GAO United States

General Accounting Office

Washington, D.C. 20548

General Government Division

B-277377 

July 7, 1997

The Honorable Richard K. Armey

Majority Leader

House of Representatives

The Honorable John Kasich

Chairman, Committee on the Budget

House of Representatives

The Honorable Dan Burton

Chairman, Committee on Government

 Reform and Oversight

House of Representatives

The Honorable Bob Livingston

Chairman, Committee on Appropriations

House of Representatives

Subject: The Results Act: Observations on GSA’s April 1997 Draft Strategic

Plan

On June 12, 1997, you asked us to review the draft strategic plans

submitted by the cabinet departments and selected major agencies for

consultation with Congress as required by the Government Performance

and Results Act of 1993 (the Results Act). This letter is our response to

that request concerning the General Services Administration (GSA).

Objectives, Scope,

and Methodology

Our overall objective was to review and evaluate the latest available

version of GSA’s draft strategic plan. Specifically, we (1) assessed the draft

plan’s compliance with the Act’s requirements and its overall quality,

(2) determined if GSA’s key statutory authorities were reflected,

(3) identified whether discussions about crosscutting functions and

interagency involvement were included, (4) determined if the draft plan

addressed major management problems, and (5) discussed GSA’s capacity

to provide reliable information about its operations and performance. We

obtained a copy of the April 28, 1997, strategic plan draft that GSA provided

to the House of Representatives staff team working with the agency. On

June 13, 1997, GSA provided us with a new mission statement and updated

goals and objectives and said that it was in the process of revising the

other parts of the plan. Where appropriate, we examined the updated

information GSA provided, but, for the most part, we based our review on

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the April plan. As agreed, our assessment of the agency’s draft plan was

generally based on previous work.

Specifically, to review the GSA plan, we relied on our May 1997 guidance

for congressional review of the plans;1 OMB guidance on developing the

plans (Circular A-11, Part 2); our past work reviewing selected Results Act

pilot efforts;2

 our general knowledge of GSA operations; and many reports

and testimonies on GSA we have issued over the years. A list of our major

products related to GSA operations is on pages 26 through 28. As you

requested, we coordinated our work on GSA’s key statutory authorities and

GSA’s capacity to provide reliable information with the Congressional

Research Service and the GSA Inspector General’s office, respectively. We

did our work between June 13 and July 2. GSA officials provided oral

comments on a draft of this correspondence, which are reflected in the

Agency Comments section on page 20.

Background As the federal government’s principal real estate and business agent, GSA’s

activities and programs are diverse and have governmentwide

implications. Its real estate portfolio, supply procurement and distribution

activities, travel and transportation services, telecommunication and

computer services, and property management and disposal function

involve huge sums of money and extensive interaction with both the

federal and private sectors. GSA, in many respects, is comparable to a large,

diversified commercial business. If GSA were a private sector company, it

would rank high, in terms of sales, on the Fortune 500 list of the largest U.

S. companies.

GSA spends billions of dollars to provide many of the facilities, goods, and

services that federal agencies need to carry out their missions. Through

various revolving or trust fund-type arrangements, GSA buys most of these

goods and services from private vendors and resells them to agencies.

Additionally, GSA arranges for federal agencies to purchase billions of

dollars worth of goods and services directly from private vendors through

its governmentwide supply, travel and transportation, automated data

processing, and telecommunications contracts. Furthermore, when it was

established in 1949, GSA was envisioned, primarily but not exclusively, as a

policymaking body with the option of delegating its authorities while

1

Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate Congressional Review

(GAO/GGD-10.1.16, May 1997).

2

GPRA Performance Reports (GAO/GGD-96-66R, Feb. 14, 1996).

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maintaining comprehensive accountability to Congress for economy and

efficiency.

GSA has been preparing strategic plans for several years and is currently in

the process of revising its plan to reflect the requirements of the Results

Act. It is important to recognize that under the Act, the final plan is not

due until September 1997. Furthermore, the Results Act anticipated that it

may take several planning cycles to perfect the process and that the final

plan would be continually refined as various planning cycles occur. Thus,

our comments reflect a snapshot status of the plan at a given point in time.

We recognize that developing a strategic plan is a dynamic process and

that GSA is continuing work to revise the draft with input from OMB,

congressional staff, and other stakeholders.

Results in Brief The April 28 plan that we reviewed includes the six components required

by the Act. In particular, the goals in the plan reflect GSA’s major statutory

responsibilities, and the plan indicates that several quantitative

performance objectives and measures will be used. However, our analysis

showed that the plan could better meet the purposes of the Act by

providing more descriptive information on how goals and objectives will

be achieved, how program evaluations were used in setting goals, and

what the schedule will be for future evaluations; providing greater clarity

and context in the four remaining, required components; and, generally,

providing better linkages among the plan’s components. In addition, the

plan could be more useful if it provided a fuller discussion of key statutory

authorities reflected in the plan and a more explicit discussion of

crosscutting activities and agency stakeholder involvement, major

management challenges, and GSA’s capacity to provide reliable information

on achievement of its strategic goals.

More specifically, two of the required components of the plan—how the

goals and objectives will be achieved and program evaluations—did not

contain sufficient information to fully achieve the purposes of the Results

Act and related OMB guidance. For example, the Act requires that the

section on achievement of goals and objectives describe the processes and

resources needed to meet the goals and objectives of the plan, while OMB

guidance on the program evaluations section states that the plan should,

among other things, (1) describe how program evaluations were used to

prepare the plan and (2) outline the scope and methodology and key

issues to be addressed in future evaluations. These elements were not

included in the two sections.

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Although the other four required components generally complied with the

intent of the Act and related OMB guidance, they could be made more

useful and informative. For example, GSA’s mission statement and general

goals and objectives could benefit from greater emphasis and clarity on

GSA’s key statutory responsibilities related to economy and efficiency, as a

reflection of the taxpayers’ interests. The key external factors section

could be clearer and more informative and does not include some key

factors, such as changes in market activities affecting real property

management, that need to be considered. The section on relating

performance goals to general goals/objectives is a good attempt at

outlining how GSA plans to link goals, objectives, and measures; however,

as GSA recognized in the draft plan, this section would benefit from

additional detail, such as making performance goals and objectives more

quantitative or specific.

We also think that the plan could be made more useful to GSA, Congress,

and other stakeholders by providing a fuller description of statutory

authorities and an explicit discussion of crosscutting functions, major

management problems, and the adequacy of data and systems. Although

the plan reflects the major pieces of legislation that establish GSA’s mission

and explains how GSA’s mission is linked to key statutes, GSA could provide

other useful information. For example, it could describe its responsibilities

under specific provisions of its key statutes and other laws that broaden

the scope of GSA’s responsibilities when its plan includes goals and

objectives based on such statutes. In addition, the plan is silent on

crosscutting issues and makes no mention of whether GSA coordinated

with related stakeholders. It does not explicitly discuss the potential for

crosscutting issues to arise or how these issues might affect successful

accomplishment of goals and objectives.

Furthermore, the plan is silent on the formidable management problems

we have identified over the years—issues that are important because they

could affect GSA’s development of, or ability to meet, its strategic goals.

Also, we and others, including GSA’s Inspector General, have identified

problems with the reliability and availability of data in GSA’s

program-related and financial management information systems. In its

Federal Managers’ Financial Integrity Act Report, GSA recognized for the

past several years that it has had problems with providing management

with timely and accurate data reporting throughout the year. According to

GSA, it has developed a new system, one we have not evaluated, that has

corrected some of these deficiencies. However, GSA makes no mention of

how data limitations would affect its ability to measure performance and

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ultimately manage its programs. We believe that consideration of these

areas would give GSA a better framework for developing and achieving its

goals and help stakeholders better understand GSA’s operating constraints

and environment.

Draft Plan Does Not

Fully Achieve the

Purposes of the Act’s

Requirements, and the

Quality of Individual

Components Could Be

Improved

Six of the seven components of GSA’s April draft plan—with the exception

of the values section that GSA voluntarily included—correspond with the

six components required by the Results Act. Table 1 shows the Result

Act’s required components and the corresponding sections in GSA’s

plan—the numbers show the order in which the components appear in the

Act and the plan.

Table 1: Strategic Plan Components

Required in the Results Act and

Corresponding Components in GSA’s

Draft Strategic Plan

Strategic plan components listed by

Results Act

Strategic plan components in GSA April

1997 draft plan

1.Comprehensive Mission Statement

Covering the Major Functions and

Operations of the Agency

1. Comprehensive Mission Statement

2. General Goals and Objectives for the

Major Functions and Operations of the

Agency

3. General Goals and Objectives

3. Description of How the Goals and

Objectives Are to Be Achieved

5.How the Goals and Objectives Will Be

Achieved—Schedule and Resource

Implications

4.Description of How the Performance Goals

Included in the Performance Plan Shall be

Related to the General Goals and

Objectives in the Strategic Plan

4. Relating Performance Goals to General

Goals and Objectives

5. Identification of Key External Factors to

the Agency and Beyond Its Control That

Could Affect Achievement of General Goals

and Objectives

6. Key External Factors

6. Description of the Program Evaluations

Used to Establish/Revise General Goals with

Schedule for Future Program Evaluations

7. Program Evaluations

(Values section not required by the Act.) 2. Values

Source: The Government Performance and Results Act of 1993 and GSA’s April 1997 Draft

Strategic Plan.

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Although GSA included the six required components, our analysis showed

that the components dealing with how the goals and objectives will be

achieved (strategies) and program evaluations do not fully reflect the

purpose these sections are supposed to fulfill as outlined in the Act.

• The section on strategies to achieve the general goals and objectives

(“How the Goals and Objectives will be Achieved: Schedule and Resource

Implications”) focuses for the most part on several mission-critical capital

requirements issues and briefly describes the status of GSA’s staffing

stability and culture. It does not describe GSA’s strategy for implementing

the plan or achieving goals. Under the Results Act, strategic plan sections

on strategies are to briefly describe the operational processes, staff skills,

and technologies, as well as the human, capital, information, and other

resources, needed to meet the goals and objectives of the plan.

Additionally, according to OMB Circular A-11, Part 2, strategies should also

outline how GSA will communicate strategic goals throughout the

organization and hold managers and staff accountable for achieving these

goals. Neither of these requirements were addressed in this section of the

plan.

• The section on program evaluations does not fully achieve the purposes of

the Act or meet OMB’s guidance. This section of the plan is intended to

show how program evaluations were used to establish strategic goals and

to lay out a schedule for future program evaluations. According to OMB’s

guidance, this section should briefly describe program evaluations that

were used in preparing the strategic plan and should outline (1) the

general scope and methodology for planned evaluations, (2) key issues to

be addressed, and (3) a schedule for future evaluations. This section in

GSA’s draft plan is quite general and brief. It says that GSA will (1) continue

to track results against plans and review performance, (2) do general

performance reviews to evaluate nationwide business lines and include

required performance reviews, and (3) do quarterly reviews of selected

activities. It does not (1) describe how program evaluations done by it or

others, such as its Inspector General or GAO, were used to establish

strategic goals; (2) provide much specific information on the scopes and

methodologies of issues to be addressed in forthcoming evaluations; or

(3) identify when various evaluations will be done, except for the

“quarterly review of selected activities” mentioned.

One way that GSA could improve the strategies component of the plan

would be to describe the key strategies it intends to use to accomplish its

major program goals. For example, in GSA’s revised Federal

Telecommunications Service Program strategy and business plan analyses,

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issued prior to the draft strategic plan, it described its five key strategies

for achieving the program’s goals. GSA said that it generally planned to

achieve the two program goals of ensuring the best service and price for

the government and maximizing competition by

• using multiple overlapping, staggered contracts;

• using comprehensive and niche contracts;

• awarding minimum revenue guarantees to vendors that compete and win;

• leveraging the government’s large traffic volumes; and

• aggressively pursuing opportunities to maximize competition.

By including this type of information in its proposed strategies for all of its

strategic goals, GSA could help stakeholders with their review of GSA’s plan.

We also noted that the draft plan does not contain a discussion of GSA’s

information technology strategy although development of this strategy is

under way. In developing this strategy, it may be helpful if GSA addresses

the “year 2000 problem” as well as any significant information security

weaknesses—two issues that we have identified as high risk across

government. In addition, the information technology strategy may benefit

from a discussion of how GSA plans to comply with the Clinger-Cohen Act

of 1996. This act calls for agencies to implement a framework of modern

technology management based on practices followed by leading private

sector and public sector organizations that have successfully used

technology to dramatically improve performance and meet strategic goals.

The four other components of GSA’s plan that correspond to the sections

required by the Act appear, overall, to be headed in the right direction.

They could, however, be made more useful and informative. These

sections are the comprehensive mission statement, general goals and

objectives, relating performance goals to general goals and objectives, and

key external factors.

Mission Statement GSA’s April 28, 1997, draft plan contains both simple and formal mission

statements. The simple mission statement in this version of the plan is “GSA

is About Great Work Environments.” The formal mission statement is “To

improve the cost-effectiveness of the federal government while ensuring

quality work environments for its employees.” According to the plan, GSA

developed the simple mission statement so that it could be easily

communicated to all levels of its organization. On June 13, 1997, GSA

provided us with the following updated mission statement: “We provide

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expertly managed space, supplies, services and solutions, at the best value,

to enable Federal employees to accomplish their missions.”

GSA’s updated mission statement is an improvement over the prior version

because it is more specific in describing GSA’s statutory mission. It is

results oriented and clearly states the public need GSA fulfills—enabling

federal employees to accomplish their missions. We noted, however, that

the narrative supporting the comprehensive mission statement section in

the April 1997 plan explained GSA’s commitment to being “good stewards

of the taxpayer’s dollar” and “safeguarding the taxpayers’ resources.” But

the accompanying mission statement, as well as the updated mission

statement provided in June, makes no direct mention of GSA’s statutory

responsibility to ensure economy and efficiency as a reflection of the

taxpayers’ interests. If the reference to “best value” in the updated mission

statement is intended to address the issue of economy and efficiency, GSA

may wish to incorporate this concept more directly in the mission

statement or other components of its plan where it believes doing so

would be appropriate.

Goals and Objectives GSA’s April 1997 draft plan contained the following five goals:

• reduce costs: reduce overall costs to the government for the goods and

services GSA makes available;

• invest wisely: invest taxpayers’ money wisely, obtaining the best yield on

the expenditure of federal funds through cost-effective solutions;

• manage assets: improve management of the federal government’s assets;

• spread best practices: help all federal agencies reflect the best practices

for policies and operations; and

• plan for the future: provide leadership for the future of federal work.

On June 13, 1997, GSA provided us with the following four revised goals:

• competition: become the space/supplies/telecommunications provider of

choice for all federal agencies by delivering quality products and services

at the best value;

• thrilling customers: thrill our federal customers by anticipating their needs

and working with them to develop creative solutions to their

mission-related problems;

• asset management: conserve government assets in GSA’s care and provide

supportive policy solutions for governmentwide asset management; and

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• innovation: design and develop future federal work environments with

state-of-the-art technology, innovation, and “best practice” in use of

space, furniture, equipment, telephones, contracts, and other tools.

GSA’s general goals and objectives, from both the April plan and the update

provided in June, reflect a positive attempt to define results that GSA

expects from its major functions. In comparing the two sets of

goals/objectives, it seems to us that GSA consolidated the five April goals

into three more general goals—competition, asset management, and

innovation—and added a new goal related to customer satisfaction. The

first and third goals—competition and asset management—address GSA’s

major mission-related functions—space, supplies, telecommunications,

and overall asset management—while the others seem to represent

concepts that go hand-in-hand with good, strategic management.

These four goals appear to be results oriented and do address, in some

form or another, GSA’s primary activities. Even so, we offer the following

observations for consideration as the plan evolves. GSA seems to have

de-emphasized economy and efficiency in the goals/objectives. Although

GSA’s responsibilities to economy and efficiency could be implicit in the

phrase “at the best value” in the first goal, the importance of this GSA core

value does not seem explicit enough in the goals/objectives. By being more

explicit about economy and efficiency GSA would, in our view, greatly

improve the goals/objectives as a whole.

In addition, GSA’s first goal, to become the “provider of choice” for all

federal agencies, could be confusing because it may imply that agencies

always have a choice when obtaining space, supplies, and

telecommunications. Although GSA is moving toward greater competition

in some areas such as supplies and leasing, it is still the required provider

for most federal agencies in other areas, such as construction and major

alteration of general purpose office space. Therefore, greater clarity on the

result GSA is aiming to achieve vis-a-vis the services it provides to federal

agencies would be beneficial. In addition, GSA’s updated goals/objectives

seem to be expressed in terms that may be difficult to translate into

quantitative or measurable analysis. We believe that it will be challenging

for GSA to develop corresponding performance measures that will enable

stakeholders to determine whether its goals are actually being achieved.

As another point, OMB Circular A-11 specifies that strategic plans are to set

forth long-term management goals as well as programmatic goals. To

better meet the purposes of the Act and the Circular A-11 guidance, GSA

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could reflect in its goals the need to resolve long-standing management

problems. As an example, in developing strategic goals, GSA could be

sensitive to the need for better program-related and financial data needed

to oversee programs and measure performance. The problems GSA has

experienced in the data reliability area are discussed later in this letter.

Relating Annual

Performance

Goals/Measures to General

Goals and Objectives

The April plan’s section on relating annual performance goals and

measures to general goals and objectives represents a good attempt at

linking goals/objectives with performance measures. This linkage is

important because it will allow Congress to judge whether GSA is achieving

its goals. GSA’s use of a matrix was helpful in illustrating the linkages

among goals, objectives, and measures. In fairness to GSA, the text of the

plan we reviewed stated that this section was intended to stimulate

discussion within GSA and that additional details, such as baseline and

future year projections, would be added in the plan development process.

In addition, this section was based on the five goals contained in its

April 28, 1997, version of its draft plan and was incomplete in parts.

Overall, the performance goals, objectives, and measures developed thus

far were linked to GSA’s general goals. However, to better allow GSA and its

stakeholders to measure actual performance against targets, it is

important that GSA effectively (1) follow through on its commitment to add

additional detail and (2) reflect all of its major programs in its

performance goals and measures.

GSA’s draft plan includes some specific performance goals, performance

objectives, and measures. In reviewing them, we noted that in many

instances, the performance goals are fairly general; and, in some instances,

what the draft plan shows as a measure is really a performance objective.

For example:

• Under the general goal of reducing overall costs to the government for the

goods and services GSA makes available, one of GSA’s draft performance

goals is to reduce overall costs to the federal government for the goods

and services made available through the Federal Supply Service. The

corresponding performance objective is to reduce costs in the interagency

fleet management program, and the performance measure is cost per mile.

Although the proposed measure is specific and quantitative, the

performance objective and goal are fairly general and are not quantitative

or time bound. Therefore, GSA, Congress, or other stakeholders would not

be able to easily gauge progress since there is no specific target. One way

GSA could improve this situation would be to set a specific, quantitative

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cost reduction goal covering a multiple-year period that would then

support specific, quantifiable, annual performance objectives, or targets.

To illustrate, the performance goal could be to reduce costs per mile of

managing the interagency fleet by a specific amount between fiscal years

1998 and 2001, and the performance objectives could be to achieve a

specifically identifiable reduction in the cost per mile annually.

• Under the same general goal as the first example, another of GSA’s

performance goals is to effectively manage Public Building Service

operations to maintain costs at or below those prevailing in comparable

private sector activities. Although use of a private sector comparison in

the goal is noteworthy, stakeholders would have difficulty tracking

progress against the goal, because it is not quantitative or time bound.

Further, one of the performance objectives for the goal is to reduce costs

for building operations; and one of the measures reads, “In FY 98 cost per

sq. ft. for cleaning will be ____ vs ____ in FY 97.” As with the goal, the

performance objective also is not quantitative, and it appears that the

measure as stated is more suited to be the performance objective. One

way to improve this situation would be for GSA to set a specific,

quantitative cost per square foot reduction goal over a multiple-year

period, use what is now shown as the measure as the objective, and show

the measure as cost per square foot. GSA would also need to provide

context in terms of the prevailing comparable cost per square foot in the

private sector.

Key External Factors OMB Circular A-11 points out that agencies’ achievement of their goals and

objectives can be influenced by certain external factors that exist, occur,

or change over the time period covered by their plans. The circular notes

that these factors can be economic, demographic, social, or environmental

and states that the strategic plan should describe each external factor,

indicate its link with a particular goal(s), and describe how the

achievement of the goal could be affected by the factor.

In GSA’s April plan, the key external factors section identified the following

factors: service to state and local governments, technology changes and

missed opportunities, where federal workers will work, and the size of the

federal workforce. However, regarding the factor about service to state

and local governments, the text is unclear as to how enabling state and

local governments to use GSA contracts would affect the goals. Although

GSA recognizes that there are some concerns about providing services to

state and local governments within the executive and legislative branches,

the plan would benefit from a more detailed explanation of the issues and

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the steps GSA plans to take to mitigate these concerns. For the factor on

technology changes, the narrative states that GSA may lose customers if it

is restrained from taking advantage of newer technologies—an

understandable external factor. However, the narrative is not explicit

about the underlying external factor or factors that could cause this to

happen. In addition, the plan does not address such factors as the

Telecommunications Act of 1996—a comprehensive rewrite of U.S.

communications law—which should provide both opportunities and

challenges for GSA in its procurement of telecommunications services.

The discussion on the key external factor on where federal workers will

work could benefit from an explanation of why greater reliance on

working at home will require more money than traditional approaches. It

seems logical that this shift would in fact be more cost effective in the long

run because of less reliance on expensive office space. Finally, it is

unclear from the narrative why the changing size of the federal workforce

is an external factor that would affect GSA’s ability to achieve its goals.

More discussion about GSA’s perspective on this factor would be helpful.

In addition to the factors GSA identified, we noted that this section had

limited or no information on some other important external factors we

have identified over the years. These factors pertain mostly to GSA’s real

property activities and include: shortfalls in the Federal Buildings Fund

(which were alluded to in GSA’s plan but were not explicitly identified as a

major external factor); the current budget process (i.e. the lack of a capital

budget); and the nature of the prospectus authorization process. These

factors, which tend to impede GSA’s ability to be more businesslike in the

real property area, are fully explained in our October 1991 testimony on

real property issues facing Congress. (See Related GAO Products on p. 20.)

Other Observations Overall, the relationships between some of the various components could

be clearer and more direct. For example, the strategies, key external

factors, and program evaluations sections are not directly linked to the

general goals and objectives. Improving these linkages could make the

plan easier to follow and allow the reader to better understand how the

relationships among the various components affect GSA’s ability to meet its

goals.

As previously noted in table 1, the components in GSA’s plan do not appear

in the same order as they are outlined in the Results Act. For example, the

strategies section (how the goals and objectives will be achieved) in GSA’s

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plan appears after the section on relating performance goals to general

goals and objectives. It seems to us more logical that the strategies section

would appear before the section on relating performance goals to general

goals and objectives.

Key Statutory

Authorities Generally

Reflected in GSA’s

Strategic Plan

GSA’s draft plan discusses the three major pieces of legislation that serve as

the basis for the mission statements it sets forth, and the goals and

objectives identified thus far reflect GSA’s underlying statutory

responsibility. The three laws cited by GSA are as follows:

• The Federal Property and Administrative Services Act of 1949 makes GSA

responsible for providing an economical and efficient system for the

purchase of personal property and nonpersonal services for federal

agencies, utilizing and managing available government property, and

disposing of surplus government property. GSA is also responsible for the

assignment and reassignment of space for federal agencies in

government-owned and leased buildings and for the operation,

maintenance, and management of federal buildings;

• The Public Buildings Act of 1959 authorizes GSA to construct and alter

public buildings for federal agencies if it is deemed to be most

advantageous to the United States; and,

• The Information Technology Management Reform Act of 1996 continues

GSA’s authority to manage and coordinate long-distance

telecommunications services for federal agencies.

Although GSA is authorized to provide telecommunications services to

federal agencies under the Federal Property and Administrative Services

Act of 1949, the draft strategic plan states that GSA has direct authority for

telecommunications under the Information Technology Management

Reform Act of 1996 (renamed the Clinger-Cohen Act of 1996 in the

Omnibus Consolidated Appropriations Act of 1997).

The April 1997 version of the draft plan indicates the linkages of the

mission, as spelled out in that version, to the key statutory authorities and

OMB’s designation in the information technology area. The general and

performance goals, objectives, and measures shown in the April draft plan

also relate to the mission as described in that version and to the key

statutes and OMB’s designation. Similarly, the goals, as revised in

June 1997, also relate to the key statutes and OMB’s designation.

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However, as previously mentioned, GSA’s statutory responsibilities to

promote economy and efficiency are not explicitly reflected in either GSA’s

April or June mission statements, even though discussions in the draft plan

emphasize GSA’s responsibility to be a good steward of the taxpayer’s

dollar. Also, amendments to the original statutes governing GSA and other

statutes broaden the scope of GSA’s responsibilities. These include laws

related to homeless assistance, environmental concerns, and child care

centers, to name a few. Although the Results Act does not require it, a

listing that briefly summarizes GSA’s responsibilities under laws that are

reflected in various components of the plan might help stakeholders better

understand the diversity and complexity of GSA’s overall mission and the

linkages between stated goals and objectives and the underlying statutory

authorities on which they rest.

For example, under the general goal of helping all federal agencies reflect

the best practices for policies and operations, the draft plan lists a

performance goal and three performance objectives to improve child care

centers overseen by GSA. One of the objectives is to ensure that child care

centers remain economically accessible to the average federal

employee—the measure for this objective is the percentage of slots filled

by children of federal workers. It would be helpful to stakeholders to

know that GSA does have specific statutory responsibilities related to

allotting space for child care centers and for GSA to briefly describe what

they are so stakeholders can have a basis on which to evaluate GSA’s

proposed goals and objectives. In fact, Public Law 100-202 [40 U.S.C. 490b]

specifies that federal employees shall be given priority for available child

care services and it states that at least 50 percent of the children for whom

child care services are provided are to be children of federal employees.

Crosscutting

Activities and Agency

Stakeholder

Involvement Not Fully

Discussed

GSA is a central management agency that has responsibility for the

performance of a wide range of policymaking and service functions. Given

this, it is involved in a number of crosscutting issues for which successful

performance depends on actions by GSA and other agencies. For example,

in the public buildings area, GSA seeks to provide leadership to federal

agencies in the use and management of real property. It is responsible for

the development, coordination, administration, and issuance of

governmentwide real property principles, guidelines, standards, criteria,

policies, and asset management principles concerning real property

programs. The federal government’s real property portfolio includes

almost 450,000 buildings and 650 million acres of land that together are

worth hundreds of billions of dollars. In the federal procurement area, GSA

Page 14 GAO/GGD-97-147R GSA’s Draft Strategic Plan
B-277377 

researches, develops, and publishes policy guidance to support the federal

acquisition system, through which federal agencies obligate over

$200 billion annually. Despite the potential for crosscutting issues that

affect GSA’s mission, the plan is silent on whether GSA coordinated with its

governmentwide stakeholders and does not discuss the potential for

crosscutting issues to arise as a major part of doing business and as an

ingredient to GSA meeting its goals and objectives.

An example in this area relates to one of GSA’s proposed goals that it

identified in its June 1997 mission and goals/objectives statement. The goal

relates to conserving the government’s assets in GSA’s care and providing

supportive policy solutions for governmentwide asset management.

Reducing space occupied by federal agencies that are downsizing could

fall under this goal. A review we are conducting on GSA’s and agencies’

efforts to save costs by reducing space that is no longer needed due to

downsizing has shown that at least in one area, GSA and the agencies must

depend on one another to achieve this goal. To illustrate, one obstacle

some agencies face in reducing space is the lack of funds to consolidate

space. To assist the agencies, GSA is experimenting with a program called

“Ponding,” which is an effort to consolidate small amounts of unneeded or

underutilized space, and demonstrating to Congress that by funding the

cost of space consolidations, long-term savings can be achieved.

Strategic Plan Does

Not Address Major

Management

Challenges

Over the years, we have reported on the major management problems that

GSA faces in carrying out its mission. In response to our work and the work

of others, including the GSA Inspector General and the National

Performance Review, GSA has undertaken efforts to reorganize, reform,

and reengineer its overall mission-related management approaches. For

example, in 1995, GSA attempted to identify the most cost-effective

methods of carrying out each of its 16 major mission support functions or

business lines under its Federal Operations Review Model (FORM). In

addition, GSA’s June 1997 revisions to its goals recognized the importance

of competition in providing goods and services—a concept initially

discussed in our 1992 Transition Report.3

 Nonetheless, GSA’s draft strategic

plan is silent on the status of its reform efforts. In addition, the draft

makes no mention of how GSA has worked to address the formidable

management problems that have been identified over the years or the

status of its efforts to address them.

3

GAO/OCG-93-28TR, Dec. 1992.

Page 15 GAO/GGD-97-147R GSA’s Draft Strategic Plan
B-277377 

This type of information could help GSA and its stakeholders in at least two

ways. First, it could help in the processes of developing and reviewing the

selection of goals, strategies, and objectives. Second, major management

problems could impede GSA’s efforts to achieve its goals and objectives,

and stakeholders could benefit from knowing what GSA has done, is doing,

or plans to do to address such problems. GSA clearly recognized the

importance of considering problems identified by GAO and others in its

previously issued strategy and business plan analyses for the Federal

Telecommunications Service Program. This plan recognized that the

lessons learned and verified over the years through reviews by GAO and

others were integral to its development of a new program strategy.

We have not recently examined GSA’s efforts to address the problems we

have identified over the last several years and have made only limited

examinations of reform efforts, such as FORM. Accordingly, we are not in a

position to comment on GSA’s success in these areas. The GSA Inspector

General’s office has been involved with the FORM process and believes it

has been instrumental in improving the delivery of GSA’s services and

reducing their costs. However, the Inspector General reported that FORM

evaluations should not be relied upon because better cost data are needed

for comparing competing service delivery options. The Inspector General

also reported that the benchmarking criteria used in each FORM analysis

were either limited in number or were not necessarily comparable to other

private or public entities engaged in similar activities.

We believe our past work, as well as that of GSA’s Inspector General,

identified problem areas significant enough to warrant some discussion in

the plan. At a minimum, in problem areas where GSA has taken successful

corrective actions, some discussion of how GSA addressed the problems

and intends to prevent them from resurfacing would be more informative

and useful. If the problems resurface, they could have a negative impact on

GSA’s ability to achieve its goals and measure performance. For other

problems where GSA may have had less success, the plan could identify

these and discuss how GSA plans to resolve them, because its ability to

successfully implement the Results Act may be hampered if these

management problems persist. The challenges GSA faces to correcting

major management problems that we have reported over the years

generally fall into four categories: (1) resolving conflicting roles,

(2) making GSA more businesslike, (3) strengthening GSA’s internal

management systems, and (4) improving GSA’s governmentwide

procurement practices.

Page 16 GAO/GGD-97-147R GSA’s Draft Strategic Plan
B-277377 

• Resolving Conflicting Roles. When GSA was established in 1949, it was

envisioned, primarily but not exclusively, as a policymaking body with the

option of delegating its authorities while maintaining comprehensive

accountability to Congress for efficiency and economy. Since its creation,

however, GSA has been torn between an internal dynamic that favors a

centralized approach for directly providing services and a largely external

expectation that its primary role should be to issue governmentwide

policy guidance and oversee decentralized operations within the

departments and agencies themselves. We have reported over the years

that building delegations, staffing reductions, increasing customer

demands, and changing work technologies and concepts collectively

dictate that GSA recognize that its traditional predilection for direct

operations must become secondary to strategic leadership. We have said

that GSA should not directly operate all the support services that federal

agencies need to accomplish their missions. Instead, it should set

governmentwide policy, provide effective and comprehensive oversight,

and operate activities only where it makes sense to do so and is cost

effective to have a central agency involved. (See, for example,

GAO/T-GGD-92-4, GAO/OCG-93-28TR, and GAO/T-GGD-95-96.)4

• Making GSA More Businesslike. As previously mentioned, GSA is in many

respects a large, diversified business enterprise. Its real estate portfolio,

supply procurement and distribution activities, travel and transportation

services, telecommunications and computer services, and property

management and disposal functions involve a cash flow of over $13 billion

annually. We reported in 1992 that if GSA were a private company, it would

rank among the top 50 on the Fortune 500 list. Despite its businesslike

mission, however, our work over the last several years showed that GSA

had difficulty operating in a businesslike manner in such areas as depot

operations and management of its real estate portfolio. For example, in

1992, we reported that GSA spent millions of dollars to modernize two of its

four large depots at a time when the private sector was reducing the need

for depots and moving toward direct deliveries of supplies. (See, for

example, GAO/GGD-93-32, GAO/T-GGD-95-96, GAO/T-GGD-95-149, and GAO/T-GGD-92-4.)

• Strengthening GSA’s Internal Management Systems. It is especially critical

that GSA’s operations be supported by reliable information systems and

adequately protected from fraud, waste, and mismanagement. However,

our work found that GSA’s general management and internal control

systems and practices needed substantial improvement. Our

September 1992 report on internal controls found that GSA’s operations

were not adequately protected from fraud, waste, and mismanagement.

4

All reports referred to by number are identified in full in the Related GAO Products section at the end

of this letter.

Page 17 GAO/GGD-97-147R GSA’s Draft Strategic Plan
B-277377 

GSA agreed with the bulk of this work and committed to implement various

recommendations we made to correct problems. (See, for example,

GAO/GGD-90-14 and GAO/GGD-92-98.)

• Improving GSA’s Governmentwide Procurement Practices. GSA is

responsible for operating or overseeing several governmentwide

procurement programs. However, our past work showed that the

government’s procurement practices need improvement. In September

1992, we identified procurement of common use supplies and supply depot

operations as two of eight areas that were highly vulnerable to fraud,

waste, and mismanagement. Further, in January 1993, we found that GSA

continued to award competitive supply contracts to vendors who

repeatedly had supplied defective or poor-quality products or who were

late with deliveries. (See, for example, GAO/GGD-92-98, GAO/GGD-93-34, and

GAO/GGD-94-137.)

GSA’s Capacity to

Provide Reliable

Information on

Achievement of

Strategic Goals Is

Unclear

To efficiently and effectively operate, manage, and oversee its diverse

array of public buildings, supply and transportation, information

technology, and telecommunications, and excess real and personal

property responsibilities, GSA needs reliable data. These data are needed so

that GSA can measure its progress and monitor, record, account for,

summarize, and interpret millions of transactions, as well as prevent,

detect, and combat instances of fraud, waste, abuse, or mismanagement.

As discussed previously, GSA relies on a number of automated management

information systems to carry out central management and

governmentwide service provider roles. However, our past work showed

that GSA lacks the timely, accurate, and reliable program data that it needs

to effectively manage and oversee its various activities and programs.

Several GAO and GSA Inspector General reports documented a variety of

operational and oversight problems at GSA that were caused by poor

management information.5

 In the public buildings area, many of GSA’ s

program-related information systems have been obsolete, inaccurate,

and/or unreliable. Consequently, we found that the systems did not permit

or facilitate planning or decisionmaking. In its fiscal year 1996

accountability report, GSA’s auditors noted that financial management

practices in the Public Buildings Service continued to require

improvement.

OMB guidance implementing the audit requirements of the Chief Financial

Officers Act of 1990 requires agency auditors to determine whether the

5

See, for example, GAO/T-GGD-96-19, GAO/GGD-94-145, GAO/GGD-93-34, and GAO/GGD-92-98.

Page 18 GAO/GGD-97-147R GSA’s Draft Strategic Plan
B-277377 

agency’s internal control structure provides reasonable assurance that the

data supporting the reported performance measures exist and are

complete, so as to permit preparation of reliable and complete

performance information. Between 1994 and 1997, the GSA Inspector

General’s office made limited audits of the internal controls over the

production of reliable data to support various GSA performance measures

and found mixed results. Specifically, of the eight audits, controls over

producing reliable data to support the performance measures were

considered to be low risk for four performance measures, moderate risk

for three, and high risk for one.

Regarding financial management information systems, GSA reported for

several years in its Federal Managers’ Financial Integrity Act Report that

deficiencies identified in the financial reporting area precluded managers

from having the appropriately detailed, accurate, and complete reports on

which to gauge financial performance and take appropriate actions. Also,

as GSA’s auditors noted in its fiscal year 1996 accountability report, a

number of reportable conditions are related to its financial statements,

including (1) the Public Buildings Service’s financial management

practices need improvement, (2) procedures to identify completed

construction projects are insufficient, (3) procedures for establishing

reserves for past due accounts require improvement, and (4) procedures

for establishing and evaluating the accuracy and completeness of year-end

accruals were not operating effectively. According to GSA, it has developed

a new system, one we have not evaluated, that has corrected some of

these deficiencies. On a positive note, GSA has been able to make its

year-end financial reports generally complete and has successfully

received unqualified audit opinions on its financial statements for a

number of years.

If GSA is to use data from its existing management information systems to

measure and manage program results, it needs to ensure that such data are

complete, reliable, and timely. At a minimum, GSA could discuss this issue

in its strategic plan especially with regard to (1) what it has done, is doing,

or plans to do, to address previously cited data problems; and (2) the ease

or difficulty it foresees with obtaining data to measure results, such as

private sector data that to its credit, it plans to use as a benchmark for

some goals and objectives. For example, one of its draft performance

goals is to manage public building operations at or below the prevailing

cost for comparable private sector activities.

Page 19 GAO/GGD-97-147R GSA’s Draft Strategic Plan
B-277377 

It would also be helpful to GSA’s stakeholders to explain in the plan how

GSA intends to obtain data on the second general goal in its June 1997 plan

revision—thrilling its customers. It would seem as though at least one

performance goal, objective, and measure would relate to customer

satisfaction with GSA’s services, but getting good information from

customers is sometimes problematic. For example, some organizations

experience low response rates when they attempt to survey their

customers. Thus, it could be helpful if GSA were to discuss its proposed

approach and the ease or difficulty it anticipates with measuring how well

it is thrilling its customers.

Agency Comments On June 30, 1997, we provided a draft of this letter to GSA for oral

comment. On July 2, 1997, we met with, and obtained comments from, the

two coordinators of strategic planning from the Office of Financial

Management and Office of Public Affairs, who are responsible for

preparing the strategic plan. These officials agreed with our observations

and said they found our comments informative and useful. They reiterated

that the development of the plan is an evolutionary and iterative process.

They added that it is especially important to recognize the need to reach

agreement or consensus on the mission statement and the general goals

and objectives before developing and then linking the other sections of the

plan.

As arranged with your offices, unless you publicly announce its contents

earlier, we plan no further distribution of this letter until 30 days from its

issue date. At that time, we will send copies of this letter to the Minority

Leader of the House of Representatives; Ranking Minority Members of

your Committees; the Chairmen and Ranking Minority Members of other

Committees that have jurisdiction over GSA activities; the Administrator of

GSA; and the Director, Office of Management and Budget. Copies will be

made available to others on request.

Page 20 GAO/GGD-97-147R GSA’s Draft Strategic Plan
B-277377 

Major contributors to this letter are listed in the enclosure. Please contact

me at (202) 512-4232 if you or your staffs have any questions concerning

this letter.

Bernard L. Ungar

Director, Government Business

 Operations Issues

Enclosure

Page 21 GAO/GGD-97-147R GSA’s Draft Strategic Plan
Enclosure 

Major Contributors to This Report

General Government

Division, Washington,

D.C.

Gerald Stankosky, Assistant Director, Government Business Operations

Issues

John F. Mortin, Senior Evaluator

David E. Sausville, Senior Evaluator

William J. Dowdal, Senior Evaluator

Accounting and

Information

Management Division

Washington, D.C.

Linda D. Koontz, Associate Director

Joan B. Hawkins, Assistant Director

Office of the General

Counsel, Washington,

D.C.

Alan L. Belkin, Acting Associate General Counsel

Susan Michal-Smith, Senior Attorney

Page 22 GAO/GGD-97-147R GSA’s Draft Strategic Plan
Page 23 GAO/GGD-97-147R GSA’s Draft Strategic Plan
Page 24 GAO/GGD-97-147R GSA’s Draft Strategic Plan
Page 25 GAO/GGD-97-147R GSA’s Draft Strategic Plan
Related GAO Products

Courthouse Construction: Better Courtroom Use Data Could Enhance

Facility Planning and Decisionmaking (GAO/GGD-97-39, May 19, 1997).

Courthouse Construction: Improved 5-Year Plan Could Promote More

Informed Decisionmaking (GAO/GGD-97-27, Dec. 31, 1996).

Federal Courthouse Construction: More Disciplined Approach Would

Reduce Costs and Provide For Better Decisionmaking (GAO/T-GGD-96-19,

Nov. 8, 1995).

General Services Administration: Opportunities For Cost Savings in the

Public Buildings Area (GAO/T-GGD-95-149, July 13, 1995).

General Services Administration: Opportunities For Cost Savings and

Service Improvements (GAO/T-GGD-95-96, March 29, 1995).

Public Buildings: GSA’s Reinvention Initiatives (GAO/T-GGD-95-100, March 2,

1995).

Federal Office Space: More Businesslike Leasing Approach Could Reduce

Costs and Improve Performance (GAO/GGD-95-48, Feb. 27, 1995).

Management Reform: Implementation of the National Performance

Review’s Recommendations (GAO/OCG-95-1, Dec. 5, 1994).

Real Property Management: Reforms in Four Countries Promote

Competition (GAO/GGD-94-166, Sept. 30, 1994).

Budget Issues: Budget Scorekeeping for Acquisition of Federal Buildings

(GAO/T-AIMD-94-189, Sept. 20, 1994).

General Services Administration: Better Data and Oversight Needed to

Improve Construction Management (GAO/GGD-94-145, June 27, 1994).

Supply Contract Terminations: GSA Is Missing Opportunities to Recover

Costs From Vendor Default (GAO/GGD-94-137, June 15, 1994).

Public-Private Mix: Extent of Contracting Out for Real Property

Management Services in GSA (GAO/GGD-94-126BR, May 16, 1994).

Management Reforms: Examples of Public and Private Innovations to

Improve Service Delivery (GAO/AIMD/GGD-94-90BR, Feb. 11, 1994).

Page 26 GAO/GGD-97-147R GSA’s Draft Strategic Plan
Related GAO Products

Management Reform: GAO’s Comments on the National Performance

Review’s Recommendations (GAO/OCG-94-1, Dec. 3, 1993).

Public Buildings: Budget Scorekeeping Prompts Difficult Decisions

(GAO/T-GGD/AIMD-94-43, Oct. 28, 1993).

Federal Judiciary Space: Long-Range Planning Process Needs Revision

(GAO/T-GGD-94-18, Oct. 7, 1993 and GAO/GGD-93-132, Sept. 28, 1993).

Federal Real Property: National Performance Review Recommendations

(GAO/T-GGD-93-47, Sept. 21, 1993).

Multiple Award Schedule Contracting: Changes Needed in Negotiation

Objectives and Data Requirements (GAO/GGD-93-123, Aug, 25, 1993).

Federal Real Property: Key Acquisition and Management Obstacles

(GAO/T-GGD-93-42, July 27, 1993).

Federal Buildings Fund Limitations (GAO/GGD-93-34R, Apr. 5, 1993).

General Services Administration: Actions Needed to Stop Buying Supplies

From Poor-Performing Vendors (GAO/GGD-93-34, Jan. 11, 1993).

General Services Issues (GAO/OCG-93-28TR, Dec. 1992).

General Services Administration: Increased Direct Delivery of Supplies

Could Save Millions (GAO/GGD-93-32, Dec. 28, 1992).

General Services Administration: Actions Needed to Improve Protection

Against Fraud, Waste, and Mismanagement (GAO/GGD-92-98, Sept. 30, 1992).

General Services Administration: Distribution Center Modernization Was

Mismanaged (GAO/GGD-92-71, May 20, 1992).

Federal Office Space: Obstacles to Purchasing Commercial Properties

From RTC, FDIC, and Others (GAO/GGD-92-60, Mar. 31, 1992).

Real Property Management Issues Facing GSA and Congress (GAO/T-GGD-92-4,

Oct. 30, 1991).

GSA: A Central Management Agency Needing Comprehensive

Congressional Oversight (GAO/T-GGD-92-3, Oct. 29, 1991).

Page 27 GAO/GGD-97-147R GSA’s Draft Strategic Plan
Related GAO Products

Long-term Neglect of Federal Building Needs (GAO/T-GGD-91-64, Aug. 1, 1991).

Federal Buildings: Actions Needed to Prevent Further Deterioration and

Obsolescence (GAO/GGD-91-57, May 13, 1991).

General Services Administration: Status of Management Improvement

Efforts (GAO/GGD-91-59, Apr. 3, 1991).

Facilities Location Policy: GSA Should Propose a More Consistent and

Businesslike Approach (GAO/GGD-90-109, Sept. 28, 1990).

General Services Administration: Delegated Buildings Adequately

Operated But Better GSA Oversight Needed (GAO/GGD-90-76, May 15, 1990).

The Disinvestment in Federal Office Space (GAO/T-90-24, Mar. 20, 1990).

Federal Office Space: Increased Ownership Would Result in Significant

Savings (GAO/GGD-90-11, Dec. 22, 1989).

General Services Administration: Sustained Attention Required to Improve

Performance (GAO/GGD-90-14, Nov. 6, 1989).

Building Purchases: GSA’s Program Is Successful But Better Policies and

Procedures Are Needed (GAO/GGD-90-5, Oct. 31, 1989).

Public Buildings: Own or Lease? (GAO/T-GGD-89-42, Sept. 26, 1989).

(240256) Page 28 GAO/GGD-97-147R GSA’s Draft Strategic Plan
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