Key Committee Approves Bill Championed by Sen. Carper to Streamline and Reduce Costly Federal Government Property Portfolio

WASHINGTON – Today, the Homeland Security and Governmental Affairs Committee unanimously approved legislation championed by Sen. Tom Carper (D-Del.) that would assist federal agencies in speeding the disposal of unneeded or underused federal property and establish a framework for federal agencies to manage existing space in a more cost-effective manner. The Federal Real Property Asset Management Reform Act of 2012, which is also sponsored by Sen. Rob Portman (R-Ohio), has the potential to generate billions of dollars in sales proceeds and deficit reduction over the next 10 years while helping agencies obtain the resources necessary to keep the buildings they own in better repair. Joining Sens. Carper and Portman as cosponsors of the legislation are Sens. Scott Brown (R-Mass.), Mark Pryor (D-Ark.), Tom Coburn (R-Okla.), Mark Begich (D-Alaska), Claire McCaskill (D-MO), and Susan Collins (R-ME).

“When it comes to federal property management, it’s clear to me and others that we can get better results and save money,” said Sen. Carper. “Federal taxpayers are paying to maintain and secure an overwhelming number of unneeded or underutilized facilities held by federal agencies. With concerns over the implications of our deficit and national debt mounting, eliminating waste and achieving cost savings in this area must be a top priority. By disposing of unneeded buildings, reducing maintenance costs, and consolidating space where appropriate, we can save taxpayer dollars and make government work better for everyone. Fortunately, both Congress and the Obama Administration are united in their commitment to address the issue. I look forward to working with my colleagues to bring this important bill to the Senate floor.”

The federal government owns over one million buildings and structures across the county, making it the largest property owner in the United States. Every year since January 2003, the Government Accountability Office (GAO) has placed real property management on its list of “high risk” government activities, citing long-standing problems with excess and underutilized property; deteriorating and aging facilities; unreliable property data; and a heavy reliance on costly leasing instead of ownership to meet new needs. In fiscal year 2010, 24 federal agencies reported that they possessed more than 78,000 vacant and underutilized buildings that cost more than $1.6 billion annually to operate.

The Obama Administration has made it a goal to save $8 billion in federal real estate costs by consolidating or selling excess and unneeded properties by the end of 2012. In May, the Office of Management and Budget announced over $5.6 billion in federal real estate savings has been achieved, keeping the government on track to reach – and even exceed – that goal. The Federal Real Property Asset Management Reform Act would implement further measures to help the Administration realize those savings and reduce its real estate portfolio.

Specifically, the Federal Real Property Asset Management Reform Act of 2012 would:

• Speed the process for selling surplus federal property. The bill creates an expedited process for sale of properties identified by OMB as underutilized, including easing several regulatory obstacles that have slowed property sales. Buildings and other real estate identified as underutilized would be required to be sold, made available for sale, or otherwise disposed of within 2 years. To ensure accountability, the bill freezes the ability of agencies to acquire or lease new space if they fail to make underutilized properties available for sale. It also directs OMB to produce an annual scorecard tracking each agency’s progress toward its property savings goals.
• Dedicate property sale proceeds to deficit reduction. At least 80 percent of net proceeds from property sales would be deposited in the Treasury for the purpose of deficit reduction, and not more than 18 percent would be allocated to federal agencies for property management and disposal activities
• Permanently establish a property management leadership structure within agencies and at OMB. This structure is based on an executive order issued by President Bush in 2004. It involves the formal creation of a Federal Real Property Council to guide government-wide property management policies and the clarification of OMB, GSA, and other agencies’ roles in property management issues. Having a centralized decision-making body in place will better equip agencies to make decisions about property planning, acquisition, use, maintenance, and disposal.
• Mandate that the Federal Real Property Council set a government-wide surplus property reduction goal, with each agency developing an agency-specific plan for disposing of unneeded property and making use of existing property before obtaining new property. The bill would also require the Council to establish performance measures to determine the effectiveness of federal real property management. The performance measures should enable Congress and heads of federal agencies to track progress and also hold top managers accountable for achieving goals.
• Begin the process of evaluating and potentially ending costly leases by requiring agencies to consult with the General Services Administration (GSA) prior to entering into high valued leasing arrangements. In an effort to increase oversight and facilitate compliance with applicable laws and regulations governing the acquisition of leases, the bill would prevent agencies with independent leasing authority from procuring above threshold leases without consulting with GSA prior to executing the transaction.
• Address the needs of the homeless and state and local governments. The bill authorizes the Department of Housing and Urban Development (HUD) to make grants to nonprofit entities for the purchase of real property suitable to assist the homeless, using as much as 2% of the proceeds from certain property sales. The HUD Secretary is directed to give preference to nonprofit entities in the areas in which real property is being sold through the pilot program.