Generally, the purpose of prior BRAC  rounds was to generate savings to apply to other priorities, reduce  property deemed excess to needs, and realign DOD’s workload and  workforce to achieve efficiencies in property management. Underlying Obstacles Have Impeded the Government’s Ability to Dispose of Unneeded Property and Reduce Overreliance on Costly Leasing

When we designated federal real property management as high risk, we  reported that the federal government faced a number of obstacles to  effectively managing its real property. These included a lack of strategic  focus on real property issues, a lack of reliable real property data, legal  limitations, and stakeholder influences in real property decision making. Lack of Strategic Focus on Real Property Issues

In 2003, we reported that despite the magnitude and complexity of real- property-related problems, there had been no governmentwide strategic  focus on real property issues. Currently, before GSA can dispose  of a property that a federal agency no longer needs, it is required to offer  the property to other federal agencies. Further complicating this issue is that different  agencies have different authorities to enter into leases with public and  private entities for the use of federal property, to sell real property, and to  retain the proceeds from these transactions. The interests of these multiple and often competing  stakeholders may not always align with the most efficient use of  government resources and can complicate real property decisions. The Government Has Adopted a More Strategic Focus to Improve Real Property Management and Has Taken Steps to Increase Data Reliability, but Other Obstacles Remain

The administration and real-property-holding agencies have made progress  in a number of areas since we designated federal real property as high risk  in 2003. Specifically, the federal government has taken steps toward  strategically managing its real property and improving the reliability of its  real property data. However, many problems related to unneeded property  and leasing persist because the government has not addressed the  underlying legal limitations and stakeholder influences which we  identified. As part of the government’s efforts to strategically manage its real  property, the administration established FRPC—a group composed of the  OMB Controller and the senior real property officers of landholding  agencies—to support real property reform efforts. In 2007, we recommended that OMB, which is responsible for reviewing  agencies’ progress on federal real property management, assist agencies  by developing an action plan to address the key problems associated with  decisions related to unneeded real property, including stakeholder  influences. However, the administration’s recently proposed legislative  framework, CPRA, is somewhat responsive to this recommendation in that  it addresses both legal limitations and stakeholder influences in real  property decision making. To address stakeholder influences, CPRA would create  an independent board to recommend federal properties for disposal or  consolidation after receiving recommendations from civilian landholding  agencies. Key Elements That Underpin the Process for Closing or Realigning DOD Installations May Be Applicable to Managing Civilian Real Property

In our prior work on the BRAC process, we identified certain key elements  underpinning the process, which may be applicable to the management of  real property governmentwide. The BRAC process was designed to  address certain challenges to closures or realignments, including  stakeholder interests, thereby permitting DOD to dispose of installations  or realign its missions to better use its facilities and generate savings. Key Elements That DOD Used to Develop Its 2005 BRAC Recommendations Could Be Considered in a Civilian Real Property Closure or Realignment Process

In developing its recommendations for the BRAC Commission, DOD relied  on certain elements, as follows:  Establish goals for the BRAC process. Develop criteria for evaluating closures and realignments. Estimate costs and savings to implement closure and realignment  recommendations. Establish a common analytical framework. Establish an organizational structure. Involve the audit community to better ensure data accuracy.
Why GAO Did This Study

The federal government holds more than 45,000 underutilized properties that cost nearly $1.7 billion annually to operate, yet significant obstacles impede efforts to close, consolidate, or find other uses for them. In January 2003, GAO designated federal real property management as a high-risk area, in part because of the number and cost of these properties. The Office of Management and Budget (OMB) is responsible for reviewing federal agencies' progress in real property management. In 2007, GAO recommended that OMB assist agencies by developing an action plan to address key obstacles associated with decisions related to unneeded real property, including stakeholder influence. The President's fiscal year 2012 budget proposed establishing a legislative framework for disposing of and consolidating civilian real property, referred to as a Civilian Property Realignment Act (CPRA), which may be designed to address stakeholder influences in real property decision making. This testimony identifies (1) obstacles to effectively managing federal real property, (2) actions designed to overcome those obstacles, including government actions and CPRA, and (3) key elements of the Department of Defense's (DOD) base realignment and closure (BRAC) process that are designed to help DOD close or realign installations and may be relevant for CPRA. To do this work, GAO reviewed GAO reports, other reports, and CPRA.

What GAO Found

In designating federal real property management as a high-risk issue in 2003, GAO found that the federal government faced a number of obstacles to effectively managing its real property. These included its lack of strategic focus on real property issues, a lack of reliable real property data, legal limitations, and stakeholder influence. That year, GAO reported that despite the magnitude and complexity of real-property-related problems, there was no governmentwide strategic focus on real property issues and that governmentwide data were unreliable and outdated. GAO also reported then that before disposing of excess property, the General Services Administration is legally required to follow a lengthy screening process, which includes offering the property to other federal agencies and other entities for public uses. Furthermore, stakeholders--including local governments, private real estate interests, and advocacy groups--may have different interests that do not always align with the most efficient use of government resources. Since 2003, the federal government has taken steps to address some of these obstacles and improve its real property management. For instance, the administration and real-property-holding agencies have improved their strategic management of real property by establishing an interagency Federal Real Property Council designed to enhance real property planning processes. The government has also implemented controls to improve the reliability of federal real property data. However, many problems related to unneeded property and leasing have persisted because legal limitations and stakeholder influences remain. GAO's 2007 recommendation that OMB develop an action plan is designed to address these problems. In addition, CPRA proposes an independent board to identify facilities for disposal and consolidation, which could streamline legal requirements and mitigate stakeholder influences. Congress authorized DOD to undergo five BRAC rounds to reduce excess property and realign DOD's workload to achieve efficiencies and savings in property management. The BRAC process, much like CPRA, was designed to address obstacles to closures or realignments, thus permitting DOD to close installations or realign its missions to better use its facilities and generate savings. GAO's prior work on the BRAC process identified certain key elements that may be applicable to managing civilian real property, such as establishing goals and an organizational structure, developing criteria and an analytical framework, using a model to estimate costs and savings, and involving the audit community to better ensure data accuracy. A key similarity between BRAC and CPRA is that both establish an independent board that reviews agency recommendations; a key difference is that the BRAC process created criteria for selecting installations for realignment while CPRA does not include specific criteria to be used to select properties for disposal or consolidation.