Public-Private Partnerships

This testimony discusses the findings of GAO's recent report on public-private partnerships, which identified the key elements of partnerships between the federal government and the private sector that were formed to help the government acquire and operate federal real estate and facilities more efficiently and effectively. (See GAO/GGD-99-23, Feb. 1999.) GAO (1) briefly discusses some of the weaknesses that are forcing agencies to think strategically when managing buildings and facilities and (2) focuses on one response to these challenges--public private partnerships--and reviews the key elements and related experiences of the six federal partnerships examined in GAO's earlier report. In connection with this testimony, GAO also released a glossary of terms, practices, and techniques related to building and facility partnerships. (See GAO/GGD-99-71, page 55.)

GAO noted that: (1) government-owned real estate is under the custody and control of at least 30 federal agencies, although most is under the jurisdiction of 8 organizations; (2) GAO's work and that of others over the last several years has identified several important weaknesses in federal agencies' management and maintenance of facilities and real property; (3) the following are a few of the federal agencies' weaknesses in this area: (a) capital planning; (b) deferred maintenance; (c) underutilized and unneeded properties; and (d) lack of adequate data; (4) as federal agencies find themselves confronted with these and other problems in an environment simultaneously marked by budgetary constraints and demands to improve service, the importance of their making the most effective use of capital assets is especially great; (5) in order to do this, federally owned buildings and land need to be strategically acquired, managed, and disposed of so that the taxpayer's return on the investment is maximized; (6) to maximize returns on buildings and facilities, federal agencies are increasingly interested in managing them in a more businesslike manner; (7) partnerships between the federal government and the private sector through contracts or agreements is one of these approaches; (8) the 6 partnership projects GAO examined were located in 3 agencies: the National Park Service, the Department of Veterans Affairs, and the U.S. Postal Service; (9) although each of the 6 projects tailored its efforts to address its specific needs and environments, GAO found 5 common elements that appeared to play a key role in the implementation of the partnerships reviewed; (10) there was a catalyst for change that led each of the 3 agencies to form a partnership with the private sector; (11) Congress enacted legislation that provided a statutory basis for the agency to enter the partnership and keep the revenues it received from that partnership; (12) the agencies reviewed told GAO that they established organizational structures and acquired the necessary expertise to interact with private-sector partners to ensure effective partnership implementation; (13) asset management officials used business plans or similar documents to make informed decisions and protect the government's interests; and (14) support from project stakeholders was an important factor in developing and implementing the public-private partnerships.