U.S. General Services Administration

C REATING A S UCCESSFUL F UTURE AT GSA

Annual Performance and Accountability Report 2005
This Performance and Accountability Report for fiscal year (FY) 2005 provides

the General Services Administration’s (GSA) financial and performance

information, enabling the President, Congress, and the American people to

assess the Agency’s performance as provided by the requirements of the:

Reports Consolidation Act of 2000 and other laws

Government Management Reform Act of 1994

Government Performance and Results Act (GPRA) of 1993

Chief Financial Officers Act of 1990

Federal Managers’ Financial Integrity Act (FMFIA) of 1982

Office of Management and Budget (OMB) Circular A-136.

The assessment of GSA’s performance contained in this report compares performance results to the Agency’s strategic goals

and performance goals. GSA’s Strategic Plan, Performance Plan, and annual Performance and Accountability Reports are

available on GSA’s Web site at www.gsa.gov/annualreport. GSA welcomes feedback on the form and content of this report.

If you wish to provide feedback please choose a contact from the annual report Web page.

This report is organized into the following major components:

Letter from the Administrator of GSA

The Administrator’s letter includes an assessment on the reliability and completeness of the financial and performance

information presented in the report and a statement of assurance on the Agency’s management controls as required by the

FMFIA. 

Management’s Discussion and Analysis (MD&A)

This section provides an overview of the financial and performance information contained in the Performance Section,

Financial Section and Appendices. The MD&A includes an overview of the GSA organization, highlights of the Agency’s most

important performance goals and results, current status of systems and internal control weaknesses and other pertinent

information such as the progress being made by GSA in implementing the President’s Management Agenda (PMA). 

Performance Section

This section provides the annual performance information as required by OMB Circular A-11 and the GPRA. Included in this

section is a detailed discussion and analysis on the Agency’s performance in FY 2005. Information on key performance

measures with past results can be found in the Performance Section. 

Financial Section

This section contains the details on GSA’s finances in FY 2005. An introduction letter from GSA's Chief Financial Officer,

followed by the Independent Auditor's Report, the Agency's audited financial statements and other supplemental financial

information containing the Inspector General's Updated Assessment of GSA’s Management Challenges, and information on

the Agency's Debt Management, Payments Management, Erroneous Payments, and intra-government balances.

Appendices

A discussion of the data sources used in this report, summary chart of performance information, and a glossary of acronyms. 

5

4

3

2

1

How to use this report
FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT

Mission Statement

GSA helps federal agencies better serve the public by offering, at best value, superior

workplaces, expert solutions, acquisition services, and management policies.

Strategic Goals

Provide best value for customer agencies and taxpayers

Achieve responsible asset management

Operate efficiently and effectively

Ensure financial accountability

Maintain a world-class workforce and a world-class workplace

Carry out social, environmental, and other responsibilities as a federal agency
Table of Contents

T ABLE OF C ONTENTS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 2

Letter from the Administrator 5

How GSA Benefits the Public 7

MANAGEMENT’S DISCUSSION AND ANALYSIS

Mission, Values, and Goals 11

Organization 12

Performance Summary and Highlights 16

FY 2005 Key Performance Measures within Strategic Goals 17

Performance Measurement Data Validation and Verification 19

The President’s Management Agenda 20

Management Assurances 27

Federal Managers’ Financial Integrity Act, Section 2 27 

Federal Managers’ Financial Integrity Act, Section 4 29 

Federal Financial Management Improvement Act 31

Financial Management Systems Framework 32

Anti-Deficiency Act 33

Improper Payments Information Act 33

Financial Summary 35

PERFORMANCE SECTION

Introduction to Performance 43

Performance by Service/Staff Office 45

Public Buildings Service 46 

Federal Supply Service 55

Federal Technology Service 63

Office of Citizen Services and Communications 69

Office of the Chief People Officer 71

Office of the Chief Financial Officer 75

WWW.GSA.GOV/ANNUALREPORT
T ABLE OF C ONTENTS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 3

FINANCIAL SECTION

Letter from the Chief Financial Officer 81

Office of the Chief Financial Officer Achievements at a Glance 82

Independent Auditor’s Report 85

Letter of Transmittal from the Inspector General 85

Report of Independent Auditors 87

Inspector General’s Report on Internal Controls Over Performance Measures 108

Financial Statements

Principal Financial Statements 110

Notes to the Financial Statements 120

Required Supplementary Information 140

Supplemental Information and Other Reporting Requirements 142

Inspector General’s Updated Assessment of GSA’s Major Management Challenges 142

Debt Management 156

Cash and Payments Management 157

APPENDICES

I Data Sources 161

II Summary Chart of Goals and Measures 165

III Performance Goals and Measures No Longer Reported 173

IV Improper Payment Information Act Reporting Detail 174

V Acronyms and Abbreviations 175

FY 2005 Performance and

Accountability Report

The U.S. General Services Administration’s (GSA) core mission is to help

other Federal government agencies

acquire, at best value, superior workplaces with

the equipment, products and services they

need to operate successfully. The GSA mission

also includes the important role of enhancing

public access to information about government programs and

activities. I'm very proud to report that during fiscal year 

(FY) 2005, GSA associates continued to achieve high

performance in meeting these requirements of our Federal

government agency customers and the American people.

Following this letter is a summary of GSA’s FY 2005

accomplishments and highlights. 

These accomplishments would not have been possible without

the steadfast and innovative leadership of former

Administrator Stephen A. Perry, whose resignation became

effective October 31, 2005. Under Administrator Perry, GSA:

Implemented a rigorous performance management

process that was key to achieving results aligned with

President Bush’s Management Agenda;

Helped GSA establish clear, customer-focused,

measurable goals and detailed action plans for all areas;

Initiated “One GSA” to foster greater collaboration and

consistency among GSA divisions; 

Launched the “Get it Right” plan to achieve excellence in

Federal acquisition;

Initiated a major organizational design change in PBS;

Helped maintain GSA’s status as one of the best places to

work in the Federal government;

And created the new Federal Acquisition Service.

The past several years have been a time of

enormous change and challenge at GSA. 

All GSA associates are strongly aligned and

focused more than ever on achieving our

Agency’s mission, values and goals. As a result,

GSA’s customer satisfaction scores and our

associate engagement scores are high and

increasing. We are not resting on past

achievements; rather we are aggressively

carrying out President Bush’s Management

Agenda and making positive changes to achieve

high performance and continuous improvements. 

To ensure we have a strong foundation for the performance

accountability process, GSA managers have reviewed their

internal controls and the Management Control Oversight

Council has reviewed internal control data for the year. With

the exception of the qualifications of one material weakness

and one system nonconformance in controls over monitoring,

accounting and reporting of budgetary transactions, (discussed

at length in the Management Assurances section of the

Management Discussion and Analysis, the Chief Financial

Officer’s letter, and the Independent Auditor's report), I can

provide reasonable assurance that the objectives of Section 2

(Internal Controls) and Section 4 (Financial Systems) of the

Federal Managers’ Financial Integrity Act (FMFIA) and

Federal Financial Management Improvement Act (FFMIA)

have been achieved. 

GSA intends to build on the solid foundation built by

Administrator Perry, making GSA more efficient, economical,

and customer-centric as we continue helping our fellow

Federal agencies better serve the public.

David L. Bibb

Acting Administrator

November 15, 2005

David L. Bibb

Letter from the Administrator

L ETTER FROM THE A DMINISTRATOR

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 5
L ETTER FROM THE A DMINISTRATOR

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 6

How GSA Benefits the Public

GSA’s mission statement establishes how it

supports government agencies with superior

workplaces, equipment, and products and

services they need to operate successfully. The benefit of

these vital services is sometimes unclear to the American

public. The following gives some examples of how GSA

directly benefits the public.

Public Safety in Federal Buildings

GSA’s Public Buildings Service (PBS) is the largest public

real estate organization in the nation and provides services

to over 100 Federal departments and agencies. PBS

manages a diverse portfolio of real estate for the Federal

government–over 340 million square feet of space–in office

buildings, courthouses, border stations, warehouses, etc.,

used by 1.1 million Federal workers every day. In addition,

PBS facilities balance the security needs of today’s environment with the public access requirements required of public

buildings. 

Community Development

When carrying out its Federal real estate activities to meet

Federal agencies’ needs PBS supports community development and redevelopment efforts. PBS locates efficient and eye

catching facilities in central business areas, historic districts,

and in local redevelopment areas. These efforts foster community involvement and development opportunities. 

For example, GSA is beginning a significant redesign of the

border station at San Ysidro, CA, the world's busiest point

of entry. The GSA project manager, site acquisition

specialist, and National Environmental Policy Act (NEPA)

expert are working with local stakeholders to meet

Department of Homeland Security (DHS) needs for a

secure, efficient, and effective facility while also supporting

community goals as much as possible. The border station is

positioned between the old and new sections of the San

Ysidro community. GSA is currently working with community stakeholders to look at how the border station can

unify the older community with the newer and revitalized

downtown urban core. 

Art in Architecture

One of the lasting legacies of any government is its buildings. The PBS Design Excellence Program allows GSA to

attain top-quality design talent to design new Federal buildings and U.S. courthouses that will eventually become an

integral part of a community for decades or even centuries.

The Design Excellence Program includes a streamlined twostep architect/engineer selection process and the use of

private-sector peers to provide feedback to the

architect/engineer of record. This program defines project

requirements in order to attract highly qualified and

talented lead designer and design firm submissions that

include emerging talent, women-owned, small, and smalldisadvantaged businesses, in addition to well established

firms. 

An example of the design excellence program is the

Wheeling, WV U.S. Courthouse Annex, dedicated in 2005.

Today a 90,000 square foot annex joins the Federal building

and U.S. Courthouse reinvigorating the city with a striking

new civic landmark while preserving the city’s historic art

and architecture.
L ETTER FROM THE A DMINISTRATOR

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 7

Competitive Purchasing for Federal Agencies

The Federal Supply Service (FSS) provides Federal agencies

with supplies and procurements support, fleet, travel and

transportation services, and disposal of excess personal

property. Leveraging the government’s buying power and

its professional expertise, FSS assures substantial savings for

its customers, who choose to purchase goods and services

through its competitive non-mandatory programs.

Donations of Usable Surplus

FSS manages and operates the Utilization and Donation

Program which serves the public by providing a channel for

Federal agencies to donate usable surplus property to state

or local governments or selected nonprofit organization.

Once a Federal agency determines it has unneeded

property, that property is declared excess property. It is

available for transfer to any other Federal agency. If no

agency wants the excess property, it is declared surplus to

Federal needs. It may then be donated or may be sold

through public auctions.

In an effort to make modern computer technology an

integral part in classrooms across the nation, the Computers

for Learning (CFL) Program within FSS provides schools and

educational nonprofit organizations a place to request

excess computer equipment. It also provides a quick and

easy way for government agencies and the private sector to

donate equipment to schools and educational nonprofits.

This results in (1) a benefit to schools who receive much

needed computers, (2) organizations which no longer

wastes space storing surplus computers, and (3) a public

that is better served through deployment of surplus

computers as a valuable learning tool.

Public Access to Federal Information

The Federal Technology Service (FTS) provides telecommunications, information technology (IT) products and

services to Federal agencies in support of their mission to

the public. In a nationwide effort to increase the public’s

access to telephone directory information regarding government service, the Blue Pages Program gathers, validates,

and formats key Federal government information. This

program establishes a standard, easy to read format for

every citizen in the nation to access government services

through a comprehensive set of listings in their local telephone directories that are accurate, service oriented, and

very informative. 

Citizens responded enthusiastically to Federal information

promoted by the Office of Citizen Services and

Communications, requesting more than 8.2 million publications from the well-known Pueblo, CO distribution

center–the highest number since FY 1997. Citizen awareness of FirstGov.gov more than doubled in FY 2005, due in

large part to "Always There," a nationwide public service

advertising campaign that is expected to generate more

than $8 million in donated television airtime.

E-Authentication Program

FTS manages the E-Authentication Program which

addresses the special requirements relating to the secure

delivery and integrity of online government information

being exchanged in Internet-based business transactions.

This program aims to enable quicker, more cost effective

interaction between citizens, commercial businesses, and

the Federal government.
FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 8

Creation of Jobs and Economic Growth

GSA has procured more than $10 billion in goods and

services from the private sector for Federal agencies

through the third quarter of FY 2005. Of that amount, 36.07

percent–$3.6 billion–went to small businesses, with $739

million going to firms classified as “small, disadvantaged

businesses;” in addition, $358 million in contracting went to

small, women-owned businesses. GSA is also strengthening

its programs to provide contracting opportunities to veteran

owned businesses, service-disabled veteran owned businesses, and Native American owned businesses. 

Support the Department of Defense (DoD) in the

Global War on Terrorism:

GSA, through the FAS Office of Global Supply, directly

supported U.S. military troops in Iraq with products valued

at approximately $133 million. Some 70-80 percent of

Global Supply’s annual sales of slightly over $1 billion are

shipped to DoD customers worldwide. Products include

tools, industrial supplies, office and administrative supplies,

bulk paper consumables, hospitality supplies, and Ford

pickups and sport utility vehicles modified to run in the

sand and weather conditions of Iraq.
Management’s Discussion 

and Analysis

M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 11

The Agency’s mission is strongly rooted in GSA’soriginal authorizing legislation, the Property and

Administrative Services Act of 1949. By consolidating the

Federal government’s real estate, supply, and other

management support functions, agencies run more

efficiently, thereby providing savings and other benefits to

the taxpayers. GSA also works with all the Federal

departments and agencies to establish management policies

that will lead to greater success in the future. Today for the

great majority of functions, agencies are able to determine

for themselves whether GSA’s centralized services are their

best value as these have become “non-mandatory.” 

The mission of GSA comes to life as its associates are

guided by GSA’s values.

In order to better serve GSA’s customers, the Federal

Acquisition Service (FAS) has officially been established,

effective September 9, 2005, through the Administrator's

signing of the GSA Order - ADM 5440. This new service

will be headed by a Commissioner reporting directly to the

Administrator. The Commissioner has full responsibility,

authority, and accountability for all programs currently in

the Federal Technology Service (FTS) and the Federal

Supply Service (FSS), and all programs developed to

provide Federal customers with the acquisition services they

need. This includes acquisition of products, services, and

programs in the areas of information technology (IT),

telecommunications, professional services, supplies, motor

vehicles, travel and transportation, charge cards, and

personal property utilization and disposal. Additionally, the

Commissioner will be responsible for completing the organizational design of the new FAS and implementing the

reorganization.

As reorganization plans are finalized, appropriate functions,

positions, equipment, and other resources of FSS and FTS

will transfer into the new FAS. The existing organizational

structure of FSS and FTS will remain in place until 

such time that organization changes can be effectively

implemented, as determined by the Administrator and the

FAS Commissioner.

GSA MISSION STATEMENT

GSA VALUES

Ethics and integrity in everything we do

Respect for fellow associates

Results orientation

Teamwork

Professionalism

GSA helps federal agencies better serve the public by offering, at best value, superior

workplaces, expert solutions, acquisition services, and management policies.

GSA has been carrying out its mission to acquire and provide goods, services, and facilities in support

of the needs of Federal agencies for 55 years.

Mission, Values, and Goals
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 12

Organization

The basic foundation of any business or agency is itsorganizational structure. GSA provides goods and

services and develops policy through a network of 11

regional offices and a central office in Washington, D.C. The

Central Office consists of three services responsible for

coordinating nationwide programs and an office that

supports Federal agencies, as well as a citizen-oriented

organization and 12 staff offices that support the GSA

organization. 

PUBLIC BUILDINGS SERVICE (PBS): PBS’s mission is to

provide a superior workplace for the Federal worker and

superior value for the U.S. taxpayer. The challenge of

managing the dynamic tension between these two objectives is at the heart of GSA’s business processes. PBS is the

largest public real estate organization in the nation and a

provider of workspace and workplace solutions to more

than 100 Federal agencies.

PBS conducts two fundamental activities. The first is space

acquisition, either by lease or construction. It translates

needs into discrete requirements, marshals the necessary

resources, and sees that the space is delivered. The second

fundamental activity is life-cycle management of space. This

involves making decisions on maintenance, servicing

tenants, and ultimately, deciding when and how to dispose

of a property at the end of its useful life.

GSA’s path to a successful future is outlined by the six GSAwide strategic goals. These goals were established to

provide a broad framework from which to build a foundation for specific performance goals and provide a context

for the long-term outcomes to which GSA is striving. In the

Performance Section, GSA will report how well it is doing

against each of these goals. 

The strategic goals also provide a bridge from GSA’s

internal management to the President’s Management

Agenda (PMA) (page 20). For example, under the E-Gov

initiative GSA is harnessing the power of the Internet to

provide information to citizens and its customers and to

process transactions. GSA manages FirstGov.gov, the

award-winning official Web portal of the government. 

It pulls together more than 180 million Federal and state

government pages. Here, the public can get easy-to-understand information and services from the government 

24 hours a day, seven days a week.

STRATEGIC GOALS

Provide best value for customer agencies

and taxpayers

Achieve responsible asset management

Operate efficiently and effectively

Ensure financial accountability

Maintain a world-class workforce and a

world-class workplace

Carry out social, environmental, and

other responsibilities as a federal agency

The public can also use FirstGov.gov’s Citizen Gateway to

transact business with the government and to access information on topics such as Social Security, taxes, surplus

government property, and more. Citizens can send e-mail

via “Contact Us” by clicking on Uncle Sam on the

FirstGov.gov home page. GSA works closely with other

Federal agencies and state governments to ensure information can be easily navigated by the public. This means additional traffic for Agency Web sites. The journey continues

toward global solutions.
CHIEF OF STAFF DEPUTY

ADMINISTRATOR

 ADMINISTRATOR

FEDERAL SUPPLY SERVICE

FEDERAL TECHNOLOGY

SERVICE

PUBLIC

BUILDINGS

SERVICE

OFFICE OF

GOVERNMENTWIDE

POLICY

NEW ENGLAND

REGION

BOSTON, MA

NORTHEAST AND

CARIBBEAN REGION

NEW YORK, NY

MID-ATLANTIC

REGION

PHILADELPHIA, PA

SOUTHEAST

SUNBELT REGION

ATLANTA, GA

ROCKY MOUNTAIN

REGION

DENVER, CO

GREATER

SOUTHWEST

REGION

FT. WORTH, TX

THE HEARTLAND

REGION

KANSAS CITY, MO

GREAT LAKES

REGION

CHICAGO, IL

GSA BOARD

OF CONTRACT

APPEALS

OFFICE OF

CIVIL RIGHTS

 OFFICE OF

INSPECTOR

GENERAL

PACIFIC RIM

REGION

SAN FRANCISCO, CA

NORTHWEST/

ARCTIC REGION

AUBURN, WA

NATIONAL

CAPITAL REGION

WASHINGTON, DC

OFFICE OF THE

CHIEF FINANCIAL

 OFFICER

OFFICE OF THE

CHIEF PEOPLE

OFFICER

OFFICE OF

CONGRESSIONAL &

INTERGOV AFFAIRS

OFFICE OF CITIZEN

SERVICES AND

COMMUNICATIONS

OFFICE OF

GENERAL

COUNSEL

OFFICE OF

PERFORMANCE

IMPROVEMENT

OFFICE OF

SMALL BUSINESS

UTILIZATION

OFFICE OF THE

CHIEF INFORMATION

OFFICER

OFFICE OF

EMERGENCY

MANAGEMENT

OFFICE OF THE

CHIEF ACQUISITION

OFFICER

equipment no longer needed by the government. Global

Supply maintains an inventory of more than 7,000 items that

can be shipped in large quantities at short notice.

FEDERAL TECHNOLOGY SERVICE (FTS): The mission of FTS

is to deliver the best value and innovative solutions in IT,

network services, and professional services to support

government agency missions worldwide. FTS works with

agency customers to understand their missions and requirements, and to help them choose, acquire, implement, and

manage the funding for the best solutions to meet those

needs. FTS-assisted services save taxpayer dollars, make it

M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 13

FEDERAL SUPPLY SERVICE (FSS): FSS manages a large,

diverse marketplace in which hundreds of thousands of

Federal customers are brought together with more than

9,000 contractors. FSS has five business lines. Commercial

Acquisition provides Federal customers access to more than

four million services and products. Travel and

Transportation provides a broad range of services from

discount airfares to express delivery of packages to freight.

Vehicle Acquisition and Leasing Services buys more than

58,000 vehicles annually and manages a worldwide fleet of

more than 185,000 vehicles. Personal Property Management

reassigns or sells items such as furniture, computers, and
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 14

possible for customer agencies to avoid doing costly, timeconsuming technology acquisitions, and enable them to

devote more of their own staffs directly to their agency

missions and programs. FTS works closely with every

major civilian and Federal government agency offering

assisted acquisition services on a fee-for-service basis.

OFFICE OF GOVERNMENTWIDE POLICY (OGP): OGP consolidates all of GSA's government-wide policy-making activities

within one central office. These include the Federal

government's strategies to acquire $200 billion a year in

goods and services, the $8 billion a year spent on government travel, and the tens of billions of dollars spent each

year on internal administrative management systems. OGP

is working to re-engineer the traditional policy development model to emphasize collaborative development. 

OFFICE OF CITIZEN SERVICES AND COMMUNICATIONS (OCSC):

OCSC is aimed at creating a more citizen-centric, resultsoriented Federal government. OCSC has opened the way

for citizens to interact with government by creating a single

electronic front door to the services and information they

require in the medium they prefer: the Web, e-mail, telephone, fax, or print. OCSC is aligned with the other GSA

Staff Offices because of the in-house communication

support it provides.

The OFFICE OF THE CHIEF PEOPLE OFFICER (OCPO) develops

and delivers human capital programs, policies, and

services that promote GSA’s strategic management of

human capital. OCPO activities enhance GSA’s capability to achieve its mission, strategic goals, and

performance outcomes.

The OFFICE OF THE CHIEF INFORMATION OFFICER (OCIO)

provides high quality, enterprise IT services, and solutions at best value by leveraging IT resources to support

GSA business needs. Additionally, the OCIO is GSA’s

lead for the five E-Gov projects (eAuthentication,

eTravel, Integrated Acquisition, Federal Asset Sales, and

USA Services).

The OFFICE OF THE CHIEF ACQUISITION OFFICER (OCAO) is

responsible for managing a broad range of acquisition

activities, including ensuring compliance with applicable laws, regulations, and policies; fostering full and

GSA associates' time, efforts, and dedication are

reflected in GSA’s success.

open competition for contract awards; developing the

acquisition workforce; and ensuring accountability for

acquisition decision-making.

The OFFICE OF THE GENERAL COUNSEL (OGC) provides

sound and timely legal advice and representation to

GSA clients to enhance their ability to help Federal

agencies. The OGC carries out all legal activities of

GSA; ensures full and proper implementation of GSA’s

statutory responsibilities; and provides legal counsel to

the Administrator, Deputy Administrator, and other officials of GSA (with the exception of certain legal activities of the Office of Inspector General (OIG) and the

Board of Contract Appeals (BOCA)).

The OFFICE OF PERFORMANCE IMPROVEMENT (OPI) provides

advice to the Administrator and Deputy Administrator

on major policies and procedures related to GSA

performance. OPI is responsible for overseeing the

development and execution of performance measurement programs and GSA’s competitive sourcing.

The OFFICE OF EMERGENCY MANAGEMENT (OEM) coordinates emergency management services throughout GSA.

Emergency management includes all aspects of disaster

and emergency program policy development and implementation, response operations, training, drills, exercises, continuity of operations, business continuity,

recovery and resumption, and readiness assurance. 
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 15

The OFFICE OF SMALL BUSINESS UTILIZATION (OSBU) is

GSA’s advocate for small, minority, veteran, HUBZone,

and women business owners. OSBU promotes the

increased access to GSA’s nationwide procurement

opportunities by nurturing entrepreneurial opportunities, outreach, and training.

The OFFICE OF CONGRESSIONAL AND INTERGOVERNMENTAL

AFFAIRS (OCIA) serves as advisor to the Administrator

and supervises and maintains Agency liaison with all

members of Congress and congressional committees.

OCIA prepares and coordinates GSA’s annual legislative

program; communicates GSA’s legislative program to the

Office of Management and Budget (OMB), Congress,

and other interested parties; works closely with OMB in

the coordination and clearance of all proposed legislation impacting GSA and its programs; and initiates, coordinates, and presents briefings to Members of Congress

and their staffs on GSA program initiatives. 

The OFFICE OF THE CHIEF FINANCIAL OFFICER (OCFO)

conducts the performance process, including strategic

planning, budgeting, and the performance management

cycle within GSA; manages GSA’s core accounting

system; prepares financial statements and reports;

develops policies; and performs financial operations. 

The OFFICE OF CIVIL RIGHTS (OCR) is responsible for

implementing both the internal and external civil rights

programs at GSA. The internal civil rights program

ensures equal employment opportunity (EEO) for all

GSA associates and applicants for employment on the

basis of sex, race, color, national origin, religion,

disability, age (40 and over), and retaliation for

protected EEO activity. The external civil rights

program ensures nondiscrimination on the basis of race,

color, sex, age (40 and over), national origin, and

disability by recipients of GSA’s Federal Financial

Assistance and Federally conducted programs.

The BOARD OF CONTRACT APPEALS (BOCA) serves as an

independent and objective tribunal in hearing and

deciding contract disputes between government

contractors and GSA, and contractors and other

Executive agencies. The Board provides alternative

dispute resolution services to all Federal agencies and

contractors. The Board also hears and decides claims

involving transportation rate determinations, Federal

employee travel and relocation expense claims, and a

small number of other types of claims.

The OFFICE OF INSPECTOR GENERAL (OIG) promotes

economy, efficiency, and effectiveness within GSA, and

prevents and detects fraud in the Agency’s programs

and operations.

In FY 2005, GSA had 12,504 full-time equivalent employees

(FTE). Staffing levels have been consistent since 1998,

adjusting for the FY 2003 transfer of the Federal Protective

Service (FPS) and the Federal Computer Incident Response

Center to the Department of Homeland Security (DHS). 

FTE BREAKDOWN BY ORGANI ZATION

TOTAL 12,504

STAFF OFFICES

12%

1,447

PBS

47%

5,916

OIG

2%

279

OCSC

1%

122

OGP

2%

203 FTS

12%

1,545

FSS

24%

2,992
Performance Summary

and Highlights

During FY 2005, GSA performed its mission by pursuingits six Agency-wide strategic goals, listed on the title

page, which reflect the breadth of the Agency’s mission.

The GSA FY 2005 Performance Plan outlines the specific

performance goals undertaken to fulfill the strategic goals.

Specific performance measures are established within each

performance goal as a gauge for meeting these goals. 

The six strategic goals are inter-related and accordingly

many of the performance goals apply to more than one

strategic goal. 

This section highlights the most significant GSA-wide 

FY 2005 performance measures identified by GSA

management and related performance results. A chart of Key

Performance Measures follows the discussion and detailed

performance information is contained in the Performance

Section.

The chart below of Key Performance Measures and the

discussion that follows show that, in general, GSA met or

exceeded expectations for 62 percent of its FY 2005

performance measures. GSA is becoming more sophisticated

in its use of the Performance Measurement Tool (PMT)

system to closely track results. In FY 2005, GSA enhanced its

Performance Management Process (PMP) to integrate budget

and performance and focus on long-term outcomes. In 

FY 2005, GSA fully incorporated performance measures into

individual Associate Performance Planning and Appraisal

System (APPAS) documents for each associate.

Additionally, the President’s Management Agenda’s (PMA)

emphasis on results led to GSA’s commitment to the

Program Assessment Rating Tool (PART), which was used to

critically evaluate the performance of GSA programs. By the

end of FY 2005, 90 percent of GSA’s program dollars have

been rated. The PART process has helped GSA define longterm outcome goals that focus on how GSA meets customer

agency needs quickly and has reinforced its efforts to link

budget to performance, to set ambitious goals, and to

improve its efficiency measures. 

Additional information on all performance goals with past

results can be found in the Performance Section beginning

on page 41 and in Appendix II, the Summary Chart of Goals

and Measures beginning on page 157.

M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 16

FY 2005 GSA KEY PERFORMANCE MEASURES SUMMARY

NUMBER OF MEASURES

NUMBER OF PERFORMANCE MEASURES

MET NOT MET

PBS FSS

0

2

6

12

14

16

BUSINESS LINE

PBS

FSS

FTS

OCSC

STAFF

TOTAL

7

4

1

-

1

13

1

1

3

1

2

8

TOTAL

4

8

10

FTS OCSC STAFF

TOTAL

8

5

4

1

3

21
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 17

STRATEGIC GOAL/

SERVICE OR OFFICE

Public Buildings Service

Public Buildings Service

Public Buildings Service

Federal Supply Service

Federal Supply Service

Federal Technology Service

Office of Citizen Services

and Communications

Public Buildings Service

Public Buildings Service

Public Buildings Service

Federal Supply Service

Public Buildings Service

Federal Supply Service

Federal Supply Service

Federal Technology Service

Office of Chief Financial

Officer

Office of Chief Financial

Officer

MEASURES

Cost of leased space relative to the market

Customer satisfaction - tenants in leased space

Percentage of disposals completed within 320 days

Percentage discount to customers from invoice price

Percentage GSA Fleet leasing rates below commercial 

rates on the GSA Vehicle Leasing Schedule

Savings provided to customers

Total number of multi-channel contacts with the public 

(citizens, business, government) per year

Percent of Repairs and Alterations (R&A) Projects on schedule

Percent of vacant space in leased inventory

Construction projects on schedule

Supply mark-up for stocked items (percent)

Percent below private sector benchmarks for cleaning,

maintenance and utility costs in office and similarly 

serviced space

Cycle time to process offers (days)

Cycle time for disposal process (days)

Percent of negotiated award dates for service and commodities

that are met or bettered (IT Solutions)

Percent of vendor invoices received electronically by EDI

through the Internet

Percent of electronic invoices paid by electronic means 

such as EFT and purchase cards

FY 2005 

TARGET

<8.3%

70%

80%

≥27.5%

≥27%

780 mil

250.3 mil

86%

<1.5%

85%

43.5%

-12%

92

77

>94%

56%

95%

FY 2005

ACTUAL

-9.2%

78%

88%

40.6%

43.1%

633 mil

230.5 mil

95%

1.2%

100%

42.9%

-10.5%

98

56

85%

64%

94%

RESULTS

Met

Met

Met

Met

Met

Not Met

Not Met

Met

Met

Met

Met

Not Met

Not Met

Met

Not Met

Met

Not Met

FY 2005 Key Performance Measures

within Strategic Goal

ACHIEVE RESPONSIBLE ASSET MANAGEMENTT

OPERATE EFFICIENTLY AND EFFECTIVELY

ENSURE FINANCIAL ACCOUNTABILITY

PROVIDE BEST VALUE FOR CUSTOMER AGENCIES AND TAXPAYERS

Continued on following page
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 18

Through the Agency's internal PMP, GSA has made great strides in identifying long-term

outcome goals and efficiency measures for its programs.

STRATEGIC GOAL/

SERVICE OR OFFICE

Office of the Chief People

Officer

Public Buildings Service

Federal Technology Service

Federal Technology Service

MEASURES

Gallup Q12 Grand Mean Score

Percent reduction in energy consumption from FY 1985 baseline

Percentage of Government Wide Acquisition Contract (GWAC)

task and delivery orders subject to the fair opportunity process

Percentage of dollar value of eligible service orders awarded

with performance-based statements of work (SOW)

FY 2005 

TARGET

3.94

-30%

>95%

40%

FY 2005

ACTUAL

3.85

-35.3%

93%

72%

RESULTS

Not Met

Met

Not Met

Met

CARRY OUT SOCIAL, ENVIRONMENTAL AND OTHER RESPONSIBILITIES AS A FEDERAL AGENCY

MAINTAIN A WORLD-CLASS WORKFORCE AND WORLD-CLASS WORKPLACE
The Government Performance and Results Act of 1993

(GPRA) and the Reports Consolidation Act of 2000

require that each agency certify the completeness and

reliability of performance data and describe the means used

to verify and validate this data. Over the last several years,

to comply with these regulations and a finding of its OIG,

GSA implemented a verification and validation process to

ensure the validity of performance measurement data. 

After completing the first series of reviews for all

organization components last year, the Agency hired an

independent contractor to analyze the Agency’s verification

and validation process in FY 2005. Based on this assessment,

GSA is working to improve and institutionalize the process

used to verify and validate all performance measurement

data. A new verification and validation survey was

developed to assess the validity, completeness, consistency,

accountability, timeliness, and ease of use of performance

measurement data. In FY 2006, GSA will work to further

improve the verification and validation process by

augmenting the process to include a method to assess data

accuracy.

GSA uses a broad range of performance goals and measures.

The data and the means to verify and validate the measures

are also diverse. A general discussion of the verification and

validation of each of those sources follows. 

CONTROLS AND PROCEDURES

GSA’s performance measurement data can be divided into

five types. The controls and procedures used to validate and

verify each type are outlined below.

FINANCIAL DATA: During the FY 2005 financial statement

audit, various tests and reviews of the core accounting

system and internal controls were conducted as

required by the Chief Financial Officers Act.

1

Performance Measurement Data

Validation and Verification

M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 19

DATA FROM LARGE COMPUTER SYSTEMS: GSA has undertaken an extensive process of systems certification to

ensure that its computer systems operate as intended.

GSA increased the percent of IT systems certified and

accredited from 89 percent in FY 2004 to 100 percent

in FY 2005. Data quality is also maintained through

ongoing training.

DATA FROM MANUAL OR SMALL FEEDER COMPUTER

SYSTEMS: For these systems GSA stresses confirmation

that more than one person is responsible for data and

written policy and procedures.

BENCHMARK DATA FROM EXTERNAL SOURCES: Where

there is a close correspondence between a GSA

activity and a private sector counterpart, GSA utilizes

external data as a benchmark. GSA strives to find

highly reputable sources of data that are recognized as

industry standards, including the Gallup Organization,

Building Owners and Managers Association (BOMA),

Society of Industrial and Office Realtors (SIOR), and

the Logistics Management Institute.

DATA OBTAINED UNDER CONTRACT: GSA often contracts

with outside polling firms, such as the Gallup

Organization, to develop customer satisfaction or other

survey data. Use of an outside contractor can make

customers more willing to participate and add credibility to the results. In using such data, GSA always

deals with reputable firms that are leaders in the

industry. GSA’s contract provisions require that sound

business practices be followed and GSA follows up to

ensure confidence in the results. All of these firms have

their own validation and verification procedures.

Appendix I provides an in-depth report on GSA’s data

sources.

5

4

3

2
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 20

The President’s Management Agenda

GSA’S STATUS AND PROGRESS

Human Capital

Competitive Sourcing

Financial Performance

E-Government

Budget and Performance Integration

Real Property

INITIATIVE CURRENT STATUS PROGRESS

What Progress Indicates 

The Office of Management and Budget

(OMB) assesses agency "progress" on a

case-by-case basis against the deliverables and time lines established for the

five initiatives that are agreed upon with

each agency as follows:

GREEN

Implementation is proceeding according

to plans agreed upon with the agencies.

YELLOW

Some slippage or other issues requiring

adjustment by the agency in order to

achieve the initiative objectives on a

timely basis.

RED

Initiative in serious jeopardy. Unlikely

to realize objectives absent significant

management intervention.

The President’s Management Agenda (PMA) has helpedGSA focus on achieving results based upon clear goals

and challenging expectations. GSA is pleased with its

progress in each of the initiatives under the PMA. The

following pages provide a brief description of each

initiative, provide the current status of the management

program, and describe GSA’s progress to “get to green” as

GSA implements the PMA with the ultimate goal of

improving government performance and providing better

service to citizens. 
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 21

PMA

BACKGROUND: The Human Capital Initiative requires Federal

agencies to develop both a vision and a roadmap for strategically managing their workforces so they can better accomplish their missions on behalf of the American people.

Agencies are required to build, sustain, and effectively

deploy a skilled, knowledgeable, diverse workforce to meet

the current and emerging needs of the Federal government.

STATUS: GSA maintained its “yellow” status through FY

2005 completing all but one critical success factor to get to

“green.” The Agency implemented a new performance

management system for all non-Senior Executive Service

(SES) associates. The Agency also engaged in restructuring

activities in the Office of Governmentwide Policy (OGP)

and in establishing the Federal Acquisition Service (FAS).

GSA plans to submit documentation of mission critical

workforce skills gap closures in the first quarter FY 2006,

continue to implement the new FAS organization, and

comply with newly created critical success standards. 

PROGRESS: GSA continues to be “green” in progress for

Strategic Management of Human Capital. Among the many

accomplishments in FY 2005, GSA implemented a new fivetier performance management system for all non-SES associates replacing a prior pass-fail system. In rolling out this

Strategic Management of Human Capital Progress Status

new system, GSA invested significant resources in

training, guidance, and developing tools for managers

and associates. A new policy order was issued covering

performance recognition in light of the performance

management system changes. A full accountability

review of both the performance management and

performance recognition systems will be undertaken in

FY 2006. GSA established a new organization, FAS, and

will be implementing effective human capital strategies

to ensure organizational success and efficiency. GSA

updated its Strategic Human Capital Plan and Human

Resources Management and Accountability System to

account for organizational changes, new organizational

performance data, and to clarify human capital accountability roles and responsibilities. GSA established a plan

to reduce hiring timelines for SES positions and will test

hiring process improvements for non-SES positions. In

regard to the SES, GSA continues to distinguish between

levels of performance and maintaining certification. GSA

is developing talent management strategies for mission

critical workforces that include diversity recruitment

efforts, strategic recruitment and retention efforts, skills

assessment efforts, knowledge management, and

training and development efforts. GSA will update its

Executive Succession Plan. 
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 22

BACKGROUND: The goal of competitive sourcing, one of the

PMA initiatives, is to improve agency performance by using

the A-76 process to conduct public/private competitions of

an agency’s commercial activities or functions. GSA has

established an infrastructure to accomplish this goal and

continues to build on this infrastructure.

STATUS: Since the establishment of the competitive sourcing

goals by the President in FY 2001, GSA has moved from

“red” to “green” on the President’s quarterly Executive scorecard for “Current Status.” This score was achieved during the

fourth quarter of FY 2004. Additionally, GSA has completed

57 Streamlined Competitions and one Standard Competition

under the Revised Circular, and has completed one Standard

Competition under the old Circular. In October 2004, GSA

began to roll out an Agency-wide training program to

prepare the Agency for a number of competitions scheduled

for FY 2005. More than 200 GSA associates received this

training. In January 2005, GSA announced the planned

merger of the Federal Supply Service (FSS) and the Federal

Technology Service (FTS) into one Federal Acquisition

Services (FAS). Although the merger was going to be an

extensive project, GSA felt the Agency-wide marketing and

administrative support functions could be continued without

a significant impact from the merger. It was in March 2005

Competitive Sourcing Status Progress

that GSA realized the true impact of the merger and

cancelled both the marketing and administrative support

competitions. GSA is looking forward to rescheduling these

competitions in FY 2006 through FY 2008. The Public

Buildings Service (PBS) scheduled Streamlined

Competitions and completed 25 competitions involving 

125 full-time equivalent employees (FTE). The estimated

savings and cost avoidance of these competitions is 

$11.7 million over five years. On June 28, 2005 GSA

submitted its FY 2005 Federal Activities Inventory Reform

(FAIR) Act Inventory to OMB, with justifications. and the

Agency is also revising GSA's Competitive Sourcing Strategic

“Green” plan covering planned competitions through 

FY 2008 and the FY 2005 Report to Congress covering GSA

FY 2005 Competitive Sourcing accomplishments.

PROGRESS: GSA's PBS completed 25 Streamlined Competitions covering a total of 125 FTE throughout FY 2005. 

The Office of Performance Improvement (OPI) continues to

provide training on Competitive Sourcing to GSA associates

as needed. As a regular course of business, OPI maintains

a quarterly report on all of GSA’s Competitive Sourcing

Competitions with detailed information on costing data, key

milestone dates for study tracking, completion, and contact

information.

PMA
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 23

PMA

BACKGROUND: This initiative is intended to improve the

quality of the Federal government’s financial information so

agencies can improve the integrity and efficiency of their

operations. The goal is to improve financial performance by

ensuring that Federal financial systems produce accurate

and timely information. This data is critical to Federal

business line managers in their daily decision-making.

Short-term objectives of the initiative include reducing erroneous payments and sustaining successful financial audits.

STATUS: GSA improved its status rating to “green” as a

result of undertaking a revised plan which reflected financial data-driven business results. Previously, GSA had

successfully met the criteria for yellow status, which

included an unqualified audit opinion and meeting

reporting deadlines, without incurring any material noncompliance with laws or regulations. In addition, it has

improved financial performance and is proud of its accomplishments in the area of financial management. GSA has

properly demonstrated that program and financial data is

used on a daily basis to drive business results. The PMA

status is as of September 30, 2005. The auditors opinion 

is issued after September 30, 2005. However, Acting

Administrator Bibb states with qualified assurance that the

objectives of the Federal Managers’ Financial Integrity Act

(FMFIA) and the Federal Financial Management

Improvement Act (FFMIA) are being achieved in FY 2005.

Improved Financial Performance

Status Progress

PROGRESS: As of September 30, 2005, GSA continues to be

“green” in progress. GSA’s financial performance consistently produces a payment error rate well below government and industry standards, trained all managers on the

proper use of internal controls resulting in an aggressive

management control program in the Agency, and developed a corrective action plan to improve the reporting of

intergovernmental accounting transactions. GSA is using

integrated financial data to meet its challenges and future

initiatives are underway to improve operations. GSA’s

online financial system and querying capabilities allow

business line managers to view various levels of data at 

any point in time. There have been substantial gains 

in achieving progress toward goals and objectives, in 

particular in policy, financial analysis, financial systems lifecycle management, and management control process and

procedures. The desired goal is to provide timely financial

data so GSA can operate efficiently and effectively and

provide the best value to customer agencies and taxpayers.
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 24

BACKGROUND: This initiative supports specific goals to

reduce redundancy of IT investments, increase the effectiveness of outreach to citizens, and improve the efficiency

of IT investment management. This initiative provides

collaborative development of the expanded E-Government

areas of E-Gov implementation, IT Capital Planning,

Enterprise Architecture, Earned Value Management, and IT

Security.

The Presidential E-Gov initiatives are entering the adoption,

utilization, and institutionalization phase. One aspect of

this is that the E-Gov initiatives should be integrated in the

normal day-to-day operations of the Federal government,

including business, IT, and budgetary processes. As the EGov programs continue to identify IT opportunities for

collaboration and consolidation, increased agency adoption

and customer utilization will be the primary measures of

success.

GSA’s goals include helping the government become more

citizen-centric, assisting individuals and businesses to

complete government transactions online, and working

with other agencies on government-wide initiatives. GSA is

also focused on its internal IT management to ensure the

projects are well managed and that IT spending is not

duplicative of the 24 E-Gov initiatives. 

GSA’s IT team will continue to identify redundant IT

systems and determine when to retire them, and ensure

GSA associates have the technology needed to do their jobs

and that GSA systems are secure. 

STATUS: GSA’s status rating is “yellow.” This was due to:

GSA’s Enterprise Architecture receiving an OMB assessment

rating of “3”; having 28 acceptable major IT business cases

performing within 10 percent of cost, schedule, and performance; GSA certifying and accrediting 100 percent of its

systems; the Inspector General (IG) verifying the effectiveStatus

Expanded Electronic Government

Progress

PMA

ness of the Department-wide IT Security remediation process;

and having an OMB approved and accepted E-Gov

Implementation plan with a successful completion of all

GSA’s FY 2005 E-Gov milestones. 

GSA continues to make progress toward improving its status

rating to “green” by: (1) modifying its existing contracts to be

compliant with the Earned Value Management (EVM)

standard, and (2) demonstrating that all of its major IT

business cases meet the standard for acceptable business

cases based on the FY 2007 budget submissions 

PROGRESS: GSA progress rating remains “green.” GSA

continues to deliver on the PMA goals and quarterly E-Gov

planned actions. The progress rating is based on the

submission of several Agency program plans such as: a

GSA Preferred (GSAP) Action plan, a quarterly Federal

Information Security Management Act (FISMA) plan of

action and milestone report demonstrating GSA’s IT system

certification and accreditation percentage increased to

above 90 percent, and a quarterly EVM variance report.

The electronic “front door” for the Federal government.
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 25

Status Progress

BACKGROUND: This initiative is aimed at providing a greater

focus on performance. It is enhancing the quality of information on program results so that the government can

make better informed resource allocation decisions. The

outcome will be better control over resources and accountability for results by program managers.

STATUS: GSA’s status score is “yellow.” The earliest that

GSA can improve to “green” for status is the third quarter of

FY 2006. Attaining a “green” status requires GSA have less

than 10 percent of its Program Assessment Rating Tool

(PART) programs with “Results Not Demonstrated” for more

than two years in a row. This can be accomplished by

aggressively rescoring those programs that were originally

rated “Results Not Demonstrated.” GSA is working closely

with OMB to rescore those programs and achieve a status

of “green.” 

Budget and Performance Integration

PMA

PROGRESS: The Agency is “green” in progress. Through the

Agency’s internal Performance Management Process (PMP),

GSA has made great strides in identifying long-term

outcome goals and efficiency measures for its programs.

GSA continues to work with OMB on establishing goals and

measures for the remaining programs. GSA is also developing marginal cost analysis techniques and continuing to

implement Activity Based Management. Finally, the

Administrator continues to conduct quarterly reviews of

each organization’s financial and performance results. All

these initiatives and measurement tools are great strides in

integrating budget with performance.
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 26

Status Progress

BACKGROUND: On February 4, 2004, the President signed

Executive Order 13227 addressing Federal Real Property

Asset Management. Real Property was added to the PMA in

August 2004. The goal of the Executive Order and this

initiative is to promote the efficient and economical use of

U.S. real property assets and to assure management

accountability for implementing Federal real property

management reforms.

STATUS: GSA maintained “yellow” on the President’s quarterly Executive scorecard for “Current Status.” This score

was achieved at the end of the fourth quarter of FY 2004 by

completing an agency asset management plan, and by

demonstrating GSA has an accurate real property inventory

system and real property performance measures, both of

which are used in daily decision-making. GSA is working

closely with OMB to demonstrate results in implementing

its approved asset management plan, specifically, that GSA

is disposing of any surplus real property assets in its portfolio, reinvesting appropriately in core assets to improve

building condition, and ensuring operating costs are

competitive with market. Successful demonstration of

implementing its approved asset management plan and

using the performance measures established by the Federal

Real Property Council is expected to be achieved in FY

2006 moving the Agency to “green.”

Real Property

PROGRESS: GSA maintained “green” in progress for real

property. GSA reviewed and updated its asset level strategies for the government-owned inventory, developed a

methodology to analyze the leased portfolio to formulate

leasing strategies and to prioritize lease actions, and

completed an analysis and issued a State of the Portfolio

that reports GSA’s FY 2004 real property performance and

trend information. Finally, GSA worked to develop a

protocol to map its existing inventory to the Federal Real

Property Council’s new 23 mandatory data elements to

ensure full compliance with the council’s inventory and

performance measures requirements. 

GSA will continue to play a leadership role in advancing

real property asset management.

PMA
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 27

Management Assurances

FEDERAL MANAGERS’ FINANCIAL INTEGRITY

ACT (FMFIA) — SECTION 2 

GSA continued to develop new measures and techniques in order to meet accelerated reporting requirements

while accomplishing internal and external Agency requirements in the financial, acquisition, human capital, emergency services, and Federal buildings programs while

continually providing service to its customers and meeting

the needs of the American taxpayer. 

FY 2005 had distinct improvement and advancement for the

Agency’s internal control process. GSA managers addressed

the mission and goals of the Agency; provided accountability

for their operations; assessed and evaluated their internal

control structure to assure that it was well designed,

operated, and appropriately updated to meet changing

conditions; and to provide reasonable assurance that the

objectives of the Agency were being achieved. 

In keeping with the Office of Management and Budget’s

(OMB) A-123 internal control requirements and accelerated

reporting, GSA developed and launched the Agency’s first

Web-based Assurance Statement Questionnaire. Also, to

assist managers in evaluating their internal controls, a Webbased scorecard checklist was also designed. The new

electronic process enabled managers at all levels to compile

and forward their statements to their next-level manager for

review. Both the questionnaire and checklist proved to be

successful paperless tools which expedited the Assurance

Statement evaluation, review, and approval process for

managers at all levels. Given the success of this new

electronic process and the positive feedback from its

managers, GSA will continue to improve and build upon the

Web-based Assurance Statement Questionnaire process in the

coming years. To ensure the daily guidance and monitoring

of internal controls, the Internal Controls and Audit Followup

An eagle located over the central entrance, was carved

by Ernest S. Bairstow, a sculptor from Washington, DC,

who also carved the speeches into the walls of the

Lincoln Memorial. 

Division in the Office of the Chief Financial Officer (OCFO)

monitors and continually provides nationwide internal

controls training to managers at all levels across the Agency.

The Management Control Oversight Council (MCOC), chaired

by the Deputy Administrator, continued to provide senior

management leadership and oversight of GSA internal

controls. The MCOC convened quarterly and held special

sessions to review Agency management challenges and

address areas of concern from managers’ assurance

statements that included human capital, financial, acquisition,

and the Federal buildings programs. The Federal Technology

Service (FTS) brought to the attention of the MCOC a number

of critical positions that needed to be filled in the supervisory

contract specialist series and challenges that existed with

their acquisition processes, policies, and procedures. Many

of the issues identified have already been corrected in the

newly formed Federal Acquisition Service (FAS) and progress
continues in meeting the goal of acquisition excellence. New

practices and procedures to ensure compliance with Federal

Acquisition Regulations (FAR) have been adopted, and

experienced and highly skilled contracting officers have been

hired contributing to the continued improvement in

acquisition. 

The OCFO brought to the attention of the MCOC concerns

over open items from the Agency’s Services and Staff Offices.

There were obligations and accruals that appeared to be

invalid and should have been closed. Also, GSA’s budgetary

Standard General Ledger accounts needed improvement.

The OCFO embarked on an initiative to review various aging

reports and transmit them to key officials to obtain the proper

amount of attention to ensure accurate data in a system of

record with less lag time. The OCFO will aggressively

continue its efforts to clean up the budgetary accounts and

improve financial policy in the Agency. 

With the transfer in FY 2003 of the Federal Protective Service

(FPS) to the Department of Homeland Security (DHS), the

Public Buildings Service (PBS) reported to the MCOC that no

formal security oversight program exists in the Agency. In

March 2005, PBS created an interim task force to review how

M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 28

GSA addresses security issues. The work of the task force

enabled GSA to capture a variety of security issues

confronting the Agency and is addressing them in a soon to

be updated Memorandum of Agreement with DHS’s FPS. In

addition, and with the approval of the MCOC, PBS will

establish a Director of Building Security Policy position. The

Director of Building Security and Policy will serve as a liaison

with GSA leadership, the FPS and GSA’s tenant agencies, and

will enhance GSA’s ability to address security challenges in

both owned and leased properties. 

Material Weakness Identified 

The FY 2005 management assurance process and financial

statement audit identified issues related to budgetary controls

and reporting processes. This condition was determined to

be a Section 2 material weakness and a Section 4 system

nonconformance. More specifically the associates in FTS,

Federal Supply Service (FSS), and PBS did not properly

monitor, track, and close out completed projects with

residual balances or return unused budgetary authority. This

is further discussed in the CFO letter in the Financial Section

of this report and the audit report. A comprehensive action

plan is currently being developed to correct this issue. 

Statistical Summary of Performance 

Section 2, Internal Control Systems - Material Weaknesses

GSA reported no material weaknesses at the end of FY 2004 and one has been added during FY 2005.

NUMBER OF MATERIAL WEAKNESSES

NUMBER AT NUMBER

BEGINNING NUMBER NUMBER REMAINING END

OF YEAR CORRECTED ADDED OF FISCAL YEAR

Prior Years 49 47 0 2

1998 Report 201 3

1999 Report 300 3

2000 Report 300 3

2001 Report 300 3

2002 Report 300 3

2003 Report 320 01

2004 Report 000 0

2005 Report 001 1

1One Material Weakness was transferred to DHS and GSA no longer has reporting responsibility.
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 29

FEDERAL MANAGERS’ FINANCIAL INTEGRITY ACT (FMFIA) — SECTION 4 

As required by law, GSA evaluates its financialmanagement systems annually for compliance with

Federal financial management systems requirements,

applicable Federal accounting standards, and Standard

General Ledger recording and reporting requirements at the

transactional level. 

During FY 2005, a new process was developed and

implemented to more fully assess the adequacy of financial

management systems controls and compliance with Federal

Financial Management Improvement Act (FFMIA)

requirements. This process involved utilizing a consolidated

questionnaire to assess management controls, IT security

assurance controls, and FFMIA compliance. As in prior

years, additional compliance review steps included a review

of pertinent audit reports issued during FY 2005, a review of

the current status of prior year systems-related issues, and

discussions with senior managers and auditors regarding the

details of pertinent systems-related control issues. Taken as

a whole, GSA is confident that the various systems-related

review activities performed provide a sufficient basis for

assessing Agency compliance with Section 4, FMFIA and

FFMIA requirements for FY 2005. 

Based on all review work performed during FY 2005,

Agency management believes that except for certain internal

control and system weaknesses pertaining to budgetary

reporting, GSA is in substantial compliance with the

requirements referred to in Section 4 of FMFIA. This

conclusion is supported by actions completed during the

past year to assess and review GSA’s financial systems, and

resolve and remediate prior year’s audit findings relating to

financial system and monitoring controls. These conditions

related to network and application security controls, system

development, implementation and change controls, and

other financial systems’ general and applications-related

internal controls. 

STATUS OF SYSTEM NON-CONFORMANCES

NUMBER AT NUMBER

BEGINNING NUMBER NUMBER REMAINING END

OF YEAR CORRECTED ADDED OF FISCAL YEAR

Prior Years 990 0

1998 Report 022 0

1999 Report 002 2

2000 Report 200 2

2001 Report 200 2

2002 Report 200 2

2003 Report 201 3

2004 Report 330 0

2005 Report 001 1
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 30

System Non-Conformance Identified 

The FY 2005 management assurance process and financial

statement audit identified system-related issues regarding

budgetary controls and reporting processes reported in the

Statement of Budgetary Resources and Statement of

Financing. These issues involved an inability on the part

of FTS, FSS, and PBS financial systems to adequately record

and report detailed budgetary transactions throughout the

year in accordance with Federal accounting standards and

a continuing need to rely upon time-consuming manual

procedures to compensate for these financial system 

deficiencies. More details regarding this issue are discussed

in the CFO letter in the Financial Section of this report.

However, a number of actions will need to be carefully

planned, coordinated, and implemented to correct this

system non-conformance, including the need to improve

the recording of detailed budgetary transactions and

develop and implement more effective and timely budgetary account reconciliations between Service financial

systems and GSA's core accounting system. A comprehensive action plan is currently being developed to correct this

issue. 

Additional Improvements Planned for FY 2006

To ensure that GSA remains properly focused on being

proactive in improving the effectiveness of its financial

reporting and systems controls, several initiatives are

planned for FY 2006. Major initiatives will involve taking

various actions to improve budgetary reporting; systemsrelated policies, procedures, and system life-cycle management for certain program and financial systems; and FMFIA,

FFMIA, and Federal Information Security Management Act of

2002 (FISMA) compliance assessment and documentation

activities. 

During the past three years, several opportunities have

been identified to improve the quality of financial systems

reporting for certain budgetary accounts. Improvement

areas will focus on improving the classification and

reporting of certain budgetary transactions within GSA’s

core accounting system and devising a better means of

more effectively and efficiently reconciling systemsgenerated information to final budgetary reports. Planned

FY 2006 improvements should lead to significant process

improvements and more reliable, timely, and accurate

budgetary reporting for the future. 

Additional actions are planned to improve the quality and

documentation of systems-related policies, procedures, and

system life-cycle management so that best practices can be

more uniformly institutionalized and implemented within

GSA. Further improvements are planned to strengthen

existing management, operational, and technical systems

controls for several legacy program and financial applications. Areas of focus for these systems will include: access

controls, system change and configuration management

controls, separation of duties, and technical systems

controls.

Finally, action is planned during FY 2006 to more effectively

integrate and more efficiently streamline GSA review and

assessment activities pertaining to FMFIA, FFMIA, and

FISMA compliance. During FY 2005, significant progress

was achieved in integrating GSA’s internal processes for

assessing the sufficiency of management and systemsrelated internal controls via one survey instrument. This

accomplishment resulted in a more fully integrated and

streamlined internal controls assessment process for GSA.

During FY 2006, the challenge will be to devise and implement an improved and more fully-integrated process for

documenting self-assessment activities relating to internal

controls, consistent with the requirements of revised OMB

Circular No. A-123 and new National Institute of Standards

and Technology (NIST) requirements pertaining to systemsrelated internal controls. Currently, these activities require

considerable efforts on the part of several different groups

within GSA. By more effectively coordinating and consolidating these review activities for the future, more comprehensive and meaningful reviews and assessments will be

able to be completed in a more timely manner at less cost. 

All planned FY 2006 improvement actions should serve to

significantly improve systems-related controls and thereby

improve the extent of GSA’s overall compliance with pertinent laws and regulations. 
FINANCIAL MANAGEMENT SYSTEMS FRAMEWORK

M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 31

The FFMIA of 1996 requires Federal agencies to implement

and maintain financial management systems that comply

substantially with: (1) Federal financial management

systems requirements, (2) applicable Federal accounting

standards, and (3) the U.S. Standard General Ledger at the

transaction level. Under law, Agency heads are required to

assess and report on whether these systems comply with

FFMIA on an annual basis.

In assessing compliance with FFMIA, GSA adheres to the

revised FFMIA implementation guidance provided by OMB

and considers the results of the Office of Inspector General

(OIG) and the Government Accountability Office (GAO)

audit reports, annual financial statement audits, FISMArelated and other questionnaire results, FISMA compliance

reviews, and other systems-related activities.

Based on all information assessed except for issues noted

and discussed in the CFO’s letter and the compliance

section of the audit report, the GSA Administrator has determined that GSA’s financial management systems are in

substantial compliance with FFMIA for FY 2005. 

GSA’s current financial management systems framework

consists of a commercial-off-the-shelf (COTS), Joint

Financial Management Improvement Act (JFMIP)-compliant

and certified core financial system; Pegasys; and several

other important financial systems applications (payroll,

National Electronic Accounting and Reporting (NEAR), etc.)

that provide for financial transaction processing and financial analysis for its three main business lines (FSS, PBS, and

FTS) and General Management and Administration (GM&A)

offices. GSA utilizes a shared-service operation to crossservice multiple external client agencies. 

Plans to complete an integrated financial management

systems infrastructure are underway and are based upon

the "One GSA" enterprise architecture (EA). This "One

GSA” EA will provide the foundation for more effective and

efficient delivery of services by GSA in the future. The

target architecture will result in reduced complexity in the

systems environment and is intended to meet the following

objectives: 

FEDERAL FINANCIAL MANAGEMENT IMPROVEMENT ACT (FFMIA)

Reduce costs by eliminating duplicate systems

Reduce the costs of maintaining legacy systems

Ensure continual alignment of technology investments

to business processes

Improve GSA’s service performance levels

Promote the sharing of common services across the GSA

and 

Provide a commonly understood point of departure for

future strategic analyses. 

GSA has adopted a value-chain analysis project to identify

its "to-be" EA using a model-driven architecture approach

that marries business processes with every layer of an EA,

taking into account competitive alternatives in the market

place. The value-chain work done to date confirms that

GSA's financial management services are an integral, inseparable part of GSA's core mission of acquisition services. 

As such, plans to achieve GSA's targeted financial systems

infrastructure are being developed using integrated project

teams with cross-GSA representation. 
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 32

Pegasys

 Core Accounting Functions

NEAR

 Accounts Receivable/Billing

Future Accounts

Receivable/Billing

Solution

Future Financial Information

System

 Data Store (Financial, Labor, 

 Payroll, Travel)

 Business Intelligence 

 Functions

 Modeling

 Analysis Functions

 Query & Reporting Functions

e-Travel (Outsourced

government-wide solution)

 Authorizations

 Reservations

 Vouchers

TODAY TRANSITION TARGET

Pegasys

 Core Accounting Functions

 Cost Allocation

 Asset Management

e-Payroll

 Payroll Functions

PAR

 Payroll Functions

FMIS

 Valid Accounting Transactions

 Detail & Summary Query Functions

InfoWizard

 Business Modeling & Analysis

FedDesk

 Travel Management &

 Reimbursement

 (Authorizations & Vouchers)

 Labor Data Collection/Distribution

 Miscellaneous Reimbursements

 Electronic Time & Attendance

 GSA Awards FedDesk

 Labor Data Collection/Distribution

 Miscellaneous Reimbursements

 Electronic Time & Attendance

 GSA Awards

NEAR

 Accounts Receivable/Billing

 Asset Management

 Cost Allocation

FINANCIAL MANAGEMENT SYSTEMS FRAMEWORK 
To transition to this new EA, during FY 2005 a series of

actions are planned, including:

1) Migrating cost allocation functionality from the NEAR

system to Pegasys

2) Developing requirements for a comprehensive asset

management solution

3) Significantly enhancing data warehousing functionality

to provide more extensive data access and reporting

capabilities

4) Partnering with the private sector to provide an innovative, cost-effective, e-enabled comprehensive accounts

receivable and billing solution that will meet GSA's

unique high-volume, highly complex revolving fund

transaction needs and

5) Providing enhanced capabilities to streamline intragovernmental and vendor transaction processing. 

ANTI-DEFICIENCY ACT

GSA reported in FY 2004 that procedures have been

implemented to prevent reoccurrence of the cash shortfall in

the Working Capital Fund (WCF). The new procedures were

used in the FY 2005 and FY 2006 billing cycle and have been

effective in ensuring the timely transfer of cash from the

benefiting organizations to the WCF. 

In FY 2004, GSA reported the steps FTS instituted as a result

of the FY 2003 improper acquisition practices at the

Customer Service Centers. New controls have been

implemented in FAS in order to bring the Customer Service

Centers into full compliance with procurement policies and

regulations. GSA has in process several additional

management efforts, especially the “Get It Right” plan, aimed

at overcoming the deficiencies identified and enhancing the

soundness of procurement programs going forward. These

are positive steps in the right direction. 

In a letter dated October 27, 2005, the GSA OIG

communicated to GSA management three matters involving

possible infractions on the part of GSA related to the AntiM ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 33

deficiency Act (ADA) and Purpose Statute. In one instance,

Customer Service Center (CSC) officials processed

procurement transactions for real property services through

the ITF and GSF that were well outside the fund’s legislative

authorized purposes, which are potentially in noncompliance with the Purpose Statute. In another instance,

GSA contracted for services using client funds which may

have been expired and unavailable for obligation, which may

result in an ADA violation. An overarching issue was also

identified pertaining inappropriate accounting for and

misapplication of customer funds over the course of many

prior financial reporting periods. There was no purpose of

personal gain or benefit. 

IMPROPER PAYMENTS INFORMATION ACT

GSA conducted the erroneous payment risk assessment

review for FY 2004 in accordance with Public Law (PL) 107-

300, The Improper Payments Information Act of 2002

(IPIA). The erroneous payment risk assessment is reported

one year in arrears. The assessment consisted of reviewing

all GSA business line/program erroneous payment information that was identified by the Regional Finance Centers and

the Recovery Audit Contractor, as well as reviewing the

Inspector General (IG) Audit Reports and other audit

findings. The risk assessment included such factors as prior

audit reports, internal control reviews, complexity of

payment calculations, complexity of laws and regulations,

and other risk factors. GSA does not have any programs

previously identified in former Section 57 of OMB Circular

A-11, and there are no statutory or regulatory barriers to

limit any corrective actions that the Agency may develop to

reduce improper payments.

The review indicated that no GSA program was highly

susceptible to erroneous payments according to the

threshold amounts ($10 million) established by OMB.

GSA’s recovery auditor continues to make valuable recommendations to GSA to strengthen internal controls over all

programs. GSA is working to strengthen internal controls

based upon these recommendations to decrease the occurrence of erroneous payments.
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 34

GSA continues to demonstrate a strong commitment to

improving financial management and was at the forefront in

the Federal government for operation of a recovery audit

program. In 2001, prior to the National Defense

Authorization Act of 2002 (PL 107-107), GSA entered into a

contract for recovery audit services. The Act requires that

agencies that enter into contracts with a total value in

excess of $500 million in a fiscal year carry out a cost-effective program for identifying errors made in paying contractors and for recovering amounts erroneously paid to the

contractors. A required element of such a program is the

use of recovery audits and recovery activities.

Payments are only made to the recovery auditor upon identification and successful collection of erroneous payments.

While GSA’s payment error rate remains low at .8 percent,

GSA has benefited substantially from the recovery audit

contract. GSA has also benefited from the valuable recommendations made by the recovery audit contractor to

strengthen internal controls to prevent and detect erroneous

payments. 

The GSA Administrator has delegated the authority for

implementation of PL 107-300 to the Agency’s Chief

Financial Officer (CFO). The CFO has further delegated to

Agency program officials the responsibility for reporting

any program deemed highly susceptible to erroneous

payments, developing a corrective action plan, estimating

the annual amount of erroneous payments in programs and

activities, and establishing goals to reduce them in accordance with the guidance provided by OMB. 

AGENCY PLANS FOR FY 2006 – FY 2007

GSA is committed to the President’s Management Agenda

(PMA) to improve financial management in the Federal

government. During FY 2006-2007, GSA will conduct the

annual risk assessment as required by the IPIA and will

continue to expand recovery audit services to other

program activities. If any GSA program is found highly

susceptible to erroneous payments, the responsible

program official will develop a corrective action plan in

accordance with PL 107-300.

Some of the most important policies the OCFO develops include those for cash and credit management.
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 35

THE ROAD TO ACCOUNTABILITY – 

FINANCIAL HIGHLIGHTS

The independent accounting firm ofPricewaterhouseCoopers, LLP (PwC) expressed an

unqualified (clean) opinion on GSA's proprietary financial

statements, the Statements of Net Cost, Balance Sheets, and

Statements of Changes in Net Position. For GSA's budgetary

statements, the Statements of Budgetary Resources and

Statements of Financing, PwC issued an unqualified opinion

on the statements for the Federal Buildings Fund (FBF).

However, due to errors found in prior year balances in the

Information Technology Fund (ITF) and General Supply

Fund (GSF) related to unfilled customer orders, PwC was

not able to issue an opinion on the budgetary statements of

the ITF, GSF, and GSA Consolidated, as noted in the 

FY 2005 audit report that can be found on page 87.

Throughout FY 2004 and 2005 GSA’s management

significantly increased attention and control, regarding

budgetary reporting, as part of its goal in ensuring

accountability over resources that are entrusted to it as well

as to provide accurate and reliable information. Agency

management is accountable for the integrity of the financial

information presented in the financial statements.

The financial statements and financial data presented in this

report have been prepared from GSA’s accounting records

in conformity with generally accepted accounting principles

(GAAP) in the United States. GAAP for Federal entities are

the standards prescribed by the Federal Accounting

Standards Advisory Board (FASAB). 

OVERVIEW OF FINANCIAL POSITION

ASSETS: Total assets were $27,834 million at the end of 

FY 2005. This represents an increase of $1,089 million 

(4.07 percent) over the previous year’s total assets of

$26,745 million. This increase is largely attributable to

continued growth in GSA’s primary business operations,

which is reflected in capital asset purchases and alterations

and increases in earnings that provided cash (Funds with

U.S. Treasury) from operations. 

GSA’s assets reflected in the Consolidating Balance Sheets

are summarized in the table below:

Taken together Property and Equipment combined with

Funds with U.S. Treasury comprise 92.31 percent of the total

assets for FY 2005. The $235 million increase in Funds with

U.S. Treasury was primarily due to earnings exceeding cost

of operations in the FBF and the GSF. The $6,778 million of

Funds with U.S. Treasury is generally available to GSA to

liquidate outstanding commitments and to provide working

capital to the revolving fund programs, and contains

balances that will fund future needs. While the majority of

these balances ($6,136 million) are available for such future

needs, $2,278 million of the available balance is committed

to funding of building construction and alteration projects

provided for in legislation. Amounts totaling $837 million

were unavailable for spending as of September 30, 2005 and

would require future authorization or even legislation to 

be used.

Financial Summary

ASSETS (Dollars in Millions) FY 2004 FY 2005

Land, Property and Equipment, Net $ 17,966 $ 18,915

Funds with U.S. Treasury 6,543 6,778

Accounts Receivable, Net 1,990 1,885

Other Assets 246 256

Total Assets $ 26,745 $ 27,834
ASSETS BY TYPE (Dollars in Millions)

TOTAL ASSETS $27,834

LAND, PROPERTY

AND EQUIPMENT

68%

$18,915

OTHER ASSETS

1%

$256

ACCOUNTS

RECEIVABLE, NET

7%

$1,885

FUNDS WITH

TREASURY

24%

$6,778

LIABILITIES BY TYPE (Dollars in Millions)

4%

$212

3%

$184

36%

$2,201

2%

$119

3%

$203 7%

$445

38%

$2,269

3%

$177

4%

$244

LIABILITIES

Accounts Payable

Intragovernmental Debt

Other Unfunded Liabilities

Worker’s Compensation

Capital Leases/Installment Purchases

U.S. Treasury Judgement Fund

Contingencies/Environmental Disposals

Deferred Revenues/Advances

Miscellaneous Liabilitie

TOTAL LIABILITIES $6,054

M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 36

LIABILITIES (Dollars in Millions) FY 2004 FY 2005

Accounts Payable $ 2,468 $ 2,269

Intragovernmental Debt 2,210 2,201

Other Unfunded Liabilities 117 177

Workers’ Compensation 200 203

Capital Leases/Installment Purchases 422 445

U.S. Treasury Judgement Fund 227 244

Contingencies/Environmental Disposals 144 119

Deferred Revenues/Advances 192 184

Miscellaneous Liabilities 192 212

Total Liabilities $ 6,172 $ 6,054
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 37

Property and Equipment increased by $949 million 

(5.02 percent) from FY 2004. Property acquisitions of $2,499

million during the year, net of the recorded depreciation

expense of $1,198 million and $360 million in property

disposals account for most of this increase. For the total

amount of property acquisitions in FY 2005 $1,705 million

were comprised of construction, modernization, and alterations to buildings.

LIABILITIES: In FY 2005, total Agency liabilities decreased by

$118 million (1.91 percent) to $6,054 million from $6.172

million in FY 2004. Liabilities reported on the Consolidating

Balance Sheet are summarized in the table on the adjoining

page.

GSA’s largest liability balances are accounts payable,

making up 37.48 percent of the total. These balances

decreasd $199 million (8.06 percent) in FY 2005 primarily

due to the Information Technology Fund’s ITF’s decrease in

business activity.

The $2,201 million of Intragovernmental Debt is 36.21

percent of total liabilities, of which $58 million is unfunded.

Periodically, in lieu of direct appropriations, GSA receives

authority in its FBF to finance construction of buildings.

Borrowings have been obtained from the U.S. Treasury’s

Federal Financing Bank, with the expenditure of the funds

amortized over a 30-year period. GSA has almost depleted

its authority to borrow and is currently retiring more debt

than it is taking on. In FY 2005 Intragovernmental Debt

decreased by $9 million, mostly due to such debt

retirements, which are covered by operating earnings in 

the FBF. 

Liabilities totaling $1,217 million, or 20.10 percent of total

liabilities, were unfunded, i.e., budgetary resources are not

yet available. For most unfunded liabilities, budgetary

resources will be made available in the years balances are

due, in accordance with OMB funding guidelines. The

major elements of unfunded liabilities are $203 million for

Workers’ Compensation, $445 million for capital leases and

installment purchases, $244 million for reimbursements due

the U.S. Treasury Judgment Fund for costs from past

litigation, and $119 million for contingencies and

environmental/disposal liabilities.

ENDING NET POSITION: GSA’s Net Position at the end of 2005

on the Consolidating Balance Sheet and the Consolidating

Statement of Changes in Net Position was $21,780 million,

a $1,207 million (5.54 percent) increase from the prior fiscal

year. Net Position is the sum of the Unexpended

Appropriations and Cumulative Results of Operations at the

end of 2005. 

The increase in Cumulative Results of Operations resulted

primarily from strong earnings in GSA’s revolving funds,

particularly the FBF (earnings of $974 million) and GSF

(earnings of $85 million) which mostly funds capital needs

of those programs. 

RESULTS OF OPERATIONS

The results of operations are reported in the Consolidated

Statement of Net Cost and the Consolidated Statement of

Changes in Net Position, and in the Supplemental

Consolidating Statement of Operations.

The Consolidated Statement of Net Cost presents the cost

less any earned revenue of operating the Agency’s three

largest fund entities that support its three major business

divisions, the GSA Working Capital Fund (WCF) and other

operating funds, in reporting the Agency’s Net Cost. 

GSA’s total Net Revenue from Cost of Operations at the 

end of FY 2005, after intra-agency eliminations, was 

$838 million, a $139 million (14.23 percent) decrease from

the prior fiscal year. The Net Revenue from Cost of

Operations is presented as Total Revenues less Total

Expenses at the end of FY 2005. The decrease in Net

Revenue from Cost of Operations is primarily due to

contraction of ITF’s IT Solutions and GSF’s Global Supply

Operations, Vehicle Acquisition and Leasing, and

Commercial Acquisition which are discussed in the

Performance Section of this report.

The charts on the following page summarizes the activity on

GSA’s Consolidated Statement of Net Cost and the

Consolidated Statement of Net Position by showing the

funds available to GSA in FY 2005 and how these funds

were used.
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 38

REVENUE SOURCES (Dollars in Millions)

FEDERAL

BUILDINGS FUND

$8,245

APPROPRIATIONS

RECEIVED

$218

HOW FUNDS WERE USED (Dollars in Millions)

INFORMATION

TECHNOLOGY FUND

$6,720

OTHER FUNDS

$397

GENERAL

SUPPLY FUND

$3,734

FEDERAL

BUILDINGS FUND

$7,271

INFORMATION

TECHNOLOGY FUND

$6,731

OTHER FUNDS

$634

APPROPRIATIONS

USED

$245

GENERAL

SUPPLY FUND

$3,649

With the merger of the Federal Supply Service (FSS) and the

Federal Technology Service (FTS) into the Federal

Acquisition Service (FAS), FAS will have two revolving funds

with varying legislative authorities. Under the new

organization, it would be more efficient to operate with one

revolving fund. Legislation has been introduced to merge

the GSF and ITF from FSS and FTS, respectively. Absent

approval of this legislation, the FAS will be operating with

two separate revolving funds and will not fully realize 

the efficiencies and operational improvements of the

reorganization.

Funding for capital investment in real property remains a

significant challenge. The current funding level of the FBF

is inadequate to meet the demand for new construction,

particularly new courthouses and facilities with stringent

BUDGETARY ISSUES
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 39

GSA associates are meeting the accelerated reporting dates while maintaining GSA’s reputation for

integrity and reliability in its accounting information. 

LIMITATION OF FINANCIAL STATEMENTS

Management prepares the accompanying financial

statements to report the financial position and results of

operations for the GSA, pursuant to the requirements of

Chapter 31 of the United States Code section 3515(b). While

these statements have been prepared from GSA’s books and

records, in accordance with the formats prescribed in OMB

Circular A-136, Financial Reporting Requirements, these

statements are in addition to the financial reports used to

monitor and control the budgetary resources that are

prepared from the same books and records. These

statements should be read with the understanding that they

are for a component of the U.S. government, a sovereign

entity. One implication of this is that unfunded liabilities

reported in the statements cannot be liquidated without

legislation that provides resources to the Agency.

security requirements, and the need to reinvest in the

existing inventory of government-owned buildings. Public

Buildings Service’s (PBS) Strategy for Restructuring and

Reinvesting in the Owned Inventory has brought new

emphasis to addressing the non-performing assets in the

PBS inventory. This effort, along with asset management

reform legislation and continued support for Repairs and

Alterations (R&A) funding, is essential to reducing the $6

billion backlog of building repair and maintenance work

and providing quality space for our Federal customers and

the visiting public.
M ANAGEMENT ’ S D ISCUSSION AND A NALYSIS

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 40
Performance Section

P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 43

GSAfocused on being a results-oriented organization during FY 2005, enhancing both the

Performance Management Process (PMP) and the

Performance Measurement Tool (PMT).

GSA AND THE PERFORMANCE

MANAGEMENT PROCESS

The PMP is an on-going process intended to facilitate sound

business and financial practices. Throughout the fiscal year,

this approach encouraged collaborative decision-making

among GSA senior leaders regarding strategic plans, budget

priorities, and performance results.

In the broadest perspective, GSA’s PMP is a systematic

approach to achieving results by analyzing customer and

taxpayer requirements, setting performance goals based

upon those requirements, developing action plans, allocating resources in a manner that integrates budget and

performance goals, and executing the plans as necessary to

achieve desired results. The integration of strategic

planning, budget development, and performance management will help GSA apply its financial resources strategically

to deliver best value to its customers and meet all of its

strategic goals.

As in previous years, the PMP required GSA’s senior leadership to come together to discuss the organization’s strategic

assessments, and strategy and action plans. In FY 2005,

GSA was able to start the discussions six weeks earlier than

previous years. In January, a ‘pre-strategic assessment’

summit was held which allowed the GSA leadership to

provide the strategic direction to the program areas before

the individual organizations developed their strategic

assessments. The direction provided as a result of this

meeting allowed GSA organizations to produce more

comprehensive environmental scans, and ultimately,

stronger strategic assessments. 

GSA AND THE PERFORMANCE

MEASUREMENT TOOL

In support of the PMP, GSA has instituted a common Webbased user interface called the PMT. By linking resources

and results, this financial and performance reporting tool

allows all associates, including the Administrator, Regional

Administrators, and other managers, to review quarterly

results. 

In FY 2005, new guidelines were established for data entry

into the PMT. Actual data is required to be entered into the

PMT by the tenth business day after the close of the month,

targets established in GSA’s Performance Budget must be

used in the PMT, and the wording of the measures cannot

be changed without prior approval. As a result of these

new guidelines, the information is timely and there is

increased consistency in the reporting of GSA’s performance measures.

Introduction to Performance
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 44

GSA AND THE PROGRAM

ASSESSMENT RATING TOOL

Within the PMP, GSA has used the President’s Management

Agenda (PMA) as a guide to establish business practices that

enabled GSA to achieve quantifiable results and a workplace that has been rated one of the best in the Federal

government by the Partnership for Public Service. 

GSA is committed to ongoing improvement and expects to

continue adapting the PMA initiatives to provide best value

to its customer agencies and the American taxpayers. As

part of the PMA, OMB has established the Program

Assessment Rating Tool (PART), which is used to objectively

evaluate program performance. GSA has 14 programs that

have received PART reviews. Of the 14 programs reviewed,

eight have received PART ratings ranging from “Adequate”

to “Effective.” For the remaining programs rated “Results

Not Demonstrated,” GSA is working with OMB to establish

acceptable long-term outcome goals and efficiency

measures necessary to have the programs successfully

rated.

All programs that have undergone the PART process are

required to complete a PART remediation plan based on the

recommendations from OMB. This plan serves as an action

plan, complete with milestones and dates, for accomplishing these recommendations. For those programs rated

“Results Not Demonstrated” the primary concern is

developing long-term outcome goals and efficiency

measures, particularly measures that capture the savings

GSA provides to its customers. For those programs that

have been successfully rated, the remediation plans center

around improving their PART score, specifically by

instituting independent, recurring program evaluations of

the program. Additional information about GSA’s PART

scores and remediation plans can be found on the OMB

Web site, www.expectmore.gov. GSA is proactively

working with those programs that will be rated in FY 2006

in order to develop long-term outcome goals and efficiency

measures for the programs to ensure they are successfully

rated.

GSA made a conscientious decision to reduce the number

of measures reported in the Performance and

Accountability Report (PAR) in order to focus attention on

the key measures in support of GSA’s strategic goals. The

remainder of this section provides performance highlights,

key measures, and results for the key measures from the

Services and selected Staff Offices. The complete list of 

FY 2005 measures can be found in Appendix II, and the full

performance report will be published on the GSA Web site

(www.gsa.gov/annualreports) in December, 2005.

Performance measures that GSA is no longer reporting

externally can be found in Appendix III.
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 45

GSA PROGRAM RATING

FY 2002

FSS Commercial Acquisition Results Not Demonstrated

FSS Global Supply Adequate1

FSS Vehicle Acquisition Adequate1 

FSS Vehicle Leasing Moderately Effective1

PBS Asset Management of Real Property Effective1

FY 2003

FSS Personal Property Management Moderately Effective2

FTS Regional IT Solutions Results Not Demonstrated

PBS Leasing Space Moderately Effective2

PBS Real Property Disposal Moderately Effective2

FY 2004

FTS National IT Solutions Results Not Demonstrated

OGP Office of Governmentwide Policy Results Not Demonstrated

PBS Construction Effective2

FY 2005

FSS Travel Results Not Demonstrated

FSS Transportation Results Not Demonstrated

FY 20063

FTS Long Distance Not Yet Evaluated

FTS Telecommunications Not Yet Evaluated

FTS Professional Services Not Yet Evaluated

OCSC Office of Citizen Services & Communications Not Yet Evaluated

1 Originally scored as Results Not Demonstrated, rescored in FY 2004.

2 Originally scored as Results Not Demonstrated, rescored in FY 2005.

3 Proposed FY 2006 PART Schedule. The reorganization of the Agency may affect the schedule.

PART FISCAL YEAR SCHEDULE AND RESULTS
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 46

PBS

The Public Buildings Service

(PBS), as landlord to the

civilian Federal government,

strives to provide a superior

workplace for the Federal worker

and superior value to the American

taxpayer. By providing its customers

with quality work environments, PBS

enables Federal agencies to better

serve the public. As one of the

largest public real estate organizations in the nation, PBS provides

workspace and workplace solutions

to more than 100 Federal agencies.

PBS has undertaken a Portfolio

Restructuring Initiative to better align

the building portfolio with GSA’s

mission of delivering a high-quality workplace for the

Federal worker and a superior value for the taxpayer.

Increased focus has been placed on high performing

assets. Other assets that are expensive to operate and

maintain, produce little or no net income, require

significant capital repairs, and do not adequately serve

customer agencies will be disposed of if feasible and

practical. The restructuring effort focuses GSA’s attention

on the financial and physical performance of each asset

in the portfolio, prioritizes reinvestment dollars, provides

quality workplaces, increases customer satisfaction, and

increases the sustainability of historical and culturally

significant landmarks.

PBS’s Office of Real Property Disposal has disposed of 91

portfolio assets valued at approximately $53.9 million

since the inception of the restructuring initiative. During

FY 2005, proceeds in the amount of $12 million were

PUBLIC BUILDINGS SERVICE

retained from the disposal of 29 properties. Another 54

non-performing assets are in the disposal process. The

FY 2005 disposals reduced the underutilized portion of

GSA’s inventory by approximately 1.8 million square feet

and avoided $107 million in reinvestment liabilities.

PERFORMANCE HIGHLIGHTS

PBS has completed four PART Reviews of its major

programs: (1) Asset Management of Real Property, 

(2) GSA Leasing, (3) Real Property Disposal, and (4) New

Construction. Leasing and Disposal are rated by OMB as

“moderately effective,” while Asset Management and New

Construction are rated “effective.” 

The paragraphs below summarize FY 2005 PBS major

performance results by business line activity.
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 47

PBS

NEW CONSTRUCTION: In FY 2005, the new construction

program’s schedule performance improved from 80

percent in FY 2004 to 100 percent in FY 2005. PBS is

involved in a $10 billion, multi-year program to build new

Federal courthouses, border stations, Federal buildings,

and to rehabilitate existing Federal courthouses and other

facilities. These programs are necessary to accommodate

new security requirements, enhanced prisoner security

and handling measures, an increased number of Federal

court cases, and an increased number of Federal judges,

as well as to address the specialized space needs and

functional requirements of other Federal agency

customers. The President’s FY 2005 Budget included site

and design funding for eight new border station projects

and construction funding for two new border station

projects. PBS awarded design contracts for new

courthouses in Springfield, MA and Richmond, VA.

Through a contract with Georgia Institute of Technology,

a secure Internet site has been established that provides

documentation on completed courthouses. The site

includes a compendium of “Lessons Learned.” In

addition, a guide for conducting helpful visits of existing

courthouses has been developed. This guide will

facilitate improvements in gathering information prior to

starting the design of future courthouses. Also, PBS

released a new Project Management Guide in FY 2005 to

help improve project execution results and plans to

develop a Border Station Design Guide in FY 2006.

GSA LEASING: PBS’s objective is to lease space that

provides customer agencies superior workplaces at the

best value for taxpayer dollars. PBS’s role is to acquire

space that helps Federal agencies achieve their missions by

balancing factors such as location, building amenities,

special features, cost, and other productivity and value

factors. PBS is committed to bringing coherent and

consistent practices to the leasing program. It has

instituted the Transaction Management Playbook to assist

in identifying customer requirements and a National

Commercial Broker Services Contract to allow PBS to

leverage the size and the value of its leasing program while

achieving cost savings and improving customer service.

The National Commercial Broker Services contract was

deemed as providing the greatest value to the government

and mirrors the private sector by issuing a contract in

which the broker will be paid on a commission basis by

the lessor.

In addition, PBS has implemented “eLease”, an effective

information technology (IT) tool that will automate the

leasing business flow, integrate components of existing

databases of information, and manage a set of unified

leasing templates in a single environment. 

The target for FY 2005 for the cost of new leased space

relative to market averages was 8.3 percent below market

costs. In FY 2005, PBS cost was 9.2 percent below

comparable leased market costs.

PBS’s performance goals for its existing leased inventory

included increasing the number of satisfied tenants (4’s &

5’s on a 5 point scale) to 70 percent, and maintaining a

very low vacancy rate of less than or equal to 1.5 percent.

PBS succeeded in achieving both of these objectives by

increasing the percentage of satisfied tenants to 78

percent and limiting the vacancy rate in its total leased

inventory to 1.3 percent.

ASSET MANAGEMENT OF REAL PROPERTY: PBS

continues to achieve success in the management of its

real property assets. Within the area of building

operations, a Human Capital Strategy has been developed

and implemented to address customer needs and to reinvigorate GSA’s National Account Program with its major

customer agencies. National Account Executives work

closely with ordering officials from GSA’s customer

agencies to meet their expectations. PBS has had

continued success at providing building operations

services at levels comparable to the private sector, at

below average market cost. In FY 2005 combined

cleaning, maintenance, and energy costs stood at 10.5

percent below the private sector, slightly short of PBS’s 

12 percent goal.
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 48

PBS

PBS is also progressing toward meeting its long-term

energy reduction goals. By the end of FY 2005, it has

reduced energy consumption by 35.3 percent from the

1985 baseline, which exceeded its target of 30 percent.

This reduction was achieved largely due to application of

energy reduction credits for purchase of renewable

power per Executive Order 13123. PBS renewable power

contracts have subsidized renewable energy production

at a critical time when fossil fuel generated energy

sources are significantly damaged. These contracts offer

long-term solutions to dependence on fossil fuel

resources that are subject to constant hurricane

disruption. This contributes to a more diversified mix of

fuel sources for PBS’s electricity supply which contributes

to a more diverse energy industry.

PBS is also achieving its objective to keep GSA buildings

in good repair and provide Federal tenants with quality

workspace that enables them to carry out their missions.

Workload changes over time as the buildings age and the

composition of the inventory changes. PBS is focusing

reinvestment capital on the most productive assets with

long-term Federal purposes. These actions are part of

PBS’s Portfolio Strategy. Better scheduling and more

aggressive tracking will improve the management of

Repairs and Alterations (R&A) projects. 

PBS has set specific goals and objectives to be

accomplished in FY 2005 and beyond for the R&A

program. For example, by FY 2005 PBS objectives were

to have 86 percent of R&A projects completed on

schedule, and PBS met its target. The FY 2005 R&A

program’s on-schedule performance was 95 percent, up

from 78 percent in FY 2004. As the PBS Portfolio Strategy

is implemented, PBS will reduce the total reinvestment

needs of the owned portfolio. Nonperforming assets,

which are unable to generate sufficient income for their

reinvestment requirement, and assets for which there is

no long term Federal need, are redeployed for disposal,

exchange, or transfer. 

Overall, GSA is able to maintain its buildings from income

generated by the buildings. Budgets are formulated

based upon this anticipated income. The Funds from

Operations (FFO) shows how effectively and efficiently

PBS is executing its budget. In FY 2005 FFO totaled 

$1.7 billion (unadjusted). Efforts will continue to

restructure the PBS building portfolio to consist primarily

of strong income producing properties
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 49

PBS

PBS Performance By GSA-Wide Goal 

GSA-WIDE GOAL 1: PROVIDE BEST VALUE FOR CUSTOMER AGENCIES AND TAXPAYERS

PERFORMANCE GOAL RESULT

Award leases at an average rental rate of not less then 8.3% Met

below industry averages for comparable office space by FY 2005.

Achieve a “highly satisfied” overall customer satisfaction rating Met

of 70% by FY 2005. 

Complete 80% of 49 Act disposals within 320 days by FY 2005. Met

DESCRIPTION OF THE MEASURE: PBS benchmarks its leasing costs in office space to the private sector. By consistently

paying lease rates at or below comparable market rates, PBS ensures that it is achieving the best value for the taxpayer.

When calculated by contract, this measure also provides information as to the effectiveness of PBS’s negotiation of

favorable contract rates.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was met. PBS exceeded the FY 2005 target in part due to its

successful negotiation of very reasonable rates for some large leases, and on replacement leases at existing locations

which allowed PBS to benefit from lower tenant finish costs.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

-14.0% -7.4% -10.6% <-8.3% -9.2%

PERFORMANCE GOAL

Award leases at an average rental rate of not less then 8.3 percent below industry averages for comparable office

space by FY 2005

MEASURE 

Cost of leased space relative to the market

PBS
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 50

DESCRIPTION OF THE MEASURE: A high level of satisfaction with one’s work environment is a key factor that promotes

productivity, thus enhancing Federal workforce service to the public. PBS has partnered with the Gallup Organization

to assess these satisfaction levels through a customer survey developed in collaboration with the International Facilities

Management Association.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was met. In FY 2003, PBS altered its target methodology to

allow a higher distinction on the level of satisfaction. Instead of a “yes/no” question format which did not provide any

distinction in the level of satisfaction, PBS used a 1-5 rating and only counted 4’s and 5’s as satisfied tenants. As a result

of the change in methodology, the goals for customer satisfaction were reduced but, according to the Gallup

Organization, provide a better gauge of true customer satisfaction. Major factors contributing to the high customer

satisfaction level include the quality of leased space and proactive responses by PBS to previous tenant survey issues.

DESCRIPTION OF THE MEASURE: This measure evaluates PBS’s efficiency in disposing properties for which it has

received a report of excess from the real property holding agency. Timely disposal of excess and surplus property

provides income to the Federal government and eliminates costs associated with operating and maintaining unneeded

facilities.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was met. Nationwide increases in the real estate market have

had a positive impact on all aspects of real property transactions, including disposal cycle time. This impact transcended

other factors that influence the time required for the disposal of a property, including size, location, prior use, and

individual property market value.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

N/A 68% 89% 80% 88%

PERFORMANCE GOAL

Complete 80 percent of 49 Act disposals within 320 days by FY 2005.

MEASURE 

Percentage of disposals completed within 320 days.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

N/A 66% 70% 70% 78%

PERFORMANCE GOAL

Achieve a “highly satisfied” overall customer satisfaction rating of 70 percent by FY 2005.

MEASURE 

Customer satisfaction - tenants in leased space.

PBS
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 51

GSA-WIDE GOAL 2: ACHIEVE RESPONSIBLE ASSET MANAGEMENT

PERFORMANCE GOAL RESULT

86% of repairs and alterations (R&A) projects on schedule by FY 2005. Met

Maintain the percentage of vacant space in leased buildings at less Met

than or equal to 1.5% in FY 2005

New construction projects on schedule 85% of the time by FY 2005. Met

DESCRIPTION OF THE MEASURE: PBS financial projections include rental income from newly repaired and altered space

as of the anticipated date of occupancy. It is, therefore, critical that projects be completed on time so that they can

begin to generate expected revenue. This measure tracks the actual value of work in place on projects against projected

schedule performance, weighted by cost. This measure uses an earned value technique to assess project performance

on all prospectus level R&A projects.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was met. PBS has implemented several initiatives, such as

quality assurance reviews of project scopes of work and cost estimate reviews of project budgets to improve the

program's performance, as well as increased management reviews of performance metrics and program status. These

initiatives, combined with PBS's ongoing efforts to enhance the tools and resources available to project management

teams, such as the new Project Management Guide rolled out in FY 2005, led to improvements in the performance of

the R&A program.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

87% 78% 78% 86% 95%

PERFORMANCE GOAL

86 percent of repairs and alterations (R&A) projects on schedule by FY 2005.

MEASURE 

Percent of Repairs and Alterations (R&A) Projects on schedule.

PBS
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 52

DESCRIPTION OF THE MEASURE: This measure evaluates PBS’s effectiveness at maximizing the use of existing leased

space in its real property inventory. Vacant space includes any space for which PBS has no current tenant, including

space that it has committed to a customer, but is not yet occupied.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was met. PBS has continued to improve in this area. PBS has

concentrated its efforts on reducing vacant space due to the significant savings to the taxpayer that can be achieved

from maintaining a high asset utilization rate. PBS successfully used multiple strategies, including buyout of lease

contracts, backfill of space, and early termination rights in lease contracts to maintain vacancy rates at historically low

averages.

DESCRIPTION OF THE MEASURE: PBS financial projections include rental income from new construction projects as of

the anticipated date of occupancy. It is, therefore, critical that projects be completed on time so that they can begin to

generate expected revenue. This measure tracks the actual value of work in place on projects against projected

schedule performance, weighted by cost. This measure uses an earned value technique to assess construction project

performance on all prospectus level new construction projects.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was met. PBS has implemented several initiatives, such as

quality assurance reviews of project scopes of work and cost estimate reviews of project budgets to improve the

program's performance, as well as increased management reviews of performance metrics and program status. These

initiatives, combined with PBS's ongoing efforts to enhance the tools and resources available to project management

teams, such as the new Project Management Guide rolled out in FY 2005, led to improvements in performance of the

new construction program.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

78% 68% 80% 85% 100%

PERFORMANCE GOAL

New construction projects on schedule 85 percent of the time by FY 2005.

MEASURE 

Construction projects on schedule.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

2.0% 1.4% 1.2% <1.5% 1.2%

PERFORMANCE GOAL

Maintain the percentage of vacant space in leased buildings at less than or equal to 1.5 percent in FY 2005.

MEASURE 

Percent of vacant space in leased inventory.

PBS
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 53

GSA-WIDE GOAL 3: OPERATE EFFICIENTLY AND EFFECTIVELY

PERFORMANCE GOAL RESULT

Maintain operating service costs in office and similarly serviced space Not Met

at 12% or more below private sector benchmarks in FY 2005.

DESCRIPTION OF THE MEASURE: PBS uses several sophisticated benchmarks to monitor operating costs—maintenance,

utilities, and cleaning—in comparison with those in equivalent private sector buildings. The Building Owners and

Managers Association (BOMA), an advocacy group for the real estate industry, is PBS’s primary source for private sector

operating cost information.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was not met. PBS has been successful at managing building

operations cost by negotiating cleaning and maintenance contract rates below BOMA benchmarks, and its continuing

energy reduction efforts. 

PBS costs have remained stable since FY 2004, while benchmark data showed dramatic decrease in private sector utility

costs in two major markets in FY 2005. PBS is currently working to better understand the changes in the benchmark

data to determine if additional savings for the government are possible in future years. Even with these data anomalies,

PBS costs remained 10 percent below the private sector.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

-17.0% -14.8% -14.5% -12.0% -10.5%

PERFORMANCE GOAL

Maintain operating service costs in office and similarly serviced space at 12 percent or more below private sector

benchmarks in FY 2005.

MEASURE 

Percent below private sector benchmarks for cleaning, maintenance, and utility costs in office and similarly serviced space.

PBS
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 54

PBS

GSA-WIDE GOAL 6: CARRY OUT SOCIAL, ENVIRONMENTAL, 

AND OTHER RESPONSIBILITIES AS A FEDERAL AGENCY

PERFORMANCE GOAL RESULT

Reduce energy consumption in GSA Federal buildings by 30% Met

(as measured in Btu/GSF) over the FY 1985 baseline by FY 2005.

DESCRIPTION OF THE MEASURE: PBS is a responsible steward of the environment and is committed to implementing

energy-saving solutions that improve the energy efficiency of operations and save taxpayer dollars. 

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was met. This measure was achieved in large part due to

application of energy reduction credits for purchase of renewable power as allowed by guidance issued in compliance

with Executive Order 13123.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

-22.5% -18.6% -22.4% -30% -35.3%

PERFORMANCE GOAL

Reduce energy consumption in GSA Federal buildings by 30 percent (as measured in Btu/GSF) over the FY 1985

baseline by FY 2005.

MEASURE 

Percent reduction in energy consumption over the FY 1985 baseline.
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 55

FSS

The Federal Supply Service (FSS) provides a wide

variety of services and products at competitive

prices to the Federal agencies that serve the public.

GSA Administrator Perry announced the Agency-wide “Get

It Right” campaign in July 2004. Excellence in acquisition

remains a top priority at FSS. FSS strives to provide acquisition services to its Federal agency customers in a way that

delivers best value to support the achievement of their

missions of service to the American people, while adhering

strictly to Federal acquisition policies, regulations, and best

practices.

As GSA addressed internal problems with proper use of

contracting vehicles, agencies reduced their use of GSA

contracting vehicles in FY 2005. FSS has been working with

other Federal agencies, particularly the Department of

Defense (DoD), to identify actions necessary to ensure

proper use of GSA contracting vehicles by customer

agencies. FSS has also been working with the GSA

Inspector General (IG) to expand the partnership established with DoD to enhance the value of FSS and Federal

Technology Service (FTS) contracting practices and improve

the reliability of assisted service support. These initiatives

will carry forward in the Federal Acquisition Service (FAS),

established by the Administrator in September 2005.

PERFORMANCE HIGHLIGHTS

FSS has completed seven PART Reviews of its major

programs: (1) Global Supply, (2) Vehicle Acquisition, (3)

Vehicle Leasing, (4) GSA Personal Property Management,

(5) GSA Transportation, (6) GSA Travel, and (7) Commercial

Acquisition. The Supply Depots program and the Vehicle

Acquisition program are rated "Adequate" by the Office of

Management and Budget (OMB), Vehicle Leasing and

Personal Property are rated "Moderately Effective," and the

other three programs are rated “Results Not Demonstrated.”

The paragraphs below summarize FY 2005 FSS major

performance results by business-line activity.

GLOBAL SUPPLY:

GSA Office of Global Supply has partnered with the

Defense Logistics Agency (DLA) to forward position

product at the Mina Abdullah Distribution center in

Kuwait to support the war in Iraq. The distribution

facility is strategically positioned in Kuwait to improve

customer wait time, increase readiness, and reduce

transportation costs. DLA reports that operations at the

Kuwait depot have saved DoD nearly $106 million in 

FY 2005 in airlift and shipping costs by using less

expensive surface transportation methods. Currently,

FEDERAL SUPPLY SERVI CE
GSA has generated more than $14 million in sales of

products ranging from tools and hardware to office

products and cleaning supplies. Total sales for FY 2005

are nearly $15 million.

Utilizing prime contractor-like arrangements through the

Expanded Direct Delivery (EDD) program has allowed

Global Supply to continue to expand its product

offerings and distribution channels without incurring

major expenses. The current EDD contracts for office

supplies and tools were awarded below Multiple Award

Schedule (MAS) prices. In addition to providing the

product, Global Supply is able to assure compliance

with all acquisition policies and socioeconomic

regulations as well as handle the government-togovernment billing, discrepancy resolution, and

delivery. Global Supply also performs all contracting

services required to obtain any of these products,

relieving the agencies from doing this contracting work.

This in itself is a cost savings for any agency. Global

Supply will expand EDD offerings in FY 2006 to include

laptop and desktop computers, PC printers, and

computer accessories. 

COMMERCIAL ACQUISITION:

From FY 2003 to FY 2004, Commercial Acquisition (MAS

and Government Wide Acquisition Contract (GWAC)

Programs) realized a 20 percent growth in business

volume. During FY 2005, however, business volume for

these programs increased by only 1.5 percent with sales

totaling about $35 billion.

The sluggish growth in sales during FY 2005 was due in

large part to DoD acquisition policy changes and

because of concerns raised about the proper use of GSA

contracting vehicles and services. The DoD policy,

which took effect in January 2005 required DoD officials

to justify the use of non-DoD contracts and to use

several quality-control steps when buying through GSA

schedules and other non-DoD contracts. Concerns

about the proper use of GSA contracting vehicles

deterred Federal agencies, not only from using FSS

contracts, but from using the FTS for acquisition support.

Since GWACs were often used by FTS to expedite these

acquisitions, GWAC growth has been seriously affected

by the reduced sales and by the new procedures put in

place by FTS to respond to customer and stakeholder

concerns. These procedures have significantly slowed

customer task order awards. 

Other factors affecting Commercial Acquisition sales

include: (1) reduced hardware and appliance sales

through the Global Supply business line, (2) cancellation

of numerous office products under contract because

they are no longer being produced domestically or in

approved U.S. Trade Agreements Act countries, and 

(3) agency use of their own contract vehicles instead of

MAS contracts for OMB-required strategic sourcing

initiatives. 

Cycle times for processing contract offers improved and

met the target due to increased use of automated

systems and associate training. Cycle time to process

offers decreased by 8 percent from FY 2003 cycle to 

FY 2004. FY 2005 performance shows improvement in

this downward trend for reducing cycle time, with a 

9 percent decrease in cycle time from FY 2004

performance.

VEHICLE ACQUISITION AND LEASING SERVICES: 

GSA Automotive, the vehicle acquisition service, is a

mandatory source that leverages the buying power of

the Federal government to obtain significant discounts

for Federal agencies. In FY 2005 more than 58,000

vehicles were procured at discounts averaging 40

percent below commercial pricing. 

GSA Fleet, the leasing service, grows through

transferring vehicle ownership and management

responsibilities of other Federal agencies’ fleets to

GSA. Since 1985, Fleet consolidations have been a

smart solution for the Federal government, with FY

2004 savings to taxpayers exceeding $82 million

dollars. Savings through vehicle consolidations into

the GSA Fleet will continue to reduce costs to

customer agencies, eliminating their capital

P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 56

FSS
FSS

P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 57

requirements for vehicles, and decreasing their need

for personnel to manage fleets. GSA Fleet services

traditionally cost at least 27 percent less than the

private sector and continue to provide the best value

to the Federal government. The majority of vehicles

consolidated into GSA’s Fleet save customers and

taxpayers $680 per vehicle per year.

TRAVEL AND TRANSPORTATION: 

The eTravel Initiative, launched in response to the

President’s Management Agenda (PMA) to improve the

internal efficiency of the Federal government,

addresses the challenge of reengineering the

government’s travel function. It is a collaborative,

interagency initiative whose purpose is to realize the

efficiencies, cost-savings, and increased service

associated with a common approach to managing

civilian agencies’ travel function. 

The eTravel Service (eTS) is commercially hosted to

minimize technology costs to the government and

guarantee refreshed functionality. From travel

planning and authorization to reimbursement, this

end-to-end service streamlines travel management and

enables the government to gain insight into the buying

choices of travelers. It assists agencies in optimizing

their travel budgets while saving taxpayers money

through leveraged buying. 

eTS is an important component of GSA’s goal for

world-class travel management. It will maximize the

utilization of all GSA travel programs, including the

airline City Pairs Program (CPP), the FedRooms

lodging program, and other travel services available

through the Travel Services Solution (TSS) schedule,

while supporting government-wide travel policy. 

In FY 2005, the eTravel Initiative achieved an

important milestone with 46 Executive branch

agencies placing eTS task orders by December 31,

2004. This was the date specified in the Federal Travel

Regulation for agencies to have placed eTS task

orders. With the support of the eTravel Program

Office, agencies were able to achieve this goal.

As planned, numerous Executive branch agencies

began using eTS in FY 2005 with others planning 

to complete deployment in FY 2006-2007.

Memorandums of Understanding for the deployment

and utilization of eTravel were signed between all 24

business reference model (BRM) agencies and GSA.

eTS Executive Advisory Board and User Groups were

established through formal charters and monthly

meetings began. To drive performance, Service Level

Agreements outlining performance goals were

developed with the eTS vendors. Focus then turned

to monitoring customer satisfaction and measuring eTS

vendors’ performance against the goals.

GSA and DoD continued to collaborate in an effort to

align government-wide travel business data. The

aggregation, cleansing, and normalizing of this data

will improve reporting, policy compliance, decisionmaking, and control of the government’s travel

spending.

PERSONAL PROPERTY MANAGEMENT:

Since 2001, the Property Management Division has

focused on reducing cycle time while still providing

the full range of disposal support that agencies need

and expect. Innovations such as XcessXpress, which

reduced screening time by 50 percent, and GSA

Auctions®, which reduces the time to process sales,

have enabled significant reductions in this measure.

Since 2001, cycle time has been reduced from

approximately 132 days to complete disposal actions

down to 56 days. This greatly reduces the cost for

agencies to hold property as it undergoes disposal

action. 

In coordination with the Food and Drug

Administration, and the Center for Disease Control and

Prevention—Vaccine for Children Program, GSA

Property Management facilitated the donation of

approximately four million doses, valued at more than

$28 million, of flu vaccine to states and municipal

health departments. The donation was distributed

throughout 26 states. 
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 58

FSS Performance By GSA-Wide Goal 

GSA-WIDE GOAL 1: PROVIDE BEST VALUE FOR CUSTOMER AGENCIES AND TAXPAYERS

PERFORMANCE GOAL RESULT

Maintain 27.5% or better discount from manufacturer’s invoice price. Met 

Maintain the gap between GSA Fleet rates and commercial Met

rates at 27% or more.

DESCRIPTION OF THE MEASURE: The average percentage savings is calculated by the weighted average discount from

vehicle manufacturer’s invoice prices for GSA’s seven top-selling vehicle types. Business projections show that 

20 percent discount below invoice continues to be a reasonable long-term outcome goal for this business line.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was met. GSA Automotive tracks the discount from invoice

for the top seven selling vehicles as a measure of internal efficiency to ensure that FSS receives the maximum discount

from the manufacturer’s invoice price. FSS has achieved a discount of 20 percent or more since 1999. Business

projections show that 20 percent continues to be a reasonable annual target for this business line even though FSS set

a more ambitious target of 27.5 percent in FY 2005. This translates to extremely effective pricing on the vehicles

purchased for customer agencies, which keeps monthly and mileage charges well under commercial lease rates. 

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

27.3% 26.3% 33.1% >27.5% 40.6%

PERFORMANCE GOAL

Maintain 27.5 percent or better discount from manufacturer’s invoice price.

MEASURE 

Percentage discount from invoice price.

FSS

GSA Auctions® offers the general public the

opportunity to bid electronically on a wide array of

Federal assets. At year-end FY 2005 89.97 percent of

GSA’s public sales of personal property were done online via GSA Auctions®, up from zero just four years

ago. GSA Auctions® has been a key tool in providing

national exposure/access to Federal sales and in

reducing the time it takes GSA and Federal agencies to

sell property. GSA Auctions® has been chosen as the

interim platform for Federal Asset Sales until

evaluation of best alternatives is complete.
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 59

DESCRIPTION OF THE MEASURE: GSA Fleet annual rates are compared to the private sector companies on schedule with

the GSA Automotive Division. Market conditions and business projections indicate that leasing vehicles at a savings of

20 percent or better over the private sector rates continues to be a reasonable long-term goal for GSA Fleet.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was met. GSA Fleet has limited rate increases for customer

agencies and controlled costs through numerous initiatives. Performance towards program goals is tracked through

several performance indicators. GSA Fleet maintains low rates due to vigilant monitoring of operation expenses, such

as maintenance and repair costs, and overall reduction in program overhead through the consolidation of selected Fleet

Management Center (FMC) locations. GSA Fleet continues to reduce costs while maintaining superior, world-class levels

of customer satisfaction and retention, resulting in significant savings and benefits over the private sector. 

PERFORMANCE GOAL RESULT

GSA-WIDE GOAL 2: ACHIEVE RESPONSIBLE ASSET MANAGEMENT

PERFORMANCE GOAL RESULT

Reduce the mark-up for GSA stocked items from 45.9% to Met

43.5%—towards the goal of 33.5%.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

48.5% 45.9% 42.8% 43.5% 42.9%

PERFORMANCE GOAL

Reduce the mark-up for GSA stocked items from 45.9 percent to 43.5 percent—towards the goal of 33.5 percent.

MEASURE 

Supply mark-up for stocked items (percent).

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

N/A 36.9% 31.7% >27% 43.1%

PERFORMANCE GOAL

Maintain the gap between GSA Fleet rates and commercial rates at 27 percent or more.

MEASURE 

Percentage GSA fleet leasing rates below commercial rates on the GSA Vehicle Leasing Schedule.

FSS
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 60

FSS

DESCRIPTION OF THE MEASURE: Mark-up is the additional fee that GSA Global Supply charges customers to cover its

costs and is reflected in this measure as the average percentage. Stocked items are stored in GSA’s Supply Distribution

Centers. The long-term goal is to reduce mark-up from 48.5 percent in FY 2002 to 33.5 percent in FY 2010. This

measure tracks the progress towards achieving this goal. 

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was met. GSA Global Supply performed successfully and

achieved this target in FY 2005. The primary reason that this target was achieved is attributed to a 1.0 percent reduction

that was implemented October 2004. It was estimated that the reduction would result in a savings of $2.9 million to

the taxpayer for the FY 2005. This reduction represents continued progress towards lowering the overall blended markup, which will become the measure beginning in FY 2006. 

GSA provided disaster support, in the form of temporary housing , after the 2004 hurricanes which caused

widespread devastation from the Florida Keys to the Mississippi Gulf Coast.
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 61

FSS

GSA-WIDE GOAL 3: OPERATE EFFICIENTLY AND EFFECTIVELY

PERFORMANCE GOAL RESULT

Reduce the time associated with processing contract offers Not Met

to 92 days by FY 2005.

Decrease the time it takes to complete disposal action for Met

excess property from 83 days to 77 days by FY 2005.

DESCRIPTION OF THE MEASURE: Cycle time is measured in days, from the time of receipt of contract offer to execution.

The data source is the Offer Review System, an acquisition tracking system that is standard to all acquisition centers. 

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was not met. As part of the FY 2005 review of the target setting

process, FSS reweighted FY 2004 data and created new cycle time performance baselines for each Acquisition Center.

The new baselines were established by multiplying the number of offers processed by each Acquisition Center by the

average days required by each Acquisition Center to process offers, totaling those numbers and dividing them by the

total number of actions processed by all Acquisition Centers. Once the figures were adjusted, nationwide and individual

Acquisition Center targets were projected for FY 2005. Using the new approach, the target would have been 98 days. 

e-Offer and e-Mod, which are now being implemented, provide a means for the vendor community to submit proposals

and contract modifications electronically. These electronic tools will improve GSA’s contracting processes and decrease

cycle times to process offers and modifications. These systems are new but their use is increasing as they become fully

implemented and vendors become aware of them and are trained on use of the systems.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

110 92 87 92 98

PERFORMANCE GOAL

Reduce the time associated with processing contract offers to 92 days by FY 2005.

MEASURE 

Cycle time to process offers (days).
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 62

FSS

DESCRIPTION OF THE MEASURE: The time from receipt of excess to disposition. This data is retrieved from GSAXcess®

and Sales Automation System (SASy) Reports.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was met. Customers’ main concerns are with the timeliness

of disposal actions. Holding inventory costs money, and agencies are concerned with the length of time it takes for

property to complete the disposal process. Personal Property provides an electronic system that moves property

seamlessly through the entire disposal process from mandated utilization and donation (U & D) reporting to sales

payment and reimbursement of funds. This reduces inventory holding time, cost, and administrative burden for

customers. 

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

99 83 72 77 56

PERFORMANCE GOAL

Decrease the time it takes to complete disposal action for excess property from 83 days to 77 days by FY 2005.

MEASURE 

Cycle time for disposal process (days).
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 63

FTS

FEDERAL TECHNOLOGY SERVICE

Throughout FY 2005, FTS Network Services has focused

its efforts on delivering the same value in services to its

customers today, while pressing forward with competitive

acquisitions to better meet the customer needs of

tomorrow. Some of the actions taken in FY 2005 are

listed below.

FTS Network Services is currently working on the

Networx acquisition, consisting of Networx Universal

and Networx Enterprise. In May 2005, FTS released

the Requests for Proposal with contract awards

scheduled for late FY 2006. This program will

continue support to customers of the expiring FTS

2001 contracts, offering them an expanded portfolio of

solutions related to quality voice, data, video, and

emerging services. This program recognizes diverse

customer buying trends and will use that knowledge

to better fulfill customer requirements.

In the regions, Network Services is actively competing

local requirements and preparing to transition

requirements to the new Networx contracts, where

appropriate, depending on customer agency

requirements, milestones, and funding.

The Federal Technology Service (FTS) provides

telecommunications, professional services, and

information technology (IT) products and services

to Federal agencies in support of their missions to the

public. FTS adds value by providing technical, assisted

acquisition, life-cycle project management, and other technology related support to Federal agencies. These services

save taxpayer dollars by making it possible for customer

agencies to devote more of their resources directly to

agency missions and programs and avoid doing costly,

time-consuming technology acquisitions.

PERFORMANCE HIGHLIGHTS

FTS has completed two PART Reviews of its major

programs: (1) Regional IT Solutions, and (2) National IT

Solutions. Both programs are rated by OMB as “Results Not

Demonstrated.” In FY 2006, FTS’s PART program structure

will be reviewed based on the Federal Acquisition Service

(FAS) reorganization.

The paragraphs below summarize FY 2005 FTS major

performance results by business-line activity.

NETWORK SERVICES: FTS Network Services provides

low cost/high quality voice, data, and video services and

expert acquisition management support to Federal

agencies from its headquarters office and 11 regional

offices. Customers come to FTS for access to a complete

telecommunications service portfolio ranging from

commodity equipment for their premises to value-added

enterprise networking solutions, which can be provided

to customers through a single national point of contact.

FTS Network Services delivered services valued at more

than $1.5 billion in FY 2005 to users at 135 Federal

agencies and entities at 15,000 locations in more than 190

countries around the globe. 
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 64

FTS

The foundation for future success rests on FTS’s proven

ability to develop and deliver complex, customized

solutions to meet customer agency needs by leveraging its

expertise and acquisition vehicles that cover the full

spectrum of network services, infrastructure, and

equipment. In particular, FTS’s value is based on: 

Strong knowledge of the telecommunications industry,

its regulatory environment, and the technical skills

needed to craft interoperable, secure, end-to-end

solutions.

Strong, long-term customer relationships and extensive

knowledge of customers’ current environments,

including proximity to the customer base where

needed—nationally and locally.

Safe harbor solutions for customers that comply with

applicable laws, regulations, and statutes.

FTS Network Services will leverage the strengths of its

past success and new acquisitions moving into FY 2006

and take advantage of the new synergies resulting from

the establishment of the FAS.

INFORMATION TECHNOLOGY (IT) SOLUTIONS: The IT

Solutions program provides assisted acquisition services

to help Federal agencies acquire and manage IT products

and services, primarily through the use of contracts with

industry partners. IT Solutions combined with

Professional Services in the middle of FY 2005 to enhance

the portfolio of assisted services. IT Solutions provides

these assisted services through 11 regional and national

client support centers. 

IT Solutions uses its unique cross-government vantage

point and expertise to develop, oversee, and maintain a

government-wide enterprise software licensing agreement

initiative known as SmartBUY. Program management of

the SmartBUY program was established in IT Solutions in

April 2004 to leverage the buying power of the Federal

government and provide government-wide software

licensing through enterprise agreements that provide best

prices, terms, and conditions for commercial software.

The aggregation of software requirements across the

government will help to achieve savings through cost

avoidance totaling millions of dollars annually. OMB is

sponsoring this new program and has directed agencies

to use this program when purchasing specified software.

During FY 2005, the SmartBUY program established

government-wide agreements for antivirus software as

well as for Oracle products and ProSight enterprise portfolio management software. 

In an agreement established April 2005, Oracle

discounted its price on GSA’s Federal Supply Services

(FSS) schedule by as much as 84 percent for the database

product and as much as 16 percent for support and maintenance services. Agencies also can get up to 45 percent

off other Oracle products, such as enterprise resource

planning and Customer Relationship Management (CRM)

applications. 

In an agreement established in April 2005 with ProSight

for enterprise portfolio management software, the

discount negotiated for ProSight software is eight to 39

percent less than the GSA FSS Schedule prices.

During FY 2005, FTS continued to implement initiatives to

improve the quality of its acquisition services, including

nationwide standards, policies, and procedures. FTS has

also established better review processes to ensure appropriate management controls.

PROFESSIONAL SERVICES: The Office of Professional

Services (PS) was combined with IT Solutions in the

middle of FY 2005. This joining of IT Solutions and

Professional Services is intended to enhance the assisted

acquisition services provided to Federal agencies and

allow FTS to better assist customers in buying services

available on eight GSA Schedules managed through two

Acquisition Centers in the FSS.

FTS continues to build new partnerships among the

existing business lines with the creation of a single IT and

PS Office as well as the creation of the FAS by combining

FTS and FSS. FAS will give FTS more flexibility in serving

customers and will allow it to gain cost efficiencies that

will be passed along to Federal clients and taxpayers.
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 65

FTS

FTS Performance By GSA-Wide Goal 

GSA-WIDE GOAL 1: PROVIDE BEST VALUE FOR CUSTOMER AGENCIES AND TAXPAYERS

PERFORMANCE GOAL RESULT

Provide substantial savings to customer agencies. Not Met

DESCRIPTION OF THE MEASURE: This measure indicates the savings in millions of dollars the government realizes by

utilizing FTS Network Services offerings in lieu of commercial industry services. To gauge its performance, FTS

computes the estimated cost savings between the comparable commercial price of services and the corresponding FTS

2001 price on a quarterly basis. The estimated savings are defined as the cost the government would have paid

commercially to obtain the same services offered by FTS programs.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: This target was not met. FTS had an FY 2005 savings target of 

$780 million. The actual performance this year was a lower, but still substantial, estimated savings of $633 million. The

variance from FTS target reflects four factors: (1) changes in the nature of customer expenditures from the plan, 

(2) improved benchmark pricing data, (3) adjustments made to FTS estimating methodology to improve the accuracy,

and (4) the integrity of FTS savings estimates. Specifically, FTS customers this year continued the emerging trend of

spending fewer dollars (in relative terms of total expenditures) on commodity services like switched services and

spending more dollars on customized, valued-added services with lower comparative savings compared to managed

network solutions. In addition, FTS strengthened its benchmark pricing and approach by using improved third party

pricing data for select services, broadened the range of possible commercial unit prices considered in its benchmarks,

and adjusted the treatment of some offered services based on a better understanding of the underlying service attributes.

Further, FTS improved the basic estimating method used to compute savings to its customers.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

$32.8M $574M $705M $780M $633M

PERFORMANCE GOAL

Provide substantial savings to customer agencies.

MEASURE 

Savings provided to customers.
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 66

FTS

GSA-WIDE GOAL 3: OPERATE EFFICIENTLY AND EFFECTIVELY

PERFORMANCE GOAL RESULT

Improve performance against business performance metrics, Not Met

including timeliness, cost-effectiveness, and efficiency to verify 

best value and effective acquisition management are achieved. 

DESCRIPTION OF THE MEASURE: To improve customer communications concerning task order requirements and service

expectation, Client Support Centers will track and report actual task order award dates for services and commodities

against task order award dates that are negotiated with customers. 

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was not met. Additional internal management control

processes and procedures implemented during the past year have resulted in longer than anticipated acquisition

processing timeframes and negotiated award dates that were not met as planned.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

93% 90% 88% > 94% 85%

PERFORMANCE GOAL

Improve performance against business performance metrics, including timeliness, cost-effectiveness, and efficiency

to verify best value and effective acquisition management are achieved

MEASURE 

Percentage of negotiated award dates for services and commodities that are met or bettered.
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 67

FTS

GSA-WIDE GOAL 6: CARRY OUT SOCIAL, ENVIRONMENTAL, 

AND OTHER RESPONSIBILITIES AS A FEDERAL AGENCY

PERFORMANCE GOAL RESULT

Provide quality IT solutions services through appropriate consistency Not Met

in the acquisition management process from pre-award through closeout.

Manage acquisitions to ensure industry provides solutions Met

that meet client agencies' mission needs. 

DESCRIPTION OF THE MEASURE: As an executive agent, GSA is authorized to award and administer task and delivery

orders against GWACs on behalf of other Federal agencies. This performance metric measures the competition fostered

by placing orders against these contracts. It tracks the percentage of task orders where all contract holders were

afforded a fair opportunity to be considered for the award. 

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was not met. It is expected that a small percentage of task

orders will require the use of authorized exceptions to meet customer needs. The sustained high level of task orders

subject to fair opportunity during the past two years is the result of training on GWAC ordering procedures and

continued management emphasis on limiting the use of exceptions to the process.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

N/A 86% 96% >95% 93%

PERFORMANCE GOAL

Provide quality IT solutions services through appropriate consistency in the acquisition management process from

pre-award through closeout.

MEASURE 

Percentage of Government Wide Acquisition Contract (GWAC) task and delivery orders subject to the fair 

opportunity process.
DESCRIPTION OF THE MEASURE: Clients obtain best value solutions through performance-based contracting, which

allows the client to define intended objective(s) rather than developing specification requirements. In addition,

performance-based contracting uses positive and negative incentives to ensure timely and cost-effective delivery of

solutions. (This measure reflects the activity of the Regional Telecommunication Services program.)

DISCUSSION OF FY 2005 TARGET VS. RESULTS: Regional Telecommunications has met the FY 2005 target for this goal.

Throughout FY 2005, the regional offices revised policies and educated customers on the importance of using

performance based SOWs for task orders and acquisitions. This resulted in a better than expected use of performancebased SOWs.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

N/A N/A 47% 40% 72%

PERFORMANCE GOAL

Manage acquisitions to ensure industry provides solutions that meet client agencies' mission needs.

MEASURE 

Percentage of dollar value of eligible service orders awarded with performance-based Statements of Work (SOW).

P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT

FTS

68
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 69

OCSC

OFFICE OF C ITI ZEN SERVICES AND COMMUNICATIONS

The Office of Citizen Services and Communications

(OCSC) was created to be the nation’s focal point

for information and services offered by the

Federal government. The primary goal of OCSC is to find

new ways for citizens, businesses, other governments,

and the media to easily obtain information and services

from the government on the Web, via e-mail, in print, by

fax, and over the telephone. OCSC interacts with the

media, Federal agencies, the general pubic, and with GSA

internal audiences to provide information on the activities

of GSA and its associatess.

PERFORMANCE HIGHLIGHTS

1. Successfully transitioned to a new vendor 

for the National Contact Center.

2. Issued six task orders along with two task

modifications under FirstContact.

3. Signed working agreements with 36 agencies

regarding e-government initiatives.

4. Provided 24 hours a day, seven day as week 

support for hurricane relief efforts. 
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 70

GSA-WIDE GOAL 1: PROVIDE BEST VALUE FOR CUSTOMER AGENCIES AND TAXPAYERS

PERFORMANCE GOAL RESULT

Help the Federal government become more citizen-centric by Not Met

increasing the magnitude, quality, and outreach of Federal 

information via various channels and enable Federal agencies to 

become more citizen-centric by providing answers to citizens that 

are timely, accurate, and responsive.

DESCRIPTION OF THE MEASURE: USA Services operates a variety of channels to provide citizens with Federal

information. These channels include the FirstGov.gov Web site, several other Web sites (including pueblo.gsa.gov,

kids.gov, consumeraction.gov, etc.), the National Contact Center, and a publication distribution facility in Pueblo, CO.

Additionally, USA Services provides a variety of agencies with reimbursable services which directly assist them in

meeting the information needs of citizens. The sum of all of these citizen touch points is reported as a measure of

program performance.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: The target was not met. This was primarily due to a drop in the number

of Federal agencies using the FirstGov search index to provide search on agency Web sites. When FirstGov search

launched, it established a search affiliate program that allowed Federal agencies to filter the FirstGov index as a way of

providing search on agency Web sites. This service has been available to agencies at no cost. Given the high cost of

enterprise search engines, FirstGov provided an easy and cost-effective way for agencies to implement site search

capabilities. As a result, the search affiliate program received a high number of public contacts.

Over the past few years, the cost of enterprise search has declined dramatically. At the same time, search requirements

for individual agencies became increasingly sophisticated, extending beyond what a simple filter of the FirstGov index

could provide. As a result, many agencies found they could afford to buy their own enterprise search service tailored

to their unique requirements. The result has been very positive for agencies. However, with fewer agencies leveraging

the FirstGov index, FirstGov has seen far fewer search queries. As a result in the decline of public contacts future

targets will be adjusted. 

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

59.1M 209.7M 241.9M 250.3 M 230.5 M

PERFORMANCE GOAL

Help the Federal government become more citizen-centric by increasing the magnitude, quality, and outreach of

Federal information via various channels and enable Federal agencies to become more citizen-centric by providing

answers to citizens that are timely, accurate, and responsive.

MEASURE 

Total number of multi-channel contacts with the public (citizen, business, and government) per year.

OCSC
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 71

OFFICE OF THE CHIEF PEOPLE OFFICER

The Office of the Chief People Officer (OCPO)

contributes to GSA's business success by providing

human capital management strategies, policies,

advice, information, services, and solutions that are

consistent with merit system principles. The OCPO is

integral to GSA's business success and was reorganized in

December 2003 to realign OCPO’s organizational resources

to provide greater support to developing and implementing

the agency’s Human Capital strategy, and providing human

resources (HR) advisor support to GSA competitive

sourcing activities. In addition, in July 2005, additional

restructuring was completed to further clarify the roles and

improve service delivery within the OCPO. Also, during

this time, the Office of Human Resources Services instituted

a Business Process Review (BPR) of its staffing acquisition

function and will be reviewing how implementation of the

BPR supports the President’s Management Agenda (PMA).

Organizationally, the OCPO is divided into five major

components, the Office of Human Capital Management, the

Office of Human Resources Services, the Office of

Information Management, the Office of Executive

Resources, and the Office of Program Performance. In

addition, the OCPO provides guidance and policy direction

to GSA’s regional HR offices in the following locations:

Boston, MA

New York, NY

Philadelphia, PA

Atlanta, GA

Chicago, IL

Kansas City, MO

Ft. Worth, TX

San Francisco, CA

Washington, DC.

PERFORMANCE HIGHLIGHTS

The paragraphs below summarize the FY 2005 major

performance results of the OCPO by program.

HUMAN CAPITAL MANAGEMENT: At the strategic level, the

OCPO continued to work closely with its largest internal

customers and within the OCPO itself to implement organization-specific human capital strategies. This “deep dive”

into the human capital needs of each organization focused

on the capabilities needed to achieve business goals, the

“maturity” of those capabilities in their existing workforces,

and specific strategies to transform each workforce from

one stage to another. Strategies included assessing and

enhancing the skills of associates, hiring new talent, organiOCPO
zational realignment, succession planning, and competitive

sourcing. In support of realignment and competitive

sourcing initiatives, the OCPO continued to assist its

customers in the utilization of workforce-shaping tools such

as Voluntary Separation Incentive Payment and Voluntary

Early Retirement Authority.

At the policy and program level, the OCPO continued to

revise GSA’s associate performance management and recognition policies to more closely align with and reinforce the

Agency’s business goals and strategies. The new Associate

Performance Planning and Appraisal System (APPAS) is a

significant departure from the previous “pass/fail” system; it

is designed to make meaningful distinctions among levels

of performance based on organizational and individual

objectives. Classroom training was provided to all

managers and supervisors.

HUMAN RESOURCES SERVICES: Measuring OCPO success

across key HR services was a major effort during the fiscal

year. The goal of this process was to measure organizational efficiency and to align the measures to Agency

strategic goals. It is believed that the development of these

measures will facilitate appropriate human capital decisions,

demonstrate results, support budget decisions, and drive

continuous improvement. The following key HR services

were identified with implementation of the measures to

follow in FY 2006.

1. Staff Acquisition 

2. Performance Management

3. Compensation Management 

4. Employee Development 

5. Employee Relations 

6. Labor Relations 

7. Benefits Management 

8. Separation Management

9. Organization and Position Management (Classification) 

BUSINESS PROCESS IMPROVEMENTS: At the same time that

OCPO was looking outward towards its customers, it also

took an intense look inward at its own capabilities for

achieving future success. In addition to implementing its

human capital strategy, it began a multi-year effort to

examine, map, and reengineer its own business processes,

with an eye towards greater efficiency and standardization.

This effort was linked to the PMA E-Gov initiative “HR Line

of Business” led by the Office of Personal Management

(OPM) and the Office of Management and Budget (OMB).

Business process reengineering will help position the

OCPO to continue its successful leadership of GSA human

capital management. During FY 2005, the focus for the

OCPO was on the staffing acquisition process. As a result

of this effort, the following steps are to be implemented

during FY 2006.

Establish the GSA hiring manager as the process

owner

Add two strategic process steps - workforce planning

and strategy development 

Streamline remaining process steps to eliminate 

non-value added activities 

Implement the prototype to prove the concept of the

TO BE model and train the OCPO associates in the

new process

Standardize processes across GSA.

P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 72

OCPO
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 73

OCPO

OCPO Performance By GSA-Wide Goal 

GSA-WIDE GOAL 5: MAINTAIN A WORLD-CLASS WORKFORCE AND WORLD-CLASS WORKPLACE

PERFORMANCE GOAL RESULT

Enhance training, recruitment, and placement/outplacement Not Met

programs to help GSA develop/acquire the needed skills/talents 

identified in organization-specific human capital strategies. 

Specific focus will be placed on improved diversity of workforce

training/learning.

DESCRIPTION OF THE MEASURE: The Gallup Q12 Survey of Associate Engagement is administered annually to all GSA

associates. The grand mean score measures overall engagement or productivity at each organizational level, and

discriminates top-performing workplaces from average and low-performing ones. A higher grand mean score is an

indicator of a higher-performing organization. Each of the Q12 items is actionable. Tangible steps can be taken to

increase scores. This is one of the most important qualities of the Q12 program. 

DISCUSSION OF FY 2004 TARGET VS. RESULTS: The target was not met. GSA implemented the annual Q12 Survey of

Associate Engagement Agency-wide in FY 2002. Over time scores have continued to increase from FY 2002 through 

FY 2004. Although GSA’s grand mean score decreased by .04 during FY 2005, the Gallup Organization has informed

the OCPO that this drop is not a statistically significant decline. Furthermore, GSA’s scores have consistently rated at

or above the top of scores reported by other Federal agencies. Based on the creation of the Federal Acquisition Services

(FAS) and other internal re-alignment of Agency organizations, GSA’s goal for FY 2006 will be to maintain the 3.85 level

for the next administration of the survey. During this transition period, the Agency will continue to promote consistent

and effective performance across GSA by employing the following strategies:

Pursue a combined top-down and bottom-up strategy that will marry senior leadership commitment to drive

associate engagement within each team, with training and support throughout GSA at the work-group level.

Identify common issues and improvement opportunities across GSA for increased engagement and improved

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

3.76 3.83 3.89 3.94 3.85

PERFORMANCE GOAL

Enhance training, recruitment, and placement/outplacement programs to help GSA develop/acquire the needed

skills/talents identified in organization-specific human capital strategies. Specific focus will be placed on improved

diversity of workforce training/learning.

MEASURE 

Gallup Q12 Grand Mean Score.
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 74

OCPO

performance through leveraging the efforts of individual work teams. 

Support frequent sharing of best practices by studying OCPO best scoring organizations.

Further investigate the link between improving Q12 scores and performance outcomes. 

Provide support to OCPO Q12 trainers and ensure that all managers are trained. 
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 75

OCPO

The Office of the Chief Financial Officer (OCFO)

is responsible for financial management within

GSA. The OCFO develops overall Agency

policies and procedures for budget administration,

planning and performance measurement, financial

reporting, and financial management systems. Some of

the most important policies include those for cash and

credit management. An overall summary of the

accomplishments of the OCFO is presented in the

OCFO’s letter.

OFFICE OF THE CHIEF FINANC IAL OFFICER

OCFO
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 76

OCFO

OCFO Performance By GSA-Wide Goal 

GSA-WIDE GOAL 4: ENSURE FINANCIAL ACCOUNTABILITY

PERFORMANCE GOAL RESULT

Increase the percentage of vendor invoices received Met

by Electronic Data Interchange (EDI)through the Internet.

Increase the percentage of vendor payments made by electronic media Not Met

such as Electronic Funds Transfer (EFT) and purchase cards.

DESCRIPTION OF THE MEASURE: By placing clauses in GSA contracts and orders the OCFO is encouraging electronic

invoices via the Internet. Use of EDI is also encouraged by continued marketing to vendors.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: Target was met. At year-end, 64 percent of GSA’s invoices were received

electronically. The Customer Service Group has played a key role in FY 2005 in working with commercial vendors on

electronic invoicing. During FY 2005, a new Webvendor page was implemented to enhance the capabilities of

electronic invoicing for Greater Southwest Finance Center (GSFC) vendors. Customer Service served as the main point

of contact for vendors to assist them with the transition to the new Web page and to relay any issues or problems

identified with the implementation process to the Information Systems Group. Customer Service spent approximately

600 hours working with vendors to ensure that they fully understood the new process and that identified issues were

quickly resolved. 

GSA has continued to market Internet invoicing to vendors at conferences and GSA EXPO. They also inform vendors

of this option when they call OCFO offices. The OCFO continues to encourage Contracting Officers to make electronic

invoicing a requirement in new contracts.

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

38% 44% 56% 56% 64%

PERFORMANCE GOAL

Increase the percentage of vendor invoices received by Electronic Data Interchange (EDI) through the Internet.

MEASURE 

Percentage of vendor invoices received electronically by EDI through the Internet.
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 77

OCFO

DESCRIPTION OF THE MEASURE: Encourage use of EFT by emphasizing the use of purchase cards to procurement

officials when a purchase is less than $100,000.

DISCUSSION OF FY 2005 TARGET VS. RESULTS: Target was not met. During FY 2004 the OCFO surpassed its goal of 85

percent significantly, achieving 92 percent of its vendor payments paid electronically. Therefore the OCFO set an

ambitious goal of 95 percent for FY 2005 that was missed by a fraction of one percent. The OCFO continues to work

with vendors to sign up for EFT payments. The Payments Division proactively worked with the service's Regional

offices to implement the new Central Contractor Registration (CCR) policy and to identify existing purchase orders that

were not in compliance with the CCR guidelines. In the process, they identified approximately 14,000 purchase orders

that did not contain valid Data Universal Numbering System (DUNS) information and provided the information to the

Regional offices. The Payments Division continues to work closely with the services to resolve any CCR discrepancies

and to provide guidance and direction on the implementation of the new policy. This has allowed vendors to be

reimbursed via EFT and reduced the overall costs of disbursement processing. Initiative has been taken to inform both

the Service office associates and vendors regarding the requirements for vendors to register in the CCR. Upon receipt

of a request to establish new vendor numbers, if the vendor’s banking information is not included in the request, it is

returned it along with a letter explaining the CCR requirements. 

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL

79% 88% 92% 95% 94%

PERFORMANCE GOAL

Increase the percentage of vendor payments made by electronic media such as Electronic Funds Transfer (EFT) and

purchase cards.

MEASURE 

Percent of electronic invoices paid by electronic means such as EFT and purchase cards.
P ERFORMANCE S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 78
Financial Section
CFO MISSION STATEMENT

Provide world-class financial 

management services, professional 

guidance, and innovative solutions 

to our customers.
I

n pursuit of our commitment to

transparency and accountability, I am

presenting the General Services

Administration’s fiscal year (FY) 2005

financial statements. In the Office of the

Chief Financial Officer (OCFO), there have

been substantial gains in achieving progress

towards goals and objectives, in particular in

policy, financial analysis, performance

budgeting, financial systems life cycle

management, and management control

processes and procedures. These achievements reflect the dedication and hard work of GSA’s

financial community. 

At the same time, I am disappointed not to have reached a

“clean” opinion on our FY 2005 financial statements. The

Federal Buildings Fund (FBF), the General Supply Fund

(GSF) and the Information Technology Fund (ITF) all

received unqualified (clean) opinions on their Proprietary

Statements (Balance Sheet, Statement of Net Costs, and

Change in Net Position). The FBF also received an unqualified opinion on their Budgetary Statements (Statement of

Budgetary Resources and Statement of Financing). However,

the ITF and the GSF received a disclaimer of opinion on the

Budgetary Statements which caused the GSA Consolidated

Statements to receive a disclaimer of opinion also. 

Throughout FY 2004 and FY 2005, GSA management significantly increased its attention and control over our

customers’ authority (i.e., unfilled customer orders).

Nonetheless, our controls were not sufficient to provide

confidence that these budgetary accounts were correct.

Management was able to take appropriate steps to identify

the extent of the issues at the end of FY 2005. However,

we could not accurately adjust our FY 2004 statements to

reflect the issues noted in FY 2005, because of system limitations and other constraints.

This was primarily due to Information Technology (IT)

Service associates not properly closing out completed

projects with residual balances or returning unused budgetary authority. Because the Federal

Technology Service (FTS) maintains the

Professional Services business unit, which

is reported under the GSF, the GSF was

impacted with a disclaimer of opinion as

well. It is important to note that the

customer's budgetary authority behind

these issues is either expired or canceled

and is therefore no longer useable.

Additionally, our auditor elevated our 

FY 2004 reportable condition, GSA's budgetary reporting processes need improvement, to a material

weakness due to the issues noted above as well as issues

surrounding our budgetary accounting controls and

reporting processes. 

Except as indicated in the preceding paragraphs and reiterated in the Management Assurances section of the

Management’s Discussion and Analysis and in the

Independent Auditor’s Report, we can provide reasonable

assurance that the objectives of Federal Managers Financial

Integrity Act, Sections 2 and 4, and the Federal Financial

Management Improvement Act have been achieved. This

demonstrates our integrity and commitment to identify and

address management challenges. Because of the significant

effort at the end of FY 2005 to quantify the issues noted

above as well as the aggressive corrective actions we

already have planned, we are optimistic we can again attain

a “clean” opinion for FY 2006. 

The OCFO directly supports GSA’s overall mission of

helping Federal agencies better serve the public. On the

next page, you will find highlights of our performance

improvement initiatives. 

Kathleen M. Turco

Chief Financial Officer

November 15, 2005

F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 81

Letter from the Chief Financial Officer

Kathleen Turco
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 82

The GSA OCFO continues to provide full-servicecorporate financial management for all of GSA and

more than 40 external customers. OCFO directly supports

the GSA mission of helping Federal agencies better serve

the public by offering, at best value, superior workplaces,

expert solutions, acquisition services, and management

policies by providing transparent financial management

services so the three major business lines can focus on

delivery of their core goods and services. During FY 2005,

the OCFO associates took on additional management

challenges and changes to improve our performance and

accountability. These include:

FINANCIAL MANAGEMENT LINE OF BUSINESS 

GSA OCFO was selected by OMB to operate as a FM LOB

Center of Excellence (COE) service provider. This initiative

takes a shared services approach to reduce redundant

financial system investments and improve financial business

processes across the Federal Government. This will

consolidate Information Technology (IT) platforms and

standardize IT configurations as well as business processes.

The GSA OCFO must demonstrate that it is a best value

service provider and “competes” in the market with other

Federal agencies and the private sector to attain and retain

customers. The OCFO has been continuing to define its

COE business model, service delivery offerings, and

corresponding organizational structure to support the

business model. 

PERFORMANCE MANAGEMENT PROCESS

GSA has completed the second full cycle of the

Performance Management Process (PMP). Analysis of

customer and taxpayer requirements are achieved through

the Performance Management Process (PMP cycle).

Performance goals based upon those requirements were

arranged along with the development of action plans and

Office of the Chief Financial Officer 

Accomplishments at a Glance

During FY 2005, the OCFO associates took on additional management challenges and

changes to improve their performance and accountability.
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 83

the allocation of resources. This detailed financial,

budgetary, and performance data provides managers with a

solid foundation on which to base day-to-day management

decisions. The continual PMP cycle unites the GSA Strategic

Plan, the PMA President’s Management Agenda, the

Program Assessment Rating Tool (PART), Business

Line/Program Area Performance Goals and Measures and

other management tools. 

FINANCIAL MANAGEMENT SYSTEMS

During FY 2005, significant progress was achieved by GSA

in continuing to develop and implement its planned, “to be”

financial systems framework. This framework is designed

to fully integrate and streamline all of GSA’s financial system

applications in accordance with applicable systems requirements, Federal accounting standards, and other related

mandates.

Considerable progress was achieved related to maintaining

and expanding the use of GSA’s core accounting system,

Pegasys, which is a COTS (commercial off-the-shelf) system

solution that integrates several of GSA’s financial accounting

applications; processes more than 40 million transactions per

year; and complies fully with Federal accounting standards

and external financial reporting requirements. Pegasys also

holds the most current certification concerning its functional

design and performance capabilities. In addition to serving

as GSA’s current financial accounting system of record,

Pegasys currently provides GSA with the functionality to

meet new requirements to interface with the Central

Contractor Registration component of the President’s integrated acquisition environment e-Gov initiative as well as

support the ongoing e-Payroll and e-Travel system initiatives. In keeping with plans to upgrade our core accounting

system biennially, during FY 2006 Pegasys is scheduled to

be upgraded to an html format. In addition, e-Travel,

Vendor Self-Service and cost allocation functionality will be

added to GSA’s financial management system capabilities. 

OCFO plays a crucial role in the executive direction on

financial systems life cycle management for GSA Pegasys

(payable, receivables, financial reporting and e-payroll),

including implementation e-Travel services application, data

warehouse management, automated labor forecasting

models to project accurate cost, labor distribution model,

and Activity Based Costing (ABC). Pegasys is GSA's official

accounting system of record. 

The Central Contractor Registration (CCR) Migration Project

was developed to be the sole-source provider of vendor

information for all of GSA. In direct support was also the

CCR Connector Project which is an interface tool that

connects the CCR with Pegasys, GSA’s financial management

system. It is a web-based application that populates CCR

data, and serves as the government-wide central repository

to store and maintain data for vendors that contract with the

Federal Government. Any vendor awarded a FAR-based

contract must register in CCR and renew yearly. 

MANAGEMENT CONTROLS 

Building upon GSA's efforts in FY 2004, GSA significantly

improved the Assurance Statement process in FY 2005. In

FY 2005, GSA developed and launched the agency's first

web-based Assurance Statement questionnaire. The questionnaire consolidated various survey tools into one internal

control questionnaire, helping pull together a varied

mixture of surveys conducted throughout the year.

The new Assurance Statement included questions based on

OMB and GAO internal control standards, a section on

Federal Information Security Management Act (FISMA)

related questions, and a supplemental questionnaire to

assess compliance of GSA’s financial management systems

with the Federal Financial Management Improvement Act

(FFMIA). In addition, the questionnaire allowed services

such as FTS and PBS to ask specific, program-related

internal control questions to the individual associates.

GSA plans to fully implement provisions of the new OMB

Circular A-123 by introducing risk assessments and testing

as key components of the A-123 internal control evaluations

currently conducted on a regular basis at GSA. GSA also

plans to completely revise its internal control handbook and

develop an integrated database for tracking and reporting
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 84

A-123 internal control evaluations. Finally, GSA has developed procedures to review and test internal controls related

to financial management in preparation of issuing the 

FY 2006 Assurance Statement on Internal Control for

Financial Reporting.

PAYROLL AND STATEMENT ON AUDITING 

STANDARDS NO. 70 (SAS70)

SAS70 is an internationally recognized auditing standard

and an in-depth audit of a service organization's control

activities, which generally include controls over information

technology and related processes. GSA provides payroll

and financial management services and underwent two

SAS70 efforts in FY 2005. The SAS70 efforts for both reports

were successful as evidence by a “clean” opinion in both.

The SAS70 completion on time required significant effort

and provided documentation that controls are in place and

are functioning by pulling hundreds of documents for the

auditor’s review. 

The Kansas City (KC) Financial Systems Division and the

National Payroll Center (NPC) worked closely as a team on

the development of the Report on Controls document for

the Payroll, Accounting and Reporting system Information

Technology Controls as well as the NPC Operational

controls. This document was the basis used in the audit.

The NPC reviewed the initial draft control document and

worked in conjunction with the KC Financial Systems

Division (HFSD) SAS70 Team to assess whether the controls

were valid for our specific environment, ensure they could

be substantiated, and prepare the appropriate documentation to complete the report for the Deputy CFO and GSA’s

external auditors. Though both organizations have been

subject to several prior audits and reviews, this was the first

SAS70 audit to be conducted on the payroll system and the

payroll operations environment. 
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 85

November 15, 2005

MEMORANDUM FOR DAVID L. BIBB 

ACTING ADMINISTRATOR (A)

KATHLEEN M. TURCO

CHIEF FINANCIAL OFFICER (B)

FROM: BRIAN D. MILLER

INSPECTOR GENERAL (J) 

SUBJECT: Audit of the General Services Administration’s Fiscal Years 2005 and 2004 Financial Statements

statements of net cost and changes in net position of GSA,

the FBF, the GSF, and the ITF presented fairly, in all material

respects, the financial position of GSA, the GSF, and the ITF

at September 30, 2005 and 2004. 

Statements of Budgetary Resources and Financing

PwC issued an unqualified opinion on the statements of budgetary resources and financing for the FBF for Fiscal Years 2005

and 2004. However, PwC could not render an opinion on

the Fiscal Years 2005 and 2004 statements of budgetary

resources and financing for GSA, the ITF, and the GSF. 

New controls instituted by GSA management, as well as the

statistical sampling performed to establish year-end

balances, found that unfilled customer orders were not

closed out timely in the ITF. Management believes that

these errors may have also existed in unfilled customer

orders at the end of Fiscal Year 2004 and that these errors

may have been material. However, the amounts required

for adjusting Fiscal Year 2004 balances could not be readily

determined. In addition, a year-end analysis performed by

management determined that certain balances of unfilled

customer orders were erroneously recorded to the ITF that

should have been recorded to the GSF in both Fiscal Years

2005 and 2004. It is possible that material amounts were in

error between the GSF and ITF at the end of Fiscal Year

2004. As a result, PwC was unable to satisfy itself as to the

reported amounts related to unfilled customer orders and

undelivered orders reported by the ITF and GSF as of

September 30, 2004. 

This memorandum transmits PricewaterhouseCoopers

LLP’s (PwC) report on its Fiscal Years 2005 and 2004

Financial Statement Audit of the General Services

Administration (GSA), and the Office of Inspector General’s

(OIG) report on internal controls over performance

measures.

The Chief Financial Officers (CFO) Act of 1990 (P.L. 101-

576) requires GSA’s Inspector General or an independent

external auditor, as determined by the Inspector General, to

audit the Agency’s financial statements. Under a contract

monitored by the OIG, PwC, an independent public

accounting firm, performed the Fiscal Years 2005 and 2004

Financial Statement Audit of GSA. The contract required

that the audits be performed in accordance with

Government Auditing Standards issued by the Comptroller

General of the United States, and the Office of Management

and Budget’s (OMB) Bulletin No. 01-02, “Audit

Requirements for Federal Financial Statements,” as

amended.

RESULTS OF INDEPENDENT AUDIT

Balance Sheet and the Related Statements of Net Cost

and Changes in Net Position

PwC issued unqualified opinions on the consolidating

balance sheet of GSA, as well as the balance sheets of the

Federal Buildings Fund (FBF), General Supply Fund (GSF),

and the Information Technology Fund (ITF). In PwC’s

opinion, the balance sheets of GSA, the FBF, the GSF, and

the ITF, as of September 30, 2005 and 2004, and the related

Independent Auditor’s Report
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 86

Independent Auditor’s Report

Report on Internal Controls

In its report on internal controls over financial reporting,

PwC identified a material weakness concerning inadequate

controls over monitoring, accounting, and reporting of

agency budgetary transactions. During their testing of

internal controls, PwC noted insufficient ongoing compliance with control procedures instituted by management for

specific GSA budgetary accounts. Additionally, PwC noted

that as a result of insufficient monitoring controls over

budgetary accounting, GSA did not return spending

authority to customer agencies for expired obligations and

for those instances in which bona fide needs for unfilled

customer orders ceased to exist. Furthermore, PwC found

that GSA did not adequately record budgetary transactions

throughout the year, and the core financial system did not

capture detailed transaction level information for certain

material budgetary account balances. 

In addition to the material weakness, PwC identified five

reportable conditions concerning GSA’s need to (1)

improve development, implementation, and change

controls over GSA’s financial applications, (2) strengthen

application security controls, (3) improve controls over

transferring substantially complete construction in process

projects within the Public Buildings Service, (4) improve

contracting practices in the Federal Technology Service’s

Office of Information Technology Solutions, and (5)

improve reconciliation of intragovernmental balances. 

Compliance with Laws and Regulations

PwC also reported on two instances of non-compliance

with laws and regulations. The first instance involves

contracting practices, including three matters which may

constitute breaches of the Anti-deficiency Act (ADA) or the

Purpose Statute. In the second instance, PwC reported that

GSA’s financial management systems did not substantially

comply with the Federal financial management systems

requirements of the Federal Financial Management

Improvement Act (FFMIA).

OIG EVALUATION OF PWC’S AUDIT

PERFORMANCE

To ensure the quality of the audit work performed, we

conducted a review of PwC’s Fiscal Years 2005 and 2004

Financial Statement Audit of GSA. Specifically, we:

Reviewed and accepted PwC’s approach and planning

of the audit;

Ensured the qualifications and independence of the

auditors;

Monitored the progress of the audit at key points;

Reviewed and accepted PwC’s audit report; and

Performed other procedures we deemed necessary.

PwC is responsible for the attached auditor’s report dated

November 14, 2005, and the conclusions expressed therein.

We do not express an opinion on GSA’s financial statements

or internal controls or on whether GSA’s financial management systems substantially complied with FFMIA; or conclusions on compliance with laws and regulations. 

REPORT ON INTERNAL CONTROLS OVER

PERFORMANCE MEASURES

In accordance with OMB Bulletin No. 01-02, the OIG

performed the necessary audit procedures to obtain an

understanding of the design and operation of internal

controls over the reliability of data supporting the performance measures reported in the Management Discussion and

Analysis section of GSA’s Fiscal Year 2005 Annual

Performance and Accountability Report. Our review found

that these internal controls as designed by the Office of the

Chief Financial Officer (OCFO) are operating effectively. 

The Office of Inspector General appreciates the courtesies

and cooperation extended to PwC and to our audit staff

during the audit and review. If you or your staff have any

questions, please contact me or Eugene L. Waszily, Assistant

Inspector General for Auditing.
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 87
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 88

Independent Auditor’s Report
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 89
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 90

Independent Auditor’s Report
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 91
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 92

Independent Auditor’s Report
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 93
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 94

Independent Auditor’s Report
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 95
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 96

Independent Auditor’s Report
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 97
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 98

Independent Auditor’s Report
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 99
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 100

Independent Auditor’s Report
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 101
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 102

Independent Auditor’s Report
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 103
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 104

Independent Auditor’s Report
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 105
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 106

Independent Auditor’s Report
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 107
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 108

Independent Auditor’s Report

November 15, 2004

MEMORANDUM FOR DAVID L. BIBB

ACTING ADMINISTRATOR (A)

KATHLEEN M. TURCO

CHIEF FINANCIAL OFFICER (B)

FROM: BRIAN D. MILLER 

INSPECTOR GENERAL (J) 

SUBJECT: Report on Internal Controls Over Performance Measures

Report Number: A050262/B/F/F06002 

the Office of the Chief Financial Officer (OCFO) regarding

compliance with the policy. We also reviewed documentation provided by OCFO officials and performed tests that

demonstrated that internal controls were in place and operational. Our procedures were not designed to provide

assurance on internal controls over reported performance

measures. Therefore, we do not provide an opinion on

such controls. 

We conducted this review in accordance with generally

accepted government auditing standards, as well as the

provisions set forth in the Office of Management and

Budget Bulletin No. 01-02, Audit Requirements for Federal

Financial Statements, related to performance measures.

Results of Audit

The internal controls designed by the OCFO over GSA’s

performance measure data reported in the Management

Discussion and Analysis Section of the Agency’s Fiscal Year

2005 Performance and Accountability Report are operating

effectively. 

This report presents the results of the Office of

Inspector General’s (OIG) review regarding the

design and operation of the system of internal

controls over performance measures reported in the

Management Discussion and Analysis section of the General

Services Administration’s (GSA) Fiscal Year 2005

Performance and Accountability Report. This report also

describes our audit responsibilities for conducting the

performance measure review. 

Scope and Methodology

Under a contract monitored by the OIG,

PricewaterhouseCoopers LLP performed the audit of GSA’s

Fiscal Year 2005 Financial Statements. However, the portion

of the audit related to internal controls over performance

measures was performed by the OIG. During our review,

we made an assessment of whether the data and systems

supporting the performance measures exist and are

complete to ensure reliable reporting of GSA’s performance

measures. To obtain an understanding of the controls in

place, we examined current GSA Government Performance

and Results Act reporting policy and met with officials from
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 109

In Fiscal Year 2005, GSA Order CFO 2170.1, “Performance

Measurement Data Verification and Validation Procedures,”

became effective, requiring a cyclical review of the

performance measure data reported by each Service and

Staff Office. Our review found that in accordance with this

Order, the OCFO performed and documented the required

review of performance measure data, and that the conclusions therein were adequately supported. 

Furthermore, during our Fiscal Year 2004 Report on Internal

Controls Over Performance Measures (A040226/B/F/F0002),

we reported that the OCFO had hired a consultant to

perform a review of the process used to verify and validate

the data supporting the Agency’s performance measures.

The consultant’s review was completed during Fiscal Year

2005, and a report detailing recommendations for improvement was provided to the OCFO. The OCFO has taken

these recommendations into consideration and implemented them accordingly. This review represents an additional step taken to improve the adequacy of the internal

controls over GSA’s reported performance measures. 
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 110

GENERAL SUPPLY FUND:

INFORMATION TECHNOLOGY FUND:

FEDERAL BUILDINGS FUND:

CONSOLIDATING STATEMENTS OF NET COST

For the Fiscal Years Ended September 30, 2005 and 2004

(Dollars in Millions)

Revenues: 

Building Operations - Government-Owned 

Building Operations - Leased

Expenses:

Building Operations - Government-Owned 

Building Operations - Leased

Net Revenues From (Cost of) Operations

Revenues:

Global Supply Operations

Vehicle Acquisition and Leasing

Commercial Acquisition

Professional Services

Other Programs

Expenses: 

Global Supply Operations

Vehicle Acquisition and Leasing

Commercial Acquisition

Professional Services

Other Programs

Net Revenues From (Cost of) Operations

Revenues:

Network Services

IT Solutions

Expenses:

Network Services

IT Solutions

Net Revenues From (Cost of) Operations

2005 2004

$ 3,662

4,583

2,830

4,441

974

1,028

1,454

452

732

68

1,056

1,403

395

729

66

85

1,247

5,473

1,206

5,525

(11)

$ 3,936 

4,354 

3,021 

4,225 

1,044 

1,110 

1,515 

556 

490

39 

1,080 

1,487 

473 

492

64 

114 

1,206 

7,195 

1,175 

7,209 

17 

Principal Financial Statements
LESS: INTRA-GSA ELIMINATIONS (NOTE 1-B):

GSA CONSOLIDATED:

OTHER FUNDS:

Revenues:

Working Capital Fund

GSA OE and OGP Funds

Other Funds

Expenses:

Working Capital Fund

GSA OE and OGP Funds

Other Funds 

Net Revenues From (Cost of) Operations

Revenues

Expenses

Revenues

Expenses

Net Revenues From (Cost of) Operations

2005 2004

378

7

12

360 

171

103

(237)

581

608

18,515

17,677

$ 838

329 

24 

6 

340 

167 

77 

(225)

541 

568 

20,219

19,242

$ 977 

The accompanying notes are an integral part of these statements.

F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 111

Continued from previous page
Principal Financial Statements

LIABILITIES AND NET POSITION

NET POSITION (NOTE 14):

ASSETS 

Intragovernmental Assets:

Funds with U.S. Treasury (Note 1-D,2)

Accounts Receivable - Federal, Net (Note 4)

Prepaid Expenses and Advances - Federal

Total Intragovernmental

Inventories (Note 1-E)

Accounts Receivable - Public, Net (Note 4)

Prepaid Expenses and Advances - Public

Other Assets

Property and Equipment (Notes 1-F,5):

Buildings

Leasehold Improvements

Telecommunications and ADP Equipment

Motor Vehicles

Other Equipment

Less: Accumulated Depreciation and Amortization

Subtotal

Land

Construction in Process and Software in Development

Total Property and Equipment

Total Assets

Intragovernmental Liabilities:

Accounts Payable and Accrued Expenses - Federal

Deferred Revenue and Advances - Federal

Intragovernmental Debt (Note 6)

Other Intragovernmental Liabilities (Note 9)

Total Intragovernmental

Accounts Payable and Accrued Expenses - Public

Deferred Revenue and Advances - Public

Environmental and Disposals Liabilities (Notes 5,10)

Obligations Under Capital Leases (Note 8)

Workers' Compensation Actuarial Liability (Note 7)

Annual Leave Liability (Note 1-G)

Deposit Fund Liability

Earnings Payable to U.S. Treasury

Other Liabilities (Note 9)

Total Liabilities

Cumulative Results of Operations

Unexpended Appropriations

Total Net Position

Total Liabilities and Net Position

FEDERAL 

BUILDINGS FUND 

GENERAL 

SUPPLY FUND

2005 2004 2005 2004

$ 5,355 

259 

2 

5,616 

3 

12 

- 

15 

23,700 

333 

- 

- 

59 

(11,302)

12,790 

1,277 

1,077 

15,144 

$ 20,790 

$ 77 

24 

2,210 

249 

2,560 

801 

9 

103 

306

113

39 

- 

- 

143 

4,074 

16,686 

30 

16,716 

$ 20,790

$ 492 

398 

6 

896 

224 

78 

- 

6 

- 

15 

- 

3,880 

140 

(1,307)

2,728 

- 

9 

2,737 

$ 3,941 

$ 29 

81 

- 

4 

114 

278 

1 

- 

- 

36 

19 

- 

84 

- 

532 

3,409 

- 

3,409 

$ 3,941

$ 423 

376 

2 

801 

227 

68 

2 

6 

- 

9 

- 

3,782 

140 

(1,266)

2,665 

- 

4 

2,669 

$ 3,773 

$ 21 

72 

- 

6 

99 

267 

- 

- 

- 

30

18 

- 

84 

- 

498 

3,275 

- 

3,275 

$ 3,773

$ 5,449 

314 

1 

5,764 

5 

11 

18 

14 

24,053 

304 

- 

- 

68 

(11,991)

12,434 

1,273 

2,309 

16,016 

$ 21,828 

$ 67 

28 

2,201 

266 

2,562 

796 

3 

93 

296

109

41 

- 

- 

190 

4,090 

17,738 

- 

17,738 

$ 21,828

F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 112

The accompanying notes are an integral part of these statements.

CONSOLIDATING BALANCE SHEETS

As of September 30, 2005 and 2004

(Dollars in Millions)
INFORMATION

TECHNOLOGY FUND OTHER FUNDS

GSA CONSOLIDATED

TOTALS

2005 2004

LESS: INTRA-GSA

ELIMINATIONS

2005 2004 2005 2004 2005 2004

$ 231 

1,083 

- 

1,314 

- 

10 

- 

7 

- 

- 

159 

- 

94 

(222)

31 

- 

85 

116 

$ 1,447 

$ 36 

44 

- 

1 

81 

1,049 

2 

- 

-

5 

13 

- 

- 

- 

1,150 

297 

- 

297 

$ 1,447 

$ 288 

1,260 

- 

1,548 

- 

10 

- 

9 

- 

- 

168 

- 

93 

(220)

41 

- 

63 

104 

$ 1,671 

$ 44 

78 

- 

2 

124 

1,233 

- 

- 

-

9 

12 

- 

- 

- 

1,378 

293 

- 

293 

$ 1,671 

$ 606 

3 

1 

610 

- 

16 

- 

1 

- 

- 

- 

- 

78 

(32)

46 

- 

- 

46 

$ 673 

$ 13 

52 

- 

58 

123 

29 

- 

21 

-

20 

19 

54

22 

49 

337 

231 

105 

336 

$ 673

$ 477 

2 

9 

488 

- 

22 

- 

2 

- 

- 

- 

- 

74 

(25)

49 

- 

- 

49 

$ 561 

$ 12 

40 

- 

54 

106 

32 

- 

35 

- 

15

19 

29

28 

8 

272 

179 

110 

289 

$ 561

$ - 

28 

1 

29 

- 

- 

- 

26 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

$ 55 

$ 28 

27 

- 

- 

55 

- 

- 

- 

- 

-

- 

- 

- 

- 

55 

- 

- 

- 

$ 55

$ - 

19 

2 

21 

- 

- 

- 

29 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

$ 50 

$ 19 

31 

- 

- 

50 

- 

- 

- 

- 

- 

-

- 

- 

- 

50 

- 

- 

- 

$ 50

$ 6,778 

1,770 

7 

8,555 

229 

115 

18 

2 

24,053 

319 

159 

3,880 

380 

(13,552)

15,239 

1,273 

2,403 

18,915 

$27,834 

$ 117 

178 

2,201 

329 

2,825 

2,152 

6 

114 

296 

170

92 

54 

106 

239 

6,054 

21,675 

105 

21,780 

$27,834 

$ 6,543 

1,878 

11 

8,432 

230 

112 

2 

3 

23,700 

342 

168 

3,782 

366 

(12,813)

15,545 

1,277 

1,144 

17,966 

$ 26,745 

$ 135 

183 

2,210 

311 

2,839 

2,333 

9 

138 

306 

167

88 

29 

112 

151 

6,172 

20,433 

140 

20,573 

$ 26,745 

F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 113
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 114

RESULTS OF OPERATIONS:

CHANGES IN UNEXPENDED APPROPRIATIONS:

ENDING BALANCE OF NET POSITION:

BEGINNING BALANCE OF NET POSITION:

CONSOLIDATING STATEMENTS OF CHANGES IN NET POSITION

For the Fiscal Years Ended September 30, 2005 and 2004

(Dollars in Millions)

Cumulative Results of Operations 

Unexpended Appropriations

Net Position Beginning Balance

Net Revenue From (Cost of) Operations

Appropriations Used (Note 1-C)

Non-Exchange Revenue (Notes 1-C, 1-G)

Imputed Financing Provided By Others

Transfer of Earnings Paid and Payable to U.S. Treasury

Transfers of Net Assets and Liabilities

(To) From Other Federal Agencies

Receipts Paid and Reclassified as Payable From

(To) the Land and Water Conservation Fund

Other

Net Results of Operations

Appropriations Received

Appropriations Used

Appropriations Adjustments and Transfers From Other 

Agencies or Funds

Other

Net Change in Unexpended Appropriations

Cumulative Results of Operations

Unexpended Appropriations

Net Position Ending Balance

FEDERAL 

BUILDINGS FUND 

GENERAL 

SUPPLY FUND

$ 15,599 

37 

15,636 

1,044 

463 

- 

53 

- 

(473)

-

- 

1,087 

460 

(463)

(4)

- 

(7)

16,686

30 

$ 16,716

$ 3,275 

- 

3,275 

85 

- 

- 

28 

-

20 

-

1 

134

- 

- 

-

- 

- 

3,409 

- 

$ 3,409 

$ 3,370 

- 

3,370 

114 

- 

- 

27 

(246)

10

-

- 

(95)

- 

- 

-

- 

- 

3,275 

- 

$ 3,275 

$16,686 

30 

16,716 

974 

30 

- 

55 

- 

(7)

-

- 

1,052 

- 

(30)

-

- 

(30)

17,738

- 

$17,738

2005 2004 2005 2004

The accompanying notes are an integral part of these statements.

Principal Financial Statements
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 115

INFORMATION

TECHNOLOGY FUND OTHER FUNDS

GSA CONSOLIDATED

TOTALS

2005 2004

LESS: INTRA-GSA

ELIMINATIONS

2005 2004 2005 2004 2005 2004

$ 293 

- 

293 

(11)

- 

- 

15

- 

-

-

-

4

- 

- 

-

- 

- 

297 

- 

$ 297 

$ 262 

- 

262 

17

- 

- 

14 

- 

-

-

-

31

- 

- 

-

- 

- 

293 

- 

$ 293 

$ 179 

110 

289 

(237)

215 

57 

44 

(28) 

6

(5)

-

52

218 

(215)

(8)

- 

(5) 

231 

105 

$ 336

$ 159 

108 

267 

(225)

194 

42 

26 

(19) 

5

(2)

(1)

20

203 

(194)

(7)

- 

2 

179 

110 

$ 289

$ - 

- 

- 

(27)

- 

- 

27 

- 

-

-

- 

- 

- 

- 

-

- 

- 

- 

- 

$ - 

$ - 

- 

- 

(27)

- 

- 

27 

- 

-

-

- 

- 

- 

- 

-

- 

- 

- 

- 

$ - 

$20,433 

140 

20,573 

838 

245 

57 

115 

(28)

19

(5)

1

1,242 

218 

(245)

(8)

- 

(35)

21,675 

105 

$21,780 

$ 19,390 

145 

19,535 

977 

657 

42 

93 

(265)

(458)

(2)

(1)

1,043 

663 

(657)

(11)

- 

(5)

20,433 

140 

$ 20,573 
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 116

STATUS OF BUDGETARY RESOURCES:

RELATIONSHIP OF OBLIGATIONS TO OUTLAYS:

COMPONENTS OF OUTLAYS:

BUDGETARY RESOURCES:

CONSOLIDATING STATEMENTS OF BUDGETARY RESOURCES

For the Fiscal Years Ended September 30, 2005 and 2004

(Dollars in Millions)

Budget Authority

Unobligated Balance, Net - Beginning Balance

Spending Authority:

Earned Revenue

Change in Unfilled Customer Orders

Prior Year Recoveries

Resources Temporarily Not Available

Capital Transfers

Total Budgetary Resources

Obligations Incurred

Direct

Reimbursable

Unobligated Balance - Available

Apportioned

Exempt from Apportionment

Unobligated Balance - Not Available

Total Status of Budgetary Resources

Obligations Incurred

Less: Spending Authority from Offsetting Collections and Recoveries

Obligated Balance, Net - Beginning Balance

Less: Obligated Balance - Ending:

Accounts Receivable

Unfilled Customer Orders

Undelivered Orders

Accounts Payable

Outlays

Disbursements

Collections

Less: Offsetting Receipts

Net Outlays

FEDERAL 

BUILDINGS FUND 

2005 2004

$ 9

3,922 

8,293 

(67)

175 

(647)

(57)

11,628

-

7,982 

3,558 

-

88 

11,628

7,982 

(8,401)

1,134 

230 

1,649 

(2,207)

(888)

(501)

7,791 

(8,292)

- 

$ (501)

$ -

4,293

8,263

(222) 

274

(515) 

(40)

12,053

-

8,219 

3,737 

-

97 

12,053

8,219 

(8,315)

1,216 

303 

1,428 

(2,063)

(879)

(91)

8,099 

(8,190)

- 

$ (91)

The accompanying notes are an integral part of these statements.

Principal Financial Statements
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 117

GENERAL 

SUPPLY FUND

INFORMATION

TECHNOLOGY FUND OTHER FUNDS

GSA CONSOLIDATED

TOTALS

$ -

594 

4,720 

(121) 

98 

- 

-

5,291

-

4,577 

614 

-

100 

5,291

4,577 

(4,697)

(171)

409 

947 

(816)

(318)

(69)

4,633 

(4,702)

- 

$ (69)

$ -

535 

4,566 

436 

78 

- 

(162)

5,453

-

4,859 

594 

- 

-

5,453

4,859 

(5,080)

(77)

385 

1,074 

(989)

(299)

(127)

4,436 

(4,563)

- 

$ (127)

$ -

2,331 

6,747 

(2,073)

989 

- 

- 

7,994

-

6,225 

-

1,769 

- 

7,994

6,225 

(5,663)

(2,043)

1,052 

3,662 

(2,122)

(1,055)

56

6,945 

(6,889)

- 

$ 56 

$ -

2,180 

8,476 

(472)

748 

- 

- 

10,932

-

8,601 

-

2,331 

- 

10,932

8,601 

(8,752)

(1,865)

1,226 

5,704 

(3,645)

(1,242)

27

8,635 

(8,608)

- 

$ 27 

$ 238

155 

425 

(4) 

26

- 

(5)

835

216

425 

69 

-

125 

835

641 

(447)

171 

3 

13 

(154)

(41)

186

597 

(411)

(21)

$ 165

$ 230

108 

361 

2 

22 

- 

(4)

719

240

365 

69 

-

45 

719

605 

(385)

153 

3 

3 

(133)

(44)

202

566 

(364)

(16)

$ 186

2005 2004 2005 2004 2005 2004 2005 2004

$ 238

7,373 

20,155 

(2,420)

1,387 

(515)

(45)

26,173

216

19,446 

4,420 

1,769

322 

26,173

19,662 

(19,122)

(827)

1,767 

6,050 

(5,155)

(2,293)

82

20,274 

(20,192)

(21)

$ 61

$ 239

6,745 

21,696 

(101)

1,023 

(647)

(223)

28,732

240

21,807 

4,221 

2,331

133 

28,732

22,047 

(22,618)

(655)

1,844 

8,430 

(6,974)

(2,473)

(399)

21,428 

(21,827)

(16)

$ (415)
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 118

RESOURCES USED THAT ARE NOT PART OF THE NET COST OF OPERATIONS:

COSTS FINANCED BY RESOURCES RECEIVED IN PRIOR PERIODS:

COSTS REQUIRING RESOURCES IN FUTURE PERIODS:

RESOURCES USED TO FINANCE ACTIVITIES:

CONSOLIDATING STATEMENTS OF FINANCING

For the Fiscal Years Ended September 30, 2005 and 2004

(Dollars in Millions)

Obligations Incurred

Less: Spending Authority From Offsetting Collections

and Adjustments

Financing Imputed for Cost Subsidies

Other

Total Resources Used to Finance Activities

(Increase)/Decrease in Goods and Services Ordered But

Not Yet Received

Increase/(Decrease) in Unfilled Customer Orders

Costs Capitalized on the Balance Sheet

Financing Sources Funding Prior Year Costs

Other

Total Resources Used That Are Not Part of 

the Net Cost of Operations

Depreciation and Amortization

Net Book Value of Property Sold

Other

Total Costs Financed by Resources Received

in Prior Periods

Unfunded Capitalized Costs

Unfunded Current Expenses

Total Costs Requiring Resources in Future Periods

Net (Income From) Cost of Operations

FEDERAL 

BUILDINGS FUND 

GENERAL 

SUPPLY FUND

2005 2004 2005 2004

$ 7,982 

(8,401)

53 

465 

99 

(30)

(67)

(1,500)

(35)

(470)

(2,102)

968 

- 

(2)

966 

(5)

(2)

(7)

$ (1,044)

$ 4,577 

(4,697)

28 

(29)

(121)

173

(121) 

(752)

- 

24 

(676)

385 

312 

9 

706 

- 

6

6

$ (85)

$ 4,859 

(5,080)

27 

(64)

(258)

(252)

436 

(719)

- 

32 

(503)

371 

278 

- 

649 

- 

(2)

(2)

$ (114)

$ 8,219 

(8,315)

55 

5 

(36)

144

(222)

(1,634)

(33)

2

(1,743)

788 

- 

41

829 

(19)

(5)

(24)

$ (974)

The accompanying notes are an integral part of these statements.

Principal Financial Statements
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 119

INFORMATION

TECHNOLOGY FUND OTHER FUNDS

GSA CONSOLIDATED

TOTALS

2005 2004

LESS: INTRA-GSA

ELIMINATIONS

2005 2004 2005 2004 2005 2004

$ 6,225 

(5,663)

15 

- 

577

1,523 

(2,073)

(27)

- 

- 

(577) 

17 

- 

- 

17 

- 

(6) 

(6)

$ 11

$ 8,601 

(8,752)

14 

9 

(128)

599 

(472)

(37)

- 

2 

92 

17 

- 

- 

17 

- 

2 

2 

$ (17)

$ 641 

(447)

44 

(3)

235 

(21)

(4) 

(13)

- 

33 

(5)

12 

- 

- 

12 

- 

(5)

(5)

$ 237 

$ 605 

(385)

26 

(7)

239 

(7)

2 

(11)

- 

5 

(11)

11 

- 

- 

11 

- 

(14)

(14)

$ 225 

$ - 

- 

27 

- 

27 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

$ 27 

$ - 

- 

27 

- 

27 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

$ 27 

$19,662 

(19,122)

115 

(27) 

628

1,819

(2,420)

(2,426)

(33)

59

(3,001)

1,202 

312 

50 

1,564 

(19)

(10)

(29)

$ (838)

$ 22,047 

(22,618)

93 

403 

(75)

310 

(101)

(2,267)

(35)

(431)

(2,524)

1,367 

278 

(2) 

1,643 

(5)

(16)

(21)

$ (977)
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 120

Notes to the Financial Statements

For the Fiscal Years Ended 

September 30, 2005 and 2004

Organization

The U.S. General Services Administration (GSA) was

created by the U.S. Federal Property and

Administrative Services Act of 1949, as amended.

The U.S. Congress enacted this legislation to provide for the

Federal government an economic and efficient system for

the procurement and operation of buildings, procurement

and distribution of general supplies, acquisition and

management of a motor vehicle fleet, management of automated data processing resources, and management of

telecommunications programs. 

The Administrator of General Services, appointed by the

President of the United States with the advice and consent

of the U.S. Senate, oversees the operations of GSA. GSA

carries out its responsibilities through the operation of

several appropriated and revolving funds.

SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

For its principal financial statements, GSA uses consolidating and combining formats to display its three largest

revolving funds: the Federal Buildings Fund (FBF), General

Supply Fund (GSF), and Information Technology Fund

(ITF). All other funds have been combined under Other

Funds. 

The FBF is the primary fund used to record activities of the

Public Buildings Service (PBS). The GSF and the ITF are

the primary funds used to record activities of the former

Federal Supply Service (FSS) and Federal Technology

Services (FTS), respectively. The FSS and FTS organizations

were combined into one, the Federal Acquisition Service

(FAS), in the fourth quarter of FY 2005. 

1

In association with some of the primary purposes that led

to creation of FAS (to modify GSA's operational and

management structure to better serve the Federal community's procurement needs and gain efficiencies within those

operations), GSA has submitted proposed legislation that

would merge the GSF and ITF, to create a funding structure

that allows greater efficiencies in operations and more

focused financial management. In the current operating

environment, elements of technology are highly integrated

into most significant procurements. The existing funding

structure and authorities require segregation of technology

from non-technology procurements, which can significantly

hinder efficient management of procurements.

The accompanying financial statements of GSA include the

accounts of all funds which have been established and

maintained to account for resources under the control of

GSA management. The entities included in the Other Funds

category are described below, together with a discussion of

the different fund types.

REVOLVING FUNDS are accounts established by law to

finance a continuing cycle of operations with receipts

derived from such operations usually available in their

entirety for use by the fund without further action by the

U.S. Congress. The revolving funds in the Other Funds

category consist of the following:

Federal Consumer Information Center Fund (FCICF)

Panama Canal Revolving Fund

Working Capital Fund (WCF) 

GENERAL FUNDS are accounts used to record financial transactions arising under congressional appropriations or other

authorizations to spend general revenues. GSA manages 

10 General Fund accounts of which four are funded by

current year appropriations, two by no-year appropriations,

and four which cannot incur new obligations. The general

funds included in the Other Funds category are as follows:

Allowances and Office Staff for Former Presidents

Electronic Government Fund

Excess and Surplus Real and Related Personal Property

Holding Account
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 121

Expenses, Presidential Transition

Election Reform Payments

Election Reform Reimbursements

Office of Inspector General

Operating Expenses, General Services Administration

Policy and Citizen Services Fund

Real Property Relocation

SPECIAL FUNDS are accounts established for receipts

earmarked by law for a specific purpose, but are not generated by a cycle of operations for which there is continuing

authority to reuse such receipts. GSA uses Special Fund

receipts to pay certain costs associated with the disposal of

surplus real property and for funding of the Transportation

Audits Program. GSA's special funds consist of the following:

Expenses, Disposal of Real and Related Personal 

Property

Expenses, Transportation Audits

Expenses, Acquisition Workforce Training Fund

Operating Expenses, Disposal of Real and Related

Personal Property

Other Receipts, Surplus Real and Related Personal

Property

Receipts of Rent, Leases and Lease Payments for

Government Owned Real Property

Receipts, Transportation Audits

Receipts, Acquisition Workforce Training Fund

Transfer of Surplus Real and Related Personal Property

MISCELLANEOUS RECEIPT AND DEPOSIT FUND accounts are

considered Non-entity funds since GSA management does

not exercise control over how the monies in these

accounts can be used. Miscellaneous Receipt Fund

accounts hold receipts and accounts receivable resulting

from miscellaneous activities of GSA where, by law, such

monies may not be deposited into funds under GSA

management control. The U.S. Department of the

Treasury (Treasury) automatically transfers all cash

balances in these receipt accounts to general funds of the

Treasury at the end of each fiscal year. Deposit Fund

accounts hold monies outside the budget. Accordingly,

their transactions do not affect budget surplus or deficit.

These accounts include (1) deposits received for which

GSA is acting as an agent or custodian, (2) unidentified

remittances, (3) monies withheld from payments for

goods and services received, and (4) monies whose distribution awaits a legal determination or investigation. The

receipt and deposit funds in the Other Funds category

consist of the following:

Budget Clearing Account

Credits for Withholding and Contributions, Civil Service

Retirement and Disability Fund

Employees' Payroll Allotment Account, U.S. Savings

Bonds

Fines, Penalties, and Forfeitures, Not Otherwise

Classified

Forfeitures of Unclaimed Money and Property 

General Fund Proprietary Interest, Not Otherwise

Classified

General Fund Proprietary Receipts, Not Otherwise

Classified, All Other 

Proceeds from Sale of Surplus Property

Reserve for Purchase Contract Projects

Suspense

Suspense, Transportation Audits

Unconditional Gifts of Real, Personal or Other Property

Withheld State and Local Taxes

B. Basis of Accounting

The principal financial statements are prepared in accordance with generally accepted accounting principles

(GAAP) as promulgated by the Federal Accounting

Standards Advisory Board (FASAB), and OMB Circular 

A-136 Financial Reporting Requirements. The American

Institute of Certified Public Accountant’s (AICPA)

Statement on Auditing Standards No. 91, Federal GAAP

Hierarchy, established a hierarchy of GAAP for Federal

financial statements. GSA's financial statements are

prepared in accordance with formats prescribed in OMB

Circular A-136. These formats are considerably different

from business-type formats. The Statements of Net Cost

present the operating results of GSA by major programs

and responsibilities. The Balance Sheets present the

financial position of GSA using a format clearly segregating intra-governmental balances. The Statements of

Changes in Net Position display the changes in equity

accounts. The Statements of Budgetary Resources present
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 122

the sources, status, and uses of GSA's budgetary resources.

Lastly, the Statements of Financing bridge the gap

between the uses of budgetary resources with the operating results reported on the Statements of Net Cost.

GSA did not perform all reconciliations with trading

partners required by Circular A-136, which requires

agencies to reconcile intra-governmental income,

expense, assets, and liabilities, with all of its trading

partners. GSA did complete reconciliations related to fiduciary transactions activity, and has reconciled material

differences reported by other agencies in conformance

with U.S. Treasury intra-governmental reporting guidelines.

Certain prior year balances have been reclassified to

conform with the current year's presentation.

On the Statements of Net Cost, Balance Sheets, Statements

of Changes in Net Position, Statements of Financing, all

significant intra-agency balances and transactions have been

eliminated in consolidation. No such eliminations have

been made on the Combining Statements of Budgetary

Resources. Certain amounts of expenses eliminated on the

Statements of Net Cost are imputed costs for which the

matching resource is not revenue on this statement, but

imputed resources provided by others, displayed on the

Statements of Changes in Net Position. Accordingly, on the

Statements of Net Cost the revenues and expense

eliminations do not match. The Statement of Changes in Net

Position displays the offsetting balances between these

categories. 

The preparation of financial statements requires

management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities at the date of

the financial statements and the reported amounts of

revenues and expenses during the reporting period.

Actual results may differ from those estimates.

C. Revenue Recognition and Appropriations Used

Substantially all revenues reported by GSA’s funds on the

Statements of Net Cost are generated from intragovernmental sales of goods and services. Expenses are

primarily incurred with non-Federal entities supplying the

underlying goods and services being provided to GSA’s

Federal customers. Each fund has established rate-setting

processes governed by the laws authorizing its activities.

In most cases, the rates charged are intended to cover the

full cost that the funds will pay to provide such goods and

services and to provide capital maintenance. In

accordance with the governing laws, rates are generally

not designed to recover costs covered by other funds or

entities of the U.S. government, such as for postemployment and other inter-entity costs. Revenues from

non-Federal entities make up an immaterial portion of

GSA’s total sales. Accordingly, where not otherwise

governed by law, unique rates for non-Federal customers

have generally not been established. 

Generally, Revolving Fund and reimbursable General Fund

revenue is recognized when goods have been delivered or

services rendered. In the FBF, rent revenues are earned

based on occupancy agreements with customers, as space

and services are provided. Generally, agencies are billed

for space at rent based upon commercial rates for

comparable space. In some instances special rates are

arranged in accordance with congressional guidance or

other authorized purposes. Most agencies using funding

from Trust Funds have rent rates set to recover full cost.

Revenue under nonrecurring reimbursable building repairs

and alterations (R&A) projects is recognized under the

percentage-of-completion method. In the GSF, Global

Supply revenues are recognized as goods are provided to

customers. Vehicle Acquisition and Leasing revenues are

recognized when goods are provided and based on rental

agreements over the period vehicles are dispatched.

Commercial Acquisitions revenues are recognized when

goods are provided, and fee revenues in the GSA Schedules

programs are earned based on estimated and actual usage

of GSA’s contracting vehicles by other agencies. The

Schedules programs generated $269 million in fees,

constituting 7.2 percent of GSF revenues in FY 2005, and

$255 million (6.9 percent of GSF revenues) in FY 2004.

Professional Services revenues are recognized when goods

and services are provided. In the ITF, telecommunications

service revenues are generally recognized based on

Notes to the Financial Statements
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 123

customer usage or on fixed line rates. IT Solutions revenues

are earned when goods or services are provided or as

reimbursable project costs are incurred. In the WCF,

revenues are generally recognized as general management

and administrative services are provided to the Service

components of GSA and to external customers. Such WCF

revenues are earned in accordance with agreements that

recover the direct cost and an allocation of indirect costs

from the components of GSA receiving those services.

Non-Exchange revenues are recognized on an accrual

basis on the Statements of Changes in Net Position for

sales of surplus real property, reimbursements due from

the audit of payments to transportation carriers, and other

miscellaneous items resulting from GSA’s operations

where ultimate collections must be deposited in

miscellaneous receipt accounts of the Treasury. NonExchange revenues are reported net of associated bad

debt expense on uncollectible accounts.

Appropriations for General Fund and Special Fund activities are recorded as a financing source on the

Consolidating Statements of Changes in Net Position when

expended. Unexpended appropriations are reported as an

element of Net Position on the Balance Sheets.

D. Fund Balance with U.S. Treasury 

This total represents all unexpended balances for GSA's

accounts with the U.S. Treasury. Amounts in Funds with

U.S. Treasury are based on the balances reported on the

books of the U.S. Treasury, as the official record of the

Federal government. Adjustments are only made to those

amounts when significant errors are identified. See Note

2 for further details regarding such adjustments. 

GSA acts as a disposal agent for surplus Federal real and

personal property. In some cases, public law entitles the

owning agency to the sales proceeds, net of disposal

expenses incurred by GSA. Proceeds from the disposal of

equipment are generally retained by GSA to replace

equipment. Under GSA's legislative authorities, the gross

proceeds from some sales are deposited in GSA's Special

Fund receipt accounts and recorded as Non-Exchange

Revenues in the Consolidating Statements of Changes in

Net Position. A portion of these proceeds is subsequently

transferred to a Special Fund to finance expenses incurred

in disposing of surplus property. The remainder is

periodically accumulated and transferred, by law, to the

Land and Water Conservation Fund administered by the

U.S. Department of the Interior

E. Inventories

Operating supplies, which will be consumed in

operations, are valued at the lower of cost, determined

principally on the first-in, first-out method, or market. In

the Federal Buildings Fund (FBF), inventory balances

consist of operating supplies.

Inventories held for sale to other Federal agencies consist

primarily of GSF inventories, which are valued at the

lower of cost, generally determined on a moving average

basis, or market. The recorded values are adjusted for the

results of physical inventories taken periodically in

accordance with a cyclical counting plan.

In the GSF, $2.1 million of the balances in inventories held

for sale are excess inventories. Excess inventories are

defined as those exceeding the economic retention limit

(i.e., the number of units of stock which may be held in

inventory without incurring excessive carrying costs).

Excess inventories are generally transferred to another

Federal agency, sold, or donated to state or local

governments.

F. Property and Equipment (See Note 5)

Property and equipment purchases and additions of

$10,000 or more and having a useful life of two or more

years are capitalized and valued at cost. Property and

equipment transferred to GSA from other Federal agencies

on the date GSA was established is stated at the transfer

value, which approximates historical cost. Subsequent

thereto, equipment transferred to GSA is stated at net

book value, and surplus real and related personal

property transferred to GSA is stated at the lower of net

book value or appraised value. 
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 124

Expenditures for major additions, replacements, and

alterations are capitalized. Normal repair and

maintenance costs are expensed as incurred. The cost of

R&A and of leasehold improvements performed by GSA,

but financed by other agencies, is not capitalized in GSA's

financial statements as such amounts are transferred to the

other agencies upon completion of the project.

Substantially all land, buildings, and leasehold

improvements are leased to other Federal agencies under

short-term cancellable agreements. 

Depreciation and amortization of property and equipment

are calculated on a straight-line basis over their initial or

remaining useful lives. Leasehold improvements are

amortized over the lesser of their useful lives or the

unexpired lease term. Buildings capitalized by the FBF at

its inception in 1974 were assigned remaining useful lives

of 30 years. Prior to 1974, no depreciation was recorded

by GSA. Upon completion, construction costs are

capitalized in the Land and Buildings accounts. Buildings

acquired under capital lease agreements are also

depreciated over 30 years. Major and minor building

renovation projects carry estimated useful lives of 20 years

and 10 years, respectively.

Telecommunications equipment and automated data

processing equipment are used in operations to perform

services for other Federal agencies for which billings are

rendered. Most of the assets comprising other equipment

are used internally by GSA. Telecommunications and

other equipment is depreciated over periods generally

ranging from three to 10 years. Automated data

processing equipment is depreciated over periods generally ranging from three to five years.

Motor vehicles are generally depreciated over four to six

years.

In FY 2001, GSA implemented FASAB Statement of Federal

Financial Accounting Standards (SFFAS) No. 10,

Accounting for Internal Use Software. This standard

requires capitalization of software development costs

incurred for systems having a useful life of two years or

more. With implementation of this standard, GSA adopted

minimum dollar thresholds per system that would be

required before capitalization would be warranted. For

the FBF, this minimum threshold is $1 million. For all

other funds, it is $250,000.

G. Annual, Sick, and Other Types of Leave

Annual leave liability is accrued as it is earned and the

accrual is relieved as leave is taken. Each year the balance

in the accrued annual leave account is adjusted to reflect

current pay rates.

Sick leave and other types of nonvested leave are

expensed as taken.

FUND BALANCE WITH U.S. TREASURY

A. Reconciliation to Treasury 

There were no differences between amounts reported by

GSA and those reported to the U.S. Treasury as of

September 30, 2005 and 2004. 

B. Balances by Fund Type

Funds with U.S. Treasury are primarily components of

revolving funds such as the FBF, GSF, and ITF. The fund

balances in the Other Funds category contains amounts in

the following fund types (dollars in millions):

C. Relationship to the Budget

In accordance with SFFAS Number 1, Accounting for

Selected Assets and Liabilities, the following information is

provided to further identify amounts in Funds with U.S.

2005 2004

Revolving Funds $ 216 $ 142

Appropriated and General Funds 185 165

Special Funds 154 147

Deposit Funds 51 23

Total Other Funds $ 606 $ 477

2

Notes to the Financial Statements
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 125

Treasury as of September 30, 2005, against which obligations have been made, and for unobligated balances, to

identify amounts available for future expenditures and

those only available to liquidate prior obligations.

Unobligated balances presented below may not equal

related amounts reported on the Combining Statements of

Budgetary Resources (CSBR), particularly for Other Funds,

as this schedule presents elements of Funds with U.S.

Treasury, which excludes other authorities reportable in

the CSBR and includes balances in Funds that are not

reportable in the CSBR (dollars in millions):

D. Availability of Funds

Included in GSA's accounts are certain amounts that may

be transferred to either the U.S. Treasury or the Land and

Water Conservation Fund (see Note 1-D). These amounts,

related to the Transportation Audits program and surplus

real property disposals, are subject to transfer subsequent

to GSA's determination of the internal working capital

needs of these programs. Such amounts totaled $118

million and $119 million at September 30, 2005 and 2004,

respectively, of which $21 million and $22 million, respectively, were recorded as liabilities in the Consolidating

Balance Sheets. At both September 30, 2005 and 2004, the

balance of Funds with Treasury that were no longer available for expenditure totaled $3 million. Of these amounts,

FY 2005

FBF $ 1,153 $ 3,684 $ 612 $5,449

GSF (222) 614 100 492

ITF (1,538) 1,769 - 231

Others 179 69 358 606 

Total $ (428) $ 6,136 $ 1,070 $ 6,778 

FY 2004

FBF $ 1,118 $ 3,501 $ 736 $ 5,355

GSF (171) 594 - 423

ITF (2,043) 2,331 - 288

Others 71 69 237 477 

Total $ (925) $ 6,495 $ 973 $ 6,543

OBLIGATED

BALANCE, NET 

UNOBLIGATED BALANCE

AVAILABLE UNAVAILABLE TOTAL

substantially all balances were transferred back to the

Special Fund Receipt Accounts from which they were

appropriated, with minor amounts returned to the

Treasury General Fund. 

The FBF has balances that are temporarily not available in

accordance with annual appropriation acts that limit the

amount of reimbursable resources that are available for

spending each year. Such amounts are displayed on the

Consolidated Statements of Budgetary Resources. 

For the GSF and ITF, legislative authorities set certain limitations on the amount of earnings that may be retained in

those funds. Amounts in excess of such limitations are

returned to the Treasury General Fund. At the end of both

FY 2005 and 2004, only the GSF had balances in this

regard, totaling $84 million of excess amounts that are

classified as Earnings Payable to Treasury.

Effective on October 1, 2004, Public Law 108-309 transferred the balances of the Panama Canal Revolving Fund

to GSA as the Panama Canal Commission was abolished.

This fund contains $41 million of balances being retained

to liquidate any claims related to that Commission and its

responsibilities. Any balances not needed to liquidate

claims will be returned to the government of Panama.

NON-ENTITY ASSETS

As of September 30, 2005 and 2004, certain amounts

reported on the balance sheet are not available to management for use in ongoing operations and are classified as

Non-entity assets (see Note 1.A). These balances consisted

of the following (dollars in millions):

2005 2004

Funds with U.S. Treasury $ 106 $ 71

Accounts Receivable - Public 1 1

Prepaid Expenses - Federal 1 9

Total $ 108 $ 81

3
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 126

NONCURRENT NOTES RECEIVABLE

CURRENT:

ACCOUNTS AND NOTES RECEIVABLE

Substantially all accounts receivable are from other Federal agencies. Unbilled accounts receivable result from the delivery

of goods or performance of services for which bills have not yet been rendered. Allowances for doubtful accounts are

recorded using aging methodologies based on analysis of historical collections and writeoffs.

Notes Receivable are from the sale of surplus real and related personal property, from motor vehicle damage claims, and

from contract claims. Interest rates range from 0.0 percent to 8.6 percent.

A summary of Accounts and Notes Receivable is as follows (dollars in millions).

4

Accounts Receivable - Billed

Accounts Receivable - Unbilled

Allowance for Doubtful Accounts

Add: Current Notes Receivable

Subtotal Current Receivables

(Net of Allowance of $45 million and 

$40 million in 2005 and 2004, respectively)

Total Accounts and Notes Receivable

FEDERAL 

BUILDINGS FUND 

GENERAL 

SUPPLY FUND

2005 2004 2005 2004

$ 93 

188 

(10)

271

-

271 

-

$ 271 

$ 91 

389 

(4)

476

-

476

-

$ 476 

$ 94 

354 

(4)

444

-

444 

-

$ 444 

$ 119

218

(12)

325 

-

325

-

$ 325
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 127

INFORMATION

TECHNOLOGY FUND OTHER FUNDS

GSA CONSOLIDATED

TOTALS

2005 2004

LESS: INTRA-GSA

ELIMINATIONS

2005 2004 2005 2004 2005 2004

$ 69

1,024 

- 

1,093

-

1,093 

-

$ 1,093 

$ 102

1,168 

- 

1,270

-

1,270 

-

$ 1,270 

$ 21

3 

(5)

19

-

19

-

$ 19

$ 27 

2 

(5)

24

-

24 

-

$ 24 

$ -

28 

- 

28

-

28 

-

$ 28 

$ - 

19 

- 

19

-

19 

-

$ 19 

$ 300 

1,606

(21)

1,885

-

1,885

-

$ 1,885

$ 316 

1,693 

(19)

1,990

-

1,990 

-

$ 1,990
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 128

B. Cleanup Costs

In GSA's FBF, certain properties contain environmental

hazards that will ultimately need to be removed and/or

require containment mechanisms to prevent health risks

to the public. Cleanup of such hazards is governed by

various Federal and state laws. The laws most applicable

to GSA are the Comprehensive Environmental Response

Compensation and Liability Act of 1980, the Clean Air Act,

and the Resource Conservation and Recovery Act.

In accordance with the FASAB’s SFFAS Numbers 5 and 6,

Accounting for Liabilities of the Federal Government, and

Accounting for Property Plant and Equipment, respectively, and interpretive guidance in Federal Financial

Accounting and Auditing Technical Release Number 2

issued by the Accounting and Auditing Policy Committee,

if an agency is required by law to clean up such hazard,

the estimated amount of cleanup cost must be reported in

the financial statements. Accordingly, GSA recognized

liabilities totaling $93 million and $103 million for

Environmental and Disposals costs as of September 30,

2005 and 2004, respectively, for properties currently in

GSA's property inventory. In instances where no reasonable estimate of the cost to clean up a particular site could

be made, GSA recognized the estimated costs for related

environmental studies as is prescribed in the guidance

noted above. In some instances, GSA has been named as

a party in certain environmental cases where the subject

property is no longer in the GSA or Federal property

inventory. GSA's liability for such cases is further

discussed in Note 10. 

PROPERTY AND EQUIPMENT

A. Summary of Balances

In FY 2004, GSA recorded capitalized interest costs of $2.6 million in the Construction in Process account associated with

debt provided by the U.S. Treasury's Federal Financing Bank (FFB), as discussed in Note 6. Interest capitalized in FY 2004

amounted to $1.1 million. Balances in GSA's Property and Equipment accounts subject to depreciation as of September

30, 2005, and 2004, are summarized below (dollars in millions):

5

Buildings

Leasehold Improvements

Telecom and ADP Equipment

Motor Vehicles

Other Equipment

Total

$ 23,700 

342 

168 

3,782 

366 

$ 28,358 

$ 10,980 

303 

143 

1,191 

196 

$ 12,813 

$ 12,720 

39 

25

2,591 

170 

$ 15,545 

$12,371

34

23

2,661

150

$15,239

$11,682

285

136

1,219

230

$13,552

$24,053

319

159

3,880

380

$28,791

Cost

Accumulated

Depreciation

Net Book

Value Cost

Accumulated

Depreciation

Net Book

Value

2005 2004
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 129

A. Purchase Contract and Lease Purchase Debt

Purchase contract debt was borrowing authority employed

to finance construction of Federal buildings. Under that

authority, the Dual System provided monies via publicly

issued Participation Certificates and Participation Certificates

of the U.S. Treasury's Federal FFB. GSA is not authorized

to obtain any additional purchase contract debt without

congressional approval. During FY 2005, GSA retired the

remaining balances of the purchase contract debt.

In FYs 1993 through 1995, GSA refinanced all outstanding

publicly issued Participation Certificates with the FFB, and

GSA has title to all purchase contract buildings.

Starting in FY 1991, GSA entered into several agreements to

fund the purchase of land and construction of buildings

under the FBF lease purchase authority. Under these agreements, the FBF borrows monies (as advance payments)

through the FFB or executes lease-to-own contracts to

finance the lease purchases.The program authorizes total

expenditures of $1,945 million for 11 projects. In FY 2005

and 2004, the FFB made advance payments on the behalf

of GSA totaling $43 million and $48 million, respectively.

As of September 30, 2005 and 2004, $103 million and $146

million, respectively, of borrowing authority under the lease

purchase program remained available for obligation.

Resources to retire debt are obtained from annual revenues

generated by the FBF. Aggregate debt maturities are as

follows (dollars in millions): 2006 - $37; 2007 - $40; 2008 -

$42; 2009 - $45; 2010 - $48; 2011 and beyond - $1,271.

B. Pennsylvania Avenue Debt

The former Pennsylvania Avenue Development Corporation

(PADC) originally received authority to borrow from the

FFB to finance construction of the Ronald Reagan Building

(RRB) in Washington, D.C., with a project budget of $738

million. Effective March 31, 1996, the PADC was dissolved,

with portions of its functions, assets, and liabilities being

transferred to GSA, including the RRB.

Subsequent legislation consolidated GSA’s portion of

these assets and liabilities into the FBF, in which the cost

and associated debt for the RRB are now recorded. 

No additional amounts are anticipated to be borrowed

under this authority.

Aggregate maturities on debt related to the RRB are as

follows (dollars in millions): 2006 - $16; 2007 - $17; 2008

- $18; 2009 - $19; 2010 - $20; 2011 and beyond - $628.

C. Schedules of Debt Arrangements

GSA’s outstanding debt arrangements in the FBF at

September 30, 2005 and 2004 were as follows (dollars in

millions):

6 DEBT FINANCING

2005 2004

PURCHASE CONTRACT DEBT:

Dual System:

Participation certificates held by the Federal Financing Bank (FFB), due at various dates from June 26, 2004, 

through November 15, 2004, at interest rates ranging from 8.472 percent to 9.162 percent $ - $ 5 

LEASE PURCHASE DEBT: 

Mortgage loans and construction advances held by the FFB, due at various dates from June 28, 2021, 

through August 1, 2035, at interest rates ranging from 3.935 percent to 8.561 percent 1,483 1,472 

PENNSYLVANIA AVENUE DEBT:

Ronald Reagan Building, mortgage loans due November 2, 2026, at interest

rates ranging from 4.004 percent to 8.323 percent 718 733 

TOTAL GSA DEBT $ 2,201 $ 2,210
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 130

7 WORKERS' COMPENSATION BENEFITS

The Federal Employees' Compensation Act (FECA) provides

income and medical cost protection to covered Federal

civilian employees injured on the job, employees who have

incurred a work-related occupational disease, and beneficiaries of employees whose death is attributable to a jobrelated injury or occupational disease. The FECA program

is administered by the U.S. Department of Labor (DOL)

which initially pays valid claims and subsequently seeks

reimbursement from the Federal agencies employing the

claimants. DOL provides the actuarial liability for claims

outstanding at the end of each fiscal year. This liability

includes the estimated future costs of death benefits,

workers' compensation, and medical and miscellaneous

costs for approved compensation cases. The present value

of these estimates at the end of FY 2005 was calculated by

DOL using a discount rate of 4.528 percent for FY 2005 and

5.020 percent for FY 2006 and thereafter. At the end of 

FY 2004, the discount rate used was 4.880 percent for 

FY 2004 and 5.245 percent for FY 2005 and thereafter. The

actuarial liability recorded by GSA totaled $170 million and

$167 million as of September 30, 2005 and 2004, respectively.

8 LEASING ARRANGEMENTS

As of September 30, 2005, GSA was committed to various noncancelable operating leases primarily covering administrative office space and storage facilities maintained by the FBF. Many of these leases contain escalation clauses tied to

inflationary and tax increases, and renewal options. GSA also uses a small volume of operating leases of vehicles in the

GSF to fill demand for vehicles when sufficient owned vehicles are not available. The following are schedules of future

minimum rental payments required under leases that have initial or remaining noncancelable terms in excess of one year,

and under capital leases together with the present value of the future minimum lease payments (dollars in millions):

Substantially all leased space maintained by the FBF is

sublet to other Federal agencies at rent charges based upon

approximate commercial rates for comparable space. The

agreements covering the sublease arrangements allow

customer agencies to terminate the sublease at any time. In

most cases, however, GSA believes the subleases will

continue without interruption. Rental income under

subleasing agreements approximated $4.2 billion and $4.4

billion for the fiscal years ended September 30, 2005 and

2004, respectively. Rent expense under all operating leases,

including short-term noncancelable leases, was

approximately $3.9 billion and $3.7 billion in FY 2005 and

2004, respectively. The Consolidating Balance Sheets as of

September 30, 2005 and 2004, include capital lease assets of

$363 million in both years for buildings. Aggregate

accumulated amortization on such structures totaled $116

million and $104 million in those years, respectively. For

substantially all of its leased property, GSA expects that in

the normal course of business such leases will be either

renewed or replaced in accordance with the needs of its

customer agencies.

OPERATING LEASES

2006 $ 3,635

2007 3,084

2008 2,710

2009 2,399

2010 2,092

2011 and thereafter 8,856

Total minimum lease payments $ 22,776

CAPITAL LEASES

2006 $ 32

2007 32

2008 31

2009 31

2010 31

2011 and thereafter 336

Total minimum lease payments 493

Less: Amounts representing Interest 194

Executory Costs 3

Total obligations under capital leases $ 296

FISCAL YEAR TOTAL
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 131

A. Commitments

In addition to future lease commitments discussed in Note 8,

GSA is committed under obligations for goods and services

that have been ordered but not yet received (undelivered

orders) at fiscal year-end. Aggregate undelivered orders for

all GSA activities amounted to $5.2 billion in FY 2005 and

$7.0 billion in FY 2004.

B. Contingencies

GSA is a party in various administrative proceedings, legal

actions, environmental suits, and claims brought by or

against it. In the opinion of GSA management and legal

counsel, the ultimate resolution of these proceedings,

actions, and claims will not materially affect the financial

position or results of operations of GSA.

OTHER LIABILITIES

As of September 30, 2005 and 2004, amounts reported on the balance sheet as Other Intragovernmental Liabilities and Other

Liabilities which are substantially all long-term in nature, consisted of the following (dollars in millions):

9

2003O

Other Intragovernmental Liabilities:

Workers’ Compensation Due to DOL $ 22 $ 4 $ 1 $ 6 $ 33

Deposits Held in Suspense - - - 52 52

Payments Due to the Judgment Fund (Note 10) 244 - - - 244

Total $266 $ 4 $ 1 $ 58 $329

Other Liabilities:

Contingencies $ 5 $ - $ - $ - $ 5

Installment Purchase Liabilities 149 - - - 149

Pensions for Former Presidents - - - 8 8

Liabilities of the Panama Canal Commission - - - 41 41

Unamortized Rent Abatements 36 - - 36

Total $190 $ - $ - $ 49 $239

Other Intragovernmental Liabilities:

Workers’ Compensation Due to DOL $ 22 $ 6 $ 2 $ 3 $ 33

Deposits Held in Suspense - - - 51 51

Payments Due to the Judgment Fund (Note 10) 227 - - - 227

Total $249 $ 6 $ 2 $ 54 $311

Other Liabilities:

Contingencies $ 6 $ - $ - $ - $ 6

Installment Purchase Liabilities 116 - - - 116

Pensions for Former Presidents - - - 8 8

Unamortized Rent Abatements 21 - - - 21

Total $143 $ - $ - $ 8 $151

TOTAL GSA

FBF GSF ITF OTHERS CONSOLIDATED

2005

2004

10 COMMITMENTS AND CONTINGENCIES
C. Contingencies Covered by GSA Funds

As of September 30, 2005 and 2004, GSA recorded liabilities

in total of $89 million and $100 million, respectively, for

pending and threatened legal matters for which, in the

opinion of GSA management and legal counsel, GSA funds

will probably incur losses. Of these amounts, for both of

those years, $84 million related to environmental claims.

Environmental claims are included in Environmental and

Disposal Liabilities, and the balance of possible contingent

liabilities are reported within Other Liabilities on the

Consolidating Balance Sheets.

In addition, GSA had another $180 million and $179 million

in contingencies at September 30, 2005 and 2004, respectively, where it is reasonably possible, but not probable, that

GSA funds will incur some cost. Accordingly, no balances

have been recorded in the financial statements for these

contingencies.

In most cases, legal matters which directly involve GSA

relate to contractual arrangements GSA has entered into

either for property and services it has obtained or procured

on behalf of other Federal agencies. The costs of administering, litigating, and resolving these actions are generally

borne by GSA unless it can recover the cost from another

Federal agency. Certain legal matters in which GSA may be

named party are administered, and in some instances litigated by other Federal agencies. Amounts to be paid under

any decision, settlement, or award pertaining thereto are

sometimes funded by those agencies.

D. Contingencies Covered by the Judgment Fund

In many cases, tort and environmental claims are administered and resolved by the U.S. Department of Justice and

any amounts necessary for resolution are obtained from a

special Judgment Fund maintained by the U.S. Treasury. 

In accordance with the FASAB’s Interpretation Number 2,

Accounting for Treasury Judgment Fund Transactions, costs

incurred by the Federal government are to be reported by

the agency responsible for incurring the liability, or to which

liability has been assigned, regardless of the ultimate source

of funding. In accordance with this interpretation, GSA

reported $22 million and $35 million in FY 2005 and 2004,

respectively, of Environmental and Disposals and Other

Liabilities for contingencies, which will require funding

exclusively through the Judgment Fund. Of those amounts,

almost $21 million and $35 million, result from several environmental cases outstanding at the end of FY 2005 and 2004,

respectively, where GSA has been named as a potentially

responsible party. Environmental costs are estimated in

accordance with FASAB’s Accounting and Auditing Policy

Committee (AAPC) Federal Financial Accounting and

Auditing Technical Release No. 2, Determining Probable

and Reasonably Estimable for Environmental Liabilities of

the Federal Government. 

Additional contingencies subject to ultimate funding from

the Judgment Fund where the risk of loss is reasonably

possible but not probable ranged from $171 million to $3.5

billion on September 30, 2005 and ranged from $170 million

to $3.5 billion on September 30, 2004. 

The recognition of claims to be funded through the

Judgment Fund on GSA’s Consolidating Statements of Net

Cost and Consolidating Balance Sheets is, in effect, recognition of these liabilities against the Federal government as a

whole, and should not be interpreted as claims against the

assets, or resources of any GSA fund, nor will any future

resources of GSA be required to liquidate any resulting

losses. Further, for most environmental claims, GSA has no

managerial responsibility other than as custodian and

successor on claims made against former Federal entities,

particularly former World War II defense related activities.

Amounts paid from the Judgment Fund on behalf of GSA

were $47 million and $34 million in FY 2005 and 2004,

respectively. Of these amounts $23 million and $26 million,

respectively, related to claims filed under the Contract

Disputes Act for which payments have been or will be made

to reimburse the Judgment Fund by the GSA funds liable

under the contacts in dispute. The balance of claims paid

on behalf of GSA does not require reimbursement to the

Judgment Fund.

F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 132
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 133

As of September 30, 2005 and 2004, budgetary resources

were not yet available to fund certain liabilities reported on

the balance sheet. For such liabilities, most are long-term

in nature where funding is generally made available in the

year payments are anticipated. These Unfunded Liabilities

consist of amounts reported on the Consolidating Balance

Sheets for FY 2005 and 2004, under the captions: Workers'

Compensation Actuarial Liability, Other Intragovernmental

Liabilities, Annual Leave Liability, Environmental and

Disposals, and Other Liabilities. In addition, balances

reported as Intragovernmental Debt for FY 2005 and 2004,

include unfunded balances totaling $58 million and $68

million, respectively. Balances reported as Obligations

Under Capital Lease included unfunded portions totaling

$273 million and $282 million for FY 2005 and 2004,

respectively. All balances reported in the Consolidating

Balance Sheets under the captions: Deposit Fund Liability,

and Earnings Payable to Treasury, as well as amounts

shown as Deposits Held in Suspense in Note 9, while

unfunded by definition, will be liquidated from resources

outside of the traditional funding process.

12 RECONCILIATION TO THE PRESIDENT’S BUDGET

11 UNFUNDED LIABILITIES

In accordance with FASAB SFFAS No. 7, Accounting for

Revenue and Other Financing Sources and Concepts for

Reconciling Budgetary and Financial Accounting, if there

are differences between amounts reported in these financial

statements verses those reported in the most recent Budget

of the United States Government (President’s Budget), they

must be disclosed. Balances submitted to the U.S. Treasury

constitute the basis for reporting of actual results in the

President’s Budget. 

Differences between the Combining Statements of

Budgetary Resources (CSBR) and the President’s Budget can

be due to adjustments identified by GSA during the preparation of the CSBR, which occurred after the U.S. Treasury’s

deadline for reporting of fund balances and budget execution results. Such adjustments to the balances reported to

the U.S. Treasury were made on the CSBR to more fully

reflect the activity for the fiscal year ended, and for balances

as of September 30, 2004. 

The basis of the CSBR is data reported to the U.S. Treasury

on the Statements of Budget Execution and Budgetary

Resources (SF 133’s). However, as the CSBR is being developed, items may be identified that require adjustment to the

data originally submitted on the SF 133’s, which would

create differences between the CSBR and the President’s

Budget. Generally, such items are identified after the deadlines for reporting to the U.S. Treasury, and reflect reclassifications of balances to report the proper status of obligations or budgetary resources. For FY 2004, the only significant adjustments of these items was due to the effect of

timing/cutoff differences carried forward from adjustments

made in FY 2003. Adjustments recorded in the ITF resulted

in decreases to obligations incurred by $69 million, and

decreases in budgetary resources of the same amount. In

the GSF, errors in original estimates lead to significant

adjustments which decreased obligations incurred and

budgetary resources by $364 million. 

Additional reconciling differences are caused by the presentation style of the President’s Budget, which excludes

Budgetary Resources, Obligations Incurred, and

Unobligated Balances in expired annual appropriated funds

but which are appropriately included in the CSBR in the

Other Funds group. Such amounts totaled $41 million, 

$14 million and $27 million, respectively, in FY 2004. 

In some instances the Office of Management and Budget

(OMB) may require additional changes to actual reported

results for pending or known changes in legislation that

affect future presentations. For FY 2004, the one instance

of this related to balances remaining in Panama Canal

Commission funds which were transferred to GSA effective
October 1, 2004. While not part of GSA’s financial reporting

for FY 2004, the President’s Budget aligned the balances of

these funds under GSA. This resulted in reconciling differences of $40 million.

The CSBR present GSA’s budgetary results in accordance

with reporting requirements prescribed in OMB Circular No.

A-11, Preparation, Submission, and Execution of the Budget,

which identifies budgetary resources available for spending,

the status of those resources, and the relationship between

obligated balances and outlays (see Note 12). For balances

reported as obligations incurred, all ITF balances are classified as exempt from apportionment, while all other significant balances in GSA's funds are classified as Category A in

accordance with OMB guidelines. 

Balances reported on the CSBR as Prior Year Recoveries

generally reflect the downward adjustment of obligations

that originated in prior fiscal years which have been

cancelled or reduced in the current fiscal year. These

balances may also include the effect of adjustments caused

when an obligation is modified to change the program or

activity that it should be charged to. In managing and

controlling spending in GSA's funds on a fund-by-fund

basis, unique budget control levels (such as programs, activities, or projects) are established. These levels are based on

legislative limitations, OMB apportionment limitations, as

well as management-defined allotment control limitations, in

order to track and monitor amounts available for spending

and obligations incurred against such amounts, as is

F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 134

FBF GSF ITF OTHERS TOTAL

CSBR PRESIDENT'S CSBR PRESIDENT'S CSBR PRESIDENT'S CSBR PRESIDENT'S CSBR PRESIDENT'S DIFFERENCE

BUDGET BUDGET BUDGET BUDGET BUDGET

Budgetary Resources $12,275 $12,272 $5,453 $5,817 $10,932 $11,001 $719 $706 $29,379 $29,796 $ (417) 

Obligations Incurred 7,982 7,982 4,859 5,223 8,601 8,670 605 619 22,047 22,494 (447)

Unobligated Balance 4,293 4,290 594 594 2,331 2,331 114 88 7,332 7,303 29 

Obligated Balance 1,216 1,218 (171) (171) (2,043) (2,043) 171 212 (827) (784) (43) 

Outlays (501) (501) (127) (121) 27 39 202 199 (399) (384) (15)

required under the Anti-Deficiency Act (ADA). When an

obligation from a prior year is modified to change the level

or category of an obligation, a Prior Year Recovery would be

recognized in the category that was initially charged, and

Obligations Incurred would be recognized for the category

that the obligation was changed to. While there may be no

net change to total obligations in a particular fund, offsetting

balances would be reported on these lines of the CSBR.

The basis of the CSBR is data reported to the U.S. Treasury

on the SF 133s. However, as the CSBR is being developed,

items may be identified that require adjustment to the data

originally submitted on the SF 133s. Generally, such items

are identified after the deadlines for reporting to the U.S.

Treasury, and reflect reclassifications of balances to reflect

the proper status of obligations or budgetary resources. 

For FY 2005, the most significant differences were due to the

effect of adjustments made to the CSBR as a result of statistical samples of Undelivered Orders, Unfilled Customer

Orders, and Delivered Orders. Projections of such adjustments to particular funds, which are based on extrapolations

of aggregate amounts, cannot readily be determined to the

detailed levels that are required to accompany SF 133

reporting. 

13 STATEMENT OF BUDGETARY RESOURCES

The most significant comparable amounts reported in the 

FY 2004 CSBR and FY 2006 President’s Budget, and the total

differences where the CSBR contains balances greater or

(less) than amounts reported in the President’s Budget are

as follows (dollars in millions):
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 135

FBF GSF ITF TOTAL

Change in Unfilled Customer Orders $ (303) $ (34) $ (701) $ (1,038)

Prior Year Recoveries 62 47 227 336

Obligations Incurred (41) (12) (102) (155)

Unobligated Balance - Available (262) (22) (372) (656)

Unobligated Balance - Not Available 62 47 - 109

Unfilled Customer Orders - Uncollected (303) (34) (701) (1,038)

Undelivered Orders - Unpaid (123) (59) (329) (511)

Accounts Payable 20 - - 20

The table above displays the differences between the CSBR

and SF 133 reports due to increases (decreases) to CSBR

balances caused primarily by the statistical sampling adjustments (dollars in millions):

For the ITF, due to the nature of the errors found in the

statistical samples, potentially material amounts related to

Unfilled Customer Orders are likely overstated in the 

FY 2004 CSBR. In connection with GSA's “Get It Right”

program, FTS has been implementing new controls over

customer orders and obligations. During FY 2005, FTS had

begun to review unfilled order balances to close out

amounts where projects had been completed, where the

use of remaining unfilled order balances was not likely, or

the original funding had expired. Both the new controls

and the statistical sampling results indicated that closeout of

unfilled customer orders in the past had not been timely.

The sampling results helped quantify the remaining amount

of unfilled orders that are no longer valid, however, determining a reasonable estimate of such overstatement for the

end of FY 2004 has not been feasible due to system limitations and other constraints. Management believes that the

errors that might exist in unfilled orders at the end of 

FY 2004 may be as large as the amounts found in FY 2005,

or higher. 

Additionally, year-end analysis determined that certain

balances of unfilled orders had been erroneously recorded

to the ITF that should have been recorded to the GSF in

both FY 2005 and 2004. Such balances were adjusted by

$89 million in the FY 2005 ending balances reported on the

CSBR, however, the determination of amounts requiring

adjustment at the end of FY 2004 could not be readily determined. It is possible that material amounts were in error

between the GSF and ITF at the end of FY 2004.

Management continues to review current balances of

unfilled customer orders on an ongoing basis. Accordingly,

the balances and activity of unfilled customer orders and

related budgetary amounts reported in the FYs 2004 and

2005 CSBR and the Consolidated Statements of Financing

for the ITF, the GSF, and GSA may be affected by further

adjustments.
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 136

A. Cumulative Results of Operations

Cumulative results of operations for Revolving Funds

include the net cost of operations since their inception,

reduced by funds returned to the U.S. Treasury, by congressional rescissions, and by transfers to other Federal agencies,

in addition to balances representing invested capital.

Invested capital includes amounts provided to fund certain

GSA assets, principally land, buildings, construction in

process, and equipment, as well as appropriated capital

provided as the corpus of a fund (generally to meet operating working capital needs).

GSA's Federal Buildings Fund (FBF), General Supply Fund

(GSF), Information Technology Fund (ITF), Working Capital

Fund (WCF), and Federal Consumer Information Center

Fund (FCICF) have legislative authority to retain portions of

their cumulative results for specific purposes. The FBF

retains cumulative results to finance future operations and

construction, subject to appropriation by Congress. In the

GSF, earnings are retained to cover the cost of replacing the

motor vehicle fleet and supply inventory. The ITF retains

cumulative results to provide financing for major systems

acquisitions and improvements, contract conversion costs,

major contingencies, and to maintain sufficient working

capital. The WCF retains earnings to finance future operations. The FCICF retains cumulative results to finance future

operations, subject to appropriation by Congress.

B. Unexpended Appropriations

Unexpended Appropriations consist of unobligated

balances, and undelivered orders, net of unfilled customer

orders in General Funds that receive appropriations.

Undelivered orders are orders placed by GSA with

vendors for goods and services that have not been

received. Unfilled customer orders are reimbursable

orders placed with GSA by other agencies, other GSA

funds or from the public where GSA has yet to provide the

good or service requested. At September 30, 2005 and

2004, balances reported as unexpended appropriations

were as follows (dollars in millions):

2005 2004

Unobligated Balances:

Available $ 24 $ 55

Unavailable 22 19

Undelivered Orders 80 69 

Unfilled Customer Orders, Net (21) (3)

Total Unexpended Appropriations $ 105 $ 140

14 STATEMENTS OF CHANGES IN NET POSITION
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 137

15 EMPLOYEE BENEFIT PLANS

A. Background

Although GSA funds a portion of pension benefits for its

employees under the Civil Service Retirement System

(CSRS) and the Federal Employees Retirement System

(FERS) and makes the necessary payroll withholdings

from them, GSA is not required to disclose the assets of

the systems or the actuarial data with respect to accumulated plan benefits or the unfunded pension liability

relative to its employees. Reporting such amounts is the

direct responsibility of the Office of Personnel

Management (OPM). Reporting of health care benefits for

retired employees is also the direct responsibility of OPM.

In accordance with SFFAS Number 5, Accounting for

Liabilities of the Federal Government, GSA recognizes the

normal cost of pension programs and the normal cost of

other post-employment health and life insurance benefits,

as defined in that standard, on the Consolidating

Statements of Net Cost. While these costs will ultimately

be funded out of direct appropriations made to OPM and

do not require funding by GSA activities, they are an

element of government-wide costs incurred as a result of

GSA’s operations.

B. Civil Service Retirement System

At the end of FY 2005, 32.8 percent (down from 35.9

percent in FY 2004) of GSA employees were covered by the

CSRS, a defined benefit plan. Total GSA (employer) contributions (9.01 percent of base pay for law enforcement

employees, and 8.51 percent for all others) to CSRS for all

employees in FY 2005 and 2004 amounted to $25 million

and $26 million, respectively.

C. Federal Employees Retirement System

On January 1, 1987, FERS, a defined contribution plan, went

into effect pursuant to Public Law 99-335. Employees hired

after December 31, 1983, were automatically covered by FERS

and Social Security while employees hired prior to January 1,

1984, elected to either join FERS and Social Security or remain

in CSRS. As of September 30, 2005, 66.9 percent (up from 63.7

percent in FY 2004) of GSA's employees were covered under

FERS. One of the primary differences between FERS and CSRS

is that FERS offers automatic and matching contributions into

the Federal government's Thrift Savings Plan (TSP) for each

employee. Under CSRS, employees can invest up to 10

percent of their base pay in the TSP. Employees under FERS

can invest up to 15 percent of base pay, plus GSA will automatically contribute one percent of base pay and then match

employee contributions up to an additional four percent of

base pay. During FY 2005 and 2004, GSA (employer) contributions to FERS (23.3 percent of base pay for law enforcement

employees and 10.7 percent for all others) totaled $65 million

and $55 million, respectively. Additional GSA contributions to

the TSP totaled $25 million and $23 million in those years,

respectively.

D. Social Security System

GSA also makes matching contributions to the Social Security

Administration (SSA) under the Federal Insurance

Contributions Act (FICA). For employees covered by FERS,

GSA contributed matching amounts of 6.2 percent of gross pay

(up to $90,000 in calendar year 2005, and $87,500 in calendar

year 2004) to SSA's Old-Age, Survivors, and Disability

Insurance (OASDI) program in calendar year 2005.

Additionally, GSA makes matching contributions for all
employees of 1.45 percent of gross pay to the Medicare

Hospital Insurance program in calendar year 2005. Only 

0.3 percent (down from .04 percent in FY 2004) of GSA's

employees are covered exclusively by these programs.

Payments to these programs in FY 2005 and 2004 amounted

to $50 million and $48 million, respectively.

E. Schedule of Unfunded Benefit Costs

Amounts recorded in FY 2005 and 2004, in accordance with

SFFAS Number 5 for post-employment benefits are as

follows (dollars in millions):

2004

FBF $ 15 $ 26 $ 41

GSF 9 12 21

ITF 5 6 11

Other Funds 9 10 19

Total $ 38 $ 54 $ 92 

2003

FBF $ 16 $ 22 $ 38

GSF 9 11 20

ITF 5 5 10

Other Funds 9 9 18

Total $ 39 $ 47 $ 86 

PENSION

BENEFITS

HEALTH/LIFE

INSURANCE TOTAL

2005

2004

During the last three fiscal years, GSA’s Office of Inspector

General (OIG) performed audits of offices in the Federal

Technology Service (FTS) that identified a variety of questionable and improper contracting practices, including the

use of the ITF for non-IT purposes in violation of the

Purpose Statute, 31 USC 1301(a). GSA did, however, have

other funds that were properly available to contract for the

services in question. All significant financial effects of such

transactions applied to activities from FY 2003 and prior. 

From the audit work performed in fiscal years 2005 and

2004, the OIG reported that FTS has made significant

progress in the implementation of new controls governing

procurement activities; that the current controls in place are

sufficient to prevent chronic ADA violations from occurring;

and that GSA's newly implemented controls provide greater

assurance that future systemic breaches of contract,

accounting, and appropriations law are unlikely to reoccur.

Even with these improvements, the OIG continued to find

examples of failure to fully comply with internal control

requirements in 11 of 12 program offices. Under provisions

of the Ronald W. Reagan National Defense Authorization Act

for FY 2005 (P.L. 108-375), further failures in compliance

with internal controls , particularly related to the Department

of Defense (DoD) procurement requirements could result in

severe curtailment of future DoD procurements through FTS

for any office that does not correct such weaknesses. 

Inappropriate use of the ITF resulted in two violations of the

Antideficiency Act, 31 USC 1341 (a). During FY 2005, these

violations were reported to the President and the presiding

officers of each House of Congress as required by law. It is

possible that additional violations of the Anti-Deficiency Act

could be identified and reported in connection with ongoing

audits and management evaluations.

16 FTS CONTRACTING IRREGULARITIES

F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 138
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 139

GSA did not bill its customers at those locations for normal

September rents. This foregone rent totaled approximately

$3 million to the FBF.

In GSA’s fleet management operations, an estimated 1,500

vehicles were damaged, and a charge of $9 million was

recorded in the GSF to recognize the probable loss as most of

these vehicles will likely be disposed of for nominal values. 

17 EFFECTS OF NATURAL DISASTERS

During FY 2005, GSA properties and assets sustained

damages from the effects of Hurricanes Katrina and Rita. In

GSA’s building operations, damage was sustained in 16

government-owned buildings, and 67 leased buildings that

GSA occupies. While no properties were destroyed by the

hurricanes, there are expected to be significant clean-up

costs, which have not yet been reliably estimated. As

access to 78 of these buildings was significantly curtailed,
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 140

Deferred Maintenance 

As of the end of FY 2005, GSA had no material amounts of deferred maintenance cost to report. GSA administers the

Building Maintenance Management Program that, on an ongoing basis, maintains the Building Class inventory in

acceptable condition, as defined by GSA management. GSA utilizes a condition assessment survey methodology,

applied at the overall portfolio level, for determining reportable levels of deferred maintenance. Under this methodology,

GSA defines "acceptable condition" and "acceptable level of service" in terms of certain National Performance Measures,

formulated under the provisions of the Government Performance and Results Act (GPRA) of 1993. 

GSA expenses normal repair and maintenance costs as incurred. Although GSA has no substantive backlog of deferred

maintenance tasks, the average building in the GSA inventory is 44-years-old, and only 25 percent of these buildings have

had extensive modernization. This has led to a large inventory of capital Repairs and Alterations (R&A) work items of which

approximately $6.5 billion has not yet been addressed by an ongoing Public Buildings Service (PBS) R&A project. As this

backlog is related to capitalizable improvements and modernization, they are not considered deferred maintenance in

accordance with SFFAS No. 6, Accounting for Property, Plant, and Equipment, which is intended to report only maintenance items that would be expensed through the normal course of business. For FY 2006, GSA has requested new obligational authority of approximately $961 million for the R&A program.

Intragovernmental Balances

Substantially all of GSA’s program operations and operating results are categorized as general government functions. 

For FY 2005, the following schedule identifies major customers of GSA's intra-governmental revolving funds and the associated amount of sales representing more than 80 percent of GSA's total consolidated revenues (dollars in millions):

Required Supplementary Information

AGENCY AMOUNT

Department of the Army $ 2,879

Department of the Air Force 1,971

Department of the Navy 1,700

Department of Justice 1,545

Department of Homeland Security 1,453

Judiciary 1,017

Department of the Treasury 830

Department of Defense 769

AGENCY AMOUNT

Department of Health and Human Services 731

Social Security Administration 619

Department of the Interior 504

Department of Agriculture 478

Department of State 443

Others 3,141

Total $ 18,080
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 141

The following schedule reflects accounts receivable balances owed to GSA as of September 30, 2005, from the major

customers of GSA's intra-governmental revolving funds, representing over 80 percent of GSA's total consolidated accounts

receivable (dollars in millions):

GSA reported $2,825 million of intra-governmental liabilities on its Balance Sheet as of September 30, 2005. Of that balance,

the significant elements included the following items: 

AGENCY AMOUNT

Department of the Treasury (Borrowings) $ 2,201

Department of Treasury (Judgment Fund) 244

Department of Labor (Workers’ Compensation) 33

Others 347

Total $2,825

AGENCY AMOUNT

Department of the Army $ 480

Department of the Air Force 262

Department of the Navy 208

Department of Defense 199

Department of Homeland Security 85

Department of Justice 72

Department of Agriculture 67

Department of Health and Human Services 56

Others 341

Total $1,770
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 142

ACQUISITION PROGRAMS

I

n August 2005, the GSA Administrator announced a

major reorganization of GSA’s acquisition services.

Subsequently, steps have been taken to merge the

Federal Supply Service (FSS) and Federal Technology

Service (FTS) into the new Federal Acquisition Service

(FAS). The goal of reorganization is to streamline

organizational structures and strengthen GSA’s capability

to provide excellent acquisition services to customer

agencies at the best value, and to make it easier for

contractors to understand and participate in GSA’s

acquisition processes. FAS will operate on a cost recovery

basis and will provide clear lines of accountability for

business lines. Currently, there are approximately 3,000

full-time equivalent employees (FTE) in FSS and 1,500 in

FTS. The annual value of contract actions is between 

$40 and $50 billion with revenues now exceeding 

$11 billion. The two Services have their own fee

structures, information systems, policies, procedures, and

management controls. Combining segments of FSS and

FTS operations into a new organization will create

management challenges in these areas. 

At the same time GSA is attempting to combine its two

procurement organizations, cash-strapped customer

agencies are following the advice of the Office of

Management and Budget (OMB) and are developing

strategic sourcing procurement programs. Under this

approach, agencies amass their common goods and

services, consolidating their requirements into one or a

few awards, with the expectation of suppliers

substantially lowering prices. This practice is being used

more frequently and presents a new dynamic that GSA

must factor into its business lines.

As part of the reorganization, the Office of Chief Financial

Officer (OCFO) is planning for the merging of the

Information Technology Fund (ITF) and General Supply

Fund (GSF) into the Acquisition Service Fund. This

merger must receive congressional approval. In merging

these two revolving funds, management will be faced

with the significant challenge of ensuring that the

transition process does not impact operations and that

sufficient controls are in place over the new fund.

Throughout the FTS/FSS reorganization process, GSA has

relied on Steering Teams to promote a seamless merger.

The OCFO Steering Team is addressing the requirements

for merging the ITF and the GSF utilizing a team

comprised of employees with expertise in the areas of

financial policy, financial systems, and budgetary policy.

A discussion of the more significant issues follows.

ISSUE: GSA provides Federal agencies with products and

services valued in the billions of dollars through various

types of contracts it establishes and administers. Among

other contracting programs and vehicles, GSA is

responsible for the Multiple Award Schedule (MAS)

program, a significant number of Multiple Award

Contracts (MAC), Government Wide Acquisition Contracts

(GWAC), and the City Pair Airline contracts. Although the

Office of Inspector General’s (OIG) specific concerns vary

somewhat depending on the contracting program or

vehicle, management challenges in this area generally

center on the contract evaluation and award process, and

involve the often-related issues of (1) competition, 

(2) pricing, and (3) implementation of statutory or

regulatory compliance-type requirements. 

Supplemental Information and 

Other Reporting Requirements

Office of Inspector General’s Updated Assessment 

Of GSA’s Major Management Challenges
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 143

THE MAS PROGRAM provides Federal agencies with a

simplified procurement process for the purchase of a

diverse range of commercial supplies and services from

multiple vendors at prices associated with volume buying.

MAS contracts are awarded to contractors supplying the

same generic types of items or services at varying prices

for delivery within the same geographic areas. Federal

agencies then simply order supplies or services from the

schedules (or catalogs) at the pre-negotiated prices and

pay the contractors directly for their purchase. GSA

administers more than 50 schedules that produced sales of

$31 billion in FY 2004, and the volume is expected to

continue to grow. 

The OIG is concerned that, as the MAS program has

grown, the importance of certain program fundamentals –

including pricing objectives and other pricing tools – has

diminished. These fundamentals, which are set out by

regulation, include the mandate for most-favored

customer (MFC) pricing, the requirement to perform

meaningful price analysis when awarding or extending

contracts, and the use of preaward audits to assist in

negotiating contracts. MFC pricing ensures that MAS

contract pricing harnesses the Federal government’s

collective buying power for pricing purposes. Price

analysis is the key substantive step a contracting officer

performs for the purpose of arriving at fair and reasonable

prices. Preaward audits are the main tool by which a

contracting officer can be assured that a vendor’s pricing

is appropriate. Such audits also provide contracting

officers with additional details regarding a vendor’s pricing

and sales practices in anticipation of negotiations. 

In past reviews, the OIG reported that FSS was not

consistently negotiating most favored customer prices,

many MAS contract extensions were accomplished

without adequate price analysis, and available tools were

not being used effectively to negotiate better MAS prices.

Contracting officials have expressed concern that because

of an extremely heavy workload they often feel pressure

to award contracts even though price analysis has not

been done. In a February 2005 report, the Government

Accountability Office (GAO) found that although FSS had

developed a postaward quality review of contracts—a

process that has identified deficiencies in contract file

documentation—the underlying causes of these

deficiencies or the actions needed to address them have

not been determined. GAO concluded that as a result,

GSA cannot be assured that fair and reasonable prices

have been negotiated for its MAS contracts. 

With the support and endorsement of OMB, GSA has

provided to the OIG additional financial support enabling

it to markedly increase the number of preaward contract

reviews it performs. Acquisition officials have agreed to

support the efforts of the OIG auditors by ensuring that

vendors submit the data necessary for adequate evaluation

so that the OIG’s results can be reported timely. An MAS

Working Group, comprised of Agency and the OIG

representatives, has developed guidance for contracting

officers regarding the performance and use of preaward

MAS contract reviews. In addition, the Agency has

established a program for pre-negotiation clearances to

ensure the quality of its most significant contract

negotiations. In this process, the contract negotiator

presents to a panel a summary of his or her actions in

developing negotiation objectives, including market

research, contractor responsibilities, and price analysis.

The panel may include individuals with substantial

contracting experience, auditors, product or service

experts, legal counsel, and other acquisition staff, and will

provide comments or suggestions as necessary. 

MACs are appropriate when the government cannot

predetermine, above a specified minimum, the precise

quantities of supplies or specific services that will be

required during the contract period. Using source selection

procedures, GSA competitively awards multiple contracts

covering the same scope of work and then, as needs are

identified for specific tasks and products, agencies compete

the task/delivery orders among the contract holders. The

use of MACs is encouraged by the Federal Acquisition

Streamlining Act of 1994 to promote best value and the fair

opportunity for contract awardees to compete among
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 144

Supplemental Information and 

Other Reporting Requirements

themselves. The competition is intended to lower prices,

obtain better quality, reduce delivery time, and improve

customer service. Each of GSA’s three major Services has

developed MACs. However, at times the opportunity to be

considered for task orders has been unnecessarily limited,

thus reducing the possibilities for lower prices, better

quality, reduced delivery time, and improved customer

service.

GWACs are MACs for information technology (IT). GSA is

preparing to award two GWACs for IT services totaling $100

billion over 10 years. Based on experience with other

GWACs, GSA can expect a significant drain on its

acquisition resources. These contracts are coming into

existence at the same time that GSA is reorganizing its

acquisition services and responding to the deficiencies

identified in its Client Support Center (CSC) audits, with

special emphasis on ‘Getting it Right’. GWACs are awarded

to a limited number of vendors. Once the contract is

awarded, solicitation of proposals for task orders, are

limited to those vendors.

AIRLINE CITY PAIR contracts are awarded annually. The

$1 billion program provides Federal travelers with below

market fares and provides advantages over commercial

restricted coach fares, including unrestricted and fully

refundable fares, no penalties for cancellations or

schedule changes, and stable fare prices. To ensure the

best value possible for Federal agencies, FSS needs to

consider applying private sector practices when

evaluating offers, make travelers aware of benefits of

using lower capacity controlled fares, and ensure that

measurement data is received from the airlines, banks,

and travel management centers. 

CSCs. Over the past two years, the OIG has identified

improper contracting practices at FTS CSCs in several

regions, and it has several reviews in process. In making

these contract awards, CSC officials breached government

procurement laws and regulations, and on a number of

occasions, processed procurement transactions totaling

more than $100 million through the ITF for goods and

services that were well outside the fund’s legislatively

authorized purposes. Inappropriate contracting practices

included: improper sole source awards, misuse of small

business contracts, allowing work outside the contract

scope, improper order modifications, frequent

inappropriate use of time and materials task orders, and not

enforcing contract provisions. Several factors contributed to

these problems—an ineffective system of internal

management controls, personnel sacrificing adherence to

proper procurement procedures in order to accommodate

customers’ preferences, and a culture that emphasized

revenue growth. The OIG reports have received the

attention of senior management, several congressional

committees, OMB, and the media. In addition, other

Federal agencies, particularly the Department of Defense

(DoD), have initiated analyses of contract actions since

these questionable procurement actions were done on

behalf of work requests from other agencies. Because of

these concerns, Congress, in the 2005 Defense

Authorization Act, directed that the GSA and DoD Inspector

General (IG) offices review each CSC to determine if they

are compliant with Federal and DoD specific procurement

regulations. The OIG reported in its June 2005 reviews that

GSA had made significant progress toward becoming

compliant with procurement regulations, although more

needs to be done. Another round of reviews is starting and

is to be completed by March 2006. By this time, the CSCs

must earn a fully compliant opinion. Otherwise their

customers from DoD will be prohibited from using GSA

contracts for many of their procurement needs—an action

that would severely impact GSA’s mission. 

OTHER ISSUES: Ensuring competition under the GWACs

will be a challenge. During the reviews of the CSCs, the

OIG concluded that often bids are received from only one

vendor, although the solicitation was sent to all the

contract holders. This could be because of the incumbent

having a competitive advantage in its knowledge of the

task. GSA needs to focus on ensuring that the

government receives competition and best value on its

procurements.
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 145

Another challenge is ensuring that MAS’s, GWACs, and

other contract vehicles are used for their intended

purposes. The OIG reviews of the depot modernization

and the CSCs showed that service contracts were also

being used to procure large quantities of

products/materials. However, the price of

products/materials is not pre-established and must be

determined on a case-by-case basis. As a result, there is

little assurance that the government receives best value

for products/materials.

In addition, the broad scope of the Federal Acquisition

Regulations (FAR) definition of a commercial item is a

management challenge for GSA. Under the current

definition, a commercial item is any item and many

services “of a type” customarily used by the general

public. Thus, the current FAR definition of a commercial

item does not require a vendor to have any commercial,

competitive sales of a product or service. The MAS

policy operates under the premise that: (1) GSA vendors

would routinely sell their commercial products and

services to the general public in a competitive open

market, (2) this competitive process would establish

“market prices” (fair and reasonable prices), and (3) GSA

contracting officers could use market prices as a starting

point in negotiations to establish a government price that

was equal to a like buyer in the private sector.

Based on this expanded definition of a commercial item,

it has been the OIG’s experience that many MAS vendors

have only Federal government sales and sometimes only

MAS sales. There are also vendors who have commercial

sales but who organizationally segregate units that do

commercial business from those that do government

business. The OIG has also seen commercial items that

are actually special purpose items that are only purchased

by specific government customers. An example is a

weapon system tool kit. In addition, the OIG has found

that, although a commercial market exists for a vendor’s

services, its commercial contracts are typically awarded

on a firm fixed price basis, while its GSA schedule clients

have been mainly doing business on a time & materials

basis. All of these scenarios present difficult challenges in

terms of comparability and impact a contracting officer’s

ability to do valid price analyses.

PROCUREMENT TEAM EXPERTISE: During audits of

procurements made by GSA’s CSCs, it seemed that

frequently, neither GSA nor its customer agencies had the

expertise to prepare statements of work (SOW), evaluate

vendor proposals, or prepare independent government

cost estimates for many service task orders. 

The ordering contracting officers (OCO) who place orders

for “commercial” items against the MASs, MACs, and

GWACs are, in many cases at an even greater

disadvantage than the contracting officers awarding

MASs, MACs, and GWACs. OCOs are expected to get

even better prices and rates on large orders and are to

obtain competition for the orders they award. The OIG’s

experience has been that many of the largest tasks are

awarded to the same vendor time after time and often no

other vendors bid on the task.

In addition, OCOs frequently have to negotiate costs for

items that are not included in a MAS, a MAC, or a GWAC,

but are ancillary to accomplishing the purpose of the

task/delivery order. Unfortunately, the OCOs don’t often

know if they are paying twice for some costs – costs that

may already be included in a fully burdened labor rate. 

Contracting officers usually establish commercial item

prices and rates by comparing proposed prices and rates

to those previously negotiated for other MAS vendors’

contracts, which can result in price and rate creep. The

FAR discourages contracting officers from analyzing

vendor cost data underlying prices for commercial

products and services.

E-TRAVEL CONTRACTS. GSA has awarded e-Travel contracts

worth an estimated $450 million to three large businesses.

All civilian agencies are expected to complete migration
Supplemental Information and 

Other Reporting Requirements

F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 146

to e-Travel by September 30, 2006. It has been reported

during the deployment testing that not all city-pair

options are showing up in the booking engine. Unless

corrected, inaccurate data will result in Federal travelers

paying for fares higher than the city-pair fare.

Management is currently working to address this issue.

More importantly, both the House and Senate have

placed restrictive language in the FY 2006 in-process

appropriation bills that may require award of a significant

portion of e-Travel to small businesses. 

SMARTBUY, initiated in June 2003, is a government-wide

software enterprise licensing program developed by GSA

in coordination with OMB. SmartBuy enterprise software

agreements consolidate the purchasing power of the

Federal government by focusing these volume

requirements to obtain optimal pricing and preferred

terms and conditions for widely used commercial

software. To ensure that goals of reducing duplication

and schedule maintenance costs are met, management

needs to closely coordinate the SmartBuy activities with

the MAS program. 

AGENCY ACTIONS - REORGANIZATION

The primary goal of the reorganization is to provide

excellent acquisition services in order to meet the

increasing needs of customer agencies. GSA is creating an

organization model that is focused on achieving this goal,

while at the same time seeking to create an efficient and

effective FAS organization that provides value to the

Federal government and taxpayers. The Administrator has

tasked several teams with developing organizational

approaches and a mission statement for each business line

under the new FAS organization. GSA is reporting on the

progress of each of these teams on the Agency’s Web site. 

The FAS Acquisition Management team, led by GSA's Chief

Acquisition Officer (CAO), is working to create an

organization that will partner with the CAO's office to

enhance the GSA workforce by fostering acquisition

excellence in training and work environments. The

Acquisition Management team is also focused on ensuring

consistency among the GSA schedules contracts. This team

must create an organization that optimizes GSA processes,

while ensuring that customers and suppliers have a

positive and consistent FAS experience. 

The General Supplies & Services team is committed to

developing an acquisition-focused organization. This

business unit will deliver quality products and services to

customers using non-IT schedules and GSA’s Global

Supply logistics experience. The team has defined what

they believe are the core values in customers’ overall

expectations, and are looking for opportunities to do more

large-scale or "strategic" buys. 

The Travel, Vehicles, and Personal Property Disposal team

is exploring ways to improve fleet operations to ensure that

GSA has the right emphasis on travel and credit card

programs. 

The Customer Relationship Management (CRM) team is

designing an organization that will develop strategic

acquisition strategies with headquarters agency customers,

while also providing customer intelligence to support the

business portfolios. The CRM team seeks to optimize GSA’s

opportunity for creating solid customer solutions. 

The Integrated Technology team is challenged with the

task of integrating the IT and Professional Services

Acquisition Centers with IT Solutions and Global

Telecommunications. They have identified the majority of

the contracts that fall under this portfolio and have

sketched the outline of an organization design. They have

combined the best practices from each of the former

organizations to improve the overall strategy of delivering

customer value. 

AGENCY ACTIONS - OTHER

On July 13, 2004, GSA unveiled a comprehensive plan

designed to ensure improved contracting operations and

proper use of GSA’s contracting vehicles. The “Get it
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 147

Right” plan aims to make acquisition policies, regulations,

and procedures clear and explicit and improve the

education/training of the Federal acquisition workforce on

the proper use of GSA contracting vehicles and services.

GSA worked closely with other Federal agencies,

particularly DoD, in identifying actions necessary to ensure

proper use of GSA contracting vehicles by GSA and other

agencies. The plan is a work in progress that will be

continuously refined and updated.

Many of the problems identified in the CSC audits related

to OCO, vendor, and user agency misuse of GSA contract

vehicles. As a result, GSA is also challenged with ensuring

its overall contracts are properly used by OCOs. FSS

GWAC centers have been incorporating OCO, vendor, and

user agency requirements into their GWACs. In addition,

the GWAC centers will train OCOs, delegate procurement

authority to OCOs, and monitor use of the GWACs.

The OIG continues to participate with FSS on a working

group to review current MAS procurement practices, and

analyzes potential enhancements to program pricing

activities. The group is comprised of representatives from

the Office of Acquisition Policy, General Counsel, FSS

acquisition, and the OIG. On April 29, 2005, FSS issued a

revised Procurement Information Bulletin (PIB) to update

guidance and instructions to contracting officers in

requesting audit assistance from the OIG when exercising

options to extend the term of a contract. The principles in

the PIB also apply to audits of new MAS offers. The PIB

should help contracting officers take better advantage of

the assistance that can be provided by the OIG. 

FSS is supporting FAR changes that will require agencies

acquiring services using the MAS services schedules to

attempt to obtain better-than-negotiated pricing on large

procurements. On June 18, 2004, the FAR Council issued

a final ruling regarding ordering procedures under GSA’s

MAS contracting program. Among other things, the final

rule requires ordering agencies to seek competition among

MAS vendors, document their award decisions, and seek

additional price reductions under Blanket Purchase

Agreements (BPA). 

GSA worked with an interagency committee to develop a

best practices guide, Seven Steps to Performance-Based

Services Acquisition. Additionally, a Center of Expertise

has been established to gather sample SOWs and develop

a template for performance-based service contracting

solicitations.

In June 2004, GSA established a new Office of the Chief

Acquisition Officer (OCAO), aimed at ensuring compliance

with Federal contracting rules, fostering full and open

competition for contracts, and strengthening accountability

in contracting. The office absorbed many of the functions

formerly in the Office of Governmentwide Policy (OGP).

CONTRACT MANAGEMENT

ISSUE: GSA increasingly accomplishes its mission by

using contractors to provide client services and products.

In recent years, GSA added new procurements valued at

more than $13 billion to its active contract inventory. In

October 2004, GSA awarded a new national broker

contract with the intention of transitioning, over time, the

majority of its lease acquisitions to four broker

contractors. In FY 2004, the Public Buildings Service

(PBS) had more than 8,200 private sector leases that

generated more than $4 billion in direct revenue. While

GSA gains tremendous advantage by leveraging its human

capital to manage and arrange for work to be performed

by contractors, the corporate skill base necessary to

effectively manage contracts is not keeping pace with the

growth and complexity of this important activity.

Through various audits performed over recent years, the

OIG has observed certain trends that cause it to be

concerned with contract management. Some points it has

noted are:

Weak selection criteria permit poor performing

contractors to win awards, or projects were

awarded to contractors with no expertise in the

services needed. Task objectives were poorly

crafted, milestone plans were missing, and
Supplemental Information and 

Other Reporting Requirements

F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 148

unauthorized personnel issued some task orders. In

addition, contracts were awarded without

appropriate clauses to hold contractors responsible

for protecting sensitive data from unauthorized

release.

Use of contract formats that offer no incentives to

keep projects moving or control costs. Contractors

often neglect to establish required quality control

programs, or do not submit firm construction

schedules meaning that delays are unknown until

they become serious.

GSA personnel providing limited project oversight,

acting too slowly in making project-critical

decisions, and at times not inspecting completed

work projects prior to payment. Also, not all

services paid for were provided, and other

approvals to pay for services invoiced often lacked

supporting documentation.

GSA leasing officials did not monitor receipt of

services required under leases and relied on

tenant complaints for identifying service

deficiencies rather than taking a proactive

approach to ensuring required services are

provided. The OIG also noted a lack of

documentation supporting whether identified fire

and other safety conditions in leased facilities

were corrected.

In the OIG’s briefings to GSA senior management, it has

emphasized that effective contract management starts

with complete acquisition planning; relies on sound

source selection criteria to select only the best

contractors; requires clear and concise contract language;

demands well trained contract administrators; and needs

well defined work or task order requirements, including

milestone plans with positive and negative incentives,

and more important, assertive action to get wayward

contracts promptly on track. There is a heightened need

for improvement efforts as GSA’s contracting workload

continues to increase at a rapid rate. While many GSA

contracts are well crafted and properly administered, the

OIG is finding weaknesses more often.

In October 2004, GSA awarded the National Broker

Contract to provide leasing services for up to 3.2 million

square feet of space throughout the country. GSA

predicts that much of the real property contracting

process will be done by personnel from one of four

national commercial property management firms, which

will handle about 50 percent of the new leasing workload

in the first year of the contract. PBS found it necessary

to contract for these services because the number of

realty specialists is shrinking while the amount of space

they are responsible for is growing. Turning over such a

large part of the workload will create a new demand on

PBS Realty specialists who will now have major contract

oversight responsibilities. The OIG’s greatest concern is

turning over such an important part of PBS workload

(both in size and dollars) to contractors who will be paid

by the lessor. The ‘no cost’ aspect of the contracts allows

for the brokers to collect payment from landlords in the

form of commissions. Consequently, the incentives to

keep costs down and the controls to prevent collusion or

(in cases where they may have a relationship with the

potential lessor) to prevent steering the award to a

preferred lessor are key to the success of the contract.

There may also be proprietary data issues where one GSA

contractor seeking a lease award may be required to

provide proprietary data to a competitor which is

overseeing the award. This may lead to impaired

competition. Moreover, the implementation of the

broker contract is very dependent on post award

oversight, which has been a weakness at GSA in the past. 

AGENCY ACTIONS: GSA has provided training in source

selection and related procurement issues for property

development personnel. It has also established an 

online folder to post source selection best practices.

Contracting officers are receiving classes in advanced

source selection and refresher training on aspects of

construction project administration, such as critical path

analysis, enforcement of clauses and scheduling, claims

management, processing change orders, and linking the

indirect costs of client directed changes back to clients. 
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 149

In developing the new national broker contract, the

Agency took into consideration several of its concerns

from the prior national broker contracts by including

controls for oversight and follow up. PBS established a

certification training plan for PBS Realty personnel

involved with the broker contract. Key personnel will be

required to hold a Leasing Warrant. PBS has put in place

processes and procedures to ensure tight monitoring and

control is administered over the contractor’s negotiations

and properties. 

INFORMATION TECHNOLOGY

ISSUE: With the increased development and implementation

of new IT systems within GSA to perform its mission and

manage its operations, challenges in this area continue to

increase. Many of GSA’s systems store and process

sensitive information, including personal employee data,

financial data, and contractors’ proprietary information.

Management challenges related to systems requirements

and performance are faced at all phases of development,

implementation, and operation. Further, it is critical that the

IT Security Program adequately manage all IT security risks.

GSA is the lead agency for five E-Government initiatives;

two of the initiatives address government-to-business or

government-to-citizen services and three initiatives are to

provide services to other government departments and

agencies. These IT applications, developed to better

manage operations and interface with the public, also give

rise to complex integration and security issues that must be

addressed. Success is dependent upon breaking

development into short-term manageable segments with

performance-based deliverables consistent with system

objectives. 

SYSTEMS DEVELOPMENT: GSA is in the process of replacing

a number of its old systems, in keeping with technological

advances and to meet current regulations. Many of the IT

projects are designed to go beyond automating current

business functions and create real change in the way that

GSA does business. However, GSA has experienced

recurring difficulty in deploying and maintaining structured

system development practices that ensure the proper

development of requirements as well as implementation of

prescribed system processes. As a result, GSA systems

commonly experience development schedule delays and

cost overruns, need frequent redesign, and have difficulty

providing all intended functions and sharing usable data

between systems. 

Many GSA IT projects attempt to minimize development

cost and deployment schedules by developing systems

based on existing commercial-off-the-shelf (COTS) software

packages. COTS solutions offer agencies the ability to forgo

lengthy development of core system functionality and the

ability to adhere to industry information processing

standards. However, the majority of COTS solutions require

modifications to meet unique Federal requirements.

Moreover, new systems require interfaces with existing

systems that are difficult to implement. Reviews by the OIG

have shown this to be the case with GSA’s new accounting

system, Pegasys, the foundation of which is a COTS

financial management product. On October 1, 2002,

Pegasys became the Agency’s official system for accounting

records. While this is a key accomplishment, numerous

challenges remain before completing full implementation of

an integrated financial management system. GSA also

faces system development challenges with mission critical

systems like GSA Preferred (GSAP). During FY 2004, FTS

implemented GSAP, an enterprise resource planning

solution, in two regions to replace four legacy systems and

provide cradle-to-grave activities for a more efficient and

effective process to identify and deliver technology

solutions and services. GSAP was expected to provide FTS

associates and Federal clients with real time access to

acquisition, financial, project, program, and contracting

information. However, the system and its interfaces have

not functioned as intended, and the Agency continues to

struggle with ensuring a successful system deployment and

realization of expected benefits.
Supplemental Information and 

Other Reporting Requirements

F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 150

GSA faces another critical systems development challenge

as it moves towards an enterprise CRM (ECRM).

Management considers this system crucial with its strategy

for achieving GSA’s mission of helping Federal agencies

better serve their public by offering best value workplaces,

expert solutions, and acquisition services. With ongoing

reorganization efforts, evolving competitive alternatives for

many of GSA’s business lines, and increased budgetary

pressures to reduce GSA’s margin on purchased goods,

services, and real estate, the need to ensure GSA’s

responsiveness to its customers has never been greater.

Management attention with the following key success

factors is critical in the development of the ECRM system:

Ensuring that functional and user requirements from

all Services and Staff Offices who will utilize the

system are identified and met with the ECRM

system.

Demonstrating the value of the ECRM system to

Associates to gain end user buy-in.

Ensuring that effective change management

processes are in place. 

Resolving data integrity concerns.

Implementing effective programs for training users

on the ECRM system.

Establishing effective communication programs to

guide ECRM in meeting established business

objectives for the system. 

Building sufficient management, operational, and

technical controls into the ECRM system.

IT SECURITY: The Federal Information Security

Management Act (FISMA) requires Federal agencies to

develop, document, and implement an agency-wide

information security program to secure Federal

information systems. The GSA IT Security Program

provided by the GSA Chief Information Officer (CIO) has

improved over the past year, but challenges remain and

there is a need to establish Agency-wide program policies

and procedures as an integral part of security practices for

all Agency systems.

The Agency security program must continually address

emerging threats, including phishing, spyware, malware,

spam, peer-to-peer, and social engineering. Greater

emphasis is required for security of privacy information

and the use of unencrypted data stored outside GSA’s

secured facilities. The GSA IT Security program must

incorporate requirements for contractor-provided data

system solutions where GSA owns, and is responsible for,

the data, but does not own the hardware, software,

facility, or provide system security. Completion of

required background checks before contractors are

granted access to GSA systems remains a challenge. 

AGENCY ACTIONS: The GSA IT Security Program continued

to mature over the past year. The GSA CIO has updated

its inventory to include all exhibit 53 systems (systems

identified in GSA’s annual budget request). GSA Order

CIO P 2100.1B - GSA IT Security Policy was updated

November 4, 2004. Instructional Letter (IL) 05-03,

containing training requirements for persons with

significant security responsibilities was issued on April 21,

2005. The GSA CIO also updated a number of technical

and procedural guides and added the Oracle technical

guide. The CIO has added a number of contractors in

support for:

Procedural and Technical Guide development and

maintenance

Vulnerability scanning of more than 1,800 devices

each quarter

Incident handling response and investigation

E-authentication risk assessment preparation

Security training for persons with significant

security responsibilities
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 151

Certification & Accreditation and Plans of Actions

& Milestones reviews for consistency with

procedural and technical guides

Annual FISMA reporting.

MANAGEMENT CONTROLS

ISSUE: Multiple management controls have been replaced

through reinvention initiatives and by fewer and broader

controls, making it essential that the remaining controls be

emphasized and consistently followed. The matter of weak

internal controls underlies several of the other management

challenges discussed elsewhere in this paper. 

Many agencies have availed themselves of the services

available under GSA’s government-wide charge card

program, yet some have failed to adequately implement

controls over the use of the cards by their employees.

While it is the responsibility of individual agencies to

establish controls for their own cardholders, OMB and

Congress still look to GSA to take a leadership role in

development of effective charge card program controls

across the government. Within GSA, steps taken to

strengthen controls over vehicle and travel cards appear to

be effective since the OIG seldom finds instances of misuse

by GSA cardholders. Although the key control over

purchase cards, supervisory review of cardholders’

transactions, is now more consistently followed, the OIG

does occasionally identify problems. 

Many of the problems identified in the CSC audits related to

OCO, vendor, and user agency misuse of GSA contract

vehicles. As a result, GSA is also challenged with ensuring

its overall contracts are properly used. FSS GWAC centers

have tried to develop OCO, vendor, and user agency

requirements in their GWACs. In addition, these centers

will train OCOs, delegate procurement authority to OCOs,

and monitor use of the GWACs. 

DATA INTEGRITY: In passing the Government Performance

and Results Act of 1993 (GPRA), Congress emphasized

that the usefulness of agencies’ performance data

depends, to a large degree, on the reliability and validity

of those data. Past audit work has shown that the

absence of controls or the non-compliance with existing

controls has resulted in poor quality data at the

operational levels of many GSA programs.

SECURITY OF DATA: The GSA SmartPay® program provides

Federal agencies with a streamlined approach to pay for

commercial goods and services, as well as travel and

fleet-related expenses. The program supports more than

$24 billion in Federal spending. In FY 2005, the Bank of

America lost computer tapes on the GSA SmartPay®

program affecting 1.2 million account holders. Data lost

included social security numbers, addresses, and account

numbers. Although the tapes remain missing, there have

been no indications that the data has been used

improperly. Since the incident, FSS has worked with the

service providers to identify their security controls. 

During FY 2005, OMB issued the revised Circular No. A123, Management’s Responsibility for Internal Control.

The revised Circular becomes effective in FY 2006 and

requires Federal agencies and individual managers to

develop and implement internal controls sufficient for

results-oriented management, assess the adequacy of

those internal controls, separately assess and document

the internal controls over financial reporting consistent

with Appendix A of the Circular, identify needed

improvements and take corrective action to address them,

and report annually on internal control through the

management assurance statements. These changes will

require GSA management to focus a much higher portion

of their resources on internal controls, particularly in their

efforts to assess and document these controls. 

AGENCY ACTIONS: GSA’s CFO has worked with the OIG to

strengthen controls for charge card transactions.

Processes are in place that require reviewing officials to
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 152

examine purchase transactions monthly. Cards are

withdrawn from those who do not comply. GSA purchase

cardholders and approving officials are required to

complete refresher training every two years. In addition,

the OCFO periodically issues e-mail reminders to

cardholders stressing their responsibilities for proper use

of the cards. As a result, the OIG has seen a substantial

reduction of fraud stemming from card use. GSA is also a

key participant in an OMB sponsored Federal committee

working to identify ways to improve the overall charge

card control systems government-wide.

The PBS Commissioner has taken action to improve the

integrity of the data in the Inventory Reporting

Information System (IRIS). Because this system is used to

manage the Repairs and Alterations (R&A) program, it is

imperative that data in IRIS be reliable since PBS

management decisions regarding the investment, repair, 

or disposal of assets could be significantly impaired. An

IRIS-based measure for the basic R&A program has been

put in place and a contract was awarded for system

modification to import key financial project data from the

Financial Management System.

In an effort to rein in the cost growth and bid busts on

new construction projects, the Commissioner has directed

the national office to expand and strengthen its

participation in the oversight of major projects and the

development of the project teams working on them;

develop a comprehensive project management manual;

require senior management involvement where technical

evaluation of project plans find unresolved deficiencies

and missing requirements, before projects are advanced to

OMB; and establish a design management evaluation

process that includes an independent cost estimate at

various design phase submissions.

Several steps have been taken within GSA to address the

revised requirements of A-123. The Controller’s office has

worked to address the revised Circular by extending

training to GSA’s Services and Staff Offices nationwide on

the Management Control Improvement program.

Additionally, the OCFO has developed internal control

assessment documents for the major financial line items

for each Service and Staff Office. The Management

Control and Oversight Council (MCOC) also continues to

be heavily involved in this process.

ACCELERATED REPORTING: In FY 2004, GSA met OMB’s

accelerated financial reporting deadline of November 15.

However, this deadline was only met through a resource

intensive process for the preparation and audit of the

Agency financials. Accelerated reporting, therefore,

remains a significant challenge, requiring the OCFO to

continue to take steps to implement changes to the

financial statement preparation process that will support

on-going financial management and timely and reliable

financial reporting.

In their efforts to address this challenge, the OCFO

established, and continues to work with, its Accelerated

Reporting Steering Committee. Additionally, the OCFO,

IG, and independent public accounting firm hold regular

status meetings throughout the financial statement audit

process to ensure that the audit is meeting established

time frames and is completed within OMB’s accelerated

due dates. 

AGING FEDERAL BUILDINGS

ISSUE: GSA, as one of the core real estate agencies in the

Federal government, faces challenges in providing quality

space to Federal agencies with an aging, deteriorating

inventory of buildings and critical budgetary limitations.

The weighted average age of buildings in GSA’s portfolio

is 40 years, and many are facing functional obsolescence

due to changing Agency mandates, new technology, and

security requirements. With an average funding level of

about $600 million during the past three years for

prospectus level R&A and an estimated $6.5 billion in

estimated projects, GSA is challenged to reduce the

growing workload. This problem exists governmentSupplemental Information and 

Other Reporting Requirements
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 153

wide. Federal real property was designated a high risk

area by GAO in January 2003 (and again in 2005) because

of the many long-standing and complex issues surrounding it. As further recognition of the seriousness of these

issues, the President signed Executive Order 13327 and

added the Federal Asset Management Initiative to the

President’s Management Agenda (PMA) in February 2004.

GSA needs to determine which buildings represent the

greatest risk from a safety and operational perspective,

which buildings will yield the best return on investment,

what the government’s future space requirements are, and

how to fund the highest priority projects in a timely

manner. 

Prior reviews have shown a need for PBS to improve the

administrative aspects of asbestos management, develop a

more comprehensive fire safety management system that

focuses on a national fire safety strategy, evaluate the

formula used to measure a building’s net income, and

improve profit and loss information to facilitate better

property management decisions.

AGENCY ACTIONS: PBS has developed a strategy for

restructuring the owned building inventory. The strategy

envisions a combination of actions, including disposals,

exchanges, public/private partnerships, outleases, and

new construction. With the Portfolio Restructuring

Initiative, PBS has proposed a three-tiered approach in

prioritizing the inventory, using a series of asset diagnostic

tests or measures, each with a performance target or

threshold that will assist in categorizing individual

buildings. The first test simply seeks to determine

whether the property produces sufficient income to meet

both operating expenses and a reserve for replacement.

The second test measures an asset’s financial performance

in terms of return on investment. Other tests address

operating efficiency, customer satisfaction, rental rate and

vacancy levels, and current repair and replacement needs.

After this performance review, each asset will be

categorized as either performing, under-performing, or

non-performing. GSA will consult with affected agencies

on appropriate resolution strategies for each troubled

asset. GSA has briefed congressional subcommittees with

jurisdiction over GSA, and they are very supportive of this

effort, as are OMB and GAO. Since beginning this

portfolio initiative, PBS has disposed of 62 assets valued at

$45 million. 

Management has developed a PBS-wide environmental

system to become more proactive in how it views and acts

on environmental issues and to address issues such as

property contamination, compliance with Federal and

state environmental laws and regulations, and liability for

tenant activities. PBS also developed a more

comprehensive fire safety strategy, which endeavors to

provide a functional, safe, and healthful work

environment; protect property; and promote client agency

mission continuity.

PBS redesigned its policy for charging rent to customer

agencies in FY 1997. The largest source of income to the

Federal Buildings Fund (FBF) is the rent charged by PBS

to its customer agencies for the space they occupy in GSA

controlled space. In FY 2004 this amount was

approximately $7.4 billion. 

The construction excellence program was established to

help PBS improve the management of its construction

program and to complete new construction and major

R&A projects timely and with minimal changes. 

HUMAN CAPITAL

ISSUE: Like many Federal agencies, GSA has an aging

workforce and faces significant potential loss of

institutional knowledge in the coming years. Since 1993,

GSA has been downsizing and has focused on

restructuring its financial and business efforts. The

Agency workforce was reduced from 20,000 to 14,000

between 1993 and 1999. Much of the downsizing was

accomplished through early retirement and buyout
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 154

authority, and by filling job vacancies sparingly. In March

2003, a mass transfer of 1,268 employees to the

Department of Homeland Security (DHS) further reduced

the workforce to approximately 12,800. 

Since 1998, the OIG has consistently cited human capital

management as one of the major management challenges

facing GSA. Additionally, Congress and GAO have

identified human capital management policies as a

missing link in the government’s performance

management framework. GAO added this issue to its list

of major management challenges facing Federal agencies.

Human capital planning and organizational alignment,

leadership continuity and succession planning, and

recruitment and retention of staff with the right skills were

identified as key areas needing attention. Over the past

year, GSA has seen a significant loss of key management

staff. Coupled with the FSS/FTS reorganization and the

ripple effect of changes, many staff find themselves in

unfamiliar positions with confusion as to their reporting

role in the organization. 

The PMA identifies competitive sourcing as a major

government-wide initiative. Procedures for conducting

these competitive sourcing studies are contained in OMB

Circular A-76. GSA faces a significant challenge in its

efforts to determine the activities within the organization

that should be studied to meet the goals of OMB. At the

same time, GSA must maintain a stable work environment

and address employees’ concerns inherent to the

competitive sourcing process. 

With government procurement as GSA's primary mission

and the act of issuing contracts "an inherent government

responsibility," the OIG foresees a continuing need for

competent contracting officers. The OIG is concerned

that GSA is extensively contracting out for temporary

services to support the contracting effort and not

developing from within a sufficient number of talented

people who can eventually become contracting officers. 

AGENCY ACTIONS: GSA has moved on several fronts to meet

identified human capital challenges. The Agency

completed an Agency-level workforce analysis that

parallels GSA’s Human Capital Strategic Goals that were

developed as part of the strategic plan in August 2002.

The report will assist management in making informed

human capital decisions. Identified mission critical

occupations are particularly emphasized in recruitment

and retention strategies. The Office of the Chief People

Officer (OCPO) selectively uses Human Resources (HR)

flexibilities to compete for employees. It has developed

recruitment and retention strategies with the help of the

Office of Personnel Management (OPM) and employee

focus groups, and uses the “compelling job offer”

technique to convince potential employees of the

importance of the position.

GSA has a number of initiatives regarding employee

orientation, engaging existing employees, and developing

leaders within GSA. New employees are provided the

opportunity to attend an intensive introduction to the

Agency and orientation to the individual’s specific

organization.

As part of its human capital strategy, and to address

planning needs, OCPO launched the GSA Leadership

Institute in February 2002 and has continued to add

programs and training opportunities to develop new

supervisors and managers and equip them for senior level

positions in the Agency. 

In its efforts to more accurately and consistently inventory

its activities under the Federal Activities Inventory Reform

(FAIR) Act, GSA’s competitive sourcing team oversees

each Service’s inventory and reports on any discrepancies

or variances, and established the Office of Performance

Improvement (OPI) that oversees the competitive sourcing

initiatives for GSA.

Supplemental Information and 

Other Reporting Requirements
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 155

In order to address the PMA and comply with OMB

Circular No. A-76, OPI is taking steps to review current

methods of performing commercial activities in a variety

of areas. The goal of these efforts is to assess the Agency’s

programs and activities to determine whether internal or

external changes would yield a better value for GSA’s

customer agencies and the American taxpayer. 

PROTECTION OF FEDERAL 

FACILITIES AND PERSONNEL

ISSUE: Providing a safe, healthful, and secure environment

for more than a million workers and the visitors to about

8,900 owned and leased Federal facilities nationwide is a

major multifaceted responsibility of GSA. The increased

risks from terrorism have greatly expanded the range of

vulnerabilities traditionally faced by building operations

personnel. In March 2003, the Federal Protective Service

(FPS) was transferred from GSA to DHS. While FPS is no

longer part of GSA, the Agency will have a continual need

to closely interact with security personnel due to GSA’s

mission of housing Federal agencies. GSA and FPS/DHS

operate under a Memorandum of Agreement (MOA) for

obtaining services such as basic security for buildings,

contract guards, law enforcement, background suitability

determinations for contractors (including child care), prelease security checks, occupant emergency plan support,

and continuity of operations plan activation support.

Ensuring that Federal employees have a secure work

environment and that building assets are adequately

safeguarded must remain a primary concern of GSA.

An additional concern relates to how to pay for the

upgrades and replacement of the security countermeasure

equipment that was initially obtained with $140 million in

funds provided directly by Congress. As equipment ages

and technology advances, the cost to maintain the security

of GSA’s buildings could significantly impact availability of

funds for other building needs, and could result in higher

rent costs to tenants resulting from upgraded security. 

AGENCY ACTIONS: As part of the FPS transition to the new

department, the MOA sets forth the support services GSA

will provide to DHS and the security services DHS will

provide to GSA. Such services include the continuation of

the Federal Security Risk Manager Program, a risk

assessment methodology that addresses potential threats

to Federal facilities. This methodology was designed to

link threats, risk levels and countermeasure

recommendations, and address vulnerabilities and the

impact of a loss should an incident occur. The desired

goal is to reduce threats at each facility through specific

countermeasures to address the risks. 

DHS and PBS are presently working toward developing a

long-term comprehensive agreement that would clearly

define the roles, responsibilities, and issues between the

two agencies. The OIG’s audit currently in process is

analyzing the concern about funding for equipment

replacement and upgrades.

In addition, as part of the increased focus on security, GSA

is adopting a nationwide uniform credential based on

Smart Card technology. A smart chip embedded in the

credential will identify each employee visually and

electronically for both identification and physical access

purposes. 
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 156

Debt Management

GSA reported $155.9 million of outstanding debt

from non-Federal sources and $29.7 million of

delinquent debt at the end of FY 2005. The

amount of delinquent debt decreased from $69.6 million

to $29.7 million for the same period. Non-Federal receivables consist of debts owed on third-party claims, travel

advances, proceeds from the sale of real property, and

other miscellaneous receivables.

To comply with the Debt Collection Improvement Act of

1996, GSA transmits delinquent claims each month to the

U.S. Department of the Treasury (Treasury) Financial

Management Service (FMS) for collection cross servicing.

From October 1, 2004, to September 30, 2005, the GSA

Finance Centers referred approximately $3.1 million of

delinquent non-Federal claims to the U.S Treasury

Department for cross-servicing collection activities.

Collections on non-Federal claims during this period

exceeded $289 million. Administrative offsets resulted in

additional collections of $17.3 million. GSA also collects

non-Federal claims using Pre-Authorized Debits (PAD).

From October 1, 2004, to September 30, 2005, 116 PADs

totaling $159,710 were processed. Also, during this

period, $1.6 million was received as a result of two GSA

Multiple Award Schedules (MAS) program audit related

claims collections. 

GSA actively pursues delinquent non-Federal claims using

installment agreements, salary offset, administrative wage

garnishment, and any other statutory requirement or

authority that is applicable. Through an outside contract

arrangement, GSA actively reviews and pursues

overpayments, in conjunction with its Public Buildings

Service (PBS) and Federal Technology Service (FTS)

Accounts Payable Division associates. GSA is continuing

to remove all non-paying claims over two-years-old from

its accounts receivable subsidiaries. All two-year-old

claims without collection activity are researched and

either collected or written off. GSA also works diligently

with its larger customers, such as the District of Columbia

government and the National Institute for the

Blind/National Institute for the Severely Handicapped

(NIB/NISH), to discuss and arrange payment of

outstanding bills.

Supplemental Information and 

Other Reporting Requirements
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 157

The Prompt Payment Act along with the Debt

Collection Improvement Act of 1996 requires the

timely payment of commercial obligations for

supplies and services using electronic funds transfer

(EFT). GSA reviews and modifies, if needed, its

procedures continuously to ensure prompt payment

utilizing EFT. The percentage of invoices paid on time

remained the same as in FY 2004. GSA experienced a

slight increase in interest penalties and interest paid per

million disbursed due to problems encountered from the

implementation of a new system. The statistics for the

current and preceding two fiscal years are as follows:

Cash and Payments Management

FY 2003 FY 2004 FY 2005

Total Number of Invoices Paid 1,298,134 1,390,406 1,483,040

Total Dollars Disbursed $19.1 Billion $20.8 Billion $18.7 Billion

Total Dollars of Interest Penalties $1,690,335 $779,835 $981,111.25

Interest Paid per Million Disbursed $95.00 $39 $44.87

Percentage of Invoices Paid On Time 93% 98% 98%

Percentage of Invoices Paid Late 1% 1% 2%

Percentage of Invoices Paid Electronically 88% 92% 91%
F INANCIAL S ECTION

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 158
Appendices

A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 161

Appendix 1: Data Sources

FINANCIAL DATA SYSTEMS

PEGASYS: In October 2002 Pegasys became GSA's official

accounting system of record. A reliable, highly stable

system, it currently processes 40 million transactions a year.

Among many modern features that this commercial-off-theshelf (COTS) solution provides GSA, the functionality of the

new Standard General Ledger addresses external reporting

requirements and assists in the consolidated Federal

financial statements. Pegasys will be upgraded to version

6.1 in May 2006. In keeping with GSA’s plan to upgrade

every two years, this upgrade will introduce Pegasys in the

html format and has several other features. In addition to

the upgrade, GSA will implement eTravel, Vendor Self

Service, and Cost Allocation within the next fiscal year.

DATA FROM LARGE COMPUTER SYSTEMS

GSA PROCUREMENT DATA SYSTEM (GPDS)

STAR (System for Tracking and Administering Real

property) is the primary tool used by the Public Buildings

Service (PBS) to track and manage the government's real

property assets and to store inventory data, billing data,

building data, customer data, and lease information. The

STAR application assists PBS in supporting its business

process and has been redesigned to more closely mirror

that of commercial real estate business processes. STAR

promotes responsible asset management, which in turn

allows PBS to compete more effectively and efficiently in

the Federal real estate market. Additionally, it provides

direct access to business data supporting the management

of space and customer billing records. STAR manages

aspects of real property space management, including

identification of all building space, daily management of

22,000 assignments, and monthly billing for all property to

its client Federal agencies. The application is used to

generate the annual billing and collection of more than $6

billion in rent from Federal agencies.

DATA FROM MANUAL OR SMALL FEEDER

COMPUTER SYSTEMS

IRIS (Inventory Reporting Information System) documents

and schedules all identified Repairs and Alterations (R&A)

building needs. IRIS tracks the execution of construction

projects through the design and construction phases, helps

conduct long-range planning, and assists in developing the

Budget Activity R&A programs annually. IRIS is a repository

for fully-scoped projects and their associated detailed cost

estimates. IRIS was redeveloped from a client-server

application to a fully Web-enabled application. The IRIS

Safety module was successfully deployed in March of 2004.

The Work Items module is currently under development

and is 85 percent complete. IRIS will allow the user to

access the application from any authorized desktop, giving

the user the ability to use IRIS while traveling or

telecommuting.

EAS: The Electronic Acquisition System (EAS), or

Comprizon, supports the daily business of acquisition for

PBS associates nationwide. This system streamlines the

flow of work within each business area by providing

nationwide acquisition preparation, tracking, and reporting.

This sophisticated system designed for government

acquisition practices includes requisition tracking,

acquisition planning, contract awarding, contract

administration, payment transfers, and contract closeout

functions. EAS has undergone many subsequent upgrades

and is currently moving to the enhanced centralized Webbased version Comprizon suite which represents a major

step towards more reliable, faster, and user friendly systems

for PBS associates. Future improvements for EAS are

targeted that will accelerate and simplify the way PBS does
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 162

business by building a stronger tie to Pegasys and

Electronic Posting Sites, such as FedBizOps and FedTeDs,

thus improving the accuracy of data in support of E-Gov

initiatives and offering “anywhere, anytime” access to users.

RENT ESTIMATE: Rent Estimate is a PBS enterprise

application that uses source information from back-office

systems and applications, such as STAR, Appraisal Data

System, and Galaxy to estimate rent for Federal clients. To

support Federal agencies in their budgeting process, PBS

provides the rent estimate at least 18 months prior to the

start of the fiscal year. Before the rent estimate can be

distributed to Federal agencies, the Office of Management

and Budget (OMB) must approve the rates. These estimates

are used by GSA’s customers and by GSA in the budget

formulation process.

TOPS: The Telecommunications Ordering and Pricing

System (TOPS) is a system which automates the local

telecommunications service business process, including

ordering, billing, and reconciliation of telecommunication

services. The purpose of the system is for decreased

paperwork, faster processing, and increased customer

agency satisfaction. TOPS allows Federal agencies to order

telephone equipment and services online on a nationwide

basis. This automated system cuts order handling and

processing time and cuts the cost of the entire process of

delivering telecommunications products. 

OMIS: Office of Information Technology Integration

Management Information System (OMIS) is an operational

system that provides an assortment of project financial

capabilities that includes project tracking, employee

timesheets, project billing, project expense tracking, project

fiscal reporting, and management tools/reports. OMIS

provides the Federal Systems Integration and Management

Center (FEDSIM) with a means of maintaining basic

financial transaction information along with individual time

accounting and management reporting capability. In

addition, OMIS provides an interface to the GSA financial

system of record, Pegasys. OMIS institutionalizes financial

standards and methodologies, and provides for the financial

management of FEDSIM’s increasing business base while

providing support directly to FEDSIM’s management team,

and information for FEDSIM’s industry partners and FEDSIM

clients. OMIS, in conjunction with Tracking and Ordering

System (TOS), provides a full suite of contracting, finance,

and project management capabilities for FEDSIM

management, clients, and industry partners. 

TOS: The Tracking and Ordering System (TOS) is an

operational system that was developed and implemented in

multiple phases. TOS initially supported the creation and

processing of Letter Orders, delivery order tracking, and

electronic invoicing by one vendor. In subsequent

phases/upgrades modules and functionality have been

added to conform to the natural evolution of FEDSIM’s

business models. Specific examples include updates to

allow for electronic bidding on commodities by vendors,

electronic invoicing by all vendors, vendor notification that

Delivery Orders have been issued, and electronic interfaces

to other financial and accounting systems. In particular

FEDSIM personnel have added interfaces with OMIS to

facilitate more complete project management. 

ITSS/ITOMS: IT Solutions Shop/Integrated Task Order

Management System (ITSS/ITOMS) provides for electronic

ordering and acceptance of commodities and services, and

computes and posts financial transactions associated with

order funding and order payment. ITSS is an online

procurement system for IT products and services. ITSS

electronically links Federal clients, vendors, and Federal

Technology Service (FTS) customer service representatives;

it is available 24 hours a day, seven days a week for

geographically dispersed Federal clients’ use in ordering IT

products and services from their desktops. ITOMS is the

financial management system for ITSS orders; it creates the

financial transactions sent to the financial system of record,

Pegasys. Both ITSS and ITOMS were developed in

response to a critical need to move away from paperintensive processes. Because of increasing business volume

of the IT Solutions business line, the repetitive data entry

and redundancy required unacceptable levels of time and

effort to reconcile financial records of the regions and

Appendix 1: Data Sources
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 163

central office. Internet-based ITSS/ITOMS provides an endto-end electronic order processing solution that supports

FTS staff, customer agencies, and vendors. It provides an

electronic path for defining, issuing, awarding, and

monitoring tasks. 

MAA STATUS TRACKING TOOL: The Metropolitan Area

Acquisition (MAA) Tracking Tool is a Lotus-Notes

application. It was designed originally to help with project

management in implementing the MAA, a local

telecommunications contract vehicle, which provides

greatly reduced rates to Federal agencies in metropolitan

areas. The tracking tool continues to be used to track new

MAA business in the post-implementation environment as

well as to generate various workload statistics such as MAA

savings to date, the mean time from order issuance to order

completion, etc. 

COMMERCIAL ACQUISITION AND SUPPLY OPERATING AND

MANAGEMENT INFORMATION SYSTEM (FSS-19): The Federal

Supply Service (FSS) utilizes both systems for tracking sales

data. They are password protected and conform to the GSA

Information Security Policies and Procedures. Schedule

data is reported quarterly and is verified by site visits to the

contractors. 

TARPS: The Transportation Accounts Receivable and

Payable Systems (TARPS) provides performance data for

measures aimed at cost recoveries resulting from audits of

FSS transportation billings.

ROADS: The Requisitioning, Ordering and Documentation

System (ROADS) captures contract pricing for vehicles for

FSS. Security for this system is maintained by limited access

and password protection.

FEDS: The Federal Disposal System (FEDS) provides data

for FSS transferred and donated property. 

FSS SALES AUTOMATION SYSTEM: Data for sales proceeds is

obtained from this the Sales Automation System (SASy).

BENCHMARK DATA FROM EXTERNAL SOURCES

BOMA: The industry benchmarks are from the Building

Owners and Managers Association (BOMA). BOMA is an

advocacy group for the real estate industry, a federation of

94 local associations whose members own or manage more

than six billion square feet of downtown or commercial

properties and facilities across the United States. BOMA is

recognized for its expertise in the field of real property,

frequently testifying before Congress and working with

property holding agencies. The Experience Exchange

Report is a database that contains building operations

statistics on more than 4,000 buildings throughout the

United States. It is used extensively in the private sector

and it is an accurate source for industry operating data that

is comparable to that of PBS. 

SIOR: Industry benchmark data are obtained from the

Society of Industrial and Office Realtors (SIOR). SIOR is a

commercial network and its publications are valuable tools

in determining current trends and market rates from which

GSA can benchmark. Member professionals, who work in

each reported market, develop the market information used

by SIOR. However, the regions have the option to use

other market sources if the SIOR data no longer reflects

local market conditions, or is unavailable for a market.

DATA OBTAINED UNDER CONTRACT

GALLUP: Customer satisfaction measures for PBS are all

compiled and processed by the Gallup Organization. The

Gallup Organization has been the world leader in the

measurement and analysis of people’s attitudes, opinions,

and behavior for more than 60 years. The statistical

confidence level of the data obtained from Gallup is 95

percent. As a result of this professional assistance, the level

of confidence in this data is very high. There is every

assurance that the customer satisfaction information is

credible and that it is verifiable and valid. Also, the

customer satisfaction measures have been audited within

the last three years. 
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 164

Gallup also conducts employee engagement surveys for all

of GSA. The Gallup Q12 survey measures associate

attitudes to differentiate the top-performing workplaces

from the average and low-performing ones. This is

accomplished by the administration by an Agency-wide

survey that has been professionally designed and validated

and that asks associates to respond to questions that most

closely capture their perceptions of their workplace

environments, thereby deducing what is defined as

associate engagement. Gallup is encouraging users of the

Q12 survey to move away from percentile comparisons,

and is no longer providing GSA with percentile information. 

MITRETEK SYSTEMS: The periodic comparisons of

commercial rates and those charged customers; the FTS

2001 telecommunications programs are performed by

Mitretek. Mitretek has developed specialized computer

models to analyze telecommunications costs.

Appendix 1: Data Sources
1: PROVIDE BEST VALUE FOR CUSTOMER AGENCIES AND TAXPAYERS

PBS (Asset Management)

Achieve an overall “highly satisfied”

customer satisfaction rating of 73% on

the ordering official survey by FY 2005.

Percent of highly satisfied

customers on the ordering

official survey.

66% 72% 68% 73% TBD TBD

PBS (Asset Management)

Execute energy conservation goals while

increasing GSA customer satisfaction

scores to 72% by FY 2005.

Customer satisfaction - tenants

in owned space.

N/A 67.6% 72% 72% TBD TBD

PBS (Leasing)

Award leases at an average rental rate

of not less then 8.3% below industry

averages for comparable office space by

FY 2005.

Cost of leased space

relative to the market.

-14.0% -7.4% -10.6% <8.3% -9.2% Met

PBS (Leasing)

Achieve a “highly satisfied” overall

customer satisfaction rating of 70% by

FY 2005. 

Customer satisfaction -

tenants in leased space. 

N/A 66% 70% 70% 78% Met

PBS(Leasing)

Achieve an overall customer satisfaction

score of 87% for the lease transaction

process.

Overall customer satisfaction

on the Realty Transaction

Survey.

N/A 84.8% 86.7% 87% TBD TBD

PBS (Real Property Disposal)

Maintain “highly satisfied” ratings of

93% on the Property Disposal

Transaction Survey by FY 2005.

Percentage of customers

indicating satisfaction on

customer transactional

surveys.

N/A 90% 94% 93% TBD TBD

PBS (Real Property Disposal)

Complete 80% of 49 Act disposals

within 320 days by FY 2005.

Percentage of disposals

completed within 320 days. 

N/A 68% 89% 80% 88% Met

FSS (Commercial Acquisition)

Reduce operating costs per $100 of

business volume to $0.58 by FY 2005.

Operating cost per $100

business volume.

$0.68 $0.60 $0.50 $0.58 TBD TBD

FSS (Global Supply)

Maintain customer satisfaction, at the

75th percentile or greater (currently 79)

for customer satisfaction in government.

GSA Global Supply external

customer satisfaction survey

score.

75 79.6 79 79.8 TBD TBD

As GSA moves towards complete integration of budget and performance, it has replaced our stand alone Performance Plan

with a Performance Budget. The following measures and targets were used in FY 2005 and were reflected in the FY 2006

Congressional Justifications. The 21 Key Performance Measures are highlighted below. The results for the remaining

performance measures will be published on GSA’s Web site in December 2005. A list of measures reported in the FY 2004

Performance and Accountability Report (PAR) that are no longer reported externally can be found in Appendix III. 

Dollars in millions (M).

Appendix 11: Summary Chart of Goals and Measures

A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 165

OFFICE

PERFORMANCE GOALS PERFORMANCE MEASURES

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL RESULTS
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 166

Appendix 11: Summary Charts of Goals and Measures

1: PROVIDE BEST VALUE FOR CUSTOMER AGENCIES AND TAXPAYERS (continued)

FSS (Travel and Transportation)

Increase the number of Federal agency

customers through Transportation

Management Services Solution (TMSS). 

Number of TMSS users. N/A N/A 1,718 1,950 TBD TBD

FSS (Travel and Transportation)

Expand the number of vendors and

services under the Travel Services

Solution (TSS) Schedule.

Number of vendors

participating on TSS Schedule.

N/A N/A 28 35 TBD TBD

FSS (Vehicle Acquisition)

Maintain 27.5% or better discount from

manufacturer’s invoice price. 

Percentage discount from

invoice price.

27.3% 26.3% 33.1% ≥ 27.5% 40.6% Met

FSS (Vehicle Leasing)

Maintain the gap between GSA Fleet

rates and commercial rates at 27% or

more.

Percentage GSA Fleet

leasing rates below

commercial rates on the

GSA Vehicle Leasing

Schedule.

N/A 36.9% 31.7% ≥ 27% 43.1% Met

FTS (Long Distance)

Provide substantial savings to customer

agencies.

Percentage of FTS Network

Services prices that are below

best commercial prices.

N/A N/A N/A 50% TBD TBD

FTS (Long Distance)

Provide robust portfolio of telecommunications services and value added

solutions to satisfy diverse customer

requirements.

Customer satisfaction with

value added solutions.

N/A N/A 77% 79% TBD TBD

FTS (Long Distance)

Provide robust portfolio of telecommunications services and value added

solutions to satisfy diverse customer

requirements.

Percentage of solutions

reviewed compliant with

policy and regulations, internal

policies and procedures.

N/A N/A N/A 100% TBD TBD

FTS (Long Distance)

Provide substantial savings to customer

agencies.

Savings provided to

customers.

$32.8M $574M $705M $780M $633M Not Met

FTS (Long Distance)

Grow customer base to increase market

share and maximize savings to the

government.

Percentage of agencies

serviced by Networks Services.

N/A N/A N/A 80% TBD TBD

OGP

Increase adoption of common business

processes and/or key components

enabling those processes.

Number of common business

processes and/or key

components adopted by

Federal programs.

N/A N/A 12 24 TBD TBD

OGP

Develop and issue effective guidance

and policies in support of the Federal

eAuthentication initiative.

Percentage of major agencies

adopting cross-agency policy

and uniform standards for

Federal Identity Credentials.

N/A N/A 25% 50% TBD TBD

OCSC

Help the Federal government become

more citizen-centric by increasing the

magnitude, quality and outreach of

Federal information via various channels and enable Federal agencies to

become more citizen-centric by providing answers to citizens that are timely,

accurate and responsive.

Total number of multichannel contacts with the

public (citizen, business,

government) per year.

59.1M 209.7M 241.9M 250.3M 230.5M Not Met

OFFICE

PERFORMANCE GOALS PERFORMANCE MEASURES

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL RESULTS
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 167

1: PROVIDE BEST VALUE FOR CUSTOMER AGENCIES AND TAXPAYERS (continued)

OCSC

Enable government Web sites to

become more citizen-centric and 

user-friendly.

FirstGov.gov page view/ year. N/A 176M 203M 210M TBD TBD

Number of agencies using

FirstGov infrastructure

(hosting).

N/A 4 4 4 TBD TBD

Federal Web sites that use 

E-Gov Solutions' infrastructure

(search services).

N/A 110 110 142 TBD TBD

OCSC

Help the Federal government become

more citizen-centric by increasing the

magnitude, quality and outreach of

Federal information via various channels and enable Federal agencies to

become more citizen-centric by providing answers to citizens that are timely,

accurate and responsive.

Increase agency Working

Agreements regarding citizen

inquiry/responses.

N/A Sign-up

10 &

Service

10

Sign-up

15 &

Service

25

Sign-up

11 &

Service

36

TBD TBD

FirstContact and Tier-1

telephone and email services

for agencies.

N/A Sign-up 3

& Service

3

Sign-up 7

& Service

10

Sign-up 5

& Service

15

TBD TBD

Web self-help options for

citizen inquires.

N/A N/A 590,000 5%

increase

TBD TBD

OCSC

Disseminate strategic information messages to all audiences by providing an

integrated and coordinated message to

GSA associates and news media.

Strategic messages (Favorable,

Neutral, Unfavorable).

N/A 29%

66%

5%

50%

25%

25%

50%

25%

25%

TBD TBD

OCSC

Enable government Web sites to

become more citizen-centric and userfriendly.

Total number of search

queries answered with results

from E-Gov Solutions' index

(FirstGov).

N/A N/A N/A 3.6M TBD TBD

Total number of search

queries answered with results

from E-Gov Solutions' index

(Other).

N/A 26.2M 26.8M 26.2M TBD TBD

OCIO

Align Business & IT Strategy using

Enterprise Architecture & Capital

Planning.

GSA Enterprise Architecture

Assessment (score 3 on 1-5

scale on both maturity and

degree of alignment).

N/A N/A 2.25 3 TBD TBD

2: ACHIEVE RESPONSIBLE ASSET MANAGEMENT

PBS (Asset Management)

Increase the percentage of governmentowned assets with a positive Funds

From Operations (FFO) to 80% by 

FY 2005. 

Percentage of governmentowned assets achieving a

positive FFO.

74% 73% 78% 80% TBD TBD

PBS (Asset Management)

86% of Repairs and Alterations (R&A)

projects on schedule by FY 2005.

Percent of Repairs and

Alterations (R&A) Projects

on schedule.

87% 78% 78% 86% 95% Met

PBS (Asset Management)

Obligate 75% of minor Repairs and

Alterations (R&A) budget for planned

projects by the end of FY 2005.

Percent of minor R&A budget

obligated on planned projects

by the end of the fiscal year.

N/A N/A 87% 75% TBD TBD

OFFICE

PERFORMANCE GOALS PERFORMANCE MEASURES

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL RESULTS
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 168

Appendix 11: Summary Charts of Goals and Measures

2: ACHIEVE RESPONSIBLE ASSET MANAGEMENT (continued)

PBS (Asset Management)

Decrease the vacant (available and

committed) space to 7% of the owned

inventory by FY 2005 and maintain

thereafter.

Percentage of vacant and

committed space in the

government-owned inventory.

9.2% 8.3% 7.9% 7% TBD TBD

PBS (Asset Management)

Maintain the percent of escalations on

R&A projects at less than or equal to

1.0% by FY 2005.

Percent of escalations on R&A

projects.

3.0% 0.5% 0.5% ′′1.0% TBD TBD

PBS (Asset Management)

Increase to 68% the percentage of government-owned assets with a Return on

Equity (ROE) of at least 6% by FY 2005.

Percentage of governmentowned assets with an ROE of

at least 6%. 

54% 64% 70% 68% TBD TBD

PBS (Leasing)

Maintain the percentage of vacant space

in leased buildings at less than or equal

to 1.5% in FY 2005.

Percent of vacant space in

leased inventory.

2.0% 1.4% 1.2% ′′1.5% 1.2% Met

PBS (Leasing)

Maintain Funds from Operations (FFO)

for leased space at 0% - 2% of leased

inventory revenue in FY 2005.

Percent of FFO from total

leased space inventory

revenue.

2.26% 1.20% 1.90% 0% ′′ 2% TBD TBD

PBS (New Construction)

New construction projects on schedule

85% of the time by FY 2005.

Construction projects on

schedule.

78% 68% 80% 85% 100% Met

FSS (Global Supply)

Reduce the mark-up for GSA stocked

items from 45.9% to 43.5% — towards

the goal of 33.5%.

Supply mark-up for stocked

items (percent).

48.5% 45.9% 42.8% 43.5% 42.9% Met

FTS (IT Solutions)

Improve the financial condition of the

IT Fund. 

Total program expense as a

percentage of gross margin.

N/A 48% 59% 78% TBD TBD

FTS (Long Distance)

Improve the financial condition of the

IT Fund.

Total program expense as a

percentage of gross margin.

N/A 95%1 41%2 56% TBD TBD

FTS (Long Distance)

Provide effective management of

Network Services acquisitions.

Networx Program Milestones

planned versus actual.

N/A N/A 100% 100% TBD TBD

FTS (Regional Telecomm)

Improve the financial condition of the

IT Fund.

Total program expense as a

percentage of gross margin.

N/A 59% 56% 64% TBD TBD

FTS (Professional Services)

Improve the financial condition of the

program.

Total program expense as a

percentage of gross margin.

N/A N/A 64% 82% TBD TBD

OFFICE

PERFORMANCE GOALS PERFORMANCE MEASURES

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL RESULTS

1. The FY 2003 ratio is skewed as a result of $18.6M prior year financial adjustment.

2. The FY 2004 ratio is skewed as a result of $22.1M refund related to prior year. 
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 169

2: ACHIEVE RESPONSIBLE ASSET MANAGEMENT (continued)

OGP

Develop and implement more efficient

Government-wide utilzation and

disposal (U&D) processes and systems

based on recommendations from the

U&D study.

Number of agencies using Real

Property Profile Internet application to report real property

inventory.

N/A N/A 30 32 TBD TBD

OGP

Improve software asset management in

government.

Percentage of agencies with

software asset management

plans.

N/A N/A 0% 5% TBD TBD

OGP

Develop new policies to optimize

Federal asset management.

Percentage of agencies

implementing process

improvements prescribed in

asset management guidelines,

policies, and regulations.

N/A N/A 0 50% TBD TBD

OCIO

Ensure that all IT systems have a full

Certification and Accreditation.

Percentage of IT systems that

have completed a full

certification and accreditation.

N/A N/A 97% 100% TBD TBD

3: OPERATE EFFICIENTLY AND EFFECTIVELY

PBS (Asset Management)

Maintain operating service costs in

office and similarly serviced space at

12% or more below private sector

benchmarks in FY 2005.

Percent below private sector benchmarks for cleaning, maintenance, and utility costs in office and similarly serviced space.-17.0% -15% -14.5% -12% -10.5% Not Met

PBS (New Construction)

Reduce the percentage of escalations on

construction projects to at or below 1%

by FY 2005.

Percent of escalations on

construction projects.

7% 0.6% 1.6% <1% TBD TBD

FSS (Commercial Acquisition)

Reduce the time associated with

processing contract offers to 92 days 

by FY 2005.

Cycle time to process offers

(days).

110 94 87 92 98 Not Met

FSS (Commercial Acquisition)

Reduce the time associated with processing contract modifications to 13

days by FY 2005.

Cycle time to process

modifications (days).

23 16 14 13 TBD TBD

FSS (Global Supply)

Increase program efficiency and value

to Global Supply customers by minimizing program operating costs.

Operating costs per $100

business volume.

$20.77 $18.13 $17.58 $17.63 TBD TBD

FSS (Personal Property Management)

Decrease the time it takes to complete

disposal action for excess property from

83 days to 77 days by FY 2005.

Cycle time for disposal

process (days).

99 83 72 77 56 Met

FSS (Personal Property Management)

Increase the usage of on-line systems

for reporting of surplus property by

Federal civilian agencies.

Percent of property reported

electronically by civilian

agencies through FEDS.

N/A 86% 91% 89% TBD TBD

FSS (Personal Property Management)

Align program operating costs relative

to revenue generated by the sales program, and strive to maximize the return

on these resources.

Direct cost as a percent of

revenue.

58.2% 61.5% 48% 47% TBD TBD

OFFICE

PERFORMANCE GOALS PERFORMANCE MEASURES

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL RESULTS
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 170

Appendix 11: Summary Charts of Goals and Measures

3: OPERATE EFFICIENTLY AND EFFECTIVELY (continued)

FSS (Travel and Transportation)

Maximize percentage discount savings

from the City Pairs Program (CPP). 

Percentage discount from

walk-up fare.

72% 72% 74% 74% TBD TBD

FSS (Travel and Transportation)

Reduce business line operating costs

per $100 business volume of the

program.

Direct cost as a percent of

revenue.

N/A 40% 57% 65% TBD TBD

FSS (Travel and Transportation)

Provide policy compliant, consolidated

and fully integrated end-to-end travel

services Governmentwide.

Percentage of agencies using

eTS.

N/A N/A 8% 62.5% TBD TBD

FSS (Travel and Transportation)

ncrease the number of audits that are

conducted electronically through

streamlining and automating the

Transportation Audits process.

Percent of audits performed

electronically.

89.5% 93.2% 92.1% 94.5% TBD TBD

FSS (Travel and Transportation)

Increase the number of audits that are

conducted electronically through

streamlining and automating the

Transportation Audits process.

Percent of audits performed

electronically.

89.5% 93.2% 92.1% 94.5% TBD TBD

FSS (Travel and Transportation)

Increase the number of audits that are

conducted electronically through

streamlining and automating the

Transportation Audits process.

Percent of claims processed

within targeted timeframe of

120 days or less.

N/A N/A 51.2% 40% TBD TBD

FSS (Vehicle Acquisition)

Manage program resources to meet its

future needs while maximizing program

efficiency.

Number of vehicles purchased

per FTE.

564 1,191 1,350 1,275 TBD TBD

FSS (Vehicle Leasing)

Maintain the gap between GSA Fleet

rates and commercial rates at 27% or

more.

Program support and

operational expenses per

vehicle year of operation.

$495 $507 $556 $482 TBD TBD

FSS (Vehicle Leasing)

Aggressively pursue consolidation

opportunities at the regional level to

reduce overall government expenses.

Number of vehicles managed

per onboard associate.

262 271 275 322 TBD TBD

FTS (IT Solutions)

Improve performance against business

performance metrics, including timeliness, cost-effectiveness, and efficiency

to verify best value and effective acquisition management are achieved.

Percentage of negotiated

award dates for services

and commodities that are

met or bettered.

93% 90% 88% > 94% 85% Not Met

FTS (IT Solutions)

Provide quality IT solutions services

through appropriate consistency in the

acquisition management process from

pre-award through closeout.

Percentage of schedule task

orders solicited using e-Buy.

N/A N/A N/A 80% TBD TBD

OFFICE

PERFORMANCE GOALS PERFORMANCE MEASURES

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL RESULTS
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 171

3: OPERATE EFFICIENTLY AND EFFECTIVELY (continued)

FTS (Regional Telecomm)

Improve performance against business

performance metrics, including timeliness, cost-effectiveness, and efficiency

to verify best value and effective acquisition management are achieved.

Percentage of negotiated

award dates for services and

commodities that are met or

bettered.

N/A N/A 89% 75% TBD TBD

FTS (Professional Services)

Provide quality services through appropriate consistency in the acquisition

management process from pre-award

through closeout.

Percentage of schedule task

orders solicited using e-Buy.

N/A N/A N/A 80% TBD TBD

FTS (Professional Services)

Improve performance against business

performance metrics, including timeliness, cost-effectiveness, and efficiency

to verify best value and effective acquisition management are achieved.

Percentage of negotiated

award dates for services and

commodities that are met or

bettered.

N/A N/A 83% > 93% TBD TBD

OGP

Reduce redundant data collections and

redundant electronic forms systems.

Percentage of agencies

adopting Government-wide

Forms Management guidance

and implementation approach.

N/A N/A N/A 10% TBD TBD

OCIO

Improve IT Investment Control &

Project Management.

Cost and schedule variances for

major IT investments. The IT

Portfolio's Development,

Modernization and

Enhancement (DM&E)

performance, as measured by

earned value, should reflect

actual cost and schedule

variances that are within 10% of

their planned cost and schedule.

N/A N/A N/A 10% TBD TBD

4: ENSURE FINANCIAL ACCOUNTABILITY

OCFO

Increase the percentage of vendor

invoices received by Electronic Data

Interchange (EDI) through the Internet. 

Percentage of vendor

invoices received

electronically by EDI

through the Internet.

38% 44% 56% 56% 64% Met

OCFO

Increase the percentage of vendor payments made by electronic media such

as Electronic Funds Transfer (EFT) and

purchase cards. 

Percent of electronic

invoices paid by electronic

means such as EFT and

purchase cards.

79% 88% 92% 95% 94% Not Met

5: MAINTAIN A WORLD-CLASS WORKFORCE AND WORLD-CLASS WORKPLACE

OCPO

Enhance training, recruitment, and

placement/outplacement programs to

help GSA develop/acquire the needed

skills/talents identified in organizationspecific human capital strategies.

Specific focus will be place on

improved diversity of workforce

training/learning.

Gallup Q12 Grand Mean

Score.

3.76 3.83 3.89 3.94 3.85 Not Met

Number of days to full a

vacancy.

N/A N/A N/A 45 TBD TBD

OEM

Support government-wide COOP in

accordance with Federal Preparedness

Circular #65.

OEM will conduct coop

training sessions for Federal

agencies.

N/A N/A N/A 10 TBD TBD

OFFICE

PERFORMANCE GOALS PERFORMANCE MEASURES

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL RESULTS
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 172

6: CARRY OUT SOCIAL, ENVIRONMENTAL, AND OTHER RESPONSIBILITIES AS A FEDERAL AGENCY

PBS (Asset Management)

Reduce energy consumption in GSA

Federal buildings by 30% (as measured

in Btu/GSF) over the FY 1985 baseline

by FY 2005. 

Percent reduction in energy

consumption over the FY

1985 baseline.

-22.5% -18.6% -22.4% -30% -35.3% Met

FTS (IT Solutions)

Manage acquisitions to ensure industry

provides solutions that meet client

agencies mission needs.

Percentage of dollar value of

eligible service orders awarded

with performance-based

SOWs.

N/A N/A 61% 50% TBD TBD

FTS (IT Solutions)

Provide quality IT solutions services

through appropriate consistency in the

acquisition management process from

pre-award through closeout.

Percentage of Government

Wide Acquisition Contract

(GWAC) task and delivery

orders subject to the fair

opportunity process.

N/A 86% 96% > 95% 93% Not Met

FTS (Regional Telecommunications)

Manage acquisitions to ensure industry

provides solutions that meet client

agencies' mission needs.

Percentage of dollar value

of eligible service orders

awarded with performancebased SOWs.

N/A N/A 47% 40% 72% Met

FTS (Regional Telecommunications)

Provide quality telecommunications

services through appropriate

consistency in the acquisition

management process from pre-award

through closeout.

Percentage of task and

delivery orders subject to fair

opportunity process.

N/A N/A 96% 70% TBD TBD

FTS (Professional Services)

Manage acquisitions to ensure industry

provides solutions that meet client

agencies mission needs.

Percentage of dollar value of

eligible service orders awarded

with performance-based

SOWs.

N/A N/A 43% 50% TBD TBD

FTS (Professional Services)

Provide quality services through appropriate consistency in the acquisition

management process from pre-award

through closeout.

Percentage of task and

delivery orders subject to fair

opportunity process.

N/A N/A 83% > 85% TBD TBD

OFFICE

PERFORMANCE GOALS PERFORMANCE MEASURES

FY 2002

ACTUAL

FY 2003

ACTUAL

FY 2004

ACTUAL

FY 2005

TARGET

FY 2005

ACTUAL RESULTS
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 173

Appendix 1i1: Performance goals and Measures no Longer Reported

1: PROVIDE BEST VALUE FOR CUSTOMER AGENCIES AND TAXPAYERS

PBS (Real Property Disposal)

Attain a highly satisfied customer satisfaction score of 76% on the quality of service delivered by 

FY 2005.

Percentage of customers indicating

satisfaction on annual customer

surveys.

FSS (Global Supply)

Increase fill rate by 0.1% per year from 95.2% to 95.4% while maximizing inventory turns. 

Fill rate for requisitions

FSS (Vehicle Acquisition)

Increase customer satisfaction to the 75th percentile or better for customer satisfaction in the government.

GSA Automotive external customer

satisfaction survey score

FSS (Vehicle Leasing)

Increase customer satisfaction to the 75th percentile or better for customer satisfaction in the government.

GSA Fleet external customer satisfaction

survey score

FSS (Personal Property Management)

Increase customer satisfaction to the 75th percentile or better for customer satisfaction in the government.

Personal Property Management external

customer satisfaction survey score

FSS (Travel and Transportation)

Increase customer satisfaction to the 75th percentile or better for customer satisfaction in the government.

Travel Program external customer

satisfaction survey score

Office of Governmentwide Policy

Develop and issue effective guidance and policies in support of the Federal 

E-Authentication initiative.

Number of agency applications

meeting E-Authentication

credentialing policy standards 

(out of universe of 24)

Office of Citizen Services and Communications

Leverage FirstGov technologies and solutions across the Federal government.

Tax dollars saved as a result of

agencies sharing FirstGov technologies

Office of Citizen Services and Communications

Government Web sites that are citizen-centric and user friendly.

Agencies adopting FirstGov common

content model

Office of the Chief Acquisition Officer

80% of all changes to the Federal Acquisition Regulations (FAR) are accomplished within 40 weeks. 

Percent of new FAR rules completed

within 40 weeks

Office of the Chief Acquisition Officer

Increase GSA performance based service contracting actions. 

Percent of GSA eligible service contract

dollars awarded as performance-based

contracts

2: ACHIEVE RESPONSIBLE ASSET MANAGEMENT

Office of Governmentwide Policy

Implement eTravel Service (eTS). 

Number of vouchers processed 

through eTS

3: OPERATE EFFICIENTLY AND EFFECTIVELY

FSS (Vehicle Acquisition)

Rationalize Government Wide Acquisition Contract’s (GWAC) to reduce overlap and result in contract

vehicles that are more complementary to MAS. 

Percentage of new GWACs and GWACs

with significant changes reviewed by

Contract Vehicle Review Boar

FSS (Travel and Transportation)

Implement transition of Federal agencies to e-Travel Service by December 31, 2004 and complete

migration to eTS by September 30, 2006. 

Number of agencies migrating to eTravel

Service

FTS (Professional Services)

Increase operational capacity for Professional Services.

Number of FSS Schedules for which FSS

provide acquisition support

4: ENSURE FINANCIAL ACCOUNTABILITY

FSS (Vehicle Leasing)

Consolidate other agencies’ vehicles to reduce the overall cost of fleet to the government.

Annual Savings to the government 

($ millions) per cost benefit study

5: MAINTAIN A WORLD-CLASS WORKFORCE AND WORLD-CLASS WORKPLACE

Office of the Chief Acquisition Officer

Increase the use of Federal Acquisition Institute Online training. (OCAO)

Number of FAI Online training instances

completed

6: CARRY OUT SOCIAL, ENVIRONMENTAL, AND OTHER RESPONSIBILITIES AS A FEDERAL AGENCY

Office of Small Business Utilization

Meet or exceed goal of providing contracting opportunities to small businesses.

Percentage of contracting opportunities

provided to small business

OFFICE

PERFORMANCE GOALS PERFORMANCE MEASURES
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 174

Appendix IV: Improper Payments Information Act (IPIA)

RECOVERY AUDIT PROGRAM

GSA’s recovery audit contractor came on board in April 2001

and initially performed an audit of GSA’s disbursement

records and vendor statement of accounts for FY 2000. This

process has continued through FY 2004. In addition, in FY

2003 the recovery audit activities were expanded to include

a review of GSA’s commodity and service contracts.

In FY 2004, a combined total of $26.6 million in payment

errors was discovered through internal reviews and recovery

audit activities. The original disbursements for the payment

errors occurred in multiple fiscal years. Details regarding

GSA’s recovery audit program for FY 2004 are presented in

the table below:

GSA’s FY 2004 Recovery 

Audit Program Results

(in dollars)

Total Agency Costs $ 1,561,226

Agency Salaries & Expenses $ 77,055

Total Contracted Expenses $ 1,531,292

Paid $ 1,127,346

Due $ 403,946

Total Payment Errors Identified $ 26,638,654

Discovered By Contractor $ 13,280,090

Amount Unrecoverable $ 0

Amount Recovered $ 7,574,918

Amount Outstanding $ 5,705,172

Discovered Internally By GSA $ 13,358,564

Amount Unrecoverable $ 0

Amount Recovered $ 742,269

Amount Outstanding $ 12,616,295

Since most of GSA’s business dealings with vendors are of

a recurring nature, it is anticipated that the vast majority of

the outstanding balance will be successfully collected.

Through the end of FY 2004, the contractor has identified

$31.2 million in improper payments and GSA has collected

$18.4 million of that amount.

The recovery audit contractor’s overall findings are down

slightly from the prior year. During FY 2004, GSA began

to see a decline in traditional disbursement type recoveries.

The make-up of findings has shifted significantly in favor of

contract compliance. This shift is common during the life

cycle of a post audit. GSA has incorporated several past

recommendations made by the recovery audit contractor,

and revised payment controls and procedures have been

put in place to eliminate many common disbursement

errors. An audit base of $1.625 billion in contracts was

examined during this time. 
Appendix V: Acronyms and Abbreviations

AAPC Accounting and Auditing Policy Committee

ABC Activity Based Costing

ADA Anti-Deficiency Act

ADP Automated Data Processing

AGA Association of Government Accountants

AICPA American Institute of Certified Public Accountants

APPAS Associate Performance Planning and Appraisal System

BOCA Board of Contract Appeals

BOMA Building Owners and Managers Association

BPA Blanket Purchase Agreement

BPR Business Process Review

BRM Business Reference Model

Btu British Thermal Unit

CAO Chief Acquisition Officer

CEAR Certificate of Excellence in Accountability Reporting

CFO Chief Financial Officer

CIO Chief Information Officer

COE Center of Excellence

COTS Commercial-Off-The-Shelf

CPP City Pairs Program

CRM Customer Relationship Management

CSBR Combining Statement of Budgetary Resources

CSC Client Support Center

CSRS Civil Service Retirement System

DHS Department of Homeland Security

DLA Defense Logistics Agency

DOD Department of Defense

DOL Department of Labor

DUNS Data Universal Numbering System

EA Enterprise Architecture

EAS Electronic Acquisition System

E-Authentication Electronic identity proofing of individuals and businesses,

based on risk of online services used

ECRM Enterprise CRM

EDD Expanded Direct Delivery

EDI Electronic Data Interchange

A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 175
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 176

EEO Equal Employment Opportunity

EFT Electronic Funds Transfer

eGov Electronic Government

EO Executive Order

eTravel A Web-based service for travel planning and authorization 

of reimbursement

eTS eTravel Service 

FAI Federal Acquisition Institute

FAIR Federal Activities Inventory Reform

FAR Federal Acquisition Regulations

FAS Federal Asset Sales

FAS Federal Acquisition Service

FASAB Federal Accounting Standards Advisory Board

FBF Federal Buildings Fund

FCICF Federal Consumer Information Center Fund

FECA Federal Employees Compensation Act

FEDS Federal Disposal System

FEDSIM Federal Systems Integration and Management Center

FEMA Federal Emergency Management Agency

FERS Federal Employees Retirement System

FFB Federal Financing Bank

FFMIA Federal Financial Management Improvement Act

FFO Funds From Operations

FICA Federal Insurance Contribution Act

FISMA Federal Information Security Management Act

FMC Fleet Management Center

FMFIA Federal Manager's Financial Integrity Act

FM LOB Financial Management Line of Business

FMS Financial Management Service

FPS Federal Protective Service

FSS Federal Supply Service

FSS-19 Commercial Acquisition and Supply Operating and 

Management Information System

FTE Full-Time Equivalent

FTS Federal Technology Service

FY Fiscal Year

GAAP Generally Accepted Accounting Principles

GAO Government Accountability Office

GM General Motors

GM&A General Management and Administration

GPRA Government Performance and Results Act

Appendix V: Acronyms and Abbreviations
GSA General Services Administration

GSAP GSA Preferred

GSF General Supply Fund

GSFC Greater Southwest Finance Center

GWAC Governmentwide Acquisition Contract

HAVA Help America Vote Act

HR Human Resource

HUBZone Historically Underutilized Business Zones

IG Inspector General

IGTE Intragovernmental Transaction Exchange

IPIA Improper Payments Information Act

IRIS Inventory Reporting Information System

IT Information Technology

ITS Information Technology Solutions

ITF Information Technology Fund

ITOMS Integrated Task Order Management System

ITSS IT Solutions Shop

JFMIP Joint Financial Management Improvement Program

LLP Limited Liability Partnership

MAA Metropolitan Area Acquisition

MAC Multiple Award Contract

MAS Multiple Award Schedule

MCOC Management Control Oversight Council

MD&A Management’s Discussion and Analysis

MFC Most-favored customer

MOA Memorandum of Agreement

NCC National Contact Center

NEAR National Electronic Accounting and Reporting 

NIB/NISH National Institute for the Blind/National Institute for the 

Severely Handicapped

NIST National Institute of Standards and Technology

NPC National Payroll Center

OASDI Old-Age, Survivors and Disability Insurance

OCAO Office of Chief Acquisition Officer

OCFO Office of Chief Financial Officer

OCIA Office of Congressional and Intergovernmental Affairs

A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 177
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 178

OCIO Office of Chief Information Officer

OCO Ordering Contracting Officers

OCPO Office of Chief People Officer

OCR Office of Civil Rights

OCSC Office of Citizen Services and Communications

OEM Office of Emergency Management 

OGC Office of General Counsel

OGP Office of Governmentwide Policy

OIG Office of Inspector General

OMB Office of Management and Budget

OMIS Office of Information Technology Integration Management 

Information System

OPI Office of Performance Improvement

OPM Office of Personnel Management

OSBU Office of Small Business Utilization

PAD Pre-Authorized Debits

PADC Pennsylvania Avenue Development Corporation

PAR Performance and Accountability Report

PART Program Assessment Rating Tool

PBS Public Building Service

PIB Procurement Information Bulletin

PL Public Law

PMA President’s Management Agenda

PMP Performance Management Process

PMT Performance Measurement Tool

PS Office of Professional Services

PwC PricewaterhouseCoopers

R&A Repair and Alteration

ROADS Requisitioning, Ordering and Documentation System

ROE Return on Equity

RRB Ronald Reagan Building

SAS Statement on Auditing Standards

SASy Sales Automation System

SBA Small Business Administration

SES Senior Executive Service

SF133 Standard Form 133: Statement of Budget Execution

and Budgetary Resources

SFFAS Statement of Federal Financial Accounting Standards

SIOR Society of Industrial and Office Realtors

SOW Statements of Work

SSA Social Security Administration

Appendix V: Acronyms and Abbreviations
STAR System for Tracking and Administering Real Property

TARPS Transportation, Accounts Receivable and Payable Systems

TBD To Be Determined

TMSS Transportation Management Services Solution

TOPS Telecommunications Ordering and Pricing System

TOS Tracking and Ordering System

TSP Thrift Savings Plan

TSS Travel Services Solution

U&D Federal Personal Property Utilization, Donation, and Sales 

Program

USDA United States Department of Agriculture

USPS United States Postal Service

USSGL United States Standard General Ledger

VA Veterans Administration

VERA Voluntary Early Retirement Authority

VoIP Voice over Internet Protocol

VSIP Voluntary Separation Incentive Payment

WCF Working Capital Fund

XML Extensible Markup Language

A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 179
A PPENDICES

FY 2005 ANNUAL PERFORMANCE AND ACCOUNTABILITY REPORT 180

This report is available through our Web site at www.gsa.gov/annualreport

Also linked to that site is our 2006 Performances Plan 

and our past performance and accountability publications.

Other GSA Web pages of possible interest:

Firstgov.gov

GSA Homepage: www.gsa.gov

GSA Jobs : http://OCPO.gsa.gov/