White House gets down to cases on selling excess properties
Officials also released draft legislation aimed at overcoming the often-parochial political resistance to proposed sales by empowering an independent board of civilian experts in a process similar to the Defense Department's Base Realignment and Closure Commission.
"The administration is focused on the nation's long-term fiscal challenge to live within our means and crack down on waste," Jeffrey Zients, chief performance officer and deputy director for management at the Office of Management, said in a Wednesday conference call with reporters. "As the nation's largest landowner, the federal government owns 1.2 million properties and spends $20 billion a year to maintain them."
The public release of a map of some 7,000 of the estimated 12,000 domestic properties (another 2,000 are overseas) designated by their agencies as excess "will allow the public to see the locations and hold us accountable for selling them as well as helping us identify other possible properties for savings," Zients said.
He acknowledged, however, that many of the properties -- which range from warehouses to office complexes -- have little commercial value. The savings would come from the government no longer paying energy and other maintenance costs.
Highlighted in President Obama's January State of the Union address, the push to sell off federal dead space is a part of the administration's larger Accountable Government Initiative, Zients said. He cited progress and billions in savings from that project's efforts at curbing the growth of contracting, streamlining information technology purchasing, fixing broken projects and cutting procurement delivery times.
The new legislative proposal to convene a board of property experts -- who would bundle projects into strategic packages and present them to Congress for an up-or-down vote -- is necessary for three reasons, Zients said. One is to overcome the barrier of red tape -- including some 20 requirements officials must meet before they can sell properties. Zients said some of these requirements are well-intentioned, "but it doesn't make sense to have a one-size-fits-all approach used for a warehouse as well as for an office building."
A second barrier to sell-offs is financial, Zients said, as when an agency's short-term budget precludes spending on moving. And a third barrier is political interference: "Officials love to preside over ribbon cuttings, but the experience of getting rid of a property is a lot less rewarding," Zients said.
The hope is the independent board would save the government as much as $3 billion by the end of 2012 and $15 billion in the long run. It would do so by mimicking private sector companies' approaches to terminating leases, consolidating functions, and embracing worksite alternatives such as telecommuting, "hoteling" and co-location.
"Agencies just haven't kept up," Zients said. Such waste for taxpayers "shouldn't be tolerated anytime, but particularly in the current fiscal times. We have to bring 21st-century management to federal real estate, so we can change how Washington works."
Also on the conference call was OMB Controller Daniel Werfel, who outlined several concrete examples of agency successes in disposing of unneeded federal property:
- The General Services Administration has saved $74 million since President Obama first called for such efforts in a June 2010 memo, an example being the Homeland Security Department's decision to cut in half its leased space in Washington at 650 Massachusetts Avenue N.W., for a savings of $900,000;
- The Social Security Administration recently canceled plans for eight new offices, for a savings of $7 million;
- The Veterans Affairs Department has been renegotiating energy and utility prices at its hospitals, for a total of $16 million annual savings;
- And the Hardesty Federal Complex in Kansas City, Mo., will be auctioned on Thursday, Werfel noted.
Some 60 percent of the savings, Werfel said, will be used for deficit reduction and 40 percent for real estate strategies to create new savings.
A precise list of excess federal properties has long been sought by Rep. Jeff Denham, R-Calif., chairman of the House Transportation and Infrastructure Subcommittee on Economic Development, Public Buildings and Emergency Management.
Denham called the new map and proposal a good first step that "appears to be in line with the principles the Office of Management and Budget agreed to at our subcommittee hearing and with the discussions and meetings I have had with the administration since. I outlined my five principles for a civilian BRAC proposal in early April and will be introducing legislation very soon that encompasses these priorities."
Sen. Tom Carper, D-Del., chairman of the Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, is also preparing related legislation.
"Getting rid of the federal property we don't need and better managing the property we have so we spend fewer taxpayer dollars is a no-brainer, especially when we're struggling to curb a massive federal deficit," he said in a statement. "I welcome the administration's leadership in this area and will introduce legislation in the coming weeks that will include this initiative as part of a comprehensive plan to save money by better managing federal property," he said. "I will also hold a hearing on this issue in June. We all know that getting rid of unnecessary federal property isn't the silver bullet for our fiscal woes, but $15 billion isn't chump change either, and we need to do everything in our power to be better stewards of taxpayer money."