A Peek Under the Hood of GSA’s FY13 Budget Proposal

On February 13th GSA submitted its FY 2013 Congressional Justification, an outline of GSA’s planned programs and budget.  At 243 pages it’s not an easy read, but there are some notable discoveries.  The following is our summary of some of the more interesting features of this year’s Congressional Justification.  Our focus, of course, is on programs centered primarily on the Public Buildings Service and not the other elements of the General Services Administration.

Leased Inventory Reduction:  GSA’s estimates are that its leased inventory will decline from 200.7 MSF to 199.4 MSF in FY 2013.  If this actually occurs it would be a rare event.  Despite this, GSA has forecast its budget line for Rental of Space to increase almost $340 million from the enacted FY 2012 figure to $5.55 billion in FY 2013.

Building Purchases:  GSA proposes to exercise purchase options totaling $56 million for two buildings it currently leases:  an IRS data center/office facility in Martinsburg, WV and an FDA lab in Riverdale, MD.  In both cases the justification is that the GSA views the properties as long-term assets yet expects rent to increase substantially upon the upcoming renewals.  It’s worth noting that the Martinsburg purchase has been submitted in GSA’s budget request each of the past two years as well, but never funded.

Portfolio Plans:  GSA is systematically implementing portfolio plans for its largest agency customers.  These plans are meant to establish “strategic portfolio requirements” and we can be sure there will be a heavy emphasis on cost reduction, including consolidation, telework and disposal of underutilized assets.  We can’t help but notice that the budget also includes a $16.1 million line item for  alterations to accommodate consolidations into federally-owned space.  Last year, GSA completed plans for the State Department, HHS and SSA.  GSA plans to complete three more plans each year through FY2014, for a total of 12 plans.

High Performance Green Buildings:  GSA is deadly serious in its efforts to lead government into green leasing and there are a host of objectives throughout the Congressional Justification referencing the legislation and executive orders that are driving this initiative.  Among them, is an increasing emphasis on tracking aggressive metrics toward achieving a “zero environmental footprint”.  This Congressional Justification hints casually at increased reporting requirements for greenhouse gas emissions and we know already that GSA recently began requiring private-sector landlords to report quarterly utility usage.

Delineated Areas:  This issue is perhaps a bit pedantic but we find it interesting.  GSA has proposed a change to its administrative provisions to no longer require it to ensure that the delineated search area in its lease procurements matches the search area in the congressionally approved prospectus.  This will give GSA considerable latitude to better adapt its procurements to rapidly changing policy requirements and market conditions.  Yet, there is also a greater likelihood that GSA can game procurements with delineated areas that look like a Chicago ward map.