Federal Buildings Fund and the User Charges Paid Into the Fund by Federal Agencies

Information was provided on 3 issues concerning the General Services Administration (GSA) Federal Buildings Fund: (1) the apparent failure of the fund to pay for operations, maintenance, and repairs of federal buildings; (2) the failure of the fund to finance the purchase or construction of new buildings; and (3) whether the level of services provided by GSA to its tenant agencies was commensurate with the user charges that were levied. The first two problems reflected a growing cash drain on the fund which left an average of only $50 million of an anticipated $200 million available anually for new construction. An analysis of the fund's financial problems identified some general problem areas and suggested remedies. In 1975, 1976, and 1977 the Office of Management and Budget and congressional appropriations committees made reductions in space rental rates paid to GSA resulting in a total loss of $600 million in income. The cost of federal buildings was not recoverable by commercial rents, and the costs of space management services peculiar to the responsibilities of GSA were greater than the services normally provided by commercial landlords. A number of federal buildings turned over to the fund in 1975 at no charge required large outlays for alteration and major repairs because of their age and condition. In leasing buildings from private landlords, GSA unreasonably burdened itself with poor compensation for inflation and needless administrative effort. No conclusion was reached on whether the services GSA provided its tenanants were commensurate with a commercial equivalent rental charge. GSA charges to tenants for services and use in excess of normal levels were under review by GAO. Regarding the financial capacity of the Federal Buildings Fund to fully recover from its income the cost of constructing and operating federal buildings, the following suggestions were made: (1) construct federal buildings to the standards of commercial buildings; (2) change the law to permit GSA to charge agencies a rent commensurate with the higher costs and quality of federally constructed buildings; (3) provide GAO with supplemental appropriations for construction of new buildings and the renovation of old buildings; (4) authorize payment for services beyond those normally offered by commercial rents from a separate appropriation; or (5) some combination of these.