House committee mulls federal property sales

Thursday - 7/28/2011, 5:15am EDT

This story has been updated

By Emily Kopp
Reporter
Federal News Radio

The House Oversight and Government Reform Committee held a hearing on what sounded like a good idea: The federal government would sell off its 14,000 excess properties for some much-needed cash.

But it's not clear whether the effort required to put properties on the market and sell them would bring in enough money to justify the preparation time and resources required.

Earlier this year, the Obama administration proposed a BRAC-like commission to evaluate civilian properties in a data-driven and impartial manner. It estimated the federal government could save $15 billion over five years by overhauling its property portfolio through sales of unwanted property and smarter use of others.

Theresa Gullo, deputy assistant director for budget analysis at the Congressional Budget Office, disputed the administration's estimates. The properties listed as excess or unwanted were not worth much money, she testified Wednesday.

"Gaining billions of dollars from their disposal is unlikely," Gullo said. She noted that most of those properties were either slated for demolition or owned by the Defense Department and not covered by the proposal.

The administration acknowledged that, to reach their estimate of $15 billion in savings, the federal government would have to evaluate and sell many more properties that are currently underutilized. Gullo agreed that selling those types of property would generate more income, although it would be a more complicated thing to do.

Furthermore, the administration's plan would allow agencies to keep 40 percent of proceeds from a property sale as an incentive to take the time needed to unload the property.

That measure may appeal to agencies but would not help shrink the federal deficit, Gullo said.

"We've seen that with the BRAC process: BRAC has surely resulted in consolidations and it's certainly resulted in lower [operating and maintenance] costs," she said. "But you don't see that in [operating and maintenance] spending in the Defense Department budget. It has continued to come up."

She noted that BRAC, the Base Realignment and Closure process that the Defense Department uses to modernize its real estate holdings, was not established for the purpose of making or saving money. In fact, she said, sales of more than 350 military installations have generated less than $2 billion dollars.

At least three congressmen and one senator have proposed bills to streamline disposal of civilian property. Congressmen Jason Chaffetz (R-Utah), Mike Quigley (D-Ill.) and Jeff Denham (R-Calif.) explained their plans to the committee.

The General Services Administration (GSA) or another agency must now evaluate any environmental or community concerns involving surplus buildings. For example, a property may be sold below market value to local governments to revitalize a community, or given to homeless shelters. The entire process takes several months.

The House members' bills contain provisions to shorten the time it takes to prepare federal buildings for sale, provide incentives to agencies to unload their excess property and insulate the process from political and other outside interests. Quigley's measure would also put information online in an effort to increase transparency. Denham, who chairs the subcommittee that oversees public buildings, advocated for a civilian BRAC-style commission similar to the Obama administration's plan.

Committee Chairman Darrel Issa (R-Calif.) had a mixed reaction.

"Their desire for speed, because speed means we save money sooner, has to be offset with the consideration of the best good, not just the highest dollars," Issa told other committee members. He said he would look at blending some of the ideas in the three House bills with others.

In the Senate, Sen. Tom Carper (D-Del.) also has proposed legislation.

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