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

This information appears as published in the 2017 High Risk Report.

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The federal government’s real estate portfolio is vast and diverse—including approximately 273,000 buildings that are leased or owned in the United States and that cost billions of dollars annually to operate and maintain by civilian and defense agencies.1 Since federal real property management was placed on the High-Risk List in 2003, the federal government has given high-level attention to this issue, such as issuing the National Strategy for the Efficient Use of Real Property (National Strategy) in 2015, which provides a foundation to further assist agencies in strategically managing their real property inventories. However, federal agencies continue to face long-standing challenges in several areas of real property management, including: (1) disposing of excess and underutilized property effectively, (2) relying too heavily on leasing, (3) collecting reliable real property data to support decision making, and (4) protecting federal facilities. Issues with the reliability of the Federal Real Property Profile (FRPP) data—particularly the utilization variable—make it difficult to quantify the overall number of vacant and underutilized federal buildings.

In September 2016, we reported on some vacant properties in the Washington, D.C., area that illustrate the challenges associated with disposing of or repurposing vacant property.2 Figure 8 illustrates the following examples:

  • The Cotton Annex: This building, held by the General Services Administration (GSA), which serves as the federal government’s primary disposal agent, is located just a couple blocks off the National Mall in Washington, D.C., is approximately 118,000 gross square feet and has been vacant since 2007. In 2016, we found that GSA’s recent attempt to exchange the property for construction services failed when GSA was unable to obtain sufficient value from the exchange, making the fate of this unneeded building unclear.
  • GSA Warehouses: In 2014, we found that some GSA warehouses listed in FRPP as used had been vacant for as long as 10 years. GSA only lists warehouses as unused if they are in the process of being disposed. Interpreting use this way in FRPP caused GSA to list as used some warehouses that had been vacant for years. We made a priority recommendation to GSA, to improve the way GSA manages its warehouses. According to GSA officials, they are in the process of developing a Guide for Strategic Warehouse Planning.
  • St. Elizabeths: The west campus of St. Elizabeths, a National Historic landmark in Washington, D.C., is made up of 61 buildings on about 182 acres. Many buildings have been vacant for extended periods of time and are in badly deteriorated condition. As we reported in 2014, GSA developed a plan to establish a consolidated headquarters for the Department of Homeland Security (DHS) on the site in 2009. 3 Since then, GSA has completed construction of a new headquarters building for the Coast Guard on the campus, but most of the project has been delayed. The estimated timeline for completing the project has been extended multiple times, from an initial estimated completion date of 2016, to an estimated completion date of 2021 based on a scaled back plan as of 2015.

In addition, the federal government continues to face challenges in protecting federal facilities from potential attacks. For example, DHS’s Federal Protective Service (FPS), responsible for the physical protection of 9,500 federal facilities, continues to work to apply a risk-based approach for assessing facilities and ensuring that guards are adequately trained. In January 2017, we also reported that GSA is leasing from foreign owners about 3.3 million square feet in 20 buildings that require higher levels of security that could present security risks, such as espionage and unauthorized cyber and physical access.4

Examples of Vacant Federal Buildings (the Cotton Annex, vacant General Services Administration warehouse, and a vacant building at St. Elizabeths)

Examples of Vacant Federal Buildings (the Cotton Annex, vacant General Services Administration warehouse, and a vacant building at St. Elizabeths)

[1] This number reflects the most recent data—as of September 30, 2015—on leased and federally owned properties reported by Chief Financial Officer (CFO) Act agencies that report into the Federal Real Property Profile (FRPP). Some agencies, such as the United States Postal Service, are not required to submit real property data to the FRPP and are therefore not included in this summary.

[2] GAO, Federal Real Property: Efforts Made, but Challenges Remain in Reducing Unneeded Facilities, GAO-16-869T (Washington, D.C.: Sept. 23, 2016).

[3] GAO, Federal Real Property: DHS and GSA Need to Strengthen the Management of DHS Headquarters Consolidation, GAO-14-648 (Washington, D.C.: Sept. 19, 2014).

[4] GAO, Federal Real Property: GSA Should Inform Tenant Agencies When Leasing High-Security Space from Foreign Owners, GAO-17-195 (Washington, D.C.: Jan. 3, 2017).

Managing Federal Real Property

The federal government continues to meet the high-risk criterion for demonstrating leadership commitment to improving the management of real property by executing a number of reform efforts since the last high-risk update in 2015. For example, the Office of Management and Budget (OMB) has issued several key guidance documents since 2015. Most notably, OMB introduced the National Strategy in March 2015, and more recently issued a memo on Improving Federal Real Property Data Quality in January 2016. In response to OMB's memo, GSA issued its Federal Real Property Data Validation and Verification (V&V) Guidance in May 2016. These actions represent key examples of the federal government's continued commitment to improve its management of real property. The federal government has also continued to make progress toward increasing its capacity, developing an action plan, and monitoring its progress toward improving real property management and has made improvements in the demonstrating progress criterion to move it from a not met to a partially met rating. For example, in June 2016, OMB and GSA continued efforts to implement our March 2016 recommendation to improve FRPP data quality by conducting an in-depth survey of agencies and soliciting information on several data elements that have been known to be unreliable. GSA issued a memo in December 2016 to Chief Financial Officer (CFO) Act agencies that revised the definitions to improve the consistency and quality of several FRPP data elements. GSA also launched the Asset Consolidation Tool, a software application that allows federal agency users to generate geospatial information about assets in close proximity to identify potential candidates for colocation and consolidation. In addition, GSA implemented two priority recommendations since 2015 related to improving data reliability and is taking steps toward developing a 5-year capital plan.

Although progress is evident, these reforms have not fully addressed the underlying challenges to manage real property efficiently. For example, we found that federal agencies have not demonstrated that they have the capacity to reduce their reliance on costly leases, particularly high-value leases where owning properties would be less costly in the long run. GSA has also made strides to improve data reliability, including but not limited to issuing new data validation and verification guidance that requires agencies to investigate anomalies and resolve them. However, GSA will not finish measuring and tracking the progress of its data reliability efforts until late in 2017; agencies submitted their first data under the new approach in December 2016 and address all data irregularities by October 2017.

Related to physical security, we found that the federal government could do more to improve capacity, monitoring, action plans, and demonstrate progress. For example, FPS, GSA, and other agencies could improve the action plan criterion by collaborating and by clearly defining roles and responsibilities to adequately protect federal facilities. Further, FPS has taken some action to demonstrate progress but has yet to fully implement our March 2015 and September 2013 recommendations to improve security screening at federal buildings and guard training, respectively.

In December 2016, Congress enacted two real property reform bills that could address the long-standing problem of federal excess and underutilized property. The Federal Assets Sale and Transfer Act of 2016 may help address stakeholder influence by establishing an independent board to identify and recommend at least five high-value civilian federal buildings for disposal within 180 days after the board members are appointed, as well as develop recommendations to dispose and redevelop federal civilian real properties.1 Additionally, the Federal Property Management Reform Act of 2016 codified the Federal Real Property Council (FRPC) for the purpose of ensuring efficient and effective real property management while reducing costs to the federal government.2 The FRPC is required to establish a real property management plan template, which must include performance measures, and strategies and government-wide goals to reduce surplus property or to achieve better utilization of underutilized property. In addition, federal agencies are required to annually provide FRPC a report on all excess and underutilized property and identify leased space that is not fully used or occupied.

[1] Pub. L. No. 114-287, 130 Stat. 1463 (Dec. 16, 2016). The act excludes properties on military installations among other types of properties.

[2] Pub. L. No. 114-318, 130 Stat. 1608 (Dec. 16, 2016).

While the federal government has made progress on different aspects of managing federal real property, additional work is needed. In order to further improve the management of real property, OMB and GSA should implement our open recommendations to build upon the National Strategy and improve data reliability. Improving data reliability was also included as a priority recommendation in our August 2016 letter to the GSA Administrator. While the National Strategy mentions some underlying causes of the challenges that federal agencies face in managing their portfolios, it does not expound on the extent to which these challenges impede agencies' ability to dispose of, better utilize, or repair their real property and offers discussion on how agencies can overcome these challenges by addressing the underlying causes, such as legal and budgetary limitations and competing stakeholder interests.

OMB also could increase the usefulness of the National Strategy by discussing alternative funding mechanisms, such as retaining fees and enhanced-use leasing. Further, despite OMB's efforts to focus agencies' attention on measuring progress through the Reduce the Footprint policy, the government's efforts to monitor progress remain limited without reliable real property data in the FRPP. In June 2016, OMB and GSA officials noted that they continue to implement our March 2016 recommendation to analyze the differences in how agencies collected and reported data by conducting a survey of agencies that contribute FRPP data on several key indicators such as status, utilization, and replacement value. GSA plans to convene an inter-agency working group in early 2017 to discuss each of the data elements and devise an action plan to address the findings of the survey.

To further build capacity and develop action plans for reducing the federal government's overreliance on costly leasing, GSA should implement our priority recommendation from 2013 to develop a strategy for the federal government to own rather than lease prioritized high-value properties such as agency headquarters buildings. While GSA has taken some steps to increase its capacity to make its existing leasing program less costly by increasing competition, further action is required to decrease leasing costs by reducing unneeded fees, which is one of our priority recommendations.

Finally, FPS, GSA, and other agencies can take additional measures to increase capacity, develop action plans, and monitor as well as demonstrate progress in securing federal facilities and courthouses. For example, FPS can take additional action to address our March 2016 recommendation to improve human capital planning by developing performance measures with targets that are aligned to FPS goals. FPS and the Department of Justice's (DOJ) U.S. Marshals Service (USMS) can continue work they have under way to implement our March 2015 recommendation to improve their security screening at federal buildings and courthouses. Further, FPS should implement our September 2013 recommendation to ensure that all guards have received screening and active-shooter training. Finally, the Administrator of GSA and the Secretary of Homeland Security should work jointly to implement our other open priority recommendation to improve the management of the Department of Homeland Security headquarters consolidation project.

Looking for our recommendations? Click on any report to find each associated recommendation and its current implementation status.
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    • David Wise
    • Director, Physical Infrastructure
    • (202) 512-2834
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