Disposition of Surplus Federal Property

Disposition of Surplus Federal Property

Order Code RS20630
Updated July 16, 2008
Disposition of Surplus Federal Property
Clay H. Wellborn
Specialist in American National Government
Government and Finance Division
Summary
The General Services Administration’s (GSA’s) Office of Property Disposal
administers the conveyance of surplus real property that the federal government no
longer needs. Through GSA’s public benefits conveyance program, these properties are
made available to eligible entities in the public and private sectors. This report provides
a brief overview of the current policy and procedure for conveying surplus real property
by GSA to public agencies or to private individuals; and it discusses bills that would
alter current arrangements so as to reduce federal inventories of excess, costly-to-
maintain property.
Introduced on July 16, 2007, S. 1667 would require the creation of a five-year pilot
project for the expeditious disposal of unneeded federal real property. On April 7, 2008,
S. 1667, as amended, was reported favorably out of committee and placed on the Senate
Legislative Calendar under General Orders. Introduced on April 14, 2008, H.R. 5787
would, among other things, allow federal agencies to retain the net proceeds from the
sale of surplus property and authorize GSA to assist agencies in preparing properties to
be reported excess. On May 22, 2008, the House agreed to H.R. 5787, as amended in
committee, and sent the bill to the Senate. This report will be updated as legislative
action warrants.
Background1
The General Services Administration, through its Public Buildings Service (PBS),
is the primary federal real property and asset management agency, with a portfolio
consisting of 8,847 buildings and structures with an estimated replacement value of $68.8
billion in FY2006.2 In addition to GSA, 27 other federal agencies have independent
landholding authorities that enable them to acquire or construct specific types of buildings
1 This report was originally written by Stephanie Smith, Analyst in American National
Government, who recently retired from CRS.
2 U.S. General Services Administration, The Federal Real Property Council, FY2006 Federal
Real Property Report: An Overview of the U.S. Federal Government’s Real Property Assets,
July 2007, p. 6.

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or facilities.3 Investigations by the Government Accountability Office (GAO) have
revealed that many properties in the federal inventory are not financially self-sustaining
and are no longer relevant to their agencies’ changing missions. GAO reported that GSA
and other landholding agencies could give greater attention and funding to maintaining
a streamlined federal inventory by identifying and disposing of unneeded properties.4
Vacant and underutilized federal properties are costly to maintain, GAO reported, and
could be “put to more cost-beneficial uses, exchanged for other needed property, or sold
to generate revenue” for the federal government.5 In June 2007, the Office of
Management and Budget (OMB) reported that the federal government owned 18,393
excess assets with a replacement value of almost $13.8 billion, and 3,409 surplus
properties valued at approximately $3.9 billion.6
GSA’s Office of Property Disposal administers the disposal of real property that is
no longer needed by executive branch agencies. Underutilized federal property can vary
widely, and may include land, office buildings, warehouses, former post offices, farms,
family residences, commercial facilities, or airfields located in the United States, Puerto
Rico, the U.S. Virgin Islands, or the U.S. Pacific Territories.7 When a federal agency
determines that it no longer needs a property to carry out its mandate, it reports the
unneeded or excess property to GSA. As authorized by statute, GSA must first make an
excess property available to other executive branch agencies.8 If GSA determines that
another federal agency has a need for the excess property, the property is transferred to
that agency in accordance with the authority delegated and regulations prescribed by the
GSA Administrator.
Conveyance for Public Purposes
If GSA determines that there is no need for a federal property within the federal
government, it becomes surplus property, and may be made available to state or local
governments and qualified tax-exempt nonprofit institutions through GSA’s public
benefits conveyance (PBC) program.9 As authorized by statute (see Table 1), the GSA
3 Ibid. For additional information, see CRS Report RL32368, The General Services
Administration and Federal Real Property Management: Overview and Current Legislation, by
Stephanie Smith.
4 U.S. General Accounting Office, High-risk Series: Federal Real Property, GAO-03-122,
January 2003, pp. 15-22. In 2004, GAO changed its name from the General Accounting Office
to the Government Accountability Office (118 Stat. 811).
5 U.S. Government Accountability Office, Federal Real Property: Most Public Benefit
Conveyances Used as Intended, but Opportunities Exist to Enhance Federal Oversight, GAO-06-
511, June 2006, p. 1.
6 Executive Office of the President, Office of Management and Budget, Response to Section 408
of Public Law 109-396, June 15, 2007, p. 2.
7 U.S. General Services Administration, Office of Property Disposal, Acquiring Federal Property
for Public Uses, p. 1, available at [http://www.propertydisposal.gsa.gov].
8 40 U.S.C. § 524.
9 GSA has primary responsibility for the administration of the program, but, as required by statute
(continued...)

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Administrator has discretion to allow for the conveyance of real property at discounts of
up to 100% of fair market value.
Table 1. Authorized Public Benefit Uses and Statutory Authorities
Public Benefit Use
Statutory Authority
Education
40 U.S.C. § 550(c)
Public health
40 U.S.C. § 550(d)
Parks and recreation
40 U.S.C. § 550(e)
Historic monument
40 U.S.C. § 550(h)
Wildlife conservation
16 U.S.C. § 667(b)
Public airport
49 U.S.C. § 47151
Correctional facility
40 U.S.C. § 553(b)(1)
Homeless assistance
42 U.S.C. § 11411
Port facility
40 U.S.C. § 554
Self-help housing
40 U.S.C. § 550(f)
Law enforcement
40 U.S.C. § 553(b)(2)
Emergency management response
40 U.S.C. § 553(b)(3)
Source: U.S. Government Accountability Office, Federal Real Property: Most Public Benefit Conveyances
Used as Intended, but Opportunities Exist to Enhance Federal Oversight, GAO-06-51, June 2006, p. 7.
Seven federal agencies, referred to as sponsoring agencies, assist GSA with the PBC
process.10 At least one sponsoring agency is designated for each type of public benefit
use, according to an agency’s policy expertise. For several public benefit uses, one
sponsoring agency is responsible for reviewing and approving applications, while a
different sponsoring agency is authorized to convey the surplus property (see Table 2).
9 (...continued)
(10 U.S.C. § 2687 note), has delegated conveyance authority to the Department of Defense (DoD)
for DoD properties that are closed or realigned as part of the Base Realignment and Closure
(BRAC) process. See, U.S. Government Accountability Office, Federal Real Property: Most
Public Conveyances Used as Intended, but Opportunities Exist to Enhance Federal Oversight,
p. 1.
10 The Department of Homeland Security (DHS), Department of Justice (DOJ), Department of
Transportation (DOT), Department of Education (DOE), Department of Health and Human
Services (HHS), Department of Housing and Urban Development (HUD), and the Department
of the Interior (DOI).

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Table 2. Federal Agencies that Administer Civilian Surplus Property
Length of
Public Benefit
Sponsoring Agency’s
Sponsoring Agency
Deed
Use
Responsibilities
Restriction
Education
Dept. of Education
• Application review & approval
30 years
• Deeding & conveyance
• Compliance monitoring
Public health
Dept. of Health & Human Services
• Application review & approval
30 years
• Deeding & conveyance
• Compliance monitoring
Parks &
Dept. of the Interior
• Application review & approval
In perpetuity
recreation
Federal Lands to Parks Program
• Deeding & conveyance
• Compliance monitoring
Historic
Dept. of the Interior
• Application review & approval
In perpetuity
monuments
Historic Surplus Property Program
• Compliance monitoring
General Services Administration
• Deeding & conveyance
Wildlife
Dept. of the Interior
• Application review & approvala In
perpetuity
conservation
U.S. Fish & Wildlife Service
General Services Administration
• Application review & approvala
• Deeding & conveyance
• Compliance monitoring
Public airports
Dept. of Transportation
• Application review & approval
In perpetuity
Federal Aviation Administration
• Compliance monitoring
General Services Administration
• Deeding & conveyance
Correctional
Dept. of Justice
• Application review & approval
In perpetuity
General Services Administration
• Deeding & conveyance
• Compliance monitoring
Port facility
Dept. of Transportation
• Application review & approval
In perpetuity
Maritime Administration
• Deeding & conveyance
• Compliance monitoring
Source: U.S. Government Accountability Office, Federal Real Property: Most Public Benefit Conveyances
Used as Intended, but Opportunities Exist to Enhance Federal Oversight, p. 8.
a. Unlike other sponsoring agencies that are authorized to review PBC applications, the statutory authority
does not specify who is responsible for reviewing and approving wildlife conservation PBC
applications. The Department of the Interior’s Fish and Wildlife Service (FWS) provides this service
when either the applicant or GSA requests that the agency provide a letter of endorsement for the
proposed use. In cases where the assistance of FWS is not requested, GSA reviews and approves
wildlife conservation PBC applications.

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After GSA determines that the surplus property is suitable for conveyance, HUD is
authorized to review the property to determine if it is appropriate for homeless use.11 If
the property is deemed suitable, it is first made available for homeless assistance for 60
days before being made available for all other public benefit uses.
An interested state or local government, or qualified non-profit organization, must
respond with a formal application to the appropriate sponsoring agency within 20 days of
GSA’s notification that a property has been determined to be available for public
conveyance. Based on the property’s location, GSA also notifies appropriate regional
officials and agencies which may be concerned about the property’s ultimate use. The
appropriate sponsoring agency reviews each formal application to determine the
property’s final disposition, and notifies GSA of the selected applicant. GSA assigns the
surplus property to the sponsoring agency so that a deed can be finalized, and the property
is formally conveyed to the grantee. Certain deed restrictions may be included, such as
limitations on the property’s use, length of time to develop or implement the approved
use, and requirements to allow site inspections or utilization reporting requirements.12
Sales to the Public
A surplus property goes to public sale when GSA determines that there is no federal
use for the property, or the surplus property is not deemed appropriate for public use
conveyance. Properties may be sold to the private sector for fair market value through the
competitive bid process. The process may include the use of a sealed bid competition,
public auction, or mail auction. A 10% deposit of the total price must be submitted with
the bid; deposits are returned to unsuccessful bidders. The winning bidder is required to
purchase the property in its current condition, and is also responsible for securing
financial arrangements.
Detailed information on procedures for the public to obtain surplus property can be
obtained at [http://gsaauctions.gov]. Available properties are listed by state, and include
specifications, photos, and auction dates.
Congressional Initiatives in the 110th Congress
Pilot Project. In mid-2007 companion bills were introduced in the House and
Senate to create a five-year pilot project to test ways to accelerate the disposal of
unneeded federal real property. On July 16, 2007, H.R. 3049 was introduced by
Representative John Duncan and three cosponsors and referred to the House Committee
on Oversight and Government Reform. No further House action has taken place.13
11 42 U.S.C. § 11411.
12 U.S. Government Accountability Office, Federal Real Property: Most Public Benefit
Conveyances Used as Intended, but Opportunities Exist to Enhance Federal Oversight, p. 9.
13 Subsequently, the pilot project proposal was offered in committee as an amendment to H.R.
5787, but the amendment was not adopted. U.S. Congress, House Committee on Oversight and
Government Reform, Federal Real Property Disposal Enhancement Act of 2008, H.Rept. 110-
651 to accompany H.R. 5787 (Washington: GPO, May 15, 2008), p. 7. Hereafter cited as H.Rept.
(continued...)

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On June 20, 2007, companion bill S. 1667 was introduced by Senators Thomas
Carper and Tom Coburn. The bill would require the director of the Office of
Management and Budget to establish a five-year pilot program to speed the disposal of
surplus or underutilized federal real properties. The bill would authorize the OMB
Director to select federal properties to participate in the program. It would authorize the
expedited sale of those properties for cash at not less than the fair market value. It would
prohibit disposal by “exchange, trade, transfer, acquisition of like-kind property, or other
non-cash transaction.” Federal properties selected for the expedited disposal pilot program
would not be subject to GSA requirements and procedures for public benefits conveyance.
An agency that sold a surplus property through the expedited disposal process would
receive reimbursement for any administrative costs incurred through the sale of the
property. In addition, S. 1667 would authorize that 20% of the balance of any proceeds
received by the disposal of a surplus property would be deposited into that agency’s
account. The remaining 80% of the proceeds would be deposited into the U.S. Treasury
as miscellaneous receipts. On June 20, 2007, the legislation was referred to the Senate
Committee on Homeland Security and Governmental Affairs. On November 14, 2007,
the committee approved by voice vote an amendment that would include a provision to
allow for no-cost conveyance of surplus federal property to homeless assistance groups.
S. 1667, as amended, was ordered to be reported favorably by the committee on
November 14, 2007. The bill was reported14 and placed on the Senate Legislative
Calendar under General Orders (Calendar No. 631) on April 7, 2008.
H.R. 5787. According to GAO, agencies are limited in their ability to bear the costs
of preparing properties to be declared excess and surplus and subsequently disposed of.15
One reason for this is that, under current law, net proceeds of the sale of surplus federal
real property are placed in a fund in the Treasury and are not available to the selling
agency. On April 14, 2008, however, Representatives Moore and Duncan introduced
H.R. 5787, the Federal Real Property Disposal Act, to allow federal agencies to retain the
net proceeds of the sale of their surplus real and related personal property. This would
help them to cover the costs of preparing the property for disposal. The bill would also
authorize GSA “to assist agencies in preparing properties to be reported excess” and
further authorize GSA to dispose of property “that has reverted back to the federal
government from previous sales.”16 On May 15, 2008, the House Committee on Oversight
and Government Reform favorably reported H.R. 5787, as amended.17 On May 22, 2008,
the House agreed to the bill and sent it to the Senate.
13 (...continued)
110-651. In his additional views, the ranking member noted that in 2005 the committee had
approved the proposed pilot project by unanimous consent; and he signaled his intent to seek the
inclusion of the provision “as the legislation moves forward.” Ibid., p. 17.
14 S.Rept. 110-279.
15 U.S. Government Accountability Office, Statement of Mark L. Goldstein, Director, Physical
Infrastructure, “Federal Real Property: An Update on High-Risk Issues,” GAO-07-895T, May 24,
2007, pp. 19, 20.
16 H.Rept. 110-651, p. 5.
17 H.Rept. 110-651.