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Reason Foundation

Knowing What the Federal Government Owns

A how-to guide for managing federal property and assets

Anthony Randazzo and John Palatiello
June 29, 2010

How much land does the federal government own?

It seems like a basic question that would have a simple answer, but the federal government does not have the kind of basic property and asset data that a well-run business or responsible family relies on to manage its finances.

Some agencies do have good inventory systems—tracking acres of land under management, mineral resources, buildings, vehicles and office furniture—and others are in the process of developing them. However, there is no comprehensive, accurate federal inventory of real property, which is the land and everything on it, leading to frequent misuse and underutilization of land and assets.

Now in the midst of the economic crisis, the government is seeing the need to pursue efficient operations and learn about the full array of financial opportunities available. Not only has the financial crisis affected individuals, families and businesses, but the collective drop in economic activity has had a negative impact on tax receipts at all levels of government. The White House is projecting a $1.4 trillion federal budget deficit for 2009, with nearly $1 trillion in deficits a year for the next ten years. And the Congressional Budget Office is projecting that federal debt will exceed 82 percent of GDP by 2019.

Faced with this bleak economic future, the president and Congress will need to work hard to get government spending under control. One aspect of fiscal responsibility is efficient and effective management of federal property. President Barack Obama came into office in January 2009 committed to cutting waste in the government and promising a new era of transparency and efficiency. Since then, White House Chief Performance Officer Jeffrey D. Zients has been able to push through a handful of reforms, but none of them changing the inefficient way the government manages its real property.

However, in June 2010, the White House began to move on federal property efficiency. On June 10 the president signed a memo directing agencies to accelerate their efforts to divest excess and surplus property in an effort to achieve upwards of $8 billion in savings by fiscal year 2012. This presidential order also asks agencies to find ways to consolidate office space, reduce operating costs, eliminate wasteful lease arrangements, and use space management techniques more efficiently. This memo is a good step towards more efficient federal real property management. However, it is missing a serious component of any efficient real property management system: a dynamic, centralized asset inventory system.

Office of Management and Budget director Peter R. Orszag says the federal government owns “1.2 million buildings, structures, and land parcels” including “14,000 building [sic] and structures currently designated as excess and 55,000 identified as under- and not-utilized.”

This assessment, however, comes from an incomplete database built from inconsistent data managed mainly by the agencies themselves, each using its own inventory method, rather than an accurate, centralized inventory.

Very basic steps, like using GIS-imaging to map all federal property or requiring all agencies to use uniform methods when reporting the status of their real property, have not been pursued. These kinds of initiatives would greatly aid in establishing a real property inventory to cut government waste, manage property more efficiently, keep track of stimulus and TARP (Troubled Asset Relief Program) spending and examine financial sector systemic risk oversight.

One estimate suggests all surplus federal property could be sold for over $1.2 trillion—welcome dollars for a government desperately in need of shedding waste. Better still, selling unused property is only the beginning of fiscal and operational gains to be gleaned from developing a real property inventory.

There are many benefits and challenges to building an accurate and useful accounting of government’s inventory. This paper will look at both and draw on best practices from states that can offer solutions to the federal government in establishing a robust system for tracking and managing real property. The paper will also draw on expertise from the private sector in providing a step-by-step guide for officials wanting to pursue real property inventorying as a part of building a fiscally responsible government.


Anthony Randazzo is Director of Economic Research

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