FEDERAL REAL 

PROPERTY

Improved Standards 

Needed to Ensure 

That Agencies' 

Reported Cost Savings 

Are Reliable and 

Transparent

Report to the Committee on 

Homeland Security and 

Governmental Affairs, 

U.S. Senate

October 2013

GAO-14-12

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-12, a report to the 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate

October 2013

FEDERAL REAL PROPERTY

Improved Standards Needed to Ensure That 

Agencies’ Reported Cost Savings Are Reliable and 

Transparent

Why GAO Did This Study

In June 2010, the President issued a 

memorandum directing federal

agencies to achieve $3 billion in real 

property cost savings by the end of 

fiscal year 2012 through a number of 

methods, including disposal of excess 

property, energy efficiency 

improvements, and other space 

consolidation efforts.

GAO was asked to review the cost 

savings agencies reported in response 

to the memorandum. This report 1) 

describes the cost savings agencies 

reported in response to the June 2010 

presidential memorandum and how 

those savings were identified by 

selected agencies and 2) determines 

the extent that selected agencies’ 

reporting of savings was reliable and 

transparent, and how, if at all, reporting 

of real property cost savings could be 

improved. GAO reviewed OMB 

guidance for implementing the 

memorandum, reviewed the cost 

savings agencies reported on the 

administration’s Performance.gov

website, and obtained documentation 

from and interviewed officials from six 

agencies and OMB staff about the 

agencies’ reported cost savings. GAO

selected the agencies based on their 

overall cost-savings targets and the 

types of savings measures 

implemented, among other things.

What GAO Recommends

GAO recommends that the Director of 

OMB establish clear and specific 

standards to help ensure reliability and 

transparency in the reporting of future 

real-property cost savings. OMB

generally agreed with GAO’s 

recommendation.

What GAO Found

Agencies reported real property cost savings of $3.8 billion in response to the 

June 2010 presidential memorandum from disposal, space management, 

sustainability, and innovation activities. Space management savings, defined by 

the Office of Management and Budget (OMB) as those savings resulting from, 

among other things, consolidations or the elimination of lease arrangements that 

were not cost effective, accounted for the largest portion of savings reported by 

all agencies, and for about 70 percent of the savings reported by the six agencies 

GAO reviewed—the General Services Administration (GSA) and the 

Departments of Agriculture (USDA), Energy (DOE), Homeland Security (DHS), 

Justice (DOJ), and State (State). The requirements of the memorandum, as well 

as agencies’ individual savings targets and the time frame for reporting savings, 

led the selected agencies to primarily report savings from activities that were 

planned or under way at the time the memorandum was issued.

GAO’s review of the six selected agencies identified several problems that affect 

the reliability and transparency of the reporting of cost savings in response to the 

June 2010 memorandum. In particular, the memorandum and subsequent 

guidance issued by OMB were not clear on the types of savings that could be 

reported, particularly because the term “cost savings” was not clearly defined.

For example, officials from several agencies GAO reviewed said the guidance 

was unclear about whether savings from cost avoidance measures could be 

reported. In addition, the agencies interpreted the guidance differently and, in 

some cases, did not follow the guidance, practices that led to inconsistent 

reporting, for example:

• Agencies made different assumptions in reporting disposal savings: Two

agencies reported one year of avoided operations and maintenance savings 

for the year in which the disposal occurred, while three agencies reported up 

to 3 years of savings depending on when disposals occurred during the 3-

year period.

• Some agencies did not deduct costs associated with their disposals: State 

and DHS did not deduct the costs associated with their reported disposal

savings. DOE deducted costs for some of its reported disposals savings, but 

did not deduct costs for disposals carried out by its Office of Environmental 

Management.

• Some agencies reported savings outside the time frame of the 

memorandum: GSA reported savings from a property exchange, but retained

ownership of the site in 2013, after the deadline, fiscal 2012’s end. USDA

reported savings from office closures that occurred in fiscal year 2013.

Finally, OMB did not require agencies to provide detailed documentation of their 

reported savings or include specific information about agencies’ reported savings 

on Performance.gov, limiting transparency. Agency officials stated that the

memorandum broadened their understanding of real property cost-savings 

opportunities. However, establishing clearer standards for identifying and 

reporting savings would improve the reliability and transparency of the reporting 

of cost savings and help decision-makers better understand the potential savings

of future initiatives to improve federal real-property management.

View GAO-14-12. For more information, 

contact David J. Wise at (202) 512-2834 or 

wised@gao.gov.
Page i GAO-14-12 Real Property Cost Savings

Letter 1

Background 3

Agencies Reported $3.8 Billion in Cost Savings from Under Way or 

Planned Activities 7

Agencies Lacked Clear Standards for Reporting Reliable and 

Transparent Cost Savings 14

Conclusions 22

Recommendation for Executive Action 22

Agency Comments 23

Appendix I Objectives, Scope, and Methodology 24

Appendix II Contact and Staff Acknowledgments 27

Tables

Table 1: Office of Management and Budget Real Property Cost 

Savings Categories 6

Table 2: Cost Savings as Reported by All Agencies and Selected 

Agencies, by Category, Fiscal Years 2010 to 2012 8

Table 3: Comparison of Selected Agencies’ Initial and Revised 

Savings Targets to Their Reported Savings 11

Table 4: Length of Time Operations and Maintenance Savings Were 

Reported and Amount Reported 16

Figure

Figure 1: Total Cost Savings as Reported by Selected Agencies, by 

Category, Fiscal Years 2010 to 2012 9

Contents
Page ii GAO-14-12 Real Property Cost Savings

Abbreviations

CPRA Civilian Property Realignment Act 

DHS Department of Homeland Security

DOD Department of Defense

DOE Department of Energy

DOJ Department of Justice

FRPC Federal Real Property Council

GSA General Services Administration

OMB Office of Management and Budget

USDA Department of Agriculture

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Page 1 GAO-14-12 Real Property Cost Savings

441 G St. N.W.

Washington, DC 20548

October 29, 2013

The Honorable Thomas R. Carper

Chairman

The Honorable Tom Coburn

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The federal government’s real estate portfolio is vast and diverse and 

includes almost 400,000 buildings located throughout the country that are 

owned or leased by the federal government. We have noted longstanding problems with how this property is managed, designating federal 

real property management as a high-risk area.1 Disposing of excess and 

underutilized properties could potentially result in government-wide cost 

savings by generating sales proceeds, reducing operating and 

maintenance costs, and avoiding rent costs by ending leases. In recent 

years, the federal government has undertaken initiatives to achieve cost 

savings associated with better management of excess and underutilized 

properties, and better use of remaining real property assets. In particular, 

in June 2010, the President issued a memorandum directing federal 

agencies to achieve $3 billion in real property cost savings by the end of 

fiscal year 2012 through a number of methods, including disposal of 

excess property, energy efficiency improvements, and other space 

consolidation efforts.2

We have previously identified problems with agencies’ preliminary costsavings estimates related to the June 2010 memorandum. Specifically, 

we found in 2012 that the actual savings associated with selling excess 

property and better managing underutilized property may be overstated 

The memorandum further directed the 

Administrator of the General Services Administration (GSA), in 

consultation with the Director of the Office of Management and Budget 

(OMB), to coordinate agency efforts to satisfy the requirements of the 

memorandum.

 1

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

2

Presidential Memorandum, Disposing of Unneeded Federal Real Estate – Increasing 

Sales Proceeds, Cutting Operating Costs, and Improving Energy Efficiency, 75 Fed. Reg. 

33987 (June 16, 2010).
Page 2 GAO-14-12 Real Property Cost Savings

and were not fully transparent.3

To address these objectives, we reviewed the June 2010 memorandum 

and subsequent OMB guidance to understand the types of savings that 

agencies could report in response to the memorandum and how those 

savings were to be reported. We also reviewed our previous work on 

excess and underutilized property to understand issues previously 

identified with agencies’ reported cost savings. To describe the cost 

savings agencies reported in response to the June 2010 memorandum 

and how those savings were identified by selected agencies, we reviewed 

and analyzed cost savings information reported on the administration’s 

Performance.gov website.

As the time period for achieving cost 

savings as specified in the memorandum has now passed, we were 

asked to review the resulting cost savings that agencies reported. Our 

objectives were to: 1) describe the cost savings agencies reported in 

response to the June 2010 presidential memorandum and how those 

savings were identified by selected agencies and 2) determine the extent 

that selected agencies’ reporting of savings was reliable and transparent, 

and how, if at all, the reporting of real property cost savings could be 

improved.

4 We also examined more specifically the cost 

savings reported by six agencies—GSA and the Departments of 

Agriculture (USDA), Energy (DOE), Homeland Security (DHS), Justice 

(DOJ), and State (State). We selected the six agencies because they had 

the largest cost savings targets for civilian agencies, collectively 

accounting for about 75 percent of the $3 billion cost savings goal; 

reported a variety of cost savings measures to achieve their savings 

target; and had a range of property types in their real property portfolios.5

 3

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). This report only focused on actions agencies reported to comply with the June 

2010 memorandum that affected excess and underutilized federal real property. The 

report did not consider other cost savings areas, such as sustainability efforts, that 

agencies could use to report cost savings.

4

Performance.gov is a website established by the administration to provide information on 

government-wide initiatives to cut waste, streamline government, and improve 

performance through various areas of focus. Managing property effectively falls under the 

financial management focus area.

5

The Department of Defense (DOD) had the largest cost savings target for a single 

agency over the 2010 to 2012 time period. However, we focused on the cost savings 

reported by civilian agencies, and therefore excluded DOD from our review. Furthermore, 

the U.S. Postal Service was not subject to the requirements of the June 2010 

memorandum. 
Page 3 GAO-14-12 Real Property Cost Savings

We examined documentation from and interviewed officials with these 

agencies to determine the types of savings that were reported to meet the 

agencies’ individual cost-savings targets as well as any challenges they 

faced in meeting the requirements of the memorandum. We did not 

systematically evaluate or verify the measures that agencies reported 

undertaking in order to achieve savings as that was outside the scope of 

our review. To determine the extent that selected agencies’ reporting of 

savings was reliable and transparent, and how reporting of cost savings 

could be improved, we reviewed the agencies’ reported cost savings 

against key factors identified in our data-reliability and cost-estimating 

guidance.6

We conducted this performance audit from December 2012 to October 

2013 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 the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. Further details on our 

scope and methodology can be found in appendix I.

In particular, we analyzed and compared the selected 

agencies’ reported cost savings across the different savings categories to 

determine whether the savings were consistently reported, met the 

requirements set forth by the June 2010 memorandum, and were welldocumented. We also interviewed OMB staff about the types of savings 

that could be reported and steps they took to review the reported savings.

We have identified numerous challenges related to the government’s 

management of its real property, including issues pertaining to using and 

disposing of underutilized and excess property, an overreliance on 

leasing, and having unreliable real property data to support decision 

making.7

 6

GAO, Assessing the Reliability of Computer-Processed Data, 

The government has made progress reforming real property 

management after we designated it high risk in 2003. However, it has not 

yet fully addressed the underlying challenges that hamper reform, such 

GAO-09-680G

(Washington, D.C.: July 2009); Cost Estimating and Assessment Guide: Best Practices for 

Developing and Managing Capital Program Costs, GAO-09-3SP, (Washington, D.C.: 

March 2009).

7

GAO-13-283.

Background
Page 4 GAO-14-12 Real Property Cost Savings

as those related to environmental cleanup and historic preservation, a 

lack of accurate and useful data to support decision making, and 

competing stakeholder interests that make it difficult to dispose of real 

property. In the meantime, the federal government continues to retain 

more real property than it needs. To address the excess and underutilized 

property the government holds, previous and current administrations have 

implemented a number of cost savings initiatives associated with better 

managing real property. For example, in May 2011, the administration 

proposed legislation—the Civilian Property Realignment Act (CPRA)—

which, among other things, would have established a legislative 

framework for consolidating and disposing of civilian real property as a 

means of generating savings to the federal government. Although CPRA 

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 Most recently, OMB issued guidance for 

implementing the administration’s Freeze the Footprint policy, which

requires agencies to document their efforts to restrict any growth in the 

size of their domestic office and warehouse inventories.9

The June 2010 presidential memorandum required federal agencies to 

achieve $3 billion in cost savings by the end of fiscal year 2012 from 

increased proceeds from the sale of assets; reduced operations, 

maintenance, and energy expenses from asset disposals; or other efforts 

to consolidate space or increase occupancy rates in existing facilities, 

such as ending leases or implementing telework arrangements.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.

Agency 

actions taken under the memorandum were to align with and support 

previous administration initiatives to measure and reduce greenhouse gas 

9

OMB, Implementation of OMB Memorandum M-12-12 Section 3: Freeze the Footprint, 

Management Procedures Memorandum No. 2013-02 (Washington, D.C.: Mar. 14, 2013). 

10This requirement was in addition to the $5 billion in operations and maintenance savings 

expected from DOD’s Base Realignment and Closure disposal and other consolidation 

efforts. 
Page 5 GAO-14-12 Real Property Cost Savings

emissions in federal facilities and consolidate data centers.11 The 

memorandum also required the Director of OMB, in consultation with the 

Administrator of GSA and the Federal Real Property Council (FRPC)—an 

interagency group responsible for coordinating real property 

management—to develop guidance for actions agencies should take to 

carry out the requirements of the memorandum.12

In July 2010, OMB issued guidance that identified specific steps agencies 

could take to meet the requirements of the June 2010 memorandum.13

After agencies developed their initial cost savings plans, OMB established 

four cost-savings categories in 2011 that agencies were to use for 

reporting savings: disposal, space management, sustainability, and 

For example, the guidance required agencies to develop a Real Property

Cost Savings and Innovation Plan that was to identify the real property 

cost-savings initiatives under way and planned by the agency, the 

agency’s proposed share of the $3-billion savings target, and actions to 

achieve the proposed target. The guidance specified that the $3 billion in 

real property cost savings by the end of fiscal year 2012 would be 

measured through 1) capturing eliminated operating costs; 2) increasing 

the income generated through disposals; and 3) better utilizing existing 

real property by undertaking space realignment efforts, including 

optimizing or consolidating existing space within owned buildings. The 

agency cost savings were to reflect net savings, factoring in the costs 

incurred by the agency to achieve the intended result.

 11Specifically, the actions taken by agencies were to align with Exec. Order No. 13514, 

Federal Leadership in Environmental, Energy, and Economic Performance, 74 Fed. Reg. 

52117 (Oct. 8, 2009) to measure and reduce resource use and greenhouse gas emissions 

in federal facilities and the Federal Data Center Consolidation Initiative announced by 

OMB in February 2010 to improve the efficiency, performance, and environmental 

footprint of federal data center activities. 

12In 2004, the administration added managing federal real property to the President’s 

Management Agenda and the President issued an executive order establishing FRPC.

FRPC is chaired by the Deputy Director for Management at OMB and is composed of all 

agency Senior Real Property Officers, the Controller of OMB, the Administrator of GSA, 

and any other full-time or permanent part-time federal officials or employees as deemed 

necessary by the Council Chairman. Exec. Order No. 13327, Federal Real Property Asset 

Management, 69 Fed. Reg. 5897 (Feb. 6, 2004). 

13OMB, Development of a Real Property Cost Savings and Innovation Plan, Management 

Procedures Memorandum No. 2010-07 (Washington, D.C.: July 1, 2010). The guidance 

issued by OMB was specific to implementing the June 2010 memorandum for achieving 

$3 billion in real property cost savings, an initiative which is now complete.
Page 6 GAO-14-12 Real Property Cost Savings

innovation (see table 1). OMB used the administration’s Performance.gov 

website to track agencies’ reported savings; the website also listed 

individual agency’s cost savings targets as a share of the $3-billion costsavings goal and the cost-savings measures agencies planned to 

implement to achieve their targets. As stated previously, we have 

identified problems with the estimates from selected agencies to meet 

their savings targets.14

Table 1: Office of Management and Budget Real Property Cost Savings Categories 

Cost savings category Definition

Disposal This category represents the benefit associated with the disposal of property, such as 

the proceeds of the sale and the captured savings from eliminated operating costs.

Space management This category includes cost savings associated with “direct” space management 

decisions such as lowering operating costs by renegotiating or eliminating leases; 

consolidating offices; reducing square footage through techniques such as decreasing 

office and work station sizes; or moving from leased to Federally-owned space.

Sustainability This category predominantly captures savings from more efficient use of energy and 

utilities.

Innovation This category captures real property savings resulting from other management 

improvements. An example would be teleworking which would allow for shared use of 

workstations. 

Source: GAO presentation of Performance.gov information.

 14See GAO-12-645. In this report, we assessed cost savings estimates related to excess 

and underutilized property at DOE, GSA, USDA, the Department of the Interior, and the 

Department of Veterans Affairs.
Page 7 GAO-14-12 Real Property Cost Savings

Overall, agencies reported $3.8 billion in cost savings from fiscal year 

2010 to fiscal year 2012 across the OMB categories of disposal, space 

management, sustainability, and innovation. The largest cost savings 

were from space management activities, which accounted for more than 

half of the total savings reported. Civilian agencies reported $3.1 billion in 

cost savings over the fiscal year 2010-to-2012 time period, and DOD 

accounted for the remainder of the savings reported.15

Similar to the savings reported by all agencies, the six agencies we 

reviewed also reported the majority of savings from space management 

activities. Specifically, space management activities accounted for 70 

percent of the savings reported by the six agencies, followed by disposal 

(17 percent), innovation (9 percent) and, sustainability (4 percent). Table 

2 summarizes the cost savings reported by category for all agencies and 

the six selected agencies.

The six selected 

agencies we reviewed (GSA, DHS, DOE, DOJ, State, and USDA) 

accounted for $2.3 billion, or 74 percent, of the total savings reported by 

civilian agencies.

 15DOD reported $731 million in cost savings, the largest amount reported by a single 

agency.

Agencies Reported 

$3.8 Billion in Cost 

Savings from Under 

Way or Planned 

Activities

Agencies Reported $3.8 

Billion in Cost Savings, 

Primarily from Space 

Management Activities 

and Disposals
Page 8 GAO-14-12 Real Property Cost Savings

Table 2: Cost Savings as Reported by All Agencies and Selected Agencies, by Category, Fiscal Years 2010 to 2012

Dollars in billions

Reported cost savings for all agencies Reported cost savings for selected agenciesa

Cost savings category Dollars Percentage Dollars Percentage

Space management $2.0 53 $1.6 70

Disposal 1.0 26 0.4 17

Sustainability 0.5 13 0.1 4

Innovation 0.3 8 0.2 9

Total $3.8 100 $2.3 100

Source: GAO presentation of Performance.gov data.

a

The six selected agencies were DHS, DOE, DOJ, GSA, State, and USDA.

The overall savings reported by the agencies we reviewed ranged from 

$238 million reported by DHS to $580 million reported by DOE. All six 

agencies reported savings from space management activities, five 

agencies reported disposal and sustainability savings, and two agencies 

reported innovation savings (see fig. 1).
Page 9 GAO-14-12 Real Property Cost Savings

Figure 1: Total Cost Savings as Reported by Selected Agencies, by Category, Fiscal 

Years 2010 to 2012

Notes: According to State officials, Performance.gov has not been updated to reflect adjustments the 

agency made to savings reported under innovation that would result in a total of $153 million in 

innovation savings and a total cost savings of $510 million.

Totals may not sum due to rounding.

All of the agencies in our review determined their reported savings by 

identifying activities that were under way or planned at the time the June 

2010 memorandum was issued.16

 16In addition, agencies may also have reported cost savings from activities that were 

developed or identified after the June 2010 memorandum was issued.

In particular, the requirements of the 

memorandum and subsequent guidance issued by OMB specified that 

agencies were to report savings from ongoing and planned activities. For 

example, the June 2010 memorandum specified that agency actions 

should align with and include activities undertaken in response to two 

previous initiatives meant to improve the performance of federal facilities.

Selected Agencies 

Reported Savings from 

Implementing Cost Savings 

and Avoidance Activities 

Already in Their Pipelines
Page 10 GAO-14-12 Real Property Cost Savings

As such, USDA officials told us that they reported sustainability savings 

identified in the agency’s Strategic Sustainability Performance Plan 

required by a previous executive order.17 State officials told us they 

reported savings from data center consolidations carried out under a 

previous presidential initiative.18

Cost savings targets: Individual cost savings targets played a role in how 

the agencies in our review determined their reported savings. Agency 

officials told us that they developed initial targets, as required by the July 

2010 OMB guidance, by estimating the savings that could be derived 

from activities planned or underway at the time the memorandum was 

issued. However, according to agency officials, OMB subsequently 

increased the targets in 2011. OMB staff told us that the revised targets 

were meant to be realistic and also to encourage agencies to think 

beyond the traditional savings associated with real property. To assist 

agencies in identifying additional savings areas, OMB developed a best 

practices document that highlighted various types of savings that could be 

reported consistent with the requirements of the June 2010 

memorandum. Most of the agency officials in our review told us that they 

did not have difficulty in meeting their revised targets after having 

discussions with OMB about the variety of savings that could be included.

In addition, the subsequent guidance 

issued by OMB in July 2010 also stated that agencies were expected to 

focus on real property cost savings initiatives under way and planned in 

developing their Real Property Cost Savings and Innovations Plans. As a 

result, for example, DOE officials stated that they did not identify any new 

cost savings to meet their cost-savings target and DOJ officials told us 

they obtained information from their bureaus about projects already 

planned or ongoing to identify the “low-hanging fruit” for potential cost 

savings. Based on our discussions with agency officials in our review, we 

identified two additional factors that led agencies to report savings from 

ongoing and planned activities: the individual cost-savings targets 

established for each agency, and the timeframes set forth by the 

memorandum.

However, two agencies in our review, GSA and DHS, reported savings 

that fell short of their savings targets. According to GSA officials, the 

agency was conservative in reporting its overall savings achieved and 

 17Exec. Order No. 13514, 74 Fed. Reg. 52117 (Oct. 8, 2009).

18Federal Data Center Consolidation Initiative (February 2010).
Page 11 GAO-14-12 Real Property Cost Savings

only reported savings that could be supported by documentation that, 

according to GSA, were in the spirit of the memorandum. DHS officials 

told us that its revised savings target was not realistic in terms of the 

savings the agency could achieve in the 2-year timeframe established by 

the memorandum. Officials from USDA told us that once they had 

exceeded their cost savings target, they did not consider other areas for 

reporting potential savings that might have been achieved. Table 3 

highlights the initial savings targets that the agencies proposed in their 

cost savings plans, compared to the savings targets that were established 

on Performance.gov and the savings that were ultimately reported.

Table 3: Comparison of Selected Agencies’ Initial and Revised Savings Targets to Their Reported Savings

Dollars in millions

Agency Initial cost savings target Revised cost savings target Reported savings 

DHS $240 $260 $238

DOE 247 375 580

DOJ 60 335 339

GSA 172 450 350

State 291 325 511a

USDA 71 300 314

Source: GAO analysis of selected agencies’ cost savings plans and presentation of Performance.gov data.

a

According to State officials, Performance.gov has not been updated to reflect adjustments the 

agency made to savings reported under innovation that would result in a total cost savings of $510 

million rather than $511 million.

Time frames: Officials from some of the agencies in our review also told 

us that the time frames set forth by the memorandum drove them to 

report savings from activities that were already planned or under way. For 

example, DHS officials told us that the disposal savings they reported 

were from disposals that occurred during the 3-year time period specified 

in the memorandum, but were planned before the June 2010 

memorandum was issued. DHS officials told us that, on average, 

disposals take 3 to 5 years to accomplish. Similarly, GSA officials told us 

that they use a tier system to evaluate the condition of their assets and 

place into the disposal category those assets that the agency plans to 

dispose of in the next 5 years. Thus, some of the disposal savings GSA 

reported were from assets it had already planned to dispose of at the time 

the June 2010 memorandum was issued and that were subsequently 

disposed of by the end of fiscal year 2012.
Page 12 GAO-14-12 Real Property Cost Savings

In addition, given that it takes several years for savings from real property 

initiatives to be realized, agency officials told us that the timeframes 

established by the memorandum made it more likely for savings to be 

reported in certain categories over others. For example, GSA officials told 

us that when the memorandum was first issued there was an expectation

that the largest cost savings would be reported from disposals, but this 

did not transpire in part because of the time it takes to dispose of 

properties. Agency officials also told us, and we have found in prior work, 

that the costs associated with disposals are often significant, making it 

difficult to realize disposal savings in a short time period.19 Similarly, we 

found that agencies did not report a large amount of innovation savings 

over the time period covered by the memorandum compared to other 

categories. Agency officials in our review told us that savings from 

innovation activities, particularly those resulting from telework initiatives, 

will increase in the future as telework is implemented more widely. For 

example, DHS officials told us that while they only reported $2 million in 

innovation savings stemming from their headquarters’ flexible workspace 

initiative over the 2010-to-2012 time period, the agency expects to 

achieve greater departmentwide savings starting in 2013 as the initiative 

is more widely implemented. Finally, agency officials in our review told us 

that reporting savings from cost avoidance measures—those savings that 

resulted because a planned action did not take place—was necessary to 

meet their targets in the timeframe required by the memorandum.20

 19In particular, it is difficult to realize savings in a short time period when the costs of 

implementing measures are not amortized for accounting purposes. Savings could be 

reported in the short term if the costs associated with a particular real estate action are 

amortized for accounting purposes over the life of the action’s cost-savings effects, rather 

than accounted for as a one-time, upfront cost. For budgetary purposes, agencies are 

required to obligate the costs associated with disposal at the time they are incurred.

For 

example, agencies reported space management savings as a result of 

not pursuing an approved lease prospectus for additional space or from 

reduced budgets for planned real estate activities, in addition to savings 

that were the result of consolidating space or terminating leases. The 

following examples illustrate some of the largest cost avoidance and 

savings measures reported by our selected agencies:

20OMB Circular No. A-131 defines “cost avoidance” as an action taken in the immediate 

time frame that will decrease costs in the future compared to cost savings, which are a 

reduction in actual expenditures below the projected level of costs to achieve a specific 

objective. OMB credited agencies for management actions that resulted in reported cost 

savings and avoided costs in response to the memorandum. 
Page 13 GAO-14-12 Real Property Cost Savings

• DOE reported $412 million in space management savings based on 

funds related to real property expenditures it would have requested in 

its fiscal year 2011 and 2012 budgets for the Yucca Mountain Nuclear 

Waste Repository project (Yucca Mountain). DOE had terminated its 

licensing efforts and shut down the project in 2010.21 In addition, DOE 

officials told us that after their initial savings target was increased, 

they included deferred maintenance eliminated by disposals in their 

reported cost savings.22

• DHS reported $126 million in space management savings from not 

pursuing a lease prospectus for 1.8-million square feet in new building 

space to accommodate employees the agency anticipated hiring.

• State reported $80 million in innovation savings over the fiscal year 

2010-to-2012 time period from property exchanges, in which the 

agency swaps one of its properties to acquire another property.23

 21Although DOE reported savings related to the Yucca Mountain project in response to the 

memorandum, we reported in April 2011 that developing a new repository would likely 

restart the time-consuming and costly process of siting, licensing, and developing a 

repository. DOE had spent nearly $15 billon on the Yucca Mountain project. In addition, 

delays in taking custody of commercial spent nuclear fuel have resulted in an estimated 

cost to taxpayers of $2.6 billion and estimated future liabilities of about $19.7 billion 

through 2020, stemming from industry lawsuits. DOE has estimated that future liabilities 

may cost about $500 million each year after 2020. For more information, see, for example, 

GAO, Commercial Spent Nuclear Fuel: Observations on the Key Attributes and 

Challenges of Storage and Disposal Options, 

State also reported $58.2 million in space management savings 

because the agency was appropriated less than what it requested in 

its 2010 and 2011 budgets for a particular account used for security, 

rehabilitation, and repairs at its facilities. State included savings from 

the property exchanges and funding received that was lower than its 

budget request after their initial savings target was increased.

GAO-13-532T (Washington, D.C.: Apr. 11, 

2013); Commercial Nuclear Waste: Effects of a Termination of the Yucca Mountain 

Repository Program and Lessons Learned, GAO-11-229 (Washington, D.C.: Apr. 8, 

2011).

22DOE defines deferred maintenance as maintenance that was not performed when it 

should have been or was scheduled to be and which, therefore, is put off or delayed for a 

future period. We reported in GAO-12-645 that counting the repair needs of disposed 

assets assumes that the disposed assets would have been fully repaired in the years 

covered by the memorandum, when in reality agencies have limited budgets to repair and 

maintain their assets and must carefully choose which assets to repair in a given year.

Agencies often choose not to repair assets that are going to be disposed of because they 

need to use their limited funds to repair the assets that they regularly use.

23In particular, State reported $88 million in savings resulting from an exchange in Seoul, 

South Korea that was partially offset by an $8 million loss from an exchange in Beirut, 

Lebanon, over the fiscal year 2010-to-2012 time period. 
Page 14 GAO-14-12 Real Property Cost Savings

• USDA reported $229 million in space management cost savings from 

funds that Congress rescinded from the agency’s appropriations for 

55 construction projects for Agricultural Research Service buildings 

and facilities. For example, $17 million in previously appropriated 

funds were rescinded for a research laboratory in Pullman, 

Washington, and about $16 million was rescinded for a national plant 

and genetics security center in Columbia, Missouri.24 USDA officials 

told us these project rescissions were included in the agency’s 

reported savings after its initial savings target was increased by OMB.

The guidance OMB provided to agencies for implementing the 

requirements of the June 2010 memorandum was unclear and lacked 

reporting standards. The unclear guidance led the agencies in our review 

to interpret the guidance differently and report savings inconsistently. 

Specifically, the guidance did not establish common ground rules, such 

as a clear definition of the term “cost savings,” that according to our cost 

estimating and assessment guide, help ensure that data are consistently 

collected and reported.25

• GSA officials told us that the OMB guidance was not specific about 

whether cost avoidance measures could be included in the reported 

savings. These officials stated that this was a challenge in 

In particular, agency officials in our review told 

us that there was some uncertainty about the types of savings that could 

be reported, particularly whether cost avoidance measures could be 

reported, for example:

 24The $229 million in unobligated funding was rescinded through the Fiscal Year 2011 

budget and had been appropriated in prior years for specific projects. 

25GAO-09-3SP.

Agencies Lacked 

Clear Standards for 

Reporting Reliable 

and Transparent Cost 

Savings

Guidance Was Unclear on 

the Types of Savings that 

Could be Reported, and 

Agencies Reported Savings 

Differently
Page 15 GAO-14-12 Real Property Cost Savings

determining the cost savings that could be reported in response to the 

June 2010 memorandum.

• State officials also told us they were initially unsure whether they 

could report the cost avoidance associated with the previously 

mentioned reduction in their budget as savings, as well as savings 

from value-engineering improvements.26

• DOJ officials told us there was uncertainty about whether or not cost 

avoidance savings could be included and whether to include only 

those savings that were actual budgetary savings, or if savings that 

were reprogrammed for other purposes could also be included.

Although some agency officials in our review told us that the guidance 

was not clear on what could be considered a savings, all of the agencies 

in our review reported savings from cost avoidance measures, as 

previously discussed.

In addition, the guidance and categories established by OMB on 

Performance.gov were broad. Agency officials in our review told us that 

they worked with OMB staff to understand the types of savings that could 

be reported under these categories. However, the categories lacked 

specific detail and standards for how the savings should be determined 

and reported to help ensure reliability. For example, for the disposal 

category, agencies were to report operations and maintenance costs 

avoided during the fiscal year 2010-to-2012 time period. However, it did 

not specify for how long agencies were supposed to capture these costs.

As a result, the five agencies in our review that reported disposal savings 

made their own assumptions about the length of time in which to report 

savings from eliminated operations and maintenance costs. For disposals 

in the year 2010, for example, some agencies reported 1 year of 

operations and maintenance savings in the year in which the disposal 

occurred, whereas other agencies reported up to 3 years of operations 

and maintenance savings for disposals occurring in 2010 (see table 4).

USDA officials told us that they believed it would not be fair to count more 

than 1 year of operations and maintenance savings for each of their 

disposal properties, whereas DOE officials told us that they reported up to 

3 years of annualized operations and maintenance savings if a property 

 26“Value engineering” refers to an organized effort directed at analyzing the functions of 

systems, equipment, facilities, services, and supplies for the purpose of achieving the 

essential functions at the lowest life-cycle cost consistent with required performance, 

reliability, quality, and safety. 
Page 16 GAO-14-12 Real Property Cost Savings

was disposed of in fiscal year 2010 because, as discussed previously, 

OMB’s overall guidance encouraged agencies to look for savings from 

fiscal year 2010 through 2012. Similarly, OMB guidance did not specify 

whether agencies could report cost savings from deferred maintenance.

We found that two of the five agencies—DOE and GSA—reported the 

eliminated deferred maintenance or repair and alteration costs associated 

with their disposals while three agencies did not.27

Table 4: Length of Time Operations and Maintenance Savings Were Reported and Amount Reported

Agency

Reported 1 year of 

savings in the year 

the property was disposed

Reported savings for 3 years if a 

property was disposed of in fiscal 

year 2010, 2 years if disposed in 

fiscal year 2011,and 1 year if 

disposed in fiscal year 2012

Amount of Operations 

and Maintenance 

Savings Reported 

(dollars in millions)

DHS X $9a

DOE X $91

GSA X $15

State Xb $5

USDA X $23

Source: GAO analysis of DHS, DOE, GSA, State, and USDA data.

Note: DOJ did not report any disposal savings.

a

In addition, DHS reported about $6 million in annual rent savings from disposals in fiscal years 2011 

and 2012.

b

According to State officials, the agency also prorated its savings based on when in the year the 

disposal occurred.

We also found instances where agencies reported similar types of 

savings in different categories. For example, savings associated with 

eliminating leases were included in the space management category on 

 27As previously discussed, DOE included eliminated deferred maintenance in its reported 

savings after its initial savings target was increased and following discussions with OMB 

that deferred maintenance savings could be reported to meet its revised target. GSA did 

not include deferred maintenance in its reported savings, which it considers separately 

from repair and alterations. When GSA disposes of an asset, the projected repair needs 

are avoided. GSA counted the entire repair value as cost avoidance, but reported these as 

space management savings, not disposal savings. USDA also reported about $14 million 

in deferred maintenance savings associated with disposals of eight Agricultural Research 

Service laboratories and an Animal and Plant Health Inspection Service facility, but did not 

report deferred maintenance savings from other disposals that occurred during the fiscal 

year 2010- to-2012 time period.
Page 17 GAO-14-12 Real Property Cost Savings

Performance.gov and we found that State reported them as such; 

however, we found that DHS reported savings from eliminating leases as 

disposal savings. Similarly, GSA reported savings from property 

exchanges under space management, while State reported this type of 

savings under innovation. The OMB guidance did not specify how these 

types of savings were to be reported.

Our guide for assessing the reliability of data identifies consistency as a 

key component of reliability.28 In particular, consistency is important for 

ensuring that data are clear and well defined enough to yield similar 

results in similar analyses. However, as the previous examples illustrate, 

the lack of detailed standards and use of broad cost-savings categories 

led agencies in our review to interpret the guidance differently and report 

cost-savings information inconsistently. OMB staff told us that the costsavings categories established on Performance.gov were intentionally 

broad to encourage innovation in the types of savings that could be 

achieved through better management of real property. However, the 

inconsistencies we identified make it difficult for the reported savings to 

have collective meaning that is reliable for decision-makers.

In addition to interpreting the OMB guidance for implementing the June 

2010 memorandum differently, we also found several instances in which 

agencies’ reported savings did not meet the requirements of the 

memorandum and guidance. For example, OMB’s guidance specifically 

stated that agencies should report the net savings, which factor in costs 

to achieve savings, in their overall savings total. Despite this, we found 

instances in which some agencies did not deduct costs in their reported 

savings, for example:

• State and DHS did not deduct costs associated with disposals in their 

reported savings.29

 28

State officials told us that the costs associated 

with the approximately $114 million in disposal savings reported over 

the 2010-to-2012 time period were about $4 million. DHS officials told 

us that costs were not deducted in the demolition of DHS-owned 

GAO-09-680G.

29Disposal costs can vary depending on the property type, but could include potential 

environmental remediation costs or real estate fees associated with the sale of the 

property.

Agencies Did Not Always 

Follow the Guidance
Page 18 GAO-14-12 Real Property Cost Savings

assets. DHS reported $565,000 in annual operating-cost savings from 

54 demolitions in fiscal year 2011 and almost $2 million in annual 

operating-cost and rent savings from 245 demolitions in fiscal year 

2012.30

• DOE deducted the costs associated with some of its reported disposal 

savings, but did not do so if the disposals were carried out by its 

Office of Environmental Management. DOE officials told us that after 

discussions with OMB staff, they decided not to deduct the costs 

associated with disposals carried out by this program office because 

of its mission to deactivate and decommission contaminated facilities.

DOE estimated in its initial cost savings plan that including these 

implementation costs would have resulted in a net loss of almost $900 

million for the agency’s disposals over the fiscal year 2010-to-2012 

time period.

DHS officials did not know the costs associated with these 

demolitions.

• DHS reported $2 million in innovation savings from reducing space 

due to a pilot flexible workspace initiative but, according to DHS 

officials, inadvertently did not deduct the one-time costs associated 

with reconfiguring the space in its overall reported savings. According 

to DHS officials, the one-time costs to reconfigure the space would 

have equaled 75 percent of the 1-year savings the agency has 

realized.

We also found instances where agencies reported cost savings outside of 

the fiscal year 2010-to-2012 time period required by the June 2010 

memorandum, for example:

• GSA reported $50 million in space management savings from 

purchasing a building in 2012 that the agency previously leased. GSA 

reported these savings based on the purchase price, which was $50 

million less than the most recent appraisal of the building. Although 

GSA expects to realize savings over time from purchasing this 

building instead of leasing it, it is unclear that the difference between 

the purchase price and the appraised value would represent savings, 

if for example, no buyers are willing to pay the appraised value.

Furthermore, while we have found that ownership is often more cost 

effective than leasing in the long term, GSA would have realized only 

a small fraction of the savings related to ownership that would have 

 30Specifically, the demolition savings reported by DHS for fiscal year 2012 include $1.5 

million in annual operating-cost savings and about $500,000 in annual rent savings. 
Page 19 GAO-14-12 Real Property Cost Savings

accrued during the timeframe established by the June 2010 

memorandum.31

• USDA reported rent savings from office closures, some of which did 

not occur until fiscal year 2013. According to USDA officials, some of 

the office closures that had been planned for fiscal year 2012 were 

delayed and did not occur until fiscal year 2013. These 21 office 

closures accounted for about $4 million of the savings reported by the 

agency.

Similarly, GSA reported $10 million in space 

management savings from a property exchange with the City of San 

Antonio, in which the agency exchanged a courthouse and training 

facility for a parcel of land to construct a new courthouse. However, 

GSA retained ownership of the city’s site in 2013 and the city will 

retain ownership of the GSA property after the construction of the new 

courthouse is completed, which has yet to be determined. GSA 

officials told us that they reported these savings in response to the 

June 2010 memorandum because the agreement to enter into the 

exchange occurred in 2012.

• DOJ reported more than $2 million in savings from consolidating six 

community corrections offices and the National Institute of Corrections 

Academy, which, according to Bureau of Prisons officials, took place 

in 2007 and 2008. Officials from the Bureau of Prisons stated that the 

reported savings were based on the estimated rent or lease amounts 

the agency would have incurred in the time period covered by the 

memorandum through renewed agreements, had the consolidations 

not occurred.

Finally, we found instances where some agencies in our review reported 

savings from non-real estate activities in their totals. For example, DHS 

included $30,000 in reduced transit benefits in the $2 million in innovation 

savings it reported from increased telework due to its flexible workspace 

initiative, and GSA reported $11.6 million in sustainability savings from a 

reduction in its fiscal year 2012 budget for travel costs and building 

studies. GSA officials told us that building studies involve on-site 

inspections, and therefore require travel, and that GSA considers 

decreases in travel and building studies both economically and 

environmentally sustainable. However, it is unclear how these savings 

relate to reducing energy use for the agency’s assets. OMB staff told us 

that the savings reported by the agencies should have been tied to real 

 31GAO, Federal Real Property: Strategy Needed to Address Agencies Long Standing 

Reliance on Leasing, GAO-08-197 (Washington, D.C.: Jan. 24, 2008).
Page 20 GAO-14-12 Real Property Cost Savings

property, and that if an activity was the result of a real estate action, then 

the savings was justifiable. The guidance issued by OMB was specific to 

implementing the June 2010 memorandum for achieving $3 billion in real 

property cost savings, an initiative which was completed as of September 

30, 2012.

We also found that the documentation of agencies’ reported savings was 

limited because OMB did not establish specific standards that required 

agencies to provide detailed information in support of their reported cost 

savings or identify how OMB planned to review the savings agencies 

reported. According to our cost-estimating and assessment guide, 

validating cost estimates, including savings estimates, is a best practice 

for ensuring that estimates are well-documented, comprehensive, 

accurate, and credible.32

 32

However, OMB staff told us that they did not 

have the resources to review a detailed accounting of agencies’ reported 

savings and, instead, required agencies to provide quarterly summaries 

highlighting the savings the agencies planned to report along with any 

success stories of unique savings examples. In addition, OMB staff told 

us they were in constant communication with the agencies about their 

reported savings, as well as with other OMB staff knowledgeable about 

the agencies’ budgets and programs, to ensure that the reported savings 

met the requirements of the memorandum. In reviewing the information 

provided by the agencies, OMB staff told us they had identified instances 

where agencies reported savings that did not meet the requirements of 

the June 2010 memorandum—for example one agency reported savings 

that occurred outside the timeframes established in the memorandum—

and adjusted the agency’s overall savings on Performance.gov 

accordingly. However, OMB staff also told us that it may be more efficient 

to obtain detailed documentation of an agency’s reporting upfront, to limit 

the amount of follow-up required. In addition, OMB did not include 

detailed information about the types of savings agencies reported in 

response to the memorandum on Performance.gov. For example, 

Performance.gov summarizes the total cost savings reported by each 

agency in each of the cost savings categories, and includes general 

information about the types of activities agencies reported as savings, but 

does not include specific information about the types of savings that were 

included in the totals. As a result, the overall transparency of information 

GAO-09-3SP. 

Savings Were Not WellDocumented or Reviewed
Page 21 GAO-14-12 Real Property Cost Savings

on Performance.gov is limited for understanding the types of savings 

agencies reported across the categories.

Our cost estimating and assessment guide has shown that a key factor 

for ensuring the reliability and transparency of cost estimates, including 

savings estimates, is that they include an appropriate level of detailed 

documentation, including source data, so that they can be recreated, 

updated, or understood.33 As part of this review, we obtained more 

detailed documentation supporting the agencies’ reported savings, which 

allowed us to identify the issues illustrated in this report and understand 

the types of savings agencies reported to meet the requirements of the 

memorandum. Requiring more detailed documentation and establishing a 

more systematic process for reviewing and validating the reported cost 

savings could have allowed OMB to identify, in a timely manner, some of 

the reporting inconsistencies that resulted, while also ensuring that the 

savings met the requirements of the memorandum. Furthermore, 

including more detailed information on Performance.gov could have 

enhanced the transparency of actions agencies took to generate and 

report savings in response to the memorandum.

The June 2010 memorandum had positive effects in the view of agency 

officials. For example, some agency officials told us that the 

memorandum allowed them to accelerate projects in their pipeline or 

gave them a stronger basis to encourage savings opportunities within 

their agencies. Agency officials also told us that the memorandum 

provided them with a better understanding of cost savings opportunities 

within their agencies, particularly those agencies wherein real propertymanagement decisions are decentralized, stating that it allowed them to 

have a more comprehensive view of opportunities to collectively improve 

the agency’s real property footprint. Finally, some agency officials cited 

improved collaboration among agencies and with OMB on real property 

issues. OMB staff told us that the memorandum served as an important 

first step for informing future real property reform efforts and that this 

initiative laid the groundwork for thinking about real property more 

holistically as a management tool. In particular, OMB staff said that the 

memorandum encouraged agencies to think more creatively about ways 

in which real property can be reformed to generate savings, not just from 

 33GAO-09-3SP.

Real Property Reform 

Efforts will Continue to 

Emphasize Savings
Page 22 GAO-14-12 Real Property Cost Savings

a budgeting perspective, but through more innovative uses of real estate.

In discussions on our findings, OMB staff stated that while they initially did 

not want to be too prescriptive in how agencies responded to meeting the 

requirements of the memorandum, they recognized that more detailed 

guidance, as well as, more refined cost-savings categories and metrics 

are likely needed in future real property cost savings initiatives.

Furthermore, OMB plans to use the lessons learned from this initiative to 

emphasize program outcomes and increase the transparency of future 

real property reform efforts.

The current fiscal climate and emphasis on good management practices 

will continue to place pressure on federal agencies to find additional 

opportunities for cost savings. Better managing the government’s real 

property footprint through disposing of excess property and managing 

existing assets more efficiently will play a role in efforts to realize such 

savings. Although the cost savings initiative established by the June 2010 

memorandum is now complete, recent initiatives, like OMB’s Freeze the 

Footprint policy and proposed CPRA legislation place an emphasis on 

generating space and cost savings to the federal government. As 

agencies continue to identify ways to improve the management of their 

real property in response to these and other initiatives, such as increasing 

telework, it is critical to ensure that any savings reported as a result of 

such improvements are meaningful and transparent. However, as our 

review has demonstrated, clear and specific standards are needed to 

ensure that savings data are consistently reported and reviewed so that 

they are sufficiently reliable and transparent enough to document 

performance and support decision making. Without more detailed 

standards for identifying and reporting cost savings across federal 

agencies, decision-makers will be ill equipped not only to assess the 

results of real property reform efforts in the federal government, but also 

to take actions that will maximize these savings in the future.

To improve future real property cost-savings initiatives and promote 

reliability and transparency, we recommend that the Director of OMB, in 

collaboration with FRPC agencies, develop clear and specific standards 

for:

• identifying and reporting savings that help ensure common 

understanding of the various types of cost savings;

• consistently reporting across categories and agencies; and

• sufficiently documenting, validating, and reviewing results.

Conclusions

Recommendation for 

Executive Action
Page 23 GAO-14-12 Real Property Cost Savings

We provided a draft of this report to OMB, DHS, DOE, DOJ, GSA, State, 

and USDA for review and comment. OMB generally agreed with our 

recommendation. Specifically, OMB stated that the June 2010 

memorandum had positive effects on federal real-property management, 

and acknowledged that there are opportunities to improve future costsavings efforts, as identified in our report. OMB stated that our

recommendation was generally reasonable as it applies to prospective 

initiatives that directly address cost savings. DHS, DOE, and GSA 

provided technical comments that we incorporated as appropriate. DOJ, 

State, and USDA had no comments.

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to interested congressional 

committees, the Director of OMB; the Administrator of GSA; the Assistant 

Attorney General for Administration, Department of Justice; and the 

Secretaries of Homeland Security, Energy, State, and Agriculture; and 

other interested parties. 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 Office of 

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

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

listed in appendix II.

David J. Wise

Director

Physical Infrastructure Issues

Agency Comments
Appendix I: Objectives, Scope, and 

Methodology

Page 24 GAO-14-12 Real Property Cost Savings

Our review focused on the administration’s June 2010 memorandum that 

directed federal agencies to achieve $3 billion in real property cost 

savings by the end of fiscal year 2012.1 Our objectives were to (1) 

describe the cost savings agencies reported in response to the June 2010 

presidential memorandum and how those savings were identified by 

selected agencies and (2) determine the extent that selected agencies’

reporting of savings was reliable and transparent and how, if at all, the 

reporting of real property cost savings could be improved. To address 

these objectives, we reviewed the June 2010 memorandum and 

subsequent guidance issued by the Office of Management and Budget 

(OMB) to understand the requirements of the memorandum, including the 

types of savings that could be reported and how those savings were to be 

reported.2 We also reviewed our prior work on excess and underutilized 

property to understand issues previously identified with agencies’

reported cost savings.3

To describe the cost savings agencies reported in response to the June 

2010 memorandum and how those savings were identified by selected 

agencies, we reviewed and analyzed information on the administration’s 

Performance.gov website, including agencies’ individual cost savings 

targets, the total amount of savings reported by the agencies at the end of 

fiscal year 2012, and the amount of savings reported across the four 

categories—disposals, space management, sustainability, and 

innovation—established by OMB.4

 1

Presidential Memorandum, Disposing of Unneeded Federal Real Estate – Increasing 

Sales Proceeds, Cutting Operating Costs, and Improving Energy Efficiency, 75 Fed. Reg. 

33987 (June 16, 2010).

We also obtained and analyzed 

documentation on the cost savings reported by six civilian agencies: the 

2

OMB, Development of a Real Property Cost Savings and Innovation Plan, Management 

Procedures Memorandum No. 2010-07 (Washington D.C.: July 1, 2010).

3

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). This report only focused on the extent of agency actions that were taken in 

response to the June 2010 memorandum that affected excess and underutilized federal 

real property. The report did not consider other cost savings areas, such as sustainability 

efforts, that agencies could use to report savings.

4

Performance.gov is a website established by the administration to provide information on 

government-wide initiatives to cut waste, streamline government, and improve 

performance through various areas of focus. Managing property effectively falls under the 

financial management focus area.

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 25 GAO-14-12 Real Property Cost Savings

General Services Administration and the Departments of Agriculture, 

Energy, Homeland Security, Justice, and State.5

To determine the extent that selected agencies’ reporting of savings was 

reliable and transparent and to identify how, if at all, reporting of real 

property cost savings could be improved, we reviewed the agencies’

reported cost savings against key factors identified in our data-reliability 

and cost-estimating guidance.

In particular, we 

reviewed the agencies’ Real Property Cost Savings and Innovation Plans 

developed in response to the June 2010 memorandum and 

documentation supporting the cost savings reported by each of the 

agencies. We also conducted in-depth interviews with officials from these 

agencies to understand the processes they used to identify and report 

cost savings over the 2010 to 2012 time period. We conducted interviews 

with OMB staff about the types of savings agencies reported and 

obtained documentation on the savings our selected agencies reported to 

OMB. We compared the information on Performance.gov to the 

documentation provided to us by each of the agencies and to the 

documentation that the agencies submitted to OMB to identify and 

reconcile any discrepancies, but did not systematically evaluate or verify 

the methods agencies reported undertaking to achieve savings, as that 

was outside the scope of our review. Based on our review of agency 

documents and interviews with officials, we determined that the data were 

reliable for the purpose of describing cost savings as reported by the six 

agencies. We selected the six agencies because they had the largest 

cost savings targets for civilian agencies, collectively accounting for about 

75 percent of the $3 billion savings goal; reported a variety of cost 

savings measures to achieve their savings target; and had a range of 

property types in their real property portfolios.

6

 5

The Department of Defense (DOD) had the largest cost savings target for a single 

agency over the fiscal year 2010 to 2012 time period. However, we focused on cost 

savings reported by civilian agencies, and therefore excluded DOD from our review.

Furthermore, the U.S. Postal Service was not subject to the requirements of the June 

2010 memorandum.

In particular, we analyzed the savings 

reported by the six agencies in our review to determine whether similar 

types of savings were consistently reported, met the requirements set 

6

GAO, Assessing the Reliability of Computer-Processed Data, GAO-09-680G

(Washington, D.C.: July 2009); Cost Estimating and Assessment Guide: Best Practices for 

Developing and Managing Capital Program Costs, GAO-09-3SP, (Washington, D.C.: 

March 2009). 
Appendix I: Objectives, Scope, and 

Methodology

Page 26 GAO-14-12 Real Property Cost Savings

forth by the memorandum, and were well-documented. For example, we 

analyzed the savings the selected agencies reported in each of the 

categories established on Performance.gov to determine whether the 

agencies consistently determined the amount of savings reported within 

each of the categories and whether the agencies reported similar types of 

savings in the same categories. We also analyzed the savings reported 

by the selected agencies to determine whether they occurred within the 

time frames required by the memorandum, included the costs to 

implement the savings measure, and were tied to a real estate action.

Finally, we reviewed the documentation the selected agencies provided to 

OMB to determine whether the information was clear and detailed enough 

to support their reported savings and to understand how OMB reviewed 

the savings reported to ensure they were reliable and met the 

requirements of the memorandum. We conducted in-depth interviews with 

officials from our selected agencies as well as OMB staff to further 

understand how they determined the cost savings reported over the 2010 

to 2012 time period, challenges to meeting the requirements of the 

memorandum, and how similar efforts could be improved in the future.

We conducted this performance audit from December 2012 to October 

2013 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 the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Appendix II: Contact and Staff 

Acknowledgments

Page 27 GAO-14-12 Real Property Cost Savings

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

In addition to the contact named above, David Sausville, Assistant 

Director; Russell Burnett, Kathleen Gilhooly; Nancy Lueke; Nitin Rao; 

Amy Rosewarne; and Jack Wang made key contributions to this report.

Appendix II: Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(542212)
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