Feds say they can slash 30% of their office space, save billions after remote work empties buildings

The federal landlord agency says it can deliver a “telework dividend” and slash government office space by as much as 30% over the coming years, saving billions of dollars a year, but the effort will take an initial investment from Congress.

Robin Carnahan, who heads the General Services Administration, said she is intently focused on “right-sizing” Uncle Sam’s square footage as employers and workers rethink where and how to deliver services.

“We [see] an opportunity to reduce the government footprint by up to 30%. That would save $60 billion over 10 years,” she told the House Oversight and Accountability Committee on Tuesday. “This is an important moment for the American people to reap billions of dollars in future savings, but it can only happen if we work together.”

Republicans, who organized the hearing, praised the commitment but said they are not sold on the wonders of telework for federal employees.

“The bottom line is this: The Biden administration can’t have it both ways at taxpayers’ expense,” said Rep. James Comer, Kentucky Republican and committee chairman. “You either bring employees back to work to improve productivity and service, or you fully right-size office space and hand taxpayers their telework dividend.”

He said GSA’s headquarters is at just 11% occupancy, which often includes Ms. Carnahan’s office.

From March 28, 2022, through March 31, 2023, she teleworked for 121 weekdays, or 55% of her time on the job. The rest of her time was split between her Washington office and official travel.

GSA oversees 370 million square feet of space. About a quarter of that is in Washington, and the rest is spread throughout the country. Some space is leased, but most is owned by the federal government.

Mr. Comer pointed to a study that found the government spent $3.3 billion on new furniture since the start of the pandemic, when many offices were shuttered.

“There needs to be a culture shift in the federal government,” the chairman said.

Lawmakers wondered whether employees are bilking the government by claiming a 32% enhanced pay rate for jobs listed as working in the District, even though they are working remotely.

Ms. Carnahan said she needs Congress to give her more money so she can save money.

“You can’t get rid of the old building that you know is going to save you a lot of money if there is not a way to, upfront, to have money to invest in the improvement of the one you’re going to keep,” she said. “The single biggest impediment … is access to upfront money.”

She said GSA is an example. Over the past decade, it moved from two buildings and consolidated everyone in a Washington area headquarters. She said that reduced the square footage by 40% and saved hundreds of millions of dollars.

“We know how to do this. What we need is the flexibility and certainty about funding to get it done,” she said.

Mr. Comer, though, pointed out another hurdle: Agencies are reluctant to give up space, particularly if it means sharing with others.

The Government Accountability Office said in a report last month on office occupancy that agencies were reluctant to share space with others because “it could lower their perceived standing as a cabinet-level agency.”

Even within departments, bureaus balked at sharing space inside their buildings. They wanted their own conference rooms or secure facilities.

Of 24 agencies surveyed, GAO found that none used more than half of its available square footage at its headquarters building. Seventeen of the agencies had less than 25% occupancy.

Departments have told GAO that they aren’t sure whether telework will last so they want to keep space as a contingency.

Republicans said that seems like the worst of both worlds, at least from taxpayers’ perspective.

“What I want is for people to come back to work, and if we don’t need them, we need to reduce our workforce,” said Rep. Gary Palmer, Alabama Republican.

Rep. Jake LaTurner, Kansas Republican, said his constituents often struggle to get government workers to answer their questions and want to talk face-to-face in an office to work out their problems.

“We’re paying for office space for these folks to show up to work every day,” he said.

Ms. Carnahan defended telework, at least at GSA. She said the agency “leaned into” the idea well before the pandemic.

She said 40% of her workforce is fully remote and others are hybrids who show up some days but not others.

She said building managers need to be in the office every day, but a project manager needs to be on a job site and technology teams are “fully remote” because they can work anywhere in the country.

Ms. Carnahan said she couldn’t speak for other agencies but GSA productivity has increased and customer satisfaction scores have risen nearly a point, from 3.0 to 3.9 on a 5-point scale.

“What we found is that we can increase productivity and we can save money by reducing our real estate footprint, but it really depends on the job,” Ms. Carnahan said.

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