The Disposal Process
When disposing of federal real estate, the following process is mandated by federal law. The major steps in this process are illustrated below; however, not every property goes through every step of the process.
When a federal agency no longer needs a property to carry out its program responsibilities, it reports this property as “excess” to its needs.
GSA first offers excess property to other federal agencies that may have a program need for it. If another federal agency identifies a need, the property can be transferred to that agency.
If there is no further need for the property within the federal government, the property is determined “surplus” and may be made available for other uses through public benefit conveyances (PBC), including homeless use, negotiated sales, or public sales based on GSA's determination of the property’s highest and best use.
If a property is suitable for homeless use, according to the Department of Housing and Urban Development, we must first consider transferring the property as a homeless conveyance before any other public benefit conveyance can be considered.
Public Benefit Conveyance
As a PBC, the property can be substantially discounted in price (up to 100% reduction in fair market value) if it is used for a specific public use that qualifies for a PBC through a partner federal agency.
GSA can negotiate a sale at appraised fair market value with a state or local government if the property will be used for another public purpose.
Public Sale of Property
If state and local governments or other eligible non-profits do not wish to acquire the property, GSA can dispose of surplus property via a competitive sale to the public, generally through a sealed bid or auction.
Since 1987, GSA has conveyed over $3 billion worth of property across the United States. Of this, about one third has been conveyed to state or local governments and non-profit organizations at a substantial discount in price.