GSA Is Overcharging Some Federal Agencies for Protective Services

LCD-80-93: Published: Aug 5, 1980. Publicly Released: Aug 5, 1980.

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Under the law, the General Services Administratin (GSA) is directed to charge agencies rent for the space it provides, and the rental, or standard level user charges (SLUC), should approximate the commercial charges for comparable space and services. However, the law does not contain criteria or guidance for computing comparable commercial charges. Independent appraisers are contracted to estimate comparable commercial charges. While little guidance is given to the appraisers, they are told that the rates should reflect the SLUC, including cleaning, temperature control, illumination, and initial alterations. The form for recording assessments provides a space for including estimated security, or protection costs, but appraisers are not told whether, or at what level, protection services are to be included in estimating the rates. After receiving the appraisers' estimated fair annual rental rates, GSA adds anticipated inflation and a surcharge for guard and protection services to the beginning of the first fiscal year in which the rates are to be charged to the agencies.

A review of the GSA management of reimbursable services to federal agencies in two of the ten GSA regions revealed that GSA had been overcharging some Federal agencies for protection services. This problem may well exist in the remaining GSA regions. It was suggested that GSA determine the amounts appraisers included in the rates for fiscal years 1980 and 1981 for protection service and reduce future billings by the amount of the overcharge. GSA did not agree with this, because it believed it has been undercharging tenants over the years due to lower than actual inflation factors included in the SLUC. GAO believed that charging tenants twice for protection was not equitable, and that the GSA failure to provide adequately for inflation in past billings was no justification for overcharging agencies for protection in future billings.

Recommendation for Executive Action

  1. Status: Closed

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

    Recommendation: The Administrator, GSA, should direct the Commissioner, Public Buildings Service to issue guidance to appraisers which clearly eliminates consideration of protection costs when computing fair annual rental rates, since such costs are included in the GSA protection surcharge. He should be further directed to determine the amounts included by appraisers for protection costs in existing rental rates for all federal agencies and reduce future billings by the amount of the overcharges.

    Agency Affected:


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