lease reform – “one size does not fit all”

Lease Reform – “One size does not fit all”

Client Solutions Division77 Forsyth Street, SWSuite 110Atlanta, GA 30303404.331.3584www.gsa.gov

What is “Lease Reform” (LRe)

• A national effort to completely overhaul the GSA leasing process to introduce new models and processes. The goal was to: Simplify, Streamline, Standardize

• Representatives from all 11 regions came together to developed 5 leasing models and introduce process changes based on best practices across the country– Simplified

– Standard

– Streamlined

– Succeeding

– On-Airport

Major Change – More Tools, Better Tools

• The old way forced us to use one of two procurement packages, the “Full SFO” and the “short form” (3626)

• The new way gives us 5 models to choose from to make sure we select the best one to meet the customer’s needs.

Leasing Models

• SLAT

• Streamlined

• Succeeding/Superseding

• Standard

• On-Airport

Major Change – RLP/Lease vs. SFO

• The SFO is being phased out– The 3626 is now only for use for disaster,

parking, and warehouse leases

• The RLP and Lease will be used in all future procurements

• Better organized

• Easier to read

• Easier to understand

Major Change - Agency Specific Requirements Package (ASRP)

• Increased focus on getting the agency to fully develop their requirements at the beginning of the project, instead of at the end

• The more detail you have up front, the less time you spend developing it after award

• In order to use the new SLAT and Streamlined models, you must have a fairly detailed ASRP, but you will save lots of time during the procurement– DID Workshop

– Turn-Key

Major Change – More Balanced Approach

• Offerors were forced to commit their space to GSA procurement for a long time– No cash flow, holding the space off the market

• Successful Offerors must then continue to wait through a lengthy design and build-out process before they receive any payment

• This new process is more balanced to our private sector business partners

Lessor commits space to GSA procurement

Lessor receives award but still has no cash flow through design and construction

Agency occupies space

3-6 months 3-6 months

Lessor commits space to GSA procurement

Shortened Design and Construction

Agency occupies space

GSA develops detailed requirements up front

6 -8+ months 12+ months

Standard Lease Model• Simplify

– Utilizes the RLP/Lease format to better organize the documents

– Confusing sections are revised to better define the role and responsibilities of the Govt. and Lessor

• Standardize– RLP/Lease documents help to eliminate

the region to region differences• Streamline

– Incorporates the new process changes and that all models utilize

Standard Model

• Most similar of the new models to our current “TI-SFO” process – TI allowance approach used– Can be used for all procurements

• LCO can always choose to incorporate elements of the other models to improve or speed up the process– DID workshop– Detailed ASRP – always preferable

Standard Model

• No more SF2– Information incorporated directly into the “Lease”

• No more 3516– Information incorporated directly into the RLP

• Clarifies terminology

• RLP highlights the minimum eligibility requirements, simplifying the process for Offerors

Standard Model

The standard model is always available

Standard Model

Succeeding Model

SLAT Model

On-Airport Model

Streamline Model

Simplified Leasing Model

• Replaces the old 3626

• Turn Key – Simplified Post-Award Process

– Full ASRP required from agencies up front

– Final TI costs included in offer

– Speeds up design time post-award and eliminates a significant source of agency caused delays

• Award can be based on initial offers

Succeeding Lease Model• Simplify

– The RLP/Lease eliminates language not applicable a sole source succeeding lease

• Standardize– RLP/Lease documents provide a consistent format

and set of language for everyone• Streamline

– New “National Decision Tool” spreadsheet helps you do a cost benefit analysis quickly using pre-loaded cost data

– All improvements needed identified in the Lease and priced up front, no TI negotiations post-award

• Carpet/Paint• Etc.

– The documents do not contain construction language, significantly reducing the document size

Succeeding Leasing Model

• Cycle Time Enhancements– No ad required if under 10,000 rsf

• Still must perform market search (COSTAR, Loopnet, etc.) and promote competition to the maximum extent practical

– More open and informal negotiation procedures

• Forms “acknowledge” that it is a sole source negotiation

Streamlined Lease Model

• Simplify– TI can be handled one of three ways – choose the

method that works best for you

• Standardize– RLP/Lease documents– National “ASRP” Template (coming soon)

• Streamline– Detailed requirements and prototype layout received

up front– “DID Workshop” after award that lasts 2-3 days and

the agency approves the DID at the end of the workshop

Streamline Model

• Bridges the gap between the SLAT and Standard models– Can be used for leases up to $500k annual rent

• TI can be handled 3 ways – choose the method that works best for your project– Turn-Key – final TI costs bid up front

– Unit-Cost – “typical” TI costs bid up front, final costs determined using the unit costs

– TI allowance – our current process

On-Airport Model

• Simplify– Documents are tailored towards airport leases

• Standardize– Flexibility in the RLP/Lease helps us to use this

form at more airports as opposed to having to use their form

• Streamline– Documents contain options to reflect the different

levels of service available at different airports, making it quick and easy to tailor the RLP/Lease to your situation

On-Airport Model

• Blanket JOTFOC

• Streamlines the process of contracting for alterations when the airport does not perform them

• Renewal Options built-in to reduce procurement time for succeeding procurements

Lease Reform – “In the Works”

• Lease Acquisition Training (LAT) -Between now and the end of the fiscal year,

over 1,200 members of the leasing community nationwide will be trained. 

(Initial training was provided on a regional level)

-The first class is scheduled in Atlanta for week of April 9th

• Agency Specific Requirements (ASR)(National team)

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Lease Reform – “In the Works” 28