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95–073 PDF 2016

SAVING TAXPAYER DOLLARS IN FEDERAL REAL 

ESTATE: REDUCING THE GOVERNMENT’S SPACE 

FOOTPRINT 

(114–22) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

JUNE 16, 2015 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

SAM GRAVES, Missouri 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

BOB GIBBS, Ohio 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

TOM RICE, South Carolina 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

ROB WOODALL, Georgia 

TODD ROKITA, Indiana 

JOHN KATKO, New York 

BRIAN BABIN, Texas 

CRESENT HARDY, Nevada 

RYAN A. COSTELLO, Pennsylvania 

GARRET GRAVES, Louisiana 

MIMI WALTERS, California 

BARBARA COMSTOCK, Virginia 

CARLOS CURBELO, Florida 

DAVID ROUZER, North Carolina 

LEE M. ZELDIN, New York 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

JARED HUFFMAN, California 

JULIA BROWNLEY, California 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

LOU BARLETTA, Pennsylvania, Chairman 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RYAN A. COSTELLO, Pennsylvania 

BARBARA COMSTOCK, Virginia 

CARLOS CURBELO, Florida 

DAVID ROUZER, North Carolina 

BILL SHUSTER, Pennsylvania (Ex Officio) 

ANDRE ́ CARSON, Indiana 

ELEANOR HOLMES NORTON, District of 

Columbia 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

DINA TITUS, Nevada 

PETER A. DEFAZIO, Oregon (Ex Officio) 

VACANCY 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

WITNESSES 

PANEL 1 

Hon. Jeff Denham, a Representative in Congress from the State of California, 

testimony .............................................................................................................. 4 

PANEL 2 

Hon. David Mader, Controller, Office of Management and Budget: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 28 

Norman Dong, Commissioner, Public Buildings Service, U.S. General Services 

Administration: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 32 

David J. Wise, Director, Physical Infrastructure Issues, U.S. Government 

Accountability Office: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 38 

PANEL 3 

Maria Foscarinis, Executive Director, National Law Center on Homelessness 

and Poverty: 

Testimony .......................................................................................................... 22 

Prepared statement .......................................................................................... 51 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Hon. Jason Chaffetz of Utah .................................................................................. 26 

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(1) 

SAVING TAXPAYER DOLLARS IN FEDERAL 

REAL ESTATE: REDUCING THE GOVERNMENT’S SPACE FOOTPRINT 

TUESDAY, JUNE 16, 2015 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, 

PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 1:05 p.m. in room 

2167, Rayburn House Office Building, Hon. Lou Barletta (Chairman of the subcommittee) presiding. 

Mr. BARLETTA. The committee will come to order. The purpose of 

today’s hearing is to explore how we can save billions of dollars by 

shrinking our Federal real estate footprint. I think we have a tremendous opportunity this year to come up with a bipartisan bill 

that gains the support of the House, the Senate, and the President. 

We have the same goal: to get excess and underutilized properties 

out of the hands of Government and onto the local tax rolls or local 

service providers. This can be a win-win solution for the taxpayer, 

local governments, and homeless assistance providers. 

First let me thank Chairman Chaffetz of the Committee on Oversight and Government Reform for working closely with this committee on this important issue. He planned to be here to testify, 

but, unfortunately, was called at the last minute to work on another crucial issue. Without objection, I would like to submit his 

written statement for the record. 

[No response.] 

Mr. BARLETTA. I also want to thank Chairman Denham for his 

work and leadership on this issue. And, finally, I want to thank all 

of our witnesses and particularly OMB [Office of Management and 

Budget] Controller Mader for being here today. 

We know reducing the Federal real estate footprint is a critical 

issue and can result in real and significant savings for the taxpayer. For example, since the beginning of last Congress, our committee has saved more than $2.5 billion by approving leases and 

other projects that reduce and consolidate space. That was no small 

feat, and it took this committee, working with GSA [General Services Administration] and OMB, to realize those savings. 

Our subcommittee has hosted a series of roundtables, working 

with GSA, to send the message of optimizing space and replacing 

expiring leases with good, long-term deals. In some ways, the 

leased side of Federal real estate is easier to address. When leases 

2 

expire, an opportunity is created to reduce space and negotiate 

good lease deals to lower costs. And, with 100 million square feet 

of leased space expiring in the next 5 years—50 percent of GSA’s 

leased inventory—the opportunity for taxpayer savings is huge. In 

light of that, I recently introduced the Public Buildings Reform and 

Savings Act, which will create a leasing pilot program GSA can use 

to cut the best deals for the taxpayer. 

Today, however, we are focusing on a much more difficult problem: getting rid of Federal real estate we no longer need. According 

to the most recent Federal Real Property Summary, the Government owns more than 254,000 buildings, comprising 2.5 billion 

square feet of space, costing the taxpayer $14.4 billion annually. 

However, we are also told in the same summary that only 5,000 

buildings are actually underutilized, despite the fact that 27,000 

assets are labeled as ‘‘inactive.’’ It is clear the data needs improving, but it is also clear, based on work by GAO [Government Accountability Office] and others, that there are a lot of vacant or underutilized buildings across the Nation that go unreported. 

We don’t have to look far to see prime examples of this right here 

in Washington. Just down the street sits the vacant Cotton Annex 

on land worth more than $100 million. On Pennsylvania Avenue it 

took more than a decade and an act of Congress to turn the moneylosing Old Post Office building into a profit center for the taxpayer. 

The West Heating Plant in Georgetown sat vacant for more than 

a decade, and it wasn’t until this committee shined a spotlight on 

it that GSA finally sold it for almost $20 million. 

When these properties sit vacant or underutilized, no one wins. 

The agencies and taxpayer pay to maintain them, no tax dollars 

are infused into the local economies, and they are not made available for sale or even screened for other purposes, such as to serve 

the homeless. Previous estimates indicate we are wasting more 

than $1.6 billion a year on these properties, but if GAO reports are 

any indication, this is probably a low estimate. 

Today we hope to hear from our witnesses what is the scope of 

the problem, what are the obstacles to reducing the real estate footprint, and how do we overcome those hurdles. A few challenges we 

have seen include upfront costs to make properties available, including money to move people out of underutilized buildings, landbanking—agencies holding on to valuable but vacant properties, because they think someday they will need them—and a disposal 

process that is cumbersome, time-consuming, and keeps properties 

from being sold. Chairman Chaffetz and Chairman Denham in the 

past have each offered proposals to address these issues, and I am 

pleased to see them working together on this issue. 

The administration proposed legislation in 2011 and reiterated 

the importance of that legislation in the fiscal year 2016 budget. 

In fact, in the fiscal year 2016 budget, the administration states 

that, despite the progress made through efforts like Freeze the 

Footprint, an independent board would allow us to achieve long-desired opportunities for reform and deficit reduction. 

I want to again thank all the witnesses here today. We have a 

great opportunity to finally get a bipartisan bill through Congress 

and address this longstanding problem. 

3 

I understand we have some Members who sit on our full committee who may want to participate in today’s hearing. I ask unanimous consent that Members not on the subcommittee be permitted 

to sit with the subcommittee at today’s hearing, offer testimony, 

and ask questions. 

[No response.] 

Mr. BARLETTA. Without objection, so ordered. Thank you. 

I now call on the ranking member of the subcommittee, Mr. Carson, for his opening statement. 

Mr. CARSON. Thank you, Chairman Barletta. Welcome to this 

afternoon’s hearing. Today we will examine the GSA’s implementation of the administration’s policy on restraining the growth of the 

Federal real estate footprint. We will also look at possible impediments to improving these efforts. 

In 2003, the GAO placed real property management on its list of 

high-risk governmental activities, where it remains today. Both 

this committee and GAO have repeatedly expressed serious concerns about how Federal real property has been managed. I am 

pleased, therefore, that the administration has made a concerted 

effort to right-size the Federal real estate portfolio. 

First, the Office of Management and Budget—OMB—issued a 

memorandum requiring all Federal agencies to freeze their Federal 

real estate footprints. 

Secondly, the administration proposed legislation to create a 

board that would operate similar to the Base Closure and Realignment Commission, or BRAC, to expedite the sale of underutilized 

and excess properties. 

Thirdly, the administration has released further guidance that 

Federal agencies should reduce their footprint. It has been very 

clear that the administration is serious about addressing these 

high-risk activities. 

However, the CBO [Congressional Budget Office] and various 

former GSA officials have raised concerns about the potential effectiveness or need for this proposed board. These former senior officials have testified before other committees, and have consistently 

questioned whether there is a real problem or not. They have questioned whether a significant number of underutilized Federal properties actually warrants the creation of a new Federal bureaucracy. 

GAO has also raised concerns about reliability of the data, and the 

Federal Real Property Profile [FRPP], which describes most of the 

real property owned by the Federal Government, and is considered 

by OMB to be a key management tool. 

Without a rigorous inventory and analysis, it is impossible to 

know whether the Federal Government is really sitting on billions 

of dollars of underutilized properties, and if there is a market for 

these properties at all. As the Federal Government’s landlord, GSA 

has a responsibility to guide agencies toward making good decisions that reflect both the will of the administration and Congress. 

The Federal Government must make better decisions on how to 

house these Federal agencies. With the advent of hoteling, alternate work schedules, and teleworking, it is very possible for Federal agencies to have a smaller footprint than ever, as the need for 

Federal workers to be in one fixed location decreases. 

4 

I remain open to a legislative fix if that is what is necessary to 

address the real documented concerns about the management of 

real property. However, I also want to ensure that any legislation 

offers the proper protections for the current stakeholders in the disposal process, while improving the process for disposition of real 

property. These important stakeholders include homeless service 

providers and municipalities eligible for public benefit conveyances. 

So, I am especially interested in whether or not the current 

guidelines are working, as Congress intended, to allow homeless 

service providers an appropriate opportunity to make use of surplus or underutilized Federal properties to address the devastating 

problems of homelessness, particularly among returning veterans. 

So I look forward to the testimony of today’s witnesses to help 

us evaluate the need for legislation to dispose of Federal property 

that might be surplus or underutilized. 

And I yield back, Mr. Chairman. 

Mr. BARLETTA. Thank you, Ranking Member Carson. On our first 

panel today we have the Honorable Jeff Denham, chairman of the 

Subcommittee on Railroads, Pipelines, and Hazardous Materials of 

the Committee on Transportation and Infrastructure. And I ask 

unanimous consent that our witness’ full statement be included in 

the record. 

[No response.] 

Mr. BARLETTA. Without objection, so ordered. 

Chairman Denham, you are now recognized for 5 minutes. 

TESTIMONY OF HON. JEFF DENHAM, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. DENHAM. Thank you, Mr. Barletta and Mr. Carson, for allowing me to testify today. And first let me commend Chairman 

Barletta on his efforts to not only authorize, but also pass a bipartisan bill, the Public Buildings Reform and Savings Act of 2015. 

Your leadership on this issue has helped us not only in decreasing our national debt, but also in getting rid of some of the Government inefficiency. 

I would also like to thank Chairman Shuster and Chairman 

Chaffetz for working with me on this issue to ensure it receives the 

proper oversight and attention. Reducing our Nation’s national 

debt is a bipartisan issue, and I have been proud to work over the 

last several years to not only get a bipartisan resolution, but get 

one that goes across multiple committees to get—to garner enough 

support to actually move this along. 

Legislation will reform the Federal property disposal process, 

and would create a nonpartisan, professional board to root out 

waste and inefficiencies in the way that we manage our public 

buildings. The principles of this bill are the driving forces behind 

the effort to redevelop the Federal Triangle, and serve as a model 

for how we manage property, nationwide. 

I first proposed reforming the Federal property disposal process 

at this subcommittee’s first hearing in February 2011, and the 

President proposed similar ideas in his 2012 budget. I am pleased 

to see the President has continued his support of these reforms, 

speaking to it not only in his 2011 State of the Union speech, but 

5 

also including it once again in his 2016 budget that he submitted 

to Capitol Hill. 

Likewise, I am pleased to have secured the commitment of this 

administration to advance legislation, to work with myself and 

Chairman Chaffetz, to see real reforms actually signed into law. 

In recent years the GAO identified billions of dollars of waste 

through mismanagement over buildings, and an overreliance on 

costly leased space to meet long-term housing needs. Additionally, 

both Houses of Congress have included the idea in their annual 

budget documents. I believe the potential to save billions of dollars 

is real. 

To be successful, the board will need to implement five principles: first, to consolidate the footprint of Federal real estate; second, house more Federal employees in less overall space; third, reduce our reliance on costly leased space; fourth, sell or redevelop 

high-value assets that are underutilized, or too valuable for housing Federal employees; and, fifth, and most importantly, to dispose 

of surplus property quickly. 

I believe a board of citizens that uses these five principles to guide its decisions can see over $15 billion in initial savings. To be 

clear, we are not looking to create a fire sale of vacant properties, 

or overload the marketplace. Simply dumping vacant properties on 

the market is not a long-term solution. 

Additionally, some Members have talked about this as being a 

BRAC-like process. We have listened to these concerns over the 

years, and continue to work on this legislation. To begin with, 

BRAC relocated thousands of people, families, and entire communities. BRAC removed an economic engine from cities across the 

country. This legislation will not relocate one family. It will not destroy one single community. Instead, we will bring new economic 

life and development into Federal space that has long been neglected. 

Finally, the decision on these properties today belongs to OMB. 

And, through this legislation, will remain with OMB. What we 

would like to do is reshape the way this country manages the Federal real estate footprint. At the end of the day, the total cost to 

house the Federal Government is directly proportional to how 

much real estate we hold. To save money, we will have to consolidate that footprint. To consolidate, we must house more Federal 

employees in less space. Fortunately, there are tremendous opportunities of savings in this area. 

Perhaps one of the greatest areas for taxpayer savings will be in 

the redevelopment or sale of the high-valued but underutilized 

properties. For instance, the ones the chairman had talked about, 

the abandoned and underutilized properties here, in DC, the 

Georgetown West Heating Plant and the Old Post Office, they were 

both vacant and decayed, costing taxpayers millions of dollars a 

year, as they sat idle and unused. 

The first hearing that we held was in the Old Post Office. I remember being a new freshman, wearing a California suit in the 

middle of the winter, and it was 32—it was below zero, freezing 

temperatures in that cold building, sitting vacant. I know there are 

some people in here that remember very fondly the cold atmosphere of that vacant building that is now being redeveloped. 

6 

Through the attention that was paid by this committee, GSA was 

able to sell one and lease the other to private entities that will 

bring new business and economic activity right here, to the DC 

area. There are high-value properties like this all across the entire 

country. We can use this as an example. Maximizing value is what 

we seek to achieve. 

I believe this guiding principle, along with the five objectives I 

have outlined earlier, should help us to redevelop and push this 

legislation along. 

I thank the committee, again, and I look forward to working with 

you on this issue, as we move forward. 

Mr. BARLETTA. Thank you for your testimony. Your leadership 

and commitment to this issue is critical. 

I will now call our second panel of witnesses. Thank you. 

[Pause.] 

Mr. BARLETTA. We have with us today the Honorable David 

Mader, Controller, Office of Management and Budget; Mr. Norman 

Dong, Commissioner, Public Buildings Service, U.S. General Services Administration; and Mr. David J. Wise, Director, Physical Infrastructure Issues, U.S. Government Accountability Office. 

I ask unanimous consent that the witnesses’ full statements be 

included in the record. 

[No response.] 

Mr. BARLETTA. Without objection, so ordered. Since your written 

testimony has been made a part of the record, the subcommittee 

would request that you limit your oral testimony to 5 minutes. 

Mr. Mader, you may proceed. 

TESTIMONY OF HON. DAVID MADER, CONTROLLER, OFFICE OF 

MANAGEMENT AND BUDGET; NORMAN DONG, COMMISSIONER, PUBLIC BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION; AND DAVID J. WISE, DIRECTOR, 

PHYSICAL INFRASTRUCTURE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. MADER. Thank you, Chairman Barletta, Ranking Member 

Carson, and members of the committee and subcommittee, for inviting me to testify and update the subcommittee on the changes 

that we are implementing to improve the Government’s real property management, and overall efficiency of the real property portfolio. 

I would like to update you on the status of the initiatives that 

I mentioned when I testified last July in front of the House Subcommittee on Government Operations regarding the administration’s effort to improve the management of the Government’s real 

property portfolio. Over the past 11 months we have continued to 

implement actions that will improve and transform the way the 

Federal Government manages its real property. 

Our plan includes four key components: first, develop and implement a strategic framework that will guide agencies’ management 

of their real property portfolios over the next 5 years; second, develop and implement Governmentwide performance metrics that 

will identify efficiency opportunities at the agency level, and to assess the performance of individual agencies; third, develop a new 

management tool within the current Federal Real Property Profile 

7 

to enhance the utility and quality of that data; fourth, modifications to existing statutes to increase the pace and number of property disposals which will decrease the amount of resources expended on maintaining excess and underutilized properties. 

The President’s 2016 budget invests in our federally owned facilities to ensure that mission execution is optimized at the lowest possible cost, including $2.4 billion over the fiscal year 2015 enacted 

level to support critical construction and renovation projects, as 

well as opportunities for consolidation in the Federal building inventory. 

We have completed or made significant progress on three of the 

four components. We issued the National Real Property Strategy in 

March of 2015, which builds on past actions and results to define 

the strategic framework that agencies will use to manage their 

portfolio. The framework will freeze the growth of the inventory, 

measure performance, and identify opportunities to improve efficiency in data quality, and, finally, to reduce the size of the inventory by prioritizing actions to consolidate, colocate, and dispose of 

properties. 

To implement the national strategy, we have issued a new policy 

that provides a set of agency-specific performance metrics. The Reduce the Footprint policy, issued also in March, requires agencies 

to implement a 5-year plan to reduce their real property portfolios. 

The Reduce the Footprint policy prioritizes the disposal of 

unneeded and inefficient properties by requiring agencies to set annual square-foot disposal targets for all types of buildings. It also 

requires agencies to issue office space design standards by March 

of next year, 2016, and to use the standard as a design criteria, 

going forward. 

The last component of our plan, potential modification to existing 

statutes, could increase the pace and the number of properties disposed of through sale, demolition, and public benefit conveyance. 

These modifications could include, but are not limited to, agency 

retention of some of the sale proceeds for reinvestment in additional disposals, expanded authority for GSA to support agencies’ 

work to prepare properties for a declaration of excess, and relief 

from some of the aspects of the public benefit conveyance process. 

All of the components of our plan, except, of course, for the potential modifications to the existing statutes, will be implemented 

by the end of this fiscal year, 2015. We believe these actions will 

significantly improve the management of real property and deliver 

efficiency gains over the next 5 years. The real property program 

has achieved results in 2014, and we will continue to build on this 

achievement. 

We reduced the Freeze the Footprint baseline by 11.2 million 

square feet in 2014, and this result builds on the 10.2-millionsquare-foot reduction we achieved in 2013, so in 2 years combined 

we reduced 21 million square feet of office and warehouse space. 

It is important to note that, in order for the Government to reduce our footprint, we require funding to make the necessary reconfigurations and relocations that will result in out-year cost 

avoidance. We have made progress. However, significant opportunities remain. 

8 

One significant challenge has been the historically low levels of 

funding appropriated to the GSA Federal Buildings Fund. The GSA 

is leading the Federal effort to both invest in Federal facilities and 

consolidate space to reduce costs and optimize efficiency, avoiding 

tens of millions of dollars in annual lease costs. Recent funding levels for the GSA and other Federal landholding agencies have led 

both to facility deterioration, as well as missed opportunities to 

consolidate and reduce operating costs. As I stated in my hearing 

last summer, I think we need to think about the concept of investing to save. 

We look forward to working with the subcommittee on legislation 

that will enable us to make even greater progress by improving the 

efficiency of the Governmentwide portfolio and accelerating the 

pace of property disposals over the next few years. 

Thank you for the opportunity of testifying today, and I look forward to answering your questions. 

Mr. BARLETTA. OK, we have—they have just called votes. We 

have a two-vote series. So we are going to recess until we can return from these votes in about 20, 25 minutes. 

The subcommittee is in recess. 

[Recess.] 

Mr. BARLETTA. The meeting will come to order. We will pick up 

where we left off. 

Mr. Dong, you may proceed. 

Mr. DONG. Good afternoon, Chairman Barletta, Ranking Member 

Carson, and members of this committee. Thank you for inviting me 

to the hearing this afternoon. Our mission at GSA is to deliver the 

best value in real estate, acquisition, and technology to the Federal 

Government. And, within the Public Building Service, our goal is 

to support agency real property requirements, but in the most fiscally responsible way. 

We recognize that excess spending on real estate comes at the 

expense of more mission-critical activities. And, as agencies spend 

less on rent, they can devote more of their limited dollars to support mission requirements. 

To do this, we are consolidating space and improving space utilization. We are taking a more disciplined approach to leasing. We 

are disposing of unneeded assets. We are leveraging our exchange 

and outleasing authorities, and we are supporting OMB in the Governmentwide effort not just to freeze, but to reduce the Federal 

footprint. 

On the issue of space utilization, we are working with Federal 

agencies to identify opportunities to colocate, consolidate, and reduce the footprint. Since fiscal year 2014, Congress has provided 

$70 million each year to support agency consolidation projects. 

Many of these projects reflect agencies moving out of expensive 

leased facilities into federally owned space. 

In Minneapolis, for example, we are partnering with HUD [U.S. 

Department of Housing and Urban Development] to move them out 

of leased space into the Federal building in that city. Through this 

process, HUD will reduce its footprint by over 9,000 square feet, 

which will save the Government more than $700,000 each year. 

And today we are executing dozens of projects that will reduce 

the Federal footprint by almost 800,000 square feet, and reduce anVerDate Aug 31 2005 15:31 Sep 08, 2016 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\ED\2015\6-16-1~1\95073.TXT JEAN
9 

nual leasing costs by about $50 million. And, given significant 

agency interest in this program, our budget request for fiscal year 

2016 will help us further reduce our square footage, and increase 

our annual cost savings. 

As we emphasize the importance of federally owned space, we 

will continue to see a significant amount of leasing activity. So, our 

job at GSA is not just to make sure that we are reducing the footprint, but also the cost of that footprint. And, by embracing greater 

competition in our leasing transactions, we can capitalize on favorable rates that we are still seeing in many markets. 

In order to get better leasing rates for the Government, GSA is 

working with our Federal tenants to simplify their space requirements and broaden delineated areas to increase competition; to extend lease terms to 10 years or longer whenever possible, because 

longer terms usually mean lower rates; and to start the planning 

process at least 36 months prior to lease expiration, to allow for 

competitive procurements, and to avoid costly holdovers and extensions. 

We see that whenever we are in holdover or extension, we are 

paying about 20 percent more than we should, on average. In recent years, we have made some good progress to reduce the number of holdovers and extensions. And, by the end of fiscal year 

2014, we had only 97 holdovers out of more than 8,700 leases, 

which was the lowest figure since 2007. 

On the issue of underutilized property, we are improving our efforts to identify assets we no longer need, and to move these properties off our books. In fiscal year 2014, GSA disposed of 342 properties, Governmentwide, which represented a 61-percent increase 

from the year before. And this year we are on track to meet our 

goal of disposing of 3 million square feet of excess property, which 

includes the Metro West Building in Baltimore. 

We are seeing some progress here, but we recognize that there 

is much more that we can and should be doing. GSA is also 

leveraging our exchange and outleasing authorities to tap into the 

value of those assets that no longer serve a Federal purpose, but 

still represent significant value to the private sector. 

In Southwest DC, we are leveraging the value of our regional office building and the Cotton Annex in the Federal Triangle complex. Through this exchange project, GSA is seeking construction 

and development services to modernize the rest of our headquarters building, and to further the DHS consolidation at the St. 

Elizabeths campus. 

Another example is our long-term lease of the Old Post Office 

building to the Trump Organization, which is transforming it into 

a luxury hotel. This private investment of $200 million will preserve this historic building, serve the local community, and generate lease revenues for the Government. 

I would like to close by discussing how GSA is supporting the administration’s National Strategy for Real Property. This summer, 

GSA will be working with OMB to review agency plans to reduce 

the footprint. And, through this process, we will build upon our 

work in fiscal year 2015, and will develop a robust pipeline of potential projects for disposal, exchange, and outlease, beginning next 

year. 

10 

We have made significant progress in managing Federal real 

property, but we recognize there is much more work that must be 

done. I look forward to working with this committee to improve 

Federal Government management of real property. 

Thank you for the opportunity to testify today, and I look forward to your questions. 

Mr. BARLETTA. Thank you for your testimony, Mr. Dong. 

Mr. Wise, you may proceed. 

Mr. WISE. Chairman Barletta, Ranking Member Carson, and 

members of the committee, thank you for the opportunity to discuss our work on how the Federal Government’s real property management practices could be improved. 

The Government’s real property holdings are vast. The portfolio 

comprises hundreds of thousands of buildings, and a comparable 

number of permanent structures. My statement today focuses on, 

one, improvements and challenges in Federal real property management; and, two, executive and legislative steps that could help 

the Government address these challenges. 

Since GAO placed Federal real property management on the 

high-risk list in 2003, the Government has given the issue highlevel attention, including: establishing the Federal Real Property 

Council and the Federal Real Property Profile, which is the Government’s real property database; implementing the 2012 Freeze 

the Footprint policy, aimed at keeping Federal office and warehouse inventory at a baseline level established using FRPP data; 

and issuing this past March the 2015–2020 National Strategy for 

the Efficient Use of Real Property. The strategy includes freeze 

growth in the inventory, measuring performance, and reducing 

growth through consolidation, colocation, and disposal. 

Notwithstanding these positive steps, the Government continues 

to face challenges in managing its real property portfolio, including 

maintaining more real property than it needs, relying on leasing 

when ownership would be more cost-effective, and making real 

property management decisions using unreliable data. 

Retaining unneeded real property results in significant costs to 

the Federal Government. In July 2014, the administration released 

the first-year results of the Freeze the Footprint policy, indicating 

that it reduced the Federal Government’s office and warehouse 

space by about 10 million square feet between fiscal years 2012 

and 2013, which exceeded its goals. 

However, we found that the data behind these results were unreliable, resulting in a potential overstatement of the progress made. 

For example, some properties credited as having been disposed of 

by agencies were actually returned to GSA, and remain part of the 

Federal inventory. 

The Government continues to rely heavily on leasing where ownership would be more cost-effective in the long run. In our February 2015 high-risk update, we reported that the Government has 

demonstrated leadership commitment by trying to consolidate highvalue leases and smaller leases, as they expire. However, we noted 

that GSA lacked an action plan and transparent data to demonstrate progress in achieving this goal. 

Consistent and accurate data are critical to effectively manage 

real property. Despite leadership commitment to improve FRPP, 

11 

the Government continues to face challenges with its accuracy and 

consistency. In 2012, we reported that FRPP data did not consistently describe excess and underutilized Federal real property. 

While the Government has taken some steps to improve FRPP, additional improvements are needed, including better accuracy of utilization, space reductions reported by agencies, maintenance needs, 

and tracking of structures. 

Three key steps could assist the way forward: implementing the 

national strategy, which I mentioned earlier; implementing key 

GAO recommendations; and considering legislation to assist the 

disposal process and mitigate competing stakeholder interests. 

In recent years we have made a number of recommendations to 

GSA that, if implemented, should improve real property management and reduce costs. Some priority recommendations include, in 

June 2012 we recommended steps GSA could take to make the 

FRPP database a better decisionmaking tool. GSA agreed, and is 

implementing measures aimed at improving its reliability and usefulness. This effort is ongoing. 

In July 2012, we recommended that GSA develop a 5-year capital 

plan to help ensure that long-term goals are fully considered when 

making decisions to fund capital projects. GSA agreed, but conveyed that the challenging budget environment in recent years has 

limited the agency’s ability to develop such a plan. 

In November 2014 we recommended that GSA develop a clear 

strategy to effectively manage the Government’s vast warehouse 

portfolio. GSA agreed, and is developing appropriate guidance. We 

will continue to monitor the implementation of these and our other 

real property recommendations. 

Since 2011 there have been several real property reform bills introduced in the Congress. None have been enacted. One of the bills, 

a Civilian Property Realignment Act, CPRA, provided a framework 

for disposing of and consolidating civilian real property. The Excess 

Federal Building and Property Disposal Act would have created a 

pilot project for expedited disposal of a limited number of highvalue properties through public auction. 

More recently, the Public Buildings Reform and Savings Act 

would codify the Freeze the Footprint policy goals for high-value 

projects, and place limitations on the agency’s ability to enter into 

private-sector leases, among other things. 

Chairman Barletta, Ranking Member Carson, and members of 

the committee, this completes my statement. I would be happy to 

answer any questions you have at this time. Thank you. 

Mr. BARLETTA. Thank you for your testimony, Mr. Wise. I will 

now begin the first round of questions, limited to 5 minutes for 

each Member. If there are any additional questions following the 

first round, we will proceed with the second round. 

Mr. Dong, I want to thank you again for working with us on the 

leasing side. Before we get into the owned side, I did want to alert 

you that I am still hearing that the standard GSA lease is just 5 

years, which, as you know, is more costly than long-term lease 

deals. What are you doing to get the GSA regions to lock in the 

long-term deals? 

And also, with 50 percent of your leases expiring in the next 5 

years, GSA should be using all the tools in your toolbox. However, 

12 

I am still not seeing many leases being tasked to the brokers. And 

what are you doing to address this? 

Mr. DONG. Chairman Barletta, I think you are raising a really 

interesting point here. And since I have been commissioner over 

the past 15 months, I have underscored the importance of broader 

delineated areas, and longer lease terms, and greater competition, 

all in the name of being able to get better rates. 

But I think what we want to be able to do is not just say what 

is important, but to actually follow through with the regions, to 

make sure that they are doing what is important. And we are taking much more of a hands-on role to have those follow-on discussions with the regions, to review the transactions, one by one, to 

ask the questions, in terms of, ‘‘All right, tell me what you are 

doing about delineated area. Tell me what you are doing about 

lease term.’’ 

We actually, over the past few months, have been doing reviews 

of past transactions, region by region. What we will do, going forward, is to review the future pipeline of expiring leases, and really 

make sure that agencies are adhering to the guidance that we have 

articulated at headquarters, to make sure that we are landing in 

the right place for those larger transactions. 

Mr. BARLETTA. As far as working with the brokers? 

Mr. DONG. We have talked in earlier settings about how we have 

a significant amount of work in front of us, in terms of the expiring 

lease pipeline. And, again, we don’t want to be in a situation where 

we continue to put more time on the clock through extensions, because that costs us, as we have talked about before, a 20-percent 

premium. 

So, as we look at the workload, region by region, one of the questions that we are bringing to that discussion is, ‘‘Tell me how you 

are going to use the broker contracts as a resource here,’’ because 

we have no excuse not to use the brokers. We need to be leveraging 

every single resource at our disposal to manage the workload, and 

to get the best rates. 

Mr. BARLETTA. Mr. Mader, last week OMB Director Donovan 

committed to members of this committee to working with us and 

Chairman Chaffetz to advance legislation and reform the way the 

Federal Government manages property. Specifically, we seek to 

consolidate the Federal footprint, sell or redevelop high-value, underutilized space, and dispose of property more quickly. 

Now, the President has also included property disposal legislation as a priority issue in his annual budget. We appreciate the 

President’s focus on this issue, and agree the time has come to address the backlog of unneeded property. Can you confirm that the 

administration will work with us to move legislation through Congress that incorporates those ideals? 

Mr. MADER. Mr. Chairman, absolutely. Not only does the administration support better leveraging the real property portfolio, but, 

you know, I think we have demonstrated through, you know, proposing in multiple budgets now for several years, the CPRA legislation that David Wise talked about. So I think we are all shooting 

for the same objective, and I think it is just a matter of how do 

we sort of dock all these ships together. 

13 

This morning, Norm and I had an opportunity to testify over in 

the Senate with Chairman Johnson and Senator Carper. Same 

topic. They have an interest, they want to do something. 

So, I think, you know, it is just a matter of getting all the stars 

aligned, because I think everybody is shooting for the same objective here. 

Mr. BARLETTA. Mr. Wise, does the Federal Government own civilian property that it does not need, or underutilizes? And is significant taxpayer money spent on these properties every year? Is this 

a significant problem? Is legislation required to address it? 

Mr. WISE. Yes, yes, yes, and yes, in brief. To expand on that, yes, 

it is—clearly, we have shown—and I think the testimony from the 

administration has also shown—that there is a lot of unneeded and 

underutilized property out there. Exactly how much, we don’t really know. Is it costing taxpayers money to maintain and secure it 

and guard it, and so forth? Yes. 

Legislation? There are certain things we have talked about in the 

past in some of our reports. There’s a lot of things the administration can do, but there are some things that the Federal agencies 

are really unable to do. We see this as basically kind of a cooperative effort. There is both a Federal side, as well as an agency side 

and a legislative side. 

And where I think the legislative side can come into play is 

through some elements that we are—that we already knew about 

from CPRA, where it can deal with some of the problems that inhibit the disposal process, primarily trying to either neutralize a 

little bit, or at least mitigate some of the competing stakeholder interests. And that is where a CPRA-like, or at least a legislative 

remedy, could be very useful, in partnering with the Federal agencies, to help move the disposal process. 

Mr. BARLETTA. Thank you. The Chair now recognizes Ranking 

Member Carson for 5 minutes. 

Mr. CARSON. Thank you, Chairman. 

Commissioner Dong and Mr. Mader, can you provide specific examples of when the Federal Government was unable to dispose of 

a valuable piece of property because of conflicting stakeholder interests that you believe to be emblematic of this problem, nationwide? 

Mr. MADER. Congressman, let me start, and then I think Norm 

probably has a couple examples. 

I recently had an opportunity to visit with the Department of 

Veterans Affairs. OMB does an annual review of agency operations. 

Last week we sat with Deputy Secretary Gibson and his top leadership. And one of the topics of each and every one of these reviews— 

and we are about halfway through the cabinet-level departments 

now—focuses on real property, on the amount of space they hold, 

number of buildings. 

In the case of the VA, obviously, they are a very large landholding and building-occupying agency, and rightfully so, because 

of the critical mission that they provide. But what was interesting 

in that conversation was the level of frustration that they talked 

about, where they have facilities that they are looking to replace, 

and yet, you know, they receive opposition from the community to 

actually replace it. And there were a couple that they mentioned 

14 

in particular, where they said, you know, ‘‘We have the funding to 

build a new facility, but the community doesn’t’’—you know, ‘‘They 

really like this old facility.’’ Or, ‘‘We can consolidate a facility, and 

turn that building over to GSA for redevelopment, and the community says, ‘You know, we would really just like to keep the VA hospital.’ ’’ 

So I think one of the challenges—and Norm has lots of other examples—is how do you sort of leverage the interests of all the parties in a way that we can actually achieve. What we share with you 

is reducing the footprint. 

Mr. DONG. Congressman Carson, my colleague from OMB was 

talking about some of the challenges in managing the various 

stakeholder interests. I wanted to answer the question focused on 

what we see as some other obstacles, as well. And I think a key 

obstacle for us in this process is that whole notion of retention of 

proceeds. And what we see, as agencies look to identify properties 

to move off their books, is that they incur costs. There is a cost of 

doing that. There is an upfront cost of doing that. And if they have 

no ability to retain any proceeds to at least recover their cost, it 

makes it very difficult. 

We actually see some examples in the Federal Government 

where you do have agencies that have some limited retention of 

proceeds authority. The Coast Guard is one example, the Forest 

Service is another example. And, with those two agencies, you are 

seeing far more volume, far more disposition activity among those 

agencies because they are able to recoup their costs. 

Mr. MADER. I think, if I might add one more item, in the current fiscal year, the Congress authorized GSA to spend $70 million out 

of the Federal Buildings Fund to do building consolidations. And I 

think this goes to the chairman’s comment about, you know, in 

GAO’s critique about moving out of expensive leased facilities. So GSA had last year, and then again this year, $70 million. And 

they have done—and Norm can talk about the progress they have 

made over the last 2 years. But in the President’s budget for 2016 

that is pending, we have asked for $200 million. There is a lot 

more we can do, if we could invest in it. And what we are hearing 

is, in fact, not only are we not going to get the $200 million, we 

are not even going to get the $70 million. So you got to wonder, 

you know, can we actually expect GSA to make any progress when 

we are not providing the resources to them? 

Mr. CARSON. Thank you, gentlemen. 

Mr. Wise, given the problems you have identified with the Federal Real Property Profile, and that a significant portion of its data 

is, effectively, unreliable, do you think it is possible to put together 

a commission that would have the ability to scour the Federal real 

estate inventory in a systematic way? 

Mr. WISE. Congressman Carson, the issue with the Federal Real 

Property Profile is, as you say, the data—we have done a lot of engagements, and almost in every one we have found issues with various aspects of the Federal Real Property Profile. 

But beyond just the pure data being an issue, there is also—as 

we turned over the rocks of the Federal Real Property Profile, we 

found that there were some real issues with how the data is collected, and the congruency of the various agencies’ definitions of 

15 

what constitutes utilization or nonutilization or building condition. 

And so we have a very wide-ranging kind of set of circumstances 

involved with many different agencies, and even sometimes bureaus within those agencies, putting data into this system, but not 

all clearly defined in the same way. 

So, naturally, when things go in with some lack of consistency, 

they are certainly going to come out inconsistently, as well. And so 

we find all sorts of anomalies with the data. 

But I think we see a very strong management commitment, both 

from GSA’s Governmentwide policy office, as well as from OMB 

under the leadership of Dave and his staff, of trying to come up 

with ways to harmonize the collection data practices and definitions, so that the data itself can be collected in a more parallel 

basis, which, hopefully, will then improve the overall database. 

So, it is really quite a deep problem, beyond just the numbers 

themselves. It is the foundation of it that really needs to be worked 

on. We do know that process is ongoing at GSA, and we are hopeful 

that when we evaluate it on the next update of the high-risk update for 2017, we will see some significant improvements as we go 

to test the data and its reliability. 

Mr. CARSON. Thank you, gentlemen. I yield back, Mr. Chairman. 

Mr. BARLETTA. Thank you. We will now start our second round 

of questioning. This is to all witnesses. 

As I said in my opening statement, I think there are four basic 

reasons that we can’t get rid of real estate that we don’t need. One, 

agencies are land-banking valuable properties. Two, it costs agencies more to sell a property than it will generate in sale proceeds. 

Three, you have to relocate people from underutilized properties 

first. And, four, the disposal process takes too long, and results in 

few sales. 

To address these problems, it would seem that we need, one, an 

independent body to recommend properties for sale; two, the proceeds from the high-value properties to pay for the upfront costs of 

selling the less-valuable properties; three, GSA’s real estate authorities to relocate people off underutilized but valuable property; 

and four, to streamline the disposal process. 

Do you agree these are the fundamental problems and solutions 

that Congress has to address? 

Mr. MADER. Mr. Chairman, I think what you just articulated is 

very consistent with the themes that exist within our proposed 

CPRA legislation. So, you know, I think we are—again, I know I 

sound like a broken record—I mean I think we are all in alignment 

on what the endgame is, and how to get there. I think it is a matter of just tweaking the pieces and moving forward. 

Mr. BARLETTA. OK. Mr. Dong? 

Mr. DONG. I would concur with what Mr. Mader said. 

Mr. BARLETTA. Mr. Wise? 

Mr. WISE. I will continue the broken record. I pretty much agree 

with what Dave and Norm said. In fact, what you were describing 

sounded a lot like CPRA legislation. Those are all elements that 

are important to helping the process move forward, hopefully, to 

improve the Federal property profile. 

16 

Mr. BARLETTA. OK. Sorry for not recognizing Ms. Norton in the 

first round of questions. Ms. Norton, you are recognized for 5 minutes. 

Ms. NORTON. Thank you, Mr. Chairman. I tiptoed in, so I can understand that. 

I very much appreciate this hearing, Mr. Chairman, however, 

and I would like to pose a question, first off, to Mr. Wise. 

Mr. Wise, this question, really, is about how. You know, it is easy 

enough to point out all the things that we wish GSA would do. It 

becomes more hard to do it. And sometimes GSA has authority and 

won’t do it. Perhaps sometimes the Congress needs to make clear 

or to offer authority. 

I noted on page 4 of your own testimony—here I am quoting from 

it—you said, ‘‘The Federal Government continues to rely heavily on 

leasing of properties where it would be more cost-effective in the 

long run for the Federal Government to own.’’ That is a kind of 

mantra, virtually, of this committee. But, you know, it is easy 

enough to say that; it has been difficult to do it. 

If you were—we were to point to agencies where this becomes 

hard to avoid, we might point to the consolidation of the Department of Homeland Security, where the Government continues to 

spend billions of dollars. And when it is all done, it will be perhaps 

untold billions, because of the delay that Congress has made moving here. 

But I noted that DHS is still in 55 locations in this very highlease national capital region. When consolidation fully occurs, they 

will be down to something like six to nine leases. You know, one 

can calculate the kind of savings in lease costs that amounts to. 

One would imagine that sooner, rather than later, is when we 

would want to proceed. If this doesn’t add to the deficit, I don’t 

know what does, at least in terms of money that we could extract. 

So, I would like, perhaps beginning with Mr. Wise, does GSA 

have the authority to fully use incoming rent funds to construct 

new facilities that could help with consolidation? 

Mr. WISE. Congresswoman Norton, the issue with the Federal 

Buildings Fund, of course, is that there is an accumulation of 

money going into it, but GSA is not able to expend that money on 

capital projects without the authorization of Congress. 

Ms. NORTON. All right, let me stop you there. If Congress were 

to authorize spending of money we already have in the building 

fund, then GSA could move more rapidly to free us from these costly leases. 

Mr. WISE. If Congress authorized GSA to spend the money as 

Congress directed, then GSA could proceed forward with spending 

that money on whatever capital project was authorized. 

Ms. NORTON. Do both of you agree, Mr. Dong, Mr.—— 

Mr. MADER. Absolutely. 

Mr. DONG. Yes. It comes back to having full access to the rents 

that we collect. The Federal Buildings Fund was set up so that the 

rent that we collect from our tenant agencies gets reinvested back 

into the Federal portfolio. We are not seeing full access. Those dollars are being diverted for other purposes. 

Ms. NORTON. What kind of purposes? 

Mr. MADER. The other purposes outside of Federal—— 

17 

Ms. NORTON. Well, I can understand for rehabilitation, for maintaining properties. But I wonder if one could even cite a purpose 

that could save the Government more money than authorization by 

this committee to use at least some of those funds to hasten—otherwise, we are depending upon appropriations, and that is very difficult to do, appropriations from Congress of the United States, and 

we have this money lying right here that could be used. 

And, Mr. Chairman, I am going to ask that we at least take a 

close look at that, so that we don’t continue simply to criticize GSA 

for doing something it can’t help but doing for lack of authorization 

from our own committee. 

Mr. Blue, I want to thank—or was it Mr. Dong who was with me 

at the roundtable I had on holdover leases? 

Mr. DONG. I believe it was our regional commissioner, Darren 

Blue, who was with you at that event. 

Ms. NORTON. It was Darren Blue, yes. When he—I was pleased 

to hear that the holdover leases—holdover leases are costly, perhaps the most costly of leases—had decreased. But it looks like the 

way we have done it is to increase the number of short-term leases, 

at least in this region. And, of course, I point to this region, where 

perhaps the lion’s share of your leases are. 

What would it take to get off of these short-term leases? Is it because of the footprint requirements? Why are you doing short-term 

leases, which, in and of themselves, guarantee to cost the Federal 

Government more in funds? 

Mr. DONG. I think you are raising a really good point. And I 

think what we see is, whenever there is holdover or extension, or 

even succeeding leases, whenever we take a stay-in-place strategy, 

and we send a strong message to the market that we want to stay 

in place, then we shouldn’t be surprised when we are getting less 

than competitive rates. 

So we are trying to make sure that we apply much more discipline and rigor to the planning process, so that we get agency requirements early on in the process. We need to start the planning 

process at least 36 months before lease expiration, and we need to 

be much more disciplined, in terms of running that competitive 

process, so the market knows that we are serious about getting the 

best rates for the taxpayer. 

Ms. NORTON. So what is the average for a short-term lease? 

Mr. DONG. Well, we see lease extensions that are, like, 2 years 

or 3 years. And sometimes they make sense. So when we do a lease 

extension because we are moving that tenant to a federally owned 

building, then that is a clear strategy that makes sense, because 

we have got a longer term solution to have them in an owned facility. 

Ms. NORTON. Oh, would that were possible more often. Go ahead. 

Mr. DONG. When we see lease extensions where we have not 

done the planning, and we are simply putting more time on the 

clock, and we don’t have a clear plan for what happens next, that 

is the wrong approach. 

Ms. NORTON. Mr. Chairman, I know I am over time. 

I wish you would submit to the chairman how you are implementing this longer term out, so that, in fact, you engage in fewer 

short-term leases, so the committee will understand when this is 

18 

happening, how often it is happening, and how many short-term 

leases have been affected. 

Thank you, Mr. Chairman. 

Mr. BARLETTA. Thank you. We will now resume our second round 

of questioning. I just have one more question. 

Mr. Mader, the administration advocates for an independent 

board to achieve ‘‘long-desired opportunities for reform and deficit 

reduction within the inventory with far greater scope, speed, and 

efficiency.’’ Can you talk about why an independent board is important? 

Mr. MADER. I think, Mr. Chairman, an independent board would 

allow us to bring in outside expertise, folks that have, you know, 

worked in the private sector, who have dealt with large, real property portfolios. And I think the combination of the outside expertise, along with GSA and other—let’s say other landholding agencies, would allow us to sort of step back and think differently about 

how we look at properties, how we think about bundling portfolios 

of properties. 

This past year, working with GSA, you know, it is interesting. 

GSA only has control over 19 percent of the inventory, which, I 

think, is a surprise when people hear that low number. They just 

think GSA runs everything. The fact of the matter is, they don’t. 

You know, you have NASA [National Aeronautics and Space Administration], you have DOD [Department of Defense], you have 

the Department of Agriculture. 

So, what we did, between us and GSA, is actually got these landholding agencies together and said, ‘‘Look, we all have disposals. 

But what we are doing is we are doing them in our stovepipes, And 

we are doing them as one-offs. What if we looked at a geographic 

area and said, you know, ‘Who has got excess property in these five 

counties?’ ’’ Is it more attractive to sell a portfolio than a single 

property? Maybe. So I think a board brings that creativity and different way of thinking. 

And I also think it takes away some of the parochialism that just 

is inherent in the Government. You know, like, ‘‘Well, we have 

never done it that way before.’’ So I think it is a combination of 

that outside experience and the inside expertise. 

Mr. BARLETTA. Thank you. I have no further questions, and recognize Ranking Member Carson for 5 minutes. 

Mr. CARSON. Thank you, Chairman. Commissioner Dong and Mr. 

Mader, how often do Federal agencies, unprompted by GSA or even 

OMB, offer up excess real estate for disposal? And is the solution 

as simple as allowing agencies to retain the proceeds of the sale of 

that property? And does GSA have the discretion to really allow 

agencies to retain the proceeds of a sale using their current authority? 

Mr. MADER. So I am going to start, and then I think Norm will 

pick up. 

I have seen, over the last couple of years now, a—more of an interest in agencies to basically unload their excess property. Because, with flat or declining budgets, what they are seeing is, you 

know, dollars going to underutilized excess properties, maintaining 

and safeguarding vacant properties. And that is a dollar that is not 

going to their mission, and to, you know, citizen services. So I see 

19 

more incentive on the part of agencies now to say, ‘‘I need to find 

a way to either consolidate my facilities, or release excess facilities,’’ and more and more of those agencies coming to GSA, saying, 

‘‘Help me.’’ 

And, you know, GSA has done, I think, a great job over the last 

2 years. But again, it is within the limit of how many dollars they 

have to do it. So, either the agency brings them the dollars, you 

know, through an appropriation, or, as Norm mentioned, a couple 

of agencies that actually have the authority to retain some of those 

savings, to use them, then, to queue up the next property for disposal. 

Mr. DONG. I think Dave is right, in terms of we are seeing more 

activity across the agencies. And the Reduce the Footprint directive 

from OMB, I think, is helpful to really focus our collective attention 

on the problem. 

That having been said, I think we all recognize that there is far 

more potential that we should be tapping into. And I bring it back 

to that whole notion of retention of proceeds. And where agencies 

have some ability to retain proceeds, to recoup the costs of getting 

these properties off their books, you are seeing far more activity. 

Mr. CARSON. Thank you, sir. 

Mr. Wise, you stated in the past that consolidating leases onto 

owned spaces might be the quickest way for us to save money in 

real property. What can the Government do to reduce its reliance 

on leasing? 

Mr. WISE. Yes. I think that, again, this tracks back to the data 

issue that we talked about a little bit earlier. Because one of the 

issues we have seen in a number of our reports is that consolidation of leases is made more difficult by the fact that individual 

agencies don’t always know what each other has out there. 

I think back to an example of one of my teams out in the field 

had been in a medium-sized city in Texas, where there were two 

small Federal offices. They both could have fit together in one or 

the other, because one had a very small footprint. But they didn’t 

know that the guy down the street had some vacant space. 

So, that leads back to the idea that, if there was greater transparency into the Federal Real Property Profile, and agencies had 

more access to it, and it was more accurate, this would help facilitate individual agencies being able to look for opportunities to consolidate and move into Federal space, which would then reduce the 

reliance on leasing. 

So, lease consolidation could be a very effective tool in terms of 

both saving money and reducing the Federal footprint. 

Mr. CARSON. Yield back, Mr. Chairman. 

Mr. BARLETTA. Thank you. The Chair now recognizes Ms. Norton 

for 5 minutes. 

Ms. NORTON. Thank you, Mr. Chairman. I have a further question on freezing the footprint. As the chairman noted, this committee is working in concert with the administration to encourage 

as much freezing of the footprint as possible. But I noted that the 

GAO, Mr. Wise, has determined that some agencies are overstating. Indeed, some of those that had the largest reductions are 

overstating their freeze of the footprint. Is that—am I reading that 

correctly? 

20 

Mr. WISE. Yes. 

Ms. NORTON. Can you explain that? Is this a technical matter? 

Is it something beyond that? What are they trying to do? 

Mr. WISE. Well, it was a combination of different things, Ms. 

Norton. There were some technical aspects to it, there were some 

miscalculations of the measurements. There were—sometimes it 

was happenstance, where offices had been moving to begin with, 

but it happened to fall in that period when they were being asked 

to reduce a certain amount, or freeze a certain amount. 

And there were also cases where it was just a situation where 

an agency might give back some of its real estate to GSA and claim 

it as a reduction, whereas actually, it was a reduction only to that 

particular agency, but in the aggregate sense, it was still part of 

the Federal footprint. 

Ms. NORTON. It gave back some of its footprint. 

Mr. WISE. But it turned it back—it didn’t actually get reduced 

from the Federal inventory, it got reduced from an individual agency, but it went to GSA to take charge of. And, as a result, it was 

still part of the Federal inventory, but the agency counted it as a 

reduction. 

Ms. NORTON. Yes, but it is a reduction for the agency. If GSA 

doesn’t dispose of it, that is another question. 

Mr. WISE. Well, yes. It is a reduction to that agency, but it is not 

a reduction in the aggregate sense. And that is why we felt that 

the—because the statistics that the administration was presenting 

was an overall, Governmentwide statistic. And, as a result, we 

didn’t feel as though—that, when we did our analysis, that—we 

said, ‘‘Well, that is not—that is a reduction maybe for Agency X, 

but it is not an overall reduction’’—— 

Ms. NORTON. You know, that is fair, Mr. Wise. I am going to say 

it is fair in judging the inventory of the Federal Government. But 

I must say it does nothing to encourage an agency which reduces 

its footprint, and then finds that it looks as though they have overstated. And I would ask GSA to break out, so that we know when 

the agency has done what we asked the agency to do, but GSA, for 

whatever reason, hasn’t gotten to it, so it is not counted as if it is 

simply ignoring the footprint. 

To what extent does moving costs or other costs interfere with 

reduction of the footprint? 

Mr. WISE. You are asking me? 

Ms. NORTON. I am asking all three of you on that. Start with 

you, Mr. Wise. 

Mr. WISE. OK. Well, I will start off. Yes, it has an impact. And 

I think this gets back to some of the testimony that Dave and Norman had talked about a little bit earlier, and that is the fact that 

there are issues when an agency still has to—it sees a space where 

maybe there could be a potential for lease consolidation. 

Let’s say, for example, there is a sorting facility from a post office 

where they are no longer sorting mail, but they still need the front 

end of the post office to provide services. However, that back end 

of it still would need a certain amount of investment, or capital investment, to make it suitable for, say, the other Federal office down 

the street to move in there. And so, who is going to bear that cost? 

That is an issue—— 

21 

Ms. NORTON. Well, that is my question if GSA authorizes to front 

that cost and then build it into the cost of the lease. 

Mr. DONG. I think that is exactly right. And what we are trying 

to do, first and foremost, is to identify the opportunity to move 

from leases into owned space. Once we identify that opportunity, 

it is to figure out how you are going to fund the project. 

Mr. Mader talked about the consolidation fund, which we think 

has been huge in terms of our ability to help support more of these 

projects. We also have a program at GSA that focuses on the upfront cost of furniture and IT [information technology]. And what 

we do is we finance those costs and allow the agencies to repay us 

over time. 

Ms. NORTON. So are you doing all the—all of the upfront costs 

that would be necessary for that agency to move into a smaller 

space? 

Mr. DONG. There are still some costs that the agency would be 

responsible for. But, again, what we are trying to do—— 

Ms. NORTON. What are those—— 

Mr. DONG. It would be certain improvements, certain abovestandard requirements that would be on the tenant to pay. 

Ms. NORTON. You can’t do anything for them—well, that is going 

to keep them right where they are, Mr. Dong. That is going to keep 

them right where they are. You know, they are not getting enough 

appropriations, given the sequester and other reductions, to do 

much more than they are doing. So if they have got to put any 

money into moving, I don’t know how you can expect an agency to 

reduce its footprint. I certainly wouldn’t—if I were an agency, I 

wouldn’t put that upfront. I would put the priority on keeping my 

staff, you know, or keeping my agency running. 

So I don’t see that you are enabling agencies, once they have to 

come up with some money that you know good and well that Congress isn’t giving them, I don’t see how you are enabling people to 

reduce their footprint fast enough. 

Mr. DONG. Yes, we want to make sure that we are using all the 

tools at our disposal, and all the flexibilities that we have to reducing any obstacles. 

Ms. NORTON. Why the tenant? Why is—why are the upfront costs 

for making the tenant adjustments in the facility not a part of 

what could be included in the lease? 

Mr. DONG. Again, we are working to make sure that we have all 

the flexibilities. And we are using those flexibilities. What we often 

see is that agencies don’t want to use the credit card to pay for the 

entire move. They don’t want to overextend themselves, so they 

would rather find the upfront costs to deal with it, so that they are 

not paying overtime. 

So what we do is, transaction by transaction, agency by agency, 

try to figure out how we are going to solve the funding issue for 

that specific project. 

Ms. NORTON. Thank you, Mr. Chairman. I think—I mean I would 

like you to—I would like to know what the number of agencies are 

who are able to move, given the fact that they have got to take care 

of the tenant, the cost of adjustments to the facility in which they 

are moving. I would like you to send that to the chairman, please. 

Mr. DONG. Happy to provide the additional details on that. 

22 

Ms. NORTON. Thank you, Mr. Chairman. 

Mr. BARLETTA. Thank you. I have no further questions. Are there 

any further questions? 

Mr. CARSON. No, sir. 

Mr. BARLETTA. I would like to thank you for your testimony. 

Your comments today have been helpful in our discussion. Thank 

you. 

I will now call the final panel and witness. 

[Pause.] 

Mr. BARLETTA. Maria Foscarinis, executive director of the National Law Center on Homelessness and Poverty. I ask unanimous 

consent that the witness’ full statement be included in the record. 

[No response.] 

Mr. BARLETTA. Without objection, so ordered. 

Since your written testimony has been made a part of the record, 

this subcommittee would request that you limit your oral testimony 

to 5 minutes. And you may proceed. 

TESTIMONY OF MARIA FOSCARINIS, EXECUTIVE DIRECTOR, 

NATIONAL LAW CENTER ON HOMELESSNESS AND POVERTY 

Ms. FOSCARINIS. Thank you, Chairman Barletta, Ranking Member Carson, members of the subcommittee. Thank you for the invitation to testify today. My name is Maria Foscarinis. I am the 

founder and executive director of the National Law Center on 

Homelessness and Poverty. 

The Law Center is the only national organization dedicated to 

using the power of the law to advocate the legal rights of homeless 

and economically vulnerable Americans. Since 1989, Law Center 

attorneys have worked through State and Federal courts to expand 

access to affordable housing, meet the immediate and long-term 

needs of those who are homeless or at risk, and strengthen the social safety net. 

Through our work we have been fortunate to achieve significant 

progress in meeting these goals. In addition to securing and expanding legal rights for homeless Americans, we have worked with 

partners throughout the country to provide services to millions of 

homeless families and children. There is still much work to be 

done. Homelessness remains a crisis affecting too many men, 

women, and children across the country. Many of our Nation’s veterans are among those who are affected. 

One key Federal program designed to assist homeless Americans 

is title V of the McKinney-Vento Homeless Assistance Act, signed 

by President Ronald Reagan in 1987. Title V makes HUD responsible for leading a cross-agency effort to identify unneeded Federal 

properties suitable for use by homeless assistance organizations. 

Once those properties are available, homeless service providers 

have a right of first refusal to acquire the excess property. 

Title V has enabled service providers and local government agencies to acquire and use surplus property to provide meals, shelter, 

housing, job training, medical care, and mental health treatment, 

among other things, for homeless Americans throughout the country. Each year, more than 2 million Americans receive assistance 

through title V. 

23 

Title V is a proven vehicle for assisting America’s homeless with 

no cost to taxpayers. In fact, in light of the focus of today’s hearing, 

I want to emphasize that title V saves taxpayer dollars by reducing 

operations and maintenance costs associated with unused and 

unneeded Federal properties. 

But, despite this ongoing success, the Law Center has identified 

a number of challenges. Most notably, as this subcommittee well 

knows, landholding agencies are all too willing to retain unneeded 

or underused properties. The Law Center has worked for over two 

decades to push Federal agencies to identify all properties eligible 

for disposal under title V. So I can say with certainty that the Law 

Center shares this subcommittee’s goal of ensuring that surplus 

properties are put to better, more productive use, while reducing 

costs to taxpayers. 

As we work towards this common goal, title V must continue to 

be a part of the Federal property disposal process. Title V is not 

the cause of delays. In fact, only those properties deemed by HUD 

as suitable for use to provide homelessness assistance are available 

under title V. For this subset of properties, the title V application 

process takes only a few months to complete. We have worked with 

Congress, HUD, and other Federal agencies to improve and 

streamline title V and improve the efficiency of the process. I would 

like to briefly highlight three areas that could improve the title V 

program and save taxpayer dollars. 

First, property should be designated for disposal once it has been 

vacant or unused for 1 year. If an agency determines that a vacant 

property is still needed, it should submit a written explanation of 

continuing need, which would be available for review by the general public. 

Second, Congress should consider a more streamlined title V application process. Property for which there will not be a homeless 

services application should be available for sale more quickly. At 

the same time, title V applications should be considered more fairly 

and efficiently. 

Third, Congress should consider reducing unnecessary bureaucratic redundancy by providing one agency, HUD, with authority to 

grant or deny title V applications. 

At the Law Center we believe that the right to a home and food 

lie at the heart of human dignity, and we envision a world where 

no one has to go without the basics for human survival. Title V is 

a critical element of this vision, and I urge the subcommittee to ensure that any proposed modifications to Federal property disposal 

preserve and enhance this essential program. 

Thank you for inviting me to testify. I look forward to your questions. 

Mr. BARLETTA. Thank you for your testimony. I will now begin 

the first round of questions, limited to 5 minutes for each Member. 

If there are additional questions following the first round, we will 

have additional rounds of questions, as needed. 

As you have mentioned in your written testimony, we share 

many of the same concerns. I believe we have the same problem 

and the same goals. Agencies are land-banking properties. To address this, there needs to be some independent review and clear diVerDate Aug 31 2005 15:31 Sep 08, 2016 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\ED\2015\6-16-1~1\95073.TXT JEAN
24 

rection, other than relying on agencies themselves. Would you 

agree? 

Ms. FOSCARINIS. [No response.] 

Mr. BARLETTA. Would you agree with that? 

Ms. FOSCARINIS. Well, certainly there needs to be review, yes. I 

agree. 

Mr. BARLETTA. I am pleased with the discussion your organization has already had with this committee, and we look forward to 

continue to work with you on a solution that we can all agree on. 

Will you continue to work with us on this important issue? 

Ms. FOSCARINIS. Oh, absolutely. We would love to work with you, 

Mr. Chairman. 

Mr. BARLETTA. Yes, thank you. 

Ms. FOSCARINIS. And the subcommittee. 

Mr. BARLETTA. Thank you. I recognize Ranking Member Carson 

for 5 minutes. 

Mr. CARSON. Thank you, Chairman. Madam Foscarinis, in your 

testimony you discuss the possibility of improving the disposal 

process by making HUD responsible for evaluating and approving 

applications for properties to be provided for homeless providers. 

Can you discuss this idea and how it could expedite the process of 

disposal? 

Ms. FOSCARINIS. Absolutely, Congressman Carson. So, right now, 

the review process lies with HHS [U.S. Department of Health and 

Human Services]. HUD is responsible for the front end of the process, and then HHS takes over. We believe that the process could 

be streamlined, if authority were vested in a single agency. We 

think HUD is the most logical agency. HUD has the most expertise 

on issues of homelessness. And so we propose reducing bureaucratic redundancy by vesting the authority in HUD. 

Mr. CARSON. And lastly, how would you describe the level of cooperation that homeless service providers have received from Federal agencies with respect to how they report excess properties? 

And how could that be improved? 

Ms. FOSCARINIS. Well, I think a big problem for service providers 

is that they are not familiar with the process. There is a lack of 

information about what properties are available. So we believe that 

the agencies should—And GSA should—comply with—well, GSA 

should comply with the court order, and not land-bank the properties, and report the properties that are—that it annually deems 

excess to us, and to the homeless service providers for use as properties to assist homeless people. 

But we also think that much more needs to be done with outreach. As the GAO recommended in its report, much more needs 

to be done to get the word out that these properties are available. 

Homeless service providers are not often reading the Federal Register. Much more user-friendly and accessible methods of outreach 

need to be implemented. 

Mr. CARSON. Thank you, ma’am. 

Mr. Chairman, I yield back. 

Mr. BARLETTA. Thank you. The Chair recognizes—oh, Ms. Norton 

is gone. OK. 

I would like to—are there are any further questions? 

[No response.] 

25 

Mr. BARLETTA. I would like to thank you for your testimony. 

Your comments have been helpful to today’s discussion. 

And if there are no further questions, I would ask unanimous 

consent that the record of today’s hearing remain open until such 

time as our witnesses have provided answers to any questions that 

may be submitted to them in writing, and unanimous consent that 

the record remain open for 15 days for any additional comments 

and information submitted by Members or witnesses to be included 

in the record of today’s hearing. 

[No response.] 

Mr. BARLETTA. Without objection, so ordered. 

I would like to again thank our witnesses, again, for their testimony today. 

If no other Members have anything to add, this subcommittee 

stands adjourned. 

[Whereupon, at 3:05 p.m., the subcommittee was adjourned.] 

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