Lease Acquisition:

GSA Can Move HUD's Kansas City Offices More Quickly

GGD-90-30: Published: Nov 21, 1989. Publicly Released: Nov 21, 1989.

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Pursuant to a congressional request, GAO examined the actions that the General Services Administration's (GSA) Kansas City regional office took to procure leased space for the Department of Housing and Urban Development (HUD), focusing on why the regional office terminated the procurement on the award date.

GAO found that: (1) the regional office cancelled the procurement because of an apparent inconsistency in evaluating properties located in the same neighborhoods during the market survey; (2) GSA personnel failed to document and timely review the initial market survey; (3) HUD officials stated that relocation by January 1990 was important because of fire safety concerns and an expiring lease; (4) GSA decided to keep HUD in its current space for an additional year because holding to the original occupancy date would have restricted competition to existing buildings; (5) the estimated lease renegotiation and extension could cost the government up to $570,000; and (6) GSA obtained the owner's agreement to extend the lease for 5 years, but the agreement allowed the government to terminate occupancy after 2 years with no additional cost to the government.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: GSA: (1) moved the HUD employees into another building in September 1990 by moving forward the occupancy date of the lease; and (2) did not extend the lease in the old building, as originally planned, but renegotiated the old lease. As a result, GSA awarded $1,464,000 in rental costs for the old location for October 1990 through December 1990, the period the building will not be occupied.

    Recommendation: The Administrator of General Services should direct the GSA Regional Administrator to reconsider present plans and attempt to: (1) find suitable space for HUD in Kansas City before January 1991, possibly by amending the present solicitation and moving forward the occupancy date; and (2) avoid paying rental costs for the present location for the period it will not be occupied, possibly by utilizing the holdover option and not extending the lease as planned.

    Agency Affected: General Services Administration


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