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Thursday
Apr192012

Long Term Solutions to Federal Problems

Patriots Plaza in Washington, D.C.

On Tuesday, March 21, the House approved by a 403-0 vote a bill that, if passed by the Senate and signed into law, would encourage the expedited sell-off of unused U.S. Federal buildings.

You do not need to adjust your monitor--you read the previous sentence correctly-- members of the House of Representatives unanimously agreed on something! This was the second time in six weeks that the House passed a bill to streamline the process of selling unneeded federal property. The Excess Federal Building and Property Disposal Act of 2011 (H.R. 665) along with the Civilian Property Alignment Act (H.R. 1734), which passed 259-164, focus on selling unneeded property to produce immediate cost savings that would help offset the deficit.

Unfortunately the disposal of unneeded federal property will barely chip away at the iceberg of wastefulness that is the result of a lack of strategic planning. Congress will need to encourage activities that yield sale proceeds and avoid unnecessary spending.

Most federal agencies are facing unrelenting budget pressure to drastically cut costs and do more with less. Real estate and facilities groups are now tasked with not only meeting short-term housing needs, but also planning for future leasing and space requirements, while reducing their overall footprint and improving agency performance.

As my mother used to say “if you do what you’ve always done, you’ll get what you’ve always gotten,” and if the government ever hopes to realize any long term benefits from its efforts to trim the fat from the federal real estate portfolio, a drastically different approach moving forward is critical. But the path from here to there is not clear. Combine this with the fact that federal agencies are often forced to enact short-term solutions in order to comply with current budget restrictions, even when these stopgap solutions will only increase costs and keep workplace performance stagnant in the long-term, and true reform seems like a mirage.

But let’s pretend for a moment that the debt fairy has appeared and waved her magic wand and the criteria for agency decision making is now based on long term ROI and cost savings that can be measured in years and not months, and comprehensive strategic planning is rewarded above short-term cost reductions.

Try Before You Buy

Along with identifying consolidation opportunities that have the potential to create real estate savings, why not also try and identify workplace design solutions that help reduce an agency’s real estate footprint and catalyze improved performance? Living labs like the first phase of GSA’s 1800 F Street renovation provide real-time demonstration areas to pilot test and showcase advanced mobility strategies and drastically reduced utilization rates (UR). GSA’s Suite 7300 is home to approximately 170 people in 15,000 SF and includes a 52 percent reduction in usable space with its UR falling by 100 SF. It translates to $633,000 in annual savings, but the improvements require a significant up-front investment. One of our GSA clients on this project said “The biggest impediment to expanding the model of 1800 F is educating budget stakeholders how spending more now can translate to savings later.”

Pilot projects not only allow agency leadership to involve personnel early on in the process and increase the chance of getting buy-in from a greater number of participants, but help mitigate risk of failure from a new process by working out the kinks before implementing a major change agency-wide.

Portfolio Planning is about Strategy

Federal Times columnist Dan Ackerman said it best in his April 2011 article “Use portfolio management to help ease painful budget cuts”:

  • "When implemented as a core element of the budgeting process, portfolio management offers a comprehensive view into programs, processes and investments, extending value by implementing objective criteria to prioritize and select investments based on strategic alignment, value proposition, risk and compliance factors. Doing it correctly means that agencies are continuously adjusting and re-evaluating programs and investments throughout the investment life cycles, ensuring maximum return on each investment and eliminating redundant capabilities."

In other words, treating portfolio management as an integral and ongoing part of an overall strategy gives agencies the opportunity to maximize their ROI.

As Ackerman argues later in that same article, proper portfolio management requires constant attention and the ability to make adjustments on the fly. Treating it as a once-a-year budget endeavor oversimplifies the process and thus leads to oversimplified strategies that do not effectively utilize the government’s limited resources. Agencies need the proper tools to ensure they can meet their goals and move forward with spending and program cuts without interrupting workflow.

Unfortunately, the current political climate prioritizes quick-fix cost reductions that temporarily silence the partisan rhetoric surrounding the deficit. The case for comprehensive portfolio planning and strategic workplace improvements that realize long-term costs but require up-front investment falls upon deaf ears. The right path forward is long and challenging, but enormous rewards would await federal agencies, and more importantly taxpayers, if these long term solutions could be enacted.

Diana Apalategui is a Federal Government Marketing Manager in Gensler’s Washington, DC office. Her passion for solving puzzles and reading all of the fine print is put to good use as one of the leaders guiding the firm’s work with the federal government. She loves the challenge of adapting private sector best practices to help improve public sector performance and believes that innovative planning and design solutions have the power to transform lives (and save taxpayers money!) Contact her at Diana_Apalategui@gensler.com.

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