The General Services Administration (GSA) deals with many governmentwide concerns, including real estate and office space. For more than 20 years, auditors at the Government Accountability Office (GAO) have considered federal real property management a high-risk issue. GAO recently reiterated a list of recommendations for the GSA on real estate. For more, the Federal Drive with Tom Temin talked with GAO’s director of physical infrastructure issues, Heather Krause.

Interview Transcript: 

Tom Temin The General Services Administration deals with many government-wide concerns including real estate and office space. For more than 20 years, though, auditors at the Government Accountability Office have considered federal Real Property Management a high-risk issue.  GAO recently reiterated a list of recommendations for the GSA about real estate. We get more now from the GAO is director of physical infrastructure issues. Heather Kraus. Heather, good to have you back.

Heather Krause Thank you, Tom.

Tom Temin And this is a restatement of some longstanding things, some of them going back to 2003, and so forth. Any new recommendations for let’s start there for GSA on managing real estate and property?

Heather Krause We have 27 outstanding recommendations to the GSA right now. And what this recent work did was highlight the five that are priority recommendations. And so among the ones, so you know, they actually closed two of our priority recommendations last year, and we had added (an) additional one this year. That recommendation is focused on looking at the deferred maintenance backlog and GSAs plans to address deferred maintenance backlog. You know, there’s about a $3.1 billion deferred maintenance and repair backlog in fiscal year 2022. And so, we found that GSA did not communicate in its budget documents the amount of funding or timeframes that it would take to address that backlog. And so they did take some steps to address, you know, and provide some information and their 2025 budget justification, (but) we’re still looking for some additional information on those funding amounts and timeframes. And that kind of information is really important to inform decisionmakers about how funding levels could affect GSA’s backlog and really help them evaluate the proposal GSA has to address that backlog.

Tom Temin And that backlog applies to federally-owned properties.

Heather Krause Correct. And I should add too…actually, I think I maybe misspoke. I think the other recommendation — that one was around a little bit longer — but the more recent one was on space utilization data. I guess, just to speak to that. I mean, again, across the board, these five recommendations are really to address, Tom, as you said, up front, where we have seen a real high-risk area for the federal government, which is addressing that federal management federal property portfolio. And so another recommendation we made here was to look at plans to share information on space utilization data. And so what we found, and what we’re looking for is — they’ve taken some steps to share broadleaf information on how agencies can collect or look at methods for identifying space utilization. And they’ve done some things to share that information, but really looking for them to continue to have a documented plan to ensure those efforts are publicized, including to those that do not use GSA space, or portfolio planning services. And so kind of making all agencies aware of the cost and benefits of the various methods and technologies for collecting space utilization data. That kind of information, again, would really help agencies identify cost effective methods for collecting that information, and really informing the kind of decisions on potential changes to their real estate footprints.

Tom Temin Right. But they need the cooperation of agencies though, don’t they? The occupants who are having trouble figuring out who’s going to be in the office, who is not. And what percentage of the time?

Heather Krause Yeah, I think what a lot of these recommendations do is improve that kind of data that’s needed to help agencies make those types of decisions. Again, coming back to that space utilization, how can agencies — so, like, GSA is looking to really work with agencies to figure out: what are tools and ways that they can better understand utilization so they can assess what are we using? What might be opportunities to dispose of property that’s unneeded.

Tom Temin We’re speaking with Heather Kraus, Director of Physical infrastructure Issues at the GAO. And that idea of disposal of property. That’s something they talk about for decades at a time. And there are commissions and looks at properties. And sometimes after all of that, they find a garage somewhere they can tear down or sell. There’s a more fundamental issue, though, isn’t there?

Heather Krause Yeah, this disposing of unneeded property has been a long-standing challenge. Sort of managing the property and addressing issues of disposing unneeded property has been a long-standing issue. Another recommendation that we made to help address that was trying to get — again, as you point out, Tom, that there is federal agencies that are also involved in in making these decisions, but looking for GSA to develop a process to collect and share lessons learned from what they had was, which was a temporary approach for reducing the federal government’s real property inventory. So there was a law back in 2016 that set up a process for them to select and prepare unneeded federal properties for sale. The first couple rounds of process did face some setbacks and challenges in carrying it out. So what we’ve recommended, to improve that last round of the process as well as looking ahead, is having a mechanism or a process to share those lessons learned, leverage those stakeholders that were involved — their knowledge and addressing potential challenges with disposing of real property. That kind of sharing of information, I think will provide stakeholders, including the Congress, with insights on how, you know, the federal government might better dispose of its Israel property.

Tom Temin And of course, GSA leases, probably way more space than the government owns for occupancy by agencies. And did you find are there open recommendations on the leasing side of things? Besides the occupancy information?

Heather Krause We don’t have a leasing recommendation when it comes to something that’s priority. But I think, you know, we’re often looking at ways — again, I think key areas is improving that data to help, GSA and agencies make decisions on federal property. Another way that we found in our work to improve that was around the accuracy, completeness and usefulness of some of the street address information that you find in it’s public database. So you know, when we looked at that issue, again, lack of reliable data on federal assets is really one of the main reasons is federal property management’s on our high-risk list. And GSA has a publicly available database, you know, of their buildings, structures and lands. The public can take a look at that for any number of reasons, including finding property that they may be interested in leasing or purchasing from the federal government with a space that the government no longer needs. But when we looked at that there were numerous issues with the database which can reduce that kind of benefit that we’re looking for, from sharing that kind of information. So we made a recommendation, again, to improve that data. And GSA is collaborating with OMB on looking to provide guidance to agencies to help them improve the quality of the data, set up data quality programs. And what we’re looking for is them to follow through and working closely with OMB and federal property officials to complete those inter to other efforts to improve the data. Because that kind of reliable data will really increase its usefulness to the public, and really support that disposition of unneeded property.

Tom Temin And the street addresses. How is it? Do you suppose they don’t have accurate data on street addresses? I just looked it up. And they show the White House at 1601 Pennsylvania Avenue. Just kidding. But it seems like that would be kind of fundamental.

Heather Krause Some of it has to do with kind of formatting and incomplete information. And so, I think some of this is looking to ensure that there’s complete, accurate, you know, formatted information in those data databases to make it more reliable.

Tom Temin And in the 20 years, you’ve been developing these recommendations, and some of them get carried over from, you know, biannual report and so on. There have been a lot of building services administrators, commissioners, and a lot of administrators. Do you get the sense that GSA says, ‘Yeah, we agree, we got to get to this.’ Or what’s the response been?

Heather Krause The GSA has been very responsive to our recommendations. We have a way to measure progress of agencies. So we look back over recommendations made four years ago. And in the most recent report, we found that they had actually implemented 100% of the recommendations that we made four years ago. We have found it similarly in the recent years, they’ve had over 80%, or up to 100% in recent years, as well, of recommendations are implemented. So they are very responsive. I think it’s important to draw attention to the recommendations that we do in this particular report to ensure that we continue to make those types of improvements as we tackle this longstanding challenge of managing federal real property.

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But beyond hammering out agency budgets for next year, the GOP-led House Appropriations Committee has tacked on several policy riders that could impact federal employees and retirees in other ways as well.

One policy rider included in the committee’s report language, for instance, would bar any investments through the Thrift Savings Plan that are based on environmental, social or governance (ESG) criteria.

House Republicans also tried last budget cycle to include the “No ESG in the TSP” policy rider in the spending legislation, but it ultimately did not end up in the final appropriations package.

The launch of the voluntary TSP mutual fund window in June 2022 brought more than 5,000 new mutual fund options to TSP participants who choose to enroll in the window and pay a fee for the service. But the Federal Retirement Thrift Investment Board has said if an anti-ESG policy is enacted, it would bring the TSP’s new mutual fund window to an early demise.

Keeping track of 5,000 mutual funds would become too burdensome and open FRTIB to potential legal exposure, the board has said.

“There is no practical, cost-efficient way to monitor each of the roughly 5,000 individual mutual funds’ holdings,” FRTIB Director of External Affairs Kim Weaver said in 2023.

FRTIB has publicly opposed the provisions that aim to bar ESG investments. Weaver has also said there would be ripple effects from the provision, if it’s enacted. It would cost the TSP additional money to wind down the mutual fund window, and TSP participants may be exposed to potential financial losses if they had to transfer their investments back to the main TSP funds.

Appropriations committee members plan to mark up the financial services and general government 2025 spending bill, as well as several others, on Thursday afternoon. Here are some of the other policy riders federal employees should pay attention to:

Telework, office space in 2025 spending bill

In the report language, committee members also noted previous and upcoming requirements for the Office of Management and Budget and the General Services Administration to report to Congress on federal telework and office space.

In the 2024 enacted appropriations package, lawmakers included a now-approaching deadline for OMB to share all agencies’ work environment plans with Congress. Those plans, which stem from the initial return-to-office memo in April 2023, detail agencies’ recent telework policy changes.

OMB’s deadline to submit all agencies’ return-to-office plans to Congress is coming up in late June.

“The committee looks forward to receiving the report from OMB on governmentwide telework,” House appropriators wrote in the committee’s report. “The committee [also] expects agencies under the jurisdiction of the subcommittee to reduce their office footprint if their average office space utilization rate is less than 60%, based on a benchmark of 150 usable square feet per person.”

At the same time, the committee said GSA has not yet provided its required report on how agencies can reduce office space requirements based on lessons learned from using telework during the COVID–19 pandemic.

The federal footprint has been steadily declining, but agencies still holding onto excess and underutilized office space is a main reason the Government Accountability Office has kept federal real property management on its High-Risk List for over 20 years.

In the 2024 spending package, Congress called on all agencies with an office space utilization rate of less than 60% to submit a description of their current efforts to reduce their physical footprint, the total office space costs, the average utilization rate and the estimated cost of underutilized space.

If enacted, the 2025 spending bill from House appropriators would also give GSA and OMB a new 180-day deadline to offer further data and recommendations on how to best consolidate federal office space, while disposing of unneeded federal real estate.

Continuing a few longstanding provisions

In addition to the slate of new policy riders, House appropriators are also looking to maintain numerous provisions that have been around for years, and in some cases decades. Many of those provisions have become practically standard in spending bills each fiscal year.

For example, one continued provision requires agencies to pay OPM a fee for processing retirement claims for employees who separate early from federal service.

Another would continue to direct agency employees to use official time — or time spent working on union-related activities while on the job — in “an honest effort to perform official duties,” the committee report language said.

Additionally, a provision often referred to as the Hyde amendment would maintain the current ban on any government funding from going toward abortions through the Federal Employees Health Benefits (FEHB) program.

IRS pilot, FBI headquarters and more

The full appropriations committee also maintained several provisions from the subcommittee’s initial 2025 spending and policy proposals earlier this month.

Notably, the committee plans to implement steep spending cuts for the IRS, and aims to completely defund IRS’ free Direct File platform.

The lawmakers are also looking to decline a $3.5 billion request for construction on the new FBI headquarters building during 2025. The appropriations bill would also withhold all current funds allocated for the GSA construction project.

Democrat committee members, unsurprisingly, have come out in strong opposition to the spending cuts and many of the policy riders. Some lawmakers said they’re concerned about the ability of several relatively small agencies to handle large budget cuts. Rep. Steny Hoyer (D-Md.) warned last week that the House GOP bill would force agencies to implement staff reductions to make ends meet.

The post Policy riders to watch as House appropriators mark up 2025 spending bills first appeared on Federal News Network.

As House appropriators outline plans to make steep government spending cuts for fiscal 2025, Democrats are warning that reduced agency budgets would lead to federal employee layoffs, and by extension, worsening federal services.

The fiscal 2025 financial services and general government appropriations bill is now heading to the full appropriations committee for consideration. Members of the GOP-led House Appropriations Financial Services and General Government Subcommittee advanced the legislation — along party lines and without amendments — during a markup Wednesday morning.

But Democrat subcommittee members opposed to the spending cuts said they’re concerned about the ability of the relatively small agencies included in that specific appropriations bill to handle large budget cuts.

“Our agencies often have smaller budgets, and thus less flexibility to deal with the cuts,” Rep. Steny Hoyer (D-Md.) said Wednesday during the subcommittee’s markup of the legislation. “Larger agencies under the jurisdiction of other subcommittees can scale back grant programs and shift funding around to make ends meet. It’s tough, and perhaps may not be appropriate, but it is easier than this bill.”

Hoyer warned that the House GOP bill, as is, would leave many agencies with no choice but to implement staff reductions to make ends meet.

“Our agencies have to lay off staff, severely undermining their ability to function at the most basic levels,” Hoyer said. “That has direct consequences on the American people.”

Under the 2024 enacted budget, which included significant spending cuts, some agencies are already limiting new hires and in some cases considering plans to reduce their workforces. The State Department and the Department of Veterans Affairs, for example, are looking to make staffing cuts in the Foreign Service and the VA health care workforce.

The House appropriations legislation comes in stark contrast to the White House budget request proposed in March. House Republicans proposed a discretionary spending allocation totaling $23.6 billion, which is close to 20% below the Biden administration’s request. The bill would cut spending to 10% below the enacted level for 2024.

Subcommittee Ranking Member Rosa DeLauro (D-Conn.) called the spending levels and several GOP policy riders “unacceptable.”

That steep of a budget cut, Hoyer added, “belies the importance of the agencies for which we appropriate money.”

For the government’s lead agency on all things workforce, House Republicans’ spending plans would give the Office of Personnel Management a budget of $477 million for 2025. It’s an increase of $29.1 million over the enacted 2024 level — but the number still falls $31.4 million short of the White House’s request for the coming fiscal year.

At the same time, House Republicans, in the bill are calling for OPM to specifically aim to modernize IT and strengthen the government’s acquisition workforce.

The bill doesn’t include any language related to the federal pay raise for 2025, appearing to align with Biden’s 2% raise proposal for most General Schedule employees next year.

The draft bill also includes IRS spending cuts and proposes completely defunding IRS’ free Direct File platform. The legislation would cut the budget for IRS for 2025 to $10.1 billion, which is $2.2 billion below the enacted level for fiscal 2024.

The cuts would be most severe for IRS enforcement, which would see a $2 billion reduction in funding, House appropriators explained in a summary of the draft 2025 spending bill. Hoyer took particular issue with that component of House Republicans’ plans for IRS.

“The authority to transfer funds are not provided for in this bill,” Hoyer said. “In other words, we’re cutting our collection department by $2 billion. That’s the very essence of trying to be able to afford that which we’re buying and not paying for.”

The General Services Administration would see spending cuts for its use of the Federal Buildings Fund in 2025, according to the draft legislation. Lawmakers are calling for a cap of $8.9 billion to come out of that fund, which is nearly $1.8 billion below the 2025 budget request.

In one policy rider on the appropriations bill, House Republicans rejected the Biden administration’s request of $3.5 billion to build a new FBI headquarters in Greenbelt, Maryland. The draft bill would also withhold current funds allocated for the massive construction project.

Already, GSA has said construction on the new building will take more than a decade. Construction on the new FBI headquarters is not expected to begin until 2029, and FBI employees would not be working out of the new space until 2036. But in the spending bill, House Republicans said GSA should either continue operating out of the current building, or choose an existing, federally owned building in Washington, D.C., as a new headquarters.

The Executive Office of the President would receive $815.5 million for 2025, according to the spending bill. That’s $105.6 million below the budget request. As part of that appropriation, the Office of Management and Budget would get $126 million.

Several of the bill’s other policy riders specifically target Biden administration policies that Republicans have opposed for years. The legislation in its current form would ban the implementation of President Joe Biden’s executive orders on climate change, as well as diversity, equity, inclusion and accessibility (DEIA).

Additionally, the Small Business Administration would not be able to fund any climate change initiatives under the bill. In total, the House subcommittee proposed about $854.1 million for SBA, a cut of $117.1 million from the White House’s request, and $187.6 million below the enacted level for 2024.

Once the Senate subcommittee releases and votes on its version of the draft appropriations bill, House and Senate lawmakers will have to reconcile any differences between the two versions of the bill before voting on it, or sending it to the president’s desk for a signature.

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The GOP-led House Appropriations Committee’s fiscal 2025 general government spending bill rejects a $3.5 billion proposal from the General Services Administration to finance a new FBI headquarters building in Greenbelt, Maryland.

The spending bill passed out of the general government and financial services subcommittee along party lines on Wednesday morning. It’s now slated to be considered by the full committee. Rep. Jim Jordan (R-Ohio) reportedly urged House Appropriations Committee Chairman Tom Cole (R-Okla.) to prohibit taxpayer funding for any new FBI headquarters facility.

The Biden administration nominally ended a decade-long disagreement over the future of the FBI headquarters when GSA announced the new Greenbelt site last November. GSA selected a Maryland site over competing sites in Virginia.

But ever since, lawmakers have been scrutinizing GSA’s site selection and the broader plan for replacing the crumbling J. Edgar Hoover Building in downtown DC.

GSA’s budget proposal

GSA’s fiscal 2025 budget request proposed the $3.5 billion as an upfront investment in the new FBI headquarters building.

Agency officials want to allocate the investment through a new Federal Capital Revolving Fund that would “fully fund the costs of very large civilian real property capital projects that are difficult to accommodate in the annual appropriations process,” GSA’s budget request states.

Under the proposal, GSA would then pay back into the revolving fund in annual payments of $233 million over the next 15 years.

GSA would also draw on funding that Congress has already appropriated for acquisition and construction of a new FBI headquarters in Greenbelt. Lawmakers have approved about $845 million for the project so far, including $200 million in the fiscal 2024 spending deal reached in late March.

But in addition to rejecting the $3.5 billion funding request, the House Appropriations Committee bill would also prohibit previous funding from being spent on the FBI headquarters project until GSA sends the committee a “spend plan to continue operation of the current headquarters or to identify another existing, federally-owned DC building to serve as the headquarters.”

While House appropriators have started to move their spending bills, appropriators in the Democrat-led Senate have yet to start marking up their corresponding 2025 spending legislation.

Wray talks FBI headquarters

Meanwhile, FBI Director Chris Wray told lawmakers this week that his agency is supporting GSA’s work to establish the new Greenbelt site.

“We are working closely with GSA,” Wray said during a Senate Appropriations Committee hearing. He noted GSA submitted a report to Congress in March detailing its plans for site acquisition and design of the new facility.

Wray had called GSA’s decision-making into question shortly after last November’s announcement. He told FBI employees in an email that he had “concerns about fairness and transparency in the process and GSA’s failure to adhere to its own site selection plan.”

Wray’s email cited concerns about then-Public Buildings Service Commissioner Nina Albert’s decision to override the recommendations of a selection panel that had recommended Springfield, Va., for the new FBI headquarters.

In a statement at the time, GSA Administrator Robin Carnahan pushed back on Wray’s claims. She said his “suggestion that there was inappropriate interference is unfounded.”

Carnahan also said GSA stands behind “the process, the decision, and all of the public servants who carefully followed the process and made a good decision on behalf of the FBI and the public.”

During this week’s hearing in the Senate, Wray did not raise any further public concerns about the decision to locate the new FBI headquarters in Greenbelt.

“We are working closely with GSA, in cooperation with them, in full compliance with the law,” Wray said. “The specifics of exactly what conversations, what meetings – that part I couldn’t tell you right here right now. But my understanding is that we continue to work closely with GSA on the project.”

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A new rule from the Energy Department means the eventual end of gas and oil to heat new and renovated federal buildings. And, DOE officials believe, the rule will save tens of millions of dollars. For details on the Federal Drive with Tom Temin, Federal News Network Deputy Editor talked with David Smedick, the federal policy manager for the carbon-free buildings program at the Rocky Mountain Institute.

Interview Transcript:

David Smedick Yeah, absolutely. We’re really excited about it. So we do think it’s a big deal. And I think a lot of people across the industry recognize the importance of this role, coming down from DOE and the [Federal Energy Management Program (FEMP)]office. And so, we believe a key pillar of the federal building decarbonization process here. So under the sustainability plan, from this administration, you’re really looking at having net zero buildings across the federal portfolio over the next couple of decades. And this is one of the key pieces when you’re dealing with on site emissions, you need to zero those out. And that’s essentially what this role does for new construction on major renovations. It partners really well with, say, the building performance standard for federal buildings with the existing energy efficiency rules. This is a new way for the federal government to move forward and making sure that those on site fossil fuel emissions are eliminated from getting that portfolio of new construction, major renovations as we move forward.

Jared Serbu And the requirement is by 2030. And given the pace at which the government moves on a lot of things, how realistic is that? Given what we understand about their ability to implement clean energy projects, etc.

David Smedick Yeah, we think this one is doable. It’s been part of the law that was passed in 2007, where these rules and those targets, with the years implemented here. So looking back at over the next couple of years, the new projects that are coming online need to hit the 90% reduction mark, but then that that full fossil free, key marker goes into effect for 2030 and moving forward. And what we’re seeing is that, especially by 2030 and really now, your new construction projects can hit these targets. I think that it’s smart the rules that were finalized have those pieces where you can petition for if you’re really struggling with technical and feasibility, whether it’s a space construction or there’s the technology really isn’t there. And you can prove that to DOE, you can move forward with the project, just working with the agency to work around those pieces. But the heat pump technologies that are out there, which is the big ticket for this, really, it’s about those, HVAC systems. You have efficient all electric options on the market now, that we think you can be building these buildings with. And that’s what I think is really important. So by 2030, from our perspective, you really should be good to go. And it’s going to be a really exciting time because it’s going to really help move that market forward as well as lead by example policy.

Jared Serbu Are some agencies going to run into situations where they’re just constrained by what’s locally available where there really is no clean energy available from the grid.

David Smedick Well, so this role in particular is really focused on the on site emissions. And so what that means is when you’re combusting in a fuel on site, whether that’s for the heating, whether it’s for cooking, or hot water. So when it comes to the grid, there are other policies in place from the federal government and standards and processes they’re working on to clean the grid and make sure that you’re procuring it correctly. But this regulation is really about those on site emissions associated with the equipment that’s in moveable onsite kind of work there. So your HVAC, your hot water cooking and clothes drying you may have that would be fossil fuel powered in the past, just making sure that’s all efficient electric equipment.

Jared Serbu Talk a bit about the ways in which this might cause some developments outside of the government and spur innovation that might affect the private sector as well.

David Smedick Yeah, that’s one of the reasons we’re really excited about it. On the face of it, having more buildings from the federal government, be all electric is really important for a lot less air pollution, for making sure that you have cost effective strategies that use efficiency on that side for electrification on the building itself. But as you just noted, the the broader impact of this, the federal government’s purchasing power is really significant. And that’s something we’re excited about. And this is indicating to the market that this is the direction that we can be moving and we should be moving, and we need to be moving across the market. So whether that’s private sector public buildings as well. And that’s something that, here at RMI, we’re really leaning into and think there’s a big opportunity for with the federal government taking this move, other government entities and public buildings can be moving in this direction as well. So smart use of taxpayer dollars, right here dollars, whatever you want to call it. Public money can be here for efficient electric buildings on the new construction and major innovation side. This policy should be a waterfall moment for that. And we really think that it will signal to the manufacturers of these clean energy and clean technology equipment that you have buyers ready to go now. And this is something that I think they’ll build up to as we talk about that 2030 mark comes forward.

Jared Serbu As you mentioned earlier, this particular rule only applies to new construction and major renovations. One thing we know about the federal government is that there are a lot of old facilities out there. How much of a concern are those, and are there other efforts that get at those issues?

David Smedick Yeah, definitely. So the other policy I mentioned, which is exciting, is the federal building performance standard. So this was an initiative that four out of one of, the president’s earlier executive orders, making sure that we have a decarbonized federal government. Is this kind of the tagline on it? There’s lots of details within there, but that federal building performance standard is essentially saying, that for existing buildings, we’re going to create a pathway of renovation moving forward and have specific targets by which you need to reduce your energy consumption associated with onsite fuels. And so, that’s been going on for I think it was released about a year and a half ago, maybe two years. And so the agencies are out there kind of putting their plans together for, I think it’s about 30% or so, because their existing portfolio needs to hit zero on site emission renovation work by 2030 or so or 2035, I don’t remember the exact date to be honest, so we can look that up. But, that building performance standard is something that the White House has been has pulled together in moving forward and working with agencies to implement. So when it comes those older facilities that federal building performance standard is, I think really going to take those moving forward. They work really nicely and pair together this new construction and then that retrofit standard.

Jared Serbu And I guess the last thing I’d ask you, David, is what do you see as the challenges toward implementation here? You said there’s some waivers and some workarounds for agencies that end up really struggling with this. What do you think those struggles are going to be the extent they come up.

David Smedick Yeah I think some of those space constraints at different times. I think that’s when you do have some of the older buildings that may be going through a major renovation. Some of the technologies are a little different. So, when you’re plotting out how you’re going to actually physically install something in a space, you’re going to need to evaluate, ok, do I have the right set up here? Is it going to have the right airflow, associated with the HVAC equipment that’s needed for this new efficient electrical equipment versus what you maybe had beforehand? And so would that require a new structural change to the renovation? Or is this a way that I could petition and understand that we just technically can’t do that, because it is not part of our plans or something. So I think those are some of the struggles that will run into and we’ll see through the petition process. I think a lot more of what the the actual on the ground issues are. I think that’s where we’re going to see what buildings are running into. But I’d also say that I think  the FEMP office has really kind of administering this and pushing the rule out. They’re going to have implementation guidance here coming out. They don’t have an exact date, but that’s, I think, really going to drive a lot of information for folks out into the world of, ok, what is FEMP anticipating some of the issues are going to be in, how are they going to work with the agencies to make sure that those issues are either overcomable and they can get the solution implemented, or if they need to rework their implementation guidance a little bit and understand what the flexibility needs are for folks so that implementation guidance, once it comes out from FEMP, I think is going to answer a lot of questions that folks have. At least that’s my hope.

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• The Postal Service is hitting pause on some of its network modernization plans, but not all of them. USPS recently told lawmakers it will hold off on deciding whether to move some mail processing operations to larger regional hubs until January 2025. But USPS is still moving ahead with other facility changes. Among them, the agency is proceeding with plans to open 13 of these large hubs, called Regional Processing and Distribution Centers. USPS will also push ahead with plans to transport mail and packages across its network with fewer, but fuller truckloads. The agency runs about 50,000 truck trips a day, at about 40% capacity.
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• The Army is ready to adopt more digital engineering capabilities and processes. The Army's new digital engineering policy, signed yesterday, is all about changing the way the service develops warfighting capabilities in the future. Gabe Camarillo, the undersecretary of the Army, said at the AFCEA NoVa Enterprise IT Day that the policy initially focuses on three commodity areas — like ground vehicles — where these digital tools already are more mature. "We are looking to benefit from that utilization of digital engineering tools to be able to help establish the right processes in the Army, the right training and really how do we adapt our institutional approach to be able to accommodate more digital engineering," Camarillo said.
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• The Labor Department is embarking on a state-by-state refresh of unemployment insurance (UI) systems. Those systems were pushed to their limits at the height of the COVID-19 pandemic, with a nearly 3,000% surge in UI claims in 2020. New Jersey, one of the first states to receive funding, launched a pilot program of its new unemployment benefits system. Acting Labor Secretary Julie Su said the department is now funding projects in 18 other states at a time when its systems are experiencing historically low levels of strain. “Now is the time between storms to fix the roof, when the unemployment rate is at historic lows," Su said.
  (Labor Dept backs state-by-state refresh of UI benefits systems rocked by pandemic - Federal News Network)
• A team of university researchers from around the country found that military officers who outrank their military doctors receive better care than lower-ranked patients. A new study finds that high-powered patients receive more effort and resources than patients of equal or lower rank in military emergency departments. The researchers also found that reallocation of resources and effort came at the expense of lower-power patients. Race and gender played a role in these power dynamics. The study found that male doctors are a lot more responsive to patient power than female doctors, while white doctors respond to powerful patients equally, regardless of their race. Black physicians give “off-the-charts” treatment to high-powered Black patients.
  ( Officers who outrank their doctors get better care than lower-rank patients, new study finds - Federal News Network)
• The Technology Modernization Fund (TMF) is one step closer to getting an extension and new oversight requirements. The House yesterday passed the Modernizing Government Technology Reform Act by voice vote. A bill sponsored by Rep. Nancy Mace (R-S.C.) would extend the TMF to 2030 and revise the criteria by which agency proposals are evaluated. The MGT Reform Act was one of two technology-related bills the House passed. It also approved, by voice vote, the Government Service Delivery Improvement Act, sponsored by Rep. Ro Khanna (D-Calif.). The bill, among other things, would require the Office of Management and Budget and every agency to name a senior government service delivery lead responsible for improving citizen services. Both bills now move to the Senate for consideration.
  (House passes bill to extend TMF to 2030 - Congress.gov)
• The Army’s top cybersecurity official is moving on. Maj. Gen. Jan Norris left the Army Office of the Chief Information Officer last week. He had led cyber policy issues as a deputy CIO for the past two years. His next assignment will be as commander of the Army’s 335th Signal Command, the Georgia-based command that, among other responsibilities, oversees the Army Reserve’s cyber forces.
  (Fond Farewell - Army CIO)
• The Department of Health and Human Services is launching a new project to develop automated cybersecurity tools for healthcare facilities. The Advanced Research Projects Agency for Health (ARPA-H) plans to invest more than $50 million in the effort. The goal is to develop easier ways for hospitals to find and fix vulnerabilities in their software. One of the big challenges is that hospitals and health facilities rely on a wide range of complex and interconnected technologies. ARPA-H will hold a proposers day in June to discuss the project in more detail.
  (HHS research arm looks to boost hospital cyber defenses with $50M project - Federal News Network)
• A new panel of cloud and technology experts from across the government will help guide the FedRAMP program through its next stages. The General Services Administration said the new Technology Advisory Group (TAG) will offer expertise to agencies who are trying to navigate risk management issues around cloud and emerging technologies. It will also advise the board that manages the FedRAMP program. The first members of the TAG are cyber and cloud authorization experts from seven different agencies.
  (FedRAMP launches Technical Advisory Group to help guide program decision making - GSA)
• The Space Force is standing up two new Integrated Mission Delta units this summer. Last year, Chief of Space Operations Gen. Chance Saltzman created two Integrated Mission Delta provisional units focused on electromagnetic warfare and positioning, navigation, and timing mission areas. Space officials are now looking to restructure missile warning and space domain awareness mission areas. Lt. Gen. Philip Garrant, the Space Systems Command chief, and Lt. Gen. David Miller, who leads Space Operations Command, are currently conducting mission analysis of the operational deltas.
  (Space Force to stand up two integrated units this summer - Federal News Network)

The post USPS hits pause on some modernization plans first appeared on Federal News Network.

Federal workplaces aren’t what they used to be, not with a third or half of employees teleworking at least some part of the week. Since only a few people telework 100% of the time, that creates difficulties in managing office space. The Federal Drive with Tom Temin spoke with someone dealing with this issue, the Chief Administrative Officer of the Homeland Security Department’s Science and Technology Directorate, Margie Rowe.

Interview Transcript: 

Tom Temin We know what the director of S&T does, science and technology. What does the administrative officer do?

Margie Rowe I take care of the facilities, the fleet, the mail, the personal property. Part of keeping and running.

Tom Temin And how have things changed from the pandemic to now? Well, let’s start with how things changed when the pandemic hit. And now we’re kind of halfway out of it in terms of people coming to work.

Margie Rowe When it hit, we went totally telework. I mean, it was part of keeping everyone safe. And out of that, we realized that we can work and be successful from our homes. So that was the impetus, along with the S1’s priorities for DHS to consolidate us down into fewer facilities and to reduce the footprint where possible. So as an operational component. But our operations are in our labs and in the field. We were able to reduce our footprint and now we’ve ended up here on campus.

Tom Temin So on an average day, if there are a thousand employees, what percentage, how many out of a thousand are coming in on a given day?

Margie Rowe On a given day here? About 10 to 15% come in across S&T. In our laboratory facilities, they’ve been coming in almost every day throughout the pandemic based on their work. Our work here, program managers, project managers, communications, facilities, IT a lot of that work can be done from home. So, we’ve been lucky and being able to stay at home.

Tom Temin Because there’s a big building here and lots of floor space, but you have reconfigured it such that it accommodates the fact that people only 15% of headquarters people are coming in. Tell us more about that.

Margie Rowe That was done when we moved. We moved out of Vermont Avenue and that was a large move. You know, everybody had their own office. Everybody had all cabinets of paper. So, we got people to go virtual, worked with CIO, installed Teams. So that allows us to do collaboration. And we reduced our footprint so that we do a reservation system. So, the executive front office has permanent location. And then the people you would want if you were coming to the building and you needed help, the facilities office, the CIO help desk, the security office, the personal property office, those people have space every day, all day, same location. Today I’m sitting in a cube that I normally sit in when I come in, make a reservation and just come in and bring your stuff with you every day and then take it home every night.

Tom Temin Now, decades ago, I edited trade newspapers for the government market, and we depended on mail coming in. Just out of curiosity, this just came into my head. What is the state of paper mail that comes to a government agency like this? Does anyone mail anything with a stamp on it to DHS anymore?

Margie Rowe You would be surprised. Yes, we have mail that comes in every day. It gets delivered to our receptionist area and then gets passed out to the various offices across S&T. If it looks important, you know, sometimes we’ll have receptionist will open it up, especially who it’s addressed to, and they’ll send an email, or they’ll place a call and say, you’ve got mail.

Tom Temin We don’t have people sorting big bins of mail and running it through the halls and bins anymore.

Margie Rowe We probably do. That is done on a DHS wide level. So, I just see when the mail guy comes to our portion of the building, but he is pushing a cart, one of those old-fashioned carts, and they hand you your mail.

Tom Temin Some things never change, I guess because I saw an in and out basket somewhere. I think that was FedEx.

Margie Rowe Yes, that was at the receptionist. We have incoming mail, outgoing mail, FedEx, UPS, U.S. mail.

Tom Temin And what about paper consumption with only again in this building or the headquarters, with only 15% of the people in, I imagine copying and stapling and distributing memos. That must be a fraction of what it was too.

Margie Rowe Yes. We did a large effort when we left Vermont Avenue. We did a large effort of digitizing our records. So, we’ve worked with NARA on official records and digitized and move things off. We had a lot of people that spent a lot of time standing at a copy scan machine, scanning things. So, we’ve reduced our records. It’s all now virtual. If we need official documents, wet signatures, those types of things. Our EXEC Sec office takes care of those official records. But everything else now, if you want it printed, you come into the office. And we do still have those people. They come in the day they’re here, they print, and they take it all home and read it on paper.

Tom Temin Yes. And you probably don’t have encouraging people to have printers at home.

Margie Rowe No, we’re not allowed to have printers at home. DHS work has to be done on a DHS computer or a DHS printer. So, you should not be printing at home.

Tom Temin Got it. And the other question I had was telephones because it used to be that telephones were location based, even desk based. And you know, you know, 703 – 695 is the Pentagon, etc., etc.. Now not so much. And sometimes nobody answers the phone. That’s officially on a website for government agency.

Margie Rowe The DHS number does go to a person and then they will route it. There’s a number for S&T which rings at our one reception desk. But like my office phone that was at VTA, it now rings through Microsoft Teams. And I have my cell phone. So, you know, I have two numbers that ring I have to answer them.

Tom Temin But there’s still a physical receptionist even in this day and age.

Margie Rowe There’s one. Yes. And she also does. Well, she, he it’s a rotating position. They do facility support as well because sometimes, you know, people come in, mail gets delivered. People have questions. They don’t know how to get to a conference room. They don’t know where a building is. So, you do have to have a person to answer those questions.

Tom Temin Do you ever get calls from Doctor Kusnezov, the director saying, I’m lonely here. Can we have some more people in the office?

Margie Rowe We don’t get calls. We usually get emails. You know, we had an all-hands-on Monday, so a lot of people came in. He luckily is very personable. So, you know, he’ll sit. He has a little lobby reception area. He’ll sit and read the paper, go through a magazine, talk to people. So, there’s always somebody here. As with most agencies, I’m assuming Tuesday, Wednesday, Thursday are big days, Mondays a little lonely, Fridays a little lonely.

Tom Temin So I would think for people that may have kids at home or noisy pets, it would be like a pleasure to come here because that cube farm was quiet, sedate. Some nice views if you want to get up and stretch.

Margie Rowe It can be yes on days when there’s nothing going on. Monday we had everyone in. It was loud because it was like, I haven’t seen you since the last time we were all here. But today, you know, we come in, we work, we use headphones and earbuds when we’re on calls and in meetings. And, you know, it’s nice to see people again.

Tom Temin Now, are you a science and technology person or are you a federal administrator type person?

Margie Rowe I’m an administrator.

Tom Temin And how long have you been doing this type of work?

Margie Rowe I’ve been doing this for 15 years.

Tom Temin So you were pre-pandemic. And it must be just a sea change for people that do. What you do is to keep agencies running kind of unseen in the background.

Margie Rowe Yes it was. And people didn’t realize everything we did because it was just getting done until you move. And then all of a sudden they’re like, wait, where’s this? One of the things we did to help with that is when we started the move process. I did a started out as monthly, then it went to weekly chat and I was on teams, staff logged on. We talked about the move, I answered questions, and one of the surprising things out of that is people know me. I don’t know who they are because on teams you don’t see when you’re presenting. I couldn’t see all 200 faces, so I saw no one and they all see me now and they’re like, hi. I’m like, oh, hi, how are you?

Tom Temin And you must have made some modifications. Since you are the chief administrative officer, you can’t just have open pantry, kitchen views and boxes of cornflakes in the background.

Margie Rowe True. Yes. I you know, we have the virtual background, so it always it always looks very nice. But here, you know, we do have something that’s just come up recently is now that we’re back in the office, all of those office etiquettes that you had, if you come in every day, you remember them. If you don’t come in every day, sometimes you might need to be reminded, take out your trash.

Tom Temin And have you had to remind people, say on teams, when it’s a small meeting, even there, there’s protocols such as like no bathrobes.

Margie Rowe And we haven’t had issues with dress. Although the fun thing is we have seen pets come across in the background. We’ve heard someone go, not now, mommy’s on teams. So, we do still have that happening.

Tom Temin But the government’s going to survive in this 15%, 30%, whatever hybrid mode you think.

Margie Rowe I think you will, but it all is really based on your job. You know, TSA and CBP, they have to be on the ground every day. If you’re an administrator, there’s a lot you can do from your home.

The post How Homeland Security Department’s Science and Technology Directorate is dealing with its telework-induced high-vacancy offices first appeared on Federal News Network.

The Government Accountability Office is telling Congress that agencies could save millions of dollars, by making better use of federal buildings.

GAO, in its latest report on overlapping and duplicative federal programs, states agencies could save about $100 million, if they used predictive models to make smarter decisions about deferred maintenance and repairs.

The watchdog office says the government could save even more, by setting federal building utilization benchmarks and addressing underutilized office space.

Comptroller General Gene Dodaro told members of the Senate Homeland Security and Governmental Affairs Committee that predictive analytics would help agencies address a growing maintenance backlog.

“None of them were fully utilizing predictive modeling to say, ‘OK, if I make an investment here, I can save this amount of money. When’s the best time to make that investment?’” Dodaro told the subcommittee on emerging threats and spending oversight.

GAO found deferred maintenance and repairs grew from about $26 billion to nearly $49 billion between fiscal 2017 and 2022 for the federal government’s landlord, the General Services Administration, and the departments of Interior, Energy and Health and Human Services.

The watchdog agency expects HHS, Interior and Energy would be able to save $100 million by using these predictive analytics.

GSA said its potential savings would depend on the funding it gets to start these projects — but GAO estimates the agency could reduce its backlog by at least 0.5%.

Dodaro said agencies should also do more to address underused federal building space, “in light of the new working arrangements that agencies are forging and working their way through.”

The federal government owns over 460 million square feet of office space, which costs billions of dollars annually to operate and maintain. Federal real property management has been on GAO’s High-Risk List since 2003.

GAO recommends the Office of Management and Budget, which chairs the Federal Real Property Council, should set new federal building utilization metrics that reflect a greater level of telework across the federal workforce.

“As the country emerges from the pandemic and agencies continue to offer telework as an option, the federal government has a unique opportunity to reconsider how much and what type of office space it needs,” the report states.

OMB agreed with GAO’s recommendation. It told the watchdog office in March 2024 that it created a working group to start developing those benchmarks.

GAO said setting new benchmarks would push agencies to reduce the amount of office space they occupy. It estimates agencies would save at least 1% of costs from reducing leased space, and could result in $10 million of savings over five years.

Dodaro told lawmakers “there’s not that actually that many barriers” for agencies to start right-sizing their real estate footprints.

“Right now, the agencies are all doing it differently. Most of the utilization rates apply to headquarters buildings in Washington, not the buildings throughout the country and all the different assets. And you need different rates for like laboratories, versus other kinds of facilities, so it’s not an easy job. But somebody needs to take leadership,” he said.

GAO found last summer that all agency headquarters buildings in the Washington, D.C. area had excess space, including 17 that had an average building utilization of just 25%.

The Public Buildings Reform Board, in a more recent report, found the federal headquarters buildings operated at 12% of their estimated capacity, on average, between January and September 2023.

GAO looking at telework’s impact on federal workforce

Dodaro said GAO is also looking at what impact, if any, a greater use of telework has had on customer service, recruitment and retention and mission delivery across the federal government.

“The focus Congress ought to put on this, in my opinion, is on outcomes,” Dodaro said. “Are we getting the right outcomes that we want to achieve, and not try to micromanage how that happens? But if you don’t get the right outcomes, you need to hold the agencies accountable,” he said.

Sen. Mitt Romney (R-Utah) told the watchdog he’s “concerned about the ability to maintain a strong and effective workforce at the federal government level, given the telework policies that we have.”

Romney and Sen. Joe Manchin recently introduced the Back to Work Act, which would require federal employees to spend 60% of their work hours in the office. The Biden administration is currently calling on agencies to bring their employees into the office at least 50% of the time.

Romney said he’s leading the bill, in response to reported customer service constituents face when interacting with federal agencies still on a hybrid work schedule.

“Had the response time been the same as before COVID, fine. But in fact, the lines are longer. People are having a harder time getting in touch with the government,” Romney said.

GAO, a legislative branch agency, codified workplace flexibilities last year that allow its employees to telework up to four days a week.

“[If] we get the right outcomes, you can have workplace flexibilities. But if we don’t get the right outcomes, we’re not going to do it. Fortunately for us, we study it and evaluate it, and our outcomes are really good. And it doesn’t matter where people are,” Dodaro said about managing GAO employees.

The Partnership for Public Services this week named GAO the top midsized agency in its Best Places to Work rankings, for the fourth year in a row.

“People aren’t smarter just because they’re sitting in a government building,” Dodaro said.  “It may be that it’s telework, or it may be they don’t have the right people in the first place — they haven’t trained them properly to answer the calls they have, they’re not holding them accountable,” Dodaro said.

Meanwhile, Dodaro said telework and workplace flexibility are key incentives to attract in-demand tech experts to government jobs.

“Right now, the struggle to get AI people — the government can’t pay the same salaries, but you can give some workplace flexibility. You can get some high-tech talent. And we’ve been able to do that at GAO — scientists, computer security people — by giving them some workplace flexibilities they can’t get anywhere else. You wouldn’t have that caliber of talent in government in case you did that.”

A White House-led, interagency AI and Tech Talent Task Force, in a report last month, said agencies have hired over 150 AI experts, and are on track to bring on at least 500 new hires before the end of fiscal 2025.

However, Dodaro said agencies are going to have difficulty making those AI hires — although their expertise is needed to get the federal government up to speed with these emerging tech tools.

“Some of the data in the government is not good at all. It’s not complete, it’s not accurate, it’s not reliable. And if it’s used for AI applications, all you’re going to get is bad outcomes faster. So the limitation of the government, because of the lack of reliable data, is enormous and should not be underestimated.”

The post Better federal building upkeep, right-sizing office space key to governmentwide savings, GAO says first appeared on Federal News Network.

“We don’t have agility that we would like to have for military construction,” Col. Jeff Hammond, the deputy commander of the Marine Corps Installations Pacific, said during the Modern Day Marine conference on Wednesday.

For instance, the service recently transitioned the 12th Marine Regiment into the 12th Marine Littoral Regiment at Camp Hansen, Okinawa, spending a sizable amount of its budget to make sure the transition happens on time since it’s a capability the service needs to have by a certain time.

“That’s not negotiable. So we’ll go down that road. But what it comes down to is it’s a sacrifice. We can do anything; we just can’t do everything. So the ruthless prioritization of funding with that [operations and maintenance] process,” said Hammond.

Rear Adm. Dean VanderLey, commander of Naval Facilities Engineering Systems Command, said the biggest challenge for agile MILCON is the program budget process.

Budget submissions for all military construction projects for fiscal 2026 are due in August. It means that any project that will be included in the 2026 budget is already well underway. 

And if a new requirement comes up at any point in the coming fiscal year, the first chance to inject it into the budget will be in the 2027 budget cycle. The earliest the service can deliver a particular capability within this process would be fiscal 2029. 

“There’s nothing magic about construction for the Marine Corps that’s fundamentally different from construction in the private sector. The challenge is the program budget process,” said VanderLey.

“If you come to me today saying, ‘I need x,’ and we try to inject it in the normal MILCON process, I’m going to say, ‘I’ll get that to you by 2029.’ And most of that’s not the construction period. It’s the programming process that goes through DoD and ultimately through Congress.”

While there are emergency MILCON authorities that allow the Marine Corps to inject funds into urgent construction projects outside of the regular budgeting process, it will most likely come at the expense of other planned projects.

Within the contracting process, there are flexibilities to bypass bureaucracy and expedite project delivery, but there are trade-offs in terms of cost, schedules and capability.

For example, the Navy had a major issue with the seismic vulnerabilities in its dry docks in the Pacific Northwest, to the point where the dry docks got decertified.

Through undefinitized contract action, the service was able to complete almost $400 million worth of repairs to the dry docks in about four months.

“We put somebody on contract in a day, got them working, figured out the scope while we were doing the work, and then we’re able to definitize and then complete that very fast,” said VanderLey.

“Obviously, there’s some trade-offs there because that’s generally a fairly expensive way of doing business. But it is a way that we can do business to get that sort of resiliency.”

VanderLey said these are not necessarily ideal solutions to build truly resilient installations, but these expeditionary tools can be a way to achieve some agility within the MILCON process.

“I think we do do a good job of the being steady and stable inside the MILCON environment, but we need more authorities to be more reactive across the board,” said Brig. Gen. Jason Woodworth, the commanding general of the Marine Corps Installations West.

The post Marine Corps needs more agile MILCON process first appeared on Federal News Network.

Agencies are well on their way to reaching the Biden administration’s in-office goals for federal employees, but the Office of Management and Budget still plans to hold leaders accountable until they reach full compliance.

Based on conversations with federal leaders, agencies are roughly 80% of the way toward hitting the administration’s target for at least half of feds’ work hours being spent in the office, OMB Deputy Director for Management Jason Miller told House lawmakers Tuesday.

“We’ve been clear that our expectation is agencies are achieving at least 50%, while giving them flexibility for how to deliver,” Miller said during a House Oversight and Accountability Committee hearing. “We’ll hold them accountable for that.”

That 80% figure comes about a year after OMB first directed agencies to increase in-office presence. An April 2023 memo intended to strike a balance between in-office work and telework, while giving agencies leeway to determine what that would look like in practice. But several committee Republicans appear to be growing impatient with what they view as too long of a timeline for returning federal employees to the office — and what they said is a lack of workforce data from OMB.

In particular, some committee members during Tuesday’s hearing questioned Miller on why White House Chief of Staff Jeff Zients’ pressure on agency leaders for in-office presence took place several years after the height of the COVID-19 pandemic.

“It seems to me like COVID is ancient history right now,” Rep. Glenn Grothman (R-Wis.) said during the Oversight committee hearing Tuesday. “That email [from Zients], dated January 2024 — kind of recent — does it imply that things are going slower than your expectations?”

Echoing the stance that Zients has taken with agency heads, Miller said OMB expects agencies to completely follow through with implementing the 50% in-office presence — though he did not provide a specific deadline for implementation.

“The purpose of that approach was to strengthen teams and organizations, make sure that we had strong culture, make sure that we had innovative teams, make sure that we’re able to bring people on board,” Miller said during the hearing. At least half of federal employees never telework, as their job duties require them to be entirely on site, Miller added.

But in reaction to OMB’s return-to-office push, many federal employees as well as their unions have argued that telework is a crucial flexibility for strong federal recruitment and retention. They have repeatedly urged agencies to use lessons learned from the pandemic as a rationale to maintain higher telework levels — and not push a 50% return-to-office.

Office space concerns

In contrast, some Republican committee members said they believed a 50% in-office presence wasn’t a high enough goal. A few pointed to a 2023 report from the Government Accountability Office, which revealed many agencies sitting at or below 25% capacity in their physical office spaces.

“For most of America, 50% would still seem like a low mark,” Rep. Michael Cloud (R-Texas) said to Miller during the hearing. “I mean, granted, that would be progress compared to 25% … [but] we don’t have agencies coming to us and saying, ‘Well, we don’t need this building anymore, or we don’t need this office space, so we can reduce our budget here to make up for it there’ — so I would just encourage you to continue to work on that.”

GAO, though, has said the challenge of handling federal office space long predates the COVID-19 pandemic. Federal property management has remained on GAO’s High Risk List since 2003. The underutilization of federal office space is a more complex issue than can’t be blamed solely on telework, GAO officials have said. In fact, by GAO’s calculations, even if an agency had 100% staff attendance, the office space it would still only be about two-thirds utilized.

The Public Buildings Reform Board has reported that agencies now have a “unique opportunity” to reinvest their budgets into more modern office amenities, if they’re able to sell or otherwise dispose of unneeded real estate.

During the hearing, Rep. Stephen Lynch (D-Mass.) encouraged OMB to follow suit of the private sector and look at ways to cut back on total office holdings by maintaining telework at least to some degree.

“The private sector sees the value in working from home, and so they’re capitalizing on that,” Lynch said. “They don’t need all this expensive space now … they’re operating more efficiently.”

Miller said the administration is heading in that direction with its efforts for agencies, but is still leaving room for adjustment later on, if needed.

“In crafting our governmentwide guidance, we have followed very closely the research and actions by the private sector,” Miller said. “Ultimately, we need to compete for talent … And right now, the research suggests that where we’re landing is the right answer. But of course, we’re going to be dynamic going forward.”

Additionally, Rep. Shontel Brown (D-Ohio) pointed to reports showing that remote work and telework help increase diversity in the federal workforce.

“The administration has a significant amount of leverage to promote changes in the workforce, making it more reflective for people of all backgrounds … for people who face all types of barriers, like access to transportation, taking care of an aging relative or having to pick up their children from school,” Brown said.

Frustrations over in-office, telework data

At the same time, several committee members voiced concerns about delays and backlogs in public-facing federal services, which Chairman James Comer (R-Ky.) said he blames on telework.

“You can see the frustration on our side of the aisle because we don’t believe the federal government is any more efficient or productive with its new, wide-open telework policy,” Comer said. “[Caseworkers] have had significant difficulty getting people on the phone at the [Department of Veterans Affairs], at the IRS, at the U.S. Department of Agriculture — the agencies go on and on … It appears that’s because they have a lot of their workforce still working from home.”

In contrast, a large majority of federal employees themselves have said telework actually improves their performance, and has positive ripple effects on agency recruitment and retention. A recent Federal News Network survey showed that about two-thirds of feds said they’re more productive while working from home.

During the hearing, Comer once again doubled down on his push to get deeper telework data from OMB and other agencies — asking OMB for details on the number of teleworking employees across government, and how telework impacts productivity. Unsatisfied with OMB’s response, Comer said he doubted that agencies have the information on hand at all.

“No one says we’re totally opposed to telework — we just want to see data that shows it’s more efficient,” Comer said. “And I don’t think you all have that data.”

The Office of Personnel Management releases an annual telework report, detailing figures on how many federal employees are teleworking at each agency. And the Federal Employee Viewpoint Survey (FEVS) offers additional data on federal telework.

But in Congress, the push for deeper data continues to intensify. OMB is nearing a congressional deadline from the fiscal 2024 appropriations package, which tells OMB to turn over all agencies’ return-to-office “action plans” by late June.

The post OMB holding agencies ‘accountable’ for 50% in-office presence first appeared on Federal News Network.

As agencies send their employees back to the office more regularly, some feds are showing up to work only to find a sea of near-empty cubicles waiting for them.

Despite an administrative push for more collaboration and “meaningful” work in the office, employees said in reality, many federal offices have limited or no physical spaces to effectively host team meetings or events.

“It is cubicle city,” wrote one respondent to Federal News Network’s recent survey of more than 6,300 current federal employees.

When it came to physical office space, the return-to-office survey’s results were split into nearly equal thirds. Employees’ responses had close to even numbers for those who found office space either sufficient, insufficient or somewhere in between.

With more employees coming into the office more often, some survey respondents said it’s been challenging to find the right type of space to work — or to have enough space in the first place. Others said their office arrangements aren’t adapted to or reflective of the changing needs of working in person.

“We don’t have great meeting spaces,” one survey respondent wrote. “I tried to meet with a coworker on my floor last week and we couldn’t connect to a larger screen because there were none provided. We had to work side by side on our laptops.”

Those with cubicle-style work arrangements in older federal buildings said the setup is distracting, especially for those who have now spent years getting accustomed to work-from-home arrangements. While working in cubicles, employees said they can often hear others’ conversations or calls — and that leads to lower productivity.

“It’s very distracting having to hear every program’s meeting — not to mention, when someone comes to work sick, it’s nerve-wracking,” one respondent wrote.

Another survey respondent wrote, “The new desk arrangements are uncomfortable and not helping me stay relaxed and focused at work. [There are] smaller cubicles [and] half walls, arranged so our backs are to everyone else.”

Some respondents expressed a desire for agencies’ office space setups to better align with the administrative goals of working in person. They said agencies should put more emphasis on collaborative, co-working spaces, rather than siloing off employees to complete individual work.

“I mostly wish that our offices had more team space, conference space [and] workshop space. That’s what we need,” one respondent wrote. “We don’t need butts in seats, we need space for engagement. That’s the only useful aspect of our offices.”

Balancing space with design after return-to-office

The return-to-office survey findings contrast with agencies’ efforts to create “core collaboration days,” which align employees’ in-office schedules so they’re working in person on the same days of the week. In the survey, results were relatively neutral on the impacts of those collaborative efforts.

Employees’ concerns over the functionality of office space come at the same time that agencies are struggling to reduce their physical footprint. A recent report from the Public Buildings Reform Board found that agencies have more office space than the federal workforce needs, and the cost of maintaining that space continues to rise.

But at the same time, the board said while selling or disposing of real estate they don’t need, agencies have a unique opportunity to reinvest their budgets in office spaces with modern amenities, which could improve staff morale.

The General Services Administration’s guiding principles for federal office space recognize that there’s still a need for office space, but that its purpose is shifting. Now, the focus is on making space for collaboration and connections amid a largely hybrid federal workforce.

GSA has been trying to address the functionality of office space through the creation of its Workplace Innovation Lab (WIL). Federal employees and teams can reserve space in the D.C.-area co-working space, which uses comfortable furniture, innovative conferencing layouts and technology that’s better primed for employee collaboration.

Some of the WIL’s workspaces, for example, include reconfigured cubicles intended for small team meetings rather than individual work.

Chuck Hardy, the chief architect at GSA, told Federal News Network in February that on the whole, agencies should ensure their workspaces are agile and flexible enough to address the current work environment, while also readying that space for possible changes in the future.

Resources, food options in and around the office

Beyond office space alone, employees said some resources are limited both in and near the office. For instance, in the return-to-office survey, feds said there aren’t enough affordable, healthy lunch options around some federal buildings. For some, federal cafeterias and vending machines leave much to be desired.

After returning to the office more often, more than half of survey respondents said food options were “insufficient.”

“The cafeteria is too expensive, and the food is less than adequate,” one survey respondent wrote. “The distance to grab food takes the majority of my lunch time. I’m unable to drive somewhere due to the lack of time — the distance to walk to my car and drive to the location and back.”

Other survey respondents said there were no food options nearby, period.

“Our office cafeteria has closed,” one respondent wrote. “To eat lunch, I must bring it from home or walk over a mile each way.”

Another respondent wrote, “food options within the building are non-existent. A large modern cafeteria has been shuttered for four years.”

By comparison, close to 80% survey respondents are finding the availability of office equipment, such as chairs and desks, as well as computers and other in-office technology, either somewhat or completely sufficient.

Some survey respondents, however, still raised concerns about shared spaces, as well as the use of hoteling, or desk-sharing. A couple respondents pointed out that if too many employees are present on a certain day, not everyone will be able to get their own desk.

In large part, the availability of space depends on the agency and the specific office building.

For example, one survey respondent wrote that “hoteling space is sufficient, though remote meetings are problematic and conference rooms are not where they need to be for successful hybrid meetings.”

But another respondent wrote that “hoteling space is very limited. Equipment at the hotel spaces is hit or miss. Some are pretty old.”

Still, some employees said regardless of the availability of resources or collaborative spaces in the office, they didn’t feel a desire or a need to report to work in person. Like the results of many return-to-office surveys, a majority of respondents said they are more productive while teleworking.

One respondent wrote, “There is nothing the office can provide me by way of equipment or amenities that are enticement enough to justify the commute or cost of commuting, when compared to the comforts provided by home.”

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“They’re older systems. They were purpose built for us in 1989. And a lot of that computer language has changed over the years,” Templeton said on The Modernized Warehouse. “And so we’re in the process of doing a modernization right now where we’re bringing each one of those systems up to a more current software language. They’re Oracle based.”

That modernization should be complete within the next 12 to 18 months, Templeton said. NLSC has already completed upgrades to the Weather Integrated Logistics System, which is the linking mechanism between other agencies and NOAA’s Consolidated Logistics Systems (CLS) suite. Next in line are CLS itself, and a subsystem known as Alpha, which tracks repairable parts through their repair cycle. These upgrades are going to bring significant improvements across the enterprise.

Streamlining, improving logistics systems

For one thing, it will allow employees to view all the various logistics systems and subsystems in a single screen to get a comprehensive view of the logistics process, from requisition to shipment tracking. It will also allow NLSC to integrate newer technologies to further modernize processes. The prime example, Templeton said, is barcoding parts.

“That language has to allow for us to be able to integrate that barcoding software,” he told the Federal Drive with Tom Temin. “Right now when a material handler pulls something off the shelf to ship, he brings it over to the shipping department, and the shipping department has to manually input that data into the system. Whereas with a barcode it’d be a quick scan. And then they would be onboard to basically ship it out in a much faster method.”

That’s important for NLSC, because emergency requisitions have to be shipped out in 24 hours, while routine requisitions have 48 hours. That time savings from barcodes would allow NLSC to achieve its logistics mission more efficiently.

Templeton also said vendors for the products themselves already produce the barcodes on the shipping boxes. That means NLSC isn’t adding any work on their end; they’re just taking advantage of existing elements.

“So we’ve prepped the battlefield, so to speak, with the barcodes already in place, so that when our technology catches up, then we integrate it right into the system,” he said.

Training

Templeton also said this process would be easier for employees and customers; he won’t have to retrain the entire customer base or his employees on a new system. The existing one will simply get more efficient.

And that’s important, because Templeton said NLSC is currently going through a retirement “cycle.” Of the 24 employees that work there, Templeton said the majority have done so for more than 20 years, and a number have either recently retired or are preparing to.

That means Templeton has been managing the knowledge capture process, to ensure that the institutional knowledge absorbed by those long-term employees transfers to their newer replacements. Always a difficult proposition, it would be much more so if NLSC adopted an entirely new set of systems and processes immediately after the new employees spent a year shadowing experienced employees and learning the current ones.

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The federal conversation about improving space utilization began more than a decade ago, with the Office of Management and Budget directing agencies to “Freeze the Footprint” in 2012, and then to “Reduce the Footprint” in 2015. Since then, there has been a gradual reduction in the total size of the federal portfolio. However, the Government Accountability Office report from July 2023 revealed widespread under-utilization in the federal real estate portfolio in the post-pandemic era of hybrid work. Although there has been a modest reduction in the total square footage of the federal portfolio, utilization of federal space has gotten significantly worse.

Not surprisingly, Congress has sounded the alarm, advancing a flurry of legislation and executive branch reporting requirements designed to improve space utilization and to eliminate excess space from the federal real estate portfolio. There have been instances in the past where the executive branch has failed to take action to shed excess real estate and Congress ultimately stepped in to legislate the outcome it wanted to see. As budget pressures continue to mount and chronic underutilization persists across the federal portfolio, patience is wearing thin.

Agency strategies for space reduction

There is a clear and compelling incentive for agencies to improve utilization and eliminate spending on rent for space that sits empty. Most agencies pay rent from a general salaries and expense account where all funds are fungible. In cases when rent is paid out of a separate account, agencies have the ability to repurpose any rent savings through a transfer or reprogramming notification. As budgets get tighter, the choice is clear: Redirect funds currently spent on unneeded square footage towards critical activities that help agencies meet their mission.

Some federal agencies have taken a proactive approach to improving space utilization and are redirecting funds previously earmarked for now redundant real estate to more mission critical activities. Specific strategies include: 

Leverage upcoming lease expirations

The expiration of the government firm lease term provides an opportunity for agencies to right-size their real estate requirements. This could take the form of releasing space upon lease renewal or conducting a full and open procurement for a smaller replacing lease. For example:

• The Patent and Trademark Office plans to release two of five buildings from its Alexandria, Virginia headquarters campus upon lease renewal in August 2024. This represents a reduction of 763K rentable square footage (RSF) that will save the agency more than $30M in rent costs each year.
• In September 2023, as part of the process to execute a five-year lease extension at its current headquarters location, the Securities and Exchange Commission released almost 210K RSF, a 17.5% reduction in total footprint..
• As its lease in the NOMA neighborhood of Washington, D.C. expires in 2025, the Justice Department is downsizing the overall space requirement from 576K RSF to 465K RSF, which represents a reduction of nearly 20%.

Exercise the flexibility of cancellable occupancy agreements

The General Services Administration cancellable occupancy agreement (OA) has long been a central element of its value proposition. It allows GSA to provide a form of “insurance” by serving as a clearinghouse for unneeded space and mitigating the risk of any change in an agency’s space requirements across the broader portfolio of federally owned and leased assets. Although GSA issued an asset management alert in April 2023 that required federal tenant agencies to sign non-cancelable OAs, the GSA policy change focused solely on new occupancies. For existing tenancies where the agency had signed a cancellable OA prior to April 2023, federal agencies retain the right to turn space back to GSA with 120 days-notice.

The cancelable OA remains an important tool for federal agencies looking to right-size space requirements and better utilize space within their existing footprints in advance of formal lease expirations. Recent examples include:

• The Transportation Security Administration identified underutilized space at its Springfield, Virginia headquarters totaling 120K RSF (about 19% of the original 622K RSF space requirement) and was able to backfill one vacated floor with another Department of Homeland Security component in need of swing space related to an in-progress consolidation at another facility. The repurposing of unused space within their existing footprint eliminated millions of dollars in redundant rent costs.
• The Federal Trade Commission gave back 252K RSF (about 67% of its original 375K RSF space requirement) at its leased location in Washington, D.C.

Returning unoccupied leased space back to GSA not only creates an opportunity for tenant agencies to reduce rent burden, it also allows GSA to lessen the federal government’s overall financial liability. Most federal leases contain an adjustment for vacant premises clause that allows for a reduction in operating expenses when the government vacates all or part of the premises before the lease expires. When the government vacates space prior to the expiration of the lease term and provided that, the lease contracting officer gives 30 days advance written notice to the lessor, the rental rate and base for operating cost adjustments will be reduced. The return of excess space to GSA should not be viewed as shifting costs from one federal entity to another, but as an opportunity for the government as a whole to reduce its financial exposure for space it no longer requires.  

Consolidating into federal buildings

Massive amounts of underutilized space across the federal inventory suggest that there’s a significant opportunity to dispose of unused assets by collocating and consolidating federal agencies into fewer government-owned buildings. There are some recent success stories of agencies consolidating into federally-owned space, but overall, the cost of renovating and modernizing federal buildings to accommodate agency occupancies from leased space  is expensive and the project economics are often difficult to justify when compared to the cost of remaining as is or simply extending OAs in leased space

Given the slow pace of capital appropriations, these projects can take more than a decade to complete. Add to that the complication of bifurcated funding between tenant agencies who pay for tenant improvements and GSA who is responsible for core and shell costs, and it’s not difficult to understand how inefficient funding quickly translates into years of delay and ballooning project costs. A prime example is the renovation of the Commerce Department headquarters building — a project that started more than 20 years ago in 2003 and is only on phase 4 of 8, despite $681 million in approved funding. There are numerous opportunities to reduce rent costs through consolidation from commercial leases into federally owned buildings, but this action is limited by the complexities involved in converting federal buildings into space that meets contemporary office standards.

Equal and active partners

Federal agencies should not pay for space that isn’t being used. The extensive underutilization of federally occupied space highlighted in recent reports from GAO and the Public Buildings Reform Board have crystallized just how untenable this approach is for the long-term. There are some compelling examples of agencies that have taken a proactive approach to improve space utilization. The real estate savings can be redirected to support mission critical activities. But success is dependent on agencies positioning themselves as equal and active partners with GSA and demonstrating a willingness to endure criticism from those that would prefer to see the status quo maintained. 

Norman Dong is a partner at FD Stonewater and served as GSA Commissioner of Public Buildings under the Obama administration. 

Robert Peck is a principal and co-leader of the government and defense practice area at Gensler and served as GSA commissioner of public buildings under the Clinton and Obama administrations.

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That’s coming from the Public Buildings Reform Board, an independent agency focused on selling valuable, but underutilized government buildings.

It finds agencies have more office space than the federal workforce needs, and the cost of maintaining this space keeps increasing. The board, in an interim report to Congress last month, said the “status quo of nearly empty federal buildings is not financially or politically sustainable.”

The report finds many federal buildings owned by the General Services Administration are over 50 years old, and showing their age at a time when the agency faces a multi-billion dollar maintenance backlog.

The report, however, adds that “there are several reasons for optimism.”

By selling or disposing of real estate they don’t need, agencies have a unique opportunity to reinvest their budgets in office space with modern amenities that will improve morale across the federal workforce.

Former GSA Public Buildings Service Commissioner Dan Mathews, the newest member of the PBRB, said in a recent interview that right-sizing the federal footprint would be a “win-win opportunity.”

It would ensure federal employees get better-quality workspace, and allow GSA to manage a federal real estate portfolio that’s more cost-effective for taxpayers.

“The purpose of the board has never been more relevant than today, given the really low levels of occupancy, Mathews said. “Basically having an empty federal building that no one’s going to doesn’t do anything for the local economy. It’s actually quite a harmful economic dead zone.”

The Government Accountability Office found last summer that all agency headquarters buildings in the Washington, D.C. area had excess space, including 17 that had an average building utilization of just 25%.

The PBRB’s report goes one step beyond GAO’s data snapshot. The board analyzed commercially available, anonymized cell phone data at federal building locations across D.C., between 8:00 am and 6:00 p.m. and repeated visitation patterns to identify an estimated number of occupants for each building.

The board, in its report, said commercial real estate experts use this data extensively to establish use patterns.

PBRB’s data analysis finds the federal headquarters buildings operated at 12% of their estimated capacity, on average, between January and September 2023.

At a maximum, the U.S. Agency for International Development saw 26% occupancy of its headquarters building during this period.

Meanwhile, data shows the headquarters for the U.S. Agency for Global Media reached, on average, 2% of its building capacity.

The PBRB’s data analysis finds an even lower utilization rate at the Energy Department. But the board concedes “this number is likely to be flawed,” and has reached out to the department for clarification.  The board said it did not receive a response from the department before publishing its report.

Overall, the board finds that the median occupancy at federal workspaces in 2023 is 30% lower than 2019 levels.

“The taxpayer is spending a tremendous amount of money to house an extremely small number of people in buildings that, frankly, are pretty awful, oftentimes. They’re spending a fortune there, they’re not getting much for it, and the outcomes are bad,” Mathews said.

While many federal buildings in the D.C. metro area require federal employees to swipe in with a government ID to get into their office, Mathews said this card-swipe data is hard to come by for  government buildings beyond the Beltway.

“If you don’t have the right data to know, is that actually happening, that makes it challenging,” Mathews said. “Buildings are incredibly expensive capital assets. If you don’t know how those assets are being used, it’s really difficult to manage them effectively.”

As the federally owned building portfolio ages, Mathew said many sites require repairs and upgrades that are so costly that GSA would see no return on investment with the projects, in terms of the rent they would be able to charge federal agencies, or would lose money in the process.

“In those situations, they should be looking towards a leased solution. If they cannot generate a return on investment for a federal building, that should be on the path of disposal,” he said.

In the case of the Transportation Department headquarters, for example, it makes sense to renovate. The building is less than 20 years old, in great condition, and has low total occupancy.

“You could easily have additional Department of Transportation components occupy that building at a relatively low investment level,” Mathews said.

By comparison, most of the major systems in the Labor Department’s headquarters are past their useful life, and that the building has a low occupancy rate.

The PBRB report finds the Labor Department’s Frances Perkins Building has approximately $382 million in deferred maintenance. The board also estimates that it costs about $18 million a year to operate and maintain the building .

On top of this yearly operating and maintenance cost, the department pays GSA about $40 million in annual rent.

“The amount of money you’d have to spend in that building per foot, you’re just not going to be able to pencil that out — you’re not going to get a return on investment on that,” Mathews said, adding that many other federal buildings fall into this category.

“They are so empty, that there is no prospect that they are going to fill those up. And their capital liabilities are so high that you couldn’t justify renovating that building, even if you could fill it,” he said.

In fiscal 2022, the 24 largest federal agencies owned nearly a quarter million buildings, covering more than 2.4 billion square feet, according to the latest GSA data. That portfolio of owned buildings accounts for more than $16 billion in annual costs.

When it comes to right-sizing federal office space, Mathews said the low-hanging fruit isn’t the “monumental” historic federal buildings on Constitution Avenue, but rather the mid-century buildings built in the 1950s and 1960s that Mathews said are often “an eyesore, and also have massive capital liabilities.”

“GSA doesn’t have enough money to take care of all of them — you’ve got to make hard choices. It’s pretty clear which ones you ought to be getting rid of, and which ones you ought to be putting your capital into, and investing so you can keep them in good condition,” he said.

Mathews said the board’s data should help the Biden administration as it implements its return to office efforts.

“When the federal government unencumbers large swaths of federally locked down properties that have inherently valuable locations, you’ve seen tremendous economic development, growth, value creation that didn’t exist before,” he said.

“The [National] Mall is like New York City’s Central Park. It’s one of the most heavily visited locations on the globe. But yet, you get a few blocks off the mall, particularly south of the mall, and it’s just empty federal building after empty federal building. But the potential there is truly tremendous over time,” he added.

Congress created the Public Buildings Reform Board as a small, independent agency under the 2016 Federal Assets Sale and Transfer Act (FASTA), to help GSA identify federal buildings and properties that agencies no longer need, and to sell or repurpose them.

The board, under FASTA , is scheduled to disband in May 2025. But its members say agencies, with lessons learned from the COVID-19 pandemic, have a “once-in-a-lifetime” to get rid of office space they no longer need.

The board, however, has run into several hurdles. The Office of Management and Budget rejected a whole slate of its recommendations from the PBRB in January 2022, on the grounds that it was “unable to conclude that the risks to the government posed by the disposition of the proposed properties are acceptable to the taxpayer.”

Mathews said some of the board’s challenges have been “disappointing and surprising.”

“OMB is required to do certain things under the law. They’re supposed to get data from agencies — recommendations for disposals. For the last two years, they haven’t even made the request,” Mathews said.  “I was shocked at just how often PBRB requests information and they don’t get it.”

The board’s next and final round of recommendations is due to OMB by December 2024. PBRB, according to its interim report, is looking at 27 properties with about 13 million usable square feet.

The House in March passed the FASTA Reform Act, which extends the termination date of the PBRB to Dec. 31, 2026, and would give the board additional authority. If the bill becomes law, the board would create a fourth round of recommendations for sale and disposal.

“Congress fully understands the needs for this is great. And it’s bipartisan — this is not a partisan issue at all,” Mathews said.

Over the coming months, Mathews said the board will continue to meet with agencies to discuss the board’s recommendations for selling and disposing of underutilized federal buildings.

“If keeping this property within the federal property is not really defensible any longer, what’s the alternative? Obviously, the agencies have to be involved in that process,” Mathews said.

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A lot of DoD facilities — from barracks to office buildings — are in pretty bad shape, and because of consistent maintenance shortfalls, things are generally getting worse. So as part of a new strategy for its bases, the department is trying a new approach, seeking permission from Congress to test a series of pilot projects that would demolish old buildings and consolidate the people who live and work in them into “livable communities.”

In a legislative proposal the department sent to Capitol Hill last week, officials asked to demonstrate the new demolition and consolidation ideas at five locations over the next three years, spending up to $25 million at each site. It would be one of the first large tests of the new Resilient and Healthy Defense Communities strategy the department announced in February.

“We’re working on three lines of effort to guide our infrastructure investments: adopting human centered requirements, optimizing our footprint, and transforming our portfolio management,” Brendan Owens the assistant secretary of Defense for energy, installations, and environment told the House Armed Services Committee this week. “The strategy will ensure that our spaces are healthy, safe, functional, resilient and enhance the quality of life and readiness of our service members, their families and the civilian workforce. Together, our efforts will drive changes across the Defense infrastructure enterprise and ensure that it is managed as a strategic asset to promote the well-being of our total force.”

As to the pilot program specifically, the basic idea is to use military construction funding to tear down smaller older buildings that have fallen into disrepair, and move their residents or employees into newer, larger facilities, built with modern standards and that cost a lot less to maintain.

Legal barriers

While that might sound fairly straightforward, Defense officials say that under existing law, it’s actually very hard to achieve, mainly because of how DoD’s budget is allocated and the Defense budgeting system’s strict controls over different colors of money.

As of now, for any military services to conduct that kind of facility realignment, they’d need to plan military construction (MILCON) funding to build the new facilities in one budget year, and then move the new tenants in once it’s done. But funding for the demolition of the old buildings would have to come separately, likely several years later, because MILCON money can’t be used to fund demolition projects.

Instead, that funding would have to come from operation and maintenance (O&M) funding — an extremely broad category that receives intense competition for immediate priorities each year.

Demolition already a large tool

That’s not to say demolition isn’t happening. Installation officials say it’s often the best way to solve the problem of older facilities becoming too expensive to maintain.

Ravi Chaudhary, the assistant secretary of the Air Force said his service is already increasing its demolition budget to help reduce its $46 billion backlog in facility maintenance.

“We’re going to get after this by reducing our inventory, and using privatization to reduce the denominator,” he said. “Privatization allows us to reduce that backlog, but we’re also roughly quadrupling our demolition spending from roughly $30 million a year to about $140 to 160 million per year [over the next five years].”

But as of now, those backlogs are growing across the services. That’s partly because of chronic underfunding in DoD’s facility sustainment, restoration and modernization (FSRM) accounts. The Pentagon’s current goal is to fund those accounts to 90% of the level that its models say is needed to keep facilities from deteriorating, but the military services routinely fall short of even that goal.

There is one large exception this year, however: military barracks, sometimes called “unaccompanied housing.” In the wake of a scathing GAO report on barracks conditions last year, each service is now funding barracks maintenance to 100% of their models’ funding requirement.

“The Army recognizes that we have a sizeable backlog of deferred maintenance needs for hundreds of thousands of buildings,” said Rachel Jacobson, the assistant secretary of the Army for energy, installations and environment. “This deferred maintenance, which emerged over the course of many years, has serious repercussions … Simply put, any increase in our inventory of poor and failing barracks for any reason is unacceptable and must be reversed. And barracks that are in good condition must stay that way. That is why the Army is requesting 100% of the funding required for barracks sustainment. We are also taking a number of steps to improve the soldier experience and new and renovated barracks, both in living spaces and communal areas.”

But even if the services manage to keep their barracks from degrading any further, across their broader portfolios, officials say they simply have more facilities than they can afford to maintain, and the issues aren’t limited to housing.

In the Marine Corps, for example, each building that houses division and battalion headquarters commands are now rated as in “poor” or “failing” condition.

“The majority of our infrastructure, whether barracks, utilities or public shipyards, is not in the shape it should be. As an institution, we have allowed these assets to degrade over time; we have accumulated and deferred significant risk and allowed the risk to accumulate and compound,” said Meredith Berger, the assistant secretary of the Navy for energy, installations and environment. “And the adversary always has a say, whether we’re talking about kinetics and components or water. We’ve seen increased external impacts that reduce our ability to be resilient and respond — with the emergent and urgent frequently overtaking the enduring importance in a constrained funding environment. No matter what the cause, the cost is readiness, and our sailors and Marines shoulder the consequences.”

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