Obama orders cuts in federal building costs

This could affect thousands of leases.

By Rachel Stevens
Federal News Radio

In an effort to curb government spending, President Obama issued a two-page memo Thursday morning directing federal agencies to identify and eliminate at least $3 billion in excess real estate by the end of fiscal 2012.

The memo states the administration’s “[commitment] to eliminating all forms of government waste and to leading by example as our nation transitions to a clean energy economy.” It also calls surplus properties too expensive and bad for the environment.

Agencies are expected to begin selling off property and canceling leases. More savings may also come from eliminating the operating and maintenance costs of unnecessary buildings. This will accompany the Defense Department’s expected saving of about $9.8 billion between 2010 and 2012 created by its Base Realignment and Closure (BRAC) efforts.

The President says previous efforts to reduce spending on properties produced only minor savings. He says there is a need to “[make] more efficient use of existing assets” through “innovative approaches to space management and alternative workplace arrangements, such as telework.”

The administration estimates agencies own more than 200,000 properties, and more than 65,000 more are considered under used.

Obama identified data centers, office buildings, warehouses, and laboratories as common types of excess properties.

In addition to shedding unneeded properties, agencies also must immediately halt data center expansions. The White House expects “significant” data center reductions within five years.

The Office of Management and Budget (OMB) should receive agency’s plans for achieving these goals by Aug. 30. OMB, with help from the General Services Administration (GSA) and the Federal Real Property Council, will work with each agency, creating guidelines to achieve the president’s goals. The process is expected to take 90 days.

GSA and OMB will file periodic reports with the President regarding their progress.

Rachel Stevens is an intern with Federal News Radio.

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