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. Real property management remained on GAO’s high-risk list in 2009.  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.  In addition, in October 2008, GAO reported that the government’s fiscal exposure from repair and maintenance backlogs is unclear and that agencies generally expect their backlogs to increase as buildings age and construction costs increase.  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, leased more property than it owned, for the first time, in 2008. 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.  According to the Office of Management and Budget (OMB), the federal government disposed of excess real property valued at $1 billion in fiscal year 2008, bringing the total to over $8 billion since fiscal year 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 these 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, protecting federal facilities from terrorism is an ongoing challenge facing agencies and is a major reason for GAO’s high-risk designation.  For example, GAO reported in August 2009 that the National Park Service has implemented a range of security improvements since September 11.  However, the Park Service does not allocate resources using risk management servicewide or cost-effectively leverage technology.  GAO also found problems related to Park Service information sharing and human capital management with regard to security.  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 challenges that hamper its ability to protect government employees and members of the public who work in and visit federal facilities.  FPS also does not fully ensure that its contract security guards have the training and certifications.

^ Back to topWhat Needs to Be Done

• A challenge for the 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.  Attention to security issues—such as those at the Park Service and FPS—in conjunction with other reform efforts, is of critical importance. 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)

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