Management and Disposition of Leased Space

TABLE OF CONTENTS

OVERVIEW

3.1 What is the purpose of this chapter? This chapter describes the U.S. Fish and Wildlife Service’s (Service) requirements and policies for management and disposition of leased space. It includes information on requesting changes to leased space, capitalization, recordkeeping, and internal controls. 

3.2 What is the scope of this chapter? This chapter applies to all Service employees involved in the management and disposition of leased space. 

3.3 What are the authorities for this chapter? See 370 FW 1 for a list of authorities for all the chapters in Part 370.

MANAGING SPACE

3.4 What is delegation of lease management authority? The Joint Administrative Operations (JAO) Space Leasing Supervisor may request a delegation of lease management authority (also known as a Contracting Officer Representative authority) from the General Services Administration (GSA) for local Service representatives to coordinate directly with the landlord on the day-to-day operations and maintenance of one or more GSA-awarded leases. The use of a delegation of lease management authority is limited to rare situations. See the Space Management Desk Reference Guide for more information. 

3.5 What are standard and above-standard lease services? 

A. Standard (full-service) lease services include most facility management services in the rent, such as utilities, lighting, janitorial, maintenance, trash and snow removal, landscaping, restroom supplies, and the U.S. Department of Homeland Security (DHS) Federal Protective Service (FPS) basic security. A standard lease also includes heating and air conditioning provided during normal business hours, as specified in the lease. GSA generally provides a standard, full-service lease. 

B. Above-standard lease services include heating or air conditioning during non-business hours, special guard services, or additional cleaning services. The programs must request above-standard lease services as needed. 

(1) To obtain above-standard lease services, programs must send a request to the assigned Space Leasing Specialist for processing.

(2) Programs are responsible for paying above-standard lease services costs through a Reimbursable Work Authorization (RWA), Security Work Authorization (SWA), or micro-purchase using the Government purchase card. Micro-purchase thresholds apply (see the JAO Contracting site for information on micro-purchase thresholds). 

C. Direct leases may not be full-service as it depends on negotiations with the lessor. Before receiving above-standard services, the Leasing Contracting Officer (LCO) must modify the lease contract. 

3.6 How are security services handled in space leases? DHS/FPS provides security to GSA-provided space and some Service-owned locations. 

A. Basic security fees are included in a standard lease and cover services such as pre-lease security assessments, general law enforcement, criminal investigations, 24/7 dispatch for alarms and law enforcement response, intelligence sharing, response to civil disturbances and terrorist threats, advising facility security committees, and consulting on Occupancy Emergency Plans (OEP). 

B. Customized protective services are considered an above-standard lease service and result in building-specific security fees (see section 3.5B). These include services such as protective security officers (onsite guards), security patrols, and physical and cyber security countermeasures.  

C. The Service is responsible for the security of our direct leases.  

3.7 How is leased space managed? 

A. Programs manage the day-to-day contact for maintenance work tickets and janitorial services with the lessor’s property manager.  

B. Most lease requirements are critical to the health, safety, and well-being of the occupants. Programs should log issues and dates of notifications to the lessor’s property manager to establish a record trail of ongoing lease deficiencies and non-performance.    

C. When lease compliance becomes deficient, programs must contact a Space Leasing Specialist, who will escalate the issue to the GSA property manager. 

D. GSA works with the lessor to ensure lease criteria are met. If performance deteriorates, GSA may issue a cure letter to the lessor to ensure the lessor returns to compliance with the lease. If the cure letter is ineffective, GSA may adjust lease payment amounts, supply services directly, or exercise cancellation clauses for early termination (see GSA’s Pricing Desk Guide).

E. The Service is responsible for maintaining the space and furnishings to comply with local fire and egress codes. The collateral duty safety officer must inspect the space for hazards, develop safety plans and an OEP, and conduct emergency drills (see Part 240, Safety Program). 

F. The Service is responsible for implementing physical security countermeasures and procedures compliant with the Facility Security Level (FSL) as determined by the DHS/FPS lease assessment (see 432 FW 1 for more information on FSLs).

G. As part of the Agency-Specific Requirements (ASR) for GSA-provided space with FSL II-IV, new lease requests should plan for electronic physical access control, security intrusion detection, and video surveillance systems as required by Service countermeasure standards (see GSA’s Public Buildings Service (PBS) Leasing Desk Guide(Leasing Desk Guide), chapter 19). 

H. For Occupancy Agreements (OA) with guard service, the program should monitor adherence to the post orders as established by FPS and escalate any issues to the Space Leasing Specialist. The Space Leasing Specialist is responsible for contacting the FPS (see Part 432, Physical Security). 

I. Rent and facilities management expenses are shared by the program tenants (see 370 FW 2). 

REQUESTING CHANGES TO LEASED SPACE 

3.8 What are the procedures for requesting reductions or expansions to leased space?  

A. If a program needs to reduce leased space, follow the procedures in section 3.10.  

B. If a program needs more leased space, follow the procedures in 370 FW 2. 

3.9 What are the procedures for requesting alterations to GSA-provided space? 

A. Programs may request alterations (renovations) to GSA-provided space. To do this, programs must work with the Space Leasing Specialist to develop a request for alterations that contains the following:  

(1) A memorandum from the Regional Director authorizing the alterations. The Regional Director may delegate this authority to an Assistant Regional Director or program Division Chief;

(2) A scope of work document with appropriate specifications and requirements; 

(3) Floor plans that depict the location of the work; 

(4) A cost benefit analysis; 

(5) Any other pertinent information, such as a document that describes and compares options that were considered and eliminated; and

(6) Organizational charts and a completed Service Space Calculator (calculator), if requested by the Space Leasing Specialist.

B. Upon receipt of the request by the Space Leasing Team:  

(1) The Space Leasing Specialist will send the request to GSA, who will negotiate the lease modification with the lessor. 

(2) GSA and the lessor must approve the request for space alteration based on the OA and lease clauses. 

(3) The lessor will provide cost estimates for the alterations and effect on rent, at which point the GSA fees will be calculated and documented in the GSA Summary Cost Estimate (SCE). The Space Leasing Specialist will use the SCE and program tenant’s certified funding document to authorize the lump sum funding on the RWA. 

(4) The project will proceed using the project management principles stated in 370 FW 2.

C. Major alterations may qualify for prospectus submission to Congress if the following apply:

(1) Alterations must take place post-occupancy (not part of the initial shell and first-generation general tenant improvement allowance elements),

(2) The estimated construction cost exceeds the current alterations prospectus threshold (see GSA.gov for the current prospectus threshold), and

(3) Payments are made to GSA either by lump-sum or amortized in rent (see GSA’s Leasing Desk Guide, chapter 11).

DISPOSING OF SPACE

3.10 How does the Service reduce leased space? 

A. To reduce leased space, the program must work with the Space Leasing Specialist to develop a space reduction request that contains the following:  

(1)  A memorandum from the Regional Director authorizing the space reduction. The Regional Director may delegate this authority to an Assistant Regional Director or program Division Chief; 

(2) A scope of work document with appropriate specifications and requirements; 

(3) Floor plans that depict the location of the reduction; 

(4) A cost benefit analysis; 

(5) Any other pertinent information, such as a document that describes and compares options that were considered and eliminated; and 

(6) Organizational charts and a completed calculator (optional but may be requested by the Space Leasing Specialist).

B. When one program tenant wants to leave a multi-program space, they may need to continue rent payments until the space is backfilled or the lease is reduced.

C. If the program tenants decide to vacate the entire space and allow the lease to expire at the end of the term, or when there is a need to terminate an OA or lease earlier than the expiration date, the memorandum (see section 3.10(A)(1)) must describe the circumstances of the lease and demonstrate due diligence for the decision. 

D. Any costs associated with a lease expiration, early termination of a lease, or a space decommissioning are the responsibility of the programs. 

E. You must reference the OA to determine if a lease is cancellable. For GSA-provided space that we can cancel, the Space Leasing Specialist must work with the appropriate GSA representative to remove the space from the Service’s inventory. The following conditions and requirements apply: 

(1) The OA must state that we have cancellation rights. Most OAs allow cancellation with 4 months' notice after the first 12 months of the term.

(2) The Service must notify GSA in writing before vacating the space and must continue to pay rent until GSA approves a new end date.  

(3) GSA will determine if the returned space is marketable to permit the partial return of space.

(4) The program is responsible for a lump-sum payment of the TI balance, if applicable. 

F. Some OAs are non-cancellable, especially in locations where other Federal agencies may not be readily available to backfill the space. The program is responsible for paying rent in a non-cancellable OA until it expires, or the space is reassigned. There may be a vacant space discount allowing for some cost reduction. 

G. The LCO should write the direct lease with a cancellation clause or incremental terms (e.g., option years) that allow flexibility in terminating the lease. However, the program must pay the rent through the current term of the lease until we can return the space to the lessor. 

H. Non-cancellable OAs and direct leases are reported quarterly in the financial statement to record rent obligations of more than 1 year through the Future Minimum Lease Payment report. 

I. The project manager will initiate the space close out when practicable. 

J. The Space Leasing Specialist must close the Financial and Business Management System (FBMS) records within 60 calendar days of the lease’s end date.

CAPITALIZATION

3.11 What is capitalization, and what are the requirements to capitalize direct leases, leasehold improvements, and tenant improvements?  

A. Capitalization means recording the total acquisition cost and economic life of an item in FBMS. Capitalization is a rare occurrence for Service leases, leasehold improvements, and Tenant Improvements (TI). The intent of capitalization is to comply with Office of Management and Budget (OMB) Circular No. A-11, Preparation, Submission, and Execution of the Budget scorekeeping rules, and to provide: 

(1) An accurate accounting of the value of an investment over time, and 

(2) Cost allocation to the appropriate fiscal year. 

B. Capital leases are arrangements that substantially transfer all the benefits and risks of ownership to the lessee in a direct lease. All direct leases must be scored by the LCO prior to execution and must be budgeted in accordance with OMB’s scorekeeping rules. See U.S. Department of the Interior (Department) Acquisition, Arts, and Asset Policy (DOI-AAAP)-0122 for capitalization criteria and the threshold.

C. Capitalized leasehold improvements and capitalized TIs are described in DOI-AAAP-0122. The Space Leasing Specialist must analyze and report leased space alteration projects that meet the criteria in DOI-AAAP-0122 during the direct leasing or RWA process. 

3.12 How does the Service report capital leases, capitalized leasehold improvements, and capitalized TIs? The Space Leasing Specialist must ensure that capital leases, capitalized leasehold improvements, and capitalized TIs are recorded in FBMS by consulting with the JAO Financial Operations Real Property Team.

SYSTEM ACCOUNTABILITY AND RECORDKEEPING 

3.13 What are the recordkeeping requirements for leased space? The Space Leasing Specialist must maintain records in FBMS for GSA-provided spaces and Service direct leases, which are uploaded to the contract record in FBMS.  

A. The required documentation must include: 

(1) The space request package approved by the Regional Director and the official request to GSA; 

(2) The final (countersigned) GSA OA and lease document, or the final (countersigned) Service direct lease; 

(3) Drawings and project records; 

(4) Correspondence about billing discrepancies; and

(5) Cancellation notices.

B. Additional required documentation for direct leases must include: 

(1) The leasing authority indicated on the space package memorandum (e.g., categorical, Independent Statutory Authority, or GSA delegation);   

(2) The GSA approval letter for delegation of space leasing authority, when using GSA delegation; 

(3) The LCO’s current Certificate of Authority (COA) warrant (see 370 FW 4); 

(4) Lease attachments and procurement documents (e.g., documentation about market research, acquisition plan, the Request for Lease Proposal, and the final proposal); and

(5) FBMS data must be maintained for accurate reporting through the Federal Real Property Profile (FRPP) annual report. All buildings are reported, but leases for structures such as boat docks are not. 

3.14 What are the recordkeeping requirements for non-lease agreements? Records for non-lease agreements with space as a component are managed by the program. For recordkeeping requirements, see the Service’s records disposition schedule.

INTERNAL CONTROLS

3.15 What internal controls apply to the space management program? The JAO Division of Acquisition and Property Policy Management (APPM) must assess the space management program annually for compliance with documentation, authority, and standard utilization rate. APPM must conduct assessments during the annual property management review to ensure: 

A. The Space Leasing Team has compiled and recorded in FBMS complete space request packages and direct lease documents; 

B. Space request memorandums have been signed at the appropriate Directorate level;   

C. The appropriate personnel have signed the required forms, including OAs; Standard Form 81, Request for Space; the calculator; the GSA Client Project Agreement; and the Department’s Bureau Certification of Funding Document for Space Leasing (attachment to DOI-AAAP-0086);

D. The LCO has filed their COA with the lease record in FBMS, and the lease value is below the warrant threshold; 

E. The Space Leasing Team has reported the utilization rate performance metric to the Department in the Service’s Space Management Plan; and 

F. The Space Leasing Specialist has accurately annotated the FBMS record with the correct leasing authority, termination rights, and building type, and retired the record within 60 calendar days of the lease end date.