Introduction
DPW Space Acquisition
In February 2001, the Legislative Program Review and Investigations Committee authorized a study of the property acquisition and disposition function within the Department of Public Works (DPW). The study focus, as approved by the committee, was to determine if DPW is acquiring and disposing state property in compliance with relevant state laws and regulations and in a manner that effectively and efficiently meets the needs of state agencies.
In particular, the scope of study called for determining if:
· facilities are purchased, leased, and disposed in a timely manner;
· purchase, lease, and sale prices received by DPW are similar to private sector transactions;
· purchasing, leasing, and disposal processes are open and competitive; and
· occupying state agencies are satisfied with the suitability of the facilities.
The study scope did not include matters associated with designing, constructing, and managing facilities by state agencies authorized to carry on these activities either within DPW or outside the department's jurisdiction.
Although DPW was the central focus of this study, it was difficult to evaluate the department's performance without consideration of the roles played by other agencies involved in space acquisition. The Office of Policy and Management (OPM), the State Properties Review Board (SPRB), the Office of the Attorney General (OAG), and tenant agencies all play roles in the process and thus impact DPW's performance.
Over the years, procedural control after procedural control has been added to the state's space acquisition process in response to audits and concerns about safeguarding the state's interest and minimizing potential fraud and abuse. Such procedural controls are important and useful provided they are balanced with efficiency and effectiveness and do not cause agencies to lose sight of their basic mission. The cumulative result of these well-intended procedural controls is a process that is complex, cumbersome, time-consuming, and potentially costly to the state. These delays impede timely space delivery and may discourage competition for government real estate transactions.
As part of its study, the program review committee conducted an in-depth case file review of active DPW leases and recent real estate transactions. To conduct a more comprehensive evaluation of the processes, the committee examined related case files maintained by the Office of Policy and Management as well as the State Properties Review Board. The program review committee believes involvement of all the existing major players is essential. However, streamlining the process is critical and internal controls are lacking in very crucial spots.
The following report contains the committee's findings and recommendations for the space acquisition and disposal function. While most of the findings and recommendations relate to DPW functions, some affect the other agencies as well. The report is organized into ten chapters. Chapter I presents background information on the Department of Public Works and identifies other agencies that are actively involved in the space acquisition process. Chapter II explains the first phase of the space acquisition process through the statewide facilities and capital plan (FACCAP). Chapter III describes the DPW leasing process and gives information on the number, size, and cost of the state's leases. Chapter IV outlines the process followed in purchasing and disposing of state space. Chapter V describes the current status of the state real property inventory. Chapter VI highlights survey results of agencies under DPW's jurisdiction for space acquisition.
Finally, the committee's findings and recommendations are outlined the last four chapters. Chapter VII discusses facility planning and its effect on the subsequent space acquisition process. Chapter VIII profiles a random sample of DPW leases reviewed for length of process, adherence to policy and procedure, and discusses evident issues. Chapter IX outlines a similar discussion for real estate sales and purchases. Chapter X presents the broader issue common to all real estate transactions regarding organizational structure and working relationships between the major players involved.