Leasing Alert LA-24-05: Implementing Certain Provisions of the Secure Federal LEASEs Act, Pub. L. 116-276 – Updated Guidance

Purpose

This Leasing Alert issues updated leasing guidance to implement certain parts of the Secure Federal Leases from Espionage And Suspicious Entanglements Act, (Pub. L. 116-276, 134 Stat. 3362), otherwise referred to as the Secure Federal LEASEs Act (SFLA). Specifically, this replacement Leasing Alert requires a notification to the Office of Leasing when there is a foreign ownership/financing disclosure, in addition to the tenant agency notification described under previous guidance. It also includes guidance for on-airport lease procurements. This Leasing Alert guidance replaces Leasing Alert LA-21-07 entitled “Implementing Certain Provisions of the Secure Federal LEASEs Act, Pub. L. 116-276” and also Addendum 1 to LA-21-07. Similar to LA-21-07, this Leasing Alert reflects an interim rule under GSAR Case 2021-G527 and is subject to further change once the GSAR rule is final.

Background

1. On June 30, 2021, the Office of Leasing issued Leasing Alert LA-21-07, entitled “Implementing Certain Provisions of the Secure Federal LEASEs Act, Pub. L. 116-276.” LA-21-07 provided leasing-specific guidance to implement Sections 3 and 5 of the SFLA.
   1. Sections 3 and 5 of the SFLA require that, before the Government may enter into a lease agreement or novation with an entity for high-security leased space [defined as federal security level (FSL) III, IV or V], offerors must disclose whether the immediate or highest-level owner of the leased space, including an entity involved in the financing thereof, is a foreign person or entity, including the country associated with the ownership entity.
   2. Section 3 also requires annual updates to this disclosure.
   3. Section 5 of the Act requires that leases for high-security space include language limiting access to the high-security leased space by the lessor, including representatives of the lessor’s property management company responsible for operation and maintenance of the leased space.
2. The Office of Leasing later issued Addendum 1 to LA-21-07 to disseminate GSA Order ADM 2800.12B, Change 130, transmitting GSAR Case 2021-G527, published in the Federal Register on July 1, 2021, to also implement Section 3 and 5 of the SFLA.
3. Subsequent to these policy issuances, the Office of Leasing decided to impose an additional notification requirement not covered under either the original LA-21-07 or Addendum 1; rather than issuing another addendum, the Office of Leasing is issuing this new Leasing Alert with updated guidance.
4. In addition, the Office of Leasing noted that prior guidance did not address SFLA compliance for on-airport lease procurements, which do not use a Request for Lease Proposals (RLP).

Effective date

This Leasing Alert is effective immediately, unless modified, canceled, or reissued.

Applicability

This Leasing Alert and its attachments are mandatory for new, new/replacing, succeeding, superseding, extension, renewal, and novation lease actions and apply to GSA real property leasing activities and activities delegated by GSA to other Federal agencies.

Cancellation

Leasing Alert LA-21-07, Implementing Certain Provisions of the Secure Federal LEASEs Act, Pub. L. 116-276, and Addendum 1 to Leasing Alert LA-21-07 are cancelled.

Instructions and procedures

Additional guidance concerning the implementation of GSAR Case 2021-G527 is as follows:

1. RLP packages seeking high-security leased space (FSL III and above) must include:
   1. GSAR representation 552.270-33, Foreign Ownership and Financing Representation for High-Security Leased Space (Attachment 1), and
   2. The applicable Facility Security Level (FSL) countermeasure template which already contains the GSAR access limitation clause 552.270-34, Access Limitations for High-Security Leased Space (Attachment 2).
      1. Inclusion of 552.270-34 as a separate, stand-alone clause is unnecessary.
   3. Automated Advanced Acquisition Program (AAAP) RLP packages already include the GSAR representation 552.270-33 and updated FSL templates containing GSAR clause 552.270-34.
   4. On-Airport lease procurements require a modified process, since RLPs are not issued for these, nor do their leases use the FSL security attachments referenced above. Instead, prior to completing negotiations, the Lease Contracting Officer (LCO) or his/her designee must send to the lessor:
      1. GSAR 552.270-33 representation, and
      2. GSAR clause 552.270-34.
2. Extensions and renewals for high-security leases (FSL III and above) must include:
   1. GSAR representation clause 552.270-33, and
   2. GSAR clause 552.270-34.
      1. It is recommended that LCOs utilize the separate extension or renewal attachment posted on the Office of Leasing’s Google site created specifically to incorporate this and other required FAR/GSAR clauses.
3. Change of Ownership/Novation:
   1. Administrative Lease Contracting Officers (ALCOs) will use novation templates that already include the required representation and clause.
4. GSAR 552.270-33 annual representations:
   1. For high-security leases containing GSAR clause 552.270-33, the lessor must submit the GSAR representation 552.270-33 on an annual basis, starting one year after the effective date of the lease.
   2. The Lease Contract Administration (LCA) Central Office team will send out the annual representation form to those lessors who are required to submit this annual representation.
5. Representation/notification/consultation process:
   1. Offerors/lessors must complete the GSAR representation 552.270- 33 requiring foreign ownership disclosure for the immediate owner, highest-level owner, and financing entity.
   2. LCOs must confirm whether the apparent successful offeror’s/lessor’s submittal represents foreign ownership (immediate owner, highest-level owner) and/or foreign financing.
      1. For novations, an ALCO performs this review and will reach out to the regional LCO for the notification steps described below.
      2. For annual representations, the LCA Central Office team performs this review and will reach out to the regional Lease Acquisition Officer (LAO), who will be responsible for notification process described under e.iii below.
   3. If there is a foreign ownership/financing disclosure, the LCO or his/her designee shall inform the appropriate client agency point of contact, in writing, of the foreign ownership/financing and coordinate with the agency regarding security concerns and any necessary mitigation measures.
      1. This agency notification should identify only the country associated with the ownership/financing entity.
      2. Do not identify the entity name, as this is considered procurement sensitive information at this time in the procurement process.
   4. Once sent, the LCO or his/her designee must then forward this notification to their zonal manager from the Office of Leasing’s Center for Lease Project Management.
      1. Upon receipt, the Office of Leasing will provide an additional level of notification to the agency, but at the executive level.
      2. Note that this is an additional notification overlay and does not replace the notification previously required at the working (facilities) level.
   5. These agency notifications are for the purpose of advising the agency, so that they can implement internal security mitigation measures.
      1. The presence of a foreign ownership/financing, in and of itself, cannot be used as grounds for eliminating an offeror from consideration or refusing to process a novation.
      2. An agency may not “reject” a property solely because of foreign ownership, as there is no basis to do so under current law, regulation, or policy.
   6. Notification must take place prior to lease award or execution of a lease extension/renewal/novation.
   7. LCOs must include documentation related to these notifications in the lease project file.
   8. LCOs must include the completed GSAR representation 552.270-33 and the appropriate FSL template containing GSAR clause 552.270-34 in the awarded lease contract/lease amendment.
      1. For On-Airport leases, include stand-alone GSAR clause 552.270-34 in lieu of FSL template.
6. GSAR 552.270-34 compliance:
   1. GSAR clause 552.270-34(c) states that “Written procedures governing access to the Space in the event of emergencies shall be documented as part of the Government’s Occupant Emergency Plan, to be signed by both the Government and the Lessor.”
   2. Note that Lease paragraph 6.27, OCCUPANT EMERGENCY PLANS, also requires the lessor to “cooperate, participate and comply with the development and implementation of the Government’s Occupant Emergency Plan (OEP).…”
   3. While the GSA Lease Administration Manager (LAM) is responsible for confirming that the OEP is established and maintained in each facility as part of his/her annual inspection, it is ultimately the tenant agency’s Designated Official who is responsible for developing the OEP in coordination with the lessor.

Attachments

• Attachment 1 [PDF - 224 KB], GSAR Representation 552.270-33, Foreign Ownership and Financing Representation for High-Security Leased Space (JUN 2021)
• Attachment 2 [PDF - 114 KB], GSAR Clause 552.270-34, Access Limitations for High-Security Leased Space (JUN 2021)