The House has approved legislation aimed at stepping up sales of vacant and underused federal buildings, a move that major contractors’ groups say could lead to a large volume of construction work as the facilities are converted to new uses.
One bill, which the House approved on May 23, would create a Public Buildings Reform Board, charged with recommending surplus federal buildings as candidates for sale.
The maximum total sales would be $8 billion. Likely purchasers are private developers seeking to turn unused federal office structures, warehouses and other buildings into residential or commercial facilities.
Brian Turmail, a spokesman for the Associated General Contractors of America, said the potential construction volume would far exceed the $8 billion sales-transaction total.
He pointed to the General Services Administration’s $19.5-million sale in 2013 of the former Georgetown Heating Plant in Washington, D.C., to a developer team. The team is converting the plant to condominiums, requiring more than $100 million in construction work, according to Turmail.
He said in an emailed statement, “In our mind, this federal initiative has the potential for building contractors—federal and private—to be on the scale of what the highway bill is for transportation contractors.”
Marco Giamberardino, National Electrical Contractors Association executive director for government affairs, said via email, "We believe this could indeed prove to be a real opportunity for the industry."
He added, "As the federal government weighs options for redeveloping and selling certain properties to maintain an efficient inventory ... improving energy efficiency and leveraging new technologies must be a major consideration to ensure maximum return on these investments."
The bill, sponsored by Rep. Jeff Denham (R-Calif.), also calls for GSA to produce a database of all federal real estate, including whether they are surplus or underused.
As GSA’s sale of the heating plant indicates, the Obama administration has taken steps in recent years to dispose of unused federal real estate.
In March 2015, the Office of Management and Budget issued a real estate management policy and a "Reduce the Footprint” plan. The OMB plan requires agencies to set annual targets for shrinking their total square footage, with reductions to begin in fiscal 2016.
The program goes further than a 2013 White House “Freeze the Footprint” directive.
The House on May 23 also passed a second bill, sponsored by Rep. Lou Barletta (R-Pa.), to establish a pilot program to accelerate federal real estate leases. The measure also states that buildings construction projects’ “scope or size” must not increase or decrease by more than 10% from their congressionally authorized levels without getting a new approval from House and Senate committees.
In addition, it says that the current Dept. of Energy headquarters building in Washington, D.C., should be sold if the head of GSA determines that a new building can be constructed “with no net costs to the government.”
In the Senate, the Homeland Security and Governmental Affairs Committee on Feb. 10 approved a measure that would codify the current Federal Real Property Council and broaden its duties to include developing standard guidance for property management among agencies.
The bill, which Sen. Thomas Carper (D-Del.) sponsored, also would require agencies to keep an inventory of their real estate holdings. There has been no Senate-floor action yet on the measure.