	The Rural Development Act and Other Federal Location Policies

When considering areas in which to locate, RDA directs the heads of all  executive departments and agencies of the government to establish and  maintain departmental policies and procedures giving first priority to the  location of new offices and other facilities in rural areas. Agencies Generally Locate in Urban Areas and Lack Policies and Procedures for Considering RDA

In 1990, we reviewed whether federal agencies give rural areas first  priority in location decisions as required by RDA and whether any changes  in federal location policies were warranted. We reported that RDA had not  been an important factor in federal facility location decisions. We  concluded that there were multiple laws and regulations guiding federal  agencies in selecting facility locations, but they do not always provide for  consideration of the best financial interest of the government as a factor in  the decision-making process. The percentage of  federal employees located in nonmetropolitan statistical areas in 2000  remained virtually unchanged from 1989, at about 12 percent. Agencies said they selected urban areas primarily because of the  need to be near agency clients and related government and private sector  facilities to accomplish their missions. The agencies that selected rural  areas said they did so because of lower real estate costs. For rural areas, barriers  included the lack of public transportation, location far from other agency  facilities, and insufficient infrastructure for high-speed  telecommunications. The functions  that were located predominantly in rural areas in that period were  research and development, supply and storage, automated data  processing, and finance and accounting. These actions responded to all of our July 2001 recommendations with the  exception of one. However, the departments said that in spite of not having  written policies or procedures, they had located many of their facilities in  rural areas. The IG reported that of the 270 locations established in the  last 5 years, 197 (73 percent) were located in rural areas. The Justice IG cited the GSA  regulation requiring agencies to give first priority to the location of new  offices and other facilities in rural areas. Attorneys Offices  and the U.S. The Bureau of Prisons is located in rural  areas to decrease land costs and increase security. Federal Telework Efforts are Improving but Limited

Telework could be used to allow federal workers who live in rural areas to  work in or near their homes, at least on a part-time basis. For over a  decade, telework, also called telecommuting or flexiplace, has gained  popularity because it offers the potential to benefit employers, including  the federal government, by reducing traffic congestion and pollution,  improving the recruitment and retention of employees, increasing  productivity, and reducing the need for office space. Congress has enacted legislation that has promoted the use of telework in  several ways, including authorizing GSA telework centers, requiring each  agency to consider using alternate workplace arrangements when  considering whether to acquire space for use by employees, requiring each  agency to establish a policy under which eligible employees may  participate in telecommuting to the maximum extent possible, and  encouraging the deployment of high-speed Internet access in rural areas. In July 2003 we reported on the federal government’s progress in  implementing telework programs. We recommended that OPM and  GSA improve the coordination of their efforts to provide federal agencies  with enhanced support and guidance related to telework and to assist  agencies in implementing 25 key practices we identified. Nevertheless, technological issues, such  as not being able to access to high-speed Internet connections, could have  a detrimental effect on the ability of some federal workers in rural areas to  take advantage of telework. In August 2000, FCC concluded that advanced telecommunications  capability was being deployed in a reasonable and timely fashion overall,  although rural, minority, low-income, inner city, tribal, and U.S. territory  consumers were particularly vulnerable to not receiving service in a timely  fashion. According  to CRS, about 85 percent of households have access to broadband.
Why GAO Did This Study

The location of an organization's facilities has far reaching and long-lasting impacts on its operational costs and ability to attract and retain workers. The Rural Development Act of 1972 has required federal agencies to give first priority to locating new offices and other facilities in rural areas. Rural areas generally have lower real estate and labor costs, but agency missions often require locations in urban areas. Telework, also called telecommunicating or flexiplace, is a tool that allows employees to work at home or another work location other than a traditional office. Benefits of telework include reducing traffic congestion, improving the recruitment and retention of workers, and reducing the need for office space. Telework could allow federal workers who live in rural areas to work in or near their homes, at least some of the time. This testimony summarizes and updates work GAO has previously done on the progress in and barriers to the federal government's efforts to locate its operations and workers, when possible, in rural areas.

What GAO Found

Even though federal agencies have been required since 1972 to develop policies and procedures to give priority to locating new offices and other facilities in rural areas, this requirement has not been an important factor in location decisions. In September 1990 we reported that there were multiple laws and regulations to guide federal agencies in selecting facility locations, but they did not always provide for consideration of the best financial interest of the government as a factor in the decision-making process. In July 2001 we reported that many agencies had not issued policies and procedures to give rural areas priority when considering the location of new facilities. Only about 12 percent of federal workers were located in nonmetropolitan statistical areas, a percentage that remained unchanged from 1989 to 2000. Agencies said the need to be near clients, primarily in urban areas, dictated the location of most operations in urban areas. In spite of not having policies to give priority to rural areas, agencies sometimes locate their operations in rural areas to serve clients in those areas. Also, some functions, such as research and development, supply and storage, automated data processing, and finance and accounting, can be located in rural areas. Rural areas can offer lower real estate costs, improved security, reduced parking and traffic congestion problems, and better access to major transportation arteries. Potential barriers to locating in rural areas include the lack of public transportation, lack of available labor, location far from some other agency facilities, and sometimes insufficient infrastructure for high-speed telecommunications. In our July 2001 report, we made several recommendations to the General Services Administration and Congress to improve location decisionmaking. Congress and the General Services Administration subsequently took action to stress the requirements of the Rural Development Act. Congress has promoted telework in several ways, including authorizing of telework centers in the Washington, D.C., area, requiring agencies to establish a policy under which employees may participate in telecommuting to the maximum extent possible, and encouraging the development of high-speed Internet access in rural areas. However, only about 5 percent of the federal workforce is currently teleworking. In our July 2003 report, we recommended that the General Services Administration and the Office of Personnel Management improve their coordination and provide agencies with more consistent guidance on telework and assist agencies in implementing key practices we identified. The agencies generally agreed with our recommendations and committed to implement them. In addition, the Congressional Research Service reported in July 2003 that about 85 percent of U.S. households have broadband access, although rural, minority, low-income, inner city, tribal, and U.S. territory consumers are particularly vulnerable to not receiving this service. Technological barriers, such as the lack of access to high-speed Internet connections, could have a detrimental effect on the ability of some federal workers in rural areas to take advantage of telework.