[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
CUTTING COSTS, ADDING VALUE: THE FUTURE
OF FEDERAL PROPERTY
=======================================================================
(119-31)
HEARING
BEFORE THE
SUBCOMMITTEE ON
ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND
EMERGENCY MANAGEMENT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
DECEMBER 11, 2025
__________
Printed for the use of the
Committee on Transportation and Infrastructure
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online at: https://www.govinfo.gov/committee/house-
transportation?path=/browsecommittee/chamber/house/committee/
transportation
� __________
� U.S. GOVERNMENT PUBLISHING OFFICE
63-336 PDF WASHINGTON : 2026
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
Sam Graves, Missouri, Chairman
Rick Larsen, Washington, Ranking Member
Eleanor Holmes Norton, Eric A. ``Rick'' Crawford,
District of Columbia Arkansas,
Jerrold Nadler, New York Vice Chairman
John Garamendi, California Daniel Webster, Florida
Henry C. ``Hank'' Johnson, Jr., Georgiaomas Massie, Kentucky
Andre Carson, Indiana Scott Perry, Pennsylvania
Dina Titus, Nevada Brian Babin, Texas
Jared Huffman, California David Rouzer, North Carolina
Julia Brownley, California Mike Bost, Illinois
Frederica S. Wilson, Florida Doug LaMalfa, California
Mark DeSaulnier, California Bruce Westerman, Arkansas
Salud O. Carbajal, California Brian J. Mast, Florida
Greg Stanton, Arizona Pete Stauber, Minnesota
Sharice Davids, Kansas Tim Burchett, Tennessee
Jesus G. ``Chuy'' Garcia, Illinois Dusty Johnson, South Dakota
Chris Pappas, New Hampshire Jefferson Van Drew, New Jersey
Seth Moulton, Massachusetts Troy E. Nehls, Texas
Marilyn Strickland, Washington Tracey Mann, Kansas
Patrick Ryan, New York Burgess Owens, Utah
Val T. Hoyle, Oregon Eric Burlison, Missouri
Emilia Strong Sykes, Ohio, Mike Collins, Georgia
Vice Ranking Member Mike Ezell, Mississippi
Hillary J. Scholten, Michigan Kevin Kiley, California
Valerie P. Foushee, North Carolina Vince Fong, California
Christopher R. Deluzio, Pennsylvania Tony Wied, Wisconsin
Robert Garcia, California Tom Barrett, Michigan
Nellie Pou, New Jersey Nicholas J. Begich III, Alaska
Kristen McDonald Rivet, Michigan Robert P. Bresnahan, Jr.,
Laura Friedman, California Pennsylvania
Laura Gillen, New York Jeff Hurd, Colorado
Shomari Figures, Alabama Jefferson Shreve, Indiana
Maxwell Frost, Florida Addison P. McDowell, North
Carolina
David J. Taylor, Ohio
Brad Knott, North Carolina
Kimberlyn King-Hinds,
Northern Mariana Islands
Mike Kennedy, Utah
Robert F. Onder, Jr., Missouri
Jimmy Patronis, Florida
------ 7
Subcommittee on Economic Development, Public Buildings, and
Emergency Management
Scott Perry, Pennsylvania,
Chairman
Greg Stanton, Arizona, Ranking
Member
Eleanor Holmes Norton, Mike Ezell, Mississippi
District of Columbia Kevin Kiley, California
Kristen McDonald Rivet, Michigan Tom Barrett, Michigan
Shomari Figures, Alabama Robert P. Bresnahan, Jr.,
John Garamendi, California Pennsylvania
Dina Titus, Nevada Kimberlyn King-Hinds,
Laura Friedman, California, Northern Mariana Islands
Vice Ranking Member Mike Kennedy, Utah
Rick Larsen, Washington (Ex Officio) Robert F. Onder, Jr., Missouri,
Vice Chairman
Sam Graves, Missouri (Ex Officio)
CONTENTS
Page
Summary of Subject Matter........................................ v
STATEMENTS OF MEMBERS OF THE COMMITTEE
Hon. Scott Perry, a Representative in Congress from the
Commonwealth of Pennsylvania, and Chairman, Subcommittee on
Economic Development, Public Buildings, and Emergency
Management, opening statement.................................. 1
Prepared statement........................................... 2
Hon. Greg Stanton, a Representative in Congress from the State of
Arizona, and Ranking Member, Subcommittee on Economic
Development, Public Buildings, and Emergency Management,
opening statement.............................................. 3
Prepared statement........................................... 5
Hon. Rick Larsen, a Representative in Congress from the State of
Washington, and Ranking Member, Committee on Transportation and
Infrastructure, opening statement.............................. 6
Prepared statement........................................... 7
WITNESSES
Andrew Heller, Acting Commissioner, Public Buildings Service,
U.S. General Services Administration, oral statement........... 9
Prepared statement........................................... 11
Heather Krause, Managing Director, Physical Infrastructure, U.S.
Government Accountability Office, oral statement............... 14
Prepared statement........................................... 15
Hon. Michael E. Capuano, Board Member, Public Buildings Reform
Board, oral statement.......................................... 21
Prepared statement........................................... 23
SUBMISSIONS FOR THE RECORD
Minority Staff Report of the Senate Permanent Subcommittee on
Investigations entitled, ``The $21.7 Billion Blunder: Analyzing
the Waste Generated by DOGE,'' July 31, 2025, Submitted for the
Record by Hon. Greg Stanton.................................... 6
APPENDIX
Questions to Andrew Heller, Acting Commissioner, Public Buildings
Service, U.S. General Services Administration, from Hon. Rick
Larsen......................................................... 41
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
December 5, 2025
SUMMARY OF SUBJECT MATTER
TO: LMembers, Subcommittee on Economic Development,
Public Buildings, and Emergency Management
FROM: LStaff, Subcommittee on Economic Development, Public
Buildings, and Emergency Management
RE: LSubcommittee Hearing on ``Cutting Costs, Adding
Value: The Future of Federal Property''
_______________________________________________________________________
I. PURPOSE
The Subcommittee on Economic Development, Public Buildings,
and Emergency Management of the Committee on Transportation and
Infrastructure will hold a hearing on Thursday, December 11,
2025 at 10:00 a.m. E.T. in 2167 of the Rayburn House Office
Building entitled, ``Cutting Costs, Adding Value: The Future of
Federal Property.'' The purpose of this hearing is to continue
the Subcommittee's focus on the need to consolidate Federal
agencies and sell unneeded space. The hearing builds on the
March 2025 hearing about implementing the public buildings
reforms passed last Congress. Witnesses will include the
General Services Administration (GSA), the Government
Accountability Office (GAO), and the Public Buildings Reform
Board (PBRB).
II. BACKGROUND
FEDERAL REAL ESTATE PORTFOLIO
GSA currently manages more than 8,300 owned and leased
assets, totaling over 365 million square feet, and 500 historic
buildings.\1\ The GAO reports that operating, maintaining, and
leasing office space costs more than $8 billion annually.\2\
The GSA has made efforts to reduce the amount of leased space,
but the portfolio remains underutilized. With more than half of
the GSA's operating leases (96 million square feet) expiring in
the next five years, the GSA must pivot to an efficient, cost-
effective and modern portfolio.\3\ While reviewing 24
headquarters buildings in 2023, GAO found that 17 of the
agencies under review were utilizing 25 percent or less of
their capacity.\4\ That same year, anonymized cell phone data
showed an average building occupancy of 12 percent from January
to September due to the sustained prevalence of remote and
hybrid work models among the Federal workforce.\5\
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\1\ Gen. Services Admin., GSA Accelerates Efforts to Right-size
Federal Real Estate with Plans for 1.5 Million Square Feet in
Reductions and More than $475 Million in Cost Avoidance to Taxpayers
(Dec. 4, 2024), available at https://www.gsa.gov/about-us/newsroom/
news-releases/gsa-accelerates-efforts-to-rightsize-federal-real-estate-
12042024.
\2\ U.S. Gov't Accountability Off., GAO-24-106919, Federal Real
Property: Actions Needed To Better Assess Office Sharing Pilot's
Broader Applicability (2024), available at https://www.gao.gov/
products/gao-24-106919.
\3\ Gen. Services Admin., Inventory Of GSA Owned and Leased
Properties (Sept. 9, 2022), available at https://www.gsa.gov/tools-
overview/buildings-and-real-estate-tools/inventory-of-gsa-owned-and-
leased-properties.
\4\ U.S. Gov't Accountability Off., GAO-23-107060, Federal Real
Property: Preliminary Results Show That Increased Telework and
Longstanding Challenges Led to Underutilized Federal Buildings (2023),
available at https://www.gao.gov/products/gao-23-107060.
\5\ PBRB, Public Buildings Reform Board Final Interim Report to
Congress (Mar. 21, 2024), available at https://www.pbrb.gov/files/2024/
03/3.21.24-FINAL-PBRB-Interim-Report.pdf.
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There have also been increasing reports of ``shadow'' or
``dark'' space in Federal buildings and leases--unassigned,
unused space.\6\ On January 20, 2025, the White House directed
all departments and agencies of the Executive Branch to
terminate remote work arrangements and require employees to
return to work in-person at their respective duty stations.\7\
Given these factors, the GSA has a unique opportunity to
significantly reduce space and dispose of underutilized and
unused Federal real estate.
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\6\ Gen. Services Admin., Unused & Underused Space (Jan. 25, 2023),
available at https://www.gsa.gov/real-estate/gsa-properties/unused-
underused-space.
\7\ The White House, Return to In-Person Work (Jan. 20, 2025)
available at https://www.whitehouse.gov/presidential-actions/2025/01/
return-to-in-person-work/.
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FEDERAL BUILDINGS FUND
In 1972, Congress authorized and established the Federal
Buildings Fund (FBF) under the Public Buildings Act Amendments
of 1972 (P.L. 92-313).\8\ The GSA funds new construction,
alterations and repairs, building maintenance, and lease
payments, as well as the Public Buildings Service (PBS),
through commercially equivalent rental payments by the GSA's
tenant agencies into the FBF.\9\ While the FBF is funded
through agency rents paid to the GSA, it is not a true
revolving loan fund.\10\ The funds are made available via
annual appropriations bills and projects exceeding $3.961
million must be authorized by the Committee on Transportation
and Infrastructure in the House and the Committee on
Environment and Public Works in the Senate.\11\ The GSA has not
had full access to the FBF since 2011, when appropriators began
using the FBF to offset other unrelated costs in the Financial
Services and General Government appropriations bill.\12\ The
FBF accrued $11.9 billion in revenue in 2021, 59 percent of
which was generated by five customer agencies: the Department
of Justice, the Department of Homeland Security, the Federal
Judiciary, the Social Security Administration, and the
Department of the Treasury.\13\
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\8\ Pub. L. No. 92-313, 86 Stat. 216.
\9\ Gen. Services Admin., Federal Buildings Fund (Feb. 1, 2021),
available at https://www.gsa.gov/reference/reports/budget-performance/
annual-reports/2020-agency-financial-report/managements-discussion-and-
analysis/financial-statements-summary-and-analysis/federal-buildings-
fund.
\10\ See 40 U.S.C. Sec. 592(c)(1).
\11\ Id.; 40 U.S.C. Sec. 3307.
\12\ Gen. Services Admin., Fiscal Year 2024 Congressional
Justification, Federal Buildings Fund (2024), available at https://
www.gsa.gov/reference/reports/budget-and-performance/annual-budget-
requests/previous-congressional-justifications/fy2024-congressional-
justifications.
\13\ Gen. Services Admin., 2021 Agency Financial Report (2021),
available at https://www.gsa.gov/system/files/GSA_AFR_FY21.pdf.
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DEFERRED MAINTENANCE BACKLOG
The GSA reported a $6.1 billion deferred maintenance and
repair backlog in fiscal year (FY) 2024, restoration projects
that are on the GSA's docket but have yet to be addressed. This
backlog grew from $1.39 billion in FY 2017.\14\ While
officially $6.1 billion, civilian agencies collectively
reported a deferred maintenance liability of $80 billion in FY
2022.\15\ This number could be significantly greater now. Most
recent budget documents do not communicate the amount of time
or finance required to address the ballooning bottleneck.\16\
The GAO, in its most recent Priority Open Recommendations
publication to the GSA, recommends the inclusion of an action
plan in the GSA's budget materials. As of February 2025, GSA
continues to develop a model to project the GSA's portfolio 10
years into the future, with anticipated completion in March
2026.\17\
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\14\ U.S. Gov't Accountability Off., GAO-25-108060, Priority Open
Recommendations: General Services Administration (May 16, 2025)
[hereinafter GAO-25-108060] available at https://www.gao.gov/products/
gao-25-108060.
\15\ Library of Congress, Deferred Maintenance and Repair at
Civilian Agencies: Causes, Risks, and Policy Options (2024) available
at https://www.congress.gov/crs-product/R48211.
\16\ GAO-25-108060 supra note 14.
\17\ Id.
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``THIRD ROUND'' OF THE PUBLIC BUILDINGS REFORM BOARD
The Public Buildings Reform Board (PBRB) was established in
2016 as an independent Board, charged with identifying
opportunities for the government to reduce significantly its
inventory of civilian real property and reduce government
costs.\18\ The PBRB submits recommendations for the disposal of
underutilized Federal properties in ``rounds'' to OMB. With
OMB's approval, the agency with jurisdiction over that property
(GSA, in most cases) is responsible for selling the selected
property. Slated to sunset in May 2025, the Thomas R. Carper
Water Resources Development Act of 2024 (WRDA 2024) extended
its term for a ``third round,'' after the Second Round produced
projected savings of $5.4 billion in cost-avoidance over a 30-
year period.\19\ The PBRB intends to release its ``Third
Round'' recommendations before the board sunsets in December
2026.\20\
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\18\ Federal Register, Public Buildings Reform Board, available at
https://www.federalregister.gov/agencies/public-buildings-reform-board.
\19\ Public Buildings Reform Board, Public Hearing (July 30, 2025),
available at https://www.pbrb.gov/files/2025/08/Public-Hearing-Boston-
July-2025-Final-PDF.pdf.
\20\ Id.
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FEDERAL REAL PROPERTY PROFILE DATABASE
The Federal Real Property Profile Management System (FRPP
MS) is the GSA's system which contains the Federal Government's
inventory of real estate under the custody of executive
agencies. FASTA mandated the accessibility of this data to the
public.\21\ In February 2020, 67 percent of addresses in the
public database were incomplete or incorrectly formatted. This
was followed with program guidance to help improve data
quality, provided by the Federal Real Property Council in
August 2024. The GSA has since implemented a tool to alert
agencies of potentially incorrect entries. However, the GAO
discovered in February 2025 that current location data still
contains errors. This coincides with an Executive Order (EO)
released in the same month, requiring agency heads to confirm
to the GSA that updates were submitted by March 5, 2025.\22\
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\21\ Gen. Serv. Admin., Federal Real Property Public Data Set
(2024), available at https://www.gsa.gov/policy-regulations/policy/
real-property-policy-division-overview/asset-management/federal-real-
property-profile-frpp/federal-real-property-public-data-set.
\22\ GAO-25-108060 supra note 14.
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OTHER KEY ISSUES
LThe GSA is in the process of reorganizing the
Public Buildings Service via a new ``function and
geographically focused'' approach to update the management
process.\23\
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\23\ Statement of Andrew Heller, (Acting) Public Buildings
Commissioner, Gen. Serv. Admin., at GSA Bi-Weekly Meeting (Sept. 29,
2025) (virtual meeting).
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LThe Department of Housing and Urban Development
(HUD) is in the process of moving to the current National
Science Foundation's (NSF) headquarters, with NSF's future
residence still pending. This will allow for the disposal of
the current Robert C. Weaver Federal Building headquarters.\24\
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\24\ Drew Friedman, `This is Going to be HUD Town:' Trump
Administration to Push NSF Out Of Virginia Headquarters, Fed. News
Network (June 25, 2025), available at https://federalnewsnetwork.com/
facilities-construction/2025/06/this-is-going-to-be-hud-town-trump-
administration-to-push-nsf-out-of-virginia-headquarters/.
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LThe Committee is now in receipt of the GSA's
prospectus to move the FBI headquarters from the J. Edgar
Hoover Building to the Ronald Reagan Building.\25\ Questions
regarding renovations, costs, and the timeline of such a move
remain.
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\25\ E-mail from Rachel Baker, Policy Advisor, Gen. Serv. Admin. to
H. Comm. on Transp. & Infrastructure (Sept 19, 2025, 1:35 EST) (on file
with Comm.).
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LThe GSA is currently working to develop a plan to
dispose of the United States Department of Agriculture (USDA)
Ag South Building headquarters as proposed by the PBRB.
Challenges with shared infrastructure between the Ag South
Building and the adjacent Whitten Building will need to be
addressed.\26\
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\26\ Statement of Christian Hazen, Deputy Regional Commissioner,
Pub. Buildings Serv., GSA Bi-Weekly Meeting (Sept. 29, 2025) (virtual
meeting).
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LFollowing discussions in our previous hearing,
the GSA is in discussions with the Department of Energy (DOE)
on moving out of the current DOE headquarters, the James V.
Forrestal Building, as has been a proposal by the PBRB and
Members of the House Committee on Transportation and
Infrastructure for several years.\27\ This aligns with the
National Capital Planning Commission's broader SW Ecodistrict
Plan and proposals by the District of Columbia.\28\
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\27\ America Builds: Making Federal Real Estate Work for the
Taxpayer, 119th Cong. (Mar. 5, 2025) (statement of David Winstead,
Board Member, Pub. Buildings Reform Board).
\28\ Nat'l Capital Planning Comm., SW Ecodistrict, available at
https://www.ncpc.gov/plans/swecodistrict/.
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III. PRIOR COMMITTEE ACTIONS
FEDERAL ASSETS SALE AND TRANSFER ACT (FASTA) AND THE FASTA REFORM ACT
OF 2023
In 2016, FASTA was enacted, which established a temporary
board, the Public Buildings Reform Board (PBRB), which is
composed of non-governmental experts who make recommendations
to OMB on the sale, disposal, or redevelopment of high value,
underused or unneeded Federal real property.\29\ The OMB then
approves or disapproves the packages of proposals and, if
approved, the GSA would execute the recommendations, allowing
agencies to retain a portion of the proceeds.\30\ Under FASTA,
agencies would be able to retain a portion of the sale proceeds
from such transactions as an incentive to dispose of excess
properties, but they would not be able to access those funds
until after the termination of the Board.\31\ FASTA also
codified the Federal Real Property Profile (FRPP) government-
wide database of real property and made it available to the
public.\32\
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\29\ Federal Assets Sale and Transfer Act of 2016 (FASTA), Pub. L.
No. 114-287, 130 Stat. 1463.
\30\ Id.
\31\ Id.
\32\ Id. at Sec. 21.
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In 2024, Congress passed the FASTA Reform Act of 2023,
which extended the authorization and enhanced the authority of
the PBRB and required the board to report annually to Congress
on Federal properties it recommends for disposal.\33\ The FASTA
Reform Act enables agencies to access these incentive funds
more quickly, fostering better collaboration and increasing the
efficiency of the Federal property management system for
taxpayers.\34\
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\33\ FASTA Reform Act of 2023, Pub. L. No. 118-272.
\34\ Id.
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PUBLIC BUILDINGS REFORMS IN THE WATER RESOURCES DEVELOPMENT ACT OF 2024
Last Congress, Title III of the WRDA 2024 introduced new
authorities to improve the management of Federal real
estate.\35\ In addition to the FASTA Reform Act, other reforms
were enacted to ensure that the Federal real estate portfolio
is better aligned with current operational needs.
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\35\ WRDA, Pub. L. No. 118-272.
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WRDA 2024, among other reforms, included the Utilizing
Space Efficiency and Improving Technologies (USE IT) Act of
2023 which mandated GSA and OMB establish standardized methods
for measuring office occupancy across Federal agencies.\36\ The
Act introduced a government-wide 60 percent occupancy metric,
directing Federal agencies to consolidate, repurpose, or sell
underused office space to increase operational efficiency and
reduce real estate costs.\37\ This initiative aims to maximize
space utilization, particularly in light of the ongoing shift
to hybrid and remote work models.\38\ The USE IT Act also
specifically directs that department and agency headquarters
buildings in the National Capital Region be consolidated and
excess space sold to meet the minimum 60 percent occupancy
metric.\39\
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\36\ Utilizing Space Efficiency and Improving Technologies (USE IT)
Act of 2023, Pub. L. No. 118-272.
\37\ Id.
\38\ PBRB, Public Buildings Reform Board Final Interim Report to
Congress (Mar. 21, 2024), available at https://www.pbrb.gov/files/2024/
03/3.21.24-FINAL-PBRB-Interim-Report.pdf.
\39\ USE IT Act of 2023, supra note 40.
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In addition, the reforms included the Federal Use It or
Lose It Leases (FULL) Act which requires the GSA and tenant
agencies to annually report their office space utilization
rates to Congress.\40\ Under the FULL Act, if an agency's
utilization rate falls below the 60 percent threshold for six
months out of a year, the tenant agency would be required to
return that underused space to GSA.\41\ This provision creates
an incentive for agencies to actively manage their real estate
holdings and reduce the financial burden of maintaining vacant
or underutilized property.
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\40\ Federal Use It or Lose It Leases Act, Pub. L. No. 118-272.
\41\ Id.
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Key actions mandated by these reforms include establishing
standard methodologies and identifying technologies for
measuring space occupancy in leased and owned facilities, and
deployment of such methodologies and technologies within 180
days of enactment of WRDA. Within one year of enactment, by
January 4, 2026:
LHeads of agencies are required to submit to the
OMB, the GSA, and Congress occupancy and actual utilization in
their owned and leased buildings, methodology used for
determining occupancy, and costs associated with capacity
exceeding actual occupancy;
LThe OMB, in consultation with the GSA, must
ensure actual building utilization in each owned and leased
building is not less than 60 percent on average and, if any
agency fails to meet or correct a lower usage percentage, the
bill requires the GSA to take steps to consolidate or sell
unused space;
LThe OMB, in consultation with the GSA, must
submit a plan to Congress to consolidate department and agency
headquarters building in the National Capital Region that will
result in building utilization rates of 60 percent or better;
LThe GSA must include in its occupancy agreements
with its tenant agencies a requirement for the tenant agencies
to provide the GSA with the needed utilization data; and
LHeads of agencies with their own real estate
authorities, independent of the GSA, must also report to
Congress utilization rates.\42\
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\42\ WRDA, Pub. L. No. 118-272.
On April 21, 2025, the OMB issued a memorandum for the
heads of Executive departments and agencies on the
implementation of the USE It Act providing guidance on
technologies for measuring space usage and information on
reporting required data.\43\ While the GSA is the lead agency,
along with the OMB in implementing many of the reforms, it is
unclear how agencies with independent real estate authorities
are being monitored. There are over 40 departments and agencies
with some sort of independent leasing authority outside of
GSA's authority.\44\
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\43\ Off. of Management and Budget, Memorandum for the Heads of
Executive Departments and Agencies (Apr. 21, 2025), available at
https://www.whitehouse.gov/wp-content/uploads/2025/02/M-25-25-
Implementation-of-the-Utilizing-Space-Efficiently-and-Improving-
Technologies-Act.pdf.
\44\ Technical Assistance on Identified Independent Leasing
Authority of Certain Civilian Federal Entities, GAO (Aug. 5, 2025) (on
file with Comm.).
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SPACE ACT OF 2025
The Shared Property Agency Collaboration and Engagement Act
of 2025 or the SPACE Act of 2025, sponsored by Rep. Robert F.
Onder, would expand section 2303 of WRDA and direct the GSA to
collaborate with tenants on shared-space arrangements. This
bill passed the House on September 8, 2025, and was referred to
the Senate Committee on Environment and Public Works for
further consideration.\45\
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\45\ H.R. 3424, SPACE Act of 2025, 119th Cong. (2025), available at
https://www.congress.gov/bill/119th-congress/house-bill/3424/
text?s=2&r=1.
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CASE ACT OF 2025
The Courthouse Affordability and Space Efficiency Act of
2025 or the CASE Act of 2025, sponsored by Rep. Jefferson
Shreve, mandates the optimization of courthouse space usage and
informs future courthouse construction through a policy of
courtroom sharing. This bill passed the House on September 15,
2025 and was referred to the Senate Committee on Environment
and Public Works for further consideration.\46\
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\46\ H.R. 3426, Courthouse Affordability and Space Efficiency
(CASE) Act of 2025, 119th Cong. (2025), available at https://
www.congress.gov/bill/119th-congress/house-bill/3426/text?s=4&r=1.
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IV. SUMMARY
This hearing will follow the Subcommittee's hearing from
March 5, 2025, ``America Builds: Making Federal Real Estate
Work for the Taxpayer,'' which examined strategies to transform
Federal real estate by consolidating, relocating, and selling
unused and underutilized spaces. The hearing builds on the
previous hearing, in addition to discussing related interests
in the deferred maintenance backlog, the Public Building Reform
Board's ``third round'', and updates on actions taken since
March on real property reform.
V. WITNESSES
LAndrew Heller, (Acting) Public Buildings Service
Commissioner, General Services Administration
LHeather Krause, Managing Director, Physical
Infrastructure, Government Accountability Office
LThe Honorable Michael E. Capuano, Member, Public
Buildings Reform Board
CUTTING COSTS, ADDING VALUE: THE FUTURE OF FEDERAL PROPERTY
----------
THURSDAY, DECEMBER 11, 2025
House of Representatives,
Subcommittee on Economic Development, Public
Buildings, and Emergency Management,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 10:03 a.m., in
Room 2167, Rayburn House Office Building, Hon. Scott Perry
(Chairman of the subcommittee) presiding.
Mr. Perry. The Subcommittee on Economic Development, Public
Buildings, and Emergency Management will come to order.
The Chair asks unanimous consent that the Chair be
authorized to declare a recess at any time during today's
hearing. Without objection, so ordered.
The Chair also asks unanimous consent that Members not on
the subcommittee be permitted to sit with the subcommittee at
today's hearing and ask questions. Without objection, so
ordered.
As a reminder, if Members wish to insert a document into
the record, please also email it to [email protected].
The Chair now recognizes himself for the purposes of an
opening statement for 5 minutes.
OPENING STATEMENT OF HON. SCOTT PERRY OF PENNSYLVANIA,
CHAIRMAN, SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC
BUILDINGS, AND EMERGENCY MANAGEMENT
Mr. Perry. I want to thank our witnesses for being here
today as we examine the Federal real estate portfolio.
Earlier this year, the subcommittee held a hearing to
discuss how we could make Federal real estate work for the
American taxpayer. Legislation that Congress has enacted, like
the USE IT Act and the Federal Asset Sale and Transfer Act, or
the FASTA, are intended to operate in lockstep to improve
abysmal space utilization rates, hold agencies accountable for
the amount of space they use, and rightsize the Federal
footprint.
As the Public Buildings Reform Board continues to
deliberate its next round of recommendations, I look forward to
hearing about the progress that has been made since our last
hearing and ensuring that reforms we passed last year are
helping. With an anticipated $5.4 billion in savings from its
``second round'' recommendations, this next round serves as an
opportunity to realize even more savings for the taxpayer.
I am also pleased that the GSA is taking aggressive action
to reduce costs, including taking steps to move HUD to allow
for the sale of the Weaver Building. Shaving off excess,
however, will not unilaterally rectify the numerous challenges
we face in Federal property, as the maintenance of the
buildings is becoming increasingly costly to upkeep.
The deferred maintenance liability grew from a mere $1
billion in fiscal year 2017 to a whopping $6 billion by fiscal
year 2022, and that is just what the GSA reported. In fiscal
year 2022, civilian agencies reported a collective deferred
maintenance liability of $80 billion.
We need to get a handle on these costs, and the
administration is moving to reduce taxpayer liability and
costs. But there are critical authorities and tools we provided
to the GSA in reforms signed into law on a bipartisan basis in
January of this year. To ensure those tools can effectively be
used, and it is important that the GSA ensures key deadlines
are met.
For example, in January of 2026, all Federal agencies
should be reporting to the GSA, the OMB, and Congress the data
on their space occupancy, methodology used, utilization rates,
and the costs associated with any excess space. Also, by next
month, all Federal office space is required to have an actual
building utilization rate of at least 60 percent, and those
buildings that don't have that utilization rate have then 1
year to correct, or the agencies are moved out and the space is
either sold or relinquished.
Finally, next January, the OMB and the GSA are to submit a
plan to consolidate Federal agency headquarters in the National
Capital area to meet the minimum 60-percent building occupancy
rate. The GSA was required to amend its occupancy agreements
with its tenant agencies to ensure those agencies agree to
provide the data that GSA needs. The GSA's proposed capital
investment projects are required to prioritize buildings that
meet or exceed the 60-percent utilization threshold.
There are additional requirements on the information
provided to the committee in prospectuses, and the GSA is now
required to report on key milestones on all prospectus-level
projects. It is critical for the GSA to meet these deadlines
and requirements, not only to save taxpayer dollars, but to
ensure accountability and transparency over the long term.
The Chair looks forward to hearing from the GSA on where we
are in rightsizing the portfolio and implementing these
reforms.
While the state of Federal real estate continues to face an
uphill battle, the policies of this Congress and this
administration have, and will continue to, accelerate this
important corrective work.
[Mr. Perry's prepared statement follows:]
Prepared Statement of Hon. Scott Perry, a Representative in Congress
from the Commonwealth of Pennsylvania, and Chairman, Subcommittee on
Economic Development, Public Buildings, and Emergency Management
Earlier this year, this subcommittee held a hearing to discuss how
we could make federal real estate work for the American taxpayer.
Legislation that Congress has enacted, like the USE IT Act and the
Federal Asset Sale and Transfer Act (FASTA), are intended to operate in
lockstep to improve abysmal space utilization rates, hold agencies
accountable for the amount of space they use, and right-size the
federal footprint.
As the Public Buildings Reform Board continues to deliberate its
next round of recommendations, I look forward to hearing about the
progress that's been made since our last hearing and ensuring that
reforms we passed last year are helping. With an anticipated $5.4
billion in savings from its ``Second Round'' recommendations, this next
round serves as an opportunity to realize even more savings for the
taxpayer.
I am also pleased that the GSA is taking aggressive action to
reduce costs, including taking steps to move HUD, to allow for the sale
of the Weaver Building. Shaving off excess, however, will not
unilaterally rectify the numerous challenges we face in federal
property, as the maintenance of the buildings is becoming increasingly
costly to keep up.
The deferred maintenance liability grew from a mere $1 billion in
fiscal year 2017 to a whopping $6 billion by fiscal year 2022; and
that's just what the GSA reported. In fiscal year 2022 civilian
agencies reported a collective deferred maintenance liability of $80
billion.
We need to get a handle on these costs. The Administration is
moving to reduce taxpayer liability and costs, but there are critical
authorities and tools we provided to the GSA in reforms signed into law
in January of this year. To ensure those tools can effectively be used,
it's important that the GSA ensures key deadlines are met.
For example, in January of 2026, all federal agencies should be
reporting to the GSA, the OMB, and Congress the data on their space
occupancy, methodology used, utilization rates, and the costs
associated with any excess space. Also, by next month, all federal
office space is required to have an actual building utilization rate of
at least 60 percent, and those buildings that don't have one year to
correct or the agencies are moved out and the space sold or
relinquished.
Finally, next January, the OMB and the GSA are to submit a plan to
consolidate federal agency headquarters in the national capital area to
meet the minimum 60 percent building occupancy rate. The GSA was
required to amend its occupancy agreements with its tenant agencies to
ensure those agencies agree to provide the data that the GSA needs. The
GSA's proposed capital investment projects are required to prioritize
buildings that meet or exceed the 60 percent utilization threshold.
There are additional requirements on the information provided to the
Committee in prospectuses, and the GSA is now required to report on key
milestones on all prospectus-level projects. It is critical for the GSA
to meet these deadlines and requirements, not only to save taxpayer
dollars, but to ensure accountability and transparency over the long
term.
I look forward to hearing from the GSA on where we are on right-
sizing the portfolio and implementing these reforms. While the state of
federal real estate continues to face an uphill battle, the policies of
this Congress and the Trump Administration have, and will continue to,
accelerate this important corrective work.
Mr. Perry. With that, I look forward to hearing from our
witnesses, but at this time, recognize Ranking Member Stanton
for 5 minutes for his opening statement.
OPENING STATEMENT OF HON. GREG STANTON OF ARIZONA, RANKING
MEMBER, SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS,
AND EMERGENCY MANAGEMENT
Mr. Stanton. Thank you very much, Mr. Chairman. Thank you
for the witnesses for being here today for this important
hearing.
This hearing is about two things: cutting costs and adding
value. That is the standard that the public expects from us,
and it should be the standard that we expect from ourselves.
Federal property is expensive, it can be complicated, and
central to how Government serves people. When we get these
decisions right, taxpayers save money and the agencies work
better. When we get them wrong, the public pays twice: once in
tax dollars and again in the quality of service that they
receive.
When I was mayor of Phoenix, real efficiency never came
from swinging an ax. It came from discipline, planning, and
knowing exactly how each decision affected the people we were
there to serve.
Government is not a corporation reworking a balance sheet.
It is a network of public responsibilities. Cuts that ignore
that reality don't create efficiency; they undermine it.
And we don't have to theorize about that; we just lived
through it. DOGE, the billionaire, tech-bro failure known as
the Department of Government Efficiency, was a textbook example
of what happens when you chase cuts without understanding
value. It drove Federal property decisions at a speed and scale
that outran planning, operational needs, and basic due
diligence. Agencies were told to vacate buildings before
replacement space was ready. These decisions were driven by
targets and assumptions, not by reliable, validated information
about how Federal space was being used or which functions
depended on it.
Mr. Chairman, I ask unanimous consent to enter into the
record the July 2025 minority staff report from the Senate
Permanent Subcommittee on Investigations.
Mr. Perry. Without objection, so ordered.
[The information follows Mr. Stanton's prepared statement.]
Mr. Stanton. That investigation found that DOGE wasted at
least $21.7 billion in just 6 months. It burned $14.8 billion
paying, roughly, 200,000 employees not to work. Then it pushed
more than 100,000 additional workers into administrative limbo,
costing taxpayers another $6.1 billion. It froze essential
projects from energy grid upgrades to medical research, wasting
hundreds of millions more, offering nothing in return.
DOGE is a clear example of what happens when you chase cost
and ignore value. I raise it here because, as ranking member, I
look forward to working with the chair to advance an approach
that recognizes efficiency as both cutting costs and adding
value, and I thank the chair for making those the focus of
today's hearing.
As we look ahead, DOGE also taught us another important
lesson. It exposed a deeper structural problem that complicates
this committee's work now and in the months to come.
We are responsible for overseeing all Federal property, but
GSA does not give us a clear, portfoliowide view of how Federal
buildings are being used. We get lease prospectuses. We get
scattered updates. We do not get a regular, comprehensive
report on the Public Buildings Service portfolio.
For a system this large, this expensive, and this central
to the function of Government, that blindspot is unacceptable.
DOGE showed how dangerous it is to make major space decisions
in that kind of fog. That is why I introduced bipartisan
legislation, cosponsored by Chairman Perry, requiring the GSA
Administrator to submit an annual report to Congress on the
state of the Federal real estate portfolio. That is basic
governance.
If we want real savings, real accountability, and real
value, we need complete information about the buildings where
Federal work is done, and we need to ensure that wherever we go
next, we are guided by data and the full scope of information.
Federal property is a public asset. It should strengthen
the work inside it and the people who rely on those services.
Today's hearing is an opportunity to learn from DOGE's
failures, insist on better data, and set a clear expectation
that cutting costs and adding value are equally important to
the future of Federal property.
I look forward to the testimony today. Thank you, Mr.
Chairman.
[Mr. Stanton's prepared statement follows:]
Prepared Statement of Hon. Greg Stanton, a Representative in Congress
from the State of Arizona, and Ranking Member, Subcommittee on Economic
Development, Public Buildings, and Emergency Management
Thank you, Mr. Chairman, and thank you to the witnesses.
This hearing is about two things: cutting costs and adding value.
That is the standard the public expects from us, and it should be the
standard we expect from ourselves. Federal property is expensive,
complicated and central to how government serves people. When we get
these decisions right, taxpayers save money and agencies work better.
When we get them wrong, the public pays twice--once in tax dollars and
again in the quality of service they receive.
When I was Mayor of Phoenix, real efficiency never came from
swinging an ax. It came from discipline, planning and knowing exactly
how each decision affected the people we were there to serve.
Government is not a corporation reworking a balance sheet. It is a
network of public responsibilities. Cuts that ignore that reality don't
create efficiency; they undermine it.
And we don't have to theorize about that; we just lived through it.
DOGE, the billionaire, tech-bro failure known as the Department of
Government Efficiency, was a textbook case of what happens when you
chase cuts without understanding value.
It drove federal property decisions at a speed and scale that
outran planning, operational needs and basic due diligence. Agencies
were told to vacate buildings before replacement space was ready. These
decisions were driven by targets and assumptions, not by reliable,
validated information about how federal space was being used or which
functions depended on it.
Mr. Chairman, I ask unanimous consent to enter into the record the
July 2025 Minority Staff Report from the Senate Permanent Subcommittee
on Investigations.
That investigation found that DOGE wasted at least $21.7 billion in
six months. It burned $14.8 billion paying roughly 200,000 employees
not to work. Then it pushed more than 100,000 additional workers into
administrative limbo, costing taxpayers another $6.1 billion. It froze
essential projects--from energy grid upgrades to medical research--
wasting hundreds of millions more and offering nothing in return.
DOGE is a clear example of what happens when you chase cost and
ignore value. I raise it here because, as Ranking Member, I look
forward to working with the Chair to advance an approach that
recognizes efficiency as both cutting costs and adding value, and I
thank the Chair for making those the focus of today's hearing.
As we look ahead, DOGE also taught us another important lesson. It
exposed a deeper structural problem that complicates this committee's
work now and in the months to come.
We are responsible for overseeing all federal property, but GSA
does not give us a clear, portfolio-wide view of how federal buildings
are being used. We get lease prospectuses. We get scattered updates. We
do not get a regular, comprehensive report on the Public Buildings
Service portfolio.
For a system this large, this expensive, and this central to the
functioning of government, that blindspot is unacceptable. DOGE showed
how dangerous it is to make major space decisions in that kind of fog.
That is why I introduced bipartisan legislation, cosponsored by
Chairman Perry, requiring the GSA Administrator to submit an annual
report to Congress on the state of the federal real estate portfolio.
This is basic governance. If we want real savings, real
accountability, and real value, we need complete information about the
buildings where federal work is done. And we need to ensure that
wherever we go next, we are guided by data and the full scope of
information.
Federal property is a public asset. It should strengthen the work
inside it and the people who rely on these services. Today's hearing is
an opportunity to learn from DOGE's failures, insist on better data,
and set a clear expectation that cutting costs and adding value are
equally important to the future of federal property.
I look forward to the testimony.
Minority Staff Report of the Senate Permanent Subcommittee on
Investigations entitled, ``The $21.7 Billion Blunder: Analyzing the
Waste Generated by DOGE,'' July 31, 2025, Submitted for the Record by
Hon. Greg Stanton
The 54-page report is retained in committee files and is available
online at the House of Representatives document repository at https://
docs.house.gov/meetings/PW/PW13/20251211/118689/HHRG-119-PW13-20251211-
SD003.pdf.
Mr. Perry. The gentleman yields back.
The Chair now recognizes the ranking member of the full
committee, Representative Larsen, for 5 minutes.
OPENING STATEMENT OF HON. RICK LARSEN OF WASHINGTON, RANKING
MEMBER, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
Mr. Larsen of Washington. Thank you, subcommittee Chair
Perry and Ranking Member Stanton, for convening today's hearing
on Federal real estate.
So, a lot has happened at the GSA since the beginning of
this year. At the beginning of the year, GSA's Public Buildings
Service had 5,655 full-time employees; now, that number is
3,126. That total would be even lower, but GSA reversed course
on 392 departures after realizing its inability to get all of
its work done.
At the beginning of the year, the Public Buildings Service,
or PBS, had 11 distinct geographic regions, but after a
reorganization, PBS is now structured, quote, ``based on
integrated functional operations which are centrally managed
with a portfolio structure that continues to support a
geographic presence nationwide.''
What does that mean? I don't know.
At the beginning of the year, PBS used its purchasing power
to encourage commercial landlords and Federal agency tenants to
adopt environmentally sustainable practices to reduce the
impact of climate change, promote energy efficiency, and save
money. But this administration rescinded Federal building
sustainability requirements and terminated PBS's efforts to
lease space for Federal tenants in ``green'' buildings.
At the beginning of the year, the White House had an East
Wing, and now it does not. At the beginning of the year, there
were no plans to build a privately funded ballroom on the White
House grounds, but that is exactly what is happening, without
the collaboration of Congress, without the collaboration of the
National Capital Planning Commission or the Commission of Fine
Arts.
The President started the project without first notifying
the public or consulting experts. We still don't know how much
it will cost, what it will look like, who is paying for
construction, and who will be responsible for ongoing
maintenance and repairs.
Over the course of the year, agencies were directed to
identify underutilized and unneeded owned and leased space for
disposal, and DOGE and the OMB utilized this information to
terminate 260 leases. That is an achievement, but there was
also significant chaos and mixed messaging surrounding the
disposal of buildings and the termination of leases.
In March, GSA published a list of 440 properties it
intended to dispose of, but the list disappeared from its
website within hours after observers noted that the list
included the headquarters of more than a dozen agencies,
including its own. GSA then issued a revised list with only 320
entries, but that list also disappeared from GSA's website the
next day.
Now, earlier this week as well, Bloomberg Law reported that
the White House is independently soliciting bids to recommend
the demolition of four Federal buildings in Washington, DC,
without the input of the GSA. According to a former director of
GSA's Office of Planning and Design, GSA has, quote, ``sole
authority over this process,'' yet it has not followed the
procedures required under historic preservation and
environmental laws for these buildings to be destroyed.
Now, I will say I am very pleased that GSA is making
progress on three Washington State land ports of entry--they
all happen to be in my district--but it has taken awhile to get
to where we are even today.
During a recent meeting of the Whatcom Council of
Governments, GSA staff shared plans to combine the design-build
contracts for the Kenneth G. Ward Land Port of Entry in Lynden
and the Sumas Land Port of Entry in Sumas. The current
expectation is that Lynden will start its construction
modernization first, then Sumas will follow approximately
midway through construction. This provides port operators the
ability to divert at least some of the Sumas commercial traffic
to the modernized Lynden port while the Sumas port is
modernized. Combining two of these projects will enable them to
complete both ports in 3 years instead of 4 and, hopefully, for
less money, something we can all support.
In conclusion, the administration said from the outset that
it plans to shrink the Government's real estate holdings by
offloading unnecessary leases and Federal buildings, and that
is a laudable goal. As I started talking yesterday with Chair
Perry, having a smaller and fuller Federal footprint should be
our goal, but the President has not been forthcoming about the
details and decisionmaking, and that is cause for concern.
So, I thank our witnesses for appearing before us today,
and hopefully we can get some answers. I look forward to their
testimony.
With that, I yield back.
[Mr. Larsen of Washington's prepared statement follows:]
Prepared Statement of Hon. Rick Larsen, a Representative in Congress
from the State of Washington, and Ranking Member, Committee on
Transportation and Infrastructure
Thank you, Subcommittee Chairman Perry and Ranking Member Stanton,
for convening today's hearing on federal real estate.
A lot has happened at General Services Administration (GSA) since
the beginning of 2025. At the beginning of the year, GSA's Public
Buildings Service (PBS) had 5,655 full-time employees; now, that number
is at 3,126.
That total would be even lower, but GSA reversed course on 392
departures after realizing its inability to get all its work done.
At the beginning of the year, PBS had 11 distinct geographic
regions, but after a ``reorganization,'' PBS is now structured ``based
on integrated functional operations which are centrally managed with a
portfolio structure that continues to support a geographic presence
nationwide.''
What does that actually mean? I don't know.
At the beginning of the year, PBS used its purchasing power to
encourage commercial landlords and federal agency tenants to adopt
environmentally sustainable practices to reduce the impact of climate
change, promote energy efficiency and save money.
But the Administration rescinded federal building sustainability
requirements and terminated PBS's efforts to lease space for federal
tenants in `green' buildings.
At the beginning of the year, the White House had an East Wing--and
now it does not. At the beginning of the year, there were no plans to
build a privately funded ballroom on the White House grounds. But that
is exactly what is happening without collaboration with Congress, the
National Capital Planning Commission or the Commission on Fine Arts.
The president started the project without first notifying the
public or consulting experts. We still don't know how much the project
will cost, what the ballroom will look like, who is paying for
construction, and who will be responsible for ongoing maintenance and
repairs.
Over the course of the year, agencies were directed to identify
underutilized and unneeded owned and leased space for disposal.
DOGE and OMB utilized this information to terminate 260 leases.
That is an achievement. But there was also significant chaos and mixed
messaging surrounding the disposal of buildings and the termination of
leases.
In March, GSA published a list of 440 properties it intended to
dispose of, but the list disappeared from its website within hours
after observers noted that the list included the headquarters of more
than a dozen agencies-- including its own.
GSA then issued a revised list with only 320 entries, but that list
also disappeared from GSA's website the next day.
Earlier this week, Bloomberg Law reported that the White House is
independently soliciting bids to recommend the demolition of four
federal buildings in Washington, D.C., without the input of GSA.
According to a former director of GSA's Office of Planning and
Design, GSA has ``sole authority over this process,'' yet it has not
followed the procedures required under historic preservation and
environmental laws for these buildings to be destroyed.
I am pleased that GSA is making great progress on the three
Washington State Land Ports of Entry (LPOE) projects, but it takes a
while.
During a recent Whatcom Council of Governments meeting, GSA staff
shared plans to combine the design-build contracts for the Kenneth G.
Ward Land Port of Entry in Lynden and the Sumas Land Port of Entry in
Sumas.
The current expectation is that Lynden will start its construction
modernization first and then Sumas will follow approximately midway
through construction. This provides port operators the ability to
divert at least some of Sumas' commercial traffic to the modernized
Lynden port, while the Sumas port is modernized.
Combining two of the projects will enable them to complete both
ports in three years instead of four and, hopefully, for less money--
something we all can support.
In conclusion, the Administration said from the outset that it
plans to shrink the government's real estate holdings by offloading
unnecessary leases and federal buildings--and that is a laudable goal.
But the president has not been forthcoming about the details and
the decision-making and that is cause for concern.
I thank our witnesses for appearing before us today, and I look
forward to their testimony.
Mr. Perry. The Chair thanks the ranking member of the full
committee.
And we will now, let me see, turn to the statements from
our witnesses. I want to thank our witnesses for taking the
time to be here today and for coming in.
I would like to take a moment to explain our lighting
system for anybody that is new here so you know what you are
doing there. There are three lights in front of you. Green
means go, yellow means you are kind of running out of time,
about a minute left, and red means to please conclude your
remarks if you haven't done so already.
And that means you too, Mr. Capuano. I know you know
better, right. [Laughter.] You can't get away with ``I didn't
know.''
The Chair now asks unanimous consent that the witnesses'
full statements be included in the record, and, without
objection, so ordered.
The Chair also asks 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. Without objection, so ordered.
The Chair also asks unanimous consent that the record
remain open for 15 days for any additional comments and for
information submitted by Members or the witnesses to be
included in the record of today's hearing. Without objection,
so ordered.
As your written testimonies have been made part of the
record, the subcommittee now asks that you limit your oral
remarks to 5 minutes. And with that, Mr. Heller, you are
recognized for 5 minutes for your testimony.
TESTIMONY OF ANDREW HELLER, ACTING COMMISSIONER, PUBLIC
BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION;
HEATHER KRAUSE, MANAGING DIRECTOR, PHYSICAL INFRASTRUCTURE,
U.S. GOVERNMENT ACCOUNTABILITY OFFICE; AND HON. MICHAEL E.
CAPUANO, BOARD MEMBER, PUBLIC BUILDINGS REFORM BOARD
TESTIMONY OF ANDREW HELLER, ACTING COMMISSIONER, PUBLIC
BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION
Mr. Heller. Good morning, Chairman Perry, Ranking Member
Stanton, and members of the subcommittee. My name is Andrew
Heller, and I am the Acting Commissioner of the Public
Buildings Service at the U.S. General Services Administration,
where I have proudly served as a career civil servant for
almost 22 years. Thank you for the opportunity to discuss the
future of Federal real property management. I appreciate the
committee's invitation to appear before you today.
I would also like to thank this subcommittee for its
ongoing engagement in public buildings management and
advocating for full access to the Federal Buildings Fund.
Simply put, the Government no longer needs, nor can it afford
to maintain, the amount of real estate it currently owns. With
your support and with the necessary resources, GSA is well
positioned to rightsize the portfolio.
To support this shared goal, GSA is focused on disposing of
underutilized buildings with significant liabilities and
investing in buildings that are core to the Government's needs.
Where cost-effective, we will use leasing to meet general
office space requirements.
I am proud to report that GSA has made great strides. Last
year, we executed 90 building dispositions, reducing the
Government's footprint by more than 3 million square feet.
Those building sales generated $182 million in proceeds and
avoided $415 million in repairs and operating costs.
GSA also identified 45 additional assets for disposition.
With your continued support, those dispositions will further
reduce the inventory by 15 million square feet and avoid an
additional $3 billion in future repairs and operating costs.
GSA also continues to focus on the efficient management of
its lease portfolio, generating $730 million in cost avoidance
through lease negotiations and inventory reductions. However,
GSA continues to face challenges.
As the GSA Administrator nominee, Ed Forst, said at his
confirmation hearing, ``American taxpayers shoulder billions of
dollars in delinquent maintenance costs under the Federal
Government's current real estate portfolio. These costs are
likely underestimated and will only grow if left unaddressed.''
GSA requires resources to optimize its aging inventory.
Unfortunately, the Federal Buildings Fund has been underfunded
by $15 billion since 2011. It is no coincidence that, during
this time, delinquent maintenance has also risen exponentially,
to approximately $26 billion, which is not sustainable.
In fiscal year 2026, we are requesting $10.5 billion in
budget authority, a request that is equal to our anticipated
levels of revenue collections. Without access to this funding,
we are unable to maintain facilities in a manner that our
customer agencies expect, and we are unable to optimize the
portfolio in a way that the taxpayers deserve.
This request includes $365 million for an optimization
program. This program will help us dispose of underperforming
buildings, improve the quality of core assets, and implement
lease strategies to save taxpayer money. With this committee's
full authorization of the program and with full funding, GSA
has projects ready to execute that will save the taxpayer
hundreds of millions of dollars.
In the absence of full funding, GSA continues to work with
Congress, occupant agencies, and the Public Buildings Reform
Board to dispose of unneeded properties in an expedited manner.
Through our partnership with the Board, GSA recently sold the
former U.S. Geological Survey campus in Menlo Park, California.
This sale generated $137 million in proceeds, reduced the size
of the portfolio by almost half a million square feet, and
saved taxpayers more than $110 million in estimated repairs and
operating costs.
The President's budget request also supports the Asset
Proceeds and Space Management Fund. Access to this funding is
critical, since it is intended to cover the upfront costs
associated with footprint reduction. One recent example of a
project using this funding is the William O. Lipinski Federal
Building in Chicago. By investing $20 million up front to
relocate the tenant, the taxpayers will realize over $161
million in savings by eliminating delinquent maintenance
liabilities and reducing space. This is just one example of
sensible solutions that GSA can implement if funding is made
available to cover upfront costs.
Your support is vital to rightsizing the Federal footprint,
and I humbly request the committee's support for GSA's budget.
I look forward to partnering with the distinguished members
of this committee to address the key priorities that drive
efficiency and effectiveness in Federal real estate. Thank you
for the opportunity to testify before you today, and I look
forward to answering any questions you may have.
[Mr. Heller's prepared statement follows:]
Prepared Statement of Andrew Heller, Acting Commissioner, Public
Buildings Service, U.S. General Services Administration
Introduction:
Good morning, Chairman Perry, Ranking Member Stanton, and
distinguished Members of the Subcommittee. My name is Andrew Heller,
and I am the Acting Commissioner of the Public Buildings Service (PBS)
at the U.S. General Services Administration (GSA). I appreciate the
Committee's invitation to appear before you today to discuss PBS's
management of federal real property.
I would also like to thank this Subcommittee for its ongoing
engagement in public buildings management, including through its
oversight and prospectus approvals, and by advocating for full access
to the Federal Buildings Fund (FBF) to ensure GSA has the resources
necessary to optimize and improve its real property portfolio.
Additionally, the real property reforms supported by this Committee
and enacted in Title III of the Thomas R. Carper Water Resources
Development Act of 2024 are important steps toward improving federal
real property management. GSA is working closely with the Office of
Management and Budget, the Comptroller General of the United States,
and applicable agencies to implement the Act and we look forward to
making continued progress to implement this statute.
GSA is well positioned to deliver once-in-a-generation value to the
American taxpayers and capitalize on this unique opportunity to right-
size the portfolio by making smart and strategic investments that
meaningfully reduce the size of the federal footprint. The government
no longer needs, nor can it afford to maintain, the amount of real
estate it currently owns. At the same time, GSA is cognizant of the
impact of putting too many buildings on the market at the same time,
and we will therefore manage the oversight of the sale of Federal
property strategically and in close coordination with OMB.
GSA's strategy for right-sizing its portfolio is to dispose of
underfunded, high liability federally owned facilities, and invest our
limited capital on core buildings the Federal government needs to
retain over the long term. To be successful, GSA will leverage our
leasing authority as a more flexible tool for procuring general use
office space on behalf of our customer agencies.
I'm proud to report that GSA has made great strides towards
optimizing our footprint and meeting these goals. For example, in
Fiscal Year 2025 we have--
Executed 90 governmentwide real property dispositions
including Federal Asset Sales and Transfer Act properties, resulting in
a reduction of more than 3 million square feet and 8,000 acres of land,
generating over $182 million in sales proceeds, and avoiding $415
million in estimated capital repairs and operating costs;
Identified 45 GSA assets for accelerated disposition,
representing 14.6 million square feet and $3 billion in estimated
capital repairs and operating costs; and
Generated approximately $730 million in cost avoidance by
terminating unneeded leases, reducing leased space where appropriate,
and negotiating leases with better terms.
I would like to thank the Subcommittee for recently recognizing in
its `Views and Estimates for FY 2026' the significant challenges GSA
faces due to an aging inventory, difficulties disposing of excess
property, and lack of full access to the FBF, which has, over the past
fifteen years, increased deferred maintenance costs to the point that
they have become delinquent maintenance costs. GSA charges federal
agencies a commercially equivalent rent for the space they occupy, with
the expectation that these funds will be used to properly maintain the
space. However, with approximately $15 billion in FBF agency rent
collections utilized for other purposes over the past 15 years, it has
become exceedingly difficult to properly maintain our core assets in a
state of good repair.
As our nominee for GSA Administrator, Ed Forst said at his
confirmation hearing, ``American taxpayers shoulder billions of dollars
in delinquent maintenance costs under the federal government's current
real estate portfolio. Those costs are likely underestimated and will
only grow if left unaddressed.''
It is no coincidence that GSA's delinquent maintenance, as noted by
Mr. Forst, has risen to approximately $26 billion as identified through
GSA's portfolio planning efforts. By Mr. Forst reframing this issue as
delinquent maintenance, GSA is intending to highlight the operational
impacts of inaction and a lack of access to the FBF.
Real Property Optimization:
To help address this unique challenge, GSA has proposed a
transformational Optimization Program in the President's FY 2025 and
2026 budget requests. In FY 2026, GSA is requesting $365 million in
funding for the real property Optimization Program. The purpose of the
fund is three-fold:
1. Seizing the opportunity before us and dispose of
underperforming buildings,
2. Investing in core assets to improve the quality of the
remaining portfolio, including investing in beautiful buildings, and
3. Implementing cost-effective lease strategies that save money
and shift the maintenance burden to the private sector.
Optimization projects will add value to the federal real property
portfolio and be selected based on the following priorities:
1. Favorable Taxpayer Savings: The project clearly reduces agency
costs, avoids future liabilities, or addresses existing ones.
2. High Readiness: The project requirements are well-defined, cost
estimates are solid, and we are well positioned to start executing the
project.
3. Acceptable Risk: The project has manageable complexity, without
extensive phasing or major modernization, and tenants can be housed in
cost effective solutions.
I would like to thank the committee for its partial authorization
of this program on a markup earlier this summer. If full funding and
authorization for this transformational special emphasis program is
received, some examples of Optimization Projects could include:
Captain John F. Williams Coast Guard Building--Boston,
Massachusetts: By disposing of this 134,000 square foot underutilized
building that has a 39% vacancy rate in a high value market, and
consolidating a majority of tenants into an existing GSA core asset, we
will reduce costs, improve the condition of our portfolio and reduce
the size of the federal footprint.
+ This project has Favorable Taxpayer Savings: Disposition of
the asset will avoid almost $30 million in capital maintenance
liabilities.
+ It also has a High Level of Readiness: In anticipation of
potential funding allocated in FY 2026, we are proactively developing
space requirements and project schedules with our tenants.
+ And it is considered to be Low Risk: The project would reduce
the current tenant footprint by 68%, removing an estimated 60,000
square feet from our inventory by consolidating agencies into more
functional and efficient space. Tenants are engaged with requirements
development and project schedules, and GSA is preparing the core asset
to absorb the United States Coast Guard, which is the facility's
primary tenant, into its space.
312 N. Spring Street Federal Building and Courthouse--Los
Angeles, California: By disposing of this large 715,000 square feet
building that has a 35% vacancy rate in the highly valued downtown Los
Angeles market, and relocating tenants into commercial leased space,
the government can achieve greater efficiency and reduce ongoing
maintenance burdens.
+ This project also has Favorable Taxpayer Savings: Disposition
of the asset will avoid almost $153 million in capital maintenance
liabilities.
+ In anticipation of potential funding allocated in FY 2026, we
are proactively working requirements with our tenants, so it has a High
Level of Readiness.
+ And it is Low Risk: The project would reduce the tenant
footprint by 66%, removing an estimated 344,000 square feet from our
inventory. The Los Angeles market has a surplus of potentially cost
effective leasing solutions.
Recent Disposition Announcements:
Although full access to the FBF would facilitate more common sense
solutions, GSA continues to work with Congress, the Public Buildings
Reform Board (PBRB) and federal agencies to identify and dispose of
more properties in an expedited manner. Some examples of recently
completed dispositions include:
1. Huntsville, Alabama: GSA completed the conveyance of the
Huntsville Courthouse and Post Office to the City of Huntsville,
Alabama on September 15, 2025. Conveyance of this property will save
taxpayers more than $520,000 annually in operating and maintenance
costs and avoid over $10 million in estimated capital repairs over the
next 10 years.
2. Menlo Park, California: GSA completed the public sale of the
former United States Geological Survey campus in Menlo Park, generating
$137 million in proceeds and offloading over 412,000 square feet. The
sale will save taxpayers close to $4 million annually in operating and
maintenance costs and avoid $107 million in estimated capital repairs.
This property was identified for disposition under the Federal Assets
Sale and Transfer Act (FASTA).
3. Des Moines, Iowa: GSA successfully sold the historic United
States Courthouse in Des Moines in September 2025 for $2.6 million
after completion of the new courthouse. The sale will save taxpayers
over $1.6 million annually in operating and maintenance costs and avoid
over $27 million in estimated capital repairs over the next 10 years.
The sale returns a prime downtown riverfront location to productive re-
use.
4. Charlottesville, Virginia: GSA worked with the Department of
Education to convey the former Federal Executive Institute campus in
Charlottesville to the University of Virginia (UVA) for a new campus
ROTC center. GSA worked closely with the State Historic Preservation
Office to satisfy historical preservation requirements, and coordinated
closely with UVA to expedite this transfer after the Department of
Education selected UVA as the grantee. This conveyance helps turn
91,000 square feet and 13 acres of surplus Federal real property into a
center that educates future military leaders.
5. Washington, DC: GSA is working with its private sector broker
partners to sell the Liberty Loan Building, a truly unique opportunity
in the heart of Washington, DC. While the disposition has not been
finalized yet, there is significant market interest with over 100
registrations and over two dozen tours. Initial offers are due later
this month.
Fiscal Year 2026 Request:
In FY 2026, GSA is requesting net zero obligational budget
authority equal to its anticipated annual revenues and collections for
a total of approximately $10.5 billion in gross budget authority for
the FBF. The requested New Obligation Authority (NOA) includes $1.7
billion for GSA's Capital Investment Program whose funds are used to
repair mission critical federally owned facilities and facilitate the
disposition of underutilized assets through the optimization of core
federal buildings. The request also includes more than $3 billion for
Building Operations to support operating expenses.
As you know, agencies make rental payments to GSA with the
expectation that such funds will be used to properly maintain the
facilities they occupy. GSA's FY 2026 budget request highlights the FBF
and certain challenges we have experienced over the past fifteen years
due to a lack of appropriated funding commensurate with the annual
revenues and collections deposited in the FBF. Simply put, we are not
able to maintain facilities in a manner that our customer agencies
expect due to these funding challenges. While increasing dispositions
and relying more on leases for general use office space will help to
address this issue, funding will be needed to facilitate the
dispositions and to maintain our core assets in a state of good repair.
The President's budget request for GSA also supports the Asset
Proceeds and Space Management Fund (APSMF). The purpose of the fund is
to carry out actions recommended by the PBRB and approved by the Office
of Management and Budget (OMB), consistent with the FASTA law. Access
to these sales proceeds allows GSA to consolidate the federal
footprint, maximize the utilization rate of federal buildings and
facilities, reduce operating and maintenance costs, and expedite the
sale or disposal of underutilized federal properties, which is why we
are requesting $193.3 million in FY26.
One recent example of a project that utilized the APSMF is the
William O. Lipinski Federal Building in Chicago, Illinois. By disposing
of this underutilized property, the taxpayers will realize over $161
million in savings by eliminating delinquent maintenance liabilities.
The APSMF funding has been critical to making this upcoming disposition
possible, as it provides resources to cover essential move and personal
property costs for the existing tenant agency. These costs have
historically been an obstacle to right-sizing because the tenant agency
lacked dedicated funding. By investing $20 million in disposition-
related costs funded by the APSMF, we enable the tenant's transition,
downsize their footprint by over 30%, and house the majority of their
operations in a modern leased solution.
Let me say that again. With an upfront investment of less than $20
million using the proceeds from the sale of other federal real estate
assets, the taxpayers can realize a savings of $161 million. These are
the types of common sense real estate solutions that GSA can implement
if funding is made available to cover the upfront costs associated with
consolidation and disposition.
PBS Reorganization:
I would like to take a moment to discuss how the PBS organization
is changing to drive efficiency, flexibility, consistent service
delivery, and innovation that will generate long-term savings and add
value to the future state of federal real property:
1. Improve Operations and Efficiency: The PBS organization is
transitioning to a fully integrated functional model, rather than a
regional geographic structure. PBS is standardizing processes and
streamlining operations by functional area to drive greater efficiency.
2. Construct A More Flexible Workforce: By integrating business
functions on a national scale rather than being constrained by
geographical boundaries, PBS can more efficiently leverage workload
imbalances and allocate resources according to changing demands, while
maintaining the geographic presence necessary to manage a large and
dispersed real property portfolio.
3. Deliver Exceptional Customer Service: By driving consistency in
standards, operations, and processes, PBS will improve service
delivery. PBS has incorporated feedback from our customer agencies and
stakeholders regarding the need for more consistency. This integrated
functional alignment will improve consistency across PBS programs and
result in improved service delivery.
4. Leverage New Technologies and Processes: PBS is developing new
ways of conducting business through this realignment and
standardization by using new technologies, improving our data
infrastructure and analytics, and developing innovative real estate
solutions.
PBS began operating in this new organizational structure in late-
October. GSA is appreciative of this Committee's support and
partnership of our realignment and Fiscal Year (FY) 2026 budget
request, which will help GSA more effectively serve our customers and
the American taxpayer. Feedback from our stakeholders has been
positive.
Conclusion:
In conclusion, as federal real property needs continue to evolve,
GSA is well positioned to deliver savings and enhance collaboration
with customer agencies, this Committee, and other Congressional
stakeholders.
Your support is vital to right-sizing the Federal footprint, and I
humbly request the Committee's support for GSA's FY 2026 budget
request, including key investments in the Federal Buildings Fund and
the Asset Proceeds and Space Management Fund. These tools will help to
reshape the Federal footprint by making GSA's portfolio smaller, more
functional, and less expensive to operate and maintain.
I am very proud of the work that we are doing to help return GSA to
its founding mission drafted over 75 years ago--a mission designed to
help customer agencies achieve their missions through cost-effective
real estate management.
I look forward to partnering with the distinguished members of this
Committee to address the key priorities that drive efficiency and
effectiveness in federal real estate. Thank you for the opportunity to
testify before you today, and I look forward to answering any questions
you may have.
Mr. Perry. The Chair thanks the gentleman.
And the Chair now recognizes Ms. Krause, and you are
recognized for 5 minutes.
TESTIMONY OF HEATHER KRAUSE, MANAGING DIRECTOR, PHYSICAL
INFRASTRUCTURE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Ms. Krause. Thank you, Chairman Perry, Ranking Member
Stanton, Ranking Member Larsen, and members of the
subcommittee. I am pleased to be here today to discuss the
future of Federal property.
There is a unique opportunity right now to transfer the
Federal Government's footprint. For decades, GAO has reported
that the Federal Government has too much space, that its
buildings are often in poor condition, and that agencies don't
have good data to make real property decisions. There have been
efforts in the past to rightsize the Federal footprint, but
these underlying issues have persisted. Agencies have often
been too slow to shed unneeded space, and when they have, it
has been challenging to do so. The pandemic shined a spotlight
on these problems.
In response, Congress and the executive branch have taken
actions that have generated significant momentum for
transforming Federal real property management. To sustain this
momentum and ensure it leads to an effective result, it is
essential that GSA and other stakeholders continue to focus on
action taken in a deliberate and well-planned manner. Doing so
could generate substantial savings for the American taxpayer,
while mitigating the risk of costly mistakes and mission
impacts.
GSA's Public Buildings Service, or PBS, will be key to how
well this transformation plays out over the next several years.
The office plays a critical role in not only serving tenant
agencies, but also helping to improve the efficiency of the
Federal Government's vast real property holdings. Given that,
it is imperative that PBS's reorganization be a success.
We are currently evaluating PBS's reorganization efforts
and how well they line up with leading reform practices. Those
practices provide a path for any agency undergoing a major
reorganization to do so in the most effective way possible.
These practices will be particularly important for PBS given
the significant staff and leadership turnover it has had this
year. We plan to issue the results of our evaluation, with
recommendations, in early 2026.
In conclusion, rightsizing the Federal Government's real
property holdings is long overdue. It is essential that
Congress and the executive branch sustain the momentum to
transform Federal property management with a focus on well-
planned, deliberate action. Doing so will best position the
Federal Government to cut costs while adding value. This will
help ensure agencies have the right space to successfully carry
out their missions, while achieving the most efficient and
effective result for the American taxpayer.
Chairman Perry, that concludes my opening statement. I am
happy to answer any questions.
[Ms. Krause's prepared statement follows:]
Prepared Statement of Heather Krause, Managing Director, Physical
Infrastructure, U.S. Government Accountability Office
Federal Real Property: Successful Public Buildings Service
Reorganization Is Critical for Addressing Longstanding Challenges
GAO Highlights
What GAO Found
Federal real property management has faced longstanding challenges.
The General Services Administration (GSA) and its component office, the
Public Buildings Service (Buildings Service), play a central role in
addressing the high-risk issues identified by GAO of underused
buildings, real property data reliability, and building condition.
Underused buildings. Federal agencies, many of which are
tenants in buildings managed by the Buildings Service, have long
struggled to determine how much space they need to fulfill their
missions. Retaining this underused space costs millions of dollars.
While the issue remains on GAO's High-Risk List, GSA and others have
taken steps to address underused buildings in recent years. For
example, in March 2025, GSA launched a program called Space Match to
help agencies find available office space in underused federal space.
According to GSA, potential benefits of the program include helping
agencies find available space as employees return to in-person work;
optimizing the use of underused space; and creating a collaborative
work environment for agencies.
Data reliability. Without reliable data, supporting real
property management and decision making is difficult. GAO has
identified problems with the reliability of federal real property data
since GAO first designated management of federal real property as a
High-Risk area in 2003. GSA has taken steps to improve the reliability
of real property data, including contributing to new quality standards
in August 2024.
Building Condition. In the 2025 High-Risk Update, GAO
added building condition as a new concern for federal real property due
to large increases in the cost of addressing deferred maintenance in
federal buildings. This backlog of maintenance and repair needs has
more than doubled in estimated cost from fiscal years 2017 through
2024, going from $170 billion to $370 billion. In addition, GAO found
in 2023 that the spaces of federal agencies, many of which are GSA
tenants, are not well configured to meet modern office needs. If
agencies continue to operate in poorly configured office buildings,
they will continue to underuse space, spending unnecessary operating
funds. GSA and Buildings Service tenant agencies are taking steps to
improve building condition and configuration, but challenges remain.
As instructed by the administration, the Buildings Service began a
major reorganization in March 2025, which has included reducing staff
levels by about 50 percent. Buildings Service officials told GAO in
September 2025 that they planned to finalize this reorganization in
October 2025. GAO has not confirmed with GSA how the recent lapse in
appropriations affected its implementation timeline. GAO will issue a
report in the coming months applying leading practices for agency
reforms to the Buildings Service's reorganization efforts. GAO's past
work has shown that agency reforms are more likely to be successful in
refocusing and enhancing agency missions and achieving efficiency and
effectiveness if they follow these leading practices.
Why GAO Did This Study
Federal real property management has been on GAO's High-Risk List
since 2003. GAO has previously reported that better management is
needed to effectively dispose of underused buildings, collect reliable
real property data, and improve the condition of federal buildings. The
Buildings Service's primary mission is to manage federal real property.
In March 2025, the Buildings Service began taking reorganization
actions.
This statement discusses how the issues of underused buildings,
data reliability, and the condition of federal buildings on the High-
Risk List relate to GSA and the efforts GSA's Buildings Service has
taken to reorganize as of October 2025. This work is a part of a review
for Congress on the organization and management of the Buildings
Service.
GAO's description of the relationship of the high-risk issues to
GSA is based on GAO's prior work and reflects GAO's most recent High-
Risk Update, released on February 25, 2025. As of May 2025, GAO has
eight open priority recommendations to GSA on real property High-Risk
issues, including property disposal, data reliability, and the
management of deferred maintenance and repair. See GAO-25-108060.
To identify the steps the Buildings Service has taken to
reorganize, GAO reviewed GSA documents and interviewed GSA officials.
__________
December 11, 2025
Chairman Perry, Ranking Member Stanton, and Members of the
Subcommittee:
Federal real property management has been on GAO's High-Risk List
since 2003.\1\ We have previously reported that better management is
needed to effectively dispose of underused buildings, collect reliable
real property data, and improve the condition of federal buildings.
While the challenges of managing federal real property are
governmentwide, the Public Buildings Service (Buildings Service),
within the General Services Administration (GSA), is the agency
component whose primary mission is to manage federal real property.
Specifically, the Buildings Service's mission is to provide workspace
for more than 1 million federal employees at the best value for
taxpayers.
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\1\ Since the early 1990s, our high-risk program has focused
attention on government operations with significant vulnerabilities to
fraud, waste, abuse, and mismanagement or that need transformation to
address economy, efficiency, or effectiveness challenges. GAO, High-
Risk Series: Heightened Attention Could Save Billions More and Improve
Government Efficiency and Effectiveness, GAO-25-107743 (Washington,
D.C.: Feb. 25, 2025).
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As of September 2025, the Buildings Service's portfolio includes
about 8,500 owned and leased properties covering, 359 million square
feet and housing 80 tenant agencies. It collects more than $10 billion
annually in rent from its tenants and provides tenants with a broad
range of real estate services, including maintaining owned buildings,
negotiating leases, disposing of unneeded properties, and helping
agencies plan their real property portfolios. The administration has
expressed a desire for a smaller and more efficient federal workforce,
including in its February 26, 2025, memo, Guidance on Agency Reduction
in Force and Reorganization Plans (ARRP). Since March 2025, the
Buildings Service has been engaged in a large-scale reorganization.
Buildings Service officials told us in September 2025 that they planned
to finalize this reorganization in October 2025. GAO has not confirmed
with GSA how the recent lapse in appropriations affected its
implementation timeline. The successful implementation of this
reorganization will be critical for the Buildings Service's ability to
address longstanding real property management challenges moving
forward.
My statement today discusses: (1) how the recommendations made
concerning issues of underused buildings, data reliability, and the
condition of federal buildings on GAO's High-Risk List relate to GSA;
and (2) the reorganization efforts of GSA's Buildings Service as of
October 2025. We plan to report more fully on the Buildings Service's
reorganization in the coming months. Our description of GSA's efforts
to address high-risk issues is based on GAO's prior work and reflects
GAO's latest High-Risk Update, released on February 25, 2025.\2\ To
identify the efforts the Buildings Service has made to reorganize, we
reviewed pertinent documents and interviewed GSA officials.
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\2\ GAO-25-107743.
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We conducted the work on which this statement is based in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe the
evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
GSA Actions Have Resulted in Improvements to the High-Risk Area of
Managing Federal Real Property, but More Progress is Needed
Underused Buildings
Federal agencies, many of which are tenants in buildings managed by
the Buildings Service, have long struggled to determine how much space
they need to fulfill their missions. Retaining underused space costs
millions of dollars and is one of the main reasons that federal real
property management has remained on GAO's High-Risk List since 2003.
The following are key actions that Congress, GSA, and others have taken
to address underused buildings in recent years.
Enacted in January 2025, the Utilizing Space Efficiently
and Improving Technologies (USE IT) Act requires agencies to measure
building utilization and plan to dispose of underused space.\3\
Specifically, it requires that agencies measure the utilization of
public buildings by comparing the usable square footage of each space
to the occupancy of the building.\4\ If a tenant agency's building
utilization remains below 60 percent capacity for 2 consecutive years,
GSA, in consultation with the Office of Management and Budget (OMB),
must take steps to reduce the amount of underused space. This Act,
combined with effective implementation, would address our 2023
recommendation on the need for governmentwide guidance on measuring
space utilization.\5\
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\3\ Thomas R. Carper Water Resources Development Act, Pub. L. No.
118-272, Sec. 2302, 138 Stat. 2992, 3218 (2025).
\4\ Occupancy is the average number of employees performing duties
in person in a public building or federally leased space at least 40
hours per week over a 2-month period. Covered agencies were directed to
begin collecting utilization measurements beginning no later than July
3, 2025, 180 days after the date of enactment. Id. Sec. 2302(b)(2).
\5\ GAO, Federal Real Property: Agencies Need New Benchmarks to
Measure and Shed Underutilized Space, GAO-24-107006 (Washington, D.C.:
Oct. 26, 2023).
In March 2025, GSA announced it would begin disposing of
federally owned office buildings using what it described as an
accelerated approach. As of November 2025, GSA had identified 45
federal properties--many of which were previously identified for
disposal--for this accelerated approach. GSA estimates that disposing
of these properties will reduce the federal government's real property
inventory by 14.6 million square feet and save $106 million in annual
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operations and $3 billion in deferred maintenance costs.
In addition, as of August 2025, a temporary real property
disposal process established under the Federal Assets Sale and Transfer
Act of 2016 (FASTA) had resulted in GSA selling 11 properties for a
total of $331 million.\6\ In May 2025, the board created under FASTA
also recommended 11 additional GSA properties for disposal.
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\6\ Pub. L. No. 114-287, 130 Stat. 1463 (codified as amended 40
U.S.C. Sec. 1303 note). FASTA originally included three rounds of
recommendations by the Public Buildings Reform Board, but recently
enacted legislation directed an additional, fourth round to identify
additional properties. Pub. L. No. 118-272, Sec. 2301, 138 Stat. at
3214.
In February 2025, GSA initiated an effort to reduce
unneeded and underused space leased by GSA for federal tenant agencies.
GSA targeted its space reduction effort on federal leases in the ``soft
term,'' the part of the lease term subject to termination rights.\7\
According to GSA officials, GSA consulted with tenants prior to sending
formal intent to terminate lease letters. GSA sent letters to federal
tenant agencies asking them whether the agency's ability to fulfill its
mission would be ``irreparably compromised'' if GSA were to terminate
these leases. GSA estimates $112 million in annual costs savings from
over 260 completed lease terminations or leases for which GSA has sent
an intent to terminate.
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\7\ GSA often enters into leases for a ``full term,'' split into an
initial ``firm'' term and a ``soft'' or ``non-firm'' term. The firm
term is the part of the lease not subject to termination rights, while
the ``soft'' or ``non-firm'' term is the portion of the lease following
the firm term, which is subject to termination rights. See, for
example, U.S. Gen. Services Admin. Leasing Desk Guide, chs. 2, 2.1-13-
2.1-14 (2022); U.S. Gen. Services Admin, Global Lease Template--GSA
Template L100, 2 (2023).
In March 2025, GSA launched a program called Space Match
to help federal agencies find available office space in underused
space. According to GSA, potential benefits of the program include
helping agencies find available space as employees return to in-person
work; optimizing the use of underused space; and creating a
collaborative work environment for agencies. GAO has not reviewed this
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program.
We are currently reviewing GSA's real property disposal and sales
processes. We expect to issue reports on those topics in 2026.
Data Reliability
Effective real property management and decision-making is difficult
without reliable data. GSA relies on federal agencies to submit
accurate data to the Federal Real Property Profile, the governmentwide
database of federal real property that GSA uses to manage buildings,
structures, and land. We have identified problems with the reliability
of federal real property data since we first placed management of
federal real property on the High-Risk List.
GSA has worked with federal agencies to improve the reliability of
federal real property data. In 2020, we reported that 67 percent of
addresses in the Federal Real Property Profile public database were
incorrectly formatted or incomplete.\8\ GSA took actions to improve its
process for validating and verifying addresses in this database. In
2023, we found that over 98 percent of addresses were correctly
formatted, but that location data errors continued.
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\8\ GAO, Federal Real Property: GSA Should Improve Accuracy,
Completeness, and Usefulness of Public Data, GAO-20-135 (Washington,
D.C.: Feb. 6, 2020).
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In August 2024, the Federal Real Property Council, an interagency
council of which GSA is a member, published guidance to help federal
agencies improve the quality of data they submit to the Federal Real
Property Profile.\9\ The guidance instructs agencies to concentrate
their initial data quality improvement efforts on data elements such as
property type and property use because these elements are most easily
verified with external information. GSA established a strategic
initiative to improve real property data accuracy through data
standards and management in its strategic plan for fiscal years 2022-
2026. GSA also implemented a tool that alerts agencies to potentially
incorrect location data in the Federal Real Property Profile database.
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\9\ Federal Real Property Council, Agency-Level Federal Real
Property Profile Data Quality Improvement Program Guidance (August
2024).
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Moving forward, GSA should continue to take steps to fully
implement our 2020 recommendation to help federal agencies improve
their data reliability by implementing the data quality standards
identified in the Federal Real Property Council's August 2024 guidance
and ensuring street address information is accurate.\10\ As of November
2025, this recommendation was partially addressed.
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\10\ GAO-20-135.
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We are currently completing an assessment of the reliability and
utility of the Federal Real Property Profile. We plan to issue that
report in early 2026.
Building Condition
In the 2025 High-Risk Update, we added building condition as an
area for concern due to large increases in the cost of addressing
deferred maintenance in federal buildings. This backlog of maintenance
and repair needs more than doubled in estimated cost from fiscal years
2017 through 2024, going from $170 billion to $370 billion. GSA's
estimated backlog of total liabilities, including deferred maintenance,
for the next 10 years is $26 billion, as of September 2025. GSA and
Buildings Service tenant agencies are taking steps to improve building
condition and configuration, but the continuing challenges led us to
include the topic in the High-Risk update.
In 2023, we determined that the spaces of federal
agencies, many of which are tenants of GSA, are not well configured to
meet modern office needs.\11\ If agencies continue to operate in poorly
configured office buildings, they will continue to underuse space,
spending unnecessary operating funds. Agencies ranked a shortage of
funds in their budget to reconfigure space as the top challenge to
increasing utilization of their headquarters buildings.
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\11\ GAO-24-107006.
In 2023, we reviewed GSA and three other agencies and
found they did not fully communicate the potential costs of maintenance
backlogs to Congress.\12\ None of the agencies provided sufficient
information in their financial and budget documents to explain how much
of their backlog was for projects necessary to fulfilling agency
missions. As a result, Congress and the public do not have a clear
picture of the anticipated costs to address the deferred maintenance
that may impact critical government functions. We recommended that GSA
and three other agencies fully communicate repair needs to Congress and
the public. As of November 2025, all four of these recommendations
remained open; two of the four are partially addressed.
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\12\ GAO, Federal Real Property: Agencies Should Provide More
Information about Increases in Deferred Maintenance and Repair, GAO-24-
105485 (Washington, D.C.: Nov. 16, 2023).
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GSA's Buildings Service Reduced Staff and Took Initial Steps to
Implement a Reorganization as of October 2025
As of October 2025, the Buildings Service had taken several
reorganization actions, such as reducing staff and developing its
proposed new organizational structure. We have not confirmed with GSA
how the recent lapse in appropriations affected its implementation
timeline. We spoke to Buildings Service officials as part of an ongoing
review on the organization and management of the Buildings Service,
which was directed by a provision of the Thomas R. Carper Water
Resources Development Act.\13\ Buildings Service officials told us that
the agency initially planned to complete its reorganization in July
2025 but postponed implementation due to litigation and leadership
changes. See Figure 1 for a timeline of events since January 2025
related to the Buildings Service's reorganization.
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\13\ Pub. L. No. 118-272, div. B, tit. III, Sec. 2305, 138 Stat.
2992, 3225 (2025).
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Figure 1: Events Related to the Public Buildings Service's
Reorganization,
January 2025 through November 2025
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: GAO analysis of administration directives, GSA documents,
information from GSA officials, and court documents associated with Am.
Fed'n of Gov't Emps. v. Trump, 3:25-cv-03698, (N.D. Cal.). GAO-26-
108785
Our past work has shown that agency reforms are more likely to be
successful in refocusing and enhancing agency missions and achieving
efficiency and effectiveness if leading reform practices are
followed.\14\ Following these leading reform practices could help the
Buildings Service ensure that its reorganization is a success.
---------------------------------------------------------------------------
\14\ We use the term ``reforms'' to broadly include any
organizational changes--such as major transformations, mergers,
consolidations, and other reorganizations--and efforts to streamline
and improve the efficiency and effectiveness of government operations.
GAO, Government Reorganization Key Questions to Assess Agency Reform
Efforts, GAO-18-427 (Washington, D.C.: June 13, 2018).
---------------------------------------------------------------------------
We have work underway for the Congress which applies selected
leading practices for agency reforms to the Buildings Service's
reorganization to date. We plan to issue this work in the next few
months. We selected these leading practices and associated key
questions based on their relevance to Section 2305 of the Water
Resources Development Act, which directed our work; the stage of the
Buildings Service's reorganization; and relevance to administration
priorities identified for Agency Reduction in Force and Reorganization
Plans (ARRP) (see fig. 2).\15\ We interpret the administration's ARRP
guidance as indicative of the administration's priorities in conducting
agencies' reorganizations. We do not plan to assess GSA's ARRP, but we
assessed the Buildings Service's actions related to its own
reorganization.
---------------------------------------------------------------------------
\15\ OMB, Guidance on Agency RIF and Reorganization Plans
(Washington, D.C.: Feb. 26, 2025).
---------------------------------------------------------------------------
Figure 2: Selected Leading Practices and Key Questions for Agency
Reform
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: GAO. GAO-26-108785
In addition, we plan to report on selected tenant agency views on
the strengths and limitations of the organization of the Buildings
Service that was in place as of December 31, 2024. We also will
describe former Buildings Service Commissioners' views on both the
strengths and limitations of the organization of the Buildings Service
as of December 31, 2024, and their perspectives on potential
improvements.
Chairman Perry, Ranking Member Stanton, and Members of the
Subcommittee, this concludes my prepared statement. I would be pleased
to respond to any questions that you may have at this time.
Mr. Perry. The Chair thanks our witness.
Moving on to Congressman Capuano. You served on this
committee with distinction. You have many friends here, and you
are recognized for 5 minutes for your testimony.
TESTIMONY OF HON. MICHAEL E. CAPUANO, BOARD MEMBER, PUBLIC
BUILDINGS REFORM BOARD
Mr. Capuano. Thank you, Mr. Chairman.
Good morning. My name is Mike Capuano, Board member of the
Public Buildings Reform Board and a member of this committee
for 18 years. I want to begin by thanking Chairman Perry and
Ranking Member Stanton for inviting the Board.
And before I get into my real testimony, I want to also
offer my completely insincere condolences for the Eagles' loss
this past weekend. [Laughter.] It was terrible. I could fake
that I care, but I can't do that.
FASTA was enacted in December of 2016 as a bipartisan,
bicameral effort that created the PBRB. It was most recently
amended last year by this committee through the Water Resources
Development Act. And our current Board members are Talmage
Hocker, who is the acting chair; Nick Rahall, who is a former
ranking member of this committee; Dave Winstead is a former PBS
Commissioner; Dan Mathews is a former PBS Commissioner and a
former staffer of this committee; Jeffrey Gural; and myself.
The purpose of the Board is to identify Federal properties
that should be disposed of and recommend them for disposition
to the Office of Management and Budget and the General Services
Administration. We look for properties that are underutilized
and which have significant deferred maintenance. The Board is
not empowered to force a disposition. All we can do is make
recommendations.
The amended law dictates four rounds of recommendations. To
date, the PBRB has submitted three rounds, totaling $846
million in sales proceeds, $5.7 billion in cost savings over 30
years. The most recent recommendation submitted in May of this
year identified 11 Federal properties encompassing nearly 7
million gross square feet in 7 cities across the United States,
plus the Washington, DC, area. Our next report is due next year
by December of 2026.
Today, I would just like to enlighten you about a few
issues we have struggled with over the years.
While every approved recommendation saves taxpayers
millions, it costs money to achieve these savings. New
locations have to be identified and fit-out for use, employees
and office equipment must be moved, and the old property must
be prepared for sale.
Congress created the Asset Proceeds and Space Management
Fund under the original FASTA law and directed the sales
proceeds from PBRB recommended properties into that fund. WRDA
amended that law to stipulate that future proceeds from sales
be reverted to the land-owning agencies. In both cases,
expenditures are subject to the appropriation process. The
Board notes that faster access to these funds generated--
billions have already been generated--would provide both an
incentive to consolidate and the resources to support the next
sale of the next property.
The Board's independent analysis identified approximately
$50 billion in deferred maintenance and repair liabilities
across the entire GSA-owned portfolio. In contrast, the GSA
currently receives about $600 million annually to address those
needs. GSA's portfolio would have to shrink by about 80 percent
to keep up with the maintenance within the budget of the
appropriation. Everyone realizes this is unrealistic and
undesirable.
Moving Federal agencies to leased space does solve many
problems. Leases, obviously, are known and predictable for the
duration of the lease. Federal agencies don't have to contend
with constantly degrading properties. Leases also offer the
flexibility that can be expanded or shrunk according to the
needs of the agencies, and taxpayers are not forced to pay for
empty space that needs maintenance. However, the economic
conditions that may encourage leasing in some markets also
reduce the value of the real estate that we might want to sell
in that same market. So, therefore, in some markets, there are
competing interests depending on the market.
The Board believes that the GSA agrees that the Federal
portfolio really should be consolidated; however, we also
recognize that GSA currently relies on the rents paid by their
tenant agencies to fund a large portion of their normal
operating budget. Any consolidation or reduction denies the GSA
those funds, which makes their annual operations much more
difficult to do. The Board believes it would be wise to address
these conflicting interests and would be happy to work with
Congress to achieve those goals.
The Board has uncovered a fair amount of market--my time is
coming to an end. I just want to wrap up then. I'm going to
jump to the bullets.
People realize that we have too many buildings that are not
fully occupied. We are not getting the current information we
need to give this Congress the information that we would like
to give you and our recommendations are more thoughtfully put
out, and we would like to find a way to get access to that
information. I know the WRDA says that we shall get it. We
shall see whether that is fulfilled. I have my serious doubts
based on past experience that we will be able to get access to
the information that we need.
With that, I am going to yield back and not get into that
red light.
[Mr. Capuano's prepared statement follows:]
Prepared Statement of Hon. Michael E. Capuano, Board Member, Public
Buildings Reform Board
Good morning, I am Mike Capuano, Board member of the Public
Buildings Reform Board (PBRB) and former Member of this Committee. I
want to begin by thanking Chairman Perry and Ranking Member Stanton for
inviting the Public Buildings Reform Board to speak. Congress created
PBRB as the sole engine for the execution of the Federal Asset Sale and
Transfer Act (FASTA) and we are pleased to be invited to this hearing
to discuss our work. I will first provide you with a brief overview of
PBRB and then describe what we are finding during our review of the
federal real property portfolio.
Overview
FASTA was enacted on December 16, 2016, as a bipartisan and
bicameral effort, and created the Public Buildings Reform Board.
Current Board members are D. Talmage Hocker (Acting Chair), Nick Rahall
(former Chairman of this Committee), David Winstead, Dan Mathews
(former Staff for this Committee), Jeffrey Gural, and me.
The purpose of the Board is to identify federal properties that
should be disposed of. We look for properties that are either
underutilized or in need of so much repair work that it would be
financially wiser to relocate or consolidate. We try to focus on
properties that offer the largest taxpayer savings. We work with the
local stakeholders before we make our recommendations.
The Board is not empowered to force a disposition--all we can do is
make recommendations to OMB and GSA. If they agree with our
recommendations, GSA has the sole authority as to how and when to
dispose of the property.
The law, as amended, dictates four rounds of recommendations. To
date, PBRB has submitted three rounds that should total $846 million in
revenues from sales and $5.675 billion in cost savings over 30 years.
The latest of these recommendations, issued in May 2025, identified 11
federal properties encompassing nearly 7.1 million gross square feet of
office space in seven U.S. cities and the National Capital Region.
The Board is currently assessing properties for its next round,
which is due no later than December 31, 2026, when the Board is
scheduled to sunset. That assessment includes recent site visits to
Boston, Jacksonville, Denver, Savannah, Charleston, and Columbia, South
Carolina and in-person meetings with stakeholders in each area. Plans
are in the works to visit other U.S. markets including Bozeman and
Minneapolis. To date, the local governments have been supportive of our
approach.
During our analysis, we have uncovered several issues that I would
like to briefly highlight for you today.
Disposing of Property Requires Some Upfront Expenditures
While every recommendation the Board makes saves taxpayers millions
upon millions of dollars, it does cost money to achieve those savings.
New locations must first be located, that new location usually requires
some amount of fit-out for its intended use, moving workers into the
new location requires some expenditures, often the old property
requires some degree of remediation before it can be offered for sale,
and finally it costs some money to hire brokers to dispose of the
property.
Congress did create the Asset Proceeds Fund (APF) under FASTA and
directed the revenues generated from the sale of PBRB-recommended
properties into the fund for the purpose of supporting all the costs
listed in the previous paragraph. For many reasons the funds in the APF
have not been made available for the intended purpose and remain unused
at this time. The amended FASTA stipulates that proceeds from the sale
of properties be reverted to the land-owning agency. In both cases,
appropriations must take place to make funds available for subsequent
consolidations or even maintenance. The Board has noted that
establishing a mechanism to provide agencies ready access to funds
generated from property sales would provide an incentive and the
resources to sell excess properties, improve maintenance in remaining
properties and consolidate the workforce. A timely resource solution is
urgently needed, as I will explain shortly.
The Board would be happy to work with Congress to address this
conundrum.
The Deferred Maintenance Liability Is Extraordinary
The Board is conducting an analysis of the total deferred
maintenance liability for the federal portfolio owned by GSA. Many
properties are owned by other agencies, but data from those other
agencies is unavailable. The analysis will provide Congress with an
independent, data-driven estimate of the deferred maintenance and
repair liabilities across the GSA-owned portfolio.
The Board's analysis has identified approximately $50 billion in
deferred maintenance and repair liabilities across GSA's owned
portfolio. This number is approximately twice as high as the highest
number GSA has communicated publicly in its various testimonies before
Congress. Using GSA's own rate of escalation (27%), in 10 years, the
total deferred maintenance for GSA's portfolio will be approximately
$546 billion, if there are no significant changes in Congressional
funding or reductions to the portfolio. In contrast, GSA currently
receives approximately $600 million annually to address these
mushrooming needs. To put this into perspective, the estimated
functional replacement value (FRV) of the portfolio--the cost to simply
replace the properties, and not the market value--is $160 billion. The
currently budgeted $600 million in annual capital funding would meet a
2% of FRV target (which is industry standard) if the portfolio's FRV
were $31B--a stark contrast to its current $160B FRV. This indicates
that GSA's portfolio would have to shrink by around 80% to be
maintained with a $600 million budget.
The Board believes that GSA cannot adequately divest from and
consolidate the federal presence with the speed required by the large
pool of properties requiring vast amounts of maintenance. The effort to
divest will take years and require funds that can be derived from the
disposition of valued properties. However, those decisions must be made
rapidly and in sequence, and appropriations of sale proceeds should be
committed to the subsequent downsizing.
The Board believes that its work represents only initial analysis
in that we seek properties that provide value upon their sale. There
are a large number of buildings that present no value or such low value
that the cost to move employees and shut the facility exceeds the
possible savings. But these unmarketable and often underused and under
maintained properties are a drain on the federal budget and taxpayers.
One solution would be to extend the life of the Board and grant it
amplified authorities and budget to achieve the number of reductions
urgently required across the portfolio.
GSA Cannot Sufficiently Shrink Its Portfolio to Fit Within Its
Appropriations
Congress has sent a consistent and clear message to GSA through the
appropriations process: downsize the portfolio wherever you can. In
FY2024, GSA received $600 million \1\ for repairs and alterations of
its entire portfolio. The Board can identify two properties that would
consume this entire amount on their own. The is no realistic
expectation that the federal government will ever be able to fund an
amount sufficient to meet its needs.
---------------------------------------------------------------------------
\1\ GSA CBJ 2025
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It is also unrealistic to expect GSA to shrink its portfolio so
that $600 million is sufficient to bring federal property up to modern
day expectations. Testimony to this Committee in May suggested that
land ports of entry, courthouses, and law enforcement facilities should
continue to be owned by GSA and funded from its appropriations. As of
right now, federal real property data show that land ports of entry and
border inspection facilities, courthouses, and facility security
structures have a maintenance requirement of $6.8 billion. That means
that even if GSA sold every single office building in its inventory, it
still would require $6.8 billion to fix the remaining critical assets.
Leasing Could be a Part of Any Solution
Moving federal agencies into leases solves several issues
simultaneously. The biggest advantage to the taxpayer is that the lease
costs are known and predictable for the duration of the lease, and
federal agencies do not have to contend with exponentially degrading
properties. Leases can be expanded or shrunk according to needs more
quickly than buying or selling property. Lease rates are down in many
areas of the country, meaning that agencies may be able to find leases
which would cost less than what taxpayers pay in rent charged by GSA.
Further, long-term federal leases are desirable to commercial building
owners and agencies should be able to negotiate concessions that would
enable moves and improvements to spaces, resulting in lowered or
vanishing costs for the consolidations.
However, one should note that the same market that creates cheaper
rents also drives down the value of real estate. So, in some markets,
any sale of Federal property may bring much less than what otherwise
may be expected.
GSA Faces Conflicting Pressures on Downsizing
As stated, GSA is under pressure to downsize from most observers
and the Board believes that GSA shares those sentiments. However, this
fact is often lost--federal agencies that occupy GSA-owned buildings
pay market-rate rents to GSA and those payments are used to fund a
large portion of GSA's operating budget. If agencies leave those GSA-
owned buildings, the rental payments end and GSA loses significant
revenue. The result is that GSA faces a real financial dilemma whenever
federal agencies consolidate or vacate GSA-owned real estate.
On occasion, taxpayers are forced to pay twice when a tenant agency
voluntarily vacates a GSA-owned property. An example would be an agency
that decides to move out of a poorly maintained GSA-owner property to
lease a more appropriate space. In that case, taxpayers foot the bill
for the cost of moving the agency and leasing the new space; plus the
GSA is left with vacant space no other agency will lease but still
requires some degree of maintenance and the costs associated with same,
and the deferred maintenance costs continue to increase. Of course,
this not-uncommon example also harms the host community that now
suffers all the harms associated with vacant and unwanted space.
The Board would be happy to work with Congress to address these
conflicting pressures.
The Board Has Uncovered a Market for Federal Buildings
As noted earlier, the Board has been busy meeting with
municipalities, historic preservation groups, and real estate brokers,
and has uncovered significant interest in federal properties. At a
recent meeting with local stakeholders in Savannah, Georgia, the local
preservation organization and the city expressed interest in acquiring
one of these historic properties. The Board has also been working with
brokers to understand how GSA could divest large tracts of land for
data centers. One property the Board has identified in Northern
Virginia is potentially valued at about $800 million, according to
brokers.
Although the Public Buildings Reform Board does not have a planning
role, we agree with the efforts by the District of Columbia and the
National Capital Planning Commission to create a master plan for
Southwest DC, which has the largest concentration of underutilized
Federal buildings and will benefit all stakeholders It is also the
location of two of our Round 2 recommendations (the Dept of Energy
Forrestal Building and the former GSA National Capital Regional Office
Building). We are reviewing some of the remaining buildings in the
southwest for potential inclusion in Round 3. However, the value will
be greatly dependent on the plans for this area as well as the
absorption period for existing vacant property.
The Board notes that GSA does not routinely engage with local
communities, historic preservation groups, and local brokers to explore
market possibilities when considering which properties it may want to
divest. Instead, it creates internal priorities and then, as funding
becomes available from appropriations, it works to effect
consolidations.
In contrast, the PBRB happily engages any stakeholder we can
identify and the local real estate community who is most familiar with
the local market.
Given the level of engagement and interest demonstrated by
municipalities and historic preservation groups, the Board is preparing
a set of more urgent property recommendations where potential buyers
have already been identified in order to seize the market opportunities
we have uncovered.
The Lights Are On, But Nobody Is Home
Despite the return-to-office mandates, it is apparent to the Board
as it travels around the country, analyzing properties and talking to
communities that many federal properties are not occupied near
capacity. The 2024 Water Resources Development Act (WRDA) stipulated
that properties that did not meet a space use rate of 60% on average
over a year, would be required to be divested from the portfolio.
The Board notes that agencies appear to be having trouble
collecting real data on daily use despite readily available technology
that would support collection and produce the valid and consistent
information required to effectively manage properties. We understand
that OMB is pushing agencies hard to gather and provide the required
occupancy information. The PBRB has not be allowed access to this data,
even though we readily acknowledge it may not be perfectly accurate at
this time. Nonetheless, we anxiously await access to whatever data any
agency has in order to better assess various properties we have
identified for possible disposition across the country.
The Board's own work in determining the costs of maintaining
properties ``as is'' versus downsizing and moving is hampered by a lack
of use data, and the data are not expected to become validated until
too late in the Board's analysis cycle. Extending the life of the Board
would allow for continued analysis and incorporation of better daily
use data, making our recommendations more accurate.
The Board will continue to talk to communities and gather
information about what markets and properties present opportunities in
preparation for its next report. We appreciate the support of this
committee.
Thank you for the opportunity to testify before you today, and I
look forward to your questions.
Summary
The PBRB was created by Congress to encourage federal
agencies to consolidate and dispose of unnecessary properties in order
to increase efficiency and save taxpayers billions of dollars.
It costs a little money to save lots of money when it
comes to disposing of property.
The Board has conducted an analysis that estimates a $50
billion cost to address the backlog of repair problems in federal
properties. In 10 years, that backlog will grow to $546 billion if
nothing is changed.
Even if GSA sold every property it owns, current funding
levels could not meet its repairs and maintenance requirements.
Leasing can and should be a part of the solution.
However, more affordable rents also mean lower sales proceeds.
The Board has found some properties with no value, so
that leasing presents the taxpayer with a bill for the lease, plus the
cost for day-to-day operations in a partially vacant building, and the
extraordinary unfunded capital requirements for deferred maintenance.
GSA faces conflicting financial pressures when
considering disposition and consolidations.
The PBRB and others have concluded that many federal
properties are seriously underutilized. However, official data on
utilization rates is not currently made unavailable for the Board to
analyze.
Taxpayers would be better served if the Board and GSA
were granted faster access to proceeds generated from prior sales in
order to fund the next round of sales. Such changes would require legal
and policy changes to ensure market-timed dispositions were feasible.
There are numbers of buildings that present no value or
such low value that the cost to move employees and shut the facility
exceeds the value. But these unmarketable and often underused and under
maintained properties are a drain on the federal budget and taxpayers.
The PBRB will submit our next report no later than Dec.
31, 2026. The Board may submit partial reports before that date. If the
Board is extended by Congress, the PBRB will continue its mission and
save taxpayers billions more.
Mr. Perry. The Chair thanks the gentleman. And we also
thank the gentleman for his acknowledgment of the world
champion Eagles, Philadelphia Eagles. Fascinating.
All right. Thank you all for your testimony. We will now
turn to questions.
The chair is now recognized for 5 minutes of questions. I'm
going to start with Mr. Heller. By January, all agencies are
required to meet the 60-percent minimum occupancy target, and
if they don't, they must correct or release the space. Data in
this regard is also critical--I think I just screwed up my
notes here--to the work of the Public Buildings Reform Board.
We received a notification just this week that data release
will be delayed due to the shutdown.
Look, I know there was a shutdown, but--and we will use
that slide in the next question. But I am assuming you are
collecting data, and maybe you are delayed because of the
shutdown, but you have a certain amount of data now. Can you
give us the preliminary data that you have now and then commit
to us receiving the data on a timely basis based on the time
lost for the shutdown? I would say that would be about March,
March 31. Can we get the preliminary data that you have now,
now? And can you commit to us getting all the data no later
than March 31?
Mr. Heller. Mr. Chairman, thank you for the question.
GSA has been working closely across the executive branch,
including with the Office of Management and Budget and all of
our occupant agencies, to collect the data that is required by
the USE IT Act. We very much appreciate this committee's action
to pass the public buildings reform earlier this year. We
believe it gives us a lot of the tools that are going to be
necessary to rightsize the portfolio.
We will require resources, as Congressman Capuano and I
noted in our opening testimony. The shutdown really did create
a situation where many agencies were asking for extensions to
be able to submit and verify the data that we have been
collecting, and so I believe this was communicated to the
committee yesterday.
Mr. Perry. Right.
Mr. Heller. The administration is committed to providing
the information by the end of March this year. We want to make
sure that we are providing the committee with accurate data
that you all can trust and use to conduct oversight and to make
decisions. I would be happy to work with the committee to
discuss your question regarding receiving interim data at an
earlier date. Happy to follow up and talk with your staff.
Mr. Perry. Okay. So that is a long answer, but what I think
I gleaned out of that is you are committed to March 31?
Mr. Heller. Yes, sir.
Mr. Perry. And you will work with us on preliminary data
that you have received or partial data that you have received
to this date, assuming and recognizing and acknowledging the
delay that might have been caused by the shutdown for some
agencies?
Mr. Heller. Happy to discuss ways that we can provide the
committee with----
Mr. Perry [interrupting]. And we will understand it is not
complete and not completely reflective and might need to be
adjusted pending further review, but we want to make sure that
the process stays on track. We want to start looking at what
you have now, and we want to make sure that that is just not
some reason to not provide the full panoply of data on March
31, and then on March 31 you say, well, look, we are still not
complete yet. We want to kind of use the opportunity to gauge
how fast you are going and how far you are getting.
Let me turn to the next question, and then you can put the
slide up.
As I understand it, GSA is working to reduce liability to
the taxpayer by focusing its core, owned assets on things like
courthouses, land ports of entry, and other specialized spaces
while moving to leased space for traditional offices. In order
to manage this, I think it is critical for the GSA to leverage
real estate expertise.
[Slide shown.]
And I think, if you look at this slide, it shows that the
expertise from the outside market of brokers really does very
well for the taxpayers and for the Government, and so--where
the GLS or brokers contracts play an important role in keeping
lease costs low. These are no-cost contracts, leveraging
experts at no cost to the taxpayers, because the experts are
paid on commissions by the buildings' owners, and they share
that commission with the GSA currently.
That having been said, where is the GSA in renewing the
current GLS contract for leasing services, and how is the GSA
effectively leveraging the current brokers to work through
expiring leases?
We feel like you are well behind, and we need to catch up
to this, and that the program needs to be modified so that it
incentivizes the accurate and efficient work of the outside
experts.
Mr. Heller. Mr. Chairman, thank you for the question.
We agree with you, and we have been partnering with
private-sector brokers to supplement our workforce in the
Public Buildings Service for over two decades. We recognize the
value that they bring to the table.
The current contract expires in January of 2026. Our plan
at this time is to enter into what we would call a 1-year
bridge contract while we sort of work with our incoming
political leadership to make sure that we structure the
contract in a way that simplifies ordering procedures, reduces
inefficiencies, but still allows industry competition and
participation, and make sure we are getting the best expertise
to get the job done.
Mr. Perry. And I apologize to my colleagues for going over
time here, but I just want to delve into this a little more. I
don't know that I was aware of this bridge contract, and I want
to make sure that we are not creating a bunch of uncertainty
for the year with a bridge contract. It should pretty much
reflect where we hope we are going to go.
And so, is there an--will there be an opportunity for
Members of both sides of the aisle here to review that bridge
contract prior to it coming out, and what is the--like, January
is next month. We are coming pretty fast here.
Mr. Heller. Yes. We have been working on this for the past
couple of months and happy to follow up with the committee to
provide additional information that would be helpful.
Mr. Perry. Yes, we would very much like to see that and
provide an opportunity to weigh in where necessary.
All right. Again, I apologize. I am over time.
The Chair now turns to the ranking member, Representative
Stanton from Arizona.
Mr. Stanton. Thank you very much, Mr. Chairman.
This subcommittee also has jurisdiction over FEMA. A draft
of the FEMA Review Council's report is out. In my opinion,
unfortunately, it still plans to keep FEMA within the Homeland
Security Department, but the report also recommends the
movement of most of the remaining FEMA employees out of
Washington, DC.
Commissioner Heller, has GSA been involved in any
discussions or efforts to move FEMA employees out of
Washington, DC, to Texas or anywhere else?
Mr. Heller. Thank you for the question, Mr. Ranking Member.
I am not aware of any of those conversations occurring. We
have been in discussions with FEMA regarding their headquarters
lease here in Washington. That lease is coming up for
expiration in 2027. So I have not read the report that you just
referenced, but our partners at FEMA have been communicating to
us that receiving that report is a very important milestone as
they plan for their headquarters occupancy.
We will continue to partner with FEMA and get an
understanding of what their requirements are in terms of
headcount, where they need to be, and we will provide FEMA with
options to meet those requirements in a cost-effective and
efficient way.
Mr. Stanton. As part of your ongoing discussions with
Homeland Security with regard to their current lease, you have
had no conversations regarding whether or not they want to
significantly reduce headcount and move headcount out of
Washington, DC, as part of the planning for the future
disposition of their building?
Mr. Heller. I think--I certainly don't want to speak for
the Department of Homeland Security, but I think----
Mr. Stanton [interrupting]. I just want to talk about your
conversations that you have had with them. You indicated you
are in conversation with them regarding the disposition of
their lease.
Mr. Heller. Absolutely, we are. I think those
requirements----
Mr. Stanton [interrupting]. What have they said to you
about their desire for the future of that lease?
Mr. Heller. At this point, they have really been waiting
for the release of the report that you referenced to get an
understanding of what impact that report would have on their
headquarter's occupancy. But we will continue to partner with
them, and happy to follow up with this committee on any
information related to that lease that you would like to
obtain.
Mr. Stanton. As of this time, as far as your conversations
with them, there is no planning for another FEMA building or
lease of a building for FEMA employees outside of Washington,
DC?
Mr. Heller. I am not aware of one at this time. My staff
does have conversations with FEMA on an ongoing basis. As part
of those conversations, there is a chance that this may have
come up, but I am not aware of any active plans at this time to
enter into leases anywhere else.
Mr. Stanton. Okay. They better act quick because, according
to the report that just came out today, as we speak in this
hearing, they are planning to move their employees out of
Washington, DC. At least that is what Secretary Noem wants to
do. The bill that I have with Ranking Member Larsen and
Chairman Graves very much goes in a different direction. We
want to make sure that we continue to grow FEMA here in
Washington and move the FEMA Director to a Cabinet-level
position. So I appreciate that information.
Congressman Capuano, good to see you. Welcome back to this
august committee. As GSA eliminates space, should customer
service operations, such as Social Security field offices and
VA health facilities, be treated the same as general office
space? How can GSA ensure that the taxpayers who pay for these
Federal services still have access to them?
Mr. Capuano. The answer is, we don't look at that type of
stuff. We are interested in buildings. Obviously, as a former
Member, I fought to keep my Social Security office in my
district for the same reason I am sure you would want it in
yours. People need access to it. That is not--doesn't
necessarily have to be in a Federal building. It could be in a
leased property. There are plenty of ways to deal with this.
We are aware of that when we look at buildings as to who is
in them and who needs to be where. However, the Board is not
empowered to make those decisions. We can and do make
recommendations to GSA, but most of what we focus on is the
building itself, the physical assets.
Mr. Stanton. All right. I mentioned that I am a recovering
mayor. Congressman, should the Federal Government work with
local governments to determine future land use and zoning
principles before taking properties to market?
Mr. Capuano. Very much so. I am also a--not a recovering
mayor. I still----
Mr. Stanton [interrupting]. Recovering Congressman,
recovering mayor.
Mr. Capuano. Recovering Congressman, maybe. Mayor was a
great job. You get to actually do things as opposed to talk to
them.
The answer is, yes, very much so. Again, I wasn't on the
Board from the get-go, and I know there were some issues with
certain properties before I got there, but in these last
several rounds, last several years, very much so.
Every one of the buildings we look at are pretty major
assets in the cities and towns. We look at them. We know there
will be a major impact on them. We have tried very much to work
closely with them as best we can, and so far, to my knowledge,
since I have been on the Board, there have been not an ounce of
problems. We actually have had less problems with the local
communities, because we talk to them, than we have had with
some of the Federal agencies.
Mr. Stanton. Thank you very much, Congressman.
I yield back.
Mr. Perry. The Chair thanks the gentleman.
The Chair now recognizes the gentleman from Mississippi,
Representative Ezell.
Mr. Ezell. Thank you, Mr. Chairman, and thank you all for
being here today and spending time with us.
When I entered Congress, I was unaware of the big Federal
footprint of real estate in this country, both owned and
leased. Not only is it one of the largest holders of real
estate in the country, but the Federal Government is now facing
a possible financial crisis due to these holdings.
Since 2003, the GSA has been on the high-risk list due to
the financial ruin it faces. Maintenance and repairs alone are
over $370 billion and growing worse each year. The general
management of many of these buildings costs over $10 billion a
year.
Until this year, most of these buildings sat partially or
fully empty while the taxpayers footed the bill for them. If
there is any place where a conversation about the need to rein
in Government spending can be on hand, it could start here.
The Federal Government should not own buildings it cannot
maintain, and it should not lease offices that are not staffed.
Mr. Heller, given the significant cost of ownership, is
there an overall plan from the GSA to significantly shift from
ownership to leasing?
Mr. Heller. Thanks for the question, Congressman. Yes, I
would say there has been a shift, specifically with respect to
general office space requirements. Those are the types of
requirements that can typically be met in a very satisfactory
and cost-effective way in the leasing market.
Where we are concentrating the limited resources that we
have with the Federal inventory is on those more highly
specialized spaces, such as courthouses, land ports of entry,
laboratories, major law enforcement centers.
So we do seek to enhance our partnership with the private
sector in terms of leasing for general office space as we move
forward. I think our financial situation just dictates that we
must do so, and it is a sensible thing to do.
Mr. Ezell. Thank you. Could you tell me what has been the
main burden of transitioning from ownership to leasing?
Mr. Heller. Yes. The main burden--and thank you for the
question--is really funding to relocate agencies. I think
Congressman Capuano did a really good job in his opening
remarks outlining some of the costs associated with relocation.
You have got to build out space in a new location to meet the
tenant's needs. You have got to physically move them. You have
got to buy personal property like IT and furniture.
And so I would say really the chronic underfunding of the
Federal Buildings Fund is to the tune of $15 billion over the
past decade and a half. We have developed a program called the
Optimization Program, and we appreciate this committee's
support of that program. We were able to allocate about $250
million of funding in fiscal year 2025 and have requested $365
million more in 2026.
And we also seek to partner with the Public Buildings
Reform Board on the Asset Proceeds Fund where we have requested
$193 million in fiscal year 2026. Our issue is that we need to
get access to that funding to make some of these relocations
happen so that we can dispose of the assets effectively.
Mr. Ezell. Thank you.
Last question. Beyond eliminating commission credits and
recompeting at the task order level, what else might be used to
help attract and retain the best brokers for GSA services?
Mr. Heller. Well, I think sort of relying on a merit-based
system and rewarding those high performers. And so as we seek
to strategize around our longer term broker contract over the
next several months, we are going to be looking at ways to
incentivize strong performance and to minimize inefficiencies
and simplify the ordering procedures.
Mr. Ezell. That is going to help speed up the process?
Mr. Heller. I hope so.
Mr. Ezell. Thank you, Mr. Chairman. I yield back.
Mr. Perry. The Chair thanks the gentleman.
The Chair now recognizes the ranking member of the full
committee, Representative Larsen from Washington.
Mr. Larsen of Washington. Thank you, Chair.
First for Representative Capuano. Now that you have May of
2025 recommendations out, you said 11 Federal projects, 7.1
million gross square feet, what happens next with those
recommendations?
Mr. Capuano. Well, the recommendations require the approval
of OMB, which they have already given, and now it goes to GSA
to make the dispositions the way they see fit. We have no
authority to tell them how to do it.
I will say that in this round, GSA--we have been pushing
the use of brokers for years now. Up until now, GSA has
resisted that. It has basically just put the properties on
websites, which has resulted in not such great results, in my
opinion.
But this round, I will say that the GSA has hired a few
brokers to try to help them get rid of some, and I think I am
looking forward to a more successful round than we have had in
the past.
Mr. Larsen of Washington. And following up, you said you
have another round and then the Board sunsets at the end of
next year. Is that right?
Mr. Capuano. Yes.
Mr. Larsen of Washington. Do you have a goal for that next
round, or do the recommendations come organically?
Mr. Capuano. Little bit of both. I mean, the goal is to try
to do the best we can. I mean, none of us are in favor of
leaving empty buildings in the portfolio. However, it is
difficult to locate them. We don't have any access to the
information that this committee is also looking for. We do the
best we can with what we have.
We have a very small staff, and so, therefore, we don't try
to bite off more than we can chew. I do think that that argues
in favor of either extending the Board or creating some other
entity that would then carry on the work of the Board, if for
no other reason, to keep the other agency's feet to the fire. I
think it has been very helpful to focus people's attention.
When we start looking at a building, others start looking at it
as well.
So for the next round, we have had internal discussions of
not waiting till the end to make one big recommendation. We
might make an approach where we make a few smaller
recommendations as we go along. No reason to keep buildings in
the portfolio that are ready to be disposed of.
Mr. Larsen of Washington. Yes. Great. Thanks.
Dr. Krause, GAO added building condition back as a high-
risk issue this year. What are the issues on your radar for the
high-risk update?
Ms. Krause. Yes, we will continue to track the four areas
of our high risk related to Federal properties. So you
mentioned building condition, which is something we will
continue to monitor, but the other areas are related to
facility security; data reliability, having good data to make
decisions like we are seeing with the USE IT Act and the data
we will have on utilization come the beginning of the year; as
well as addressing underused property.
So we will continue to look at that and have a number of
reviews and reports. We anticipate issuing it next year.
Mr. Larsen of Washington. Okay. Great.
Commissioner Heller, I mentioned at the beginning of my
comments how many folks GSA Public Buildings Service employed
at the beginning of the year. It's about 2,400 or so fewer. Is
that the right number, or should it be higher or lower? I mean,
are you able to get your work done? Because we have a lot
through the USE IT Act. We gave you work so that we could get
to the right size, the footprint.
And there is a separate question about what the right size
of the Federal Government employee base should be, but do you
have the people you need? Because you did as well hire back 392
people after cutting--not you personally, but we all know how
that happened. So where are you in terms of people?
Mr. Heller. Thanks for the question, Mr. Congressman.
So we did effect our reorganization formally on October 20.
And as you noted in your opening comments, we are now an
integrated, functional organization where we organize sort of
by major program area. We call it integrated because we work
together across our different disciplines to deliver services
to our customers.
Our current political leadership at GSA is very focused,
laser-focused on the Public Buildings Service being able to
effectively provide services to the occupant agencies that pay
us for those services and to provide value to the taxpayers,
and that is why I was able to get the approval to offer the
opportunity to come back to almost 400 folks across PBS, and
very happy to report that almost 300 of them did decide to come
back and have since rejoined us.
We are really going through an exercise now to determine if
there are additional gaps in our workforce. And I know that our
leadership has been very supportive of our needs and PBS, and I
am confident that, to the extent that we do have additional
needs, that we will get the support to fill those needs through
maybe a combination of Federal employees and contractor
employees. But we are certainly going to be staffed in a way
that enables us to deliver our services effectively.
Mr. Larsen of Washington. Thank you. We will have to
certainly monitor that as we go forward.
And with that, I yield back.
Mr. Perry. The Chair thanks the gentleman.
The Chair now recognizes the gentleman from California,
Representative Kiley.
Mr. Kiley of California. Thank you, Mr. Chair. I appreciate
you convening this hearing and your work on this important
topic, and we are seeing, I think, some major improvements for
taxpayers, which is a great thing.
Mr. Heller, I wanted to get your thoughts on an Executive
order that the President issued making Federal agriculture--
Federal architecture, I should say--beautiful again, which I
think is a pretty exciting idea, so much so, in fact, that I
have introduced legislation to codify it.
Do you know how that is going in terms of its
implementation?
Mr. Heller. Thanks for the question, Congressman.
It is going well. The Executive order requires us to have
qualified professionals within the Public Buildings Service who
are expert in classical and traditional architecture. It
requires us to hire a senior adviser for those types of
matters, and we are in the process of doing so.
We have been able to analyze our ongoing design and
construction projects and realign them to ensure that they do
align with the President's Executive order. Like all of the
President's Executive orders, our job is to implement them to
the maximum extent possible, and we are certainly doing so with
that particular Executive order.
Mr. Kiley of California. Yes. One rationale for the E.O. is
that some of our public buildings have just kind of become
eyesores. But on the flip side, there is this idea that the
public buildings that we have--courthouses, other places where
citizens gather, and we see it here in DC with our well-known
national buildings--should evoke--they should be beautiful, but
they should also evoke this sort of civic spirit about what
democracy is all about.
Do you want to just say a word about how that philosophy is
informing the process?
Mr. Heller. Happy to do it, and maybe do so with a real
life example.
So last week, I was in Huntsville, Alabama, to meet with
the Federal Judiciary, their Space and Facilities Committee,
and we met in the new courthouse that GSA recently constructed
in that city. Happy to report that we conveyed the former
courthouse out of Federal ownership earlier this year as well.
And I think when you sort of drive up on that building or walk
into that building, you get a sense that you are in a Federal
courthouse. And I think all of the meeting participants that
were there last week kind of agreed upon that. So I think that
is just an example of how we are putting the Executive order to
action.
Mr. Kiley of California. That is great to hear. Thank you
for your work on that. I have the bill here. Senator Banks has
a companion measure over in the Senate. So hopefully we will
get that in statute as well.
I yield back.
Mr. Perry. The Chair thanks the gentleman.
The Chair now recognizes the gentlewoman from Nevada, Ms.
Titus.
Ms. Titus. Thank you so much, Mr. Chairman.
I could not disagree more with my colleague about the need
for classical architecture on every one of our Federal
buildings. I support the notion that has been in place for
decades, that our Federal buildings should reflect the culture,
the talent, the history of the places where they are built. We
don't want a courthouse in Boston looking like it is from Santa
Fe, we want the Santa Fe courthouse to look like that.
So with all due respect, one man's eyesore is another man's
Notre Dame. So I have a bill called Democracy in Design that
would do just the opposite. So you don't have to thank me for
that question. I want to put that out there as a statement.
Now, through its fine arts program, GSA maintains one of
the oldest and largest public collections in the United States.
Some of this work goes back to the 1850s. It is displayed in
Federal buildings all around the country, courthouses. It
carries deep cultural meaning, significance, helps us
understand our culture and our history.
Now, as you work to get rid of some of these buildings and
to oversee the Federal real estate portfolio, I want to be sure
that this art is being protected, taken care of like it should
be. So we have a Fine Arts Protection Act, directs the GAO to
survey the art that is out there in the collection, provide a
recommendation of how we can protect it. I am wondering if
maybe you are aware of that, if you are doing that. Are you
working with other institutions like the Smithsonian? And what
about the murals that are on the outside of the buildings that
you are selling and tearing down? What are you doing to protect
those?
Mr. Heller. Thank you for the question.
Ms. Titus. Answer the question.
Mr. Heller. All right. All right. Well, we certainly want
to respect the artwork in any facility that GSA is disposing
of, and that is our goal. GSA has options available to itself
to include covenants in the deed, maintain ownership in the
artwork, and those are strategies that we would utilize to
ensure that that artwork is preserved appropriately.
Ms. Titus. Could you give us some of that information about
what those covenants are and what is actually being done,
instead of what you might have in place to protect that art?
Mr. Heller. Yes, ma'am, happy to follow up with the
committee and provide that information.
Ms. Titus. Okay, good. I look forward to getting that.
Now, another question I have is that, recently, the State
Department X account posted that they had renamed the Peace
Institute, the Institute of Peace, to now the Donald Trump
Institute of Peace. Now, I have some personal reservations,
political reservations about putting his name on the Institute
of Peace given his foreign policy and some of his renaming of
the Department of Defense and all that.
But I wonder, what is the GSA's role in allowing that name
change to have happened?
Mr. Heller. The GSA did have no formal role in that
renaming. GSA transferred the building back to the U.S.
Institute of Peace earlier this year, and we had no involvement
in the renaming of that facility.
Ms. Titus. Well, according to our legislative counsel, it
is still a GSA building. So why wouldn't you be involved in
that, or did you just abdicate your responsibility?
Mr. Heller. The transfer back to USIP occurred--I don't
have an exact date, but it occurred within the last month or
so, and would be happy to follow up with you and your team to
clear that issue up.
Ms. Titus. That would be great. And so if you could also
send us maybe any of the communication that we had between GSA
and the State Department about renaming that. Surely they told
you they were going to do it even if you didn't have any input
into it. Or did you just see it driving by?
Mr. Heller. If the committee does have written requests for
information between GSA and the State Department, happy to
follow our normal customary procedures and providing that.
Ms. Titus. Great. Well, thank you.
Now, also, this is not the only thing that is happening
here. I mean, we have torn down the East Wing. I mean, that is
outrageous enough, but now we are hearing from the President he
has got other plans. We are going to have an Arc de Trump. He
is putting together some commission of unknown people, I don't
know who they are, to look at other changes to the White House
and other reforms and other rebuilding, make everything look
like Mar-a-Lago. How is the GSA involved in that?
Mr. Heller. I am not familiar with those conversations,
and, respectfully, I would have to defer to the White House on
that matter.
Ms. Titus. But isn't that your job to those Federal
buildings, to oversee----
Mr. Heller [interrupting]. Well, there are multiple
agencies involved with the management of the White House. GSA
is one of them, but----
Ms. Titus [interrupting]. What about this new arc?
Mr. Heller. I am not familiar with those details, no.
Ms. Titus. It seems like GSA is kind of helpless or
hopeless in light of what is going on with our Federal
buildings and the dictates that come from the President. Is
there any reason to keep you around?
Mr. Heller. Well, I think there is a lot of reasons to keep
GSA around. We deliver savings for the taxpayer, provide high-
value services to our customers. But with respect to the
projects at the White House, I would have to defer to the White
House.
Ms. Titus. Or the public art or the arc or any of that?
Mr. Heller. Well, as I mentioned----
Ms. Titus [interrupting]. I will yield back. Thank you.
Mr. Heller [continuing]. A few moments ago, we are
certainly committed to preserving artwork and respecting its
historical integrity.
Mr. Perry. The Chair thanks the gentlelady.
The Chair now recognizes the Representative from Michigan,
Representative Barrett.
Mr. Barrett. Thank you, Mr. Chairman, and thank you all for
being here. Merry Christmas, and I appreciate your testimony.
I am probably the least qualified person to opine on
architecture and what is artistic and aesthetic. I am just an
Army grunt, so I will leave it to the professionals to make
that determination.
One interesting point I was thinking about is the last
major restoration or renovation in the White House was about 75
years ago, and I think they tore it down to the wall studs and
rebuilt entirely from the inside. And, Mr. Chairman, my great-
grandfather was actually on the commission that helped oversee
that 75 years ago, which was kind of interesting.
But, anyway, the questions I had for you. When I heard we
were having a PBS in our hearing, I thought maybe we were all
going to go viral today, but it turns out you are with a
different PBS. So thank you for being here nonetheless.
I wanted to ask--so I had a Social Security office in my
district that closed for several months. It was a leased
building, and it felt like the property owner was not really
diligently working in earnest to remedy the issues of concern
there before the building and the office could be reopened.
Do you feel that we have adequate enforcement capability
with our--like the leased spaces that we have that are owned by
a landlord, do we have adequate leverage to make sure that they
are enforcing their obligations appropriately?
Mr. Heller. Thank you for the question, Congressman.
Yes, generally, I think we do have the right enforcement
mechanisms embedded into our leased contracts to remedy issues
such as that, in an expeditious manner. Unfortunate to hear
about the Social Security office in your district, and I would
be happy to follow up with you to get more details and get a
better understanding of what took place there and how we can
make sure----
Mr. Barrett [interposing]. Sure.
Mr. Heller [continuing]. That doesn't reoccur elsewhere.
Mr. Barrett. Yes. Thankfully, they have since reopened.
Appreciate the work to get that done. But it did give me
concern that if we were constantly in this dispute with a
landlord with an important office that affects, obviously,
constituents in my district but could be equally applicable
anywhere else in the country, that we want to make sure we have
the appropriate negotiating leverage over the landlord for any
leases that we are engaged in.
I am also curious to know, I mean, we talked a lot about
deferred maintenance and how a lot of legacy buildings are
going to cost a lot more to upkeep or renovate or build back
into a condition of serviceability. So there has been a shift
to kind of go into more leased spaces, which I think in today's
evolving workforce environment might make a lot of sense, that
we have a little bit more of a nimble ability then to scale up
or scale down based on the needs that we have without owning
the underlying assets.
You pointed out some costs associated with that, kind of
more startup costs maybe. Have you done or has there been any
analysis of kind of the break even point, if we were to do
everything that the three of you think may be necessary to get
done to perfectly move into the right appropriate size space
and maybe shed off some of these legacy buildings that may not
be necessary anymore? At what point do you think the taxpayers
could break even on those leased spaces?
Mr. Heller. Thank you for the question, Congressman.
We really look to analyze financially every one of those
transactions that you just described, and typically, we like to
see that we are able to recoup throughout the firm term of the
lease at least the amount of savings in terms of reduced rental
cost to the taxpayer that it costs to move the tenant upfront.
So if it is going to cost $10 million to move the tenant
out of a Federal building into a leased space, we want to
ensure that the Government is going to save at least $10
million during the occupancy of that lease. So that is one of
the ways that we look at it.
Mr. Barrett. Do you take into account--I assume if we
vacate a building, do we sell that, or what happens to the
building in the inventory, or is it, like, by the time it is in
that condition, it is like when you try and trade in your car
when you are in college and it is not worth anything anymore?
Mr. Heller. Every asset is different. There is usually a
market for every one. But, primarily, the savings that we
capture are associated with the deferred maintenance costs and
the annual operating costs that the asset incurs related to
janitorial services, keeping the lights and the heat and the
cooling on, and----
Mr. Barrett [interposing]. Right.
Mr. Heller [continuing]. The operations and maintenance of
the mechanical plan.
Mr. Barrett. Okay. My last question, Mr. Chairman.
A lot of our Federal buildings are historic in nature. If
we have deferred in a lot of maintenance due on them, are we
obligated by a lot of the historic preservation requirements to
replace the building facade with the exact same material that
might be difficult to source, or can we be a little bit more
pragmatic with how we do that?
Mr. Heller. I am not an expert on all of those details. I
certainly have folks within our staff that are. But there are
generally different approaches that you can take to mitigate
different adverse impacts to a historic building. And we work
closely with stakeholders, such as State historic preservation
officers, other consulting parties, where applicable, to put
those measures in place.
Mr. Barrett. Okay. Thank you. Appreciate it.
Thank you, Mr. Chair.
Mr. Perry. The Chair thanks the gentleman.
The Chair now recognizes the Representative from
Washington, DC, Delegate Norton.
Ms. Norton. Thank you, Mr. Chairman.
I strongly oppose the Trump administration's plans to move
Federal agencies outside the District of Columbia and the
National Capital region. However, there are specific Federal
buildings in DC that GSA should dispose of and then relocate
the employees in these buildings to other buildings in DC These
disposals would save the Federal Government money, generate tax
revenue for DC, increase housing supply, and lead to new mixed-
lease neighborhoods.
I am deeply concerned that the Trump administration has not
developed a plan to dispose of Federal buildings in DC in a
manner that benefits both Federal taxpayers and DC.
My question for all three witnesses is, what is your view
of establishing an entity like the Pennsylvania Avenue
Development Corporation or using a mass developer, as was done
for the Southeast Federal Center, now known as The Yards, to
develop a plan for and to manage these disposals? This is for
all three witnesses.
Ms. Krause. I can start. That seems like a reasonable
proposal to explore. I think anytime you have a number of
assets in a similar location, you need to take a strategic look
at how you are redeveloping them. So, that redevelopment really
requires deliberative planning and partnering with local
partners or working, coordinating with local partners to ensure
you are maximizing taxpayer value.
Mr. Capuano. Again, the Board, per se, would have no role
in that, but we have had our discussions. We would strongly
support the general concept of it, especially in the DC area,
but not only in the DC area. There are other cities around the
country that have concentrations of Federal buildings that
would be seriously impacted, depending on what we do with them.
We like the idea of working with local communities or city
leaders to try to come up with what they want. And some of
these areas--especially DC--are just too large, it is more than
just one building, have a major impact on the community, have a
major impact on the real estate values that are underlying. So
we very much favor the concept of creating some sort of entity
to do it. Again, I would say not just in DC, but around the
country. DC is not the only place that has those concerns, but
I think the concept is absolutely right.
Mr. Heller. Yes, I will agree with my colleagues here on
the panel. GSA has begun to make good progress in disposing of
unneeded buildings here in the district. We sold the Webster
School earlier this year. Liberty Loan and our former regional
office building at 7th and D are both currently on the market,
and we would welcome an opportunity to partner with this
committee and other stakeholders to ensure that as we dispose
of these facilities, that they are either reused and
redeveloped in a way that benefits the local community and the
taxpayers.
Ms. Norton. Commissioner Heller, GSA has not been
coordinating closely enough with DC on the disposal of Federal
buildings here. Do you think such coordination is important,
and will you commit to close coordination with DC on all future
disposals?
Mr. Heller. Thank you for the question, Congresswoman.
We agree that stakeholder engagement is an important facet
of disposing of buildings effectively, and we seek to partner
with local communities in every community that we dispose of
Federal buildings in. So, yes, we will continue to partner with
the district and, again, make sure that as Federal buildings
are redeveloped or reused, that they are done in a way that
benefits the local community and the taxpayer.
Ms. Norton. I yield back.
Mr. Perry. The gentlelady yields back. I thank the
gentlelady.
Are there further questions from any of the members of the
subcommittee who have not yet been recognized?
Seeing none, and sadly saying so, that concludes our
hearing for today. I would like to thank each of the witnesses
for your testimony.
This subcommittee stands adjourned.
[Whereupon, at 11:13 a.m., the subcommittee was adjourned.]
Appendix
----------
Questions to Andrew Heller, Acting Commissioner, Public Buildings
Service, U.S. General Services Administration, from Hon. Rick Larsen
Question 1. Is the White House a public building? Has GSA been
involved in the destruction of the East Wing and the planning for the
construction of a new ballroom on the White House grounds?
Answer. GSA did not participate in the recent decision to demolish
the East Wing or any contracting to obtain the services of a demolition
company. GSA has taken no actions, and has no plans to take any
actions, to contract for the planning, design, or construction of the
proposed ballroom.
Question 2. 42 U.S.C. Section 8259 establishes requirements for
energy and water management in federal buildings and defines the term
``Federal building'' as ``any building, structure, or facility, or part
thereof, including the associated energy consuming support systems,
which is constructed, renovated, leased, or purchased in whole or in
part for use by the Federal Government . . . ''
Will the new White House ballroom meet the energy and water
requirements included in 42 U.S.C. Section 8259?
Answer. Please refer to the prior response.
Question 3. President Trump rescinded Executive Order 14057 which
required federal buildings to achieve net-zero building emissions by
2045.
Will GSA continue to participate in the Energy Star program?
Answer. In accordance with the Energy Independence and Security Act
of 2007 (EISA) Section 432 and Energy Act of 2020 requirements, GSA
will continue to use the Department of Energy (DOE) Compliance Tracking
System and the DOE identified benchmarking system (i.e., Energy Star
Portfolio Manager) for its EISA Section 432 covered facilities (75
percent of GSA's utility usage and cost).
Question 4. President Trump revoked President Biden's electric
vehicle mandate and rolled back investments in EV charging
infrastructure.\1\
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\1\ https://www.gsa.gov/directives/files?file=2025-
03%2FPBS%205605.1B%20-%20EVSE%20Order.pdf
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What does EV charging infrastructure at federally owned facilities
under the U.S. General Services Administration's (GSA) jurisdiction,
custody, and control look like today?
Answer. GSA has 184 active electric vehicle charging stations in
its inventory at federally-owned facilities under GSA's jurisdiction,
custody and control.
Question 5. The Trump administration established a 25 percent
tariff on all imported steel and aluminum.
How have these tariffs impacted GSA's construction and renovation
projects?
Answer. GSA continues to see construction cost increases across its
projects for a multitude of reasons including construction material
costs, skilled trade labor shortages in the labor market, and
competition with other infrastructure and private sector construction
work. For example, GSA Infrastructure Investment and Jobs Act Land Port
of Entry projects have seen cost increases upwards of 40-70 percent
from the original funding levels set in 2017-2018.
Question 6. How is GSA providing adequate fire, life, safety and
building operations and management services to federal tenants when
their staff has been cut by nearly 44 percent? Many buildings lack
onsite building managers.
Answer. GSA is following the Administration's guidance to
strategically assess workforce needs and optimize staffing. Our
commitment to providing fire, life, safety, and building operations
remains a top priority. At this time, all GSA facilities have an
assigned building manager and contract support staff to ensure safe
occupancy. GSA continues to explore options to adjust staffing levels
to enable better service to tenant agencies.
Question 7. How many Full-time Employees (FTEs) were working in
GSA's Public Buildings Service (PBS) on January 31st, 2025, and how
many are employed by PBS today? What skill gaps have resulted from
staff reductions and what impacts are they having?
Answer:
January 31, 2025 FTE: 5614
December 31, 2025 FTE: 3268
In October 2025, PBS implemented a new organizational structure
designed to improve customer service and business operations, and
provide a more agile workforce to respond to customer needs. While
these changes are intended to enhance our service delivery, we expect
some challenges given the size of the change and GSA's portfolio during
this period of transition. However, the aim is for customers to
experience minimal impacts on operations or service, and GSA remains
committed to maintaining the appropriate staff and skill sets to
consistently deliver excellent service to all of our customers and to
meet customer's mission-critical real estate needs.
Thanks to this Committee, GSA now has more tools to achieve the
goal of right-sizing the federal real estate portfolio. Chronic
underfunding of the Federal Buildings Fund (FBF) through the enacted
net negative annual budget authority level remains a major challenge to
implementing these reforms.
Question 8. Is GSA currently working with OMB or specific agencies
to relocate operations from DC?
Answer. GSA is working closely with the Office of Management and
Budget and agencies to optimize the Federal real estate portfolio.
Specifically, GSA is partnering with agencies to evaluate agency space
needs, requirements, occupancy data and then examining options and
solutions that support agency mission needs at the best value to the
American taxpayer.
Question 9. What is the status of the Department of Agriculture's
Beltsville Agriculture Research Center in Maryland? Are GSA and USDA
planning to relocate the tenants on the property and dispose of the
land?
Answer. The Beltsville Agricultural Research Center is owned and
operated by the U.S. Department of Agriculture. GSA defers any
questions related to this Center and its tenants to the Department of
Agriculture.
Question 10. In 2019, GSA issued FMR Bulletin B-49 which clarified
that ``sleeping in buildings under the jurisdiction, custody or control
of GSA, including those buildings delegated to other Federal agencies
by the Administrator of General Services, is prohibited, except when
expressly authorized by an agency official.'' \2\ According to press
reports \3\, staff from the Department of Government Efficiency (DOGE)
resided on the sixth floor of the General Services Administration
headquarters from February 2025 through June of 2025.
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\2\ https://www.federalregister.gov/documents/2019/11/05/2019-
24102/federal-management-regulation-fmr-sleeping-in-federal-buildings
\3\ https://www.politico.com/news/magazine/2025/11/21/doge-elon-
musk-succession-00641110
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Question 10.a. Who authorized DOGE staff to reside in GSA's
headquarters building?
Question 10.b. What expenses did GSA incur because of people
sleeping in the building? For example--the purchase of washing
machines, beds, toys, kitchen appliances, as well as cleanup and
disposal costs after the DOGE staff moved out?
Answer to 10.a. & 10.b. Primarily due to increased work demands
associated with the transition period, GSA set aside certain rooms on
an as needed, first-come, first-served basis to accommodate
intermittent sleep. The Government incurred approximately $6,800 to
supply the building with these intermittent sleeping areas.
[all]