GSA tries to walk back hundreds of lease terminations for ‘public-facing’ office

The General Services Administration terminated nearly 1,000 federal office leases last week — the first of several waves of downsizing its leaders expect complete between now and the end of the fiscal year.

But GSA’s real estate shop is already trying to walk back hundreds of those lease terminations, after officials discovered that closing down these offices would impact public-facing benefits and services.

Despite these complications, GSA is planning on five more rounds of mass lease terminations between now and Sept. 30. By the end of the fiscal year, GSA leaders expect to terminate another 660 leases. Federal News Network spoke with four current or former GSA officials, who all requested anonymity to avoid retaliation.

One official with GSA’s Public Buildings Service said the agency is currently in the process of rescinding about 300 recently terminated leases.

“A lot of what they terminated were actually public-facing buildings, which were not supposed to be part of this,” the employee said. “We are reaching out to lessors, and for the most part, in better terms saying, ‘Just kidding. We would like to cancel that [termination].’”

Agencies will begin moving employees out of their current office space starting in June. Once GSA terminates a lease, agencies typically have about 120 days to relocate employees.

A second PBS employee said GSA did not consult with its regional offices about the lease terminations, and that some tenant agencies were not notified before their leases were terminated.

“Regions were told not to engage with the customers around this. The lease termination letters were being sent out to building owners PBS leased from in batches,” the employee said.

The employee added that many tenant agencies are “very upset” about losing office space, while trying to comply with the Trump administration’s mandate to bring nearly all federal employees back to the office.

“They are trying to figure out how to fit staff into space with return to office, and PBS is trying to close a lot of leases,” the employee said.

The first PBS official said that in some cases, GSA may not have time to get contracts in place to move or dispose of furniture in leased office space.

“In some cases, we’re being told, ‘Well, they’ll just abandon in place.’ Those lessors are going to be left with that price tag, and they’re going to have to just sue the federal government for that money back.”

For smaller companies leasing to the federal government, the GSA official said they might not even be able to afford the legal battle.

“It’ll cost them more to sue than it will to collect the money. Most cases, they’re just going to have to cut their losses.”

A GSA spokesperson told Federal News Network that GSA “is reviewing all options to optimize our footprint and building utilization.”

“A component of our space consolidation plan will be the termination of many soft term leases. To the extent these terminations affect public facing facilities and/or existing tenants, we are working with our agency partners to secure suitable alternative space. In many cases this will allow us to increase space utilization and obtain improved terms,” the spokesperson said.

‘We are trying to clean up the mess’

The official said GSA’s central office in D.C. terminated the leases without input from regional offices.

“We are trying to clean up the mess, and we’ve just been told, if a lessor is not willing to rescind the termination, then to just reach out back to the national office.”

According to the employee, agencies with environmental missions —including the Environmental Protection Agency, U.S. Geological Survey, and Forest Service, saw some of the biggest reductions in leased space.

The Washington Post reported that GSA also terminated leases for more than 110 IRS offices that have taxpayer assistance centers.

In addition to slashing current leases, GSA is putting a hold on signing new ones.

“We are in a pause. There are very, very few exceptions,” the official said.

A third PBS employee confirmed the freeze on new leases, citing a memo Acting GSA Administrator Stephen Ehikian signed in January.

“Effective immediately, and until further notice, all contracting officers and lease contracting officers (1102s and 1170s) are instructed to suspend the execution of any new GSA-funded obligations, including new awards, task and delivery orders, modifications, and options,” Ehikian wrote in a Jan. 24 memo obtained by Federal News Network.

The memo lists an email address where employees can request an exemption and proceed with signing a new lease.

The first PBS employee said…