Federal Real Property: Actions Needed to Enhance Information on and Coordination among Federal Entities with Leasing Authority

GAO-16-648 Published: Jul 06, 2016. Publicly Released: Jul 06, 2016.
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Highlights

What GAO Found

There is no comprehensive list of federal entities with independent leasing authority. The Federal Real Property Council (FRPC), chaired by the Office of Management and Budget (OMB), was established in 2004 through executive order to coordinate and share leading practices in real property management among federal agencies covered by the Chief Financial Officers Act of 1990. The General Services Administration (GSA) was directed to create a database intended to be a comprehensive inventory of federal facilities, which resulted in the Federal Real Property Profile (FRPP). However, federal entities that are not members of the FRPC are not required to submit data to the FRPP and few do so. Of the 103 federal entities that GAO surveyed, 52 reported having independent authority to lease office and warehouse space. As of October 1, 2015, these 52 entities leased 944 domestic offices and 164 warehouses. Twenty-five of those entities are not members of the FRPC and therefore not required to submit their real property data to the FRPP despite leasing 243 offices and warehouses. As such, the FRPP's incomplete data set reduces its effectiveness as an oversight and accountability mechanism for entities with independent leasing authority.

Offices and Warehouses Leased by Entities That Are Not Members of the Federal Real Property Council

Number of federal entities

Number of offices and warehouses

Rentable square feet

Approximate annual rent

25

243

8,321,232

$303.4 million

Source: Information reported by federal entities in a GAO survey as of October 1, 2015. | GAO-16-648

GAO's review of the costs of 37 selected independent leases found that the rates of most were less costly or comparable to matched GSA leases. When independent leases have lower costs, it may be attributed in part to: (1) GSA's using standardized lease documents that include clauses with higher energy conservation, security, and seismic requirements, and (2) independent leases' having fewer space modifications, more periods of free rent, and private sector real-estate professionals negotiating with potential owners. Most of the independent leases were also less costly or comparable to matched private sector leases, particularly in the National Capital Region.

GAO reviewed the extent to which eight selected federal entities had policies that incorporated leading government leasing practices and found that six had policies that generally conformed to these practices. However, none of the lease files contained evidence that the practices were consistently followed. For example, 88 percent of the entities' lease files lacked evidence of ensuring best value by documenting advertisements to seek bids to fill their space needs, and 77 percent lacked evidence that entities effectively planned ahead by documenting the factors they used to evaluate lease offers. In addition, the average of all leases we analyzed for space-use more than doubled GSA's recommended target of 150 rentable square feet per employee for office space. It may help federal entities conform to leading practices and meet utilization targets for the space they lease if they can benefit from the coordination and leading real-property management practices shared at the FRPC.

GSA leases real property on behalf of many federal tenants, but some federal entities have statutory independent leasing authority.

GAO was asked to review federal entities with independent leasing authority. This report examines (1) what is known about which federal entities have independent leasing authority and their use of this authority; (2) how selected independent leases compare to GSA and private sector leases in terms of cost; and (3) to what extent selected entities have leasing policies and practices that align with leading government practices. GAO conducted a survey of 103 federal entities identified in previous GAO work; selected eight entities for their diversity in size and mission, and visited 37 leased office and warehouse locations; analyzed leases and lease files for the 37 locations; reviewed applicable laws, policies, and guidance; and interviewed GSA, OMB, and officials from the selected entities.

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Recommendations

GAO recommends that OMB should establish efficient methods to: include data from non-FRPC members to the FRPP and increase collaboration between FRPC and non-FRPC entities. OMB concurred with both recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of Management and Budget To increase the completeness of information on the federal government's real property holdings and improve the coordination among federal entities that lease real property, the Deputy Director of the OMB--as chair of the FRPC--should establish efficient methods for including data from non-FRPC member entities in the FRPP.
Closed - Implemented
In 2016, GAO reported that there was no comprehensive list of federal entities with independent leasing authority. A 2004 executive order established the Federal Real Property Council (FRPC) composed of the executive branch departments and agencies covered by the Chief Financial Officers Act of 1990, which are FRPC members. The executive order directed the General Services Administration (GSA) to establish and maintain a comprehensive database of all real property under the custody and control of executive branch agencies. To meet this directive, GSA established the Federal Real Property Profile (FRPP) to be a government-wide real property inventory database. Since the formation of the FRPP, only the FRPC member agencies are required to annually submit their real property information to the database. Of the 103 federal entities that GAO surveyed, 52 reported having independent authority to lease office and warehouse space. However, 25 of those entities were not members of the FRPC and, consequently, did not submit their real property data to the FRPP. As such, the FRPP's incomplete data set reduced its effectiveness as an oversight and accountability mechanism for federal entities with independent leasing authority. To increase the completeness of the information on the federal government's real property holdings, GAO recommended that OMB establish methods for including data from non-FRPC member entities in the FRPP. In 2019, GAO confirmed that the completeness of the FRPP had improved. The Federal Asset Sale and Transfer Act (FASTA) expanded the agencies required to submit real property data annually to FRPP beyond FRPC members to all federal agencies. GSA indicated that the number of federal entities submitting data to FRPP in 2018 and 2019 has increased as a result of the FASTA requirement, which has made the FRPP a more comprehensive inventory. As a result, FRPP has increased its value as an oversight and accountability mechanism for tracking federal entities with independent leasing authority and their real property assets.
Office of Management and Budget To increase the completeness of information on the federal government's real property holdings and improve the coordination among federal entities that lease real property, the Deputy Director of the OMB--as chair of the FRPC--should establish efficient methods for increasing collaboration between FRPC member and non-member entities, including sharing leading real-property management practices.
Closed - Implemented
In 2016, GAO reported that a 2004 executive order established the Federal Real Property Council (FRPC) composed of the executive branch departments and agencies covered by the Chief Financial Officers Act of 1990 (CFO Act), which are FRPC members. The executive order also established FRPC, among other things, to coordinate and share leading practices in real property management among FRPC members. FRPC members coordinate efforts and share leading practices, and OMB staff said that the FRPC has been critical to improving real property management since its creation through executive order. However, FRPC's membership has remained limited to agencies covered by the CFO Act. Of the 103 federal entities that GAO surveyed, 52 reported having independent authority to lease office and warehouse space. However, 25 of those entities were not members of the FRPC and some of them lacked evidence that they consistently followed leading practices. Specifically, GAO reviewed the extent to which eight selected federal entities had policies that incorporated leading government leasing practices and found that six had policies that generally conformed to these practices. However, none of the lease files contained evidence that the practices were consistently followed. For example, 88 percent of the lease files we reviewed lacked evidence of ensuring best value by encouraging competition, 77 percent lacked evidence that they had a documented process for evaluating lease offers, and the average size of the space more than doubled GSA's recommended target. Without the coordination and leading real property management practices shared by the FRPC, entities with independent authority may continue to lack evidence that they are conforming to leading practices and lease more space than they need. Therefore, GAO recommended that OMB establish efficient methods to increase collaboration between FRPC member and non-member entities, including sharing leading real property management practices. In 2019, GAO confirmed that the Federal Asset Sale and Transfer Act (FASTA) expanded the agencies required to submit real property data annually to the Federal Real Property Profile (FRPP) beyond FRPC members to all federal agencies. GSA indicated that the agency has created a federal email list that it uses to distribute FRPC meeting minutes and leading practices. All agencies that submit data to FRPP are automatically added to the list, which has been expanded to include non-FRPC agencies and other federal agencies that ask GSA to add them to the list. The expansion of FRPC information and leading practices has increased the number of federal entities that benefit from and likely conform to the leading real property management practices.

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