Federal Buildings:

Purchase and Options To Expand the Silver Spring Metro Center

GGD-87-101BR: Published: Jul 21, 1987. Publicly Released: Jul 21, 1987.

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In response to a congressional request, GAO reviewed issues related to the General Services Administration's (GSA) acquisition of the Silver Spring Metro Center (SSMC) building in Silver Spring, Maryland.

GAO found that: (1) although GSA followed the proper procedures in the purchase of SSMC, GSA officials believed that the procedures were not sufficiently specific for conducting complex negotiations; (2) the contract for the purchase of the SSMC building included options to lease and subsequently purchase four other buildings; (3) the contract required GSA to exercise the lease options before the purchase options; (4) if GSA exercises the initial purchase options for all buildings immediately after completion, it would spend $240 million for them; (5) the seller corrected or agreed to correct most of the deficiencies GSA listed in its engineering report; and (6) the building's lack of a loading dock and freight elevator, the line-of-sight into the restrooms, its weight carrying capacity, the vertical height between floors, and the air conditioning and electrical power capacities could pose problems for future tenants. GAO also found that: (1) GSA may need to modify the buildings to meet requirements for computer rooms and telemetry equipment; (2) GSA may have difficulty obtaining fee simple title to the third and fourth buildings; (3) GSA requested authority to lease two buildings and proposed moving two federal agencies into them; (4) the purchase price for one building and the base lease prices for four other buildings were slightly below the appraised value; and (5) there was no evidence of a conflict of interest in the purchase by the GSA Administrator.

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