Facilities Location Policy: GSA Should Propose a More Consistent and Businesslike Approach

GGD-90-109 Published: Sep 28, 1990. Publicly Released: Sep 28, 1990.
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Pursuant to a congressional request, GAO reviewed: (1) the policies that guide federal civilian agencies in selecting facility locations; (2) whether rural areas received first priority in location decisions, as required by the Rural Development Act of 1972; and (3) whether any changes in federal location policies were warranted.

GAO found that: (1) during the past 10 years, agencies that experienced increased employment generally selected locations where the demand for their services was greatest, despite policies set forth in federal regulations; (2) several agencies believed that political considerations affected their ability to close and relocate facilities; (3) the private sector generally viewed location decisions as labor market decisions and generally located headquarters operations in major metropolitan areas and administrative operations in smaller cities with low labor costs; (4) localities routinely offered incentives to attract potential employers to their communities but, unlike the private sector, the government typically did not take full advantage of such incentives; (5) central business districts' rental rates averaged about 26 percent higher than the suburban areas of the District of Columbia and 10 standard federal regional cities; (6) the cost of living in 59 areas with at least 5,000 white-collar federal workers varied, but averaged 5 percent higher than the national average; (7) the federal government experienced personnel and production problems primarily because the private sector paid higher salaries than the federal government, but congressional and administrative pay proposals could rectify those problems and make it less costly for some areas to employ federal workers; and (8) the General Services Administration (GSA) did not assist agencies in formulating procedures and guidelines to implement location policies, due to political obstacles and its belief that agencies should make their own location decisions.

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Recommendations for Executive Action

Agency Affected Recommendation Status
General Services Administration The Administrator of General Services should develop for congressional consideration a more cost conscious and consistent governmentwide location policy that would replace the requirements in: (1) the Rural Development Act of 1972; (2) the Public Buildings Act of 1959; (3) the Office of Management and Budget Circular A-105; and (4) Executive Order 12072. The new policy should reflect a more businesslike approach in meeting agency mission and organizational needs by: (1) requiring agencies to maximize competition in identifying potential facility locations; (2) comparing the costs and benefits of each, considering such factors as real estate and labor; and (3) selecting sites that meet the needs while offering the best overall value to the government.
Closed – Implemented
GSA drafted a new location policy and announced it in the Federal Register, 41 CFR Part 101-17.205, on August 26, 1991. For the first time, agencies are required to consider the availability of local labor pools, pay differentials for employees, real estate costs, and local incentives offered. This should reduce future penalty costs.

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