OMB to flesh out details of civilian BRAC effort

Thursday - 4/7/2011, 7:28am EDT

WFED's Jason Miller

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By Jason Miller
Executive Editor
Federal News Radio

The Office of Management and Budget will submit its legislative proposal to Congress by the end of April detailing how it wants to reshape the way agencies get rid of excess or underutilized property.

Danny Werfel, OMB's controller, told members of the House Transportation and Infrastructure Subcommittee on Economic Development, Public Buildings and Emergency Management Wednesday the proposal leans heavily on the Defense Department's Base Realignment and Closure (BRAC) initiative.

"Like BRAC, the proposal would establish an independent board of experts to expedite disposal of a selection of unneeded properties and identify opportunities to consolidate agency offices," Werfel said. "The CPRA Board would present recommendations to Congress on bundles of identified properties in the greater federal inventory to be voted on in an up or down manner. Similar to BRAC, the process also streamlines the current authorities that are involved in any disposal or consolidation of properties identified by the board."

President Obama offered a high level view of the Civilian Property Realignment Act (CPRA) in the fiscal 2012 budget request sent to Congress in February. The administration estimates this effort would help dispose of more than 14,000 excess or underutilized properties and end up with $15 billion in savings or cost avoidance for agencies. Werfel said since last June agencies have saved or avoided paying $1.7 billion in property upkeep costs, and are on track to save $3 billion by 2012.

"We are working to flesh out some of the details and questions, but I don't want to comment before we submit it to Congress," he said after the hearing. "I think this is a bill that is important for everyone to look at closely. Ultimately the type authorities that the board would have would be to submit bundled proposals for congressional consideration for an up or down vote. I think we would be in a better place if there's real close consideration of this framework going forward."

Spending money to save money

Werfel said the proposal would include how OMB wants to use the $87 million request to jumpstart the process and what legislative changes are needed make the disposal of federal property easier and faster.

"There are more than 20 steps in the process required to sell or otherwise dispose of any given federal property," he said. "There are good reasons why these steps exist; however, it does not make sense to apply the steps uniformly-it is inefficient to use the same process to sell a small warehouse in a rural location as is used to sell an office building in a downtown urban setting."

Werfel said the new process would accelerate the way in which the government chooses what to do with a property, and expedite the implementation of recommended disposals or consolidations for those properties identified by the board.

"This approach eliminates the one-size-fits-all process that exists today," he said.

The proposal also will include a request for agencies to keep about 40 percent of the savings to reinvest in future property disposal efforts. Werfel said this would make the $87 million a one-time request and the fund would be self-sustaining in the out-years.

"There are many upfront costs agencies incur when disposing of properties or realigning space, such as for moving expenses, reconfiguring space, environmental remediation, etc.," he said. "However, in many cases, agencies do not benefit financially from the sale of property by retaining some of the proceeds. Therefore, it can end up costing more money to sell a property than to maintain it in a vacant state from year-to-year, even when there are obvious long-term savings that could be achieved. On top of this disincentive, often an agency does not have the upfront capital to cover the short-term costs."

The other 60 percent of the savings would go toward deficit reduction.

OMB wants the new process also to help overcome a third barrier: political influence. Similar to BRAC, CPRA's board would receive recommendations from agencies on which properties to get rid of. After doing their own research, the board would submit suggestions to OMB as an entire package, not individually.

OMB then would submit the recommendations in their entirety to Congress, which would have 45 days to consider them.

Congress would vote on the entire set of recommendations and couldn't pick and choose which ones they like.

"The BRAC process proved that this approach can overcome the challenge posed by competing stakeholders that makes the typical one-by-one property disposal difficult," Werfel said.