The National Strategy for the Efficient Use of Real Property: Part 3 - the What

US Government Efficiency Solution for Real Property Management Miniseries

Introduction

This miniseries calls for the U.S. government to establish a National Strategy for the Efficient Use of Real Property. Part 1, How to Generate a National Strategy, detailed the process for establishing and maintaining this strategy. Part 2, The Why, explained the imperative for a strategy. This part covers “the what”—that is, the components the strategy must include. The final part will address “the who”—that is, the stakeholders needed to establish and implement it.

Background

The Office of Management and Budget’s (OMB) Memorandum M-20-10, an Addendum to the 2015 National Strategy for the Efficient Use of Real Property, expanded the strategy’s scope to include the federal government’s entire real property portfolio. The addendum noted that the original strategy failed to:

• Address persistent data quality issues,

• Establish a role for capital planning to prioritize limited investment funds, and

• Provide a vision linking budget formulation to execution and program outcomes.

Previous efforts to improve federal real property management have been prescriptive, such as the 2015 strategy’s focus on “freezing” and then “reducing” the government’s office and warehouse footprint. These efforts, intended as a starting point, failed to deliver results, necessitating the 2020 addendum.

The 2020 Addendum

The 2020 addendum, Optimizing the Portfolio to Support the Mission and Manage Costs, introduces a management framework with three strategies:

• Strategy 1: Capital Planning

• Strategy 2: Lifecycle Execution

• Strategy 3: Root Cause Analysis

If implemented, these strategies would enable management to:

• “Conduct a comprehensive assessment of current and future mission capability gaps in the portfolio and the capital required to address them;

• Establish a common, government-wide business environment where agencies adopt shared business processes, standards, and IT tools to promote better management practices, eliminate redundancy, and prevent unnecessary expenditure of resources; and

• Identify legislative reforms to provide agency leadership with the authority to prioritize mission support and cost efficiency.”

National Academies’ Recommendations

In 2023, the National Academies released Strategies to Renew Federal Facilities, identifying root causes of the U.S. government’s failure to efficiently manage its real property inventory and offering five recommendations:

• Implement an ISO 55000-conforming Asset Management (AM) Framework for federal real property management to optimize assets supporting mission achievement through a responsive, risk-informed approach.

• Use the AM Framework to plan and coordinate real property capital and operating expenses, improving lifecycle management, lowering costs, and increasing efficiency.

• Align real property management activities with agency performance objectives through AM Framework developed strategies to maximize the use of assets and limited resources.

• Develop decision-support metrics and capabilities within the AM Framework to evaluate investment productivity and expand risk management.

• Leverage expanded authorities (e.g., working capital funds, revolving funds, and user-pay models) to improve investment productivity and support risk-informed trade-offs between capital and operating expenses.

The AM Framework

Previous national strategies were prescriptive, focusing on controlling inventory rather than managing risk. The AM Framework, recognized as an industry best practice in Strategies to Renew Federal Facilities and the AMP Newsletter, aligns with ISO 55000 standards. Its value lies not in ISO compliance but in its focus on controlling mission execution risk through asset investment decision-making. The “what” of the National Strategy for the Efficient Use of Real Property must be a universal decision-making framework that:

• Demonstrates clear alignment with agency authorities and mission,

• Aligns real property performance objectives with agency mission objectives,

• Establishes risk-based metrics correlating real property and agency performance objectives,

• Evaluates mission execution risks caused by real property performance in the context of investment decision-making,

• Coordinates budget, resource allocation, and work prioritization decisions and trade-offs,

• Guides execution of agency-level real property management strategies down to individual transactions executing the budget,

• Uses consistent performance metrics to develop and evaluate strategies and plans, assessing performance, risk, and change related to defined objectives, and

• Employs planned-versus-actual performance analysis to systematically improve real property management strategies, plans, objectives, performance, risk, and change management.

This performance-oriented, directional approach allows flexibility at the agency level to accommodate diverse mission needs and facility footprints. It builds on OMB M-20-03, Implementation of Agency-wide Real Property Capital Planning, and OMB M-20-10, managing enterprise risk through an ISO 55000-conforming AM Framework aligned with OMB Circular A-11, Preparation, Submission, and Execution of the Budget, and OMB Circular A-123, Management’s Responsibility for Enterprise Risk Management and Internal Control.

Principles of the AM Framework

The National Academies’ report makes this actionable through principles for implementing an ISO 55000-conforming AM Framework, as highlighted in the AMP Newsletter miniseries (linked below):

• Introduction

• Foundational Principles:

  • Data Integrity

  • Whole Life-Cycle Cost Analysis

  • Portfolio Management

  • Accounting Transparency

• Operative Principles:

  • Mission Alignment

  • Facility Performance

  • Decision-Making Alignment and Accountability

  • Operational Readiness

• Formative Principles:

  • Performance-Budget Integration

  • Balance Sheet Analysis

• Forever Principle:

  • Facility Asset Management Maturity

• Activation and Conclusion

Conclusion

The “what” of the National Strategy for the Efficient Use of Real Property is not explicit performance objectives, such as reducing inventory by an arbitrary percentage or achieving a target condition index for facilities. Instead, it is the development of asset management capabilities. The strategy should implement a government-wide, objective, standards-based approach to defining and evaluating these capabilities, as provided by ISO 55000 standards. This aligns with recommendations in GAO-19-57, Federal Real Property: Agencies Could Benefit from Additional Information on Leading Practices, and the National Academies’ Strategies to Renew Federal Facilities.

Past strategies failed by offering simplistic solutions to complex problems. After more than a decade of effort, it is time to try a new approach. The National Strategy for the Efficient Use of Real Property must teach federal agencies to develop efficient, adaptable strategies tailored to their needs and dynamic conditions. The ISO 55000-based AM Framework, as detailed in the AMP Newsletter and supported by GAO and National Academies’ recommendations, achieves this by establishing a universal, risk-informed real property investment decision-making framework.

Written by Jack Dempsey | June 3, 2025

AMP Newsletter #125

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