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Federal Real Property: Agencies Should Provide More Information About Increases in Deferred Maintenance and Repair

GAO-24-105485 Published: Nov 16, 2023. Publicly Released: Nov 16, 2023.
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Fast Facts

We've reported that federal agencies have deferred the maintenance and repairs on their buildings, creating a backlog of these needs.

The estimated cost of 4 agencies' backlogs increased more than 80% over FY 2017-2022. Officials at the agencies attributed this to factors including funding constraints, cost increases, and the age and quantity of agencies' physical assets.

Agencies' budget documents include information on maintenance needs. But, to give Congress and the public a more complete picture, we recommended including more on

Reasons for estimate changes

Categories of assets included in estimates

Which projects are mission-critical

Department of Energy deferred maintenance on this aging air handling unit at Brookhaven National Laboratory in Upton, NY.

An image of aging pipes inside an air handling unit.

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Highlights

What GAO Found

Estimates for deferred maintenance and repair (DM&R) increased about $22 billion (83 percent) from fiscal years 2017 through 2022 for selected agencies—Department of Energy (DOE), Department of Health and Human Services (HHS), Department of the Interior (DOI), and General Services Administration (GSA). Agency officials attributed these increases—which ranged from 63 to 126 percent—to factors including funding constraints, labor and material cost increases, and the size and age of agencies' real property portfolios.

Percent Changes in Agencies' Estimated Deferred Maintenance and Repair Backlogs, Fiscal Years 2017-2022

Percent Changes in Agencies' Estimated Deferred Maintenance and Repair Backlogs, Fiscal Years 2017-2022

The selected agencies communicate DM&R needs, along with some contextual information, to Congress and public in their budget materials and other documents. However, GAO found that the agencies could provide more information in three areas: (1) reasons for changes in DM&R estimates, (2) categories of assets included in and excluded from backlog estimates, and (3) extent of DM&R needed to support agencies' missions. For example, HHS, GSA, and DOI did not explain that the methodologies they used to estimate DM&R—or changes to those methodologies—had contributed to annual increases of up to 40 percent. Providing such information could help Congress and the public better assess the costs and funding needs associated with agencies' DM&R backlogs.

GAO found that the agencies' policies for prioritizing DM&R followed most—but not all—of five leading practices for managing DM&R. Specifically, the policies followed practices on (1) establishing maintenance and repair objectives and prioritizing outcomes, (2) identifying types of facilities that support missions, and (3) aligning portfolios with mission needs. For the practice of identifying funding in budget materials, GAO found that the agencies' materials provided information on funding for planned maintenance but not on funding or timeframes for addressing the backlog of deferred maintenance and repair. Providing such information could help decision makers better evaluate agencies' budget requests. For the practice of using models to predict investment outcomes, analyze tradeoffs, and optimize among competing investments, GAO found that agencies employed such models to varying extents. Agencies raised some concerns with the use of certain models. However, assessing the potential benefits of using models could better position them to identify investment options that would provide the greatest return on investment given budget constraints.

Why GAO Did This Study

The federal government owns a massive portfolio of civilian buildings and structures (roads, bridges, dams, and monuments). DM&R on these assets can affect agencies' abilities to support their missions.

GAO was asked to review selected federal agencies' management of their DM&R. This report examines: (1) how the agencies' DM&R estimates changed from fiscal years 2017 through 2022, and reasons for changes; (2) the extent to which the agencies communicated DM&R needs to Congress and the public; and (3) the extent to which the agencies' prioritization policies align with leading practices for managing DM&R. GAO selected four agencies—DOE, HHS, DOI, and GSA—based on reported DM&R amounts, among other factors. GAO analyzed these agencies' DM&R and funding data for fiscal years 2017-2022. GAO reviewed the agencies' budget and financial materials to determine what DM&R information they communicated. GAO reviewed the agencies' policies on prioritizing DM&R and compared them to leading practices. In addition, GAO interviewed agency officials and conducted site visits at selected agency locations.

Recommendations

GAO is making 12 recommendations, including 11 to DOE, DOI, HHS, and GSA that they provide more information on their DM&R estimates and fully follow leading practices. GAO is also recommending that OMB instruct federal agencies on communicating DM&R needs. DOI, HHS, and GSA concurred with GAO's recommendations. DOE and OMB neither agreed nor disagreed.

Recommendations for Executive Action

Agency Affected Recommendation Status Sort descending
Department of the Interior The Secretary of the Interior should ensure that the department works with its component agencies to evaluate the costs and benefits of increasing the use of models for predicting the outcome of investments, analyzing tradeoffs, and optimizing among competing investments, and employ models when the benefits outweigh the costs. (Recommendation 6)
Open
Interior agreed with the recommendation. Interior officials said they were coordinating with the bureaus to review the availability and benefits of lifecycle investment models and would evaluate implementation alternatives. As of March 2024, officials said that Interior had established a working group and had met with bureaus who utilize lifecycle models to begin identifying best practices for applicability and scalability. The officials noted plans to use predictive models in the future once these evaluations were complete. GAO will continue to monitor these efforts.
Department of Health and Human Services The Secretary of Health and Human Services should ensure that the department's budget materials or other documents provide more information to Congress and the public regarding the agency's deferred maintenance and repair backlog, including at a minimum, explanations for major changes from year to year, categories of assets included in DM&R estimates, and the proportion of DM&R estimates needed to support the mission. (Recommendation 7)
Open
Health and Human Services agreed with the recommendation. Health and Human Services said it would work with offices in its Program Support Center to ensure that facilities exhibits in its congressional budget justifications provide information on deferred maintenance and repair backlogs, including explanations for major changes from year to year, categories of assets included in backlog estimates, and the proportion of estimates needed to support the mission.
Department of Health and Human Services
Priority Rec.
The Secretary of Health and Human Services should ensure that the department works with its component agencies to develop plans to address their DM&R backlogs and identify the funding and time frames needed to reduce them in congressional budget requests, related reports to decision makers, or both. (Recommendation 8)
Open
As of April 2024, GAO is awaiting HHS's first update on actions it has taken on this recommendation. In its fiscal year 2025 budget justification, published in March 2024, HHS requested additional funding for fiscal year 2025 and proposed additional funding for fiscal years 2026 and 2027 to address its backlog. However, the 2025 budget does not provide a specific plan, including funding and time frames, for reducing the backlog.
Department of Health and Human Services The Secretary of Health and Human Services should ensure that the department works with its component agencies to evaluate the costs and benefits of increasing the use of models for predicting the outcome of investments, analyzing tradeoffs, and optimizing among competing investments, and employ models when the benefits outweigh the costs. (Recommendation 9)
Open
Health and Human Services agreed with the recommendation. Health and Human Services noted that models used for investments in its real property portfolio may encounter limitations given the vastly different missions carried out in different facilities. As of March 2024, Health and Human Services officials said that the Department had aligned ongoing efforts of updating policies and frameworks to guide the Department's components in implementing the recommendation. GAO will continue to monitor these efforts.
General Services Administration The Administrator of GSA should ensure that the administration's budget materials or other documents provide more information to Congress and the public regarding the agency's deferred maintenance and repair backlog, including at a minimum, explanations for major changes from year to year, categories of assets included in DM&R estimates, and the proportion of DM&R estimates needed to support the mission. (Recommendation 10)
Open
GSA agreed with the recommendation and said it was developing a plan to address it.
General Services Administration
Priority Rec.
The Administrator of GSA should ensure that the administration develops a plan to address its DM&R backlog and identifies the funding and time frames needed to reduce this backlog in congressional budget requests, related reports to decision makers, or both. (Recommendation 11)
Open
GSA agreed with this recommendation and officials stated the agency was developing a plan to address it. In its fiscal year 2025 budget justification, published in March 2024, GSA provided some information on addressing its deferred maintenance and repair backlog, including through requests for obligational authority and maintenance funding. The budget justification noted that persistent underfunding of its capital investment program has and will likely continue to result in increases to the backlog. Further, GSA officials observed that eliminating the backlog is not achievable through this single year's budget request. However, GSA's request did not identify ways to address these issues or present a longer-term plan for how GSA intends to address its backlog, including funding amounts and timeframes. GAO will continue to monitor GSA's efforts to implement this recommendation.
Department of Energy The Secretary of Energy should ensure that the department's budget materials or other documents provide more information to Congress and the public regarding the agency's deferred maintenance and repair backlog, including at a minimum, the proportion of DM&R estimates needed to support the mission. (Recommendation 1)
Open
Energy neither agreed nor disagreed with this recommendation. Energy officials described plans to establish a working group to take a closer look at the best practices identified in GAO's work and develop ways to address the recommendation. As of March 2024, officials said the working group continued to meet to discuss potential corrective actions. GAO will continue to monitor progress in addressing the recommendation, including any actions taken by the working group.
Office of Management and Budget The Director of OMB should update its guidance on DM&R reporting to instruct agencies to communicate additional information to Congress and the public regarding their deferred maintenance and repair backlogs. This guidance should, at a minimum, instruct agencies to communicate explanations for major changes from year to year, categories of assets included in DM&R estimates, and the proportion of DM&R estimates needed to support the mission. (Recommendation 12)
Open
OMB had no comments on the recommendation. As of March 2024, OMB was working to update its guidance to agencies regarding reporting of deferred maintenance and repair backlogs. GAO will continue to monitor these efforts.
Department of Energy The Secretary of Energy should ensure that the department works with its component agencies to develop plans to address their DM&R backlogs and identify the funding and time frames needed to reduce them in congressional budget requests, related reports to decision makers, or both. (Recommendation 2)
Open
Energy neither agreed nor disagreed with this recommendation. Energy officials described plans to establish a working group to take a closer look at the best practices identified in GAO's work and develop ways to address the recommendation. As of March 2024, officials said the working group continued to meet to discuss potential corrective actions. GAO will continue to monitor progress in addressing the recommendation, including any actions taken by the working group.
Department of Energy The Secretary of Energy should ensure that the department works with its component agencies to evaluate the costs and benefits of increasing the use of models for predicting the outcome of investments, analyzing tradeoffs, and optimizing among competing investments, and employ models when the benefits outweigh the costs. (Recommendation 3)
Open
Energy neither agreed nor disagreed with this recommendation. Energy officials described plans to establish a working group to take a closer look at the best practices identified in GAO's work and develop ways to address the recommendation. As of March 2024, officials said the working group continued to meet to discuss potential corrective actions. GAO will continue to monitor progress in addressing the recommendation, including any actions taken by the working group.
Department of the Interior The Secretary of the Interior should ensure that the department's budget materials or other documents provide more information to Congress and the public regarding the agency's deferred maintenance and repair backlog, including at a minimum, explanations for major changes from year to year, categories of assets included in DM&R estimates, and the proportion of DM&R estimates needed to support the mission. (Recommendation 4)
Open
Interior agreed with the recommendation. Interior said that it would in its budget materials or other documents context for factors affecting major deferred maintenance and repair backlog changes from year to year, the scope of the real property included in backlog estimates, and the proportion of estimates associated with assets required to support the mission.
Department of the Interior The Secretary of the Interior should ensure that the department works with its component agencies to develop plans to address their DM&R backlogs and identify the funding and time frames needed to reduce them in congressional budget requests, related reports to decision makers, or both. (Recommendation 5)
Open
Interior concurred with this recommendation. As of March 2024, Interior officials said that as part of Interior's ongoing effort to improve the overall lifecycle management of assets, the Department will evaluate how current bureau investment plans for real property can better communicate the relationship between lifecycle requirements and the effects on the deferred maintenance and repair backlog and identify such information in reports to decision makers. In its fiscal year 2025 budget justification, Interior presented additional information regarding deferred maintenance and repairs, including information on the amounts of deferred maintenance and repair that could be addressed by new construction projects as well as more extensive information for several component agencies. However, to fully implement our recommendation, Interior needs to provide more consistent deferred maintenance and repair information across the Department and its component agencies and better describe its plans to address its backlogs, including time frames. GAO will continue to monitor Interior's efforts to implement this recommendation.

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Topics

Accounting standardsBudget justificationBudget requestsDeferred maintenanceFacility maintenanceFederal agenciesFederal budgetFederal facilitiesFinancial reportingReal property