£ < 3) O \ A * I V PBo«°*>0 U.S. ENVIRONMENTAL PROTECTION AGENCY OFFICE OF INSPECTOR GENERAL EPA Can Further Reduce Space in Under-Utilized Facilities Report No. 13-P-Q162 February 20, 2013 Scan this mobile code to learn more about the EPA OIG. ------- Report Contributors: Marcia Hirt-Reigeluth Jennifer Hutkoff Yeon Kim Heather Layne Mike Davis Abbreviations CFR Code of Federal Regulations EPA U.S. Environmental Protection Agency FMSD Facilities Management and Services Division GSA U.S. General Services Administration HQ Headquarters OARM Office of Administration and Resources Management OIG Office of Inspector General SLATE Strategic Lease and Asset Tracking Enterprise USF Usable Square Feet Cover photos: EPA facilities, from left: the EPA Region 5 Ralph H. Metcalfe Federal Building, Chicago, Illinois; and the EPA Region 1 John W. McCormack Federal Building, Boston, Massachusetts. (EPA photos) Hotline To report fraud, waste, or abuse, contact us through one of the following methods: e-mail: OIG Hotline@epa.gov write: EPA Inspector General Hotline phone: 1-888-546-8740 1200 Pennsylvania Avenue, NW fax: 202-566-2599 Mailcode 2431T online: http://www.epa.gov/oiq/hotline.htm Washington, DC 20460 ------- S74^v • U.S. Environmental Protection Agency 13-P-0162 | \ Office of Inspector General February20 2013 s "V—'—J" s v\|/v S At a Glance Why We Did This Review We sought to determine to what extent the U.S. Environmental Protection Agency's (EPA's) efforts to reduce under-utilized or unneeded property resulted in cost savings. The February 2004 Executive Order 13327, Federal Real Property Asset Management, promotes efficient and economical use of federal real property assets and assures management accountability for implementing federal real property management reforms such as the development and implementation of agency asset management plans. Federal real property is defined as any real property owned, leased, or otherwise managed by the federal government. The June 2010 Presidential Memorandum, Disposing of Unneeded Federal Real Estate, requires federal agencies to eliminate excess properties and lease arrangements that are not cost effective. This report addresses the following EPA Goal or Cross-Cutting Strategy: • Strengthening EPA's Workforce and Capabilities For further information, contact our Office of Congressional and Public Affairs at (202) 566-2391. The full report is at: www.epa.qov/oiq/reports/2013/ 20130220-13-P-0162.pdf EPA Can Further Reduce Space in Under-Utilized Facilities What We Found Although EPA has been releasing unneeded space since 2007, it continues to have under-utilized space. The U.S. General Services Administration (GSA) owns or leases facilities for EPA use. At 13 of the 16 facilities reviewed, we estimated that EPA had 433,336 square feet of under-utilized space as of February 2012. EPA is limited in what type of space it can release back to GSA before a lease expires. Space can only be released if it is marketable; configuration issues and the cost to relocate employees can pose problems. If all under-utilized space in our sample was marketable, we estimate EPA could save up to $21.6 million annually by releasing under-utilized space. Also, EPA does not have a policy for determining when it should be housing contractors on-site in its facilities. Contractors occupied an estimated 197,000 square feet in the sampled facilities. We estimated that EPA spent up to $9.9 million annually in housing contractors on-site at the sampled facilities. EPA lacks accurate, current, and complete information on the number of personnel and usable square feet (USF) in its Strategic Lease and Asset Tracking Enterprise (SLATE) system for its GSA-owned/leased offices. As of April 2012, SLATE had incorrect personnel information for 13 of the 16 facilities sampled (81 percent), and 5 of 16 facilities sampled (31 percent) had incorrect information on USF. SLATE recorded a net 548 more personnel than what EPA facility managers had provided for the sampled facilities and a net 235,918 less USF than the sampled facilities had. Additionally, the entire USF of 325,128 for the Region 5 Ralph H. Metcalfe building was not reported in SLATE. This occurred because updates to SLATE are sporadic and inconsistent. Inaccurate data in SLATE hamper EPA's ability to make informed decisions about managing its facilities. Recommendations and Planned Agency Corrective Actions We recommend that the Assistant Administrator for Administration and Resources Management assess utilization of space and relocate staff where warranted. We also recommend that the Assistant Administrator develop and enforce a policy that requires contracting staff ensure that approval for on-site contractor performance is obtained from the responsible office, and require that personnel information for each facility be consistently tracked and updated in the appropriate EPA systems. The Agency concurred with all of the recommendations and proposed revised language, which we incorporated where appropriate. Noteworthy Achievements Since fiscal year 2007, EPA has saved nearly $12.9 million by reducing space and plans to save an additional $1.8 million by fiscal year 2014, for a total of $14.7 million in savings. ------- UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460 THE INSPECTOR GENERAL February 20, 2013 MEMORANDUM SUBJECT: EPA Can Further Reduce Space in Under-Utilized Facilities Report No. 13-P-0162 FROM: Arthur A. Elkins, Jr. TO: Craig E. Hooks Assistant Administrator for Administration and Resources Management This is our report on the subject audit conducted by the Office of Inspector General (OIG) of the U.S. Environmental Protection Agency (EPA). This report contains findings that describe the problems the OIG has identified and corrective actions the OIG recommends. This report represents the opinion of the OIG and does not necessarily represent the final EPA position. Final determinations on matters in this report will be made by EPA managers in accordance with established audit resolution procedures. Action Required In accordance with EPA Manual 2750, you are required to provide a written response to this report within 60 calendar days. Your response will be posted on the OIG's public website, along with our comments on your response. Your response should be provided in an Adobe PDF file that complies with the accessibility requirements of Section 508 of the Rehabilitation Act of 1973, as amended. If your response contains data that you do not want to be released to the public, you should identify the data for redaction. You should include a corrective actions plan for agreed-upon actions, including milestone dates. We have no objections to the further release of this report to the public. This report will be available at http://www.epa.gov/oig. If you or your staff have any questions regarding this report, please contact Melissa Heist, Assistant Inspector General for Audit, at (202) 566-0899 heist.melissa@epa.gov; or Mike Davis, Director for Efficiency Audits, at (513) 487-2363 or davis.michaeld@epa.gov. ------- EPA Can Further Reduce Space in Under-Utilized Facilities 13-P-0162 Table of C Chapters 1 Introduction 1 Purpose 1 Background 1 Noteworthy Achievements 3 Scope and Methodology 3 2 EPA Can Further Strive for Space Reduction 6 Federal Policies Seek to Reduce Space 6 EPA Has Under-Utilized Space 7 EPA Does Not Have a Policy for Determining When Contractors Should Be On-Site 9 Conclusion 11 Recommendations 12 Agency Response and OIG Evaluation 12 3 Personnel and Usable Square Feet Data in SLATE Not Updated Timely 14 SLATE and Its Data Quality and Integrity Important 14 Personnel Information in SLATE Not Accurate 15 USF Information in SLATE Not Accurate 16 Number of Facilities in SLATE Not Accurate 17 Conclusion 17 Recommendations 17 Agency Response and OIG Evaluation 17 Status of Recommendations and Potential Monetary Benefits 19 Appendices A Details on Scope and Methodology 20 B Calculations for Under-Utilized Space and Excess Cost for 16 Sampled Facilities 22 C Cost of Housing Contractors On-Site at 16 Sampled Facilities 24 D Agency Response to Draft Report 25 E Distribution 29 ------- Chapter 1 Introduction Purpose The June 2010 Presidential Memorandum, Disposing of IJnneeded Federal Real Estate, required federal agencies to accelerate efforts to identify and eliminate excess properties. Agencies were to dispose of surplus assets, consolidate facilities, and eliminate lease arrangements that were not cost effective. Accordingly, we sought to determine to what extent the U.S. Environmental Protection Agency's (EPA's) efforts to reduce under-utilized or unneeded property resulted in cost savings. Background EPA facilities are comprised mostly of offices and laboratories in space owned or leased by either EPA or the U.S. General Services Administration (GSA). As of November 2011, the data in EPA's Strategic Lease and Asset Tracking Enterprise (SLATE) system showed that EPA occupied 170 facilities with approximately 10 million usable square feet (USF) of space at an annual operating cost of approximately $279 million. USF is the net space occupied by a tenant for its personnel and equipment use and does not include fire corridors, toilets, mechanical rooms, and common building areas. SLATE also reported that these facilities housed 23,498 personnel; that number includes not only EPA staff but contractors, grantees, Senior Environmental Employment enrollees, and interns. Details are in table 1. Table 1: EPA facilities by legal interest Legal interest No. of facilities Percent Personnel USF3 Annual cost EPA owned/leased 24 14.12% 5,536 4,224,479 $45,530,093 EPA special use agreement1 10 5.88% 46 30,475 519,697 GSA-owned/leased 2 134 78.82% 17,909 5,793,357 232,607,245 State government owned 2 1.18% 7 2,050 - Total 170 100.00% 23,498 10,050,361 $278,657,035 Source: Office of Inspector General (OIG) analysis of EPA's data in SLATE as of November 2011. 1 Facilities where EPA personnel are co-located with other federal agencies or have special use arrangements with state or local entities. 2 Includes offices, laboratories, warehouses, storage, child care, and parking lots. 3 Includes rentable square feet for one facility that did not record usable square feet. EPA facilities are spread throughout the United States and Puerto Rico. Of the 170 facilities, approximately 59 are large facilities—greater than 20,000 USF. 1 13-P-0162 ------- The remainder of EPA's facilities are smaller, special-purpose buildings and project offices. Each of EPA's 10 regions has a regional office and at least one laboratory. Figure 1 shows details. Figure 1: EPA regions and major facilities Hawaii ~ EPA national headquarters - Washington, DC Regional headquarters Central regional laboratories Program laboratories Source: EPA's 2009 Nationwide Facilities Guide Initiatives to Reduce Federal Property The February 2004 Executive Order 13327, Federal Real Property Asset Management, promotes efficient and economical use of federal real property assets and assures management accountability for implementing federal real property management reforms such as the development and implementation of agency asset management plans. For the purpose of this executive order, federal real property is defined as any real property owned, leased, or otherwise managed by the federal government. The June 2010 Presidential Memorandum, Disposing of Urmeeded Federal Real Estate, directed agenci es to take immediate steps to make better use of remaining real property assets as measured by utilization and occupancy rates, annual operating costs, energy efficiency, and sustainability. Agencies were to dispose of surplus assets, consolidate facilities, and eliminate lease arrangements that were not cost effective. Agencies were directed to use innovative approaches to space management and alternative workplace arrangements such as telework. To carry out the requirements of the June 2010 memorandum, the Office of Management and Budget, in consultation with the GSA Administrator and the Federal Real Property Council, developed guidance in July 2010 for actions that agencies should take. The memo included agency-developed targets to achieve $3 billion in cost savings by the end of fiscal year 2012. These savings included proceeds from the sale of assets; reduced operating, maintenance, and energy 13-P-0162 2 ------- expenses from disposals; and other space consolidation efforts, including ending of leases. EPA planned to contribute approximately $7.8 million as part of the $3 billion in savings. EPA's July 2010 initial and April 2011 updated Real Property and Innovation Plan stated the Agency's commitment to reducing its environmental footprint through efficient management of its real property portfolio. The plan stated that the Agency would continue to monitor and assess its facilities' space utilization and take steps to reduce under-utilized space. Additionally, the Agency would continue to implement sustainable design, construction, alterations, and operations and maintenance. The June 2011 Presidential Executive Order 13576, Delivering an Efficient, Effective, and Accountable Government, calls for a government that cuts waste and is fully accountable to the American public. As part of this executive order, the President charged federal chief financial officers with increasing efforts to identify, execute, and report on cost savings within federal agencies. Noteworthy Achievements Since fiscal year 2007, EPA has released more than 380,000 square feet of space with cost savings of nearly $12.9 million. EPA plans to save an additional $1.8 million in fiscal years 2012 through 2014 by releasing additional space, for a total of $14.7 million in savings (table 2). Table 2: EPA space released Year Square feet released Cost savings Fiscal years 2007-2011 380,756 $12,864,283 Planned for fiscal years 2012-2014 71,157 $1,843,112 Total 451,913 $14,707,395 Source: OIG analysis of EPA's data. Scope and Methodology We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our review objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective. We performed the audit from November 2011 to October 2012. We visited the Facilities Management and Services Division (FMSD) and Office of Acquisition Management in the Office of Administration and Resources Management, Washington, DC. We interviewed FMSD officials in headquarters (HQ) and regional 13-P-0162 ------- facility managers for 16 sampled facilities to determine their roles and responsibilities and to verify information on personnel head counts and USF in SLATE. We interviewed the Office of Acquisition Management Special Assistant and Region 9's contracting personnel to gain a better understanding of EPA's policies and procedures regarding allocation of space to on-site contractors. We selected 16 GSA-owned/leased facilities for review, as shown in table 3. Table 3: Sixteen Sampled Facilities Region State City Building Name Usable Square Feet No. of Personnel HQ District of Columbia Washington Ariel Rios Federal Building 446,324 1,649 HQ District of Columbia Washington 1310 L Street 135,901 570 HQ District of Columbia Washington Ronald Reagan Building 230,664 1,137 HQ District of Columbia Washington Colorado Building 9,667 20 1 Massachusetts Boston John W. McCormack Building 224,261 845 2 New York New York Ted Weiss Federal Office Building 269,834 851 2 Puerto Rico Guaynabo City View Plaza 19,700 60 3 Pennsylvania Philadelphia 1650 Arch Street 268,968 1,133 5 Illinois Chicago Ralph H. Metcalfe Federal Building 0 1,558 5 Michigan Ann Arbor National Vehicle & Fuel Emissions Laboratory - Office Building 59,100 235 5 Ohio Norwood Norwood Professional Building 28,594 85 6 Texas Dallas Fountain Place 239,130 1,052 7 Kansas Kansas City 901 North 5th Street 182,554 700 9 California San Francisco 75 Hawthorne Street 253,919 1,160 9 California Los Angeles Los Angeles Field Office 13,813 25 10 Washington Seattle Park Place Building 154,006 669 Total 2,536,435 11,749 Source: OIG analysis of EPA data in SLATE as of November 2011 (further details on OIG methodology in appendix A). To determine applicable criteria, we reviewed the following: • Code of Federal Regulations (CFR), 41 CFR Part 102-79, Assignment and Utilization of Space • Executive Order 13327, Federal Real Property Asset Management, February 2004 • GSA's July 2011 report, Workspace Utilization and Allocation Benchmark • Federal Real Property Council's Guidance for Improved Asset Management, December 2004 • Presidential Memorandum, Disposing of Unneeded Federal Real Estate, June 2010 4 13-P-0162 ------- • Office of Management and Budget's July 2010 Management Procedures Memorandum No. 2010-07, Development of a Real Property Cost Savings and Innovation Plan • Executive Order 13576, Delivering an Efficient, Effective, and Accountable Government, June 2011 Further details on the scope and methodology used—including the methodology to select our sample, calculate under-utilized space, and calculate cost savings— are in appendix A. 13-P-0162 5 ------- Chapter 2 EPA Can Further Strive for Space Reduction Although EPA has been releasing unneeded space since 2007, EPA continues to have under-utilized space. At 13 of the 16 GSA-owned/leased EPA facilities reviewed, we estimated that EPA had 433,336 square feet of under-utilized space as of February 2012. EPA is limited in what type of space it can release back to GSA before a lease expires. Space can only be released if it is marketable; configuration issues and the cost of relocating employees can pose additional problems. If all the under-utilized space in our sample were marketable, we estimate EPA could save up to $21.6 million annually by releasing under-utilized space. Also, EPA does not have a policy for determining when it should be housing contractors on-site in its facilities. Contractors occupied an estimated 197,000 usable square feet in the sampled facilities. We estimated that EPA spent at least $5.8 million and up to $9.9 million annually in housing contractors on-site at the sampled facilities. Federal Policies Seek to Reduce Space The June 2010 Presidential Memorandum, Disposing of Unneeded Federal Real Estate, required: • Federal agencies to take immediate steps to make better use of remaining real property assets, as measured by utilization and occupancy rates and annual operating costs. • To the extent permitted by law, agencies dispose of surplus assets, eliminate lease arrangements that are not cost effective, pursue consolidation opportunities within and across agencies in common asset types, increase occupancy rates in current facilities through innovative approaches to space management and alternative workplace arrangements such as telework, and identify offsetting reductions in inventory when new space is acquired. Assignment and Utilization of Space, 41 CFRPart 102-79, states: An Executive agency must promote maximum utilization of Federal workspace, consistent with mission requirements, to maximize its value to the Government. 41 CFR §102-79.10. Executive agencies must promote the optimum use of space for each assignment at an economical cost to the Government, provide quality workspace that is delivered and occupied in a timely 13-P-0162 6 ------- manner, and assign space based on mission requirements. 41 CFR §102-79.20. EPA Has Under-Utilized Space EPA planned to save $7.8 million as part of the federal government's efforts to reduce space to comply with the June 2010 Presidential Memorandum. Since fiscal year 2007, EPA has released over 380,000 square feet of space with a savings of nearly $13 million, and plans to save an additional $1.8 million in fiscal years 2012 through 2014 (see table 2, chapter 1). Nonetheless, despite EPA's efforts, at 13 of the 16 EPA facilities in our sample of GSA-owned/leased facilities, we estimated that EPA had 433,336 square feet of under-utilized space as of February 2012. We estimated the annual operating cost of this under-utilized space to be approximately $21.6 million annually. A breakdown is in table 4 and further details are in appendix B. Table 4: Under-utilized space and annual costs for 13 facilities using 210 USF per person Total under-utilized Excess annual Location and building name space operating cost HQ-Ariel Rios Federal Building 100,589 $5,664,167 R 2-Ted Weiss Federal Building 64,676 5,274,975 R 1-John W. McCormack Building 78,064 4,350,507 R 7-901 North 5th Street 49,849 1,941,619 R 5-Ralph H. Metcalfe Federal Building 33,360 1,336,402 R 3-1650 Arch Street 41,192 1,112,184 R 10-Park Place Building 10,275 448,812 R 2-City View Plaza, Puerto Rico 6,489 393,169 HQ-Colorado Building 6,103 345,674 R 6-Fountain Place 11,924 245,754 R 9-Los Angeles Field Office 7,830 183,770 HQ-310 L Street 18,500 182,595 R 5-Norwood Professional Building 4,485 96,966 Total 433,336 $21,576,594 Source: OIG analysis of EPA data provided by FMSD and regional facility managers as of February 2012. GSA's July 2011 report, Workspace Utilization and Allocation Benchmark, recommended a federal benchmark of 190 USF per person. GSA staff stated that, in determining the benchmark, they included only office or cubicle areas and a portion of shared space such as conference rooms and hall space. Also, GSA's July 2011 report further states that the average space allocated could be reduced to only 60 square feet in the next 5 years. In response to our draft report, the Agency stated that "the GSA document hypothesises (sic) that the 60 square feet could be achieved only through extensive use of alternative workspace arrangements, such as hoteling, home office and teleworking on a fulltime basis. The EPA's current policy limits telework to no more than two days per week and 13-P-0162 7 ------- would therefore have to be modified. Such a significant change has already been the subject of extensive negotiation and delay. Hence, at this time, the EPA does not recognize that the average office space can be reduced to 60 square feet in upcoming years." We recognize that the 60 square feet relates to alternative workspace arrangements for teleworking employees. However, as the Agency has already started to move toward enhanced telework in Regions 7 and 9 that allows employees to telework more than 2 days per week, this option could become a viable option. In determining EPA's under-utilized space, we used EPA's internal standard of 210 USF per person as opposed to GSA's 190 USF because EPA office spaces include a variety of support spaces that GSA does not include in its 190 USF benchmark. These support spaces include areas for conferences, copying, public information, computers, library, filing, storage, mail and stock, and an employee lounge. We decided to use 210 USF since EPA tracks all of the support space that GSA excludes from its benchmark when computing USF, and since FMSD does not readily track the excluded GSA support space. We believe that applying 210 USF per person for calculating space utilization is the generalized and conservative workspace average and demonstrates whether EPA's facilities are under-utilized. EPA's 2011 draft New Mobile Work Space Design Guidelines require a typical work station to be up to 60 USF and a telework station up to 30 USF per person not including support spaces. In response to the draft report, the Agency stated that the guideline numbers of 60 and 30 USF are not considered reductions from the 210 square feet per person number, which incorporates required space outside the actual workstation for circulation, filing, conferencing, collaboration, and small meeting rooms. The Agency stated a reasonable design reduction from 210 square feet would be 175 square feet per person. EPA had conducted space assessments in 2005 and 2007. Given the under-utilized space disclosed by the OIG, the Agency needs to further assess utilization of GSA-owned and leased facilities and consider relocating staff to reduce under- utilized space. EPA Needs to Establish Space Guidelines for Support Spaces EPA's normal practice is to make a determination 5 years before a lease expires whether the Agency will stay in its current location or put out a request for proposals for new space. As part of this process, EPA performs a space assessment to determine space requirements. However, EPA's draft 2011 space guidelines do not include specific guidelines for support spaces. In a 2005 rent analysis conducted by an EPA contractor, the contractor recommended that EPA define and allocate support spaces (training, conference, filing rooms, etc.) based on the actual requirements for these spaces. However, FMSD performs an overall assessment of space on a case-by-case basis when a lease is up for renewal. The Chief of FMSD's Architecture, Engineering and 13-P-0162 8 ------- Asset Management Branch explained that during the assessment, support space is determined by need at the individual facility. EPA's July 2004 Space Acquisition and Planning Guidelines describe the approximate size and frequency of special spaces typically found in EPA facilities. However, EPA's October 2011 draft New Mobile Work Space Design Guidelines focus on workstations and offices. It generally describes what should be in the support space but does not include specific space allowance guidelines for these spaces. Establishing guidelines, analyzing the support space specifically based on need, and determining that it is within the established guidelines are essential in determining whether an office is sized correctly and fully utilized. Limitations on Returning Space to GSA EPA is limited in returning marketable space to GSA. EPA's occupancy agreement with GSA allows EPA to return marketable space or terminate a lease with 120 days notice. EPA is locked into long-term lease agreements (10 years) with GSA unless it can return a marketable space to GSA during the lease. Otherwise, EPA must remain in place until the lease expires. Other factors related to space configuration impact the ability of EPA to return under-utilized space to GSA. For example, EPA Region 3 planned to return an entire floor and portions of two others to GSA before abandoning such plans for security reasons. The original GSA lease for the EPA Region 3 building required space where only government employees could use an elevator bank with access to its space. Returning the space would potentially have allowed the general public to have access to the elevator bank and EPA space. In addition, FMSD's Chief of the Architecture, Engineering and Asset Management Branch said that the Ariel Rios building and the Colorado building in Washington, DC, along with the John W. McCormack building in Region 1 (Boston, Massachusetts) are historic buildings that have corridors and hallways that cannot be reduced. FMSD's Chief of the Architecture, Engineering and Asset Management Branch also stated that there is substantial cost involved when the Agency relocates employees for space reduction; if the cost outweighs the benefits, the Agency will not implement the space reduction. EPA Does Not Have a Policy for Determining When Contractors Should Be On-Site EPA houses contractors on-site without determining in advance if they should be housed on-site. Our review of 16 GSA-owned/leased facilities determined that contractors occupied space in 14 facilities totaling an estimated 197,000 square feet of EPA space. However, there is no Agency policy outlining what contractor functions are essential to the Agency and require contractors working on-site, and program officers are not required to justify the need to house contractors on-site. EPA spends at least $5.8 million and up to $9.9 million annually housing 13-P-0162 9 ------- contractors and a policy is needed to ensure contractors are only housed in EPA space when justified. EPA Studies and Guidance Address Contractors Being Off-Site EPA's 2009 Rent Efficiencies Report recommended that EPA explore options to have contractors located at contractor-provided locations if those contractors are deemed "non-mission critical" or not meeting on-site qualifying criteria. Also, the EPA Support Service Contracting Guide states that efforts should be taken to ensure that contractor employees do not occupy the same space with federal employees unless it is required. EPA's Contracts Management Manual, Section 3.2.5, states that program and regional offices must identify all contracts where the contractor is working at a government facility and evaluate whether this is appropriate and necessary and, if not, relocate the place of performance to an off-site location. No Policy for Determining On-Site Contractors There is no overarching EPA policy regarding housing contractors on-site in EPA space. Each region has its own way of determining which contract personnel need to be housed in EPA space. Often, it is decided on a contract-by-contract basis. The Special Assistant to the Director of the Office of Acquisition Management and a senior Region 9 contracting officer confirmed that there is no official EPA policy regarding contractor personnel being assigned space within EPA owned/leased facilities. The Special Assistant to the Director of the Office of Acquisition Management also stated that program officers were not required to justify the need to house contractors on-site. Without a policy on what contractors should be provided space in EPA facilities, upfront determinations are not made on the space that contractors need and EPA may pay for unnecessary contractor space. 13-P-0162 10 ------- As of February 2012, EPA spent approximately $9.9 million annually housing contractors on-site for the 16 sampled facilities (table 5 and appendix C). Table 5: Cost of housing contactors on-site at 16 sampled facilities No. of Annual cost for Location and building name contractors contractor space R 1-John W. McCormack Building 53 $951,081 R 2-City View Plaza, Puerto Rico - - R 2-Ted Weiss Federal Building 79 1,843,653 R 3-1650 Arch Street 82 549,007 R 5-National Vehicle & Fuel Emissions 36 300,026 R 5-Norwood Professional Building 7 37,716 R 5-Ralph H. Metcalfe Federal Building 58 543,097 R 6-Fountain Place 77 350,906 R 7-901 North 5th Street 11 123,723 R 9-75 Hawthorne Street 59 640,458 R 9-Los Angeles Field Office 3 33,786 R 10-Park Place Building 40 392,863 Subtotal - contractors only 505 $5,766,316 HQ-Ronald Reagan Building 135' 2,193,470 HQ-Ariel Rios Federal Building 117' 1,784,260 HQ-1310 L Street 511 124,330 HQ-Colorado Building - - Subtotal - contractors and 303 $4,102,060 nonfederal personnel Total 808 $9,868,376 Source: OIG analysis of data in SLATE and from EPA sampled office facility managers as of February 2012: 1 Calculation includes contractors as well as Senior Environmental Employment enrollees, and others as FMSD was unable to provide breakdowns. Conclusion EPA can potentially achieve up to $21.6 million in cost savings annually by releasing all under-utilized office space for 13 of the 16 sampled facilities reviewed. EPA can also potentially save at least $5.8 million and up to $9.9 million annually by not housing contractors on-site in 14 of the 16 sampled facilities that housed contractors. EPA's occupancy agreement with GSA allows EPA to return space or terminate a lease with 120 days notice if it is marketable. However, EPA is locked into 10-year, long-term lease agreements with GSA for these office spaces unless it can return a marketable space to GSA during the lease, and also faces other obstacles in eliminating under-utilized space. Nonetheless, EPA has the potential to achieve savings when office space is renovated or relocated, and EPA should continue to pursue reducing under- utilized space. 13-P-0162 11 ------- Recommendations We recommend that the Assistant Administrator for Administration and Resources Management: 1. Assess utilization of GS A-owned and leased facilities and relocate staff as warranted to reduce under-utilized space. 2. Develop space guidelines for support spaces and assess the number and size of support spaces needed at the time of a new or renewal lease. 3. Require the Office of Acquisition Management, in conjunction with the Office of Administration, to develop and enforce a policy that requires contracting staff ensure approval for on-site contractor personnel is obtained from the responsible office and documented in the contract file. Agency Response and OIG Evaluation The Agency concurred with the findings and recommendations and provided milestone dates for the recommendations. The Agency also proposed some revised language, which we incorporated where appropriate in the report. The Agency's full response is in appendix D. The Agency concurred with recommendation 1 and stated that the Office of Administration and Resources Management (OARM) continues to identify options throughout program offices and the regions to do work differently in support of the June 2010 Presidential Memorandum, Disposing of Unneeded Federal Real Estate. To further this initiative and at the direction of the Administrator and Chief Financial Officer, OARM is implementing a plan to reduce the EPA's office space by 20 percent at its leased facilities. In subsequent discussions, the Agency stated that given the breadth of the Agency's space consolidation project and the unknowns involved, it is difficult to provide a meaningful completion date. However, Office of Administration's projected completion date, based on the availability of sufficient funding, is December 2022. On December 17, 2012, Craig E. Hooks, Assistant Administrator issued a memo to EPA's senior leadership on EPA's Space Redesign Effort. The memo stated that, "To further this effort and at the direction of the Administrator and Chief Financial Officer, OARM is implementing a plan to reduce the EPA's office space by 20 percent at our leased facilities. The plan is to transform agency work space so that it is more efficient, collaborative and technologically sophisticated, and will reduce the agency's physical and environmental footprints. ...This is an ambitious, multiyear, agencywide effort for which I am seeking your support as the EPA's senior leaders. It will position the agency to better achieve our mission through greater openness and collaboration; enhance the quality of work life in our workplace; support the government wide mobile/flexible workplace initiative 12 13-P-0162 ------- and reduce our energy and greenhouse gas emissions." We agree with the Agency's corrective action for recommendation 1. The Agency concurred with recommendation 2 and stated that OARM will revise the October 2011 draft New Mobile Work Space Design Guidelines to include support space guidance that will be used for new and renewal leases. The corrective action is expected to be completed by December 2013. We agree with the Agency's corrective action for recommendation 2. The Agency initially did not concur with recommendation 3 to require the Office of Acquisition Management, in conjunction with the Office of Administration, to develop and enforce a policy that requires justification for contractor personnel to utilize on-site work space at EPA facilities and confirmation of the justification by FMSD and regional facility managers. The Agency stated that decisions regarding on-site contractors are strictly based on the work being performed. Rather than developing and enforcing a policy, OARM believes that a more prudent approach would be to require EPA's contracting staff to ensure that approval for on-site contractor performance is obtained from the responsible office and documented in the contract file. We agree with the Agency's proposed language for recommendation 3 and have revised it accordingly. However, our position remains unchanged for development of a policy. During the exit conference, OAM stated that it will establish a work group to develop an agency-wide process with associated guidance, for consideration for contractor personnel to be housed in on-site, EPA occupied work space. EPA expects to have this process in place by September 2013. We agree with the Agency's corrective action for recommendation 3. 13-P-0162 13 ------- Chapter 3 Personnel and Usable Square Feet Data in SLATE Not Updated Timely EPA lacks accurate, current, and complete information on the number of personnel and usable square feet (USF) in SLATE for its GSA-owned/leased offices. As of April 2012, SLATE had incorrect personnel information for 13 of the 16 facilities sampled (81 percent), and 5 of 16 facilities sampled (31 percent) had incorrect information on USF. SLATE recorded a net 548 more personnel than what EPA had working in the sampled facilities and listed a net 235,918 fewer USF than the sampled facilities had. Additionally, the entire USF of 325,128 for the Region 5 Ralph H. Metcalfe building was not reported in SLATE; it only reported rental square feet in SLATE. This occurred because updates to SLATE are sporadic and inconsistent. Inaccurate data in SLATE hamper EPA's ability to make informed decisions for managing its facilities. SLATE and Its Data Quality and Integrity Important The SLATE system describes SLATE as follows: SLATE is a Web-based, comprehensive management and strategic planning system developed for use by those responsible for real property management at EPA. SLATE is designed to maintain and allow viewing of all EPA facilities, including building plans, lease information, photographs, personnel, space and energy usage, budget requests, cost, and construction project tracking. SLATE allows a user to submit and maintain facility level data as well as to view, create reports on, and print a wide range of facility information. The system tracks construction projects from their planning stages through the budget process and supports design, construction, and commissioning by maintaining drawings, photographs, contracts, work plans, and other supporting project data. SLATE also provides space use analyses of EPA buildings and allows EPA to do long- term planning for buildings and facilities budgets. FMSD's Standards of Behavior for Strategic Lease and Asset Tracking Enterprise (SLATE), Section 2.5, Integrity, states, "Employees shall protect the integrity and quality of information." Section 2.5.1 requires employees to "[rjeview the quality of information as it is collected, generated, and used to make sure it is accurate, complete and up-to-date." 13-P-0162 14 ------- Personnel Information in SLATE Not Accurate As of April 2012, SLATE had incorrect personnel information for 13 of the 16 facilities sampled, or 81 percent (table 6). Personnel information is the number of employees and other non-federal staff in each facility. Personnel numbers include full-time EPA employees, Stay-in-Schools, Senior Environmental Employment enrollees, and on-site contractor personnel. Table 6: Comparison of personnel information for 16 sampled facilities Personnel Per facility Per over/(under) Location and building name managers SLATE in SLATE % HQ-Ariel Rios Federal Building 1,649 1,649 - - HQ-1310 L Street 500 570 70 14% HQ-Ronald Reagan Building 1,137 1,137 - - HQ-Colorado Building 17 20 3 18% R 1-John W. McCormack Building 697 845 148 21% R 2-Ted Weiss Federal Building 851 851 - - R 2—City View Plaza, Puerto Rico 63 60 (3) (5%) R 3-1650 Arch Street 1,084 1,133 49 5% R 5-Ralph H. Metcalfe Federal Building 1,390 1,558 168 12% R 5-National Vehicle & Fuel Emissions 282 235 (47) (17%) R 5-Norwood Professional Building 115 85 (30) (26%) R 6-Fountain Place 1,084 1,052 (32) (3%) R 7-901 North 5th Street 631 700 69 11% R 9-75 Hawthorne Street 987 1,160 173 18% R 9-Los Angeles Field Office 29 25 (4) (14%) R 10-Park Place Building 685 669 (16) (2%) Total 11,201 11,749 548 4.89% % of facilities not updated in SLATE 81.25% Source: Data from SLATE and facility managers as of April 13, 2012. FMSD does not require facility managers to update personnel information on a systematic or regular basis and there is no quality assurance or verification of this data in SLATE. The Chief of FMSD's Architecture, Engineering and Asset Management Branch stated that personnel information is entered into SLATE at the time the Occupancy Agreement/Lease is signed with GSA, and it is only updated when an office is realigned or is in the process of being moved or relocated. In addition, the FMSD SLATE project manager said that FMSD does not track personnel numbers in SLATE because it is a "moving target." Further, facility managers determine personnel numbers in a variety of different ways, including: • Information Services Information System-regionally developed system • Systematic basis when in the process of a move • Employee directory database • Roster database 13-P-0162 15 ------- USF Information in SLATE Not Accurate As of April 2012, SLATE had incorrect USF information for 5 of the 16 facilities sampled, or 31 percent (table 7). Table 7: Comparison of USF information for 16 sampled facilities Location and building name USF per FMSD USF per SLATE USF over/(under) in SLATE % HQ-Ariel Rios Federal Building 446,324 446,324 - - HQ-1310L Street 123,279 135,901 12,622 10% HQ-Ronald Reagan Building 230,664 230,664 - - HQ-Colorado Building 9,667 9,667 - - R 1-John W. McCormack Building 224,261 224,261 - - R 2-Ted Weiss Federal Building 243,057 269,834 26,777 11% R 2-City View Plaza, Puerto Rico 19,700 19,700 - - R 3-1650 Arch Street 268,968 268,968 - - R 5-Ralph H. Metcalfe Federal Building 325,128 - (325,128) (100%) R 5-National Vehicle & Fuel Emissions 59,100 59,100 - - R 5-Norwood Professional Building 28,594 28,594 - - R 6-Fountain Place 239,130 239,130 - - R 7-901 North 5th Street 182,554 182,554 - - R 9-75 Hawthorne Street 204,014 253,919 49,905 24% R 9-Los Angeles Field Office 13,907 13,813 (94) (1%) R 10-Park Place Building 154,006 154,006 - - Total 2,772,353 2,536,435 (235,918) (8.51%) % of facilities not updated in SLATE 31.25% Source: FMSD and SLATE as of April 13, 2012. Similar to SLATE's personnel information, the Chief of FMSD's Architecture, Engineering and Asset Management Branch said that USF information is entered into SLATE at the time the Occupancy Agreement/Lease is signed with GSA, and there is no quality assurance or verification of this data in SLATE. In addition, this information is updated only when the lease is renewed or when EPA gives up space. FMSD provided the following examples of where USF was not updated in SLATE: • San Francisco office—It was under a third lease extension due to the design/construction for a succeeding lease. • Los Angeles field office—A reduction in space is planned, and the realty specialist was waiting for information on the reduction's scope. • New York office—It was not updated as GSA re-measured the building. • 1310 L Street building at HQ, and Chicago facilities—It was not timely updated due to an inadvertent oversight. Accurate information on personnel and USF is a key component in determining under-utilized office space and in determining office requirements when an office space is realigned or relocated. For our calculation of under-utilized space for our 16 sampled offices, we had to obtain the updated personnel information for the 16 13-P-0162 ------- audit from the regional facility managers of the 16 sampled facilities and updated information on USF from the Chief of FMSD's Architecture, Engineering and Asset Management Branch. Inaccurate personnel and USF data in SLATE on GSA-owned/leased offices hampers EPA's ability to make informed decisions for managing its facilities. Number of Facilities in SLATE Not Accurate As of April 2012, information in SLATE showed 172 EPA facilities but showed one of those facilities as a "Nationwide" facility with no data. This should not be considered a facility for listing purposes. Another line item, "La Plaza Building (Off Campus Facilities)," in Region 9, was a duplicate entry; it was a summary of five offices also listed. These two line items should not be listed in SLATE, and the total number of facilities in SLATE should have only been 170. Conclusion EPA lacks sufficiently accurate, complete, and up-to-date information on the number of personnel and USF in SLATE for its GSA-owned/leased offices. If this information is not updated on a systematic basis, EPA's ability to make informed decisions for managing its facilities is hampered. Recommendations We recommend that the Assistant Administrator for Administration and Resources Management: 4. Require that personnel information be consistently tracked and updated in EPA's designated real property management system on an annual basis or more often if needed. 5. Require FMSD to update USF information whenever a change in office space is made. Agency Response and OIG Evaluation The Agency concurred with the findings and recommendations, and provided milestone dates for the proposed corrective actions. The Agency's full response is in appendix D. The Agency concurred with recommendation 4 and stated that OARM is developing a process whereby facility mangers will be required to update personnel data in the designated real property asset management system. SLATE is no longer an active system. FMSD staff will provide oversight to ensure updates are provided. The corrective action is expected to be 13-P-0162 17 ------- completed by December 2013. We agree with the Agency's corrective action for recommendation 4. The Agency concurred with recommendation 5 and stated that OARM has an internal policy to update the usable square feet of any agency facility once the EPA assumes or releases occupancy of space. F acility managers will update the usable square feet which will be audited by FMSD staff. The corrective action is expected to be completed by December 2013. We agree with the Agency's corrective action for recommendation 5. 13-P-0162 18 ------- Status of Recommendations and Potential Monetary Benefits RECOMMENDATIONS POTENTIAL MONETARY BENEFITS (In $000s) Rec. No. Page No. Subject Status1 Action Official 12 Assess utilization of GSA-owned and leased facilities and relocate staff as warranted to reduce under-utilized space. 12 Develop space guidelines for support spaces and assess the number and size of support spaces needed at the time of a new or renewal lease. 12 Require the Office of Acquisition Management, in conjunction with the Office of Administration, to develop and enforce a policy that requires contracting staff ensure approval for on-site contractor personnel is obtained from the responsible office and documented in the contract file. Planned Completion Date Claimed Amount Ag reed-To Amount Assistant Administrator for December Administration and 2022 Resources Management Assistant Administrator for December Administration and 2013 Resources Management Assistant Administrator for September Administration and 2013 Resources Management 17 Require that personnel information be consistently tracked and updated in EPA's designated real property management system on an annual basis or more often if needed. Assistant Administrator for December Administration and 2013 Resources Management 17 Require FMSD to update USF information whenever a change in office space is made. Assistant Administrator for December Administration and 2013 Resources Management O = recommendation is open with agreed-to corrective actions pending C = recommendation is closed with all agreed-to actions completed U = recommendation is unresolved with resolution efforts in progress 19 13-P-0162 ------- Appendix A Details on Scope and Methodology We reviewed EPA's Metropolitan Architects and Planners contract for information on EPA contract space reduction activities. We also reviewed EPA's Asset Management Plan, EPA's Real Property Cost Savings and Innovation Plan, EPA's Space Acquisition and Planning Guidelines, and draft Mobile Work Space Design Guidelines, to determine EPA's criteria and methodology for managing space and identifying and realizing real property cost savings. We reviewed space consolidation efforts such as the 2009 EPA Rent Efficiencies Report, EPA's master rent avoidance charts, and the Metropolitan Architects and Planners' October 2005 final report US EPA Nationwide Rent Analysis. We verified EPA's rental space and cost reduction accomplished to its records. We verified GSA's Rent-On-Web annual operating costs in SLATE to billings in GSA's Rent-On-Web website. We also obtained updated head counts from regional facility managers and USF from FMSD. We reviewed fiscal years 2010 and 2011 Integrity Act Annual Assurance Letters for EPA's OARM and Office of the Administrator to determine whether those letters identified any weaknesses related to property and space reduction. The letters did not identify such weaknesses. Methodology to Select Sample and Calculate Cost Savings To select a sample of EPA facilities for review, we: • Obtained a listing of facilities in SLATE. We determined that there were 170 facilities that EPA used as of November 2011 at an annual operating cost of approximately $279 million. • Analyzed the 170 EPA facilities. We excluded laboratories because, in July 2011, the U.S. Government Accountability Office reviewed laboratories that mainly consisted of EPA-owned facilities. We also excluded warehouses, parking spaces, storage rooms, and child care facilities because they had low annual costs. We used the remaining 92 owned/leased and EPA special use offices for the audit universe. These facilities have total annual operating costs of approximately $206 million, which is approximately 74 percent of the annual operating cost of the 170 facilities. • Using GSA's recommended federal benchmark of 190 USF per person, selected sample offices for review that had a potential annual cost savings of over $225,000. This came to 16 offices with total operating costs of approximately $135 million and potential annual savings of $31.8 million. • Calculated under/over-utilized space for the 16 sampled offices based on EPA's internal standard of 210 USF per person and GSA's federal benchmark of 190 USF per person (appendix B). 13-P-0162 20 ------- To calculate potential cost savings, we: • Divided office USF by number of personnel and compared it to the EPA rate of 210 per person, thus arriving at under-utilized USF per person. • Multiplied under-utilized USF per person by number of personnel to arrive at total under- utilized USF for the building. • Divided annual operating cost by office USF to arrive at operating cost per USF. • Multiplied total under-utilized USF for the building by annual operating cost per USF to arrive at potential cost savings. Prior Reports In January 2009, the OIG issued Report No. 09-P-0080, Congressionally Requested Report on EPA Staffing Levels and Total Costs for EPA Facilities. This report provided Congress with information on staffing levels, rental/lease fees, and utility and security costs for all EPA facilities and locations where EPA incurred employee-associated costs. We reviewed the U.S. Government Accountability Office's July 2011 Report No. GAO-11-347, To Better Fulfill Its Mission, EPA Needs a More Coordinated Approach to Managing its Laboratories, to determine whether EPA laboratories should be included in our audit. As a result of that report, we decided to exclude laboratories. 13-P-0162 21 ------- Appendix B Calculations for Under-Utilized Space and Excess Cost for 16 Sampled Facilities Using EPA's 210 USF per person Location and building name USF Personnel Current Under- utilized Total under- utilized USF Annual operating Excess annual operating cost USF per person cost cost per USF HQ-Ariel Rios Building 446,324 1,649 271 61 100,589 $25,130,427 $56.31 $5,664,167 R 2-Ted Weiss Building 243,057 851 286 76 64,676 19,824,229 81.56 5,274,975 R 1-John W. McCormack 224,261 697 322 112 78,064 12,497,786 55.73 4,350,507 R 7-901 North 5th Street 182,554 631 289 79 49,849 7,110,492 38.95 1,941,619 R 5-Ralph H. Metcalfe 325,128 1390 234 24 33,360 13,023,915 40.06 1,336,402 R 3-1650 Arch Street 268,968 1,084 248 38 41,192 7,262,002 27.00 1,112,184 R 10-Park Place Building 154,006 685 225 15 10,275 6,727,108 43.68 448,812 R 2-City View Plaza, PR 19,700 63 313 103 6,489 1,193,687 60.59 393,169 HQ-Colorado Building 9,667 17 569 359 6,103 547,545 56.64 345,674 R 6-Fountain Place 239,130 1,084 221 11 11,924 4,928,459 20.61 245,754 R 9-Los Angeles Field Off 13,907 29 480 270 7,830 326,437 23.47 183,770 HQ-310 L Street 123,279 500 247 37 18,500 1,216,534 9.87 182,595 R 5-Norwood Prof. Building 28,594 115 249 39 4,485 618,300 21.62 96,966 R 5-Nat'l Vehicle & Fuel 1 59,100 282 210 Utilized - 2,345,783 39.69 - R 9-75 Hawthorne Street2 204,014 987 207 Utilized - 10,692,122 52.41 - HQ-Reagan Building J 230,664 1,137 203 Utilized - 18,463,553 80.05 - Total 2,772,353 11,201 433,336 $31,908,379 $21,576,594 Source: Source: OIG analysis of EPA data provided by FMSD and regional facility managers. 1 Due to using 210 USF and increased personnel head count, the audit result disclosed that it is utilized. 2 Due to using 210 USF and decreased USF and personnel head count, the audit result disclosed that it is utilized. 3 Due to using 210 USF, the audit result disclosed that it is utilized. Descriptions for above table Column description Calculation formula Usable square feet (USF) Provided by FMSD Personnel Provided by regional facility managers Current USF per person Usable square feet divided by personnel Under-utilized USF per person Current USF per person minus 210 USF Total under-utilized USF Under-utilized USF per person times personnel Annual operating cost Obtained from SLATE as of 2/1/2012 Annual operating cost per USF Annual cost divided by USF Excess annual operating cost due to total under-utilized USF Annual operating cost per USF times total under-utilized USF 13-P-0162 22 ------- Using 190 USF per person Location and building name USF Net usable plus circulation square feet Personnel USF Undercover) utilized Per person HQ-Colorado Building 9,667 6,434 17 378 188 R 2-Ted Weiss Federal Building 243,057 187,542 851 220 30 HQ-Ariel Rios Federal Building 446,324 330,888 1,649 201 11 R 1-John W. McCormack Building 224,261 128,250 697 184 (6) R 5-Ralph H. Metcalfe Federal Building 325,128 224,855 1,390 162 (28) R 7-901 North 5th Street 182,554 110,668 631 175 (15) HQ-1310 L Street 123,279 87,635 500 175 (15) R 3-650 Arch Street 268,968 185,282 1,084 171 (19) R 9-75 Hawthorne Street 204,014 146,321 987 148 (42) R 6-Fountain Place 239,130 155,253 1,084 143 (47) HQ-Ronald Reagan Building 230,664 167,536 1,137 147 (43) R 10-Park Place Building 154,006 93,788 685 137 (53) R 2—City View Plaza, Puerto Rico 19,700 Information not provided 63 N/A N/A R 5-National Vehicle & Fuel Emissions 59,100 Information not provided 282 N/A N/A R 5-Norwood Professional Building 28,594 Information not provided 115 N/A N/A R 9-Los Angeles Field Office 13,907 Information not provided 29 N/A N/A Total 2,772,353 11,201 Source: Data provide by FMSD and facility managers as of February 2012. Descriptions for above table Column description Calculation and Source Usable square feet Provided by FMSD Net usable plus circulation square feet Offices, cubicles, conference rooms, and hallways Personnel Provided by facility managers USF per person Net use plus circulation square feet divided by personnel Undercover) utilized at 190 USF per person USF per person minus 190 13-P-0162 23 ------- Appendix C Cost of Housing Contractors On-Site at 16 Sampled Facilities Location and building name USF Personnel Current USF per person No of USF for %of USF for Annual operating contractors cost cost for contractors R 1-John W. McCormack 224,261 697 322 53 17,066 7.61% 12,497,786 951,081 R 2-Ted Weiss Building 243,057 851 286 79 22,594 9.30% 19,824,229 1,843,653 R 2-City View Plaza, PR 19,700 63 313 - - 0.00% 1,193,687 - R 3-1650 Arch Street 268,968 1,084 248 82 20,336 7.56% 7,262,002 549,007 R 5-Ralph H. Metcalfe 325,128 1390 234 58 13,572 4.17% 13,023,915 543,097 R 5-Nat'l Vehicle & Fuel 59,100 282 210 36 7,560 12.79% 2,345,783 300,026 R 5-Norwood Prof. Building 28,594 115 249 7 1,743 6.10% 618,300 37,716 R 6-Fountain Place 239,130 1,084 221 77 17,017 7.12% 4,928,459 350,906 R 7-901 North 5th Street 182,554 631 289 11 3,179 1.74% 7,110,492 123,723 R 9-75 Hawthorne Street 204,014 987 207 59 12,213 5.99% 10,692,122 640,458 R 9-Los Angeles Field Off 13,907 29 480 3 1,440 10.35% 326,437 33,786 R 10-Park Place Building 154,006 685 225 40 9,000 5.84% 6,727,108 392,863 Subtotal - contractors only 1,962,419 7,898 505 125,720 86,550,320 5,766,316 HQ-Reagan Building* 230,664 1,137 203 135 1 27,405 11.88% 18,463,553 2,193,470 HQ-Ariel Rios Building 446,324 1,649 271 117 1 31,707 7.10% $25,130,427 1,784,260 HQ-1310 L Street* 123,279 500 247 51 1 12,597 10.22% 1,216,534 124,330 HQ-Colorado Building 9,667 17 569 - - 0.00% 547,545 - Subtotal - contractors & nonfederal personnel 809,934 3,303 303 71,709 45,358,059 $ 4,102,060 Total 2,772,353 11,201 808 197,429 $131,908,379 $ 9,868,376 Source: OIG analysis of data in SLATE and from EPA sampled office facility managers as of February 2012. 1 Calculation includes contractors as well as Senior Environmental Employment enrollees and others as FMSD was unable to provide breakdowns. Descriptions for above table Column description Calculation formula Current USF per person USF divided by personnel No. of contractors Provided by facility managers USF for contractors Current USF per person times number of contractors % of USF for contractors USF for contractors divided by USF Annual operating cost Obtained from SLATE as of 2/1/2012 Annual cost for contractors Annual operating cost times percentage of contractors 13-P-0162 24 ------- Appendix D Agency Response to Draft Report PROTECTION AGENCY WASHINGTON. D.C. 20460 tfov - 5 i:: SUMHM §1 BJKC 1 • Response to Drift Report: EPA Cm Further Reduce Space in Under-Utilized Facilities , / / FROM: fiwift R l-lnsfilre A«eie#a«l &.titmmmirtatr%e / ' V I Thank you for the opportunity to review and comment on the draft report (Project No. OA- FY12-0056), dated October 4, 2012. In the attachment we are providing clarification of three issues pertaining to factual accuracy and a discussion regarding our concurrence or nonconcurrence with your five proposed recommendations. If you have any questions pertaining to this response, please contact Renee Page, Director, Office of Administration, at (202) 564-8400. Attachment cc: Renee Page Office of lr, spec: or General 25 13-P-0162 ------- Office of Administration and Resources Management Response to Draft Report: Project No. OA-FY12-0056 EPA Can Further Reduce Space in Under-Utilized Facilities Issues pertaining to factual accuracy Report language in Executive Summary and on page 12: "EPA omitted reporting in SLATE an entire Region 5 building (325,128 USF)." According to the methodology on page 17, you obtained a listing of facilities in SLATE as of November 2011, and determined that the Ralph H. Metcalfe Federal Building was not included. This is an incorrect conclusion. An April28, 2011, SLATE report already included the building in the inventory. Report language on page 11: "Both GSA and EPA recognize that the average office space can be reduced to 60 square feet in upcoming years." The referenced document containing the GSA's60 square foot number is the GSA'sJuly 2011 report, Workspace Utilization and Allocation Benchmark, as indicated on page 4 of the draft. This GSA document hypothesises that the 60 square feet could be achieved only through extensive use of alternative workspace arrangements, such as hoteling, home office and teleworking on a fulltime basis. The EPA's current policy limits telework to no more than two days per week and would therefore have to be modified. Such a significant change has already been the subject of extensive negotiation and delay. Hence, at this time, the EPA does not recognize that the average office space can be reduced to 60 square feet in upcoming years." Report language on page 8: "Also, EPA's 2011 draft New Mobile Work Space DesignGuidelines require a typical work station to be up to 60 USF and a telework station up to 30 USF per person; both are substantial space reductions from the 210 USF per person used in our analysis." The guideline numbers of 60 and 30 USF are not considered reductions from the 210 square feet per person number, which incorporates required space outside the actual workstation for circulation, filing, conferencing, collaboration and small meeting rooms. A reasonable design reduction from 210 square feet would be 175 square feet per person. Comments pertaining to concurrence or nonconcurrence with proposed recommendations Chapter 2 — "EPA Can Further Strive for Space Reduction" 1. Assess utilization of GSA-owned and leased facilities and relocate staff as warranted to reduce under-utilized space. OARM response: Concur Anticipated completion - ongoing The EPA's space consolidation efforts have been ongoing since 2007. OARM continues to identify options throughout program offices and the regions to do 26 13-P-0162 ------- work differently in support of the June 2010 Presidential Mem orandum, Disposing of Unneeded Federal Real Estate. To further this initiative and at the direction of the Administrator and Chief Financial Officer, OARM is implementing a plan to reduce the EPA's office space by 20 percent at its leased facilities. The redesign plan has already been implemented in the new Kansas City Regional Office and plans are underway to incorporate collaboration, greater mobility and advanced technology into the design of the new Region 9 offices. In Headquarters, several pilot projects are in development that will also demonstrate open design principles. Inaddition, we are in the process of relocating two offices within the Office of the Administrator that will release more than 19,000 square feet of leased office space and realize almost $lMin annual rent avoidance beginning in FY2013. 2. Develop space guidelines for support spaces and assess the number and size of support spaces needed at the time of a new or renewal lease. OARM response: Concur Anticipated completion - December 2013 The agency has guidance per the July 2004 Space Acquisition and Planning Guidelines that describe the approximate size and frequency of special spaces typically found at EPA facilities. OARM will revise the October 2011 draft New Mobile Work Space Design Guidelines to include support space guidance that will be used for new and renewal leases. 3. Require the Office of Acquisition Management, in conjunction with the Office of Administration, to develop and enforce a policy that requires justification for contractor personnel to utilize on-site work space at EPA facilities and confirmation of the justification by FMSD and regional facility managers. OARM response: Does Not Concur Decisions regarding on-site contractors are strictly based on the work being performed. Rather than developing and enforcing a policy, OARM believes that a more prudent approach would be to require the EPA's contracting staff to ensure that approval for on-site contractor performance is obtained from the responsible office and documented in the contract file. Chapter 3 "Personnel and Usable Square Feet Data in SLATE Not Updated Timely" 4. Require that personnel information be consistently tracked and updated in EPA's designated real property management system and SLATE on an annual basis or more often if needed. OARM response: Concur Anticipated completion - December 2013 OARM is developing a process whereby facility mangers will be required to update personnel data in the designated real asset management system. Facilities 13-P-0162 27 ------- Management and Services Division staff will provide oversight to ensure updates are provided. SLATE is no longer an active system. 5. Require FMSD to update USF information whenever a change in the office space is made. OARM response: Concur Anticipated completion - December 2013 OARM has an internal policy to update the usable square feet of any agency facility once the EPA assumes or releases occupancy of space. As noted in the response to recommendation 4 above, facility managers will update the usable square feet which will be audited by FMSD staff. 13-P-0162 28 ------- Appendix E Distribution Office of the Administrator Assistant Administrator for Administration and Resources Management Director, Office of Acquisition Management, Office of Administration and Resources Management Director Office of Administration, Office of Administration and Resources Management Agency Follow-Up Official (the CFO) Agency Follow-Up Coordinator General Counsel Associate Administrator for Congressional and Intergovernmental Relations Associate Administrator for External Affairs and Environmental Education Audit Follow-Up Coordinator, Office of Administration and Resources Management 13-P-0162 29 ------- |