Real Property Management

Reforms in Four Countries Promote Competition Gao ID: GGD-94-166 September 30, 1994

The General Services Administration (GSA) manages and oversees 268 million square feet of space in about 8,000 buildings. These buildings are known as real property. GAO testified in 1991 that federal buildings and other real property are valuable but undermanaged national assets that are integral to federal departments and agencies for carrying out their operations. GAO also said that long-standing structural and managerial problems limited GSA's ability to strategically acquire and manage its real property assets, effectively support agencies' mission objectives, and maximize the taxpayers' returns on GSA's portfolio of owned or leased buildings. This report examines (1) the reforms that four countries--Australia, Canada, the United Kingdom, and Sweden--made to their real property organizations to address the long-standing problems that were common to the United States and these countries; (2) the results of these reforms to date; and (3) the lessons the countries learned from these reforms that could be useful to the United States as it introduces reforms to better meet its real property needs.

GAO found that: (1) the countries' real property management problems have included poor business practices, inadequate asset management strategies, and policy and funding barriers; (2) based on competitive and entrepreneurial principles used in the private sector, the countries introduced private-sector competition for real property services and space, adopted more business-like practices, provided more strategic management of assets to maximize investment returns and meet customer needs, and separated building services from asset management and policy oversight and development roles; (3) the countries' management reforms began in the late 1980's and are ongoing, but definitive results are not yet available; (4) the countries have reorganized their real property organizations to be more competitive and responsive to customer needs; (5) the reforms in three of the countries appear promising in terms of improving economic performance and satisfying customer needs; (6) some real property managers are still hampered by untimely approval processes for building acquisitions, restrictive disposal requirements, and their inability to retain proceeds from property disposals; and (7) the lessons learned from the countries' real property reforms include the importance of competition, and the need to establish a framework for managing the transition and identifying accountability.

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