To promote the efficient and economical use of federal government real  property, in 2004 the President issued Executive Order 13327  establishing the Federal Real Property Council (FRPC) composed of  senior management officials from specified executive branch departments  and agencies covered by the Chief Financial Officers Act of 1990 (CFO  Act), including GSA, and chaired by OMB. To meet this directive, GSA’s Office of  Government-wide Policy established the Federal Real Property Profile  (FRPP) to be a government-wide real property inventory database. Twenty-five Federal Entities That Reported Having Independent Leasing Authority Are Not Members of FRPC or Consistently Tracked in FRPP

		There Is No Comprehensive List of Federal Entities with Independent Leasing Authority

According to GSA officials and OMB staff, neither GSA nor OMB  maintains a comprehensive list of federal government entities with  independent leasing authority and neither is required to do so. Other non- FRPC member entities have submitted data to the FRPP inconsistently. Twenty-five Federal Entities That Reported Having Leasing Authority Are not Members of the FRPC, Creating Gaps in Data

In our survey, 25 federal entities that are not members of the FRPC  reported having independent authority to lease offices and warehouses. Of those entities, 19 reported using their authority to lease domestic  offices and warehouses. However, the FRPP’s incomplete data set reduces its effectiveness as an  oversight and accountability mechanism for entities with independent  leasing authority. For Various Reasons, the 37 Selected Independent Lease Rates Were Often Comparable to or Lower Than Matched GSA and Private Sector Rates

In our sample, the lease rates of most of the 37 independent leases we  selected for review were less costly or comparable to matched GSA and  private sector rates. 2.) For example, GSA leases could include clauses with higher— and thus possibly more expensive—energy conservation, security, and  seismic safety requirements. We looked at 19  leases in the National Capital Region and found that 16 (84 percent) were  comparable to or less costly than matched private-sector lease rates. In addition to  leading practices, federal entities must follow all applicable laws related to  real property management. However, we found the extent to which the  lease files contained documented evidence that the sub-practices were  being used varied. The extent to which lease files documented alignment with the leading  practices varied by entity, but none of the lease files contained evidence  of full alignment with all the leading practices. In most of the 30 selected leases we reviewed, more office space was  leased per employee on average than the GSA recommended target of  150 rentable square feet per employee. Though not required,  non-FRPC member entities may also benefit from the leading practices  shared at the FRPC to modify their internal policies to meet utilization  targets for the space they lease. Recommendations for Executive Action

To increase the completeness of information on the federal government’s  real property holdings and improve the coordination among federal  entities that lease real property, we recommend that the Deputy Director  of the OMB—as chair of the FRPC—establish efficient methods for:  including data from non-FRPC member entities in the FRPP, and  increasing collaboration between FRPC member and non-member  entities, including sharing leading real-property management  practices. GAO staff who made major contributions to this report  are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

Our objectives were to determine: (1) what is known about which federal  entities have independent leasing authority and their use of this authority  to lease office and warehouse space, (2) how selected independent  leases compare to General Services Administration (GSA) and private  sector leases in terms of cost, and (3) to what extent selected federal  entities with independent leasing authority have leasing policies and  practices that align with leading government leasing practices. The survey also asked the federal  entity to complete additional descriptive information about the amount of  domestic office and warehouse space and associated annual rent cost as  of October 1, 2015, for the space that each entity independently leased. The four leading practices we developed were: assess  needs, plan ahead, ensure best value, and analyze and document the  budget effects of the lease.
Why GAO Did This Study

GSA leases real property on behalf of many federal tenants, but some federal entities have statutory independent leasing authority.
GAO was asked to review federal entities with independent leasing authority. This report examines (1) what is known about which federal entities have independent leasing authority and their use of this authority; (2) how selected independent leases compare to GSA and private sector leases in terms of cost; and (3) to what extent selected entities have leasing policies and practices that align with leading government practices. GAO conducted a survey of 103 federal entities identified in previous GAO work; selected eight entities for their diversity in size and mission, and visited 37 leased office and warehouse locations; analyzed leases and lease files for the 37 locations; reviewed applicable laws, policies, and guidance; and interviewed GSA, OMB, and officials from the selected entities.

What GAO Found

There is no comprehensive list of federal entities with independent leasing authority. The Federal Real Property Council (FRPC), chaired by the Office of Management and Budget (OMB), was established in 2004 through executive order to coordinate and share leading practices in real property management among federal agencies covered by the Chief Financial Officers Act of 1990. The General Services Administration (GSA) was directed to create a database intended to be a comprehensive inventory of federal facilities, which resulted in the Federal Real Property Profile (FRPP). However, federal entities that are not members of the FRPC are not required to submit data to the FRPP and few do so. Of the 103 federal entities that GAO surveyed, 52 reported having independent authority to lease office and warehouse space. As of October 1, 2015, these 52 entities leased 944 domestic offices and 164 warehouses. Twenty-five of those entities are not members of the FRPC and therefore not required to submit their real property data to the FRPP despite leasing 243 offices and warehouses. As such, the FRPP's incomplete data set reduces its effectiveness as an oversight and accountability mechanism for entities with independent leasing authority.
GAO's review of the costs of 37 selected independent leases found that the rates of most were less costly or comparable to matched GSA leases. When independent leases have lower costs, it may be attributed in part to: (1) GSA's using standardized lease documents that include clauses with higher energy conservation, security, and seismic requirements, and (2) independent leases' having fewer space modifications, more periods of free rent, and private sector real-estate professionals negotiating with potential owners. Most of the independent leases were also less costly or comparable to matched private sector leases, particularly in the National Capital Region.
GAO reviewed the extent to which eight selected federal entities had policies that incorporated leading government leasing practices and found that six had policies that generally conformed to these practices. However, none of the lease files contained evidence that the practices were consistently followed. For example, 88 percent of the entities' lease files lacked evidence of ensuring best value by documenting advertisements to seek bids to fill their space needs, and 77 percent lacked evidence that entities effectively planned ahead by documenting the factors they used to evaluate lease offers. In addition, the average of all leases we analyzed for space-use more than doubled GSA's recommended target of 150 rentable square feet per employee for office space. It may help federal entities conform to leading practices and meet utilization targets for the space they lease if they can benefit from the coordination and leading real-property management practices shared at the FRPC.

What GAO Recommends

GAO recommends that OMB should establish efficient methods to: include data from non-FRPC members to the FRPP and increase collaboration between FRPC and non-FRPC entities. OMB concurred with both recommendations.