STATEMENT OF STEPHEN A. PERRY

ADMINISTRATOR

GENERAL SERVICES ADMINISTRATION

BEFORE THE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

Subcommittee on Economic Development, Public Buildings and Emergency
Management

U.S. HOUSE OF REPRESENTATIVES

APRIL 18, 2002

Chairman LaTourette and Members of the Subcommittee:

Thank you for inviting me to testify today concerning H.R. 3947, the
"Federal Property Asset Management Reform Act of 2002."

I am pleased to be with you to discuss the various reforms in this bill
to improve the more than 50-year old statute under which Federal
agencies manage and dispose of their real and personal property. The
General Services Administration (GSA) believes that agencies should be
provided the freedom to manage their property more effectively through
the use of appropriate and up-to-date management practices and
incentives. Accordingly, we would like to see the existing property
management statutes more accurately reflect the current needs of the
government and emerging practices of the commercial marketplace. This
will help agencies achieve their mission goals by reducing the amount of
deteriorated, vacant and underutilized space in the existing Federal
real property inventory.

Before I begin my testimony I'd like to introduce the GSA team with me
today, which includes Mr. Joe Moravec, the Commissioner of the Public
Buildings Service, and Mr. David Bibb, the Deputy Associate
Administrator for Real Property in GSA's Office of Governmentwide
Policy.

I would like to applaud this Subcommittee on their concern and efforts
to improve Federal property management and for taking this on as a
priority management reform issue. I also want to thank the Subcommittee
for this unique opportunity to discuss the problems, policies, and
procedures surrounding the management and disposal of Federal property.
As I have already mentioned, on October 15, 2001, the President
submitted to the Congress the "Managerial Flexibility Act of 2001." The
legislation included a reform proposal to amend many of the existing and
outdated provisions of the Federal Property and Administrative Services
Act of 1949 (the Property Act). On November 1, 2001, the legislation was
introduced by Senator Thompson as S. 1612. On March 12, 2002,
Representatives Sessions, Davis, and Burton, introduced part of S. 1612
as a separate bill, H.R. 3947. The bill entitled "Federal Property Asset
Management Reform Act of 2002," as introduced, was amended on March 14,
2002, with a bi-partisan proposal and reported out unanimously by the
House Committee on Government Reform. Both House and Senate bills
incorporate reforms that if enacted could improve the management of the
Federal Government's billions of dollars worth of real and personal
property.

GSA would like to discuss certain provisions that are included in H.R.
3947.

We believe that H.R. 3947 addresses these shortcomings and incorporates
a strategic perspective into property management decisionmaking during
all phases of the property's life cycle. Specifically, the bill would
achieve the following goals:

**[Goal #1 - Establishes Effective Property Management Processes and
Procedures.]{.underline}**

GSA would collaborate with other Federal landholding agencies to
establish and maintain [Asset Management Principles]{.underline} (AMP).
In addition, under H.R. 3947 landholding agencies would prepare
[Strategic Real Property Plans]{.underline}, appoint a [Senior Real
Property Officer]{.underline}; and establish and maintain a
Governmentwide [Real Property Information Database]{.underline}.

**[Goal #2 -- Helps Agencies Maintain Property Needed to Accomplish
Agency Mission Requirements.]{.underline}**

H.R. 3947 would provide landholding agencies with common sense,
businesslike practices and techniques to manage their property
strategically. The existing Property Act lacks the flexibility and
incentives for agencies to manage their property inventories
strategically.

The bill would give landholding agencies several new authorities to
address these limitations under the Property Act such as [Exchange/Sale
(Real Property); Subleasing; Exchange/Sale (Personal Property); and
Outleasing and]{.underline} [Public Private Partnerships]{.underline}.

**[Goal #3 - Provides Incentives to Dispose of Property Not Needed for
Agency Mission Requirements.]{.underline}**

GSA recognizes that most Federal landholding agencies have no
opportunity to recover the equity from the disposal of underused or
obsolete property and apply the proceeds toward meeting their ongoing
facilities needs. Agencies are not allowed to sell, exchange, sublease
or outlease property that no longer supports their missions.
Consequently, agencies must divert resources to hold such underused and
unproductive property that have little or no functional value to their
missions. H.R. 3947 would provide the underpinnings for sound property
management decisionmaking, and permit agencies to use proceeds to offset
the direct and indirect real property transactional costs and in meeting
agency capital needs.

Mr. Chairman, In addition, I would like to emphasize two significant
points.

First, landholding agencies would remain responsible for the proper
management of Federal resources and continue to keep the Congress, the
President and the public properly informed through existing oversight
procedures. These include the submission of agency's strategic plans,
asset management plans, annual budget submissions, and the review of all
public private partnership arrangements over \$700,000.

Secondly, the bill expressly preserves the statutory authorities and
responsibilities of Federal landholding agencies and their programs. The
bill maintains GSA's exclusive authority to construct and alter public
buildings. The bill recognizes that strategic asset management should
remain an important part of any Federal agency\'s mission goals.

In conclusion, I would like to say that improving Federal property
management is critical to improving each agency\'s ability to meet its
mission requirements and improving governmentwide performance results.
H.R. 3947 under consideration by this Subcommittee and Congress would
incorporate the life cycle property management practices outlined here
to provide real property management principles, incentives, and
flexibility needed by agencies to effectively manage their portfolios of
real and personal property. We look forward to working with you to
ensure that legislation is passed this Congress.

Mr. Chairman, this concludes my statement. I am happy to answer any
questions you or other Subcommittee Members may have.