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GAO warns of growing deferred‑maintenance crisis in Federal Buildings Fund, urges property disposals and funding fixes
Summary
GAO told the House Appropriations subcommittee that GSA manages hundreds of millions of square feet of aging federal space and that persistent funding shortfalls and underused properties have produced a large, growing deferred‑maintenance problem; GAO recommended prioritizing disposal of underused, high‑liability buildings, improving utilization data under the USE IT Act, and considering alternative financing for large projects.
The House Appropriations subcommittee heard testimony that the federal governmentmay be carrying an escalating deferred‑maintenance burden on its portfolio of buildings and that stronger disposal and funding strategies are needed to address it. Chairman Joyce opened the hearing by noting that GSAmanages hundreds of millions of square feet and said a Public Buildings Reform Board report "indicated that the deferred maintenance in the federal building portfolio has become a $50 billion liability."
David Mahoney, the Government Accountability Officedirector for physical infrastructure, told the subcommittee that GAO has long classified federal real property management as a high‑risk area and that the problem spans both aging inventory and funding shortfalls. "Whatever the specific number, the trajectory is clear. There is a lot of deferred maintenance that is growing significantly," Mahoney said, adding that estimates for GSA alone vary across reviews.
GAO outlined three broad actions Congress and agencies could take to reduce the strain on the Federal Buildings Fund (FBF): identify and dispose of underused buildings with high deferred‑maintenance liabilities, consider alternative financing or budget structures for large projects, and provide targeted appropriations to prepare properties for disposal or to consolidate tenant agencies into more cost‑effective spaces. Mahoney said the FBF is funded primarily by tenant agenciesrent payments to GSA but "is subject to the appropriations process," creating a recurring gap GAO estimated in testimony at roughly $1 billion a year between rent collected and amounts authorized to spend.
Members pressed GAO on specific figures and feasibility. Ranking Member Hoyer and others cited inspector general findings about deficient security fixtures at some GSA properties and questioned whether moving the FBI from the J. Edgar Hoover Building to the Reagan Building would be a secure solution. The committee discussed a GSA estimate that retrofitting the Reagan Building would "take at least $1.5 billion," and GAO warned that projects of that scale often cost more than initial estimates and require careful cost and security assessments.
On disposal mechanics, GAO said decisions depend on property‑by‑property facts: some sites will be marketable and can be sold "as‑is," while others may require upfront demolition, remediation or historic‑preservation work. GAO explained the tradeoffs: "Generally speaking, it would be simpler if you can sell it on the market, even at a reduced price, to get it off the federal government's books," the witness said, while acknowledging demolition and remediation need upfront funding.
The panel also discussed the USE IT Act, reporting requirements and utilization data. GAO said the new utilization reporting will, once available, give a clearer picture of where space is underused and help prioritize disposals. GAO testified that utilization reporting was due under the statute and that better data is a first step: "The point is not for the data to be perfect. The point is to get a sense of where these buildings generally are in terms of utilization," Mahoney said.
Lawmakers raised preservation concerns for the William J. Cohen Federal Building — listed on the National Register for its integrated New Deal art — after GSA flagged it for accelerated disposal. GAO said GSA's historic‑preservation screening can identify artwork and require protections in sale contracts but also warned that federal real property data is often flawed and that staffing disruptions could hamper preservation work.
Members asked GAO to follow up with more granular information requested for the record, including examples of courthouses in poor condition, the status of USE IT Act reports, cost estimates for proposed retrofits and questions about HUD's headquarters relocation and related legal issues. GAO recommended sustained congressional oversight of USE IT Act implementation, reconsideration of the $4 million prospectus threshold that can slow repairs and creating or designating funds to prepare properties for disposal and to preserve priority holdings.
The subcommittee adjourned after members asked GAO to return with the requested follow‑up material and written recommendations on funding mechanisms and prospectus thresholds.
