The General Services Administration and Federal Real Property Management: Overview and Current Legislation
Congressional research reportMar 21, 2008
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Order Code RL32368
The General Services Administration
and Federal Real Property Management:
Overview and Current Legislation
Updated March 21, 2008
Stephanie Smith
Analyst in American National Government
Government and Finance Division
The General Services Administration and
Federal Real Property Management:
Overview and Current Legislation
Summary
The General Services Administration (GSA), through its Public Buildings
Service (PBS), is the primary federal real property and asset management agency,
with a portfolio consisting of 8,847 buildings and structures with an estimated
replacement value of $68.8 billion in FY2006. GSA is also responsible for
identifying and completing needed repairs to the federal buildings it manages. The
Federal Buildings Fund (FBF), established by Congress in 1972, is the primary
means by which GSA finances the operating and capital costs associated with its
federal building inventory. Created as a revolving fund, the FBF receives revenue
deposits from rent payments charged to federal agencies occupying GSA’s office
space. While revenue to the FBF is the principal source of funding, Congress
annually authorizes how GSA may allocate its FBF assets as new obligational
authority in appropriations funding. In addition, Congress may appropriate more
money for the fund. Generally, FBF revenues are first used for GSA’s building
operating expenses. Congress then allocates FBF funds for construction of new
buildings, as well as for repairs to existing buildings.
On February 4, 2004, President George W. Bush implemented new asset
management guidelines for executive branch agencies with Executive Order 13327.
Section 4 established a Federal Real Property Council (FRPC) within the Office of
Management and Budget to provide oversight for the executive branch’s real property
inventory. With the issuance of E.O. 13327, GSA’s Office of Governmentwide
Policy was formally recognized as the administrator of the executive branch’s
centralized real property database, known as the Federal Real Property Profile
(FRPP).
A major concern for GSA is maintaining its inventory of aging federal
properties, since the FBF has not historically produced sufficient rent revenues to
finance all repair and alteration needs. Investigations by the Government
Accountability Office (GAO) have revealed that GSA and other landholding agencies
could give greater attention and funding to maintaining a streamlined federal
inventory by identifying and disposing of unneeded buildings and structures.
Introduced in the Senate on June 20, 2007, S. 1667 would authorize the
establishment of a five-year pilot program to allow for the expedited disposal of
surplus or underutilized federal real properties. The same day, the legislation was
referred to the Senate Committee on Homeland Security and Governmental Affairs.
On November 14, 2007, the committee approved, by voice vote, an amendment that
would include a provision to allow for no-cost conveyance of surplus federal property
to homeless assistance groups. S. 1667, as amended, was ordered to be reported
favorably by the committee on November 14, 2007.
Contents
Introduction and Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Current Conditions of Federal Building Inventory . . . . . . . . . . . . . . . . . . . . 2
Aging Federal Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
More Reliable Real Property Data Needed . . . . . . . . . . . . . . . . . . . . . . 5
Funding Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Reliance on Leased Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Past Congressional Reform Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Bush Administration Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Federal Real Property Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Proposed Legislation in the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . 12
Congressional Initiatives in the 110th Congress . . . . . . . . . . . . . . . . . . . . . . 12
Policy Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
List of Tables
Table 1. FY2006 Federal Agency Profile:Real Property Assets and
Replacement Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 2. Agency Rental Cost for Leased Real Property Within the United States,
September 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The General Services Administration and
Federal Real Property Management:
Overview and Current Legislation
Introduction and Background
Prior to enactment of the Public Buildings Act in 1926, construction authority
for each federal building was approved and funded in separate legislation.1 This
1926 act provided the basic authority for construction of federal buildings by the
congressional authorizations and appropriations process. Congress later enacted the
Public Buildings Act of 1949 to authorize the acquisition of sites and design plans
for federal buildings located outside of Washington, DC, and for improvements to
existing federal buildings.2 The same year, Congress enacted the Federal Property
and Administrative Services Act of 1949.3 This act established the General Services
Administration (GSA) and gave the GSA Administrator responsibility for
administering federal real property. In 1954, Congress amended the Public Buildings
Act of 1949 to authorize the GSA Administrator to acquire titles to real property and
to construct federal buildings through lease-purchase contracts.4 Under this
procedure, a building was financed by private capital, and the federal government
made installment payments on the purchase price in lieu of rent payments. Title to
the property vested in the federal government at the end of the contract period,
generally of at least 10, and not more than 30, years.
When authority for lease-purchase contracts expired in 1957, Congress
approved a successor statute, the Public Buildings Act of 1959.5 The 1959 act reestablished earlier requirements to provide for direct federal construction of public
buildings through the congressional appropriations and authorizations process. This
act, as amended and recodified over the years, remains the basic statute authorizing
the construction and renovation of federal civilian facilities. The act vests the
Administrator of General Services with sole authority to acquire, construct, alter,
repair, remodel, improve, or extend most federal buildings, and to acquire the sites
or additions to sites for such buildings.
1
44 Stat. 630.
2
63 Stat. 176.
3
63 Stat. 377; 41 U.S.C. §251 et seq. Since 1949, the enabling law’s original provisions
have been frequently and substantially amended.
4
68 Stat. 518.
5
73 Stat. 478; 40 U.S.C. §3301 et seq.
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The legislation also requires GSA to submit to the congressional authorizing
committees a detailed prospectus of each proposed building project costing more
than $2.59 million (in FY2008) prior to the appropriation of funds, and requires GSA
to submit an annual report to Congress on all projects and to conduct an ongoing
survey of federal building needs.
The Public Buildings Act Amendments of 1972 established the Federal
Buildings Fund (FBF) within GSA to be used for acquisition and maintenance of real
property.6 Beginning in 1975, the FBF replaced direct appropriations to GSA as the
primary means of financing the operating and capital costs associated with federal
buildings. Created as a revolving fund, the FBF receives revenue from rent payments
charged to federal agencies occupying GSA’s office space. While these deposits to
the FBF are the principal source of funding, Congress annually authorizes how GSA
may allocate its FBF assets as new obligational authority in appropriations funding.
In addition, Congress may appropriate additional money into the fund. Generally,
FBF revenues are first used for GSA’s building operating expenses. Congress then
allocates FBF funds for construction of new buildings, as well as for repairs to
existing buildings.7
The FY2008 Consolidated Appropriations Act, signed into law on December
26, 2007, authorizes that an additional amount of $84 million be deposited in the
Federal Buildings Fund.8 The President’s FY2009 budget requests that $525 million
be deposited in the FBF.9
Current Conditions of Federal Building Inventory
GSA, through its Public Buildings Service (PBS), is the primary federal real
property and asset management agency. In FY2006, GSA’s portfolio consisted of
8,847 real property assets with an estimated replacement value of $68.8 billion.10
In addition to GSA, 27 other federal agencies have independent landholding
authorities that enable them to acquire or construct specific types of buildings or
facilities (see Table 1). Numerous studies by the Government Accountability Office
(GAO) reveal that a large portion of the federal government’s real property inventory
is urgently in need of significant and costly repairs.11 In many instances, federal
6
86 Stat. 216.
7
U.S. General Accounting Office, Federal Buildings: Funding Repairs and Alterations Has
Been a Challenge — Expanded Financing Tools Needed, GAO-01-452, April 2001, pp. 6-7.
8
P.L. 110-161, December 26, 2007.
9
U.S. Office of Management and Budget, Budget of the United States Government, Fiscal
Year 2009 – Appendix (Washington: GPO, 2008), p. 1065.
10
U.S. General Services Administration, The Federal Real Property Council, FY2006
Federal Real Property Report: An Overview of the U.S. Federal Government’s Real
Property Assets, July 2007, p. 6.
11
In 2004, GAO changed its name from the General Accounting Office to the Government
(continued...)
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facilities are vacant or no longer needed because of agencies’ changing missions.
Problems persist in administering the real property portfolio because of a lack of
reliable data, funding limitations, and GSA’s continued reliance on leasing for office
space.
Table 1. FY2006 Federal Agency Profile:
Real Property Assets and Replacement Value
Agency Name
Agriculture
Air Force
American Battle Monuments
Commission
Army
Commerce
Corps of Engineers
Defense/WHS
Energy
Environmental Protection
Agency
General Services
Administration
Health and Human Services
Homeland Security
Independent Government
Offices
Interior
Justice
Labor
National Aeronautics and Space
Administration
National Archives and Records
Administration
National Science Foundation
Navy
Office of Personnel
Management
Peace Corps
State
State (USAID)
Tennessee Valley Authority
Transportation
11
Real Propertya Assets
% of
Number
Total
59,879
4.776%
171,352
13.666%
Replacement Valueb
% of
Amount
Total
$46,834,160,262
3.065%
$235,808,469,245
15.432%
183
0.015%
4,423,800,000
0.290%
264,961
1,340
146,838
203
18,620
21.132%
0.107%
11.711%
0.016%
1.485%
$262,865,575,017
$2,315,006,096
216,877,416,823
2,787,946,939
$85,697,308,479
17.203%
0.152%
14.193%
0.182%
5.608%
270
0.022%
$741,922,448
0.049%
8,847
0.706%
$68,818,536,686
4.504%
3,357
27,079
0.268%
2.160%
$9,867,744,843
$9,935,179,474
0.646%
0.650%
431
0.034%
$106,028,671
0.007%
184,347
4,363
2639
14.703%
0.348%
0.210%
$185,218,464,155
$15,150,700,400
$4,537,534,555
12.121%
0.992%
0.297%
4942
0.394%
$20,609,244,894
1.349%
41
0.003%
$1,747,256,609
0.114%
612
143,897
0.049%
11.477%
$1,099,880,301
$228,819,202,172
0.072%
14.975%
3
0.000%
$0c
0.000%
417
16,843
1,371
422
69,411
0.033%
1.343%
0.109%
0.034%
5.536%
$8,868,943
$11,543,484,787
$672,727,412
$0d
$6,309,796,350
0.001%
0.755%
0.044%
0.000%
0.413%
(...continued)
Accountability Office. 118 Stat. 811.
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Agency Name
Treasury
United States Postal Service
Veterans Affairs
Total
Real Propertya Assets
% of
Number
Total
110
0.009%
111,960
8.930%
9,083
0.724%
1,253,821
100.000%
Replacement Valueb
% of
Amount
Total
$1,056,055,014
0.069%
$20,262,644,625
1.326%
$83,930,650,740
5.493%
$1,528,045,505,940
100.000%
Source: U.S. General Services Administration, The Federal Real Property Council’s FY2006 Federal Real Property
Report: An Overview of the U.S. Federal Government’s Real Property Assets, July 2007, p. 6.
a. Real property assets are federal buildings and structures primarily used for office space, post offices, warehouses,
laboratories, hospitals, vehicle maintenance and repair facilities, industrial and utility plants, and housing facilities.
b. Replacement value is defined as the cost to replace the existing asset in current dollars.
c. The Office of Personnel Management reported $0 replacement value in FY2006.
d. The Tennessee Valley Authority did not report replacement value in FY2006.
Aging Federal Properties. GSA is responsible for identifying and
completing needed repairs to the federal buildings it manages. Maintaining these
facilities is a challenging task, since many of GSA’s largest buildings were
constructed more than 50 years ago, and are often designated as being historically
significant. In 1999, GSA estimated that nearly $4 billion was needed to complete
repairs and alterations to 903 buildings, or approximately 54% of its total inventory.
Of this total, 44 buildings were described as large office buildings or courthouses,
with an average age of 49 years and with estimated repair costs of more than $20
million for each facility.12
GAO investigations reveal that a significant inventory of repairs and alterations
are necessary to renovate federal buildings that have deteriorated, become
functionally obsolete, or have health- and safety-related problems.13 Available data
indicate that, in addition to GSA, other major real property-holding agencies also
have a large inventory of facilities that are deteriorating, underutilized, or vacant. In
January 2003, GAO issued a report on federal property as part of its high-risk series,
which identifies areas vulnerable to mismanagement, waste, or fraud, and concluded
that “a major commitment is necessary to either modernize these facilities or to
dispose of them.”14 Inspections of several deteriorating federal buildings revealed
inadequate and malfunctioning air ventilation and fire safety systems; unsafe water
supplies; and continued structural deteriorations caused by long-standing plumbing
leaks. Other factors impeding adequate workplace conditions included outdated
cooling and heating systems, resulting in significantly higher operating costs, and
12
U.S. General Accounting Office, Federal Buildings: Billions Are Needed for Repairs and
Alterations, GAO/GGD-00-98, March 2000, pp. 3-4.
13
U.S. General Accounting Office, Federal Real Property: Executive and Legislative
Actions Needed to Address Long-standing and Complex Problems, GAO-03-839T, June
2003, pp. 6-7.
14
U.S. General Accounting Office, High-risk Series: Federal Real Property, GAO-03-122,
January 2003, p. 15.
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obsolete electrical systems unable to accommodate new information technology.15
Aging and deteriorating office space can also adversely impact federal employee
recruitment, retention, and productivity.
More Reliable Real Property Data Needed. The deteriorating physical
condition of many federal buildings and the corresponding underutilization and
vacancy of many government facilities has serious implications for GSA’s real
property portfolio. Investigations by GAO have revealed that many properties in the
federal inventory are not financially self-sustaining and are no longer relevant to their
agencies’ changing missions.16 By identifying and disposing of unneeded properties,
GSA and other landholding agencies could give greater attention and funding to the
repair of a streamlined federal inventory. Due to the vast size and diversity of its real
property portfolio, GSA is often not able to fully identify and assess each of its
properties to determine those that need repairs, and those for which there is no longer
any substantial federal purpose. In May 1991, GAO first reported that GSA had not
fully implemented a systematic approach for managing its inventory because of a
lack of reliable real property data, causing even more delays in needed building
repairs.17
GSA annually reported summary data on real property owned and leased by the
federal government worldwide, based on inventory reports submitted by the
individual agencies. These inventory reports were not, however, required under law,
and there was no statutory requirement for landholding agencies to submit accurate
or timely data. In July 2000, GAO reported to Congress that a comprehensive and
reliable inventory of federal real property holdings was the first step in identifying
and subsequently managing the government’s large portfolio of federal assets. GAO
investigations also revealed that GSA and the other landholding agencies had poor
or inadequate data assessing the current market value of their properties.18 However,
GAO acknowledged that agency compliance with proposed statutory requirements
for a comprehensive property inventory would be a “challenging task,” based on its
research that the federal government lacked the necessary standards to ensure
complete and reliable information on its property assets.19
Lacking a reliable and comprehensive listing of federal properties, GSA and the
other landholding agencies continued to have limited success in the identification,
maintenance, or disposal of their federal inventories. In response to its earlier
criticisms, GAO reported in June 2003 that GSA had begun to conduct more
systematic reviews of individual facilities, giving funding priority to projects that
might return more rent revenues to the FBF, and disposing of properties for which
15
Ibid, p. 22.
16
Ibid, p. 2.
17
U.S. General Accounting Office, Federal Buildings: Actions Needed to Prevent Further
Deterioration and Obsolescence, GAO/GGD-01-57, May 1991, pp. 3-5.
18
U.S. General Accounting Office, Federal Real Property: Views on Management Reform
Proposals, GAO/T-GGD-00-175, July 2000, p. 5.
19
Ibid.
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there is no long-term federal purpose.20 According to GSA officials, GSA intended
to complete implementation of its portfolio restructuring project in 2007, reflecting
a streamlined inventory of self-sustaining and mission-relevant properties.21
Funding Limitations. Even with GSA’s improved accounting of real
property data, funding limitations will likely continue to be the greatest obstacle to
completing urgent repairs and renovations to aging federal facilities. In 1991, GAO
reported that both GSA and the Office of Management and Budget (OMB) estimated
that nearly $4 billion would be required to be deposited into the FBF to complete
needed repairs to federal facilities.22 Ten years later, GAO estimated that $5.7 billion
was required to fund needed building repairs to the nearly 1,700 federal buildings that
GSA manages.23
A major concern for GSA is that the FBF has not historically produced
sufficient rent revenues to finance capital improvements. Generally, FBF revenues
are first used for GSA’s building operating expenses. Congress then allocates FBF
funds for construction of new buildings, as well as for repairs to existing buildings.
Between FY1995 and FY2001, GAO estimated that the FBF received about $5.3
billion each year in incoming rent revenues. Of this total, nearly 90% of the available
funds was used for GSA’s operating costs, rental payments for leased space, and
construction of new buildings, with, on average, only $606 million remaining each
year for completing repairs and renovations.24 Although Congress has annually
increased authorized funding for repairs and alterations within the FBF, these funds
are not expected to be adequate to maintain GSA’s current building inventory.
Funding data compiled by GSA in FY2001 indicate that, in seven previous fiscal
years, Congress had authorized $4.2 billion, or 63%, of the $6.8 billion in new
obligational authority that GSA had requested for building repairs and alterations.25
The federal government’s real property inventory is not static; that is, even as
certain repairs are completed, new problems are identified. In addition, the amount
of funding needed for repairs is greater each year due to cost increases in maintaining
an expanded inventory of properties. As a solution, GAO has stated that GSA must
find a way to generate the additional revenue necessary to upgrade its federal
20
GAO, Federal Real Property: Executive and Legislative Actions Needed to Address Longstanding and Complex Problems, p. 7.
21
U.S. General Accounting Office, Federal Real Property: Vacant and Underutilized
Properties at GSA, VA, and USPS, GAO-03-747, August 2003, p. 11.
22
GAO, Federal Buildings: Actions Needed to Prevent Further Deterioration and
Obsolescence, pp. 3-4.
23
U.S. General Accounting Office, Financial Condition of Federal Buildings Owned by the
General Services Administration, GA0-02-854R, August 2002, p. 1.
24
U.S. General Accounting Office, Federal Buildings: Funding Repairs and Alterations Has
Been a Challenge — Expanded Financing Tools Needed, GAO-01-452, April 2001, p. 15.
25
Ibid, p. 14.
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inventory.26 In order to increase the amount of funding available to adequately
maintain these federal properties, GSA officials have also expressed support for
legislative reforms that would authorize the agency to enter into contracts with the
private sector to renovate and rehabilitate federal buildings.
Reliance on Leased Properties. Another factor that adversely affects FBF
revenues and limits monies available for needed property maintenance is GSA’s
reliance on leased office space. Generally, the federal construction or purchase of
buildings provides the most cost effective approach to meet space requirements over
a long period of time.27 In the past decade, however, GSA has primarily relied on
lease agreements to acquire office space because of insufficient funding available to
construct new buildings or repair old ones.28
Over the past decade, GAO has documented GSA’s increasing use of operating
leases to secure needed office space. In 1995, GAO reported that GSA had entered
into 55 long-term lease agreements that would ultimately cost the federal government
$700 million more in extended rent payments than would have total construction
costs for the same space. A 1999 investigation by GAO auditors of nine major lease
agreements proposed by GSA revealed that construction would have been the most
economical option in eight instances, resulting in an estimated $126 million in
savings to the federal government. While this GAO investigation focused on GSA’s
leasing practices, GAO had previously found that the other landholding agencies with
leasing authorities also relied heavily on operating leases. 29
As of September 2004, GSA spent $4.4 billion to lease 162.9 million square
feet of building space, about 70% of the government’s total rental costs (see Table
2, below).30 The same year, it was reported that GSA had leased more than 100,000
square feet of office space in Arlington, VA, as well as leasing partial space in two
other office buildings, totaling 143,000 square feet.31
The annual congressional appropriations and authorizations process favors
operating leases over construction or purchasing agreements, since they appear less
costly in any given year. While operating leases are more expensive over a 10-year
26
Ibid, p. 14.
27
According to GAO findings, lease-purchase contracts, where payments are extended over
a 10- to 30-year period and ownership is eventually transferred to the government, are
generally more expensive than construction contracts, but less expensive than lease
agreements. See U.S. General Accounting Office, High-Risk Series: Federal Real Property,
p. 30.
28
GAO, Federal Real Property: Executive and Legislative Actions Needed to Address Longstanding and Complex Problems, p. 8.
29
GAO, High-Risk Series: Federal Real Property, p. 30.
30
U.S. General Services Administration, Office of Governmentwide Policy, Overview of the
United States Government’s Owned and Leased Real Property: Federal Real Property
Profile, as of September 30, 2004, p. 6.
31
Dana Hedgpeth, “Job Gains Drive Lease Market in Suburbs,” Washington Post, April 12,
2004, p. E1.
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period, these total costs are not reflected in a single year’s appropriations request. In
contrast, total costs necessary for proposed construction and lease-purchase contracts
must be included in the first year’s budget authority. According to studies by GAO,
the current budget process enables more expensive leasing transactions to appear to
be more economical in the short term, thus encouraging an “over-reliance” on them
for meeting the government’s space requirements.32
Table 2. Agency Rental Cost for Leased Real Property
Within the United States, September 2004
Agency
General Services
Administration
United States Postal Service
Agriculture
Army
Veterans Affairs
Transportation
Health and Human Services
Navy
Homeland Security
Treasury
Interior
Corps of Engineers
Remaining Agencies (16)a
Total
Leased
Building Area
(Square Feet)
Annual Rental Cost
Total Dollars
% of Total
Per Square Foot
162,935,354
$4,367,795,701
70.69%
$26.81
101,376,121
11,950,446
10,247,040
6,466,005
7,139,919
3,520,966
6,550,700
3,511,862
1,364,601
2,792,558
3,166,178
22,724,993
343,746,743
$793,437,960
$193,804,441
$152,745,599
$109,883,052
$90,304,258
$86,947,570
$73,304,293
$51,861,657
$45,390,806
$37,869,139
$36,324,163
$138,848,579
$6,178,517,218
12.84%
3.14%
2.47%
1.78%
1.46%
1.41%
1.19%
0.84%
0.73%
0.61%
0.59%
2.25%
100.00%
$7.83
$16.22
$14.91
$16.99
$12.65
$24.69
$11.19
$14.77
$33.26
$13.56
$11.47
$6.11
$17.97
Source: Federal Real Property Profile as of September 30, 2004 (website visited Jan. 16, 2007),
[http://www.gsa.gov/gsa/cm_attachments/GSA_DOCUMENT/Annual%20Report%20%20FY2004%20Final_R2M-n
11_0Z5RDZ-i34K-pR.doc], p. 8. Please note that GSA no longer publishes data for annual rental costs for leased
properties, as of September 30, 2004.
a. Interior, Commerce, Justice, Energy, Smithsonian, Independent Government Offices (Commodity Futures
Commission and Broadcasting Board of Governors), Environmental Protection Agency, Labor, National
Aeronautics and Space Administration, Air Force, Government Printing Office, Federal Communications
Commission, National Science Foundation, American Battle Monuments Commission, Peace Corps, National
Archives and Records Administration.
Past Congressional Reform Initiatives
Two major legislative initiatives were introduced in the 106th Congress to revise
federal property management policies. S. 2805, sponsored by Senator Fred
Thompson, would have required the GSA Administrator and landholding federal
agencies to establish and maintain asset management principles for real and personal
property; establish a worldwide inventory of all real property holdings; and establish
32
GAO, High-Risk Series: Federal Real Property: Federal Real Property, p. 31.
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financial incentives for federal agencies to improve their property management
practices. H.R. 3285, sponsored by Representative Pete Sessions, would have
authorized the GSA Administrator to enter into partnerships with non-federal sources
to lease federal property. Neither bill was reported out of committee before the
adjournment of the 106th Congress.
In the 107th Congress, S. 1612, introduced by Senator Fred Thompson on
November 1, 2001, was based in large part on President George W. Bush’s “Freedom
to Manage” administrative initiative. Title III of the proposed legislation, entitled
“Federal Property Asset Management Reforms,” incorporated the major provisions
of both S. 2805 and H.R. 3285, which were introduced in the 106th Congress. S. 1612
was not reported out of committee before adjournment of the 107th Congress.
Two similar bills were introduced in the 108th Congress to revise federal
property management policies, H.R. 2548 and H.R. 2573. The first, H.R. 2548, the
Federal Property Asset Management Reform Act, was more comprehensive in its
attempt to allow landholding agencies greater flexibility to manage directly their own
federal properties. Its provisions were similar to those of S. 1612, introduced in the
107th Congress. The proposed legislation would have modified existing federal
property statutes to authorize landholding agencies to enter into the following
transactions: interagency transfers or exchanges of property; subleases of unexpired
portions of existing leases; property exchanges or sales with non-federal sources; or
outleases33 of underutilized real property that must remain in federal ownership. GSA
would have been authorized to review and approve of any such transaction to ensure
compliance with federal property management requirements. If enacted, H.R. 2548
would have authorized federal landholding agencies to retain the proceeds from their
real property transactions. New statutory requirements would have been provided for
the crediting of monetary proceeds to existing agency accounts, which would then be
used to fund that agency’s capital asset expenditures. In order to better administer
these real property assets, H.R. 2548 would have established the position of Senior
Real Property Officer within each federal landholding agency. H.R. 2548 was
ordered to be reported, as amended,34 by voice vote on July 17, 2003. No further
action occurred during the 108th Congress.
The second bill, H.R. 2573, the Public Private Partnership Act, focused on
public-private partnerships as a method to increase funding for the FBF and would
have authorized GSA to administer these transactions. The proposed legislation
would have authorize GSA to enter into agreements with non-federal entities for the
acquisition, lease, construction, maintenance, or renovation of real property under
the jurisdiction of GSA, or other landholding agencies. If enacted, H.R. 2573 would
33
The term outlease refers to an agreement granting the use of property which temporarily
is not required for public use, for a specified period of time, revocable at will or as otherwise
provided in the agreement, for an adequate, specified consideration.
34
The House Government Reform Committee added an en bloc amendment that would
allow landholding agencies to withhold property records for reasons of national security, as
authorized by law. The amendment would also require, in certain instances, that cultural
resource surveys or comprehensive preservation plans be completed before a federal
property is sold, transferred, or leased. There is no written committee report.
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have amended current law to authorize GSA to convey interests in real property to
non-federal sources, and would exempt such agreements from existing congressional
approval requirements, and waive other specified legal requirements as necessary.
GSA would have also been authorized to enter into real property transactions under
the jurisdiction of non-landholding agencies only upon the request of agency heads.
GSA would have been required to transmit a report to Congress on all proposed
property transactions as a prerequisite to entering into such agreements. Proceeds
from all real property transactions would be deposited into the FBF. The proposed
legislation would have authorized GSA to enter into real property agreements for a
six-year period from the date of enactment. H.R. 2573 was reported favorably from
the House Government Reform Committee to the full House by voice vote on June
25, 2003.35 No further action was taken on H.R. 2573.
Although no final action was taken on either H.R. 2548 or H.R. 2573, the 108th
Congress revised GSA’s property management policies with the passage of the
FY2005 Consolidated Appropriations Act on December 8, 2004.36 Section 412
authorizes the GSA Administrator to convey real property by sale, lease, exchange,
or leaseback agreements, with net proceeds deposited into GSA’s Federal Buildings
Fund for future real property capital acquisitions and improvements.
Bush Administration Activity
On February 4, 2004, President George W. Bush implemented new federal
property guidelines for executive branch agencies with his establishment of
Executive Order 13327, entitled “Federal Real Property Asset Management.”37 Many
of its provisions are based on his earlier administrative initiatives pertaining to
federal property asset management reforms, which were incorporated as Title III of
S. 1612, introduced during the 107th Congress. In order to increase agency
accountability for real property asset management, E.O. 13327 established the
position of Senior Real Property Officer within each executive branch agency.
Section 3(b) required that each officer prepare and submit to OMB an initial asset
management plan composed of data on the agency’s real property assets, and
proposals for cooperative arrangements with the commercial real estate community.
Federal Real Property Council. Section 4 established a Federal Real
Property Council (FRPC) within OMB to develop guidance and provide oversight for
the executive branch’s real property inventory. The chairman of the council is OMB’s
Deputy Director for Management. Members include each agency’s Senior Real
Property Officer, OMB’s Financial Management Controller, the Administrator of
GSA, and any other federal officials deemed appropriate by the chairman.
35
There is no written committee report.
36
118 Stat. 3259.
37
U.S. President (Bush), “Federal Real Property Asset Management,”E.O. 13327, Federal
Register, vol. 69, February 6, 2004, pp. 5897-5900. President Bush also added federal real
property asset management as the sixth government-wide initiative to be included in the
President’s Management Agenda.
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The council was authorized to consider the following performance measures in
assessing the success of the executive branch’s real property activities:
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cost comparisons justifying methods used to acquire new property
leases, exchanges, lease-purchases, or new construction;
total life-cycle costs associated with each federal facility, from
acquisition to final disposition;
statistics on real property disposal activities, such as time, costs, and
final profits;
operating, maintenance, environmental, and security costs for each
federal facility;
data on vacant or under-utilized federal property;
realization of equity value in real property assets;
opportunities for real property transactions with the private sector;
and
development of an improved working environment to increase
productivity.
Section 5 required GSA, in consultation with the FRPC, to provide policy
oversight, and to manage selected properties for the executive branch agencies that
requested such assistance. GSA was authorized by Section 5(b) to establish and
maintain a comprehensive database of the executive branch’s real property inventory,
except when otherwise precluded for reasons of national security. GSA is also
required to publish any asset management measures or standards that may be adopted
by the Federal Real Property Council. E.O. 13327 further required GSA to consult
with OMB and the other landholding agencies to develop new legislative initiatives
to improve the federal government’s management of real property activities. Section
2(b) recognizes that the provisions of E.O. 13327 do not supersede existing real
property law.
In FY2005, the FRPC issued new federal property reporting requirements for
executive branch agencies, which replaced GSA’s existing reporting requirements
and the agency’s comprehensive annual report on federally owned and leased
properties. With the issuance of E.O. 13327, GSA’s Office of Governmentwide
Policy was formally recognized as the administrator of the executive branch’s
centralized real property database, known as the Federal Real Property Profile
(FRPP). Published in June 2006, the Federal Real Property Council’s first executive
summary, the FY2005 Federal Real Property Report, was compiled from data
submitted by executive branch agencies as of December 15, 2005.38 The issuance of
E.O. 13327 did not mandate the reporting of data for public domain land and certain
other types of assets which had previously been compiled and reported by GSA. In
addition, statistics for leased properties are no longer published by GSA.
38
U.S. General Services Administration, The Federal Real Property Council’s FY2005
Federal Real Property Report: An Overview of the U.S. Federal Government’s Real
Property Assets, June 2006.
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Proposed Legislation in the 109th Congress
H.R. 3134, the Federal Real Property Disposal Pilot Program and Management
Improvement Act of 2005, was introduced in the House by Representative Tom
Davis and one co-sponsor, on June 30, 2005. The proposed legislation established a
five-year pilot program to allow for the expedited disposal of surplus or underutilized
federal real properties. The OMB Director would be authorized to select the federal
properties to participate in the program, based on the cost and time required to
dispose of real property assets and the availability of unneeded federal properties.
A selected federal property would be sold at or above fair market value, and the
agency that owned the property would be authorized to retain a portion of the
proceeds. If enacted, H.R. 3134 would have codified certain provisions authorized
by E.O. 13327, such as the establishment of a Federal Property Council and the
creation of senior real property officer positions in the federal agencies.
Two amendments were adopted by voice vote on October 26, 2005. The first
amendment authorized the GSA Administrator to notify local governments of the
federal government’s intent to dispose of federal property in their jurisdictions. In
addition, a federal property determined by GSA to be a public benefit conveyance
for use by homeless groups would not be eligible for the five-year pilot program. The
second substitute amendment required that the OMB Director submit an annual
report on the status of the Federal Real Property Disposal Pilot Program to the House
Government Reform Committee and the Senate Homeland Security and
Governmental Affairs Committee. H.R. 3134, as amended, was reported favorably
by the House Committee on Government Reform on October 26, 2005. No further
action was taken in the 109th Congress.
Congressional Initiatives in the 110th Congress
Investigations by the Government Accountability Office (GAO) have indicated
that GSA and other landholding agencies could give greater attention and funding to
maintaining a streamlined federal inventory by identifying and disposing of unneeded
properties.39 Vacant and underutilized federal properties are costly to maintain GAO
reported, and could be “put to more cost-beneficial uses, exchanged for other needed
property, or sold to generate “revenue” for the federal government.40 GSA’s Office
of Property Disposal administers the disposal of real property that is no longer
needed by executive branch agencies. Underutilized federal property can vary
widely, and may include land, office buildings, warehouses, former post offices,
farms, family residences, commercial facilities, or airfields located in the United
States, Puerto Rico, the U.S. Virgin Islands, or the U.S. insular areas in the Pacific
39
U.S. General Accounting Office, High-risk Series: Federal Real Property, GAO-03-122,
January 2003, pp. 15-22.
40
U.S. Government Accountability Office, Federal Real Property: Most Public Benefit
Conveyances Used as Intended, but Opportunities Exist to Enhance Federal Oversight,
GAO-06-511, June 2006, p. 1.
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Ocean.41 When a federal agency determines that it no longer needs a property to
carry out its mandate, it reports the unneeded or excess property to GSA. As
authorized by statute, GSA must first make an excess property available to other
executive branch agencies.42 If GSA determines that another federal agency has a
need for the excess property, the property is transferred to that agency in accordance
with the authority delegated and regulations prescribed by the GSA Administrator.
If GSA determines that there is no need within the federal government for a federal
property, it becomes surplus property, and may be made available to state or local
governments and qualified tax-exempt nonprofit institutions through GSA’s public
benefits conveyance (PBC) program.43 In June 2007, the Office of Management and
Budget (OMB) reported that the federal government owned 18,393 excess assets with
a replacement value of almost $13.8 billion, and 3,409 surplus properties valued at
approximately $3.9 billion.44
S. 1667 was introduced on June 20, 2007, by Senators Tom Carper and Tom
Coburn.45 The proposed legislation would authorize the establishment of a five-year
pilot program to allow for the expedited disposal of surplus or underutilized federal
real properties. The OMB Director, in concurrence with agency heads, would be
authorized to select federal properties to participate in the program. Section 623
would authorize the expedited disposal of real properties to be sold for cash at not
less than the fair market value. Federal properties selected for the pilot program
would not be authorized for disposal by “exchange, trade, transfer, acquisition of
like-kind property, or other non-cash transaction.” If the proposed legislation were
enacted, federal properties selected for the expedited disposal program would not be
subject to GSA requirements and procedures for public benefit conveyance of
federal surplus property. An agency that sold a surplus property through the
expedited disposal process would receive reimbursement for any administrative costs
incurred through the sale of the property. In addition, S. 1667 would authorize that
20% of the balance of any proceeds received by the disposal of a surplus property
would be deposited into that agency’s account. The remaining 80% of the proceeds
would be deposited into the U.S. Treasury as miscellaneous receipts. On June 20,
41
U.S. General Services Administration, Office of Property Disposal, Acquiring Federal
Property for Public Uses, p. 1, available at [http://www.propertydisposal.gsa.gov].
42
40 U.S.C. § 524.
43
GSA has primary responsibility for the administration of the program but, as required by
statute (10 U.S.C. § 2687 note), has delegated conveyance authority to the Department of
Defense (DOD) for DOD properties that are closed or realigned as part of the Base
Realignment and Closure (BRAC) process. For additional information, see CRS Report
RS20630, Surplus Federal Property, by Stephanie Smith.
44
When a federal agency determines that it no longer needs a property to carry out its
mandate, it reports the unneeded or excess property to GSA. As authorized by statute, GSA
must first make an excess property available to other executive branch agencies. If GSA
determines that there is no need for a federal property within the federal government, it
becomes surplus property. Executive Office of the President, Office of Management and
Budget, Response to Section 408 of Public Law 109-396, June 15, 2007, p. 2.
45
An identical bill, H.R. 3049, was introduced in the House on July 16, 2007. The bill was
referred to the House Committee on Oversight and Government Reform on July 16, 2007.
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2007, the legislation was referred to the Senate Committee on Homeland Security
and Governmental Affairs. On November 14, 2007, the committee approved, by
voice vote, an amendment that would include a provision to allow for no-cost
conveyance of surplus federal property to homeless assistance groups. S. 1667, as
amended, was ordered to be reported favorably by the committee on November 14,
2007.
Policy Considerations
The federal government’s real property inventory is vast, comprising 3.7 billion
square feet of office space. Of this total, GSA is responsible for 387.7 million square
feet of executive branch office space, or 10.4% of total federal space. Maintaining
these facilities is a challenging task, since many of GSA’s largest buildings,
constructed more than 50 years ago, are in poor condition and have become
functionally obsolete. It has been estimated that nearly $5.7 billion would be needed
to restore or repair the 1,700 buildings and structures that GSA manages.
It has been documented that incoming rent revenues deposited into the FBF
have been insufficient to fund needed repairs. Moreover, GSA’s efforts to deal with
a long-standing backlog of needed repairs have been hindered by a lack of reliable
and detailed information about specific properties. In addition, real property law
restricts GSA’s, and other landholding agencies’, ability to generate the additional
revenues necessary to upgrade federal buildings, or to dispose of them when they are
no longer of use. Some observers contend that existing statutory requirements that
have been in place since 1949 often constrain effective federal property management
that is necessary to meet agencies’ changing mission requirements.
The 108th Congress revised GSA’s property management policies with the
passage of the FY2005 Consolidated Appropriations Act, on December 8, 2004.
Section 412 authorized the GSA Administrator to convey real property by sale, lease,
exchange, or leaseback agreements, with net proceeds deposited into GSA’s Federal
Buildings Fund for future real property capital acquisitions and improvements.
Introduced in the 110th Congress, S. 1667 would establish a five-year pilot
program to allow for the expedited disposal of surplus or underutilized federal real
properties. An agency that sold a surplus property would be authorized to keep 20%
of the proceeds, with the remaining 80% of the proceeds to be deposited in the U.S.
Treasury. Both GSA and GAO have long supported reform efforts that would
provide revenues from real property transactions. It also appears that certain types
of transactions with the private sector would continue to be encouraged as the most
cost-effective means to restore federal properties, and to dispose of properties that the
government no longer needs. The following issues may arise as part of congressional
oversight of property management:
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Should GSA and/or individual agencies be allowed to enter into real
property transactions?
Should individual agencies be allowed to retain revenues from real
property transactions, or should revenues be deposited into the FBF?
Do individual agencies currently have the proven ability to
effectively manage their own properties?
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What type of safeguards must be in place to ensure that such
transactions are effectively administered?
Enactment of reform initiatives, such as S. 1667, could fundamentally change
existing law by giving federal agencies new incentives to manage and dispose of their
real property inventories. Other issues regarding property management may also need
to be addressed to resolve long-standing problems. GAO has reported that the federal
government’s continued reliance on leased property remains as one of the major
obstacles to a viable and self-sustaining federal property portfolio. As stated earlier,
the current budget process favors lease agreements that appear more economical. One
option that Congress may choose to consider would be to include a reference to the
total cost of lease agreements in the annual appropriations and authorizations process
to better reflect the actual long-term costs associated with leasing.
President Bush’s establishment of the Federal Real Property Council and the
appointment of Senior Real Property Officers have initiated reforms in property
management for executive branch agencies. Congressional enactment of H.R. 3134
in the 109th Congress would have codified these provisions into law. To emphasize
the broad applicability of property management reform, President Bush included
federal real property asset management as the sixth government-wide initiative of the
President’s Management Agenda in February 2004.
Increased accountability among OMB, GSA, and the executive agencies may
produce more reliable and detailed budget submissions to Congress in the future. In
addition to Congress and the executive branch, local and foreign governments, the
private sector, and various advocacy groups, such as historic preservation
organizations, all have a vested interest in how the federal government acquires,
manages, and disposes of its real property. A diversity of views could be expected
should Congress choose to directly address this issue.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.