Key Issues > Federal Real Property - High Risk Issue
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Federal Real Property - High Risk Issue

The federal government continues to face a number of challenges to effectively managing its federal real property, including long-standing problems with excess and underutilized property and overreliance on leasing.

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The total federal real property portfolio is vast and diverse—including approximately 267,000 buildings that are leased or owned in the United States as of September 2016 and that cost billions of dollars annually to operate and maintain by civilian and defense agencies. Despite recent efforts, federal agencies continue to face long-standing challenges managing this property in the following areas:

  • disposing of excess and underutilized property effectively,
  • relying too heavily on leasing, and
  • protecting federal facilities.

Excess and Underutilized Property

Federal agencies reported holding over 7,000 excess or underutilized real property assets. Paying for maintenance of these properties is a waste of resources. In cases where properties are not conveyed to other federal or local entities, they could be sold to generate revenue for the federal government. The federal government made progress by issuing the National Strategy for the Efficient Use of Real Property in 2015. It provides a foundation to further assist agencies in strategically managing their real property inventories. However, additional challenges remain, including a lack of reliable data, a complex disposal process, costly environmental requirements, and competing stakeholder interests.

Costly Leasing

GSA has taken actions that allow for more informed decision making related to the appropriate role of leasing in GSA's real property portfolio, as well as to position GSA to create a long-term strategy for targeted ownership investments, but GSA continues to rely on leasing in situations where ownership would be less expensive in the long run.

GSA has also taken some steps to increase its capacity to make its existing leasing program less costly by increasing competition, but has not fully explored ways to reduce interest fees that agencies incur when financing needed improvements.

Total Tenant Improvement Costs If Amortized over Term or Paid at the Outset of a Lease for Three Selected General Services Administration (GSA) Leases Executed between 2000 and 2014

Total Tenant Improvement Costs If Amortized over Term or Paid at the Outset of a Lease for Three Selected General Services Administration (GSA) Leases Executed between 2000 and 2014

Physical Security

The Federal Protective Service (FPS), GSA, and other agencies can take additional steps to better ensure physical security of federal facilities and courthouses. Such steps include developing performance measures to help assess progress made, and ensuring the contract guards who protect these facilities have the necessary training to do their jobs. Finally, GSA can take steps to identify when foreign entities own high-security federally-occupied space and inform tenant agencies. Foreign-owned buildings could present security risks and most tenant agencies we contacted that occupied space in a foreign-owned building were unaware that the building was foreign-owned.

Foreign-Owned Buildings Containing High-Security Space Leased by GSA

Foreign-Owned Buildings Containing High-Security Space Leased by GSA

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High Risk: Managing Federal Real Property