Federal Real Estate Post-COVID-19 Part One: A View from The Private Sector
2167 Rayburn House Office Building and online via videoconferencing
This is a hearing of the Subcommittee on Economic Development, Public Buildings, and Emergency Management.
Ms. Kay Sargent, Senior Principal, Director of WorkPlace, HOK, On behalf of the International Facility Management Association | Written Testimony
Ms. Genevieve Hanson, Principal, Strategy & Transactions - Real Estate Planning, Execution & Operations, Ernst & Young, LLP | Written Testimony
Ms. Kelly Bacon, Principal, Global Practice Lead, Workplace Advisory Design and Consulting Services, AECOM | Written Testimony
Ms. Marcy Owens Test, Senior Vice President, CBRE Federal Lessor Advisory Group | Written Testimony
Mr. Norman Dong, Managing Director, FD Stonewater | Written Testimony
Opening remarks, as prepared, of U.S. Rep. Michael Guest (R-MS):
Thank you, Chair Titus. I want to thank our witnesses for joining us today.
Prior to COVID-19, we made significant progress focusing on right-sizing federal office space. Through reductions and consolidations in space approved by the Committee in GSA’s prospectus process, we saved over $4 billion dollars. Through the bipartisan efforts of focusing on freezing and then reducing federal space, we are still seeing the savings produced by those efforts today.
As we saw before COVID, office space usage and design were already changing -- away from the need for individualized offices towards more open floor plans and shared spaces. These savings not only reduced costs for the taxpayer, but also freed up more resources for agencies to invest in their core missions. Since COVID, teleworking increased exponentially across government. Early on, we didn’t know how COVID would impact federal office space – would we need more space for social distancing? Less open space? More individual offices?
To the contrary, if private sector trends are any indication, we may expect higher levels of teleworking to continue and a further reduced need for space. What we have learned from the past year has caused many companies to more closely examine the money they are spending on physical space and making decisions on what space is actually needed to accomplish their work.
But, of course, as offices reopen, even the most robust teleworking environments would still require space for in-person collaboration and interactions. And, we know some agency missions may require very little teleworking. Ultimately, what we have learned is we don’t have to do things the same ways we’ve always done them before. By leveraging technology and focusing on what is actually needed in the built environment, we can save money, increase efficiency, and ensure space better supports agency missions.
As we examine the future of federal office space, it is important for us to consider private sector trends; whether those trends make sense in the federal real estate context; and what issues and questions we should be addressing or asking. We also must examine how we position GSA and other federal agencies to manage their real estate portfolios accordingly. We can talk all we want about what the real estate portfolio should look like, how it should be designed, and how much space is actually needed. But, without the right incentives and tools in the toolbox, little will happen.
For example, GSA should not be forced, because of scoring rules interpretation, to choose either traditional federal construction or operating leases. Public-Private Partnerships, discounted purchase options, and other solutions must be on the table. Decisions need to be made based on what makes sense for the agency mission and costs. That is why I am pleased to be a sponsor and cosponsor of bills, along with Subcommittee Ranking Member Webster and Representative Pence, that are designed to help give GSA more choices for P3s and negotiating discounted purchase options.
As we saw with the reducing-the-footprint initiative, it sometimes costs money to downsize. Space needs to be reconfigured; old space must be sold; and new, more efficient space needs to be acquired. Ensuring GSA has real choices is critical to finding significant savings in our real estate portfolio. I look forward to hearing from our private sector witnesses today on these issues.