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FEDERAL ASSET MANAGEMENT: 

ELIMINATING WASTE BY DISPOSING OF 

UNNEEDED FEDERAL REAL PROPERTY 

HEARING 

BEFORE THE

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, FEDERAL SERVICES, AND 

INTERNATIONAL SECURITY SUBCOMMITTEE 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

OF THE

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

JUNE 9, 2011 

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

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 

H605-41331-79W7 with DISTILLER

(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

SUSAN M. COLLINS, Maine 

TOM COBURN, Oklahoma 

SCOTT P. BROWN, Massachusetts 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JERRY MORAN, Kansas 

MICHAEL L. ALEXANDER, Staff Director 

NICHOLAS A. ROSSI, Minority Staff Director 

TRINA DRIESSNACK TYRER, Chief Clerk 

JOYCE WARD, Publications Clerk and GPO Detailee 

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, FEDERAL SERVICES, AND INTERNATIONAL SECURITY 

THOMAS R. CARPER, Delaware, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

MARK L. PRYOR, Arkansas 

CLAIRE MCCASKILL, Missouri 

MARK BEGICH, Alaska 

SCOTT P. BROWN, Massachusetts 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

JOHN KILVINGTON, Staff Director 

WILLIAM WRIGHT, Minority Staff Director 

DEIRDRE G. ARMSTRONG, Chief Clerk 

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(III) 

C O N T E N T S 

Opening statements: Page 

Senator Carper ................................................................................................. 1 

Senator Brown .................................................................................................. 3 

Prepared statements: 

Senator Carper ................................................................................................. 47 

Senator Brown .................................................................................................. 49 

WITNESSES 

THURSDAY, JUNE 9, 2011 

Hon. Alan Dixon, Former Chairman, 1995 Defense Base Realignment and 

Closure Commission ............................................................................................. 5 

David Baxa, Chief Executive Officer, VISTA Technology Services, Inc. ............. 6 

Tim Ford, Chief Executive Officer, Association of Defense Communities .......... 8 

Maria Foscarinis, Executive Director, National Law Center on Homelessness 

and Poverty ........................................................................................................... 9 

Daniel I. Werfel, Controller, Office of Federal Financial Management, U.S. 

Office of Management and Budget ..................................................................... 26 

Robert Peck, Commissioner, Public Buildings Service, U.S. General Services 

Administration ..................................................................................................... 27 

James Sullivan, Director, Office of Asset Enterprise Management, U.S. Office 

of Veterans Affairs ............................................................................................... 29 

David Wise, Director, Physical Infrastructure Issues, U.S. Government Accountability Office ................................................................................................ 31 

Brian Lepore, Director, Defense Capabilities and Management, U.S. Government Accountability Office .................................................................................. 32 

ALPHABETICAL LIST OF WITNESSES

Baxa, David: 

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

Prepared statement .......................................................................................... 54 

Dixon, Hon. Alan: 

Testimony .......................................................................................................... 5 

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

Ford, Tim: 

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

Prepared statement .......................................................................................... 62 

Foscarinis, Maria: 

Testimony .......................................................................................................... 9 

Prepared statement .......................................................................................... 67 

Lepore, Brian: 

Testimony .......................................................................................................... 32 

Prepared statement .......................................................................................... 94 

Peck, Robert: 

Testimony .......................................................................................................... 27 

Prepared statement .......................................................................................... 79 

Sullivan, James: 

Testimony .......................................................................................................... 29 

Prepared statement .......................................................................................... 86 

Werfel, Daniel I.: 

Testimony .......................................................................................................... 26 

Prepared statement .......................................................................................... 74 

Wise, David: 

Testimony .......................................................................................................... 31 

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IV 

Wise, David—Continued 

Prepared statement .......................................................................................... 94 

APPENDIX 

Questions and responses for the Record from: 

Mr. Dixon .......................................................................................................... 113 

Mr. Werfel ......................................................................................................... 114 

Mr. Peck ............................................................................................................ 119 

Mr. Sullivan (failed to answer questions submitted for the record) ............. 120 

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(1) 

FEDERAL ASSET MANAGEMENT: 

ELIMINATING WASTE BY DISPOSING OF 

UNNEEDED FEDERAL REAL PROPERTY 

THURSDAY, JUNE 9, 2011 

U.S. SENATE,

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT,

GOVERNMENT INFORMATION, FEDERAL SERVICES,

AND INTERNATIONAL SECURITY,

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS,

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:02 p.m., in room 

342, Dirksen Senate Office Building, Hon. Thomas R. Carper, 

Chairman of the Subcommittee, presiding. 

Present: Senators Carper, Begich, Brown, and Coburn. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. Well, good afternoon, one and all. Senator 

Brown and I are happy to welcome you to our hearing today. We 

thank you for joining us. 

Today, we will—actually, as it turns out, we have a vote starting 

at 2:15, and I think Senator Brown is going to slip out here in a 

few minutes and run and vote, so he will be at the beginning, then 

come and chair the hearing until I get back so we can both vote 

and we will not waste your time and we will get this show on the 

road. But welcome. 

Today, we will examine the challenges that our Federal Government faces in managing our property, really, the property of the 

American people. We will also discuss the President’s proposal to 

address at least some of these challenges through the creation of 

what the Administration is calling a Civilian Property Realignment 

Board to assist agencies in right-sizing our Federal real estate portfolio. 

There is general consensus that the Federal Government has to 

get smarter about the way we manage our buildings and lands, and 

with concerns over the implications for our deficit and our national 

debt mounting, eliminating waste and achieving cost savings in 

this area must remain a priority. 

Between 2001 and 2009, we ran up as much debt as we did in 

the first 208 years of our Nation’s history. Last year, we ran up 

what may be the largest budget deficit in our Nation’s history. 

While most of us here in Washington are united in our desire to 

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2 

find a solution to our country’s fiscal problems, we are still facing 

an ocean of red ink for as far as the eye can see. 

A wide variety of ideas have been put forward on how to reduce 

our budget deficits and begin whittling down our debt. Last fall, 

the majority of the bipartisan Deficit Commission appointed by 

President Obama provided us with a road map to reduce the cumulative Federal deficits over the next decade by roughly $4 trillion. 

A number of the steps we would need to take in order to accomplish this goal will likely be painful. 

Many Americans believe that those of us here in Washington are 

not capable of taking these steps. They do not think we can do the 

hard work that we were hired to do, that is to effectively manage 

the tax dollars—their tax dollars that they have entrusted to us. 

They look at the spending decisions we have made in recent years 

and the poor management across government and question whether the culture here is broken and question whether we are capable 

of making the kind of tough decisions they and their families have 

to make every day with respect to their own budgets, and I do not 

blame them for being skeptical. 

We need to establish a different kind of culture here in Washington when it comes to spending. We need to establish what I call 

a culture of thrift. That involves looking at every nook and cranny 

of Federal spending, domestic, defense, entitlement programs, 

along with tax expenditures, and asking this simple question: Is it 

possible to get better results for less money, or at least to get better 

results for the same amount of money? 

When it comes to Federal property management, it is clear to me 

and to others that we can get better results and save money. Federal property management has been on the Government Accountability Office’s (GAOs) High-Risk List since January 2003, in part 

due to the overwhelming number of unneeded, underutilized, and 

even vacant facilities held by Federal agencies. 

The most recent comprehensive data available showed that Federal agencies apparently possess more than 45,000 underutilized 

buildings totaling more than 340 million square feet in space. That 

is about the size of Delaware. I exaggerate, but it is a lot of space. 

[Laughter.] 

These buildings cost nearly $1.7 billion annually to secure and 

to maintain. 

Just last month, the Administration released a list of 14,000 real 

property assets that have been identified as excess, meaning they 

no longer meet a Federal need and should be disposed of. 

In addition, we are also likely over-leasing. Since 2008, the General Services Administration (GSA) has leased more property than 

it owns, even though owning a Federal building is often a more cost 

effective way of meeting an agency’s long-term needs. 

Fortunately, both Congress and the Obama Administration are 

united in their commitment to address this issue. In June 2010, 

President Obama issued a memorandum urging agencies to move 

more swiftly to dispose of unneeded property. He also put into 

place a goal of achieving $3 billion in savings through property 

sales and other disposal actions by the end of Fiscal Year (FY) 

2012. 

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3 

In addition, the President’s latest budget includes a recommendation to form what the Administration calls a Civilian 

Property Realignment Board, whose purpose would be to review 

the government’s property portfolio and dispose of those deemed 

excess in an expedited manner. This is a proposal that my colleagues and I on the Homeland Security and Government Affairs 

Committee (HSGAC) still need to spend time examining, but I am 

pleased that the President has put this suggestion, something aggressive, on the table. 

Clearly, the momentum is building to address a widely recognized problem. Yet, in all of our zeal to save, we must be intelligent 

in our approach. Rome was not built in a day. The Federal Government’s bloated property portfolio cannot be unbuilt in a day. We 

have an opportunity that is ripe to change the way the government 

manages its hundreds of billions of dollars worth of assets. 

The President’s proposal may be the right approach. It may not 

be. It does, however, hold some promise, and that said, agencies 

should not be waiting for a civilian Base Realignment and Closure 

(BRAC) to solve their problem in the meanwhile managing the 

properties. In an era of shrinking budgets and scarce resources, it 

is critical that agencies come up with innovative property management tools to expeditiously dispose of assets that they no longer 

need and take better care of those that they do need. 

In sum, our government has many underutilized and vacant 

properties that cost billions of dollars each year to maintain. We 

pay for their maintenance. We pay for security for those properties. 

We pay for utilities for many of those properties. Despite efforts to 

reduce this inventory, multiple obstacles remain that preclude 

quick and easy solutions, and I really look forward to hearing from 

our witnesses today as you share your thoughts with us on the Administration’s plan and on sitting down with our Subcommittee colleagues who are interested in this issue so that we can move forward with the more difficult work that lies ahead. Senator Brown. 

OPENING STATEMENT OF SENATOR BROWN 

Senator BROWN. Thank you, Mr. Chairman, for holding this 

hearing. I have enjoyed our time together and really learning about 

where a lot of the waste and inefficiency is. This is something I 

commend the President for putting forth, a plan for how to deal 

with a lot of the underutilized properties, which, as you referenced, 

cost us $1.7 billion a year that we could be using in other types 

of programs or putting back to paying down our deficit. 

I will submit my statement for the record, but I just wanted to 

point out those two things and I look forward to the witnesses’ testimony, as well. Thank you. 

Senator CARPER. Thanks so much, Senator Brown. 

Let me just say to our staffs, both Democrat and Republican, I 

thank our staffs for helping us in preparation for this hearing. 

I want to begin by just welcoming our first panel of witnesses, 

and the first is a person who needs little introduction here. It is 

someone who has served on this side of the dais many times the 

Honorable Alan Dixon, Senator from Illinois from 1981 to 1993. 

While he served in the Senate for at least 10 of those years, I was 

serving in the House and we had a fair amount of overlap. Senator 

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4 

Dixon was a member of the Committee on Armed Services, the 

Committee on Banking, Housing, and Urban Affairs, where I used 

to serve, as well, and the Committee on Small Business. 

Since retiring from the Senate, he has continued to demonstrate 

his commitment to public service by serving as the Chairman of the 

Defense Base Closure and Realignment Commission during 1994 

and 1995. He is currently Senior Counsel at Brian Cave, an international law firm. Senator, welcome. It is great to see you. 

Mr. David Baxa is President and Chief Executive Officer (CEO) 

of VISTA Technology Services, Incorporated, a management and information technology (IT) consulting firm that supports large organizations in getting the most from their real property asset portfolio. He has more than doubled the size of VISTA since 2003. Previously, Mr. Baxa spent more than half of his career as general 

manager (GM) of a team providing support for every Defense Base 

Realignment and Closure round since 1988, so your paths intersected a lot with Senator Dixon back in the mid–1990’s. Welcome. 

Tim Ford is Chief Executive Officer of the Association of Defense 

Communities (ADC), which has been accredited with helping guide 

hundreds of its members through BRAC 2005. Mr. Ford is a nationally recognized expert on the impacts of base closure, base redevelopment, and community-military partnership. Previously, Mr. 

Ford was Executive Director of the New York City Employment 

and Training Coalition, which is the city’s leading workforce development association. Mr. Ford, very nice to see you. 

And finally, our fourth witness is a person whose last name has 

never been correctly pronounced, and I am going to try to do it. I 

ask my staff, whenever we have a tough name to pronounce, I ask 

them to spell it out phonetically and we will see how I do and how 

well they do. Ms. Foscarinis. 

Ms. FOSCARINIS. Foscarinis, perfect. 

Senator CARPER. OK, good. Thank you. Maria Foscarinis is the 

Executive Director of the National Law Center on Homelessness 

and Poverty. She is the founder of the Center, which has advocated 

for solutions for homelessness since 1985. Ms. Foscarinis is a primary architect of the Stuart B. McKinney Homeless Assistance Act. 

I served with Stuart McKinney for a number of years on the Banking Committee in the House. That was the first major act of Federal legislation passed addressing homelessness. She has led the 

successful litigation to secure the legal rights of the homeless and 

is an internationally known expert, and we thank you and each of 

our panelists for being here today. 

Why don’t we go ahead and begin your testimonies. We will ask 

that you try to limit your testimonies to 5 minutes or so. If you go 

way over that, we will rein you in. If you do not, we will be in good 

shape. 

Senator Brown, you may want to slip out and go vote. Is the vote 

going to start at 2:15? 

Senator BROWN. Yes. 

Senator CARPER. If it is, you may want to do that, and then you 

can come back and I will run over and vote and we will be in good 

shape. Thank you. 

Senator, please proceed. Your entire statements will be made 

part of the record and feel free to summarize as you wish. 

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5 

1The prepared statement of Mr. Dixon appears in the appendix on page 51. 

STATEMENT OF HON. ALAN DIXON,1 FORMER CHAIRMAN, 1995 

DEFENSE BASE REALIGNMENT AND CLOSURE COMMISSION 

Mr. DIXON. Thank you very much, Mr. Chairman and Senator 

Brown. It is delightful to be here with you today. I ask that my full 

statement be included in the record. 

I think you will find it useful in view of my experience as Chairman of the 1995 BRAC. In that year, my good friend Senator Sam 

Nunn, the Chairman of the Armed Services Committee, recommended me to President Clinton to be the Chairman of BRAC 

and talked me into it. I have come to forgive them both, Mr. Chairman, for that experience. But I can testify on the basis of that experience that BRAC was an immense success. Billions and billions 

and billions of dollars were saved by what we did. 

I am simply going to close by saying my experience is outlined 

in the record for you, but I want to say that the BRAC experience 

showed that some form of government assistance to communities 

affected by major closures or realignment was essential both for 

losing communities to overcome the economic impact, and in some 

cases for gaining communities to prepare local infrastructure to receive new activities. 

Now, Mr. Chairman, I notice that under the Administration’s 

proposal, the Civilian Property Realignment Board’s meetings are 

not open to the public, and the Chair and the Ranking Member of 

the congressional Oversight Committees can sit in on all meetings 

of the Board. I respectfully suggest, Mr. Chairman, that the Subcommittee should take a close look at these aspects of the Administration’s proposals in light of my BRAC experience. 

The value of transparency, the value of openness, the value of all 

opportunities for people to be heard is terribly important. The 

BRAC experience shows that military base closures can be done in 

a fair, open, and compassionate manner and the communities affected can recover economically, and I believe that will be true of 

your experience with this legislation if you are prepared to protect 

transparency. 

I thank the Chair. 

Senator CARPER. Thanks very much, and to your point, I spent 

a couple of days last week—we were in recess here in the Senate, 

and I spent a couple of days in California, where many of the 

bases, including Motha Field Naval Air Station, where I was a 

Naval Flight Officer, have been closed and have been transitioned 

to other activities, and for the most part, very successfully. So I 

think you are absolutely right. 

Mr. DIXON. May I make this final response to that? 

Senator CARPER. Please. 

Mr. DIXON. In my own State of Illinois, Mr. Chairman, they 

closed Chanute Air Force Base near the University of Illinois at 

Rantoul. Everybody thought that would be the ruination of this 

community called Rantoul in Central Illinois. As a matter of fact, 

that has become a tremendous industrial park and has contributed 

a lot of good economically to that community. They closed Fort 

Sheridan in Northern Illinois and that became one of the most 

beautiful residential areas on Lake Michigan that you could ask to 

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6 

1The prepared statement of Mr. Baxa appears in the appendix on page 54. 

see. So I definitely believe that the economic results of this will be 

very beneficial to the government and the people of the United 

States. 

Senator CARPER. My staff oftentimes hear me quote Albert Einstein, who once said, ‘‘In adversity lies opportunity,’’ and the same 

is true and you have shown it with the work that you have done. 

Thank you. Thanks for being with us today. 

Mr. Baxa, please. 

STATEMENT OF DAVID BAXA,1 CHIEF EXECUTIVE OFFICER, 

VISTA TECHNOLOGY SERVICES, INC. 

Mr. BAXA. Thank you, Mr. Chairman. I certainly want to say on 

behalf of the employees of VISTA TSI, we sincerely appreciate your 

invitation to share our views. Our views and my personal views are 

honed by nearly 25 years of experience with Defense BRAC 

through five rounds, starting in 1988. 

Our comprehensive support to the Department of Defense (DOD) 

has included development of tools to determine space requirements 

in concert with workforce demographics and organizational missions. We have also helped to determine excess properties by specific type and location. These proven methodologies continue to result in major savings and cost avoidances to DOD. 

For example, we recently helped the Army avoid more than halfa-billion dollars in new costs for medical and parking facilities. We 

examined other government agency practices, applicable industry 

standards, and analogous private sector benchmarks to help the 

Army adopt new criteria. The result was cost avoidance of $220 

million for medical facilities, $310 million for parking. The resulting elimination of these 500,000 square feet of medical and 8 million square yards of parking allowed the Army to avoid tens of millions of dollars of additional costs in future operations and maintenance for those facilities. This is the kind of thinking that should 

take place as civilian agencies change the way they view their 

needs for real property. 

I would caution the Congress not to view the current initiative 

as a fire sale of assets for short-term gain. Rather, it should be 

viewed as an opportunity to effect permanent changes in Federal 

real property asset management practices. The most substantial 

benefit to the taxpayer will come through reduced year over year 

sustainment costs for facilities we no longer need. We should be 

ambitious and not miss an extraordinary opportunity to help Federal asset management professionals drive significant costs out of 

their system. 

My written statement offers several suggestions for the Subcommittee’s consideration. I would like to highlight six of them 

here. 

First, the Senate-confirmed Commission should operate for no 

less than 8 years, with official recommendations issued every 2 

years during that period. It will likely take two or three rounds to 

achieve the maximum benefits, where agencies truly get in sync 

with the process prescribed by the Commission, improvements in 

agency asset management business practices become institutionalH605-41331-79W7 with DISTILLER

7 

ized, and congressional and taxpayer expectations are met with regard to asset sale proceeds, property management cost avoidances, 

and other savings. 

Second, the Commission’s development of standards or best practices and criteria for evaluating agency recommendations is one of 

the keys to this process. The Commission should avoid a one-sizefits-all criteria, but done right, standard benchmarks can lead to 

the integration of improved business decision methodologies across 

all agencies. This would help ensure that realignment is an ongoing activity. Agencies should regularly evaluate their real property 

holdings and configurations as their missions evolve, business processes improve, and workplace realities change. 

Third, steps should be taken to ensure that departments and 

agencies have essential data to account for what they own or lease, 

where it is, what condition it is in, how it is being utilized, and how 

it compares to what is actually needed to support essential missions and programs. Without these important data points, decisionmakers will have diminished ability to effectively realign or improve management of their real property assets. 

Fourth, agencies should be given sufficient time to work through 

the thorny issues associated with making recommendations to the 

Commission. Done right, this process will require agencies to 

rethink their space requirements. Based on years of practical experience, including DOD BRAC, this undertaking requires sufficient 

time to promote the best choices. 

Fifth, Congress should consider requiring departments and agencies to prepare and publish workforce projections and planning criteria in the Federal Register. Defense BRAC required DOD to publish force structure plans and criteria for determining asset closure 

and realignment candidacy. This established consistency in the 

way recommendations were developed and would be helpful to civilian departments and agencies, as well. 

Finally, Congress should consider the establishment of a Resolution Trust Corporation (RTC)-type entity to take possession of all 

designated properties and dispose of them in a way that maximizes 

returns. This would reduce disposal burdens on agencies and promote bundling of assets across agencies as part of the process. 

While GSA is very skilled as a customer-focused landlord and does 

a good job there, its experience in bundling assets in creative ways 

to maximize returns is more limited. An RTC-type entity could effectively engage private development interests to successfully address such disposal innovations. 

To conclude, Mr. Chairman, I genuinely applaud your efforts to 

address this need. Congress should take care to design the process 

so that the taxpayer realizes the greatest benefit possible. 

Senator CARPER. Thanks, Mr. Baxa. 

Mr. Ford, please proceed. And if we get about 5 minutes into 

your testimony, I am going to have to maybe adjourn, or at least 

recess, but go ahead. I would like to get started. Please proceed. 

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8 

1The prepared statement of Mr. Ford appears in the appendix on page 62. 

STATEMENT OF TIM FORD,1 CHIEF EXECUTIVE OFFICER, 

ASSOCIATION OF DEFENSE COMMUNITIES 

Mr. FORD. Chairman Carper, Senator Brown, distinguished 

Members of the Subcommittee, we appreciate the opportunity to be 

here today. For more than 35 years, ADC has been the leading 

nongovernmental organization involved with the BRAC process. We 

represent over 250 communities that have dealt with or are dealing 

with the impacts of BRAC. Through our involvement with the past 

rounds and our current involvement in the property disposal process, we bring a vast experience with working with local and State 

Governments, the Federal Government, and the private sector on 

the impacts of Federal property transfer. 

As this Subcommittee considers legislation to dispose of excess 

Federal property, we hope that the lessons learned in the BRAC 

process, and in particular the impact of the role of communities 

and States should be given consideration. Communities and States 

have been a central part of the BRAC process since its inception 

in the early 1980’s. In fact, one of the major reasons we ended up 

with BRAC was to mitigate the concerns of communities and States 

regarding the transparency of the overall process. 

While decisions related to BRAC and the impact of communities 

and States have been challenging, the BRAC process has remained 

politically viable because of the independence of the process, a commitment to transparency, and procedures for engaging communities 

and States from the beginning through implementation of the decisions. As currently written, the Administration’s proposal risks 

making similar mistakes that were made in the 1988 BRAC round, 

and I will speak to recommendations that I think would improve 

the overall approach. 

First, it is critical to recognize that communities and States will 

be impacted and should be involved in the decisions regarding the 

Federal footprint in their area. Potential negative impacts for communities could range from the elimination of jobs, the movement 

of jobs, and then there are the implications of property redevelopment. 

At the same time, this process could have positive outcomes for 

communities and States. Working with local government and the 

private sector, there are opportunities to maximize the efficiency of 

the Federal footprint and enhance the local tax base. Engaging 

communities through the entire process may add complexity, but 

we think it is essential to the success of the process, and we see 

three critical elements to really building this engagement. 

First, transparency. The Administration’s proposal to establish a 

board rather than an independent commission will impede the objectivity of the process and could allow politics to influence decisions. The independent nature of decisions reached through the 

commission in the BRAC process has been critical to maintaining 

the support and involvement of communities. 

Second, institutionalizing community involvement. Given the 

length of the proposed process and its broad national impacts, 

mechanisms for institutionalizing community and State involvement need to be part of this legislation. First, to facilitate coordinaH605-41331-79W7 with DISTILLER

9 

1The prepared statement of Ms. Foscarinis appears in the appendix on page 67. 

tion with communities and States, the board should be required to 

establish regional-State liaisons that would manage interaction 

with affected areas. 

Second, in those areas where significant actions are taking place, 

the board should have the option to create a joint Federal-local 

agency chaired by the community or State and comprised of Federal-local members in the impacted areas. This entity could provide 

a mechanism for ensuring that local tools, such as zoning and land 

use entitlements, are in place to maximize the return to the Federal Government. A similar model has been very important in the 

successful transfer of property and military base closure. 

Third, given the ongoing budget discussion, there is strong interest in selling unneeded Federal property as a way to generate revenue. While it could be an option in some situations where market 

conditions are favorable, our experience in disposing of Federal 

property in BRAC has shown that cost avoidance rather than generating revenue through land sales is a more realistic goal. Attempts to focus BRAC property transfer on attaining fair market 

value and sales revenue have not been successful. In many instances, the value of the property decreased because of the extra 

carrying cost to the government while it tried to maximize the 

value in the marketplace. 

Another issue for property disposal involves the transfer of parcels to State and local entities for public benefit. Communities need 

to have a strong voice in this process and be allowed to petition, 

and in some cases receive Federal property at little or no cost if it 

meets local needs. Community involvement needs to be extended to 

the screening of property for homeless needs. In most instances, 

community and State leaders, not a Federal board, will understand 

their communities’ needs and can best accommodate the needs of 

the homeless. 

Finally, while there is value in using existing disposal authorities within Federal agencies, most agencies are not set up to manage significant property disposal actions. Centralizing the disposal 

authority into one agency with real estate and property expertise 

is essential. 

To conclude, communities and States can play an important role 

in the success of the Federal disposal effort. Creating a process 

that maintains independence and transparency while engaging 

communities will be key for successfully implementing this process. 

After a decision is made, the property disposal process must focus 

on partnering with local entities to expedite the process. BRAC, 

while complex, has taught us this process can create mutual benefits for all involved. 

We appreciate the opportunity to testify today. Senator Brown. 

[Presiding.] Great. Thank you very much. Ms. Foscarinis. 

STATEMENT OF MARIA FOSCARINIS,1 EXECUTIVE DIRECTOR, 

NATIONAL LAW CENTER ON HOMELESSNESS AND POVERTY 

Ms. FOSCARINIS. Thank you very much. Chairman Carper, Senator Brown, Members of the Subcommittee, I appreciate the opportunity to testify today. I am the Executive Director of the National 

H605-41331-79W7 with DISTILLER

10 

Law Center on Homelessness and Poverty. Our mission is to serve 

as the legal arm of the nationwide movement to end and prevent 

homelessness in America. 

Each year, more than 3 million Americans experience homelessness, including 1.3 million children. These numbers have increased 

as a result of the recession and foreclosure crisis. In fact, the U.S. 

Conference of Mayors estimated a 9-percent increase in family 

homelessness in 2010 alone. Over 70 percent of the officials surveyed for the report expect family and child homelessness to increase further during the coming year. 

The U.S. Government has committed itself to ending homelessness. Just a year ago, the U.S. Interagency Council on Homelessness released ‘‘Opening Doors: The Federal Strategic Plan to End 

and Prevent Homelessness.’’ The plan’s central belief is that no one 

should experience homelessness. No one should be without a safe, 

stable place to call home. 

Recently, our government stated before the world community 

that homelessness in our country implicates our human rights commitments and made a pledge to the world community to reduce 

homelessness. And Congress has made similar commitments, most 

recently in the HEARTH Act of 2009, which established a Federal 

goal of ensuring that individuals and families who become homeless return to permanent housing within 30 days. 

You might wonder what homelessness has to do with Federal 

surplus property. The answer is simple. In 1987, Title V of the 

McKinney-Vento Act put in place a set of important protections for 

homeless people. Under the law, homeless service providers have a 

right of first refusal to acquire Federal property no longer needed 

by the government to use it for urgent needs, such as housing and 

services for people who are homeless. 

More than 2.4 million Americans benefit each year as a result of 

this provision in the law. Formerly vacant Federal properties now 

provide shelter, transitional and permanent housing, case management, food pantries, job training, mental health and substance 

abuse treatment, and child care. Just in the States represented by 

Members of this Subcommittee, properties have been transferred in 

Alaska, Arkansas, Maine, and Montana. Massachusetts is also on 

that list, and I am not sure why I did not include it. 

As Congress reviews efforts by Federal agencies to dispose of surplus properties, homeless people must be protected, and I know the 

Committee is very concerned with cost reduction and I want to note 

that ending homelessness is not only the right thing to do, but also 

the fiscally responsible thing to do. It is more costly to allow homelessness to continue in our country than to end it, and Title V is 

one of the important Federal programs that can help us do that. 

I want to make three points that are elaborated on in my written 

testimony. The Title V process is not the cause of inefficiencies in 

the Federal property disposal process and thus it should be protected and not eliminated or drastically altered as a result of procedural reform. The process takes a mere matter of months, and once 

complete, the Federal Government may move forward with any alternative means of property disposal. We know that nearly all of 

the 14,000 properties on the list of existing—on the list of properties that have been screened through Title V, the review has 

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been completed and they are now awaiting transfer. Title V is not 

the cause of the hold-up. If there are reasons for the delay, they 

do not lie within Title V and thus Title V should not be altered to 

address the inefficiency. 

Second, while we reject this contention that Title V is causing 

delay, we agree that procedural reforms can be made to streamline 

the process and make it work in a faster and smarter way, and we 

are happy to work with the Committee to do that. We also believe 

that more Federal properties could be made available that would 

be useful in providing housing for homeless people and thus saving 

the Federal Government, ultimately, resources. 

Third point, we understand that the Subcommittee is now considering a legislative proposal put forth by the Office of Management and Budget (OMB) that would eliminate Title V and replace 

it with a BRAC-like process. We want to say that we cannot support this proposal in its current form. The protections that are in 

BRAC are not in place in this proposal and we cannot support the 

proposal without those protections. Those protections include representation of homeless people on the commission that would review property and it would include a right to have—by those representatives to refer a property to be screened for use on behalf of 

homeless people. 

This is not the time, as homelessness continues to rise across the 

country, this is not the time to take away an important Federal 

program to help homeless people that has been in place for almost 

25 years. This is the time for the Federal Government to be looking 

at increasing ways that it can assist in addressing the needs of 

homeless people. And as I said before, this is not only the right 

thing to do, it is also a cost effective—the cost effective thing to do, 

because homelessness not only costs lives, it costs resources. 

So with that, I will submit the rest of my testimony for the 

record. I thank you very much for the opportunity to testify and I 

would be glad to respond to questions. 

Senator BROWN. Great. Thank you very much. 

Obviously, I have Senator Begich here and Senator Coburn. I 

will start off. We will do 7-minute rounds and then we will alternate until the Chairman gets here. He went and voted. 

Mr. Ford, if I could just start with you, I know that in your testimony, you emphasize the importance of a commission as opposed 

to a board. How would the creation of a board instead of a commission impede the independence of the President’s proposed process, 

if at all? 

Mr. FORD. I am not the expert on all the differences between the 

board and a commission. We know the experience in BRAC with 

the commission, which is independent, Presidentially appointed—— 

Senator BROWN. Right. 

Mr. FORD [continuing]. It is not within an agency, so it has the 

independence to make decisions and can establish its own transparency requirements. It has been a process that has been successful through BRAC. 

Senator BROWN. And, Mr. Baxa, during your experience with the 

BRAC process, any mistakes that you encountered that we should 

avoid in administering the civilian property realignment proposal? 

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12 

Mr. BAXA. Well, I think some of the things that probably I would 

call attention to is that there were instances where there could 

have been more done to help, I think, localities deal with these big 

closures. I am not sure, though, that the same thing applies to a 

civilian BRAC, since we are not looking most likely at shutting 

down small cities like we were in the case of many defense installations. So I think there are different parameters that come into play 

that need to be recognized. 

Senator BROWN. And, Mr. Ford, back to you. There are many 

stakeholder interests involved in the disposal of Federal property. 

We see that all around. There is California, other types of States 

that have parochial interests, obviously, in protecting or eliminating or dealing with these types of properties. Do you have any 

suggestions how to ensure that we have an efficient process while 

also considering any stakeholder interests? Do you have any 

thoughts on that? 

Mr. FORD. I think it is establishing a process from the beginning 

so you are engaging the communities and the States and the regions in the decisionmaking process. I think some of the early attempts at base closure were done sort of from a Washington perspective and they started just making decisions and the communities and the States kind of fought back, and that is why we 

ended up with BRAC as a more transparent process. So I think it 

is establishing a system to engage the communities so that they 

are working with the commission or board, and I think it—again, 

it adds some complexity to it, but it could make the whole process 

move more smoothly. 

Senator BROWN. And, Mr. Baxa, on the 14,000 properties you indicated have little market value, what is that? What type of properties, just so anyone listening—what type of properties are we 

talking about? Are we talking undevelopable plots of land, abandoned buildings—— 

Mr. BAXA. If you look at the list that has been put out by OMB 

at this point in time, I think you can see there are a number of 

very small structures that are part of that. There is obviously open 

land. And some of them are scattered around in remote areas. And 

those, I think, would probably have little or no value. There are 

some that are on Federal enclaves that could not reasonably be 

cordoned off—— 

Senator BROWN. You cannot get access? Access issues? 

Mr. BAXA. Right, to generate any—— 

Senator BROWN. Yet where we are actually spending money 

maintaining these buildings. 

Mr. BAXA. Exactly. So the real savings are what comes down the 

road. 

Senator BROWN. Right. So would the recommendations also be to 

just tear a building down? 

Mr. BAXA. I think, in some cases, that is the logical disposal approach. 

Senator BROWN. So what has taken so long up to this point? I 

mean, it seems we are spending $1.7 billion keeping some of these 

properties maintained, yet they have no fair market value or resale, et cetera. 

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13 

Mr. BAXA. There has not been a strong impetus to dispose in the 

past. I think that may have slowed things down. I think there are 

some environmental considerations. I do not have the full view of 

all of those properties, but there certainly are a number of different 

hurdles that have to be overcome in the disposal process. 

Senator BROWN. I will just wrap up with Ms. Foscarinis. So you 

indicated that you are not in favor of the President’s proposal and 

that you have suggestions to help streamline the process. What are 

your suggestions? What type of things do you have? 

Ms. FOSCARINIS. First of all, our first point is do not alter Title 

V, because Title V is not the cause of the problem. It is not the reason why those 14,000 properties are languishing and costing the 

Federal Government. 

Senator BROWN. What do we do about those 14,000 properties? 

What are your suggestions with that? 

Ms. FOSCARINIS. Well, I can address only the issue of Title V. So 

I think with regard to Title V, there can be better targeting so that 

the properties that truly could be of use for homeless people are 

targeted and made available, offered for that use to service providers. 

Senator BROWN. OK. 

Ms. FOSCARINIS. Right now, there is all kinds of properties that 

go through the Title V process that are not of any practicable use. 

Those include national security properties, air strips, all kinds of 

properties that could not conceivably be used to house anybody. So 

those do not need to go through Title V process. There could be better outreach so that service providers serving homeless people become better aware and are also assisted in the application process. 

That would also speed it up. 

Senator BROWN. OK. Well, thank you. 

I am going to turn it back over to the Chairman. I have completed my questions, so I started and then we have two new Members. 

Senator CARPER. 

[Presiding.] How did they do in answering those questions? 

Senator BROWN. They did very well, thank you. 

Senator CARPER. OK. That is good. All right. 

Senator Begich, why do you not go ahead, and feel free to make 

a statement if you would like. 

Senator BEGICH. Thank you very much. I will probably combine 

it here. 

I am listening to the testimony and the ideas, and I come from 

a city where for 20-some years we have had surplus properties and 

we put them into what we call the Heritage Land Bank, run by an 

independent board appointed by the mayor under both Republican 

and Democratic mayors. They hold the land in trust and then they 

release the land and sell it off or they look for public purpose. 

And so I am listening to your concerns, because we had the same 

concerns. We have a high homeless population. We also recognize 

every property—I am from the real estate industry, and I will tell 

you, every property has value. There is no property that has not 

had value. Someone will figure it out. I have seen this time and 

time again with properties that maybe there is no public purpose, 

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14 

but there is a sliver and they take it and they develop it in some 

way, and it is amazing what they will do. 

So I am looking at this from a very simplistic purpose, or simplistic idea, that taking all this surplus property, I do believe it 

should be an independent board that disposes of this, because if 

you leave it to government, I do not know how long that will take. 

And I do not mean dispose in the sense of just selling, either. I 

think a combination of things here. 

I want to throw out a thought, and then if you could respond. 

Why not—and I am not sure, the BRAC to me, it is day and night. 

BRAC is a whole different process. We had to deal with it in Anchorage, so it is about, like you said, towns disappearing, commercial centers disappearing. These are buildings and facilities that 

most people drive by and go, ‘‘What is that?’’ ‘‘Who owns that?’’ And 

then they go by and then there is a window broken and they go, 

‘‘Oh, it must be some government property because they are not 

maintaining it,’’ and we would get the calls when I was mayor all 

the time. 

So why not just take all these properties, the 14,000, and you can 

protect Title V. You can say it is going to be a new law. We are 

going to put these 14,000 properties or whatever else might occur 

over the years. The board’s purpose is to have three goals, or two 

or three goals. One is, look at these properties for public purpose. 

Put those aside. The properties that have no public purpose, those 

are then to be inventoried, valued, or put on the market to sell. 

And then there is usually this third category that they are really 

not sure yet because there may be, there may not be, and there is 

some more analysis that has to be done, and the board continually 

looks at the inventory that occurs, because the inventory of the 

Federal Government does go up and down, depending on what is 

going on in the different industries, or like we are right now consolidating Homeland Security properties into one building. I do not 

know if they are all leased. Maybe they are. Maybe there are some 

government buildings that will appear as surplus. 

Why not just keep it that simple and just, that is what we do. 

You keep the concept of Title V in play in the sense of this goal, 

but we also get rid of some of these properties that, as you have 

just identified, I mean, airfields, I will guarantee you, someone will 

buy that airfield. Who knows what they will do with it, but they 

will buy it. Why not do something like that? 

OK. I see a lot of nodding heads. I am afraid to ask for any 

verbal comment, then, because if you are nodding your head yes— 

to me, it just seems so logical. To try to replicate the BRAC in this 

situation is not what it is about. It is about taking property we just 

do not utilize for U.S. Federal Government purposes anymore, but 

it may have other purposes. Comments? 

Ms. FOSCARINIS. Senator, if I may respond, I think that there is 

a lot that can be done to reform, as you just indicated. Our first 

goal would be to keep Title V separate from this process—— 

Senator BEGICH. I have heard that. Do not worry. 

Ms. FOSCARINIS. Well, because the hold-up happens after the 

Title V process—— 

Senator BEGICH. I understand that. 

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Ms. FOSCARINIS. And so from our perspective, the safest and best 

thing from the point of view of homeless people, who are often not 

in a position of power at all in this process. Is to keep Title V separate and address the reform post-Title V. And your suggestions, I 

think, make a lot of sense. 

Senator BEGICH. We used to do a lot of partnership with Habitat 

for Humanity, Cook County Housing Authority, for that simple 

purpose. But they just would inventory the property and there is 

stuff that they could use and there is stuff that they would look 

at and say, never possible. And then there is stuff that we would 

have to debate, the board would debate on highest and best value, 

both from a community and the social service side. 

Mr. BAXA. Senator, if I may, I think we are calling it a BRAC 

process, but this civilian property realignment process with a commission, I think, puts some special impetus on getting the job done, 

and so having that in play, I think, provides, if you will, a chance 

for decisions to be made that may be politically difficult to make 

outside of that construct, and so I would suggest that something 

along the lines of a BRAC commission and I do favor a commission 

because I think it has a wider acceptance—would, in fact, help us 

to get to the end game much more rapidly than we would otherwise. 

Senator BEGICH. Go ahead, Mr. Ford. 

Mr. FORD. And I think that there is—I mean, in discussions 

about this process, there has been some assumptions that a commission could look beyond the 15,000 properties on the surplus list 

to really looking at how to create efficiencies across the Federal 

footprint and that agencies probably have not listed some of the 

properties that the commission might consider. So this could have 

a broader impact. I think the history of BRAC, especially in this 

last round, where BRAC used to be about closing bases, in our last 

round, it really became about transformation. But again, BRAC is 

really just a decisionmaking process. At least it is a process that 

has shown the ability to deal with local politics and Federal-level 

politics. 

Senator BEGICH. Yes. I guess—I appreciate it. That is great. I 

agree with you that it is semantics, whatever you call it, just a 

mechanism. I worry, and maybe I am naive about this, but I am— 

the political controversy of getting rid of properties that no one 

uses, at least as a mayor and someone who sat as a mayor for 5 

years and 10 years on the city council, is not really controversial. 

The controversy occurs that you do not do it and it becomes dilapidated, falling apart and deteriorating, where the neighborhoods 

then get upset because you have not done anything. 

And that is where—so I hear—BRAC is so much—I mean, I understand the politics of BRAC. That is like a nightmare, which base 

should be closed, who should not be closed, all the business that 

would be affected. But when you have surplus properties, I just— 

maybe I am, again, naive about this. I do not see the controversy 

even comparable to BRAC. I understand BRAC is a process, but— 

just some thoughts there. I think there is a way to do this very easily and I hope we do not over-think this, because I think it is a way 

to make this happen for the benefit of both ends but at the same 

time meet our goal, which is we do not want these properties if 

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they are costing us money and there is no public purpose from a 

Federal Government side. There may be community public purpose 

and/or the faster you get this out into the market, if it is not a public purpose property, you are going to produce economic development, which produces new revenue streams for those local communities and it just dominoes. 

So I just—I hope we are not—what I have learned around this 

place is we sometimes over-think these issues to the point where 

it is not that complicated. And I will just say from a local government perspective, a mayor, we have done this. Mayors have done 

this a lot around the country and it seems to work. So I am just 

throwing that on the table as a concept. 

I understand when you say realignment, really, what you are 

doing is you are reassessing the assets of the Federal Government. 

It is not realigning anything. You are just reassessing. They do not 

need that anymore, so now we will pull that and move it over here. 

So I think we are all saying the same thing. It is just the mechanism. I do not want us to get it complicated, that is all. 

That is all, Mr. Chairman. I like this. I mean, I am all for this. 

I know Mr. Coburn and I have talked about it. Mr. Chairman, we 

have talked about it. I think this is the right movement to do. It 

is, just let us not make it too complicated or we will never do it, 

or it never will happen and we will have 14,000 properties backed 

up. 

Senator CARPER. All right. Senator Coburn has worked on this 

stuff for many, many years. I think we are going to make some 

progress here at last and I thank you for your work in all those 

vineyards and for being here today. 

Senator COBURN. I appreciate it. Thank you. 

I was just going to reply to Senator Begich that it is not simple 

because you have every roadblock in the world. There are over 

70,000 properties. We have only got 14,000. We have 70,000. The 

$1.2 billion does not come close to the cost of maintaining those 

70,000. That is just the 14,000. So we have billions of dollars. 

The question I would ask Ms. Foscarinis, should we use cost-benefit analysis? I mean, we have Title V here and we have a building 

that we could sell for $5 million and yet the homeless can use it 

and they would have to put another million in it, and really, it is 

not the appropriate structure, and for $1.5 million, we could get the 

ideal structure. Why would we not do that rather than say, well, 

we are going to do this because we have Title V sitting there blocking an actual good sale of a building for a real purpose when we 

could take some of the profits from that and put it into homeless? 

Why would we not want to do that? 

Ms. FOSCARINIS. Well, we do that sometimes. In fact, there are 

examples of groups that have—— 

Senator COBURN. Yes, but most of the time, we do not do 

that—— 

Ms. FOSCARINIS. Well—— 

Senator COBURN [continuing]. And most of the time, it becomes 

an inhibitory factor for us to get rid of buildings. 

Ms. FOSCARINIS. Well—— 

Senator COBURN. And it is not just Title V. It is true in my State. 

When we are sitting at $14 trillion worth of debt and we are 

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drowning in debt and we are saying, instead of making smart 

moves, the right appropriate economic move, we are going to give 

a building to a State or city or something like that by law because 

we have to, when, in fact, what we should be doing is sell it and 

lowering the debt, and then we have an obligation to help take care 

of the homeless. Your accounts say, you cannot touch Title V. Well, 

we are going to have to touch Title V, but that does not mean we 

cannot touch it in a way that makes it better, not less than what 

it is. 

So I hope you will consider, as we go through this, if we have 

a commitment to the homeless, then we ought to do that in the 

most cost-effective way, and what we have is a bureaucracy now 

lined up that says, basically, you cannot get rid of any real property. I mean, that is really what has happened. I have been working on this for now 13 years, to try to get some movement, and 

every time we get close to a movement, we get blocked. And the 

No. 1 thing that blocks it is Title V. People get afraid. Rather than 

say, OK, we will make a commitment over here to homeless, but 

what we have heard is you cannot change this. And what we need 

to do is make a commitment to homeless, but also do the smart 

thing economically for the country, and that is why I am very supportive of the idea behind this, because I think it will do it. 

Let me ask a—— 

Ms. FOSCARINIS. Senator Coburn, may I respond, respectfully, 

please? 

Senator COBURN. Sure. 

Ms. FOSCARINIS. I know that you have been working on this issue 

for many years, as have we. The issue of Title V is not the problem 

here, if I might just—— 

Senator COBURN. I disagree. 

Ms. FOSCARINIS [continuing]. Respectfully disagree with you—— 

Senator COBURN. I have looked at it. It is a problem. 

Ms. FOSCARINIS. Title V is a matter of months in the process. 

The reason that the 14,000 properties are languishing is not due 

to Title V—— 

Senator COBURN. No, I am not talking about—Title V is a problem because we inappropriately match properties to the benefit of 

Title V, which is not the best, efficient way to match what the 

homeless need. And what we should say is here is how much property we have. Here is our commitment to the homeless. Forget all 

this and go sell the property and give some of the money to the 

homeless and let that happen. We are making something very, very 

difficult, and every time we try to move anything on this, what we 

hear—you are very effective. You are very effective because you 

have dead stopped every movement at property reform in the Congress in the last 13 years. 

Ms. FOSCARINIS. Well—— 

Senator COBURN. It has been dead stopped. 

Ms. FOSCARINIS. I guess I should be flattered. 

Senator COBURN. It is a compliment. You are very effective lobbying for the homeless. But the point is, is if we really care about 

our country and the homeless, we will do both. And when your adamant statement is you cannot touch Title V—— 

Ms. FOSCARINIS. Well—— 

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Senator COBURN [continuing]. What you are saying to us is there 

is not another way to care for the homeless in this country except 

the way we are doing it today, and I reject that. I want you to 

know—— 

Ms. FOSCARINIS. Senator Coburn, I do not mean to interrupt, but 

I think you might have missed our statement where I said that we 

are happy to work with the Committee to reform Title V to make 

it better and we are open to reforms that will streamline it, that 

will make it work better—— 

Senator COBURN. But you are still stuck on Title V. What about 

just a commitment to the homeless in this country because it is the 

right thing to do outside of Title V and separate it from real property? 

Ms. FOSCARINIS. Well, sure. There are many things that need to 

be done, and it is not just about Title V. You are absolutely right. 

And Title V alone will not solve the problem of homeless. But in 

many communities, the absence of a piece of property is the key 

factor, the key barrier—— 

Senator COBURN. You are missing my point completely. Take the 

money. Separate real property from homelessness. Commit a portion of the money to homelessness. Create the organization where 

you do the ideal thing for the homeless rather than the less than 

ideal. That is all I am saying. 

Ms. FOSCARINIS. Right. I understand. I understand. I think we 

need to do both, because there needs to be money and Title V can 

also serve an important role. We are not talking about a lot of 

properties. Each year, there are only a few properties that go 

through Title V and are used for homeless purposes. But those 

properties make a big difference—— 

Senator COBURN. But every property in the Federal Government’s warehouse has to go and encounter Title V to see if it is 

available. Well, that is crazy. 

Ms. FOSCARINIS. Well, that is why we are saying we do think 

that the process can be reformed, because right now, there are 

many properties that go through the process that are of no conceivable use to homeless people. 

Senator COBURN. That is right. 

Ms. FOSCARINIS. And so we would be happy to work with the 

Committee on a targeted—— 

Senator COBURN. So when we tried to change that 4 years ago, 

what we got was feedback, no, you cannot do that. 

Ms. FOSCARINIS. I believe we proposed, and we have worked with 

this Committee on sensible reforms that would target properties. 

Senator COBURN. Well, that was not our response on the floor 

when we had a bill on the floor. 

Let me—I want to followup a little bit with Senator Begich, and 

I think we can really use a lot of his experience. I think, first of 

all, I think he knows real estate, one. It is kind of like an old haberdasher told me. You never short-sell the suit. You keep it on the 

rack because there is always somebody that is going to come and 

buy it. You may not get as much as you wanted, but you can always sell it. 

I think Senator Carper’s idea and this idea of getting our hands 

around real property—what I want to ask you is also we have seen 

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because of our budget process that we have to account for the cost 

of a new facility under the budget guidelines in the year we take 

possession. And so, consequently, what we have seen is we have 

gone from buying properties to leasing properties, and quite frankly, that costs the Federal Government a whole lot more money. 

Do you have any comments on the stupidity—and those are my 

words—of a budget process that forces us into leasing properties at 

a great deal more expense than what we could buy them for now? 

Does anybody have any comments on that? 

Mr. BAXA. I would simply say, if I may, Senator Coburn, that it 

just does not seem to make reasonable sense that you cannot count 

the total cost of a lease in the process of trying to decide whether 

you are going to do it or not. If I were leasing on my own for my 

own personal purposes, I would certainly look at that and count 

that as part of the cost of acquiring that particular—— 

Senator COBURN. And you would do a cost-benefit analysis on 

what the net cost to you over the life utilization—— 

Mr. BAXA. Over the expected life of that—— 

Senator COBURN [continuing]. Lease compared to purchasing 

ability. 

Mr. BAXA. Exactly, and I know we have worked with elements 

of the Defense Department to try to help them to figure out where 

they could take things out of lease and put it into governmentowned facilities, and we have driven a lot of cost out of the lease 

bill for the Army, as an example, by doing that. 

Senator COBURN. But some of the smaller agencies really do not 

have that option, because if they buy a property, we charge it to 

them in the year they buy it—— 

Mr. BAXA. Exactly. 

Senator COBURN [continuing]. Rather than amortize it over the 

life of the building. 

Mr. BAXA. Yes, sir. 

Senator COBURN. Any comments, Mr. Ford? 

Mr. FORD. No specific comments. I mean, that is—I think his expertise is probably more clear in this area. 

Senator COBURN. All right. Thank you, Mr. Chairman. I went 

over. I apologize. 

Senator CARPER. That is quite all right. 

I want us to hit rewind and go back about 3 or 4 minutes to the 

exchange between Ms. Foscarinis and Senator Coburn, and I am 

going to ask Mr. Baxa and Mr. Ford to—you have been sitting here 

listening to this back-and-forth, and just to share your wisdom with 

us in how we actually end up with a better outcome here but we 

do not turn our backs on the homeless. What advice would you 

have for us? 

Mr. FORD. Every base closure community, every community impacted by BRAC has to go through a process. Now, it is different 

and there have been some changes, and I will not speak to all the 

technical changes that BRAC communities face. But what has always been important is maintaining the community role in that 

process, so community leaders are at the table trying to figure out 

what is in the best interest of their community. 

So in the case of BRAC, the homeless providers are working with 

the local redevelopment authority to make these decisions, so it— 

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and that local redevelopment authority has a plan that they are 

trying to implement. So it becomes not sort of an abstract discussion of what is going to be good for the homeless, but it is really 

fitting in with an overall concept of how to reuse land, and the biggest focus for a BRAC community is to get jobs back to replace the 

jobs they lost. 

So I think it is a much more comprehensive approach to it, and 

while I cannot say it has not been without challenges, because all 

of our local redevelopment authorities around the country would 

say it can create a lot of headaches, it has been a process that at 

least has allowed them to move forward and has not been a huge 

stumbling block for moving forward. 

Senator CARPER. Mr. Baxa. 

Mr. BAXA. I can only say that it is one more step in the process. 

I think what Senator Coburn has outlined certainly seems to make 

sense, that we could accomplish the same ends and not hold up the 

process of getting the most from those assets that we no longer 

need. 

Senator CARPER. Ms. Foscarinis, when you referred for agencies 

that one of the obstacles—I am going to go back and recover some 

of this ground, but I think it is important—but one of the obstacles 

to property disposals is the lengthy screening process that must be 

performed before a property can be put on the market for sale. Just 

take a minute. Let us just back up. Explain to us, if you will, how 

does the McKinney screening process work, how an agency determines if a property is suitable for the homeless? And, on average, 

how long does it take for property to be transferred to a homeless 

service provider? Just—— 

Ms. FOSCARINIS. Sure. 

Senator CARPER. I call it, like, 101. 

Ms. FOSCARINIS. Right. Well, the properties are listed in the Federal Register and there is a 60-day period during which homeless 

service providers have first crack at the property. So during that 

60-day period, they can submit a letter of interest if they are interested in the property. If there is no interest, the property is free 

to be sold. So 60 days. 

If there is a letter of interest submitted, there is a 90-day period 

for a full application to be submitted, and that is either the application is submitted and the process goes forward and it is reviewed 

by the Department of Health and Human Services (HHS) and the 

property may or may not go to the homeless service provider, or it 

does not go forward and then it is over and the property is free to 

be sold. 

So it is a matter of months that the property goes through the 

Title V screening process. 

Senator CARPER. Now, what advice could you offer to streamline 

that process? 

Ms. FOSCARINIS. Well, one way would be to target the properties 

so that—right now, there is a very kind of broad brush approach 

to this. Basically, there are a lot of properties that are published 

as being suitable for use for homeless purposes under Title V that 

really are not. So there are these national security properties or 

properties that are contaminated that are not habitable, or the airstrip example, or properties that—— 

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21 

Senator CARPER. The what example? Airstrip? 

Ms. FOSCARINIS. Airstrip, for example, an airstrip that is listed 

that could not conceivably be used by a homeless service provider. 

So there could be a more targeted process that happens up front 

so fewer properties go through the process, but better properties, 

properties that are more likely to be usable for this purpose, and 

we have made that recommendation. We have made that proposal. 

There could also be a greater effort to—right now, there are often 

hold-ups in the application process. This is a very cumbersome 

process. These are very often very unsophisticated homeless service 

providers. HHS will often come back to them with a request for additional information which further holds up the process, so the application process itself could be streamlined or more assistance 

could be offered. 

Senator CARPER. Mm-hmm. 

Ms. FOSCARINIS. So those are some of the ways that I think the 

process could work better serving everybody’s interest. 

Senator CARPER. All right. 

Ms. FOSCARINIS. It is not our interest to hold up lots of property 

that is of no possible use to anyone. Our interest is simply taking 

these resources, which are public resources which are often very 

valuable to the providers, because getting a piece of real estate is 

often the biggest barrier. Not having access to property is often the 

biggest barrier to providing services or housing for homeless people 

in a given community. 

Senator CARPER. OK. Thanks. In Dover, Delaware, we have a 

huge Air Force Base—— 

Ms. FOSCARINIS. Mm-hmm. 

Senator CARPER. And we have on that Air Force Base huge airplanes, C–5, one of the largest aircraft in the world, C–17, another 

major airlifter in our armed services. About 5 miles away, we have 

the Dover Federal Building, and every 5 or 6 years when we go 

through the BRAC process, there is always great concern what is 

going to happen to the Dover Air Force Base, which employs about 

5,000 people, the largest employer south of the Chesapeake and 

Delaware Canal in our State. 

I have always said to the folks in Central and Southern Delaware, BRAC can be our friend, and as it turns out, BRAC has been 

our friend at the Dover Air Force Base. Activities that were previously done in other States, other bases, are now being consolidated in Dover. So it has been beneficial to us. 

We have a Federal building about 5 miles away that is eventually being emptied out. We moved out of there about a year or so 

ago. Congressman Castle, now Congressman Carney, moved out 

more recently. But the Federal building sits on about a piece of 

property roughly half the size of a football field, maybe the size of 

a football field, but certainly not more than that. The base itself 

is quite large, as you might imagine. And the 5,000 people work 

at one and there are fewer than 100 that probably work at the 

other. 

I have been through the BRAC process as a Governor. I have 

been through it as a Congressman. I have been through it as a 

Senator. And it just seems to me that there are some real differences between disposing of Dover Air Force Base and the FedH605-41331-79W7 with DISTILLER

22 

eral building in Dover, a two-or three-story Federal building. Let 

me just ask of each of you, what are some of the key differences 

between the Administration’s proposal for a Civilian Property Realignment Board and BRAC? What are the key differences? What 

are the key similarities? And what are our lessons to be taken from 

those similarities and differences? 

Mr. BAXA. If I might, Senator, one of the key differences that is 

right off the top is the board versus a commission, and it seems 

that the commission structure has worked well in BRACs in the 

past and that commissions tend to have inherent in them the ability for the legislative branch to recommend appointees. They seem 

to be more bipartisan in terms of their construct. And I think, then, 

as a result of the commission structure, it tends to carry more 

weight, to be more credible than many boards have been in the 

past. And so that is one certainly key difference. 

I think the other difference is that we have a little bit different 

scenario in the fact that with the Civilian Property Realignment 

Board or Commission or Act, you are talking about multiple independent civilian agencies, and OMB is the most likely capstone 

that would provide some oversight to that. In the case of BRAC, 

you had the Secretary of Defense who depended on the services and 

the defense agencies to make recommendations and then there was 

a certain normalization that took place at the OSD level before 

that was, in turn, submitted to the commission, and I think there 

needs to be a step like that included in the civilian side so that— 

and OMB could possibly play that role—so that you have the same 

opportunity to kind of look across the agencies at the recommendations that are being made because there may be some opportunities 

to do some colocation, some combinations that cross agencies that 

would be worthwhile for the government to consider, given our current budget situation. 

Senator CARPER. Thanks. Mr. Ford, same question. 

Mr. FORD. I think that the point that was made is that DOD 

started this process wanting to get rid of property. I mean, they 

have wanted to get rid of bases along the way but Congress has 

stopped them. So the motivation is slightly different in starting 

this, because I do not think a lot of agencies necessarily—they will 

put forward their surplus, but are they going to really put forward 

maybe higher-value pieces of property that could be consolidated or 

taken out of the Federal portfolio. 

And again, this whole difference between the commission and the 

board, I think that there is the independence of it and the ability 

to make those decisions, I think is a big difference. 

I think this also has the opportunity, because you are not going 

to necessarily have communities like in BRAC who are going to be 

necessarily defensive, who are going to be posturing to try to save 

something. So there is probably an opportunity to work with a community and figure out, maybe they have an asset where Federal offices could be consolidated and it would be easier to sell a piece of 

property that the Federal Government owns. And it also would be 

an opportunity to work with the private sector. So I think there are 

a lot more opportunities to develop some creative solutions to this 

at the local level. It is a win for the community and a win for the 

Federal Government. 

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23 

And I think the other issue that crosses both is this whole issue 

of property disposal. I mean, we still are dealing with property disposals from the 1988 and 1990s BRAC rounds. You still have land 

that has not been disposed of. So it is not an easy process. Even 

the smallest pieces of property can be challenging. 

So on the BRAC side, we only had to work with three services, 

and that has been a struggle because each of them took a law that 

came down and interpreted it their own way, so I cannot imagine 

working with 16 or 20 different agencies, trying to do disposal. So 

I think, again, consolidating the disposal authority into some sort 

of entity that is able to move these properties quickly and has the 

real estate expertise to put these public-private deals together 

would help everyone. 

Senator CARPER. What entity would you suggest that authority 

reside in? 

Mr. FORD. Of course, GSA has those skills. That is one option. 

I think the RTC has always—has actually been discussed in BRAC 

for years. So I think there are a variety of ways to look at it. I 

mean, it is probably something that takes a lot more analysis to 

figure out what makes sense, but the focus on expediting the transfer of property as quickly as possible should be the goal. 

Senator CARPER. All right. Thanks. Senator Brown. 

Senator BROWN. Mr. Chairman—— 

Senator CARPER. I am sorry. Ms. Foscarinis. 

Ms. FOSCARINIS. Oh, well, if you—— 

Senator CARPER. No, please. I am sorry. 

Ms. FOSCARINIS. OK. That is fine, Senator. Well, from our perspective, the BRAC process is quite different from the process currently being proposed by the Administration because it has very explicit provisions to safeguard homeless people and their needs as 

part of the disposal process. So in the BRAC process, the needs— 

it is written into the law that the needs of homeless members of 

a given community must be considered in disposing of the base 

property. Homeless people—representatives of homeless people 

must be also part of that process and the Department of Housing 

and Urban Development (HUD) must oversee the disposal of a 

property in order to ensure that the needs of homeless people are 

addressed. So that is very different. All of those protections are 

missing from the Administration’s current proposal. 

Senator CARPER. Senator Brown says he has no more questions 

for this panel. I have just one more and then we will excuse you. 

Mr. Baxa, in your testimony, you suggest that we consider a Resolution Trust Corporation, something I got to know pretty well as 

a member of the House Banking Committee during the savings and 

loan (S&L) crisis. 

Mr. BAXA. Mm-hmm. 

Senator CARPER. You suggest we consider a Resolution Trust 

Corporation-like entity and assist the government in liquidating 

some of the surplus real property assets. Just take a minute and 

let us just drill down on that idea—— 

Mr. BAXA. Yes, sir. 

Senator CARPER [continuing]. And if you would, describe for us 

how you think that might fit into a civilian BRAC process. 

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24 

Mr. BAXA. If you look at what happened on the defense side over 

the many rounds, each of the services and the defense agencies, but 

most of the services had to develop their own disposal office that 

took care of the implementation plans to implement what decisions 

had come from the commission. 

I think we certainly do not want to try to recreate that in every 

landholding agency in the Federal Government. We could create a 

situation where the various agencies might be bidding for certain 

talent against each other in order to be able to staff for fairly sizable disposal activities. 

I would also suggest that the Resolution Trust Corporation be 

enabled to bring in real estate development interest and other professionals into an arena where they could begin to look at combining and bundling. So if you took, for instance, you had many 

properties that might be in different cities around the country, it 

might be possible to bundle those and make that very attractive to 

a particular business that needed to be located in all of those various locations. And so having the wherewithal and the talent to be 

able to put together those kinds of packages, I think, could facilitate the disposal process and perhaps get a higher return for those 

properties than might otherwise be the case. 

Senator CARPER. All right. Good. Thanks. Does anybody have 

anything else that you want to add before we excuse you and invite 

the next panel to join us? 

Ms. FOSCARINIS. Thank you for the opportunity. 

Senator CARPER. All right. You bet. Our thanks to each of you. 

Our Members have 2 weeks to submit questions. Some of our colleagues who were not here and could not ask questions have up to 

2 weeks to submit their questions, and we just ask when you receive those that you respond to them promptly. Again, our thanks 

to you all. 

Ms. FOSCARINIS. Thank you. 

Mr. BAXA. Thank you. 

Mr. FORD. Thank you. [Pause.] 

Senator CARPER. I am going to go ahead and introduce our second panel of witnesses while some people make their way to the 

door and some people make their way into the room. But we welcome all of you. 

Our first lead-off witness is the Honorable Daniel Werfel. It is a 

good thing we do not have to pay Mr. Werfel on an appearance 

basis, because if we did, it would drive up the deficit even more. 

But Mr. Werfel serves as the Controller of the Office of Federal Financial Management within the Office of Management and Budget. 

He is no stranger to our Subcommittee or to our Committee. As 

Controller, he is responsible for coordinating OMB’s efforts to initiate governmentwide improvements in all areas of financial management, including real property. Mr. Werfel holds a Master’s degree in public policy from Duke, a Juris Doctorate from the University of North Carolina at Chapel Hill—I do not know how you put 

those together when Duke plays Chapel Hill UNC—and a Bachelor’s degree in industrial and labor relations from Cornell, three 

pretty good schools. 

Robert Peck serves as Commissioner of Public Buildings for the 

U.S. General Services Administration. As Commissioner, he is reH605-41331-79W7 with DISTILLER

25 

sponsible for managing some 362 million square feet of government-owned and leased space. Prior to being the Commissioner, he 

served as Managing Director of Jones Lang LaSalle, where he advised corporations, governments, and nonprofit institutions on real 

estate portfolio strategies. 

Mr. James Sullivan is the Director of the Office of Asset Enterprise Management at the U.S. Department of Veterans Affairs 

(VA). Nice to see you. He assumed this new leadership role in 2009 

after serving as the Deputy Director since May 2002. Mr. Sullivan 

has over 25 years of experience in capital budgeting, in planning, 

and in asset management. Is that true? 

Mr. SULLIVAN. Yes. 

Senator CARPER. Just checking. He plays a pivotal role in managing some of the largest portfolios of property in the Federal Government. 

Mr. David Wise is the Director for Physical Infrastructure Issues 

at the U.S. Government Accountability Office, also affectionately 

known as GAO. He specializes there in transportation and communications and Federal real property issues. His career at GAO 

dates back to 1951—or 1981. [Laughter.] 

Mr. WERFEL. Thank you. [Laughter.] 

Senator CARPER. Mr. Wise has a Bachelor of Arts (BA) in political science from the University of Pittsburgh—he is a Panther— 

and a Master’s degree in public Administration from Pitt’s Graduate School of Public and International Affairs—twice a Panther. 

All right. Good to see you. 

Brian Lepore is the Director for Defense Capabilities and Management Issues at the U.S. Government Accountability Office, 

GAO. He directs audits and evaluation teams reviewing the Department of Defense’s support infrastructure programs, including 

base realignment and closure. Mr. Lepore holds a Master’s degree 

in public Administration from Suffolk University in Boston and a 

Bachelor’s degree in communications studies from the University of 

Massachusetts in Amherst. Let me just guess, who do you root for 

when the Red Sox play the Yankees? 

Mr. LEPORE. It is an easy call, Senator. 

Senator CARPER. All right, thanks. [Laughter.] 

Senator CARPER. Thank you and the rest of our panelists for 

being with us here today. Again, we normally ask our witnesses to 

take about 5 minutes to testify, and after that, if you get way over 

that, we will rein you in, but feel free to summarize. Your entire 

statements, believe it or not, will be made a part of the record. Mr. 

Werfel. 

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1The prepared statement of Mr. Werfel appears in the appendix on page 74. 

STATEMENT OF DANIEL WERFEL,1 CONTROLLER, OFFICE OF 

FEDERAL FINANCIAL MANAGEMENT, U.S. OFFICE OF MANAGEMENT AND BUDGET 

Mr. WERFEL. Thank you, Chairman Carper and Senator Brown, 

for holding this hearing, and given, as you said, that our statements are entered into the record, I thought I would use my few 

minutes here to offer some thoughts and clarifications after having 

had the opportunity to listen to the first panel. 

One of the things I want to emphasize about the President’s proposal is it is not intended to overtake the entire process by which 

Federal real estate is dealt with and disposed in case of surplus assets. Instead, what has happened is over the course of time, as we 

have evaluated the real estate within the Federal Government, we 

have identified some more challenging and transformational opportunities that exist within our real estate portfolio that require a 

different approach. 

Senator Coburn was discussing the fact that we often hit roadblocks. What we see emerging is a certain type of real estate opportunity that usually and typically has a much higher value proposition for the taxpayer in terms of savings where those road blocks 

are hit. 

Now, for the 14,000 assets that current sit as surplus, we have 

not hit those types of very challenging roadblocks. The reality is, 

is that they have made it through the process. They are surplus. 

We need to get rid of them and we need to do a better job in getting rid of them, but we do not necessarily think we need a BRAClike process to get rid of them. 

Instead, as you start peeling back the onion layers of the Federal 

real estate inventory and as we look with Federal agencies at the 

start of the Administration, as President Obama directed us to do 

a better job on real estate, we started to see two types of opportunities emerge, more sure short-term opportunities that could take 

place under the current legal and regulatory environment that we 

have today, and we are pursuing those and that is the $3 billion 

goal that you referenced in your opening, and we are making good 

progress on that. Beyond that, and at a much higher savings level, 

are the more challenging opportunities that we believe we need a 

different process to go after, and there are really two types of opportunities that I will highlight and then I will turn it over to the 

other witnesses. 

The first is throughout our inventory, and there are not, we do 

not think, thousands of these opportunities, but there are a number 

of them, there are very high-value assets that exist where we look 

at the situation and we say a couple of things are going on. First, 

it is most likely not the highest and best use for Federal Governments to be sitting in that property at this time. It might be utilized, it might be fully utilized, but it does not need to be fully utilized by the Federal Government in that space, and by transferring 

them or consolidating them to another location and exploring commercial opportunities for that asset, the taxpayer could win in a 

very significant way. 

H605-41331-79W7 with DISTILLER

27 

1The prepared statement of Mr. Peck appears in the appendix on page 79. 

There might be high value assets that are no longer needed, but 

there is such a level of competing stakeholder interest in whether 

the Federal Government stays or goes or what happens to that 

property after the Federal Government leaves that those types of 

competing interests have created an inertia in moving those properties forward and we have not yet figured out how to overcome 

those inertia. 

And so those opportunities represent just a few of those opportunities, in a single digit on one hand, could easily trump all the savings associated with the entire footprint of 14,000 surplus assets 

because these assets are so high value, and we really want to break 

through and make progress and the President’s proposal represents 

our best foot forward on how to do that. 

The other type of opportunity are the thousands of field offices 

that exist throughout the United States for several of our agencies. 

In some cases, agencies have an office in every county in America, 

which we believe right now no longer reflects the best way in which 

we deliver benefits in a post-Internet era. And as we have delved 

in and said, how do you downsize that footprint, how do you start 

thinking about no longer having an office in every county, in every 

region, to leverage more electronic delivery of benefits, we have 

seen some of those very same competing stakeholder interests 

emerge, a very complex array of challenges in terms of getting from 

point A to point B and downsizing. And again, when we talk to 

agencies about this and we have asked them, we often got response, you need a BRAC-like process to really make progress here, 

and that is how the idea was basically borne. And so we are looking forward to working with you on this. 

I just wanted to clarify that we would continue to carry on in the 

same way Senator Begich mentioned in terms of those 14,000 assets, and I think he is right. We do not want to overcomplicate 

things with those assets. But for those higher value, more tougher 

opportunities that really end up being more transformational to our 

inventory and a higher savings amount for the taxpayer, that is 

where we think we need a new approach. We are open to ideas. 

What the President has put forward is our best foot forward on 

how to solve the problem. 

Senator CARPER. Thanks very much for those comments. 

Mr. Peck, welcome. 

STATEMENT OF ROBERT PECK,1 COMMISSIONER, PUBLIC 

BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION 

Mr. PECK. Thank you, Senator. I want to thank you and the Subcommittee for its interest on this issue and also that of members 

in the House of Representatives, who have also moved some proposals. And, of course, we are fully in support of the Administration’s proposal. 

At first, if I could, I would like to brag on GSA just a little bit 

because there is sometimes a sense that no one in the government 

is actually thinking about real property asset management, and I 

can tell you that in the GSA inventory, which does consist of—— 

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28 

Senator CARPER. You do not know how pleasant it is to hear the 

Administrator of a major Federal agency say, ‘‘I like to brag.’’ Good. 

This is good. 

Mr. PECK. We do have—we do manage 370 million square feet, 

and you noted, by the way—— 

Senator CARPER. This will not count against your time. 

Mr. PECK. Thank you. That would be great. [Laughter.] 

That more than half of it is leased space, but less than 3 percent 

of our portfolio is vacant by almost any measure that you use. 

We do take a look at the inventory that GSA controls. We modernize buildings where they make sense. We get rid of them where 

it does not make sense. Since 2002, we have disposed of more than 

200 GSA properties valued at $467 million and covering 9.5 million 

square feet. But just as important, that has eliminated almost $484 

million in future anticipated repair needs. So there is a cost avoidance, as well. 

But one thing, just at the risk of making things a little complicated before I will come back and try to make them simple, also, 

some of the properties that in the real property inventory are listed 

as underutilized are actually undergoing renovation so they will be 

more intensively utilized. 

So, for example, the GSA headquarters building, which is about 

600,000 square feet, currently gets listed in the inventory as being 

underutilized because half of it has been emptied out to renovate 

it. When we are through renovating it, however, we will have at 

least three times as many Federal employees in it and we will 

avoid lease costs of $20 million a year. So that is a—it is just a 

significant thing to note. 

GSA also has a role, aside from managing our own inventory on 

behalf of Federal agencies, we have the job of disposing of assets 

that other agencies do not need. It is important to note that while 

we do believe we have the expertise and the capacity to take a lot 

of properties through the disposal process, it is each individual 

land holding agency that is responsible for making their own asset 

management decision on whether the asset is excess to their needs 

or lot. At least that is the way things currently work. Even there, 

in the last 10 years, disposing of assets that other agencies control, 

we have disposed of 3,300 governmentwide assets valued at about 

$8.5 billion. So it is pretty good. 

So the process works fairly well. We believe that there are still 

some improvements we could make to the real property inventory 

so we could give you better information about what is going on. 

But to tell you, in our case—and I have worked with cities so I 

know what Senator Begich is talking about—in the cases he is 

talking about, it is pretty clear that a building is vacant. I just 

want to emphasize what Danny just talked about. We have some 

assets in which it is almost vacant but not quite, and so a couple 

of things have to happen. We have to take a look at an asset that 

is partially utilized or even mostly utilized, decide whether we 

should keep it in the inventory, and then we have to figure out a 

way to get it out. Sometimes, that requires an up-front cost to 

move things around so we can move out the last chunk of people 

or goods from a warehouse, if it is a warehouse, and make the 

property vacant and then we can move it. 

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29 

1The prepared statement of Mr. Sullivan appears in the appendix on page 86. 

But there is this other issue, and Danny touched on this, too, and 

you have seen it in all the information we have given about the Administration’s proposal. There are times when we are moving a 

property through the pipeline in which, although it looks like we 

have gone past the point where a building or an asset, according 

to the law, is eligible for a free disposal, a discounted conveyance, 

that politics rears its head—it is part of our system—and it holds 

up the process. That is one reason that we believe we need, at that 

point in the process, a BRAC-type proposal to move things alone. 

I would just like to say, there are a couple of things that we 

think are needed to accelerate disposal. The Administration’s proposal, as you might guess, includes all of these. 

One is we need to incentivize disposals in other Federal agencies 

by enabling the agencies to realize the benefits of the proceeds. Our 

experience tells us that makes a big difference. 

Second, we need to address the up-front costs, as I mentioned, 

in being able to move properties that we do not need to the disposal process. 

And then obviating or eliminating the stakeholder interests that 

sometimes slow us up. 

One other thing I would like to note, and it piggybacks, again, 

on comments in the other panel. With technology these days and 

the way work is done in the workplace, the ability of people to 

work from home, on the road, wherever they are, we believe that 

we can work with a lot of Federal agencies to reduce the amount 

of space they need. The constrained budgets these days are encouraging a lot of agencies to come talk to us about how that is done. 

We are moving out aggressively, and I would like to say that even 

with this legislation pending, under Danny’s and the White House’s 

leadership, we have a council of representatives from many Federal 

agencies already taking a look at how we can make some of those 

decisions that need to be made to reduce the overall Federal property inventory and move things to disposal. Thank you. 

Senator CARPER. Thanks, Mr. Peck. 

Mr. Sullivan, please. 

STATEMENT OF JAMES SULLIVAN,1 DIRECTOR, OFFICE OF 

ASSET ENTERPRISE MANAGEMENT, U.S. OFFICE OF VETERANS AFFAIRS 

Mr. SULLIVAN. Good afternoon, Mr. Chairman, Members of the 

Subcommittee. Thank you for the opportunity to discuss the Department of Veterans Affairs management of its real property, in 

particular, our ongoing efforts to reduce or eliminate unneeded and 

vacant properties across the country. 

It is a privilege for me to be here today representing the more 

than 300,000 employees of the Department of Veterans Affairs, 

who work tirelessly on behalf of our Nation’s veterans and their 

families every day. Today, I would like to highlight VA’s successes 

on repurposing and disposal of assets, especially when these efforts 

have resulted in providing housing for homeless veterans. 

H605-41331-79W7 with DISTILLER

30 

Before I begin, I must emphasize that our primary mission at VA 

is to care for veterans in everything we do. Every day, we must put 

veterans first. 

I would like to begin with a brief overview of our portfolio. VA 

is the owner of one of the largest health care-related portfolios in 

the country at over 160 million square feet and 7,100 owned buildings on more than 33,000 acres. VA is one of the first agencies, I 

believe, to develop a highly structured, data-driven methodology to 

assess proposed construction needs, most recently reflected in the 

issuance of VA’s Strategic Capital Investment Planning Process 

(SCIP). SCIP involves a systematic evaluation of all of our capital 

investments based on how well they address performance gaps. 

One of these gaps is how well these investments address the disposal of unneeded assets. 

All of our projects are considered in light of VA’s aging infrastructure, which is more than 60 years old, on average. Through 

the SCIP process, we directly address the challenges posed by this 

aging infrastructure with a range of solutions, including the reuse, 

repurposing, and disposal of unneeded assets to reduce space and 

save the government costs. Similarly, I want to point out that the 

Civilian Property Realignment Act also introduces a very similar 

strategy to reduce space and save costs. 

For the past several years, VA has aggressively pursued disposal 

or reuse opportunities. From 2006 to 2010, we completed disposal 

or reuse of approximately 381 assets. A hundred-and-eleven were 

disposed of or reused in 2010 alone. Since 2001, we have reduced 

our inventory of owned vacant space by 34 percent and we have 

done this despite a growing mission and additional pressure and 

workload on VA’s infrastructure. 

So where do we stand today? As of February 2011, VA has 313 

vacant buildings across the country. VA—— 

Senator CARPER. Say that again. How many? 

Mr. SULLIVAN. Three-hundred-and-thirteen. 

Senator CARPER. Out of—— 

Mr. SULLIVAN. Out of about 6,500. 

Senator CARPER. OK. Thanks. 

Mr. SULLIVAN. VA has plans to dispose or reuse 250, or 80 percent, of these buildings. The remaining 63 are what we call our 

most challenging disposal actions because they involve many environmental and historic hurdles that we must overcome. 

Just recently, VA has initiated what we call the Building Utilization Review and Repurposing (BURR) effort, which has enabled us 

to identify properties for housing for homeless veterans. This initiative is critical to help achieve Secretary Shinseki’s goal to end veterans’ homelessness by 2015. To this end, the Secretary announced 

yesterday and approved 34 BURR sites, which would include over 

100 buildings and 600 acres of land for the conversion to homeless 

housing for veterans and their families. This will bring the total 

number of units to care for our homeless veterans to more than 

5,000 units either in process or under development. 

Once identified as candidates for BURR for housing or for other 

purposes, VA uses its Enhanced Use Leasing authority. This authority provides a variety of benefits, such as enhanced services to 

veterans, operations and maintenance savings, private investment, 

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31 

1The prepared statement of Mr. Wise appears in the appendix on page 94. 

new long-term revenue for VA, and importantly for the local community, job creation and additional tax revenues for local and State 

sectors. Since the EU process has started 10 years ago, we have 

awarded 60 projects this way, 18 specifically for homeless units but 

also for other facilities. From 2006 to 2010, to give you an idea of 

the consideration that these properties have brought into VA and 

the government, $260 million in consideration was provided from 

these properties and efforts. 

I would like to just cite two quick examples of this, of invoking 

the Enhanced Use Lease process. In Chicago, Illinois, and Cleveland, Ohio, we consolidated multi-campus medical facilities. As a 

result of these consolidations, VA was able to outlease more than 

four acres in downtown Chicago, which was not too hard, but also 

100 acres in the suburban Cleveland area. VA received $50 million 

in payments from the sale proceeds of Chicago, and in Cleveland, 

VA received $12 million in consideration and $10 million in cost 

savings while we excessed over 110 acres with 35 buildings on 

them. 

Currently, VA has 19 enhanced-use lease (EUL) projects underway, as I said earlier, to provide 2,200 units for housing for homeless. At this point in the process, VA’s authority for this program 

expires at the end of the year and we will be seeking reauthorization for this authority. 

We welcome the potential additional of a Civilian Property Realignment Act because we view this as just one more tool. As 

Danny said earlier, there is not one single thing that is going to 

solve this problem, but it is going to be different tools used in different cases and we believe this Act will help VA manage its properties in a much more efficient manner. 

I would be happy to answer any questions you may have. Thank 

you. 

Senator CARPER. Thanks, Mr. Sullivan. I have a couple questions 

I am looking forward to asking. 

Mr. Wise, please proceed. Thank you. 

STATEMENT OF DAVID WISE,1 DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY 

OFFICE 

Mr. WISE. Chairman Carper, Senator Brown, and Members of 

the Subcommittee, thank you for the opportunity to testify today 

on our work related to excess and underutilized Federal real property and the BRAC process. My testimony will focus on the civilian 

sector while my colleague, Brian Lepore’s testimony, will focus on 

the military side. 

My testimony today will discuss, (1) the progress the government 

has made toward addressing obstacles to Federal real property 

management, and (2) some of the challenges that remain and how 

the Administration’s May 2011 proposed legislation, referred to as 

the Civilian Property Realignment Act, CPRA, may be responsive 

to those challenges. 

The Federal Government occupies more owned and leased buildings than it needs. In Fiscal Year 2009, 24 landholding agencies, 

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32 

1The prepared statement of Mr. Lepore appears in the appendix on page 94. 

including DOD, reported 45,190 underutilized buildings with a 

total of 341 million square feet, or 1,830 more buildings than they 

reported the previous fiscal year. These underutilized buildings 

cost about $1.66 billion annually to operate and are potentially valuable. 

In designating the management of Federal real property as a 

High-Risk Area, we found that there was no governmentwide strategic focus on real property issues and that the government’s data 

were unreliable and outdated. Since that time, the government has 

made significant progress. For example, the Administration and 

Federal agencies have established the Interagency Federal Real 

Property Council, a body designed to enhance real property planning processes, and improved data reliability. Based on the government’s progress in these areas, we removed the data element of 

real property management from this year’s High-Risk List. Even 

with this progress, the government has not yet addressed other 

challenges to real property management, including legal and financial limitations and stakeholder influences, such as local governments, advocacy groups, and the private sector. 

In 2007, we recommended that OMB assist agencies by developing an action plan to address the key problems associated with 

decisions related to unneeded Federal real property. OMB agreed 

with this recommendation but has yet to implement it. However, 

the Administration’s recently proposed CPRA is somewhat responsive to that recommendation. 

For example, CPRA proposes an independent board that would 

streamline the disposal process by selecting properties considered 

appropriate for public benefit uses. This streamlined process could 

reduce disposal time and costs. CPRA would also establish an asset 

proceeds and space management fund that could be used to reimburse agencies for necessary disposal costs. The proposed independent board would address stakeholder influences by recommending Federal properties for disposal or consolidation after receiving recommendations from civilian land holding agencies and 

independently reviewing those recommendations. While CPRA does 

not explicitly address the government’s over-reliance on leasing, it 

could help through board recommendations for consolidating operations where appropriate. 

Mr. Chairman, this concludes my statement. My colleague will 

describe the BRAC process and its potential applicability to Federal 

real property disposal. Following his testimony, we will be happy 

to answer the Subcommittee’s questions. 

Senator CARPER. Great. OK. Thanks, Mr. Wise. Mr. Lepore. 

STATEMENT OF BRIAN LEPORE,1 DIRECTOR, DEFENSE CAPABILITIES AND MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. LEPORE. Thank you, Mr. Chairman. Mr. Chairman, Senator 

Brown, and Members of the Subcommittee, I am delighted to be 

here today to have an opportunity to present our observations on 

the Base Realignment and Closure, or BRAC, process. This may be 

helpful to you as you consider the Civilian Property Realignment 

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33 

bill. I will address two points today, the 2005 BRAC process and 

the Department of Defense’s, DOD’s, key steps for developing its 

closure and realignment recommendations. 

First, here is how the 2005 BRAC process worked. DOD requested the round. Congress authorized it in law. DOD proposed 

the selection criteria to be used to develop the candidate closure 

and realignment recommendations and published that in the Federal Register, so it gave everybody an opportunity to see this is 

what DOD thought was the way to do it. Congress then codified the 

criteria in law and required DOD to develop a 20-year force structure plan and an infrastructure inventory. So Congress essentially 

tightened it up and said, OK, here is the deal. Here is how we are 

going to do it. 

DOD then developed the closure and realignment recommendations and sent them to the independent BRAC Commission. The 

commission could approve, modify, reject, or add to the recommendations based on the criteria and the force structure plan 

and DOD’s compliance with both of those. The commission held 

hearings, voted on each recommendation, and reported to the President. The President could disapprove the commission’s report and 

send it back for revision or send it in total to Congress. Congress 

then had 45 days to enact a joint resolution of disapproval or the 

recommendations become binding. 

Now, to my second point, here are the key steps that DOD used 

to develop its recommendations. First, DOD developed three goals 

for the BRAC round: Promoting jointness and transformation, reducing excess infrastructure, and saving money. DOD used the 

Cost of Base Realignment Actions (COBRA) model, to estimate the 

costs and savings from the candidate recommendations and to have 

a consistent way to compare the candidate recommendations. DOD 

also developed a common analytical framework and organizational 

structure to better ensure consistent application of the criteria, and 

DOD involved the service audit agencies to help to try ensure data 

reliability so that there was an accurate set of data in which to 

look at. 

This concludes my prepared remarks, Mr. Chairman. I would be 

happy to answer any questions that you or the other Members of 

the Subcommittee may have. 

Senator CARPER. Thanks very, very much. 

Sitting here listening to your testimony, there is a Bible study 

group that meets in the Capitol most Thursdays that we are in session with our Senate Chaplain, Barry Black, and he frequently 

talks with us about how our faith guides us in our work. He talks 

to us about moral imperatives. And sometimes he shares with us 

Matthew 25. Not many people know what Matthew 25 is, but 

maybe you are familiar with the term, the least of these. What are 

our obligations as human beings to people who are hungry or 

thirsty or naked, who are sick or in prison. 

So the question I want to ask you is about moral imperatives. 

One, I think most of us feel a moral imperative to the least of these 

among us and we feel an obligation to reach out and to be helpful 

and responsive to them and their needs. We also as legislators and 

as those of us who serve the taxpayers of our country, we have an 

obligation to run our government in a fiscally responsible way. I 

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think it is an imperative that goes beyond fiscal stewardship, fiduciary responsibility. I think it is almost like a moral imperative, as 

well. 

In this case, what we need to do, I think, in part, is to be consistent in addressing—in being faithful to both of those moral imperatives, and we need to look to the needs of the least of these, 

but we need to do that in a cost effective way. 

Senator Coburn and I have been working on this. He has been 

working this for longer than I have. I think he was working on it 

when he was a House member for a number of years. I have been 

here in the Senate now for 10 years and focused on this with him 

for about the last half-dozen. I am determined that we are going 

to make real progress and am happy to have an Administration 

that shares that conviction. 

Talk to us about how we meet both moral imperatives, to the 

least of these and to the taxpayers of this country. Please, Mr. 

Werfel. 

Mr. WERFEL. That is an excellent question. One of our objectives 

out of creating this board is to drive a decision, not necessarily to 

exclude viewpoints and exclude perspectives and stakeholder interests. We are not getting around the stakeholder interest problem 

by saying you shall deploy with one stakeholder’s interest in mind 

and that would be savings or deficit reduction. I think that is a 

critically important one, and in particular for some of these objectives, I think deficit reduction will shine through as a primary objective. 

But I also believe that there are a lot of legitimate stakeholder 

interests, homeless groups being one of them, other community interests when we vacate or rethink how we are going to use a property. And the goal here is to make sure that voices are heard, 

issues are surfaced and considered by a knowledgeable set of individuals, and that, ultimately, then make a decision that maybe not 

everyone is going to walk away fully happy with, but there will be 

a fair and open process and a decision will be made and will move 

forward for good or for bad. 

And so in that way, I think our goal is to strike that balance that 

you described but do so in a much better way than what we have 

done today, because right now, the balance is being achieved in a 

way where a lot of voices are being heard, but the result in too 

many cases is inertia as those voices continue to tangle. And what 

we want to do is let those voices be heard, but drive to a decision 

and move forward, which is our perception of how the BRAC process has worked and one of its success points, is that those voices 

were heard, decisions were made, not everyone walked away from 

things happy, but savings have been realized and efficiencies have 

been gained. 

Senator CARPER. Any thoughts, Mr. Peck? 

Mr. PECK. Yes, sir. The record is that of the public benefit conveyances that we have done, which accounts for something like 13 

to 15 percent of the disposals we have done, at least in the last 

number of years, fewer than something like 5 percent of those have 

actually gone to the homeless. So it is not a huge number. That is 

just to put—we should put that fact in our mind. 

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Second, the Administration’s proposal suggests that in the course 

of coming up with a list of properties to be disposed of, the board 

would consider those properties that are likely to be useful to the 

homeless. I suspect it would be done in consultation with homeless 

groups. So I think we have already—we have, at least, begun 

thinking about how we balance those two important issues that you 

are talking about. 

Senator CARPER. All right. Thanks. Mr. Sullivan, any thoughts? 

Mr. SULLIVAN. Sure. Mr. Chairman, I believe in terms of the VA, 

our moral imperative is to ensure that no matter what real property action that we take, that it has a positive direct benefit on veterans and their families, No. 1. 

No. 2, that we fulfill our mission in terms of medical, cemetery, 

and benefit services to veterans, and that we are compatible with 

the local community that we live in and operate in with our VA 

medical centers and cemeteries. But throughout that process is the 

secondary factor of trying to do it in the most economical way, and 

I think there are cases where we can use current authorities to 

make sure we hit those three criteria and do it in an economical 

way and save money, which is then reinvested either back for veterans or back toward the debt. 

And then we have cases where there are hard things to do, 

where I think a tool like a BRAC-like process would be helpful, 

where we cannot get that benefit for veterans because of the existing real property configurations we have. 

Senator CARPER. OK. Thanks. Mr. Wise. 

Mr. WISE. Senator Carper, at GAO, generally at the request of 

you and the other members of the Senate and the House of Representatives, we evaluate various programs. From a public policy 

perspective not necessarily representing GAO in I think most everyone, wants to do the right thing, although approaches may differ. I am quite confident that as we work through these issues and 

understand the different perspectives this will give the Congress 

the perspective it needs to move forward with an appropriate piece 

of legislation related to making the best use of Federal real property. 

Senator CARPER. OK. Mr. Lepore. 

Mr. LEPORE. Yes, Mr. Chairman. I think the BRAC statute may 

offer the model for you. The property disposal provisions of the 

1990 BRAC statute are pretty detailed. What it says, essentially, 

is the military service that proposes to close an installation offers 

it within the Department of Defense to other installations or, pardon me, other military departments or other organizations. If they 

choose not to take it, it then is made available to other Federal 

agencies. 

Should the other Federal agencies choose not to avail themselves 

of the installation, it then goes through a very detailed process 

where the Secretary of Defense works with local redevelopment authorities, to include representatives of the homeless, State and local 

governments participate in that process. There are potential for 

economic development conveyances, for public sales, for auctions, 

for negotiated sales. 

So there is a whole laundry list, if you will, of what the Secretary 

of Defense is required to do as he goes through the process of disH605-41331-79W7 with DISTILLER

36 

posing of installations closed under BRAC. That detail may offer a 

model for you as you think about the Civilian Property Realignment bill. 

Senator CARPER. Yes. It occurs to me, though—I am going to go 

back to the example I used in Dover, Delaware, where on the one 

hand you have the Dover Air Force Base where 5,000 people work 

and 5 miles away, you have the Federal building in downtown 

Dover where maybe 100 people work, if that. Do we need for the 

Federal building in Dover a BRAC-like process to be able to dispose 

of, in a reasonable, common sense, practical way, humane way, we 

need the same kind of process? Anybody? Please, Mr. Werfel. 

Mr. WERFEL. I am not familiar with the exact circumstances of 

Dover, but what I can tell you, Chairman Carper, is we have come 

across different real estate transformation opportunities where it is 

maybe not as complex as downsizing a military base because of, as 

I think it was mentioned in the first panel, it is like shutting down 

a major city or a minor city, but yet it is complex enough in terms 

of the various stakeholder interests that, historically, we have been 

unable to push through under the current frame. 

So I do not know that it necessarily, as the BRAC-like board that 

we envisioned gets together and adjudicates and thinks about a 

particular building that fits the example that I provide, or going 

back to my earlier point about downsizing thousands of field offices 

across counties, both urban and rural across the United States. 

They might not have the same complex array of issues and immediate community impact, but I think they will get a healthy dose 

of very legitimate interests and concerns, whether the local residents are concerned about a giant office building being replaced 

where green space exists now, or whether there is concern that the 

local educational institution should get the property versus the 

mayor versus the homeless versus et cetera. 

We see that and we see those types of interests even in a building potentially the same size, square footage, and impact or imprint of the Dover Federal Building. It is a case-by-case basis. And 

that is why I think the board that we are envisioning will be somewhat surgical and will hear back from the agencies and say, here 

is an opportunity that we are seeing this type of make-up of competing interests or lack of financial incentive. Here is where you 

might come in and be able to help. And we think for a relatively 

low up-front investment in this type of mechanism, the proceeds 

can be enormous. 

Senator CARPER. Mr. Peck. 

Mr. PECK. Mr. Chairman, the Dover Federal Building is, in fact, 

a GSA building. It is a multi-tenant building, and it is typically the 

kind of asset you want to hold on to. It is government owned. It 

is almost always in the best interest of the taxpayers to hold on 

to those. What we might want to look at Dover is whether there 

are other facilities that we do not need, and sometimes that takes 

a little bit of work and I will tell you why. 

When we ask agencies, well, how about this property out there? 

It looks like you are not using it terribly intensively. Often, the answer is, well, but things will change. We might need it. And so, in 

essence, we have some Federal agencies, and GSA, I will have to 

admit, in some cases has done this, too, that the agencies are, in 

H605-41331-79W7 with DISTILLER

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essence, land banking the property, and to be able to say to them, 

I do not really think you need that and it is time to move on and 

time to think differently about how you do your function and go 

someplace else, that is something that we could use a little bit 

more clout to do. 

Senator CARPER. OK. Senator Brown. 

Senator BROWN. Thank you, Mr. Chairman. I had to go down to 

the floor and pull an amendment and then deal with an FAA issue. 

I appreciate you—— 

Senator CARPER. Do you expect we are going to vote again? 

Senator BROWN. No. There are no more votes. 

Senator CARPER. All right. Thanks. 

Senator BROWN. Not until Tuesday. I am shocked. 

So, Mr. Peck, if we could start with you, I guess, GAO highlighted the lengthy disposal process as one of the issues hampering 

the GSA’s ability to effectively dispose of unneeded property, and 

obviously contributing to a lengthy process is the housing use that 

you heard from the prior testimony. In the past 10 years, what percent of excess properties have actually become homeless housing, 

if you know? 

Mr. PECK. I think while you were out, I gave one number. It is 

the best number, I think, that gets at your answer. Of the public 

benefit conveyances that we have done, which are those that go 

to—that we decide, it is not going—— 

Senator BROWN. Right. 

Mr. PECK [continuing]. It is eligible for a State and local purpose, 

some—that is about 15 percent of the properties, and about 5 percent of those have gone to the homeless. So it is not a lot—— 

Senator BROWN. How many months or years, on the average, is 

that process to consider a property to become used for homeless? 

Mr. PECK. The immediate screening process, which involves a referral to the Department of Housing and Urban Development, only 

takes about 60 days, and so it is not that—that aspect of it is not 

that long a process. However, to be candid, sometimes what happens is that the process stretches on after that as various entities, 

public and nonprofit, decide that maybe there is another way to get 

the property or maybe it would be useful. So it is hard to put a 

number on that. 

Senator BROWN. And just for all of you, I have been running 

around. It has been one of those days. If you have answered something, I do apologize. I appreciate your consideration. 

Mr. Werfel, it is good to see you again. I was very impressed by 

your testimony before us before. I have been kind of watching to 

see how you are doing and appreciate you coming back. How does 

the President’s proposed board streamline the process if it still includes the time consuming process of considering historic property 

designation and homeless housing use? 

Mr. WERFEL. Senator, thank you, and thank you for those kind 

remarks. The streamline comes from the ability to drive to a quick 

decision and to run the processes concurrently. So we have a lot 

of legitimate interests that are looking at the property and a lot of 

legitimate process steps that need to take place, and what we want 

to do and what we want the board to come in and do is for a given 

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property or a set of properties, to take all those issues collectively 

and drive to a particular decision. 

So rather than waiting a certain number of days while the local 

education institution has its take at the process, then the homeless, 

then the local correctional facility, then the local airport, then other 

local government entities, which can lengthen the overall process, 

the board would say, OK, everybody come in simultaneously. We 

will review the process. We will drive a decision that balances all 

and we will try to reach something that is optimal, that protects 

the taxpayer but also protects the local community. 

Senator BROWN. Thank you. And Mr. Sullivan, is it true that 

there is a 387-acre property owned by the VA in West L.A. which 

is worth about $4 billion and that a Fiscal Year 2008 appropriations bill prohibits you from disposing or otherwise altering its 

ownership of the property? Is that true? 

Mr. SULLIVAN. Yes, sir. We have a large medical center in West 

Los Angeles that has had historically significant restrictions on the 

use and disposal of that property dating back to the 1960’s and 

1970’s. 

Senator BROWN. And the VA has determined that the property 

is excess or underutilized, is that right? 

Mr. SULLIVAN. At this point in time, since we have not had any 

authority to determine or to excess—— 

Senator BROWN. Well, prior to the land use restrictions, did they 

make that determination? 

Mr. SULLIVAN. I would have to look. It goes back to the 1960’s. 

Senator BROWN. If they were not in place, would the VA submit 

the L.A. property to be considered through the process we are talking about? 

Mr. SULLIVAN. I think at this point, as I said, I think, when you 

stepped out of the room, Senator, in terms of any property realignment, we would first look to see what is the direct impact on veterans. Does this have a positive impact on veterans to realign or 

excess any of our property? Does it still impact—— 

Senator BROWN. Well, what is the use now? Is it being—how is 

it being used right now? 

Mr. SULLIVAN. There are portions of the land that are used as 

a medical center, a State home, a domiciliary nursing home. There 

are portions of the property that agreements are in place that are 

being used by parties outside of VA for purposes to raise revenue 

that comes back to VA at this point, to community partners, universities, and so forth. 

Senator BROWN. So back to you, Mr. Werfel, would the President’s proposal help to ensure that there are no so-called sacred 

cows that are exempt from the process? 

Mr. WERFEL. That is the exact goal. I mean, the property that 

you are raising has a lot of particular sensitivities associated with 

it. We certainly would want that property to be closely looked at 

by the board to determine whether some or all of it could be better 

utilized, not only to the benefit to the taxpayer, but to work 

through some of the issues that are going on in the local community within that property. I think that is a good example of a property that an independent process will help us to drive to a quicker 

decision on the optimal use of the property, and I would look forH605-41331-79W7 with DISTILLER

39 

ward to having VA and the Administration work with the board to 

give them the information they needed to reach the right decisions. 

Senator BROWN. And it is also, I believe, your intent in your— 

I do not want to say what your intent is. Is it fair to say that by 

going through this process, we can step back from our use of leasing properties and utilize our own ownership to reduce the amount 

of money we are spending on leasing? Is that one of the objectives? 

Mr. WERFEL. It absolutely is. I mean, there are a couple of ways 

to skin that cat of reducing our leasing footprint, which absolutely 

has to be an objective, and one of them is by doing some tough, 

tough realignments. Let me give you a good example, is a lot of our 

county offices across the Nation that I think would be important 

to downsize and are very tough to downsize without this type of 

independent process that can drive through some of the competing 

stakeholder interests, that type of downsizing, whether it be 10 

percent, 15 percent, 20 percent, you are going to see a significant 

drop in the leasing footprint because some of those facilities are 

leased. 

Elsewhere, I think there are opportunities to downsize, realign, 

and consolidate in ways that can dramatically impact our leasing 

footprint. Mr. Peck mentioned earlier in response to a question 

from the Chairman the Dover building-—— 

Senator BROWN. Right. 

Mr. WERFEL [continuing]. And said maybe we should bring in 

other properties around into that building and build it up, and I 

think he would be referring to leases as well as owned. 

Mr. PECK. I also mentioned that we are renovating the GSA 

headquarters building, which has heretofore housed about 2,600 

people. With technology and other ways that we use space these 

days, we can get about 6,200 people in the building and avoid an 

annual lease cost of about $20 million, reduce about 500,000 square 

feet of leased space in the Washington area. 

Senator BROWN. Now, back to you, Mr. Werfel, how much in savings do you think the taxpayers can expect from the sale of these 

excess properties and where do you think it will be coming from, 

for example, operational and maintenance savings versus the portion that could be derived from sale proceeds? 

Mr. WERFEL. I think there is—— 

Senator BROWN. Approximately. I do not expect a hard number. 

I am not going to hold you to it. 

Mr. WERFEL. Yes. Our estimate is that in the first 3 years that 

the board is operational and churning through their recommendations, that the opportunity is approximately $15 billion over those 

3 years. That $15 billion is made up of two different types of savings, as you mentioned. One is the proceeds from sale, and we believe that there are numerous high-value assets throughout the inventory that we cannot sell today under the current legal and competing stakeholder interest climate that we can sell under this 

process. And the other is the elimination of operating costs. When 

you sell the building, you eliminate those operating costs and get 

proceeds. When you terminate a lease, you are ending that leasing 

cost. So it is a mixture of those two opportunities. 

Senator BROWN. And one final question, Mr. Chairman? Thank 

you. So, Mr. Sullivan, based on everything you have heard so far, 

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if the VA uses Enhanced Use Lease agreements as a way to maximize returns for the underutilized assets, is the civilian BRAC and 

if this civilian BRAC process that we are talking about were implemented, how would Enhanced Use agreements affect the process 

and your ability to dispose of excess property? 

Mr. SULLIVAN. Senator, I think they work in complement of each 

other. Our Enhanced Use Leasing process works quite well when 

we can forge a win-win strategy between the local stakeholders, the 

local community, the veterans, and the government. And in cases, 

as Danny talked about, where we have major challenges, where we 

cannot reach that consensus, that decision, I think that process 

would be very helpful in helping us with those properties. So I 

think both can work together. 

Senator BROWN. Great. Thank you, Mr. Chairman. 

Senator CARPER. Thank you. I am going to go back just to followup on a question that Senator Brown asked, I think of Mr. 

Werfel. When we look at the potential source of savings, one, we 

can save money by getting properties off the books, and if we can 

sell them for a few dollars, so be it. 

Second, we spend—for some of these properties, not all but some 

of them, we spend money for utilities. I do not know if you call 

these operating costs, or maybe you do. We can save some money 

for some of these buildings, money we spend for security. I remember Senator Coburn and I visited a large postal facility, postal processing facility, I think it was in Chicago, about 4, or 5, 6 years ago, 

and as I recall, they had a considerable security cost, as well, costs 

of maintenance that have to be covered. Are there others in terms 

of operating costs that are significant that we need to be mindful 

of? 

Mr. PECK. There is one other thing. We mentioned in our testimony that there is the liability that the government holds which 

GAO has talked about any number of times of deferred liability 

costs. You are either holding the building and it is depreciating in 

value and it, in essence, it is deteriorating, or you keep it up, one 

of those two. So you both reduce operating costs, you reduce your 

liability, the need you have to rehab buildings at some point. 

Senator CARPER. OK. Savings on lease versus purchase. Let us 

just talk about that a little bit, and we have talked about it already 

in a couple of the exchanges here. But I am going to go back to that 

Dover Federal Building. The Dover Federal Building has, I think, 

been made available—as Federal agencies have moved out, it has 

been made available to other potential use of stakeholders in the 

community. As I believe, I think one of our colleges or universities 

has said that they would like to use that facility for offering some 

of their coursework, and I think that is what is going to happen. 

I think that is what is going to happen. Meanwhile, Federal agencies, including our congressional delegation, have moved off into 

rented space, space that we are leasing. 

There is an argument that maybe we should have gone off someplace else and built another building from scratch and all moved 

into that and we could have saved money, but I do not know that 

was ever seriously considered. 

Mr. PECK. Without knowing the facts in Dover, but it sounds like 

situations we have all over the country, you can say pretty much 

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without knowing the specifics that in most instances, it makes 

sense for the Federal Government for long-term government uses, 

and Congress is going to be here for a long time, to put the offices 

in federally owned rather than leased buildings. 

I suspect what has happened in Dover is that someone took a 

look at the building and decided it is functionally obsolete. The cost 

of bringing it up to current day standards is prohibitive. And, then 

here is a key fact, that taking a look at how much capital investment we were likely to convince the Administration and the Congress to give us, it is not in the cards to build a building there any 

time soon. That leaves us with the option of going to modern private sector space. 

We do not have the option in GSA that the VA has, to some extent, with Enhanced Use Leasing, which allows you to use private 

sector capital to build a facility, which at least at some point is 

owned by the Federal Government. There are all kinds of legitimate scoring issues that both CBO and OMB enforce that keep 

that from happening. 

But in any event, it is a constraint on capital investment that 

has pushed us into a lot more lease space and less, as a percentage, 

of owned space, and it is not good asset management. 

Senator CARPER. Mm-hmm. Did you want to say anything, Mr. 

Sullivan. 

Mr. SULLIVAN. Yes, I think I do. As I talked earlier, one of the 

critical factors when we look at real property is what is the direct 

benefit and impact on veterans. VA is a huge believer and user of 

leasing and for the following reason. Most of our leases are medical 

leases and we need to get those services out into the community 

where the veterans are, and the demographics of veterans change 

as different conflicts happen. Veteran demographics will change 

and services will have to meet. 

So for us to make a lot of our leases government-owned, I think, 

would not serve the veteran and in the long term not be able to 

provide benefits. I mean, I think there needs to be a balance. I 

agree, we do not want to substitute leasing for building our own, 

but in the medical field, there is a great need to have the flexibility 

to put leases in different places to meet veterans and have those 

medical clinics have the ability, as medical technology changes and 

demographic changes happen, to shift them to different locations or 

to different sizes. I just want to point that out. 

Senator CARPER. OK, thanks. Mr. Peck. 

Mr. PECK. That is absolutely right. As I said, when you have permanent needs, long-term needs, and corporate real estate executives do make the same kind of determination, for long-term needs, 

you want to be in owned space pretty much. For the areas where 

demographics are changing—Social Security offices have often been 

the example of this—you want leased space. And with medical facilities, you obviously have to have face-to-face consultation. 

On the other hand, with Social Security, and we have been talking to Social Security about this, to a large extent, even the aging 

demographic now is computer literate and that is going to change 

where and how many Social Security field offices they need and 

that may allow us to reduce the leases in Social Security offices, 

as well. 

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Senator CARPER. OK. Mr. Werfel, let me just ask, what other approaches, aside from this BRAC-like approach, what other approaches did the Administration consider in helping us deal with 

the problem of surplus or underutilized property? What other approaches did you consider and why did you settle on this BRAClike approach as opposed to one of the others? 

Mr. WERFEL. I think, as I mentioned earlier, as we pulled back 

the onion layer on agency inventories, we started to see some 

transformational opportunities that existed and they seemed to orient around areas that were going to be tough to address under the 

current legal and regulatory framework. The three basic issues are 

the process is long and can be tiresome and bureaucratic, the financial up-front money is not always in place, and then, obviously, 

the political or competing stakeholder interests. 

One option that we have considered is more of a kind of a 

straight to legislation. So we do the work and we show you our 

cards in terms of what we have and you guys react to it. We say, 

here are the 10 best recommendations that we have. What I have 

learned and what I believe is that if you sent me off with my colleagues to try to do that, knowing what I know about how the government works and the back and forth, we will take a bite out of 

that apple and try to give you something, but it will be a smaller 

bite than if you sent off an independent board to do the same work, 

because I have in my position, and we all have, constraints about 

what we can reach for and how bold we can be. And so in many 

ways, that is an option, but I think we are going to come back with 

a smaller piece. 

And I also believe that if we did submit to you an Administration-generated set of recommendations and put it on Congress’s 

plate, that small bite would get even smaller by the time it got 

through the process. So it is really, from our vantage point, how 

big and bold do you want to be and aggressive, and in this budgetary climate and the more we got excited about these transformational opportunities I think the Social Security offices is a 

good example, USDA field offices, and then numerous high-value 

properties throughout the United States where the agencies have 

scratched their heads about how to even approach getting rid of 

it—we said, let us go for the larger chunk. The budget environment 

right now demands that we maximize our approach. 

Senator CARPER. I think you were quoted, Mr. Werfel, in maybe 

it was before a House Committee, the House Transportation and 

Infrastructure Committee—I think it says you stated that a Civilian Property Realignment Board could save the Federal Government $15 billion in the first 3 years of its operation, is that correct? 

Mr. WERFEL. Yes. 

Senator CARPER. And when—how long do you think it would take 

to stand up the board and actually begin its operation? 

Mr. WERFEL. I think it can be—I mean, I think we—— 

Senator CARPER. Will it be reasonable? 

Mr. WERFEL. I think it can be done relatively quickly if we are 

focused on execution. One thing I learned during the Recovery Act 

is if you give us a deadline, no matter how complex, we will figure 

it out and plow through. 

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43 

I would probably look at an 18-month or so lead time, once the 

bill is up and running, for us to get the members together, get 

them positioned, get their staff. One of the things that we are 

doing right now to maybe diminish that 18-month lead time is we 

have reformed this Real Property Advisory Committee. Director 

Jack Lew signed out a memorandum on the same day we transmitted the Civilian Property Realignment Act for congressional 

consideration, on May 4, creating a Real Property Advisory Committee made up of CFOs and senior real property officers, and Mr. 

Peck and I both sit on the Committee, as well. 

And one of the main objectives of that Committee is to provide 

the board with a set of analytics and a set of information that allows them to hit the ground running. Now, they do not have to 

take any of it because they are independent, but we did not want 

them showing up to an empty office. We wanted them showing up 

to as many months and as many blood, sweat, and tears that we 

can put into the analytics, if you approach it this way, if you approach it that way, and just a lot of slicing and dicing. I think that 

will help accelerate. 

Senator CARPER. All right. Mr. Peck. 

Mr. PECK. May I say that is probably right for setting up the 

board. I think that given all the things we are doing now, though, 

that if we knew that we were getting legislation or if the legislation 

were passed, ostensibly, we would be able to present that board at 

almost its first organizational meeting with a first cut at the property. So if it is 18 months to get them going like that, I think shortly after they meet, they would be able to start making the decisions 

that I think we would all like them to make so that we could start 

moving properties through the pipeline. 

Senator CARPER. OK. The last question I will probably ask will 

be of Mr. Wise and Mr. Lepore. I am not going to ask it just yet, 

but I am going to telegraph my pitch, all right. And the question 

I ask after asking another one, maybe of Mr. Werfel, is if you were 

in our shoes—you are an independent watchdog agency. We have 

great respect for you and genuine affection, and here is my question. It is going to be, if you were in our shoes, if you were sitting 

on this side of this dais instead of at the witness table, what would 

you do? It is a pretty simple question. If you were sitting on our 

side—do not answer it yet, but if you were sitting up here, you 

were Senator Brown or Senator Coburn or Senator Begich or me, 

what would you do if you were part of this Committee? Thank you. 

And to Mr. Werfel, my question to you is I understand that a 

month or so ago, the Administration released a list, I think it is 

about 14,000 properties, I think you said, that have been reported 

excess by the Federal agencies. To the average person, it sounds 

like a lot of properties. It sounds like a lot to me. And the sale of 

these proceeds could generate a substantial amount of revenue and 

costs that could be used to pay down the deficit. I think you mentioned as much as $15 billion over 3 years. 

My staff has had the data, sort of drilled down on the data a little bit and found that of those 14,000 or so properties on the list, 

there are about, oh, about 1,800 that have maybe already been disposed of and that about roughly 5,500 were in the disposition process, and I do not know if the disposition process takes a month, a 

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44 

year, a decade, or whatever. But in other words, about 50 percent 

or a little bit more of these assets appear to be somewhere in the 

disposition process. 

I would just like to ask today, how many excess properties are 

in the Federal inventory? Any idea how many excess properties are 

in the Federal inventory, I guess, keeping in mind those numbers? 

Mr. WERFEL. I mean, a couple of thoughts on that. The 14,000 

that we released is a snapshot in time. What we do is we collect 

the data on an annual basis and that provides us an annual snapshot. And what we will try to do on the Web site where we release 

the information is update it. So I think what that data represents 

is at the end of Fiscal Year 2009, our inventory had approximately 

14,000 assets that were designated as excess. When we released 

the information a month or two ago, we tried to update and say, 

well, since that time, 1,800 have been disposed of. Our—— 

Senator CARPER. Is that 1,800 out of the 14,000—— 

Mr. WERFEL. Out of the 14,000. 

Senator CARPER [continuing]. That were listed in—that really existed in 2009? 

Mr. WERFEL. Yes. Yes. 

Senator CARPER. OK. 

Mr. WERFEL. Our main emphasis around the release of those 

14,000 assets is a few things. It is, one, it is transparency to make 

sure that the public is holding us accountable to get rid of them 

and the public might be able to identify things that are not on that 

list that they think should be. 

And, really, I would like you to think about it as clearing out the 

underbrush. We have to get a better handle on these excess assets 

and dispose of them more quickly and rapidly and we are working 

hard to do it. 

But in terms of the $15 billion opportunity, it does not exist within those 14,000. The $15 billion opportunity exists in those 

tougher to reach places where we have been unable to push them 

into excess because we have been stopped in our tracks by a variety of different barriers, and the CPRA board is intended in many 

ways to increase the number of assets that are excess so that we 

can move them more quickly off our books. Right now, they are in 

our inventory and they are going to stay in our inventory even 

though they might not necessarily need to be in our inventory unless we come up with a game changing set of policies to advance 

them forward, and that is really what we are here to ask for your 

help to do. 

Senator CARPER. OK. Thanks. All right. Mr. Wise, Mr. Lepore, 

two wise men. [Laughter.] 

Mr. WISE. Well, I will do the best I can. We are working with 

the Committee to try to answer these questions. We are doing, in 

fact, two new engagements on excess property and leasing issues; 

we hope we will contribute to helping the Congress make these 

kinds of decisions. We have had experience at GAO studying pretty 

thoroughly the BRAC process and it seems to have worked relatively well. I will let Brian explain in detail in response to your 

question. 

Mr. LEPORE. Yes, Mr. Chairman. I think in one sense, the BRAC 

process has been a reasonable process for making very difficult deH605-41331-79W7 with DISTILLER

45 

cisions among competing interests, many stakeholders that have a 

well understood and vested interest in these installations, and we 

can understand how that comes about. Those are, as you have 

heard and as you well know with places such as Dover, a very important C–5 base, these really are, in some cases, almost major cities or minor, medium-sized cities in a community. 

On the other hand, the BRAC process has created a system 

whereby one can review candidate recommendations, hopefully in 

a consistent way using a consistent set of criteria and in a transparent way. You heard Senator Dixon, when he was here earlier, 

who chaired the 1995 Commission. He indicated that he thought 

transparency was important. The BRAC process and the BRAC 

Commission process generally has been pretty transparent, the exception being when classified information is being discussed. 

So I think in some ways, the BRAC law may offer you a model. 

It may not be a perfect model since there clearly are significant differences. The Department of Defense is a department under a single secretary. In this case, you have multiple Federal agencies and 

departments under various agency heads. So it is not a perfect 

model, but I think there have been circumstances where—and are 

circumstances where you may be able to pull from that process. 

The other point I will make is I think you had a lot of good ideas 

here today from the first panel and the second panel, and I think 

the advice we would always give is pick and choose the best ideas. 

I think you have heard a lot of good ideas today, some perhaps 

competing, but I think, nonetheless, BRAC, all of these other ideas 

combined, you may very well be able to find a process that is really 

going to get this done. 

Senator CARPER. Does anyone have a closing thought? Yes, Mr. 

Peck. 

Mr. PECK. At the risk of making people’s eyes glaze over, but it 

makes an important point that Danny just tried—just was making 

the point, that of the 14,000 assets which are described as excess, 

each asset, each on a property is categorized separately as an 

asset. So everyone says 14,000 assets. There may be, if we get rid 

of a military depot, that may be 300 assets. So there are fewer discrete properties that can be sold on that list. And so taking a look 

at that list by itself does not get you to the $15 billion. We need 

this authority to get at some of the other properties. 

And finally, an authority which you will not see in the legislation 

because we already have it is the authority to make use of private 

sector real estate consultants and brokers to help us do this. We 

do this as a routine in GSA anyway. We have the authority and 

have used the authority to bundle properties, as one of the panelists on the previous panel said. 

So I want you to know that there are properties which we can 

use aggressively right now, but there is just a wall which we are 

going to hit unless we get this other side of it, the ability to go out 

to agencies, make sure we really can vacuum up all of the excess 

property in a more direct way and to make decisions faster. 

Senator CARPER. Any other closing thoughts? I will add one last 

observation. I serve—one of the other Committees I serve on is the 

Finance Committee, and Senator Baucus, our Chairman, pulled together a—we have done it—actually, he has pulled together a seH605-41331-79W7 with DISTILLER

46 

ries of hearings this year where we have otherwise men and 

women who come and talk with us and share their ideas for deficit 

reduction, and a month or two ago, among the witnesses that we 

had was Alan Blinder, whom some of you may recall was Vice 

Chairman of the Federal Reserve for a number of years not that 

long ago. And in his comments on deficit reduction, among the 

things that he said in his testimony was that the 800-pound gorilla 

in the room for deficit reduction is health care costs, and unless we 

got our arms around health care costs, we are—not exactly, these 

are not his words—but pretty much doomed. And he said everything else is not superfluous, but it is smaller change. 

When he finished his testimony, the other witnesses testified and 

then a number of us, we had an opportunity, as we have done here 

today, to ask questions. And it came my turn to ask a question and 

I said, ‘‘Dr. Blinder, you have mentioned that unless we address 

how to get better health care results for less money, that we are 

still going to have a huge problem with the deficit.’’ And I said, 

‘‘What advice would you have for us?’’ 

And he said in his response, he said, ‘‘I am not an expert on 

health care, but let me just say as a layperson, let me just offer 

you this advice. Here is my advice,’’ he said. ‘‘Find out what works. 

Do more of that.’’ That is all he said. Find out what works and do 

more of that. 

We need to find out what works and do more of that, and part 

of it could be our experience with BRAC and to do more of that. 

Part of it could be to learn from the VA and the work that you 

have done. It is sort of—I am reminded of the fact that those two 

moral imperatives that I talked about, to meet the needs of the 

least of these and also to do it in a fiscally responsible way? That 

is really your charge at VA, and you are oftentimes held out as an 

agency that does a pretty good job in these areas. 

Senator Coburn and I and our other colleagues are not going 

away on this issue. This is one I want us to resolve in this Congress and am determined to do that. I am grateful to my colleagues 

and I am grateful to our staffs for the work that they have done 

in preparing for this and grateful to you for the work that is being 

done, has been done, and is being done on this front. Let us just 

work together. We are all in this together, and we have to figure 

out how to deal with this, realize the savings that Mr. Werfel has 

spoken of here and previously in his House testimony. We need to 

stop spending that kind of money, to save it instead. 

All right. Thank you very much, and with that, this hearing is 

concluded. 

Again, my colleagues will have 2 weeks to submit their questions 

and we would ask that you respond to those in a timely manner. 

Thank you so much. 

We are adjourned. 

[Whereupon, at 4:24 p.m., the Subcommittee was adjourned.] 

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