Although Ful Time Telework won't work for everyont, I do think that there are some 25 - 50% of most Agencies that could perfom their functions from an alternative worksite. Many managers are uncomfortable with this but it would be a matter of changing their style of managing. Instead of "stopping by" a persons desk, they could call or send emails to ask the quick question or provide an assignment.
In many ways, I think full time telework is better from a management perspective since there is no need to determine how much work is being accomplished off site -- because the entire workload must be accomplished offsite. During reviews this becomes and easy questions -- did you or did you not do your assigned work?
As for cost savings, if the onsite workforce is reduced by 25 - 50% (or more), then savings are seen in terms of lease costs, electricity, heating, etc.