White House’s governmentwide reorg plan wants to ‘rethink’ federal real estate

Federal real estate is not immune from the White House's new comprehensive governmentwide reorganization plan. The proposals aim to speed up sales process for o...

Echoing earlier promises to reduce inefficiencies and cut spending, the White House released an extensive proposal Thursday, outlining ways it hopes to reorganize the federal government almost across the board.

The Trump administration is hoping to begin talks with Congress about the plan this summer, and, if approved, would see changes to federal agencies reflected in fiscal 2019.

Listed among the reforms is a proposal to rethink the federal government’s approach to acquiring and utilizing real property and shed unneeded facilities. The report described management of federal properties as a “mixed bag of smart space use, underutilized assets, liabilities and leases.”

According to the Federal Real Property Profile Management System (FRPPMS), the federal government had 303,989 total assets in fiscal 2017. The Department of the Interior had the largest number of holdings at 147,645 assets.

The Agriculture Department, with 42,718 assets, and the Homeland Security Department with 29,809 assets, were the next agencies on the list.

“This proposal encompasses moving Federal offices and jobs for better quality of life and a more capable workforce; a new budgetary mechanism for capital projects; better incentives for agencies to divest unnecessary assets; and smarter leasing practices,” the document reads.

Comparing it to the private sector, the report said agencies lack incentives to consider how their missions affect their locations. As such, the proposals include changes to Title 40, which governs the disposal process for unneeded federal properties.

Among the changes would be:

  • Retain net proceeds of sale dedicated to real property use without further appropriation;
  • Expand uses of the General Services Administration Disposal Fund to support agencies with the upfront costs of disposition before making a report of excess;
  • Eliminate of all conveyance provisions and allowing surplus properties to go straight to market.

The proposals aim to build on the Federal Assets Sale Transfer Act of 2016, which established a Public Buildings Reform Board to review agency submissions for disposal and included some efforts to streamline the disposal process.

The FRPPMS contains a database with 40,000 office spaces, warehouses and storage facilities as well as 34,000 parking spaces and leased facilities.

“While FASTA is a substantial step forward — and the enhanced visibility from the board will generate additional interest — the legislation did not tackle the major impediments to accelerating and expanding agency disposals,” the report said.

Regarding specific agency proposals, the Department of Housing and Urban Development plans to continue consolidating four D.C. satellite offices into the agency’s Weaver building, while the Social Security Administration would continue to co-locate offices and use telework, according to the report. The document also said the State Department aimed to reduce its real property footprint but did not give specifics.

In addition, Thursday’s report proposes creating a new mandatory revolving fund — starting with $10 billion in 2019 — for construction and renovations of federally-owned civilian properties. It cited the FBI headquarters debacle as an example of recurring problems with securing funds for new federal facilities.

The report did also mention that GSA would lead an effort to provide agencies with analytics for relocating offices and staff outside of the Washington, D.C. area to save money. But no specific processes or timelines were mentioned.

As for GSA, the report proposed that the agency make two policy changes: executing longer, non-cancelable lease terms for lower rates and a more rigorous cost analysis before making space reductions. According to the report, the agency has a portfolio of 180 million rentable square feet in more than 8,000 separate leases.

“These actions have addressed low-hanging fruit, but many opportunities remain for agencies to improve their decision-making and identify transactions that provide greater value for the government,” the report said.

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