When I first considered starting my own company focused on helping owners and brokers obtain or maintain GSA leases, I immediately began reaching out to commercial real estate brokers, GSA building owners, and anyone else who had an opinion that I valued. During this process of exploration, I was shocked by a common theme surrounding GSA Lease Contract Award Decisions. And that theme could be summarized with a simple question:
Doesn’t GSA Just Award Leases to People They Like?
This belief always seemed to stem from participation in a GSA lease procurement where the broker/owner offered what they believed to be a “superior” building, but GSA would ultimately make the award to an “inferior” building. So clearly GSA preferred that building owner. Right?
Immediately I realized three things.
- If this was a theme in 50%+ of the conversations I was having, this must be a fairly pervasive belief.
- If this belief is pervasive in the market, it must be having an effect on the amount of competition that GSA receives in its GSA lease contract procurements.
- Finally, this belief, based on the examples that were cited, had NOTHING to do with favoritism and EVERYTHING to do with a misunderstanding of the process surrounding GSA Lease Contract award decisions.
Since leaving GSA, it has been one of my goals to address this misunderstanding in the hope that it would decrease its apparent pervasiveness.
So, if not through some form of favoritism, then how does GSA select the winning party, also known as the successful offeror. The most common approach is the Lowest Price Technically Acceptable procurement method, or LPTA for short. Specifically note the language, “Technically Acceptable”. All of this is outlined in the GSA Request for Lease Proposal (RLP), but here are some bullet points on what this entails:
- All of the paperwork was properly completed during the offer phase.
- There was no request for any changes to the lease language during a competitive procurement.
- ALL of the required documents requested in the RLP package were submitted during the offer phase (parking plan, amenity map, Form 12000, signed and initialed lease package, etc.)
- The offered building is capable of meeting all lease requirements including the agency’s requirements outlined in the agency’s requirements package.
While this is certainly an abridged list, please note that none of these key requirements speak to a GSA lease contract award preference for the “nicest looking” building. In fact, most procurements do not even specify a particular class of building. The only requirement for a building is that it is capable of meeting the requirements of the lease and the agency’s needs.
It is for this reason that an ownership group, offering a C+ building with a modernization plan, can beat a beautiful Class A building in a prime location. Under a LPTA procurement, GSA only cares that the selected building can be brought up to their lease standards prior to occupancy.
And that, I believe, is the largest source of this misperception in the marketplace. If that apparent “inferior” building can be modernized to a point where it meets the minimum standards briefly described above, AND this can be done at an offered price that yields the lowest present value per ANSI-BOMA Office Area Square Foot, then that is how an “inferior” building ultimately becomes the building selected for award.
The GSA Lease Contract Award Decisions has NOTHING to do with an unstated personal preference and EVERYTHING to do with strict adherence to a process that is outlined in great detail in the GSA RLP.
Bottom line, if you are going to effectively compete for a GSA lease contract then you must do 1 of 2 things. If you decide to go at it alone, then you MUST read the RLP and the Lease associated with the procurement. Yes, it is boring. Yes, it is often difficult to determine what the Government is looking for and why. And yes, there can be a lot to read and digest, but you must understand the rules of the game as well as what you are signing up for.
The other option is to hire someone to walk you through the process. Yes, my company is one source for this expertise but there are others out there that can assist you as well. Just make sure you are hiring someone that has actually worked at GSA previously and who truly understands the process as well as the lease that you will ultimately be bound to.
Chad worked in federal real estate at the GSA and the U.S. Navy for over 15 years. He now assists building owners and brokers to obtain and maintain leases with GSA. When he is not using his expertise in this niche to assist his clients, he is teaching the very classes GSA requires for its leasing employees.
Have a quick question about the GSA lease or their leasing process? Feel free to give Chad a call at (720) 626-5202 or send an email to chad@arcoresolutions.com. He is always willing to answer quick questions regarding these topics, no strings (or fees) attached.
Chad worked in federal real estate at the GSA and the U.S. Navy for over 15 years. As Principal of Arco Real Estate Solutions, he now assists building owners and brokers obtain and maintain leases with GSA and other Federal Agencies. When he is not using his expertise in this niche industry to assist his clients, he serves as an instructor for the very classes GSA requires for its leasing employees.