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Kicked to the Curb?


A leasing crisis looms at the Interior Department, the agency's inspector general warned in a recent report. More than 100 leases for building space are set to expire in June 2009, but the IG's office is worried that Interior might not get them renewed by then. "Some elements of DoI bureaus could find themselves having to vacate their premises," said the July report, ominously titled: "Absent Immediate Action, the Department of the Interior Faces Looming Leasing Crisis."

IG evaluators said the General Services Administration -- which reviews and in some cases controls leases for other federal agencies -- is slow and provides contradictory guidance that has leasing officials at Interior scratching their heads over how to make sure they have workspace for their employees. GSA must approve leasing arrangements, but the IG report said there's only one person at the agency to review new lease proposals from across the vast federal government.

MaryAnne Beatty, a spokeswoman for GSA's Public Buildings Service, said officials believe they're doing a good job overseeing Interior's lease requests. She provided a statement that said the agency has three full-time workers -- not just one -- reviewing leases. "This is a top priority for GSA," the statement said.

The conflict stems from a move by GSA to tighten control over building leases. In an October 2007 letter to agency heads, then-GSA administrator Lurita A. Doan announced that agencies could no longer arrange their own leases for spaces bigger than 19,999 square feet. Agencies would have to submit additional paperwork to justify smaller leases not arranged through GSA, she said. Officials could deny proposed leases if GSA had space available for them instead. Doan said the tighter rules were a response to audits by GSA's inspector general and the Government Accountability Office, which found agencies hadn't properly used their leasing authority.

Before 1996, GSA exercised strict control over leases, requiring many more of the government's rental agreements to go through the central agency. But that year, as part of the Clinton administration's push to decentralize control over many aspects of federal management, GSA announced that agencies could arrange their own leases if officials believed they could get a better deal themselves.

Leasing officials throughout the Interior Department are clearly chafing under GSA's renewed central control. Fish and Wildlife Service officials, for example, complained to the IG's evaluators that it took GSA more than three years to find them appropriate office space in Orlando, Fla.

The leasing issue between Interior and GSA illustrates a common problem in federal management: the control pendulum. In response to concerns about too much centralization, GSA decentralized leasing power in 1996. In response to concerns about too much decentralization, GSA re-centralized leasing power in 2007. Naturally, concerns about too much centralization have resurfaced. Federal property managers are riding the pendulum from side to side.


Brian Friel is founder of One Nation Analytics, an independent research, analytics and consulting firm for the federal market.

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