Introduction:
The federal government’s management of surplus property is governed by key legislation, including the Federal Property and Administrative Services Act of 1949 and the Veterans Small Business Enhancement Act of 2018. These laws ensure that surplus property is first made available to eligible donees, such as local governments, schools, and veteran-owned businesses, before being sold through public auctions. However, current practices suggest non-compliance with these laws, resulting in significant financial strain on local governments and public agencies.
This policy recommendation highlights the critical issues in surplus property distribution, including misclassification of property, non-compliance with federal laws, and budget manipulation, all of which are leading to unnecessary financial burdens on local governments.
Key Issues:
1. Non-Compliance with Surplus Property Distribution Laws:
• Surplus property is often sold through public auction platforms like GovPlanet.com before being offered to eligible donees, such as townships and public agencies, in violation of federal law. This failure to prioritize donees contradicts the intent of the Federal Property and Administrative Services Act of 1949.
2. Failure to Implement the Veterans Small Business Enhancement Act of 2018:
• Veteran-owned small businesses (VOSBs) are entitled to acquire surplus property under this law, but many veteran-owned businesses are unaware of their eligibility, or the property is being sold before they have the opportunity to access it.
3. Potential Misclassification of Property as “Excess”:
• Federal agencies may be prematurely declaring property as “excess” instead of “surplus,” bypassing legal obligations to offer this property to donees first. This misclassification enables agencies to expedite sales without fulfilling their legal duty to public entities.
4. Budget Manipulation and the “Use It or Lose It” Mentality:
• Some federal agencies appear to be selling off surplus property to ensure their budgets are fully spent, and then using the proceeds to buy new equipment, contributing to wasteful government spending practices.
5. Cost to Local Governments and Wasted Tax Dollars:
• The failure to properly offer surplus property to local governments is costing these entities significantly more money. Instead of acquiring equipment at reduced or no cost, local governments are forced to purchase essential equipment at full market value, often from public auctions. This represents a waste of taxpayer dollars, as local governments are paying twice—first through federal taxes that funded the purchase of the property, and again to buy the same equipment at market prices.
Policy Recommendations:
1. Enhanced Compliance with Surplus Property Distribution Laws:
• The GSA and other federal agencies must ensure that surplus property is offered to eligible donees, including townships, schools, and veteran-owned businesses, before being sold to the general public. This would allow public entities to access valuable resources without straining local budgets.
2. Independent Audit of Property Classification Practices:
• A thorough, independent audit should be conducted to review property classification practices and ensure that surplus property is not being prematurely declared “excess” in an effort to bypass legal obligations.
3. Improved Outreach and Notification to Eligible Donees:
• The GSA should establish a more effective notification system to ensure that eligible donees, including local governments and veteran-owned businesses, are aware of available property in time to claim it before it is placed for public sale.
4. Monitoring and Reporting of Surplus Property Sales and Proceeds:
• Transparency in the allocation of surplus property proceeds is crucial. Federal agencies should publicly report how surplus property sales funds are used and ensure that these funds are not fueling wasteful spending practices.
5. Strengthened Implementation of the Veterans Small Business Enhancement Act of 2018:
• Additional outreach and support should be provided to veteran-owned businesses to help them access surplus property in line with the provisions of this act.
6. Penalties for Non-Compliance and Fiscal Mismanagement:
• Agencies found violating surplus property laws or engaging in budget manipulation should face administrative penalties to deter future mismanagement.
7. Reducing Financial Burdens on Local Governments:
• By ensuring surplus property is offered to local governments, townships, and other public agencies first, the federal government can help local entities save significant funds. This would prevent wasteful spending of taxpayer dollars on equipment that has already been paid for once.
Conclusion:
The current mismanagement of surplus federal property is leading to financial burdens on local governments, who are forced to spend billions of taxpayer dollars on equipment they should have received at no or reduced cost. By following federal laws and ensuring transparency in property management, the federal government can reduce unnecessary spending and support local entities that rely on these resources to operate efficiently.
I urge you to consider these recommendations and take action to address the outlined concerns.