Lawmakers Press Federal Real Estate Officials On Reduction Efforts As Key Deadline Approaches

After a chaotic year of efforts to shrink the federal real estate footprint, the government is still left with a huge amount of unused space to offload.

As a deadline for that effort approaches, lawmakers at a House Transportation and Infrastructure subcommittee hearing Thursday pressed administration officials on how they will ensure the next phase of reorganizing the federal footprint proceeds in a timely and effective manner. 

Answering their questions were three officials focused on assessing and addressing the federal footprint: acting Public Buildings Service Commissioner Andrew Heller, Government Accountability Office Managing Director Heather Krause and Public Buildings Reform Board Member Michael Capuano.

Heller, who has been with the agency since 2017, was tapped to head PBS in August, and Thursday was his first time testifying before Congress.

“While the state of federal real estate continues to face an uphill battle, the policies of this Congress and this administration have and will continue to accelerate this important corrective work,” Rep. Scott Perry, who chairs the subcommittee, said in his opening remarks. 

Next month is the deadline for agencies to report data on their space utilization to the General Services Administration. The reports will provide key pieces of information to determine how the agency will proceed in rearranging the federal office puzzle. 

The data gathering is required under legislation then-President Joe Biden signed into law in January. It says that if agencies are found to be using less than 60% of their space, they are required to come up with a consolidation plan to reach that threshold.

“We want to make sure that the process stays on track,” Perry, a Republican from Pennsylvania, said after asking if the committee could access preliminary utilization data from the agencies. 

The government shutdown this fall is causing a delay in the full release of that data, but Heller said it would be out by the end of March. 

Members of Congress also raised concerns about staff cuts at the GSA’s Public Buildings Service. 

Rep. Rick Larsen, a Democrat from Washington state, said that while PBS had 5,655 full-time employees at the beginning of the year, the current count is 3,126. 

“Are you able to get your work done?” Larsen asked Heller.

“The USE IT Act gave you work so that we could get to the right size of the footprint,” he added. “But do you have the people you need?” 

Heller said he is confident that if the agency didn’t have enough people, it would be able to hire more, either permanent employees or contractors.

“We are certainly going to be staffed in a way that enables us to deliver our services effectively,” Heller said. 

Larsen also raised concerns about a reorganization that PBS undertook in October and said he was unclear how the new structure worked. 

“PBS had 11 distinct geographic regions, but after a reorganization, PBS is now structured ‘based on integrated functional operations, which are essentially managed with a portfolio structure that continues to support a geographic presence nationwide,’” he said in his opening remarks.  

“What does that mean? I don't know.” 

GAO’s Krause, who works on a team that evaluates the government’s physical infrastructure issues, said the GAO is studying the PBS reorganization and will release its findings and recommendations early next year. 

“The office plays a critical role in not only serving tenant agencies but also helping to improve the efficiency of the federal government's vast real property holdings,” she said. “Given that, it is imperative that PBS reorganization be a success.”

At the hearing, members also continued to push for more transparency from the GSA on what its real estate portfolio looks like so that Congress can provide adequate oversight. 

“We get leased prospectuses. We get scattered updates. We do not get a regular comprehensive report on the Public Building Service portfolio,” said Rep. Greg Stanton, a Democrat from Arizona. 

“For a system this large, this expensive and this central to the functioning of government, that blind spot is unacceptable.” 

While most of the discussion revolved around work that the GSA still has to do in the coming months, Heller also gave an update on what the agency has executed this year. 

He said the agency disposed of 90 buildings, reducing its portfolio by 3M SF, generating $182M in proceeds and avoiding $415M in repairs and operating expenses. It also avoided $730M in costs through lease negotiations and reductions.  

He also said that the GSA has identified 45 more assets for disposition, which, if executed, would reduce its inventory by 15M SF. 

On the GSA’s part, Heller was asking Congress for something too: money to execute its rightsizing. 

Congress allocated $250M for the GSA’s optimization program last year, and the agency is asking for $365M more this year. Meanwhile, Heller said the agency has requested access to $193M that was garnered through building dispositions.  

“Our issue is that we need to get access to that funding to make some of these relocations happen so that we can dispose of the assets effectively,” he said.