The General Services Administration spent nearly $50 million it couldn’t recover by renting space it didn’t need in the D.C. region, in just one year, according to an audit recently released by the agency’s inspector general.
Among the audit’s findings: the GSA wound up renting empty office space in 19 buildings across Greater Washington in 2016, in many cases tied to larger consolidation plans; was left on the hook after agencies backed out of new leases for space they didn’t need; and failed to protect itself from losses by planning ahead. The IG’s report, released March 20, focused specifically on more than two dozen leases in the agency’s D.C. region, which accounts for more than 27 percent of the GSA’s larger, 187.9 million-square-foot leased portfolio.
“Accordingly, the financial performance of its leasing program is critical,” the IG audit noted.
The GSA is one of the largest drivers in Greater Washington’s commercial real estate market, and headquarters deals for major agencies like the Department of Homeland Security and Health and Human Services tend to be needle movers. The agency has been under steady pressure from Congress to make smarter leasing decisions, especially in the D.C. region, and the IG’s audit highlights, in part, some of the pitfalls the agency encountered in trying to slim down.
