Order Code RS22287
Updated August 20, 2008
General Services Administration
Prospectus Thresholds for Owned
and Leased Federal Facilities
Clay H. Wellborn
Specialist in American National Government
Government and Finance Division
The General Services Administration (GSA) oversees GSA owned and leased
federal buildings and courthouses.1 As part of the authorization process for new
construction or leasing proposals, GSA is required to submit for approval a prospectus
containing project and cost specifications to the Office of Management and Budget
(OMB) and to House and Senate committees. Funding for authorized real property
projects is normally provided through annual appropriations acts. Relatively small
projects, however, do not require prospectus approval. Prospectus approval is required
for new construction or leases in FY2009 only if the proposals are valued at more than
$2.66 million; for projects involving the alteration of leased space, the threshold value
is $1.33 million. Thresholds change annually to reflect changing construction costs and
market circumstances. Under emergency circumstances, GSA does not need prospectus
approval for emergency leases whose terms are not to exceed 180 days. Following recent
large-scale disasters, however, GSA has had difficulty leasing space for displaced
federal tenants because lessors were not willing to enter into 180-day leases when
prospective non-federal tenants were willing to sign longer-term leases. Accordingly,
committees in both chambers reported bills in the 109th Congress to extend the terms of
emergency leases to five years, but neither house took final action. During the 110th
Congress, GSA again proposed increasing the term of emergency leases to five years,
but no bills addressing this matter were introduced. GSA may resubmit its proposal
during the 111th Congress. This report will be updated as circumstances warrant.
The General Services Administration (GSA) is the federal government’s primary
civilian real property management agency, with 11 regional offices that oversee GSA
owned and leased federal buildings and courthouses. As of August 4, 2008, GSA —
through its Public Buildings Service (PBS) — owned or leased more than 342 million
square feet of work area for 1.1 million federal employees in 2,100 American
This report was originally written by Stephanie Smith, who has retired from CRS. The currently
listed author revised and updated the report to reflect the prospectus thresholds for 2009.
communities. Of that total, 51% is government-owned; 49% is leased from the private
Authorizing and Appropriating for Federal Buildings
Until Congress enacted the Public Buildings Act in 1926, construction authority for
each federal building was approved and funded in separate pieces of legislation.3 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 planning, site acquisition, and design of federal
buildings located outside of Washington, DC, and for improvements to existing federal
buildings.4 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.5 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.6 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, which could range from 10 to 30 years. When authority for lease-purchase
contracts expired in 1957, Congress approved a successor statute, the Public Buildings
Act of 1959.7 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 construct, own, lease, maintain, and renovate
buildings to serve civilian agencies of the federal government.8
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. Congress authorizes appropriations, however,
through the prospectus approval process, which is discussed below.
Prospectus Requirements and Thresholds. Under the Public Buildings Act,
as amended, GSA is required to submit a formal document, known as a prospectus, first
to the Office of Management and Budget (OMB), and then to the Senate Committee on
Environment and Public Works and the House Committee on Transportation and
Infrastructure, as part of the process to authorize and appropriate funds for acquiring
U.S. General Services Administration, “Public Buildings Service,” at [http://www.gsa.gov/
Portal/gsa/ep/channelView.do?pageTypeId=8199&channelId=-13303], visited Aug. 14, 2008.
44 Stat. 630.
63 Stat. 176.
63 Stat. 377; 41 U.S.C. § 251 et seq.
68 Stat. 518.
73 Stat. 478; 40 U.S.C. § 3301-3315.
This authority also extends to federal courthouses, but not to the legislative branch.
additional space and facilities for federal agencies.9 Each prospectus includes project
specifications, cost estimates, and an anticipated completion schedule for the proposed
project. For FY2008, a prospectus is required for new construction, repairs, or leasing
proposals valued at $2.59 million or more. A prospectus is also required for proposed
alterations in GSA leased space valued at $1.29 million or more.10 For FY2009, those
amounts rise to $2.66 million and $1.33 million, respectively, as shown in Table 1,
Congressional approval of the prospectus is authorization to appropriate funds for
the project. Congress appropriates funds for GSA’s authorized construction and leasing
projects each fiscal year through the Financial Services and General Government
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.
Table 1. Prospectus Thresholds for Federal Buildings
Construction, Repairs and
Alterations, and Leases
Alterations in Leased
40 U.S.C. § 3307.
The Public Buildings Act Amendments of 1988 (102 Stat. 4049) increased the prospectus
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.
Construction, Repairs and
Alterations, and Leases
Alterations in Leased
Source: General Services Administration, GSA Annual Prospectus Thresholds, at: [http://www.gsa.gov/
Portal/gsa/ep/contentView.do?contentType=GSA_BASIC&contentId=16247&noc=T]. See also Federal
Management Regulation § 102-73.35.
a. 73 Stat. 478.
b. 86 Stat. 216.
c. 102 Stat. 4049.
Meeting Emergency Needs
In times of emergency or disaster, the normal prospectus thresholds and procedures
are modified to facilitate rapid recovery so that displaced federal agencies can get back
to work. Current law 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 prospectus for the lease.”11
Especially severe circumstances, however, may have ramifications that extend well
beyond 180 days. For example, Hurricane Katrina, which struck the Gulf Coast on August
29, 2005, caused significant property and infrastructure damage to 83 GSA-owned and
leased federal buildings and courthouses in Louisiana, Alabama, and Mississippi. The
damage necessitated the eventual relocation of 2,600 federal employees from 28 federal
agencies.12 Although not all GSA facilities suffered major structural damage in the
affected areas, supporting critical infrastructure was severely impaired or destroyed —
such as water, electricity, sewage systems, or even accessible roads to reach the federal
facilities. The storm also resulted in environmental conditions that might have threatened
the health and safety of federal employees in the affected areas. Moreover, many federal
employees were forced to evacuate to areas located away from federal facilities when their
homes were destroyed by Hurricane Katrina.
GSA deals with the 180-day limitation on non-prospectus emergency leases by
working with displaced tenant agencies to constrain requirements so that the value of the
40 U.S.C. § 3307(e).
U.S. Congress, Senate Committee on Environment and Public Works, Emergency Lease
Requirements Act of 2005, report to accompany S. 1708, 109th Cong., 2nd sess., S.Rept. 109-214
(Washington: GPO, 2006), p. 1. Hereafter cited as S.Rept. 109-214. For a detailed discussion,
see CRS Report RS22281, General Services Administration Federal Facilities Affected by
Hurricane Katrina, by Stephanie Smith.
emergency lease will not exceed the threshold for congressional prospectus approval. If
the threshold is not exceeded, the term of emergency-related leases may exceed 180 days
without triggering the time-consuming process of preparing, presenting, and obtaining
congressional approval for a prospectus. On the other hand, GSA says that constraining
the needs to be met by the emergency lease can and does lead to relocating some
displaced agencies in work space that is less than fully satisfactory.13
Congressional committees in both chambers agreed that the 180-day limitation on
emergency leases of space for displaced agencies was problematic. In the 109th Congress,
the Senate Committee on Environment and Public Works proposed increasing the
maximum term of emergency leases to 180 days to five years, saying,
Past experience with emergency leasing showed that a 6-month lease term (180 days)
for prospectus-level space was unattainable, due to the reluctance of building owners
to agree to such short-term leases for office space with GSA because competitors are
able to offer longer lease terms. In addition to this challenge posed by the market,
circumstances arising from natural disasters or other unforeseen events will likely
necessitate locating displaced Federal workers in emergency housing solutions for
greater than the currently allowed 180 days.14
The House Committee on Transportation and Infrastructure also recommended an
increase to five years for emergency leases related to Hurricanes Katrina and Rita. Both
committees reported bills to their respective chambers,15 but by the end of the 109th
Congress, neither chamber had taken final action and both bills died.
Proposals Before the 110th Congress. To date in the 110th Congress, no
legislation has been introduced to amend prospectus thresholds for lease, construction, or
repair federal facilities under emergency circumstances. However, on March 13, 2008, the
General Services Administration sent to Congress “a comprehensive legislative proposal
to improve the federal government by increasing its efficiency and effectiveness.”16 The
proposal would, among other things, lengthen the maximum term of an emergency lease
that does not require congressional approval of a prospectus from 180 days to five years.
The GSA proposal has not been formally introduced in either chamber of Congress.
Outlook for the 111th Congress. As noted above, GSA has found that following
major emergencies and disasters, local lessors will not offer 180-day leases for displaced
federal agencies when displaced commercial and other private tenants are willing to agree
to longer leases. Such market behavior is not likely to change, but the current statutory
prospectus requirement for longer leases can potentially impede speedy response and
recovery action by GSA following major emergencies and disasters. Accordingly, during
Telephone conference call with PBS Assistant Commissioner Chip Morris, et al., August 19,
S.Rept. 109-214, p. xx
S. 1708 and H.R. 4125, 109th Congress. Both bills are described in Appendix A.
U.S. General Services Administration, “GSA Announces Enhancement Act of 2008,”
GSA#10468, March 13, 2008. Available on the GSA website at [http://www.gsa.gov/Portal/
gsa/ep/contentView.do?contentType=GSA_BASIC&contentId=24174&noc=T]. Visited Aug.
the 111th Congress and under the next executive administration, GSA may again present
its legislative proposal to extend the term of emergency leases to five years.
Appendix: Legislation in the 109th Congress
S. 1708. On September 15, 2005, Senator James Inhofe and 11 bipartisan
co-sponsors introduced S. 1708, the Emergency Lease Requirements Act of 2005. The
proposed legislation would have amended 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 have exceeded five years without congressional
approval of a lease prospectus. The GSA Administrator would have been 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. The bill was reported without
amendment on January 26, 2006, and placed on the Senate Legislative Calendar. No
further action was taken before adjournment of the 109th Congress.
H.R. 4125. On October 25, 2005, Representative Bill Shuster and two bipartisan
co-sponsors introduced H.R. 4125. The bill would have authorized the GSA
Administrator to make repairs on federal buildings that were damaged by Gulf Coast
hurricanes without prior congressional approval of a prospectus. The proposed legislation
would also have authorized the GSA Administrator to enter into emergency lease
agreements for up to five years. The GSA Administrator’s emergency authorities would
have been valid for one year following enactment of H.R. 4125. At least five days before
making any building repairs, the GSA Administrator would have been required to submit
reports to the House Transportation and Infrastructure Committee and the Senate
Environment and Public Works Committee detailing costs and completion estimates. No
later than 15 days after completion, the GSA Administrator would have been required to
submit a final report stating total repair costs. The proposed legislation would also have
required the GSA Administrator to submit a detailed report to the House and Senate
Committees no later than 10 days after entering into an emergency lease agreement. H.R.
4125 was reported favorably by the House Committee on Transportation and
Infrastructure on October 26, 2005, by voice vote. No additional action was taken before
adjournment of the 109th Congress.