Use of Escalation Clauses in GSA Leases
PLRD-83-8
Published: Nov 01, 1982. Publicly Released: Nov 01, 1982.
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Highlights
GAO reviewed the use of escalation clauses in General Services Administration (GSA) leases and the use of the Consumer Price Index (CPI) as a basis for making annual adjustments to rent payments to cover increases in lessors' operating costs.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| General Services Administration | The Administrator of General Services should require contracting officers to ensure that the operating cost bases that are subject to CPI escalation are reasonable when leases are negotiated on a sole-source basis. |
Closed – Implemented
On March 16, 1984, GSA issued instructions to its regional offices requiring contracting officers to ensure that CPI cost base lease clauses are reasonable. The instructions, if followed, comply fully with the recommendation.
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Topics
Cost analysisLeasing policiesRental ratesSole source procurementConsumer price indexBid proposalsSolicitationsPrivate sectorPublic buildingsContracting officers