Directive overview

The Office of Financial Management (OFM) issued a directive to Washington state cabinet agencies in September 2026. The goal is to achieve near-term and ongoing savings by optimizing facilities management.

The directive orders cabinet agencies to:

• Reduce all non-essential facility spending.
• Reduce leased office space.

We are working with the OFM and Your Washington to develop guidance to help agencies meet this directive. We will update this page with information and tools as they become available.

Exceptions

This change does not apply to:

• Projects funded through enacted capital budget appropriations.
• Facility work required by law or legislative direction.

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Ending non-essential facility spending

Changes to non-essential facility spending are effective immediately.

Starting now, agencies should not start new non-essential facility investments and should review current non-essential projects to find opportunities to stop or reduce further spending.

Additionally, agencies should not request non-essential services from DES or private vendors unless the work is exempt under the directive.

Cabinet agencies who own their own buildings should follow their agency's policies and implementation guidance.

Facilities Service Request

We will update our facilities service request process for all tenants in DES-owned buildings.

Before submitting a request

Agencies should evaluate all facilities service requests to see whether they are essential and ensure that their agency leadership supports the request. This includes requests that are funded privately or with federal funds.

Form changes

When submitting reimbursable work, you will need to check the directive category:

• Essential
• Exception
• Needs assessment

If essential or an exception, you will need to select which type of work it falls under as outlined in the decision matrix.

At the end of the request for reimbursable work, you will need to confirm that your agency leadership authorizes you to make the essential work request.

Reducing leased office facilities

We will phase implementation for reducing leased office spaces.

Effective immediately, agencies must pause routine office lease renewals and evaluate space needs and lease reduction options.

Immediate changes

Before renewing any lease for traditional office space, agencies must:

• Use data to decide the minimum space necessary to effectively deliver and protect core public services.
• Coordinate with DES and OFM.

DES lease renewal process changes

We are currently updating the lease renewal process to help agencies meet this directive.

Agencies can expect:

• A new name to match the updated focus.
• A new pre-define milestone to assess space needs and compare options like consolidation, colocation, and moving from privately-owned to state-owned buildings before moving to lease renewal. This milestone could add 30-90 days to the process.
• Added tools and updated guidance on how to assess space needs (coming soon).
• In some cases, earlier outreach from DES before leases end to allow for the pre-definition milestone.
• A focus on reducing overall leased office space, including leases or occupancy agreements in state-owned buildings.

Space options

Instead of defaulting to lease renewal, we will work with agencies to assess your space needs. We will look at potential options on how to meet your needs without compromising core service delivery to the people of Washington.

Options may include:

• Downsizing: Reducing the amount of overall space in the current lease based on actual use and core business needs.
• Consolidating: Reducing the number of physical office locations for a single agency.
• Sharing space (colocating): Moving to a facility that shares space with another state agency, decreasing the state's overall leased space and reducing costs for less-used amenities.
• Relocating: Moving to a state-owned facility, or smaller facility that will still meet business needs.
• Short-term lease options: Renewing or extending leases to allow the agency a temporary option while pursuing lease reductions.
• Ending leases: Ending leases without relocating by closing locations that are no longer needed.

At the same time, we are looking at existing leases with cancellation clauses to see if it would be beneficial to end leases on office space early. We are also exploring options in owned buildings to make it easier to share underused amenities like conference and hearing rooms among agencies.

Implementation

There will be several phases to implementing the lease reduction part of the directive, and work from each phase may overlap. We will update this page as more information is available.

Phase one: Examine current state

Agencies should start phase one work now. The purpose of phase one is for agencies to:

• Understand their current office space portfolio.
• Prepare for conversations with OFM and DES about right-sizing their space.

Roles

Agencies should lead this work, coordinating with your leadership and internal facilities, budget, and human resources staff.

Next steps

Over the next month, review your entire office space portfolio and find opportunities for near-term cost savings, upcoming lease decisions, underutilized locations, and office spaces that may need deeper review to prepare for budget development conversations with OFM.

OFM will reach out to your agency during budget development.

Prioritize reviewing the following:

• Locations that have lease (or occupancy agreement) end dates, or usable cancellation clauses within the four-year outlook (fiscal years 2028-2031).
• Locations in state-owned facilities with opportunities for internal consolidation or sharing spaces with other agencies.

Step one: review your agency's current office space portfolio

Use the following tools to assess your office space portfolio.

• Your agency's 2027-29 biennial budget materials: Your budget coordinator should be able to provide them, including:
  • Facility Cost Template — has your agency's full inventory of leased, owned, and subleased (receivable) facilities.
  • Facility-related Decision Packages (DPs)
  • DP Addendums for 2027-33 Six-Year Facilities Plan
• OFM's Space Utilization Report: You can access this as a reference document in Facilities Portfolio Management Tool (FPMT).
  • This report only has data for agencies that use Human Resource Management System (HRMS).
  • Use the workbook reference tabs for metric definitions, an HRMS to FPMT telework crosswalk, and instructions for how to use the data.

Step two: Check space efficiency plans

Check to see if your agency planned any space efficiency projects as part of your 2027-29 biennial budget and 2027-33 Six-Year Facilities Plan submittal.

• Efficiency projects could include closing facilities, downsizing, consolidating, or sharing space.
• You can find them listed in your Facility Cost Template as Six-Year Facilities Plan Projects.
• If planned for the 2027-29 biennium, they will also have an associated Decision Package (DP) and DP Addendum.

Step three: Discuss facility optimization with OFM and DES

If your agency did not include efficiency projects in its recent budget and six-year plan submission, contact OFM Facilities Oversight with all immediate opportunities for savings in the next four fiscal years.

This step will not require new budget or six-year planning materials for the current cycle.

Be prepared to share your assessments and have data-informed conversations about your office space portfolio and facility utilization with OFM and DES during budget development.

Phase two: Challenge the status quo

In phase two, agencies will:

• Take a deeper look at the actual utilization of their office spaces.
• Apply an efficiency lens while evaluating their physical office space requirements, and
• Answer questions from OFM and DES about facility rationale and assumptions, current utilization, and agency business needs.

Phase three: Conduct space planning and feasibility

In phase three, agencies will:

• Decide their minimum required physical office space, and
• Present feasibility options to reduce leased office space.

Phase four: Plan to reach optimal facility use

In phase four, agencies will create an action plan on how to achieve identified lease reductions, including:

• Timing
• Implementation costs and overall savings
• Connection to agency budgets and Six-Year Facilities Plan

Definitions

The following definitions clarify language used in the directive and in implementation guidance.

Cosmetic improvement

A change that refreshes the appearance of an asset or facility without altering its structure, systems, or functional use.

Essential facility investment

A change that an agency can't delay, reduce, or eliminate without creating an unacceptable impact on:

• Health or public safety
• Legal, code, or accessibility requirements
• Preservation of state assets through essential maintenance
• OFM-approved consolidation or efficiency project that produces measurable savings

Essential maintenance and preservation

Work required to keep a facility, asset, or system in good working condition and extend its useful life, including:

• Repair
• Routine care
• Protective actions that prevent deterioration, ensure safety, and maintain reliable performance

Lease

An agreement that grants a tenant the right to occupy and use a facility or property for a specified period, with or without an exchange of money. An agency may document a lease by:

• Lease or sublease contract
• Memorandum of understanding
• Resource sharing, licensing, occupancy, or interagency agreement
• Any similar record

Non-essential facility investment

Any facility spending within existing appropriations, including vacancy savings, reserves, fund balances, or other unspent funding, that does not meet a listed exception. This applies to both state-owned and leased facilities, regardless of fund source.

Examples

Examples of non-essential spending include, but are not limited to:

• Purchasing new furniture
• Replacing carpet
• Painting
• Remodeling or reconfiguring offices

Policy

A description of the current approach to implement a statute (law), order, directive, or provision of law, including current practice, procedure, or action based on that approach.

Strategy

A coordinated plan that aligns people, processes, and resources to achieve long-term goals.

Standard

A specific, measurable requirement that prescribes how something must be designed, done, or evaluated to ensure consistency, compliance, and operational quality.

Traditional office space

Workspace designed primarily for administrative, clerical, analytical, or collaborative knowledge work and consisting of:

• Desks or cubicles
• Private offices
• Conference rooms
• Support spaces like break rooms, reception areas, or storage

Frequently asked questions

Purpose and timing

What is the purpose of this directive?

The directive is a tool to manage state spending. The state should stop avoidable facility spending now and reduce ongoing costs from leased office spaces over time while protecting core public services.

We should not make non-essential investments in space when we don't know whether that space will remain part of the state's future footprint.

Why do we need to reduce office space?

How and where employees work has changed. Agencies need to base office space decisions on actual need and use instead of historical footprint, or outdated space need assumptions.

The standing statewide building efficiency target is 80% daily actual use of space — also called utilization — not just a planning category or outdated staff to workstation ratio.

It's time to prioritize efficiency by:

• Optimizing the space we are already leasing,
• Making better use of state-owned space, and
• Reducing long-term private leases when the state's future space needs are unclear.

Why now?

The state needs to see real savings as soon as possible.

While agencies have already submitted their 2027-29 decision packages and 2027-33 Six-Year Facilities Plan materials, those plans do not show the level of savings OFM forecasts are available by reducing underused office space.

Some agencies have already taken significant steps to consolidate space, reduce leases, and improve utilization. Those efforts matter, but the current fiscal environment requires every agency to take a second look at its portfolio and challenge current assumptions about how much office space is necessary to deliver core services.

The goal is to help agencies find facility savings before reductions have to come from programs, services, or staffing. Facility savings won't replace every difficult budget choice, but the state must stop paying for office space it doesn't need.

Scope

What types of leased property are subject to the directive?

The directive focuses on traditional office space in both privately leased and state-owned facilities. This includes delegated leases and leases managed under an agency's own real estate authority.

While other types of leased space are not subject to the directive, agencies should evaluate all their leases when assessing actual space use and need.

See the definition of lease for the full scope of agreements included.

Does this apply to leased space in state-owned buildings?

Yes, this applies to all leased office space. The goal is to reduce state costs overall.

Do we need to pause projects that are currently underway?

Agencies do not have to pause OFM-approved consolidation or efficiency projects that produce measurable savings.

The directive does not apply to projects funded through enacted capital budget appropriations or to facility work required by law or legislative direction.

If you have questions about a particular project, contact OFM Facilities Oversight.

Implementation

What guidance will DES and OFM provide to agencies?

We are currently developing implementation guidance, including space use assessment worksheets, tools to help agencies evaluate whether improvement requests are essential, and general information.

What are the targets of the directive? What does success look like?

The directive does not include specific dollar or square footage targets. Agencies should do everything they can to reduce leased office space, meet or exceed space use targets, and conserve public funds.

In today's fiscal environment, every dollar saved from unused space can be put back and focused on preserving and delivering essential services to the people of Washington.

What is the timeline for this work?

Changes to facility improvement requests are effective now.

Agencies should immediately pause routine lease renewals and start phase one of lease reduction implementation.

The directive will stay in effect unless rescinded, and agencies can expect work to be ongoing through 2028 supplemental budget, the 2029-31 biennial budget, and future biennia.

Budget & funding

I'm open to consolidation, but I've already submitted my decision packages. What should I do?

As shared in the directive, agencies should work with OFM Facilities Oversight to discuss how savings can be incorporated in the budget for future planning and consideration.

How does the directive impact the decision packages and Facility Cost Template that our agency just submitted for the 2027-29 biennium?

Your agency should review its submitted documents to see if there are any missed opportunities for immediate savings or savings for the next four fiscal years. If there are any, contact OFM Facilities Oversight to discuss options. You do not need to submit new documents for this step.

Be prepared to discuss your submittals, actual use assessments, and missed opportunities with OFM during budget development.

Do we need to submit a decision package for this work?

No, not for the 2027-29 biennial budget. Agencies may need to submit a decision package in 2028 for the supplemental budget, or for future biennia.

Your agencies 2029-35 Six-Year Facilities Plan should right-size your office space portfolio and meet the state's 80% daily utilization efficiency goal.

Who is going to pay for costs from consolidation, colocation, or moving?

Agencies should work with OFM to decide how to fund any costs for consolidation, colocation, moving, or DES support. The answer will be specific to each agency.

Ultimately, funding will be determined by the enacted budget.

Will OFM approve purchases of furniture and equipment that might be viewed as non-essential but is needed to set up a new space?

Agencies should evaluate their own assets, and those available through surplus, before purchasing any furniture or equipment.

My agency was planning to spend down some remaining funds to complete a few facility improvements at the end of the fiscal year, can we still do that?

No. Non-essential work should not happen, and agencies should return any funds not needed for essential business instead of spending them down.

Space use assessment

How do agencies decide minimum office space needed?

Agencies should start by validating their current facility portfolio footprint and comparing that to actual space use. Consider core service delivery and what updates and innovations could help reduce your footprint.

Use OFM's questions to consider while evaluating your office space.

We will provide templates and more guidance to help agencies complete their assessments. We can also provide optional fee-for-service help with space planning and feasibility studies.

What options are available for agencies that own office space facilities?

Agency owners also need to right-size their occupied space in owned buildings and work with tenants to adjust existing subleases to make underused space available for others.

This will help support internal agency consolidation and sharing space with other agencies who need to end private leases.

How do we measure current utilization?

DES is developing more tools to help agencies assess actual use.

OFM has also created base utilization assumptions for each office space, based on HRMS telework data and facility square footage goals. You can access this report in FPMT. Use the Request New Account job aid if you need FPMT access.

Agencies will need to compare utilization rates to actual building use to find minimum office space requirements. See if your agency has the following data to help measure actual use:

• Badge swipe data
• Parking data
• Computer VPN access data
• Facility sign-in sheets (with sign-in and sign-out times) for a defined period (at least two weeks)

We can help agencies with utilization studies, but agencies don't have to engage in fee-based services during early planning. If you're not sure where to start, feel free to contact us.

Pausing lease renewals, ending leases, and space reduction options

What does my agency need to do to follow the office lease reduction part of the directive?

Agencies need to right-size their office space based on actual use and minimum required office space for operations and to deliver core services.

Agencies should:

• Be as efficient as possible.
• Exhaust all reasonable options to end full leases.
• Relocate from private leases to state-owned space wherever possible.
• Make space available in state-owned buildings to help other agencies share space.

Follow the provided implementation guidance to achieve these goals.

What if we give up space now, but need it back later?

The OFM Modified Pre-Design (MPD) process to request leased space will still exist. Agencies who need more space in the future should submit an MPD, and include six-year planning data that supports additional space needs.

What happens if I've already started the lease renewal process?

The directive requires agencies to pause routine lease renewals and assess space use.

We will help agencies currently in the lease renewal process assess space and explore all options, if renewals are past certain stages like a letter of intent they will continue.

How do we prioritize which leases to focus on first?

While you should evaluate all office space, start with leases that end or have a usable cancellation clause in the next four fiscal years.

We know we want to share space (colocate), relocate, or downsize. How do we start?

Start by submitting a Request for Services. Then, we will work with you to understand your actual space needs, evaluate available space, and find a good match. It may take some time to find the right solution.

If you are in a privately-owned building, we will contact you about two and a half years before your lease is up for renewal, or sooner if there is a cancellation clause in your existing lease.

Will we be told to close a lease without consultation?

OFM and DES will work with agencies to understand business needs and help them find efficient solutions for operations and core business delivery.

What if my agency has already consolidated operations or downsized significantly?

While helpful, previous projects don't exempt agencies from this directive.

All agencies need to establish minimum office space required, and validate that they are meeting OFM's space use targets as a minimum.

Security

How can you ensure security in a new or shared space?

We will work with agencies to make sure the space, including security measures, meets your essential operational needs.

Tools & reporting

What's the difference between the OFM Facility Cost Template and the Utilization Report?

The Facility Cost Template includes an agency's full inventory of leased, owned, and subleased (receivable) facilities, while the Utilization Report only includes locations coded as "Office" in FPMT.

What if my agency's HRMS data is incorrect?

OFM's utilization report is based off of agency-reported HRMS employee telework data. If an agency's HRMS data is incorrect, staff should update the system as soon as possible. State policy requires current and accurate data each month, including permanent changes to telework status in 30 days.

However, agencies should not assume that the data from telework agreements reported in HRMS actually reflects employee behavior. Agencies will need to use their own data to compare the Utilization Report to actual employee use.

Surplus operations

How will Surplus be involved in the directive?

Surplus helps give used goods a second life.

For agencies downsizing or consolidating, Surplus can help find a second life for unneeded assets like furniture, small items, and vehicles.

For agencies colocating or reconfiguring space, Surplus may have the furniture and assets you need for low to no cost.

Learn more by reading Surplus frequently asked questions.

Equity

How will we make sure we're not adding barriers to public access as we consolidate?

Our goal is to improve space efficiencies and reduce costs while preserving core services. There may be many options to keep equitable public access. This includes sharing space with similar agencies and exploring ways to change service delivery to reduce physical space and expand reach.

We will work with you to discuss any concerns about added barriers or disproportionate impacts to traditionally underserved communities.

Other state priorities

How do we consider impacts to public-facing services and the Governor's executive order on customer experience into this work?

When considering your minimum physical office space needs, you will need to make sure you can deliver core services to the public. Where in-person services are not required, think creatively about how to serve the public, including lessons learned from the pandemic.

We can also help you explore options for sharing space with other agencies that have similar services.

What does this mean for hybrid and telework?

Current state policy supports hybrid and telework where it meets business needs, service delivery, and the duties of the position.

Right-sizing office space is consistent with the Governor's broader priorities to improve efficiency, reduce costs, and protect core services. Increased hybrid and telework can support reducing office space.

Agencies should include hybrid and telework in their long-term assessment of minimum office space needed, along with policy, actual space use, and minimum space needed to deliver core public services.

Resources

• Essential facility improvement decision matrix: Use this table to decide whether your request is essential or non-essential.
• Request New Account job aid: Follow the process in this job aid to request access to FPMT.
• Questions to Consider: Use OFM's guide during your facility portfolio review to help you evaluate your minimum office space needs.
• Space Utilization Report: Use this report to see base assumptions of office space utilizations based on your agency's HRMS data.