How GSA Handles Asset Management

As of 2006, GSA has disposed of more than 240 assets, saving an approximate $100 million in costs. That’s according to David Foley, Acting Deputy Assistant Commissioner for Real Estate Portfolio Management. Foley explained the GSA’s approach to asset management at the monthly luncheon of the Federal Real Property Association on September 11.

GSA gets 100% of proceeds from disposal of its own assets, Foley noted. GSA also is allowed to keep proceeds on outleasing, through an addition to its 2005 appropriation request.

GSA’s success in asset management – the organization was among the first to reach green in Executive Order 13327 compliance – dates back to 1995, when the Office of Portfolio Management was formed, Foley explained. In 1998, GSA began linking budget to performance. “What gets measured gets done,” Foley said, and vacant space went down.

GSA pays particular attention to restructuring, Foley said, focusing resources on the strongest performing assets. The organization looks at the hold period for every asset, especially examining client requirements, cost to reinvest or lease, and risk related to doing nothing.

According to Foley, GSA has tracked utilization since 1997, which gave them a benchmark against time on such parameters as operating costs, appropriate condition, and disposal of assets. Monitoring utilization his allowed GSA to demonstrate inventory vacancy rates below 1.5% across a five-year tracking period.

Foley gave several examples of what GSA considers “appropriate utilization’ of inventory. GSA “elected early termination” of a contract in August 2006 on the Bethesda Towers in the Maryland suburbs of Washington, DC because it was determined the property was not needed. Warehouse space in Auburn, WA was converted to state-of-the-art facility for the Social Security Administration. Foley also gave the example of a parking lot in Tulsa, OK, which was exchanged for another across the street from a federal facility, enabling better use of the asset.

GSA is also arduous about maintaining costs at appropriate levels, Foley said. Using central plant air conditioning, for example, has allowed GSA to reduce energy consumption. In FY 2006, energy consumption was down by 4.4% from GSA’s 2003 baseline.

Current work on real property asset management is the standardization of a federal screening process – one central location, with one Web site. At present, Foley said, every agency does something different, but each agency has to screen against every other to determine whether an asset can be deemed surplus.