The Federal Government Has Many Assets it Does Not Need

Despite significant changes in the size and mission needs of the federal  government in recent years, the federal portfolio of real property assets in  many ways still largely reflects the business model and technological  environment of the 1950s and faces serious security challenges. The state of  deterioration is alarming because of the magnitude of the repair backlog—  current estimates show that tens of billions of dollars will be needed to  restore these assets and make them fully functional. These factors include competing  stakeholder interests in real property decisions; various legal and budget- related disincentives to businesslike outcomes; the need for improved  capital planning; and the lack of a strategic, governmentwide focus on  federal real property issues. Resolving the long-standing problems will require high-level  attention and effective leadership by Congress and the administration and  a governmentwide, strategic focus on real property issues. Real property problems related  to unneeded property and the need for realignment, deteriorating  conditions, unreliable data, costly space, and security concerns have  multibillion-dollar cost implications and can seriously jeopardize mission  accomplishment. Because of the breadth and complexity of the issues  involved, the long-standing nature of the problems, and the intense debate  about potential solutions that will likely ensue, current structures and  processes may not be adequate to address the problems. Given this, we  concluded in our high-risk report that a comprehensive and integrated  transformation strategy for federal real property is needed, and an  independent commission or governmentwide task force may be needed to  develop this strategy. Such a strategy, based on input from agencies, the  private sector, and other interested groups, could comprehensively  address these long-standing problems with specific proposals on how best  to realign the federal infrastructure and dispose of unneeded property, taking  into account mission requirements, changes in technology, security needs,  costs, and how the government conducts business in the 21st century; address the significant repair and restoration needs of the federal ensure that reliable governmentwide and agency-specific real property  data—both financial and program related—are available for informed  decisionmaking;  resolve the problem of heavy reliance on costly leasing; and consider the impact that the threat of terrorism will have on real property  needs and challenges, including how to balance public access with safety. Congress and the administration could work together to develop  and enact reform legislation to give real property-holding agencies the  tools they need to achieve better outcomes, foster a more businesslike real  property environment, and provide for greater accountability for real  property stewardship.
Why GAO Did This Study

The federal government faces longstanding problems with excess and underutilized real property, deteriorating facilities, unreliable real property data, and costly space. These problems have multibillion-dollar cost implications and can seriously jeopardize agencies' missions. In addition, federal agencies face many challenges securing real property due to the threat of terrorism. This testimony discusses long-standing, complex problems in the federal real property area and what actions are needed to address them.

What GAO Found

Government data show that over 30 agencies control hundreds of thousands of real property assets worldwide, including facilities and land, which are worth hundreds of billions of dollars. Unfortunately, much of this vast, valuable portfolio reflects an infrastructure based on the business model and technological environment of the 1950s. Many of the assets are no longer effectively aligned with, or responsive to, agencies' changing missions and are therefore no longer needed. Further, many assets are in an alarming state of deterioration; agencies have estimated that restoration and repair needs are in the tens of billions of dollars. Compounding these problems are the lack of reliable governmentwide data for strategic asset management, a heavy reliance on costly leasing instead of ownership to meet new space needs, and the cost and challenge of protecting these assets against potential terrorism. Given the persistence of these problems and related obstacles, we designated federal real property as a new high-risk area in January 2003. Resolving these problems will require high-level attention and effective leadership by both Congress and the administration. Also, current structures and processes may not be adequate to address the problems. Thus, as we have reported, there is a need for a comprehensive, integrated transformation strategy for real property that will focus on some of the underlying causes that contribute to these problems, such as competing stakeholder interests in real property decisions, various legal and budget-related disincentives to businesslike outcomes, inadequate capital planning, and the lack of governmentwide focus on real property issues. It is equally important that Congress and the administration work together to develop and enact needed reform legislation to give real property-holding agencies incentives and tools they need to achieve better outcomes. This would also foster a more businesslike real property environment and provide for greater accountability.