Federal Real Property Management

Chairman Horn, Chairman Franks, and members of the subcommittees, my name is G. Martin Wagner. I am the Associate Administrator for Governmentwide Policy, General Services Administration (GSA). The Office of Governmentwide Policy (OGP) is one of four major activities within GSA, the others being the Public Buildings Service, the Federal Supply Service, and the Federal Technology Service. GSA created OGP to establish a central point for sound policy development, research, 'sharing best practices, and consensus building across the full range of Government administrative support activities.

With me here today is Mr. Robert Peck, the Commissioner of the Public Buildings Service, and Mr. David Bibb, the Deputy Associate Administrator for Real Property.

Under Mr. Bibb's direction, the Office of Real Property explores and develops asset management policy concepts. Its objective is to improve the policies and processes with which Federal agencies acquire, use, and dispose of the property interests they need to conduct their missions.

The Government presently owns or leases approximately 3.2 billion square feet of building space, as well as millions of acres of both improved and unimproved land. The attached charts illustrate this 3.2 billion square foot building area, which is our sphere of influence under the Federal Property and Administrative Services Act of 1949, as amended (Property Act).

We are pleased to appear before you today to highlight some of GSA's views concerning the present state of Federal real property management.

Prevailing La : The Property Act is the centerpiece in the body of law that governs the acquisition, use, and disposal of most classes of Federal real property. This law has served the Nation well for the past 50 years, but it has never been significantly revised.

Certain elements of the Property Act restrict the Government's ability to adapt some "best practices" that have become commercial standards. The law is especially ill suited to the current national objectives of downsizing, streamlining, and creating a Government that works better and costs less.

Present State of the Federal Inventory: The Federal real property inventory is enormous, globally distributed and aging. Its utility is diminished by properties that are in poor condition, functionally obsolete, environmentally flawed, or otherwise mismatched to current requirements of the missions it is supposed to support.

In many of its reports addressing real property issues in recent years, the General Accounting Office (GAO) has observed that Federal agencies are generally reluctant to relinquish unneeded or marginally productive properties because of the lack of any genuine incentive to do so. Where GSA has been asked to respond to such issues in these reports, we have emphasized our concurrence with GAO's views.

We also concur with a statement by the National Research Council in its 1998 report entitled Stewardship of Federal Facilities, A Proactive Strategy for Managing the Nation's Public Assets, that "Federal agency program managers, the GAO, and research organizations have all reported that the funding allocated for the repair and maintenance of federal facilities is insufficient." Among its findings, the report also asserts that government processes and practices are generally not structured to provide for effective accountability for the stewardship of federal facilities and that management, budgeting, and financial processes create disincentives and institutional barriers to cost-effective facilities management and maintenance practices.

Discoveries and Interim Measures: GSA has noted the findings of the National Research Council, the General Accounting Office, and other bodies that have studied contemporary Federal property management issues. We have remained mindful of their common themes and compared them with the product of our own examination of the effects of prevailing law and regulations. We have also made some important discoveries in the course of collaborations with other Federal agencies, prominent private sector entities, and our counterparts in both domestic and foreign governments.

From our studies and contacts we were able to identify certain measures that could be undertaken in the short term to stimulate more enthusiasm for good asset management within the Federal community.

We established the Federal Real Property Council to provide an interagency forum for all land holding agencies to air their views and thus properly influence Governmentwide real property policy formulation.

In collaboration with the Federal land holding agencies, we developed and published a set of Asset Management Principles intended to serve as touchstones for the measurement of the quality of Federal real property decision-making.

Among other studies, we conducted two of special mention.

One was on Governmentwide Real Property Information Sharing (GRPIS). This was an inquiry to determine the best means of sharing real property information among agencies within a community for purposes of promoting economy and operational efficiencies.

The other is referred to as the Governmentwide Real Property Disposal Review-, it involved an evaluation of the effectiveness of current policies in the present Government downsizing environment.

We also established a Real Property Information Clearinghouse to provide electronically accessible information on real estate data, organizational structures, and commentaries by real estate professionals on policy and procedures topics.

We have revitalized the Foundation Information for Real Property Management (FIRM) database, which is a computerized tool provided to Federal agencies for use in managing their real property.

Finally, we established a GSA Achievement Award for Real Property Innovation, which is given annually to recognize especially meritorious practices that have been developed in the Federal community.

The foregoing projects were possible within current legislative authorities. They have enjoyed a gratifying degree of popularity and praise, and we will continue to refine them and look for further opportunities to institute practical enhancements to Federal real property management processes.

We believe, however, that in order for the Government to improve its stewardship of real property assets, certain statutory barriers must be removed, and certain authorities must be modernized to meet the challenges of today's commercial realities.

Legislative Solutions: The Property Act requires that whenever a Federal agency finds that its real property portfolio and mission requirements are mismatched, the agency must either adapt to the detected shortcomings or relinquish affected property as excess, and then obtain appropriations for the acquisition of replacement facilities. As reported by the National Research Council, many agencies are unable to obtain sufficient funding for their real property capital and maintenance needs.

We suggest that the interests of the Government would be better served if the agency were able to restore and optimize the mission support role of particular real property by putting it to use through a number of new tools and by establishing new incentives to encourage sound asset management.

We envision special authorities which would permit agencies to dispose of property (1) by exchange, both within and without the Federal community, to obtain other property better suited to their mission support needs; (2) by outleasing temporarily underutilized portions of property on a short-term basis; (3) by allowing agencies to retain proceeds from property sales and outleases; and (4) in judiciously selected cases, by allowing agencies a special long-term outleasing authority to engage in public/private partnership arrangements that can be shown to provide extraordinary support to Federal mission purposes.

Consideration received by an agency would be acceptable in the form of money, services, or a mix of those values. Non-monetary consideration could be in the form of any blend of protection, maintenance, managerial, restorative, developmental, or other valuable services. These forms of consideration should optimize the role of the affected asset in supporting the mission to which it is related.

If these innovative authorities are enacted into law, we believe that monetary revenues accruing to an agency as a result should be used to improve the balance of its real property portfolio or to meet other non-recurring needs. Further provisions should be included to require--

(1) that advance notices be provided to interested committees of the Congress in cases that exceed a specified value threshold; and

(2) that any proposal to use these special authorities must take place in relation to asset management planning that is linked to the strategic planning periodically required under the Government Performance and Results Act of 1993.

Given these controlling specifications, we are convinced that the envisioned special authorities would be a boon to Federal landholding agencies. Over time, they would help bring about a condition where agency real property portfolios would be characterized by a high ratio of well performing properties excellently aligned with mission needs. Properties of poor functional quality will have been either culled from Federal inventories or restored to optimum performance.

Chairman Horn, Chairman Franks, this concludes my prepared statement. I will be pleased to answer any questions you or the members of the subcommittees may have.