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United States Government Accountability Office: 
GAO: 

Report to the Chairman, Subcommittee on Federal Financial Management, 
Government Information, Federal Service, and International Security, 
Committee on Homeland Security and Governmental Affairs, U.S. Senate: 

June 2012: 

Federal Real Property: 

National Strategy and Better Data Needed to Improve Management of 
Excess and Underutilized Property: 

GAO-12-645: 

GAO Highlights: 

Highlights of GAO-12-645, a report to the Chairman, Subcommittee on 
Federal Financial Management, Government Information, Federal Service, 
and International Security, Committee on Homeland Security and 
Governmental Affairs, U.S. Senate View GAO-12-645. For more 
information, contact David Wise at (202) 512-5731 or at wised@gao.gov. 

Why GAO Did This Study: 

The federal government has made some progress addressing previously 
identified issues with managing federal real property. This includes 
establishing FRPC—chaired by the Office of Management and Budget (OMB)—
which created the FRPP database managed by GSA. GAO was asked to 
determine the extent to which (1) the FRPP database accurately 
describes the nature, use, and extent of excess and underutilized 
federal real property, and (2) progress is being made toward more 
effective management of these properties. GAO analyzed the data 
collection process and agency data, visited 26 sites containing excess 
and underutilized buildings from five civilian federal real property 
holding agencies with significant portfolios, and interviewed 
officials from these five agencies and OMB staff about how they 
collect FRPP data and manage excess and underutilized properties. 

What GAO Found: 

The Federal Real Property Council (FRPC) has not followed sound data 
collection practices in designing and maintaining the Federal Real 
Property Profile (FRPP) database, raising concern that the database is 
not a useful tool for describing the nature, use, and extent of excess 
and underutilized federal real property. For example, FRPC has not 
ensured that key data elements—including buildings' utilization, 
condition, annual operating costs, mission dependency, and value—are 
defined and reported consistently and accurately. GAO identified 
inconsistencies and inaccuracies at 23 of the 26 locations visited 
related to these data elements (see the figure for an example). As a 
result, FRPC cannot ensure that FRPP data are sufficiently reliable to 
support sound management and decision making about excess and 
underutilized property. 

The federal government has undertaken efforts to achieve cost savings 
associated with better management of excess and underutilized 
properties. However, some of these efforts have been discontinued and 
potential savings for others are unclear. For example, in response to 
requirements set forth in a June 2010 presidential memorandum for 
agencies to achieve $3 billion in savings by the end of fiscal year 
2012, the General Services Administration (GSA) reported approximately 
$118 million in lease cost savings resulting from four new 
construction projects. However, GSA has yet to occupy any of these 
buildings and the agency’s cost savings analysis projected these 
savings would occur over a 30-year period—far beyond the time frame of 
the memorandum. The five federal agencies that GAO reviewed have taken 
some actions to dispose of and better manage excess and underutilized 
property, including using these properties to meet space needs by 
consolidating offices and reducing employee work space to use space 
more efficiently. However, they still face long-standing challenges to 
managing these properties, including the high cost of property 
disposal, legal requirements prior to disposal, stakeholder 
resistance, and remote property locations. A comprehensive, long-term 
national strategy would support better management of excess and 
underutilized property by, among other things, defining the scope of 
the problem; clearly addressing achievement goals; addressing costs, 
resources, and investments needed; and clearly outlining roles and 
coordination mechanisms across agencies. 

Figure: Building Incorrectly Reported in the FRPP Database: 

[Refer to PDF for image: 2 photographs] 

Source: GAO analysis of agency information' 

Note: Data for this dilapidated U.S. Department of Agriculture 
building indicated that it was in near perfect condition and fully 
utilized even though it was vacant at the time GAO visited the site 
and it had multiple safety and health issues including rat and beehive 
infestations. The building has since been demolished. 

[End of figure] 

What GAO Recommends: 

View [hyperlink, http://www.gao.gov/products/GAO-12-645]. For more 
information, contact David Wise at (202) 512-5731 or at wised@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Excess and Underutilized Property Data Are Inconsistent and Inaccurate 
because of Lack of Sound Data Collection Practices: 

Although Some Progress Has Been Made, Federal Property Management Is 
Still Challenging and Efforts Lack a National Strategy: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Federal Real Property Council Fiscal Year 2010 Inventory 
Data Elements and Descriptions: 

Appendix III: Comments from the Office of Management and Budget: 

Appendix IV: Comments from the General Services Administration: 

Appendix V: Comments from the Department of Veterans Affairs: 

Appendix VI: Comments from the U.S. Department of Agriculture: 

Appendix VII: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Definitions of FRPP Performance Measures in 2010 FRPC 
Guidance: 

Table 2: FRPP Building Utilization Categories: 

Table 3: Utilization and Annual Operating Cost Data for All Assets 
Reported by FRPC in 2010: 

Table 4: Identified Problems with Agencies' Cost Savings Estimates 
Related to Excess and Underutilized Property: 

Table 5: Desirable Characteristics for a National Strategy, from 
Conception to Implementation: 

Figures: 

Figure 1: Example of Inaccurate Reporting of Utilization Data at a VA 
site: 

Figure 2: Example of Inaccurate Reporting of Utilization Data at a 
USDA site: 

Figure 3: How Alternative Repair Needs Designations Affect Condition 
Index Data: 

Figure 4: Example of Inconsistent FRPP Condition Index Reporting at an 
Interior Site: 

Figure 5: Examples of Federal Property Reported as Being in Excellent 
Condition in the FRPP Database: 

Figure 6: Excess and Inactive Buildings with High Annual Operating 
Costs: 

Figure 7: Exterior of the Eisenhower Executive Office Building: 

Figure 8: Empty Buildings in Poor Condition with High PRVs: 

Figure 9: Examples of Large Reported PRV Fluctuations for Federal Real 
Properties: 

Figure 10: Alternate Use of a Concrete Slab by GSA: 

Figure 11: Interior Property No Longer Slated for Demolition because 
of Historic Designation Challenges: 

Figure 12: Vacant DOE Property with Radiological Contamination: 

Figure 13: Abandoned and Contaminated GSA Property: 

Abbreviations: 

CBO: Congressional Budget Office: 

CPAIS: Corporate Property Automated Information System: 

CPRA: Civilian Property Realignment Act: 

DOE: Department of Energy: 

FRPC: Federal Real Property Council: 

FRPP: Federal Real Property Profile: 

GSA: General Services Administration: 

OMB: Office of Management and Budget: 

PRV: plant replacement value: 

USDA: Department of Agriculture: 

VA: Department of Veterans Affairs: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

June 20, 2012: 

The Honorable Thomas R. Carper:
Chairman:
Subcommittee on Federal Financial Management, Government Information, 
Federal Service, and International Security:
Committee on Homeland Security and Governmental Affairs:
United States Senate: 

Dear Mr. Chairman, 

The federal government's real property portfolio is vast and diverse 
and includes almost 400,000 buildings that are located throughout the 
country and are owned and leased by different federal agencies. We 
have noted long-standing problems with how this property is managed, 
designating federal real property management as a high-risk area in 
January 2003.[Footnote 1] In 2004, the administration added managing 
federal real property to the President's Management Agenda and the 
President issued an executive order establishing the Federal Real 
Property Council (FRPC). FRPC is chaired by the Deputy Director for 
Management of the Office of Management and Budget (OMB) and is 
composed of all agency Senior Real Property Officers, the Controller 
of OMB, the Administrator of the General Services Administration 
(GSA), and any other full-time or permanent part-time federal 
officials or employees as deemed necessary by the Council Chairman. 
The executive order required FRPC to work with GSA to establish and 
maintain a single, comprehensive database describing the nature, use, 
and extent of all real property under the custody and control of 
executive branch agencies, except when otherwise required for reasons 
of national security.[Footnote 2] FRPC created the Federal Real 
Property Profile (FRPP) to meet this requirement. 

These efforts notwithstanding, we have reported that the federal 
government continues to face a number of challenges to effectively 
managing its real property.[Footnote 3] In particular, we have 
reported on challenges to disposing of excess properties and making 
better use of properties that are underutilized.[Footnote 4] 

In response to your request that we assess issues related to excess 
and underutilized federal real property, this report addresses two 
objectives: 

1) the extent to which the FRPP database consistently and accurately 
describes the nature, use, and extent of excess and underutilized 
federal real property and: 

2) the extent to which progress is being made toward more effectively 
managing excess and underutilized federal real property. 

To address these objectives, we obtained and analyzed FRPP submissions 
and other real property data from five civilian[Footnote 5] real 
property-holding agencies; interviewed real property officers at these 
agencies; visited sites where the agencies had reported excess or 
underutilized properties; interviewed OMB staff; and reviewed 
pertinent laws, regulations, policies, and other documents related to 
the agencies' real property management. The five agencies we selected 
for review were GSA, the Departments of Energy (DOE), the Interior 
(Interior), Veterans Affairs (VA), and Agriculture (USDA). On the 
basis of the available data, these five agencies report approximately 
two-thirds of the building square footage reported by civilian 
agencies. We obtained answers to a set of questions about managing 
excess and underutilized properties that we posed to the senior real 
property officers of these five agencies. For each agency, we also 
obtained fiscal year 2008, 2009, and 2010 FRPP submissions, as well as 
data from each agency's internal systems that were the source of their 
FRPP submissions.[Footnote 6] According to our conversations with 
agency officials, FRPP submissions can be changed only by the agency 
submitting the data. As a result, we believe that the FRPP submissions 
obtained from the agencies match the data contained in the FRPP 
database and are sufficiently reliable for the purpose of evaluating 
the consistency and accuracy of the corresponding data in the FRPP 
database. To gather detailed examples of excess and underutilized 
properties and to learn about the processes by which data on such 
properties are collected and submitted to the FRPP database, we 
visited a nonprobability sample[Footnote 7] of approximately 180 
buildings at 26 sites where excess or underutilized owned buildings 
had been reported by the five civilian agencies.[Footnote 8] We 
selected sites clustered around four U.S. cities.[Footnote 9] In 
selecting sites, we considered the number of excess or underutilized 
buildings reported at each site and the distance of each site from the 
city. Across the 26 sites, we attempted to balance the numbers of 
sites and buildings selected for the five agencies, and the numbers of 
excess versus underutilized buildings selected. Prior to each visit, 
we analyzed data for each building and developed a set of questions 
about the data submission for local property managers. During site 
visits, we interviewed local property managers, compared what we 
observed at each building with the FRPP data for that building, and 
documented what we observed. Where possible, we took photographs of 
the buildings.[Footnote 10] In addition to this work related to the 
FRPP, we interviewed OMB staff because OMB chairs FRPC, oversees the 
implementation of the executive order, and has set cost savings goals 
related to excess and underutilized properties. 

We conducted this performance audit from May 2011 to June 2012 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. Further 
details on our scope and methodology can be found in appendix I. 

Background: 

In 2010, federal agencies reported about 3.35 billion square feet of 
building space to the FRPP: 79 percent of the reported building space 
was federally owned, 17 percent was leased, and 4 percent was 
otherwise managed.[Footnote 11] The data indicated that the agencies 
used most of the space--about 64 percent--as offices, warehouses, 
housing, hospitals, and laboratories. The five agencies we reviewed--
GSA, DOE, Interior, VA, and USDA--reported owning or leasing more than 
866 million square feet of building space, or about 25 percent of the 
total reported square footage for all agencies.[Footnote 12] 

Initially, FRPC defined 23 FRPP data elements to describe the federal 
government's real property inventory. By 2008, FRPC had expanded the 
number of data elements included in the FRPP to 25.[Footnote 13] FRPC 
requires agencies to update their FRPP real property data annually. 
Each asset included in the database is assigned a unique 
identification number that allows for tracking of the asset to the 
unique data that describe it. 

In addition to developing the database, the 2004 executive order 
required FRPC to develop guidance and best practices for real property 
management and develop performance measures to determine the 
effectiveness of federal real property management. The executive order 
specifically states that performance measures shall be designed "to 
enable the heads of executive branch agencies to track progress in the 
achievement of Governmentwide property management objectives, as well 
as allow for comparing the performance of executive branch agencies 
against industry and other public sector agencies." In 2005, in its 
initial annual guidance to federal agencies, FRPC designated four FRPP 
data elements as performance measures: utilization, condition index, 
annual operating costs, and mission dependency. The definitions of 
these four data elements in 2010 can be found in table 1.[Footnote 14] 

Table 1: Definitions of FRPP Performance Measures in 2010 FRPC 
Guidance: 

Data element: Utilization; 
Description: The state of having been made use of, that is, the rate 
of utilization[A]; 
How data are reported: The utilization of a building is recorded as 
overutilized, utilized, underutilized, or not utilized[B]. 

Data element: Condition index; 
Description: General measure of the constructed asset's condition at a 
specific point in time; 
How data are reported: Condition index is calculated as 1 minus the 
ratio of repair needs to plant replacement value multiplied by 100. 

Data element: Annual operating costs; 
Description: Expenses for recurring maintenance and repair costs, 
utilities, cleaning or janitorial costs, and roads or grounds expenses; 
How data are reported: Annual operating costs must be greater than or 
equal to zero. 

Data element: Mission dependency; 
Description: The value an asset brings to the performance of the 
mission as determined by the governing agency; 
How data are reported: Mission dependency must be recorded as one of 
three options: 
1. mission critical; 
2. mission dependent, not critical; 
3. not mission dependent. 

Source: GAO analysis of FRPC information. 

[A] For office and hospital space, utilization measures the ratio of 
occupancy to current design capacity, for warehouses it measures the 
ratio of gross square feet occupied to current design capacity, for 
laboratories it measures the ratio of active units to current design 
capacity, and for housing it measures the percentage of individual 
units that are occupied. 

[B] Agencies are required to submit utilization information for 
offices, hospitals, warehouses, laboratories, and housing. Any 
building categorized as a post office, prison or detention center, 
school, museum, industrial, service, communication systems, or 
"other," including "other institutional uses" does not require 
utilization information. Buildings categorized as housing are not 
permitted to receive a designation of overutilized or not utilized 
(not applicable must be recorded in these cases). FRPC guidance 
directed agencies to maintain the actual utilization percentage for 
audit purposes up to 2010 and some agencies reported the percentage 
voluntarily. Beginning in 2011, agencies were required to report 
utilization using actual percentages rather than the four-way 
classification described in this table. 

[End of table] 

FRPC's 2010 Guidance for Real Property Inventory Reporting provides 
specific guidelines on how to report a building as overutilized, 
underutilized, utilized, or not utilized based on the building's use 
and the percentage of the building that is used (see table 2). 

Table 2: FRPP Building Utilization Categories: 

Building use: Office; 
Overutilized: greater than 95%; 
Utilized: 75-95%; 
Underutilized: less than 75%; 
Not utilized: Not applicable. 

Building use: Hospital; 
Overutilized: greater than 95; 
Utilized: 70-95; 
Underutilized: 25-70; 
Not utilized: less than 25%. 

Building use: Warehouse; 
Overutilized: greater than 85; 
Utilized: 50-85; 
Underutilized: 10-50; 
Not utilized: less than 10. 

Building use: Laboratory; 
Overutilized: greater than 85; 
Utilized: 60-85; 
Underutilized: 30-60; 
Not utilized: less than 30. 

Building use: Housing; 
Overutilized: Not applicable; 
Utilized: 85-100; 
Underutilized: less than 85; 
Not utilized: Not applicable. 

Source: FRPC. 

[End of table] 

FRPC has been collecting FRPP data on federal government properties 
since 2005. We have reported that results-oriented organizations 
follow a number of sound data collection practices when gathering the 
information necessary to achieve their goals.[Footnote 15] For 
example, these organizations recognize that they must balance their 
ideal performance measurement systems against real world 
considerations, such as the cost and effort involved in gathering and 
analyzing data. These organizations also tie performance measures to 
specific goals and demonstrate the degree to which the desired results 
are achieved. Conversely, we have observed that organizations that 
seek to manage an excessive number of performance measures may risk 
creating a confusing excess of data that will obscure rather than 
clarify performance issues. Limiting the number of measures to the 
vital few not only keeps the focus of data collection where it 
belongs, it helps ensure that the costs involved in collecting and 
analyzing the data do not become prohibitive. Furthermore, results-
oriented organizations report on the performance data they collect. 

Following the implementation of the executive order and nationwide 
data collection efforts, we have reported that agencies continue to 
face challenges with managing excess and underutilized properties. 
[Footnote 16] For example, we have previously reported that the legal 
requirements agencies must adhere to, such as requirements for 
screening and environmental cleanup as well as requirements related to 
historical properties, present a challenge to consolidating federal 
properties.[Footnote 17] In addition, before GSA can dispose of a 
property that an agency no longer needs, it must offer the property to 
other federal agencies. If other federal agencies do not need the 
property, GSA must then make the property available to state and local 
governments as well as certain nonprofit organizations and 
institutions for public benefit uses such as homeless shelters, 
educational facilities, or fire and police training centers. According 
to agency officials, as a result of this lengthy process, excess or 
underutilized properties may remain in an agency's possession for 
years. Furthermore, the costs of disposing of property can further 
hamper an agency's efforts to address its excess and underutilized 
property problems. For example, properties that contain radiological 
contamination must be mitigated before they can be disposed. In 
addition, the interests of multiple--and often competing--stakeholders 
may not align with the most efficient use of government resources and 
complicate real property decisions. 

Despite these challenges, both the previous and current 
administrations have implemented a number of cost savings initiatives 
associated with excess and underutilized property. In August 2005, the 
administration set a goal to reduce the size of the federal inventory 
by $15 billion by 2009.[Footnote 18] In June 2010, the President 
directed federal civilian agencies to achieve $3 billion in savings by 
the end of fiscal year 2012 through reducing annual operating costs, 
generating income through disposing of assets, using existing real 
property more effectively by consolidating existing space, expanding 
telework,[Footnote 19] and other space realignment efforts.[Footnote 
20] Furthermore, on May 4, 2011, the administration proposed 
legislation--referred to as the Civilian Property Realignment Act 
(CPRA)--to establish a legislative framework for disposing of and 
consolidating real property, among other things. In September 2011, 
[Footnote 21] OMB projected that the proposal would save the 
government $4.1 billion over 10 years from sales proceeds, and that 
savings would also be achieved through decreased operating costs and 
efficiencies.[Footnote 22] However, the Congressional Budget Office 
(CBO) has concluded that CPRA would probably not result in a 
significant increase in proceeds from the sale of federal properties 
over the next 10 years.[Footnote 23] 

Excess and Underutilized Property Data Are Inconsistent and Inaccurate 
because of Lack of Sound Data Collection Practices: 

FRPC has not followed sound data collection practices, and, as a 
result, FRPP data do not describe excess and underutilized properties 
consistently and accurately. Consistent with this, FRPP data did not 
always accurately describe the properties at the majority of sites we 
visited and often overstated the condition and annual operating costs, 
among other things. 

FRPP Data Do Not Describe Excess and Underutilized Federal Real 
Properties Consistently and Accurately: 

Agency officials described ways in which key performance measures in 
the FRPP database are reported inconsistently or inaccurately. At 23 
of the 26 sites that we visited, we found inconsistencies or 
inaccuracies related to the following performance measures described 
in the background: (1) utilization, (2) condition index, (3) annual 
operating costs, and (4) mission dependency. As a result of the 
discussions we had with agency officials about how FRPP data are 
reported, as well as the inconsistencies and inaccuracies described in 
the following sections, we question whether FRPP data provide an 
adequate tool for decision making or measuring performance, such as 
the cost savings initiatives put forth by OMB. 

Utilization: 

We found that the agencies we reviewed do not report property 
utilization consistently. FRPC guidance states that for offices, 
hospitals, and warehouses, utilization is the ratio of occupancy to 
current design capacity.[Footnote 24] Although USDA requires its 
agencies to follow FRPC guidance, USDA stated that FRPC has not 
established governmentwide definitions for occupancy or current design 
capacity. As a result, each agency within USDA has its own internal 
procedures for determining a building's utilization level. Moreover, 
VA defines utilization differently from FRPC guidance, that is, the 
ratio of "ideal space" to existing space, which VA stated is different 
from occupancy. Despite the inconsistency of this method of defining 
utilization with FRPC guidance, VA officials reported that OMB staff 
approved of their method of reporting utilization.[Footnote 25] 
Furthermore, OMB acknowledged that it is standard practice for 
agencies to measure utilization tailored to the agencies' specific 
needs and circumstances. 

Among the 26 federal sites we visited, we found utilization data 
inconsistencies or inaccuracies for properties at 19 of these sites. 
For example, at one VA site, a building we toured was reported to have 
a utilization of 39 percent in 2010 FRPP data and 45 percent 
utilization in 2011 source data, even though local officials said this 
building has been fully occupied since 2008. See figure 1. Another 
building that we toured at the same site was reported to be 0 percent 
utilized in 2010 FRPP data[Footnote 26] and 59 percent utilized in 
2011 agency source data.[Footnote 27] However, all but one of the 
rooms in the building were vacant, and local officials said only 10 
percent of the building was utilized.[Footnote 28] 

Figure 1: Example of Inaccurate Reporting of Utilization Data at a VA 
site: 

[Refer to PDF for image: table illustrated with 4 photographs] 

Fully occupied office building: 
Exterior and interior images: [2 photographs]; 
2010 FRPP reported utilization: 39%; 
Reported utilization according to VA October 2011 source data: 45%; 
Actual occupancy according to VA local officials during December 2011 
site visit: 100%. 

Mostly vacant office building: 
Exterior and interior images: [2 photographs]; 
2010 FRPP reported utilization: 0%; 
Reported utilization according to VA October 2011 source data: 59%; 
Actual occupancy according to VA local officials during December 2011 
site visit: 10%. 

Source: GAO analysis of VA information. 

[End of figure] 

In addition, at one USDA site we visited, we found two houses that 
have been empty since 2009; however, they were both reported to the 
FRPP as utilized for 2009 and 2010. See figure 2 to view images of 
these two USDA buildings. We also found problems with the utilization 
data at properties owned by the other three agencies included in our 
review. 

Figure 2: Example of Inaccurate Reporting of Utilization Data at a 
USDA site: 

[Refer to PDF for image: table illustrated with 4 photographs] 

Vacant house since 2009: 
Exterior and interior images: [2 photographs]; 
Reported utilization (2009-2010)[A]: Utilized; 
Actual occupancy according to local officials (2009-2010): Vacant. 

Vacant house since 2009:   
Exterior and interior images: [2 photographs]; 
Reported utilization (2009-2010)[A]: Utilized; 
Actual occupancy according to local officials (2009-2010): Vacant. 

Source: GAO analysis of VA information. 

[A] According to FRPC guidance, housing units must be 85 percent to100 
percent occupied to warrant a utilization score of "utilized." 

[End of figure] 

Condition Index: 

As was the case with utilization, we found that agencies do not report 
the condition of their properties consistently. According to FRPC 
guidance, condition index is a general measure of the constructed 
asset's condition and is calculated by using the ratio of repair needs 
to the plant replacement value (PRV).[Footnote 29] Needed repairs are 
determined by the amount of repairs necessary to ensure that a 
constructed asset is restored to a condition substantially equivalent 
to the originally intended and designed capacity, efficiency, or 
capability.[Footnote 30] However, we found that agencies do not always 
follow this guidance. For example, when agencies have determined that 
a property is not needed and will ultimately be disposed, they may 
assign no repair needs to that property even though the property may 
be in a state of significant disrepair. Doing so allows agencies to 
use their limited funds to maintain properties that they regularly 
use, but it can lead to condition index data that do not accurately 
reflect each property's condition as set forth in FRPC guidance. 
Figure 3 is an example of how the condition index of a building with 
high repair needs can significantly change depending on whether agency 
officials choose to follow FRPC guidance or if they assign zero 
dollars in repair needs because repairs are not planned. 

Figure 3: How Alternative Repair Needs Designations Affect Condition 
Index Data: 

[Refer to PDF for image: 2 tables] 

Scenario A: Condition index according to FRPC guidance: 
Plant replacement value (PRV): $500,000; 
Repair needs $400,000; 
Calculation CI = [1 — ($repair needs/$PRV)] x 100; 
Condition index (CI) 20%. 

Scenario B: Condition index when repair needs are set to zero because 
repairs are not planned: 
Plant replacement value (PRV): $500,000; 
Repair needs $0; 
Calculation CI = [1 — ($repair needs/$PRV)] x 100; 
Condition index (CI) 100%. 

Source: GAO analysis. 

[End of figure] 

While it may be a good practice not to assign repair needs to 
dilapidated buildings that no longer support agencies in carrying out 
their mission, the fact that these buildings may report a perfect or 
near-perfect condition index provide decision makers with an 
inconsistent representation of the condition of buildings at a given 
site. We found examples at all five agencies we visited where a 
property in very poor condition received a higher condition index 
score than a property in good condition. Figure 4 demonstrates 
examples of this at an Interior site we visited. 

Figure 4: Example of Inconsistent FRPP Condition Index Reporting at an 
Interior Site: 

[Refer to PDF for image: table illustrated with 4 photographs] 

Vacant cabin with collapsing roof and walls: 
Exterior and interior images: [2 photographs]; 
Reported Condition Index: 100%; 
Condition according to officials: Poor.  

Housing unit in good condition (seasonally occupied): 
Exterior and interior images: [2 photographs]; 
Reported Condition Index: 87%; 
Condition according to officials: Good.  

Source: GAO analysis of Interior information. 

[End of figure] 

We found condition index reporting inconsistencies and inaccuracies at 
21 of 26 sites visited. The practice of assigning no repair needs to 
many excess and underutilized buildings because agencies have no 
intention of repairing them led to severely blighted buildings 
receiving excellent condition scores.[Footnote 31] Figure 5 
illustrates several separate buildings that received high condition 
index scores, even though they are in poor condition. Some of the 
problems with these buildings include asbestos, mold, collapsed walls 
or roofs, health concerns, radioactivity, deterioration, and flooding. 

Figure 5: Examples of Federal Property Reported as Being in Excellent 
Condition in the FRPP Database: 

[Refer to PDF for image: 9 photographs] 

Old firehouse with collapsed ceilings; 
Cabin with collapsed roof; 
Warehouse with radiological contamination;    
Warehouse with a collapsing ceiling; 
Mostly vacant laboratory building with ceiling and wall damage; 
Cabin with large tree that has fallen through the roof; 
Vacant trailer with safety and health issues (rat and beehive 
infestation). Now demolished; 
Warehouse with exterior damage; 
Building under renovation. 

Sources: GAO and DOE. 

[End of figure] 

Annual Operating Costs: 

Agencies are required to report annual operating costs to FRPP for 
each building. However, we found that agencies are not always able to 
determine the annual operating costs at the building level and this 
can lead to inaccurate and misleading data. For example, some DOE 
buildings are not individually metered, so DOE officials who manage 
those buildings collect annual operating costs data at the site level 
and apportion these costs to the individual buildings according to 
square footage. Additionally, VA told us that many of its buildings 
are located on medical campuses and are not individually metered; 
therefore, utilities cannot be measured for one particular building. 

We found data inconsistencies and inaccuracies for annual operating 
costs at 19 of 26 sites that we visited. For example, an Interior 
property had large fluctuations in annual operating costs from one 
year to the next that did not seem to match the utilization of the 
building. It was listed as utilized in 2008 but had recorded annual 
operating costs of $0. In 2009, the building was listed as 
underutilized but the annual operating costs were listed as $10,516. 
In 2010, the property was then listed as underutilized with annual 
operating costs of $18,981, an increase of more than 80 percent. An 
Interior official at this site told us that annual operating costs are 
determined using a complicated calculation that includes a compilation 
of data from various sources controlled at the regional and 
headquarters levels. Furthermore, because of the difficulty in 
measuring operating costs at the building level, only one of USDA's 
component agencies even attempts to measure the actual operating costs 
of each individual building. As such, all other agencies within USDA 
have developed their own methods for determining annual operating 
costs at the location and building levels, and this can cause large 
fluctuations in reported operating costs. For example, a USDA property 
we visited had reported annual operating cost increases from $374,000 
in 2009 to more than $1 million in 2010. This increase in operating 
costs occurred while the status, utilization, condition, and value of 
the property remained steady during the same time frame. Officials at 
this site told us another challenge in reporting these costs is that 
they do not have the financial system for determining actual operating 
costs. 

In addition to large fluctuations in annual operating costs from one 
year to the next, we also identified instances of buildings that 
report high annual operating costs even though all utilities have been 
turned off and no maintenance was being conducted. This could lead to 
inflated expectations of the savings potential if these buildings were 
disposed. Figure 6 provides examples of some excess and inactive 
buildings with high annual operating costs. 

Figure 6: Excess and Inactive Buildings with High Annual Operating 
Costs: 

[Refer to PDF for image: table with 2 photographs] 

Property image: [photograph]: Building set for demolition; 
Agency: VA; 
Annual operating costs: $20,885 (2010); 
Utilization: 0%; 
Status: Inactive; 
Property management comment: VA officials told us that operating 
expenses are prorated from the facility level to the individual 
buildings based on square footage and usage; 
Property description: This building received a utilization score of 0 
percent for all years we reviewed. Officials said the building is set 
to be demolished. 

Property image: [photograph]: Vacant warehouse; 
Agency: GSA; 
Annual operating costs: $474,044 (2010); 
Utilization: 0%; 
Status: Excess; 
Property management comment: GSA officials said they allocate all 
operating costs to all buildings at a facility, whether used or 
vacant, per square foot. Officials also said GSA is required to 
maintain even unused buildings in operating condition; 
Property description: This building was sold effective July 1, 2011, 
and had been vacant since October 2008. 

Source: GAO analysis of agency information. 

[End of figure] 

Mission Dependency: 

FRPP guidance provides very little information to agencies on how 
mission dependency should be reported, and the data are generally not 
useful for measuring performance. For example, agencies have three 
options for assigning mission dependency to their assets: mission 
critical; mission dependent, not critical; and not mission dependent. 
[Footnote 32] A short definition of each category is included but no 
additional guidance or clarification is provided. We found that 
agencies do not measure mission dependency in a consistent manner 
because the data element can be measured differently by each agency. 
For example, one office within DOE uses a complex decision tree to 
determine the mission dependency of assets while another office at DOE 
reports mission dependency based on the operating status of a 
building. In addition, VA's designation of mission dependency is a 
function of utilization. Assets with a high percentage of utilization 
are labeled "mission critical" and those with low utilization are 
labeled "not mission dependent." VA officials said they use this 
method because it is the best way for them to manage the mission 
dependency of their assets--for example, hospitals measure performance 
by the number of patients served. However, since mission dependency is 
based strictly on utilization in VA data, this performance measure 
does not provide any new information on the asset in the FRPP database. 

In fact, FRPC guidance indicates that the reported value of this 
performance measure is determined separately by each governing agency; 
thus, it is unclear how this measure can have any meaning as a 
performance measure across agencies when reported to the national 
database. Furthermore, GSA officials familiar with FRPP submissions 
told us that mission dependency is a subjective data element. As such, 
we could not determine whether FRPP data accurately described the 
mission dependency of the buildings we visited. For example, we 
visited the Eisenhower Executive Office Building in Washington, D.C., 
which is listed as "mission dependent, not critical" even though this 
building is located next to the White House and houses offices for key 
White House staff. Figure 7 provides exterior images of the Eisenhower 
Executive Office Building as it is being renovated. 

Figure 7: Exterior of the Eisenhower Executive Office Building: 

[Refer to PDF for image: 2 photographs] 

Eisenhower Executive Office Building under renovation. 

Source: GSA. 

[End of figure] 

Value (PRV): 

In addition to identifying the four performance measures discussed 
previously, FRPC also identified value as a data element for the FRPP 
database. Value is not identified as a performance measure by FRPC, as 
discussed earlier, but it is a key data element and central component 
for calculating condition index. However, the concept of value in the 
FRPP can be misleading. Value in FRPC guidance is defined as the cost 
of replacing an existing constructed asset at today's standards and is 
known as PRV.[Footnote 33] However, GSA officials cautioned us not to 
think of PRV as an asset's actual worth because it is not an appraisal 
of the property or any kind of measure of the asset's market value. 
Moreover, we found that PRV is typically much higher than the actual 
worth of the building because PRV does not take into account market 
conditions or the condition of the asset. For example, in May 2011, 
GSA auctioned a parcel of land that contained several buildings and 
structures for $6.4 million. We visited 10 of these properties before 
the auction was finalized. Although the values may have been 
calculated according to FRPC guidance, the total PRV for the 
properties we saw was well over twice that amount (almost $17 million) 
not counting the value of the land itself. (The value of land is not 
reported to the FRPP.) 

Additionally, according to agency officials, many excess properties do 
not have the potential for generating revenue for the federal 
government. Specifically, USDA officials reported that a lot of excess 
properties just need to be demolished because they cannot be sold or 
conveyed. Indeed, we visited more than 80 buildings on our site visits 
that agencies plan to demolish when they have the resources to execute 
the demolitions. These properties would never be replaced or sold. 
Some of these properties' PRVs are very high by definition, even 
though the condition of the building clearly indicates that the actual 
market or appraisal value would be much lower (because condition does 
not factor into PRV calculations). Figure 8 shows properties that have 
high reported values and high condition indexes even though they are 
in poor condition and have remained unused for many years. By 
examining the data alone, these properties would not appear to be 
candidates for demolition. However, these properties actually have no 
value to the agencies, according to agency officials, and may even be 
considered liabilities. In these cases, even though the agencies may 
be following FRPC guidance, the high PRV values could be misleading if 
used as an indicator of property value and potential revenue. 

Figure 8: Empty Buildings in Poor Condition with High PRVs: 

[Refer to PDF for image: table with 6 photographs] 

Biology Building: 
Property images: [2 photographs]: Vacant biology laboratory building 
in poor condition; 
Agency: DOE; 
2010 reported PRV: $90,136,214; 
2010 reported condition: 88%; 
Status: The building has been shut down for many years and is awaiting 
demolition.  

Veterans' Center: 
Property images: [2 photographs]: Vacant Veterans' Center building in 
poor condition; 
Agency: VA; 
2010 reported PRV: $1,673,690; 
2010 reported condition: 100%; 
Status: This building is inactive and has been empty for over 10 
years.  

Firehouse: 
Property images: [2 photographs]: Firehouse with collapsed ceilings 
and mold; 
Agency: GSA; 
2010 reported PRV: $1,026,188; 
2010 reported condition: 100%; 
Status: This building is designated excess and has not been used for 
10-12 years.  

Sources: GAO analysis of agency information and DOE (Biology Building 
photographs). 

[End of figure] 

We are not suggesting that FRPC should create a data element that 
describes the market value or actual worth of a building. Interior 
officials told us that evaluating the market value of federal 
properties is beyond the abilities of many government real property 
management staff, since they are not engaged in the real estate 
market. Furthermore, GSA officials said that it would be cost 
prohibitive to conduct market value appraisals of all federal 
property, and that it would be impractical, considering that many 
excess properties will be demolished rather than sold or conveyed. 
However, commonly referring to the PRV as "value" could perpetuate 
confusion on the nature of the federal government's property portfolio 
and an overstatement of its worth. Therefore, any broad statements 
made about the overall worth of the federal portfolio cannot be 
substantiated with FRPP data. As such, the federal government does not 
have any means of accurately characterizing the overall value of the 
federal portfolio. 

In addition to the confusion that referencing the PRV as "value" can 
bring, we also found inconsistencies in the reported PRV at the sites 
we visited. For example, we found instances of a property's PRV 
changing significantly from one year to another that officials were 
unable to explain. Figure 9 shows properties that reported significant 
changes in value from one year to the next that local agency officials 
could not explain. 

Figure 9: Examples of Large Reported PRV Fluctuations for Federal Real 
Properties: 

[Refer to PDF for image: table with 4 photographs] 

Property image: [photograph]: Portable modular office building; 
Agency: VA; 
Beginning PRV: $2,585,205 (2009); 
Ending PRV: $5,678,773 (2010); 
PRV change: $3,093,568; 
Percent change: 120%; 
Property description: This is a portable modular building that is used 
for office space. 

Property image: [photograph]: Vacant warehouse; 
Agency: GSA; 
Beginning PRV: $21,029,210 (2008); 
Ending PRV: $14,120,745 (2009); 
PRV change: ($6,908,465); 
Percent change: -33%; 
Property description: This is a large warehouse. 

Property image: [photograph]: Occupied house; 
Agency: USDA; 
Beginning PRV: $175,619
Ending PRV: $471,109 (2008); 
PRV change: $295,490; (2009); 
Percent change: 168%; 
Property description: This property is listed as a house. 

Property image: [photograph]: Vacant cabin; 
Agency: Interior; 
Beginning PRV: $149,688 (2009); 
Ending PRV: $284,965 (2010); 
PRV change: $135,277; 
Percent change: 90%; 
Property description: This is a hiker's cabin and is no longer in use. 
      
Sources: GAO analysis of agency information and USDA (photograph). 

[End of figure] 

The types of inconsistencies and inaccuracies we have identified in 
these five key data elements suggest that the FRPP database is not a 
useful decision-making tool for managing federal real property. Even 
though the 2004 executive order provides that performance measures 
shall be designed so that heads of executive agencies can track 
progress in meeting property management objectives, three out of five 
senior real property officers at the agencies we reviewed reported 
that they do not use FRPP data to manage real property, but instead 
use information from their own data systems for making management 
decisions. The other two officers stated that the FRPP performance 
measures were valuable. However, we question the utility of these 
performance measures considering the types of inconsistencies and 
inaccuracies we identified. Without consistent and accurate data, 
heads of executive branch agencies may not have the information they 
need to make effective management decisions about their excess and 
underutilized properties. Furthermore, OMB staff will be challenged to 
effectively manage problems with excess and underutilized property 
across the federal government. 

FRPC Has Not Followed Sound Data Collection Practices: 

We have previously reported that results-oriented organizations make 
sure that the data they collect are sufficiently complete, accurate, 
and consistent enough to document performance and support decision 
making.[Footnote 34] However, FRPC has not followed sound data 
collection practices when collecting FRPP data that would help them 
collect these data in a way that is sufficiently consistent and 
accurate to be useful for making property management decisions. We 
found problems with the way FRPC has collected FRPP data that relate 
to data consistency, performance measures, collaboration, and data 
reporting. 

Data Consistency: 

FRPC has not ensured that data elements are consistently defined and 
reported. The 2004 executive order stated that it is the role of the 
Administrator of GSA, in consultation with FRPC, to establish and 
maintain the federal database and to establish data and information 
technology standards to facilitate reporting on a uniform basis. As 
illustrated in the previous section, we found that data were reported 
inconsistently, sometimes because the guidance was not clear or 
because agencies were not following the guidance. For example, 
Interior officials told us that the definitions provided in FRPC 
guidance of key data elements, such as utilization, are very basic and 
that more guidance would be needed to report this data consistently. 
In addition, as stated earlier in this report, VA officials reported 
that OMB agreed to let VA use an alternative definition for 
utilization than the one provided in FRPC guidance. Because key data 
elements are not reported uniformly, they can have no collective 
meaning when amassed in a single database. If FRPC finds that certain 
kinds of data cannot be defined the same from agency to agency, that 
kind of data may not belong in a single database that appears to be 
standard across the government. Decision makers may assume that data 
reported for a particular data element have the same meaning across 
the federal government. This could lead to incorrect assumptions about 
the nature and scope of real property management problems. 

Performance Measures: 

FRPC has designated performance measures in the FRPP database that are 
ineffective. As discussed previously, FRPC designated four data 
elements in the FRPP as performance measures. However, these measures 
are not linked to any performance goals, and FRPC guidance does not 
explain what constitutes acceptable performance on these measures. By 
establishing performance measures before establishing the specific 
performance goals that it seeks to achieve through FRPP data 
collection, FRPC's requirements may cause agencies to waste valuable 
time and resources collecting the wrong data. Without effective 
performance goals to guide its data collection, FRPC cannot ensure 
that the data gained from these performance measures are an effective 
use of resources. 

In addition, the performance measures designated by FRPC are not 
consistent with the requirements described in the 2004 executive 
order. The executive order states that FRPC should work with the 
Administrator of GSA to "establish appropriate performance measures to 
determine the effectiveness of Federal real property management. Such 
performance measures shall include, but are not limited to, evaluating 
the costs and benefits involved with acquiring, repairing, 
maintaining, operating, managing, and disposing of Federal real 
properties at particular agencies." Furthermore, the executive order 
states that the measures should be designed in such a way as to allow 
for comparing the performance of agencies against that of industry and 
other public sector agencies. However, because these measures have not 
been implemented consistently, they cannot be used for comparison 
within the government or outside of it and, therefore, cannot be used 
to determine the effectiveness of federal real property management or 
to evaluate the costs and benefits of various management activities. 
If FRPC determines that it cannot design measures that meet the 
requirements described in the executive order, FRPC could request that 
the executive order be reexamined. 

Collaboration: 

OMB, as the Chair of FRPC, has not collaborated effectively with the 
agencies that submit FRPP data and may be requiring agencies to spend 
resources on data collection that is not useful. The agencies we 
reviewed expressed concerns about the data collection process, 
including the amount of data collection required, the time they are 
given to implement new data requirements, and their ability to collect 
data as required accurately. For example, USDA officials told us that 
they have a very large portfolio of federal property and that it is 
labor intensive to collect all of the required data. In addition, 
Interior officials stated that when new data requirements are 
implemented, they need 1 to 2 years lead time in order to update data 
systems and train staff in order to collect the data accurately--
historically, they said they have been given less than 6 months to 
implement new guidance. Moreover, GSA officials who review FRPP data 
submitted by other agencies stated that when agencies have told OMB 
staff that they do not have the ability to accurately gather 
information as required, OMB staff have told them to collect the data 
to the best of their ability. GSA officials also told us that OMB 
staff have acknowledged that data collection may not be accurate at 
first, but that as agencies get accustomed to collecting the data, 
they will find ways to collect it more accurately. 

These agency concerns were magnified during the last FRPP reporting 
period (fiscal year 2011). The amount of data that FRPC requires 
federal agencies to report increased significantly in 2011, and 
federal agencies reported that they did not have the time or resources 
to respond to these requirements effectively. FRPC added five new data 
elements to the collection requirements, not counting the new 
elements' subelements, which also must be taken into consideration. 
[Footnote 35] To put this into perspective, from 2005 through 2010, 
only two new data elements were added to FRPP reporting requirements. 
Furthermore, FRPC did not finalize the guidance for 2011 submission 
requirements until October 4, 2011, and data collection was due on 
December 15, 2011. 

Agency officials told us that the reporting changes and short 
timelines created a significant burden to their agencies, and that the 
submitted data subsequently may not be accurate. For example, USDA 
officials reported that it had to make extensive changes to their 
Corporate Property Automated Information System (CPAIS)--USDA's real 
property data system of record--to comply with the new reporting 
requirements. They added that, because of the late distribution of the 
requirements, agencies had little time to respond to the data changes, 
causing USDA to have to shut down the CPAIS system to prevent 
compromise of fiscal year 2011 data while they attempted to update 
their systems to comply with the required changes. In addition, 
Interior officials told us that they requested waivers for part of the 
new reporting requirements that they could not report accurately in 
the time they had to respond. However, OMB staff did not respond to 
their waiver request--to accept or deny it--so Interior officials 
submitted data to the best of their ability, with little confidence 
that the data were accurate. Furthermore, GSA reported that one of the 
new reporting requirements--obtaining the numbers of personnel in each 
building--will be resource intensive and time consuming and that the 
data could be inaccurate. OMB staff told us that they held conference 
calls with the agencies, reviewed their feedback and weighed the 
burden the data collection presented to the agencies. For example, the 
data element describing total annual British Thermal Units consumption 
was made optional for a year and reporting personnel data was limited 
to only certain building asset types. However, the burdens the 
agencies reported with the 2011 data submissions, including the fact 
that Interior received no response to their waiver request at all, 
raises questions as to the effectiveness of the collaboration efforts. 

We asked OMB staff why data collection requirements increased in 2011 
and they reported that the data collection requirements were modified 
to provide a more comprehensive basis for governmentwide analysis of 
the federal real estate inventory. However, it is unclear how this 
information provides a more comprehensive analytic basis when the 
agencies have told OMB that they cannot guarantee that the collected 
data are accurate. Collecting and analyzing data creates costs for 
federal agencies as they must direct time and staff resources to this 
task. We have previously emphasized the importance of limiting the 
number of measures to the vital few measures considered essential for 
producing data for decision making. Furthermore, increasing data 
collection requirements without ensuring that agencies have the time 
and resources to respond increases the likelihood that inaccurate data 
are collected. DOE reported that the increased reporting requirements 
drain agency resources and that FRPP reporting should be limited to a 
few data elements that would allow for reporting a few critical 
statistics describing federal properties. 

While agency concerns have increased, effective collaboration has 
reportedly decreased. Agency officials told us that FRPC has stopped 
meeting as often as it did in years past, which has limited 
collaboration opportunities. In addition, VA officials told us that 
they are just one voice when FRPC meets to discuss data collection 
requirements. They said that many of the agencies that are part of 
FRPC have very small portfolios, so detailed data collection 
requirements are not particularly burdensome. These agencies with 
smaller portfolios have an equal voice to agencies with large property 
portfolios, such as VA and the Department of Defense, even though 
agencies with large portfolios bear a much greater burden when data 
collection requirements are added. DOE officials stated that there 
needs to be a formal process for adding data elements to collection 
requirements that includes collecting and formally resolving agency 
comments on difficulties with data collection or the inability to 
report on certain requirements accurately. Without improving 
collaboration efforts, FRPC cannot ensure that the costs involved in 
collecting and analyzing the data are commensurate with the benefits 
obtained from gathering it. 

Data Reporting: 

Even if the data were useful, we found that FRPC reports very little 
of what it collects from the agencies. From the millions of pieces of 
data collected from the thousands of assets reported by federal 
agencies to the FRPP in fiscal year 2010, FRPC produced a 19-page, 
high-level summary report.[Footnote 36] In this summary report, two of 
the four data elements listed as performance measures--condition index 
and mission dependency--were not included in the report. In addition, 
the PRV reported by agencies is also not included in the report. GSA 
officials told us that some information about federal real property 
portfolios should not be released to the public for security reasons. 
However, the fact that FRPC does not report two data elements that it 
has designated as performance measures raises issues with transparency 
and accountability. Furthermore, the amount of information that FRPC 
reports compared to the extensive information it collects raises 
further questions about whether FRPC is balancing the cost of 
collecting the data with the benefit it provides. We have previously 
stated that reporting performance information can help Congress make 
informed decisions and give the taxpayers a better understanding of 
what the government is providing in return for their tax dollars. 
[Footnote 37] Better alignment between the data collected and reported 
would add transparency and accountability, not only to the federal 
government's management of its property, but also on the resources 
spent to collect the data. 

The other two performance measures--utilization and annual operating 
costs--are included in FRPC's report. For example, the data in table 3 
is provided in the summary report, which listed the annual operating 
costs of all reported underutilized properties at more than $1.5 
billion dollars. 

Table 3: Utilization and Annual Operating Cost Data for All Assets 
Reported by FRPC in 2010: 

Not utilized: 
Number of assets: 6,700; 
Total square feet: 39,645,100; 
Annual operating cost: $112,151,700. 

Over utilized: 
Number of assets: 65,800; 
Total square feet: 959,380,400; 
Annual operating cost: $9,693,933,400. 

Under utilized: 
Number of assets: 71,000; 
Total square feet: 450,612,900; 
Annual operating cost: $1,553,359,300. 

Utilized: 
Number of assets: 89,000; 
Total square feet: 614,314,900; 
Annual operating cost: $4,440,635,200. 

Source: GAO presentation of FRPC data. 

[End of table] 

Considering that we found inconsistencies in the way utilization and 
annual operating cost data are collected and reported, the accuracy of 
these data and other tables in the summary report is questionable. 
Furthermore, providing decision makers with this information is 
problematic. Decision makers could incorrectly use a table such as 
this to estimate potential cost savings through a reduction of annual 
operating costs associated with initiatives to dispose of properties 
that are underutilized or not utilized. 

Although Some Progress Has Been Made, Federal Property Management Is 
Still Challenging and Efforts Lack a National Strategy: 

The federal government has taken some steps to address excess and 
underutilized property management problems by developing the FRPP 
database, among other things. However, cost savings efforts associated 
with excess and underutilized property over the years were 
discontinued and recent efforts may overstate potential savings. 
Although the federal agencies we reviewed have taken some actions to 
try to address excess and underutilized properties, long-standing 
challenges remain. As a result, a national strategy could help the 
federal government prioritize future management efforts. 

Limited Progress Has Been Made in Managing Excess and Underutilized 
Federal Property, but the Extent of Cost Savings Is Not Clear: 

The federal government has made some progress in managing real 
property since we first added this issue to our high-risk series. In a 
2007 review of federal real property, we found that the administration 
at that time made progress toward managing federal real property and 
addressing some long-standing problems.[Footnote 38] The 2004 
executive order established FRPC to develop property management 
guidance and act as a clearinghouse for property management best 
practices. FRPC created the FRPP database and began data collection in 
December 2005. As part of a 2011 update to our high-risk series, we 
reported that the federal government has also taken steps to improve 
real property management, most notably by implementing some GSA data 
controls and requiring agencies to develop data validation plans. 
[Footnote 39] Prior to designating property management as high risk, 
reliable tools for tracking property were generally unavailable. 
Consequently, we determined that the development of a database and the 
implementation of additional data quality controls were steps in the 
right direction. However, on the basis of our current work, it appears 
that data controls have not brought about widespread improvements with 
data consistency and accuracy as was anticipated. Nonetheless, we 
found that the FRPP can be used in a general sense to track assets. 
For example, during our site visits, agency officials were able to 
match assets with the real property unique identification numbers 
assigned to them in the FRPP database and were able to locate even 
small, remote buildings using these numbers.[Footnote 40] 

In addition to establishing FRPC, developing the FRPP, and 
implementing the executive order, the previous and current 
administrations have sought ways to generate cost savings associated 
with improving management of excess and underutilized properties. 
However, these efforts have not led to proven cost savings associated 
with the management of these properties. 

Cost savings goals set by the previous administration were 
discontinued. In 2007, we reported that adding real property 
management to the President's Management Agenda in 2004 increased its 
visibility as a key management challenge and focused greater attention 
on real property issues across the government.[Footnote 41] As part of 
this agenda, the previous administration set a goal of reducing the 
size of the federal real property inventory by 5 percent, or $15 
billion, by the year 2015. OMB staff at the time reported that there 
was an interim goal to achieve $9 billion of the reductions by 2009. 
OMB staff recently told us that the current administration is no 
longer pursuing these goals. Furthermore, the senior real property 
officers of the five agencies we reviewed told us that they were never 
given specific disposal targets to reach as part of these prior 
disposal goals. 

Cost savings associated with improved management of excess and 
underutilized properties as directed in the June 2010 presidential 
memorandum are unclear. OMB staff also said that while the goals of 
the previous administration are no longer being pursued, the current 
administration issued a memorandum that directed civilian agencies to 
achieve $3 billion in savings by fiscal year 2012 through better 
management of excess properties, among other things. According to the 
administration's website, as of September 2011, approximately half of 
the cost savings had been achieved ($1.48 billion). Almost half of the 
total goal (about $1.4 billion) is targeted to the five agencies we 
reviewed. Officials from these agencies reported various cost savings 
measures such as selling real property, forgoing operations and 
maintenance costs from disposed properties, and reducing energy costs 
through sustainability efforts to achieve agency savings targets. 
[Footnote 42] As of the first quarter of fiscal year 2012, only two of 
the agencies we reviewed--GSA and USDA--were claiming any sales 
proceeds from the sale of federal real property: GSA reported $41.1 
million in savings from sales proceeds and USDA reported approximately 
$5.6 million. Interior officials stated that individual sales with 
positive net proceeds are offset by those sales in which the cost of 
the disposal (i.e., as a result of environmental remediation and 
repair) is greater than any proceeds realized. Furthermore, DOE 
officials reported that the disposition costs of the properties they 
sold during the time frame of the memorandum were actually greater 
than the proceeds. As a result, DOE has reported a net loss of $128 
million on property sales for this time period. VA also did not 
include asset sales as part of its savings plan. 

Four of the five agencies told us that they believe they will reach 
their savings targets by the end of fiscal year 2012; however, whether 
they claim to reach those goals or not, the actual and estimated 
savings associated with excess and underutilized property management 
may be overstated. Furthermore, agencies were not required to develop 
cost savings that reflected a reduction in agency budgets. We found 
problems with cost savings estimates related to excess and 
underutilized property management from all five of the federal 
agencies we reviewed (see table 4).[Footnote 43] 

Table 4: Identified Problems with Agencies' Cost Savings Estimates 
Related to Excess and Underutilized Property: 

Agency: DOE; 

Cost savings projections: DOE officials stated that as of December 31, 
2011, the department had achieved $361 million in savings associated 
with the operations and maintenance of disposed properties. DOE 
officials project that this number will reach $375 million in savings 
by the end of fiscal year 2012; 
Identified problems: DOE used FRPP annual operating cost data to 
estimate this savings. On the basis of our findings in this report, we 
believe that using the FRPP data to project cost savings is 
questionable. 

Cost savings projections: DOE officials stated that they counted 
operations and maintenance savings for a full year regardless of when 
in the fiscal year the savings were realized; 
Identified problems: Using this methodology, DOE would count 
operations and maintenance costs for an entire year, even if the 
property was disposed late in the fiscal year. 

Cost savings projections: DOE counted the repair needs of disposed 
assets as approximately $133 million of its cost savings; 
Identified problems: Using this methodology to determine cost 
avoidance assumes that all of the disposed assets would have been 
fully repaired in the years that this memorandum covers. In reality, 
agencies have limited budgets to repair and maintain its assets and 
must carefully choose which assets to repair in a given year. Agencies 
often choose not to repair assets that are going to be disposed 
because they need to use their limited funds to repair the assets that 
they regularly use. 

Agency: GSA; 

Cost savings projections: GSA officials told us that as of December 
31, 2011, they had achieved approximately $317 million (out of the 
agency's $450 million target) and that they anticipated that the 
agency would reach the full target by the end of fiscal year 2012; 
Identified problems: GSA did not provide complete information on the 
projected savings that would total $450 million by the end of fiscal 
year 2012. Furthermore, as part of its reported $317 million cost 
savings, GSA included $118.3 million for "Lease Transition to Federal 
Construction." GSA reported that this is the result of an analysis of 
savings that would be accrued if buildings were constructed to replace 
four properties that are currently leased. The estimated savings were 
based on the present value of savings over a 30-year period. However, 
the GSA estimate represents savings for the entire 30-year period 
(i.e., over the life of the buildings) rather than only for the 3 
fiscal years specified in the presidential memorandum (fiscal years 
2010 through 2012). Moreover, GSA has yet to occupy any of the four 
buildings, and it is unclear if their construction is under way. Thus, 
even if cost savings could be claimed for all 3 years reviewed for 
each building, the cost savings for these 3 years would be 
significantly lower than GSA reported saving. 

Cost savings projections: GSA counted repair needs as $55.7 million of 
its achieved cost savings and projects more than $30 million more by 
the end of fiscal year 2012; 
Identified problems: Using this methodology to determine cost 
avoidance assumes that all of the disposed assets would have been 
fully repaired in the years that this memorandum covers. In reality, 
agencies have limited budgets to repair and maintain their assets and 
must carefully choose which assets to repair in a given year. Agencies 
often choose not to repair assets that are going to be disposed 
because they need to use their limited funds to repair the assets that 
they regularly use. 

Agency: Interior; 

Cost savings projections: Interior officials stated that they had 
saved $78 million in operations and maintenance costs from disposed 
properties as of September 30, 2011; 
Identified problems: In March 2012, Interior officials told us that 
they had not subtracted the disposal costs or taken into consideration 
replacement costs of the disposed assets. Once these costs were 
considered, Interior officials stated that their net savings were only 
$8.3 million. 

Cost savings projections: Interior officials stated that although they 
will fall short of the original projections related to the operations 
and maintenance costs of disposed properties, they will still achieve 
their disposal target through higher-than-expected innovations savings 
(more than $40 million higher than they had previously projected); 
Identified problems: Interior counted $4.2 million of innovations 
savings from capital investment projects the department had canceled. 
Interior plans to count the funds that would have been spent on these 
projects as cost savings toward the presidential memorandum targets 
even though Interior used these funds for other projects. In addition, 
Interior counted $20.1 million in savings toward the presidential 
memorandum based on volunteer work (Interior valued volunteer hours at 
$21.86 per volunteer hour). This volunteer work is a normal part of 
Interior's business and does not reflect any new initiative as a 
result of the memorandum. Furthermore, Interior reported more than $20 
million in innovations savings from eliminated operations and 
maintenance costs from disposed or transferred assets. Interior used 
FRPP annual operating cost data to estimate this savings. On the basis 
of our findings in this report, we believe that using FRPP data to 
project cost savings is questionable. 

Agency: VA; 

Cost savings projections: In February 2012, we reported that VA 
assumed that it would achieve savings of nearly $14 million through a 
reduction in leased space in fiscal year 2012 by increasing the number 
of employees who telework frequently.[A]; 
Identified problems: VA did not account for the time necessary to 
implement this initiative--that is, the time it would take the 
department to increase the number of employees who telework 
frequently, put in place office-sharing arrangements, and subsequently 
reduce the amount of leased space. 

Cost savings projections: We reported that as of January 2012, VA 
officials said that they had not reduced the amount of space it leases 
and does not expect to achieve the space reductions necessary to 
achieve estimated savings in this area until the end of fiscal year 
2012[B]; 
Identified problems: This would result in lower savings than VA 
estimated. 

Cost savings projections: VA officials told us that other estimated 
cost savings related to excess and underutilized property management 
will not occur before the end of fiscal year 2012; 
Identified problems: VA was not able to demolish or mothball many of 
the buildings it identified as vacant or underutilized, as it had 
planned, particularly larger buildings[C]. 

Cost savings projections: VA expects that it will make up these missed 
targets through higher-than-expected savings from energy and 
sustainability initiatives that affect all VA property; 
Identified problems: While these savings could be considerable, they 
would encompass more than $60 million of VA's $80 million savings 
target, which means that very little of VA's cost savings associated 
with the memorandum would relate to addressing excess and 
underutilized property. 

Agency: USDA; 

Cost savings projections: As of September 2011, USDA officials 
estimated that they would receive more than $40 million of actual cost 
savings (out of the agency's $300 million target) from proceeds from 
the sale of assets in fiscal years 2010 and 2011; 
Identified problems: USDA based this figure on estimates using PRV. As 
discussed previously, the PRV is not the market value of these assets, 
nor is it the sales price of the asset. USDA officials found that 
these sales actually totaled approximately $5.6 million and they had 
to adjust their estimates accordingly. 

Cost savings projections: USDA officials stated that they counted 
operations and maintenance savings for a full year regardless of when 
in the fiscal year the savings were realized. USDA officials stated 
that it is difficult to project the date of when a lease will close 
and savings will begin, but they acknowledged that USDA's estimated 
savings assumed that all closures occurred in quarter one of the 
fiscal year; 
Identified problems: Using this methodology, USDA would count 
operations and maintenance costs for an entire year, even if the lease 
was closed late in the fiscal year. 

Source: GAO analysis of agency information. 

[A] GAO, VA Health Care: Methodology for Estimating and Process for 
Tracking Savings Need Improvement, GAO-12-305 (Washington, D.C.: Feb. 
27, 2012). 

[B] GAO-12-305. 

[C] The VA Handbook defines mothballing as abandoning a building but 
maintaining a minimal level of heating and cooling. This also includes 
blocking entryways, avoiding vandalism, and ensuring building 
integrity. See VA, Managing Underutilized Real Property, Including 
Disposal, Handbook 7633 (Washington D.C.: Apr. 18, 2006). 

[End of table] 

OMB staff has not provided information to support projected cost 
savings if CPRA is enacted. In addition to the expected savings 
resulting from the June 2010 presidential memorandum, OMB staff 
reported that CPRA--the legislation the administration has proposed to 
address real property management obstacles--will result in $4.1 
billion in savings within 10 years following enactment from sales 
proceeds as well as unspecified savings from operating costs and 
efficiencies. However, the CPRA projections may not reflect true cost 
savings. OMB staff did not provide a methodology, calculations, or any 
other basis for its stated projections. Furthermore, CBO concluded 
that CPRA would probably not result in a significant increase in 
proceeds from the sale of federal properties over the next 10 years. 
[Footnote 44] CBO noted that the Department of Defense holds about one-
third of the excess properties. CPRA would have no effect on these 
properties, because the proposal only applies to civilian agencies. 
Furthermore, CBO estimated that implementing CPRA would cost $420 
million over the 2012 through 2016 period to prepare properties for 
sale or transfer. The President's fiscal year 2013 budget requested 
$17 million to implement CPRA (if it is enacted) and $40 million to 
establish an Asset Proceeds and Space Management Fund to facilitate 
the disposal process intended to reimburse agencies for some necessary 
costs associated with disposing of property. This amount is far short 
of the $420 million that CBO projected would be needed to prepare 
properties for sale or transfer within a 4-year period.[Footnote 45] 

Federal Agencies Have Made Progress but Still Face Long-standing 
Challenges: 

Despite problems with data collection and national cost savings goals, 
we found that agencies have taken steps to address excess and 
underutilized properties in their portfolios. For example, all five 
agencies we reviewed have taken steps to use property more 
efficiently, as follows: 

* Identifying underutilized assets to meet space needs. VA officials 
told us that they implemented a process to identify vacant and 
underutilized assets that they could use to meet space needs. In 
addition, VA officials stated that the department is planning to reuse 
currently utilized assets that will be available in the future. VA 
officials added that they have identified 36 sites that include 208 
buildings and more than 600 acres that they can use to provide more 
than 4,100 units of homeless and other veteran housing. 

* Consolidating offices among and within agencies. USDA and Interior 
signed a memorandum of understanding in November 2006 that allows the 
agencies to colocate certain operations and use their buildings more 
efficiently. The memorandum of understanding enables the agencies to 
share equipment and space. In addition, USDA closed laboratories at 
four locations and consolidated operations with existing USDA sites. 
In its National Capital Region, USDA has consolidated five separate 
leased locations, totaling 363,482 square feet, into one location at 
Patriot's Plaza in Washington, D.C. USDA reported that the 
consolidation into Patriot's Plaza will result in annual rent savings 
of about $5.6 million. DOE officials also stated that the department 
encourages offices to consolidate operations when it is cost effective 
to do so. The department also increased the use of an office building 
at the Lawrence Livermore National Laboratory from 22 percent to 100 
percent by changing its use from office space to a building that 
houses computers. Furthermore, VA consolidated its medical center 
campuses in Cleveland, Ohio, and engaged a number of private partners 
directly to reuse the unneeded sites, using its Enhanced Use Lease 
authority.[Footnote 46] 

* Reducing employee work space. To use space more efficiently, 
Interior reduced new space utilization per employee from 200 usable 
square feet per person to 180 usable square feet per person. This 
action decreased total new space by 10 percent in all areas including 
employee work space and conference space. 

* Using operations and maintenance charges to reduce operating costs 
and encourage efficient use of space. DOE officials reported that 
several sites servicing multiple programs or performing work for 
others have developed a space charge system whereby a site charges 
tenants for the operations and maintenance of the square footage they 
occupy on a square foot basis. This charge defrays operations and 
maintenance costs associated with the site and encourages tenants to 
minimize their own space use. 

* Transferring unneeded property to other entities. Interior officials 
have disposed of excess properties by transferring them to other 
organizations to use. For example, Interior officials reported that 
the department donated a freezer building and a laboratory building at 
the Woods Hole Science Center in Falmouth, Massachusetts to the Woods 
Hole Oceanographic Institution. The department also transferred 
buildings and land at a Corbin, Virginia site to the National Oceanic 
and Atmospheric Administration. 

* Creating alternate uses for unused assets. GSA found an alternate 
use for 400,000 square feet of a concrete slab that remained after 
demolishing an excess building. When needed, GSA leases the slab to 
the Federal Emergency Management Agency as outdoor storage space for 
electric generators and other heavy equipment and as a staging area 
for equipment during responses to disasters (see figure 10). 

Figure 10: Alternate Use of a Concrete Slab by GSA: 

[Refer to PDF for image: photograph] 

Concrete slab used for storage of generators. 

Source: GAO. 

[End of figure] 

* Using telework and hoteling work arrangements.[Footnote 47] All five 
agencies we reviewed require or allow employees to use alternate work 
arrangements such as teleworking or hoteling, when feasible, to more 
efficiently use space. For example, GSA instituted a pilot hoteling 
project at the Public Building Service headquarters in Washington, 
D.C., to reduce needed space. 

Progress notwithstanding, agencies still face many of the same long-
standing challenges we have described since we first designated real 
property management as a high-risk area. 

Agency disposal costs can outweigh the financial benefits of property 
disposal. USDA officials reported that the costs of disposing of real 
property can outweigh savings that result from building demolition and 
that limited budgetary resources create a disincentive to property 
disposal. USDA determined that the total annual cost of maintaining 
1,864 assets with annual operating costs less than $5,000 was $3 
million. Conversely, USDA concluded that the disposal costs for these 
assets equals or exceeds their annual operating cost of $3 million. 
Thus, disposal of the assets would not result in immediate cost 
savings, and USDA has not demolished the assets. In addition, Interior 
officials reported that numerous National Park Service buildings 
acquired during the planning for a Delaware River dam that was never 
built are excess, as are many cabins and houses along the Appalachian 
Trail. Because Interior is not spending any operations and maintenance 
on these assets, disposing of them would not provide savings to the 
department. As a result, Interior has made a business decision to only 
fund a small percentage of these disposals at the Delaware River dam 
site. 

Legal requirements--such as those related to preserving historical 
properties and the environment--can make the property disposal process 
lengthy according to agency officials. Meeting requirements associated 
with historical properties can delay or prevent disposal of excess 
buildings.[Footnote 48] The National Historic Preservation Act, as 
amended, requires agencies to manage historic properties under their 
control and jurisdiction and to consider the effects of their actions 
on historic preservation.[Footnote 49] For example, VA officials 
reported that they are unable to dispose of a 15,200-square-foot 
building at Menlo Park, California that has been used as both a 
residence and a research building during its 83-year history. The 
building has been scheduled for demolition since 2001, but VA cannot 
demolish it because of a historical designation. In addition, in 2010, 
Interior canceled the disposal of a 95-square-foot stone property that 
we visited because it was found eligible for historic designation. The 
property is in poor condition and has not been used for many years, 
but Interior officials told us that they are now planning to stabilize 
and restore the structure (see figure 11). 

Figure 11: Interior Property No Longer Slated for Demolition because 
of Historic Designation Challenges: 

[Refer to PDF for image: photograph] 

Shed in poor condition and eligible for historic designation. 

Source: GAO. 

[End of figure] 

Environmental requirements can also complicate disposal. Under the 
National Environmental Policy Act, as amended, agencies are required 
to consider the environmental impact of their decisions to dispose of 
property;[Footnote 50] landholding agencies are responsible for 
supervising decontamination of excess and surplus real property that 
has been contaminated with hazardous materials of any sort.[Footnote 
51] However, required environmental assessments and remediation of 
unneeded property can be expensive and time consuming. For example, 
DOE officials reported that most of the agency's excess buildings will 
be costly to demolish because of radiological contamination. DOE is 
responsible for remediation of contaminated nuclear weapons 
manufacturing and testing sites that include thousands of excess 
buildings contaminated with radiological or chemical waste. DOE 
officials reported that because their decontamination and disposal 
funds are limited, they might not be able to dispose of these 
buildings for many years (see figure 12). 

Figure 12: Vacant DOE Property with Radiological Contamination: 

[Refer to PDF for image: 3 photographs] 

Vacant laboratory building. 

Source: DOE and GAO. 

[End of figure] 

GSA officials reported that environmental contamination of properties 
is a significant challenge to their property disposal efforts. For 
example, environmental contamination has delayed disposal of a GSA 
site, that we visited, until at least 2015. This 435 acre site is a 
former Department of Defense storage site that includes abandoned 
warehouses, steel sheds, and concrete pier foundations, among other 
structures. The site is contaminated with low level radioactivity and 
unexploded munitions. GSA officials told us that they are working with 
state officials and the Department of Defense to identify the 
contamination at the site and plan remedial actions (see figure 13). 

Figure 13: Abandoned and Contaminated GSA Property: 

[Refer to PDF for image: 2 photographs] 

Aerial photo of GSA site planned for disposal; 
Warehouse located at GSA site. 

Source: GSA and GAO. 

[End of figure] 

Stakeholder interests can conflict with property disposal or reuse 
plans. VA officials reported that they have been unable to dispose of 
buildings in part because local interests are opposed to the 
department's disposal plans. In 2006, VA announced a decision to 
pursue an enhanced use lease on approximately 30 acres of the 56.5 
acre St. Albans, New York campus. Under the terms of the lease, a 
private partner would construct a nursing home and domiciliary and 
outpatient clinic buildings with all needed equipment and furnishings 
in exchange for development rights to the remaining acreage at the 
site. In 2010, VA selected a developer to operate and maintain state-
of-the-art buildings and leased land for the duration of the lease. 
However, VA officials reported that because of opposition to their 
plans from local organizations, they canceled the disposal and lease 
plans for the site. GSA officials also reported that local stakeholder 
interests have delayed conveyance of a federal building in Portland, 
Oregon. The Department of Education plans to use the building for 
educational activities beneficial to the community. However, the 
officials received a request from the city of Portland that certain 
offices that were already located in the building remain in downtown 
Portland. GSA is attempting to find suitable space for these offices 
in downtown Portland so that it can convey the building to the 
Department of Education. 

Locations of some federal properties can make property disposal and 
reuse difficult. DOE officials reported that they demolish most excess 
buildings rather than sell or reuse them, because the department must 
locate buildings in remote areas that include acreage that can serve 
as security and environmental buffer zones for nuclear-related 
activities. Likewise, Interior officials reported that most of their 
buildings are located on public domain lands, lands held in trust, or 
in remote or inaccessible areas. Furthermore, VA officials reported 
that most of their buildings are located on medical center campuses. 
All three agencies reported that because excess buildings located on 
federal land are not easily accessible or cannot be sold to 
nongovernment entities, sales or conveyances of these buildings can be 
prevented. Interior officials reported that the department spends 
significant resources to eliminate the nongovernment ownership of 
parcels of land within the boundaries of public domain lands, so 
selling properties on the land, even if it were legal, would 
contradict the goal of the department. Often, the only option they 
have is to remove buildings or structures, which in many cases, are 
cost prohibitive. For example, Interior officials reported that many 
former privately owned fishing camps and recreation sites at Voyageurs 
National Park in Minnesota are in remote locations that make their 
removal difficult and cost prohibitive. 

A National Strategy Could Guide Improvement Efforts: 

Nine years after we designated the issue of managing federal real 
property as high-risk, and numerous efforts to address it, the federal 
government still faces many of the same long-standing challenges. We 
previously reported that complex interagency and intergovernmental 
efforts can benefit from developing a national strategy; however, a 
comprehensive national strategy has not been developed to address the 
excess and underutilized property problem.[Footnote 52] Given the 
complexities of issues related to excess and underutilized federal 
real property management, unsuccessful implementation of cost savings 
efforts across administrations, and the issues that still remain with 
data reporting, we believe that a national strategy could provide a 
clear path forward to help federal agencies manage excess and 
underutilized property in the long term. A national strategy can guide 
federal agencies and other stakeholders to systematically identify 
risks, resources needed to address those risks, and investment 
priorities when managing federal portfolios. Without a national 
strategy, the federal government may be ill-equipped to sustain 
efforts to better manage excess and underutilized property. 

In 2004, we identified a set of six desirable characteristics to aid 
responsible parties in developing and implementing national strategies 
to guide senior policy decision makers and to better ensure 
accountability.[Footnote 53] Table 5 provides a summary of these six 
characteristics. 

Table 5: Desirable Characteristics for a National Strategy, from 
Conception to Implementation: 

Desirable characteristic: Purpose, scope, and methodology; 
Description: Addresses why the strategy was produced, the scope of its 
coverage, and the process by which it was developed. 

Desirable characteristic: Problem definition and risk assessment; 
Description: Addresses the particular national problems the strategy 
is directed toward. 

Desirable characteristic: Goals, subordinate objectives, activities, 
and performance measures; 
Description: Addresses what the strategy is trying to achieve and 
steps to achieve those results, as well as the priorities, milestones, 
and performance measures to gauge results. 

Desirable characteristic: Resources, investments, and risk management; 
Description: Addresses what the strategy will cost, the sources and 
types of resources and investments needed, and where resources and 
investments should be targeted based on balancing risk reductions with 
costs. 

Desirable characteristic: Organizational roles, responsibilities, and 
coordination; 
Description: Addresses who will be implementing the strategy, what 
their roles will be compared with those of others, and mechanisms for 
them to coordinate their efforts. 

Desirable characteristic: Integration and implementation; 
Description: Addresses how a national strategy relates to other 
strategies' goals, objectives, and activities, and to subordinate 
levels of government and their plans to implement the strategy. 

Source: GAO analysis. 

[End of table] 

Such a national strategy could help the federal government make 
progress on managing excess and underutilized properties in the 
following ways, among others: 

* Defining the scope of the coverage of national efforts to deal with 
properties managed by federal agencies could help keep efforts focused 
on issues that lend to governmentwide efforts, as opposed to those 
that are better left to each agency to manage. 

* Defining the problem and assessing the risks could help ensure that 
agencies are prioritizing their efforts to manage excess and 
underutilized properties in the most efficient manner. 

* Clearly addressing what a strategy for managing federal properties 
is meant to achieve could help FRPC develop effective performance 
measures and evaluate whether current performance measures and data 
elements are necessary for meeting nationwide performance goals. 

* Addressing the cost, sources, and type of resources and investments 
needed could help FRPC measure the costs of collecting data and 
ensuring that it is commensurate with the benefits received from the 
collected data. 

* Clearly outlining roles and developing an effective mechanism for 
coordination can ensure that effective collaboration is taking place 
between FRPC and federal agencies, particularly when new data 
collection requirements are implemented. 

* Addressing how the national strategy relates to agencies' individual 
goals and management strategies can ensure that the national strategy 
provides the guidance agencies need to better manage their portfolios. 

Conclusions: 

The federal government has made some progress in managing real 
property since it was first added to our high-risk series. The FRPC 
created the FRPP database to track federal property and the federal 
agencies we reviewed have taken some actions to address excess and 
underutilized property. Even with long-standing efforts to improve the 
management of excess and underutilized properties and save costs, 
federal agencies continue to face many of the same challenges that we 
have reported for over a decade. The problems still facing the federal 
government in this area highlight the need for a long-term, 
comprehensive national strategy to bring continuity to efforts to 
improve how the federal government manages its excess and 
underutilized real property and improve accountability for these 
efforts. Such a strategy could lay the framework for addressing the 
issue of inconsistent and inaccurate data on excess and underutilized 
federal properties. We continue to believe that consistent and 
accurate data on federal real property are necessary for the federal 
government to effectively manage real property. While the 2004 
executive order charged the Administrator of GSA, in consultation with 
FRPC, to develop the data reporting standards for the FRPP database, 
the current standards have allowed agencies to submit data that are 
inconsistent and therefore not useful as a measure for comparing 
performance inside and outside the federal government. Also, the 
current definitions of certain data elements could perpetuate 
confusion on the nature of federal government properties. For example, 
the FRPP data element, PRV, is commonly referred to as an asset's 
"value," which can cause decision makers to make assumptions about the 
worth of the asset even though the PRV cannot be accurately used in 
this way. Moreover, many agencies do not have the resources to collect 
data at the asset level, and the information that is reported in order 
to meet requirements for asset-level data is likely conveying an 
inaccurate picture of excess and underutilized property. Furthermore, 
federal government agencies have vastly different uses for properties, 
and it may be challenging to collect certain kinds of property 
management data using a single database. This makes it difficult for 
decision makers to understand the scope of the problem and assess 
potential cost savings and revenue generation. Now that FRPC has had 
several years of experience with these data, it is in a better 
position to refine data collection requirements by identifying data 
that are suitable for comparison in a nationwide database. Following 
sound data collection practices could help FRPC to thoroughly evaluate 
and retool the FRPP so that it collects and provides data that are 
consistent and accurate to decision makers, even if this means 
collecting less data in the short term. GSA is uniquely positioned to 
lead this effort because of its charge to develop FRPP data reporting 
standards. 

Recommendations for Executive Action: 

We are making two recommendations, one to the Director of OMB and one 
to the Administrator of GSA. 

We recommend that the Director of OMB require the OMB Deputy Director 
for Management, as chair of FRPC, in collaboration and consultation 
with FRPC member agencies, to develop and publish a national strategy 
for managing federal excess and underutilized real property that 
includes, but is not limited to, the following characteristics: 

* a statement of purpose, scope, and methodology; 

* problem definition and risk assessment; 

* goals, subordinate objectives, activities, and performance measures, 
including the milestones and time frames for achieving objectives; 

* resources, investments, and risk management; 

* organizational roles, responsibilities, and coordination; and: 

* integration and implementation plans. 

We recommend that the Administrator of GSA, in collaboration and 
consultation with FRPC member agencies, develop and implement a plan 
to improve the FRPP, consistent with sound data collection practices, 
so that the data collected are sufficiently complete, accurate, and 
consistent. This plan should include, but not be limited to the 
following areas: 

* ensuring that all data collection requirements are clearly defined 
and that data reported to the database are consistent from agency to 
agency; 

* designating performance measures that are linked to clear 
performance goals and that are consistent with the requirements in the 
2004 executive order (or seeking changes to the requirements in this 
order as necessary); 

* collaborating effectively with the federal agencies that provide the 
data when determining data collection requirements and limiting the 
number of measures collected to those deemed essential, taking into 
account the cost and effort involved in collecting the data when 
determining data collection requirements; and: 

* developing reports on the data that are collected. 

Agency Comments and our Evaluation: 

We provided a draft of this report to OMB, GSA, VA, USDA, DOE, and 
Interior for review and comment. OMB did not directly state whether it 
agreed or disagreed with our recommendations. OMB agreed that 
challenges remain in the management of the federal government's excess 
and underutilized properties; however, OMB raised concerns with some 
of the phrasing in our report and offered further context and 
clarification regarding the administration's overall efforts on real 
property reform. OMB's comments are contained in appendix III, along 
with our response. GSA agreed with our recommendation to improve the 
FRPP and described actions its officials are taking to implement it. 
GSA also partially agreed with our findings and offered some 
clarifications. GSA's comments are contained in appendix IV along with 
our response. VA generally agreed with the overall message of our 
report, but disagreed with how we presented certain issues. VA's 
comments are contained in appendix V along with our response. USDA 
provided clarifying comments which we incorporated, where appropriate. 
USDA's comments are contained in appendix VI. DOE provided technical 
clarifications, which we incorporated where appropriate, but did not 
include as an appendix. Interior did not provide comments. 

OMB stated that, because our conclusion regarding the accuracy of FRPP 
data is based on our sample of 26 site visits, further study is needed 
to determine whether the problems we found are systemic. However, as 
discussed in the report, our findings are primarily based on the 
issues we identified with FRPC's data collection practices, which are 
the basis of the entire FRPP data collection process and are thus 
systemic. The 26 sites that we visited complement those findings and 
illustrate how poor data collection practices affect data submissions; 
however, they are not the only basis for our findings. Furthermore, 
OMB stated that the administration has a strategy for improving the 
management of federal real property that serves as an important 
foundation for the national strategy we recommend in this report. 
While the initiatives OMB described may represent individual, positive 
steps, we do not believe that they fully reflect the key 
characteristics of a cohesive national strategy. A national strategy 
would improve the likelihood that current initiatives to improve real 
property management will be sustained across future administrations. A 
more detailed discussion of our views on OMB's comments can be found 
in appendix III. 

GSA stated that our report correctly identifies many of the problems 
that hampered effective FRPP data collection in 2011. According to 
GSA, it has taken specific actions to begin addressing our 
recommendation, including modifying FRPC guidance to the agencies to 
clarify report definitions and proposing reforms of the collection 
process to FRPC consistent with our recommendation. GSA also offered a 
few clarifications on our findings. GSA stated that it was unclear 
whether the examples of inconsistencies we discuss in our report are 
systemic. As noted, our findings are primarily based on the problems 
we found with the overall data collection process. Thus, our 
recommendation to GSA involves adopting sound data collection 
practices. In addition, GSA stated that, because FRPP data is reported 
annually, property utilization and condition may change from the time 
that information is submitted. However, we took steps, including 
discussing the history of each property with local property managers, 
to ensure that any inconsistencies we found were not due to changes 
between the time data was reported and the time we visited the 
building. These steps and a more detailed discussion of our views on 
GSA's comments can be found in appendix IV. 

VA generally agreed with our findings and provided additional 
information on VA's federal real property portfolio, their methods of 
reporting real property data, and efforts the department is taking to 
address its excess and underutilized properties. However, VA disagreed 
with some of our statements related, for example, to property 
utilization. A more detailed discussion of our views on VA's comments 
can be found in appendix V. In addition, USDA provided comments and 
clarifications which we incorporated, where appropriate. For example, 
USDA clarified its previous statement regarding utilization reporting 
to emphasize that component agencies are directed to follow FRPC 
guidance, but acknowledged that this guidance was inconsistent. USDA 
also clarified a previous statement regarding problems faced by the 
agency when reporting FRPP data in 2011. USDA's comments can be found 
in appendix VI. 

We are sending copies of this report to the Director of OMB; the 
Administrator of GSA; and the Secretaries of Energy, Interior, 
Veterans Affairs, and Agriculture. Additional copies will be sent to 
interested congressional committees. We will also make copies 
available to others upon request, and the report is available at no 
charge on the GAO website at [hyperlink, http://www.gao.gov]. 

If you have any questions about this report, please contact me at 
(202) 512-5731 or wised@gao.gov. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this report. Major contributors to this report are listed in 
appendix VII. 

Sincerely yours, 

Signed by: 

David Wise: 
Director: 
Physical Infrastructure Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Our objectives were to determine to what extent (1) the Federal Real 
Property Profile (FRPP) database consistently and accurately describes 
the nature, use, and extent of excess and underutilized federal real 
property, and (2) progress is being made toward more effectively 
managing excess and underutilized federal real property. We identified 
five civilian real property-holding agencies for our review: the 
General Services Administration (GSA); the Departments of Energy 
(DOE), the Interior (Interior), and Veterans Affairs (VA); and the 
U.S. Department of Agriculture (USDA). We chose GSA, DOE, Interior, 
and VA because these were the four largest agencies in terms of total 
building square footage of all civilian real property agencies that 
are required to submit data under the executive order.[Footnote 54] On 
the basis of the data available, these five agencies report 
approximately two-thirds of the building square footage reported by 
civilian agencies. We did not consider agencies in the Department of 
Defense because we previously reported on the department's excess 
facilities.[Footnote 55] We added USDA to our list of selected 
agencies because USDA reported more excess properties than any other 
civilian agency in 2009.[Footnote 56] 

To determine to what extent the FRPP database described the nature, 
use, and extent of excess and underutilized federal real property, we 
obtained and analyzed FRPP data submissions and other real property 
data from the five selected agencies; interviewed real property 
officers at these agencies; visited sites where the agencies had 
reported excess or underutilized properties; interviewed Office of 
Management and Budget (OMB) staff; and reviewed FRPC guidance and 
other documents related to the agencies' real property data and the 
FRPP database. We obtained the agencies' FRPP data submissions for 
fiscal years 2008 through 2010. According to our conversations with 
agency officials, FRPP submissions can only be changed by the agency 
submitting the data. As a result, we believe that the FRPP submissions 
obtained from the agencies match the data contained in the FRPP 
database and are sufficiently reliable for the purpose of evaluating 
the consistency and accuracy of the FRPP database. In addition, for 
select data elements, we obtained real property data from the source 
databases that each agency uses to generate its annual FRPP 
submissions. We obtained source system data to get the actual 
percentage of utilization of each property as of the date when these 
data were extracted and provided to us in September or October of 
2011. For the years of our FRPP data review (fiscal years 2008 through 
2010), agencies were only required to report utilization using four 
categories: overutilized, utilized, underutilized, or not utilized. 
However, the FRPP guidance stated that agencies should maintain the 
actual percentage of utilization in their own systems for audit 
purposes.[Footnote 57] 

We posed questions to senior real property officers at the five 
agencies about the collecting and reporting of real property data. To 
gather detailed examples of excess and underutilized properties and to 
learn about the processes by which data on such properties are 
collected and submitted to the FRPP database, we visited sites where 
the five agencies had reported excess or underutilized properties. We 
selected these sites using information from the agencies' FRPP 
submissions. To narrow our scope, we chose only federally owned 
buildings for our visits. Using the most recent FRPP submissions we 
had at the time (fiscal year 2010), we selected a nonprobability 
sample of owned buildings for each agency that were listed as excess 
(on the status indicator data element) or underutilized (on the 
utilization data element), or both. Because VA did not classify any of 
their owned buildings as "excess," we also selected VA buildings 
classified as "not utilized."[Footnote 58] Because this is a 
nonprobability sample, observations made at these site visits do not 
support generalizations about other properties described in the FRPP 
database or about the characteristics or limitations of other 
agencies' real property data. Rather, the observations made during the 
site visits provided specific, detailed examples of issues that were 
described in general terms by agency officials regarding the way FRPP 
data is collected and reported. We focused on sites clustered around 
four cities: Washington, D.C.; Dallas, Texas; Los Angeles, California; 
and Oak Ridge, Tennessee. This strategy afforded both geographic 
diversity and balance among our selected agencies while also 
accommodating time and resource constraints. In selecting sites and 
buildings in and around these four cities, we took into account the 
following factors: 

* We prioritized sites that had multiple excess and/or underutilized 
properties. This allowed us to see more properties in a limited amount 
of time. 

* We prioritized the selection of excess and/or underutilized 
properties that fell into one of the five types of real property uses 
required to submit utilization data in 2010--offices, warehouses, 
hospitals, laboratories, and housing. However, we also selected some 
buildings classified as "other," particularly buildings that were 
large or that had high reported values.[Footnote 59] 

* We attempted to balance the numbers of excess and underutilized 
buildings we selected. (Some buildings were classified as both excess 
and underutilized since these classifications are made in different 
data elements in FRPP.) 

* We attempted to visit four or five sites from each of the five 
different agencies.[Footnote 60] However, most GSA sites consisted of 
only one building, so we selected more sites for GSA. In the end, we 
selected four sites from each of Interior and USDA, five from each of 
DOE and VA, and eight from GSA. In all, we selected 26 sites. 

Whereas we selected sites based in large part on the numbers and kinds 
of buildings they had, the exact set of buildings we visited at each 
site depended on additional factors. At some sites, there were too 
many excess and underutilized properties to see them all. In those 
circumstances, we prioritized large buildings with high reported 
values and tried to see a number of different kinds of buildings 
(e.g., a mix of offices and warehouses). At several sites, local 
property officials identified other properties with issues related to 
excess and underutilized property that we toured and analyzed. 

Prior to each site visit, we analyzed the FRPP data submissions for 
fiscal years 2008 through 2010 and agencies' source system data we 
obtained in September or October 2011, and developed questions about 
the data submissions for local property managers. During our site 
visits, we interviewed local property managers and compared what we 
observed at each building with the FRPP data for that building. When 
not restricted by security concerns, we photographed the building. In 
addition to questions about individual properties, we questioned the 
local officials about the kind of data they collect on the properties 
and how they collect it. 

To summarize inconsistencies and inaccuracies between our observations 
at the properties we visited and the FRPP data for those properties, 
we analyzed 2008 through 2010 FRPP data for all of the properties. As 
part of this review, we checked the reported utilization, condition 
index, value, and annual operating costs for each building for all 
three years. Four analysts, working together, evaluated these data 
both for inaccuracies (cases where the data clearly misrepresented the 
actual utilization, condition, value, or annual operating costs of a 
property) and for year-to-year inconsistencies (cases where reported 
values showed large year-to-year changes that did not correspond to 
observable changes in the property and that agency officials could not 
explain). Each of the 26 sites was counted as having a problem on a 
given data element if at least one inconsistency or inaccuracy was 
identified for that element.[Footnote 61] The four analysts discussed 
each case and arrived at a consensus as to whether a problem existed 
in each data element for each site. 

To determine the progress being made toward more effective management 
of federal excess and underutilized real property, we asked the senior 
real property officers at each of our selected agencies to provide 
written responses to a standard list of questions. These questions 
addressed management issues related to excess and underutilized owned 
buildings, how FRPP data are reported, and progress the agency is 
making toward sales and utilization goals set by the OMB. We analyzed 
the written responses to our questions and reviewed supporting 
documentation provided by agency officials such as regulations, 
policies, and other documents. In addition to reviewing the written 
responses to our questions, we reviewed a number of our previous 
reports and pertinent reports by the Federal Real Property Council 
(FRPC), the Congressional Budget Office, and the Congressional 
Research Service. We also reviewed and analyzed federal laws relating 
to real property for the major real property-holding agencies. 

Because OMB chairs FRPC and has set cost savings goals related to 
federal real excess and underutilized properties, we analyzed 
documents related to these goals--including the 2004 executive order, 
the June 2010 presidential memorandum on "Disposing of Unneeded 
Federal Real Estate," and legislation proposed by the administration 
known as the Civilian Property Realignment Act (CPRA). We also 
interviewed knowledgeable OMB staff about agency-specific targets 
related to the June 2010 presidential memorandum, the methodology used 
to project potential cost savings if CPRA were to be enacted, and 
progress toward costs savings goals set by the previous administration. 

We conducted this performance audit from May 2011 to June 2012 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Federal Real Property Council Fiscal Year 2010 Inventory 
Data Elements and Descriptions: 

Data element number: 1; 
Data element name: Real property type; 
Data element definition: Real property type indicates the asset as 
land, building, or structure. 

Data element number: 2; 
Data element name: Real property use; 
Data element definition: Real property use indicates the asset's 
predominant use as land, building, or structure. 

Data element number: 3; 
Data element name: Legal interest[A]; 
Data element definition: The legal interest indicator is used to 
identify a real property asset as being owned by the federal 
government, leased to the federal government (i.e., as lessee), or 
otherwise managed by the federal government. Otherwise managed 
properties are (1) owned by a state or foreign government that has 
granted rights for use to the federal government using an arrangement 
other than a lease, or (2) trust entities that hold titles to assets 
predominantly used as museums, yet may receive some federal funds to 
cover certain operational and maintenance costs. 

Data element number: 4; 
Data element name: Status[B]; 
Data element definition: Status reflects the predominant physical and 
operational status of the asset. Buildings, structures, and land 
assets have one of the following attributes: 
* Active. Currently assigned a mission by the reporting agency; 
* Inactive. Not currently being used but may have a future need. 
Includes real property in a caretaker status (closed pending disposal; 
for example, facilities that are pending a Base Realignment and 
Closure action) and closed installations with no assigned current 
federal mission or function; 
* Excess. Formally identified as having no further program use of the 
property by the landholding agency; 
* Disposed. Required for assets that have exited the federal portfolio 
of assets during the current reporting period. 

Data element number: 5; 
Data element name: Historical status; 
Data element definition: Each asset owned or leased by the federal 
government (and those otherwise managed by museum trusts) has one of 
the following historical status attributes: 
* National Historic Landmark; 
* National Register listed; 
* National Register eligible; 
* Noncontributing element of a National Historic Landmark or National 
Register listed district; 
* Evaluated, not historic. 

Data element number: 6; 
Data element name: Reporting agency; 
Data element definition: Reporting agency refers to the federal 
government agency reporting the property to the FRPC inventory 
database. 

Data element number: 7; 
Data element name: Using organization; 
Data element definition: Using organization refers to the predominant 
federal government agency or other nonfederal government entity 
occupying the property. 

Data element number: 8; 
Data element name: Size; 
Data element definition: Size refers to the size of the real property 
asset according to appropriate units of measure. The unit of measure 
used for the three real property types is as follows: 
* For land, the unit of measure is acreage and is designated as either 
rural acres or urban acres; 
* For buildings, the unit of measure is area in square feet and is 
designated as gross square feet; 
* For structures, the unit of measure includes the size (or quantity) 
and unit of measure, and can include square yards, linear feet, miles, 
and the numbers of specific types of structures. 

Data element number: 9; 
Data element name: Utilization; 
Data element definition: Utilization is defined as the state of having 
been made use of, that is, the rate of utilization. The utilization 
rate for each of the five building predominant use categories is 
defined as follows: 
* office: ratio of occupancy to current design capacity; 
* hospital: ratio of occupancy to current design capacity; 
* warehouse: ratio of gross square feet occupied to current design 
capacity; 
* laboratory: ratio of active units to current design capacity, and; 
* housing: percent of individual units that are occupied. 

Data element number: 10; 
Data element name: Value; 
Data element definition: Value is defined as the cost of replacing the 
existing constructed asset at today's standards and is also known as 
plant replacement value (PRV) or functional replacement value. 

Data element number: 11; 
Data element name: Condition index; 
Data element definition: Condition index is a general measure of the 
constructed asset's condition at a specific point in time. The 
condition index is calculated as the ratio of repair needs to PRV. 
Repair needs are the amount necessary to ensure that a constructed 
asset is restored to a condition substantially equivalent to the 
originally intended and designed capacity, efficiency, or capability. 
Agencies will initially determine repair needs based on existing 
processes, with a future goal to further refine and standardize the 
definition. The condition index will be reported as a "percent 
condition" on a scale of zero to 100 percent. 

Data element number: 12; 
Data element name: Mission dependency; 
Data element definition: Mission dependency is the value an asset 
brings to the performance of the mission as determined by the 
governing agency: 
* mission critical: without constructed asset or parcel of land, 
mission is compromised; 
* mission dependent, not critical: does not fit into mission critical 
or not mission dependent categories; and; 
* not mission dependent: mission unaffected. 

Data element number: 13; 
Data element name: Annual operating costs; 
Data element definition: Annual operating costs consist of the 
following: 
* recurring maintenance and repair costs; 
* utilities; 
* cleaning and janitorial costs, and; 
* roads and grounds expenses. 

Data element number: 14; 
Data element name: Main location; 
Data element definition: Main location refers to the street or 
delivery address for the asset or the latitude and longitude 
coordinates. 

Data element number: 15; 
Data element name: Real property unique identifier; 
Data element definition: Real property unique identifier is a code 
that is unique to a real property asset that will allow for linkages 
to other information systems. The real property unique identifier is 
assigned by the reporting agency and can contain up to 24 alpha-
numeric digits. 

Data element number: 16; 
Data element name: City; 
Data element definition: The city or town associated with the reported 
main location in which the land, building, or structure is located. 

Data element number: 17; 
Data element name: State; 
Data element definition: The state or District of Columbia associated 
with the reported main location in which the land, building, or 
structure is located. 

Data element number: 18; 
Data element name: Country; 
Data element definition: The country associated with the reported main 
location in which the land, building, or structure is located. 

Data element number: 19; 
Data element name: County; 
Data element definition: The county associated with the reported main 
location in which the land, building, or structure is located. 

Data element number: 20; 
Data element name: Congressional district; 
Data element definition: The congressional district associated with 
the reported main location in which the land, building, or structure 
is located. 

Data element number: 21; 
Data element name: ZIP code; 
Data element definition: The ZIP code associated with the reported 
main location in which the land, building, or structure is located. 

Data element number: 22; 
Data element name: Installation/subinstallation identifier; 
Data element definition: Installation identifier. Land, buildings or 
other structures, or any combination of these. Examples of 
installations are a hydroelectric project, office building, warehouse 
building, border station, base, post, camp, or an unimproved site; 
Subinstallation identifier. Part of an installation identified by a 
different geographic location code than that of the headquarters 
installation. An installation must be separated into subinstallations 
and reported separately when the installation is located in more than 
one state or county. However, an agency may elect to separate an 
installation into subinstallations even if the installation is not 
located in more than one state or county. 

Data element number: 23; 
Data element name: Restrictions; 
Data element definition: Restrictions are limitations on the use of 
real property and include: 
* environmental restrictions (cleanup-based restrictions, etc.); 
* natural resource restrictions (endangered species, sensitive 
habitats, floodplains, etc.); 
* cultural resource restrictions (archeological, historic, Native 
American resources, except those excluded by Executive Order 13007, 
Section 304 of the National Historical Preservation Act, etc.); 
* developmental (improvements) restrictions; 
* reversionary clauses from deed; 
* zoning restrictions; 
* easements; 
* rights of way; 
* mineral interests; 
* water rights; 
* air rights; 
* other; 
* not applicable. 

Data element number: 24; 
Data element name: Disposition; 
Data element definition: Agencies are required to provide all assets 
that have exited the federal portfolio of assets during the reporting 
fiscal year. This will include, but is not limited to, sales, federal 
transfers, public benefit conveyances, demolitions, and lease 
terminations. Disposition data is reported only in the year the asset 
has exited the federal portfolio of assets; 
Agencies are required to provide: 
* status; 
* reporting agency; 
* real property unique identifier; 
* disposition; 
Agencies are also required to report: 
* disposition method (methods include public benefit conveyance, 
federal transfer, sale, demolition, lease termination, or other); 
* disposition date; 
* disposition value (the PRV for public benefit conveyances, federal 
transfers, demolitions, and other dispositions; 
the sales price for sales; 
and the government's cost avoidance for lease terminations); 
* net proceeds (the proceeds received as part of assets disposed 
through sales and termination of leases minus the disposal costs 
incurred by the agency), and; 
* recipient (the name of the federal agency or nonfederal recipient 
that received the property through public benefit conveyance or 
federal transfer). 

Data element number: 25; 
Data element name: Sustainability; 
Data element definition: Sustainability is reported for building 
assets, is optional reporting for structures, and is not reported for 
land and reflects whether or not an asset meets the sustainability 
criteria set forth in Section 2 (f) (ii) of Executive Order 13423. To 
be considered sustainable and report "yes," the asset must meet the 
five Guiding Principles for High Performance and Sustainable Buildings 
or be third-party certified as sustainable by an American National 
Standards Institute (ANSI)-accredited institution: 
* Yes. Asset has been evaluated and meets guidelines set forth in 
Section 2 (f) (ii) of Executive Order 13423; 
* No. Asset has been evaluated and does not meet guidelines set forth 
in Section 2 (f) (ii) of Executive Order 13423; 
* Not yet evaluated. Asset has not yet been evaluated on whether or 
not it meets guidelines set forth in Section 2 (f) (ii) of Executive 
Order 13423; 
* Not applicable. Guidelines set forth in Section 2 (f) (ii) of 
Executive Order 13423 do not apply to the asset. This includes assets 
that will be disposed of by the end of fiscal year 2015 and are no 
longer in use. 

Source: FRPC. 

[A] The legal interest element includes a lease maintenance indicator 
and a lease authority indicator, which are not reported for "owned" 
and "otherwise managed" properties. This report focuses on owned 
properties. 

[B] The status element includes an outgrant indicator identifying when 
the rights to the property have been conveyed or granted to another 
entity. For the purposes of this report, we did not evaluate or 
analyze information for the outgrant indicator. 

[End of table] 

[End of section] 

Appendix III: Comments from the Office of Management and Budget: 

Note: GAO comments supplementing those in the report text appear at 
the end of this appendix. 

Executive Office of The President: 
Office Of Management And Budget: 
The Controller: 
Washington, D.C. 20503: 

May 30, 2012: 

Mr. David Wise: 
Director, Physical Infrastructure: 
U.S. Government Accountability Office: 
440 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Wise: 

Thank you for the opportunity to comment on the draft report entitled 
"Federal Real Property: National Strategy and Better Data Needed to 
Improve Management of Excess and Underutilized Property" (GAO-
1 2-645). The Office of Management and Budget (OMB) agrees with the 
draft report's general conclusion that challenges remain in the 
management of the Federal Government's excess and underutilized 
properties, but that significant progress has been made. OMB is 
concerned, however, with some of the phrasing in the draft report that 
may lead the reader to draw unintended conclusions regarding the 
appropriate next steps for improving the accuracy and consistency of 
the Federal Real Property Profile (FRPP). Furthermore, OMB offers 
further context and clarification regarding the Administration's 
overall efforts on real property reform, and how those efforts will 
translate into savings for the taxpayer. [See comment 1] 

(1) Further study is needed to determine the overall accuracy and 
consistency of the data in the Federal Real Property Profile. [See 
comment 2] 

OMB agrees that the problems that the draft report identifies (in 
utilization data, condition index, annual operating costs, mission 
dependency, and value at the 26 sites that were visited) warrant 
further evaluation to determine if such issues are systemic. Because 
the Federal Real Property Profile database covers real property data 
from more than 30 different agencies and roughly 1.1 million assets 
there can be occasional errors. 

In particular, the individual findings in the draft report raise 
important questions about the need to verify the accuracy and 
consistency of the data in the FRPP. However, at this time, there 
remains a lack of statistically sound evidence to determine whether 
any issues identified by GAO are systematic and therefore 
generalizable to the broader FRPP. Based on our understanding of the 
draft report, the conclusion on the accuracy of the data in the FRPP 
is based on a non-probability or convenience sample that "[does] not 
support generalizations about other properties described in the FRPP 
database or about the characteristics or limitations of other 
agencies' real property data."[Footnote 1] Yet OMB is concerned that the
draft report does ultimately make generalizations about the accuracy 
of all data in the FRPP based on this non-probability sample, through 
statements such as "considering that we found multiple inconsistencies 
and inaccuracies in both the designation of properties as 
underutilized and the annual operating costs of those properties, the 
accuracy of this and other tables in the summary report is 
questionable."[Footnote 2] 

In contrast, the methodology of GAO's February 2011 report—which 
concluded that Federal real property data was of improved reliability 
and should be removed from the high-risk list was based on a
more comprehensive review of "the fiscal year 2008 and 2009 data for 
domestic buildings and structures from the Departments of Homeland 
Security, the Interior, and Veterans Affairs, and the General Services
Administration."[Footnote 3] Similarly, in testimony on April 6, 2011 
before the House Subcommittee on Economic Development, Public 
Buildings, and Emergency Management, the GAO witness Stated that its 
recent analysis "found none of the basic problems we have previously 
found" and that "agencies continue to improve their real property 
data."[Footnote 4] In addition, in testimony on June 9, 2011 before 
the Senate Subcommittee on Federal Financial Management, Government 
Information, Federal Services, and International Security, the GAO 
witness reiterated its finding that "the Federal Government has taken 
numerous steps since 2003 to improve the completeness and reliability 
of its real property data."[Footnote 5] [See comment 3] 

Furthermore, in calling into question the reliability of FRPP data, 
the draft report points to the fact that agencies deploy unique 
approaches for measuring the utilization of Federal facilities. GAO is 
correct that this is the case in many circumstances. Since the 
creation of the FRPP database in 2004, it has been standard practice 
for each agency to measure certain data elements, such as utilization, 
through agency-specific means tailored to the agency's individual 
needs and circumstances.[Footnote 6] OMB recognizes the trade-off that 
exists between providing agencies with the flexibility to define data 
elements based on their agency-specific requirements and establishing 
government-wide data elements that can be used to support aggregate 
analysis across the entire FRPP database. The approach on this 
continues to evolve as OMB and the Federal Real Property Council work 
with the agencies to clarify management information requirements at 
both the agency and government-wide level. 0M13 welcomes GAO's counsel 
on the best manner in which to manage these trade-offs. [See comment 4] 

As mentioned above, OMB believes that further study is warranted to 
determine the extent to which these most recent Findings are systemic, 
and to therefore best inform the appropriate next steps for the 
government to drive improvements. The draft report should clarify this 
critical next step. 

(2) Agencies have undoubtedly realized savings in seeking to meet the 
President's real estate savings goals. However, a clarification for 
the approach for calculating savings may be warranted. 

From the start of this Administration, it has been a priority of the 
President to make sure that the Government operates with the utmost 
efficiency and eliminates unnecessary or wasteful spending. 
Particularly in these tough budgetary times, we have a responsibility 
to deliver an efficient, effective government that makes smart use of 
its resources. Accordingly, President Obama directed agencies to 
achieve $3 billion in real estate savings in his June 10, 2010 
Presidential memorandum, "Disposing of Unneeded Federal Real Estate — 
Increasing Sales Proceeds, Cutting Operating Costs, and Improving
Energy Efficiency." In implementing that memorandum, agencies have 
pursued various measures to improve the efficiency of their real 
estate inventories—including by disposing of excess property; reducing 
operations and utility costs; canceling unnecessary projects; 
increasing the use of telework; and consolidating leases. Agencies 
have established targets to exceed the President's goal of $3 billion by
$500 million, and their individual targets have been posted on a 
public real estate dashboard on Performance.gov. As of the date of 
this letter, agencies have identified $2.4 billion in savings toward the
President's goal. 

The goal of improving the efficiency of real property management is 
consistent with some of the agency activities described in the draft 
report, which observes that all five agencies that were reviewed "have 
taken steps to use their property more efficiently," and to address 
excess and underutilized properties in their inventories.[Footnote 7] 
For example, the Department of Veterans Affairs established a process 
to identify vacant and underutilized assets for reuse.[Footnote 8] The 
Department of the Interior reduced its space per employee by ten 
percent.[Footnote 9] The Department of Energy used internal rental 
rates to encourage efficient space utilization by its bureaus. 
[Footnote 10] GSA found alternative uses for unused assets in its 
inventory.[Footnote 11] All five agencies that were reviewed had 
increased the opportunities for their employees to use telework or 
hoteling arrangements in the workspace.[Footnote 12] Overall, these 
actions that improve the Federal Government's management of real 
property have a significant effect on the efficient utilization of 
taxpayer dollars, and help agencies to overcome the challenge of 
implementing their missions in the current environment of reduced 
budgets. OMB believes that it is important to recognize agency efforts 
such as these to make smart choices that advance the taxpayers' long-
term interests. 

OMB, however, acknowledges that the method for attributing cost 
savings to these efforts could be further clarified so that the public 
has a clear understanding of how such savings are being calculated.
For example, measurements of savings reported by OMB include funds 
that are repurposed as a result of actions such as the cancellation of 
unneeded projects, the elimination of deferred maintenance, and the 
avoidance of the operations and maintenance costs of underutilized or 
excess property. Because these actions lead to improved use of Federal 
resources, they result in a more efficient government, and warrant 
inclusion in the "savings" metric that OMB uses to track progress on 
the June 2010 Presidential memorandum. Further, we believe that 
agencies have generally maintained accurate data concerning the 
effects of these actions on the cost of operating and maintaining 
their inventories. [See comment 5] 

(3) The draft report's characterization of the Administration's 
proposal for a Civilian Property Realignment Act could benefit from 
further clarity on the savings goals associated with the proposal and 
further context about GAO's recent support for the proposal. 

Building on the effort to achieve the President's real estate savings 
goals, this Administration proposed the Civilian Property Realignment 
Act (CPRA) in the President's FY 2012 Budget, followed by the 
transmittal to Congress of an authorizing proposal on May 5, 2011. 
CPRA would create an independent Board of private and public sector 
leaders to develop recommendations to dispose, consolidate, or 
reconfigure Federal civilian real estate holdings. The Board, similar 
to the Department of Defense's Base Realignment and Closure 
Commission, would aggregate identified opportunities to transform the 
Federal Government's civilian real estate inventory into a bundled 
package of recommendations, and forward that package to Congress. 
Congress could only disapprove of the bundled recommendations as a 
whole, without the ability to remove line-items. After 45 days, unless 
Congress disapproves, the Board's recommendations would proceed to be 
implemented by agencies. 

In the past, GAO has made statements ranging from neutral to 
supportive regarding the Administration's proposal. In prepared 
testimony of June 9, 2011 before the Senate Subcommittee on Federal 
Financial Management, Government Information, Federal Services, and 
International Security, "Federal Real Property: Proposed Civilian 
Board Could Address Disposal of Unneeded Facilities," the GAO witness 
stated that CPRA is "somewhat responsive" to the "challenges to 
effective real property management, such as legal and financial 
limitations and stakeholder influences."[Footnote 13] Specifically, 
the GAO witness stated that the independent board, the streamlined 
process, and the proposed revolving fund could help to streamline 
decisions in the disposal process, reduce financial disincentives, and 
address "stakeholder influences."[Footnote 14] 

OMB is concerned that the draft report underestimates the proposed 
legislation's potential to improve the management of real property. 
The draft report cites a CBO analysis that focuses only on "excess" 
properties in the FRPP and does not consider the potential proceeds 
reflected in other underutilized properties that are not currently 
designated as "excess." In contrast, the Administration's $4.1 billion 
estimate of the potential proceeds that would result from the 
enactment of the CPRA proposal reflects an analysis of the entire 
Federal real property inventory, not just those currently identified 
as "excess." The draft report does, however, cite CBO's conclusion 
that CPRA could result in additional properties being disposed of in 
other ways that would reduce the need for future appropriated funds to 
maintain them, which is consistent with OMB's statements to GAO and in 
several Congressional hearings that the CPRA has the potential to 
create billions of dollars of savings from greater efficiency in the 
inventory. [See comment 7] 

(4) The Administration currently has a strategy for improving the 
management of Federal real property assets that serves as an important 
foundation for the national strategy recommended by GAO. 

The Federal Government has thousands of properties, ranging from 
buildings to small sheds in remote locations, that it no longer needs 
to fulfill its mission for the American people. This is an 
unacceptable waste of taxpayer dollars at any time; but it is 
particularly unacceptable today, when we have a pressing need to rein 
in our spending and reduce our deficits. This Administration has 
already implemented several significant initiatives to reform federal 
real property asset management. In combination with the 
Administration's recommendation for the creation of a Civilian 
Property Realignment Board, this implementation represents a 
comprehensive and carefully considered governmentwide strategy for 
addressing the Government's long-term real estate challenges. 

As described above, the June 2010 Presidential memorandum established 
a real estate savings goal. The memorandum described the problems in 
the Federal Government's real estate inventory, clarified the role of 
OMB and the agencies, and directed agencies to create Real Property 
Cost Savings and Innovation Plans to justify their contribution toward 
the Presidential goal. 

As part of the ongoing strategy to implement the June 10 Presidential 
memorandum, on May 4, 2011, the OMB Director issued M-11-22 
"Realignment of Federal Real Estate" and created the Real Property
Advisory Committee (RPAC). Consistent with the Presidential 
memorandum, M-11-22 reiterated the known challenges with the real 
estate inventory, restated the goals of the Administration, 
established additional guiding principles of real estate reform, and 
clarified the role of the RPAC in support of Presidential real estate 
goals and the Administration's efforts to support the CPRA proposal. 
To ensure broad representation, the RPAC is made up Chief Financial 
Officers and Senior Real Property Officers from the agencies with the 
largest inventories of real estate. 

The Administration continues to emphasize the importance of real 
property reform, as clarified in the recent OMB Memorandum M-12-12, 
"Promoting Efficient Spending to Support Agency Operations," which was 
issued on May 11, 2012. As part of the President's "Campaign to Cut 
Waste," M-12-12 provides that agencies may not increase the size of 
their civilian buildings inventory, unless exceptions that will be 
articulated in upcoming guidance apply. This policy will enable the 
Federal Government to continue making progress on real estate 
management by incentivizing better utilization of building space and 
more thorough justification of space acquisition. 

Though the Federal Government has made significant gains in improving 
the management of real property through the efforts on the President's 
$3 billion real estate savings goal, a bold step must be taken to make 
a longer-term impact on the Federal Government's inventory. The 
Administration believes that enactment of the President's CPRA 
proposal would empower agencies to make the best decisions to 
transform the face of the Federal Government's real property holdings. 

In closing, OMB appreciates the draft report's feedback on the need to 
continue to improve Federal real property asset management. We look 
forward to working with GAO to ensure that these and other efforts 
form a comprehensive vision of how to approach the Federal 
government's real estate holdings. In cooperation with governmentwide 
bodies such as the FRPC and the RPAC, OMB will continue to seek 
greater reductions in both the cost of operating the Federal real 
property inventory and in the Federal Government's footprint, as well 
as the removal of "Managing Federal Real Property" from the GAO High
Risk list. 

Thank you for the opportunity to comment on the draft report. We look 
forward to continuing our work together. 

Sincerely, 

Signed by: 

Danny Werfel: 
Controller: 

Appendix III Footnotes: 

1. Draft, n.7, p. 3. 

2. Draft, p. 29. 

3. GAO-11-278, p. 23. 

4. GAO-11-520T, p. 7. 

5. GAO-11-704T, p. 7. 

6. This agency-specific tailoring can be compared to the rationale 
behind the Federal Accounting Standards Advisory Board's new standards 
on deferred maintenance and repair, which acknowledge the role for an 
appropriate degree of deference to agency management decisions. See 
Federal Accounting Standards Advisory Board, Deferred Maintenance and 
Repairs, n. 4, p. 7 (2012) (indicating that "determination of 
acceptable condition may vary both between entities and among sites 
within the same entity" and that "management shall determine what 
level of condition is acceptable"). 

7. Draft, p. 36. 

8. Draft, p. 36. 

9. Draft, p. 37. 

10. Draft, p. 37. 

11. Draft, p. 38. 

12. Draft, p. 39. 

13. GAO-11-704T, "What GAO Found" section. 

14. GAO-11-704T, "What GAO Found" section. 

The following are GAO's comments on the Office of Management and 
Budget letter dated May 30, 2012. 

GAO Comments: 

1. OMB stated that the agency agreed with the report's general 
conclusion that challenges remain in the management of excess and 
underutilized properties, but that significant progress has been made. 
While we stated that limited progress has been made, our draft and 
final report do not describe the progress as significant. 

2. OMB stated that the agency is concerned with some phrasing in the 
report that may lead the reader to draw unintended conclusions 
regarding the appropriate next steps for improving the accuracy and 
consistency of the FRPP. OMB stated that based on its understanding of 
our report, our findings are based on the 26 site visits we conducted 
and further study is needed to determine whether the issues we found 
with the consistency and accuracy of FRPP data are systemic. OMB also 
asserts that despite our use of a non-probability sample, we make 
generalizations based on the sample in the report. As we discuss in 
the report and reiterated in discussions with OMB staff during the 
comment period, our findings are primarily based on the problems we 
found with FRPC's data collection practices, which affect the entire 
data collection process. The work we did at 26 sample sites complement 
those findings and illustrate how poor data collection practices 
impact data submissions, but they are not the only basis for our 
conclusions. Furthermore, in its comments, OMB acknowledged that "it 
has been standard practice for each agency to measure certain data 
elements, such as utilization, through agency-specific means tailored 
to the agency's individual needs and circumstances." Therefore, it is 
unlikely, as OMB asserts, that further study could find consistent 
data on properties outside of our sample when OMB has acknowledged 
that the standards themselves are inconsistent for reporting data. For 
these reasons, we believe our recommendation remains valid that GSA, 
in consultation with FRPC, should first address the problems with data 
collection practices, which our methodology and findings showed were 
in fact systemic. In response to OMB's comment, we clarified the 
report to emphasize the basis for our findings. 

3. OMB commented that this report conflicts with previous testimonies 
and our 2011 update to GAO's high-risk series which described prior 
improvements. This report acknowledges such prior progress but 
provides a more in-depth review of multiple agencies' data collection 
practices than prior work. Furthermore, as our report describes, in 
December 2011, changes were made to the data collection requirements 
which led to further concerns by agencies about data accuracy. Our 
report findings are also consistent with a September 2011 GAO report 
that discussed the Department of Defense's FRPP data.[Footnote 62] In 
that report we found that the Department of Defense's reported FRPP 
utilization data consisted of multiple discrepancies between the 
reported utilization designations and actual building utilization, 
along with other FRPP submission inaccuracies. Therefore, this report 
is consistent with our prior conclusions that some progress has been 
made since 2003, which we have discussed in multiple GAO reports and 
testimonies. However, the report on the Department of Defense's data 
and this report demonstrated significant problems in the data 
collection process. 

4. We believe that our first recommendation--that OMB develop a 
national strategy--would assist in addressing the tension OMB 
describes between providing agencies with the flexibility to define 
data elements based on their agency-specific requirements and 
establishing governmentwide data elements that can be used to support 
aggregate analysis across the entire FRPP database. We will continue 
to engage OMB on the topic of real property management and we believe 
that this report outlines the next steps. As we recommend in this 
report, a critical step is for OMB to develop a national strategy for 
managing excess and underutilized properties. In the area of data 
collection, a national strategy could help identify management 
priorities for problems such as this and lay out the principles for 
weighing the cost of uniform data collection to the agencies with the 
benefit that would be obtained by aggregate analysis of uniform data. 
As we stated in the report, if certain data elements cannot be 
collected consistently, they may not be appropriate to include in a 
database that appears to be standard across the government. 

5. We agree with OMB's statement that the method of attributing cost 
savings to efforts made to improve property management could be 
further clarified so that the public has a clear understanding of how 
such savings are calculated. We believe that transparency and 
accountability are critical in the federal government's service to the 
taxpayers and would support action taken by OMB to increase 
transparency in this regard. We did not make a specific recommendation 
regarding how cost savings, particularly cost savings associated with 
the June 2010 presidential memorandum, should be clarified. Our report 
assessed real property management issues related to excess and 
underutilized property and recommended a: 

national strategy that could be used to guide efforts such as the June 
2010 presidential memorandum. 

6. OMB stated that the report's characterization of the 
administration's Civilian Property Realignment Act (CPRA) proposal 
could benefit from further clarity on savings goals and further 
context about our recent support for the proposal. Regarding savings 
goals, OMB stated that the administration's $4.1 billion estimate of 
the potential proceeds from the Act's implementation reflects an 
analysis of the potential proceeds that would result from the entire 
federal real property inventory, not just those currently identified 
as "excess." We acknowledged in the report that these savings, 
according to OMB, would also come from reduced operating costs and 
efficiencies. We could not, however, analyze the basis for these 
savings because, as we discussed, OMB did not provide us with a 
methodology, calculations, or any basis for its stated projections. We 
requested this information from OMB multiple times over a period of 
eight months, and were only provided with a general description of the 
savings, similar to what OMB provided in its letter commenting on this 
report. Until we can evaluate the analysis OMB references, we will be 
unable to provide a more thorough assessment. Furthermore, our views 
on the effect that CPRA could have on problems we have found in 
federal real property management have not changed: that CPRA can be 
somewhat responsive to real property management challenges faced by 
the government. For example, CPRA proposes an independent board that 
would streamline the disposal process by selecting properties it 
considers appropriate for public benefit uses. This streamlined 
process could reduce disposal time and costs. 

7. OMB stated that the administration has a strategy for improving the 
management of federal real property that serves as an important 
foundation for the national strategy we recommend in this report. OMB 
stated that several significant initiatives, including the June 2010 
presidential memorandum on excess property and the recommendation for 
a civilian property realignment board, represent a comprehensive and 
carefully considered governmentwide strategy for addressing the 
government's long-term real property challenges. While the efforts OMB 
describes represent a range of individual initiatives, we continue to 
believe that they lack the key characteristics of a cohesive national 
strategy. A national strategy would improve the likelihood that 
current initiatives to improve real property management will be 
sustained across future administrations. The desirable characteristics 
of a national strategy that we've identified--such as a clear purpose, 
scope, and methodology; problem definition and risk assessment; and 
identified resources, investments, and risk management--could serve to 
articulate a more sustained, long-term strategy to guide individual 
initiatives such as those described in OMB's comments. For example, 
related to resources and investments, agencies often lack funding to 
prepare unneeded properties for disposal or to pursue demolition. A 
national strategy could address this issue directly and transparently 
so that the true costs of real property reform are evaluated more 
completely by decision makers. 

[End of section] 

Appendix IV: Comments from the General Services Administration: 

Note: GAO comments supplementing those in the report text appear at 
the end of this appendix. 

GSA: 
The Administrator: 
U.S. General Services Administration: 
1275 Fist Street, NE: 
Washington, DC 20417: 
Telephone: (202)501-0800: 
Fax: (202) 219-1243:  

June 7, 2012: 

The Honorable Gene L. Dodaro: 
Comptroller General of the United States: 
U.S. Government Accountability Office: 
Washington, DC 20548:  

Dear Mr. Dodaro:  

The U.S. General Services Administration (GSA) appreciates the 
opportunity to review and comment on the draft report," Federal Real 
Property: National Strategy and Better Data Needed to Improve 
Management of Excess and Underutilized Property" (GAO-12-645). The 
Government Accountability Office (GAO) was asked to determine the 
extent to which the Federal Real Property Profile (FRPP) database 
accurately describes the nature, use and extent of excess and 
underutilized federal real property, and the progress being made 
toward more effective management of these properties.  

The report recommends that the Administrator of GSA, in collaboration 
with the Federal Real Property Council (FRPC), member agencies, 
develop and implement a plan to improve the FRPP consistent with sound 
data collection practices, so that data collected are sufficiently 
complete, accurate and consistent. We agree with the findings, in part, 
and the recommendation and will take appropriate action. GSA offers 
the following for further clarification regarding the FRPP.  

(1) The FRPP is a collection of real property data reported from more 
than 30 agencies on an annual basis. In FY 2011 agencies reported 
369,000 buildings and 465,000 structures at a total of 3.30 billion 
square feet; and 34 million acres. In FY 2012, GSA took steps to 
evaluate agency submitted data, met with agency representatives to 
correct errors and deficiencies to provide reasonable assurance that 
the data submitted was accurate. Due to the sheer magnitude of the 
data, it is expected that data entry errors occur. The FRPP system has 
a robust error identity program to minimize agencies from submitting 
data that is inconsistent with the business rules established in the 
FRPP. The report provides samples of data inconsistencies; however, it 
is unclear whether these inconsistencies are systemic throughout the 
FRPP or are occurring in specific agencies' reporting of the data. 
[See comment 1] 

(2) As the FRPP is an annual report not a real property asset 
management system, and the data is stagnant as of September 30 of each 
year. Utilization of the properties may change from the time of 
submission. Additionally, the condition of buildings and structures 
may also change. GSA performs a condition survey every two years on 
its own inventory. The condition of a building/structure may not be 
updated annually if it is part of a facility and its repair needs were 
aggregated at the facility level; the asset was not active or excess; 
GSA did not have repair and alteration responsibility; and, the 
asset's condition had worsened since the last survey was completed or 
after the submission of the annual data. [See comment 2] 

(3) GSA supports the Administration's proposed Civilian Property 
Realignment Act that would create an independent Board of private and 
public sector leaders to develop recommendations to dispose, 
consolidate or reconfigure Federal civilian real property holdings. 
This proposal will provide opportunities to transform the real 
property inventory. 

(4) GSA requests that GAO correct the computation formula for the 
Condition Index on page 12. The Condition Index is calculated by 
subtracting the ratio of repairs to the plant replacement value (PRV) 
from the number 1; i.e. 1-(repairs/PRV). [See comment 3] 

Specific actions being taken in response to the GSA recommendation are 
enclosed. We are confident that these actions will satisfactorily 
remedy the concerns raised by the GAO. 

If you have any questions or concerns, please do not hesitate to 
contact Mr. Rodney P. Emery, Associate Administrator, Congressional 
and Intergovernmental Affairs, at (202) 501-0563. 

Sincerely, 

Signed by: 

Dan Tangherlini: 
Acting Administrator: 

Enclosure: 

[End of letter] 

Enclosure: 

GAO Draft Report (GA0-12-645): 

Actions to be Taken in Response to the Recommendation: 

Background: 

Beginning with the development of the Federal Real Property Profile 
(FRPP), as required in Executive Order 13327, the U.S. General 
Services Administration (GSA) worked closely with the Federal Real 
Property Council (FRPC) in developing the data requirements that were 
used in the initial 2005 data collection. GSA was the Co-Chair of the 
Inventory Subcommittee of the FRPC and helped to develop the initial 
set of data elements with the subcommittee over a span of 6-8 months. 
During this time period, GSA worked with the agencies to develop 
general definitions of the real property data. The diverse nature of 
the agencies' real property portfolios and their databases required 
that the definitions be broad and general in order to be met by all 
agencies government-wide. This collaborative government-wide approach 
led to the initial 23 data elements that formed the basis for what was 
intended to be an inventory of the Federal Government's real property. 

Since 2005, GSA has been improving the FRPP database by enhancing 
technological capabilities to increase user friendliness and identify 
errors. GSA meets with the agencies throughout the year to ensure 
proper understanding of technology and business requirements of the 
annual FRPP reporting. 

Specific Actions: 

This GAO report correctly identifies many of the problems that 
hampered the effective collection of accurate data in 2011. GSA is 
responsible for the management and oversight of the FRPP database and 
real property policy. GSA also has staff with extensive real property 
experience and has a strong working relationship with the agencies. 
GSA has already begun to address many of the GAO recommended changes 
and improvements in this report. Specifically, in consultation and 
collaboration with an FRPC working group and OMB: 

* GSA has undertaken a review of all the data elements in the FRPP and 
has recommended to the FRPC that data elements not consistent from 
agency to agency be dropped from the data base for the Fiscal Year 
2012 reporting period. 

* GSA revised the definitions of data elements that may have been 
confusing to agencies, and will modify the FRPP data dictionary to be 
more detailed in the discussion of the required data elements. 

* GSA has tightened the reporting requirements for data elements by 
eliminating the optional reporting of specific data elements. 

* GSA has developed and will propose a revised format for the annual 
FRPP final report that includes all relevant performance measures, 
consistent with Executive Order 13327. 

* GSA will propose refining the performance measures, and limit the 
number of those measures to ensure that only essential measures, 
linked to performance goals, are collected consistent with the 
requirements in Executive Order 13327. 

The following are GAO's comments on the General Services 
Administration letter dated June 7, 2012. 

GAO Comments: 

1. GSA stated that it is unclear whether the examples of 
inconsistencies described in our report are systemic throughout the 
FRPP, or are occurring in specific agencies' reporting of the data. As 
we discuss in the report, our findings are primarily based on the 
problems we found with FRPC's data collection practices, which 
negatively impact the entire data collection process. The examples of 
inconsistencies and inaccuracies that we describe complement those 
findings and illustrate how poor data collection practices affect data 
submissions, but they are not the only basis for our conclusions. In 
fact, our recommendation to improve FRPP data collection involves the 
sound data collection practices that we believe should be put in 
place. GSA has agreed with this recommendation and has taken action to 
begin correcting the problems we identified. In response to GSA's 
comments, we made some clarifications to the report's discussion of 
the basis of our findings. 

2. GSA stated that, because the FRPP is an annual report, property 
utilization may change from the time it is submitted in December. As 
we conducted site visits for this review, we took steps to ensure that 
any inconsistencies and inaccuracies we found were not due to a 
significant change in the building's use from the time it was reported 
to the time we visited. First, we discussed the history of the 
building's use with the local officials who manage the building to 
ensure that there was no recent change in the building's utilization. 
Second, since 2011 FRPP data had not been reported at the time we 
began our site visits, we obtained utilization data from the agencies' 
source systems (which are used to produce FRPP utilization data) so 
that we had recent utilization data (as of the fall of 2011) before we 
began our site visits in December 2011. 

GSA also stated that the condition of the buildings may change or may 
not be updated annually. Related to this issue, we found that all five 
agencies did not always follow the guidance provided by the FRPC on 
how to calculate condition index. This led to severely blighted 
buildings receiving excellent condition scores, which could not be 
accounted for by reported changes in condition over a relatively short 
period of time. 

3. GSA made a comment related to the computation formula for Condition 
Index. We have clarified this statement in the report. 

[End of section] 

Appendix V: Comments from the Department of Veterans Affairs: 

Note: GAO comments supplementing those in the report text appear at 
the end of this appendix. 

Department of Veterans Affairs
Washington, DC 20420 

May 29, 2012: 

David Wise: 
Director, Physical Infrastructure Issues: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548:  

Dear Mr. Wise:  

The Department of Veterans Affairs (VA) has reviewed the Government 
Accountability Office's (GAO) draft report, "Federal Real Property: 
National Strategy and Better Data Needed to Improve Management of 
Excess and underutilized Property" (GAO-12-645). VA generally agrees 
with GAO's findings.  

The enclosure contains comments and provides context related to 
statements made in the draft report. VA appreciates the opportunity to 
comment on your draft report. 

Sincerely,  

Signed by: 

John R. Gingrich: 
Chief of Staff:  

Enclosure:  

[End of letter] 

Enclosure: 

Department of Veterans Affairs (VA) Comments to Government 
Accountability Office (GAO) Draft Report: "Federal Real Property: 
National Strategy and Better Data Needed to Improve Management of 
Excess and underutilized Property" (GAO-12-645): 

General Comment: 

VA currently has more than 165 million owned and leased square feet 
(Sq. Ft.) in 7,400 buildings. As a result of greater than anticipated 
demand for services, our current inventory is over-utilized, with a 
system-wide average of 116 percent utilization, or 16 percent over 
designed usage capacity. However, even with a system-wide over-
utilization, the VA's current capital asset portfolio does not fully 
meet VA's needs for service delivery. As a result of this mismatch 
between what VA has in its capital portfolio and what it needs, VA 
does have a small inventory of vacant or underutilized assets. 

VA has made progress in reducing the number of vacant and 
underutilized buildings in its inventory. As of the end of fiscal year 
(FY) 2008, VA had approximately 1,165 buildings classified as vacant 
or underutilized. Since that time, VA has aggressively pursued 
disposal and reuse options for these assets. As of March 1, 2012, VA 
has reduced the number of vacant and underutilized buildings to 
approximately 850. This represents a 27 percent reduction in vacant 
and underutilized buildings over a span of about three and a half 
years. 

Several initiatives and processes have contributed to this reduction 
in vacant and underutilized assets. One key action was the 
implementation of the Building Utilization Review and Repurposing 
(BURR) initiative. BURR specifically focused on reuse opportunities to 
support homeless housing and other outcomes that provide direct 
benefits to the Veteran. If a given building is found to be unsuitable 
for repurposing, other disposal options are evaluated. The BURR 
initiative identified 36 sites that include 208 buildings and more 
than 600 acres that are being repurposed through our now-expired 
Enhanced-Use Lease authority to provide more than 4,100 units of 
homeless and other veteran housing. 

The Strategic Capital Investment Planning (SCIP) process also supports 
reduction in vacant and underutilized assets. As part of SCIP, an 
annual space assessment is conducted VA-wide. This analysis reviews 
what space each VA Medical Center currently has in its inventory, plus 
whatever space would be added via projects that are currently funded 
and/or in-process. This is compared to the projected space needs for 
the next 10-years. Using the results of this assessment, the SCIP 
process requires that all excess space have a planned disposal or 
reuse action to ensure facilities would be right-sized for the 10-year 
planning horizon. 

Additional Comments: 

1. Page 10, second paragraph, third sentence: GAO noted "VA officials 
reported using a complex model to calculate utilization using "ideal 
space,' which is different from Federal Real Property Council (FRPC) 
guidance for determining a building's utilization. Despite the 
inconsistency of this method of measuring utilization with FRPC 
guidance, VA officials reported that OMB staff approved of their 
method of reporting utilization." [Now on p. 10, first full paragraph] 

Page 10, footnote 24: VA mentioned as determining utilization based on 
"ideal space." In addition, officials reported that an old building 
with an inefficient floor plan may be larger than necessary for the 
service it provides, but if changes cannot be made to the building due 
to its historical designation or because it is cost prohibitive to 
renovate, this building may be perpetually designated as underutilized 
even though it is fully occupied on a day-to-day basis. [Now footnote 
24] 

Page 24, fifth sentence: VA reported as saying that OMB agreed to let 
VA use an alternative definition for utilization than the one provided 
in FRPC guidance. [Now on top of p. 24] 

VA Comment: VA does use a complex model to calculate utilization; 
however, this is not inconsistent with FRPC guidance. Specifically, 
for most space types, FRPC guidance states that utilization is defined 
as "ratio of occupancy to current design capacity". It further 
elaborates that "Agencies will have flexibility for determining
current design capacity". In discussions with OMB and GSA when FRPC 
guidance was first introduced in 2005, VA noted that medical space, 
including supporting elements such as engineering and administrative 
space, should be based on the workload and types of services delivered 
to Veterans. Unlike normal office space, medical space is frequently 
occupied by patients, not by government full-time equivalent 
employees; therefore, a normal occupancy rate would not be appropriate.
OMB agreed with this approach in June 2006; therefore, this is how VA 
calculates utilization in accordance, not in conflict, with OMB 
guidance. [See comment 1] 

In regards to buildings being perpetually designated as underutilized, 
part of the intent of defining utilization the way VA does is to 
identify these situations, so instead of having "perpetually 
underutilized" situations, the situations can be rectified via a 
combination of consolidation, new construction, and disposal. While 
cost and historical designation affect how a building's utilization 
can be improved, VA believes identifying underutilizations is much 
better than ignoring the fact that the building may not be properly 
sized or suited to deliver services to Veterans. [See comment 2] 

2. Page 11, first paragraph, second sentence: GAO site visit to VA 
location used as example for utilization data inconsistencies or 
inaccuracies. [Now on pages 10-11] 

VA Comment: GAO cited two examples of utilization inconsistencies at 
VA sites. In  one site, VA reported utilization of 39 percent. 
However, upon visiting the site, GAO noted the building was fully 
occupied. This building is used as swing space; therefore, utilization 
fluctuates based on need for swing space. FRPC reporting is done 
annually, so it is a point in time reference. At the time the FRPC 
report was generated, the building was not fully occupied. The second 
example notes a building with 59 percent reported utilization. 
However, upon visiting the site, GAO  notes only 10 percent occupancy. 
This building is office space, with some swing space as well. Unlike 
medical space, office space can change utilization frequently, and 
timing of the FRPC reporting is only a single reference point in the 
utilization of a building. At the time the FPRC report was generated, 
the building was approximately 59 percent utilized based on VA's 
utilization calculation methodology. [See comment 3] 

3. Page 16, first full sentence: GAO noted "VA told us that most of 
their buildings are located on medical campuses and are not 
individually metered; therefore, utilities cannot be measured for one 
particular building." [Now near the top of p. 16] 

VA Comment: Many buildings do not have individual meters, but the 
statement that "most" do not is not accurate. There is a legislative 
requirement to implement building level metering (Energy Policy Act 
(EP Act) of 2005, EO 13423 of 2007, and Energy Independence and 
Security Act (EISA) 2007); however, it is up to the agency to 
determine the size or characteristics of buildings that would be 
metered. VA, in conjunction with Department of Energy guidance 
(Guidance for Electric Metering in Federal Buildings - October 2006 
and Metering Best Practices: A Guide to Achieving Utility Resource 
Efficiency Release 2.0 - August 2011), determined that there would be 
little value in metering many of the small buildings on a medical 
center campus that consume little energy. Therefore, VA instead has 
focused on buildings that are 50,000 Gross Square Feet or larger or 
buildings that are highly energy intensive. For all of these 
buildings, VA has completed installation of electric meters. VA is 
also on the verge of completing the installation of gas and water 
meters for these buildings. [See comment 4] 

4. Page 18, sentences 4-7: GAO noted "VA's designation of mission 
dependency is a function of utilization. Assets with a high percentage 
of utilization are labeled "mission critical" and those with low 
utilization are labeled "not mission dependent." VA officials said 
that they use this method because it is the best way for them to 
manage the mission dependency of their assets --- for example, 
hospitals measure performance by the number of patients served. 
However, since mission dependency is based strictly on utilization in 
VA data, this performance measure does not provide any new information 
on the asset in the FRPP database." [Now near the top of p. 18] 

VA Comment: Given that VA bases utilization on the workload and 
services offered at a given site, the rate of utilization is directly 
proportional to the criticality. If no services are offered and there 
is no workload, the asset is not considered mission dependent. Both 
elements are required for submission to FRPC; therefore VA submits 
both even if they are similar in nature. OMB has approved this as an 
appropriate way to designate mission dependency for VA. 

5. Page 21, figure 8: Veterans Center used as example. GAO notes 
"Figure 8 shows properties that have high reported values and high 
condition indexes even though they are in poor condition and have 
remained unused for many years." [Now on p. 20] 

Page 22, figure 9: VA portable modular office building used as 
example. GAO notes "Figure 9 shows properties that reported 
significant changes in value from one year to the next that local 
agency officials could not explain." 

VA Comment: The current definition for replacement value, as 
documented by OMB  and GSA, is that "Value is defined as the cost of 
replacing the existing constructed asset at today's building 
standards". Furthermore, a specific formula is noted as  "Value = Unit 
x Unit Cost x Overhead Factor". Using these two definitions, VA is 
reporting replacement value as required and consistent with the 
definitions. VA uses square footage as the unit, a localized cost per 
square foot for each facility as the unit cost, and an overhead factor 
of 75% to account for construction related project costs. A modular 
building or vacant building, even if in poor condition, must be 
reported using today's construction standards and costs. The 
definition is not an appraised value. Although costs may look high 
when looking at the building as it stands today, the value is being 
reported as required by the FRPC definition. VA would be happy to 
consider using an alternative method of calculation if the FRPC 
proposes one. 

Specific to GAO comment on the change in value of one modular building 
from 2009 to 2010, this comment was the result of an incorrect square 
footage being reported for that asset. Because square footage is a 
factor in the value calculation, the value increased significantly. 
The error was identified and corrected for the 2011 reporting cycle. 

6. Page 32, first paragraph, last sentence: VA mentioned as not 
including asset sales as part of its savings plan. [Now on p. 31] 

VA Comment: The savings plan that VA developed in response to the 
Presidential Memorandum in June 2010, submitted to OMB in Sept 2010, 
did not include asset sales due to the requirement of savings being 
realized by the end of FY 2012. The timeframe for completing a sale is 
significant and could not be executed before the end of FY 2012. VA 
was and is in full compliance with the Presidential directive. 

7. Page 35, table 4: GAO-identified problems with VA's cost savings 
estimates related to excess and underutilized property. [Now on p. 33] 

VA Comment: GAO's Report 12-305 "VA Health Care: Methodology for
Estimating and Process for Tracking Savings Need Improvement" included 
findings related to excess and real property savings. VA non-concurred 
with these comments. VA's specific reasons for non-concurring are 
noted in the report under Agency comments. We believe we are reporting 
and tracking consistently with guidance provided in the Presidential 
Memorandum of June 2010 (Disposing of Unneeded Federal Real Estate — 
Increasing Sales Proceeds, Cutting Operating Costs, and Improving 
Energy Efficiency). We continue to non-concur with these comments. 
[See comment 5] 

8. Page 36, bullet 1: VA stated that it implemented a process to 
identify vacant and underutilized assets that they could use to meet 
space needs. Also, the agency plans to reuse currently-utilized assets 
that will be available in the future. In addition, VA has identified 
36 sites that include 208 buildings and more than 600 acres that it 
can use to provide more than 4,100 units of homeless and other
Veteran housing. [Now on 9. 35] 

Page 37, sixth full sentence: VA consolidated its medical center 
campuses in Cleveland, Ohio, and engaged a number of private partners 
directly to reuse the unneeded sites, using its Enhanced-Use Lease 
authority. [Now on 9. 35] 

VA Comment: We appreciate GAO's recognition of VA's effort to 
continuously improve management of its real property portfolio. By 
repurposing vacant and underutilized assets using VA's now-expired 
Enhanced-Use Lease (EUL) authority, VA was able to outlease 
underutilized or vacant land and thereby obtain housing options, 
enhanced services, and improved operations, in addition to reducing 
VA's operating costs of these underutilized and vacant assets. 

The EUL authority served as a valuable and necessary tool to continue 
maximizing the use of our real property assets, and VA remains 
committed to working with the Administration and Congress on re-
authorization of this authority (or similar authority). 

9. Page 40, first full sentence: VA officials stated that disposing of 
property under the McKinney-Vento Act can be a lengthy, cumbersome 
process, and can significantly delay property disposal. [This 
statement is no longer in the report] 

Page 40, first full paragraph, third sentence: VA reported that it is 
unable to dispose of a 15,200 square foot building at Menlo Park, 
California, that has been used both as a residence and a research 
building during its 83 year history. The building has been scheduled 
for demolition since 2001, but VA cannot demolish it because of its 
historic designation. [Now on p. 38] 

Page 43, Stakeholder interests can conflict with property disposal or 
reuse plans: VA reported it has been unable to dispose of buildings in 
part because local interests are opposed to the department's disposal 
plans. [Now on p. 41] 

Pages 43 - 44, Locations of some federal properties can make property 
disposal and reuse difficult: VA reported that most of its buildings 
are located on medical center campuses. [Now on pages 41-42] 

VA Comment: VA has made significant progress in reducing its inventory 
of excess or underutilized assets. However, as GAO has noted, there 
are challenges that frequently must be considered and overcome before 
disposals or reuses can occur. Much of VA's inventory is over 50 years 
old, with an average building age of 57 years. Thus, many of the 
buildings are designed as historic. In addition to the age of the 
inventory, many of these assets are in poor condition, and are located 
on large medical center campuses, with limited access to the general 
public. These are factors that must be considered when determining the 
appropriate use or disposal of the asset. The ability to sell or 
repurpose assets, as well as the ability to demolish assets, can be 
significantly impacted by these factors. VA will continue moving 
forward with an aggressive real property management program; however, 
we appreciate GAO's recognition of the challenges VA and many other 
agencies face. 

The following are GAO's comments on the Department of Veterans Affairs 
letter dated May 29, 2012. 

GAO Comments: 

1. VA stated that its complex model for calculating utilization is 
consistent with FRPC guidance because the guidance allows for 
flexibility on how agencies determine a key component of utilization 
(current design capacity) and that OMB agreed with their approach. 
However, rather than exercising flexibility in its use of current 
design capacity, VA used a different definition of utilization than 
the definition outlined in FRPC guidance. FRPC guidance defines 
utilization as the ratio of occupancy to current design capacity; 
however, VA defines utilization as the ratio of ideal space to 
existing space.[Footnote 63] While we acknowledge in our report that 
VA received OMB approval for reporting utilization differently, this 
method of reporting utilization is still inconsistent with the 
definition of utilization in FRPC guidance. Utilization is a 
performance measure and the 2004 executive order stated that 
performance measures shall be designed to allow comparing the 
agencies' performance against industry and other public sector 
agencies. The inconsistencies we found from VA and other agencies in 
reporting utilization makes comparing utilization among agencies 
impossible. 

2. VA also stated that "identifying underutilizations is much better 
than ignoring the fact that the building may not be properly sized to 
deliver services to Veterans." We did not suggest that VA should 
ignore any aspect of its buildings that is problematic. We continue to 
believe that VA's method of calculating utilization has led to some 
buildings being continuously designated as underutilized even when 
local officials, who know the buildings best, have told us that the 
buildings have been fully occupied. 

3. VA stated that the reasons for the inaccuracies that we found in 
utilization at two VA buildings were due to the use of these buildings 
as "swing space," meaning that utilization changes frequently based on 
need for space. In its comments, VA indicated that since FRPP data are 
reported annually, the designation of this space at the time of 
reporting changed from the time that we visited the sites. However, as 
we conducted our site visits for this review, we took steps to ensure 
that any inconsistencies we found were not due to a significant change 
in the building's use from the time it was reported to the time we 
visited. First, we discussed the history of the building's use since 
2008 with the local officials who manage the building to ensure that 
there was no recent change in the building's utilization. Second, 
since 2011 FRPP data had not been reported at the time we began our 
site visits, we obtained utilization data from the agencies' source 
systems (which are used to produce FRPP utilization data) so that we 
had recent utilization data (as of the fall of 2011). The data we 
obtained from VA were current as of October 2011 and our visit took 
place in December 2011. Based on VA's comments, we clarified this 
information in our report to show that we accounted for the time 
between 2010 FRPP reporting and our visit in December 2011. Based on 
our visits to the buildings and our discussions about the history of 
the buildings' use with the VA officials who manage them, we do not 
believe that VA's explanation accounts for the inconsistencies we 
found in utilization as detailed below: 

* Local VA officials who manage the buildings told us that the first 
building VA discussed in its comments is used for accounting and 
payroll purposes and that it was always fully occupied during the 
period of our review (dating back to 2008). However, the building was 
reported to the FRPP as underutilized during each of these years. In 
fact, just two months prior to our visit, VA's October 2011 source 
data showed a utilization of 45 percent for this building even though 
it was fully occupied. 

* Local VA officials who manage the second building VA discussed in 
its comments told us that the building was mostly unoccupied because 
they had recently acquired it from the Department of Defense and that 
multiple improvements had to be made before it could be occupied by 
staff. Based on this, the local officials told us that it could not 
have been utilized at 59 percent in October 2011 as VA source data 
indicated. 

4. VA made a comment related to individually metered buildings. We 
clarified VA's statement in the report so that it is consistent with 
these comments. 

5. In reference to our findings on problems with cost savings 
associated with the June 2010 presidential memorandum, VA stated that 
it disagreed with findings in a previous GAO report (GAO-12-305) that 
we referenced.[Footnote 64] In its comments on GAO-12-305, VA 
officials did not concur with certain parts of the report related to 
decreasing energy costs and improving non-recurring maintenance 
contracting. However, we did not reference the previous GAO report on 
these matters. Rather, we referenced that report's discussion on 
savings associated with reducing leased space through telework. VA 
confirmed the problems that the previous GAO team found with the 
savings associated with the telework program in its comments on GAO-12-
305, stating that the "telework program is still in its infancy and 
actual real property savings requires reducing space that is currently 
leased. These reductions in leased space may not be fully realized in 
2012." As a result, VA stated it its comments on GAO-12-305 that the 
telework initiative was removed from the description of savings in its 
fiscal year 2013 budget. This is consistent with what we describe in 
this report. Therefore, VA's restatement of its disagreement with 
findings in GAO-12-305 has no bearing on this report. 

[End of section] 

Appendix VI: Comments from the U.S. Department of Agriculture: 

USDA: 
United States Department of Agriculture: 
Office of the Assistant Secretary for Administration: 
1400 Independence Avenue SW:  
Washington, DC 20250-0103: 

David Sausville: 
Assistant Director: 
Physical Infrastructure Issues: 
Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Reference: Draft GAO Report, Federal Real Property, 12-645: 

Dear Mr. Sausville: 

Thank you for the opportunity to comment on this draft report. The 
U.S. Department of Agriculture (USDA) has reviewed the draft report 
and wishes to provide the following clarifications and comments: 

Page 10: Utilization. The USDA Property Management Regulations (AGPMR) 
110-84.30 requires each agency to certify the accuracy of their real 
property data annually. 

This is in addition to the inventory requirements of the Federal 
Management Regulations. The Federal Real Property Council (FRPC) 
defines utilization for categories of real property. For example, 
utilization for offices it is the ratio of occupancy to current design 
capacity (see page 10 of FRPC User Guidance for FY11 Reporting). The 
comment on page 10 that, "USDA allows each area to determine how it 
will measure utilization" is not entirely correct. The agency, 
Agricultural Research Service (ARS) issues guidance each year 
requiring their area offices to follow the guidance contained in the 
FRPC guidance. However the FRPC has not established a government wide 
definition for how occupancy and design capacity would be measured. 
[See p. 48] 

In FY 12, USDA has made strides to improve data accuracy by providing 
monthly reports on real property data anomalies to USDA agencies. 
Additionally, USDA has started a series of monthly training sessions 
in the Corporate Property Accounting Information System (CPAIS) to 
ensure the agencies' real property specialists are entering data 
accurately. 

Page 16: Operating Costs. It is correct that USDA currently does not 
have an interface between its financial systems and real property 
system to automatically load actual operating cost data for individual 
assets. Also at many installations, individual assets are not 
separately metered, so agencies have to develop a methodology of 
allocating installation-level operating costs to each asset at that 
installation. However, the USDA National Finance Center is planning to 
issue a solicitation for a contractor to develop a Utility and 
Consumption System to automate this process of updating real property 
records with actual utility data. 

Page 19: Value. USDA has followed the FRPC guidance that dictates the 
use of Plant Replacement Value instead of actual fair market value. 
For the vast number of excess assets USDA has, it would be cost-
prohibitive to conduct appraisals. Plant Replacement Value was thus 
the only data available when projecting USDA's annual real property 
cost savings. 

Page 26: This comment, "Agencies only had 20 working days to respond 
to data changes..." should be clarified. The final FRPC FY11 reporting 
guidance was issued on October 4, 2011, which is after the fiscal year 
had ended. USDA's system of record, CPAIS, operates on a fiscal year 
basis and requires all data to be in compliance with the FRPC guidance 
and free of data gaps by September 30. As a result of not having final 
guidance, decisions were made for system development and data 
gathering based on the preliminary information provided late in the 
fiscal year. In order for USDA and its agencies to provide quality 
data, final guidance for reporting must be provided in enough time for 
our system of record to be modified to capture and store the data and 
the agencies to gather, enter and verify that data. [See p. 48] 

Should you have additional questions, please contact Paul Walden, 
Chief, Property Management Division, Office of Procurement and 
Property Management, at (202) 720-7283. 

Sincerely, 

Signed by: 

Pearlie S. Reed: 
Assistant Secretary for Administration: 

[End of section] 

Appendix VII: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

David Wise, (202) 512-5731 or wised@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, David Sausville, Assistant 
Director; Amy Abramowitz; Russell Burnett; Kathleen Gilhooly; Raymond 
Griffith; Amy Higgins; Amber Keyser; Michael Mgebroff; John Mingus 
Jr.; Joshua Ormond; Amy Rosewarne; Minette Richardson; Sandra Sokol; 
and Elizabeth Wood made key contributions to this report. 

[End of section] 

Footnotes: 

[1] GAO, High-Risk Series: Federal Real Property, [hyperlink, 
http://www.gao.gov/products/GAO-03-122] (Washington, D.C.: January 
2003). Our high-risk series identifies areas at high risk because of 
their greater vulnerabilities to waste; fraud; abuse; and 
mismanagement or major challenges associated with their economy, 
efficiency, or effectiveness. 

[2] Federal Real Property Asset Management, Exec. Order No. 13327, 69 
Fed. Reg. 5897 (Feb. 6, 2004). The executive order applies to agencies 
under the Chief Financial Officers Act of 1990. The act agencies are 
the executive branch agencies listed at 31 U.S.C. §901(b) and include 
the Departments of Agriculture, Commerce, Defense, Education, Energy, 
Health and Human Services, Homeland Security, Housing and Urban 
Development, Interior, Justice, Labor, State, Transportation, the 
Treasury, and Veterans Affairs; the Environmental Protection Agency; 
the National Aeronautics and Space Administration; the U.S. Agency for 
International Development; GSA; the National Science Foundation: the 
Nuclear Regulatory Commission; the Office of Personnel Management; the 
Small Business Administration; and the Social Security Administration. 
The order does not apply to the U.S. Postal Service. 

[3] For example, See GAO, Federal Real Property: Proposed Civilian 
Board Could Address Disposal of Unneeded Facilities, [hyperlink, 
http://www.gao.gov/products/GAO-11-704T] (Washington, D.C.: June 9, 
2011); High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-11-278] (Washington, D.C.: February 
2011); and Federal Real Property: Progress Made Toward Addressing 
Problems, but Underlying Obstacles Continue to Hamper Reform, 
[hyperlink, http://www.gao.gov/products/GAO-07-349] (Washington, D.C.: 
Apr. 13, 2007). 

[4] Section 102 of Title 40 of the U.S. Code defines excess property 
as "property under the control of a federal agency that the head of 
the agency determines is not required to meet the agency's needs or 
responsibilities." However, GSA officials told us that designating a 
property as excess in the FRPP does not mean that an agency is 
declaring it to GSA as excess for the purpose of disposal. For 
example, they said that agencies can designate a property as excess in 
the FRPP as a way of creating a "parking lot" for properties that they 
are not prepared to address. Underutilized property means "an entire 
property or portion thereof, with or without improvements, which is 
used: (a) Irregularly or intermittently by the accountable Executive 
agency for current program purposes of that agency; or (b) For current 
program purposes that can be satisfied with only a portion of the 
property." 41 C.F.R. § 102-75.50. 

[5] We reported in September 2011 on Department of Defense excess 
facilities. We found that the Department of Defense is limited in its 
ability to identify potential excess facilities because it does not 
maintain complete and accurate data concerning the utilization of its 
facilities. See GAO, Excess Facilities: DOD Needs More Complete 
Information and a Strategy to Guide Its Future Disposal Efforts, 
[hyperlink, http://www.gao.gov/products/GAO-11-814] (Washington, D.C.: 
Sept. 19, 2011). 

[6] We chose GSA, DOE, Interior, and VA because these agencies 
contained the largest total building square footage of all civilian 
real property agencies that are required to submit data under the 
executive order. We added USDA to our list of selected agencies 
because USDA reported significantly more excess properties than the 
other civilian agencies in 2009, the most recent data we had available 
at the time. 

[7] Because this is a nonprobability sample, observations made at 
these site visits do not support generalizations about other 
properties described in the FRPP database or about the characteristics 
or limitations of other agencies' real property data. Rather, the 
observations made during the site visits provided specific, detailed 
examples of issues that were described in general terms by agency 
officials regarding the way FRPP data are collected and reported and 
served to complement our analysis of data collection practices across 
these agencies. 

[8] In the case of VA, which did not categorize any of its building as 
"excess," we visited sites where buildings had been reported as "not 
utilized" or "underutilized." 

[9] We visited excess and underutilized properties in areas of the 
country where our staff members doing this work were located--
Washington, D.C.; Dallas, Texas; and Los Angeles, California. We found 
only one DOE site that matched our criteria in these three areas, so 
we selected another region of the country that had a large 
concentration of excess and underutilized DOE properties--Oak Ridge, 
Tennessee. We did not attempt to compare the accuracy of one agency's 
data against the accuracy of another. Our purpose was to visit 
multiple sites from different agencies in different geographic regions. 

[10] At some sites, we could not take photographs because of security 
concerns. 

[11] Otherwise managed buildings may be owned by a state government or 
by a foreign government that has granted rights for use to the federal 
government in an arrangement other than a lease agreement. Otherwise 
managed properties may also be trust entities that hold title to real 
property assets predominantly used as museums, but federal funds may 
be received to cover certain operations and maintenance costs. 

[12] The Department of Defense reported owning or leasing about 63 
percent of the total building square footage reported for fiscal year 
2010. 

[13] See appendix II for a list of the 25 FRPP data elements as 
defined in 2010. 

[14] GSA, Federal Real Property Council: 2010 Guidance for Real 
Property Inventory Reporting (Washington, D.C.: Oct. 25, 2010). 

[15] See GAO, Executive Guide: Effectively Implementing the Government 
Performance and Results Act, [hyperlink, 
http://www.gao.gov/products/GAO/GGD-96-118] (Washington, D.C.: June 
1996). 

[16] [hyperlink, http://www.gao.gov/products/GAO-11-704T]. 

[17] [hyperlink, http://www.gao.gov/products/GAO-11-278]. 

[18] According to OMB staff, in 2007, this goal was changed to 
achieving a $9 billion reduction in 2009 and a $15 billion reduction 
by 2015. 

[19] Telework is a work flexibility arrangement under which an 
employee works at home or a work site other than the location at which 
the employee would otherwise work. 

[20] The administration reports that agencies have now identified more 
than $3 billion in potential savings. 

[21] OMB, Living Within Our Means and Investing in the Future: The 
President's Plan for Economic Growth and Deficit Reduction 
(Washington, D.C., September 2011). 

[22] When CPRA was first proposed, OMB projected that it would save 
the government $15 billion within 3 years after enactment in sales 
proceeds and operations and maintenance savings. However, OMB staff 
told us that after internal deliberations, they decided to change this 
projection. 

[23] Letter from Douglas W. Elmendorf, Director, Congressional Budget 
Office, to Darrell E. Issa, Chairman, Committee on Oversight and 
Government Reform, U.S. House of Representatives, responding to 
Chairman Issa's request for the Congressional Budget Office to analyze 
the President's legislative proposal to expedite the disposal of 
federal civilian real property, June 27, 2011. 

[24] For laboratories, utilization is the ratio of active units to 
current design capacity. For housing, utilization is the percentage of 
individual units that are occupied. 

[25] In calculating utilization for offices, hospitals and warehouses 
(see footnote 24 for FRPC guidance on measuring utilization for 
laboratories and houses), FRPC guidance directs agencies to determine 
the ratio of occupancy to "current design capacity," but VA determines 
utilization based on "ideal space." Following their concept of 
utilization, VA officials reported that an old building with an 
inefficient floor plan may be larger than necessary for the service it 
provides, but if changes cannot be made to the building because of its 
historical designation or because it is cost prohibitive to renovate, 
this building may be perpetually designated as underutilized even 
though it is fully occupied on a day-to-day basis. 

[26] Though not required, VA reported the actual percentage of 
utilization for buildings that required a utilization submission to 
the FRPP in fiscal year 2010. 

[27] In addition to reviewing FRPP data from fiscal year 2008 to 
fiscal year 2010, we also obtained property data for select data 
elements from the source databases that each agency uses to generate 
its annual FRPP submissions. This helped ensure we had updated 
information for the buildings we visited during our review. The agency 
source data for each agency was from September or October of 2011. 

[28] VA took ownership of this building from DOD in 2011, but VA began 
occupying approximately 10 percent of the space since 2008. According 
to the local VA officials who manage the building, the level of 
occupancy for this building has not changed since 2008 and remains 
only 10 percent occupied. 

[29] PRV is the cost of replacing the existing constructed asset at 
today's standards. PRV will be discussed in greater detail later in 
this report. The entire formula for condition index is 1 minus the 
ratio of repair needs to PRV multiplied by 100. 

[30] GSA , Federal Real Property Council: 2010 Guidance for Real 
Property Inventory Reporting. 

[31] High condition indexes are indicative of properties that are in 
better condition than properties with lower condition indexes. As 
such, a property with a 100 percent condition index would represent a 
property that is in perfect or near-perfect condition. 

[32] FRPC guidance defines these three categories as follows: (1) 
mission critical: without constructed asset or parcel of land, mission 
is compromised; (2) mission dependent, not critical: does not fit into 
mission critical or not mission dependent categories; and (3) not 
mission critical: mission unaffected. A fourth category, not rated, is 
available for Department of Defense base realignment and closure 
properties. GSA, Federal Real Property Council: 2010 Guidance for Real 
Property Inventory Reporting. 

[33] FRPC only requires the value of buildings and structures to be 
reported in the federal real property inventory. As such, land is 
excluded for value. GSA, Federal Real Property Council: 2010 Guidance 
for Real Property Inventory Reporting. 

[34] [hyperlink, http://www.gao.gov/products/GAO/GGD-96-118]. 

[35] As part of its 2011 guidance, the FRPP requires agencies to 
collect additional information for five new data elements which also 
consist of 10 subelement categories. These five new data elements 
include total annual British Thermal Units consumption, personnel, 
anticipated disposition of asset, determination of excess, and 
potential candidate for sale. In addition, other changes were made to 
previous data elements. For example, beginning in 2011, agencies were 
required to report the percentage of utilization. GSA, Federal Real 
Property Council: 2011 Guidance for Real Property Inventory Reporting, 
Version 3. 

[36] See FRPC, Federal Real Property Council's FY 2010 Federal Real 
Property Report: An Overview of the U.S. Government's Real Property 
Assets at [hyperlink http://www.gsa.gov/portal/content/102880], 
accessed April 29, 2012. 

[37] [hyperlink, http://www.gao.gov/products/GAO/GGD-96-118]. 

[38] [hyperlink, http://www.gao.gov/products/GAO-07-349]. 

[39] [hyperlink, http://www.gao.gov/products/GAO-11-278]. 

[40] We did not attempt to determine whether all buildings at the 
sites we visited had corresponding unique identification numbers. 
However agency officials were able to locate buildings using unique 
identification numbers. 

[41] [hyperlink, http://www.gao.gov/products/GAO-07-349]. 

[42] The presidential memorandum does not require that all $3 billion 
in savings be obtained from efficiencies related to excess and 
underutilized property; cost savings can also be achieved through 
sustainability efforts such as better energy and water use that affect 
all real property in an agency's portfolio, among other things. 
However, for the purposes of this report, we focused on the extent of 
agency actions that are taken in response to this memorandum that 
affect excess and underutilized federal real property. 

[43] We did not conduct a comprehensive analysis of the cost savings 
claimed by the five reviewed agencies and have not evaluated the 
reliability of the cost savings they claim. We spoke with agency 
officials about their cost savings targets and found several issues 
that were of concern to us even without conducting an in-depth review 
of their claims. Our concerns are detailed in table 4. 

[44] Letter from Douglas W. Elmendorf, Director, Congressional Budget 
Office, to Darrell E. Issa, Chairman, Committee on Oversight and 
Government Reform, U.S. House of Representatives, responding to 
Chairman Issa's request for the Congressional Budget Office to analyze 
the President's legislative proposal to expedite the disposal of 
federal civilian real property, June 27, 2011. 

[45] While CBO questioned the proceeds that would be obtained through 
property sales, CBO did report in its analysis that CPRA could result 
in additional properties being disposed of in other ways that would 
reduce the need for future appropriated funds to maintain them. 

[46] We have work under way that examines how some civilian agencies, 
as one tool to enhance use of federal real property, are using their 
authority to enter into Enhanced Use Leases--long-term agreements with 
nonfederal entities for the use of excess or underutilized federal 
property in exchange for cash or other considerations. 

[47] Hoteling is a work arrangement in which employees work in 
multiple sites and use nondedicated, nonpermanent work spaces assigned 
for use by reservation on an as needed basis thus reducing needed 
space. 

[48] We have work under way that examines these challenges in more 
detail. 

[49] 16 U.S.C. §§ 470f, 470h-2. 

[50] Pub. L. No. 91-190, 83 Stat. 852 (Jan. 1, 1970), codified as 
amended at 42 U.S.C. §§ 4321-4347 (2011). 

[51] 41 C.F.R. § 102-75.955. 

[52] GAO, Biosurveillance: Efforts to Develop a National 
Biosurveillance Capability Need a National Strategy and a Designated 
Leader, [hyperlink, http://www.gao.gov/products/GAO-10-645] 
(Washington, D.C.: June 30, 2010). 

[53] See GAO, Combating Terrorism: Evaluation of Selected 
Characteristics in National Strategies Related to Terrorism, 
[hyperlink, http://www.gao.gov/products/GAO-04-408T] (Washington, 
D.C.: Feb. 3, 2004). 

[54] Based on the square footage reported by GSA in 2009. See GSA 
Office of Governmentwide Policy, FY 2009 Federal Real Property 
Statistics at [hyperlink, http://www.gsa.gov/portal/content/102880], 
last accessed March 2, 2012. At the time of selection, the 2010 
statistical report had not been released. 

[55] [hyperlink, http://www.gao.gov/products/GAO-11-814]. 

[56] In May 2011, the administration posted an interactive map of 
excess federal properties on its website. See [hyperlink, 
http://www.whitehouse.gov/issues/fiscal/excess-property-map], last 
accessed February 27, 2012. OMB told us that this map was created from 
the list of excess properties submitted to the FRPP database in 2009. 
The data from this map showed that USDA has greater than 2000 more 
properties than the civilian agency with the next highest number. 

[57] Beginning in fiscal year 2011, agencies were required to submit 
the actual utilization percentage for buildings that require a 
utilization submission. 

[58] VA defined "excess" differently than the other agencies we 
reviewed. Unless VA was ready to turn a building over to GSA to be 
disposed, it did not list the building as excess, and in its fiscal 
year 2010 submission it did not record any agency-owned buildings as 
excess. Because we still wanted to see VA properties not in use, we 
selected VA properties listed as "not utilized" (on the utilization 
data element) and treated these in the same way as properties listed 
as "excess" (on the status indicator data element) by the other four 
agencies. 

[59] One of our site visits was a return to a property that we had 
visited for a 2011 testimony on federal real property. For that 
testimony, we visited properties that had been listed on the White 
House website as excess. At that time, local agency officials were 
puzzled as to why some utilized properties were listed as excess. 
Since we later found out that this information was based on the 2009 
list of excess properties, we visited those properties again to follow 
up on the data submissions of those properties. 

[60] We did not select properties to support comparisons among 
agencies in the reliability of their data, nor do we make any such 
comparisons. 

[61] For the purpose of our review, we defined an inconsistency as a 
fluctuation of 20 percent or greater for data reported from one year 
to another and for which local agency officials were unable to provide 
an explanation for such a significant change. We defined an inaccuracy 
as a data error that clearly misrepresented the actual utilization, 
condition, value, or annual operating costs of a property. 

[62] [hyperlink, http://www.gao.gov/products/GAO-11-814]. 

[63] In calculating utilization for offices, hospitals, and 
warehouses, FRPC guidance directs agencies to determine the ratio of 
occupancy to "current design capacity." For laboratories, utilization 
is the ratio of active units to current design capacity. For housing, 
utilization is the percentage of individual units that are occupied. 
However, VA determines utilization based on "ideal space." 

[64] [hyperlink, http://www.gao.gov/products/GAO-12-305]. 

[End of section] 

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