Federal Statutes and Executive Orders Applicable to the Public Buildings
Service's Leasing Program (Correspondence, 10/18/1999, GAO/GGD-00-27R).
Pursuant to a congressional request, GAO identified the legislative and
administrative requirements that apply to the Public Buildings Service's
(PBS) leasing program and provided information on the mechanisms that
PBS has established to implement and comply with these federal statutes
and executive orders.
GAO noted that: (1) in its review, GAO identified one statute that
established the General Services Administration's basic authority to
lease space for federal agencies for periods up to 20 years and another
statute that established congressional oversight of large lease
projects; (2) GAO identified another 27 statutes and 7 executive orders
that govern PBS' leasing process; (3) some of these statutes and
executive orders apply to every lease, and others apply only under
certain circumstances; (4) the provisions of these statutes and
executive orders deal with issues ranging from health and safety
matters, such as fire safety and seismic standards, to the prohibition
against kickbacks and payments to influence the award of leases; (5)
some of the statutes address requirements of contractors in relationship
to their subcontractors--such as use of small and disadvantaged
businesses and payment of fair wages; (6) PBS uses several different
mechanisms to implement and comply with various requirements imposed by
statutes and executive orders; (7) PBS implements most of the
requirements through clauses in its solicitation for offers and the
general-clauses form, which are part of the official lease; and (8) PBS
also uses orders, the General Services Administration Regulation, and
certifications and representations by the lessors to implement and
comply with legislative and administrative requirements.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-00-27R
TITLE: Federal Statutes and Executive Orders Applicable to the
Public Buildings Service's Leasing Program
DATE: 10/18/1999
SUBJECT: Federal facilities
Internal controls
Leases
Statutory law
Administrative law
Executive orders
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GAO
Permit No. G100
(240356)
B-283789
Page 6GAO/GGD-00-27R Federal Statutes and Executive Orders App
licable to PBS' Leasing Program
B-283789
October 18, 1999
The Honorable Fred Thompson
Chairman, Senate Committee on
Governmental Affairs
United States Senate
Subject: Federal Statutes and Executive Orders Applicable to
the Public Buildings Service's Leasing Program
Dear Mr. Chairman:
The General Services Administration (GSA), through its Public
Buildings Service (PBS), is responsible for leasing space for
federal agencies. As you requested, this letter identifies the
legislative and administrative requirements that apply to PBS'
leasing program and provides information on the mechanisms
that PBS has established to implement and comply with these
federal statutes and executive orders. The enclosure lists and
provides a brief explanation of each of the federal statutes
and executive orders that are applicable to PBS' leasing
program.
Results
In our review we identified one statute that established GSA's
basic authority to lease space for federal agencies for
periods up to 20 years and another statute that established
congressional oversight of large lease projects. We identified
another 27 statutes and 7 executive orders that currently
govern PBS' leasing process. Some of these statutes and
executive orders apply to every lease, and others apply only
under certain circumstances. The provisions of these statutes
and executive orders deal with issues ranging from health and
safety matters, such as fire safety and seismic standards, to
the prohibition against kickbacks and payments to influence
the award of leases. Some of the statutes address requirements
of contractors in relationship to their subcontractors-such as
use of small and disadvantaged businesses and payment of fair
wages.
PBS uses several different mechanisms to implement and comply
with various requirements imposed by statutes and executive
orders. PBS implements most of the requirements through
clauses in its solicitation for offers (SFO) and the general-
clauses form, which are part of the official lease. PBS also
uses orders, the General Services Administration Regulation
(GSAR), and certifications and representations by the lessors
to implement and comply with legislative and administrative
requirements.
Scope and Methodology
We verified a list of federal statutes and executive orders
that are applicable to PBS's leasing program that was
developed by GSA. In verifying this list we reviewed federal
statutes and executive orders, GSA documents, and our issued
reports. We also discussed this list with GSA officials.
To identify the mechanisms that PBS has established to
implement and comply with these statutes and executive orders,
we spoke with cognizant officials in PBS's National Office. We
also reviewed the mechanisms identified by PBS officials to
provide more information on them and determine if they
addressed the requirements of the federal statutes and
executive orders. These mechanisms included GSA's standard SFO
and its general-clauses form, representations and
certifications form that the lessors must sign, regulations,
orders, and desk guides. We did not evaluate the effectiveness
of these mechanisms for ensuring compliance with federal
statutes and executive orders.
We did our work between May and October 1999 in accordance
with generally accepted government auditing standards. We
requested comments on a draft of this letter from the
Administrator of GSA. GSA's comments are discussed at the end
of this letter.
GSA's Basic Authority to Lease Space and Congressional
Oversight
GSA's basic authority to lease space for federal agencies,
which is exercised by PBS, is contained in section 210 (h) of
the Federal Property and Administrative Services Act of 1949,
as amended. The Federal Property and Administrative Services
Act of 1949 created GSA as an independent agency in the
executive branch. The 1949 Act gave the Administrator of
General Services broad authority in managing real property,
including authority to (1) prescribe regulations governing
real property management and leasing, (2) lease real property
for periods up to 5 years, and (3) delegate lease authority to
the head of any federal agency. In 1958, the act was amended
to give GSA the authority to enter into leases for up to 10
years. The act, 40 U.S.C. 490 (h), was amended again in 1959
to increase the maximum allowable term of leases to the
current 20-year period. One reason for this change was to
provide greater flexibility in obtaining leased space, which
was expected to result in a lesser annual cost to the
government. In 1989, another amendment to the act gave GSA the
authority to lease space in buildings erected on land owned by
the United States for periods not to exceed 30 years.
Section 7(a) of the Public Buildings Act of 1959, 40 U.S.C.
606(a), provided for GSA to submit prospectuses to its Senate
and House authorizing committees for projects for the
construction, acquisition, and alteration of public buildings
over a certain dollar amount. In 1972, Congress increased
congressional control over large lease projects by amending
section 7(a) of the Public Buildings Act of 1959 to include
leases and lease alteration projects that exceeded a certain
dollar amount. The dollar threshold for the submission of the
prospectus is adjusted annually by PBS, as authorized by the
act, to reflect changes in costs during the preceding year.1
PBS Uses Clauses in Its Leases to Implement Most Legislative
and Administrative Requirements
PBS uses clauses in its SFO and a general-clauses form to
address 19 federal statutes and 4 executive orders that relate
to the leasing of buildings for the federal government's use.
According to PBS officials, the SFO and general-clauses form
generally contain language similar to the statutory language
and are part of the leasing agreement signed between the
lessor and PBS. The contracting officer has flexibility to
modify some of the clauses within the SFO; however, according
to the instructions for the SFO, new clauses should contain
"substantially the same information" as the original clauses.
According to a PBS official, the language in the general-
clauses form, which are prescribed by statute or executive
order, may also be changed provided the change does not
violate the intent of the underlying statute or executive
order.
PBS' standard SFO has certain clauses that are mandated by
law. These clauses address issues such as fire safety, seismic
standards, accessibility, and overall building safety in
response to specific federal statutes that establish
requirements in these areas. Other federal statutes are not
applicable to all leases and are addressed through clauses in
the SFO that can be deleted or modified as appropriate. Many
of these federal statutes address issues that typically arise
during the construction of a building; and thus, they pertain
to GSA leases when a building is being specifically built for
the government to lease. For example, the requirement for the
payment of fair wages applies to construction contractors and
the requirement for payment of relocation benefits may apply
to persons displaced due to lease construction projects. There
is also a clause in the SFO to cover the executive order on
seismic standards for new buildings, including those
constructed for lease by the government.
Several other federal statutes and executive orders are also
addressed through specific clauses in PBS' SFO and the general-
clauses form. The requirements in these statutes include
making the building accessible to the handicapped, giving
preference to historic properties, conserving energy and
water, allocating space for vending facilities to be operated
by blind vendors, providing a drug-free workplace, and
providing equal employment opportunities. Other federal
statutes concerning contract administration issues, such as
payments, disputes, and the government's right to examine the
contractor's records, are also addressed through specific
clauses in the general-clauses form.
On June 3, 1999, the President issued Executive Order 13123
reemphasizing the federal government's commitment to energy
and environmental progress in operating its facilities. The
order includes preferences for energy-efficient buildings that
have the "ENERGY STAR label" in the selection criteria for
acquiring leased buildings. The order also requires the
Administrator of GSA, in collaboration with the Secretary of
Defense, the Secretary of Energy, and other agency heads, to
develop model lease provisions that incorporate energy
efficiency and sustainable design within 180 days of the date
of the order. This executive order revokes Executive Order
12902 of March 9, 1994, on Energy Efficiency and Water
Conservation.
Following are the 19 federal statutes and 4 executive orders
that PBS currently implements through clauses in the SFO and
general-clauses form. According to GSA officials, the fifth
executive order listed, Executive Order 13123, will be
implemented in this same manner after the model lease
provisions have been developed:
�Anti-Kickback Act of 1986;
�Assignment of Claims Act of 1940;
�Contract Disputes Act of 1978;
�Contract Work Hours and Safety Standards Act of 1962;
�Copeland Act of 1934;
�Covenant Against Contingent Fees;
�Davis-Bacon Act of 1931;
�Drug-Free Workplace Act of 1988;
�Earthquake Hazards Reduction Act of 1977;
�Energy Policy Act of 1992;
�Examination of Records;
�Fire Administration Authorization Act of 1992;
�Occupational Safety and Health Act of 1970;
�Prompt Payment Act;
�Public Buildings Cooperative Use Act of 1976;
�Randolph-Sheppard Act;
�Small Business Act;
�The Architectural Barriers Act of 1968;
�Uniform Relocation Assistance and Real Property Acquisition
Policies Act of 1970;
�Executive Order 11375, Equal Employment Opportunity;
�Executive Order 12699, Seismic Safety of Federally and
Federally Assisted or Regulated New Building Construction;
�Executive Order 12902, Energy Efficiency and Water
Conservation at Federal Facilities;2
�Executive Order 13006, Locating Federal Facilities on
Historic Properties in Our Nations Central Cities; and
�Executive Order 13123, Greening the Government Through
Efficient Energy Management.
The enclosure provides a brief explanation of these statutes
and executive orders.
Regulations, Orders, and Lessor Certifications are Also Used
to Implement Requirements
The remaining eight federal statutes and three executive
orders that are applicable to PBS' leasing program are
addressed through regulations, orders, and lessor
certifications. Four of these federal statutes and the three
executive orders address the priority given to different
locations when determining where to lease a building. For
example, if an agency must be located in an urban area, an
executive order states that agencies shall give first
consideration to locating federal facilities within central
business areas. If an agency is not required to be located in
an urban area, the Rural Development Act requires that first
priority be given to location in a rural area. Also, PBS
cannot lease buildings located within floodplains or wetlands
unless there are no practicable alternatives; and PBS must
assess the environmental impact associated with major federal
actions, including leasing. PBS implements these statutes and
executive orders through orders setting forth its location
policy for leased buildings.
The other four federal statutes relate to the use of full and
open competition in acquiring leased space, budget
scorekeeping requirements, and the prohibition of payments to
influence the award of leases. PBS implements the
requirements of these statutes through GSAR, compliance with
OMB Circular No. A-11, appendixes A&B, and representations and
certifications that lessors must sign. The solicitation and
award of leases must be done in compliance with the GSAR,
which establishes the policies and practices for the
acquisition of leased real property. Also, in the budget
process leases must be scored in compliance with OMB Circular
No. A-11, appendixes A&B. Lessors are also required to sign a
list of representations and certifications that, among other
things, states that no appropriated funds have been paid to
influence the awarding of the contract.
Following are the eight statutes and three executive orders
that PBS implements through regulations, orders, and lessor
certifications:
�Competition in Contracting Act of 1984;
�Balanced Budget Act of 1997;
�Intergovernmental Cooperation Act of 1968;
�Rural Development Act of 1972;
�National Historic Preservation Act of 1966;
�Officials Not to Benefit;
�Prohibition on Use of Appropriated Funds to Influence Federal
Contracting;
�The National Environmental Policy Act of 1969;
�Executive Order 11988, Floodplain Management;
�Executive Order 11990, Protection of Wetlands; and
�Executive Order 12072, Federal Space Management.
The enclosure provides a brief explanation of the provisions
of these statutes and executive orders.
Agency Comments
We requested comments on a draft of this letter from the
Administrator of GSA. On October 13 and 15, 1999, we obtained
oral comments from PBS' Assistant Commissioner, Office of
Business Performance and the Deputy Associate General Counsel,
Real Property Division, Office of General Counsel,
respectively. They agreed that the draft letter generally
presented the facts accurately; they also provided some
technical comments that we have incorporated as appropriate.
We are sending copies of this report to Senator George V.
Voinovich, Chairman, and Senator Max S. Baucus, Ranking
Minority Member, Subcommittee on Transportation and
Infrastructure, Senate Committee on Environment and Public
Works; Representative Bob Franks, Chairman, and Representative
Robert Wise, Jr., Ranking Democratic Member, Subcommittee on
Economic Development, Public Buildings, Hazardous Materials
and Pipeline Transportation, Committee on Transportation and
Infrastructure; the Honorable David J. Barram, Administrator,
GSA; and to others upon request.
If you have any questions about this letter, please call me or
Ron King on (202) 512-8387. Key contributors to this
assignment were Maria Edelstein and Susan Michal-Smith.
Sincerely yours,
Bernard L. Ungar
Director, Government Business
Operations Issues
Enclosure
_______________________________
1 The dollar threshold for leases and lease alteration
projects for fiscal year 2000 was $1,930,000 and $965,000,
respectively.
2 Executive Order 12902 was revoked, as of June 3, 1999, by
the issuance of Executive Order 13123, Greening the Government
Through Efficient Energy Management.
Enclosure
Federal Statutes and Executive Orders Applicable to GSA's
Leasing Program
Page 9GAO/GGD-00-27R Federal Statutes and Executive Orders App
licable to PBS' Leasing Program
Table 1: Federal Statutes Applicable to the GSA Leasing
Program
Statute Description
Anti-Kickback Act of 1986 (41 Prohibits a contractor from
U.S.C. 51-58) soliciting or receiving
kickbacks from subcontractors
in return for subcontract
awards. The requirements of
this act are not applicable to
contracts below the simplified
acquisition threshold for
leasing.a
Assignment of Claims Act of Allows contractors to assign
1940 (31 U.S.C. 3727) rights to payment, including
rent, to established financing
institutions.
Balanced Budget Act of 1997 (20 Imposes budget scorekeeping
U.S.C. 902 note) requirements for lease-
purchases, capital leases, and
operating leases. See H.R.
Conference Report No. 105-217,
at 1007-1014, 1997. See also,
H.R. Conference Report No. 101-
964, accompanying the Omnibus
Budget Reconciliation Act of
1990, Title XIII, The Budget
Enforcement Act of 1990, at
1172-1176. The scorekeeping
rules can be found in OMB
Circular No. A-11, appendices
A & B.
Competition in Contracting Act Requires GSA to acquire leased
of 1984 space through the use of full
(41 U.S.C. 251 et seq.) and open competitive
procedures.
Contract Disputes Act of 1978 Requires disputes arising from
(41 U.S.C. 601-613) federal contracts to be
adjudicated by established
procedures.
Contract Work Hours and Safety Imposes 40-hour work week and
Standards Act of 1962 (40 time and a half overtime
U.S.C. 327-333) requirements on certain
contracts. This act is
applicable to lease
acquisitions when an offeror
proposes to construct a
building or completely
reconstruct or rehabilitate an
existing building for the
predominant use of the
government. The act does not
apply to contracts below the
simplified acquisition
threshold.a
Copeland Act of 1934 (18 U.S.C. Makes it unlawful for a
874; 40 U.S.C. 276c) contractor to force a kickback
from any person employed in the
construction or repair of a
public building or public work.
The act also requires
contractors and subcontractors
to furnish a compliance
statement with respect to wages
paid to employees. This act is
potentially applicable to lease
acquisitions when an offeror
proposes to construct a
building or completely
reconstruct or rehabilitate an
existing building for the
predominant use of the
government.
Covenant Against Contingent Requires that no individuals
Fees (41 U.S.C. 254(a)) other than bona fide employees
or established bona fide agents
maintained by the contractor
have been retained to solicit
or obtain a federal contract
for a contingent fee. This
requirement is not applicable
to contracts below the
simplified acquisition
threshold for leasing.a
Davis-Bacon Act of 1931 (40 Provides for payment of
U.S.C. 276a-276a-7) prevailing wages to laborers on
federal construction projects.
This act is potentially
applicable to lease
acquisitions when an offeror
proposes to construct a
building or completely
reconstruct or rehabilitate an
existing building for the
predominant use of the
government.
Drug-Free Workplace Act of 1988 Requires contractors to take
(41 U.S.C. 701-707) actions to reduce the
possibility of drug use at the
site of the performance of
work. The requirements of the
act do not apply to contracts
below the simplified
acquisition threshold for
leasing.a
Earthquake Hazards Reduction Required adoption of standards
Act of 1977 for assessing the seismic
(42 U.S.C. 7705b) safety of existing buildings
constructed for or leased by
the government that were
designed and constructed
without adequate seismic design
and construction standards.
Energy Policy Act of 1992 (42 Requires the federal government
U.S.C. 8253) to meet 20-percent energy
reduction targets by the year
2000. This includes federally
leased space.
Examination of Records (41 Authorizes the head of an
U.S.C. 254d) agency to inspect records of
federal contractors and
requires a contract clause
giving similar authority to the
Comptroller General. This
authority is not applicable to
contracts below the simplified
acquisition threshold for
leasing.a
Federal Property and Created GSA as an independent
Administrative Services Act of agency and gave the
1949 (40 U.S.C. 486, Administrator of GSA authority
490(d)(h), 751) to (1) prescribe regulations
governing real property
management and leasing, (2)
lease real property for periods
up to 5 years, and (3) delegate
lease authority back to the
head of any federal agency.
Amended in 1959 to provide GSA
with 20-year leasing authority.
Amended again in 1989 to
provide GSA authority to lease
space for periods not to exceed
30 years in buildings erected
on land owned by the United
States.
Fire Administration Requires that an entire
Authorization Act of 1992 building have sprinklers or
(15 U.S.C. 2227) provide an equivalent level of
life safety when federal funds
are used to lease 35,000 square
feet or more of space in a
building (under one or more
leases) and some portion of the
leased space is on or above the
6th floor. Also requires that
all government leases contain a
provision requiring that all
hazardous areas of the building
have an automatic sprinkler
system.
Intergovernmental Cooperation Requires GSA to consult with
Act of 1968 planning agencies and local
(40 U.S.C. 531-535) elected officials and to
coordinate federal projects
with development plans and
programs of the state, region,
and locality where the project
is to be located.
National Historic Preservation Requires listed historical
Act of 1966 properties to be protected from
(16 U.S.C. 470 - 470w-6) harm as a result of federal
actions, including leasing.
Occupational Safety and Health Requires GSA to ensure that
Act of 1970 space leased and assigned to
(29 U.S.C. 651-678) agencies provides safe,
healthful working conditions,
including building features
such as lighting, guard rails,
indoor air quality, fire safety
features, emergency elevator
requirements, etc.
Officials Not to Benefit (41 Prohibits any member of
U.S.C. 22) Congress from receiving any
benefit arising from a federal
contract.
Prohibitions on Use of Requires certifications from
Appropriated Funds to Influence contractors that appropriated
Federal Contracting (31 U.S.C. funds have not and will not be
1352) paid to any person to influence
the award of a federal
contract.
Prompt Payment Act (31 U.S.C. Requires federal payments to
3901-3907) contractors to be made in an
expeditious manner, provides
penalties for late payment by
the government, and requires
that the government be entitled
to discounts for early payment.
Public Buildings Act of 1959 Calls for GSA to submit leases
(40 U.S.C. 606) with annual rental, excluding
services and utilities, in
excess of $1,930,000 and lease
alteration projects in excess
of $965,000 to its Senate and
House authorizing committees.
The amounts above were
applicable for fiscal year 2000
and are to be indexed annually.
Public Buildings Cooperative Requires GSA to afford a
Use Act of 1976 preference to historic
(40 U.S.C. 601a) properties in the leasing
process.
Randolph-Sheppard Act (20 Requires that licensed blind
U.S.C. 107) vendors be authorized to
operate vending facilities on
any federal property, including
leased buildings. The act
imposes an obligation on GSA to
acquire space in buildings that
have suitable sites for vending
facilities.
Rural Development Act of 1972 Requires federal agencies to
(42 U.S.C. 3122) give first priority to rural
areas in locating facilities.
See also Executive Order 12072,
regarding the location of
federal facilities in urban
areas.
The Architectural Barriers Act Requires that public buildings
of 1968 be made accessible to the
(42 U.S.C. 4151-4152) physically handicapped.
The National Environmental Requires an assessment of the
Policy Act of 1969 environmental impacts
(42 U.S.C. 4321 et seq.) associated with major federal
actions, including government
leasing.
The Small Business Act (15 Requires a positive effort by
U.S.C. 631-647) federal contractors to place
subcontracts with small and
small disadvantaged business
concerns. The act also requires
publication of federal
procurement requirements,
requires large businesses to
submit small business
subcontracting plans, and
provides for liquidated damages
for failure to meet
subcontracting plan goals.
Uniform Relocation Assistance Requires the payment of
and Real Property Acquisition relocation benefits to persons
Policies Act of 1970 displaced as a result of
(42 U.S.C. 4601 et seq.) federal actions. This act is
potentially applicable to
persons displaced as a result
of GSA lease-construction
projects.
Note: For purposes of this table, we have cited only the
original act even though many of the statutes cited have been
subsequently amended.
aThe simplified acquisition threshold is $100,000.
Source: GSA.
Table 2: Executive Orders Applicable to the GSA Leasing
Program
Executive Order Description
11375 - Equal Employment Prohibits federal contractors
Opportunity from discriminating against any
(Oct. 13, 1967, 32 Fed. Reg. employee or applicant for
14303 ) employment because of race,
color, religion, sex, or
national origin.
11988 - Floodplain Management Precludes GSA from leasing
(May 24, 1977, space in buildings located
42 Fed. Reg. 26951) within floodplains unless there
are no practicable
alternatives.
11990 - Protection of Wetlands Precludes GSA from leasing
(May 24, 1977, space in wetlands unless there
42 Fed. Reg. 26961) are no practical alternatives.
12072 - Federal Space Requires that first
Management consideration be given to
(Aug. 16,1978, 43 Fed. Reg. locating federal facilities in
36869) urban areas within central
business areas.
12699 - Seismic Safety of Requires that new buildings
Federal and Federally Assisted constructed for lease to the
or Regulated New Building government are designed and
Construction constructed in accord with
(Jan. 5,1990, 55 Fed. Reg. 835) appropriate seismic design and
construction standards.
12902 - Energy Efficiency and Requires that appropriate
Water Conservation at Federal consideration be given to
Facilities (Mar. 8,1994, 59 efficient buildings in the
Fed. Reg. 11463) leasing process. Increases
federal energy reduction goals
to 30 percent by the year 2005.
This executive order was
revoked June 3, 1999, when
Executive Order 13123 was
issued.
13006 - Locating Federal Subject to the Rural
Facilities on Historic Development Act and Executive
Properties in Our Nation's Order 12072, directs that
Central Cities executive agencies give first
(May 21,1996, 61 Fed. Reg. consideration to locating
26071) federal facilities in historic
properties within historic
districts when operationally
appropriate and economically
prudent.
13123 - Greening the Government A new executive order that
Through Efficient Energy incorporates many provisions of
Management (June 3, 1999, 64 Executive Order 12902, which
Fed. Reg. 30851) was revoked. Establishes a goal
to reduce energy consumption
per gross square foot by 30
percent in 2005 and 35 percent
in 2010, compared with 1985. It
requires agencies entering into
leases, including the
renegotiation or extension of
existing leases, to incorporate
lease provisions that encourage
energy and water efficiency
wherever life cycle cost-
effective. For build-to-suit
leases, it requires
solicitations to contain
criteria encouraging
sustainable design and
development, energy efficiency,
and verification of building
performance. Agencies are to
include a preference for
buildings having the ENERGY
STAR� Building label in their
selection criteria for
acquiring leased buildings.
Source: GSA.
*** End of Document ***