You are given two reports by the government agency.  

Report 1:
Document services at DOD are generally encompassed by three broad categories, shown in figure 1. Printing and reproduction includes the high-speed, high-volume reproduction of printed documents, as well as the distribution of those products. Documents are printed internally by DOD components, which include the military services, or printing is procured through an organization such as DLA Document Services, the Government Publishing Office (GPO), or a commercial vendor. Device procurement covers the acquisition of all office-level and production-level equipment. Office-level equipment includes printers; copiers; multi-function devices (MFDs), which perform multiple functions—printing, copying, scanning, and faxing—in one device; and all other devices that produce documents on-site and in low volume. Production-level equipment can include offset printers, digital presses, and other devices that are capable of high- speed, high-volume production of documents. Electronic content management is the digitization of printed documents and the creation and management of electronic content management systems, such as databases and automation services. The Under Secretary of Defense for Acquisition and Sustainment is the principal staff assistant and advisor to the Secretary of Defense on document services policies and programs and provides policy guidance regarding the operation and management of document services. DOD’s Instruction on document services also designates DLA Document Services as DOD’s single manager for printing and high-speed, high- volume duplication. This includes both the operation of DOD’s in-house print facilities and the procurement of such services from outside DOD. It also establishes DLA Document Services as the preferred provider of document conversion and automation services within DOD. DOD is in the process of revising its instruction on document services and is considering changes to DLA’s single manager role. DLA Document Services customer service network is comprised of a headquarters located in New Cumberland, Pennsylvania and 132 production facilities worldwide. Each military service also provides internally some document services of the type assigned to DLA. Service-level implementing guidance governs how each military service will provide document service-related activities to its components, commands, and organizations, such as through the Army Publishing Directorate, the Navy’s Chief Information Officer, and the Marine Corps Publishing and Logistics Systems Management Section. The Air Force’s major commands operate their own printing operations, according to a service official. DLA funds document services through the Defense-wide Working Capital Fund, which covers DLA’s costs for purchasing various commodities and providing services. DOD components and other customers, such as other federal agencies, reimburse the Defense-wide Working Capital Fund through the purchase of these commodities and services. In obtaining document services from DLA, DOD components—including the military services—use annual appropriations and their own working capital funds to reimburse the Defense-wide Working Capital Fund. DLA Document Services’ primary customers, by sales, are shown in table 1. DOD components can also fund document services outside of DLA Document Services with annual appropriations. Beginning in 2011, Congress, the federal government, and DOD initiated efforts to increase efficiencies in various areas involving document services. For example, Executive Order 13589 directed agencies to pursue steps to reduce administrative costs across the federal government by setting reduction goals for certain areas, such as printing and employee use of IT devices. According to DOD, it set—and achieved—a goal of a 20 percent reduction in fiscal year 2013 spending in these areas. Following this effort, in 2015, the Senate Committee on Appropriations recommended that DOD work with the Office of Management and Budget to reduce costs for printing and reproduction by 34 percent. DOD issued a report in December 2016 that identified the reductions it would make to achieve this goal. The plan focused on two main areas: emphasizing electronic content management over a reliance on printed materials and reducing the number of print devices. Starting in fiscal year 2015, DLA Document Services undertook a separate but complementary effort to further increase efficiencies and better accomplish its mission of providing document services to DOD and the military services. Figure 2 provides a time line of efficiency initiatives related to DOD’s document services. We discuss the status of these efforts later in this report. DOD has taken steps toward achieving efficiencies in its document services, including implementing a transformation plan for DLA Document Services, taking steps to reduce the cost and number of office print devices, and increasing its use of electronic content management. However, we identified four areas where further gains may be possible: better managing fragmentation in printing and reproduction services, reducing overlap in procuring print devices, meeting goals to reduce the number of print devices, and consolidating locations that provide mission specialty printing. In fiscal year 2015, DLA Document Services developed and, starting in fiscal year 2017, began implementing a transformation plan to further increase efficiencies and better accomplish its mission of providing document services to DOD and the military services. The objective of this transformation plan is to transition DOD from on-site printing to digital, online services by transforming the way customers, the workforce, and in- house facilities operate. Based on the plan, DLA Document Services is closing or consolidating 74 of its 112 brick and mortar facilities in the continental United States over the course of fiscal years 2018 and 2019, bringing its footprint to 38 facilities. An internal analysis of the transformation plan, conducted by DLA, estimates annual savings of 20 percent compared to DLA Document Services’ fiscal year 2017 operating costs once the plan is fully implemented in fiscal year 2019. Figure 3 shows DLA Document Services’ facility footprint prior to the implementation of its transformation plan and the locations it intends to retain following completion of the plan in fiscal year 2019. The transformation plan also calls for DLA Document Services to adjust the size and composition of its workforce by the plan’s completion in fiscal year 2019. For example, DLA Document Services intends to reduce its total number of full-time equivalent positions from about 600 to about 400, mainly through Voluntary Early Retirement Agreements and Voluntary Separation Incentive Payments. According to officials, DLA Document Services is also in the process of converting existing positions and hiring staff as customer relations specialists at each of the consolidated facilities. These officials noted that these positions are intended to help customers learn about and access the full range of services offered by DLA Document Services, including printing and reproduction services, office print devices, and electronic content management services. The goal of establishing these positions, officials stated, is to help facilitate the increased use of technology to meet customers’ needs, because DLA Document Services intends to transition customers to using an online portal to fulfill their printing needs. According to DLA, it is hiring many of the customer relations specialists from current DLA Document Services locations, and the planned reduction in its total full-time equivalent positions is a net reduction that accounts for the hiring of, and conversion of existing positions to, these customer relations specialists. DLA Document Services also plans to use and expand its existing public and private sector partnerships to support an increased emphasis on online services as it implements its transformation plan. For example, DLA Document Services currently works in partnership with GPO’s GPOExpress, an online portal for fulfilling printing and reproduction services in cooperation with FedEx Office. For those customer orders that DLA Document Services is unable to fulfill in-house, whether due to workload or lack of capability, GPO and GPOExpress meet these needs. According to a GPO official, GPOExpress will also serve customers located in areas where DLA Document Services has closed or consolidated 74 of its 112 U.S. facilities. We found that DLA Document Services’ transformation plan generally reflects leading practices for initiatives to consolidate physical infrastructure or management functions. For example, DLA Document Services identified goals for its transformation plan, ensured top leadership engagement, dedicated an implementation team, and established metrics that it is using to track progress toward the plan’s goals. As of June 2018, DLA Document Services is ahead in its goals for overall personnel reductions and for hiring customer service representatives and is behind on its goal for closing facilities, as shown in table 2. According to DLA Document Services officials, delays in reducing facilities have been due to a variety of factors, including earlier delays in hiring customer service representatives, equipment removal, and administrative delays at installations. There have also been delays as DLA Document Services has sought to minimize the effect of the consolidations on affected employees by offering buyout packages or transfers. DLA Document Services officials told us they anticipate that their efforts to consolidate facilities and reduce the overall number of employees will begin to achieve savings by fiscal year 2020. DOD, including the military services, has also taken steps to reduce the cost and number of office-level print devices, including identifying goals for reducing the number of print devices and plans for each military service to establish a mandatory source (e.g., one particular contract or organization) for obtaining print devices. The Army and Air Force have each established their own service-wide contracts for obtaining print devices and have mandated their use, while the Department of the Navy has mandated that the Navy and Marine Corps use DLA Document Services to obtain these devices. Military service officials told us that consolidating purchases with a single service-wide source reduces the cost of these devices by taking advantage of economies of scale, because vendors can offer better pricing for larger numbers of customer orders. Our previous work on strategic sourcing—a process that moves agencies away from numerous individual purchases to an aggregate approach—shows that such practices can allow agencies to better manage acquisitions and reduce costs. In addition, DOD and the military services have identified reducing the number of print devices as an opportunity for significant savings and have established guidance on reducing the number of these devices. DOD’s Chief Information Officer (CIO) issued a memorandum in 2012 on, among other things, reducing the number of print devices to one per office space of 12 or fewer users and assessing the ratio of printers to employees in larger spaces. In response to this memorandum and to Army Audit Agency findings of excessive user-to-printer ratios, the Secretary of the Army issued guidance in fiscal year 2013, requiring all Army commands, organizations, and activities to assess print capacity and plan for reductions, if necessary, based on the results of those assessments, which the Army last completed in fiscal year 2014. The Department of the Navy, in adopting DLA Document Services as the exclusive source for acquiring and sustaining print devices for the Navy and Marine Corps, also directed Department of the Navy officials to work with DLA Document Services to conduct assessments and develop a phased execution plan regarding the number and type of print devices Navy and Marine Corps organizations require. DLA began conducting these assessments for the Navy and Marine Corps in fiscal year 2014. In conducting these assessments, DLA Document Services reviews the inventory, cost, and use of output devices within an organization and then conducts an analysis that results in recommendations. According to DLA Document Services, its recommendations are designed to optimize an organization’s equipment to meet the organization’s needs, while reducing cost by shifting from single-function, or standalone devices, to shared, multifunction devices. Led by DLA Document Services, DOD has also made greater use of electronic content management, with the objective of reducing the volume and cost of printed materials. DLA Document Services is using a number of electronic content management systems, including its Document Automation and Content Services, and has deployed those systems for a number of DOD customers, such as DLA Distribution and U.S. Transportation Command. According to DLA Document Services officials, because Document Automation and Content Services functions as one large system with separate libraries for individual customers, and costs for the system are shared, increasing adoption of the system will reduce costs for each organization using the system. DOD’s document services initiatives have gained efficiencies, but we identified four areas where further gains may be possible, including (1) managing fragmentation in printing and reproduction services, (2) reducing overlap in procuring print devices, (3) meeting goals to reduce the number of print devices, and (4) consolidating locations that provide mission specialty printing. Our review found that DOD components, including the military services, use multiple approaches to obtain printing and reproduction services. These approaches include (1) using DLA Document Services to obtain printing and reproduction services, which, in turn, can outsource the work to GPO; (2) obtaining these services directly from GPO and its network of private sector vendors without first involving DLA Document Services; and (3) providing these services at in-house print locations, as shown in figure 4. For example, according to DLA Document Service officials, the Army Publishing Directorate, which is responsible for obtaining print services for the Department of the Army and local commands in the Washington, D.C. region, has been given authority by DLA Document Services to obtain printing and reproduction services directly from GPO under a contract that DLA Document Services established for that purpose. In contrast, the Army Marketing and Research Group (AMRG), which is responsible for developing and distributing printed materials for recruitment, obtains services directly from GPO without the involvement of DLA Document Services. Finally, some DOD components, such as the Navy, Marine Corps, and National Guard Bureau, also operate their own in-house print facilities. In our interviews with military service officials, they stated that they obtained services outside of DLA Document Services because of concerns regarding the cost, quality, and timeliness of its work, including inefficiencies that can result from using DLA Document Services to obtain printing services that are ultimately outsourced to GPO. For example, an analysis by the Army Publishing Directorate found that ordering directly through GPO results in savings of 35 percent, compared to fulfilling the same orders in house through DLA Document Services. In addition, headquarters officials with the Army and Navy stated that there have been significant delays in obtaining services through DLA Document Services, including cases where GPO ultimately fulfilled the orders. Navy officials also said that there were issues with the quality of DLA Document Services’ work, including orders they had to return repeatedly because of quality issues. Further, Army officials—as well as DLA Document Services—acknowledged that certain print jobs, including some bulk printing or magazine- and advertising-quality printing, are beyond DLA Document Services’ capabilities to provide in house. According to DLA Document Services officials, DLA Document Services offers value as a single manager for printing and reproduction services, including when GPO fulfills printing and reproduction orders. For example, DLA Document Services may be able to identify different options that allow customers to reduce costs, such as different contract options that GPO may not identify. Officials also said that DLA provides administrative support, such as centralized billing and record keeping, that the military services would have to replicate in their absence. These officials also stated that they were unaware of any persistent problems with the quality or timeliness of DLA Document Services’ work, and that they work with customers to resolve such issues when they arise. As noted above, DOD is in the process of revising DOD Instruction 5330.03, and a draft of the revision continues to assign DLA as the single manager for printing and reproduction services within DOD. However, despite the concerns expressed by some military service officials, DOD has not assessed the extent to which DLA Document Services is fulfilling its duties in accordance with DOD Instruction 5330.03 when considering any revisions to the instruction. Specifically, DOD has not assessed whether the products and services DLA Document Services provides are based on “best value,” as determined by quality, price, and delivery time, in accordance with the instruction. According to both DLA Document Services officials and the official at the office of the Under Secretary of Defense for Acquisition and Sustainment who is responsible for document services policy, the office of Acquisition and Sustainment has had minimal involvement in ensuring that DLA Document Services is fulfilling its duties in accordance with the instruction. For example, DOD’s last formal report on defense agencies and DOD field activities, including DLA Document Services, was completed in 2013, before DLA Document Services began implementing its transformation plan. Because it has not assessed DLA Document Services’ provision of document services since 2013, DOD has not ensured that DLA Document Services is providing the best value in an efficient and effective way. In light of changes such as DLA Document Services’ transformation plan, DOD has also not determined whether DLA’s single manager role as it is currently constituted is the most effective and efficient model for providing printing and reproduction services, or whether additional efficiencies may be possible. For instance, as a part of its transformation plan, DLA Document Services is increasing its use of GPO to fulfill customer orders, in lieu of using its in-house print facilities. As previously discussed, DLA Document Services can provide certain arrangements—such as establishing term contracts with GPO for certain customers while still providing administrative support for those customers—which may allow for greater efficiencies in printing and reproduction services. However, the draft revision to DOD Instruction 5330.03 does not address how DLA Document Services might use or expand these more flexible arrangements in light of its transformation plan. DOD Instruction 5025.01 requires that, when revising DOD issuances—such as DOD Instructions—the relevant Office of the Secretary of Defense component head will ensure that each assignment of authority or responsibility is verified to be a current requirement and is appropriately assigned. Without assessing whether DLA’s single manager role as it is currently constituted is the most effective and efficient model for providing printing and reproduction services in light of the current transformation plan, DOD may miss opportunities to gain additional efficiencies and better manage fragmentation when obtaining these services. Our review found that DOD has not implemented a department-wide approach for acquiring print devices, and DOD components use at least four different sources to acquire them, with costs that vary widely for similar devices. For example, as one of its services, DLA Document Services provides print devices, as well as associated maintenance and supplies, to DOD components. The Department of the Navy has adopted DLA Document Services as the exclusive source for acquiring and sustaining print devices for the Navy and Marine Corps. In addition, both the Army and Air Force have established their own contracts for print devices. Further, the Defense Information Systems Agency’s Joint Service Provider delivers print devices to organizations in the Pentagon and the national capital region, including the headquarters organizations of some of the military services, and officials noted that they use a government-wide contract managed by the National Aeronautics and Space Administration. Based on DLA Document Services’ assessments of customers’ print device requirements, its print device procurement service resulted in savings of between 33 and 45 percent compared to the customers’ prior costs for devices, primarily because of reductions in unnecessary devices and efficiencies that are gained through the economies of scale of a single organization procuring these devices. More specifically, DLA Document Services, as a part of its print device procurement service, assesses customers’ device requirements, which officials told us generally results in reducing the number of devices and the associated costs. In addition, DLA Document Services is pursuing, with the support of the General Services Administration, a “best-in-class” designation for its print device procurement service as a part of an effort to reduce costs by using multi-agency and government-wide acquisition vehicles. Army and Air Force officials told us that they had established their own print device procurement sources primarily because they believed that these sources are less expensive than using DLA Document Services. This is primarily because DLA Document Services charges administrative and overhead costs to support its operations, such as facility and maintenance costs, whereas the services’ own contracts do not require any additional fees, according to these officials. However, service officials were unable to provide any analyses or other documentation to support these determinations, and some service officials have been reassessing their approach to obtaining devices. For example, Air Force officials told us they recognize that print procurement services like those provided by DLA Document Services can result in savings, and these officials plan to issue guidance instructing commands to use either DLA Document Services or a similar service offered through the General Services Administration. Conversely, the Marine Corps official responsible for implementing the Department of the Navy’s policy on print devices told us that two installations had reported that the mandated use of DLA Document Services for print device procurement had not yielded savings. That official told us that the office plans to survey additional Marine Corps installations and may make recommendations on the current policy as a result. Our analysis found differences in cost among the contracts for similar devices and associated services (see fig. 5). However, we were unable to determine which sources provided the greatest value, because of differences in device specifications (such as handling different paper sizes or the capability to be used on classified networks), approaches to obtaining devices, and whether associated maintenance services and supplies were included. We analyzed DLA Document Services’ standard pricing for customers, contractor quotes for the Army’s mandatory source, and standard pricing for the Air Force’s mandatory source for devices with similar capabilities offered by two or more of the sources, and we found that prices varied widely. For example, we found that DLA Document Services offered customers high capacity color multifunction devices for between $280 and $315 a month, including maintenance and supplies. Vendor quotes we reviewed for similar devices through the Army’s mandatory source were for between $185 and $479 a month, not including maintenance and supplies, while the cost under the Air Force’s mandatory source was between $92 and $145, including maintenance but excluding supplies. Our prior work on strategic sourcing—an approach to procurement that moves away from numerous individual procurements to a broader aggregate approach—has found that this approach can result in considerable savings. OMB has also promoted category management— an approach that includes strategic sourcing as well as improving data analysis and more frequently using private sector (as well as government) best practices. OMB also encourages the use of multi-agency and government-wide approaches to acquiring goods and services. Our work has further found that collecting and using transactional data—information generated when the government purchases goods or services from a vendor, including specific details such as descriptions, part numbers, quantities, and prices paid for the items purchased—can help ensure that the benefits of strategic sourcing are maintained. The proposed revisions to DOD Instruction 5330.03 would designate the DLA Director as DOD’s single manager for procuring print devices. The current version of the Instruction designates DLA Document Services as the preferred provider for document conversion and automation services, which includes print device procurement services. Further consolidation of print device procurement, such as under DLA Document Services, might reduce costs. However, it is unclear what approach represents the best value to the government. This is because DOD has not conducted an analysis to establish which approach—or approaches—to obtaining print devices would be most cost effective, according to officials from DOD, DLA, and the military services. By assessing which approach to acquiring print devices represents the best value to the department, DOD would be better positioned, as it revises DOD Instruction 5330.03, to establish a policy that consolidates print device procurements and further reduces its costs. Beginning in fiscal year 2012, the DOD CIO and some of the military services established goals for reducing the number of print devices, which—according to internal DOD analyses—would save millions of dollars annually. DOD’s Chief Information Officer (CIO) issued a memorandum in 2012, which instructed DOD components, including the military services, to issue guidance to, among other things, reduce the number of print devices to one per office space of 12 or fewer users and assess the ratio of printers to employees in larger spaces. However, the services have not demonstrated that they have achieved their goals for print device reductions. Specifically, we found the following: Army: The Secretary of the Army issued guidance in 2013, requiring all Army commands, organizations, and activities to assess print device capacity and plan for reductions if necessary based on the results of those assessments. The guidance noted that those reductions could save millions of dollars annually. The guidance also included a requirement for biannual reporting by all Army commands, organizations, and activities on their print device inventory, number of printing devices required, and annual costs for printing device acquisitions. In June 2014, Army commands reported an average of 5 users for each single function printer, compared to an industry standard of 7 users per device and a DOD goal of one print device per office space of 12 or fewer users and assessing the ratio of printers to employees in larger spaces. According to Headquarters, Department of the Army officials, however, Army commands objected to the workload associated with this reporting requirement and discontinued issuing the reports. As a result, the Army did not follow through with enforcing the reporting, which limited the ability of Army officials to ensure that Army commands achieved the planned reductions. Navy and Marine Corps: The Department of the Navy established guidance in 2013, directing Department of the Navy officials to work with DLA Document Services to conduct assessments and develop a phased execution plan for the number and type of print devices Navy and Marine Corps organizations require. The guidance also directed Department of the Navy officials to develop policy requiring that the acquisition of new devices be exclusively through DLA Document Services. DLA subsequently conducted these assessments and found that the Navy and Marine Corps had an average of one device for every seven users. DLA Document Services recommended further reductions in the number of print devices across the Navy and Marine Corps, which it estimated could save over $63 million annually. However, Department of the Navy officials were unable to provide us with data on the total number of Navy and Marine Corps print devices that would indicate whether these device reductions and savings had occurred. Air Force: The Air Force did not issue any guidance based on the CIO memorandum. In response to our review, the Air Force developed draft guidance on print device management, which includes a goal of increasing the ratio of users to devices from 4 users per device to 12 users per device. The draft guidance also includes requirements for quarterly reporting by the Air Force Information Technology Business Analytics Office on the number of devices and related metrics to monitor progress. According to an Air Force analysis, doing so would achieve savings of over $67 million as it replaces or retires devices. As of July 2018, the Air Force had not fully implemented this guidance. Efforts by the military services to demonstrate that they have achieved print device reduction goals have been limited because they have not monitored the actions they have taken to reduce the number of print devices. Military service officials we interviewed said they were unaware of any efforts by the DOD CIO to ensure that device reductions occurred and that DOD components achieved their planned savings, such as providing information to the CIO on the status of their efforts to implement the guidance in the memorandum or data on reductions in the number of devices. Standards for internal control state that management should implement control activities through policies that use quality information to achieve an entity’s objectives, monitor the internal control system, and evaluate the results of the system. Efforts to implement the memorandum to achieve print device reduction goals have also been limited because responsibility for implementation was not clearly assigned. According to a DOD CIO official, the responsibility for the memorandum is not clearly assigned to a member of the CIO staff. This official also stated that because of the consolidation of information technology services in the Pentagon and the national capital region, the Defense Information Systems Agency’s Joint Service Provider assumed responsibility for implementing the memorandum. According to Joint Service Provider officials, however, they were only responsible for implementing the memorandum for the customers they serve in the Pentagon and the national capital region, and not for other DOD components outside those areas, such as military services. Standards for internal control state that management should ensure that key roles in operating the internal control system are clearly assigned. In the absence of these controls, such as reporting procedures to monitor actions to reduce the number of print devices and establishing clear responsibility for implementing the CIO memorandum, DOD has been unable to ensure that it is achieving any estimated savings, which could represent tens of millions of dollars annually. DLA Document Services may be able to realize additional savings from further consolidating facilities beyond those already identified, but it does not currently plan to do so, and it does not have the complete data it would need to make those determinations. As a part of its transformation plan, DLA Document Services identified 38 of its 112 facilities in the continental United States that it would retain. DLA Document Services officials stated that they considered a number of factors in determining whether to consolidate or retain facilities, including the number of staff and customers and the facilities’ workloads, but that they generally consolidated or retained facilities based on whether the facility provided “mission specialty” services. These mission specialties are services that DLA Document Services officials believe cannot be easily outsourced, such as printing and reproduction of classified and sensitive documents and on-demand printing and distribution of certain technical materials. However, our analysis of DLA Document Services data found that some facilities retained for certain mission specialties were responsible for a relatively small share of business for those specialties in fiscal year 2016 (the last full year for which data were provided), which suggests that further consolidations are possible. For example, for each of the four mission specialties for which DLA Document Services provided us with revenue data, the bottom quartile (25 percent) of the facilities retained for each specialty were responsible for less than 5 percent of the total revenue for that specialty, as shown in figure 6. We also found some cases in which DLA Document Services retained facilities that reported less revenue for a given specialty than facilities that it did not retain. According to officials, DLA Document Services took a number of factors into consideration in deciding on consolidations, including the complexity of the work at a facility and whether nearby sites could fulfill the orders. According to these officials, this allowed them to consolidate some facilities even if those facilities had greater revenue from a given mission specialty than other facilities. DOD Instruction 5330.03 requires DLA Document Services to provide effective and efficient document services support to DOD components. Our key practices for efficiency initiatives also note the importance of targeting both short-term and long-term efficiency initiatives. DLA Document Services officials stated that they would consider additional consolidations of facilities, but they have not conducted any analysis or planning to gain further efficiencies and do not currently have plans to do so. These officials stated they are committed to implementing the current transformation plan as announced. Officials also stated that they want to have a better sense of the results from the current transformation, including how workloads may change among facilities as consolidations occur, before considering additional consolidations. DLA Document Services’ current transformation plan includes the possible consolidation of facilities outside the continental United States following the implementation of its current plan (which only addressed facilities inside the continental United States); it does not have any plans for further consolidations within the continental United States. We also found that DLA Document Services did not have revenue data on all of its mission specialties to inform any future decisions on facility consolidations. Standards for internal control state that entities’ management should use quality information to achieve the entities’ objectives. However, DLA Document Services could not provide revenue data on three specific mission specialties—sensitive, classified, and Naval Nuclear Propulsion Information—for which it retained 30 of its facilities, including some that it retained exclusively for those specialties. According to DLA Document Services officials, they did not collect revenue data for these mission specialties because the facilities responsible for processing this type of information were generally retained, regardless of the revenue they produced, due to the sensitive nature of this work. As noted above, our analysis of available mission specialty data found that some facilities that DLA retained for certain mission specialties did a relatively small share of business for those specialties, indicating that there may be opportunities for additional facility consolidations. DLA Document Services officials told us that they had consulted with managers at the facilities about the amount of sensitive and classified they conducted. Because of these consultations, DLA Document Services is closing some facilities that handled sensitive and classified information. However, DLA Document Services does not routinely collect these data as it does for other mission specialties. By collecting and analyzing more complete revenue data on its mission specialties and using those data to evaluate opportunities for further consolidations, DLA Document Services would be better positioned to determine if opportunities exist to achieve additional cost savings. DOD reports some financial information regarding its document services, but this information does not accurately capture the scope of its document services mission. We reviewed the O&M obligations for printing and reproduction in fiscal years 2012 through 2016 that were reported to Congress by the military services. The total obligations ranged from about $534 million to about $736 million annually for the 5-year period (see fig. 7). Our analysis found that DOD’s O&M budget materials for printing and reproduction are inaccurate in two ways. First, the budget materials include obligations that are primarily for non-printing activities, such as the purchase of advertising and radio and television time. DOD and military service financial management officials prepare budget justification materials for their O&M funding requests on an annual basis. DOD and the services report printing and reproduction costs in the Summary of Price and Program Changes budget exhibit (the “OP-32”). It contains information by line item, detailing, among other items, printing and reproduction and related operations performed by the military services, DLA, or GPO. It also contains elements of expenses for purchases related to document services that are provided by DLA. The OP-32 exhibits are provided to Congress with the budget justification materials accompanying the President’s annual budget request. Officials from AMRG told us that, in accordance with Army guidance, printing and reproduction obligations are coupled with other obligations, including the purchase of advertising space and radio and television time for recruiting activities. Data provided by these officials show that in fiscal year 2016, AMRG’s obligations for printing and reproduction accounted for only about $2 million, or 2 percent, of the Army’s total fiscal year 2016 obligations included in the printing and reproduction line of the OP-32. Obligations for the publication of notices, advertising, and radio and television time accounted for about $78 million, or 63 percent, of the obligations reported for printing and reproduction. According to officials, the Navy, Air Force, and Marine Corps also follow their respective guidance on reporting printing and reproduction obligations together with these other obligations. Second, the budget justification information does not represent the full scope of the military services’ document services mission. Specifically, we found that the military services’ annual budget requests do not provide distinct information on two areas of their document services mission— print device procurement and electronic content management. Data we reviewed indicate that the military services obligate a considerable amount of resources in these areas. For example, according to DLA Document Services, sales to DOD and the military services for its print device services are comparable to sales for its printing and reproduction services. According to DLA data, in fiscal year 2017, it received in revenue about $108 million for print device and about $105 million for printing and reproduction services. Officials from the military services told us that obligations for these activities are included within the budget requests for various IT procurement categories. For example, Army Budget Office officials noted that the budget request for IT procurement and office supplies would include estimates associated with the purchase and sustainment of devices, but those line items would include other, non-printing obligations as well. According to these officials, the Army has made efforts to standardize the procurement of information technology, including collecting better data on spending for these types of devices. They told us that these efforts will result in shifts in how those obligations are reported in budget justification materials. The accuracy and completeness of DOD’s financial information about its document services can affect the allocation of budgetary resources, and inaccurate or incomplete information can hamper initiatives to gain further efficiencies. The Handbook of Federal Accounting Standards states that its managerial cost accounting concepts and standards are aimed at agencies providing reliable and timely information on the full costs of their federal programs that congressional and executive decision makers can use in making decisions about allocating federal resources and program managers can use in making decisions to improve operating economy and efficiency. DOD’s Financial Management Regulation lays out the structure of the budget exhibits that the military services develop during the department’s budget process. According to a DOD Comptroller official, DOD has historically reported its budget requests following the format prescribed by the Financial Management Regulation, and it follows this format in its reporting of printing and reproduction costs that are coupled with non-printing costs. Although the department has followed this format, the House Armed Services Committee has expressed concern about the military services’ printing budgets, noting that they were excessive and that portions of the budgets should be realigned to address unfunded readiness priorities. Further, as we discussed earlier in this report, DOD has outlined specific steps it intends to take to achieve a recommended goal of 34 percent reduction in spending on its printing and related activities. Without quality information on the scope of its document services mission, DOD will lack the information it needs to assess whether it is achieving this goal. To assess its progress toward achieving this goal, it will be critical for decision makers to have accurate financial information. According to a DOD Comptroller official, the Financial Management Regulation provides flexibility in how obligations are categorized and reported internally and to Congress, but DOD has not evaluated options to report more accurate funding information on its document services. Unless DOD evaluates options to report more accurate funding information and takes steps to improve the accuracy of its budgetary and financial information reporting, DOD and Congress will not have the full visibility over these costs that they need to make informed decisions. DOD is taking important steps to address congressional concerns about its spending on document service activities. Most notably, DOD is implementing its plan to transform its DLA Document Services mission and has taken certain steps to reduce the number and cost of print devices. These efforts have begun to produce results, but DOD can do more to build on these gains. By better managing fragmentation in printing and reproduction services, DOD could ensure that DLA Document Services is providing the best value in obtaining document services. DOD could further reduce overlap in print device procurement by assessing the various approaches employed by DLA and the military services to determine what constitutes the most cost-effective approach for the department. DOD has set goals intended to reduce the number of print devices and realize tens of millions of dollars in savings each year, but it has not demonstrated that it has achieved these savings, because of limitations in internal controls. Additional efforts aimed at collecting and analyzing information to examine areas for further consolidation of DLA Document Services’ mission specialty locations might provide DOD with additional cost savings. DOD’s O&M budget materials for printing and reproduction activities include information on non-printing activities that make up a much larger portion of its reported spending than printing does. In addition, these O&M budget materials omit information that would capture the full scope of DOD’s document services mission, such as device procurement and electronic content management, which are included with information technology budget materials. By providing more accurate costs for its document services activities, DOD would ensure that Congress and departmental leaders have the insight needed to make informed decisions. We are making a total of six recommendations to DOD. The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment assesses whether DLA Document Services’ single manager role for printing and reproduction provides the best value to the government—as determined by quality, price, and delivery time and in light of DLA Document Services’ transformation plan—and whether any additional efficiencies are possible, and use the results of that assessment to inform the revision of DOD Instruction 5330.03. (Recommendation 1) The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment assesses whether DOD’s current approach to obtaining print devices represents the best value to the government or whether other approaches, such as further consolidations under DLA Document Services as a proposed single manager for print device procurement, would be more cost effective. (Recommendation 2) The Secretary of Defense should ensure that the DOD CIO implements controls, such as reporting procedures, to routinely monitor actions to reduce the number of print devices, consistent with department-wide goals for reducing the number of print devices that are included in the CIO’s 2012 memorandum. (Recommendation 3) The Secretary of Defense should ensure that the DOD CIO assigns responsibility for implementing the CIO’s 2012 memorandum on optimizing the use of employee information technology devices. (Recommendation 4) The Secretary of Defense should ensure that the Director, DLA, in coordination with the Director, DLA Document Services and following implementation of the current transformation plan, gathers data on workload revenue at retained facilities and all mission specialties and evaluate whether additional opportunities for consolidation exist based on those data. (Recommendation 5) The Secretary of Defense should ensure that the Under Secretary of Defense (Comptroller), in consultation with the military services and DLA, evaluates options to report more accurate funding information and takes steps to improve the accuracy of its budgetary and financial information reporting on document services internally and to Congress, including making distinctions between printing and non-printing-related costs and information on device procurement and electronic content management. This information could be provided as part of DOD’s annual O&M budget justification materials. (Recommendation 6) We provided a draft of this report to DOD for review and comment. In its written comments, DOD concurred with five recommendations and identified specific actions and time frames for addressing them, and it partially concurred with the remaining recommendation. DOD’s written comments are reprinted in their entirety in appendix II. DOD also provided technical comments, which we incorporated into the report, where appropriate. DOD partially concurred with our recommendation that the Under Secretary of Defense (Comptroller), in consultation with the military services and DLA, evaluate options to report more accurate funding information and take steps to improve the accuracy of budgetary and financial information reporting on document services internally and to Congress, including making distinctions between printing and non- printing-related costs and information on device procurement and electronic content management. Our recommendation noted that this information could be provided as part of DOD’s annual O&M budget justification materials. DOD stated that the budget materials it submits to Congress are in compliance with OMB Circular A-11’s definitions of printing and reproduction and equipment. It further noted that Working Capital Fund exhibits provided with each annual budget include a breakout, by service, of the appropriated and Working Capital Fund activities and a detailed accounting of unit cost and pricing for all sub- activities of DLA Document Services. As we noted in our report, a DOD Comptroller official told us that the Financial Management Regulation provides DOD with flexibility in categorizing and reporting obligations internally and to Congress. However, we found that, based on this flexibility, DOD’s O&M budget materials reported obligations for printing and reproduction that were primarily for non-printing activities, such as the purchase of advertising and radio and television time. This budget information did not represent the full scope of DOD’s document services mission, since it omitted obligations for print device procurement and electronic content management. We also reported that DOD had not evaluated options to report more accurate funding information on its document services. DOD’s comments did not include plans to address this recommendation. We continue to believe that by providing more accurate costs for its document services activities, DOD would ensure that Congress and departmental leaders have the insight needed to make more informed decisions. We are sending copies of this report to the appropriate congressional committees, the Secretary of Defense, the DOD Chief Information Officer, the Under Secretary of Defense (Comptroller), the Under Secretary of Defense for Acquisition and Sustainment, the Director, Defense Logistics Agency, the Secretaries of the Army, Navy, and Air Force, and the Commandant of the Marine Corps. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-2775 or fielde1@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix III. Our objectives were to evaluate (1) the progress the Department of Defense (DOD) has made in achieving efficiencies in its document services and opportunities, if any, for further efficiencies, and (2) the extent to which DOD reports accurate financial information about its document services to key stakeholders. For our first objective, we reviewed DOD documents and interviewed DOD officials in order to understand how each military service obtains document services and identify department-wide and military service efficiency initiatives for these services. We also reviewed the Defense Logistics Agency’s (DLA) and the military services’ document services activities and compared them with a DOD statutory periodic review; DOD Instructions and other guidance; Office of Management and Budget (OMB) guidance; internal control standards; and best practices for consolidation initiatives, efficiency initiatives, and strategic sourcing to identify any potentially unnecessary duplication, overlap, or fragmentation and any opportunities for greater efficiencies. For specific efficiency initiatives identified by DOD officials or in DOD documents, we interviewed DOD officials regarding their progress in implementing and meeting the goals of these initiatives. To evaluate DLA Document Services’ transformation plan, we interviewed DLA Document Services officials, reviewed DLA Document Services documents regarding the plan, and assessed that plan based on leading practices for consolidation and efficiency initiatives. To assess the plan against these practices, one analyst reviewed the testimony and documents provided and compared it to our key questions to consider when evaluating proposals to consolidate physical infrastructure and management functions. A second analyst reviewed and concurred with the first analyst’s assessments. In any cases where there was a disagreement, the analysts discussed any discrepancies. If they were not resolved, a third analyst reviewed the assessments. To assess the extent to which there may be additional opportunities for facility consolidations, we obtained DLA Document Services data on revenue reported by each facility, which DOD Document Services officials told us they used in determining which facilities to consolidate as a part of their transformation plan. We analyzed the share of mission specialty revenue reported by facilities that (1) were retained by DLA Document Services for a given mission specialty, (2) were retained but not for a given specialty, and (3) were not retained. We further divided those facilities retained for a given specialty into quartiles to better understand the concentration of revenue in those facilities. To assess the reliability of these data, we interviewed DLA Documents Services officials regarding how the data were gathered, analyzed, reported, and used. We found that these data were reliable for the purpose of analyzing the shares of mission specialty revenue represented by each facility or group of facilities. To compare the cost of print devices offered by DLA Document Services, the Army, and the Air Force, we gathered and analyzed data on the monthly cost of multifunction devices with comparable specifications. We compared costs for similar devices based on device specifications including print speeds, monthly volumes, and paper capacities. Because Army and Air Force costs are estimated and there might be other differences in device specifications, approaches to obtaining devices, and which associated services were included, this analysis does not allow us to conclude which sources provide the greatest value. However, it illustrates differences in the cost of print devices across sources. For DLA Document Services, we used DLA Document Services’ standard monthly pricing for 2018 for various categories of multifunction devices. For the Army, Army officials were unable to provide data on the cost of multifunction devices purchased by Army customers. Instead, they provided us with documentation of vendor responses to requests for quotes from the Army’s mandatory source for print devices from April 2017 through January 2018. We reviewed those documents and assigned each device to a DLA Document Services category, based on the device’s specifications as identified in the documentation. We then estimated the monthly cost for each device. For leased devices, we used the monthly cost of the lease. For purchased devices, we used the total cost of the device divided by an estimated service life for the device. We estimated this service life using some indication available in the documentation, such as the length of time a maintenance agreement or extended warranty was provided for the device. Army officials provided 183 quotes for devices. Of those, we were able to include 24 in our analysis. We excluded the other 159 because either we could not determine the cost for individual devices in a quote, there was not enough information on a device’s specifications, there was no DLA Document Services equivalent for the device, or we were unable to estimate a service life based on the information provided. Because the information included all vendor quotes provided and not just those that were selected by a customer, the costs may not represent the actual costs of devices to the customer. For the Air Force, we used an estimated average monthly cost based the standard pricing included in the Air Force’s 2018 catalog for print devices. We reviewed the catalog and assigned each multifunction device offered to a DLA Document Services category, based on the devices’ specifications. The Air Force’s catalog contained 32 devices; we were able to determine the equivalent DLA Document Services category for 13 of those devices. All devices in the Air Force’s catalog are available for purchase and include a 4-year maintenance agreement; therefore, we estimated the average monthly cost as the purchase price divided by 48. To evaluate the extent to which DOD reports accurate and complete financial information to key stakeholders to manage its document services, we analyzed DOD’s operation and maintenance (O&M) budget justification materials for fiscal years 2012 through 2016 and Defense Logistics Agency data on its document services mission. We focused our review on O&M obligations reported by DLA and the military services, which accounted for an average of about 92 percent of DOD’s total document service costs reported by DLA Document Services in fiscal years 2012 through 2016. We interviewed officials, including officials from the Office of the Under Secretary of Defense (Comptroller), DLA Document Services, and the military services to determine how they reported costs for document services. We assessed the information we collected against federal accounting standards on how information should be recorded and communicated to management and others. To determine the reliability of the O&M budget justification data provided to us by DOD, we obtained information on how the data were collected, managed, and used through interviews with relevant officials. We determined that the data were sufficiently reliable to represent the military services’ total O&M obligations for document services for fiscal years 2012 through 2016. We interviewed officials and, where appropriate, obtained documentation, from the following organizations: Office of the Under Secretary of Defense for Acquisition, Technology Office of the Under Secretary of Defense (Comptroller) Department of Defense Chief Information Officer Defense Logistics Agency – Chief Information Officer Defense Logistics Agency – Document Services Defense Information Systems Agency – Joint Service Provider Army Chief Information Officer Army Publishing Directorate Army Marketing Research Group Army 7th Signal Command Headquarters Air Force – Chief Information Officer Department of the Navy – Chief Information Officer Headquarters Marine Corps Command, Control, Communications, Headquarters Marine Corps Publishing and Logistics Headquarters Marine Corps Budget and Execution Marine Corps Combat Camera Marine Corps Reprographic Equipment Management Program We conducted this performance audit from August 2017 to October 2018 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. In addition to the contact named above, Matthew Ullengren (Assistant Director), Adam Hatton (Analyst in Charge), Adam Brooks, Joanne Landesman, Amie Lesser, Daniel Ramsey, Carter Stevens, and Walter Vance made key contributions to this report.

 

 Report 2:
The federal government owns and leases hundreds of thousands of buildings across the country that cost billions of dollars annually to operate and maintain. In recent years, the federal government has taken steps to improve the management of federal real property and address long-standing issues by undertaking several government-wide initiatives and issuing memorandums to the CFO Act agencies. Within the executive branch, OMB and GSA provide leadership in managing federal real property. As the chief management office for the executive branch, OMB oversees how federal agencies devise, implement, manage, and evaluate programs and policies. OMB provides direction to federal agencies by, among other things, issuing policies and memorandums on real property management. In 2012, OMB issued a memorandum that required agencies to move aggressively to dispose of excess properties held by the federal government and more efficiently use real estate assets. This memorandum initially laid out the requirement to “freeze the footprint.” In 2013, OMB issued a memorandum clarifying the Freeze the Footprint policy. This memorandum required agencies going forward to maintain no more than their fiscal year 2012 total square footage of domestic office and warehouse space. The policy required agencies to specifically identify existing properties to be disposed of to offset any new property acquisitions. In March 2015, OMB transitioned from freezing the federal government’s real property footprint to reducing it. Specifically, OMB issued the National Strategy for the Efficient Use of Real Property (National Strategy) to provide a framework to guide agencies’ real property management, increase efficient real property use, control costs, and reduce federal real property. The National Strategy outlined three key steps to improve real property management: (1) freeze growth in the inventory; (2) measure performance and use data to identify opportunities to improve the efficiency of the real property portfolio; and (3) reduce the size of the inventory by consolidating, co-locating, and disposing of properties. OMB also issued the RTF policy which clarified existing policy to dispose of excess properties and promote more efficient use of real property assets. The RTF policy requires agencies to: (1) submit annual Real Property Efficiency Plans (Plan) to GSA and OMB; (2) issue a policy that specifies a design standard for maximum useable square feet by workstation for use in domestic office space; (3) set and specify in their Plans annual reduction targets for their domestic office and warehouse space for a 5-year period; (4) set and specify in their Plans annual reduction targets for domestic owned building properties reported in the Federal Real Property Profile; and (5) continue to not increase the square footage of their domestic inventory of office and warehouse space. Additionally, agencies must identify in their Plans potential projects related to office and warehouse consolidation, co-location, disposal, as well as construction and acquisition efforts. OMB is responsible for reporting the progress of agencies’ efforts in reducing the amount of federal real property space under the RTF policy. GSA has two key leadership responsibilities related to real property management. First, GSA’s Public Buildings Service functions as the federal government’s principal landlord. In this role, GSA acquires, manages, and disposes of federally owned real property for which it has custody and control on behalf of federal agencies that occupy the space. Additionally, GSA leases commercial buildings on behalf of agencies and manages the lease agreements. In these situations, GSA executes an occupancy agreement with a customer agency for each space assignment that is similar to a sublease between GSA and the agency. The occupancy agreement outlines both the financial specifics of the agreement and the responsibilities of GSA and the customer agency. There are certain unique advantages for customer agencies when GSA leases on their behalf. For example, GSA is able to enter into longer-term leases, and agencies can release space back to GSA with 4 months’ written notice if certain conditions are met, relieving the agencies of the cost for the returned space. Second, GSA’s Office of Government-wide Policy is responsible for, among other things, identifying, evaluating, and promoting best practices to improve the efficiency of management processes. In this policy role, GSA provides guidance for federal agencies and publishes performance measures. It also maintains the Federal Real Property Profile, a real property inventory database that contains information on federal real property government-wide. Based on our review of agencies’ 2016 and 2017 Plans, we found that all 24 CFO Act agencies described strategies for reducing office and warehouse space. As previously mentioned, these annual Plans must include all potential projects related to office and warehouse consolidation, co-location, disposal, as well as construction and acquisition efforts. The agencies’ Plans cited consolidation, co-location, and disposal as the primary means to reduce their office and warehouse space, activities mentioned in the National Strategy. Agencies also cited other methods, such as utilizing telework and decreasing the space they allocate per person to achieve space reductions. The space reduction strategies included most often in the Plans we reviewed include the following. Consolidation: All 24 agencies reported planned or ongoing efforts to reduce their space by consolidating their offices or operations. For example, we spoke with officials at HUD, which is in the process of consolidating staff from four offices in the National Capital Region into its 1.12-million square foot headquarters building in Washington, D.C. HUD started by remodeling one floor to create a more open floor plan and intends to apply this design throughout the building. As part of the consolidation project, HUD has reduced the size of some office cubicles from 64 square feet to 56 square feet. (See fig. 1.) HUD leases its space through GSA and estimates that it will be able to return about 175,000 square feet of unneeded space back to GSA once all four offices are closed. At that point, GSA would then bear the cost of the space and work to lease it to another agency or otherwise dispose of it. Once the project is completed, HUD estimated that its headquarters building will accommodate about 500 more personnel (for a total of 3,200) and reduce its annual lease payments by about $11 million. Fifteen of the 24 agencies identified consolidation opportunities outside of their headquarters buildings. For example, the Department of Agriculture (USDA) discussed a consolidation project involving five component agencies in Albuquerque, New Mexico, in its fiscal year 2017 Plan. According to USDA officials, four component agencies occupying nearly 44,500 square feet in one building were to be consolidated into about 34,000 square feet of space in another building already occupied by a different USDA agency. In the prior location, the multiple components spaces’ square footage per person averaged 327, but the proposed consolidation would bring the utilization rate down to 255 square feet per person. USDA estimated that the consolidation project would result in about $238,000 in annual rent cost savings for the four components. Additionally, to enable this consolidation project, the component agency already occupying the building consolidated and vacated about 20,000 square feet, a move that resulted in an annual rental savings of about $500,000. In its fiscal year 2017 Plan, Interior’s Bureau of Reclamation anticipated eliminating 87,000 square feet of office space by consolidating operations from two buildings in Denver, Colorado. Interior estimated that the consolidation will result in a 40 percent reduction in its overall utilization rate to 165 square feet per person and an annual cost savings of about $2.1 million. Co-location: Thirteen of the 24 agencies’ Plans stated that they are exploring or implementing co-location projects to reduce space by merging staff from different components or agencies into another agency’s space. For example, the Social Security Administration (SSA) recently initiated a co-location pilot program with the Internal Revenue Service (IRS) within Treasury to combine SSA field offices with IRS Taxpayer Assistance Centers. Co-location of operations can reduce the overall space required by allowing agencies to share common space such as waiting rooms, an action that can reduce rent and operating costs for the co-located agencies. Since the inception of the 1-year program in January 2017, four IRS offices are participating and have moved into SSA field offices. According to SSA, IRS and SSA staff have adjusted to sharing space and the IRS presence in SSA space has not affected SSA wait times or created security or parking issues. According to an IRS official, IRS employees continue all normal operations from their co-located offices with SSA, including meeting with taxpayers in-person. The official also noted that IRS has extended the terms of its agreement with SSA for an additional year. However, SSA noted that the agencies are still working through customer access issues that could determine whether it would be possible to expand the pilot program and pursue additional co-location opportunities. In another example, according to Interior officials, the U.S. Geological Survey is co-locating staff from Menlo Park, California, to a National Aeronautics and Space Administration facility in the nearby city of Mountain View, California. About 40 percent of the staff will move early in fiscal year 2019, and the U.S. Geological Survey expects the remaining staff to be co- located by the end of 2021. Interior officials estimate that the co- location will result in an overall reduction of 165,000 square feet (about 50 percent of its space) and expects to save about $12 to $14 million in annual rent costs. To help agencies identify potential co-location opportunities and work with other agencies to meet their space requirements, GSA developed and provided agencies access to its Asset Consolidation Tool in fiscal year 2015. This database tool provides agencies with information about federal spaces in their area, including the buildings’ vacancy and utilization rates. Disposal of unneeded space: Thirteen of the 24 agencies reported that they plan to reduce their real property footprint by disposing of unneeded space, including selling or demolishing federal buildings or terminating leases, among other actions. For example, IRS has five tax submission-processing centers that receive all mailed income-tax returns and have warehouses that store the physical tax records. Each of these five processing centers, which include both office and warehouse spaces in multiple buildings, is approximately 500,000 square feet. According to IRS officials, 87 percent of all 2016 individual income-tax returns were filed electronically. As a result, the IRS plans to dispose of three of the five centers by 2024 to align with its reduced need for income-tax return processing and storage space. GSA has the statutory authority to dispose of property for all federal agencies and generally does so on their behalf. In addition, some federal agencies, such as Energy, or departmental components have statutory authority to dispose of buildings and other types of property and are not required to notify or use the services of GSA to complete the disposal. Better utilization of existing space: In their Plans, agencies also reported using tactical tools, such as incorporating space utilization rates into their capital-planning process, to identify opportunities to reduce space. For example, 22 of the 24 agencies reported incorporating office space design standards and agency utilization rates into their processes to identify space reduction opportunities. Agencies set their own space design standards and space utilization rates, which may vary based on agency mission requirements across their components. The RTF policy requires agencies to establish a design standard for the maximum workstation size, which should, at a minimum, be applied to all space renovations and new acquisitions. In addition, GSA has a recommended office space-utilization rate range of 150 to 200 square feet per person. Officials from our case study agencies noted several practices they said were helpful to identify opportunities to better utilize and ultimately reduce their space. For example, Commerce officials described developing a process for identifying and prioritizing space reduction opportunities using a two-factor matrix. Through this process, Commerce plans to target office space with a large number of employees and poor utilization rates (compared to its 170 square foot utilization rate). According to Commerce officials, these situations may offer the most opportunity for space reductions and achieving significant rent and operating cost savings, particularly in high-cost real estate markets. Using this process, Commerce identified the potential for reducing as much as 1.6-million square feet (16 percent) of its total office space within 52 high priority facilities. According to IRS, retirements, hiring freezes, budget reductions, and increased telework have resulted in excess space throughout its portfolio. In fiscal year 2016, IRS started using a Strategic Facility Plan model to help identify space reduction projects. IRS’s objectives include consolidating multiple offices within a metropolitan area, closing outlying buildings, and leveraging telework, mobility, and its attrition rates. This model utilizes a template form to provide a consistent decision-making framework for assessing various options, articulating the rationale for selecting the preferred option, and documenting decisions and concurrence. According to IRS officials, this model has helped IRS to reduce a lot of its space. In 2014, GSA developed and provided agencies with access to the Real Property Management Tool, which can aid agencies that want to more effectively utilize their space. The database tool provides agencies with the capability to comprehensively view their real property portfolio by consolidating data from the assets that agencies directly manage with the assets that GSA manages on their behalf. As such, regardless of whether an agency initiated the action or GSA did so on its behalf, the tool gives an agency the ability to see all of its data, such as on expiring leases, in one place. The tool enables agencies to create individualized analytic reports allowing them to analyze the data in various ways. Teleworking and hoteling: Fifteen of the 24 agencies also described alternate workplace arrangements enabled by information technology, such as telework and hoteling, to help reduce office space. Telework is a work flexibility arrangement under which an employee performs their work responsibilities at an approved alternative worksite (e.g., home). Executive agencies are required to establish policies that authorize eligible employees to telework, determine the eligibility of all employees to participate in telework, and notify all employees of their eligibility. Federal law also requires that agencies consider whether space needs can be met using alternative workspace arrangements when deciding whether to acquire new space. As such, some agencies are eliminating designated offices for staff who primarily telework, a step that can improve space utilization. In a hoteling arrangement, employees use non-dedicated, non-permanent workspaces assigned for use by reservation and on an as needed basis. For example, the Office of Personnel Management implemented a workspace sharing initiative at one of its program offices. Staff who are not physically present in the office 4 or more days per week are required to share cubicles and offices. The Office of Personnel Management estimated that the initiative resulted in a 47 percent office space reduction for the program office. As part of their fiscal year 2016 and 2017 Plans, the 24 CFO Act agencies also described the major challenges they anticipated facing in their efforts to meet their space reduction targets. The agencies most frequently cited the following challenges: Space reduction costs: Twenty of 24 agencies stated that the costs of space reduction projects pose a challenge. Agencies are generally responsible for the up-front costs associated with relocations and tenant improvements, such as acquiring new furniture and renovating existing areas to reduce space or to accommodate more personnel in a smaller area. For example, the Department of Labor (Labor) reported in its fiscal year 2017 Plan that it did not have sufficient funding to implement a space reduction project that would have reduced commercially leased office space by 4,000 square feet. Similarly, the Department of Veterans Affairs’ fiscal year 2017 Plan noted that assuming a limited budget, large scale consolidations would be difficult to achieve. Some agencies have used or report that they intend to use funding from GSA’s Consolidation Activities program to help fund their space reduction projects. According to GSA, from fiscal years 2014 to 2017, GSA’s Consolidation Activities program funded projects that will eliminate 1.4-million rentable square feet from the GSA inventory and reduce agencies’ annual rent payments by $54 million. According to the IRS, GSA’s Consolidation funds have helped the agency reduce about 500,000 square feet of space. IRS officials noted that these funds helped the agency implement larger and more expensive space reduction projects than it would have been able to do otherwise. However, according to officials from several agencies, to use this program, agencies must also contribute funds to the projects. HUD officials stated that they considered applying for project funding through GSA but did not do so because HUD did not have sufficient funds for the agency’s share of project costs. Three of the 24 agencies specifically noted that the cost to clean up environmentally contaminated buildings is a challenge to disposing of excess office and warehouse space. Agencies are required to consider the environmental impact of property disposals. We have previously found that assessments and remediation of contaminated properties can be expensive and complicate the disposal process. Also, agencies are responsible for supervising decontamination of excess and surplus real property that has been contaminated with hazardous materials of any sort. In its fiscal year 2017 Plan, Energy estimated that over 60 percent of its excess buildings require extensive decontamination prior to disposal. Overall, Energy projected that its total liability for environmental clean-up could cost more than $280 billion. Mission delivery: Thirteen of the 24 agencies reported that mission delivery requirements can also affect their ability to reduce space. Agency missions may require office locations in certain areas or require additional space to accommodate activities such as customer interactions. These requirements may preclude disposals or limit opportunities to reduce space. For example, in its fiscal year 2017 Plan, SSA stated that its efforts to reduce space are affected by its mission, which requires offices widely dispersed throughout the country to administer and support its benefit programs, among other things. SSA has about 1,500 office spaces nationwide, most of which require space to accommodate the public. SSA had an overall office space utilization rate of 301 square feet per person, which exceeded GSA’s recommended office space utilization rate range of 150 to 200 square feet per person. USDA’s fiscal year 2017 Plan stated that its missions require office space in rural areas to, among other things, provide program assistance and leadership on food, agriculture, natural resources, rural development, nutrition, and related issues. In its fiscal year 2017 Plan, USDA also observed that the real estate market in rural areas is less competitive than in urban areas because there are fewer rental options, a situation that can also drive up rent costs. As such, USDA noted that these factors may contribute to difficulties identifying disposal opportunities and finding alternate spaces that could allow for more effective space utilization. Employee organization concerns: Ten of the 24 agencies reported that considering employee organizations’ concerns and addressing collective bargaining requirements when reconfiguring space can add time and affect the extent of their space reductions. For example, in its fiscal year 2017 Plan, SSA noted that the agency must meet with three employee unions when revising office space policies or design standards and collaborating with these organizations adds to the project’s implementation timeline. In July 2017, we reported that SSA officials met with employee union groups about the impact of potential changes to its space configuration or usage. Officials said that while the interactions with the union groups were positive—including gaining input on issues such as ergonomics, the security of field offices, and overall implementation—at times, these negotiations caused delays to individual projects and complicated reduction efforts by requiring union buy-in. In addition, Labor reported in its fiscal year 2017 Plan that its collective bargaining agreement and agency mission requirements for offices and work stations do not always enable it to take advantage of the previously discussed GSA Consolidation Funding program as well as GSA’s Total Workplace Furniture & Information Technology program. For example, the Total Workplace Furniture & Information Technology program requires that cubicles and offices must not exceed a specified square footage. However, according to Labor officials, Labor’s Departmental Space Management Regulation requires a certain utilization rate per person which may make it challenging to also stay within the program’s square footage requirements. Workload growth: Eight of the 24 agencies noted that increases in their workload limited their ability to achieve overall agency space reductions. For example, according to the Department of Justice’s fiscal year 2017 Plan, the agency anticipated having to provide additional court rooms to support an increased volume of immigration cases and accommodate the additional immigration judges needed to handle that volume. The Department of Justice estimated that the space needed to accommodate the new judges and additional public areas could add about 155,000 square feet to its portfolio. Also, according to the Department of Health and Human Services’ fiscal years 2016 and 2017 Plans, the Office of Medicare Hearings and Appeals experienced a 30 percent growth in cases and expected 1.2- million new cases annually after 2017. The Department of Health and Human Services projected that the growth in cases and additional staff needed to process the cases required additional field offices, which would increase its total office space square footage. As previously mentioned, agencies are required to set annual square foot reduction targets for domestic office and warehouse space in their annual Plans. According to an OMB official, to help ensure the targets are realistic, agencies are also required to identify the specific projects that will help them to achieve their space reduction targets. According to GSA and OMB officials, agencies submit their Plans, including their reduction targets, and their Plans are reviewed by both GSA and OMB. But each individual agency ultimately establishes its targets based on what it determines to be cost-effective and feasible. Through its Real Property Efficiency Plan template, GSA provides guidance to agencies on what is expected in their annual submissions. Each agency is required to document its internal controls, such as the process for identifying and prioritizing reductions to office and warehouse space and disposal of properties based on return on investment and mission requirements. The identified internal controls should help ensure that an agency’s proposed space reduction projects reflect an efficient use of space and are cost effective. A review of our five case study agencies illustrated some of the different approaches agencies used to determine their reduction targets. For example, several agencies’ targets were based on the total estimated feasible reductions identified by each agency component. In contrast, one agency centrally established a reduction target percentage and then asked its components to develop projects to meet that target. According to case-study agency officials, the agencies considered many factors, including their missions, priorities, component needs, and available budgets, when determining their targets. We found that the number and magnitude of the space reduction projects agencies identified in their fiscal year 2017 Plans varied greatly and were generally proportional to the size of the agency’s real property portfolio. The number of projects identified in agency Plans ranged from as few as 3 projects (the minimum required in the Plans) to nearly 400 projects. The estimated space reductions per project across agencies ranged from about 1,400 to over 94,000 square feet. For example, the Department of Veterans Affairs has a relatively large office and warehouse portfolio of over 28-million square feet. As part of its fiscal year 2017 Plan, the agency reported 320 planned or ongoing projects with an average space reduction of about 1,800 square feet per project. Conversely, the Office of Personnel Management has a relatively small office space portfolio of about 1-million square feet; its fiscal year 2017 Plan identified 4 ongoing or potential projects with an average space reduction of about 6,000 square feet. In fiscal year 2016—the first and only year RTF data were available at the time of our review—the majority (71 percent or 17 of the 24 agencies) reported they achieved reductions in their office and warehouse space even though the agencies had varying success in achieving the individual targets they set for themselves. For example, as shown in figure 2, of the 17 agencies that reduced space, 9 exceeded their targets (i.e., reduced more space than planned); 7 reduced space but missed their target (by anywhere between 2.8 and 96.7 percent); and 1 agency expected to increase in square footage, but reduced space. Whether an agency met its target is not the only indicator of an agency’s success in reducing space. For example, although some agencies missed their targets, they reduced their office and warehouse space by a larger percentage than some agencies that exceeded their targets. Also, the fact that some agencies missed their targets can in part be attributed to setting more aggressive targets than other agencies. Agencies’ fiscal year 2016 targets ranged from a 0.8 percent increase to an 8.4 percent decrease in office and warehouse space. Of the 9 agencies that exceeded their reduction targets, 4 more than tripled their target. As mentioned, agency targets are set by the agency and are a reflection of their unique situation including mission needs and priorities and therefore cannot be generalized across agencies. For example, Energy exceeded its fiscal year 2016 reduction target and reduced 292,140 square feet of space (0.8 percent of its total square footage). However, the Environmental Protection Agency missed its target, which was the second most aggressive target across all the agencies at 7.2 percent of its total square footage; but the agency reduced 174,003 square feet (3.24 percent of its total square footage). Of the three agencies with the most aggressive target reductions—those that ranged between 6.7 and 8.4 percent of their total square footage—only one met its target. Figure 3 shows the extent to which each of the CFO Act agencies met its fiscal year 2016 targets. See appendix II for more detailed information on each agencies’ square footage of space, reduction targets and fiscal year 2016 reductions. Officials from our case study agencies cited a number of factors that influenced whether or not they met their fiscal year 2016 targets, and may also affect their target achievement in subsequent years. Of our five case study agencies, three exceeded their fiscal year 2016 reduction target and two missed their target. Timing and funding: Officials from two case study agencies cited timing as a factor, noting that there is fluidity to the project’s planning, implementation, and disposal process that may not always be within an agency’s control. As a result, space reductions anticipated in one fiscal year may not be realized until a subsequent fiscal year; conversely, some space reduction opportunities may present themselves unexpectedly. For example, according to officials at HUD, which missed its fiscal year 2016 reduction target, some projects take longer than anticipated to start or complete. HUD officials said that their fiscal year 2016 target may have been too ambitious and planned projects were delayed because they were unable to secure sufficient funding. As such, the officials said the agency must carefully select which projects to move forward with in a given fiscal year, but expected to move forward with their delayed, planned projects in the next fiscal year. Energy on the other hand, exceeded its fiscal year 2016 reduction target. Energy officials said that they tend to be conservative in listing potential RTF projects in their Plans. They noted that it takes a long time to dispose of a building and the timing was dependent on the building’s level of contamination, location, size, agency budget, and other factors. As a result, even though the agency may have planned to dispose of a building in a given fiscal year, there were numerous reasons why the project may get delayed. Further, RTF is a long-term effort and should not be judged based on agencies’ progress in their first year. According to an OMB official, it is understood that there may be circumstances in a given year that may hinder agencies from reaching their RTF targets, such as budget constraints or the timing of leases; however, the expectation is that agencies will continue to work toward accomplishing their target in the next year. Accordingly, under RTF, agencies set annual space reduction targets for a 5-year period. Officials from our case study agencies emphasized that the 5-year targets are not static, but rather are subject to annual updates. The RTF policy also acknowledged that changes to mission requirements and the availability of budgetary resources may require modifications to an agency’s targets, particularly in each of the subsequent years. Lastly, given that the RTF policy is still relatively recent, an OMB official noted that agencies are still in the process of learning how to set appropriate targets. Previous space reductions: Officials from three of our case study agencies noted that prior space reductions made during the Freeze the Footprint policy limited their ability to reduce space more aggressively. Though the thrust of Freeze the Footprint was to maintain the fiscal year 2012 size of an agency’s portfolio, agencies started to look more strategically for opportunities to dispose of excess space in their portfolios. The majority of agencies (18 of 24) have been decreasing the square footage of their domestic office and warehouse space since the Freeze the Footprint policy was implemented in 2013. OMB reported that under Freeze the Footprint, agencies achieved a 24.7-million square foot reduction between fiscal years 2012 and 2015. Officials from the IRS, which accounts for 70 percent of Treasury’s real property inventory, noted it has released 2.7-million square feet (approximately 10 percent) in the past 5 years, bringing its total square footage down to 25.3 million. According to officials from three of our case study agencies, a certain amount of space is required to effectively fulfill their missions. As such, the closer agencies get to attaining their optimum footprint, their ability to achieve further space reductions may be limited. In November 2016, GSA put into effect a new standard operating procedure to, among other things, standardize and streamline the process of receiving, reviewing, and documenting agencies’ space release actions. As previously mentioned, GSA’s occupancy agreements for space it leases on behalf of its customer agencies generally allow the agencies to release space back to GSA with as little as 4 months’ notice, if certain conditions are met. This can enable agencies to reduce their space and related rent costs relatively quickly without penalty. As a result of this new process, GSA established a centralized e-mail for agencies to submit their space release requests. The e-mail is maintained at GSA headquarters before it is forwarded to the respective GSA region. GSA also developed a centralized space release tracking spreadsheet to help ensure that all GSA regions were (1) notifying the customer agency of GSA’s determination on whether the space release request was within GSA’s policy, and (2) processing the space release and ceasing rent billings in a timely manner. According to GSA headquarters officials, this new process was implemented to rectify past concerns that space release requests were not centrally tracked, GSA regions may not have been making consistent determinations, and some requests either were missed or were not processed within the appropriate time frames. GSA officials noted that GSA similarly manages all vacant space in federally owned property under its custody and control and in commercial space it leases, and the agency seeks to utilize the space as quickly as possible. GSA has 11 regional offices throughout the country that generally conduct the day-to-day real property management activities for its customer agencies. These responsibilities include acquiring, managing, and disposing of real property, as well as executing, renewing, and terminating leases on behalf of its customer agencies in exchange for a monthly fee for GSA’s services. GSA headquarters officials told us that GSA regional offices track all the occupancy agreements and proactively work with customer agencies to help manage their space needs well before the agreements expire to understand ongoing space requirements. For example, according to GSA headquarters officials, this process includes working with agencies at a strategic level and helping them think about how they can accomplish their space needs and meet their targets 4 to 5 years in advance. GSA headquarters and regional officials noted that the advance planning helps the GSA regional officials integrate agencies’ potential space needs into the work they are already doing in the region as GSA manages the regional inventory as a whole, including managing the amount of vacant space. GSA regional officials told us that they work closely with the agencies in their space consolidation and reduction efforts to minimize the likelihood that GSA would be caught off guard by a release of space. This work enables GSA to develop options for either filling vacant space based on the known needs in the region or developing an alternative plan to effectively utilize the unneeded space. One of GSA’s strategic objectives is to improve the federal utilization of space in order to lower the government’s operational costs. To assess progress, GSA has an agency-wide vacant space performance goal of 3.2 percent for its federally-owned and leased inventory (with a 5 percent goal for federally owned and 1.5 percent goal for leased space). Based on GSA data, the agency has steadily lowered its percentage of vacant space under its custody and control from 3.8 percent in fiscal year 2013 to 3 percent in fiscal year 2016, exceeding its performance goal of 3.2 percent for the first time in 4 years. The vacant space performance goal’s data help GSA evaluate its real property assets and plan for and make investment decisions while meeting its customer’s needs. According to GSA officials, the lower vacant space percentage is a reflection of the agency’s continued focus on working with its customer agencies to: (1) move into federally owned space, when possible; (2) decrease the size of commercially leased space to reduce agency rental costs and overall government reliance on leased space; and (3) dispose of unneeded federally owned assets. However, GSA officials noted that a certain level of vacant space is necessary to meet the space needs of new customers and customers with changing space requirements. According to GSA officials, GSA also tracks and reports annual cost avoidance data for all office and warehouse space reductions. These data include space covered under RTF in federally owned buildings under GSA’s custody and control and commercial space that GSA leases. Cost avoidance is defined as the results of an action taken in the immediate timeframe that will decrease future costs. The government-wide cost avoidance for fiscal year 2016 was $104 million based upon a net 10.7 million square foot reduction to all office and warehouse space. Of the government-wide figure, according to GSA, the total cost avoidance associated with office and warehouse space reductions in federally- owned space under GSA’s custody and control and commercial space GSA leased in fiscal year 2016 was over $75.8 million and 3.1 million square feet. In its cost avoidance calculation, GSA accounts for space returned to it by customer agencies only if there is a net square footage reduction in GSA’s total square footage across all the space that it manages. Similarly, the space returned to GSA does not reduce the federal government’s overall office and warehouse square footage unless GSA disposes of it. However, space that is returned to GSA is reflected as a square footage reduction for the customer agency and contributes toward that agency’s RTF target reduction. According to GSA regional officials, agencies’ requests to return space prior to the end of their occupancy agreements appear to have increased since the implementation of the RTF policy. Thus far, GSA has processes to manage agencies’ space release requests and keep its vacant space to a minimum. However, it is too early to determine how the recent increase in space release requests, in combination with agencies’ continued focus on occupying a smaller footprint and reducing their square footage, will affect: (1) the size of GSA’s inventory of vacant space in the long term, (2) GSA’s regional office workload to manage the requests, and (3) the cost savings for the federal government. We provided a draft of this report to GSA, OMB, Commerce, Energy, HUD, Interior, and Treasury for review and comment. We received technical comments from Energy, which we incorporated, where appropriate. GSA, OMB, Commerce, HUD, Interior, and Treasury did not have comments on our draft report. We are sending copies of this report to the appropriate congressional committees; the Administrator of GSA; the Director of the OMB; the Secretaries of the Departments of Commerce, Energy, HUD, the Interior, and the Treasury; and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions concerning this report, please contact me at (202) 512-2834 or rectanusl@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix III. Our objectives were to determine: (1) the approaches and any challenges the 24 Chief Financial Officers (CFO) Act agencies identified to achieving their Reduce the Footprint (RTF) reduction targets for all their domestic office and warehouse space; (2) the extent to which these agencies reduced space and met their fiscal year 2016 RTF targets; and (3) how the General Services Administration (GSA) manages vacated space that it had leased to these agencies. To obtain background information for all three objectives, we reviewed relevant literature, including laws governing federal real-property management and agencies’ efforts to reduce their real property portfolios and Office of Management and Budget’s (OMB) and GSA’s memorandums and guidance governing the RTF policy. We also reviewed prior GAO and GSA inspector general reports describing agencies’ real-property management and efforts to more efficiently manage their real property portfolios. To determine the approaches used and any challenges faced by the CFO Act agencies in achieving their RTF reduction targets for all their domestic office and warehouse space, we conducted a content analysis of the agencies’ 5-year Real Property Efficiency Plans (Plans) for fiscal years 2016 and 2017. These Plans were obtained directly from each of the agencies. Each Plan describes an agency’s overall strategic and tactical approach in managing its real property, provides a rationale for and justifies its optimum portfolio, and directs the identification and execution of real property disposals, efficiency improvements, general usage, and cost-savings measures. The content analysis of the Plans helped us to understand the approaches agencies used to reduce space, how space- reduction targets were set, and any challenges they experienced in reducing their space. To identify agencies’ approaches to achieving their RTF targets, we reviewed all agencies’ Plans to determine the most frequently mentioned approaches agencies reported using or planned to use to reduce their real-property footprints. As part of their plans, each agency is required to include a section detailing approaches it plans to use to reduce space. While these sections were the primary focus of the analysis, we analyzed the Plans as a whole for any additional mention of agencies’ approaches to reduce space. Based on the frequently identified approaches, codes were developed. An analyst reviewed all the agencies’ Plans and coded the approaches and another analyst reviewed the coding. If there was a disagreement, the two analysts reviewed and discussed until they reached an agreement. As a result of the analysis, five approaches were identified that agencies most frequently reported using or were planning to use to achieve their RTF targets. These five approaches are described in more detail in the report: (1) consolidation; (2) co-location; (3) disposition of unneeded space; (4) better utilization of existing space; and (5) teleworking and hoteling. For the purposes of our report, telework and hoteling were combined because these approaches are often used in combination. For example, agencies can use telework strategically to reduce space needs and increase efficiency by making hoteling (i.e., desk sharing) possible. To identify any challenges agencies faced in achieving their RTF targets, we similarly conducted a content analysis of agencies’ fiscal year 2016 and 2017 Plans. As part of their Plans, each agency included a section describing challenges it faced to reducing space. While these sections were the primary focus of the analysis, we analyzed the Plans as a whole for any additional mention of agencies’ challenges. Based on the frequently identified challenges, codes were developed. An analyst went through all the agencies’ Plans to code the challenges and another analyst reviewed the coding. If there was a disagreement, the two analysts reviewed and discussed until they reached an agreement. As a result of the analysis, we identified the four challenges that agencies most frequently described in their Plans: (1) space reduction costs; (2) mission delivery; (3) employee organization concerns; and (4) workload growth. In our report, we relied specifically on agencies’ fiscal year 2016 and 2017 Plans to provide examples and context for our description of the approaches agencies use and challenges they experience in achieving their RTF targets. However, after these Plans were submitted, agencies reported that the specific details as described in their Plans may in some instances, have changed due to a variety of factors. For our case study agencies, to the extent possible, we have provided updated information from agency officials as of December 2017. We selected five agencies as case studies to inform our first two objectives. We selected the agencies using a variety of considerations such as the diversity in the size of the agency’s domestic office and warehouse portfolio, the extent to which the agency met its fiscal year 2016 RTF targets, the types of real property authorities the agency has, as well as suggestions from GSA and OMB related to agencies’ experiences. Based on these factors, we selected the: (1) Department of Commerce (Commerce); (2) Department of Energy (Energy); (3) Department of Housing and Urban Development (HUD); (4) Department of the Interior (Interior); and (5) Department of the Treasury (Treasury). While our case-study agencies and their experiences reducing their space are not generalizable to all CFO Act agencies, they provide a range of examples of how agencies are implementing the RTF policy. We interviewed officials at the selected agencies as well as GSA and OMB, and reviewed relevant agency real-property management and RTF guidance, to obtain more detailed information about agencies’ RTF approaches, challenges, specific RTF projects, RTF project funding and prioritization, and experiences in meeting their RTF targets. In addition, we visited three office buildings of our case study agencies in Washington, D.C., with ongoing or recently completed RTF projects that illustrated approaches the agencies used to reduce space and met with officials to discuss the projects in more detail. The spaces we visited were the headquarters buildings for Commerce, HUD, and Interior. We selected the buildings based on recommendations from officials at our case study agencies. To determine to what extent agencies reduced their space and met their fiscal year 2016 RTF targets, we analyzed the 24 CFO Act agencies’ data as submitted to GSA on their RTF targets and reported reductions for fiscal year 2016. The office and warehouse square footage reductions are calculated annually using GSA occupancy agreement data and agencies’ self-reported data in GSA’s Federal Real Property Profile. For example, for fiscal year 2016, the space reduction calculations based on these data sources at the end of the fiscal year was compared to the square footage reported in fiscal year 2015. At the time of our review, this was the first and only year of RTF data available as the policy was implemented in March 2015. We conducted a data reliability assessment of the RTF data GSA provided by interviewing GSA officials and reviewing documentation, and concluded the data were reliable for our purposes. We also interviewed officials at GSA and OMB and reviewed relevant documentation to learn more about each agency’s role and the requirements of the RTF policy. We interviewed officials from our selected case-study agencies to obtain supporting documentation and to improve our understanding of how agencies set their RTF targets, agencies’ progress toward those targets, and the approaches used and challenges faced in meeting those targets. We also asked the agency officials for examples of successful practices used to reduce their office and warehouse space. To determine how GSA manages vacated federally owned and commercially leased space that it leases to agencies, we reviewed federal requirements and GSA policies and vacancy data. We conducted a data reliability assessment of GSA’s vacancy and cost avoidance data by interviewing GSA officials and reviewing documentation, and concluded the data were reliable for our purposes. We also interviewed GSA headquarters and regional officials and obtained documentation on how GSA manages space returned by agencies. We conducted this performance audit from April 2017 to March 2018 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. FY 2016- FY 2020 target reduction (118,127) Social Security Administration Missed target and increased in space Department of Health and Human Services (170,147) (520,987) (15,466) (47,946) (56,062) In addition to the individual named above, Maria Edelstein (Assistant Director); Lacey Coppage; Edgar Garcia; Delwen Jones; Catherine Kim (Analyst-in-Charge); Michael Mgebroff; Malika Rice; Kelly Rubin; and David Wise made key contributions to this report.

Question: Write a one-page summary of the report 1.

Answer: DOD has reported printing costs that totaled about $608 million, on average, during fiscal years 2010 through 2015. DLA Document Services has key DOD-wide responsibilities for (1) printing and reproduction, (2) print device procurement, and (3) electronic content management (e.g., digital document repositories). Other DOD components, including the military services, also maintain some document services capabilities at various locations. House Report 115-200 accompanying a bill for the National Defense Authorization Act for fiscal year 2018 included a provision for GAO to examine DOD's document services. This report evaluates (1) the progress DOD has made in achieving efficiencies in its document services and opportunities, if any, to achieve further efficiencies, and (2) the extent to which DOD reports accurate financial information about its document services to key stakeholders. GAO reviewed documents and interviewed officials regarding DOD's efficiency initiatives, including DLA Document Services' transformation plan; reviewed print device procurement contracts and pricing information; and analyzed DOD budget data for fiscal years 2012 through 2016. The Department of Defense (DOD) has taken steps to achieve efficiencies in its document services, including implementing a transformation plan to consolidate existing Defense Logistics Agency (DLA) Document Services facilities. However, GAO identified four areas where further gains may be possible: Managing fragmentation in printing and reproduction services. DOD has designated DLA Document Services as the single manager for printing and reproduction services, but DOD customers, citing concerns with DLA's services, have also obtained these services directly from the Government Publishing Office and via in-house print facilities (see fig.). DOD has not assessed DLA's performance in this role or whether additional efficiencies may be possible in light of DLA's transformation plan. Reducing overlap in procuring print devices. GAO found that DOD components used at least four different contract sources to acquire print devices. DOD has not assessed which acquisition approach represents the best value; doing so might better position DOD to further reduce its costs. Meeting goals to reduce the number of print devices. DOD and the military services have not demonstrated that they achieved established goals for reducing the number of print devices. Additional controls and assignment of oversight responsibilities to monitor progress could better enable DOD to achieve its cost savings goals, estimated to be millions of dollars annually. Consolidating DLA facilities. DLA is closing or consolidating 74 of its 112 facilities in the United States. However, GAO found that for four of seven types of specialty services, DLA plans to retain facilities that are responsible for less than 5 percent of the total revenue for each of those specialties, which suggests that further consolidations are possible. DOD includes the cost of non-printing activities, such as the purchase of advertising time for recruiting, within its budget materials for printing and reproduction. It does not include costs to acquire print devices and for electronic content management. As a result, DOD and the Congress lack the oversight into total document services costs needed to make informed decisions. GAO is making six recommendations, including that DOD evaluate options to achieve additional cost savings and other efficiencies in its document services and report more accurate budget data. DOD generally agreed with the recommendations.