Federal Personal Property:
GSA and VA Have Opportunities to Improve the Exchange Sale Process
GAO-19-33: Published: Nov 16, 2018. Publicly Released: Nov 16, 2018.
The federal government owns $1 trillion in personal property, such as furniture and vehicles. Agencies can sell these items and use the proceeds to buy similar items. The General Services Administration makes the rules for these federal agency transactions, buys and sells vehicles for other agencies to use, and carries out its own transactions.
We found that GSA officials who buy vehicles and Army officials who buy helicopters did this often and understood the rules. VA officials, however, did not. We recommended that GSA clarify the rules for selling property so that agencies have opportunities to be better stewards of personal property.
Example of high-value personal property items
A picture of Army helicopters
What GAO Found
According to data compiled by the General Services Administration's Office of Government-wide Policy (GSA OGP), 27 agencies executed exchange/sale transactions, governed by statute and GSA regulations, to exchange (trade-in) or sell personal property from fiscal year 2013 through fiscal year 2017. The 27 agencies reported transactions totaling about $3.1 billion. Vehicle sales accounted for $2.6 billion (about 84 percent) of that total.
Examples of High-Value “Personal Property” Items
GAO found that GSA officials who procure vehicles for federal agencies and Army officials who purchase helicopters appeared to understand the exchange/sale process and used it frequently. However, Department of Veterans Affairs (VA) officials expressed confusion about key aspects of the authority. For example, officials were unclear about how to sell property; this lack of clarity led to missed opportunities to use sale proceeds for replacing property. GSA OGP officials who guide agencies on the use of the authority acknowledged that the exchange/sale regulations can be confusing but GSA's plan to amend them is at least 2 years away. Because GSA does not plan to address this confusion in the near term through other means such as bulletins or outreach, agencies' misunderstanding of the authority could lead to additional missed opportunities to be effective stewards of government funds.
Regarding monitoring of exchange and sale activities, GAO found that the Army monitored activities consistent with its policy. However, GSA and VA performed limited monitoring because:
GSA had not clarified its responsibilities or defined the scope of its authority for monitoring internal GSA exchanges and sales, and
VA did not have a detailed policy for monitoring and had not communicated information about monitoring to pertinent employees.
Until GSA clarifies its responsibilities and the scope of its authority and VA revises its policy with pertinent details and communicates this information to staff members, neither agency will be positioned to sufficiently monitor exchange/sale activities.
Why GAO Did This Study
According to the U.S. Treasury, the government owns about $1.3 trillion in “personal property” such as computers, furniture, and vehicles. Federal law authorizes agencies to exchange or sell personal property and retain the allowances or proceeds for replacing similar needed property. These are called “exchange/sale” transactions. GSA is responsible for issuing exchange/sale regulations and guiding agencies on the use of the authority.
GAO was asked to review agencies' use of the exchange/sale authority. This report (1) describes what is known about personal property exchange/sale transactions from fiscal year 2013 through fiscal year 2017 and (2) examines selected agencies' experiences using the exchange/sale authority and monitoring such activities. GAO analyzed multi-year data compiled by GSA OGP and found the data to be sufficiently reliable. GAO selected three agencies—GSA, the Army, and VA—based on the type, quantity, and value of personal property exchanged and sold; reviewed agencies' personal property policies; examined agencies' monitoring of exchange/sale activities; and interviewed their officials about personal property management.
What GAO Recommends
GAO is recommending that GSA OGP address agency confusion about the exchange/sale authority and that GSA clarify its responsibilities and the scope of its authority. GAO is also recommending VA revise its policy to address monitoring and communicate the revision to staff. Both agencies agreed with the recommendations.
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Recommendations for Executive Action
Comments: As of January 2019, GSA's Office of Government-wide Policy has held several forums to address concerns of federal agencies and enhanced website guidance on the exchange/sale authority. It also plans to conduct agency-specific discussion sessions on the exchange/sale topic in the future. We will continue to monitor GSA's actions in addressing the recommendation.
Recommendation: The GSA's Associate Administrator for the Office of Government-wide Policy should take action to address specific areas of federal agency confusion with the exchange/sale authority, areas such as the process for selling property, reporting data, and distinguishing the exchange/sale process from the disposal process. Such actions could include issuing bulletins or conducting expanded outreach and, as necessary, issuing regulations. (Recommendation 1)
Agency Affected: General Services Administration
Comments: As of January 2019, GSA stated it plans to delineate the scope and authority of the Office of Administrative Services Internal Personal Property Program and develop and distribute a Standard Operating Procedure that clearly outlines processes, roles, and responsibilities to ensure it has adequate process and oversight safeguards in place for exchange/sale transactions. We will continue to monitor GSA's actions in addressing the recommendation.
Recommendation: The Administrator of General Services should take steps to improve agency-wide monitoring of exchange/sale activities within GSA by specifying the Office of Administrative Services' responsibilities and by defining the scope of its authority. (Recommendation 2)
Agency Affected: General Services Administration
Comments: As of January 2019, VA's Office of Acquisition and Logistics, in conjunction with Veterans Health Administration's Procurement and Logistics Office, has drafted two policy notices to amend existing policy to include details on the exchange/sale authority and is collecting data on exchange/sale usage within the agency as a basis for reviewing progress and compliance with VA utilization officers. These notices are currently under review and are to be approved by March 2019. We will continue to monitor the status of VA's actions to address our recommendation.
Recommendation: The VA's Deputy Assistant Secretary of Acquisition and Logistics, in collaboration with the Veterans Health Administration's Office of Procurement and Logistics, should revise VA's policy to include details on the exchange/sale authority, particularly those related to monitoring by Regional Offices and use of the authority for medical centers, and establish time frames with milestones for communicating such information. (Recommendation 3)
Agency Affected: Department of Veterans Affairs