GSA To Offer Choice in Real Estate Leasing to Federal Agencies

GSA #9333

July 12, 1996
Contact: Johanna Roark

On Columbus Day, the General Services Administration will offer federal agencies the option of leasing office space to meet their own needs. The GSA announcement follows through on a recommendation of the Clinton Administration's National Performance Review and comes as part of the new Can't Beat GSA Leasing Program, a wholesale overhaul of GSA's leasing services designed to make government leasing faster, cheaper and more compatible with private sector real estate practices.

Since its establishment in 1949, GSA has been the government's sole agent for leasing private office space. GSA currently leases 170 million square feet of work space (the size of almost 50 Pentagon buildings) for 100 federal agencies at an annual cost of $2.2 billion.

David J. Barram, Acting Administrator of the U.S. General Services Administration (GSA), and Robert A. Peck, Commissioner of GSA's Public Buildings Service (PBS) made the announcement following the Can't Beat GSA Leasing Conference in Chicago, July 9-11, in which all of GSA's 700+ leasing specialists and managers learned streamlined leasing practices and committed themselves to faster, more cost-effective service.

Barram said that the new leasing program will improve GSA's responsiveness to clients, reduce the time it takes to lease space, and increase savings. The new leasing program gives PBS employees the tools and training needed to compete successfully against anyone.

GSA already has a tremendous competitive advantage going in its favor, Peck said. Based on its 50 years experience, GSA knows and understands the requirements of federal acquisition statutes and regulations, the needs of Federal agencies and the economics of the private real estate markets throughout the country.

With a nationwide network of professionally staffed offices, GSA is able to provide customized solutions and competitive market rents. Further, he said, GSA has experience with Federal workplace initiatives such as child care and telecommuting and provides the full range of real estate services, including space planning and lease administration.

In the end, Peck said, when agencies are given the choice, he expects most will stay with GSA. But the new program, and the challenge of competition, will help GSA's specialists focus better on timeliness and bottom line results.

Under the new program, employees are freed from cumbersome procedures, complicated forms, and duplicative management reviews. (See page three for examples.) Taken together, the reforms will make GSA lease negotiations faster and more flexible, while allowing the government to leverage its size in the marketplace more effectively.

To further improve operations, later this year new computer software, used by a major corporate real estate activity, will be installed for use by GSA leasing personnel.

The Can't Beat GSA Leasing initiative builds on lessons learned in a number of GSA Reinvention Labs under the National Performance Review. According to Peck, these practices have already resulted in cutting in half the average time it takes GSA to obtain leased space and have resulted in savings of more than $300 million dollars.

Barram said Can't Beat GSA Leasing will become a major part of GSA's contribution to the fulfillment of President Clinton's promise to make our government work better and cost less.

Examples of changes to the GSA leasing process, none requiring legislative action, that are being instituted under Can't Beat GSA Leasing include:

� Use of three-step leasing practice
� Eliminate mandatory use of SF 81
� Parallel track based on minimum or preliminary requirements
� Partnering with clients to tailor projects to their needs
� Alternative advertising for >10,000 sq.ft.
� Use agreements (blanket or individual) tailored to customers
� Use of Internet for advertising and communications with potential offerors
� Eliminate use of standardized market survey forms
� Eliminate use of standard Solicitation For Offers approach
� Rely on local codes to maximum extent practical
� Eliminate mandatory technical reviews
� Allow potential offerors to reuse certifications and representations
� Utilize market-based rent approaches
� Reduce occupancy costs by providing or purchasing services from alternative sources
� Eliminate mandatory use of Consumer Price Index escalations
� Provide optional tenant improvement specifications and use market standard tenant improvement allowances
� Explore means for offerors to submit proposals electronically (in process)
� Short list to specific number for efficiency when stated in Solicitation For Offers (approval pending)
� Enhance negotiation strategies to capture savings from market variances, including leasing commission costs
� Permit verbal notification of the close of negotiations and eliminate written request for best and final offers (approval pending)
� Eliminate pre-award IG review (approval in process)
� Eliminate use of mandatory appraisals when not needed
� Eliminate standard price negotiation memorandums and replace with minimum necessary documentation
� Allow award without negotiation, where appropriate
� Issue notice to proceed on buildout with award letter, pending development and execution of contract
� Aggressively pursue integrated services to facilitate occupancy
� Take advantage of current leasing relationship--extend, renew, succeed, renegotiate
� Change the general clauses that can adversely affect lessor financing if deemed financially beneficial
� "Time Out" for lease actions canceled