Federal Manager's Daily Report

The processes the government uses to dispose of excess real estate “is full of disincentives” to agencies owning such properties and “urgently needs comprehensive reform,” according to a board created by a 2016 law designed to spur such reforms.

The report of the Public Building Reform Board, created by the Federal Assets Sale and Transfer Act, says that as of 2018 the government owned or leased more than 1.2 billion square feet, which “far exceeded federal needs and includes significant owned properties that are underutilized or poorly suited to current agency mission requirements.”

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Despite attention from OMB, GSA, GAO and Congress, “the traditional property disposal process and the frequent need for capital improvements prior to property disposal have discouraged agencies from aggressively pursuing property disposal. In addition, properties that are disposed are generally sold “as is,” rather than marketed to maximize the return to the taxpayer. The federal government has failed to take advantage of tremendous value through progressive redevelopment and reuse strategies.”

The board’s recommendations for improving disposal of excess property in general included improving coordination between the GSA and local officials on redevelopment planning; using brokerage firms with experience in local markets to reach a broader range of potential buyers; and better planning to maximize the potential return and keep transactions on schedule.

The board meanwhile recommended an initial set of 12 properties nationwide for disposal, following a base-closing type review process. That recommendation now is before OMB; if it is approved, a fast-track process to sell them off will begin. The board also is to conduct two more rounds of such reviews.