|Program Title||General Services Administration - Real Property Leasing|
|Department Name||General Services Admin|
|Agency/Bureau Name||Real Property Activities|
Capital Assets and Service Acquisition Program
|Assessment Rating||Moderately Effective|
|Assessment Section Scores||
|Program Funding Level
|Year Began||Improvement Plan||Status||Comments|
|Year Began||Improvement Plan||Status||Comments|
Commissioning regular, independent reviews to assess the program performance and its effectiveness in achieving results
|Completed||Milestones: 1) Develop Statement of Work for independent review of leasing program performance. 1/15/06. 1/15/06.2) Award contract for independent review of leasing program. 5/15/06. 5/06. 3) Review results in implement changes/improvements if appropriate based on review. 10/1/06. 10/1/06. Report supports current initiatives that will enhance the leasing program. Findings indicate it is premature to determine whether desired outcomes will be achieved, initiatives implemented only recently.|
Exploring ways to improve relationships with customer agencies.
|Completed||MILESTONE: 1) Develop schedules in eLease to provide customer information for project milestones on specific leases for Census, FBI, and IRS. Completed: 3rd Qtr FY 2008.|
Studying Public Buildings Service fee structure and incorporating results with the FY 2008 rent estimate submission
|Completed||Milestones: 1) Submit findings and recommendations to OMB. 4/30/06. 7/06. PBS gained final approval from OMB for the reduction of the our leasing fees beginning in FY 2008 from 8 to 7 percent on cancelable and 6 to 5 on non-cancelable lease actions. PBS is working to restructure and introduce new efficiencies to our leasing program and we are thus able to financially demonstrate these improvements by lowering fees that we charge our customers agencies to administer leased space.|
Review lease acquisition delegation program, including internal guidance, agency consistency check and Office of Governmentwide Policy oversight role.
|Completed||Milestones: 1) Issue Realty Service Letter to provide regional guidance for FMR Bulletin. 1/15/06. 11/14/05. 2) Provide delegation authorizations to OGP for their review against lease actions. semi-annually. 4/19/06. 3) Advise OGP of acquisition plan to delegation discrepancies for their follow-up action. semi-annually. 4/19/06. OIG audit of the delegations program has been extended until February, 2007. GAO has also begun an audit of the program.|
Measure: Percent of vacant space in leased inventory
Explanation:This measure tracks the percentage of vacant space in the leased inventory
Measure: Percent of lease revenue available after administering the leased program.
Explanation:Manage the costs of administering leased space at no less than 0% and no more than 2% of the leased inventory revenue
Measure: Cost of leased space relative to industry market rates
Explanation:This measure compares GSA's success in leasing space to average lease rates in the commercial market.
Measure: Percent of customers who say they received their lease space when they needed it
Explanation:This measure tracks the percent of customers who say they received their lease space when they needed it
Measure: Satisfied tenant customer satisfaction rating (4 and 5 responses) in leased space surveyed
Explanation:Percent of tenants who respond on the satisfaction survey with 4's and 5's for services in leased space.
Measure: Percent of expiring leases using the National Broker Contracts (NBC).
Explanation:Percent of expiring lease actions using the NBC
Measure: Percent of existing lease inventory reviewed for beneficial opportunities
Explanation:Percent of leasesexpiring within three years with available market data reviewed for market opportunities.
|Section 1 - Program Purpose & Design|
Is the program purpose clear?
Explanation: 1.1 The purpose of PBS's space acquisition program is to achieve a real property lease program that consistently delivers a well-occupied portfolio of excellent, high value workspaces for customer agencies, when needed, and at rates that are below market, by leveraging in-house and commercial professional and technical resources. GSA translates a customer agency's workplace needs into discrete requirements, marshals the resources necessary to fulfill those requirements, and manage the execution of the project in the event that suitable space is not available in the PBS inventory. The Program's Value Proposition has a well defined and focused purpose that ties directly to the missions of GSA and PBS: "Drawing upon expertise in real estate, market knowledge, government acquisition policy and acquisition management skills, and working proactively with our customers to help develop their requirements, GSA can provide our customers with superior workplace solutions in an efficient, cost effective manner."
Evidence: Leasing property for Federal tenants is fundamental to GSA's mission statement: "We help federal agencies better serve the public by offering, at best value, superior workplaces..." (GSA's Strategic Plan). 40 U.S.C. 585(a)(1) gives the Administrator of GSA authority to enter into lease agreements for the accommodation of federal agencies and to assign and reassign the space; the Federal Property and Administrative Services Act of 1949 provides GSA's authorizing legislation and the Public Buildings Act of 1959 as amended provides for the construction, alteration, and acquisition of public buildings of the Federal Government, section 1, and special rules for leased buildings, section 20; GSA's FY 2006 Congressional Budget Justification provides an overview of the Leasing program's Strategic Direction and Assessment, page FBF-31; GSA's FY 2007 Strategic Assessment, April 2005, page 1 discusses the fundamental activities of PBS - to provide space acquisition services through leasing, construction or purchase and the Leasing program value proposition can be found on page 2.
Does the program address a specific and existing problem, interest, or need?
Explanation: 1.2 GSA provides space solutions in order to meet government agency space requirements through existing assets, new construction of federal buildings, U.S. Courthouses and Border Stations, and through the lease of commercially available space when necessary. The leasing program provides the government flexibility to meet client agency housing needs when Federally-owned space is not available and construction is not the best alternative, or where there is an immediate need or a short-term requirement for space. The leasing program allows PBS to react immediately to unanticipated growth (e.g., the creation of DHS and the addition of TSA or the decennial Census program, or downsizing due to changes in program and mission requirements; e.g., the proposed closing in the fall 2005 of 68 IRS Taxpayer Assistance Centers as announced 5/27/2005 and BRAC closings affecting leased space.
Evidence: At 166 million rentable square feet (February 15, 2005 R240 billing report), leases comprise 48% of GSA's total space inventory. The need for leased space to meet federal agency needs is projected to increase 9% from FY 2004 - FY 2006 (FY 2006 Congressional Budget Justification, page FBF-42). The lease program provides the flexibility to react quickly to immediate agency requirements to increase or give up lease space, such as the FY 2003 award of over 500 leases for TSA at or near airports throughout the country, the reorganization and consolidation of 22 legacy organizations into the Department of Homeland Security (DHS) which requires the reorganization and co-locating of space to accommodate agency/bureau missions, and the IRS plan to close 68 Taxpayer Assistance Centers, IR-2005-63, May 27, 2005.
Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?
Explanation: 1.3 40 U.S.C. 585(a)(1) authorizes the Administrator of GSA to enter into lease agreements to accommodate Federal agencies. The GSA space acquisition by lease program, grounded in Federal procurement law, has uniformity and procedural controls equivalent to private leasing programs. Since GAO's 1995 Report, GSA's Lease Program has developed a businesslike approach modeled on private industry. The program is accountable for achieving goals and meets the space and cost considerations of their customers. Over 25 Federal agencies have real property lease authority, including DoD, Transportation, and Agriculture. While other agencies have leasing authority, they may be for a different purpose than GSA leasing authority (i.e., not for general office space). GSA is the only agency with leasing authority for the purpose of assigning that space to meet the workplace needs of other agencies. GSA also delegates this authority to those agencies with leasing programs for projects under prospectus level (i.e., projects not requiring Congressional authority). These federal agencies can manage their own leasing programs or hire brokers. Many brokerage firms are targeting federal agencies and provide direct competition to GSA.
Evidence: Although some 25 Federal agencies have independent or delegated leasing authority, GSA's lease activity accounts for approximately 84.6% of the government's total leased general purpose/office space, followed by Agriculture 7.2%, USPS 2.3%, Interior 1.2% and all other agencies 4.3%. Agencies with independent leasing authority may come to GSA as their provider of choice for office space. For example, Army, Air Force, Navy and Corps of Engineers, using independent leasing authority, together lease 31.6 million sq. ft. of space and own and manage over 132 million sq. ft. of office space. However, these agencies come to GSA to provide their leased office space workplace solutions 85% of the time as reflected in the Federal Real Property Profile, September 30, 2003, page 9.
Is the program design free of major flaws that would limit the program's effectiveness or efficiency?
Explanation: 1.4 GSA uses commercially available databases, private sector best practices and performance measures to support leasing decisions and promote program efficiency and effectiveness. GSA contracts with private sector vendors for market analysis and surveys, A/E surveys, and lease acquisition and use national codes as a guide for complying with accident/fire-safety/handicap criteria. New initiatives that work together to promote program effectiveness and efficiency, provide national consistency, and allow GSA to capture the corporate knowledge, include the National Broker Contract (NBC), which resolves issues with regional contracts and provides consistency in terms and conditions, pricing and contract administration; the Transaction Management Playbook (TMP), which allows GSA to address the five key interactions of successful project delivery; and eLease, which provides a template for consistent documentation in lease files and the ability to continue business operations in the event of a local or national disaster, as well as supporting the President's Management Agenda (PMA) for expanding electronic government.
Evidence: As a result of a 1995 GAO report, "More Businesslike Leasing Approach.....", GSA began the move from a highly prescriptive and process-oriented leasing approach (pages 18 - 21), to a customer centric results-oriented leasing approach. Procedures for small leases were streamlined, regional broker contracts awarded and the Provider of Choice delegation program instituted. In 2002, GAO identified problems with the regional broker contracts that resulted in the FY05 award of 4 National Broker Contracts to provide national contract leverage and consistent application of lease terms and conditions - all at no cost to GSA. The NBC, TMP, and eLease work together to enhance and support GSA's transition to a more flexible and results-oriented organization. The eLease platform automatically populates all standard forms, streamlining, automating and standardizing the lease management process while saving time and reducing errors and inconsistencies.
Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?
Explanation: GSA's leasing program provides space acquisition services to Federal agencies who do not possess authority to own or lease space. GSA is also the office space provider of choice 85% of the time for agencies with independent leasing authority. National Account Managers use their knowledge of client agency requirements, market conditions and the Asset Business Plans for all assets under the custody and control of GSA to provide efficient use of the federal owned inventory and leased space. By understanding multiple agency needs GSA is often able to consolidate several agencies into a single facility, conserving taxpayer dollars and allowing GSA to provide the appropriate federal space (owned or leased) to meet the customer's needs. GSA expanded Asset Business Planning (ABP) to include Leased Business Planning in compliance with EO 13327 in Federal Real Property Asset Management (RPAM). Lease Business Planning targets leases with major deviations in vacancy, revenue or expense for analysis to identify causes and provide correction strategies.
Evidence: Executive Order 13327 established the Federal Real Property Council (FRPC), directing all agencies to develop and implement asset management plans for all federal assets. GSA's FY 2006 Congressional Budget Justification sets forth Capital Investment and Leasing Program (CILP) funding requests to meet agencies' space requirements and to authorize funds for leases, pages 30 - 42. 40 U.S.C. 585 (c) authorizes the Administrator of GSA to lease properties for assignment to federal agencies. The table on page 9 in the Federal Real Property Profile reflects leased office space. GSA provides over 85% of federal agency leased office space. ABP's outline a strategy for each federal owned or leased asset that ensures that Federal Buildings Fund dollars are appropriately directed to assets that will remain under the custody and control of GSA.
|Section 1 - Program Purpose & Design||Score||90%|
|Section 2 - Strategic Planning|
Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?
Explanation: GSA has two long-term performance measures focused on results and accountability and ensuring efficiency and effectiveness of the leasing program. These measures were approved by OMB for the PBS FY2007 Strategy and Action Plan (SAP).
Evidence: The FY 2007 Strategy and Action Plan (SAP) for PBS outlines two long-term performance measures, approved by OMB, that will help PBS achieve its overall mission of "delivering a superior workplace to the Federal worker and at the same time superior value to the American taxpayer." The two goals, located on page 1 of the SAP, are: New Leases: By 2010, the leasing program will deliver new lease requirements at least 9.5% below the industry average cost for office space, deliver the space when the customer needs it 90% of the time or better and utilize the NBC for expiring leases 90% of the time. Existing leases: By 2010, the existing leasing program will receive satisfied (4's & 5's), tenant customer satisfaction scores 80% of the time and will incorporate the results of RPAM's annual review of existing leases (where market data is available) into customer strategic planning.
Does the program have ambitious targets and timeframes for its long-term measures?
Explanation: PBS has developed specific quantifiable targets relative to its long-term performance measures with ambitious targets and timeframes to promote continual improvement. According to the Gallup Organization, GSA's customer satisfaction goal of 80% (4's & 5's on the Likert scale) exceeds private sector benchmarks. The target for delivering space when the customer needs it was increased to 90% by FY 2010 (from a FY 2003 baseline of 73%), which is in line with new construction delivery targets. Ambitious targets have been set for NBC utilization and existing lease portfolio review, new measures for FY 2005 and FY 2006.
Evidence: The targets and timeframes are listed in the FY 2007 Performance Plan Goals and Measures Matrix. The targets include: 1) Deliver new lease requirements at 9.5% below industry average by 2010; 2) Deliver space when the customer needs it 90% of the time by 2010; 3) Utilize the NBC for 90% of expiring lease actions 90% of the time by 2010; 4) Achieve a satisfied customer satisfaction rating (4's & 5's), 80% of the time by 2010; and 5) Incorporate annual review of 100% existing leases into customer strategic planning by 2010.
Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?
Explanation: GSA uses several annual performance measures, linked to its strategic goals and program purpose, to measure its success in managing the leasing program. The targets were developed to ensure that PBS will achieve its long-term goals by 2010. In many cases the annual performance measures are directly tied to the long-term goals.
Evidence: GSA's annual performance measures for the leasing program as outlined in PBS's FY 2007 Strategy and Action Plan, page 1 and PBS's FY 2007 Performance Plan Goals and Measures include: the cost of leasing space compared to the commercial market; tenant satisfaction in leased buildings; the timeliness of delivering leased space; utilization of the NBC; the percent of vacant space in the leased inventory; percent of leased revenue available after administering the leased program.
Does the program have baselines and ambitious targets for its annual measures?
Explanation: GSA has established baselines and specific quantified annual targets for its annual measures. Quarterly, actual results are compared against targets to ensure continued improvement. Targets are set and recalibrated periodically to offer balance between ensuring continued improvement and movement toward long-term outcome goals to motivate the program to stretch and achieve efficiencies - a reasonableness test. The annual goals were developed to follow standard real estate industry practices and in many cases have been vetted with the private sector to ensure they are stretch goals. When the measures have been met or exceeded for multiple measurement periods, the measures are rebaselined and targets are strengthened as in schedule and tenant satisfaction. Five out of the seven annual measures for the Leasing program have baselines and measurable targets, with specific quantifiable targets and timeframes to promote continual improvement relative to the program's long-term performance measures.
Evidence: The tenant satisfaction survey was rebaselined to include only scores of 4's and 5's (from 3's, 4's, and 5's) with annual increases that exceed private sector targets (Gallup Organization). The long-term goal for space delivered when needed was increased from the FY 2003 baseline of 73% to 90% of the time by 2010 with ambitious annual increases. The Leasing Program will monitor vacant space to see if agency budget pressures and the return of space by the IRS and DHS negatively affect the annual target of 1.5% (nationwide private-sector vacancy was 14% in 2004 and in International Facility Management Association (IFMA) user group discussions America Online indicates their vacant space target is 10%). The FY 2004 PAR, pages 45-46 outlines PBS performance on key measures and the FY 2007 SAP, page 1 shows the approved measures and targets for FY 2006. The new measures established for FY 2005 - the NBC, and FY 2006 - existing lease review and follow-up, have ambitious annual target increases through 2010 as shown in the FY 2007 Performance Plan Goals and Measures matrix.
Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?
Explanation: GSA awarded four National Broker Contracts, partnering with commercial real estate companies to provide space procurement services to their customers. Both GSA and the contractors are held accountable for the same performance goals, standards and targets, assuring that all partners fully support and are committed to the achievement of both the annual and long-term program goals. Commission credits were negotiated with GSA's broker partners that will result in lower rent to customer agencies and the taxpayer. GSA's Associate Performance Plan and Appraisal System (APPAS) holds all associates accountable to meet the mission and goals of GSA, PBS and the PMA through establishing and tracking critical elements that are based on program goals and measures. GSA entered into a Strategic Real Estate Expense Management Strategy Charter with the IRS in October 2004 in response to agency budget concerns to provide the IRS with quarterly performance reports and to partner in the management of IRS real estate activities.
Evidence: Beginning FY 2005 Q3, completed NBC lease transactions will be assessed against GSA annual and long-term goals of the program. The contracts incorporate performance standards for space quality and lease rates, schedule, customer satisfaction and small business subcontracting goals. eLease rates the broker performance at 17 milestones in the leasing process. GSA order CPO P9430.1 established APPAS, providing a systematic approach to setting and tracking individual performance goals through critical elements that support the Performance Management Process (PMP) and Quarterly Performance Measurement. The senior manager is held accountable for supporting GSA goals and mission through APPAS critical elements, including a 20% link to PBS performance goals and associate APPAS ties performance to GSA, PBS and regional goals (see examples). The September 2004 charter between GSA and the IRS formed a partnership to develop strategies that meet both agencies' goals.
Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?
Explanation: PBS has annual financial and operating audits which include review of Lease Program operations. The General Accountability Office has also conducted a number of evaluations of aspects of PBS's Lease Program. The Data Accuracy measure is conducted by independent contractors and recommendations are used to improve process and guide program improvements.
Evidence: As a result of the IG Report "Cost for Leased Space Relative to Market (Weighted Average for Four Categories)", March 4, 2004, PBS has implemented new controls in the lease assessment process for control and clarity, as set forth in the Lease Cost Relative to Market Description and Method, December 16, 2004.
Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?
Explanation: GSA's Fiscal Year 2006 Congressional Budget Justification provided an integrated performance budget, aligning resources with long-term performance goals. The budget request was developed through GSA's Performance Management Process (PMP) for strategic planning, budgeting and program evaluation.
Evidence: The FY 2006 Congressional Budget Justification for PBS displays the distribution of indirect costs to the program areas (FBF-5) and outlines the linkage between the budget request and the long-term outcome goals by tying specific dollar amounts to the level of performance that will be achieved in the various measures (FBF 24-31). The FY 2007 Strategy and Action Plan (SAP), page 1 and related Strategy and Action Plan Initiatives (SAPI's) for Account Management Strategies, Customer Relationship Management, eLease and Demand Planning support additional resource needs that have been identified that will be incorporated into the FY 2007 budget request.
Has the program taken meaningful steps to correct its strategic planning deficiencies?
Explanation: The Office of National Customer Services Management (ONCSM) Lease Policy Division (formerly the National Office of Realty Services), promotes and supports national coherence through guidance for leasing transactions. GSA's PMP incorporates strategic planning into a continuous cycle to aid decision-making regarding strategic plans, budget priorities, and performance results. New long-term goals, customer business plans and demand forecasting methodologies are being put in place to support a strategic approach to customer planning to enable ONCSM to incorporate into customer strategic planning anticipated changes in leasing demand and market conditions. The NBC supports strategic planning by taking the specialist from transactional duties to management and planning (results oriented strategic project managers of lease transactions). The partnership with commercial real estate brokers will enhance regional workload capability, addressing the increased capacity needs of the leasing program and allowing GSA to pass on private sector advantages in costing and service to GSA's customers.
Evidence: The NBC forges a partnership between PBS and commercial brokers that increases PBS's workload capacity. Demand Planning methodologies will provide account managers with the information required to advise customer agencies when there are opportunities related to lease demand and anticipated market conditions. OMB approved two long-term goals which are outlined on page 2 of the FY 2007 SAP: By FY 2010 the leasing program will deliver new lease requirements at least 9.5% below the industry average cost for office space, deliver the space when the customer needs it 90% of the time or better and use the NBC for expiring leases 90% of the time; and by 2010 the existing leasing program will receive satisfied tenant customer satisfaction scores (4's & 5's) 80% of the time and incorporate the results of RPAM's annual review of existing leases (where market data is available) into strategic customer planning. For FY 2005 this would compare to over 3,000 leases covering 64% of GSA's rentable square feet.
Has the agency/program conducted a recent, meaningful, credible analysis of alternatives that includes trade-offs between cost, schedule, risk, and performance goals, and used the results to guide the resulting activity?
Explanation: When there is a long-term need to house agencies in a given location, alternatives and trade-offs are conducted at the project level by comparing the cost of leasing to purchase/construction. (Working with OMB, GSA developed this cost-benefit model over 15 years ago.) After a determination is made to pursue a leasing alternative, GSA compares proposed rental rates to comparable private sector leases to ensure the rates are within current industry standards. In addition, the no-cost National Broker Contracts exemplify implementation of alternatives to enhance the workforce capacity, pass on private sector contact and resulting economies of scale and commission credits against RENT to the customer agencies.
Evidence: GSA's CILP projects are evaluated using TAPS (The Automated Prospectus System) analysis that considers alternatively the costs of construction vs leasing which was developed in conjunction with OMB and all leases are scored by the GSA scoring model for leases. The Society of Industrial & Office Realtors (SIOR) database is used to compare lease rates for building class (Class A or B) and location (Inside or outside Central Business Area). When SIOR data is not available for a location, alternate industry sources, including CoStar, LoopNet, etc. are used. NBC provides tradeoffs between, cost, schedule, risk and performance goals.
|Section 2 - Strategic Planning||Score||89%|
|Section 3 - Program Management|
Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?
Explanation: GSA's senior management meets quarterly to review performance and financial data and take appropriate action to improve performance. The Society of Industrial and Office Realtors (SIOR) data is used to compare GSA's lease costs to market costs and Torto Wheaton Research market forecasts are used to develop strategic plans for future lease requirements as well as developing strategy for expiring leases. GSA's Performance Measurement Tool (PMT) also tracks performance data on a regular basis. Customer and key program partner panels were held at the National Realty Services Conference in April, 2005. PBS had a customer panel representing the facility heads of IRS, FBI and Customs and Border Patrol to discuss their current and future needs and requirements and representatives from Torto Wheaton Research (TWR) and Corporate Portfolio Analytics formed a panel with PBS senior management to discuss market forecasts. The Office of Applied Science collects Best Practices from the private sector to provide support for GSA's Leasing Program.
Evidence: GSA benchmarks lease rates to the private sector using SIOR, CoStar and other published market data and benchmarks customer satisfaction to the private sector using Gallup Organization data. LMI has confirmed that GSA's metrics are comparable to widely used private sector measures. The FY 2005 Q2 PMT review for lease cost generated a review of the benchmark data for a region that was not achieving the target. As a result of the review, the benchmarks are being further delineated to reflect sub-markets that appropriately reflect the cost effectiveness of the awarded leases. The agenda for Realty Services Conference shows Customer and Key Partner panels presentation of facility heads of IRS, FBI and Customs and Border Patrol at the April, 2005 National Realty Services Conference, Denver, CO.
Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?
Explanation: GSA's "Linking Budget to Performance Program" (LB2P), provides incentives for regions to meet or exceed performance targets and holds managers accountable for program goals and measures. Performance-based contract clauses in the NBC ensure the contractor partners are held accountable for performance which will be enforced through a detailed contract administration process that forms the basis for receiving additional task orders or exercising contract option periods. Formal quarterly and annual performance board reviews will provide prompt communication of program results and broker transactions will also be assessed with the same performance measures used for PBS, e.g. lease cost, schedule and customer satisfaction. Federal managers and associates are held accountable for achieving the performance goals of the program through APPAS, the Associate Performance Plan and Appraisal System. APPAS measures associate performance and ensures accountability for contributing to the success of the mission and goals of GSA, PBS and the regions.
Evidence: PBS's FY 2004 LB2P Guidance provides the targets and rewards for meeting the performance goals. Section 2.5 of the NBC performance-based service provider contract states that "failure to keep appropriate parties apprised of project status in a timely manner, failure to meet required delivery dates or to meet milestones which endanger performance of a task order may result in termination of a task order for default in accordance with the default clause of the contract or by other remedies available to the Government". The example APPAS for the Lease Program Assistant Commissioner and a regional realty project manager reflect GSA's commitment to support program goals through applying critical elements to associate performance.
Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?
Explanation: Funds for the leasing program are obligated consistently with the overall program plan and within established time frames. Over the past four years GSA has obligated, on average, 97.4% of its planned rental of space funds each year. As of May 2005, GSA is projecting that it will obligate 99.1% of its planned fiscal year 2005 rental of space funds. Controls and procedures are in place through statutory restrictions on transfers and through monthly financial reporting to ensure that funds are spent for the intended purpose and in a timely fashion.
Evidence: End of Year Financial Reports for FY 2001-2004 show that on average, 97.4% of planned obligations were made. The Administrator's Monthly Rental of Space Financial Report for May 2005 shows the projection that PBS is on track to obligate 99.1% of planned fiscal year 2005 rental of space obligations. GSA General Provisions section 403 of the Consolidated Appropriations Act, 2005 (P.L. 108-447) specifically restricts PBS's ability to transfer funds between activities without advance approval from the Committees on Appropriations.
Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?
Explanation: LB2P provides financial incentives to regions to meet PBS performance goals. Operationally, four competitively sourced "no-cost" National Broker Contracts were awarded that provide for broker commission credits to RENT. PBS uses private sector benchmarks to measure program effectiveness and efficiency, e.g., securing new lease requirements below average market rates, percent of vacant space, timeliness of lease delivery and levels of customer satisfaction. The percent of leased revenue available after administering the leased program and percent of vacant space measures provide an efficiency check for the leased inventory and in FY 2006 RPAM begins reviewing the lease inventory for beneficial market conditions for account managers to use to extend or renegotiate leases based on anticipated market conditions and customer space requirements. e-Lease provides a standard, national platform for consistent recording of data and delivery of leasing services. PBS implemented a Human Capital Asset Management strategy to reengineer business processes, improving organization efficiencies, including the Transaction Management Playbook.
Evidence: The LB2P program awarded $53 million in FY 2004 to regions that achieved performance goals. Four competitively sourced performance based no-cost NBC contracts that will benefit GSA's customers from broker commission credits to RENT were awarded in FY 2005 that will be evaluated on quality, cost control, timeliness of performance, business relations, subcontractor plans and customer satisfaction. The e-lease broker-tracking module and scanning solution module is an IT tool to provide national consistency and coherence in lease transactions and administration with full release of version 1.0 scheduled by the end of FY 2005. GSA's Competitive Sourcing Team develops the GSA FAIR Act inventory annually to identify which activities may be commercial in nature and provide program efficiencies and cost savings.
Does the program collaborate and coordinate effectively with related programs?
Explanation: The leasing business line collaborates with other programs within GSA to ensure the effective management of the program's inventory. Customer account managers work closely with asset management and construction to find alternative housing solutions when a government owned solution is not the most effective way to meet the customers' space needs. GSA works with customer agencies to identify housing and budgetary requirements and has worked collectively with DHS and the Interagency Security Committee (ISC) to establish security requirements for leased buildings to ensure the safety of Federal workers, the public and GSA's leased buildings. GSA works closely with state and local governments to designate the appropriate delineated areas in accordance with the government's location policy.
Evidence: The FY 2005 Capital Investment and Leasing Program provides for the design, construction or site acquisition of 18 new projects, the repair, alteration or modernization of 31 projects and 12 capital lease projects which are analyzed by TAPS (The Automated Prospectus System), a present value model developed by GSA that analyzes and compares project alternatives of new construction, repair and alteration, lease and lease with option to purchase. Executive Order 12072 and the Rural Development Act of 1972 require GSA to consider the Central Business Area for federal leases and provide opportunities in rural areas and the Lease File Checklist, Tab 1, Sections D-E reflect GSA's communication with local municipalities. During FY 2006, PBS will be linked to the GSA Enterprise CRM system that will facilitate joint strategic customer business planning of GSA services, allowing GSA to present a unified face to the customers.
Does the program use strong financial management practices?
Explanation: GSA has had clean audit opinions for the past 17 years and no material weaknesses have been identified in the leasing program. In addition, GSA's financial systems meet statutory requirements and are integrated with its performance system. Procedures are in place to minimize erroneous payments and provide financial information accurately and timely. GSA's Performance Management Process (PMP) is an ongoing process intended to facilitate sound business and financial practices, providing a documented, detailed strategy and action plan indicating what must be done, by whom, and by when.
Evidence: GSA received a clean audit opinion for FY 2004 from PriceWaterhouseCoopers (PWC). As shown on page 84 of GSA's FY 2004 Performance and Accountability Report (PAR) "In our opinion, the financial statements referred to above, present fairly, in all material respects, the financial position of GSA, the FBF, the GSF, and the ITF at September 30, 2003 and 2004, and their net cost of operations, changes in net position, budgetary resources and financing for the years then ended in conformity with accounting principles generally accepted in the United States of America." The PMT measures performance by comparing actual results to targets and regular performance reviews during the year provide useful guideposts to know where corrective action may be required in order to achieve cost, schedule and satisfaction goals which impact RENT.
Has the program taken meaningful steps to address its management deficiencies?
Explanation: PBS's Peer Review process ensures that regional programs are consistent with national initiatives and current policies. The PMT tracks performance data that is used by PBS National Office and Regional senior management who meet quarterly to discuss performance issues, and develop corrective action plans. Controls built into eLease and the NBC provide national consistency in the management of lease acquisition services. National office was restructured along fundamental activities and regional offices are in the process of making functional and workforce realignments to provide for more consistent work processes. The Human Capital Asset Management (HCAM) initiative developed a series of assessments to establish associate skill levels, identify skill gaps and incorporate into improvement plans. The TMP, a PBS HCAM initiative, provides associates with a coherent and consistent guide for critical customer interactions. Occupancy Agreement (OA) billing supports PBS's commitment to provide accurate rent bills to customers.
Evidence: The Office of Realty Services established the Peer Review process and guidance in FY 2002 as a result of PWC's review of PBS lease files in accordance with the General Services Acquisition Manual (GSAM), that found discrepancies in lease file documentation. Beginning in FY 2005 Peer Reviews will incorporate NBC task order review and deliverables training. The Administrator's quarterly PMT meetings allow management to track the progress of PBS's performance goals and discuss areas of concern and the PBS senior management quarterly meetings provide a forum for discussion and the continued implementation of PBS's Human Capital Asset Management initiatives that have resulted from these meetings. The program office holds monthly conference calls for Realty Service Officers and Account Managers to discuss program issues in detail and develop a course of corrective action to address those issues (see sample agendas). OA billing for rent bills began in April 2005.
Is the program managed by maintaining clearly defined deliverables, capability/performance characteristics, and appropriate, credible cost and schedule goals?
Explanation: GSA uses a standard Solicitation For Offer (SFO) for leases that includes the review of past contractor performance, specified time frames for space delivery, and an analysis of offers to ensure that the contract rental rate is competitive with private sector benchmarks. The Tenant Improvement (TI) allowance is calculated by multiplying the local construction index by the square footage of the leased premises. Cost and schedule goals are tracked through the 'lease cost' and 'delivery of space when needed' performance measures. e-lease tracks broker performance for cost and schedule performance through 17 milestones of the leasing process and commercial brokers' future business will be tied directly to their performance. In addition, the negotiated broker commission credits will reduce the rent customer agency pays while the "No Cost" type contract structure affords PBS the opportunity to acquire the services of quality real estate firms at no direct cost to the government. GSA's APPAS evaluation system rates associates on critical elements related to program deliverables and schedule.
Evidence: GSA's SFO template defines quality of space and TI, such as type of carpeting, window treatments and permanent partitions and includes language to establish milestones for space delivery, including project design, construction completion, and occupancy. The Construction Cost Review Guide, a private-sector benchmark, is used to benchmark TI rates. Using real estate rental rate data from SIOR and other industry sources, GSA has confirmed that its rates are below industry averages as reflected in the lease cost measure. e-Lease provides for clear deliverables, scheduling, and reporting for each phase of the lease transaction process and all broker assisted transactions are tracked through each of 17 milestones for cost and schedule per the attached slides. The sample Realty Project Associate APPAS critical elements and the Assistant Commissioner for Lease Program APPAS are related to program goals and objectives, including cost, schedule and problem solving.
|Section 3 - Program Management||Score||100%|
|Section 4 - Program Results/Accountability|
Has the program demonstrated adequate progress in achieving its long-term performance goals?
Explanation: OMB has approved PBS's program-specific, long-term outcome goals and measures. PBS has made significant progress and is on track to meet all long-term performance goals which include clearly defined, long-term price, schedule and NBC utilization goals for new leases (the performance goal for space delivered on time was increased to allow for continued improvement based on actual results and NBC task orders were identified for 50% of expiring leases in FY 2005, which will be increased by 10% each year until reaching 90% in 2010), and for existing leases PBS will continue to increase the target for customer satisfaction scores in leased space each year and incorporate RPAM's review of the lease portfolio against TWR anticipated market conditions into customer business plans up to 2010.
Evidence: The PBS 2003 PART remediation plan required PBS to develop long-term performance goals, which were approved by OMB in May 2005, SAP, page 2. To provide stretch goals, space delivered when needed target has been increased from the FY 2003 baseline of 73% to 90% by 2010 and tenant customer satisfaction in existing lease space was recalibrated to include only 4's and 5's on the Likert scale (from 3's, 4's and 5's). Performance results are documented in the FY 2004 Performance and Accountability Report (PAR), the FY 2005 Q2 Performance Management Tool and the FY 2006 Congressional Budget Justification. Utilization of the NBC will be tracked beginning in the 3rd quarter FY 2005 and the existing lease portfolio review will begin in FY 2006.
Does the program (including program partners) achieve its annual performance goals?
Explanation: GSA achieved its targets for the 5 annual goals linked to the long-term goals for 2010 that were active performance measures in FY 2004. The FY 2007 Lease Acquisition SAP incorporates new annual goals for NBC utilization (beginning Q3 FY 2005) RPAM's annual lease review against TWR anticipated market conditions that will be incorporated into customer business planning (beginning FY 2006). The commercial broker partners' continued business from the NBC is dependent on achieving specific performance and schedule goals.
Evidence: Quarterly results for the 5 annual goals and results that PBS met in FY 2004 - lease cost, timeliness of space delivery, percent of vacant space, percent of leased revenue available after administering the leased program and tenant satisfaction - are available to all associates through a web-based user interface called the Performance Management Tool (PMT) that is part of the ongoing Performance Management Process. LB2P provides associates clear goals and objectives to measure program success as well as financial incentives for achieving targets. The FY 2004 PAR and FY 2006 Congressional Budget Justification report annual performance goals and achievements.
Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?
Explanation: PBS demonstrates efficiency and cost effectiveness by achieving program goals each year. For example, PBS has successfully secured leases at rental rates under market averages, delivered the space when the customer needs it and has maintained the percent of vacant space at or below the target of 1.5% for the past 2 years (down from 2.4% in FY 2000). Further, PBS has pursued cost savings via competitive sourcing of four "no-cost" National Broker Contracts with broker commission credits which will reduce up-front RENT and provide nationwide consistency and efficiencies through economies of scale. e-lease provides activity-based economies of scale by allowing critical data to be entered into the database once and automatically filling out all standard forms, saving time and reducing errors and inconsistencies, and calculates the present value analysis, ensuring that there is consistency in calculations. OA billing supports PBS's commitment to provide accurate rent bills to customers.
Evidence: GSA's Competitive Sourcing Team develops the GSA FAIR Act inventory annually to identify which activities performed by government personnel may be commercial in nature and provide cost savings to the government. Program efficiency is demonstrated by delivering space to customer agencies when they need it, maintaining vacant space significantly below other industry and government targets and managing the costs of administering leased space at no less than 0% and no more than 2% of leased inventory revenue. Through competitive sourcing, PBS has awarded four "No Cost" performance-based National Broker Contracts which will provide broker commission credits to RENT. Performance is benchmarked to the private sector to ensure that the program goals are competitive. In FY 2004 the private sector nationwide average for vacant space was almost 14%, "GSA State of the Portfolio", page 4.
Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?
Explanation: GSA's leasing program mirrors the critical steps outlined by the educational programs provided by the industry's leading associations and grantors of real estate certifications, including SIOR, the Institute of Real Estate Management (IREM), Building and Owners Management Association (BOMA), CoreNet Global and the IFMA. GSA employs a results-oriented businesslike approach to providing owned and leased workplace solutions to more than 100 Federal departments and agencies. PBS has a strong program for benchmarking the effectiveness of its leasing program against those of Commercial Real Estate (CRE) firms. CRE firms use metrics that focus on achieving targets, including square feet of vacant space, customer satisfaction and service quality, scored inspection results, timing and lease rate. PBS uses similar benchmarks - square feet of vacant space, customer satisfaction, percentage of leased space delivered when needed, and lease cost. GSA uses an asset management approach to managing its owned and leased inventory. However, GSA has not benchmarked the cost of running this program against these CRE's, thus it cannot completely compare its performance.
Evidence: GSA's leasing metrics are comparable to widely used private sector metrics, "CRE Leasing Performance Measures, LMI, 5/25/05". For instance, GSA leases space 8.25% below industry average rates and maintains vacant space at or below 1.5% of leased inventory, which is well below the private industry range of 10-15% vacancy from CoSTAR. The tenant satisfaction survey questions are used industry-wide and ratings are based on 4's and 5's as opposed to private sector 3/s, 4's and 5's. GSA intends to benchmarks the costs to complete its benchmarking process.
Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?
Explanation: Two IG reports identified concerns with the design and use of regional brokerage contracts and the controls over contracting and leasing documentation. Concerns were stated regarding internal task order controls, contract design and use of the regional brokerage contracts, including inadequate financial accountability, lack of procurement integrity, and the perception of fair and open competition. The regional contracts expired 12/31/04 and four competitively sourced National Broker Contracts were awarded effective 4/1/05. The National Broker Contracts are results-oriented, aligned with the leasing program goals and metrics and have specific performance-based contract requirements that must be met. The lease program is structured along industry guidelines and the metrics compare to industry benchmarks, indicating that the program is effective and achieving results.
Evidence: IG Report, "Review of PBS's Use of Brokerage Contracts for Lease Acquisition Services". FY2000 Interim and Year-End Management Letters (PriceWaterhouseCoopers LLP). PBS has undertaken initiatives such as performing a structured analysis of the leased inventory and regularly auditing leases, developing Asset Business Plans for Leases and evaluating leases that have a negative financial performance. LMI has reviewed the PBS lease program compared to private sector program practices at length and has identified industry best practices from educational textbooks that align with PBS's practices.
Were program goals achieved within budgeted costs and established schedules?
Explanation: GSA maintains rental space obligation plans that establish schedules for obligating budgeted rental costs. Over the past 4 years, GSA has obligated, on average, 97.4% of its planned rental of space funds each year. As of May 2005, GSA is projecting that it will obligate 99.1% of its projected fiscal year rental of space fund requirements. GSA remained within budgeted costs and established schedules while achieving its goals for acquiring lease space below industry average rates, maintaining customer satisfaction in leased buildings, delivering the space when the customer needs it. GSA provides customers with the option to return leased space upon 120 days notice. The program goal to maintain vacant space at or below 1.5% was maintained while maintaining the lease program administration breakeven goal.
Evidence: PBS's End of Year Financial Reports for fiscal years 2001- 2004 and the May 2005 Administrator's Rental of Space Financial Report show that GSA has made lease payments to lessors within budgeted costs, obligating, on average, 97.4% of its planned rental of space funds for 2000 - 2004 and projecting to obligate 99.1% of its fiscal 2005 rental of space funds. Lease administration has been accomplished within the program breakeven goal of between 0% and 2% of leased inventory revenue for FY 2002 - FY 2004. Pages 45-46 of the FY 2004 Performance and Accountability Report outline PBS performance on key measures related to customer satisfaction, cost and vacant space in support of GSA-Wide performance goals. The FY 2004 PMT and LB2P detail the success of PBS's performance measures.
|Section 4 - Program Results/Accountability||Score||72%|