Government Space Leased to Commercial Activities by Agencies Other Than the General Services Administration

LCD-78-337: Published: Oct 13, 1978. Publicly Released: Oct 13, 1978.

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The Public Buildings Cooperative Use Act of 1976 requires the Administrator of the General Services Administration (GSA) to encourage the location of commercial, cultural, educational, and recreational facilities and activities within public buildings. This law applies only to the GSA and does not authorize other agencies to lease the space they control. Concern was expressed about the leasing activities at the new Federal Home Loan Bank Board building in Washington and about National Bureau of Standards facilities.

The National Bureau of Standards and the Bank Board cited legislation giving them authority to control and manage the space they occupy as authorization to lease space to commercial activities, but no legislation expressly authorizes these agencies to lease the space they control and manage. GSA managed design and construction of the new Bank Board building; although GSA incurred no direct costs relating to leasing to commercial activities, the Bank Board entered into contracts and purchase orders totaling over $1.9 million relating to commercial areas of the building. GSA did incur costs of about $1.3 million for design and construction of an adjacent ice rink and pool complex. Contrary to established real property practices, GSA entered into an unwritten agreement permitting the Bank Board to use part of its land for the ice rink plaza. Because the agreement was not formalized, disputes have arisen concerning the terms of the agreement and the value of services provided.

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