    Facilities Location: Agencies Should Pay More Attention to Costs
    and Rural Development Act (31-JUL-01, GAO-01-805).

    This report reviews the types of federal functions that lend
    themselves to being performed at locations other than Washington,
    D.C., and federal regional cities. There are concerns that
    federal agencies may not have been considering locating
    facilities in rural areas, as required by the Rural Development
    Act of 1972 (RDA), particularly in light of recent advances in
    telecommunications technology. GAO found that since its 1990
    report (GGD-90-109) on this issue, federal agencies continue to
    locate for the most part in higher cost, urban areas. Eight of
    the 13 cabinet agencies surveyed had no formal RDA siting policy,
    and there was little evidence that agencies considered RDA's
    requirements when siting new federal facilities. Further, GSA has
    not developed for congressional consideration a cost-conscious,
    governmentwide location policy, as recommended by GAO in 1990. In
    GAO's survey, the sites that involved relocated operations still
    largely remained in urban areas, while the sites that involved
    newly established operations were more evenly spread over the
    rural and urban areas. Federal agencies' mission requirements,
    such as the need to be near clients or other organizations,
    apparently have led them to select urban areas. GAO found that
    government functions, such as research and development, data
    processing, accounting and finance, and teleservice centers, can
    be located in rural areas. Although it is not clear from the
    information GAO collected whether any of the federal agencies
    that located sites in urban areas could have located them in
    rural areas, one matter that is clear is that RDA has not had the
    influence on federal siting practices that Congress appears to
    have intended when RDA was enacted. Many agencies had no RDA
    policy, as required by the act, and many agency personnel in
    GAO's survey either did not consider RDA or did not know whether
    the act was used in making their site selection.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-01-805
        ACCNO:   A01498
      TITLE:     Facilities Location: Agencies Should Pay More Attention
                 to Costs and Rural Development Act
         DATE:   07/31/2001
      SUBJECT:   Cost effectiveness analysis
    	     Federal facility relocation
    	     Rural economic development
    	     Site selection

    ******************************************************************
    ** This file contains an ASCII representation of the text of a  **
    ** GAO Testimony.                                               **
    **                                                              **
    ** No attempt has been made to display graphic images, although **
    ** figure captions are reproduced.  Tables are included, but    **
    ** may not resemble those in the printed version.               **
    **                                                              **
    ** Please see the PDF (Portable Document Format) file, when     **
    ** available, for a complete electronic file of the printed     **
    ** document's contents.                                         **
    **                                                              **
    ******************************************************************
    GAO-01-805

    A

    Report to Senator Byron L. Dorgan U. S. Senate

    July 2001 FACILITIES LOCATION

    Agencies Should Pay More Attention to Costs and Rural Development Act

    GAO- 01- 805

    Letter 3 Results in Brief 5 Background 10 Recently Selected Federal Sites
    Were Mostly in Urban Areas 13 The Rural Development Act and Other Federal
    Policies on Location 21 Lessons From Private Sector Relocations That Relate
    to the Federal

    Government 26 Some Functions Can Potentially Locate in Rural Areas 31
    Conclusions 35 Matters for Congressional Consideration 37 Recommendations
    for Executive Action 37 Agency Comments and Our Evaluation 37

    Appendixes Appendix I: Objectives, Scope, and Methodology 44 Appendix II:
    List of Surveyed Federal Agencies That Recently Selected Site Locations 51

    Appendix III: Location of the 32 Rural Sites (Areas With Populations of
    25,000 or Less) in Our Survey 53

    Appendix IV: Location Factors Considered by Private Sector Organizations 54

    Appendix V: Federal Executive Branch Agencies With Some Level of Independent
    Authority to Acquire Real Property, Calendar Year 2000 55 Appendix VI:
    Survey of Federal Facilities? Locations 57 Appendix VII: Comments From the
    General Services Administration 66 Appendix VIII: Comments From the
    Department of the Interior 70 Appendix IX: Comments From the U. S. Customs
    Service 72 Appendix X: GAO Contacts and Staff Acknowledgments 74

    Tables Table 1: Commercial Rental Rates for Washington, D. C., and the 10
    Federal Cities, Calendar Year 1999 11 Table 2: Federal Executive Branch
    Full- Time Employees in MSAs

    and Non- MSAs 12 Table 3: Established Locations for Sites in Survey: Urban
    or Rural 14 Table 4: Factors Agencies Used to Select the Delineated Area for

    Federal Facilities in the Survey 16

    Table 5: List of Primary Functions Performed at the Sites in the Survey 20
    Table 6: Definitions of Rural Used by Federal Agencies and Selected

    Private Sector Organizations 25 Table 7: Functions That Might be Located in
    Rural Areas 31 Table 8: Benefits and Challenges Associated With Rural Areas
    for Nine

    Functions 32 Table 9: Executive Branch Agencies With Some Level of
    Independent

    Authority to Acquire Real Property 55

    Abbreviations

    APHIS Animal and Plant Health Inspection Service CBA Central Business Area
    CICA Competition in Contracting Act of 1984 DOD Department of Defense GSA
    General Services Administration MSA Metropolitan Statistical Area NARA
    National Archives and Records Administration NCR National Capital Region OMB
    Office of Management and Budget OPM Office of Personnel Management RDA Rural
    Development Act of 1972 USDA United States Department of Agriculture USMS
    United States Marshals Service USPS United States Postal Service

    Lett er

    July 31, 2001 The Honorable Byron L. Dorgan United States Senate

    Dear Senator Dorgan: This report responds to your request that we develop
    information on the types of federal functions that lend themselves to being
    performed at locations other than Washington, D. C., and federal regional
    cities. 1 You

    were concerned that federal agencies may not have been considering locating
    facilities in rural areas, as required by the Rural Development Act of 1972
    (RDA), 2 particularly in light of recent advances in telecommunication
    technology. You specifically asked that we report on (1) What executive
    branch civilian non- Department of Defense functions

    have recently selected urban locations other than Washington, D. C., and the
    federal cities, compared to rural locations, and what factors, benefits, and
    problems were associated with such site selections?

    (2) What federal laws and policies govern facility location and to what
    extent have agencies implemented this guidance? (3) What lessons can be
    learned from private sector site selections? (4) What functions lend
    themselves to being located in rural areas?

    1 Prior to 1995, the Office of Management and Budget (OMB) established in
    Circular A- 105 the following 10 cities as the standard federal cities for
    federal regional headquarters: Atlanta, Boston, Chicago, Dallas, Denver,
    Kansas City, New York, Philadelphia, San Francisco, and Seattle. On June 8,
    1995, OMB rescinded the Circular, stating that the way the federal
    government manages resources, agency efforts to reduce duplicative levels of
    oversight, and the expanded use of technology made a strict regional
    structure inefficient and unnecessary.

    2 7 U. S. C. sect. 2204b- 1.

    To answer the first question, we used a questionnaire and follow- up
    interviews to survey agency officials regarding 115 sites acquired during
    fiscal years 1998 though 2000 by the General Services Administration (GSA)
    or other agencies that exercised their independent statutory

    authority to acquire sites. At your request, we excluded moves to
    Washington, D. C., and the 10 federal cities. We chose space of 25,000
    square feet or larger in order to review decisions with more significant
    economic importance. 3 To determine what federal laws and policies govern
    facility location, we interviewed GSA and other agency officials and
    reviewed relevant laws and policies. We contracted with a consultant 4 who
    surveyed 52 private sector companies and reviewed real estate- related
    literature discussing private sector site selections to determine what
    lessons the public sector could learn from private sector site selections.
    To determine which functions lend themselves to locations in rural areas, we

    used results from our questionnaire survey, interviews with real estate and
    other officials at 13 cabinet agencies, and observations from the
    consultant?s survey.

    3 By using a threshold of 25, 000 square feet, we started with 166 sites
    that were acquired by federal agencies with the assistance of GSA in fiscal
    years 1998 through 2000. If we had used a threshold of 10, 000 square feet,
    we would have initially considered 430 sites. The inclusion of sites under a
    smaller threshold size may have led to more rural sites being included in
    our survey, but the acquisitions of smaller sites probably would have been
    less important for considerations of economic impact. 4 John D. Dorchester
    Jr., of The Dorchester Group, L. L. C., Scottsdale, AZ. The study was
    entitled Office Location Considerations of Large U. S. Corporations: U. S.
    Government Potentials, March 31, 2001. Mr. Dorchester has an M. A
    (Economics), Specialization in Urban

    and Regional Planning and Land Economics. In 1990, Mr. Dorchester also did
    contract work for us on private sector locations, which was included in our
    1990 report that dealt with location policies , Facilities Location Policy:
    GSA Should Propose a More Consistent and Businesslike Approach (GAO/ GGD-
    90- 109, Sept. 28, 1990).

    For this survey, we defined rural area as an area having a population of 25,
    000 and under. We had to select a threshold because RDA is unclear as to
    which population size to use for facility siting. The prior threshold, which
    was eliminated in 1996, used a population threshold of 50, 000 and included
    a population density requirement. Population density data were not readily
    available; therefore, it was not feasible for us to use this definition. 5
    We chose 25, 000 or less because it was used to define rural

    areas by several federal agencies for purposes other than federal siting
    under RDA and private sector organizations that we identified. The 25, 000
    population threshold resulted in the identification of 32 of the 115 sites
    in our survey as rural sites. 6 We did our work from August 2000 to May 2001
    in accordance with generally accepted government auditing standards.
    Although we obtained GSA?s and other agencies? comments on factors they
    considered for site

    selections, we did not attempt to determine the appropriateness of agencies?
    siting decisions. A more complete description of our scope and methodology
    is included in appendix I.

    Results in Brief Since our 1990 study on this issue, federal agencies
    continue to locate for the most part in higher cost, urban areas. Eight of
    the 13 cabinet agencies surveyed had no formal RDA siting policy, and there
    was little evidence

    that agencies considered RDA?s requirements when siting new federal
    facilities. Further, GSA has not developed for congressional consideration a
    cost- conscious, governmentwide location policy, as we recommended in 1990.

    Agencies chose urban areas for the majority (72 percent) of the 115 recently
    acquired federal sites in our survey. Agencies said they selected urban
    areas primarily because of the need to be near agency clients and

    5 The information on population density for areas outside of cities was not
    readily available and is subject to change, pending the results of the 2000
    census. Additionally, when the U. S. Department of Agriculture needs to
    determine whether a city that has applied for a grant is rural or not, and
    may have a population of close to 50, 000, it has experts who survey the
    population density of the city?s surrounding area to determine whether the
    density meets the criteria for rural area. We did not use 50, 000 as a
    population threshold because many of the

    definitions of rural used by federal agencies for purposes other than
    federal siting under RDA and private sector organizations we identified used
    thresholds of 25, 000 or less. 6 See appendix III for a listing of the 32
    rural sites.

    related government and private sector facilities to accomplish their
    missions. Agencies that selected rural areas (areas with a population of 25,
    000 or less) said they did so primarily to be close to existing support

    facilities and because of lower real estate costs. Agencies that relocated
    operations tended to relocate within the same areas where they were
    originally located, which were mainly in urban areas, while newly
    established locations were almost equally divided among urban and rural
    sites. The private sector companies our consultant surveyed reported that
    they select urban areas over rural areas largely because of the need to be
    near a skilled labor force.

    The functions that were recently located predominately at urban sites were
    loans/ grants/ benefits administration processing, inspection and auditing,
    and health and medical services. The functions that were recently located
    predominately in rural areas were research and development, supply and
    storage, automatic data processing, and finance and accounting. Some
    functions were placed in both urban and rural areas, such as law

    enforcement, which was the most prevalent function located in both areas,
    although it was located more often at urban sites.

    Agencies said the benefits experienced by sites in urban areas were
    efficiency in agency performance due to the ability to share existing
    facilities, close proximity to other agency facilities and employees, and
    accessibility to public transportation for both employees and clients.
    Agencies that chose rural sites said that benefits included close proximity
    to agency support facilities, improved building and data security, and
    better access to major transportation arteries. Among the problems reported
    for urban sites were lack of building security and expansion space. For
    rural sites, problems included the lack of public transportation, location
    far from other agency facilities, and insufficient infrastructure for high-
    speed telecommunications.

    RDA and the Competition in Contracting Act of 1984 (CICA), 7 a federal
    procurement law, as well as executive orders, provide guidance on site
    location decisions. When considering the areas in which to locate, RDA

    requires all executive departments and agencies to establish policies and
    procedures giving first priority to the location of new offices and other
    facilities in rural areas. However, we also observed that the definition of
    "rural" used in RDA for federal facilities siting is unclear because the

    7 41 U. S. C. sect.253.

    previous definition used by RDA for locating federal facilities was
    eliminated by amendment in 1996. Furthermore, only 5 of the 13 cabinet
    departments we contacted had a policy to implement RDA. Also, our survey of
    federal facilities showed that for about 73 percent of 113 responding sites,
    respondents said either they did not use RDA in site acquisitions or they
    did not know whether it was used. We recognize that consideration of RDA may
    not have led agencies to make different location

    decisions. Once agencies have selected their respective geographic areas for
    possible locations, CICA generally requires agencies to obtain full and open
    competition for the facility acquisitions within the areas selected.
    Moreover, when agency mission requirements lead agencies to urban areas,
    other federal policies apply. These are (1) Executive Order 12072, which
    requires that central business areas (CBA) be given first preference for the
    location of federal facilities that need to be in urban areas and (2)
    Executive Order 13006, 8 which requires the federal government to utilize

    historic properties and districts to the extent possible, especially those
    located in CBAs.

    Lessons that the public sector can learn from the private sector in locating
    facilities involve factors that contribute to minimizing acquisition costs.
    These factors are (1) taking advantage, where possible, of certain
    incentives offered by localities to attract new employers, such as free
    land,

    and (2) the lower real estate and labor costs available in some areas. The
    private sector cited these two factors as having influenced their decisions
    more frequently than did the federal agencies in our survey. We recognize
    that federal agencies? missions and socioeconomic goals associated with the
    government?s siting policy may sometimes preclude them from taking advantage
    of the potential savings represented by these factors; however, those
    agencies that have flexibility in determining the location of a function

    may be able to take advantage of one or both of these factors so long as
    they are not offset by other higher operations costs. Existing policy, as
    stated in Executive Order 12072 or RDA, which emphasizes locating federal
    facilities in either urban or rural areas to promote economic development,
    does not recognize costs to the government as a factor to be considered in 8
    The National Historic Preservation Act Amendments of 2000 (P. L. 106- 208,
    114 Stat- 318 (2000), amends section 110( a)( 1) of the National Historic
    Preservation Act, 16 U. S. C.sect. 470h2, to codify Executive Order 13006,
    issued May 21, 1996, which encourages federal agencies to use historic
    properties prior to acquiring, constructing or leasing buildings for offices
    and facilities.

    the selection of geographic areas for sites. In our survey of 115 sites
    acquired by federal agencies, agencies reported that for only 15 sites did
    any agency perform cost analyses of alternative geographical areas, to
    compare costs of different areas in which a site could ultimately be
    selected. In 1990, we recommended that GSA develop for congressional
    consideration a more cost- conscious, governmentwide location policy. In
    1991, GSA required agencies to consider real estate and labor costs as part
    of a temporary regulation that subsequently expired; however, its 1997

    replacement did not contain the requirement. In 2001, GSA officials could
    not explain to us why the requirement was deleted.

    According to our review and the study done by our consultant, certain
    functions have potential for rural area locations. In fact, some are already
    in rural areas, such as research and development, finance and accounting,
    law enforcement, and data processing. Other potential functions for rural
    areas include records archiving and teleservicing. 9 Locating offices in
    rural areas depends primarily on the following factors: (1) whether the
    agency has flexibility in determining the location of a function (i. e., the
    function?s mission does not require close proximity to a specified
    population); (2) whether the function can be efficiently and effectively
    performed in a location remote from the agency?s main offices; and (3)
    whether the

    function can be performed without a large, technical workforce often
    associated with urban areas.

    We are suggesting, as matters for consideration, that Congress (1) enact
    legislation to require agencies to consider, along with their missions and
    program requirements, real estate, labor, and other operational costs and
    applicable local incentives when deciding whether to relocate or establish a
    new site in a rural area or urban area and (2) amend RDA to clarify the
    definition of ?rural area? for facility siting purposes to facilitate its
    implementation.

    We are recommending that the Administrator of GSA, in GSA?s role as the
    federal government?s central property management agency, revise its guidance
    on federal facility siting to (1) advise customer agencies that they should
    consider, along with their missions and program requirements, real estate,
    labor, and other operational costs and applicable local incentives

    9 As an example of teleservicing, the American Teleservices Association
    represents call centers, trainers, and consultants that facilitate
    telephone, Internet, and E- mail service and support.

    when deciding whether to relocate or establish a new site in a rural or
    urban area; (2) require that each federal agency subject to GSA?s authority
    provide a written statement to GSA demonstrating that, in selecting a new
    facility location, the agency, as required by RDA, had given first priority
    to locating in a rural area, and if a rural area was not selected, the
    agency?s justification for the decision; and (3) define the term ?rural
    area? to provide

    its customer agencies with a single definition for purposes of federal
    siting under RDA until Congress amends RDA to define the term.

    Seventeen of the 21 agencies commenting on a draft of this report responded
    that they either had no comments, agreed with the information in the report,
    or suggested technical changes, which we considered and incorporated within
    this report where appropriate. GSA, the Department of the Interior, the
    Internal Revenue Service, and the U. S. Customs Service had more extensive
    comments.

    In response to our recommendation that GSA provide agencies with a single
    definition of a rural area for the purpose of RDA until Congress, as we
    suggested, defines the term, GSA agreed to develop a definition for

    agencies subject to its authority. Also, while GSA agreed to issue a
    bulletin to make other agencies aware of the definition of rural, it
    responded that it had no authority to establish or require the use of a
    definition for all federal agencies. The Internal Revenue Service (IRS)
    responded that the definition should be based on terms other than population
    alone. We clarified our report to reflect GSA?s authority to develop a
    definition only for its customer agencies and noted that Congress may want
    to consider factors in addition to population in defining a rural area.

    Regarding our recommendation that GSA require agencies to submit a written
    statement demonstrating the agency had given first priority to locating in a
    rural area and if a rural area was not selected, to include a justification,
    GSA agreed to require the written statement but said that requiring a
    justification would put GSA in the position of second- guessing

    the agencies. IRS also questioned the need for the justification. The
    Department of the Interior commented that the requirement should be limited
    to a minimum dollar threshold, exempt operations that are being

    expanded in the same local area, and be required only if the agency does not
    select a rural area. We emphasized in the report that we are not
    recommending that GSA evaluate the justifications, but we remain convinced
    that a justification is needed to help document that agencies gave first
    priority to rural areas, but only when a rural area was not selected. We
    also believe that expansions of existing operations should be

    subject to this requirement if they might involve a relocation. Although we
    agree that a minimum dollar threshold may be reasonable conceptually, we
    noted that RDA does not include a dollar threshold.

    In response to our recommendation that agencies be required to consider
    certain cost factors along with agency mission when determining whether to
    locate a site in a rural or urban area, the Department of the Interior said
    that the recommendation should be limited to the establishment of new
    offices. The Internal Revenue Service commented that if Congress supports a
    location policy that is economically based rather than socially based,
    Congress should repeal and replace the RDA. We clarified our recommendation
    to consider only relocations and new offices. Also, we noted that we are not
    suggesting that Congress establish a location policy

    based solely on economics but rather that cost should be one of the factors
    considered in siting decisions.

    The U. S. Customs Services responded that it generally agreed with the
    information in the report and provided additional information on the
    uniqueness of its facilities.

    Background GSA is the central management agency for acquiring real estate
    for federal agencies. According to a GSA policy official, GSA is responsible
    for managing the acquisition of about 40 percent of the federal government?s
    office space and 10 percent of all government space. Other agencies, such as
    DOD, have their own authority to acquire space. To acquire real estate, an
    agency must either go through GSA using GSA?s statutory authority, use its
    own statutory authority, or obtain delegated authority from GSA. If it is
    using GSA, the agency must provide GSA with a "delineated area," the

    geographic area where the agency wants to be located. GSA?s policy requires
    its staff to review each delineated area to confirm its compliance with all
    applicable laws and regulations. Once an agency has selected a delineated
    area, GSA, under CICA, is to acquire the site within the selected area
    through the use of full and open competitive procedures. If an agency
    acquires property independently of GSA using its own statutory authority, it
    is responsible for compliance with all relevant laws and regulations but is
    not subject to GSA regulations.

    In 1990, we were asked by Senator Kent Conrad to look at policies that guide
    civilian agencies in selecting facility locations and determine whether any
    changes in federal location policies were warranted. We reported that GSA
    needed to develop a more consistent and cost- conscious

    governmentwide location policy that required agencies, in meeting their
    needs, to maximize competition and select sites that offer the best overall
    value, considering such factors as real estate and labor costs. Since 1990,

    at least two matters raised in that report have remained unchanged. First,
    GSA has not developed for congressional consideration the cost- conscious
    and consistent governmentwide location policy that we recommended. The
    second item that remains unchanged is that rents in the CBAs of federal
    regional cities and Washington, D. C., are generally higher than the rents
    in non- CBA sections of those same cities- an average of $4. 03 per square
    foot higher within calendar year 1999, as shown in table 1. Table 1:
    Commercial Rental Rates for Washington, D. C., and the 10 Federal Cities,

    Calendar Year 1999 Average commercial rents for class A buildings ($/ sq.
    ft) a

    Central business Noncentral business

    Difference (Non- CBA City b area area compared to CBA

    Atlanta $22.36 $23. 45 (1.09) Boston 40.50 31. 20 9. 30 Chicago 33.23 26. 00
    7. 23 Dallas 23.07 24. 10 (1.03) Denver 24. 58 c 23. 98 c .60 Kansas City
    20.00 20. 50 (0.50) New York 47.90 39. 05 8. 85 Philadelphia 24.22 22. 24 1.
    98 San Francisco 47.76 36. 36 11.40 Seattle 33.27 27. 74 5. 53 Washington,
    D. C. 36. 57 c 34. 51 c 2.06 Average $32.13 $28. 10 $4.03 a Class A
    buildings are in excellent locations and are either new buildings or old
    buildings that are competitive with new buildings. b Population for these
    cities ranged from 402,000 to 7,381,000.

    c Data obtained from Trammell Crow Company, a commercial real estate firm.
    All other rental rates were obtained from the Society of Industrial and
    Office Realtors. Source: Society of Industrial and Office Realtors, the
    Bureau of the Census, and Trammell Crow Company.

    According to an April 2001 GSA congressional testimony, high rents for class
    A commercial space in San Francisco, CA, caused three federal

    agencies to move from leased space in San Francisco to leased space in
    Oakland, CA, where rates were 25 percent to 30 percent lower.

    One change that occurred since our 1990 report that affected the workplace
    is the surge in telecommunications services, including widespread access to
    the Internet. One result of telecommunications services is the practice of
    ?telecommuting,? whereby employees can work from home or remote offices for
    all or part of their work week. Telecommuting increased significantly,
    rising from a level of 4 million U. S.

    workers in 1992, according to the Department of Transportation, to 16.5
    million in 2000, according to the International Telework Association and
    Council. 10

    Despite the continuing relative higher cost of urban commercial rents,
    federal employment generally remains focused in Metropolitan Statistical
    Areas (MSA), 11 as shown in table 2.

    Table 2: Federal Executive Branch Full- Time Employees in MSAs and Non- MSAs
    Number and percent of federal full- time employees in fiscal years 1990 and
    2000

    1990 2000 Location Number Percent Number Percent

    MSA 1, 686, 959 85 1,371, 381 85 Non- MSA 295, 556 15 191, 057 12 Total 1,
    982, 515 100 1, 619, 914 a 97 b Note: Numbers include DOD civilian
    employees, but not DOD uniformed personnel, Postal Service employees, or
    intelligence agency employees. a Total includes 57,476 employees for whom
    there were no MSA/ Non- MSA data.

    b For about 4 percent of federal employees, there were no MSA/ Non- MSA
    data. Total does not add to 100 percent because of rounding. Source: Office
    of Personnel Management.

    10 The International Telework Association and Council is a nonprofit
    organization specializing in telework. 11 An MSA is an area having 1 or more
    counties containing a city of 50, 000 or more or a Census Bureau- defined
    urbanized area and a total population of at least 100, 000 (or 75, 000 in
    New England).

    Recently Selected During fiscal years 1998 through 2000, agencies chose
    urban areas for

    about 72 percent of the 115 12 acquired federal sites in our survey and
    Federal Sites Were

    selected rural areas (those with a population of 25, 000 or less) 13 for
    about Mostly in Urban Areas

    28 percent of the sites. Agencies reported that mission was the primary
    factor used to determine the location for over one- half of the sites and
    that the mission dictated the need to be in close proximity to clients,
    other agency facilities, and related organizations. GSA conducted the

    acquisitions for 79 of the sites using GSA authority, and agencies using
    their own statutory authority conducted the acquisitions for the other 36
    sites. Agencies selecting urban sites reported that close proximity to other
    agency facilities and organizations contributed to cost savings resulting

    from less travel, more prompt on- site support, and ease in technology
    sharing. Other benefits reported for urban sites included the availability
    of a skilled labor pool and accessibility to public transportation for both
    employees and agency clients. Agencies that chose rural sites reported some
    similar benefits, stating that close proximity to related or support agency
    facilities and proximity to industries with which the agency is connected
    resulted in more efficient use of agency resources and less travel. Other
    benefits reported for rural sites included better building and

    data security and improved access to major transportation arteries.
    Officials reporting for about 66 percent of the sites either said no
    problems existed at the sites (45 percent), or they did not respond to the
    survey question (21 percent). For the remaining sites, agencies selecting
    urban

    areas reported problems such as lack of secure buildings, lack of expandable
    space, and high rental rates. Agencies selecting rural areas reported
    problems such as lack of infrastructure for high- speed telecommunications
    and a lack of access to public transportation.

    Functions performed at the sites varied, and some functions were performed
    in both urban and rural areas.

    12 The 115 sites involved 32 different agencies (25 of which were either
    components of cabinet departments or the cabinet departments themselves, and
    7 were independent agencies). See appendix II for a list of the agencies
    that selected the locations. 13 As noted in the objectives, scope, and
    methodology section in appendix I, 26 of the rural sites that fell within
    the 25, 000 population threshold were located in MSAs in which large cities
    were located. A list of the rural sites is in appendix III.

    Most of the Sites Were Eighty- three (or 72 percent) of the sites in our
    survey were located in urban

    Located in Urban Areas communities (areas with a population above 25, 000),
    and 32 (or 28 percent)

    were located in rural areas (areas with a population of 25, 000 or below).
    Most of the 115 site selections involved relocations within existing
    communities (56) or expansions of existing sites (14). As table 3 shows, the
    number of newly established locations (locations for agency functions for
    which the agency neither relocated nor expanded an existing site) was almost
    evenly distributed between rural and urban areas. Functions at the

    six rural sites selected for newly established locations included storage/
    inventory (mainly Census Bureau material for the 2000 Census), air traffic
    control, and law enforcement. The seven urban areas selected for the newly
    established locations included functions such as document archiving,
    passport production, law enforcement, and inspection of diseased plants near
    plant quarantine areas.

    Table 3: Established Locations for Sites in Survey: Urban or Rural Sites in
    Sites in

    urban Percent of

    Type of move rural area area Total sites total sites

    Relocated within same community 7 49 56 48. 7 Relocated from one community
    to

    14 18 32 27. 8 another community Newly established location 6 7 13 11. 3

    Expansion of same site 5 9 14 12. 2

    Total sites 32 83 115 100

    Note: The 83 sites in urban areas were in areas with populations of over
    25,000, and the 32 sites in rural areas were in areas with populations of
    25,000 or fewer.

    Source: GAO analysis of survey data.

    As table 3 shows, of the 32 sites that were relocated from one community to
    another community, 18 were in urban areas and 14 were in rural areas. Among
    these relocated sites, law enforcement and administrative program management
    were the most prevalent functions; and the two functions were about evenly
    divided between urban and rural sites. However, the finance and accounting
    and research and development functions were found only at rural sites.
    Functions at the urban relocated sites included

    inspecting/ auditing, tax administration, and aviation operations.

    An agency can use GSA to acquire property on its behalf or acquire the
    property independently, using either statutory authority or authority
    delegated by GSA. No major difference existed in the percentage of urban
    sites selected, regardless of whether the site decisions were made by
    agencies working with GSA or made independently of GSA. About 71 percent of
    the sites that GSA procured on behalf of agencies were in urban areas, and
    about 75 percent of the sites agencies selected independently of GSA were in
    urban areas.

    Agencies Reported That From a list of 12 factors (and an overall ?others?
    category) in our survey, Agency Mission

    agencies reported that they considered numerous factors to determine the
    delineated area 14 for the sites in our survey. As shown in table 4,
    agencies Requirements Determined considered mission in making location
    decisions for 82 of the sites in our

    Site Location survey. The next most- cited factors were transportation
    efficiencies, which

    was considered for 46 sites; and particular space needs, such as specialized
    floor layouts, which was considered for 45 sites.

    14 GSA defines the delineated area as the specific boundaries within which
    space will be obtained to satisfy an agency?s space requirements.

    Table 4: Factors Agencies Used to Select the Delineated Area for Federal
    Facilities in the Survey Number of sites where each factor was considered
    during the location decision

    Tot al Number of

    Number of number of

    Percent of Factors agencies used to determine where to locate federal
    facilities rural sites urban sites

    sites total sites

    Agency mission requirements (e. g., need to be near customers) 19 63 82 71.
    3 Transportation efficiencies (proximity to interstate highways, airports,
    rail lines) 14 32 46 40. 0 Particular space needs (size or nature of
    facility) 14 31 45 39. 1 Public transportation (proximity to mass transit,
    such as subways and buses) 10 23 33 28. 7 Low real estate costs 14 11 25
    21.7 Use of existing infrastructure investment 13 9 22 19. 1 Employees must
    be located near coworkers at another site 11 10 21 18. 3 Needed sufficient
    competition to meet the Competition in Contracting Act

    8 9 17 14. 8 requirements Recruitment and/ or retention issues (e. g.,
    quality of life, available applicant pool,

    5 111613. 9 and local economic conditions) Personnel cost considerations 6 9
    15 13. 0

    Political considerations/ congressionally directed 1 8 9 7. 8 Low labor
    costs 1 232. 6

    Note: The number of sites we surveyed totaled 115. Eighty- three were in
    urban areas (areas with population of over 25,000), and 32 were in rural
    areas (areas with population of 25,000 or less). The number of sites will
    not total to these numbers because agencies cited more than one factor as
    the reason for selecting the delineated area for some of the sites.

    Source: GAO analysis of survey data.

    In their discussion as to why agency mission was the primary factor for site
    selections, agencies most often cited the need for the site to be in close
    proximity either to the mission service area, other agency facilities, other

    government agencies, or related private sector organizations. For example:
    The U. S. Customs Service (Customs) reported that it chose the

    delineated area for its international mail inspection function in Carson,
    CA, because the U. S. Postal Service (USPS) had relocated its international
    mail operations to Carson, CA, and Customs needed its inspection function to
    be near the international mail site. Customs also reported that its
    cybersmuggling center needed to be located within the concentration of
    private computer- based industries in Fairfax, VA.  U. S. Attorney offices
    reported that their policy is to be within four

    blocks of federal courthouses because, as the principal litigators for the
    U. S. government, U. S. Attorneys need to be available for courtroom

    activities on a regular basis. U. S. Marshals Service (USMS) offices also
    reported that USMS offices need to be colocated with the courts because the
    agency?s primary concern is the safety and security of the judiciary, the
    judicial process, and its participants.  The Department of Agriculture?s
    Animal and Plant Health Inspection

    Service (APHIS) reported that the delineated areas of its sites in our
    survey were selected because they needed to be in close proximity to
    diseased plant quarantine areas. The Federal Emergency Management Agency
    also reported that its Pasadena, CA, site in our survey needed to be in
    close proximity to a disaster area.

     The Immigration and Naturalization Service reported that its national
    records center had to be located as close as possible to a National Archives
    and Records Administration (NARA) center in Lees Summit, MO, to reduce the
    costs associated with a high- volume records transfer to NARA.  Agencies
    providing services to the public, such as the Social Security

    Administration (SSA), IRS, and the Department of Veterans Affairs, reported
    that the delineated areas for their offices/ clinics were selected because
    the agencies needed to be as close as possible to the client/ patient
    population that the agencies service. Agencies did not select rural areas
    for 83 of the 115 sites in our survey. For about 75 percent of the 83 sites,
    agencies cited mission requirements as the reason for not selecting rural
    areas. They again cited proximity

    considerations and said that locating the sites in rural areas would have
    placed them too far from their clients, other supporting agency facilities,
    related research facilities, or the function they had to monitor. For
    example, GSA?s Federal Technology Service reported that it did not consider
    a rural area for its site because the function needed to remain in

    the Washington, D. C., area to have access to its major customers and
    telecommunications providers. Other reasons for not selecting rural areas
    included the need to be near

    public transportation and rural areas? lack of the necessary labor pool and
    sufficient space. Some respondents also said that rural areas can have high
    costs, such as for transportation to airports. The Bureau of Reclamation
    stated that a water resources management operation was not located in a
    rural area because of the unavailability of a building to meet space needs.

    The IRS said it did not place a telephone based customer service site in a
    rural area because of the need for a large number of recruitment candidates
    who were available only in a more heavily populated area. Similarly, the SSA
    said that when one of its teleservicing centers needed additional

    space, it did not move the center to a rural area because of the difficulty
    of locating sufficient space and personnel in rural areas. In addition to
    agency mission, lower real estate cost was one of three main factors that
    contributed to the selection of the 32 rural sites. Respondents representing
    almost one- half of the rural sites identified (1) lower real estate costs;
    (2) particular space needs (e. g., specialized space for security

    reasons); and (3) transportation efficiencies, such as access to major
    arteries, as factors considered in the site selection decisions. Agencies
    Reported Benefits In response to our survey?s request to list three chief
    benefits and and Problems With Selected

    problems, if any, associated with the selected location for sites in our
    Sites

    survey, agencies reported numerous benefits and few problems for both urban
    and rural locations. The benefits of urban areas included close proximity to
    other agency resources, such as support facilities and related government
    agencies, and related private sector organizations. Agencies said proximity
    was a benefit because it contributed to more prompt on- site support and
    cost savings resulting from less travel and transportation of material over
    distances and eased technology sharing and daily interaction

    among related organizations. For example, both the Forest Service and APHIS
    reported that their sites? close accessibility to universities allowed for
    sharing of advanced technologies and improved collaboration between the
    agency and university researchers. Also, the Department of Veterans Affairs
    reported that the urban location of one of its clinics was a benefit because
    it was in close proximity to the city?s medical center complex.

    Other benefits cited for sites in urban areas included the availability of a
    skilled labor force, the ability to use existing infrastructure, and the
    accessibility of public transportation for both employees and clients.
    Agencies that located sites in rural areas reported some similar benefits,
    such as close proximity to related or support facilities, other program
    employees, and the industry to which the agency was connected. They said
    proximity resulted in more efficient use of agency resources and less
    travel. Other benefits reported for rural sites included improved building

    and data security and accessibility to major transportation arteries.
    Agencies reported they had no problems with about 45 percent of the sites,
    either urban or rural. They provided no response to this survey question for
    another 21 percent of the sites. For the remaining sites, agencies

    selecting urban areas reported problems such as lack of secure buildings and
    expandable space, traffic problems, high rental rates, and specific

    problems with buildings needing repairs. Agencies selecting rural areas
    reported problems such as a lack of proximity to other agency facilities and
    public transportation, great distance from major airports, and a lack of
    necessary infrastructure for telecommunications and city waste management
    services. Functions Located at As table 5 shows, agencies reported that the
    three most common functions Established Sites Varied located in rural areas
    included law enforcement, research and Widely

    development, and supply storage and inventory control. Three functions,
    automated data processing, finance and accounting, and social services, were
    located only in rural areas.

    Table 5: List of Primary Functions Performed at the Sites in the Survey
    Sites in Sites in

    urban Tot al

    Percent of Primary functions rural area

    area sites total sites

    Law enforcement, security, border patrol 7 24 31 27. 2 Loans/ grants/
    benefits administration/ application and claims processing 1 11 12 10. 5
    Administration/ program management 2 8 10 8. 8 Supply storage and/ or
    inventory control 5 3 8 7. 0 Research and development 5 387. 0 Health and
    medical services 1 565. 3 General support services 2 243. 5 Document
    archiving and storage/ records management 1 3 4 3. 5 Plant health
    inspection/ quarantine areas/ disaster operations 0 4 4 3. 5 Aviation and
    space operations 2 2 4 3. 5 Parks, natural resources, environment
    management/ water resources management 0 3 3 2. 6 Telephone- based customer
    service (teleservicing) 1 2 3 2.6 Inspecting/ auditing/ examining/
    monitoring 0 4 4 3. 5 Automated data processing and/ or electronic storage 2
    0 2 1. 8 Finance and accounting 2 021. 8 Equally combined functions
    (enforcement/ benefits/ medical services) 0 2 2 1. 8 Passport operations 0
    221. 8 Tax administration 0 110. 9 Social Services 1 010. 9 Communications 0
    110. 9 Insurance operations 0 110. 9 Morale, well- being, and recreation 0 1
    1 0. 9

    Total sites 32 82 114 100.2

    Note: The number of sites we surveyed totaled 115. Eighty- three were in
    urban areas (areas with population of over 25,000), and 32 were in rural
    areas (areas with population of 25,000 or less). The total number of sites
    in this table is 114, because 1 agency reported that although it obtained
    the space, none of the agency?s functions were performed at the site; other
    agencies use the site. The total percentage does not add to 100 due to
    rounding.

    Source: GAO analysis of survey data.

    The three most common functions located in urban areas were law enforcement,
    administration of loans/ grants/ benefits and processing of applications and
    claims, and administration/ program management. Law enforcement was the most
    prevalent function in both urban and rural areas, although it was more
    prevalent in urban areas. Also, although research and development and supply
    storage and inventory functions

    were more prevalent in rural areas, sometimes they were also located in
    urban areas. The Rural

    Several laws and executive orders affect the location of federal facilities.
    Development Act and

    The laws, which take priority over the executive orders, include RDA, the
    primary law on rural siting; and CICA, a law governing federal acquisition
    Other Federal Policies

    generally. When considering areas in which to locate, RDA "directs the on
    Location heads of all executive departments and agencies of the Government
    to establish and maintain departmental policies and procedures giving first
    priority to the location of new offices and other facilities in rural
    areas.?

    Any move by an agency to new office space in another location would be
    considered a new office or facility covered by RDA. Once agencies have
    selected their respective areas for possible locations, CICA generally
    requires that agencies obtain full and open competition for facilities

    acquisitions within the areas selected. The two primary executive orders on
    federal facility location decisions are Executive Order 12072 of August 16,
    1978; and Executive Order 13006 of May 21, 1996. Executive Order 12072
    specifies that when the agency mission and program requirements call for
    facilities to be located in urban

    areas, federal agencies must give first consideration to locating in a CBA
    and adjacent areas of similar character. Executive Order 13006 requires the
    federal government to utilize and maintain, wherever operationally
    appropriate and economically prudent, historic properties and districts,
    especially those located in the CBA.

    Agencies acquiring real estate are responsible for complying with federal
    laws and executive orders. If GSA is acquiring the real estate for an
    agency, then GSA regulations state 15 that GSA is responsible for ensuring
    compliance with ?all applicable laws, regulations, and Executive orders."
    However, if the agency is making the acquisition under its independent
    statutory authority, or through a delegation from GSA, the agency is

    responsible for compliance with relevant laws and regulations. Some agencies
    also have been provided statutory authority to acquire real estate for
    different purposes. Some agencies such as the Tennessee Valley Authority
    (TVA) have been provided broad authority. TVA is authorized to purchase or
    lease real property that it deems necessary or convenient in transacting its
    business. 16 Other agencies? statutory authority is for more limited
    purposes. For example, the Secretary of the Interior is authorized to lease
    buildings and associated property for use as part of the National Park
    System 17 and the Secretary of the Treasury is authorized to lease

    space for the storage of unclaimed or other imported merchandise that the
    government is required to store. 18

    Limited Consideration of RDA states that executive departments and agencies
    must establish

    RDA policies and procedures to give first priority to the location of new
    offices and other facilities in rural areas. However, among the 13 cabinet
    departments, only the departments of Agriculture (USDA), Commerce,

    Labor, Transportation, and the Treasury had written policies specifically
    addressing RDA. The other departments (Justice, Health and Human Services,
    the Interior, Housing and Urban Development, State, and Education) said they
    did not have policies on RDA; and two (Energy and Veterans Affairs) said
    they expect all employees to abide by all policies on

    facility acquisitions, but they also had no written policies regarding RDA.
    In addition, many agency real estate specialists in field offices also said
    either their agencies did not have RDA policies or they did not know if
    their agencies had such policies. Among the 113 sites for which we received
    responses, 61 sites involved agencies that did not have RDA policies, and 24

    15 Interim Rule D- 1, 41 C. F. R. 101- 21, appendix to subchapter D sect. 101-
    17. 205( h). 16 16 U. S. C. sect. 831c. 17 16 U. S. C. sect. 1a- 2. 18 19 U. S. C. sect.
    1560.

    involved agencies that had policies. Respondents for 28 sites also said that
    they did not know if their agencies had RDA policies.

    Our survey also requested respondents to report which of the four applicable
    laws and executive orders were considered in the acquisition of the surveyed
    sites. Agencies reported that  CICA was considered for 73 percent of the
    113 sites for which a response was received,  Executive Order 12072 (on
    locating in CBAs) was considered for 50 percent of the 113 sites for which a
    response was received,  Executive Order 13006 (on historic districts) was
    considered for 43 percent of the 112 sites for which a response was
    received, and  RDA was considered for about 27 percent of the 113 sites for
    which a

    response was received. Agencies reported that they considered RDA for 8 of
    the 36 sites that were acquired independently of GSA. Agencies also reported
    that RDA was considered for 21 of the 79 sites acquired by GSA. Conversely,
    for about 73 percent of 113 sites for which a response was received,
    respondents said they either did not use RDA in site acquisitions or did not
    know whether it was used.

    To determine if GSA was requiring agencies to apply RDA, we looked at GSA
    regulations and examined 33 GSA lease files. GSA regulations state that
    federal agencies using GSA are responsible for identifying their delineated
    areas, 19 consistent with their missions and program requirements in
    accordance with applicable regulations and statutes, including RDA. The
    agencies must also submit to GSA a written statement explaining the basis
    for their delineated areas, and GSA is responsible for reviewing these
    delineated areas to confirm their compliance with laws and

    regulations. We looked at 33 files involving GSA leases made from 1989
    through 2000 in 3 GSA regions, including the Rocky Mountain Region, based in
    Denver; the Greater Southwest Region, based in Ft. Worth, TX; and the Mid-
    Atlantic Region, based in Philadelphia. We found no mention of RDA in any of
    the 33 acquisition files. In the files we examined, we did find cases where
    GSA requested modification of the delineated area in 19 Interim Rule D- 1,
    41 C. F. R 101- 21, appendix to subchapter D (101- 17.205( a). GSA defines
    the delineated area as the specific boundaries within which space will be
    obtained to satisfy

    an agency?s space requirements (101- 17. 205( p).

    response to other criteria, such as CICA. Additionally, a GSA official in
    the National Capital Region (NCR) provided us with a checklist of documents
    that are expected to be in each NCR lease file. Neither the 1999 checklist
    nor the 2000 update of that list mentioned RDA, although both mentioned

    Executive Orders 12072 and 13006. What Constitutes Rural or In addition to
    agencies? limited consideration of RDA, the act?s definition of Rural Area
    Is Unclear

    "rural" is unclear. RDA provides that rural areas, for the purpose of
    federal facilities location decisions, are defined in the private business
    enterprise exception in section 1926( a)( 7) of title 7 of the U. S. Code.
    Prior to 1996,

    this exception in 7 U. S. C. sect. 1926( a)( 7) defined rural as ?all territory
    of a State that is not within the outer boundary of any city having a
    population of fifty thousand or more and its immediately adjacent urbanized
    and urbanizing areas with a population density of more than one hundred
    persons per square mile, as determined by the Secretary of Agriculture
    according to the latest decennial census of the United States: Provided,
    that special consideration for such loans and grants shall be given to areas
    other

    than cities having a population of more than twenty five thousand.? However,
    in 1996, 7 U. S. C. sect. 1926( a)( 7) was repealed and replaced with a new
    section 1926( a)( 7) that defines ?rural? and ?rural areas? but no longer
    contains a provision or even a reference relating to the private business
    enterprise exception. 20 The new section 7 U. S. C. sect. 1926( a)( 7) defines
    rural- but only for water and waste disposal grants and direct and

    guaranteed loans- as "a city, town, or unincorporated area that has a
    population of no more than 10, 000 inhabitants." Different Agencies Use

    Government agencies have different definitions of what constitutes a rural
    Different Rural Definitions area. For example, GSA uses two different
    population thresholds to define rural area for purposes of RDA. According to
    GSA Interim Rule D- 1, a rural area is any area "that (i) is within a city
    or town if the city or town has a

    population of less than 10,000 or (ii) is not within the outer boundaries of
    a city or town if the city or town has a population of 50,000 or more and if
    the adjacent urbanized and urbanizing areas have a population density of
    more than 100 per square mile."

    20 Public Law No. 104- 127, 110 Stat. 888, 1123 (1996).

    Meanwhile, as table 6 shows, other federal agencies use other definitions of
    rural to implement various federal programs; and private organizations use
    other definitions as well.

    Table 6: Definitions of Rural Used by Federal Agencies and Selected Private
    Sector Organizations Agency/ organization Population thresholds and
    definitions for rural area

    Census Bureau Under 2,500 or open country Department of Agriculture?s
    Economic Under 2,500 Research Service (Metro or nonmetro area)

    Department of Agriculture?s Rural Business Under 10, 000 Opportunity Grant
    Program (Open country not associated with urban area) USDA defines open
    country as open space separated from any adjacent densely populated urban
    area. Department of Agriculture?s Rural Housing 10, 000 and under Programs
    Department of Housing and Urban One of five ways:

    Development?s Rural Housing and Economic (1) Under 2,500 population (metro
    or nonmetro area). Development Program

    (2) Counties with no urban population of 20, 000 or more. (3) Rural portions
    of "extended cities,? as defined by the Census Bureau. (4) Open country that
    is not part of or associated with an urban area. (5) Not over 20, 000 and
    not in MSA.

    Plants, Sites and Parks Magazine a 20, 000 and under (50 miles or more from
    major city or MSA)

    Department of Agriculture?s Intermediary Under 25, 000 Relending Program
    National Middle School Association a Under 25, 000

    Housing Assistance Council a 25, 000 or fewer General Services
    Administration (Rural Under 10, 000 or under 50, 000 Development Act
    implementation) Department of Agriculture?s Rural Business Under 50, 000

    Enterprise Grants Department of Agriculture?s Rural Business Under 50, 000
    Cooperative Service OMB Nonmetropolitan areas (areas other than "core
    counties? containing one or more central

    cities with at least 50, 000 residents or an urbanized area and a total
    population of at least 100,000 (75,000 in New England) and adjacent
    communities that have a high degree of social and economic integration with
    the core counties). a A nongovernmental organization.

    Source: Department of Agriculture, the Bureau of the Census, Department of
    Housing and Urban Development, OMB and private sector organizations.

    Lessons From Private According to our study and our consultant?s review,
    location factors

    Sector Relocations considered important by the private sector for minimizing
    costs might benefit the public sector. These factors are (1) incentives
    offered by

    That Relate to the localities to attract new employers, such as free land;
    and (2) the lower real

    Federal Government estate, labor, and operational costs available in some
    areas. The private

    sector cited these two factors as having influenced their location decisions
    more frequently than did the federal agencies in our survey. We recognize
    that federal agencies? missions may sometimes preclude them from taking

    advantage of the savings represented by these factors. However, in instances
    where an agency has flexibility in locating a function, the agency may be
    able to take advantage of one or both of these factors, so long as they are
    not offset by other higher operational costs.

    Location Factors Important According to our consultant, there are two broad
    steps involved in office

    to the Private Sector location decisions made by the private sector. The
    first step is to determine

    whether a given location is functionally suited to achieve the purposes of
    the office that is to be located. The second step is to test the location
    for its ability to meet a range of factors that have been shown to be
    important in meeting required goals. Our consultant found that corporations
    strongly

    preferred urban locations over rural ones. The determining location factor
    for most companies, he said, derives from a specific location?s
    characteristics. 21 The private sector considers numerous factors in making
    location decisions, and the relative importance of the factors appears to be
    company specific. 22 However, our consultant?s literature search and survey

    of 52 private sector companies identified several factors as the main areas
    of consideration in the private sector location decisionmaking process. They
    were (1) transportation and logistics, (2) labor availability and cost,

    (3) real estate costs, and (4) business climate and business incentives. Of
    these factors, some were location factors considered by the federal sites we
    surveyed and some were not.

    21 According to our consultant, the inclusion of manufacturing firms in his
    study did not skew the results because the study focused only on office
    locations and not on the location of manufacturing facilities. 22 See
    appendix IV for location factors the private sector considered.

    Transportation: Access to Access to highways and major thoroughfares is
    important for employees

    Highways, Trains, and Airports who commute and essential to maintaining
    connections to companies? suppliers and customers. When asked to rate the
    importance of transportation and logistics, 17 of the 52 respondents in our
    consultant?s survey gave it the highest rating for headquarters offices, and
    over one- half gave it the highest rating for satellite (field) offices. 23
    With the increasing globalization of markets, easy access to airports is
    also very important in corporate location decisions. Professional services,
    such as those of accountants and lawyers, also increasingly require access
    to airports, our consultant said. Transportation factors were also important
    to the public sector. In our survey of federal agency sites, officials for
    40 percent of the sites said access to transportation, such as airports,
    trains, and highways, was an important factor in their location decisions.
    Examples cited by the agencies included easy access to airports for trainees
    from around the nation and access to highways for service centers.

    Availability and Cost of Labor According to our consultant, the availability
    and cost of labor are among the most important location factors for the
    private sector. Most of the corporations responding to our consultant?s
    survey rated these among the top location factors considered when locating
    either their headquarters or field offices. Asked to rate the importance of
    "availability and cost of labor supply,? of the 52 survey respondents 30
    gave it the highest rating for

    headquarters offices and 32 gave it the highest rating for satellite (field)
    offices. Our consultant emphasized that the availability of sufficient and
    qualified labor is crucial to any business location decision because, even
    in a low- wage area, the need to train a qualified workforce can wipe out
    savings from lower labor costs. Our consultant also stated that while many
    small towns on the fringes of metropolitan areas have experienced rapid

    growth, their small populations suggest that they will remain small, which
    can be a liability to attracting companies. Labor costs include not only
    wage rates but also benefits, unemployment insurance, and workmen?s
    compensation requirements. Labor costs also include costs associated with
    recruitment and training and the competition for labor within the same area.
    Some companies try to avoid areas where 23 Our consultant?s report indicated
    that satellite (field) offices are similar to federal regional offices in
    that they are located apart from the principal office, are smaller, and
    serve a

    particular function.

    they have to compete with major competitors for the same labor pool because
    of the possibility that skilled labor would be unavailable or that
    competitors would drive up the wage rate. According to our consultant,

    these factors are particularly important when considering rural areas where
    educational qualifications, in some cases, are not so readily available.

    Availability and cost of labor were not location factors considered by
    federal agencies for most of the sites in our survey. Respondents reported
    that they considered personnel costs, including lower labor costs and
    recruitment and retention costs, in location decisions for no more than 23
    of the 115 sites in our survey. Whether the federal government can adopt the
    private sector?s practice in this area is open to question because, as
    previously mentioned, the primary location factor cited by federal agencies
    for the sites in our survey was agency mission. If agency mission dictates
    where most of the federal facilities have to be located, specifically in
    close proximity to clients, then the agency may have little flexibility to
    realize costs savings from low- wage areas.

    Lower Real Estate and Operating Since at least 1990, real estate costs have
    consistently ranked among the

    Costs top 10 factors influencing private sector location decisions. Real
    estate costs include direct costs (i. e., land, building, and occupancy
    costs such as rent and utilities), and indirect costs (costs such as
    shipping,

    transportation, and storage). When direct costs are higher in one community
    than another, the addition of lower indirect costs may result in a lower
    overall real estate cost in the community with higher direct costs. When
    asked to rate the importance of real estate costs, 31 percent of the

    corporate survey respondents gave this factor the highest rating for
    corporate headquarters offices, and 63 percent did the same for corporate
    field offices. Real estate cost was cited less frequently by federal
    agencies in our survey than by the private sector in making site location
    decisions. Agencies reported that for about 22 percent of the sites in our
    survey, lower real estate cost was a factor in the decision. If the public
    sector adopted this private sector practice, specifically for functions
    where agencies have flexibility as to where they may be located, potential
    savings could be

    offered by lower real estate costs, so long as the savings are not offset by
    other higher operating costs.

    Business Climate and Business The business climate of an area, including its
    business incentives, is a cost Incentives factor highly important to the
    private sector. When asked to rate the

    importance of an area?s business climate, 54 percent of respondents in our
    consultant?s survey gave it the highest rating. Business climate factors
    include the general business potential and receptivity of a community to the
    corporate purpose. This includes the community?s economic health, its
    organization and preparedness for growth, and the capacity of the

    community to support future growth of the locating company. For example,
    zoning issues are critical. Similarly, business incentives, such as tax
    abatements, free land, or infrastructure improvements offered by a
    community, are indicative of the business climate and are highly important
    location decision factors. According to our consultant, while incentives do

    not replace the need for a company?s location to make good business sense,
    incentives become a means of distinguishing among otherwise acceptable
    alternatives.

    Business incentives were mentioned by only 2 agencies in our survey of 115
    sites. USDA said it chose a site at a local university for wildlife research
    because Colorado State University made land available at no cost. In return,
    USDA agreed to work in cooperation with university students on wildlife
    research. The Environmental Protection Agency (EPA) said when the lease
    expired for its regional office in Kansas City, KS, it relocated to another
    location within the city because the city provided free land. EPA

    reported that this was a ?win- win? situation for both the agency and the
    city because the agency saved on its real estate costs, and the office
    benefited the economically depressed area where it is located. The limited
    use of local incentives by agencies in our survey contrasts with the
    emphasis the private sector places on incentives to save costs. For example,
    functions that need not be in proximity to the public or other facilities-
    such as training, data processing, document distribution, or telephone-
    based servicing- have the potential to take advantage of local

    incentives. While federal agencies cannot take advantage of all local
    incentives, such as tax relief, they might make use of other local
    incentives. For example, our 1990 report, referred to earlier, noted that
    the Bureau of Engraving and Printing chose a site in Ft. Worth, TX, in the
    late 1980s in part because of incentives offered by the locality. The
    incentives included the donation of 100 acres of land and construction of a
    building, a total package valued at between $12.5 million and $15 million.

    Public policy may have an impact on the extent to which federal agencies may
    seek incentives provided by local communities. The public sector sometimes
    seeks to provide economic assistance to certain areas, rather than the
    reverse- consider how the government may benefit from an area.

    RDA and executive orders, such as Executive Order 12072, promote locating
    federal agencies in rural areas or in the central business districts of
    urban areas to foster their economic development. In contrast, according to
    our consultant, the private sector seeks the reverse- consider how the

    corporation may benefit from the community. Government Lacks

    The government lacks a cohesive overall location policy that requires
    Cohesive Location Policy agencies to consider costs when initially deciding
    whether to locate a site in a rural or an urban area. In 1990, we reported
    that the government was

    not as cognizant of cost considerations as was the private sector and that
    government policy was aimed at improving the economic development of either
    rural areas through RDA or urban areas through the executive orders. We
    recommended that GSA develop for congressional consideration a more
    consistent and cost- conscious govermentwide location policy that considers
    such factors as maximizing competition and

    taking advantage of lower real estate and labor costs in order for the
    government to lower its acquisition and operating costs. In 1991, GSA issued
    a temporary regulation requiring agencies to consider the availability of
    local labor pools, pay differentials for employees, local incentives
    offered, and real estate costs for prospectus- level projects 24 whose
    missions did not dictate a geographic area. However, the

    requirement was eliminated in 1997 when GSA revised its location
    regulations. GSA officials could not explain why the requirement was deleted
    when we asked them in May 2001.

    On the basis of our latest survey of 115 sites, we found that little
    consideration in the site acquisition process was given to the differing
    costs of alternative areas. Besides finding little interest in lower real
    estate costs or in the use of certain local incentives, our survey also
    found that only 15 sites were acquired using cost analyses of alternative
    geographic areas,

    which compared costs of different areas in which a site could ultimately be
    selected. However, no regulation presently calls for such an analysis.

    In 1990, we reported that GSA, as a central management agency, had not
    provided leadership to assist agencies in implementing and complying with 24
    GSA is required to prepare project descriptions called prospectuses for
    space acquisitions that are expected to exceed specified dollar thresholds,
    which can be adjusted annually. In fiscal year 2000, for example, a
    prospectus was required for any lease exceeding an average annual rent of
    $1. 93 million. The prospectuses are to be submitted to GSA?s Senate and
    House authorizing committees.

    RDA. We noted that GSA had not assisted agencies in developing procedures
    and guidelines to implement the various location policies. Therefore, we
    recommended in our 1990 report that GSA develop for

    congressional consideration a more consistent governmentwide location
    policy. In our recent survey of agency sites, we found most agencies,
    whether they obtained the sites independently or through GSA, did not use
    RDA or did not know whether it was used in choosing their sites.

    Some Functions Can On the basis of our survey of 115 federal facilities, the
    report of our

    Potentially Locate in consultant, and our interviews with high- ranking
    officials in human resources and information technology at 13 cabinet
    agencies, we were able Rural Areas

    to identify several federal functions that could be performed in rural
    areas. These included printing, archiving, accounting and finance, training,
    passport application processing, automatic data processing, research and
    development, storage, and law enforcement. Private Sector Functions

    Our consultant identified 21 functions that the private sector might locate
    That Might Locate in Rural

    in rural areas, as shown in table 7. Areas

    Table 7: Functions That Might be Located in Rural Areas Functions that might
    be located in rural areas

    Accounting Legal support Account representative Logistical support
    Appraisal/ market research Manufacturing and assembly offices Clerical/
    secretarial Operations centers Data processing Printing and publishing
    Distribution/ warehousing Records archiving Education/ training Repairs and
    servicing Enforcement and quality control Scientific studies, and research
    and development Field service operations Technical functions and support
    Human resources and social services Telemarketing, order processing, and
    communications Information technologies services

    Source: Office Location Considerations of Large U. S. Corporations: U. S.
    Government Potentials, The Dorchester Group, L. L. C., March 31, 2001.

    According to our consultant, these functions lend themselves to being
    performed in rural areas because (1) some of them do not demand the large
    and technical, sophisticated labor pool often found in urban areas; (2) some
    functions may be performed in a location remote from the principal

    office?s day- to- day operations; and (3) some support functions can be
    performed by telephone. He also emphasized that rural areas are sometimes
    suitable for functions where security is important, such as research and
    development and law enforcement activities.

    We reviewed the 21 functions to see if they were represented in the federal
    sector and whether any of the federal agencies we contacted identified them
    as being found in rural areas or potential for rural areas. Nine of the

    21 functions met these criteria. They were (1) accounting, (2) distribution
    and warehousing, (3) education and training, (4) enforcement and quality
    control, (5) printing and publishing, (6) records archiving, (7) data
    processing, (8) scientific studies and research and development, and (9)
    telemarketing/ teleservicing. Table 8 shows the potential benefits and
    challenges that would result from

    situating the function in a rural area for the nine selected functions.

    Table 8: Benefits and Challenges Associated With Rural Areas for Nine
    Functions Function Benefits Challenges

    Accounting Lower wages and operating costs Data security and quality control
    Data processing Reduced costs of office and labor Needs skills more often
    found in metropolitan areas

    Distribution and warehousing Savings on labor and real estate Needs good
    transportation links Education and training Fewer distractions and
    recreation opportunities None identified Enforcement/ quality control None
    identified Needs good regional access Printing and publishing None
    identified Needs good transportation links Records archiving Lower costs for
    real estate and wages Limited access to records Scientific studies/ research
    and Better security; in some cases, access to universities Specialized
    employees may have to be development recruited nationally

    Telemarketing, order processing, Operating cost efficiencies Sufficient and
    sustainable labor pool communications Source: Office Location Considerations
    of Large U. S. Corporations: U. S. Government Potentials. The

    Dorchester Group, L. L. C., March 31, 2001.

    Functions Performed by Some of the federal functions in our survey were more
    often located at Federal Agencies in Rural

    rural sites than at urban ones. These were automated data processing, Areas

    finance and accounting, social services, research and development, and
    storage and inventory. Special space needs and low real estate cost were key
    factors for research and development and storage sites. The survey also
    asked respondents to pick 1 or more of 12 named reasons why they had chosen
    their locations.

    Survey responses regarding research and development and storage/ inventory
    facilities that were in rural areas pointed to two factors: low real estate
    costs and unique space needs. For instance, officials representing four of
    the eight research and development sites cited their unique space needs as a
    reason for their sites? selection. Of these sites,

    three were in rural areas. Officials representing five of the eight storage/
    inventory facilities also gave this reason, and four were in rural areas.
    Similarly, all three of the research and development sites for which

    officials cited low real estate costs as a reason for their site choices
    were located in rural areas. All five of the storage and inventory sites for
    which respondents cited low real estate costs as a factor were in rural
    areas. Information from cabinet agency officials showed that functions that
    had been decentralized within the agency were more likely to be found in
    rural areas than were centralized functions. We asked these officials, who

    worked in information technology or human resources, about five functions-
    printing, training, personnel benefits administration, procurement, and
    finance/ payroll- and whether these or other functions could be relocated to
    rural areas. 25 Officials from 11 of the 13 cabinet agencies said they had
    decentralized 1 or more of the 5 functions by placing it in regional or even
    local operating units, including those in rural areas.

    For instance, USDA said its training and procurement functions were
    decentralized to local offices, which are "in a majority of rural counties.?
    The Interior Department said that, except for finance and payroll, the other
    functions were decentralized ?to the installation level,? and it has
    hundreds of rural installations. Four agencies reported that they had placed
    training in rural areas, and one, the Department of Energy, said it also had
    decentralized the procurement and personnel functions to local offices, half
    of which are in nonurban areas.

    25 Experts in government management and personnel management had identified
    these functions as functions that could be conducted in nonurban areas.

    However, if an administrative function was centralized it was more likely to
    be in an urban area. For instance, of the seven agencies that said they had
    centralized payroll, five said they located that function in cities,
    including New Orleans. The remaining two agencies placed the function in
    suburbs. The five agencies that centralized printing said they were doing it
    at an urban location- Washington, D. C. One agency that centralized its
    training and benefits administration said it had achieved economies of scale
    that it feared would be lost if any part of that centralized operation was
    relocated to a rural area. At least six agencies represented in these
    interviews identified one or more problems with rural areas. One official
    cited difficulty in recruiting minority employees because some rural areas
    tend to lack minorities. Such

    areas, this official said, also may pose sufficient cultural adjustments for
    minorities and minority employees may not wish to relocate to these areas.
    Other officials cited cost concerns. Officials for five agencies, for
    instance,

    said rural areas can involve personnel- related costs, such as the cost of
    relocating employees or of recruiting and training replacement workers.
    Officials from three agencies also expressed concern over the relatively
    higher cost of travel to rural areas, with one asserting that this made such
    areas poor choices for training sites. Three agencies also raised concerns
    about facility costs, stating that the lack of available office space in
    rural

    areas would force them to build new facilities and lose agency
    infrastructure investments at current locations. Three agency officials also
    told us that their urban operations were in those areas because of factors

    intrinsic to urban areas, such as the availability of public transportation
    and proximity to the operations of other agencies or private sector
    organizations. The full impact of telecommunications advancements in office
    location decisions is still uncertain. A widespread notion is that
    telecommunications advances have made the use of rural areas more

    viable. However, of the 11 cabinet agencies that discussed the benefits and
    drawbacks of rural telecommunications, only 2 agencies said
    telecommunications advances had made rural locations more viable. The other
    nine agencies expressed concern about telecommunications service

    in rural areas, with five saying that sophisticated telecommunications
    services are not always available or can be costly when they are available.
    Three agencies also said telecommunications is of less importance to siting
    decisions than other factors, and one of these expressed concern that rural
    telecommunications networks are inherently less secure than urban ones. On a
    positive note, five agencies saw telecommunications benefiting

    employees by, for instance, allowing benefits data and training to be
    offered on- line or by allowing employees to work from home or from the
    sites where they are conducting inspections.

    The private sector offered similar views. According to our consultant,
    although telecommunications is an increasingly important factor in location
    decisionmaking, its full impact has not become clear. Advanced

    telecommunications services are touted as leveling the playing field between
    small towns and metropolitan areas; however, broadband (highspeed)
    telecommunications facilities 26 are not available in all areas, as noted by
    our consultant. 27 He also emphasized that many small towns and rural areas
    lack the capital and infrastructure to facilitate these broadband services.

    Conclusions Since our 1990 report on this issue, federal agencies continue
    to locate for the most part in higher cost, urban areas. Eight of the 13
    cabinet agencies surveyed had no formal RDA siting policy, and there was
    little evidence that agencies considered RDA?s requirements when siting new
    federal facilities. Further, GSA has not developed for congressional
    consideration a cost- conscious, governmentwide location policy, as we
    recommended in 1990.

    In our survey, the sites that involved relocated operations still largely
    remained in urban areas, while the sites that involved newly established
    operations were more evenly spread over rural and urban areas. Federal
    agencies? mission requirements, such as the need to be near clients or other
    organizations, apparently have led them to select urban areas. Other

    26 The Federal Communications Commission defines services with a
    transmission speed of at least 200 kilobits per second (kbps) in one
    direction as ?high speed.? A broadband connection, such as that provided by
    a cable modem service or by a telephone technology, known as digital
    subscriber line (DSL), has a greater capacity, giving the user faster data
    transmission rates than a narrowband connection, such as that provided by a
    conventional telephone line.

    27 We also reported in February 2001 that the availability of broadband
    technology was more prevalent in large metropolitan areas than in rural
    areas, on the basis of a survey of Internet users who were age 18 and older.
    For example, in a metropolitan area with a population of at least 2. 5
    million, more than 32 percent (plus or minus 8 percent) of the survey
    respondents reported having DSL and cable modem capability where they lived;
    in rural areas, the corresponding figure was less than 8 percent (plus or
    minus 6 percent). Telecommunications: Characteristics and Choices of
    Internet Users, (GAO- 01- 345, Feb. 16, 2001).

    factors that led them to select urban areas are the availability of public
    transportation and particular space needs. A major factor that influences
    private sector site selection for urban areas was the availability and cost
    of skilled labor. Other private sector factors included real estate cost,
    access

    to transportation, and business incentives. In choosing the geographic area
    for a facility, the private sector more often cites cost considerations and
    incentives offered by states and local areas than did the federal agencies
    in our survey.

    Several government functions, such as research and development, data
    processing, accounting and finance, and teleservice centers, can be located
    in rural areas. Although it is not clear from the information we collected

    whether any of the federal agencies that located sites in urban areas could
    have located them in rural areas, one matter that is clear is that RDA has
    not had the influence on federal siting practices that the Congress appears
    to have intended when RDA was enacted. Many agencies had no RDA policy, as
    required by the act, and many agency personnel in our survey either did not
    consider RDA or did not know whether the act was used in making their site
    selection decisions. If agencies had RDA policies and

    agency personnel were aware of and considered them, certain constraints
    would still exist that impede efforts to locate in rural areas, such as
    inadequate infrastructure for high- speed telecommunications, limited

    public transportation, and a limited labor force. In the future, some of
    these constraints may be mitigated for a number of rural areas, but for the
    federal government to cost effectively consider rural as well as urban
    areas, we believe the following must occur:

     The government needs to have a cohesive, governmentwide site location
    policy that considers costs to the government as well as the goal of
    enhancing the socioeconomic status of urban areas and rural areas. We do not
    believe that the public policy objectives of assisting either urban or rural
    areas in a way that will allow agencies to fully and effectively

    achieve their missions preclude agencies from considering other factors such
    as the availability and cost of labor, real estate costs, operational costs,
    and certain local incentives. In fact, a more cost- conscious

    federal siting policy may even increase agencies? consideration of rural
    areas, since rural areas may have lower overall costs. However, we also
    recognize that in making siting decisions, the agency?s ability to achieve
    its mission can be a more important consideration than costs.

     Federal agencies need to have clearly stated and documented policies on
    site location that conform to governmentwide policy, including RDA;

    and GSA and other agencies need to document their consideration of RDA to
    ensure consistent policy application. As a central management agency, GSA
    could require any agency subject to its authority to do this.  Federal
    agencies need one, clear definition of ?rural area? for the

    purposes of implementing facility siting under RDA. Matters for

    We suggest that Congress consider (1) enacting legislation to require
    Congressional agencies to consider, along with their missions and program
    requirements, real estate, labor, and other operational costs and applicable
    local Consideration

    incentives when deciding whether to relocate or establish a new a site in a
    rural area or urban area, and (2) amending RDA to clarify the definition of
    ?rural area? for facility siting purposes to facilitate its implementation.

    Recommendations for We recommend that the Administrator of GSA, in GSA?s
    role as the federal Executive Action

    government?s central property management agency, revise its guidance on
    federal facility siting to (1) advise customer agencies that they should
    consider, along with their missions and program requirements, real estate,
    labor, and other operational costs and applicable local incentives when
    deciding whether to relocate or establish a new site in a rural or urban
    area; (2) require that each federal agency subject to GSA?s authority
    provide a written statement to GSA demonstrating that, in selecting a new
    facility location, the agency, as required by RDA, had given first priority
    to locating in a rural area, and if a rural area was not selected, the
    agency?s justification for the decision; and (3) define the term ?rural
    area? to provide its customer agencies with a single definition for purposes
    of federal siting under RDA, until the Congress amends RDA to define the
    term.

    Agency Comments and We provided copies of a draft of this report for comment
    to the heads of 21

    federal agencies. 28 The agencies included both the agencies in our survey
    Our Evaluation and departmental agencies from which we obtained additional
    site location information. We received written comments from 14 of the
    agencies and oral comments from 7 of the agencies.

    28 The 21 agencies include the Department of Education and all of the
    departmental agencies and independent agencies listed in appendix II.

    Seventeen of the agencies responded that they either had no comments on the
    draft report, agreed with the information in the report, or suggested
    technical changes, which we considered and incorporated within this report
    where appropriate. The remaining four agencies provided more extensive
    comments, which are discussed below. The GSA Administrator provided written
    comments dated July 16, 2001, which are reprinted in appendix VII. The
    Administrator stated that references in our report to GSA as the
    government?s central real property management agency were somewhat
    misleading, since GSA administers

    only about 10 percent of the total federal real property inventory and,
    therefore, GSA has no authority to establish governmentwide policy. However,
    we note that GSA?s mission statement identifies it as one of three

    central management agencies in the federal government. According to GSA, its
    inventory includes 40 percent of all federal office space, which is occupied
    by 1 million civilian federal employees, approximately half of the total
    federal civilian workforce. Thus, GSA?s policies would affect almost half of
    the federal government?s civilian office space, the type of space that was
    included in our survey. We agreed with the Administrator?s statement in his
    comments that agencies acquiring property independently of GSA are not
    subject to GSA

    regulations, and we have revised this report accordingly. The Administrator
    also said that our 1990 report, which we referred to in our draft report,
    called for GSA to develop a governmentwide location policy, and he added
    that GSA could not have done so since it lacked the authority. Our 1990
    report did not call on GSA to develop this policy under its authority, but
    instead recommended that GSA propose a policy to Congress as a matter for
    consideration. The Administrator also said GSA had no mechanism for
    implementing a governmentwide leadership role in 1990, while that might be
    possible now through its Office of Governmentwide Policy. As previously
    mentioned, we recommended in

    1990 that GSA develop such a policy for congressional consideration. The
    Administrator also said our draft report implied that GSA selected the
    geographic area for agencies? site acquisitions. We did not intend that
    implication, and we have revised this report to clarify that issue.

    In addition, the Administrator pointed to GSA?s efforts to make its customer
    agencies aware of RDA requirements. In our report, we noted GSA?s
    regulations require RDA compliance by customer agencies. Nonetheless,

    RDA was not often used in the site acquisitions we surveyed, and some
    agencies said they were not aware of RDA requirements.

    The Administrator also responded to our recommendation that GSA require
    written statements from each customer agency demonstrating that the agency
    had given first priority to locating in a rural area and, if a rural area
    was not selected, the agency also include a justification for the

    decision to GSA. He agreed to require a written statement from customer
    agencies regarding use of RDA in site acquisitions. However, he did not
    agree to asking for a justification because he said this would put GSA into
    the position of second- guessing the agencies because he believes that the

    agencies have authority to decide where to locate their facilities. While we
    agree with GSA on the latter point, we remain convinced that a justification
    is needed to help document that agencies gave first priority to rural areas
    when they did not choose a rural area. We are not recommending that GSA be
    required to evaluate these justifications.

    The Administrator also responded to our recommendation that GSA define
    ?rural area? to provide agencies with a single definition for the purpose of
    federal siting under RDA until the Congress amends RDA to define the term.
    He said GSA will develop a definition for use by its customer agencies, but
    it has no authority to establish a definition for all federal agencies. We
    clarified our report to reflect GSA?s authority to develop a definition only
    for its customers. GSA did agree, however, to issue a bulletin to make other
    agencies aware of this definition. We believe that GSA?s definition should
    be useful to other agencies until Congress amends

    RDA to set forth a statutory definition. We also received written comments
    from the Department of the Interior?s Acting Assistant Secretary of Policy,
    Management and Budget dated July 3, 2001, which are reprinted in appendix
    VIII. The Acting Assistant Secretary responded that the agency generally
    agreed with the findings and agreed in part with the matters for
    congressional consideration and the

    recommendations for executive action. Our report suggested that Congress
    consider enacting legislation to require agencies to consider certain costs
    along with agency mission when deciding whether to locate a site in a rural
    or urban area. He responded that our suggestion should be limited to the
    establishment of new offices because agencies have different considerations,
    for example, relocation costs, when expanding operations

    at an existing location, as compared to establishing a new office. We did
    not intend our recommendation to apply to situations in which an agency
    expands an operation at an existing site that does not involve a relocation

    or establishment of a new site. We clarified our recommendation in this
    regard. The Acting Assistant Secretary also commented that our
    recommendation that GSA require customer agencies to provide a written
    statement to GSA demonstrating that the agency had given first priority to a
    rural area should (1) be required only if the agency does not select a rural
    area, (2) be limited to a minimum dollar threshold that would exempt certain
    locations from the documentation requirement, and (3) exempt operations that
    are being expanded in the same local area. Our recommendation, as noted in
    the

    draft report, states that all site decisions should include a written
    statement to GSA and a justification only should be provided if a rural area
    was not selected. Although we agree that the establishment of a minimum
    dollar threshold may be reasonable conceptually, we note that RDA does not

    include a dollar threshold for application of the act?s requirements. We
    also believe that expansions of existing operations should be subject to
    this requirement if they might involve a relocation.

    The two Department of the Treasury components in our survey also provided
    written comments. We received comments from IRS? Director of the Office of
    Real Estate and Facilities Management dated June 26, 2001. IRS?s comments on
    this report covered four areas: (1) the use of RDA, (2) compliance with RDA
    requirements, (3) agencies? ability to consider costs when selecting new
    sites, and (4) technical considerations.

    With respect to the first point- use of RDA, IRS said that  the RDA?s
    encouragement of locating in rural areas needs to be balanced against other
    legal requirements that sometimes contradict RDA requirements, such as those
    of CICA, and OMB and congressional budget requirements and limitations, and
    short- term and long- term cost considerations;

     a ?rural area? should be defined in a way that achieves the intent of the
    RDA and be based on terms other than population alone; and  if Congress
    supports a location policy that is economically rather than

    socially based, then Congress should repeal RDA and replace it with
    legislation that would require agencies to meet specific threshold terms
    specified in the legislation. We agree that agencies need to consider a
    variety of legal requirements when selecting a new site for their facilities
    as well as costs. However, the statutory requirement imposed by RDA must be
    given priority. We also

    believe that if Congress defines ?rural area? for purposes of RDA, it may
    want to consider factors in addition to population. By stating in our report
    that cost factors should be considered in the location process, we are not
    suggesting that Congress enact a location policy based solely on economics.
    Rather we are saying that cost should be one of the factors considered in
    the decisionmaking process.

    With respect to its second point, on compliance, IRS said that agencies
    selecting their own sites without GSA assistance are to be held directly
    accountable for compliance with RDA and, therefore, GSA should not be
    required to evaluate or enforce compliance with the RDA. Additionally, IRS
    said that if an agency is using GSA to acquire a site, a simple statement
    that the agency considered the RDA should be sufficient. We recommended that
    GSA require a written statement only for federal agencies subject to its

    authority. We are not recommending that GSA enforce compliance with RDA for
    agencies that have and use their own authority to acquire space. In those
    cases where GSA acquires space for other agencies, we believe that providing
    GSA with a justification for a site selection that includes the reasons for
    not choosing a rural area under the RDA will help document that the agency
    gave consideration to RDA.

    Regarding IRS?s third point, IRS said that, in considering costs, most
    agencies have no means to assess project costs, such as real estate or labor
    costs, across geographic areas. The agency added that market data on rural
    areas are not readily available or readily accessible to compare them with
    alternative geographic areas. We believe that GSA and OPM can provide much
    of the information needed to do cost analyses. Furthermore, private sector
    companies are able to make such analyses and gain access to them. Finally,
    several agencies in our survey said their site selection process included
    cost analyses of alternative geographic areas as well as cost analysis of
    sites within a geographic area.

    Regarding IRS?s fourth point, its technical comments, IRS thought we should
    make distinctions between leased occupancies and new federal construction
    because of the greater time commitment for continued occupancy in new
    construction. We do not agree with IRS on this point. RDA does not
    distinguish between leased and owned space, and in our

    view, it is as important to consider costs and other factors regardless of
    whether space is leased or owned, particularly considering that many leases
    are for long time periods.

    On July 3, 2001, we received written comments from the U. S. Customs?
    Director, Office of Planning, which are reprinted in appendix IX. The
    Director responded that Customs concurred with the report?s recommendation
    to GSA to revise its guidance on federal facilities and stated that
    information in the report about Customs? facility acquisition process and
    factors used by Customs to select the sites in our survey was correct. He
    also stated that when Customs acquires property under its

    existing statutory authority, it utilizes the same process as GSA; and,
    although not mentioned in our draft report, Customs applies GSA?s basic
    policy to house agencies in existing federally owned and leased space before
    acquiring additional space. The Director of Planning also stated that many
    of Customs? facilities are unique because the operation requires proximity
    to the border, an airport, or a seaport, and difficulties sometimes

    arise in complying with RDA and the pertinent executive orders because many
    of the land border crossings, airports, and seaports are not located in the
    central business area of either a rural area or an urban area. We agree

    and acknowledged in this report that agency mission requirements primarily
    dictated the location of the sites in our survey.

    As agreed with your office, unless you publicly announce its contents
    earlier, we plan no further distribution of this report until 21 days after
    its issue date. At that time, we will send copies of this report to the
    Chairman and Ranking Minority Member, Senate Committee on Governmental
    Affairs; the Chairman and Ranking Minority Member, House Committee on
    Government Reform; the Chairman and Ranking Minority Member, Senate
    Committee on Environment and Public Works; the Chairman and Ranking Minority
    Member, House Committee on Transportation and Infrastructure; the Chairman
    and Ranking Minority Member, Senate Committee on Agriculture, Nutrition and
    Forestry; the Chairman and Ranking Minority Member, House Committee on
    Agriculture; the House and Senate Appropriations Committees; Representative
    Ernest J. Istook; the Director of the Office of Management and Budget; and
    the Administrator of GSA. We will also make copies available to others upon
    request.

    If you have any questions about this report, please call me on (202)
    5128387. Key contributors to this report are acknowledged in appendix X.

    Sincerely yours, Bernard L. Ungar Director, Physical Infrastructure Issues

    Appendi Appendi xes x I

    Objectives, Scope, and Methodology Objectives Our objectives were to
    determine (1) what executive branch civilian nonDepartment of Defense (DOD)
    functions have recently selected urban locations other than Washington, D.
    C., and the federal cities, 1 compared to rural locations; and what factors,
    benefits, and problems were associated with such site selections; (2) what
    federal laws and policies govern facility location and to what extent have
    agencies implemented this guidance; (3) what lessons can be learned from
    private sector site selections; and (4) what functions lend themselves to
    being located in rural areas.

    Scope and To address the first objective, we looked at (1) sites selected by
    the General Methodology Services Administration (GSA), the government agency
    that has authority

    to acquire space on behalf of executive branch agencies and (2) sites
    selected by executive branch agencies using their independent statutory
    authority. We chose to look at sites acquired independently of GSA to

    determine whether agencies, when acting independently, engaged in practices
    that were different from those of agencies that used GSA for their
    acquisitions. We looked at those sites that were acquired from fiscal years
    1998 to 2000. In establishing an appropriate site size to study, we wanted
    to choose sites that were large enough to have some economic impact on the

    community in which they were located, that were sufficient in number to
    provide useful information, and for which sufficient information was
    available.

    Accordingly, we decided to consider only those sites with space of 25,000
    square feet or more. 2 Regarding manageability, GSA advised us that spaces
    of this size were small enough that they would be found on GSA?s inventory
    in all of its 11 regions. Concerning economic impact, GSA advised us that 1
    Prior to 1995, the Office of Management and Budget (OMB) established in
    Circular A- 105

    the following 10 cities as the standard federal cities for federal regional
    headquarters: Atlanta, Boston, Chicago, Dallas, Denver, Kansas City, New
    York, Philadelphia, San Francisco, and Seattle. On June 8, 1995, OMB
    rescinded the Circular stating that the way the

    federal government manages resources, agency efforts to reduce duplicative
    levels of oversight, and the expanded use of technology make a strict
    regional structure inefficient and unnecessary. 2 At sites involving
    multitenant federal office buildings, we did not aggregate the holdings of
    any one agency. For instance, if an agency such as the Department of Justice
    had entities, such as Drug Enforcement Administration and Immigration and
    Naturalization Service, that each occupied less than 25, 000 square feet at
    that site, the individual entities' holdings were not combined. We recognize
    that each entity within an agency can have a unique mission that affects its
    location decision.

    spaces of 25, 000 square feet or more would tend to be associated with a
    relatively larger number of employees than spaces of less than 25, 000
    square feet and would consequently have a greater economic impact. 3
    Finally, in considering the availability of information, we discovered that
    if a space has 25,000 or more square feet, the agency requesting that site
    can

    officially appeal any GSA revision of the delineated area in which that
    agency wishes to search for a site. As a result, we thought the appeals
    process would make information on such sites more readily available. 4 We
    selected fiscal years 1998 through 2000 to obtain the most recent complete
    data available. As agreed with your office, we excluded Washington, D. C.,
    and the 10 agency regional cities because of your request to see site
    acquisitions made outside of those cities.

    We focused exclusively on new sites, rather than locations where leases had
    been renewed. In addition, we excluded spaces acquired by the judicial and
    legislative branches of the federal government because these branches are
    not subject to the Rural Development Act (RDA), which is applicable to
    executive departments and agencies. We also excluded sites acquired by DOD
    because DOD informed us that it has so much vacant space available at its
    bases nationally that it has no choice but to consider its existing vacant
    space when locating new or existing operations. We excluded the sites
    acquired by the United States Postal Service (USPS) because USPS advised us
    that it had little or no discretion in deciding

    where to locate most of its facilities, in that they needed to be in
    specific locations to serve customers or near airports. In addition, the
    Postal Reorganization Act of 1970 exempts USPS from federal laws relating to
    contracts and property. Further, USPS has authority to acquire space

    independently of GSA. 3 By using a threshold of 25, 000 square feet, we
    started with 166 sites that were acquired by federal agencies with the
    assistance of GSA in fiscal years 1998 through 2000. If we had used a
    threshold of 10, 000 square feet, we would have initially considered 430
    sites. The inclusion of sites under a smaller threshold size may have led to
    more rural sites being included in our survey, but the acquisitions of
    smaller sites probably would have been less important for considerations of
    economic impact.

    4 Our results are not generalized to sites with space of less than 25, 000
    square feet. The type of functions and reasons for locating in rural areas
    might be different if we had included sites of less than 25, 000 square
    feet.

    Identifying Sites Recently GSA provided us with a list of 166 sites it had
    recently acquired for

    Acquired Through GSA and agencies. After excluding sites on the basis of the
    previously discussed

    Independently of GSA criteria, the total number of GSA- acquired qualifying
    sites was reduced to

    81, representing 29 agencies. We did not independently verify the
    completeness or accuracy of the site data provided by GSA. GSA also provided
    us with a list of 52 agencies, including cabinet

    departments and their components, that have some level of statutory
    authority to acquire space independently of GSA. After excluding agencies
    from the list on the basis of the previously discussed criteria, we reduced
    the total number of agencies to 33. We subsequently contacted the 33

    agencies, asking each whether it had, independently of GSA, used its
    statutory authority to acquire, during fiscal years 1998 through 2000, sites
    that met our criteria. 5 All 33 agencies responded, and 12 agencies
    identified 37 sites 6 meeting these criteria. Of the 12 agencies, 5 were not
    among the 29 agencies represented by the 81 sites GSA helped agencies to
    acquire. Therefore, our total universe was 118 sites (81+ 37) represented by
    34 agencies (29+ 5). Using a 28- question, mail- out survey form, 7 we
    surveyed agency officials at the 118 sites. As of May 3, 2001, we had
    received responses for 115 of the 118 sites, for a response rate of 97. 5
    percent.

    The practical difficulties of conducting any survey may introduce errors,
    commonly referred to as nonsampling errors. For example, differences in how
    a particular question is interpreted by the survey respondents could
    introduce unwanted variability in the survey's results. We took steps in the
    development of the questionnaire, the data collection, and the data editing
    and analysis to minimize nonsampling errors. These steps included pretesting
    the questionnaire with officials of the Department of Veterans Affairs and
    the National Institutes of Health, prompting potential respondents in order
    to increase our survey's response rate, and editing the questionnaires for
    completeness and accuracy.

    5 See appendix V for a list of agencies that have independent site
    authority. 6 GSA does not track sites acquired by agencies independently of
    GSA. We therefore relied upon officials at each agency that acquired sites
    using their independent authority to report that all sites meeting our
    criteria have been included. We did not independently verify the

    completeness or accuracy of the site data provided by agencies with
    independent authority to acquire space.

    7 See survey form in appendix VI.

    Identifying Sites in Rural To determine whether any of the sites were in
    rural areas, we reviewed Areas- Defining ?Rural? RDA to obtain a definition
    for rural. However, RDA?s definition for rural

    was unclear, and we found application of it would be impractical. For the
    purpose of locating federal facilities, RDA states that rural areas shall be
    defined as those areas identified by the private business enterprise
    exception in 7 U. S. C. sect. 1926( a)( 7). Prior to 1996, the private business
    enterprise exception in 7 U. S. C. sect. 1926( a)( 7) defined rural areas as
    including all territory of a state that is not within the outer boundary of
    any

    city having a population of 50,000 or more and its immediately adjacent
    urbanized and urbanizing areas with a population density of more than 100
    persons per square mile, as determined by the Secretary of Agriculture,
    according to the latest decennial census of the United States. In 1996, 7 U.
    S. C. sect. 1926( a)( 7) was amended and no longer includes the private business
    enterprise exception. Therefore, the appropriate definition of rural area
    under RDA is unclear. Furthermore, we identified two problems with the pre-
    1996 definition. First, determining the population density for communities
    adjacent to these federal sites was not feasible within the scope of this
    job. Second, the term ?outer boundary? in this definition lacks specificity.

    The current definition of rural in 7 U. S. C. sect. 1926( a)( 7) is for purposes
    of water and waste disposal grants and loans and defines rural as a city,
    town, or unincorporated area that has a population of no more than 10,000
    inhabitants. We are not certain that this is the appropriate definition
    since it refers to water and sewer grants and not the private business
    enterprise exception. The prior threshold, which was eliminated in 1996,
    used a

    population threshold of 50,000 and included a population density
    requirement. Population density data were not readily available; therefore,
    it was not feasible for us to use this definition. 8 For this survey, we
    chose a threshold of 25,000 or less because it was used

    to define rural areas by several other federal agencies and private sector
    organizations that we identified. When we applied this population

    8 The information on population density for areas outside of cities was not
    readily available and is subject to change, pending the results of the 2000
    census. Additionally, when the U. S. Department of Agriculture needs to
    determine whether a city that has applied for a grant is rural or not, and
    may have a population of close to 50, 000, it has experts who survey the
    population density of the city's surrounding area to determine whether the
    density meets the criteria for rural area. We did not use 50, 000 as a
    population threshold because many of the definitions of rural used by other
    federal agencies and private sector organizations we identified used
    thresholds of 25, 000 or less.

    threshold of 25, 000 to the sites on the list of 81 GSA- acquired federal
    sites, we determined that 23 were located in rural communities; and of the
    37 sites that agencies acquired independently of GSA, 9 were located in
    rural communities. Thus, our survey included a total of 32 rural sites. 9 We
    note that 26 of the ?rural? sites in our survey that fall within the 25, 000
    population threshold were actually located in metropolitan statistical areas

    in which large cities are located. Determining Laws,

    To address the second objective, which concerned federal laws and
    Regulations, and Policy That policies that affect the selection of sites, we
    reviewed federal laws, Affect Site Selections

    executive orders, and policies that relate to the location of federal
    facilities. We also conducted interviews with officials of GSA?s Office of
    Governmentwide Policy, the chief realty officers of 13 of the 14 cabinet
    agencies, 10 and an Office of Personnel Management official on federal
    employee compensation and relocation benefits. Furthermore, we asked survey
    respondents to identify whether they had applied the relevant laws and
    policies when making a site acquisition. We also examined GSA lease files
    created between 1989 and 2000 in three GSA regions- the Rocky Mountain
    Region in Denver, CO; the Greater Southwest Region in Ft. Worth, TX; and the
    Mid- Atlantic Region in Philadelphia, PA- where we were already conducting
    an examination of GSA files for another assignment. We examined the files
    for documentation regarding application of RDA. However, we did not attempt
    to verify whether GSA or other agencies were in compliance with RDA.

    Private Sector Lessons for To address our third objective, we contracted
    with a private sector the Public Sector

    consultant 11 to (1) perform a literature search, interview experts in
    corporate real estate consulting, and survey corporations that had made
    recent site selection decisions; (2) determine the factors and criteria the
    private sector uses to select urban, suburban, or rural office locations;
    (3) 9 See appendix III for a listing of the 32 rural sites.

    10 As previously mentioned, DOD was not included in our review because DOD
    informed us that because of the amount of vacant space at its bases, it
    generally considers its existing vacant space when locating new operations.
    11 John D. Dorchester, Jr., of The Dorchester Group, L. L. C. His report was
    entitled Office Location Considerations of Large Corporations: U. S.
    Government Potentials, March 31, 2001.

    identify types of office functions (such as claims processing) that lend
    themselves to being performed in more rural areas; (4) identify, to the
    extent possible, similar federal functions; and (5) identify and explain how
    technological advances in the last decade have reduced the disadvantages
    previously associated with rural areas and what impact U. S. economic
    changes have had on facility location decisions.

    Our consultant reviewed relevant professional literature, surveyed a
    judgmental sample of private sector firms, and analyzed selected economic
    data for indicators of private sector location practices. Our consultant's
    results are not statistically representative of private sector locations
    practices because of the following factors: (1) a judgmental sample rather

    than a random sample was used, (2) 17 percent of those surveyed responded,
    and (3) no evidence was provided that those who responded were distributed
    proportionately across industry- type and geographic region to the
    proportions corresponding to these factors in the population of the 1,000
    largest U. S. companies. Our consultant also did not empirically determine
    whether the same factors that influence private sector location

    decisions are applicable to location decisions of federal facilities.
    Information obtained from our consultant was still very useful for our
    review because the information included data from both survey respondents
    and an extensive literature search on factors involved in corporate location
    decisions. Also, although our consultant's study included various types of
    companies, the study's focus was on the location of offices of those
    companies. Offices in the consultant's survey performed such functions as
    professional services, management, computing, secretarial, clerical, and
    administrative, functions that are similar to government functions.

    Identifying Functions That To accomplish the fourth objective, which
    concerned the potential of

    May Relocate certain federal functions to relocate to rural areas, we used
    the agency survey described above and interviewed officials at 13 of the 14
    cabinet agencies about the location of functions- such as printing,
    personnel benefits administration, and procurement- that are often conducted
    on an

    agencywide basis. Experts in government management and personnel management
    had identified such functions as those that could be conducted in nonurban
    areas. At these agencies, we contacted the chief technology and human
    resources officials to inquire whether each of these agencywide functions
    was being conducted in an urban or a nonurban area

    and why. These officials were also asked to report the impact of

    telecommunications technology on the location of these agency functions and
    whether technology had made rural areas more viable as site locations. We
    also reviewed several of our reports, which provided background information
    on all four of our objectives. 12 We did our review between August 2000 and
    May 2001 in Washington, D. C.,

    and in the cities of Philadelphia, PA; Denver, CO; and Fort Worth, TX,
    cities where we were already conducting an examination of GSA files for
    another assignment. Our review was conducted in accordance with generally
    accepted government auditing standards.

    12 Facilities Location Policy: GSA Should Propose a More Consistent and
    Businesslike Approach (GAO/ GGD- 90- 109, Sept. 28, 1990); Federal Statutes
    and Executive Orders Applicable to Public Buildings Service's Leasing
    Program (GAO/ GGD- 00- 27R, Oct. 18, 1999); and Facility Relocation: NRC
    Based Its Decision to Move Its Technical Training Center on Perceived
    Benefits-- Not Costs (GAO/ GGD- 01- 54, Oct. 19, 2000).

    List of Surveyed Federal Agencies That

    Appendi x II

    Recently Selected Site Locations Agencies that recently selected site
    locations Department of Agriculture:

    Animal and Plant Health Inspection Service Natural Resources Conservation
    Service Forest Service

    Department of Commerce

    Bureau of the Census National Oceanic and Atmospheric Administration

    Department of Energy Department of Health and Human Services

    Centers for Disease Control and Prevention National Institutes of Health
    Agency for Health Care Research and Quality

    Department of Housing and Urban Development Department of the Interior

    National Park Service Bureau of Reclamation

    Department of Justice

    U. S. Attorney Bureau of Prisons Drug Enforcement Administration Federal
    Bureau of Investigation Immigration and Naturalization Service U. S.
    Marshals Service

    Department of Labor Department of State Department of Transportation

    U. S. Coast Guard Federal Aviation Administration

    Department of the Treasury

    U. S. Customs Service Internal Revenue Service

    Department of Veterans Affairs Environmental Protection Agency Equal
    Employment Opportunity Commission Federal Emergency Management Agency

    Agencies that recently selected site locations General Services
    Administration National Aeronautics and Space Administration Smithsonian
    Institution a Social Security Administration

    a The Smithsonian Institution is an independent trust instrumentality of the
    United States. Source: Survey data.

    Location of the 32 Rural Sites (Areas With

    Appendi x I II

    Populations of 25,000 or Less) in Our Survey City/ town State Name of MSA a

    Beckley WV (Not in MSA) Cape Canaveral FL Melbourne- Titusville- Palm Bay
    Capitol Heights MD Washington, D. C. Chamblee GA Atlanta Clarksburg WV (Not
    in MSA) Clarksville IN Louisville Decatur b GA Atlanta Eagle Pass TX (Not in
    MSA) Fairfax VA Washington, D. C. Ft. Meade (Odenton) MD Baltimore Greenbelt
    MD Washington, D. C. Herndon VA Washington, D. C. Jeffersonville c IN
    Louisville Key West FL (Not in MSA) Lanham MD Washington, D. C. Martinsburg
    WV Washington, D. C. Mineola NY Naussau- Suffolk Newtown Square PA
    Philadelphia Norcross GA Atlanta Opa- Locka FL Miami Oxford MS( (Not in MSA)
    Peachtree City GA Atlanta Pomona NJ Atlantic- Cape May New Port Richey FL
    Tampa- St. Petersburg Quantico VA Washington, D. C. Springfield VA
    Washington, D. C. Williamsburg KY (Not in MSA) Williston VT Burlington
    Wilmington MA Boston

    Total locations- 32

    Note: Twenty six of the 32 rural sites (located in areas with populations of
    25, 000 or less) were actually located in metropolitan statistical areas
    (MSA), in which large cities are located. a MSA is an area having 1 or more
    counties containing a city of 50,000 or more or a Census Bureau

    defined urbanized area and a total population of at least 100,000 (or 75,000
    in New England). b Two sites were located in Decatur, GA.

    c Three sites were located in Jeffersonville, IN. Source: Survey data and
    the Bureau of the Census.

    Location Factors Considered by Private

    Appendi x V I Sector Organizations Categories of overall factors and factors
    within the categories Overall category of factors Factors within overall
    categories

    Workforce issues Availability: skilled and unskilled labor Costs Worker/
    technical training Productivity Retention considerations Recruitment
    possibilities Quality of life Transportation and utilities Transportation

    Highway accessibility Proximity to a major airport Water and port
    accessibility Energy availability and cost Electricity availability and cost

    Water availability Adequacy of sewage facilities Technology Infrastructure
    for business

    Infrastructure for residential use State and local incentives Tax abatements

    Educational incentives Others Business climate Responsiveness

    Permitting Attitudes toward growth and business Environmental considerations
    Tax policy Costs Operations

    Occupancy Construction Land Room for expansion Proximity to markets/
    suppliers/ raw materials/ competitors Consistency with corporate Image

    Source: Office Location Considerations of Large U. S. Corporations: U. S.
    Government Potentials, The Dorchester Group, L. L. C., March 31, 2001.

    Federal Executive Branch Agencies With Some Level of Independent Authority
    to

    Appendi x V

    Acquire Real Property, Calendar Year 2000 As table 9 shows, some agencies
    have been provided independent statutory authority to acquire real estate,
    and some agencies have broad authority. For example, the Tennessee Valley
    Authority is authorized to purchase or lease real estate property that it
    deems necessary or convenient in transacting its business; 1 and the
    Securities and Exchange Commission is authorized to enter into real property
    leases for office, meeting, storage,

    and other space as is necessary to carry out its functions. 2 Other
    agencies' statutory authority to acquire space is for more limited purposes.
    For example, the Secretary of the Interior is authorized to lease buildings
    and associated property for use as part of the National Park System, 3 while
    the Secretary of the Treasury is authorized to lease space for the storage
    of unclaimed or other imported merchandise that the government is required
    to store. 4

    Table 9: Executive Branch Agencies With Some Level of Independent Authority
    to Acquire Real Property

    Executive branch agencies with some level of authority to acquire real
    property

    Agency for International Development American Battle Monuments Commission
    Appalachian Regional Commission Bonneville Power Administration Central
    Intelligence Agency Department of Agriculture Department of Commerce
    Department of Defense Department of Education Department of Energy
    Department of Health and Human Services Department of Housing and Urban
    Development Department of the Interior

    1 16 U. S. C. sect. 831c. 2 15 U. S. C. sect. 78d. 3 16 U. S. C. sect. 1a- 2. 4 19 U. S.
    C. sect. 1560.

    Executive branch agencies with some level of authority to acquire real
    property

    Department of Justice Department of Labor Department of State Department of
    Transportation Department of the Treasury Department of Veterans Affairs
    Environmental Protection Agency Federal Emergency Management Agency General
    Services Administration National Aeronautics and Space Administration
    National Archives and Records Administration National Science Foundation
    National Transportation Safety Board Panama Canal Commission Pennsylvania
    Avenue Development Corporation Securities and Exchange Commission
    Smithsonian Institution a Tennessee Valley Authority Broadcasting Board of
    Governors U. S. Parole Commission U. S. Postal Service U. S. Sentencing
    Commission U. S. Trade Representative a The Smithsonian Institution is an
    independent trust instrumentality of the United States.

    Source: GSA.

    Appendi x VI Survey of Federal Facilities? Locations

    Comments From the General Services

    Appendi x VII Administration

    Comments From the Department of the

    Appendi x VI II Interior

    Appendi x IX Comments From the U. S. Customs Service

    Appendi x X

    GAO Contacts and Staff Acknowledgments GAO Contacts Bernard Ungar (202) 512-
    8387 John Baldwin (202) 512- 8387 Acknowledgments In addition to those named
    above Alan Belkin, Lucy Hall, Brandon Haller,

    Stuart Kaufman, Thomas Keightley, Gary Lawson, Susan Michal- Smith, Edward
    Warner, and Greg Wilmoth all made key contributions to this report.

    (240420) Lett er

    Ordering Information The first copy of each GAO report is free. Additional
    copies of reports are $2 each. A check or money order should be made out to

    the Superintendent of Documents. VISA and MasterCard credit cards are
    accepted, also. Orders for 100 or more copies to be mailed to a single
    address are discounted 25 percent.

    Orders by mail: U. S. General Accounting Office P. O. Box 37050 Washington,
    DC 20013

    Orders by visiting: Room 1100 700 4th St. NW (corner of 4th and G Sts. NW)
    U. S. General Accounting Office Washington, DC

    Orders by phone: (202) 512- 6000 fax: (202) 512- 6061 TDD (202) 512- 2537

    Each day, GAO issues a list of newly available reports and testimony. To
    receive facsimile copies of the daily list or any list from the past 30
    days, please call (202) 512- 6000 using a touchtone

    phone. A recorded menu will provide information on how to obtain these
    lists.

    Orders by Internet: For information on how to access GAO reports on the
    Internet, send an e- mail message with ?info? in the body to:

    info@ www. gao. gov or visit GAO?s World Wide Web home page at: http:// www.
    gao. gov

    To Report Fraud, Contact one:

    Waste, or Abuse in  Web site: http:// www. gao. gov/ fraudnet/ fraudnet.
    htm

    Federal Programs

     e- mail: fraudnet@ gao. gov  1- 800- 424- 5454 (automated answering
    system)

    GAO United States General Accounting Office

    Page 1 GAO- 01- 805 Facilities Location

    Contents

    Contents Page 2 GAO- 01- 805 Facilities Location

    Page 3 GAO- 01- 805 Facilities Location United States General Accounting
    Office

    Washington, D. C. 20548 Page 3 GAO- 01- 805 Facilities Location

    Page 4 GAO- 01- 805 Facilities Location

    Page 5 GAO- 01- 805 Facilities Location

    Page 6 GAO- 01- 805 Facilities Location

    Page 7 GAO- 01- 805 Facilities Location

    Page 8 GAO- 01- 805 Facilities Location

    Page 9 GAO- 01- 805 Facilities Location

    Page 10 GAO- 01- 805 Facilities Location

    Page 11 GAO- 01- 805 Facilities Location

    Page 12 GAO- 01- 805 Facilities Location

    Page 13 GAO- 01- 805 Facilities Location

    Page 14 GAO- 01- 805 Facilities Location

    Page 15 GAO- 01- 805 Facilities Location

    Page 16 GAO- 01- 805 Facilities Location

    Page 17 GAO- 01- 805 Facilities Location

    Page 18 GAO- 01- 805 Facilities Location

    Page 19 GAO- 01- 805 Facilities Location

    Page 20 GAO- 01- 805 Facilities Location

    Page 21 GAO- 01- 805 Facilities Location

    Page 22 GAO- 01- 805 Facilities Location

    Page 23 GAO- 01- 805 Facilities Location

    Page 24 GAO- 01- 805 Facilities Location

    Page 25 GAO- 01- 805 Facilities Location

    Page 26 GAO- 01- 805 Facilities Location

    Page 27 GAO- 01- 805 Facilities Location

    Page 28 GAO- 01- 805 Facilities Location

    Page 29 GAO- 01- 805 Facilities Location

    Page 30 GAO- 01- 805 Facilities Location

    Page 31 GAO- 01- 805 Facilities Location

    Page 32 GAO- 01- 805 Facilities Location

    Page 33 GAO- 01- 805 Facilities Location

    Page 34 GAO- 01- 805 Facilities Location

    Page 35 GAO- 01- 805 Facilities Location

    Page 36 GAO- 01- 805 Facilities Location

    Page 37 GAO- 01- 805 Facilities Location

    Page 38 GAO- 01- 805 Facilities Location

    Page 39 GAO- 01- 805 Facilities Location

    Page 40 GAO- 01- 805 Facilities Location

    Page 41 GAO- 01- 805 Facilities Location

    Page 42 GAO- 01- 805 Facilities Location

    Page 43 GAO- 01- 805 Facilities Location

    Page 44 GAO- 01- 805 Facilities Location

    Appendix I

    Appendix I Objectives, Scope, and Methodology

    Page 45 GAO- 01- 805 Facilities Location

    Appendix I Objectives, Scope, and Methodology

    Page 46 GAO- 01- 805 Facilities Location

    Appendix I Objectives, Scope, and Methodology

    Page 47 GAO- 01- 805 Facilities Location

    Appendix I Objectives, Scope, and Methodology

    Page 48 GAO- 01- 805 Facilities Location

    Appendix I Objectives, Scope, and Methodology

    Page 49 GAO- 01- 805 Facilities Location

    Appendix I Objectives, Scope, and Methodology

    Page 50 GAO- 01- 805 Facilities Location

    Page 51 GAO- 01- 805 Facilities Location

    Appendix II

    Appendix II List of Surveyed Federal Agencies That Recently Selected Site
    Locations

    Page 52 GAO- 01- 805 Facilities Location

    Page 53 GAO- 01- 805 Facilities Location

    Appendix III

    Page 54 GAO- 01- 805 Facilities Location

    Appendix IV

    Page 55 GAO- 01- 805 Facilities Location

    Appendix V

    Appendix V Federal Executive Branch Agencies With Some Level of Independent
    Authority to

    Acquire Real Property, Calendar Year 2000 Page 56 GAO- 01- 805 Facilities
    Location

    Page 57 GAO- 01- 805 Facilities Location

    Appendix VI

    Appendix VI Survey of Federal Facilities? Locations

    Page 58 GAO- 01- 805 Facilities Location

    Appendix VI Survey of Federal Facilities? Locations

    Page 59 GAO- 01- 805 Facilities Location

    Appendix VI Survey of Federal Facilities? Locations

    Page 60 GAO- 01- 805 Facilities Location

    Appendix VI Survey of Federal Facilities? Locations

    Page 61 GAO- 01- 805 Facilities Location

    Appendix VI Survey of Federal Facilities? Locations

    Page 62 GAO- 01- 805 Facilities Location

    Appendix VI Survey of Federal Facilities? Locations

    Page 63 GAO- 01- 805 Facilities Location

    Appendix VI Survey of Federal Facilities? Locations

    Page 64 GAO- 01- 805 Facilities Location

    Appendix VI Survey of Federal Facilities? Locations

    Page 65 GAO- 01- 805 Facilities Location

    Page 66 GAO- 01- 805 Facilities Location

    Appendix VII

    Appendix VII Comments From the General Services Administration

    Page 67 GAO- 01- 805 Facilities Location

    Appendix VII Comments From the General Services Administration

    Page 68 GAO- 01- 805 Facilities Location

    Appendix VII Comments From the General Services Administration

    Page 69 GAO- 01- 805 Facilities Location

    Page 70 GAO- 01- 805 Facilities Location

    Appendix VIII

    Appendix VIII Comments From the Department of the Interior

    Page 71 GAO- 01- 805 Facilities Location

    Page 72 GAO- 01- 805 Facilities Location

    Appendix IX

    Appendix IX Comments From the U. S. Customs Service

    Page 73 GAO- 01- 805 Facilities Location

    Page 74 GAO- 01- 805 Facilities Location

    Appendix X
    *** End of document. ***