"Selling idle federal properties so they may be converted to productive uses by the private sector is a worthwhile objective. We will all benefit in the form of increased local tax revenues and employment opportunities. The success of this program is dependent on the public's response." Gerald P. Carmen, General Services Administrator

Two months into the Reagan administration's ambitious $17 billion, five-year sell-off of unneeded federal properties, the General Services Administration has raised $5.4 million from both competitive bid and negotiated sales.

Administration officials say that despite a seven-month build-up to launch the program, it should still be considered in its infancy because federal agencies have been slow in relinquishing valuable land to GSA for disposal. And many of the parcels that are selling are going at less than market value because of the depressed economy.

In addition, 47 percent of the expected proceeds will come from the sale of unneeded public lands now under the control of the Interior Department and the U.S. Forest Service, but those sales won't begin until fiscal 1984.

Earl E. Jones, assistant commissioner of GSA's office of real property, said, "If we have the land, we'll sell it, but we can't sell it if we don't have it."

Meanwhile, Jones projects that the program is "on course" and will "probably end up doing much better than expected towards the end of this [fiscal] year."

As of Dec. 3, GSA was working with a list of 577 surplus and excess federal properties. Of that total, 80 percent of them there were on the list because of routine disposal procedures and not because of the administration's accentuated sales program. That list is slowly being augmented as agencies turn over to GSA some of the 357 properties identified by the White House-level Property Review Board as having high value.

The properties now available range from more than 20 portions of old military installations to an old Coast Guard lifeboat station in New Jersey, and from wetlands in Duluth Harbor, Minn., to part of the old VA center in Leavenworth, Kans.

But despite having an inventory of nearly $1 billion in property, Jones and other GSA officials say that amount is not enough because of the complex set of legal actions that must occur before a property that is unneeded by one federal agency can be put up for public bid. That means the properties now ready for sale in the next four months number only 51.

The first step in that process is for a federal agency to declare a parcel "excess" to its needs and turn it over to GSA for disposal. Traditionally, that parcel could be claimed, free of charge, by another federal agency that needed it. Under the new administration guidelines, other agencies seeking such properties must pay fair market value for them or arrange a waiver from the Property Review Board. Waivers are expected to be granted only for the creation of federal prison sites, for diplomatic reasons or national security purposes.

Although land management critics on Capitol Hill decry this as little more than a money-shuffle, administration officials contend it will make federal managers more accountable for the properties they use. Still, under this system, agencies are given first crack at "buying" a needed parcel from another agency.

If there are no federal takers, GSA officials decide which of seven discount transfer programs may represent the next "best use" of the property. These discount conveyances are designed to help local communities obtain land for public purposes for uses such as sites for new schools or commercial airports.

These screenings are conducted when the property is transferred to the "excess" list at GSA. If GSA decides a parcel should be screened for one or another use, it is routed to the appropriate agency (the Department of Education, for example, for school sites; the Department of Housing and Urban Development, for low and moderate income housing for the handicapped).

In general, the White House has ordered these discount transfers drastically scaled back, except when specifically authorized by GSA administrator Gerald P. Carmen or the Property Review Board. Statistics show that from October, 1981 (the beginning of fiscal 1982) through February, 1982 -- when the new rules went into effect -- 39 parcels were transferred under these procedures. But from March through the end of the fiscal year in September, only seven other parcels were transferred.

Beyond the legal steps, the next problem is building up an inventory.

While Carmen admits the biggest problem is the "reluctance of agencies to give up property," he and other GSA officials seem to believe it can be handled internally. GSA spokesman Paul G. Costello said the agency's master plan calls for the eventual use of brokers to sell about half of the properties.

The National Association of Realtors has offered to help and has set up a program called AID ("Assist in Inventory Disposal"). This program would "take a look at existing federal regulations and legislation and determine how the private sector might be more involved in the administration's federal land sales program," said Thane A. Young, director of the Realtors' energy and environmental affairs division and its designated federal liaison.

As part of that effort, association members across the country have been asked to submit to Young "nominations" for federal properties that they believe could be sold, and that they believe are not needed by the federal government. The review board will screen those properties and try to coax federal agencies into turning prime prospects over to GSA for disposal.

But therein lies a controversy: GSA says that it has enough staff to administer the program and that it doesn't need the brokers' help.

"A broker knows the buyers," counters Joshua A. Muss, the Board's executive director. "GSA is not going to call developers and say there is a super piece of federal property somewhere" that is available to buy.

Assistant GSA commissioner Jones agrees. "We're not going to do that. We have to stay at arm's length to protect the best interests of the federal government." Jones has also said that the role of Realtors as salesmen will be "limited" -- for now -- until the workload cannot be adequately handled by federal employes.

Another underlying problem is the program's image. Criticism from congressmen, local officials and environmentalists has made sales officials gun-shy. The $17 billion target has been viewed as unrealistic, but few have said so in public.

"That's a false number," said one former GSA official involved in the land sales program. Office of Management and Budget Director David A. "Stockman put that number in there to cut the projected federal deficit. GSA could never sell its share of $9 billion."

Now, Carmen has confirmed GSA suspicions that the $1 billion first-year target for the agency is too high.

"Our first year goals are being relooked by the Office of Management and Budget ," Carmen said. "It's not a question of getting it done in two years, in three years, in four years or in five years."

"I can't say that we're jumping up and down right now, but we'll be pumping them out eventually," added John V. Neale, Jr., a GSA land sales official charged with monitoring properties west of the Mississippi River.

While the program builds up steam, Jones and others have restrained themselves from issuing press releases or other types of "media-oriented" statements about how it is coming. The inventory, he said, is still too low.

Staffers at the PRB, however, think GSA is dragging its feet in getting out the word. One said "they should be putting out a press release on every sale." She said the Board is considering a periodic "program update" newsletter to fill the void.

Muss believes that the dollars won't begin rolling in until 1984. By that time, he says, the PRB will have had time to change several laws that now direct the money into places other than the national debt. Generally, land sales proceeds go to the Interior Department's Land and Water Conservation Fund to pay for park land acquisitions. But those acquisitions have been scaled back. And because the fund also earns money from offshore oil leasing revenues, it's filled to the brim.