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  6. CD-2023-04

Class deviation CD-2023-04: GSAR Class Deviation - Default by Lessor Clause

CD-2023-04
July 25, 2023
MEMORANDUM FOR PBS LEASING CONTRACTING ACTIVITIES
FROM AND DIGITALLY SIGNED BY: Jeffrey A. Koses, Senior Procurement Executive, Office of Acquisition Policy
SUBJECT: GSAR Class Deviation - Default by Lessor Clause

On this page:

  1. Purpose.
  2. Background.
  3. Authority.
  4. Applicability.
  5. Deviation.
  6. Effective date.
  7. Point of contact.
  8. Attachments.

1. Purpose.

This memorandum approves a class deviation to the General Services Administration Regulation (GSAR) at 552.270 to provide updated clause language regarding defaults for lease procurements.

This deviation is amending the GSAM policy on lease contracts to maintain consistency with the GSAR and to clarify, update and incorporate existing lease guidance previously implemented through internal Public Building Service (PBS) policies.

2. Background.

Lease Acquisition Circular LAC-2012-02, issued by the Office of Leasing on June 1, 2012, issued updated templates reflecting changes to certain lease clauses and paragraphs implemented through the PBS Lease Reform Initiative. These clauses and paragraphs, which have been subsequently updated through multiple Office of Leasing policy changes since 2012, are not in alignment with GSAR part 570.

Pursuant to GSAM 501.404, this class deviation aligns the following updated leasing clauses for compliance with the GSAR and satisfies the SPE approval requirement:

Leasing clause titleLast revision by leasingGSAR clause titleLast revision by GSAR
Default by LessorApril 2012GSAR 552.270-10, Failure in PerformanceSeptember 1999
GSAR 552.270-18, Default in Delivery— Time ExtensionsSeptember 1999
GSAR 552.270-22, Default By Lessor During the TermSeptember 1999

Additional information regarding this matter can be found in Chapter 17 of the Leasing Desk Guide, specifically Part 7, Enforcement Management and Failure in Performance, and in the Lease Management Desk Guide.

3. Authority.

This class deviation is issued under the authority of General Services Administration Acquisition Manual (GSAM) 501.404.

4. Applicability.

This class deviation applies as follows:

New leases

This updated clause must be included in all new leases. Specifically:

  • For any open solicitation, the solicitation must be either amended prior to close or the clause incorporated into the award prior to signature.
  • For any future solicitation, the solicitation must be amended prior to award.

Existing leases

This updated clause must be included in all existing leases, at the time of option exercise, through a separate contract modification action.

Updating leasing templates

The PBS Office of Leasing will update the leasing templates to reflect this updated clause. In addition, the PBS Office of Leasing will work expeditiously to revise relevant guides and resources (e.g., Leasing Alerts (LA), Leasing Desk Guide (LDG)).

5. Deviation.

See Attachment A for the changes in the GSAR text as revised by this class deviation. Three GSAR clauses are being combined into the new GSAR 552.270-10, Default by Lessor clause. The title of the current GSAR 552.270-10 is being changed from Failure in Performance to Default by Lessor, and the text of the new GSAR 552.270-10 is updated as well. The current text in both GSAR 552.270-18 and GSAR 552.270-22 is deleted.

6. Effective date.

This deviation is effective immediately and remains in effect until rescinded or incorporated into the GSAR.

7. Point of contact.

Any questions regarding this deviation may be directed to Amy Lara, GSA Acquisition Policy Division, at GSARPolicy@gsa.gov.

8. Attachments.

  • Attachment A – GSAR Deviation Text, Line-In/Line-Out

Attachment A – GSAR Deviation Text, Line-In/Line-Out

GSAR Baseline: Change 166 effective 05/05/2023

  • Additions to baseline made by proposed rule are indicated by [bold text in brackets]
  • Deletions to baseline made by proposed rule are indicated by strikethroughs
  • Five asterisks (* * * * *) indicate that there are no revisions between the preceding part and/or subpart, and following section
  • Three asterisks (* * *) indicate that there are no revisions between the material shown within a section or subsection

PART 552 - SOLICITATION PROVISIONS AND CONTRACT CLAUSES

* * * * *

Subpart 552.000 Scope of part. 

* * * * *

Subpart 552.2 - Text of Provisions and Clauses 

* * * * *

552.270-10 Failure in Performance. [Default by Lessor (DEVIATION)].

As prescribed in 570.703, insert the following clause:

FAILURE IN PERFORMANCE (SEP 1999)

The covenant to pay rent and the covenant to provide any service, utility, maintenance, or repair required under this lease are interdependent. In the event of any failure by the Lessor to provide any service, utility, maintenance, repair or replacement required under this lease the Government may, by contract or otherwise, perform the requirement and deduct from any payment or payments under this lease, then or thereafter due, the resulting cost to the Government, including all administrative costs. If the Government elects to perform any such requirement, the Government and each of its contractors shall be entitled to access to any and all areas of the building, access to which is necessary to perform any such requirement, and the Lessor shall afford and facilitate such access. Alternatively, the Government may deduct from any payment under this lease, then or thereafter due, an amount which reflects the reduced value of the contract requirement not performed. No deduction from rent pursuant to this clause shall constitute a default by the Government under this lease. These remedies are not exclusive and are in addition to any other remedies which may be available under this lease or at law.

(End of clause)

[DEFAULT BY LESSOR (JUL 2023) (DEVIATION)

Occurrence of the following constitutes default by the Lessor and gives rise to the following rights and remedies of the Government:

(a) Prior to acceptance of the space. Failure by the Lessor to perform diligently any obligations required for acceptance of the space or other required improvements within the times specified, other than due to an excusable delay, shall constitute a default by the Lessor. Subject to provision of notice of default to the Lessor, and provision of a reasonable opportunity for the Lessor to cure its default, the Government may, in its sole discretion, terminate the lease on account of the Lessor’s default. 

(b) After acceptance of the space. Failure by the Lessor to perform any service, to provide any item, or satisfy any requirement of this lease, other than due to an excusable delay, constitutes a default by the Lessor. Subject to provision of notice of default to the Lessor, and provision of a reasonable opportunity for the Lessor to cure its default, the Government may, in its sole discretion, take one or more of the following actions:
    (1) Perform the service, provide the item, or obtain satisfaction of the requirement by its own employees or contractors. If the Government elects to take such action, the Government may deduct from rental payments its costs, including administrative costs, incurred in connection with taking the action;
    (2) Reduce the rent by an amount reasonably calculated to approximate the cost or value of the service not performed, item not provided, or requirement not satisfied, such reduction effective as of the date of the commencement of the default condition. If default renders the leased premises untenable, the reduction of rent may be calculated as the prorated portion of the monthly rent represented by all such days the leased premises is untenantable; 
    (3) Terminate the lease if: 
      (i) The Lessor’s default persists notwithstanding provision of notice and reasonable opportunity to cure by the Government, or 
      (ii) The Lessor fails to take such actions as are necessary to prevent the recurrence of default conditions, and such conditions substantially impair the safe and healthful occupancy of the premises, or render the premises unusable for its intended purposes. 

(c) Damages. The Lessor and the Lessor sureties, if any, are jointly and severally liable for any damages to the Government resulting from default or termination, as provided in this clause.
    (1) Damages include all costs associated with the replacement lease(s), which include but are not limited to the following: the Government’s aggregate rent, estimated real estate taxes, operating costs, administrative costs, or other reprocurement costs.
    (2) If the Government procures replacement premises for a term (including all option terms) in excess of this lease term, the Lessor is not liable for excess Government rent or adjustments during such excess lease term. 
    (3) Damages to which the Government is entitled to under this clause are due and payable thirty (30) days following the date the Lessor receives notice from the Contracting Officer specifying such damages. 

(d) Excusable delays.
    (1) The Government shall not terminate this lease under this clause nor charge the Lessor with damages under this clause, if:
      (i) the delay in substantially completing any work or performing any services arises from excusable delays, and
      (ii) the Lessor, within ten (10) days from the beginning of any such delay (unless extended in writing by the Contracting Officer) provides notice to the Contracting Officer of the causes of delay. 
    (2) The Contracting Officer shall ascertain the facts and the extent of delay. If the facts warrant, the Contracting Officer shall extend the delivery date commensurate with the delay at no additional costs to the Government. A time extension is the sole remedy of the Lessor. 

(e) No deduction from rent, termination of lease, or any other action pursuant to this clause will constitute a default by the Government under this lease.

(f) The rights and remedies specified in this clause are in addition to any and all remedies to which the Government may be entitled as a matter of law. 

(End of clause)]

* * * * *

552.270-18 Default in Delivery–Time Extensions.

DEFAULT IN DELIVERY—TIME EXTENSIONS (SEP 1999)

(a) With respect to Lessor’s obligation to deliver the premises substantially complete by the delivery date, time is of the essence. If the Lessor fails to work diligently to ensure its substantial completion by the delivery date or fails to substantially complete the work by such date, the Government may by notice to the Lessor terminate this lease. Such termination is effective when received by Lessor. The Lessor and the Lessor’s sureties, if any, are jointly and severally liable for any damages to the Government resulting from such termination, as provided in this clause. The Government is entitled to the following damages:
    (1) The Government’s aggregate rent, estimated real estate tax, and operating cost adjustments for the firm term and all option terms of its replacement lease or leases, in excess of the aggregate rent and estimated real estate tax and operating cost adjustments for the term. If the Government procures replacement premises for a term (including all option terms) in excess of this lease term, the Lessor is not liable for excess Government rent or adjustments during such excess lease term. 
    (2) All administrative and other costs the Government incurs in procuring a replacement lease or leases. 
    (3) Other, additional relief provided for in this lease, at law, or in equity. 

(b) Damages to which the Government is entitled to under this clause are due and payable thirty (30) days following the date Lessor receives notice from the Contracting Officer specifying such damages. 

(c) Delivery by Lessor of less than the minimum ABOA square footage required by this lease shall in no event be construed as substantial completion, except as the Contracting Officer permits. 

(d) The Government shall not terminate this lease under this clause nor charge the Lessor with damages under this clause, if 
    (1) the delay in substantially completing the work arises from excusable delays, and
    (2) the Lessor within 10days from the beginning of any such delay (unless extended in writing by the Contracting Officer) provides notice to the Contracting Officer of the causes of delay. The Contracting Officer shall ascertain the facts and the extent of delay. If the facts warrant, the Contracting Officer shall extend the delivery date, to the extent of such delay at no additional costs to the Government. A time extension is the sole remedy of the Lessor. 

(End of clause)

* * * * *

552.270-22 Default by Lessor During the Term

DEFAULT BY LESSOR DURING THE TERM (SEP 1999)

(a) Each of the following shall constitute a default by Lessor under this lease:
    (1) Failure to maintain, repair, operate or service the premises as and when specified in this lease, or failure to perform any other requirement of this lease as and when required provided any such failure shall remain uncured for a period of thirty (30) days next following Lessor’s receipt of notice thereof from the Contracting Officer or an authorized representative.
    (2) Repeated and unexcused failure by Lessor to comply with one or more requirements of this lease shall constitute a default notwithstanding that one or all such failures shall have been timely cured pursuant to this clause. 

(b) If a default occurs, the Government may, by notice to Lessor, terminate this lease for default and if so terminated, the Government shall be entitled to the damages specified in the Default in Delivery-Time Extensions clause. 

(End of clause)

* * * * *

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Last updated: Apr 15, 2025
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    • Loss prevention and fuel services
    • A fleet management system with detailed, accurate data
  • A charge card for U.S. government personnel to use when paying for fuel and maintenance of GSA Fleet vehicles. Find out where the Fleet card is accepted, how to use it and more.

  • A Department of Homeland Security program that allows members to use expedited lanes at U.S. airports and when crossing international borders by air, land and sea.

  • A charge card for certain U.S. Government employees to use when buying mission-related supplies or services using simplified acquisition procedures, when applicable, and when the total cost does not exceed micro-purchase thresholds.

  • A charge card for U.S. government personnel to use when paying for reimbursable expenses while on official travel. Visit smartpay.gsa.gov for more.

  • A vehicle used to perform an agency’s mission(s), as authorized by the agency.

  • Pre-competed, multiple-award, indefinite delivery, indefinite quantity contracts that agencies can use to buy total IT solutions more efficiently and economically.

  • A ceremony marking the official start of a new construction project, typically involving driving shovels into ground at the site.

  • An online shopping and ordering system at gsaadvantage.gov that provides access for federal government employees and in some cases, state and local entities, to purchase from thousands of contractors offering millions of supplies and services.

  • An online auction site at gsaauctions.gov that allows the general public to bid on and buy excess federal personal property assets such as:

    • Office equipment
    • Furniture
    • Scientific equipment
    • Heavy machinery
    • Airplanes
    • Vessels
    • Vehicles
  • Real property for which GSA is responsible. It can be either federally owned or leased from a public or private property owner.

  • An SBA program that gives preferential consideration for certain government contracts to business that meet the following eligibility requirements:

    • Be a small business
    • Be at least 51 percent owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, a Native Hawaiian organization, or an Indian tribe
    • Have its principal office located in a HUBZone
    • Have at least 35 percent of its employees live in a HUBZone

    See Title 13 Part 126 Subpart B of the Code of Federal Regulations for more information.

  • A type of contract when the quantity of supplies or services, above a specified minimum, the government will require is not known. IDIQs help streamline the contract process and speed service delivery.

  • A fee paid by businesses who are awarded contracts under Multiple Award Schedule to cover GSA’s cost of operating the program. The fee is a fixed percentage of reported sales under MAS contracts that contractors pay within 30 calendar days following the completion of each quarter.

  • A law that provides $3.375 billion for us to:

    • Invest in federal buildings with materials and technologies, making them more efficient, saving taxpayer dollars and creating opportunities for small businesses.
    • Help boost the competitiveness of American manufacturers developing materials.

    This includes $2.15 billion for low embodied carbon materials in construction projects, $975 million to support emerging and sustainable technologies, and $250 million for measures to convert more buildings into High Performance Buildings.

  • An investment in our nation’s infrastructure and competitiveness. The law provides funding for LPOE modernization projects that will create new good-paying jobs, bolster safety and security, and make our economy more resilient to supply chain challenges.

  • A written agreement entered into between two federal agencies, or major organizational units within an agency, which specifies the goods to be furnished or tasks to be accomplished by one agency (the servicing agency) in support of the other (the requesting agency).

  • A facility, also known as a border station, that provides controlled entry into or departure from the United States for persons or materials. It houses the U.S. Customs and Border Protection and other federal inspection agencies responsible for the enforcement of federal laws related to entering into or departing from the U.S.

  • An employee who is responsible for preparing, negotiating, awarding and monitoring compliance of lease agreements.

  • Criteria used to select the technically acceptable proposal with the lowest evaluated price. Solicitations must specify that award will be made on the basis of the lowest evaluated price of proposals meeting or exceeding the acceptability standards for non-cost factors.

  • The rate of reimbursement for driving a privately owned vehicle when your agency authorizes it. Current rates are at gsa.gov/mileage.

  • Long-term governmentwide contracts with commercial firms providing federal, state, and local government buyers access to more than 11 million commercial products and services at volume discount pricing. Also called Schedules or Federal Supply Schedules.

  • The standard federal agencies use to classify business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.

  • A family of six separate governmentwide multiple award, IDIQ contracts for management and advisory, facilities, technical and engineering, logistics, intelligence services, research and development, environmental, and enterprise solutions.

  • A formal, signed agreement between GSA’s Public Buildings Service and a federal agency for a specific space assignment.

  • Services performed under a contract with a federal agency that include:

    • Cemetery maintenance
    • Electrical systems and energy management control systems
    • Elevator inspection and maintenance
    • Energy management and audit services
    • Fire alarm and fire suppression system maintenance
    • Janitorial
    • Landscaping and snow removal
    • Marine vessel maintenance and repair services
    • Painting
    • Pest control
    • Plumbing or pipe fitting
    • Refrigeration or heating, cooling, and air conditioning
    • Smart buildings
  • The per day rates for the lower 48 continental United States, which federal employees are reimbursed for expenses incurred while on official travel. Per diem includes three allowances:

    • A rate for lodging
    • A rate for meals
    • A rate for incidental expenses
  • An identification card that allows credentialed government personal to access facilities, computers, or information systems. May also be referred to as HSPD-12 card, LincPass, Smart Card, or CAC.

  • Furniture and equipment such as appliances, wall hangings, technological devices, and the relocation expenses for such property.

  • Information that can be used to distinguish or trace an individual’s identity, either alone or when combined with other information that is linked or linkable to a specific individual. Get our agency's privacy policies and practices as they apply to our employees, contractors, and clients.

  • You should only drive a privately owned vehicle for official travel after your agency evaluates the use of:

    • A common carrier
    • A government-furnished vehicle
    • A rental car

    When your agency has determined a POV to be the most advantageous method of transportation, you are authorized reimbursement for mileage and some additional allowances (parking, bridge, road and tunnel fees, etc.).

  • Approvals from GSA’s congressional authorizing committees, the U.S. Senate Committee on Environment and Public Works and the U.S. House Committee on Transportation and Infrastructure, for proposed capital and leasing projects that require funding over an annually established threshold.

  • Region 1 (New England): Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont

    Region 2 (Northeast and Caribbean): Northern New Jersey, New York, Puerto Rico, U.S. Virgin Islands

    Region 3 (Mid-Atlantic): Delaware, parts of Maryland, Southern New Jersey, Pennsylvania, parts of Virginia, West Virginia

    Region 4 (Southeast Sunbelt): Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee

    Region 5 (Great Lakes): Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin

    Region 6 (Heartland): Iowa, Kansas, Missouri, Nebraska

    Region 7 (Greater Southwest): Arkansas, Louisiana, New Mexico, Oklahoma, Texas

    Region 8 (Rocky Mountain): Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming

    Region 9 (Pacific Rim): Arizona, California, Hawaii, Nevada

    Region 10 (Northwest Arctic): Alaska, Idaho, Oregon, Washington

    Region 11 (National Capital): Washington, D.C., area including parts of Maryland and Virginia

  • Formal agreements between GSA and a federal agency customer where GSA agrees to provide goods, services, or both, and the federal agency agrees to reimburse GSA’s direct and indirect costs. The customer portal for RWA information is called eRETA at extportal.pbs.gsa.gov.

  • A document used in negotiated procurements to communicate government requirements to prospective contractors (firms holding Multiple Award Schedule contracts) and to solicit proposals (offers) from them.

  • A document used to communicate government requirements, but which do not solicit binding offers. Quotations submitted in response are not offers. The Multiple Award Schedule order is the offer, and then the contractor can do something to show acceptance, like ordering supplies or contacting subcontractors.

  • An SBA program that gives preferential consideration for certain government contracts to businesses that meet the following eligibility requirements:

    • Be a small business
    • Be at least 51% owned and controlled by one or more service-disabled veterans
    • Have one or more service-disabled veterans manage day-to-day operations and also make long-term decisions
    • Eligible veterans must have a service-connected disability
    • Permanently and totally disabled veterans who are unable to manage the daily business operations of their business may still qualify if their spouse or appointed, permanent caregiver is assisting in that management

    See Title 13 Part 128 Subpart B of the Code of Federal Regulations for more information.

  • An SBA designation for businesses that meet size standards set for each NAICS code. Most manufacturing companies with 500 employees or fewer, and most non-manufacturing businesses with average annual receipts under $7.5 million, will qualify as a small business.

    See Title 13 Part 121.201 of the Code of Federal Regulations for more information.

  • To improve and stimulate small business utilization, we award contracts to businesses that are owned and controlled by socially and economically disadvantaged individuals. We have contracting assistance for:

    • 8(a) Business Development contractors
    • Historically underutilized business zone
    • Service-disabled, veteran-owned small businesses
    • Small businesses
    • Small disadvantaged businesses
    • Veteran-owned small businesses
    • Women-owned small businesses
  • A Small Business Administration program that gives preferential consideration for certain government contracts to business that meet the following eligibility requirements:

    • Be a small business
    • The firm must be 51% or more owned and controlled by one or more disadvantaged persons
    • The disadvantaged person or persons must be socially disadvantaged and economically disadvantaged

    See Title 13 Section 124.1001 of the Code of Federal Regulations for more information.

  • The basis for the lease negotiation process, which becomes part of the lease. SFOs include the information necessary to enable prospective offerors to prepare proposals. See SFO minimum requirements.

  • Specific supply and service subcategories within our Multiple Award Schedule. For the Information Technology Category, a SIN might be new equipment or cloud services.

  • An online system at sam.gov, which the U.S. Government uses to consolidate acquisition and award systems for use by contractors wishing to do business with the federal government. Formerly known as FBO.gov, all contracting opportunities valued over $25,000 are posted at sam.gov.

  • When you use a government purchase card, such as the "GSA SmartPay" travel card for business travel, your lodging and rental car costs may be exempt from state sales tax. Individually billed account travel cards are not tax exempt in all states. Search for exemption status, forms and important information.

  • The finishes and fixtures federal agency tenants select that take a space from a shell condition to a finished, usable condition and compliant with all applicable building codes and standards.

  • A statute that applies to all Multiple Award Schedule contracts, unless otherwise stated in the solicitation or contract, which requires contractors to sell to the U.S. Government only products that are manufactured or “substantially transformed” in the U.S. or a TAA-designated country.

  • Vendors report transactional data — information generated when the government purchases goods or services from a vendor — to help us make federal government buying more effective.

    See our TDR page for which SINs are eligible and which line-item data to submit.

  • A unique number required to do business with the federal government.

  • An indicator of how efficiently a federal agency is currently using space, it is traditionally calculated by dividing the usable square feet of the space, by the number of personnel who occupy the space.

  • A Small Business Administration program that gives preferential consideration for certain government contracts to businesses that meet the following eligibility requirements:

    • Be a small business, as defined by the size standard corresponding to any NAICS code listed in the business’s SAM profile
    • Have no less than 51% of the business owned and controlled by one or more veterans
    • For those veterans who are permanently and totally disabled and unable to manage the daily business operations of their business, their business may still qualify if their spouse or appointed, permanent caregiver is assisting in that management

    Get a full list of eligibility requirements.

  • A governmentwide acquisition contract exclusively for service-disabled veteran-owned small businesses to sell IT services such as:

    • Data management
    • Information and communications technology
    • IT operations and maintenance
    • IT security
    • Software development
    • Systems design
    • New and emerging technologies
  • The amount of solid waste, such as trash or garbage, construction and demolition waste, and hazardous waste, that is reused, recycled or composted instead of being put in a landfill or burned.

  • A GSA program designed to promote recycling and reuse of solid waste.

  • A Small Business Administration program that gives preferential consideration for certain government contracts to businesses that meet the following eligibility requirements:

    • Be a small business
    • Be at least 51% owned and controlled by women who are U.S. citizens
    • Have women manage day-to-day operations who also make long-term decisions

    See Title 13 Part 127 Subpart B of the Code of Federal Regulations for more information.