[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


     SAVING TAXPAYER DOLLARS IN FEDERAL REAL ESTATE: REDUCING THE 
                      GOVERNMENT'S SPACE FOOTPRINT

=======================================================================

                                (114-22)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
    ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 16, 2015

                               __________

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            COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of 
  Vice Chair                             Columbia
JOHN L. MICA, Florida                JERROLD NADLER, New York
FRANK A. LoBIONDO, New Jersey        CORRINE BROWN, Florida
SAM GRAVES, Missouri                 EDDIE BERNICE JOHNSON, Texas
CANDICE S. MILLER, Michigan          ELIJAH E. CUMMINGS, Maryland
DUNCAN HUNTER, California            RICK LARSEN, Washington
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHAEL E. CAPUANO, Massachusetts
LOU BARLETTA, Pennsylvania           GRACE F. NAPOLITANO, California
BLAKE FARENTHOLD, Texas              DANIEL LIPINSKI, Illinois
BOB GIBBS, Ohio                      STEVE COHEN, Tennessee
RICHARD L. HANNA, New York           ALBIO SIRES, New Jersey
DANIEL WEBSTER, Florida              DONNA F. EDWARDS, Maryland
JEFF DENHAM, California              JOHN GARAMENDI, California
REID J. RIBBLE, Wisconsin            ANDRE CARSON, Indiana
THOMAS MASSIE, Kentucky              JANICE HAHN, California
TOM RICE, South Carolina             RICHARD M. NOLAN, Minnesota
MARK MEADOWS, North Carolina         ANN KIRKPATRICK, Arizona
SCOTT PERRY, Pennsylvania            DINA TITUS, Nevada
RODNEY DAVIS, Illinois               SEAN PATRICK MALONEY, New York
MARK SANFORD, South Carolina         ELIZABETH H. ESTY, Connecticut
ROB WOODALL, Georgia                 LOIS FRANKEL, Florida
TODD ROKITA, Indiana                 CHERI BUSTOS, Illinois
JOHN KATKO, New York                 JARED HUFFMAN, California
BRIAN BABIN, Texas                   JULIA BROWNLEY, California
CRESENT HARDY, Nevada
RYAN A. COSTELLO, Pennsylvania
GARRET GRAVES, Louisiana
MIMI WALTERS, California
BARBARA COMSTOCK, Virginia
CARLOS CURBELO, Florida
DAVID ROUZER, North Carolina
LEE M. ZELDIN, New York
                                ------                                7

 Subcommittee on Economic Development, Public Buildings, and Emergency 
                               Management

                  LOU BARLETTA, Pennsylvania, Chairman
ERIC A. ``RICK'' CRAWFORD, Arkansas  ANDRE CARSON, Indiana
THOMAS MASSIE, Kentucky              ELEANOR HOLMES NORTON, District of 
MARK MEADOWS, North Carolina             Columbia
SCOTT PERRY, Pennsylvania            ALBIO SIRES, New Jersey
RYAN A. COSTELLO, Pennsylvania       DONNA F. EDWARDS, Maryland
BARBARA COMSTOCK, Virginia           DINA TITUS, Nevada
CARLOS CURBELO, Florida              PETER A. DeFAZIO, Oregon (Ex 
DAVID ROUZER, North Carolina             Officio)
BILL SHUSTER, Pennsylvania (Ex       VACANCY
    Officio)
                               
                               
                               CONTENTS

                                                                   Page

Summary of Subject Matter........................................    iv

                               WITNESSES
                                Panel 1

 Hon. Jeff Denham, a Representative in Congress from the State of 
  California, testimony..........................................     4

                                Panel 2

Hon. David Mader, Controller, Office of Management and Budget:

    Testimony....................................................     6
    Prepared statement...........................................    28
Norman Dong, Commissioner, Public Buildings Service, U.S. General 
  Services Administration:

    Testimony....................................................     6
    Prepared statement...........................................    32
David J. Wise, Director, Physical Infrastructure Issues, U.S. 
  Government Accountability Office:

    Testimony....................................................     6
    Prepared statement...........................................    38

                                Panel 3

Maria Foscarinis, Executive Director, National Law Center on 
  Homelessness and Poverty:

    Testimony....................................................    22
    Prepared statement...........................................    51

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Hon. Jason Chaffetz of Utah......................................    26

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 


 
     SAVING TAXPAYER DOLLARS IN FEDERAL REAL ESTATE: REDUCING THE 
                      GOVERNMENT'S SPACE FOOTPRINT

                              ----------                              


                         TUESDAY, JUNE 16, 2015

                  House of Representatives,
              Subcommittee on Economic Development,
        Public Buildings, and Emergency Management,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 1:05 p.m. in 
room 2167, Rayburn House Office Building, Hon. Lou Barletta 
(Chairman of the subcommittee) presiding.
    Mr. Barletta. The committee will come to order. The purpose 
of today's hearing is to explore how we can save billions of 
dollars by shrinking our Federal real estate footprint. I think 
we have a tremendous opportunity this year to come up with a 
bipartisan bill that gains the support of the House, the 
Senate, and the President. We have the same goal: to get excess 
and underutilized properties out of the hands of Government and 
onto the local tax rolls or local service providers. This can 
be a win-win solution for the taxpayer, local governments, and 
homeless assistance providers.
    First let me thank Chairman Chaffetz of the Committee on 
Oversight and Government Reform for working closely with this 
committee on this important issue. He planned to be here to 
testify, but, unfortunately, was called at the last minute to 
work on another crucial issue. Without objection, I would like 
to submit his written statement for the record.
    [No response.]
    Mr. Barletta. I also want to thank Chairman Denham for his 
work and leadership on this issue. And, finally, I want to 
thank all of our witnesses and particularly OMB [Office of 
Management and Budget] Controller Mader for being here today.
    We know reducing the Federal real estate footprint is a 
critical issue and can result in real and significant savings 
for the taxpayer. For example, since the beginning of last 
Congress, our committee has saved more than $2.5 billion by 
approving leases and other projects that reduce and consolidate 
space. That was no small feat, and it took this committee, 
working with GSA [General Services Administration] and OMB, to 
realize those savings.
    Our subcommittee has hosted a series of roundtables, 
working with GSA, to send the message of optimizing space and 
replacing expiring leases with good, long-term deals. In some 
ways, the leased side of Federal real estate is easier to 
address. When leases expire, an opportunity is created to 
reduce space and negotiate good lease deals to lower costs. 
And, with 100 million square feet of leased space expiring in 
the next 5 years--50 percent of GSA's leased inventory--the 
opportunity for taxpayer savings is huge. In light of that, I 
recently introduced the Public Buildings Reform and Savings 
Act, which will create a leasing pilot program GSA can use to 
cut the best deals for the taxpayer.
    Today, however, we are focusing on a much more difficult 
problem: getting rid of Federal real estate we no longer need. 
According to the most recent Federal Real Property Summary, the 
Government owns more than 254,000 buildings, comprising 2.5 
billion square feet of space, costing the taxpayer $14.4 
billion annually. However, we are also told in the same summary 
that only 5,000 buildings are actually underutilized, despite 
the fact that 27,000 assets are labeled as ``inactive.'' It is 
clear the data needs improving, but it is also clear, based on 
work by GAO [Government Accountability Office] and others, that 
there are a lot of vacant or underutilized buildings across the 
Nation that go unreported.
    We don't have to look far to see prime examples of this 
right here in Washington. Just down the street sits the vacant 
Cotton Annex on land worth more than $100 million. On 
Pennsylvania Avenue it took more than a decade and an act of 
Congress to turn the money-losing Old Post Office building into 
a profit center for the taxpayer. The West Heating Plant in 
Georgetown sat vacant for more than a decade, and it wasn't 
until this committee shined a spotlight on it that GSA finally 
sold it for almost $20 million.
    When these properties sit vacant or underutilized, no one 
wins. The agencies and taxpayer pay to maintain them, no tax 
dollars are infused into the local economies, and they are not 
made available for sale or even screened for other purposes, 
such as to serve the homeless. Previous estimates indicate we 
are wasting more than $1.6 billion a year on these properties, 
but if GAO reports are any indication, this is probably a low 
estimate.
    Today we hope to hear from our witnesses what is the scope 
of the problem, what are the obstacles to reducing the real 
estate footprint, and how do we overcome those hurdles. A few 
challenges we have seen include upfront costs to make 
properties available, including money to move people out of 
underutilized buildings, land-banking--agencies holding on to 
valuable but vacant properties, because they think someday they 
will need them--and a disposal process that is cumbersome, 
time-consuming, and keeps properties from being sold. Chairman 
Chaffetz and Chairman Denham in the past have each offered 
proposals to address these issues, and I am pleased to see them 
working together on this issue.
    The administration proposed legislation in 2011 and 
reiterated the importance of that legislation in the fiscal 
year 2016 budget. In fact, in the fiscal year 2016 budget, the 
administration states that, despite the progress made through 
efforts like Freeze the Footprint, an independent board would 
allow us to achieve long-desired opportunities for reform and 
deficit reduction.
    I want to again thank all the witnesses here today. We have 
a great opportunity to finally get a bipartisan bill through 
Congress and address this longstanding problem.
    I understand we have some Members who sit on our full 
committee who may want to participate in today's hearing. I ask 
unanimous consent that Members not on the subcommittee be 
permitted to sit with the subcommittee at today's hearing, 
offer testimony, and ask questions.
    [No response.]
    Mr. Barletta. Without objection, so ordered. Thank you.
    I now call on the ranking member of the subcommittee, Mr. 
Carson, for his opening statement.
    Mr. Carson. Thank you, Chairman Barletta. Welcome to this 
afternoon's hearing. Today we will examine the GSA's 
implementation of the administration's policy on restraining 
the growth of the Federal real estate footprint. We will also 
look at possible impediments to improving these efforts.
    In 2003, the GAO placed real property management on its 
list of high-risk governmental activities, where it remains 
today. Both this committee and GAO have repeatedly expressed 
serious concerns about how Federal real property has been 
managed. I am pleased, therefore, that the administration has 
made a concerted effort to right-size the Federal real estate 
portfolio.
    First, the Office of Management and Budget--OMB--issued a 
memorandum requiring all Federal agencies to freeze their 
Federal real estate footprints.
    Secondly, the administration proposed legislation to create 
a board that would operate similar to the Base Closure and 
Realignment Commission, or BRAC, to expedite the sale of 
underutilized and excess properties.
    Thirdly, the administration has released further guidance 
that Federal agencies should reduce their footprint. It has 
been very clear that the administration is serious about 
addressing these high-risk activities.
    However, the CBO [Congressional Budget Office] and various 
former GSA officials have raised concerns about the potential 
effectiveness or need for this proposed board. These former 
senior officials have testified before other committees, and 
have consistently questioned whether there is a real problem or 
not. They have questioned whether a significant number of 
underutilized Federal properties actually warrants the creation 
of a new Federal bureaucracy. GAO has also raised concerns 
about reliability of the data, and the Federal Real Property 
Profile [FRPP], which describes most of the real property owned 
by the Federal Government, and is considered by OMB to be a key 
management tool.
    Without a rigorous inventory and analysis, it is impossible 
to know whether the Federal Government is really sitting on 
billions of dollars of underutilized properties, and if there 
is a market for these properties at all. As the Federal 
Government's landlord, GSA has a responsibility to guide 
agencies toward making good decisions that reflect both the 
will of the administration and Congress.
    The Federal Government must make better decisions on how to 
house these Federal agencies. With the advent of hoteling, 
alternate work schedules, and teleworking, it is very possible 
for Federal agencies to have a smaller footprint than ever, as 
the need for Federal workers to be in one fixed location 
decreases.
    I remain open to a legislative fix if that is what is 
necessary to address the real documented concerns about the 
management of real property. However, I also want to ensure 
that any legislation offers the proper protections for the 
current stakeholders in the disposal process, while improving 
the process for disposition of real property. These important 
stakeholders include homeless service providers and 
municipalities eligible for public benefit conveyances.
    So, I am especially interested in whether or not the 
current guidelines are working, as Congress intended, to allow 
homeless service providers an appropriate opportunity to make 
use of surplus or underutilized Federal properties to address 
the devastating problems of homelessness, particularly among 
returning veterans.
    So I look forward to the testimony of today's witnesses to 
help us evaluate the need for legislation to dispose of Federal 
property that might be surplus or underutilized.
    And I yield back, Mr. Chairman.
    Mr. Barletta. Thank you, Ranking Member Carson. On our 
first panel today we have the Honorable Jeff Denham, chairman 
of the Subcommittee on Railroads, Pipelines, and Hazardous 
Materials of the Committee on Transportation and 
Infrastructure. And I ask unanimous consent that our witness' 
full statement be included in the record.
    [No response.]
    Mr. Barletta. Without objection, so ordered.
    Chairman Denham, you are now recognized for 5 minutes.

  TESTIMONY OF HON. JEFF DENHAM, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Denham. Thank you, Mr. Barletta and Mr. Carson, for 
allowing me to testify today. And first let me commend Chairman 
Barletta on his efforts to not only authorize, but also pass a 
bipartisan bill, the Public Buildings Reform and Savings Act of 
2015.
    Your leadership on this issue has helped us not only in 
decreasing our national debt, but also in getting rid of some 
of the Government inefficiency.
    I would also like to thank Chairman Shuster and Chairman 
Chaffetz for working with me on this issue to ensure it 
receives the proper oversight and attention. Reducing our 
Nation's national debt is a bipartisan issue, and I have been 
proud to work over the last several years to not only get a 
bipartisan resolution, but get one that goes across multiple 
committees to get--to garner enough support to actually move 
this along.
    Legislation will reform the Federal property disposal 
process, and would create a nonpartisan, professional board to 
root out waste and inefficiencies in the way that we manage our 
public buildings. The principles of this bill are the driving 
forces behind the effort to redevelop the Federal Triangle, and 
serve as a model for how we manage property, nationwide.
    I first proposed reforming the Federal property disposal 
process at this subcommittee's first hearing in February 2011, 
and the President proposed similar ideas in his 2012 budget. I 
am pleased to see the President has continued his support of 
these reforms, speaking to it not only in his 2011 State of the 
Union speech, but also including it once again in his 2016 
budget that he submitted to Capitol Hill.
    Likewise, I am pleased to have secured the commitment of 
this administration to advance legislation, to work with myself 
and Chairman Chaffetz, to see real reforms actually signed into 
law.
    In recent years the GAO identified billions of dollars of 
waste through mismanagement over buildings, and an overreliance 
on costly leased space to meet long-term housing needs. 
Additionally, both Houses of Congress have included the idea in 
their annual budget documents. I believe the potential to save 
billions of dollars is real.
    To be successful, the board will need to implement five 
principles: first, to consolidate the footprint of Federal real 
estate; second, house more Federal employees in less overall 
space; third, reduce our reliance on costly leased space; 
fourth, sell or redevelop high-value assets that are 
underutilized, or too valuable for housing Federal employees; 
and, fifth, and most importantly, to dispose of surplus 
property quickly.
    I believe a board of citizens that uses these five 
principles to guide its decisions can see over $15 billion in 
initial savings. To be clear, we are not looking to create a 
fire sale of vacant properties, or overload the marketplace. 
Simply dumping vacant properties on the market is not a long-
term solution.
    Additionally, some Members have talked about this as being 
a BRAC-like process. We have listened to these concerns over 
the years, and continue to work on this legislation. To begin 
with, BRAC relocated thousands of people, families, and entire 
communities. BRAC removed an economic engine from cities across 
the country. This legislation will not relocate one family. It 
will not destroy one single community. Instead, we will bring 
new economic life and development into Federal space that has 
long been neglected.
    Finally, the decision on these properties today belongs to 
OMB. And, through this legislation, will remain with OMB. What 
we would like to do is reshape the way this country manages the 
Federal real estate footprint. At the end of the day, the total 
cost to house the Federal Government is directly proportional 
to how much real estate we hold. To save money, we will have to 
consolidate that footprint. To consolidate, we must house more 
Federal employees in less space. Fortunately, there are 
tremendous opportunities of savings in this area.
    Perhaps one of the greatest areas for taxpayer savings will 
be in the redevelopment or sale of the high-valued but 
underutilized properties. For instance, the ones the chairman 
had talked about, the abandoned and underutilized properties 
here, in DC, the Georgetown West Heating Plant and the Old Post 
Office, they were both vacant and decayed, costing taxpayers 
millions of dollars a year, as they sat idle and unused.
    The first hearing that we held was in the Old Post Office. 
I remember being a new freshman, wearing a California suit in 
the middle of the winter, and it was 32--it was below zero, 
freezing temperatures in that cold building, sitting vacant. I 
know there are some people in here that remember very fondly 
the cold atmosphere of that vacant building that is now being 
redeveloped.
    Through the attention that was paid by this committee, GSA 
was able to sell one and lease the other to private entities 
that will bring new business and economic activity right here, 
to the DC area. There are high-value properties like this all 
across the entire country. We can use this as an example. 
Maximizing value is what we seek to achieve.
    I believe this guiding principle, along with the five 
objectives I have outlined earlier, should help us to redevelop 
and push this legislation along.
    I thank the committee, again, and I look forward to working 
with you on this issue, as we move forward.
    Mr. Barletta. Thank you for your testimony. Your leadership 
and commitment to this issue is critical.
    I will now call our second panel of witnesses. Thank you.
    [Pause.]
    Mr. Barletta. We have with us today the Honorable David 
Mader, Controller, Office of Management and Budget; Mr. Norman 
Dong, Commissioner, Public Buildings Service, U.S. General 
Services Administration; and Mr. David J. Wise, Director, 
Physical Infrastructure Issues, U.S. Government Accountability 
Office.
    I ask unanimous consent that the witnesses' full statements 
be included in the record.
    [No response.]
    Mr. Barletta. Without objection, so ordered. Since your 
written testimony has been made a part of the record, the 
subcommittee would request that you limit your oral testimony 
to 5 minutes.
    Mr. Mader, you may proceed.

TESTIMONY OF HON. DAVID MADER, CONTROLLER, OFFICE OF MANAGEMENT 
    AND BUDGET; NORMAN DONG, COMMISSIONER, PUBLIC BUILDINGS 
  SERVICE, U.S. GENERAL SERVICES ADMINISTRATION; AND DAVID J. 
WISE, DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES, U.S. GOVERNMENT 
                     ACCOUNTABILITY OFFICE

    Mr. Mader. Thank you, Chairman Barletta, Ranking Member 
Carson, and members of the committee and subcommittee, for 
inviting me to testify and update the subcommittee on the 
changes that we are implementing to improve the Government's 
real property management, and overall efficiency of the real 
property portfolio.
    I would like to update you on the status of the initiatives 
that I mentioned when I testified last July in front of the 
House Subcommittee on Government Operations regarding the 
administration's effort to improve the management of the 
Government's real property portfolio. Over the past 11 months 
we have continued to implement actions that will improve and 
transform the way the Federal Government manages its real 
property.
    Our plan includes four key components: first, develop and 
implement a strategic framework that will guide agencies' 
management of their real property portfolios over the next 5 
years; second, develop and implement Governmentwide performance 
metrics that will identify efficiency opportunities at the 
agency level, and to assess the performance of individual 
agencies; third, develop a new management tool within the 
current Federal Real Property Profile to enhance the utility 
and quality of that data; fourth, modifications to existing 
statutes to increase the pace and number of property disposals 
which will decrease the amount of resources expended on 
maintaining excess and underutilized properties.
    The President's 2016 budget invests in our federally owned 
facilities to ensure that mission execution is optimized at the 
lowest possible cost, including $2.4 billion over the fiscal 
year 2015 enacted level to support critical construction and 
renovation projects, as well as opportunities for consolidation 
in the Federal building inventory.
    We have completed or made significant progress on three of 
the four components. We issued the National Real Property 
Strategy in March of 2015, which builds on past actions and 
results to define the strategic framework that agencies will 
use to manage their portfolio. The framework will freeze the 
growth of the inventory, measure performance, and identify 
opportunities to improve efficiency in data quality, and, 
finally, to reduce the size of the inventory by prioritizing 
actions to consolidate, colocate, and dispose of properties.
    To implement the national strategy, we have issued a new 
policy that provides a set of agency-specific performance 
metrics. The Reduce the Footprint policy, issued also in March, 
requires agencies to implement a 5-year plan to reduce their 
real property portfolios. The Reduce the Footprint policy 
prioritizes the disposal of unneeded and inefficient properties 
by requiring agencies to set annual square-foot disposal 
targets for all types of buildings. It also requires agencies 
to issue office space design standards by March of next year, 
2016, and to use the standard as a design criteria, going 
forward.
    The last component of our plan, potential modification to 
existing statutes, could increase the pace and the number of 
properties disposed of through sale, demolition, and public 
benefit conveyance. These modifications could include, but are 
not limited to, agency retention of some of the sale proceeds 
for reinvestment in additional disposals, expanded authority 
for GSA to support agencies' work to prepare properties for a 
declaration of excess, and relief from some of the aspects of 
the public benefit conveyance process.
    All of the components of our plan, except, of course, for 
the potential modifications to the existing statutes, will be 
implemented by the end of this fiscal year, 2015. We believe 
these actions will significantly improve the management of real 
property and deliver efficiency gains over the next 5 years. 
The real property program has achieved results in 2014, and we 
will continue to build on this achievement.
    We reduced the Freeze the Footprint baseline by 11.2 
million square feet in 2014, and this result builds on the 
10.2-million-square-foot reduction we achieved in 2013, so in 2 
years combined we reduced 21 million square feet of office and 
warehouse space.
    It is important to note that, in order for the Government 
to reduce our footprint, we require funding to make the 
necessary reconfigurations and relocations that will result in 
out-year cost avoidance. We have made progress. However, 
significant opportunities remain.
    One significant challenge has been the historically low 
levels of funding appropriated to the GSA Federal Buildings 
Fund. The GSA is leading the Federal effort to both invest in 
Federal facilities and consolidate space to reduce costs and 
optimize efficiency, avoiding tens of millions of dollars in 
annual lease costs. Recent funding levels for the GSA and other 
Federal landholding agencies have led both to facility 
deterioration, as well as missed opportunities to consolidate 
and reduce operating costs. As I stated in my hearing last 
summer, I think we need to think about the concept of investing 
to save.
    We look forward to working with the subcommittee on 
legislation that will enable us to make even greater progress 
by improving the efficiency of the Governmentwide portfolio and 
accelerating the pace of property disposals over the next few 
years.
    Thank you for the opportunity of testifying today, and I 
look forward to answering your questions.
    Mr. Barletta. OK, we have--they have just called votes. We 
have a two-vote series. So we are going to recess until we can 
return from these votes in about 20, 25 minutes.
    The subcommittee is in recess.
    [Recess.]
    Mr. Barletta. The meeting will come to order. We will pick 
up where we left off.
    Mr. Dong, you may proceed.
    Mr. Dong. Good afternoon, Chairman Barletta, Ranking Member 
Carson, and members of this committee. Thank you for inviting 
me to the hearing this afternoon. Our mission at GSA is to 
deliver the best value in real estate, acquisition, and 
technology to the Federal Government. And, within the Public 
Building Service, our goal is to support agency real property 
requirements, but in the most fiscally responsible way.
    We recognize that excess spending on real estate comes at 
the expense of more mission-critical activities. And, as 
agencies spend less on rent, they can devote more of their 
limited dollars to support mission requirements.
    To do this, we are consolidating space and improving space 
utilization. We are taking a more disciplined approach to 
leasing. We are disposing of unneeded assets. We are leveraging 
our exchange and outleasing authorities, and we are supporting 
OMB in the Governmentwide effort not just to freeze, but to 
reduce the Federal footprint.
    On the issue of space utilization, we are working with 
Federal agencies to identify opportunities to colocate, 
consolidate, and reduce the footprint. Since fiscal year 2014, 
Congress has provided $70 million each year to support agency 
consolidation projects. Many of these projects reflect agencies 
moving out of expensive leased facilities into federally owned 
space.
    In Minneapolis, for example, we are partnering with HUD 
[U.S. Department of Housing and Urban Development] to move them 
out of leased space into the Federal building in that city. 
Through this process, HUD will reduce its footprint by over 
9,000 square feet, which will save the Government more than 
$700,000 each year.
    And today we are executing dozens of projects that will 
reduce the Federal footprint by almost 800,000 square feet, and 
reduce annual leasing costs by about $50 million. And, given 
significant agency interest in this program, our budget request 
for fiscal year 2016 will help us further reduce our square 
footage, and increase our annual cost savings.
    As we emphasize the importance of federally owned space, we 
will continue to see a significant amount of leasing activity. 
So, our job at GSA is not just to make sure that we are 
reducing the footprint, but also the cost of that footprint. 
And, by embracing greater competition in our leasing 
transactions, we can capitalize on favorable rates that we are 
still seeing in many markets.
    In order to get better leasing rates for the Government, 
GSA is working with our Federal tenants to simplify their space 
requirements and broaden delineated areas to increase 
competition; to extend lease terms to 10 years or longer 
whenever possible, because longer terms usually mean lower 
rates; and to start the planning process at least 36 months 
prior to lease expiration, to allow for competitive 
procurements, and to avoid costly holdovers and extensions.
    We see that whenever we are in holdover or extension, we 
are paying about 20 percent more than we should, on average. In 
recent years, we have made some good progress to reduce the 
number of holdovers and extensions. And, by the end of fiscal 
year 2014, we had only 97 holdovers out of more than 8,700 
leases, which was the lowest figure since 2007.
    On the issue of underutilized property, we are improving 
our efforts to identify assets we no longer need, and to move 
these properties off our books. In fiscal year 2014, GSA 
disposed of 342 properties, Governmentwide, which represented a 
61-percent increase from the year before. And this year we are 
on track to meet our goal of disposing of 3 million square feet 
of excess property, which includes the Metro West Building in 
Baltimore.
    We are seeing some progress here, but we recognize that 
there is much more that we can and should be doing. GSA is also 
leveraging our exchange and outleasing authorities to tap into 
the value of those assets that no longer serve a Federal 
purpose, but still represent significant value to the private 
sector.
    In Southwest DC, we are leveraging the value of our 
regional office building and the Cotton Annex in the Federal 
Triangle complex. Through this exchange project, GSA is seeking 
construction and development services to modernize the rest of 
our headquarters building, and to further the DHS consolidation 
at the St. Elizabeths campus.
    Another example is our long-term lease of the Old Post 
Office building to the Trump Organization, which is 
transforming it into a luxury hotel. This private investment of 
$200 million will preserve this historic building, serve the 
local community, and generate lease revenues for the 
Government.
    I would like to close by discussing how GSA is supporting 
the administration's National Strategy for Real Property. This 
summer, GSA will be working with OMB to review agency plans to 
reduce the footprint. And, through this process, we will build 
upon our work in fiscal year 2015, and will develop a robust 
pipeline of potential projects for disposal, exchange, and 
outlease, beginning next year.
    We have made significant progress in managing Federal real 
property, but we recognize there is much more work that must be 
done. I look forward to working with this committee to improve 
Federal Government management of real property.
    Thank you for the opportunity to testify today, and I look 
forward to your questions.
    Mr. Barletta. Thank you for your testimony, Mr. Dong.
    Mr. Wise, you may proceed.
    Mr. Wise. Chairman Barletta, Ranking Member Carson, and 
members of the committee, thank you for the opportunity to 
discuss our work on how the Federal Government's real property 
management practices could be improved.
    The Government's real property holdings are vast. The 
portfolio comprises hundreds of thousands of buildings, and a 
comparable number of permanent structures. My statement today 
focuses on, one, improvements and challenges in Federal real 
property management; and, two, executive and legislative steps 
that could help the Government address these challenges.
    Since GAO placed Federal real property management on the 
high-risk list in 2003, the Government has given the issue 
high-level attention, including: establishing the Federal Real 
Property Council and the Federal Real Property Profile, which 
is the Government's real property database; implementing the 
2012 Freeze the Footprint policy, aimed at keeping Federal 
office and warehouse inventory at a baseline level established 
using FRPP data; and issuing this past March the 2015-2020 
National Strategy for the Efficient Use of Real Property. The 
strategy includes freeze growth in the inventory, measuring 
performance, and reducing growth through consolidation, 
colocation, and disposal.
    Notwithstanding these positive steps, the Government 
continues to face challenges in managing its real property 
portfolio, including maintaining more real property than it 
needs, relying on leasing when ownership would be more cost-
effective, and making real property management decisions using 
unreliable data.
    Retaining unneeded real property results in significant 
costs to the Federal Government. In July 2014, the 
administration released the first-year results of the Freeze 
the Footprint policy, indicating that it reduced the Federal 
Government's office and warehouse space by about 10 million 
square feet between fiscal years 2012 and 2013, which exceeded 
its goals.
    However, we found that the data behind these results were 
unreliable, resulting in a potential overstatement of the 
progress made. For example, some properties credited as having 
been disposed of by agencies were actually returned to GSA, and 
remain part of the Federal inventory.
    The Government continues to rely heavily on leasing where 
ownership would be more cost-effective in the long run. In our 
February 2015 high-risk update, we reported that the Government 
has demonstrated leadership commitment by trying to consolidate 
high-value leases and smaller leases, as they expire. However, 
we noted that GSA lacked an action plan and transparent data to 
demonstrate progress in achieving this goal.
    Consistent and accurate data are critical to effectively 
manage real property. Despite leadership commitment to improve 
FRPP, the Government continues to face challenges with its 
accuracy and consistency. In 2012, we reported that FRPP data 
did not consistently describe excess and underutilized Federal 
real property. While the Government has taken some steps to 
improve FRPP, additional improvements are needed, including 
better accuracy of utilization, space reductions reported by 
agencies, maintenance needs, and tracking of structures.
    Three key steps could assist the way forward: implementing 
the national strategy, which I mentioned earlier; implementing 
key GAO recommendations; and considering legislation to assist 
the disposal process and mitigate competing stakeholder 
interests.
    In recent years we have made a number of recommendations to 
GSA that, if implemented, should improve real property 
management and reduce costs. Some priority recommendations 
include, in June 2012 we recommended steps GSA could take to 
make the FRPP database a better decisionmaking tool. GSA 
agreed, and is implementing measures aimed at improving its 
reliability and usefulness. This effort is ongoing.
    In July 2012, we recommended that GSA develop a 5-year 
capital plan to help ensure that long-term goals are fully 
considered when making decisions to fund capital projects. GSA 
agreed, but conveyed that the challenging budget environment in 
recent years has limited the agency's ability to develop such a 
plan.
    In November 2014 we recommended that GSA develop a clear 
strategy to effectively manage the Government's vast warehouse 
portfolio. GSA agreed, and is developing appropriate guidance. 
We will continue to monitor the implementation of these and our 
other real property recommendations.
    Since 2011 there have been several real property reform 
bills introduced in the Congress. None have been enacted. One 
of the bills, a Civilian Property Realignment Act, CPRA, 
provided a framework for disposing of and consolidating 
civilian real property. The Excess Federal Building and 
Property Disposal Act would have created a pilot project for 
expedited disposal of a limited number of high-value properties 
through public auction.
    More recently, the Public Buildings Reform and Savings Act 
would codify the Freeze the Footprint policy goals for high-
value projects, and place limitations on the agency's ability 
to enter into private-sector leases, among other things.
    Chairman Barletta, Ranking Member Carson, and members of 
the committee, this completes my statement. I would be happy to 
answer any questions you have at this time. Thank you.
    Mr. Barletta. Thank you for your testimony, Mr. Wise. I 
will now begin the first round of questions, limited to 5 
minutes for each Member. If there are any additional questions 
following the first round, we will proceed with the second 
round.
    Mr. Dong, I want to thank you again for working with us on 
the leasing side. Before we get into the owned side, I did want 
to alert you that I am still hearing that the standard GSA 
lease is just 5 years, which, as you know, is more costly than 
long-term lease deals. What are you doing to get the GSA 
regions to lock in the long-term deals?
    And also, with 50 percent of your leases expiring in the 
next 5 years, GSA should be using all the tools in your 
toolbox. However, I am still not seeing many leases being 
tasked to the brokers. And what are you doing to address this?
    Mr. Dong. Chairman Barletta, I think you are raising a 
really interesting point here. And since I have been 
commissioner over the past 15 months, I have underscored the 
importance of broader delineated areas, and longer lease terms, 
and greater competition, all in the name of being able to get 
better rates.
    But I think what we want to be able to do is not just say 
what is important, but to actually follow through with the 
regions, to make sure that they are doing what is important. 
And we are taking much more of a hands-on role to have those 
follow-on discussions with the regions, to review the 
transactions, one by one, to ask the questions, in terms of, 
``All right, tell me what you are doing about delineated area. 
Tell me what you are doing about lease term.''
    We actually, over the past few months, have been doing 
reviews of past transactions, region by region. What we will 
do, going forward, is to review the future pipeline of expiring 
leases, and really make sure that agencies are adhering to the 
guidance that we have articulated at headquarters, to make sure 
that we are landing in the right place for those larger 
transactions.
    Mr. Barletta. As far as working with the brokers?
    Mr. Dong. We have talked in earlier settings about how we 
have a significant amount of work in front of us, in terms of 
the expiring lease pipeline. And, again, we don't want to be in 
a situation where we continue to put more time on the clock 
through extensions, because that costs us, as we have talked 
about before, a 20-percent premium.
    So, as we look at the workload, region by region, one of 
the questions that we are bringing to that discussion is, 
``Tell me how you are going to use the broker contracts as a 
resource here,'' because we have no excuse not to use the 
brokers. We need to be leveraging every single resource at our 
disposal to manage the workload, and to get the best rates.
    Mr. Barletta. Mr. Mader, last week OMB Director Donovan 
committed to members of this committee to working with us and 
Chairman Chaffetz to advance legislation and reform the way the 
Federal Government manages property. Specifically, we seek to 
consolidate the Federal footprint, sell or redevelop high-
value, underutilized space, and dispose of property more 
quickly.
    Now, the President has also included property disposal 
legislation as a priority issue in his annual budget. We 
appreciate the President's focus on this issue, and agree the 
time has come to address the backlog of unneeded property. Can 
you confirm that the administration will work with us to move 
legislation through Congress that incorporates those ideals?
    Mr. Mader. Mr. Chairman, absolutely. Not only does the 
administration support better leveraging the real property 
portfolio, but, you know, I think we have demonstrated through, 
you know, proposing in multiple budgets now for several years, 
the CPRA legislation that David Wise talked about. So I think 
we are all shooting for the same objective, and I think it is 
just a matter of how do we sort of dock all these ships 
together.
    This morning, Norm and I had an opportunity to testify over 
in the Senate with Chairman Johnson and Senator Carper. Same 
topic. They have an interest, they want to do something.
    So, I think, you know, it is just a matter of getting all 
the stars aligned, because I think everybody is shooting for 
the same objective here.
    Mr. Barletta. Mr. Wise, does the Federal Government own 
civilian property that it does not need, or underutilizes? And 
is significant taxpayer money spent on these properties every 
year? Is this a significant problem? Is legislation required to 
address it?
    Mr. Wise. Yes, yes, yes, and yes, in brief. To expand on 
that, yes, it is--clearly, we have shown--and I think the 
testimony from the administration has also shown--that there is 
a lot of unneeded and underutilized property out there. Exactly 
how much, we don't really know. Is it costing taxpayers money 
to maintain and secure it and guard it, and so forth? Yes.
    Legislation? There are certain things we have talked about 
in the past in some of our reports. There's a lot of things the 
administration can do, but there are some things that the 
Federal agencies are really unable to do. We see this as 
basically kind of a cooperative effort. There is both a Federal 
side, as well as an agency side and a legislative side.
    And where I think the legislative side can come into play 
is through some elements that we are--that we already knew 
about from CPRA, where it can deal with some of the problems 
that inhibit the disposal process, primarily trying to either 
neutralize a little bit, or at least mitigate some of the 
competing stakeholder interests. And that is where a CPRA-like, 
or at least a legislative remedy, could be very useful, in 
partnering with the Federal agencies, to help move the disposal 
process.
    Mr. Barletta. Thank you. The Chair now recognizes Ranking 
Member Carson for 5 minutes.
    Mr. Carson. Thank you, Chairman.
    Commissioner Dong and Mr. Mader, can you provide specific 
examples of when the Federal Government was unable to dispose 
of a valuable piece of property because of conflicting 
stakeholder interests that you believe to be emblematic of this 
problem, nationwide?
    Mr. Mader. Congressman, let me start, and then I think Norm 
probably has a couple examples.
    I recently had an opportunity to visit with the Department 
of Veterans Affairs. OMB does an annual review of agency 
operations. Last week we sat with Deputy Secretary Gibson and 
his top leadership. And one of the topics of each and every one 
of these reviews--and we are about halfway through the cabinet-
level departments now--focuses on real property, on the amount 
of space they hold, number of buildings.
    In the case of the VA, obviously, they are a very large 
landholding and building-occupying agency, and rightfully so, 
because of the critical mission that they provide. But what was 
interesting in that conversation was the level of frustration 
that they talked about, where they have facilities that they 
are looking to replace, and yet, you know, they receive 
opposition from the community to actually replace it. And there 
were a couple that they mentioned in particular, where they 
said, you know, ``We have the funding to build a new facility, 
but the community doesn't''--you know, ``They really like this 
old facility.'' Or, ``We can consolidate a facility, and turn 
that building over to GSA for redevelopment, and the community 
says, `You know, we would really just like to keep the VA 
hospital.' ''
    So I think one of the challenges--and Norm has lots of 
other examples--is how do you sort of leverage the interests of 
all the parties in a way that we can actually achieve. What we 
share with you is reducing the footprint.
    Mr. Dong. Congressman Carson, my colleague from OMB was 
talking about some of the challenges in managing the various 
stakeholder interests. I wanted to answer the question focused 
on what we see as some other obstacles, as well. And I think a 
key obstacle for us in this process is that whole notion of 
retention of proceeds. And what we see, as agencies look to 
identify properties to move off their books, is that they incur 
costs. There is a cost of doing that. There is an upfront cost 
of doing that. And if they have no ability to retain any 
proceeds to at least recover their cost, it makes it very 
difficult.
    We actually see some examples in the Federal Government 
where you do have agencies that have some limited retention of 
proceeds authority. The Coast Guard is one example, the Forest 
Service is another example. And, with those two agencies, you 
are seeing far more volume, far more disposition activity among 
those agencies because they are able to recoup their costs.
    Mr. Mader. I think, if I might add one more item, in the 
current fiscal year, the Congress authorized GSA to spend $70 
million out of the Federal Buildings Fund to do building 
consolidations. And I think this goes to the chairman's comment 
about, you know, in GAO's critique about moving out of 
expensive leased facilities.
    So GSA had last year, and then again this year, $70 
million. And they have done--and Norm can talk about the 
progress they have made over the last 2 years. But in the 
President's budget for 2016 that is pending, we have asked for 
$200 million. There is a lot more we can do, if we could invest 
in it. And what we are hearing is, in fact, not only are we not 
going to get the $200 million, we are not even going to get the 
$70 million. So you got to wonder, you know, can we actually 
expect GSA to make any progress when we are not providing the 
resources to them?
    Mr. Carson. Thank you, gentlemen.
    Mr. Wise, given the problems you have identified with the 
Federal Real Property Profile, and that a significant portion 
of its data is, effectively, unreliable, do you think it is 
possible to put together a commission that would have the 
ability to scour the Federal real estate inventory in a 
systematic way?
    Mr. Wise. Congressman Carson, the issue with the Federal 
Real Property Profile is, as you say, the data--we have done a 
lot of engagements, and almost in every one we have found 
issues with various aspects of the Federal Real Property 
Profile.
    But beyond just the pure data being an issue, there is 
also--as we turned over the rocks of the Federal Real Property 
Profile, we found that there were some real issues with how the 
data is collected, and the congruency of the various agencies' 
definitions of what constitutes utilization or nonutilization 
or building condition. And so we have a very wide-ranging kind 
of set of circumstances involved with many different agencies, 
and even sometimes bureaus within those agencies, putting data 
into this system, but not all clearly defined in the same way.
    So, naturally, when things go in with some lack of 
consistency, they are certainly going to come out 
inconsistently, as well. And so we find all sorts of anomalies 
with the data.
    But I think we see a very strong management commitment, 
both from GSA's Governmentwide policy office, as well as from 
OMB under the leadership of Dave and his staff, of trying to 
come up with ways to harmonize the collection data practices 
and definitions, so that the data itself can be collected in a 
more parallel basis, which, hopefully, will then improve the 
overall database.
    So, it is really quite a deep problem, beyond just the 
numbers themselves. It is the foundation of it that really 
needs to be worked on. We do know that process is ongoing at 
GSA, and we are hopeful that when we evaluate it on the next 
update of the high-risk update for 2017, we will see some 
significant improvements as we go to test the data and its 
reliability.
    Mr. Carson. Thank you, gentlemen. I yield back, Mr. 
Chairman.
    Mr. Barletta. Thank you. We will now start our second round 
of questioning. This is to all witnesses.
    As I said in my opening statement, I think there are four 
basic reasons that we can't get rid of real estate that we 
don't need. One, agencies are land-banking valuable properties. 
Two, it costs agencies more to sell a property than it will 
generate in sale proceeds. Three, you have to relocate people 
from underutilized properties first. And, four, the disposal 
process takes too long, and results in few sales.
    To address these problems, it would seem that we need, one, 
an independent body to recommend properties for sale; two, the 
proceeds from the high-value properties to pay for the upfront 
costs of selling the less-valuable properties; three, GSA's 
real estate authorities to relocate people off underutilized 
but valuable property; and four, to streamline the disposal 
process.
    Do you agree these are the fundamental problems and 
solutions that Congress has to address?
    Mr. Mader. Mr. Chairman, I think what you just articulated 
is very consistent with the themes that exist within our 
proposed CPRA legislation. So, you know, I think we are--again, 
I know I sound like a broken record--I mean I think we are all 
in alignment on what the endgame is, and how to get there. I 
think it is a matter of just tweaking the pieces and moving 
forward.
    Mr. Barletta. OK. Mr. Dong?
    Mr. Dong. I would concur with what Mr. Mader said.
    Mr. Barletta. Mr. Wise?
    Mr. Wise. I will continue the broken record. I pretty much 
agree with what Dave and Norm said. In fact, what you were 
describing sounded a lot like CPRA legislation. Those are all 
elements that are important to helping the process move 
forward, hopefully, to improve the Federal property profile.
    Mr. Barletta. OK. Sorry for not recognizing Ms. Norton in 
the first round of questions. Ms. Norton, you are recognized 
for 5 minutes.
    Ms. Norton. Thank you, Mr. Chairman. I tiptoed in, so I can 
understand that.
    I very much appreciate this hearing, Mr. Chairman, however, 
and I would like to pose a question, first off, to Mr. Wise.
    Mr. Wise, this question, really, is about how. You know, it 
is easy enough to point out all the things that we wish GSA 
would do. It becomes more hard to do it. And sometimes GSA has 
authority and won't do it. Perhaps sometimes the Congress needs 
to make clear or to offer authority.
    I noted on page 4 of your own testimony--here I am quoting 
from it--you said, ``The Federal Government continues to rely 
heavily on leasing of properties where it would be more cost-
effective in the long run for the Federal Government to own.'' 
That is a kind of mantra, virtually, of this committee. But, 
you know, it is easy enough to say that; it has been difficult 
to do it.
    If you were--we were to point to agencies where this 
becomes hard to avoid, we might point to the consolidation of 
the Department of Homeland Security, where the Government 
continues to spend billions of dollars. And when it is all 
done, it will be perhaps untold billions, because of the delay 
that Congress has made moving here.
    But I noted that DHS is still in 55 locations in this very 
high-lease national capital region. When consolidation fully 
occurs, they will be down to something like six to nine leases. 
You know, one can calculate the kind of savings in lease costs 
that amounts to. One would imagine that sooner, rather than 
later, is when we would want to proceed. If this doesn't add to 
the deficit, I don't know what does, at least in terms of money 
that we could extract.
    So, I would like, perhaps beginning with Mr. Wise, does GSA 
have the authority to fully use incoming rent funds to 
construct new facilities that could help with consolidation?
    Mr. Wise. Congresswoman Norton, the issue with the Federal 
Buildings Fund, of course, is that there is an accumulation of 
money going into it, but GSA is not able to expend that money 
on capital projects without the authorization of Congress.
    Ms. Norton. All right, let me stop you there. If Congress 
were to authorize spending of money we already have in the 
building fund, then GSA could move more rapidly to free us from 
these costly leases.
    Mr. Wise. If Congress authorized GSA to spend the money as 
Congress directed, then GSA could proceed forward with spending 
that money on whatever capital project was authorized.
    Ms. Norton. Do both of you agree, Mr. Dong, Mr.----
    Mr. Mader. Absolutely.
    Mr. Dong. Yes. It comes back to having full access to the 
rents that we collect. The Federal Buildings Fund was set up so 
that the rent that we collect from our tenant agencies gets 
reinvested back into the Federal portfolio. We are not seeing 
full access. Those dollars are being diverted for other 
purposes.
    Ms. Norton. What kind of purposes?
    Mr. Mader. The other purposes outside of Federal----
    Ms. Norton. Well, I can understand for rehabilitation, for 
maintaining properties. But I wonder if one could even cite a 
purpose that could save the Government more money than 
authorization by this committee to use at least some of those 
funds to hasten--otherwise, we are depending upon 
appropriations, and that is very difficult to do, 
appropriations from Congress of the United States, and we have 
this money lying right here that could be used.
    And, Mr. Chairman, I am going to ask that we at least take 
a close look at that, so that we don't continue simply to 
criticize GSA for doing something it can't help but doing for 
lack of authorization from our own committee.
    Mr. Blue, I want to thank--or was it Mr. Dong who was with 
me at the roundtable I had on holdover leases?
    Mr. Dong. I believe it was our regional commissioner, 
Darren Blue, who was with you at that event.
    Ms. Norton. It was Darren Blue, yes. When he--I was pleased 
to hear that the holdover leases--holdover leases are costly, 
perhaps the most costly of leases--had decreased. But it looks 
like the way we have done it is to increase the number of 
short-term leases, at least in this region. And, of course, I 
point to this region, where perhaps the lion's share of your 
leases are.
    What would it take to get off of these short-term leases? 
Is it because of the footprint requirements? Why are you doing 
short-term leases, which, in and of themselves, guarantee to 
cost the Federal Government more in funds?
    Mr. Dong. I think you are raising a really good point. And 
I think what we see is, whenever there is holdover or 
extension, or even succeeding leases, whenever we take a stay-
in-place strategy, and we send a strong message to the market 
that we want to stay in place, then we shouldn't be surprised 
when we are getting less than competitive rates.
    So we are trying to make sure that we apply much more 
discipline and rigor to the planning process, so that we get 
agency requirements early on in the process. We need to start 
the planning process at least 36 months before lease 
expiration, and we need to be much more disciplined, in terms 
of running that competitive process, so the market knows that 
we are serious about getting the best rates for the taxpayer.
    Ms. Norton. So what is the average for a short-term lease?
    Mr. Dong. Well, we see lease extensions that are, like, 2 
years or 3 years. And sometimes they make sense. So when we do 
a lease extension because we are moving that tenant to a 
federally owned building, then that is a clear strategy that 
makes sense, because we have got a longer term solution to have 
them in an owned facility.
    Ms. Norton. Oh, would that were possible more often. Go 
ahead.
    Mr. Dong. When we see lease extensions where we have not 
done the planning, and we are simply putting more time on the 
clock, and we don't have a clear plan for what happens next, 
that is the wrong approach.
    Ms. Norton. Mr. Chairman, I know I am over time.
    I wish you would submit to the chairman how you are 
implementing this longer term out, so that, in fact, you engage 
in fewer short-term leases, so the committee will understand 
when this is happening, how often it is happening, and how many 
short-term leases have been affected.
    Thank you, Mr. Chairman.
    Mr. Barletta. Thank you. We will now resume our second 
round of questioning. I just have one more question.
    Mr. Mader, the administration advocates for an independent 
board to achieve ``long-desired opportunities for reform and 
deficit reduction within the inventory with far greater scope, 
speed, and efficiency.'' Can you talk about why an independent 
board is important?
    Mr. Mader. I think, Mr. Chairman, an independent board 
would allow us to bring in outside expertise, folks that have, 
you know, worked in the private sector, who have dealt with 
large, real property portfolios. And I think the combination of 
the outside expertise, along with GSA and other--let's say 
other landholding agencies, would allow us to sort of step back 
and think differently about how we look at properties, how we 
think about bundling portfolios of properties.
    This past year, working with GSA, you know, it is 
interesting. GSA only has control over 19 percent of the 
inventory, which, I think, is a surprise when people hear that 
low number. They just think GSA runs everything. The fact of 
the matter is, they don't. You know, you have NASA [National 
Aeronautics and Space Administration], you have DOD [Department 
of Defense], you have the Department of Agriculture.
    So, what we did, between us and GSA, is actually got these 
landholding agencies together and said, ``Look, we all have 
disposals. But what we are doing is we are doing them in our 
stovepipes, And we are doing them as one-offs. What if we 
looked at a geographic area and said, you know, `Who has got 
excess property in these five counties?' '' Is it more 
attractive to sell a portfolio than a single property? Maybe. 
So I think a board brings that creativity and different way of 
thinking.
    And I also think it takes away some of the parochialism 
that just is inherent in the Government. You know, like, 
``Well, we have never done it that way before.'' So I think it 
is a combination of that outside experience and the inside 
expertise.
    Mr. Barletta. Thank you. I have no further questions, and 
recognize Ranking Member Carson for 5 minutes.
    Mr. Carson. Thank you, Chairman. Commissioner Dong and Mr. 
Mader, how often do Federal agencies, unprompted by GSA or even 
OMB, offer up excess real estate for disposal? And is the 
solution as simple as allowing agencies to retain the proceeds 
of the sale of that property? And does GSA have the discretion 
to really allow agencies to retain the proceeds of a sale using 
their current authority?
    Mr. Mader. So I am going to start, and then I think Norm 
will pick up.
    I have seen, over the last couple of years now, a--more of 
an interest in agencies to basically unload their excess 
property. Because, with flat or declining budgets, what they 
are seeing is, you know, dollars going to underutilized excess 
properties, maintaining and safeguarding vacant properties. And 
that is a dollar that is not going to their mission, and to, 
you know, citizen services. So I see more incentive on the part 
of agencies now to say, ``I need to find a way to either 
consolidate my facilities, or release excess facilities,'' and 
more and more of those agencies coming to GSA, saying, ``Help 
me.''
    And, you know, GSA has done, I think, a great job over the 
last 2 years. But again, it is within the limit of how many 
dollars they have to do it. So, either the agency brings them 
the dollars, you know, through an appropriation, or, as Norm 
mentioned, a couple of agencies that actually have the 
authority to retain some of those savings, to use them, then, 
to queue up the next property for disposal.
    Mr. Dong. I think Dave is right, in terms of we are seeing 
more activity across the agencies. And the Reduce the Footprint 
directive from OMB, I think, is helpful to really focus our 
collective attention on the problem.
    That having been said, I think we all recognize that there 
is far more potential that we should be tapping into. And I 
bring it back to that whole notion of retention of proceeds. 
And where agencies have some ability to retain proceeds, to 
recoup the costs of getting these properties off their books, 
you are seeing far more activity.
    Mr. Carson. Thank you, sir.
    Mr. Wise, you stated in the past that consolidating leases 
onto owned spaces might be the quickest way for us to save 
money in real property. What can the Government do to reduce 
its reliance on leasing?
    Mr. Wise. Yes. I think that, again, this tracks back to the 
data issue that we talked about a little bit earlier. Because 
one of the issues we have seen in a number of our reports is 
that consolidation of leases is made more difficult by the fact 
that individual agencies don't always know what each other has 
out there.
    I think back to an example of one of my teams out in the 
field had been in a medium-sized city in Texas, where there 
were two small Federal offices. They both could have fit 
together in one or the other, because one had a very small 
footprint. But they didn't know that the guy down the street 
had some vacant space.
    So, that leads back to the idea that, if there was greater 
transparency into the Federal Real Property Profile, and 
agencies had more access to it, and it was more accurate, this 
would help facilitate individual agencies being able to look 
for opportunities to consolidate and move into Federal space, 
which would then reduce the reliance on leasing.
    So, lease consolidation could be a very effective tool in 
terms of both saving money and reducing the Federal footprint.
    Mr. Carson. Yield back, Mr. Chairman.
    Mr. Barletta. Thank you. The Chair now recognizes Ms. 
Norton for 5 minutes.
    Ms. Norton. Thank you, Mr. Chairman. I have a further 
question on freezing the footprint. As the chairman noted, this 
committee is working in concert with the administration to 
encourage as much freezing of the footprint as possible. But I 
noted that the GAO, Mr. Wise, has determined that some agencies 
are overstating. Indeed, some of those that had the largest 
reductions are overstating their freeze of the footprint. Is 
that--am I reading that correctly?
    Mr. Wise. Yes.
    Ms. Norton. Can you explain that? Is this a technical 
matter? Is it something beyond that? What are they trying to 
do?
    Mr. Wise. Well, it was a combination of different things, 
Ms. Norton. There were some technical aspects to it, there were 
some miscalculations of the measurements. There were--sometimes 
it was happenstance, where offices had been moving to begin 
with, but it happened to fall in that period when they were 
being asked to reduce a certain amount, or freeze a certain 
amount.
    And there were also cases where it was just a situation 
where an agency might give back some of its real estate to GSA 
and claim it as a reduction, whereas actually, it was a 
reduction only to that particular agency, but in the aggregate 
sense, it was still part of the Federal footprint.
    Ms. Norton. It gave back some of its footprint.
    Mr. Wise. But it turned it back--it didn't actually get 
reduced from the Federal inventory, it got reduced from an 
individual agency, but it went to GSA to take charge of. And, 
as a result, it was still part of the Federal inventory, but 
the agency counted it as a reduction.
    Ms. Norton. Yes, but it is a reduction for the agency. If 
GSA doesn't dispose of it, that is another question.
    Mr. Wise. Well, yes. It is a reduction to that agency, but 
it is not a reduction in the aggregate sense. And that is why 
we felt that the--because the statistics that the 
administration was presenting was an overall, Governmentwide 
statistic. And, as a result, we didn't feel as though--that, 
when we did our analysis, that--we said, ``Well, that is not--
that is a reduction maybe for Agency X, but it is not an 
overall reduction''----
    Ms. Norton. You know, that is fair, Mr. Wise. I am going to 
say it is fair in judging the inventory of the Federal 
Government. But I must say it does nothing to encourage an 
agency which reduces its footprint, and then finds that it 
looks as though they have overstated. And I would ask GSA to 
break out, so that we know when the agency has done what we 
asked the agency to do, but GSA, for whatever reason, hasn't 
gotten to it, so it is not counted as if it is simply ignoring 
the footprint.
    To what extent does moving costs or other costs interfere 
with reduction of the footprint?
    Mr. Wise. You are asking me?
    Ms. Norton. I am asking all three of you on that. Start 
with you, Mr. Wise.
    Mr. Wise. OK. Well, I will start off. Yes, it has an 
impact. And I think this gets back to some of the testimony 
that Dave and Norman had talked about a little bit earlier, and 
that is the fact that there are issues when an agency still has 
to--it sees a space where maybe there could be a potential for 
lease consolidation.
    Let's say, for example, there is a sorting facility from a 
post office where they are no longer sorting mail, but they 
still need the front end of the post office to provide 
services. However, that back end of it still would need a 
certain amount of investment, or capital investment, to make it 
suitable for, say, the other Federal office down the street to 
move in there. And so, who is going to bear that cost? That is 
an issue----
    Ms. Norton. Well, that is my question if GSA authorizes to 
front that cost and then build it into the cost of the lease.
    Mr. Dong. I think that is exactly right. And what we are 
trying to do, first and foremost, is to identify the 
opportunity to move from leases into owned space. Once we 
identify that opportunity, it is to figure out how you are 
going to fund the project.
    Mr. Mader talked about the consolidation fund, which we 
think has been huge in terms of our ability to help support 
more of these projects. We also have a program at GSA that 
focuses on the upfront cost of furniture and IT [information 
technology]. And what we do is we finance those costs and allow 
the agencies to repay us over time.
    Ms. Norton. So are you doing all the--all of the upfront 
costs that would be necessary for that agency to move into a 
smaller space?
    Mr. Dong. There are still some costs that the agency would 
be responsible for. But, again, what we are trying to do----
    Ms. Norton. What are those----
    Mr. Dong. It would be certain improvements, certain above-
standard requirements that would be on the tenant to pay.
    Ms. Norton. You can't do anything for them--well, that is 
going to keep them right where they are, Mr. Dong. That is 
going to keep them right where they are. You know, they are not 
getting enough appropriations, given the sequester and other 
reductions, to do much more than they are doing. So if they 
have got to put any money into moving, I don't know how you can 
expect an agency to reduce its footprint. I certainly 
wouldn't--if I were an agency, I wouldn't put that upfront. I 
would put the priority on keeping my staff, you know, or 
keeping my agency running.
    So I don't see that you are enabling agencies, once they 
have to come up with some money that you know good and well 
that Congress isn't giving them, I don't see how you are 
enabling people to reduce their footprint fast enough.
    Mr. Dong. Yes, we want to make sure that we are using all 
the tools at our disposal, and all the flexibilities that we 
have to reducing any obstacles.
    Ms. Norton. Why the tenant? Why is--why are the upfront 
costs for making the tenant adjustments in the facility not a 
part of what could be included in the lease?
    Mr. Dong. Again, we are working to make sure that we have 
all the flexibilities. And we are using those flexibilities. 
What we often see is that agencies don't want to use the credit 
card to pay for the entire move. They don't want to overextend 
themselves, so they would rather find the upfront costs to deal 
with it, so that they are not paying overtime.
    So what we do is, transaction by transaction, agency by 
agency, try to figure out how we are going to solve the funding 
issue for that specific project.
    Ms. Norton. Thank you, Mr. Chairman. I think--I mean I 
would like you to--I would like to know what the number of 
agencies are who are able to move, given the fact that they 
have got to take care of the tenant, the cost of adjustments to 
the facility in which they are moving. I would like you to send 
that to the chairman, please.
    Mr. Dong. Happy to provide the additional details on that.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Barletta. Thank you. I have no further questions. Are 
there any further questions?
    Mr. Carson. No, sir.
    Mr. Barletta. I would like to thank you for your testimony. 
Your comments today have been helpful in our discussion. Thank 
you.
    I will now call the final panel and witness.
    [Pause.]
    Mr. Barletta. Maria Foscarinis, executive director of the 
National Law Center on Homelessness and Poverty. I ask 
unanimous consent that the witness' full statement be included 
in the record.
    [No response.]
    Mr. Barletta. Without objection, so ordered.
    Since your written testimony has been made a part of the 
record, this subcommittee would request that you limit your 
oral testimony to 5 minutes. And you may proceed.

TESTIMONY OF MARIA FOSCARINIS, EXECUTIVE DIRECTOR, NATIONAL LAW 
               CENTER ON HOMELESSNESS AND POVERTY

    Ms. Foscarinis. Thank you, Chairman Barletta, Ranking 
Member Carson, members of the subcommittee. Thank you for the 
invitation to testify today. My name is Maria Foscarinis. I am 
the founder and executive director of the National Law Center 
on Homelessness and Poverty.
    The Law Center is the only national organization dedicated 
to using the power of the law to advocate the legal rights of 
homeless and economically vulnerable Americans. Since 1989, Law 
Center attorneys have worked through State and Federal courts 
to expand access to affordable housing, meet the immediate and 
long-term needs of those who are homeless or at risk, and 
strengthen the social safety net.
    Through our work we have been fortunate to achieve 
significant progress in meeting these goals. In addition to 
securing and expanding legal rights for homeless Americans, we 
have worked with partners throughout the country to provide 
services to millions of homeless families and children. There 
is still much work to be done. Homelessness remains a crisis 
affecting too many men, women, and children across the country. 
Many of our Nation's veterans are among those who are affected.
    One key Federal program designed to assist homeless 
Americans is title V of the McKinney-Vento Homeless Assistance 
Act, signed by President Ronald Reagan in 1987. Title V makes 
HUD responsible for leading a cross-agency effort to identify 
unneeded Federal properties suitable for use by homeless 
assistance organizations. Once those properties are available, 
homeless service providers have a right of first refusal to 
acquire the excess property.
    Title V has enabled service providers and local government 
agencies to acquire and use surplus property to provide meals, 
shelter, housing, job training, medical care, and mental health 
treatment, among other things, for homeless Americans 
throughout the country. Each year, more than 2 million 
Americans receive assistance through title V.
    Title V is a proven vehicle for assisting America's 
homeless with no cost to taxpayers. In fact, in light of the 
focus of today's hearing, I want to emphasize that title V 
saves taxpayer dollars by reducing operations and maintenance 
costs associated with unused and unneeded Federal properties.
    But, despite this ongoing success, the Law Center has 
identified a number of challenges. Most notably, as this 
subcommittee well knows, landholding agencies are all too 
willing to retain unneeded or underused properties. The Law 
Center has worked for over two decades to push Federal agencies 
to identify all properties eligible for disposal under title V. 
So I can say with certainty that the Law Center shares this 
subcommittee's goal of ensuring that surplus properties are put 
to better, more productive use, while reducing costs to 
taxpayers.
    As we work towards this common goal, title V must continue 
to be a part of the Federal property disposal process. Title V 
is not the cause of delays. In fact, only those properties 
deemed by HUD as suitable for use to provide homelessness 
assistance are available under title V. For this subset of 
properties, the title V application process takes only a few 
months to complete. We have worked with Congress, HUD, and 
other Federal agencies to improve and streamline title V and 
improve the efficiency of the process. I would like to briefly 
highlight three areas that could improve the title V program 
and save taxpayer dollars.
    First, property should be designated for disposal once it 
has been vacant or unused for 1 year. If an agency determines 
that a vacant property is still needed, it should submit a 
written explanation of continuing need, which would be 
available for review by the general public.
    Second, Congress should consider a more streamlined title V 
application process. Property for which there will not be a 
homeless services application should be available for sale more 
quickly. At the same time, title V applications should be 
considered more fairly and efficiently.
    Third, Congress should consider reducing unnecessary 
bureaucratic redundancy by providing one agency, HUD, with 
authority to grant or deny title V applications.
    At the Law Center we believe that the right to a home and 
food lie at the heart of human dignity, and we envision a world 
where no one has to go without the basics for human survival. 
Title V is a critical element of this vision, and I urge the 
subcommittee to ensure that any proposed modifications to 
Federal property disposal preserve and enhance this essential 
program.
    Thank you for inviting me to testify. I look forward to 
your questions.
    Mr. Barletta. Thank you for your testimony. I will now 
begin the first round of questions, limited to 5 minutes for 
each Member. If there are additional questions following the 
first round, we will have additional rounds of questions, as 
needed.
    As you have mentioned in your written testimony, we share 
many of the same concerns. I believe we have the same problem 
and the same goals. Agencies are land-banking properties. To 
address this, there needs to be some independent review and 
clear direction, other than relying on agencies themselves. 
Would you agree?
    Ms. Foscarinis. [No response.]
    Mr. Barletta. Would you agree with that?
    Ms. Foscarinis. Well, certainly there needs to be review, 
yes. I agree.
    Mr. Barletta. I am pleased with the discussion your 
organization has already had with this committee, and we look 
forward to continue to work with you on a solution that we can 
all agree on. Will you continue to work with us on this 
important issue?
    Ms. Foscarinis. Oh, absolutely. We would love to work with 
you, Mr. Chairman.
    Mr. Barletta. Yes, thank you.
    Ms. Foscarinis. And the subcommittee.
    Mr. Barletta. Thank you. I recognize Ranking Member Carson 
for 5 minutes.
    Mr. Carson. Thank you, Chairman. Madam Foscarinis, in your 
testimony you discuss the possibility of improving the disposal 
process by making HUD responsible for evaluating and approving 
applications for properties to be provided for homeless 
providers. Can you discuss this idea and how it could expedite 
the process of disposal?
    Ms. Foscarinis. Absolutely, Congressman Carson. So, right 
now, the review process lies with HHS [U.S. Department of 
Health and Human Services]. HUD is responsible for the front 
end of the process, and then HHS takes over. We believe that 
the process could be streamlined, if authority were vested in a 
single agency. We think HUD is the most logical agency. HUD has 
the most expertise on issues of homelessness. And so we propose 
reducing bureaucratic redundancy by vesting the authority in 
HUD.
    Mr. Carson. And lastly, how would you describe the level of 
cooperation that homeless service providers have received from 
Federal agencies with respect to how they report excess 
properties? And how could that be improved?
    Ms. Foscarinis. Well, I think a big problem for service 
providers is that they are not familiar with the process. There 
is a lack of information about what properties are available. 
So we believe that the agencies should--And GSA should--comply 
with--well, GSA should comply with the court order, and not 
land-bank the properties, and report the properties that are--
that it annually deems excess to us, and to the homeless 
service providers for use as properties to assist homeless 
people.
    But we also think that much more needs to be done with 
outreach. As the GAO recommended in its report, much more needs 
to be done to get the word out that these properties are 
available. Homeless service providers are not often reading the 
Federal Register. Much more user-friendly and accessible 
methods of outreach need to be implemented.
    Mr. Carson. Thank you, ma'am.
    Mr. Chairman, I yield back.
    Mr. Barletta. Thank you. The Chair recognizes--oh, Ms. 
Norton is gone. OK.
    I would like to--are there are any further questions?
    [No response.]
    Mr. Barletta. I would like to thank you for your testimony. 
Your comments have been helpful to today's discussion.
    And if there are no further questions, I would ask 
unanimous consent that the record of today's hearing remain 
open until such time as our witnesses have provided answers to 
any questions that may be submitted to them in writing, and 
unanimous consent that the record remain open for 15 days for 
any additional comments and information submitted by Members or 
witnesses to be included in the record of today's hearing.
    [No response.]
    Mr. Barletta. Without objection, so ordered.
    I would like to again thank our witnesses, again, for their 
testimony today.
    If no other Members have anything to add, this subcommittee 
stands adjourned.
    [Whereupon, at 3:05 p.m., the subcommittee was adjourned.]
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