Benefits General Services Administration Provides by Operating Cafeterias in Washington, D.C., Federal Buildings

Gao ID: LCD-78-316 May 5, 1978

Government Services, Inc. (GSI) operates 32 cafeterias and 5 coffee shops in the Washington, D.C., area under contract with the General Services Administration (GSA). The estimated commercial equivalent annual value of benefits provided by the federal government for operating cafeterias and coffee shops in the Washington area is about $9.5 million--$9 million for the space and utilities and $500,000 for equipment maintenance.

GSI had a loss of about $210,000 for calendar year 1977 on its contract with GSA. If the $9.5 million of benefits are included, the total loss would be about $9.7 million. Without these benefits, the cost of food to customers could increase considerably, causing many cafeterias to close. There appears to be no express statutory authorization for operating government-controlled cafeterias in public buildings. The practice of providing the space as a consideration for operating food-service facilities in federal buildings is not unlawful, contrary to public policy, or improper, even though the contractor may appear to have a competitive advantage over other food service operators in the vicinity of federal cafeterias. Government-controlled cafeterias are intended primarily for use by federal employees, but there are no legal restrictions barring the use of federal cafeterias by the public.


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