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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

November 2014: 

Federal Real Property: 

Strategic Focus Needed to Help Manage Vast and Diverse Warehouse 
Portfolio: 

GAO-15-41: 

GAO Highlights: 

Highlights of GAO-15-41, a report to congressional requesters. 

Why GAO Did This Study: 

GAO has identified managing the federal government's real property 
portfolio—-which includes warehouses—-as a high-risk area, due to long-
standing problems such as reliance on long-term leasing. In 2013, 
federal civilian agencies reported that they occupied approximately 
19,000 warehouses consisting of approximately 90-million square feet 
of space. GAO was asked to examine the management of federal civilian 
warehouses. 

This report examines (1) available information on the characteristics 
of federal warehouses held or leased by civilian agencies; (2) the 
challenges selected civilian agencies report in acquiring, managing, 
and disposing of warehouse space; and (3) the extent to which GSA has 
fulfilled its federal real property leadership role with respect to 
warehouses. GAO analyzed fiscal year 2013 FRPP data on warehouses held 
or leased by federal civilian agencies; visited 30 GSA, Interior, and 
DOE warehouses—-selected to reflect a variety of uses and sizes-—and 
interviewed officials from the three agencies about real property 
data, the characteristics of warehouses, challenges to warehouse 
management, and GSA's real-property leadership role. 

What GAO Found: 

The federal government's vast civilian warehouse inventory supports a 
wide range of agencies' storage needs; however, some data in the 
Federal Real Property Portfolio (FRPP) are not transparent for 
decision makers. According to the fiscal year 2013 FRPP data, three 
civilian agencies—the General Services Administration (GSA), the 
Department of the Interior (Interior), and the Department of Energy 
(DOE)—-held or leased the most civilian warehouse space. GSA's 
warehouse portfolio—-the largest covering about 29-million square 
feet-—was divided across multiple agencies. This is because of GSA's 
landlord role to provide federal agencies with space from its 
government-owned inventory, as well as through leases with private 
companies. In the FRPP, GSA classified nearly all of this warehouse 
space as utilized and active. However, GAO found that among these 
warehouses were buildings that were vacant for extended periods of 
time. This discrepancy raises questions about the transparency and 
usefulness of FRPP warehouse data, which could be misinterpreted by 
decision makers, including Congress and the Office of Management and 
Budget. 

GSA, Interior, and DOE officials reported a wide range of challenges 
in acquiring, managing, and disposing of warehouse space, for example: 

* Storage specifications related to the materials being stored, such 
as humidity controls for paper documents, can pose challenges 
acquiring space. 

* Aging and historical facilities can be difficult to manage because 
they require costly maintenance or may no longer meet agencies' 
storage requirements. 

* Agencies are required to address contamination or environmental 
concerns when disposing of warehouses—for example through sale or 
demolition—which can be expensive and time consuming. Disposing of 
warehouses in remote or secured areas can be particularly challenging. 

GSA has taken steps to fulfill its real-property leadership role for 
the warehouse portfolio, but its approach lacks strategic focus. As 
the government's landlord, GSA has applied needs assessment and 
alternatives evaluation—leading capital-planning practices—to help 
agencies acquire warehouse space. However, GSA applied these practices 
on an asset-by-asset basis, rather than as part of a larger strategy 
rooted in priorities and a long-term plan, per leading practices. A 
strategic approach could help GSA overcome what are often seen as 
intractable challenges, such as a reliance on costly, long-term 
leasing or taking action to dispose of aging and obsolete assets. 
Additionally, GSA has a leadership role as a government-wide policy 
maker in the real property area. As part of the Freeze the Footprint 
policy, which directs agencies not to increase the total square 
footage of their domestic office and warehouse inventory compared to a 
fiscal year 2012 baseline, GSA has a role to consult with other 
agencies on more effective practices and efficient use of warehouse 
and office space. Despite past efforts, GSA has not fulfilled this 
government-wide policy role by providing a strategy for efficient use 
of warehouse space or leveraging its landlord experience to 
strategically address some of the challenges facing federal agencies. 
Such a strategy could encourage agencies to rethink their overall 
storage needs, and consolidate and colocate, when possible. 

What GAO Recommends: 

GAO recommends that GSA take actions to (1) enhance transparency of 
the FRPP data, (2) develop and implement a strategy to prioritize and 
plan for warehouse space, and (3) develop a strategy for its 
government-wide policy role in relation to warehouses. GSA generally 
agreed with the recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-15-41]. For more 
information, contact David Wise at (202) 512-2834 or wised@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Warehouse Inventory Is Vast and Diverse, but Data in the Federal Real 
Property Database Are Not Consistent or Transparent: 

Selected Agencies Report a Wide Range of Challenges in Acquiring, 
Managing, and Disposing of Warehouse Space: 

GSA Has Taken Some Steps to Fulfill Its Leadership Role with Respect 
to Warehouses, but Its Approach Lacks a Strategic Focus: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Comments from the General Services Administration: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Table: 

Table 1: Civilian Agencies' Space Categorized as Warehouse (in 
Descending Order by Square Feet) Based on Federal Real Property 
Profile Fiscal Year 2013 Data: 

Figures: 

Figure 1: General Services Administration's Civilian Warehouse Space, 
by Predominant Using Agency and Square Footage (in Million Square 
Feet), Based on Federal Real Property Profile, Fiscal Year 2013 Data: 

Figure 2: Examples of Department of the Interior Warehouses Used by 
the National Park Service in Washington, DC, (left) and Fish & 
Wildlife Service in Denver, Colorado, (right): 

Figure 3: The National Ice Core Laboratory Building in Lakewood, 
Colorado, (left) Is Used to Store Ice Core Samples (right): 

Figure 4: Vacant GSA Warehouses Identified as Active and Utilized in 
the FRPP: Warehouses in Washington, DC Have Been Vacant since 2009 
(left) and 2004 (right): 

Figure 5: Aging Occupied GSA Warehouse in Ft. Worth, Texas: 

Figure 6: GSA Held Warehouses in Lakewood, Colorado, Pending Historic 
Designation: 

Figure 7: Vacant GSA Warehouse Formerly Used by the National Archives 
and Records Administration, Lakewood, Colorado: 

Figure 8: Excess GSA Warehouses in Curtis Bay, Maryland: 

Figure 9: Vacant GSA Warehouse in Washington, DC: 

Figure 10: Leading Capital-Planning Practices for Using Information to 
Make Capital Investment Decisions: 

Abbreviations: 

DLA: Defense Logistics Agency: 

DOE: Department of Energy: 

GRS: General Records Schedule: 

GSA: General Services Administration: 

FBMS: Financial and Business Management System: 

FIMS: Facilities Information Management System: 

FRPC: Federal Real Property Council: 

FRPP: Federal Real Property Profile: 

NARA: National Archives and Records Administration: 

NPS: National Park Service: 

OGP: Office of Government-wide Policy: 

OMB: Office of Management and Budget: 

PBS: Public Buildings Service: 

USGS: U.S. Geological Survey: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

November 12, 2014: 

The Honorable Bill Shuster: 
Chairman: 
The Honorable Nick J. Rahall, II: 
Ranking Member: 
Committee on Transportation and Infrastructure: 
House of Representatives: 

The Honorable Lou Barletta: 
Chairman The Honorable André Carson: 
Ranking Member: 
Subcommittee on Economic Development, Public Buildings, and Emergency 
Management: 
Committee on Transportation and Infrastructure: 
House of Representatives: 

The Honorable Eleanor Holmes Norton: 
House of Representatives: 

Warehouses are a part of the federal government's vast and diverse 
real property portfolio, which GAO has identified as a high-risk area 
due to the long-standing problems in managing federal real property. 
Federal real property management is on GAO's high risk list due to 
overreliance on leasing, the presence of unneeded and underutilized 
facilities, and security challenges at federal facilities.[Footnote 1] 
In 2013, federal civilian agencies reported that they occupy 
approximately 19,000 warehouses consisting of approximately 90-million 
square feet of space worldwide. 

You asked us to review the management of federal civilian agency 
warehouses. This report examines: (1) available information on the 
characteristics of federal warehouses held or leased by civilian 
agencies in terms of size, location, utilization, and purpose; (2) the 
challenges selected civilian agencies report in acquiring, managing, 
and disposing of warehouse space; and (3) the extent to which GSA has 
fulfilled its federal real property leadership role with respect to 
warehouses. 

To address these objectives, we obtained and analyzed Federal Real 
Property Profile (FRPP) summary data submissions from fiscal year 
2013, the most recent data available for warehouses owned and leased 
by the federal government. We identified three real property-holding 
agencies for our review, the General Services Administration (GSA), 
the Department of Energy (DOE), and the Department of the Interior 
(Interior). We chose GSA, DOE, and Interior because these were the 
three largest agencies in terms of total warehouse square footage of 
all civilian real property agencies that are required to submit data 
for the FRPP, and accounted for over one half of the warehouse square 
footage reported by civilian agencies. 

To determine what is known about federal warehouses, we obtained and 
analyzed real property data from FRPP, DOE's Facilities Information 
Management System (FIMS) and Interior's Financial and Business 
Management System (FBMS) for fiscal year 2013. We also reviewed 
Federal Real Property Council (FRPC) guidance and other documents 
related to the agencies' real property data and the FRPP database. 
According to our conversations with agency officials and our review of 
FRPP, FIMS, and FBMS we believe that the data contained in these 
databases are sufficiently reliable for the purposes of this report. 

To gather detailed examples of warehouse size, location, utilization 
and purpose, we selected a nonprobability sample of owned and leased 
buildings for each agency that were listed as active, inactive, 
utilized, and unutilized, and visited 30 warehouses clustered around 
four cities: Washington, D.C.; Fort Worth, Texas; Denver, Colorado; 
and Livermore, California. This strategy afforded both geographic 
diversity and balance among our selected agencies while also 
accommodating time and resource constraints. 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 
characteristics of warehouses and challenges the officials face in 
acquiring, managing, and disposing of warehouse space. 

To determine the extent to which GSA fulfilled its federal real 
property leadership role with respect to warehouses, we analyzed GSA's 
acquisition, management, and disposition policies and practices and 
compared them with (1) Office of Management and Budget's (OMB) Capital 
Programming Guide[Footnote 2] and (2) GAO's Executive Guide: Leading 
Practices in Capital Decision-Making,[Footnote 3] and we interviewed 
headquarters and regional officials about warehouse acquisition, 
management, and disposal. 

We conducted this performance audit from November 2013 to November 
2014 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. 

Background: 

The federal government's real property portfolio is vast and diverse 
and includes about 400,000 buildings that are located throughout the 
country and are held or leased by different federal agencies, both 
civilian and defense. In addition to warehouses, it includes office 
buildings, courthouses, laboratories, land ports-of-entry, and 
housing, among other assets. To promote efficient and economical use 
of federal government real property, in 2004, the President issued 
Executive Order 13327 establishing the FRPC, which is composed of 
senior federal real property managers and representatives from the 
Office of Management and Budget (OMB) and GSA, among others.[Footnote 
4] The executive order required GSA, in consultation with the FRPC, 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. To meet this requirement, GSA 
established the FRPP and provides guidance to agencies about how to 
annually report real property data under the custody and control of 
executive branch agencies. FRPP data can be used by government 
decision makers, including Congress, OMB, and agencies, to understand 
the nature, use, and the extent of federal real property assets. 

According to FRPC guidance, warehouses are "buildings used for 
storage, such as ammunition storage, covered sheds, and buildings 
primarily used for storage of vehicles or materials." This can include 
a wide range of buildings' types and sizes that are used for both long-
term and temporary storage purposes. For example, the federal 
government owns civilian warehouses (later referred to as warehouse 
space) ranging from large buildings covering hundreds of thousands of 
square feet used to store a wide variety of items, including official 
government records and research equipment to shed-like buildings for 
storage of such things as grounds-keeping equipment. The government 
also leases warehouse space from the private sector. Such space is 
used to store a variety of items including, for example, historical 
artifacts and items left in tribute at the Vietnam War Memorial and 
maintenance items for other federal buildings. 

According to the FRPC, real property assets must be categorized based 
on the predominant or greatest use of the real property asset. 
Buildings used primarily for storage purposes are classified as 
warehouses even though large portions of them may be used for an 
office or research. For example, the federal government owns a 
warehouse in Lakewood, Colorado, which according to FRPP data is 
almost 700,000 square feet; however, according to local officials 
over, 100,000 square feet of the building is actually office space. In 
addition there may be fluctuations across asset classes from year to 
year when buildings' space is reconfigured and reclassified. Further, 
the FRPP data identifies a single using agency for a building based on 
the largest share of occupied space while other agencies may also 
occupy space in the same building. 

Buildings used predominantly as warehouses are one of the two real 
property classes (the other being office space) identified in the 
Freeze the Footprint policy issued by OMB. Specifically, in June 2010, 
the President directed agencies to achieve $3 billion in total real 
property cost savings by the end of fiscal year 2012 through a number 
of measures, including disposing of excess real property and reducing 
leasing through consolidations and increased space utilization. 
[Footnote 5] In May 2012, OMB issued a memorandum directing agencies 
to not increase the size of their civilian real-estate inventory, 
stating that increases in an agency's total square footage of civilian 
property must be offset through consolidation, colocation, or disposal 
of space from the inventory of that agency.[Footnote 6] In March 2013, 
OMB issued a memorandum establishing implementation procedures for the 
Freeze the Footprint policy. This memorandum clarified that agencies 
were not to increase the total square footage of their domestic office 
and warehouse inventory compared to a fiscal year 2012 
baseline.[Footnote 7] 

GSA has key leadership responsibilities related to real property 
management for the federal government. 

* First, GSA acquires, manages, and disposes real property on behalf 
of agencies, a function that is commonly referred to as the landlord 
role. This function is performed by GSA's Public Buildings Service, 
and in doing so, GSA has an inventory of about 9,000 government-owned 
or -leased facilities. GSA is responsible for managing the life cycle 
of federally owned assets, including eventually disposing of such 
properties, and entering into, renewing, and terminating contracts for 
leased properties. 

* Second, in a government-wide policy role, GSA sets real property 
management policy for the federal government as a whole. The Office of 
Government-wide Policy (OGP) is tasked, among other things, to 
identify, evaluate, and promote best practices to improve efficiency 
of management processes. In this policy role, GSA also supports the 
FRPC by providing oversight guidance, publishing performance measures, 
and maintaining the FRPP database. Additionally, the Freeze the 
Footprint policy assigns GSA leadership responsibilities; directing 
GSA to consult with other agencies on promoting full implementation of 
the policy, including how to use technology and space management to 
consolidate, increase occupancy rates in facilities, and eliminate 
lease arrangements that are not cost or space effective. 

We stated in the February 2013 update to the High-Risk Series that 
although some progress had been made, the government continued to lack 
consistent, accurate, and useful data that could support strategic 
decision making about federal real property.[Footnote 8] Internal 
control standards for federal executive-branch agencies require that 
agencies have relevant, reliable, and timely information for decision-
making and external-reporting purposes.[Footnote 9] We have also 
identified concerns with GSA's capital planning, high-value leases, 
and FRPP data quality. Specifically, in 2012 we found that GSA's use 
of information to make capital investment decisions conforms to some 
leading practices identified in GAO's Executive Guide on Leading 
Practices in Capital Decision Making[Footnote 10] and OMB's Capital 
Programming Guide[Footnote 11], but GSA lacks a transparent process 
for prioritizing projects and a comprehensive long-term capital plan 
that fully aligns with leading practices.[Footnote 12] These guides 
also identify leading practices in capital decision making including: 
needs assessment, alternatives evaluation, project prioritization, and 
long-term capital planning. In another 2012 report, we raised concerns 
that the FRPP is not a useful tool for describing the nature, use, and 
extent of excess and underutilized federal real property. For example, 
FRPC had not ensured that key data elements--including buildings' 
utilization, condition, annual operating costs, mission dependency, 
and value--were defined and reported consistently and accurately. 
[Footnote 13] Lastly, in a 2013 report we found that overreliance on 
costly leasing has been a concern, and we found that GSA has not 
systematically prioritized high value leases that would be most 
beneficial to move to federally owned solutions, and it has not 
incorporated space needs that are the highest priority for ownership 
investment into a long-term capital plan.[Footnote 14] As a result of 
these reports, we made several recommendations to address these 
issues, which we discuss later in this report. 

Warehouse Inventory Is Vast and Diverse, but Data in the Federal Real 
Property Database Are Not Consistent or Transparent: 

GSA, Interior, and DOE Hold or Lease Over Half of Civilian Warehouse 
Space Owned or Leased by the Federal Government: 

According to FRPP data, in fiscal year 2013, three agencies held or 
leased most of the civilian warehouse space either owned or leased by 
the federal government: GSA, Interior, and DOE. Of the approximate 90-
million square feet of warehouse space occupied by civilian agencies, 
GSA accounted for about 29-million square feet, Interior for about 15-
million square feet, and DOE for about 11-million square feet. (See 
table 1.) Cumulatively, these three agencies held or leased about 63 
percent of total civilian warehouse space. Interior had the most 
warehouses among civilian agencies by far. 

Table 1: Civilian Agencies' Space Categorized as Warehouse (in 
Descending Order by Square Feet) Based on Federal Real Property 
Profile Fiscal Year 2013 Data: 

Agency: General Services Administration[A]; 
Square feet: 29,293,442; 
Number of warehouses: 600. 

Agency: Interior; 
Square feet: 15,266,082; 
Number of warehouses: 9,644. 

Agency: Energy; 
Square feet: 11,475,630; 
Number of warehouses: 2,205. 

Agency: Veterans Affairs; 
Square feet: 6,491,669; 
Number of warehouses: 884. 

Agency: State; 
Square feet: 4,995,428; 
Number of warehouses: 553. 

Agency: Agriculture; 
Square feet: 4,790,154; 
Number of warehouses: 1,444. 

Agency: Justice; 
Square feet: 4,286,865; 
Number of warehouses: 331. 

Agency: National Aeronautics and Space Administration; 
Square feet: 4,054,944; 
Number of warehouses: 494. 

Agency: Homeland Security; 
Square feet: 3,181,477; 
Number of warehouses: 1,531. 

Agency: Transportation; 
Square feet: 2,512,673; 
Number of warehouses: 810. 

Agency: Labor; 
Square feet: 1,030,231; 
Number of warehouses: 139. 

Agency: Health and Human Services; 
Square feet: 902,358; 
Number of warehouses: 246. 

Agency: Commerce; 
Square feet: 664,675; 
Number of warehouses: 100. 

Agency: National Science Foundation; 
Square feet: 241,730; 
Number of warehouses: 62. 

Agency: State (USAID); 
Square feet: 236,921; 
Number of warehouses: 13. 

Agency: Environmental Protection Agency; 
Square feet: 87,413; 
Number of warehouses: 25. 

Agency: Total; 
Square feet: 89,511,692; 
Number of warehouses: 19,081. 

Source: GAO analysis of fiscal year 2013 Federal Real Property Profile 
data. GAO-15-41. 

Notes: All real property data from the agencies required to submit 
data to the FRPP. 

[A] GSA data includes civilian warehouse space used by GSA as well as 
by other federal agencies based on GSA's fiscal year 2013 FRPP 
submission. 

[End of table] 

Of about 19,000 warehouses held or leased by all civilian agencies, 
the majority--about 18,000 warehouses covering about 68-million square 
feet of warehouse space--were government-owned. In addition, civilian 
agencies leased about 1,000 warehouses covering about 24-million 
square feet of warehouse space. 

Civilian warehouses vary in size, ranging from very small--for 
example, a 16-square foot fire hose shed used by Interior in the 
Shenandoah National Park--to very large storage facilities, such as a 
vast GSA warehouse of about 1 million square feet in Burlington, New 
Jersey. This warehouse serves as a distribution center for GSA's 
Federal Acquisition Service. 

GSA, DOE, and Interior Have Varied Inventories Based on Size and 
Location of Warehouses: 

GSA, Interior, and DOE's inventories of warehouses are made up of 
warehouses of diverse sizes, locations, and purposes. 

GSA-Held or Leased Warehouse Inventory: 

According to the fiscal year 2013 FRPP data, GSA held or leased 600 
warehouses, ranging from 40 to over 1 million square feet. These 
warehouses were occupied by GSA or other federal agencies, as GSA 
provides other agencies with warehouse space from its government-owned 
inventory as well as through leases with private lessors. Civilian 
agencies used over 29 million square feet of GSA-held or leased 
warehouse space, with GSA itself occupying the largest share--7.3 
million square feet. (See figure 1.) 

Figure 1: General Services Administration's Civilian Warehouse Space, 
by Predominant Using Agency and Square Footage (in Million Square 
Feet), Based on Federal Real Property Profile, Fiscal Year 2013 Data: 

[Refer to PDF for image: pie-chart] 

GSA: 25% (7.3 million square feet); 
Archives: 17% (4.9 million square feet); 
Commerce: 10% (3.0 million square feet); 
Homeland Security: 8% (2.3 million square feet); 
Justice: 7% (2.1 million square feet); 
Interior: 6% (1.7 million square feet); 
Treasury: 5% (1.4 million square feet); 
Social Security: 4%; (1.2 million square feet); 
Other agencies[A]: 19% (5.5 million square feet). 

Source: GAO analysis of GSA fiscal year 2013 Federal Real Property 
Profile data. GAO-15-41. 

Note: Percentages may not add to 100 because of rounding. Predominant 
using agency is based on a single agency in a building with the 
largest share of occupied space and may not fully represent other 
agencies' occupancy. 

[A] DOE space acquired through GSA is included in "Other agencies" 
category. 

[End of figure] 

GSA, in its role as the government's landlord, is responsible not only 
for helping federal agencies acquire real property, including 
warehouses, but also for helping agencies to dispose of real property 
in their custody and control. Thus GSA acts as a disposal agent, not 
only for its own inventory, but also for other federal agencies that 
declare their assets excess. As such, in fiscal year 2013, a portion 
of GSA's warehouse inventory--40 warehouses totaling 3.2-million 
square feet--was comprised of excess warehouses that GSA was in the 
process of disposing. Excess warehouses and challenges associated with 
their disposal are discussed in greater detail later in this report. 

Unlike most other agencies, in fiscal year 2013, the GSA-reported 
inventory of warehouse space for civilian agencies consisted 
predominantly of warehouses leased from private lessors: 434 
warehouses covering 15.5-million square feet. The annual rent for 
these warehouses totaled about $170 million. Warehouses leased by GSA 
and challenges associated with them are discussed later in this report. 

According to GSA headquarters officials, the agency does not collect 
data on what is being stored in the warehouses used by GSA and other 
agencies. GSA is not required to collect storage information; however, 
in our discussions with regional officials, they were able to tell us 
how warehouses were being used on a case-by-case basis. For example, 
in addition to excess warehouses in GSA's own inventory, GSA 
warehouses were used for operations and maintenance purposes by the 
agency's field offices as well as for storing and distributing 
supplies in support of federal acquisition functions, among other 
things. Although FRPP data cannot provide information on how other 
agencies use their warehouses, GSA headquarters officials told us that 
the installation-name descriptor in FRPP--indicating warehouses used 
to store federal records, equipment, or as garages or hangars--offers 
some insight. 

Interior-Held or Leased Warehouse Inventory: 

In fiscal year 2013, Interior held or leased about 10,000 warehouses, 
ranging from under 10 to over 400,000 square feet, scattered across 
the country in national parks, wildlife refuges, and urban areas. 
According to Interior officials, its warehouse inventory supports and 
reflects the agency's mission to protect and manage the nation's 
natural resources and cultural heritage. Interior warehouses are 
predominantly government owned. 

According to Interior's FBMS data, most Interior warehouses are used 
for storage of equipment and vehicles as well as shed outbuildings 
where seed and other maintenance supplies are stored. (See figure 2.) 
Additionally, Interior-held or leased warehouses include historic 
buildings, such as at Fort Vancouver, Washington, which are not 
currently utilized for storage purposes, but are categorized as 
warehouses based on the historic functional use that is exhibited for 
the visiting public. 

Figure 2: Examples of Department of the Interior Warehouses Used by 
the National Park Service in Washington, DC, (left) and Fish & 
Wildlife Service in Denver, Colorado, (right): 

[Refer to PDF for image: 2 photographs] 

Source: GAO. GAO-15-41. 

[End of figure] 

Interior has also added to its portfolio of warehouses through its 
occupancy agreements with GSA, and this inventory is reflected in the 
FRPP for GSA-held or leased properties. In fiscal year 2013, through 
GSA, Interior used 107 warehouses, covering about 1.7-million square 
feet. (See figure 1.) Based on our site visits, these warehouses 
support a wide variety of Interior storage needs, including storage 
requiring special-temperature and air-quality conditions. For example, 
U.S. Geological Survey is using portions of a large industrial 
warehouse in Lakewood, Colorado, for fossils, rock core, maps, and 
records storage purposes as well as to store samples of ice core from 
Antarctica and Greenland that require special temperature controls. 
The ice core samples are located inside a separate, smaller storage 
facility within the larger warehouse. The separate facility includes 
two temperature-controlled chambers; one used for ice core storage and 
the other for a work area to cut ice core into smaller samples for 
scientific research. (See figure 3.) 

Figure 3: The National Ice Core Laboratory Building in Lakewood, 
Colorado, (left) Is Used to Store Ice Core Samples (right): 

[Refer to PDF for image: 2 photographs] 

Source: GAO. GAO-15-41. 

[End of figure] 

DOE-Held or Leased Warehouse Inventory: 

In fiscal year 2013, DOE held or leased about 2,200 warehouses, 
ranging from about 10 to almost 400,000 square feet, located primarily 
at DOE sites. DOE's inventory is predominantly government-owned 
warehouses located within the secure perimeters of its sites, such as 
national laboratories and other research and storage facilities. In 
support of DOE's energy research and nuclear safety and security 
mission, a portion of DOE warehouses is used for storage of nuclear as 
well as other materials that require special storage conditions. 
Specifically, based on DOE's FIMS data for fiscal year 2013, out of 
11.5-million square feet of warehouse space, 4.2-million square feet 
were used for storage of nuclear, hazardous, combustible, and other 
materials requiring special storage conditions. Additionally, 6.9-
million square feet of warehouse space were used for general storage 
and programmatic general-storage purposes, which include items such as 
laboratory equipment and research testing materials. The remaining 
approximate 400,000 square feet were used for other storage purposes. 
For example, one DOE site we visited used a warehouse for storage of 
wind-energy-testing equipment, including 50-foot blades for testing 
wind turbines. 

Consistency and Transparency Issues Affect Warehouse Data in the 
Federal Real Property Profile: 

In our previous assessment of the FRPP, we found that the FRPP's data 
can be used in a general sense to track assets--such as their 
location--to provide an overall perspective on agencies' asset 
portfolios (as presented above). However, our previous findings also 
raised concerns about the quality of the FRPP data.[Footnote 15] In 
our 2012 report, we found that agencies were allowed to use their own 
definitions for some FRPP data elements, a practice that undermined 
the quality of the data when amassed in a single database. More 
specifically, we raised concerns that the 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. The FRPC has not followed sound 
data-collection practices, and agencies were able to submit data that 
were inconsistent and therefore not useful as a measure for comparing 
performance inside and outside the federal government. We recommended 
that GSA take specific actions to improve the FRPP data, including 
that all data collection requirements are clearly defined and that 
data reported to the database are consistent from agency to agency. 
GSA developed an action plan for implementing our recommendations. We 
are in the process of determining whether the actions in this plan, if 
fully implemented, will improve FRPP's consistency and reliability. We 
plan to report our results as part of our 2015 high risk update. 

Similarly, in this review, we found inconsistencies in how GSA 
interprets and agencies report certain data elements for its warehouse 
inventory. 

Utilization: We found that agencies inconsistently interpreted FRPP's 
definition of utilization for warehouses making it difficult for 
decision makers to compare utilization data across agencies and 
government-wide. The utilization data element is meant to track the 
extent that an asset is used. Prior to fiscal year 2013, utilization 
was defined as a percentage of occupied space; thus, a space that was 
75 percent occupied and 25 percent vacant had utilization rate of 75 
percent. In fiscal year 2013, the FRPC changed the definition of 
utilization from a percentage value to three options--utilized, 
underutilized, and unutilized,[Footnote 16] consistent with regulatory 
definitions implementing the McKinney-Vento Act.[Footnote 17] FRPC 
guidance specified the change to the data element but not how agencies 
should interpret these definitions or how the percentage values 
agencies previously submitted (and may still track in their internal 
databases) should be translated into the three new utilization 
options. According to GSA headquarters officials, agencies are 
expected to interpret utilization options based on regulatory 
definitions and in relation to their asset portfolios and data 
collection systems. DOE headquarters officials told us that they 
developed their own policy that converts percentage utilization scores 
in FIMS to utilized, underutilized, and unutilized options in the 
FRPP. For example, for fiscal year 2013, all DOE assets with 
utilization score of 40 percent and above are considered utilized; 
scores from 2 to 39 percent reflect underutilized assets; and assets 
that scored 1 percent or lower are considered unutilized. Interior's 
FBMS system had the same three utilization options as the FRPC 
guidance, but also included additional utilization options, such as 
overutilized. 

In addition to other agencies' using this data element inconsistently, 
GSA interprets FRPP utilization definitions in a way that leads to 
GSA's identifying nearly all of its warehouses as utilized. GSA does 
not identify any of its civilian warehouses as underutilized, only 
using two of the three utilization data options--utilized and 
unutilized. Specifically, in fiscal year 2013, of the 600 civilian GSA-
held warehouses, 537 warehouses were identified as utilized, 40 as 
unutilized for warehouses in excess status, and 23 warehouses did not 
have a utilization code because they were listed in disposed status. 

To gain further insights into GSA's warehouse space utilization and 
what space may potentially be vacant and available for federal 
tenants, we examined GSA's monthly vacancy report, which GSA uses to 
track vacant space for lease to agencies. We found that among the 
warehouses listed in the FRPP as utilized, some were vacant for long 
periods of time.[Footnote 18] During our site visits, we identified 3 
GSA warehouses totaling almost 200,000 square feet that have been 
vacant 1, 5, and 10 years and were listed as utilized in the fiscal 
year 2013 FRPP. We also found that GSA's monthly vacancy report does 
not collect information on vacancy duration, and therefore there is no 
way of knowing how many warehouses listed as utilized have long-term 
vacancies. Additionally, the May 2014 vacancy report provided by GSA 
did not include 2 of the warehouses included in our site visits, one 
of which has been vacant since at least 2004 and the other since 2009. 
(See figure 4.) As such, while GSA's interpretation of utilization in 
the FRPP may be explained given its government landlord role, its 
warehouse data in the FRPP--for warehouses GSA uses and those that it 
provides to tenant agencies--could be misinterpreted by decision 
makers, including Congress, OMB, and agencies, to mean that nearly all 
GSA warehouse space is being used for storage. This raises questions 
about the transparency and usefulness of GSA's data and creates 
potential inconsistencies with government-wide data from other 
agencies in the FRPP. 

Figure 4: Vacant GSA Warehouses Identified as Active and Utilized in 
the FRPP: Warehouses in Washington, DC Have Been Vacant since 2009 
(left) and 2004 (right): 

[Refer to PDF for image: 2 photographs] 

Source: GAO. GAO-15-41. 

[End of figure] 

Status: Similarly, GSA used the status data element in such a way that 
nearly all of its warehouses were identified as active. The FRPP 
guidance document for fiscal year 2013 states that the status data 
element reflects the predominant physical/operational status of the 
asset, and active status refers to an asset that is currently needed 
to support the agency's mission or function. There are several options 
in the FRPP to describe status;[Footnote 19] however, GSA interprets 
the FRPP status definition in such a way that the agency is not using 
the inactive option, which, according to the FRPP guidance, refers to 
an asset that is not currently needed to support the agency's mission 
or function but will have a planned need in the future. In the fiscal 
year 2013 FRPP, all GSA warehouses, unless identified as "disposed" or 
"report of excess accepted," meaning that the property is undergoing 
disposal process, were listed as active or currently needed. (For 
example, see figure 4.) 

According to GSA headquarters officials, they interpret the FRPP 
definitions to mean that all assets, including warehouses, are active 
because they may be needed to provide space to federal agencies in 
fulfilling GSA's mission as the government's landlord. According to 
fiscal year 2013 FRPP data, about 90 percent of warehouses in GSA's 
inventory were listed as active. These same warehouses were also 
listed as utilized. However, there is no discernible way to determine 
from the FRPP data whether these warehouses are active and utilized 
beyond GSA's interpretation of these data elements, which, in its 
view, are particular to its mission. The Government Accountability and 
Transparency Board, established in 2011 to provide strategic direction 
for enhancing transparency of federal spending data, determined that 
consistent data promote more accurate and comparable data for improved 
reporting and decision-making.[Footnote 20] However, GSA has not 
clarified its interpretation and practice in the FRPP annual reports 
or its guidance documents, thus decision makers reviewing GSA's FRPP 
data would assume that the vast number of warehouses listed as 
utilized and active are needed and being used, when in fact, some may 
be vacant for extended periods of time or not useful to other 
agencies. Thus, GSA's interpretation of utilization and status data 
elements for its warehouse inventory affects the accuracy and clarity 
of the data, limiting the transparency of warehouse inventory for the 
largest civilian holder of warehouse space and for the government as a 
whole. As a result of GSA's interpretations, Congress and other 
decision makers lack accurate and transparent information that may be 
needed to help the federal government reduce its unused warehouse 
inventory. 

Selected Agencies Report a Wide Range of Challenges in Acquiring, 
Managing, and Disposing of Warehouse Space: 

Challenges Acquiring Warehouse Space: Storage Specifications and 
Funding Constraints Increase Reliance on Leased Space: 

GSA, in its landlord role, is responsible for acquiring warehouses on 
behalf of federal agencies and works with those agencies to identify 
their storage needs. According to GSA regional and headquarters 
officials, an agency's warehouse needs depend largely on what it plans 
on storing at a particular location, and a key challenge is to match 
storage specifications with the available inventory. As such, one of 
the first factors GSA considers as it begins to identify warehouse 
space, is what the tenant agency plans on storing and whether special 
storage conditions are required. GSA regional officials told us that, 
for example, paper products such as official records, require humidity 
controls to prevent moisture from destroying the documents. They noted 
that if these paper records contain secure information, the warehouse 
needs to have security features not required for other warehouses. The 
length of time paper records must be retained is determined by the 
General Records Schedules (GRS), which are issued by the Archivist of 
the United States, and guide disposal of records, common to several or 
all agencies of the federal government.[Footnote 21] GSA regional 
officials also noted that storage of artwork in warehouses requires 
certain climate controls and security features. GSA regional and 
headquarters officials noted that acquiring leased warehouse space 
begins with an assessment of what the agency plans on storing since 
that determines warehouse requirements. The officials told us that GSA 
released internal guidance in May 2014, which is intended, in part, to 
make sure leasing specialists are collecting the appropriate 
information from agencies about their storage needs in order to 
acquire warehouse space at the best deal along with supplying the 
agencies what they need. 

Headquarters officials with GSA, Interior, and DOE told us the 
agencies face challenges acquiring warehouse space through 
construction or purchasing because of funding constraints, and thus 
rely on warehouses already owned by the government or leased from the 
private sector. According to fiscal year 2013 FRPP data, the federal 
government leased about 24million square feet of warehouse space for 
civilian use, a substantial increase from the approximately 19-million 
square feet of leased warehouse space for both civilian and defense 
agencies reported in a 1999 GSA report on government warehouse, 
storage, and distribution functions.[Footnote 22] We have previously 
found that overreliance on costly leasing where ownership would be 
more economical is one reason that federal real property has remained 
on GAO's high risk list. Managing federal real property has been 
designated as high risk since 2003, and in our 2013 High Risk Series: 
An Update, [Footnote 23] we found that the government continues to 
rely heavily on leasing and that the government often leases space 
from private landlords in the same real estate market where it also 
owns underutilized real property. This practice is inefficient, 
resulting in millions of dollars of additional costs to federal 
agencies. 

Additionally, GSA headquarters and regional officials told us that 
some agencies have highly specialized requirements for warehouses and 
thus generally rely on warehouse space acquired from the private 
sector. In some cases, agencies have been leasing warehouse space from 
the private sector for extended periods of time. For example, we 
visited a warehouse GSA has leased from the private sector for 
approximately 25 years and currently uses to store operating equipment 
such as electrical transformers, fire alarms, and tools. This 
warehouse, the lease for which does not expire until 2020, also serves 
as a continuity-of-operations center. We also visited another 
warehouse that has been leased from the private sector for 
approximately 14 years where the National Park Service (NPS) stores a 
variety of artifacts including statues and film negatives requiring 
specialized storage conditions. In these examples, GSA and NPS 
regional officials acknowledged that the agencies' storage needs were 
unlikely to change in the future and that they did not know of any 
plans to determine whether the government should attempt to purchase 
the warehouses or to move to government-owned space.[Footnote 24] 

Challenges Managing Warehouse Space: Aging and Historic Assets, 
Location, and Vacancies: 

Officials at the agencies we reviewed stated that aging 
infrastructure, and issues regarding historic preservation and 
maintenance could result in additional costs and more time needed for 
restoration, repair, or disposal. According to GSA, Interior, and DOE 
officials, some government-owned warehouses were built in the 1940's 
and 1950's and the buildings' conditions have deteriorated, which can 
make them costly to maintain and repair. For example, we visited 
warehouses at one site in Fort Worth, Texas, which, according to GSA 
officials, were used as temporary barracks for German prisoners of war 
during World War II. The officials told us that some of these 
buildings have cracked foundations, holes in the siding, and leaky 
roofs, and coupled with the outdated design,[Footnote 25] this means 
that repairing or updating them could be prohibitively expensive. (See 
figure 5.) At the time of our site visit, the officials were in the 
process of moving the tenant agencies from one of these warehouses to 
other government-owned warehouses nearby. Once the building is vacant, 
GSA plans to demolish the building and lease the foundation to the 
Federal Emergency Management Agency as an area to preposition 
emergency response supplies.[Footnote 26] 

Figure 5: Aging Occupied GSA Warehouse in Ft. Worth, Texas: 

[Refer to PDF for image: 2 photographs] 

Source: GAO. GAO-15-41. 

[End of figure] 

Aging buildings can also mean warehouses no longer meet agencies' 
storage requirements, which can result in agencies vacating for newer 
space. For example, GSA regional officials showed us a warehouse 
previously occupied by the National Archives and Records 
Administration (NARA) to store official government records. According 
to GSA officials, NARA vacated this approximately 150,000 square foot 
building in 2013 because the building's humidity controls and roof 
quality did not meet NARA's requirements for storing government 
records. NARA moved to a privately owned warehouse that could meet the 
agency's requirements. The government-owned building is currently 
vacant, and GSA officials told us they have a potential tenant. GSA is 
considering remodeling and turning the building into office space. 
Given the cost of this potential project, officials estimated the 
building would remain vacant for at least 4 years, while GSA conducts 
feasibility and financial analyses, even if the potential tenant 
agency decides to occupy the space. 

In addition to the costs associated with aging warehouses, agencies 
may also face additional costs dealing with sites that have historic 
or cultural value. The National Historic Preservation Act, as amended, 
requires agencies to establish a preservation program to identify, 
evaluate, and nominate historic federal buildings to the National 
Register of Historic Places, and manage those buildings in a manner 
that considers their historic character.[Footnote 27] Listing on the 
National Register of Historic Places provides a process for reviewing 
federal buildings before federal agencies can demolish or alter the 
buildings in ways that affect their historic character. According to 
Interior and GSA regional officials, historic preservation requires 
specialized materials and trades, and historic properties are 
traditionally more expensive to repair and maintain than modern 
facilities. Additionally, GSA regional officials told us they have 
halted disposals at the Denver Federal Center until a final 
determination has been made regarding designating the area a historic 
site. The officials said that for the two warehouses pictured in 
figure 6, given their deteriorating condition, the most cost-effective 
option for them would be to dispose of the buildings through 
demolition. The brick building pictured in figure 6 below is 
approximately 500 square feet used for record storage; if allowed, 
officials report they will consolidate it into another larger 
warehouse being used at the center. The wood-framed structure pictured 
in figure 6 below is approximately 1,600 square feet and is currently 
vacant. The officials said that these outdated buildings will remain 
in GSA's portfolio until a final determination has been made about 
their historical significance, but in the meantime GSA will continue 
to pay for maintenance and building security fees. 

Figure 6: GSA Held Warehouses in Lakewood, Colorado, Pending Historic 
Designation: 

[Refer to PDF for image: 2 photographs] 

Source: GAO. GAO-15-41. 

[End of figure] 

With regard to location, Interior headquarters officials told us that 
to support the remote location of mission needs, buildings, including 
warehouses, may be remotely located, and that this determines whether 
consolidation is feasible. The officials noted that most field 
stations (where warehouses are located) are in remote and rural areas, 
and are geographically dispersed, which makes colocation and sharing 
of facilities with other federal agencies difficult. The remote 
location of these buildings also leads to increased costs for 
construction, maintenance, repair, and demolition since it costs more 
to transport materials and people to these locations. 

With regard to vacancies, when an agency vacates space because it is 
changing locations or no longer needs the space, GSA becomes 
responsible for the overall cost and maintenance of a vacated space 
until another tenant is identified or, if the warehouse is not 
government owned, the lease is terminated or the lease's term expires. 
As mentioned previously, NARA moved to a privately owned warehouse, 
and now GSA holds a 150,000 square-foot empty warehouse and will be 
responsible for it until it finds a new tenant. The space has been 
vacant for approximately 1 year (see figure 7). At another warehouse 
we visited, a U.S. Geological Survey (USGS) official told us USGS had 
vacated approximately 55,000 square feet of warehouse space in 2013. 
While this vacancy reduces the overall square footage of space held by 
USGS, GSA now holds an additional 55,000 square feet of space that it 
is financially responsible for until it finds a new tenant agency. 
According to GSA regional officials, when a tenant agency vacates 
privately leased space, GSA is also responsible for continuing to pay 
for the space and must decide whether to continue to do so for the 
remainder of the lease or to try and buy out the lease from the 
landlord. 

Figure 7: Vacant GSA Warehouse Formerly Used by the National Archives 
and Records Administration, Lakewood, Colorado: 

[Refer to PDF for image: 2 photographs] 

Source: GAO. GAO-15-41. 

[End of figure] 

GSA produces monthly vacancy reports comprised of all owned and leased 
active buildings, including warehouses where GSA can assign space. 
According to GSA headquarters officials, GSA uses these reports for 
several purposes, including monitoring vacancy, researching the causes 
of vacancies, identifying assets for potential consolidation, and 
prioritizing backfill opportunities.[Footnote 28] This report includes 
information on whether the building is owned by the federal government 
or leased from the private sector, the rentable square footage of the 
building that is not undergoing construction or renovation, and the 
total percentage of the building that is both vacant and available for 
a federal tenant, among other items. Officials told us that there are 
both regional and national vacancy targets. The national combined 
target is around 3 percent, 5 percent for government-owned space, and 
1.5 percent for leased space. Based on the May 2014 vacancy report, 
GSA's combined vacancy rate for warehouses was 7 percent.[Footnote 29] 
GSA headquarters officials stated that they monitor monthly vacancy 
rates, and when they see increasing vacancy trends, they work with 
regional officials to identify and address the cause. 

Challenges Disposing of Warehouse Space: Contamination and 
Environmental Remediation, Location, and Stakeholder Interests: 

Environmental requirements can result in additional costs and more 
time needed for warehouse disposal. Under the National Environmental 
Policy Act, as amended, agencies are required to consider the 
environmental impact of their proposed actions, including the disposal 
of property, and consider alternatives less damaging to the 
environment.[Footnote 30] Landholding agencies are responsible for 
supervising decontamination of excess and surplus real property that 
has been contaminated with hazardous materials of any sort.[Footnote 
31] However, required environmental assessments and remediation of 
excess or surplus property can be expensive and time consuming. For 
example, GSA headquarters officials told us that 40 government-owned 
warehouses remain in excess status because the sites are undergoing 
environmental remediation and are contaminated. These warehouses have 
been listed as excess for at least 7 years and as long as 11 years. 
According to the GSA headquarters officials, these warehouses had all 
been previously held by either the U.S. Army or the Defense Logistics 
Agency (DLA) and had been used to store materials for weapons 
development. The officials said that the Army and DLA vacated these 
properties because the warehouses were obsolete and that in the areas 
where the warehouses are located, there was no demand from other 
federal agencies for the space. When GSA was unable to find new 
tenants for the facilities, GSA began the disposal process. 

Until the cleanup is completed, GSA is responsible for the warehouses, 
and they remain part of GSA's inventory. In such cases, GSA relies on 
original property-holding agencies to complete environmental 
remediation, if necessary, prior to disposal. For example, the Curtis 
Bay Depot consists of 11 primary structures and numerous abandoned 
warehouses (along with other structures and buildings) on 
approximately 435 acres of land and was previously used by DLA as a 
strategic stockpile and munitions storage. (See figure 8.) GSA 
headquarters officials said many of the buildings at the complex are 
in an extremely deteriorated condition and that environmental and 
military munitions contamination is expected to be fully remediated 
sometime in fiscal year 2016. 

Figure 8: Excess GSA Warehouses in Curtis Bay, Maryland: 

[Refer to PDF for image: 2 photographs] 

Source: GAO. GAO-15-41. 

[End of figure] 

Agencies efforts to dispose of potentially contaminated sites add time 
and costs. According to DOE headquarters officials, contamination 
issues affect DOE warehouses since they are often located on or 
adjacent to parcels with a history of contamination. Additionally, 
about 500 warehouses, or 25 percent of the total number of warehouses 
held by the agency, store hazardous materials including radioactive or 
nuclear substances. These officials told us that warehouses used to 
store hazardous materials or located near contaminated sites are 
unlikely to receive their full market value through a sale, and DOE 
typically disposes of them through demolition. Interior headquarters 
and regional officials also told us that environmental remediation was 
a major challenge with disposing of warehouse space since the majority 
of the portfolio was constructed when lead and asbestos were commonly 
used during construction. Due to funding constraints, remediation and 
disposal of old and underutilized assets may be delayed. Both DOE 
regional and Interior headquarters officials told us that in many 
cases the cost of cleanup of old warehouses outweighs the potential 
sale or salvage price. Interior headquarters officials noted that in 
addition to the challenges related to managing historic warehouses, 
Interior faces additional challenges disposing of historic warehouses. 
According to the officials, section 106 of the National Historic 
Preservation Act[Footnote 32], requires agencies to consider the 
effects of their undertakings on historic properties, including 
historic warehouses which are included in or eligible for inclusion in 
the National Register of Historic Places. This process, which involves 
consultation with stakeholders, an assessment of the effects of the 
disposal on the historic property, and possible mitigation, may also 
result in more time needed for warehouse disposal and additional costs. 

Locations of some federal properties can make property disposal and 
reuse costly or undesirable. DOE headquarters officials reported that 
the vast majority of DOE's warehouses are either 1) located within a 
secured perimeter, often on or adjacent to property with a history of 
contamination, or 2) have stored hazardous materials or, in some cases 
both. Officials said there is "rarely if ever" an opportunity to 
dispose of unneeded warehouse space through sale or some other 
conveyance. Instead, DOE typically demolishes unneeded warehouses 
following remediation as funding becomes available. For example, 
officials at Lawrence Livermore National Laboratory told us that one 
warehouse located within the secured perimeter has been listed for 
disposal for 7 years; however, the building is very low on the site's 
priority list for disposal and will likely not be demolished for 
another 20 years because it is considered low risk with no current 
hazards. Given the warehouse's location within the secured perimeter, 
officials said the only disposal option for this site is demolition. 
Likewise, Interior headquarters officials noted that the majority of 
the assets (including warehouses) are located on public lands that 
directly contribute to bureaus' missions and cannot be easily 
divested. Because of this, the officials said there are a limited 
number of Interior's assets eligible for disposal or sale to a private 
organization or individual, and those that are, must undergo 
environmental remediation (as discussed above), and then be demolished 
or salvaged for reuse at another location. The officials also said 
that due to the remote locations and cost of remediation, demolition, 
and salvage, it is rare that the residual value in the materials is 
adequate to attract private interests to perform the removal of the 
asset, or to obtain any monetary benefit to the federal government for 
the assets. 

Stakeholder interests can also result in delays to property disposal 
or reuse. GSA works with partner federal agencies, state and local 
governments, non-profit organizations, business groups, and citizens 
when disposing of owned assets such as warehouses. As such, 
stakeholders can have differing views of what should be done with the 
property. For example, GSA holds a 33,000-square-foot government-owned 
warehouse in Washington, D.C., near the Nationals baseball park, a 
warehouse that has been vacant since 2009. (See figure 9.) The area 
surrounding this warehouse has increased substantially in value as new 
residential and commercial buildings are built. Local stakeholders 
have expressed an interest in this site, including a Washington, DC, 
Advisory Neighborhood Commission, which has proposed using the 
property for an "educational-commercial partnership" to create a new 
institute for culinary business education. As of May 2014, GSA has not 
come to a final determination regarding the future of this warehouse, 
but could presumably benefit from the appreciation of land values in 
this area. 

Figure 9: Vacant GSA Warehouse in Washington, DC: 

[Refer to PDF for image: 2 photographs] 

Source: GAO. GAO-15-41. 

[End of figure] 

The challenges described above are similar to those we have previously 
found in relation to all excess and underutilized real property, not 
solely warehouses.[Footnote 33] GSA could better position itself to 
address these long-standing challenges by following leading practices 
in capital decision making. We have previously found that leading 
practices in capital decision making, which are practices that help 
inform strategic and long-term thinking about capital assets, can help 
address challenges agencies face with regard to their capital asset 
portfolios.[Footnote 34] These practices, and their relevance to GSA's 
role as a leader in managing federal real property, are discussed in 
the next section of this report. 

GSA Has Taken Some Steps to Fulfill Its Leadership Role with Respect 
to Warehouses, but Its Approach Lacks a Strategic Focus: 

As a Government Landlord, GSA Has Taken Steps to Fulfill Its 
Leadership Role in Managing Warehouses: 

As mentioned above, as a landlord, GSA acquires, manages, and disposes 
real property on behalf of agencies. Consistent with GSA's landlord 
role, which is performed primarily by GSA's Public Buildings Service 
(PBS), GSA has taken steps to help reduce agencies' warehouse real 
property footprint and has tried to reduce costs by moving tenants 
from leased warehouses into government-owned space. GSA has done so 
when specific situations and opportunities presented themselves. For 
example, in one region where GSA manages a federal center with 
government-owned warehouses, GSA has been helping agencies move to the 
federal center as their leases with private lessors expire. In one 
such case, officials from Interior's Fish and Wildlife Service 
relocated their storage for ecological services field work and realty 
program from a leased warehouse to two smaller warehouses: one 
government-owned at the federal center and another one elsewhere, 
anticipating about $30,000 in annual savings. GSA has also reduced the 
federal government's warehouse footprint by helping agencies 
consolidate their existing space. For example, GSA officials told us 
they helped a tenant agency reduce its warehouse space from 90,000 
square feet to 60,000 square feet by consolidating space for their 
different divisions rather than each division's having its own space. 

Further, GSA has taken steps to assist agencies in the acquisition of 
warehouse space. For example, in May 2014, GSA's Office of Leasing 
issued internal guidance on leasing warehouses from private lessors 
using a lease model that is specifically designed to accommodate the 
special characteristics of warehouse space. According to this 
guidance, the different characteristics of warehouse space require a 
distinct approach to its procurement, including acquisition strategy, 
evaluation of offers, pricing, and paying for tenant improvements. The 
guidance also provided new flexibility to GSA regional officials to 
seek space and evaluate price by volume rather than strictly by square 
footage area, which would maximize value to the government when 
storage height is a factor. Further, GSA provided guidance on space 
configurations, loading docks, and vehicle accommodation as well as 
calculations for determining space by volume. 

In its role as a landlord and helping agencies to acquire, manage, and 
dispose of real property, GSA is expected to follow capital-planning 
leading practices. Making informed capital investment decisions 
requires full information about an agency's current and long-term 
needs, alternative courses of action, and how potential projects 
compare amongst each other. We identified leading practices for using 
information to make capital investment decisions primarily based on 
GAO's Executive Guide[Footnote 35] and OMB's Capital Programming 
Guide[Footnote 36]. Leading practices in capital decision making 
include: (1) conducting a needs assessment, (2) conducting an 
alternatives evaluation, (3) developing a project prioritization, and 
(4) creating a long-term capital plan. (See figure 10.) 

Figure 10: Leading Capital-Planning Practices for Using Information to 
Make Capital Investment Decisions: 

[Refer to PDF for image: illustrated table] 

Leading practice: Needs assessment; 
Description: A comprehensive needs assessment identifies the resources 
needed to fulfill both immediate requirements and anticipated future 
needs based on the results-oriented goals and objectives that flow 
from the organization's mission. A comprehensive assessment of needs 
considers the capability of existing resources and makes use of an 
accurate and up-to-date inventory of capital assets and facilities, as 
well as current information on asset condition. Using this 
information, an organization can make decisions about where to invest 
in facilities. 

Leading practice: Alternatives evaluation; 
Description: Agencies should determine how best to bridge performance 
gaps by identifying and evaluating alternative approaches. Before 
choosing to purchase or construct a capital asset or facility, leading 
organizations carefully consider a wide range of alternatives, such as 
using existing assets, leasing, or undertaking new construction. 

Leading practice: Project prioritization; 
Description: Leading organizations have processes in which proposed 
capital investments should be compared to one another to create a 
portfolio of major assets ranked in priority order. 

Leading practice: Long-term capital plan; 
Description: The long-term capital plan should be the final and 
principal product resulting from the agency's capital planning 
process. The capital plan should cover 5 years or more and should 
reflect decision makers' priorities for the future. Leading 
organizations update long-term capital plans either annually or 
biennially. Agencies are encouraged to include certain elements in 
their capital plans, including a statement of the agency mission, 
strategic goals and objectives; a description of the agency's planning 
process; baseline assessments and identification of performance gaps; 
and a risk management plan. 

Sources: GAO and OMB. GAO-15-41. 

[End of figure] 

GSA has applied the first two capital planning leading practices--
needs assessment and alternatives evaluation--to help agencies acquire 
warehouses. 

Needs assessment. As described previously, GSA officials told us they 
typically meet agencies' warehouse space needs by identifying storage 
specifications for warehouse contents. GSA regional officials told us 
that when looking to provide warehouse space, GSA works with customer 
agencies to understand their missions and assess their needs. Guided 
by agencies' specific storage needs, GSA works with each agency to 
meet their needs on a case-by-case or asset-by-asset basis. 

Alternatives evaluation. Next, GSA evaluates alternatives by seeking 
out available government-owned warehouse space first, given its lower 
cost to the government and ease of occupancy. If government-owned 
space is not available within the tenant-specified area, GSA considers 
occupying vacant space currently leased from private lessors, and if 
such suitable space is not available, then GSA considers leasing new 
space from a private lessor. GSA regional officials told us that they 
also conduct feasibility studies--to help decision makers evaluate 
project alternatives--when warehouses or other assets are large and 
costly. For example, GSA officials told us that they were embarking on 
a feasibility study for the previously mentioned 150,000-square foot 
warehouse in Lakewood, Colorado, formerly occupied by NARA to 
determine the feasibility of converting it into office space. 

GSA's Approach to Managing Its Warehouses Lacks Priorities and a Long-
term Strategy: 

In its landlord role, GSA has taken steps to apply capital-planning 
practices related to needs assessment and alternatives evaluation; 
however, GSA has done this on an asset-by-asset basis and has not 
prioritized warehouses or developed a long-term plan. GSA has about a 
third of all warehouse space among civilian agencies, totaling about 
29-million square feet. As such, managing warehouses based on 
priorities and identifying steps that benefit tenant agencies and 
taxpayers would better position GSA to fulfill its role as a steward 
of these assets and partner in helping agencies achieve their 
missions. It would also help GSA begin to overcome what are often seen 
as intractable challenges, such as a reliance on costly, long-term 
leasing, or taking action to dispose of aging and obsolete assets. 

Prioritization, for example, could help GSA address obsolete 
warehouses in its inventory. As mentioned above, government-owned 
warehouse space in the GSA inventory is aging and becoming obsolete. 
This trend is likely to push even more warehouses into excess status 
and in need of disposal. GSA could prioritize warehouses to determine 
those in most critical need of an alternative plan, such as disposal. 
This would allow GSA to be proactive in managing its warehouse 
inventory. Furthermore, GSA has relied on leasing to support long-term 
mission needs. We have previously found that building ownership often 
costs less than leasing, especially for long-term space needs. 
[Footnote 37] GSA officials acknowledged that for long-term warehouse 
needs, it would be more economical for the government to own an asset, 
but given current funding constraints, GSA tries to lease warehouse 
space in markets with low rental rates rather than with high rental 
rates, such as New York City or Washington, D.C. By analyzing and 
prioritizing long-term leases for conversion to ownership, GSA could 
be better positioned to make the case for funding that could help 
reduce costs for the government in the long term. In 2013, we 
similarly determined that GSA has not systematically prioritized which 
high-value leases would be most beneficial to move to federally owned 
solutions and recommended that GSA prioritize its high-value leases 
for ownership for its entire real property inventory.[Footnote 38] GSA 
agreed with this recommendation and has taken some steps to address 
it. As with its high-value lease portfolio, GSA has not conducted such 
an analysis or prioritization of its unique and varied warehouse 
inventory, prioritization that could help GSA more efficiently address 
the storage needs of the federal government. 

Long-term capital-planning principles applied to the warehouse portion 
of GSA's portfolio could also help address challenges, as well as help 
GSA and the federal agencies better plan for the future. A long-term 
capital plan encourages agencies to weigh and balance the need to 
maintain existing capital assets against the demand for new assets. By 
thinking long term rather than simply from year to year, an agency can 
make fully informed choices about long-term investment needs and 
maximize its use of available funding over time. Previously, in 2012, 
we found that GSA lacked a comprehensive long-term capital plan and 
recommended that GSA adapt leading practices in capital decision 
making by developing a 5-year capital plan.[Footnote 39] GSA agreed 
with this recommendation, but has not yet developed a 5-year capital 
plan.[Footnote 40] As part of implementing this recommendation, 
assessing the long-term warehouse needs of its tenants would be 
beneficial, given the amount of warehouse space GSA holds and the 
challenges it faces with this portion of its inventory. A focused 
assessment of GSA's total warehouse portfolio could include an 
analysis of GSA and its tenants' needs for storage space by region; 
prioritization of long-term leases for ownership; and a determination 
of a desired combination of owned and leased warehouse inventory, its 
type, and regional makeup, over the long term. 

GSA's Government-Wide Policy Efforts Are Not Focused on Warehouses: 

In addition to capital planning for warehouses as it relates to GSA's 
landlord role, GSA is uniquely positioned to provide leadership on 
warehouse issues given its government-wide policy role, in particular, 
its role to promote best practices to improve efficiency of management 
processes. GSA's Office of Government-wide Policy (OGP) is the primary 
unit that performs such a role. Since the early 1990s, we have 
emphasized that GSA's role was envisioned to be that of a central 
policy agency that provides strategic direction to the federal 
government, not only a service delivery organization helping agencies 
fulfill space needs on an asset-by-asset basis.[Footnote 41] 
Additionally, leveraging the experiences gained in its role as a 
landlord, GSA is positioned to help federal agencies that manage their 
own warehouse space by promoting policy, developing guidance, and 
sharing lessons learned. For example, GSA's internal leasing guidance 
issued in May 2014 could potentially have government-wide application. 
While government-wide warehouse portfolio is vast, only 16 civilian 
agencies hold warehouses for civilian storage needs. In particular, 
agencies that have large warehouse inventories, such as Interior and 
DOE, could benefit from GSA's government landlord experience in 
applying capital planning leading practices to address some of the 
challenges mentioned above. 

To fulfill its government-wide policy role under the Freeze the 
Footprint policy, which calls on GSA to consult other agencies on more 
effective practices and efficient use of space, GSA has identified a 
number of innovative practices for making more efficient use of office 
space, but has not provided similar guidance to other federal agencies 
for efficient use of warehouse space. The Freeze the Footprint policy 
applies to both office and warehouse space. According to GSA 
headquarters officials, they have focused mainly on office space, and 
not warehouses, because real property cost savings mostly come from 
office space. 

A 1999 GSA report on warehouses in the federal government exemplified 
GSA's government-wide leadership role and discussed opportunities for 
greater efficiencies. GSA conducted an extensive review of civilian 
and defense warehouses and issued a report titled Strategic Storage 
Needs of the Federal Government.[Footnote 42] In this report, GSA 
addressed some of the key issues that are still relevant today, such 
as warehouse design and technology, and looked at the issue from a 
government-wide perspective, such as highlighting opportunities for 
space sharing among agencies. The report included technical aspects, 
covering infrastructure attributes such as floor load, roofing, and 
lighting, as well as policy aspects such as personal property and 
supply management. The report also made recommendations, emphasizing 
the nexus between real and personal property as well as the need for 
efficient space utilization. However, GSA officials told us that since 
the report was issued in 1999, they were unable to determine whether 
the report's recommendations had been implemented or had a specific 
impact on any developments in the warehousing area. 

In the last 15 years, the government's practices and business 
processes have advanced, for example, incorporating e-government and 
direct delivery solutions. Further, the overall federal fiscal 
environment has changed, placing resource constraints on federal 
agencies to purchase and store items. In this climate, we believe that 
agencies that hold warehouse space would benefit from a strategic 
approach that not only reflects current fiscal constraints but also 
takes advantage of recent developments in the warehouse area outside 
government. The private warehousing industry has grown more 
sophisticated in recent decades, particularly with the advent of e-
commerce, just-in-time delivery, and supply-chain management. 
According to literature on warehouse management, these developments 
created pressures for more efficient utilization of warehouse space. 
To improve warehouse functions, the industry has identified some 
principles, such as benchmarking warehouse performance and automating 
warehouse functions, as well as leading practices in such areas as 
material handling, inventory control, and warehouse management 
systems. Industry experience with warehousing has also identified ways 
to maximize warehouse space within an existing footprint through such 
methods as warehouse redesign, vertical space utilization, and 
narrower aisle widths and pallet racks, among others. While 
government's overall storage needs may be distinct from the private 
industry, some of these warehousing industry leading practices for 
maximizing space may be applicable to the government. 

GSA headquarters officials told us that the agency has not provided a 
strategy for efficient use of warehouse space because it has been 
primarily focused on office space. Recent developments in the private-
warehousing industry along with current fiscal constraints of the 
federal government create opportunities for GSA to provide a strategy 
for more effective and efficient use of warehouse space government-
wide. For example, as discussed earlier in this report, warehouse 
specifications and special conditions are based on the contents that 
are being stored, thus GSA could identify broad categories of storage 
types (e.g., documents, equipment, historical artifacts) and provide 
guidance on storage specifications, best practices, and efficiencies 
associated with them. Further, a strategy could encourage agencies to 
rethink their overall storage needs, and consolidate and colocate 
(share space), when possible. Ultimately, such an effort could 
contribute to a decrease in the government-wide warehouse footprint 
and--by leveraging GSA's landlord experience and by defining the type 
of leadership GSA could provide to agencies as they asses their 
warehouse portfolios--strategically address some of the challenges 
facing federal agencies. 

Conclusions: 

The federal government's vast and diverse civilian warehouse portfolio 
presents challenges to agencies--including reliance on costly, long-
term leasing and aging and obsolete warehouses--when acquiring, 
managing, and disposing of warehouse space. Accurate and transparent 
information is critical to addressing these challenges and making 
informed capital-asset decisions. GSA manages the FRPP, which was 
created to provide information for promoting efficient and economical 
use of the federal government's real property assets. However, GSA's 
interpretation of its mission to provide space to federal agencies 
results in categorizing nearly all warehouses in its portfolio as 
active and utilized even when they are vacant. As the largest civilian 
holder of government warehouse space, this lack of transparency 
reduces the usefulness not only of GSA's data but also of all 
warehouse portfolio data government-wide. Improved transparency would 
help GSA and others make better informed decisions regarding warehouse 
space. 

In GSA's leadership role as the government's landlord and as a policy-
setting body for real property management, GSA has taken steps to help 
agencies consolidate their warehouse space and reduce their footprint. 
GSA has also followed some leading practices in capital-decision 
making to fulfill agencies' warehouse space needs; however, GSA has 
applied these practices on a case-by-case, asset-by-asset basis. Thus, 
it lacks a strategic approach to prioritize warehouses and make long-
term, informed decisions about government warehouse space. Further, in 
light of GSA's aging warehouse inventory and agencies' modern-day 
storage needs, there is potentially a growing gap between what GSA can 
provide from the government's owned portfolio and what the tenant 
agencies require. Because the agency lacks a comprehensive 5-year 
capital plan, as well as a strategy focused on its warehouse 
portfolio, GSA may have limited ability to address this potentially 
growing gap as well as the above-mentioned challenges facing GSA's 
warehouse portfolio. Such a strategy would enable GSA and tenant 
agencies to prioritize their needs and take a long-term view of the 
warehouse inventory to support better informed decisions. 

Similarly, in its policy role, GSA has developed initiatives and 
models to enhance the efficiency of office space; however, it has not 
done so for warehouses. As agencies work to reduce their footprint, 
this could be an ideal time to develop a strategic approach that would 
capitalize on broader trends, economies of scale, leading practices, 
and private industry experience in the warehouse area. GSA lacks a 
government-wide strategy to promote effective and efficient use of 
government warehouse space, and therefore each agency must address its 
storage needs individually and may miss opportunities for 
consolidation or colocation. Developing and implementing a government-
wide strategy could help the federal government reduce its footprint 
while also addressing some of the challenges facing federal agencies. 

Recommendations for Executive Action: 

To enhance the transparency of the FRPP data and help GSA make more 
informed decisions regarding the planning, effective and efficient 
management, and disposal of civilian warehouse assets, we recommend 
that the Administrator of GSA take the following three actions: 

* In GSA's FRPP documents, GSA should make transparent how its 
mission, which is to provide space to federal agencies, affects the 
reporting of its real property portfolio as it relates to utilization 
and status data elements. 

* In GSA's landlord role, which is performed by the Public Buildings 
Service, and as part of its efforts to address our 2012 recommendation 
to develop and publish a comprehensive 5-year capital plan, GSA should 
develop and implement a strategy specific to warehouses. This strategy 
should apply capital-planning leading practices, involving 
prioritization and long-term planning, to the warehouse portion of 
GSA's portfolio. 

* In its government-wide policy role, which is performed by Office of 
Government-wide Policy, GSA should develop a strategy for its role in 
promoting effective and efficient practices in warehouse management 
across the federal government, including, but not limited to: 
warehouse management guidance that GSA could develop, lessons learned 
that GSA could promote, and the type of leadership that GSA could 
provide to agencies as they assess their warehouse portfolios. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Administrator of GSA and to 
the Secretaries of Energy and the Interior for review and comment. The 
Departments of Energy and the Interior did not have comments. 

GSA provided written comments on the draft, which are reprinted in 
appendix II. GSA agreed with our recommendation that it should make 
transparent in its FRPP documents how its mission affects the 
reporting of its real property portfolio. GSA stated that it 
appreciates that the complexity of the FRPP data may lead to 
misinterpretation, and that it plans to reassess the use of the status 
data-element categories to better address the status of completely 
vacant assets that lack a viable asset strategy or defined customer 
need. 

Regarding our recommendation that GSA should develop and implement a 
strategy specific to warehouses as it develops a comprehensive 5-year 
capital plan, GSA noted several efforts in place to reduce the federal 
footprint. GSA said that it has a portfolio management program that 
takes into consideration the asset, market, and customer components 
for all assets in its inventory and that it also includes a financial 
diagnostic of assets and segmentation of the portfolio into holding 
periods. GSA stated that in order to address the recommendation, GSA 
will continue to analyze and develop strategies for maximizing its 
inventory to increase value. As part of these efforts, a strategy 
specific to warehouses, as described in our recommendation, would help 
GSA make long-term, informed decisions about government warehouse 
space. In addition, such a strategy would enable GSA and tenant 
agencies to prioritize their needs and take a long-term view of the 
warehouse inventory in the support of better informed decisions. 

GSA agreed with our recommendation that it should develop a government-
wide strategy to promote effective and efficient practices in 
warehouse management. GSA said it would address the recommendation by 
developing personal property guidance, researching best practices in 
warehouse and inventory management, and publishing lessons learned and 
guidance. GSA also provided technical clarifications that we 
incorporated as appropriate. 

We are sending copies of this report to the appropriate congressional 
committees, the Director of the Office of Management and Budget, the 
Administrator of General Services, and the Secretaries of Energy and 
the Interior. In addition, the report will be available at no charge 
on GAO's website at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions, please contact me at (202) 
512-2834 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. GAO staff who made key contributions to this 
report are listed in appendix III. 

Signed by: 

David J. Wise: 
Director, Physical Infrastructure Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Our objectives were to examine (1) available information on federal 
warehouses held or leased by civilian agencies in terms of size, 
location, utilization, and purpose; (2) challenges selected civilian 
agencies report in acquiring, managing, and disposing of warehouse 
space; and (3) the extent to which GSA has fulfilled its federal real 
property leadership role with respect to warehouses. We identified 
three real property-holding agencies for our review: the General 
Services Administration (GSA), the Department of the Interior 
(Interior), and the Department of Energy (DOE). We chose GSA, 
Interior, and DOE because these were the three largest agencies in 
terms of total warehouse square footage of all civilian real property 
agencies that are required to submit data for the Federal Real 
Property Profile.[Footnote 43] On the basis of the data available, 
these three agencies accounted for over one-half of the warehouse 
square footage reported by civilian agencies. 

To determine what is known about federal warehouses, we obtained and 
analyzed FRPP data submissions, and real property data from DOE's 
Facilities Information Management System (FIMS) and Interior's 
Financial and Business Management System (FBMS); visited sites where 
the agencies had reported warehouses; reviewed Federal Real Property 
Council guidance and other documents related to the agencies' real 
property data and the FRPP database; and interviewed officials at 
these agencies. We obtained the agencies' real property data 
submissions, which support the FRPP annual reports. To analyze FRPP 
data on warehouses held or leased by civilian agencies, we removed 
defense agencies from government-wide FRPP warehouse data and from GSA 
FRPP data identified as predominant using agencies. According to our 
conversations with agency officials and our review of FRPP, FIMS, and 
FBMS, we believe that the data contained in these databases are 
sufficiently reliable for the purpose of providing basic information 
on the size and location of warehouses. We posed questions to senior 
real property officers at the three agencies about the collecting and 
reporting of real property data and about characteristics of 
warehouses. To gather detailed examples of warehouse size, location, 
utilization, and purpose, we identified warehouses from the agencies' 
FRPP, FIMS, and FBMS submissions and visited 30 warehouses at selected 
sites. We selected a nonprobability sample for each agency of owned 
and leased buildings that were listed as active, inactive, utilized, 
and unutilized. Because this is a nonprobablity 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 characteristics of warehouses. We focused on 
sites clustered around four cities: Washington, D.C.; Fort Worth, 
Texas; Denver, Colorado; and Livermore, California. This strategy 
afforded both geographic diversity and balance among our selected 
agencies while also accommodating time and resource constraints. 

To determine what challenges, if any, selected civilian agencies face 
in acquiring, managing, and dispossessing of warehouse space, we 
interviewed headquarters and regional officials at GSA, Interior, and 
DOE. In addition we conducted the site visits mentioned above in order 
to observe warehouses and challenges agencies' officials had 
identified in acquiring, managing, and disposing of warehouse space. 

To determine the extent to which GSA has fulfilled its federal real 
property leadership role with respect to warehouses, we analyzed GSA's 
acquisition, management, and disposition policies and practices and 
compared them with: (1) Office of Management and Budget's (OMB) 
Capital Programming Guide, and (2) GAO's Executive Guide: Leading 
Practices in Capital Decision-Making (GAO/AIMD-99-32). We interviewed 
headquarters and regional officials about warehouse acquisition, 
management, and disposal. 

We conducted this performance audit from November 2013 to November 
2014 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: Comments from the General Services Administration: 

GSA: 
U.S. General Services Administration: 
The Administrator: 
1800 F Street, NW: 
Washington. DC 20405: 
Telephone: (202) 501-0800: 
Fax: (202) 219-1243: 

October 30, 2014: 

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

Dear Mr. Dodaro: 

This letter provides the General Services Administration's (GSA) 
response to the Government Accountability Office's (GAO) draft report 
entitled, Federal Real Property: Strategic Focus Needed to Help Manage 
Vast and Diverse Warehouse Portfolio (GAO-15-41). In the report, the 
GAO recommends that the GSA Administrator take the following actions: 

1. GSA should make transparent in its FRPP documents how its mission, 
which is to provide space to federal agencies, affects the reporting 
of its real property portfolio as it relates to utilization and status 
data elements. 

2. In GSA's landlord role, which is performed by the Public Buildings 
Service, and as part of its efforts to address our 2012 recommendation 
to develop and publish a comprehensive 5-year capital plan, GSA should 
develop and implement a strategy specific to warehouses. This strategy 
should apply capital planning leading practices involving 
prioritization and long term planning, to the warehouse portion of its 
portfolio. 

3. In its government-wide policy role, which is performed by Office of 
Governmentwide Policy, GSA should develop a strategy for its role in 
promoting effective and efficient practices in warehouse management 
across the Federal Government, including, but not limited t6, 
warehouse management guidance GSA could develop, lessons learned GSA 
could promote, and the type of leadership GSA could provide to 
agencies as they assess their warehouse portfolios. 

GSA agrees with recommendation 1 and will make transparent how our 
mission affects reporting. GSA appreciates that the complexity of our 
Federal Real Property Profile (FRPP) data may lead to 
misinterpretation, and it is important to note that GSA has followed 
the strictest interpretation of the data element definitions provided 
in the Federal Real Property Council 2013 Guidance for Real Property 
Inventory Reporting issued by the GSA Office of Governmentwide Policy. 
As such, GSA has reported assets as either active or excess in concert 
with our mission as a provider of space to partner Federal agencies. 
More specifically, assets in our inventory that are needed to meet the 
space needs of our tenant agencies are labeled as active, and only 
after an asset is determined to be no longer needed to support our 
mission, does the status change to excess. For the fiscal year (FY) 
2014 reporting period, GSA will reassess our use of the status data 
element categories to better address the status of completely vacant 
assets that lack a viable asset strategy or defined customer need. 

Additionally, GSA reports assets as unutilized or underutilized based 
upon the statutory definitions per the McKinney Vento Act. GSA's role 
in the reporting of properties to the Office of Housing and Urban 
Development (HUD) is rather unique in that we are both a landholding 
agency, as well as, the primary disposal agent for real property 
across the Federal Government. Given this dual role, GSA-held 
properties are reported to HUD as they are submitted for disposal, at 
which point they are excess. As a provider of space to other Federal 
agencies, properties held by GSA are sometimes vacant or partially
vacant as tenant agencies' housing needs fluctuate with expansion and 
contraction. As this fluctuation occurs, GSA updates the inventory 
data for these properties in order to assist in fully optimizing the 
asset. Therefore, properties that temporarily contain vacant space as 
a result of fluctuating tenant needs are nonetheless still meeting GSA's
mission needs in that the available space is needed to provide space 
for Federal tenants. 

Consequently, these instances of intermittently unoccupied space are 
not considered to be "unutilized" or "underutilized" and therefore are 
not reported to HUD as such. When assets are determined to no longer 
meet the needs of Federal tenants, they are reported excess to the 
Office of Real Property Utilization and Disposal and reported in the 
FRPP accordingly. In an effort to enhance transparency in the FRPP 
documents, GSA Office of Governmentwide Policy will include a 
statement in the FY 2014 and subsequent FRPP Annual Reports clarifying 
how GSA's mission, which is to provide space to Federal agencies, 
affects the reporting of real property assets as it pertains to
utilization and status data elements. 

In response to recommendation 2, GSA has several strategic efforts in 
place to work proactively to reduce the Federal footprint, including 
strategies to provide agencies with necessary storage requirements 
that utilize less space. GSA has a robust portfolio management program 
that takes into consideration the asset, market, and customer 
components for all the assets in our inventory. It includes a 
financial diagnostic of the assets and segmentation of the portfolio 
into holding periods. To address the recommendation, GSA will continue 
to analyze and develop strategies for maximizing our inventory to 
increase value for partner Federal agencies. 

GSA agrees with recommendation 3 and GSA's Office of Governmentwide 
Policy will promote effective and efficient practices in warehouse 
management by developing personal property guidance, and by 
researching best practices in warehouse and inventory management. Once 
this effort is complete, GSA will publish lessons learned and guidance 
in a Federal Management Regulation bulletin for government-wide
dissemination. In addition, GSA will re-evaluate the 1999 GSA Report, 
Strategic Storage Needs of the Federal Government, to assess if there 
are still relevant findings and recommendations. Finally, GSA will 
continue to work with the Federal Real Property Council and Federal 
agencies to track, monitor, and communicate warehouse space management 
progress in meeting the requirements of the Freeze the Footprint 
policy. 

In addition to these comments, technical comments that update and 
clarify statements in the draft report are enclosed. If you have any 
additional questions or concerns, please do not hesitate to contact me 
at (202) 501-0800, or Ms. Lisa Austin, Associate Administrator, Office 
of Congressional and Intergovernmental Affairs, at (202) 208-1806. 

Sincerely, 

Signed by: 

Dan Tangherlini: 
Administrator: 

Enclosure: 

cc: David Wise, Director, Physical Infrastructure Issues, Government 
Accountability Office: 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

David Wise, (202) 512-2834 or wised@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, David Sausville, Assistant 
Director; Irina Carnevale, Aaron Kaminsky, SaraAnn Moessbauer, Joshua 
Ormond, Amy Rosewarne, and Crystal Wesco made key contributions to 
this report. 

[End of section] 

Footnotes: 

[1] GAO, High Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-13-283] (Washington, D.C.: February 
2013). 

[2] OMB, Capital Programming Guide, Supplement to Office of Management 
and Budget Circular A-11, Part 7: Planning, Budgeting, and Acquisition 
of Capital Assets (June 2006). 

[3] GAO, Executive Guide: Leading Practices in Capital Decision-
Making, [hyperlink, http://www.gao.gov/products/GAO/AIMD-99-32] 
(Washington, D.C.: December 1998). 

[4] Federal Real Property Asset Management, Exec. Order No. 13327, 69 
Fed. Reg. 5897 (Feb. 6, 2004). The executive order applies to 
executive branch agencies listed at 31 U.S.C. §901(b); the Departments 
of Agriculture, Commerce, Defense, Education, Energy, Health and Human 
Services, Homeland Security, Housing and Urban Development, the 
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. 

[5] Presidential Memorandum, Disposing of Unneeded Federal Real Estate-
-Increasing Sales Proceeds, Cutting Operations Costs, and Improving 
Energy Efficiency, 75 Fed. Reg. 33987 (June 16, 2010). 

[6] OMB, Memorandum to the Heads of Executive Departments and 
Agencies: Promoting Efficient Spending to Support Agency Operations 
(May 11, 2012). 

[7] OMB, Management Procedures Memorandum No. 2013-02 (Mar. 14, 2013). 

[8] [hyperlink, http://www.gao.gov/products/GAO-13-283]. 

[9] See, e.g., 31 U.S.C. § 3512 (c), (d); and GAO, Standards for 
Internal Control in the Federal Government, [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.: 
November 1999). 

[10] [hyperlink, http://www.gao.gov/products/GAO/AIMD-99-32]. 

[11] OMB, Capital Programming Guide, Supplement to Office of 
Management and Budget Circular A-11, Part 7: Planning, Budgeting, and 
Acquisition of Capital Assets (June 2006). 

[12] GAO, Federal Buildings Fund: Improved Transparency and Long-term 
Plan Needed to Clarify Capital Funding Priorities, [hyperlink, 
http://www.gao.gov/products/GAO-12-646] (Washington D.C.: July 2012). 

[13] GAO, Federal Real Property: National Strategy and Better Data 
Needed to Improve Management of Excess and Underutilized Property, 
[hyperlink, http://www.gao.gov/products/GAO-12-645] (Washington D.C.: 
June 2012). 

[14] GAO, Federal Real Property: Greater Transparency and Strategic 
Focus Needed for High-Value GSA Leases, [hyperlink, 
http://www.gao.gov/products/GAO-13-744] (Washington D.C.; September 
2013). 

[15] [hyperlink, http://www.gao.gov/products/GAO-12-645]. 

[16] The FRPC guidance refers to the following definitions. Unutilized 
property means an entire property or portion thereof, with or without 
improvements, not occupied for current program purposes for the 
accountable Executive agency or occupied in caretaker status only." 41 
C.F.R. § 102-75.1160; 24 C.F.R. § 581.1. Underutilized means an entire 
property or portion thereof, with or without improvements, which is 
used only at irregular periods or intermittently by the accountable 
landholding agency for current program purposes of that agency, or 
which is used for current program purposes that can be satisfied with 
only a portion of the property." 41 C.F.R. § 102-75.1160; 24 C.F.R. § 
581.1. Utilized means anything that is not defined as unutilized or 
underutilized. 

[17] Pub. L. No. 100-77, 101 Stat. 482 (1987). The Act, as amended, 
requires federal landholding agencies to make available real property 
that they identify as excess, surplus, unutilized or underutilized for 
possible use to assist the homeless. 42 U.S.C. §§ 11301 et seq. See 
also forthcoming GAO report Federal Real Property: More Useful 
Information to Providers Could Improve the Homeless Assistance 
Program, [hyperlink, http://www.gao.gov/products/GAO-14-739] 
(Washington, D.C.: Sept. 30, 2014). 

[18] According to GSA headquarters officials, vacancy and the FRPP 
definition of utilization are not synonymous. 

[19] The following options are available in the FRPP to describe the 
status of the asset: active, inactive, report of excess submitted, 
report of excess accepted, determination to dispose, disposed, and 
cannot currently be disposed. These options represent the complete 
list of options, which applies to government-owned inventory. Fewer 
options from this list apply to leased assets and assets in other 
legal interest categories. 

[20] Government Accountability and Transparency Board, Report and 
Recommendations to the President (December 2011). 

[21] GRS includes records relating to civilian personnel, fiscal 
accounting, procurement, communications, printing, and other common 
functions, and certain nontextual records. They also include records 
relating to temporary commissions, boards, councils and committees. 
These records comprise an estimated one third of the total volume of 
records created by federal agencies. Usually, administrative subject 
files have short retention periods, less than 3 years. Program subject 
files may be needed by the agency for 10 years or more and may have 
archival value as well. 

[22] GSA, Strategic Storage Needs of the Federal Government 
(Washington D.C.: July 1999). 

[23] [hyperlink, http://www.gao.gov/products/GAO-13-283]. 

[24] According to Interior headquarters officials, purchasing a 
warehouse in the current fiscal environment would be very difficult. 
The officials told us that there is an effort across Interior's 
bureaus to coordinate museum program needs and to consolidate 
collections in fewer owned facilities nationwide, when feasible. 

[25] According to the officials, the support beams and low ceilings of 
these warehouses make for an inefficient storage environment. 

[26] According to the officials, once the buildings are demolished, 
they would no longer be considered warehouses in FRPP and would be 
reclassified as structures. 

[27] Pub. L. No. 89-665, 80 Stat. 915 (1966), codified at 16 U.S.C. 
470 §§ et. seq. 

[28] "Backfilling" generally refers to assigning an agency to space 
that has been previously vacated by another agency in either 
government-owned space or leased from the private sector. 

[29] As we mentioned previously, the May 2014 vacancy report provided 
by GSA did not include two warehouses included in our site visits, one 
of which has been vacant since at least 2004 and the other since 2009. 

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

[31] 41 C.F.R. § 102-75.955. 

[32] 16 U.S.C. § 470f. 

[33] [hyperlink, http://www.gao.gov/products/GAO-12-645]. 

[34] [hyperlink, http://www.gao.gov/products/GAO-12-646], [hyperlink, 
http://www.gao.gov/products/GAO-13-744]. 

[35] [hyperlink, http://www.gao.gov/products/GAO/AIMD-99-32]. 

[36] OMB, Capital Programming Guide, Supplement to Office of 
Management and Budget Circular A-11, Part 7: Planning, Budgeting, and 
Acquisition of Capital Assets (June 2006). 

[37] In 1995, we found that 55 of 73 operating leases that GSA had 
entered into cost a total of $700 million more than construction. In 
1999, we reported that for eight of nine major operating lease 
acquisitions GSA had proposed, construction would have saved the 
government $126 million over 30 years. In 2008, we found that for four 
of seven GSA operating leases we analyzed, construction rather than 
leasing would have saved an estimated $83.3 million over 30 years. See 
GAO, Federal Real Property: Strategy Needed to Address Agencies' Long-
standing Reliance on Costly Leasing, [hyperlink, 
http://www.gao.gov/products/GAO-08-197] (Washington, D.C.: Jan. 24, 
2008); General Services Administration: Comparison of Space 
Acquisition Alternatives--Leasing to Lease-Purchase and Leasing to 
Construction, [hyperlink, http://www.gao.gov/products/GAO/GGD-99-49R] 
(Washington, D.C.: Mar. 12, 1999); General Services Administration: 
Opportunities For Cost Savings in the Public Buildings Area, 
[hyperlink, http://www.gao.gov/products/GAO/T-GGD-95-149] (Washington, 
D.C.: July 13, 1995); and General Services Administration: Comparison 
of Space Acquisition Alternatives--Leasing to Lease-Purchase and 
Leasing to Construction, [hyperlink, 
http://www.gao.gov/products/GAO/GGD-99-49R] (Washington, D.C.: Mar. 
12, 1999). 

[38] [hyperlink, http://www.gao.gov/products/GAO-13-744]. 

[39] [hyperlink, http://www.gao.gov/products/GAO-12-646]. 

[40] GSA officials stated that they have not developed a 5-year plan 
due to limited funding. 

[41] GAO, Real Property Management Issues Facing GSA and Congress, 
[hyperlink, http://www.gao.gov/products/GAO/T-GGD-92-4] (Washington, 
D.C.: Oct. 13, 1991). 

[42] GSA, Strategic Storage Needs of the Federal Government 
(Washington D.C.: July 1999) 

[43] Based on the square footage reported in fiscal year 2012 FRPP 
annual report. 

[End of section] 

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