Federal Real Property: Progress Made Toward Addressing Problems, but Underlying Obstacles Continue to Hamper Reform
Published: 2007-04-13T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GAO prepared this report under the Comptroller General's authority to conduct evaluations on his own initiative to assist Congress. Federal real property is a high-risk area due to excess and deteriorating property, reliance on costly leasing, unreliable data, and security challenges. GAO's objectives were to determine (1) what progress the administration and major real property-holding agencies have made in strategically managing real property and addressing long-standing problems and (2) what problems and obstacles, if any, remain to be addressed. GAO reviewed documents and interviewed officials from the Office of Management and Budget (OMB) and nine agencies that hold 93 percent of federal property.
section_title: What GAO Found
paragraphs: The administration and real property-holding agencies have made progress toward strategically managing federal real property and addressing long-standing problems. In response to the President's Management Agenda real property initiative and a related executive order, agencies have, among other things, established asset management plans; standardized data reporting; and adopted performance measures. Also, the administration has created a Federal Real Property Council (FRPC) and plans to work with Congress to provide agencies with tools to better manage real property. These are positive steps, but underlying problems still exist. For example, the Departments of Energy (Energy) and Homeland Security (DHS) and the National Aeronautics and Space Administration (NASA) reported during this review that over 10 percent of their facilities are excess or underutilized. Also, Energy, NASA, the General Services Administration (GSA), and the Departments of the Interior (Interior), State (State), and Veterans Affairs (VA) reported repair and maintenance backlogs for buildings and structures that total over $16 billion. The Department of Defense (DOD) reported a $57 billion restoration and modernization backlog. Also, Energy, Interior, GSA, State, and VA reported an increased reliance on leasing to meet space needs. While agencies have made progress in collecting and reporting standardized real property data, data reliability is still a challenge at DOD and other agencies, and agencies lack a standard framework for data validation. Finally, agencies reported using risk-based approaches to prioritize security needs, which GAO has suggested, but some cited obstacles such as a lack of resources for security enhancements. In past high-risk updates, GAO called for a transformation strategy to address the long-standing problems in this area. While the administration's approach is generally consistent with what GAO envisioned, certain areas warrant further attention. Specifically, problems are exacerbated by underlying obstacles that include competing stakeholder interests, legal and budgetary limitations, and the need for improved capital planning. For example, agencies cited local interests as barriers to disposing of excess property, and agencies' limited ability to pursue ownership leads them to lease property that may be more cost-effective to own over time.

section_title: Letter
paragraphs: In January 2003, we designated federal real property as a high-risk area  because of long-standing problems with excess and underutilized  property, deteriorating facilities, unreliable real property data, and over- reliance on costly leasing. Federal agencies were also facing many  challenges in protecting their facilities against the threat of terrorism. In  addition, we found that these problems have been exacerbated by  obstacles that include competing stakeholder interests in real property  decisions, various legal and budget-related limitations, the need for better  agency capital planning, and the lack of a strategic, governmentwide focus  on real property issues. In our 2005 high-risk update, we reported that the  administration had initiated several key reform efforts that included  issuing Executive Order 13327 in February 2004 and adding the real  property initiative to the President’s Management Agenda (PMA). We  further noted that the Departments of Defense (DOD) and Veterans Affairs  (VA) continued to make progress with the Defense Base Realignment and  Closures (BRAC) Commission and the VA Capital Asset Realignment for  Enhanced Services (CARES) decisions, respectively. We acknowledged  that these efforts were positive, but said that it was too early to judge  whether the administration’s focus on this area would have a lasting  impact.
For this report, our objectives were to determine (1) what progress the  administration and major real property-holding agencies have made in  strategically managing real property and addressing long-standing  problems, and (2) what problems and obstacles, if any, remain to be  addressed. To do this work, we obtained answers to a set of questions that  we posed to the nine federal real property-holding agencies that hold 93  percent of the government’s owned and leased space. These agencies are  DOD; VA; and the Departments of Energy (Energy), Homeland Security  (DHS), the Interior (Interior), and State (State); the General Services  Administration (GSA); the National Aeronautics and Space Administration  (NASA); and the United States Postal Service (USPS). We also interviewed  officials from the Office of Management and Budget (OMB) because it  oversees the implementation of the executive order. We analyzed (1)  agencies’ written responses to our questions and (2) pertinent laws,  regulations, policies, and other documents relating to these agencies’ real  property management. We relied largely on the agencies’ responses to  assess their progress and performed an assessment of the reliability of the  information they provided. We determined that this approach was  adequate to meet our objectives. Additional information about our  methodology and the agencies included in our review appears in appendix  I. A summary of our findings for this report was included in our high-risk  update that was released in January 2007. We prepared this report under  the Comptroller General’s authority to conduct evaluations on his own  initiative as part of a continued effort to assist Congress with oversight of  real property issues. We conducted our work between April 2006 and  February 2007 in accordance with generally accepted government auditing  standards.
subsections: section_title: Background
paragraphs: The federal real property portfolio is vast and diverse. The federal  government controls over $374 billion (gross value) in real property assets  worldwide. DOD, USPS, GSA, and VA hold the majority of the owned and  leased facility space, totaling over 3 billion square feet of space. Numerous  laws and regulations govern the acquisition, management, and disposal of  federal real property. The Federal Property and Administrative Services  Act of 1949, as amended (Property Act), is the law that generally applies to  real property held by federal agencies, and GSA is responsible for the act’s  implementation. Agencies are subject to the Property Act unless they are  specifically exempted from it. Agencies may also have their own statutory  authority related to real property outside of the Property Act. In addition,  agencies must comply with numerous other laws related to real property.  For example, the Stewart B. McKinney Homeless Assistance Act  (McKinney Act), as amended, provides that property that agencies have  identified as unnecessary for mission requirements must first be made  available to assist the homeless. The National Historic Preservation Act,  as amended, requires agencies to manage historic properties under their  control and jurisdiction and to consider the effects of their actions on  historic preservation. USPS, which is an independent establishment in the  executive branch, is authorized to sell, lease, or dispose of property under  its general powers. USPS is exempt from most federal laws dealing with  real property and contracting.
A number of federal laws enacted in the 1990s, including the Federal  Acquisition Streamlining Act, the Clinger-Cohen Act, and the Government  Performance and Results Act of 1993, placed increased emphasis on  improving capital decision-making practices. OMB has issued various  guidance and requirements for agencies to implement in developing  disciplined capital programming processes. For example, the Capital  Programming Guide is intended to provide agencies with a basic  reference for establishing an effective investment decision-making  process. Agencies are expected to have a disciplined capital  programming process, and the Capital Programming Guide and our  Executive Guide are intended to help them effectively plan, procure, and  use assets to achieve the maximum return on investment. Under the guide,  agencies have flexibility in implementing the key principles.
Real property decisions draw considerable attention during congressional  deliberations over federal appropriations. Members of Congress take a  keen interest in federal facilities in their districts and in the economic  impact of any decisions. Several stakeholders other than Congress, OMB,  and the real property-holding agencies, have an interest in how the federal  government carries out its real property acquisition, management, and  disposal practices. These stakeholders include state and local  governments, business interests in the communities where the real  property assets are located, private sector construction and leasing firms,  historic preservation organizations, various advocacy groups, and the  public in general, which often views the facilities as the physical face of  the federal government in their communities. At both the national and  local levels, federal real property practices also often attract significant  media attention, particularly when these practices are under scrutiny for  waste and mismanagement.
In response to our designation of federal real property as a high-risk area,  the President signed Executive Order 13327 in February 2004. Shortly after  the issuance of the executive order, the President added the Federal Asset  Management Initiative, commonly referred to as the real property  initiative, to the PMA. The executive order, which applies to 24 executive  branch departments and agencies but not to USPS, established new  federal property guidelines for these agencies. To increase accountability  for real property asset management, the executive order called for each  agency to establish the position of Senior Real Property Officer. This  officer is required to prepare and submit to OMB an asset management  plan that is intended to ensure systematic agency procedures and actions  related to real property asset management. The executive order also called  for establishing a FRPC to develop guidance, collect best practices, and  help the Senior Real Property Officers improve the management of real  property assets. FRPC is to be composed of the Senior Real Property  Officers, the Controller of the Office of Management and Budget (OMB),  the Administrator of General Services, and any other officials or  employees permitted by the chair of FRPC. The Deputy Director for  Management for OMB is to be the chair, and OMB is to provide funding  and administrative support to the Council. OMB, FRPC and GSA all have  various roles and responsibilities under the executive order, as shown in  table 1.
The real property initiative was added to the PMA, which is an  administration program that has raised the visibility of key,  govermentwide management challenges; increased the emphasis on  achieving outcome based results; and reinforced the need for agencies to  focus on sustaining improvements that address long-standing management  problems, including items on our high-risk list. The Executive Branch  Management Scorecard, which OMB administers, tracks how well  agencies are executing the governmentwide management initiatives. The  scorecard employs a simple grading system: green for success, yellow for  mixed results, and red for unsatisfactory. Scores are based on scorecard  standards for success that have been developed for each initiative. The  real property initiative focuses on the 15 largest landholding agencies,  except for USPS; and, like the executive order, the initiative is designed to  ensure that property inventories are maintained at the right size, cost, and  condition to support agency missions and objectives. The real property  initiative’s framework consists of various layers, as shown in figure 1,  which include asset management decision-making tools that are intended  to help agencies right-size their inventories.
To help agencies achieve these objectives, the base of the initiative’s  framework specifies a complete and accurate inventory of all constructed  assets; asset management plans that systematize agency procedures and  actions related to asset management; and performance metrics against  which agencies can measure and evaluate asset management performance.  Also, the performance assessment tool segment provides an analytical  formula to help federal agencies better identify and rank their assets using  performance measurement data to highlight properties that are  nonmission-dependent, underutilized, costly to operate, and in poor  condition for possible disposal or rehabilitation. The legislative authority  segment is intended to help address barriers and process inefficiencies  that agencies currently encounter when disposing of, transferring,  constructing, or renovating assets in the modern real estate market. The  initiative also requires agencies to develop a 3-year timeline that is  updated annually and identifies the specific real property reform activities  that support their individual asset management plans.
section_title: The Administration and Major Real Property-Holding Agencies Have Taken Actions to Strategically Manage Real Property and Address Some Long- standing Problems
paragraphs: Pursuant to Executive Order 13327, the administration established the  FRPC to support reform efforts. As a result of the government’s real  property initiative, agencies have taken preliminary steps to improve the  strategic management of real property and have adopted some of the  administrative tools necessary to do so, including asset management  plans. In addition, individual agencies have taken steps toward addressing  some of the long-standing problems and are implementing various tools to  prioritize reinvestment and disposal decisions. To date, some individual  agencies have received special authorities, including the use of EUL  agreements. Additionally, certain agencies have been provided the  authority to dispose of real property and to retain the proceeds for their  real property needs. (App. II contains information on selected enhanced  real property authorities for major real property-holding agencies.)
subsections: section_title: The Administration and Agencies Have Made Progress Toward Strategically Managing Federal Real Property
subsections: section_title: Federal Real Property Council Established
paragraphs: The administration established FRPC in 2004, which subsequently created  interagency committees to work toward developing and implementing a  strategy to accomplish the executive order. One such interagency  committee, the Asset Management Plan Committee, currently chaired by  GSA, develops governmentwide asset management strategies, such as  requirements for each agency’s asset management plan. The Inventory and  Performance Measures Committee, currently chaired by DOD, is  responsible for the overall approach and direction of the new inventory  system, including new data definitions and reporting methodologies. In  addition, the committee develops metrics that can be used to assess and  benchmark the government’s real property management performance. The  Systems Committee, chaired by the Department of Agriculture, is  responsible for identifying the information technology requirements of the  inventory system. The full FRPC meets quarterly, and the four interagency  committees meet at least quarterly (see fig. 2).
FRPC established asset management principles that form the basis for the  strategic objectives and goals in the agencies’ asset management  programs. The asset management principles include the following goals  and objectives:    support agency missions and strategic goals;    use public and commercial benchmarks and best practices;    employ life-cycle cost benefit analyses;    promote full and appropriate utilization;    dispose of unneeded assets;    provide appropriate levels of investment;    accurately inventory and describe all assets;    employ balanced performance measures;    advance customer satisfaction; and,    provide safe, secure and healthy workplaces.
FRPC also developed a sample asset management plan and published  Guidance for Improved Asset Management in December 2004. The  guidance addresses published FRPC guiding principles, required  components for agency asset management plans, property inventory data  elements, and governmentwide performance measures. The asset  management plan is intended to systematize agency procedures and  actions related to asset management. According to FRPC’s sample asset  management plan and guidance, the major sections of the asset  management plan are supposed to describe how the agency:    addresses its mission and real property support in implementing its  missions and strategic goals, human capital and organizational structure,  decision-making framework, and owner’s objectives;    plans for and acquires real property assets, develops its capital plan,  prioritizes its list of acquisitions each fiscal year, measures the  effectiveness of its acquisition results, and identifies key initiatives to  improve financial management and acquisition performance;   operates its real property assets (including its inventory system,  operations and maintenance plans, asset business plans, or “building  block” plans, and periodic evaluation of assets), utilizes operational  measures, and implements key initiatives to improve operational  performance; and    disposes of unneeded real property assets, measures the effectiveness of  its redeployment actions, and identifies key initiatives to improve the pace  of disposition as well as its ability to dispose of difficult, environmentally  challenged properties.
In addition, the plan is to include a list of the agency’s recent disposals as a  frame of reference and identify assets for disposal in current and future  years.
section_title: Enhanced Inventory System Developed
paragraphs: FRPC worked with GSA to develop and enhance an inventory system  known as the Federal Real Property Profile (FRPP), which was designed  to meet the executive order’s requirement for a single database that  includes all real property under the control of executive branch agencies.  The FRPC, with the assistance of the GSA Office of Government-wide  Policy, developed 23 mandatory data elements, which include four  performance measures. The four performance measures are utilization,  condition index, mission dependency, and annual operating and  maintenance costs. (App. III lists and describes the data elements.) In June  2006, FRPC added a data element for disposition that included six major  types of disposition, including sale, demolition, or public benefit  conveyance. In addition, a performance assessment tool has been  developed, which is to be used by agencies to analyze the inventory’s  performance measurement data in order to identify properties for disposal  or rehabilitation. To assist agencies in their data submissions for the FRPP  database, FRPC provided standards and definitions for the data elements  and performance measures through guidance issued on December 22,  2004, and a data dictionary issued by GSA in October 2005. The first  governmentwide reporting of inventory data for FRPP took place in  December 2005, and selected data were included in the fiscal year 2005  FRPP published by GSA, on behalf of FRPC, in June 2006. Data on the four  performance measures were not included in this report.
section_title: Agencies Have Met Scorecard Standards to Varying Degrees
paragraphs: Adding real property asset management to the PMA has increased its  visibility as a key management challenge and focused greater attention on  real property issues across the government. OMB has identified goals  related to the four performance measures in the inventory for agencies to  achieve in right-sizing their real property portfolios, which include  demonstrating results by  reducing the number of nonmission-dependent assets, increasing utilization of assets, improving the condition of assets, and reducing the operating costs of assets or at least maintaining them  consistent with industry standards.
Specifically, it is the administration’s goal to reduce the size of the federal  real property inventory by 5 percent, or $15 billion, by disposing of  unneeded assets by 2015. In October 2006, the administration reported that  $3.5 billion in unneeded federal real property had been disposed of since  2004.
To achieve these goals and gauge an agency’s success in accurately  accounting for, maintaining, and managing its real property assets so as to  efficiently meet its goals and objectives, the administration established the  real property scorecard in the third quarter of fiscal year 2004. The  scorecard consists of 13 standards that agencies must meet to achieve  green status, which is the highest status. These 13 standards include 8  standards needed to achieve yellow status, plus 5 additional standards. An  agency reaches “green” or “yellow” status if it meets all of the standards  for success listed in the corresponding column in figure 3 and red if it has  any one of the shortcomings listed in the “red” column.
OMB evaluates agencies quarterly, and agencies then have an opportunity  to update OMB on their progress toward achieving green status.
According to PMA real property scorecards, as of the first quarter of fiscal  year 2007, all of the 15 real property-holding agencies that are part of the  real property initiative have, at a minimum, met the standards for yellow  status as shown in figure 4.
Among the 15 agencies under the real property initiative, 5 agencies—GSA  NASA, Energy, State, and VA—have achieved green status. According to  OMB, the agencies achieving green status have established 3-year  timelines for meeting the goals identified in their asset management plans  and have provided evidence that they are implementing their asset  management plans, using real property inventory information and  performance measures in decision making, and managing their real  property in accordance with their strategic plan, asset management plan,  and performance measures. Once an agency has achieved green status,  OMB continues to monitor its progress and results through PMA using  deliverables identified in its 3-year timeline and quarterly scorecards. Each  quarter, OMB also provides formal feedback to agencies through the  scorecard process, along with informal feedback, and clarifies  expectations. Yellow status agencies still have various standards to meet  before achieving green.
section_title: Agency Actions Intended to Address Some Long- standing Problems
paragraphs: Besides responding to the administration’s real property initiative, some  agencies have taken steps toward addressing some of their long-standing  problems, including excess and underutilized property and deteriorating  facilities. Some agencies are implementing various tools to prioritize  reinvestment and disposal decisions on the basis of agency needs,  utilization, and costs. For example, GSA and NASA officials reported  establishing models that integrate agency mission, utilization, and cost  considerations into asset management planning. Specifically, NASA  officials reported that they have taken steps to better align holdings with  agency space needs and priorities, which includes an approach that  incorporates operating costs and utilization information. Likewise, GSA  officials reported that GSA’s Portfolio Restructuring Strategy sets  priorities for disposal and reinvestment based on agency missions and  anticipated future need for holdings. In addition, GSA developed a  methodology to analyze its leased inventory in fiscal year 2005. This  approach values leases over their life, not just at the point of award;  considers financial performance and the impact of market rental rates on  current and future leasing actions; and categorizes leases by their risk and  value. Examples of some real property asset management strategies  adopted by agencies are described in table 2.
In addition to trying to align assets with their missions, some agencies are  taking steps to make the condition of core assets a priority and address  maintenance backlog challenges. For example, Energy officials reported  establishing budget targets to align maintenance funding with industry  standards as well as programs to reduce the maintenance backlogs  associated with specific programs. Interior officials reported that the  department has conducted condition assessments for 72,233 assets as of  fourth quarter fiscal year 2006. VA reported establishing a facility  condition assessment process that will help identify the funding needed to  improve the current infrastructure. In addition, USPS officials reported  having a program under way to inspect replacement values and  information on the condition of facilities in order to better link condition  assessments and maintenance and repair funding.
section_title: Additional Efforts Made to Strategically Manage and Address Problems
subsections: section_title: The Administration Intends to Work with Congress to Provide Agencies with Tools to More Effectively Manage Real Property
paragraphs: As mentioned previously, Executive Order 13327 requires that OMB, along  with landholding agencies, develop legislative initiatives to improve  federal real property management and establish accountability for  implementing effective and efficient real property management practices.  Some individual agencies have obtained legislative authority in recent  years to use certain real property management tools, but no  comprehensive legislation has been enacted. Accordingly, the  administration plans to support legislative reforms that would allow  agencies to have the funds necessary to cover the costs of disposal; and  streamline the federal transfer process, including the actions needed to  comply with the McKinney Act and the National Environmental Policy Act  (NEPA). A current OMB legislative initiative involves a three-part  approach that (1) identified demonstration properties for disposal, (2)  included a disposal pilot program in the President’s Fiscal Year 2007 and  2008 Budgets, and (3) enhanced individual agency authorities.
OMB staff reported that about 8 to 10 demonstration projects were  identified for disposal and resulted in mixed success. Among the  properties identified were the NASA Camp Parks site in California and  Federal Communication Commission (FCC) properties in California and  Hawaii. Both NASA and FCC were authorized to sell these sites and to  retain the proceeds from their sale. However, OMB staff reported FCC  had encountered impediments to disposing both FCC properties. These  impediments were: (1) proximity of the asset to a military blast zone, and  (2) presence of an endangered species.
The President’s 2007 and 2008 Budget Submissions included a proposal for  a Federal Real Property Disposal Pilot Program that would authorize the  Director of OMB to conduct a pilot program for the disposal of real  property that is not meeting federal government needs. The pilot would  have lasted 5 years and agencies would have recommended candidate  disposition properties to OMB. Properties identified for disposal under  this proposal would have been subject to, among other requirements, the  McKinney Act. The administration’s proposal would have permitted  agencies to retain 20 percent of the net proceeds of sale from properties  that an agency disposes of through the pilot program. The remaining 80  percent would have been deposited into the Treasury as miscellaneous  receipts. Congress did not act on this proposal, and OMB staff believe that  the Congressional Budget Office scoring will play an important role in  determining the shape of a permanent real property reform solution.
In its fiscal year 2005 appropriation act, GSA was authorized to convey  real property by sale, lease, exchange, or other means and to retain the net  proceeds in the Federal Buildings Fund to be used for GSA’s real property  capital needs subject to an appropriation act. In addition, in 2005, the U.S.  Forest Service, within USDA, was provided authority until September 30,  2008, to sell, lease or exchange administrative sites of 40 acres or less  under the Secretary’s jurisdiction and to retain the proceeds.
section_title: Some Agencies Have Special Legal Authorities to Manage Their Federal Real Property Assets
paragraphs: Some agencies have received special real property management  authorities, such as the authority to enter into EUL agreements. These  agencies are also authorized to retain the proceeds of the lease and to use  them for items specified by law, such as improvement of their real  property assets. DOD, Energy, Interior, NASA, USPS, and VA are  authorized to enter into EUL agreements and have authority to retain  proceeds from the lease. These authorities vary from agency to agency,  and in some cases, these authorities are limited. For example, NASA is  authorized to enter into EUL agreements at two of its centers, and VA’s  authority to enter into EUL agreements expires in 2011. In addition, VA  was authorized in 2004 to transfer real property under its jurisdiction or  control and to retain the proceeds from the transfer in a capital asset fund  for property transfer costs, including demolition, environmental  remediation, and maintenance and repair costs. VA officials noted that  although VA is authorized to transfer real property under its jurisdiction or  control and to retain the proceeds from such transfers, this authority has  significant limitations on the use of any funds generated by any disposal  under this authority. Additionally, GSA was given the authority to retain  proceeds from disposal of its real property and to use the proceeds for its  real property needs. In another example, using its BRAC authorities, DOD  estimated that it reduced its domestic infrastructure by about 20 percent,  and about 90 percent of unneeded BRAC property is now available for  reuse. Substantial net savings of approximately $29 billion have been  realized, according to DOD. After the previous BRAC recommendations  were adopted, DOD declared that 504,000 acres of property were  unneeded and available for transfer to other federal or nonfederal entities.  (App. II contains information on enhanced real property authorities for  major real property-holding agencies.)
Agencies with enhanced authorities believe that these authorities have  greatly improved their ability to manage their real property portfolios and  operate in a more businesslike manner:    VA used its enhanced authorities to dispose of its underutilized Lakeside  Campus in Chicago. In January 2005, VA executed an EUL for the Lakeside  facility, and, in turn, received $28 million for the lease, as well as the right  to lease back space for 3 years to house its existing outpatient clinic at  Lakeside. In October 2005, the Secretary determined that the department  no longer needed the campus, and VA sold it for an additional $22 million.  VA officials reported that the transaction resulted in a demonstrable  improvement of services to eligible veterans by permitting VA to offset the  cost of implementing CARES in Chicago and other locations, and avoid the  future costs of maintaining aging health care facilities.
GSA officials successfully sold through auction the 1.9 million square foot  facility known as the Middle River site in Baltimore County, Maryland for  $37.5 million. GSA received specific authority in its fiscal year 2005  appropriation act to sell the property and to retain the sale proceeds.
Overall, the administration’s efforts to raise the level of attention to real  property as a key management challenge and to establish guidelines for  improvement are noteworthy. The administrative tools, including asset  management plans, inventories, and performance measures, were not in  place to strategically manage real property before we updated our high- risk list in January 2005. The actions taken by major real property-holding  agencies and the administration to establish such tools are clearly positive  steps. However, these administrative tools and the real property initiative  have not been fully implemented, and it is too early to determine if they  will have a lasting impact. Implementation of these tools has the potential  to produce results such as reductions in excess property, reduced  maintenance and repair backlogs, less reliance on leasing, and an  inventory that is shown to be reliable and valid.
section_title: Long-standing Problems in Real Property Largely Persist and Obstacles Remain
paragraphs: Although clear progress has been made toward strategically managing  federal real property and addressing some long-standing problems, real  property remains a high–risk area because the problems persist and  obstacles remain. Agencies continue to face long-standing problems in the  federal real property area, including excess and underutilized property,  deteriorating facilities and maintenance and repair backlogs, reliance on  costly leasing, and unreliable real property data. Federal agencies also  continue to face many challenges securing real property. These problems  are still pervasive at many of the major real property-holding agencies,  despite agencies’ individual attempts to address them.
subsections: section_title: Long-standing Problems in Real Property Largely Persist
subsections: section_title: The Federal Government Continues to Hold Many Unneeded Assets
paragraphs: Although the changes being made to strategically manage real property are  positive and some realignment has taken place, the size of agencies’ real  property portfolios remains generally outmoded. As we have reported, this  trend largely reflects a business model and the technological and  transportation environment of the 1950s. Many of these assets and  organizational structures are no longer needed; others are not effectively  aligned with, or responsive to, agencies’ changing missions. At the same  time, technological advances have changed workplace needs, and many of  the older buildings are not configured to accommodate new technologies.  Furthermore, electronic government has changed the way the public  interacts with the federal government, and this change will have  significant implications for the type and location of property needed in the  21st century.
As we have reported, many of the major real property-holding agencies  have undergone significant mission shifts over the last decade that have  affected their real property needs, and some agencies are working to  reduce their unneeded federal real property assets. After five rounds of  base closures and a 6-year demolition program that eliminated over 86  million square feet of excess and obsolete real property assets, DOD  identified more unneeded facilities to be eliminated by fiscal year 2013.  DOD officials reported that the department has not yet finished reporting  all excess property because its property holdings are so extensive, and it  has just started to collect detailed information on excess facilities for the  FRPP.
Similarly, VA initiated its CARES process—the first comprehensive, long- range assessment of its health care system’s capital asset requirements  since 1981—to address its obsolete infrastructure. We reported in August  2005 that CARES resulted in decisions to realign inpatient services at some  VA facilities and to leave services as currently aligned at others. VA did  not complete inpatient alignment decisions agencywide for long-term care  and mental health services and for inpatient services at some facilities  because it lacked sufficient information on demand for such care and  other factors. We reported that VA, however, made some inpatient long- term care and mental health alignment decisions for some locations.
While some major real property-holding agencies have had some success  in attempting to realign their infrastructures in accordance with their  changing missions, others still maintain a significant amount of excess and  underutilized property. For example, officials with Energy, DHS, and  NASA—which are three of the largest real property-holding agencies— reported that over 10 percent of the facilities in their inventories were  excess or underutilized. While some agencies, including Interior, State,VA,  and USPS reported relatively low levels of excess property, the need to  address the problem at other agencies is still significant. Table 3 describes  the status of excess and underutilized real property challenges at the nine  major real property-holding agencies.
The magnitude of the problem with underutilized or excess federal real  property continues to put the government at risk for lost dollars and  missed opportunities. As we have reported, underutilized or excess  property is costly to maintain. For example, according to GSA officials,  188 assets accepted for disposal account for 8 million gross square feet  and $8.1 million in operating expenses that will be eliminated upon  completion of the disposal action. Another 6 underutilized assets with  approximately 580,000 gross square feet and $1.4 million in operating costs  are projected for disposal in the next 5 years, pending customer  relocation. However, it is too early to tell whether GSA will be successful  in disposing of these assets. Furthermore, VA officials reported that VA  has a significant number of properties no longer located in places where  veterans live, and many of these properties are over 50 or 60 years old.  Two examples of excess federal properties are the former Main VA  Hospital Building, in Milwaukee, Wisconsin, and the former Main Post  Office in Chicago, Illinois, both of which are vacant (see fig. 5).
Addressing the needs of aging and deteriorating federal facilities remains a  problem for major real property-holding agencies. According to current  estimates, tens of billions of dollars will be needed to repair or restore  these assets so that they are fully functional. Furthermore, much of the  federal portfolio was constructed over 50 years ago, and these assets are  reaching the end of their useful lives. Energy, NASA, GSA, Interior, State,  and VA reported repair and maintenance backlogs for buildings and  structures that total over $16 billion. In addition, DOD reported a $57  billion restoration and modernization backlog.
To determine whether agencies still have repair and restoration backlogs,  we asked each agency to provide updated estimates of their backlogs,  which we defined as needs in facilities for which major upkeep, repair,  and maintenance have not been funded and the repair and maintenance on  these assets has been postponed. We found that there was variation in  how agencies reported data on their backlog. Some agencies reported  deferred maintenance figures consistent with the definition used for data  on deferred maintenance included in their financial statements. Others  provided data that included major renovation or restoration needs. More  specifically,    For DOD, facilities restoration and modernization requirements total over  $57 billion. Officials noted that the backlog does not reflect the impact of  BRAC 2005 or related strategic rebasing decisions that will be  implemented over the next several years. BRAC decisions that result in  closing installations will reduce the overall restoration and modernization  backlog. However, this benefit will be partially offset by new requirements  to restore and modernize facilities to accommodate new missions at  gaining BRAC installations.
For Energy, the backlog in fiscal year 2005 for a portfolio valued at $85.2  billion was $3.6 billion. Officials reported that Energy’s real property  portfolio is aging and assets had been undermaintained in the past; but the  department has emphasized maintenance and has been funding  maintenance within accepted industry guidelines. Moreover, Energy  officials added that multiple real property owning programs have  established funding lines to address the existing backlog. Energy has seen  a stabilization of deferred maintenance and has indications that the overall  backlog has gone down.
For Interior, officials reported an estimated maintenance backlog of over  $3 billion for buildings and other structures. Officials reported that each  bureau maintains its deferred maintenance backlog based on condition  assessments. Interior officials noted that the maintenance backlog cannot  be expressed as a static figure. For example, in the case of the National  Park Service (NPS), it is based on a limited set of assets (buildings, roads,  water and wastewater plants, trails, and campgrounds) but does not  include other assets such as national landmarks and monument. The  maintenance backlog is based on preliminary condition assessments that  were completed prior to the end of fiscal year 2006. Interior officials noted  that they are continually finding out more about its assets as part of the  comprehensive assessments. Furthermore, every asset is not of equal  priority, according to Interior officials, and managers must make informed  decisions about where to invest dollars using management tools, including  performance metrics. Interior officials also reported that the department  has significantly improved its management of maintenance and  construction priorities and projects with the implementation of the 5-year  plan, the facility condition index, and the asset priority index.
GSA’s current maintenance backlog is estimated at $6.6 billion. GSA  officials cited obtaining additional sources of capital as the major barrier  in addressing the maintenance backlog. Specifically, officials noted that  additional appropriations are generally not available for reinvestment or  operating expenses, and GSA can rely only on what the Federal Buildings  Fund generates. According to officials, many of GSA’s buildings are in  need of extensive renovation and the reinvestment needs of the portfolio  have not been met with available funding.
For State, the maintenance backlog is estimated at $132 million, which  includes all of the deferred/unfunded maintenance and repair needs for  prior fiscal years. Officials noted that major rehabilitation projects require  funding of at least $100 million annually.
For NASA, the restoration and repair backlog is estimated at over $2.05  billion as of the end of fiscal year 2006. Officials noted that having a  maintenance backlog can result in further damage if, for example, a roof  leak is not repaired and water intrusion causes further damage.
For VA, the maintenance backlog for facilities with major repair needs is  estimated at $5 billion, and according to VA officials, VA must address this  aged infrastructure while patient loads are changing. VA officials noted  that VA has moved aggressively to address its maintenance and repair  backlog.
section_title: Despite Long-Term Cost, Several Agencies Reported That Reliance on Leasing to Meet New Space Needs Is Increasing
paragraphs: Many of the major real property-holding agencies continue to rely on  costly leased space to meet new space needs. As a general rule, building  ownership options through construction or purchase are the least  expensive ways to meet agencies’ long-term requirements. Lease  purchases—under which payments are spread out over time and  ownership of the asset is eventually transferred to the government— are  generally more expensive than purchase or construction but are generally  less costly than using ordinary operating leases to meet long-term space  needs. For example, we testified in October 2005 that for the Patent and  Trademark Office’s long-term requirements in northern Virginia, the cost  of an operating lease was estimated to be $48 million more than  construction and $38 million more than lease purchase. However, over the  last decade we have reported that GSA—as the central leasing agent for  most agencies— relies heavily on operating leases to meet new long-term  needs because it lacks funds to pursue ownership.
Operating leases have become an attractive option, in part because they  generally “look cheaper” in any given year, even though they are generally  more costly over time. Under current budget scorekeeping rules, the  budget records the full cost of the government’s commitment. Operating  leases were intended for short-term needs and thus, under the  scorekeeping rules, only the amount needed to cover the first year lease  payments plus cancellation costs needs to be recorded. However, the rules  have been stretched to allow budget authority for some long-term needs  being met with operating leases to be spread out over the term of the  lease, thereby disguising the fact that over time, leasing will cost more  than ownership. Resolving this problem has been difficult; however,  change is needed because the current practice of relying on costly leasing  to meet long-term space needs results in excessive costs to taxpayers and  does not reflect a sensible or economically rational approach to capital  asset management.
Five of the nine largest real property-holding agencies—Energy, Interior,  GSA, State, and VA—reported an increased reliance on operating leases to  meet new space needs over the past 5 years. According DHS officials, per  review of GSA’s fiscal year 2005 and 2006 lease acquisition data for DHS,  there has been no significant increase in GSA-acquired leased space for  DHS. In addition, officials from NASA and USPS reported that their  agency’s use of operating leases has remained at about the same level over  the past 5 years.
Energy officials reported that the department has increasingly relied on  operating leases instead of federal construction over the past 5 years.  Officials told us that the difficulty in obtaining funding for major  construction projects has made operating leases an attractive alternative.  In addition, Energy officials added that the department scrutinizes lease  proposals and compares the life-cycle costs for line item construction and  the operating lease to ensure the operating lease is in the best interest of  the department and the taxpayer.
GSA officials reported that GSA’s reliance on operating leases has  increased over the past 6 years. While the owned square footage has  decreased from 183.9 million in fiscal year 2000 to 174.4 million in fiscal  year 2006, the leased inventory has grown from 152.8 million to 172.3  million during the same period.
According to Interior officials, the total square footage in direct leases  increased from 2.7 million to 3.7 million from fiscal year 2002 to fiscal year  2005.
State officials reported that the department’s reliance on operating leases  has increased to meet the growth of agencies overseas. Officials reported  that funding for short- and long-term operating leases is vital for providing  the space U.S. agencies need to perform their missions. Specifically, in  countries where the U.S. agencies’ programmatic growth is expected to be  rapid or temporary, short-term operating leases (i.e., those with initial  lease terms of less than 10 years) might be a more economical option and  result in less risk than the construction of government facilities.
According to VA officials, the number of VA direct operating leases has  increased, with the leased square footage increasing over 4 million in fiscal  year 2004 to over 7 million in fiscal year 2006. VA officials reported that VA  needs a more flexible facility infrastructure to accommodate changes in  medical technology and shifts in demographic data.
We did not analyze whether the leasing activity at these agencies, either in  the aggregate or for individual leases, resulted in longer-term costs than if  these agencies had pursued ownership. For short-term needs, leasing  likely makes economic sense for the government in many cases. However,  our past work has shown that, generally speaking, for long-term space  needs, leasing is more costly over time than direct ownership of these  assets.
Decision makers have struggled with how to balance transparency over  long-term costs and constraints on annual budgets since federal budget  scoring rules were established. As an alternative, we have suggested  scoring the budget authority for all operating leases up front on the basis  of the underlying time requirement for the space so that all options are  treated equally. If pursued, this approach would pose implementation  challenges, including the need to evaluate the validity of agencies’ stated  space requirements. Finding a solution for this problem has been difficult;  however, the current practice of relying on costly leasing to meet long- term space needs results in excessive costs to taxpayers and does not  reflect a sensible or economically rational approach to capital asset  management. Furthermore, despite its significance, this problem has gone  largely unaddressed in the real property initiative. Without greater  attention to resolving this problem, the government will likely continue to  choose options that clearly cost taxpayers significantly more over the long  term.
section_title: Governmentwide Real Property Data Inventory Is in Early Stages, and Data Reliability Is Still a Problem at the Agency Level
paragraphs: While the administration and agencies have made progress in collecting  standardized data elements needed to strategically manage real property,  the long-term benefits of the new real property inventory have not yet  been realized, and this effort is still in the early stages. The federal  government has made progress in revamping its governmentwide real  property inventory since our 2003 high-risk report. As previously  mentioned, the first governmentwide reporting of inventory data for FRPP  took place in December 2005, and GSA published the data on behalf of  FRPC, in June 2006. According to the 2005 FRPP report, the goals of the  centralized database are to improve decision making with accurate and  reliable data, provide the ability to benchmark federal real property assets,  and consolidate governmentwide real property data collection into one  system. According to FRPC, these improvements in real property and  agency performance data will result in reduced operating costs, improved  asset utilization, recovered asset values, and improved facility conditions,  among others.
According to OMB staff, the first reporting for FRPP in 2005 included  information for 1.2 million assets and all agencies under the Chief  Financial Officers Act of 1990 (CFO Act) reported data to the FRPP. OMB  staff reported that some agencies requested and received waivers for  reporting a portion of their inventory or performance data in December  2005. Most of the waivers related to the agencies’ ability to capture the  data early enough for the December 2005 reporting deadline. OMB staff  said that these waivers have expired for the December 2006 reporting.  Also, OMB staff said that agencies reported performance measure data to  the FRPP as part of the FRPP fiscal year 2005 submission. Performance  data were not reported in the publicly available, governmentwide report.
According to OMB staff, the biggest challenge encountered by the FRPC,  in establishing the inventory data elements and performance measures,  was developing common definitions. Officials reported that it was difficult  to agree on one definition for elements such as square footage (e.g., gross  versus rentable) and value (e.g., book, appraised, or replacement) when  agencies use many working definitions for those elements. According to  OMB staff, FRPC has analyzed the results of the initial inventory data  reporting and determined that at this time, the guidance does not need  further revision. Currently, FRPC is working to promote the identification  and prioritization of assets for disposal; assets that are in good condition  and are highly used are considered low priority, and assets that are in poor  condition and have high operating costs are considered high priority.
OMB staff reported that the subjective nature of some data elements was  also a challenge when attempting to make comparisons across agencies.  According to OMB staff, the FRPC guidance was drafted to allow each  agency to interpret mission criticality in an agency-specific manner. For  example, part of GSA’s mission is to help federal agencies better serve the  public by providing workplaces. Therefore, GSA’s fulfillment of tenant  agencies’ space needs at a location would make that location mission  dependent from GSA’s perspective. For agencies such as Energy, officials  reported that mission dependency is determined based on the application  of published definitions of mission critical, mission dependent, and not  mission dependent. These align with the guidance promulgated by FRPC.  Determination of mission dependency is made at the asset level by site  management with input from real property owning programs.
It is important to note that real property data contained in the financial  statements of the U.S. government have also been problematic. The CFO  Act, as expanded by the Government Management Reform Act, requires  the annual preparation and audit of individual financial statements for the  federal government’s 24 major agencies. The Department of the Treasury  is also required to compile consolidated financial statements for the U.S.  government annually, which we audit. In March 2006, we reported that— for the ninth consecutive year—certain material weaknesses in internal  control and in selected accounting and financial reporting practices  resulted in conditions that continued to prevent us from being able to  provide the Congress and the American people with an opinion as to  whether the consolidated financial statements of the U.S. government  were fairly stated in conformity with U.S. generally accepted accounting  principles. We also reported that the federal government did not maintain  effective internal control over financial reporting (including safeguarding  assets) and compliance with significant laws and regulations as of  September 30, 2005.
section_title: Individual Agencies Continue to Struggle with Data Reliability Issues
paragraphs: While agencies have made significant progress in collecting the data  elements from their real property inventory databases for the FRPP, data  reliability is still a problem at some of the major real property-holding  agencies and agencies lack a standard framework for assessing the validity  of data used to populate the FRPP. Quality governmentwide and agency- specific data are critical for addressing the wide range of problems facing  the government in the real property area, including excess and unneeded  property, deterioration, and security concerns. Despite the progress made  by the administration and individual agencies in recent years, decision  makers historically have not had access to complete, accurate, and timely  data on what real property assets the government owns; their value;  whether the assets are being used efficiently; and what overall costs are  involved in preserving, protecting, and investing in them. Also, real  property-holding agencies have not been able to easily identify excess or  unneeded properties at other agencies that may suit their needs. More  recent information on agency data reliability issues shows that this  problem has persisted.
In April 2006, the DOD Inspector General (IG) reported weaknesses in the  control environment and control activities that led to deficiencies in the  areas of human capital assets, knowledge management, and compliance  with policies and procedures related to real property management. As a  result, the military departments’ real property databases were inaccurate,  jeopardizing internal control over transactions reported in the financial  statements.
According to agency officials, DHS’s real property data inventory, called  its Real Property Information System, is mostly complete, but some DHS  components face challenges collecting some data elements, including key  performance measures such as condition indexes. According to DHS  officials, all DHS components met the latest requirements for its FRPP  data submission in December 2006. To meet the FRPP reporting  requirement, proxies were used for operating costs and condition indexes  as components work toward developing more robust data in these areas.
According to GSA’s Office of the Inspector General (OIG) in 2005,  improvements were needed in management, operational, and technical  controls for GSA’s System for Tracking and Administering Real Property  (STAR). Specifically, the IG concluded that additional steps were needed  to establish and achieve system-specific measures and goals for long-term  efficiency and effectiveness. Further, the IG determined that GSA’s Public  Buildings Service (PBS) had not yet completed a comprehensive data  dictionary for STAR that can be leveraged across the organization to  effectively support business functions. PBS acknowledged the need for  improvement in the areas identified in the OIG Audit Report and  developed a corrective action plan to address the two IG  recommendations. The action plan to address the recommendations  included (1) an information paper that summarized and provided a course  of action to address the issue of establishing STAR system-specific  measures and goals for long-term efficiency and effectiveness and (2) a  complete system data dictionary designed to capture the comprehensive  nature of information in STAR and more effectively leverage the system  across the PBS organization, which has been implemented by PBS. The  data dictionary can be accessed by PBS associates with an authorized user  ID and password. According to GSA officials, all audit recommendations  have been addressed.
Interior officials reported, during this review, that the department is  gradually strengthening its ability to identify excess property through the  use of performance measurement data, which is maintained in the  centralized governmentwide inventory system of real property holdings.
State officials reported, during this review, that State had a shortage of  timely and valid facility data needed to manage its maintenance backlog.  According to officials, the Bureau of Overseas Building Operations (OBO)  is addressing several problems in this regard, including (1) several  databases that are not linked together; (2) the absence of a modern  computerized maintenance management system; and (3) OBO’s lack of  access to posts’ assessments of critical facilities, systems, and equipment.  Officials reported that a new data management system that will combine  all of the databases and address many of the current data challenges will  be phased in, starting in 2007.
Compounding these issues is the difficulty each agency has in validating  its real property inventory data that are submitted to FRPP. Validation of  individual agencies’ data is important because the data are used to  populate the FRPP. Because a reliable FRPP is needed to advance the  administration’s real property initiative, ensuring the validity of data that  agencies provide is critical. In general, we found that agencies’ efforts to  validate the data for the FRPP are at the very early stages of development.  For example, according to Interior officials, the department had designed  and was to begin implementing a program of validating, monitoring, and  improving the quality of data reported into FRPP in the last quarter of  fiscal year 2006.
Furthermore, according to OMB staff, there is no comprehensive review or  validation of data once agencies submit their real property profile data to  OMB. OMB staff reported that both OMB and GSA review agency data  submissions for variances from the prior reporting period. However,  agencies are required to validate their data prior to submission to the GSA- managed database. OMB staff reported that some agencies, as part of the  PMA initiative, have provided OMB with plans for ensuring the quality of  their inventory and performance data. OMB staff reported that OMB has  not, to date, requested these plans of all agencies. OMB staff reported that  agencies provide OMB with information that includes the frequency of  data updates and any methods used for data validation. In addition,  according to OMB staff, OMB relies on the quality assurance and quality  control processes performed by individual agencies. Also, OMB staff noted  that they rely on agency IGs, agency financial statements, and our reviews  to establish the validity of the data. Furthermore, OMB staff indicated that  a one-size-fits-all approach to data validation would be difficult to  implement. Nonetheless, a general framework for data validation that  could guide agencies in this area would be helpful, as agencies continue  their efforts to populate the FRPP with data from their existing data  systems. A framework for FRPP data validation approaches could be used  in conjunction with the more ad hoc validation efforts OMB mentioned to,  at a minimum, suggest standards for frequency of validation, validation  methods, error tolerance, and reporting on reliability. Such a framework  would promote a more comprehensive approach to FRPP data validation.
section_title: Physical Security Is Still a Problem for Major Real Property-Holding Agencies
paragraphs: The threat of terrorism has increased the emphasis on physical security  for federal real property assets. All of the nine agencies reported using  risk-based approaches to some degree to prioritize facility security needs,  as we have suggested; but some agencies cited challenges, including a  lack of resources for security enhancements and issues associated with  securing leased space. For example, DHS officials reported that the  department is working to further develop a risk management approach  that balances security requirements and the acquisition of real property  and leverages limited resources for all its components. In many instances,  available real property requires security enhancements before government  officials can occupy the space. Officials reported that these security  upgrades require funding that is beyond the cost of acquiring the property,  and, therefore, their acquisition is largely dependent on the availability of  sufficient resources.
In the security area, Energy officials reported that safeguards and security  programs are based on vulnerability and risk assessments, the results of  which are used to design and provide graded protection in accordance  with an asset’s importance or the impact of its loss, destruction, or misuse.  In addition, Interior published the National Monument and Icon Security  Assessment Methodology in August 2004 to quantify risk levels, identify  needed security enhancements, and measure risk reduction benefits at  monument and icon assets. Interior officials told us that the department  hired a security manager to provide oversight and a liaison function for its  real property holdings. Also, GSA officials reported that GSA, in  conjunction with Federal Protective Service, conducts periodic building  security assessments for all GSA-controlled buildings on a schedule  determined by each building’s Department of Justice security level.  Threats and vulnerabilities are identified and designated low, medium, or  high risk, and countermeasures that address high-risk threats take priority.  NASA officials reported that NASA incorporates risk management in all of  its prioritization of security resources.
While some agencies have indicated that they have made progress in using  risk-based approaches, some officials told us that they still face  considerable challenges in balancing their security needs and other real  property management needs with their limited resources. According to  GSA officials, obtaining funding for security countermeasures, for both  security fixtures and equipment, is a challenge, not only within GSA, but  for GSA’s tenant agencies as well. In addition, Interior and NASA officials  reported that their agencies face budget and resource constraints in  securing real property. Interior officials further noted that despite these  limitations, incremental progress is made year after year in security.
Given their competing priorities and limited security resources, some of  the major real property-holding agencies face considerable challenges in  balancing their security and real property management needs. We have  reported that agencies could benefit from specific performance  measurement guidance and standards for facility protection to help them  address the challenges they face and help ensure that their physical  security efforts are achieving the desired results. Without a means of  comparing the effectiveness of security measures across facilities,  particularly program outcomes, the U.S. government is open to the risk of  either spending more money for less effective physical security measures  or investing in the wrong areas. Furthermore, performance measurement  helps ensure accountability, since it enables decision makers to isolate  certain activities that are hindering an agency’s ability to achieve its  strategic goals. Performance measurement can also be used to prioritize  security needs and justify investment decisions so that an agency can  maximize available resources.
Despite the magnitude of the security problem, we noted that this area is  largely unaddressed in the real property initiative. Without formally  addressing security, there is a risk that this challenge could continue to  impede progress in other areas. The security problem has an impact on the  other problems that have been discussed. For example, to the extent that  funding will be needed for a sustained investment in security, the funding  available for repair and restoration, preparing excess property for  disposal, and improving real property data systems may be further  constrained. Furthermore, security requires significant staff time and other  human capital resources and thus real property managers may have less  time to manage other problems.
section_title: Underlying Obstacles Hamper Agency Real Property Reform Efforts Governmentwide
paragraphs: In past high-risk reports, we called for a transformation strategy to address  the long-standing problems in this area. While the administration’s current  approach is generally consistent with what we envisioned and the  administration’s central focus on real property management is a positive  step, certain areas warrant further attention. Specifically, problems are  exacerbated by underlying obstacles that include competing stakeholder  interests and legal and budgetary limitations. For example, some agencies  cited local interests as barriers to disposing of excess property. In  addition, agencies’ limited ability to pursue ownership often leads them to  lease property that they could more cost-effectively own over time.
Another obstacle—the need for improved long-term capital planning— remains despite OMB efforts to enhance related guidance.
subsections: section_title: Several Agencies Cited Competing Stakeholder Interests as Impeding Real Property Management Decision Making
paragraphs: In addition to Congress, OMB, and the real property-holding agencies,  several other stakeholders have an interest in how the federal government  carries out its real property acquisition, management, and disposal  practices. These stakeholders include foreign governments; state and local  governments; business interests in the communities where the assets are  located; private sector construction and leasing firms; historic  preservation organizations; various advocacy groups; and the public in  general, which often views the facilities as the physical face of the federal  government in local communities. As a result of competing stakeholder  interests, decisions about real property often do not reflect the most cost- effective or efficient alternative, which would be in the interest of the  agency or the government as a whole, but instead reflect other priorities.  In particular, this situation often arises when the federal government  attempts to consolidate facilities or otherwise dispose of unneeded assets.
Some major real property-holding agencies reported that competing local,  state, and political interests often impede their ability to make real  property management decisions, such as decisions about disposing of  unneeded property and acquiring real property. For example, VA officials  reported that disposal is often not an option for most properties because  of political stakeholders and constituencies, including historic building  advocates or local communities that want to maintain their relationship  with VA. In addition, officials said that attaining the funding to follow  through on CARES decisions is a challenge because of competing  priorities. Other agencies cited similar challenges related to competing  stakeholder interests.
Interior officials reported that the department faces significant challenges  in balancing the needs and concerns of local and state governments,  historical preservation offices, political interests, and others, particularly  when coupled with budget constraints. If the interests of competing  stakeholders are not appropriately addressed early in the planning stage,  they can adversely affect the cost, schedule and scope of a project. In  addition, according to Interior officials, unrequested earmarks can  circumvent careful planning and divert resources from more critical  needs, such as reducing the maintenance backlog.
According to State officials, property disposal is affected by multiple  competing parties including host nations, local governments, historic  preservation groups, and political groups. Often, host governments may  have the authority to approve property sales and purchases and also may  assess large transfer fees or delay the issuance of documents.
Historically, proposed post office closures in urban, suburban, or rural  areas, and changes to postal infrastructure by USPS, have provoked  intense opposition because post offices are part of American culture and  business and are viewed as critical to the economic viability of small  towns and central business districts. Members of Congress and other  stakeholders have often intervened in the past when USPS attempted to  close post offices or consolidate facilities. Also, a variety of factors enter  into decisions about managing USPS facilities, which include different  statutory requirements, depending upon the type of facility. For example,  in 1976, Congress amended the Postal Reorganization Act and established  specific requirements for USPS when planning to close a post office,  including that USPS must consider the effects on the community served,  the employees of the facility, and economic savings to USPS that would  result from the closure, as well as provide notice to customers. This  amendment sought to involve communities in decisions, which would help  to ensure that these decisions were made fairly and consistently. Recently,  concerns have been raised about the adequacy of USPS’s communication  with affected communities as it implements changes to its mail processing  network to reduce excess capacity. In December 2006, legislation was  enacted that encouraged USPS to move forward to streamline its  distribution network, but it also required USPS to provide adequate public  notice to affected communities. We are currently reviewing USPS’s  efforts related to realigning its mail processing network and will be issuing  a report on the results of that review.
Despite its significance, the obstacle of competing stakeholder interests  has gone unaddressed in the real property initiative. It is important to note  that there is precedent for lessening the impact of competing stakeholder  interests. BRAC decisions, by design, are intended to be removed from the  political process, and Congress approves BRAC decisions as a whole.  OMB staff said they recognize the significance of the obstacle and told us  that FRPC would begin to address the issue after the inventory is  established and other reforms are initiated. Without addressing this issue,  however, less than optimal decisions that are not based on what is best for  the government as a whole may continue.
section_title: Legal and Budgetary Limitations Continue to Hamper Agencies’ Disposal Efforts
paragraphs: As discussed earlier, budgetary limitations that hinder agencies’ ability to  fund ownership lead agencies to rely on costly leased space to meet new  space needs. Furthermore, the administrative complexity and costs of  disposing of federal property continue to hamper some agencies’ efforts to  address their excess and underutilized real property problems. Federal  agencies are required by law to assess and pay for any environmental  cleanup that may be needed before disposing of a property—a process  that may require years of study and result in significant costs. As valuable  as these legal requirements are, their administrative complexity and the  associated costs of complying with them create disincentives to the  disposal of excess property.
We reported that VA, like all federal agencies, must comply with federal  laws and regulations governing property disposal that are intended, for  example, to protect subsequent users of the property from environmental  hazards and to preserve historically significant sites. We have reported  that some VA managers have retained excess property because the  administrative complexity and costs of complying with these requirements  were disincentives to disposal.
Energy officials reported that although an aggressive demolition and  decommissioning program reduced the agency’s footprint by 9 million  square feet from fiscal year 2002 through fiscal year 2005, 16 percent of  their inventory remains excess or underutilized. According to Energy  officials, the department understands the need to screen excess real  property under the McKinney Act and follows this requirement. But,  officials noted that Energy would benefit from streamlining the process  because much of the portfolio being disposed of has no remaining useful  life and is most often located within a secure compound. In these cases,  demolition is the only viable method of disposition, and screening  requirements needlessly slow the process.  Additionally, some agencies  reported that the costs of cleanup and demolition sometimes exceed the  costs of continuing to maintain a property that has been shut down. In  such cases, it can be more beneficial economically to retain the asset in a  shut-down status.
GSA officials noted that GSA is challenged to balance funding for assets  that GSA needs to retain, such as those that will recapture vacant space,  with funding for the demolition of underutilized properties that remain  vacant until they can be torn down or environmental remediation of assets  prior to disposal.
Interior officials reported that the department continues to face several  challenges in disposing of excess or underutilized real property, including  competing priorities for funding that includes costs to cover  environmental analysis and cleanup of hazardous materials, or other costs  associated with disposal, such as deconstruction, demolition, or off-site  removal. Interior officials further noted that if the department was allowed  to retain proceeds from the sale of assets, it would facilitate the process by  off-setting the cost of disposal.
State officials indicated that owning and disposing of properties in an  international environment presents challenges, including risks associated  with normal economic and real estate conditions. Depending on the law of  the host country, the host government may have the authority to make  decisions that affect the department’s disposal plans. Also, State officials  said that, while not common, congressional interest can sometimes lead to  further study into the retention of unneeded real property.
Given that agencies are required to fund the costs of preparing property  for disposal, the inability to retain any of the proceeds acts as an  additional disincentive. It seems reasonable to allow agencies to retain  enough of the proceeds to recoup the costs of disposal, and it may make  sense to permit agencies to retain additional proceeds for reinvestment in  real property where a need exists. However, in considering whether to  allow federal agencies to retain proceeds from real property transactions,  it is important for Congress to ensure that it maintains appropriate control  and oversight over these funds, including the ability to redistribute the  funds to accommodate changing needs.
section_title: Need for Improved Capital Planning Still Exists
paragraphs: Over the years, we have reported that prudent capital planning can help  agencies to make the most of limited resources, and failure to make timely  and effective capital acquisitions can result in acquisitions that cost more  than anticipated, fall behind schedule, and fail to meet mission needs and  goals. In addition, Congress and OMB have acknowledged the need to  improve federal decision making regarding capital investment. A number  of laws enacted in the 1990s placed increased emphasis on improving  capital decision-making practices and OMB’s Capital Programming  Guide and its revisions to Circular A-11 have attempted to address the  government’s shortcomings in this area.
Our prior work assessing agencies’ implementation of the planning phase  principles in OMB’s Capital Programming Guide and our Executive  Guide found that some agencies’ practices did not fully conform to the  OMB principles and agencies’ implementation of capital planning  principles was mixed. Specifically, while agencies’ capital planning  processes generally linked to their strategic goals and objectives and most  of the agencies we reviewed had formal processes for ranking and  selecting proposed capital investments, the agencies have had limited  success with using agencywide asset inventory systems and data on asset  condition to identify performance gaps. In addition, we found that none of  the agencies had developed a comprehensive, agencywide, long-term  capital investment plan. The agency capital investment plan is intended to  explain the background for capital decisions and should include a baseline  assessment of agency needs that examines existing assets and identifies  gaps and help define an agency’s long-term investment decisions. In  January 2004, we recommended that OMB begin to require that agencies  submit long-term capital plans to OMB. Since that report was issued, VA— which was one of our initial case study agencies—issued its first 5-year  capital plan. However, recent work in this area showed that although OMB  now encourages such plans, it does not collect them, and the agencies that  were included in this review did not have agencywide long-term capital  investment plans.
Shortcomings in the capital planning and decision-making area have clear  implications for the administration’s real property initiative. Real property  is one of the major types of capital assets that agencies acquire. Other  capital assets include information technology, major equipment, and  intellectual property. OMB staff said that agency asset management plans  are supposed to align with the capital plans but that OMB does not assess  whether the plans are in alignment. We found that guidance for the asset  management plans does not discuss how these plans should be linked with  agencies’ broader capital planning efforts outlined in the Capital  Programming Guide. In fact, OMB’s asset management plan sample,  referred to as the “shelf document,” which agencies use to develop the  asset management plans, makes no reference to the guide. Without a clear  linkage or crosswalk between the guidance for the two documents, there  is less assurance that agencies will link them. Furthermore, there could be  uncertainty with regard to how real property goals specified in the asset  management plans relate to longer term capital plans.
section_title: Conclusions
paragraphs: The executive order on real property management and the addition of real  property to the President’s Management Agenda (PMA) have provided a  good foundation for strategically managing federal real property and  addressing long-standing problems. These efforts directly address the  concerns we raised in past high-risk reports about the lack of a  governmentwide focus on real property management problems and  generally constitute what we envisioned as a transformation strategy for  this area. However, these efforts are in the early stages of implementation,  and the problems that led to the high-risk designation—excess property,  repair backlogs, data issues, reliance on costly leasing, and security  challenges—still exist. As a result, this area remains high risk until  agencies show significant results in eliminating the problems by, for  example, reducing inventories of excess facilities and making headway in  addressing the repair backlog. Furthermore, the current efforts lack an  overall framework for helping agencies ensure the validity of real property  data in FRPP and do not adequately address the costliness of long-term  leases and security challenges. While the administration has taken several  steps to overcome some obstacles in the real property area, the obstacle  posed by competing stakeholder interests has gone largely unaddressed,  and the linkage between the real property initiative and broader agency  capital planning efforts is not clear. Focusing on these additional areas  could help ensure that the problems and obstacles are addressed.
section_title: Recommendations for Executive Action
paragraphs: We are making three recommendations to OMB’s Deputy Director for  Management. We recommend that the Deputy Director, in conjunction  with FRPC, take the following three actions:    Develop a framework that agencies can use to better ensure the validity  and usefulness of key real property data in the FRPP. At a minimum, the  framework would suggest standards for frequency of validation methods,  error tolerance, and reporting on reliability;   Develop an action plan for how the FRPC will address key problems,  including the continued reliance on costly leasing in cases where  ownership is more cost effective over the long term, the challenges of  securing real property assets, and reducing the effect of competing  stakeholder interests on businesslike outcomes in real property decisions;  and   Establish a clearer link or crosswalk between agencies’ efforts under the  real property initiative and broader capital planning guidance.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to OMB, DOD, DHS, Energy, GSA,  Interior, NASA, State, USPS, and VA for review and comment. OMB agreed  with the report and concurred with its recommendations. OMB also  provided technical clarifications, which we incorporated, where  appropriate. OMB’s comments are discussed in more detail below. OMB’s  letter is contained in appendix IV without the enclosure that contained the  technical clarifications. Comments we received from GSA, NASA, Interior,  DHS, Energy, State, and VA are contained in appendixes V through XI,  respectively.  VA, Energy, DHS, GSA, and NASA generally agreed with the  report.  VA provided technical clarifications and expanded comments in an  enclosure that are discussed below.  Interior, DHS, and Energy also  provided technical clarifications, which we incorporated, where  appropriate, but did not include in the appendixes.  Also, DHS provided  information in its letter that identified activities it was undertaking that  relate to our recommendations.  State, DOD, Interior, and USPS did not  state whether they agreed or disagreed with the report’s overall  conclusions and recommendations.  However, State provided additional  information for the report and Interior, DOD, and USPS provided technical  clarifications, which we incorporated, where appropriate.  State’s  comments are also discussed in more detail below.
subsections: section_title: Evaluation of OMB Comments
paragraphs: In general, OMB agreed with our assessment that challenges remain in  meeting the goal of improving federal real property management. OMB  said that it is continuing to work to ensure that governmentwide efforts  will ultimately lead to improved asset management, the disposal of  unneeded federal real property, and the removal of federal real property  from our high-risk list. OMB indicated that significant progress has been  made in four main areas, including (1) all agencies have established asset  management plans, addressing acquisition, operations, and maintenance,  and disposition; (2) the FRPC has established a standard catalog and  identifies 23 data elements to be captured on all assets in the federal  portfolio; (3) agencies have captured and reported the required  constructed asset level inventory and performance data to the FRPP  governmentwide database; and (4) agencies now have reliable  performance information to assist them in identifying underperforming  assets suitable for investment or disposition. OMB reported that tools are  now in place for improved asset management and that this has led to  results that include data on more than 1.2 million assets and more than  $4.2 billion in disposals completed since the real property initiative was  established in 2004.
OMB agreed with our three recommendations and provided additional  information relating to them. Regarding the first recommendation to  develop a framework that agencies can use to better ensure the validity  and usefulness of key real property data in the FRPP, OMB reported that it  will work with the FRPC to take steps to establish and implement a  framework. OMB agreed that establishing a framework to ensure the  validity and usefulness of key real property data, especially performance  data, will lead to greater reliability of key data. According to OMB, the  framework that it will pursue will identify acceptable validation methods,  frequency, error tolerance, reliability, and processes for reporting  corrective actions.
For the second recommendation to develop an action plan for how the  FRPC will address key problems, OMB said that the FRPC is currently  drafting a strategic plan for addressing long-standing issues such as the  continued reliance on costly leasing in cases where ownership is more  cost effective over the long-term, the challenge of securing real property  assets, and reducing the effect of competing stakeholder interests on  businesslike outcomes in real property decisions. OMB agreed that it is  important to build upon the substantial progress that has been realized by  both the FRPC and the federal real property community in addressing the  identified areas for improvement. OMB said that it will share the strategic  plan with us once it is in place and will discuss strategies for ensuring  successful implementation. For our third recommendation to establish a  clearer link or crosswalk between agencies’ efforts under the real property  initiative and broader capital planning guidance, OMB stated that as  agencies update their asset management plans and incorporate updated  guidance on capital planning, progressive improvement in this area will be  realized. OMB also provided technical comments, which we incorporated  into the final report, where appropriate.
section_title: Evaluation of State Comments
paragraphs: In commenting on our related work on long-term capital investment plans,  State said that its long-range overseas buildings plan qualifies as a long- term capital plan. We agree that State’s long-range overseas building plan  contains elements that qualify as a long-term capital plan for OBO.  However, our statement that agencies lacked such plans refers to the  Offices of Science and Environmental Management within DOE and U.S.  Customs and Border Protection within DHS, and not to State. State asked  us to change text related to funding backlogs and reliance on leasing to  emphasize the relative importance of budgetary constraints in resolving  maintenance backlogs. We agree that the legal and budgetary limitations  are obstacles, and we discussed this extensively in the draft. We also relate  these limitations to more than just the challenge of funding real property  needs, but also to the policy environment these limitations create. As such,  we feel that the effect of legal and budgetary limitations as underlying  obstacles that exacerbate backlogs is accurately portrayed and did not  make the changes to the report that State requested. State requested that  the report acknowledge the limiting effect of scoring rules on lease- purchase agreements. While it is true that the report focuses on the  scoring of operating leases, it also discusses the tendency of agencies to  choose operating leases over ownership options (such as lease purchases)  due to the way that operating leases are scored.
State also pointed out that there are maintenance and repair costs  associated with property ownership, while operating leases typically hold  landlords responsible for maintenance and repair costs. As stated  previously in this report, we did not analyze whether the leasing activity at  these agencies, either in the aggregate or for individual leases, resulted in  longer-term costs than if these agencies had pursued ownership. For short- term needs, leasing likely makes economic sense for the government in  many cases. However, our past work has shown that, generally speaking,  for long-term space needs, leasing is more costly over time than direct  ownership of these assets. State believed our report should have more  emphasis on maintenance and repair costs associated with trade-offs  between choosing operating leases or property ownership options. We  agree that maintenance and repair costs are key factors and believe that  our draft accurately explained the importance of them. Lastly, State  wanted us to remove a reference to congressional interest in property  disposals so that it would not be misinterpreted by Congress. We chose to  clarify the statement in the report to more accurately represent State’s  response during our review.
section_title: Evaluation of VA Comments
paragraphs: VA agreed with our general conclusion that progress has been made  toward addressing real property problems and that there is still work to be  done. However, VA stated that its progress is greater than we portrayed in  the draft and suggested several examples of its initiatives. For example, in  the area of data validation, VA stated that VA’s Capital Asset Management  System provides a single means to validate data from multiple source  systems. In the area of unneeded assets, VA stated that it has disposed of  156 buildings since fiscal year 2004 and 146 buildings are planned for  disposal in fiscal year 2007 and fiscal year 2008. VA further stated that it is  implementing a sustainment model and investing in sustainment needs,  among other things, to address its maintenance and repair backlog. Lastly,  VA stated that it has developed an assessment methodology for its  facilities, assessed those facilities considered most mission-critical, and  requested funding for physical security enhancements to address the  physical security of its facilities. Although our report was largely based on  the information VA provided to us during the time of our review, we have  included information on these initiatives and incorporated other technical  comments that VA provided, where appropriate.
Regarding our discussion of the government’s over-reliance on costly  operating leases, VA stated that it relies on operating leases because of its  need for a more flexible facility infrastructure and that VA’s mission has  driven its increased use of this type of leasing. VA said that it is true that it  has increased its reliance on leasing to meet space needs, but that the  majority of its leases are outpatient or store-front facilities. VA said that it  does not use these leases because they look cheaper in any given year,  asserting that our draft made this conclusion. In fact, our report did not  state that VA enters into operating leases for this reason. Instead, our  report states that operating leases have become an attractive option, in  part because they generally “look cheaper” in any given year, even though  they are generally more costly over time. This discussion in the report  related to leasing issues in general and was not specific to VA.  Furthermore, we included information in the report about VA’s views on  leasing. That is, we stated that VA officials reported needing a more  flexible facility infrastructure to accommodate changes in medical  technology and shifts in demographic data. Finally, we stated that for  short-term needs, leasing likely makes economic sense for the government  in many cases.
We are sending copies of this report to the Director and Deputy Director  of OMB; Secretaries of DOD, DHS, Energy, Interior, State, and VA; the  Administrators of GSA, and NASA; and the Postmaster General of the  United States. Additional copies will be sent to interested congressional  committees. We will also make copies available to others upon request,  and the report will be available at no charge on the GAO Web site at  http://www.gao.gov.
If you have any questions about this report, please contact me at (202) 512- 2834 or at goldsteinm@gao.gov. Contact points for our Offices 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 XII.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to determine (1) what progress the administration and  major real property-holding agencies have made in addressing long- standing problems and (2) what problems and obstacles, if any, remain to  be addressed. For the purpose of this review, we identified the nine real  property-holding agencies that are largest in terms of owned and leased  space. These agencies are the Departments of Defense (DOD), Energy  (Energy), Homeland Security (DHS), the Interior (Interior), State (State),  and Veterans Affairs (VA); the General Services Administration (GSA); the  National Aeronautics and Space Administration (NASA), and the United  States Postal Service (USPS). Together, these agencies hold a majority of  the federal government’s real property assets, totaling 93 percent of the  total square footage owned and leased by the federal government. We also  interviewed officials from the Office of Management and Budget (OMB)  because it oversees the implementation of Executive Order 13327, which  addresses federal real property management. Our January 2003 high-risk  work identified five long-standing problems in federal real property  management, including excess and underutilized property, deteriorating  facilities, reliance on costly leasing, and unreliable real property data.  Federal agencies were also facing many challenges in protecting their  facilities against the threat of terrorism.
To determine what progress these nine major real property-holding  agencies have made in addressing the five long-standing problems in  managing federal real property assets, we asked knowledgeable real  property officials at each of the nine agencies to provide written responses  to a standard list of questions. These questions addressed what steps, if  any, the agencies have taken to address the five problems and to  implement the requirements of Executive Order 13327, which established  guidelines for improving executive branch agencies’ real property  management; created a new organization, the Federal Real Property  Council (FRPC); and supported a presidential initiative, the President’s  Management Agenda (PMA) real property initiative. We analyzed the  written responses to our questions and reviewed supporting  documentation provided by agency officials. It is important to note that  although USPS is a major real property-holding agency, it is not subject to  Executive Order 13327. The list of questions administered to USPS  addressed the long-standing problems and real property management  efforts related to the requirements of the executive order.
In addition to reviewing the written responses to our questions, for each  major real property-holding agency, we obtained and reviewed available  information and related documentation on the agency’s plans to address  the long-standing problems in managing its federal real property assets,  including its asset management plans and related real property policies  and reports. We also reviewed a number of our previous reports and  pertinent work by agency Inspectors General and by the Congressional  Research Service on real property management at the major real property- holding agencies. Finally, we reviewed and analyzed federal laws relating  to real property for the major real property-holding agencies and USPS.
Because the OMB is responsible for overseeing the implementation of  Executive Order 13327, we reviewed applicable federal laws and  authorities and interviewed knowledgeable OMB staff to obtain  information on OMB’s oversight role—including FRPC activities—and  OMB’s assessment of the progress made by major real property-holding  agencies in implementing the executive order. OMB staff also provided us  with information on OMB’s guidance for implementing the PMA real  property initiative and related reports. In addition, we reviewed the PMA’s  real property initiative standards and scorecards developed by OMB to  obtain additional information on each agency’s implementation of the  executive order and governmentwide and individual agency efforts related  to real property management.
Agency officials and the representatives of stakeholder organizations  provided much of the data and other information used in this report. We  relied largely on agency responses to our questions to assess progress,  performed an assessment of the reliability of the data they provided, and  determined that the data were adequate for the purpose of our review.  When officials provided their views and opinions as spokespersons for  their organizations, we corroborated the information with other officials.  We prepared this report under the Comptroller General’s authority to  conduct evaluations on his own initiative as part of a continued effort to  assist Congress with oversight of real property issues. We conducted our  work from April 2006 through February 2007 in accordance with generally  accepted government auditing standards.
section_title: Appendix II: Selected Enhanced Real Property Authorities of Major Real Property- Holding Agencies
subsections: section_title: Leases of nonexcess property of military departments
paragraphs: The Secretary of a military department is authorized to lease real property under the  control of the department that is not considered to be excess property if the Secretary  considers the lease to be advantageous to the United States. The term of the lease  may be up to 5 years unless the Secretary determines the term should be longer to  promote the national defense or for the public interest. Lease payments shall be in cash  or in-kind consideration for an amount not less than fair market value. In-kind  consideration includes maintenance, alteration, protection, environmental restoration,  construction of new facilities, and providing facilities, facilities operation support, or  other services on the leased property.
Proceeds from leases are deposited in a special account in the Treasury and are  available to the Secretary of that military department to the extent provided in an  appropriation act. At least 50 percent of proceeds can be used for maintenance,  protection, alteration, environmental restoration, construction of new facilities, or  facilities operation support at the military installation where proceeds were derived.  Proceeds received from leases entered into at military installations to be closed or  realigned under a base closure law pending the final disposition of real property are  deposited in special DOD base closure accounts.
The Secretary shall use the funds received as rent that the Secretary considers  necessary to cover administrative expenses of the lease, maintenance, and repair of  the leased property, or environmental restoration activities at the facility where the  leased property is located to the extent provided in an appropriation act. [42 U.S.C. §  7256]  The Administrator of GSA, notwithstanding any other provision of law, is authorized to  convey by sale, lease, exchange or otherwise, including through leaseback  arrangements, real property, or interests therein.
The Administrator of GSA is authorized to retain net proceeds from the disposition of  real property in its Federal Buildings Fund (FBF), which are to be used for GSA real  property capital needs to the extent provided in an appropriation act.
The Administrator of GSA is authorized to enter into leases with private entities for the  development of the Southeast Federal Center. Agreements shall be for fair  consideration and may include in-kind consideration such as construction, repair,  remodeling, or maintenance of federal property, and providing office, storage, or other  usable space.
The Administrator of GSA is authorized to retain from the proceeds amounts necessary  to recover the expenses incurred with respect to the property. Net proceeds are  deposited in FBF and available to the extent provided in an appropriation act.
The Administrator of GSA is authorized to sell the Middle River Depot at Middle River,  Maryland.
The proceeds of sale from the Middle River Depot are to be credited to FBF for capital  activities and available to the extent provided in an appropriation act.
The Secretary of the Interior is authorized to enter into leases with any person or  governmental entity for the use of buildings and associated property administered as  part of NPS. Rental payments shall be for the fair market value, but can be adjusted by  the Secretary for amounts spent by the lessee for such expenses as preservation,  maintenance, restoration, and improvement of the property.
Rental payments are deposited into a special account in the Treasury where the  availability of funds is not subject to an appropriation act. Funds are available for  infrastructure needs such as facility refurbishment, repair, and replacement, and for  maintenance of the leased buildings and associated properties.
The Secretary of the Interior is authorized to lease federal land and interests in land for  up to 50 years for the construction of field employee quarters.
The proceeds from any lease are retained by NPS and deposited into a special fund for  maintenance and operation of quarters.
Established the Presidio Trust, a wholly owned government corporation, to manage the  Presidio in the Golden Gate National Recreation Area through a public/private  partnership. Authorized the Presidio Trust to enter into leases with any person, firm,  association, organization, corporation or governmental entity necessary to carry out its  authorized activities. Authorized the Presidio Trust to establish procedures for lease  agreements for the use and occupancy of Presidio facilities.
All proceeds and other revenues received by the Presidio Trust are retained by the  Trust and are available to the Trust, without further appropriation, for such expenses as  administration, preservation, restoration, maintenance, or improvement of Presidio  properties.
The Administrator of NASA is authorized to enter into lease agreements with any  person or entity, including federal, state, or local governments, with regard to any real  property at two NASA centers. The lease shall be for fair market value and payments  may be in cash or in-kind consideration such as construction, maintenance, or  improvement of facilities, or providing services to NASA such as launch and payload  processing services.
Cash consideration received for the lease is to be used to cover the full costs to NASA  in connection with the lease. Any remaining cash shall be deposited in a capital asset  account available for maintenance, capital revitalization, and improvements of real  property assets at the two NASA centers.
The Administrator of NASA is authorized to sell its property at the Camp Parks Military  Reservation in Alameda, California.
The Administrator of NASA is authorized to retain the proceeds from the Camp Parks  Military Reservation in Alameda, California.
The Secretary of State is authorized to retain proceeds from the disposition of  properties in foreign countries, which may be used to acquire, construct, and maintain  properties overseas.
USPS is authorized to acquire, in any lawful manner, real property or any interest  therein, as it deems necessary and to lease, or otherwise dispose of, property or any  interest therein.
USPS is authorized to lease and maintain buildings, facilities, equipment, and other  improvements on any property owned or controlled by it.
USPS is authorized to keep the proceeds from its real-estate transactions. [39 U.S.C. §  2401]  The Secretary of VA is authorized to enter into leases for up to 75 years with public and  private entities for underutilized and excess land that is under the Secretary’s  jurisdiction or control. The EUL shall be for fair consideration, and lease payments may  be made for in-kind consideration such as construction, repair, or remodeling of  department facilities; providing office, storage, or other usable space; and providing  goods or services of benefit to the department. The authority to enter into EUL  terminates on December 31, 2011.
Expenses incurred by the Secretary of VA in connection with EUL will be deducted from  the proceeds of the lease and may be used to reimburse the account from which the  funds were used to pay such expenses. The proceeds can be used for any expenses  incurred in the development of additional EUL. Remaining funds shall be deposited in  the VA Medical Care Collections Fund.
If the Secretary of VA determines that during the term of the EUL that the property is no  longer needed, the Secretary is authorized to initiate an action to dispose of the  property.
Funds received by VA from a disposal of EUL property shall be deposited into the VA  Capital Asset Fund and may be used for property transfer costs such as demolition,  environmental remediation, and maintenance and repair to the extent provided in an  appropriation act.
Funds received by VA from a transfer of non-EUL property shall be deposited into the  VA Capital Asset Fund and may be used for property transfer costs such as demolition,  environmental remediation, and maintenance and repair to the extent provided in an  appropriation act.
The Secretary is authorized to acquire land or interests in land for a medical facility site  by purchase, lease, condemnation, donation, or exchange.
This list of real property authorities is not intended to be all inclusive. For purposes of this appendix,  we have provided some examples of an agency’s authority relating to real property such as enhanced  use leasing authority or conveyance authority.
For the Department of Defense, we have limited our description to its authority relating to enhanced  use leasing. Additionally, while DHS was one of the nine agencies we reviewed, we did not include it  in this appendix since it was not provided any specific real property authority under the Homeland  Security Act of 2002.
section_title: Appendix III: FRPC Inventory Data Elements and Descriptions
subsections: section_title: Data element name
paragraphs: Identifies the asset as one of the following categories of real property:  land; building; or structure.
Indicates the asset’s predominant use in one of the following categories:  land; building; or structure.
Identifies a real property as being owned by the federal government,  leased by the federal government (i.e., as lessee), or otherwise managed  by the federal government.
Reflects the predominant physical/operational status of the asset as  active, inactive, or excess.
Identifies owned and leased property as National Historic Landmark  (NHL); National Register Listed (NRL); National Register Listed; National  Register Eligible; Noncontributing element of NHL/NRL district; Not  evaluated; Evaluated, Not Historic.
Refers to the federal government agency/bureau reporting the property to  the FRPC Inventory database.
Refers to the predominant federal government agency/bureau (or other  nonfederal government entity) occupying the property.
Refers to the size of the real property asset according to appropriate units  of measure. The unit of measure used for the three real property types is  as follows:    For land, the unit of measure is acreage and the land is designated as  either rural acres or urban acres.
For buildings, the unit of measure is area in square feet and designated  as gross square feet (GSF).
For structures, a structure unit of measure table is provided that  contains reporting guidelines for the unit of measure for specific types  of structures.
Captures the rate of utilization for a building—that is, the percentage of  space (square footage) used for agency purposes.    on a scale from 0 to 100;    by building type—office, warehouse, hospital, laboratory, and housing—   by category—overutilized, utilized, underutilized, or not utilized— depending on where the utilization rate falls within percentage ranges  defined for each building type.
Defined as the functional replacement value; the cost of replacing the  existing constructed asset at today’s standards. (value = unit x unit cost x  overhead factor)
Provides a general measure of a building or structure’s condition at a  specific point in time.    as the ratio of repair needs to plant replacement value (PRV); (CI = (1 -  $repair needs/$PRV) x 100.    “Repair needs” is the amount necessary to restore a building to a  condition substantially equivalent to its original condition    Agencies and departments will initially use an existing process to    Agencies will later refine and standardize their definition of repair  needs.
PRV is the cost of replacing an existing building so that it meets today’s  standards.
The higher the CI, the better the condition of the building  for an entire agency or department,    on a scale from 0 to 100 percent.
Agencies and departments initially set target CI levels in consultation with  OMB.
The value a building brings to an agency’s performance of its mission as  determined by the agency    mission critical – without the building or land, the agency’s mission is    mission dependent, not critical – falls between mission critical and not    not mission dependent – without the building or land, the agency’s  mission is unaffected.    recurring maintenance and repairs;    utilities (plant operating and energy purchase costs);    cleaning or janitorial services (pest control, refuse collection and  disposal, including recycling operations); and    roads/grounds (grounds maintenance, landscaping, and snow and ice  removal from roads, piers and airfields).
Will be reported annually.
Refers to the street/delivery address for the asset or the latitude and  longitude coordinates. Either of the following will be provided for the  constructed asset or parcel of land: street address; or latitude and  longitude (if no security concerns).
A code that is unique to an item of real property that will allow for linkages  to other information systems. The real property unique identifier is  assigned by the reporting agency and can contain up to 24 alpha-numeric  digits.
Provides the four-digit Geo Location Codes (GLC) for the city or town  associated with the reported main location in which the land parcel,  building, or structure is located.
Provides the two-digit GLC for the state associated with the reported main  location in which the land parcel, building, or structure is located.
Provides the three-digit GLC for the country associated with the reported  main location in which the land parcel, building, or structure is located.
Provides the three-digit GLC for the county associated with the reported  main location in which the land parcel, building, or structure is located.
Provides the value for the congressional district associated with the  reported main location in which the land parcel, building, or structure is  located.
Provides the five-digit ZIP code associated with the reported main  location in which the land parcel, building, or structure is located and, if  known, the additional four-digit zip code suffix.
Installation/Subinstallation identifier  Headquarters installations – Land, buildings, other structures, and  facilities, or any combination of these. Examples of installations are a  national forest, national park, hydroelectric project, office building,  warehouse building, border station, base, post, camp, or an unimproved  site. Provide a 24-digit alpha-numeric code for the installation ID assigned  by the reporting agency.
Subinstallation–Part of an installation identified by a different geographic  location code than that of the headquarters installation. An installation  must be separated into subinstallations (and reported separately) when  the installation is located in more than one state or county. However, an  agency may elect to separate an installation into subinstallations, even if  the installation is not located in more than one state or county. Provide a  six-digit alpha-numeric code for the subinstallation ID assigned by  reporting agency.
Refers to limitations on the use of real property. Provides one or more of  the following values for each building, structure, and parcel of land:  environmental restrictions (cleanup-based restrictions, etc.); natural  resource restrictions (endangered species, sensitive habitats, floodplains,  etc.); cultural resource restrictions (archeological, historic, Native  American resources (except those excluded by EO 13007, section 304 of  the National Historical Preservation Act), etc.); developmental  (improvements) restrictions; reversionary clauses from deed; zoning  restrictions; easements (including access for maintenance rights, etc.);  rights-of-way; mineral interests; water rights; air rights; other;  nonapplicable.
section_title: Appendix IV: Comments from the Office of Management and Budget
section_title: Appendix V: Comments from the General Services Administration
section_title: Appendix VI: Comments from the National Aeronautics and Space Administration
section_title: Appendix VII: Comments from the Department of the Interior
section_title: Appendix VIII: Comments from the Department of Homeland Security
section_title: Appendix IX: Comments from the Department of Energy
section_title: Appendix X: Comments from the Department of State
section_title: Appendix XI: Comments from the Department of Veterans Affairs
section_title: Appendix XII: GAO Contacts and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Janice Ceperich, Anne Izod,  Susan Michal-Smith, and David Sausville made key contributions to this  report.
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