FAQ

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What is a "no cost" National Broker Contract?

The Government Accountability Office Advisory Ruling allows GSA to enter into contracts with real estate brokers without augmenting its appropriations since the proposed contracts do not contemplate the government receiving funds from the brokers. This contract vehicle is what we are commonly calling the "No Cost" contract. It is where the contractor will negotiate and collect the commissions typically paid in the private sector as payment for contract services with no payments being made directly by the government.

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What is the duration of the contract?

These four contracts were awarded as modified performance-based contracts with a 1 year base period, and they can be extended for a total of five years, subject to annual renewal options. The contracts were awarded on October 4, 2004. The Contractor's were provided Notice to Proceed on April 1, 2005. The base contract year began on April 1, 2005, and ran through March 31, 2006. The Second Renewal Option was exercised for the period April 1, 2006 through March 31, 2007, Third Renewal Option was April 1, 2007 through March 31, 2008, the Fourth Renewal Option is April 1, 2008 through March 31, 2009 and the Fifth and Last Renewal Option year has been exercised for the period April 1, 2009 through March 31, 2010.

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How Will GSA ensure that small businesses have adequate opportunity to compete under the new contract?

Each awarded contract has a Government imposed target set aside goal of 23 percent of the total contract value to be specifically subcontracted with small businesses. Some of the contractors have a self imposed substantially higher target goal. This represents an extraordinary commitment to small business concerns.

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Will customers be charged an additional Broker's fee?

No, the customers will not be charged any additional fee for work accomplished by Brokers. Under this contract, the National Brokers are collecting their fees in commissions from the landlord. In previous contracts, GSA paid the broker fees under traditional services contracts for no commissions. Any commissions were negotiated or rebated back as an offset to the lease. Under the new "no cost" contract, the contractor will have the opportunity collect the commissions they negotiate with the landlord minus a pre-priced percentage of the commissions that will be applied to the customers' shell rent. The customer will benefit directly and immediately from any commission credits. Under an expedited lease action, GSA and the customer will receive no commission offset to rent.

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What plans does GSA have to become better educated about who has the authority to make decisions for the agency?

In coordination with our GSA/PBS Human Capital Strategy, increased emphasis is placed on understanding our customers better. We are integrating our business process into the Transaction Management Playbook to improve our customer interactions. The National Broker Contracts contain the process to facilitate that interaction by the means of project orientation discussions among the GSA Realty Specialist, the Customer, and the Broker. At the project orientation meeting, a communication plan is developed by all parties in order to ensure the communications flow is being conducted in the manner and frequency the agency would like to receive. Communications contacts, as well as approval authority, are to be clearly identified and adhered to by all.

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How does this affect the cost of my lease?

We anticipate better rental rates for our customers from the National contractors due to the fact their future work with GSA is dependent on their performance on each individual project. One of the performance criteria we will monitor is the rental rates they negotiate.

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