Federal Buildings: Billions Are Needed for Repairs and Alterations
(Letter Report, 03/30/2000, GAO/GGD-00-98).

Pursuant to a congressional request, GAO provided information on the
General Services Administration's (GSA) Repairs and Alterations Program,
focusing on: (1) the extent of repairs and alterations that have been
identified at government-owned buildings managed by GSA; (2) factors
that impede GSA's ability to satisfy its repair and alteration needs;
and (3) GSA's efforts to improve its management of repairs and
alterations.

GAO noted that: (1) GSA has struggled over the years to meet the repair
and alteration requirements identified at its buildings; (2) billions of
dollars are needed to satisfy the repair and alteration needs at federal
buildings; (3) the Federal Buildings Fund (FBF), a revolving fund that
finances repair and alteration needs and other capital and operating
expenditures, is not producing the revenues needed to meet all repair
and alteration needs; (4) repairs and alterations program data are
problematic and GSA has not yet fully institutionalized its thinking and
planning about how best to strategically respond to its
multibillion-dollar repair and alteration needs; (5) almost a decade
ago--in May 1991--GAO reported that federal buildings had suffered from
years of neglect, and as a result, about $4 billion was needed to bring
some of these buildings up to acceptable quality, health, and safety
standards; (6) GAO's report pointed out that FBF historically had not
produced sufficient revenues to finance all needed repairs and
alterations at federal buildings; (7) the report also identified
incomplete and unreliable program data and the lack of a strategic
approach to meeting repair and alteration requirements as other factors
that impeded GSA's ability to satisfy its repair and alteration needs;
(8) the report made recommendations, which GSA has yet to fully
implement, aimed at adopting a more strategic approach for managing
repairs and alterations, improving program data, and exploring financing
opportunities for repair and alteration needs; (9) GSA officials
recognize that more needs to be done to effectively respond to
increasing demands for repairs and alterations; (10) GSA has several
initiatives under way that, if fully developed and effectively
implemented, could satisfy GAO's previous recommendations, lead to
better program oversight, and promote a more strategic approach to
meeting repair and alteration requirements; and (11) GSA's ongoing
initiative to standardize and improve each building's asset business
plan should provide GSA's program managers with consistent and
up-to-date information about the repairs and alterations, the critical
nature of each work item, how long a work item has been delayed, and the
adverse consequences of delaying repair and alteration work.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-00-98
     TITLE:  Federal Buildings: Billions Are Needed for Repairs and
	     Alterations
      DATE:  03/30/2000
   SUBJECT:  Federal property management
	     Building inspection
	     Safety standards
	     Federal office buildings
	     Property depreciation
	     Facility repairs
	     Occupational safety
	     Standards evaluation
	     Facility maintenance
	     Obsolete facilities
IDENTIFIER:  GSA Repair and Alteration Program
	     Federal Buildings Fund
	     GSA Inventory Reporting Information System

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United States General Accounting Office
GAO

Report to Congressional Requesters

March 2000

GAO/GGD-00-98

FEDERAL BUILDINGS
Billions Are Needed for Repairs and Alterations

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Contents
Page 181GAO/GGD-00-98 Building Repairs and Alterations
Letter                                                                      1
                                                                             
Appendix I                                                                 20
Objectives, Scope, and
Methodology
                                                                             
Appendix II                                                                24
Information on GSA's
Buildings With the
Highest Dollar Value of
Repair and Alteration
Needs as of September
30, 1999
                                                                             
Tables                     Table 1:  Cost Ranges of Repair and              4
                           Alteration Work and Descriptive
                           Building Information as of Sept. 30,
                           1999
                                                                             
Figures                    Figure 1:  Estimated Annual Repair and           9
                           Alteration Needs Under Three
                           Scenarios
                                                                             

Abbreviations

FBF       Federal Buildings Fund
GSA       General Services Administration
IRIS      Inventory Reporting Information System
OMB       Office of Management and Budget
PBS       Public Buildings Service

B-283787

Page 2GAO/GGD-00-98 Building Repairs and Alteratio
ns
     B-283787

     March 30, 2000

     The Honorable Bob Franks
Chairman
The Honorable Bob Wise
Ranking Democratic Member
Subcommittee on Economic Development, Public
Buildings,
  Hazardous Materials, and Pipeline Transportation
Committee on Transportation and Infrastructure
House of Representatives

This report responds to your request for
information on the General Services
Administration's (GSA) Repairs and Alterations
Program. As agreed with your staff, our objectives
were to develop information on (1) the extent of
repairs and alterations that have been identified
at government-owned buildings managed by GSA, (2)
factors that impede GSA's ability to satisfy its
repair and alteration needs, and (3) GSA's efforts
to improve its management of repairs and
alterations. The Subcommittee requested this work
because of concerns that federal buildings may
need costly repairs and alterations to restore
them to acceptable quality and safety standards.

Our work was primarily based on our analyses of
GSA's repairs and alterations policies and
procedures, the data contained in GSA's
computerized system that tracks repair and
alteration needs, detailed repair and alteration
records for 44 buildings with an estimated $20
million or more of repair and alteration needs,
and the historical and projected funding for
repair and alteration work. We also held
discussions with GSA program officials about the
management of repairs and alterations and their
efforts to improve operations. To gain some
measure of the reliability of GSA's repair and
alteration database, we conducted limited testing
of the data and made adjustments when we
identified errors. We performed our work from
August 1999 to March 2000 in accordance with
generally accepted government auditing standards.
More details about our objectives, scope, and
methodology are presented in appendix I.

Results in Brief
GSA has struggled over the years to meet the
repair and alteration requirements identified at
its buildings. Our current work shows that
billions of dollars are needed to satisfy the
repair and alteration needs at federal buildings;
the Federal Buildings Fund (FBF), a revolving fund
that finances repair and alteration needs and
other capital and operating expenditures, is not
producing the revenues needed to meet all repair
and alteration needs; repairs and alterations
program data are problematic; and GSA has not yet
fully institutionalized its thinking and planning
about how best to strategically respond to its
multibillion-dollar repair and alteration needs.
This situation is not new. Almost a decade ago-in
May 1991-we reported that federal buildings had
suffered from years of neglect; and as a result,
about $4 billion was needed to bring some of these
buildings up to acceptable quality, health, and
safety standards.1 Our report pointed out that FBF
historically had not produced sufficient revenues
to finance all needed repairs and alterations at
federal buildings. It also identified incomplete
and unreliable program data and the lack of a
strategic approach to meeting repair and
alteration requirements as other factors that
impeded GSA's ability to satisfy its repair and
alteration needs. In fact, the report made
recommendations, which GSA has yet to fully
implement, aimed at adopting a more strategic
approach for managing repairs and alterations,
improving program data, and exploring financing
opportunities for repair and alteration needs.

GSA officials recognize that more needs to be done
to effectively respond to increasing demands for
repairs and alterations.  GSA has several
initiatives under way that, if fully developed and
effectively implemented, could satisfy our
previous recommendations, lead to better program
oversight, and promote a more strategic approach
to meeting repair and alteration requirements.
GSA's ongoing initiative to standardize and
improve each building's asset business plan-a
document that provides a wide array of physical
characteristics and financial information-should
provide GSA's program managers with consistent and
up-to-date information about the repairs and
alterations, the critical nature of each work
item, how long a work item has been delayed, and
the adverse consequences of delaying repair and
alteration work. GSA's initiative to develop a
comprehensive plan that will identify, in priority
order, the repair and alteration work that needs
to be funded within a 5-year period should go a
long way toward providing key decisionmakers the
needed context to fully understand what needs to
be done and how best to do it. To help promote the
chances for these initiatives to succeed, we are
recommending that GSA develop an action plan with
specific timeframes that will guide the
development and implementation of the initiatives
and serve as a baseline for gauging progress and
performance.

Background
As the federal government's real property manager,
GSA provides office space for most federal
agencies. In this capacity, GSA is responsible for
keeping the approximately 1,700 government-owned
buildings it manages in good repair to ensure that
the value of these assets is preserved and that
tenants occupy safe and modern space. GSA
identifies building repair and alteration work
primarily through building inspections and
evaluations done by GSA staff or contract
architect-engineering firms. Identified repair and
alteration requirements are supposed to be entered
into the Inventory Reporting Information System
(IRIS), which is GSA's computerized system that
tracks repair and alteration needs. Repairs and
alterations and other capital and operating
expenditures are financed by FBF.

FBF, which is administered by GSA, is a revolving
fund authorized and established by the Public
Buildings Amendments of 1972. Beginning in 1975,
FBF replaced direct appropriations to GSA as the
primary means of financing the operating and
capital costs associated with federal space.  GSA
charges federal agencies rent, and the receipts
from the rent are deposited in FBF. In addition,
Congress may appropriate additional amounts to
FBF. Congress exercises control over FBF through
the appropriations process that sets annual
limits-called obligational authority-on how much
of the fund can be expended for various
activities. In fiscal year 2000, Congress
appropriated about $599 million in new
obligational authority from FBF for repair and
alteration work.

GSA Data Indicate That Billions of Dollars in
Repairs and Alterations Are Needed
     GSA data indicate that billions of dollars
are needed to satisfy the repair and alteration
requirements in the government-owned buildings it
manages. If the requirements are not met,
buildings could continue to deteriorate and may
become functionally obsolete. As of October 1,
1999, GSA's data on the repair and alteration work
that needed to be completed at federal buildings
included 5,585 items that collectively were
estimated to cost about $4 billion.2 GSA's data
showed that repairs and alterations were needed at
903 buildings, or 54 percent of the 1,682 federal
buildings it managed. Furthermore, this inventory
is not static. New work items are constantly being
identified and added to IRIS, and completed items
are deleted.

     The following table provides the various cost
ranges of work GSA identified at these buildings
as well as information on the number, age, and
size of buildings that reportedly needed repairs
and alterations.

Table 1:  Cost Ranges of Repair and Alteration
Work and Descriptive Building Information as of
Sept. 30, 1999
Dollar amount of   Number of  Average    Median
repair and         buildings      age     gross
alteration work              (years)a    square
in inventory                           feetb (-
                                           000)
$500,000 or less         446       51      21.7
$500,001 to              120       57      76.2
$1,000,000
$1,000,001 to            100       52     139.0
$2,000,000
$2,000,001 to             75       58     184.0
$5,000,000
$5,000,001 to             66       51     202.5
$10,000,000
$10,000,001 to            42       46     404.0
$20,000,000
$20,000,001 or            44       49     722.9
more
Subtotal of              893       52      74.3
buildings with
work items and
cost estimatesc
Buildings with            10       43      18.0
work items but no
cost estimates
Total buildings          903       52      74.0
with work items
Note: Data in this table came from IRIS and were
adjusted for accuracy when our limited testing of
detailed records identified errors.
aGSA's database did not reflect the age of 76
buildings included in our analysis.
bGSA's database did not show the square footage
for eight buildings included in our analysis.
c Fifty-seven of these buildings had 84 work items
that did not identify associated costs.
Source: GAO analysis of GSA data.

     It should be noted that the amount and types
of repairs and alterations needed varied from
building to building. In fact, GSA data showed
that 779 of its buildings did not have repair and
alteration work items in inventory-that is, no
work items were identified as needing funding. In
addition, as table 1 illustrates, the repair and
alteration work identified at almost one-half of
the 903 buildings was estimated to cost less than
$500,000 per building. Our analysis showed that
many of these 446 buildings and the 779 without
needs were relatively small office buildings and
border stations. On the other hand, 44 buildings
needed repairs and alterations that were estimated
to cost more than $20 million per building.
Furthermore, these buildings collectively
accounted for almost 60 percent of the nearly $4
billion estimated as needed to fund all identified
repairs and alterations. Also, the buildings with
the highest dollar repair and alteration needs
were typically large office buildings or
courthouses.

     Our analysis of the detailed information
obtained on the conditions of these 44 buildings
showed that their average age was 49 years.
Although the buildings are located throughout the
country, 16 of them are in the Washington, D.C.,
area. Also, 7 of the 44 are included on the
National Historic Register. The amount of repair
and alteration work needed on these 44 buildings
totaled about $2.4 billion, ranging from
approximately $187 million at the Dwight D.
Eisenhower Building in Washington, D.C., to over
$21 million at a federal building and courthouse
located in San Diego, CA. The types of repairs and
alterations needed varied. However, they typically
involved repairs to major building components,
such as electrical, plumbing, heating, ventilation
and air conditioning systems; fire alarm and/or
sprinkler systems; or other fire and life safety
items. The location, total amount of repairs and
alterations needed at each building, and other
details about these 44 buildings are shown in
appendix II.

     We also found that some of the repair and
alteration work needed on the 44 buildings was
apparently identified years ago, but for various
reasons this work had not yet been performed.
Although GSA does not have a goal of how long it
should take to do repairs, and its database did
not routinely track how long repairs and
alterations have been delayed or held in
inventory, our analysis of the available data
suggests that some of this work was identified
more than 5 years ago. Our analysis of the
detailed records for the 44 buildings showed that
a total of 674 work items were still in inventory.
Of these 674 items, GSA's database did not contain
a date indicating when the work was identified on
156 items. Of the remaining 518 work items, we
found that 218 of them were identified more than 5
years ago, and 49 of these more than 10 years ago.
We discussed this situation with GSA officials,
who told us that some repair and alteration work
remains in inventory or unaccomplished for years
because it is not deemed important enough to
compete for scarce funding.

     The issue of delayed repair and alteration
work is not new. In fact, a backlog of this work
existed when we last reviewed GSA's repair and
alteration program in 1991. At that time, we found
that more than one-third of the 25 buildings
included in our analysis had major repair and
alteration needs that had been delayed for 3 to 15
years. We cited the Pentagon as a classic example
of disinvestment in federal facilities because
repairs and alterations at this building had been
delayed for 10 years. As a result, GSA estimated
that a billion-dollar renovation was needed to
prevent further deterioration. We also reported
that other buildings had been neglected, although
not as badly as the Pentagon; and that at least $3
billion in identified repairs and alterations were
needed to bring these buildings up to acceptable
quality, health, and safety standards.

     More recently, the National Research Council
issued a report that described the physical
condition of the federal facilities portfolio as
deteriorating.3 This report concluded that one of
the reasons for this deterioration was the lack of
information to justify maintenance and repair
budgets. The report went on to say that in the
federal budget and operations environment,
facilities maintenance and repair is often deemed
a low priority because facility managers do not
have the information they need to present their
cases for funding to senior managers and public
officials. Furthermore, the report said that
because the deterioration of facilities occurs
over a long period of time, it may appear to
senior executives and public officials that the
maintenance and repair of facilities can always be
delayed 1 more year. The report went on to say
that the fact of the matter is that continuously
delaying maintenance and repairs to facilities can
result in major disruptions in service and
business and costly and serious health and safety
consequences.

     GSA officials said they recognize that the
physical condition of many federal buildings is
far from ideal, that a significant inventory of
repair and alteration work exists, and that some
buildings cannot support 21st century operations.
These officials stress, however, that federal
buildings have not been and are not being
neglected and that examples of serious
deterioration of these buildings are few and far
between. GSA officials also said that given the
age of their inventory and the limited resources
available to fund repairs and alterations, they
take pride in knowing that the agency has kept
many buildings operational far beyond their normal
life expectancy.

Several Factors Impede GSA's Ability to Satisfy
Repair and Alteration Requirements
     Funding limitations, inadequate program data,
and the lack of a strategic approach for meeting
repair and alteration requirements are three
factors that impede GSA's ability to satisfy the
multibillion-dollar repair and alteration needs at
its buildings. Despite a lengthy discussion of
these factors in our 1991 report, they continue to
exist. In that report, we made several
recommendations aimed at promoting more informed
congressional decisionmaking and preventing
federal buildings from becoming deteriorated and
functionally obsolete.

     Specifically, we recommended that the
Administrator of GSA annually develop and
communicate to the Office of Management and Budget
(OMB) and Congress a comprehensive plan that (1)
identifies total repair and alteration
requirements in federally owned buildings and
their estimated cost; (2) assesses the short-term
and long-term economic and operational
implications of the requirements in each building;
and (3) proposes a strategy, action plan, and
funding levels to repair or modernize the most
severely deteriorated, functionally obsolete, and
unsafe buildings. We recognized that before such a
plan can be developed, GSA would, among other
things, need to establish appropriate management
controls to help ensure that (1) all identified
building repair and alteration needs are included
in the computerized inventory, assigned
priorities, and properly costed; and (2) needs
that have already been deferred for 2 or more
years are identified, tracked, and coordinated
with the affected tenant agencies.

     The report went on to say that once GSA
developed and submitted this plan, the
Administrator should explore with Congress and OMB
how to finance the needed building repairs and
alterations. A review of GSA's audit resolution
file on our 1991 report showed that GSA made some
attempts to respond to these recommendations, such
as developing policies on building inspection
reports and establishing a 5-year plan requirement
for identifying building reinvestment needs. The
file also showed that GSA completed an annual 5-
year plan of prospectus-level projects,4 but it
was not shared with congressional committees.
According to GSA repair and alteration officials,
the 5-year plan initiative waned; but, as
discussed later, GSA has efforts under way to
develop such a plan.  Our overall analysis showed
that GSA's initiatives fell short of responding to
our recommendations, and more can be done.

     GSA officials continue to cite funding
limitations as the major reason why all repairs
and alterations are not getting done. Over the
years, FBF has not produced sufficient resources
to fund all identified repairs and alterations and
at the same time cover the day-to-day operating
costs of federal buildings and provide all of the
funding needed for the construction of new
buildings. According to GSA, the funding
deficiency is exacerbated by the increased demand
for repairs and alterations associated with aging
buildings. For example, demands on buildings'
electrical systems have risen due to new office
technology, and there is a greater demand for more
stringent health and safety protection.

     Our analysis of the funding situation showed
that during the 6-year period from fiscal year
1994 through 1999, GSA received, on average, about
$580 million out of FBF each year to complete
repairs and alterations at its buildings. During
these years, many repairs and alterations were
made. However, at the same time, new requirements
were identified and added to GSA's inventory of
repair and alteration work. Despite averaging
about $580 million a year for making repairs and
alterations, GSA data showed that at the end of
fiscal year 1999, there was still about $4 billion
in identified work.

     In fiscal year 2000, Congress appropriated
about $599 million in new obligational authority
from FBF for repairs and alterations. GSA
officials said they intended to request $900
million annually in new obligational authority for
this program for fiscal year 2001 through fiscal
year 2005.5 GSA officials told us that this
significant increase in funding may be possible
because of savings obtained from improved
operations at federal buildings and additional
revenues resulting from leasing previously
unoccupied space. The officials also said that
they do not know the amount of new repair and
alteration work that will be added to the
inventory in future years. However, they said that
it was reasonable to assume that each year the
dollar amount of new repairs and alterations that
will be needed could range from 2 to 4 percent of
the estimated $30 billion aggregate replacement
cost of GSA's portfolio. To estimate the cost of
the work that will exist at the end of the next 6
years, we used these assumptions, and the $599
million in obligational authority for fiscal year
2000, the $900 million projected funding for
fiscal years 2001 to 2005, and the $4 billion
inventory of repair and alteration work that
existed at the beginning of fiscal year 2000.6 We
adjusted the $4 billion inventory to reflect $370
million of unobligated funds in FBF available to
GSA at the beginning of fiscal year 2000, $305
million that will be needed from FBF for repair
and alteration work at other facilities like
leased buildings, and $457 million that will be
needed for unfunded work at projects already under
way. As illustrated in figure 1, even under the
most conservative estimate of new work, which is 2
percent added to the inventory annually, GSA would
face billions in repair and alteration needs
during each of the next 6 years. Moreover, these
needs are estimated at about $2.6 billion at the
end of 2005.

Figure 1:  Estimated Annual Repair and Alteration
Needs Under Three Scenarios

Source: GAO analysis of GSA data.

     We recognize that funding limitations could
be a major reason why needed repairs and
alterations are not getting done. However, our
work shows that GSA has not done all it could to
address the building disinvestment problem. For
example, GSA's repair and alteration program data
are problematic, as they were when we reported on
this issue in 1991. GSA's current computerized
database of repair and alteration work
items-IRIS-contains inaccurate and incomplete
information. Although we did not systematically
test IRIS, we found instances where (1) certain
GSA regions did not include all repair and
alteration requirements in the database; (2) major
repairs and alterations were identified as still
being in inventory when, in fact, they had already
moved into design, construction, or had been
completed; (3) work items were included in the
inventory when they should have been deleted
because, for example, they were no longer needed,
had become part of another project, or were
duplicates of other work items; and (4 )
construction cost estimates were not always
current. Also, we found that IRIS listed some
buildings as needing major repairs and
alterations, but the estimated costs of these work
items were not included. Finally, we identified
instances where important facts about a building,
such as its age or historical significance, were
not included in GSA's database.

     We also found that data currently available
on repairs and alterations do not allow program
managers to easily determine the length of time
that work has been in inventory, the criticality
of each work item, or the possible adverse
consequences associated with delaying repair and
alteration work. As previously mentioned, many
work items identified as being in the repair and
alteration inventory for the 44 buildings we
examined did not reflect the date when the work
item was identified. We also noted that in most of
the cases we examined, the explanation contained
in the database on why the repair and alteration
work was needed was vague, did not reference the
criticality of the work, and did not contain
information on the possible adverse consequences
associated with delaying repairs and alterations.

     We believe that reliable and complete
information about identified repairs and
alterations is essential for effective management
and oversight of program activities. Without such
information, it is difficult for the program
managers to (1) quantify the total amount of
repair and alteration needs, (2) effectively
target the most critical needs and set priorities
within and among the 11 GSA regions, and (3)
justify to OMB and Congress the need for
additional repair and alteration funding. Simply
stated, inadequate program information does not
permit informed decisionmaking. GSA database
officials recognize that their data have quality
problems and said they have been working to
improve them.

     We also noted that GSA has not made much
progress in developing a strategic approach to
meet its repair and alteration requirements. This
was a major issue in our 1991 report, which
discussed, in some detail, the shortcomings
associated with managing repair and alteration
requirements on a project-by-project basis and
GSA's need for a comprehensive, long-term strategy
for effectively meeting its building repairs and
alteration needs.

     GSA continues to operate its repair and
alteration program much like it did in 1991. GSA
decides, in conjunction with the annual budget
cycle, which repair and alteration needs should be
addressed during the next fiscal year. For those
repairs and alterations estimated to cost less
than a statutorily prescribed threshold, which was
$1.93 million in fiscal year 2000, each of GSA's
11 regions decides which work items will be
funded. This work is completed under the general
guidance and annual funding levels approved by GSA
headquarters. On the other hand, when repairs and
alterations are estimated to cost more than the
threshold amount, GSA must prepare a project
proposal called a prospectus.7 Using input from
its regions and the professional judgment of its
headquarters' staff, GSA develops an annual list
of prospectus-level projects and submits the list
to OMB and the Senate and House committees
responsible for public works.

OMB and Congress, using the list and the
individual prospectuses, must then decide which
projects to fund in a given year, without the
benefit of a comprehensive framework of GSA's
total building repair and alteration needs. They
must operate this way because GSA does not have a
comprehensive plan that (1) identifies its total
repair and alteration needs and corresponding
funding requirements, (2) establishes the relative
benefits or priorities of all competing projects,
and (3) proposes a strategy and the funding needed
to repair or modernize its most seriously
deteriorated buildings. With such a plan, Congress
and OMB would be in a better position to fully
understand GSA's total repair and alteration needs
and associated funding requirements, as well as
the cost-benefit implications of making or not
making needed repairs and alterations. The
information in the plan would provide the needed
context for Congress and OMB to better understand
the magnitude of the problem and permit
decisionmakers to make (1) more informed decisions
about annual funding levels and which particular
projects to fund and (2) more knowledgeable trade-
offs when allocating scarce resources among
competing projects. Finally, GSA would be in a
better position to target limited resources to
buildings with the greatest needs.

GSA Plans Improvements in its Oversight of
Building Repairs and Alterations
GSA has yet to fully implement the recommendations
in our 1991 report but is moving in the right
direction. GSA officials recognize that more
should be done to improve the management and
oversight of building repairs and alterations. To
this end, GSA has several initiatives under way
that, if fully developed and implemented, could
satisfy our previous recommendations. These
initiatives could also lead to better program
oversight and a more strategic approach to
managing repair and alteration needs.

     GSA's primary initiatives involve
standardizing and improving the asset business
plan8 that is prepared for each building in its
portfolio and developing a comprehensive plan that
identifies, in priority order, all prospectus-
level repair and alteration work that needs to be
funded during a 5-year period. In addition, GSA
has a strategy aimed at increasing revenues in
FBF, which could make more funds available for
repairs and alterations.  GSA has also included
specific repair and alteration goals in its annual
performance plan.

     For a number of years, GSA has required that
an asset business plan be prepared for all
buildings included in its portfolio. But only
recently has it taken steps to help ensure that
these plans are consistently prepared, accessible
to all program managers, and used to develop
standardized management reports about the repair
and alteration requirements at all of GSA's
buildings. During the fall of 1999, GSA
established a standardized format and standard
data elements that must be included in all asset
business plans. Prior to this date, each of the 11
regional offices had significant discretion in
determining the format of its asset business
plans, the detailed information contained in its
plans, and how these plans would be used in
determining which repairs and alterations would be
funded. Therefore, the asset business plan of the
past did not lend itself to collection and
comparison of information about the building
repairs and alterations within a region, let alone
among the 11 regions.

     According to GSA officials, when the new
asset business plans are fully implemented, they
are to identify all repair and alteration needs
over the entire life cycle of a building. With
this information, GSA managers should be in a
better position to determine the critical nature
of each work item, how long each work item has
been delayed, and the adverse consequences of
delaying repair and alteration work. The plans are
to be on an automated nationwide network and
therefore, readily available for all program
mangers to use. The asset business plans are also
to directly feed into and provide key data for
GSA's 5-year repair and alteration plan.

     In conjunction with the asset business plan,
GSA also has an ongoing effort aimed at developing
a 5-year repair and alteration plan that is to
include all prospectus-level work in priority
order and the estimated funding needed to complete
this work. According to GSA Portfolio Management
officials, this plan will be updated on an annual
basis, and it may also include an estimate of the
nonprospectus-level funding that will be allocated
each year to GSA's regions. The officials told us
that the exact format and content of the 5-year
plan are still evolving and are somewhat dependent
on the development of the asset business plans.
The asset business plans will ultimately provide
much of the information that will become part of
the 5-year plan.

     According to GSA officials, the 5-year repair
and alteration plan is currently intended to be
used as an internal document to communicate and
share total repair and alteration requirements
among program managers in headquarters and the
regions. GSA program officials said they envision
that the plan will identify and prioritize the
most critically needed repair and alteration
projects throughout GSA's building inventory. With
this information, program officials should be able
to more easily target the buildings with the
greatest needs, be in a better position to
allocate scarce resources, and monitor progress in
reducing the inventory of major repair and
alteration work. These officials told us that they
prefer to call the 5-year plan a 3- to 5-year
investment outlook.  They told us that the plan
will be more than a listing of projects and is
intended to be an overall strategy document that
will change annually so that it will best address
current and future repair and alteration needs.

     GSA officials said that they would be willing
to share the 5-year plan with OMB officials and
congressional oversight committees because the
plan could be a useful oversight tool. They
realize that the plan would provide OMB and
congressional officials a broader context on the
magnitude of GSA's repair and alteration needs and
a better understanding of the trade-offs involved
in funding or not funding requested projects.

     To successfully implement the initiatives
discussed above, GSA officials realize that they
need consistent, accurate, and complete
information on all repair and alteration
requirements. They said that the current computer
system-IRIS-is capable of providing reliable data.
However, they recognize that the quality and
consistency of IRIS data need improvement. They
also recognize that other tools are needed to
provide more consistent cost estimates and updates
and comparable priorities among regions. According
to these officials, the IRIS system was changed in
July 1999 to record when new work requirements
were entered into the inventory.  They also said
that they have other actions under way and planned
that will establish standards for and measures of
data accuracy in IRIS and other Public Buildings
Service systems. They went on to say that GSA is
also testing software packages that are supposed
to (1) consistently record and track the status of
each identified repair and alteration work item,
(2) develop more accurate cost estimates for work
items, and (3) assist in establishing priorities
for identified repairs and alterations.

     GSA officials estimate that the asset
business plan and 5-year repair and alteration
plan initiatives should be completed within the
next 2 years. However, they do not have an action
plan with specific time frames that could guide
their development and implementation and better
promote their chances of success. Such a plan
could, among other things, clearly lay out
expectations, serve as a baseline to gauge
progress and performance, and be used to hold
project managers accountable for results.

     In addition to these ongoing initiatives, GSA
has developed a strategy that is aimed at
producing more revenues for FBF to help respond to
its multibillion-dollar repair and alteration
needs. Specifically, GSA program officials give
priority to those repair and alteration projects
that have the greatest potential to increase the
inventory, desirability, and value of rentable
space. When previously vacant space is rented,
additional revenues are generated for FBF, making
more funds available for new obligational
authority to be provided by Congress for repairs
and alterations. GSA officials also said they are
exploring other ways to increase funds in FBF.
They said that one way is to try to get approval
to retain revenues from sales of assets no longer
needed by the government. They said they are also
considering exploring whether Congress would be
receptive to directly appropriating funds for the
repairs and alterations program and have GSA repay
these appropriations from additional rent revenues
generated from completed projects.

     Finally, GSA has made its repair and
alteration program a part of its annual
performance plan. Specifically, GSA's fiscal year
1999/2000 plan included three performance goals:
(1) complete all repairs and alterations on time,
(2) minimize cost escalation on repairs and
alterations, and (3) meet client agency space
needs at the best value to the client and
taxpayer. Although these goals do not specifically
address the issues discussed in this report, they
recognize the importance of effective repair and
alteration program management and the need to be
accountable for producing measurable results.
Given this, GSA's annual performance plan process
could be a vehicle for discussing the merits of
developing specific goals related to these issues.

Conclusions
     GSA data indicate that billions of dollars
are needed to satisfy the repair and alteration
needs in government-owned buildings that it
manages. These repairs and alterations are needed
so that buildings can better meet quality, health,
and safety standards. If this work is not done,
buildings could continue to deteriorate and become
functionally obsolete. Funding limitations,
inadequate program data, and the lack of a
strategic approach to meeting repair and
alteration needs impede GSA's ability to satisfy
its multibillion-dollar repair and alteration
needs and respond to future demands. This is not a
new message. The situation today is not much
different than it was in 1991, when we last
reported on this issue. Hopefully, things will
change.

     GSA recognizes that more needs to be done to
improve the management and oversight of its
repairs and alterations program. Given this, GSA
has several initiatives under way that are aimed
at increasing funding, improving program data, and
developing a more strategic approach to meeting
its repair and alteration needs. If these
initiatives are fully developed and effectively
implemented, they could satisfy our previous
recommendations, improve program oversight, and
promote a more strategic approach to resolving the
building disinvestment problem.  GSA officials
estimate that these initiatives will be completed
within the next 2 years. However, they do not have
an action plan with specific timeframes that could
guide their development and implementation. Such a
plan could better promote the chances for these
initiatives to succeed.

Recommendation
We recommend that the Administrator of GSA develop
an action plan, with time frames, that will (1)
guide the development and implementation of its
initiatives and (2) serve as a baseline for
gauging progress and performance.

Agency Comments and Our Evaluation
     On March 14, 2000, the Assistant
Commissioners for the Office of Portfolio
Management and the Office of Business Performance
and other program officials from GSA's Public
Buildings Service provided us with oral comments.
They generally agreed with the message and
recommendation in this report. These officials
said that GSA is making progress in
institutionalizing its thinking and planning about
how best to strategically respond to its
multibillion-dollar repair and alteration needs.
According to these officials, their efforts to
develop and implement the initiatives discussed in
this report and GSA's use of capital allocation
methods to validate and prioritize its projects
are indicators of such progress. They pointed out,
however, that even if they are successful in
developing and implementing the current
initiatives to improve the repairs and alterations
program, additional resources will be needed to
meet the overall repair and alteration needs in
the inventory.

     We commend GSA for its efforts.  However, it
is important to recognize that if GSA is to have a
more strategic approach to meet its repair and
alteration needs, it must effectively develop and
implement its current initiatives.  As previously
mentioned, GSA officials estimate that the asset
business plan and 5-year repair and alteration
plan initiatives should be completed within the
next 2 years.  Given this, it is too early to tell
how successful they will be in providing a more
strategic approach to meeting repair and
alteration needs.  These officials also provided
technical comments, which we incorporated where
appropriate, to provide further clarity and
context to some of the issues discussed.

     As agreed with your offices, unless you
publicly announce the contents of this report
earlier, we will not distribute it until 15 days
from its issue date.  At that time, we will send
copies of the report to the Chairmen and Ranking
Minority Members of committees with jurisdiction
over GSA; the Honorable David J. Barram,
Administrator, GSA; and the Honorable Jacob J.
Lew, Director, OMB.  We will also send copies to
interested congressional committees and make
copies available to others on request.

Major contributors to this report were Gerald
Stankosky, James G. Cooksey, William Dowdal,
Martin DeAlteriis, Joshua Bartzen, and Thomas
Baril.  If you or your staff have any questions,
please contact me on (202) 512-8387 or
[email protected].

     Bernard L. Ungar
Director, Government Business
   Operations Issues

_______________________________
1Federal Buildings: Actions Needed to Prevent
Further Deterioration and Obsolescence (GAO/GGD-91-
57, May 13, 1991).
2The estimated amount was calculated using GSA's
automated database of repair and alteration work,
referred to as IRIS. We found that IRIS contained
the best data that were available for estimating
total needs; however, we adjusted these data in
cases where limited testing showed inaccuracies
and incompleteness. These data problems are
discussed later in the text.
3Stewardship of Federal Facilities: A Proactive
Strategy for Managing the Nation's Public Assets,
National Research Council, 1998.
4 A prospectus provides detailed information about
the size, cost, and location of the proposed work;
justification for proceeding with design and
construction; and economic analyses of the
alternatives to doing the requested repairs and
alterations.
5Although GSA's goal was $900 million in new
obligational authority for funding repairs and
alterations for each year, the President's fiscal
year 2001 budget request included only $721
million for repair and alteration work.
6The $4 billion total does not include the $183.5
million needed to make repairs and alterations at
the Agriculture South Building. It is anticipated
that this work will continue to be funded through
direct appropriations to the Department of
Agriculture rather than through FBF.
7 A prospectus is not required for projects
costing more than the threshold amount if the work
is considered recurring, such as a major interior
painting project.
8An asset business plan provides a wide array of
information related to a building's physical
characteristics, the rent revenues and expenses
associated with operating the building, and the
repair and alteration requirements that have been
identified.

Appendix I
Objectives, Scope, and Methodology
Page 23GAO/GGD-00-98 Building Repairs and Alterati
ons
Our objectives were to develop information on (1)
the extent of repairs and alterations that have
been identified at government-owned buildings
managed by the General Services Administration
(GSA), (2) factors that impede GSA's ability to
satisfy repair and alteration needs, and (3) GSA's
efforts to improve its management of repairs and
alterations at federal buildings. We did most of
our work at GSA's Public Buildings Service (PBS)
headquarters in Washington, D.C., and at 2 of
GSA's 11 regions-the Greater Southwest Region
located in Fort Worth, TX, and National Capital
Region located in Washington, D.C. In addition, we
interviewed GSA program officials responsible for
identifying and managing repairs and alterations
in the remaining nine regional offices.

To meet our first objective, we reviewed GSA's
policy and procedures applicable to the repairs
and alterations program and interviewed officials
responsible for identifying and obtaining funding
for repair and alteration work.1 We then obtained
and analyzed information contained in the
Inventory Reporting Information System (IRIS)-a
GSA computerized database of information on
building repairs and alterations. According to GSA
database managers, the data we used were
representative of the repair and alteration needs
contained in IRIS as of October 1, 1999. Using
IRIS, we identified the total number of and
corresponding dollar estimates for the repairs and
alterations identified as being in inventory for
the 1,682 federal buildings managed by GSA.2
According to GSA officials, repairs and
alterations that are in inventory have not yet
been funded. GSA database managers said that
estimated design, management, and inspection costs
associated with doing repair and alteration work
are generally included in the construction cost
estimate. However, there are cases when regions
would enter the design, management, and inspection
costs separately in IRIS. The overall estimate of
repair and alteration needs was developed on the
basis of the construction cost estimate because
GSA did not provide us with the estimated design,
management, and inspection costs that were
identified separately. We also used IRIS to obtain
other information, such as the types of repairs
and alterations and the name and location of the
buildings needing repairs and alterations.

We interviewed GSA headquarters and regional
officials about the process involved in
identifying and recording repair and alteration
needs. These officials told us that regional
staffs are responsible for identifying and
entering information about repairs and alterations
into IRIS. The regions are also responsible for
developing and implementing verification
procedures to ensure that the data entered into
IRIS are accurate and complete. According to GSA
officials, these procedures vary from region to
region, and their overall effectiveness has not
been assessed. These officials also recognize that
there are data quality problems with IRIS.
However, they believe that the information
contained in IRIS is the best available to
identify repair and alteration work at federal
buildings and estimate the cost of completing
these work items.

     After analyzing information on the dollar
amounts of the repairs and alterations shown as
being in inventory at the end of fiscal year 1999,
we selected 44 buildings with the highest dollar
cost of work for detailed review. Each of these
buildings needed repairs and alterations that were
estimated to cost $20 million or more. We obtained
and analyzed detailed IRIS reports that contained
specific information about the repairs and
alterations at each of these buildings. We did
this analysis to document the types of work that
needed to be completed at these buildings; the
types and locations of the buildings; and, to the
extent possible with IRIS data, the length of time
that the repairs and alterations had been delayed.
The 44 buildings represented less than 3 percent
of the federal buildings that needed repair and
alteration work at the time of our review.
However, they accounted for about 60 percent of
the nearly $4 billion in total identified work.

     To accomplish our second objective, we
examined historical and projected repair and
alteration funding and GSA's processes for
managing and overseeing the repairs and
alterations program. We reviewed GSA's
appropriations acts and obtained a general
understanding of how the Federal Buildings Fund
(FBF) operates. We then determined the total
revenues available in FBF and the amounts of money
that were allocated to GSA's repair and alteration
program during the 7-year period covering 1994
through 2000. We had the Chief Financial Officer
of PBS prepare an analysis projecting FBF revenues
and the amounts of funding that will likely be
available to pay for repairs and alterations over
the next 5 fiscal years--2001 through 2005.

     We also consulted with PBS officials on the
best way to estimate the dollar amount of new
repair and alteration work that will enter the
inventory during the next 5 years. PBS officials
told us that they did not know the amount of work
that will be added to the inventory, and they do
not have a methodology that is routinely used to
estimate the amount of new repair and alteration
work added to the inventory of existing work.
However, they said that it would be reasonable to
assume that each year the dollar value of new
repair and alteration work will equal 2 to 4
percent of the aggregate current replacement value
of GSA's portfolio.3 The PBS officials pointed out
that the National Research Council's recent report
on facilities management cited the 2- to 4-percent
guideline as being widely quoted in the facilities
management literature. Therefore, the PBS
officials agreed that it is a reasonable benchmark
for estimating new repair and alteration work.

     Once we had obtained the projected funding
amounts for making repairs and alterations,
determined the total amount of work in inventory
that still needed funding, and excluded the
estimated cost for repair and alteration work at
one building that is expected to continue to be
funded with direct appropriations to the agency
rather than through FBF, we calculated the amount
of work that will likely still exist at the end of
each of the next 6 fiscal years.

     We developed our understanding of how GSA
manages its building repairs and alterations by
examining appropriate policies and procedures and
interviewing program officials at headquarters in
Washington and in each of the 11 regions. We
focused our efforts on determining how GSA had
changed its repairs and alterations program since
we last reviewed the program in 1991.
Specifically, we assessed GSA's efforts to
implement the recommendations we made in 1991
aimed at improving data quality and adopting a
more strategic approach for meeting repair and
alteration requirements.4

     To accomplish our third objective, we
interviewed GSA officials about ongoing or planned
initiatives directed at improving the management
and oversight of building repairs and alterations.
After determining the specific efforts that were
under way at the time of our fieldwork, we met
with GSA officials to discuss each initiative and
obtained available documentation. We discussed
with GSA officials how each of its efforts is
expected to improve the management and oversight
of repairs and alterations and the projected dates
for implementing the ongoing efforts.

     We did our work between August 1999 and March
2000 in accordance with generally accepted
government auditing standards. We did not complete
a reliability assessment of all data contained in
IRIS; but we did, in coordination with GSA
officials, conduct limited testing of the accuracy
and reasonableness of these data. We did not
independently assess the reasonableness of GSA's
cost estimates. We also asked staff in each GSA
region to review and validate the detailed IRIS
information on the 44 buildings that we used to
profile GSA's repair and alteration needs. There
were problems with the completeness and accuracy
of the IRIS data. As discussed in the report, we
adjusted the data used in our analyses when we
identified errors. On March 14, 2000, we received
oral comments on a draft of this product. GSA's
comments are discussed and evaluated in the
report.

_______________________________
1 GSA's repairs and alterations program does not
include minor repairs and maintenance, which
typically includes work that costs less than
$10,000 and is funded out of operating revenues.
2 IRIS does not report cost estimates in constant
dollars (for example, all cost estimates are
expressed in terms of fiscal year 2000 dollars).
We could not convert these estimates to constant
dollars because IRIS does not provide needed
information-e.g., the year in which the cost
estimate was made.
3 When we did our work, GSA estimated the current
replacement value at $30 billion, but the fiscal
year 2001 budget justification shows the estimate
increased to $33 billion.
4 Federal Buildings: Actions Needed to Prevent
Further Deterioration and Obsolescence (GAO/GGD-91-
57, May 13, 1991).

Appendix II
Information on GSA's Buildings With the Highest
Dollar Value of Repair and Alteration Needs as of
September 30, 1999
Page 25GAO/GGD-00-98 Building Repairs and Alterati
ons
Rank  Building namea  City          Stat  Estimated  Number Histori      Gross
                                 e       cost of      of       c     square
                                        unfunded    work statusb       feet
                                     repairs and   items
                                     alterations
                                             (in
                                       millions)
1     Dwight D.       Washington    DC       $186.7      14   Yes      691,783
     Eisenhower
2     Agriculture     Washington    DC       $183.5       1    No    2,169,360
     Southc
3     Commerce        Washington    DC       $137.0       9    No    1,756,362
4     Richard Bolling Kansas City   MO        $99.0      11    PC    1,205,582
     FB
5     Justice         Washington    DC        $88.5      25   Yes    1,052,827
     Building
6     FOB 3           Suitland      MD        $86.6      15    No      576,058
7     FOB 8           Washington    DC        $85.0       7    No      522,491
8     11000 Wilshire  Los Angeles   CA        $74.9      30    No      543,709
9     AJ Celebrezze   Cleveland     OH        $66.6      16    No    1,462,628
     FB
10    Interior        Washington    DC        $65.0       2   Yes    1,217,477
11    GSA             Washington    DC        $65.0      11   Yes      774,848
12    JW McCormack PO-Boston        MA        $63.3       6    No      627,996
     CH
13    Wilbur J Cohen  Washington    DC        $62.9      25    No    1,055,935
     Building
14    Chet Holifield  Laguna        CA        $56.3      33    No      949,249
     FB              Niguel
15    Forrestal       Washington    DC        $55.4       6    No    1,432,884
16    State           Washington    DC        $55.1       3    No    2,422,055
17    WM. S. Moorhead Pittsburgh    PA        $50.9      20    No      785,127
     FB
18    Los Angeles CH  Los Angeles   CA        $48.4      29    PC      770,958
19    BS Main         Calexico      CA        $45.4       1    No       47,053
     Building
20    Edw Zorinksky   Omaha         NE        $45.2       4    PC      415,567
     FB
21    Byron G.        Denver        CO        $44.8      10    No      754,012
     Rodgers FB-CH
22    Los Angeles FB  Los Angeles   CA        $43.5      22    No    1,111,356
23    GSA-ROB         Washington    DC        $40.0       8    No      803,917
24    John C.         Chicago       IL        $38.4      34    No    1,242,482
     Kluczynski FB
25    NYA 202         Washington    DC        $37.6       9    No      172,451
26    Mary E Switzer  Washington    DC        $36.9      14    PC      593,738
     Memorial
27    Emanuel Celler  New York-     NY        $36.3      18    No      379,498
     FB              Kings
28    Frank E. Moss   Salt Lake     UT        $34.1      10   Yes      210,603
     CH              City
29    IRS Center      Andover       MA        $33.3       7    No      400,502
30    Jackson FB      Seattle       WA        $31.2      31    No      822,855
31    John E. Moss FB-Sacramento    CA        $30.1      43    No      392,367
     CH
32    Kansas City CH  Kansas City   MO        $30.0       9    PC      585,901
33    DFC Building 20 Lakewood      CO        $28.6       5    PC      377,969
34    J Edgar Hoover  Washington    DC        $28.3       6    No    2,146,322
     Building
35    Potter Stewart  Cincinnati    OH        $27.5      28    PC      499,841
     CH
36    Richard B.      Atlanta       GA        $27.2      18    No    1,281,446
     Russell
37    St. Louis FOB   St. Louis     MO        $25.6      22    PC      471,024
38    Sen. Dennis     Albuquerque   NM        $24.8      18    No      318,469
     Chavez FB
39    Albuquerque FB  Albuquerque   NM        $23.9      15    No      288,150
40    Milwaukee FB-CH Milwaukee     WI        $23.7       7   Yes      500,247
41    Theodore        Washington    DC        $23.7      10    No      768,530
     Roosevelt
42    John A Campbell Mobile        AL        $23.7      13    PC      117,462
     CH
43    Metzenbaum CH   Cleveland     OH        $21.9      12   Yes      258,221
44    San Diego FB-CH San Diego     CA        $21.5      37    No      913,146
TOTAL                                      $2,357.3     674          
S
a  Definitions for the Building Name abbreviations
are: FB-Federal Building; FOB-Federal Office
Building; PO-Post Office; CH-Courthouse; BS-Border
Station; ROB-Regional Office Building.
b The abbreviation "PC" stands for Potential
Candidate.  These buildings meet the historic
status criteria, such as age, but have not yet
been officially designated as historic buildings.
c  Agriculture South is a government-owned
building in GSA's inventory.  However, this
building is unique in that the Department of
Agriculture has been getting direct appropriations
to do the repair and alterations work at this
building. According to Agriculture's Director of
Design and Construction Division, the estimated
cost of repair and alterations for this building
ranged from $183.5 million to $222 million.  We
chose to use the more conservative estimate for
our analysis.

*** End of Document ***