GAO: More detail needed from GSA on swap-construct exchanges

Tuesday - 8/26/2014, 4:13pm EDT

The General Services Administration needs to do a better job of making it clear what it has to offer and what it hopes to gain when it solicits for a "swap-construct" exchange for real property. That's according to a new report from the Government Accountability Office.

Swap-construct exchanges allow GSA to swap the titles of federal properties determined to be underutilized for private sector construction services or constructed assets.

GSA has completed just two swap-construct exchanges since 2000. In both cases, GSA swapped underutilized properties for parking garages. The private companies that made the swaps told GAO the exchange took much longer than expected, three years in one case and five years for the other.

GSA has proposed six swap-construct exchanges since 2012 and, after reviewing proposals, it is actively pursuing three.

The respondents to the three proposals that GSA decided not to pursue told GAO they were concerned about the lack of detail from the agency about how much investment and how much construction would be needed to make the exchanges viable.

"The swap-construct approach can help GSA address the challenges of disposing of unneeded property and modernizing or replacing federal buildings, but various factors could affect future use of the approach," GAO wrote in its report. "For example, swap-construct can require developers to spend large sums on GSA's construction needs before receiving title to the federal property used in the exchanges. GSA's solicitations have not always specified these construction needs. Consequently, developers may be unable to provide meaningful input, and GSA could miss swap-construct opportunities. Further, the viability of swap-construct exchanges may be affected by specific market factors, such as the availability of alternative properties."

GAO recommended that GSA supply more detailed information, wherever possible, about what it is seeking from a swap-construct exchange. Also, it should develop criteria for determining when it would be best to solicit market interest in such exchanges.

One of the potential swap-construct exchanges GSA is pursuing is for the FBI headquarters in Washington, D.C. GSA recently announced that it had narrowed its choice to two properties, one at the Greenbelt Metro and Landover in Prince George's County, Maryland, and the other the GSA Franconia Warehouse Complex in Springfield, Virginia.

The agencies say the consolidation is an effort to shrink the FBI's property footprint and save hundreds of millions of dollars.

Currently, the FBI has more than 3 million square feet of office space in more than 20 leased locations.

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