	The Government's Landlord

The General Services Administration (GSA) is the federal government's primary civilian real property management agency with 11 regional offices that oversee GSA owned and leased properties across the nation. At the end of FY2012, GSA—through its real property office, the Public Buildings Service (PBS)—owned or leased 8,708 buildings with more than 422 million square feet of floor space, which represents about 12.6% of the government's 3.354 billion total building square footage. GSA's inventory includes offices, courthouses, and land ports of entry. Prospectus Approval Process

Under the Public Buildings Act, as amended (PBA), GSA is required to submit a formal document, known as a prospectus, to the Senate Committee on Environment and Public Works and the House Committee on Transportation and Infrastructure (referred to throughout this report as the authorizing committees) as part of the process to authorize and appropriate funds for constructing, purchasing, leasing, or renovating real property. Each prospectus must include
a brief description of the building to be constructed, altered, or leased; the building's location; an estimate of the maximum cost of the project; a statement by the Administrator that suitable space in existing government-owned buildings is not available; a statement of rents and other housing costs currently being paid by agencies that would occupy the newly constructed, renovated, or leased space; and an estimate of the future energy performance of the building. Each committee must pass a resolution approving the prospectus before the project is authorized to receive appropriations. It is not uncommon for the cost of real property projects—particularly the construction of new buildings—to escalate as the project proceeds. Prospectus Approval as Oversight

The prospectus approval process provides Congress with an opportunity to exercise oversight of GSA's real property activities. Congress may also use the prospectus approval process to evaluate cost and space projections. Factors that Limit Oversight

The usefulness of the prospectus approval process as an oversight tool may be limited by data that are not available to authorizing committees. Nonetheless, GSA's lease prospectuses do not include a comparison of the costs of leasing versus owning space over time, known as an alternative analysis. While GSA is not required by law to include an alternative analysis in its prospectuses, the absence of comparative cost data means Congress is making decisions without knowing whether a proposed lease is the most cost-effective option. Such alterations are not necessarily included in the cost estimate of a lease prospectus because the actual building in which space will be leased has not been selected when GSA submits a prospectus. 2612 , the Public Buildings Service Savings and Reform Act, on July 8, 2013. Key Provisions Related to Prospectus Process

			Required Offsets for New Space

Section 2(a) would require any prospectus that proposes new space, whether leased or owned, in fiscal years 2014, 2015, 2016, and 2017, to include the details of the elimination of at least an equal amount of space from GSA's inventory. Reports on Leases

Section 4(a) would require GSA to submit to the authorizing committees, by December 3 of each year, a list of all leases that it entered into during the previous fiscal year. It would also require GSA to notify the authorizing committees, in writing, of any project that would increase in cost, or increase or decrease in scope or size beyond its authorized size or scope by 5% or more. Analysis

If H.R. H.R. It is also not clear how Congress would track proposed disposals to ensure they are completed as detailed in the prospectus. H.R. The bill proposes a new requirement that may provide Congress with a "red flag" for projects at risk for significant cost escalation. A second cost containment measure in the bill would require GSA to notify the authorizing committees in writing before entering into certain leases that fall below the prospectus threshold. H.R. 2612 . There are several committees that are considering real property reform bills which share some of the core objectives of H.R. 2612 .
The General Services Administration (GSA) controls more than 8,700 owned and leased buildings with 422 million square feet of floor space, which represents about 12.6% of the government's 3.354 billion total building square footage .Sometimes referred to as the "government's landlord," GSA has the authority to acquire, operate, and dispose of real property on behalf of other federal agencies, including the judiciary. Its portfolio includes courthouses, land ports of entry, and federal office space.
Prior to seeking appropriations, GSA is required to obtain congressional authorization for constructing, purchasing, leasing, or renovating real property. To that end, GSA submits a prospectus to two committees—the Senate Committee on Environment and Public Works and the House Committee on Transportation and Infrastructure—for each proposal that exceeds $2.85 million. The prospectus provides detailed information about the project, including its location and estimated cost. By law, a project that exceeds the $2.85 million threshold may not receive appropriations unless both committees pass resolutions approving of the prospectus.
While the prospectus process provides Congress an opportunity to evaluate GSA real property activities, oversight may be limited by data that are not available to the authorizing committees. GSA's prospectuses, for example, do not always include a comparison of the costs of leasing versus owning space over time, which means Congress is making decisions without knowing whether a proposed project is the most cost effective option. Similarly, many lease prospectuses do not include the cost of altering space to meet agency needs, such as upgraded security, which means authorizing committees may not be aware of the full costs of the projects they are considering. In addition, there are instances where GSA fails to submit prospectuses for projects that exceed the threshold.
Several bills in the 113th Congress propose reforms to the real property process, particularly the process for disposing of unneeded buildings. Examples include the Excess Federal Building and Property Disposal Act (H.R. 328), the Federal Real Property Asset Management Reform Act (S. 1398), and the Civilian Property Realignment Act (H.R. 695 and S. 1715). Another bill, the Public Building Service Savings and Reform Act of 2013 (H.R. 2612) proposes changing the prospectus approval process. The bill would require GSA to include in its prospectuses a plan to offset any new space acquired by eliminating an equal amount of existing space from its inventory. It would also require GSA to ensure it is obtaining the best possible rental rate for leases that fall below the prospectus threshold. Other provisions would require GSA to provide the authorizing committees with an annual report listing all of the leases it entered into during the previous fiscal year; to notify Congress if a project's costs increased by 5% or more; and, when requesting authorization to acquire space, to explain why existing federal space could not be used.
H.R. 2612 could mitigate several long-standing weaknesses in the prospectus process. The bill proposes to help control costs by ensuring that the authorizing committees have access to comparative cost data, and by requiring GSA to provide cost estimates of alterations associated with a new lease that are not included in the estimate of rent. In addition, H.R. 2612 might enhance oversight by requiring GSA to provide a more detailed justification for requesting new space, and to notify Congress when a project exceeds the cost and size parameters established in the prospectus.
This report will be updated as events warrant.