, however, the cost 
involved to make the space conform to GSA standards is prohibitive and 
suggests that moving forward with a strategic partnership will be 
challenging. 

3) Recommendation to develop and implement tools: USPS does not have 
the financial or the human resources to develop and implement tools to 
measure and evaluate and disseminate information on non-financial 
benefits from co-locating federal agencies. 

In conclusion, USPS needs to maintain flexibility during these extreme 
times of uncertainty. While USPS has every intention of cooperating 
with the spirit of GAO's initiatives outlined in the report, USPS must 
ultimately be able to make decisions based on the best value and best 
result for USPS. 

Sincerely, 

Signed by: 

Tom A. Samra: 

Cc: Janie Bjork: 

[End of section] 

Appendix IV: Comments from the Department of Veterans Affairs: 

Department of Veterans Affairs: 
Washington DC 20420: 

July 11, 2012: 

Mr. David J. Wise: 
Director, Physical Infrastructure Issues: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Wise: 

The Department of Veterans Affairs (VA) has reviewed the Government
Accountability Office's (GAO) draft report, "Federal Real Property: 
Strategic Partnerships and Local Coordination Could Help Agencies 
Better Utilize Space" (GAO-12-779) and offers the enclosed comments. 

VA appreciates the opportunity to comment on your draft report. 

Sincerely, 

Signed by: 

John R. Gingrich: 
Chief of Staff: 

Enclosure: 

[End of letter] 

Enclosure: 

Department of Veterans Affairs (VA) Comments to Government 
Accountability Office (GAO) Draft Report: "Federal Real Property: 
Strategic Partnerships and Local Coordination Could Help Agencies 
Better Utilize Space" (GAO-12-779): 

General Comments: 

Page 9, Paragraph 1, Line 6: GAO states 'Furthermore, underutilized 
space that we observed varied in terms of its location within 
facilities. For example, GSA and VA officials described having some 
space that is less desirable to tenants." Later in the paragraph GAO 
states "VA officials noted similar issues, in that empty or available 
space at its campuses is often located in buildings surrounded by 
other VA buildings, which can make it harder for outside parties to 
access and use." 

Page 9, Paragraph 2, Line 1: GAO states 'Additionally, we observed 
underutilized space in a wide range of conditions." 

VA Comment: VA has made significant progress in reducing its inventory 
of excess or underutilized assets through reuse or disposal. However, 
as GAO has noted, there are challenges that frequently must be 
considered and overcome before disposals or reuses (including sharing 
of space) can occur. Much of VA's inventory is over 50 years old, with 
an average building age of 57 years. Thus, many of the buildings are 
designated as historic. In addition to the age of the inventory, many 
of these assets are in poor condition, and are located on large 
medical center campuses, with limited access to the general public. 
These are factors that must be considered when determining the 
appropriate use or disposal of the asset. The ability to sell, share, 
or repurpose assets, as well as the ability to demolish assets in some 
cases, can be significantly impacted by these factors. VA fully 
supports the sharing of assets where appropriate and we appreciate 
GAO's recognition of the challenges VA and many other agencies face in 
doing so. 

Page 10, Paragraph 1, Line 3: GAO states "For example, VA officials 
stated that their incentive for co-location is to expand veterans' 
medical care efficiently, and that sharing space with other agencies 
with similar missions, such as the U.S. Army, could help achieve that 
goal and avoid duplicating medical capacity." 

VA Comment: VA is currently operating a joint VA-Navy facility in 
North Chicago, Illinois, as an example of co-location with agencies 
with similar missions. In addition, through our Strategic Capital 
Investment Planning (SCIP) process, we are reviewing opportunities for 
additional DoD collaboration in the future. 

Page 16, Paragraph 2, Line 1: GAO states "In an era of resource 
constraints and competing priorities, some agencies have secured 
upfront financing through partnerships with private entities." 

VA Comment: As a part of its overall strategy to better manage vacant 
and underutilized property, VA has used this approach through its now-
expired Enhanced-Use Leasing (EUL) authority. By repurposing vacant 
and underutilized assets using this now-expired authority, VA was able 
to outlease underutilized or vacant land and thereby obtain housing 
options, enhanced services, and improved operations, in addition to 
reducing VA's operating costs of these underutilized and vacant 
assets. The EUL authority served as a valuable and necessary tool to 
continue maximizing the use of our real property assets, and VA 
remains committed to working with the Administration and Congress on 
re-authorization of this authority (or similar authority). 

As a result of the EUL program, Veterans have enjoyed access to an 
expanded range of services—-services that would not otherwise be 
available on medical center campuses. The EUL program has also allowed 
the elimination of operation and maintenance costs associated with the 
vacant and underutilized buildings and land that have been outleased 
via EUL. One prominent example of these expanded services is helping 
VA further its goal of eliminating Veteran homelessness by 2015. VA 
used its EUL authority to develop housing projects that included both 
transitional and permanent supportive housing for Veterans who are 
homeless or at risk of homelessness. Other housing projects include 
independent and assisted living for senior, disabled, and returning 
Veterans. 

This type of authority offers a win-win situation for VA, Veterans, 
taxpayers, and the local community. It is certainly possible this type 
of win-win situation can be replicated using a multi agency approach 
for repurposing. 

Page 29, Section on VA Authorities: GAO lists three VA authorities 
related to leasing, VA Transfer Authority — Capital Asset Fund, 
Authority to Outlease, and Retention of Proceeds/Transfer Authority. 

VA Comment: While these are valid VA authorities related to leasing, 
the focus of the report is on sharing space within the federal 
government. Since all federal agencies are part of the USG, they would 
not lease space to one another. Permits, revocable licenses, and VA 
enhanced sharing agreements (38 USC 8151-8153) are the vehicles that 
VA presumably would use to grant use of space rights to other federal 
agencies. 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

David J. Wise, (202) 512-2834 or wised@gao.gov. 

Staff Acknowledgments: 

In addition to the contact named above, Keith Cunningham (Assistant 
Director); Jessica A. Evans; Colin Fallon; Gary Guggolz; Alison Hoenk; 
Hannah Laufe; SaraAnn Moessbauer; Joshua Ormond; Susan Sachs; and 
Crystal Wesco made key contributions to this report. 

[End of section] 

Related GAO Products: 

Federal Real Property: National Strategy and Better Data Needed to 
Improve Management of Excess and Underutilized Property. [hyperlink, 
http://www.gao.gov/products/GAO-12-645]. Washington, D.C.: June 20, 
2012. 

Federal Buildings Fund: Improved Transparency and Long-term Plan 
Needed to Clarify Capital Funding Priorities. [hyperlink, 
http://www.gao.gov/products/GAO-12-646]. Washington, D.C.: July 12, 
2012. 

U.S. Postal Service: Postal Service: Challenges Related to 
Restructuring the Postal Service's Retail Network. [hyperlink, 
http://www.gao.gov/products/GAO-12-433]. Washington, D.C.: April 17, 
2012. 

Decennial Census: Census Bureau and Postal Service Should Pursue 
Opportunities to Further Enhance Collaboration. [hyperlink, 
http://www.gao.gov/products/GAO-11-874]. Washington, D.C.: September 
30, 2011. 

Federal Real Property: Overreliance on Leasing Contributed to High-
Risk Designation. [hyperlink, http://www.gao.gov/products/GAO-11-
879T]. Washington, D.C.: August 4, 2011. 

Federal Real Property: Proposed Civilian Board Could Address Disposal 
of Unneeded Facilities. [hyperlink, 
http://www.gao.gov/products/GAO-11-704T]. Washington, D.C.: June 9, 
2011. 

Federal Real Property: Progress Made on Planning and Data, but 
Unneeded Owned and Leased Facilities Remain. [hyperlink, 
http://www.gao.gov/products/GAO-11-520T]. Washington, D.C.: April 6, 
2011. 

High-Risk Series: An Update. [hyperlink, 
http://www.gao.gov/products/GAO-11-278]. Washington, D.C.: Feb. 16, 
2011. 

VA Real Property: VA Emphasizes Enhanced-Use Leases to Manage Its Real 
Property Portfolio. [hyperlink, 
http://www.gao.gov/products/GAO-09-776T]. Washington, D.C.: June 10, 
2009: 

Federal Real Property: Authorities and Actions Regarding Enhanced Use 
Leases and Sale of Unneeded Real Property. [hyperlink, 
http://www.gao.gov/products/GAO-09-283R]. Washington, D.C.: February 
17, 2009. 

Federal Real Property: Strategy Needed to Address Agencies' Long-
standing Reliance on Costly Leasing. [hyperlink, 
http://www.gao.gov/products/GAO-08-197]. Washington, D.C.: January 24, 
2008. 

Federal Real Property: Progress Made Toward Addressing Problems, but 
Underlying Obstacles Continue to Hamper Reform. [hyperlink, 
http://www.gao.gov/products/GAO-07-349]. Washington, D.C.: April 13, 
2007. 

[End of section] 

Footnotes: 

[1] According to the Federal Real Property Council's most recent 
Federal Real Property Report, which provided summary-level reports on 
governmentwide real property data, as of September 30, 2010. This data 
is reported at the asset level, not the lease level, meaning that 
while portions of a building are leased, the entire building is 
counted as an asset. 

[2] GAO, Federal Real Property: Proposed Civilian Board Could Address 
Disposal of Unneeded Facilities, [hyperlink, 
http://www.gao.gov/products/GAO-11-704T] (Washington, D.C.: June 9, 
2011). 

[3] GAO's high-risk series identifies areas at high risk due to their 
greater vulnerabilities to waste, fraud, abuse, and mismanagement or 
major challenges associated with their economy, efficiency, or 
effectiveness. See GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-11-278] (Washington, D.C.: Feb. 16, 
2011). 

[4] E.g., Civilian Property Realignment Act of 2012, S. 2232, 112TH 
Cong. (2012); Civilian Property Realignment Act, H.R. 1734, 112TH 
Cong. (2011). 

[5] Federal Real Property Asset Management Reform Act of 2012, S. 
2178, 112TH Cong. (2012). 

[6] 21ST Century Postal Service Act of 2012, S. 1789, 112TH Cong. 
(2012). 

[7] Office of Management and Budget, Promoting Efficient Spending to 
Support Agency Operations (M-12-12). (May 11, 2012). 

[8] We recently reported that the FRPC has not followed sound data 
collection practices--related to data consistency, performance 
measures, collaboration, and data reporting--when collecting FRPP 
data, that would help it collect these data in a way that is 
sufficiently consistent and accurate to be useful making property 
management decisions. See GAO, Federal Real Property: Improved Data 
and a National Strategy Needed to Address the Excess and Underutilized 
Property Problem, [hyperlink, http://www.gao.gov/products/GAO-12-645] 
(Washington, D.C.: June 20, 2012). We recommended that GSA develop a 
plan to improve the FRPP consistent with sound data collection 
practices. Nonetheless, we also reported that the FRPP is sufficiently 
reliable to be used in a general sense to track assets. As such, for 
this report, we used FRPP data for the limited purposes of identifying 
case study markets and summarizing agency-level statistics on owned 
and leased property. 

[9] Only the 24 federal agencies subject to the Chief Financial 
Officers (CFO) Act of 1990 are required to submit real property data 
at the constructed asset level to the FRPP on an annual basis under 
Executive Order 13327. GSA is counted as one of the 24 agencies. The 
Departments of Education, Housing and Urban Development; the Small 
Business Administration; the Nuclear Regulatory Commission; and the 
Social Security Administration obtain and use real estate through GSA. 
Consequently, GSA reports those real property assets. DOD is also 
counted as a reporting agency and reports property data for the Army, 
Air Force, Navy, and Corps of Engineers. USPS is not required to 
submit real property data to the FRPP and is therefore not included in 
this data. See, Federal Real Property Council, FY 2010 Federal Real 
Property Report: An Overview of the U.S. Federal Government's Real 
Property Assets. 

[10] Otherwise-managed buildings may be owned by a state government or 
by a foreign government that has granted rights for use to the federal 
government in an arrangement other than a lease agreement. 

[11] USDA, DOE, GSA-"leased," Interior, VA data are from fiscal year 
2010, DHS and GSA-"owned" data are from fiscal year 2011, and USPS 
data are from fiscal year 2012. 

[12] See, for example, GAO, General Services Administration: 
Comparison of Space Acquisition Alternatives--Leasing to Lease-
Purchase and Leasing to Construction, [hyperlink, 
http://www.gao.gov/products/GAO/GGD-99-49R] (Washington, D.C.: Mar. 
12, 1999) and General Services Administration: Opportunities For Cost 
Savings in the Public Buildings Area, [hyperlink, 
http://www.gao.gov/products/GAO/T-GGD-95-149] (Washington, D.C.: July 
13, 1995). 

[13] See GAO, Federal Real Property: Overreliance on Leasing 
Contributed to High-Risk Designation, [hyperlink, 
http://www.gao.gov/products/GAO-11-879T] (Washington, D.C.: Aug. 4, 
2011). GSA income statement losses within the leased inventory, as 
measured by funds from operations (FFO), increased dramatically in 
recent years to $102.9 million in fiscal year 2009 before falling to 
$64.8 million in fiscal year 2010. FFO is derived by calculating the 
amount of revenue remaining after deducting all direct and indirect 
expenses (excluding depreciation) associated with operating a 
building, and provides the Federal Buildings Fund with contributions 
to capital towards future investments in renovations, repairs, and new 
construction. 

[14] According to GSA, losses in leased inventory are partially 
attributable to the accounting treatment of different rent payments 
and fees in accordance with financial statement reporting 
requirements, but the agency should still be able to cover all the 
extra costs with the administrative fee it charges tenant agencies. 

[15] 40 U.S.C. § 585. 

[16] Federal Real Property Asset Management, Exec. Order No. 13327, 69 
Fed. Reg. 5897 (Feb. 6, 2004). 

[17] The executive order applies to the Departments of Agriculture 
(USDA), Commerce, Defense, Education, Energy, Health and Human 
Services, Homeland Security, Housing and Urban Development, Interior, 
Justice, Labor, State, Transportation, the Treasury, Veterans Affairs 
(VA); the Environmental Protection Agency; the National Aeronautics 
and Space Administration; the United States Agency for International 
Development; the General Services Administration (GSA); the National 
Science Foundation, the Nuclear Regulatory Commission; the Office of 
Personnel Management; the Small Business Administration; and the 
Social Security Administration. 

[18] See, for example, GAO, Federal Real Property: Progress Made 
Toward Addressing Problems, but Underlying Obstacles Continue to 
Hamper Reform, [hyperlink, http://www.gao.gov/products/GAO-07-349] 
(Washington, D.C.: Apr. 13, 2007); Federal Real Property: Proposed 
Civilian Board Could Address Disposal of Unneeded Facilities, GAO11-
704T (Washington, D.C.: June 9, 2011) and High-Risk Series: An Update, 
[hyperlink, http://www.gao.gov/products/GAO-11-278] (Washington, D.C.: 
February 2011). 

[19] Section 102 of Title 40 of the United States Code defines excess 
property as "property under the control of a federal agency that the 
head of the agency determines is not required to meet the agency's 
needs or responsibilities." GSA's federal management regulations 
defines underutilized property as "an entire property or portion 
thereof, with or without improvements, which is used--(a) Irregularly 
or intermittently by the accountable Executive agency for current 
program purposes of that agency; or (b) For current program purposes 
that can be satisfied with only a portion of the property." 41 C.F.R. 
§ 102-75.50. 

[20] 39 U.S.C. §§ 401, 410. 

[21] GAO, U.S. Postal Service: Challenges Related to Restructuring the 
Postal Service's Retail Network,[hyperlink, 
http://www.gao.gov/products/GAO-12-433] (Washington, D.C.: Apr. 17, 
2012). 

[22] USPS is authorized to borrow $3 billion annually and a maximum of 
$15 billion. 39 U.S.C. § 2005(a). USPS borrows money from the U.S. 
Treasury via the Federal Financing Bank. 

[23] Originally due at the end of fiscal year 2011, USPS's $5.5-
billion retiree health benefit payment was delayed until August 1, 
2012. Pub. L. No. 112-74 (Dec. 23, 2011). 

[24] According to the Postal Reorganization Act of 1970, "postal rates 
and fees shall provide sufficient revenue so that the total estimated 
income and appropriations to the Postal Service will equal as nearly 
as practicable total estimated costs of the Postal Service." Pub. L. 
No. 91-375, 84 Stat. 760 (Aug. 12, 1970) (formerly 39 U.S.C. § 3621). 
See also, Payments on Unfunded Liability by the U.S. Postal Service to 
Civil Service Retirement Fund: Hearing Before the Committee on Post 
Office and Civil Service, United States Senate, on H.R. 29, 93rd Cong. 
73-74 (statement by Post Office and Civil Service Committee Chairman 
Gale McGee). 

[25] United States Postal Service, Office of Inspector General. 21st 
Century Post Office: Opportunities to Share Excess Resources -
Management Advisory, DA-MA-12-003 (Arlington, VA: Feb. 9, 2012.) 

[26] GAO, Executive Guide: Leading Practices in Capital Decision-
Making, [hyperlink, http://www.gao.gov/products/GAO/AIMD-99-32] 
(Washington, D.C.: Dec. 1998). 

[27] USPS is authorized to hold, maintain, sell, lease, or otherwise 
dispose of such property or any interest therein. 39 U.S.C. § 401(5). 
USPS is authorized to retain and use all revenues that it receives. 39 
U.S.C. § 2401(a). 

[28] Appendix II provides more information on selected sharing and 
retention of proceeds authorities granted to the agencies we included 
in our review. 

[29] Both Congress and the executive branch have recognized the need 
for improved collaboration across the federal government. Accordingly, 
in January 2011 the almost two-decades-old Government Performance and 
Results Act of 1993 (GPRA) was updated with the GPRA Modernization Act 
of 2010 (GPRAMA). Pub. L. No. 111-352, 124 Stat. 3866 (2011). GPRAMA 
amends the Government Performance and Results Act of 1993, Pub. L. No. 
103-62, 107 Stat. 285 (1993). 

[30] See GAO, Results-Oriented Government: Practices That Can Help 
Enhance and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21, 
2005). 

[31] Such practices include (1) define and articulate a common 
outcome; (2) establish mutually reinforcing or joint strategies; (3) 
identify and address needs by leveraging resources; (4) agree on roles 
and responsibilities; (5) establish compatible policies, procedures, 
and other means to operate across agency boundaries; (6) develop 
mechanisms to monitor, evaluate, and report on results; (7) reinforce 
agency accountability for collaborative efforts through agency plans 
and reports; and (8) reinforce individual accountability for 
collaborative efforts through performance management systems. See 
[hyperlink, http://www.gao.gov/products/GAO-06-15]. 

[32] United States Postal Service, Office of Inspector General. 21st 
Century Post Office: Opportunities to Share Excess Resources - 
Management Advisory, DA-MA-12-003 (Arlington, VA: February 9, 2012.) 

[33] For capital projects, including substantial repairs and 
renovations, agencies must record budget authority for the full cost 
of an asset up front. Such up-front funding provides recognition for 
commitments that are embodied in budgetary decisions and maintains 
governmentwide fiscal control. However, providing budget authority for 
the large up-front costs of capital assets creates challenges in an 
era of resource constraints. See, GAO, Budget Issues: Alternative 
Approaches to Finance Federal Capital, [hyperlink, 
http://www.gao.gov/products/GAO-03-1011] (Washington, D.C.: Aug. 21, 
2003). 

[34] See, for example, [hyperlink, 
http://www.gao.gov/products/GAO-12-433], [hyperlink, 
http://www.gao.gov/products/GAO-11-759T], and [hyperlink, 
http://www.gao.gov/products/GAO-11-278]. 

[35] GAO, Federal Buildings Fund: Improved Transparency and Long-term 
Plan Needed to Clarify Capital Funding Priorities, [hyperlink, 
http://www.gao.gov/products/GAO-12-646] (Washington, D.C.: Jul. 12, 
2012). 

[36] In downtown Philadelphia, GSA had considered purchasing USPS' 
large, underutilized 30th St. Mail Processing and Distribution Center 
Station, but was dissuaded by the substantial cost of the renovation 
that would be needed for the building, which was constructed in 1935. 
Instead, in April 2007, USPS signed a deal with a private developer to 
renovate nearby facilities and, in August 2007, signed a memorandum of 
understanding with GSA for private redevelopment of the building into 
IRS offices. In September 2008, USPS moved its retail operations and 
distribution unit out of 30th St. into its new facilities. When the 
30th St. renovation was complete, IRS moved into the property (see 
figure 6). In exchange for financing the $184-million renovation, the 
developer received all interest and rights from USPS for the 30th St. 
land, building, and a nearby 1,661-space parking garage, and until 
August 25, 2030, will receive lease payments from GSA, who in turn 
will receive rent from IRS. 

[37] The decision to lease rather than own space for federal 
operations is often influenced by factors other than cost-
effectiveness, including budget issues. Federal budget-scoring rules 
require that budget authority for ownership options be recorded fully 
up front in the budget to appropriately reflect the government's 
commitment. For GSA operating leases, however, only the budget 
authority needed to cover the annual lease payments is required. This 
reduces the up-front funding commitment but generally costs the 
federal government more over time. See [hyperlink, 
http://www.gao.gov/products/GAO-11-879T]. 

[38] See [hyperlink, http://www.gao.gov/products/GAO-03-1011]. 

[39] The FRPP was designed to describe the nature, use, and extent of 
federal real property held by executive branch agencies, except when 
otherwise required for reasons of national security. Federal Real 
Property Asset Management, Exec. Order No. 13327, 69 Fed. Reg. 5897 
(February 6, 2004). 

[40] Although some agencies possess databases with detailed property 
information, we found that local and regional federal officials still 
used their personal knowledge. For example, one GSA property manager 
told us that several specific rooms were better for storage than 
tenants because janitors used the access hallway to bring the entire 
building's trash to the dumpsters. 

[41] For the purposes of this review, we focused on one aspect of 
colocation, defined as moving government operations from privately-
owned leased spaces to spaces owned by the federal government. 
Although colocation can also be used to describe agencies sharing 
space leased from the private sector, that interpretation is not used 
for this report 

[42] GAO, Federal Real Property: Improved Data and a National Strategy 
Needed to Address the Excess and Underutilized Property Problem, 
[hyperlink, http://www.gao.gov/products/GAO-12-645] (Washington, D.C.: 
June 20, 2012). 

[43] We did not include the Department of Justice (DOJ) or the 
Department of State (State) in our scope because some of their 
holdings were notably inappropriate for colocation, including State's 
international holdings and DOJ's prisons. 

[44] During site visits we excluded DOD properties that agency 
officials identified as being on secure military installations, as 
these properties are subject to the Base Realignment and Closure Act 
(BRAC), and have greater security requirements than average federal 
buildings. 

[End of section] 

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