Two senators have accused the General Services Administration of planning to pay commercial real estate agents $42 million in brokerage fees in fiscal 1983 to help sell unneeded federal land when the agency could save $30 million by simply expanding its own workforce.
Sen. Carl Levin (Mich.), ranking Democrat on the Senate Governmental Affairs subcommittee on government management, and Sen. Dennis DeConcini (Ariz.), ranking Democrat on the Senate Appropriations subcommittee that funds GSA, said in statements made on the Senate floor Thursday that the payment would be legal but not cost-effective.
In a letter to GSA administrator Gerald P. Carmen, the senators said they were "bothered that it appears that the government may actually spend more money than it needs to by using private real estate agents instead of GSA's own personnel."
GSA officials -- some of whom suggested that the Democrats were merely trying to delay the sales agenda -- contend they could have asked for as much as $144 million under the law, but thought they would only need $42 million "at best" to do the job.
The two Democrats and Republican Sen. James Abdnor (S.D.), chairman of the Appropriations subcommittee, asked GSA to prepare a cost-benefit analysis by early 1983 that would compare the expense of hiring more federal employees against paying brokers' commissions, set by GSA at 6 to 10 percent for a sale.
But William B. Early, GSA's budget director, said the plan "was a marriage between what we could do and what the others could do. If we bring in some green, immature people, you have a learning curve. If you bring in professionals from the outside, you don't have that. Also, if you only want to do this for a short time, you don't want to hire people that you then have to fire."
Early said GSA's projections extended only through fiscal 1983 and fiscal 1984--President Reagan's current term of office -- rather than the whole, planned, five-year course of the sales program.
The letter to Carmen also said, "The fund which permits GSA to hire . . . brokers has been increased for fiscal year 1983 from $1 million to $47 million. This increase, though completely legal, has not been subject to the congressional appropriations process or even oversight hearings. The increase in the fund contrasts sharply with the $12,404,000 which we have appropriated for GSA's in-house sales."
Levin's staff said that $42,187,000 of the $47 million is for planned brokers' fees, with the rest paying for auctioneers, appraisers, advertising of properties available for sale and for land surveys.
Over the next five fiscal years, the Reagan administration plans to try to sell $17 billion worth of unneeded federal land--about half from surplus land sales by GSA and the rest from the sale of public lands now held by the Interior and Agriculture Departments.
Earl E. Jones, assistant commissioner of GSA's division of real property, said that the costs for brokers would amount to only five percent of the revenues generated in a multibillion-dollar program.
"If you study it to death with a cost-benefit analysis , you're going to delay the program," said Early. "Maybe you can learn as you go along."
Abdnor, who said through his news assistant that he did not view the request for a cost-benefit analysis as a delaying tactic, planned a hearing on GSA's use of brokers next spring.