[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
FAILURES IN MANAGING FEDERAL REAL PROPERTY: BILLIONS IN LOSSES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT OPERATIONS
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEETH CONGRESS
FIRST SESSION
__________
FEBRUARY 27, 2013
__________
Serial No. 113-7
__________
Printed for the use of the Committee on Oversight and Government Reform
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland,
MICHAEL R. TURNER, Ohio Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee MATTHEW A. CARTWRIGHT,
TREY GOWDY, South Carolina Pennsylvania
BLAKE FARENTHOLD, Texas MARK POCAN, Wisconsin
DOC HASTINGS, Washington TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia PETER WELCH, Vermont
THOMAS MASSIE, Kentucky TONY CARDENAS, California
DOUG COLLINS, Georgia STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan VACANCY
RON DeSANTIS, Florida
Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Robert Borden, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director
Subcommittee on Government Operations
JOHN L. MICA, Florida, Chairman
MICHAEL R. TURNER, Ohio GERALD E. CONNOLLY, Ranking
JUSTIN AMASH, Michigan Minority Member
THOMAS MASSIE, Kentucky JIM COOPER, Tennessee
MARK MEADOWS, North Carolina MARK POCAN, Wisconsin
C O N T E N T S
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Page
Hearing held on February 27, 2013................................ 1
WITNESSES
Dorothy Robyn, Ph.D., Commissioner, Public Buildings Service,
U.S. General Services Administration
Oral Statement............................................... 6
Written Statement............................................ 9
Mr. David Wise, Director, Physical Infrastructure Team, U.S.
Government Accountability Office
Oral Statement............................................... 16
Written Statement............................................ 18
Mr. Leonard Gilroy, Director of Government Reform, Reason
Foundation
Oral Statement............................................... 33
Written Statement............................................ 35
APPENDIX
Statement of the National Law Center on Homelessness & Poverty... 55
The Honorable John Mica, a Member of Congress from the State of
Florida, Opening Statement..................................... 61
FAILURES IN MANAGING FEDERAL REAL PROPERTY: BILLIONS IN LOSSES
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Wednesday, February 27, 2013
House of Representatives
Subcommittee on Government Operations,
Committee on Oversight and Government Reform,
Washington, D.C.
The subcommittee met, pursuant to call, at 2:00 p.m., in
Room 2154, Rayburn House Office Building, Hon. John Mica
[chairman of the subcommittee] presiding.
Present: Representatives Mica, Connolly, Cooper and Pocan.
Also Present: Representative Norton.
Staff Present: Robert Borden, Majority General Counsel;
Molly Boyl, Majority Parliamentarian; Caitlin Carroll, Majority
Deputy Press Secretary; Gwen D Luzansky, Majority Research
Analyst; Adam P. Fromm, Majority Director of Member Services
and Committee Operations; Linda Good, Majority Chief Clerk;
Michael R. Kiko, Majority Staff Assistant; Mark D. Marin,
Majority Director of Oversight; Scott Schmidt, Majority Deputy
Director of Digital Strategy; Peter Warren, Majority
Legislative Policy Director; Jaron Bourke, Minority Director of
Administration; Beverly Britton Fraser, Minority Counsel; and
Devon Hill, Minority Research Assistant.
Mr. Mica. Good afternoon. I would like to call the
Subcommittee on Government Operations to order. Pleased to have
everyone join us in this subcommittee hearing of the Government
Reform and Oversight Committee.
This is our first Government Operations Subcommittee
hearing. Delighted to have the opportunity to chair. This is my
third subcommittee to chair in Government Reform and Oversight,
formerly Government Operations Committee. I had the honor of
serving as chairman of the Civil Service Subcommittee for four
years, Criminal Justice and Drug Policy for two years, and now
have an opportunity during this period.
I think our most important responsibility during this
period of time in the next couple of years, particularly when
our Nation faces some challenges with finance, with financing
government. Tomorrow we face sequestration and fiscal crisis
that we can be in a position to examine some of the areas in
which we can save taxpayer dollars, do a better job, and also
hopefully help towards that bottom line when we are approaching
a $17 trillion national deficit.
So I am pleased to call the subcommittee hearing to order
today. Mr. Connolly, hopefully, will be here in a few minutes.
I want to thank the staff on both sides of the aisle for
working in a cooperative, bipartisan manner to launch our
effort, and I look forward to continuing that effort. Exercise
uncovering government waste, abuse, and fraud is not a partisan
issue, it is something that we have a solemn responsibility to
pursue, particularly under the charter of this important
committee.
With that being said, too, I try not to offer any
surprises. I told Mr. Connolly, and I will recite publicly, we
will do our first field hearing is tentatively scheduled next
Friday in Miami, Florida. It will be at Miami Dade Community
College. It will also be on the subject that we will cover some
of today here, and that is the subject of failures in managing
federal real property, billions in losses is the title of
today's hearing. But we will continue that with our hearing.
I come here today also having chaired the transportation
committee. Just for the record, began work in transportation we
have a very limited focus over some of GSA s federal property
activities and we began some hearings, as you may recall, both
looking at GSA operations, the guy in the hot tub who everyone
remembers waving at us while he was wasting extreme amounts of
taxpayer money on expensive conferences.
But we also uncovered federal assets that were not
utilized, including looking in the Washington area at the Old
Post Office, which I am pleased we have a plan for; it is
moving forward. Instead of losing $10 million a year, it has
the potential for income for the taxpayers. Instead of being a
pit where folks don't work and we pour money into it, as many
as 1,000 workers will work there, possibly as much as a 400-
room hotel.
So we can take these assets that are costing taxpayers
money and convert them into performing assets and reduce,
again, our deficit spending.
We also looked at the Cotton Building, which is between the
interstate and the mall, a huge property, smaller building, but
it sat idle. The power station, two acres right behind, I
believe it is, the Ritz-Carlton in Georgetown, a vacant power
plant on very valuable property sitting idle. And our hearing
next week in Miami is a continuation of the hearing, because we
did one in an empty federal courthouse, which has been vacant,
I believe, since 2007.
After we did the hearing we found out that that federal
property sitting idle across the street from the community
college, in fact, the community college had been seeking for
some six years access to either rent or utilize that space;
they needed additional classrooms, particularly in a judicial
setting, for some of their programs, and it is exactly across
the street. So next Friday one of our key witnesses will be the
president of that college, and he will detail some of his
efforts to acquire over many years an idle federal asset. So we
are trying to pick up from where we have been and where we are
going, we intend to go.
Today s hearing will focus primarily--I am stalling for a
minute, as you can tell, trying to give Mr. Connolly time to
get here. But in today s hearing we are going to focus on high
risk property issues that have been identified by GAO as high-
risk and, unfortunately, the category of high-risk activities
of the Federal Government was submitted again, I believe, last
month and again, and I guess this is the tenth anniversary of
appearing high on the high-risk category list, is the issue of
real federal property and problems with management losses and
risk involved there.
So this is the tenth anniversary appearing on that list,
and what we thought we would do is start out with reviewing
some of the problems that have been identified, and I think the
GAO has done a good job of identifying some of the problem
areas. And we will review some cases to expand what we did in
the capital area. We looked at a couple properties in the last
30 days since we acquired this responsibility, but we wanted to
look in the neighborhood first, then we will look across the
Country, and we looked particularly at two properties I will
talk about in a few minutes.
But, again, I am pleased to have Mr. Connolly as a ranking
member and look forward to working with him. We have had a good
starting discussion and, again, I appreciate the cooperation of
his staff and the ranking member personally in helping us
launch this.
So as we begin this hearing today, again, Mr. Connolly and
staff, I have to reiterate our very basic, fundamental
principles of our activity, and it is, first, that Americans
have a right to know how their money in Washington is taken
from them and how it is spent, and making certain that it is
well spent; and, secondly, that Americans deserve an efficient,
effective government that works for them. And I know Mr.
Connolly joins me in trying to uphold those principles.
Our duty on this committee, the Government Reform and
Oversight Committee and this specific subcommittee, is to
protect these rights of the citizens. They are out working
hard, sending their hard-earned tax dollars to Washington. They
send us here to represent them and that is what we need to do.
So we have to hold government accountable for the taxpayers and
we also have to find out what is going on, make that public.
The public has a right to know what the government is doing and
what they get from their hard-earned dollars coming here. We
will work tirelessly in partnership with our citizen watchdogs
to deliver the facts to the American people and bring them
genuine reform to the bureaucracy.
Now, just having this hearing or just talking about some of
the problems gets us absolutely nowhere, so it is my hope this
can be an action-oriented subcommittee. Work with Mr. Connolly,
again, in a bipartisan effort to find solutions, either
legislative or working sometimes with agencies to get things
moving.
And then let me just cover for a moment, again, the
continuation of the work I started before and we are entering
into. We picked up here in the Washington area. And I am not
just picking on the Nation's capital, Virginia, or Maryland; we
will go to Florida. We can go anywhere in the United States and
see these abuses. But real property management that the Federal
Government has responsibility over is 77,000 buildings that
have been identified as vacant or underutilized. Fourteen
thousand of these buildings and structures have been declared
excess property and the Federal Government spends $1.67 billion
annually to operate and maintain vacant or underutilized
properties.
Here in our backyard, again, we looked at two examples and
we have some illustrations here. Agricultural Research Center.
We went out to that facility in Beltsville, Maryland. These
photographs on the side were taken by our staff. If you look,
the Federal Drug Administration Building is the first building;
it looks sort of barnish. That has its title on the door. Next
to it you only see building 262 and 263. There is a line of
these office buildings totally vacant, vines growing over them.
You see some of the interior.
This is part of a nearly 7,000 acre Department of
Agricultural Research Services Center, covers nearly 7,000
acres. It is just an enormous swath of land. In fact, it is
bigger than the city territory in my State of Key West. That is
how big it is. And some of the most valuable real estate in the
United States of America; it is part of the capital district.
So there are over 500 buildings here, and over 200 of them are
vacant or underutilized. In all fairness, most of, well, I
would say more than half, probably 150, are small, outdated,
some of them even shed buildings, but there are 40 buildings
that are of significant size. You see these here sitting there
idle.
The interesting thing was I asked when they had seen a
member of Congress, and I think it is in Mr. Hoyer s district
or one of the Maryland members, and they said they had seen him
and maybe a senator, but they had never seen another member of
Congress, at least in recent memory, come there. So my concern
is this asset, which is incredibly valuable, this valuable
piece of real estate that could be better utilized.
I am not trying to do away with the Agricultural Research
Services, but a lot of this facility was built in the 1930s and
their mission has changed. But we have no plan, we have no
plan. We have no one looking at coming forward with utilization
or maximizing these assets.
Then one of the other things we found, well, actually, the
GAO found in this high-risk report is some of the reports, we
keep an inventory of reports of property, and they found the
data and data quality of property was inconsistent and
inaccurate. And they don't collect the data. It is garbage in,
garbage out.
Here is an illustration of two properties on the list of
Federal Real Property Profile listed in excellent condition.
You see the report there? And you can see where, one, the roof
is caved in and the other one is decrepit. In a recent GAO
audit, they found inconsistencies and inaccuracies of 23 of 26
locations visited contained in the Federal Real Property
Profile.
So we are only touching, scratching the surface of some of
the problems that we have. We are here to uncover that, to look
at how we can do a better job in alleviating some of the
problems in dealing with the either excess or current federal
property, and then the data and information that we have about
them. Don't have time to go into visiting a million square feet
in a property. I don't know if that is in your district, Mr.
Connolly, but the utilization of that space, prime real estate
in the capital region that someone should be looking at for its
maximum and best use.
With those comments, and I will add a lot more, I am just
getting started. Thank you for being late, because it gave me
more time to mouth off here. But let me just say I appreciate--
I have worked with Mr. Connolly before on projects important to
his district and the region. I was delighted to see that he is
the ranking member. We have had great discussions and
preliminary work in launching our effort, and I welcome him and
pleased to recognize him at this time.
Mr. Connolly. Thank you, Mr. Chairman. I apologize for
being here; I had three luncheon meetings all over the Capitol
compound, and I did not eat at all three, so forgive me for
being a little bit late. But I do want to thank you so much for
holding this hearing, and I absolutely pledge to work with you
on this subject; I think it is a very important subject.
When I was chairman of Fairfax County, this was a very
personal subject to me because of the disposition of the Lorton
Prison site, federal prison. Going back to very early 1900s,
historic site; the Suffragettes were actually imprisoned there
for protesting the lack of vote for women, and it was at one
point seen as a model sort of penal reform institution.
It evolved into something quite ugly. It was about slightly
under 3,000 acres and we were able to purchase it from the
Federal Government as excess property with certain pledges
about what we would do with it. But when we got the property,
we had over 300 buildings on this one property site, to your
point, Mr. Chairman, some of which looked like that, some of
which were historic buildings that we had to preserve, we had
agreed to preserve, many of which had asbestos that had to be
abated. And, of course, if a building ends up looking like
that, Mr. Chairman, the only choice is to bulldoze it; it is
just too expensive to try to retrofit it and reconstruct it.
So allowing buildings to get to that kind of decrepitude
has a cost associated with it, and there is a public safety
issue at some point in terms of this kind of condition of
buildings. The maintenance alone, it is estimated, on buildings
that we no longer need or use is over $1.7 billion a year,
according to the GAO.
There are lots of costs in all of this, and what I would
like to work with you on, Mr. Chairman, is not only the issue
of disposition, but also the relationship to local governments.
I know you have faced this too. We want to make sure that if
there is a compelling use of these properties at the local
level, that they get sort of first right of refusal, because it
is in their midst and we, as the Federal Government, have a
responsibility in partnership to that community.
So sometimes the highest, best use of a property from a
pure dollars and cents point of view may not always be in sync
with what the local government's priorities may be, but I would
never want to just run roughshod over the local governments. I
know you and I talked about an example back home in Florida,
where we would want to look at the productive use of a
particular property for an educational institution.
So my own experience gives me a lot of sensitivity to what
you are trying to do here, Mr. Chairman, and I look forward to
working with you and collaborating with you as we work through
these issues, particularly in light of sequestration and the
sort of fiscal cloud that now hangs over all of us. It behooves
all of us to look for every opportunity to try to make sure
that the assets we do manage we are managing efficiently, and
those that we no longer need and know we no longer need,
instead of always mothballing them, maybe we need to dispose of
them in a productive way that serves the taxpayer and the local
community well.
With that, I look forward to the hearing and the testimony
this afternoon. Thank you, Mr. Chairman.
Mr. Mica. Well, thank you so much. Again, we will be
focusing today on the high-risk series, GAO s publication and,
in particular, we are going to be looking at federal real
property management, and we are pleased that we have three
witnesses. We have members, some in a conference and some at
other activities, but all members, with your permission, may
have seven days to submit opening statements for the record.
Without objection?
Mr. Connolly. Without objection.
Mr. Mica. So ordered.
Mr. Connolly. Mr. Chairman, I am sorry, I was derelict. I
would ask, without objection, that our colleague, Eleanor
Holmes Norton, be allowed to participate in this hearing when
she arrives.
Mr. Mica. Without objection. She would be more than
welcome.
Mr. Connolly. I would further ask, Mr. Chairman, consent to
enter into the record a statement of the National Law Center on
Homeless and Poverty on this subject.
Mr. Mica. Without objection, so ordered.
Mr. Connolly. I thank the chairman.
Mr. Mica. All statements, any statements, and lengthy
statements, we try to limit you to five minutes, our witnesses,
but our panel can submit lengthy statements.
I don't see Ed here, but it is customary, I think, in the
past, to swear our witnesses in. So if you would stand and
raise your right hand. Do you solemnly swear that the testimony
you are about to give to this panel of Congress is the whole
truth and nothing but the truth?
[Witnesses respond in the affirmative.]
Mr. Mica. Let the record reflect that the witnesses
answered in the affirmative. Welcome. We are pleased to have
three top-notch witnesses, and we can begin by a quick
introduction. Dorothy Robyn is the Commissioner of Public
Buildings Service at General Services Administration; Mr. David
Wise is the Director of Physical Infrastructure Team at the
U.S. Government Accountability Office; and we have Mr. Leonard
Gilroy. He is the Director of Government Reform at the Reason
Foundation. So we have three excellent witnesses, and what we
are going to do, we will give you five minutes to sort of
launch into it.
Now, I might say that you will probably hear a bell ringing
in a few minutes, and that will be a 15 minute warning. I am
sure we can get through the three of you. Then we may have to
come back and ask questions. It will be about a 30, probably a
45-minute delay for us to go and vote and come back, from what
I understand.
So, with that, let me recognize the Commissioner of Public
Buildings, Dorothy Robyn, and welcome her. You are recognized.
STATEMENT OF DOROTHY ROBYN, PH.D.
Ms. Robyn. Good morning, Chairman Mica. Thank you and
Ranking Member Connolly. It is an honor to be here with you
this morning.
Under new leadership, GSA has refocused on its mission of
delivering the best value in real estate, acquisition, and
technology service to government and the American people. In
the real estate area, we face three key challenges: one, an
aging portfolio of buildings; second, limited capital for
reinvestment in those buildings; and, third, because of the
first two issues, an over-reliance on leased space, as opposed
to government-owned space.
To meet these challenges, GSA is focusing its effort in
four key areas: first, we are rightsizing our portfolio. We are
working with federal agencies to improve their utilization of
space and thereby reduce their space requirement. We do this
by, among other things, helping agencies adopt newer, more
efficient workspace arrangements and undertake proper planning
for mobile work. One indication of our success is our fiscal
year 2013 prospectus-level leases, which were reduced in size
by 300,000 square feet, or about 10 percent.
Second, we are disposing of excess GSA property. Mr.
Chairman, I know this has been a particular interest of yours,
and I appreciate the visibility you have given the issue. You
will be pleased to know that the online auction to dispose of
the Georgetown heating plant has been underway since late
January. Although the auction was scheduled to end last week,
we have kept it going because of continued bidding activity. As
of a half hour ago, the high bid is $16.1 million.
With our government-wide disposal authority, we have also
been working to help other agencies dispose of unneeded assets.
In fiscal year 2012, we disposed of 114 federal properties; of
those, 79 were sales that yielded about close to $38 million in
proceeds.
However, as GAO has noted, there are a number of
longstanding challenges to getting agencies to better utilize
their current inventory and dispose of unneeded assets. The key
ones are the up-front cost of property disposal, legal
requirements prior to disposal, and stakeholder resistance. As
you know, the Administration has proposed a civilian BRAC
process that would address these challenges. I have been
involved in the BRAC process since 1993, off and on; most
recently during a three-year tenure at the Defense Department.
It is a painful, but critically important, mechanism and we
need it on the civilian side.
I very much appreciate the effort by you and Congressman
Denham to get a civilian BRAC bill. I would like to work with
you to get a bill that goes even farther.
Third, GSA is using the authorities Congress has given us
to leverage private capital to deliver better and more
efficient space to our federal customers. In early December we
issued an RFI, request for information, seeking private sector
input on exchanging the FBI's J. Edgar Hoover Building, an
outdated, but valuable, property on Pennsylvania Avenue, for
the construction of a new, state-of-the-art headquarters
somewhere in the national capital region.
Mr. Connolly. Preferably in Northern Virginia.
Ms. Robyn. We are following a similar approach to
capitalizing on our assets in Federal Triangle South, a 22-
acre, five building area near the national mall that we think
can be redeveloped so as to better accommodate federal agency
needs and, at the same time, support the District s vision for
vibrant mixed use.
Finally, we are working with OMB and the Federal Real
Property Council to improve the Federal government's inventory
of real property, the Federal Real Property Profile, or FRPP.
Although I would defend the quality of the data in the FRPP on
our own property, on GSA-owned property, I recognize the
broader limitations of the inventory. In line with GAO's
recommendations, we are working with the Federal Real Property
Council to get greater consistency agency-to-agency, to clarify
the data dictionary with additional detail that will help
agencies better understand the data elements, and to tighten
the requirements by removing optional data fields.
In closing, let me comment on a statement in the report by
the Reason Foundation that Mr. Gilroy will be discussing today.
It is a good report, but the report says at one point that
managing real property can be considered a mundane chore for
the public servant, lacking the headline-grabbing issues of
health care, energy policy, or national defense.
I want to assure the Reason Foundation and you, Mr.
Chairman, and you, Mr. Connolly, that GSA in no way finds the
management of real property to be either mundane or a chore. It
is why GSA was created. It is a mission we carry out with great
passion and I would say with considerable skill.
I look forward to working with you to enable us to perform
that mission better. Thank you.
[Prepared statement of Ms. Robyn follows:]
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Mr. Mica. Thank you for your testimony. And we will hold
questions.
I will recognize Mr. Wise next. He is Director of the
Physical Infrastructure Team at GAO. Welcome, and you are
recognized, sir.
STATEMENT OF DAVID WISE
Mr. Wise. Thank you, Mr. Chairman. Ranking Member Connolly
and members of the subcommittee, I am really pleased to be here
today to discuss federal real property management. The Federal
government's real property portfolio includes about 400,000
owned or leased buildings located throughout the Country.
In 2004, the President issued Executive Order 13327
establishing the Federal Real Property Council. The Executive
order required the FRPC to work with the GSA to establish and
maintain a single, comprehensive database describing the
nature, use, and extent of all federal real property. The FRPC
created the Federal Real Property Profile to meet this
requirement and began data collection in 2005. As we have
reported, despite the implementation of the Executive order,
data problems have continued and agencies face challenges
managing their real property.
My statement today summarizes our recent high-risk update
as it pertains to federal real property management and
discusses challenges associated with excess and underutilized
property, drawing on our June 2012 report.
The Federal Government continues to face longstanding
problems managing its real property, including an over-reliance
on costly leasing and issues with excess and underutilized
property. The previous and current Administrations have given
high level attention to real property management. For example,
in May 2011, the Administration proposed legislation referred
to as the Civilian Property Realignment Act to establish a
framework for consolidating and disposing of civilian real
property. However, neither CPRA nor other real property reform
legislation introduced in the last Congress has been enacted.
The Federal Government's continued reliance on costly
leasing has been an ongoing problem. The Government leases
spaces from private landlords in the same real estate market
where it owns underutilized property. In some cases federal
agencies in the same market could consolidate into other
government-owned properties. However, agencies do not have a
strong understanding of real property held by other agencies
and may lack the authority or expertise to lease their own
underutilized property to other federal agencies. We have
ongoing work assessing GSA s high cost leases that we plan to
report on later this year.
In our June 2012 review, we found that FRPP data did not
accurately describe the properties at 23 of 26 sites that we
visited, often overstating the condition and annual operating
costs. Our work focused on reviewing selected agency-reported
FRPP data elements, including utilization, condition, annual
operating costs, and value. We found that FRPC had also not
followed sound data collection practices.
For example, the FRPC has not ensured that agencies data
elements are consistently defined and reported, thus limiting
the usefulness of FRPP data as a decision-making tool. On our
onsite visits, we found that agencies often did not report
building utilization consistently or accurately. Also, as seen
on the posterboards, some properties we visited were listed in
FRPP as being in excellent condition, even though they were
clearly not.
As for operating costs, we found data inconsistencies and
inaccuracies at most sites. In some cases officials apportioned
building operating costs according to square footage of an
overall site. Regarding value, agencies often reported
replacement costs higher than the property's actual worth
because they did not take into account market or asset
conditions. Additionally, according to agency officials, many
excess properties do not have the potential for generating
revenue for the Federal Government. Indeed, we saw more than 80
buildings on our site visits that agencies plan to demolish
when they have the resources to do so.
Federal agencies reviewed have taken some actions to better
manage their property, including consolidating offices and
reducing employee workspace. However, they still face
longstanding challenges. For example, agency disposal costs can
outweigh the financial benefits in the near term. Legal
requirements, such as those related to conveyance, preserving
historical properties, and conducting environmental remediation
can make the property disposal process lengthy and costly.
Finally, stakeholder interests can conflict with property
disposal or reuse plans.
While multiple administrations have committed to improving
real property management, their efforts have not yet fully
addressed the underlying challenges that we have identified. In
the June report, we recommended that OMB, in consultation with
FRPC, develop a national strategy for managing federal excess
and underutilized real property. OMB did not state whether it
agreed or disagreed with our recommendation.
In that report we also recommended that GSA and FRPC take
action to improve the FRPP. GSA has taken action to begin
implementing our recommendation related to FRPP. We will
continue to monitor these agencies efforts to implement our
recommendations, which we believe are critical to addressing
the challenges that have kept federal real property management
on our high-risk list.
Chairman Mica, Ranking Member Connolly, and members of the
subcommittee, this concludes my prepared statement. I would be
happy to answer any questions you may have.
[Prepared statement of Mr. Wise follows:]
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Mr. Mica. Thank you again, and we will hold questions.
Let s go to Mr. Leonard Gilroy. He is Director of
Government Reform at the Reason Foundation. Welcome, and you
are recognized.
STATEMENT OF LEONARD GILROY
Mr. Gilroy. Thank you, Chairman Mica, Ranking Member
Connolly, members of the subcommittee. I am honored for the
invitation to speak today. For the record, I am Leonard Gilroy,
Director of Government Reform at the Reason Foundation. We are
a nonprofit think tank that researches market-based policy and
best practices for efficient and effective government.
Managing real property can be a major challenge in
government, with agencies often lacking their own asset
monitoring and tracking systems, leading to a lack of
standardization and interoperability. Without the ability to
know what government agencies own, it becomes very difficult to
manage those assets in the most cost-effective and efficient
ways.
In my written testimony I include a link to our 2010 Reason
Foundation report, where we outline the case for a more robust
federal real property inventory, a central geographic
information systems-based record of government-owned land and
assets to serve as a tool for improved asset management and
public accountability.
Real property inventories offer a range of benefits. They
allow public officials to assess whether public property is
being used and maintained in the most efficient manner
possible. Inventories can also help assess the potential value
of divesting underutilized or unnecessary land or assets, which
can generate revenues and lower maintenance and operation costs
over the long term. Selling or leasing assets to the private
sector can expand the tax base and encourage economic growth.
And inventories can potentially help lower lease and
maintenance costs through space consolidation and more
efficient utilization.
Unfortunately, the absence of a robust real property
inventory presents a major challenge for right-sizing the
federal property portfolio and causes higher than necessary
operating costs and maintenance responsibilities.
The GAO has long noted deficiencies in federal real
property management and, as you mentioned, has designated real
property management as a high-risk activity since 2003, in part
due to the unreliability and limited usefulness of current
data.
More recently, a June 2012 GAO report found that the FRPC
has not followed sound data collection practices in designing
and maintaining the Federal Real Property Profile database,
suggesting that the database may not be an adequate or useful
tool for describing excess and underutilized properties
consistently and accurately for measuring performance and for
decision-making in general.
The Federal Government should take note of recent proactive
steps at the State level to develop real property inventories.
For example, in 2005, former Georgia Governor Sonny Perdue
issued an executive order creating the State's first State
Property Officer and restructuring the State Property
Commission to bring overlapping, multi-agency management of
real estate into one portfolio, with a central manager.
Governor Perdue also ordered the State's first comprehensive,
enterprise-wide asset inventory. As a result, the State has
sold off over $15 million worth of surplus assets, renegotiated
leases at lower rates, and adopted uniform construction
guidelines.
Virginia also enacted a law in 2011 requiring the State's
Department of General Services to develop a comprehensive real
property inventory and an online surplus real property
database. Similarly, Oklahoma enacted a law in 2011 requiring
the State's Director of Central Services to publish a report
detailing State-owned properties, including a list of the 5
percent of the most underutilized properties, the value of
those properties, and the potential for purchase if sold. A
separate bill passed in 2012 in Oklahoma would direct the
proceeds from State asset sales to a new fund dedicated to the
maintenance and repair of the State s aging buildings and
properties, including the capitol complex.
Considering the Nation's ongoing economic challenges, the
government should take proactive steps to maximize the value of
its resources, ensure efficient management, and enable private
sector economic growth through asset divestiture. Real property
management is not a partisan issue, nor is it an issue of
spending priorities; it is an issue of good governance and
fiscal responsibility.
In conclusion, I commend the subcommittee for considering
the need to improve federal real property management. It would
represent an important step toward bipartisan, responsible
stewardship of public assets and resources, and improved
transparency and accountability to taxpayers.
Thank you again for the opportunity to testify on this
important subject, and I am happy to take any questions.
[Prepared statement of Mr. Gilroy follows:]
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Mr. Mica. Well, thank you, and we will go to questions now,
and we will divide the time up that we have.
First, let me start with our report author, GAO. One of the
things that was interesting that you mentioned, I thought, was
problems of conveyance. I know that there are certain statutory
requirements that have been set up that are impediments. Have
you given any thought or is there any recommendation to how
this should be approached? Because, for example, if we took
this Department of Agriculture property in the current disposal
system, it is very difficult.
We have some acts, too, that have been well-intended
passed, but also put in impediments to dealing with disposal
DOD property. I think you have the McKinney Act and some other
things they have to comply with. Have you given any thought,
Mr. Wise, are there any recommendations? We have a couple
pieces of legislation that were crafted that really, I don't
think, solved the conveyance problems, but would you like to
comment?
Mr. Wise. Yes. Thank you for your question, Mr. Chairman. I
don't think that it is described as an impediment, per se.
Rather, these are issues that are part of the entire property
system. Now, we have recommended, as I noted in my statement,
that it would be, we think, very helpful if OMB would develop a
national strategy for trying to address federal real property.
Now, OMB, by itself, cannot overcome all these issues, but,
nevertheless, they could develop a game plan that would help
set up a framework so that these can be addressed in some
manner.
You have a situation, really, where many conveyances are
things that are for the public interest as well. You know, you
could take, for example, a small or medium size city where a
building, an old courthouse may be located in a downtown
facility, a downtown area. It is a very valuable piece of
property; it is something that maybe the city hall is too small
for the city government and it is quite natural, and I think
this process is repeated many times around the Country, that a
city or a State government would then be able to consolidate
some of its offices and pull back from leased space. In that
case, it is helpful for the public good.
Mr. Mica. What I am interested in, and I don't know if you
or Dr. Robyn can help us, but if you can cite any current
statutes or impediments to conveyance, maybe supply it in the
future to the committee, I think that would be helpful.
I was talking to Mr. Connolly informally and we could look
at the legislation, some of which I helped craft, that had been
proposed but not passed, but maybe combining that, looking at
how we could give you the tools to accomplish the job, and also
the agencies. We go to agencies; you passed the law, we can't
do this. But I would be most appreciative if you could identify
those and then use it in maybe possibly empowering OMB.
One of the problems we have in looking at properties, and
here again you have 7,000 acres right up the road, incredibly
valuable property, 500 buildings. I asked is there a plan, does
anyone have a plan in the Department of Agriculture for this
property. No, they didn't. Has anyone looked--well, there are
impediments, asbestos. Well, lots of old buildings have
asbestos in them. Maybe they won't be used, like Mr. Connolly
said, when they get to that condition, they have to be torn
down. But you still have a valuable real estate asset there,
and redevelopment and reconstruction is nothing new, even
within the Capitol Beltway. But we need to be able to make that
possible.
I know you are sort of a service agency, too, Dr. Robyn,
and you are doing the best you can do. I don't know if you know
this, Mr. Connolly, with all the disruptions we had in GSA, and
has been the building commissioner since, I guess, September,
trying to pick up the pieces of an agency that was having
problems. But I am delighted to hear, incidentally, of the
online auction. Here is an asset that sat there for 10 years
and now it has the potential for putting some cash in the
Treasury or better utilization of that. So I thank you for
those efforts.
But, again, I am not sure how we approach this. If we
require every agency, you can't do this all, but we may need
some requirement to have a plan to someone to analyze. Now, we
do have a federal reporting requirement on the property, but we
see how flawed that is. Here is two properties totally
dilapidated on the Federal Property Report as in excellent
condition. So, first, what about the plan, and then maybe, Mr.
Wise, you could comment about how do you require accurate data.
Ms. Robyn. Well, let me speak to the disposal issue,
because I think I am a veteran of a number of BRAC backgrounds,
both in the Clinton White House and at DOD, and, Congressman
Connolly, I led the Clinton Administration effort to make base
reuse more friendly to communities. It was not friendly to
communities when I came in Congress.
Mr. Chairman, I don't know what Orlando's experience was
with McCoy when that was closed in the mid-1970s.
Mr. Mica. Our big one was the naval training center.
Ms. Robyn. Okay. All right.
Mr. Mica. That was political. They had brand new buildings,
some under construction, I mean, actually under construction,
and Rostenkowski had more power than McCollum at the time, so
they had decrepit buildings in the Great Lakes and winter
conditions, but they got to open and we actually tore down
brand new or under construction buildings. It was almost
criminal. And Orlando could sustain the economic impact of
losing the training center, but it was horrible.
But the thing here is we have a responsibility government-
wide. We want, for example, the Department of Agriculture,
somebody should have a plan. But how do you do that? You can't
do it all. Maybe you can go on and do some spot checking and
say, hey, we should look at plans or kick them in the butt to
make them move forward with it, instituting a plan. But to have
7,000 acres, larger than the size of the city of Key West in my
State, sit like that, with almost half the buildings decrepit,
it is mind-boggling.
Ms. Robyn. I would argue that you need less a plan than a
process, and that that process is a civilian version of BRAC.
Mr. Mica. Okay. Well, we did some of that, and I think we
will look at our bill. I am not sure, though, that we even
required, you have to have someone first assess what you have
and then someone make a damn decision as to disposal best
maximum utilization of the property.
Mr. Wise, what do you think? Give us your opinion again on
how you think we should approach this.
Mr. Wise. Well, just to elaborate a little bit on what Dr.
Robyn was getting to, the civilian BRAC process, CPRA, the bill
we actually worked pretty closely with staff to help advise on
that and comment on it, and there, by bundling properties
together with a total up and down vote required from the
Congress I think would have helped at least, if not eliminate
it, would have helped ease the process of some of the steps
that right now make it very difficult to dispose of excess
federal real property. So that is one step.
Mr. Mica. Would you object to requiring each agency to have
a true assessment, evaluation plan, and then best utilization?
Mr. Wise. Well, under the Executive order each agency is
required to have such a plan, so presumably these are things
that are being fed into the process.
Mr. Mica. Maybe it needs to be done by law?
Mr. Wise. You mean codified?
Mr. Mica. Yes.
Mr. Wise. That is really up to the Congress, but I think
that was one of the bills actually was aimed at doing that.
There was a different version of that bill that also never was
enacted that aimed at that as well. But I think there is a
combination, as you were stating earlier, a combination of both
legislation, as well as administrative actions, that could help
harmonize some of these issues and make some progress in
dealing with the property issues.
The disposal one can be very tricky because often, as you
mentioned earlier in your statement, it can be very costly to
dispose of properties due to the environmental issues. As you
saw in Beltsville, I went out there also last year and I had an
offline conversation with one of the engineers who was
responsible for some of the activities going on there, and he
had mentioned it had cost him almost $200,000 to knock down one
of the smaller buildings there because he was dealing with
three environmental authorities, between Prince George s
County, the State of Maryland, and the federal; and it is a
very involved process and very costly process, and that is a
major challenge.
Mr. Mica. We need a way to expedite that.
I am using more of my time, but I am going to give Mr.
Connolly as much time.
I just want to say, in conclusion, Mr. Gilroy, thank you,
and also giving us examples. I will look at those examples.
Georgia, you probably know Mr. Deal who served here; Mr.
McDonnell, your governor, was not here; Mary Phalen, Oklahoma;
former member Kasich from Ohio. I think you cited four States
that have taken initiatives. We will look at what they have
done and maybe we can learn from them or even have them in.
Mr. Connolly, you are recognized.
Mr. Connolly. Thank you, Mr. Chairman.
Mr. Gilroy, you said this should not be a partisan issue. I
agree. My concern, just to interject, and I know the chairman
shares this, as someone who spent 14 years in local government,
we don't want to do harm to local communities in our zeal to
divest ourselves of properties we no longer need or want. We
want to make sure that whatever action we take is integral with
the plans of that local community.
For example, it may be sometimes that there is value in
parking a piece of property and not developing it, not selling
it off until something else is triggered in a given local
community. On the other hand, it may be the opposite; the local
community may welcome that property being developed to help
jumpstart, catalyze redevelopment, or whatever it may be. So we
want to make sure we are in sync and that we are not an
outlier, because the Federal Government, frankly, is not
subject to local zoning regulations and laws, and that can
sometimes be problematic in terms of planning.
I like to believe that the Lorton property here, the Lorton
Prison property was actually a model for cooperation between
the locality and the Federal Government, well, I will come back
to this.
Let me ask some questions. Inventory. Do we know, Ms.
Robyn, how much property we own as the Federal Government?
Ms. Robyn. I know how much GSA property we own, yes.
Mr. Connolly. All right, but there are lots of federal
entities.
Ms. Robyn. Yes. Yes. We represent 10 percent of federal
property.
Mr. Connolly. Who is the coordinating entity, going back to
the Chairman s question, really, for other entities? Like this
property is a Department of Agriculture property and this is a
Department of Interior property. So are you confident that
those agencies have accurate inventories as well?
Ms. Robyn. No. No.
Mr. Connolly. No.
Ms. Robyn. And GSA does have a role here, another part of
GSA, the Office of Government-wide Policy oversees the FRPP,
the inventory, or sets the rules for the inventory.
Mr. Connolly. For the other agencies. So you play that
coordinating role.
Ms. Robyn. Yes. We are still at the stage of crawling, we
are not walking yet.
Mr. Connolly. So in the legislation that the chairman was
talking about, maybe one of the elements we could have is to
toughen up reporting requirements by the agencies to you, maybe
even toughen up your coordinating role so we actually at least
have an accurate picture of what do we own as a Federal
Government.
Ms. Robyn. Yes. I mean, I think there are a number of ways
to go at it.
Mr. Connolly. Before I get to disposal and utilization,
when we own property, when do we make the decision and how do
we make the decision to lease space, rather than go to or
develop the property we own?
Ms. Robyn. Well, for GSA tenant agencies, we work with them
to establish a requirement, and we typically work with them to
lower their requirement below what they, in terms of space, and
then figure out is there owned space that would meet that
requirement, and then we look at leased space as an alternative
to that. It is not a first choice, but we have increasingly
relied on leased space because it is often more desirable than
owned space that we are not keeping up to the level of private
sector space, commercial space.
Mr. Connolly. I assume cost is a factor as well.
Ms. Robyn. In what sense?
Mr. Connolly. Well, you are taking into account the fact
that it costs X dollars per square foot to lease a space,
versus, perhaps, retrofitting or constructing.
Ms. Robyn. Yes. Yes, in that sense, very much so.
Mr. Connolly. Plus, there is a location issue.
Ms. Robyn. Right.
Mr. Connolly. Okay. Utilization. How do we determine the
best utilization of a property?
Ms. Robyn. Well, utilization is a little bit subjective. I
mean, there are criteria for how much utilization, whether a
property is utilized, underutilized, not utilized at all. But
property that is utilized we think can often be better
utilized. The single most powerful thing that my organization
is doing now is trying to move our customer agencies to
collaborative open workspace, much like what the private sector
is embracing, which allows them to meet their needs with less
space.
If you go into a typical federal office building, same is
true for a commercial space, only a third of the people are
there at any one time; they are traveling, they are engaging in
mobile work. We can get by with less space if it is organized
in the right way. And agencies tend to love it. I am a convert
to it. I have no office; I have a workstation and four feet
from my desk is my deputy's workstation.
Mr. Connolly. Do we have a process regularly for revisiting
the utilization?
Ms. Robyn. No. I mean, many agencies reach out to us and
want to do this, and we have an active process typically, at
any one time, with any agency number of agencies.
Mr. Connolly. But it seems to me, if you want an action-
forcing event, it has to be on a schedule. So every five years
we review your property, or something.
Ms. Robyn. Well, we are constantly reviewing. We have an
asset profile for every single property that we have, leased or
owned, so we are constantly looking at that.
Mr. Connolly. Well, leases I understand, because that is an
action-forcing event. But if you own this property----
Ms. Robyn. Right. No. We are kind of disposal police. We
love to dispose of property. I don't know why we have not
reached out to USDA on something like that.
Mr. Connolly. But again, I think that the criteria and the
review process, including subjective review, is important. I
mean, the Secretary of State, William Seward, purchased Alaska.
It was roundly mocked, roundly disdained. Nobody thought it was
a smart decision to purchase Alaska from the Russians. In
hindsight, we are awfully glad Seward's folly took place and
that we banked this huge piece of land that today, of course,
is mineral-rich and has lots of other assets to it. So it
depends on one's perspective. One wants to have some cushion to
allow one to think longer term than just the immediate value of
land.
But, on the other hand, there has to be some process for
review of what we own. Now, if we had a five-year, let's just
make it a five-year plan, in this bill we are looking at, Mr.
Chairman, then there would be an action-forcing event. Justify
this, please. Justify why you are still banking this land in
that condition and that you have no plans for it. Because if
that is the answer, then someone else will have plans for it
for you. And I guess that is what I am getting at. I think you
have to have some kind of requirement, federal family, that
whoever it is who owns land, you have to have a mechanism for
reviewing it.
Ms. Robyn. Well, so we have a pretty rigorous process for
working with agencies to downsize their space requirement. That
is not GSA property, that is USDA.
Mr. Connolly. Don't get parochial on me, now.
Ms. Robyn. Okay.
Mr. Connolly. I am sure you are doing a great job, but we
look at the whole federal government.
Ms. Robyn. Yes, the Federal Government.
Mr. Connolly. And that is why I asked do you have a
coordinating role that could be beefed up to force agencies to
have to tell you what their plans are.
Ms. Robyn. Yes. I start to sound like a broken record on
this subject, but when I was at DOD and again in my current
role, I am part of the Federal Real Property Council, the real
property officers of the largest landholding agencies, and we
are the ones who develop the civilian BRAC legislation. Senior
people in federal agencies realize they need to get rid of
property, but they are also looking at impediments, including a
lot of stakeholder interest.
Just to take USDA, this is a USDA property, they have
properties all over the Country because at one time, by
statute, you had to be able to reach a USDA property on
horseback within a day. Now farmers sit on million dollar
combines and communicate on their laptop. But there is an
enormous amount of USDA property that it is not underutilized,
but it is like post office property; one has to rethink do we
really need this many facilities.
And the key to that, I think, is a process for insulating
you all from the political difficulty of doing that on a very
broad scale. I don't know how else to do it on a broad scale. I
think there is the will among senior people in these agencies
to do it, but they need help doing it.
Mr. Connolly. Yes. My own experience with BRAC, which is
extensive, it is good that we have an action-forcing event that
is very difficult to amend, it is up or down. There is some
good in that. But that doesn't guaranty wise decisions, and the
last BRAC round made some very unwise decisions, depending on
one's point of view, about transit and about land use and the
like. So, yes, we want to force action, but we want to make
sure those are wise actions.
Ms. Robyn. I won't disagree with your statement.
Mr. Connolly. I have other questions, as well, but my time
is up, and I want to give Ms. Norton an opportunity. I think
the votes have been called, haven't they?
Mr. Mica. Yes, I think they are going back in, but thank
you, Mr. Connolly.
Also, too, we will be submitting and will leave the record
open for a period of three weeks to submit additional
questions. Without objection, so ordered.
By previous unanimous consent request, which was granted,
recognize the gentlelady from the District, Ms. Norton, for
five minutes. Welcome, and you are recognized.
Ms. Norton. Well, thank you, Mr. Chairman. I am on the full
committee, I am not on this particular subcommittee, but under
Chairman Mica, actually, on another committee, we gave a lot of
attention to this issue. Therefore, it is very frustrating to
hear the piecemeal approach.
Mr. Mica. Would the gentlelady yield? Now, you weren't here
when Dr. Robyn spoke.
Ms. Norton. No.
Mr. Mica. But we did the hearing at the power plant.
Ms. Norton. At the power plant?
Mr. Mica. Vacant for a decade, I think. And she told me
that the current bids on the online auction are up to $16.1
million.
Ms. Norton. That's the word I have, too.
Mr. Mica. Well, just thank you for yielding, but I didn't
know if you had heard that.
Ms. Norton. Thank you. Yes, indeed. It looks like even
without a process, as you call it, the Administration, at least
the GSA, with property it controls, has gone ahead, and I
salute you for that.
But the reason I was interested is because I was the
ranking member when we had this discussion in the
Transportation Committee and I sat through similar hearings in
this committee and two versions of civilian BRAC went to the
floor and were passed. I think we would have benefitted if, in
the process of considering our bills, we had collaborated with
the Senate, because the Senate Homeland Security Committee, it
seems to me, is pretty close to us, particularly to the bill
that came out of this committee, and I think that could have
happened if that collaboration had gone on.
So when I hear this talk about data or see these
properties, it seems to me that these annual reports on federal
property management issues will remain exactly as they are and
have been as long as nobody is in charge. And the central
problem is as they are and as they have been as long as nobody
is in charge. And the essential problem is unless you want to
keep going agency-by-agency or making you all kick up dust
trying to deal agency-by-agency, as if they had some call on
federal property, it is not their property; it happens to be
property in their name that they were using for specific
purposes. Until we get an umbrella under which to do this, we
are not going to get anywhere.
Would everybody at the table agree that some sort of
umbrella unit, you can call it civilian BRAC. That is not what
this committee called it, it simply had the GSA and OMB get to
together and to figure it out, but they had the power to do it.
Would everyone agree that Congress needs to put in place some
umbrella unit that would have the statutory authority to get
the data and to do the other tasks that you are now doing piece
by piece, trying to extract agency-by-agency? Would that be
useful and beneficial to deal with these annual property
management problems?
Ms. Robyn. Yes, I very much would applaud that. One still
needs an inventory, a better inventory than we have, and an
ongoing process.
Ms. Norton. I am saying that you are not going to get an
inventory, you are not going to get anything until somebody can
say here is a system, this is how we count. So the way you are
doing inventory now, you are going to be doing inventory for a
long time. People know how to count, but they will count
differently unless there is a unit that says this is how we
want you to count, this is the date by which we want it. So I
am taking all of that and putting it under one umbrella; data,
all of the piecemeal information that you are gathering, which
I regard as just make work. And I don't know how one can
continue it.
We had the Administration and two committees of the House
on the same page on some kind of unit. Somebody needed, perhaps
the Administration, to take more leadership, since the House
Homeland Security Committee was not that far from us. We could
have a bill out of here. The discussion I have sat in on is
very frustrating because that is not going to get us anywhere,
and you all know it. And to task GAO, year after year, to doing
this, when there are already solutions, this is not a problem
that hasn't found a solution; it is a problem where we have
failed to act on a solution where we were close to, in fact,
getting a solution.
Somebody has to move off their duff and get us moving on
these bills and get the Administration to say, look, you are
close together, let's get together and let's negotiate these
out and get the job done. Because I find this just boring every
year to go through the same telltale, when everybody knows what
to do, and subjecting you, the GSA, to criticism, and then you
come back and say, okay, but we only own 10 percent of the
buildings.
You are a peer agency. There is not a damn thing you can do
when you go to the Department of Energy and say we want your
things. You just can't get it. You can't do it from the
Department of Agriculture; it is ten times bigger than you are.
You ought to say that. That is how action is forced.
Mr. Wise, are you from the GAO?
Mr. Wise. Yes, I am.
Ms. Norton. Well, why don't you call the question on this?
I looked at your report. The report is very informative, but
why doesn't your report take account of the fact that two bills
were passed by this House, and that the Senate got close to it
and recommend that the House proceed to see what it can do
along lines? It wouldn't be controversial for you to say, since
you already have agreement from the Administration and the
House, at least, with the Senate not that closed off, instead
of just going along with the same questions that you asked
before the 112th Congress, when we had gotten that far. We need
a push from someone that says you have the solution right there
before you, go at it.
Mr. Wise. Yes. Well, if I may, you may remember a couple
years ago there was a hearing in the very cold Old Post Office
Annex. I don't think you ever took of your gloves. I know I
didn't. But, anyway, at that hearing we had commented that we
thought CPRA was a step in the right direction in terms of
trying to rationalize the federal property system. What I think
you are actually asking is what other steps can Congress take
to really help real property form methods.
Well, in fact, we don't think it is absolutely necessary
there be additional legislation. Rather, I think the two
recommendations that we have from our June report, I think,
lend themselves, if implemented fully, to really making big
strides forward.
Number one is encouraging OMB implement our recommendation
for developing a national strategy and also making the Federal
Real Property Profile more transparent and open to other
agencies, who then can access it and see what is going on among
each other. Right now they keep a very close hold on it.
Ms. Norton. Good luck, Mr. Wise.
Mr. Wise. Okay. That is one.
Ms. Norton. Good luck with that approach.
Mr. Wise. Okay, number two is, again, working with the
General Services Administration to make these improvements that
they have said they are planning to make to the Federal Real
Property Profile, getting everybody on the same page and
helping to get the agencies to report things in a uniform way,
because without proper data collection methods, you are going
to continue to have a mishmash of data in the profile.
Ms. Norton. Mr. Wise, I thank you for that. Good luck to
the GSA if they can make the agencies do that. OMB would have a
hard time doing it. All I am saying is that I think your report
would have been far more useful to us if you had picked up
where we left off, seeing that we have such substantial
agreement in the Congress, instead of going back to the same
kinds of approaches that, frankly, have not proved very useful.
GSA has tried to do what you are talking about and GSA
simply is no match for these larger agencies. I don't think it
gets us anywhere to leave on the table when Congress is close
to agreement for some kind of unit to help us get to the bottom
of this. And if I may link this to another part of your report
which talks about costly leasing, I couldn't agree with you
more.
Now, Dr. Robyn has now 412 authority, authority to use
ground leases, leaseback in order to do something about this
property. So you can talk about leasing all you want to, but
the fact is that if GSA isn't pushed to use this authority--we
gave GSA this authority at least six or seven years ago. Only
this year are we seeing any movement toward using this
authority, which would mean you could act in the way that
people in the real estate business act in order to build.
So I don't see how you can talk about costly leasing
without implicating GSA's unused or virtually unused authority
to do something about it. GSA sees a property, and you, quite
correctly, say the government often leases space from private
landlords in the same real estate market where it owns
underutilized real property without indicating that there is
authority in the GSA to take that real property and use that
extraordinary authority that Congress gave it. So that is my
criticism with you, Mr. Wise.
But my criticism of Dr. Robyn would be where in the world
is the 412 authority on this leasing? If you have underutilized
property in a city or a county, why aren't you using leaseback
or ground lease or some of your flexible 412 authority to save
the government money?
Ms. Robyn. I think, in a word, scoring, scoring issues.
Ms. Norton. I thought the whole point of the 412 authority
was to take you out of the scoring problem.
Ms. Robyn. No. Legislation does not--you can't legislate
around scoring issues.
Now, 412 authority provides for exchanges, and we think
that that is what we think will work for the FBI headquarters
in exchange of J. Edgar Hoover for construction services
somewhere in the National Capital Region. We think that will
work for the Federal Triangle South, although we are open to a
variety of alternatives. If we have innovative financing
authority that we are not using, you can be pretty sure that it
is because we have tried and failed to get around scoring
issues.
Ms. Norton. Mr. Chairman, I thank you.
Mr. Mica. Thank you for participating and for your interest
and questions, and you raised some issues that we need to
pursue. This, of course, is the first subcommittee hearing, and
we are focused, of course, on the high risk series,
particularly federal real estate. We have opened a whole host
of areas that we need to pursue.
Mr. Connolly and I have been in brief discussion. We are
going to look at some of the legislation that I helped craft
and he is interested in, see what we can do to enhance that
language. We would appreciate from you your recommendations,
anything statutorily, any empowering OMB or GSA that is needed.
Ms. Norton raised the question that some authority has been
given, but nothing done. We probably need triggers to make that
happen. And then Mr. Connolly has also cited the sensitivity,
when we dispose of or deal with these federal properties, to
where they exist, and the local and State interests that are
involved and recognizing them, so a host of issues.
But they have called votes, so I think we already got
unanimous consent that we would leave the record open. We will
have additional questions to submit to you.
Ms. Norton. Mr. Chairman, could I just say one thing? Dr.
Robyn indicated that she wasn't using this flexible authority
because of scoring. She is not talking about CBO scoring. The
Administration internally could deal with that scoring from
OMB. So I just want to put it on the record. When we hear
scoring, everybody up here thinks you mean CBO, and that is not
what you mean. You mean your own scoring.
Ms. Robyn. OMB and CBO tend to be in lockstep on scoring
issues. There are cases where it is a CBO call; there are cases
where it is an OMB call. And I am not criticizing it.
Mr. Mica. Well, when that issue was brought up, in fact,
Mr. Connolly and I did have a brief discussion. We need to look
at that and, actually, our committee has jurisdiction. So if
there is some question or problem or lack of proper
interpretation of scoring, then we need to make certain that it
is defined so that we can get the job done. So that is part of
our responsibility and, fortunately, it falls within the
jurisdiction of our committee. So we will be working on that.
Mr. Connolly?
Mr. Connolly. Mr. Chairman, I just want to thank you. This
is our first hearing of this new subcommittee, and I think you
have set a tone of collaboration, cooperation, and
bipartisanship. I and my staff look forward to working with you
and your staff. I think we are going to make some music
together. Thank you so much.
Mr. Mica. Well, thank you. We will follow up together. This
is, again, just a small focus on the issue of, again, federal
real property for the tenth year appearing on the high risk
report of GAO. We need to not just talk about it, do something
about it, and we are both committed to that. I thank Mr.
Connolly.
I thank our witnesses also for being with us and the staff
on both sides of the aisle for their work.
There being no further business before this Subcommittee on
Government Operations, this hearing is adjourned. Thank you.
[Whereupon, at 3:20 p.m., the subcommittee was adjourned.]
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