Real Property Management and Security

• The federal real property portfolio is vast and diverse, totaling more than 3 billion square feet of space with an estimated gross value in the hundreds of billions of dollars. The Departments of Defense and Veterans Affairs, the U.S. Postal Service, and the General Services Administration (GSA), hold the majority of federally owned and leased space. Real property decisions draw considerable attention during congressional deliberations over appropriations. Members of Congress take a keen interest in federal facilities in their districts and in the economic impact of any decisions. Several stakeholders outside of the federal government—such as state and local governments, local business and private real estate interests, historic preservation groups, and various advocacy groups—have an interest in how the federal government carries out its real property acquisition, management, and disposal practices. Since September the 11th, the focus on securing federal facilities, while still maintaining public accessibility, has been amplified and is an ongoing challenge.
• GAO first designated federal real property management as a high-risk area in January 2003 due to long-standing problems with excess and underutilized property, deteriorating facilities, unreliable real property data, and overreliance on costly leasing. As GAO has reported as part of the high-risk series, the federal real property portfolio largely reflects a business model and the technological and transportation environment of the 1950s. Many federal real property assets 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. Many of the older buildings are not configured to accommodate new technologies and have significant repair and restoration backlogs. Furthermore, electronic government has changed the way the public interacts with the federal government, and this change will have significant implications for the type, location, and security of property in the 21st century.
• GAO’s work has shown that these problems have multi-billion-dollar cost, as well as savings, implications for the next administration.   In the repair and restoration backlog area, for example, GAO reported in April 2007 that the Departments of Energy, Interior, Veterans Affairs, and State, the National Aeronautics and Space Administration (NASA), and GSA had backlogs totaling more than $16 billion.  GAO’s work has identified several cases where decisions to lease property were hundreds of millions of dollars more costly than ownership. GSA, most notably, is increasing its use of leased space and predicts that in 2008 it will, for the first time, lease more space than it owns.  Furthermore, the Departments of Energy and Homeland Security (DHS), and NASA reported that over 10 percent of their facilities were excess or underutilized.  Excess property represents a lost opportunity to generate revenue for the government and is costly to maintain.  After our high-risk designation, the President established a goal of disposing of $15 billion in unneeded assets by 2015.  In April 2008, OMB reported that agencies had disposed of more than $7 billion in unneeded property since 2004.  The President also added real property management to the President’s Management Agenda, and a related executive order (13327) established a Federal Real Property Council to address the problems. In response agencies have also established asset management plans, standardized data reporting, and adopted performance measures to gauge progress.
• Despite the administration's efforts, these problems have persisted and been exacerbated by deep-rooted obstacles that include competing stakeholder interests in real property decisions, various legal and budget-related limitations, and the need for better capital planning among agencies. For example, competing stakeholder interests—such as local resistance to giving up a federal presence—pose a barrier to disposal of excess property. Legal and budgetary limitations—such as funding needed to prepare property for disposal and some agencies' inability to retain sale proceeds—are also barriers.
• In the security area, GAO has found that other entities outside the federal government use security-related performance measures to help improve security, make decisions about risk management and resource allocation, and hold employees accountable for whether a program meets its security goals and objectives. However, federal agencies faced challenges in using performance measurement in these ways, and there were no governmentwide guidance or related standards for facility protection. GAO's work on the Federal Protective Service (FPS), which is part of DHS and provides physical security and law enforcement services to about 9,000 GSA facilities, showed that FPS faces several operational challenges that hamper its ability to accomplish its mission. These included decreases in staffing that have increased the risk of crime or terrorist attacks and problems ensuring that security countermeasures, such as security cameras and magnetometers, are put in place.

^ Back to topWhat Needs to Be Done

• A challenge for the incoming administration will be to sustain ongoing reform efforts in real property management and show continued progress in eliminating problems, such as excess property and repair backlogs.  The primary reason for this is that agencies continue to face deep-rooted obstacles that will require well-thought strategies, and in some cases, changes in law.  To date, OMB and agencies have not implemented GAO’s recommendation that the obstacles be addressed more directly through a re-assessment of options, which would be the first step toward reform.  Although progress has been made, it is unlikely that a large-scale transformation in this area will occur unless this is done.

  Highlights of GAO-07-349 (PDF), Highlights of GAO-08-197 (PDF)

• In the security area, agencies should develop, and make greater use of, performance measures for facility protection, and the Interagency Security Committee, chaired by DHS, should develop related standards and guidance. Without these tools, it will remain difficult to judge whether funding for security investments is having the greatest return for taxpayers, in terms of a reduced risk of terrorism against federal facilities. Integral to improvements in this area is FPS's ability to address the problems GAO has identified. With the proper level of oversight and improvement by the new administration, FPS could become a leader and benchmark agency for facility protection in the federal government.

  Highlights of GAO-06-612 (PDF), Highlights of GAO-08-683 (PDF)

^ Back to topKey Reports

Federal Real Property: Progress Made Toward Addressing Problems, but Underlying Obstacles Continue to Hamper Reform

GAO-07-349, April 13, 2007

Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 89 pages)   Accessible Text   Recommendations (HTML)

Federal Capital: Three Entities' Implementation of Capital Planning Principles Is Mixed

GAO-07-274, February 23, 2007

Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 66 pages)   Accessible Text   Recommendations (HTML)

Federal Real Property: Strategy Needed to Address Agencies' Long-standing Reliance on Costly Leasing

GAO-08-197, January 24, 2008

Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 45 pages)   Accessible Text   Recommendations (HTML)

Homeland Security: The Federal Protective Service Faces Several Challenges That Hamper Its Ability to Protect Federal Facilities

GAO-08-683, June 11, 2008

Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 50 pages)   Accessible Text   Recommendations (HTML)

Homeland Security: Guidance and Standards Are Needed for Measuring the Effectiveness of Agencies' Facility Protection Efforts

GAO-06-612, May 31, 2006

Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 74 pages)   Accessible Text   Recommendations (HTML)