    Federal Courthouses: Rent Increases Due to New Space and Growing
    Energy and Security Costs Require Better Tracking and Management
    (20-JUN-06, GAO-06-613).

    The judiciary pays over $900 million in rent annually to GSA for
    court-related space, and this amount represents a growing
    proportion of the judiciary's budget. The judiciary's rent
    payments are deposited into GSA's Federal Buildings Fund (FBF), a
    revolving fund used to finance GSA's real property services,
    including the construction and repair of federal facilities under
    GSA control. In December 2004, the judiciary requested a $483
    million dollar permanent, annual rent exemption, which GSA
    denied, saying that it undermined the intent of FBF and that GSA
    was unlikely to obtain appropriations to replace lost FBF income.
    GAO identified (1) recent trends in the judiciary's rent and
    space occupied and (2) challenges that the judiciary faces in
    managing its rent costs.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-06-613
        ACCNO:   A55787
      TITLE:     Federal Courthouses: Rent Increases Due to New Space and
    Growing Energy and Security Costs Require Better Tracking and
    Management
         DATE:   06/20/2006
      SUBJECT:   Budget obligations
    	     Federal courts
    	     Federal property management
    	     Interagency relations
    	     Rent policies
    	     Rental rates
    	     Federal Buildings Fund

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    GAO-06-613

         * FEDERAL COURTHOUSES
         * Rent Increases Due to New Space and Growing Energy and Security Costs
           Require Better Tracking and Management
              * Results in Brief
                   * Background
                   * Increases in Square Footage and Operating and Security Costs
                     Have Driven Increases in the Judiciary's Rent Bill from
                     Fiscal Years 2000 through 2005
                        * New Courthouses Have Added Considerable Amounts of
                          Space in Recent Years
                        * Square Footage Increases Occurred in All Years,
                          Circuits, and Courts
                        * Judiciary's Energy and Security Costs Increased at a
                          Disproportionately Higher Rate Than Net Square Feet
                          Added
                        * Tenant Improvement Costs Have Increased at a
                          Disproportionately Lower Rate Than Square Footage
                        * GSA and the Judiciary Do Not Routinely and
                          Comprehensively Analyze Trends of Major Rent Bill
                          Components Related to Rent Bill Growth
                   * Judiciary Faces a Number of Challenges but Could Take
                     Actions to Better Manage Its Future Rent Payments
                        * Structural and Architectural Elements of Modern
                          Courthouses Have Increased Construction Costs beyond
                          the Commercial Market
                        * Judiciary's Rent Validation Effort Intends to Monitor
                          GSA Rent Charges but Does Not Include Incentives for
                          Efficient Space Management
                        * Judiciary Lacks Space Allocation Criteria for Appeals
                          Courts and Senior District Judges
                        * Additional Challenges Identified by the Judiciary
                   * Conclusions
                   * Recommendations
                   * Agency Comments and Our Evaluation
                        * GSA Comments
                        * AOUSC Comments
              * Appendix I: Scope and Methodology
              * Appendix II: Comments from the General Services Administration
              * Appendix III: Comments from the Administrative Office of the U.S.
                Courts
                   * GAO Comments
              * Appendix IV: GAO Contact and Staff Acknowledgments
              * Related GAO Products
                   * Order by Mail or Phone

                     United States Government Accountability Office

    GAO

                                       June 2006

    FEDERAL COURTHOUSES

     Rent Increases Due to New Space and Growing Energy and Security Costs Require
                             Better Tracking and Management

    GAO-06-613

    FEDERAL COURTHOUSES

    Rent Increases Due to New Space and Growing Energy and Security Costs
    Require Better Tracking and Management

      What GAO Found

    The federal judiciary's rental obligations to GSA for courthouses have
    increased from $780 million to $990 million-or 27 percent from fiscal
    years 2000 through 2005, after controlling for inflation-primarily due to
    a simultaneous net increase in space from 33.6 million to 39.8 million
    rentable square feet, a 19 percent increase nationwide. Much of the net
    increase in space was the result of new courthouses that the judiciary has
    taken occupancy of since 2000. According to the Administrative Office of
    the U.S. Courts (AOUSC), the judiciary's workload has grown and the number
    of court staff has doubled since 1985. Shell rent (the building with basic
    infrastructure) increased proportionately with net square footage growth,
    but operational (utilities and general maintenance) and security costs
    grew disproportionately higher than square footage due to external
    factors, such as increasing energy costs and security requirements.
    Neither GSA nor the judiciary had routinely and comprehensively analyzed
    the factors causing rent increases, making it more difficult for the
    judiciary to manage increases.

    The Approximate Share of Judiciary Rent Increases Attributable to Net
    Growth in Square Footage and Other Factors (Fiscal Years 2000 through
    2005) Dollars in millions

    All rent componentsattributable to net increases in square footage

    Operating costs that exceeded net increases in square footage

    Security costs that exceeded net increases in square footage

        Total: $210 million increase, adjusted for inflation

    Source: GAO analysis of GSA data.

    The federal judiciary faces several challenges to managing its rental
    obligations, including costly new construction requirements, a lack of
    incentives for efficient space use, and a lack of space allocation
    criteria for appeals and senior judges. First, building requirements, such
    as three separate circulation patterns for judges, prisoners, and the
    public and other structural and architectural elements make courthouses
    among the most expensive federal facilities to construct, often leading to
    higher rent payments. Second, the judiciary has begun a rent validation
    effort intended to monitor GSA rent charges, but it does not address the
    lack of incentives for efficient space management that we found at the
    circuit and district levels. An example of the inefficiencies that may
    result is in the Eastern District of Virginia, where the judiciary paid
    about $272,000 in 2005 to rent space for an appeals judge in McLean,
    Virginia, in addition to paying for space designated for that judge in a
    nearby federal courthouse that the judiciary later used for alternative
    purposes. Finally, the lack of criteria for assigning courtrooms for
    appeals and senior judges can contribute to inefficiencies in the amount
    of space provided, which can result in higher

        rent payments. United States Government Accountability Office

    Contents

    Letter 1
    Results in Brief 3
    Background 6
    Increases in Square Footage and Operating and Security Costs Have Driven
    Increases in the Judiciary's Rent Bill from Fiscal Years 2000 through 2005
    10
    Judiciary Faces a Number of Challenges but Could Take Actions to Better
    Manage Its Future Rent Payments 21
    Conclusions 38
    Recommendations 39
    Agency Comments and Our Evaluation 40
    Appendix I Scope and Methodology
    Appendix II Comments from the General
    Services Administration 46
    Appendix III Comments from the Administrative Office of the U.S. Courts 48
    GAO Comments 81

    Appendix IV GAO Contact and Staff Acknowledgments

    Related GAO Products

    Table

    : Newly Constructed Federal Courthouses Occupied since Fiscal Year 1998

    Figures
                  Figure 1: Space Distribution within the Federal Judiciary in
                                             Fiscal
               Year 2005                                                        9
                Figure 2: Change in Judiciary Rent and Rentable Square Footage
                              (Fiscal Years 2000 through 2005)                 11
                 Figure 3: The Approximate Share of Judiciary Rent Increases
                        Attributable to Net Growth in Square Footage and Other
                          Factors (Fiscal Years 2000 through 2005)             12
                  Figure 4: Percentage Change in Square Footage and Major Rent
                                                                          Bill
                            Components, by Judicial Circuit, Fiscal Years 2000
               through 2005                                                    17
                 Figure 5: Sample Courtroom and Associated Support Spaces That
                             Were Based on Design Guide Criteria               23
                          Figure 6: The Atrium in the Sandra Day O'Conner U.S.
                                                                   Courthouse,
                                      Phoenix, Arizona                         24
                 Figure 7: Storage Space in the Seattle Courthouse That Was
                              Planned for Conversion into a District Courtroom 28
                Figure 8: Unassigned Chamber Suites Used by Visiting Judges in
                                    the Arizona District                       30
                  Figure 9: Special Proceedings Courtroom in the Sandra Day
                        O'Conner U.S. Courthouse in Phoenix, Arizona           32
               Figure 10: Senior District Judge Courtroom in the Union Station
                              Courthouse in Tacoma, Washington                 37

    Abbreviations

           AOUSC           Administrative Office of the United States Courts
           DHS           Department of Homeland Security
           FBF           Federal Buildings Fund
           FPS           Federal Protective Service
           GSA           General Services Administration
           ROI           return on investment

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this material
    separately.

    United States Government Accountability Office Washington, DC 20548

    June 20, 2006

    The Honorable Don Young Chairman The Honorable James Oberstar Ranking
    Democratic Member Committee on Transportation and Infrastructure House of
    Representatives

    The Honorable Bill Shuster Chairman The Honorable Eleanor Holmes Norton
    Ranking Democratic Member Subcommittee on Economic Development, Public

    Buildings, and Emergency Management Committee on Transportation and
    Infrastructure House of Representatives

    Since the early 1990s, the General Services Administration (GSA) and the
    federal judiciary 1 have undertaken a multibillion dollar courthouse
    construction initiative to address what the judiciary has identified as
    growing needs. According to the Administrative Office of the U.S. Courts
    (AOUSC), the judiciary's workload has grown substantially and the number
    of court staff has doubled since 1985. The judiciary pays over $900
    million in rent annually to GSA to occupy space for court-related
    purposes, and this amount represents a growing proportion of the
    judiciary's budget. The rent payments, which by law approximate commercial
    rates, are deposited into GSA's Federal Buildings Fund (FBF). With
    slightly over 20 percent of its budget allocated for rent payments, in
    December 2004, the judiciary requested a $483 million permanent, annual
    exemption from rent payments to GSA so that, according to judiciary
    officials, they would not have to reduce personnel to pay the rent. In
    denying the judiciary's requested rent exemption, GSA noted that FBF was

    1

    The federal judiciary is comprised of 94 judicial districts organized
    around state boundaries and grouped into 12 regional circuits, each of
    which has a United States Court of Appeals. There is also a 13th Circuit,
    the Court of Appeals for the Federal Circuit, which has nationwide
    jurisdiction to hear appeals in specialized cases, such as those involving
    patent laws and cases decided by the Court of International Trade and the
    Court of Federal Claims.

          Page 1 GAO-06-613 Federal Courthouses

    designed to encourage efficient space utilization by making agencies
    accountable for the space they occupy, and that it is unlikely GSA could
    obtain direct appropriations to replace lost FBF income.

    In June 2005, we testified 2 that federal agencies' rent payments provided
    a relatively stable, predictable source of revenue for FBF, but that this
    revenue has not been sufficient to finance both growing capital investment
    needs and the cost of leased space. We also found that previous rent
    exemptions, such as the one requested by the judiciary, hampered GSA's
    ability to generate sufficient revenue for needed capital investment. To
    address its budget- and space-related concerns, in 2004, the judiciary
    placed a 2-year moratorium on new capital courthouse projects, which is
    planned to be lifted at the end of fiscal year 2006. The judiciary said
    that it is pursuing and implementing cost-containment initiatives through
    a number of strategies associated with the moratorium. For example, the
    judiciary is reviewing its design standards for new courthouses that could
    lead to rent reductions, and it has initiated a new asset management
    planning process that it expects to use to select less costly renovations
    over building new courthouses on future projects. We have not evaluated
    these measures. In addition, no new projects were included in the
    President's fiscal year 2007 budget submission to Congress. On the basis
    of a request by the House Committee on Transportation and Infrastructure's
    Subcommittee on Economic Development, Public Buildings, and Emergency
    Management, the judiciary has recently initiated a detailed study of
    courtroom use. The Federal Judicial Center, the research arm of the
    federal judiciary, plans to conduct this study. Federal Judicial Center
    officials met with GAO staff on April 18, 2006, to discuss the study.

    You asked us to review the judiciary's courthouse rent costs. Accordingly,
    we identified (1) recent trends in the judiciary's rent payments and
    square footage occupied and (2) challenges that the judiciary faces in
    managing its rent costs. To address these objectives, we analyzed
    nationwide judiciary rent data generated from GSA's billing system,
    reviewed laws and the regulation related to FBF and GSA's rent pricing
    process and policies, and reviewed the U.S. Courts Design Guide and other
    judiciary rent planning documents. Additionally, we toured federal
    courthouses in the following districts: Arizona, Eastern Virginia,
    Maryland, Nebraska, Rhode Island, and Western Washington. We selected
    Arizona, Nebraska, Rhode

    GAO, Courthouse Construction: Overview of Previous and Ongoing Work,
    GAO-05-838T (Washington, D.C.: June 21, 2005).

          Page 2 GAO-06-613 Federal Courthouses

                                    Results in Brief

    Island, and Western Washington because they were districts that
    experienced large overall rent increases from fiscal years 2000 through
    2005 and were geographically dispersed. We also visited Maryland and
    Eastern Virginia court facilities while we were designing this audit and
    included them in the review because they contained a new courthouse, a
    renovated courthouse, and a courthouse that was targeted for replacement.
    The findings from these courthouse visits cannot be generalized to the
    population of federal courthouses nationwide. We interviewed district,
    magistrate, and bankruptcy judges; officials from AOUSC, which is the
    judiciary's administrative agency; clerks, circuit executives, and other
    representatives from U.S. circuit and district courts with authority over
    space and facilities; GSA officials in headquarters and the regions; and
    other real property management experts. We determined that the rent data
    were sufficiently reliable for the purposes of our review. We conducted
    our work from May 2005 to May 2006 in accordance with generally accepted
    government auditing standards. Appendix I contains additional information
    on our scope and methodology.

    The federal judiciary's rental obligations for federally owned and leased
    space have steadily risen from $780 million to $990 million, or 27 percent
    from fiscal years 2000 through 2005, after controlling for inflation.
    During this period, the judiciary had an increase in the amount of space
    it occupies, from 33.6 million to 39.8 million rentable square feet, which
    is a 19 percent increase nationwide. About two-thirds of the rent increase
    is attributable to this net increase in square footage, much of which was
    caused by the construction of new courthouses. Among the components of
    rent, shell (the building with basic infrastructure) grew proportionately
    with the amount of net space added-about 19 percent. However, increases in
    operating costs (driven by increases in energy costs) and security costs
    grew disproportionately higher than the percentage of net space added,
    thus contributing to the overall 27 percent increase in rent. The costs of
    tenant improvements (finishes such as carpeting) increased at a slower
    rate than the amount of net space added. Square footage and total rent
    growth occurred in all years, circuits, and courts. The judiciary's rent
    increases have outpaced those of other agencies located in GSA space,
    largely because the federal judiciary's square footage is growing faster
    than that of other agencies. However, the rate of operating cost growth
    was similar to those experienced by other agencies. 3 We found that
    neither

    3

    Interagency comparisons regarding security costs are not possible since
    the methods used to secure federal courthouses differ from other agencies.

        Page 3 GAO-06-613 Federal Courthouses

    the judiciary nor GSA had routinely and comprehensively analyzed the
    factors influencing the rent increases. To improve the judiciary's
    understanding of its rent costs, we are recommending that the judiciary
    coordinate with GSA to analyze its rent trends and factors causing any
    changes on an annual basis.

    The federal judiciary faces several challenges to managing its rent costs
    including costly new construction requirements, a lack of incentives for
    efficient space use, and a lack of space allocation criteria for appeals
    and senior district judges. First, modern courthouses require structural
    and architectural elements that make them among the most costly types of
    federal space to construct. Chief among these elements are the three
    separate circulation patterns for judges, prisoners, and the public that
    the

    U.S. Marshals Service (Marshals Service) requires for security. These
    construction costs necessitate rental rates under GSA's pricing policy
    that are more expensive than the highest-quality office space in some
    markets, including Denver, Colorado; Phoenix, Arizona; and Seattle,
    Washington. The judiciary's policy of providing one courtroom per district
    judge sets the number of courtrooms needed in new federal courthouses and
    adds space requirements, consequently increasing rent payments. Second, a
    rent validation effort the judiciary began recently does not address the
    lack of incentives for efficient space use at the circuit and district
    levels. Because rent is paid centrally by AOUSC, circuits and districts
    have few incentives to efficiently manage their space. An example of the
    inefficiencies that may result is in the Eastern District of Virginia,
    where the judiciary paid about $272,000 in 2005 to rent 4,600 square feet
    of office space for an appeals judge in McLean, Virginia, in addition to
    paying for 4,300 square feet of chamber space originally designated for
    that judge in the nearby Albert V. Bryan U.S. Courthouse in Alexandria,
    Virginia. According to AOUSC, the judiciary has pursued alternative uses
    for this chamber space.

    During site visits, we observed multiple instances of unused or unassigned
    courtrooms, chambers, and support spaces. Some of this underutilization is
    the result of outdated criteria, which stipulated the existence of support
    areas, such as libraries, that in some cases are now rarely used. Lastly,
    assigning space to appeals courts and senior district judges poses
    challenges due to a lack of criteria, which can lead to variation and
    inefficiencies and, thus, higher rent. Although the appeals court is
    required by law to hold court in specific locations, the statute does not
    indicate how much space it should occupy. For example, the judiciary plans
    to increase the space the appeals courts occupy by taking over former
    district courthouses in Richmond, Virginia, and Seattle, Washington, for
    appeals court use, even though the appeals courts conduct court there once
    a month or less. We are recommending that the judiciary establish
    incentives for more efficient space use at the circuit and district
    levels, establish criteria for the number of appeals court and senior
    district judge courtrooms and chambers, and revisit its space allocation
    criteria related to technological advancements.

    We provided a draft of this report to GSA and AOUSC for review and
    comment. GSA agreed generally with the thrust of the report and concurred
    with our recommendations, but said that it was more aware of the reasons
    for rent increases than our draft portrayed (see appendix II). AOUSC
    strongly disagreed with the findings and recommendations in the draft
    report. For example, AOUSC said that our objectives did not focus on
    important issues, such as increases in the judiciary's workload and the
    appropriateness of GSA rent pricing policy. These issues fell outside the
    scope of our review. In addition, AOUSC questioned our methodology for
    attributing two-thirds of the judiciary's rent increase to net increases
    in square footage, however, we continue to believe that our methodology is
    sound and a discussion of the reasons is contained at the end of this
    letter and in comment 4 of appendix III. In commenting on our draft
    report, AOUSC also identified several challenges in addition to the ones
    we identified that we subsequently incorporated into the report but did
    not evaluate. These included statutorily designated places of holding
    court, the benefits to GSA and the Federal Building Fund of retaining old
    courthouses with other courts, and inconsistencies in the funding stream
    for courthouse construction projects. In addition, we added context from
    the judiciary's perspective in other areas and made technical changes in
    response to AOUSC's comments. While important, these changes did not
    impact our overall findings, conclusions, or recommendations. See appendix
    III for AOUSC's letter and our comments.

    With regard to our recommendations, AOUSC said that tracking trends is
    necessary, but that the specific types of data recommended would not be
    particularly useful. AOUSC also said that it is in the process of creating
    incentives by establishing an annual budget cap for space rent costs, but
    no final decisions on the structure or level of the caps have been made.
    AOUSC disagreed that additional space allocation criteria are needed for
    appeals courts and senior district judges, but said that it has already
    started updating its space allocation criteria related to technology and
    plans to consider other changes in the future. We believe additional
    criteria for the appeals court and senior district judges are needed
    because the appeals courts' portion of the judiciary's square footage and
    rent bill is growing, and exclusive courtroom space is provided for senior
    district

                                       Background

    judges with limited caseloads. AOUSC also noted concerns about obtaining
    needed data from GSA to manage its rental obligations; we agree that
    cooperation from GSA is important.

    Federal agencies, including the judiciary, that operate in facilities
    under the control and custody of GSA are required to pay rent for the
    space they occupy. Rent payments, which by law must approximate commercial
    rates, are deposited into FBF, which is a revolving fund that GSA uses to
    provide a range of real property services, including maintenance, repairs,
    and alterations, to space occupied by federal agencies. GSA, through FBF,
    encourages federal agencies to be accountable for the space they use by
    requiring them to budget and pay for their own space requirements. A
    committee report accompanying the enactment of FBF noted that because each
    agency would have to budget for its space needs, doing so would promote
    more efficient and economical use of space by government agencies. 4 The
    judiciary's rent payments represent roughly 15 percent of all rent
    payments made into FBF, making it one of the two largest contributors. 5
    Over the last 20 years, we have compiled a large body of work on
    courthouse construction and federal real property that focused primarily
    on the need to better manage courthouse costs, planning, and courtroom
    use. A list of GAO reports related to federal real property and federal
    courthouses appears at the end of this report.

    On the basis of a rent pricing policy that was fully implemented in fiscal
    year 2000, the rent GSA charges is composed principally of shell rent,
    operating expenses, tenant improvements, and security costs. These
    components account for over 96 percent of the judiciary's rent bill
    payments in fiscal year 2005. The shell rent represents the cost of using
    the structure, base building systems, concrete floor, and basic wall and
    ceiling finishes and is the largest rent component, representing 60
    percent of the judiciary's annual rent bill payments in fiscal year 2005.
    6 For most government-owned properties, shell rent does not represent the
    actual costs, but is based instead on comparable private sector commercial
    rents in the local commercial market. GSA updates the shell rent rates
    every 5

    4

    H.R. Rep. No. 92-989, at 3 & 4 (1972).

    5

    The Department of Justice is the other largest contributor.

    6

    According to GSA, it uses shell rent proceeds to finance the cost of
    acquiring, repairing, altering, and operating buildings under the custody
    and control of GSA.

    Page 6 GAO-06-613 Federal Courthouses

    years on the basis of a commercial market real estate appraisal. GSA
    officials said that because the specialized courthouse finishes are paid
    for separately as tenant improvements, the remaining shell is comparable
    with other high-quality office space. In areas where there is no
    commercial real estate market to use in developing an appraisal or where
    the appraisal does not provide a fair return on GSA's capital investment,
    GSA applies a return on investment (ROI) pricing model. ROI pricing uses a
    cost recovery approach based on the cost to design and construct the
    building, plus a GSA fee spread over a 25-year period. GSA officials
    indicated that the ROI approach is primarily used for border-related
    facilities and that less than 1 percent of GSA's non judiciary facilities
    are priced using ROI. In government-leased space, GSA passes the actual
    lease costs directly to the tenant, plus a GSA management fee. Regardless
    of how GSA prices it, the tenant agency is responsible for paying shell
    rent for as long as it occupies the facility.

    In both owned and leased space, tenant improvements reflect customizing
    space for that tenant and can include private offices, special type
    spaces, floor covering, doors, and wood finishes. The tenant is
    responsible for deciding how to finish the space beyond some basic minimum
    standards and thus has control over much of the cost. GSA officials have
    said that the judiciary has the highest costs for tenant improvements in
    its inventory because of the level of finishes needed in federal
    courthouses. Unlike the other rent components, tenant improvement costs
    are removed from the rent bill once the tenant has completely paid for
    them.

    Rental rates for operating costs-which cover cleaning, general
    maintenance, heating, air conditioning, and other utilities-are set as
    part of the market appraisal for the shell rent in owned space. But unlike
    the shell rent, operating costs are adjusted annually for inflation in
    between appraisals. In leased spaces and some owned locations, GSA passes
    the actual operating costs directly to the tenant, plus a GSA fee to
    recoup the expenses incurred.

    The Marshals Service provides security services to judges, courts staff,
    and the public inside courthouses, and the Federal Protective Service
    (FPS) generally protects the exterior of courthouses. Until fiscal year
    2005, the judiciary paid security costs to GSA as part of its rent
    payment. Starting in fiscal year 2005, however, the judiciary began paying
    FPS security costs directly to the Department of Homeland Security (DHS)
    after FPS's transfer to that department. However, since FPS security costs
    still exist, and they were an important part of rent for all of the other
    years we analyzed, we included these costs as if they were still part of
    annual rent bill payments for fiscal year 2005. Rent is also composed of
    several other components, including fees for parking, building joint use
    (e.g., cafeterias and daycare centers), antennas, and GSA's Public
    Buildings Service. These other components comprised about 4 percent of the
    judiciary's entire rent bill in fiscal year 2005.

    It is GSA's policy that all space assignments in its inventory have an
    occupancy agreement between GSA and the tenant agency that explains the
    financial terms and conditions of the occupancy, as well as the years of
    occupancy. According to GSA, the occupancy agreement provides the tenant
    with a preview of total rent charges prior to construction of a facility
    and can act as a rent planning mechanism. GSA tenants, including the
    judiciary, can appeal a rent charge for a bill if they think that GSA may
    have made a mistake or misapplied its rent policy. GSA said that formal
    rent appeals are rare. GSA officials said that they do not track informal
    appeals because they are resolved locally. For example, the District of
    Rhode Island is currently informally challenging its appraised rate for
    the Federal Building U.S. Courthouse and the adjacent J.O. Pastore Federal
    Building but this has not yet risen to the level of a formal challenge.

    The Judicial Conference of the United States (Judicial Conference) is the
    judiciary's principal policy making body. The Judicial Conference works in
    coordination with AOUSC, which is responsible for administering the
    federal judiciary's budget as well as performing other programmatic and
    administrative functions, such as paying the judiciary's rent bill from
    its annual appropriations from Congress. Each circuit has a judicial
    council, which is composed of federal judges in that circuit, and the
    council has the authority to determine the need for all space
    accommodation within its circuit. As such, the district, bankruptcy, and
    appeals courts occupy space in courthouses or lease space in other federal
    or private office buildings. The district courts are the trial courts of
    the federal court system, housing both district and magistrate judges.
    They occupy the most space within the federal judiciary. The district
    courts have jurisdiction to hear nearly all categories of federal cases,
    including both civil and criminal matters. The federal judiciary has
    exclusive jurisdiction over bankruptcy cases, which are overseen by
    bankruptcy judges. The court of appeals from each circuit hears appeals
    from the district courts located within its boundaries, as well as appeals
    from decisions of federal administrative agencies. Figure 1 illustrates
    the rentable square feet distribution within the federal judiciary.

        Figure 1: Space Distribution within the Federal Judiciary in Fiscal Year
        2005

    4%

    Remaining space

    (1.6 million square feet)

    Courts of Appeals

    (4.4 million square feet)

    Bankruptcy courts

    (6.7 million square feet)

    District courts

    (27.6 million square feet)

    Source: GAO analysis of GSA data.

    Note: The remaining space is composed of AOUSC, the Federal Public
    Defender's Office, and other specialized federal courts.

    The judiciary and GSA are responsible for managing the multibillion-dollar
    federal courthouse construction program, which is designed to address the
    judiciary's long-term facility needs. AOUSC works with the nation's 94
    judicial districts to identify and prioritize needs for new and expanded
    courthouses. Since fiscal year 1996, AOUSC has used a 5-year plan to
    prioritize new courthouse construction projects, taking into account a
    court's need for space, security concerns, growth in judicial
    appointments, and operational inefficiencies that may exist. The Design
    Guide specifies the judiciary's criteria for designing court facilities
    and sets the space and design standards that GSA uses for courthouse
    construction and renovation. First published in 1991, the Design Guide has
    been revised several times to address economic constraints, functional
    requirements, and other issues, and the guide is currently undergoing
    another revision. Any significant deviation from the Design Guide's
    standards must be approved by the appropriate circuit council-a group of
    judges within a circuit-and reported to Congress.

      Increases in Square Footage and Operating and Security Costs Have Driven
      Increases in the Judiciary's Rent Bill from Fiscal Years 2000 through 2005

    The federal judiciary's rental obligations for federally owned and leased
    space have steadily risen from $780 million to $990 million, or 27 percent
    from fiscal years 2000 through 2005, after controlling for inflation.
    During this time, the judiciary had a net increase in the amount of space
    it occupies nationwide of 6.2 million rentable square feet, from 33.6
    million to 39.8 million rentable square feet-a 19 percent increase. The
    judiciary's rent increases have outpaced those of other agencies located
    in GSA space, largely because the judiciary's square footage is growing
    faster than that of other agencies. According to AOUSC, the judiciary's
    workload has grown substantially and the number of court staff has doubled
    since 1985.

    In analyzing the increases in rent, it is useful, for purposes of
    comparison, to consider that percentage increases in rent would occur
    proportionally with percentage increases in net space added. In other
    words, holding all factors constant, a net increase in space of 19 percent
    would logically be accompanied by a 19 percent increase in rent. Although
    several factors make it difficult to predict rent increases, comparisons
    with percentage increases in net space provide a frame of reference to
    better understand changes in rent from a prior period. As such, in
    analyzing the individual components of the actual rent increases the
    judiciary experienced, we found that shell rent, which includes the
    building with basic infrastructure, grew proportionately with the
    percentage of net space added-19 percent. However, operating and security
    costs grew disproportionately more than net space added. Operating costs
    grew 45 percent during this period and security costs grew 134 percent. On
    the basis of discussions with GSA, the private sector, and our review of
    industry data, we concluded that the primary reasons for this growth are,
    in the case of operating costs, significant spikes in recent years in
    energy costs, and, in the case of security, the increased emphasis on
    security needs in the aftermath of the September 11, 2001, terrorist
    attacks. Figure 2 shows the percentage increase in net rentable square
    feet between fiscal years 2000 and 2005 compared with the percentage
    increase in rent. Figure 3 shows that about two-thirds of the rent
    increase is attributable to the 19 percent increase in net square footage,
    and that the other one-third was caused by operating and security costs
    that grew disproportionately more than square footage.

    Figure 2: Change in Judiciary Rent and Rentable Square Footage (Fiscal
    Years 2000 through 2005)

    Percentage increase 30

    27%

    25

    20

    19%

    15

    10

    5

    0 2000 2001 2002 2003 2004 2005 Fiscal year

    Total rent costs, adjusted for inflation Rentable square feet

    Source: GAO analysis of GSA data.

    Figure 3: The Approximate Share of Judiciary Rent Increases Attributable to
    Net Growth in Square Footage and Other Factors (Fiscal Years 2000 through
    2005)

        Dollars in millions

    All rent componentsattributable to net increasesin square footage

    Operating costs that exceeded net increasesin square footage

    Security costs that exceeded net increasesin square footage

        Total: $210 million increase, adjusted for inflation

    Source: GAO analysis of GSA data.

    In commenting on our draft report, AOUSC disagreed with our methods for
    attributing costs to the judiciary's net growth in square footage. We
    believe that our methods are sound. Our analysis is based on a calculation
    of rent data trends rooted in the basic mathematical logic that a net
    increase in square footage will lead to additional rent charges associated
    with that space (see comment 4 in app. III).

        New Courthouses Have Added Considerable Amounts of Space in Recent Years

    The construction of new courthouses accounts for much of the new space
    added by the judiciary in recent years. New courthouses represent about

    8.8 million rentable square feet of new space that the judiciary has taken
    occupancy of since fiscal year 1998, which represents a larger timeframe
    than our rent trends data. 7 According to judiciary officials, much of the
    judiciary's growth and accompanying space-related needs have been the
    result of elevating workloads, such as increases experienced in civil case
    filings. For example, AOUSC said that appeals filings have increased 66
    percent, civil filings (district) have increased 29 percent, criminal
    filings

    7

    We use different time periods to show that the courthouse construction
    period extended beyond our trend analysis and to avoid methodological
    problems involving partial year occupancy.

    Page 12 GAO-06-613 Federal Courthouses

    (district) have increased 44 percent, bankruptcy filings have increased
    118 percent, persons under supervision have increased 40 percent, total
    judges have increased 25 percent, and total court support staff has
    increased 45 percent from 1990 to 2005. Accordingly, judiciary officials
    stated that the additional space the courts have added, often through
    construction of new courthouses, was essential in accommodating the
    creation of new judgeships. Furthermore, judiciary officials have said
    this growth has also resulted in the need for ancillary space for court
    support staff.

    Table 1 lists the names and associated rentable square feet of the
    courthouses that the judiciary has taken occupancy of since 1998. New
    courthouses do not account for all of the judiciary's new space. The
    judiciary has added other space and, in some cases, does not return old
    courthouses to GSA for disposal. In our site visits to districts with
    newly constructed courthouses, we found that the judiciary tended to
    retain the old district courthouse, although usually for other purposes.
    For example, in Phoenix and Tucson, Arizona, the bankruptcy court took
    over the old district courthouses after the district court moved into the
    new courthouse. In Seattle, Washington, and Richmond, Virginia, the
    appeals courts plan to take over the old district court after the district
    court moves to the new courthouse. Among the courthouses we visited, only
    in Omaha, Nebraska, did the federal judiciary permanently vacate the old
    location of the federal court when it moved to the newly constructed
    Hruska Courthouse. In that instance, the judiciary more than doubled its
    overall square footage when it moved out of a multiple-agency federal
    building into the new courthouse.

                         Page 14 GAO-06-613 Federal Courthouses

    Table 1: Newly Constructed Federal Courthouses Occupied since Fiscal Year
    1998
                                           Construction completed Rentable square
    Federal courthouse        City and state           (fiscal            feet
                                                            year)
    Quentin N. Burdick United Fargo, North Dakota         1998          84,313
    States Courthouse
    U.S. Courthouse and       Ft. Myers, Florida          1998         102,201
    Federal Building
    Howard H. Baker Jr. U.S.  Knoxville, Tennessee        1998         200,563
    Courthouse
    Robert C. Byrd and U.S.   Charleston, West            1998         209,808
    Courthouse                Virginia
    Sam M. Gibbons U.S.       Tampa, Florida              1998         307,671
    Courthouse
    Charles Evans Whittaker   Kansas City, Missouri       1998         470,718
    Courthouse
    John Joseph Moakley U.S.  Boston, Massachusetts       1998         506,602
    Courthouse
    Robert C. Byrd Federal    Beckley, West Virginia      1999          61,145
    Building and Courthouse
    William J. Nealon U.S.    Scranton, Pennsylvania      1999          65,917
    Courthouse Annex
    Covington U.S. Courthouse Covington, Kentucky         1999          83,435
    U.S. Courthouse Annex     Tallahassee, Florida        1999          86,463
    Jim Shaw Courthouse       Lafayette, Louisiana        1999         110,199
    Brownsville Federal       Brownsville, Texas          1999         111,222
    Building U.S. Courthouse
    Pete Domenici Courthouse  Albuquerque, New Mexico     1999         227,801
    Robert T. Matsui U.S.     Sacramento, California      1999         348,134
    Courthouse
    Ronald Reagan Federal     Santa Ana, California       1999         403,049
    Building and Courthouse
    Roman L. Hruska U.S.      Omaha, Nebraska             2000         197,724
    Courthouse
    Lloyd D. George Federal   Las Vegas, Nevada           2000         213,708
    Building and U.S.
    Courthouse
    Evo A. DeConcini         Tucson, Arizona              2000         232,245
    Courthouse
    Alfonse M. D'amato U.S.  Central Islip, New York      2000         409,652
    Courthouse
    Thomas F. Eagleton U.S.  St. Louis, Missouri          2000         611,487
    Courthouse
    James H. Quillen U.S.    Greenville, Tennessee        2001         108,164
    Federal Courthouse
    Corpus Christi           Corpus Christi, Texas        2001         129,952
    Courthouse
    Frank M. Johnson Junior  Montgomery, Alabama          2001         231,460
    Courthouse
    Sandra Day O'Connor U.S. Phoenix, Arizona             2001         396,472
    Courthouse
    Nathaniel R. Jones
    Federal Building and     Youngstown, Ohio             2002          21,234
    U.S.
    Courthouse
    C.B. King U.S.          Albany, Georgia               2002          42,072
    Courthouse
    London Courthouse Annex London, Kentucky              2002          63,990
    Hammond Courthouse      Hammond, Indiana              2002         152,873
    Carl B. Stokes U.S.     Cleveland, Ohio               2002         357,278
    Courthouse
    Matthew J. Perry Jr.      Columbia, South Carolina    2003         148,189
    U.S. Courthouse
    Alfred A. Arraj U.S.    Denver, Colorado              2003         215,037
    Courthouse
    United States           Jacksonville, Florida         2003         308,247
    Courthouse

                                           Construction completed Rentable square
    Federal courthouse     City and state        (fiscal year)            feet
    Federal Building and      Wheeling, West              2004          28,936
    U.S. Courthouse Annex        Virginia
    Erie New Construction  Erie, Pennsylvania             2004          30,914
    Annex
    Laredo Federal         Laredo, Texas                  2004          91,351
    Building U.S.
    Courthouse
    Dan M. Russell Federal Gulfport, Mississippi          2004         134,974
    Building and U.S.
    Courthouse
    New Federal          Seattle, Washington              2004         386,281
    Courthouse
    William B. Bryant Annex to the E. Barrett             2005         267,738
    Prettyman Washington, DC
    U.S. Courthouse
    U.S. Courthouse       Fresno, CA                      2006         274,278
    Emanuel Cellar U.S.   Brooklyn, NY                    2006         396,410
    Courthouse Annex

        Square Footage Increases Occurred in All Years, Circuits, and Courts

    Source: GAO analysis of GSA data.

    The judiciary is evaluating its future courthouse construction effort.
    Before it imposed its 2005 moratorium postponing new courthouse
    construction projects for 2 years, the judiciary indicated that it had 35
    additional courthouse construction projects planned for fiscal years 2005
    through 2009, estimated to cost billions of dollars. According to AOUSC,
    these projects will be subject to the judiciary's new asset management
    planning process that will consider renovation and other ways to limit new
    construction. As of May 2006, no final decisions had been made.

    Each circuit increased its square footage from fiscal years 2000 through
    2005. However, the 8th and 9th Circuits added proportionally more square
    footage than the others, growing by 36 percent and 27 percent,
    respectively. Within the 8th Circuit, Missouri and Nebraska have nearly
    doubled their square footage from fiscal years 2000 through 2005. Fiscal
    year 2001 was the first full year of occupancy for the Eastern District of
    Missouri in the newly constructed Thomas F. Eagleton U.S. Courthouse in
    St. Louis, which is the single largest federal courthouse in the nation
    based on square footage. Fiscal year 2001 was also the first year of
    occupancy for the District of Nebraska in the Roman L. Hruska U.S.
    Courthouse in Omaha, which the chief district judge said was necessary
    because a number of space and security deficiencies existed in its
    previous facility. In the 9th Circuit, the District of Arizona has
    experienced a 128 percent increase in its space during this time period,
    thus leading to rent bill increases in excess of $15 million from fiscal
    years 2000 through 2005. During this time, the district opened two new
    district courthouses-the Sandra Day O'Connor U.S. Courthouse in Phoenix
    and the Evo A. DeConcini Courthouse in Tucson-and converted its old
    district courthouses in Phoenix and Tucson into bankruptcy courthouses. 8
    The chief district judge indicated that these new courthouses were
    necessary due to the new judgeships and increasing caseloads in Arizona.

    Figure 4 shows that square footage and total rent increased in all
    circuits. However, the amount of increase in shell rent compared to square
    footage varied by circuit. GSA officials said much of this variation is
    the result of differing real estate trends nationwide, but we did not
    evaluate the variations.

    In addition to taking occupancy of new and existing courthouses, the
    judiciary vacated some leased space.

    Page 16 GAO-06-613 Federal Courthouses

    Figure 4: Percentage Change in Square Footage and Major Rent Bill
    Components, by Judicial Circuit, Fiscal Years 2000 through 2005

    Sources: GAO analysis of GSA dataand MapArt.

    Note: The Federal and District of Columbia circuits were included in the
    aggregate statistics but are not listed in the map.

        Judiciary's Energy and Security Costs Increased at a Disproportionately
        Higher Rate Than Net Square Feet Added

    The district, bankruptcy, and appeals courts have increased their square
    footage and rent obligations to GSA from fiscal years 2000 through 2005.
    The appeals court's space and rent have grown at a faster rate than the
    district and bankruptcy courts. We found indications from our site visits
    that this trend may continue. In Richmond, Virginia, and Seattle,
    Washington, the appeals courts are planning to greatly expand their space
    by taking over older courthouses for their exclusive use (this example is
    discussed in more detail later in this report).

    From fiscal years 2000 through 2005, the portion of the judiciary's rent
    attributable to operating costs have increased 45 percent, primarily due
    to rising energy costs, thereby outpacing growth in square footage. This
    rate was consistent with space that other federal agencies occupy in GSA's
    inventory. In 2005, operating costs comprised about 22 percent of the
    judiciary's rent bill and represented a growing proportion of the rent
    bill in recent years. Industry officials acknowledged that the office
    building sector has experienced similar increases in operating costs, and
    we found that the wholesale costs of natural gas and heating oil have
    risen during this period. Operating cost growth occurred in all U.S.
    Circuits and, according to GSA officials, can be attributed to significant
    cost increases for utilities, such as heating fuels. For example, the 1st
    Circuit Court's operating costs have increased 86 percent since fiscal
    year 2000. GSA officials said that this increase in operating costs in the
    1st Circuit can be attributed primarily to the Moakley Courthouse in
    Boston, Massachusetts, where the appraised operating costs increased at
    that courthouse by more than $2 million in fiscal year 2004 because of
    energy cost increases throughout the region.

    Since the 1995 bombing of the Alfred P. Murrah Federal Building in
    Oklahoma City and the September 11, 2001, attacks, federal agencies have
    understandably devoted significant resources and attention to the physical
    security of their real property assets. In part to account for this
    change, the security cost component of the judiciary's rent bill payments
    increased 134 percent from fiscal years 2000 through 2005. This increase
    greatly outpaced the 19 percent growth in square footage. The security
    component represents about 6 percent of the entire rent bill in fiscal
    year 2005 and increased considerably in all U.S. Circuits from fiscal
    years 2000 through 2005. A basic security charge is assessed for all GSA
    properties

        Tenant Improvement Costs Have Increased at a Disproportionately Lower Rate
        Than Square Footage

    where FPS 9 provides security services. Many new courthouse construction
    projects have additional security enhancements that have led to increased
    rent bills nationwide. 1 0 According to AOUSC, FPS has placed additional
    contract guards in all federal buildings since the terrorist attacks of
    September 11, 2001. Security costs for private sector buildings have also
    increased during this period. The judiciary no longer pays its FPS
    security costs to GSA as part of its charges. Beginning in fiscal year
    2005, the judiciary started paying FPS security costs directly to DHS
    instead of including them in its rent payments to GSA. However, since the
    security costs still exist, and they were an important part of rent for
    all of the other years we analyzed, we included these costs as if they
    were still part of annual rent bill payments for fiscal year 2005.

    The tenant improvement component of the rent bill has increased 12 percent
    nationwide since fiscal year 2000, growing at a disproportionately lower
    rate than the net amount of square footage added. Tenant improvements grew
    at a slower rate than other rent components because the majority of
    federal courthouses are not newly constructed or renovated, and, unlike
    other components, every year some tenant improvements are removed from the
    rent bill when fully amortized. In the 2nd, 3rd, and 7th Circuits, while
    other rent cost components grew, the tenant improvement component
    decreased since 2000 because some buildings reached the end of their
    tenant improvement cycle. For example, the judiciary's tenant improvement
    payments for the Connecticut Financial Center, which houses part of the
    2nd Circuit's Federal Bankruptcy Court, expired in fiscal year 2005, and
    the tenant improvement rental cost went from $44,500 in fiscal year 2003
    to zero in fiscal year 2005. In addition, the Martin Luther King Jr.
    Federal Building and U.S. Courthouse in Newark, New Jersey, which houses
    the 3rd Circuit's district court in that city, paid off much of its tenant
    improvement costs from fiscal years 2002 through 2005, thereby reducing
    its tenant improvement charges for that facility by more than $1.5 million
    since fiscal year 2001.

    9

    In March 2003, FPS, which provides security for federal facilities, was
    transferred from GSA to Immigration and Customs Enforcement within the
    Department of Homeland Security.

    10

    GSA charges for building specific capital security items through the rent
    bill, which are for security items that are typically part of the building
    core and shell that can include vehicular barriers, guard booths,
    blast-resistant windows, and progressive collapse countermeasures.

        GSA and the Judiciary Do Not Routinely and Comprehensively Analyze Trends of
        Major Rent Bill Components Related to Rent Bill Growth

    The judiciary said that it believes fully amortized tenant improvement
    charges are not removed from its rent bill but, instead, are shifted to
    shell rent under the heading of "residual value of tenant improvements."
    GSA's pricing policy allows appraisers to consider the remaining value of
    amortized tenant improvements when appraising a property, but GSA
    officials said that this does not affect the appraised shell rental rate
    in most instances. Although we did not evaluate specific appraisals, our
    analysis of the rent data did not show a disproportionate increase in
    shell rent that would have been expected if GSA was generally shifting
    fully amortized tenant improvement costs to shell rent on the judiciary's
    rent bill. Shell rent per square foot stayed constant over the five-year
    period we analyzed, after adjusting for inflation.

    Although tenant improvements increased 12 percent overall, some circuits
    experienced steep increases in tenant improvement costs because of the new
    courthouses that were constructed in recent years and the types of
    finishes the judiciary had chosen. For example, the District of Rhode
    Island experienced a 927 percent increase in its tenant improvement costs,
    which GSA attributed to the cost of finishes for major renovations of the
    district's two primary courthouses-the Federal Building U.S. Courthouse
    and the adjacent J.O. Pastore Federal Building. District Court officials
    told us that practically every part of the building had tenant improvement
    needs. GSA officials said that both of these major renovation projects,
    chosen in lieu of new construction, led to increases in the overall
    quality of the space the district occupies and, consequently, very large
    increases in tenant improvement charges. The judiciary noted that this
    facility was renovated within Design Guide standards and within the tenant
    improvement allowance limits established by GSA.

    GSA and judiciary officials do not routinely and comprehensively analyze
    the trends in rent in a way that provides understanding and discussion of
    the factors influencing rent changes. GSA has provided the judiciary with
    what it views as options for reducing its rent obligations, including
    renegotiating leases in locations where commercial market rents have
    declined and closing underused courthouses, but the judiciary stated that
    this assistance has not been very useful in reducing long-term rent costs.
    In addition, GSA has not fully analyzed the underlying factors
    contributing to increases in the judiciary's rent. Similarly, judiciary
    officials said resource and data limitations have inhibited the
    judiciary's ability to create these trend data. For example, judiciary
    officials said they receive rent information at the building level, making
    it difficult to compile the information into nationwide trends. However,
    without this type of analysis, it is difficult for the judiciary to know
    how to best address larger-than-expected increases in rent or to gain a
    national understanding of the effect that local space management decisions
    have on rent. Our analysis of GSA data shows that space increases,
    operating cost charges, and security increases have driven the rent bill
    increases since 2000, while tenant improvement fees rose more slowly. This
    information could help the judiciary better understand the reasons behind
    its rent increases, make more informed space allocation decisions in the
    future, and identify errors in GSA's billing. Furthermore, the lack of
    full understanding of the reasons for increases in the judiciary rent, in
    our view, contributed to growing hostility between the judiciary and GSA.
    For example, the judiciary has criticized courthouse rent as being a
    "profit center" for GSA without fully understanding the reasons for rent
    increases. Conversely, GSA's lack of a full understanding of the reasons
    for the rent increases left it unable to justify them to the judiciary and
    other stakeholders, such as Congress.

    Structural and architectural elements, such as the need to build three
    separate circulation patterns for judges, prisoners, and the public, make
    courthouses among the most expensive federal facilities to construct in
    GSA's inventory. The judiciary's centralized rent payment system does not
    provide incentives for efficient space use at the circuit and district
    levels. The lack of criteria in the Design Guide for assigning courtroom
    and chamber space for appeals and senior district judges creates variation
    in the amount of space provided that also affects the amount of rent the
    judiciary pays. The judiciary noted a number of other challenges
    including, among other, the changing nature of its work and inadequate
    communication with GSA.

      Judiciary Faces a Number of Challenges but Could Take Actions to Better Manage
      Its Future Rent Payments

        Structural and Architectural Elements of Modern Courthouses Have Increased
        Construction Costs beyond the Commercial Market

    To help ensure consistency, the Design Guide was first published in 1991,
    and it established the design criteria for modern courthouses by providing
    space guidelines for a federal courthouse. The guide lays out a framework
    for a complex construction project due to three different circulation
    patterns for judicial officers, federal prisoners, and the public. The
    Marshals Service requires separate circulation patterns in order to
    provide adequate security for federal courthouses. To maintain separate
    circulation patterns, courthouses need elevators leading from each
    independent circulation parking garage or building entrance to each
    independent circulation area within each floor. For example, the Design
    Guide provides for separate elevator systems (1) linking judicial officers
    to their restricted parking areas, (2) linking prisoners with the secured
    cell block and parking location, and (3) linking the public with the
    public entrance. As a result, each courthouse has four elevator systems,
    when including the need for a freight elevator system.

    In our site visits, we found that these circulation patterns do not always
    exist in the older courthouses, such as the Federal Building U.S.
    Courthouse in Providence, Rhode Island. In these older courthouses, the
    three groups access courtrooms through the same hallways, which, as
    previously noted, is considered a security deficiency by the judiciary and
    the Marshals Service. Moving into a courthouse that meets Design Guide
    criteria improves security and increases the amount of space each
    courtroom requires without increasing the actual size of the courtroom.
    Figure 5 illustrates the Design Guide criteria provided for a courtroom
    and the support space associated with it, including the three circulation
    patterns, judges' chambers, prisoner holding cells, and public hallways.
    Since the Design Guide also outlines the judiciary's policy for providing
    one courtroom for each district judge, support spaces including chambers,
    jury rooms, holding cells, and independent hallways for judges, the public
    and prisoners, are replicated for each district judge in new courthouses.
    This policy increases the judiciary's space requirements and, hence, its
    rent payments.

      Figure 5: Sample Courtroom and Associated Support Spaces That Were Based on
                                 Design Guide Criteria

    Source: GAO analysis of judiciary data.

    GSA has also added architectural elements to courthouses that can increase
    square footage and, in turn, rent. GSA's Design Excellence Program
    establishes nationwide policies and procedures for selecting the finest
    and most appropriate architects and artists for GSA buildings. The program
    has produced architecturally important courthouses that were supported by
    the judiciary. AOUSC said access to the federal courts is a core value in
    the American system of government and that courthouses are historic and
    important symbols of the federal government in communities across the
    country that often play a significant role in urban redevelopment efforts.
    According to judiciary and GSA officials, some of these architectural
    elements, however, can increase the size of a building and consequently,
    the rent the judiciary pays. Figure 6 illustrates how the public spaces
    within a courthouse can help maintain architectural vision and increase
    space requirements above functional needs, in turn leading to increased
    rent.

    Figure 6: The Atrium in the Sandra Day O'Conner U.S. Courthouse, Phoenix,
    Arizona

    Structural elements, including heightened security standards outlined in
    the Design Guide, also contribute to the higher costs of modern
    courthouses. Examples of these heightened security standards include exit
    controls at the building perimeter; security door hardware; bullet- and
    break-resistant glazing and physical barriers; and standard, emergency,
    and backup power sources. The judiciary noted that some of these

        Judiciary's Rent Validation Effort Intends to Monitor GSA Rent Charges but
        Does Not Include Incentives for Efficient Space Management

    elements reflect governmentwide building standards, not the judiciary's
    own standards.

    These structural and architectural elements have made federal courthouses
    some of the most expensive federal facilities that GSA constructs, at
    times increasing their price beyond what commercial market rates will
    support. While the rent GSA charges for most properties is based on
    commercial market appraisals, some properties' construction costs do not
    garner an adequate ROI on the basis of the prevailing rates for
    high-quality office space. For these facilities, GSA applies ROI pricing
    that is based on the cost of design and construction of the building
    shell. Increasingly, GSA is using ROI pricing for its federal courthouse
    properties as compared with other federal facilities under the control of
    GSA. Currently, 28, or 72 percent, of 39 ROI properties in GSA's inventory
    are federal courthouses (excluding border-related facilities). This
    includes several newly built courthouses in urban markets, such as
    Seattle, Washington; Denver, Colorado; and Phoenix, Arizona. GSA officials
    said that the complexity and physical requirements, mostly related to
    security, drove the costs of these facilities above the price that the
    commercial market would bear.

    In January 2005, the judiciary initiated a nationwide rent validation
    effort to ensure that GSA is accurately applying its rent pricing policy.
    Phase I of the effort involves reviewing space assignments drawings
    compared with the space occupied by the judiciary. Phase II involves the
    examination of rental rates for buildings that the judiciary occupies. The
    judiciary said that this effort has been hindered by an inability to get
    underlying documentation, such as floor plans and appraisals, from GSA in
    a timely manner. AOUSC indicated that this information is necessary to
    truly validate GSA rent bills. As part of the validation effort, the
    judiciary uncovered mistakes in GSA pricing that led to a significant
    decrease in rent for the Northern and Southern Districts of New York.
    According to the judiciary, the 9th Circuit also validates some rent
    information, and GSA has corrected mistakes in that circuit that were
    identified. In addition, the judiciary recently informally challenged $27
    million in rent payments for several courthouses. Future discussions with
    GSA will be needed to determine whether these rent challenges represent
    actual rent errors.

    The judiciary's rent validation effort will help the judiciary monitor GSA
    billing. However, it does not address the lack of incentives for efficient
    space management that we found in the judiciary's process for space-use
    planning and rent payment. AOUSC pays the monthly rent bill on a national
    level without providing access to billing information to circuit and
    district officials. One AOUSC official processes the thousands of rent
    bills monthly. While the rent bills are paid at a national level,
    space-use decisions are made locally by circuit and district officials
    since each circuit judicial council has the authority to determine space
    needs. Some circuit and district officials that we visited said that this
    process creates no incentives to save or reduce space and, consequently,
    to lower rent payments. This is because the benefits of lower rent do not
    directly benefit circuits or districts that reduce their space
    requirements, and, conversely, neither the circuits nor the districts are
    responsible for paying the higher costs associated with their space-use
    and planning decisions. We also did not find a centralized oversight
    function for judicial space-use at the district or courthouse level.
    Consequently, the different court functions- such as the district,
    bankruptcy, and appeals courts-are responsible for managing their own
    space, thus limiting opportunities for efficient space management overall.

    We identified a number of different examples during our site visits that
    may illustrate how the lack of incentives may be undermining efficient
    space-use and, consequently, causing increased rent payments by the
    judiciary. We found the following:

    o  The judiciary builds to the 10-year need. That is, to avoid having to
    obtain new space again soon after a new project is completed, judiciary
    officials said that the judiciary plans for 10 years of excess space in
    new buildings and major renovations. 1 1 However, building to the 10year
    need assumes that the judiciary pays for excess space for the first 10
    years of any new construction project. Because so many courthouses have
    been constructed recently, the judiciary had excess space in many
    courthouses. AOUSC officials said that having this excess space is
    preferable to buildings being full upon occupancy because the benefits of
    having the extra space available, especially if workload increases faster
    than expected, outweigh the increased shortterm rental costs. There is a
    risk in the 10-year plan that excess space could last beyond the 10-year
    time frame if the judiciary overestimates growth. For example, the Union
    Station Courthouse in Tacoma,

    According to GSA, the judiciary's policy of planning for 10 years of
    excess space upon occupancy of new buildings and major renovations is a
    pilot test that GSA tentatively agreed to for four projects in fiscal year
    2004. All prior projects were based on the 10-year requirement from the
    design year.

    Page 26 GAO-06-613 Federal Courthouses

    Washington, and the Albert V. Bryan U.S. Courthouse in Alexandria,
    Virginia, are reaching the 10-year point where they were expected to be
    completely full, but both still had unassigned chambers and courtrooms. 1
    2 AOUSC informed us that when this occurs, the judiciary seeks alternative
    uses for the space, such as using it for conferences or storage. In
    addition, AOUSC said that the Albert V. Bryan Courthouse should be full in
    the next few years. Figure 7 illustrates space within the Seattle
    Courthouse that is used for storage but was planned for conversion into a
    district courtroom when needed.

    According to AOUSC, these unassigned chambers and courtrooms are used when
    needed by nonresident judges and for other purposes, and the Albert V.
    Bryant Courthouse has reached space capacity for its district courts
    clerks and probation offices.

    Page 27 GAO-06-613 Federal Courthouses

    Figure 7: Storage Space in the Seattle Courthouse That Was Planned for
    Conversion into a District Courtroom

    Source: GAO.

         o Some courtrooms were built in excess of size standards. Two districts
           we visited (Nebraska and Western Washington) chose to add features to
           the bankruptcy and magistrate courtrooms, such as making them larger
           or adding holding cells, in exchange for building fewer courtrooms
           than allotted. Judiciary officials said that these districts reduced
           the number of courtrooms they were allotted to offset the larger size.
           While official deviations from the Design Guide require approval by
           the appropriate circuit council and can yield a more flexible
           courthouse, they also may result in additional enhanced space and
           costs.
         o Numerous courtrooms and chambers were reserved for visiting judges. 1
           3 Districts often assign courtrooms and chambers for visiting

    The judiciary defines visiting judges as those judges who travel to a
    different courthouse location to provide temporary assistance to help meet
    its caseload needs.

    Page 28 GAO-06-613 Federal Courthouses

    judges. It is common judicial practice for judges to travel outside their
    resident courthouse for limited periods. During those times, they need
    chambers and courtrooms to perform their work responsibilities. However,
    according to district court officials, reserving courtrooms and chambers
    for visiting judges means that they are not used by the judiciary when
    visiting judges do not need them. Since the judiciary does not currently
    track courtroom usage statistics, 1 4 it is not possible to determine how
    often visiting judges make use of the courtrooms and chambers, but on each
    of our visits, the visiting chambers were not being used. The judiciary
    said it intends, over time, to assign these courtrooms to resident judges
    when a judicial vacancy is filled or a new judgeship is created. AOUSC
    officials said that the absence of new judgeships and rise in caseload in
    some areas of the country have made visiting judges one of the most
    successful and immediate ways to handle the workload. Furthermore, AOUSC
    said that visiting judge assignments have been helpful to courts where
    criminal caseloads are increasing, where a court might be inundated with a
    temporary spike in caseload, in courts where there has been a lag in
    filling a judicial vancancy, or where a judge has been on extended leave
    due to illness. Figure 8 shows unassigned judges' chambers in the Arizona
    district that are used when needed by visiting judges.

    We have done previous work on this issue. See GAO, Courthouse
    Construction: Better Courtroom Use Data Could Enhance Facility Planning
    and Decisionmaking, GAO/GGD-97-39 (Washington, D.C.: May 19, 1997).

    Page 29 GAO-06-613 Federal Courthouses

    Figure 8: Unassigned Chamber Suites Used by Visiting Judges in the Arizona
                                        District

    Source: GAO.

            * A number of space saving opportunities were not fully realized.
              During our visits, centralized libraries were either closed or
              unused. In most cases, this was because judicial officers are
              increasingly turning to electronic sources and research and keeping
              the limited number of books they need in their chambers. However,
              since the Design Guide provides space for law libraries, the
              districts we visited all had them. For example, when planning the
              new courthouse in Seattle, Washington, the judiciary decided to
              reduce the size of the law library by half, but instead of reducing
              the district's space requirements by that amount, the district used
              the extra space to create a large conference center for the use of
              the courthouse's tenants. Also, after the court switched from court
              reporters to electronic recording, the extra space that had been
              allocated for court reporters was reallocated to the bankruptcy
              judge chamber suites, increasing their size above Design Guide
              standards. District officials in Seattle said that this was not
            * considered a departure from the Design Guide because it did not
              increase the overall square footage of the building. 1 5 The AOUSC
              said that the provision for library space in the Design Guide will
              be considered at the Judicial Conference's September 2006 meeting.
         o Special proceedings courtrooms were not routinely assigned to a
           specific judge. The Design Guide provides for a special proceedings
           courtroom in district courthouses that is larger than the other
           district courtrooms. These special proceedings courtrooms tended to
           also have architectural elements or finishes that made them more
           aesthetically pleasing than the other courtrooms in a courthouse.
           Instead of assigning these courtrooms to an individual judge, several
           of the districts we visited said that they preferred to only use
           special proceedings courtrooms for special events, such as
           multidefendant trials, highly visible trials, or naturalization
           ceremonies. The Design Guide indicates that a special proceedings
           courtroom must be assigned for daily use and large, multiparty trials,
           and the guide encourages flexible use of the courtroom. Although AOUSC
           said that the judiciary intends to assign the courtrooms to judges, in
           practice, only two courthouses of the seven we visited that had
           special proceedings courtrooms, had assigned them to a judge. Figure 9
           illustrates the special proceedings courtroom in the Sandra Day
           O'Conner U.S. Courthouse in Phoenix, Arizona, which is not assigned to
           an individual judge.

    GSA said that it would consider the provision of space not in the approved
    request as a departure from the Design Guide, even though it did not
    increase the overall square footage of the building.

    Page 31 GAO-06-613 Federal Courthouses

    Figure 9: Special Proceedings Courtroom in the Sandra Day O'Conner U.S.
    Courthouse in Phoenix, Arizona

    Source: GAO.

         o Not all courtrooms were being used. At the Edward A. Garmatz Federal
           Building and U.S. Courthouse in Baltimore, Maryland, four magistrate
           courtrooms were being used to store excess furniture. The district
           chose not to use these courtrooms because they did not meet Design
           Guide standards for square footage. 1 6 Judiciary officials said that
           the magistrate judge hearing-room size poses security concerns due to
           the lack of separation between individuals in custody, the victims,
           law enforcement officers, judges, and the lawyers. However, the size
           of courtrooms is not listed as a security risk factor for increasing
           the priority for having a new courthouse built. The judiciary used the
           lack of magistrate courtrooms in the courthouse to increase its
           priority for having a new courthouse built in Baltimore. This goes
           against Design Guide instructions, which indicate the following:
           "Differences between space in the existing facility and the criteria
           in the Design Guide are not justification for facility alteration and
           expansion."
         o Judges had exclusive access to facilities in multiple buildings. For
           example, a bankruptcy judge with a full courtroom and chamber suite in
           the Union Station Courthouse in Tacoma, Washington, also maintained an
           exclusive courtroom and chamber suite about 30 miles away in Seattle,
           Washington. As a result, the judge occupied about 8,000 square feet of
           space, not including the jury rooms, holding cells (Tacoma), and
           separate circulation patterns. In commenting on this report, AOUSC
           said that the next bankruptcy judge assigned in Western Washington
           will reside in Tacoma, although AOUSC did not say whether the current
           judge would no longer travel. As another example, an appeals judge who
           had been assigned space in the new Albert V. Bryan U.S. Courthouse in
           Alexandria, Virginia, chose to stay in leased space 18 miles away in
           McLean, Virginia. In addition to the about $272,000 it paid in 2005
           for the 4,600 square feet in the Westpark Corporate Center in McLean,
           the judiciary pays for a 4,300 square foot chamber in the federal
           courthouse in Alexandria. While the chamber was vacant during our
           visit, the judiciary said that the chamber suite is now used as a
           conference room, a meeting place for the bar association, and file
           storage.

    Some circuit and district officials said that they would consider
    different choices if they had incentives to better utilize space, but
    determining what those differences would be or how they would ultimately
    affect the

    The Edward A. Garmatz Federal Building and U.S. Courthouse in Baltimore,
    Maryland, was built before the first Design Guide was published.

    Page 33 GAO-06-613 Federal Courthouses

        Judiciary Lacks Space Allocation Criteria for Appeals Courts and Senior
        District Judges

    judiciary's rent bill is difficult to determine. Our financial management
    work has shown that implementing effective acquisition decisions relies on
    empowering stakeholders and holding them accountable for coordinating,
    integrating, and implementing acquisition decisions. 1 7 It does not
    appear that accountability for the cost of acquiring courthouses and other
    facilities from GSA rests with circuit- and district-based officials, such
    as judges and key staff. In our visits to court locations, we discussed
    with judiciary officials a number of possible changes to incentives.
    Judiciary officials said, for example, that the judiciary could charge
    rent to the circuits that make space decisions. This approach would
    provide greater accountability for, and understanding of, the consequences
    of local space-use decisions. According to AOUSC, in March 2006 the
    Judicial Conference approved a plan to establish budget caps for the
    judiciary's space and facilities program as part of its budget check
    process. This action may help the judiciary manage its space but could
    face implementation challenges. In addition, AOUSC said that not all of
    its space use decisions are within its control. For example, AOUSC said
    that it faces challenges in what space within specially built courthouses
    it can return to GSA for security reasons. Consequently, the judiciary may
    be forced to retain space they do not need within the context of a larger
    courthouse.

    The Design Guide establishes the standards for most aspects of federal
    courthouses; however, it lacks firm criteria for assigning courtroom and
    chamber space for appeals and senior district judges. The Design Guide
    suggests one courtroom be provided per district judge because district
    hearings have one presiding judge. Since appeals judges sit in panels of
    three or more, the one judge per courtroom criteria does not apply.
    However, the Design Guide does not set different criteria for the number
    of chambers/courtrooms per appeals judge. The absence of criteria could
    lead to variation in the number of courtrooms that appeals courts are
    provided and this hinders more efficient space management. Data provided
    by the judiciary show that the number of courtrooms per appellate court
    judge varies by circuit. Since 2000, the appeals court has increased its
    rent costs and the square footage it occupies faster than the district and
    bankruptcy courts. Additionally, this lack of criteria appears to

    17

    GAO, Framework for Assessing the Acquisition Function at Federal Agencies,
    GAO-05-218G (Washington, D.C.: September 2005).

    Page 34 GAO-06-613 Federal Courthouses

    increase the number of courtrooms for appeals court judges, thereby
    potentially increasing the rent costs.

    In two districts we visited, the appeals courts were taking over the old
    district courthouses after the district court moved into a new building.
    Appeals courts are suitable for older courthouses because of their
    differing security requirements, but there are no criteria for the number
    of courtrooms for the appeals court or courtroom usage data. Furthermore,
    while certain appeals courts are required by law to have regular sessions
    at more than one location, 1 8 it is unclear whether their caseload is
    sufficient to justify their own courthouses. Appeals judges sit in panels
    and do the bulk of their work outside of the courtroom. When the new
    district courthouse in Richmond, Virginia, which is currently under
    construction, opens, the 4th Circuit Court of Appeals will take over
    exclusive use of the courthouse that currently houses all district,
    bankruptcy, and appeals courtrooms in that city. However, according to
    judiciary officials, the 4th Circuit holds court in Richmond only 9 weeks
    a year. Similarly, when the new courthouse in Seattle, Washington, opened
    in 2004, the district court and appeals courts moved out of the old
    building, the Nakamura Courthouse. After a $53 million renovation of the
    Nakamura Courthouse, the 9th Circuit Court of Appeals plans to reoccupy
    most of the building, although it already has 9th Circuit Appeals
    Courthouses in Portland, Oregon; San Francisco, California; and Pasadena,
    California. In addition, court records showed that the 9th Circuit had
    used only one courtroom for 1 week each month in Seattle over the last 3
    years, with one exception. Moving into the Nakamura Courthouse will
    quadruple the number of courtrooms and chambers that the appeals court
    will occupy in Seattle. Circuit and district officials with space
    management responsibilities said that national criteria for managing
    appeals space would help encourage efficient space use, improve on current
    space use, and limit the overall space appeals courts occupy.

    The Design Guide suggests that circuits and districts consider courtroom
    sharing for senior district judges, but it has not established national
    criteria for when or how that sharing should occur. When a judge turns 65

    For example, the 4th Circuit Court of Appeals is required to hold regular
    court sessions at Richmond, Virginia, and Asheville, North Carolina. The
    9th Circuit Court of Appeals is required to hold regular sessions in San
    Francisco and Los Angeles, California; Seattle, Washington; and Portland,
    Oregon. However, the statue does not specify how much space the courts
    should occupy at any of these locations. For example, according to
    judiciary data, the 4th Circuit Court does not have a courtroom in
    Asheville.

    Page 35 GAO-06-613 Federal Courthouses

    and has at least 15 years of service, the judge is eligible to retire.
    Instead of immediately retiring, judges may continue to hear cases as
    senior district judges, although at a reduced caseload, and some senior
    district judges hear few, if any, cases. About 15 percent of the federal
    court's caseload has been handled by senior district judges. The lack of
    firm Design Guide criteria for assigning senior district judges space
    gives circuit and district officials discretion in implementing a specific
    courtroom-sharing policy among senior district judges and discourages
    uniform practice. In the districts we visited, senior district judges
    usually retained exclusive use of a courtroom and chamber suites. Figure
    10 illustrates a courtroom in the Union Station Courthouse in Tacoma,
    Washington, that is assigned exclusively to an active senior district
    judge. Senior district judges with little or no caseload share courtrooms
    in some districts. A circuit official and a chief district judge said that
    national criteria, such as caseload requirements for maintaining an
    exclusive courtroom or any courtroom, could provide leverage with district
    judges and court staff in reducing the space requirements for senior
    district judges.

                                      Source: GAO.

                         Page 37 GAO-06-613 Federal Courthouses

        Additional Challenges Identified by the Judiciary

    In commenting on our draft report, AOUSC provided a list of additional
    challenges that it believes the judiciary faces. Some of the challenges
    related to ongoing disagreements with GSA, which we did not evaluate for
    this report. These included rent estimates from GSA that the judiciary
    believes are not timely; weak communication, according to AOUSC, from GSA
    regional offices to determine the cost implications of potential projects;
    problems the judiciary believes GSA has with keeping projects on schedule;
    GSA rent pricing practices for court space; and, according to AOUSC, GSA's
    inconsistent execution of current policies. AOUSC cited other challenges
    which are addressed in our report, including increases in workload and
    staff, the requirements of modern courthouses, statutorily designated
    places of holding court, and security requirements. AOUSC identified
    challenges of aging facilities, which is a challenge agencies face
    governmentwide, and the benefits from GSA backfilling old courthouses with
    court functions. We agree that helping GSA address the challenges of
    vacant GSA buildings is beneficial to FBF, but that this can have negative
    consequences for tenants. Lastly, AOUSC stated that inconsistent streams
    of funding for courthouse projects are a challenge. In June 2005, we
    testified 1 9 that federal agencies' rent payments provided a relatively
    stable, predictable source of revenue for FBF but that this revenue has
    not been sufficient to finance both growing capital investment needs and
    the cost of leased space.

                                      Conclusions

    Neither the judiciary nor GSA had routinely and comprehensively analyzed
    rent trends to fully understand that the judiciary's growing rent costs
    were primarily due to increases in the amount of space the judiciary
    occupies, together with rising operating and security costs. Without
    accurate data on the costs of rent components (e.g., shell rent,
    operations, and tenant improvements) maintained over time, the judiciary
    cannot identify, monitor, and respond to trends in rent costs. Similarly,
    without tracking its use of space over time-both overall (rentable square
    footage) and by function (district, appeals, and bankruptcy) and level
    (circuit and district)-the judiciary cannot identify and address trends
    affecting its rent costs. Obtaining and analyzing information on rent
    costs and space use would give the judiciary a better understanding of the
    reasons for rent increases and help guide its decisions about space use,
    especially as the judiciary plans to continue to expand into more new
    courthouses after the

    19GAO-05-838T.

    judiciary's moratorium on new construction expires at the end of fiscal
    year 2006.

    To some extent, the judiciary's space uses are mandated, and some
    associated rent costs are beyond the judiciary's control (e.g., complying
    with security requirements and paying for energy costs). However, the
    judiciary has discretion and could reduce its space use and rent costs
    through better tracking and management of rent costs. The judiciary's rent
    validation effort is intended to monitor GSA rent charges, but it does not
    address the growth in square footage that is a key driver in the rent
    increases. Without incentives for efficient space management, firm
    criteria for assigning space for appeals and senior district judges, and
    space allocation standards that are based on use, the judiciary often
    appeared to rent as much space as it is allocated in its Design Guide,
    without fully considering the impact of its space management decisions on
    rent costs. As a result, the appeals courts' portion of the judiciary's
    square footage and rent bill is growing, and exclusive courtroom space is
    provided for senior district judges with limited caseloads. Additionally,
    our observations of space use in selected courthouses, while not
    generalizable to all courthouses, suggest that some of the judiciary's
    space allocation standards, such as those for law libraries and court
    reporting, may not be consistent with current use due, for example, to
    advancements in technology.

    To help the federal judiciary better understand and manage rent costs, we

      Recommendations

    make the following five recommendations for steps that the judiciary
    should take:

    1. Work with GSA to track rent and square footage trend data on an annual
    basis for the following factors:

         o rent component (shell rent, operations, tenant improvements, and other
           costs) and security (paid to the Department of Homeland Security);
         o judicial function (district, appeals, and bankruptcy);
         o rentable square footage; and
         o geographic location (circuit and district levels).

    This data will allow the judiciary to create a better national
    understanding of the effect that local space management decisions have on
    rent and to identify any mistakes in GSA data.

    2. Work with the Judicial Conference of the United States to improve the
    way it manages its space and associated rent costs.

    a.
               Create incentives for districts/circuits to manage space more
               efficiently. These incentives could take several forms, such as a
               pilot project that that charges rent to circuits and/or districts
               to encourage more efficient space use.

    b.
               Revise the Design Guide to (1) establish criteria for the number
               of appeals courtrooms and chambers, (2) establish criteria for the
               space allocated for senior district judges, and (3) make
               additional improvements to space allocation standards related to
               technological advancements (e.g., libraries, court reporter space,
               and staff efficiency due to technology) and decrease requirements
               where appropriate.

    We provided a draft of this report to GSA and AOUSC for review and comment
    and received written comments from both. GSA agreed with the thrust of the
    report and concurred with our recommendations, but expressed one concern.
    GSA felt it was more aware of the reasons for rent increases than our
    draft portrayed. GSA's complete comments are contained in appendix II.
    AOUSC strongly disagreed with several of the findings and conclusions in
    the draft report, but indicated that it was already implementing actions
    related to our recommendations. AOUSC's extensive comments are contained
    in appendix III, along with specific GAO comments on issues AOUSC raised
    and facts it questioned about, among other things, our methodology and
    approaches. In response to AOUSC's comments, we made numerous additions to
    the report to provide context from the judiciary's perspective, and made
    some minor corrections that did not impact our findings, conclusions, or
    recommendations.

                           Agency Comments and Our Evaluation

                                      GSA Comments

    GSA agreed with the thrust of the report and concurred with our
    recommendations. GSA stated it has the programs and systems in place to
    assist AOUSC in tracking rent and square footage data and revising the
    Design Guide. To support the judiciary in managing its space requirements,
    it will be important for GSA to cooperate and assist the judiciary,
    including being responsive to reasonable requests for rentrelated
    information. Regarding our conclusion that neither the judiciary nor GSA
    conducted an analysis to fully understand the factors contributing to
    judiciary's growing rent costs, GSA stated that both GSA

                                     AOUSC Comments

    and the judiciary were aware that increases in the amount of space
    occupied and increases in security countermeasures comprised the primary
    reasons for judiciary's rent increases, and requested that we revise the
    report accordingly. While we acknowledge that GSA performed limited
    analyses of the judiciary's rent data, we continue to believe, as stated
    in our report, that GSA and the judiciary did not conduct routine and
    comprehensive examinations of trend data for the various components of the
    rent charges. The effect of this was that GSA and the judiciary were not
    fully aware of the impact that certain rent components had on rent bill
    increases the judiciary was experiencing. As an example, until we did our
    analysis of trends by rental component, GSA and AOUSC were not fully aware
    of the extent to which operating costs, driven in part by spikes in energy
    costs, were partially driving rent increases.

    AOUSC strongly disagreed with the draft report's findings and overall
    conclusions. However, AOUSC said that it has actions underway that relate
    to our recommendations but provided no details or timelines regarding
    implementation of these actions. AOUSC expressed concerns regarding the
    scope and methodology of our analysis, as well as our presentation of
    appropriate context. AOUSC said that GAO did not address important aspects
    of GSA rent-charging practices, such as identifying GSA rent billing
    errors. AOUSC also disagreed with the draft report's methodology and
    subsequent findings related to rent payment trends, citing our analysis of
    a positive correlation between the increase in space and increase in rent.
    Moreover, AOUSC stated that the draft report did not provide proper
    context to understand the judiciary's increasing space needs and rent
    costs, including an expansion in workload, security requirements, and
    challenges obtaining data from GSA. AOUSC also challenged several of the
    statements and facts in the report pertaining to individual court
    locations and discussions we held with judiciary officials in the cities
    we visited.

    We disagree with AOUSC's assessment of our report and believe our
    findings, conclusions, and recommendations are well supported. Moreover,
    we believe that AOUSC's concerns about the scope of our research stem from
    a misunderstanding of the purpose of our review. While we had several
    discussions during the course of the review to clarify the scope of our
    work, AOUSC continued to assert that addressing the judiciary's request
    for rent relief should be the central purpose of the review. Our review
    was never intended to examine the judiciary's request for rent relief, but
    rather to identify recent trends in the judiciary's rent payments and
    square footage occupied and challenges that the judiciary faces in
    managing its rent costs. AOUSC contends that we began our analysis with a
    preconceived conclusion about rent relief and that this affected the
    methodological approach we took. In previous reports we have expressed the
    view that exemptions on rental payments undermine the FBF, an
    intragovernmental revolving fund that was established, in part, to make
    federal tenants, including the federal judiciary, directly accountable for
    the space they occupy. 2 0 This position had no bearing on our ability to
    independently evaluate trends in rental payments and related challenges.
    Our methodological approach allowed us to identify the primary factors
    influencing the judiciary's rent bill increases, which include square
    footage, operating costs, and security charges. This data can help all
    stakeholders better understand the reasons behind the judiciary's rent
    bill increases, make more informed space allocation decisions in the
    future, and-as our report states-help address AOUSC's concerns with
    identifying errors in GSA's rent billing. We also believe this review can
    act as a starting point for future research, which could include some of
    the analyses suggested by AOUSC, such as evaluating rent increases by
    building age. However, we continue to believe that it was necessary to
    conduct an initial factual analysis to determine the factors driving rent
    increases that focused on the basic components of rent-shell rent,
    operational costs, security, and tenant improvements.

    We also disagree with AOUSC's assertion that our report does not provide
    proper context within the scope of our objectives. As discussed earlier,
    while we added context from the judiciary's perspective on the basis of
    AOUSC's comments, the draft report AOUSC reviewed already contained
    information that AOUSC asserted it was lacking. For example, it contained
    references to the judiciary's workload including increases in civil case
    filings and security requirements for such items as building circulation.
    We added additional context as a result of AOUSC's comments and believe
    our report provides a fair and balanced portrayal of the challenges facing
    the judiciary within the bounds of our study objectives.

    In commenting on our recommendations, AOUSC said the recommendations
    reflect areas they are already addressing, but have little bearing on the
    issue of rental charges. We disagree that our recommendations related to
    trend analysis, space allocation criteria, and incentives for managing
    costs have little bearing on increasing rental

    We addressed this issue in our June 2005 testimony at a congressional
    hearing that examined the judiciary's request for rent relief. See
    GAO-05-838T.

    Page 42 GAO-06-613 Federal Courthouses

    changes. We continue to believe the findings and recommendations in our
    report can help the judiciary better understand and manage rent costs.
    AOUSC also noted that effective implementation of some of our
    recommendations will require more timely and accurate data gathering from
    GSA. We concur and as stated in our first recommendation, we believe that
    AOUSC should work with GSA to track rent and square footage data on an
    annual basis to allow the judiciary to create a better national
    understanding of the effect of local space management decisions and
    identify any mistakes in GSA data, and that, in doing so, GSA's
    cooperation with the judiciary's reasonable requests for rent data would
    be helpful. In addition, although AOUSC indicated that it is in the
    process of updating its Design Guide to address libraries and other
    issues, it does not believe that additional criteria are necessary for the
    appeals court or senior district judges. We believe these recommendations
    have merit because the appeals courts' portion of the judiciary's square
    footage and rent bill is growing, and exclusive courtroom space is
    provided for senior district judges with limited caseloads.

    As agreed with your office, unless you publicly announce the contents of
    this report earlier, we plan no further distribution until 30 days from
    the report date. At that time, we will send copies to the Administrator of
    GSA and the Director of AOUSC. Copies will also be made available to other
    interested parties on request. In addition, the report will be available
    at no charge on GAO's Web site at http://www.gao.gov .

    If you or your staff have any questions about this report, please contact
    me at (202) 512-2834 or GoldsteinM@gao.gov . GAO staff who made major
    contributions to this report are listed in appendix IV.

    Mark L. Goldstein Director, Physical Infrastructure Issues

                           Appendix I: Scope and Methodology

    Our objectives were to identify (1) recent trends in the judiciary's rent
    payments and square footage occupied and (2) challenges that the judiciary
    faces in managing its rent costs. To address these objectives, we reviewed
    General Services Administration (GSA) rent data, laws relevant to GSA, the
    regulation related to the Federal Buildings Fund (FBF), and judiciary
    planning and budget documents; interviewed GSA and judiciary officials;
    and conducted audit site visits at six United States District Courts
    located across the country. We assessed the reliability of rent data
    provided by GSA's Public Building Service by (1) reviewing GSA annual
    financial audits, (2) interviewing knowledgeable officials about these
    data, and (3) reviewing an independent third-party rent bill validation
    effort. We determined that these data were sufficiently reliable and valid
    for the purposes of this report.

    To identify trends in judiciary's rent payments, we examined GSA's billing
    information and its primary rent database, the System for Tracking and
    Administering Real Property, to analyze nationwide judiciary rent
    expenditure data from fiscal years 2000 through 2005. We chose fiscal year
    2000 as a starting point for our analysis to coincide with GSA's
    introduction of a new rent pricing policy, which provided numeric
    breakouts for each of the various rent bill components (e.g., shell,
    operating costs, and tenant improvements). Additionally, we chose fiscal
    year 2005 as an ending point since this was the last full year of
    GSAgenerated rent data. We reviewed GSA's information on the judiciary's
    Agency/Bureau Code designations to provide information related to the
    various court functions (e.g., U.S. Circuit, District, and Bankruptcy) and
    their space allocations. We removed the effect of inflation on the rent
    data by using the Gross Domestic Product price index (2005 dollars).
    Generally, this index is preferred as a general price index because its
    coverage is broader than the Consumer Price Index.

    For our purposes, we used rentable square footage because that is the
    metric GSA uses to bill tenant agencies, including the judiciary. GSA
    calculates rentable square feet by measuring building space, including
    courthouses, in terms of usable and common spaces, based on the Building
    Owners and Managers Association's market-based definitions of those terms.
    For example, lobbies and public restrooms are considered common space. GSA
    converts usable space into rentable square feet by multiplying the usable
    space by the building's rentable/usable factor, which distributes common
    space proportionally among tenants in a given building. We adjusted the
    rentable square footage for the number of months a facility was occupied
    during a given fiscal year to avoid distortions in rentable square footage
    statistics due to partial year occupancy in certain courthouses. We also
    reviewed relevant GSA documents, such as the GSA's Desk Pricing Guide, for
    additional information on GSA's rent pricing policy and the cost
    components that comprise rent payments.

    To identify challenges that the judiciary faces in managing its rent
    costs, we visited federal courthouses in the following districts: Arizona,
    Eastern Virginia, Maryland, Nebraska, Rhode Island, and Western
    Washington. We selected Arizona, Nebraska, Rhode Island, and Western
    Washington because they were in districts that experienced large overall
    rent increases from fiscal years 2000 through 2005, were geographically
    dispersed, and may have been more likely to have challenges in managing
    rent costs. We also visited Maryland and Eastern Virginia court facilities
    because they contained a new courthouse, a renovated courthouse, and a
    courthouse that was targeted for replacement. During our site visits, we
    interviewed GSA officials in the regions, as well as other facilities
    experts, to discuss rent cost increases. The findings from these
    courthouse visits cannot be generalized to the population of federal
    courthouses nationwide. We also interviewed district, magistrate, and
    bankruptcy judges; clerks; circuit executives; and other representatives
    from U.S. circuit and district courts with authority over space and
    facilities. We interviewed judiciary officials associated with the rent
    bill payment process, including Administrative Office of the United States
    Courts officials. We also reviewed the judiciary's U.S. Courts Design
    Guide to determine space allocations for the different court components,
    including chambers, courtrooms, and ancillary space for U.S. appeals,
    district, and bankruptcy courts.

    Appendix II: Comments from the General Services Administration

    Appendix III: Comments from the Administrative Office of the U.S. Courts

    GAO comments supplementing those in the report text appear at the end of
    this appendix.

    See comment 1.

    See comment 2.

                             See comment 3. See comment 4.

                             See comment 5. See comment 6.

                                     See comment 7.

                                     See comment 8.

                                     See comment 9.

                                    See comment 10.

                            See comment 11. See comment 12.

                                    See comment 13.

                                    See comment 14.

                                    See comment 15.

                            See comment 16. See comment 17.

                                    See comment 18.

                                    See comment 19.

                            See comment 20. See comment 21.

                                    See comment 22.

                            See comment 23. See comment 24.

                            See comment 25. See comment 26.

                                    See comment 27.

                            See comment 28. See comment 29.

                            See comment 30. See comment 31.

                                    See comment 32.

                    See comment 33. See comment 34. See comment 35.

                                    See comment 36.

                    See comment 37. See comment 38. See comment 39.

                                    See comment 40.

                            See comment 41. See comment 42.

                                    See comment 43.

                                    See comment 44.

                                    See comment 45.

                            See comment 46. See comment 47.

                            See comment 48. See comment 49.

                                    See comment 50.

                            See comment 51. See comment 52.

                                    See comment 53.

                                    See comment 54.

                            See comment 55. See comment 56.

                            See comment 57. See comment 58.

                                    See comment 59.

                    See comment 60. See comment 61. See comment 62.

                            See comment 63. See comment 64.

                            See comment 65. See comment 66.

                            See comment 67. See comment 68.

                            See comment 69. See comment 70.

                            See comment 71. See comment 73.

                            See comment 74. See comment 75.

                                      GAO Comments

        Appendix III: Comments from the Administrative Office of the U.S. Courts

    The following are GAO's comments on the Administrative Office of the

    U.S. Courts letter dated June 6, 2006.

    1. The Administrative Office of the U.S. Courts (AOUSC) said that the
           draft report is about the federal judiciary's request for rent relief
           from the GSA. This is not the case. Addressing the judiciary's request
           for rent relief was not one of the objectives of this review. Our
           objectives were to determine the recent trends in the judiciary's rent
           payments and square footage occupied and challenges that the judiciary
           faces in managing its rent costs. AOUSC's misinterpretation of the
           scope of our work is, in our view, at the root of its criticisms of
           the study's design and methods. Regarding the judiciary's request for
           rent relief, exemptions on rental payments undermine the FBF, an
           intragovernmental revolving fund that was established, in part, to
           make federal tenants, including the federal judiciary, directly
           accountable for the space they occupy. In fact, we addressed this
           issue in our June 2005 testimony at a congressional hearing that
           examined the judiciary's request for rent relief. 1
    2. AOUSC listed seven factors summarizing its need for an adjustment to
           its rent. The judiciary's request for a rent adjustment is outside the
           scope of this review (see comment 1). However, the report does
           indicate that the judiciary has experienced problems with obtaining
           underlying documentation for rent charges from GSA and is informally
           challenging a number of its rent bills. AOUSC states that rent
           increases outpacing its appropriations has created a funding crisis.
           AOUSC does not effectively explain why the judiciary should obtain
           space and services from GSA at a reduced rate. The judiciary's rental
           agreements with GSA are interagency agreements the judiciary is
           expected to fulfill like other GSA tenants. If the judiciary believes
           specific charges are inappropriate, informal and formal appeals can be
           made to GSA.
    3. AOUSC's analysis of direct appropriations for FBF projects is
           incorrect. AOUSC suggested that courthouses are funded through direct
           appropriations. AOUSC further asserted that Office of Management and
           Budget and GSA officials have said that courthouse projects are funded
           through direct appropriations and not from FBF revenue. In all but 4
           years between 1990 and 2006, Congress appropriated additional funds
           for FBF. This additional funding was not tied directly to any
           particular project or

    1GAO-05-838T.

    types of projects. The statutory language relating to the direct
    appropriations states that additional amounts are being deposited into FBF
    for the purposes of the fund. Courthouse projects have been funded through
    FBF, whether or not there were additional appropriations made to the FBF.
    We have called this misinterpretation to the judiciary's attention on
    several occasions, including at the June 2005 hearing on rent relief and
    in related questions for the record that we provided to the subcommittee.
    2

    4. AOUSC said that we made an inferential leap to conclude that space
    growth caused $139 million of the rent increase. We disagree with AOUSC's
    comment and strongly believe that AOUSC mischaracterized our analysis as
    being inferential. In fact, this analysis is based on calculations of rent
    data trends rooted in basic mathematical logic. More specifically, our
    analysis is based on the logical conclusion that a net increase in square
    footage will lead to additional rent charges associated with that space,
    and the judiciary acknowledges a positive correlation between square
    footage and rent as "common sense." In estimating the amount of rent to
    attribute to the judiciary's increase in square footage, we separated the
    rent into its base components (shell rent, tenant improvements, security,
    operating, and remaining costs).

         o Shell rent increased proportionally with the increase in net square
           footage from fiscal year 2000 through 2005. In other words, the
           dollars per square foot that the judiciary pays in shell rent did not
           change after accounting for inflation. Shell rent is based on the
           appraised dollars per square foot multiplied by the number of square
           feet in a building. On the aggregate level, the dollars per square
           foot remained constant at about $15 in real terms, meaning that the
           growth in square footage alone caused shell rent to increase. Based on
           this formula, we can estimate in the aggregate that the judiciary's 19
           percent net increase in square footage can be attributed to the $94
           million increase in shell rent from fiscal year 2000 through 2005. Any
           influence of other outside factors, such as real estate rates, would
           be expressed in the dollars per square foot variable that remained
           constant.
         o Tenant improvements and the remaining costs also increased by 12 and
           10 percent, respectively from fiscal year 2000 through 2005-rates
           slower than the growth in square footage. Although the tenant
           improvement costs increased, the dollar per square foot rate that the

    GAO, Questions for the Record: Hearing on the Judiciary's Ability to Pay
    for Current and Future Space Needs, GAO-05-941R (Washington, D.C.: July
    27, 2005).

    Page 82 GAO-06-613 Federal Courthouses

    judiciary pays nationwide for tenant improvements actually decreased in
    real terms since fiscal year 2000. Tenant improvement costs increased at a
    slower rate because they amortize after 25 years and are removed from the
    rent bill once fully amortized, and a number of judiciary facilities are
    amortizing their tenant improvements. There were a number of courthouse
    renovations, which included increases in tenant improvement costs, but did
    not increase the judiciary's overall square footage. However, the slower
    growth in tenant improvements shows that these were more than compensated
    for by the amortization of tenant improvements in older facilities. In
    other words, if the judiciary would not have expanded its space, tenant
    improvement costs would have fallen rather than risen. Consequently, we
    attributed the $11 million increase in tenant improvements and the
    remaining costs to the net increase in square footage occupied by the
    judiciary.

    o  Security and operating costs increased at 134 percent and 45 percent,
    respectively-faster rates than the increase in square footage. Given the
    19 percent increase in square footage, we attributed a 19 percent increase
    in security and operating costs to the net increase in the square footage
    occupied by the judiciary because the net new space must be protected,
    heated, and cleaned. As a result, $29 million of the increase in operating
    costs and $5 million of the increase in security costs are associated with
    the judiciary's growth in square footage. However, since the actual
    increases in security and operating costs exceeded the growth in square
    footage, it is clear that the growth in square footage does not explain
    all of the increases in security and operating costs. We attributed the
    remaining $40 million increase in operating costs and $31 million increase
    in security costs to the disproportionately high increases in those
    components from fiscal year 2000 through 2005. Security increased because
    of the increased focus on security since the September 11, 2001 terrorist
    attacks, and operating costs increased due to recent increases in energy
    costs.

    5. AOUSC conducted a space versus growth analysis of its own. However,
    AOUSC's analysis uses different rent data and time periods, which greatly
    limits its analytical value as a comparison to our methodology's results.

            * Different data. Our data are exactly what GSA billed the judiciary
              by rent component for every building the judiciary occupied for
              fiscal years 2000 through 2005. AOUSC's data are different in a
              number of important ways. First, the AOUSC's table only expresses
              rent in gross terms, making it impossible to analyze how the
              different rent components changed. Second, based on the note in the
              table, AOUSC's rent and square footage statistics do not appear to
              include the
            * bankruptcy court, which represents 17 percent of all square footage
              in the federal judiciary as of fiscal year 2005. Third, the note in
              the table also indicates that the rent statistics represent the
              judiciary's Judicial Services Salaries and Expense account. It is
              unclear if it is a rent line item within the account or other
              expenses.
         o Different years. We chose fiscal year 2000 as a starting point to
           coincide with GSA's introduction of a new rent pricing policy, which
           provided numeric breakouts for each of the various rent bill
           components (e.g., shell, operating costs, tenant improvements, etc.).
           Prior to that year, it is impossible to break out these components,
           which allow an understanding of the reasons behind rent increases.
           However, AOUSC chose some dates in their analysis that preceded this
           change in GSA's rent pricing policy, which limits the information's
           usefulness. We chose fiscal year 2005 as an ending point because it
           was the last full year of GSA rent billing data, but AOUSC chose
           fiscal year 2006 as the end date for each set of figures. Since fiscal
           year 2006 does not end until September, we chose not to estimate
           square footage and rent statistics for fiscal year 2006. Consequently,
           we chose the longest time frame for which to measure trends in the
           different rent components. Our conclusions apply only to our time
           frame and should not be considered predictive in nature.
    1. AOUSC also said that we should have analyzed other independent
           variables, such as movement in the real estate market. The aggregate
           impact of those other variable are captured in the dollars per square
           foot variable for shell rent that remained constant in real terms from
           fiscal year 2000 through 2005. For example, if rising real estate
           rates would have been a large nationwide factor it would have been
           reflected in rising dollars per square foot rate for shell rent. Other
           variables are important for understanding the change in rent at the
           building level, but at the aggregate level, the effect of these
           variables offset each other. This point is illustrated by the circuit
           based analysis in figure 4; even though rent and square footage
           increased proportionally at the aggregate nationwide level, the rates
           of growth observed at the disaggregate circuit levels varied.
    2. AOUSC said that the report's primary focus on rent cost increases in
           recent years is only a fraction of the whole rent picture because rent
           for existing courthouses constitutes the majority of the judiciary's
           rental costs. Although our report discusses the addition of new space
           as one factor driving rent increases, our aggregate trend data and
           data at the individual circuit level include rental payments on
           existing space.
    3. AOUSC said that our report provides no context for why the judiciary
           has needed more space. Our report provides context for why the
           judiciary has added square footage in a number of places. For example,
           the draft report we sent to AOUSC for comment contained the following
           context:

    According to judiciary officials, much of the judiciary's growth and
    accompanying spacerelated needs have been the result of elevating
    workloads, such as increases experienced in civil case filings.
    Accordingly, judiciary officials stated that the additional space the
    courts have added, often through construction of new courthouses, was
    essential in accommodating the creation of new judgeships. Further, more
    judiciary officials have said this growth has also resulted in the need
    for ancillary space for court support staff.

    In addition, we have added information to the report about the judiciary's
    increasing workload, such as the workload statistics that AOUSC included
    on page 14 of its comment letter.

    1. AOUSC said that it is mystifying how better data analysis could enable
           the judiciary to better manage its rent increases. Obtaining and
           analyzing information on rent costs and space use would give the
           judiciary a better understanding of the reasons for rent increases and
           help guide its decisions about space use, especially as the judiciary
           plans to continue to expand into more new courthouses after its
           moratorium expires. As discussed in our report, until our review, both
           GSA and the judiciary were not fully aware of the extent to which
           energy and security costs had affected rent increases. We believe
           analyzing cost data to better manage those costs is a basic managerial
           principle in government and business.
    2. AOUSC said that the implication that it had larger than expected
           increases in rent is inaccurate and insulting. As discussed in the
           report, it is useful, for purposes of comparison, to consider that
           percentage increases in rent would occur proportionally with
           percentage increases in net space added. In other words, holding all
           factors constant, a net increase in space of 19 percent would
           logically be accompanied by a 19 percent increase in rent. As our data
           showed, rent costs increased 27 percent. We did not intend to insult
           AOUSC; we meant that some rent components increased more than expected
           given a 19 percent increase in square footage. AOUSC made reference
           again to its lack of appropriations to pay its rent bill. As mentioned
           earlier, AOUSC does not effectively explain in its comments why the
           judiciary's should obtain space and services from GSA at a reduced
           rate. In the appropriations process, congressional subcommittees
           conduct hearings at which federal officials provide detailed
           justifications for their funding requests.
    3. AOUSC said that our report assumed that public officials need
           financial incentives to exercise responsible stewardship. We
           recommended creating incentives for districts/circuits to manage space
           more efficiently. One such incentive is linking dollars to space
           usage. During our review, circuit and district officials with space
           management responsibility essentially agreed and said that they would
           consider different choices if they had incentives to better utilize
           space. In addition, the FBF itself is based on holding federal
           agencies accountable for the space they occupy.
    4. AOUSC said that our report pays inordinate attention to the current
           assignment of chambers and courtrooms and draws unfounded conclusions
           about them. Our report does not generalize our site visit findings to
           all courthouses nationwide, as noted in the report. However, we use
           the findings from those case studies to illustrate how a lack of
           incentives may lead to less than efficient space use in these
           locations.
    5. AOUSC said that the team neither spoke with an appellate judge nor
           asked the judiciary about the appellate courtroom usage practice or
           needs. In several locations, we met with circuit level officials with
           responsibility over space use decisions for the appeals courts in
           their circuits and requested information about the appellate courts'
           need for space. In addition, we reviewed the long-range facility
           plans, which include information on the appellate courts' need for
           space. We also interviewed numerous district, senior district,
           bankruptcy, and magistrate judges.
    6. AOUSC stated that we began our analysis with a preconceived conclusion
           about rent relief and that this affected the methodological approach
           we took. In previous reports we have expressed the view that
           exemptions on rental payments undermine the FBF, an intragovernmental
           revolving fund that was established, in part, to make federal tenants,
           including the federal judiciary, directly accountable for the space
           they occupy. 3 This position had no bearing on our ability to
           independently evaluate trends in rental payments and related
           challenges. Our methodological approach allowed us to identify the
           primary factors influencing the judiciary's rent bill increases, which
           include square footage, operating costs, and security charges. These
           data can help all stakeholders better understand the reasons behind
           the judiciary's rent bill increases, make more informed space
           allocation decisions in the future,

    3 GAO-05-838T.

    and-as our report states-help address AOUSC's concerns with identifying
    errors in GSA's rent billing.

    1. AOUSC said that we chose not to address fundamental issues regarding
           the appropriateness of GSA's rent pricing policy for courthouses,
           whether these policies were implemented properly, the impact of rising
           rental costs on the judiciary's ability to fund other essential needs,
           or mission-based reasons why the judiciary has and will need
           additional facilities. These were not the objectives of this review
           (see comment 1). However, the report does include context on why the
           judiciary believes it needed additional courthouses (see comment 8).
    2. AOUSC said that our report portrays the judiciary as being wrong and
           being GSA as right. As an example, AOUSC asserts that we only focused
           on incentives for the judiciary to control costs and not GSA. We
           disagree that our report portrays any entity as right or wrong. We
           were not asked to review the appropriateness of GSA's rent pricing
           policies, incentive structure, or other challenges facing GSA.
    3. AOUSC said that our support for GSA's ability to charge rent for
           donated property, which is not in the report but was discussed at
           meetings with AOUSC officials, illustrated deferential treatment to
           GSA. We disagree. GSA is authorized to charge rent on a donated
           parking lot. Pursuant to 40 U.S.C. 3175, the Administrator of General
           Services is authorized to accept, on behalf of the federal government,
           gifts of real property. The Administrator is further authorized
           pursuant to 40 U.S.C. 586 to set rates for the space and services that
           GSA provides to federal agencies, and in doing so, shall approximate
           commercial charges for comparable space and services. We have stated
           that agency appropriations are available for charges attributable to
           employee parking spaces that are included as part of GSA's charges for
           space and services that it provides to agencies. (See in the Matter of
           Parking Fees and Charges for General Services Administration,
           B-177610, 55 Comp. Gen. 897 (1976).) While we did not review whether
           the $11,000 that GSA charged the judiciary for parking in Providence,
           Rhode Island, was reasonable, GSA was acting within its authority when
           it accepted the property and charged approximate commercial rates for
           the parking spaces.
            1. AOUSC said our report suggests that the judiciary's rent problems
                may be due to unnecessary growth in space. We disagree. We make
                no value judgment on whether the growth was necessary or not.
                However, given its rent problems, the judiciary's efforts to
                justify its additional space and validate GSA rent charges are
                prudent. In addition, AOUSC also said that
            2. GAO sought very little information about the judiciary and
                ignored pertinent facts provided by judiciary officials. We
                disagree. We conducted numerous interviews with judiciary
                officials to obtain information about the judiciary and many of
                the facts that the judiciary provided were outside the scope of
                our review.
    4. AOUSC questioned our use of site visits as a methodological tool. We
           often use site visits to illustrate findings and in the case of this
           report, did not generalize those findings to the larger population
           (see comment 12). We selected Arizona, Nebraska, Rhode Island, and
           Western Washington because they were in districts that experienced
           large overall rent increases from fiscal year 2000 through 2005, were
           geographically dispersed, and may have been more likely to have
           challenges in managing rent costs. We chose fiscal year 2000 as a
           starting point for our analysis to coincide with GSA's introduction of
           a new rent pricing policy, which provided numeric breakouts for each
           of the various rent bill components (e.g., shell, operating costs,
           tenant improvements, etc.) and fiscal year 2005 as an ending point
           because it was the last full year of rent billing data.
    5. AOUSC said that our report characterized the space associated with
           visiting judges as unused. This comment was not a complete
           characterization of these issues in our draft report. Our draft report
           stated that these courtrooms and chambers are not used when a visiting
           judge is not present. We have clarified the report to allow for the
           possibility of nonjudicial uses of visiting courtrooms and chambers.
    6. AOUSC questioned our understanding of visiting judge policies and
           practices and said that we never asked about visiting judge courtroom
           and chamber usage. However, on October 25, 2005, we asked for all
           courtroom usage data compiled by the judiciary, but AOUSC officials
           said that the judiciary does not track courtroom usage at any level.
           We also reviewed

    The Use of Visiting Judges in Federal District Courts: A Guide for Judges
    and Court Personnel, published by the Federal Judicial Center, the
    research arm of the federal judiciary.

        1. AOUSC said that we mislabeled six photographs of empty courtrooms and
            chambers as being in Phoenix, Arizona. We clarified the caption to
            state that the photographs were taken in courthouse locations within
            the District of Arizona. Regarding the courtroom in Phoenix that
            AOUSC said was used on 103 days or nearly half of all business days.
            We have
        2. concluded in a past report that usage rates this low indicate that
            greater use of courtroom sharing could be considered. 4 We discussed
            the use of courtrooms and chambers with court officials during our
            site visits, and we requested courtroom usage data nationwide. AOUSC
            officials said they do not track courtroom usage at any level and
            added that any tracking mechanism would under value courtrooms, which
            are absolutely essential to the judicial process.
    1. AOUSC questioned our decision to visit districts where rent costs have
           increased and said that the report contained no information on why the
           district needed new facilities. First, our report methodology clearly
           indicates that we chose the U.S. Districts of Arizona, Nebraska, Rhode
           Island, and Western Washington because their rent costs were rising
           and they were geographically diverse, but we also visited Eastern
           Virginia and Maryland because they contained a new courthouse, a
           renovated courthouse, and a courthouse that was targeted for
           replacement. Second, our report addresses why the judiciary believes
           it needed new facilities (see comment 8).
    2. AOUSC said that GAO did not validate the rental charges for
           courthouses, as it said we would. Although validating GSA rent charges
           was not part of our objectives (see comment 1), we did interview GSA
           officials at each of our site visits. In those interviews, we
           discussed how GSA calculates rental charges, including reviewing floor
           plans, occupancy agreements, and rent bills. In addition, our report
           correctly describes Rhode Island's disputed rent bill as informal in
           that the judiciary has not pursued an official challenge under
           policies prescribed by GSA.
    3. AOUSC's subtitle said we inaccurately assessed judicial chambers and
           courtroom space, but AOUSC does not raise any factual inaccuracies in
           the body of its comments. Instead, AOUSC said that the issue of how
           chambers and courtrooms are assigned has little significance to rent.
           Our draft report addressed how courtrooms and chambers are assigned to
           illustrate the challenges that the judiciary faces in managing its
           rent costs. For example, we noted that special proceedings courtrooms
           are not routinely assigned to a district judge, as an illustration of
           how a lack of incentives may be undermining efficient space use and
           consequently causing increased rent payments by the judiciary. In
           addition, we noted

    4GAO-97-39 and GAO, Courthouse Construction: Sufficient Data and Analysis
    Would Help Resolve the Courtroom-Sharing Issue, GAO-01-70 (Washington,
    D.C.: Dec. 14, 2000).

    Page 89 GAO-06-613 Federal Courthouses

    that the judiciary said that it intends, over time, to assign courtrooms
    reserved for visiting judges to resident judges when a judicial vacancy is
    filled or a new judgeship is created. Regarding AOUSC's criticism of some
    of our observations of how space is used as "snapshots" that are not
    useful; we agree that courthouses are built for the long-term and that
    complex factors are involved. However, the judiciary is experiencing
    significant growth in rent costs in locations where it is paying for space
    that is not used regularly or sometimes not at all. This demonstrates one
    of the challenges facing the judiciary that we describe in our report.
    While the judiciary has identified a long-term need for space that is
    currently underutilized, it is unclear whether the judiciary has
    determined if there are opportunities for better utilization in the
    short-term.

    1. AOUSC said that our report included no information on new judgeships
           in the Districts we visited and lists the District of Arizona as an
           example. The draft report AOUSC reviewed included information on the
           creation of new judgeships, and the report now includes the District
           of Arizona as an example. The Chief Judge within the District of
           Arizona said that these new courthouses were necessary due to new
           judgeships and increasing caseloads. AOUSC asserted that limiting our
           analysis to square footage figures suggests that the construction of
           courthouses is unrelated to definable needs. As discussed in comment
           8, our report discusses the judiciary's increased caseload in the
           context of space needs.
    2. AOUSC questioned our use of testimonial evidence obtained during site
           visits and our refusal to release names of officials associated with
           specific testimonial evidence. We generally do not identify
           individuals by name in our audit reports for several reasons, one of
           which is to avoid adversely affecting those individuals. For similar
           reasons, during the auditing process, we have found that we are better
           able to obtain information from officials in circumstances in which
           they do not feel intimidated or pressured. Thus, we avoid identifying
           officials by name so they can speak freely without concern that their
           statements will be held against them. In addition, our processes and
           procedures for collecting testimonial evidence provide assurance that
           such statements, when used in a report, are heard by more than one
           analyst, accurately described, and corroborated by multiple sources.
           AOUSC and a district judge made a formal request for revealing the
           identities of the individuals whom we interviewed, which we declined
           for these reasons.
            1. The questions AOUSC raises, including whether methods used for
                determining commercially equivalent rental charges are
                appropriate for courthouses and whether GSA's bills are accurate,
                were never objectives
            2. of this review. AOUSC also suggests that we did not address how
                GSA calculates rent in the draft report. We addressed this issue
                in the background section of our report. At the beginning of our
                review, we identified a descriptive objective related to how GSA
                calculates rent. This was never intended to be an evaluative
                objective, and as such, we included the information in the
                background section of this report. It is common in our audits
                that background or descriptive information collected be conveyed
                in this manner.
    3. AOUSC said that we chose to ignore judiciary officials' concerns about
           a GSA rent billing and bonus program. Neither of these issues were
           within the objectives of this study (see comment 1). Our report says
           that the judiciary has identified errors. In addition, we discussed
           the issue of GSA billing errors with an official in GSA's Office of
           the Inspector General (OIG). This official said that OIG has begun
           work looking into GSA rent billing errors in response to AOUSC's
           concerns. We agreed to discuss our findings with OIG staff after the
           completion of our review.
    4. AOUSC said that we amended our report to reflect new information
           regarding AOUSC's identification of billing errors. We have added
           information to our report regarding AOUSC's challenges to GSA rent
           bills.
    5. AOUSC said that the draft report did not address or identify that the
           judiciary has found it challenging to obtain GSA's back-up
           documentation regarding rent charges. We have added the following
           information on judiciary's rent validation effort to our report:

    The judiciary said that this [rent validation] effort has been hindered by
    an inability to get underlying documentation, such as floor plans and
    appraisals, from GSA in a timely manner. AOUSC indicated that this
    information is necessary to truly validate GSA rent bills.

    1. AOUSC noted that we described the basic components of rental charges
           but suggests that we examine the rental charges in a number of other
           ways, including the rent trends over the life of buildings and the
           effect of real estate trends on rent. The trend data we developed
           represent a first step in understanding judiciary's rental payments to
           GSA and can serve as a basis for questions and inquiries by GSA and
           the judiciary.
    2. AOUSC said that thestudy does not say whether GSA's appraisal-based
           pricing approach is appropriate for courthouses. Examining the
           appropriateness of GSA's rent pricing policy was not part of this
           study (see comment 1).
    3. AOUSC said that the study does not assess GSA's return on investment
           pricing policy and raises a number of concerns with the GSA policy.
           Evaluating the relative merits of GSA's different methods for rent
           pricing was not one of the objectives of this study (see comment 1).
    4. AOUSC questioned our knowledge of the federal courts. Over the past 20
           years, we have compiled a large body of work on federal courthouse
           construction and federal real property. Our work on courthouse
           construction has focused primarily on construction costs, planning,
           and courtroom sharing (see Related GAO Products at the end of this
           report). In addition, we have a large body of work on the federal
           courts' missionrelated activities, such as caseload management and
           sentencing.
    5. AOUSC said that it is essential to provide information about the
           judiciary's growth and cited a number of statistics related to
           filings, judges, and staff. Our report provides context for why the
           judiciary has added square footage in a number of places, including
           the growth statistics listed here (see comment 8).
    6. AOUSC cited additional contextual issues missing from the report
           including the fact that access to the federal courts is a core value
           in the American system of government, and that courthouses are
           historic and important symbols of the federal government in
           communities across the country and often play a significant role in
           redevelopment efforts. We added context to the report to reflect this
           comment.
    7. AOUSC says that the GAO did not include information in the report
           about the need to build courthouses that can accommodate future
           expansion and that it makes no sense to have a courthouse full upon
           occupancy. However, our draft report discussed as a challenge that the
           judiciary builds to the 10-year need to accommodate future expansion,
           and this can lead to larger rent payments in the short term. We added
           context to the report to reflect AOUSC's view on this issue.
    8. AOUSC attributes a quote "inefficient space use" that is not in the
           draft report.
            1. AOUSC said that our draft report indicated that the Alexandria,
                Virginia, Courthouse "should" be full. We have clarified the
                report to state that the Albert V. Bryan Courthouse in
                Alexandria, Virginia is reaching the 10-year point where it is
                expected to be completely full but that we found that there were
                unassigned chambers and courtrooms. In addition, we
            2. noted in the report that AOUSC said that the courthouse in
                Alexandria should be full in the next few years.
    9. AOUSC said that thereport unfairly criticizes the judiciary for
           increasing courtroom flexibility in exchange for building fewer
           courtrooms than were allotted. Our report says that this approach can
           create a more flexible courthouse and that the judiciary expanded the
           courtrooms in exchange for building fewer courtrooms than allotted.
           However, it is important to note that any benefits of this policy
           would only be realized in the future if the Districts can effectively
           implement a policy of courtroom sharing that does not presently exist.
    10. AOUSC said that we did not include information on the challenges
           associated with changes in real estate market dynamics. The challenge
           to which the judiciary refers is an inherent part of the FBF. Rent
           payments by law must approximate commercial rates; and GSA, through
           FBF, encourages federal agencies to be accountable for the space they
           use by requiring them to budget and pay for their own space
           requirements. A committee report accompanying the enactment of FBF
           noted that because each agency would have to budget for its space
           needs, doing so would promote more efficient and economical use of
           space by government agencies. However, this approach may not work as
           intended with the judiciary unless the incentives are in place at the
           point where space use decisions are made. We found that the judiciary
           lacks incentives at the circuit and district levels for efficient
           space use and management. In addition, AOUSC said that it faces
           challenges in what space within specially built courthouses it can
           return to GSA for security reasons. We added context to the report to
           reflect this point.
    11. AOUSC said that the draft report did not include information on the
           challenges associated with obtaining underlying documentation in
           support of GSA's rent bills. We added context to our report indicating
           that the judiciary has experienced problems with obtaining underlying
           documentation for rent charges from GSA.
            1. AOUSC said that the draft report did not include information on
                the challenges involving space implications of technology.
                However, our draft report included a section indicating that the
                Design Guide criteria does not keep up with technological
                changes, and we recommended that AOUSC update its criteria,
                accordingly. In addition, AOUSC cites the fact that the Seattle
                court reduced its library by half the size, as an example of
                implications of technology. However, it is important to note that
                instead of reducing the size of the courthouse by this amount,
                the district chose to
            2. create a large conference center with the extra space. AOUSC also
                indicated that the Judicial Conference will review library space
                standards in September of 2006, which is a positive step.
    12. AOUSC said that our draft report mischaracterizes what transpired in
           Seattle, with regard to court reporter space. We disagree. Although we
           were unable to verify when these decisions were made, our report
           reflects the statements made by circuit and district officials on our
           visit, and we found that the bankruptcy chambers in the Seattle
           courthouse exceed Design Guide standards. AOUSC also said that it is
           not always practical to return space in an existing courthouse to GSA.
           We added context to the report to reflect this point, and we believe
           that this makes the decisions made during courthouse design even more
           critical.
    13. AOUSC said that it will update the Design Guide to reflect the impact
           of electronic filing on storage requirements in the clerks' office,
           which we view as a positive step that is in line with our
           recommendations.
    14. AOUSC indicates that the four magistrate courtrooms in the Baltimore
           courthouse are an inadequate size that creates security concerns. We
           have added additional context in the draft on this matter. However,
           the size of courtrooms is not listed as a security risk factor for
           increasing the priority for having a new courthouse built. In
           addition, it is important to note that the judiciary used the lack of
           magistrate courtrooms in the courthouse to increase its priority for
           having a new courthouse built in Baltimore. This goes against Design
           Guide instructions, which indicate the following: "Differences between
           space in the existing facility and the criteria in the Design Guide
           are not justification for facility alteration and expansion."
    15. AOUSC said that a number of challenges were not addressed in the
           report, including workload, security, and statutorily designated
           places of holding court. AOUSC also listed a number of challenges,
           including problems with the funding stream for courthouse construction
           projects, communication from GSA regional offices to determine the
           cost implications of potential projects, and GSA keeping projects on
           schedule. Our draft report addressed a number of these challenges, and
           we have listed AOUSC's views of these challenges in the body of this
           report.
    16. AOUSC incorrectly interprets our draft report as stating that we use
           the word "inefficient." The word "inefficient" did not appear in the
           draft report.
    17. AOUSC indicates that we make an incorrect statement about a bankruptcy
           judge that travels between Tacoma and Seattle, Washington. We continue
           to believe our statement that a bankruptcy judge in the Western
           District of Washington maintains an exclusive courtroom and chambers
           in two separate locations, within a 30-mile radius, is factual and
           accurate. First, this is the way judiciary officials conveyed his
           status in interviews. Second, the Web site for the Bankruptcy Court
           for the Western District of Washington lists different chambers,
           courtrooms, and staff contacts for the bankruptcy judge in Seattle and
           Tacoma.
    18. AOUSC notes that both courtrooms used by the bankruptcy judge, who
           travels between Seattle and Tacoma, Washington, do not have holding
           cells. We clarified the report to note that the Tacoma courthouse has
           holding cells, which exceed Design Guide standards for bankruptcy
           courtrooms, but the bankruptcy courtrooms in Seattle do not.
    19. AOUSC said that our highlights page incorrectly states that an appeals
           court judge had designated chamber space in Alexandria as well as
           McLean, Virginia. We believe that the word "designated" is appropriate
           because the appeals court judge occupied that space at one point,
           according to a judiciary official, before choosing to move to leased
           space in McLean, Virginia. Thus, it is correct to state that this
           judge had designated space in the building. The space was vacant
           during the time of our visit. We note in our report that the judiciary
           now uses this space for a variety of other purposes. However, it is
           not clear that it needed to use the space designated for the appeals
           judge for these purposes since the courthouse is not currently fully
           occupied. Specifically, the judiciary said that the Alexandria
           courthouse currently has 9 judges for 14 courtrooms in addition to
           excess space in its secure parking lot.
    20. AOUSC said that we make several inappropriate statements about tenant
           improvements in the draft report. AOUSC said that it is inappropriate
           to refer to tenant improvements as "finishes." We feel that referring
           to tenant improvements as finishes is appropriate because GSA defines
           tenant improvements as the improvements that take the space from shell
           to finished condition. AOUSC said that the report links "steep
           increases in cost to the types of finishes." We believe that this is a
           mischaracterization of the text in the draft report. We link the
           increases in tenant improvement costs to the new courthouses
           constructed in recent years and the types of finishes the judiciary
           has chosen. We clarified the report to indicate that there are tenant
           improvement finishes in addition to wood finishes.
    21. AOUSC said that we need to add context to the finding that tenant
           improvement costs in the District of Rhode Island increased 927
           percent, but we believe our draft report addressed these issues. Our
           report states:

    The District of Rhode Island experienced a 927 percent increase in its
    tenant improvement costs, which GSA attributed to the cost of finishes for
    major renovations of the district's two primary courthouses-the Federal
    Building U.S. Courthouse and the adjacent J.O. Pastore Federal Building.
    District court officials told us that practically every part of the
    building had tenant improvement needs. GSA officials said that both of
    these major renovation projects, chosen in lieu of new construction, led
    to increases in the overall quality of the space the district occupies
    and, consequently, very large increases in tenant improvement charges. The
    judiciary noted that this facility was renovated within Design Guide
    standards and within the tenant improvement allowance limits established
    by GSA.

    1. AOUSC suggested that we change the word "architectural" to
           "structural" in our references to the security based elements of
           courthouses. We accepted this suggestion, and changed our report,
           accordingly.
    2. AOUSC said that the draft includes misleading information about
           security needs and secure circulation patterns. We disagree with this
           statement. Our draft report included context that the judiciary
           suggests. For example, the draft report stated:

    The Marshals Service requires separate circulation patterns in order to
    provide adequate security for federal courthouses. To maintain separate
    circulation patterns courthouses need elevators leading from each
    independent circulation parking garage or building entrance to each
    independent circulation area within each floor. For example, the Design
    Guide provides for separate elevator systems (1) linking judicial officers
    to their restricted parking areas, (2) linking prisoners with the secured
    cell block and parking location, and

    (3) linking the public with the public entrance.

    AOUSC also again questioned our expertise, which we addressed in comment
    35.

        1. AOUSC said that figure 5 in the draft report labeled "Sample
            Courtroom and Associated Support Spaces That Were Based on Design
            Guide Criteria" is inaccurate. We developed this figure because the
            Design Guide depiction of a district sized courtroom is not drawn to
            scale. In addition, our sample courtroom graphic is based on the
            floor plan of an actual courtroom that was built to Design Guide
            standards. The AOUSC also states that we imply that every courtroom
            has a separate set of elevators. We have clarified the report to
            reflect that independent
        2. hallways, rather than a separate set of elevators, are replicated for
            each district judge. The point remains that modern courtrooms include
            more than just the actual courtroom and that a policy which provides
            one courtroom per district judge in new courthouses also must provide
            all the support spaces as well.
    1. AOUSC said that our draft report implies that the judiciary uses a one
           courtroom per judge criteria for the appeals court and says that this
           is not true. We disagree that our draft report makes this implication.
           Our report states that the absence of criteria could lead to variation
           in the number of courtrooms that appeals courts are provided. Data
           from the judiciary shows that the number of courtrooms per appeals
           court judge varies by circuit. For example, the 3rd Circuit has two
           appeals courtrooms for 22 circuit judges while the 8th Circuit has
           nine appeals courtrooms for 21 judges.
    2. AOUSC said that our linkage between the lack of criteria for the
           number of appeals courtrooms and a possible increase in rent is
           conjecture. We believe there is evidence to support a logical link
           between criteria for the number of appeals courtrooms and chambers and
           the judiciary's ability to limit growth and consequently rent.
           Specifically, since fiscal year 2000, the appeals court has increased
           its share of rent costs and the square footage it occupies faster than
           the district and bankruptcy courts. Criteria on the number of
           courtrooms and chambers assigned to the appeals court may help stem
           this growth.
            1. In responding to our first recommendation, AOUSC said that the
                specific types of data we recommend tracking would not be useful
                for program planning, management or budgeting. We disagree.
                Without accurate data on the costs of rent components (e.g.,
                shell rent, operations, and tenant improvements) maintained over
                time, the judiciary cannot identify, monitor, and respond to
                trends in rent costs. Similarly, without tracking its use of
                space over time-both overall (rentable square footage) and by
                function (district, appeals, and bankruptcy) and level (circuit
                and district)-the judiciary cannot identify and address trends
                affecting its rent costs. Obtaining and analyzing information on
                rent costs and space use would give the judiciary a better
                understanding of the reasons for rent increases and help guide
                its decisions about space use, especially as the judiciary plans
                to continue to expand into more new courthouses after its
                moratorium expires at the end of fiscal year 2006. As previously
                mentioned (see comment 9), until our review, both GSA and the
                judiciary were not fully aware of the extent to which energy and
                security costs had driven rent increases. We believe that the
                benefits of analyzing cost data to better
            2. manage those costs is a basic managerial principle in government
                and business.
    3. AOUSC said that we should recommend that GSA provide all data that
           will help the judiciary to identify mistakes in rent bills. We agree
           that data accuracy and accountability are important and recommended
           that the judiciary work with GSA on tracking changes in rent. We
           discussed the issue of GSA billing errors with an official in GSA's
           Office of the Inspector General (OIG). This official said that OIG has
           begun work looking into GSA rent billing errors in response to AOUSC's
           concerns. We agreed to discuss our findings with OIG staff after the
           completion of our review.
    4. AOUSC said that it is possible that some of the growth in the appeals
           courts square footage may be attributed to library space, previously
           assigned to the district courts. AOUSC raised this issue for the first
           time in these official comments. Consequently, we did not formally
           evaluate the coding of judiciary space at that level, and it is not
           clear from the AOUSC's statement when the recoding occurred or how
           much space was affected. However, we still believe that establishing
           criteria for the number of appeals courtrooms and chambers is needed
           in order to better control the amount of space allocated to them.
    5. AOUSC said that it is integral to an understanding of square footage
           growth that we explain there are many factors outside the judiciary's
           control that drive the courts' space needs. Our draft report addressed
           workload issues, as does our final report. See comment 8.
    6. AOUSC indicates that accurate data is important, and we agree. We
           noted in the draft report that one of the ways trend data can be
           useful is in identifying rent billing errors.
            1. In responding to our second recommendation regarding incentives
                for efficient space management, AOUSC says that the
                recommendation is based on the false premise that space decisions
                are within the control of the local districts and circuits. We
                disagree. While the law specifies some of the locations where the
                judiciary holds regular sessions of court, the amount of space
                occupied at each location is within the judiciary's discretion.
                According to AOUSC, Congress has recognized the importance of
                local decision making on space matters by providing circuit
                judicial councils-the entity that has first-hand knowledge of
                local caseload and other trends important to the judiciary's
                space needs-with the statutory authority to determine the need
                for space accommodations. AOUSC also states that one could argue
                that there is no need for the Tacoma facility
            2. because there is a large facility in Seattle and notes that
                Congress chooses some of the locations at which the judiciary
                operates, however, our draft report does not address the relative
                merits of locating the court in Tacoma but only the challenges
                associated with using it efficiently.
    7. AOUSC said that the report should recognize that there are interests
           outside the judiciary that can influence space decisions. We believe
           that the draft report did this. For example, the conclusion section of
           the draft report stated that "to some extent, the judiciary's space
           uses are mandated, and some associated rent costs are beyond the
           judiciary's control." In addition, we have added information on other
           challenges identified by the judiciary that either related to ongoing
           disagreements with GSA that we did not evaluate or are addressed in
           our report in other places.
    8. AOUSC said that it is working to create incentives by establishing
           budget caps for space rental costs. This concept was approved on March
           14, 2006, and many of the details have yet to be determined. This
           action has the potential to be an effective tool in space management.
           As AOUSC points out, it faces serious implementation challenges. We
           agree.
    9. AOUSC said that GAO had committed to deleting the recommendation that
           the judiciary should establish a policy for senior district judges'
           courtrooms. We disagree. AOUSC officials pointed out in a meeting that
           we have acknowledged in the past that the judiciary has a policy
           encouraging courtroom sharing among senior district judges. Our
           recommendation would enhance this policy by providing specific
           criteria on when such sharing could take place. We agreed in a
           discussion of this issue with AOUSC to consider whether the
           judiciary's existing policy, which only encourages sharing, addressed
           this issue. We concluded that the policy of granting flexibility to
           the circuits and districts regarding senior district judges does not
           represent nationwide criteria for when and how courtroom sharing for
           senior district judges should occur.
            1. AOUSC said that theappeals courtrooms are not a significant part
                of the judiciary's space inventory and that we do not have
                sufficient knowledge to make such a recommendation. We believe
                that the appeals court is a significant part of judiciary's space
                inventory. Specifically, our report found that in fiscal year
                2005, the court of appeals represented 11 percent of the
                judiciary's overall square footage, or 4.4 million square feet,
                which includes courtrooms, chambers, and support space. We also
                found that the appellate courts' share of square footage occupied
                by the judiciary had grown between fiscal years 2000 and 2005.
                And, as discussed in
            2. comment 13, AOUSC said that the team neither spoke with an
                appellate judge nor asked the judiciary about the appellate
                courtrooms usage practice or needs. In several locations, we met
                with Circuit level officials with responsibility over space-use
                decisions for the appeals courts in their circuits and obtained
                information about the appellate courts' need for space. In
                addition, we reviewed the long-range facility plans, which
                include information on the appellate courts' need for space. We
                also interviewed numerous district, senior district, bankruptcy,
                and magistrate judges.
    10. AOUSC said that the judiciary is committed to updating its space
           standards on a regular basis. We support this effort.
    11. AOUSC said that backfilling old courthouses can have benefits to FBF.
           We agree that vacant buildings of which GSA cannot dispose creates a
           drain on FBF, and we have added context to the report to reflect that.
    12. AOUSC said that a problem with the draft report is that it does not
           contain a fair, objective, and thoughtful assessment of the
           judiciary's request for rent relief. An assessment of the judiciary's
           request for rent relief was not one of the objectives of this study
           (see comment 1). We have provided additional contextual information on
           the growth in the judiciary's workload to our report.
    13. In a letter enclosed in AOUSC's comments, the Chief Judge of the U.S.
           District Court of Maryland said that the four magistrate courtrooms in
           the Edward A. Garmatz Federal Building and U.S. Courthouse were
           ill-suited to handle the drug and gun cases that characterize a
           big-city federal docket. We added context to the report indicating
           that judiciary officials said that the magistrate judge hearing-room
           size poses security concerns because of the lack of separation between
           individuals in custody, the victims, law enforcement officers, judges,
           and the lawyers (see comment 47).
            1. The Chief Judge said that he did not know how we concluded that
                the lack of courtrooms in the Baltimore Courthouse were used to
                increase its priority for having a new courthouse built in
                Baltimore. We obtained the project scoring worksheet for
                Baltimore that indicated that four magistrate judges are
                "impacted," meaning that they do not have courtrooms. Each
                impacted judge increases a district's urgency score for
                justifying a new courthouse. Four magistrate judges are impacted
                because the district has chosen to use four magistrate courtrooms
                for storage. This appears inconsistent with the Design Guide,
                which states, "Differences
            2. between space in the existing facility and the criteria in the
                Design Guide are not justification for facility alteration and
                expansion."
    14. The Chief Judge said that our draft report portrays the court's space
           decisions as irrational and arbitrary and that we did not study the
           type of proceedings that magistrate judges handle. We disagree that
           our report portrays the judiciary in this way. Our report states that
           the district chose not to use the courtrooms because they do not meet
           Design Guide standards, and we have added that the judiciary believes
           they pose security concerns (see comment 43). However, the size of
           courtrooms is not listed as a security risk factor for increasing the
           priority for having a new courthouse built. In addition, as part of
           our review, we reviewed the role of magistrate judges and interviewed
           numerous judges, district clerks of court, and circuit officials that
           were knowledgeable of the role of magistrate judges.

    Appendix IV: GAO Contact and Staff Acknowledgments

    Mark Goldstein (202) 512-2834

      GAO Contact

    In addition to the individual named above, Keith Cunningham, Randy

      Staff

    DeLeon, Bess Eisenstadt, Brandon Haller, Grant Mallie, Susan
    Michal-Acknowledgments Smith, Joshua Ormond, Elizabeth Repko, David
    Sausville, and Gary Stofko made key contributions to this report.

    Related GAO Products

    Questions for the Record: Hearing on the Judiciary's Ability to Pay for
    Current and Future Space Needs, GAO-05-941R . Washington, D.C.: July 27,
    2005.

    Courthouse Construction: Overview of Previous and Ongoing Work,
    GAO-05-838T . Washington, D.C.: June 21, 2005.

    Courthouse Construction: Information on Project Cost and Size Changes
    Would Help to Enhance Oversight, GAO-05-673 . Washington, D.C.: June 30,
    2005.

    L.A. Federal Courthouse Project: Current Proposal Addresses Space Needs,
    but Some Security and Operational Concerns Would Remain, GAO-05-158 .
    Washington, D.C.: December 20, 2004.

    Courthouse Construction: Information on Courtroom Sharing, GAO-02- 341 .
    Washington, D.C.: April 12, 2002.

    Federal Judiciary Space: Update on Improvement of the Long-Range Planning
    Process, GAO-01-308R . Washington, D.C.: January 25, 2001.

    Courthouse Construction: Sufficient Data and Analysis Would Help Resolve
    the Courtroom-Sharing Issue, GAO-01-70 . Washington, D.C.: December 14,
    2000.

    General Services Administration: Comparison of Space Acquisition
    Alternatives-Leasing to Lease-Purchase and Leasing to Construction,
    GAO/GGD-99-49R . Washington, D.C.: Mar. 12, 1999.

    Courthouse Construction: Better Courtroom Use Could Enhance Facility
    Planning and Decisionmaking, GAO/GGD-97-39 . Washington, D.C.: May 19,
    1997.

    Courthouse Construction: Information on the Use of District Courtrooms at
    Selected Locations, GAO/GGD-97-59R . Washington, D.C.: May 19, 1997.

    Courthouse Construction: Improved 5-Year Plan Could Promote More Informed
    Decisionmaking, GAO/GGD-97-27 . Washington, D.C.: December 31, 1996.

    Federal Courthouse Construction: More Disciplined Approach Would Reduce
    Costs and Provide for Better Decisionmaking, GAO/T-GGD-96-19 . Washington,
    D.C.: November 8, 1995.

    General Services Administration: Opportunities for Cost Savings in the
    Public Buildings Area, GAO/T-GGD-95-149 . Washington, D.C.: July 13, 1995.

    Federal Judiciary Space: Progress Is Being Made to Improve the Long-Range
    Planning Process, GAO/T-GGD-94-146 . Washington, D.C.: May 4, 1994.

    Federal Buildings Fund Limitations, GAO/GGD-93-34R . Washington, D.C.:
    Apr. 5, 1993.

    Federal Office Space: Increased Ownership Would Result in Significant
    Savings, GAO/GGD-90-11 . Washington, D.C.: Dec. 22, 1989.

    (543132)

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