Obama asks agencies to shed surplus property

Agencies will save taxpayers $3 billion by accelerating disposal of unneeded federal property, ending unnecessary lease agreements and consolidating duplicate assets such as data centers, President Obama said in a governmentwide memorandum on Thursday.

"For decades, the federal government, the largest property owner and energy user in the United States, has managed more real estate than necessary to effectively support its programs and missions," Obama wrote. "Both taxpayer dollars and energy resources are being wasted to maintain these excess assets."

The federal government has 14,000 excess buildings and structures and 55,000 that are under- or unutilized, Office of Management and Budget Director Peter R. Orszag said in a blog post Thursday.

The presidential directive instructs agencies to speed the process of eliminating surplus property and to do more with existing assets. Agencies should look at utilization and occupancy rates, annual operating cost, energy efficiency, and sustainability, the memo said.

For example, Obama mandated that agencies end cost-inefficient lease arrangements, identify offsetting reductions in inventory when new space is acquired, and increase occupancy rates "through innovative approaches to space management and alternative workplace arrangements, such as telework."

Agency efforts are expected to produce at least $3 billion in cost savings by the end of fiscal 2012, Obama said. In addition, the Defense Department is expected to save $5 billion by the end of fiscal 2012 from property disposal and consolidation through the base realignment and closure process, according to the memo.

"Past attempts at reducing the federal government's civilian real property assets produced small savings and had a minor impact on the condition and performance of mission-critical properties," the memo said. "These efforts were not sufficiently comprehensive in disposing of excess real estate and did not emphasize making more efficient use of existing assets."

Repeating a theme that Orszag stressed during a speech to the Center for American Progress on Tuesday, Obama asked agencies to merge data centers, office spaces, warehouses and laboratories. Since 1998, the federal government has gone from 432 data centers to more than 1,100, Orszag said Tuesday.

"The federal government experienced a substantial increase in the number of data centers, leading to increased energy consumption, real property expenditures, and operations and maintenance costs," Obama wrote in the memo.

Agencies will not be authorized to open any more data centers and must develop plans to consolidate and significantly reduce existing facilities within the next five years. Officials must submit their reduction plans to OMB by Aug. 30.

Orszag, General Services Administration chief Martha Johnson and the Federal Real Property Council will issue guidance within the next three months for implementing the memo.

The new cost-cutting effort comes only two days after the White House announced it would ask nonsecurity agencies to outline how they will reduce their budgets by 5 percent. Orszag said agencies would be instructed to make significant cuts to their worst performing programs.