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Consolidating field offices: big promise, little progress

Sep. 30, 2012 - 03:38PM   |  
By ANDY MEDICI   |   Comments

The Customs and Border Protection agency needed office space in Chicago, so last November it leased 17,000 square feet of unused space in a humming, 267,000-square-foot U.S. Postal Service distribution center near O’Hare Airport.

A typical example of savvy federal efficiency in action?

Hardly. It is an exceedingly rare case of agencies cooperating to cut their infrastructure costs by co-locating offices, experts say. Many agencies share office space in federal buildings — mostly located in large cities across the country — but they typically do little co-locating at the field office level. The Postal Service says the Chicago example is unique — nowhere else does it co-locate with another federal agency.

That, says experts, is a huge missed opportunity to cut costs.

“If [agencies] were willing to invest in move costs, they could save substantial amounts in the near term,” said Chris Roth, international director for real estate company Jones Lang LaSalle.

Roth and other experts say agencies with thousands of field offices, such as the Social Security Administration, Agriculture Department, IRS, the Postal Service and the General Services Administration, which leases field offices on behalf of other agencies, could save hundreds of millions annually by co-locating their facilities on a large scale.

Nevertheless, agencies have hardly budged, largely because of administrative, legal and cultural barriers.

But ever-tightening budgets may finally prompt some action.

“Everyone is in a challenging budget environment, and I think agencies are open to various ideas that will help them trim the bottom line and keep their core business going,” said David Wise, director of physical infrastructure at the Government Accountability Office.

GAO so far has not estimated how big the savings from co-locating facilities could be, Wise said, but he says it would be substantial.

In February, the Postal Service inspector general reported the USPS had 67 million square feet of excess space at postal facilities and 12,356 unmanned or underused retail windows. That would be enough to house 84 percent of GSA’s leased capacity, the report claimed.

The report said taxpayers should be able to go to a post office to get new Social Security cards, renew driver’s licenses and apply for Small Business Administration loans — even from automated kiosks.

Wise said a number of issues stand in the way of co-locations, including:

• A lack of granular data that allows agencies to see what condition their excess or underutilized space is in and how they can best use it.

While the Federal Real Property Council — an interagency working group of real estate officers led by GSA — has uniform standards for reporting data, it does not ask for data that agencies can use to determine where to co-locate, according to Wise.

• A lack of real estate experience at agencies. GSA handles leasing for a variety of agencies, but others do not have the staff or the experience, according to Wise.

• A lack of common leasing standards values that would encourage greater co-location among the larger lease-holding agencies such as GSA, the Postal Service and the Veterans Affairs Department.

Congress would probably have to pass legislation to give agencies the push they need to think about co-location on a large scale, Wise said.

“[Agencies] are willing, but they lack a legislative framework to do it,” he said. Such legislation, he said, would have to give agencies the standards they need and encourage co-location by setting goals.

Sen. Tom Coburn, R-Okla., who has pushed for more co-location between the Postal Service and federal and state agencies, said a September GAO report confirmed the need to boost revenue and reduce space by sharing.

“Allowing the Postal Service to combine offices and services is the kind of decision Congress needs to make to not only save this service, but our economy,” Coburn said in a statement to Federal Times.

There are a few examples of agencies co-locating services. The Naval Health Clinic Great Lakes and the North Chicago Veterans Affairs Medical Center, for example, joined together to create the James Lovell Federal Health Center on Oct. 1, 2010. While it is the only fully integrated VA-Defense Department facility, the departments share space and resources at 32 health care facilities across the country, mostly at military installations, according to VA spokeswoman Josephine Schuda.

To do more, agencies will have to fight a natural bias against sharing space and will need to ensure that any co-locations are done methodically by region, Roth said. They also will need to front some money for renovations and relocations if they want to move forward quickly to co-locate their facilities.

Congress has shown an interest in promoting more interagency co-locating in a number of bills, but none has passed the full Congress. The administration also pushed its own plan last year that would require agency field offices to co-locate into Postal Service facilities wherever possible and would establish a seven-person board to oversee co-location, consolidation and property disposal efforts. That proposal failed to get backing by Congress.

GSA said it is actively working with its client agencies — which include the Social Security Administration and the IRS — to identify co-locating opportunities, according to spokesman Dan Cruz. But the lack of funding for renovations, moving costs and information technology means the process will not happen quickly, he said.

“Given the initial cost of co-locations and consolidations, and due to the length of time for many real estate transactions to come to fruition, the impact of these opportunities will likely be gradual,” Cruz said.

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