Updated: GSA management over OPM building would cost the agency millions, IG says

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A financially-strapped Office of Personnel Management would incur millions of dollars more in rent and contract fees if the General Services Administration had moved forward with its original plans to take over the management of OPM’s headquarters building in Washington, D.C.

That warning came from OPM’s inspector general, who issued stark words of caution in an “alert” to agency management earlier this week.

As Federal News Network reported earlier this year, GSA told OPM last July it planned to revoke the agency’s existing delegation for the operations and maintenance of the Theodore Roosevelt Building  (TRB) in Washington.

OPM has operated and maintained the TRB for more than 30 years, according to the agency’s IG.

“It is vital that OPM pursue the return of the delegation to operate and maintain the TRB from GSA,” Norbert Vint, the deputy inspector general performing the duties of OPM’s IG, said. “A preliminary analysis completed by OPM shows that allowing GSA to resume operation and maintenance of the TRB would increase OPM’s rent costs by approximately $4.2 million annually.”

And since OPM’s current operation and maintenance contracts would no longer be needed under GSA’s management, OPM could also incur an additional $10.2 million in termination fees, the IG said.

“Continuing to pursue the return of operation and maintenance of the TRB to GSA, without a complete understanding of the costs associated with such a move, is fiscally irresponsible and places an additional burden on a financially strapped agency as well as the American taxpayer,” Vint said.

The delegation of authority for the TRB was rescinded at the request of then-acting OPM Director Margaret Weichert, GSA told Federal News Network.

In making her case for the merger, Weichert said she saw an opportunity for GSA to take over the management of the OPM building as a way to reduce financial burdens on the agency, which suffered a $70 million funding shortfall with the loss the security clearance business. Facility management isn’t part of OPM’s core mission either, she argued.

The agency was initially scheduled to take over management of OPM headquarters starting this October, GSA had said.

But in its response to Vint’s management alert and his subsequent recommendations, the plan appears to have changed.

GSA agreed earlier this summer to allow OPM to continue the operation and management of the TRB, OPM said. Its current delegation of authority will remain in place until Sept. 30, 2021.

“OPM intends to use this time to work with GSA to gather the information necessary to maximize the cost effectiveness of OPM’s space allocation,” the agency said in response to its inspector general.

Still, the IG sees problems with this approach, citing the National Academy of Public Administration’s ongoing, congressionally mandated study on OPM, its statutory authorities and its future.

NAPA is expected to finish its study and recommendations for OPM some time in March 2021. OPM then has six months to respond and offer up its own ideas on the best path forward for the agency.

“Even then a determination of the path forward is not completely known as Congress needs to review and make its decision on any potential legislation,” Vint said of the NAPA study. “The timelines of the NAPA study, OPM’s review and report, and the transition of the operation and maintenance of the TRB back to GSA all collide in the latter half of fiscal 2021. This will pull OPM’s limited resources in many directions and leaves little time to adequately assess the costs and impact on OPM. The delegation to operate and maintain the TRB should remain with OPM until the path forward and the needs of OPM are clear and the costs and impact of changes can be adequately determined.”

OPM’s authority for Federal Executive Institute, revoked and then returned

At one point, plans were in the works for GSA to take over the operation and maintenance of the Federal Executive Institute (FEI), an OPM residential facility in Charlottesville, Virginia.

Senior executives who attend classes and training courses at the FEI spend weeks at a time at there, but GSA has no experience operating or maintaining a residential facility, the OPM IG said. The Federal Executive Institute is operational  24/7, 340 days a year.

GSA spent the better half of 2019 procuring maintenance and operation services for the FEI, the IG said. Those services were based on the Charlottesville facility being open 10 hours a day, five days a week — a lower standard than current FEI hours of operation.

“GSA purported that the total cost, including the cost to provide services above GSA’s standard level, would not exceed OPM’s current operational expense,” the IG said. “However, a sufficient comprehensive analysis of the costs to operate and maintain the FEI was not provided to support GSA’s claim that the cost would not increase. In fact, OPM estimated that the cost would increase approximately $400,000 per year for the level of operation and maintenance service equivalent to what is currently provided.”

GSA asked OPM in January if wanted the delegation of authority to maintain the FEI back. OPM agreed, and the agency received the authority back in July.

Still, the exercise of revoking OPM’s authority to operate the FEI and then taking it back was a waste of time and resources, the IG said.

“Nearly a year’s worth of time and resources were spent, by both OPM and GSA, and a realized increase in cost for diminished security services occurred because a proper analysis of the costs and the impact of the changes was not completed.”

On one hand, revoking of OPM’s delegation of authority over its buildings isn’t especially new or groundbreaking.

The GSA administrator has statutory authority to both operate and maintain government buildings like the TRB or delegate those responsibilities to occupant agencies.

And with the transfer of the National Background Investigations Bureau from OPM to the Pentagon’s Defense Counterintelligence and Security Agency (DCSA) last fall, the Theodore Roosevelt Building is now technically multi-tenant space.

DCSA still has offices within the OPM building, and “GSA rarely allows the operation and maintenance of multi-tenant buildings to be delegated,” the agency told Federal News Network back in February.

Yet according to its IG, OPM still occupies more than 90% of the space within the TRB.

Critics of the OPM building changes have said the proposed moves are yet another sign of the Trump administration’s persistence in pursuing the GSA merger — despite provisions in the 2020 National Defense Authorization Act that explicitly prohibit the transfer of any OPM functions to other agencies.

The House included a similar prohibition in its version of a 2021 appropriations package.

Vint suggested OPM and GSA delay a feasibility study for the TRB moves altogether until NAPA completed its study and Congress took appropriate action.

OPM, however, disagreed. A feasibility study, as well as the NAPA report, would “support a space needs decision that is in the best interest of OPM and the taxpayers,” the agency said.

“The premise that activities and staff would be consolidated into GSA is in direct conflict with the limitations to the proposed merger set forth in the fiscal 2020 NDAA,” the IG said. “It is also unclear whether the objectives of the feasibility study have been updated to reflect the current environment, including what adaptations to office space will need to be made in light of COVID-19.”

Gerry Connolly (D-Va.), chairman of the House Oversight and Reform Subcommittee on Government Operations, took the criticism a step further.

“This administration continues its discredited attempts to attack the beating heart of our federal government — the agency that serves our dedicated federal employees—at a potential cost to American taxpayers of more than $14 million,” he said.  “Leaders at the Office of Management and Budget, GSA and OPM once again failed to consider how their actions would affect their agencies, the federal workforce, the government, and the taxpayers.”

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