GSA Takes Hard Look at Leasing

The General Services Administration (GSA) will soon prohibit agencies from negotiating their own office leases for spaces of 20,000 square feet or more.

The rule change was posted in the Federal Register on Monday, November 19 (see the link at the bottom of this article).

The rule will not prevent agencies from pursuing their own lease agreements for offices of fewer than 20,000 square feet. GSA has said, however, that it will monitor these agreements more closely than it has in the past.

Agencies have leased their own office space since 1996, due to a previous decision by GSA.

In a public statement released by GSA, Administrator Lurita Doan commented that the change would allow GSA to improve “consistency” and monitor “variables that influence the workspace we provide to our client agencies and the cost to the public."

Reporting by Tim Kauffman in Federal Times in November indicated that the change came as a result of investigations by GSA and the Government Accountability Office. Those investigations showed that the Department of Defense and the Department of Homeland Security, among others, paid higher rents than they should have and circumvented required approvals for large deals.

According to Kauffman, an unnamed GSA spokeswoman said the change is intended to fix problems uncovered by GAO and GSA, rather than to punish agencies. GSA has secured office space rental agreements that are 11 percent below industry averages, Kauffman’s source noted.

“We have the expertise and the tools to get the best deals for agencies who lease space from GSA,” said David Winstead, commissioner of GSA’s Public Buildings Service, in a prepared statement.

Agencies affected by the decision have reacted negatively. GSA’s typical administrative fees of six to eight percent of the lease amount will mean higher rents overall, Kauffman’s article noted.

According to GSA, only 17 of 156 leases issued by agencies in 2007 were greater than 20,000 square feet.

For Tim Kauffman’s complete Federal Times article, visit http://www.federaltimes.com/index.php?S=3160794

For the GSA’s prepared statement, visit http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/10-29-2007/0004692708&EDATE=

Click here For the listing of the new GSA rule change in the Federal Register.