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PSAD-79-7 1 (1978-11-06)

handle is hein.gao/gaobaazzn0001 and id is 1 raw text is: LNI111004 - :- UNITED STATES GE-,.AL ACCOUNTING OFFICE WASHINGTON. D.C. 2-D54,8 PROCLJUREKENT AND SY5T_-MS ** * f A=QUISITJON DIVISION j11111li 11111 ~~N V illN 6 19 78 111004 ..e Honora'ble J F ie s '2. jc ~ri e arid budacet A~C~O? ~~ r~t bear Mr. .'.I Itk're: Wye believe that through the use of comipezit ive procurement procedures it mi-ay be possib)le to significantly reouce the cost of real estate anent fees -incurred by Federal agencies. Cur- rently, ci vilian Govern, ,nt employees pay and are then rein- bursed for the real estate auelit commissions: involved in sell- inq their nonies when they move at Government expense. Gener- all'y, no att'empit is ,mace to ootain comueLttion in contracting for these servi:ces. While statistics showa,_rio the exact numnDer of civilian Fed- eral employees moving annually are not readil-y available, we estim-.ate tbat as miany as 140,000 emlovees relocate each year. The real estate fee an employee pays for sellinq a residence is normally in the ranae of 6 to 7 m)ercent of the selling price. Assumina a 6-percent fee and apply--nq it to the $49,400 national average sales price of an existing hom-e, the Government spends about S415 million annually for the services of real estate acents (140,000 x $49,400 x 6 percent). Yn'us, a com-.mission reduction for each 1 percent could save the Government about $69 riillion annually ($415 m-illion divided by 6). Opportunities to Reduce Real Estate Costs Are Available The Air Force sp~ent about $6.7 million in FY 19*77 to reimburse relocating civilian employees for real estate fees. At a 6 percent comnission rate, a 1-percent reduction through cormpzetitive contracting would have reduced the Air Force expense by $1.1 million. As another example, the PIarine Corps recently moved its Philadelphia, Pennsylvania, finance center to Albany, Georgia. The move caused 164 civilian employees to transfer. The total value of home sales was about $5.7 million, and the real estate O0 -

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