Washington, D.C. – U.S. Rep. Jeff Denham (R-CA) today received complete agreement from the Administration on each of the five principles behind his civilian BRAC proposal outlined at today’s Economic Development, Public Buildings and Emergency Management Subcommittee hearing. The Administration agreed to work with Chairman Denham and the Subcommittee to develop principles into bipartisan civilian BRAC commission legislation that will reduce our federal footprint and save billions of taxpayer dollars.

The key principles agreed to by the Administration include working to maximize return to the taxpayer, maximizing space utilization, reducing the reliance on costly leasing, creating value in underperforming assets and improving the overall management and controls related to federal properties. Daniel Werfel, Controller at the Office of Management and Budget, supported each of the goals introduced by Chairman Denham and added the importance of energy efficiency. He also agreed to Chairman Denham’s call for increased transparency in the process.

“Given our trillion dollar deficit and skyrocketing debt we must examine every area of government and look for ways to cut spending. I believe the potential to save billions of dollars is real,” said Denham. “I proposed a civilian BRAC commission at our subcommittee’s first hearing in February and the President proposed a commission in his 2012 budget. I am glad that the Office of Management and Budget agrees with my goals for a civilian BRAC commission and I look forward to working with the Administration to move a bill through Congress to save billions of taxpayer dollars.”

Chairman Denham’s Statement from Today’s Hearing
First let me welcome our distinguished witnesses and thank them for testifying today. We carefully selected each of you because of your past experience or current responsibilities for managing federal real estate on behalf of the American people.

Given our trillion dollar deficit and skyrocketing debt we must examine every area of government and look for ways to cut spending.

I first proposed a civilian BRAC commission at our subcommittee’s first hearing in February and the President proposed a commission in his 2012 budget. The purpose of today’s hearing is to find out if a civilian BRAC commission can save billions of taxpayer dollars by consolidating and realigning federal real estate.

In recent years, the GAO identified billions of dollars of waste through mismanagement, overbuilding, and an overreliance on costly leased space to meet long term housing needs.

In Chairman Mica’s report “Sitting on our Assets” we learned billions of dollars of taxpayer assets sit idle or even lose taxpayer money year after year.

And on a bipartisan basis this committee has struggled to house federal employees in the most cost-effective manner possible.

I believe the potential to save billions of dollars is real.

The question is: Can a civilian BRAC commission cut through the red tape and political turf battles to save taxpayer money? I think the answer is “yes” if we clearly define the goals of the commission. If we don’t, then we could actually make matters worse.

For example, if all the commission achieves is a fire sale of worthless properties in one of the worst real estate markets in our lifetime, then we shouldn’t expect to save a lot of money. Fortunately, the Administration recognizes this same problem. I am very pleased the President made federal real estate a national priority by including it in his state of the union address and his budget.

Given our discussions with OMB and GSA, I am hopeful we can agree on the goals for a commission and work together to move a bill through Congress.

To achieve $15 billion in savings I believe the commission will have to focus on a few goals or principles of reform. The commission will need to:

• Consolidate the footprint of federal real estate;
• House more federal employees in less overall space;
• Reduce our reliance on costly leased space;
• Sell or redevelop high value assets that are underutilized or too valuable for housing federal employees; and
• Dispose of surplus property more quickly.

I believe a commission that uses these five principles to guide its decisions can save the $15 billion we all believe is there.

I would like to elaborate on these principles so we can discuss them further during the question and answer period of the hearing.

At the end of the day, the total cost to house the federal government is directly proportional to how much real estate we hold. To save money we will have to consolidate that footprint.

To consolidate, we must house more federal employees in less space. Fortunately there are tremendous opportunities for savings in this area. For example, GSA has proposed to reconfigure its headquarters building and triple the number of employees working there from 2,000 to 6,000. This would allow GSA to vacate two buildings, one of which is leased, and house everyone in their renovated headquarters. The private sector has been increasing its utilization rates for over a decade and a commission can achieve the same results in the federal government.

Reducing expensive leased space is another principle necessary for a successful commission. For example, the federal government spent well over a billion dollars to lease space for the Department of Transportation’s headquarters. Yet the government could have purchased several buildings for this amount and housed thousands of employees for much less money.

Perhaps one of the greatest areas for taxpayer savings will be in the redevelopment or sale of high value but underutilized properties. In this example, the Postal Service used a private developer to transform a rundown money pit, with a great location, into $150 million in revenue and a fully renovated building without any taxpayer money. While the government retained ownership of this property, in other cases selling may generate the greatest savings for the taxpayer.

And finally, we have to dispose our surplus property more quickly.

I believe these guiding principles should help inform the development of any legislative solution, and I look forward to discussing them with our witnesses.

# # #