Federal Surplus Property Disposal

The federal government owns billions of dollars in property — vehicles, computers, office furniture, scientific equipment, buildings, land — and when agencies no longer need it, a structured disposal process determines whether it goes to another federal agency, a state or local government, a nonprofit, or the public through auction. The General Services Administration (GSA) manages this process under the Federal Property and Administrative Services Act (40 U.S.C. Chapter 5), ensuring that surplus property generates maximum value for taxpayers while serving public purposes like education, law enforcement, and homeless assistance.

Current Law (2026)

Legal Authority

• 40 U.S.C. § 521 — Policies and methods (Administrator of GSA shall prescribe policies to promote maximum use of excess property by federal agencies and minimize expenditures)
• 40 U.S.C. § 524 — Agency duties (each agency must maintain inventory controls, continuously survey property to identify excess, promptly report excess property to GSA, and perform care and handling pending disposition)
• 40 U.S.C. § 527 — Abandonment, destruction, or donation (GSA may authorize abandonment or destruction of property with no commercial value, or donation to a public body when handling costs exceed value)
• 40 U.S.C. § 541 — Supervision and direction (GSA supervises disposition of surplus property)
• 40 U.S.C. § 543 — Method of disposition (surplus property may be disposed of by sale, exchange, lease, permit, or transfer, for cash, credit, or other property, with or without warranty)
• 40 U.S.C. § 549 — Donation of personal property (surplus personal property may be donated to state and local governments and eligible nonprofits through State Agencies for Surplus Property)
• 40 U.S.C. § 550 — Donation of real property (surplus real property may be conveyed for public purposes: education, health, parks, wildlife, historic preservation, homeless assistance, and public airports)

How It Works

Federal property disposal follows a three-tier priority system. First, excess property is offered to other federal agencies — if another agency needs the item, it transfers at no cost or at a reimbursement rate set by GSA. Second, property that no federal agency wants becomes surplus and is offered for donation to state and local governments and eligible nonprofits through State Agencies for Surplus Property (SASPs). Third, property not donated is sold to the general public through competitive sales.

Federal-to-federal transfers are the first priority. When an agency declares property excess, GSA's Federal Disposal System screens it against requests from other agencies. A military vehicle might go to a law enforcement agency; surplus office furniture might equip a newly established office. This internal recycling reduces government spending on new purchases.

State Agencies for Surplus Property are designated by each state governor to receive and distribute federal surplus personal property. Eligible donees include state and local government agencies, public schools and universities, nonprofit hospitals, and organizations serving people with disabilities. The SASP acquires surplus property from GSA and distributes it to eligible organizations — often for a nominal service charge covering handling and transportation. Schools, fire departments, and community organizations have received vehicles, computers, medical equipment, and other items worth millions.

Public sales are conducted through GSA Auctions (gsaauctions.gov), following procedures consistent with the Federal Acquisition Regulation, where anyone can bid on surplus vehicles, electronics, industrial equipment, real estate, and other federal property. Auctions are typically online with nationwide shipping options. Prices are often well below retail — government property is sold "as-is, where-is" with no warranties.

Real property (buildings and land) surplus follows a more complex process. GSA first screens federal agencies, then offers the property for public purposes — education, healthcare, parks, historic preservation, and homeless assistance. The McKinney-Vento Homeless Assistance Act gives homeless service providers first right of refusal for surplus federal buildings and land suitable for homeless programs.

Accountability requires every agency to maintain inventory controls, continuously identify excess property, and report to GSA. Annual reports to Congress on excess personal property provide transparency.

How It Affects You

If you work for a state or local government agency, school district, fire department, or public health organization: Federal surplus property can be a substantial budget multiplier — vehicles, computers, communications equipment, lab gear, furniture, and medical equipment from federal agencies flow through your state's State Agency for Surplus Property (SASP) before going to public auction. Every state has a designated SASP (often located in the state's department of general services or finance). Eligible donees — state and local government entities, public schools, public health organizations — can acquire surplus property for a nominal service charge covering handling and transportation, which is far below replacement cost. A county fire department can receive surplus federal vehicles; a school system can receive computers and lab equipment; a public health clinic can receive medical supplies. Contact your state SASP directly (find your state's SASP at gsa.gov/sassap) to get on the distribution list and understand what's currently available. Availability is unpredictable — useful items come and go quickly — so regular engagement with your SASP pays off.

If you run a nonprofit organization serving education, health, or social services needs: Your organization may qualify for donated federal surplus property through your state SASP, but eligibility isn't automatic — you must be formally approved by your SASP as an eligible donee. Eligible nonprofits include those providing assistance to low-income individuals, people with disabilities, children, the elderly, and similar populations. The application process typically requires submitting your nonprofit determination letter (IRS 501(c)(3) status), organizational information, and a description of how surplus property would serve your mission. Once approved, you can access property lists and request items as they become available. Items are typically acquired for a nominal handling fee — well below market value. Restrictions apply: surplus personal property received through the donation program may have conditions on use (the property must be used for the approved purpose for a specified period), and selling or cannibalization of donated items can trigger repayment obligations. Review the 41 CFR Part 102-37 conditions with your state SASP before acquiring high-value items.

If you're an individual or small business interested in buying surplus government property: GSA Auctions (gsaauctions.gov) is where federal surplus property goes after it fails to find a federal or nonprofit taker. You can bid on surplus vehicles (from sedans to forklifts to aircraft), computers and electronics, office furniture, industrial equipment, scientific instruments, real estate, and a wide variety of other items. Registration is free; auction listings are publicly searchable. Key terms to understand: property is sold "as-is, where-is" with no warranties — what you see is what you get, and you're responsible for transportation. Government surplus often reflects deferred maintenance or older technology, but prices typically reflect that. Some auctions require in-person inspection; others are purely online. GSA also conducts public sales through authorized auction contractors. For real property, GSA surplus real estate sales are listed separately from personal property auctions and may require specific bidder qualifications. The best deals tend to be for buyers who can evaluate condition themselves (mechanics buying surplus vehicles, IT buyers evaluating aged servers) and who can handle transportation logistics.

If you lead a homeless assistance organization and are looking for facilities: The McKinney-Vento Homeless Assistance Act gives homeless service providers first right of refusal on surplus federal real property — buildings and land — before it goes to other public benefit uses or public sale. When a federal agency declares real property excess, GSA notifies HUD, which in turn notifies homeless assistance organizations. Eligible providers can express interest and submit applications to use the property for homeless programs. If approved, the property can be conveyed at no cost for up to 5 years (and sometimes longer) for use as shelter, transitional housing, or support service facilities. The practical steps: register with HUD's Title V Homeless Assistance Program, monitor the HUD website (hudexchange.info) for surplus property notices, and respond quickly — the notice period for homeless use applications is 60 days from HUD notification. Competition for suitable properties is real, and the process requires a detailed application demonstrating organizational capacity and a plan for the property. The Trump administration's federal property disposition push has accelerated the number of surplus federal properties entering this pipeline — monitor HUD Title V listings actively.

State Variations

Federal surplus property law is federal, but implementation involves state partners:

• Each state designates a State Agency for Surplus Property (SASP) to manage donation programs
• State eligibility criteria for donee organizations may add requirements beyond federal minimums
• State handling charges for donated property vary
• Some states have robust SASP programs distributing millions in surplus property annually; others are smaller
• State surplus property programs (for state-owned excess property) operate separately from the federal program

Implementing Regulations

• 41 CFR Part 102-36 — Disposition of excess personal property (reporting, transfer, donation through State Agencies for Surplus Property)

• 41 CFR Part 102-37 — Donation of surplus personal property (eligibility, allocation, terms and conditions, compliance)

• 41 CFR Part 102-38 — Sale of Personal Property (GSA, 26 sections — the regulations governing how federal agencies sell surplus personal property to the public and to state/local governments; authority: 40 U.S.C. §§ 541–559):

  • § 102-38.10 — Authorization: only an executive agency designated or authorized by GSA may conduct personal property sales; GSA is the default sales authority, but agencies may obtain delegated sales authority for property they hold
  • § 102-38.35 — Sales methods: agencies may use any method — sealed bid, spot bid, auction, or negotiated sale — provided the sale is publicly advertised and competitive; online auction (GSA Auctions) is the dominant method for most personal property
  • § 102-38.40 — Negotiated sales conditions: negotiated (non-competitive) sales are only permitted when: (a) estimated fair market value is $15,000 or less; (b) competitive sale would cost more than expected proceeds; or (c) only one potential buyer exists for highly specialized equipment
  • § 102-38.100 — Title transfer: the agency's written or electronic acknowledgment that full payment was received serves as the conveyance document; government conveys "as-is" with no warranty of title or fitness
  • § 102-38.105 — Proceeds retention: agencies may retain sales proceeds for care-and-handling costs incurred before sale; excess proceeds are deposited into the Treasury's miscellaneous receipts fund
  • § 102-38.115–130 — State and local purchases: SASPs may purchase surplus property initially offered for public donation but not donated; purchases must be at fair market value; competitive-sale requirements may be waived for SASP purchases of property that failed to attract public buyers

  The $15,000 threshold for negotiated sales is the key compliance line — most meaningful equipment must go through competitive bidding; agencies that negotiate sales above threshold without proper justification face audit findings.

• 41 CFR Part 102-75 — Real property disposal (public benefit conveyances, negotiated sales, public auctions)

Pending Legislation

• HR 2046 (Rep. Figures, D-AL) — Require congressional approval before the sale, disposal, or transfer of federal properties ever listed on the National Register of Historic Places. Status: In committee.
• HR 6926 — Federal Property Integrity Act: prohibit naming or renaming any federal building, land, or asset after a sitting President. Status: In committee.

Recent Developments

GSA has modernized surplus property disposal through expanded online auctions, improved property screening systems, and digital inventory management. The 1033 Program (separate from GSA's surplus programs) — which transfers excess military equipment to civilian law enforcement — has been a political flashpoint, with successive administrations restricting or expanding eligible equipment. GSA's sustainability initiatives now include prioritizing reuse and donation over destruction, and the agency has expanded eligibility for certain technology surplus to bridge the digital divide. Real property disposal has become more complex as the federal government addresses its $100+ billion deferred maintenance backlog and Congress debates whether to authorize a new round of federal property consolidation.