Government management of real property improves slightly, report says

Since fiscal 2004, agencies have disposed of more than $8 billion in unnecessary assets, according to administration nominee.

Agencies shed less than 1 percent of their total real property assets in fiscal 2008, according to the Federal Real Property Report released on Monday.

The annual report, produced by the interagency Federal Real Property Council, said the federal government's fiscal 2008 real property profile consists of almost 896,000 buildings and structures, with a total area of 3.29 billion square feet and more than 41 million acres of land.

The slight decrease in assets and area in fiscal 2008 from the previous year can be attributed to a number of factors, including the disposal of 24,682 assets in fiscal 2008, space consolidation efforts and improved data collection and reporting quality.

The report showed that agencies continue to struggle with finding the proper use of their real property, among other issues. Fifty-three percent of the 268,000 buildings that reported data were being properly used. Slightly less than one-third of the federal facilities were being overused, while 13 percent were underemployed and 7 percent were not being used at all.

Management of real property has been a challenge for the government. In January 2003, the Government Accountability Office put the issue on its high-risk list because of "long-standing problems with excess and underutilized property, deteriorating facilities, unreliable real property data and overreliance on costly leasing."

GAO repeatedly has reported that the federal real property portfolio reflects an outdated business model based on the technological and transportation environment of the 1950s. With guidance and assistance from the Office of Management and Budget, agencies have tried to improve real property management

Danny Werfel, President Obama's nominee for controller of OMB's Office of Federal Financial Management, said last week at his confirmation hearing that real property management will continue to be a priority for this administration and for him personally, if he is confirmed. As controller, Werfel would serve on the Federal Real Property Council. During the Senate hearing, he touted his role in helping the government develop a comprehensive inventory of real property and dispose of excess assets with a total replacement value of $5 billion.

In his pre-hearing questionnaire, Werfel wrote that OMB and agencies have made significant progress by disposing of superfluous assets, developing a comprehensive database of real property assets and reducing underused space in the building inventory. Since fiscal 2004, agencies have disposed of more than $8 billion in unnecessary assets, he said.

"The federal government's stewardship of real property is critical to achieving agency missions and to spending taxpayer dollars effectively," Werfel said. "If confirmed, I will make it a top priority to pursue opportunities for rightsizing the federal real property inventory as well as ensure we are making the right property acquisition and financing decisions."

Werfel also pledged to work with Congress to enact reforms to allow agencies to recover costs related to the disposal of real property and use remaining proceeds to invest in the upkeep of existing properties.

OMB spokesman Tom Gavin said the administration's bottom-line goal is to provide better value to the American people, with success being measured in part through eliminating inefficient government spending, including ongoing investment in unnecessary real property.

"The president's budget laid out a plan that would help to break the decades-old culture of facility managers holding tightly to excess or underutilized properties," Gavin said. "The administration believes that we need to change the framework to one that incentivizes for agencies excess property identification and accelerates the ways in which these properties can be taken off the federal books."