[Senate Hearing 118-212]
[From the U.S. Government Publishing Office]


                                                     S. Hrg. 118-212

                      FASTA IMPLEMENTATION AND OPTIMIZING THE 
                       EFFICIENT USE OF FEDERAL PROPERTY

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                                HEARING

                               BEFORE THE

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED EIGHTEENTH CONGRESS


                             FIRST SESSION

                               __________

                              JUNE 8, 2023

                               __________

        Available via the World Wide Web: http://www.govinfo.gov

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs
        
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                ________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
52-786 PDF                  WASHINGTON : 2024                    
          
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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware           RAND PAUL, Kentucky
MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona              JAMES LANKFORD, Oklahoma
JACKY ROSEN, Nevada                  MITT ROMNEY, Utah
ALEX PADILLA, California             RICK SCOTT, Florida
JON OSSOFF, Georgia                  JOSH HAWLEY, Missouri
RICHARD BLUMENTHAL, Connecticut      ROGER MARSHALL, Kansas

                   David M. Weinberg, Staff Director
                    Zachary I. Schram, Chief Counsel
            Lena C. Chang, Director of Governmental Affairs
        Annika W. Christensen, Senior Professional Staff Member
              Chelsea A. Davis, Professional Staff Member
           William E. Henderson III, Minority Staff Director
              Christina N. Salazar, Minority Chief Counsel
                  Andrew J. Hopkins, Minority Counsel
                     Laura W. Kilbride, Chief Clerk
                   Ashley A. Gonzalez, Hearing Clerk

                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Peters...............................................     1
    Senator Paul.................................................     2
    Senator Lankford.............................................    11
    Senator Carper...............................................    20
Prepared statements:
    Senator Peters...............................................    25
    Senator Paul.................................................    27

                               WITNESSES
                         TUESDAY, MAY 16, 2023

Nina M. Albert, Commissioner, Public Buildings Service, U.S. 
  General Services Administration................................     4
David Marroni, Acting Director, Physical Infrastructure, U.S. 
  Government Accountability Office...............................     6
Hon. Nick Rahall, Board Member, Public Buildings Reform Board....     7

                     Alphabetical List of Witnesses

Albert, Nina M.:
    Testimony....................................................     4
    Prepared statement...........................................    29
Marroni, David:
    Testimony....................................................     6
    Prepared statement...........................................    35
Rahall, Hon. Nick:
    Testimony....................................................     7
    Prepared statement...........................................    54

                                APPENDIX

Responses to post-hearing questions for the Record:
    Ms. Albert...................................................    59

 
   FASTA IMPLEMENTATION AND OPTIMIZING THE EFFICIENT USE OF FEDERAL 
                                PROPERTY

                              ----------                              


                         Thursday, June 8, 2023

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10 a.m., in room 
SD-562, Dirksen Senate Office Building, Hon. Gary Peters, 
Chairman of the Committee, presiding.
    Present: Senators Peters [presiding], Carper, Hassan, 
Sinema, Ossoff, Blumenthal, Paul, Johnson, Lankford, Scott, and 
Hawley.

             OPENING STATEMENT OF SENATOR PETERS\1\

    Chairman Peters. The Committee will come to order.
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    \1\ The prepared statement of Senator Peters appears in the 
Appendix on page 25.
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    The Federal Government owns and leases a significant 
portfolio of real property, buildings that require resources to 
manage and to maintain. For 20 years, the Government 
Accountability Office (GAO) has put Federal real property 
management on its High Risk List because of longstanding 
challenges, including the disposal of excess and underutilized 
property.
    As of fiscal year (FY) 2021, Federal agencies reported that 
although more than 124,000 Federal buildings were being fully 
used, 898 buildings owned by Federal agencies were 
underutilized, and nearly 8,000 buildings stood completely 
unused.
    Maintaining these unused or underutilized spaces costs 
taxpayers money, and it makes the Federal Government vulnerable 
to waste.
    While the General Services Administration (GSA), which 
manages a significant portion of the Federal real property 
portfolio, has a process to identify and dispose of unused 
property, Congress passed the Federal Assets Sale and Transfer 
Act (FASTA), in 2016, to further streamline the government's 
ability to dispose of unused property and save taxpayer 
dollars. This law created the Public Buildings Reform Board 
(PBRB) to review and recommend unused properties for the 
government to sell.
    In its first round, the Board identified 10 unneeded 
properties that were eventually sold for $194 million. However, 
during this process, the Board faced numerous challenges, 
including identifying occupied buildings that led to a delay of 
nearly two years before the (OMB) sales could actually be 
completed. The second round of properties identified by the 
Board were rejected by the Office of Management and Budget and 
no sales occurred.
    The Board is preparing a final round of recommendations to 
offload unused buildings as FASTA nears its effective 
expiration date in December 2024.
    Today's hearing is an important opportunity for the 
Committee to hear about both the successes and the setbacks 
this program has faced in trying to accomplish its important 
mission to optimize the Federal Government's use of real 
property.
    The Federal Government's property needs are evolving, and 
we should ensure that the buildings the government operates 
both meet the needs of the agencies and are cost-effective for 
taxpayers. That includes not only reviewing the FASTA process 
but also examining other challenges related to real property 
management, such as inefficient leasing practices and the 
serious challenges posed by inaccurate and incomplete records 
of Federal properties in the Federal Real Property Profile 
(FRPP).
    I look forward to our conversation today to evaluate the 
FASTA process and related challenges and discuss potential 
reforms that would help the Federal Government improve 
efficiency and ensure that properties are being used in a way 
that provides the most benefit to local taxpayers.
    I would now like to recognize Ranking Member Paul for his 
opening statement.

              OPENING STATEMENT OF SENATOR PAUL\1\

    Senator Paul. In his book ``Bureaucracy,'' the economist 
Ludwig von Mises characterized the Federal bureaucracy as the 
``straitjacket'' paralyzing individual initiative, innovation, 
and overall societal improvement. You do not need to look any 
further than your 2-hour wait at your local DMV to see this 
``straitjacket'' in action.
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    \1\ The prepared statement of Senator Paul appears in the Appendix 
on page 27.
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    In 2016, Congress passed the Federal Assets Sale Transfer 
Act, with the goal of reducing government waste, streamlining 
the process, and cutting through the bureaucracy.
    FASTA created the Public Buildings Reform Board, which is 
composed of private sector experts in real estate and property 
management, to identify effective ways for the Federal 
Government to reduce unnecessary inventory of civilian real 
estate.
    Federal real property management has been on the Government 
Accountability Office's, as the Chairman said, on the High Risk 
List for nearly 20 years, and yet we still continue to have 
problems getting rid of some of this property. The continued 
failures of the Executive Branch to efficiently manage the 
Federal real property portfolio was one of the driving reasons 
for the creation of the Public Buildings Reform Board.
    Unfortunately, the bureaucracy's resistance to the Board 
has resulted in its apparent underutilization. The friction 
between the Board, the Office of Management and Budget, and the 
General Services Administration has resulted in only $200 
million in sales and the rejection of the Board's first-round 
submission in 2021.
    The GAO highlighted how the high-value round had a goal of 
$500 to $750 million in sales, and the first round had a goal 
of $2.5 billion in sales. The failure of the General Services 
Administration to meet these goals shows the administrative 
resistance to change and efficiency.
    We should not be surprised that the bureaucrats running 
these government agencies are not as effective as the private 
market in managing their real property portfolios. The 
``bureaucratic straitjacket'' is preventing efficient Federal 
property management and costing the taxpayer billions of 
dollars. This is why the private sector expertise of the Public 
Buildings Reform Board is absolutely necessary.
    Coronavirus Disease 2019 (COVID-19) has further complicated 
the math for holding property. With the Biden administration's 
refusal to bring many Federal employees back to the office, the 
need for the current square footage has been drastically 
reduced and needs to be accounted for. Instead of reassigning 
the Federal Government's space requirements, agencies are 
allowing employees to work from wherever their hearts desire 
while simultaneously hanging onto their empty properties.
    Agencies, particularly the General Services Administration, 
need to identify, remediate, and sell excess real estate. There 
is still a lot of work to be done and the expertise of the 
Public Buildings Reform Board needs to be better utilized.
    I want to thank each of the panelists today for joining us. 
I believe today's discussion will be invaluable as we look to 
optimize the Federal Government's role in real estate holding 
and management. Thank you.
    Chairman Peters. Thank you, Ranking Member Paul.
    It is the practice of the Homeland Security and 
Governmental Affairs Committee (HSGAC) to swear in witness, so 
if you would each please stand and raise your right hand.
    Do you swear the testimony you will give before this 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Ms. Albert. I do.
    Mr. Marroni. I do.
    Mr. Rahall. I do.
    Chairman Peters. Thank you. You may be seated.
    Our first witness is Nina Albert. Ms. Albert is the 
Commissioner of the Public Buildings Service (PBS) at the 
General Services Administration. As Commissioner, she focuses 
on a variety of Federal real property issues including 
nationwide property management and disposal of 371 million 
square feet of government-owned or leased property.
    Before joining GSA, Commissioner Albert was the Vice 
President of Real Estate and Parking at the Washington 
Metropolitan Area Transit Authority (WMATA) and was responsible 
for a multibillion-dollar real estate portfolio. Commissioner 
Albert also oversaw a $1.3 billion redevelopment project in the 
District of Columbia as Anacostia Waterfront Initiative 
Manager, and as a military veteran who served as a first 
lieutenant and company executive officer in the U.S. Army 
Signal Corps.
    Commissioner Albert, welcome to the Committee. You are now 
recognized for your opening statement.

TESTIMONY OF NINA M. ALBERT\1\, COMMISSIONER, PUBLIC BUILDINGS 
         SERVICE, U.S. GENERAL SERVICES ADMINISTRATION

    Ms. Albert. Thank you. Good morning, Chairman Peters, 
Ranking Member Paul, and Members of the Committee. My name is 
Nina Albert, and I am the Commissioner of the Public Buildings 
Service at the General Services Administration. I appreciate 
the Committee's interest in how we can optimize the size of 
GSA's real estate portfolio.
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    \1\ The prepared statement of Ms. Albert appears in the Appendix on 
page 29.
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    While many focus on the impact of the COVID pandemic and 
how the adoption of telework across the government may have an 
impact on the amount of space required, the pandemic also set 
into motion other workplace trends that are relevant, which 
include greater integration of technology, a significant focus 
on air quality in buildings, occupancy monitoring and other 
smart building improvement so that we can best ascertain how 
buildings are being used, as well as increased amenities and 
demand for higher quality space in order to recruit and retain 
employees. These are trends across the public sector and the 
private sector.
    In sort, the Federal buildings portfolio not only needs to 
be optimized, it also needs to be modernized so the agencies 
can better deliver their missions. The question is how we 
achieve these goals, and that is what I hope we can discuss 
today.
    President Biden's fiscal year 2024 budget request proposes 
adjustments to GSA's authorities and highlights capital 
investments that can immediately improve the condition and 
utilization of Federal buildings. First and foremost, it is 
imperative the GSA regains access to the full amount of the 
annual rent and revenues deposited into the Federal Buildings 
Fund (FBF) because agencies making rental payments to GSA do so 
with the expectation that their funds will be used to properly 
maintain buildings. GSA's fiscal year 2024 budget request 
includes a legislative proposal that will help ensure that GSA 
is provided full access to our annual revenues.
    To provide context for the cost of deferring maintenance in 
facilities, in the past two years alone, since 2023, 8 of the 
17 major repairs and alterations projects were resubmissions 
from the prior year's budget request. That delay has totaled 
$122 million more than the original funding request. This year, 
in fiscal year 2024, we have resubmitted 13 out of 17 major 
repairs and alterations projects. The same set of projects that 
we requested over two years ago, that delay of two years is 
costing the government now $300 million in increased costs over 
the original budget request.
    Unfortunately, because GSA has not had full access to the 
Federal Buildings Fund for the past 12 years, we have now had 
$11.3 billion less in appropriations than the revenues that we 
have collected, which directly contributes to deteriorating 
building conditions, which leads to underutilization and forces 
the government to lease out of necessity, which drives up 
ultimate cost to the government.
    A second proposal in the President's fiscal year 2024 
budget is to increase GSA's prospectus threshold from $3.6 
million to $10 million. The higher threshold will allow GSA to 
more quickly tackle routine projects which can reduce repair 
costs, shorten project delivery timeframes, and provide better 
value to agency customers. The higher threshold will allow 
Congress to remain engaged on the most costly and complex 
transactions while saving an estimated $50 million per year 
alone in process and delay cost. I think that this is a great 
benefit that we would love to collaborate with you on.
    Last, in our fiscal year 2024 budget request we include a 
legislative proposal to expand the allowable uses within our 
disposal appropriations. We have made this request for the past 
five years because we believe that this expanded authority will 
help agencies save money and right-size their portfolios. GSA 
has found, working with other agencies and participating in the 
pilot from the Federal Asset Sale and Transfer Act that the 
most impact acceleration to the disposition process comes from 
providing agencies with resources and support to manage the up-
front costs of moving and to prepare properties for 
disposition.
    GSA found that, to date, FASTA was able to increase the 
number of properties available but only by a small margin, and 
it has not been able to materially reduce the disposition 
timeline. I think that you will discover today that we share 
many of the same perspective on what could accelerate the 
disposition timeline. GSA has shared its lessons learned from 
the pilot with our stakeholders, including this Committee, and 
I look forward to discussing those with you today.
    In summary, GSA plays a key role in helping agencies 
redefine their space requirements and to transition the 
government to a smaller, less costly real estate footprint. New 
thinking and approaches illustrate how GSA's budget request and 
legislative proposals will help improve the functionality of 
tomorrow's real estate portfolio, allowing agencies to better 
carry out their missions and to save the American taxpayer 
money.
    Thank you for the opportunity to testify today, and I look 
forward to answering your questions.
    Chairman Peters. Thank you, Ms. Albert.
    Our next witness is David Marroni. Mr. Marroni is the 
Acting Director of the Physical Infrastructure team at the U.S. 
Government Accountability Office. As Acting Director, Mr. 
Marroni oversees work on Federal real property management and 
the U.S. Postal Service (USPS). He has worked at the GAO since 
2004, previously leading projects analyzing the United States 
energy infrastructure and overseeing commercial nuclear power 
and energy sector cybersecurity within GAO's natural resources 
and environment team.
    Prior to joining GAO, he worked as a staff member at the 
U.S. House Appropriations Committee.
    Mr. Marroni, welcome to the Committee. You may proceed with 
your opening remarks.

   TESTIMONY OF DAVID MARRONI,\1\ ACTING DIRECTOR, PHYSICAL 
     INFRASTRUCTURE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Marroni. Thank you, Chairman Peters, Ranking Member 
Paul, and Members of the Committee. I am pleased to be here 
today to discuss GAO's recent work on FASTA and its 
implications for optimizing the Federal real property 
footprint.
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    \1\ The prepared statement of Mr. Marroni appears in the Appendix 
on page 35.
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    In the aftermath of the COVID-19 pandemic, the Federal 
Government has a unique opportunity to reposition its property 
holdings and better achieve agency missions while potentially 
saving taxpayers millions of dollars. However, to take full 
advantage of this opportunity, Federal agencies and Congress 
will need to address longstanding challenges to effectively 
disposing of unneeded real property.
    Among other things, lengthy disposal processes and a lack 
of up-front funding have led agencies to hang on to unneeded 
space, wasting agency resources, and costing taxpayers money. 
Since 2003, GAO has highlighted these and other real property 
challenges on our High Risk List. There has been progress in 
improving the management of Federal real property. However, 
significant problems remain, both in the disposal process and 
with the data available to inform real property decisions.
    FASTA is effectively a six-year experiment to try and 
mitigate some of these challenges by testing out new concepts 
and different ways of disposing of unneeded real property. This 
experiment has not gone wholly as planned. There have been 
significant setbacks during FASTA's first two rounds, and there 
has been limited progress to date mitigating disposal 
challenges.
    That said, as an experiment, FASTA offers us a chance to 
step back and take stock of lessons learned, both positive and 
negative, to improve the disposal process going forward. We 
have recommended that GSA, in consultation with OMB and the 
Public Buildings Reform Board, do just that, and I am happy to 
report that GSA has now gathered an initial set of lessons 
learned. GSA should continue this learning process in 
collaboration with its FASTA partners and come up with a common 
set of agreed upon solutions that can inform future reform 
efforts. Doing so is critical if the full value of the FASTA 
experiment is to be realized.
    What are some key issues for Congress and the agencies to 
consider, based on FASTA's implementation to date? I will 
highlight four for you today.
    First, the importance of good and ongoing collaboration 
among Federal agencies. There were instances during FASTA's 
first two rounds when GSA, the Board, and OMB were not on the 
same page, and that contributed to setbacks. Collaboration 
going forward is key.
    Second, ensuring any disposal timeframes drive action but 
are also achievable. A mismatch between when the Board had to 
submit recommendations to OMB and agency budget processes 
caused challenges during FASTA's first two rounds.
    Third, the importance of incentivizing agencies to dispose 
of unused properties since doing so is not cost-free. FASTA is 
intended to do this by providing up-front funding, but this 
incentive has not been wholly effective. Additional options, 
including allowing agencies to retain sales proceeds more 
broadly, could be considered.
    Finally, the need for better real property data. Good 
decisions are built on good data, but Federal property data 
remains insufficiently reliable and incomplete, making it more 
difficult to determine how much and what property agencies 
really need.
    In conclusion, the Federal Government should fully leverage 
the knowledge gained from the FASTA experiment and continue to 
try new approaches to resolving longstanding disposal 
challenges. A more efficient and well-functioning disposal 
process is critical if the Federal Government is to take 
advantage of the current moment, optimize the Federal 
footprint, and save taxpayer money.
    Mr. Chairman, that concludes my opening statement, and I 
will be happy to answer any questions you all have.
    Chairman Peters. Thank you, Mr. Marroni.
    Our final witness today is Nicholas Rahall. Rep. Rahall is 
currently a member of the Public Buildings Reform Board. Nick 
and I were former colleagues together. It is good to see you 
again. Mr. Rahall served on the U.S. House of Representatives 
from 1977 to 2015, where he represented the southern part of 
West Virginia. But again, great to see you.
    As a Member of Congress, Representative Rahall led both the 
House Committee on Transportation and Infrastructure and the 
House Natural Resources Committee. Certainly, Mr. Rahall, I 
greatly appreciate your years of service, including our years 
together in the House, and I am very pleased to have you before 
the Committee today.
    You may proceed with your opening remarks.

    TESTIMONY OF HON. NICK RAHALL,\1\ BOARD MEMBER, PUBLIC 
                     BUILDINGS REFORM BOARD

    Mr. Rahall. Thank you, Chairman Peters, and thank you, 
Ranking Member Paul, for allowing us to testify today. It is 
very good to see a former colleague in the House, Senator 
Lankford, here as well, who is quite versed in the pending 
legislation and his knowledge thereof.
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    \1\ The prepared statement of Hon. Rahall appears in the Appendix 
on page 54.
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    As you mentioned, I am a member of the PBRB, and I am an 
original member of the Board. Congress created the PBRB as the 
sole engine that drives the execution of FASTA, the topic of 
today's hearing, and we are pleased to be invited to discuss 
our work. I will first provide a brief overview of the PBRB and 
the FASTA legislation and then describe our approach to our 
final round of recommendations.
    FASTA, as you have mentioned, was enacted on December 16, 
2016, as a bipartisan and bicameral effort, and it created the 
Public Buildings Reform Board. The Board currently has a sunset 
date of May 2025. Although the legislation was passed in 2016, 
Board members were not appointed until May 2019, over two years 
after enactment.
    Currently the Board members are D. Talmage Hocker, our 
Acting Chair, myself, Nick Rahall, David Winstead, Michael 
Capuano, and Jeffrey Gural, who was nominated by President 
Biden to be our Chairman and is awaiting Senate confirmation. 
We also have one vacancy on the Board. The Board was unable to 
conduct business for approximately 11 months in 2022, when two 
board members resigned, leaving us without a quorum until 
November 2022. As a result of this lack of quorum, we were 
unable to complete the first round of recommendations in 2022.
    The law dictated three rounds of recommendations. The 
first, the High Value Asset (HVA) round, was due December 2019, 
with targeted sales of $500 to $750 million. The First Round is 
due December 2021, with targeted sales proceeds up to $2.5 
billion, which we never completed because of that lack of 
quorum, and the second and final round, which is due not before 
December 2024, with targeted sales proceeds of $4.75 billion.
    The HVA round was streamlined in that it allowed the 
government to bypass the McKinney-Vento homeless screening 
process. It also gave the government a three-year leaseback 
authority to expedite the sale. The proceeds from all sales of 
PBRB-recommended properties are deposited into the Asset 
Proceeds and Space Management Fund. This fund incentivizes 
agencies by providing the resources to accomplish all the due 
diligence required to make a property available for disposal, 
such as environmental remediation, relocation assets, et 
cetera. The fund can only be used for PBRB-recommended and OMB-
approved projects, and GSA, of course, holds the disposal 
authority.
    The PBRB, therefore, recognizes the centrality of GSA to 
the successful conclusion of the PBRB program, and has sought 
the Public Building Services engagement for the final round of 
recommendations.
    Assuming that our sunset date of May 2025 is not extended, 
we are preparing for our final round of recommendations by 
continuing to work with GSA as they complete their internal 
portfolio reviews to determine disposal opportunities. We have 
reached out to other Federal agencies to review their lease 
portfolio to identify opportunities to consolidate leases and 
reduce lease costs. For this final round, I will emphasize that 
we are looking at both owned and leased assets for 
consolidation and disposal opportunities. We also are 
conducting our own portfolio review of several key metropolitan 
areas with a large Federal presence to determine opportunities 
for disposal and consolidation.
    Key to a successful final round, Mr. Chairman, the PBRB 
recognizes that GSA will need to prioritize how it will seek 
appropriations for major projects. The High Value round, to 
date, has realized $194 million in sales proceeds which are in 
the Proceeds Fund, as you mentioned in your opening testimony. 
There are still two remaining HVA assets that have not been 
sold that could conceivably bring in an additional $100 to $300 
million in proceeds, resulting in a total fund account of $300 
and $500 million. The large range, from $100 to $300 million in 
anticipated proceeds, is due to the fact that it has taken GSA 
years to prepare the final two properties for sale, losing the 
market momentum, and positioning these large assets to be sold 
squarely in a commercial real estate downturn. The length of 
time to sell these properties will likely cost the government 
hundreds of millions, if not billions, when considering cost 
savings over the next 30 years.
    Mr. Chairman, I do have my prepared testimony that has been 
made part of the record and will briefly summarize now and then 
open to questions.
    In conclusion, we believe that the PBRB is the expedited 
method to dispose of these Federal assets in a manner that will 
achieve the highest return for our taxpayer in line with the 
legislative goals created by FASTA, created by Congress, and we 
believe we are doing our job. The problems that have been 
pointed out will be answered during the discussion period.
    Thank you, Mr. Chairman.
    Chairman Peters. Thank you, Representative Rahall.
    Mr. Marroni, as we have talked about, FASTA was signed into 
law in 2016, as a pilot program designed to test concepts for 
the disposal of real property. But since FASTA's enactment, GAO 
has described several setbacks, and we have heard from opening 
comments some of those setbacks.
    But I would like you to tell the Committee and get into a 
little bit more granular detail about what implementation and 
structural issues that your team has identified.
    Mr. Marroni. Yes, Senator. We identified three main 
setbacks in the rounds that have taken place to date. First, 
there were delays in selling the First Round properties. That 
was due to a number of factors. One was the timing of the Board 
being pulled together. Second, there were delays in due 
diligence activities. There were also issues with external 
stakeholder outreach.
    Then ultimately, the delays in selling these properties 
resulted in the second setback, which is the Second Round of 
recommendations were limited in value, number, and complexity 
because part of this process, the Second Round, the 2021 round, 
the disposal costs were going to be funded by the sales 
proceeds from the First Round. With a delay in sales, those 
proceeds were not available, and therefore the recommendations 
could not be as innovative, could not be as complex.
    Then that led to the third setback, which is the Board 
submitted its recommendations to OMB for approval. OMB 
disapproved of the recommendations. The Board lost its quorum, 
and therefore could not respond, and as result the Second Round 
was terminated.
    The end result of these challenges was the funding that was 
expected to be available to help prepare disposal was not 
available. This led to limited recommendations, and then 
ultimately the termination of the Second Round.
    Chairman Peters. Thank you. Commissioner Albert, if you 
could also tell the Committee in a little more detail what 
difficulties that the Federal agencies face when they are 
trying to use FASTA disposal process. What do you see as some 
of the major difficulties?
    Ms. Albert. I think one of the major lessons learned, that 
an outside party could come in and understand what the 
challenges and obstacles to disposition across the entire 
Federal portfolio is, are very similar. One is that it does 
take access to funds to prepare a site for development. That 
includes vacating the site. Taking the occupants that are 
currently in site or any remaining occupants. For example, one 
small group, if they do not have a replacement location to move 
to will not vacate that property because they still need access 
to some sort of space to conduct their mission. That forward 
funding to allow agencies to vacate an underutilized property, 
very important concept.
    The second is that the process itself, regardless of 
whether it is under FASTA or under our own authorities as GSA, 
could not and did not, for example, change the requirement to 
comply with National Environmental Policy Act (NEPA). It did 
not change the requirement to comply with the Historic 
Preservation Section 106 guidelines and requirements. It did 
not change the requirement to do adequate and proper 
stakeholder outreach. All of those things remain in place, and 
those do take time.
    I want to make sure that amidst some of the more nuanced 
approaches to how to implement FASTA--which, by the way, any 
time you create a new agency requires some startup time, and we 
saw that. But once we finally identified the properties and the 
Board had a full quorum, we were able to dispose of 10 out of 
the 12 properties identified in the High Value Round within the 
year. The delays that we are talking about are very typical 
delays. Again, due diligence is important to offering a 
property so that you can maximize value of that property when 
you put it out for sale.
    I do not think that rushing through those types of 
preparations would be recommended. It certainly would not be 
recommended by me, in my professional opinion and years of 
experience in real estate, and I do not think it would be 
recommended by the experts who are on the PBRB board.
    I would say, in summary, access to resources for agencies 
in order to vacate property and prepare it. Second, some 
flexibility, which FASTA was able to secure, and is something I 
would like to dig into a little bit more, which is authority 
for sale-leaseback. That allows us to dispose of a property 
while buying a little time, literally, for an agency to move 
out, so you can actually get through the disposition process. 
Then, on the margins, I think there are opportunities to 
improve the process by looking at how we can expand certain 
GSA's authorities to be able to sell properties with some 
conditions attached so that a private developer can buy and 
execute on obligations that otherwise the Federal Government 
would need to take on.
    Chairman Peters. Great. Thank you.
    Mr. Marroni, how can agencies be incentivized to utilize 
FASTA, under the current framework we have right now? What sort 
of incentives make sense to you?
    Mr. Marroni. One incentive that FASTA tried that is a 
useful incentive is the funding of up-front disposal costs. It 
costs money to prepare these properties for disposal, 
especially as you get more complex with the type of projects 
you are talking about--relocation costs, due diligence costs. 
Providing up-front funding for the agencies to prepare these 
properties so it is not coming out of their salaries and 
expenses, but they have the availability of funds to get these 
properties ready to go.
    Another option to consider is the retention of proceeds 
from sales, and that has been explored in some disposal 
authorities where the agency gets to keep some portion of the 
funds that result from the sales and then, in some cases, plow 
that back into further real property efforts or other issues. 
That can incentivize agencies to move forward as well.
    Chairman Peters. Great. Thank you.
    Senator Lankford, you are recognized for your questions.

             OPENING STATEMENT OF SENATOR LANKFORD

    Senator Lankford. Thank you for the dialog on this. I have 
10 million questions because as former Congressman Rahall had 
mentioned before, I was very involved in this, in the process 
in the beginning of it, trying to be able to figure out how to 
be able to get this done.
    Nick, why did we have two members leave?
    Mr. Rahall. It is difficult to say, Senator Lankford, why 
two members left. Perhaps frustration. Perhaps personal 
problems.
    Senator Lankford. They knew they left a quorum that was not 
available. Everything could not function at that point. Was 
there a purpose in that, that would remove the quorum, or was 
it something else?
    Mr. Rahall. I do not believe they left to purposely create 
a lack of quorum. No, sir.
    Senator Lankford. OK. That is helpful to get the context 
on.
    What I am trying to figure out is, obviously there are lots 
of issues here why this did not come together, but this is a 
lesson in the slowness of government, the bureaucracy of the 
process. It took two years to be able to get it started and 
then to be able to get members on board and then lost a quorum, 
and that caused us to fall behind. Then as Mr. Marroni was 
mentioning before, then it became a problem between 
conversations between the Board and OMB and GSA, trying to be 
able to figure out the priorities and where that is going to go 
as well. The internal problems become the issue here in trying 
to be able to figure out this process was originally designed 
to try to clear some of that out.
    Ms. Albert, your testimony, thankfully you just answered 
some of the questions, and I was amazing in your opening 
statement you gave 30 seconds to some of the problems with it 
and four and half minutes to we need more money to be able to 
go through GSA things.
    But there are issues here on trying to dispose property. 
That is what we are trying to be able to get to. We have 
mentioned a couple of these. The offering to homeless, you had 
mentioned as well, was part of the challenge that is here. I 
have multiple local agencies that will come to me, not just 
from my State but from other States, and will say, ``Hey, 
please don't dispose of this Federal property because if you 
dispose of it, this is in an area of town we are trying to deal 
with homelessness, and this is suddenly going to open it up and 
create a bigger issue. Please, don't offer this for sale.'' 
When it is offered to State and local entities they try to tie 
it up to be able to make sure it does not take to the next step 
on it, so it cannot be disposed of because of that jump.
    You do not have to say that. We all know that, as a 
reality, and where the issues are on it. The issue that I have 
is, so what does it take to actually that is a consistent 
disposal process? Let me just do some recommendations. If a 
business had a piece of property that they are losing money on, 
they are going to try to find a way to get rid of this piece of 
property in any way they possibly can. If somebody wants to be 
able to take it on for a dollar, at least that gets it off 
their books from there, and they can get it gone. We cannot do 
that on the Federal side, and if we do that it is going to a 
State and local entity, and that becomes its own issue, 
depending on who is the decisionmaker in the process on that.
    Step one of this, what are the ideas that are coming out to 
say what can we do to be able to dispose of properties where we 
are literally losing money just in maintaining mostly empty 
buildings? Does anybody want to jump on that? Go ahead, Ms. 
Albert.
    Mr. Rahall. If I might take a stab at it, Senator, 
certainly we need data to conduct our recommendations, data 
that we just do not have right now. The Federal Real Property 
Data, for example, that we have is two years old. We have 
requested an update of that information so that we can make 
further recommendations. We also have requested a list of 
properties that are recommended for consolidation and disposal 
that was due from OMB in March. We have not gotten that yet. We 
need help from OMB in identifying our recommendations as well.
    But going back to the data point, we need the information. 
We also need stakeholder outreach. We have attempted to do that 
in the past. We visited some of the sites that are on the HVA 
list. But we also have to have that stakeholder outreach in 
working with GSA.
    There has to be better marketing proposals. The real estate 
experts on our board--and I am not one of those--but they have 
had some disagreements with the disposal process of GSA, quite 
honestly. They have felt that a brokerage process would produce 
more money for the taxpayers than the online auction that has 
been so prevalent over the past years, if not decades, that we 
feel does not produce for the taxpayer what they deserve.
    Those are some of the issues that we feel need to be 
addressed in order to return for the taxpayer greater bang for 
their buck.
    Senator Lankford. OK. That is helpful. Ms. Albert, you were 
going to mention something as well.
    Ms. Albert. I think that disposal of any public real 
property takes and requires proper planning in order for it to 
go faster. It requires stakeholder outreach. I absolutely agree 
with Representative Rahall.
    I think at the crux of the matter is some of the nuances of 
what is the strategy or tactic of how you would put a property 
onto the market, how you work with local governments, those are 
elements that would be required, frankly, of any decision along 
a single asset. The question and the magnitude of what we are 
doing with is how do you deal with a portfolio that want to 
accelerate the disposition is.
    The reason my opening testimony spent some time on talking 
about getting full access to the Federal Buildings Fund is 
because the Federal Buildings Fund was set up to be sort of a 
quasi-revolving fund, that the rent and the revenues, including 
sale proceeds, would come into the fund and could be, and I use 
in quote ``automatically reinvested'' in improvements to the 
Federal buildings portfolio. Those improvements imply and 
include disposition. I believe that Mr. Marroni, when he talks 
about incentives for agencies, we use the word--and it is the 
same concept--up-front resources to do the work required to 
move agencies out of buildings. If a building is already empty, 
in many cases if there is environmental contamination onsite, 
we have an obligation to clean that before we offer it to the 
marketplace. Those are the up-front resources necessary that 
will accelerate the process.
    I believe if we revert back to the original intent of the 
Federal Buildings Fund and GSA having full authority to access 
that, then we will be able to reliably plan on dispositions as 
well as provide those up-front resources necessary to both 
prepare the site as well as move agencies out. Then to me, the 
tactics or the strategy for whether you use a broker or whether 
we do an auction or whatever the means and methods for offering 
the property become the real heart of the conversation.
    But at this stage, and where we are at right now, I believe 
that you will hear resoundingly from all three witnesses here 
that access to resources, access to those proceeds up front, a 
little bit more flexibility to build on the authorities we 
already have are actually the tweaks that are needed in order 
to accelerate this process.
    Senator Lankford. Thank you. Mr. Chairman, do I have 
consent to be able to ask a couple more questions?
    Chairman Peters. Yes.
    Senator Lankford. Thank you for that.
    I want to drill down a little bit more on some of the 
dollars and the way that some of this is handled and some of 
the decisionmaking process. Some agencies, like Department of 
Labor (DOL), has a lot more flexibility with their facilities. 
When you go to U.S. Customs and Border Protection (CBP), some 
of their facilities they own, some of them GSA own, and so 
there are some real differences there on how this is handled.
    The disposal process for that, the Department of Labor 
disposes of it, they get a chance to be able to keep that 
revenue and to be able to reinvest it. CBP, if, in one of their 
facilities, that if they have an air conditioner out or 
whatever it may be, that they have to replace it, they replace 
it and they go do that. If it is a GSA facility, they get in 
line, and they will pay an additional fee to GSA to be able to 
then hire the contractor to be able to do the maintenance on 
it. For them, literally, the cost is much higher if GSA owns 
that facility and the maintenance happens, when they get in 
line for the maintenance to occur, as you were talking before, 
versus them having to have it.
    It seems to me part of the solution here is giving more 
flexibility to the agencies whenever possible, that the 
agencies are actually making decisions for that. GSA has an 
incredible diversity of locations and facilities, that 
literally we cannot even get a data list of even the properties 
out there we own, to be able to have that list to be able to 
know what we have, much less know how to be able to manage it 
from here.
    Why would we not allow more agencies to operate like the 
Department of Labor or more facilities from CBP to be able to 
them run on their own, rather than wait in line for somebody to 
get down to the border to be able to check it out, to be able 
to get in line, to be able to have a higher maintenance cost 
from somebody from the outside that is literally flying in to 
do it, rather than a local maintenance person that will be 
cheaper?
    Ms. Albert. Thank you for that. At its inception, the 
purpose of creating the GSA was to achieve the benefits of 
economies of scale and centralized management, that ultimately 
that would save the government money across the board. I 
personally still believe that that is a central function to 
what we do and that we execute incredibly well when we have 
access to the resources that we need.
    We do, because of the size, and as you mentioned, in some 
cases the remoteness of some of the assets that we own, 
delegate our authority to local agencies. We work very closely 
with them to make sure that they are maintaining the property 
properly. There are differences in terms of knowledge, 
expertise at the agency level when you diffuse too much of the 
responsibility across to any individual agency. We are there as 
the government's real estate expert in maintenance, in 
construction, to make sure that Federal buildings are properly 
maintained.
    It is a complex question. We work with CBP, in particular. 
They have delegated authority for maintenance. But for those 
facilities that we own and have delegated to CBP, for example, 
it is still our responsibility to make sure that that building 
is properly maintained.
    I believe that over the last 12 years, because GSA has not 
had full access to the Federal Buildings Fund, what you are 
starting to see now and experience, and the agency is seeing 
this, is the deterioration of building conditions, and that is 
becoming a point of tension between the agency and GSA. I think 
that the fix to that, to both receive the benefit of 
centralized maintenance and management of the real estate 
portfolio in GSA, as well as delivering quality and maintaining 
quality buildings for the agency, is not who should manage. I 
think that there is well-established documentation, data of the 
benefits of centralization, but we have been hindered by not 
getting full access to the Federal Buildings Fund.
    Senator Lankford. The surcharge is the same for 
maintenance, no matter what agency and location? Their 
surcharges for maintenance, are they consistent by percentage 
from entity to entity, or are there different surcharges for 
different agencies?
    Ms. Albert. The way that rent is calculated, which is----
    Senator Lankford. Just for maintenance.
    Ms. Albert. We build the maintenance costs into the rent, 
and so the rent is dictated by what we call sort of market 
reasonable prices.
    Senator Lankford. If there is a repair that needs to be 
done that is significant that is out there, then that is going 
to be something that will be in addition to rent, for CBP, for 
instance, in some of those locations that I have been to.
    I was recently in Nogales, where I have been before. When I 
talked to CBP, obviously it is a landlocked port of entry (POE) 
that is there, and as we are walking through we are talking 
about how to be able to expand, and we talked about the parking 
lot. They said, ``Well, that parking lot is actually an 
interesting story. GSA gave that parking lot away to the city, 
and we are landlocked. We cannot actually expand, so we had to 
fight to be able to go get that parking lot back. Eventually we 
were able to buy it back for several million dollars back from 
the city.''
    They are a little frustrated that out of their budget it 
was given away. Then they have to be able to buy it back, when 
they are trying to be able to do repairs. Obviously it is a 
very unique location to be a port of entry and the unique 
dynamics of it. They were explaining to me recently some of the 
extra costs that they are actually doing and saying, ``I could 
literally go down the street and I could hire a contractor to 
come and do this same thing, but someone is being flown in that 
is one of the approved contractors, coming in from the outside, 
and we pay a whole lot more on it, plus we would pay a fee on 
top of that.''
    I could go into different agencies. That is just one I was 
at a couple of weeks ago. That frustration for them on how it 
is actually being managed is one challenge. How we are actually 
trying to be able to communicate how to dispose of a piece of 
property, when if there are environmental issues, honestly, a 
lot of folks would say to a buyer, ``Hey, we are willing to 
drop the price significantly if you are willing to be able to 
do the environmental cleanup on this,'' because the 
environmental cleanup on the Federal side is going to be much 
more expensive than it is on the private entity trying to be 
able to do the exact same work to be able to clear it. Does 
that make sense?
    Ms. Albert. It does, and actually I think that the example 
that you just cited is one that we would want to work with you 
to try and make sure that we could streamline that. Right now 
our authorities and the law does not allow us to do that, but 
we would like the flexibility to be able to do that.
    Mr. Rahall. On the disposition side, the purpose of PBRB, 
the Asset Proceeds Fund established by Congress, is to use that 
pot of money generated by sales, close to $200 million in there 
now, is to be used to incentivize agencies to provide us 
information to help them move if we recommend that they be 
moved--relocation costs, remediation costs, et cetera.
    We have submitted legislative recommendations, tweaks that 
are needed to improve the law. The problem is that Asset 
Proceeds Fund is subject to appropriation. As Mike Capuano has 
said, a former Member of Congress who is on our board and is 
with us here today, you have to spend money to make money. We 
need to free up that Asset Proceeds Fund so that we can provide 
the money to these agencies to help them in their relocation 
costs--relocating their employees, remediation, historic 
preservation, or other costs.
    This has trickle-down benefits to the local community, a 
lot of these properties, once they are sold, can be job 
creators for the local economies, and it can be something that 
is a boost to the private sector as well.
    We need to tweak the FASTA law in a way that allows the 
PBRB to spend the money that is in the Asset Proceeds Fund for 
relocation, remediation of additional properties.
    Senator Lankford. Thank you. Mr. Chairman, thank you very 
much for allowing me to be able to push this line of 
questioning, and I really appreciate it.
    Chairman Peters. We appreciate you doing that, so thank 
you, Senator.
    Commissioner Albert, since 2018, both OMB and GSA have 
pushed for the establishment of a Federal Capital Revolving 
Fund (FCRF), as you know, for large capital projects, to 
encourage the purchase of real property instead of entering 
into expensive leases.
    My question for you is, how would the establishment of this 
fund reduce Federal real property costs, in your estimation?
    Ms. Albert. I will analogize this to a private sector 
portfolio. Rent that the private sector collects typically goes 
into paying the maintenance costs of a building, and then 
perhaps there is a reserve that is created in order to deal 
with unexpected or emergency issues. However, when there is a 
major capital project or a new project that a developer or that 
an owner wants to take on, they typically raise equity and take 
on debt, and that is how a new facility gets built.
    Right now the Federal Buildings Fund is that first bucket 
of responsibilities--take in rent, pay for maintenance and 
repairs, create a reserve of some sort so that you can deal 
with the existing asset base that you have. The Capital 
Revolving Fund, I think, is proposed to be that second piece, a 
pool or a source of funds in order to execute on large capital 
projects, rather than having large capital projects and new 
construction compete with the maintenance of assets. That is 
the concept.
    I think that if we could establish a dedicated fund source 
for major capital projects there would be significant benefit 
because we would not be competing with the FBF. I think that 
there are a number of things that we should and would like to 
discuss with you about how to make the Capital Revolving Fund 
function so that it, in fact, achieves the goals that I just 
stated, because there are complexities to it. But it is a 
concept that we would be interested in exploring with you.
    Chairman Peters. Very good. The Federal real property 
disposal process is basically meant to prevent the government 
from wasting tax dollars. But as I mentioned in my opening 
comments, the Federal Government continues to maintain unneeded 
facilities. In fact, in fiscal year 2021, Federal agencies 
reported over seven percent of the buildings owned by the 
Federal agencies were either underutilized or unutilized.
    Commissioner Albert, what additional authorities or tools 
would allow the GSA to dispose of property more quickly? Are 
there some recommendations you would have for us?
    Ms. Albert. There are a couple of recommendations, in 
particular, that are focused specifically on being able to 
dispose faster. I mentioned, of course, getting access to the 
Federal Buildings Fund, because the sale proceeds go into that 
fund. We would want to be able to revolve or utilize those 
funds in future disposition activity. It is the same concept 
that Representative Rahall and Mr. Marroni have mentioned as 
well, that retention of net proceeds and the authority to spend 
it. That is No. 1.
    The second, which is a legislative proposal that we have 
put into our 2024 budget request for the fifth year in a row, 
is to expand our disposal authority, or expand the permitted 
uses for a 190(a) account. That account is approximately $80 
million. We are only allowed to use that money for disposal 
activities once a Report of Excess has been created. We believe 
that getting access to those funds prior to an official Report 
of Excess by the agency will help incentivize agencies to 
consider disposing of properties. I believe there is a fund 
that is already there, it is already appropriated, and what we 
need to do is expand when we get access to it.
    Last, this is a tool that FASTA has really brought to light 
as to how effective it can be, which is, again, I mentioned 
that sale-leaseback authority under a defined term. Within 
FASTA, they have secured sale-leaseback authority for three 
years. Again, that allows us to dispose of property, put it 
into the private sector hands. With the private sector having a 
guaranteed form of income for the next two or three years, it 
actually enhances the value of the property. You do it for a 
limited period of time, which buys us time to move that agency 
out. I think that three years is pretty tight, in many cases, 
and I would seek to expand that sale-leaseback authority five 
years, seven years.
    I think those three things right now would really be an 
opportunity to accelerate, and then Senator Lankford mentioned 
talking about how could we, convey some of the risk and the 
cost of remediation to the private sector. That is a very 
typical transactional negotiation that the private sector is 
used to. I would like to explore around the margins how we 
could maybe convey that risk to the private sector, in the 
cases where they are available and ready to absorb it.
    Chairman Peters. Very good. Another question for you,
    Commissioner Albert. Could you update the Committee on the 
Department of Homeland Security (DHS) property consolidation 
efforts that are underway at Saint Elizabeth? Where are we 
right now on that?
    Ms. Albert. Absolutely. I am glad to announce that with the 
approval of our fiscal year 2023 budget, we are advancing on 
Phase 3 of the consolidation. This is a consolidation of 12 
million square feet of property occupied by DHS. We have 
already completed Phases 1 and 2, and now with Phase 3 we have 
begun and actually put out the Request for Proposal (RFPs) for 
program management services, construction management services, 
to build Cybersecurity and Infrastructure Security Agency 
(CISA's) headquarters, Immigration and Nationality Act (INA's) 
headquarters, and U.S. Immigration and Customs Enforcement 
(ICE's) headquarters at Saint Elizabeth's.
    In 2024, we are seeking appropriation for the last 
component of the consolidation, which are those facilities 
located at the Nebraska Avenue complex in Washington, DC. We 
are on the cusp of completing the build-out of the 
consolidation of DHS at Saint Elizabeth's and very excited that 
we are able to deliver on those projects that have been long 
promised.
    Chairman Peters. Great. That is good news.
    FASTA requires GSA to maintain a public database of all 
Federal real property. However, the Congressional Research 
Service (CRS) has found that the value of the Federal Real 
Property Profile Management System (FRPP MS), as an oversight 
and policy tool, has been limited by inaccurate and incomplete 
information. As of 2020, only 23 percent of the properties 
listed in the Federal Real Property Profile Management System 
has a complete address.
    Mr. Marroni, GAO has noted that reliability of Federal real 
property data is the main reason that real property management 
remains on the High Risk List. My question for you is, why is 
the status so important and what can Congress do to improve the 
Federal Real Property Profile Management System so we have the 
data we need?
    Mr. Marroni. The data is important because it is hard to 
manage Federal real property if you do not know the condition 
of the properties, if you do not have good data on what 
properties are actually in excess, their utilization. You need 
that information to identify prime candidates for disposal. I 
think we have talked about some of the issues with data already 
during the FASTA process.
    This has been a longstanding issue on our High Risk List. 
We have made recommendations in this space that remain open. To 
GSA's credit, they have taken actions to improve the data over 
time, but there still needs to be improved validation and 
verification.
    It is also a complex challenge because the agencies self-
report the data into FRPP, so each agency needs to provide 
accurate data and up-to-date data.
    I would say the third thing you asked about, what can 
Congress do, I would say continued oversight and pushing on the 
agencies to report data that is accurate and complete, again, 
particularly on variables that change like utilization. Right 
now, as we exit the pandemic, it is important to know how well 
these buildings are being utilized, what space may be unneeded. 
There is not good data right now on that for many buildings in 
the Federal portfolio. It is important for Congress to push 
agencies to move toward better data on that front.
    Chairman Peters. Good. Representative Rahall, perhaps you 
can give us a little bit more detail as to how that has 
impacted the Board's ability to make recommendations.
    Mr. Rahall. One thing I would say, Mr. Chairman, is that 
the OMB has denied the Executive Director of the PBRB a seat on 
the Federal Real Property Council. This would be an important 
improvement if we could have our executive director a seat on 
that Senior Federal Property Executive Board. It further 
stifles, without that seat on the board, the PBRB's access to 
the information it needs about the shifting Federal workforce. 
We know, in post-COVID era, that it is shifting rather 
dramatically.
    We need a partnership, a co-partnership here, if you will, 
with GSA and OMB to work through this issue and at least allow 
our executive director a seat on that council. This would be a 
big step forward in allowing us to have access to the 
information we need.
    I think, again, if we could have better coordination, and I 
believe David's report touches on this issue rather accurately, 
about our lack of data and access to that data.
    Chairman Peters. Commissioner Albert, do you still intend 
to make the Federal real property database publicly available 
if FASTA expires without reauthorization?
    Ms. Albert. Yes, I want to clarify, the FRPP database, 
actually has been available publicly on a website since 2016. I 
want to underscore the comment that Mr. Marroni made, which is 
that GSA functions in two capacities in terms of managing and 
inputting into the FRPP. First is there is a component of GSA 
that does governmentwide support, and so is working, for 
example, with the Department of Defense (DOD) as a major 
landholder and other major landholding agencies to take all of 
that information and manage the database.
    Then the Public Buildings Service, which is a component of 
GSA, which is the component I am responsible for, as a major 
landholding company, inputs information about our portfolio 
into the database.
    I believe that the Public Buildings Service input into the 
database has been done regularly, as well as comprehensively as 
possible, and to the extent that there are data inconsistencies 
or incomplete data it is because there is an underlying issue 
that we need to work through. I would extend, as a landholding 
agency, that assumption, and frankly, knowledge that that is 
challenging for other landholding agencies as well.
    But we continue to work on the process, candidly, and I 
believe that the guidance and improvements that we have made 
both in the database itself over the past two years is going to 
continue to improve the quality of the database itself.
    I do want to make one point. The FRPP is an inventory of 
all of the Federal portfolio. It is not an asset management 
tool. Those are two different functions and things. I think it 
is incredibly important to have an inventory, and an accurate 
inventory, of the property that the Federal Government owns, 
but that will not tell you everything that you need to know 
about how to manage that property. I am making that distinction 
so that everyone understands what the purpose of the tool is, 
and many landholding agencies do have individual asset 
management tools.
    Chairman Peters. Commissioner Albert, it has taken two 
years to sell 10 of the 12 properties approved for disposal 
under FASTA, and the two properties that are expected to result 
in the highest return still have not been sold. My question for 
you is, what has caused these delays and when do you expect to 
sell the remaining properties, and do you anticipate similar 
delays in the final FASTA round?
    Ms. Albert. As to the first 10 properties that were sold 
taking two years, there was, again, I attribute this to kind of 
ramping up and starting a new agency and integrating that new 
agency's work with GSA's work. About one year, I believe, of 
the two years was spent talking about and deciding on how to 
dispose of those properties. Again, I reference the tactics or 
the strategies.
    But once it was determined how we were going to offer those 
properties, the sales all occurred within a year. Again, just 
working through some of the kinks of an upstart or of a new 
startup.
    As to the two remaining properties, which are, I believe, 
really great disposal candidates, I can speak specifically to 
them. The property that we own at Menlo Park has a remaining 
tenant in it. That tenant had plans to move out. They got 
delayed during COVID. They are back on track to move out in 
2024, which means that we will be able to offer that property, 
we believe, within the next year.
    As to Laguna Niguel, another major asset that we own, 
unfortunately we put it on the market, and we did not get any 
bidders. We believe that the historic preservation covenants 
that were published deterred and chilled the market interest in 
that property. We are working right now with the local 
jurisdiction to figure out how we can soften, lift, or 
accommodate in some other way the historic covenants that are 
on sort of the main asset at Laguna Niguel.
    These are the types of issues that need to be worked 
through, particularly when we are dealing with complicated real 
assets.
    Chairman Peters. Great. Thank you. Representative Rahall.
    Mr. Rahall. Mr. Chairman, in my prepared testimony I 
addressed the Laguna Niguel issue, and the three factors that 
we feel, in the PBRB, were the cause of the result of that 
there were no bids on this property. It is a highly valuable 
piece of property, and it is a shame that there were no bids 
received.
    But one of the primary factors was the lack of market 
interest, and that, of course, was due to some of the 
remediation issues that were involved and the GSA's decision to 
reject acceptable alternatives. Another factor was the lack of 
publicity. There was just no marketing, like any business firm 
would market their product for sale, and therefore, lack of 
awareness. Among the 22 surveyed local commercial developers, 
16, for example, were not aware of the auction since no 
commercially standard process or marketing was used.
    A third factor was the uncertainty surrounding the zoning 
and the local community intent.
    This asset remains unsold, as you have referenced, while 
negotiations continue with the historic preservation process. 
We have advised GSA that a consultant is needed to facilitate 
this sale, given the complexities with the historic 
preservation, and a potential rezoning once the property leaves 
the Federal ownership.
    The government needs to demonstrate innovation in how these 
excess properties are managed, and the Board needs more 
authority in determining the disposal strategy, and I have 
referenced that earlier in my comments.
    Chairman Peters. Thank you.
    Senator Carper, you are recognized for your questions.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thanks, Mr. Chairman.
    Mr. Chairman, there is a river that separates my native 
State of West Virginia with Ohio, and there are a number of 
bridges that cross and connect those two States, West Virginia 
and Ohio, where I went to college. I was wondering maybe if 
Congressman Rahall could share with us the name of one of those 
bridges. I think it might be close to Huntington. Would you 
know who that might be? Who is that bridge named after? I think 
it is called Nahall. It is Rahall.
    Mr. Rahall. Yes, Senator Carper.
    Senator Carper. It is your bridge, is it not?
    Mr. Rahall. That bridge is named after me, and you will be 
happy to know there are no bullet holes in the sign to this 
date.
    Senator Carper. That is good. I have been Delaware's 
treasurer, Congressman, Governor, Senator, and I was a naval 
fight officer (NFO) for 20 years before that. How many things 
are named after me in Delaware? None. You have your own bridge, 
and I am a native of West Virginia.
    Mr. Rahall. I know you are a native of my hometown.
    Senator Carper. There you go. Beckley. A Beckley boy. Great 
to see you.
    Mr. Rahall. Good to see you again, Senator.
    Senator Carper. It is always a pleasure to cross paths with 
you.
    That was my first question, and I wanted to give that one 
to you, as a softball. Now I am going to turn to Ms. Albert, if 
I can, for the tough questioning.
    Ms. Albert, thanks for joining us today. I serve on this 
Committee, and I think I am the longest serving person who 
serves on this Committee these days, and I chair a Committee on 
Environment and Public Works (EPW), which has oversight, as you 
may know, over public buildings. I am very familiar with GSA's 
Federal real property footprint and the need for efficient 
property disposal.
    I think it was October of last year, October 2022, that GAO 
released a report that recommended that GSA develop a process 
to better apply lessons learned from 2019 to 2021, rounds of 
disposals required by the Federal Asset Sales and Transfer Act 
to improve results in the 2024 round of disposal.
    My question for you, Ms. Albert, is this. Can you just 
please share with us the actions that GSA has taken or plans to 
take in order to incorporate lessons learned from the first two 
rounds of FASTA ahead of the final 2024 round?
    Ms. Albert. Yes. Thank you so much and thank you also for 
your leadership on the EPW committee.
    Senator Carper. Thank you.
    Ms. Albert. I believe that many of the issues that we 
experienced in the first two rounds and a little bit of the 
disconnection that the parties had are at least identified now. 
I personally have met with the PBRB several times and am 
committed to making sure that the lessons learned get 
incorporated into future rounds. I believe that there are a 
number of proposals that will make the next round more 
successful than the past rounds, and Representative Rahall has 
alluded to some of those.
    But my primary interest in moving forward and thinking 
about how we should prepare this last round for success is to 
identify what we are trying to prove. What is the proof of 
concept that this next round can bring to bear? Is it about 
forward funding agency moves and how quickly does that 
accelerate the process? Is it the disposition strategy, 
marketing, or these other activities that really generate 
greater interest?
    I think that we are well positioned at this point to have 
conversations about what we think this next round of projects 
can prove and demonstrate, and I have confidence that we will 
be able to align in that.
    Senator Carper. Great. Thank you. I have a second question 
for you and then maybe another question for another member of 
the panel. But my second question for you, Ms. Albert, deals 
with space utilization and disposal challenges. I think the 
FASTA was signed into law, I think it was in 2016. But the 
COVID-19 pandemic has dramatically changed, as you know, the 
needs for office space due to increased hybrid and remote work 
options.
    We are hearing from cities all over the country where they 
have office space that they used to rent robustly, that a lot 
of it is thinning out and it causing really a hardship for city 
governments to meet their budgets, raise their budgets. But 
still it is critical that the agencies accurately report space 
utilization needs in order to efficiently dispose of unused and 
underused properties.
    Here is my question. In your view, have agencies been 
reporting properties for disposal in a way that accurately 
reflect their current space needs? I will say that again. In 
your view, have agencies been reporting properties for disposal 
in a way that accurately reflects their current space needs? A 
follow-up to that will be how is the GSA helping agencies 
balance flexibility to account for uncertain future space needs 
while improving the efficiency of the property disposal 
process? A two-part question.
    Ms. Albert. Thank you. I might need to ask you for the 
second part when I am done with the first.
    Right now I describe what has happened in the marketplace 
and in workplaces as the swinging of the pendulum. We were 
starting in one place before the pandemic. The pandemic almost 
swung to the exact opposite side of the scale, where everybody, 
due to the emergency state that we were in, needed to work from 
home. Right now the pendulum is swinging back, but we do not 
yet know where the final resting place is.
    To me, as a property manager and a portfolio manager, we do 
not need to know the exact number because at a portfolio the 
scale the size of the Federal Government's and of GSA's, there 
is a lot of work that we can be doing now to create the 
practices and the nimbleness that we believe we need to address 
the savings and the space optimization that we can over the 
next five to 10 years.
    Pre-pandemic we knew that there was an excess of space. 
This is pretty well documented. Right now, with OMB's recent 
memorandum asking agencies to report out on what their 
organizational strategy is for workforce--that includes 
telework, but it includes other organizational performance 
initiatives--we are going to continue, over the next year, I 
would say, to understand where that pendulum is finally going 
to rest.
    I will say, as an asset manager and portfolio manager, I do 
not need to wait completely for a final answer, but agencies, 
before they are willing to give up space, will want to have a 
better understanding of how they plan to operate for the next 
term.
    I want to point out one activity in particular that I 
believe is going to become increasingly important, and you 
referenced it. We manage our own facilities. We also manage a 
very significant lease portfolio. Our successes in 
consolidating leases into both federally owned space as well as 
into other leases has saved the government money over the past 
five years to the tune of $6.5 billion. We have reduced the 
lease portfolio by over 13 million square feet.
    Senator Carper. How much?
    Ms. Albert. About 13 million square feet.
    Senator Carper. That is about the size of Delaware.
    Ms. Albert. No comment. No, just joking.
    Senator Carper. We are still growing.
    Ms. Albert. We have also reduced the owned portfolio in the 
last five years by close to 13 million square feet.
    We are implementing, today and still, the necessary 
consolidation actions that were planned pre-pandemic, and if we 
can get access to some of the ideas and authorities that we 
have mentioned today, that GSA has proposed in our fiscal year 
2024 budget, then I believe we can be very well poised to deal 
with any increase in disposal actions or lease consolidation 
actions that we anticipate in the future.
    Senator Carper. Good. My time has more than expired, Mr. 
Chairman. Thank you for being lenient. I would like to submit a 
couple of questions for the record.
    Did you have time to do my follow-up question, which was 
how is the GSA helping agencies balance flexibility to account 
for uncertain future space needs while improving the efficiency 
of the property disposal process.
    Ms. Albert. Sure. We are offering unique services right 
now, both in the form of access to consultants who are experts 
in both portfolio optimization as well as space planning. We 
also have been much more, I would say, innovative in terms of 
offering access to private coworking space, and we are right 
now considering how to execute and pilot Federal coworking 
space, again, to allow and give access to flexible space the 
agencies need now at a lower price.
    We have had a big announcement, and certainly invite you 
and any other Member of the Committee, to come to our Workplace 
Innovation Lab, where we are enticing and demonstrating to 
agencies, it is the carrot side of our business, how can you do 
this. What does a hybrid workplace look like? It includes 
seamless and frictionless access to technology, so somebody can 
work as effectively in the office as they do from their home, 
as they do from their project site.
    Last but not least, I think a really exciting offering that 
we are going to be sharing is transparency of our leased and 
owed inventory so that agencies can see in advance when leases 
are expiring by other agencies. Therefore, when they have a 
bigger picture and broader picture of what the long-term 
Federal holdings are they can more confidently let go of the 
space that they have where leases might be expiring now. There 
are many components to effective management, but we are working 
and offering customers a lot of tools to help them more 
effectively and more quickly plan what their future workplace 
needs are.
    Senator Carper. That is great.
    Mr. Chairman, again, I appreciate the time to ask these 
questions and to hear responses.
    Mr. Marroni, I could barely see your lips moving when she 
spoke. I would say to my friend, Nicky Joe--that is what they 
call him in West Virginia--it is great to see you again. Thank 
you for all your years of service. You never change. Great to 
see you, buddy. Take care. Thanks so much.
    Thanks, Mr. Chairman.
    Chairman Peters. Thank you, Senator Carper, and I would 
also like to thank our witnesses for being here today. I 
certainly appreciate your contributions to this important 
discussion. It is a discussion that will continue.
    Disposing of unneeded Federal real property in an efficient 
and timely manner has been a longstanding challenge, costing 
taxpayers billions of dollars. While FASTA was set up to 
streamline the disposal process, it is clear obstacles persist 
as this pilot program nears its conclusion.
    As Chairman of this Committee I will work with my 
colleagues to look at oversight and legislative actions we can 
take to improve efficiency and accountability in the Federal 
Government's use of real property.
    The record for this hearing will remain open for 15 days, 
until 5 p.m., on June 23, 2023, for the submission of 
statements and questions for the record.
    This hearing is now adjourned.
    [Whereupon, at 11:19 a.m., the hearing was adjourned.]

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