Federal Manager's Daily Report

The GSA has taken some steps to simplify the leasing of space on behalf of federal agencies but the process overall still involves complexities not common in private sector leases that can lead to delays and added costs, GAO has said.

It cited standard clauses sought by GSA to give it the option to terminate the lease early (which increases a lessor’s risk of a vacancy); allow it to substitute the originally intended tenant agency in a building for another; and set requirements for cleaning and maintenance services more stringent than in typical non-government leases.


Such clauses “can lead lessors to increase their rent rates or decide not to bid on a lease—thereby increasing federal leasing costs or decreasing competition,” a report said. In addition, “lengthy negotiations can increase costs and make federal leases less attractive to lessors,” it said.

“Stakeholders also identified the time it takes to complete a lease and GSA’s propensity for staying in a space beyond the term of a lease as increasing costs and making GSA leases less attractive to potential bidders,” it said.

Some of those practices reflect contracting policy rather than requirements of law or rule, GAO added, and GSA has taken steps such developing a simplified lease model.

However, it said that GSA uses that model for only about a third of its potential reach, and has not evaluated the impact of its use. GSA similarly should broaden the range of stakeholders from which it gathers information about potential drawbacks in its leasing practices, the report said.

See also, GSA Under-Reporting Unused Lease Space, IG Says