Agencies need more flexibility to manage property, officials say

Lawmakers on Thursday renewed a push to give federal agencies more flexibility to manage the government's 3.2 billion square feet of real estate.

Rep. Tom Davis, R-Va., chairman of the House Government Reform Committee, said at a hearing that he would like to give more agencies broader authority to lease or sell property and collect revenue from the transactions. Some departments, including Veterans Affairs, State and Defense, already have such powers in a limited form, he said.

Agencies also need incentives to manage property well, Davis said. During the last congressional session, Davis introduced a bill that included real estate flexibility for agencies. The legislation enjoyed bipartisan support, but eventually died in the House. Davis didn't say if he planned to introduce similar legislation in the future.

Officials from the General Services Administration-which oversees 8,000 of the government's 525,000 buildings-the Office of Management and Budget and the General Accounting Office testified that such reforms are necessary to help agencies avoid wasting the taxpayers' money on maintaining underused buildings.

Money saved by leasing or selling superfluous facilities could go toward repairing heavily used and deteriorating buildings, Davis said. Much of the government's $328 billion worth of real estate suffers from disrepair and lax security, posing "health and safety threats to workers and visitors alike," he said.

Overall, the government has a $100 billion backlog of maintenance and repair projects, GSA Administrator Stephen Perry testified. GSA itself has a backlog worth $5.7 billion. In the meantime, the Defense Department, for example, spends $3 billion to $4 billion each year to maintain buildings that are not in use, according to Bernard Ungar, director of physical infrastructure issues at GAO.

"We must take action to stem this tide of deterioration of federal buildings and subsequent waste of taxpayer dollars," Davis said. "We cannot just throw more money at the problem."

For 12 years, Veterans Affairs has had the authority to lease property or facilities for up to 75 years, said Mark Catlett, principal deputy assistant secretary for management at the department. In that time, the department has rented out 27 properties and is working on renting 29 additional properties, he said. With money earned from the rentals, VA has acquired garages, transitional housing, child care centers and other facilities.

To effectively use money earned from renting space, agencies would have to keep an accurate inventory of needed maintenance projects, GAO and OMB officials cautioned. Both Ungar and Linda Springer, controller of the Office of Federal Financial Management at OMB, said that agencies lack reliable data on the extent of building repairs needed and the urgency of repairs already requested.

The 2002 Federal Property Asset Management Reform Act introduced by Davis and Rep. Pete Sessions, R-Texas, during the last congressional session required agencies to draw up maintenance inventories. Under the legislation, each agency would also hire a "real property officer," who would oversee real estate transactions. These precautions would help ensure that agencies use enhanced management flexibilities wisely, Davis said.

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