Lease SFO and Price Reasonable Guidance for NBC Commission

## 1. GSA expects a commission to be paid on every task order that is issued. The commission offered on the GSA Form 1217, Line 31, is to be analyzed for reasonableness just as any other item on the Lessor's Annual Cost Statement.

## 2. If no commission is initially offered, this is to be indicated on the Negotiation Objective Memorandum and included in the Price Negotiation Memorandum (PNM). If the Lessor is paying its agent(s), broker, property manager, developer or other representative a commission or fee and final proposal revisions (FPR) are submitted with no commission offered, the offer should be rejected as technically unacceptable.

## 3. If there is no opportunity for a commission to be paid, no task order should be issued under the NBC.

4\. If a task order is issued with full expectations of commission
receipt, but none is offered in the FPR and the offeror confirms that no
commissions are being offered to any lessor agent(s), broker(s),
property manager, developer or any other representative, the broker is
to complete the instant action. No additional task orders shall be
issued in that market without prior consultation between the Regional
Program Manager and the National Program Manager.

5\. The first opportunity for the COTR to review the brokers proposed
commission rate is during the Task Order Orientation meeting. The Task
Order Notice to Proceed includes guidance that the broker is to bring
commission objectives to that meeting. COTR will review the proposed
commission and approve a commission rate as appropriate for the market
and the proposed task. For assistance, the COTR will use their local
market experience, history of previous similar leases, the Subject
Matter Expert process from the National office, or other methods for
validation and document the COTR file.

6\. The Commission Agreement provided as Attachment 2 is approved for
use by the brokers. It is to be completed by the appropriate Broker
using the firm's letterhead, and signed by the appropriate firm
personnel. It is to be included with the SFO package sent to all parties
expressing interest in an advertised space procurement action.

7\. Any Commission agreement must be signed by the offeror and returned
with each offer.

8\. The offeror must include the amount of commission or fee paid to his
agent(s), broker(s), property manager, developer, employee, or any other
representative representing the owner in Line 31, column (a) of the GSA
Form 1217 and the amount of commission offered to GSA's Tenant
Representative Broker in Column (b) of the same form.

> a\. If owner represents self, the profit expectation is separate and
> apart from the commission payment issue.
>
> b\. Market rental rates generally include broker commissions. If we
> are soliciting in a market where commissions are customarily paid to
> tenant\'s brokers, we expect the offeror to pay GSA\'s Broker a
> commission as that is part of the market rental rate.
>
> c\. If the owner is offering a market rate, it is reasonable to expect
> the Lessor to pay a tenant\'s broker.

9\. The broker will evaluate and negotiate the elements for each deal
under the review and approval of the COTR/Lease CO. If the broker is
unsuccessful in negotiating a commission and brings that information
back to the COTR prior to FPRs, the COTR/Lease CO may at that time make
the Lessor aware of his failure to comply with the requirements of the
SFO as they relate to the payment of commission.

10\. When the offer is evaluated as to aspects of reasonableness, the
tenant representative commission is to be evaluated just as any other
annual cost on the GSA Form 1217. If the amount is unreasonably low or
unreasonably high, it becomes a negotiation point in the Negotiation
Objective Memorandum, and the negotiated results should be written up in
the Price Negotiation Memorandum. If the Lessor is paying a commission
or fee to its agent(s), broker(s), property manager, developer,
employee, or any other agent or representative, as evidenced in Line 31,
Column (a) of the GSA Form 1217, then any final offer that includes a
'0' in Line 31, Column (b) of the GSA Form 1217 should be determined
"Technically Unacceptable," because it does not comply with the
requirements of the SFO.

11\. Questions related to expedited lease task orders in the NBC created
the need to insert the informational sentence that "Paragraphs B & C are
not applicable to expedited lease transactions." in the SFO. These
paragraphs should remain in the SFO because the expedited lease is a
term related to the NBC not the Lease. Although a task order may be
issued as an expedited requirement, for various reasons it may not be
delivered with the required time frame of 120 days and paragraphs B & C
would become applicable to the lease thus requiring a modification to
the task order.