Public-Private Mix

GAO reviewed the cost-effectiveness and performance of the General Services Administration's (GSA) real property management services, such as building maintenance and custodial services. The cost comparison, performance evaluation, and historical tracking data GAO reviewed for 54 activities indicated that GSA's decisions to retain activities in-house or contract them out were sound. Post-decision analyses and evaluations by GSA showed that the agency generally obtained services at a reasonable cost and at an acceptable level of performance and that it made relatively few reversals from its original decisions. GAO found no evidence of performance problems in the case files for a majority of the 54 sample activities. For 11 activities, however, GAO found serious problems, such as defaults or terminations for unsatisfactory performance. All but one of these activities involved maintenance services. In general, the files provided evidence of GSA's efforts to oversee the activities and take appropriate corrective action, including deductions from payments to contractors, when necessary. Information on private sectors practices that GAO reviewed and that GSA gathered to support its reinvention efforts indicated that real estate organizations commonly used approaches such as performance measurement and benchmarking to manage and evaluate their operations and activities and decide whether to contract out. The approaches offer an opportunity for GSA to improve the oversight and evaluation of its services. Although GSA has begun to implement some performance measures, such as customer satisfaction surveys, the specific performance measures that it will use after its reorganization is completed are still being developed.

GAO found that: (1) cost, performance, and historical data showed that GSA decisions to retain property management services in-house or contract them out were sound; (2) in general, GSA retained and contracted-out activities at lower actual costs than estimated; (3) GSA continued to use the sector originally selected for about 72 percent of the sampled activities, since only 11 of the 54 activities had serious performance problems; (4) GSA experienced more frequent and serious performance problems with contracted maintenance activities than with other types of activities; (5) GSA oversight of the activities was generally sound and GSA took appropriate corrective actions when necessary; (6) although GSA contracting decisions appeared to be sound, GAO could not conclusively demonstrate that the selected alternatives generated the expected savings estimated; (7) private sector real estate management organizations commonly use such practices as performance measurement and benchmarking to manage and evaluate their operations and to decide whether to contract out certain services; (8) GSA could improve its oversight and evaluation of its services by adopting key private sector performance measures; and (9) GSA is still developing the specific performance measurements it will use after its reorganization.