Public Buildings Service

Commissioner
Robert A. Peck

Deputy Commissioner
Paul Chistolini
Chief of Staff
Anthony Costa
Assistant Commissioners
· Frederick T. Alt
Financial and Information Systems
· Michael Vaughn (Acting)
Portfolio Management
· Clarence Edwards
Federal Protective Service
· Anthony Artigliere (Acting)
Business Performance
· Joel Odum
External Affairs
· Sharon Roach
Strategic Innovations
· Brian K. Polly
Property Disposal
· John A. Petkewich
Centers of Expertise
Employees: 7,414
Funding:
· $4.8 billion - Federal Buildings Fund (Direct)
· $0.6 billion - Federal Buildings Fund (Reimbursable)
Other Funding: $0.4 billion - Appropriated

The Public Buildings Service (PBS) provides real estate and related services for more than 100 Federal organizations. It develops, constructs, leases, manages and maintains other facilities such as Federal courthouses, border stations, laboratories and data processing centers. It disposes of surplus Government properties.

PBS provides 39% of all Federal office space, in Government-owned buildings and in space leased from the private sector. It oversees 257 million square feet of office space, providing centralized management and procurement services, and quality work environments.

PBS manages space in approximately 8,300 buildings: 1,900 are Government-owned and 6,400 leased from the private sector. Nationwide, PBS has 198 buildings listed on the National Register of Historic Places; more than 300 others are likely to be eligible for the National Register based on their age, building type, architectural style, or involvement in culturally significant events. PBS customers include all Federal Departments, independent agencies and commissions, the Judiciary and Members of Congress. In FY 1997, 92% of PBS program dollars flowed through contracts to the private sector.

The financing mechanism for PBS activities is the Federal Buildings Fund, a fund authorized and established by the Public Buildings Amendments of 1972. The fund receives rental income, set at commercially equivalent rates. Income in excess of operating expenses is used to finance new construction or needed repair and renovation projects. PBS is currently executing $6.3 billion in new construction and repair projects nationwide.

Actual Federal Buildings Fund rent revenues for FY 1996 and FY 1997 were $634 million less than initially had been projected. This was due to several factors, including a policy decision in 1994 to bring rents into line with lower prevailing market rates that reduced rents in major metropolitan areas for FY 1995 and FY 1996. Overly optimistic assumptions regarding when new space would be available to produce income were another factor. The rent gap did not represent a financial loss to the Government. It reflects a difference between actual and projected rent revenue. It did not delay the execution of any major GSA capital projects. GSA took action immediately to ensure its operations fell within budget, reviewed and revised its income estimates, and took other steps to improve projection procedures.

GSA identified the shortage as a material weakness in its Federal Managers' Financial Integrity Act (FMFIA) Report for 1997, which is part of this Accountability Report. [See page 112.]

PBS also began adopting a new rent policy more closely aligned to private sector practices. It is designed to provide customers with better, more accurate information about their rent bills and to afford increased flexibility in negotiating occupancy agreements. The new policy was approved by the Office of Management and Budget for use in new leasing actions for FY 1997.

PBS revitalizes urban areas with Good Neighbor initiatives. GSA helps revitalize American cities through a broad range of civic initiatives that are consistent with its mission. Partnering with cities, customer agencies, and community groups, GSA provides safe, lively environments in and around Federal buildings, offering space for activities like farmers' markets, festivals, exhibits, restaurants, and shops. GSA also implements Executive Orders 12072 and 13006 to locate Federal workers in central business areas and downtown historic districts, and promotes use of the nation's historic buildings. In FY 1997, GSA renewed over 800 downtown-area leases, worth more than $2 billion, and hosted more than 5,000 community events and activities in Federal buildings and plazas. The agency worked with 50 cities in 35 states and entered into Good Neighbor contracts with 12 cities. Under these contracts, GSA will purchase services through downtown organizations in Atlanta, Baltimore, Birmingham, Ft. Worth, Memphis, Minneapolis, New Orleans, New York, Philadelphia, Portland, OR, Tacoma, WA, and Tallahassee.

PBS Central Office operations were reorganized in FY 1997, to enhance customer service; to foster the development of innovative products, practices and strategies; to ensure proper accounting and performance measurement; and to improve PBS products, services and key processes. The reorganization also created Centers of Expertise, teams in key areas committed to delivering critical services at the best price. The first six Centers of Expertise were established in Property Disposal, Retail Tenant Services, Energy and Public Utilities, Design, Historic Buildings and Art, and Presidential Libraries.

PBS has six major real estate functions:
· Property Management
· Leased Space Acquisition
· Property Development
· Federal Protective Service
· Portfolio Management
· Property Disposal
These are performed out of GSA's 11 regional offices.

Property Management

GSA manages properties in all 50 states and the U.S. territories, through 11 regional offices and 32 property management centers. PBS operates GSA's buildings and handles repairs, minor alterations and tenant services.

Customer satisfaction ratings increased in FY 1997 tenant surveys in low-performance buildings. PBS is using customer satisfaction surveys of a random sample of its tenants to drive its performance improvement efforts. The surveys were developed and administered by The Gallup Organization. Baseline surveys taken in 1994 and 1995 yielded an average customer satisfaction rating of 74%. After PBS concentrated its improvement efforts in the larger buildings housing most of our customers, customer satisfaction scores in those buildings rose from 71% to 77%. PBS plans to survey half its building inventory each year using this survey questionnaire, which is similar to those used by the International Facility Management Association and the Building Owners and Managers Association.

Operating costs per square foot in 71% of PBS-managed office space were equivalent to or lower than comparable private sector costs in FY 1997, according to a benchmark study conducted by the Logistics Management Institute (LMI). LMI compared cleaning, utilities and maintenance costs for 86 million square feet of GSA office space with private sector costs for the same type of space. (Inclusion of certain fringe benefits in the calculation of private sector-but not GSA-labor costs may account for some of GSA's favorable results, but does not shift the overall findings.) The study also found GSA's operating costs to be higher than private sector costs for 29% of the office space examined. GSA improved its performance over FY 1996 in all three categories of comparison.

PBS is experimenting with innovative energy conservation projects, many in partnership with local utility companies, to comply with Executive Order 12902, which mandates reduction of energy consumption in Federal buildings. In FY 1997, the energy consumption rate in GSA buildings was 73,000 BTUs per square foot, less than the FY 1996 rate but still short of the FY 2000 target of 67,800 BTUs per square foot and the 59,300-BTU target for FY 2005.

The Can't Beat GSA Space Alterations program reduced the cost and time required for space alterations. Initiated in November 1996, the program quickly led to improvements in customer satisfaction. The program features fixed-price projects and a timeliness guarantee which commits GSA to reduce its price by 5% if alteration work is not completed within an agreed timeframe.

PBS conducts Federal recycling efforts in approximately 1,100 buildings housing over 600,000 Federal employees. Recycling diverted approximately 45,000 tons of recyclable materials (primarily paper) away from landfills in FY 1997, saving more than $2.7 million in landfill and transportation costs. Sales of recycled materials provided more than $260,000, which was distributed among the participating agencies. GSA uses its recycling income for tuition assistance to users of Federal child care facilities.

Property Management in GSA's Central Office earned ISO 9001 certification in FY 1997, becoming the first Government service organization, and the first public or private real estate organization, to earn this prestigious, internationally recognized designation as a quality organization. ISO 9001 certification is a "quality assurance seal of approval" that is viewed worldwide as a key indicator of performance excellence.

Leased Space Acquisition

GSA leases space for Federal agencies in approximately 6,400 buildings at an annual rental of $2.4 billion. The agency has streamlined its leasing program, dramatically reducing the time and cost to deliver space, and providing service compatible with private real estate practices.

GSA implemented its Can't Beat GSA Leasing program with customer agencies in October 1996, following its internal launch in July 1996 with the adoption of dramatically simplified leasing procedures. PBS now offers agencies the opportunity to continue to use GSA as their provider of choice or lease on their own, an option that was exercised for only 14 of 900 leases in

FY 1997. Can't Beat GSA Leasing has expanded the use of lease re-negotiation-a practice which has saved $361 million since 1994-and reduced the average lease transaction times, raising customer satisfaction ratings to 90%.

In FY 1997, GSA contracted with five private real estate firms to provide leasing services for Federal agencies. To compensate for its smaller workforce, GSA awarded the National Real Estate Services contracts to help the Government lease space in local real estate markets. They will also provide a variety of other services, including requirements development, lease administration services, market surveys, lease re-negotiation and out-leasing.
   

Property Development

PBS manages the construction of new buildings, complex repair, modernization and alteration projects, and major lease-construction projects, through the Property Development program, which also provides a range of architectural, engineering and project management services. In FY 1997, Property Development helped develop physical-security and blast-design criteria for new Federal construction and modernization projects.

Three new U.S. courthouses-in Portland, OR, Minneapolis, MN, and Concord, NH-were completed in FY 1997, 25 others were under construction and 10 courthouse construction contracts were awarded as part of the largest Federal courthouse construction program in 50 years. Renovation work was completed on eight courthouses during the year, and was underway on 17 others. Contracts were awarded for courthouse construction in Montgomery, AL, Phoenix, AZ, Tucson, AZ, Tallahassee, FL, Albany GA, Hammond, IN, Omaha, NE, Cleveland, OH, Knoxville, TN, and Beckley, WV.

Congress has approved $3 billion in new obligational authority for 40 courthouse projects since 1990. GSA anticipates needing $5 billion for 120 additional projects to meet the U.S. Courts' increasing space requirements. As chair of the interagency Courthouse Management Group, GSA is working with Congress and the Administrative Office of the U.S. Courts to create more efficient and economical means to complete the program.

The PBS Design Excellence Program attracts well-known architects and "emerging designers," and exemplifies the commitment to design excellence that is the hallmark of all PBS construction and renovation projects. The Design Excellence Program continues to receive international recognition. In FY 1997, projects developed under the program were exhibited in major cities in cooperation with the American Institute of Architects.

The Art-in-Architecture program dedicates funds to art in public buildings, a tradition that goes back to the nineteenth century. Approximately 90 PBS Art-in-Architecture projects are in process across the country. In FY 1997, for the first time, four PBS commissions won prestigious GSA Design Awards-Diana Moore's 11-foot concrete head of Justice for the Martin Luther King, Jr. Federal Building and U.S. Courthouse in Newark, NJ; Clyde Lynd's bas-relief of fiber optics and concrete at the Federal Office Building in New York, NY; Doug Hollis' sculptural waterworks for the Vincent E. McKelvey Federal Building in Menlo Park, CA; and John Valadez's 50-foot long mural for the Federal Building in El Paso, TX.

Federal Protective Service

The Federal Protective Service (FPS) manages GSA's nationwide physical security and law enforcement programs. FPS also conducts preliminary investigations of incidents and criminal complaints occurring on GSA-controlled property, coordinates the Occupant Emergency Program, conducts risk assessments of Federal facilities and provides expert advice on security systems.

In the aftermath of the bombing of the Alfred P. Murrah Federal Building in Oklahoma City on April 19, 1995, FPS has contended with a new level of threat from domestic terrorism by upgrading security in GSA buildings, nearly doubling its ranks of uniformed officers, and developing new security standards.

In FY 1996 and FY 1997, GSA obligated $233.8 million for security upgrades, including substantial capital improvements and equipment in each of four critical areas: perimeter, entry and interior security, and security planning. About 6,700 of the 7,930 recommended and approved security countermeasures identified in the post-Oklahoma City Vulnerability Assessment of Federal Facilities have been fully implemented. Ninety percent of the highest-priority recommendations-those for large, multi-tenant buildings-have been reported as complete.

FPS increased the ranks of its uniformed Federal Protective Police Officers to 621, approaching the goal of 724 officers recommended in a FY 1996 Booz-Allen Hamilton workload study. Contracts for security guards were also expanded to 4,923 positions.

Portfolio Management

Portfolio Management has broad responsibility for managing GSA's portfolio of Government-owned and leased buildings. Its mission is to maximize the value and performance of the portfolio, following four principles of asset management in the Federal Government: (1) to support the missions of our customers, (2) to support Federal social and economic programs, (3) to provide incentives for cost-effective operation and utilization of assets, and (4) to practice sound financial management. Its principal activities include strategic and business planning, capital investment and divestment decision-making, and analysis of portfolio and asset performance.

Portfolio Management uses asset business plans to monitor the performance of each Government-owned building and major lease. Asset business plans provide a common direction for the management, operation and use of assets, focusing performance management down to the individual building and forming the basis for investment and divestment decisions.

To maximize the value of the PBS portfolio, Portfolio Management is responsible for minimizing the amount of non-revenue producing space in GSA's inventory. The vacancy rate as a percent of GSA's total inventory rose from 3% in FY 1993 to peak at 7% for the month of September 1996, before declining to an average 6% in FY 1997. This increase reflects the effect of downsizing on the PBS inventory. The GSA vacancy rate is lower than the comparable 10%-12% rate experienced in the private sector in FY 1997.

Property Disposal

Property Disposal manages the use and disposal of the Government's excess and surplus real properties, which are redistributed to other Government entities and to eligible non-profits, or sold to the general public. Property Disposal provides assistance and advice on complex disposal issues to Congress and other organizations in the public and private sectors, primarily on a reimbursable basis.

Real property sales increased 29% in FY 1997, largely due to Government downsizing. The value of properties disposed rose from $309 million in FY 1996 to $398 million in FY 1997. On average, sales prices were 10% higher than anticipated fair market value.

Property Disposal coordinates Government-Owned Real Estate (GORE) sales for Federal agencies through joint real estate fairs and auctions. The GORE program provides coordinated advertising and public access through the Internet and toll-free telephone numbers. Revenues from GORE sales rose 56% from $41 million in FY 1996 to $64 million in FY 1997. Participating Government agencies realized savings of up to 50% in marketing and associated costs by using shared resources for GORE sales and eliminating the costs of holding multiple auctions.

Property Disposal is handling disposal of historic Governors Island in New York Harbor, partnering with the Coast Guard and private sector experts to ensure that the public's interests are protected in the disposal process. A strategic military site for over 300 years-and the Coast Guard's North Atlantic headquarters since 1966-Governors Island is just a half mile off the tip of Manhattan.

Property Disposal is a significant player in the Administration's Brownfields program to clean up contaminated, abandoned sites in urban areas, integrating Federal real property disposal with community redevelopment plans. Property Disposal's role in the program includes: (1) identifying surplus Federal land-holdings in urban areas, (2) performing environmental baseline surveys of Federal property to be re-deployed, and (3) working with other public organizations to effect property transfers.

Family-Friendly Initiatives

PBS supports a family-friendly Federal work environment with a variety of programs, including child care and telecommuting.

GSA is a leader in designing and managing quality child care facilities. With the growing demand for affordable quality child care close to the workplace, GSA opened three on-site child care centers in FY 1997, bringing the total to 108 child care facilities serving Federal employees in 68 cities, 31 states and the District of Columbia. Seventy percent of GSA's child care facilities are professionally accredited, a far higher proportion than the 5% accreditation rate for all child care centers nationwide. More than 7,000 children are served in GSA's facilities.

GSA has developed telecommuting facilities that provide employees of all Federal agencies with satellite work locations. GSA now offers Federal telecommuters across the country access to 25 centers. These centers save travel time, conserve energy, and facilitate a family-friendly workplace for Government employees.

GSA also sponsors the Cooperative Administrative Support Program (CASU). CASUs are Federal agencies' cooperative arrangements to get the best price for commonly-used support services-e.g., photocopying, warehousing, labor, moving and property management-on a fully reimbursable basis. The CASU program was moved to GSA's Office of Governmentwide Policy at the start of FY 1998.

E-mail questions about this report to the Office of Communications

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