Meeting the NDAA's real property reduction requirements

Much of the conversation around the 2019 National Defense Authorization Act centered around a proposal to massively cut Department of Defense spending. While an initial push advocated for drastic measures, such as eliminating and consolidating agencies like the Defense Information Systems Agency, the legislation was refocused and no longer calls for drastic cuts. However, DOD agencies are not completely off the hook. In fact, they still have quite an undertaking ahead.

The legislation now calls for increasing the efficiency and effectiveness of DOD enterprise business operations "through reductions, eliminations, or improvements" that are related to "civilian resources management, logistics management, services contracting, or real estate management.”

Achieving a cost savings of 25 percent is significant -- and challenging. It is likely that defense agencies may have to get creative to hit such a lofty target. That does not mean that they are left without recourse, though, as there are areas where significant cost savings have proved possible. Chief among these is real property, an area specifically mentioned in the language of the NDAA.

Defense leaders should consider the impact more efficient records and information management storage space could have on their agencies. Offsite leasing will enable agencies to achieve higher density, an approach that can result in an average of a 50 percent reduction in storage space requirements. Simply put, this means defense agencies can reduce their physical real property records storage footprint by half, for the same price as using their traditional onsite facilities. Reductions of onsite storage also enable agencies to repurpose their real property for more mission-oriented activities. Moving records to offsite facilities with integrated tracking and transparency metrics helps to drastically improve overall accessibility and searchability. Moreover, moving records out of the office frees up valuable space for employees and relinquishes them from many of the burdensome oversight and management responsibilities that on-site storage necessitates.

Typically, the first step in deciding whether to undertake a records storage transition is conducting an internal assessment to determine the best path forward. However, the NDAA has already made this determination a requirement for agencies, mandating Congressional reports on deficits and surpluses related to real property. By doing so, Congress has effectively already set agencies on the path to real property cost savings.

So how can defense agencies prepare themselves to meet this reporting requirement? Collaborating with internal stakeholders to identify the current onsite records portfolio is a great place to start. Agencies should identify the current situation, duplicative or cost-prohibitive practices and savings opportunities -- ensuring that information is as accurate as possible. This assessment will also help agencies wrap their arms around the current cost of their records storage program, assess how much office or warehouse space they are currently using for records storage and at what cost and, consequently, how much potential for real property savings are present.

Next, defense agencies should leverage the expertise and institutional knowledge of government resources at their disposal – including agency senior real property officers, the Office of Management and Budget and the General Services Administration -- to help them predict what real property footprint changes will be required to meet NDAA metrics. It is essential that SRPOs take into consideration the fact that any facility must be secure, optimally efficient and fully compliant with the full scope of federal regulations. SRPOs must consider all options that meet these stringent requirements and should engage external stakeholder groups, specifically the private sector, to help identify available options, such as offsite leasing. In fact, the National Archives and Records Administration, the oversight agency for federal records, maintains a list of approved commercial facilities that agencies looking at an offsite strategy can consider.

Despite the belt tightening that has been prescribed for defense agencies, they are not left without options. With offsite self-managed or full-service solutions, agencies can reduce their current storage costs, while meeting their requirements. These offsite facilities also help to limit risks associated with lost, damaged or stolen records, enhancing records retention practices and making information readily accessible for federal employees. As defense agencies look to meet the current 25 percent cost cutting metric, real property reform will be synonymous with real progress.