For a third year in a row, federal buildings will receive few of the needed repairs to keep them in more than just working condition.
But cuts due to sequestration aren’t to blame for this one. The General Services Administration, the government’s landlord, doesn’t expect to get any funding for maintenance and repairs in the fiscal 2013 spending bill.
Because of the lack of funding, GSA expects to fall farther behind on the maintenance of federal buildings.
“We have to work off the assumptions that were baked in several years ago about agency rent expectations, about the need for maintenance, and frankly, the last several levels for the organization have really been low in terms of making reinvestments in the properties that we own,” said Dan Tangherlini, the acting GSA administrator, Tuesday before the House Appropriations Subcommittee on Financial Services and General Government. “We just haven’t had a strong repair and alteration program. We’ve really had no construction program other than the Recovery Act program which came in 2009.”
Industry traditionally spends 2-to-4 percent of a facility’s fair-market replacement value on building repairs and maintenance.
Tangherlini said GSA just hasn’t been investing that amount for the last several years, and now it’s a concern. An example of the lack of funding is GSA’s headquarters building located at 18th and F St. in Washington, D.C. GSA remodeled only a portion of the building instead of all of it, and now is moving about 6,000 employees back into a space that previously housed about 3,000.
Tangherlini said investing in repair and maintenance saves money in the long term. He said business benchmarks show $1 of maintenance and repairs replaces the need to make $4-to-$5 of capital investments later on.
“While we are figuring out ways to keep the buildings at some level of operational quality right now, what’s going to happen in three, four, five years down the road is that lack of investment will come back in the form of really dramatic concerns and maybe emergent and exigent concerns — boilers that stop working or roofs that fail,” he said. “This is much like, on a very grand scale, what it’s like to be a homeowner and the fact you need to continually make investments in your home, recognizing if you don’t you will have very expensive episodic step function costs that you will have to come up with.”
Construction also suffering
And it’s not just about repairs and alterations, GSA’s construction budget has been reduced over the last few years too.
This has caused the Homeland Security Department to delay its consolidation at the St. Elizabeth’s campus in Washington, D.C.
Tangherlini said GSA and DHS only have enough money for the Coast Guard to move into new headquarters in the coming year, but nothing more.
“As a result, we are not able to consolidate the dozens of leases DHS has across the National Capital Region. We have DHS suboptimally spread out across the region,” he said. “It’s costing them money in terms of leased costs, but it’s also costing them money in terms of efficiency, the ability to collaborate and maybe the ability, at some level, to be an effective agency because they haven’t been able to come together in one headquarters location.”
Tangherlini said DHS and GSA still are doing preliminary work around design of the office space, and how they will occupy the site once the money comes through. GSA is exploring other options that don’t cost a lot of money as well, including building or real estate exchanges. GSA is trying this concept with the Federal Triangle South and FBI headquarters projects.
Big role to freeze the footprint
Tangherlini said GSA wants to help agencies drive down the costs of federal facilities as part of the Office of Management and Budget’s new “freeze the footprint” policy.
The memo calls for GSA to play a big role in helping the government ensure it doesn’t increase its total square-footage of office space. OMB wants agencies to submit a plan by May 15 on how they will freeze their office space.
The memo also will help GSA improve its database of federal facilities. Tangherlini said the database is self policed by agencies so they can’t be sure how accurate it is.