H.R. 3947 would require the GSA administrator to take a leadership role, in consultation with the heads of other federal agencies and the director of the Office of Management and Budget (OMB), in establishing and maintaining a current set of real property asset management principles. We support this provision. Agencies would use these principles as guidance in making decisions about property planning, acquisition, use, maintenance, and disposal. The bill would also require the GSA administrator, in consultation with the heads of other landholding agencies, to establish performance measures to determine the effectiveness of federal real property management. Performance measures could address such areas as operating costs, security, occupancy rates, and tenant satisfaction. The performance measures should enable Congress and heads of federal agencies to track progress in the achievement of property management objectives on a governmentwide basis. This should allow Congress and the agencies to compare federal agencies’ performance against the performance of private sector and other public sector agencies. In addition, these provisions would emphasize the importance of effectively managing the government’s multibillion-dollar portfolio of federal real property assets, help facilitate a uniform approach to asset management, and assist federal managers in monitoring progress and measuring results. Another important provision in H.R. 3947, which we support, is the establishment of a senior real property officer in each landholding agency that emphasizes the importance of having someone with real property experience oversee agencies’ real property assets. This bill includes qualification requirements for the senior real property officer, such as real estate portfolio or facilities management experience. The senior real property officer would continually monitor real property assets to ensure that they are being used and invested in a way that supports the goals and objectives of the agency’s strategic plan. This provision would make federal agencies with real property holdings accountable for the management and oversight of their real property assets. One important feature of having senior real property officers is that they can be held accountable for providing reliable, useful, and timely data on their agencies’ real property assets to GSA for inclusion into its worldwide inventory. As you know, using data from over 30 real property-holding agencies, GSA maintains a governmentwide real property database commonly referred to as the worldwide inventory. This database is the only central source of descriptive data of governmentwide real property assets. As we found during our recently completed review of this inventory, which I will discuss later in more detail, decisionmakers, including Congress and OMB, currently do not have access to quality data for strategic management and budgeting purposes. Attempting to strategically manage and budget for the government’s vast and diverse portfolio without quality data puts the government’s real property operations at risk and can be likened to navigating the oceans of the world without the benefit of oceanographic charts. Although the senior real property officers would be responsible for developing their agencies’ real property asset management plans, there also is a need for guidance in establishing standards for the plans so they are developed in a consistent manner. The adequacy of these plans will play a key role in improving real property management and oversight throughout the government. Consequently, this would provide GSA with an opportunity, in its role as the government’s real property manager, to develop and provide specific guidance for agencies to use in preparing their real property management plans. This guidance should describe the types of analyses to be included in the plans to support planned actions to be taken and conclusions reached in the plans. For example, the plan should include a discussion of the benefits to the agency or government that would result from the proposed actions, and it should provide an analysis of the asset performance necessary to deliver the required service outcomes over the duration of the asset strategy-planning period. We believe such guidance would help ensure that the strategic actions that agencies plan to take relative to their properties will best meet the intended service delivery outcomes defined in their strategic plans. We envision that the senior real property officers would work together with three other senior agency officials—the chief financial officer (CFO), the chief information officer (CIO), and the head of human resources—to integrate the strategic planning and management of facilities, financial management, technology, and human capital to ensure that the agencies’ asset management plans are linked to the agencies’ overall missions and strategic plans. Given the significant responsibilities foreseen for senior real property officers, we believe that in addition to the qualification requirements specified in the bill, the officers should also have a recognized professional designation or certification, such as certified facility manager or real property administrator. H.R. 3947 would require the GSA administrator to establish and maintain a single, comprehensive, and descriptive inventory database of all real property interests under the custody and control of each federal agency. Subject to certain limitations, and as deemed appropriate by the administrator, portions of this database would be available to interested stakeholders and the public. We believe that a comprehensive, reliable listing of federal properties, as envisioned by H.R. 3947, is essential for the government to oversee and manage its large portfolio of federal assets. Lack of good data makes it difficult for the government to select the optimal level of capital spending needed for the acquisition and maintenance of real property. Inadequate data also impede the government’s ability to identify real property assets that are no longer needed or cost effective to retain. As I previously mentioned, GSA currently maintains a worldwide inventory of real property holdings. This week we reported that GSA’s worldwide inventory of federal real property contained data that were unreliable and of limited usefulness. Worldwide inventory data for 12 of the 31 reporting agencies, which held an estimated 32 percent of the inventory in terms of building square footage, were not current in the most recent inventory report. In addition, the inventory did not contain key data–such as data related to space utilization, facility condition, historical significance, security, and facility age–that would be useful for budgeting purposes and the strategic management of these assets. Given this, decisionmakers, including Congress and OMB, do not have access to quality data on what real property assets the government owns; their value; whether the assets are being used efficiently; and what costs are involved in preserving, protecting, and investing in them. Without quality data, decisionmakers have difficulty strategically managing and budgeting for such significant real property management issues as deteriorating federal buildings, disposal of underutilized and unneeded properties, and the protection of people and facilities. Consequently, we recommended, among other things, that the administrator of GSA exercise strong leadership and work with Congress, OMB, the Department of the Treasury (Treasury), and real property- holding agencies to design a cost-effective strategy for developing and implementing a reliable, timely, and useful governmentwide real property database. GSA agreed with the report’s recommendations. Because there is a concern that GSA lacks specific statutory authority to compile the inventory, we also asked Congress to consider enacting legislation requiring GSA to maintain an accurate and up-to-date governmentwide inventory of real property assets and requiring real property-holding agencies to submit reliable data on their real property assets to GSA. This would give GSA added leverage in obtaining the data it needs from other federal agencies. GSA recognizes the problems associated with the worldwide inventory and has proposed several legislative initiatives in recent years to help correct the problems. This provision in H.R. 3947, if effectively implemented, can help GSA make the worldwide inventory a valuable resource. However, it is important to recognize that even if this provision is enacted, GSA will face formidable challenges in compiling reliable, timely, and useful data on federal real property. GSA will be challenged to identify and compile this data in a manner that the many real property- holding agencies, Congress, the Treasury, and OMB, agree is cost effective. Another challenge for GSA would be to work with participating agencies to make their real property databases capable of producing the common data that are needed to make the worldwide inventory an effective and valued resource. H.R. 3947 would also provide agencies with enhanced asset management tools and incentives for better property management. These proposed changes would give agencies the flexibility to establish real property portfolios that most appropriately, effectively, and efficiently meet the agencies’ mission requirements. The bill provides four new enhanced asset management tools for effective management of federal property: (1) interagency transfers or exchanges, (2) sales to or exchanges with nonfederal sources, (3) subleases, and (4) outleases and public-private partnerships. In addition, H.R. 3947 provides incentives for agencies to use these enhanced asset management tools and dispose of excess property by allowing them to retain proceeds generated to pay expenses associated with the property and fund other capital needs. Currently, the law for most federal agencies requires that proceeds from the sale of federal land and buildings go either to the general treasury or the Land and Water Conservation Fund. Within the last year we have issued two reports that addressed issues related to one of the enhanced management tools proposed in H.R. 3947— public-private partnerships. In our report on repairs and alterations, we said that GSA faced long-standing obstacles, including limited funding, in reducing its multibillion-dollar inventory of repair and alteration needs. In this report, we asked Congress to consider providing the administrator of GSA the authority to experiment with funding alternatives, such as exploring public-private partnerships when they reflect the best economic value available for the federal government. The other report identified the potential benefits of allowing federal agencies to enter into public-private partnerships. A public-private partnership allows the federal government to lease federal property to a nongovernmental entity to develop, rehabilitate, or renovate the facilities on that property for use by federal agencies and/or private sector tenants. We hired consultants to develop and analyze hypothetical partnership scenarios for 10 judgmentally selected GSA properties. Appendix I contains a flowchart that shows how a public-private partnership may be structured.