Following are excerpts from a recent OMB memo to agencies ordering them to reduce their “footprint” in office space and other space they own or lease.
The Federal government is the largest real property owner in the United States and its inventory is vast and complex.
The government-wide inventory consists of approximately1.1 million separate assets, defined as buildings, land parcels, or structures.
The domestic building inventory is as diverse as the Federal mission and includes hospitals, office buildings, warehouses, laboratories, housing, data centers, and museums.
The inventory contains 300,000 buildings requiring approximately $21 billion of annual operation and maintenance expenditures, including approximately $6.8 billion of annual lease costs.
High costs can hinder agencies’ mission delivery capabilities because the funding used to operate inefficient an unneeded buildings is not employed for direct mission support.
As technology advances, agencies are requiring fewer buildings to implement their mission due to such initiatives as Internet based service delivery, employee telework, and electronic dissemination of information.
Over the last several decades agencies have accumulated properties inexcess of what the government needs to effectively meet its mission.
This has resulted in a large number of excess properties and underutilized or unutilized properties in the portfolio.
In 2003, the Government Accountability Office (GAO) designated Federal real property as a high risk government operation, and over the last decade GAO has issued several reports recommending strategies to improve real property management.
GAO and Congress have helped focus attention on long standing Federal real property challenges, as inefficiency within the Federal real property portfolio has been a persistent issue thats several administrations have attempted to address.
In 2010, President Obama issued a Memorandum to the heads of all executive agencies, titled “Disposing of Unneeded Federal Real Estate” which directed them to take aggressive action to reduce the real property footprint.
In 2012, the Office of Management and Budget (OMB) issued Memorandum M12-12: “Promoting Efficient Spending to Support Agency Operations” to lay the foundation for reducing the size of the Federal portfolio by directing agencies to freeze the grow thin their real property inventories of office and warehouse space.
As a result of Memorandum M12 12 and the attendant “Freeze the Footprint” implementation policy, the Federal government reduced its overall office and warehouse space by more than 10 million square feet between Fiscal Year (FY) 2012 and FY2013.
Despite this recent success and are renewed government-wide focus to improve the portfolio’s efficiency, significant work remains to address the long-standing challenges that successive Administrations have worked to overcome.
This National Strategy sets forth a framework to effectively address these challenges.
The Real Property Challenge
The second step in the policy frameworks to measure real property costs and utilization to improve the portfolio’s efficiency.
The “measure” step targets office and warehouse assets for the same reasons these assets are subject to the “freeze” policy step.
Calculating performance at the individual asset level provides valuable information on efficiency and helps identify inefficien tlocations that are ripe for action.
The third step in the policy framework is the primary goal of the National Strategy- to reduce the size of the portfolio by eliminating inefficient, unneeded, and excess assets through consolidation, collocation, and improved space utilization.
The portfolio contains owned facilities that are not needed to execute agency missions or provide service to the public.
Such facilities are generally inactive or underutilized and they can be disposed through sale, demolition, and public benefit conveyance or be made more efficient through consolidation.
Accelerate Disposal of Excess and Unutilized Property
The government disposes of thousands of unneeded buildings every year through demolition, sale, public benefit conveyance, and other methods.
These disposals reduce annual operation and maintenance costs by tens of millions of dollars per year and free maintenance staff to pursue other duties.
Additionally, disposal sales return tens of millions inproceeds to the governmentannually.
In 2013, the government disposed of 7,379 owned domestic buildings and reduced annual operating costs by over $96 million.
The financial benefits that disposals provide to the government can been enhanced by increasing the number of disposals executed each year.
Enhancing the number and rate of asset disposals isa priority action of the National Strategy.
Disposals ales that have the greatest potential to generate proceeds and eliminate operation and maintenance costs are natural priorities for agencies and these properties are the focus of the legislative pilot program discussed below.
Execute Opportunities to Improve Space Utilization
Agencies will identify opportunities to improve space utilization and reduce costs through the analytics applied.
Policies and statutes are in place to facilitate action to implement identified opportunities.
Title 40 provides GSA with the statutory authority to act as the government’s disposal agent.
Agencies that have independent authority to dispose of real property, such as the Veterans Administration, still can use GSA as its disposal agent.
GSA works collaboratively with land holding agencies to dispose of unneeded assets, however, the disposal process can be lengthy and time consuming.
Agencies will identify opportunities to consolidate within their owned and leased assets that can frequently be executed within a short timeframe.
Programs such as GSA’s Consolidation Activities program provide a way for GSA and its partner agencies to reduce the government’s footprint and the cost to the agency.
As part of its ongoing effort to improve space utilization, optimize inventory, decrease reliance on leased space, and reduce the government’s environmental footprint, GSA is working with partner agencies to identify consolidation opportunities within its inventory of real property.
These opportunities are presented through surveys and studies, partnering with client agencies, and through agency initiatives such as Client Portfolio
Planning (CPP) and Total Workplace.
The President’s FY2016 budget includes a $200 million request for GSA to continue identifying and implementing these high-impact consolidation opportunities.
Alternatively, agencies that reside in GSA-controlled space typically have the option of returning unneeded space, assuming it is marketable to another user, to GSA for appropriate action upon four months written notice (after the agency’s initial year of occupancy).
This option also enables agencies to reduce their footprint and associated rental costs.