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LCD-80-93 1 (1980-08-05)

handle is hein.gao/gaobabavr0001 and id is 1 raw text is: 


GAO
United States General Accounting Office           Logistics and
Washington, DC 20548                              Communications
                                                  Division
B-199760
                                                AUGUST 5, 1980


The Honorable R. G. Freeman III                      II   liii Ii
Administrator of General Services                  11Ili
                                                      112945
Dear Mr. Freeman:

     Subject: CA is Overchargin Some Federal Agencies for
               Protective Services (LCD-80-93)

     During our review of GSA's management of reimbursable
services to Federal agencies in the National Capital Region
and GSA's region 5 (Chicago, Illinois), we noted that GSA
had been overcharging some Federal agencies for protective
services. GSA adds a protective service surcharge to rental
rates established by independent appraisers. Overcharging
occurs because appraisers often include charges for protective
services in their rental rate estimates.

BACKGROUND

     Public Law 92-313, dated June 16, 1972, directs GSA to
 charge agencies rent for the space GSA provides. The rental
 payments are officially called standard level user charges
 (SLUC). The law states that charges to agencies shall
 approximate commercial charges for comparable space and ser-
 vices. The law does not contain criteria or guidance for
 computing comparable commercial charges.

      In implementing the law, GSA contracts with appraisers
 to estimate comparable commercial charges. In developing
 such charges for fiscal year 1978, each G6vernment owned and
 leased building was appraised and a rate, referred to as a
 fair annual rental rate, was established. Each year since
 fiscal year 1978, about one-third of the buildings have been
 reappraised and new fair annual rental rates established.
 This practice will continue so that new rates will be estab-
 lished for about one-third of the buildings every year.
 These rates, once established, remain fixed for 3 years.

      After receiving the independent appraisers' estimated
 fair annual rental rates, GSA adds anticipated inflation
 to the beginning of the first fiscal year in which the rates
 are to be charged to agencies. GSA also adds an additional


                                                    (945371)

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