Ask a RAM
The Client Enrichment Series, a monthly webinar series that educates GSA clients on current GSA procedures, policies, and value-added services, recently featured an Introduction to PBS Occupancy Agreements webinar. Our Regional Account Managers (RAMs) have highlighted a few questions and answers this webinar generated that we believe you may find valuable.
Q: How is the Occupancy Agreement (OA) different than a lease?
A: A lease is a contract enforceable by law between GSA and a lessor, whereas an OA is a formal interagency agreement between GSA and a tenant agency. An OA is executed for all federally owned and leased space assignments and captures the financial terms and agreements between GSA and the tenant agency. The OA can be used as a budgeting tool since it documents the tenant agency’s current and projected rent. PBS will honor the terms of the OA and expects the tenant agency to do the same.
Q: Can OA clauses be changed or struck?
A: No–clauses in the OA cannot be changed or struck. If you have questions about the OA, please contact your GSA Realty Specialist.
Q: Is a 10 year, 5 year firm term lease considered a noncancelable lease?
A: Leases are not designated as cancelable or noncancelable. The OA is designated as cancelable or noncancelable. The firm term of the lease has no bearing on the determination of whether the OA is cancelable or noncancelable. Noncancelable space is characterized by the low probability of PBS finding a backfill tenant due to specific qualities of space including:
1) Remote or not easily accessible location
2) Lease construction
3) Special purpose use or build out necessitating significant capital outlays to retrofit the space to a more conventional use
4) Unusual term
5) Lack of any realistic federal need for the space, other than the requesting tenant agency
Q: At what point in the process will GSA determine whether or not an OA is noncancelable?
A: PBS reviews each space assignment and uses the criteria in the Pricing Desk Guide, Section 5.2, to designate the space as cancelable or noncancelable. The decision must be made at the beginning of the leasing action. The OA must indicate that the space is noncancelable in the first draft of the OA and at the beginning of the OA term. Once the space designation has been made, it may not be changed during the OA term. For a subsequent OA term, PBS reviews current market conditions and space qualities before determining whether the space maintains its current designation.
Federal agency representatives can visit our Client Enrichment Series page for more information and to register for upcoming webinars. To receive invitations to future webinars, please email firstname.lastname@example.org.
|PBS Regional Account Managers|
|Pat Zuccaemail@example.com||(215) 446-2889|
|Dorothy Grosickfirstname.lastname@example.org||(215) 446-4569|
|Kimberly Hartemail@example.com||(215) 446-4588|
|Peggy Murrfirstname.lastname@example.org||(215) 446-2888|
|Justin Owensemail@example.com||(215) 446-5712|
|Pedro Vierafirstname.lastname@example.org||(215) 446-4534|
|Jessica Giannoneemail@example.com||(215) 446-4599|