Plain Talk about Real Property Realities

The Office of Management and Budget (OMB) is not likely to support or fund reforms of real property asset management practices during the remainder of the current Administration. No new money will be released, and no new initiatives will be introduced. Rather, OMB actions result in making real property professionals’ jobs more difficult so that agencies eventually will do whatever they can to relieve the constant pressure.

VISTA Vice President for Corporate Development Ray Summerell provided a candid, thought-provoking and entertaining presentation at the April 10 monthly luncheon of the Federal Real Property Association (FRPA). Titled “Federal Real Property Reporting Compliance: ROI in Today’s Budgetary Realities,” the overview offered plain talk about where demands for improved performance originate.

Pulling from resources including the General Services Administration (GSA), the Office of Management and Budget (OMB), and Congress, Summerell urged luncheon attendees to think of ways to tie their real property goals to their agencies’ missions. Without such a linkage, Summerell argued, real property programs will languish due to insufficient budgets and funding.

Of course, greater media attention would prompt better-considered solutions from government to improve processes – but federal real property “isn’t seen as sexy enough to make it into The Washington Post,” Summerell said. And in turn, the pressures to do better with less money are becoming increasingly painful to real property professionals.

The near term effects are troubling. Perhaps without meaning to, OMB’s overall tactic of applying unrelenting pressure without demonstrable relief, recognition of accomplishments within funding constraints or support for laws that mandate transparency or accountability is “like death by a thousand cuts,” Summerell said. As a strategy, it may work, but meaningful reform and improvement will remain elusive.

A scary number

According to Summerell, OMB’s publicly stated goal (statements by OMB Deputy Director Clay Johnson in 2005) is to reduce surplus real property by five percent (or $15 billion, by OMB’s own estimates) by 2009. If that estimate of surplus is correct, Summerell noted, “that’s a scary number.”

“Based on the government’s own numbers, there could be excess property equal to 1.186 billion square feet, or 32 percent of the entire portfolio,” Summerell continued.

“How many believe that 32 percent of the inventory is excess?” he asked. “No one. And yet these are the kinds of arguments that are out there, working against us.”

Summerell also noted that newly proposed legislation is likely to expose more real property to surplus considerations. He cited draft Senate telework legislation S.1000, proposed by Senator Ted Stevens (R-AK) and Senator Mary Landrieu (D-LA), which would make teleworking an option for any federal employee whose job was not site-specific for reasons of security or other special purpose.

Real property professionals may need to be prepared to justify maintaining their current inventory if this legislation is adopted, Summerell said. For example, he explained, “assume that one-third of non-military real property may not lend itself to telework, because of security or special purpose considerations. That means that in some circles the remaining two-thirds of the inventory will have to be reviewed carefully to determine whether as much as half becomes surplus, as teleworking becomes prevalent.

Certainly, it’s unlikely that a slice of the inventory so large will become surplus even if teleworking is widely accepted, said Summerell. But, perceptions are as difficult to argue against as facts. Real property asset management with better data can help counter such misconceptions.

Accurate data is key

The key to real property asset management lies in the accuracy of data, and the tools to properly analyze that data. Summerell pointedly asked attendees: “How accurate is your data? Do you have the right tools – but more importantly, do you have sustainable data, processes and information on which those tools can be used?

“Can you trust that your data will enable you to make good decisions?” Summerell asked. “Even if you’re 90 percent confident in your data, the 10 percent that’s still in question calls the entire data set into question. It only takes one bad answer to instill a lack of confidence.”

Getting good data costs some up-front money, Summerell acknowledged. And yet, under a Continuing Resolution Authority that limits funding and appropriations for the foreseeable future, new programs are at greater risk for curtailment than established programs. Additionally, administrative programs are at greater risk than mission critical programs.

Summerell looked at the example of the FAA for a comparison of administrative versus mission objectives. “In a choice between ‘fix buildings versus don’t crash airplanes,’ which one wins?” he asked.

In this instance, the only way to do effective real property asset management work is to tie fixing buildings to not crashing airplanes. If you can demonstrate the negative effect of deferred maintenance or spending for surplus inventory on air safety, Summerell explained, you start building a framework for analysis that can, in time, bridge the funding gap.

Cost avoidance by better real property asset management is one way of retroactively paying for data collection, validation and verification, Summerell explained. He used an example from the military, in which a branch of the armed services, by their own estimates, saved over $1 billion in unnecessary construction costs through a regimented real property planning and management program.

Copies of Ray Summerell’s presentation may be obtained by contacting Mr. Summerell at ray.summerell@vistatsi.com. The presentation will also be placed on the FRPA Web site: www.frpa.us.