Federal Real Property: Measuring Actual Office Space Costs Would Provide More Accurate Information
Fast Facts
The Office of Management and Budget's "Reduce the Footprint" policy promotes reducing federal office space and managing it more efficiently to help keep costs down.
OMB and the General Services Administration (the government's main landlord) try to measure the policy's effects by tracking changes in the average cost per square foot of federal space.
We found GSA and OMB didn't use readily available actual cost data to calculate the costs of certain spaces. As a result, their calculations excluded an average of $271 million a year in costs from fiscal years 2015-2018.
We recommended that GSA and OMB use actual cost data for this calculation.
The front of the General Services Administration building
Highlights
What GAO Found
The Office of Management and Budget (OMB) issued the Reduce the Footprint (RTF) policy in 2015 to promote the more efficent use of federal space. The General Services Administration (GSA) and OMB track and report two RTF cost performance measures: estimated costs avoided and average cost per square foot. GAO found that the method for estimating costs avoided was reasonable. However, the average cost per square foot was not accurate for the federally-owned and leased office space GSA manages for agencies. Specifically, GAO found that from fiscal years 2015 through 2018 the actual average cost per square foot for this space was, on average, $1.31 per square foot higher than the costs GSA and OMB reported for the 23 civilian agencies subject to the Chief Financial Officers (CFO) Act. The actual cost per square foot was higher for 18 out of 23 of these agencies (see figure). Because GSA and OMB did not use readily available actual cost data, their method, which is based on 1 month's data, excluded an average of $271 million per year in costs over this period. Consequently, stakeholders and agencies do not have accurate information to assess agencies' performance or help manage their space decisions.
Percentage Difference between General Services Administration's (GSA) and Office of Management and Budget's Average Cost per Square Foot Calculation and Actual Costs for Agencies' GSA-Managed Office Space, Fiscal Year 2015 through 2018
Note: This information covers the 23 Civilian Chief Financial Officers Act agencies.
While selected agencies considered costs when making office space decisions, they balanced other factors as well. As the federal government's principal landlord, GSA obtains space for many agencies. In so doing, it emphasizes federal cost savings, which may not lead to agency savings. For example, GSA prioritized filling unoccupied federally-managed space even if it was more costly to an agency than another option. The selected agencies also reported that factors such as mission, workforce needs, and external factors are important to consider and balance as well. For example, a senior official from the Department of Education said that effects on employees' commutes are an important factor in its space decisions, and that it weighs the impact of potential office locations on the Department's workforce against the cost of the space.
Why GAO Did This Study
The government's RTF policy has intensified federal efforts to reduce office space and save money since 2015. GSA and OMB report key cost performance measures but questions exist about how well these measures reflect agencies' efforts.
GAO was asked to review how federal real property costs have changed since 2015. This report examines (1) the extent to which performance measures reflect changes in civilian CFO Act agencies' office space costs and (2) how selected agencies considered cost in their office space decisions.
To conduct this work, GAO analyzed federal data on office space square footage and cost changes for the 23 civilian CFO Act agencies from fiscal years 2015 through 2018, and reviewed GSA's and OMB's calculations for cost performance measures. GAO selected five agencies and 13 of their office space projects as non-generalizable case studies based on several factors, including those with larger space and cost changes. GAO reviewed the selected agencies' policies and project documentation, and interviewed agency officials.
Recommendations
GAO recommends that GSA coordinate with OMB to use actual cost information to calculate the average cost per square foot performance measure for GSA-managed space. GSA agreed with the recommendation.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| GSA Office of the Administrator | The Administrator of the General Services Administration (GSA), in coordination with the Director of the Office of Management and Budget, should ensure that the average cost per square foot performance measure for GSA-managed space is calculated using actual cost information. (Recommendation 1) |
Closed – Implemented
In March 2015, the Office of Management and Budget (OMB) issued the Reduce the Footprint (RTF) policy to promote the more efficient use of real property assets, including office space, by federal agencies. To monitor agencies' results, the General Services Administration (GSA) tracks and reports two cost performance measures - estimated cost avoidance and average cost per square foot. In 2019, GAO reported that GSA's and OMB's cost per square foot measure, which is intended to reflect actual changes in agencies' real property costs, did not use readily available data on the actual costs agencies paid to GSA for office space each year, and so understated agencies' costs. This inaccurate information could adversely affect agencies' and stakeholders' understanding of RTF results. First, using an inaccurate cost performance measure affects stakeholders' and policymakers' ability to accurately judge and oversee agencies' progress toward reducing space costs. Second, because agencies use these data to judge their own performance and make decisions about how to efficiently manage their space, agencies are at risk of taking ineffective steps to manage their costs and achieve their goals. GAO recommended that GSA ensure that this performance measure is calculated using actual cost information. In August 2020, GSA notified us that it had revised the method for calculating the average cost per square foot for GSA-managed space to use actual cost information, a step officials previously told us involves coordination with OMB. GSA applied this new method to costs for fiscal years 2015 through 2019, and updated the performance.gov public website with the revised results. As a result, GSA, agencies, and the stakeholders have more accurate information by which to measure agencies' progress toward reducing space costs.
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