After the Fall: The Economic Crisis from
a Government Relocation Perspective

“The challenges of change are always hard. It is important that we begin to unpack those challenges that confront this nation and realize that we each have a role that requires us to change and become more responsible for shaping our own future.” – Hillary Rodham Clinton

The downward turn of the national real estate market has impacted the U.S. Federal Government’s civilian relocation program, as government transferees are not immune to the issues that have impacted private sector relocations over the last few years. Discussed below are two main challenges government agencies have encountered during 2009.

Financial Impact to Transferees

Many transferees are struggling with significant Loss on Sale and/or negative proceeds. While the majority of organizations within the private sector offer financial assistance to transferees suffering these significant losses, most federal agencies cannot offer this assistance due to current regulations. Additionally, while private sector transferees may elect to contact their lender for approval for a short sale, it is not always a viable option for transferees within the public sector. The negative impact a short sale could generate on a transferee’s credit rating puts his or her security clearance at great risk. Therefore, agencies are seeking alternative solutions to ensure transferees receive the necessary assistance within government regulations. For example, agencies that offer direct reimbursement as an alternative may also offer property management, increased counseling and enhanced marketing assistance through their relocation management company suppliers.

A Challenging Real Estate Market

In this tumultuous market, created by increased properties, extended marketing times and a shortage of purchasers, industry professionals are challenged with finding solutions that encompass the goals and objectives of each party involved: the transferring employee, the government agency and the service provider.

Based on recommendations from a focus group of relocation industry leaders, which included Primacy, General Services Administration (GSA) revised their Statement of Work referencing the home sale program. The revised Statement of Work focuses on program options in which agencies can contract with relocation management companies. The criteria within the scope of the options enable the relocation management companies to more effectively assist transferees with marketing their properties. Agencies that contract outside the GSA Schedule have also rewritten their Statements of Work to align with the same common goal. This added focus has resulted in maximized opportunities for obtaining Buyer Value Option (BVO) and/or amended sales and meeting the individual needs of transferring employees, agencies and service providers.

With ongoing events such as the stabilization of a new administration, ongoing mission alignment, increased employment opportunities and Base Realignment and Closures (BRAC), the government will continue to forge ahead and provide relocation benefits to employees. Although difficult at times, relocation professionals and government agencies have bonded together for new solutions. Whether it’s the private or public sector, change is the new reality.