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Total Warehousing
JUSTIFICATION FOR WAREHOUSE RETENTION
Commission officials informed us that they had met with GSA in September 1993 to discuss reducing the amount of its leased warehouse space. As a result of this meeting, officials understood that if they wanted to eliminate part or all of the warehouse space, the Commission would be obligated to pay for the space until another tenant could be found. During the audit, we discussed this issue with GSA and found that there was a misunderstanding concerning the leasing of the space. According to GSA officials, unneeded warehouse space could be relinquished at any time after giving a 120-day written notice. The notice would give a description of the area involved, its location, and the estimated date of release. However, GSA advised that there had to be a feasible break of space to avoid sharing of space.
IMPACT ON WAREHOUSE OPERATIONS
Reducing the size of the warehouse operation would reduce costs for the Commission. We calculated that disposing of unneeded furniture and equipment would free up about 16,000 square feet of warehouse space. Also, some of the 6,000 square feet of space used for the storage of office supplies would be available when the supplies were used up after a more frequent ordering program was adopted. When this space is vacated, action should be taken to identify total warehouse space requirements and relinquish unneeded space. About $1 million in lease costs would be saved if the vacated space is relinquished no later than April 1, 1997. Further, savings would be achieved if the Commission renegotiated its contract for personnel used to operate the warehouse in proportion to the amount of space that is relinquished. In addition, other organizations could benefit by utilizing the excess property in the warehouse.
Credits
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