Repairs and Alterations Backlog at the General Services Administration

June 12, 2020 R46410

Repairs and Alterations Backlog at the General June 12, 2020
Services Administration
Garrett Hatch
The General Services Administration (GSA), often referred to as “the government’s landlord,”
Specialist in American
provides workspace for 1.2 million federal employees across more than 50 federal agencies. Half
National Government
of the space that tenant agencies occupy (183.8 million square feet) is located in buildings that

GSA owns. As the property owner, GSA is responsible for ensuring that repairs and alterations
(R&A) are completed in a timely manner. When R&A needs are deferred, a number of negative

consequences may result, including health and safety code violations, deterioration of building
systems, increased operating costs, and decreased asset value. For GSA-owned buildings, which have an average age of 49
years, R&A projects are often essential for extending the life of the property.
Over the past four decades, GSA has accumulated a multibillion-dollar R&A liability. In 2001, GSA’s unmet R&A needs
reached an estimated $4 billion, according to the Government Accountability Office (GAO). Auditors at GAO attributed this
growing liability partly to inadequate information—GSA did not have the data needed to make informed decisions. GAO
recommended that GSA develop its capacity to (1) identify its total R&A needs across all 11 regions, (2) establish the
relative benefits or priorities of competing projects, and (3) propose a strategy and funding plan for repairing or modernizing
its most seriously deteriorated buildings. Since that time, GSA has gradually implemented leading practices for R&A
management that have enhanced the agency’s data collection and analysis capabilities. In addition, GSA has developed tools
for prioritizing projects and monitoring their progress from authorization to completion.
GSA’s project management enhancements have not eliminated its R&A backlog. At the end of FY2019, GSA reported that it
would need $3.39 billion for R&A projects needed to bring its inventory up to acceptable condition. The agency argued, as it
has consistently, that years of insufficient funding have been a significant obstacle to meeting its R&A responsibilities.
Appropriations data show that from FY2000 to FY2019, GSA received 76% of the funding it requested for R&A projects—a
difference of about $4.3 billion. GSA’s construction and acquisition projects have also been funded at levels below the
amount requested on a regular basis. As a consequence, some GSA tenants are unable to vacate older buildings with higher
R&A costs and move into newly built facilities. When GSA is able to relocate tenants from an aging building into a new one,
it may then dispose of the building and eliminate its R&A liability for that property.
The most direct way to expand funding for GSA’s R&A projects would be to increase appropriations. Other options might
include using the expedited disposal process established under the Federal Assets Sale and Transfer Act (FASTA), which
enables agencies to create a list of properties they would like to sell, convey, or redevelop. If their recommendations are
approved—by a newly established Public Buildings Reform Board and the director of the Office of Management and Budget
(OMB)—then the disposals are authorized. One disposal strategy might be to target older properties with multimillion-dollar
R&A needs. These buildings represent approximately 5% of GSA’s inventory and as much as 40% of its R&A liability.
Another option for augmenting GSA’s appropriations would be to expand use of its public-private partnership (PPP)
authority. A PPP is an agreement between an agency and a private-sector partner whereby the agency allows the partner to
use federal buildings or land in exchange for the partner renovating or redeveloping the property. In this way, the agency
reduces its R&A liability without expending any capital. PPPs are complex contracts, however, and GSA has been cautious
in its utilization of this authority.
The establishment of a Federal Capital Revolving Fund (FCRF) might provide an indirect method of freeing up
appropriations for R&A projects. GSA’s capital investment accounts—R&A and Construction and Acquisition—compete
with each other for limited funding. Construction and acquisition projects often require hundreds of millions of dollars, and
when they are funded it necessarily reduces the capital funds available for R&A projects. The FCRF would provide a
separate source of funding to build or purchase new space, potentially reducing the pressure GSA’s construction needs put on
its capital funds and increasing the amount available for R&A projects.
In response to the COVID-19 pandemic, federal agencies have permitted tens of thousands of employees to work from home.
Permanently expanding telework might reduce the need for workspace and enable GSA to dispose of aging buildings.
Conversely, should government agencies require a minimum distance between employees in order to reduce the likelihood of
transmitting an illness at the office, GSA may need to acquire additional space and alter existing space.
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Repairs and Alterations Backlog at the General Services Administration

Background
The federal government owns approximately 232,000 buildings that have a total estimated
replacement value of more than $1 trillion.1 As property owners, federal agencies are generally
responsible for the cost of maintaining and repairing their building assets. Agencies are obligated
to ensure that their buildings operate cost effectively, retain their value, and provide safe work
environments that are conducive to productivity.2 Given that buildings and the systems within
them have finite lives, ongoing repairs and alterations are needed to keep each property operating
at an acceptable level. Electrical systems, roofs, pipes, and elevators, for example, must often be
repaired or replaced during the useful life of a building. When agencies provide timely repairs
and alterations (R&A), they extend the useful lives of their buildings and preserve the quality of
the work environments. When needed repairs and maintenance are delayed, buildings often see an
increase in operating costs as systems become less efficient, a decrease in asset value as
functionality is reduced, and a fiscal liability that will grow until the needed work is completed in
the future.
The General Services Administration (GSA) is one of the government’s largest property holders.
Established by the Federal Property and Administrative Services Act of 1949, GSA provides real
property services—including the acquisition, operation, and disposal of buildings and land—to
any federal agency that lacks the authority to do so itself.3 For this reason, GSA is sometimes
referred to as “the government’s landlord.” With control over more than 1,600 owned buildings
and 183 million square feet, GSA has accrued a multibillion-dollar R&A liability.4 GSA’s
building inventory has unique characteristics that have contributed to the growth of this liability,
as have weaknesses in the agency’s management of its R&A needs—although, as discussed in the
following sections, GSA has implemented a number of new technologies and procedures to
enhance its R&A management. This report will also examine the amount of resources GSA has
been provided with to fulfill its R&A responsibilities.
GSA’s portfolio provides space for 1.2 million federal employees.5 In addition to housing its own
workforce, more than 50 other federal agencies acquire space through GSA,6 including, in order
of total occupied square feet, the Department of Justice, the Department of Homeland Security,
the federal judiciary, the Social Security Administration, the Department of the Treasury, the
Department of Health and Human Services, the Department of the Interior, and the Department of
Agriculture.7
Given this diverse customer base, GSA must provide space in a variety of building types. GSA’s
portfolio includes office buildings, courthouses, warehouses, land ports of entry, laboratories, and
data processing centers, among other space categories.8 These buildings enable tenant agencies to

1 U.S. Government Accountability Office (GAO), Financial Audit: FY 2017 and 2016 Consolidated Financial
Statements of the U.S. Government, GAO-18-316R, February 2018, p. 30, https://www.gao.gov/assets/700/690123.pdf.
2 GAO, Federal Real Property: Government’s Fiscal Exposure from Repair and Maintenance Backlogs Is Unclear,
GAO-09-10, October 2006, p. 6, https://www.gao.gov/assets/290/282802.pdf.
3 P.L. 81-152.
4 GSA, FY2019 Agency Financial Report, November 2019, p. 100, https://www.gsa.gov/reference/reports/budget-
performance/annual-reports/2019-agency-financial-report.
5 GSA, “About the Public Buildings Service,” https://www.gsa.gov/about-us/organization/public-buildings-service.
6 GSA, FY2019 Agency Financial Report, p. 19.
7 GSA, FY2018 State of the Portfolio Snapshot, p. 5, https://www.gsa.gov/cdnstatic/FY18_SOTP_Snapshot%20rev.pdf.
8 GSA, “GSA Properties,” https://www.gsa.gov/real-estate/gsa-properties.
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carry out a range of missions, from border security to the prosecution of federal criminal cases.
To help agencies meet their real property needs, GSA first tries to find space in an underutilized
or vacant federal building, whether it is owned by GSA or another agency. If no federal space is
available, GSA may enter into a lease with the private sector on behalf of another agency. In
FY2018, federal agencies occupied 368.5 million square feet in 8,746 buildings owned or leased
by GSA.9 GSA’s portfolio, measured by square feet, is nearly equally divided between the space
it owns (183.8 million square feet, 49.9%), and the space it leases from the private sector (184.7
million square feet, 50.1%).10 In terms of building status, GSA owns 1,646 properties and leases
7,100 properties.11 To provide additional context, Table 1 below shows the percent of owned and
leased space controlled by GSA compared to the space controlled by all federal agencies—
excluding the Department of Defense (DOD), which did not report data in FY2018.
Table 1. Select Data on Federally Owned and Leased Space (Excluding DOD),
FY2018
Square Feet (SqFt) Reported in Millions
Owned
Leased
Total
Owned
Leased
Total

Buildings
Buildings
Buildings
SqFt
SqFt
SqFt
Total (Non-
DOD)
111,422
14,516
125,938
884.7
254.3
1,139.0
GSA
1,646
7,100
8,747
183.8
184.7
368.5
GSA Percent
of Total
1.5%
48.9%
6.9%
20.8%
72.6%
32.4%
Source: U.S. General Services Administration, FY2018 Federal Real Property Profile Open Data Set Executive
Summary, p. 1, https://www.gsa.gov/policy-regulations/policy/real-property-policy/data-col ection-and-reports/
frpp-summary-report-library.
Notes: Federal Real Property Profile FY2018 data was drawn from 23 civilian agencies subject to the Chief
Financial Officers Act. Those agencies are the Departments of Agriculture, Commerce, Education, Energy,
Health and Human Services, Homeland Security, Housing and Urban Development, Interior, Justice, Labor, State,
Transportation, Treasury, and Veterans Affairs and the Environmental Protection Agency, National Aeronautics
and Space Administration, Agency for International Development, General Services Administration, National
Science Foundation, Nuclear Regulatory Commission, Office of Personnel Management, Small Business
Administration, and Social Security Administration. Real property data from the Department of Defense, which is
also subject to the act, were not included in the report.
The amount of owned space reported in Table 1—more than 885 million square feet—defines the
scope of the government’s R&A responsibilities. The data show that while GSA owns relatively
few buildings—1.5% of the owned inventory—it controls 21% of the total of square feet owned
by civilian agencies.12 In other words, GSA is obligated to meet one-fifth of the government’s
civilian agency R&A needs.13 This obligation is, from a fiscal perspective, a liability. When GSA
builds or purchases space, it has committed the agency to ensuring that the property is in

9 GSA, “GSA Properties.”
10 GSA, FY2018 State of the Portfolio Snapshot, p. 4, https://www.gsa.gov/cdnstatic/
FY18_SOTP_Snapshot%20rev.pdf.
11 GSA, FY2018 State of the Portfolio Snapshot, p. 4.
12 GSA, Data Collection and Reports, FY2018 Summary of Findings of Open Data Set, p. 1, https://www.gsa.gov/
policy-regulations/policy/real-property-policy/data-collection-and-reports/frpp-summary-report-library.
13 GSA, FY2012 Agency Financial Report, November 2012, p. 42, https://www.gsa.gov/cdnstatic/
FinancialStatements_RequiredSupplementaryInformation.pdf.
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acceptable condition. The cost of needed R&A projects increases as buildings age. Older
properties are more likely to have structural deterioration, failing building systems, and unsafe
working conditions (such as asbestos in the ceiling).14 With an average age of 49 years, many
GSA buildings are already beyond their life expectancies.15 One study estimated that GSA-owned
buildings over the age of 61—about 11% of its portfolio—accounted for 40% of GSA’s annual
repair and maintenance costs.16 GSA’s portfolio also includes 413 buildings on the National
Register of Historic Places (NRHP), 74 of which are Registered National Landmarks.17 R&A
projects at historic properties—all of which are at least 50 years old—must meet historic
preservation guidelines. Compared to non-historic properties, R&A projects at NRHP buildings
require more time and technical expertise to complete,18 which in turn increases R&A costs at
historic buildings.19 In an effort to provide adequate, timely R&A to its aging portfolio, GSA has
sought to implement leading practices for planning and executing its R&A projects and asked for
increased funding and a wider range of revenue sources.
Repairs and Alterations Planning
GSA has had challenges to fulfilling its R&A obligations in a timely manner. In 2000, GSA
buildings required billions to bring them up to health, safety, and quality standards.20 Some
criticized the agency for providing inadequate project data to portfolio managers and
decisionmakers.21 Bernard Ungar, director of Government Business Operations Issues at GAO,
testified before the House Committee on Transportation that reliable and complete information
about identified repairs and alterations was essential, stating:
Without such information, it is difficult for the program managers to (1) quantify the total
amount of repairs and alteration needs, (2) effectively target the most critical needs and set
priorities within and among the 11 GSA regions, and (3) justify to the Office of
Management and Budget and Congress the need for additional repair and alteration
funding. Simply stated, inadequate program information does not permit informed
decision-making.22
In addition, Ungar noted that GSA needed to look at its R&A needs strategically, not on a case-
by-case basis. A strategic approach would establish a long-term plan for meeting all of its R&A
needs. To provide GSA, OMB, and Congress with the data and vision needed to make informed
decisions about which R&A projects to fund, Ungar said, the plan should:
 identify GSA’s total R&A needs across all regions,

14 GAO, Asbestos in GSA Buildings: Improved Data Would Enhance Oversight, November 2019, p. 1,
https://www.gao.gov/assets/700/695569.pdf.
15 GSA, FY2019 Agency Financial Report, p. 100.
16 GAO, Federal Buildings Fund: Improved Transparency and Long-Term Plan Needed to Clarify Capital Funding
Priorities, GAO-12-646, July 2012, p. 17, https://www.gao.gov/products/GAO-12-646.
17 GAO, Federal Buildings Fund, p. 19. See also CRS Report R45800, The Federal Role in Historic Preservation: An
Overview.
18 GAO, Federal Buildings Fund, p. 69.
19 GAO, Federal Real Property: GSA Needs to Determine Its Progress Toward Long-Term Sustainability of Its
Portfolio, GAO-15-609, July 2015, pp. 17-18, https://www.gao.gov/assets/680/671424.pdf.
20 GAO, Federal Buildings: Billions Are Needed for Repairs and Alterations, GAO/T-GGD-00-73, April 2000, p. 1, at
https://www.gao.gov/products/T-GGD-00-73.
21 GAO, Federal Buildings, p. 7.
22 GAO, Federal Buildings, p. 7.
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 establish the relative benefits or priorities of competing projects, and
 propose a strategy and funding plan for repairing or modernizing its most
seriously deteriorated buildings.23
GSA concurred but argued that a lack of adequate funding was also a major factor in the growth
of its R&A backlog, a point that will be discussed in the following section.24
By 2005, GSA had taken a number of steps to address GAO’s recommendations, such as utilizing
multiple information systems to gather data on R&A needs across its regions and conducting
more thorough building assessments.25 GSA had not, however, established a process for
determining which buildings and projects should be prioritized, nor had it proposed an agency-
wide strategy for estimating future R&A needs.26 Some were also concerned that GSA’s guidance
did not clearly link the R&A process to other asset management initiatives,27 which may have
hindered strategic decisionmaking.
A 2014 GAO audit found additional progress in GSA’s R&A planning process. Auditors
determined that GSA had implemented eight of nine leading practices recommended by GAO for
effective management of agency R&A programs.28 GSA, by implementing these best practices,
addressed many of the weaknesses identified by auditors in previous reports. According to GAO,
GSA had:
1. established clear maintenance and repair investment objectives and set priorities
among outcomes to be achieved;
2. identified types of facilities or specific buildings that are mission-critical and
mission-supportive;
3. conducted condition assessments as a basis for establishing appropriate levels of
funding required to reduce, if not eliminate, any deferred maintenance and repair
backlog;
4. established performance goals, baselines for outcomes, and performance
measures;
5. identified the primary methods to be used for delivering maintenance and repair
activities;
6. employed models for predicting the outcome of investments, analyzing tradeoffs,
and optimizing among competing investments;
7. aligned real property portfolios with mission needs and disposed of unneeded
assets; and
8. identified the types of risks posed by lack of timely investment.29

23 GAO, Federal Buildings, p. 8.
24 GAO, Federal Buildings, p. 5.
25 GSA, Office of Inspector General, Audit of Major Repair and Alterations Program, September 2005, pp. 1-8,
https://www.gsaig.gov/sites/default/files/audit-reports/A040176.pdf.
26 GSA, Office of Inspector General, Audit of Major Repair and Alterations Program, pp. 1-8.
27 GSA, Office of Inspector General, Audit of Major Repair and Alterations Program, p. 12.
28 GAO, Federal Real Property: Improved Transparency Could Help Efforts to Manage Agencies’ Maintenance and
Repair Backlogs, GAO-14-188, January 2014, p. 14, https://www.gao.gov/products/GAO-14-188.
29 GAO, Federal Real Property: Improved Transparency, pp. 14-15.
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GSA had not implemented one of the leading practices identified by GAO: It did not structure its
budget to identify the funding it allotted for new maintenance and repair projects separately from
the funding it allotted to address its maintenance and repairs backlog.30
Most recently, in 2018, GAO found that GSA had established agency-wide strategic objectives to
prioritize R&A projects for funding.31 To accomplish this, GSA started evaluating R&A projects
by their ability to contribute to agency goals, such as meeting customer needs, reducing the repair
backlog, decreasing the size of GSA’s portfolio, increasing building utilization, and getting
buildings up to code.32 Additionally, GSA had improved its data collection and developed a
system for tracking each step of an R&A project from when it is authorized to project closeout.33
Using this system, GSA reported that 99% of its major R&A projects34 were on schedule and on
budget, while 88% of its small projects were on schedule and 86% were on budget.35 GSA had
also introduced a Project Details Dashboard, which provides project-level information to staff and
managers in all regions, and a Project Award Performance Dashboard, which provides
information on planned awards for major projects.36 In addition, GSA began reporting its
maintenance and repair backlog separately from its ongoing R&A needs.37
GSA’s project management enhancements have not eliminated its R&A backlog. At the end of
FY2019, GSA reported that it would need $3.39 billion for “work needing to be performed
immediately to restore or maintain acceptable condition of the building inventory.”38 In its
FY2020 budget request, GSA requested funding for 18 major R&A projects, noting that nine of
them had been included in previous budget requests.39 If the projects continue to go unfunded,
GSA stated, there would be a negative impact on building operations and occupants, including
costly future repairs and the loss of tenants.40 The concern over increasing costs is supported by a
National Research Council study of public buildings, which estimated that there is a long-term
capital liability of $4-$5 for each $1 of deferred maintenance.41 Appropriations data indicate that
in most years there is a gap between the amount of funding GSA requested for R&A projects and

30 GAO, Federal Real Property: Improved Transparency, pp. 15-16.
31 GAO, Real Property: GSA Is Taking Steps to Improve Collection and Reporting of Repair and Alteration Projects’
Information, GAO-18-595, July 2018, p. 4, https://www.gao.gov/products/GAO-18-595.
32 GAO, Real Property, p. 4.
33 GAO, Real Property, p. 7.
34 Title 40, Section 3307, of the United States Code requires GSA to obtain congressional authorization for any lease,
construction, or R&A project in excess of a specific threshold. The threshold, which may be adjusted by GSA on an
annual basis, was $3.095 million when the GAO report was written. Major R&A projects (also called capital projects)
are those that require congressional authorization, while minor projects do not. To obtain authorization for a major
project, GSA submits a prospectus to the House Committee on Transportation and Infrastructure and the Senate
Committee on Environment and Public Works. The prospectus provides a justification for the project, along with an
estimated budget and timeline. The project is authorized—but not funded—if each committee passes a separate
resolution approving the prospectus.
35 GAO, Real Property, p. 17.
36 GAO, Real Property, p. 22.
37 GSA, FY2018 Agency Financial Report, November 2018, p. 85, https://www.gsa.gov/reference/reports/budget-
performance/annual-reports/2018-agency-financial-report.
38 GSA, FY2019 Agency Financial Report, p. 100.
39 GSA and Office of Personnel Management, FY2020 Congressional Justification, March 2019, p. 44,
https://www.gsa.gov/cdnstatic/GSA%20FY%202020%20CJ.pdf.
40 GSA and Office of Personnel Management, FY2020 Congressional Justification, p. 44.
41 National Research Council, Investment in Federal Facilities: Asset Management Strategies for the 21st Century
(Washington, DC: National Academies Press, 2004), p. 28.
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the amount provided. In some years, the difference is hundreds of millions of dollars.42 The
following section examines trends in GSA’s repairs and alterations funding streams as well as
strategies the agency has employed to augment R&A appropriations with additional savings and
revenue.
Repairs and Alterations Funding
When GSA was initially established by the Federal Property and Administrative Services Act of
1949, it was authorized to receive direct appropriations to fund all of its real property activities,
including R&A.43 In an effort to provide a more predictable source of revenue for its operating
and capital expenses, the Public Buildings Act Amendments of 1972 established the Federal
Buildings Fund (FBF) within GSA.44 The FBF was designed as a revolving fund: GSA charges
federal agencies rent, and their payments are deposited into the FBF. GSA then uses those funds
for its real property activities, including payments to private sector lessors. Congress may deposit
additional appropriations into the FBF, although that is not common.
GSA does not have the authority to spend the FBF’s full balance each year. Congress, through the
appropriations process, sets annual limits on the amount of funds that may be expended from the
FBF, known as limitations on the availability of revenue. Congress puts limits on the revenue
available for each of account within the FBF:
 Construction and Acquisition funds the purchase or construction of new facilities,
as well as major extensions to existing buildings.
 Repairs and Alterations funds repairs and alterations of existing buildings,
including the associated design and construction services.
 Rental of Space funds leases with privately owned space or buildings on behalf
of other federal agencies.
 Building Operations funds day-to-day building services, such as cleaning,
utilities, and maintenance.45
If Congress does not set GSA’s limitations equal to revenue—providing so called “zero balance
authority”—then any unexpended funds are added to the FBF’s balance and carried forward to
the following fiscal year and are available to be appropriated. For example, at the beginning of
FY2011, the FBF had a starting balance of $1.032 billion, which represented unobligated funds
from prior fiscal years.46 When added to the $8.841 billion in anticipated rent deposits,47 the FBF
had $9.873 billion available for appropriation that year. President Obama requested $9.154 billion
for FY2011, and enacted appropriations totaled $7.659 billion.48 The difference between total

42 U.S. Senate, 112th Congress, 2nd Sess., Committee on Appropriations, Financial Services and General Government
Appropriations Bill, FY2013, Report No. 112-177, June 2012, p. 149, https://www.congress.gov/congressional-report/
112th-congress/senate-report/177.
43 P.L. 81-152.
44 P.L. 92-312; 40 U.S.C. §592.
45 Additional accounts may exist in some years if appropriators provide funding for non-recurring expenditures, such as
emergency funding to repair buildings after a natural disaster.
46 GAO, Federal Buildings Fund, p. 6.
47 GAO, Federal Buildings Fund, p. 6.
48 GAO, Federal Buildings Fund, p. 6.
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available resources ($9.873 billion) and the enacted limitations ($7.659 billion) became the FBF’s
starting balance in FY2012 ($2.214 billion).49
While the FBF was intended to meet all of GSA’s real property activities, the revenue it generates
has consistently fallen short of needed funds. In 1981, an analysis of the FBF showed that it did
not generate enough revenue to meet all of GSA’s real property needs50—a finding reaffirmed in
1991.51 In 2001, a GAO report prepared at the request of the House Committee on Transportation
and Infrastructure (T&I), Subcommittee on Economic Development, Public Buildings, and
Emergency Management, detailed the actual and potential consequences of further delays in
completing needed R&A projects.52 Among the then-current building conditions discussed were:
 Eisenhower Executive Office Building, Washington, DC53
 Steam pipes burst several times a year.
 Aging heating and ventilation systems could fail any time.
 Storm and sewer systems do not meet environmental and health codes.
 Potential for water to damage building supports and weaken its structural
integrity.
 Federal Office Building 3, Suitland, MD54
 Air has levels of carbon dioxide that exceed industry standards.
 Water system has contaminants.
 Employees have slipped on water from leaks 37 times, with injuries.
 Anthony J. Celebrezze Federal Building, Cleveland, OH55
 Water leaks create a health hazard by facilitating the growth of mold and
mildew.
 Aging electrical system could fail at any time.
 Asbestos in the ceiling is a safety hazard.
 Water leaks cause rusting of inner skin, which holds building’s exterior
panels.
In addition, antiquated energy and utility systems were found to increase costs in several
buildings by as much as 15%, and at least one building was not compliant with seismic safety
standards.56 Tenant satisfaction declined as building conditions deteriorated.57

49 GAO, Federal Buildings Fund, p. 6. GSA had an additional $25 million deposited into the FBF prior to the start of
FY2012 that is not reflected in the starting balance for that year.
50 GAO, GSA’s Federal Buildings Fund Fails to Meet Primary Objectives, PLRD-82-18, December 1981.
51 GAO, Federal Buildings: Billions Are Needed for Repairs and Alterations, p. 1.
52 GAO, Federal Buildings: Funding Repairs and Alterations Has Been a Challenge—Expanded Financing Tools
Needed, GAO-01-452, April 2001, pp. 37-41, https://www.gao.gov/assets/240/231394.pdf.
53 GAO, Federal Buildings, pp. 41-42.
54 GAO, Federal Buildings, p. 39.
55 GAO, Federal Buildings, pp. 45-46.
56 GAO, Federal Buildings, pp. 44, 47.
57 GAO, Federal Buildings, p. 47.
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GAO first included federal real property on its 2003 list of “high-risk” programs, citing GSA’s
backlog of R&A projects as an example of the liabilities associated with deteriorating buildings.58
Real property management has been included in every high-risk report update since 2003,
although it no longer identifies GSA’s backlog as a contributing factor. GSA’s concerns over
funding levels have persisted, however, as it has consistently received less funding than it
requested over the past two decades. In 2008, some House Members argued against an
amendment that would cut appropriations for GSA’s R&A account, noting:
GSA’s current backlog of repairs and alterations of Federal buildings is estimated at
$6,600,000,000. The fiscal year 2008 request is considered a minimum to operate and
maintain GSA’s assets. Limiting repairs and alterations funding forces GSA to house
Federal workers in more commercial leases rather than continue in government-owned
buildings at a net cost to the U.S. taxpayer. Cutting an additional $31,000,000 from this
account just digs the GSA into a deeper hole and only delays much needed repairs for
buildings into the next fiscal year. H.Rept. 115-23459
Similarly, in 2017, some House Members protested the level of R&A funding provided to GSA
for FY2018:
Another particularly irresponsible cut targets the GSA, which functions as the Federal
Government’s developer and landlord. The bill decimates funding for the Federal
Buildings Fund, forcing the agency to neglect high priority safety and security projects.
This lack of sufficient funding for repair projects further exacerbates an already dire
situation. Persistently inadequate appropriations for GSA in recent years have resulted in a
$1.1 billion backlog for GSA’s repairs and alterations programs. Again, these decisions do
not make long-term fiscal sense. Every dollar that GSA does not reinvest back into basic
maintenance and repairs now leads to a long-term capital liability of four to five dollars in
the future.60
Over the past 25 years, the amount of annual R&A funding provided to GSA has generally been
less than requested. During the five-year period of FY1995-FY1999, GSA received 60.4% of the
amount it requested for R&A, while from FY2000 through F2019, it received 76% of the amount
it requested.61 Data on annual funding from FY2000 through FY2019 are provided in Table 2.
Table 2. Select Data on Repairs and Alterations Funding, FY2000-FY2019
In millions of dollars
Amount
Limitations
Annual
Cumulative
Fiscal Year
Requested
on Revenue
Difference
Difference
2000
665
599
66
66
2001
721
681
40
106
2002
827
827
0
106
2003
986
951
35
141
2004
1,013
991
22
163

58 GAO, High Risk Series: An Update, GAO-03-119, January 2003, p. 45, https://www.gao.gov/products/GAO-03-119.
59 U.S. House of Representatives, 110th Congress, 1st Sess., Financial Services and General Government
Appropriations Bill, 2008, H.Rept. 110-207, June 2007, pp. 145-146, https://www.govinfo.gov/content/pkg/CRPT-
110hrpt207/pdf/CRPT-110hrpt207.pdf.
60 U.S. House of Representatives, 115th Congress, 1st Sess., Financial Services and General Government
Appropriations, 2018, , July 2017, pp. 535-536, https://www.govinfo.gov/content/pkg/CRPT-115hrpt234/pdf/CRPT-
115hrpt234.pdf.
61 GAO, Federal Buildings, pp. 15.
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Amount
Limitations
Annual
Cumulative
Fiscal Year
Requested
on Revenue
Difference
Difference
2005
980
980
0
163
2006
961
861
100
263
2007
866
618
248
511
2008
805
722
83
594
2009
692
692
0
594
2010
496
414
82
676
2011
705
280
425
1,101
2012
869
280
589
1,690
2013
495
280
215
1,905
2014
1,302
1,077
225
2,130
2015
1,257
818
439
2,569
2016
1,247
735
512
3,081
2017
842
676
166
3,247
2018
1,445
665
780
4,027
2019
910
663
247
4,274
Total
18,084
13,810
–
4,274
Source: CRS appropriations reports.
The data in Table 2 show that over the past two decades, GSA received 100% of its R&A request
in three fiscal years—2002, 2005, and 2009. In 17 fiscal years, GSA received anywhere from $22
million to $780 million less than it requested. In monetary terms, the gap between the amount
GSA requested and the amount appropriated totals $4.274 billion. This amount exceeds GSA’s
FY2019 deferred maintenance and repair backlog ($3.39 billion).62
The R&A funding trend is part an overall pattern in capital appropriations. From FY2010 to
FY2019, GSA’s Capital Investment Program—R&A plus construction and acquisition projects—
received $6.537 billion less than it requested.63 R&A is doubly effected by the program’s
shortfall, since the indirect benefits of the acquisition of new space are reduced. When GSA
builds or purchases a new building, it often relocates federal employees from one or more owned
buildings to fill the space. In some cases, this relocation enables GSA to vacate buildings with
tens of millions of dollars in needed repairs. GSA may then dispose of the buildings, eliminating
their R&A liability. Even the disposal of a relatively small percentage of GSA’s owned inventory
may reduce R&A costs by hundreds of millions of dollars. One study found that 58 of GSA’s
owned buildings each had more than $20 million in R&A costs.64 Disposing of these properties
would eliminate at least $1.16 billion in R&A liabilities. Conversely, the longer GSA must house
federal employees in owned buildings—particularly older ones—the more its R&A liabilities may
increase. Aging building systems could further deteriorate, increasing operating costs; property
market value could decrease, generating less rent; and the cost of completing the same repairs in

62 GSA, FY2019 Agency Financial Report, p. 100.
63 Data provided by the GSA.
64 GSA, FY2019 Agency Financial Report, p. 17.
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the future could increase. R&A projects are essentially construction projects, and construction
costs may increase rapidly at times. Between October 2005 and September 2011, for example,
construction costs increased 20%, almost twice as fast as general inflation over the same period.65
When capital investment funding is less than the revenue available, the resulting unobligated
funds are retained in the FBF and carried over to the starting balance of the subsequent fiscal
year. The FBF’s starting balance has increased in 17 of the past 20 fiscal years. The sharpest
period of growth began in FY2007, when the FBF had a starting balance of $56 million, to
FY2012, when the starting balance was $2.239 billion.66 While appropriations are typically less
than the amount of funding available for capital investments, GSA rarely requests the full
amount.67 This may potentially send a signal to Congress that capital funding is not an urgent
matter. GSA has stated that it requests less than the total available revenue in the FBF to help
keep within the overall budget cap for the Financial Services and General Government
appropriations bill.68 If other agencies have pressing needs, GSA may request less than the total
available resources in order to reduce total spending. In this way, the FBF’s unobligated revenue
may be used as an offset.
This dynamic may be changing. GSA’s FY2021 budget request is for zero budget authority,
meaning it has asked to use all of the FBF’s available revenue for capital investments, leaving the
R&A and Construction and Acquisitions accounts with zero balances.69 GSA has requested
$1.363 billion for R&A, citing the “growing backlog of repairs and renovations necessary at
federal facilities.”70 In addition, the President has again included a proposed Federal Capital
Revolving Fund (FCRF) in GSA’s budget request as an alternative means of providing capital for
the acquisition of space.71 This proposal, along with other strategies for reducing GSA’s R&A
liabilities, are evaluated in the following section.
Policy Options
The history of FBF funding suggests that GSA may anticipate receiving less than it requests each
year. Even if GSA were to be given zero balance authority on a consistent basis, the liabilities in
its older buildings will continue to grow, which may limit GSA’s ability to make substantial
progress on its R&A backlog. In the absence of increased appropriations, strategies for reducing
GSA’s R&A liabilities might include expediting the disposal of aging buildings, leveraging
private sector capital, and freeing up cash within the FBF by funding major new construction
projects in a proposed capital revolving fund.
Expedited Disposal Authority Under the Federal Assets Sale and
Transfer Act
The Federal Assets Sale and Transfer Act of 2016 (FASTA, P.L. 114-287) established a new,
centralized process for disposing of potentially hundreds of unneeded federal properties at once.

65 GAO, Federal Buildings Fund, p. 10.
66 GAO, Federal Buildings Fund, p. 6.
67 GAO, Federal Buildings Fund, p. 8.
68 GAO, Federal Buildings Fund, p. 8.
69 GSA and Office of Management and Budget (OMB), FY2021 Congressional Justification, February 2020, p. 75,
https://www.whitehouse.gov/wp-content/uploads/2020/02/spec_fy21.pdf.
70 GSA and OMB, FY2021 Congressional Justification, pp. 15, 509.
71 GSA and OMB, FY2021 Congressional Justification, p. 10.
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Under FASTA, agencies are required to develop a list of disposal recommendations, which could
include the sale, transfer, or conveyance of any unneeded space, among other options. These
recommendations are then to be submitted to the GSA administrator and the director of the Office
of Management and Budget (OMB) for review and revision. The revised list of recommendations
is then vetted by a newly established Public Buildings Reform Board and returned to the OMB
director for final approval or disapproval. If the list is approved, the recommendations must be
implemented immediately. If OMB disapproves the list, the process ends without any disposals.
See CRS Report R44999, The Federal Assets Sale and Transfer Act of 2016: Background and
Key Provisions, for more information.
FASTA provides GSA with an opportunity to expeditiously dispose of dozens of unneeded, low-
performing, or high-liability buildings. One disposal strategy might be to target older properties
with multimillion-dollar R&A needs. The sale of older properties would generate revenue and
relieve GSA of related R&A liabilities. Given the condition of these buildings—which are, by
definition, in need of capital investments—they may not sell at fair market value, which FASTA
generally requires. However, FASTA also gives the GSA administrator the authority to sell
properties at below fair market value at the administrator’s discretion. Using this discretionary
authority, GSA could reduce the sale price of targeted properties below market value and increase
the likelihood of finding a buyer. The price reduction might include a discount equal to the
estimated cost of repairs and other factors. Critics of selling federal buildings at a discount argue
that having a “fire sale” mentality could result in a transaction that is not in the best interest of the
government—that is, in the hurry to dispose of certain buildings, GSA might accept a bid that
significantly undervalues the targeted assets. To address this concern, GSA might use market
analyses and net present value calculations (future cash flows minus future investments) to
evaluate the financial implications of selling below market value.
Public Private Partnerships
Another option for reducing GSA’s R&A liability might be to expand use of the agency’s Public
Private Partnership (PPP) authority. A PPP is an agreement whereby a nonfederal partner acquires
the right to use a real property owned or controlled by a federal agency—typically through a
long-term lease—in exchange for redeveloping or renovating that property. The nonfederal
partner is usually in the private sector, although nonprofits and state and local governments are
not prohibited from entering into PPPs with GSA. Whether implemented for redevelopment or
renovation, the contributions of each partner are generally the same: The federal government
provides real property—buildings, space within buildings, land, or structures—and the nonfederal
partner provides capital for improvements to the property. The federal properties included in PPPs
are often older and in need of costly repairs.
Nonetheless, nonfederal partners may see the opportunity to generate a profit. While aging federal
properties are often in poor condition, they may be in desirable locations where rental rates are
high. The nonfederal partner may renovate the property and be able to recoup its costs through
subleasing the improved space. In other cases, a nonfederal partner might have expertise in a
particular type of renovation, such as installing energy efficient building systems, and enter into
an agreement that pays for the costs of such renovations through the savings in operating costs.
The nonfederal partner might also be able to renovate unneeded space in an older building and
make it more mission-effective for the agency that holds it. For example, an agency may not have
the funds to upgrade the electrical system in an underutilized building in order to take advantage
of new technology. A nonfederal partner might upgrade the electrical system in the entire building
as part of its renovation and retain the rights to sublease the unoccupied space while sharing the
revenue with the landholding agency. In short, nonfederal partners with access to capital and real
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property expertise may be able to find ways to monetize assets that the government cannot,
particularly under current fiscal constraints. Hypothetical examples of how a PPP might be
structured include the following:
 A federal agency owns a historic building that is unoccupied and in disrepair. The
property is in a desirable location, and public and private entities are expected to
be interested in acquiring space. A developer leases the property and renovates it
in accordance with historic preservation requirements. The first floor is subleased
by retailers, and the city government subleases the office space on the floors
above.
 A federal agency owns land with a deteriorating office building and a small
parking lot. The property is in a market where there is moderate to strong demand
for private sector office space. The developer demolishes the existing building
and constructs a larger, modern office building in its place that is partially
occupied by the lessor and backfilled by businesses. The developer also replaces
the parking lot with a garage that has enough space for the tenants and for public
parking.
 A federal agency’s utility costs are well above average due to antiquated heating
and cooling systems. A business installs new, more energy efficient equipment. In
return, the business is repaid for the cost of the equipment and installation, and
receives 50% of the energy savings.
While PPPs could represent an opportunity for GSA to reduce its R&A backlog without investing
additional capital, there are potential concerns. PPPs can be complicated arrangements, requiring
knowledge of a range of disciplines: real property, architecture, civil engineering, contracting, and
law, to name a few. An agency that lacks a staff with expertise in those disciplines may be at risk
of entering into an agreement that does not represent the best value for the government. GSA
officials acknowledged in 2016 that “negotiating successful public private partnerships requires
unique expertise and organizational experience” that they lack.72 While GSA has not used its PPP
authority expansively, it may have increased its expertise and experience in recent years. In
addition, PPPs sometimes fall through when the private sector partner sets a value on the federal
property at significantly less than the independent appraisal obtained by GSA.73 The value of the
property is central to establishing the terms of the PPP contract—different market values will
generate different internal rates of return and alter cost-benefit ratios for capital investments.
Generally, a lower market value makes it harder for the nonfederal partner to generate enough
revenue to make the project worthwhile. Aligning government valuations with those of the private
sector could enable GSA to enter PPP negotiations with a better understanding of the nonfederal
partner’s perspective and needs.
Federal Capital Revolving Fund
GSA’s capital investment accounts—R&A and Construction and Acquisition—compete with
each other for limited FBF funding. Construction and acquisition projects often require hundreds
of millions of dollars, and when they are funded it necessarily reduces the capital funds available
for R&A projects. When construction and acquisition projects are not adequately financed,

72 GAO, Federal Real Property: Public Private Partnerships Have a Limited Role in Disposal and Management of
Unneeded Property, GAO-16-776R, August 2016, p. 3, https://www.gao.gov/assets/680/679352.
73 GAO, Federal Real Property: Public Private Partnerships, p. 9.
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however, high-priority space needs may be delayed for years due to insufficient appropriations.74
If some of GSA’s major construction projects could be funded from a source other than the FBF,
then not only would this accelerate the acquisition of new space, but more funds might be
available for R&A.
One policy option that has been proposed in different forms would be to create a capital
investment fund that would provide agencies with full, upfront funding for major construction
and acquisition projects. Under capital scoring rules, an agency may not enter into a contract to
build or purchase space unless it has sufficient capital on hand to pay for the entire cost of the
project.75 This differs from operational lease scoring, where agencies are required only to have
enough funding to cover one year of rent prior to entering into a contract.76
GSA has proposed an iteration of a capital investment fund in its FY2021 budget justification.77
Based on principles outlined by the Trump Administration in 2018,78 the proposed FCRF would
fund civilian agency capital projects of at least $250 million.79 The FCRF, which would be
managed by GSA, would provide the project’s capital upfront, and agencies would have up to 15
years to repay the fund in equal annual installments.80 In this way, agencies would avoid
triggering the capital asset scoring rules, as the FCRF would meet the upfront funding
requirements on their behalf. The FY2021 budget justification would provide an initial
appropriation of $10 billion.81
In order to more fully understand the risks and benefits of establishing the FCRF, a more
comprehensive proposal may be needed. There are many unknowns, particularly about how
projects are chosen for funding. For example: Is there an application process? What criteria are
used to evaluate and rank applications? Will the chosen projects need to seek congressional
authorization prior to being funded? What rules govern the use and repayment of funds? Once
more information is provided, policymakers may consult with the Congressional Budget Office to
assess the proposal’s potential budget implications.
Concluding Observations
As the nation adapts to new work conditions brought on by government policies related to the
COVID-19 pandemic, GSA may have an opportunity to reduce its R&A liability. With hundreds
of thousands of federal employees working from home, possibly for months, agencies have an
opportunity to gather real-time data regarding the feasibility of expansive, long-term telework.
As noted, when GSA disposes of property, particularly aging buildings, its R&A liability is
reduced. If tenant agencies permit sufficient numbers of employees to telework for long periods

74 GSA, FY 2019 Congressional Justification, February 2018, p. 31, https://www.gsa.gov/cdnstatic/
GSA%20FY%202019%20CJ.pdf.
75 OMB, Circular A-11, Preparation, Submission, and Execution of the Budge, Appendix B, December 2019, pp. 1-11,
https://www.whitehouse.gov/wp-content/uploads/2018/06/a11.pdf.
76 OMB, Circular A-11, pp. 1-11.
77 GSA, FY 2021 Congressional Justification, February 2020, p. 14, https://www.gsa.gov/cdnstatic/
GSA%20FY%202021%20Congressional%20Justification.pdf.
78 Letter from OMB Director Mick Mulvaney to Vice President Mike Pence, June 12, 2018,
https://www.whitehouse.gov/wp-content/uploads/2019/03/FCRF_Pence.pdf.
79 OMB, Budget of the U.S. Government, FY2021, February 2020, p. 75, https://www.whitehouse.gov/wp-content/
uploads/2020/02/spec_fy21.pdf.
80 OMB, Budget of the U.S. Government, FY2021, February 2020, p. 75.
81 OMB, Budget of the U.S. Government, FY2021, February 2020, p. 75.
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of time (years or indefinitely), GSA may be able to dispose of additional properties. For example,
if three tenant agencies who occupy a GSA-owned building were to allow some or all of their
employees to telework, GSA may be able to relocate the remaining on-site workers to empty
space in other federal buildings. Once empty, GSA could sell the property, which would generate
revenue as well as reduce the agency’s R&A liability. GSA could also redevelop the vacant
property through a PPP that requires the private sector partner to complete needed R&A projects.
Similarly, a reduction of the number of on-site employees would reduce the workload on building
systems and mitigate the gradual degradation of a facility caused by daily use. GSA may be able
to lease the unutilized space, generating revenue from the private sector that would exceed the
rent paid by federal tenants.
Conversely, if government agencies develop policies that require a minimum distance between
employees in order to reduce the likelihood of transmitting an illness at the office, GSA may need
to acquire additional space and alter existing space. This might result in an increase in fixed costs
and a need to fund additional alteration projects.
Policymakers may consult with GSA tenant agencies about the possibility of expanding their
telework programs, taking into account both the benefits of reducing the government’s R&A
liabilities and the experience they are gaining about the programs during the COVID-19
pandemic.

Author Information

Garrett Hatch

Specialist in American National Government

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
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under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
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