Federal Real Estate: GSA Should Fully Evaluate Its Prospectus Process and Communicate Results to Its Authorization Committees

What the GAO found

The Public Buildings Act of 1959, as amended, requires the General Services Administration (GSA) to submit a proposal (prospectus) for capital and rental projects whose estimated cost exceeds a certain dollar threshold to two committees authorization from Congress. Under GSA guidelines, the 11 GSA regional offices develop prospectuses that describe projects. The GSA Central Office and the Office of Management and Budget each review the prospectuses before the GSA submits them to the Authorization Committees. The GSA obtains approval from these committees before committing the appropriate funds to the project.

General Services Administration (GSA) Prospectus Development and Approval Stages and Timelines, Fiscal Years 2014-2020

In general, for the financial years 2014 to 2020, the GSA took an average of 1 year to submit rental prospectuses and 9 months to submit investment project prospectuses to the authorization committees. Committees took an average of 8 months to approve leases and 14 months to approve capital projects. However, timelines vary and may be affected by the credit allocation process. The GSA is waiting for the president’s budget to be sent to Congress before submitting capital project prospectuses to committees. In 4 of the 7 fiscal years reviewed by GAO, the budget was submitted after February. In addition, committee approvals generally occurred after the adoption of annual appropriations.

The GSA has taken steps to assess certain aspects of the prospectus process. For example, the GSA evaluated its leasing process and found that it needed to submit prospectuses to committees earlier to reduce extensions to existing leases pending committee approvals. However, the GSA has not completed a full assessment of the prospectus process, including the process for capital projects. GSA officials said challenges related to the prospectus threshold, delayed approvals and limited funding contribute to the difficulties the GSA is having in managing its portfolio (e.g. dealing with repair and maintenance backlogs) . Although the GSA has identified potential changes that would require legislative action, it has not communicated its concerns or potential changes to the licensing committees. By fully evaluating the prospectus process and communicating with the authorization committees, the GSA can work with the committees to address the risks posed by the process, while ensuring that any changes do not impede the oversight activities of the committees.

Why GAO Did This Study

Each year, the GSA spends hundreds of millions of dollars in financing to build, repair and modify buildings in its portfolio and an additional $5.7 billion in rent for more than 8,000 leases of private space. The GSA’s prospectus process can pose challenges to its ability to effectively manage its assets.

The GAO was asked to review the GSA’s prospectus process. This report: (1) describes the GSA’s process for developing and obtaining prospectus approval; (2) determines average prospectus review and approval times; and (3) reviews the extent to which the GSA has evaluated the prospectus process to identify and address challenges, if any, that could affect the GSA’s management of federal assets. The GAO reviewed, among other things, relevant laws and regulations and GSA documents; analyzed the data of the prospectuses submitted for financing for the financial years 2014 to 2020; and interviewed GSA and OMB officials.