General Services Administration:

Secret Service Uniformed Division Lease

GGD-99-153: Published: Sep 7, 1999. Publicly Released: Sep 7, 1999.

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Pursuant to a congressional request, GAO provided information on new leased space acquired for the Secret Service's Uniformed Division (SSUD) at 1111 18th Street, N.W., Washington, D.C., by the Public Buildings Service (PBS).

GAO noted that: (1) a lack of adequate internal controls over the leasing process at the General Services Administration's (GSA) National Capital Region (NCR) resulted in PBS' awarding a lease for SSUD on August 5, 1998, above the prospectus dollar threshold without first preparing and submitting a prospectus for the lease to GSA's Senate and House authorizing committees; (2) there was confusion about the costs that were to be considered in determining whether a prospectus was needed; (3) specific written guidance on how to calculate the cost did not exist; (4) although the space requirements increased about 40 percent--from about 50,000 square feet to about 70,000 square feet--during the acquisition process, procedures did not call for the revalidation of the decision that a prospectus was not needed when the space requirements or market rental rates used to make the decision changed during the acquisition process; (5) after a congressional staffer asked questions about the lease on August 31, 1998, NCR officials reviewed the award of the lease and determined that a prospectus should have been prepared and submitted to GSA's Senate and House authorizing committees as provided for in section 7(a) of the Public Buildings Act of 1959, as amended, 40 U.S.C. 606(a), and PBS' policy and procedures; (6) subsequently, NCR has instituted a new policy requiring its Portfolio Management Division to verify all leases before they are awarded; and (7) still, GSA has not developed specific guidance on how to calculate the cost to be used to determine whether a prospectus should be prepared, nor has GSA determined that it needs to revalidate prospectus decisions when space requirements or market rental rates change.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Administrator, GSA, should direct the Commissioner of PBS to issue explicit written guidance defining the specific cost elements that may be excluded from the total full-service rental rate when calculating whether a prospectus should be prepared for a proposed lease. This guidance should also cover the fiscal year threshold that should be used for making this determination for a capital lease and for an operating lease.

    Agency Affected: General Services Administration

  2. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Administrator, GSA, should direct the Commissioner of PBS to establish a requirement specifying that the decision that a lease is below prospectus-level be documented and revalidated whenever there is a change in one or both of the factors on which such a decision is based--agency space requirements and market rental rates--could affect the outcome of the decision on whether a prospectus would be required.

    Agency Affected: General Services Administration

 

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