Federal agencies have been ordered to implement a “Freeze the Footprint” policy for federal real estate. This policy applies to domestic space “predominately used for offices and warehouses.”

In a memo to agency heads, Danny Werfel, OMB Controller, said the policy prohibits agencies from increasing “the total square footage of their domestic office and warehouse inventory compared to the 2012 baseline.” An agency’s 2012 baseline will be based on FY 2012 Federal Real Property Profile (FRPP) data, FY 2012 GSA Occupancy Agreements (OAs), and FY 2012 agency leasing agreements.

Writing in an OMB website blog, Werfel said the new guidance expands the president’s 2010 directive that set a goal to reduce real estate costs by $8 billion, including $5 billion through DoD’s BRAC and $3 billion in non-BRAC savings. Werfel reported that by the end of FY 2012 more than $8 billion in reductions had been identified.

Under the freeze policy, agencies must offset annually “any growth in total office and warehouse space” with “corresponding reductions” in total space. Any property declared “excess to GSA” will be considered an offset. Office and warehouse properties at closed military installations or those at installations realigned under the BRAC process will be considered an offset. “Mothballed” properties that are temporarily not occupied or used and Enhanced use leases (EULs are properties occupied by a non-governmental entity titled to the federal government) will not be considered offsets.

The memo advises agencies to work with GSA to better utilize existing space through consolidation, higher occupancy rates, and eliminating lease arrangements that “are not cost or space effective.” OMB encourages agencies to work with other agencies and GSA to identify co-locations and consolidation opportunities.

Agencies are directed to develop a three-year “Revised Real Property Cost Savings and Innovation Plan” by May 15, 2013. To do this, agencies will revise their 2010 plan based on a “narrower focus” and their three-year spending plan.

The plan will include 1) a spreadsheet identifying space acquisitions and offsets over a three-year period; 2) a description of strategies and policies to ensure mission and program priorities; and 3) a list of planned consolidations and co-locations, disposals, construction, projects, and leases. Each plan is to be certified as complete and accurate by the agency’s Senior Real Property Officer (SRPO) and Chief Financial Officer (CFO).

To monitor progress agencies will identify three planned consolidations, co-locations, and disposals that can be tracked. Agencies will also identify the total amount spent on federal and private-sector leasing costs, provide an analysis of actions taken to maximize or increase space utilization efficiency, and submit cost effective alternatives to acquisition of space. Other internal controls should include processes for coordinating office and warehouse space acquisitions with the CFO or SRPO and procedures to track all agency office and warehouse space increases and offsets.

Agencies will provide GSA an evaluation of compliance with the “Freeze the Footprint” policy 120 days after submitting the FRPP and annually thereafter. OMB will review agency compliance each year.