FEDERAL REAL 

PROPERTY

Excess and Underutilized 

Property Is an Ongoing 

Challenge

Statement of David Wise, Director Physical 

Infrastructure

Testimony 

Before the Subcommittee on 

Government Operations, Committee on 

Oversight and Government Reform, 

House of Representatives

For Release on Delivery 

Expected at 9:30 a.m., EDT

Thursday, April 25, 2013

GAO-13-573T

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-13-573T, a testimony

before the Subcommittee on Government 

Operations, Committee on Oversight and 

Government Reform, U.S. House of 

Representatives 

April 25, 2013

FEDERAL REAL PROPERTY 

Excess and Underutilized Property Is an Ongoing

Challenge 

Why GAO Did This Study

The federal government has given 

high-level attention to the issue of 

real property management and has 

made some progress. This includes 

establishing FRPC—chaired by the 

Office of Management and Budget 

(OMB)—which created the FRPP 

database managed by GSA. 

However, federal real property 

management remains a high-risk 

area, in part, because of longstanding problems including excess 

and underutilized property, overreliance on leasing, and challenges 

with security. 

This statement summarizes GAO’s

2013 High Risk Update as it pertains 

to excess and underutilized property, 

drawing on a June 2012 GAO report

on this subject (GAO-12-645). In that 

report, GAO recommended that

GSA, in consultation with FRPC, 

develop a plan to improve the FRPP 

and that OMB develop a national 

strategy for managing federal excess 

and underutilized real property. GSA 

agreed with the recommendation and 

described actions its officials are 

taking to implement it. OMB did not 

directly state whether it agreed or 

disagreed with the recommendation. 

A full discussion of GAO’s findings 

and recommendations can be found 

in the June 2012 report.

This statement draws from the June 

2012 report that analyzed agency 

data and real property management 

activities and involved visits to 26 

sites containing excess and 

underutilized buildings from five 

civilian federal real-property-holding 

agencies selected for their significant 

real property portfolios. 

What GAO Found

The federal government faces long-standing problems in managing real property, 

including excess and underutilized property. In focusing on this issue, GAO found 

that data problems continue to hamper federal efforts. GAO examined Federal 

Real Property Profile (FRPP) data, which is managed by the General Services 

Administration (GSA) and is to describe the real property under the custody and

control of executive branch agencies. GAO identified inconsistencies and 

inaccuracies at 23 of the 26 locations visited in 2011 and 2012 in key data 

elements related to the management of excess and underutilized property, 

including utilization, condition, annual operating costs, and value of the buildings. 

For example, several buildings that received high scores for condition were in 

poor condition, with problems including, asbestos, mold, health concerns, 

radioactivity, and flooding. These findings raised concern that the FRPP is not a 

useful tool for describing the nature, use, and extent of excess and underutilized 

federal real property. 

The previous and current administrations have sought to generate cost savings 

associated with improving management of excess and underutilized property. 

However, some of these efforts have been discontinued and potential savings for 

others are unclear. It is important to note that the five federal agencies that GAO

reviewed have taken some actions to dispose of and better manage these 

properties, including using excess and underutilized property to meet space 

needs, and consolidating offices and reducing employee workspace to use space 

more efficiently. However, the agencies still face challenges managing these 

properties. For example, property disposal costs can outweigh the financial 

benefits of property disposal. Additionally, legal requirements—such as those 

related to preserving historical properties and the environment—can make the 

property disposal process lengthy, according to agency officials. Finally, the

interests of multiple—and often competing—stakeholders may not align with the 

most efficient use of government resources and can complicate real property 

decisions. For example, GSA officials reported that local stakeholder interests 

had delayed conveyance of a federal building in Portland, Oregon. A 

comprehensive, long-term national strategy would support better management of 

excess and underutilized property by, among other things, defining the scope of 

the problem; identifying achievement goals; addressing costs, resources, and 

investments needed; and clearly outlining roles and coordination mechanisms 

across agencies. Furthermore, legislation has been reintroduced in the 113th

Congress related to civilian real property disposal and the President’s budget 

request for fiscal year 2014 states the administration will continue to pursue 

legislative reform.

View GAO-13-573T. For more information, 

contact David Wise at (202) 512-2834 or 

wised@gao.gov
Page 1 GAO-13-573T 

United States Government Accountability Office

Washington, DC 20548

Chairman Mica, Ranking Member Connolly, and Members of the 

Subcommittee:

I am pleased to be here today to discuss federal real property 

management, with a focus on challenges associated with managing 

excess and underutilized real property. The federal government’s real 

property portfolio includes about 400,000 buildings located throughout the 

country that are owned and leased by federal agencies. In 2004, the 

President issued an executive order establishing the Federal Real 

Property Council (FRPC).1 The executive order required the FRPC to 

work with the General Services Administration (GSA) to establish and 

maintain a single, comprehensive database describing the nature, use, 

and extent of all real property under the custody and control of executive 

branch agencies.2

In 1990, we began reporting on government operations that we identified 

as “High Risk.” Since then, generally coinciding with the start of each new 

Congress, we have reported on these high-risk areas and updated the 

High Risk List, most recently in February 2013.

The FRPC created the Federal Real Property Profile 

(FRPP) to meet this requirement and began data collection in 2005. As 

we have reported, despite the implementation of the executive order, 

nationwide data collection efforts, and various reform efforts and 

proposals, data problems have continued and agencies continue to face 

persistent challenges with managing real property.

3

 My statement 

summarizes GAO’s analysis of the challenges associated with excess 

and underutilized property discussed in the high-risk update. The material 

in this statement was largely drawn from on our June 2012 report on this 

subject.4

 

1 Federal Real Property Asset Management, Exec. Order No. 13327, 69 Fed. Reg. 5897 

(Feb. 6, 2004).

For our June 2012 report on federal excess and underutilized 

property, we analyzed Office of Management and Budget (OMB) and 

GSA documents, and interviewed OMB, GSA, and other agency officials. 

We focused our review on five federal real-property-holding agencies: 

2 Except when otherwise required for reasons of national security.

3 GAO, High-Risk Series: An Update, GAO-13-283 (Washington, D.C.: February 2013). 

4 GAO, Federal Real Property: National Strategy and Better Data Needed to Improve 

Management of Excess and Underutilized Property, GAO-12-645 (Washington, D.C.: 

June 20, 2012). 

 
 

Page 2 GAO-13-573T 

GSA and, the departments of Energy (Energy), the Interior (Interior), 

Veterans Affairs (VA), and Agriculture (USDA). We selected these 

agencies based on their reported building square footage and, in one 

case, the reported number of excess properties. Collectively, these five 

agencies accounted for approximately two-thirds of the building square 

footage reported by civilian agencies. We obtained and analyzed the 

fiscal years 2008, 2009, and 2010 FRPP submissions from these 

agencies and visited a nonprobability sample5 of approximately 180 

buildings at 26 sites where excess or underutilized owned buildings had 

been reported by the five civilian agencies.6 Our representations of the 

condition and circumstances of individual properties in this statement are 

based on information in our June 2012 report; it is possible that conditions 

or circumstances may have changed since then. We conducted this work 

in accordance with generally accepted government auditing standards. 

More detailed information about the scope and methodology used for our 

June 2012 work can be found in that report.

As discussed in the 2013 High Risk update, the federal government 

continues to face long-standing problems in managing its real property.

7

 

5 Because this is a nonprobability sample, observations made at these site visits do not 

support generalizations about other properties described in the FRPP database or about 

the characteristics or limitations of other agencies’ real property data. Rather, the 

observations made during the site visits provided specific, detailed examples of issues 

that were described in general terms by agency officials regarding the way FRPP data are 

collected and reported and served to complement our analysis of data collection practices 

across these agencies. 

The previous and current administrations have given high level attention 

to the issue of federal real property management. For example, in May 

2011, the administration proposed legislation, referred to as the Civilian 

Property Realignment Act (CPRA). CPRA, among other things, would 

have established a legislative framework for consolidating and disposing 

6 In the case of VA, which did not categorize any of its building as “excess,” we visited 

sites where buildings had been reported as “not utilized” or “underutilized.” 

7 In addition to discussing excess and underutilized real property, the High Risk Update 

also discussed costly leasing and security challenges. The federal government’s 

continued reliance on costly leasing has been an ongoing problem. The government often 

leases space from private landlords in the same real-estate market where it owns 

underutilized real property. This practice is inefficient, resulting in millions of dollars of 

additional costs to federal agencies. In addition, agencies face challenges in securing real 

property. For example, management and funding challenges have hampered the Federal 

Protective Service’s ability to protect about 9,000 federal facilities managed by GSA.

Federal Real Property 

Management 

Continues to be High 

Risk
 

Page 3 GAO-13-573T 

of civilian real property. Although this and other real property reform 

legislation introduced in the previous session of Congress have not been 

enacted, according to the President’s budget request for fiscal year 2014, 

the administration will continue to pursue enactment of CPRA.8

Federal excess and underutilized property is an ongoing challenge facing 

the government. In focusing on this issue, we found that data problems 

continue to hamper federal efforts in this area. In our June 2012 review, 

we found that FRPP data did not accurately describe the properties at 23 

of 26 sites that we visited, often overstating the condition and annual 

operating costs. Our work focused on reviewing agency-reported FRPP 

data elements including utilization, condition index, annual operating 

costs, and value.

 

Utilization: We found that agencies did not report building utilization 

consistently.9 For example, FRPC guidance states that for offices, 

hospitals, and warehouses, utilization is the ratio of occupancy to current 

design capacity.10

 

8 CPRA legislation that passed the House in the 112th Congress was reintroduced in the 

113th Congress in February. H.R. 695, 113th Cong. (2013). Differences exist between the 

House bill and the administration’s proposal.

USDA stated that FRPC has not established 

government-wide definitions for occupancy or current design capacity. As 

a result, each agency within USDA has its own internal procedures for 

determining a building’s utilization level. Among the 26 federal sites we 

visited, we found utilization data inconsistencies or inaccuracies for 

properties at 19 of these sites. For example, at one USDA site we visited 

we found two houses that have been empty since 2009; however, they 

were both reported to the FRPP as utilized for 2009 and 2010. See figure 

1 to view images of these two USDA buildings. 

9 The FRPC defines utilization as “the state of having been made use of, i.e., the rate of 

utilization.” 

10 For laboratories, utilization is the ratio of active units to current design capacity. For 

housing, utilization is the percentage of individual units that are occupied. 

Excess and Underutilized 

Property 
 

Page 4 GAO-13-573T 

Figure 1: Example of Inaccurate Reporting of Utilization Data at a USDA Site 

a

According to FRPC guidance, housing unites must be 85 percent to 100 percent occupied to warrant 

a utilization score of “utilized.”

Condition Index: According to FRPC guidance, the condition index11

should consider a building’s repair needs.12

 

11 The FRPC defines the condition index as “the general measure of the constructed 

asset’s condition at a specific point in time,” and the index is calculated as 1 minus the 

ratio of repair needs to plant replacement value (PRV) multiplied by 100. 

However, we found that 

agencies do not always follow this guidance. For example, when 

agencies have determined that a property is not needed and will 

ultimately be disposed of, they may not repair that property, even though 

it may be in a state of significant disrepair. This allows agencies to use 

their limited funds to maintain properties that they regularly use. In some 

cases, however, agencies gave such properties high condition index 

scores despite their relatively poor conditions, resulting in condition index 

data that did not accurately reflect each property’s condition as set forth in 

FRPC guidance. We found condition-index-reporting inconsistencies and 

inaccuracies at 21 of 26 sites visited. Figure 2 illustrates several separate 

12 Needed repairs are determined by the amount of repairs necessary to ensure that a 

constructed asset is restored to a condition substantially equivalent to the originally 

intended and designed capacity, efficiency, or capability. GSA, Federal Real Property 

Council: 2010 Guidance for Real Property Inventory Reporting (Washington, D.C.: Oct. 

25, 2010).
 

Page 5 GAO-13-573T 

buildings that received high condition index scores, even though they are 

in poor condition. We found problems with these buildings including: 

asbestos, mold, collapsed walls/roofs, health concerns, radioactivity, 

deterioration, and flooding.
 

Page 6 GAO-13-573T 

Figure 2: Examples of Federal Property Reported as Being in Excellent Condition in the FRPP Database
 

Page 7 GAO-13-573T 

Annual Operating Costs: We found that multiple agencies were unable 

to measure operating costs at the building level. Instead, officials 

apportioned costs to the individual buildings according to square footage. 

Furthermore, because of the difficulty in measuring operating costs, only 

one of USDA’s component agencies even attempted to measure the 

actual operating costs of each individual building. We also identified 

instances of buildings with reported high annual operating costs even 

though all utilities were turned off and no maintenance was being 

conducted. We found data inconsistencies and inaccuracies for annual 

operating costs at 19 of 26 sites that we visited.13

Value: FRPC guidance defines value as the cost of replacing an existing 

constructed asset at today’s standards; this factor is known as the Plant 

Replacement Value (PRV). However, GSA officials cautioned us not to 

think of PRV as an asset’s actual worth, because it is not an appraisal of 

the property or any kind of measure of the asset’s market value. We 

found that the PRV is typically much higher than the actual worth of the 

building because the PRV does not take into account market conditions 

or the condition of the asset. Additionally, according to agency officials, 

many excess properties do not have the potential for generating revenue 

for the federal government. Indeed, we saw more than 80 buildings on 

our site visits that agencies plan to demolish when they have the 

resources to execute the demolitions. Figure 3 shows properties that 

have high reported values and high condition indexes even though they 

are in poor condition and have remained unused for many years.

 

13 The FRPC defines annual operating costs as “the expenses for recurring maintenance 

and repair costs, utilities, cleaning and/or janitorial costs, and roads/grounds expenses.” 
 

Page 8 GAO-13-573T 

Figure 3: Empty Buildings in Poor Condition with High Plant Replacement Values (PRVs)

These examples of inconsistencies and inaccuracies in the key areas 

described above suggest that the FRPP database is not a useful 

decision-making tool for managing excess and underutilized federal real 

property. In addition to our work at these sites, we found that FRPC had 

not followed sound data collection practices when collecting FRPP data. 

Specifically, we found, among other problems, issues with data 

consistency, collaboration, and reporting. For example, the FRPC has not 

ensured that data elements are consistently defined and reported, even 

though the 2004 Executive Order seeks reporting on a uniform basis. In 

addition, OMB, as the Chair of the FRPC, has not collaborated effectively 

with the agencies that submit FRPP data and may be requiring agencies 

to spend resources on data collection that is not useful. The agencies we 

reviewed expressed concerns about the data collection process, including 
 

Page 9 GAO-13-573T 

the amount of data collection required, the time they are given to 

implement new data requirements, and their ability to collect data as 

required accurately.

In addition to the problems we found with real property data, we also 

found that the federal government continues to face other challenges 

managing excess and underutilized properties. The previous and current 

administrations have sought ways to generate cost savings associated 

with improving management of excess and underutilized properties. 

However, some of these efforts were discontinued, and others have not 

led to proven cost savings associated with the management of these 

properties. It is important to note that the five federal agencies we 

reviewed have taken some actions to dispose of and better manage these 

properties, including using excess and underutilized property, 

consolidating offices, and reducing employee work space to use space 

more efficiently. However, the agencies still face long-standing challenges 

to managing these properties. For example, agency disposal costs can 

outweigh the financial benefits of property disposal. Legal requirements—

such as those related to preserving historical properties14

Stakeholder interests can also conflict with property disposal or reuse 

plans, and the locations of some federal properties can make property 

disposal and reuse difficult. For example, GSA officials reported that local 

stakeholder interests have delayed conveyance of a federal building in 

Portland, Oregon. At the time of our review, the Department of Education 

planned to use the building for educational activities beneficial to the 

community. However, the officials received a request from the City of 

Portland that certain offices that were already located in the building 

remain in downtown Portland. GSA was attempting to find suitable space 

for these offices in downtown Portland so that it could convey the building 

to the Department of Education.

and conducting 

environmental remediation—can make the property disposal process 

lengthy according to agency officials.

Given the complexities of issues related to excess and underutilized 

federal real property management, to unsuccessful implementation of 

 

14 See, GAO, Federal Real Property: Improved Data Needed to Strategically Manage 

Historic Buildings, Address Multiple Challenges, GAO-13-35 (Washington, D.C.: 

Dec. 11, 2012).

Underlying Management 

Challenges
 

Page 10 GAO-13-573T 

cost savings efforts across administrations, and to the issues that still 

remain with data reporting, we believe that a national strategy could 

provide a clear path forward to help federal agencies manage excess and 

underutilized property in the long term. A national strategy can guide 

federal agencies and other stakeholders to systematically identify risks, 

resources needed to address those risks, and investment priorities, when 

managing federal portfolios. Without a national strategy, the federal 

government may be ill-equipped to sustain efforts to better manage 

excess and underutilized property.

Sustained progress is needed to address the conditions and persistent 

challenges that make the area of federal real property management High 

Risk. Multiple administrations have committed to a more strategic 

approach toward managing real property. However, their efforts have not 

yet fully addressed the underlying challenges that we have identified.

In our June 2012 report, we recommended that OMB, in consultation with 

FRPC, develop a national strategy for managing federal excess and 

underutilized real property. OMB did not directly state whether it agreed 

or disagreed with our recommendation. Additionally, FRPP is not yet a 

useful tool for describing the nature, use, and extent of excess and 

underutilized federal real property. Accordingly, in the same report, we 

recommended that GSA and FRPC take action to improve the FRPP to 

increase federal capacity to implement and monitor corrective measures. 

GSA has taken action to begin implementing our recommendation related 

to FRPP. GSA’s actions are intended to address each part of the 

recommendation, including:

• enhancements to clearly define data collection requirements,

• data quality tests and assessments to ensure data reliability,

• development of new performance measures to support governmentwide goals, and

• efforts to improve collaboration with agencies.

We will continue to monitor these agencies’ efforts to implement our 

recommendations, which we believe are critical to addressing the 

challenges that have led us to keep federal real property management on 

our High Risk List. Furthermore, as mentioned earlier, legislation has 

been reintroduced in the 113th Congress related to civilian real property 

Corrective Actions 
 

Page 11 GAO-13-573T 

disposal and the President’s budget request for fiscal year 2014 states 

the administration will continue to pursue legislative reform.

Chairman Mica, Ranking Member Connolly, and Members of the 

Subcommittee, this concludes my prepared statement. I would be happy 

to answer any questions that you may have at this time.

For further information regarding this testimony, please contact David 

Wise at (202) 512-2834 or wised@gao.gov. In addition, contact points for 

our Offices of Congressional Relations and Public Affairs may be found 

on the last page of this statement. Individuals who made key contributions 

to this testimony are David Sausville (Assistant Director), Nancy Lueke, 

and Jade Winfree.

GAO Contacts and 

Staff 

Acknowledgements 

(542219)
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