The National Capital Region -- which includes the District and suburban Maryland and Virginia -- gets one out of every three dollars spent for federally leased office and warehouse space.

William Jenkins, director of GSA's real estate office in this region, said that although the government is shrinking, it still lacks space.

"Although we have the authority to force agencies to move into a specific block of space, we don't often use it," he said.

For example, when the Army's Audit Organization asked for 23,000 square feet of space this month, they told GSA it had to be in Virginia. Jenkins, who says there is no available leased or government-owned space in Northern Virginia, was forced to "go out on the street" soliciting space and bids.

"Virginia is difficult," Jenkins said. "I always have more demand than I do supply."

Meanwhile, Kenneth L. Perrin, who head's GSA's office of utilization in the region, said that, in the District, he had 70,000 square feet of vacant space available in the Chester A. Arthur Building (425 I St. NW) and 30,000 square feet of space vacant at 2001 S St. NW. In addition, the Department of Health and Human Services has vacated 200,000 square feet in Hyattsville and, in Germantown, the Department of Energy has vacated 75,000 square feet.

"If we had our choice, we'd lease new space needs in Prince George's County where the rates are cheap and there is space out on the Beltway," Jenkins said. "But it's basically a program decision [made by the Army]. We can get them a very competitive deal if they would let us try in Maryland."

Although the Army's need is immediate, Jenkins said there is a plan to reshuffle the Environmental Protection Agency's pesticides division from the 90,000 square feet it occupies at Crystal City to the agency's central headquarters building at Waterside Mall in the District.

"The problem is always location," Perrin said. "And for federal agencies, Maryland is kind of wasteland. Nobody wants to go there. It's unfortunate."