Managing Federal Real Property

Image

Since our last high-risk update in March 2019, the federal government now meets the criterion for having an action plan. The federal government continues to meet the criterion of leadership commitment and continues to partially meet the criteria for capacity, monitoring, and demonstrated progress.

Since we added this area to our High-Risk List, we have made numerous recommendations related to this issue, 31 of which were added since the last high-risk update in March 2019. As of December 2020, 68 recommendations remain open.

The federal response to the Coronavirus Disease 2019 (COVID-19) pandemic may delay some planned actions, such as the development of a final, comprehensive national strategy guiding real property management. In addition, the federal government may face added challenges as a result of the pandemic, such as long-term changes in the amount and type of space it occupies.

These changes may, in turn, affect the amount of excess space the federal government possesses. In addition, the CARES Act provided $275 million to the Federal Buildings Fund for General Services Administration (GSA) to prevent, prepare for, and respond to the pandemic, which we summarized in our November 2020 CARES Act report GAO‑21‑191 on the federal government’s initial response to the pandemic.

Excess and Underutilized Property

Image

The ratings for the excess and underutilized property segment remain unchanged since our 2019 High-Risk Report.

Leadership commitment: met. The Office of Management and Budget (OMB) continues to implement the 2015 National Strategy for the Efficient Use of the Real Property (national strategy) which identifies actions to reduce the size of the federal real property portfolio by prioritizing consolidation, co-location, and disposal actions. The national strategy is consistent with the 2015 Reduce the Footprint policy that required agencies to set goals for reducing unneeded space.

In May 2019, the Public Buildings Reform Board (the board) was sworn in and worked with OMB, GSA, and other federal agencies to collectively identify and recommend high-value properties for disposal under the Federal Assets Sale and Transfer Act (FASTA) of 2016. In January 2020, OMB approved the board’s list of 12 recommended high-value federal properties for disposal. According to board officials, the first round of high-value properties are set to be sold in 2021.

Capacity: partially met. In March 2020, OMB published an addendum to the national strategy but it does not fully address underlying challenges, such as budget limitations, that impede agencies’ capacity to dispose of or use real property better, a deficiency we noted in our 2019 high-risk update. According to an OMB official, as of August 2020, OMB had not yet drafted the planned comprehensive and final national strategy document, in part, because of the need to respond to COVID-19.

As a 6-year pilot program, FASTA increased the federal government’s capacity to dispose of unneeded federal real property by establishing an independent board and a process for identifying and disposing of unneeded federal buildings, among other things. However, in our January 2021 report GAO-21-233, we found that better documentation of the board’s process for evaluating and selecting disposal properties could help improve the process for future disposals.

Action plan: met. We noted in 2019 that OMB had, through Reduce the Footprint, established a government-wide action plan to (1) use property as efficiently as possible, and (2) reduce portfolios through annual reduction targets. Additionally, OMB’s November 2019 memorandum on the Implementation of Agency-wide Real Property Capital Planning requires agencies to develop an annual capital planning process document that addresses project prioritization between new assets and maintenance of existing assets. Agencies’ planning documents were originally due to OMB in August 2020 but that deadline has been postponed until 2021 due to COVID-19, according to an OMB official.

Monitoring: partially met. OMB and GSA continue to 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.

For example, OMB chose not to use the Department of Defense’s (DOD) real property data in reporting the last 2 years of results of the Reduce the Footprint policy (2018 and 2019) because the data were not sufficiently reliable. We reported in 2018 that weaknesses in the quality of DOD’s real property data result, in part, because DOD has not implemented a strategy to identify and address risks with accompanying schedules and performance metrics. As of February 2020, DOD estimated it could complete these actions by September 2023.

Demonstrated progress: partially met. The federal government has made uneven progress in implementing the Reduce the Footprint policy. While the federal government doubled its space reductions goal in fiscal year 2016 by reducing 11 million square feet of space, later results were mixed. The federal government failed to reach its reduction goals in fiscal years 2017 and 2019, and the 2019 reductions were the lowest since the effort began in 2016.

In fiscal year 2019, the federal government reduced about 566,000 square feet of space, less than half of any of the previous years’ reductions. While the board made progress by recommending a list of high-value properties for disposal that OMB approved, GSA still needs to execute the sale of these properties under FASTA.

Costly Leasing (Segment Removed)

Image

The ratings for the costly leasing segment improved to met for capacity, monitoring, and demonstrated progress criteria, with the two other criteria continuing to be met. Consequently, we have removed the costly leasing segment from this high-risk area.

Leadership commitment: met. GSA continued to demonstrate leadership commitment in reducing costly leasing. As noted in our 2019 High-Risk Report, GSA initiated its Lease Cost Avoidance Plan in 2018 to reduce leasing costs by a projected $4.7 billion by fiscal year 2023.

GSA continued to implement its plan through several initiatives including (1) negotiating more competitive leases with longer terms, (2) reducing the size of leases, (3) moving leased tenants to federally owned space, and (4) backfilling vacant leased space.

Capacity: met. GSA has taken steps to reduce its reliance on costly leases. In May 2020, GSA awarded the fourth iteration of its broker contract. GSA uses brokers to supplement its staff and complete work on high-value leases it would otherwise be unable to complete, according to GSA officials. GSA also hired an additional 32 GSA lease-contracting officers in fiscal years 2019 and 2020 to help address its expiring lease inventory.

GSA has also taken steps to increase its capacity for reducing leasing costs by eliminating interest fees. In 2020, in response to our 2016 recommendation, GSA developed a proposal to OMB to loan agencies funds to improve newly leased spaces instead of agencies financing these costs at private-sector interest rates. This proposal could save tenant agencies millions of dollars in private sector interest charges.

Action plan: met. GSA continued to meet the action plan criterion for costly leasing through ongoing implementation of its Lease Cost Avoidance Plan.  In 2020, GSA also successfully implemented its plan to prioritize properties for ownership investments—a recommendation we made in 2013—by purchasing the Department of Transportation’s (DOT) headquarters building.

Monitoring: met. GSA now meets the criterion for monitoring progress toward reducing leasing costs. Since 2019, GSA has improved its monitoring efforts. GSA’s Lease Cost Avoidance Plan now aggregates cost avoidance estimates from a number of metrics. Specifically, the plan tracks cost avoidance through various metrics such as leases negotiated below market costs, reductions in rental square footage, and reductions in vacant leased space through backfill or lease termination.

In addition, GSA developed its lease replacement metrics to monitor lease status at different points along the process to minimize the need to stay in a space after a lease expires or to enter into short-term lease extensions.

Demonstrated progress: met. GSA has made quantifiable improvements in leasing amounts and costs and now meets the demonstrated progress criterion. GSA has documented a downward trend in leased square footage over the last 6 years, resulting in more space being under the custody and control of GSA than the space it leases for the first time since 2007. In fiscal year 2019, GSA reported that it avoided about $324 million in costs by moving tenants from previously leased space to federally owned space.

Notably, in 2020, GSA moved the DOT Headquarters in Washington, D.C., from leased space to owned space by purchasing the building.  GSA estimates that this move to owned space will save taxpayers more than $409 million in lease costs over 30 years. GSA also reported that it avoided an additional $30 million of lease costs in fiscal year 2019 by backfilling vacant federal space and terminating unneeded leases.

Data Reliability

Image

The rating for demonstrated progress has regressed from partially met to not met since our 2019 High-Risk Report. Ratings for the other four criteria remain unchanged.

Leadership commitment: met. GSA and DOD continue to demonstrate leadership commitment in improving their data reliability. GSA continues to improve its FRPP reliability and its Federal Real Property Data Validation and Verification (V&V) process for identifying and correcting possible errors.

GSA, in conjunction with the Federal Real Property Council (FRPC), also continues to refine its FRPP data dictionary which provides the real property reporting requirements for executive agencies. DOD also committed to a timeline for improving its Real Property Assets Database.

Capacity: met. GSA continues to take actions to increase the capacity of agencies to submit accurate data. For example, GSA revised certain data elements’ definitions in 2020 and incorporated them into the 2020 FRPP data dictionary to increase the accuracy and completeness of the data reported to FRPP. In addition, in November 2018, FRPC established a data governance working group that meets regularly to address challenges to reliable and complete data in the FRPP.

Action plan: met. In March 2020, FRPC’s data governance working group developed a corrective action plan to address FRPP data reliability issues that we identified in February 2020 including V&V anomaly categories to better target incorrect data. In February 2020, DOD shared its strategy to improve the coordination of corrective action plans to remediate discrepancies in its real property data system. DOD's estimated completion date for these actions is September 2022.

Monitoring: partially met. While GSA’s V&V process continues to provide a structure for improving the FRPP data, it has not addressed key errors in FRPP data.

In February 2020, we found that 67 percent of building addresses in FRPP were incorrectly formatted or incomplete, making it hard to locate specific buildings. In June 2020, GSA revised the FRPP data dictionary to clarify the reporting of street addresses as well as latitude and longitude coordinates. In November 2020, FRPC’s data governance working group developed a computer application to help agencies identify incorrect or incomplete FRPP location data. This tool will be available to agencies in 2021, according to GSA officials. GSA officials plan to monitor the effect of these changes after agencies submit their 2021 data.

We also found that verification of DOD’s real property assets during fiscal year 2019 was incomplete and not comparable across DOD due to a lack of department-wide instructions.

Demonstrated progress: not met. GSA and DOD are no longer partially meeting the criteria for demonstrated progress. While GSA and some agencies have taken action to correct data, we continue to find serious data errors that undermine the reliability of the FRPP. GSA’s V&V process has not effectively addressed key errors in FRPP data. As a result, we found in February 2020 that most building addresses in FRPP are either incorrectly formatted or incomplete.

In addition, DOD’s real property data continue to be inaccurate and incomplete. In September 2020, we found that DOD had serious control issues that affected the quality of its property data. DOD also has not implemented a strategy that identifies and addresses risks to data quality and information accessibility with accompanying schedule and performance metrics, a recommendation we made in November 2018. DOD officials told us they developed a strategy in 2020 but it will not be fully implemented until September 2023.

Facility Security

Image

The ratings for the facility security segment improved for the action plan and demonstrated progress criteria with the other three criteria remaining unchanged.

Leadership commitment: met. The Federal Protective Service (FPS) continues to take action to address our recommendations to improve the security of federal facilities. The Interagency Security Committee (ISC) also continues to update its Risk Management Process—a consolidated set of standards required of executive branch agencies for physical security at nonmilitary federal facilities.

Capacity: partially met. The federal government may not have the capacity to conduct adequate risk assessments because agencies’ security assessment methodologies do not fully align with the ISC Risk Management Process. To this end, the Federal Aviation Administration (FAA) and the Department of Veterans Affairs (VA) should implement our October 2017 and January 2018 recommendations to complete an assessment of their policies consistent with the ISC’s standards.

Action plan: met. The federal government has shown improvement and now meets this criterion by finalizing action plans that should improve the security of federal facilities. In July 2019, FPS, GSA, the judiciary, and the U.S. Marshals Service finalized a memorandum of agreement clarifying their respective roles and responsibilities for federal facility security, implementing our longstanding recommendation from September 2011.

In 2020, FPS and GSA also implemented our December 2015 recommendation by finalizing a joint strategy that defined and articulated a common understanding of expected outcomes and aligned the two agencies' activities and core processes to achieve their related missions.

Monitoring: partially met. The federal government continues to partially meet this criterion. In 2019, FPS developed two systems to oversee its contract guard workforce. Specifically, FPS developed the Training and Academy Management System and the Post Tracking System. However, FPS has not fully implemented these systems. Finally, as noted in the 2019 high-risk update, actions are still needed to better address various emerging security threats to federal facilities. 

Demonstrated progress: partially met. The federal government has shown improvement and now partially meets the criterion for demonstrated progress to improve security. FPS must demonstrate the effectiveness of its guard management system and ensure that it interacts with its training system across all regions. Once the systems are fully implemented, FPS will be able to obtain information to assess its guards’ capability to address security risks across its portfolio.

Although there has been progress overall to improve federal facility security, the attack on the U.S. Capitol on January 6, 2021, underscores that more progress is needed among a range of federal agencies and their law enforcement partners to defend against ever changing threats.