Order Code RS22287
October 3, 2005
CRS Report for Congress
Received through the CRS Web
General Services Administration Prospectus
Thresholds for Owned and Leased Federal
Facilities
Stephanie Smith
Analyst in American National Government
Government and Finance Division
Summary
The General Services Administration (GSA) is the federal government’s primary
federal real property and asset management agency, with 11 regional offices that oversee
GSA owned and leased federal buildings and courthouses. As part of the funding
authorization process for new construction or leasing proposals valued at more than
$2.47 million (in FY2006), GSA is required to submit a prospectus containing project
and cost specifications to the Office of Management and Budget (OMB), the Senate
Committee on Environment and Public Works, and the House Committee on
Transportation and Infrastructure, for approval. Hurricane Katrina struck the Gulf coast
on August 29, 2005, causing significant property and infrastructure damage to GSA
owned and leased federal buildings and courthouses in Louisiana, Alabama, and
Mississippi. Under current law, the GSA Administrator is authorized to obtain
emergency 180-day leases to provide temporary office space to displaced federal tenants,
without prior congressional approval of a lease prospectus. S. 1708, the Emergency
Lease Requirements Act of 2005, would authorize the GSA Administrator to enter into
emergency lease agreements for up to five years during a major disaster, without prior
congressional approval of a lease prospectus. This report will be updated as additional
information becomes available.
Statutory Intent and Background
Prior to the enactment of the Public Buildings Act in 1926, construction authority
for each federal building was approved and funded in separate pieces of legislation.1 The
1926 act provided the basic authority for the construction of federal buildings through the
congressional authorization and appropriation process. Congress later enacted the Public
Buildings Act of 1949 to authorize the acquisition of sites and design plans for federal
buildings located outside of Washington, DC, and for improvements to existing federal
1 44 Stat. 630.
Congressional Research Service ˜ The Library of Congress

---

CRS-2
buildings.2 Congress also enacted the Federal Property and Administrative Services Act
of 1949, which established the General Services Administration (GSA), and gave the
GSA Administrator responsibility for administering federal real property.3 In 1954,
Congress amended the Public Buildings Act of 1949 to authorize the GSA Administrator
to acquire titles to real property and to construct federal buildings through lease-purchase
contracts.4 Under this procedure, a building was financed by private capital, and the
federal government made installment payments on the purchase price in lieu of rent
payments. Title to the property was vested in the federal government at the end of the
contract period, generally at least 10, and not more than 30, years. When authority for
lease-purchase contracts expired in 1957, Congress approved a successor statute, the
Public Buildings Act of 1959.5 The 1959 act re-established earlier requirements to
provide for direct federal construction of public buildings through the congressional
authorization and appropriation process. This act, as amended and re-codified over the
years, remains the basic statute authorizing the GSA Administrator to lease, construct, and
renovate federal civilian facilities.

GSA, through its Public Buildings Service (PBS), is the primary federal real property
and asset management agency. As of September 30, 2004, GSA’s real property portfolio
consisted of 208.5 million square feet of owned office space and 162.9 million square feet
of leased office space, together accounting for 45.9% of the federal government’s total
space requirements.6
GSA is responsible for the design and construction of its buildings and courthouses,
and for repairs and alterations to existing facilities. As part of the President’s annual
budget submission to Congress, GSA requests funding for new construction projects, as
well as for renovation and leasing projects. Under the Public Buildings Act, as amended,
GSA is required to submit a formal document, or prospectus, to the Office of
Management and Budget (OMB), the Senate Committee on Environment and Public
Works, and the House Committee on Transportation and Infrastructure, as part of the
funding authorization process.7 Each prospectus includes project specifications, cost
estimates, and an anticipated completion schedule for the proposed project. For FY2006,
a prospectus is required for each new construction, repairs, or leasing proposal valued at
$2,470,000 or more. A prospectus is also required for proposed alterations in GSA-leased
space valued at $1,235,000 or more.8 Project authorization must be received from OMB,
2 63 Stat. 176.
3 63 Stat. 377; 41 U.S.C. § 251 et seq.
4 68 Stat. 518.
5 73 Stat. 478; 40 U.S.C. § 3301-3315.
6 U.S. General Services Administration, Office of Governmentwide Policy, Overview of the
United States Government’s Owned and Leased Real Property: Federal Real Property Profile,
as of Sept. 30, 2004, p. 11. For additional information on GSA owned and leased office space,
see CRS Report RL32368, The General Services Administration and Federal Real Property
Management: Overview and Current Legislation, by Stephanie Smith.
7 40 U.S.C. § 3307.
8 The Public Buildings Act Amendments of 1988 (102 Stat. 4049) increased the prospectus
(continued...)

---

CRS-3
and from both the House and Senate committees before Congress can approve and fund
GSA’s proposed construction and leasing projects each fiscal year through the
Transportation, Treasury, Housing and Urban Development, Judiciary, and Independent
Agencies appropriations bill. Once the proposed construction and repairs projects receive
congressional funding, GSA’s Public Buildings Service contracts with private sector firms
for design and construction work through the appropriate formal bidding process.
Congressional Initiatives in the 109th Congress
Hurricane Katrina struck the Gulf coast on August 29, 2005, causing significant
property and infrastructure damage to GSA owned and leased federal buildings and
courthouses in Louisiana, Alabama, and Mississippi.9 While not all GSA facilities
suffered major structural damage in the affected areas, there is no supporting critical
infrastructure, such as water, electricity, sewage systems, or even accessible roads to reach
some of the federal facilities. There are also environmental concerns that might affect the
health and safety of federal employees in the affected areas. A related problem with long-
term implications is that many federal employees were forced to evacuate to areas located
away from federal facilities when their homes were destroyed by Hurricane Katrina. In
order to accommodate displaced federal tenants from all major agencies, GSA is leasing
available office space in Baton Rouge, LA, Lafayette, LA, Shreveport, LA, and Jackson,
MS. Current law10 authorizes the GSA Administrator to enter into an emergency lease
agreement during any period declared by the President to require emergency leasing
authority. An emergency lease may not be for more than 180 days without congressional
approval of a lease prospectus.
S. 1708, the Emergency Lease Requirements Act of 2005, was introduced in the
Senate by Senator James Inhofe and 11 bipartisan co-sponsors on September 15, 2005.
The proposed legislation would amend current law to authorize the GSA Administrator
to enter into emergency lease agreements during a major disaster or other emergency
declared by the President or the head of a federal agency under applicable federal law. The
term of an emergency lease could not exceed five years without congressional approval
of a lease prospectus. The GSA Administrator would be required to submit an annual
report describing any emergency lease to the House Committee on Transportation and
Infrastructure and the Senate Committee on Environment and Public Works by April 1
of each year. On September 15, 2005, S. 1708 was referred to the Senate Committee on
Environment and Public Works.
Table 1 provides a history of prospectus thresholds for GSA’s construction, repairs,
and leasing projects.
8 (...continued)
threshold to $1.5 million, with the amount to be adjusted annually as determined by the
Department of Commerce’s composite index of construction costs.
9 For a detailed discussion, see CRS Report RS22281, General Services Administration Federal
Facilities Affected by Hurricane Katrina, by Stephanie Smith.
10 40 U.S.C. § 3307(e).

---

CRS-4
Table 1. History of Prospectus Thresholds for Federal Buildings
Fiscal year(s)
Construction, repairs and
Alterations in leased
alterations, and leases
space
1959-1971a
$200,000
—
1972-1988b $500,000

—
1989-1991c
$1,500,000
$750,000
1992
$1,525,000
$762,500
1993
$1,600,000
$800,000
1994
$1,650,000
$825,000
1995
$1,670,000
$835,000
1996
$1,680,000
$840,000
1997
$1,740,000
$870,000
1998
$1,810,000
$905,000
1999
$1,890,000
$945,000
2000
$1,930,000
$965,000
2001
$1,990,000
$995,000
2002
$2,130,000
$1,065,000
2003
$2,213,000
$1,106,500
2004 $2,290,000
$1,145,000
2005
$2,360,000
$1,180,000
2006
$2,470,000
$1,235,000
Source: General Services Administration, Office of Budget, May 2, 2005.
a73 Stat. 478.
b86 Stat. 216.
c102 Stat. 4049.

---