Government Accountability Office

Pay Market Value for Office Space

In 2009 I was a bargaining unit participant in the negotiations process for relocation of a Field Office in Ontario, OR. The Field Office had a total of 9 employees, including the contracted guard. The FO was lucky if it served 100 in office customers in a day. During the negotiations process I was given a copy of the lease agreement developed and signed by GSA for the new building that was being built for Social Security. The area the building was being built in, Ontario, OR had extremely low property values (and continues to do so), and construction rates were not extremely high. I was told during the negotiations process that government rules indicated that the life of the lease was such that SSA/GSA should not be paying more than the value of the property over the course of the lease. And yet, the total value of the lease signed was in excess of $2.4 Million. Knowing about real estate and construction, there is no way the construction of the building provided to SSA cost more than $1.25 million. And yet, SSA was paying in excess of $22000/month for rent of this space. This is a ridiculous sum, and it is payments to contractors like this that put us in the situations we are in financially.

 

To eliminate this ridiculous practice, GAO and the Federal Government would be well served to change laws to require agencies to purchase office space for Market Value, employ a contracted office building manager at market value, and then if/when the building was no longer suitable the agency could sell the building for a reasonable price and invest any recovered funds towards the purchase/development of new office space.

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Idea No. 2936