GLA Case Study: GSA Project Delays

Tenant Agency: Social Security Administration (SSA)
Client: Building Owner

Services Provided

  • New GSA Lease Transaction
  • Project Management, Design & Build-Out of the Space

Project Synopsis

The General Services Administration (GSA) issued an advertisement for a new SSA office lease in a first-tier market in Georgia. The rentable square footage requirement for the lease was large enough that there was a limited amount of existing space that could meet the GSA requirement. GLA represented the Client on the lease transaction and obtained a lease award after lengthy negotiations with the landlord and the GSA.

After the lease was signed, GLA was engaged to do the project management of the design and the build-out of the space. The design intent drawing phase was delayed several months by the SSA’s lengthy review process, which also pushed back the start of the construction drawing phase. During the construction drawing phase, both the GSA and the SSA called for several redrafts, substantially impacting the project schedule and preventing the Client’s ability to collect rents on the start date specified in the lease.

The Challenges

Shell construction costs increased significantly above original estimates due to the extended period of time between the final offer submittal for the lease award and the construction start date. The Client was now responsible for paying the project cost amounts above the original project cost budget out of the shell rent.

The Solution

GLA recognized early in the transaction cycle that the Client would need to safeguard against the impact of any delays in the design and construction project schedule, as the additional costs that could be incurred are traditionally difficult to recover from government tenant agencies. NPS incorporated language into the offer documents that protected the Client against any increases to the project shell costs due to delays by the GSA and the SSA.

GLA worked closely with the Client, the Client’s general contractor and the GSA to manage the delays by the SSA and to help the SSA limit the impact of the increased shell construction costs.

The Result

Due to the project team’s collaborative management of both the project delays and the resulting increases in the project shell costs, the GSA and the SSA were able to anticipate and understand their obligations to pay the Client’s increases in the project shell costs.

When the SSA’s leased space was accepted by the GSA, it was apparent that GLA’s effective project management techniques avoided what could have been a costly project for the Client, including a lengthy GSA claims process and possible protest action by the Client and the GSA. In this case the GSA and SSA were very happy with the leased space and the efforts by the Client to complete the project per the lease requirements and the project schedule.

For More Information Contact:

Jamie Scruggs

Government Lease Advisors, Inc.