GSA Leasing Practices in Regards to Public Buildings Act of 1959

GAO was asked for its opinion on whether section 7(a) of the Public Buildings Act of 1959, as amended, 40 U.S.C. 606(a), permits expenditures of up to $500,000 on a building construction, alteration, leasing, or repair project having a total cost exceeding that amount, prior to congressional approval of the building prospectus. GAO was also asked for a report on any prior instances in which the General Services Administration (GSA) has spent up to $500,000 prior to prospectus approval, on a project with a total cost exceeding $500,000 and requiring congressional approval.

GAO found that the GSA may use funds appropriated for projects requiring prospectus approval prior to the submission or approval of the prospectus in a situation where Congress specifically appropriates funds to GSA for the project. With regard to the question about prior GSA practices, GAO was told informally by GSA staff that GSA believes that under the Act, it can spend a cumulative total of $500,000 for repairs and alterations to a public building without prospectus approval. GSA seeks prospectus approval whenever $500,000 in repairs and alterations have been performed on a building and more work is determined to be necessary. Once it is decided that a prospectus will be prepared for a building, it is the policy of GSA not to spend money on items included in the prospectus prior to prospectus approval by the committees, unless in an emergency or where failure to act quickly would be detrimental to Government operations. If this is in fact GSA's official view, we disagree to the extent that prospectus approval is not sought when GSA knows or reasonably believes that the project will ultimately cost more than $500,000. The requirement for prospectus approval is imposed on projects whose attributes will ultimately require an expenditure over the statutory limit. It is not imposed only on the surplus cost over $500,000.