WASHINGTON – Sen. Tom Carper (D-Del.), Chairman of the Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security will hold a hearing to address: "Federal Leased Property: Are Federal Agencies Getting a Bad Deal?" The hearing will take place on Thursday, August 4, 2011 at 2:30 p.m. in room 342 of the Dirksen Senate Office Building in Washington, D.C.

Federal agencies rely extensively on leasing, occupying about 635 million square feet of leased building space domestically in fiscal year 2009 according to data from the Federal Real Property Profile. Over half of the leased square footage is used for offices, with the remaining space allocated for a mix of uses such as warehouses, family housing, and schools. This is despite findings from numerous studies that have shown that building ownership often costs less than operating leases. This over-reliance on costly leasing, particularly for long-term space needs, is one of the primary reasons that federal real property management remains on the Government Accountability Office's list of "high risk" government activities.

Furthermore, while U.S. General Services Administration (GSA) generally serves as the government's central leasing agent for civilian properties, many agencies have their own authority independent of GSA to lease and procure new space. As a result, the authority to lease space has proliferated, in some cases to agencies that neither have the expertise or trained personnel necessary to manage such authority. This has resulted in millions of dollars in additional costs to the federal government. For example, the U.S. Securities and Exchange Commission (SEC) is an agency that has been granted independent leasing authority and in July 2010, entered into a sole source lease for 900,000 square feet of space at the Constitution Center in Washington, DC that would have cost taxpayers $556 million over 10 years. Although the SEC was granted independent leasing authority by Congress in 1990, the SEC Office of the Inspector General reported that the agency lacked adequate policies and procedures for managing its leasing actions.

While the Obama Administration has made progress in address long-standing real property problems, efforts to address the leasing challenge have been limited. Sen. Carper's hearing will identify challenges to effectively managing federal real property, assess progress made to date in addressing weaknesses in federal government's lease management, and evaluate alternative methods to reduce agencies' reliance on leased space for long-term needs when ownership would be cost-effective.

"When it comes to federal property management, it's clear to me and others that we can get better results and save money," said Sen. Carper. "Studies have shown that the federal government needs to do a better job of improving the management of its real estate portfolio, particularly with the properties it leases. Unfortunately, the federal government's failure to effectively manage leased property ends up costing Americans millions of dollars every year. As the nation watches government leaders negotiate a plan to make our country fiscally stable, we must continue to look into every nook and cranny of federal spending for additional savings. While the Administration has begun to address these problems and has made some initial progress toward improving federal property management, we can – and must -- do more."

For more information or to watch a live webcast of the hearing, please click here.

WHAT:
U.S. Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security hearing, "Federal Leased Property: Are Federal Agencies Getting a Bad Deal?"

WHEN:
Thursday August 4, 2011
2:30 p.m.

WHERE:
342 Dirksen Senate Office Building
Washington, D.C.

WITNESSES:
(subject to change)

David Foley
Deputy Commissioner, Public Buildings Service
U.S. General Services Administration

David Kotz
Inspector General
U.S. Securities and Exchange Commission

Jeff Heslop
Chief Operating Officer
U.S. Securities and Exchange Commission

James Sullivan
Director, Office of Asset Enterprise Management
U.S. Department of Veteran Affairs

David Wise
Director, Physical Infrastructure Issues
U.S. Government Accountability Office

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