WASHINGTON, DC—In mid-February, the National Facility and Lease Strategy core team briefed the Asset Management Review Board about the agency’s efforts to scale the agency’s facility portfolio so that it better matches the needs of the agency. As such, the agency is working to reduce annual lease costs and invest in owned facilities. The agency funds leases and owned facility maintenance from one budget line item, Facilities Maintenance and Leases, to create budget transparency. Because of this, the combination of must pay lease costs and remaining funding to invest in owned facility maintenance is out of balance and unsustainable. Currently, 76% of the agency’s lease and owned facilities maintenance budget funds fixed costs associated with leases. When lease costs increase, it reduces our investment in owned facilities, exacerbating deferred maintenance. If we don’t take action, the agency is projected to consume 85% of its FSLM budget to fund leases within the next four years.

In response, the agency created the National Facility and Lease Strategy to increase investments in owned facilities by decreasing lease costs. In addition, the agency established an allocation framework to promote good decision-making and leadership financial accountability through lease cost containment. The strategy implementation support team represents multiple disciplines, including budget, leasing and engineering. This team will begin formal engagements with region and Research & Development investment boards to ensure leadership is well informed and making timely decisions that move the agency forward in reducing fixed costs. As part of the strategy, the agency is offering funding assistance to units to finance “Big Win” project opportunities that meet strategic objectives contributing to the reduction of fixed costs. Visit the National Facility and Lease Strategy SharePoint site (internal link) to learn more about this national effort and what is defined as a “Big Win” prospect.

Without support from leadership, the agency will continue to face funding constraints in leased and owned facilities maintenance. The National Facility and Lease Strategy was developed to address this budgetary concern, bring awareness to leadership of their impact on this program, and direct good decision making to right size space needs, reduce annual lease costs, and invest in owned facilities.