Department of Energy

The Department of Energy (DOE) reported that for fiscal year 1997 it had more than $20 billion in property, some of which is no longer needed now that the Cold War has ended. DOE acknowledges that it needs to reduce inventories of property and equipment and estimates that, for its largest environmental management sites, it spends about 20 percent of its annual budget to maintain their facilities and infrastructure. Federal property management regulations include criteria to determine when real property--land, improvements, and structures--is excess to an agency's needs. However, neither federal property management regulations nor DOE regulations and guidance include specific criteria to determine when personal property, including computers and cars, is no longer needed. DOE's property records do not consistently provide information to help identify property that is no longer needed. DOE acknowledges problems with its identification and disposal of excess real and personal property. Because the costs associated with the maintenance and storage of unneeded property are generally not separately identified, little incentive exists to spend the resources necessary to dispose of it. Regardless of these problems, field and program offices have developed innovative approaches to dispose of property, such as including a performance-based incentive in the site management contract to encourage the contractor operating the site to dispose of excess property during the fiscal year.

GAO noted that: (1) federal property management regulations include criteria to determine when real property is excess to an agency's needs; (2) however, neither federal property management regulations nor DOE's regulations and guidance include specific criteria to determine when personal property is no longer needed; (3) when property has been identified as excess, guidelines for the disposal process are well defined for both real and personal property; (4) DOE's property records do not consistently provide information that would help identify property that is no longer needed; (5) recent changes to DOE's regulations require that property records identify property that has already been determined to be excess; (6) in July 1998, DOE modified its real property records system to identify property that has been determined to be excess; (7) this system also provides additional information, such as the percentage of a facility currently in use, that could be used to identify other property that is no longer needed; (8) similarly, in May 1998, DOE revised its personal property management regulations to require that contractors' records include information on current usage, such as categorizing property as active, in storage, or excess; (9) however, these regulations do not provide criteria for determining when personal property should be placed in these categories; (10) DOE acknowledges problems with its identification and disposal of excess real and personal property; (11) Department officials cited, for example, a lack of funding for the environmental cleanup of the current inventory of excess real property and a lack of incentives to identify property as excess; (12) because the costs associated with the maintenance and storage of unneeded property are generally not separately identified, little incentive exists to spend the resources necessary to dispose of it; and (13) regardless of the problems, field and program offices have developed some innovative approaches to dispose of property, such as including a performance-based incentive in the site management contract to encourage the contractor operating the site to dispose of excess property during the fiscal year.