General Services Administration: Improvements Needed in Managing
Delegated Authority of Real Property Activities
(05-SEP-07, GAO-07-1000).						 
                                                                 
The General Services Administration (GSA) issues different types
of delegations, whereby agencies may request authority to
perform certain real property activities, such as leasing space
and maintaining property. Effective management of the program is
critical to ensuring that federal dollars are well spent and
adequate workspace is provided. GAO was asked to determine (1)
what real property authority GSA has delegated to its tenant
agencies, (2) what policies GSA used to manage delegated
authority, and (3) reasons the tenant agencies requested
delegated authority. GAO reviewed the law, federal regulations,
and GSA policies relating to six types of delegated authority
and interviewed GSA officials and officials from six select
tenant agencies. GAO analyzed GSA data on delegations issued
from fiscal years 1996 to 2006.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-1000					        
    ACCNO:   A75651						        
  TITLE:     General Services Administration: Improvements
Needed in Managing Delegated Authority of Real Property
Activities							 
     DATE:   09/05/2007 
  SUBJECT:   Cost effectiveness analysis
             Data integrity
             Federal procurement
             Federal property
             Federal property management
             Federal regulations
             Real estate leases
             Real property
             Tenants				 

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GAO-07-1000

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Report to the Ranking Member, Committee on Homeland Security and 
Governmental Affairs, U.S. Senate: 

United States Government Accountability Office: 

GAO: 

September 2007: 

General Services Administration: 

Improvements Needed in Managing Delegated Authority of Real Property 
Activities: 

GSA Delegations of Real Property Activities: 

GAO-07-1000: 

GAO Highlights: 

Highlights of GAO-07-1000, a report to Ranking Member, Committee on 
Homeland Security and Governmental Affairs, U.S. Senate 

Why GAO Did This Study: 

The General Services Administration (GSA) issues different types of 
delegations, whereby agencies may request authority to perform certain 
real property activities, such as leasing space and maintaining 
property. Effective management of the program is critical to ensuring 
that federal dollars are well spent and adequate workspace is provided. 
GAO was asked to determine (1) what real property authority GSA has 
delegated to its tenant agencies, (2) what policies GSA used to manage 
delegated authority, and (3) reasons the tenant agencies requested 
delegated authority. GAO reviewed the law, federal regulations, and GSA 
policies relating to six types of delegated authority and interviewed 
GSA officials and officials from six select tenant agencies. GAO 
analyzed GSA data on delegations issued from fiscal years 1996 to 2006. 

What GAO Found: 

GSA delegated authority for operations and maintenance, utility 
services, lease management, administrative contracting officer, repair 
and alteration activities, and real estate leasing to its tenant 
agencies. However, GSA did not have complete or consistent data for key 
delegations. GSA officials believe the lack of complete data for repair 
and alteration delegations up to $100,000 was not problematic because 
they involve relatively small projects with limited program risk, and 
GSA has not noticed a pattern of problems that would warrant increased 
oversight. Regarding delegations of authority for real estate leasing, 
two offices within GSA collected separate sets of data. One office 
collected data on the number of general purpose lease delegations 
issued while another collected data on the number of lease delegations 
exercised for three different types of lease delegations (including 
general purpose, categorical, and special purpose). One office said its 
data are likely an undercount, and the different sets of data have not 
been reconciled. GSA is currently implementing several changes to 
improve its data collection for lease delegations and will issue 
separate oversight procedures that include a requirement to reconcile 
the two sources of lease delegation data. However, it is unclear when 
the oversight procedures will be issued. It is important to have 
accurate data on lease delegations because these delegations appear to 
be used more frequently than other delegation types. Federal agencies 
using these delegations may lack experience in acquiring office space, 
which could result in the government not receiving the best deal. 

We found that GSA had written policies and procedures for managing the 
six types of delegations we reviewed, but the guidance was not always 
current. GSA officials acknowledged the need to update some of its 
guidance and said the updates are in process, but it is unclear when 
these updates will be finalized. Further, GSA officials stated they did 
not always use mandated cost-effectiveness criteria when deciding to 
delegate authority for certain delegations due, in part, to staffing 
constraints. In addition, the procedures used for assessing cost-
effectiveness were not always included in written guidance. The lack of 
updated guidance and limited use of mandated criteria inhibits GSAï¿½s 
ability to manage its delegations and determine if they are in the best 
interests of the government. 

According to the six tenant agencies we interviewed, the main reasons 
agencies sought delegations were the ability to complete their 
delegated real property activities in a timely manner and prioritize 
their own service requests, particularly in those cases where GSAï¿½s 
knowledge and expertise were less critical. Most of the six agencies we 
contacted plan to seek delegations in the future. 

What GAO Recommends: 

GAO recommends that the Administrator of GSA (1) develop written 
procedures for reviewing the different sources of its lease delegation 
data to identify and determine an accurate count of the leases awarded 
and (2) update the guidance for managing delegations, including 
procedures for assessing the cost-effectiveness of certain delegations. 
In response, GSA agreed with the reportï¿½s findings and recommendations 
and stated it will use them to improve its delegations programs. GSA 
also provided written technical comments which we incorporated. 

[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1000]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Kay E. Brown (202) 512-
7215, [email protected]. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

GSA Delegated Most Types of Real Property Authority but Did Not Have 
Consistent or Complete Data for Certain Delegated Activities: 

GSA's Written Policies and Procedures for Managing Certain Delegations 
Were Not Always Current, and the Agency Did Not Always Use Mandated 
Cost Effectiveness Criteria: 

Agencies Primarily Request Delegated Authority to Receive Faster 
Service and Most Said They Plan to Seek Delegations in the Future: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Comments from the General Services Administration: 

Tables: 

Table 1: Description of the Types of Real Estate Leasing Authority 
Delegation: 

Table 2: Number of Delegations to GSA's Tenant Agencies from Fiscal 
Years 1996 - 2006: 

Table 3: Guidance Containing Policies and Procedures by Type of 
Delegated Authority: 

Table 4: GSA's Use of Mandated Cost-Effectiveness Criteria When 
Deciding to Delegate: 

Table 5: Agencies We Contacted with the Most Delegations in Each 
Category: 

Figures: 

Figure 1: Number of Delegations of Operations and Maintenance Authority 
by Agency, from Fiscal Years 1996 - 2006: 

Figure 2: Number of Delegations of Utility Services Authority by 
Agency, from Fiscal Years 1996 - 2006: 

Figure 3: Number of Delegations of Administrative Contracting Officer 
Authority by Agency, from Fiscal Years 2000 - 2006: 

Figure 4: Comparison of PBS and OGP Lease Delegation Data for Fiscal 
Years 1996 - 2006: 

Abbreviations: 

DOC: Department of Commerce: 

DOD: Department of Defense: 

EPA: Environmental Protection Agency: 

GSA: General Services Administration: 

OGP: Office of Governmentwide Policy: 

HHS: Department of Health and Human Services: 

DHS: Department of Homeland Security: 

DOI: Department of Interior: 

DOJ: Department of Justice: 

PBS: Public Buildings Service: 

SSA: Social Security Administration: 

United States Government Accountability Office: 

Washington, DC 20548: 

September 5, 2007: 

The Honorable Susan M. Collins: 
Ranking Member: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

Dear Senator Collins: 

The General Services Administration (GSA) serves as the federal 
government's landlord and designs, builds, manages, and leases the 
facilities supporting the needs of other federal agencies throughout 
the government. Although GSA is responsible for managing over 8,000 
government-owned and leased buildings, GSA's customer agencies may 
request authority to perform for themselves certain real property 
activities, such as leasing and maintaining their own space. GSA can 
delegate the requested authority to the agencies. For example, in 1996, 
GSA began a program to offer what are known as general purpose lease 
delegations.[Footnote 1] Under this program, called "Can't Beat GSA 
Leasing," federal agencies have the choice of using GSA as their 
leasing agent or assuming responsibility of their own leasing. The 
program was an outgrowth of GSA's commitment to streamline its leasing 
operations, respond to the government's changing needs, and address 
recommendations from client agencies. When GSA delegates its real 
property authority, the delegations require the agencies to comply with 
the applicable laws, regulations, and terms of the delegations. Under 
the delegations, GSA can review the agency's performance to determine 
whether the agency is meeting its responsibilities. If federal agencies 
do not perform their delegated responsibilities efficiently, they 
could, for example, pay more than GSA would charge for space, provide 
substandard space for their employees, or damage the quality or value 
of the space. Effective management of its delegations is critical for 
GSA to help ensure that federal dollars are well-spent and adequate 
workspace is provided for federal employees. 

Given your interest in GSA's use of real property delegations of 
authority, you asked us to determine (1) what real property authority 
GSA has delegated to its tenant agencies, (2) what policies and 
procedures GSA used to manage delegated real property authority, and 
(3) reasons the tenant agencies requested delegated authority. To meet 
these objectives, we reviewed the law, federal management regulations, 
and GSA's existing policies and procedures for delegating real property 
authority. We also interviewed GSA officials from the Public Buildings 
Service (PBS), which is responsible for managing the delegations. In 
addition, we interviewed officials from GSA's Office of Governmentwide 
Policy (OGP), which provides oversight for delegations of real estate 
leasing authority. We limited our review to the types of delegations 
issued to and exercised by GSA's top 10 customers (its tenant agencies) 
between fiscal years 1996 to 2006.[Footnote 2] Delegations are issued 
when GSA grants authority to another agency to perform real property 
activities and exercised when the agency actually uses the authority. 
Further, we interviewed six tenant agencies with the highest number of 
delegations to obtain information on their views and experiences with 
the delegations. These six agencies are the Departments of Commerce, 
Defense, Interior, and Justice; the Social Security Administration, and 
the Environmental Protection Agency (EPA). We also contacted Judiciary 
officials from the Administrative Office of the U.S. Courts to discuss 
their decision to terminate certain delegations. In addition, we 
obtained data from PBS and OGP on delegations issued and exercised. We 
conducted data reliability testing and determined that the data used in 
this report were sufficiently reliable for our purposes. A more 
detailed discussion of our scope and methodology appears in appendix I. 
We performed our review from August 2006 through June 2007 in 
accordance with generally accepted government auditing standards. 

Results in Brief: 

GSA delegated authority for operations and maintenance, utility 
services, lease management, administrative contracting officer 
activities, repair and alterations, and real estate leasing to its 
tenant agencies; however, GSA did not have complete or consistent data 
for certain delegations of its authority. GSA generally requires 
agencies to seek its approval before using delegations of real property 
authority. However, GSA is required by law to issue delegations to 
requesting agencies for repair and alteration projects in public 
buildings that are not expected to exceed $100,000; in leased space, 
GSA has issued a standing delegation under its general authority for 
these types of projects. Additionally, GSA issued standing delegations 
to allow agencies to enter into certain types of leases without having 
to first obtain GSA's approval. GSA has collected data on the number of 
delegations of authority for operations and maintenance, utility 
services, lease management, administrative contracting officer 
activities, and repair and alterations that exceed $100,000. It has not 
collected data on delegations for repair and alterations with a value 
up to $100,000. GSA officials told us they did not collect data for 
repair and alterations delegations up to $100,000 because these 
projects are relatively small with limited program risk, and the GSA 
regional offices would identify and report any potential problems to 
the central office. The officials added that they had not seen a 
pattern of problems that would indicate a need for more oversight of 
repair and alteration delegations that do not exceed $100,000. 
Regarding real estate lease delegation data, in recent years, two 
offices within GSA collected separate sets of data. PBS collected data 
on the number of general purpose lease delegations issued while OGP 
collected data on the number of leases awarded using three types of 
lease delegations--general purpose, categorical, and special purpose. 
Although OGP began collecting data in an oversight role for PBS 
activities, OGP officials told us its data are likely an undercount and 
the two different sets of data have not been reconciled. It is 
important to have accurate data on delegations of real estate leasing 
authority because these delegations appear to be used more frequently 
than other delegation types. Federal agencies using these delegations 
may lack experience in acquiring office space, which could result in 
offices being housed in substandard buildings and the government not 
receiving the best deal. GSA is implementing several changes to improve 
its data collection for lease delegations, but guidance has not yet 
been issued to address procedures for reviewing the various sources of 
lease delegation data and developing an accurate count of leases 
awarded using the delegations. According to GAO's Standards for 
Internal Controls, managers need program data to determine whether they 
are meeting their agencies' goals for accountability for effective and 
efficient use of resources. Without accurate data on the number of 
leases awarded using all three types of lease delegations, GSA is 
missing an important management control to evaluate whether the 
delegation of real estate leasing authority is operating as intended. 

GSA had written policies to manage all six types of delegations we 
reviewed; however, policies and procedures in certain documents were 
not current, and GSA did not always use mandated criteria when deciding 
whether to delegate real property authority. Specifically, the 
delegations desk guide, which is intended as a reference guide for 
those implementing GSA delegations, and the customer guide for real 
property were both out of date. The lack of updated guidance could 
limit GSA's ability to manage its delegations effectively. In addition, 
GSA did not always use mandated criteria--namely determining whether a 
delegation would be cost effective for the government--when deciding to 
delegate real property authority. GSA used these mandated criteria when 
delegating utility services and for the most recent delegations of 
individual repair and alteration authority above $100,000 and 
operations and maintenance authority. But all of the procedures used 
for assessing the cost-effectiveness of delegations of repair and 
alteration authority that exceed $100,000 and operations and 
maintenance authority were not included in GSA's written guidance. 
Moreover, GSA did not use the mandated criteria when delegating real 
estate leasing authority, including general purpose and special purpose 
leases up to 2,500 square feet, and administrative contracting officer 
authority. GSA is updating its guidance for delegations of general 
purpose leasing authority to include procedures for assessing cost- 
effectiveness. It is also limiting the use of delegations of 
administrative contracting officer authority because, in implementation 
studies, GSA determined these delegations were not cost effective. 
Finally, while GSA could not determine if it used mandated criteria 
when delegating lease management authority, officials said that 
delegations of lease management authority have limited financial risk. 
The absence of written guidance for procedures used to assess the cost-
effectiveness of operations and maintenance delegations, individual 
repair and alteration delegations above $100,000, and general purpose 
leasing delegations and special purpose leasing delegations that exceed 
2,500 square feet could limit GSA's ability to determine if delegations 
are in the best interests of the government. 

Of the six tenant agencies we contacted that had delegated real 
property authority, most cited faster service as the main reason for 
seeking the delegations. For example, officials from one agency told us 
they requested repair and alterations delegations because they needed 
to expedite the installation of blast mitigation material on windows in 
GSA-controlled space to be compliant with increased security 
requirements. Similarly, officials from two other agencies told us they 
requested delegated leasing authority to provide a more timely response 
to specific needs in selected buildings. We also heard from agencies 
that said the delegated administrative contracting officer authority 
and operations and maintenance authority gave them increased control 
and flexibility to prioritize and fulfill agency needs. GSA officials 
told us that in some cases delegated authority can provide greater 
efficiency or allow for timelier service, as with some delegations of 
operations and maintenance authority. However, in other cases the 
officials do not believe that delegations allow for faster service, 
such as with delegations of repair and alteration that exceed $100,000 
and real estate leasing authority. GSA's view of the various types of 
delegations is that it allows for greater efficiency in use of federal 
contracting officer authority. Most of the agencies told us they plan 
to seek delegations of real property authority in the future. 

To improve GSA's ability to oversee the various delegated authorities, 
we recommend that the Administrator of GSA (1) develop written 
procedures for reviewing the different sources of its lease delegation 
data to identify and determine an accurate count of the leases awarded 
using all three types of leasing delegations and (2) update the 
guidance for managing all delegations, including procedures for 
assessing the cost-effectiveness of individual repair and alteration 
delegations above $100,000, operations and maintenance delegations, and 
general purpose leasing delegations and special purpose leasing 
delegations that exceed 2,500 square feet. 

We provided a draft of this report to GSA for comment. In response, GSA 
agreed with the report's findings and recommendations and stated it 
will use them to improve its delegations programs. GSA also provided 
written technical comments, which we incorporated as appropriate. See 
appendix II for GSA's written comments. 

Background: 

Congress created GSA in 1949 through the Federal Property and 
Administrative Services Act to serve as a centralized property 
management agency with one of its responsibilities to provide space to 
federal agencies as economical as possible. The GSA Administrator may 
delegate and may authorize successive redelegations of the real 
property authority vested in the Administrator to any federal 
agency.[Footnote 3] Federal agencies must exercise delegated real 
property authority and functions according to the parameters described 
in each delegation of authority document, and the agencies may only 
exercise the authority of the Administrator that is specifically 
provided within the delegation of authority.[Footnote 4] GSA officials 
told us the ability of the GSA Administrator to delegate real property 
authority is a tool provided by Congress to enable GSA to carry out its 
various real property responsibilities. The delegations are not managed 
as a single program, rather the various delegations, once granted, are 
managed and administered in the appropriate PBS business line. 
According to federal regulations,[Footnote 5] GSA may delegate 
authority to federal agencies to conduct the following 
activities:[Footnote 6] 

Real estate leasing authority: This authority allows agencies to 
perform all functions necessary to acquire leased space, including 
procurement and administering, managing and enforcing the leases. 
Agencies have the option to use one of three types of delegations of 
real estate leasing authority granted by the GSA Administrator: general 
purpose, categorical, and special purpose.[Footnote 7] See table 1 for 
a description of the types of real estate leasing authority 
delegations. 

Table 1: Description of the Types of Real Estate Leasing Authority 
Delegation: 

Delegation type: General purpose leasing; 
Description: A standing delegation, which was established in September 
1996, that authorizes federal agencies to perform all functions related 
to the leasing of general purpose space for a term of up to 20 years. 

Delegation type: Categorical leasing; 
Description: A standing delegation of authority, which was established 
in June 1974, that authorizes federal agencies to acquire certain types 
of space for particular agency activities, such as military recruiting 
offices and space for antennas, depots and laundries for a term of up 
to 20 years. Individual leases entered into under this delegation do 
not require GSA approval if they are below the prospectus level and do 
not include parking.[A]. 

Delegation type: Special purpose leasing; 
Description: Twelve federal agencies have a standing delegation, which 
was established in June 1974, to lease their own special purpose space 
for a term of up to 20 years subject to any limitations specified in 
the delegation. Special purpose leases up to 2,500 square feet do not 
require GSA approval. 

Source: GAO analysis of information provided by GSA. 

[A] A prospectus is a justification for a proposed construction, lease, 
or alteration project (which includes an alteration to a leased 
building). A prospectus for a proposed lease is submitted when the cost 
exceeds a legislatively established threshold, which is $2.54 million 
for fiscal year 2007, and includes information on the project's size, 
cost, location, and other features. For alterations to leased 
buildings, the prospectus threshold is one-half the prospectus 
threshold for a lease. An agency with delegated leasing authority 
analyzes each lease to determine whether it needs a prospectus. GSA 
then prepares a prospectus in consultation with the agency and submits 
the prospectus to the appropriate House and Senate authorizing 
committees. 

[End of table] 

In May 2005, GSA issued guidance that reemphasized and modified certain 
procedures associated with the use of the general purpose, categorical, 
and special purpose leasing delegations. GSA requires agencies to meet 
several general conditions to use the real estate leasing authority 
delegations, including (1) the agency must receive written confirmation 
from the appropriate Assistant Regional Administrator that suitable 
government-controlled space is not available before relocating 
government employees from GSA controlled space; (2) the average annual 
rent is below the prospectus level, as previously described; (3) agency 
staff using the authority must meet the relevant contracting experience 
and training requirements; (4) the agency must acquire and use the 
space in accordance with all applicable laws and regulations for 
federal space acquisition activities; (5) the agency must have the 
capacity to perform all delegated leasing activities; and (6) the 
agency must provide semi-annual reports to OGP on April 30 and October 
31 that detail the leasing activities conducted under the delegations. 
GSA retains the right to review each lease and the capacity of the 
agency to perform the delegation and, if necessary, to revoke the 
delegation. Agencies using the general purpose leasing delegation are 
also required to provide the following information to the appropriate 
GSA regional office: upon award of the lease, provide notification of 
the award date and location of the property, including documentation 
that the negotiated rental rate is within the prevailing market rental 
rate for the class of building leased and provide 18 months advance 
notice of lease expiration if there is a continuing need for the space 
and the agency wishes to use the delegation again.[Footnote 8] 

Administrative contracting officer authority: This authority allows the 
agencies to manage the administration of one or more lease contracts 
awarded by GSA and perform such duties as paying and withholding rent 
and modifying lease provisions that do not change the length of the 
lease or the amount of space under the lease.[Footnote 9] To obtain 
this delegation, an agency must occupy at least 90 percent of the 
building's GSA-controlled space or have the written concurrence of 100 
percent of rent-paying occupants covered under the lease, and have the 
technical capability to perform the lease. Agencies seeking a 
delegation must submit a written request to the regional headquarters 
where the building is located. If PBS staff at the region concurs with 
the request, an agreement is drafted for the delegation of 
administrative contracting officer authority and sent to the PBS 
Commissioner and the GSA Administrator for approval. An administrative 
contracting officer delegation lasts until the lease expires, or the 
space reverts to GSA unless the agency or GSA agrees to terminate the 
delegation. 

Lease management authority: This authority allows agencies to manage 
the administration of one or more lease contracts awarded by 
GSA.[Footnote 10] To obtain this delegation, an agency must occupy at 
least 90 percent of the building's GSA-controlled space or have the 
written concurrence of 100 percent of rent-paying occupants covered 
under the lease, and have the technical capability to perform the 
lease. Agencies seeking a delegation must submit a written request to 
the regional headquarters where the building is located. If PBS staff 
at the region concurs with the request, a memorandum of understanding 
is drafted and sent to the PBS Commissioner and the GSA Administrator 
for approval. The term of the delegation lasts until the lease expires 
and either agency is free to terminate at any time. In addition to this 
process, GSA's contracting officers can delegate lease management 
authority to qualified individuals, upon request, for specific leases. 

Operations and maintenance authority: This authority, which was 
established in 1983, allows agencies to manage and operate GSA-owned 
and leased buildings on a day-to-day basis. Delegated functions may 
include among others, maintenance, recurring repairs, and minor 
alterations. To obtain this type of delegation, an agency must occupy 
at least 90 percent of the space in the GSA-controlled facility or (1) 
have the concurrence of 100 percent of the rent-paying occupants to 
perform these functions, (2) demonstrate that it can perform the 
delegated responsibilities, and (3) document that the delegation will 
be cost effective. Agencies seeking this authority must first notify 
the region where the space is located by submitting a formal request. 
After regional staff has reviewed the request, it is forwarded to the 
GSA Administrator for a final decision. The Administrator can then 
grant or decline the request, with concurrence from applicable program 
offices. A delegation of authority generally lasts until the space is 
returned to GSA or the space is no longer needed. Delegation agreements 
allow for either the agency or GSA to terminate a delegation in full or 
in part.[Footnote 11] 

Repair and alteration project authority: This authority allows agencies 
to perform repair and alteration projects. With respect to repair and 
alteration delegations, there is a statute relating to the delegation 
of repair and alteration projects of $100,000 or less. This statute 
provides that in accordance with standards prescribed by the GSA 
Administrator, the Administrator shall delegate requests to an agency 
for projects in public buildings when the estimated cost does not 
exceed $100,000.[Footnote 12] Under GSA's general authority to delegate 
its real property activities at 40 U.S.C. ï¿½ 121, in January 1997, the 
GSA Administrator granted blanket delegation authority in leased space 
for repair and alteration projects up to $100,000 for an indefinite 
term.[Footnote 13] According to GSA officials, the regions are 
responsible for managing these delegations. The statute further 
provides that the GSA Administrator may delegate to an agency projects 
that are estimated to cost more than $100,000 when the Administrator 
determines the delegation promotes efficiency and economy. According to 
the Federal Management Regulation, GSA can delegate individual 
alteration projects greater than $100,000 when the agency demonstrates 
the ability to perform the delegated repair and alteration project 
responsibilities and when such a delegation promotes efficiency and 
economy.[Footnote 14] According to GSA officials, individual requests 
for delegations of repair and alteration project authority greater than 
$100,000, which are rarely received by GSA, are granted only by the 
Administrator of GSA.[Footnote 15] The scope of the intended project 
must be included in an agency's request for a delegation and is 
reviewed first by the relevant GSA region and then by PBS central 
office staff before being submitted to the Administrator with a 
recommendation either to grant or refuse authorizing the 
delegation.[Footnote 16] The term of delegation is for the duration of 
the project and either party can terminate the delegation at any time. 
If a delegated repair and alteration project is expected to exceed the 
prospectus level, GSA will submit the proposed project to its 
authorizing committees for review and approval.[Footnote 17] 

Utility services authority: This authority allows agencies to negotiate 
and execute utility services contracts for periods of more than 1 year 
but not exceeding 10 years for their use and benefit.[Footnote 18] 
Agencies also have the authority to intervene in utility rate 
proceedings to represent the consumer interests of the federal 
government, if so provided in the delegation of authority. Agencies 
seeking utility delegations are required to submit their request to 
PBS's Energy Center of Expertise, which procures utility services for 
GSA's customer agencies. The requests must include a certification from 
the acquiring agency's senior procurement executive that the agency has 
an established acquisition program, personnel technically qualified to 
deal with specialized utilities problems, and the ability to accomplish 
certain contracting requirements. The Energy Center reviews the request 
for compliance with the requirements and conducts an internal analysis 
of federal utility needs in the specified area. Upon approval of the 
agency's qualifications to perform the delegation, and a determination 
that there is minimal if any additional federal utility needs in the 
service area, a formal delegation of authority for a utility 
acquisition letter is then prepared for the GSA Administrator's 
signature. 

GSA Delegated Most Types of Real Property Authority but Did Not Have 
Consistent or Complete Data for Certain Delegated Activities: 

GSA delegated authority for operations and maintenance, utility 
services, lease management, administrative contracting officer 
activities, repair and alterations, and real estate leasing to its 
tenant agencies. However, as shown in table 2, GSA did not have 
complete or consistent data on the number of delegations of repair and 
alteration project authority up to $100,000 and real estate leasing 
authority. GSA generally requires agencies to seek its approval before 
using delegations of real property authority. However, GSA is required 
by law to issue delegations to requesting agencies for repair and 
alteration projects in public buildings that are not expected to exceed 
$100,000; in leased space, GSA has issued a standing delegation under 
its general authority for these types of projects. Additionally, GSA 
issued standing delegations to allow agencies to enter into certain 
types of leases without having to first obtain its approval. GSA 
officials told us that they believe the lack of complete data for 
delegations of repair and alteration project authority up to $100,000 
was not problematic. GSA said these delegations are for small projects 
with limited program risk; and according to GSA officials, the GSA 
regional offices would identify and report any potential problems to 
the central office. However, real estate lease delegations involve more 
risk, and without accurate data on the number of leases awarded using 
these delegations, GSA is missing an important management control to 
assess their impact. 

Table 2: Number of Delegations to GSA's Tenant Agencies from Fiscal 
Years 1996 - 2006: 

Type of delegated authority: Operations and maintenance; 
Number of delegations to GSA's tenant agencies: 43; 
Years for which data were available: GSA estimated that the majority of 
the delegations were issued on or before 1989 for a term of 5 years and 
subsequently redelegated without a defined term. 

Type of delegated authority: Utility services; 
Number of delegations to GSA's tenant agencies: 52; 
Years for which data were available: 1996- 2006. 

Type of delegated authority: Lease management; 
Number of delegations to GSA's tenant agencies: 16[A]; 
Years for which data were available: 1996-2006. 

Type of delegated authority: Administrative contracting officer; 
Number of delegations to GSA's tenant agencies: 136[A]; 
Years for which data were available: 2000-2006. 

Type of delegated authority: Repair and alteration project; 
Number of delegations to GSA's tenant agencies: 1[B]; 
Years for which data were available: 1996-2006. 

Type of delegated authority: Real estate leasing; 
Number of delegations to GSA's tenant agencies: 594 (delegations 
exercised as reported by OGP, includes all three types); 
Years for which data were available: 1996-2006. 

Type of delegated authority: Real estate leasing; 
Number of delegations to GSA's tenant agencies: 190 (delegations issued 
as reported by PBS, includes only general purpose); 
Years for which data were available: 2001-2006. 

Source: GAO analysis of GSA data. 

[A] This number represents the cumulative number of unique leases with 
this delegation. 

[B] GSA reported one individual repair and alteration delegation over 
$100,000 but did not collect data on blanket repair and alteration 
delegations up to $100,000. 

[End of table] 

Operations and maintenance authority: GSA reported that its tenant 
agencies exercised 43 delegations of operations and maintenance 
authority from fiscal years 1996 to 2006, representing 203 
buildings.[Footnote 19] As shown in figure 1, the Department of Defense 
had the most delegations, representing 84 buildings and approximately 4 
million square feet. 

Figure 1: Number of Delegations of Operations and Maintenance Authority 
by Agency, from Fiscal Years 1996 - 2006: 

[See PDF for image] 

Source: GAO analysis of GSA data. 

[End of figure] 

PBS officials did not have exact issuance dates for these delegations; 
however, they estimated that the majority of the delegations were 
originally issued on or before 1989 for a term of 5 years and 
subsequently redelegated without defined terms. PBS officials said they 
rarely receive requests for new operations and maintenance delegations. 
Since 2000, GSA issued only one new delegation of this type to the 
agencies included in our review. PBS officials also said that they 
rarely decline requests for delegations of operations and maintenance 
authority because PBS works with the agencies to determine that they 
meet the requirements before they formally submit the request. 

Utility services authority: GSA also reported 52 utility services 
delegations from fiscal years 1996 to 2006 to agencies that had custody 
or control of their facilities. As shown in figure 2, the Department of 
Interior had the most delegations, all of which were for remote sites 
of the Bureau of Indian Affairs and the Bureau of Reclamation. 

Figure 2: Number of Delegations of Utility Services Authority by 
Agency, from Fiscal Years 1996 - 2006: 

[See PDF for image] 

Source: GAO analysis of GSA data. 

[End of figure] 

Lease management authority: GSA reported that, for fiscal years 1996 to 
2006, it delegated lease management authority for 16 leases to its 
tenant agencies.[Footnote 20] GSA does not require the regional offices 
to report these delegations to the central office, and the central 
office does not routinely request or monitor information on these 
activities. GSA officials said these delegations are self-correcting -
-meaning the limited authority provided under these delegations is 
controlled by the GSA contracting officer, which minimizes the risk 
that the agency could exceed the authority of the delegation. 
Additionally, GSA officials said they had not seen a pattern of 
problems that would indicate a need for more oversight of these 
delegations. 

Administrative contracting officer authority: GSA reported that, for 
fiscal years 2000 to 2006, it delegated administrative contracting 
officer authority for 136 leases to its tenant agencies.[Footnote 21] 
But GSA did not have data for fiscal years 1996 to 1999 because the 
database used to track these delegations did not have historical data 
before fiscal year 2000. As shown in figure 3, all of the delegations 
went to the Department of Commerce, the Department of Defense, and the 
EPA. In addition, most of the delegated activity was in the National 
Capital Region.[Footnote 22] 

Figure 3: Number of Delegations of Administrative Contracting Officer 
Authority by Agency, from Fiscal Years 2000 - 2006: 

[See PDF for image] 

Source: GAO analysis of GSA data. 

[End of figure] 

Repair and alteration project authority: GSA reported granting one 
individual repair and alteration delegation above $100,000 to the EPA, 
but did not have data for its blanket delegations of repair and 
alteration authority up to $100,000 as these delegations are managed at 
the regional level, and GSA does not require the regional offices to 
report these delegations to the central office. GSA officials said that 
regional staff would report to the central office any significant 
issues or problems resulting from the blanket delegations, and based on 
anecdotal evidence, they have not seen a pattern of problems that would 
indicate a need for more oversight of these delegations. 

Real estate leasing authority: Two separate offices in GSA collect 
disparate sets of data on delegations of real estate leasing authority. 
PBS requires the regional offices to report how many general purpose 
leasing delegation requests are received and how many are issued, which 
may or may not ultimately result in the requesting agency actually 
awarding a lease. PBS reported that, for fiscal years 2001 to 2006, it 
issued 190 lease delegations to its tenant agencies. However, PBS did 
not have data from fiscal years 1996 through 2000 because, according to 
PBS officials, the data were misplaced through various internal 
reorganizations. In addition, PBS did not collect data on categorical 
and special purpose delegations. Agencies are not required to notify 
GSA prior to using the categorical lease delegation, except for leases 
above the prospectus threshold as previously described and leases for 
parking. Special purpose delegations also do not require GSA approval 
unless the space exceeds 2,500 square feet. PBS officials stated that 
they focus their management efforts on the general purpose lease 
delegations because they have the authority to approve or disapprove 
use of this delegation type, whereas agencies can generally use the 
categorical and special purpose lease delegations without GSA approval. 
Lastly, previous reviews of the general purpose lease delegation 
program by OGP found, among other things, several instances where 
federal agencies did not notify the relevant PBS office of its intent 
to exercise the delegation of authority, making it difficult for PBS to 
track these delegations.[Footnote 23] 

The data that PBS has on real estate lease delegations are inconsistent 
with the data that OGP collects. In 1996, OGP was asked to provide an 
oversight role, serving as an "honest broker" between PBS and the 
federal agencies. PBS officials told us the Office of Management and 
Budget (OMB) and Congress, at the time, wanted independent oversight of 
the delegations because they were concerned that agencies may not have 
the expertise to obtain the best deal for the government. They also 
viewed PBS as having an inherent conflict of interest when deciding 
delegations. In other words, OMB and Congress believed that PBS could 
stand to lose a significant amount of its leasing business due to the 
delegations and therefore did not view PBS as an independent overseer 
of the delegation program. According to GSA's guidance on delegations 
of real estate leasing authority, federal agencies are to report to OGP 
every 6 months on their delegated leasing activity for all three types 
of lease delegations.[Footnote 24] OGP reported that GSA's tenant 
agencies entered into 594 leases using the three different leasing 
authorities from fiscal year 1996 through fiscal year 2006.[Footnote 
25] However, OGP said the data likely undercount the number of 
exercised lease delegations because the guidance did not define whether 
agencies were to report all current delegations or only those awarded 
within the 6 months of any given reporting period. In other words, some 
agencies reported only those delegations issued during the 6-month 
period and others reported all current delegations. 

Both PBS and OGP acknowledged that their data were inconsistent, as 
shown in figure 4. OGP and PBS did not review each other's lease 
delegation data to determine an accurate count of the number of leases 
awarded using the real estate leasing delegations. 

Figure 4: Comparison of PBS and OGP Lease Delegation Data for Fiscal 
Years 1996 - 2006: 

[See PDF for image] 

Source: GAO analysis of GSA data. 

[End of figure] 

According to PBS guidance for delegations of real estate leasing 
authority, OGP compares the information that the agencies report 
against delegation information provided by the PBS regions to determine 
any underreporting by agencies. However, an OGP official told us that 
OGP is not required to follow PBS guidance and in fact does not compare 
its data with that provided by PBS. PBS officials acknowledged that OGP 
is not bound by PBS's guidance for delegations of real estate leasing 
authority, but it noted that OGP was involved in drafting the guidance. 

GSA is implementing several changes to improve its data collection for 
lease delegations. First, the Federal Real Property Council[Footnote 
26] accepted OGP's recommendation to add a data field to the 
governmentwide Federal Real Property Profile inventory system to track 
the leasing authority used for space acquisition. Agencies are now 
required to report real property assets by building and to specify 
whether that asset is owned or leased. If the agency designates the 
latter, it now must designate the authority under which the asset is 
leased. According to GSA officials, this requirement is effective for 
fiscal year 2007 and was included in guidance issued in June 2007. The 
information will allow the Federal Real Property Council and GSA to 
better understand the level of delegated leasing that occurs in the 
federal government using the categorical, special purpose, and general 
purpose leasing delegations. Additionally, according to GSA's draft 
leasing guidance that is scheduled to be issued in September 2007, GSA 
will no longer require the biannual reporting to OGP of general 
purpose, categorical, and special purpose lease delegations. In its 
place, OGP will accept the agency submissions for the Federal Real 
Property Profile inventory, which, according to GSA officials, should 
eliminate the agency confusion about the reporting period.[Footnote 27] 
GSA has also committed to implementing recommendations from the August 
2007 Inspector General report on the lease delegation program.[Footnote 
28] 

PBS is also drafting separate oversight procedures for delegations of 
real estate leasing authority. According to PBS officials, the 
procedures will include a requirement to reconcile the two sources of 
lease delegation data: the Federal Real Property Inventory Report and 
PBS. OGP will annually provide a listing of all delegation activity 
from the Federal Real Property Profile database, and PBS will compare 
that information with its centralized records. GSA officials said these 
oversight procedures would be issued in September 2007. 

According to GAO's Standards for Internal Controls, managers need 
program data to determine whether they are meeting their agencies' 
goals for accountability for effective and efficient use of 
resources.[Footnote 29] GSA officials told us that they believe the 
lack of complete data for delegations of repair and alteration project 
authority up to $100,000 was not problematic.[Footnote 30] Repair and 
alteration delegations that do not exceed $100,000 involve what GSA 
considers to be small projects with limited program risk, and any 
potential problems would be identified and reported to the central 
office by the regions. Additionally, GSA officials said they had not 
seen a pattern of problems with these delegations that would indicate a 
need for more oversight. However, based on the data provided, agencies 
use the lease delegations more often than other types of delegations. 
Federal agencies using these delegations may lack experience in 
acquiring office space, which could result in offices being housed in 
substandard buildings and the government not receiving the best deal. 
Without accurate data on the number of leases awarded using the real 
estate leasing delegations, GSA is missing an important management 
control to evaluate whether the delegation of real estate leasing 
authority is operating as intended. 

GSA's Written Policies and Procedures for Managing Certain Delegations 
Were Not Always Current, and the Agency Did Not Always Use Mandated 
Cost-Effectiveness Criteria: 

Although GSA had written policies and procedures for managing all types 
of delegations we reviewed, the policies and procedures in certain 
documents were not always current. In addition, GSA did not always use 
mandated criteria stated in the Federal Management Regulation--namely 
determining whether a delegation would be cost effective for the 
government--when deciding to delegate real property activities. GSA 
said it used mandated criteria when delegating utility services and for 
the most recent delegations of individual repair and alteration 
authority above $100,000 and operations and maintenance authority. 
However, GSA did not use the criteria when delegating real estate 
leasing and administrative contracting officer authority and could not 
determine if it used mandated criteria when delegating lease management 
authority. GSA's procedures for assessing cost-effectiveness were not 
always documented in GSA's written guidance, which could limit GSA's 
ability to determine if the delegations are in the best interests of 
the government in certain cases. 

GSA Policies and Procedures for Managing Certain Delegations Were Not 
Always Current: 

We found that GSA had written policies and procedures for managing all 
types of delegations, but the policies and procedures were not always 
current. GSA's policies and procedures for issuing and managing 
delegations are described in the following documents: 

* Federal regulations and internal GSA policy letters and 
memorandums,[Footnote 31] 

* GSA's "Desk Guide --Delegations of Authority for Real Property 
Management and Operating and Leasing," which states that it "is a 
reference guide on policies, procedures, and practices for individuals 
engaged in implementing the terms and conditions of the General 
Services Administration delegation program and delegation agreements 
for real property management authorities in federally owned and 
operated space." 

* Chapter 8 of GSA's "Customer Guide to Real Property," which, 
according to GSA officials, serves as formal guidance to explain the 
general procedures for issuing the different types of 
delegations,[Footnote 32] and: 

* GSA's "Standard Operating Procedures for Operation and Maintenance of 
Delegated Real Property," which describes the agency's responsibilities 
under a delegation of operations and maintenance authority. 

Table 3 identifies the delegation types and the applicable documents 
that outline the policies and procedures for the delegation. 

Table 3: Guidance Containing Policies and Procedures by Type of 
Delegated Authority: 

Type of delegated authority: Real estate leasing; 
Guidance containing policies and procedures: Regulations and internal 
policy letters and memorandums: [X]; 
Guidance containing policies and procedures: Delegations desk guide: 
[X]; 
Guidance containing policies and procedures: Customer guide: [X]; 
Guidance containing policies and procedures: Standard operating 
procedures: [Empty]. 

Type of delegated authority: Administrative contracting officer; 
Guidance containing policies and procedures: Regulations and internal 
policy letters and memorandums: [X]; 
Guidance containing policies and procedures: Delegations desk guide: 
[X]; 
Guidance containing policies and procedures: Customer guide: [X]; 
Guidance containing policies and procedures: Standard operating 
procedures: [Empty]. 

Type of delegated authority: Lease management; 
Guidance containing policies and procedures: Regulations and internal 
policy letters and memorandums: [X]; 
Guidance containing policies and procedures: Delegations desk guide: 
[X]; 
Guidance containing policies and procedures: Customer guide: [X]; 
Guidance containing policies and procedures: Standard operating 
procedures: [Empty]. 

Type of delegated authority: Operations and maintenance; 
Guidance containing policies and procedures: Regulations and internal 
policy letters and memorandums: [X]; 
Guidance containing policies and procedures: Delegations desk guide: 
[X]; 
Guidance containing policies and procedures: Customer guide: [X]; 
Guidance containing policies and procedures: Standard operating 
procedures: [X]. 

Type of delegated authority: Repair and alteration; 
Guidance containing policies and procedures: Regulations and internal 
policy letters and memorandums: [X]; 
Guidance containing policies and procedures: Delegations desk guide: 
[Empty]; 
Guidance containing policies and procedures: Customer guide: [X]; 
Guidance containing policies and procedures: Standard operating 
procedures: [Empty]. 

Type of delegated authority: Utility service; 
Guidance containing policies and procedures: Regulations and internal 
policy letters and memorandums: [X]; 
Guidance containing policies and procedures: Delegations desk guide: 
[Empty]; 
Guidance containing policies and procedures: Customer guide: [X]; 
Guidance containing policies and procedures: Standard operating 
procedures: [Empty]. 

Source: GAO analysis of information provided by GSA. 

[End of table] 

Our review of the policies and procedures found that the desk guide has 
not been updated to include current guidance for delegations of real 
estate leasing, lease management, repair and alteration, and utility 
services authority. For example, the section on delegations of real 
estate leasing authority did not include the procedures associated with 
the use of the real estate leasing delegations; procedures for 
requesting lease management authority were not explained; and 
delegations for repair and alteration project authority and utility 
services authority were not discussed. In addition, the customer guide 
did not distinguish between blanket repair and alteration authority, 
which can be used for projects up to $100,000 and authority for 
individual repair and alteration projects above $100,000.[Footnote 33] 
As discussed earlier, the approval process for each differs. GSA 
officials acknowledged the need to update the delegations desk guide 
and the customer guide and said the updates are in process. According 
to GAO's Standards for Internal Controls, written policies and 
procedures are control activities that help ensure management's 
directives are carried out and action are taken to control risks. The 
lack of updated guidance could limit GSA's ability to manage its 
delegations effectively. 

GSA Did Not Always Use Mandated Criteria When Deciding to Delegate 
Certain Real Property Activities, and the Procedures Used Were Not 
Always Included in Written Guidance: 

GSA did not always use mandated cost-effectiveness criteria when 
delegating activities, as shown in table 4. 

Table 4: GSA's Use of Mandated Cost-Effectiveness Criteria When 
Deciding to Delegate: 

Type of delegated authority: Utility service; 
Mandated criteria used: Yes. 

Type of delegated authority: Repair and alteration[A]; 
Mandated criteria used: Yes - for the most recent request above 
$100,000 in 2006. 

Type of delegated authority: Operations and maintenance; 
Mandated criteria used: Yes - for the most recent request in 2006. 

Type of delegated authority: Real estate leasing; 
Mandated criteria used: No. 

Type of delegated authority: Administrative contracting officer; 
Mandated criteria used: No. 

Type of delegated authority: Lease management; 
Mandated criteria used: Unknown. 

Source: GAO analysis of information provided by GSA. 

[A] Since GSA is required either by law or has issued a blanket repair 
and alteration delegation for projects that do not exceed $100,000, it 
does not apply mandated cost-effectiveness criteria to these projects. 

[End of table] 

The Federal Management Regulation states that delegations are to be in 
the government's best interest and specifies that GSA must evaluate 
such factors as whether a delegation would be cost effective for the 
government in the delivery of space. GSA used these mandated criteria 
when delegating utility services and for the most recent delegations of 
individual repair and alteration authority above $100,000 and 
operations and maintenance authority. But all of the procedures used 
for assessing cost-effectiveness of delegations of individual repair 
and alteration authority above $100,000 and operations and maintenance 
authority were not included in any of GSA's written guidance. Since GSA 
is either required by law or has issued a blanket repair and alteration 
delegation for projects that do not exceed $100,000; it does not apply 
cost-effectiveness criteria to these delegations. Further, GSA 
officials told us these delegations have limited financial risk and, 
based on anecdotal evidence, they had not seen a pattern of problems 
with these delegations. GSA did not use the criteria when delegating 
real estate leasing authority and administrative contracting officer 
authority, and it could not determine if mandated criteria were used 
when delegating lease management authority. GSA officials told us they 
are updating their guidance for delegations of general purpose real 
estate leasing authority to include procedures for cost-effectiveness. 
The officials also said they are limiting the use of delegations of 
administrative contracting officer authority and that delegations of 
lease management authority have limited financial risk, and thus it may 
not be the best use of resources to develop procedures to determine 
whether these delegations are cost effective. 

To determine whether a delegation of utility services authority would 
be cost effective, GSA identifies the federal presence--that is, the 
number of federal agencies in a given area--within the utility service 
area where the requesting facility resides. According to the Director 
of the Energy Center, most delegation requests are for buildings in 
areas where there is no other federal need for utility services. 
Because it takes substantial resources for the center to negotiate 
public utility contracts with a serving utility, the center generally 
does not negotiate contracts for individual agency needs. Therefore, 
the center determined it was cost effective to grant the delegations 
when there were no additional federal needs requiring an area-wide 
utility contract in the areas of the requested delegations. 

PBS officials said they assessed cost-effectiveness prior to granting 
the individual repair and alteration delegation to EPA. PBS required 
EPA to submit a justification that demonstrated the delegation was in 
the government's best interest and was cost effective. The 
justification included a cost analysis as part of its management plan, 
which GSA used to compare against its costs for similar work and other 
data. Although PBS officials said they used these procedures, they 
acknowledged that they have not been formalized in any written 
guidance. 

GSA recently began assessing the cost-effectiveness of operations and 
maintenance delegations. Although GSA reviewed the operating costs of 
agencies with operations and maintenance delegations in the early years 
of the delegations, it did not assess cost-effectiveness of the 
delegations. Agencies paid GSA rent for delegated buildings and, until 
1997, GSA transferred back to the agencies an amount that GSA estimated 
it would have spent in the absence of the delegation[Footnote 34] to 
provide standard-level building service.[Footnote 35] To oversee how 
agencies used this funding, GSA required agencies to submit an annual 
building operations cost report.[Footnote 36] However, at GSA's 
direction, agencies did not include funding it spent to provide night 
and weekend building services because GSA considered these costs above 
standard level. In 1990, we reported that GSA could not determine 
whether the delegations were cost-effective because it lacked all cost 
and performance data to oversee the operations and maintenance 
delegations, and the data it required were frequently inaccurate or 
sometimes never received.[Footnote 37] 

Since our previous review, GSA has issued additional guidance for 
delegations of operations and maintenance. The customer guide and desk 
guide state that overall operating costs must be reasonable and not 
exceed those that GSA would incur. Both guides add that facility 
operating costs should be included in the delegation. Further, the desk 
guide states that the operating costs should be derived from and 
supported by the facility management plan. But the section on the 
facility management plan in the standard operating procedures does not 
address submission of building or facility operating costs. According 
to GSA officials, the financial information provided by the agencies 
will be compared with industry benchmarks to determine cost- 
effectiveness. 

However, GSA has not formalized the benchmark comparison procedure in 
any of its guidance. GSA officials told us they have issued only one 
new delegation of operations and maintenance authority since 2000, and 
they performed an economic evaluation of the request.[Footnote 38] 

In contrast, GSA did not consider cost-effectiveness prior to issuing 
delegations for real estate leasing authority. GSA officials told us 
that staffing and financial constraints limited their ability to assess 
cost-effectiveness of real estate leasing authority and that initially 
(at the beginning of the general purpose delegations in 1996) they had 
no reason to believe the delegations were not cost effective. GSA does 
require agencies that use the general purpose lease delegation to 
provide documentation to the relevant GSA regional office that the 
negotiated rental rate is within the prevailing market rental rate for 
the class of building leased. If the negotiated rental rate exceeds the 
market range, the agency is to provide information as to why the market 
rate was exceeded.[Footnote 39] However, these procedures do not apply 
to special purpose delegations over 2,500 square feet, where GSA has 
the discretion to issue these delegations.[Footnote 40] In addition, 
GSA officials acknowledged that they did not use the information or 
know the degree to which agencies were in compliance with this 
requirement and did not validate the market ranges used by agencies. 
Under GSA's draft leasing guidance, which is scheduled to be issued in 
September 2007, agencies using the general purpose leasing delegation 
will be required to provide a narrative explaining why the granting of 
the request is in the best interests of the government and a plan for 
meeting or exceeding GSA's performance measures (lease cost). GSA will 
use this and other information to determine whether the requesting 
agency's exercise of the delegation is in the government's best 
interest. Additionally, GSA will analyze each general purpose lease 
awarded against the same GSA lease cost performance measure used for 
GSA leases. 

GSA also did not consider cost-effectiveness for delegations of 
administrative contracting officer authority. According to GSA 
officials, cost-effectiveness was not considered because the intent of 
the delegation was not to reduce costs, but to improve service 
delivery. GSA allows agencies with delegations of administrative 
contracting authority to pay rent directly to the landlords instead of 
GSA paying the rent to the landlords. In 2004, GSA reviewed these 
delegations and found that the program was not revenue neutral, but 
rather had a negative financial impact. This delegation type increased 
their administrative costs because of the staff time needed to 
reconcile the funds paid to the agencies with the amount the agencies 
paid to the landlord.[Footnote 41] In addition, GSA officials said that 
in certain cases, agencies were changing the terms of lease agreements 
to make revisions to the space without GSA's knowledge, which resulted 
in increased costs and financial liability to the government. For 
example, as a part of the 2004 review, GSA found instances of space 
alterations that were added to the lease agreements by the agency. The 
space alterations required the government to restore the space to its 
original condition; however, there was no explanation of the costs or 
any indication of how the costs would be paid at lease expiration. The 
review recommended discontinuation of the program by June 2005. GSA 
decided to offer lease management authority delegations in place of new 
administrative contracting officer authority delegations if desired by 
the tenant agencies. 

Finally, PBS central office officials could not determine if they used 
mandated criteria when delegating lease management authority because 
these delegations are managed at the regional level, and GSA does not 
require the regional offices to report on these delegations to the 
central office. Further, the central office does not routinely request 
information on these activities. GSA officials told us there is limited 
risk associated with delegations of lease management authority as these 
delegations are structured to prevent the agencies from exceeding the 
terms of the delegation. Therefore, it may not be the best use of 
resources to develop and implement procedures to determine whether 
these delegations are cost effective. 

According to GAO's Standards for Internal Controls, written policies 
and procedures are control activities that help ensure management's 
directives are carried out and actions are taken to control risks. The 
absence of written guidance for all procedures used to assess cost- 
effectiveness for (1) delegations of individual repair and alteration 
authority above $100,000, (2) operations and maintenance authority, (3) 
general purpose leasing delegations and (4) special purpose leasing 
delegations that exceed 2,500 square feet could limit GSA's ability to 
determine if delegations are in the best interests of the government. 

Agencies Primarily Request Delegated Authority to Receive Faster 
Service, and Most Said They Plan to Seek Delegations in the Future: 

Of the six tenant agencies we contacted with delegated real property 
authority, five agencies cited timeliness and control as the main 
reasons they sought delegations. Officials from all of the agencies we 
contacted told us their decisions were not based on a lack of 
satisfaction with GSA's performance. All of the agencies said they will 
continue to seek delegations of real property authority in the future. 
We also contacted the Judiciary, which was terminating its delegations, 
and agency officials told us it was doing so because the delegations 
were no longer cost effective. 

Agency Officials Said They Sought Delegations to Improve Timeliness of 
Real Property Activities: 

Officials at five of the tenant agencies we contacted cited improved 
timeliness as the main reason they sought their delegations. In 
particular, these officials told us their respective delegations 
provided them with the ability to complete their delegated real 
property activities in a more timely fashion. For example, officials 
from the Department of Commerce told us they are able to procure leased 
space faster than GSA because they believe GSA's competing demands 
prevent GSA officials from urgently locating space for the agency. 
Similarly, Department of Interior officials stated that timeliness was 
a major benefit of their delegations of real estate authority because 
GSA officials cannot always make its needs a priority because of GSA's 
large workload. Both the Departments of Commerce and Defense officials 
said their administrative contracting officer authority delegations 
provided them with increased control and direct access to the landlord, 
which resulted in faster service. Officials from the Department of 
Defense and the Social Security Administration said their delegations 
of operations and maintenance activities provided them with the 
flexibility to work closely with their own personnel to plan and 
prioritize service requests in order to fulfill agency needs in a 
timelier manner. Finally, the EPA said they requested repair and 
alterations delegations because they needed to expedite the 
installation of blast mitigation material on windows in GSA-controlled 
space to be compliant with increased security requirements. An EPA 
official said these delegations allowed them to complete their projects 
in a more timely fashion because they had direct access to their 
contractors. In contrast, officials at the Departments of Interior and 
Justice said they sought delegations of utility service to obtain 
stabilized pricing for utilities to protect them from market 
fluctuations. 

All of the agencies we interviewed that received real property 
delegations said their decisions to seek delegations were not based on 
a lack of satisfaction with GSA's performance in the given service but 
rather were useful in certain circumstances where GSA's knowledge and 
expertise were less critical. For example, the Departments of Commerce 
and Interior said they primarily use lease delegations in remote areas 
where GSA has a minimal presence. In these instances, both agencies 
said it made sense for them to conduct the lease transactions because 
they generally had more knowledge of these isolated real estate 
markets. Both agencies added that their decisions to seek lease 
delegations were not related to any dissatisfaction with GSA's leasing 
program. Further, they said that it was sensible for them to use GSA to 
acquire leased space in urban areas because of GSA's expertise with 
these real estate markets. Officials from the Departments of Commerce 
and Defense said their use of delegations of administrative contracting 
officer authority was driven by their desire to leverage direct 
payments to the landlord to help ensure better service. An official 
from EPA told us that the agency's decision to seek a repair and 
alteration delegation was not a result of any problems with GSA's 
services. Finally, the Departments of Interior and Justice told us they 
request delegations of utility authority when they have a need to 
contract for utility services, and GSA determines that it is more 
appropriate for the agency to obtain the contract. 

GSA's view of the various types of delegations is that it allows for 
greater efficiency in use of federal contracting officer authority. 
Additionally, if utility connection and service is required in an 
expedited fashion for operations and maintenance purposes, a delegation 
of utility acquisition authority can allow for timelier services. GSA 
officials acknowledged that the delegations of utility services allowed 
for stabilized pricing and delegations of administrative contracting 
officer authority and operations and maintenance allowed for timelier 
services. However, GSA officials questioned whether the individual 
repair and alteration delegation above $100,000 allowed for faster 
service. GSA told us that EPA used a contractor from GSA's approved 
list of contractors to perform these delegations and did not think the 
work would be performed faster because of the delegation. Similarly, 
GSA officials questioned whether agencies with lease delegations had 
more market knowledge in remote areas or were able to complete lease 
transactions in a more timely fashion. GSA added that agencies do not 
always provide their space needs in a timely fashion which affects 
GSA's ability to provide timely leasing services. 

Agencies Plan to Seek Delegations in the Future: 

Officials from all six agencies that we interviewed said they planned 
to seek delegations in the future. Officials from the Department of 
Commerce told us they do not necessarily want to increase their 
delegations of real estate leasing authority, but they will continue to 
seek lease delegations when the conditions are conducive. However, 
department officials said they would like to increase the number of 
administrative contracting officer authority delegations, but GSA has 
been reluctant to issue additional delegations. Department of Interior 
officials said they will continue to seek delegations for space 
acquisition in remote areas and utility services when needed. Officials 
from the Department of Defense said they do not plan to aggressively 
pursue additional operations and maintenance delegations because many 
of the delegated lease facilities are subject to base realignment and 
closure and will continue to request delegations of administrative 
contracting officer authority as needed. Social Security Administration 
officials said they plan to maintain their current level of operations 
and maintenance delegations. EPA said it plans to continue to seek 
delegations of repair and alteration project authority as needed. 
Finally, the Department of Justice told us it will continue to seek 
delegations of utility services as needed. 

While these six agencies told us they would likely continue to seek 
delegations, one agency is terminating its delegations with GSA. 
According to PBS officials, the Judiciary terminated authority for one 
delegation of operations and maintenance and is currently terminating 
three more. Judiciary officials from the Administrative Office of the 
U.S. Courts stated that prior to terminating the delegations of 
operations and maintenance authority, the tenant satisfaction level in 
their delegated buildings was higher than in nondelegated buildings 
because the court was aware of their tenants' operating needs and could 
respond to repairs and service requirements faster than GSA. However, 
their decision to terminate the delegation authority was driven by two 
primary considerations. First, according to the officials, in 2004, GSA 
shifted responsibility for all repairs, regardless of cost, to 
delegated agencies with no adjustment to the rent GSA charges. 
According to the officials, the office was required to repair and 
maintain systems that were aging and significantly beyond their useful 
life. The officials stated the shift of more responsibility to perform 
costly repairs reduced the Judiciary's funds for preventive maintenance 
on those aging systems. Second, for buildings without an operations and 
maintenance delegation, GSA charges an appraised rate for operating 
expenses based on local comparable buildings. However, according to the 
officials from the Administrative Office of the U.S. Courts, the actual 
cost for managing the delegated buildings was higher than what GSA was 
charging for nondelegated buildings under its appraisal system for some 
locations. Therefore, the Judiciary did not consider it cost effective 
to continue the delegations because the operating costs were higher 
than what GSA charges. GSA acknowledged that Judiciary's delegated 
buildings were aging and that the rising expenses of operations and 
maintenance delegations prompted the Judiciary's decision to terminate 
the delegations. However, GSA told us it did not shift responsibility 
for all repairs to the Judiciary. GSA officials explained that repair 
activity for delegated buildings is divided between the tenant agency 
and GSA. According to GSA, the Judiciary was responsible for routine 
repairs, defined by GSA as items typically expensed to tenants by 
private sector landlords. GSA was responsible for making necessary 
replacements to the structure and building systems, which it considered 
capital replacements.[Footnote 42] 

Conclusions: 

In managing its delegations, GSA lacked basic management controls such 
as complete and consistent data and current written policies and 
procedures. In particular, GSA had inconsistent data on delegations of 
real estate leasing authority. GSA is currently implementing several 
changes to improve its data collection for lease delegations and will 
issue separate oversight procedures that include a requirement to 
reconcile the two sources of lease delegation data. However, it is 
unclear when the oversight procedures will be issued. GSA has written 
policies and procedures for managing its delegations, but some of this 
guidance is out of date. While GSA officials said updates to some of 
the guidance are in process, it is unclear when these updates will be 
finalized. Further, GSA also did not use mandated cost-effectiveness 
criteria when deciding to delegate certain real property authority. 
These basic management controls are the first line of defense in 
safeguarding assets and providing effective stewardship of public 
resources. In the absence of (1) accurate program data on the numbers 
and types of key authorities delegated, (2) current policies and 
procedures to help guide decisions to delegate, and (3) complete cost- 
effectiveness analyses, GSA cannot ensure that delegations are an 
efficient use of federal dollars or in the best interests of the 
government. 

Recommendations for Executive Action: 

To improve GSA's ability to oversee the various delegated authorities, 
we recommend that the Administrator of GSA take the following two 
actions: 

* develop written procedures for reviewing the different sources of its 
lease delegation data to identify and determine an accurate count of 
the leases awarded using all three types of leasing delegations and: 

* update the guidance for managing delegations, including procedures 
for assessing the cost-effectiveness of individual repair and 
alteration delegations above $100,000, operations and maintenance 
delegations, general purpose leasing delegations, and special purpose 
leasing delegations that exceed 2,500 square feet. 

Agency Comments: 

We provided GSA a draft of this report for its review and comment. GSA 
agreed with the report's findings and recommendations and stated it 
will use them to improve its delegation programs. More specifically, 
with respect to our first recommendation, GSA stated it is in the 
process of implementing several changes to improve its data collection 
for lease delegations. GSA noted that it has requested the Federal Real 
Property Council to provide PBS the data on delegated leases listed in 
the Federal Real Property Profile database. GSA agreed to compare 
annually the agencies' data sent to GSA with the Federal Real Property 
Profile database, as agencies will now be required to identify the 
authority under which they acquired their leased assets. GSA further 
agreed to develop written guidance for these new procedures. Regarding 
our second recommendation, GSA said it would review and update, as 
necessary, the guidance for managing its real property delegations. GSA 
further noted that it has various types of delegations of authority 
with unique policies and procedures to administer the specific 
requirements of the delegation programs. GSA also provided written 
technical comments, which we have incorporated in this report as 
appropriate. GSA's letter is contained in appendix II without the 
enclosure that contained the technical comments. 

As agreed with your office, unless you publicly release its contents 
earlier, we plan no further distribution of this report until 30 days 
after the date of this letter. At that time, we will provide copies to 
interested congressional committees and the GSA Administrator. We will 
make copies available to others upon request. The report is available 
at no charge on GAO's Web site at [hyperlink, http://www.gao.gov]. 
Contact points for our offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. 

If you or your staff have any questions concerning this report, please 
contact me at (202) 512-7215 or [email protected]. Key contributors to 
this report were Sally Moino, Assistant Director; Derrick Collins; 
Susan Michal-Smith; Michael Mgebroff; Courtney Reid; Janay Sam; and 
Sandra Sokol. 

Sincerely yours, 

Signed by: 

Kay E. Brown: 
Acting Director, Physical Infrastructure Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Given your interest in the General Services Administration's (GSA) use 
of real property delegations of authority, we determined (1) what real 
property authority GSA has delegated to its tenant agencies, (2) what 
policies and procedures GSA uses to manage delegated real property 
authority, and (3) reasons the tenant agencies requested delegated 
authority. 

To determine what real property authority GSA delegated to its tenant 
agencies and the criteria GSA used when deciding to delegate those 
activities, we reviewed, among other materials, the law, the Federal 
Management Regulation, and the Federal Acquisition Regulation related 
to GSA's authority to delegate real property functions; existing 
policies and procedures for managing the delegations, including 
internal Public Buildings Service (PBS) guidance on delegations of real 
estate leasing authority and PBS's "Standard Operating Procedures for 
Operation and Maintenance of Delegated Real Property;" previous Office 
of Governmentwide Policy reviews of delegations of real estate leasing 
authority; PBS summaries of the lease delegation program; and data on 
the number of delegations by type and agency from fiscal years 1996 to 
2006. We limited our review to delegations for the following agencies: 
Departments of Commerce, Defense, Health and Human Services, Homeland 
Security, Interior, Justice, the Treasury, Environmental Protection 
Agency, the Judiciary, and the Social Security Administration. These 
agencies were GSA's top 10 customers in annual rent for fiscal year 
2005 as reported in GSA's State of the Portfolio. For the purposes of 
our review, we did not include real property disposal authority or 
delegations of security authority in our analysis. To assess the 
reliability of the delegations data we (1) reviewed related 
documentation, (2) conducted manual testing of certain source 
databases, and (3) interviewed knowledgeable agency officials about the 
quality of the data. As a result, we determined that the data were 
sufficiently reliable for the purposes of this report. 

Finally, to obtain information on the views and experiences of agencies 
with delegations we interviewed officials from six agencies. To select 
the agencies, we reviewed GSA's data on delegations to its tenant 
agencies from fiscal years 1996 to 2006 and selected the two agencies 
with the most delegations in each category for which we had data: real 
estate leasing authority, administrative contracting officer authority, 
operations and maintenance authority, repair and alteration project 
authority, and utility service authority. Because we used a sample 
selection method, our results are not generalizable to all agencies 
that received delegations of real property authority. Table 5 provides 
a listing of the agencies we selected and interviewed. 

Table 5: Agencies We Contacted with the Most Delegations in Each 
Category: 
 
Delegation type: Real estate leasing; 
Department of Commerce: [X]; 
Department of Interior: [X]; 
Department of Defense: [Empty]; 
Social Security Administration [A]: [Empty]; 
Environmental Protection Agency: [Empty]; 
Department of Justice: [Empty]. 

Delegation type: Administrative contracting officer [X]; 
Department of Commerce: [Empty]; 
Department of Interior: [X]; 
Department of Defense: [Empty]; 
Social Security Administration [A]: [Empty]; 
Environmental Protection Agency: [Empty]; 
Department of Justice: [Empty]. 

Delegation type: Operations and maintenance; 
Department of Commerce: [Empty]; 
Department of Interior: [Empty]; 
Department of Defense: [X]; 
Social Security Administration [A]: [X]; 
Environmental Protection Agency:[Empty] ; 
Department of Justice: [Empty]. 

Delegation type: Repair and alteration; 
Department of Commerce: [Empty]; 
Department of Interior: [Empty]; 
Department of Defense: [Empty]; 
Social Security Administration [A]: [Empty]; 
Environmental Protection Agency: [X]; 
Department of Justice: [Empty]. 

Delegation type: Utility service; 
Department of Commerce: [Empty]; 
Department of Interior: [X]; 
Department of Defense: [Empty]; 
Social Security Administration [A]: [Empty]; 
Environmental Protection Agency: [Empty]; 
Department of Justice: [X]. 


Source: GAO. 

[A] We originally attempted to interview officials from the Department 
of Treasury to discuss their operations and maintenance delegations, 
but our request for an interview was unsuccessful. Subsequently, we 
contacted officials from the Social Security Administration to discuss 
their operations and maintenance delegations. 

[End of table] 

We also interviewed Judiciary officials from the Administrative Office 
of the U.S. Courts to discuss its decision to return delegations of 
operations and maintenance authority. 

We performed our review from August 2006 through June 2007 in 
accordance with generally accepted government auditing standards. 

[End of section] 

Appendix II: Comments from the General Services Administration: 

GSA: 

August 23, 2007: 

The Honorable David M. Walker: 
Comptroller General of the United States: 
Government Accountability Office: 
Washington, DC 20548: 

Dear Mr. Walker: 

The U.S. General Services Administration (GSA) appreciates the 
opportunity to review and comment on the draft report, "Improvements 
Needed in Managing Delegated Authority of Real Property Activities," 
(GAO-07-1000). The Government Accountability Office recommends the 
Administrator of General Services: (1) develop written procedures for 
reviewing the different sources of its lease delegation data to 
identify and determine an accurate count of the leases awarded using 
all three types of leasing delegations; and, (2) update the guidance 
for managing delegations, including procedures for assessing the cost-
effectiveness of individual repair and alteration delegations above 
$100,000, operations and maintenance delegations, general purpose 
leasing delegations. and special purpose leasing delegations that 
exceed 2,500 square feet. 

GSA agrees with the findings and recommendations and will use them to 
improve our delegation programs. 

Technical comments that update and clarify statements in the draft 
report are enclosed and incorporated herein by reference. If you have 
any questions. please contact me. Staff inquiries may be directed to 
Mr. Kevin Messner, Associate Administrator, Office of Congressional and 
Intergovernmental Affairs, at (202) 501-0563. 

Cordially, 

Signed by: 

Lurita Doan: 
Administrator: 

Enclosure: 

cc: Mark Goldstein, Director, Physical Infrastructure: 

[End of section] 

Footnotes: 

[1] Besides general purpose, under certain circumstances, agencies have 
the option to use two other types of delegations of real estate leasing 
authority, including categorical and special purpose. See below for 
additional information on the three types of leasing delegations. 

[2] Based on annual rent in the fiscal year 2005 State of the 
Portfolio, these 10 agencies include the Departments of Commerce, 
Defense, Health and Human Services, Homeland Security, Interior, 
Justice, Treasury, EPA, the Judiciary, and the Social Security 
Administration. 

[3] See 40 U.S.C. ï¿½ 121, which provides that the GSA Administrator may 
delegate its authority under the act except for (1) the authority to 
prescribe regulations on matters of policy applying to executive 
agencies; (2) the authority to transfer functions and reallocated 
amounts from one component of GSA to another under certain situations; 
and (3) other authority for which delegation is prohibited under the 
act. GSA is not prohibited from delegating the authority for the real 
property activities listed in the report. 

[4] 41 C.F.R. ï¿½ 102-72.20. 

[5] 41 C.F.R. ï¿½ 102-72.25. 

[6] GSA also has the authority to delegate real property disposal but 
reported that it had not delegated this activity from fiscal years 1996 
through 2006; therefore, we excluded this type of delegation from our 
review. In addition, the Homeland Security Act of 2002 transferred the 
Federal Protective Service to the Department of Homeland Security, and 
as a result the department now has responsibility for delegations of 
security authority. GSA entered into a memorandum of understanding with 
the department regarding security services and as a result defers to 
the department for delegations of security authority. 

[7] Some agencies have independent leasing authority, which allows the 
agency to perform for themselves all necessary functions to acquire 
leased space. For example, the Department of Veterans Affairs has the 
authority to acquire leased space for medical facilities (38 U.S.C. ï¿½ 
8103) and the Securities and Exchange Commission has the authority to 
enter into leases for office, meeting, storage space, and other space 
necessary to carry out its functions (15 U.S.C. ï¿½ 78d). 

[8] Agencies that subsequently decide not to exercise the requested 
authority must provide written notice of such to the relevant regional 
administrator. 

[9] GSA did not provide the actual date when this delegation was 
established but estimated that it was prior to 1996. 

[10] GSA did not provide the actual date when this delegation was 
established but estimated that it was prior to 1996. 

[11] GSA may revoke a delegation of operations and maintenance 
authority if the agency does not comply with the terms of the 
agreement, the agency falls below 90 percent occupancy and cannot 
obtain the concurrence from all other rent paying tenants, or by mutual 
agreement. 

[12] 40 U.S.C. ï¿½ 3313. 

[13] The Federal Acquisition Streamlining Act of 1994 (FASA) enacted 
simplified acquisitions to purchase supplies and services, which are 
excepted from the Competition in Contracting Act's full and open 
competition requirement. In most instances, the simplified acquisition 
threshold is $100,000. Part 13 of the Federal Acquisition Regulation 
establishes procedures for simplified acquisitions, which are designed 
to promote efficiency and economy in contracting and to avoid 
unnecessary burdens for agencies and contractors. 

[14] 41 C.F.R. ï¿½102-72.65. 

[15] GSA did not provide the actual date when this delegation was 
established but estimated that it was prior to 1997. 

[16] Oversight of the execution of the project is the responsibility of 
the GSA region in which the work would occur. 

[17] 40 U.S.C. ï¿½ 3305(b). 

[18] GSA did not provide the actual date when this delegation was 
established but estimated that it was prior to 1997. 

[19] One delegation was returned to GSA and terminated, and three are 
in the process of being returned and terminated. 

[20] This number represents the cumulative number of unique leases with 
this delegation. 

[21] This number represents the cumulative number of unique leases with 
this delegation. 

[22] The National Capital Region serves federal agency clients located 
throughout Washington, D.C; Maryland (Montgomery and Prince George's 
counties); and Virginia (the cities of Alexandria and Falls Church, and 
Arlington, Fairfax, Loudoun, and Prince William counties). 

[23] OGP's Office of Real Property Management reviewed the general 
purpose lease delegation program in 1998, 2001, and 2005. 

[24] Prior to guidance issued in May 2005, agencies were not required 
to report categorical and special purpose leasing delegations to OGP. 
OGP only collected data on the number of leases awarded using the 
general purpose leasing delegation. 

[25] This includes data from OGP's reviews of the general purpose lease 
delegation program in 1998, 2001, and 2005. The 594 lease awards 
include 282 from categorical lease delegations, 159 from special 
purpose lease delegations, 73 from general purpose lease delegations 
and 80 unknown. According to GSA officials, one agency did not report 
the type of lease delegation used because it was not required. The 
agency did not respond to GSA's request for the information. 

[26] The Federal Real Property Council was established in 2004 and is 
responsible for developing guidance, identifying best practices, and 
helping agencies improve the management of real property assets. 

[27] OMB rates agencies on the timeliness and accuracy of their Federal 
Real Property Profile submission. 

[28] GSA, Office of Inspector General, Review of Public Buildings 
Service's Delegations of Authority to Lease Space, Report Number 
A060082/P/6/R07004 (Aug. 24, 2007). 

[29] GAO, Standards for Internal Control in the Federal Government, 
GAO/ AIMD-00-21.31 (Washington D.C.: November 1999). 

[30] GSA had data for the majority of the period we reviewed for 
delegations of administrative contracting officer authority. 

[31] This includes relevant sections of the Federal Management 
Regulation published at 41 C.F.R., bulletins issued as supplemental 
guidance, and the Federal Acquisition Regulation. 

[32] References to delegations of utility services authority are 
included in a different chapter. 

[33] The desk and customer guides also did not explain that GSA defers 
to the Department of Homeland Security for delegations of security 
authority. 

[34] Beginning in 1997, GSA required agencies to seek their own 
congressional funding to support their operations and maintenance 
delegations and adjusted agency rent, accordingly. 

[35] GSA defined standard-level services as those building services 
provided during a normal 50-hour work week (5 days at 10 hours per 
day). 

[36] In 2000, GSA eliminated the reporting requirement because GSA 
considered the contracts that agencies used to procure operations and 
maintenance services to be performance-based contracts in which cost is 
not necessarily the primary consideration. 

[37] GAO, General Services Administration: Delegated Buildings 
Adequately Operated but Better GSA Oversight Needed, GAO/GGD-90-76 
(Washington, D.C.: May 15, 1990). 

[38] GSA officials also told us that they are reviewing delegations of 
operation and maintenance authority that do not have a specified term 
as well as any that are up for renewal. Officials are requiring 
agencies to demonstrate the ability to manage and run the space but are 
not specifically assessing cost-effectiveness. 

[39] The documentation may include information from real estate 
associations such as the Society of Industrial and Office Realtors. 

[40] These procedures also do not apply to most categorical leasing 
delegations and special purpose delegations up to 2,500 square feet 
because GSA has issued standing delegations, which allow agencies to 
use these delegations without obtaining approval from GSA. 

[41] GSA officials told us typically, GSA charges rent payments to 
agencies occupying leased space, and GSA then pays the landlord. Under 
the administrative contracting officer delegations, GSA returns the 
rent payment to the agency, and the agency pays the landlord directly. 

[42] For example, according to GSA, the replacement of a part of a 
system, such as a compressor or a fan, is considered repair; the 
replacement of the entire system is considered a capital improvement. 

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