General Services Administration

This report reviews the process used by the General Services Administration's (GSA) Public Buildings Service to procure leased space for federal agencies. Members of Congress have raised concerns about possible limitations on competition during the lease solicitation process. GAO (1) identifies the approaches that three of GSA's 11 offices--Philadelphia, Pennsylvania; Atlanta, Georgia; and Washington, D.C.--used to lease space, including how each region determines an agency's space requirements, identifies and assesses potential space, and communicates with actual offerors, and (2) assesses the effect of solicitation practices on competition.

GAO noted that: (1) all three regions used the traditional, simplified, and sole source approaches to leasing; (2) under the traditional leasing approach, a specific space need is generally advertised in the local newspaper to allow everyone who has space that could meet the agency's requirements to submit an offer; (3) the simplified leasing approach is used to expedite the leasing process for leases that are expected to be under $100,000 in net annual rent; (4) under this approach, the contracting officer has to solicit only three sources, to promote competition, or document the file to explain the lack of competition; (5) because the agency's space requirements are usually less than 10,000 square feet, they are not required by regulation to be advertised in the newspaper; (6) the sole source approach is used when the contracting officer determines that only one source can meet the agency's requirements, and thus only the one source is solicited; (7) in all three regions, specific space requirements are developed and defined primarily by the customer agencies; (8) PBS officials said the contracting officers typically question an agency's requirements only if they have concerns about their ability to secure sufficient competition because of the nature of the space requirements; (9) to determine which sites could satisfy an agency's space requirements, the contracting officer or realty specialist and the customer agency representative may visit the potential sites; (10) according to PBS officials, much of the communication with potential and actual offerors during the leasing process is oral; (11) required communication with actual offerors was well documented in some of the lease files; (12) for other lease files, contracting officers told GAO that all required communication occurred, even though it was not always documented as required by regulation; (13) the processes used to develop the agencies' space needs, identify and assess potential space, and communicate with the actual offerors did not appear to unduly restrict competition; and (14) GAO reviewed 45 of the 360 leases that became effective in three regions in fiscal year 1999 and found that: (a) the space needs were generally broad enough to elicit multiple offers; (b) representatives for the buildings that PBS identified and assessed were solicited unless PBS determined that a building clearly could not meet the agency's requirements; and (c) communication with actual offerors was generally conducted according to regulation, although it was not always documented as required.