Federal Manager's Daily Report

GSA’s latest update on the management challenges it faces touts the progress it has made toward disposing of excess real estate and says that some of the much-criticized slowness of the process is outside of its control.

The GSA said that since the launch of the “reduce the footprint” initiative in 2015 it has helped agencies realize a reduction of 4.6 million rentable square feet (RSF), with over 6 million RSF in leased space offset somewhat by the 1.5 million RSF increase in GSA’s owned inventory.

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“A key component of optimizing the federal footprint is repurposing and disposing of underutilized assets. GSA disposes of underperforming federal assets by working with agencies to develop and prioritize effective and efficient real property repositioning strategies. GSA aggressively identifies and disposes of underperforming assets through expanded sales and outleases, auctions, and transfers to local entities,” it said.

It said that over five years, GSA awarded 737 disposal projects totaling over $387 million in proceeds, with 167 of them totaling $99 million in 2019.

The pace of property disposal has been criticized in congressional hearings and in reports by the GSA inspector general, the Public Building Reform Board and others—most recently, by the latter. Said GAO: “The issue is not the cycle time of the disposal process itself; GSA continuously meets its disposal cycle time measures. In FY 2019, GSA was on time for public sale disposals 99 percent of the time and 98 percent on time for non-competitive sales and donations. Once reported excess, properties move quickly through the disposal process.”

“However, getting properties in the pipeline for disposal typically takes longer. Properties can linger for years in vacant or partially vacant status while agencies try to obtain funding to improve or backfill the space. When there are funding constraints, alternative asset strategies have to be implemented including property disposal. In these cases, the entire life-cycle of the asset repositioning strategy can be a lengthy process,” it said.

It also said that with 60 percent of GSA leases set to expire by 2023 there is “a unique opportunity for GSA to restructure its lease portfolio. By targeting the highest cost leases, GSA estimates it can save billions over the life of new lease agreements from FY 2018 through FY 2023.”

Simplifying Leases Could Save Costs, GAO Says

Board Recommends More Action on Shedding Excess Agency Real Estate

Agencies May Be Buying Items that Others Are Giving Away, Says GAO

Federal Manager’s Handbook, 5th Ed.