Agency success breeds new real property disposal goals

Friday - 10/21/2011, 5:41am EDT

Jason Miller, Federal News Radio

Download mp3

The White House is increasing the pressure on agencies to get rid of excess or unused real property.

But it's not because agencies have failed; rather it's because they have been so successful.

OMB controller Danny Werfel said agencies now will be expected to save or avoid spending $3.5 billion by the end of fiscal 2012, up from the $3 billion goal President Barack Obama set in a June 2010 executive order.

"We are able to demonstrate agencies have executed $1.5 billion in savings since the Presidential directive," Werfel said in an interview with Federal News Radio. "That's great news. To us, it shows us we are on track."

Since last March, agencies have sold off or got rid of 1,400 assets and disposed of a total of 3,200 since the president set the goal last year.

Agencies also have found 1,500 new pieces of property to sell, Werfel said, ranging from buildings and land to a storage shed in a national park.

OMB updated its map of excess properties on Thursday, a website that tracks agency spending and savings initiatives.

"The fact we are getting rid of assets on the list is important progress. The fact we are adding assets to the list of excess assets is important progress," Werfel said. "We really want agencies managing their real-property inventory very aggressively and if they are finding properties are underutilized or mission critical, the fact they are being aggressive in moving them onto this excess list is an important part of our improvements in our performance."

Better space management

The Energy and Agriculture Departments have almost reached their 2012 goals. Energy has achieved $287 million of its $375 million goal, while USDA has reached $279 million of its $300 million goal.

But other agencies still have a long way to go. The Justice Department has only saved $24 million out of the $335 million it committed to, while the Homeland Security Department avoided spending $48 million out of the $260 million it committed to.

OMB's data also show most of the $1.5 billion in savings — $854 million — came from better space management of agency buildings. That includes which includes lowering operating costs through:

  • Renegotiating or eliminating leases
  • consolidating offices
  • Reducing square footage through techniques such as reduction in office and work station sizes
  • Moving from leased to federally-owned space
OMB also identified 1,400 properties agencies got rid of this year, including a 1 million square foot Brooklyn warehouse that sold for $10 million and a Bethesda, Md. office building that sold for more than $12 million.

Property 'SWAT Teams'

Werfel said a lot of the credit for the early success goes to the Federal Real Property Advisory Board made up of six or seven chief financial officers and agency real-property experts.

"We're kind of like a SWAT team," he said. "We've worked with each agency, unpacking their inventory, doing deep-dive analytics — and not just within each agency's inventory and advising each agency — but looking across agencies and looking across property types. We are looking at warehouses across agencies. We are looking at office buildings and searching and combing for opportunities that may not be obvious on first blush."

OMB set up the advisory board in May to help address legal and policy challenges, while Congress works a reform bill through its processes.

The advisory board is also responsible, in part, for the increased goal for 2012.

High-valued buildings on sale

Werfel said the board found several high-valued office buildings that could bring in hundreds of millions of dollars or more, including one in the Georgetown section of Washington.

"That building has not been utilized going on 11 years," he said. "We can no longer afford to that anymore. We have to be able to get rid of these assets more quickly."

The White House submitted a legislative proposal to create a civilian property disposal commission earlier this year, and two lawmakers — Rep. Jeff Denham (R-Calif.) and Sen. Scott Brown (R-Mass.) — introduced legislation to create the panel.

The Transportation and Infrastructure Committee approved Denham's legislation earlier this month. Brown's bill is before the Committee on Environment and Public Works.

Obama included civilian property disposal reforms as part of his recommendations to the congressional supercommittee. And Denham sent a letter Thursday to the members of the supercommittee asking for his bill to be included in final report as well.

Brown has not yet sent a letter and an email to his office asking if he plans to was not immediately returned.