National Broker Contract, Round 3

The General Services Administration (GSA) has issued its RFP for the third generation of its broker and leasing support services contract – formerly the National Broker Contract (NBC), now named GSA Leasing Support Services (GLS). The new GLS contract provides broker and leasing services (i.e. market surveys, site visits, document preparation, and negotiation) for GSA’s contracting officers across all 11 GSA regions. Proposals were due in May and contracts are expected to be awarded to multiple brokers later this year.

Many owners of GSA-leased property are somewhat familiar with the current NBC contract (one year base plus four annual renewal options) which is the second iteration awarded in 2010. They may have worked with a specific broker assigned by GSA to their leasing action in the region where their property is located. There are four brokerage firms currently participating in the NBC program. However, if you’re a new owner and are not familiar with NBC, it may be helpful to understand how the program works and what services are performed by brokers.

How has NBC performed over the last nine years? According to GSA, the program has yielded the following results to date.

GSA NATIONAL BROKER CONTRACT – BY THE NUMBERS
(Source: GSA)

  • 30% – Average broker utilization rate for leased space
  • 3,056 leases totaling 94.1 million square feet
  • $18 billion – Total contract value of leases awarded
  • $214.9 million – Total commission credits passed on to tenant agencies
  • 511 leases totaling 19.7 million SF currently in the pipeline
  • $6 billion – Total contract value of current lease pipeline
  • $74 million in anticipated commission credits

GSA’s current lease portfolio contains over 8,400 leases, with an annual rent outlay of $5.6 billion. At a time when GSA’s budget is under constant scrutiny and the ongoing focus is on downsizing, consolidation and lease reform, the third generation of NBC will garner significant attention. GSA recently stated that the new GLS contract “…is expected to generate approximately $100 million in rent credits to tenant agencies and substantially reduce lease cycle times by eliminating workload redundancy.” Based on industry feedback, the GSA has focused on revising certain components of the new contract including: strategic planning services, commission agreements, small business and training to improve efficiency and flexibility, and conformity to normal broker industry practices. Once the new GLS contract is awarded, it will be interesting to see how performance is measured, and if the changes in the contract meet the objectives and yield the results established by GSA.

Want Capitol Markets articles delivered straight to your inbox?