FEDERAL REAL 

PROPERTY

Commodity Futures 

Trading Commission 

Needs Better Leasing 

Guidance to Improve 

Cost-effectiveness

Report to Congressional Committees

April 2016

GAO-16-434

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-434, a report to 

congressional committees

April 2016

FEDERAL REAL PROPERTY

Commodity Futures Trading Commission Needs 

Better Leasing Guidance to Improve Costeffectiveness

Why GAO Did This Study

The CFTC regulates certain financial 

markets, and the Dodd-Frank Wall 

Street Reform and Consumer 

Protection Act (Dodd-Frank Act)

expanded its regulatory 

responsibilities. Prior to enactment of 

the Dodd-Frank Act, in anticipation of 

these increased responsibilities, the 

agency began planning for more space 

to accommodate additional staff in 

each of four office locations. 

GAO was asked to review CFTC’s

staffing, leasing practices, and costs. 

This report examines: (1) the extent to 

which CFTC made cost-effective 

decisions and used leading 

government guidance in planning for 

additional space in fiscal years 2008 

through 2015 and (2) potential options

to improve the cost-effectiveness of 

CFTC’s future leasing. GAO (1) 

reviewed applicable federal laws, 

regulations, and guidance that apply to 

real property leasing and CFTC’s

space-planning documents and leases 

for the fiscal years 2008 through 2015; 

(2) analyzed data and conducted 

interviews with key officials from CFTC 

and GSA; and (3) visited all four CFTC 

offices.

What GAO Recommends

To help ensure cost-effective leasing 

decisions, GAO recommends that

CFTC (1) ensure that its revised

leasing policies and procedures 

incorporate leading government 

guidance and (2) establish a timeline 

for evaluating and documenting 

options to potentially improve space 

utilization and reduce leasing costs.

CFTC generally concurred with GAO’s 

recommendations but noted that it 

would not be able to take actions to 

reduce lease costs in the near term.

What GAO Found

The Commodity Futures Trading Commission (CFTC) did not make cost-effective 

decisions consistent with leading government guidance for lease procurement 

and internal controls when planning for additional space in fiscal years 2008–

2015. CFTC began planning for expansion in the fiscal year 2009 time frame—

more than a year before the enactment of the Dodd-Frank Act in July 2010. 

CFTC renewed leases and expanded space in its Washington, D.C.,

headquarters and three regional offices in anticipation of receiving funding to hire 

additional staff but did not receive the amounts requested. As a result, CFTC has 

lease obligations for currently unused space some of which extends through 

2025. Overall, the total occupancy level for all four offices combined was about 

78 percent as of the end of fiscal year 2015, and each office has different 

occupancy levels, as shown in the figure below. CFTC has independent authority 

to lease real property, including office space. The two documents CFTC uses to 

guide the lease procurement process provide some high-level guidance on this 

process, but the documents do not establish specific policies and procedures to 

help ensure cost-effective decisions. By comparison, leading government 

guidance, from the General Services Administration (GSA) includes 

comprehensive details on lease procurement. The lack of this type of detail may 

have contributed to CFTC’s making decisions that were not cost-effective.

Commodity Futures Trading Commission’s Space Utilization by Office Location, Fiscal Year 

2015

GAO identified several potential options that CFTC may pursue now and in the 

future to increase space utilization and improve the cost-effectiveness of its 

leasing arrangements: (1) relocating offices to less costly locations, (2) reducing 

office space requirements through enhanced telework, and (3) consolidating two 

regional offices—Kansas City and Chicago. CFTC officials told GAO that these 

options may not be feasible; however, the officials have not fully assessed these 

options or their potential for improving cost-effectiveness and do not have a 

timeline for doing so.

View GAO-16-434. For more information, 

contact Dave Wise at (202) 512-5731 or 

wised@gao.gov.

.
Page i GAO-16-434 Federal Real Property: CFTC Leasing

Letter 1

Background 4

CFTC Did Not Make Cost-effective Decisions Consistent with 

Leading Government Guidance when Planning for Additional 

Space 5

Potential Options for Improving Cost-effectiveness of CFTC’s 

Leasing Include Relocating, Teleworking, and Consolidating 

Regional Offices 19

Conclusions 23

Recommendations for Executive Action 23

Agency Comments and Our Evaluation 24

Appendix I Objectives, Scope, and Methodology 26

Appendix II CFTC Leasing Costs from Fiscal Years 2008 through 2015 29

Appendix III CFTC’s Statement of General Principles and Practices Pertaining to 

the Award and Administration of CFTC’s Office Space Leases, 2011 30

Appendix IV Comments from the Commodity Futures Trading Commission 33

Appendix V GAO Contact and Staff Acknowledgments 36

Tables

Table 1: The Commodity Futures Trading Commission’s (CFTC)

Leased Space by Location, Fiscal Years 2008– 2015 (in 

Thousands of Rentable Square Feet) 7

Table 2: Changes in Numbers of Commodity Futures Trading 

Commission’s (CFTC) Federal Employees and On-site 

Contractors, Fiscal Years 2008–2015 10

Contents
Page ii GAO-16-434 Federal Real Property: CFTC Leasing

Table 3: Comparison of Commodity Futures Trading 

Commission’s (CFTC) Lease Costs with Average Lease 

Costs of Other Federal Agencies and Private Sector 

Buildings, Fiscal Years 2013 through 2015 (in Nominal 

Dollars per Rentable Square Foot) 15

Table 4: Commodity Futures Trading Commission Fiscal Year 

2015 Employee Telework Agreements (as of 9/30/2015) 22

Table 5: CFTC Lease Costs by Location, Fiscal Years (FY) 2008 

through 2015 (in Millions) 29

Figures

Figure 1: Commodity Futures Trading Commission’s (CFTC) 

Budget Requests and Appropriations (in Millions), Fiscal 

Years 2008–2015 8

Figure 2: Difference between Commodity Futures Trading 

Commission’s (CFTC) Budget Requests and 

Appropriations, Number of Staff Requested and Number 

Funded, Fiscal Years 2008 through 2015 9

Figure 3: Commodity Futures Trading Commission Space 

Utilization by Office Location, Fiscal Year 2015 11

Figure 4: Vacant office space in Commodity Futures Trading 

Commission’s (CFTC) Kansas City Regional Office 12
Page iii GAO-16-434 Federal Real Property: CFTC Leasing

Abbreviations

BOMA Building Owners and Managers Association International 

CFTC Commodity Futures Trading Commission 

EER Experience Exchange Report 

FAR Federal Acquisition Regulation 

FY fiscal year 

GSA General Services Administration

GSAM General Services Acquisition Manual

OIG Office of Inspector General 

OMB Office of Management and Budget 

rsf rentable square feet 

TEC Technical Evaluation Committee 

TIA Tenant Improvement Allowances 

usf usable square feet

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-16-434 Federal Real Property: CFTC Leasing

441 G St. N.W.

Washington, DC 20548

April 18, 2016

The Honorable John Boozman

Chairman

Subcommittee on Financial Services and General Government

Committee on Appropriations

United States Senate

The Honorable Robert B. Aderholt

Chairman

Subcommittee on Agriculture, Rural Development, Food and 

 Drug Administration, and Related Agencies

Committee on Appropriations

House of Representatives

The Commodity Futures Trading Commission (CFTC)—an independent 

regulatory agency with authority to lease real property, including office 

space—is responsible for regulating the commodity futures market.1 The 

Dodd-Frank Wall Street Reform and Consumer Protection Act (DoddFrank Act) expanded CFTC’s role by adding the previously unregulated 

swaps market2 to its regulatory responsibilities3

––a market nearly dozen 

times the size of the futures market. The Dodd-Frank Act requires or 

authorizes various federal agencies, including CFTC, to issue hundreds 

of regulations to implement its reforms.4 To address these new 

responsibilities, the agency began planning to expand its existing space 

or lease new space in fiscal year 2009 in each of its four office locations 

 1 Commodity futures, also known as futures contracts, is an agreement to purchase or sell 

a commodity for delivery in the future: (1) at a price that is determined at initiation of the 

contract; (2) that obligates each party to the contract to fulfill the contract at the specified 

price; (3) that is used to assume or shift price risk; and (4) that may be satisfied by 

delivery or offset. 

2 A swap is a type of financial product that involves an ongoing exchange of one or more 

assets, liabilities, or payments for a specified period. Financial and nonfinancial firms use 

swaps to hedge risk or speculate, or for other purposes.

3 Pub. L. No. 111-203, 124 Stat. 1376 (2010). 

4 For more information, see GAO, Dodd-Frank Act Regulations: Implementation Could 

Benefit from Additional Analyses and Coordination, GAO-12-151 (Washington, D.C.: Nov. 

07, 2011).

Letter
Page 2 GAO-16-434 Federal Real Property: CFTC Leasing

and implemented this expansion in fiscal years 2010 through 2012. 

According to CFTC officials, this expansion was based in part on the 

additional staff the agency determined it would need to meet the 

requirements of the Dodd-Frank Act once it became enacted. We have 

designated federal real property management, as a high risk area in part 

due to the government’s overreliance on costly, long-term leasing.5

You asked us to review CFTC leasing practices, staffing, and costs.6 This 

report examines: (1) the extent to which CFTC made cost-effective 

decisions and followed leading government guidance in planning for 

additional space and staff for fiscal years 2008 through 2015 and (2) what 

potential options exist to improve the cost-effectiveness of CFTC’s 

leasing.

To address the extent to which CFTC made cost-effective decisions and 

followed leading government guidance to plan for additional space, we 

reviewed GSA leasing guidance,7 Standards for Internal Control in the 

Federal Government,

8 and our prior work on federal real property. We 

also reviewed and analyzed CFTC’s strategic plans, lease procurement 

policies, and space planning documents covering fiscal years 2008 

through 2015. Further, we reviewed applicable federal laws and 

regulations. Moreover, we obtained and analyzed CFTC data on lease 

payments, rentable square feet (rsf) and lease expansions, and its 

staffing history. We determined how CFTC lease costs compare to those 

of other federal agencies and the private sector in commercial buildings in 

markets where CFTC offices are located by analyzing data from the 

General Services Administration’s (GSA) inventory of federal agency 

 5 GAO, High Risk Series: An Update, GAO-15-290 (Washington, D.C.: February 2015).

6

Additionally, you requested that we examine use of its authority to lease real property. As 

part of this examination, you asked us whether CFTC properly recorded obligations for 

four leases. On February 4, 2016, we issued a legal opinion in response to this request.

See Commodity Futures Trading Commission—Recording of Obligations for Multiple-Year 

Leases, B-327242.

7 For the purposes of this review, because GSA has issued extensive guidance on leasing 

and management of federal real property, we are considering this to be leading 

government guidance.

8

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 

(Washington, D.C.: Nov. 1999). GAO issued updated Standards for Internal Control in the 

Federal Government which took effect beginning with fiscal year 2016. See 

GAO-14-704G.
Page 3 GAO-16-434 Federal Real Property: CFTC Leasing

leases for fiscal years 2013 through 2015––the years for which these 

data were available––and data collected by the Building Owners and 

Managers Association International (BOMA).

9 To assess the reliability of 

these data, GSA, and BOMA officials about how they collect and maintain 

the data, as well as the completeness of the data, and we determined that 

the data were sufficiently reliable for the purposes of our report.

To identify what potential options exist to improve the cost-effectiveness 

of CFTC’s leases, we reviewed and analyzed CFTC’s legal authority to 

lease real property. We reviewed a current presidential memorandum and 

Office of Management and Budget (OMB) real property management 

initiatives, including OMB’s National Strategy for the Efficient Use of Real 

Property (National Strategy), a GSA study on workspace utilization, and 

our prior work.

10 We also obtained and analyzed CFTC leases from fiscal 

years 2008 through 2015 and conducted site visits at each of CFTC’s four 

offices. We interviewed CFTC officials at the Washington, D.C., 

headquarters and each of the regional offices (Kansas City, MO; Chicago, 

IL; and New York, NY) about business processes, staffing, space 

planning, and management procedures. Additionally, we interviewed the 

CFTC Office of Inspector General’s (OIG) officials about their reviews of 

CFTC’s space utilization.11 We interviewed GSA officials to understand 

their perspectives on federal lease procurement, including those agencies 

 9 BOMA is an industry association representing the owners and managers of all 

commercial property types, including office buildings. Specifically, we analyzed data from 

BOMA’s Experience Exchange Report (EER). These data, however, were not yet 

available for 2015.

10 See, Presidential Memorandum—Disposing of Unneeded Federal Real Estate, June 

10, 2010, available at: http://www.whitehouse.gov/the-press-office/presidentialmemorandum-disposing-unneeded-federal-real-estate. (last visited March 3, 2016); OMB, 

National Strategy for the Efficient Use of Real Property 2015-2020 (Washington, D.C.: 

March 25, 2015); U.S. General Services Administration, Workspace Utilization and 

Allocation Benchmark (Washington, D.C.: July 2011); and GAO, Federal Real Property: 

Selected Agencies Plan to Use Workforce Mobility to Reduce Space, but Most Efforts Are 

Too New to Have Realized Savings, GAO-14-41 (Washington, D.C.: Oct. 17, 2013).

11 For information on the OIG reviews, see Office of Inspector General, Commodity 

Futures Trading Commission. A Review of Leasing and Occupancy Levels of the Kansas 

City Regional Office of the Commodity Futures Trading Commission. (Washington, D.C.: 

June 4, 2014); Office of Inspector General, Commodity Futures Trading Commission: A 

Review of Space Utilization of the Chicago Regional Office of the Commodity Futures 

Trading Commission (Washington, D.C.: Feb. 26, 2015); Office of Inspector General, 

Commodity Futures Trading Commission: Review of Leasing and Occupancy Levels at 

the New York City Regional Office (Washington, D.C.: Apr. 16, 2015).
Page 4 GAO-16-434 Federal Real Property: CFTC Leasing

with independent leasing authority. Appendix I contains additional 

information on our scope and methodology.

We conducted this performance audit from June 2015 to April 2016 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

The Commodity Futures Trading Act of 1974 (the Act)12 established the 

Commodity Futures Trading Commission (CFTC) as an independent 

agency to better enforce the Commodity Exchange Act and oversee and 

regulate what was at the time an increasingly complex futures markets. 

The Act requires the agency to simultaneously submit its budget request 

to House and Senate Appropriations and oversight committees.13 The Act 

also grants independent leasing authority to CFTC.14 As such, the CFTC 

is not required to obtain its space through GSA.15

Commodity futures’ trading has grown increasingly complex since its 19th 

century origins when agricultural commodities dominated the industry. 

During the 20th century, futures’ trading expanded to include greater 

diversity in commodities, such as metals, oil, and financial products, 

including stock indexes and foreign currency. Subsequently, the DoddFrank Act expanded CFTC’s regulatory jurisdiction to include the 

previously unregulated over-the-counter derivatives market, commonly 

known as the “swaps” market.16

 12 Pub. L. No. 93-463, § 2 (1974).

13 7 U.S.C. § 2(a)(10).

14 7 U.S.C. § 16(b)(3).

15 In addition, in its annual appropriations for CFTC, since fiscal year 1981, Congress has 

authorized CFTC to make appropriations for necessary expenses for CFTC, including “the 

rental of space (to include multiple year leases) in the District of Columbia and elsewhere.”

See, e.g., Pub. L. No. 113-235, 128 Stat. 2130, 2357 (Dec. 16, 2014). 

16 Pub. L. No. 111-203, tit. VII, 124 Stat. 1376, 1641.

Background
Page 5 GAO-16-434 Federal Real Property: CFTC Leasing

CFTC, with a fiscal year 2015 budget of approximately $250 million, is 

responsible for administering and enforcing provisions of the Commodity 

Exchange Act, fostering open and transparent markets, and protecting 

futures markets from excessive speculation, commodity price 

manipulation, and fraud. The agency maintains four mission-related 

oversight divisions:

• Market Oversight: conducts trade surveillance and oversees trading 

facilities such as futures exchanges;

• Swap Dealer and Intermediary Oversight: oversees registration and 

compliance in the derivatives market;

• Clearing and Risk: oversees derivatives clearing organizations17 and 

other major market participants; and

• Enforcement: investigates and prosecutes alleged violations of the 

Commodity Exchange Act.

In addition, the agency maintains several divisions related to functional 

operations and support in its four locations. CFTC closed two regional 

offices in Los Angeles and Minneapolis in 2003 and 2007, respectively.

CFTC began planning to substantially expand leased space prior to the 

enactment of the Dodd-Frank Act and then entered into leases that did 

not make efficient use of limited government resources. CFTC lease 

costs vary compared to other federal leases in the same markets. With 

the exception of its Washington, D.C., headquarters, CFTC’s rsf costs are 

lower or about the same as lease costs among other federal agencies in 

the regional office locations. CFTC followed some elements of leading 

government-leasing practices; however, the agency lacked 

comprehensive policies and procedures to guide efficient and costeffective decisions for lease procurement. As a result, CFTC currently has 

lease obligations for unused space that extend to 2021 and beyond.

 17 A derivatives-clearing organization is a clearinghouse or similar organization that 

enables each party to a transaction to substitute the credit of the clearinghouse for the 

credit of the parties, provides for the settlement or netting of obligations from the 

transaction, or otherwise provides services mutualizing or transferring the credit risk from 

the transaction.

CFTC Did Not Make 

Cost-effective 

Decisions Consistent 

with Leading 

Government 

Guidance when 

Planning for 

Additional Space
Page 6 GAO-16-434 Federal Real Property: CFTC Leasing

CFTC renewed leases and expanded space in its Washington, D.C., 

headquarters and three regional office locations, prior to receiving the 

funding necessary to hire staff to occupy the additional space. 

Anticipating the increased oversight that would result from regulating and 

monitoring the swaps market, CFTC began planning for the expansion of 

its leased space in the fiscal year 2009 time frame—more than a year 

before the enactment of the Dodd-Frank Act in July 2010.

18 The resulting 

leasing decisions negatively impacted the CFTC’s space utilization and 

resulted in inefficient use of limited government resources. Federal 

standards for internal control call for agencies to identify and analyze 

relevant risks associated with achieving agencies’ objectives. According 

to these standards, management needs to comprehensively identify risks 

and should consider all significant interactions between the entity and 

other parties as well as internal factors at both the entity-wide and activity 

level, including considering economic conditions.19 Although CFTC’s 

leasing decisions from fiscal years 2009 to 2012 significantly increased its 

space, CFTC could not provide us with an analysis of risks related to 

these decisions. CFTC has incrementally amended leases and expanded 

space in its Washington, D.C., headquarters since first occupying the 

building in 1995, and in 2009, CFTC extended the lease that was set to 

expire in 2015 by 10 years (through the end of fiscal year 2025) and 

expanded its leased space by more than 78 percent from fiscal years 

2010 through 2012.

20 Similarly, CFTC amended existing leases and 

expanded space in its Chicago and New York regional offices in 2009 and 

2011, respectively, and in 2011, CFTC relocated its Kansas City regional 

office to a larger space. As discussed below, these expansions resulted 

in reduced rates of occupancy and increased costs.

As Table 1 shows, overall, the CFTC increased its leased space by 74 

percent from fiscal year 2008 through fiscal year 2015. The greatest 

increase occurred in the Kansas City Regional Office where the volume of 

office space more than doubled. Also, during this period, the Kansas City 

Board of Trade closed and merged with the Chicago Mercantile 

 18 The Wall Street Reform and Consumer Protection Act of 2009 was eventually enacted 

as the Dodd-Frank Act. See H.R. 4173, 111th Cong. (2009).

19 GAO/AIMD-00-21.3.1.

20 According to our analysis of the lease, CFTC initially leased about 132,000 square feet 

for its Washington D.C., headquarters, and expanded leased space within the building 

multiple times between 1994 and 2013. 

CFTC Did Not Fully 

Assess the Risk of Not 

Receiving Requested 

Funding when Leasing 

Additional Space

Square footage of Leased 

Space Increased
Page 7 GAO-16-434 Federal Real Property: CFTC Leasing

Exchange. In the Chicago and New York regional offices, CFTC also 

increased leased space—adding approximately 20,000 square feet in 

Chicago and 22,000 square feet in New York. According to CFTC, the 

additional space currently gives the agency the capacity to accommodate 

1,289 staff overall.

Table 1: The Commodity Futures Trading Commission’s (CFTC) Leased Space by Location, Fiscal Years 2008– 2015 (in 

Thousands of Rentable Square Feet)

Fiscal 

year 2008

Fiscal 

year 2009

Fiscal 

year 2010

Fiscal 

year 2011

Fiscal 

year 2012

Fiscal 

year 2013

Fiscal 

year 2014

Fiscal 

year 2015

Increase 

between

fiscal years

2008 & 2015

Washington, D.C. 162 162 162 271 288 288 288 288 78%

Chicago 41 41 41 60 60 60 60 60 48%

New York 39 39 39 39 46 62 62 62 56%

Kansas Citya 8 8 8 8 32a 24 24 24 202%

Total rentable 

square feet 250 250 250 378 420 435 435 435 74%

Source: GAO Analysis of CFTC data. | GAO-16-434

a

CFTC signed a lease for additional space at a new location in Kansas City in fiscal year 2011, and 

vacated its prior location and began paying rent for the new space in fiscal year 2012. Therefore this 

table includes the space in both the old and new Kansas City locations for fiscal year 2012.

The agency requested additional funding to cover its new regulatory 

responsibilities and, as figure 1 below demonstrates, in fiscal years 2009 

and 2010 the CFTC was appropriated funding in excess of its request. 

Figure 1 also shows that this period was followed by 5 years of 

appropriations less than the amount requested. Therefore, the CFTC 

could not expand its staff at a rate that would allow for full utilization of the 

additional leased space. On average, the agency received about 109 

percent of the funding it requested in fiscal years 2009 and 2010 and 

about 76 percent of its requests from fiscal years 2011 through 2015.
Page 8 GAO-16-434 Federal Real Property: CFTC Leasing

Figure 1: Commodity Futures Trading Commission’s (CFTC) Budget Requests and 

Appropriations (in Millions), Fiscal Years 2008–2015

Figure 1 illustrates that––while not always granting CFTC’s full funding 

request––Congress increased funding in nominal terms for CFTC every 

year from fiscal year 2008 through fiscal year 2015––with the exception of 

fiscal year 2013 when funding declined slightly. In other words, CFTC’s 

fiscal year 2015 appropriations represent an increase of nearly $138 

million, or about 123 percent, when compared to fiscal year 2008. The 

amount CFTC allocated versus the amount it requested for staff follows a 

similar pattern. In fiscal years 2009 and 2010, based on its higher than 

requested appropriation, CFTC hired more staff than it had anticipated. In 

the following 5 fiscal years, with a lower appropriation, it hired fewer staff 

than requested. CFTC, on average, hired about 13 percent less staff than 

it originally requested between fiscal year 2008 and fiscal year 2015 (see 

fig. 2).
Page 9 GAO-16-434 Federal Real Property: CFTC Leasing

Figure 2: Difference between Commodity Futures Trading Commission’s (CFTC) Budget Requests and Appropriations, 

Number of Staff Requested and Number Funded, Fiscal Years 2008 through 2015

CFTC federal employee staffing increased in absolute terms by about 53 

percent from fiscal year 2008 through fiscal year 2015, according to 

CFTC data (see table 2 below). Moreover, CFTC greatly expanded the 

number of on-site contractors it employs, an increase of about 324 

percent during the same period. According to CFTC, since commodity 

futures’ trading is increasingly electronic and data intensive, most of the 

CFTC’s on-site contractors are involved with operating and maintaining 

CFTC’s electronic data systems. This increase also reflects the $35 to 

$55 million Congress set aside for the purchase of information technology 

in the appropriations for fiscal years 2012, 2014 and 2015. When CFTC’s 

employees and on-site contractors are combined, aggregate agency 

staffing increased from 549 to 1006, or more than 80 percent, from fiscal 

years 2008 through 2015. This increase, however, falls below the 
Page 10 GAO-16-434 Federal Real Property: CFTC Leasing

approximately 1,289 positions for which the CFTC leased additional office 

space.

Table 2: Changes in Numbers of Commodity Futures Trading Commission’s (CFTC) 

Federal Employees and On-site Contractors, Fiscal Years 2008–2015

Fiscal

Year 2008

Fiscal

Year 2015 Change

CFTC Federal employees 487 743 53%

CFTC on-site contractors 62 263 324%

CFTC Federal employees and on-site contractors 549 1006 83%

Source: GAO analysis of CFTC data. | GAO-16-434

As discussed below, expanding leased space before obtaining an 

appropriation to fund additional staff has resulted in substantial space 

underutilization, which increased the space allocation per CFTC staff 

member (including CFTC employees and on-site contractors). According 

to our analysis of CFTC data, the overall allocation of useable square feet

(usf) per CFTC staff member in fiscal years 2008 through 2010 was 303 

square feet on average. From fiscal years 2011 through 2015, the 

allocation increased to 465 square feet on average in contrast to the 

approximately 300 usf per employee noted in CFTC’s 2009 Program of 

Requirements, a space-planning document for all four of the agency’s

office locations.

The total space utilization for all four CFTC offices combined was about 

78 percent at the end of fiscal year 2015. However, each office had 

differing levels of space utilization, as figure 3 below illustrates, according 

to our analysis of CFTC data.

Utilization of CFTC’s Space 

Decreased
Page 11 GAO-16-434 Federal Real Property: CFTC Leasing

Figure 3: Commodity Futures Trading Commission Space Utilization by Office 

Location, Fiscal Year 2015

Note: CFTC measures its office capacity based on the number of staff it can accommodate.

As figure 3 above illustrates, the Kansas City Regional Office is the most 

underutilized of the four offices with a staff of 31, including contractors, 

housed in space intended to accommodate 72.

21 When we visited the 

Kansas City office, officials told us that CFTC vacated approximately a 

third of its leased space in response to the CFTC’s OIG recommendation 

that the agency take steps to dispose of underutilized property in that 

location, including subleasing or returning the space to the landlord (see 

figure 4 below). According to CFTC officials, the only effective option to 

cease paying for the vacant space in Kansas City involves negotiating 

with the landlord to return the space. The landlord agreed to try to lease 

the vacant floor; however, there has been limited interest thus far, and 

CFTC continues to pay rent on the vacant space.

 21 Office of Inspector General, Commodity Futures Trading Commission. A Review of 

Leasing and Occupancy Levels of the Kansas City Regional Office of the Commodity 

Futures Trading Commission. (Washington, D.C.: June 4, 2014). According to CFTC, the 

capacity of the Kansas City Regional Office was 72 at of the end of fiscal year 2015.
Page 12 GAO-16-434 Federal Real Property: CFTC Leasing

Figure 4: Vacant office space in Commodity Futures Trading Commission’s (CFTC) Kansas City Regional Office

In our review of CFTC leases, we found that all of the leases include 

provisions for subleasing space. CFTC officials told us that the agency 

was only authorized to enter into subleases in circumstances where the 

sublease would further the purposes of the Commodity Exchange Act.22

According to CFTC, subleasing the space in a manner that furthers the 

purposes of the Act would, as a practical matter, be very difficult to 

accomplish.

The CFTC’s OIG released additional reports in 2015 that found 

underutilized space in the Chicago and New York City Regional offices 

but not nearly to the extent found in the Kansas City Regional Office.23

The report on the Chicago Regional Office recommended better utilization 

of space. According to our analysis of CFTC’s data, space utilization in 

the Chicago office improved as CFTC increased the number of staff 

 22 7 U.S.C. § 16(b)(3).

23 Office of Inspector General, Commodity Futures Trading Commission, A Review of 

Space Utilization of the Chicago Regional Office of the Commodity Futures Trading 

Commission (Washington, D.C.: Feb. 26, 2015), and Office of Inspector General, 

Commodity Futures Trading Commission, A Review of Space Utilization of the New York 

City Regional Office of the Commodity Futures Trading Commission (Washington, D.C.: 

Apr. 16, 2015).
Page 13 GAO-16-434 Federal Real Property: CFTC Leasing

(including contractors) from 137 in fiscal year 2014 to 150 in fiscal year 

2015. The Chicago office currently utilizes about 88 percent of its space 

(see fig. 3). With regard to the New York City Regional Office, the OIG 

recommended that CFTC sublet or negotiate returning the additional 

space it leased beginning in fiscal year 2012. Our analysis of CFTC data 

found that space utilization in the New York City office, similar to the 

Chicago office, also improved as staff increased (including contractors) 

from 80 to 91, or nearly 14 percent, from fiscal year 2014 to fiscal year 

2015. When we visited the New York City office in January 2016, we 

observed vacant offices, some of which were unfinished, unventilated, 

and not adjacent to one another. As of the end of fiscal year 2015, the 

New York City office had a utilization rate of 68 percent (see fig. 3). CFTC 

officials said that they have notified the landlord that they would like to 

return some space on one floor, but the building currently has a vacancy 

rate of about 30 percent, so this space would likely be difficult to rent.

According to CFTC data, combined lease costs for all CFTC offices 

reached about $20.6 million in fiscal year 2015—a 79 percent increase in 

nominal dollars over the combined fiscal year 2008 lease costs (see app. 

II for details on lease costs). All four of the CFTC office leases typically 

cover a period of 10 years. As such, the current leases will not expire until 

fiscal years 2021 through 2025. The Kansas City Regional Office lease 

will expire first in 2021, followed by New York in 2022, Chicago in 2022, 

and Washington, D.C., in 2025. According to CFTC, lease renewal 

planning typically begins about to 2 years in advance of lease expiration, 

so it is reasonable to expect CFTC to begin planning around fiscal year 

2019.

CFTC officials told us that they converted certain Tenant Improvement 

Allowances (TIA) provided under leases into rent abatements in order to 

reduce rent in 2011, 2012, and 2013.

24 CFTC used TIA to complete 

improvements and alterations to the CFTC office space in Washington, 

D.C., Chicago, New York, and Kansas City, as well as to cover such 

costs as architectural expenses, furnishings, equipment, cabling, and 

moving expenses for the CFTC offices. In addition, under the terms of 

certain leases, unused portion of the TIA could be converted to rental 

abatement and then used to offset rental payments. For example, the 

 24 Tenant Improvement Allowances (TIA) are lease incentives from the landlord. These 

allowances can be used for construction, leasehold improvements, or rent expenses. 

CFTC Lease Costs Increased
Page 14 GAO-16-434 Federal Real Property: CFTC Leasing

Kansas City Regional Office lease sets the TIA at $35 per rentable 

square foot. According to our analysis, at this rate, $852,670 was 

available for tenant improvements, and for this particular lease, any 

amount not expended in the first 6 months was available as a rebate 

against the rent expense. As appendix II shows, CFTC used $78,222 of 

TIA in fiscal year 2013 as a rent credit. CFTC did not state how it used 

TIA for space planning.

We compared CFTC’s lease costs for fiscal year 2013 through fiscal year 

2015 to average lease costs of other federal agencies that lease through 

GSA in privately owned buildings in the four markets where CFTC has 

offices. We also compared the cost of private sector leases, as measured 

by the Building Owner Management Association (BOMA) for 2013 and 

2014, a widely recognized industry association.

25 As table 3 below shows, 

with the exception of the Washington, D.C., headquarters––where CFTC 

2015 lease costs are about 18 percent higher than the average lease 

costs for federal agencies leasing office space through GSA––CFTC’s 

rentable square foot costs are lower or about the same as lease costs 

among other federal agencies in the regional office locations. More 

specifically, CFTC’s lease costs were lower than those of other federal 

agencies in Kansas City and New York and slightly higher than those of 

other federal agencies in Chicago (see table 3 below).26

 25 BOMA International’s commercial building performance data, including income and 

expense data, serves as an industry benchmark. We determined, however, that BOMA 

Experience Exchange Report (EER). EER survey data is not generalizable to other 

buildings in those markets for which no BOMA survey data was reported. In addition, 

BOMA survey data for 2015 is not yet available.

26 As noted above, Kansas City Regional Office offset its lease costs in fiscal year 2014 

with TIA.

CFTC Lease Costs Vary 

Compared to Those of Other 

Government Agencies
Page 15 GAO-16-434 Federal Real Property: CFTC Leasing

Table 3: Comparison of Commodity Futures Trading Commission’s (CFTC) Lease Costs with Average Lease Costs of Other 

Federal Agencies and Private Sector Buildings, Fiscal Years 2013 through 2015 (in Nominal Dollars per Rentable Square Foot)

Washington Kansas City Chicago New York

Fiscal year 

2013

CFTC $50.58 $18.50 $34.61 $30.62

General Service Administration 

(GSA) leasinga $44.77 $22.33 $34.51 $44.30

Building Owners and Managers 

Association (BOMA)b $39.27 $20.71 $23.95 $53.44

Fiscal year 

2014

CFTC $50.30 $16.88 $36.29 $36.16

GSA leasinga $44.62 $22.36 $34.41 $45.23

BOMA $43.41 $24.55 $24.29 $53.48

Fiscal year 

2015

CFTC $53.12 $23.73 $39.23 $37.40

GSA leasinga $45.04 $23.55 $37.65 $49.09

BOMAb not available not available not available not available

Source: GAO analysis of CFTC, GSA, and BOMA data. | GAO-16-434

Note: Other federal leases referred to in the title are those managed by the General Service 

Administration (GSA).

a

Our analysis of average lease costs did not account for the ratio of rentable square feet (rsf) to 

usable square feet (usf) because this information is not available in the GSA lease inventory data. 

Therefore, these costs do not consider the “add-on” factor (rsf/usf) commonly used to compare 

building space.

b

The BOMA survey data are not generalizable to other buildings in those markets for which no BOMA 

survey data were reported. The number of office buildings with reportable BOMA Experience 

Exchange Report (EER) survey data in the Washington market in fiscal years 2013 through 2014 

ranged from 82 to 93, in the Chicago market ranged from 140 to 156, in the Kansas City market 

ranged from 61 to 65, and in the New York market ranged from 61 to 63. BOMA EER survey data for 

2015 is not yet available.

As discussed previously, the CFTC began planning space expansion 

more than one year before the Dodd-Frank Act was signed into law and 

entered into leasing decisions in response to anticipated requirements of 

Dodd-Frank without fully assessing the risk of not receiving appropriations 

sufficient to execute its plans. According to CFTC OIG estimates, the 

failure to consider this risk has resulted in the agency possibly spending 
Page 16 GAO-16-434 Federal Real Property: CFTC Leasing

as much as $74 million for vacant space,

27 if current conditions persist 

through the end of the current leases in fiscal years 2021 through 2025. 

Thus, the CFTC is not carrying out its mission in an efficient and costeffective manner. 

Both CFTC’s guidance and GSA guidance share a common purpose: to 

maximize the value for the government while also fulfilling the agency’s 

mission. CFTC’s Statement of General Principles, which outlines the 

actual lease acquisition process, states a goal of maximizing competition 

to the extent practicable and making reasonable decisions to obtain 

space that enable the Commission to accomplish its mission in an 

efficient and cost-effective manner.28 Similar to CFTC’s Statement of 

General Principles, GSA’s Leasing Desk Guide states that it aims to help 

ensure that it leases quality space that is the best value for the 

government. However, CFTC’s guidance is very high-level and lacks the 

detail of GSA’s guide, which provides more comprehensive leasing 

policies and procedures. According to federal standards for internal 

control, policies and procedures help ensure that actions are taken to 

address risks and are an integral part of an entity’s accountability for 

stewardship of government resources.29 When we applied this standard, 

we found that CFTC’s policies did not include guidance to assess the risk 

of not receiving its full budget requests.

CFTC has two documents, the 2009 Program of Requirements and the 

2011 Statement of General Principles, that comprise its leasing guidance. 

The Program of Requirements, according to CFTC officials, is a space 

planning document for all four of its office locations. It provides 

27 In commenting on a draft of this report, CFTC stated that they believe the OIG’s 

estimate of “as much as $74 million” overstated the percentage of vacant space and also 

assumed that CFTC’s occupancy rates remain flat. CFTC further stated that the number of 

occupants has increased since the time of the OIG’s review. We did not independently 

verify the OIG’s or CFTC’s statements. Our use of the OIG’s statement is intended to give 

an overall order of magnitude of the potential costs of the vacant space. (See app. IV for 

CFTC’s agency comments.)

28 CFTC created this Statement of General Principles in 2011 after entering into the new 

and expanded leases. The full name of these principles is Statement of General Principles 

and Practices Pertaining to the Award and Administration of CFTC’s Office Space Leases, 

2011. (See appendix III for CFTC’s Statement of General Principles). 

29 GAO/AIMD-00-21.3.1.

CFTC Used Some 

Leading Government 

Guidance when Procuring 

Space but Lacked 

Comprehensive Policies 

and Procedures
Page 17 GAO-16-434 Federal Real Property: CFTC Leasing

information on projected employee and contractor staff size; and 

requirements for offices, workstations, common use areas and other 

space needs. Based on the Statement of General Principles, CFTC 

follows select portions of leading government guidance, and regulation30

that facilitate: maximizing competition to the extent practicable; avoiding 

conflicts of interest; adhering to the requirements of procurement integrity; 

and making reasonable decisions to obtain space that enables the 

Commission to accomplish its mission in an efficient and cost-effective 

manner. For example, CFTC officials told us that they followed select 

portions of leading government guidance when they began expanding 

space in 2009.31

Consistent with internal control standards, GSA’s guidance provides 

comprehensive details on ways to formulate, document, and 

operationalize lease procurement. For example, GSA’s Leasing Desk 

Guide specifically states that confirming space requirements includes 

verifying that the client has appropriate funding. By comparison, CFTC’s 

guidance does not include this level of detail. The lack of this type of 

specificity in CFTC’s guidance may have contributed to not executing its 

lease procurements consistent with standards for internal control and 

thereby not making cost-effective decisions. Although CFTC officials told 

us that the agency relies on a commercial real estate broker for all 

phases of the office space acquisition process—including (1) conducting 

market surveys, advertising CFTC’s requirements and drafting 

solicitations for offer; (2) analyzing offers received; and (3) reviewing 

lease documents—this reliance did not prevent the agency from entering 

into lease agreements before the agency had the funding necessary to 

staff the space.

 30 According to CFTC officials, although not required to, they selectively follow portions of 

the Federal Acquisition Regulation (FAR), the primary regulation used by all Federal 

Executive agencies in their acquisition of supplies and services with appropriated funds. 

CFTC also follow portions of the General Services Acquisition Manual (GSAM) which 

consolidates GSA’s agency acquisition rules and guidance. GSA’s Leasing Desk Guide 

contains authorities, policies, technical and procedural guides, and administrative 

limitations governing the acquisition by lease of real property. 

31 According to CFTC officials, CFTC awarded its current leases in the Kansas City and 

New York City offices in 2010 and 2011, respectively, through full and open competition 

based on provisions in the FAR. In both locations, CFTC advertised its requirements and 

solicited offers from all interested parties. Further, CFTC renewed and expanded its 

existing leases in its Washington, D.C. headquarters and Chicago office in 2009 following 

select portions of the GSAM.
Page 18 GAO-16-434 Federal Real Property: CFTC Leasing

Federal internal control standards also state that significant decisions 

need to be clearly documented and readily available for examination. 

CFTC could only provide us with partial documentation and analysis of 

how it made decisions to enter into new or expanded leases. CFTC 

officials told us that they could not locate additional documentation 

because the employees who had responsibility for leasing had left the 

agency. Without this documentation, future decision makers may lack the 

institutional knowledge they need to make informed decisions.

Utilizing leading government guidance could have helped CFTC to make 

reasonable decisions to obtain space that enables the Commission to 

accomplish its mission in an efficient and cost-effective manner—in 

keeping with its Statement of General Principles. In its Fiscal Year 2014 

Agency Financial Report,

32 CFTC says it plans to review and revise its 

space-related policies and procedures in keeping with OMB’s National 

Strategy for efficient use of space and real property. As of February 2016, 

CFTC officials told us that these policies and procedures are under 

review, but could not provide any other details or a timeline for 

completion. Further, when the current leases expire between April 2021 

and September 2025, it will have been approximately 10 years since the 

agency last undertook lease procurement. Without comprehensive 

policies and institutional knowledge, the agency may be at risk of 

continuing to make decisions that do not make the best use of limited 

government resources.

 32 Commodity Futures Trading Commission, Agency Financial Report for Fiscal Year 2014 

(Washington, D.C.: November 2014).
Page 19 GAO-16-434 Federal Real Property: CFTC Leasing

As noted above, based on an executive branch memo and initiatives, a 

GSA study, and our own research, we have identified several options that 

CFTC may pursue now and in the future to increase space utilization and 

improve the cost-effectiveness of its leasing arrangements: (1) relocating 

offices to less costly locations, (2) reducing office space required through 

increased telework, and (3) consolidating two regional offices—Kansas 

City and Chicago. CFTC officials told us that these options may not be 

achievable before their current leases expire. However, they have not 

fully examined the current feasibility of these options or their potential 

impact on reducing leased space and increasing cost-effectiveness in the 

future. Looking ahead, CFTC’s current leases are set to expire from fiscal 

year 2021 through 2025, and CFTC officials said that a reasonable 

practice is to begin planning for leasing activities 2 years prior to lease 

expiration. In the case of high-value leases—those with an annual rent 

above $2.85 million— GSA’s Leasing Desk Guide suggests the lease 

acquisition process begin 3 to 5 years prior to lease expiration. In keeping 

with these time frames, CFTC would begin planning for new leases in the 

next few years; however, CFTC does not have a timeline for doing so.

CFTC’s offices in Washington, D.C., Kansas City, Chicago, and New York 

City are located in privately owned buildings in close proximity to the 

financial markets they oversee. According to CFTC, these locations 

support the agency’s oversight role, as, for example, the Dodd-Frank Act 

requires CFTC to perform annual examinations of two important 

derivatives clearing organizations––organizations that process the 

financial transactions involved in futures trading. The examination of 

these organizations requires meetings with officials and routine on-site 

examinations of their operations. However, there are federal buildings in 

Chicago and New York City also conveniently located within walking 

distance of the current locations of CFTC’s Chicago and New York City 

offices. According to CFTC officials, they did not consider leasing space 

in the federal buildings in these locations during the time they entered into 

new or expanded leases. Without doing this analysis, CFTC officials 

could not know whether the federal buildings may have had available 

space at a lower rent per square foot at the time they entered into lease 

agreements. As a result, they may not have acquired space in a costeffective manner, per their Statement of General Principles.

CFTC’s Washington, D.C., headquarters is located in the Central 

Business District submarket, which has one of the highest average rental 

rates in the region. By comparison, some other federal agencies have 

located their headquarters outside of downtown Washington, D.C. For 

Potential Options for 

Improving Costeffectiveness of 

CFTC’s Leasing 

Include Relocating, 

Teleworking, and 

Consolidating 

Regional Offices

Moving Offices to Less 

Costly Locations
Page 20 GAO-16-434 Federal Real Property: CFTC Leasing

example, the Farm Credit Administration, an independent regulatory 

agency that examines the banks, associations, and related entities of the 

Farm Credit System, located its headquarters in suburban northern 

Virginia. Further, the U.S. Department of Commerce’s Economics & 

Statistics Administration announced, in January 2016, that it plans to 

move its Bureau of Economic Analysis—approximately 590 employees—

from private leased space in downtown Washington, D.C., to federally 

owned space in suburban Maryland. According to the U.S. Department of 

Commerce, the new location is expected to save taxpayers $66 million 

over 10 years.

The 2010 presidential memorandum directs executive branch agencies to 

dispose of unneeded federal real estate, including a specific directive to 

“take immediate steps to make better use of remaining property assets as 

measured by utilization and occupancy rates.”33 Additionally, a fiscal year 

2016 House appropriations bill committee report directs CFTC “to find 

ways to decrease space and renegotiate leasing agreements.”34 CFTC 

has conducted some analysis of optimizing space and potential leasecost reductions for its current locations. CFTC officials said that under 

current lease agreements, the agency has limited options for negotiating 

changes in the lease terms. For example, the leases lack provisions that 

would allow CFTC to terminate leases prior to the agreed-upon term in 

such a way that CFTC would not still be responsible for the remaining 

rent payments. However, CFTC has not calculated the complete analysis 

of potential costs and benefits of relocating offices. Without this type of 

analysis, CFTC cannot make fully informed decisions about the costeffectiveness of relocating its offices in the near term nor fully assess 

alternatives available to improve its space utilization.

According to a 2011 GSA study, federal agencies and private sector 

organizations have been forced to continuously evaluate their current 

workspace utilization.35 The Telework Enhancement Act of 2010 required 

 33 Presidential Memorandum—Disposing of Unneeded Federal Real Estate, June 10, 

2010 http://www.whitehouse.gov/the-press-office/presidential-memorandum-disposingunneeded-federal-real-estate. (accessed Mar. 21, 2016). 

34 H. Rept. No. 114-205, at 77 (2015). House Agriculture, Rural Development, Food and 

Drug Administration, and Related Agencies Appropriations Bill.

35 U.S. General Services Administration, Workspace Utilization and Allocation Benchmark 

(Washington, D.C.: July 2011).

Teleworking
Page 21 GAO-16-434 Federal Real Property: CFTC Leasing

the head of each executive agency to establish and implement a telework 

policy for eligible employees and requires the Office of Personnel 

Management to assist agencies in establishing appropriate qualitative 

and quantitative measures and teleworking goals.36 GSA’s study states

that federal agencies’ expanded use of telework could reduce their real 

estate footprint and real estate costs. With wireless communication tools, 

such as smart phones and wireless networking available, federal 

agencies and private organizations have turned to alternative work 

environments with the potential to reduce workspace costs and optimize 

physical workspace. OMB’s National Strategy notes that employee 

telework, among other things, has resulted in a need for less space. For 

example, we found in 2013 that some agencies, such as GSA and the 

U.S. Department of Agriculture’s Forest Service, have adopted “office 

hoteling arrangements,” a practice of providing office space to employees 

on an as-needed basis. This reduces the need for an additional amount of 

physical space that an agency needs to purchase or rent. Specifically, 

GSA implemented a hoteling program for all employees that allowed it to 

eliminate the need for additional leased space at four locations in the 

Washington, D.C., area, resulting in projected savings of approximately 

$25 million in annual lease payments and about a 38 percent reduction in 

needed office space. Further, the U.S. Forest Service uses hoteling, 

among other alternative workplace arrangements, to save an estimated 

$5 million in annual rent.37

Currently, 77 percent of CFTC employees have agreements for either 

recurring or episodic telework (see table 4).

 36 Pub. L. No. 111-292 (2010)

37 GAO, Federal Real Property: Selected Agencies Plan to Use Workforce Mobility to 

Reduce Space, but Most Efforts Are Too New to Have Realized Savings, GAO-14-41

(Washington, D.C.: Oct. 17, 2013).
Page 22 GAO-16-434 Federal Real Property: CFTC Leasing

Table 4: Commodity Futures Trading Commission Fiscal Year 2015 Employee Telework Agreements (as of 9/30/2015)

Location Recurringa Episodic onlya Total

Percentage of 

employees 

Washington, D.C. 170 196 366 73%

New York City 44 23 67 82%

Chicago 65 54 119 89%

Kansas City 11 6 17 63%

TOTAL 290 279 569 77%

Source: GAO analysis of CFTC data. | GAO-16-434

a

Recurring telework refers to telework that occurs on a regular schedule. Episodic telework is 

telework that occurs on an as-needed basis.

According to GSA’s study, the average workspace typically costs 

between $10,000 and $15,000 annually per person. Eliminating 100 

workspaces, for example, could conceivably save an organization over $1 

million a year. While CFTC officials told us that they do need an on-site 

presence in certain cases, such as for oversight and enforcement 

activities, since commodity futures trading is now wholly electronic, 

according to CFTC officials, increased teleworking could be a possible 

alternative to reduce CFTC’s rental space costs in future leases. CFTC 

officials said that their current policy allows for recurring telework 1 to 2 

days every 2 weeks but have not assessed the option of increasing 

telework and reducing leased space as current leases expire and are 

renewed. However, CFTC officials said they have efforts under way to 

consider what policy makes sense for their operations.

OMB’s National Strategy states that a key step in improving real property 

management is to reduce the size of the inventory by prioritizing actions 

to consolidate, co-locate, and dispose of properties. As discussed, the 

Kansas City regional office currently has 31 staff working in office space 

that accommodates 72. In addition, the Kansas City Board of Trade 

merged with the Chicago Mercantile Exchange in 2012. According to 

CFTC officials, the Kansas City Board of Trade only traded futures and 

options for one product (hard-red winter wheat) during all or substantially 

all the period from fiscal years 2008 through 2012. The majority of 

Kansas City CFTC staff are involved with enforcement, swap dealer and 

intermediary oversight, and market oversight––similar to the staff in the 

Chicago office. Further, the Chicago Regional Office also has 

underutilized office space and, according to our analysis, could possibly 

accommodate staff from the Kansas City office. We found that CFTC’s 

Consolidating the Kansas 

City and Chicago Regional 

Offices
Page 23 GAO-16-434 Federal Real Property: CFTC Leasing

space could be better utilized in both of these regional offices. As noted 

above, for the Kansas City regional office, CFTC officials have said that 

they have been unable to return their unused space. According to CFTC 

officials, they have not assessed the option of possibly consolidating 

these two regional offices. As a result, CFTC may continue to pay for 

vacant space through the duration of the Kansas City lease until 2021.

While not an exhaustive list, these options—relocation, telework, and 

consolidation—are in keeping with OMB’s National Strategy to realize the 

greatest efficiency, reduce portfolio costs, and conserve resources for 

service and mission delivery.

CFTC began planning to substantially expand leased space in 

anticipation of proposed requirements prior to the enactment of the DoddFrank Act. The agency renewed leases and expanded space in its four 

office locations before fully assessing the risk of not receiving sufficient 

funding to hire staff to use the space. By not considering this risk, CFTC 

has taken on the obligation to potentially pay as much as $74 million for 

unused space over the term of the current leases—a situation that could 

span more than a decade, given the agency’s lease obligations. We 

found that CFTC did not have comprehensive leasing policies or 

procedures in place, but followed some leading government guidance 

when procuring additional space. This lack of comprehensive policies and 

procedures presents challenges in making sound management decisions 

to obtain space in an efficient and cost-effective manner. OMB’s National 

Strategy states that a key step in improving real property management is 

to reduce the size of the inventory. Potentially cost-effective options 

include relocating offices to less costly locations, enhancing teleworking, 

and consolidating two regional offices—Kansas City and Chicago. 

Exploring these possibilities and establishing a timeline for completion 

could result in CFTC’s using its available funds in a more cost-effective 

manner.

To help ensure that the CFTC makes cost-effective leasing decisions, 

and considers options for reducing future lease costs, we recommend 

that the Chairman of the CFTC take the following two actions prior to 

entering into any new or expanded lease agreements:

• Ensure that as CFTC revises its leasing policies and procedures, it 

includes comprehensive details on lease procurement that are 

Conclusions

Recommendations for 

Executive Action
Page 24 GAO-16-434 Federal Real Property: CFTC Leasing

consistent with leading government guidance and standards to assure 

cost-effective decisions.

• Establish a timeline for evaluating and documenting options to 

potentially improve space utilization and reduce leasing costs 

including, but not restricted to, (1) moving offices to less costly 

locations, (2) implementing enhanced telework, and (3) consolidating 

the Kansas City and Chicago regional offices.

We provided a draft of this report to CFTC for review and comment. 

CFTC provided written comments, which are summarized below and 

reprinted in appendix IV of this report. CFTC also provided technical 

comments, which we incorporated as appropriate.

CFTC concurred with our first recommendation that prior to entering into 

any new or expanded lease agreements, as CFTC revises its leasing 

policies and procedures, it should include comprehensive details on lease 

procurement that are consistent with leading government guidance and 

standards to assure cost-effective decisions. CFTC stated that it intends 

to review its procedures to address the recommendation and to ensure 

that the agency makes cost-effective decisions. In addition, CFTC noted 

that its staff will engage the General Services Administration (GSA) 

regarding how the two agencies can work together to better leverage 

GSA's leasing expertise in addressing current leasing issues and 

assessing future space requirements. We are encouraged by these plans, 

as they have the potential to help CFTC make sound leasing decisions to 

obtain space in an efficient and cost-effective manner.

CFTC generally concurred with the second recommendation, which 

states that prior to entering into any new or expanded lease agreements, 

CFTC establish a timeline for evaluating and documenting options to 

potentially improve space utilization and reduce leasing costs including,

but not restricted to, (1) moving offices to less costly locations, (2) 

implementing enhanced telework, and (3) consolidating the Kansas City 

and Chicago regional offices. Specifically, CFTC stated that it will develop 

a timeline and plans for evaluating, initiating, implementing, and 

documenting space-related actions, especially as the various lease 

expiration dates approach. CFTC further stated that it will continue to look 

for actions it can take to make the most efficient use of space. However, 

CFTC noted that it does not believe it can reduce leasing costs in the 

near term without incurring significant expense and likely increasing the 

agency's overall space-related expenses. According to agency officials, 

Agency Comments 

and Our Evaluation
Page 25 GAO-16-434 Federal Real Property: CFTC Leasing

CFTC’s leases generally lack provisions that would allow CFTC to 

terminate leases prior to the agreed-upon term. CFTC also did not 

specifically agree or disagree to consider the three specific potential 

options we suggested for consideration. We continue to believe that 

CFTC should consider these options to make the most efficient use of 

space prior to entering into any new or expanded lease agreements. The 

options we suggested are in keeping with OMB’s National Strategy and 

other agencies’ actions to realize the greatest efficiency, reduce portfolio 

costs, and conserve resources for service and mission delivery.

We will send copies of this report to the appropriate congressional 

committees and the Commissioner of the Commodity Futures Trading 

Commission. In addition, the report will be available at no charge on the 

GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at 202-512-2834 or wised@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found at the last page 

of this report. GAO staff who made key contributions to this report are 

listed in appendix V.

David J. Wise

Director, Physical Infrastructure Issues
Appendix I: Objectives, Scope, and 

Methodology

Page 26 GAO-16-434 Federal Real Property: CFTC Leasing

This report examines (1) the extent to which CFTC made cost-effective 

decisions and followed leading government guidance in planning for 

additional space for fiscal years 2008 through 2015; and (2) what 

potential options exist to improve the cost-effectiveness of CFTC’s 

leasing. To identify leading government practices and guidance on 

leasing, we reviewed GAO reports on real property and held discussions 

with GSA officials. To identify requirements applicable to CFTC leasing, 

we reviewed federal laws, and regulations. To address the extent to 

which CFTC followed leading government practices and guidance for 

leasing additional space, we reviewed and analyzed CFTC’s strategic 

plans, lease procurement policies, and space-planning documents 

covering fiscal years 2008 through 2015. We also reviewed, analyzed and 

evaluated the extent to which CFTC’s leasing practice aligned with: the 

Office of Management and Budget’s (OMB) National Strategy for the 

Efficient Use of Property, (National Strategy) its Reduce the Footprint 

policy; GSA’s leasing practices and guidance on lease procurement and 

pricing; and evaluated the extent that CFTC leasing processes were 

consistent with the Standards for Internal Control in the Federal 

Government. In addition, we also reviewed and analyzed relevant CFTC’s 

Office of Inspector General (OIG) reports on space utilization among 

three of the four CFTC offices. We also obtained and analyzed CFTC 

data on lease payments, rentable square feet (rsf) and lease expansions, 

and CFTC’s staffing history. 

To assess the reliability of CFTC data, we determined which CFTC data 

were derived from computerized data systems, interviewed cognizant 

CFTC officials about these systems, and reviewed system 

documentation. We determined that these data were sufficiently reliable 

for the purposes of our report. To determine costs per rsf, we divided the 

lease costs for each CFTC office by its total rentable square footage for 

fiscal years 2008 through 2015. To determine the impact of CFTC’s 

excess space on its utilization, we converted the leased space from rsf to 

useable square feet (usf). We calculated the average rsf per staff member 

(including CFTC employees and on-site contractors) for fiscal years 2008 

through 2010––the period before CFTC expanded existing or entered into 

new leases—and then determined the conversion factor to align this 

average with the 300 usf per staff member cited in CFTC’s 2009 Program 

of Requirements. Using this factor (21.17 percent), we calculated the 

average usf per staff member for fiscal years 2011 through 2015––the 

period after CFTC expanded existing or added new leases. To determine 

how CFTC lease costs compare to the average cost per rsf of other 

federal agencies leasing space in commercial buildings in the four 

markets where CFTC offices are located, we analyzed data from GSA’s 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 27 GAO-16-434 Federal Real Property: CFTC Leasing

lease inventory for fiscal years 2013 through 2015––the years for which 

these data are available. We combined the monthly GSA lease inventory 

reports into fiscal years and then sorted the data by leases by state and 

county matching those where CFTC maintains offices. Next, to better 

approximate CFTC leases, we sorted the data to include only those 

offices that were 100 percent office space and “fully serviced,” before 

dividing rsf by lease costs to determine the cost per square foot for each 

lease. We then sorted the leases by size to approximate the size range of 

CFTC leases and by location to include only the cities in which CFTC 

maintains offices.

To illustrate how CFTC lease costs may compare to the private sector, 

we analyzed data from the Building Owners and Managers Association 

(BOMA). Specifically, using BOMA’s Experience Exchange Report (EER) 

survey data for the four markets, we sorted the data to include privately 

owned buildings within the city limits where CFTC maintains offices and 

choose the BOMA average cost per rsf for Office Rent Income category. 

We confirmed with BOMA officials that “Office Rent Income” from the 

building owners’ perspective was the equivalent of cost per rsf from the 

tenant perspective. BOMA’s EER survey data have not yet been compiled 

for fiscal year 2015. To assess the reliability of these data, we interviewed 

GSA and BOMA officials about how they collect and maintain the data, as 

well as the completeness of the data, and we determined that the data 

were sufficiently reliable for the purposes of our report. However, BOMA 

does not collect EER survey data in a way that allows for an assessment 

of survey coverage, that is, there is no information available to measure 

the percentage of buildings in any given market that are included in the 

data, nor is there any information available to measure the extent to 

which particular types of buildings may be under-or over-represented. 

Therefore, the measures of lease cost per square foot resulting from 

BOMA’s EER survey data are not generalizable to other buildings in 

those markets for which no BOMA survey data were reported. However, 

when reporting measures of cost per square foot from the BOMA EER 

survey data, we include the number of buildings with reportable data from 

which the measure was derived. We attempted to use Federal Real 

Property Profile (FRPP) data to determine per-square-foot lease costs 

between fiscal years 2008 through 2014, but based on our analysis of the 

data and meetings with GSA, we determined that the data were 

unsuitable for that purpose. 

To identify what potential options exist that CFTC could consider towards 

improving the cost-effectiveness of future lease procurement, we 

reviewed and analyzed CFTC’s legal authority to lease properties. We 
Appendix I: Objectives, Scope, and 

Methodology

Page 28 GAO-16-434 Federal Real Property: CFTC Leasing

also obtained and analyzed CFTC leases and conducted site visits at 

each of the four offices (Washington, D.C., headquarters, (Kansas City, 

MO; Chicago, IL; and New York, NY). We interviewed CFTC officials at 

CFTC Headquarters and all of the regional offices about their business 

processes, staffing, and space procurement planning and management 

procedures. Additionally, we interviewed CFTC Office of Inspector 

General (OIG) officials about their findings and ongoing reviews on CFTC 

space utilization. Furthermore, we interviewed GSA officials to 

understand their perspectives on lease procurement, including those by 

agencies with independent leasing authority. Using our analysis of CFTC 

leases, space procurement planning documents, policies and procedures, 

our interviews with agency officials, along with our review of a current 

presidential memorandum, OMB real property management initiatives 

and GSA leasing guidance, we identified several potential options CFTC 

may consider to improve the cost-effectiveness of its lease portfolio.

We conducted this performance audit from June 2015 to April 2016 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: CFTC Leasing Costs from Fiscal 

Years 2008 through 2015

Page 29 GAO-16-434 Federal Real Property: CFTC Leasing

Table 5: CFTC Lease Costs by Location, Fiscal Years (FY) 2008 through 2015 (in Millions)

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Increase

FY 2008 -

FY 2015

Washingtona $7.3 $8.5 $8.4 $11.3 $14.7 $14.6 $14.5 $15.3 109%

Chicagob,c $1.7 $1.9 $1.7 $1.7 $2.1 $2.1 $2.2 $2.4 36%

New Yorkd,e $2.2 $2.4 $2.3 $2.4 $0.2 $1.9 $2.2 $2.3 1 3%

Kansas Cityf,g $0.2 $0.2 $0.2 $0.2 $0.7 $0.5 $0.4 $0.6 215%

Total $11.5 $13.0 $12.5 $15.6 $17.7 $19.0 $19.3 $20.6 79%

Source: GAO Analysis of CFTC data. | GAO-16-434

a

2012: Washington, DC, Regional Office applied $1,165,706 from Tenant Improvement Allowance 

(TIA) to rent payment.

b

2012: Chicago Regional Office’s newly negotiated rental rates take effect.

c

2011: Chicago Regional Office applied $535,344 from TIA to rent payment.

d

2012: New York Regional Office reflects rental reduction credit.

e

2015: New York Regional Office lease costs exclude an additional $22,192 accounting for an upward 

adjustment due to utilities overage.

f

2012: the lease for the Kansas City Regional Office at its former location terminated in fiscal year 

2012. Thus, Kansas City fiscal year 2012 lease costs include the cost and an early cancellation 

payment for the old lease ($237,600) plus the cost of the new lease ($479,630).

g

2013: Kansas City Regional Office applied $78,222 from TIA to rent payment.

Appendix II: CFTC Leasing Costs from 

Fiscal Years 2008 through 2015
Appendix III: CFTC’s Statement of General 

Principles and Practices Pertaining to the 

Award and Administration of CFTC’s Office 

Space Leases, 2011

Page 30 GAO-16-434 Federal Real Property: CFTC Leasing

I. Leasing of Space:

A. General Principles:

The general principles governing Commodity Futures Trading Commission (“CFTC” or “Commission”) 

acquisition of office space include:

• Maximizing competition to the extent practicable;

• Avoiding conflicts of interest;

• Adhering to the requirements of Procurement Integrity; and

• Reasoned decision-making to obtain space that enables the Commission to accomplish its mission in 

an efficient and cost-effective manner.

Although neither the Federal Acquisition Regulation (FAR) nor the General Services Acquisition Manual 

(GSAM) specifically apply to the acquisition of office space by CFTC, the principles cited above are 

embodied in those documents. Accordingly, CFTC has chosen to comply with aspects of their 

requirements that facilitate these ends. This is discussed further below.

B. Applicability of Regulations and Policies:

The FAR does not apply to the acquisition of leased office space. Specifically, the scope of the FAR’ s 

coverage is defined in Section 1.104 as follows: “The FAR applies to all acquisitions as defined in: Part 2 

of the FAR, except where expressly excluded.” According to Part 2.101(b), the term “acquisition” is 

defined as the “acquiring by contract with appropriated funds of supplies or services (including 

construction) by and for the use of the Federal Government through purchase or lease, whether the 

supplies or services are already in existence or must be created, developed, demonstrated, and 

evaluated.” The term “supplies” is defined as “all property except land or interest in land.” Because a lease 

of real property, including a lease of office space, is an interest in land, it is not a “supply” and the FAR 

does not apply.

The GSAM is also inapplicable to the lease of office space by CFTC. The GSAM applies to the acquisition 

of leased office space by GSA and any agencies delegated independent leasing authority by GSA and so 

required by GSA to use the GSAM. CFTC’s independent leasing authority was mandated by its 

authorizing legislation and not by GSA. Accordingly the GSAM is not required for use by CFTC in its 

acquisition of office space for lease.

In the absence of explicit regulatory direction, CFTC has chosen to comply with aspects of these 

documents that facilitate the principles cited above. The GSAM is used specifically for its guidance as to 

the considerations and findings necessary to support a lease procurement by other than full and open 

competition. Additional guidance and processes that may be applicable to lease acquisition are contained 

in CFTC’s acquisition policy.

Appendix III: CFTC’s Statement of General 

Principles and Practices Pertaining to the 

Award and Administration of CFTC’s Office 

Space Leases, 2011
Appendix III: CFTC’s Statement of General 

Principles and Practices Pertaining to the 

Award and Administration of CFTC’s Office 

Space Leases, 2011

Page 31 GAO-16-434 Federal Real Property: CFTC Leasing

C. Acquisition Process:

The acquisition process for all lease awards begins with requirements definition and completion of market 

research. Market research is used to determine whether CFTC is best served by an open market 

competitive acquisition or a follow-on award to the incumbent lessor.

I. Steps in a competitive acquisition of leased office space are as follows:

• Develop Program of Requirements

• Conduct market survey

• Define delineated area

• Formulate an acquisition strategy

• Advertise requirement

• Review expressions of interest

• Tour properties

• Develop a solicitation list

• Draft and issue a Solicitation for Offers

• Draft a Technical Evaluation Plan

• Designate a Technical Evaluation Committee (TEC)

• Evaluate initial offers

• Complete initial TEC report

• Complete price analysis

• Complete Phase II Determination (assumes negotiation, otherwise, the Contracting Officer will draft a 

Source Selection Statement at this time)

• Conduct negotiations

• Solicit and evaluate revised offers

• Complete Final TEC Report

• Contracting Officer completes Source Selection Statement

• Memorialize terms of agreement between the parties in a lease document

2. Steps in award of a lease by other than full and open competition are as follows:

• Develop Program of Requirements

• Conduct market survey

• Complete Justification for Other Than Full and Open Competition

• Conduct negotiations

• Memorialize terms of agreement between the parties in a lease document

D. Acquisition Objective:

The functional objective of the acquisition process described herein is to acquire office space in a building 

that efficiently supports CFTC’s mission; provides a high quality work environment; and offers a 

satisfactory breadth and variety of amenities. This outcome must be met in a manner that maximizes 
Appendix III: CFTC’s Statement of General 

Principles and Practices Pertaining to the 

Award and Administration of CFTC’s Office 

Space Leases, 2011

Page 32 GAO-16-434 Federal Real Property: CFTC Leasing

value to the Commission, considering price and technical factors. It must be provided at a price that is fair 

and reasonable.

II. Construction of Space:

CFTC’s office space is constructed in accordance with the terms of its office space lease agreements. 

Construction contracts and trade subcontracts, as appropriate, are awarded based on a competitive 

process that results in fair and reasonable pricing. CFTC’s Contracting Officer is privy to bid information 

and, in consultation with CFTC’s architect, project manager, and other knowledgeable Commission 

personnel, approves project pricing as well as any required contract change orders.

III. Administration of Leases:

CFTC’s Contracting Officer is responsible for analyzing rent-related charges and authorizing payment as 

appropriate. The Contracting Officer is also responsible for addressing with the landlord any issues 

pertaining to lease compliance. The Office of Management Operations is responsible for day-to-day facility 

operational matters and consults with the Contracting Officer on lease-related issues as appropriate.
Appendix IV: Comments from the Commodity 

Futures Trading Commission

Page 33 GAO-16-434 Federal Real Property: CFTC Leasing

Appendix IV: Comments from the 

Commodity Futures Trading Commission
Appendix IV: Comments from the Commodity 

Futures Trading Commission

Page 34 GAO-16-434 Federal Real Property: CFTC Leasing
Appendix IV: Comments from the Commodity 

Futures Trading Commission

Page 35 GAO-16-434 Federal Real Property: CFTC Leasing

This paragraph, regarding 

the CFTC OIG, is 

addressed on page 16 at 

footnote 27.
Appendix V: GAO Contact and Staff 

Acknowledgments

Page 36 GAO-16-434 Federal Real Property: CFTC Leasing

David J. Wise, (202) 512-2834 or wised@gao.gov

In addition to the contact named above, Amelia Bates Shachoy (Assistant 

Director), Lindsay Madison Bach, Dwayne Curry, Lawrance Evans, 

Terence Lam, Hannah Laufe, Sara Ann Moessbauer, Minette Richardson, 

Amelia Michelle Weathers, and Crystal Wesco made key contributions to 

this report.

Appendix V: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(542249)
The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO’s website (http://www.gao.gov). Each weekday 

afternoon, GAO posts on its website newly released reports, testimony, 

and correspondence. To have GAO e-mail you a list of newly posted 

products, go to http://www.gao.gov and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s website, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537.

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube.

Subscribe to our RSS Feeds or E-mail Updates. 

Listen to our Podcasts and read The Watchblog.

Visit GAO on the web at www.gao.gov.

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations

Public Affairs

Please Print on Recycled Paper.