Dive Brief:

• The office within the General Services Administration responsible for disposing of the federal government’s surplus property has been cut by a third, contributing to the challenges the agency faces as it tries to reduce the cost of operating and maintaining properties the government no longer needs, the U.S. Government Accountability Office says.
• The staff size at the Public Buildings Service dropped from 75 to 48 over the past year as part of an agency-wide reorganization, creating a knowledge gap and driving longer lead times as fewer staff travel longer distances to conduct on-site work before properties can be sold, GAO says in a report to Congress released last week.
• “Asset managers have had to fill in for departed staff on projects outside their regional area of expertise,” the report says. “Reduced staff in different locations combined with lower travel budgets has resulted in fewer visits to properties to confirm critical information on the condition of properties slated for disposal,” it says.

Dive Insight:

The disposition of surplus property among a portfolio of some 277,000 properties has been a federal priority for years as a way for the government to reduce the cost of operating, maintaining and renovating its properties.  

Last year, GSA launched an accelerated disposal program but only a few of the properties out of 47 identified for the program have been sold. As part of the effort, the agency has streamlined its regulations, created a new listing site and taken other steps, but it remains hampered by a complicated process, the report says. 

By law, before it can move to private sale, GSA must give federal agencies a shot at acquiring properties. State and local governments and, in some cases, nonprofits also get a chance to acquire properties if the purpose would have a public benefit, like providing a homeless shelter.

Since 2013, GSA has sold 921 properties, generating $1.4 billion in revenue. The sales also remove the cost of operating and maintaining the properties from the agency’s books. 

Most of the sales were between 2014 and 2015, when GSA helped the U.S. Department of Defense dispose of hundreds of military houses, each one typically selling for under $300,000. In the last few years, the agency has had fewer sales but they’ve tended to be commercial properties that attract higher prices, like a crude helium gas site owned by the U.S. Department of Interior that GSA sold in 2023 for $423 million. 

GSA sold more than 90% of the properties by online auction. Most of the other properties were sold in a sealed-bid process. The handful of remaining properties were sold at live auction or in some other way. 

GSA told GAO its goal is to sell as many properties as possible using the online auction because it’s a low-cost way of attracting bidders from all over the country. 

It takes the agency one year on average, or a median of three years, to sell each property, although there are outliers. One property took 20 years to sell, GAO said.  

Most of the delay happens before the properties go up for sale. It can take years to relocate the people working in the buildings after they’ve been selected for disposition, and time can be needed for environmental remediation or historic preservation processes. 

“Securing funds for an agency to relocate is the most common reason disposals are delayed,” the report says. “Absent secured funding for the agency to relocate, GSA officials said they cannot move forward on disposal of a tenant-occupied property.”

Giving other agencies a chance to acquire a property also tends to delay the process as each agency interested in a property conducts an evaluation. The disposal of a large warehouse, for example, took years because multiple agencies looked at the property. “The delays were due to other federal agencies expressing interest in the property and a request by the city [in which the property was located] to use the site for homeless assistance,” the report says. “Once these options were ruled out, GSA then sold the property about a year later.”

As part of its accelerated disposition program, GSA has started working with private real estate brokers, but it has yet to close a sale with their help. 

GAO recommends GSA develop performance goals for its accelerated sales approach, something it hasn’t done yet, and to use the sales data it’s collecting to help it measure how long future sales can take based on property type. GAO also recommends the federal building management agency improve its data management so it can use the data to inform their efforts. 

“Data-driven reviews can help management determine if strategies are performing as planned or if there is an opportunity to make adjustments to existing methods and drive improvements where performance declines,” the report says.