[Federal Register Volume 66, Number 89 (Tuesday, May 8, 2001)]
[Rules and Regulations]
[Pages 23169-23177]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-11390]


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GENERAL SERVICES ADMINISTRATION

41 CFR Parts 101-20, 101-21, and 102-85

RIN 3090-AG33


Pricing Policy for Occupancy in GSA Space

AGENCY: Office of Business Performance, Public Buildings Service.

ACTION: Interim rule.

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SUMMARY: The General Services Administration (GSA) is revising the 
Federal Property Management Regulations (FPMR) by moving coverage of 
GSA's Rent program into the Federal Management Regulation (FMR). A 
cross-reference is added to the FPMR to direct readers to the coverage 
in the FMR. The FMR is written in plain language to provide agencies 
with updated regulatory material that is easy to read and understand. 
This interim rule establishes the pricing policy guidance for Occupancy 
Agreements between GSA and customer agencies. It also governs intra-
governmental pricing of space and services.

DATES: Effective Date: May 8, 2001.
    Comment Date: Comments should be submitted on or before July 9, 
2001 to be considered in the formulation of a final rule.

ADDRESSES: Written comments should be submitted to: Mr. Michael 
Hopkins, Regulatory Secretariat (MVRS), Office of Governmentwide 
Policy, General Services Administration, 1800 F Street, NW., 
Washington, DC 20405.
    E-mail comments submitted over the Internet should be addressed to 
<a href="/cdn-cgi/l/email-protection#c5978c8bebf6f5fcf5e88482f6f685a2b6a4eba2aab3"><span class="__cf_email__" data-cfemail="6c3e2522425f5c555c412d2b5f5f2c0b1f0d420b031a">[email protected]</span></a>.

FOR FURTHER INFORMATION CONTACT: Mr. Ronald Kendall, Office of 
Portfolio Management, General Services Administration, at 202-501-0638, 
or Internet e-mail at <a href="/cdn-cgi/l/email-protection#ddafb2b3f3b6b8b3b9bcb1b19dbaaebcf3bab2ab"><span class="__cf_email__" data-cfemail="f3819c9ddd98969d97929f9fb3948092dd949c85">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule changes the methods by which GSA-controlled space 
is identified and measured, eliminates the specific physical 
description of the components of standard level alterations, and 
substitutes budget guidance for alterations, providing customer 
agencies flexibility in designing space to meet their mission needs.
    The recommendations are being implemented to improve GSA's overall 
management of real property assets and the level of service and choices 
provided to its customer agencies.
    As a result of the principles outlined in this rule:
    (1) Federal agencies will have greater choice in using GSA to meet 
space needs;
    (2) GSA will remain available to provide the benefits of 
centralized services desired by its customers; and
    (3) GSA's relationship with its customers will more closely 
approximate landlord/customer relationships typical in the private 
sector, providing incentives to economize and speed program delivery.
    The FMR, which replaces the FPMR, contains a refined and 
streamlined set of policies and regulatory requirements related to 
managing property and administrative services. Non-regulatory 
materials, such as guidance, procedures, and standards currently found 
in the FPMR, and new non-regulatory materials may become available in 
separate documents, such as customer guides.

B. Executive Order 12866

    GSA has determined that this interim rule is a significant 
regulatory action for the purposes of Executive Order 12866 of 
September 30, 1993.

C. Regulatory Flexibility Act

    The interim rule is not expected 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.

D. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because this interim 
rule does not impose recordkeeping or information collection 
requirements, or the collection of information from offerors, 
contractors, or members of the public which require the approval of the 
Office of Management and Budget (OMB) under 44 U.S.C. 3501, et seq.

E. Small Business Regulatory Enforcement Fairness Act

    This interim rule is also exempt from congressional review 
prescribed under 5 U.S.C. 801 since it relates solely to agency 
management and personnel.

F. Administrative Procedures Act

    GSA finds good cause to make this rule effective upon publication 
of this document in the Federal Register under the Administrative 
Procedure Act (APA) (5 U.S.C. 553(d). This interim final rule does not 
impose any additional responsibilities on entities in the private 
sector. Instead, its purpose is to improve asset management practices 
that affect only Federal agencies that occupy real property owned or 
controlled by GSA.

List of Subjects in 41 CFR Parts 101-20, 101-21, and 102-85

    Federal buildings and facilities, Government property and 
management.

    For the reasons set forth in the preamble, 41 CFR parts 101-20, 
101-21, and 102-85 are amended to read as follows:

CHAPTER 101--[AMENDED]

PART 101-20--MANAGEMENT OF BUILDINGS AND GROUNDS

    1. The authority citation for part 101-20 continues to read as 
follows:

    Authority: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c).


Sec. 101-20.102  [Amended]

    2. Amend Sec. 101-20.102 by removing and reserving paragraph (e).

    3. Part 101-21 is revised to read as follows:

PART 101-21--FEDERAL BUILDINGS FUND

    Authority: 40 U.S.C. 486(c); 40 U.S.C. 490(j) (The Federal 
Property and Administrative Services Act of 1949, as amended, Sec. 
205(c) and 210(j), 63 Stat. 390 and 86 Stat. 219; (40 U.S.C. 486(c) 
and 40 U.S.C. 490(j), respectively).


Sec. 101-21.000  Cross-reference to the Federal Management Regulation 
(FMR) (41 CFR chapter 102, parts 102-1 through 102-220.)

    For information previously contained in this part, see FMR part 85 
(41 CFR part 102-85).

CHAPTER 102--[AMENDED]

    4. Part 102-85 is added to subchapter C to read as follows:

PART 102-85--PRICING POLICY FOR OCCUPANCY IN GSA SPACE

Subpart A--Pricing Policy--General

Sec.
102-85.5  By what authority is the pricing policy in this part 
prescribed?
102-85.10  What is the scope of this part?
102-85.15  What are the basic policies for charging Rent for space 
and services?
102-85.20   What does an Occupancy Agreement (OA) do?
102-85.25   What is the basic principle governing OAs?

[[Page 23170]]

102-85.30   Are there special rules for certain Federal customers?
102-85.35   What definitions apply to this part?
102-85.40   What are the major components of the pricing policy?
Subpart B--Occupancy Agreement
102-85.45   When is an Occupancy Agreement required?
102-85.50   When does availability of funding have to be certified?
102-85.55   What are the terms and conditions included in an OA?
102-85.60   Who can execute an OA?
102-85.65   How does an OA obligate the customer agency?
102-85.70   Are the standard OA terms appropriate for non-cancelable 
space?
102-85.75   When can space assignments be terminated?
102-85.80   Who is financially responsible for expenses resulting 
from tenant non-performance?
102-85.85   What if a customer agency participates in a 
consolidation?
Subpart C--Tenant Improvement Allowance
102-85.90   What is a tenant improvement allowance?
102-85.95   Who pays for the TI allowance?
102-85.100   How does a customer agency pay for tenant improvements?
102-85.105   How does an agency pay for customer alterations that 
exceed the TI allowance?
102-85.110   Can the allowance amount be changed?
Subpart D--Rent Charges
102-85.115   How is the Rent determined?
102-85.120   What is ``shell Rent''?
102-85.125   What alternate methods may be used to establish Rent in 
Federally owned space?
102-85.130   How are exemptions from Rent granted?
102-85.135   What if space and services are provided by other 
executive agencies?
102-85.140   How are changes in Rent reflected in OAs?
102-85.145   When are customer agencies responsible for Rent 
charges?
102-85.150   How will Rent charges be reflected on the customer 
agency's Rent bill?
102-85.155   What does a customer agency do if it does not agree 
with a Rent bill?
102-85.160   How does a customer agency know how much to budget for 
Rent?
Subpart E--Standard Levels of Service
102-85.165   What are standard levels of service?
102-85.170   Can flexitime and other alternative work schedules cost 
the customer agency more?
102-85.175   Are the standard level services for cleaning, 
mechanical operation, and maintenance identified in an OA?
102-85.180   Can there be other standard services?
102-85.185   Can space be exempted from the standard levels of 
service?
102-85.190   Can GSA Rent be adjusted when standard levels of 
service are performed by other customer agencies?
Subpart F--Special Services
102-85.195   Does GSA provide special services?
Subpart G--Continued Occupancy, Relocation and Forced Moves
102-85.200   Can customer agencies continue occupancy of space or 
must they relocate at the end of an OA?
102-85.205   What happens if a customer agency continues occupancy 
after the expiration of an OA?
102-85.210   What if a customer agency has to relocate?
102-85.215   What if another customer agency forces a GSA customer 
to move?
102-85.220   Can a customer agency forced to relocate waive the 
reimbursements?
102-85.225   What are the funding responsibilities for relocations 
resulting from emergencies?

    Authority: 40 U.S.C. 486(c).

Subpart A--Pricing Policy--General


Sec. 102-85.5  By what authority is the pricing policy in this part 
prescribed?

    (a) General authority is granted in the Federal Property and 
Administrative Services Act of 1949, as amended, Sec. 205(c) and 
210(j), 63 Stat. 390 and 86 Stat. 219; (40 U.S.C. 486(c) and 40 U.S.C. 
490(j), respectively).
    (b) This part implements the applicable provisions of Federal law, 
including, but not limited to, the:
    (1) Federal Property and Administrative Services Act of 1949, 63 
Stat. 377, as amended;
    (2) Act of July 1, 1898 (40 U.S.C. 285);
    (3) Act of April 28, 1902 (40 U.S.C. 19);
    (4) Act of August 27, 1935 (40 U.S.C. 304c);
    (5) Public Buildings Act of 1959, as amended (40 U.S.C. 601-619);
    (6) Public Buildings Amendments of 1972, Pub. L. 92-313, (86 Stat. 
219);
    (7) Rural Development Act of 1972, Pub. L. 92-419, (86 Stat. 674);
    (8) Reorganization Plan No. 18 of 1950 (40 U.S.C. 490 note);
    (9) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601 et 
seq.);
    (10) National Environmental Policy Act of 1969, as amended (42 
U.S.C. 4321 et seq.);
    (11) Intergovernmental Cooperation Act of 1968 and the Federal 
Urban Land Use Act (42 U.S.C. 4201-4244; 40 U.S.C. 531-535);
    (12) Public Buildings Cooperative Use Act of 1976, as amended (40 
U.S.C. 490(a)(16)-(19), 601a and 612a);
    (13) Public Buildings Amendments of 1988, Pub. L. 100-678, (102 
Stat. 4049);
    (14) National Historic Preservation Act of 1966 as amended (16 
U.S.C. 461 et seq.);
    (15) Executive Order 12072 of August 16, 1978 (43 FR 36869);
    (16) Executive Order 12411 of March 29, 1983 (48 FR 13391);
    (17) Executive Order 12512 of April 29, 1985 (50 FR 18453);
    (18) Executive Order 13005 of May 21, 1996 (61 FR 26069); and
    (19) Executive Order 13006 of May 21, 1996 (61 FR 26071).


Sec. 102-85.10  What is the scope of this part?

    (a) This part describes GSA policy and principles for the 
assignment and occupancy of space under its control and the rights and 
obligations of GSA and the customer agencies that request or occupy 
such space pursuant to GSA Occupancy Agreements (OA).
    (b) Space managed by agencies under delegation of authority from 
GSA is subject to the provisions of this part.
    (c) This part is not applicable to:
    (1) Licenses, permits or leases with non-Federal entities under the 
Public Buildings Cooperative Use Act (40 U.S.C. 490(a)(16-19)); or
    (2) The disposal of surplus lease space under section 210(h)(2) of 
the Federal Property and Administrative Services Act of 1949, as 
amended (40 U.S.C. 490(h)(2)).


Sec. 102-85.15  What are the basic policies for charging Rent for space 
and services?

    (a) GSA will charge for space and services furnished by GSA (unless 
otherwise exempted by the Administrator of General Services) a Rent 
charge which will approximate commercial charges for comparable space 
and services. Rent for all assignments for GSA-controlled space will be 
priced according to the principles of the pricing policy in this part. 
These principles are reflected in the following elements of GSA Rent 
charges:
    (1) ``Shell'' Rent based on approximate commercial charges for 
comparable space and services for Federally owned space (accomplished 
using appraisal procedures);
    (2) Rent based on actual cost of the lease, including the costs (if 
any) of services not provided by the lessor, plus a GSA fee;
    (3) Amortization of any tenant improvement allowance used;
    (4) Any applicable real estate taxes, operating costs, parking, 
security and joint use fees; and
    (5) For certain projects involving new construction or major 
renovation of Federally-owned buildings, a return on investment pricing 
approach if an appraisal-determined rental value does not provide a 
minimum return (OMB discount rate for calculating the present value of 
yearly costs plus 2%) on the cost of the prospective capital

[[Page 23171]]

investment. Each specific use of Return on Investment (ROI) pricing 
must be approved by OMB and duly recorded in an Occupancy Agreement 
(OA) with the customer agency. Once the ROI methodology is employed to 
establish Rent for a capital investment, the ROI method must be 
retained for the duration of the OA term.
    (b) Special services not included in the standard levels of service 
may be provided by GSA on a reimbursable basis. GSA may also furnish 
alterations on a reimbursable basis in buildings where GSA is 
responsible for alterations only.
    (c) The financial terms and conditions under which GSA assigns, and 
a customer agency occupies, each block of GSA-controlled space, shall 
be documented in a written OA.


Sec. 102-85.20  What does an Occupancy Agreement (OA) do?

    An OA defines GSA's relationship with each customer agency and:
    (a) Establishes specific financial terms, provisions, rights, and 
obligations of GSA and its customer for each space assignment;
    (b) Minimizes exposure to future unknown costs for both GSA and 
customer agencies;
    (c) Stabilizes Rent payments to the extent reasonable and desired 
by customers; and
    (d) Allows tailoring of space and related services to meet customer 
agency needs.


Sec. 102-85.25  What is the basic principle governing OAs?

    The basic principle governing OAs is to adopt the private sector 
practice of capturing in a written document the business terms to which 
GSA and a customer agency agree concerning individual space 
assignments.


Sec. 102-85.30  Are there special rules for certain Federal customers?

    Yes, in lieu of OAs, GSA is able to enter into agreements with 
customer agencies that reflect the parties particular needs. For 
example, the space and services provided to the U.S. House of 
Representatives and the U.S. Senate are governed by existing memoranda 
of agreement (MOA). When there are conflicts between the provisions of 
this part and MOAs, the MOAs prevail.


Sec. 102-85.35  What definitions apply to this part?

    The following definitions apply to this part:
    Accept space or acceptance of space means a commitment from an 
agency to occupy specified GSA-controlled space.
    Agency-controlled and/or operated space means:
    (1) Space that is owned, leased, or otherwise controlled or 
operated by Federal agencies under any authority other than the Federal 
Property and Administrative Services Act of 1949, as amended; and
    (2) it also includes agency-acquired space for which acquisition 
authority has been delegated or otherwise granted to the agency by GSA. 
It does not include space covered by an OA.
    Assign or assignment is defined in the definition for space 
assignment.
    Building shell means the complete enveloping structure, the base-
building systems, and the finished common areas (building common and 
floor common) of a building that bound the tenant areas.
    Customer agency means any department, agency, or independent 
establishment in the Federal Government, including any wholly-owned 
corporation; any executive agency or any establishment in the 
legislative or judicial branch of the Government (except the Senate, 
the House of Representatives, and the Architect of the Capitol, and any 
activities under his direction).
    Emergency relocation is a customer move that results from an 
extraordinary event such as a fire, natural disaster, or immediate 
threat to the health and safety of occupants that renders a current 
space assignment unusable and requires that it be vacated, permanently 
or temporarily.
    Federal Buildings Fund means the fund into which Rent charges and 
other revenues are deposited, and collections cited in section 210(j) 
of the Federal Property and Administrative Services Act of 1949, as 
amended (U.S.C. 490(j)), and from which monies are available for 
expenditures for real property management and related activities in 
such amounts as are specified in annual appropriations acts without 
regard to fiscal year limitations.
    Federally controlled space means workspace for which the United 
States Government has a right of occupancy by ownership, by lease, or 
by any other means, such as by contract, barter, license, easement, 
permit, requisition, or condemnation. Such workspace excludes space 
owned or leased by private sector entities performing work on 
Government contracts.
    Federally owned space means space, the title to which is vested in 
the United States Government or which will vest automatically according 
to an existing agreement.
    Forced move means the involuntary physical relocation, from one 
space assignment to another, of a customer agency housed in GSA-
controlled space initiated by another customer agency or by GSA, before 
the expiration of a lease or an OA term. (See also the definition of 
GSA-initiated move.)
    General use space means all types of space other than 
``warehouse,'' ``parking,'' or ``unique'' space, as defined elsewhere 
in this part. Examples of general use space are:
    (1) Office and office-related space such as file areas, libraries, 
meeting rooms, computer rooms, mail rooms, training and conference, 
automated data processing operations, courtrooms, and judicial 
chambers; and
    (2) Storage space that contains different quality and finishes from 
general use space, but that is within a building where predominantly 
general use space is located.
    GSA-controlled space means Federally controlled space under the 
custody or control of GSA. It includes space for which GSA has 
delegated operational, maintenance, or protection authority to the 
customer agency.
    GSA-delegated space (or GSA delegated building) means GSA-
controlled space for which GSA has delegated operational, maintenance 
or protection authority to the customer agency.
    GSA-initiated move means any relocation action in GSA-controlled 
space that:
    (1) Is involuntary to the customer agency and required to be 
effective prior to the expiration of an effective OA, or in the case of 
leased space, prior to the expiration of the lease; or
    (2) Is an emergency relocation initiated by GSA.
    Initial space alteration (ISA). See definition of ``tenant 
improvement.''
    Initial space layout means the specific placement of workstations, 
furniture and equipment within new space assignments.
    Inventory means a summary or itemized list of the real property, 
and associated descriptive information, that is under the control of a 
Federal agency.
    Joint-use space means common space within a Federally controlled 
facility, not specifically assigned to any one agency, and available 
for use by multiple agencies, such as cafeterias, auditoriums, 
conference rooms, credit unions, visitor parking spaces, snack bars, 
certain wellness/physical fitness facilities, and child care centers.
    Leased space means space for which the United States Government has 
a right of use and occupancy by virtue of having acquired a leasehold 
interest.
    Non-cancelable space means space that, due to its layout, design, 
location,

[[Page 23172]]

or other characteristics, is unlikely to be needed by another GSA 
customer agency. Typical conditions that might cause space to be 
defined as non-cancelable are:
    (1) Special space construction features;
    (2) Lack of any realistic Federal need for the space other than by 
the requesting agency; and
    (3) Remote location or unusual term (short or long) desired by the 
agency.
    Occupancy Agreement (OA) means a written agreement descriptive of 
the financial terms and conditions under which GSA assigns, and a 
customer agency occupies, the GSA-controlled space identified therein.
    Parking or parking space means surface land, structures, or areas 
within structures designed and designated for the purpose of parking 
vehicles.
    Personnel means the peak number of persons to be housed during a 
single shift, regardless of how many workstations are provided for 
them. In addition to permanent employees of the agency, personnel 
includes temporaries, part-time, seasonal, and contractual employees, 
budgeted vacancies, and employees of other agencies and organizations 
who are housed in a space assignment.
    Portfolio leases mean long term or ``master'' leases, usually 
negotiated to house several agencies whose individual term requirements 
differ from the terms of the underlying GSA lease with the lessor, and 
from each other. These may also be leases housing single agencies, but 
which entail for GSA responsibilities (burdens and benefits) which 
mimic an ownership position, or equity rights, even though no equity 
interest or ownership liability exists. An example of the latter would 
be long term renewal options on a lease which, in order to enjoy, 
involve substantial capital outlays by GSA to improve the building 
infrastructure. In both these cases, GSA is assuming risks or capital 
expenditures outside of the conventions of single transactions or 
occupancies. Accordingly, for a portfolio lease, it is not appropriate 
merely to pass through to the customer agency(ies) the rental rate of 
the underlying GSA lease. Portfolio leases are treated for pricing 
purposes as owned space, with Rent set by appraisal.
    Predominant use means the use to which the greatest portion of a 
location is put. Predominant use is determined by the Public Buildings 
Service (PBS), GSA, and will typically result in the designation of a 
location as one of four types of space--General Use, Warehouse, Unique, 
or Parking--even though some smaller portions of the space may be used 
for one or more of the other types of uses.
    Rent means the amounts charged by GSA for space and related 
services to the customer agencies with tenancy in GSA-controlled space. 
The word ``Rent'' is capitalized to differentiate it from the contract 
``rent'' that GSA pays lessors.
    Rentable square footage means the amount of space as defined in 
``Building Owners and Managers Association (BOMA)/American National 
Standards Institute (ANSI) Standard Z65.1-1996.'' The BOMA/ANSI 
standard also defines ``gross,'' ``office area,'' ``floor common,'' and 
``building common'' areas. Any references to these terms in this part 
refer to the BOMA/ANSI standard definitions. This standard has been 
adopted in accordance with GSA's interest in conforming its practices 
to nationally recognized industry standards to the extent possible.


    Note to the Definition of Rentable Square Footage: Rentable 
square footage generally includes square footage of areas occupied 
by customers plus a prorated share of floor common areas such as 
elevator lobbies, building corridors, public restrooms, utility 
closets, and machine rooms. Rentable square footage also includes a 
prorated share of building common areas located throughout the 
building. Examples of building common space include ground floor 
entrance lobby, enclosed atrium, loading dock, and mail room.


    Request for space or space request means a written or 
electronically submitted document or an oral request, within which an 
agency's space needs are summarized. A request for space is requisite 
for development of an OA. Thus, it must be submitted to GSA by a duly 
authorized official of the customer agency, and it must be accompanied 
by documentation of the customer agency's ability to fund payment of 
required Rent charges.
    Return on Investment (ROI) pricing is one possible methodology used 
to establish a Rent rate for certain owned space. Typically, ROI 
pricing is a Rent rate that ensures GSA a reasonable return on its cost 
to acquire and improve the asset. ROI pricing may be used where no 
other comparable commercial space is available or no other appraisal 
method would be appropriate. It may also be used in cases in which an 
appraisal-based rental rate will not meet GSA's minimum return 
requirements for the planned level of investment.
    Security fees mean Rent charges for building services provided by 
GSA's Federal Protective Service. Security fees are comprised of basic 
and building specific charges.
    (a) A basic security fee is assessed in all PBS-controlled 
properties where the Federal Protective Service (FPS) provides security 
services. The rate is set annually on a per-square-foot basis. The 
charge includes the following services:
    (1) General law enforcement on PBS-controlled property;
    (2) Physical security assessments;
    (3) Crime prevention and awareness training;
    (4) Advice and assistance to building security committees;
    (5) Intelligence sharing program;
    (6) Criminal investigation;
    (7) Assistance and coordination in Occupancy Emergency Plan 
development;
    (8) Coordination of mobilization and response to terrorist threat 
or civil disturbance;
    (9) Program administration for security guard contracts; and
    (10) Megacenter operations for monitoring building perimeter alarms 
and dispatching appropriate law enforcement response.
    (b) The building specific security charge is comprised of two 
elements: Operating expenses and amortized capital costs. Building 
specific charges, whether operating expenses or capital costs, are 
distributed overall federal users by building or facility in direct 
proportion to each customer agency's percentage of federal occupancy. 
As with joint use charges, the distribution of building-specific 
charges among customer agencies is not re-adjusted for vacancy.
    Space means a defined area within a building and/or parcel of land. 
(Personal property and furniture are not included.)
    Space allocation standard (SAS) means a standard agreed upon by GSA 
and a customer agency, written in terms that permit nationwide or 
regional application, that is used as a basis for establishing that 
agency's space requirements. An SAS may describe special GSA and 
customer agency funding responsibilities, although such 
responsibilities will be covered in OAs for space assignments. An SAS 
may also be developed between GSA and customer agencies on a regional 
level to standardize or simplify transactions, provided that the terms 
of a regional SAS are consistent with the terms of that agency's 
national SAS and the terms of this part.
    Space assignment or assignments means a transaction between GSA and 
a customer agency that results in a customer agency's right to occupy 
certain GSA-controlled space, usually in return for customer agency 
payment(s)

[[Page 23173]]

to GSA for use of the space. Space assignment rights, obligations, and 
responsibilities not covered in this part, or in the customer guides, 
are formalized in an OA.
    Space planning means the process of using recognized professional 
techniques of planning, layout and interior design to determine the 
best internal location and the most efficient configuration for 
satisfying agency space needs.
    Space program of requirements means a summary statement of an 
agency's space needs. These requirements will generally include 
information about location, square footage, construction requirements, 
and duration of the agency's space need. They may be identified in any 
format mutually agreeable to GSA and the agency.
    Special space means space which has unusual architectural/
construction features, requires the installation of special equipment, 
or requires disproportionately high or low costs to construct, maintain 
and/or operate as compared to office or storage space. Special space 
generally refers to space which has construction features, finishes, 
services, utilities, or other additional costs beyond those specified 
in the customer general allowance (e.g., courtrooms, laboratories).
    Standard level of service. See Sec. 102-85.165 for the definition 
of standard level of service.
    Telecommunications means electronic processing of information, 
either voice or data or both, over a wide variety of media, (e.g., 
copper wire, microwave, fiber optics, radio frequencies), between 
individuals or offices within a building (e.g., local area networks), 
between buildings, and between cities.
    Tenant improvement (TI) means a finished component of an interior 
block of space. Tenant improvements represent additions to or 
alterations of the building shell that adapt the workspace to the 
specific uses of the customer. If made at initial occupancy, the TIs 
are known as initial space alterations or ISAs.
    Tenant improvement (TI) allowance means the dollar amount, 
including design, labor, materials, contractor costs (if contractors 
are used), management, and inspection, that GSA will spend to 
construct, alter, and finish space for customer occupancy (excluding 
personal property and furniture, which are customer agency 
responsibilities) at initial occupancy. The dollar amounts for the 
allowances are different for each agency and bureau to accommodate 
agencies' different mission needs. The dollar amounts also may vary by 
locations reflecting different costs in different markets. The PBS bill 
will only reflect the actual amount the customers spend, not the 
allowance. The amount of the TI allowance is determined by GSA. 
Agencies can request that GSA revise the TI allowance amount by project 
or categorically for an entire bureau. The cost of replacement of 
tenant improvements is borne by the customer agency.
    Unique space means space for which there is no commercial market 
comparable (e.g., border stations).
    Warehouse or warehouse space means space contained in a structure 
primarily intended for the housing of files, records, equipment, or 
other personal property, and is not primarily intended for housing 
personnel and office operations. Warehouse space generally is designed 
and constructed to lower specifications than office buildings, with 
features such as exposed ceilings, unfinished perimeter and few 
dividing partitions. Warehouse space also is usually heated to a lesser 
degree but not air-conditioned, and is cleaned to lesser standards than 
office space.
    Workspace means Federally controlled space in buildings and 
structures (permanent, semi-permanent, or temporary) that provides an 
acceptable environment for the performance of agency mission 
requirements by employees or by other persons occupying it.


Sec. 102-85.40  What are the major components of the pricing policy?

    The major components of the pricing policy are:
    (a) An OA between a customer agency and GSA;
    (b) Tenant improvement allowance; and
    (c) The establishment of Rent the agency pays to GSA based on the 
OA for:
    (1) Leased space, a pass-through to the customer agency of the 
underlying GSA lease contract costs, and a PBS fee; or
    (2) GSA-owned space, Rent determined by appraisal.

Subpart B--Occupancy Agreement


Sec. 102-85.45  When is an Occupancy Agreement required?

    An Occupancy Agreement (OA) is required for each customer agency's 
space assignment. The OA must be agreed to by GSA and the customer 
agency prior to GSA's commitment of funds for occupancy and formal 
assignment of space.


Sec. 102-85.50  When does availability of funding have to be certified?

    The customer agency must sign an OA prior to GSA's making any major 
contractual commitments associated with the space request. Typically, 
this should occur at the earliest possible opportunity-i.e., when funds 
become available. However, in no event shall certification occur later 
than just prior to the award of the contract to a design architect in 
the case of Federal construction or renovation in Federally owned space 
or prior to the award of a lease. This serves as a customer agency's 
funding commitment unless certification is provided on another 
document.


Sec. 102-85.55  What are the terms and conditions included in an OA?

    The terms and conditions are modeled after commercial practice. 
They are intended to reflect a full mutual understanding of the 
financial terms and agreement of the parties. The OA describes the 
actual space and services to be provided and all associated actual 
costs to the customer during the term of occupancy. The OA does not 
include any general provisions or terms contained in this part. OAs 
typically describe the following, depending on whether the space is 
leased or Federally owned:
    (a) Assigned square footage;
    (b) Shell Rent and term of occupancy;
    (c) Amortized amount of customer allowance used;
    (d) Operating costs and escalations;
    (e) One time charges; e.g., lump sum payments by the customer;
    (f) Real estate tax and escalations;
    (g) Parking and escalations;
    (h) Additional/reduced services;
    (i) Security services and associated Rent;
    (j) Joint use space and associated Rent;
    (k) PBS fee;
    (l) Customer rights and provisions for occupancy after OA 
expiration;
    (m) Cancellation provisions if different from this part or the 
customer service guides;
    (n) Any special circumstances associated with the occupancy, such 
as environmental responsibilities, unusual use restrictions, or 
agreements with local authorities;
    (o) Emergency relocations;
    (p) Clauses specific to the agreement;
    (q) Other Rent, e.g., charges for antenna sites, land;
    (r) Agency standard clauses; and
    (s) General clauses defining the obligations of both parties.

[[Page 23174]]

Sec. 102-85.60  Who can execute an OA?

    Authorized GSA and customer agency officials who can commit or 
obligate the funds of their respective agencies can execute an OA. 
Higher level signatories may be appropriate from both agencies for 
space assignments in owned or leased space, that are unusual in size, 
location, duration, public interest, or other factors. Each agency 
decides its appropriate signatory level.


Sec. 102-85.65  How does an OA obligate the customer agency?

    An OA obligates the executing customer agency to fund the current-
year Rent obligation owed GSA, as well as to reimburse GSA for any 
other bona fide obligations that GSA may have incurred on behalf of the 
customer agency. Although the OA is an interagency agreement, 
memorializing the understanding of GSA and its customer agency, the OA 
may not be construed as obligating future year customer agency funds 
until they are legally available. A multi-year OA commitment assumes 
the customer agency will seek the necessary funding through budget and 
appropriations processes.


Sec. 102-85.70  Are the standard OA terms appropriate for non-
cancelable space?

    Yes, most of the standard terms apply; however, the right to cancel 
upon a 4-month (120 day) notice is not available. See Sec. 102-85.35 
for the definition of non-cancelable space.


Sec. 102-85.75  When can space assignments be terminated?

    (a) Customer agencies can terminate any space assignments, except 
those designated as non-cancelable, with the following stipulations:
    (1) The agency must give GSA written notice at least four months 
prior to termination.
    (2) The agency is responsible for reimbursing GSA for the unpaid 
balance of the cost of tenant improvements, generally prior to GSA 
releasing the agency from the space assignment. In the event the 
customer agency received a rent concession (e.g., free rent) at the 
inception of the assignment as part of the consideration for the entire 
lease term, then the amount of the concession applicable to the 
remaining term must be repaid to GSA.
    (3) If the space to be vacated is ready for occupancy by another 
customer and marketable, GSA accepts the termination of assignment.
    (4) If the agency has vacated all of the space and removed all 
personal property and equipment from the space by the cancellation date 
in the written notice, the agency will be released effective that date 
from further Rent payments.
    (5) An agency may terminate a GSA space assignment with less than a 
four-month advance written notice to GSA, if:
    (i) Either GSA or the terminating agency has identified another 
agency customer for the assigned space and that substitute agency wants 
and is able to fully assume the Rent payments due from the terminating 
agency; and
    (ii) The terminating agency continues to pay Rent until the new 
agency starts paying Rent.
    (b) GSA can terminate space assignments according to GSA 
regulations for emergency or forced moves.
    (c) OAs terminate automatically at expiration.


Sec. 102-85.80  Who is financially responsible for expenses resulting 
from tenant non-performance?

    The customer agencies are financially responsible for expenses 
incurred by the Government as a result of any failure on their part to 
fulfill a commitment outlined in an OA or other written agreements in 
advance of, or in addition to, the OA. Customer agencies are also 
financially responsible for revised design costs and any additional 
costs resulting from changes to space requirements or space layouts 
made by the agency after a lease, alteration, design, or construction 
contract has been awarded by GSA.


Sec. 102-85.85  What if a customer agency participates in a 
consolidation?

    If an agency agrees to participate in a consolidation upon 
expiration of an OA, the relocation expenses will be addressed in the 
new OA negotiated by GSA and the customer agency. The customer agency 
generally pays such costs.

Subpart C--Tenant Improvement Allowance


Sec. 102-85.90  What is a tenant improvement allowance?

    A tenant improvement (TI) allowance enables the customer agency to 
design, configure and build out space to support its program 
operations. It is based on local market construction costs and the 
specific bureau's historical use of space. (See also the definition at 
Sec. 102-85.35.)


Sec. 102-85.95  Who pays for the TI allowance?

    The customer agency pays for the amount of the tenant improvement 
allowance actually used.


Sec. 102-85.100  How does a customer agency pay for tenant 
improvements?

    To pay for the installation of tenant improvements, the customer 
agency may spend an amount not to exceed the tenant allowance. The 
amount spent by the customer agency for TIs is amortized over a period 
of time specified in the OA, not to exceed the useful life of the 
improvements. This amortization payment is in addition to the shell 
rent and services.


Sec. 102-85.105  How does an agency pay for customer alterations that 
exceed the TI allowance?

    Amounts exceeding the TI allowance are paid in a one-time lump sum 
and are not amortized over the term of the occupancy. The agency 
certifies lump sum funds are available prior to GSA proceeding with the 
work.


Sec. 102-85.110  Can the allowance amount be changed?

    The GSA schedule of allowances for new assignments is adjusted 
annually for design and construction cost changes. As the need arises, 
GSA may adjust an agency or bureau's TI allowance. GSA may also adjust 
a TI allowance for a specific project, if conditions warrant. This 
decision is solely GSA's. In addition, the customer agency may waive 
any part or all of its customization allowance in the case of a new 
space assignment. In the case of backfill space (also known as relet 
space), the customer agency can also waive any part or all of the 
tenant general allowance, if the customer agency will use the existing 
tenant improvements, with or without modifications.

Subpart D--Rent Charges


Sec. 102-85.115  How is the Rent determined?

    Unless an exemption is granted under the authority of the 
Administrator of General Services, the Rent charged approximates 
commercial charges for comparable space and space-related services as 
follows:
    (a) Generally, Rent for Federally owned space provided by GSA is 
based on market appraisals of fully serviced rental values for the 
predominant use to which space in a building is put; e.g., general use, 
warehouse use, and parking use. In cases where market appraisals are 
not practical; e.g., in cases involving unique space or when market 
comparables are not available, GSA may establish Rent on the basis of 
alternate commercial practices. See the discussion of alternate 
valuation methods in Sec. 102-85.125. Amortization of tenant 
improvements, parking fees, and security charges are calculated

[[Page 23175]]

separately and added to the appraised shell Rent to establish the Rent 
charge. Customer agencies also pay for a pro rata share of joint use 
space.
    (b) Generally, Rent for space leased by GSA is based on the actual 
cost of the lease, including the costs (if any) of services not 
provided by the lessor, plus a GSA fee, and security charges and 
parking (if not in the lease).
    (1) The Rent is based on the terms and conditions of the OA, 
starting with the shell Rent.
    (2) In addition to the shell Rent, the Rent includes amortization 
of TI allowances used, real estate taxes, operating costs, extra 
services, parking, GSA fee for its services, and charges for security, 
joint-use, and other applicable rental charges (e.g., antenna site, 
land, wareyard).


Sec. 102-85.120  What is shell Rent?

    Shell Rent is that portion of GSA Rent charged for the building 
envelope and land. (See Sec. 102-85.35 for the definition of building 
shell.)


Sec. 102-85.125  What alternate methods may be used to establish Rent 
in Federally-owned space?

    Alternate methods of establishing Rent are based on private sector 
models. They include, but are not limited to:
    (a) Return on investment (ROI) approach or a similar cost recovery 
method used when market comparables are not available and/or GSA must 
``build to suit'' to fulfill customer agency requirements; e.g., border 
stations; and
    (b) Rent schedules for the right to use rooftops and other floor 
areas not suitable for workspace; e.g., antenna sites and signage.


Sec. 102-85.130  How are exemptions from Rent granted?

    Exemptions from Rent are rare. However, the Administrator of 
General Services may exempt any GSA customer from Rent after a 
determination that application of Rent would not be feasible or 
practical. Customer agency requests for exemptions must be addressed to 
the Administrator of General Services and submitted in accordance with 
GSA Order PBS 4210.1, ``Rent Exemption Procedures,'' dated December 20, 
1991, or in accordance with any superseding GSA order. A copy of the 
order may be obtained from the Office of Portfolio Management, General 
Services Administration, 1800 F Street, NW., Washington, DC 20405.


Sec. 102-85.135  What if space and services are provided by other 
executive agencies?

    Any executive agency other than GSA providing space and services is 
authorized to charge the occupant for the space and services at rates 
approved by the Administrator of General Services and the Director of 
the Office of Management and Budget. If space and services are of the 
type provided by the Administrator of General Services, the executive 
agency providing the space and services must credit the monies derived 
from any fees or charges to the appropriation or fund initially charged 
for providing the space or services, as prescribed by Subsection 210(k) 
of the Federal Property and Administrative Services Act of 1949, as 
amended (40 U.S.C. 490(k)).


Sec. 102-85.140  How are changes in Rent reflected in OAs?

    (a) If Rent changes in ways that are identified in the OA, then no 
change to the OA is required. Typically, OAs state that certain 
components of Rent are subject to annual escalation; e.g., operating 
expenses, real estate taxes, parking charges, the basic security 
charge, and building-specific security operating and amortized capital 
expenses which do not entail a change in service level. Also, in 
Federally-owned space, OAs state that the shell rent is re-marked to 
market every five years. In leased space, the OA will identify any 
programmed changes in the lease contract rent (such as pre-set 
increases or steps in the contract rent rate) that will translate into 
a change in the customer agency's Rent. Changes in Rent specified in 
OAs will serve as notice to agencies of future Rent changes for 
budgeting purposes. For a discussion of budgeting for Rent, see 
Sec. 102-85.160.
    (b) Changes to Rent other than those identified in paragraph (a) of 
this section typically require an amended OA. There are many events 
that might occasion a change in Rent, and an amended OA, such as:
    (1) An agency expands or contracts at an existing location;
    (2) PBS agrees to fund additional tenant improvements that are then 
amortized over the remaining OA term, or over an extended OA term;
    (3) Upon physical re-measurement, the true square footage of the 
space assignment is found to be different from the square footage of 
record;
    (4) The amount of joint use space in the building changes;
    (5) The level of building-specific security services changes; or
    (6) PBS undertakes new capital expenditures for new or enhanced 
security countermeasures.


Sec. 102-85.145  When are customer agencies responsible for Rent 
charges?

    (a) When a customer agency occupies cancelable space, it is 
responsible for Rent charges until:
    (1) The date of release specified in the OA, or until the date 
space is actually vacated, whichever occurs later; or
    (2) Four months after having provided GSA written notice of 
release; or
    (3) The date space is actually vacated, whenever occupancy extends 
beyond the date agreed upon under either paragraph (a)(1) or (2) of 
this section.
    (b) When a customer agency releases non-cancelable space, it is 
responsible for all attributable Rent and other space charges until the 
OA expires. This responsibility is mitigated to the extent that GSA is 
able to assign the space to another user or dispose of it. (See 
Sec. 102-85.65 How does an OA obligate the customer agency?)
    (c) When a customer agency commits to occupy space in an OA or 
other binding document, but never occupies that space, that agency is 
responsible for:
    (1) Non-cancelable space: Rent payments due for the space until the 
OA expires, unless GSA can mitigate; or
    (2) All other space: Either GSA's space charges for 4 months plus 
the cost of tenant improvements or GSA's actual costs, whichever is 
less.


Sec. 102-85.150  How will Rent charges be reflected on the customer 
agency's Rent bill?

    Rent charges are billed monthly, in arrears, based on an annual 
rate which is divided by 12. Billing commences the first month in which 
the agency occupies the space for more than half of the month, and ends 
in the last month the agency occupies the space.


Sec. 102-85.155  What does a customer agency do if it does not agree 
with a Rent bill?

    (a) If a customer agency does not agree with the way GSA has 
determined its Rent obligation (e.g., the agency does not agree with 
GSA's space classification, appraised Rent, or the allocation of 
space), the agency may appeal its Rent bill to GSA.
    (b) GSA will not increase or otherwise change Rent for any 
assignment, except as agreed in an OA, in the case of errors, or when 
the OA is amended. However, customer agencies may at any time request a 
regional review of the measurement, classification, service levels 
provided, or charges assessed that pertain to the space assignment 
without resorting to formal procedures. Such requests do not constitute 
appeals and should be directed to the appropriate GSA Regional 
Administrator.

[[Page 23176]]

    (c) If a customer agency still wants to pursue a formal appeal of 
Rent charges, they may do so, but with the following limitations:
    (1) Terms, including rates, to which the parties agree in an OA are 
not appealable;
    (2) In leased space, the contract rent passed through from the 
underlying lease cannot be appealed;
    (3) In GSA-owned space, when the fully-serviced shell Rent is 
established through appraisal, the appraised rate must exceed 
comparable commercial square foot rates by 20 percent. When shell Rent 
in owned space is established on the basis of ROI at the inception of 
an OA, and the customer agency executes the OA, then the ROI rate 
cannot later be appealed. Other components of Rent that are established 
on the basis of actual cost--eg., amortization of TIs and building 
specific security charges--also cannot be appealed.
    (4) Additionally, the customer agency is required to compare its 
assigned space with other space in the surrounding community that:
    (i) Is available in similar size block of space in a comparable 
location;
    (ii) Is comparable in quality to the space provided by GSA;
    (iii) Provides similar service levels as part of the charges;
    (iv) Contains similar contractual terms, conditions, and 
escalations clauses; and
    (v) Represents a lease transaction completed at a similar point in 
time.
    (5) Data from at least three comparable locations will be necessary 
to demonstrate a market trend sufficient to warrant revising an 
appraised Rent charge.
    (d) A customer agency filing an appeal for a particular location or 
building must develop documentation supporting the appeal and file the 
appeal with the appropriate Regional Administrator. The GSA regional 
office will verify all pertinent information and documentation 
supporting the appeal. The GSA Regional Administrator will accept or 
deny the appeal and will notify the appealing agency of his or her 
ruling.
    (e) A further appeal may be filed by the customer agency's 
headquarters level officials with the Commissioner, Public Buildings 
Service, if equitable resolution has not been obtained from the initial 
appeal. A head of a customer agency may further appeal to the 
Administrator of the General Services. Documentation of the procedures 
followed for prior resolution must accompany an appeal to the 
Administrator. Decisions made by the Administrator are final.
    (f) Adjustments of Rent resulting from reviews and appeals will be 
effective in the month that the agency submitted a properly documented 
appeal. Adjustments in Rent made under this section remain in effect 
for the remainder of the 5-year period in which the charges cited in 
the OA were applicable.


Sec. 102-85.160  How does a customer agency know how much to budget for 
Rent?

    GSA normally provides customer agencies an estimate of Rent 
increases approximately 2 months prior to the agencies' Office of 
Management and Budget (OMB) submission for the fiscal year in which GSA 
will charge Rent. This gives the affected customer agencies an 
opportunity to budget for an increase or decrease. However, GSA must 
obtain the concurrence of OMB for such changes prior to notifying 
customer agencies. In the event GSA is unable to provide timely notice 
of a future Rent increase, customer agencies are nonetheless obligated 
to pay the increased Rent amount. For existing assignments in owned 
buildings, GSA charges for fully serviced shell Rent, in aggregate, 
shall not exceed the bureau level budget estimates provided to the 
customer agencies annually. This provision does not apply to:
    (a) New assignments;
    (b) Changes in current assignments;
    (c) Leased space;
    (d) New tenant improvement amortization;
    (e) Building specific security costs; and
    (f) New amortization of capital expenditures under ROI pricing due 
to changes in scope of proposed projects or repair and/or replacement 
of building components

Subpart E--Standard Levels of Service


Sec. 102-85.165  What are standard levels of service?

    (a) The standard levels of service covered by GSA Rent are 
comparable to those furnished in commercial practice. They are based on 
the effort required to service the customer agency's space for a 5-day 
week (Monday to Friday), one-shift regular work schedule. GSA will 
provide adequate building startup services, before the beginning of the 
customer's regular one-shift work schedule, and shutdown services after 
the end of this schedule.
    (b) Without additional charge, GSA customers may use their assigned 
space and supporting automatic elevator systems, lights and small 
office and business machines including personal computers on an 
incidental basis, unless specified otherwise in the OA.


Sec. 102-85.170  Can flexitime and other alternative work schedules 
cost the customer agency more?

    Yes, GSA customers who extend their regular work schedule by a 
system of flexible hours shall reimburse GSA for its approximate cost 
of the additional services required.


Sec. 102-85.175  Are the standard level services for cleaning, 
mechanical operation, and maintenance identified in an OA?

    Unless specified otherwise in the OA, standard level services for 
cleaning, mechanical operation, and maintenance shall be provided in 
accordance with the GSA standard level of services as defined in 
Sec. 102-85.165, and in the PBS Customer Guide to Real Property. A copy 
of the guide may be obtained from the General Services Administration, 
Office of Business Performance (PX), 1800 F Street, NW., Washington, DC 
20405.


Sec. 102-85.180  Can there be other standard services?

    GSA may provide additional services to its customers at the levels 
and times deemed by the Administrator of General Services to be 
necessary for efficient operations and proper servicing of space under 
the assignment responsibility of GSA.


Sec. 102-85.185  Can space be exempted from the standard levels of 
service

    Yes, customer agencies may be excused from paying for standard 
service levels for space assignments when:
    (a) In GSA-delegated space, the customer agency provides for these 
services itself and thus pays Rent minus charges for these services; or
    (b) In rare instances, standard service levels may be waived by the 
Administrator of General Services in instances where charging for such 
standard services would not be feasible or practical, e.g., in 
assignments of limited square footage or functional use.


Sec. 102-85.190  Can GSA Rent be adjusted when standard levels of 
service are performed by other customer agencies?

    Customer agencies that arrange and pay separately for the costs of 
standard level services normally covered by GSA Rent will receive a 
Rent credit or other type of reimbursement by GSA for the amount GSA 
would have charged for such services. The type of reimbursement is at 
GSA's discretion. The reimbursement is limited to the amount included 
for the services in

[[Page 23177]]

GSA Rent. Approval to perform or contract for such services must be 
obtained in advance by the customer agency from the appropriate GSA 
regional office.

Subpart F--Special Services


Sec. 102-85.195  Does GSA provide special services?

    Yes, GSA provides special services on a cost-reimbursable basis:
    (a) In GSA-controlled space, GSA may provide for special services 
that cannot be separated from the building or space costs (inseparable 
services, such as utilities, which are not individually metered). GSA's 
estimate of the special service cost is the basis for the bill amount. 
The bill amount for separable special services is either based on a 
previously agreed upon fixed price or the actual cost, including a fee 
for GSA's services.
    (b) GSA can also provide special services to other Federal agencies 
in agency-controlled and operated space on a cost-reimbursable basis.

Subpart G--Continued Occupancy, Relocation and Forced Moves


Sec. 102-85.200  Can customer agencies continue occupancy of space or 
must they relocate at the end of an OA?

    The answer is contingent upon whether the customer agency is in 
Federally owned or leased space.
    (a) Unless stated otherwise in the OA, a customer agency within a 
GSA controlled, Federally owned building has automatic occupancy rights 
at the end of the OA term for occupied space. However, a new OA must be 
negotiated.
    (b) In leased space, the OA generally reflects the provisions of 
the underlying lease and will specify whether or not renewal options 
are available. If the OA does not include a renewal option, customer 
agencies should assume relocation would be necessary upon OA 
expiration, and budget for it. Further, renewal options are not, in 
themselves, a guarantee of continued occupancy at that location. In 
some cases, the renewal rate is substantially above market or the 
option was not part of the initial price evaluation for the occupancy. 
In such cases, GSA may be required to run a competition for the 
replacement lease, and a relocation may ensue. Nonetheless, it is also 
possible that GSA may execute a succeeding lease with the incumbent 
lessor, in which case there is no move.
    (c) GSA and customer agencies should initiate discussions at least 
18-20 months in advance of OA expiration to address an action for the 
replacement or continued occupancy of the existing space assignment. 
This allows both agencies time to budget for the work and the cost.


Sec. 102-85.205  What happens if a customer agency continues occupancy 
after the expiration of an OA?

    A mutual goal of GSA and its customers is to have current OAs in 
place for all space assignments. However, provisions are necessary to 
cover the GSA and customer relationship if an OA expires prior to 
execution of a mutually desired succeeding agreement. Because the 
risks, liabilities, and consequences of a customer's continued 
occupancy depend on whether the assigned space is leased or Federally 
owned, different provisions in the following table apply:

   Holdover Tenancy--Customer Agency Responsibilities in the Event of
                     Tenant Delay in Vacating Space
------------------------------------------------------------------------
              In leased space                 In federally owned space
------------------------------------------------------------------------
To pay those costs associated with lease    To pay Rent as determined by
 contract, GSA fee, and damages/claims,      GSA's pricing policy, as
 arising from changes in GSA contract        described in this part, and
 costs which are caused by the tenant's      those added costs to GSA
 delay.                                      (claims, damages, changes,
                                             etc.) resulting from the
                                             tenant-caused delay.
------------------------------------------------------------------------

Sec. 102-85.210  What if a customer agency has to relocate?

    If the agency or GSA determines relocation is necessary at the 
expiration of an OA for either Federally owned or leased space, the 
customer agency is responsible for all costs associated with relocation 
at that time.


Sec. 102-85.215  What if another customer agency forces a GSA customer 
to move?

    If a GSA customer agency, or GSA, forces the relocation of another 
GSA customer agency prior to the expiration of the customer's OA, the 
``forcing'' agency is responsible:
    (a) For all reasonable costs associated with the relocation of the 
agency being ``forced'' to move, including architectural-engineering 
design, move coordination and physical relocation, telecommunications 
and ADP equipment relocation and installation;
    (b) To GSA for all of the relocated agency's unpaid tenant 
improvements, if any; and
    (c) To the customer agency for the undepreciated amount of any lump 
sum payment that was already made by the agency for alterations.


Sec. 102-85.220  Can a customer agency forced to relocate waive the 
reimbursements?

    Yes, a customer agency forced to relocate can waive some or all of 
the reimbursements from the forcing agency that are prescribed in 
Sec. 102-85.215. However, a relocated customer agency cannot waive the 
requirement for the forcing customer agency to reimburse GSA for unpaid 
tenant improvements. If GSA is the ``forcing'' agency, it is 
responsible for the same costs as any other forcing customer agency.


Sec. 102-85.225  What are the funding responsibilities for relocations 
resulting from emergencies?

    (a) In emergencies, swift remedies, including the possible 
relocation of a customer agency to alternate space, are required. The 
remedies may include requests for funding authorizations from OMB and 
Congress. GSA may serve as the central coordinator of such remedies.
    (b) Funding responsibility will vary by situation. If a customer 
agency is only temporarily displaced from its space, GSA typically 
covers the cost of temporary set-up in a provisional location. If the 
agency is obliged to relocate permanently, an OA will be prepared which 
will address all terms of the occupancy. In such cases, new tenant 
improvements will be constructed which can be amortized over the life 
of a new occupancy term, and a new Rent rate will be developed.

    Dated: April 27, 2001.
Thurman M. Davis, Sr.,
Acting Administrator of General Services.
[FR Doc. 01-11390 Filed 5-7-01; 8:45 am]
BILLING CODE 6820-24-P


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