GAO's Assessment of the Costs of Deferred Maintenance Across the Federal Government
House Subcommittee on Financial Services and General Government
2025-04-09
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Source: Congress.gov
Participants
Transcript
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Unknown (SPEAKER_08)
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Unknown (SPEAKER_08)
Welcome everyone here today. Subcommittee on Financial Services and General Government will come to order. This hearing is titled GAO's Assessment of the Costs of Deferred Maintenance Across the Federal Government. Members will have five legislative days within which to revise and extend their remarks and insert extraneous materials into the record. I now recognize the Government Accountability Office, also known as GAO, said it best when they described the federal government as, quote, one of the world's largest and most complex entities, end quote. I said for years that we do a lot of talking in D.C. about how much we owe, and rightfully so, with the national debt continuing to climb, but we do not do a good job of talking about what we own. The U.S. government needs a clear balance sheet to fully understand both our costs and our assets, and I'm hopeful that GAO can assist in that process. To help Congress and the executive branch manage the federal government's operations, GAO created a high-risk list. This list, which is updated every two years, identifies areas that are ripe for waste, fraud, and abuse, and mismanagement, or areas that need to be fundamentally overhauled. Disturbingly, the maintenance of federal properties went on this list in 2003 and has not come off in 22 years. The issue of deferred maintenance plays heavily into this problem. The federal real estate portfolio is significant. There are more than 285,000 buildings and structures with a replacement value of over $1.2 trillion. Over the last several years, the deferred maintenance in the federal real property portfolio has ballooned. For example, in FY 2020, GSA's deferred maintenance and repair costs were $2.53 billion. In FY 2024, GSA's estimated deferred maintenance and repair costs increased to $6.1 billion. The GSA is not unique in this. The National Archives and Records Administration, or NARA, owns and maintains real property assets, including assets independently of GSA. NARA's 24 financials suggest that it also has significant deferred maintenance issues.
In testimony before Congress, Postmaster General DeJoy stated in 2020 when he took office, the U.S. Postal Service has 31,000 facilities in horrible condition with more than $20 billion in deferred maintenance liabilities. As we look at the causes of deferred maintenance liabilities, they're not just about funding. Inflation and the cost of building and repair supplies can increase the overall cost. Building age is another factor. The median age for buildings within GSA's portfolio is 51 years. As assets age, they typically require more maintenance and repair. For example, by the time the asset reaches 30 years, it may require a replacement of windows, wiring, pipes, and air conditioning units. We need to understand this problem and think carefully about ways in which we can address this issue in a cost-effective manner in both the short and long term. This includes ensuring that agencies are taking care of the properties under their control. Proper oversight of maintenance contractors and ensuring they keep up with the basic maintenance of their properties and their possession can ensure that small problems do not become big problems. Finally, as we think about solutions, we need to be forward leaning. While selling properties is a great way to decrease the deferred maintenance backlog, we need to keep cost reduction and mission requirements at the center of these decisions. We should ensure that the federal government properly analyzes the cost of its real property and decisions make it its choices to dispose, replace, or repair properties in ways that reduce long-term costs while ensuring that federal agencies retain the facilities and resources required to conduct their missions effectively. I look forward to our discussion today. I now recognize Mr. Polkan, who is serving as ranking member today for his opening statement. Thank you, Mr. Chairman.
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Unknown (SPEAKER_01)
And wrong one. I'm going to switch it over here. All right, how you doing? I just want to thank Mr. Moroney for testifying today on deferred maintenance across the federal government. I look forward to hearing your thoughts on how the federal government can address these issues. Unfortunately, I did not think this is a discussion on deferred building maintenance as the most relevant topic for one of this subcommittee's first public hearings of the year. I recently hosted several town halls throughout my district and heard from people across Wisconsin. In each of these town halls, my constituents raised serious objections to what the Trump-Musk administration is doing. I'm not sure how many of my colleagues in the majority have held their own in-person town halls, but the message at each has been very clear. People are rightfully worried about an administration that is causing chaos both at home and abroad. They're worried about an administration that is run by and for billionaires, not working families. We have corruption when the richest man in the world, Elon Musk, is in charge of cutting federal agencies and services and then receiving another $6 billion in federal contracts on top of over $20 billion he's already received.
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