Key Issues > High Risk > Managing Federal Real Property
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Managing Federal Real Property

The federal government would save millions of dollars by disposing of unneeded buildings and reducing lease costs. Federal departments and agencies should also improve data reliability and federal facility security.

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The federal government’s real estate portfolio is vast and diverse—including about 267,000 domestic buildings as of September 2016 that cost billions of dollars annually to operate and maintain. OMB and GSA both provide management support to agencies. OMB establishes federal policies and chairs the Federal Real Property Council. GSA provides space for federal tenants and collects data on real property.

Additionally, DHS has management-level responsibilities through the DHS-chaired Interagency Security Committee (ISC) that sets security standards, and its Federal Protective Service (FPS) protects about 9,000 federal buildings. Federal managers, however, rely on other agencies to reduce unneeded properties, produce reliable data, and follow ISC standards.

Since federal real property management was placed on the High-Risk List in 2003, the federal government has given high-level attention to this issue; however, federal agencies continue to face long-standing challenges, including: (1) effectively disposing of excess and underutilized property, (2) relying too heavily on leasing, (3) collecting reliable real property data for decision making, and (4) protecting federal facilities.

Managing Federal Real Property

Since our 2017 High-Risk Report, overall, the five criteria remain unchanged although there was progress within some individual segments. Three agencies involved in managing, tracking, and protecting federal real property government-wide—Office of Management and Budget (OMB), General Services Administration (GSA), and Department of Homeland Security (DHS)—have made steady progress over multiple administrations in addressing federal real property challenges.

However, momentum has slowed, due to delayed implementation of the Federal Assets Sale and Transfer Act of 2016 (FASTA) and decreased implementation of reforms by federal agencies. Over the years since we added this area to our High-Risk List, we have made numerous recommendations related to this high-risk issue, 40 of which were made since the last high-risk update in February 2017. As of December 2018, 63 recommendations are open.

 


Excess and Underutilized Property

Strategic Human Capital ManagementRatings for this segment remain unchanged since our 2017 High-Risk Report.

Leadership commitment: met. In 2015, OMB implemented our recommendation to issue government-wide guidance—the National Strategy for the Efficient Use of the Real Property (National Strategy)—which identified actions to reduce the size of the federal real property portfolio by prioritizing consolidation, co-location, and disposal actions, consistent with the Reduce the Footprint policy that required agencies to set goals for reducing unneeded space. An OMB official said that the National Strategy and Reduce the Footprint Policy are still in place.
In 2016, FASTA established a 7-member civilian board to recommend unneeded federal buildings for disposal. However, the administration has not yet appointed a chair, a full board, or staff.

In 2018, the Administration released its plan on Delivering Government Solutions in the 21st Century. As part of this plan, the Administration proposed a series of improvements to streamline and accelerate the disposal of excess federal property. These improvements include reducing the number of steps needed to dispose of unneeded federal property and creating incentives for disposals by allowing agencies to retain the proceeds from sales.

Capacity: partially met. As noted in our 2017 high-risk update, OMB created the National Strategy and the Reduce the Footprint Policy to assist agencies, which represented positive steps. However, the National Strategy does not address the extent to which underlying challenges, such as budget limitations, impede agencies’ abilities to dispose of or better use real property, nor does it offer guidance on how agencies can overcome these challenges. Once the board is appointed, FASTA has the potential to increase the federal government’s capacity by establishing a process for identifying and disposing of unneeded federal buildings.

Action plan: met. We noted in 2017 that OMB had, through the Reduce the Footprint policy, established a government-wide action plan to (1) use property as efficiently as possible, and (2) reduce portfolios through annual reduction targets.

Monitoring: partially met. OMB and GSA monitor progress in meeting space reduction targets using the government-wide real property database called the Federal Real Property Profile (FRPP). However, the database is not yet sufficiently reliable to produce accurate results. The Department of Defense (DOD) has almost half of the federal government’s buildings. However, OMB chose not to use DOD’s real property data in reporting the 2017 results of the Reduce the Footprint policy—the most recent year for which data is available—because the data were not sufficiently reliable. We reported in 2018 that weaknesses in the quality of the DOD’s real property data result, in part, because DOD has not developed a strategy to identify and address risks with accompanying time frames and performance metrics. Without such a strategy, DOD may miss the opportunity to reasonably ensure that the information needed for effective decision making by DOD, Congress, and other federal agencies is available to meet real property accountability and reporting objectives.

Demonstrated progress: partially met. The fiscal year 2016 results from Reduce the Footprint show progress with the federal government more than doubling its reduction goal.  However, in fiscal year 2017, the federal government failed to reach the halfway point of its more modest reduction goal.


Costly Leasing

Strategic Human Capital Management

The ratings for capacity and action plan improved since our 2017 High-Risk Report and the remaining three criteria remain unchanged.

Leadership commitment: met. OMB and GSA continue to take action to reduce costly leasing. For example, OMB proposed the creation of a capital revolving fund designed to facilitate ownership over operating leases for large-dollar buildings, although no action has been taken to implement it. An OMB staff member said that the legislative proposal to establish a capital fund was similar to an option we identified in a 2014 report. Additionally, GSA has developed a strategy to reduce leasing costs by a projected $4.7 billion by fiscal year 2023, through steps that include focusing resources on high-value lease renewals.

Capacity: partially met. GSA made improvements and now partially meets the capacity criterion. Specifically, GSA implemented our September 2013 recommendation to develop a strategy to increase ownership investments for a prioritized list of high-value leases. These leases are for properties where it would be less expensive in the long run to own. GSA plans to purchase at least one leased building in 2019. In addition, as noted in our 2017 high-risk update, GSA could potentially help tenant agencies save millions of dollars from some leases by loaning them funds to improve newly leased spaces instead of agencies financing these costs with private-sector owners at private-sector interest rates. While GSA officials agreed that doing so would save money in interest fees, it has not yet developed a legislative proposal to obtain the needed authority, as we recommended in 2016.

Action plan: met. GSA has made improvements and now meets the action plan criterion. GSA created an action plan to purchase buildings when it is more cost-effective than leasing by establishing criteria to rank and prioritize leased spaces that would benefit from federal ownership as discussed above.  Additionally, GSA is implementing strategies to better manage leases that include avoiding short-term extensions and identifying opportunities to enter into long-term and lower cost leases.

Monitoring: partially met. GSA continues to partially meet this criterion through implementation of the National Strategy, as noted in our 2017 high-risk update. However, GSA should also implement our recommendations to reduce the costs to tenants by exploring strategies to enhance competition for GSA leases and reducing unneeded fees.

Additionally, GSA has identified actions to better monitor leases at different points along the process in order to minimize the need to enter into short-term, costly lease extensions.

Demonstrated progress: partially met. GSA has made some progress in reducing the long-term costs of leasing by stemming the growth in leasing according to GSA data and committing to further reducing leasing costs. However, GSA must follow through on its plans to purchase leased buildings and reduce costs. GSA could also further reduce costs by loaning tenant agencies the funds needed to improve newly leased spaces but still needs to develop a legislative proposal to obtain authority to do so.


Data Reliability

Strategic Human Capital Management

Ratings for one criterion improved since our 2017 High-Risk Report and the other four criteria remain unchanged.

Leadership commitment: met. In December 2017, GSA continued efforts to improve data reliability by completing a major effort to make the Federal Real Property Profile (FRPP) public. Also, as we reported in our 2017 High-Risk Report, GSA issued its Federal Real Property Data Validation and Verification (V&V) Guidance in May 2016 and required agencies to address 13,257 data anomalies it found in fiscal year 2016 data.

Capacity: met. OMB and GSA continue to help agencies’ increase their capacity to submit accurate data. For example, GSA revised certain data elements’ definitions in 2016 and incorporated them in the 2018 FRPP Data Dictionary. In addition, OMB and GSA have further increased the capacity of FRPP to act as a government-wide database since additional agencies are required to report.

Action plan: met. GSA has made progress by developing an action plan in 2017 for federal agencies to develop processes to assess, address, and track FRPP data quality. Specifically, this plan identifies data elements to appropriately indicate data quality, identifies best practices and other methods that help agencies measure and assess improvements, and enables federal agencies to develop performance metrics.

Monitoring: partially met. While GSA required agencies to research the anomalies it found in its V&V process, only some agencies have identified and committed to correct mistakes. Further, of the 13,257 anomalies GSA identified in the fiscal year 2016 data, agencies overall acknowledged that less than 8 percent of the anomalies (1,004 anomalies) represented erroneous data to be corrected, while indicating that the others were correct. Furthermore, some agencies acknowledged less than 1 percent of the anomalies represented erroneous data. In addition, we found in 2018 that DOD did not correct discrepancies identified by its own V&V process.

Demonstrated progress: partially met. While GSA and some agencies have taken action to correct data, serious data reliability challenges remain with some individual agencies that undermine the reliability of the FRPP. In 2018, we found that DOD’s real property data continue to be inaccurate and incomplete, and that DOD lacks a plan for making the necessary improvements.


Physical Security

Strategic Human Capital Management

Ratings for this segment remain unchanged since our 2017 High-Risk Report.

Leadership commitment: met. DHS’s Federal Protective Service (FPS) continues to take action to address our recommendations. The Interagency Security Committee (ISC), an organization chaired by DHS that sets standards for physical security for federal nonmilitary facilities, also continues to implement the updated Risk Management Process—a consolidated set of standards for physical security at federal facilities. In addition, in 2018, GSA, the Administrative Office of the U. S. Courts (AOUSC), the U.S. Marshals Service, and FPS implemented our 2017 recommendation to establish a national-level working forum for courthouse security, known as the Interagency Judicial Security Council.

Capacity: partially met. FPS has taken several actions to address identified physical security issues since our 2017 High-Risk Report. For example, in 2018 FPS improved its risk assessment tool to incorporate all necessary elements recommended by the ISC, which has now certified it. In 2018, FPS also addressed our recommendation related to improving training for instructors and identified actions to address our recommendations associated with tracking guard training. Finally, in 2018, FPS also implemented several actions associated with our recommendation to develop human capital-related performance measures to evaluate progress towards agency goals.

Some agencies may not have the capacity to conduct adequate risk assessments because their processes do not fully align with the ISC Risk Management Process. To improve their capacity, the U.S. Customs and Border Protection, Federal Aviation Administration, and the Department of Veterans’ Affairs still need to complete an assessment of their policies against the ISC’s standards in response to our 2017 and 2018 recommendations.

Action plan: partially met. In September 2018, FPS and GSA signed a memorandum of agreement (MOA) clarifying their respective roles and responsibilities for federal facility security. However, FPS, GSA, and the Department of Justice have not yet addressed our 2011 recommendation to address a number of courthouse security challenges. Specifically, FPS, the U.S. Marshals Service, AOUSC, and GSA are still working to finalize the draft MOA on courthouse security.

Monitoring: partially met. FPS continues to develop a system that will allow FPS to verify independently that FPS’s contract guards are current on all training and certification requirements, and are taking steps to close this recommendation as implemented. FPS expects that system to be in place in 2019. In 2018, we also found that actions were needed to better address various emerging security threats to federal facilities.

Demonstrated progress: not met. The federal government has not demonstrated progress to improve physical security. Although agencies have taken some actions, time is needed for agencies to demonstrate the results of these actions. Additionally, agencies need to complete other actions. For example, once FPS, the U.S. Marshals Service, AOUSC, and GSA sign their MOA on courthouse security, they will be able to better protect federal facilities. Further, once FPS fully implements its guard management system and it interacts with its training system, FPS will be able to obtain information to assess its guards’ capability to address physical security risks across its portfolio.

Excess and Underutilized Property

As part of the reforms that OMB is considering, it should:

  • identify alternative approaches to address underlying causes of real property problems and address the extent to which challenges impede progress, as we recommended in 2016; and
  • refocus agency attention on meeting space reduction targets, as discussed.

Additionally, the Administration needs to appoint vacant FASTA board positions and hire staff.

Costly Leasing

GSA should develop a legislative proposal to obtain authority to loan agencies funds needed to improve newly leased spaces, as we recommended in 2016.

Data Reliability

OMB and GSA should continue working with federal agencies to improve the reliability of their real property data through V&V efforts and encouraging agencies to implement action plans to better assess, address, and track data quality, as discussed in the above action plan. In particular, DOD should take steps to ensure that DOD improves the reliability of its real property data, as we recommended in 2018.

Physical Security

To improve the physical security of federal buildings, the following steps are necessary:

  • Clarify roles and responsibilities for the protection of federal facilities by finalizing the MOA for federal courthouse security between GSA, FPS, the U.S. Marshals, and AOUSC, as we recommended in 2011.
  • FPS must validate training information being entered to ensure that guards are getting critical training, as we recommended in 2012.
  • Implement our recommendations for agencies to improve their monitoring of collaborative efforts to protect federal facilities, as we recommended in 2015.
  • Take actions to better address emerging security threats to federal facilities, as we recommended in 2018.
Looking for our recommendations? Click on any report to find each associated recommendation and its current implementation status.