34966 Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Rules and Regulations 

Community Channel No. 

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[FR Doc. 2021–13565 Filed 6–30–21; 8:45 am] 

BILLING CODE 6712–01–P 

GENERAL SERVICES 

ADMINISTRATION 

48 CFR Parts 501, 552 and 570 

[GSAR Case 2021–G527; Docket No. GSA– 

GSAR–2021–0014; Sequence No. 1] 

RIN 3090–AK44 

General Services Administration 

Acquisition Regulation; Immediate and 

Highest Level Owner for High-Security 

Leased Space 

AGENCY: Office of Acquisition Policy, 

General Services Administration (GSA). 

ACTION: Interim rule. 

SUMMARY: GSA is amending the General 

Services Administration Acquisition 

Regulation (GSAR) to implement 

Section 3 and Section 5 requirements of 

the Secure Federal Leases from 

Espionage and Suspicious Entanglement 

Act (the Act or Secure Federal LEASEs 

Act). The Act addresses the risks of 

foreign ownership of Governmentleased real estate and requires the 

disclosure of ownership information for 

high-security space leased to 

accommodate a Federal agency. 

DATES: Effective: June 30, 2021. 

Applicability: This interim rule 

applies to new lease awards, the 

exercise of options for current leases, 

lease extensions, and ownership 

changes for high-security leased space. 

Except where otherwise provided, the 

Act’s disclosure requirements shall 

apply with respect to any lease or 

novation agreement entered into on or 

after June 30, 2021, involving highsecurity leased space. That includes 

new, renewal, succeeding, expansion, 

superseding, extension, and replacing 

leases and novations. 

Comment Date: Interested parties 

should submit written comments to the 

Regulatory Secretariat Division at the 

address shown below on or before 

August 30, 2021 to be considered in the 

formation of the final rule. 

ADDRESSES: Submit comments in 

response to GSAR Case 2021–G527 to 

the Federal eRulemaking portal at 

https://www.regulations.gov by 

searching for ‘‘GSAR Case 2021–G527’’. 

Select the link ‘‘Comment Now’’ that 

corresponds with ‘‘GSAR Case 2021– 

G527’’. Follow the instructions provided 

at the ‘‘Comment Now’’ screen. Please 

include your name, company name (if 

any), and ‘‘GSAR Case 2021–G527’’ on 

your attached document. If your 

comment cannot be submitted using 

https://www.regulations.gov, call or 

email the points of contact in the FOR

FURTHER INFORMATION CONTACT section of 

this document for alternate instructions. 

Instructions: Please submit comments 

only and cite ‘‘GSAR Case 2021–G527’’ 

in all correspondence related to this 

case. Comments received generally will 

be posted without change to https://

www.regulations.gov, including any 

personal and/or business confidential 

information provided. To confirm 

receipt of your comment(s), please 

check https://www.regulations.gov, 

approximately two to three days after 

submission to verify posting. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Stephen Carroll, Procurement Analyst, 

at 817–253–7858 or GSARPolicy@

gsa.gov, for clarification of content. For 

information pertaining to status or 

publication schedules, contact the 

Regulatory Secretariat Division at 202– 

501–4755 or GSARegSec@gsa.gov. 

Please cite GSAR Case 2021–G527. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On Dec. 31, 2020, the then president 

signed into law the Secure Federal 

Leases from Espionage and Suspicious 

Entanglements Act (Secure Federal 

LEASEs Act), (Pub. L. 116–276, 134 

Stat. 3362). The Act imposes disclosure 

requirements regarding the foreign 

ownership, particularly ‘‘beneficial 

ownership,’’ of prospective lessors of 

‘‘high-security leased space’’ (i.e., 

property leased to the Federal 

government having a security level of III 

or higher). Section 3 and Section 5 of 

the Act regarding immediate and 

highest-level ownership applies to a 

lease or lease novation for high-security 

leased space entered into six months 

after the date of the enactment of the 

Act. GSA will modify existing leases to 

reflect the requirements of the Act when 

any of the various actions highlighted in 

the Applicability section arise. 

These requirements of the statute are 

applicable to leases by the U.S. General 

Services Administration (GSA), the 

Architect of the Capitol, ‘‘or the head of 

any Federal agency, other than the 

Department of Defense (DOD), that has 

independent statutory leasing 

authority’’ (Federal lessees). The Act is 

not applicable to DOD or to the 

intelligence community. In that regard, 

Section 2876 of the FY 2018 National 

Defense Authorization Act (NDAA) 

(Pub. L. 115–91) already provides DOD 

similar authority to obtain ownership 

information with respect to its highsecurity leased space. GSA’s regulatory 

action applies to GSA and to agencies 

relying upon GSA’s leasing authority. 

The Act addresses national security 

risks identified in the Government 

Accountability Office (GAO) report, 

GSA Should Inform Tenant Agencies 

When Leasing High-Security Space from 

Foreign Owners, dated January 2017 

(GAO–17–195). This report found 

certain high-security Federal agencies 

were in buildings owned or controlled 

by foreign entities. According to the 

report, most Federal tenants were 

unaware the spaces GAO identified 

were subject to foreign ownership or 

control, exposing these agencies to the 

heightened risk of surreptitious physical 

or cyber espionage by foreign actors. 

The report also noted GAO could not 

identify the owners of approximately 

one-third of the Federal government’s 

high-security leases because such 

ownership information was unavailable 

for those buildings. 

As the US Government’s ‘‘landlord,’’ 

GSA serves as the central leasing agent 

for Federal leases and is responsible for 

managing and obtaining space on behalf 

of multiple Federal agencies. When GSA 

enters into a leasing agreement, the 

agency becomes the ‘‘tenant’’ of GSA, 

with GSA acting as the lessee of the 

property. GSA currently uses 

information contained in the System for 

Award Management (SAM) to collect 

foreign ownership information for 

potential lessors, including immediate 

or highest-level owners. However, as 

Congress recognized in the Act, SAM 

does not capture more nuanced forms of 

foreign control such as entities involved 

in financing properties or beneficial 

ownership. 

GSA is currently reviewing and 

investigating potential future 

implementation steps and potential 

updates through electronic means to 

implement the requirements of the Act, 

including externally (System for Award 

Management) or internally (GSA’s Lease 

Offer Platform). As these alternatives are 

not yet available, this interim rule will 

require reporting on an action-by-action 

basis. 

What is ‘‘high-security leased space’’? 

The statute defines ‘‘high security 

leased space’’ as ‘‘space leased by a 

Federal lessee that—(A) will be 

occupied by Federal employees for 

nonmilitary activities; and (B) has a 

facility security level of III, IV or V, as 


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1 Interagency Security Committees publication 

‘‘The Risk Management Process’’, March 2021 

determined by the Federal tenant in 

consultation with the Interagency 

Security Committee, the Department of 

Homeland Security, and the General 

Services Administration.’’ Facility 

security levels and the process for 

determining these are outlined in the 

Interagency Security Committees 

publication ‘‘The Risk Management 

Process.’’ 1

New Disclosure Requirements 

Section 3 of the Act imposes the 

following requirements: 

• Prior to entering into a lease 

agreement with a ‘‘covered entity’’ or 

allowing such a landlord to convey its 

interest in a leased space that qualifies 

as a ‘‘high-security leased space’’— 

meaning a lease with a security level of 

Level III, IV, or V—a Federal lessee must 

require the landlord to identify and 

disclose whether the ‘‘immediate 

owner’’ or ‘‘highest-level owner’’ of the 

leased space, including an entity 

involved in the financing thereof, is a 

foreign person or a foreign entity, and to 

identify the country associated with 

each ownership entity. A ‘‘covered 

entity’’ is a person, corporation, 

company, business association, 

partnership, society, trust, or any other 

nongovernmental entity, organization, 

or group, or any governmental entity or 

instrumentality of a government. Leases 

entered into by the Department of 

Defense and for Federal tenants within 

the intelligence community (as defined 

in the National Security Act of 1947, 50 

U.S.C. 3003) are expressly excluded 

from these requirements. 

• The Act requires disclosure of the 

‘‘immediate owner’’ (the entity that has 

direct control of the offeror of a lease, 

as defined by ownership or interlocking 

management, identity of interests among 

family members, shared facilities and 

equipment, and the common use of 

employees) and ‘‘highest-level owner’’ 

(the entity that owns or controls an 

immediate owner of the offeror of a 

lease or that owns or controls one or 

more entities that control the immediate 

owner). 

• The Act also requires disclosure of 

whether an entity is involved in the 

financing of the leased space is a foreign 

person or entity. GSA has provided a 

definition of ‘‘financing’’ at 552.270–33. 

• Once a lease is executed, the Act 

requires annual disclosure of the foreign 

ownership of the landlord (and 

financing of the property) with respect 

to each prior one year period. 

• Section 3 of the Act applies to any 

lease or novation agreement entered into 

on or after June 30, 2021. 

• This Section of the Act requires that 

a covered entity (i.e., ‘‘a person, 

corporation, company, business 

association, partnership, society, trust, 

or any other nongovernmental entity, 

organization, or group’’; or ‘‘any 

governmental entity or instrumentality 

of a government’’) identify and disclose 

whether the immediate or highest-level 

owner of the leased space, including an 

entity involved in financing of the 

property, is a foreign person or a foreign 

entity, including the country of origin 

associated with the ownership, before a 

Federal lessee enters into a lease 

agreement with a covered entity or 

approves a novation agreement with a 

covered entity that involves a change of 

ownership under a lease for highsecurity leased space. 

• Under the Act, an ‘‘immediate 

owner’’ is ‘‘an entity, other than the 

offeror of a lease, that has direct control 

of the offeror, including ownership or 

interlocking management, identity of 

interests among family members, shared 

facilities and equipment, and the 

common use of employees’’ and a 

‘‘highest-level owner’’ is ‘‘the entity that 

owns or controls an immediate owner of 

the offeror of a lease, or that owns or 

controls 1 or more entities that control 

an immediate owner of the offeror.’’ If 

a disclosure is made, the Federal lessee 

is required to notify the Federal tenant 

of the building (or other improvement) 

that will be used for high-security space 

and to consult with the Federal tenant 

regarding security concerns and to 

determine whether mitigation measures 

are necessary prior to lease award or 

approval of the novation agreement. 

• A covered entity is required to 

provide this ownership information in 

response to a solicitation for offers 

issued by the Federal lessee or before 

approving a novation agreement for a 

lease. Covered entities also must update 

the information provided to the Federal 

lessee annually. The information that 

must be provided on an annual basis 

includes: The list of immediate or 

highest-level owners of the covered 

entity during the preceding one-year 

period of Federal occupancy or the 

information required to be provided 

relating to each such immediate or 

highest-level owner. 

Section 4 of the Act is not addressed 

in this regulation. It will be 

implemented through separate 

rulemaking and is outlined here for 

awareness. Section 4 also imposes 

disclosure requirements for beneficial 

ownership: 

• Subject to the development of 

GSA’s government-wide plan for 

obtaining ownership information 

outlined in Section 4 of the Act, covered 

entities also will be required to disclose 

information about beneficial ownership. 

A ‘‘beneficial owner’’ is ‘‘with respect to 

a covered entity, each natural person 

who, directly or indirectly, through any 

contract, arrangement, understanding, 

relationship, or otherwise—(i) exercises 

control over the covered entity; or (ii) 

has a substantial interest in or receives 

substantial economic benefits from the 

assets of the covered entity.’’ However, 

a beneficial owner of a covered entity 

does not include: A minor child, a 

person acting as a nominee, 

intermediary, custodian, or agent on 

behalf of another person; a person acting 

solely as an employee of the covered 

entity and whose control over or 

economic benefits from the covered 

entity derives solely from the 

employment status of the person; a 

person whose only interest in the 

covered entity is through a right of 

inheritance or a creditor of the covered 

entity unless either also meets the 

definition of ‘‘beneficial owner.’’ This 

disclosure will be addressed in a future 

rule. 

• Comments are welcome on foreign 

ownership, including beneficial 

ownership, with the understanding that 

such comments may help inform a 

future regulatory action. 

Additional Lease Language 

Lease agreements for high-security 

leased space will be required to include 

language that limits the access to the 

leased space by the covered entity and 

any member of the property 

management company responsible for 

the space without prior approval from 

the Federal tenant. The Federal tenant 

may only grant access to the highsecurity leased space (or any property or 

information located in the space) if the 

tenant determines that access is ‘‘clearly 

consistent with [its] mission and 

responsibilities.’’ The Federal lessee is 

required to have written procedures, 

signed by both the Federal lessee and 

the covered entity, that govern ‘‘access 

to the high-security leased space in case 

of emergencies that may damage the 

leased property.’’ 

Government-Wide Plan for Obtaining 

Ownership Information 

Section 4 of the Act requires GSA, in 

conjunction with the Office of 

Management and Budget (OMB), to 

develop a government-wide plan for 

agencies to identify all immediate, 

highest-level, or beneficial owners of 

high-security leased spaces before 


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34968 Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Rules and Regulations 

entering into a lease agreement with a 

covered entity for the accommodation of 

a Federal tenant in a high-security 

leased space. 

The plan must require the disclosure 

of any immediate, highest-level, or 

beneficial owner that is a foreign person 

and notification by the Federal lessee of 

high-security space to the affected 

Federal tenant of such foreign 

ownership. The plan, however, must 

exclude collecting ownership 

information on widely held pooledinvestment vehicles, mutual funds, 

trusts, or other pooled-investment 

vehicles. The Act requires GSA to 

submit the plan to specific 

Congressional committees by Dec. 31, 

2021 and to implement the plan by Dec. 

31, 2022. This plan will be separately 

addressed in a future rule, and is not 

included in this interim rule. 

Unlike the direct control-based 

immediate owner and highest-level 

owner, the Act defines the term 

‘‘beneficial owner’’ to include any 

person that—through a contract, 

arrangement, understanding, 

relationship, or otherwise—exercises 

control over the covered entity or has a 

substantial interest in or receives 

substantial economic benefits from the 

assets of the covered entity, with some 

exceptions. GSA and OMB’s plan must 

require the Federal lessee to collect the 

foreign ownership information for any 

immediate, highest-level, or beneficial 

owner that is a foreign person and, upon 

such a disclosure of foreign ownership, 

to notify and consult with the Federal 

tenant. 

Implications of the Act and Related 

Rulemakings 

This Act is one of several recent 

examples of congressional concern 

about foreign ownership and control 

and congressional action in the world of 

government contracting to help address 

potential national security concerns. 

See, e.g., FY 2021 NDAA (Pub. L. 116– 

283), § 819, Modifications to Mitigating 

Risks Related to Foreign Ownership, 

Control, or Influence of DOD 

Contractors and Subcontractors; § 885, 

Disclosure of Beneficial Owners in 

Database for Federal Agency Contract 

and Grant Officers; § 6403, Beneficial 

Ownership Information Reporting 

Requirements. 

Covered entities already provide 

certain information on immediate and 

highest-level ownership through the 

System for Award Management 

registration process, per OMB Control 

Numbers 9000–0097 and 9000–0185. 

However, covered entities will need to 

provide additional information through 

a manual representation regarding any 

financing entities and foreign ownership 

details for the enhanced requirements 

per Section 3 of the Act. Additionally, 

subject to the development and 

implementation of GSA’s governmentwide plan for Section 4 of the Act, 

through separate rulemaking, covered 

entities will need to provide disclosure 

of creditors who may be deemed 

beneficial owners if they either exercise 

control over the covered entity or have 

a substantial interest in or receive 

substantial economic benefits from the 

covered entity’s assets. Therefore, 

property owners will need to take this 

provision into account when 

considering financing options for 

leasing high-security space to the 

Federal government. 

II. Requirements Contained in This 

Rulemaking and Related Rulemakings 

With this rule, GSA is implementing 

Section 3 and Section 5 of the Act. 

Section 3— 

• Requires Federal lessees for highsecurity leased space to require covered 

entities to identify and disclose whether 

the owner of the leased space, including 

an entity involved in the financing 

thereof, is a foreign person or a foreign 

entity, including the country associated 

with the ownership entity, before 

entering into a lease agreement. Covered 

entities must provide Federal lessees 

such information— 

Æ when first submitting proposals in 

response to a solicitation for offers 

issued by the lessee; and 

Æ annually, to include the list of 

immediate or highest level owners of 

the covered entity during the preceding 

one-year period of occupancy. 

• Requires the Federal lessee to notify 

the Federal tenant in writing if such a 

disclosure of foreign ownership is made 

and consult with the tenant regarding 

any security concerns prior to awarding 

a new lease agreement. 

Section 5— 

• Requires that leases for highsecurity space include certain language 

regarding access to the high-security 

leased space by the covered entity and 

any member of the property 

management company. 

Section 4 of the Act requires the 

identification of beneficial owners of 

high-security leased spaces and will be 

addressed in a subsequent rulemaking 

through GSAR Case 2021–G522 and 

FMR Case 2021–102–1. In addition, the 

FAR Council has opened FAR Case 

2021–005 which will implement 

sections 885 and 6403 of the NDAA for 

FY 2021 (Pub. L. 116–283) to require 

certain offerors to disclose beneficial 

ownership information in their offers for 

contracts over the simplified acquisition 

threshold. 

Finally, other agencies may need to 

do additional rulemaking because the 

GSAR only governs the contract terms 

and conditions for leased space 

procured by GSA and its delegated 

agencies. 

III. Authority for This Rulemaking 

Title 40 of the United States Code 

(U.S.C.) Section 121 authorizes GSA to 

issue regulations, including in the 

GSAR, to control the relationship 

between GSA and contractors. In 

addition, the Secure Federal LEASEs 

Act, authorizes the collection of 

ownership information for high-security 

leased space. 

IV. New GSAR Requirements 

With this rule, GSA is implementing 

one new GSAR representation and one 

new GSAR clause. The new 

representation is 552.270–33 (Foreign 

Ownership and Financing 

Representation for High-Security Leased 

Space) and the new clause is 552.270– 

34 (Access to Limitations for HighSecurity Leased Space). Both apply to 

new lease awards, the exercise of 

options for current leases, lease 

extensions, and ownership changes for 

high-security leased space. Except 

where otherwise provided, the Act’s 

disclosure requirements shall apply 

with respect to any lease or novation 

agreement entered into on or after June 

30, 2021, involving high-security leased 

space. That includes new, renewal, 

succeeding, expansion, superseding, 

extension, and replacing leases and 

novations. 

The new GSAR representation 

implemented in 552.270–33 requires 

offerors for high-security leased space to 

identify whether the immediate owner, 

highest-level owner, or an entity 

involved in the financing of the lease is 

foreign-owned. If so, they must 

represent the associated country. 

Awardees will also be required to rerepresent on an annual basis. This 

representation also applies upon 

extensions, exercise of renewal options 

and change of ownership/novations. 

The new GSAR clause at 552.270–34 

requires lessors for high-security leased 

space to limit access to the space unless 

approved by an authorized Government 

representative. 

V. Expected Impact of the Rule 

GSA anticipates that this rule will 

have an impact on current Federal 

lessors of high-security leased space, 

future potential lessors of high-security 

leased space, and the Federal lessor 


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Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Rules and Regulations 34969 

2 In March 2017, GSA’s Office of Leasing issued 

Leasing Alert LA–FY17–06 requiring Lease 

Contracting Officers (LCOs) to determine whether 

the ownership of leased space is identified as a 

foreign-owned entity and to notify the client agency 

in such instances, so that the agency can take any 

needed security mitigation measures. The Leasing 

Alert outlined the procedures to make this 

determination which involved a review of the 

entity’s SAM registration; the Leasing Alert also 

required this review for all lease procurements and 

novations, regardless of the Facility Security Level 

(FSL). 

In October 2018, GSA added a ‘‘Foreign 

Ownership and Financing Representation,’’ to be 

included with all Request for Lease Proposals (RLP) 

packages issued for prospectus-level lease projects. 

This ‘‘paper’’ representation required the offeror to 

confirm both foreign ownership and foreign 

financing. 

3 GSA’ Leasing Desk Guide (Desk Guide). 

4 GSA’s Leasing Alerts and Lease Acquisition 

Circulars (LAC). 

5The Desk Guide chapters contain authorities, 

policies, technical and procedural guides, and 

administrative limitations governing the acquisition 

by lease of real property. Chapter 19 is specific to 

security requirements. 

6A Federal committee dedicated to the protection 

of Federal civilian facilities in the United States. It 

has 21 primary member agencies and 30 associate 

member agencies. The ISC has developed standards 

applicable to all civilian Federal facilities, 

including leased facilities. 

7 LA–FY18–05, Cybersecurity Measures for Leased 

Facilities. 

8A categorization based on the analysis of several 

security-related facility factors, which serves as the 

basis for the implementation of countermeasures 

specified in ISC standards. (CISA ISC Standard, 

March 2021). 

industry of high-security leased space. 

The rule seeks to ensure effective 

implementation and enforcement of the 

national security measures imposed by 

the Secure Federal LEASEs Act with 

minimal disruption to the mission of 

GSA and its Federal tenants and Federal 

lessors. As set forth in Section VI.(d) 

below, GSA recognizes the benefits that 

will result from this rule. 

GSA notes that this rule is one of 

several actions with regard to the Secure 

Federal LEASEs Act and other statutes 

regarding foreign ownership by GSA, 

other agencies with lease authority 

promulgating their own rules, and by 

the FAR Council. GSA understands that 

the impact of actions dealing with 

foreign ownership, including 

specifically beneficial owners, is not 

well understood and is still being 

assessed. 

In addition, while this interim rule, 

specific to Sections 3 and 5 of the 

Secure Federal LEASEs Act, will be 

effective June 30, 2021, GSA is seeking 

public comment, including, as indicated 

below, on the potential impact of this 

rule on Federal lessors. After 

considering the comments received, a 

final rule will be issued, taking into 

account and addressing the public 

comments, as well as helping to shape 

implementation of future rules like 

beneficial ownership. GSA plans to 

share public comments received on 

such questions with other agencies and 

the FAR Council. 

VI. Regulatory Impact Analysis 

The cost and benefit impacts of 

amending the General Services 

Administration Acquisition Regulation 

(GSAR) to implement certain 

requirements outlined in the Secure 

Federal LEASEs Act (SFLA) (Pub. L. 

116–276) are discussed in the analysis 

below. This analysis was developed by 

GSA in consultation with agency 

procurement officials and the GSA 

Office of Leasing. Section VI.(h) of this 

rule is requesting specific feedback 

regarding the impact of this rule, as well 

as other pertinent policy questions of 

interest, in order to inform finalization 

of this and potential future subsequent 

rulemakings. 

(a) Risks to Industry of Not Complying 

With SFLA 

As a strictly contractual matter, an 

organization’s failure to submit an 

accurate representation to the 

Government constitutes a breach of 

contract that can lead to cancellation, 

termination, and financial 

consequences. Therefore, it is important 

for contractors to develop a compliance 

plan that will allow them to submit 

accurate representations to the 

Government in the course of their offers. 

GSA notes that this interim rule does 

not authorize GSA lease contracting 

officers to use the information disclosed 

by offerors as a differentiating factor for 

selection of a lease award, nor does it 

authorize GSA to terminate a lease, 

prevent a novation, or otherwise decline 

to make an award based on the 

disclosure. As such, GSA estimates that 

this rule will not result in these 

activities, and therefore no moving costs 

have been included in this regulatory 

impact analysis. 

(b) Contractor Actions Needed for 

Compliance 

GSA assumes that most Federal 

lessors maintaining high-security leased 

space or Federal lessors that are 

competing for solicitations for highsecurity leased space are already 

familiar with the majority of the 

requirements of this rule, or, similarly, 

will not find the requirements of this 

interim rule as anything significantly 

more than what is currently expected. 

GSA previously implemented 

ownership disclosures requirements 

through internal policy 2, GSA’s Request 

for Lease Proposals (or solicitations), 

and GSA’s guidance through its publicfacing Leasing Desk Guide 3 and Leasing 

Alerts and Lease Acquisition Circulars.4

(1) GSA Leasing—Current Processes 

Regardless of who owns the leased 

space, Federal agencies are already 

taking risk management measures 

appropriate for the security level of the 

space. The GSA Leasing Desk Guide 5

outlines requirements and standards for 

new and replacement space. In Chapter 

19 (issued in 2012), it provides 

instructions for competitive 

procurements based on the Interagency 

Security Committee (ISC),6 Physical 

Security Standards, and it outlines the 

Public Buildings Service’s (PBS) 

responsibilities for performing 

background investigations on the 

lessors’ contractors. 

In addition, a 2018 GSA Leasing 

Alert,7 provided required and 

recommended measures for lessors 

related to cybersecurity protections and 

precautions in leased facilities. It 

establishes lease language that prohibits 

lessors from connecting any portion of 

their building and access control 

systems (BACS) to any federally-owned 

or operated IT network and requires 

notification for cybersecurity incidents 

that impact a federal tenant’s safety, 

security, or proper functioning. The 

lease language also outlines 

recommended cybersecurity measures 

that lessors are encouraged to follow. 

Lessors are already currently required 

to report certain ownership information. 

As previously outlined, GSA currently 

uses information contained in the 

System for Award Management (SAM) 

to collect foreign ownership information 

for potential lessors, including 

immediate or highest-level owners, and 

provides such information to tenant 

agencies. While this rule requires 

additional information related to the 

lessor’s financing, the review of 

immediate or highest-level owner detail 

has already been in place and is a 

requirement Federal lessor’s are familiar 

with. 

(2) GSA Leasing—General Security 

Framework 

As outlined in the GSA Leasing Desk 

Guide, the facility security level (FSL) 8

for each space requirement is set by the 

Department of Homeland SecurityFederal Protective Service (FPS) and the 

client agency, in consultation with the 

GSA as part of the requirements 

development phase of a lease 

acquisition. If the client agency and FPS 

have not already conferred, GSA must 

coordinate with the necessary parties to 

set the appropriate level of security 

before the solicitation is drafted. The 

Desk Guide states that GSA Leasing 


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9 GSA estimates that the purchasing/procurement 

professional requiring training as a result of this 

rule on average would be equal to a mid-career 

professional. The equivalent labor category used to 

capture cost estimates therefore is a GS–12 Step 5, 

or Journeyman Level 1. 

10National Counterintelligence Strategy of the 

United States of America 2020–2022. 

11National Counterintelligence Strategy of the 

United States of America 2020–2022. 

12National Counterintelligence Strategy of the 

United States of America 2020–2022. 

13National Counterintelligence Strategy of the 

United States of America 2020–2022. 

14 Government Accountability Office Report 

((GAO–17–195), GSA Should Inform Tenant 

Agencies When Leasing High-Security Space from 

Foreign Owners, dated January 2017. 

15 Government Accountability Office Report 

((GAO–17–195), GSA Should Inform Tenant 

Agencies When Leasing High-Security Space from 

Foreign Owners, dated January 2017. 

16 Government Accountability Office Report 

((GAO–17–195), GSA Should Inform Tenant 

Agencies When Leasing High-Security Space from 

Foreign Owners, dated January 2017. 

acquisition members must maintain 

contact as necessary with the 

appropriate FPS inspector throughout 

the lease administration. The facility 

security level designation does not 

change solely based on lessor ownership 

information collected via this rule. 

(3) GSA Leasing—Determining 

Countermeasures 

GSA follows the Interagency Security 

Committee (ISC) provided standard for 

Physical Security Criteria (PSC) for 

Federal Facilities. This standard 

establishes baseline physical security 

measures for each FSL. This standard 

defines the process for determining the 

appropriate security measures; it also 

covers any uncommon measures 

required to address the unique risks at 

a particular facility. The GSA Desk 

Guide currently uses the PSC to 

prescribe the process for determining 

appropriate countermeasures for a 

facility. Adherence to this process (1) 

ensures that all security criteria will be 

considered; (2) defines the relationship 

between the levels of risk determined 

for each undesirable event and; (3) 

mitigates risk through countermeasures 

that provide a commensurate Level of 

Protection (LOP). The lessor ownership 

information does not affect the PSCs for 

Federal Facilities and therefore GSA 

does not anticipate this rule to have a 

significant impact on the security 

standards used by GSA tenants. 

(c) Compliance Plan Estimated Due to 

Interim Rule 

GSA assumes the following steps 

would most likely be part of a lessor’s 

plan that would need to be developed 

by any entity to stay in compliance with 

the new representation clause at GSAR 

552.270–33 and other clause at GSAR 

552.207–34 being implemented by this 

rule: 

1. Regulatory Familiarization. The 

entity must read and understand the 

GSAR rules and the resulting necessary 

actions for compliance. 

2. Workforce Training. The entity 

must educate its purchasing/ 

procurement professionals 9 to ensure 

that they are familiar with the 

representation and clause and their 

disclosure requirements (as applicable). 

3. Compliance with Clauses. The 

entity must identify and disclose 

whether the immediate or highest-level 

owner of the leased space, including an 

entity involved in the financing thereof, 

is a foreign person or a foreign entity, 

including the country associated with 

the ownership entity. If a disclosure is 

made, the Federal lessee shall notify the 

Federal tenant of the building or other 

improvement that will be used for highsecurity space in writing, and consult 

with the Federal tenant regarding 

security concerns and necessary 

mitigation measures, if any, prior to 

award of the lease or approval of the 

novation agreement. 

(d) Benefits 

This Act requires the identification of 

all individuals who own or benefit from 

partial ownership of a property that will 

be leased by the federal government for 

high-security use. The statute is in 

response to a 2017 Government 

Accountability Office (GAO) report 

which indicated that Federal agencies 

were vulnerable to espionage and other 

intrusions because foreign actors could 

gain unauthorized access to spaces used 

for classified operations or to store 

sensitive data. Agencies store law 

enforcement evidence and other 

sensitive data and are often unaware of 

foreign ownership of their office spaces. 

While many of the foreign owners 

identified in the 2017 GAO report were 

companies based in allied countries 

such as Canada, Norway, Japan or South 

Korea, other properties were owned and 

managed by entities based in more 

adversarial nations. The report noted 

Chinese-owned properties, in particular, 

presented security challenges because of 

the country’s proclivity for 

cyberespionage and the close ties 

between private sector companies and 

the Chinese government. The GAO 

report highlighted the dangers posed by 

these properties, indicating that ‘‘leasing 

space in foreign-owned buildings could 

present security risks such as espionage, 

unauthorized cyber and physical access 

to the facilities, and sabotage.’’ 

The United States faces an expanding 

array of foreign intelligence threats by 

adversaries who are using increasingly 

sophisticated methods to harm the 

Nation.10 Threats to the United States 

posed by foreign intelligence entities are 

becoming more complex and harmful to 

U.S. interests.11 Foreign intelligence 

actors are employing innovative 

combinations of traditional spying, 

economic espionage, and supply chain 

and cyber operations to gain access to 

critical infrastructure, and steal 

sensitive information and industrial 

secrets.12 The exploitation of key supply 

chains by foreign adversaries represents 

a complex and growing threat to 

strategically important U.S. economic 

sectors and critical infrastructure.13

Additionally, by requiring ‘‘Financing 

Entity’’ information in the 

representation clause, GSA will benefit 

by better understanding the source of 

funds used to finance projects. Risks 

associated with financing, such as 

money laundering, involve disguising 

financial assets so they can be used 

without detection of the illegal activity 

that produced them.14 These 

transactions further shield the entity 

from a recorded connection to the funds 

by providing a plausible explanation for 

the source of the funds.15 Typical 

examples used for this type of activity 

include the purchase and resale of real 

estate, investment securities, foreign 

trusts, or other assets.16 By collecting 

this information, GSA will be able to 

share more transparent information on 

foreign financing of leases with tenant 

agencies. 

The goal of the Act is to close security 

loopholes by directing the GSA to 

design a verification system that 

identifies a property’s owners if the 

space would be used for high-security 

purposes. While GSA and other Federal 

agencies have made positive changes in 

response to GAO’s 2017 report, this rule 

will help support current best practices 

being followed more uniformly 

throughout the Federal government. 

Finally, this Act ensures that GSA 

(and all agencies particularly with 

independent leasing authority) will 

have the ability to obtain information on 

foreign ownership and provide it to 

relevant Federal tenants. 

(e) Public Costs 

During the first and subsequent years 

after publication of the rule, lessors will 

need to learn about the clauses and its 

requirements. GSA estimates this cost 

by multiplying the time required to 

review the regulations and guidance 

implementing the rule by the estimated 

compensation of a purchasing/ 


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17 If not otherwise stated, numbers related to 

leases are provided by the GSA Office of Leasing 

through surveying their internal databases. 

18The GSA Office of Leasing provided this 

number by surveying their internal database. 

19This information is based on internal inventory 

data sources provided by the GSA Office of Leasing. 

20This information is based on internal inventory 

data sources provided by the GSA Office of Leasing. 

21Federal Management Regulation (FMR) 

Bulletin 2008–B1 limits the square footage 

permissible under a General Purpose lease 

delegation to 19,999 usable ANSI/BOMA (‘‘ABOA’’) 

square feet of space; since FSL designations are tied 

to square footage in addition to other factors,this 

estimate is likely higher than actual. 

22This information is based on internal inventory 

data sources provided by the GSA Office of Leasing. 

23 GSA does notg have data on how many 

novation other agencies with Delegated Leasing 

Authority processed. 

procurement mid-career professional. 

The equivalent labor category used to 

capture cost estimates therefore is a GS– 

12 Step 5. 

A. To estimate the aggregate burden to 

Government lessors of complying with 

the rule, the number of lessors that will 

be impacted was calculated using 

numbers pulled from GSA’s records and 

databases.17 As of June 2021, GSA has 

approximately 7,860 leases totaling 

approximately 183,000,000 in Rentable 

Square Footage (RSF) and 

approximately $5,600,000,000 in annual 

rent ($2,800,000,000 of that total 

represents small entities). Of the 7,860, 

approximately 1,263 18 (or 16 percent) of 

the leases are for high-security lease 

space (lease space in a facility with a 

security level of III, IV, or V) totaling 

approximately 87,000,000 in RSF and 

approximately $3,000,000,000 in annual 

rent. Approximately 68 percent 19 of the 

leasing entities are small entities. Highsecurity leases with these small entities 

represents $1,370,000,000 in annual 

rent covering approximately 37,000,000 

RSF. 

B. GSA also delegates leasing 

authority to several agencies, which are 

required to follow GSA’s policies. GSA 

estimates there are 1,300 20 buildings 

represented by these agencies with 

Delegated Leasing Authority 21 from 

GSA. GSA does not have data available 

that identifies which of these are for 

high-security lease space. GSA assumes 

that these delegated agencies have a 

similar profile to GSA’s for highsecurity leased space to total portfolio 

space, i.e., 16 percent. This would bring 

the total number of high-security lease 

space for delegated agencies to 208 

(1,300 × 16 percent). GSA also assumes 

the same profile for small entities of 68 

percent. 

C. Based on historical data 

maintained by GSA’s Office of Leasing, 

GSA estimates that 6 percent of its highsecurity leased space will be solicited 

for a new contract each year (6 percent 

of 1,263 = 76 leases). These solicitations 

result from a mix of expiring highsecurity leases or new requirements for 

high-security facilities. GSA assumes 

these trends will continue for the time 

horizon outlined by this regulatory 

impact. Based on historic bid rates and 

high current vacancy levels, GSA 

further estimates that 3 lessors will 

make offers for these high-security lease 

procurement for a total of 228 offers (76 

high-security leases awarded * 3 lessors 

competing for each solicitation. 76 * 3 

= 228) GSA assumes the same profile for 

delegated facilities. 

D. Since 2014, GSA has averaged 

approximately 31 renewal options per 

year for high-security leases (equal to 

approximately 17 percent of all 

renewals options during the same 

period) and averaged approximately 106 

extensions for existing high-security 

leases (also equal to approximately 17 

percent of all extensions during the 

same period). GSA assumes the same 

trend will continue in subsequent years. 

GSA assumes the same profile for 

delegated facilities. 

E. GSA processed 380 novations from 

May 1, 2020 to April 30, 2021 22 23

(therefore approximately 5 percent of 

leases resulted in a novation (380/ 

7,860)). GSA does not have data on how 

many of those were related to FSL III, 

IV, or V. GSA will assume 16 percent of 

those novations were for FSL III, IV, or 

V leases. Therefore, it is assumed 61 

novations were processed for highsecurity leases in the last year. 

A breakdown is provided in the table 

below. 

Par above GSA 

Delegated 

authority 

agencies 

A,B .......................... Leased Space ......................................................................................................... 7,860 1,300 

A,B .......................... High-Security (HS) Space Leases (16 percent) ..................................................... 1,263 208 

Total HS Portfolio ............................................................................................ 1,263 208 

Existing HS Lease Baseline ................................................................................... 1,263 208 

Combined HS Lease Baseline ............................................................................... 1,471 (1,263 + 208) 

C ............................. New Procurements (6 percent HS) ........................................................................ 76 12 

C ............................. New Offers (x3) ...................................................................................................... 228 36 

Total New Responses ............................................................................................ 228 36 

D ............................. Renewals (17 percent HS) ..................................................................................... 31 35 

D ............................. Extensions (17 percent HS) ................................................................................... 106 35 

E ............................. Novations (5 percent Leases) ................................................................................ 380 65 

E ............................. High-Security Space Novations (16 percent) ......................................................... 61 10 

Total HS Novations ................................................................................................. 61 10 

New HS Lease Baseline ......................................................................................... 426 

(228+31+106+61) 

116 

(36+35+35+10) 

Combined New HS Lease Baseline ....................................................................... 542 (426 + 116) 


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24The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

25Totals are rounded. 

26This hourly rate, $84.16, is the 2021 GS rate for 

a GS–12 Step 5 of $42.08 per hour (using the rate 

for the rest of the United States) adjusted upward 

by 100 percent to account for fringe benefits and 

overhead. 

27The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

28The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

29Totals are rounded. 

30The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

31The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

32The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

33The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

34The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

35The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

Steps to Compliance 

1. Regulatory Familiarization 

Below is a list of compliance activities 

related to regulatory familiarization that 

GSA anticipates will occur: 

a. Familiarization With GSAR 552.270– 

33, Foreign Ownership and Financing 

Representation for High-Security Leased 

Space 

i. GSA estimates that it will take 

existing high-security lessors 

approximately 3 hours 24 each to 

familiarize themselves with the new 

GSAR representation. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $372,000 25 (= 

3 hours × $84.16 26 × 1,471). Of the 

1,471 lessors impacted by this part of 

the rule, GSA assumes that 68 percent, 

or approximately 1,000 lessors, are 

small entities. 

After the initial familiarization in the 

first year for each current awardee or 

subsequent awardee, GSA estimates it 

will take 15 minutes (0.25 hours 27) to 

stay familiar with the representation. 

Therefore, GSA calculated the total 

estimated cost for this part of the rule 

to be $31,000 (= 0.25 hours × $84.16 × 

1,471). 

ii. GSA estimates that new highsecurity lessors each year will take 

approximately 3 hours 28 each to 

familiarize themselves with the new 

GSAR representation. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $137,000 29 (= 

3 hours × $84.16 × 542). Of the 542 

lessors impacted by this part of the rule, 

GSA assumes that 68 percent, or 

approximately 369 lessors, are small 

entities. 

b. Familiarization With GSAR 552.270– 

34, Access to Limitations for HighSecurity Leased Space 

i. GSA estimates that it will take 

existing high-security lessors 

approximately 2 hours 30 each to 

familiarize themselves with the clause 

at GSAR 552.270–34. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $248,000 (= 

2 hours × $84.16 × 1,471). Of the 1,471 

lessors impacted by this part of the rule, 

GSA assumes that 68 percent, or 

approximately 1,000 lessors, are unique 

small entities. 

After the initial familiarization in the 

first year for each current awardee or 

subsequent awardee, GSA estimates it 

will take 15 minutes (0.25 hours 31) to 

stay familiar with the representation. 

Therefore, GSA calculated the total 

estimated cost for this part of the rule 

to be $31,000 (= 0.25 hours × $84.16 × 

1,471). 

ii. GSA estimates that new highsecurity lessors each year will take 

approximately 2 hours 32 each to 

familiarize themselves with the clause 

at GSAR 552.270–34. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $108,000 (= 

2 hours × $84.16 × 542). Of the 542 

lessors impacted by this part of the rule, 

GSA assumes that 68 percent, or 

approximately 369 lessors, are small 

entities. 

The total estimated cost to become 

familiar with the representation clause 

(GSAR 552.270–33) and the other new 

clause (GSAR 552.270–34) is estimated 

to be $619,000 for the existing highsecurity lessors. In subsequent years, 

this cost is estimated to be $290,000 for 

new high-security lessors annually. 

2. Implementation of Workforce 

Training 

The entity must educate its 

purchasing/procurement professionals 

to ensure that they are familiar with the 

representation and clause and their 

disclosure requirements (as applicable). 

a. GSA estimates that it will take 

existing high-security lessors 

approximately 6 hours 33 each to train 

their workforce on the representation 

clause at GSAR 552.270–33 and the 

GSAR clause at 552.270–34. Therefore, 

GSA calculated the total estimated cost 

for this part of the rule to be $743,000 

(= 6 hours × $84.16 × 1,471). Of the 

1,263 lessors impacted by this part of 

the rule, GSA assumes that 68 percent, 

or approximately 1,000 lessors, are 

small entities. 

After the initial training in the first 

year for each current awardee or 

subsequent awardee, GSA estimates it 

will take 30 minutes (0.50 hours 34) to 

conduct continuing additional 

workforce training. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $62,000 (= 0.50 

hours × $84.16 × 1,471). 

b. GSA estimates that new highsecurity lessors each year will take 

approximately 6 hours each to train 

their workforce on the representation 

clause at GSAR 552.270–33 and the 

GSAR clause at 552.270–34. Therefore, 

GSA calculated the total estimated cost 

for this part of the rule to be $274,000 

(= 6 hours × $84.16 × 542). Of the 542 

lessors impacted by this part of the rule, 

GSA assumes that 68 percent, or 

approximately 369 lessors, are small 

entities. 

The total estimated cost to implement 

workforce training for the representation 

clause (GSAR 552.270–33) and the 

access limitation clause (GSAR 

552.270–34) is estimated to be $743,000 

for the existing high-security lessors. In 

subsequent years, this cost is estimated 

to be $336,000 for new high-security 

lessors annually. 

3. Compliance With Clauses 

a. GSAR 552.270–33, Foreign 

Ownership and Financing 

Representation for High-Security Leased 

Space 

i. GSA estimates that it will take 

existing high-security lessors 

approximately 2 hours 35 each to 


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36The amount of lessors impacted is an 

assumption based on subject matter expert 

judgment. 

37The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

38The amount of lessors impacted is an 

assumption based on subject matter expert 

judgment. 

39The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

40The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

41The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

42The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

43The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

44The hours estimated are an assumption based 

on historical familiarization hours and subject 

matter expert judgement. Subject matter experts 

include representatives from GSA’s Office of 

Leasing, including Realty Specialists and Leasing 

Contracting Officers. 

complete the representation at sections 

(c)(1), (d)(1), and (e)(1) (essentially no 

required disclosures required) of the 

representation clause. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $248,000 (= 

2 hours × $84.16 × 1,471). Of the 1,471 

lessors impacted by this part of the rule, 

GSA assumes that 68 percent, or 

approximately 1000 lessors, are small 

entities. 

ii. GSA estimates that new highsecurity lessors each year will take 

approximately 2 hours each to complete 

the representation at sections (c)(1), 

(d)(1), and (e)(1) (essentially no required 

disclosures required) of the 

representation clause. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $91,000 (= 2 

hours × $84.16 × 542). Of the 542 lessors 

impacted by this part of the rule, GSA 

assumes that 68 percent, or 

approximately 369 lessors, are small 

entities. 

iii. GSA further estimates that of the 

existing high-security lessors, 10 

percent 36 (or 147 lessors) will respond 

affirmatively to one or more sections at 

(c)(1), (d)(1), and (e)(1) of the 

representation clause that the offeror 

‘‘does’’ have an ‘‘immediate owner’’, 

and/or ‘‘is’’ owned or controlled by 

another entity (or ‘‘highest owner’’), 

and/or ‘‘does’’ involve a ‘‘foreign entity’’ 

and will be required to complete 

additional section at (c)(2) and (c)(3), 

potentially (c)(4), (d)(2) and (d)(3), 

potentially (d)(4), and (e)(2). GSA 

estimates that it will take these offerors 

an additional 10 hours 37 to complete 

those various sections of the 

representation clause. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $124,000 (= 

10 hours × $84.16 × 147). Of the 147 

lessors impacted by this part of the rule, 

GSA assumes that 68 percent, or 

approximately 100 lessors, are unique 

small entities. 

iv. GSA estimates that of the new 

high-security lessors each year, 10 

percent 38 (or 54 lessors) will respond 

affirmatively to one or more sections at 

(c)(1), (d)(1), and (e)(1) of the 

representation clause that the offeror 

‘‘does’’ have an ‘‘immediate owner’’, 

and/or ‘‘is’’ owned or controlled by 

another entity (or ‘‘highest owner’’), 

and/or ‘‘does’’ involve a ‘‘foreign entity’’ 

and will be required to complete 

additional sections at (c)(2) and (c)(3), 

potentially (c)(4), (d)(2) and (d)(3), 

potentially (d)(4), and (e)(2). Thus, 

approximately 54 lessors (10 percent of 

542) need to fully complete GSAR 

552.270–33. Therefore, GSA calculated 

the total estimated cost for this part of 

the rule to be $45,000 (= 10 hours × 

$84.16 × 54). Of the 54 lessors impacted 

by this part of the rule, GSA assumes 

that 68 percent, or approximately 37 

lessors, are small entities. 

After the existing and new highsecurity lessors complete the 

representations, GSA estimates it will 

take 15 minutes (0.25 hours 39) to update 

any information as necessary and as 

required annually. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $34,000 (= 

[0.25 hours × $84.16 × 1,471] + [.25 × 

$84.16 × 147]). 

b. GSAR 552.270–34, Access to 

Limitations for High-Security Leased 

Space 

i. GSAR 552.270–34 requires lessors 

for high-security leased space to limit 

access to the space unless approved by 

an authorized Government 

representative. GSA estimates that 10 

percent of lessors, or 147 (10 percent of 

1,471) will request approval once per 

lease and will take an estimated 3 

hours 40 to submit each request. 

Therefore, GSA calculated the total 

estimated cost for this part of the rule 

to be $37,000 (= 3 hours × $84.16 × 147). 

Of the 147 lessors impacted by this part 

of the rule, GSA assumes that 68 

percent, or 100 lessors, are small 

entities. 

ii. GSA estimates that 10 percent, or 

54 (10 percent of 542) of new highsecurity lessors each year will request 

approval once per lease and will take an 

estimated 3 hours 41 to submit each 

request. Therefore, GSA calculated the 

total estimated cost for this part of the 

rule to be $14,000 (= 3 hours × $84.16 

× 54). Of the 54 lessors impacted by this 

part of the rule, GSA assumes that 68 

percent, or 37 lessors, are small entities. 

iii. GSA acknowledges that existing 

high-security lessors will be required to 

establish written procedures, as 

documented in the Government’s 

Occupant Emergency Plan, governing 

access to the high-security leased space 

in case of emergencies. GSA estimates 

that reviewing these procedures will 

take approximately 3 hours.42

Therefore, GSA calculated the total 

estimated cost for this part of the rule 

to be $371,000 (= 3 hours × $84.16 × 

1,471). Of the 1,471 lessors impacted by 

this part of the rule, GSA assumes that 

68 percent, or approximately 1000 

lessors, are small entities. 

iv. GSA acknowledges that new highsecurity lessors will be required to sign 

written procedures, as documented in 

the Government’s Occupant Emergency 

Plan, governing access to the highsecurity leased space in case of 

emergencies. GSA estimates that 

reviewing these procedures will take 

approximately 3 hours.43 Therefore, 

GSA calculated the total estimated cost 

for this part of the rule to be $137,000 

(= 3 hours × $84.16 × 542). Of the 542 

lessors impacted by this part of the rule, 

GSA assumes that 68 percent, or 369 

lessors, are small entities. 

After the existing high-security lessors 

initially establishes the written 

procedures, GSA estimates it will take 

15 minutes (0.25 hours 44) to update any 

information as necessary. Therefore, 

GSA calculated the total estimated cost 

for this part of the rule to be $31,000 (= 

0.25 hours × $84.16 × 1,471). 

The total estimated cost to complete 

both the representations and the clause 

is estimated to be $780,000 the existing 

high-security lessors. In subsequent 

years, this cost is estimated to be 

$351,000 for new high-security lessors 

annually. 

4. Public Total Costs 

The total cost of the above Cost 

Estimate is $2,100,000 in the first year 


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45All totals in the Government Cost Analysis 

section are rounded. 

after publication. The total cost of the 

above Cost Estimate in subsequent years 

is $977,000 annually. 

The following is a summary of the 

estimated costs calculated for a 10 year 

time horizon in perpetuity at a 3- and 

7-percent discount rate: 

Summary Total costs 

Present Value (3 percent) ........ $9,500,000 

Annualized Costs (3 percent) ... 1,100,000 

Present Value (7 percent) ........ 7,950,000 

Annualized Costs (7 percent) ... 1,330,000 

GSA notes that this interim rule does 

not authorize GSA lease contracting 

officers to use the information disclosed 

by offerors as a differentiating factor for 

selection of a lease award, nor does it 

authorize GSA to terminate a lease, 

prevent a novation, or otherwise decline 

to make an award based on the 

disclosure. As such, GSA estimates that 

this rule will not result in these 

activities, and therefore no moving costs 

have been included in this regulatory 

impact analysis. 

GSA acknowledges that there is 

uncertainty underlying these estimates, 

including elements for which an 

estimate is unavailable given inadequate 

information. As more information 

becomes available, including through 

comment in response to this notice, 

GSA will seek to update these estimates 

which could increase the estimated 

costs. 

(f) Government Cost Analysis 

During the first and subsequent years 

after publication of the rule, leasing 

acquisition members (which includes a 

combination of Leasing Contracting 

Officers, Lease Administration 

Managers, Realty Specialists, and 

General Counsel) will need to learn 

about the clauses and its requirements. 

GSA estimates this cost by multiplying 

the time required to review the 

regulations and guidance implementing 

the rule by the estimated compensation, 

on average, of a GS–12 leasing 

acquisition member. GSA assumes that 

leasing acquisition members will, on 

average, stay consistent in subsequent 

years. Numbers and assumptions apply 

to delegated agencies as well. 

GSA anticipates several areas of 

impact as a result of this rule. These 

impacts mirror the public impacts and 

will appear as regulatory 

familiarization, workforce training, and 

time to review compliance with clauses. 

These costs are justified in light of the 

compelling national security objective 

that this rule will advance. 

For consistency, the number of leases 

to be reviewed match the numbers in 

the ‘‘Existing HS Lease Baseline’’ row 

(1,471 combined) and ‘‘New annual 

Lease Baseline’’ row (542 combined) 

found in table in section VI.(e). 

1. Regulatory Familiarization 

a. GSA estimates that it will take 

approximately 516 leasing acquisition 

members 1.5 hours to become familiar 

with the GSAR 552.270–33 

representation. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $65,000 45 (= 

1.5 hours × $84.16 × 516). 

After the initial familiarization, GSA 

estimates it will take 15 minutes (0.25 

hours) to stay familiar with the 

representation in subsequent years. 

Therefore, GSA calculated the total 

estimated cost for this part of the rule 

to be $11,000 (= 0.25 hours × $84.16 × 

516). 

b. GSA estimates that it will take 

approximately 516 leasing acquisition 

members 30 minutes (0.5 hours) to 

become familiar with the GSAR 

552.270–34 representation. Therefore, 

GSA calculated the total estimated cost 

for this part of the rule to be $22,000 (= 

0.50 hours × $84.16 × 516). 

After the initial familiarization, GSA 

estimates it will take 6 minutes (0.10 

hours) to stay familiar with the 

representation in subsequent years. 

Therefore, GSA calculated the total 

estimated cost for this part of the rule 

to be $4,300 (= 0.10 hours × $84.16 × 

516). 

2. Workforce Training 

The Government must educate its 

leasing acquisition members to ensure 

that they are familiar with the 

representation and clause and how to 

review and act on the submitted 

information, access requests, and 

written procedures. 

a. GSA estimates that it will take 

approximately 516 leasing acquisition 

members 1 hour to complete training 

related GSAR 552.270–33 

representation. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $43,000 (= 1 

hours × $84.16 × 516). 

After the initial training, GSA 

estimates it will take 6 minutes (0.10 

hours) to maintain training related to 

the representation. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $4,300 (= 0.10 

hours × $84.16 × 516). 

b. GSA estimates that it will take 

approximately 516 leasing acquisition 

members 30 minutes (0.50 hours) to 

complete training related to the GSAR 

552.270–34 clause. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $22,000 (= 0.50 

hours × $84.16 × 516). 

After the initial training, GSA 

estimates it will take 3 minutes (0.05 

hours) to maintain training related to 

the clause. Therefore, GSA calculated 

the total estimated cost for this part of 

the rule to be $2,200 (= 0.05 hours × 

$84.16 × 516). 

3. Review of Compliance With Clauses 

The primary cost to GSA will be to 

review the representations required by 

GSAR 552.270–33 and the compliance 

with GSAR 552.270–34. 

a. GSAR 552.270–33, Foreign 

Ownership and Financing 

Representation for High-Security Leased 

Space 

i. GSA estimates that it will take 

leasing acquisition members 

approximately 6 minutes (0.10 hours) to 

review the representation at sections 

(c)(1), (d)(1), and (e)(1) (essentially no 

required disclosures required) of the 

representation clause at GSAR 552.270– 

33 for existing high-security lessors. 

Therefore, GSA calculated the total 

estimated cost for this part of the rule 

to be $12,000 (= 0.10 hours × $84.16 × 

1,471). 

ii. GSA estimates that for new highsecurity lessors each year, it will take 

leasing acquisition members 

approximately 6 minutes (0.10 hours) to 

review the representation at sections 

(c)(1), (d)(1), and (e)(1) (essentially no 

required disclosures required). 

Therefore, GSA calculated the total 

estimated cost for this part of the rule 

to be $4,600 (= 0.10 hours × $84.16 × 

542). 

iii. GSA estimates that for existing 

high-security lessors, 10 percent (or 147 

lessors) will respond affirmatively to 

one or more sections at (c)(1), (d)(1), and 

(e)(1) of the representation clause that 

the offeror ‘‘does’’ have an ‘‘immediate 

owner’’, and/or ‘‘is’’ owned or 

controlled by another entity (or ‘‘highest 

owner’’), and/or ‘‘does’’ involve a 

‘‘foreign entity’’ and will be required to 

complete additional sections at (c)(2) 

and (c)(3), potentially (c)(4), (d)(2) and 

(d)(3), potentially (d)(4), and (e)(2). GSA 

estimates that it will take leasing 

acquisition members 5 hours to 

complete the reviews on those various 

sections of the representation clause, 

notify the Federal tenant of the building 

or other improvement of any security 

concerns and necessary mitigation 

measures (if any) prior to award or 

approval of a novation agreement. 

Therefore, GSA calculated the total 


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46The GSA Office of Leasing will develop a 

templated Plan for all leasing acquisition members 

to use. Therefore, it will not require individual 

development of each plan by each member. This 

will lessen the burden. 

47As this Regulatory Impact Analysis only 

considers 1,471 high-security leases (or 

approximately 16% of the GSA leasing portfolio), 

it’s reasonable to estimate that if the entire portfolio 

was included, costs could be approximately 5X 

more costly than currently shown. 

estimated cost for this part of the rule 

to be $62,000 (= 5 hours × $84.16 × 147). 

iv. GSA estimates 10 percent, or 54 

lessors, of new high-security lessors 

each year will respond affirmatively to 

one or more sections at (c)(1), (d)(1), and 

(e)(1) of the representation clause that 

the offeror ‘‘does’’ have an ‘‘immediate 

owner’’, and/or ‘‘is’’ owned or 

controlled by another entity (or ‘‘highest 

owner’’), and/or ‘‘does’’ involve a 

‘‘foreign entity’’ and will be required to 

complete additional sections at (c)(2) 

and (c)(3), potentially (c)(4), (d)(2) and 

(d)(3), potentially (d)(4), and (e)(2). GSA 

estimates that it will take leasing 

acquisition members 5 hours to 

complete the reviews on those various 

sections of the representation clause, 

notify the Federal tenant of the building 

or other improvement of any security 

concerns and necessary mitigation 

measures (if any) prior to award or 

approval of a novation agreement. 

Therefore, GSA calculated the total 

estimated cost for this part of the rule 

to be $23,000 (= 5 hours × $84.16 × 54). 

b. GSAR 552.270–34, Access to 

Limitations for High-Security Leased 

Space 

i. GSAR 552.270–34 requires lessors 

for high-security leased space to limit 

access to the space unless approved by 

an authorized Government 

representative. GSA estimates that 10 

percent of lessors, or 147 (10 percent of 

1,471) will request approval once per 

lease and it will take the leasing 

acquisition member an estimated 3 

hours to review and approve the 

request. Therefore, GSA calculated the 

total estimated cost for this part of the 

rule to be $37,000 (= 3 hours × $84.16 

× 147). 

ii. GSA estimates that for new highsecurity lessors, 10 percent of lessors (or 

approximately 54) will request approval 

once per lease and it will take the 

leasing acquisition members an 

estimated 3 hours to review and 

approve the request. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $14,000 (= 3 

hours × $84.16 × 54). 

iii. GSA acknowledges that the rule 

will require written procedures, as 

documented in the Government’s 

Occupant Emergency Plan,46 governing 

access to the high-security leased space 

in case of emergencies. GSA estimates 

that writing these procedures will take 

approximately 2 hours. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $248,000 (= 

2 hours × $84.16 × 1,471). 

iv. GSA acknowledges that the rule 

will require, for new high-security 

leases, written procedures, as 

documented in the Government’s 

Occupant Emergency Plan, governing 

access to the high-security leased space 

in case of emergencies. GSA estimates 

that writing these procedures will take 

approximately 2 hours. Therefore, GSA 

calculated the total estimated cost for 

this part of the rule to be $91,000 (= 2 

hours × $84.16 × 542). 

After the first year the rule is 

implemented, GSA estimates it will take 

6 minutes (0.10 hours) to update any 

information in the subsequent years for 

the written procedures. GSA does not 

estimate any additional significant 

burden with access requests. Therefore, 

GSA calculated the total estimated cost 

for this part of the rule to be $12,000 (= 

0.10 hours × $84.16 × 1,471). 

The total estimated cost to GSA to 

review representations and written 

procedures is estimated to be $359,000 

in the first year after publication. The 

total estimated cost to GSA to review 

representations and written procedures 

annually is estimated to be $145,000. 

4. Reduced Competition 

GSA acknowledges both new clauses 

may lead to reduced competition. Some 

lessors may choose to exit the Federal 

market, particularly lessors that 

primarily lease to the private sector, 

because of the additional disclosure 

requirements, and the subsequent 

reduced level of competition may 

increase prices. However, estimated 

costs faced by contractors represent a 

small fraction of lease payments, and 

therefore GSA expects effects along 

these lines to be minimal. 

5. Government Total Costs 

The total cost of the above Cost 

Estimate is $511,000 in the first year 

after publication. The total cost of the 

above Cost Estimate in subsequent years 

is $166,000 annually. 

The following is a summary of the 

estimated costs calculated for a 10 year 

time horizon at a 3- and 7-percent 

discount rate: 

Summary Total costs 

Present Value (3 percent) ................... $1,750,000 

Annualized Costs (3 percent) .............. 205,000 

Present Value (7 percent) ................... 1,488,000 

Annualized Costs (7 percent) .............. 212,000 

GSA notes that this interim rule does 

not authorize GSA lease contracting 

officers to use the information disclosed 

by offerors as a differentiating factor for 

selection of a lease award, nor does it 

authorize GSA to terminate a lease, 

prevent a novation, or otherwise decline 

to make an award based on the 

disclosure. As such, GSA estimates that 

this rule will not result in these 

activities, and therefore no moving costs 

have been included for in this 

regulatory impact analysis. 

6. Overall Total Costs 

The overall total cost of the above 

Cost Estimate, including both Public 

and Government costs, is $2,653,000 in 

the first year after publication. The 

overall total cost of the above Cost 

Estimate, including both Public and 

Government costs in subsequent years, 

is $1,143,000 annually. 

The following is a summary of the 

estimated overall total costs calculated 

for a 10 year time horizon at a 3- and 

7-percent discount rate inclusive of both 

Public and Government costs: 

Summary Total costs 

Present Value (3 percent) ................. $11,216,000 

Annualized Costs (3 percent) ............ 1,315,000 

Present Value (7 percent) ................. 9,439,000 

Annualized Costs (7 percent) ............ 1,344,000 

(g) Analysis of Alternatives 

Alternative 1: GSA could take no 

regulatory action to implement this 

statute. However, this alternative would 

not provide any implementation and 

enforcement of the important national 

security measures imposed by the law. 

Moreover, the general public would not 

experience the benefits of improved 

national security resulting from the rule 

as detailed above in Section VI.(d). As 

a result, we reject this alternative. 

Alternative 2: GSA could take a more 

stringent approach to the requirements 

of the Act and apply the new clauses to 

not only all GSA leases and delegated 

leases for FSL III, IV, or V space but for 

all FSL designations. However, given 

the relatively low levels of risk at those 

facilities, as described by the ISC, 

compared with the costs and burden 

applying this new representation clause 

and access clause,47 no additional 

benefit would be gained. As a result, we 

reject this alternative. 

GSA also considered issuing an 

acquisition letter, but concluded the 

best alternative was to issue this interim 

rule directly implementing the statute 

and allowing for public comment. 


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48 In March 2017, GSA’s Office of Leasing issued 

Leasing Alert LA–FY17–06 requiring Lease 

Contracting Officers (LCOs) to determine whether 

the ownership of leased space is identified as a 

foreign-owned entity and to notify the client agency 

in such instances, so that the agency can take any 

needed security mitigation measures. The Leasing 

Alert outlined the procedures to make this 

determination which involved a review of the 

entity’s SAM registration; the Leasing Alert also 

required this review for all lease procurements and 

novations, regardless of the Facility Security Level 

(FSL). 

In October 2018, GSA added a ‘‘Foreign 

Ownership and Financing Representation,’’ to be 

included with all Request for Lease Proposals (RLP) 

packages issued for prospectus-level lease projects. 

This ‘‘paper’’ representation required the offeror to 

confirm both foreign ownership and foreign 

financing. 

49 GSA’ Leasing Desk Guide (Desk Guide). 

50 GSA’s Leasing Alerts and Lease Acquisition 

Circulars (LAC). 

(h) Specific Questions for Comment 

To understand the exact scope of the 

impact of this rule and how this impact 

could be affected in subsequent 

rulemaking, GSA welcomes input on the 

following assumptions and questions 

regarding anticipated impact on affected 

parties. 

Assumption 1: As previously stated, 

GSA assumes that most Federal lessors 

maintaining high-security leased space 

or Federal lessors that are competing for 

solicitations for high-security leased 

space are already familiar with the 

majority of the requirements of this rule, 

or, similarly, will not find the 

requirements of this interim rule as 

anything significantly more than what is 

currently expected. GSA previously 

implemented ownership disclosures 

requirements through internal policy,48

GSA’s Request for Lease Proposals (or 

solicitations), GSA’s guidance through 

its public-facing Leasing Desk Guide,49

Leasing Alerts and Lease Acquisition 

Circulars.50

Question 1: If this assumption is not 

valid, to what extent are the 

requirements in this rule significantly 

different from what GSA has currently 

been doing as part of its procedures for 

foreign ownership disclosure? 

Assumption 2: GSA estimates that this 

rule will impact mainly the Federal 

lessor industry. 

Question 2: If this assumption is not 

valid, is there another industry(s) to 

which this rule will cause significant 

impact or disruption? 

Assumption 3: The impact of this rule 

will not significantly change the way 

current Federal lessors interact with 

GSA (or other Federal agencies with 

independent leasing authority). 

Question 3: If this assumption is not 

valid, to what extent will this rule 

change how you interact with GSA (or 

other Federal agencies with 

independent leasing authority)? 

Assumption 4: The impact of this rule 

will not significantly reduce the number 

of lessors competing for High-Security 

Leased Space solicitations. 

Question 4: If this assumption is not 

valid, to what extent will this rule 

reduce the likelihood of you—lessor to 

the Federal Government for HighSecurity Leased Space—from not 

competing for future solicitations of 

High-Security Leased Space? 

Assumption 5: The compliance 

activities, and associated costs, 

estimated by GSA are stated at Section 

VI.(e). 

Question 5: Is there a compliance 

activity that GSA has failed to consider? 

If so, please specify the activity, explain 

the activity, describe the impact of the 

activity, and please estimate the annual 

cost of such activities and subsequent 

yearly activity costs. 

Question 6: Is there a compliance 

activity that GSA has noted that is 

significantly understated (in terms of 

annual and subsequent costs)? If so, 

which compliance activity and what 

specifically was understated? Please 

explain how the compliance activity 

should be estimated. 

Assumption 7: Other agencies relying 

upon GSA’s leasing authority have 

similar profiles of high security leases in 

their inventory. 

Question 7: What information is 

available to better estimate high security 

leases in other agency inventories? 

Assumption 8: GSA sufficiently 

detailed all compliance requirements for 

the rule. 

Question 9: What additional 

information or guidance do you view as 

necessary to effectively comply with 

this rule? 

Question 10: What other challenges 

do you anticipate facing in effectively 

complying with this rule? 

Question 11: What thoughts or 

observations would you like to share 

regarding foreign ownership, including 

beneficial ownership, for GSA to 

consider in subsequent rule-making? 

VII. Executive Order 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This interim rule has been 

reviewed in accordance with E.O. 12866 

Section 6(b) and determined by OMB to 

be a significant regulatory action. See 

Section VI for a regulatory impact 

analysis of the rule. 

VIII. Congressional Review Act 

The Congressional Review Act, 5 

U.S.C. 801 et seq., as amended by the 

Small Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a ‘‘major rule’’ may take 

effect, the agency promulgating the rule 

must submit a rule report, which 

includes a copy of the rule, to each 

House of the Congress and to the 

Comptroller General of the United 

States. A major rule cannot take effect 

until 60 days after it is published in the 

Federal Register. This interim rule has 

been reviewed and determined by OMB 

not to be a ‘‘major rule’’ under 5 U.S.C. 

804(2). 

IX. Regulatory Flexibility Act 

The General Services Administration 

does not expect this interim rule to have 

a significant economic impact on a 

substantial number of small entities 

within the meaning of the Regulatory 

Flexibility Act, 5 U.S.C. 601, et seq. 

However, an Initial Regulatory 

Flexibility Analysis has been performed, 

and is summarized as follows: 

The purpose of this interim rule is to 

implement certain requirements outlined in 

the Secure Federal LEASEs Act (Pub. L. 116– 

276) into the GSAR. 

The objective of the rule is to prescribe 

appropriate policies and procedures to 

address the risks of foreign ownership of 

Government-leased real estate and requires 

the disclosure of ownership information for 

high-security space leased to accommodate a 

Federal agency. One new representation and 

one new clause have been developed to 

support these policies and procedures: GSAR 

552.270–33 (representation) and GSAR 

552.270–34 (clause). Both will be required in 

all novations, solicitations and contracts for 

leased space that (1) will be occupied by 

Federal employees for nonmilitary activities; 

and (2) have a facility security level of III, IV, 

or V. 

A new representation requirement at GSAR 

552.270–33 will be incorporated into all new 

lease awards, options exercised for current 

leases, lease extensions, and ownership 

changes for high-security leased space. 

Except where otherwise provided, the 

statutory disclosure requirements shall apply 

with respect to any lease or novation 

agreement entered into on or after June 30, 

2021, involving high-security leased space. 

That includes new, replacing, succeeding, 

and superseding leases, renewal options, 

extensions, and novations. This includes 

actions involving small entities. The 

representation requires offerors for highsecurity leased space to identify whether the 

immediate owner, highest-level owner, or an 

entity involved in the financing of the lease 

is foreign-owned. If so, they must represent 


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the associated country. Awardees will also be 

required to re-represent on an annual basis. 

This representation also applies upon change 

of ownership/novations. 

As of June 2021, GSA has approximately 

7,860 leases in total. Approximately 68 

percent (5,345) of leasing entities were small 

entities. This information is based on internal 

inventory data sources. Approximately 1,263 

of GSA portfolio leases are for high-security 

lease space (lease space in a facility with a 

security level of III, IV, or V). 76 leases per 

year are estimated to be solicited for new 

high-security space procurements. These 

solicitations result from a mix of expiring 

high-security leases or new requirements for 

high-security facilities. Using the 

approximation above (68 percent), GSA 

estimates that for the 1,263 lessors already 

maintaining leased space at a Level III, IV, or 

V secure facility approximately 859 will be 

small entities (1,263*68 percent). If GSA 

includes agencies with delegated leasing 

authority, the approximate number of total 

leases at a Level III, IV, or V is 1,471. This 

would increase the approximate number of 

small entities to 1000 (from 859). For the 

estimated 76 solicitations in subsequent 

years, assuming 3 offerors per solicitation, 

approximately 155 will be submitted by 

small entities. 

The clause at GSAR 552.270–34 requires 

lessors for high-security leased space to limit 

access to the space unless approved by an 

authorized Government representative. 

This rule does not duplicate, overlap, or 

conflict with any other Federal rules. 

Because of the requirements outlined by 

the statute, it is not possible to establish 

different compliance or reporting 

requirements or timetables that take into 

account the resources available to small 

entities or to exempt small entities from 

coverage of the rule, or any part thereof. 

However, in order to reduce the burden 

imposed on the public, GSA is currently 

reviewing and investigating potential future 

implementation through electronic means, 

including externally (System for Award 

Management) or internally (GSA’s Lease 

Offer Platform). 

Entities that provide affirmative responses 

when completing the representation at 

552.270–33 would be required to provide 

additional representation information in their 

offers for high-security leases. 

The Regulatory Secretariat Division 

has submitted a copy of the IRFA to the 

Chief Counsel for Advocacy of the Small 

Business Administration. A copy of the 

IRFA may be obtained from the 

Regulatory Secretariat Division. GSA 

invites comments from small business 

concerns and other interested parties on 

the expected impact of this rule on 

small entities. 

GSA will also consider comments 

from small entities concerning the 

existing regulations in subparts affected 

by the rule in accordance with 5 U.S.C. 

610. Interested parties must submit such 

comments separately and should cite 5 

U.S.C. 610 (GSAR Case 2021–G527) in 

correspondence. 

X. Paperwork Reduction Act 

The Paperwork Reduction Act (44 

U.S.C. chapter 35) applies. GSA has 

requested, and OMB authorized, 

emergency processing of the collection 

of information involved in this rule, 

consistent with 5 CFR 1320.13. GSA has 

determined the following conditions 

have been met: 

a. The collection of information is 

needed prior to the expiration of time 

periods normally associated with a 

routine submission for review under the 

provisions of the PRA, because the 

immediate and highest level owner 

disclosure requirement for high-security 

leased space in the Secure Federal 

LEASEs Act goes into effect on June 30, 

2021. 

b. The collection of information is 

essential to the mission of GSA to 

ensure compliance with the Secure 

Federal LEASEs Act and protect the 

Government supply chain from risks 

posed by foreign owners. 

c. Moreover, GSA cannot comply with 

existing representations because public 

harm is reasonably likely to result if 

current procedures are followed. 

Specifically, authorizing collection of 

this information will ensure that GSA 

does not enter into leases that are in 

violation of the Secure Federal LEASEs 

Act or enter into, extend, or renew 

leases with any entity or lessor that is 

in violation of the Secure Federal 

LEASEs Act. 

This requirement supports 

implementation of Section 3 of the 

Secure Federal LEASEs Act (Pub. L. 

116–276) for high-security leased space. 

This section requires offerors to identify 

the immediate or highest-level owner of 

the space, including any financing 

entity, and disclose whether that owner 

or financing entity is a foreign person or 

entity, including the country associated 

with the ownership entity. The offerors 

shall (1) provide such identification and 

disclosure when first submitting a 

proposal in response to a solicitation; 

and, if awarded the lease, (2) update 

such information annually. 

This requirement is partially 

implemented in the Federal Acquisition 

Regulation (FAR) through the provisions 

at FAR 52.204–3, Taxpayer 

Identification, FAR 52.204–7, System 

for Award Management, FAR 52.204– 

17, Ownership and Control of Offeror, 

and clause at FAR 52.204–13, System 

for Award Management Maintenance. 

OMB Control Numbers 9000–0097 and 

9000–0185 cover the FAR provisions 

and clause. However, the FAR does not 

account for foreign financing as required 

by the Act. 

The annual public reporting burden 

for this collection of information 

through GSAR 552.270–33 is estimated 

based on the time for reviewing 

instructions, searching existing data 

sources, gathering and maintaining the 

data needed, and completing and 

reviewing the collection of information. 

The annual reporting burden is 

estimated as follows: 

1. Initial Disclosure 

Baseline Representation 

Estimated annual responses: 542. 

Estimated hours per response: 2. 

Additional Representation 

Estimated annual responses: 54. 

Estimated hours per response: 10. 

Total Initial Response Burden Hours: 

1,624. 

2. Annual Updates 

Estimated annual responses: 542. 

Estimated hours per response: 0.25. 

Total Update Response Burden Hours: 

136. 

Public comments are particularly 

invited on: Whether this collection of 

information is necessary; whether it will 

have practical utility; whether our 

estimate of the public burden of this 

collection of information is accurate, 

and based on valid assumptions and 

methodology; ways to enhance the 

quality, utility, and clarity of the 

information to be collected; and ways in 

which we can minimize the burden of 

the collection of information on those 

who are to respond, through the use of 

appropriate technological collection 

techniques or other forms of information 

technology. 

XI. Determination To Issue an Interim 

Rule 

A determination has been made under 

the authority of the Administrator of 

General Services (GSA) that urgent and 

compelling circumstances necessitate 

that this interim rule go into effect 

earlier than 60 days after its publication 

date. 

Since the Secure Federal LEASEs Act 

was signed on December 30, 2020, GSA 

has been working diligently to 

implement the statute, which has 

multiple effective dates embedded. 

Specifically, Section 7 requires 

implementation of the Section 3 

requirements by June 30, 2021. 

Given the complexity of the Secure 

Federal LEASEs Act, this rule required 

thorough efforts to reach out to other 

agencies and conduct up-front analysis. 

These factors have left GSA with 

insufficient time to publish the rule 

with 60 days before the legislatively 

established effective date of June 30, 

2021, or to complete full public notice 

and comment before the rule becomes 


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34978 Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Rules and Regulations 

effective. As noted, however, GSA is 

seeking public comment on this interim 

rule and will consider and address those 

comments. 

It is worth noting this rule follows 

FAR rules dealing with ownership 

disclosure and supply chain security, 

such as FAR Case 2012–024 which 

added FAR provision 52.204–17 and 

FAR Case 2019–009 which added FAR 

provision 52.204–24. As such, 

Government agencies are already 

authorized to collect certain immediate 

and highest-level owner information 

(reference OMB Control Numbers 9000– 

0097 and 9000–0185). 

Having an implementing regulation in 

place by the effective date is important 

to avoid confusion, uncertainty, and 

potentially substantial legal 

consequences for agencies and the 

lessor community. The statute requires 

lessors to identify and disclose whether 

the immediate or highest-level owner of 

the leased space, including an entity 

involved in the financing thereof, is a 

foreign person or a foreign entity, 

including the country associated with 

the ownership entity. If they did so 

without an implementing regulation in 

place, contractors would have no 

guidance as to how to comply with the 

requirement. 

For the foregoing reasons, pursuant to 

41 U.S.C. 1707(d), GSA finds that urgent 

and compelling circumstances make 

compliance with the notice and 

comment and delayed effective date 

requirements of 41 U.S.C. 1707(a) and 

(b) impracticable, and invokes the 

exception to those requirements under 

1707(d). While a public comment 

process will not be completed prior to 

the rule’s effective date, GSA will 

consider comments submitted in 

response to this interim rule in issuing 

a subsequent rulemaking. 

List of Subjects in 48 CFR Parts 501, 

552, and 570 

Government procurement. 

Jeffrey A. Koses, 

Senior Procurement Executive, Office of 

Acquisition Policy, Office of Governmentwide 

Policy, General Services Administration. 

Therefore, GSA amends 48 CFR parts 

501, 552, and 570 as set forth below: 

■ 1. The authority citation for 48 CFR 

parts 501, 552, and 570 continues to 

read as follows: 

Authority: 40 U.S.C. 121(c). 

PART 501—GENERAL SERVICES 

ADMINISTRATION ACQUISITION 

REGULATION SYSTEM 

■ 2. In section 501.106, amend table 1 

by adding entries for ‘‘552.270–33’’ and 

‘‘570.703(c)’’ in numerical order to read 

as follows: 

501.106 OMB approval under the 

Paperwork Reduction Act. 

GSAR reference OMB 

control No. 

* * * * * 

552.270–33 ............................. 3090–0324 

570.703(c) ............................... 3090–0324 

* * * * * 

PART 552—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 3. Add sections 552.270–33 and 

552.270–34 to read as follows: 

552.270–33 Foreign Ownership and 

Financing Representation for High-Security 

Leased Space. 

As prescribed in 570.703(c), use the 

following clause: 

Foreign Ownership and Financing 

Representation For High Security 

Leased Space (JUN 2021) 

(a) Definitions. As used in this clause— 

Financing means the process of raising or 

providing funds through debt or equity for 

purposes of meeting the requirements of the 

Lease, including, but not limited to, 

acquisition, maintenance, and construction 

of, or improvements to, the Property. 

Foreign entity means a: 

(i) Corporation, company, business 

association, partnership, society, trust, or any 

other nongovernmental entity, organization, 

or group that is headquartered or organized 

under the laws of a country that is not the 

United States or a state, local government, 

tribe, or territory within the United States; or 

(ii) Government or governmental 

instrumentality that is not the United States 

Government. 

Foreign person means an individual who is 

not: 

(i) A United States citizen; or 

(ii) An alien lawfully admitted for 

permanent residence in the United States. 

Highest-level owner means the entity that 

owns or controls an immediate owner of the 

offeror or Lessor, or that owns or controls one 

or more entities that control an immediate 

owner of the offeror or Lessor. No entity 

owns or exercises control of the highest-level 

owner. 

Immediate owner means an entity, other 

than the offeror or Lessor, that has direct 

control of the offeror or Lessor. Indicators of 

control include, but are not limited to, one 

or more of the following: Ownership or 

interlocking management, identity of 

interests among family members, shared 

facilities and equipment, and the common 

use of employees. 

Unique entity identifier means a number or 

other identifier used to identify a specific 

commercial, nonprofit, or Government entity. 

See www.sam.gov for the designated entity 

for establishing unique entity identifiers. 

(b) Timing. The Offeror or Lessor shall 

complete this representation when 

submitting a proposal. If the Offeror is the 

successful awardee, the Offeror (now Lessor) 

shall review, update, and provide this 

representation on an annual basis, reflecting 

all changes to immediate owner, highestlevel owner and financing during the 

preceding 1-year period, starting one year 

from the Lease Term Effective Date through 

final payment of any contract. If the Lessor 

intends to transfer the lease to a successor in 

interest under the circumstances set forth in 

FAR 42.1204, the Lessor shall submit this 

representation to the Lease Contracting 

Officer with any request to novate the lease. 

The Offeror or Lessor is responsible for the 

currency, accuracy and completeness of the 

data disclosed, and for any liability resulting 

from the Government’s reliance on inaccurate 

or incomplete data. 

(c) Immediate owner. (1) The Offeror or 

Lessor represents that it b does or b does not 

have an immediate owner. 

(2) If the Offeror or Lessor indicates ‘‘does’’ 

in paragraph (c)(1) of this clause, then enter 

the following information for the immediate 

owner. If the offeror or Lessor has more than 

one immediate owner (e.g., joint venture), 

then the offeror or Lessor shall provide the 

information for each entity. 

Legal name (do not use a ‘‘doing 

business as’’ name).

Unique entity identifier (if available).

(3) If the Offeror or Lessor indicates ‘‘does’’ 

in paragraph (c)(1) of this clause, then 

complete this additional representation: Is 

the immediate owner a foreign entity?: b Yes 

or b No. 

(4) If the Offeror or Lessor indicates ‘‘does’’ 

in paragraph (c)(1) of this clause, then 

complete this additional representation: Is 

the immediate owner a foreign person?: b 

Yes or b No. 

(5) If the Offeror or Lessor indicates ‘‘Yes’’ 

in either paragraph (c)(3) or (4) of this clause, 

indicating that there is foreign ownership (as 

a foreign entity or foreign person), then enter 

the following information for the foreign 

owner (respond for each as applicable). 

Physical address.

Country.

(d) Highest-level owner. (1) The Offeror or 

Lessor represents that the immediate owner, 

if any, b is or b is not owned or controlled 

by another entity? 

(2) If the Offeror or Lessor indicates ‘‘is’’ 

in paragraph (d)(1) of this clause, indicating 

that the immediate owner is owned or 

controlled by another entity, then enter the 

following information for the highest-level 

owner. 

Legal name (do not use a ‘‘doing 

business as’’ name).

Unique entity identifier (if available).


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Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Rules and Regulations 34979 

(3) If the Offeror or Lessor indicates ‘‘is’’ 

in paragraph (d)(1) of this clause, then 

complete this additional representation: Is 

the highest-level owner a foreign entity?: b 

Yes or b No. 

(4) If the Offeror or Lessor indicates ‘‘is’’ 

in paragraph (d)(1) of this clause, then 

complete this additional representation: Is 

the highest-level owner a foreign person?: b 

Yes or b No. 

(5) If the Offeror or Lessor indicates ‘‘Yes’’ 

in either paragraph (d)(3) or (4) of this clause, 

indicating that there is foreign ownership (as 

a foreign entity or foreign person), then enter 

the following information for the foreign 

owner (respond for each as applicable). 

Physical address.

Country.

(e) Financing entity. (1) The Offeror or 

Lessor represents that the financing b does 

or b does not involve a foreign entity? 

(2) The Offeror or Lessor represents that 

the financing b does or b does not involve 

a foreign person? 

(3) If the Offeror or Lessor indicates ‘‘does’’ 

in either paragraph (e)(1) or (2) of this clause, 

indicating foreign financing (as a foreign 

entity or foreign person), then enter the 

following information for the foreign 

financing (respond for each as applicable). 

Legal name (do not use a ‘‘doing 

business as’’ name).

Unique entity identifier (if available).

Physical address.

Country.

(End of clause) 

552.270–34 Access Limitations for HighSecurity Leased Space. 

As prescribed in 570.703(d), use the 

following clause: 

Access Limitations for High-Security 

Leased Space (Jun 2021) 

(a) The Lessor, including representatives of 

the Lessor’s property management company 

responsible for operation and maintenance of 

the leased space, shall not— 

(1) Maintain access to the leased space; or 

(2) Have access to the leased space without 

prior approval of the authorized Government 

representative. 

(b) Access to the leased space or any 

property or information located within that 

Space will only be granted by the 

Government upon determining that such 

access is consistent with the Government’s 

mission and responsibilities. 

(c) Written procedures governing access to 

the leased space in the event of emergencies 

shall be documented as part of the 

Government’s Occupant Emergency Plan, to 

be signed by both the Government and the 

Lessor. 

(End of clause) 

PART 570—ACQUIRING LEASEHOLD 

INTERESTS IN REAL PROPERTY 

■ 4. Add section 570.118 to subpart 

570.1 to read as follows: 

570.118 Foreign Ownership Disclosure. 

If a foreign ownership disclosure is 

made pursuant to clause 552.270–33: 

(a) The contracting officer shall notify 

the Federal tenant for the leased space 

in writing: 

(1) If the disclosure is made during 

the lease acquisition process, the 

contracting officer shall notify the 

Federal tenant prior to lease award. 

(2) If the disclosure is made 

concurrent with a request for novation, 

the contracting officer shall notify the 

Federal tenant prior to executing the 

novation. 

(3) If the disclosure is made 

concurrent with a renewal option or 

extension, the contracting officer shall 

notify the Federal tenant prior to 

executing the renewal option or 

extension. 

(b) The contracting officer shall 

coordinate with the Federal tenant 

regarding security concerns and any 

necessary mitigation measures. 

■ 5. Amend section 570.703 by adding 

paragraphs (c) and (d) to read as follows: 

570.703 GSAR contract clauses. 

* * * * * 

(c) Insert the representation clause at 

552.270–33, Foreign Ownership and 

Financing Representation for HighSecurity Leased Space, in novations, 

solicitations and contracts for leased 

space that: 

(1) Will be occupied by Federal 

employees for nonmilitary activities; 

and 

(2) Has a facility security level of III, 

IV, or V. 

(d) Insert the clause at 552.270–34 

Access Limitations for High-Security 

Leased Space, in novations, solicitations 

and contracts for leased space that: 

(1) Will be occupied by Federal 

employees for nonmilitary activities; 

and 

(2) Has a facility security level of III, 

IV, or V. 

[FR Doc. 2021–14161 Filed 6–30–21; 8:45 am] 

BILLING CODE 6820–61–P 

DEPARTMENT OF THE INTERIOR 

Fish and Wildlife Service 

50 CFR Part 17 

[Docket No. FWS–R4–ES–2019–0059; 

FF09E21000 FXES11110900000 212] 

RIN 1018–BD09 

Endangered and Threatened Wildlife 

and Plants; Designation of Critical 

Habitat for Suwannee Moccasinshell 

AGENCY: Fish and Wildlife Service, 

Interior. 

ACTION: Final rule. 

SUMMARY: We, the U.S. Fish and 

Wildlife Service (Service), designate 

critical habitat for the Suwannee 

moccasinshell (Medionidus walkeri) 

under the Endangered Species Act of 

1973 (Act), as amended. In total, 

approximately 190 miles (306 

kilometers) of stream channels in 

Alachua, Bradford, Columbia, Dixie, 

Gilchrist, Hamilton, Lafayette, Madison, 

Suwannee, and Union Counties, 

Florida, and Brooks and Lowndes 

Counties, Georgia, fall within the 

boundaries of the critical habitat 

designation. The effect of this regulation 

is to designate critical habitat for the 

Suwannee moccasinshell under the Act. 

DATES: This rule is effective August 2, 

2021. 

ADDRESSES: This final rule is available 

on the internet at http://

www.regulations.gov under Docket No. 

FWS–R4–ES–2019–0059 and at https:// 

www.fws.gov/panamacity/. Comments 

and materials we received, as well as 

some supporting documentation we 

used in preparing this rule, are available 

for public inspection at http://

www.regulations.gov. All of the 

comments, materials, and 

documentation that we considered in 

this rulemaking are available upon 

mailed request from U.S. Fish and 

Wildlife Service, Panama City 

Ecological Services Field Office, 1601 

Balboa Avenue, Panama City, FL 32405; 

or by telephone 850–769–0552. 

The coordinates or plot points or both 

from which the maps are generated are 

included in the administrative record 

for this critical habitat designation and 

are available at http://

www.regulations.gov at Docket No. 

FWS–R4–ES–2019–0059, and at the 

Panama City Ecological Services Field 

Office at https://www.fws.gov/ 

panamacity/ (see FOR FURTHER

INFORMATION CONTACT). Any additional 

tools or supporting information that we 

developed for this critical habitat 

designation will also be available at the 


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