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Obama to shed federal office space

May. 20, 2010 - 06:00AM   |  
By TIM KAUFFMAN   |   Comments
President Obama, shown here speaking at a May 19 news conference, will issue a memorandum as early as June requiring agencies to re-examine their real estate footprints and identify opportunities to dispose of properties that are unneeded or not being used to their full capacity, a spokesman for the Office of Management and Budget told Federal Times.
President Obama, shown here speaking at a May 19 news conference, will issue a memorandum as early as June requiring agencies to re-examine their real estate footprints and identify opportunities to dispose of properties that are unneeded or not being used to their full capacity, a spokesman for the Office of Management and Budget told Federal Times. (Mandel Ngan / Agence France-Presse)

President Obama soon will order agencies to get rid of office buildings and other properties they no longer need, Federal Times has learned.

Federal agencies are holding on to more than 20,000 excess assets from office buildings and labs to warehouses and runways that could be sold to generate additional revenue. In addition, agencies have identified more than 65,000 properties that are partially or completely vacant but haven't been deemed excess, which would allow them to be sold. The properties are valued at more than $1.2 billion.

"Currently, federal agencies have little or no incentive to dispose of excess real property, and the time it takes to get an asset off the federal inventory is considerable," Office of Management and Budget spokeswoman Jean Weinberg said in a statement to Federal Times.

Obama will issue a memorandum as early as next month requiring agencies to re-examine their real estate footprints and identify opportunities to dispose of properties that are unneeded or not being used to their full capacity, Weinberg said.

The new policy will require agencies to make a "significant reduction" by 2012 in how much they're paying to rent, maintain and otherwise occupy space, said Dennis Goldstein, director of asset management at the General Services Administration, which has been working closely with OMB to develop the initiative.

And agencies will have to make difficult decisions about how much space employees need to do their work, Goldstein said at last week's Federal Real Property Association's annual conference in Washington. For instance, agencies could require more employees to telework or could establish shift schedules that would allow two or more employees to share desks, cubicles or offices.

The new policy builds on efforts over the past several years to accurately account for facilities and identify opportunities to streamline space requirements, said Greg Alevras, vice president of sales for Archibus, which offers software and other services to help agencies manage their real estate portfolios.

Alevras said many of his customer agencies, including the IRS and Federal Aviation Administration, have been exploring alternative workplace strategies such as telecommuting to reduce their space needs. Newer facilities also are being designed smarter, so that interior spaces can be adapted easily to contract and expand as needed.

Infrequently used conference and training rooms account for much of FAA's unneeded space, said Carolyn Sanders, the agency's chief information officer for regions and center operations. By consolidating those rooms and using them for multiple purposes, FAA could convert the freed-up space for employee workstations. That, in turn, would allow FAA to end leases at some smaller locations that are costing more than the agency can justify spending.

In an interview, Sanders said FAA could save additional space by establishing shared workstations for telecommuting employees who report to the office infrequently.

But getting buy-in from managers will be difficult, she said.

"Giving up space is quite challenging," Sanders said. "It's changing the mindset. You can work anyplace, anyhow, anyway, but somebody needs that mindset."

The Obama administration's effort builds on work by the Bush administration to help agencies shed their excess properties, which have long been a drain on the federal budget.

Between 2004 and 2009, agencies disposed of $9 billion in unneeded properties. That dollar figure represents plant replacement value, which is the amount of money it would cost to replace a facility in its existing location.

The Homeland Security Department's Immigrations and Customs Enforcement bureau has just launched an effort to consolidate 351 leased office spaces in 55 major metropolitan areas down to one location per city. The new locations will include a mix of federally owned and leased spaces.

Some locations will gain space, while others will be downsized to meet current and projected work requirements, said Patricia Wallis, director of asset management at ICE.

ICE projects it will save $200 million in the next 10 years through reduced rents and efficiencies gained from consolidating employees now scattered about a given city, she said.

Still, there is an upfront cost. ICE received $50 million this year to begin consolidating the first few locations, and it's requesting another $70 million for fiscal 2011.

NASA also is considering what it would take to cut 20 percent of its 4,700 assets, which could include everything from offices and warehouses to roads and shipping ports.

Many of NASA's buildings are between 40 and 50 years old and are in various stages of disrepair because the facilities have not been maintained appropriately, said Richard Keegan, deputy associate administrator of NASA's mission support directorate.

NASA ultimately would like to transition to a smaller, more efficient property footprint that would be less costly to repair and maintain. But that will require upfront cash.

"To reduce your operations and maintenance costs in the long run, what you need to do is to consolidate your activities into a smaller and more efficient set of facilities. But that requires an initial investment. The savings accrue after that," Keegan said in an interview.

One challenge for NASA has been trying to determine which facilities are important in the long term as NASA's mission requirements change, said Bill Brodt, a NASA facilities engineer. NASA has been struggling to determine what it will do once the shuttle program is shut down later this year.

The direction has changed three times since 2002.

"Every time we shift direction, some of these facilities we thought we weren't going to need come back as maybes," Brodt said.

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