OMB claims progress in disposing of unneeded real estate

New governmentwide database shows scope of problem, with $17.7 billion in unwanted properties.

An Air Force fueling complex in Norwalk, Calif., a maintenance shop in Yaounde, Cameroon, and a group of General Services Administration warehouses in Fort Worth, Texas, are among 130 properties prioritized by federal agencies for disposal.

In a new listing of excess federal real estate properties called for under a 2006 law, the Office of Management and Budget released the top properties for disposal. There are 76 domestic and 54 overseas properties.

The 130 properties have a combined replacement value of $362 million, and are just the highest priorities among about 500 executive branch properties worth $935 million that are for sale, according to OMB.

"Agencies have made great progress in more effectively managing our real property assets, but today's report shows the volume of unnecessary properties is such that agencies need additional tools to more effectively manage their real property," said Clay Johnson, OMB's deputy director for management, in releasing the report.

In addition to the properties already on sale, OMB identified about 21,000 properties worth $17.7 billion that have been listed by agencies as unneeded and as potential candidates for transfer, sale or destruction.

The vast majority of those are owned by the Defense Department, with the Navy and the Army responsible for $6.5 billion and $4.7 billion in assets, respectively, while the Energy Department came in third with $2.7 billion, followed by the Air Force with $1.4 billion.

OMB Controller Linda Combs said she hoped the report would stimulate congressional interest in a proposed pilot program that would allow agencies to retain 20 percent of the net proceeds from property disposal. Currently, agencies have little incentive to shed unwanted properties because disposal costs like marketing and any necessary environmental cleanup come out of their budgets, while in most cases any revenue is turned over to the treasury.

Ray Summerell, vice president for corporate development at Herndon, Va.-based VISTA Technology Services Inc., a company that provides real property services to federal agencies, said OMB's list represents a good start but falls short of what officials need to make good decisions about real property disposal.

"I would not want to be making spending decisions on the overall portfolio based on the quality of data that's there today," Summerell said. He said the asset replacement values collected by OMB are easier to come up with than market values but are not nearly as useful, since officials generally are not interested in replacing the properties identified for disposal.

He said agencies also lack hard data on costs, such as heating and repairs, associated with occupying a building. Without that information, managers cannot make sound decisions on whether the government is best served by maintaining a facility or finding an alternative.