Agencies urge legislation to ease disposal of excess property

Top officials of five federal agencies Thursday asked for legislative help to clear obstacles they face in disposing of an estimated 21,000 federal properties no longer used but worth $17 billion.

Clay Johnson III, deputy director for management at the Office of Management and Budget, told the Senate Homeland Security and Governmental Affairs Financial Management Subcommittee his office will propose a five-year pilot program that would give agencies incentives, more flexibility and additional tools to help them dispose of unneeded property.

Asked the extent of the challenge, Johnson told the panel his full report is due June 15 but gave the preliminary estimate of 21,000 excess properties. Senate Homeland Security and Governmental Affairs Financial Management Subcommittee Chairman Thomas Carper, D-Del., said he is working up legislation on the matter but he wants to see action before five years are up. "I'd like to pick up the pace," he said.

Offering another measure of federal property management challenges, Mark Goldstein, director of Physical Infrastructure Issues for the Government Accountability Office, reported his staff found a backlog of $77 billion in maintenance in the entire federal government's inventory of 1.2 million properties.

Goldstein said the figure came from a survey of seven federal agencies that own the most federal property. The largest backlog of $57 million belongs to the Defense Department, he said.

A major barrier to disposing of a building or piece of land is the cost of arranging and going through with a sale. Sometimes holding onto the property and "going another year" deferring maintenance on a piece of property seems cheaper to a federal agency with annual budget concerns than selling it, Johnson said.

Financial Management Subcommittee ranking member Tom Coburn, R-Okla., noted another barrier includes the 17 steps an agency must complete before it can move ahead with a sale. The first step, satisfying the Stewart B. McKinney Act, can take a year, he said. That act requires federal agencies to explore whether excess property can be used by the homeless before selling it.

David Winstead, commissioner of public buildings at the General Services Administration and Philip Crone, deputy undersecretary of Defense, Installations and Environment for DOD, agreed with Johnson and Goldstein's proposal to allow federal agencies selling excess properties to keep some proceeds of a sale for the agency's use.

Boyd Rutherford, assistant secretary for administration at the Agriculture Department, testified that one of its component agencies, the Forest Service, is permitted to keep proceeds from land sales while other parts of USDA are not.

Robert Henke, assistant secretary for management at the Veterans Affairs Department, said VA benefits from a special leasing program all agencies do not have. Still, he agreed with all other witnesses that uniform incentives and tools should be made available to allow agencies to reduce the burden and cost to taxpayers of holding on to properties they no longer need.

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