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FEDERAL REAL PROPERTY REFORM: 

HOW CUTTING RED TAPE AND BETTER MANAGEMENT COULD ACHIEVE BILLIONS IN SAVINGS 

HEARING 

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

JUNE 16, 2015 

Available via the World Wide Web: http://www.fdsys.gov/ 

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

RON JOHNSON, Wisconsin Chairman 

JOHN MCCAIN, Arizona 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JAMES LANKFORD, Oklahoma 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

JONI ERNST, Iowa 

BEN SASSE, Nebraska 

THOMAS R. CARPER, Delaware 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

CORY A. BOOKER, New Jersey 

GARY C. PETERS, Michigan 

KEITH B. ASHDOWN, Staff Director 

COURTNEY J. ALLEN, Counsel 

PATRICK J. BAILEY, Chief Counsel for Governmental Affairs 

GABRIELLE A. BATKIN. Minority Staff Director 

JOHN P. KILVINGTON, Minority Deputy Staff Director 

TROY H. CRIBB, Minority Chief Counsel for Governmental Affairs 

DEIRDRE G. ARMSTRONG, Minority Professional Staff Member 

BRIAN F. PAPP, Minority Legislative Aide 

LAURA W. KILBRIDE, Chief Clerk 

LAUREN M. CORCORAN, Hearing Clerk 
(III) 

C O N T E N T S 

Opening statements: Page 

Senator Johnson ............................................................................................... 1 

Senator Carper ................................................................................................. 2 

Senator Lankford .............................................................................................. 15 

Senator Heitkamp ............................................................................................ 18 

Senator Ayotte .................................................................................................. 21 

Senator Portman .............................................................................................. 23 

Prepared statements: 

Senator Johnson ............................................................................................... 29 

Senator Carper ................................................................................................. 30 

WITNESSES 

TUESDAY, JUNE 16, 2015 

Hon. David Mader, Controller, Office of Management and Budget .................... 4 

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

Administration ..................................................................................................... 6 

Dave Wise, Director, Physical Infrastructure Issues, U.S. Government Accountability Office ................................................................................................ 8 

ALPHABETICAL LIST OF WITNESSES

Dong, Norman: 

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

Prepared statement .......................................................................................... 35 

Mader, Hon. David: 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 31 

Wise, Dave: 

Testimony .......................................................................................................... 8 

Prepared statement .......................................................................................... 41 

APPENDIX 

Response to post-hearing questions submitted for the Record 

Mr. Mader ......................................................................................................... 52 

Mr. Dong ........................................................................................................... 59 

Mr. Wise ............................................................................................................ 64 

(1) 

1The prepared statement of Chairman Johnson appears in the Appendix on page 29. 

FEDERAL REAL PROPERTY REFORM: 

HOW CUTTING RED TAPE AND BETTER 

MANAGEMENT COULD ACHIEVE BILLIONS IN 

SAVING 

TUESDAY, JUNE 16, 2015 

U.S. SENATE,

COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:04 a.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Ron Johnson, Chairman of the Committee, presiding. 

Present: Senators Johnson, Portman, Lankford, Ayotte, Ernst, 

Carper, McCaskill, Heitkamp, and Peters. 

OPENING STATEMENT OF CHAIRMAN JOHNSON 

Chairman JOHNSON. This hearing will come to order. 

I want to welcome our witnesses and thank them for the testimony they have prepared. Pretty interesting reading. I also want 

to ask unanimous consent, while my Ranking Member’s back is 

turned, to enter my written statement into the record.1

Let me just start extemporaneously talking about this problem, 

because this is a hearing that I have been looking forward to. I 

know our Ranking Member, even though he is not paying attention 

to me, has done an awful lot of work on this subject. 

But, coming from the private sector, I look at the management 

of property, the ability to dispose of it in a cost-effective manner 

and one that is beneficial to government, this ought to be simple. 

This should not be this difficult. I know in my business in Oshkosh, 

Wisconsin, both as a stand-alone business and then part of a larger 

corporation, there was just a pretty streamlined process. When I 

was part of a large corporation, we had a budgeting process. Certainly if you wanted to do a capital expenditure or a capital disposal, you would propose that to management, people agree, and 

you get it done. You get some appraisals, you find out basically 

what the property is worth, and you sell it. 

Even if you had another division that may have been able to use 

it, you kind of put them on notice, you sell the piece of property, 

maybe we could have used it, but, well, then they can buy another 

piece of property. This should not be this difficult. 
2 

But being briefed for this hearing, it seems like there are two 

basic problems. First of all, we do not have the information. 

275,000 buildings are owned by the Federal Government, but we 

really do not have an idea what is the full value of that, how many 

are being fully utilized, how many are being underutilized. So you 

actually need information to solve a problem. There is the first 

problem. 

And then with the best of intentions, I think Congress has probably created a number of hurdles, a lot of hoops that the agencies 

have to go through to dispose of any piece of property. Again, making sure that if there is a piece of property that could potentially 

be used for a homeless shelter or in some other area of government, well, that sets up a process that makes it extremely difficult 

and certainly lengthens out the process for disposing of property. 

So, again, the purpose of this hearing, as I was talking to the 

witnesses beforehand, is let us make sure that we understand this 

problem. Let us admit we have it. And let us agree on some pretty 

simple solutions here in terms of let us get the information we 

need and let us cut through the red tape. Let us reduce those 

hoops. Let us make this a very streamlined process so we can manage property for the benefit of the American taxpayer. 

So, again, I am looking forward to it. Let us come up with solutions here, and with that, I will turn it over to our Ranking Member, who really has worked pretty tirelessly on this issue, and 

hopefully we can succeed pretty quick. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. I am tired. [Laughter.] 

But not tired of this issue. In fact, I am always motivated and 

excited about this issue. We are joined by our new colleague from 

Oklahoma. I worked with an old colleague from Oklahoma almost 

from the day he got here, oh, about 10 years ago or so. And we 

went up to Chicago, and we went to visit a post office building 

there that had not been used for years. And we were spending 

money for the utilities, we were spending money for security, we 

were spending money for maintenance, but not using it, and had 

not used it for a long time and probably were not going to use it 

for a while. So Tom Coburn and I literally started working on real 

property management coming out of that hearing, figuring out 

what we in the Congress could do and what the Executive Branch 

could do. We worked with the Bush Administration, and we have 

now worked with the Obama Administration for over 6 years. 

Every now and then when we hold hearings in this Committee, 

Mr. Chairman and colleagues, I will say to the witnesses from the 

Federal Government agencies, I will say: ‘‘What can we do to help 

in a particular way to save money in what you are doing?’’ And one 

of the things they always say is, ‘‘Keep doing oversight.’’ And we 

have done oversight out the wazoo with respect to real property 

management. We have had some very tough, difficult meetings in 

513 Hart, in my office, over the years with the Office of Management and Budget (OMB), with the General Services Administration 

(GSA), with the Housing and Urban Development (HUD), with others, and trying to figure out what more they can be doing working 

together collaborating, and what we can do to help them. 
3 

We do not make their jobs easy. You have alluded to that. And 

one of the things we will be getting into today with Mr. Mader, Mr. 

Dong, and Mr. Wise is—these guys have heard me say this before—you can do it, we can help—just like at Home Depot. And 

part of what I want us to walk away from here is how can we help 

and what are we doing that is helpful today. 

The other thing is I think some of the folks around this hearing, 

including the Chairman, have really good, practical world experience on these issues, and not on a scale or the magnitude of what 

we deal with here at the Federal Government, but actually it scales 

up pretty good, and I think that given the talent we have here on 

our staffs, the very good work that is going on among the agencies 

and the Administration, there are collaborative efforts. I am more 

encouraged on the real property, the use of real property than I 

have been in some time. 

One of the things I will say is—and this will come out in the 

hearing—we use a budget process, as you all know, that if agencies 

lease space, it scores better than if they buy or build. 

I will say that again. If agencies lease space, it scores better with 

the Congressional Budget Office (CBO) than if they buy or build. 

But in practical terms, over 30 years, we waste a lot of money. And 

then the phone rings and—— 

Chairman JOHNSON. Sorry. 

Senator CARPER. That tells me my time has expired. [Laughter.] 

But one of the things that I hope we will talk a little bit about 

is St. Elizabeths, the St. Elizabeths campus and the Department 

of Homeland Security (DHS). Every past Secretary of Homeland 

Security has said, ‘‘Do this, actually make this investment, and 

over time you will save not just hundreds of millions of dollars; you 

will save billions of dollars for taxpayers over 30 years.’’ And some 

of us will still be here 30 years from now—I look to my left, Heidi, 

and I do not know that I will be here. 

At any rate, I think we are sort of reaching a good point here 

on this issue where some good stuff is happening. We teed it up, 

and I will close with this: I was talking with Mr. Mader earlier, 

colleagues, and he told me that one of his goals is a year or so from 

now he wants to meet with Gene Dodaro, who heads up the Government Accountability Office (GAO), and basically for Gene to say 

at the beginning of the next Congress, real property management 

is off the high-risk list. And it has been there forever, and that is 

a great goal to have. And you can do it, and we can help. We are 

going to have a good hearing. 

Thank you. 

Chairman JOHNSON. Thank you, Senator Carper. We have had a 

lot of hearings on some real problems, things that are so complex. 

My definition of a problem is something that does not have an easy 

solution. This should not be a problem because these are some 

pretty easy solutions. So, again, I am really looking forward to the 

testimony. 

It is the tradition of this Committee to swear in witnesses, so if 

you will all rise and raise your right hand. Do you swear that the 

testimony you will give before this Committee will be the truth, the 

whole truth, and nothing but the truth, so help you, God? 

Mr. MADER. I do. 
4 

1The prepared statement of Mr. Mader appears in the Appendix on page 31. 

Mr. DONG. I do. 

Mr. WISE. I do. 

Chairman JOHNSON. Thank you. Please be seated. 

Our first witness is David Mader. Mr. Mader is the Controller at 

the Office of Management and Budget. Prior to his confirmation, 

Mr. Mader was senior vice president for strategy and organization 

at Booz Allen Hamilton. From 1971 to 2003, Mr. Mader held various positions at the Internal Revenue Service (IRS), including Acting Deputy Commissioner, Acting Deputy Commissioner for Modernization and the Chief Information Officer (CIO), Assistant Deputy Commissioner, and Chief for Management and Finance. Mr. 

Mader. 

TESTIMONY OF THE HONORABLE DAVID MADER,1

CONTROLLER, OFFICE OF MANAGEMENT AND BUDGET 

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

Carper, and Members of the Committee, for the invitation today to 

testify and to update the Committee on the changes that the Administration is implementing to improve the government’s real 

property management capability and the overall efficiency of the 

Federal 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 last 11 months, we have continued to 

implement actions that will improve and transform the way the 

Federal Government manages its real property portfolio. 

Our plan includes four key components. 

First, develop and implement a strategic framework that will 

guide agencies’ management of their real property over the next 5 

years. 

Second, develop and implement governmentwide performance 

metrics to identify efficiency opportunities, and to assess the performance of individual agencies. 

Third is to develop a new management tool within the current 

Federal Real Property Profile (FRPP) to enhance the utility of the 

data. 

Fourth, modifications to existing statutes to increase the pace 

and the 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 2015 enacted level in support of critical construction and renovation projects as well as opportunities for consolidation in the Federal Buildings inventory. 

We have completed or made significant progress on three of the 

four components over the last 8 months. We issued the first time 

ever a National Real Property Strategy in March 2015 which builds 

on past actions and results to define the strategic framework agencies’ will use to manage their portfolios. The framework will freeze 
5 

the growth in the inventory, measure performance and identify opportunities to improve efficiency and data quality, and ultimately 

reduce the size of the inventory by prioritizing actions to consolidate, co-locate, and dispose of properties. 

To implement this strategy, we have issued a new policy that 

provides a set of agency-specific performance metrics. The ‘‘Reduce 

the Footprint’’ policy, also issued in March 2015, requires agencies 

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

The prioritization of disposals of unneeded and inefficient properties by requiring agencies to set annual square foot disposal targets for all buildings is a real first. 

It also requires agencies to issue office space design standards by 

March of next year, and this will be used on a forward-going basis 

to ensure that we continue to maintain the reduction in real property inventory. 

The last component of our plan, potential modifications 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 some sales proceeds reinvested 

in additional disposals, expanded authority for GSA to support 

agencies’ work to prepare properties for the declaration of ‘‘excess,’’ 

and relief from some of the aspects of the public benefit conveyance 

process. 

All of the components of our vision, except, of course, potential 

modifications to statute, will be implemented by the end of this fiscal year (FY) 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 baseline by 11.2 million square feet in 2014, and 

this result built on a 10.2 million square feet reduction in fiscal 

year 2013. So in 2 years, 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 result in out-year cost avoidance. We 

have made progress; however, significant opportunities remain. 

One significant challenge that the General Services Administration faces is with the Federal Building Fund. The GSA is leading 

the Federal effort to both invest in Federal facilities and consolidate space to reduce costs and to optimize efficiency, avoiding tens 

of millions of dollars in annual lease costs. Recent funding levels 

of the GSA and the other Federal landholding agencies have led to 

both facility deterioration as well as missed opportunities to consolidate and reduce operating costs. As I have previously stated in 

many meetings and testimony last year in the House, one must invest to save. 

We look forward to working with the Committee on legislation 

that will enable us to make even greater progress improving the 

efficiency of the governmentwide portfolio and accelerating the pace 

of property disposals over the next 5 years. 

Thank you for inviting me to testify today, and I look forward to 

answering your questions. 

Chairman JOHNSON. Thank you, Mr. Mader. 
6 

1The prepared statement of Mr. Dong appears in the Appendix on page 35. 

Our next witness is Norman Dong. Mr. Dong is Commissioner of 

the Public Buildings Service under the General Services Administration. In this role, Commissioner Dong manages the management, design, construction, leasing, and disposal of governmentowned and leased spaces nationwide. Prior to joining GSA, Commissioner was Acting Controller at the Office of Management and 

Budget where he coordinated governmentwide improvements in all 

areas of financial management. Mr. Dong. 

TESTIMONY OF NORMAN DONG,1 COMMISSIONER, PUBLIC 

BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION 

Mr. DONG. Good morning, Chairman Johnson, Ranking Member 

Carper, and Members of this Committee. Thank you for inviting 

me to this hearing. 

Our mission at GSA is to deliver the best value in real estate, 

acquisition, and technology to the Federal Government. And within 

the Public Buildings Service, our goal is to support agency real 

property requirements, but in the most fiscally responsible way. 

We recognize that dollars spent on real estate come 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; taking a more disciplined approach to leasing; disposing of 

unneeded assets; leveraging our exchange and outleasing authorities; and 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 co-locate, consolidate, and reduce the Federal real estate 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 leases into federally owned space. 

In Minneapolis, for example, we are partnering with HUD 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 just in that one transaction. 

Today we are executing dozens of projects that will reduce the 

Federal footprint by over 800,000 square feet and reduce annual 

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 maximize the use of federally owned space, we will always 

see a significant amount of leasing activity. So our job at GSA is 

to make sure that we are not just reducing the Federal footprint 

but we are also reducing 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. 
7 

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

working with our Federal tenants to simplify their requirements 

and broaden delineated areas to increase competition; to extend 

lease terms to 10 years or longer wherever possible because longer 

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

at least 36 months before lease expiration to allow for competitive 

procurements and to avoid costly holdovers and extensions. 

Whenever we are in holdover or extension, the government is 

paying about 20 percent more than it should, on average. In recent 

years, we have actually seen some progress to reduce the number 

of holdovers and extensions, and by the end of fiscal year 2014, we 

had 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 that we no longer need and to move these 

properties off our books. In fiscal year 2014, GSA disposed of 342 

properties governmentwide, which was about a 61-percent increase 

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

goal of disposing of 3 million square feet of excess property. 

We are seeing some great examples of how agencies are being 

more aggressive to move excess property off the Federal rolls. 

In Seattle, for example, GSA recently worked with the Federal 

Reserve to sell their vacant building in that city. With more than 

eight bidders competing, we ultimately sold that building for $16 

million through an online auction. So while we are seeing some 

progress, we also recognize that we can and must do more to move 

excess properties off our books. 

We are 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, D.C., GSA is 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 remainder of our headquarters facility and to further the DHS consolidation at St. Elizabeths. 

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 that 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 Estate. This summer, 

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

the footprint, and through this effort, we will buildupon our work 

in fiscal year 2015 and develop a robust pipeline of potential 

projects for disposal, exchange, and outlease in the next fiscal year. 

We have made significant progress in managing Federal real 

property, but I think we all recognize that there is much more 

work that must be done. I look forward to working with this Committee to improve the Federal Government’s management of its 

real property. 

Thank you for the opportunity to testify today, and I look forward to your questions. 
8 

1The prepared statement of Mr. Wise appears in the Appendix on page 41. 

Chairman JOHNSON. Thank you, Mr. Dong. 

Our next witness is David Wise. With a name like that, I am expecting some pretty good testimony. Mr. Wise is the Director of 

Physical Infrastructure Issues at the Government Accountability 

Office, where he works on issues of Federal real property and surface transportation. Mr. Wise first worked at GAO from 1981 to 

1989 and returned in 2007 after serving as a political adviser to 

a U.S. Army Civil Affairs Unit in Afghanistan, and with the State 

Department as a Foreign Service Officer and in the Office of Inspector General (OIG). Mr. Wise. 

TESTIMONY OF DAVE WISE,1 DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY 

OFFICE 

Mr. WISE. Chairman Johnson, Ranking Member Carper, 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 and diverse, costing billions of dollars annually to support. The portfolio comprises hundreds of thousands of 

buildings, such as office buildings, storage warehouses, courthouses, hospitals, and laboratories—and a comparable number of 

permanent structures—such as roads, dams, and parking garages. 

My statement today focuses on improvements and challenges in 

Federal real property management and 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 (FRPC) and the Federal Real Property Profile, which is the 

government’s real property database; implementing the 2011 

Freeze the Footprint policy aimed at keeping Federal domestic office and warehouse inventory at a baseline level established using 

FRPP data; issuing this past March its 2015–20 National Strategy 

for the Efficient Use of Real Property; the strategy includes freezing growth in the inventory, measuring performance, and reducing 

growth through consolidation, collocation, 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 in the long run; 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, actually exceeding its goals. 

However, we found that the data behind these results were 

somewhat unreliable, resulting in a potential overstatement of the 

progress made. For example, some properties credited as having 
9 

been disposed of by agencies were actually returned to GSA and remain part of the Federal footprint. 

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 

taken steps to consolidate high-value leases and smaller leases as 

they expire. However, we noted that GSA then lacked an action 

plan and transparent data to demonstrate progress in actually 

achieving the goal. 

Consistent and accurate data are critical to effectively manage 

real property. Despite leadership commitment to improve FRPP, 

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 accurately. While the government has taken some steps to improve 

FRPP, additional improvements are needed, including better accuracy of utilization, space reductions as reported by agencies, maintenance needs, and the 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, and this effort is ongoing. 

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

capital plan to help ensure that long-term goals were fully considered when making decisions to fund capital projects. GSA also 

agreed but conveyed that the challenging budget environment in 

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

In the September 2013 report, we recommended that GSA develop and use clear criteria to rank and prioritize potential longterm ownership solutions for current high-value leases. GSA also 

agreed and may be able to look to the newly issued Real Property 

Strategy as a potential tool for implementation. 

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 other real 

property recommendations. 

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

bill’s, the Civilian Property Realignment Act (CPRA), provided a 

framework for disposing of and consolidating civilian real property. 

Another bill, the Federal Real Property Asset Management Reform 

Act, codified the FRPC and modified provisions for homeless assistance. In 2011, we testified that CPRA could improve real property 

management. 

We also made some legislative suggestions to Congress as part 

of our September 2014 report on implementation of Title 5 of the 
10 

McKinney-Vento Homeless Assistance Act. We found that since its 

inception in 1987, the Homeless Assistance Program has transferred 122 properties out of the 40,000 screened to service providers. For various reasons, many screened properties were unsuitable. We suggest that Congress revisit the types of properties that 

must be screened. Recently, a submitted amendment to the fiscal 

year 2016 National Defense Authorization Act would exempt some 

excess, underutilized, or unutilized U.S. Army non-mobile real 

property from Title 5 that is evaluated as unsuitable for potential 

homeless in order to expedite the disposal process. 

Chairman Johnson, Ranking Member Carper, and Members of 

the Committee, this completes my statement. I would be pleased to 

respond to any questions that you may have. 

Chairman JOHNSON. Thank you, Mr. Wise. 

Mr. Dong, I would like to start with you, just kind of some basic 

metrics. In your testimony, you said that GSA has 377 million 

square feet of property basically under your management. Is that 

all of civilian property outside the Defense Department (DOD)? Or 

do you have a figure in terms of what the government completely 

owns? 

Mr. DONG. That is just a portion of the larger holdings within the 

Federal Government. I think it is probably about 10 percent of the 

total. 

Chairman JOHNSON. So you are saying the number of square feet 

held by the Federal Government is over 3 billion square feet? 

Mr. DONG. I think Mr. Mader would have the exact figure. 

Chairman JOHNSON. Mr. Mader, do you have that? 

Mr. MADER. Yes, Mr. Chairman, and this is civilian and defense. 

There is a total of 254,000 owned buildings; 21,000 leased buildings; and that is 2.5 billion square feet of space for owned buildings, and 295 million square feet for leased. So roughly, 2.7, almost 

2.8 billion square feet of space. 

And that is all facilities. 

Chairman JOHNSON. So when you are talking about disposing of 

21 million square feet versus 2,500 million square feet, we are talking about just an infinitesimal amount of disposals, correct? 

Mr. MADER. We are talking about a small number, and I think 

we need to go back to Mr. Wise’s testimony. What is included in 

that, for an example, let us say if you were in the Department of 

Interior, National Park Service (NPS), if you had a facility that was 

sitting in a national park that was no longer useful and was declared excess, that would be included in that inventory. Obviously, 

other than demolishing that structure, there is not any other use 

for it. So it includes—— 

Chairman JOHNSON. Again, but that structure is costing money 

in terms of maintenance and repair, which is part of the problem. 

Mr. MADER. Absolutely, and that is why in the case of Interior 

they actually have an aggressive program. 

Chairman JOHNSON. So out of the 2.5 billion square feet within 

this profile, or wherever the information would be captured, the 

Federal Real Property Profile or someplace else, in my mind there 

would probably be three categories that I would want to see. I do 

not know the way you categorize it, but, fully utilized properties, 
11 

underutilized properties, and then non-utilized or excess properties. 

Is that how we categorize these things? 

Mr. MADER. Yes, Mr. Chairman, we actually put it in those three 

buckets. It is underutilized, unutilized, and then pure excess. 

Chairman JOHNSON. Do you have the breakdown then of the 2.5 

billion square feet, how much is fully utilized for that? 

Mr. MADER. I have it by building, not by square foot. 

Chairman JOHNSON. Well, I will take it by building. I would say 

by square foot it would probably be—— 

Mr. MADER. We can provide that to you later. 

Chairman JOHNSON. OK, great. 

What do you have in terms of buildings then? 

Mr. MADER. So for buildings, we have 1,615 underutilized, 3,360 

unutilized, and 4,465 pure excess, already declared excess. 

Chairman JOHNSON. That does not total up to the amount here. 

You were saying you have 275,000 buildings in total. 

Mr. MADER. Yes, sir. 

Chairman JOHNSON. So I see 1,600—— 

Mr. MADER. Now, the other buildings, the delta is buildings that 

are being utilized. So we categorize underutilized. 

Chairman JOHNSON. OK. 

Mr. MADER. Underutilized would be we are not maximizing—— 

Chairman JOHNSON. That is 1,615. 

Mr. MADER. Right. Unutilized, meaning it may be temporarily 

vacant and being held for future use by an agency; and then the 

third category, pure excess, there is no use. 

Chairman JOHNSON. OK. I got you. 

Mr. Mader, you are talking about, we need money to save money. 

There is a British and now Canadian concept of regulation: one in, 

one out. In business, certainly the way I would be looking at this 

is with all these—again, that is a lot of excess properties. That is 

close to 10,000 in some way, shape, or form, just quickly doing the 

math in my head. There is a lot of dollar value wrapped up in that, 

I would assume. Why wouldn’t we utilize a goal, a discipline in the 

process of let us dispose of some, let us take those proceeds from 

that sale and utilize that for either further disposals or even for 

construction? 

Mr. MADER. Mr. Chairman, if you go back to Mr. Wise’s testimony, he talked about CPRA, which was recommended by the Administration several years ago and is actually in the President’s 

2016 budget, and basically one of the key components of that is to 

do just exactly what you just described, and that is, retain some 

of the proceeds from the sale of excess property and then use that 

then to prepare, as Mr. Dong testified, additional properties for disposal. So it sort of creates a revolving fund. 

Chairman JOHNSON. Why not use it all rather than—in your testimony, you asked for $2.4 billion in increased funding for disposals 

and property management? 

Mr. MADER. Part of it is capacity. I think you get to the point 

where you can just handle so many properties in a year. And I also 

think that as the Administration proposed, we retain some for disposal, but the other remaining balance would go back into general 

receipts. 
12 

Chairman JOHNSON. Mr. Wise, tell me, describe to me the greatest impediment to disposal of property. What hoops, what hurdles 

do Federal employees and managers of these things have to go 

through just to get rid of a property? How long does it take to get 

rid of one? 

Mr. WISE. Well, the length of time varies tremendously, but the 

major issues involved are, No. 1, I think as you alluded to in your 

opening statement, we really do not have a great handle on exactly 

what we have and how it is being used. The real property database 

is still a work in progress in terms of improving the FRPP. So that 

is No. 1. And I think that as a Federal manager in Washington or 

any other place, unless you have a really good handle on exactly 

what you have out there, its condition, and how it is being used, 

it is difficult to make the management decisions. 

The other part of it is the disposal process, again, as you mentioned in your opening statement, is a complicated process given 

the current legislative environment. And that is an area where perhaps Congress can be of assistance, and I believe the new amendment that was proposed is moving in that direction, and as Dave 

suggested, the CPRA legislation also—when we testified several 

years ago, we mentioned that it looked like a step in the right direction in terms of being able to consolidate properties for kind of 

an up-or-down decision, which would serve to mitigate or limit, at 

least, some of the competing stakeholder interests that also serve 

as challenges in trying to dispose of Federal real property. 

Chairman JOHNSON. Just briefly, not to create conflict between 

witnesses, do you basically confirm what Mr. Mader was talking 

about in terms of the underutilized, the unutilized, and the excess? 

Do you think those are pretty accurate numbers, or do you think 

that is questionable? 

Mr. WISE. Well, we prefer not to really speak in numbers at the 

moment because we are not confident enough in the FRPP data to 

take a stance other than we do not think the figures or the data 

are reliable. So all the numbers that exist are really numbers that 

are provided by the Office of Management and Budget and other 

Federal agencies. But many of our reports have proven time and 

time again that there are issues with the data that undermine the 

aggregate compilations such as what real property is out there, its 

condition, and how it is being used. 

Chairman JOHNSON. OK. Thank you. Senator Carper. 

Senator CARPER. Thanks, Mr. Chairman. 

Mr. Wise, earlier today David Mader said to me that one of his 

goals and one of OMB’s goals is to roll into, I guess it would be, 

2017 and the new GAO high-risk list is released, that among the 

items that would be missing would be real property management 

because we will have made sufficient progress for GAO to say, you 

have done good, there is still work to do, but we are going to pull 

them off the high-risk list. 

You have talked a little bit about this, but just walk through 

with us—and for Mr. Mader and Mr. Dong, walk through with us 

some of the most important steps that OMB, the Administration at 

large, needs to take in order to make that happen, and at the same 

time some of the steps that we have to take to make that happen, 

please. 
13 

Mr. WISE. As you imply in your question, it is a multifaceted 

issue and a cooperative effort is needed to resolve these issues. We 

have talked regularly with Dave and his staff and with Norm and 

his staff that, there is considerable progress being made. There is 

clearly strong management commitment to trying to improve the 

situation, and the development of the National Strategy was an important step in that direction. We commend the agencies for moving in that direction. 

I think we still have concerns about the data, and that is one of 

the things we will be looking at closely when we do the next highrisk update. 

There is no question about it, there is strong commitment, and 

definitely it is a work that is being developed. And we have seen 

some demonstrations that it is beginning to look like the ship is 

moving in the right direction in terms of the data. But when we 

come back and do our next high-risk update, we will certainly test 

that and take a look and see how things play out when we examine 

the data again. 

Senator CARPER. In the Navy, when we were doing the hard 

things, we would sometimes liken it to changing the course of an 

aircraft carrier. And having worked on this for almost a decade, 

this is a big carrier, but I think we are changing the course. And 

it is a cooperative endeavor. 

Part of the work that needs to be done needs to be done by us, 

and you mentioned legislation. You mentioned an amendment that 

has been offered to the National Defense Authorization Act, and 

that is offered by Angus King of Maine and yours truly. I was kidding him, I said, ‘‘In listing the amendment, will it be Carper-King 

or could we maybe change it and have it King-Carper?’’ And he 

said—— 

Mr. WISE. That has a nice ring to it. [Laughter.] 

Senator CARPER. He said, ‘‘If I were king, there are some things 

I would do legislatively that we have tried to do without a whole 

lot of success.’’ And one of those is to revisit the McKinney-Vento 

legislation, the law that has been around—I knew both those guys. 

They are both deceased now, colleagues, good people. They had a 

commitment to the least of these in our society and wanted to 

make sure that we are looking for folks who are homeless and to 

try to make sure if there is surplus Federal property, as you know, 

that it would be made available to homeless groups. 

You mentioned the number of properties that have been, I think, 

ceded or turned over to homeless groups, and for the last maybe 

25 years, I think you said it is a little over 100. My recollection in 

the last year or two it is maybe one or two. And it is a program 

that is well intended, but in my own view, it has not worked. 

One of the pieces of legislation that you talked about that had 

been offered in the last several years is one—I think Tom Coburn 

and I offered it, and it basically said rather than having a program 

that does not seem to be moving much surplus property to help 

homeless groups, why don’t we have an approach that says let us 

allow that property to be sold and then take a certain percentage 

of that, the proceeds, and to use that to supplement what is appropriated? 
14 

I thought that was a pretty good idea, and the homeless groups 

said, in part, in response, ‘‘Well, if you do that, what the appropriators will do is they will’’—let us say we had, like $5 as an example, $5 from all the proceeds of all these sales that could go to 

homeless groups. The homeless groups say, ‘‘Well, what the appropriators will do is reduce our appropriation for aid to homeless people by $5 to offset it.’’ 

We have something we call ‘‘maintenance of effort’’ that we use 

in other programs, educational programs, when there is Federal 

money, we say to States, ‘‘You have to maintain effort.’’ Maybe 

there is some kind of maintenance of effort approach here that we 

can use in this regard and do what Dr. Coburn and I and our staffs 

have been trying to do in this regard. 

Talk to us about McKinney-Vento, anybody, about how we can 

take a program that is not working—it reminds me of the Toxic 

Substances Control Act. It has been around for 38 years. The idea 

is to have the Environmental Protection Agency (EPA) look at 

highly toxic substances in this country. In 38 years, they have done 

five of them. Out of thousands they have done five. It does not 

work. And McKinney-Vento, I just do not think it works. And I 

want to be humane. We have a moral obligation to the least of 

these, folks who do not have a place to live, but there has got to 

be a better way to do this. 

Would you all talk about this for us a little bit? David, would you 

go first? Then we will hear from your colleagues there. 

Mr. MADER. Senator Carper, one of the things I did a year ago 

when I started this job was looking at the real property situation, 

and one of the things that we started looking at was, how long this 

process actually takes. And we took a couple of case studies and 

sort of plotted them out on a timeline. I think the one that go 

through the process the quickest was maybe like 9 months. Some 

of them took like years. It is interesting. There are two departments that are involved in this. It is HUD and the Department of 

Health and Human Services (HHS), and since they are both, Executive Branch departments, actually I have been interacting with 

both of them to see if at least within the existing legislative framework, are there things that we can do administratively to speed up 

the process between those two departments? 

But I think to the testimony from Mr. Wise, I mean, when you 

look at the results over 10 years, there is not a lot. And I have to 

think that there is a way of better categorizing the types of excess 

property so that only those that truly would be usable for the purpose intended by McKinney-Vento would actually go for that consideration and allow us to move those other properties quickly. 

Senator CARPER. All right. Thank you. 

Norm, very quickly, any comments? And then Mr. Wise. Just 

very briefly. 

Mr. DONG. I think it is important to understand the original intent of McKinney-Vento, and we definitely support that objective. 

It is an important objective to determine whether we have any 

properties that have potential use for the homeless. 

That having been said, when you actually look at the results that 

we have seen and less than 2 percent of those properties actually 

ending up for use by the homeless, it suggests that the process is 
15 

not very target-effective and that there is probably a better way of 

supporting this objective. 

Senator CARPER. All right. Mr. Wise, very briefly. 

Mr. WISE. I agree with Norm and David. Basically there is such 

a vast number of properties that are clearly unsuitable for the purposes of trying to provide housing for the homeless. Many buildings 

that are being screened, as your amendment gets at, are in closed 

military facilities and cannot be used for that purpose, or they are 

in VA campuses, the same thing, or they are in remote areas. But 

they all go through this process of screening, Federal Register notices, and so forth. Also, the HUD recordkeeping is cumbersome. It 

just is a really awkward and time-consuming process, and as we 

have discussed without a whole lot of payoff. 

I think that some of the idea that you mentioned in the earlier 

legislation as well as the one that is in the current amendment 

might be steps to help mitigate some of these challenges in terms 

of coming up with a rational perspective, helping the homeless but 

yet not going through this incredible grind to try to get to a couple 

properties a year or however many it is. 

Senator CARPER. All right. Thanks. 

Mr. WISE. So I think it is definitely an effort where Congress can 

play a very positive and important role. 

Senator CARPER. Good. Well, colleagues, Mr. Chairman, there is 

stuff we can do here, and we need to do it. We have tried it before, 

not been successful, and I am encouraged here to give it another 

shot and work together. 

Thank you. 

Chairman JOHNSON. I think one lesson learned is sometimes it 

is very difficult to achieve one goal. But when you start tacking on 

a second and third goal, it makes it all that much more complicated, and there are all kinds of unintended consequences. So, 

again, well intentioned, but it is the multiple goals that just complicate the process, and we need to simplify things. Senator 

Lankford. 

OPENING STATEMENT OF SENATOR LANKFORD 

Senator LANKFORD. Thank you, Mr. Chairman. 

Senator Carper, I would just tell you that I would be willing to 

be able to join you in that journey and try to figure out a way that 

we can get this resolved. I know you have worked on this for a long 

time, as several Members of this Committee have. But this is one 

of the areas that we talk about perennially, that there are real solutions to it, it is just a matter of pushing over the goal line. So 

consider me fresh legs in the fourth quarter to come help join you 

in this process. Hopefully, it is the fourth quarter, finishing it out 

as well. [Laughter.] 

It is not midway through the first, right. 

Let me ask a couple questions here. Mr. Dong, let us talk about 

the Federal real property portfolio and what it is going to take to 

be able to get that data publicly available and how reliable that 

data really is at this point. 

Mr. DONG. From my position at OMB, I saw some of the challenges that we had in the Federal real property portfolio, and I see 

it here today. Mr. Mader has talked about some of the additional 
16 

controls that we put in place to improve the data, but I think what 

is most critical is to actually analyze the data and to use that to 

be able to have conversations with the agencies in terms of what 

is underutilized and what is not utilized, and really force disposition. So really it is going beyond looking at the data to be able to 

analyze and act upon the data, and part of this process is some 

healthy transparency to be able to show exactly what is excess, 

what is underutilized—— 

Senator LANKFORD. Right. Task No. 1 is that we have data, and 

the second one is that we can actually analyze it. Where are we 

on that spectrum at this point of having the data and then being 

able to analyze it and determine whether it is usable? 

Mr. MADER. Senator, we have been working closely with GSA on 

that, because, as you will recall, what was built years ago was pretty much a static database. 

Senator LANKFORD. Right. 

Mr. MADER. And what we are actually doing is moving now to 

actually up-to-date software over the course of the summer. So by 

the end of the summer, we are actually going to have not only an 

improved inventory but a management tool so, as Norm said, what 

agencies are going to be able to do is actually go in and take the 

data and do some analysis and say, what if this property, were 

going to age out or become excess or underutilized? What is that 

inventory then going to look like? What can I do with it? 

So what we are expecting—and it is part of the core tenet of the 

real property plan—is we are expecting people to develop a 5-year, 

forward-looking plan that basically says year over year for 5 years, 

what am I going to do, first, to reduce my real property footprint? 

But second of all, those buildings that are either right out excess 

or underutilized that perhaps should move to excess or move other 

tenants into that, we are going to be able to identify, and we are 

going to be receiving every year that update. So this is a rolling 

5-year plan. 

So I think what we are going to cause to have happen is the kind 

of analysis that has not heretofore been done. 

Senator LANKFORD. Is there an opportunity to be able to have the 

data out there and to have individuals who may be interested in 

a Federal property be able to bid on it, express an interest on it, 

that may be fully utilized at this point, but it may be in a part of 

town that has transitioned pretty rapidly, now it is a heavily commercial area, and suddenly what was an inexpensive Federal property 30 years ago now is a very high-rent property now, and private industries would say if the Federal Government would buy 

that, they would pay us enough that we could relocate, put in a 

newer facility and actually be able to make a profit off of it. 

Mr. MADER. I would like to sort of defer to Norm because he actually, I think, has some good examples of just what you explained, 

Senator, and they are the responsible party for the actual disposal. 

Mr. DONG. We always want to get feedback from the market in 

terms of properties that we have within the Federal Government 

that may not have a lot of utility to Federal agencies but still reflect significant value to the private sector. I will give you a great 

example, and that is the Volpe Research Center up in Cambridge, 

Massachusetts. It is 14 acres in Kendall Square, which is a boom-
17 

ing development environment, and you walk on to that site and it 

is like time stood still, because we have a sprawling campus of 

aging Federal buildings, lot of surface parking. The market has 

said to us this property has significant development potential. 

Through our exchange process, what we are doing is going to the 

development community saying: We do not need all 14 acres on 

this site; we will take a much smaller footprint here and exchange 

that land for construction services to build a new facility for the 

Department of Transportation (DOT) in that city. 

Senator LANKFORD. And how long does that process take? 

Mr. DONG. The process takes a few years. So what we do with 

the exchange process is to really reserve it for those properties that 

we think have the most significant development potential. 

Senator LANKFORD. OK. Mr. Mader, let me ask you a question. 

Which agency is the best and most efficient as disposal of whether 

it is property, whether it is a building or structure or equipment 

or assets, that they have a streamlined process that protects the 

taxpayer and also actually moves property out of excess status? 

Mr. MADER. I think, Senator, there are several. Let me start with 

the Department of Interior. Probably five—— 

Senator LANKFORD. Is that a specific area? Is that the Bureau of 

Land Management (BLM), for instance, and some of their—— 

Mr. MADER. I want to start with departmentwide. They started 

probably about 5 years ago dedicating a portion of their annual 

budget for the disposal of excess property, and as I mentioned in 

my earlier comment, if you have a facility that is now just not usable sitting in the middle of a national park, you really do not want 

to continue to spend O&M money on something that really ought 

to be demolished. 

So they have build across Interior a very detailed plan, across 

their Bureaus where they look at excess property and make those 

decisions year over year. 

In the Department of Agriculture and Forest Service, they are 

one of, I guess, about a dozen agencies that actually has the ability 

to retain some of the savings from the excess that they do. 

The Coast Guard within Homeland Security also has limited 

ability to do retention on some of the proceeds. 

So I think we have examples across the Federal Government of 

things that work. What we actually need to do now is sort of coalesce that and say if we sort of raise it up across the entire government, we can be much more effective, because we have seen these 

agencies demonstrate good progress. 

Senator LANKFORD. If I could just mention a couple things, if I 

remember correctly, Interior, Ag, and Forest Service, they have the 

ability for the administrator of the agency to be able to identify a 

piece of property, work it through the system, do best value for the 

taxpayer, and do not seem to have as laborious of a process as 

going through all the different steps and everything that is there. 

They seem to have a more expedited process in this. 

Mr. MADER. They are still going through all the steps, which 

adds time, but they have a much more disciplined management 

process in place, and what we are trying to do—and since I assumed this position, I meet monthly with the Real Property Council, which are the representatives, all of the land-holding agencies 
18 

across the Federal Government, including defense. And, one of the 

things that I certainly learned coming into this position at OMB, 

when you are trying to sort of move the entire government, I think 

to Senator Carper’s point, it is like turning an aircraft carrier or, 

as I prefer, herding cats. But I do think that we have been successful and have buy-in now from across the Federal Government with 

regard to a single focus on real property, developing these plans, 

and actually achieving results, because without the results, why 

would we waste the time on a plan? 

Senator LANKFORD. Thank you. I would recommend to this Committee, when we look at the legislation coming out of this, that we 

look at some of the other agencies and entities that are efficient in 

the process of disposal, gather some ideas so we are not having to 

reinvent the wheel. But I think some of the answers are already 

out there. We are just not doing a streamlined process for that. 

With that, I thank you. 

Chairman JOHNSON. Thank you, Senator Lankford. Senator 

Heitkamp. 

OPENING STATEMENT OF SENATOR HEITKAMP 

Senator HEITKAMP. Thank you, Mr. Chairman. And as you can 

see, this is an issue of management. This is not an issue of politics. 

It is not an issue of, ‘‘gotcha.’’ We are just trying to figure this out. 

I want to pick up where the Chairman left off, which is it seems 

like we do not really know what we have, and what we do know 

you have categorized, but yet it does not seem like we have—let me 

just move over so I can see you, Mr. Mader. What we do know is 

that we do not know everything. Is that a fair statement? 

Mr. MADER. I think, Senator, we have a better handle in—— 

Senator HEITKAMP. No, I am just saying—if I said today that the 

U.S. Government, OMB, or whatever, GSA, knows exactly where 

every piece of property, real property that the Federal Government 

owns, where it is and how it is being utilized, could you say yes 

to that? 

Mr. MADER. To 100 percent accuracy, no, ma’am. 

Senator HEITKAMP. And so the sense that I get is that without 

having a broad scan, it is very hard to kind of figure out where the 

low-hanging fruit is, where the opportunities are maybe to build a 

structure or build a plan for moving forward. And I think we have 

heard some great ideas just from this panel and from you all, great 

examples of where this can work. But it cannot be, catch as catch 

can. We have to have a structure, and we have to have agencies— 

and I am not here to blame anyone, but we have to have agencies 

that are committed to this goal. 

It is interesting, Mr. Mader, that what you talked about were 

agencies that have an incentive to actually alienate the property 

and move it beyond. I want to just spend what time I have left 

talking about the ability to expand your workforce by engaging in 

public-private partnerships, whether it is with the local realtors, 

whether it is taking a look at who we could hire or what additional 

resources could be brought to bear by the public and by the local 

real estate market to solve these problems. 

Have you thought about—what any corporation would do that 

did not have a workforce, what would they do? They would hire 
19 

real estate people, and they would put it on the market. They 

would do an evaluation. Why don’t we do something like that so 

we could expand your opportunity and your workforce? 

Mr. MADER. Senator, we could not agree with you more. Looking 

at how to partner with other individuals or organizations is something that we have done. I think actually Mr. Dong has some very 

good examples of how GSA has actually leveraged that successfully 

over the last couple years. 

Senator HEITKAMP. So why aren’t we doing it kind of broadly? 

Mr. DONG. If you look at what we are doing within GSA, we rely 

heavily upon the broker community to help us with the disposition 

question as well as with our leasing transactions. So one of the 

properties that we are disposing of this year is the Metro West facility in Baltimore. We are leveraging broker resources to help us 

with the outreach and the marketing on that. So I think you are 

exactly right. We have all these resources at our disposal that we 

really need to embrace and tap into as we look at this question of 

disposition. 

On the larger question of leasing, we rely heavily upon the brokers to help us with the different aspects of those transactions. 

Whether it is pre-award or post-award, we have a new leasing contract that we will be awarding sometime in early 2016 that actually reduces the administrative burden and makes it easier for the 

government to tap into that resources. 

Senator HEITKAMP. Do you think it is fair to say that kind of the 

inability to do as-is transactions limits the ability to alienate property? This idea that things have to come up to code, I mean, 

throughout the environment, we see tons of dilapidated properties 

being sold at a much reduced price, but two good things happen: 

No. 1, they get improved; and, No. 2, they are added back to the 

local property tax rolls. 

And so where within that category can we be a little more creative? 

Mr. DONG. I think there are a number of different challenges 

that we have talked about in terms of the challenges that agencies 

face as they look to move properties off the books. I think what the 

largest one is is that whole notion of retention of proceeds where 

agencies have to incur costs, but they do not have the ability to recoup those cost, so there really has been no economic benefit for 

many agencies to move these properties off the books. So that is 

why I think having some limited retention of proceeds where agencies can recoup their costs will show dramatic results in terms of 

the activity that we see. 

Senator HEITKAMP. And this might be just far-fetched and far 

afield, but as James and I have said, you have two new eyes on 

this issue very committed. But, there is a ton of folks who could 

do walk-throughs and actually evaluate. One of the concerns that 

I have is that if you are an agency head and you have an asset already, chances are you want to hang on to that asset, right? Especially if somebody else is paying the overhead. 

And so what are we doing to actually investigate and inspect 

those facilities? I was thinking, well, you get a bunch of college 

kids in the summer who may be involved in business, and you 

could say, ‘‘Do a walk-through. Here is your ticket. Walk through, 
20 

tell us whether that space is actually being utilized the way the 

agency head or the way the division director is telling us it is being 

utilized.’’ And I think that is another concern I have, that we are 

understating the underutilization of Federal property. 

Mr. DONG. There is a point in our history where GSA actually 

used to do exactly that, and that function was established by Executive Order (EO). It really charged GSA with going into those Federal properties and kind of walking the floors and really kind of 

coming up with an independent assessment of how that facility was 

being used. 

Looking at it a different way, coming back to the data in the Federal Real Property Portfolio and the agency Reduce the Footprint 

plans that will be submitted this summer, we see that as an opportunity to go through the list one by one of assets that have been 

labeled as underutilized or unutilized and really force more meaningful disposition on what our plan is for each of those assets. 

Senator HEITKAMP. With my little remaining time, Senator 

Lankford has suggested taking a look at agencies. I also think it 

would be interesting to take a look at States, because States obviously also have real property. There may be a management structure that they have that actually may demonstrate or look at best 

practices, and so it would be interesting to get any feedback, maybe 

if I have a chance to ask additional questions, to get additional 

feedback on what State you think as a governmental entity is actually managing their real property in a way that is best practices. 

Thank you, Mr. Chairman. 

Chairman JOHNSON. Thank you, Senator Heitkamp. 

I do not want to let this moment pass. Mr. Dong, you said the 

GSA used to do that. Why did they stop? What happened? Is somebody else doing it now instead? 

Mr. DONG. There have been a series of Executive Orders over 

time that really speak to this issue, and the most recent Executive 

Order does not cover this whole function that we had described. 

But previous Executive Orders did, in fact, spell that out. 

Chairman JOHNSON. So is there something preventing you from 

doing those walk-throughs, assessing the property? I mean, anybody can quickly answer this? Again, this is important because 

that is going to be the baseline for getting the information that we 

are going to need. 

Mr. DONG. We see ourselves as supporting OMB on all things 

real property and really kind of being the operational extension of 

the Office of Management and Budget to support OMB’s real property priorities. And we would very much want to partner with 

OMB to really make sure that we are leaning forward and we are 

being assertive on this question to make sure that if we have properties that are labeled as underutilized or unutilized, we are doing 

the proper due diligence to move them off the books. 

Chairman JOHNSON. Again, you stopped walking through properties. Mr. Mader, is OMB doing it? Mr. Wise, do you know who 

is doing it? Or is it not being done? 

Mr. MADER. I was not aware that we had actually stopped doing 

it. 

Chairman JOHNSON. OK. Well, we have to start that again. 

It is now Senator Ayotte. 
21 

OPENING STATEMENT OF SENATOR AYOTTE 

Senator AYOTTE. Thank you, Chairman. 

Just to follow-up on the Chairman’s question, as I understand it, 

Mr. Dong, you said there was an Executive Order that had prompted this sort of walking through the properties to do the sort of personal understanding and inventory and that the Executive Orders 

post that changed. Is that true? 

Mr. DONG. Yes, the Executive Order—they changed over time in 

terms of what the focus was for this function, and the most—— 

Senator AYOTTE. So what is the focus now? 

Mr. DONG. Things like the Federal Real Property Council and 

having that manage the government-wide program. 

Senator AYOTTE. So if it was a reflection of an Executive Order, 

I mean, do you need legislation to say you should do this? Because 

we can do that in this Committee. It just strikes me as such a common-sense step that even if you did not have an Executive Order 

that this would be something that would be a valuable tool in 

terms of trying to tackle the properties that are underutilized and 

obviously saving money for the Federal Government. So I think 

that is what the Chairman was trying to get at. Do you need something from us, do you need something from the President, to undertake what you previously did that seemed to be a good tool? 

Mr. MADER. Senator, I do not think we need legislation to do 

what the Executive Branch could do. 

Senator AYOTTE. So will you commit to doing that for us? 

Mr. MADER. I will commit that—when we get the plans in July, 

we are going to have the draft plans, and then I think we are going 

to be looking at an inventory now of potential disposals that heretofore we did not have. So, if this is something that will help us 

move that disposal process forward, we will consult with GSA and 

see if it makes sense to reinstitute that policy. 

Senator AYOTTE. OK, great. So as I understand the testimony 

that we have received today, the goal for this year is a reduction 

of space by 3 million square feet. Is that right? 

Mr. DONG. We have properties in our disposition pipeline that 

are about 3 million square feet. That is our goal to reduce for this 

fiscal year, and our goal is to expand upon that for next year. 

Senator AYOTTE. Right. Because as I look at this, just thinking 

about the goal of 3 million square feet, I understand the portfolio 

is currently around 377 million square feet. Is that true? 

Mr. DONG. That is the portfolio that GSA manages. 

Senator AYOTTE. Yes. So that means that we are looking at this 

year a reduction of less than one percent. It is actually 0.007 percent. So I know this is an improvement over past years, but aren’t 

we aiming too low? 

Mr. DONG. I would say that the numbers are fairly modest, but 

I think everyone recognizes that we need to be far more aggressive 

in terms of looking at the assets in our portfolio, really asking that 

question of highest and best use, and whether it is through disposition or exchange or outlease, being far more aggressive in terms of 

taking those properties that do not have much use to the Federal 

Government and leveraging the value of that, working with the private sector. 
22 

Senator AYOTTE. What do you think has been the biggest barrier? Has it been a cultural barrier that, for example, people work 

in a certain building, so there is sort of a reticence to want to eliminate it? Or has it been us? What would you describe as the biggest 

barrier that we cannot move forward on better culling out what we 

really need versus things we hold that we do not need? 

Mr. MADER. I think, Senator, some of it is cultural, some of it is, 

‘‘I am used to commuting to this particular building, and now you 

are going to disrupt my commuting pattern.’’ But I think when 

you—and I talk to heads of agencies, Deputy Secretaries, and they 

look at their mission needs, and they look at their overhead costs, 

and they say, ‘‘I actually need to reduce my overhead and redirect 

those dollars into my mission.’’ 

I am seeing over the last couple years much more interest on the 

part of executives in various agencies to take on this issue. OMB 

2 years ago actually developed a set of benchmarks that we give 

to each of the departments now that basically says here is how 

many square feet you have, here is your rent, average rent per 

square foot, here is your average occupancy per square foot, and 

here is your O&M cost. And not only do we do it at the department 

level, but we also break it down by their bureaus so they are able 

to look—let us say within Commerce, they could look at their 13 

bureaus and start asking a lot of hard questions among themselves, why does this particular bureau have this kind of cost structure and this one does not? Are their missions that far apart? 

So I am seeing much more attention to this issue than I have 

ever seen before. 

Senator AYOTTE. Could you help us understand, Mr. Mader, what 

agencies have—or perhaps Mr. Dong, depending on who is the most 

appropriate one to answer. But what agencies have the most excess 

property? And what agencies are really standing out as someone 

we can look to, an agency that is doing this well in terms of being 

aggressive on disposing property that it does not need? 

Mr. DONG. We can provide you with additional information in 

terms of the volume of excess properties and those agencies that 

have the highest volumes. You asked the question about which 

agencies are doing well, and I wanted to come back to two examples. One is the Coast Guard. The other is the Forest Service. If 

we look at both of those agencies, they have some ability to retain 

the proceeds, which means that they are able to recoup the upfront costs of identifying excess properties and moving them off the 

rolls. And we think that is critical because there has to be some 

economic incentive for agencies to move these off the books, and 

what you are seeing is, with the Coast Guard and with the Forest 

Service, far more significant activity among those two agencies 

compared to other agencies in the Federal Government. 

Senator AYOTTE. It makes sense. If they can invest in a new cutter based on property that they do not otherwise need, then that 

certainly provides an incentive to get to their core mission. And if 

we continue to do that and obviously take a portion of it and apply 

it to helping the fiscal state of the country overall, but then allow 

them to keep a portion of it, then it seems like a win-win on two 

fronts. And then we get the savings going forward as well, of 

course. 
23 

Mr. MADER. Senator, I think the other challenge besides sort of 

the cultural issue and the management attention actually is the resources that GSA, as Mr. Dong testify—in the current fiscal year, 

they had, I guess, $70 million? 

Mr. DONG. Consolidation, yes. 

Mr. MADER. For consolidations. In the President’s budget in 2016, we asked for $200 million. So obviously we can do a lot more 

with $200 million than we can do with $70 million, and some of 

the conversations that are going on now in 2016 actually would 

make that 70 go to zero, which would, quite candidly, sort of grind 

the program to a halt. 

Senator AYOTTE. I appreciate that, and also not to relitigate 

some of the issues that GSA has had, I think that certainly we 

want to make sure that you have the resources to do this, but that 

GSA is obviously maximizing the use of the resources it does have. 

So thank you all for being here. 

Chairman JOHNSON. Thank you, Senator Ayotte. 

Again, if we actually had the information in terms of how much 

property is available for disposal, what the value of that would be, 

then we can actually find out, if we dispose of it, that would be the 

amount of money coming in, and we could reallocate it that way. 

But, again, we do not have the information. 

Also, Senator Ayotte, it is worse than what you were talking 

about. In earlier testimony you might have missed, there is about 

2.5 billion square feet on Federal property. The 377 million is just 

with the GSA. So three divided by 2,500 million is, literally onetenth of one percent is what we are disposing of. So it is a pretty 

modest—yes, it is a little bit, teeny-weeny. Senator Portman. 

OPENING STATEMENT OF SENATOR PORTMAN 

Senator PORTMAN. Thank you, Mr. Chairman. I appreciate you 

all being here today, and, David, is it good to see you. Thanks for 

your service when I was at OMB and your continued focus on this 

issue. I think you need help, as you know, and I think you need 

legislation. And I think it is appropriate you are here today talking 

about what you are doing. That is great. But I think you are constrained by not having the legislative tools that you need. So I 

guess I have just answered one of the questions I was going to ask 

you. I should back up. 

First of all, we have heard today about the amount of excess 

property, and it is significant. There are different numbers out 

there, but taxpayers are amazed by the fact that the Federal Government, the biggest landowner in America, still has about 78,000 

Federal properties that are considered to be vacant or underutilized, costing taxpayers about $1.6 billion every year for maintenance. And, understandably, they want us to get at this. 

And so I appreciate again what the Administration is trying to 

do within the constraints of the law, but I think there is a lot more 

that can be done. GAO’s high-risk list includes real property management. I know GAO is here today, and I am sure, David Wise, 

that you have talked about this. But they focus on a few things: 

one, the continued excess/underutilized vacant properties, heavy reliance on leasing where ownership would be more cost-effective, 

and then the challenges in protecting facilities, unreliable real 
24 

property data, and the lengthy and costly disposal process for 

unneeded property. 

I was a cosponsor of the legislation in 2012 on this and an original cosponsor in 2013 with Senator Carper, who has since left us 

here at the Committee, but I know he has a strong interest in this 

still. And what we tried to do in that legislation was, quite frankly, 

to provide for the kind of legislative help that you need. 

GAO has said in its most recent look at the National Strategy 

we have talked about today, they wonder whether it gets at the 

core challenges of disposing of excess property, the local interests, 

such as the McKinney-Vento Act, historical and environmental 

challenges. That is what we tried to get at with our legislation, and 

so I do think that, as your National Strategy has said, ‘‘Targeted 

legislative relief for the current governmentwide disposal process 

could be developed and implemented to assess . . . benefits to real 

property management.’’ Relief could include ‘‘allowing disposal 

agencies to recapture their disposal costs and some aspects of the 

public benefit conveyance process.’’ 

So these are the issues that I think need to be addressed with 

legislation. So if you are a Federal agency, you are told, ‘‘Focus on 

this disposal. And, by the way, you are going to get no benefit out 

of it. It is going to go to Treasury.’’ And I think there is a disincentive there, and I think we need to restructure that, and we need 

to deal, again, with some of these barriers that GAO has identified 

and that you all have identified, David. 

So I guess my question to you would be: Do you agree that we 

need Federal legislation here? And, specifically, what would be the 

three or four things that you would look to for Federal legislation 

to help you to accomplish what you are trying to do? 

Mr. MADER. Senator, we would agree wholeheartedly, and certainly I think I speak for Mr. Dong. As you know, the Administration for the last several years has been proposing legislation, the 

Civilian Property Realignment Act, which would basically allow us 

to create a process that would sort of look at the entire government 

portfolio, identify those properties, regardless of Federal agency, 

put them together, put them for an up-or-down vote, dispose of 

them, take a portion of those dollars that we get from the disposal, 

and then plow them back in. And, I know there are other legislative proposals that have similar kinds of approaches, and I 

think—— 

Senator PORTMAN. Just for a second, David, our legislation had 

80 percent, so it was 80 percent of net proceeds of property sales 

deposited in the Treasury for deficit reduction and not more than 

18 percent allocated to the Federal agency. Is that about right? 

Mr. MADER. I mean, I think, Senator, I think there is a limit to 

how much we can do in any given year. I think we have the responsibility to give some back to the general fund. Whether it is 80/20 

or 70/30, I think we could sort of look at what makes sense year 

over year, because I do think at a point in time we just would be 

out of capacity to handle this kind of volume. But retain savings 

to plow back into a fund is critical. You mentioned streamlining the 

public conveyance process. That is important. We have talked 

about that earlier today in the hearing. It takes an inordinate 

amount of time, and when you look at the 10-year results, we have 
25 

not actually moved that many properties over to homeless use. So 

I think those two elements are critical to legislation going forward. 

Senator PORTMAN. We do have a number of OMB changes in the 

legislation, as you know, including having OMB produce an annual 

scorecard tracking the progress of each agency in reaching its property savings targets. Do you think that is appropriate? 

Mr. MADER. Oh, I do, absolutely. As I mentioned, we actually 

started last year an annual process. In fact, we are in the midst 

of the process this summer going out. We sit with the Deputy Director for Mortgage market, and others from OMB, sit with each 

of the Deputy Secretaries and review various both mission programs as well as support programs. Real property is always on the 

agenda with regard to how well they are doing in reducing the footprint, and now as we move to the new strategy, actually reducing 

the footprint. 

Senator PORTMAN. Well, having an expedited process for disposal 

of the properties is certainly one of the goals of the legislation. So 

we have not reintroduced the bill, as you know, partly because we 

are waiting to see how the National Strategy unfolds. But we will 

be following up with some questions for the record to try to get you 

guys to give us your input. We would like to work with you. We 

would like to work with Senator Carper. Again, there were a few 

different approaches. The House passed an approach in 2012 that 

Senator Brown took up, and then Senator Carper and I had a different approach that did not have a Defense Base Closure and Realignment Commission (BRAC)-like system in place. But we are interested in moving forward given the new situation, and I think 

you have found, frankly, what your limits are without having legislative help. And we need to codify somewhat what is going on I 

think for the purposes of the future, but also to provide you better 

tools to be able to complete the mission that you have started to 

undertake. So thank you all for your testimony. 

Thank you, Mr. Chairman. 

Chairman JOHNSON. Thank you, Senator Portman. 

There is no doubt about it, like Senator Heitkamp was saying. 

This is not a partisan issue. This is a management issue. And I 

think there are a number of things we can do. My suggestion always is take a step-by-step approach. Let us take the little elements. Maybe we cannot do some big comprehensive reform, but let 

us take a look at the very common-sense things we have to do. Let 

us start passing that. Let us try and get things passed through this 

Committee and reported out unanimously, and let us start making 

some improvements here. 

So, again, I just want to thank all the witnesses for the time you 

took for your testimony. We will work very closely with you to provide those types of reforms, report out a piece of legislation that 

will actually work. And, with that, I think the hearing record will 

remain open for 15 days—— 

Senator CARPER. Mr. Chairman, are we done? 

Chairman JOHNSON. Yes, I was going to close it out. 

Senator CARPER. Can I have another round? 

Chairman JOHNSON. Sure. 

Senator CARPER. Thank you. 

Chairman JOHNSON. We do have votes. 
26 

Senator CARPER. Thank you for letting me have a second round, 

Mr. Chairman. 

The Chairman likes to talk sometimes in terms of like a 30-year 

horizon which I think is actually very helpful. We used to talk 

around here about one-year horizons, then 5, now 10. He talks 

about 30-year horizons. And one of the projects, real property 

projects that I think of in terms of a 30-year horizon is the St. Elizabeths campus for the Department of Homeland Security. Could 

one of you speak to that? I do not know if it would be Mr. Mader 

or Mr. Dong. Can one of you just speak to that, please, and tell us 

how that might make sense? I would say as a preface, I have 

talked, I think, to every previous Secretary of Homeland Security, 

and I came here not thinking St. E’s made a whole lot of sense. 

I said, ‘‘Why would we do that?’’ Every one of them said to me, ‘‘No, 

it does make sense. And it makes dollars and cents, and here is 

why.’’ But just talk to us about it along a horizon of 30 years. Why 

does it make sense? 

Mr. DONG. Sure. If you look at where DHS is right now, they are 

in over 45 different leased locations scattered across the National 

Capital Region, and you can think about what we are paying in 

terms of annual lease payments. 

As we have done the math and as we have put together an ag- gressive plan, we are seeing that we can save over $4 billion over 

the next 30 years by moving out of all of those expensive leases 

into a single owned facility on the St. Elizabeths campus. 

Senator CARPER. Explain how that happens. Four billion, that is 

a lot of money. 

Mr. DONG. Yes, and, again, you think about the annual costs 

that we are spending in terms of leases in dozens and dozens of 

leases across the National Capital Region, and what we are seeing 

is that by investing the money up front to be able to build a consolidated facility for DHS at St. Elizabeths, we are going to be able 

to save a significant amount of money in terms of lease avoidance 

costs. 

Senator CARPER. All right. Mr. Mader, do you want to add anything to that? 

Mr. MADER. What is interesting we agree with what David Wise 

has testified. We do think that, we have to many facilities, leased 

facilities. We would like to consolidate, especially in major cities. 

But, again, and I do not want to sound like a broken record—we 

have a Federal Building Fund that was established, I do not know, 

50 years ago for the purpose of building and maintaining, and yet, 

we do not seem able to leverage what we already have in an existing flexibility. 

Senator CARPER. OK. In the budget resolution, we give the Appropriations Subcommittees direction and basically say this is how 

much money you are going to have to work with. There is an Appropriations Subcommittee in the Senate led by Senators Boozman 

and Coons, and I think it is Federal Financial Management—what 

is it? It includes GSA. There is a name to it, but I cannot remember it. I just remember the leadership. I met with Chairman 

Boozman, and he and Senator Coons, they have a tough job given 

the allocation that they have been given from the Budget Committee. 
27 

If, at the end of the day, there is some additional money that can 

be directed—and a final compromise on the budget, can be directed 

to that Subcommittee for investments, what are some areas that 

should be prioritized, please? 

Mr. DONG. We would be happy to work with the Committee in 

terms of following up to identify those priorities, but I think it 

comes back to the larger point that you are making in terms of the 

importance of investing in our Federal buildings portfolio and recognizing that this overdependence on leasing that we have, because 

we are not investing in our Federal buildings portfolio, is costing 

us money. 

Senator CARPER. OK. Mr. Mader, do you want to add anything 

to that? 

Mr. MADER. No. I concur. 

Senator CARPER. OK. The last thing I will ask is this—I asked 

this question earlier, and I want to ask it one more time for our 

takeaway. I think sometimes repetition is good. Tell us very directly what we need to do, what we on this Committee and we in 

the Congress need to do to actually turn the course of this aircraft 

carrier, turn this carrier more quickly. 

Mr. MADER. I think it comes back to the legislative actions that 

we have talked about, whether it is public conveyance, McKinneyVento, retained savings, maybe some kind of commission structure. 

I think that is key, and I also think you having hearings every year 

and holding us accountable for the results based on the actions and 

the legislation that you pass. 

Senator CARPER. Mr. Dong. By the way, your name, I am intrigued by your name. Are you of Vietnamese descent? 

Mr. DONG. No. Actually, I am half Chinese and half Danish. 

Senator CARPER. Well, that is an interesting combination. OK. 

Same question—not the same one, not about your ancestry, but, 

again, just very directly: What do we need to do? 

Mr. DONG. I think oversight is important in terms of holding the 

administration accountable for doing what we are saying we are 

planning to do. We have talked about some of the challenges and 

the obstacles that we face in the disposition process, and right now 

we are working hard and using a lot of brute force and elbow 

grease to move properties off the books. The whole notion of retention of proceeds, as I explained before, I think is critical. We are 

not asking agencies to make a windfall, but to at least allow them 

to recoup the costs of moving properties off the books. 

Senator CARPER. OK. Thanks. 

And, briefly, Mr. Wise, a closing word. What do we need to do? 

Mr. WISE. I pretty much agree with what Dave and Norm said 

in the sense that there are certain actions the Administration can 

take, but there are some things outside their ability to control. And 

where the Congress can be helpful and be a positive influence is 

helping in the disposal process and the mitigation or the elimination possibly of the competing stakeholder interests that have a 

large influence on the disposal process. And that is where I think 

the legislation can really be a driving force to helping to expedite 

the disposal process and help rationalize the Federal portfolio. 

Senator CARPER. A great note to end on. 
28 

Mr. Chairman, it was a good hearing, and we have, I think, a 

pretty clear path here, and let us see if we cannot proceed. Thank 

you. 

Chairman JOHNSON. Well, thank you, Senator Carper. Again, I 

am certainly committed to working with you and the gentlemen 

here, our witnesses, to bring some reform to this issue. 

Again, I want to thank the witnesses. The hearing record will remain open for 15 days, until July 1 at 5 p.m., for the submission 

of statements and questions for the record. This hearing is adjourned. 

[Whereupon, at 11:28 a.m., the Committee was adjourned.] 
(29) 

A P P E N D I X 
30 

Statement of Ranking Member Thomas R. Carper 

"Federal Real Property Reform: How Cutting Red Tape and Better Management 

Could Achieve Billions in Savings" 

June 16,2015 

As prepared for delivery: 

Good morning. I want to thank Chairman Johnson for holding this important hearing today. I 

know that the Chairman and many of the new members of this Committee have shown great 

interest in finding ways to improve federal property management, a topic which has been a 

priority of this Committee for over a decade now. 

My strong interest in this issue dates back to 2006 when Senator Tom Coburn and I went to 

Chicago to hold a hearing across from a massive, empty Postal Service building that the agency 

was spending millions to maintain and secure. We learned at our hearing that the Postal Service 

was unfortunately not alone when it came to wasting money on property it didn't need. 

Property management has been on the Government Accountability Office (GAO) High Risk List 

for the last twelve years. GAO has found repeatedly during that time that the federal government 

lacks consistently reliable data to account for what it owns or leases. 

Agencies often don't know the condition their assets are in or how the assets are being used. And 

all too often, as was the case with the Postal Service in Chicago, agencies are spending money to 

holding onto buildings and other property they just don't need. So, I've worked with Dr. Coburn 

and others over the years to find ways to find ways to get better results for less money in the way 

we manage federal property. 

Unfortunately, legislative efforts to achieve this goal have always hit a roadblock. But our calling 

attention to this issue and providing ongoing oversight has ultimately paid dividends by 

encouraging some very good work by both the Bush and Obama Administrations. 

Just this past spring, the President announced two new property management initiatives, the 

National Strategy for Real Property and the Reduce the Footprint initiative. The National 

Strategy requires agencies to freeze the growth in their inventory and take steps to reduce its 

size. Further, through the Reduce the Footprint initiative, agencies are now mandated to reduce, 

rather than freeze, their footprint starting in fiscal year 2016. 

As Mr. Mader will note in his testimony, this effort has shown some success as agencies have 

reduced the size of their portfolios over the last two years, letting go of 21 million square feet of 

office and warehouse space. I look forward to learning more about these successes, as well as 

about what might be coming next. 

I am eager to hear from our witnesses today as we work together to critically analyze what 

Congress and the Administration can do in the days ahead to find even smarter ways to approach 

federal real property reform in our never-ending drive to achieve better results for less money. 

### 
31 

Embargoed Until Delivered 

EXECUTIVE OFFICE OF THE PRESIDENT 

OFFICEOFMANAGEMENTANDBUDGET 

www.whitehouse.gov/omb 

Testimony of David Mader 

Controller, Office of Management and Budget 

before the 

Senate Committee on Homeland Security aud 

Governmental Affairs 

June 16, 2015 

Thank you, Chairman Johnson, Ranking Member Carper, and Members of the 

Committee, for the invitation to testifY and update the Committee on recent and ongoing initiatives to 

improve Federal real property management capability and the overall efficiency of the Federal real 

property portfolio. 

Today, I would like to update you on the status of the initiatives that I outlined when I 

testified last July in front of the House Subcommittee on Government Operations regarding the 

Administration's efforts to improve the management of the Government's real property portfolio. 

Over the last eleven months, OMB has continued to implement actions that will dramatically 

improve and fundamentally transform the way the Federal Government manages its real property 

portfolio. Our vision for transforming real property management includes four core components. 

First, develop and implement a strategic framework guiding agencies' management of their real 

property portfolios over the next five years. Second, continue our work developing and 

implementing Government-wide performance metrics to identifY efficiency opportunities at the 

agency level, and to assess the performance of individual agencies. Third, develop new 

management tools currently known as the Federal Real Property Profile (FRPP). These tools will 

enhance agencies' capability to analyze their portfolio data and identifY opportunities to rightsize and optimize their portfolios for effective mission delivery and cost efficiency. These new 

management tools will also enable agencies to improve the quality and usefulness of their FRPP 

data. And finally, fourth, and importantly, we believe limited modification to existing statutes 

can increase the pace and number of property disposals and decrease the amount of resources 

expended on maintaining excess and underutilized properties. 

The President's FY 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 FY 

2015 enacted level in support of critical construction and renovation projects as well as 

opportunities for consolidation in the Federal Buildings inventory. 

I'm happy to report that we have completed or made significant progress on three of the 

four components over the last eight months. For example, OMB issued the National Real Property 

Strategy {National Strategy) on March 25, 2015. The National Strategy builds on past actions and 

results to define the strategic framework agencies' will use to manage their portfolios for 

efficiency gains. The framework will freeze growth in the inventory, measure performance and 

identifY opportunities to improve efficiency and data quality to support data driven decisionmaking, and ultimately reduce the size of the inventory by prioritizing actions to consolidate, colocate, and dispose of properties. These three steps provide the context within which all agencies 
32 

Embargoed Until Delivered 

will manage their real property. Over time, the framework will improve the utilization of 

Government owned buildings, lower the number of excess and underutilized properties, and 

improve the cost effectiveness and efficiency of the portfolio. 

To implement the National Strategy, OMB issued new policy that provides a robust set of 

agency specific performance measures. The "Reduce the Footprint" (RTF) policy, issued on 

March 25, 2015, requires agencies to implement a five year planning process to reduce their real 

property portfolios. The RTF prioritizes the disposal of unneeded and inefficient properties by 

requiring agencies to set annual square foot disposal targets for all building types. The RTF 

reduction targets function as agency performance measures; when combined with the FY2014 

benchmarking metrics developed under the President's Management Agenda, the Government will 

be armed with accountable performance measures to drive portfolio-wide efficiency and property 

disposals. Also, the RTF promotes efficiency in the acquisition of owned and leased space by 

requiring agencies to issue an office space design standard by February 2016, and to use this 

standard to design all new office space for efficiency improvements. This requirement will 

enhance portfolio efficiency as properties are disposed and replaced. 

The third action required to transform management of Federal real property is the 

development of new management tools within the FRPP and improvement of FRPP data quality. 

We have made significant progress in creating the real property management tools I discussed in 

my July testimony. OMB has worked with the General Service Administration (GSA) and the 

Federal Real Property Council to identifY tools that support data driven decision-making. For 

example, the new tools will provide detailed data on properties' annual cost, location, size, and 

lease expiration, among other data elements, in a structured format that fully supports the ability of 

agency management teams to identifY efficiency opportunities and to implement data driven 

decision-making. When fully implemented in the fourth quarter ofFY2015, the system will 

provide agencies with greater management capability and insight into the efficiency and cost 

opportunities their portfolios present over the next five years. The new system will leverage 

improvements to the GSA's occupancy agreement (OA) database, which in FY2016 will fully 

identifY succeeding OAs, expiring OAs, and other relevant data to enable agencies to track the size 

and location of their footprint more easily. 

In developing all three of these actions we enjoyed open and fruitful discussion with the 

leadership and staff of the Government Accountability Office (GAO). We appreciate GAO's 

continued dialogue and focus on real property and its willingness to collaborate as we strive to 

meet our mutual goal of removing the high risk designation from the Federal real property 

program. In fact in the most recent GAO High Risk report they acknowledge the increased activity 

and leadership by OMB in this area. 

The last component of our vision potential modification to existing statutes - could 

increase the pace and number of properties disposed through sale, demolition, and public benefit 

conveyance. These modifications could include, but are not limited to, agency retention of some 

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 aspects of 

the public benefit conveyance process. Such changes could provide an important boost to 

agencies' disposal programs and achieve improved results for the taxpayer. We appreciate the 

opportunity to work with this Congress on legislative modifications that support increased 

2 
33 

Embargoed Until Delivered 

property disposal. 

The first three components of our vision will be implemented by the end ofFY2015. We 

believe these actions will significantly improve the management of real property and deliver 

efficiency gains over the next five years. The real property program has achieved results in 

FY2014, and we will continue to build upon this achievement. For example, Government-wide 

disposal of all domestic building types totaled 7,300 buildings and 47 million square feet of space 

in FY2014. These disposals reduced annual operation and maintenance costs by approximately 

$17 million. We also reduced the Freeze the Footprint (FTF) baseline by 11.2 million square feet 

in FY2014 on an agency by agency basis. This results builds upon the 10.2 million FTF square 

feet reduction we achieved in FY2013.So in two years we eliminated 21 million square feet of 

office and warehouse space. 

I need to be clear on the results that we have achieved under the Freeze the Footprint (FTF) 

policy during the last two years. The policy was designed to freeze the size of agency portfolios 

by setting a baseline with FY2012 data. We have been pleasantly surprised to see that many 

agencies reduced the size of their portfolios over the last two years rather than simply maintaining 

them at FY2012 levels. On an agency by agency basis, as opposed to a Government-wide basis, 

the total baseline has decreased from 730.1 million square feet in FY2012 to 708.7 million square 

feet at the end ofFY20 14. These are significant reductions and they reduce the amount of funds 

expended to maintain the portfolio. 

The FTF policy has been a significant step forward for the Government's management 

capability. The policy required agencies to manage to set portfolio baselines, required disposals of 

existing property to support new acquisitions, and required agencies to freeze their real property 

footprint by 2015. Overall, the FTF policy has provided value to the Federal Government's 

management of real property. In my July testimony, I stated that we would estimate the cost 

reduction to the Government achieved through the freeze the footprint requirement. We have 

examined options for obtaining the cost reduction, including cost modeling, and have concluded 

the most robust and accurate method to obtain cost reduction is the collection of actual agency 

costs from individual projects. Beginning in FY 2016 and continuing in out-years, agencies will 

be required to report actual cost data based upon guidance developed by OMB and GSA in 

collaboration with the CFO Act agencies. It is important to note that real property projects require 

investment, and that cost reduction equals initial investment after a period of years. The GSA 

consolidation program, for example, requires cost reduction to equal initial investment no later 

than seven years after initial investment. 

The real property program will also benefit from the fundamental changes we are making 

to the annual agency management reviews OMB performs. OMB senior staff annually conduct 

data-driven management reviews with agency leadership under the auspices of the Government 

Performance and Results Modernization Act of2010, the PortfolioStat information technology 

review, and the benchmarking metric review initiated in FY2014 under the President's 

Management Agenda. These management reviews provide discussion to validate agency priorities, 

identify opportunities for performance improvement, and discuss agencies' strategies for 

improving their overall performance. Ultimately, these reviews provide a mechanism to bring 

together the key people, resources, and data analysis needed to drive progress. 

3 
34 

Embargoed Until Delivered 

We have built upon the successes of the annual management reviews by creating a 

comprehensive "FedStat" process to fully integrate the review of agency management processes 

and resource levels. This process will improve the operational efficiency and cost effectiveness of 

agency management functions by using data analysis to drive performance based decision-making 

and provides OMB and agencies a forum to conduct a comprehensive and structured annual 

discussion on the long-term strategic challenges that each agency confronts to more fully and 

effectively meet those challenges. This discussion provides value to all agencies' real property 

programs beginning now. 

Our progress since last July represents meaningful improvement to the Government's real 

property management capability. We expect additional, and significant, improvement as the 

National Strategy, Reduce the Footprint policy, enhanced FRPP management capability, and the 

Strategic Review process are fully implemented over the course ofFY 2015. With the 

acknowledgement that there is a significant amount of work ahead to improve real property 

management, we are confident our strategy will yield results for the taxpayer. I appreciate the 

attention this Committee dedicates to the improvement of Federal real property management, and 

I remain committed to achieving our mutual objective of a more effective and efficient real 

property program. 

I must stress that in order for the Government to reduce its footprint, we require funding to 

make the necessary reconfigurations and relocations that will result in cost avoidance in future 

budget years. While we have made good progress, significant opportunities remain. One 

significant challenge has been the historically low levels of funding appropriated to the Federal 

Buildings Fund. The President's FY 2016 Budget restores GSA's authority to fully use incoming 

rent funds to construct new facilities such as the consolidated DHS HQ as well as maintain 

existing GSA Federal buildings that need major renovations and basic repairs and renovations. The 

GSA is leading the Federal effort to both invest in Federal facilities and consolidate space to 

reduce costs and optimize efficiency, saving tens of millions in annual lease costs. It is important 

to note, recent funding levels for GSA and other Federal landholding agencies have led to both 

facility deterioration as well as missed opportunities to consolidate and reduce operating costs. 

We look forward to working with the Congress on legislation that will enable us to make 

even greater progress improving the efficiency of the Government-wide portfolio and accelerating 

the pace of property disposals over the next few years. 

Thank you for the opportunity to testify today on this important topic. I look forward to 

answering your questions. 

4 
35 

STATEMENT OF 

MR. NORMAN DONG 

COMMISSIONER, PUBLIC BUILDINGS SERVICE 

U.S. GENERAL SERVICES ADMINISTRATION 

BEFORE THE U.S. SENATE COMMITTEE ON 

HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

June 16, 2016 

Good morning Chairman Johnson, Ranking Member Carper, and members of the Committee. 

My name is Norman Dong, and I am the Commissioner of the U.S. General Services 

Administration's (GSA) Public Buildings Service. Thank you for inviting me to this hearing on 

federal real property reform. 

GSA's mission is to deliver the best value in real estate, acquisition, and technology services 

to government and the American people. To meet this mission, GSA is working with Federal 

agencies to improve space utilization, reduce real estate costs, and deliver space that allows 

our partner Federal agencies to better achieve their missions. Additionally, we are working 

with the Office of Management and Budget (OMB) and the Federal Real Property Council 

(FRPC) to improve the Federal government's inventory system of real property, and 

disposing of unneeded assets and identifying opportunities to better use underperforming 

properties. 

GSA manages one of the largest and most diversified public real estate organizations in the 

world. Its portfolio consists of 376.9 million rentable square feet (RSF) in 8,721 active assets 

across the United States, in all 50 states, six U.S. territories, and the District of Columbia 

(DC). By RSF, the owned inventory constitutes 49 percent of the portfolio and the leased 

inventory is 51 percent of the totaL 

The goal of GSA's real estate strategy is meeting the real property requirements of our 

Federal tenants at the lowest cost to the taxpayer. By analyzing long-term Federal 

requirements and local market dynamics across the country, we are identifying Federallyowned buildings for long-term investment, as well as buildings that may have a higher and 

better use outside of the Federal government through disposal, exchange, or outlease. 
36 

The bottom line is we are working to spend less on real estate so the government can devote 

more of the limited dollars on mission critical activities to serve the American people. 

To accomplish this goal, GSA is focusing on five key priorities: 

• First, GSA is working closely with Federal agencies to consolidate space and reduce 

the square footage per employee. 

• Second, GSA is reforming our approach to leasing to save time and money. 

• Third, GSA is aggressively disposing of unneeded assets. 

• Fourth, GSA is leveraging exchange and out-leasing authorities to harness the value 

of our federal assets. 

• Finally, GSA is supporting OMB in implementation of the Administration's National 

Strategy for the Efficient Use of Real Property to improve government-wide federal 

property management. 

Partnering with Federal Agencies to Reduce the Federal Footprint and Save Taxpayer 

Money 

At GSA, we recognize that excess spending on real property comes at the expense of more 

mission critical activities. To help federal agencies identify opportunities to save money 

through consolidation and space reduction, GSA actively engages with agencies through 

upfront planning; modernization of workspaces; innovative solutions for fit-out, technology, 

and mobility; and rightsizing their portfolios. Beyond saving money, these space-saving 

solutions also advance agency mission by creating more efficient workspaces that encourage 

collaboration and increase productivity. 

These efforts have paid off with a number of successes that have helped reduce the 

government's long-term real estate costs. 

In Fiscal Year 2014, Congress provided $70 million for GSA consolidation projects. Using 

these funds, GSA is executing 20 projects in 10 states across the country that will reduce the 

Federal footprint by 571,000 square feet and reduce the government's leasing costs by $40 

million annually. Congress again provided $70 million for consolidation projects in FY2015, 

and GSA is currently pursuing eight projects with a total investment of $38 million that will 

allow the government to avoid $8.7 million in future annual leasing costs and reduce the 

Federal footprint by 247,899 square feet. We anticipate identifying additional projects in the 

coming weeks which will reduce future annual lease payments and square footage. In Fiscal 

Year 2016, the Administration is requesting an increase to $200 million for consolidation 

Page 2 of6 
37 

projects, based on the positive return on investment these projects have generated in 

FY2014 and FY2015. 

An example demonstrates how effective these projects have been. In Minneapolis, GSA 

partnered with the Department of Housing and Urban Development to reconfigure the 

Minneapolis Federal Building. With an investment of $1.7 million, HUD was able to move out 

of leased space, saving the Federal government $700,000 in annual lease costs and 

reducing the footprint by over 9,000 square feet. 

Reforming our Approach to Leasing 

GSA is currently focused on reforming our leasing program to reduce costs by improving 

long-range planning, maximizing competition, and increasing utilization. While we are 

reducing our reliance on leasing, the fact is that a sound property management strategy 

necessarily involves leasing: sometimes it is more cost effective to lease than to own, and 

some short term leases may be required as we consolidate and co-locate agencies in 

reduced space arrangements. 

While there has been a significant focus on reducing the footprint, the cost of that footprint is 

just as important. To get the best deal for federal agencies and the American taxpayer, GSA 

is: 

• Broadening the delineated area for leases in order to increase competition in our lease 

procurements; 

• Extending lease terms to 10 years or longer, whenever feasible, because longer terms 

typically mean lower annual costs; 

• Simplifying space requirements to allow for greater competition and more favorable 

rates; and 

• Beginning the lease acquisition process at least 36 months before the expiration date 

to ensure a fully competitive procurement while avoiding costly holdovers and 

extensions. 

Reducing holdovers and extensions is a particular focus in GSA's reform efforts. History 

shows that we pay a premium - as much as 20 percent - when we go into a holdover or 

extension due to the lack of market competition in these arrangements. To avoid this, we are 

working with our partner agencies on better long-range planning. Our goal is to develop 

requirements 36 months prior to lease expiration, and to issue lease advertisements 18 

months prior to expiration. In implementing this long-range planning, we are starting to see 

results. By the end of FY2014, we had only 97 leases in holdover out of a total of more than 

8,700 leases. This represents the lowest year-end figure since 2007. 

Page 3 of6 
38 

And, just as with managing space in our owned assets, we also work with our federal 

partners to maximize utilization of leased space including through new workspace 

arrangements and mobile work strategies. 

Disposal of Unneeded Assets 

GSA aggressively disposes of our unneeded assets and provides assistance to other Federal 

agencies to more effectively utilize their properties, including through the identification and 

disposal of vacant and excess properties. 

GSA disposes of its own unneeded properties, and also assists other federal agencies in 

disposing of their excess and underutilized properties. Partnering with other federal 

agencies, in FY2014, GSA worked to dispose of 342 properties government wide, generating 

$42.7 million in proceeds. The bulk of the disposals were executed through public sales (280 

disposals). Other property disposals involved negotiated sales (13), public benefit 

conveyances (44), and federal transfers (5). And in FY2015, GSA is on track to achieve its 

performance goal of reducing the federal inventory by three million rentable square feet. A 

recent example of a disposal in Seattle demonstrates how GSA can help unlock the value of 

a property that was previously a liability. In February of this year, the Federal Reserve 

Building in Seattle sold for $16 million at online auction with eight bidders competing. The 

building, constructed in 1950, was transferred to GSA in 2012. After analyzing options to 

retrofit the building, GSA concluded to sell the building and negotiated a sale that protects the 

historic integrity of the asset while still allowing for the developer to renovate the facility. 

GSA also can accomplish successful property disposals in recovering markets such as 

Romulus, Michigan. A 137,600 square foot industrial distribution building formerly utilized as 

a U.S. Post Office Priority Mail Center stood vacant on a 10-acre site. Built in 1978, this 

eyesore was costing taxpayer money in maintenance and was a liability to the community. 

Last year, the property sold in an auction with a sales price of $3,100,000. Hopefully the new 

owner can restore the property and allow it to better serve the community. 

Leveraging GSA's Exchange and Out/ease Authority 

GSA is leveraging our disposal and exchange authorities to harness the value of our federal 

assets. Some of the government's properties, in particular those that are older, may no 

longer effectively serve a federal need and can have significant upkeep and maintenance 

costs. At the same time, many of these facilities are valuable for other uses, especially when 

they are located in prime real estate locations. 

For example, the Volpe Transportation Center in Cambridge, Massachusetts is located on 14 

acres in a vibrant high-technology hub of the city. The six buildings on the property were 

constructed nearly 50 years ago and no longer adequately serve the mission of this facility. 

Page4 of6 
39 

Last year, GSA issued a Request for Information seeking creative ideas to transform this 

property in exchange for construction services for building a state of the art research 

technology facility. The response to the RFI was robust and GSA believes the interest in the 

site will fuel healthy competition in proposals for the site. The ultimate result of this exchange 

is expected to provide better space for government transportation research, as well as 

economic development opportunities and tax revenues for the local community. 

In Southwest DC, GSA is leveraging the value of several buildings to fund new, highly 

efficient space for the agencies currently housed at those locations. Similar to the Volpe site, 

GSA is seeking developers who can provide construction and development services in 

exchange for GSA's Regional Office Building and the Cotton Annex. These services would 

be used to help consolidate about 1,500 regional GSA staff into the GSA headquarters office 

and renovate up to three historic buildings at the St. Elizabeths campus in Southeast 

Washington for the Department of Homeland Security. 

Another example of GSA's innovative approach is the long-term lease of the Old Post Office 

Building in Washington, DC to the Trump Organization, which is transforming this high-value 

property into a luxury hotel that, once opened, will generate a positive cash flow for the 

government. The Trump organization is investing $200 million in private sector capital into 

this 114-year old building, which will serve the local community, preserve the historic facility, 

and generate lease revenues. 

Supporting Implementation of the Administration's National Strategy for the Efficient 

Use of Real Property 

GSA supports the Administration's National Strategy for the Efficient Use of Real Property to 

reduce the size of the federal real estate inventory. This summer, GSA will be working with 

OMB to review the agency Reduce the Footprint plans. Through this effort, we will identify 

additional opportunities for colocation, consolidation, and reduction of space. This also will 

include the development of a government-wide pipeline of potential properties for disposition, 

exchange or outlease to meet the objectives of this policy. 

In addition, GSA is creating and implementing enhanced analytical tools to help agencies 

identify the best opportunities for disposal, consolidation, and colocation. In addition, GSA 

has improved data quality and user experience in the Federal Real Property Profile, by has 

revising several data definitions and automating validation and verification tools. In FY2015, 

GSA will make additional improvements that will enable agencies to better prioritize actions to 

consolidate, co-locate and dispose of federal properties. The bottom line is that having the 

right data and management tools is essential to making good decisions. 

Page 5 of6 
40 

Conclusion 

In closing, I look forward to working with the Members and staff of this committee to improve 

the Federal government's management of its real property. In particular, I welcome the 

opportunity to work with you and offer GSA's support as the Committee works through any 

potential legislative efforts. We believe there are a number of opportunities to improve asset 

management across government, including through streamlining the disposal process, 

authorizing the retention of some sale proceeds, and supporting the investment of rent 

collections for capital improvements. 

I thank the committee for the opportunity to testify today and look forward to answering your 

questions. 

Page 6 of6 
41 

For Release on Delivery 

Expected at 10:00 a.m ET 

Tuesday, June 16, 2015 

GA0-15-688T 

United States Government Accountability Office 

Testimony 

Committee on Homeland Security 

and Governmental Affairs, 

U.S. Senate 

FEDERAL REAL 

PROPERTY 

Current Efforts, GAO 

Recommendations, and 

Proposed Legislation 

Could Address 

Challenges 

Statement of Dave Wise, 

Director, Physical Infrastructure Issues 
42 

FEDERAL REAL PROPERTY 

Current Efforts, GAO Recommendations, and 

Proposed Legislation Could Address Challenges 

What GAO Found 

In recent years, the federal government has taken steps to improve the 

management of its real property and current efforts show promise. However, the 

issue is still on GAO's High-Risk Llst because the underlying challenges remain. 

Recent reform efforts include two from the Office of Management and Budget 

(OMB): 

The 2012 "Freeze the Footprint" policy, which instructed agencies to keep 

the total square footage of their domestic office and warehouse inventory at a 

baseline level established using the Federal Real Property Profile (FRPP), a 

database that the General Services Administration (GSA) developed to 

manage executive branch agencies' real property data. 

The 2015 "National Strategy for the Efficient Use of Real Property" and a 

similarly named "Reduce the Footprint" policy. In this effort, OMB introduced 

a new policy framework intended to measure performance to support more 

efficient use and to reduce the portfolio through asset consolidation, colocation, and disposaL 

Despite these recent strides, the federal government continues to retain excess 

and underutilized property, rely on leasing when ownership would be more cost 

effective, and utillze unreliable data for its property~re!ated decision making. 

GAO has made several prior recommendations related to real property 

management that, if implemented, could help address some of these challenges. 

Specifically, in recent years, GAO recommendations to GSA and OMB have 

included: 

taking specific steps to improve the reliability and usefulness of FRPP as a 

decision~making tool; 

articulating a clear strategy for its role in promoting effective and efficient 

practices in federal warehouse management throughout the government; and 

developing a S~year capital plan to more fully consider and document 

agencies' investment choices. 

In addition, several reform bills that have been introduced in recent years also 

could help to address certain issues. However, none have yet been enacted. For 

example, the Civilian Property Realignment Act (CPRA) could improve real 

property management by establishing an independent commission to streamline 

the disposal process and grouping all disposal and consolidation 

recommendations into one proposal for Congress to consider in its entirety. 

Legislative reforms could also apply to the McKinney-Vento Homeless 

Assistance Act, as amended, which introduced a process through which excess 

federal property is screened for potential transfer for use by homeless services 

providers. In 2014, GAO found that very few properties had been transferred to 

homeless service providers since the inception of the homelessness~assistance 

program created as a result of the Act and that many of the properties were not 

practical for homeless service providers to use. As a result, GAO suggested that 

Congress consider revisiting the property screening requirements under the Act. 

-------------United States Government Accountability Office 
43 

Related GAO Reports 

Chairman Johnson, Ranking Member Carper, 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 federal government's real property holdings are vast and diverse, 

costing billions of dollars annually to operate and maintain. The portfolio 

comprises hundreds of thousands of buildings-such as office buildings, 

storage warehouses, courthouses, hospitals, and laboratories-and a 

comparable number of permanent structures-such as roads, dams, and 

parking garages-across the country. In 2003, we added "Federal Real 

Property Management" to our biennial high-risk list because the federal 

government retained more property than it needed, relied on leasing in 

cases where ownership would be more cost effective in the long run, and 

lacked reliable real property data to support decision making. 1 In 2004, 

the President issued Executive Order 13327 establishing the Federal 

Real Property Council (FRPC) and requiring the General Services 

Administration (GSA) to consult with the FRPC to establish and maintain 

a single, comprehensive real property database? This database was 

intended to describe the nature, use, and extent of all real property under 

the custody and control of executive branch agencies in order to promote 

the efficient and economical use of the nation's real property assets and 

assure management accountability for implementing reforms. The FRPC 

created the Federal Real Property Profile (FRPP) to meet this 

requirement and began collecting data in 2005. 

Despite the implementation of the executive order and various reform 

efforts and proposals, agencies continue to face challenges managing 

real property. For this hearing, you asked us to discuss why federal real 

property management is on GAO's high-risk list and potential executive 

and legislative actions that could address longstanding challenges. My 

High-Risk Series: An Update, GA0-03-119 (Washington, D.C.: January 2003). 

2Federal Real Property Asset Management, Exec. Order No.13327, 69 Fed. Reg. 5897 

{Feb, 6, 2004). The executive order applies to executive branch agencies listed at 31 

U.S.C. §901(b); the Departments of Agriculture, Commerce, Defense, Education, Energy. 

Health and Human Services, Homeland Security, Housing and Urban Development, the 

Interior, Justice, labor, State, Transportation, the Treasury, and Veterans Affairs; the 

Environmental Protection Agency; the National Aeronautics and Space Administration; the 

U.S. Agency for International Development, GSA; the National Science Foundation; the 

Nuclear Regulatory Commission; the Office of Personnel Management; the Small 

Business Administration; and the Social Security Administration. 

Page2 GA0·15-688T 
44 

The Federal 

Government Has 

Taken Steps to 

Improve Real 

Property 

Management but the 

Issue Remains on 

GAO's High-Risk List 

Related GAO Reports 

testimony today focuses on ( 1) improvements and challenges in federal 

real property management; and (2) executive and legislative steps that 

could help the government address these challenges. My remarks today 

are primarily based on prior GAO reports and testimonies issued between 

June 2012 and February 2015, including the 2015 update to our HighRisk Series and recent interviews with Office of Management and Budget 

(OMB) and GSA staff to obtain updated information on federal efforts to 

improve real property management and address existing GAO 

recommendations. More detailed information about the scope and 

methodology of our prior work can be found in the reports listed at the 

end of this statement. We conducted the work this testimony is based on 

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. 

Since federal real property management was placed on GAO's High-Risk 

List in 2003, the government has given the issue high-level attention. In 

2012, OMB introduced the "Freeze the Footprint" policy, instructing 

agencies to not increase the total square footage of their domestic office 

and warehouse inventory compared to their FRPP baseline for fiscal year 

2012. 

In 2015, OMB issued its "National Strategy for the Efficient Use of Real 

Property" and its "Reduce the Footprinf' policy. The Reduce the Footprint 

policy requires agencies to (1) set annual square foot reduction targets for 

domestic federal buildings; and (2) adopt space design standards to 

optimize federal domestic office space usage. The National Strategy 

states that its policy framework is to (1) freeze grow1h in the real property 

portfolio; (2) measure performance to support more efficient use; and (3) 

reduce the size of the portfolio through asset consolidation, co-location, 

and disposal. The Reduce the Footprint policy requires that agencies 

submit their final plan to OMB by September 2015. Each agency's plan is 

to include descriptions of the internal controls to be used to comply with 

the policy, use of petiormance benchmarks and reduction targets for 

office and warehouse space, and documentation of cost reductions 

generated. 

Page3 GA0-1S-688T 
45 

Excess and underutilized 

property 

Related GAO Reports 

While these positive steps have potential, the federal government 

continues to face three primary challenges in managing its real property 

portfolio, including: (1) maintaining more real property than it needs; (2) 

relying on leasing when ownership would be more cost efficient; and (3) 

making real property management decisions using unreliable data. 

Retaining unneeded real property results in significant costs to the federal 

government. The previous and current administrations have sought to 

reduce its excess and underutilized properties. In July 2014, the 

Administration released the first year results of the Freeze the Footprint 

policy, indicating that it exceeded its expectations for reducing the federal 

government's office and warehouse space between fiscal years 2012 and 

2013. 3 However, as we reported in our 2015 High-Risk update, the data 

behind these results were unreliable, resu~ing in a potential 

overstatement of the progress made to date in reducing the federal 

government's real property footprint. Specifically, we examined data from 

four of the six agencies claiming the largest reductions in the first year of 

implementation of the Freeze the Footprint policy and found that the 

actual space reductions at all four were overstated. 

At least one of the two largest reported space reductions for each of 

the four selected agencies was either overstated or did not represent 

a reduction in square footage at all. 

Some of the largest reported space reductions were due simply to the 

timing of the fiscal year 2012 baseline for reporting. 

Some reported space reductions represented data errors or remeasurements of space, not actual reductions. 

Some properties credited as having been disposed of by agencies 

were simply returned to GSA and remained part of the federal 

inventory. 

Further, we also found in our 2015 High-Risk update that according to 

agency officials, some of the space reductions achieved in the first year of 

the Freeze the Footprint policy were the result of efforts underway before 

the policy began. Although not directly attributable to the Freeze the 

Footprint policy, such reductions did represent progress in reducing 

3

0MB reported a reduction of 10.2 million square feet of space in the first year of Freeze 

the Footprint reporting. 

Page4 GA0-15-688T 
46 

Costly Leasing 

Related GAO Reports 

excess and underutilized space. In addition, federal officials noted that 

the policy served as an incentive to reduce office and warehouse space 

going forward. 

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. In our February 2015 High-Risk update, we reported 

that the federal government has taken steps to limit the federal real 

property footprint by trying to consolidate high-value leases and smaller 

leases as they expire, moving some high-value leases into governmentowned space, and helping agencies use space more efficiently• 

However, we also reported that GSA lacked an action plan and 

transparent data to demonstrate progress in achieving this goal. In 2013, 

we found that high-value leases accounted for over one-third of GSA's 

annual rent paid to private sector landlords and more than a quarter of the 

total lease square feet while representing just 3 percent of GSA leases 

(See Figure 1 ). 5 GSA, however, has not yet determined which of those 

leases would be the best candidates for ownership investments. We 

made recommendations in this 2013 report that we will discuss later in 

this statement. 

High-Risk Series: An Update, GA0-15-290 (Washington, D.C.: February 2015). 

5

GAO, Federal Real Property: Greater Transparency and Strategic Focus Needed for 

High-Value GSA Laases, GA0-13-744 (Washington, D.C.: September 2013). 

Page 5 GA0-15-688T 
47 

Related GAO Reports 

Figure 1: Percentage of High-Value Leases in GSA's Leased Real Property Portfolio, by Number, Size and Cost, as of 

November 2012 

Total GSA leases 

(8,342) 

Total GSA~Ieased square footage 

{54 million rentable square feet) 

Total GSA net annual rent 

($4.2 billion) 

-High-value leases 

Source GAO analysrs of General SeiVicesAdmlnistration {GSA) data. ! GA0-15-68i3T 

Data reliability Despite the demonstrated leadership interest in improving real property 

data, the federal government continues to face challenges with the 

accuracy and consistency of the FRPP. Consistent and accurate data are 

necessary in order for GSA and agency managers to effectively manage 

real property. In 2012 we reported that FRPP data did not consistently 

describe excess and underutilized federal real properties accurately. 6 

While the government has taken some steps to improve FRPP. additional 

improvements are needed. Specifically, since the 2012 report, we have 

identified additional areas of weaknesses in FRPP data related to space 

reductions reported by agencies, maintenance needs, the utilization of 

warehouse space, and how agencies track structures. For example. in 

our November 2014 report, 7 we found that agencies do not apply a 

consistent definition for warehouse utilization. limiting the data's 

6

GAO, Federal Real Property: National Strategy and Better Data Needed to Improve 

Management of Excess and Underutilized Property, GA0-12~645 (Washlngton, D.C.: June 

2012). 

7 GAO, Federal Real Property: Strategic Focus Needed to Help Manage Vast and Diverse 

Warehouse Portfolio, GA0~15-41 (Washington, D.C.: November 2014). 

PageS GA0-15·688T 
48 

Implementing GAO 

Recommendations 

and Proposed 

Legislation Could 

Help Overcome 

Challenges 

GAO Recommendations 

Related GAO Reports 

usefulness. We made recommendations in this report that we will discuss 

later in this statement. 

We believe that the path forward to better management of federal real 

property is comprised of three important steps. First, the implementation 

of OMB's new National Strategy and the related efforts that I have already 

discussed are critical. Second, our existing recommendations related to 

real property management should be implemented. Finally, legislation 

could help address some of the challenges, such as the property disposal 

process and competing stakeholder interests. 

Sustained progress is needed to address the conditions and persistent 

challenges that make federal real property management High Risk. 

Although muttiple administrations have committed to a more strategic 

approach toward managing real property, their efforts have not yet fully 

addressed the underlying challenges that we have identified. In recent 

years, we have made a number of recommendations to GSA that, if 

implemented, would improve the management and reduce the costs of 

real property across the federal government. Several of our priority 

recommendations that have not yet been fully implemented include: 

In a June 2012 report,' we recommended that GSA take four specific 

steps to make the FRPP database a better decision-making tool. First, 

we recommended that GSA should take steps to ensure that all data 

collection requirements are clearly defined and that data reported are 

consistent across agencies. Second, we recommended that GSA 

should design and utilize performance measures to assess the extent 

to which the federal government makes efficient and economical use 

of its real property assets. Third, we recommended that GSA could 

reduce the data collection burden on federal agencies by limiting the 

number of measures to those that are deemed essential and included 

in FRPP. Finally, we recommended that GSA should report on the 

data it collects. GSA agreed with our recommendations and is 

implementing measures for the fiscal year 2015 FRPP reporting cycle 

Page7 GA0-15-688T 
49 

Related GAO Reports 

aimed at improving ijs reliability and usefulness. This effort continues 

to be a work in progress. 

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

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

documented when making decisions to fund capital projects. 9 We 

stated that, to enhance transparency, allow for more informed 

decision making related to GSA's real property priorities, and make a 

stronger case for its capital investment priorities, GSA should develop 

and publish a comprehensive 5-year capital plan. Although GSA 

agreed with this recommendation, officials told us that the unstable 

budget environment of recent years has limited the agency's ability to 

develop such a plan. 

In a September 2013 report, we recommended that GSA articulate a 

better case for increasing federal investments in real property 

ownership when it is more cost effective than leasing. 10 Specifically, 

we recommended that GSA should develop and use clear criteria to 

rank and prioritize potential long-term ownership solutions for current 

high-value leases among other capital investments and use this 

ranking to create a long-term, cross-agency strategy that facilitates 

the prioritization of targeted ownership investments. GSA agreed with 

this recommendation and we believe could use the newly issued real 

property strategy as a tool for implementing the actions needed. 

In November 2014, we recommended that GSA develop a clear 

strategy to manage the federal government's warehouse porifolio, 

including developing and disseminating warehouse management 

guidance, promoting lessons learned and best practices, and leading 

agencies as they assess their warehouse porifolios. 11 GSA agreed 

with the recommendation and is developing property guidance and 

research on best practices in warehouse and inventory management. 

We will continue to monitor GSA's actions to implement these and our 

other real property recommendations. 

9

GAO, Federal Buildings Fund: Improved Transparency and Long-term Plan Needed to 

Clarify Capital Funding Priorities, GA0-12-646 (Washington, D.C.: July 2012). 

10GA0-13-7 44. 

11GA0-15-41. 

PageS GA0-15-688T 
50 

Legislation 

Related GAO Reports 

Since 2011, there have been several real property reform bills introduced 

in Congress. However, none have been enacted. One of the bills, the 

Real Property Asset Management Reform Act, would have codified the 

FRPC and provided for an expedited disposal process for surplus 

property. 12 Additionally, homelessness assistance providers would have 

been eligible for financial grants to purchase property to provide services. 

Another bill, the Civilian Property Realignment Act (CPRA), provided a 

framework for disposing and consolidating civilian real property, and 

potentially reducing the need for costly leasing. 13 In addition, CPRA would 

have addressed some of the underlying challenges facing the disposal of 

unneeded property, such as competing stakeholder influences. In 2011, 

we testified that CPRA could improve real property management by 

establishing an independent board to streamline the disposal process and 

group all disposal and consolidation recommendations into one proposal 

for Congress to consider in its entirety. The bill did not explicitly address 

the government's overreliance on leasing, but could have potentially 

reduced leasing through board recommendations for consolidating 

operations where appropriate. Initially proposed by the Administration in 

2011, the bill was subsequently introduced in both houses of Congress. It 

passed the House of Representatives in 2012, but was not enacted. 

We have also made legislative suggestions to Congress as part of our 

September 2014 report on Title V of the McKinney-Vente Homeless 

Assistance Act. 14 We found that, since its inception in 1987, the Title V 

homelessness-assistance program has transferred 122 properties of the 

40,000 screened federal properties to homeless service providers. In 

many cases, properties were not practical for homeless service providers 

to use, especially considering that nearly 80 percent of screened 

buildings required moving them from their location. However, the law 

requires agencies to report all excess, surplus, underutilized, and 

unutilized properties, including the ones that must be moved from their 

current location. As a result, we suggested Congress revisit the types of 

properties that must be screened for potential use to assist the homeless. 

A submitted amendment to the National Defense Authorization Act for 

Fiscal Year 2016 would exempt some excess, underutilized, or unutilized 

1398, 113th Cong. (2013). 

13H.R. 1734, 112th Cong. (2011). 

14GAO, Federal Real Property: More Usefu/lnfonnation to Providers Could Improve the 

Homeless Assistance Program, GA0-14-739 (Washington, D.C .. September 2014). 

Page9 GA0·15·688T 
51 

GAO Contacts and 

Staff 

Acknowledgments 

Related GAO Reports 

non-mobile property of the Army that meets specific criteria from the 

requirements of Title Vofthe McKinney-Vento Homeless Assistance 

Act. 15 

Chairman Johnson, Ranking Member Carper, and Members of the 

Committee, this completes my prepared statement. I would be pleased to 

respond to any questions that you may have at this time. 

For further information regarding this testimony, please contact David 

Wise at (202) 512-2834 or wised@gao.gov. In addition, contact points for 

our Offices of Congressional Relations and Public Affairs may be found 

on the last page of this statement. Individuals who made key contributions 

to this testimony are Keith Cunningham (Assistant Director), Alex 

Lawrence, Mary Pitts, Crystal Wesco, and Chad Williams. 

15S. Arndt 1769. As of June 11, 2015, this amendment had not been approved. As 

written, this authority would expire in September 2017. 

Page 10 GA0-15-688T 
52 

Post-Hearing Questions for the Record 

Submitted to The Honorable David Mader 

From Senator Ben Sasse 

"Federal Real Property Reform: How Cutting Red Tape and Better Management Could 

Achieve Billions in Savings" 

I would appreciate your help in better understanding the extent to which the federal 

government owns residential properties, the manner in which the properties are acquired 

and the manner in which they are disposed. 

According to the Department of Housing and Urban Development's (HUD) website, eight 

federal agencies currently own and sell residential properties, excluding the Department of 

Defense- including both single-family homes and multi-family properties.' 

In my own state of Nebraska, I was alerted to a situation involving a property in the City of 

Scottsbluff, which may have been acquired by HUD by way of a federally-insured reverse 

mortgage. The property- W. 351

h Avenue, Scottsbluff, NE- has reportedly been vacant 

since its owner died nearly three years ago. 

For the last three years, the house has not been maintained, becoming overgrown and 

inhabited by animals. However, according to HUDHomeStore.com, HUD currently owns 

29 residential properties in Nebraska alone, though the above property is not currently 

listed for sale. This despite one of my constituents speaking with a HUD employee in 

Nebraska, who confirmed the borne belonged to the department. 

I am interested to learn not only about this property, but also about other federally-owned 

residential properties around the country. 

1. How many non-defense related residential properties does the federal government 

currently own, broken down by single-family and multi-family properties? 

Non-defense agencies reported 18,562 family housing assets to the Federal Real 

Property Profile (FRPP) system in FY 2014. Family Housing building assets are 

defined as buildings primarily used as dwellings for families/dependents. Includes 

apartment houses, single houses, row houses, public housing, military personnel 

housing, Federal employee housing, and housing for institutional personnel2• 

In addition, agencies reported 3,034 donnitories/barracks assets to the 

FRPP system in FY 2014. Donnitories/Barracks building assets are 

defined as buildings primarily used as dwellings for housing 

individuals (without families/dependents). 

1 http:Jportal.hud.gov/hudpm1al l·IUD'?src~/topics!homes t(w sale 2 Federal Real Property Council 2014 Guidance for Real Propertv Inventory Reporting 
53 

2. How many non-defense related federal agencies currently hold title to residential 

properties? 

A total of 17 non-defense Federal agencies reported family housing and/or 

dormitories/barracks assets to the FRPP system in FY 2014. Those agencies include: 

Agency Family Dormitories/ 

Housine; Barracks 

Agriculture X X 

American Battle Monuments Commission X 

Broadcasting Board of Governors X X 

Commerce X 

Energy X X 

General Services Administration X 

Health and Human Services X X 

Homeland Security X X 

Interior X X 

Justice X X 

Labor X X 

National Aeronautics and Space Administration X 

National Science Foundation X X 

State X X 

Transportation X X 

U.S. Agency for International Development X 

Veterans Affairs X X 

3. Does HUD currently own W. 351

h Avenue, Scottsbluff, NE? Has it ever? 

Although the subject property secured an FHA-insured reverse mortgage loan, HUD does 

not own the property because the foreclosure has not been completed by the U.S. 

Department of Justice. Therefore, at this time, HUD is merely serving in the capacity of 

the mortgage servicer of the loan, secured by the subject property. 

4. If so, how did HUD come to acquire the property? 

HUD is the servicer of this mortgage, but the Secretary is not on the title. The 

Department of Justice is in the process of foreclosing on this property on behalf ofHUD. 

5. Is HUD paying property taxes on this home? 

HUD is in the process of determining the outstanding property taxes on this property to 

ensure that such are paid. 
54 

6. Is HUD paying a property manager or a mortgage servicer in relation to this 

property? If so, who? 

HUD has assigned this property to its contractor, Cityside Management Corporation, to 

secure and maintain this property. 

7. How many non-defense related residential properties does the federal government 

own that were previously associated with federally-insured reverse mortgages? 

As of July 13,2015, HUD had 2,376 custodial properties (which once secured FHAinsured reverse mortgages) in its inventory. 
55 

Post-Hearing Questions for the Record 

Submitted to The Honorable David Mader 

From Senator Thomas R. Carper 

"Federal Real Property Reform: How Cutting Red Tape and Better Management Could 

Achieve Billions in Savings" 

June 16, 2015 

1. The National Strategic Agenda and Reduce the Footprint, if effectively 

implemented, could greatly improve agency property management and reduce the 

inventory of excess or unutilized properties. Please clearly explain OMB and GSA's 

roles relating to implementation of these initiatives and the opportunities and 

challenges that you foresee for OMB, GSA, and agencies as these policies are 

implemented over the next few years. 

2. What role should Congress play with regard to the National Strategy and Reduce 

the Footprint? How can we ensure that agencies are appropriately implementing 

these policies? How can we ensure that successes found through initiatives such as 

Freeze the Footprint are sustained and built upon not just for the remainder of the 

Obama Administration, but also for the next Administration? 

3. During our hearing you were asked to identify agencies that are the most effective at 

unloading excess real property. You noted that the Interior Department, the 

Agriculture Department, Forest Service and Coast Guard are examples of agencies 

with institutional processes that have shown successful ways to manage real 

property. How can we replicate best practices found at these agencies governmentwide? Are the examples of best practices found at these agencies discussed and 

shared at monthly meetings of the Federal Real Property Council? 

OMB issued the National Strategy for Real Property (Strategy) and the Reduce the 

Footprint (RTF) policy on March 25,2015. These documents formalize the 

Administration's shift in focus from simply freezing growth in individual agency 

portfolios to actively reducing the size of the real property portfolio Government-wide. 

The RTF policy requires that agencies develop and implement a five year real property 

efficiency plan (Plan) that sets annual reduction targets for domestic office, warehouse, 

and all other owned building types. It also requires agencies to issue an office space 

design standard by March 25,2016, to ensure that office space acquired to replace, 

consolidate, or relocate existing office operations - when cost effective - contributes to 

the reduction of the Government's portfolio over time. 
56 

OMB and GSA are jointly responsible for reviewing agencies' five-year real property 

plans to assess whether they fully support implementation of the Strategy, to determine 

the adequacy of annual reduction targets, and to ensure agencies have sufficient 

management controls in place to ensure their efficacy and support for continued reduction 

to the real property portfolio. OMB is further responsible for ongoing engagement with 

agencies to help them set strategic objectives, implement management structures, and 

address their real property management challenges. The agency Plans will support the 

strategic dialogue conducted through the annual FedStat meetings. GSA is responsible 

for reviewing agencies' real property portfolios, as they are documented in the Federal 

Real Property Profile, to help identifY, prioritize, and execute real property disposal and 

consolidation opportunities over the Plans' five year planning horizon. GSA's expertise 

in space management can help guide agencies' development of their office space design 

standard and verify the standard's implementation. 

OMB and GSA will jointly assess agencies' progress toward their portfolio reduction 

targets. OMB will also ask agencies to describe how their annual budget submissions 

support their strategy to achieve the specified targets, and GSA will work with agencies 

to identifY possible additional opportunities to reduce agency portfolios. OMB will work 

with agencies, including senior management, to assess progress annually. 

From fiscal years 2011-2015, Congress has appropriated to the FBF a total of $5.3 billion 

less than the level of rent collections. This shortfall has a significant impact on the GSA 

capital program and its ability to construct owned facilities to facilitate exiting from 

leases. Agencies that own real property also have very limited resources for their real 

property programs and often forgo opportunities to reduce the size and cost of their 

portfolios because the required resources are absent. 

There are three primary challenges to implementation of the Strategy and RTF. The first 

challenge is resources: reduced enacted annual appropriations to the GSA Federal 

Buildings Fund (FBF) for construction and renovation projects has presented a 

govermnent-wide management challenge since FY 2011 and limited our ability to make 

the portfolio more efficient. From fiscal years 2011-2015, Congress has appropriated to 

the FBF a total of$5.3 billion less than the anticipated level of rent collections. This 

shortfall has a significant impact on the GSA capital program's ability to construct and 

renovate owned facilities to facilitate exiting from leases. Over the same time period, 

agencies that own real property also have had very limited resources for their real 

property programs and often forgo opportunities to reduce the size and cost of their 

portfolios because the required resources are absent. To address this challenge, the 

President's FY 2016 budget proposed $2.4 billion in real property funding over the FY 

2015 enacted level, in support of critical construction and renovation projects as well as 

opportunities for consolidation and investment projects in the Federal Buildings 
57 

inventory to continue making progress and reduce our real property footprint and achieve 

cost savings. 

The second challenge is shifting agency management culture to a more active 

management posture, one that prioritizes real property as a critical mission delivery asset 

that must be managed for efficiency and cost control. The Administration's emphasis on 

real property is improving agency internal coordination and review processes, including 

across various disciplines such as facilities and finance, to examine real property assets 

for opportunities to divest of costly underperforming assets while investing in mission 

critical assets. Historically, agencies have not applied a cross-discipline approach and 

that has worked against the development of active management and a forward leaning 

management posture. 

Finally, the existing regulatory framework increases the cost, time, and amount of agency 

resources required to execute disposals. The disincentives of the current framework can 

be ameliorated through legislative relief from some elements of McKinney-Vento to 

streamline and accelerate the current property review and public notification process. 

Expanding existing GSA authority for disposals under Title 40 would provide a 

mechanism for GSA to help agencies execute the disposal pre-work that is required prior 

to declaring a property excess would also provide significant improvement to the current 

regulatory framework. GSA already has the authority to support disposal costs, in 

coordination with the disposing agency, after submission of the report of excess. 

Congress can facilitate full implementation of the Strategy and RTF policy by 

considering the appropriate resource level needed to support the ambitious portfolio 

reduction objective OMB is pursuing through the Strategy and RTF policy. Congress and 

OMB can also continue to work together to identify legislative options for making the 

regulatory structure more efficient to increase the number of disposal projects executed. 

Sharing best management practices among the agencies is the focus of the Federal Real 

Property Council (FRPC) meetings. During the last year in particular, the FRPC 

meetings have featured agency presentation on implementing consolidation projects, 

relocating large agency operations to new, more efficient locations, meeting challenges to 

dispose of unneeded properties, and assessing facility condition to guide future decisions. 

Agencies that exhibit best practices often have pilot programs or permanent statutory 

authority that is unavailable to most agencies. Those agencies have developed expertise 

in and best practices for the entire disposal and asset sale process by learning from 

experience. Modifying the existing regulatory structure to make it more efficient will 

support the government's ability to foster the adoption of best practices among all 

agencies. It is also important to understand that while best management practices are 

actively shared, not all dispositions are of equal scope, complexity and costs. The 

Department of Energy for example is responsible for the disposition of thousands of 
58 

facilities such as, but not limited to, nuclear reactors, chemical processing plants and 

laboratories contaminated with radioactive and chemical elements. These types of 

facilities cannot simply be demolished or reutilized, but must be decontaminated, 

deactivated, and decommissioned in order to be safely demolished. These activities 

require billions of dollars.' 

1 The data used for questions I and 2 are based upon worldwide data pulled from the FY14 Federal Real Property 

Profile database. 
59 

Post-Hearing Questions for the Record 

Submitted to Norman Dong 

From Senator Thomas R. Carper 

"Federal Real Property Reform: How Cutting Red Tape and Better Management Could 

Achieve Billions in Savings" 

June 16, 2015 

1. As you know the Administration has outlined an ambitious new "National Strategic 

Agenda" to improve the management of federal real property. The agenda outlines a 

series of steps that agencies must take to measure and reduce their real property holdings. 

GSA plays a key role in the success of this initiative through data management and 

analytics to identify real property efficiency opportunities. GSA is also required to work 

with the Office of Management and Budget to review agency real property efficiency 

plans. Please elaborate on how GSA will work with and oversee agencies to ensure that 

they are improving the management of their real property through identifying and then 

executing on efficiency opportunities. 

Under the Reduce the Footprint policy issued in March 2015, agencies are required to 

submit 5-year real property efficiency plans detailing annual square-foot reduction targets 

for federal domestic buildings, and adopt space design standards by March 25, 2016. The 

initial drafts of the plans have been submitted. GSA, in collaboration with OMB, will 

review each agency's draft plan and provide feedback to each agency. GSA will review 

draft agency plans to ensure they meet the minimum requirements of the Reduce the 

Footprint policy memorandum, including the specification of square footage reduction 

and disposal targets, and will also use the Federal Real Property Prolile (FRPP), GSA 

space assignment data and agency benchmarking data to help agencies identify additional 

opportunities for colocations and consolidations; space reductions where utilization can 

be improved; and disposals, exchanges and outleases. This review process will help to 

ensure that agency reduction and disposal targets included in final plans arc both 

aggressive and realistic. This will result in a pipeline of government-wide opportunities 

that will position the Administration for success in implementing its Reduce the Footprint 

policy. 

GSA is also working to improve the FRPP, and begin transforming it from a static 

database into a management tool, which provides agencies with greater !malytic 

capability to identify disposal and consolidation opportunities. Agencies will have the 

ability to directly access these tools, which will include summary reports designed to 

assist agencies in their decision making in support of the National Strategy. For example, 

these reports will highlight leases expiring within the next five years, as well as 

underutilized and excess properties for potential disposal opportunities. 

1 
60 

GSA is also creating a new Lease Consolidation Tool on the new plattom1, which 

agencies will be able to access to: 

• Quickly identify owned and leased ot1ices in a given geographic radim; that 

are underutilized; 

• Identify potential candidates worthy of further analysis for relocation and 

consolidation projects: 

• Estimate general lease cost avoidance and renovation costs. 

2. What can Congress do to ensure that initiatives such as the National Strategic Agenda 

and Reduce the footprint are successful? How can we incentivize agencies to improve the 

management of their real property holdings? 

To improve management of federal property and reduce the footprint, Congress could 

pursue legislation that would include: (I) authorizing agencies to retain proceeds from the 

disposal of real property; (2) streamlining some steps in the disposal process. and 

particularly assessing ways to focus the screening required under McKinney-Vento; (3) 

addressing the upfront costs of property disposal; and (4) providing all agencies with 

clear authority to co-locate with other agencies and transfer and retain funds to allow tor 

full cost recovery tor the use of the space. as well as the associated goods and services 

being provided. 

Federal entities that currently have the authority to retain proceeds have demonstrated 

much more progress with surplus property disposals, relative to other agencies that 

cannot retain proceeds. Coast Guard property disposals accounted for 90 percent ofthe 

Department of Homeland Security (DHS) properties disposed. Similarly. Forest Service 

property disposals accounted ti.lr 94 percent of U.S. Department of Agriculture (USDA) 

properties disposed. Both the Coast Guard and the Forest Service have authority to retain 

proceeds, whereas other entities within DHS and USDA do not have this authority. 

The federal prope1iy disposal process can take some time in part due to various statutory 

requirements including those related to environmental cleanup. historical preservation. 

and homeless and public benefit conveyance screenings. These requirements have 

important objectives that should not be minimized. However, streamlining the process 

could be done in a way that would continue to deliver those beneficial outcomes. For 

example, the GAO recommended changing the scope of properties reported to HUD that 

may be less suitable for homeless assistance use. 

To dispose of unneeded properties, agencies can face considerable up-tront costs 

associated with the disposal process. When these up front costs are greater than the 

annual savings of avoided annual maintenance costs, the agency may well decide to hold 

the property due to budget constraints, even though over the long-tem1 the cost savings to 

2 
61 

the tax payer would be greater if agencies were provided the necessary up-front funding. 

Additionally, as GSA works with agencies to consolidate federal workspaces, funding is 

required for moving costs. space reconfiguration and alterations, and system upgrades 

needed as part of the agency relocations. Congress has provided line-item funding for 

consolidation projects that has resulted in dozens of projects that will reduce the footprint 

by hundreds of thousands of square feet and reduce annual leasing costs by tens of 

millions of dollars. Even more could be accomplished if Congress appropriated funds 

from the Federal Buildings Fund at the anticipated level of the rent collections GSA 

collects into the Federal Buildings Fund. 

3. One of the implementation steps outlined in the National Strategic Agenda includes the 

certification and monitoring of Federal Real Property Profile (FRPP) data. I understand 

that efforts are underway at GSA to improve the reliability and usefulness of this data. 

Please explain what key components are needed to improve the reliability and usefulness 

ofFRPP data. Does GSA have plans to share this data with agencies so that co-location 

opportunities can be identified and acted upon? 

GSA is improving the reliability and usel'ulness of the FRPP in a number of ways. For the 

FY2014 FRPP repmiing cycle, GSA collaborated with OMB. to implement the 

following: 

• Data Validation Tools: Automated data validation tools were added to flag 

potential data errors before the December 15 FRPP data submission deadline. 

GSA also worked with agencies to improve the accuracy of the geospatial-related 

data elements in the FRPP to better identify properties. 

• Senior Real Property Certification: The Federal Real Property Council required 

Agency Senior Real Property Officers to certify the data submitted to the FRPP 

and describe their agency's effmis to improve the accuracy and completeness of 

the data, elevating the importance of the data submittals. 

• FRPP Data Dictionary Clarifications: Data definitions were clarified and 

additional data elements were added to increase data transparency. 

In FY 2015, using FRPP data and GSA occupancy agreement data, GSA also developed 

lor each agency a report highlighting expiring leases. the utilization of agency assets. and 

potential cost avoidance opportunities from disposals of underutilized and inactive assets. 

GSA will implement additional improvements for the FY 2015 reporting cycle. Such 

improvements will include further data definition clarifications, a requirement that 

agency Chief Financial Oflicers certify data in addition to Agency Senior Real Property 

Ofticers. additional data validation tools, and a more robust version of the real property 

management reports issued to agencies in FY2014. 

3 
62 

In addition. GSA is transforming the FRPP from a static database into a dynamic 

database tool by migrating the database to a new information technology platfonn. 

The new platform will include a suite of business intelligence tools that provide analytic 

capabilities designed to support the analysis oflarge data sets. Once the new system is 

implemented, agencies will have the ability to directly access a set of real property 

management tools that include summary reports highlighting expiring leases as well as 

underutilized and excess properties l(Jr potential disposal oppottunities. Agencies will 

also have access to a new Lease Consolidation Tool that will help them to quickly 

identify owned and leased offices in a given geographic radius that are underutilized and 

identify potential candidates for relocation and consolidation projects. GSA will also 

work with our partner federal agencies using these tools to engage agencies in 

discussions about their expiring leases, the utilization of agency assets, and potential cost 

avoidance opportunities from disposals of underutilized and inactive assets. These agency 

interactions and more readily accessible tools that use the FRPP data should also 

encourage agencies to improve the quality of the data they submit to the FRPP. 

4. I understand that GSA has taken some creative steps to manage federal real property, 

which if executed correctly, could mean a smart investment for taxpayers in the long run. 

What spurred some of the innovative ways GSA has approached property in the last 

several years, and what tools does the agency need to further its progress? 

Constrained funding, along with shifts in real estate market conditions, changing agency 

requirements, and transformed work arrangements and workspaces have motivated GSA 

to explore innovative federal property solutions. GSA has been pursuing use of nexible 

authorities to reposition properties that no longer effectively serve a federal need and 

which can have significant upkeep and maintenance costs. At the same time. many of 

these facilities arc valuable for other uses, especially when they are located in prime real 

estate locations. By offering these properties to the development community in exchange 

f(Jr construction services or replacement properties, GSA can provide better space so that 

agencies can better focus on their missions without requiring additional funding. 

For example, the Volpe National Transportation Systems Center in Cambridge, 

Massachusetts is located on 14 acres in a vibrant high-technology hub of the city. The 

six buildings on the property were constructed nearly 50 years ago. and no longer 

adequately serve the mission of this facility. On July 16,2015, GSA issued a Request for 

Qualilications, seeking respondents interested in potentially entering into an exchange 

agreement with GSA, which will require the selected respondent to design and construct 

a state-of~ the art facility tor the Volpe Center. It is to be located on a portion of the 

property to be retained by the federal government. In exchange. the rest of the property 

will be conveyed to the selected respondent after construction of the new facility. This 

4 
63 

exchange is expected to provide better space for Federal transportation research, as well 

as economic development opportunities and tax revenues for the local community. 

5 
64 

Post-Hearing Questions for the Record 

Submitted to David Wise 

From Senator Thomas R. Carper 

"Federal Real Property Reform: How Cutting Red Tape and Better Management Could 

Achieve Billions in Savings" 

June 16, 2015 

1. As you know, the Obama Administration recently announced the National Strategy 

for the Efficient Use of Real Property and the Reduce the Footprint policies as 

measures intended to improve the management of federal real property. What 

actions should Congress take as these policies are developed and implemented over 

the next five years to ensure they are successful? Are there particular aspects of 

these policies that should garner closer scrutiny? 

Answer: We continue to monitor the implementation of the Administration's National 

Strategy for the Efficient Use of Real Property and the Reduce the Footprint policies and 

have met with Office of Management and Budget and the General Services 

Administration (GSA) officials to discuss them. Continued congressional oversight of 

these efforts in the form of hearings and inquiries will help ensure that the Administration 

follows through with implementation. 

Since 2011, there have been several real property reform bills introduced in Congress that 

could help address certain issues such as competing stakeholder influences and the 

lengthy disposal process. For example, legislative reforms could apply to the McKinneyVento Homeless Assistance Act, as amended, which introduced a process through which 

excess federal property is screened for potential transfer for use by homeless services 

providers. In 2014, GAO found that very few properties had been transferred to 

homeless service providers since the inception of the associated program and that many 

of the properties were not practical for homeless service providers to use. GAO 

suggested that Congress consider revisiting the property screening requirements under the 

Act and an amendment to the National Defense Authorization Act for Fiscal Year 2016 

was submitted that would have exempted some excess, underutilized, or unutilized nonmobile property of the Army from the screening requirements of the Act. However, none 

of the reform bills passed Congress. 

As the Administration implements its strategy and related efforts, it is important to note 

the importance of reliable real property data in guiding decisions and assessing the 

effectiveness of efforts. Despite the demonstrated leadership interest in improving real 

property data, the federal government continues to face challenges with the accuracy and 

consistency of the Federal Real Property Profile (FRPP)-the governmentwide real 

property database. In 2012 we reported that FRPP data did not consistently describe 

excess and underutilized federal real properties accurately. While the government has 
65 

Æ 

taken some steps to improve FRPP, additional improvements are needed. For example, 

in our 2015 High-Risk update, we found that the FRPP data behind first-y~ar results from 

the Administration's initial Freeze the Footprint policy were unreliable, resulting in a 

potential overstatement of the progress made to date in reducing the federal government's 

real property footprint. 

2. Similarly, the administration has pledged to improve the reliability and usefulness 

of the Federal Real Property Profile. What are the key steps that the Administration 

and Congress should take to improve the reliability and usefulness of this data? Do 

you believe that allowing the public and agencies to access this data would allow for 

enhanced opportunities to co-locate federal space? 

Answer: In a June 2012 report, we recommended that GSA, which administers the 

database, take four specific steps to make the FRPP database a better decision-making 

tool. First, we recommend that GSA should take steps to ensure that all data collection 

requirements are clearly defined and that the data reported are consistent across agencies. 

Second, we recommended that GSA should design and utilize performance measures to 

assess the extent to which the federal government makes efficient and economical use of 

its real property assets. Third, we recommended that GSA could reduce the data 

collection burden on federal agencies by limiting the number of measures to those that 

are deemed essential and included in FRPP. Finally, we recommended that GSA should 

report on the data it collects. GSA is taking steps to improve FRPP but this effort 

remains a work in progress. 

There may also be benefits to wider access to real property data. In 2012, we found that 

one of the factors limiting the effective co-location of federal agencies in federal space 

were challenges of identifying co-location opportunities because of limitations with 

available data.