October 24, 2013
The government’s 218 most expensively leased facilities could be made more cost-effective if the General Services Administration had sufficient funding and better information on long-term consequences of leasing buildings for agencies, auditors found.
While GSA has demonstrated progress in pursuing the Obama administration’s agenda of reducing building costs and shifting more sites from leasing to federal ownership, it is hampered by tight funding and an absence of transparent information on long-term opportunity costs, said a report released Wednesday by the Government Accountability Office.
In a report requested by Sen. Tom Carper, D-Del., chairman of the Senate Homeland Security and Governmental Affairs Committee, GAO found that “GSA's capital-planning approach lacks transparency and a strategic focus that could support more informed decision making in this area. Specifically, GSA does not follow capital-planning practices involving alternatives evaluation, project prioritization, and long-term capital planning.”
GAO faulted GSA’s lease prospectuses for failing to discuss the length of time of the space it needs to place an agency on a new site, which is “key to understanding whether leasing or owning would be more cost-effective,” it said. GSA in nine high-value leases did not go through the prospectus process and in general had not systematically ranked the high-value leases in order of which is more likely to save the government money through conversion to federal ownership, auditors said. “This lack of information on the long-term consequences, including costs and risks, of high-value leases could inadvertently contribute to the federal government's overspending on long-term space needs.”
GAO reviewed all 218 high-value leases and performed case studies on 12.
The watchdog recommended that GSA create a strategic vision and improve transparency—including delivering more detailed information to Congress -- to better identify cost savings opportunities when current leases expire.
GSA managers agreed with the recommendations.
October 24, 2013