Initial efforts to merge OPM and GSA cost more money, watchdog finds

First moves to consolidate authority normally under the Office of Personnel Management to the General Services Administration have ended up costing taxpayers more money, according to an inspector general report released by the House Committee on Oversight and Reform Aug. 7.

Until recently, authority to operate and maintain the Theodore Roosevelt Federal Building, which houses the OPM offices and the Federal Executive Institute, had been delegated to OPM.

In July 2019, GSA, which is tasked with overall federal property management, revoked that delegation at the request of then-acting OPM Director Margaret Weichert, as part of preparations to merge the majority of OPM operations under GSA.

Congress placed that merger on hold in fiscal year 2020 appropriations legislation, which stipulated that the agencies could take no further action until the National Academy of Public Administration had completed an analysis of the costs and benefits associated with the plan. NAPA has yet to complete that study.

Members of Congress want answers after an oversight organization's report that administration officials were given legal advice against the proposed merger of the Office of Personnel Management and General Services Administration. (Jacquelyn Martin/AP)

“OPM and GSA have expended a considerable amount of resources, both in time and personnel costs, to continue working toward a goal that may not be feasible given the current NAPA study. The delegation to operate and maintain the FEI was returned by GSA to OPM in July 2020. However, this was after GSA attempted to effectuate the transfer of the operation and maintenance and eventually asked OPM if it would like the delegation returned,” the IG report states.

“A year’s worth of time and effort was expended only to return the FEI to the same status. Further, continuing to pursue the return of operation and maintenance of the TRB to GSA, without a complete understanding of the costs associated with such a move, is fiscally irresponsible and places an additional burden on a financially strapped agency as well as the American taxpayer.”

According to the IG report, a preliminary analysis conducted by OPM before the delegation was revoked revealed that moving forward would increase OPM’s rent costs by approximately $4.2 million annually, on top of additional expenses.

“OPM has current, ongoing operation and maintenance contracts. Early termination of those contracts could result in approximately $10.2 million in contract termination fees. This results in an additional cost to the government and the American taxpayer of approximately $14.4 million, with $4.2 million representing an ongoing, annual payment increase,” the report states.

The report notes that OPM and GSA had yet to conduct assessments of the current office space needs of the agency, though such an assessment would be a premature “waste of resources,” if done prior to the planned issuance of the NAPA study in March 2021.

The report lends some credence to critics of the planned merger, who argued that the decision had been made without sufficient planning and assessments.

“While OPM finally received the delegation to operate and maintain the FEI again, this occurred only after OPM expended significant resources and incurred additional, unnecessary costs,” the report said.

“GSA continues to work toward the end goal of resuming responsibility for the TRB, despite the evidence supporting that it would not be in the government’s or taxpayer’s best interest.”

The IG recommended that OPM and GSA complete documentation to formally return the delegation of authority for operating the Theodore Roosevelt Building to OPM, rather than the delayed rescission of that authority currently issued by GSA.

The report also recommended that OPM delay its feasibility study for OPM’s office space needs until after the NAPA study is completed.

OPM disagreed with such recommendations, claiming that the delayed rescission was sufficient and the feasibility study would help augment the NAPA study.

But the IG noted that both the feasibility study and the delegation of operating authority are contingent on the findings of the NAPA study and any further action Congress may choose to take based on the study’s results, making any action taken now premature and a potential waste of money.

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